Document:

EX-10.1

 

Exhibit 10.1

EMPLOYMENT AGREEMENT

BY AND AMONG

BIG LOTS, INC.,

BIG LOTS STORES, INC.

AND

STEVEN S. FISHMAN

This employment agreement (“Agreement”) by and among Big Lots, Inc. (“BLI”), Big Lots Stores, Inc.
(“Big Lots”) and their affiliates, predecessor, successor, subsidiaries and other related companies
(collectively the “Company”) and Steven S. Fishman (“Executive”), collectively, the “Parties,” is
effective as of July 6, 2005 (“Effective Date”) and supersedes and replaces any other oral or
written agreement or understanding concerning the terms of the Executive’s employment with the
Company.

1.00 Duration

This Agreement will remain in effect from the Effective Date until it terminates as provided in
Section 5.00 (“Term”). 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 Chief Executive Officer and, at the
discretion of BLI’s Board of Directors, as the Company’s President, with the authority and duties
customarily associated with this position. The Executive agrees at all times to observe and to be
bound by all Company rules, policies, practices, procedures and resolutions which apply to senior
executive officers of the Company and which do not conflict with the specific terms of this
Agreement. Promptly after the Effective Date, the Executive will be elected to BLI’s Board of
Directors and designated as the Chairman of the Board.

2.02 Place of Performance. Unless the Company requires the Executive to temporarily perform duties
at another location, the Executive’s duties will be performed principally in Columbus, Ohio, except
for travel on the business of any Group Member. The Executive will not be required to relocate his
principal office or personal residence outside of the Columbus, Ohio metropolitan area without his
prior written consent.

3.00 Compensation

The Company will pay the Executive the amounts described in Sections 3.00 and 5.00 as compensation
for the services described in this Agreement and in exchange for the duties and responsibilities
described in Section 4.00. In addition, on the first day of employment, the Executive will receive
a grant of 100,000 restricted common shares of BLI (vesting upon the earlier of the attainment of
mutually agreed BLI common share price targets or after five (5) years of service) and a
non-qualified option to acquire 500,000 common shares of BLI (vesting equally over 4 years and
expiring 7 years after the grant date), both grants made in accordance with the terms and
conditions contained in BLI’s 1996 Performance Incentive Plan.

 

 

3.01 Base Salary. The Company will pay to the Executive an annualized base salary of $960,000,
which, at the discretion of the Company, may be adjusted from time to time in a manner that is
consistent with the Company’s compensation policies in effect for Company employees with a similar
title and position (“Base Amount”) but may not be adjusted to any amount lower than $960,000
without the Executive’s consent. The Executive’s Base Salary will be paid in installments that
correspond with the Company’s normal payroll practices.

3.02 Bonus. The Executive will be eligible to receive bonus compensation (“Bonus”) under and
subject to the terms of the Company’s 1998 Big Lots, Inc. Key Associate Annual Compensation Plan,
as amended (or any such successor plan, hereinafter, “Bonus Program”) for the fiscal year beginning
January 30, 2005 and for each subsequent fiscal year during the Term of this Agreement. The
Executive’s Bonus will be an amount equal to the Base Salary at the end of each fiscal year
multiplied by the Bonus Payout percentage as determined under the Bonus Program. The Bonus Program
is based upon the achievement of the Company’s annual financial plan. The Executive’s Bonus Payout
percentage will consist of a Target Bonus of 77.08 percent of Base Salary and a Stretch Bonus of
165.63 percent of Base Salary. Both “Target Bonus” and a “Stretch Bonus” are defined in the Bonus
Program and are subject to adjustment as provided in the Bonus Program; provided, however, the
Executive’s Target Bonus will never be set at less than 77.08 percent of Base Salary and the
Executive’s Stretch Bonus will never be set at less than 165.63 percent of Base Salary.

[1] Payment. The Payment of any earned Bonuses is subject to the terms of the Bonus Program
and any agreements issued thereunder.

[2] Fiscal Year. The term “fiscal year” means the period beginning on the first Sunday
after the Saturday closest to January 31st of each calendar year and ending on
the Saturday closest to January 31st of the following calendar year.

3.03 Bonus upon Commencement of Employment. Within 15 days after the Executive’s commencement of
employment under this Agreement, the Company will pay to the Executive a one-time sign-on bonus of
$750,000; provided, however, that if the Executive, in accordance with Section 5.05 of this
Agreement, voluntarily terminates his employment within one year after the Effective Date, then the
Executive agrees, on the effective date of his termination, to reimburse to the Company the entire
$750,000 sign-on bonus.

3.04 Benefit and Other Compensatory Plans. Subject to their terms (which the Company may amend at
any time), 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. The Executive also
may participate in any other deferred incentive or similar compensation program maintained by the
Company and generally made available to senior executive officers of the Company.

