Big Lots 2008 Annual Report Download - page 56

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If a change in control occurs, then all outstanding stock options become exercisable upon the change in control
to the full extent of the original grant and all unvested restricted stock vests. Upon the named executive officer’s
termination of employment, all exercisable stock options then held may be exercised until the earlier of the
stock option award expiration date or one year after termination of employment. Additionally, if termination of
employment results from death or disability, then unvested restricted stock awards made under the 2005 Incentive
Plan will vest in increments of 20% for each consecutive year of employment completed since the grant date if
the first trigger is met while employed. Any restricted stock awards not vested at termination of employment, for
reasons other than death or disability, shall be forfeited.
Each named executive officer is entitled to receive continued healthcare coverage for up to two years following
a termination without cause or if terminated in connection with a change in control, plus the amount necessary
to reimburse him or her for the taxes he or she would be liable for as a result of such continued healthcare
coverage (“Tax Gross-Up Amount”). Upon a change in control, each participating named executive officer will
receive a lump sum payment of all amounts (vested and unvested) under the Supplemental Savings Plan. (See the
“Nonqualified Deferred Compensation” section above for more information regarding the Supplemental Savings
Plan and the named executive officers’ aggregate balances under such plans at the end of fiscal 2008.) Additionally,
if terminated without cause, Mr. Fishman is entitled to continue receiving an automobile or automobile allowance
for two years, and the other named executive officers are entitled to continue receiving an automobile or
automobile allowance for one year.
If the payments received by a named executive officer in connection with a change in control constitute an “excess
parachute payment” under Section 280G of the IRC, the named executive officer is entitled to reimbursement for
any excise tax imposed under Section 4999 of the IRC, or the executive’s benefits under his or her employment
agreement will be reduced to the extent necessary to become one dollar less than the amount that would generate
such excise tax, if this reduction results in a larger after-tax amount to the executive as compared to the excise tax
reimbursement method (“Excise Tax Benefit”). The compensation payable on account of a change in control may
be subject to the deductibility limitations of Sections 162(m) and 280G of the IRC.
Change in Control Described
Generally, pursuant to the 1996 Incentive Plan, the 2005 Incentive Plan and the Supplemental Savings Plan (as to
amounts earned and vested before January 1, 2005, including earnings attributable to such amounts), a change in
control is deemed to occur if:
• any person or group (as defined in Section 13(d) under the Exchange Act) becomes the beneficial owner,
or has the right to acquire, 20% or more of our outstanding voting securities;
• a majority of the Board is replaced within any two year period by directors not nominated and approved
by a majority of the directors in office at the beginning of such period (or their successors so nominated
and approved), or a majority of the Board at any date consists of persons not so nominated and
approved; or
• our shareholders approve an agreement to merge or consolidate with an unrelated company or an
agreement to sell or otherwise dispose of all or substantially all of our assets to an unrelated company.
Consistent with the provisions of Section 409A and the Treasury Regulations promulgated thereunder, pursuant
to the named executive officers’ employment agreements, the 2006 Bonus Plan, the Supplemental Pension Plan
and the Supplemental Savings Plan (as to all amounts earned and vested on or after January 1, 2005), a change in
control is deemed to occur upon:
• the acquisition by any person or group (as defined under Section 409A) of our common shares that,
together with any of our common shares then held by such person or group, constitutes more than 50%
of the total fair market value or voting power in our outstanding voting securities;
• the acquisition by any person or group, within any one year period, of 30% or more of our outstanding
voting securities;
• a majority of the Board is replaced during any one year period by directors whose appointment or
election is not endorsed by a majority of the directors in office prior to the date of such appointment or
election; or