EXHIBIT 10.1

SENIOR EXECUTIVE SEVERANCE AGREEMENT
This Senior Executive Severance Agreement (this “Agreement”) is entered into and
made effective as of the _____ day of __________, 20__ (the “Effective Date”),
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 Ohio (“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.    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”). The Lump Sum Payment shall be paid within ten (10) business days
after the day of Executive’s termination.
B.    A lump sum cash payment, net of any applicable withholding taxes, in an
amount equal to two times Executive’s then current annual Target Bonus, as
defined and determined annually by the Compensation Committee of the BLI Board
of Directors (the “Lump Sum Bonus Payment”); provided, however, that in the
event Executive’s then current Target Bonus is undefined, Executive’s annual
Target Bonus shall be deemed to be 100% of Executive’s then current base salary.
Executive shall receive the Lump Sum Bonus Payment at the same time Executive
receives the Lump Sum Payment described in Subsection 2.A. above.
C.    A lump sum cash payment, net of any applicable withholding taxes, in an
amount equal to (i) Executive’s then current annual Target Bonus, as determined
pursuant to the provisions of Subsection 2.B. above; multiplied by (ii) a
fraction, the numerator of which is the number of days that have elapsed between
the first day of the current annual bonus period and the date of Executive’s
termination and the denominator of which is three-hundred-sixty-five (365).
Executive shall receive the payment determined under this Subsection 2.C. at the
same time Executive receives the Lump Sum Payment described in Subsection 2.A.
above.
D.    For a period of twenty-four (24) months 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 health, dental or vision plan that is generally available to similarly
titled executive officers of BLSI; provided, however, that Executive’s
participation

- 3 -

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

in the plans referred to in this Subsection 2.D. 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.D., 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.
E.    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 (the “Excise Tax”), the amounts payable hereunder shall be either

- 4 -

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

(i) delivered in full, or (ii) delivered to such lesser extent as will result in
no portion of such benefits being subject to the Excise Tax, whichever of the
foregoing amounts, taking into account the applicable federal, state and local
income taxes and the Excise Tax, results in the receipt by Executive on an
after-tax basis, of the greater amount of benefits, notwithstanding that all or
some portion of such benefits may be taxable under Section 4999 of the Code.
Unless BLSI and Executive otherwise agree in writing, any determination required
under this Subsection 2.E. shall be made in writing by the independent
accounting firm employed by BLSI immediately prior to the applicable Change in
Control (the “Accountants”), whose determination shall be conclusive and binding
upon Executive and BLSI for all purposes. For purposes of making the
calculations required by this Subsection 2.E., the Accountants may make
reasonable assumptions and approximations concerning applicable taxes and may
rely on reasonable, good faith interpretations concerning the application of
Section 280G and 4999 of the Code. BLSI and Executive shall furnish to the
Accountants such information and documents as the Accountants may reasonably
request in order to make a determination under this Subsection 2.E. BLSI shall
bear all costs the Accountants may reasonably incur in connection with any
calculations contemplated by this Subsection 2.E.
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

- 5 -

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

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 or 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; provided, however, that Executive shall be
responsible for his or her 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.
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 PNC Bank, Pittsburgh,

- 7 -

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

Pennsylvania, or its 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.
7.    From and after any termination of Executive’s employment, Executive shall
retain in confidence and not use for his or her own benefit or on behalf of any
other person or entity any confidential information known to him or her
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

- 8 -

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

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 provisions hereof, and any such prohibition or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.
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.

- 9 -

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

11.    This Agreement shall be effective for a one year period beginning with
the Effective Date (the “Initial Term”) and shall automatically be renewed for
successive one year periods commencing on successive anniversaries of the
Effective Date (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.
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

- 10 -

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

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.
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

- 11 -

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

will be interpreted, administered and operated accordingly. For purposes of
Section 409A of the Code, each payment of compensation under this Agreement
shall be treated as a separate payment of compensation. Any amounts payable
solely on account of an involuntary termination shall be excludible from the
requirements of Section 409A of the Code, either as separation pay or as
short-term deferrals to the maximum possible extent. 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.,
 
 
an Ohio corporation
 
 
 
 
 
 
By:
 
 
 
 
 
 
 
Its:
 
 
 
 
 
ATTEST:
 
BIG LOTS STORES, INC.,
 
 
an Ohio corporation
 
 
 
 
 
 
By:
 
 
 
 
 
 
 
Its:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EXECUTIVE:
 
 
 
 
 
 
 
 
 
 
 

- 13 -