Big Lots Annual Report 2020

FY2020 Annual Report · Big Lots

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Big Lots, Inc.
4900 E. Dublin-Granville Road
Columbus, Ohio 43081

April 13, 2021

Dear Big Lots Shareholder:

We cordially invite you to attend the 2021 Annual Meeting of Shareholders of Big Lots, Inc. The
Annual Meeting will be held virtually on Wednesday, May 26, 2021, beginning at 11:00 a.m., Eastern Time.
Due to public health concerns related to the coronavirus (COVID-19) pandemic and to support the health and
welfare of our shareholders and associates, the Annual Meeting will be held in a completely virtual format
through a live webcast. You will not be able to attend the Annual Meeting physically in person. At our virtual
Annual Meeting, shareholders will be able to attend, vote and submit questions by visiting
www.virtualshareholdermeeting.com/BIG2021. We believe that the virtual format will provide a consistent
experience to our shareholders and allow all shareholders to participate in the Annual Meeting regardless of
location.

The following pages contain the Notice of Annual Meeting of Shareholders and the Proxy Statement.

You should review this material for information concerning the business to be conducted at the Annual
Meeting.

Your vote is important and we encourage you to attend and participate in the virtual Annual Meeting.
For additional information regarding how to attend and participate in the virtual meeting format, please see
“Attendance and Participation at the Virtual Annual Meeting” on page 2 of the Proxy Statement. Whether
or not you plan to attend the virtual Annual Meeting, we urge you to vote as soon as possible. If you attend the
virtual Annual Meeting and wish to participate by voting electronically during the virtual Annual Meeting,
you may revoke your previously submitted proxy as described in the Proxy Statement.

Thank you for your ongoing support of, and continued interest in, Big Lots, Inc.

Respectfully submitted,

JAMES R. CHAMBERS
Chairman

BRUCE K. THORN
President and Chief Executive Officer

NOTICE OF 2021 ANNUAL MEETING OF SHAREHOLDERS

Wednesday, May 26, 2021
11:00 a.m. Eastern Time
Virtual Meeting Site: www.virtualshareholdermeeting.com/BIG2021

Notice is hereby given that the 2021 Annual Meeting of Shareholders of Big Lots, Inc. will be held

virtually on Wednesday, May 26, 2021, beginning at 11:00 a.m., Eastern Time. At our virtual Annual
Meeting, shareholders will be able to attend, vote and submit questions by visiting
www.virtualshareholdermeeting.com/BIG2021. You will not be able to attend the Annual Meeting physically
in person.

The Annual Meeting is being held for the following purposes:

1. To elect as directors the eleven nominees named in our accompanying Proxy Statement;

2. To approve, on an advisory basis, the compensation of our named executive officers;

3. To ratify the appointment of Deloitte & Touche LLP as our independent registered public

accounting firm for fiscal 2021; and

4. To transact such other business as may properly come before the Annual Meeting.

Only shareholders of record at the close of business on the record date, March 31, 2021, are entitled to

notice of and to vote at the Annual Meeting and any postponement or adjournment thereof. Further
information regarding voting rights and matters to be voted upon is presented in the accompanying Proxy
Statement.

On or about April 13, 2021, we began mailing to our shareholders of record at the close of business on
March 31, 2021 a Notice of Internet Availability of Proxy Materials containing instructions on how to access
this Notice of Annual Meeting of Shareholders, the Proxy Statement and our Annual Report to
Shareholders for our fiscal year ended January 30, 2021 (“fiscal 2020”), as well as instructions on how to
request a paper copy of the proxy materials.

By Order of the Board of Directors,

Ronald A. Robins, Jr.

Executive Vice President, Chief Legal and Governance Officer,
General Counsel and Corporate Secretary

April 13, 2021
Columbus, Ohio

Your vote is important. Shareholders are urged to vote online. If you attend the virtual Annual Meeting

and wish to participate by voting electronically during the virtual Annual Meeting, you may revoke your
previously submitted proxy as described in the Proxy Statement. To attend and participate in the virtual Annual
Meeting, you will need the control number included on your Notice of Internet Availability of Proxy Materials
(or proxy card, if you received printed copies of the proxy materials). For additional information regarding
how to participate in the virtual meeting format, please see “Attendance and Participation at the Virtual Annual
Meeting” on page 2 of the Proxy Statement.

BIG LOTS, INC.

PROXY STATEMENT

TABLE OF CONTENTS

ABOUT THE ANNUAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PROPOSAL ONE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

GOVERNANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

DIRECTOR COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

STOCK OWNERSHIP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

EXECUTIVE COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PROPOSAL TWO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

AUDIT COMMITTEE DISCLOSURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PROPOSAL THREE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

SHAREHOLDER PROPOSALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PROXY SOLICITATION COSTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

OTHER MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PROXY STATEMENT

The Board of Directors (“Board”) of Big Lots, Inc., an Ohio corporation (“we,” “us,” “our,” the
“Company” or “Big Lots”), is furnishing you this proxy statement (this “Proxy Statement”) to solicit
proxies for use at the 2021 Annual Meeting of Shareholders of Big Lots to be held virtually on Wednesday,
May 26, 2021 beginning at 11:00 a.m., Eastern Time (including any adjournments, postponements or
continuations thereof, the “Annual Meeting”). Due to public health concerns related to the coronavirus
(COVID-19) pandemic and to support the health and welfare of our shareholders and associates, the Annual
Meeting will be held in a completely virtual format through a live webcast. You will not be able to attend
the Annual Meeting physically in person. We believe that the virtual format will provide a consistent experience
to our shareholders and allow all shareholders to participate in the Annual Meeting regardless of location.

At our virtual Annual Meeting, shareholders will be able to attend, vote and submit questions by
visiting www.virtualshareholdermeeting.com/BIG2021. To participate (e.g., submit questions and/or vote)
in the virtual Annual Meeting, you will need the control number included on your Notice of Internet
Availability of Proxy Materials (or proxy card, if you received printed copies of the proxy materials).

This Proxy Statement is dated April 13, 2021, and on or about April 13, 2021, we began mailing to our
shareholders of record at the close of business on March 31, 2021 a Notice of Internet Availability of Proxy
Materials containing instructions on how to access the Notice of Annual Meeting of Shareholders, this
Proxy Statement and our Annual Report to Shareholders for our fiscal year ended January 30, 2021 (“fiscal
2020”).

ABOUT THE ANNUAL MEETING

Purpose of the Annual Meeting

At the Annual Meeting, shareholders will act upon the matters outlined in the Notice of Annual

Meeting included with this Proxy Statement. Specifically, our shareholders will be asked to:

(1) elect eleven directors to serve until the 2022 Annual Meeting of the Shareholders of the Company;

(2) approve, on an advisory basis, the compensation of our named executive officers, as disclosed in
this Proxy Statement pursuant to Item 402 of Regulation S-K, including the Compensation
Discussion and Analysis, compensation tables and the narrative discussion accompanying the
tables (“say-on-pay resolution”);

(3)

ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting
firm for our fiscal year ending January 29, 2022 (“fiscal 2021”); and

(4)

transact such other business as may properly come before the Annual Meeting.

Under our governing documents, no other business may be raised by shareholders at the Annual

Meeting unless proper and timely notice has been given to us by the shareholders seeking to bring such
business before the meeting.

Virtual-Only Meeting Format

Due to the ongoing public health considerations associated with the COVID-19 pandemic, and
because the health, safety and well-being of our associates and shareholders is of utmost importance to us,
we will be holding our 2021 Annual Meeting of Shareholders in a virtual-only meeting format.

Shareholder Voting Rights

Only those shareholders of record at the close of business on March 31, 2021, the record date for the
Annual Meeting (“Record Date”), are entitled to receive notice of, and to vote at, the Annual Meeting. At

the Record Date, the Company had 35,101,482 common shares, $0.01 par value per share (“Common
Shares”) outstanding. Each of the outstanding Common Shares entitles the holder thereof to one vote on
each matter to be voted upon at the Annual Meeting or any postponement or adjournment thereof. The
holders of our Common Shares have no cumulative voting rights in the election of directors. All voting at
the Annual Meeting will be governed by our Amended Articles of Incorporation, our Amended Code of
Regulations and the Ohio General Corporation Law.

Registered Shareholders and Beneficial Shareholders

If your Common Shares are registered in your name directly with our transfer agent, Computershare

Investor Services, LLC, you are considered a holder of record (which we also refer to as a registered
shareholder). If you hold our Common Shares in a brokerage account or through a bank or other holder of
record, you are considered the beneficial shareholder of the Common Shares, which shares are often
referred to as being held in “street name.”

Internet Availability of Proxy Materials

In accordance with rules adopted by the Securities and Exchange Commission (“SEC”), instead of
mailing a printed copy of our proxy materials to each shareholder of record, we are permitted to furnish
our proxy materials, including the Notice of Annual Meeting of Shareholders, this Proxy Statement and our
Annual Report to Shareholders, by providing access to such documents on the Internet. Generally,
shareholders will not receive printed copies of the proxy materials unless they request them. We believe
furnishing proxy materials to our shareholders on the Internet will allow us to provide our shareholders with
the information they need, while reducing the costs of delivery of our proxy materials and the environmental
impact of the Annual Meeting.

A Notice of Internet Availability of Proxy Materials that provides instructions for accessing our proxy
materials on the Internet was mailed directly to registered shareholders. The Notice of Internet Availability
of Proxy Materials also provides instructions regarding how registered shareholders may vote their Common
Shares on the Internet. Registered shareholders who prefer to receive a paper or email copy of our proxy
materials should follow the instructions provided in the Notice of Internet Availability of Proxy Materials for
requesting such paper or email copies.

A notice that directs our beneficial shareholders to the website where they can access our proxy
materials should be forwarded to each beneficial shareholder by the broker, bank or other holder of record
that is considered the registered shareholder with respect to the Common Shares of the beneficial shareholder.
Such broker, bank or other holder of record should also provide to the beneficial shareholders instructions
on how the beneficial shareholders may request a paper or email copy of our proxy materials. Beneficial
shareholders have the right to direct their broker, bank or other holder of record on how to vote their
Common Shares by following the voting instructions they receive from their broker, bank or other holder of
record.

To enroll in the electronic delivery service for future shareholder meetings, use your Notice of Internet

Availability of Proxy Materials (or proxy card, if you received printed copies of the proxy materials) to
register online at www.proxyvote.com and, when prompted, indicate that you agree to receive or access
shareholder communications electronically in future years.

Attendance and Participation at the Virtual Annual Meeting

Annual Meeting Access Instructions

Because the Annual Meeting will be held in a completely virtual format through a live webcast, there is

no physical meeting location. To attend and participate (e.g., submit questions and/or vote) in the virtual
Annual Meeting, holders of Common Shares as of the Record Date, or their duly appointed proxies, should
access the live webcast of the Annual Meeting at www.virtualshareholdermeeting.com/BIG2021. For
additional information regarding how to vote at the virtual Annual Meeting, see “Vote by Internet at the
Annual Meeting” below.

To attend and participate in the virtual Annual Meeting, you will need the control number included on
your Notice of Internet Availability of Proxy Materials (or proxy card, if you received printed copies of the
proxy materials). Access to the webcast of the Annual Meeting will open approximately 15 minutes before
the scheduled start time of the Annual Meeting. We recommend that you log in to the Annual Meeting several
minutes before its scheduled start time. An audio recording of the entire virtual Annual Meeting will be
available in the Investor Relations section of our website (www.biglots.com) after the meeting.

We will have technicians available to assist you with any difficulties you may have accessing the virtual

Annual Meeting. If you encounter any difficulties accessing the virtual Annual Meeting or during the Annual
Meeting, a phone number will be available for you to call at the registration start time on
www.virtualshareholdermeeting.com/BIG2021.

Submission of Questions to Annual Meeting

Shareholders as of the Record Date for the Annual Meeting who attend and participate in the virtual
Annual Meeting may submit questions at www.virtualshareholdermeeting.com/BIG2021 for the question
and answer session that will immediately follow the adjournment of the Annual Meeting. Shareholders must
have the control number included on their Notice of Internet Availability of Proxy Materials (or proxy
card, if they received printed copies of the proxy materials) to submit questions. As with the annual meetings
of shareholders we have held in the past, we will use reasonable efforts to answer all questions relevant to
meeting matters during the virtual Annual Meeting, subject to time constraints and the rules of conduct for
the Annual Meeting.

How to Vote and Revoke Your Vote

Registered Shareholders

After receiving your Notice of Internet Availability of Proxy Materials (or proxy card, if you received

printed copies of the proxy materials), registered shareholders are urged to visit www.proxyvote.com to
access our proxy materials.

