Big Lots, Inc. 8-K
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 21, 2006
BIG LOTS, INC.
(Exact name of registrant as specified in its charter)
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Ohio
(State or other jurisdiction of
incorporation or organization)
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1-8897
(Commission File Number)
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06-1119097
(I.R.S. Employer Identification No.) |
300 Phillipi Road, Columbus, Ohio 43228
(Address of principal executive office) (Zip Code)
(614) 278-6800
(Registrants telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
TABLE OF CONTENTS
Item 1.01 Entry into a Material Definitive Agreement.
On February 21, 2005, the Board of Directors (the Board) of Big Lots, Inc. (the Company), upon
the recommendation of the Compensation Committee, took the following actions with respect to
executive compensation: (i) approved the fiscal 2006 salaries and bonus opportunities for the
Companys executives, including the executive officers who are expected to be included as the named
executive officers (NEOs) in the Companys 2006 proxy statement; (ii) determined that no bonuses
would be paid for fiscal 2005 under the Big Lots, Inc. 1998 Key Associate Annual Incentive
Compensation Plan, as amended (the Bonus Plan); (iii) approved the performance targets devised by
the Compensation Committee under the Bonus Plan for fiscal 2006; (iv) approved an amendment to the
employment agreement of Steven S. Fishman, the Companys Chairman, Chief Executive Officer and
President; and (v) approved non-qualified stock option awards and restricted stock awards for the
Companys executives, including the NEOs, pursuant to the Big Lots 2005 Long-Term Incentive Plan
(the Equity Plan). These actions are described in greater detail below and in the applicable
exhibits.
Salary
As it does annually, the Compensation Committee reviewed the compensation of the Companys
executives, including the NEOs, in light of its compensation philosophy, policies and procedures.
Following its review, the Compensation Committee recommended to the Board, among the other
components of executive compensation, the salaries for the Companys executives for fiscal 2006.
The table below sets forth the fiscal 2005 and fiscal 2006 annual salaries for the NEOs. The
fiscal 2006 salaries will become effective on March 26, 2006. The actual salary earned in fiscal
2005 will be reflected in the Summary Compensation Table of the Companys 2006 proxy statement.
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Name and Position |
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Year |
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Salary ($) |
Steven S. Fishman (a) |
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2006 |
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960,000 |
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Chairman, Chief Executive Officer and President |
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2005 |
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960,000 |
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Brad A. Waite |
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2006 |
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520,000 |
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Executive Vice President, Human Resources, Loss
Prevention, Real Estate and Risk Management |
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2005 |
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500,000 |
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John C. Martin |
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2006 |
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475,000 |
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Executive Vice President, Merchandising |
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2005 |
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465,000 |
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Lisa M. Bachmann |
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2006 |
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400,000 |
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Senior Vice President, Information Technology /
Merchandise Planning and Allocation |
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2005 |
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375,000 |
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Joe R. Cooper |
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2006 |
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375,000 |
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Senior Vice President and Chief Financial Officer |
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2005 |
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350,000 |
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(a) |
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Mr. Fishmans employment with the Company commenced on July 11, 2005. |
Bonus
Following a review of the Companys performance in fiscal 2005, the Board and Compensation
Committee determined that the performance targets established under the Bonus Plan in February 2005
were not satisfied. Accordingly, no bonuses will be paid under the Bonus Plan for fiscal 2005.
On February 21, 2006, the Board approved the fiscal 2006 performance targets recommended by the
Compensation Committee which, if met, will provide a bonus under the Bonus Plan to certain
employees, including the NEOs. No right to a minimum bonus exists under the Bonus Plan.
The Compensation Committee derived the performance targets and defined the employees bonus goals
(e.g., floor, target and stretch) from the Companys planned earnings for fiscal 2006, as
established by the Board. The specific criteria upon which bonuses may be earned during fiscal
2006 is based on the greater of income from continuing operations, income (loss) from continuing
operations before extraordinary items and/or the cumulative effective of a change in accounting
principle, income before extraordinary items, and net income, with each such measure being adjusted
to remove the effect of unusual or non-recurring event items. In making adjustments to remove the
effect of unusual or non-recurring event items, the Compensation Committee takes into account:
asset
impairments under Statement of Financial Accounting Standards (SFAS) No. 144, as amended or
superceded; merger integration costs; merger transaction costs; any profit or loss attributable to
a reportable segment as described by SFAS No. 131, as amended superseded or an entity or entities
acquired during the period of service to which the performance criteria relates; tax settlement
charges; the relevant tax effect of new tax legislation enacted after the beginning of fiscal 2006
or other changes in tax law; any extraordinary item, event or transaction as described in
Accounting Principles Board (APB) Opinion No. 30; any unusual in nature, or infrequent in
occurrence items, events or transactions (that are not extraordinary items) as described in APB
Opinion No. 30, as amended or superseded; any other non-recurring items or other non-GAAP financial
measures (not otherwise listed); unrealized gains or losses on investments in debt and equity
securities as described in SFAS No. 115, as amended or superseded; and/or any gain or loss
recognized as a result of derivative instrument transactions or other hedging activities as
described in SFAS No. 133, as amended or superseded. The establishment of the Companys
performance targets remains solely in the Compensation Committees discretion. The performance
targets adopted for fiscal 2006 are consistent with the Compensation Committees philosophy,
policies and procedures applicable to the Companys executive compensation program.
