Big Lots 2011 Annual Report Download - page 47

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We negotiated the terms of each employment agreement, including the minimum salary levels and minimum target
and stretch bonus payout percentages set forth therein, with the executive. In those negotiations, we considered
many factors, including:
• our need for the services of the executive;
• the executive’s level of responsibility and the potential impact that the executive could have on our
operations and financial condition;
• 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;
• the relationship between the compensation being offered to the executive and that being paid to the
other EMC members;
• our perception of our bargaining power and the executive’s bargaining power; and
• to the extent applicable, the elements and amounts of compensation being offered or paid to the
executive by another employer.
Under the terms of their employment agreements, our named executive officers are each entitled to receive at
least the following salaries, which amounts are not subject to automatic increases: Mr. Fishman: $1,200,000;
Mr. Cooper: $440,000; Ms. Bachmann: $440,000; Mr. Haubiel: $350,000; and Mr. Martin: $520,000. The terms of
each named executive officer’s employment agreement also establish the minimum payout percentages that may be
set annually for his or her target and stretch bonus levels. The minimum 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: 60% and 120%; Ms. Bachmann: 60% and 120%;
Mr. Haubiel: 50% and 100%; and Mr. Martin: 60% and 120%.
Upon our entry into the employment agreements with our named executive officers, we believed, based on the
contemporaneous annual executive compensation review completed by the Committee, the executives’ salaries and
payout percentages were commensurate with each executive’s overall individual performance, job responsibilities,
experience, qualifications and salaries and the payout percentages provided to similarly-situated executives at
peer companies. Because the various factors considered when evaluating each named executive officer’s salary
and payout percentages change, the Committee annually reviews and, if warranted, adjusts the actual salaries and
payout percentages for our named executive officers. See the “Salary for Fiscal 2011” and “Bonus for Fiscal 2011”
sections of this CD&A for a further discussion of the salaries and payout percentages for our named executive
officers for fiscal 2011.
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 agreements depend on the circumstances of the termination.
Retention Agreement
Upon the recommendation of the Committee and the approval of the other outside directors, we entered into a
retention agreement with Mr. Fishman in March 2010. The Committee and the other outside directors believed
it was in the best interests of Big Lots and our shareholders to enter into the retention agreement to (1) better
assure the continuing undivided loyalty and dedication of Mr. Fishman, (2) establish a more efficient manner
for delivering compensation to Mr. Fishman and (3) provide compensation that is tax deductible qualified