If you are a registered shareholder, there are several ways for you to vote your Common Shares:

• Vote By Internet Before the Date of the Annual Meeting. You will have the opportunity to vote

your Common Shares online at www.proxyvote.com until May 25, 2021 at 11:59 p.m., Eastern Time.
When voting online before the date of the Annual Meeting, you must have the control number
included on your Notice of Internet Availability of Proxy Materials (or proxy card, if you received
printed copies of the proxy materials) and follow the instructions.

• Vote By Internet at the Annual Meeting. You may also vote your Common Shares online at

www.virtualshareholdermeeting.com/BIG2021 during the virtual Annual Meeting. When voting
online at the virtual meeting, you must have the control number included on your Notice of Internet
Availability of Proxy Materials (or proxy card, if you received printed copies of the proxy materials)
and follow the instructions.

• Vote By Telephone. You may vote your Common Shares by telephone by calling 1-800-690-6903
from any touch-tone telephone until May 25, 2021 at 11:59 p.m., Eastern Time. When voting by
telephone, you must have the control number included on your Notice of Internet Availability of Proxy
Materials (or proxy card, if you received printed copies of the proxy materials) and follow the
instructions.

• Vote By Mail.

If you received a printed copy of the proxy materials, you may submit your vote by
completing, signing and dating your proxy card and returning it in the prepaid envelope provided with
the proxy materials to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood,
New York 11717. Proxy cards submitted by mail must be received no later than May 25, 2021 to be
voted at the Annual Meeting.

If you vote via the Internet or by telephone, your electronic vote authorizes the named proxy holders in

the same manner as if you signed, dated and returned your proxy card. If you vote via the Internet or by
telephone, do not return your proxy card.

Beneficial Shareholders

Beneficial shareholders have the right to direct the broker, bank or other holder of record that is the
registered holder of their Common Shares on how to vote their Common Shares by following the voting
instructions included in the materials they receive from their registered holder. Beneficial shareholders should
follow the procedures and directions set forth in such voting instructions to instruct their registered holder
how to vote those Common Shares or revoke or change previously given voting instructions (including how
to vote at the Annual Meeting). Beneficial shareholders should contact their broker, bank or other holder
of record to determine the applicable deadlines.

Brokers, banks and other holders of record who hold Common Shares for beneficial shareholders in
street name may vote such Common Shares on “routine” matters (as determined under New York Stock
Exchange (“NYSE”) rules), such as Proposal Three, without specific voting instructions from the beneficial
owner of such Common Shares. Such brokers, banks and other holders of record may not, however, vote
such Common Shares on “non-routine” matters, such as Proposal One, and Proposal Two, without specific
voting instructions from the beneficial owner of such Common Shares. Proxies submitted by such brokers,
banks and other holders of record that have not been voted on “non-routine” matters are referred to as
“broker non-votes.” Broker non-votes will not be counted for purposes of determining the number of
Common Shares necessary for approval of any matter to which broker non-votes apply (i.e., broker non-
votes will have no effect on the outcome of such matter).

How to Revoke or Change Your Vote

If you are a registered shareholder, you may revoke or change your vote at any time before the final

vote at the Annual Meeting by:

• signing and returning a new proxy card with a later date (only your latest completed, signed and

dated proxy card received by May 25, 2021 will be counted);

• submitting a later-dated vote by telephone or via the Internet (only your latest telephone or Internet

voting instructions received by 11:59 p.m., Eastern Time, on May 25, 2021, will be counted);

• attending and participating in the virtual Annual Meeting and voting again online (attending the

virtual Annual Meeting will not by itself revoke a previously submitted proxy); or

• delivering a written revocation to our Corporate Secretary at 4900 E. Dublin-Granville Road,

Columbus, Ohio 43081, received no later than May 25, 2021.

Beneficial shareholders should follow the procedures and directions set forth in the voting instructions

they receive from their registered holder to instruct their registered holder how to revoke or change previously
given voting instructions.

What is a “proxy”?

A proxy is your legal designation of another person to vote the stock you own. That other person is

called a proxy. If you designate someone as your proxy in a written document, that document is also called
a proxy or a proxy card.

Householding

SEC rules allow multiple shareholders residing at the same address the convenience of receiving a
single copy of the Notice of Internet Availability of Proxy Materials (or the Annual Report to Shareholders
and Proxy Statement, if requested) if they consent to do so (we refer to this process as “householding”).
Householding is permitted only in certain circumstances, including when you have the same last name and
address as another shareholder. If the required conditions are met, and SEC rules allow, your household may
receive a single copy of the Notice of Internet Availability of Proxy Materials or, if requested, the Annual
Report to Shareholders and Proxy Statement. Upon request, we will promptly deliver a separate copy of the
Annual Report to Shareholders and Proxy Statement or Notice of Internet Availability of Proxy Materials,
as applicable, to a shareholder at a shared address to which a single copy of the document(s) was delivered.
Such a request should be made in the same manner as a revocation of consent for householding.

You may revoke your consent for householding at any time by contacting Broadridge Financial

Solutions, Inc. (“Broadridge”), either by calling 1-866-540-7095, or by writing to: Broadridge, Householding
Department, 51 Mercedes Way, Edgewood, New York 11717. You will be removed from the householding
program within 30 days of receipt of your instructions at which time you will be sent separate copies of the
Annual Report to Shareholders and Proxy Statement or Notice of Internet Availability of Proxy Materials,
as applicable.

Beneficial shareholders can request more information about householding from their brokers, banks or

other holders of record.

Board’s Recommendations

Subject to revocation, all proxies that are properly completed and timely received will be voted in
accordance with the instructions contained therein. If no instructions are given (excluding broker non-
votes), the persons named as proxy holders will vote the Common Shares in accordance with the
recommendations of the Board. The Board’s recommendations are set forth together with the description of
each proposal in this Proxy Statement. In summary, the Board recommends a vote:

(1) FOR the election of the director nominees identified in Proposal One;

(2) FOR the approval, on an advisory basis, of the compensation of our named executive officers, as

disclosed in this Proxy Statement pursuant to Item 402 of Regulation S-K, including the
Compensation Disclosure and Analysis, compensation tables and the narrative discussion
accompanying the tables (see Proposal Two); and

(3) FOR the ratification of Deloitte & Touche LLP as our independent registered public accounting

firm for fiscal 2021 (see Proposal Three).

If any other matter properly comes before the Annual Meeting, or if a director nominee named in this

Proxy Statement is unable to serve or for good cause will not serve, the proxy holders will vote on such matter
or for a substitute nominee as recommended by the Board.

Quorum

The presence, in person or by proxy, of the holders of a majority of the outstanding Common Shares

entitled to vote at the Annual Meeting will constitute a quorum and permit us to conduct our business at
the Annual Meeting. Virtual attendance of a shareholder at the Annual Meeting constitutes presence in
person for purposes of determining whether a quorum is present at the Annual Meeting. Proxies received but
marked as abstentions and broker non-votes will be included in the calculation of the number of Common
Shares considered to be present at the Annual Meeting for purposes of establishing a quorum.

Vote Required to Approve a Proposal

Proposal One

Our Amended Articles of Incorporation impose a majority vote standard in uncontested elections of
directors and our Corporate Governance Guidelines contain a majority vote policy applicable to uncontested
elections of directors. Specifically, Article Eighth of our Amended Articles of Incorporation provides that
if a quorum is present at the Annual Meeting, a director nominee in an uncontested election will be elected to
the Board if the number of votes cast for such nominee’s election exceeds the number of votes cast against
and/or withheld from such nominee’s election. In all director elections other than uncontested elections,
plurality voting will apply and the director nominees receiving the greatest number of votes cast for their
election will be elected as directors. An “uncontested election” generally means an election of directors at a
meeting of shareholders in which the number of nominees for election does not exceed the number of directors
to be elected.

A properly executed proxy marked as withholding authority with respect to the election of one or more

nominees for director will not be voted with respect to the nominee or nominees for director indicated and

will have the same effect as a vote against the nominee or nominees. Broker non-votes will not be considered
votes cast for or against or withheld from a director nominee’s election at the Annual Meeting.

See the “Governance — Majority Vote Standard and Policy” section of this Proxy Statement for more

information about our majority vote policy and standard.

Other Matters

For purposes of Proposal Two and Proposal Three, the affirmative vote of the holders of a majority of
the outstanding Common Shares will be required for approval. The votes received with respect to Proposal
Two and Proposal Three are advisory and will not bind the Board or the Company. A properly executed proxy
marked “abstain” with respect to Proposal Two and Proposal Three will not be voted with respect to such
matter, although it will be counted for purposes of determining the number of Common Shares necessary for
approval of Proposal Two and Proposal Three. Accordingly, an abstention will have the same effect as a
vote against Proposal Two and Proposal Three. If no voting instructions are given (excluding broker non-
votes), the persons named as proxy holders on the proxy card will vote the Common Shares in accordance
with the recommendation of the Board.

Tabulation

Votes will be counted by an independent inspector of election appointed for the Annual Meeting by the

Board.

Appraisal or Dissenters’ Rights

Shareholders of the Company will not have rights of appraisal or similar dissenters’ rights with respect

to any of the matters identified in this Proxy Statement to be acted upon at the Annual Meeting.

Results

We will announce preliminary results promptly once they are available and will report final results in a

filing with the SEC on a Current Report on Form 8-K. You can access both Form 8-Ks and our other reports
we file with the SEC at our website at https://www.biglots.com/corporate/investors/sec-filings or at the
SEC’s website at www.sec.gov. The information provided on these websites is for informational purposes
only and is not incorporated by reference into this Proxy Statement.

PROPOSAL ONE: ELECTION OF DIRECTORS

In accordance with the Company’s Amended Code of Regulations, the current size of the Board is set
at eleven directors. Jeffrey P. Berger retired from the Board on June 10, 2020 after serving on the Board for
14 years. On October 1, 2020, Aaron Goldstein tendered his resignation as a director of the Company, which
resignation was subsequently accepted by the Board. In addition, the Board has decided not to renominate
Andrew C. Clarke, a current director, for election as a director at the Annual Meeting. The Board has
nominated the eleven persons identified in the biographies set forth below for election as directors at the
Annual Meeting, who include the incumbent directors other than Mr. Clarke and two new nominees, Sandra
Campos and Kimberley A. Newton. At the Annual Meeting, the Common Shares represented by proxies
will be voted, unless otherwise specified, for the election of the eleven director nominees named below. Proxies
cannot be voted at the Annual Meeting for more than eleven persons. Directors are elected to serve until
the next annual meeting of shareholders and until their respective successors are elected and qualified, or until
their earlier death, resignation or removal.

All of the nominees set forth below have consented to being named in this Proxy Statement and to
serve as directors of the Company if elected. It is expected that all nominees proposed by the Board will be
able to serve on the Board if elected. However, if before the Annual Meeting one or more of the Board’s
nominees are unable to serve or for good cause will not serve (a situation that we do not anticipate), the
proxy holders will vote the proxies for the remaining nominees and for substitute nominees chosen by the
Board. If any substitute nominees are designated, we will file an amended proxy statement that, as applicable,
identifies the substitute nominees, discloses that such nominees have consented to being named in the
revised proxy statement and to serve as directors if elected, and includes certain biographical and other
information about such nominees required by the rules of the SEC, but, should any of them decline or be
unable to serve, proxies may be voted for another person nominated as a substitute by the Board. There are
no family relationships, of first cousins or closer, among the Company’s directors and executive officers,
by blood, marriage or adoption.

Set forth below is certain information related to the nominees.

Director Independence

Tenure

Age

Independent Directors
Executive Officer

< 3 years
3-9 years

< 55
55-60 years old
61-65 years old
65-70 years old

Gender Diversity

Racial Diversity

White
Black
Hispanic

Men
Women

Summary of Director Nominee Core Experiences and Skills

Our Board possesses a deep and broad set of experiences and skills that facilitate strong oversight and strategic direction for a
leading retailer. The following chart summarizes the competencies of each director nominee to be represented on our Board.

EXPERIENCE/SKILLS

Campos

Chambers DiGrande

Gottschalk

Jamison

Kingsbury McCormick

Newton

Reardon

Schoppert

Thorn

Retail Industry
Operating or managerial experience
with retailers.

Customer Experience/Omnichannel
and Digital Strategies
Experience developing and
deploying retail (or adjacent sector)
customer experience programs
across physical and digital mediums.

Public Company CEO/COO/CFO/
CHRO
Prior public company C-suite
experience.

Finance/Accounting/Audit
Understanding of finance,
accounting, financial reporting
and/or audit processes.

Legal/Risk Management
Governmental/public policy,
legal/regulatory and risk
management experience.

