Big Lots 2011 Annual Report Download - page 34

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remaining restrictions applicable to restricted stock and restricted stock units shall lapse and such restricted
stock and restricted stock units shall become free of restrictions, fully vested and transferable or redeemed, as
applicable; (3) all performance goals or other conditions applicable to performance shares, performance share
units or performance units shall be deemed satisfied in full and the common shares or cash subject to such Award
shall be fully distributable; (4) any remaining restrictions, performance goals or other conditions applicable to
deferred stock units shall be deemed to be satisfied in full with the common shares or cash subject to such Award
being fully distributable; and (5) all outstanding other stock-based awards or cash-based awards shall become
fully vested. Payments under Awards that become subject to the excess parachute rules of Section 280G of the
IRC may be reduced under certain circumstances. See the “Tax Treatment of Awards — Sections 280G and 4999”
subsection below for more details.
Limited Transferability
All Awards or common shares subject to an Award under the 2012 LTIP are nontransferable except upon death,
either by the participant’s will or the laws of descent and distribution or through a beneficiary designation, and
Awards are exercisable during the participant’s lifetime only by the participant (or by the participant’s legal
representative in the event of the participant’s incapacity).
Adjustments for Corporate Changes
In the event of a reorganization, recapitalization, merger, spin-off, stock split or other specified changes affecting
us or our capital structure, the Committee is required to make equitable adjustments that reflect the effects of such
changes to the participants. Such adjustments may relate to the number of our common shares available for grant,
as well as to other maximum limitations under the 2012 LTIP (e.g., exercise prices and number of Awards), and the
number of our common shares or other rights and prices under outstanding Awards.
Term, Amendment and Termination
The 2012 LTIP will have a term of 10 years expiring on May 23, 2022, unless terminated earlier by the Board.
Although the Board or the Committee may amend or alter the 2012 LTIP, it may not do so without shareholder
approval of any amendment or alteration to the extent shareholder approval is required by law, regulation or stock
exchange rule. In addition, any amendment, alteration or termination of the 2012 LTIP or an Award agreement
may not adversely affect any outstanding Award to a participant without the consent of that participant other than
amendments for the purpose of (1) causing the 2012 LTIP to comply with applicable law, (2) permitting us to
receive a tax deduction under applicable law, or (3) avoiding an expense charge to us or our affiliates.
Plan Benefits
Future benefits under the 2012 LTIP are not currently determinable. The Committee has discretionary authority to
grant Awards pursuant to the 2012 LTIP which does not contain any provision for automatic grants.
Federal Income Tax Treatment of Awards
The following summary discussion of the United States federal income tax implications of Awards under the 2012
LTIP is based on the provisions of the IRC as of the date of this Proxy Statement. This summary is not intended
to be exhaustive and does not, among other things, describe state, local or foreign tax consequences and such
tax consequences may not correspond to the federal income tax treatment described herein. The exact federal
income tax treatment of transactions could vary depending upon the specific facts and circumstances involved
and participants are advised to consult their personal tax advisors with regard to all consequences arising from the
grant, vesting or exercise of Awards and the disposition of any acquired common shares.
Incentive Stock Options
ISOs may only be granted to our employees. No taxable ordinary income to the participant or a deduction to us will
be realized at the time the ISO is granted or exercised. However, the excess of the fair market value of the common
shares acquired over the stock option exercise price is an item of adjustment in computing the alternative minimum
taxable income of the participant. If the participant holds the common shares received as a result of an exercise of
an ISO for at least two years from the grant date and one year from the exercise date, then (1) any gain realized on