Big Lots 2015 Annual Report Download - page 46

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 into prior to fiscal 2015) with
each of Messrs. Johnson, Stein and Schlonsky, and several other key officers who are not parties to
an employment agreement. The senior executive severance agreements expire on the first 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 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 that avoids the use of individual severance agreements and ensures that restrictive
covenants apply to our key executives. The payments and benefits to which our named executive
officers would be entitled to under the Severance Plan (collectively, the “Severance Benefits”) if they
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