Strategy, Innovation and Business
Transformation
Experience successfully ideating and
executing transformative business
strategies.

Human Capital/Talent Management
Experience in human resources,
talent and leadership development
and/or executive compensation.

Other Public Company Board
Prior public company board
experience to assist in enhancing
board form and function.

Environmental, Social and
Governance
Significant experience with ESG
strategies and programs.

The lack of an “X” for a particular item does not mean that the director does not possess that qualification, characteristic,
skill or experience. Each of our board members have experience and/or skills in the enumerated areas. However, the “X” indicates
that a director has a particular strength in that area.

The following information is furnished with respect to each of the nominees of the Company, including

information regarding their business experience, director positions held currently or at any time during the
last five years, involvement in certain legal or administrative proceedings, if applicable, and the experiences,
qualifications, attributes or skills that caused the Nominating / Corporate Governance Committee and the
Board to determine that the nominees should serve as our directors. Other than as set forth in this Proxy
Statement, no principal occupation of any of the Board’s nominees has been at any corporation or
organization that is a parent, subsidiary or other affiliate of the Company.

Age: 54
Director since:
Nominated in April 2021
Committees:
• Not applicable

Age: 63
Director since: 2012
Committees:
• None

SANDRA CAMPOS

Ms. Campos is the Chief Executive Officer of Project Verte Inc. (a cloud-
based supply chain platform). Ms. Campos served as the Chief Executive
Officer of DVF (Diane von Fürstenberg) (an apparel retailer) from 2018 to
2020. Prior to joining DVF, she was the Co-President, Women’s Apparel of
Global Brands Group Holding Limited (a branded apparel, footwear and
brand management company) from 2015 to 2018, which included the Juicy
Couture, Bebe, Buffalo, Tretorn, BCBG and Herve Leger brands.
Ms. Campos also held leadership roles with apparel companies Oscar de la
Renta, Ralph Lauren, Nautica International and Polo Jeans Company.

Ms. Campos also founded Fashion Launchpad (a digital educational
platform for the fashion, beauty and retail community), Mobi, Inc. (a
consumer products company) and Cynosure Holdings (a celebrity brand
management company). She is also a member of the advisory board of
Athena Technology Acquisition Corp. (a special purpose acquisition
company).

Qualifications: Ms. Campos’ qualifications to serve on the Board include her
extensive executive experience in the retail, technology and consumer
products industries, global brand building, and omnichannel development.

JAMES R. CHAMBERS

Chairman of the Board of Big Lots, Inc.

Mr. Chambers served as President and Chief Executive Officer and director
of Weight Watchers International, Inc. (weight management services
provider) from 2013 to late 2016. Since his retirement from Weight Watchers
International, Inc. in 2016, he has been serving as a professional director.

Mr. Chambers previously served as President of the US Snacks and
Confectionery business unit and General Manager of the Immediate
Consumption Channel of Kraft Foods Inc. (food manufacturer) until 2011.
Mr. Chambers also served as President and CEO of Cadbury Americas
(confectionery manufacturer) until 2010 and as the President and Chief
Executive Officer of Remy Amerique, Inc. (spirits manufacturer). Prior to
his employment with Remy Amerique, Inc., Mr. Chambers served as the
Chief Executive Officer of Paxonix, Inc. (online branding and packaging
process solutions business), the Chief Executive Officer of Netgrocer.com
(online grocery retailer) and the Group President of Information Resources,
Inc. (global market research provider). Mr. Chambers spent the first
17 years of his career at Nabisco (food manufacturer), where he held
leadership roles in sales, distribution, marketing and information
technology, culminating in the role of President, Refrigerated Foods.
Mr. Chambers previously served as a director of B&G Foods (food
manufacturer) for seven years where he served on the nominating and
governance committee and the compensation committee and as a director of
Weight Watchers International, Inc.

Qualifications: Mr. Chambers’ qualifications to serve on the Board include
his extensive cross-functional packaged goods industry experience, his
extensive leadership experience as a chief executive officer, his 20-year track
record in general management and his experience serving on the boards of
other public companies.

Other Directorships: TIAA Board of Trustees since 2015, where he is
chair-elect and serves on the human resources committee, the nominating
and governance committee and the risk and compliance committee.

SEBASTIAN J. DIGRANDE

Mr. DiGrande is the former Executive Vice President of Strategy and Chief
Customer Officer for Gap Inc. (apparel retailer) from May 2016 until 2019,
where he led the company’s E-Commerce/Digital business, which focused on
strategy, consumer and market insights, customer data and analytics, digital
and customer marketing, payments, loyalty, and franchise teams. Prior to
joining Gap, Inc., Mr. DiGrande was a Senior Partner and Managing
Director for The Boston Consulting Group from 1996 to April 2016. He was
also a leader in BCG’s Technology, Marketing and Digital Innovation
efforts. Since 2019, he has been serving as a professional director.

Qualifications: Mr. DiGrande’s qualifications to serve on the Board include
his extensive experience in senior management roles including leading one of
the largest E-Commerce/Digital business operations, his extensive consulting
background and his qualification as an “audit committee financial expert,”
as defined by applicable SEC rules.

MARLA C. GOTTSCHALK

Ms. Gottschalk is the former Chief Executive Officer of The Pampered
Chef, Ltd. (marketer of kitchen tools, food products and cookbooks), where
she also previously served as President and Chief Operating Officer. Since
her retirement from The Pampered Chef, Ltd. in 2013, she has been serving
as a professional director.

Ms. Gottschalk served as Senior Vice President of Financial Planning and
Investor Relations for Kraft Foods, Inc. (food manufacturer), where she also
previously served as Executive Vice President and General Manager of the
Post Cereal division and Vice President of Marketing and Strategy of the
Kraft Cheese division.

Qualifications: Ms. Gottschalk’s qualifications to serve on the Board include
her extensive experience in operations and strategic management, her
qualification as an “audit committee financial expert,” as defined by
applicable SEC rules, her extensive leadership experience as a chief executive
officer, her expertise in the food industry and her experience serving on the
boards of other public companies.

Other Directorships: Potbelly Corporation (food retailer) since 2009, where
she is chair of the audit committee and a member of the compensation
committee; Reynolds Consumer Products Inc. (consumer products) since
2020, where she is chair of the audit committee; Underwriter Laboratories
since 2009, where she is chair of the compensation committee and serves on
the nominating and governance committee; and Ocean Spray Cranberries,
Inc. since 2014, where she serves on the nominating and governance
committee and the audit committee.

Age: 54
Director since: 2018
Committees:
• Audit
• Nominating /Corporate

Governance

Age: 60
Director since: 2015
Committees:
• Audit (Chair)
• Compensation

Age: 61
Director since: 2015
Committees:
• Compensation
• Nominating /Corporate
Governance (Chair)

• Capital Allocation

Planning

Age: 68
Director since:
Nominated in April 2020
Committees:
• Audit
• Compensation

CYNTHIA T. JAMISON

Ms. Jamison served as Chief Financial Officer or Chief Operating Officer of
several companies during her tenure from 1999 to 2009 at Tatum, LLC
(executive services firm). From 2005 to 2009, she led the CFO services
practice and was a member of the firm’s operating committee. After retiring
from Tatum, Ms. Jamison subsequently served as Chief Financial Officer of
AquaSpy, Inc. from 2009 to 2012 (provider of soil moisture sensors to
monitor soil moisture levels). Since her retirement from AquaSpy Inc. in
2012, she has been serving as a professional director.

Ms. Jamison has also served as Chief Financial Officer of Chart House
Enterprises (food retailer) and held various financial positions at Allied
Domecq Retailing USA, Kraft General Foods and Arthur Anderson LLP.
Ms. Jamison previously served as a director of B&G Foods, Inc. (food
manufacturer and distributor) from 2004 to 2015, where she served as chair
of the audit committee. She previously held board seats at Horizon Organic
Holdings from 2001 to 2003 and Cellu Tissue, Inc.

Qualifications: Ms. Jamison’s qualifications to serve on the Board include
her extensive experience in financial and accounting matters, including
public company reporting, as well as strategy and capitalization expertise,
her qualification as an “audit committee financial expert,” as defined by
applicable SEC rules, and her key management, leadership, financial and
strategic planning, corporate governance and public company executive and
board experience.

Other Directorships: Tractor Supply Company (farm and ranch retailer)
since 2002, where she has served as chairman since 2014; Darden, Inc. (food
retailer) since 2014, where she serves as chair of the audit committee and a
member of the compensation committee; and The ODP Corporation (office
supply retailer) since 2013, where she is chair of the compensation
committee.
THOMAS A. KINGSBURY

Mr. Kingsbury served as President, Chief Executive Officer and a member
of the Board of Directors of Burlington Stores, Inc. (discount clothing
retailer) from 2008 to 2019. He also served as Executive Chairman of the
Board of Directors of Burlington Stores, Inc. from September 2014 to
January 2020.

Mr. Kingsbury previously served as Senior Executive Vice President of
Information Services, E-Commerce, Marketing and Business Development
of Kohl’s Corporation (department store retailer) from August 2006 to
December 2008. Mr. Kingsbury also held various management positions
with The May Department Stores Company (department store retailer)
commencing in 1976, including President and Chief Executive Officer of the
Filene’s division from 2000 to 2006.

Qualifications: Mr. Kingsbury’s qualifications to serve on the board include
his valuable perspectives and unique insights developed from more than
40 years of experience in the retail industry, providing him with a
comprehensive understanding of customer dynamics and shifting consumer
preferences, his broad-based retail experience and extensive experience in
senior leadership positions, including his service as a former president and
chief executive officer and as a current director of a publicly traded retail
company and his qualification as an “audit committee financial expert,” as
defined by applicable SEC rules.

Other Directorships: Tractor Supply Company (farm and ranch retailer)
since 2017, where he serves on the Corporate Governance and Nominating
Committee and the Compensation Committee and B.J.’s Wholesale Club,
Inc. (mass merchant club retailer) since 2020, where he serves on the
Compensation Committee.

CHRISTOPHER J. MCCORMICK

Mr. McCormick is the former President and Chief Executive Officer of
L.L. Bean, Inc. (clothing and outdoor recreation equipment retailer). He
joined L.L. Bean, Inc. in 1983 and held a number of leadership positions in
Advertising and Marketing prior to his tenure as President and Chief
Executive Officer from 2001 until March 2016. Since his retirement from
L.L. Bean, Inc. in 2016, he has been serving as a professional director.
Mr. McCormick previously served as a director of Sun Life Financial, Inc.
(financial services company) from 2017 to 2019, where he served as a
member of the compensation committee and nominating corporate
governance committee.

Qualifications: Mr. McCormick’s qualifications to serve on the Board
include his extensive leadership experience as a chief executive officer of a
retail company, his service on the boards of other public companies and his
qualification as an “audit committee financial expert,” as defined by
applicable SEC Rules.

Other Directorships: Levi Strauss & Co. (clothing retailer) since 2016, where
he is a member of the audit committee and the finance committee.

KIMBERLEY A. NEWTON

Ms. Newton is the former Senior Vice President Consumer Experience of
Hallmark Cards, Inc. (a greeting card and gift products retailer and media
company) from 2017 to 2019. Ms. Newton joined Hallmark Cards, Inc. in
1997 and held a number of leadership positions in marketing and strategy
before serving as Vice President North America Strategy and Planning from
2011 to 2015 and Vice President Corporate Strategy and Business
Development from 2015 to 2017.

Qualifications: Ms. Newton’s qualifications to serve on the Board include
her extensive experience in consumer marketing, corporate strategy, business
development, omnichannel consumer experience, P&L management and
digital transformation.

Age: 65
Director since: 2018
Committees:
• Audit
• Compensation

Age: 48
Director since:
Nominated in April 2021
Committees:
• Not applicable

Age: 68
Director since: 2015
Committees:
• Compensation (Chair)
• Nominating /Corporate

Governance

Age: 54
Director since: 2015
Committees:
• Audit
• Nominating /Corporate

Governance

• Capital Allocation
Planning (Chair)

NANCY A. REARDON

Ms. Reardon is the former Senior Vice President and Chief Human
Resources and Communications Officer of Campbell Soup Company (food
manufacturer). Since her retirement from Campbell Soup Company in 2012,
she has been serving as a professional director.

Additionally, Ms. Reardon served as Executive Vice President of Human
Resources for Comcast Cable Communications, Inc. (telecommunications
provider) from 2002 to 2004. Prior to that, Ms. Reardon served as Partner
and Executive Vice President, Human Resources and Corporate Affairs for
Borden Capital Management Partners (consumer products retailer) from
1997 to 2002, where she developed financial and merger and acquisition
skills through her involvement in multiple transactions for a portfolio of
operating companies. Ms. Reardon previously served as a director of
Warnaco Group, Inc. (apparel retailer) where she served as a member of the
audit committee and the compensation committee.