3.05 Vacation and Sick Leave. The Executive will be entitled to the same periods of vacation and
sick leave each year that the Company provides under its vacation and sick leave policy to other
senior executive officers of the Company, but in no event less than four (4) weeks of annual
vacation.

	 	 	 
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3.06 Expenses. Consistent with the terms of its business expense reimbursement policies and
procedures, the Company will reimburse Executive 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 and procedures.

3.07 Automobile Allowance. The Company at its expense will provide the Executive with a new
current model luxury automobile every three (3) years or after 50,000 miles of use.

3.08 Termination Benefits. The Company will provide the Executive with only those termination
benefits described in Section 5.00.

3.09 Relocation Expenses. Consistent with the terms of its relocation policy, the Company will
reimburse Executive for all normal and reasonable expenses associated with his relocation to the
Columbus, Ohio metropolitan area. The Company will also promptly make a payment to the Executive in
an amount rounded to the nearest $100.00 which is equal to any income, excise, and other taxes
(using the individual tax rate applicable to the Executive for year for which the relocation
occurs) for which the Executive will be liable as a result of his receipt of the relocation
reimbursement (the additional cash payment provided for in this sentence being referred to as a
“Gross-Up Payment”). In addition, the Executive shall be entitled to promptly receive from the
Company a further Gross-Up Payment in respect of each prior Gross-Up Payment until the amount of
the last Gross-Up Payment is less than $100.00.

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 except for services benefiting the Group or any Group Member.

However, the restrictions described in Sections 4.01[1] and [2] will not preclude the Executive
from:

[3] Making or holding passive investments; or

[4] Serving on corporate, civic, religious, educational and/or charitable boards or
committees but only if this activity [a] does not interfere with the Executive’s

	 	 	 
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performance of the duties assumed under this Agreement and [b] 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, including entities that become related entities after the Effective Date
(collectively, “Group” and separately, “Group Member”) have a legitimate and continuing
proprietary interest in the protection of Confidential Information (as defined in Section
4.02[2]) and Intellectual Property (as defined in Section 4.02[3]) and have invested, and
will continue to invest, substantial sums of money to develop, maintain and protect
Confidential Information and Intellectual Property. The Executive agrees [a] during and
after employment with the Company and as to all Group Members [i] that any Confidential
Information and Intellectual Property will be held in confidence by him and treated by him
as proprietary to the Group, [ii] not to use or disclose any Confidential Information or
Intellectual Property 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 and Intellectual Property within his control.

[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 information of a similar confidential nature regarding the business, operations,
properties or personnel of the Group, the Company or any other Group Member which are
disclosed to or learned by the Executive while he is employed by a Group Member, but will
not include [a] the Executive’s own 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 Group that was a matter of public knowledge, [ii] became or
becomes a matter of public knowledge through authorized sources independent of the
Executive, [iii] has been or is disclosed by any Group Member without restriction on its
use, [iv] has been or is required to be disclosed by law or governmental order or regulation
or [v] is germane (but only to the extent that it is germane) to enforcement of the
Executive’s rights under this Agreement and only if its disclosure is a necessary part of
any proceedings described in Section 9.00. The Executive also agrees that, if there is any
reasonable doubt whether an item is public knowledge, he will not regard the item as public
knowledge until and unless the Company’s General Counsel or Chief Executive Officer (other
than the Executive) confirms to the Executive that the information is public knowledge or an
adjudicator 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

	 	 	 
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Executive’s
performance of services under this Agreement, whether individually or jointly with any Group
Member and whether or not it is deemed to be “work made for hire,” which relate to the
business of the Group (the “Intellectual Property”) will be owned solely by the Group and
will be subject to the restrictions set forth in Section 4.02[1]. All Intellectual Property that constitutes copyrightable subject matter under the
copyright laws of the United States will, from its conception, 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 will 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, will be
assigned and is hereby irrevocably assigned to the Company or the Group by the Executive.
Without any additional consideration, the Executive will execute all documents and take all
other actions the Company reasonably believes are needed to convey the Executive’s complete
ownership interest in any Intellectual Property to the Company or the Group so that the
Company or the Group will own and may protect the 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 ownership.

4.03 Solicitation of Employees. The Executive agrees during his employment and for two years after
terminating his employment with all Group Members [1] not, directly or indirectly, to solicit (or
facilitate the solicitation of) any employee of any Group Member to leave employment with the Group
or any Group Member, [2] not, directly or indirectly, to employ, seek to employ or facilitate the
employment of any then employee of any Group Member by an entity that is not a Group Member and [3]
not to cause or induce any entity described in Section 4.05[1] to solicit or employ (or to
facilitate the solicitation or employment of ) any then employee of any Group Member.

4.04 Solicitation of Third Parties. The Executive agrees during his employment and for two years
after terminating his employment with all Group Members 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 Group, the Company or
any other 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 other Group Member’s) business interests.

