--------------------------------------------------------------------------------

EXHIBIT 10.14
SENIOR EXECUTIVE SEVERANCE AGREEMENT

This Senior Executive Severance Agreement (this “Agreement”) is entered into and
made effective as of the ____ day of ________, 20____ by and among BIG LOTS
STORES, INC., an Ohio corporation (“BLSI”), BIG LOTS, INC., an Ohio corporation
and the ultimate parent company of BLSI (“BLI”), and _______________, an
individual residing in the State of ___________ ( “Executive”).

WHEREAS, the Board of Directors of BLSI (the “Board”) believes it is in the best
interests of BLSI and its shareholders to assure the continued services of
Executive, undiminished by any actual or perceived threat to continued
employment that may arise from an actual or threatened Change in Control (as
defined herein) of BLSI or BLI;

WHEREAS, should BLSI or BLI receive any proposal that may result in a Change in
Control, the Board believes it imperative that BLSI and the Board be able to
rely upon Executive’s continued employment in Executive’s then current position,
and that BLSI be able to receive and rely upon Executive’s advice, if it
requests it, as to the best interests of BLSI, BLI and their respective
shareholders, without concern that Executive might be distracted by the personal
uncertainties and risks created by such a proposal; and

WHEREAS, Executive wishes to continue to serve in Executive’s then current
capacity, subject to assurance that in the event of a Change in Control,
Executive will have a reasonable degree of financial security;

NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration, BLSI, BLI and Executive agree as follows:

 
 

--------------------------------------------------------------------------------

 
 
1.           If there is a Change in Control (as defined in Section 3 hereof)
and Executive’s employment is thereupon terminated or terminated within twenty
four (24) months after the effective date thereof, Executive shall be entitled
to the termination benefits set forth in Section 2 hereof.  For purposes of this
Agreement, Executive’s employment shall be deemed to have been terminated only
if BLSI terminates such employment other than for Cause or if a Constructive
Termination occurs.  “Cause” shall mean Executive’s conviction of a felony, or
an act or acts of personal dishonesty on Executive’s part intended to result and
resulting in material harm to BLSI, or any refusal by Executive to perform his
assigned duties for a period exceeding ten (10) consecutive business days, other
than any such refusal arising from a Constructive Termination or by reason of
temporary physical or mental disability or illness.  “Constructive Termination”
shall mean a resignation by Executive because of any material adverse change or
material diminution in Executive’s reporting relationships, job description,
duties, responsibilities, compensation, perquisites, office or location of
employment (as reasonably determined by Executive in his/her good faith
discretion); provided, however, that Executive shall notify BLSI in writing at
least forty-five (45) days in advance of any election by Executive to terminate
his or her employment hereunder, specifying the nature of the alleged adverse
change or diminution, and BLSI or BLI, as the case may be, shall have a period
of ten (10) business days after the receipt of such notice to cure such alleged
adverse change or diminution before Executive shall be entitled to exercise any
such rights and remedies.  Executive shall not be entitled to the benefits
available hereunder unless such notice is timely given.  For purposes of this
Agreement, any reference to a “termination” (or any form thereof) shall mean a
“separation from service” within the meaning of Treasury Regulation Section
1.409A-1(h) by Executive from BLSI, BLI, and any other entity that, along with
BLI, would be considered a single employer for purposes of Sections 414(b) and
414(c) of the Internal Revenue Code of 1986, as amended (the “Code”).

 
- 2 -

--------------------------------------------------------------------------------

 

2.          The benefits payable to Executive pursuant to Section 1 hereof are
as follows:

A.         BLSI shall pay to Executive a lump sum cash payment, net of any
applicable withholding taxes, in an amount equal to two times the annual salary
paid or payable to Executive immediately prior to the effective date of such
Change in Control (the “Lump Sum Payment”); provided, however, that if there are
fewer than twenty-four (24) months remaining from the date of Executive’s
termination to Executive’s normal retirement date under any retirement plan then
in effect, BLSI shall instead pay Executive the amount obtained by multiplying
the Lump Sum Payment by a fraction, the numerator of which is the number of
months so remaining and the denominator of which is twenty-four (24).  The
applicable amount shall be paid on the next business day after the day of
Executive’s termination.

