Big Lots 2014 Annual Report Download - page 41

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in the same after-tax position as the executive would have been if no excise tax or assessment had been imposed on
any such payment to the executive under the agreement or any other payment that the executive may receive as a
result of such change in control. The compensation payable on account of a change in control may be subject to the
deductibility limitations of Sections 162(m) and/or 280G of the IRC.
Severance Plan
The Board adopted the Severance Plan, which covers each of our named executive officers and several of our
other key executives, to provide a more uniform approach to severance for our executives, avoid using individual
severance agreements and ensure that our executives are covered by restrictive covenants. The payments and
benefits to which our named executive officers would be entitled to under the Severance Plan (collectively, the
“Severance Benefits”) if they are terminated without Cause (as defined in the Severance Plan) or on account of a
Constructive Termination (as defined in the Severance Plan) are described below in the “Potential Payments Upon
Termination or Change in Control – Involuntary Termination Without Cause” section of this Proxy Statement.
The Severance Plan imposes confidentiality, non-competition, non-solicitation, non-disparagement and post-
termination cooperation obligations on participants. The non-competition and non-solicitation obligations apply
during the period of employment and continue until the end of the restriction period set forth in the Severance Plan.
The Severance Plan does not provide for a gross-up payment to any participants to offset any excise taxes that
may be imposed on excess parachute payments under Section 4999 (the “Excise Tax”) of the IRC. Instead, the
Severance Plan provides that in the event that the Severance Benefits would, if provided, be subject to the Excise
Tax, then the Severance Benefits will be reduced to the extent necessary so that no portion of the Severance
Benefits is subject to the Excise Tax, provided that the net amount of the reduced Severance Benefits, after giving
effect to tax consequences, is greater than or equal to the net amount of the Severance Benefits without such
reduction, after giving effect to the Excise Tax and tax consequences.
Any executive who is a party to an employment agreement with the Company or any of its subsidiaries or affiliates
(except for Mr. Campisi and Ms. Bachmann) will not be eligible to participate in the Severance Plan. If either of
Mr. Campisi or Ms. Bachmann is entitled to benefits under the Severance Plan and to severance benefits under
their respective employment agreement, they will be eligible to receive the greater of the aggregate benefits
payable under the Severance Plan or the aggregate severance benefits payable under their respective employment
agreement, but not both.
Post-Termination and Change in Control Arrangements
The employment agreements and Severance Plan described above provide for potential severance and change
in control payments and other consideration. Our equity compensation plans and related award agreements also
provide for the accelerated vesting of outstanding stock options, time-vested restricted stock, PSUs and RSUs in
connection with certain termination events.
The severance provisions of the employment agreements and the senior executive severance agreements are
intended to address competitive concerns by providing the executives with compensation to alleviate the
uncertainty associated with foregoing other opportunities and, if applicable, leaving for another employer. The
change in control provisions of the employment agreements and severance agreements provide that the executive
will receive certain cash payments and other benefits upon a change in control only if the executive is terminated
in connection with the change in control (including a constructive termination and, in the case of Mr. Campisi
under the New Employment Agreement, termination for good reason). This “double trigger” structure is intended
to enable us to rely upon each named executive officer’s continued employment and objective advice without
concern that the named executive officer might be distracted by the personal uncertainties and risks created by an
actual or proposed change in control. These potential payments and benefits provide our named executive officers
with important protections that we believe are necessary to attract and retain executive talent.
While the Committee considers the potential payments upon termination or change in control annually when it
establishes compensation for the applicable year, this information is not a primary consideration in setting salary,
bonus payout percentages or equity compensation amounts.