4.05 Non-Competition. The Executive acknowledges the nature of the Group’s Business (as defined in
Section 4.05[3][a]), and that the Group is one of the limited number of entities which has
developed this type of business; that the Group’s Business is national in scope and the Executive’s
work for the Group, the Company and other Group Members will give Executive access to the
confidential affairs of the Company and other Group Members, to Confidential Information and to
Intellectual Property as defined in Sections 4.02[2] and 4.02[3], respectively; and that the
agreements and covenants of the Executive contained in Section 4.00 are essential to

	 	 	 
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preserving the
Group’s Business and good will. Accordingly, the Executive covenants and agrees that:

[1] During the Restriction Period (as defined in Section 4.05[3][c]) and within the
Restricted Area (as defined in Section 4.05[3][b]) the Executive will not [a] engage in the
Group’s Business for the Executive’s own account, [b] render any services to any
person engaged in the Group’s Business (other than to an entity that is a Group Member when
those services are rendered) 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 and
TJX Corporation. Further, the Executive agrees during the Restricted Period to not become
employed in any manner by or to act as consultant to any successor, parent or subsidiary of
the entities (or types of entities) listed above other than in the course of discharging the
duties described in this Agreement.

[2] Maximum Enforceable Restriction. If 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, the Court is authorized and shall
interpret them to extend over the maximum period of time, the maximum geographic area and
the maximum range of activities or, as to any provision, in such a manner that all
provisions may be given maximum restrictive effect in accordance with applicable law.

[3] Definition Relating to Section 4.05.

[a] Group Business. For purposes of this Agreement, “Group Business” includes (i)
the operation of 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, (ii) the operation of Big Lots furniture stores, and (iii)
related wholesale operations and other lines of business any Group Member develops
during the Term of this Agreement.

[b] Restricted Area. For purposes of this Agreement, “Restricted Area” means the 50
mile radius surrounding any location in which the Group’s Business is conducted
during the Term of this Agreement.

[c] Restriction Period. For purposes of this Agreement, “Restriction Period” means
the Term of this Agreement and one year following termination of the Executive’s
employment with all Group Members, regardless of the reason for termination;
provided, however, that in the event of a Change of Control as defined in Section
5.07[3] of this Agreement, the Restricted Period shall be six (6) months.

4.06 Post-Termination Cooperation. The Executive agrees, during and for a period of three (3)
years after his employment with the Group has terminated and without additional

	 	 	 
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compensation (other
than reimbursement for reasonable associated expenses), except in situations in which the interest
of the Executive and of the Group, the Company or another Group Member are adverse to one another,
to cooperate with the Group, the Company and any other Group Member in the following areas:

[1] Cooperation With the Group, the Company and Other Group Members. The Executive agrees
[a] to be reasonably available to answer questions for any Group
Member’s officers or directors regarding any matter, project, initiative or effort with
which the Executive was involved while employed by any Group Member and [b] to cooperate
with the Group, the Company and any other Group Member during the course of all proceedings
arising out of the Group’s 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 (taking into account his other employment and personal commitments and schedule)
for interviews, meetings, depositions, hearings and/or trials without the need for subpoena
or assurances by the Group, the Company or any other 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 relevant to any
proceedings.

[2] Cooperation With Third Parties. Unless compelled to do so by lawfully-served subpoena
or court order or to the extent it is germane (but only to the extent that it is germane) to
enforcement of the Executive’s rights under this Agreement and only as a necessary part of
any proceedings under this Agreement, the Executive agrees not to communicate with, or give
statements or testimony to, any opposing attorney, opposing attorney’s representative
(including a 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 except in cooperation with the Group, the Company and
other Group Members. The Executive also agrees to notify the Company’s Chief Executive
Officer or 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, radio or electronic
media) relating to any matter (including pending or threatened lawsuits or administrative
investigations) about which the Executive has knowledge or information except in cooperation
with the Group, the Company or any other Group Member. The Executive also agrees to notify
the Company’s Chief Executive Officer or General Counsel immediately after being contacted
by any member of the media with respect to any matter affected by this section.

4.07 Non-Disparagement. The Executive and the Company (on its behalf and on behalf of the Group
and other Group Members) agree that after the Executive’s employment with the Group has terminated
neither will make any disparaging remarks about the other, and the Executive will not make any
disparaging remarks about the Company’s executives or directors

	 	 	 
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or any other Group Member or their
executives and directors. However, this section will not preclude [1] any remarks that may be made
by the Executive [a] under the terms of Section 4.06[2], [b] that are required to discharge the
duties described in this Agreement or [c] are germane (but only to the extent that it is germane)
to enforcement of the Executive’s rights under this Agreement and only as a necessary part of any
proceedings under this Agreement or [2] the Company or any other Group Member from making (or
eliciting from any person) disparaging remarks about the Executive [a] concerning any conduct that
may lead to a termination for Cause, as defined in Section 5.04[3] (including initiating an inquiry
or investigation that may
result in a termination for Cause) or [b] that are germane (but only to the extent that it is
germane) to defending against any action begun by the Executive under this Agreement.

