BIG LOTS, INC.
Executive Employment Agreement
March 17, 2015
This Executive Employment Agreement (this “Agreement”) is entered into effective as of the date set forth above (the “Effective Date”) by and between BIG LOTS, INC. (“BLI”), BIG LOTS STORES, INC. (“Big Lots”) and their affiliates, predecessors, successors, subsidiaries and other related companies (collectively the “Company”), and David J. Campisi (the “Executive”), collectively, the “Parties” and each a “Party.”
A. The Executive currently is employed with the Company pursuant to the terms of that certain Employment Agreement by and between the Company and the Executive dated May 3, 2013 (the “Original Agreement”) and serves as the Company’s Chief Executive Officer (“CEO”) and President; and
B. The Company and Executive desire to amend and restate the Original Agreement in its entirety and enter into this Agreement to govern the terms and conditions of the Executive’s employment with the Company from and after the date hereof.
Statement of Agreement
In consideration of the promises and mutual covenants and agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as set forth below.
Section 1.Employment and Employment Period. The Company hereby continues to employ the Executive, and the Executive hereby accepts such continuation of employment with the Company, for the purposes and upon the terms and conditions contained in this Agreement. The term of this Agreement is effective for a period commencing on the Effective Date and continuing through the close of business on May 3, 2020 (the “Initial Period”), subject to earlier termination as provided in Section 8. Beginning on May 4, 2020 and each May 4 thereafter, the term of this Agreement shall be extended automatically without further action or notice by either Party hereto for an additional one calendar year period (each such additional one calendar year period, a “Renewal Period”) unless and until either Party provides written notice to the other Party at least 90 days prior to the end of the Initial Period or any Renewal Period, as applicable, in which case this Agreement shall terminate at the end of the Initial Period or Renewal Period, as applicable. The Company may not provide notice of non-renewal until 120 days prior to the end of the Initial Period or applicable Renewal Period. If during the Initial Period or any Renewal Period the Executive provides written notice of Retirement to the Company, then the Initial Period or the then current Renewal Period, as applicable, shall end on the Employment Termination Date arising from the Retirement as set forth in the Executive’s notice of Retirement (and to the extent such Retirement date is later than the end of the Initial Period or Renewal Period, as applicable, the
Initial Period or Renewal Period shall be automatically extended until such Retirement date); provided, that if the Executive’s notice provides for more than 180 days’ notice and the Retirement date set forth in the notice is later than the end of the Initial Period or Renewal Period, as applicable, the Company shall have the right, in its sole and absolute discretion, to set the Retirement date at any time between (a) the later of (i) the end of the Initial Period or Renewal Period and (ii) 180th day from the date of such notice and (b) the Executive’s proposed Retirement date. Except in the case of Retirement, if this Agreement is terminated pursuant to this Section 1, the Executive’s employment shall continue on an “at will” basis unless and until otherwise terminated. From and after the delivery of a written notice of Retirement until the Employment Termination Date, this Agreement shall remain in full force and effect, including, without limitation, the termination provisions of Section 8. As used in this Agreement, the term “Employment Period” means the Initial Period and each Renewal Period (if any), and any period during which the Executive’s employment with the Company continues on an “at will” basis.
Section 2.Capacities and Duties. During the Employment Period, the Executive shall serve as the CEO and President of the Company, except as otherwise mutually agreed by the Company and the Executive. The Executive shall have the duties and responsibilities incumbent with the offices and positions with the Company held by the Executive, including such specific duties and responsibilities consistent with such offices and positions as the Board may reasonably establish from time to time. The Executive shall report to and be accountable to the Board and the Company agrees that it will nominate the Executive to stand for election to the Board at the Company's annual meeting of shareholders (or any special meeting of shareholders called for the purpose of electing the Company's directors), provided, (a) the Executive (i) is not in violation of any provision of this Agreement or (ii) has not announced his Retirement, (b) neither Party has elected to not renew this Agreement as provided in Section 1 or (c) the Executive’s employment with the Company has not otherwise terminated. The Executive’s duties will be performed principally in Columbus, Ohio, except for travel on the business of the Company. The Executive will not be required to relocate his principal office or personal residence outside of the Columbus, Ohio metropolitan area without his prior written consent.