B.          In addition to the payment described in Subsection 2.A. above, BLSI
shall pay to Executive a lump sum cash payment, net of any applicable
withholding taxes, in an amount equal to two times Executive’s then current
annual Stretch Bonus, as defined and determined annually by the Compensation
Committee of the BLI Board of Directors (the “Lump Sum Bonus Payment”);
provided, however, that (i) in the event Executive’s then current Stretch Bonus
is undefined or is not subject to a maximum payout, Executive’s annual Stretch
Bonus shall be deemed to be 200% of Executive’s then current base salary and
(ii) if there are fewer than twenty-four (24) months remaining from the date of
Executive’s termination to Executive’s normal retirement date under any
retirement plan then in effect, BLSI shall instead pay Executive the amount
obtained by multiplying the Lump Sum Bonus Payment by a fraction, the numerator
of which is the number of months so remaining and the denominator of which is
twenty-four (24).  Executive shall receive the Lump Sum Bonus Payment at the
same time Executive receives the Lump Sum Payment described in Subsection 2.A.
above.

 
- 3 -

--------------------------------------------------------------------------------

 
 
C.          For a period of one year after the date of Executive’s termination,
Executive (and his or her family, if their participation is permitted under the
terms of the subject plan) shall be entitled to participate in any group life,
hospitalization, or disability insurance plan, health program, or other
executive benefit plan (other than bonus compensation or performance plans to
the extent that such plans, in the case of Executive, are in lieu of the bonus
plan set forth in Subsection 2.B. above) that is generally available to
similarly titled executive officers of BLSI; provided, however, that Executive’s
participation in the plans referred to in this Subsection 2.C. shall be
terminated (other than as provided by law) when and to the extent that Executive
is entitled to receive the same from another employer during such
period.  Executive’s participation in and benefits under any such plan shall be
on the terms and subject to the conditions specified in the governing document
of the particular plan, including, but not limited to, reimbursement of one
hundred percent (100%) of all medical and dental expenses incurred during the
period of participation in the plans referred to above.  Notwithstanding the
foregoing, with respect to any continued coverage or reimbursement pursuant to
this Subsection 2.C., other than with respect to any continued coverage under a
group health or hospitalization plan during the applicable COBRA health
insurance benefit continuation period described in Section 4980B of the
Code:  (i) the amount of expenses eligible for reimbursement or benefits
provided during any taxable year of Executive shall not affect the amount of
expenses eligible for reimbursement or benefits to be provided in any other
taxable year of Executive, (ii) any such reimbursement shall be made on or
before the last day of Executive’s taxable year following the taxable year of
Executive in which the expense was incurred, and (iii) the right to such
reimbursement or benefits may not be subject to liquidation or exchange for
another benefit.

 
- 4 -

--------------------------------------------------------------------------------

 
 
D.          If all or any portion of the amount payable to Executive under this
Agreement, either alone or together with other amounts that Executive is
entitled to receive in connection with a Change in Control, constitutes “excess
parachute payments” within the meaning of Section 280G of the Code, or any
successor provision, that is subject to the excise tax imposed by Section 4999
of the Code (or any similar tax or assessment), the amounts payable hereunder
shall be increased to the extent necessary to place Executive in the same
after-tax position as Executive would have been in had no such excise tax or
assessment been imposed on any such payment paid or payable to Executive under
this Agreement or any other payment that Executive may receive as a result of
such Change in Control.  The determination of the amount of any such tax or
assessment and the resulting amount of incremental payment required hereby in
connection therewith shall be made by the independent accounting firm employed
by BLSI immediately prior to the applicable Change in Control, within thirty
(30) calendar days after the payment of the amount payable pursuant to
Subsections 2.A. and 2.B. hereof, and said incremental payment shall be made by
the end of Executive’s taxable year next following the taxable year in which
Executive remits payment of the tax or assessment being grossed-up pursuant to
this Subsection.