4.08 Notice of Subsequent Employment. The Executive agrees to notify the Company of any subsequent
employment during the Restriction Period and any period during which any payment described in
Section 5.00 is due or is being paid.

4.09 Remedies. The Executive:

[1] Acknowledges that the obligations and restrictions described in Sections 4.02 through
4.08 are reasonable in light of the nature of the Group’s Business and the nature of the
Executive’s relationship with the Group and the Company; that the Group, the Company and all
other Group Members have legitimate business reasons for requiring the Executive’s agreement
to all provisions of Section 4.00; and that the Executive understands these restrictions,
has had an opportunity to fully discuss these restrictions with the Company and accepts the
restrictions.

[2] Agrees that if any of the obligations to the Company under Sections 4.02 through 4.08
are breached, the periods during which the obligations described in Sections 4.02 through
4.08 apply will be extended for the length of time that the Executive failed to fulfill the
obligations under Sections 4.02 through 4.08.

[3] Agrees that [a] any breach of any of the terms of this Section 4.00 would result in
irreparable injury and damage to the Group, the Company and all other Group Members for
which none would have an adequate remedy at law, [b] in the event of such a breach or any
threat of such a breach by the Executive, the Group, the Company and any Group Member will
be entitled to an immediate injunction and restraining order to prevent that breach and/or
threatened breach and/or continued breach by the Executive and/or any and all persons and/or
entities acting for, with and/or through the Executive, without having to prove damages, [c]
no bond will be required of the Group, the Company or any other Group Member in connection
with an action described in Section 4.09[3][a] and [d] not to defend any action seeking
injunctive or other equitable relief referred to in Section 4.09[3][b] on the basis that the
Group, the Company or any other Group Member has an adequate remedy at law in money damages
or otherwise. The terms of this Section 4.09 will not prevent the Company from pursuing any
other available remedies for any breach or threatened breach by the Executive of Section
4.00, including, but not limited to, the recovery of monetary damages from the Executive or
specific performance. In addition to any other available remedies, the Group, the Company
or any Group Member may

	 	 	 
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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 portion 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 that may be owed to the
Executive under this Agreement or under any other compensatory arrangement (other than a
tax-qualified retirement plan) between the Executive and the Group, the Company or any other
Group Member. The Parties agree that any action for breach of any of the provisions of
Section 4.00 and/or injunctive relief will be venued in the Court of Common Pleas, Franklin
County, Ohio.

4.10 Return of Group Property. Upon termination of employment, the Executive agrees to promptly
return to the Company all property then in his possession or control belonging to the Group or any
Group Member; provided, however, that in the event the Executive’s employment is terminated
pursuant to Section 5.06 and the Executive is then utilizing an automobile provided by the Company,
the Executive shall retain the automobile in accordance with the terms of Section 5.06[5].

4.11 Effect of Termination of Agreement. The provisions of Section 4.00 will survive any
termination of this Agreement; and the existence of any claim or cause of action by the Executive
against the Company or any Group Member, whether predicated on this Agreement or otherwise, will
not in and of itself constitute a defense to the enforcement by the Group, the Company or any other
Group Member of the covenants and agreements of this Section 4.00; provided, however, that this
Section 4.11 will not, in and of itself, preclude the Executive from defending against the
enforceability of the covenants and agreements of Section 4.00.

5.00 Termination and Related Benefits

This Agreement will terminate upon the occurrence of any of the events described in this Section
5.00, although all of the obligations, restrictions and duties described in Sections 4.02 through
4.08 will continue after this Agreement terminates and will apply and continue to apply to the
Executive and the Executive’s estate, heirs and assigns for the applicable period described in
Sections 4.02 through 4.08.

5.01 Rules of General Application. The following rules apply generally to the implementation of
Section 5.00:

[1] Method of Payment. The Company, at its option and at any time, may elect to pay, as a
lump sum, any installment payments due under Section 5.00. If the Company decides to pay
any installment obligation due under Section 5.00 as a lump sum, the amount payable will be
reduced to its present value to reflect the value of the acceleration. This reduction will
be based on the rate paid on 90-day U.S. Treasury Bills issued on the last issue date before
the lump sum payment is made.

[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

	 	 	 
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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] Limit on Time and Form of Payment. Subject to Section 409A of the Internal Revenue Code
of 1986, as amended (the “Code”), the payments described in this section will be made at the
time and in the form described in this section. Any amount deferred by application of
Section 409A of the Code will be paid as a lump sum on the first payment date permitted
under Section 409A of the Code and will be increased by interest calculated as described in
Section 5.01[1] or on another basis permitted under Section 409A of the Code.

