Dollar General 2012 Annual Report Download - page 26

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DIRECTOR INDEPENDENCE
Is Dollar General subject to the NYSE governance rules regarding director independence?
Yes. A majority of our directors must be independent in accordance with the independence
requirements set forth in the NYSE listing standards. In addition, the Audit Committee, the
Compensation Committee and the Nominating and Governance Committee must be composed solely of
independent directors to comply with such listing standards and, in the case of the Audit Committee,
with SEC rules. The NYSE listing standards define specific relationships that disqualify directors from
being independent and further require that for a director to qualify as ‘‘independent,’’ the Board must
affirmatively determine that the director has no material relationship with our company. The SEC’s
rules contain a separate definition of independence for members of audit committees and the NYSE
listing standards contain a separate definition (to take effect in 2013) of independence for
compensation committees.
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 website located
at www.dollargeneral.com.
The Board first analyzes whether any director or director nominee has a relationship covered
by the NYSE listing standards that would prohibit an independence finding for Board, Audit
Committee, Compensation Committee or Nominating and Governance Committee purposes. The
Board then analyzes any relationship of the remaining eligible directors and nominees to Dollar
General or to our management that falls outside the parameters of the Board’s separately adopted
categorical independence standards to determine whether or not that relationship is material. The
Board may determine that a director or nominee 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. The Board does not
consider or analyze any relationship that falls within the parameters of the Board’s separately adopted
categorical independence standards.
Are all of the current directors and nominees independent?
No. Our Board of Directors consists of Raj Agrawal, Warren Bryant, Mike Calbert, Sandra
Cochran, Richard Dreiling, Patricia Fili-Krushel, Adrian Jones, Bill Rhodes and Dave Rickard.
Messrs. Bryant and Rickard and Ms. Cochran serve on our Audit Committee, Messrs. Bryant and
Rhodes and Ms. Fili-Krushel serve on our Compensation Committee, and Mr. Rhodes and
Mss. Cochran and Fili-Krushel serve on our Nominating and Governance Committee.
Our Board of Directors has affirmatively determined that Messrs. Bryant, Rhodes and Rickard
and Mss. Cochran and Fili-Krushel, but not Messrs. Agrawal, Calbert, Dreiling or Jones, are
independent from our management under both the NYSE’s listing standards and our additional
standards. Except as described below, 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. The Board has also determined that the currently serving
members of the Audit Committee and the Compensation Committee meet the independence standards
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