Dollar General 2010 Annual Report Download - page 16

Proxy
The Nominating and Corporate Governance Committee’s charter and our Corporate
Governance Guidelines require the Committee to consider candidates timely submitted by our
shareholders in accordance with the notice provisions and procedures set forth in our Bylaws (as
described below under ‘‘Can shareholders nominate directors?’’) and to apply the same criteria to the
evaluation of those candidates as the Committee applies to other director candidates. The Committee
may also use a variety of other methods to identify potential director candidates, such as
recommendations by our directors, management, or third party search firms. No third party search firm
is currently retained to assist in that process. Our Board is responsible for nominating the slate of
directors to be elected by our shareholders at the annual meeting, upon the Committee’s
recommendation.
Our directors, Messrs. Agrawal, Calbert, Dreiling and Jones, are managers of Buck
Holdings, LLC, which serves as the general partner of Buck Holdings, L.P. The Second Amended and
Restated Limited Liability Company Agreement of Buck Holdings, LLC generally requires that Buck
Holdings, LLC cause any of our common stock held by Buck Holdings, L.P. to be voted in favor of any
person designated to be a member of our Board pursuant to our shareholders’ agreement with Buck
Holdings, L.P. described below.
Pursuant to our shareholders’ agreement with Buck Holdings, L.P. and the sponsor
shareholders identified in that agreement, certain of our shareholders have the right to designate
nominees to our Board, subject to their election by our shareholders at the annual meeting.
Specifically, KKR 2006 Fund L.P., KKR PEI Investments, L.P., KKR Partners III, L.P., 8 North America
Investor LP and their respective permitted transferees (collectively, the ‘‘KKR Shareholders’’) have the
right to designate the following percentage of the number of total directors comprising our Board so
long as Buck Holdings, L.P. beneficially owns the following specified amount of the then outstanding
shares of our common stock:
Beneficial Ownership of Dollar General
% of Directors KKR may Designate Common Stock by Buck Holdings, L.P.
Up to a majority >50%
Up to 40% >40% but < or equal to 50%
Up to 30% >30% but < or equal to 40%
Up to 20% >20% but < or equal to 30%
Up to 10% At least 5%
Any fractional amount that results from determining the percentage of the total number of
directors will be rounded up to the nearest whole number (for example, if the applicable percentage
would result in 2.1 directors, the KKR Shareholders will have the right to designate 3 directors). In
addition, in the event that the KKR Shareholders only have the right to designate one director, they
also have the right to designate one person to serve as a non-voting observer to the Board.
In addition, pursuant to the shareholders’ agreement, GS Capital Partners VI Fund, L.P., GS
Capital Partners VI Parallel, L.P., GS Capital Partners VI GmbH & Co. KG, GS Capital Partners VI
Offshore Fund, L.P., GSUIG, L.L.C., Goldman Sachs DGC Investors, L.P. and Goldman Sachs DGC
Investors Offshore Holdings, L.P., and their permitted transferees (collectively, the ‘‘Goldman
Shareholders’’) have the right to designate (i) one director so long as they beneficially own at least 5%
of the then outstanding shares of our common stock and (ii) one person to serve as a non-voting
observer.
Each of the KKR Shareholders and the Goldman Shareholders have the right to remove and
replace their director-designees at any time and for any reason and to fill any vacancies otherwise
resulting in such director positions.
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