Big Lots 2007 Annual Report Download - page 59

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Incentive Plan. However, the following types of common shares may not become again available for issuance as
an Award: (i) common shares tendered by participants as full or partial payment to us upon the exercise of Awards
granted under the 2005 Incentive Plan; (ii) common shares underlying an exercised SAR that are not issued
upon the settlement of such SAR; and (iii) common shares withheld by, or otherwise remitted to, us to meet our
withholding obligations arising upon the exercise of any Award.
Eligibility and Participation
With the approval of the proposed amendments, in the Committee’s discretion, all of our directors and all of our
and our affiliates’ salaried employees, consultants and advisors will be eligible to participate in the 2005 Incentive
Plan. As of the record date, we had no employees and our affiliates had approximately 3,900 salaried employees.
In fiscal 2008, approximately 90 of our affiliates’ employees (and no consultants or advisors) have received or
are expected to receive Awards under the 2005 Incentive Plan, although this may vary from year to year. If our
shareholders approve the proposed amendments, we anticipate making Awards to all eight of our outside directors
in fiscal 2008. From time to time, the Committee will determine who will be granted Awards, the number of shares
subject to such Awards, and all other terms of the Awards.
Awards
Since January 1, 2006, equity compensation awards to employees have been limited to NQSOs and restricted stock
under the 2005 Incentive Plan. Our current equity compensation awards to outside directors are limited to NQSOs
under the Director Stock Option Plan. The 2005 Incentive Plan authorizes the grant of NQSOs, ISOs, SARs,
restricted stock, restricted stock units and performance units, each of which is described below.
Stock Options
Stock options granted under the 2005 Incentive Plan may be either NQSOs or ISOs. The exercise price of any stock
option granted may not be less than the fair market value of our common shares on the grant date. The stock option
exercise price is payable in cash, by certified check, with our common shares, through a broker-assisted cashless
exercise, by withholding common shares subject to the stock option having a fair value equal to the stock option
exercise price, or any combination of the foregoing.
The Committee determines the terms of each stock option grant at the time of the grant. However, the aggregate
fair market value (determined as of the grant date) of the common shares subject to ISOs that are exercisable by
any participant for the first time in any calendar year under all of our plans may not be larger than $100,000. The
Committee specifies at the time each stock option is granted the time or times at which, and in what proportions,
the stock option becomes vested and exercisable. In general, no stock options shall be exercisable in fewer than
six months after the grant date and no more than one-third of the common shares underlying a stock option shall
become exercisable before each of the first three anniversary dates after the grant date. Additionally, a stock
option that vests upon the attainment of a specified business performance goal established by the Committee may
not be exercised sooner than one year after the grant date. Pursuant to the terms of the 2005 Incentive Plan, the
Committee may accelerate the vesting of stock options. A stock option shall expire no later than 10 years after the
grant date. In general, a stock option expires upon the earlier of (i) its stated expiration date or (ii) one year after
the participant terminates service (except in the case of ISOs which must be exercised within three months after
termination of service).
Stock Appreciation Rights
A SAR entitles the participant, upon settlement, to receive a payment based on the excess of the fair market value
of our common shares on the settlement date over the base price of the SAR, multiplied by the number of SARs
being settled. The base price of a SAR may not be less than the fair market value of our common shares on the
grant date. SARs may be payable in cash, our common shares or a combination of both.
The Committee determines the vesting requirements and the payment and other terms of a SAR. Vesting may
be based on the continued service of the participant for specified time periods or the attainment of a specified
business performance goal established by the Committee or both. In general, no more than one-third of a SAR may
be exercised before each of the first three anniversary dates after the grant date. However, if vesting is based on
the attainment of a specified business performance goal established by the Committee, then the SAR may not vest