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EXHIBIT 10.9
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
BY AND AMONG
BIG LOTS, INC.,
BIG LOTS STORES, INC.
AND
ROBERT S. SEGAL

This amended and restated employment agreement (“Agreement”) by and among Big
Lots Inc. (“BLI”), Big Lots Stores, Inc. (“Big Lots”) and its parent,
affiliates, predecessor, successor, subsidiaries and other related companies
(the “Company”) and Robert S. Segal (the “Executive”), collectively, the
“Parties,” is effective as of the date signed (“Effective Date”) and supersedes
and replaces any other oral or written employment-related agreement between the
Executive and the Company but does not supersede or replace any agreement or
arrangement between the Executive or any Group Member (as defined in
Section 4.02[1]) relating to the payment of compensation or benefits earned (or
deemed earned) on account of services performed for a Group Member before the
Effective Date.
 
1.00           Duration
 
This Agreement will remain in effect from the Effective Date until it terminates
as provided in Section 5.00.  Any notice of termination required to be given
under this Agreement must be given as provided in Section 6.00 and will be
effective on the date prescribed in Section 5.00.
 
2.00           Executive’s Employment Function
 
2.01        Position.  The Executive agrees to serve as the Company’s Senior
Vice President, General Merchandise Manager (or other appropriate title as
designated by the Company in its sole discretion) with the authority and duties
customarily associated with this position.  The Executive agrees at all times to
observe and be bound by all Company rules, policies, practices, procedures and
resolutions which apply to Company employees and which do not conflict with the
specific terms of this Agreement.
 
2.02        Place of Performance.  The Executive’s duties will principally be
performed in Columbus, Ohio, except for required travel on the Company’s
business, unless the Company requires the Executive to perform duties at another
location.
 
3.00           Compensation
 
The Company will pay the Executive the amounts described in this Section 3.00 as
compensation for the services described in this Agreement and in exchange for
the duties and responsibilities described in Section 4.00.
 
3.01        Base Salary.  The Company will pay to the Executive an annualized
base salary of $360,000, which may be adjusted at the Company’s discretion
(“Base Salary”).  The Executive’s Base Salary will be paid in installments that
correspond with the Company’s normal payroll practices.  The Base Salary may be
adjusted from time to time in a manner that is consistent with the Company’s
compensation policies in effect for executives in the same or similar job
classification at the discretion of the Company, but will not be adjusted to any
amount lower than $360,000.

 
 

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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.
 
[1]           Payment.  Any bonuses described herein will be paid at a time
consistent with payment of bonuses to Executives in the same or similar job
classifications.
 
[2]           Continuous Employment.  In order to receive any bonus as provided
herein, Executive must remain continuously employed by the Company pursuant to
the terms and conditions of this Agreement.
 
[3]           Fiscal Year.  The term “fiscal year” shall mean the period
commencing on the Sunday next following the Saturday closest to January 31st in
a calendar year and ending the next following calendar year on the Saturday
closest to January 31st.
 
3.03        Benefit Plans.  Subject to their terms, the Executive may
participate in any Company-sponsored employee pension or welfare benefit plan at
a level commensurate with the Executive’s title and position.
 
3.04        Vacation and Sick Leave.  The Executive shall be entitled to such
periods of vacation and sick leave each year as provided under the Company’s
vacation and sick leave policy at a level commensurate with other senior
executive officers of the Company.
 
3.05        Expenses.  The Executive is entitled to receive reimbursement for
all normal and reasonable expenses incurred while performing services under this
Agreement, including reasonable travel expenses.  Reimbursement for these
expenses will be made as soon as administratively feasible after the date the
Executive submits appropriate evidence of the expenditure and otherwise complies
with the Company’s business expense reimbursement policies.
 
3.06        Automobile Allowance.  The Company will provide the Executive with
an automobile or a monthly automobile allowance in accordance with applicable
Company policies for executives of the same or similar title and position.
 
3.07        Termination Benefits.  The Company will provide the Executive with
only those termination benefits described in Section 5.00.

 
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4.00           Executive’s Obligations
 
The amounts described in Sections 3.00 and 5.00 of this Agreement are provided
by the Company in exchange for (and have a value to the Company equivalent to)
the Executive’s performance of the obligations described in this Agreement,
including performance of the duties and the covenants made and entered into by
and between the Executive and the Company in this Agreement.
 