E.           If, after the date upon which any payment required under this
Agreement has been made, it is determined (pursuant to final judgment of a court
of competent jurisdiction or an agreed upon tax assessment) that the amount of
excise or other similar taxes or assessments payable by Executive is greater
than the amount initially so determined, then BLSI shall pay Executive an amount
equal to the sum of (i) such additional excise or other similar taxes, plus (ii)
any interest, fines and penalties resulting from such underpayment, plus (iii)
an amount necessary to reimburse Executive for any income, excise or other tax
or assessment payable by Executive with respect to the amounts specified in (i)
and (ii) above, and the reimbursement provided by this clause (iii).  Payment
thereof shall be made by the end of Executive’s taxable year next following the
taxable year in which Executive remits payment of the amounts being reimbursed
pursuant to this Subsection.

 
- 5 -

--------------------------------------------------------------------------------

 
 
3.           As used herein, “Change in Control” means the first to occur of any
of the following events: (i) the acquisition by any person (as defined under
Section 409A of the Code), or more than one person acting as a group (as defined
in Section 409A of the Code), of the stock of BLI that, together with the stock
of BLI held by such person or group, constitutes more than fifty percent (50%)
of the total fair market value or total voting power of all of the stock of BLI,
(ii) the acquisition by any persons, or more than one person acting as a group,
within any 12-month period, of the stock of BLI possessing thirty percent (30%)
or more of the total voting power of all of the stock of BLI, (iii) a majority
of the members of the Board of Directors of BLI is replaced during any 12-month
period by directors whose appointment or election is not endorsed by a majority
of the members of the Board of Directors of BLI prior to the date of the
appointment or election, or (iv) the acquisition by any person, or more than one
person acting as a group, within any 12-month period, of assets from BLI that
have a total gross fair market value equal to or more than forty percent (40%)
of the total gross fair market value of all of the assets of BLI immediately
prior to such acquisition or acquisitions.  This definition of Change in Control
under this Section 3 shall be interpreted in a manner that is consistent with
the definition of “change in control event” under Section 409A of the Code and
the Treasury Regulations promulgated thereunder.  The effective date of any such
Change in Control will be the date upon which the last event occurs of the last
action is taken such that the definition of Change in Control (as set forth
above) has been satisfied.  For the purposes of this Agreement, the term
“affiliate” means any person or entity that, along with BLI, constitutes a
single employer under Sections 414(b) and 414(c) of the Code.  Determination of
affiliate will be tested as of the date immediately prior to any event
constituting a Change in Control.  Notwithstanding the other provisions in this
Section 3, the term “Change in Control” will not mean any transaction, merger,
consolidation or reorganization in which BLI exchanges or offers to exchange
newly issued or treasury shares in an amount less than fifty percent (50%) of
the then-outstanding equity securities of BLI entitled to vote for the election
of directors, for fifty-one percent (51%) or more of the outstanding equity
securities entitled to vote for the election of at least the majority of the
directors of a corporation other than BLI or an affiliate thereof (the “Acquired
Corporation”), or for all or substantially all of the assets of the Acquired
Corporation.

 
- 6 -

--------------------------------------------------------------------------------

 
 