Qualifications: Ms. Reardon’s qualifications to serve on the Board include
her extensive experience in senior management roles, her experience on the
boards of other public companies and private and charitable organizations,
her experience leading human resources departments and in
communications and public affairs, her leadership skills and her skills in
human capital management, talent development and succession planning.

Other Directorships: Signet Jewelers Limited (jewelry retailer) since 2018,
where she chairs the compensation committee and serves on the nominating
and corporate governance committee and corporate citizenship and
sustainability committee.

WENDY L. SCHOPPERT

Ms. Schoppert is the former Executive Vice President and Chief Financial
Officer of Sleep Number Corporation (bedding retailer and manufacturer)
from June 2011 to February 2014, where she also served as Chief
Information Officer and led Marketing, Digital, International, and New
Channel Development. Since her retirement from Sleep Number
Corporation in 2014, she has been serving as a professional director.

Prior to joining Sleep Number, Ms. Schoppert led US Bank’s Private Asset
Management (financial services company) team from 2004 to 2005 and
served as Head of Product, Marketing & Corporate Development for U.S.
Bank’s Asset Management division from 2002 to 2004. Ms. Schoppert began
her career in the airline industry, serving in various financial, strategic and
general management leadership positions at American Airlines, Northwest
Airlines and America West Airlines. Ms. Schoppert also previously served as
a director of Gaia, Inc. (formerly Gaiam, Inc.) (an alternative media video
streaming service) from 2013 to 2018.

Qualifications: Ms. Schoppert’s qualifications to serve on the Board include
her qualification as an “audit committee financial expert,” as defined by
applicable SEC Rules, her extensive retail experience across finance,
information technology, digital and marketing, and her significant financial
leadership and expertise with respect to the oversight of financial reporting
and disclosure for public companies.

Other Directorships: The Hershey Company (a global confectionery
company) since 2017, where she serves on the audit committee and the

finance & risk management committee, The ODP Corporation (office
supply retailer), where she serves on the audit committee, and Bremer
Financial Corporation (a financial services firm) since 2017, where she
chairs the audit committee and serves on the compensation committee.

BRUCE K. THORN

Mr. Thorn is our President and Chief Executive Officer. Before joining Big
Lots in September 2018, he served as President (since 2017) and Chief
Operating Officer (since 2015) of Tailored Brands, Inc. (a leading specialty
retailer of men’s tailored clothing and formalwear) until 2018. Mr. Thorn
also previously held various enterprise-level roles with PetSmart, Inc. (a pet
supply retailer), most recently as Executive Vice President, Store Operations,
Services and Supply Chain, as well as leadership positions with The Gap,
Inc., Cintas Corp, LESCO, Inc. and The United States Army.

Qualifications: Mr. Thorn’s qualifications to serve on the Board include his
day-to-day leadership as President and Chief Executive Officer of Big Lots,
strong leadership skills, proven management capabilities and more than
25 years of diverse retail and services experience.

Age: 54
Director since: 2018
Committees:
• Capital Allocation

Planning (nonvoting
member)

THE BOARD RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF EACH NOMINEE
LISTED ABOVE.

The following table sets forth some of our key governance policies and practices we have implemented

to advance the objectives and long term interests of our shareholders:

GOVERNANCE

Governance Highlights

• Nine of our ten current directors are independent

• Six of our ten independent director nominees are

women

• Annual election of all directors and Majority

• Annual board and committee self-evaluations

Voting Standard

• Proxy Access for our shareholders
• Executive session of non-employee directors at all

• We have a non-executive chairman
• Director orientation and continuing education

regularly scheduled board meetings

• All committees composed of independent directors

• Limit of 4 public company directorships Board

members may hold

• Annual shareholder engagement

• Mandatory Board retirement at age 72

Board Leadership and Independent Chairman of the Board

The Board is currently composed of the individuals identified in Proposal One, except for Mr. Clarke

who is not standing for reelection at the Annual Meeting. Mr. Clarke and each of the director nominees
(other than Mr. Thorn, our Chief Executive Officer (“CEO”) and President), qualify as an independent (as
defined by the applicable NYSE rules) non-employee director (“non-employee directors”). Mr. Chambers, a
non-employee director, serves as non-executive Chairman of the Board (“Chairman”). The Board believes
it should have the flexibility to establish a leadership structure that works best for us at a particular time, and
it reviews that structure from time to time, including in the context of a change in leadership. The Chairman
works with management to plan the agendas for meetings of the Board, chairs the Board meetings, and is
responsible for briefing our CEO, as needed, concerning executive sessions of the independent members of
the Board. The Chairman also determines when additional meetings of the Board are needed. Additionally,
the Chairman communicates informally with other directors between meetings of the Board to foster free
and open dialogue among directors.

Board Meetings in Fiscal 2020

The Board held 44 meetings during fiscal 2020. During fiscal 2020, each director attended at least 75%
of the aggregate of the total number of meetings of the Board and the committees on which he or she served
(in each case, held during the periods that he or she served). All of our directors attended our 2020 annual
meeting of shareholders, which was held virtually, as required by our Corporate Governance Guidelines. In
addition, the non-employee directors met in executive session at each of the Board’s regularly scheduled
meetings.

Role of the Board’s Committees

The Board has standing Audit, Compensation, Nominating / Corporate Governance and Capital

Allocation Planning Committees. The Board established the Capital Allocation Planning Committee in
April 2020. Each of these committees reports its activities to the Board.

Audit Committee

The primary function of the Audit Committee is to assist the Board in fulfilling its oversight

responsibility with respect to:

(1)

the integrity of the financial reports and other financial information provided by us to our
shareholders and others;

(2) our compliance with legal and regulatory requirements;

(3)

the engagement of our independent registered public accounting firm and the evaluation of the
firm’s qualifications, independence and performance;

(4)

the performance of our system of internal controls;

(5)

the oversight of the performance of the internal audit function;

(6) our audit, accounting and financial reporting processes generally; and

(7)

the evaluation of enterprise risk issues.

All members of the Audit Committee are independent as required by the Audit Committee’s charter

and by the applicable NYSE and SEC rules. The Board has determined that each member of the Audit
Committee is “financially literate,” as required by NYSE rules, and each of Messrs. DiGrande, Kingsbury
and McCormick and Mses. Gottschalk and Schoppert is an “audit committee financial expert,” as defined by
applicable SEC rules.

The functions of the Audit Committee are further described in its charter, which is available in the

Investor Relations section of our website (www.biglots.com) under the “Corporate Governance” caption.
The Audit Committee met eight times during fiscal 2020.

Compensation Committee

The Compensation Committee discharges the responsibilities of the Board relating to the administration

of our compensation programs, including the compensation program for our executive leadership team
(“Leadership Team”). Our Leadership Team is composed of the current executives named in the Summary
Compensation Table (“named executive officers”) and other executives reporting to our CEO.

The responsibilities of the Compensation Committee include:

(1) establishing our general compensation philosophy;

(2) overseeing the development of our compensation programs;

(3) approving goals and objectives for the incentive compensation awarded to the Leadership Team;

(4)

(5)

reviewing and recommending to the Board the other compensation for our CEO and the Leadership
Team;

in coordination with the Nominating / Corporate Governance Committee, monitoring issues
associated with CEO succession planning and management development;

(6) administering our compensation programs; and

(7)

reporting on the entirety of the executive compensation program to the Board.

The Compensation Committee annually conducts a compensation risk assessment. The purpose of the

assessment is to identify risks arising from the Company’s compensation policies, practices and programs
and the controls in place to mitigate any such risks. The Compensation Committee determined that our
compensation policies are consistent with our overall risk structure. Because a significant portion of the
incentive compensation we award is subject to performance goals based on operating profit, we believe
our associates are encouraged to take a balanced approach that focuses on corporate profitability and
performance. If the Company is not profitable at a reasonable level, there are limited payouts under the bonus
programs and restricted stock units may not vest.

The Company has internal controls over the measurement and calculation of the performance
measures, including operating profit, earnings per share, return on invested capital, sales and net income.
These controls, and the auditing of the Company’s financial statements by an independent registered public
accounting firm, are designed to keep the Company, including its compensation programs, from being

susceptible to manipulation by associates. In addition, our associates are subject to the Company’s Code of
Business Conduct and Ethics which covers, among other things, accuracy of books and records.

During fiscal 2020, Mses. Gottschalk, Jamison and Reardon and Messrs. Berger, Kingsbury and
McCormick served on our Compensation Committee. All members of the Compensation Committee are
independent as required by the Compensation Committee’s charter and NYSE rules.

The functions of the Compensation Committee are further described in its charter, which is available in
the Investor Relations section of our website (www.biglots.com) under the “Corporate Governance” caption.
The Compensation Committee met seven times during fiscal 2020.

Nominating / Corporate Governance Committee

The responsibilities of the Nominating / Corporate Governance Committee include:

(1)

(2)

recommending individuals to the Board for nomination as members of the Board and its
committees;

taking a leadership role in shaping our corporate governance policies and practices, including
recommending to the Board changes to our Corporate Governance Guidelines and monitoring
compliance with such guidelines;

(3) developing and recommending to the Board appropriate criteria for determining director

independence;

(4)

in coordination with the Compensation Committee, monitoring issues associated with CEO
succession planning and management development;

(5) overseeing the evaluation of the Board and CEO; and

(6)

reviewing the compensation of the members of the Board and recommending any changes to such
compensation to the Board for its approval.

During fiscal 2020, Mses. Jamison, Reardon and Schoppert and Messrs. Berger, Clarke and DiGrande

served on our Nominating / Corporate Governance Committee. All members of the Nominating / Corporate
Governance Committee are independent as required by the Committee’s charter and NYSE rules.

The functions of the Nominating / Corporate Governance Committee are further described in its charter,

which is available in the Investor Relations section of our website (www.biglots.com) under the “Corporate
Governance” caption. The Nominating / Corporate Governance Committee met seven times during fiscal
2020.

Capital Allocation Planning Committee

The responsibilities of the Capital Allocation Planning Committee include:

(1)

reviewing, at least annually, the Company’s three-year capital expenditure outlook and expected
returns, current year capital expenditure plan and associated returns and three-year liquidity
outlook;

(2) periodically reviewing the Company’s current year actual capital expenditures versus the current

year capital expenditure plan, the Company’s rolling twelve-month liquidity outlook, debt ratio and
other ratios required for compliance with the Company’s credit facilities and management’s
estimate of the Company’s weighted-average cost of capital;

(3)

(4)

reviewing management recommendations on the Company’s declaration and payment of quarterly
or special dividends on our Common Shares;

reviewing management recommendations on the establishment and, upon establishment, execution
of a share repurchase program;

(5) periodically reviewing the Company’s capital allocation strategy in comparison to peers and

industry benchmarks; and

(6)

reviewing the Company’s short-term investment policy.

During fiscal 2020, Mses. Jamison and Schoppert and Messrs. Clarke, Goldstein and Thorn (as a non-
voting member) served on our Capital Allocation Planning Committee. All voting members of the Capital
Allocation Planning Committee meet the NYSE independence requirements.

The functions of the Capital Allocation Planning Committee are further described in its charter, which

is available in the Investor Relations section of our website (www.biglots.com) under the “Corporate
Governance” caption. The Capital Allocation Planning Committee met three times during fiscal 2020.

Selection of Nominees by the Board

The Nominating / Corporate Governance Committee has oversight over a broad range of issues

relating to the composition and operation of the Board. The Nominating / Corporate Governance Committee
is responsible for recommending to the Board the appropriate skills and qualifications required of Board
members, based on our needs from time to time. The Nominating / Corporate Governance Committee also
evaluates prospective director nominees against the standards and qualifications set forth in the Corporate
Governance Guidelines. Although the Nominating / Corporate Governance Committee has not approved
any specific minimum qualifications that must be met by a nominee for director recommended by the
Nominating / Corporate Governance Committee and has not adopted a formal policy with regard to the
consideration of diversity in identifying director nominees, the Nominating / Corporate Governance
Committee considers factors such as the prospective nominee’s relevant experience, character, intelligence,
independence, commitment, judgment, prominence, age, and compatibility with our CEO, senior management
and other members of the Board. The Nominating / Corporate Governance Committee also considers
other relevant factors that it deems appropriate, including the current composition of the Board, the
alignment of the Board members’ skills and experiences with our strategic plan, diversity, experience with
succession planning, crisis management, the balance of management and independent directors, public
company experience and the need for committee expertise. Before commencing a search for a new director
nominee, the Nominating / Corporate Governance Committee confers with the Board regarding the factors
it intends to consider in its search.

