Big Lots 2009 Annual Report Download - page 66

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Participants receiving restricted stock units do not have, with respect to such restricted stock units, any of the
rights of a shareholder. Unless the Committee specifies otherwise in the Award agreement, the restricted stock unit
Award is forfeited if the participant terminates service before the restricted stock unit vests or if applicable terms
and conditions have not been met at the end of the restriction period.
Performance Units
An Award of performance units provides the participant the right to receive our common shares if specified
terms and conditions are met. Vesting requirements may be based on the continued service of the participant for a
specified time period or on the attainment of a specified business performance goal established by the Committee.
In general, no more than one-third of the performance units may vest before each of the first three anniversary
dates after the grant date. However, if vesting is based on the attainment of specified business performance goals
established by the Committee, then the performance units may not vest sooner than the first anniversary after the
grant date. Performance unit Awards are payable in cash, our common shares or a combination of both. If cash
settlement is made, the amount distributed will be the fair market value of the number of common shares that
otherwise would have been distributed to settle the performance units. Unless the Committee specifies otherwise
in the Award agreement, the performance units are forfeited if the participant terminates service before the
performance units are earned.
Performance-Based Awards
Any Awards granted under the 2005 Incentive Plan may be granted in a form that qualifies for the qualified
performance-based compensation exception under Section 162(m). Under Section 162(m), the terms of the Award
must state, in terms of an objective formula or standard, the method of computing the amount of compensation
payable under the Award, and must preclude discretion to increase the amount of compensation payable under the
terms of the Award (but may give the Committee discretion to decrease the amount of compensation payable).
The 2005 Incentive Plan specifies performance goals that the Committee must use when granting a performance-
based Award. As described above, the 2005 Incentive Plan imposes certain limitations on the number and value of
performance-based Awards to covered employees.
Effect of Change in Control
Awards granted under the 2005 Incentive Plan are generally subject to special provisions upon the occurrence of
a change in control (as defined in the 2005 Incentive Plan and discussed in the “Executive Compensation” section
of this Proxy Statement). For Awards granted under the 2005 Incentive Plan, if a change in control occurs, then:
(i) all outstanding stock options and SARs shall become fully exercisable; (ii) all remaining restrictions applicable
to restricted stock and restricted stock units shall lapse and such restricted stock and restricted stock units shall
become free of restrictions, fully vested and transferable; and (iii) any performance goals or other condition
applicable to performance units shall be deemed to be satisfied in full with the common shares or cash subject
to such Award being fully distributable. Payments under Awards that become subject to the excess parachute
payment rules of Section 280G of the IRC may be reduced under certain circumstances. See the “Tax Treatment
of Awards — Sections 280G and 4999” section below for more details.
Limited Transferability
All Awards or common shares subject to an Award under the 2005 Incentive Plan are nontransferable except upon
death, either by the participant’s will or the laws of descent and distribution or through a beneficiary designation,
and Awards are exercisable during the participant’s lifetime only by the participant (or by the participant’s legal
representative in the event of the participant’s incapacity).
Equitable Adjustments
In the event of a reorganization, recapitalization, merger, spin-off, stock split or other specified changes affecting
us or our capital structure, the Committee is required to make equitable adjustments that reflect equitably the
effects of such changes to the participants. Such adjustments may relate to the number of our common shares
available for grant, as well as to other maximum limitations under the 2005 Incentive Plan (e.g., exercise prices and
number of Awards), and the number of our common shares or other rights and prices under outstanding Awards.