Amended and Restated Employment Agreement with Robert S. Segal

3.02        Bonus.  The Executive shall be eligible to receive bonus compensation (“Bonus”), for the fiscal year beginning January 30, 2008, and for each subsequent fiscal year of employment completed during the term of this Agreement.  The Executive’s bonus shall be an amount equal to the Base Salary at the end of such fiscal year multiplied by the Bonus Payout percentage as determined by the Bonus Program set each fiscal year by the compensation committee of Big Lots, Inc.’s Board of Directors.  The Bonus Program is based upon the achievement of the Company’s annual financial plan.  The target bonus for the Executive is 50% of Base Salary and the Stretch Bonus for the Executive is 100% of Base Salary, both of which are defined in the Bonus Program and are subject to adjustment by Big Lots, Inc.’s Board of Directors; provided, however, the Executive’s target bonus shall never fall below 50% of Base Salary and the Executive’s Stretch Bonus shall never fall below 100% of Base Salary.

[a]           Making or holding passive investments in outstanding shares in the securities of publicly-owned companies or other businesses (other than organizations described in Section 4.05), regardless of when and how that investment was made; or

[b]           Serving on corporate, civic, religious, educational and/or charitable boards or committees but only if this activity [i] does not interfere with the performance of duties under this Agreement and [ii] is approved in writing by the Company.

4.04        Solicitation of Third Parties.  The Executive agrees that during employment, and for two years after terminating employment with the Company not, directly or indirectly, to recruit, solicit or otherwise induce or influence any customer, supplier, sales representative, lender, lessor, lessee or any other person having a business relationship with the Company or the Group (or any Group Member) to discontinue or reduce the extent of that relationship except in the course of discharging the duties described in this Agreement and with the good faith objective of advancing the Company’s or the Group’s (or any Group Member’s) business interests.

[3]           Maximum Enforceable Restriction.  In the event that any or all of the covenants set forth in this Section 4.05 are determined by a court of competent jurisdiction to be unenforceable by reason of the temporal restrictions being too great, the geographic areas covered too great, the range of activities too great or for any other reason, then the Court is authorized and shall interpret them to extend over the maximum period of time, the maximum geographic area and the maximum range of activities or, as to any provision, in such a manner that all provisions may be given maximum restrictive effect in accordance with applicable law.

[3]           Definition of Cause.  For these purposes, Cause means the Executive’s [a] failure to comply with Company’s policies and procedures, but only if [i] before issuing the notice of termination for Cause, the Company makes a written demand upon the Executive for compliance and specifically describes the basis for this demand and [ii] if the failure is one that can be cured, the Executive does not comply within 10 days after receiving the demand; [b] willful or illegal misconduct or grossly negligent conduct that is injurious to the Company monetarily or otherwise; [c] violation of laws or regulations governing the Company or violation of the Company’s code of ethics; [d] breach of any fiduciary duty owed to the Company; [e] misrepresentation or dishonesty which the Company determines has had or is likely to have a material adverse effect upon the Company; [f] breach of any provision of Section 4.00 of this Agreement; [g] involvement in any act of moral turpitude that has an injurious effect on the Company or its reputation; or [h] breach of the terms of any non-solicitation or confidentiality clauses contained in an employment agreement(s) with a former employer.

[4]           Subsequent Information.  The terms of Section 5.04 will apply if, after the Executive terminates under any other provision of Section 5.00, the Company learns of an event that, had it been known before the Executive terminated employment, would have justified a termination for Cause.  In this case, the Company will be entitled to recover (and the Executive agrees to repay) any amounts (other than legally protected benefits) that the Executive received under any other provision of Section 5.00 reduced by the amount the Executive is entitled to receive under Section 5.04.