4.01
Scope of Duties.  The Executive will:

 
[1]           Devote all available business time, best efforts and undivided
attention to the Company’s business and affairs; and
 
[2]           Not engage in any other business activity, whether for gain,
profit or other pecuniary benefit.
 
[3]           However, the restriction described in Subsections 4.01[1] and [2]
will not preclude the Executive from:
 
[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.
 
4.02
Confidential Information.

 
[1]           Obligation to Protect Confidential Information.  The Executive
acknowledges that the Company, its parent, affiliates, predecessor, successor,
subsidiaries and other related companies (collectively, “Group” and separately,
“Group Member”) have a legitimate and continuing proprietary interest in the
protection of Confidential Information (as defined in Subsection 4.02[2]) and
have invested, and will continue to invest, substantial sums of money to
develop, maintain and protect Confidential Information.  The Executive agrees
[a] during and after employment with the Company and as to all Group Members
[i] that any Confidential Information will be held in confidence and treated as
proprietary to the Group, [ii] not to use or disclose any Confidential
Information except to promote and advance the Group’s business interests and
[b] immediately upon termination for any reason from employment with the
Company, to return to the Company any Confidential Information.

 
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[2]           Definition of Confidential Information.  For purposes of this
Agreement, Confidential Information includes any confidential data, figures,
projections, estimates, pricing data, customer lists, buying manuals or
procedures, distribution manuals or procedures, other policy and procedure
manuals or handbooks, supplier information, tax records, personnel histories and
records, information regarding sales, information regarding properties and any
other Confidential Information regarding the business, operations, properties or
personnel of the Company or the Group (or any Group Member) which are disclosed
to or learned by the Executive as a result of employment with the Company, but
will not include [a] the Executive’s personal personnel records or [b] any
information that [i] 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, [ii] became or becomes a matter of public
knowledge through sources independent of the Executive, [iii] has been or is
disclosed by any Group Member without restriction on its use or [iv] has been or
is required to be disclosed by law or governmental order or regulation.  The
Executive also agrees that, if there is any reasonable doubt whether an item is
public knowledge, to not regard the item as public knowledge until and unless
the Company’s General Counsel confirms to the Executive that the information is
public knowledge or an arbitrator, acting under Section 9.00, finally decides
that the information is public knowledge.
 
[3]           Intellectual Property.  The Executive expressly acknowledges that
all right, title and interest to all inventions, designs, discoveries, works of
authorship, and ideas conceived, produced, created, discovered, authored, or
reduced to practice during the Executive’s performance of services under this
Agreement, whether individually or jointly with the Company or any Group Member
(the “Intellectual Property”) shall be owned solely by the Company or the Group,
and shall be subject to the restrictions set forth in Subsection 4.02[1]
above.  All Intellectual Property which constitutes copyrightable subject matter
under the copyright laws of the United States shall, from the inception of
creation, be deemed to be a “work made for hire” under the United States
copyright laws and all right, title and interest in and to such copyrightable
works shall vest in the Company or the Group.  All right, title and interest in
and to all Intellectual Property developed or produced under this Agreement by
the Executive, whether constituting patentable subject matter or copyrightable
subject matter (to the extent deemed not to be a “work made for hire”) or
otherwise, shall be assigned and is hereby irrevocably assigned to the Company
or the Group by the Executive.  The Executive shall, without any additional
consideration, execute all documents and take all other actions needed to convey
the Executive’s complete ownership interest in any Intellectual Property to the
Company or the Group or the Executive is directed so that the Company or the
Group may own and protect such Intellectual Property and obtain patent,
copyright and trademark registrations for it.  The Executive agrees that any
Group Member may alter or modify the Intellectual Property at the Group Member’s
sole discretion, and the Executive waives all right to claim or disclaim
authorship.
 
4.03        Solicitation of Employees.  The Executive agrees that during
employment, or for two years after terminating employment with the Company
[1] not, directly or indirectly, to solicit any employee of the Company or of
any Group Member to leave employment with the Group, [2] not, directly or
indirectly, to employ or seek to employ any employee of the Company or any Group
Member and [3] not to cause or induce any of the Company’s or the Group’s (or
Group Member’s) competitors to solicit or employ any employee of the Company or
any Group Member.