In identifying potential candidates for Board membership, the Nominating / Corporate Governance
Committee considers recommendations from the Board, shareholders and management, as well as proxy
access candidates. Any shareholder who wishes to recommend a prospective director nominee to the Board
must send written notice to: Chair of the Nominating / Corporate Governance Committee, Big Lots, Inc.,
4900 E. Dublin-Granville Road, Columbus, Ohio 43081. The written notice must include the prospective
nominee’s name, age, business address, principal occupation, ownership of our Common Shares, information
that would be required under the rules of the SEC in a proxy statement soliciting proxies for the election of
such prospective nominee as a director, and any other information that is deemed relevant by the
recommending shareholder. Shareholder recommendations that comply with these procedures and that
meet the factors outlined above will receive the same consideration that the recommendations of the Board
and management receive.

Pursuant to its written charter, the Nominating / Corporate Governance Committee has the authority

to retain consultants and search firms to assist in the process of identifying and evaluating director candidates
and to approve the fees and other retention terms for any such consultant or search firm. The Nominating
/ Corporate Governance Committee retained Ellig Group to assist it in connection with the search process
that identified Ms. Campos and Ms. Newton, whom the Nominating / Corporate Governance Committee
recommended as nominees for election as directors at the Annual Meeting.

Director Vote Standard and Policy

is present at the Annual Meeting, a director nominee in an uncontested election will be elected to the Board
if the number of votes cast for such nominee’s election exceeds the number of votes cast against and/or
withheld from such nominee’s election. The majority vote policy contained in our Corporate Governance
Guidelines requires any nominee for director who does not receive more votes cast for such nominee’s election
than votes cast against and/or withheld as to his or her election to deliver his or her resignation from the
Board to the Nominating / Corporate Governance Committee. Broker non-votes have no effect in determining
whether the required affirmative majority vote has been obtained. Withheld votes have the same effect as a
vote against a director nominee. Upon its receipt of such resignation, the Nominating / Corporate Governance
Committee will promptly consider the resignation and recommend to the Board whether to accept the
resignation or to take other action. The Board will act on the recommendation of the Nominating / Corporate
Governance Committee no later than 100 days following the certification of the shareholder vote. The
Nominating / Corporate Governance Committee, in making its recommendation, and the Board, in making
its decision, will evaluate such resignation in light of the best interests of Big Lots and our shareholders
and may consider any factors and other information they deem relevant. We will promptly publicly disclose
the Board’s decision in a periodic or current report to the SEC.

Determination of Director Independence

The Board affirmatively determined that Mr. Clarke and all of the directors nominated for election at

the Annual Meeting other than Mr. Thorn are independent of Big Lots, its subsidiaries and its management
under the standards set forth in the NYSE rules, and no director nominee other than Mr. Thorn has a
material relationship with Big Lots, its subsidiaries or its management aside from his or her service as a
director.

In determining that Mr. Clarke and each of the director nominees other than Mr. Thorn is independent,
the Board considered charitable contributions to not-for-profit organizations of which these director nominees
or their immediate family members are executive officers or directors and determined that each of the
transactions and relationships it considered was immaterial and did not impair the independence of any of
the directors.

In addition, all members of the Board’s standing Audit Committee meet the independence standards

required by the Audit Committee’s charter and by the applicable NYSE and SEC rules. All members of the
Compensation Committee meet the independence standards required by the Compensation Committee’s
charter and NYSE rules.

Related Person Transactions

Our Corporate Governance Guidelines, Code of Business Conduct and Ethics, Code of Ethics for
Financial Professionals, and human resources policies prohibit (without the consent of the Board or the
Nominating / Corporate Governance Committee) directors, officers and employees from engaging in
transactions that conflict with our interests or that otherwise usurp corporate opportunities.

Pursuant to our written related person transaction policy, the Nominating / Corporate Governance
Committee evaluates “related person transactions.” Consistent with SEC rules, we consider a related person
transaction to be any transaction, arrangement or relationship (or any series of similar transactions,
arrangements or relationships) in which Big Lots or a subsidiary thereof is, was or will be a participant:

(1)

involving more than $120,000; and

(2)

in which any of our directors, nominees for director, executive officers, holders of more than
five percent of our Common Shares or their respective immediate family members had, has or will
have a direct or indirect material interest.

Under our policy, our directors, executive officers and other members of management are responsible
for bringing all transactions, whether proposed or existing, of which they have knowledge and which they
believe may constitute related person transactions to the attention of our General Counsel. If our General
Counsel determines that the transaction constitutes a related person transaction, our General Counsel will
notify the chair of the Nominating / Corporate Governance Committee. Thereafter, the Nominating /
Corporate Governance Committee will review the related person transaction, considering all factors and

information it deems relevant, and either approve or disapprove the transaction in light of what the
Committee believes to be the best interests of Big Lots and our shareholders. If advance approval is not
practicable or if a related person transaction that has not been approved is discovered, the Nominating /
Corporate Governance Committee will promptly consider whether to ratify the related person transaction.
Where advance approval is not practicable or we discover a related person transaction that has not been
approved and the Committee disapproves the transaction, the Committee will, taking into account all of
the factors and information it deems relevant (including the rights available to us or other parties under the
transaction), determine whether we should amend, rescind or terminate the transaction in light of what it
believes to be the best interests of Big Lots and its shareholders.

Examples of factors and information that the Nominating / Corporate Governance Committee may

consider in its evaluation of a related person transaction include:

(1) our reasons for entering into the transaction;

(2)

the terms of the transaction;

(3)

the benefits of the transaction to us;

(4)

the comparability of the transaction to similar transactions with unrelated third parties;

(5)

the materiality of the transaction to each party;

(6)

the nature of the related person’s interest in the transaction;

(7)

the potential impact of the transaction on the status of an independent director; and

(8)

the alternatives to the transaction.

Additionally, each director, nominee for director and executive officer must complete an annual
questionnaire that requires written disclosure of any related person transaction. The responses to these
questionnaires are reviewed by the Nominating / Corporate Governance Committee and our General Counsel
to identify any potential conflicts of interest or potential related person transactions. The son-in-law of
Lisa Bachmann, our former Executive Vice President, Chief Merchandising and Operating Officer, is
employed by Big Lots as a senior buyer and in fiscal 2020 received compensation greater than $150,000 but
less than $200,000.

Oversight of Corporate Strategy

The Board actively oversees management’s establishment and execution of corporate strategy, including
major business and organizational initiatives, annual budget and long-term strategic plans, capital allocation
priorities and potential corporate development opportunities. At the Board and committee meetings and
throughout the year, the Board regularly receives information and formal updates from our management and
actively engages with the Leadership Team with respect to our corporate strategy, oversight of corporate
culture and human capital management. The Board’s independent directors also hold regularly scheduled
executive sessions at which strategy is discussed.

Board’s Role in Risk Oversight

The Board and its committees play an important role in overseeing the identification, assessment and

mitigation of risks that are material to us. In fulfilling this responsibility, the Board and its committees
regularly consult with management to evaluate and, when appropriate, modify our risk management
strategies. While each committee is responsible for evaluating certain risks and overseeing the management
of such risks, the entire Board is regularly informed about such risks through committee reports. The Board
oversees the conduct of our business and the assessment of our business and other enterprise risks to
evaluate whether the business is being properly managed. The Board also oversees the processes for
maintaining our integrity with regard to our financial statements and other public disclosures, and compliance
with law and ethics.

The Audit Committee assists the Board in fulfilling its oversight responsibility relating to the

performance of our system of internal controls, legal and regulatory compliance, cybersecurity matters, our

audit, accounting and financial reporting processes, and the evaluation of enterprise risk issues, particularly
those risk issues not overseen by other committees. The Compensation Committee is responsible for
overseeing the management of risks relating to our compensation programs and succession planning. The
Nominating / Corporate Governance Committee manages risks associated with corporate governance, related
person transactions, succession planning, and business conduct and ethics. The Capital Allocation Planning
Committee is responsible for overseeing risks related to our liquidity and allocation of capital. The Public
Policy and Environmental Affairs Committee, a management committee that reports to the Nominating /
Corporate Governance Committee, oversees management of risks associated with public policy, environmental
affairs and social matters that may affect our operations, performance or public image.

Environmental, Social and Governance Practices

Our Public Policy and Environmental Affairs Committee takes a leadership role in shaping the policies
and practices of the Company relating to current and emerging public policy, environmental and social trends
and issues that may affect the operations, performance or public image of the Company, including,
without limitation, corporate social responsibility, climate change and related environmental matters,
diversity and philanthropic activities. The Public Policy and Environmental Affairs Committee is comprised
of our Chief Legal and Governance Officer, Chief Financial Officer and a senior investor relations
representative and reports its activities, findings and recommendations to the Board and management at
least annually. The functions of the Public Policy and Environmental Affairs Committee are further described
in its charter, which is available in the Investor Relations section of our website (www.biglots.com) under
the “Corporate Governance” caption.

In addition, the Company recently formed a Diversity, Equity and Inclusion (DEI) Executive Advisory

Committee comprised of six senior leaders of the Company to provide guidance and direction for our
diversity, equity and inclusion efforts on a Company-wide basis and help remove barriers for underrepresented
associates. The Committee solicits ideas from our newly-formed DEI Council, a group of close to 20
associates from all levels and areas of the Company from diverse backgrounds that serve as the voice of all
our associates. In 2021, the Company intends to focus on formalizing its DEI strategy to drive our aim of
increasing associate diversity through best practices such as proactive recruiting at historically black
colleges and universities and establishing more internal business resource groups to help further promote a
diverse and inclusive workplace.

In 2021, we also published our inaugural corporate social responsibility report, titled “BIG Cares,”
which addresses our environmental, social and governance policies, initiatives and achievements. A copy of
the corporate social responsibility report is available on our website (www.biglots.com). Information on our
website, including the corporate and social responsibility report, is not incorporated by reference in or
otherwise considered a part of this Proxy Statement.

Corporate Governance Guidelines

Our Corporate Governance Guidelines comply with applicable NYSE rules and can be found in the
Investor Relations section of our website (www.biglots.com) under the “Corporate Governance” caption.

Code of Business Conduct and Ethics & Code of Ethics for Financial Professionals

We have a Code of Business Conduct and Ethics, which applies to all of our directors, officers and
employees. We also have a Code of Ethics for Financial Professionals which applies to our principal executive
officer, principal financial officer, principal accounting officer, controller and other persons performing
similar functions. Both the Code of Business Conduct and Ethics and the Code of Ethics for Financial
Professionals are available in the Investor Relations section of our website (www.biglots.com) under the
“Corporate Governance” caption. We intend to post amendments to or waivers from any applicable provision
(related to elements listed under Item 406(b) of Regulation S-K) of the Code of Business Conduct and
Ethics and the Code of Ethics for Financial Professionals (in each case, to the extent applicable to our
principal executive officer, principal financial officer, principal accounting officer, controller or persons
performing similar functions), if any, in the Investor Relations section of our website (www.biglots.com)
under the “Corporate Governance” caption.

Compensation Committee Interlocks and Insider Participation

During fiscal 2020, Mses. Gottschalk, Jamison and Reardon and Messrs. Berger, Kingsbury and

McCormick served on our Compensation Committee. No member of our Compensation Committee serves,
or at any time has served, as one of our officers or employees or has, or during fiscal 2020, had a material
interest in any related person transaction, as defined in Item 404 of Regulation S-K. None of our executive
officers serves or, during fiscal 2020, served as a member of the board of directors or compensation
committee of any other company that has or had an executive officer serving as a member of the Board or
our Compensation Committee.

Communications with the Board

Shareholders and other parties interested in communicating directly with the Board, with specified

individual directors or with the non-employee directors as a group, may do so by choosing one of the
following options:

Call:

Write:

(866) 834-7325

Big Lots Board of Directors, 4900 E. Dublin-Granville Road, Columbus, Ohio 43081

Online Message:

http://biglotsbigvoice.com

Under a process approved by the Nominating / Corporate Governance Committee for handling
correspondence received by us and addressed to non-employee directors, our General Counsel reviews all
such correspondence and forwards to the Board or appropriate members of the Board a summary and/or
copies of any such correspondence that deals with the functions of the Board, members or committees thereof
or otherwise requires their attention. Directors may at any time review a log of all correspondence received
by us and directed to members of the Board and may request copies of any such correspondence. Concerns
relating to our accounting, internal accounting controls or auditing matters will be referred to the Audit
Committee. Concerns relating to the Board or members of senior management will be referred to the
Nominating / Corporate Governance Committee. Parties submitting communications to the Board may
choose to do so anonymously or confidentially.

