Big Lots 2008 Annual Report Download - page 34

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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.
Each named executive officer’s employment agreement also includes several restrictive covenants that survive
the termination of his or her employment, including confidentiality (infinite), non-solicitation (two years),
non-disparagement (infinite), non-competition (one year but reduced to six months following a change in control),
and continuing cooperation (three years for Mr. Fishman and infinite for the other named executive officers).
Unless the executive and we mutually agree to amend or terminate his or her employment agreement, its terms will
remain unchanged and it will remain effective as long as we employ the executive. The consequences of termination
of employment under the employment agreement depend on the circumstances of the termination of employment.
Post-Termination and Change in Control Arrangements
The employment agreements with the named executive officers provide for potential severance and change
in control payments and other consideration. The terms of these employment agreements were set through
negotiation, during which we considered the various factors discussed in the prior section. Our equity
compensation plans also provide for the accelerated vesting of outstanding stock options and restricted stock in
connection with a change in control.
The severance provisions of the employment agreements are intended to address competitive concerns by
providing the executives with compensation that may alleviate the uncertainty associated with foregoing other
opportunities and, if applicable, leaving another employer. The change in control provisions of the employment
agreements dictate that the executive receives certain cash payments and other benefits only if there is a change in
control and the executive is terminated in connection with the change in control. This “double trigger” is intended
to allow us to rely upon each named executive officer’s continued employment and objective advice, without
concern that the named executive officer might be distracted by the personal uncertainties and risks created by an
actual or proposed change in control. These potential benefits provide the named executive officers with important
protections that we believe are necessary to attract and retain executive talent.
While the Committee considers the potential payments upon termination or change in control annually when it
establishes compensation for the applicable year, this information is not a primary consideration in setting salary,
bonus payout percentages or equity compensation. We believe that the objectives of attracting and retaining
qualified executives and providing incentives for executives to continue their employment with us would not be
adequately served if potential payments to a named executive officer upon termination or change in control were a
determinative factor in awarding current compensation.
See the “Potential Payments Upon Termination or Change in Control” narrative disclosure and tables following
this CD&A for a discussion of compensation that may be paid to the named executive officers in connection with a
change in control or the termination of their employment with us.
Indemnification Agreements
Each named executive officer is party to an indemnification agreement with us. Each indemnification agreement
provides the named executive officer with a contractual right to indemnification from us in the event the executive
becomes subject to a threatened or actual claim or lawsuit arising out of his or her service to us, unless the act
or omission of the executive giving rise to the claim for indemnification was occasioned by his or her intent to
cause injury to us or by his or her reckless disregard for our best interests, and, in respect of any criminal action
or proceeding, he or she had reasonable cause to believe his or her conduct was unlawful. The indemnification
agreements are intended to allow us to rely upon each named executive officer’s objective advice, without concern
that the named executive officer might be distracted by the personal uncertainties and risks created by a threatened
or actual claim or lawsuit. This provides the named executive officers with important protections that we believe
are necessary to attract and retain executive talent.
Retirement Plans
We maintain four retirement plans: (i) a tax-qualified, funded noncontributory defined benefit pension plan
(“Pension Plan”); (ii) a non-qualified, unfunded supplemental defined benefit pension plan (“Supplemental Pension
Plan”); (iii) a tax-qualified defined contribution plan (“Savings Plan”); and (iv) a non-qualified supplemental