 
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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.
 
4.05        Non-Competition.  The Executive acknowledges that the principal
business of the Company includes the operation of its Big Lots retail outlets,
the inventories of which are acquired primarily through special purchases such
as overstocks, close-outs, liquidations, bankruptcies, wholesale distribution of
overstock, distress, liquidation and other volume inventories, the operation of
its Big Lots Furniture stores, and its wholesale operations all of which
comprise the Company’s business (the “Company Business”); that Company is one of
the limited number of entities which has developed such business; that the
Company Business is national in scope and the Executive’s work for the Company
will give him access to the confidential affairs of the Company and the Group as
defined in Subsection 4.02[2]; and the agreements and covenants of the Executive
contained in Section 4.00 are essential to the business and the good will of the
Company.  Accordingly, the Executive covenants and agrees that:
 
[1]           During the term of the Executive’s employment with the Company and
for a period of one year (the “Restricted Period”) following the termination of
his employment in any manner, the Executive shall not in any location where the
Company’s retail stores are located throughout the United States [a] engage in
the Company Business for the Executive’s own account, [b] render any services to
any person engaged in the Company Business (other than to the Company); or
[c] become employed in any manner by, or consult with, Wal-Mart, Sam’s Club,
Kmart, Target, Dollar General, Family Dollar, Dollar Tree, Value
City/Schottenstein Stores Corporation, Fred’s, 99¢ Stores, Canned Foods, Tuesday
Morning, TJX Corporation, Rooms To Go, Office Depot, Costco, Staples, American
Signature, Ashley Furniture, HomeStores, Art Van, Office Max, Value City
Furniture or Nationwide Furniture Warehouse, or any grocery or furniture store
chain regardless of size.  Further, the Executive agrees to not become employed
in any manner or to act as consultant to any parent or subsidiary of the
above-listed entities.  In the event of a change of control as defined in
Subsection 5.07[2] of this Agreement, the restricted period shall be for a
period of six (6) months.
 
[2]           Acknowledgement.  The Executive acknowledges that the
non-competition agreement is reasonable in light of the nature of the Company
Business; that the Company has legitimate business reasons for requiring the
Executive’s agreement to all provisions of Section 4.00; and that he understands
the restrictions, has had an opportunity to fully discuss these restrictions
with the Company and accepts the restrictions.

 
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[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.
 
[4]           Tolling.  The Executive agrees that if any of the obligations to
the Company under this Subsection 4.05 are breached, then the restricted period
shall be extended for the length of time that the Executive failed to fulfill
his obligations under Subsection 4.05.
 
4.06        Post-Termination Cooperation.  As is required of the Executive
during employment, the Executive agrees that during and after employment with
the Company and without additional compensation (other than reimbursement for
reasonable associated expenses), to cooperate with the Company in the following
areas:
 
[1]           Cooperation With the Company.  The Executive agrees [a] to be
reasonably available to answer questions for the Company’s officers regarding
any matter, project, initiative or effort for which the Executive was
responsible while employed by the Company and [b] to cooperate with the Company
or any Group Member during the course of all third-party proceedings arising out
of the Company Business about which the Executive has knowledge or
information.  For purposes of this Agreement, [c] ”proceedings” includes
internal investigations, administrative investigations or proceedings and
lawsuits (including pre-trial discovery and trial testimony) and
[d] ”cooperation” includes [i] the Executive’s being reasonably available for
interviews, meetings, depositions, hearings and/or trials without the need for
subpoena or assurances by the Company or any Group Member; [ii] providing any
and all documents in the Executive’s possession that relate to the proceeding;
and [iii] providing assistance in locating any and all relevant notes and/or
documents.
 
[2]           Cooperation With Third Parties.  Unless compelled to do so by
lawfully-served subpoena or court order, the Executive agrees not to communicate
with, or give statements or testimony to, any opposing attorney, opposing
attorney’s representative (including private investigator) or current or former
employee relating to any matter (including pending or threatened lawsuits or
administrative investigations) about which the Executive has knowledge or
information (other than knowledge or information that is not Confidential
Information as defined in Subsection 4.02[2]) except in cooperation with the
Company and Group Members.  The Executive also agrees to notify the Company’s
General Counsel immediately after being contacted by a third party or receiving
a subpoena or court order to appear and testify with respect to any matter
affected by this section.
 