DIRECTOR COMPENSATION

Under the Big Lots, Inc. Non-Employee Director Compensation Package established by the Board,
each non-employee director is compensated for Board and committee participation in the form of retainers
and fees and a restricted stock unit award.

Retainers and Charitable Contributions

During fiscal 2020, Messrs. Berger, Chambers, Clarke, DiGrande, Goldstein, Kingsbury and
McCormick and Mses. Gottschalk, Jamison, Reardon and Schoppert qualified as non-employee directors
and, as a result, received compensation for their Board service. Due to our employment of Mr. Thorn in fiscal
2020, he did not qualify as a non-employee director and did not receive compensation for his services as a
director. The compensation received by Mr. Thorn as an employee is shown in the Summary Compensation
Table included in this Proxy Statement.

We pay our non-employee directors retainers and fees on a quarterly basis. For fiscal 2020, the annual

retainers we paid to non-employee directors consisted of: (1) an annual retainer of $85,000 for each non-
employee director other than the nonexecutive chair; (2) an annual retainer of $170,000 for the nonexecutive
chair; (3) an additional annual retainer of $35,000 for the chair of the Audit Committee; (4) an additional
annual retainer of $25,000 for the chair of the Compensation Committee; (5) an additional annual retainer
of $20,000 for the chair of the Nominating / Corporate Governance Committee and the chair of the Capital
Allocation Planning Committee; (6) an additional annual retainer of $17,500 for each other member of
the Audit Committee; (7) an additional annual retainer of $12,500 for each other member of the Compensation
Committee; and (8) an additional annual retainer of $10,000 for each other member of the Nominating /
Corporate Governance Committee and each other member of the Capital Allocation Planning Committee.
Each term during which our non-employee directors serve on the Board, we donate an aggregate annual
amount of up to $15,000 to charitable organizations nominated by the non-employee director and make
matching charitable donations in an aggregate annual amount of up to $15,000 to charitable organizations
to which the non-employee director makes contributions.

Restricted Stock Units

In June 2020, our nonexecutive chair received a restricted stock unit award having a grant date fair

value equal to approximately $210,000 (6,074 Common Shares) and our other non-employee directors
received a restricted stock unit award having a grant date fair value equal to approximately $145,000 (4,194
Common Shares). The restricted stock unit awards were made under the terms of the Big Lots 2020
Long-Term Incentive Plan (“2020 LTIP”) and will be settled in our Common Shares on the earlier to occur
of (1) the trading day immediately preceding the Annual Meeting or (2) the non-employee director’s
death or disability (as defined in the 2020 LTIP). The non-employee director will forfeit the restricted
stock units if the non-employee director ceases to serve on the Board before either settlement event occurs.
Our non-employee directors may defer all or any portion of their restricted stock unit award until the earlier
to occur of (1) the date specified by the non-employee director, (2) the non-employee director’s death or
disability or (3) the date the non-employee director ceases to serve as a member of the Board. The non-
employee directors must make any deferral election on or before December 31 of the year preceding the grant
of the restricted stock unit award (e.g., December 31, 2019 for awards granted in 2020) or, in the case of a
newly elected director, within thirty days of the date they become eligible to participate in the 2020 LTIP.

Director Compensation Table for Fiscal 2020

The following table summarizes the total compensation for fiscal 2020 for each of our non-employee

directors.

Fees
Earned or
Paid in
Cash
($)
(b)

Stock
Awards
($)(1)(2)
(c)

Option
Awards
($)
(d)

Name
(a)
Mr. Berger(4)
Mr. Chambers . . . . . . . . . . . . 170,000 209,978 —

. . . . . . . . . . . . .

0 —

53,750

Mr. Clarke . . . . . . . . . . . . . .

88,830 144,987 —

Mr. DiGrande . . . . . . . . . . . . 112,500 144,987 —
Mr. Goldstein(5) . . . . . . . . . . .
67,050 144,987 —
Ms. Gottschalk . . . . . . . . . . . 132,500 144,987 —

Ms. Jamison . . . . . . . . . . . . . 127,210 144,987 —

Mr. Kingsbury . . . . . . . . . . . .

97,290 144,987 —

Mr. McCormick . . . . . . . . . . 115,000 144,987 —

Ms. Reardon . . . . . . . . . . . . . 120,000 144,987 —

Ms. Schoppert . . . . . . . . . . . . 129,420 144,987 —

Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)
(f)

Non-Equity
Incentive Plan
Compensation
($)
(e)

—

—
—

—

—
—

—

All
Other
Compensation
($)(3)
(g)

Total
($)
(h)

—

53,750

— 379,978

18,500

252,317

30,000

287,487
— 212,037

17,000

294,487

— 272,197

30,000

272,277

— 259,987

10,000

15,825

274,987

290,232

(1) Amounts in this column reflect the aggregate grant date fair value of the restricted stock unit awards
granted to the non-employee directors in fiscal 2020 as computed in accordance with Financial
Accounting Standards Board Accounting Standards Codification Topic 718 (“ASC 718”). The full
grant date fair value of the fiscal 2020 restricted stock unit award granted to our nonexecutive chair and
each non-employee director was based on individual awards of 6,074 and 4,194 Common Shares,
respectively, at a per Common Share value of $34.57 on the grant date. In accordance with ASC 718
and the 2020 LTIP, the per Common Share grant date value is the closing price of our Common Shares
on the NYSE on the grant date.

(2) As of January 30, 2021, Mr. Chambers held 6,074 restricted stock units and Mses. Gottschalk,

Jamison, Reardon and Schoppert and Messrs. Clarke, DiGrande, Kingsbury and McCormick held
4,194 restricted stock units.

(3) Amounts in this column reflect both matching contributions and payments made by us during fiscal

2020 to charitable organizations nominated by the specified directors.

(4) Mr. Berger retired as a member of the Board on June 10, 2020 and, as a result, did not receive a

restricted stock unit award in fiscal 2020.

(5) Mr. Goldstein resigned from the Board on October 1, 2020 and, as a result, forfeited his restricted

stock unit award for fiscal 2020.

STOCK OWNERSHIP

Ownership of Our Common Shares by Certain Beneficial Owners and Management

The following table sets forth certain information with regard to the beneficial ownership of our

Common Shares by each holder of more than five percent of our Common Shares, each director, each
director nominee, each of the current and former executive officers named in the Summary Compensation
Table, and all executive officers, directors and director nominees as a group. The assessment of holders of
more than five percent of our Common Shares is based on a review of and reliance upon their respective
filings with the SEC. Except as otherwise indicated, all information is as of March 31, 2021.

Name and Address of Beneficial
Owner or Identity of Group(1)

Amount and Nature of
Beneficial Ownership(2)

Percent of Outstanding
Common Shares

Sandra Campos

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Lisa M. Bachmann . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

James R. Chambers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Andrew C. Clarke . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Sebastian J. DiGrande . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Marla C. Gottschalk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Cynthia T. Jamison . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Thomas A. Kingsbury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Christopher J. McCormick . . . . . . . . . . . . . . . . . . . . . . . . . . .

Kimberley A. Newton . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Jack Pestello . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Jonathan E. Ramsden . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Nancy A. Reardon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Ronald A. Robins, Jr. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Michael A. Schlonsky . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Wendy L. Schoppert

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Bruce K. Thorn . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BlackRock, Inc.(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Vanguard Group, Inc.(4) . . . . . . . . . . . . . . . . . . . . . . . . . .
FMR LLC(5)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dimensional Fund Advisors LP(6) . . . . . . . . . . . . . . . . . . . . . .
LSV Asset Management(7)
. . . . . . . . . . . . . . . . . . . . . . . . . . .
All directors, nominees and executive officers as a group

12,175

35,345

4,194

12,678

21,898

20,048

4,194

12,678

59,879

20,048

66,716

93,639

12,794

208,256
5,856,857
5,049,502
2,515,247

2,194,946
2,128,298

(20 persons) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

691,932

*
16.7%
14.4%
7.2%

6.3%
6.1%

1.9%

* Represents less than 1.0% of the outstanding Common Shares.

(1) Unless otherwise indicated, the address for each director and officer is c/o Big Lots, Inc., 4900 E. Dublin-

Granville Road, Columbus, Ohio, 43081.

(2) Each person named in the table has sole voting power and sole dispositive power with respect to all

Common Shares shown as beneficially owned by such person, except as otherwise stated in the footnotes
to this table. The amounts set forth in the table include Common Shares that may be acquired within
60 days of March 31, 2021 through the vesting of restricted stock unit awards as follows: Ms. Bachmann:
12,175; Mr. Chambers: 6,074; Mr. Clarke: 4,194, Mr. DiGrande: 4,194; Ms. Gottschalk, 4,194;
Ms. Jamison: 4,194; Mr. Kingsbury: 4,194; Mr. McCormick: 4,194; Mr. Ramsden: 55,183; Ms. Reardon:
4,194; Mr. Robins: 39,415; Mr. Schlonsky: 40,487; Ms. Schoppert: 4,194; and Mr. Thorn: 154,161.

(3)

(4)

(5)

(6)

(7)

In its Schedule 13G filed on January 25, 2021, BlackRock, Inc., 55 East 52nd Street, New York,
NY 10055, stated that it beneficially owned the number of Common Shares reported in the table as of
December 31, 2020, had sole voting power over 5,753,095 of the shares and sole dispositive power over
5,856,867 of the shares, and had no shared voting power or shared dispositive power over any of the
reported shares.

In its Schedule 13G/A filed on February 10, 2021, The Vanguard Group, Inc., 100 Vanguard Blvd.,
Malvern, PA 19355, stated that it beneficially owned the number of Common Shares reported in the table
as of December 31, 2020, had sole dispositive power over 4,972,222 of the shares, had shared dispositive
power over 77,280 of the shares, had shared voting power over 43,760 of the shares and had no sole
voting power over any of the reported shares.

In its Schedule 13G filed on February 8, 2021, FMR LLC and Abigail P. Johnson (a director and
Chairman and Chief Executive Officer of FMR LLC), 245 Summer Street, Boston, Massachusetts
02210, stated that they beneficially owned the number of Common Shares reported in the table as of
December 31, 2020, had sole voting power over 692,833 of the shares and sole dispositive power over
2,515,247 of the shares, and had no shared voting power or shared dispositive power over any of the
reported shares.

In its Schedule 13G/A filed on February 12, 2021, Dimensional Fund Advisors LP, Building One, 6300
Bee Cave Road, Austin, TX 78746, stated that it beneficially owned the number of Common Shares
reported in the table as of December 31, 2020, had sole voting power over 2,112,745 of the shares and
sole dispositive power over 2,194,946 of the shares, and had no shared voting power or shared dispositive
power over any of the reported shares.

In its Schedule 13G filed on February 11, 2021, LSV Asset Management, 155 North Wacker Drive,
Suite 4600, Chicago, IL 60606, stated that it beneficially owned the number of Common Shares reported
in the table as of December 31, 2020, had sole voting power over 1,315,348 of the shares and sole
dispositive power over 2,128,298 of the shares, and had no shared voting power or shared dispositive
power over any of the reported shares.

Compensation Discussion and Analysis

EXECUTIVE COMPENSATION

This Compensation Discussion and Analysis, or CD&A, describes the compensation program for our

named executive officers for fiscal 2020, who are listed below:

Bruce K. Thorn
President and Chief Executive Officer

Michael A. Schlonsky
Executive Vice President, Chief Human Resources
Officer

Jonathan E. Ramsden
Executive Vice President, Chief Financial and
Administrative Officer

Ronald A. Robins, Jr.
Executive Vice President, Chief Legal and
Governance Officer, General Counsel and
Corporate Secretary

Jack Pestello*
Executive Vice President, Chief Merchandising
Officer

Lisa M. Bachmann**
Former Executive Vice President, Chief
Merchandising and Operating Officer

(*) Mr. Pestello was appointed as our Executive Vice President, Chief Merchandising Officer effective

July 27, 2020.

(**) Ms. Bachmann’s employment as our Executive Vice President, Chief Merchandising and Operating

Officer ended on September 4, 2020.

EXECUTIVE SUMMARY

Company Performance in Fiscal 2020 and Impact of COVID-19

Fiscal 2020 presented unprecedented challenges as a result of the COVID-19 pandemic, which has
disrupted and may continue to disrupt our business. In addition to addressing the challenges presented by
COVID-19, we also continued to implement our transformative restructuring strategy that we call Operation
North Star.

As an essential retailer, Big Lots has been at the forefront of adapting to these unprecedented times.
With the health and safety of our customers and employees as our number one priority, we created a task
force dedicated to responding to COVID-19. As the situation and research rapidly developed, we responded
quickly to implement effective safety protocols in our stores and throughout the Company. Through our
agility and innovation, we continued to safely deliver essential products to our communities throughout the
pandemic. We have always been dedicated to the health and safety of our associates. Now more than ever,
we are focusing on our associates’ total well-being through the pandemic.

