Big Lots (BIG)

Compensation Committee

The Compensation Committee discharges the responsibilities of the Board relating to the administration of our compensation programs, including the compensation program for the members of our executive management committee (“EMC”). The EMC is currently comprised of 11 employees – the five executives named in the Summary Compensation Table (“named executive officers”) and all other senior vice presidents.

The Compensation Committee is involved in establishing our general compensation philosophy, overseeing the development of our compensation programs, reviewing and recommending to the Board the compensation for the EMC members, administering our equity-based compensation plans, and reporting on the entirety of the executive compensation program to the Board. All members of the Compensation Committee are independent as required by the Committee’s charter and NYSE rules.

The functions of the Compensation Committee are further described in its charter, which is available in the Investor Relations section of our website (www.biglots.com) under the “Corporate Governance” caption. A copy may also be obtained, without charge, upon written request to our Corporate Secretary. The Compensation Committee met four times during fiscal 2008.

Compensation Committee

The Compensation Committee discharges the responsibilities of the Board relating to the administration of our compensation programs, including the compensation program for the members of our executive management committee (“EMC”). The EMC is currently comprised of 11 employees – the five executives named in the Summary Compensation Table (“named executive officers”) and all other executive vice presidents and senior vice presidents.

The Compensation Committee is involved in establishing our general compensation philosophy, overseeing the development of our compensation programs, reviewing and recommending to the Board the compensation for the EMC members, administering our equity-based compensation plans, and reporting on the entirety of the executive compensation program to the Board. All members of the Compensation Committee are independent as required by the Committee’s charter and NYSE rules.

The functions of the Compensation Committee are further described in its charter, which is available in the Investor Relations section of our website (www.biglots.com) under the “Corporate Governance” caption. A copy may also be obtained, without charge, upon written request to our Corporate Secretary. The Compensation Committee met 12 times during fiscal 2007.

Compensation Committee

The membership of the Compensation Committee of the Board (which we refer to as the “Committee” throughout this CD&A) is determined by the Board. In order to be eligible for membership, a prospective Committee member must, in the judgment of the Board, be: (1) a “non-employee director” for purposes of Rule 16b-3 under the Exchange Act; (2) an “outside director” for purposes of Section 162(m) of the Internal Revenue Code of 1986, as amended (“IRC”); and (3) “independent” in accordance with NYSE listing standards. Each of the Committee members meets these requirements. The Committee is currently composed of three outside directors – Mr. Tishkoff, Ms. Lauderback and Mr. Kollat. Mr. Tishkoff serves as the Committee’s chair and establishes the Committee’s meeting agendas.

The purpose of the Committee is to discharge the responsibilities of the Board relating to the administration of our compensation programs, including establishing and implementing the philosophy, practices and policies applicable to the executive compensation program for the members of our executive management committee (“EMC”). The EMC is currently comprised of 10 employees – the five executives named in the Summary Compensation Table (“named executive officers”) and all other executive vice presidents and senior vice presidents. Specific Committee responsibilities include reviewing and recommending to the Board the compensation for the EMC members, administering our equity-based compensation plans, and reporting on the entirety of the executive compensation program to the Board.

The Committee’s scope of authority is dictated by its charter. The charter, which was adopted by the Board and may be revised only by the Board, is reviewed by the Committee annually and by the Board as it deems necessary.

The Committee has the authority to retain counsel and other experts. The Committee also possesses the sole authority to select, retain and terminate a compensation consultant, including the sole authority to approve the consultant’s fees and other retention terms. In discharging its responsibilities, the Committee has full access to all relevant records and may also request that any officer, employee or consultant of Big Lots, including our human resources executives and our outside counsel, meet with any member of, or consultant to, the Committee.

The Committee may, in its discretion, delegate all or a portion of its duties and responsibilities to a subcommittee of the Committee. Our human resources department and a management working group support the Committee’s efforts and, in some cases, act pursuant to delegated authority to fulfill various functions in administering our employee benefit and compensation plans. Such delegation is permitted by the Committee’s charter and each such plan. Those groups to whom the Committee has delegated certain responsibilities are each required to periodically report their activities to the Committee.