Dollar General 2012 Annual Report Download - page 15

Proxy
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’’), given
the current ownership level of Buck Holdings, L.P. of our common stock, have the right to designate up
to 10% of the number of total directors comprising our Board, as well as the right to designate one
person to serve as a non-voting Board observer. Any fractional amount that results from determining
the percentage of the total number of directors will be rounded up to the next whole number. The
KKR Shareholders will retain these rights for as long as Buck Holdings, L.P. owns at least 5% of our
outstanding common stock.
The KKR Shareholders have the right to remove and replace their director-designee at any
time and for any reason and to fill any vacancy otherwise resulting in such position.
Pursuant to the shareholders’ agreement, the KKR Shareholders have nominated Mr. Calbert
to serve on our Board. Mr. Calbert, like all of our director nominees, is subject to election by our
shareholders at the annual meeting.
In addition, our employment agreement with Mr. Dreiling requires Dollar General to
(1) nominate him to serve as a member of our Board each year that he is slated for reelection to the
Board; and (2) recommend to the Board that Mr. Dreiling serve as Chairman of the Board. Our failure
to do so would give rise to a breach of contract claim.
How are nominees evaluated; what are the minimum qualifications?
Subject to the shareholders’ agreement and Mr. Dreiling’s employment agreement discussed
above, the Nominating Committee is charged with recommending to the Board only those candidates
that it 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 written policy to strive to have a Board
representing diverse experience at policy-making levels in areas that are relevant to our business. To
implement this policy, the Nominating Committee assesses diversity by evaluating each candidate’s
individual qualifications in the context of how that candidate would relate to the Board as a whole. The
Committee periodically assesses 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 it 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.
The Nominating 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.
What particular experience, qualifications, attributes or skills led the Board of Directors to conclude
that each nominee should serve as a director of Dollar General?
Our Board of Directors believes that each of the nominees can devote an adequate amount of
time to the effective performance of director duties and possesses the minimum qualifications identified
above. The Board has determined that the nominees, as a whole, complement each other, meet the
Board’s skill needs, and represent diverse experience at policy-making levels in areas relevant to our
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