In addition to increased health and safety protocols, we came together to provide financial support for
our associates that have been particularly impacted by COVID-19. We are particularly thankful to our store
and distribution center associates, whose dedication through the most uncertain times of the pandemic
enabled us to maintain operations and continue serving our customers. In recognition of this, we provided a
temporary $2 hourly increase to hourly store and distribution center associates. In addition, we provided
an across-the-board 30% associate discount from March through September 2020 and, later in the year,
provided a 40% associate discount on December 23 and December 24, 2020. In addition, to help fund the
Company’s Employee Assistance Fund to provide aid to Big Lots associates affected by COVID-19, each
member of the Company’s senior management, including each of our named executive officers, voluntarily
relinquished 10% of their base salary in each pay period in April, May, and June. The aggregate amount of the
corresponding contribution to the Employee Assistance Fund was approximately $190,000.

While the impact of the COVID-19 pandemic on our business and liquidity was uncertain early in our

fiscal year, government stimulus payments, the emergence of a “nesting” trend among consumers and our
status as an essential retailer, had a significantly positive impact on our sales for the full year. These impacts
complemented and augmented benefits from our Operation North Star strategies launched or expanded

during 2020. As a result of all of these factors, fiscal 2020 was a record year on both the top and bottom
lines. Despite the challenges presented by COVID-19 in fiscal 2020, we also returned approximately
$220 million to our shareholders through share repurchases and dividends in fiscal 2020. The following
charts set forth our (1) net sales, (2) net income, (3) adjusted net income, (4) diluted earnings per common
share, (5) adjusted diluted earnings per common share, (6) increase in comparable sales for stores open at least
fifteen months plus our e-commerce operations, and (7) return on invested capital for fiscal 2018, fiscal
2019 and fiscal 2020 (reconciliations of adjusted net income and adjusted diluted earnings per common share
(each a non-GAAP financial measure) to net income and diluted earnings per share (the most directly
comparable GAAP financial measures), respectively, are attached to this Proxy Statement on Appendix A).

Net Sales

Net Income

$6,199,186,000

$629,191,000

$5,238,105,000

$5,323,180,000

$242,464,000

$156,894,000

2018

2019

2020

2018

2019

2020

Adjusted Net Income

Diluted Earnings Per Common Share

$287,288,000

$16.11

$165,368,000

$144,413,000

$6.16

$3.83

2018

2019

2020

2018

2019

2020

Adjusted Diluted Earnings Per share

Comparable Sales Increase

$7.35

$4.04

$3.67

2018

2019

2020

1.2%

2018

0.3%

2019

16.1%

2020

Return on Invested Capital

48.4%

16.3%

21.2%

2018

2019

2020

The following table sets forth the one-, two- and three-year median annualized total shareholder return

of our peer group, the S&P 500, the S&P 500 Retailing Index and the Company.

Median Annualized TSR

1 Year
(2/1/2020 – 1/31/2021)

2 Year
(2/1/2019 – 1/31/2021)

3 Year
(2/1/2018 – 1/31/2021)

Comparator Group

Peer Group . . . . . . . . . . . . . . . . . . . . . . . . . .

Big Lots Percent Rank vs. Peer Group . . . . . . . .

S&P 500 . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Big Lots Percent Rank vs. S&P 500 . . . . . . . . . .

S&P 500 Retailing . . . . . . . . . . . . . . . . . . . . .

Big Lots Percent Rank vs. S&P 500 Retailing . . .

54.4%
87%

11.0%
99%

21.5%
96%

Big Lots, Inc. . . . . . . . . . . . . . . . . . . . . . . . . .

131.6%

Key Executive Compensation Actions in Fiscal 2020

7.1%
79%

12.9%
92%

25.6%
87%

44.5%

8.7%
40%

8.4%
37%

15.4%
22%

4.2%

• Base Salaries for Named Executive Officers.

In light of the uncertainty surrounding the COVID-19

pandemic, the Committee did not approve any merit increases in fiscal 2020 to the base salaries of
the named executive officers, marking the second consecutive year with no merit-based base salary
increases for our named executive officers. In addition, to help fund the Company’s Employee
Assistance Fund in order to provide aid to Big Lots associates affected by COVID-19, each member
of the Company’s senior management, including each of our named executive officers, voluntarily
relinquished 10% of their base salary in each pay period in April, May, and June. Mr. Pestello joined
the Company in July 2020, and his base salary was established in connection with his hiring.

• Impact of COVID-19 on Annual Cash Incentive Awards.

In light of the uncertainty surrounding the

COVID-19 pandemic, the Committee bifurcated the annual cash incentive award for fiscal 2020
into a (1) a discretionary award based on effective management and leadership through the crisis,
including goals related to health and safety, business continuity, cash and liquidity management, and
internal and external communication, during the first half of fiscal 2020 and (2) an objective
corporate performance-based award based on our adjusted operating profit and comparable sales in
fiscal 2020. Each executive’s total annual cash incentive award for fiscal 2020 was weighted 40% for
the discretionary award and 60% for the corporate performance-based award.

• Impact of COVID-19 on Long-Term Equity Incentive Awards. The long-term equity incentive

awards granted to our named executive officers in fiscal 2020 consisted of performance restricted
stock unit awards (“PRSUs”) (50% weighting) and restricted stock units (“RSUs”) (50% weighting).
The Committee determined the number of PRSUs and RSUs awarded to our named executive
officers in fiscal 2020 by applying a 20 percent premium to the closing price of our Common Shares
on the grant date in an effort to impose appropriate limits on the potential dilution of our Common
Shares and to acknowledge the decline in the market price of our Common Shares following the
onset of the COVID-19 pandemic. As a result, the grant values were approximately 20% lower than
the grant values for 2019. The Committee granted PRSUs in lieu of the performance share units
(“PSUs”) that it has granted in recent fiscal years due to the uncertainty related to the COVID-19
pandemic and resulting challenges in establishing performance goals. The PRSUs were subject to
vesting in one-third tranches based upon the closing price of our Common Shares equaling or
exceeding the following thresholds for 20 consecutive trading days on or before the third anniversary
of the grant date: (1) $17.00; (2) $21.00; and (3) $25.00, which represented premiums of approximately
7%, 33%, and 58%, respectively, above the closing price of our Common Shares on the grant date. No
shares are eligible to vest prior to the first anniversary of the grant date and any vested shares must
be held through the third anniversary of the grant date.

• Payouts on Annual Cash Incentive Awards. Based on the Committee’s assessment of various actions

taken and results achieved by management in the areas of cash and liquidity management and
crisis leadership during the first half of fiscal 2020, each of our named executive officers earned a
maximum payout under the discretionary annual incentive award for fiscal 2020. Based on the

Company’s adjusted operating profit and comparable sales for fiscal 2020, each of our named
executive officers also earned a maximum payout under the objective corporate performance-based
annual incentive awards.

• Vesting of Long-Term Equity Incentive Awards. Based on the Company’s adjusted earnings per

share — diluted (“EPS”) and adjusted return on invested capital (“ROIC”) over the past three years,
the PSUs we granted in fiscal 2018 vested at 145.9% of the target performance level. Based on the
sustained appreciation of the market price of our Common Shares in fiscal 2020, all of the PRSUs we
granted in fiscal 2020 fully vested in April 2021 on the first anniversary of the grant date, although
the underlying Common Shares may not be sold until the third anniversary of the grant date. Based
on the Company’s operating profit in fiscal 2020, one-third of the RSUs we granted in fiscal 2020
vested and the remaining two-thirds will vest ratably over the next two years.

Key Executive Compensation Actions in Fiscal 2021

• Although the COVID-19 pandemic is not over and the potential effect of the pandemic on the

Company’s business remained somewhat unclear at the time of the Committee’s annual evaluation of
the executive compensation program in March 2021, the Committee determined to return to a
more customary mix of merit increases, annual cash incentive awards based entirely on annual
Company financial goals, and long-term equity incentive awards consisting of PSUs (weighted 60%)
and RSUs (weighted 40%) for the named executive officers in fiscal 2021.

Executive Compensation Program Objectives and Components

Compensation Objectives

Our executive compensation program is designed to:

• Pay for superior results by rewarding executives for achieving short- and long-term performance

goals and creating long-term shareholder value;

• Align the interests of our executives with the interests of our shareholders through performance-

and equity-based compensation; and

• Attract and retain talented executives by paying compensation that is competitive with the

compensation paid by the companies in our peer group.

Compensation Components

The following table summarizes the primary components of our executive compensation program and

the primary purposes each component serves in furthering the objectives of our executive compensation
program:

Component

Base Salary

Characteristics

Primary Purposes

Annual fixed cash compensation

Attract and retain talented
executives through an annual
salary that reflects the executive’s
performance, experience and
scope of responsibilities.

Mitigate pressure to take
unnecessary or excessive risks or
unduly focus on the price of our
Common Shares.

Motivate executives to achieve
performance objectives that
directly relate to our annual
operating and strategic goals.
Align the interests of our
executives with the interests of
our shareholders.

Motivate executives to achieve
multi-year financial and strategic
goals and create long-term
shareholder value.

Retain talented executives for the
long-term.

Annual Cash Incentive Awards

Annual variable performance-
based cash compensation

Long-Term Equity Incentive
Awards

Long-term variable equity awards
granted annually as a
combination of performance
based awards (PSUs or PRSUs)
and RSUs

Pay-for Performance

Pay-for-performance is the fundamental objective of our executive compensation philosophy. As a
result, the Committee believes that a majority of each named executive officer’s total compensation should
be at risk or variable based on our performance and/or stock price (i.e., performance-based). The following
graphs show the percentage of the total compensation awarded to Mr. Thorn and our other named
executive officers (who we employed at the end of fiscal 2020) for fiscal 2020 that was performance-based as
disclosed in the Summary Compensation Table.

2020 COMPENSATION AWARDED

MR. THORN

OTHER NEOS

83%
Performance-Linked
Incentive Compensation

17%

74%
Performance-Linked
Incentive Compensation

27%

26%

36%

47%

Salary and Other Compensation

Performance Share Units Award & Restricted Stock Units Award

Annual Bonus Incentive Award

Executive Compensation and Governance Practices and Policies

The following table sets forth executive compensation and governance practices and policies we have
implemented to advance the objectives of our executive compensation program and to align our practices
and policies with industry-leading standards.

Practice

Pay-for-Performance Philosophy

Stock Ownership Requirements

Clawback Policy

Independent Compensation Consultant

Big Lots Policy
✓

A majority of the total target compensation opportunity of
each of our named executive officers is at risk or variable
based on our performance and/or stock price.

✓

All of our executive officers and outside directors are
subject to stock ownership requirements.

All of our executive officers are subject to a compensation
clawback policy.

The Committee engages an independent compensation
consultant that reviews and advises the Committee on
executive compensation. The consultant performs services
solely for the Committee.

Independent Board Chair

✓ We maintain separate CEO and Chairman of the Board

Anti-Hedging and Pledging Policy

Excise Tax Gross-Ups

positions.

✓ We do not allow our directors or Leadership Team
members to enter into any hedging or pledging
transactions relating to our Common Shares.

✓ We do not pay excise tax gross-ups under our severance

agreements in the event of a change in control.

Practice

Dividends on Unearned Awards

“Double-Trigger” Requirements

Big Lots Policy
✓ We do not pay dividends on unearned performance awards.
✓
The 2020 LTIP and our severance agreements only provide
certain cash payments and other benefits upon a change in
control if the participant is terminated in connection with
the change in control.

2020 Say-on-Pay Advisory Vote and Shareholder Engagement

At our 2020 annual meeting of shareholders, our shareholders approved the compensation of our
named executive officers with approximately 98.5% of votes cast in favor of our say-on-pay resolution. The
Committee considers this vote a positive endorsement of our executive compensation program. Our
shareholders’ support of our 2020 say-on-pay resolution and discussions with our shareholders before our
2020 annual meeting contributed to the Committee’s decision to not make significant changes to our current
executive compensation program, other than in connection with addressing the uncertainty as a result of
the COVID-19 pandemic.

EXECUTIVE COMPENSATION PROCESS

Roles in Executive Compensation Process

The principal roles of the Committee, our outside directors, our CEO and members of management in

our executive compensation process are as follows:

Responsible Party

Compensation Committee

Role

Lead the process for establishing our annual executive
compensation program and approve or recommend that the
Board approve compensation actions.

Consult with management and the Committee’s compensation
consultant regarding employee benefit and compensation
programs, plans and awards.

