Big Lots 2008 Annual Report Download - page 32

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The lowest level at which we will pay a bonus under the 2006 Bonus Plan is referred to as the “floor.”
The level at which we plan our performance and the payout under the 2006 Bonus Plan is referred to as
the “target.” The maximum level at which we will pay a bonus under the 2006 Bonus Plan is referred
to as the “stretch.” If our performance in a fiscal year exceeds the minimum corporate performance
amount that earns a floor bonus, there is a corresponding increase in the amount of the bonus (up to a
maximum at the stretch bonus level). However, a bonus is not paid under the 2006 Bonus Plan if we do
not achieve at least the minimum corporate performance amount. Bonuses paid to the named executive
officers under the 2006 Bonus Plan are considered “Non-Equity Incentive Plan Compensation” in the
Summary Compensation Table. See the “Bonus and Equity Plans” disclosure that follows the Summary
Compensation Table for more information concerning the 2006 Bonus Plan.
• Equity
All equity awards granted to the named executive officers since January 1, 2006 have been issued under
the 2005 Incentive Plan. Although the 2005 Incentive Plan allows us to issue various types of equity
awards, we have granted only stock options and restricted stock under the 2005 Incentive Plan. The
stock options vest based on the passage of time. The restricted stock vests based on the achievement
of the first trigger and then the achievement of the second trigger, the passage of time, or the
executive’s death or disability. See the “Bonus and Equity Plans” disclosure that follows the Summary
Compensation Table for more information concerning the 2005 Incentive Plan and the terms under
which we have granted equity awards.
• Personal Benefits/Perquisites
The following are the personal benefits and perquisites that are generally provided only to employees
at or above the vice president level: (i) coverage under the Big Lots Executive Benefit Plan (“Executive
Benefit Plan”); (ii) enhanced long-term disability insurance coverage; and (iii) use of an automobile or
payment of an automobile allowance. We believe that these personal benefits and perquisites, though
immaterial to us in amount, are an important element of total compensation provided to our executives
because of the value our executives place on these benefits and the convenience of having these benefits
when faced with the demands of their positions. The Committee evaluates and determines the personal
benefits and perquisites received by named executive officers during its annual review of the named
executive officers’ total compensation.
We offer all full-time employees medical and dental benefits under the Big Lots Associate Benefit Plan
(“Benefit Plan”). We also offer employees at or above the vice president level, including the named
executive officers, the opportunity to participate in the Executive Benefit Plan, which reimburses
executives for health-related costs incurred but not covered under the Benefit Plan, up to an annual
maximum reimbursement of $40,000 per family. Amounts received by named executive officers
under the Executive Benefit Plan are treated as taxable income, and we reimburse each executive
the approximate amount of his or her income tax liability relating to the benefits received under the
Executive Benefit Plan.
We also offer short-term disability coverage to all full-time employees and long-term disability
coverage to all salaried employees. For the named executive officers, the benefits provided under the
long-term disability plan are greater than for employees below the vice president level. Under the long-
term disability coverage, a named executive officer may receive 67% of his or her monthly salary, up to
$25,000 per month, until the executive is no longer disabled or turns age 65, whichever occurs earlier.
We also pay the premiums for this long-term disability coverage and the amount necessary to hold the
named executive officer harmless from the income taxes resulting from such premium payments.
All employees at or above the vice president level have the option of the use of an automobile or
accepting a monthly automobile allowance. The value of the automobile and the amount of the
automobile allowance are determined based on the employee’s level.
Employment Agreements
Each named executive officer is party to an employment agreement with us. The terms of the employment
agreements are substantially similar and are described collectively herein except where their terms materially differ.