[3]           Cooperation With Media.  The Executive agrees not to communicate
with, or give statements to, any member of the media (including print,
television or radio media) relating to any matter (including pending or
threatened lawsuits or administrative investigations) about which the Executive
has knowledge or information (other than knowledge or information that is not
Confidential Information as defined in Subsection 4.02[2]) except in cooperation
with the Company or any Group Member.  The Executive also agrees to notify the
Company’s General Counsel immediately after being contacted by any member of the
media with respect to any matter affected by this section.

 
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4.07        Non-Disparagement.  The Executive and the Company agree that neither
will make any disparaging remarks about the other and the Executive will not
make any disparaging remarks about the Company, the Company’s Chairman, Chief
Executive Officer or any of the Company’s executives or any Group Member or
their executives.  However, this section will not preclude [1] any remarks that
may be made by the Executive under the terms of Subsection 4.06[2] or that are
required to discharge the duties described in this Agreement or [2] the Company
or Group Members from making (or eliciting from any person) disparaging remarks
about the Executive concerning any conduct that may lead to a termination for
Cause, as defined in Subsection 5.04[3] (including initiating an inquiry or
investigation that may result in a termination for Cause).
 
4.08        Notice of Subsequent Employment.  The Executive agrees to notify the
Company of any subsequent employment during the Restricted Period after
employment terminates.
 
4.09        Remedies.  The Executive agrees that any breach of any of the terms
of this Section 4.00 would result in irreparable injury and damage to the
Company for which the Company would have no adequate remedy at law; the
Executive therefore also agrees that in the event of a breach or any threat of
breach, the Company shall be entitled to an immediate injunction and restraining
order to prevent such breach and/or threatened breach and/or continued breach by
the Executive and/or any and all persons and/or entities acting for and/or with
the Executive, without having to prove damages.  The Executive agrees that no
bond shall be required of the Company and further agrees not to defend any
action seeking injunctive or other equitable relief on the basis that the
Company has an adequate remedy at law in money damages or otherwise.  The terms
of this Section 4.09 shall not prevent the Company from pursuing any other
available remedies for any breach or threatened breach hereof including, but not
limited to, the recovery of damages from the Executive or specific
performance.  In addition to any other available remedies, the Company may
require the Executive to account for and pay over to the Company all
compensation, profits, accruals, increments or other benefits derived or
received by the Executive as a result of any transaction constituting a breach
of any provision of Section 4.00.  The Company may set off any amounts finally
determined by a court of competent jurisdiction to be due under this section
against any amount which may be owed to the Executive under this Agreement.  The
Parties agree that any action for breach of any of the provisions of
Section 4.00 and/or injunctive relief shall be venued in the Court of Common
Pleas, Franklin County, Ohio.
 
4.10        Return of Company Property.  Upon termination of employment, the
Executive agrees to promptly return to the Company all property belonging to the
Group or any Group Member.
 
4.11        Effect of Termination.  The provisions of Section 4.00 shall survive
any termination of this Agreement, and the existence of any claim or cause of
action by the Executive against the Company, whether predicated on this
Agreement or otherwise, shall not constitute a defense to the enforcement by the
Company of the covenants and agreements of this Section 4.00; provided, however,
that this Section 4.11 shall not, in and of itself, preclude the Executive from
defending himself against the enforceability of the covenants and agreements of
Section 4.00.

 
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5.00           Termination and Related Benefits
 
This Agreement will terminate upon the occurrence of any of the events described
in this section.
 
5.01        Rules of General Application.  The following rules apply generally
to the implementation of Section 5.00:
 
[1]           Definition of Termination.  For purposes of this Agreement, any
reference to a “termination” of employment or any form thereof shall mean a
“separation from service” as defined in Treasury Regulation §1.409A-1(h) by the
Executive with BLI, BLSI and all persons with whom BLI would be considered a
single employer under Sections 414(b) and (c) of the Internal Revenue Code of
1986, as amended (the “Code”).
 