Section 3.Performance Covenants. The Executive accepts the employment described in Section 2 and agrees to devote the Executive’s full professional working time and efforts to the business and affairs of the Company and the performance of the aforesaid duties and responsibilities. However, nothing in this Agreement shall preclude the Executive from making or holding passive investments or devoting a reasonable amount of the Executive’s time and efforts to civic, community, charitable, professional and trade association affairs and matters and/or outside business or investment activities of the Executive that do not conflict with the Executive’s obligations under Section 7, provided the nature and extent of such affairs, matters and/or activities do not unduly detract from the performance of the Executive’s duties for the Company.
Section 4.Compensation. For the Executive’s services to the Company under this Agreement, the Company shall pay to the Executive the compensation hereinafter provided in this Section 4 at the times and in the manners provided below.
(a)Base Salary. The Executive shall initially be paid a base salary at a minimum annual rate of $1,050,000. The Executive shall be entitled from time to time to
such increases in base salary, as the Board may determine in its discretion. The Executive’s performance and base salary shall be reviewed starting in calendar year 2016 at least annually by the Board as part of the Company’s normal executive compensation process, and increases in base salary shall be made effective no later than March 31 of each year. The base salary shall be paid in periodic installments in accordance with the normal payroll practices of the Company.
(b)Bonus Compensation. In addition to base salary, the Executive shall be entitled to participate in the Company’s Big Lots 2006 Bonus Plan, as amended (or any such successor plan, hereinafter, “Bonus Plan”) and will be eligible to receive bonus compensation (“Bonus”) each Fiscal Year of the Company in accordance with and subject to the terms of the Bonus Plan. The Executive’s Bonus will be an amount equal to the base salary multiplied by the bonus payout percentage as determined under the Bonus Plan. The base salary shall be fixed at the time the performance objectives (for the Fiscal Year to which the performance objectives relate) are established by the Compensation Committee or such other time that is permitted by the Bonus Plan and the Code and regulations related thereto which permit such Bonus to be qualified performance-based compensation under Code section 162(m)(4)(C) and the regulations. The Executive’s bonus payout percentage will consist of a Target Bonus of 120% of base salary and a Stretch Bonus of 240% of base salary. Both “Target Bonus” and a “Stretch Bonus” are defined in the Bonus Plan and are subject to adjustment as provided in the Bonus Plan; provided, however, the Executive’s Target Bonus will never be set at less than 120% of base salary and the Executive’s Stretch Bonus will never be set at less than 240% of base salary. The payment of any Bonuses is subject to the terms of the Bonus Plan and any agreements issued thereunder, provided, however, that all such Bonus amounts, if any, shall be paid on or before the 15th day of the third month following the end of the Fiscal Year for which such Bonus compensation was earned. To the extent any provision of the Bonus Plan is inconsistent with the express provisions set forth in this Section 4 and Section 9 of this Agreement, such express provisions of this Agreement shall control.
Section 5.Benefit Plans.
(a)Regular Benefits. The Executive is eligible to participate in all medical, prescription, dental, vision, accidental death and disability insurance, retirement, savings, incentive, vacation, sick day and other benefit and perquisite plans and programs which may be in effect from time to time and provided to the Company’s senior executive officers (collectively, the “Benefit Plans”), including without limitation, the Big Lots 2012 Long-Term Incentive Plan, as amended and restated May 29, 2014 (the “LTIP”) (which allows for the grant of incentive and nonqualified stock options, restricted stock, restricted units, performance shares, performance units and other awards), and any other current or future equity incentive plans as may, from time to time during the Employment Period, be provided to the Company’s senior executive officers (the LTIP and such other equity-based plans, the “Equity Incentive Plans”), in each case subject to and in accordance with the applicable terms and conditions of each such plan or program and any agreements entered into by the Company and the Executive in connection with awards thereunder, as and to the extent specifically amended by this Agreement. Notwithstanding
the forgoing, nothing contained in this Agreement shall be construed to create any obligation on the part of the Company to establish any Benefit Plan or Equity Incentive Plan, or to maintain the effectiveness of any Benefit Plan or Equity Incentive Plan.
(b)Additional Benefits. The Company shall provide the following additional benefits to the Executive:
(i)Life Insurance. The Company shall maintain and pay all premiums on a life insurance policy on the Executive’s life in a face amount equal to two times the Executive’s then current base salary, naming beneficiaries identified by the Executive from time to time.