5.02 Termination Due to Executive’s Death. This Agreement will terminate automatically on the date
the Executive dies. If all requirements of this Agreement are met (including those described in
Section 7.00), as of the Executive’s date of death, and subject to Section 5.04[5], the Company
will make the following payments to the beneficiary the Executive designates on a form acceptable
to the Company. If the Executive has not made an effective beneficiary designation (or has revoked
all beneficiary designations), such payments will be made to the Executive’s estate.

[1] Base Salary. The unpaid Base Salary the Executive earned to the date of termination.
This amount will be paid on the Company’s next regularly schedule 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 death occurs had his death not occurred.

[3] Other. Any rights accruing to the Executive under any other compensatory program and
any 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.

5.03 Termination Due to Executive’s Disability. The Company may terminate this Agreement after
ascertaining that the Executive is Disabled (as defined in Section 5.03[4]) by delivering to the
Executive a written notice of termination for Disability that includes the date termination for
Disability is to be effective. In such event, 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 on the Company’s next regularly schedule 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.

	 	 	 
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[3] 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.

[4] Definition of Disability. For purposes of this Agreement, “Disability” (and any of its
forms) means that, for more than six consecutive months, the Executive is unable, with
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 in Section 5.04[3]). A termination for Cause shall only be effective after [a] the Company
has delivered a written notice to the Executive stating that, in the reasonable opinion of BLI’s
Board, the Executive may be terminated for Cause, specifying the details and
[b] if the failure or action is one that can be cured, the Executive does not cure the matter
giving rise to the Cause determination within 30 days after receiving notice. If the Executive is
terminated for Cause and 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:

[1] Base Salary. The unpaid Base Salary the Executive earned to the date of termination.
This amount will be paid on the Company’s next regularly schedule payroll date for similarly
situated employees.

[2] 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.

[3] Definition of Cause. For purposes of this Agreement, Cause means the Executive’s [a]
failure to comply with Company’s policies and procedures which the Board of Directors of BLI
reasonably determines has had or is likely to have a material adverse effect on the Group,
the Company or any other Group Member; [b] willful or illegal misconduct or grossly
negligent conduct that is materially injurious to the Group, the Company or any other Group
Member, monetarily or otherwise; [c] violation of laws or regulations governing the Group,
the Company or any other Group Member (including the Sarbanes-Oxley Act of 2002) or
violation of the Company’s code of ethics; [d] breach of any fiduciary duty owed to the
Group, the Company or any other Group Member; [e] misrepresentation or dishonesty which the
Board of Directors of BLI reasonably determines has had or is likely to have a material
adverse effect on the Group, the Company or any other Group Member; [f] material breach of
any provision of Section 4.00 of this Agreement; [g] involvement in any act of moral
turpitude that in the reasonable opinion of the Board of Directors of BLI has a materially
injurious effect on the Group, the Company or any other Group Member or their 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] Date of Termination for Cause. Subject to Section 5.04[5], termination for Cause
will be deemed to have occurred on the date the Company specifies in the notice described in
Section 5.04[a] or, if later and if applicable, the end of the period described in Section
5.04[b].

[5] Subsequent Information. The terms of Section 5.04 also will apply if, within six (6)
consecutive calendar months beginning 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 any amounts that the Executive or any
beneficiary received under any other provision of Section 5.00, reduced by the amount the
Executive is entitled to receive under this Section 5.04 and any other legally protected
benefits paid or made available under this Agreement, that originally was applied when the
Executive terminated.

5.05 Voluntary Termination by Executive. The Executive may voluntarily terminate employment with
the Company at any time. In this case, and if all other requirements of this Agreement are met,
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 schedule
payroll date for similarly situated employees.

[2] 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.

5.06 Involuntary Termination Without Cause. The Company may terminate the Executive’s employment
at any time without Cause by delivering to the Executive a written notice specifying the date
termination is to be effective. In such event, 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 schedule
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 twenty-fourth (24th) complete calendar month beginning
after the termination date.

	 	 	 
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[4] Health Care. 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 (24th) 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 Company will also promptly make a payment to the Executive in an amount
rounded to the nearest $100.00 which is equal to any federal, state and local income,
employment and wage taxes (using the individual tax rate applicable to the Executive for
year for which the termination occurs) for which the Executive will be liable as a result of
his receipt of the COBRA reimbursement (the additional cash payment provided for in this
sentence being referred to as a “Gross-Up Payment”). In addition, the Executive shall be
entitled to promptly receive from the Company a further Gross-Up Payment in respect of each
prior Gross-Up Payment until the amount of the last Gross-Up Payment is less than $100.00.

[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 twenty-fourth
complete calendar month beginning after the termination date.