[2]           Application of Pro Rata.  Any pro rata amount to be paid under
Section 5.00 [a] will be calculated as provided in the program through which the
payment is due or [b] if the payment obligation arises solely under this
Agreement, will be based on the number of days between the first day of the
fiscal year during which the Executive terminates employment and the date that
the Executive terminates employment, divided by the number of days in the fiscal
year during which the Executive terminates employment.
 
[3]           Payment of Bonus (or pro rata share of any Bonus).  Any Bonus
(or pro rata portion thereof) payable pursuant to this Section 5.00 will be paid
in accordance with the terms of the applicable bonus plan, but in no event later
than the fifteenth day of the third month following the later of: [a] the end of
the calendar year during which the Executive died, became Disabled or was
involuntary terminated without Cause, as applicable; or [b] the end of the
Company’s fiscal year in which the Executive died, became Disabled or was
involuntary terminated without Cause, as applicable.

5.02        Termination Due to Executive’s Death.  This Agreement will terminate
automatically on the date the Executive dies.  As of that date, and subject to
Subsection 5.04[6], the Company will make the following payments to the person
the Executive designates on the attached Beneficiary designation form.
 
[1]           Base Salary.  The unpaid Base Salary the Executive earned to the
date of termination.
 
[2]           Bonus.  A pro rata portion of any Bonus the Executive would have
been eligible to receive for the fiscal year in which his death occurs had his
death not occurred.
 
[3]           Other.  Any rights accruing to the Executive under any employee
benefit plan, fund or program maintained by the Company will be distributed or
made available as required by the terms of the plan, fund or program or as
required by law.
 
5.03        Termination Due to Executive’s Disability.  If the Executive becomes
Disabled (as defined in Section 5.03[4], this Agreement shall terminate
automatically.  If all requirements of this Agreement are met (including those
imposed under Section 7.00), the Company will make the following payments to the
Executive:

 
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[1]           Base Salary.  The unpaid Base Salary the Executive earned to the
date of termination.
 
[2]           Bonus.  A pro rata portion of any Bonus the Executive would have
been eligible to receive for the fiscal year in which his termination occurs if
such termination had not occurred.
 
[3]           Other.  Any rights accruing to the Executive under any employee
benefit plan, fund or program maintained by the Company will be distributed or
made available as required by the terms of the plan, fund or program or as
required by law.
 
[4]           Definition of Disability.  For these purposes, “Disability” means
that, for more than six consecutive months, the Executive is unable, with a
reasonable accommodation, to perform the duties described in Section 4.01 on a
full-time basis due to a physical or mental disability or infirmity.
 
5.04        Termination for Cause.  The Company may terminate the Executive’s
employment for Cause (as defined below - “Cause”) by delivering to the Executive
a written notice describing the basis for this termination and the date the
termination for Cause is to be effective.  If the Executive is terminated for
Cause and if all requirements of this Agreement are met, the Company will make
the following payments to the Executive:
 
[1]           Base Salary.  The unpaid Base Salary the Executive earned to the
date of termination.
 
[2]           Other.  Any rights accruing to the Executive under any employee
benefit plan, fund or program maintained by the Company will be distributed or
made available as required by the terms of the plan, fund or program or as
required by 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.

 
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[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.
 
5.05        Voluntary Termination by Executive.  The Executive may voluntarily
terminate employment with the Company at any time, in which case the Company
will make the following payments to the Executive if all requirements of this
Agreement are met:
 
[1]           Base Salary.  The unpaid Base Salary the Executive earned to the
date of termination.
 
[2]           Other.  Any rights accruing to the Executive under any employee
benefit plan, fund or program maintained by the Company will be distributed or
made available as required by the terms of the plan, fund or program or as
required by law.
 
5.06        Involuntary Termination Without Cause.  The Company may terminate
the Executive’s employment at any time without Cause (as defined below) by
delivering to the Executive a written notice specifying the same.  If all
requirements of this Agreement are met (including those imposed under
Section 7.00), and subject to Section 5.04[5], the Company will make the
following payments to the Executive:
 
[1]           Base Salary.  The unpaid Base Salary the Executive earned to the
date of termination.  This amount will be paid in a single lump sum on the
Company’s next regularly scheduled payroll date for similarly situated
employees.

[2]           Bonus.  A pro rata portion of any Bonus the Executive would have
been eligible to receive for the fiscal year in which his termination occurs if
such termination had not occurred.

