Big Lots 2009 Annual Report Download - page 74

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election than shareholder votes against or “withheld” from such election would not continue to serve, except with
the express consent of the Board. Our majority voting policy (“Policy”) is set forth in Section 1.11 of our Corporate
Governance Guidelines (see the “Governance – Majority Vote Policy” section of this Proxy Statement for more
information regarding the Policy).
Prior to 2008, Ohio law required Ohio corporations to use a plurality voting standard for director elections. Under
a plurality voting standard, the nominees receiving the greatest number of votes are elected directors. Under the
Policy, our directors continue to be elected by a plurality vote, but in an uncontested election a director nominee
who receives a greater number of “withheld” votes than “for” votes must promptly offer to resign from the
Board. The Board then must decide, based upon the recommendation of our Nominating / Corporate Governance
Committee, within 100 days after the voting results are certified, whether to accept the resignation offer. The
Policy also requires the final decision of the Board to be promptly disclosed publicly in a press release or a report
filed with the Securities and Exchange Commission. If the decision is to reject the resignation offer, the press
release or report will indicate the reasons for that decision.
In 2008, Ohio law was amended to provide that the articles of incorporation of an Ohio corporation may set forth
“alternative election standards” for the election of directors, and that, if no alternative election standard is specified
in the articles, plurality voting would apply. For the reasons described below, our Board has unanimously adopted
resolutions which approve and recommend for our shareholders’ consideration the approval of amendments to our
Articles and Code of Regulations (“Regulations”) to implement a majority voting standard in uncontested election
of directors. An “uncontested election” generally is any election of our directors at a meeting of shareholders at
which the number of nominees does not exceed the number of directors to be elected and for which no shareholder
has submitted notice of an intent to nominate a candidate for election at such meeting in accordance with our
Regulations (as proposed to be amended under Proposal Five in this Proxy Statement), or, if any such notice has
been submitted, such notice has been (i) withdrawn, (b) determined by our Board or a final court order not to
be valid and effective notice of a nomination, or (iii) determined by our Board not to create a bona fide election
contest. Proposal Five proposes a procedure which would require our shareholders to provide advance notice of
a shareholder’s intent to nominate a candidate for election as a director at a shareholder meeting. In all director
elections other than uncontested elections, which we refer to as “contested elections,” the plurality voting standard
would continue to apply.
Our Board has determined that the adoption of a majority voting standard in uncontested elections will provide
our shareholders with a greater voice in the election of directors by requiring a candidate for election to receive
more favorable than unfavorable votes in order to be elected to the Board or to retain a seat on the Board. Adoption
of a majority voting standard also is intended to reinforce the Board’s accountability to the interest of the holders
of a majority of our equity securities. The proposed amendments would insert a majority voting standard into the
Articles which could not be amended without shareholder approval.
If the proposed amendments to our Articles is adopted by our shareholders, an affirmative majority of the total
number of votes cast with respect to the election of a director nominee will be required for election of the nominee
in an uncontested election. Abstentions and broker non-votes will have no effect in determining whether the
required affirmative majority vote has been obtained. However, if a majority voting standard is used in a contested
election, fewer or more candidates could be elected to the Board than the number of Board seats available. Because
the proposed majority voting standard simply requires a nominee to receive more “for” votes than against or
“withheld” votes, without regards to voting for other nominees, it is not effective to determine which nominees are
elected when there are more candidates than available Board seats. In other words, in a contested election there are
more nominees than Board seats and a majority vote standard could result in all of the nominees receiving more
“for” votes than “withheld” votes. For that reason, the Board believes that in contested elections, plurality voting
should be in effect and the candidates receiving the greatest number of shareholder votes would be elected.
If this proposal is approved by our shareholders and implemented, we also will adopt appropriate conforming
amendments, if any, to the Policy to eliminate provisions that will be superseded by this proposal and to conform
the provisions that address the treatment of holdover terms for any incumbent directors who fail to be re-elected
under the majority voting standard. Under Ohio law, an incumbent director who is not re-elected remains in office
until his or her successor is duly elected and qualified, or until his earlier death, resignation or removal from office.
As is the case currently under the Policy, if a majority vote standard is adopted by our shareholders, an incumbent
director who does not receive more votes cast “for” than “withheld” as to his or her election in an uncontested