4.           If Executive hires legal counsel with respect to any alleged
failure by BLSI or BLI to comply with any of the terms of this Agreement, or
institutes any negotiation or institutes or responds to any legal action to
assert or defend the validity of or to enforce Executive’s rights under, or to
recover damages for breach of, this Agreement, BLSI shall pay Executive’s actual
expenses for attorneys’ fees and disbursements, together with such additional
payments, if any, as may be necessary so that the net after-tax payments so made
to Executive equal such fees and disbursements; provided, however, that
Executive shall be responsible for his own fees and expenses with respect to any
lawsuit between Executive and BLSI to enforce rights or obligations under this
Agreement in which BLSI is the prevailing party.  The fees and expenses incurred
by Executive in instituting or responding to any such negotiation or legal
action shall be paid by BLSI as they are incurred, in advance of the final
disposition of the action or proceeding, upon receipt of an undertaking by
Executive to repay such amounts if BLSI is ultimately determined to be the
prevailing party.  Notwithstanding the foregoing, (i) any costs must relate to a
claim arising from the alleged breach of any obligation of BLSI under this
Agreement [during the lifetime] of Executive, (ii) the amount of expenses
eligible for reimbursement or payment, or benefits provided, in any taxable year
of Executive may not affect the amount of expenses eligible for reimbursement or
payment, or benefits that may be provided, in any other taxable year of
Executive, (iii) any payment or reimbursement must be made on or before the last
day of Executive’s taxable year following the taxable year of Executive in which
the expense being paid or reimbursed is incurred; and (iv) the right to payment
or reimbursement or benefits may not be subject to liquidation or exchange for
another benefit.

 
- 7 -

--------------------------------------------------------------------------------

 
 
5.           If any amount due Executive hereunder is not paid when due, then
BLSI shall pay interest on said amount at an annual rate equal to the base
lending rate of National City Bank, Cleveland, Ohio, or successor, as in effect
from time to time, for the period between the date on which such payment is due
and the date said amount is paid.

6.           BLSI’s obligation to pay Executive the compensation and to make the
arrangements required hereunder shall be absolute and unconditional and shall
not be affected by any circumstance, including, without limitation, any setoff,
counterclaim, recoupment, defense or other right that BLSI may have against
Executive or otherwise.  All amounts payable by BLSI hereunder shall be paid
without notice or demand.  Subject to the proviso in Section 1 above, each and
every payment made hereunder by BLSI shall be final and BLSI shall not seek to
recover all or any part of such payment from Executive or from whosoever may be
entitled thereto, for any reason whatsoever.  Executive shall not be obligated
to seek other employment or compensation or insurance in mitigation of any
amount payable or arrangement made under any provision of this Agreement, and
the obtaining of any such other employment or compensation or insurance, except
as otherwise provided in this Agreement, shall in no event effect any reduction
of BLSI’s obligations to make the payments and arrangements required to be made
under this Agreement.

 
- 8 -

--------------------------------------------------------------------------------

 
 
7.           From and after any termination of Executive’s employment, Executive
shall retain in confidence and not use for his own benefit or on behalf of any
other person or entity any confidential information known to him concerning BLI,
BLSI, their respective subsidiaries or their respective businesses so long as
such information is not publicly disclosed by someone other than Executive.

8.           In partial consideration of the benefits granted to Executive
herein, Executive agrees that during the six-month period immediately following
Executive’s termination, if Executive shall have received benefits under Section
2 above, Executive shall not engage in any Competitive Activity.  For purposes
of this Agreement, “Competitive Activity” shall mean Executive’s participation,
without the approval of the Board or the written consent of the chief executive
officer of BLSI, in the management of any business operation of any enterprise
if such operation (a “Competitive Operation”) engages in substantial and direct
competition with BLSI’s closeout business operation at the date of Executive’s
termination.  For purposes of this Agreement, a closeout business operation
shall be considered in substantial and direct competition with BLSI’s closeout
business operation if such business operation’s sales of closeout merchandise
amount to ten percent (10%) or more of such business operation’s total
sales.  Competitive Activity shall not include (i) the mere ownership of
securities in any enterprise or (ii) participation in the management of any
enterprise or of any business operation thereof, other than in connection with a
Competitive Operation of such enterprise.
 
9.           Any provision in this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
only to the extent of such prohibition or unenforceability without invalidating
or affecting the remaining provision hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

 
- 9 -

--------------------------------------------------------------------------------

 
 
10.         Except as specifically set forth herein, this Agreement supersedes
and replaces any and all prior Senior Executive Severance Agreements or
Executive Severance Agreements between the parties, but shall not be deemed to
negate, supersede or alter any other agreement or arrangement between Executive
and BLSI or BLI or any other rights to which Executive may be entitled, and
shall be and remain in effect in addition to any such other agreement or rights,
whether now existing or later created.