[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]:

[a] Base Salary. The sum of [i] the Base Salary earned to the date of termination
plus [ii] two hundred percent (200%) 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 for
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 (200%) of the Executive’s Stretch Bonus in effect
under the Bonus Program for the fiscal 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

	 	 	 
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any time during the
Protection Period, which in either case shall be deemed for purposes of this Section
5.07[1][b] to have been fully earned by the Executive. 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, if any, 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 twenty-fourth (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 Company will also
promptly make a payment to the Executive in an amount
rounded to the nearest $100.00 which is equal to any federal, state and local
income, employment and wage taxes (using the individual tax rate applicable to the
Executive for year for which the termination occurs) for which the Executive will be
liable as a result of his receipt of the COBRA reimbursement (the additional cash
payment provided for in this sentence being referred to as a “Gross-Up Payment”). In
addition, the Executive shall be entitled to promptly receive from the Company a
further Gross-Up Payment in respect of each prior Gross-Up Payment until the amount
of the last Gross-Up Payment is less than $100.00.

[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.

[3] Definition of Change of Control. For purposes of this Agreement, “Change of Control”
means [a] any person or group [as defined for purposes of Section 13(d) of the Securities
Exchange Act of 1934] becomes the beneficial owner of, or has the right to acquire (by
contract, option, warrant, conversion of convertible securities or otherwise), twenty
percent (20%) or more of the outstanding equity securities of BLI entitled to vote for the
election of directors; [b] a majority of the Board of Directors of BLI is replaced within
any 24 consecutive month period or less by directors not nominated and approved by a
majority of the directors of BLI in office at the beginning of such period (or their
successors so nominated and approved), or a majority of the Board of Directors of BLI at any
date consists of persons not so nominated and approved; [c] the stockholders of BLI approve
an agreement to reorganize, merge or consolidate with another corporation (other than Big
Lots Stores, Inc. or an affiliate); or [d] the stockholders of BLI adopt a plan or

	 	 	 
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approve
an agreement to sell or otherwise dispose of all or substantially all of BLI’s assets
(including without limitation, a plan of liquidation or dissolution) in a single transaction
or series of related transactions. 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 such Change of Control (as set forth above) has been met. For purposes of this
Agreement, the term “affiliate” will mean: [i] any person or entity qualified as part of an
affiliated group which includes BLI pursuant to Section 1504 of the Internal Revenue Code of
1986, as amended (the “Code”); or [ii] any person or entity qualified as part of a
parent-subsidiary group of trades and businesses under common control within the meaning of
Treasury Regulation Section 1.414(c)(2)(b). Determination of affiliate will be tested as of
the date immediately prior to any event constituting a Change of Control. The other
provisions of this Section 5.07 notwithstanding, 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 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 sixth 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.

[5] Termination or Terminated in Connection With a Change of Control. For purposes of this
Agreement, “Termination in Connection With a Change of Control” or “Terminated in connection
with a Change of Control” means, at any time during the Protection Period, the Change
Entity:

[a] Involuntarily terminates the Executive without Cause (as defined in Section
5.06), in which case the termination will be deemed to have occurred on the date the
notice of termination is delivered to the executive;

[b] Breaches any term of this Agreement, in which case the termination will be
deemed to have occurred on the date of the breach, even if the breach became
apparent at a later date;

[c] Unsuccessfully attempts to terminate the Executive for Cause (as defined in
Section 5.04), in which case the termination will be deemed to have occurred on the
date the Change Entity gives the notice of termination for Cause described in
Section 5.04 even if the date on which it is determined that the Change Entity had
no basis for terminating the executive for Cause is beyond the Protection Period;

	 	 	 
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[d] 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]), in which case the termination will be
deemed to have occurred on the date the Change Entity first failed to comply with
those procedures;

[e] 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, in which case the
termination will be deemed to have occurred on the day the Company or the Change
Entity revoked or attempted to revoke or accelerate the leave of absence even if the
date on which it is determined that the Change Entity had no basis for revoking or
acceleration the leaves of absence is beyond the Protection Period; or

[f] 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, in which case
the termination will be deemed to have occurred on the earlier of [i]
the date the Executive attempts to return to active employment or [ii] the last day
or the leave of absence.

[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:

[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 after receiving the Notice of
Reduction, 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

	 	 	 
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required to
implement these directions within 10 business days after receiving the Notice of Allocation.
If the Change Entity has not received a Notice of Allocation from the Executive within 10
business days after 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], then 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.

[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 Constructive Termination. If at any time during the Term of this Agreement the Company or a
Change Entity materially adversely changes or causes a diminution in the Executive’s reporting
relationship, job description, duties, responsibilities, compensation, perquisites, office or
location of employment (as reasonably determined by the Executive is his good faith discretion),
such action by the Company or Change Entity shall constitute a
constructive termination of the Executive’s employment by the Company without Cause, the Executive
shall be entitled to resign from his offices and positions with the Company and shall not be
obligated to perform any further services of any kind for the Company and the Executive shall be
entitled to receive from the Company (and the Change Entity, if applicable) at the applicable times
all of the compensation, benefits and other payments described in Section 5.06 or 5.07 (whichever
may be applicable); 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.

