Big Lots 2007 Annual Report Download - page 32

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Employment Agreements
Each named executive officer is party to an employment agreement with us. The terms of the employment
agreements are substantially similar and are described collectively herein except where their terms materially differ.
We entered into the employment agreements because the agreements, in exchange for minimum salary levels
and target and stretch bonus payout percentages, potential severance and change in control payments and other
consideration, provide us with several protections, including non-competition, confidentiality, non-solicitation
and continuing cooperation provisions, as discussed below. Further, we believe it is in our best interests and the
best interests of our shareholders to enter into these employment agreements to assure the undivided loyalty and
dedication of the named executive officers.
Each employment agreement, including the minimum salary levels and target and stretch bonus payout percentages
set forth therein, was negotiated with the executive. In those negotiations, we considered many factors, including:
• our need for the executive;
• the skills and past and anticipated future performance of the executive;
• the degree to which we believe the executive will be able to help improve our business;
• the compensation being paid to similarly-situated executives at peer group companies;
• to the extent applicable, the other elements of compensation being offered to the executive and the
amount of compensation being paid to the executive by another employer;
• the relationship between the compensation being offered to the executive and that being paid to the
other EMC members; and
• our perception of our bargaining power and the executive’s bargaining power.
Under the terms of their employment agreements, the named executive officers are each entitled to receive at least
the following salaries, which amounts are not subject to automatic increases: Mr. Fishman: $960,000; Mr. Cooper:
$350,000; Mr. Waite: $405,000; Mr. Martin: $450,000; and Ms. Bachmann: $325,000. The terms of each named
executive officer’s employment agreement establishes the smallest payout percentages that may be set annually
for his or her target and stretch bonus levels. The payout percentages set by the employment agreements for target
bonus and stretch bonus, respectively, are as follows (expressed as a percentage of the executive’s salary): Mr.
Fishman: 100% and 200%; Mr. Cooper: 50% and 100%; Mr. Waite: 60% and 120%; Mr. Martin: 60% and 120%;
and Ms. Bachmann: 50% and 100%.
Upon entry into the employment agreements, these salaries and payout percentages were commensurate with each
named executive officer’s job responsibilities, overall individual performance, experience, qualifications, and
salaries and payout percentages provided to similarly-situated executives at peer group companies. Because the
various factors considered when evaluating each named executive officer’s salary and bonus opportunity change,
the Committee reviews the salaries and payout percentages annually and adjustments are made if warranted. See
the “Salary for Fiscal 2007” and “Bonus for Fiscal 2007” sections of this CD&A for a discussion of the salaries and
payout percentages for the named executive officers for fiscal 2007.
Each employment agreement requires the named executive officer to devote his or her full business time to
our affairs and prohibits the named executive officer from competing with us during his or her employment.
Mr. Fishman’s employment agreement includes several restrictive covenants that survive the termination of his
employment, including confidentiality (infinite), non-solicitation (two years), non-competition (one year, but
reduced to six months following a change in control), continuing cooperation (three years), and non-disparagement
(infinite). Mr. Cooper’s employment agreement includes several restrictive covenants and agreements that survive
the termination of his employment, including confidentiality (infinite), non-solicitation of employees and vendors
(two years), non-competition (one year, but reduced to six months following a change in control), continuing
cooperation (infinite), and non-disparagement (infinite). The employment agreements with Mr. Waite, Mr. Martin
and Ms. Bachmann include several restrictive covenants and agreements that survive the termination of his or her
employment, including non-competition (one year), confidentiality (two years) and non-solicitation (two years).