[4]           Health Care.  The Executive will be entitled to continue to receive the welfare benefits described in Section 3.03 until the last day of the twelfth complete calendar month beginning after the termination date.  Thereafter, the Company will reimburse the Executive for the cost of continuing health coverage under COBRA, less the amount the Executive is expected to pay as an employee premium for this coverage, if any, until the earlier of [a] the last day of the twenty-fourth complete calendar month beginning after the termination date or [b] the date the Executive becomes eligible for the same or similar coverage under another benefit program.  The amounts payable under this section will be increased to reimburse the Executive for federal, state and local income, employment and wage taxes associated with that reimbursement.  Any reimbursement for continuing health coverage under this Section 5.06[4], other than with respect to any continuing health coverage during the applicable COBRA health insurance benefit continuation period described in Section 4980B of the Code, and any reimbursement for taxes remitted pursuant to this Section 5.06[4] shall be subject to the following: [c] the amount eligible for reimbursement during any taxable year of the Executive may not affect the amount eligible for reimbursement to the Executive in any other taxable year; [d] any reimbursement shall be made on or before the last day of the taxable year of the Executive following the taxable year of the Executive in which the expense is incurred; and [e] the right to such reimbursement may not be subject to liquidation or exchange for another benefit.

6.01        How Given.  Any notice permitted or required to be given under this Agreement must be given in writing and delivered in person or by registered, U.S. mail, return receipt requested, postage prepaid; or through Federal Express, UPS, DHL or any other reputable professional delivery service that maintains a confirmation of delivery system.  Any delivery must be addressed to the Company’s Vice President and General Counsel with a copy to the Company’s Chief Executive Officer at the Company’s then-current corporate offices and to the Executive at the Executive’s address as contained in the Executive’s personnel file.

6.02        Effective Date.  Any notice permitted or required to be given under this Agreement will be effective on the date it is delivered, in the event of personal delivery, or on the date its receipt is acknowledged, in the event of delivery by registered mail or through a professional delivery service described in Section 6.01.

The Executive agrees that as a condition of receiving any post-termination benefit as set forth in Section 5.00 except for earned but unpaid Base Salary to the date of termination, along with any accrued rights the Executive has under any employee benefit plan of the Company, he must execute a comprehensive release in the form as may be determined from time to time by the Company in its sole discretion.  Generally, the release will require the Executive and the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees, legatees and assigns to release and forever discharge the Company (and all Group Members) and its executives, officers, directors, agents, attorneys, successors and assigns from any and all claims, suits and/or causes of action that grow out of or are in any way related to the Executive’s recruitment to or employment with the Company, other than any claim that the Company has breached this Agreement.  This release will include, but not be limited to, any claim that the Company violated the Employee Retirement Income Security Act of 1974; the Age Discrimination in Employment Act; the Older Worker’s Benefit Protection Act; the Americans with Disabilities Act; Title VII of the Civil Rights Act of 1964 (as amended); the Family and Medical Leave Act; any state, federal law or local ordinance prohibiting discrimination, harassment or retaliation in employment; any claim for wrongful discharge in violation of public policy, claims of promissory estoppel or detrimental reliance, defamation, intentional infliction of emotional distress; or the public policy of any state; or any federal, state or local law.  Upon termination, the Executive will be presented with a release and if the Executive fails to execute the release, the Executive agrees to forego any payment from the Company other than payments as if the Executive had terminated employment voluntarily under Section 5.05.  The Executive acknowledges that the Executive is an experienced senior executive knowledgeable about the claims that might arise in the course of employment with the Company and knowingly agrees that the payments upon termination (except those payable in accordance with Sections 5.02, 5.04 and 5.05) provided for in this Agreement are satisfactory additional consideration for the release of all possible claims.  Notwithstanding anything to the contrary, the failure of the Executive to execute the release described in this Section 7.00 shall not otherwise cause any payment made pursuant to this Agreement to be delayed beyond the date on which such payment was originally scheduled to occur.

To the extent permitted by law and its organizational documents, the Company will include the Executive under any liability insurance policy the Company maintains for employees of comparable status.  The level of coverage will be at least as favorable to the Executive (in amount and each other material respect) as the coverage of other employees of comparable status.  This obligation to provide insurance for the Executive will survive termination of this Agreement with respect to proceedings or threatened proceedings based on acts or omissions occurring during the Executive’s employment with the Company or with any Group Member.  Concurrently with the execution of this Agreement, BLI will enter into an indemnification agreement with Executive.

