Big Lots 2014 Annual Report Download - page 40

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• provides Mr. Campisi with certain payments and benefits in the event that he retires after May 3, 2020
and complies with all restrictive covenants in the New Employment Agreement; and
• conforms the severance payments and benefits provided to Mr. Campisi if we terminate him without
cause or he terminates his employment for good reason to the severance payments and benefits provided
to our Chief Executive Officer upon such termination events under the Big Lots Executive Severance
Plan adopted on August 28, 2014 (the “Severance Plan”).
The New Employment Agreement also specifically addresses the vesting of outstanding grants and awards under
the Company’s equity incentive plans (including the 2012 LTIP) upon certain termination events. The Original
Agreement deferred to the vesting provisions set forth in the equity incentive plans and related award agreements
and the Severance Plan.
On April 29, 2013, we entered into a Second Amended and Restated Employment Agreement with Ms. Bachmann.
The term of Ms. Bachmann’s employment agreement will remain effective as long as we employ her unless we and
the executive mutually agree to amend or terminate her employment agreement.
Under the terms of her employment agreement, Ms. Bachmann is entitled to receive at least $625,000 in annual
base salary. Ms. Bachmann’s employment agreement also establishes that the minimum payout percentages (as
a percentage of base salary) that may be set for her target and maximum annual incentive award levels are 60%
and 120%.
The employment agreements with Mr. Campisi and Ms. Bachmann impose several restrictive covenants on the
executive that survive the termination of his or her employment in exchange for minimum salary levels and target
and maximum bonus payout percentages, potential severance and change in control payments and other benefits.
These restrictive covenants include confidentiality (infinite), non-solicitation (two years, but reduced to six months
for Mr. Campisi following a change in control), non-disparagement (infinite), non-competition (two years for
Mr. Campisi and one year for Ms. Bachmann, but reduced to six months for each executive following a change in
control), and continuing cooperation (infinite).
The employment agreements do not require us to reimburse the executives for the amount of any golden parachute
excise tax imposed under Section 4999 of the IRC. Each employment agreement provides that if the payments
to be received by the executive in connection with a change in control constitute “excess parachute payments,”
the executive’s payments and benefits will be reduced to the extent necessary to become one dollar less than the
amount that would generate an excise tax liability unless the executive would be in a better net after-tax position
without any such reduction, in which case payments and benefits will not be reduced.
Termination of Employment
The consequences of termination of employment under the employment agreements depend on the circumstances
of the termination and are described below in the “Potential Payments Upon Termination or Change in Control”
section of this Proxy Statement.
Senior Executive Severance Agreements
We are a party to a senior executive severance agreement (all entered enter prior to fiscal 2014) with each of
Messrs. Johnson, Chene and Schlonsky, and several other key officers who are not parties to an employment
agreement. The senior executive severance agreements expire on the anniversary of the date of execution and
automatically renew for an additional year unless we provide the executive at least 30 days’ notice of non-renewal.
The senior executive severance agreements provide for the following severance benefits if, within 24 months
after a change in control, the executive is terminated by us (other than for cause) or as a result of a constructive
termination: (i) a lump-sum payment equal to 200% of the executive’s then current annual salary and maximum
annual incentive award; and (ii) for a period of one year, the executive is entitled to participate in any group life,
hospitalization or disability insurance plan, health program or other executive benefit plan generally available
to similarly titled executive officers. The executive is also entitled to reimbursement of legal fees and expenses
incurred by the executive in seeking to enforce their rights under the agreement. Additionally, to the extent that
payments to the executive pursuant to the senior executive severance agreement (together with any other amounts
received by the executive in connection with a change in control) would trigger the provisions of Sections 280G
and 4999 of the IRC, payments under the agreement will be increased to the extent necessary to place the executive