(ii)Automobile Allowance; Use of Aircraft. The Company will provide the Executive with an automobile or monthly allowance in accordance with applicable Company policies for senior executive officers. The Executive shall be entitled to non-exclusive use of any aircraft owned or leased (including any fractional interest in such aircraft) by the Company, for personal travel for the Executive and his family; provided, that the value of such personal travel shall not exceed $100,000 in value per calendar year as measured by what the Company is required to report with respect to such benefits under the Securities Exchange Act of 1934, as amended (any income from which shall be imputed to the Executive in accordance with Treasury Regulation Section 1.61-21(g)(5)).
(e) Clawback. Notwithstanding any other provisions in this Agreement to the contrary, any incentive-based compensation or any other compensation paid to the Executive pursuant to this Agreement (or any other agreement or arrangement with the Company) which is subject to recovery under any law, government regulation or stock exchange listing requirement will be subject to such deductions and clawback as may be required to be made pursuant to such law, government regulation or stock exchange listing requirement (or any policy adopted by the Company pursuant to any such law, government regulation or stock exchange listing requirement).
Section 6.Payment or Reimbursement of Expenses. The below provisions apply with respect to payment or reimbursement of expenses incurred by the Executive.
(a)Expenses Generally. The Company shall pay or reimburse the Executive for normal and reasonable expenses paid or incurred by the Executive on behalf of the Company in connection with and reasonably necessary for the rendering of Executive’s services to the Company hereunder, including expenses for travel, convention and seminar attendance, business entertainment and similar items.
(b)Reimbursement Procedures. All reimbursements made pursuant to this Section 6 shall be made as promptly as practicable after the Executive has submitted to the Company vouchers or reports for such expenditures in such reasonable detail and with such supporting receipts and other evidence of expenditures as the Company typically requires for such purposes.
(c)Reimbursement Compliance with Section 409A. Notwithstanding the provisions of Section 6(a) and Section 6(b) and of any policy of the Company to the contrary:
(i)The amount of expenses eligible for reimbursement during any calendar year shall not affect the amount of expenses eligible for reimbursement in any other calendar year;
(ii)The reimbursement of an eligible expense shall be made on or before December 31 of the calendar year following the calendar year in which the expense was incurred; and
(iii)The right to reimbursement shall not be subject to liquidation or exchange for another benefit.
Section 7.Protective Provisions. The below provisions apply for the protection of the Company.
(a)Nondisclosure of Confidential Information. As used herein, the term “Confidential Information” means all information (i) relating to the Company of a confidential or non-public nature, including without limitation all data, technology, inventions, discoveries, processes, techniques, trade secrets, formulae, results of investigations and experiments, marketing, production, pricing, buying and sales information, and vendor lists, or (ii) of a third party which is of a confidential or non-public nature to the extent the Company remains subject to confidentiality or use restrictions in favor of such third party with respect to such information. Confidential Information shall not include (A) the Executive’s own personal personnel records or (B) any information that (1) the Executive possessed before the date of initial employment (including periods before the Effective Date) with the Company that was a matter of public knowledge, (2) became or becomes a matter of public knowledge through authorized sources independent of the Executive or otherwise is or becomes within the public domain other than through a breach of this Agreement, (3) has been or is disclosed by the Company without restriction on its use, (4) has been or is required to be disclosed by law or governmental order or regulation or (5) is germane (but only to the extent that it is germane) to enforcement of the Executive’s rights under this Agreement and only if its disclosure is a necessary part of any arbitration proceedings described in this Agreement. The Executive also agrees that, if there is any reasonable doubt whether an item is public knowledge, he will not regard the item as public knowledge until and unless the Company’s CEO (other than the Executive) or General Counsel confirms to the Executive in writing that the information is public knowledge or an adjudicator finally decides that the information is public knowledge.
The Executive acknowledges that Confidential Information is and shall remain the property of the Company. The Executive shall not, either during or after employment with the Company, except in connection with employment with or the provision of services for the Company, (i) disclose any Confidential Information to any Person unless required to do so by applicable law or any governmental authority, and then, only to the extent permitted by law and only after notifying the Company in writing as promptly as practicable prior to