Dollar General 2010 Annual Report Download - page 27

Proxy
DIRECTOR INDEPENDENCE
Is Dollar General subject to the NYSE governance rules regarding director independence?
Buck Holdings, L.P. controls a majority of our outstanding common stock. As a result, we are a
‘‘controlled company’’ within the meaning of the NYSE corporate governance standards. Under the
NYSE rules, a company of which more than 50% of the voting power is held by an individual, group or
another company is a ‘‘controlled company’’ and may elect not to comply with certain NYSE corporate
governance standards, including:
• the requirement that we have a majority of the Board of Directors that consists of
independent directors; and
• the requirements that we have a compensation committee and a nominating/corporate
governance committee that are composed entirely of independent directors.
We are, however, subject to the NYSE and SEC rules that require full independence of our
Audit Committee. As a result, our Audit Committee is entirely comprised of independent directors, but
we do not have a majority of independent directors on our Board, and our Compensation Committee
and our Nominating and Corporate Governance Committee do not consist entirely of independent
directors.
How does the Board determine director independence?
The Board of Directors affirmatively determines the independence of each director and
director nominee in accordance with guidelines it has adopted, which include all elements of
independence set forth in the NYSE listing standards as well as certain Board-adopted categorical
independence standards. These guidelines are contained in our Corporate Governance Guidelines
which are posted on the ‘‘Investor Information—Corporate Governance’’ portion of our web site
located at www.dollargeneral.com.
The Board first analyzes whether any director has a relationship covered by the NYSE listing
standards that would prohibit an independence finding for Board or Audit Committee purposes. The
Board then analyzes any relationship of a director to Dollar General or to our management that does
not fall within the parameters set forth in the Board’s separately adopted categorical independence
standards to determine whether or not that relationship is material. The Board may determine that a
director who has a relationship that falls outside of the parameters of the categorical independence
standards is nonetheless independent (to the extent that the relationship would not constitute a bar to
independence under the NYSE listing standards). Any director who has a material relationship is not
considered to be independent.
Are all of the current directors and nominees independent?
Our Board of Directors consists of Raj Agrawal, Warren Bryant, Mike Calbert, Richard
Dreiling, Adrian Jones, Bill Rhodes and Dave Rickard. Messrs. Bryant, Rhodes and Rickard serve on
our Audit Committee. Messrs. Agrawal, Bryant, Calbert, Jones and Rhodes serve on our Compensation
Committee. Messrs. Agrawal, Calbert and Jones serve on our Nominating and Corporate Governance
Committee.
Our Board of Directors has affirmatively determined that Messrs. Bryant, Rhodes and Rickard,
but not Messrs. Agrawal, Calbert, Dreiling or Jones, are independent from our management under
both the NYSE’s listing standards and our additional standards. Any relationship between an
independent director and Dollar General or our management fell within the Board-adopted categorical
standards and, accordingly, was not reviewed or considered by our Board.
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