9.01        Acknowledgement of Arbitration.  Unless stated otherwise in this Agreement, the Parties agree that arbitration is the sole and exclusive remedy for each of them to resolve and redress any dispute, claim or controversy involving the interpretation of this Agreement or the terms, conditions or termination of this Agreement or the terms, conditions or termination of the Executive’s employment with the Company, including any claims for any tort, breach of contract, violation of public policy or discrimination, whether such claim arises under federal or state law.

9.02        Scope of Arbitration.  The Executive expressly understands and agrees that claims subject to arbitration under this section include asserted violations of the Employee Retirement Income Security Act of 1974; the Age Discrimination in Employment Act; the Older Worker’s Benefit Protection Act; the Americans with Disabilities Act; Title VII of the Civil Rights Act of 1964 (as amended); the Family and Medical Leave Act; any law prohibiting discrimination, harassment or retaliation in employment; any claim of promissory estoppel or detrimental reliance, defamation, intentional infliction of emotional distress; or the public policy of any state, or any federal, state or local law.

9.03        Effect of Arbitration.  The Parties intend that any arbitration award relating to any matter described in Section 9.00 will be final and binding on them and that a judgment on the award may be entered in any court of competent jurisdiction, and enforcement may be had according to the terms of that award.  This section will survive the termination or expiration of this Agreement.

9.04        Location of Arbitration.  Arbitration will be held in Columbus, Ohio, and will be conducted by a retired federal judge or other qualified arbitrator.  The arbitrator will be mutually agreed upon by the Parties and the arbitration will be conducted in accordance with the National Rules for the Resolution of Employment Disputes of the American Arbitration Association.  The Parties will have the right to conduct discovery pursuant to the Federal Rules of Civil Procedure; provided, however, that the arbitrator will have the authority to establish an expedited discovery schedule and cutoff and to resolve any discovery disputes.  The arbitrator will have no jurisdiction or authority to change any provision of this Agreement by alterations of, additions to or subtractions from the terms of this Agreement.  The arbitrator’s sole authority will be to interpret or apply any provision(s) of this Agreement or any public law alleged to have been violated.  The arbitrator has the authority to award damages and such other relief as expressly provided by law.

9.05        Time for Initiating Arbitration.  Any claim or controversy not sought to be submitted to arbitration, in writing, within 60 days of the date the Party asserting the claim knew, or through reasonable diligence should have known, of the facts giving rise to that Party’s claim, will be deemed waived and the Party asserting the claim will have no further right to seek arbitration or recovery with respect to that claim or controversy.  Both Parties agree to strictly comply with the time limitation specified in Section 9.00.  For purposes of this section, a claim or controversy is sought to be submitted to arbitration on the date the complaining Party gives written notice to the other that [1] an issue has arisen or is likely to arise that, unless resolved otherwise, may be resolved through arbitration under Section 9.00 and [2] unless the issue is resolved otherwise, the complaining Party intends to submit the matter to arbitration under the terms of Section 9.00.

 

9.06        Costs of Arbitration and Attorney’s Fees.  The Company will bear the arbitrator’s fee and other costs associated with any arbitration, unless the arbitrator, acting under Federal Rule of Civil Procedure 54(d)(1), elects to award these fees to the Company.  Attorney’s fees may be awarded to the prevailing party if expressly authorized by statute, or otherwise each party shall bear its own attorney’s fees and costs.  Notwithstanding the foregoing: [a] any costs being reimbursed must relate to a claim brought during the lifetime of the Executive with respect to an alleged breach of any obligation of the Company under this Agreement; [b] the amount eligible for reimbursement during any taxable year of the Executive may not affect the amount eligible for reimbursement in any other taxable year; [c] any reimbursement must be made on or before the last day of the Executive’s taxable year following the taxable year in which the cost was incurred; and [d] the right to reimbursement for such costs is not subject to liquidation or exchange for another benefit.

