Dollar General 2010 Annual Report Download - page 17

Proxy
Pursuant to the shareholders’ agreement, the KKR Shareholders have nominated
Messrs. Calbert and Agrawal, and the Goldman Shareholders have nominated Mr. Jones. These
nominees, like all of our director nominees, are subject to election by our shareholders at our annual
meeting.
Given current beneficial ownership by Buck Holdings, L.P. of our common stock, we are a
‘‘controlled company’’ under New York Stock Exchange (‘‘NYSE’’) listing standards. For as long as we
continue to qualify as a ‘‘controlled company’’ under NYSE listing standards and subject to applicable
law, (i) the KKR Shareholders have the right to designate a majority of the members of our
Nominating and Corporate Governance Committee and up to two members of our Compensation
Committee and (ii) the Goldman Shareholders have the right to designate one member to each such
committee, as long as the Goldman Shareholders have the right to designate one director to our Board.
If we do not qualify as a ‘‘controlled company’’ under NYSE listing standards, the KKR Shareholders
have the right to designate one member to each of our Nominating and Corporate Governance
Committee and Compensation Committee for as long as they have the right to designate one director
to our Board.
In addition, our employment agreement with Mr. Dreiling provides that (1) our Nominating
and Corporate Governance Committee shall nominate him to serve as a member of our Board each
year that he is slated for reelection to the Board; and (2) Dollar General shall also recommend to the
Board that Mr. Dreiling serve as Chairman of the Board. Failure to nominate Mr. Dreiling for election
by our shareholders to our Board would give rise to a breach of contract claim.
Our CEO initially recommended Messrs. Bryant and Rhodes to our Board for consideration,
while Mr. Rickard was initially recommended by certain of our non-management directors.
How are nominees evaluated; what are the minimum qualifications?
Subject to the shareholders’ agreement and Mr. Dreiling’s employment agreement discussed
above, the Nominating and Corporate Governance Committee is charged with identifying, recruiting
and recommending to the Board only those candidates that the Committee believes are qualified to
become Board members consistent with the criteria for selection of new directors adopted from time to
time by the Board. We have a policy to strive to have a Board representing diverse experience at
policy-making levels in business, education or other areas that are relevant to our business. To
implement this policy, the Committee assesses diversity in evaluating each candidate’s individual
qualifications in the context of how that candidate would relate to the Board as a whole. The
Committee will periodically assess the effectiveness of this policy by considering whether the Board as a
whole represents such diverse experience and recommending to the Board changes to the criteria for
selection of new directors as appropriate. The Committee recommends candidates, including those
submitted by shareholders, only if the Committee believes the candidate’s knowledge, experience and
expertise would strengthen the Board and that the candidate is committed to representing the
long-term interests of all Dollar General shareholders.
For as long as we continue to qualify as a ‘‘controlled company’’ under NYSE listing standards,
we do not have to comply with the general NYSE rule that a majority of the Board be independent.
The Nominating and Corporate Governance Committee assesses a candidate’s independence,
background and experience, as well as the current Board’s skill needs and diversity. With respect to
incumbent directors selected for re-election, the Committee assesses each director’s meeting attendance
record and the suitability of continued service. In addition, individual directors and any nominee should
be in a position to devote an adequate amount of time to the effective performance of director duties
and possess the following characteristics: integrity and accountability, informed judgment, financial
literacy, a cooperative approach, a record of achievement, loyalty, and the ability to consult with and
advise management.
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