Big Lots 2009 Annual Report Download - page 64

- 49 -
The aggregate number of common shares underlying restricted stock, restricted stock units and performance units
granted under the 2005 Incentive Plan shall not exceed one-third of all common shares underlying Awards granted
under the Plan. The maximum aggregate number of common shares that may be granted under the 2005 Incentive
Plan through the exercise of ISOs shall not exceed 5,000,000.
The 2005 Incentive Plan is designed to meet the requirements for deductibility of executive compensation under
Section 162(m) with respect to stock options, SARs, restricted stock and other Awards that are intended to qualify
as qualified performance-based compensation under Section 162(m). In order to meet Section 162(m) requirements,
the 2005 Incentive Plan imposes limits on the number and type of common shares that any one participant may
receive. Awards granted to a covered employee (as that term is used within Section 162(m)) that are intended to
qualify as qualified performance-based compensation under Section 162(m), are limited to: (i) 2,000,000 shares
of restricted stock per participant annually; (ii) 3,000,000 common shares underlying stock options and SARs
per participant during any three consecutive calendar years; and (iii) $6,000,000 through performance units per
participant during any three consecutive calendar years.
Common shares issued under the 2005 Incentive Plan will be our authorized but unissued common shares, treasury
shares or shares purchased in the open market. To the extent that any Award payable in common shares is forfeited,
cancelled, terminated or relinquished, the common shares covered thereby will no longer be charged against the
maximum share limitation and may again be made subject to Awards under the 2005 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
In the Committee’s discretion, all of our outside 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 4,100 salaried employees. In fiscal 2010, approximately 90 of our
affiliates’ employees (and no consultants or advisors) and our eight outside directors have received or are expected
to receive Awards under the 2005 Incentive Plan, although this may vary from year to year. 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. Since May 29, 2008, equity compensation awards to outside directors have been
limited to restricted stock under the 2005 Incentive 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