11.         This Agreement shall be effective for a one year period beginning
with the effective date hereof (the “Initial Term”) and shall automatically be
renewed for successive one year periods commencing on successive anniversaries
of the date hereof (each, a “Renewal Term”), subject to the following
conditions:

A.          this Agreement shall be deemed terminated upon any termination or
other cessation whatsoever of Executive’s employment for any reason prior to a
Change in Control;

B.          this Agreement may be terminated by the mutual agreement of
Executive and BLSI;

C.          BLSI may terminate this Agreement at any time effective upon thirty
(30) days prior written notice being given; provided, however, that such notice
shall be ineffective if a Change in Control shall occur prior to the effective
date of such termination.

Notwithstanding anything to the contrary herein, this Agreement shall not be
terminated or deemed terminated except by mutual agreement of Executive and BLSI
(i) during the first twenty four (24) months after the effective date of a
Change in Control or (ii) during any period when BLSI or BLI has knowledge that
any third person has taken steps reasonably calculated to effect a Change in
Control, until such third person has abandoned or terminated his or its efforts
in connection therewith.  Upon any termination hereof, Executive shall have no
further rights hereunder, except to the extent that rights to any benefit have
accrued hereunder because of a Change in Control occurring prior to such
termination.

 
- 10 -

--------------------------------------------------------------------------------

 
 
12.         In consideration of and as inducement to Executive to enter into
this Agreement, BLI hereby absolutely and unconditionally guarantees to
Executive the full, complete and timely payment and performance of all
obligations of BLSI arising out of or in connection with this Agreement.  This
guaranty shall be enforceable against BLI without any suit or proceeding by
Executive against BLSI and without any notice of nonpayment or nonperformance
hereunder.

13.         This Agreement shall be binding upon and shall inure to the benefit
of the parties hereto and their respective successors, assigns, heirs and legal
representatives.  BLSI shall require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business or assets of BLSI, by agreement in form and substance satisfactory
to Executive, expressly to assume and agree to perform and discharge all
obligations of BLSI arising under this Agreement.  All references herein to BLSI
shall be deemed to include any such successor.

14.         This Agreement shall in all respects be subject to, governed by and
construed in accordance with the laws of the State of Ohio.

 
- 11 -

--------------------------------------------------------------------------------

 
 
15.         Notwithstanding the foregoing, if Executive is a “specified
employee,” within the meaning of Treasury Regulation Section 1.409A-1(h) and as
determined under BLI’s policy for determining specified employees, on
Executive’s date of termination, and Executive is entitled to a payment and/or
benefit under this Agreement that is required to be delayed pursuant to Section
409A(a)(2) of the Code, then such payment or benefit shall not be paid or
provided (or begin to be paid or provided) until the first business day of the
seventh month following Executive’s date of termination (or, if earlier,
Executive’s death).  The first payment that can be made following such
postponement period shall include the cumulative amount of any payments or
benefits that could not be paid or provided during such postponement period due
to the application of Section 409A(a)(2)(B)(i) of the Code.

16.         This Agreement is intended to comply with, to the extent applicable,
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 Executive and none of BLI, BLSI or
their respective Board of Directors shall be liable to Executive for failure to
comply with the requirements of Section 409A of the Code.  Furthermore, BLSI may
accelerate the time or schedule of a payment to 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.

 
- 12 -

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, this Agreement has been executed as of the day and year
first above written.
 
ATTEST:
 
BIG LOTS, INC.,
                   
By:
             
Its:
                                 
ATTEST:
 
BIG LOTS, STORES, INC., an Ohio corporation
                   
By:
             
Its:
                                     
EXECUTIVE:
               

 

- 13 -

--------------------------------------------------------------------------------