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 [1] in the case of notices
to the Company or the Change Entity, addressed to the Company’s Chief Executive Officer (other than
the Executive) and General Counsel at the Company’s then-current corporate offices and [2] in the
case of notices to the Executive, addressed to the Executive’s last mailing address contained in
the Executive’s personnel file.

6.02 Effective Date. Any notice permitted or required to be given under this Agreement will be
deemed to have been given and will be effective on the date it is delivered.

	 	 	 
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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 and any legally
protected rights the Executive has under any employee benefit plan maintained by the Company, the
Executive or, in the case of any amounts due after the Executive’s death, the person to whom those
amounts are payable (collectively, the “Payee”) must execute a comprehensive release in the form
determined from time to time by the Company in its sole reasonable discretion. Generally, the
release will require the Payee and the Payee’s personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees, legatees and assigns to release and
forever discharge the Group, the Company and all other Group Members, past, present and future, and
their 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 and employment with the Company and arose on or prior to the date of the release
(whether known or unknown to the Executive), 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, 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 (each
as in effect on the Effective Date and as subsequently amended) relating to any matter within the
purview of this Agreement. Upon the Executive’s termination of employment with all Group Members,
the Payee will be presented with a release and if the Payee fails to execute the release, the Payee
agrees to forego any payment described in the first sentence of this section. The Executive
acknowledges that the Executive is an experienced senior executive knowledgeable about the claims
that might arise in the course of employment with and termination from the Company and any other
Group Member and knowingly agrees that the payments upon termination provided for in this Agreement
are satisfactory consideration for the release of all possible claims described in the release.

8.00 Insurance and Indemnification

The Company will indemnify Executive (including his heirs, executors and administrators) to the
fullest extent permitted under the Company’s Regulations and Ohio law and will cause the Executive
to be covered by all directors and officers liability insurance maintained by the Company. 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 or termination from the Group, the Company or with any other Group
Member. Concurrently wit the execution of this Agreement, BLI will enter into an indemnification
agreement with the Executive.

	 	 	 
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9.00 Arbitration

9.01 Acknowledgement of Arbitration. Unless stated otherwise in this Agreement or any other
compensatory or any employee benefit plan, fund or program maintained by the Company, the Parties
agree that arbitration is the sole and exclusive remedy for each of them to resolve (except as
specifically provided in Section 4.09) and redress any dispute, claim or controversy involving the
interpretation or application of this Agreement, the terms, conditions or termination of this
Agreement and 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, state law or local 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 federal, state or local law or ordinances
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 (each as in effect on the Effective Date or as subsequently amended)
relating to any matter within the purview of this Agreement.

9.03 Effect of Arbitration. The Parties intend that any arbitration award relating to any matter
described in Section 9.01 will be final and binding on them and that a judgment on the award may be
entered in any court of competent jurisdiction and that enforcement may be had
according to the terms of that award. This Section 9.03 will survive the termination of this
Agreement.

9.04 Location and Conduct 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 other relief expressly provided by
law.

9.05 Time for Initiating Arbitration. Any claim or controversy relating to any matter described in
Section 9.01 not sought to be submitted to arbitration, in writing, within 90 days after 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

	 	 	 
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this Section 9.05. For
purposes of this Section 9.05, a claim or controversy is sought to be submitted to arbitration on
the date the complaining Party gives written notice to the other party that [1] an issue has arisen
or is likely to arise that, unless resolved otherwise, may be resolved through arbitration under
this 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 [1] may be
awarded to the prevailing party if expressly authorized by statute, or otherwise each party will
bear its own attorney’s fees and costs, but [2] the Executive’s attorney’s fees and other
associated costs and expenses will be borne by the Change Entity with respect to any claim arising
under Section 5.07 but only if the arbitrator concludes the claim legitimately relates to matters
within the contemplation of Section 5.07 (otherwise, the rule described in Section 9.06[1] will
apply).

9.07 Arbitration Exclusive Remedy. The Parties acknowledge that, because arbitration is the
exclusive remedy for resolving the issues described in Section 9.01, neither Party may resort to
any federal, state or local court or administrative agency concerning those issues 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 (personally and in behalf of all the Executive’s personal or
legal representatives, executors, administrators, successors, heirs, distributees, devisees,
legatees and assigns) and the Company (on its own behalf and on behalf of its successors,
including any Change Entity) 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 an
experienced senior executive knowledgeable about the matters (and their effect) within the purview
of this Agreement and is not under any contractual or legal restraint that prevents or prohibits
the Executive from entering into this Agreement or performing the duties and obligations described
in this Agreement.