 

9.07        Arbitration Exclusive Remedy.  The Parties acknowledge that, because arbitration is the exclusive remedy for resolving issues arising under this Agreement, neither Party may resort to any federal, state or local court or administrative agency concerning breaches of this Agreement or any other matter subject to arbitration under Section 9.00, except as otherwise provided in this Agreement, and that the decision of the arbitrator will be a complete defense to any suit, action or proceeding instituted in any federal, state or local court before any administrative agency with respect to any arbitrable claim or controversy.

9.08        Waiver of Jury.  The Executive and the Company each waive the right to have a claim or dispute with one another decided in a judicial forum or by a jury, except as otherwise provided in this Agreement.

10.01      Representation of Executive.  The Executive represents and warrants that the Executive is not under any contractual or legal restraint that prevents or prohibits the Executive from entering into this Agreement or performing the duties and obligations described in this Agreement.

 

10.03      Governing Law; Severability.  This Agreement is intended to be performed in accordance with, and only to the extent permitted by, all applicable laws, ordinances, rules and regulations.  If any provision of this Agreement, or the application of any provision of this Agreement to any person or circumstance, is, for any reason and to any extent, held invalid or unenforceable, such invalidity and unenforceability will not affect the remaining provisions of this Agreement of its application to other persons or circumstances, all of which will be enforced to the greatest extent permitted by law and the Executive and the Company agree that the arbitrator (or judge) is authorized to reform the invalid or unenforceable provision [1] to the extent needed to avoid the invalidity or unenforceability and [2] in a manner that is as similar as possible to the intent (as described in this Agreement).  The validity, construction and interpretation of this Agreement and the rights and duties of the Parties will be governed by the laws of the State of Ohio, without reference to the Ohio choice of law rules.

 

[2]           This Agreement will be binding upon and will inure to the benefit of the Executive, the Executive’s heirs and legal representatives and the Company and its successors.

 

[3]           The headings in this Agreement are inserted for convenience of reference only and will not be a part of or control or affect the meaning of any provision of the Agreement.

 

10.08      Successors to Company.  This Agreement may and will be assigned or transferred to, and will be binding upon and will inure to the benefit of, any successor of the Company, and any successor will be substituted for the Company under the terms of this Agreement.  As used in this Agreement, the term “successor” means any person, firm, corporation or business entity which at any time, whether by merger, purchase or otherwise, acquires all or essentially all of the assets of the business of the Company.  Notwithstanding any assignment, the Company will remain, with any successor, jointly and severally liable for all its obligations under this Agreement.

 

10.09      Section 409A of the Code.  This Agreement is intended to comply with Section 409A of the Code and the Treasury Regulations promulgated thereunder, and this Agreement will be interpreted, administered and operated accordingly.  Nothing herein shall be construed as an entitlement to or guarantee of any particular tax treatment to the Executive and neither the Company nor the Boards of Directors of BLI or BLSI shall be liable to the Executive for failure to comply with the requirements of Section 409A of the Code.  Furthermore, the Company may accelerate the time or schedule of a payment to the Executive if at any time this Agreement fails to meet the requirements of Section 409A of the Code and the Treasury Regulations promulgated thereunder.  Such payment may not exceed the amount required to be included in income as a result of the failure to comply with the requirements of Section 409A of the Code and the Treasury Regulations promulgated thereunder.

 

Notwithstanding the foregoing, if the Executive terminates for any reason, dies or becomes Disabled on or prior to December 31, 2008 and is entitled to payment or benefit as a result of such termination, death or Disability, such payment or benefit shall be paid or provided [1] pursuant to the terms of this Agreement in effect immediately prior to the Effective Date, but [2] modified to the extent necessary for good faith compliance with the requirements of Section 409A of the Code.  Nothing in this Agreement shall be construed as causing a payment or benefit to be paid or distributed in calendar year 2008 which is not otherwise payable or distributable in calendar year 2008.