Big Lots 2010 Annual Report Download - page 43

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for fiscal 2010, we had to achieve at least 90% of the corporate performance amount that we attained in fiscal
2009, as calculated for purposes of determining whether bonuses were payable under the 2006 Bonus Plan. Our
operating profit, as adjusted to remove the effect of unusual or non-recurring events, transactions and accruals and
any negative discretion exercised by the Committee, was used to determine the corporate performance amount. See
the “Bonus for Fiscal 2010” section of this CD&A for more information regarding the calculation of the corporate
performance amount. The corporate performance amount attained in fiscal 2009 was $323,167,330. Accordingly,
in order Mr. Fishman’s fiscal 2010 restricted stock award to vest, we had to achieve a fiscal 2010 corporate
performance amount of at least $290,850,597. The corporate performance amount for fiscal 2010 was $357,900,213
and Mr. Fishman remained employed beyond the first anniversary of the award; therefore, Mr. Fishman’s 2010
restricted stock award vested on the first trading day after we filed with the SEC our Form 10-K for fiscal 2010.
The restricted stock awarded to our named executive officers, other than Mr. Fishman, in fiscal 2010 vests upon
attaining the first trigger and the first to occur of (i) attaining the second trigger, (ii) the lapsing of five years after
the grant date while continuously employed, or (iii) the grantee’s death or disability (which results in the vesting
of a prorated portion of the award). The financial measure applied to the restricted stock awards granted to the
non-CEO named executive officers in fiscal 2010 was the greater of (w) earnings per common share – diluted
from continuing operations and (x) earnings per common share – diluted from continuing operations before
extraordinary item and/or cumulative effect of a change in accounting principle (as the case may be). If neither of
these amounts appear on the consolidated statement of operations included in our Form 10-K for the applicable
fiscal year, then the financial measure to be used is the greater of (y) earnings per common share – diluted and (z)
earnings per common share – diluted before extraordinary item and/or cumulative effect of a change in accounting
principle (as the case may be) as it appears in the Form 10-K for the applicable fiscal year. After each financial
measure is calculated for purposes of our financial statements, it is adjusted, for purposes of the restricted stock
award calculations, to remove the effect of any gain or loss as a result of litigation or lawsuit settlement that is
specifically disclosed, reported or otherwise appears in our periodic filings with the SEC or our annual report
to shareholders. These financial measures were selected because the Committee and the other outside directors
believe they provide a good indication of our profitability, ongoing operating results and financial condition.
The first trigger for the fiscal 2010 restricted stock awards is $1.50 under the applicable financial measure. The
second trigger for the fiscal 2010 restricted stock awards is $2.94 under the applicable financial measure. While
the first trigger was met (under the earnings per common share – diluted from continuing operations financial
measure) for the fiscal 2010 restricted stock awards, the second trigger was not met in fiscal 2010. Having met the
first trigger, if the named executive officer remains employed by us, the restricted stock will vest upon the earliest
of: (i) the first trading day after we file with the SEC our Form 10-K for the year in which the second trigger is met;
(ii) the opening of our first trading window that is five years after the grant date; and (iii) the death or disability
of the named executive officer, in which case 20% of the award will vest for each consecutive year of employment
completed from the grant date to the date of death or disability. The restricted stock will be forfeited if the named
executive officer’s employment with us terminates prior to vesting (except as described above in the case of death
or disability).
The Committee and the other outside directors believed that the financial measures and corporate performance
amount applicable to the second trigger that they approved in March 2010 represented strong, but reasonable,
levels of performance that would be a challenge to achieve. The second trigger for restricted stock awarded in
fiscal 2010 was approximately 34.9% greater than the second trigger for restricted stock awarded in fiscal 2009.
The Committee and other outside directors believe the selected corporate performance amount was appropriate in
light of our high levels of performance in fiscal 2009, our projected multi-year operating plan and our objectives to
motivate our executives, reward superior performance and align the interests of our executives and shareholders,
while balancing the uncertainty around the general economic conditions in the United States at the time in which
the awards were made.
The stock options awarded to our named executive officers in fiscal 2010 have an exercise price equal to the fair
market value of our common shares on the grant date (i.e., $35.92), vest equally over four years, and expire seven
years after the grant date. Additionally, if a named executive officer dies or becomes disabled before the last
scheduled vesting date, the then-remaining unvested portion of the stock option award will vest on the day such
event occurred, provided such event occurred at least six months following the grant date.