[3]           Income Continuation.  The Executive will be entitled to continue
to receive his Base Salary until the last day of the twelfth complete calendar
month beginning after the termination date.  Such amounts shall be payable in
accordance with the regularly scheduled payroll for similarly situated
employees.  These payments shall be treated as “separation pay” (within the
meaning of Section 409A of the Code) to the maximum extent permitted by Treasury
Regulation §1.409A-1(b)(9).  Any payments in excess of the maximum amount that
can be treated as separation pay pursuant to Treasury Regulation §1.409A-1(b)(9)
shall be subject to the provisions of Section 5.08.

 
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[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.

[5]           Transportation.  The Executive will be entitled to continue to
receive the automobile benefits described in Section 3.06 until the last day of
the twelfth complete calendar month beginning after the termination date;
provided, however, that: [a] the benefits provided or amount eligible for
reimbursement during any taxable year of the Executive may not affect the amount
eligible for reimbursement or benefits to be provided in any other taxable year
of the Executive; [b] 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 [c] the right to such benefit or
reimbursement may not be subject to liquidation or exchange for another benefit.

[6]           Other.  Any rights accruing to the Executive under any other
compensatory program and employee benefit plan, fund or program maintained by
the Company will be distributed or made available as required by the terms of
the program, plan or fund or as required by law.

5.07  
Termination in Connection With Change of Control.  If the Executive is
Terminated in Connection With a Change of Control (as defined in
Section 5.07[5]) at any time during the Protection Period (as defined in
Section 5.07[4]) and if all other conditions of this Agreement have been met
(including those imposed under Section 7.00) and subject to Section 5.04[5], the
Change Entity (as defined in Section 5.07[2] will pay or make available the
Change Benefits (as defined in Section 5.07[1]) in lieu of any other amounts of
benefits that might otherwise be due under this Agreement on account of that
termination.

 
[1]           Change Benefits.  For purposes of this Agreement, “Change
Benefits” means the aggregate of the following, adjusted if appropriate under
Sections 5.07[6] and [7]:

 
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[a]           Base Salary.  The sum of [i] the Base Salary earned to the date of
termination plus [ii] 200 percent of the Executive’s Base Salary at the highest
rate in effect at any time during the Protection Period.  This amount will be
paid in a lump sum cash payment on the Change Entity’s first regular payroll
date senior executive officers of the Company following the effective date of
the Executive’s Termination in Connection With a Change of Control.
 
[b]           Bonus.  Two hundred percent of the Executive’s Stretch Bonus in
effect under the Bonus Program for the year in which the Executive’s employment
is Terminated in Connection With a Change of Control or, if higher, the Stretch
Bonus in effect under the Bonus Program (or comparable program) at any time
during the Protection Period.  This amount will be paid in a single lump sum on
the Change Entity’s next regularly scheduled payroll date for senior executive
officers of the Company following the date of the Executive’s Termination in
Connection With a Change of Control.
 
[c]           Health Care.  The Change Entity 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 at the lowest rate in effect
at any time during the Protection Period for this coverage, until the earlier of
[i] the last day of the 24th complete calendar month beginning after the date
the Executive is Terminated in Connection With a Change of Control or [ii] the
date the Executive becomes eligible for comparable benefits at comparable costs
to the Executive under another employer sponsored 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 5.07[1][c], 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 5.07[1][c] shall be subject to the following: [A] 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; [B] 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 [C] the right to such reimbursement may not
be subject to liquidation or exchange for another benefit.
 
[d]           Other.  Any rights (including those arising on account of the
Change of Control) accruing to the Executive under any other compensatory
program and employee benefit plan, fund or program maintained by the Change
Entity will be distributed or made available as required by the terms of the
program, plan or fund or as required by law.
 
[2]           Change Entity.  For purposes of this Agreement, “Change Entity”
means the Company, BLI and any other entity that is a party to the Change of
Control.