Employees bonus goals are determined as a percentage of salary. The baseline percentage of salary
for the each NEO has been established by their respective employment agreements. For other
employees, the percentage of salary is set by position level and is subjectively determined.
Except for Mr. Fishmans bonus goals, the bonus goals for the NEOs were not modified by the Board
or the Compensation Committee. On February 21, 2006, the Board approved an amendment to Mr.
Fishmans employment agreement that increases his target bonus goal from 77.08% to 85.0% of his
salary and increases his stretch bonus goal from 165.63% to 170.0% of his salary. This summary is
qualified in its entirety by reference to the full text of the amendment to Mr. Fishmans
employment agreement which is filed herewith as Exhibit 10.2.
Equity
On February 21, 2006, the Board also determined, upon the recommendation of the Compensation
Committee, the size of equity awards to be granted to the Companys senior executives, including
the NEOs, pursuant to the Equity Plan. While the size of the awards was established on February
21, 2006, the Board did not authorize the granting of these awards until February 24, 2006. The
non-qualified stock option awards are evidenced by the Big Lots 2005 Long-Term Incentive Plan
Non-Qualified Stock Option Award Agreement, the form of which is filed herewith as Exhibit 10.4.
The restricted stock awards are evidenced by the Big Lots 2005 Long-Term Incentive Plan Restricted
Stock Award Agreement, the form of which is filed herewith as Exhibit 10.5.
The following table sets forth the equity awards granted to each of the NEOs on February 24, 2006.
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Common Shares Underlying |
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Common Shares Underlying |
Name |
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Stock Option Award |
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Restricted Stock Award |
Mr. Fishman |
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200,000 |
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100,000 |
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Mr. Waite |
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46,500 |
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18,500 |
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Mr. Martin |
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21,500 |
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8,500 |
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Ms. Bachmann |
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41,000 |
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16,000 |
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Mr. Cooper |
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41,000 |
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16,000 |
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Item 2.02 Results of Operations and Financial Condition.
On February 22, 2006, the Company issued a press release and conducted a conference call, both of
which reported the Companys unaudited fourth quarter and fiscal 2005 results, provided guidance
for fiscal 2006, and announced that the Board had authorized the repurchase of up to $150 million
of the Companys common shares. Attached as exhibits to this Form 8-K are copies of the Companys
February 22, 2006 press release (Exhibit 99.1) and the transcript of the Companys February 22,
2006 conference call (Exhibit 99.2), including information concerning forward-looking statements
and factors that may affect the Companys future results. The information in Exhibits 99.1 and
99.2 is being furnished, not filed, pursuant to Item 2.02 of this Form 8-K. By furnishing the
information in this Form 8-K and the attached exhibits, the Company is making no admission as to
the materiality of any information in this Form 8-K or the exhibits.
Item 9.01 Financial Statements and Exhibits.
Exhibits marked with an asterisk (*) are filed herewith. Exhibits 10.1 through 10.5 are
management contracts or compensatory plans or arrangements.
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Exhibit No. |
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Description |
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10.1 |
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Employment Agreement with Steven S. Fishman (incorporated herein by reference
to Exhibit 10.1 to the Companys Current Report on Form 8-K dated June 6, 2005). |
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10.2* |
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First Amendment to Employment Agreement with Steven S. Fishman. |
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10.3 |
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Big Lots 2005 Long-Term Incentive Plan (incorporated herein by reference to
Exhibit 10.1 to the Companys Current Report on Form 8-K dated May 17, 2005). |
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10.4* |
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Form of the Big Lots 2005 Long-Term Incentive Plan Non-Qualified Stock
Option Award Agreement. |
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10.5* |
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Form of the Big Lots 2005 Long-Term Incentive Plan Restricted Stock Award Agreement. |
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99.1* |
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Big Lots, Inc. press release dated February 22, 2006. |
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99.2* |
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Transcript of Big Lots, Inc. conference call dated February 22, 2006. |
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned hereunto duly authorized.
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BIG LOTS, INC.
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Dated: February 27, 2006 |
By: |
/s/ Charles W. Haubiel II
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Charles W. Haubiel II |
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Senior Vice President, General Counsel
and Corporate Secretary |
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