10.02 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
(other than the Executive) or other person designated by the BLI’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, except as
otherwise specifically provided in this Agreement, any other agreements between the Executive and
the Company 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.

	 	 	 
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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 Parties agree that any invalid or unenforceable provision may and will be
reformed and applied [1] as provided in Section 4.05, with respect to the matters specifically
contemplated in Section 4.00 and [2] with respect to other matters, [a] to the extent needed to
avoid that invalidity or unenforceability and [b] in a manner that is as similar as possible to the
Parties’ intent (as described in this Agreement) and preserves the essential economic substance and
effect of 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 or any
other term of this Agreement.

10.05 Withholding. All payments made to or on behalf of the Executive under this Agreement will be
reduced by any amount:

[1] That the Company is required by law to withhold in advance payment of the Executive’s
federal, state and local income, wage and employment tax liability; and

[2] To the extent determined in accordance with Sections 5.04[5] or 9.00, that the Executive
owes to the Group, the Company or any other Group Member.

Application of Section 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
recovered by application of Section 10.05[2] does not fully discharge the amount the Executive owes
to the Group, the Company or other Group Member and does not preclude the Group, the Company or any
other Group Member from proceeding directly against the Executive without first exhausting its
right of recovery under Section 10.05[2].

10.06 Survival. 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 after this
Agreement terminates to the extent that their performance is required to occur after this Agreement
terminates.

10.07 Miscellaneous.

[1] The Executive may not assign any right or interest to, or in, any payments payable under
this Agreement until they have become due from the Company; 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.

	 	 	 
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[2] This Agreement will be binding upon and will inure to the benefit of the Executive, the
Executive’s personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees, legatees and assigns and the Company and its successors and, to the
extent applicable, the Group and all Group Members.

[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, including any
Change Entity, 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.

IN WITNESS WHEREOF, the Parties have duly executed and delivered this Agreement, which includes an
arbitration provision, and consists of 22 pages.

	 	 	 
	BIG LOTS, INC.
	 
	 	 
	 
	 	 
	By:

	 	/s/ Philip E. Mallott
	

	 	 
	 
	 	 
	Signed: June 6, 2005
	 
	 	 
	BIG LOTS STORES, INC.
	 
	 	 
	 
	 	 
	By:

	 	/s/ Brad A. Waite
	

	 	 
	 
	 	 
	Signed: June 6, 2005
	 
	 	 
	 
	 	 
	STEVEN S. FISHMAN
	 
	 	 
	 
	 	 
	/s/ Steven S. Fishman
	 
	 
	 	 
	Signed: June 5, 2005

	 	 	 
	22

	 	Initials SSF Date 6-5-2005EX-10.2

 

Exhibit 10.2

FIRST AMENDMENT TO

EMPLOYMENT AGREEMENT

BY AND AMONG

BIG LOTS, INC.,

BIG LOTS STORES, INC.

AND

MICHAEL J. POTTER

This first amendment (“Amendment”) to the employment agreement (“Agreement”) by and among Big Lots,
Inc. (“BLI”), Big Lots Stores, Inc. (“Big Lots”) and their affiliates, predecessor, successor,
subsidiaries and other related companies (collectively the “Company”) and Michael J. Potter (the
“Executive”), collectively, the “Parties,” dated January 6, 2005, is effective as of the date below
(“Effective Date”).

The Executive has been employed by the Company since 1991 and has served as the Company’s Chairman,
Chief Executive Officer and President since 2000. In connection with the Company’s selection of
Steven S. Fishman as its new Chief Executive Officer, the Parties wish to amend the terms of the
Agreement as follows. Capitalized terms used herein but not otherwise defined in this Amendment
shall have the meanings set forth in the Agreement.

1.0 Section 2.01[2]. Section 2.01[2] of the Agreement is amended by deleting it in its
entirety and replacing it with the following:

     At the conclusion of the CEO Period (which will terminate upon the employment of a successor
Chief Executive Officer) and for the balance of the Term, to perform the services as may be
reasonably requested by, and solely under the direction of, BLI’s Board of Directors. The period
described in this subsection is referred to as the “CSO Period.”

2.0 The Agreement. Except as otherwise provided herein, all provisions of the Agreement
are and shall remain in full force and effect and are hereby ratified and confirmed in all
respects, and the execution, delivery and effectiveness of this Amendment shall not operate as a
waiver or amendment of any provision of the Agreement not specifically amended herein. All
references to the Agreement shall be deemed to include this Amendment.

     IN WITNESS WHEREOF, the Parties have duly executed and delivered this Amendment on June 9,
2005.

	 	 	 	 	 	 	 
	BIG LOTS, INC.	 	 	 	MICHAEL J. POTTER
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	By:

	 	/s/ Philip E. Mallott
	 	 	 	/s/ Michael J. Potter
	

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	BIG LOTS STORES, INC.	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	By:

	 	/s/ Brad A. Waite

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