 
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[3]           Definition of Change of Control.  For purposes of this Agreement,
“Change of Control” means the first to occur of any of the following events:

[a]  The acquisition by any person (as defined under Section 409A of the Code),
or more than one person acting as a group (as defined under 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 (50) percent of the total fair
market value or total voting power of all of the stock of BLI;

[b] The acquisition by any person, or more than one person acting as a group,
within any 12-month period, of the stock of BLI possessing thirty (30) percent
or more of the total voting power of all of the stock of BLI;

[c]  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

[d]  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 (40) percent 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 of Control under this Section 5.07[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 of Control will
be the date upon which the last event occurs or last action is taken such that
the definition of Change of Control (as set forth above) has been
satisfied.  For 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 of
Control.  Notwithstanding the other provisions of this Section 5.07, the term
“Change of 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 50 percent of the then-outstanding equity
securities of BLI entitled to vote for the election of directors, for fifty-one
(51) percent 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.

[4]           Protection Period.  For purposes of this Agreement, “Protection
Period” means the period beginning on the first day of the third full
consecutive calendar month beginning before the date of the Change of Control
and ending on the last day of the twenty-fourth consecutive full calendar month
beginning after the date of the Change of Control.

 
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[5]           Termination in Connection With a Change of Control.  For purposes
of this Agreement, “Termination in Connection With a Change of Control” means,
at any time during the Protection Period:
 
[a]           The Change Entity involuntarily terminates the Executive without
Cause (as defined in Section 5.06).
 
[b]           The Executive terminates following the occurrence of any of the
following conditions;
 
[i]  The Change Entity breaches any provision of this Agreement;
 
[ii] The Change Entity unsuccessfully attempts to terminate the Executive for
Cause (as defined in Section 5.04);
 
[iii]  The Change Entity attempts to terminate the Executive for any reason
without following the procedures described in this Agreement (including an
acceleration of the periods described in Section 5.03[4] and 5.04[b]);
 
[iv]  The Change Entity revokes or attempts to revoke or accelerate the duration
of any leave of absence protected by law or authorized by the Company before the
Protection Period or by the Change Entity at any time during the Protection
Period;
 
[v]  The Change Entity refuses to allow the Executive to return to active
employment at the end of any leave of absence protected by law or authorized by
the Company before the Protection Period or the Change Entity at any time during
the Protection Period; or
 
[vi]  The Change Entity causes the Executive to resign because of a material
adverse change or material diminution in the Executive’s reporting
relationships, job description, duties, responsibilities, compensation,
perquisites, office or location of employment (as reasonably determined by the
Executive in his good faith discretion); provided, however, that the Executive
shall notify the Company in writing at least forty- five (45) days in advance of
any election by the Executive to terminate his employment hereunder, specifying
the nature of the alleged adverse change or diminution, and the Company shall
have a period of ten (10) business days after the receipt of such notice to cure
such alleged adverse change or diminution before the Executive shall be entitled
to exercise any such rights and remedies.
 
For purposes of this Section 5.07[5], the termination of employment is deemed to
occur on the Executive’s actual date of termination.
 
[6]           Treatment of Taxes.  If payments under this Agreement, when
combined with payments and benefits under all other plans and programs
maintained by the Company or the Change Entity, constitute “excess” parachute
payments as defined in Section 280G(b) of the Code, the Change Entity, subject
to Section 5.07[7], will either:

 
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[a]           Reimburse the Executive for the amount of any excise tax due under
Code §4999, if this procedure provides the Executive with an after-tax amount
that is larger than the after-tax amount produced under Section 5.07[6][b]; or
 
[b]           Reduce the Executive’s benefits under this Agreement so that the
Executive’s total “parachute payment” as defined in Code §280G(b)(2)(A) under
this Agreement and all other agreements will be $1.00 less than the amount that
would generate “excess” parachute payment penalties if this procedure provides
the Executive with an after-tax amount that is larger than the after-tax amount
produced under Section 5.07[6][a].
 
This comparison will be made as of the date of the corporate event generating
the “parachute payments” although any reimbursement provided under
Section 5.07[6][a] will be made when the parachute payment is actually made or
distributed.
 
