Big Lots 2008 Annual Report Download - page 57

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• the acquisition by any person or group, within any one year period, of 40% or more of the total gross
fair market value of all of our assets, as measured immediately prior to such acquisition(s).
Notwithstanding the foregoing definitions, pursuant to the named executive officers’ employment agreements, the 1996
Incentive Plan, the 2005 Incentive Plan and the 2006 Bonus Plan, a change in control does not include any transaction,
merger, consolidation or reorganization in which we exchange, or offer to exchange, newly issued or treasury shares in
an amount less than 50% of our then-outstanding voting securities for 51% or more of the outstanding voting securities
of an unrelated company or for all or substantially all of the assets of such unrelated company.
Pursuant to the employment agreements, a named executive officer’s termination in connection with a change in
control is generally deemed to occur if, during the applicable protection period (as discussed in the next paragraph),
we or any other party to the change in control (e.g., the unrelated acquirer or successor company):
• terminate the executive without cause;
• breach a term of the employment agreement; or
• constructively terminate the executive (i.e., the executive resigns due to the imposition of a material
adverse change in the executive’s duties, compensation or reporting relationships after our failure to
cure such condition).
The protection period afforded to Mr. Fishman consists of the six months preceding a change in control and the two
years following a change in control. The protection period afforded to the other named executive officers consists
of the three months preceding a change in control and the two years following a change in control.
Estimated Payments if Triggering Event Occurred at 2008 Fiscal Year-End
The amounts in the following tables are approximations based on various assumptions and estimates. The actual
amounts to be paid can only be determined at the time of the change in control or termination of employment,
as applicable. In the tables that follow, we have made the following material assumptions, estimates and
characterizations:
• Amounts are calculated based on compensation levels and benefits effective at January 31, 2009, the end
of fiscal 2008.
• As noted in the “Non-Equity Incentive Plan Compensation” row in the tables below, the amounts
payable under the 2006 Bonus Plan upon termination: (i) without cause or due to disability or death
are based on the bonus actually earned by the applicable named executive officer for fiscal 2008
performance (which amounts would be prorated if the executive was terminated prior to the end of the
fiscal year for which the bonus was earned); and (ii) in connection with a change in control are equal to
two times the named executive officer’s stretch bonus.
• We have not taken into account the possibility that a named executive officer may be eligible to receive
healthcare benefits from another source following his or her termination. Therefore, the amounts shown
in the “Healthcare Coverage” row in the tables below reflect, consistent with the assumptions that
would be used to estimate the cost of these benefits for financial reporting purposes under generally
accepted accounting principles, the current monthly cost to provide continued healthcare coverage
under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) applied to each month
these benefits would be provided by the named executive officer’s employment agreement if terminated
involuntarily without cause or in connection with a change in control. Included in the amounts shown
in the “Healthcare Coverage” row in the tables below are the related Tax Gross-Up Amounts. The
Tax Gross-Up Amount would be paid under the terms of the named executive officer’s employment
agreement.
• The amounts shown in the “Long-Term Disability Benefit” row in the tables below represent 67% of the
named executive officer’s monthly salary, up to a maximum of $25,000 per month in accordance with
the long-term disability insurance we maintain for our named executive officers. This benefit is payable
until the named executive officer is no longer disabled or age 65, whichever occurs earlier. Due to the
speculative nature of estimating the period of time during which a named executive officer may be
disabled, we have presented only one month of disability benefits in the tables below.