Within 10 business days of the date the Change Entity determines that
Section 5.07[6][b] should be applied, the Change Entity will apprise the
Executive of the amount of the reduction (“Notice of Reduction”).  Within 10
business days of receiving that information, the Executive may specify how (and
against which benefit or payment source) the reduction is to be applied (“Notice
of Allocation”).  The Change Entity will be required to implement these
directions within 10 business days of receiving the Notice of Allocation.  If
the Change Entity has not received a Notice of Allocation from the Executive
within 10 business days of the date of the Notice of Reduction or if the
allocation provided in the Notice of Allocation is not sufficient to fully
implement Section 5.07[6][b], the Change Entity will apply Section 5.07[6][b]
proportionately based on the amounts otherwise payable under this Agreement or,
if a Notice of Allocation has been returned that does not sufficiently implement
Section 5.07[6][b], on the basis of the reductions specified in the Notice of
Allocation.  Any taxes reimbursed pursuant to Section 5.07[6][a] shall be paid
by the end of Executive’s taxable year next following the taxable year in which
Executive remits payment of the tax or assessment being reimbursed.  Any
reduction pursuant to Section 5.07[6][b] shall be made in accordance with
Section 409A of the Code and the Treasury Regulations promulgated thereunder.
 
[7]           Effect of Subsequent Tax Claim.  The Change Entity will establish
procedures that will apply to any inquiries regarding the treatment of tax
payments under this Section 5.07.  Within 30 days following the termination of
the Executive’s employment under Section 5.07, the Change Entity will provide
the Executive with a copy of such procedures.

5.08        Six-Month Distribution Delay.  Notwithstanding the foregoing, if
Executive is a “specified employee,” within the meaning of Treasury Regulation
§1.409A-1(i) and as determined under BLI’s policy for determining specified
employees, on the Executive’s date of termination, and the Executive is entitled
to a payment and/or a 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 the Executive’s date of termination
(or, if earlier, the 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.

 
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6.00           Notice
 
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.
 
7.00           Execution of Release
 
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.

 
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8.00           Insurance and Indemnification
 
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.
 
9.00           Arbitration
 
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.

 
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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.
 
10.00           General Provisions
 
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.

 
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10.02      Modification or Waiver; Entire Agreement.  No provision of this
Agreement may be modified or waived except in a document signed by the Executive
and the Company’s Chief Executive Officer or other person designated by the
Company’s Board of Directors.  This Agreement, and any attachments referenced in
the Agreement, constitute the entire agreement between the Parties regarding the
employment relationship described in this Agreement, and any other agreements
are terminated and of no further force or legal effect.  No agreements or
representations, oral or otherwise, with respect to the Executive’s employment
relationship with the Company have been made or relied upon by either Party
which are not set forth expressly 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.
 
10.04      No Waiver.  Except as otherwise provided in Section 9.05, failure to
insist upon strict compliance with any term of this Agreement will not be
considered a waiver of any such term.
 
10.05      Withholding.  All payments made to the Executive under this Agreement
will be reduced by any amount:
 
[1]           That the Company is required to withhold in advance payment of the
Executive’s federal, state and local income, wage and employment tax liability;
and
 
[2]           To the extent allowed by law, that the Executive owes (or, after
employment is deemed to owe) to the Company.
 
However, application of Subsection 10.05[2] will not extinguish the Company’s
right to seek additional amounts from the Executive (or to pursue other
appropriate remedies) to the extent that the amount that may be recovered by
application of Subsection 10.05[2] does not fully discharge the amount the
Executive owes to the Company and does not preclude the Company from proceeding
directly against the Executive without first exhausting its right of recovery
under Subsection 10.05[2].
 
10.06      Survival.  Subject to the terms of the Executive’s Beneficiary
Designation form, the Parties agree that the covenants and promises set forth in
this Agreement will survive the termination of this Agreement and continue in
full force and effect.

 
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10.07
Miscellaneous.

 
[1]           The Executive may not assign any right or interest to, or in, any
payments payable under this Agreement; provided, however, that this prohibition
does not preclude the Executive from designating in writing one or more
beneficiaries to receive any amount that may be payable after the Executive’s
death and does not preclude the legal representative of the Executive’s estate
from assigning any right under this Agreement to the person or persons entitled
to it.
 
[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.

 
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IN WITNESS WHEREOF, the Parties have duly executed and delivered this Agreement,
which includes an arbitration provision, and consists of 21 pages.
 

 
BIG LOTS, INC.
     
By: /s/ Dennis B. Tishkoff
     
Signed:  December 5, 2008
         
BIG LOTS STORES, INC.
     
By: Brad A. Waite
     
Signed: December 5, 2008
         
ROBERT S. SEGAL
     
/s/ Robert S. Segal
     
Signed:  December 5, 2008

 

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