All Outside Directors

Conduct comprehensive evaluation of CEO performance.

CEO

Management

Approve annual executive compensation program and finalize
compensation awards for the members of our Leadership
Team.

Provide the Committee and other outside directors with an
annual performance evaluation and compensation
recommendation for each of the other members of our
Leadership Team in the first quarter of each fiscal year based
on the CEO’s direct knowledge of their respective
performance and contributions.

Make recommendations to the Committee and our CEO
regarding the design and administration of our employee
benefit and compensation programs, plans and awards in
accordance with the Committee’s charter and the terms of our
compensation plans.

Advise the Committee and our CEO regarding the
competitiveness of existing and proposed compensation
programs and the impact of accounting rules, laws and
regulations on existing and proposed compensation programs.

Fiscal 2020 Executive Compensation Process

The Committee maintains an annual calendar for reviewing and approving the compensation elements
described above for our named executive officers. The table below summarizes the timing of key actions for
establishing our executive compensation program for fiscal 2020.

Committee Meeting Date

March 3, 2020
(Regular Meeting)

March 31, 2020
(Special Meeting)

April 3, 2020
(Special Meeting)

July 24, 2020
(Special Meeting)

Key Actions for Establishing Fiscal 2020 Compensation

• Reviewed structure and goals for annual cash incentive awards
and long-term equity incentive awards and deferred approval
of the awards to a subsequent meeting.

• Reviewed and approved the 2020 LTIP for approval by

shareholders at the 2020 annual meeting.

• Reviewed goals for the 2018 and 2019 PSUs based 50% each
on EPS and ROIC and deferred approval of the goals to a
subsequent meeting.

• Reviewed base salary, target annual cash incentive levels, and
long-term equity incentive award levels for fiscal 2020 for the
CEO and Leadership Team (including the named executive
officers) and determined that no increases would be made to
any of the compensation elements for the CEO or Leadership
Team.

• Reviewed a market update of observed and anticipated

COVID-19 impacts to compensation programs provided by
the Committee’s compensation consultant.

• Bifurcated the fiscal 2020 plan year for annual cash incentive
compensation purposes and established the discretionary
bonus based on effective management and leadership through
the crisis, including goals related to health and safety, business
continuity, cash and liquidity management, and internal and
external communication, during the first half of fiscal 2020.

• Deferred establishment of the corporate performance-based

award until August 2020 to be based on our adjusted operating
profit and comparable sales in fiscal 2020.

• Reviewed potential alternatives to the typical grant of 60%

PSUs and 40% RSUs and deferred approval to a subsequent
meeting.

• Approved a structure for awarding fiscal 2020 long-term

equity incentive awards, consisting of PRSUs (50% weighting)
and RSUs (50% weighting) for the CEO and Leadership
Team, including performance goals and vesting terms.

• Approved the grant of awards under the approved structure
above by applying a 20% premium to the grant date share
price used to convert the grant value to the number of units
granted.

• Reviewed an update on the Company’s financial performance
and management’s progress on goals under the discretionary
cash incentive award.

Committee Meeting Date

August 26, 2020
(Regular Meeting)

Key Actions for Establishing Fiscal 2020 Compensation

• Reevaluated the weighting of the discretionary and objective
annual cash incentive award opportunities for fiscal 2020 and
approved an increase to the weight of the discretionary award
from 20% to 40% and a reduction to the weight of the
objective award from 80% to 60%.

• Reviewed management’s performance against goals under the
discretionary annual cash incentive awards and approved a
payout at maximum.

• Established criteria for the objective annual cash incentive

award opportunity based 80% on an operating income target
and 20% on a comparable sales target.

• Established 2020 plan year goals for the 2018 and 2019 PSUs,

based 50% each on EPS and ROIC.

Performance Evaluation Process

The Committee and our outside directors generally consider the following objective and subjective

factors when evaluating the performance of the members of our Leadership Team:

• long-term strategic goals

• short-term business goals

• profit and revenue goals

• expense goals

• operating margin improvement

• earnings per share growth

• capital efficiency metrics

• fostering teamwork and other

corporate values

• optimization of organizational
effectiveness and productivity

• leadership and the

development of talent

• the performance of our

• comparable store and

competitors

ecommerce sales growth of the
Company compared to the
industry

• specific business challenges and
general economic and market
conditions

The Committee and the other outside directors do not assign any of these performance factors a

specific weight and may consider different factors for each executive.

Independent Compensation Consultant

The Committee has the authority, in its sole discretion, to retain compensation consultants. In

establishing executive compensation for fiscal 2020, the Committee retained Meridian Compensation
Partners, LLC (“Meridian”) as its compensation consultant based on its independence, expertise and past
service to the Committee. Meridian provided research, data analyses, survey information and design expertise
in developing compensation programs for executives and incentive programs for eligible employees.
Meridian kept the Compensation Committee apprised of regulatory developments and market trends
related to executive compensation practices. Meridian does not determine or recommend the exact amount
or form of executive compensation for any of the named executive officers. Representatives of Meridian
attended meetings of the Compensation Committee.

Peer Compensation Data

During the course of establishing our fiscal 2020 executive compensation program, the Committee
reviewed compensation data for a group of retailers similar to us with whom we believe we compete for
talent (the “Retailer Peer Group”). In selecting the Retailer Peer Group, the Committee considered revenue,
gross profit margin, geographic location, market capitalization and number of stores. The companies
included in the Retailer Peer Group for fiscal 2020 compensation decisions were:

• Abercrombie & Fitch

• Burlington Stores

• L Brands

• Advance Auto Parts

• Dick’s Sporting Goods

• RH

• American Eagle Outfitters

• DSW

• Ascena Retail Group

• Express

• Tractor Supply

• Urban Outfitters

• Bed Bath & Beyond

• Foot Locker

• Williams — Sonoma

As a secondary reference, the Committee also reviewed executive compensation data regarding a
broader group of retail companies included in a compensation survey provided by Equilar. We believe it is
important to consult both sets of information because the compensation survey for the broader group includes
compensation information on more executives and provides a more extensive basis on which to compare
the compensation of the Leadership Team members, particularly those Leadership Team members whose
responsibilities, experience and other characteristics are not directly comparable to the executives included in
the publicly-available reports of the Retailer Peer Group.

The Committee and our human resources department reviewed each Leadership Team member’s
responsibilities and compared, where possible, the total direct compensation (which includes salary, annual
incentive award at target and equity awards) levels for our Leadership Team members to the total direct
compensation of similarly situated executives within the peer groups.

As discussed in this CD&A, we determine compensation subjectively based on numerous factors. We

do not benchmark or target our compensation at any particular level in relation to the compensation of the
peer groups. Rather, the peer group data provides a point of reference and market check.

COMPONENTS OF OUR 2020 EXECUTIVE COMPENSATION PROGRAM

Base Salary

The Committee annually reviews and establishes the base salary for each named executive officer. The

Committee determines adjustments to the base salaries of our named executive officers based on each
executive’s performance, experience, scope of responsibilities and base salary in comparison to our other
employees and similarly positioned executives in our Retailer Peer Group and the anticipated future
contributions of the executive. For fiscal 2020, the Committee approved the following salaries for the named
executive officers, which were unchanged from fiscal 2019, except in the case of Mr. Pestello, who joined
the Company in July 2020. To help fund the Company’s Employee Assistance Fund to provide aid to Big Lots
associates affected by COVID-19, each member of the Company’s senior management, including each of
the named executive officers, voluntarily relinquished 10% of their base salary in each pay period in April,
May, and June.

Name

Fiscal 2020
Established Salary
($)

Fiscal 2020
Relinquished Salary
($)

Fiscal 2020
Paid Salary
($)

Mr. Thorn . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mr. Ramsden . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mr. Schlonsky . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mr. Robins . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mr. Pestello* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ms. Bachmann** . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$1,100,000
$ 700,000
$ 513,600
$ 500,000
$ 320,000
$ 484,169

$27,500
$17,500
$12,840
$12,500
$
0
$19,669

$1,072,500
$ 682,500
$ 500,760
$ 487,500
$ 320,000
$ 464,500

(*) Mr. Pestello was appointed as our Executive Vice President, Chief Merchandising Officer effective

July 27, 2020.

(**) Ms. Bachmann’s employment as our Executive Vice President, Chief Merchandising and Operating

Officer ended on September 4, 2020.

Annual Cash Incentive Awards

Each of our named executive officers participates in our annual cash incentive award program.
Historically, the amount of the annual cash incentive award earned by each named executive officer has
been based entirely on our annual corporate performance. As a result of the lack of business visibility
resulting from the COVID-19 pandemic and our related inability to establish realistic performance goals until
the second half of the year, the Committee, with input from the other outside directors, restructured our
annual cash incentive award program by bifurcating the award for fiscal 2020 into (1) a discretionary award
based on effective management and leadership through the crisis, including goals related to health and
safety, business continuity, cash and liquidity management, and internal and external communication, during
the first half of fiscal 2020 and (2) an objective corporate performance-based award similar to the annual
cash incentive awards we have granted to our executives in recent fiscal years based on our adjusted operating
profit and comparable sales in fiscal 2020. In March 2020, the Committee and the other outside directors
weighted each executive’s total annual cash incentive award 20% for the discretionary award and 80% for the
corporate performance-based award. In August 2020, the Committee and the other outside directors
revised the weighting of each executive’s total annual cash incentive award to 40% for the discretionary
award and 60% for the corporate performance-based award due to our strong performance during the first
half of fiscal 2020.

With respect to both awards under our annual cash incentive award program for fiscal 2020, the
Committee (1) selected performance measures and criteria, (2) established threshold, target and maximum
performance goals for each performance measure and criterion and (3) established for each named executive
officer a percentage of base salary that is earned at the threshold, target and maximum performance levels
(with linear interpolation between the specified payout percentages). No annual cash incentive award is earned
if we do not meet the applicable threshold performance goal. See the “Bonus and Equity Plans” discussion
following the Summary Compensation Table for more information regarding our annual cash incentive awards.

Fiscal 2020 Discretionary Annual Cash Incentive Award

In March 2020, the Committee and the other outside directors selected health and safety, business
continuity, cash and liquidity management, and internal and external communication as the performance
criteria for the discretionary annual incentive award. In July 2020, the Compensation Committee evaluated
the extent to which management satisfied each performance criteria using a scale of fail, underperform, meets
and exceeds, which would result in the executive earning an award below threshold, at threshold, at target
and at maximum, respectively. In August 2020, the Compensation Committee determined, based on various
actions taken and results achieved by management during the first half of fiscal 2020, that management’s
performance achieved an exceeds rating for the discretionary annual incentive award and, as a result, each of
our named executive officers earned a maximum payout under the discretionary annual incentive award
for fiscal 2020. The Compensation Committee and the other outside directors also authorized the payment
of the discretionary annual incentive award to our named executive officers promptly after their approval of
the award in August 2020.

The following table sets forth for fiscal 2020 the payout percentage under the discretionary annual

incentive award established for each named executive officer for each performance level (the lower
payout percentages applicable to the award for Mr. Pestello are attributable to his partial year of service):

Payout Percentage (% of salary)

Fiscal 2020 Performance Levels

Mr. Thorn Mr. Ramsden Mr. Schlonsky Mr. Robins Mr. Pestello Ms. Bachmann

Below Threshold . . . . . . . . . . . . . . .

Threshold . . . . . . . . . . . . . . . . . . . .

Target

. . . . . . . . . . . . . . . . . . . . . .

25%

50%

Maximum . . . . . . . . . . . . . . . . . . .

100%

12%

24%

48%

12%

24%

48%

12%

24%

48%

0.4%

0.8%

1.6%

12%

24%

48%

The following table sets forth the payout percentage achieved and the discretionary annual incentive

award earned by each named executive officer for fiscal 2020 (the awards earned by Mr. Pestello and
Ms. Bachmann were prorated based on their period of service):

Name

Payout Percentage (% of salary) Annual Cash Incentive Award ($)

Mr. Thorn . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Mr. Ramsden . . . . . . . . . . . . . . . . . . . . . . . . . . .

Mr. Schlonsky . . . . . . . . . . . . . . . . . . . . . . . . . . .

Mr. Robins . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Mr. Pestello . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Ms. Bachmann . . . . . . . . . . . . . . . . . . . . . . . . . .

100%

48%

1.6%

28.5%

$1,100,000

$ 336,000

$ 246,528

$ 240,000

10,127

$ 224,101

Fiscal 2020 Objective Corporate Performance-Based Annual Cash Incentive Award

In March 2020, the Committee deferred establishing criteria for the objective corporate performance-

based incentive award until the second half of the fiscal year when there would be greater visibility to a
financial forecast after the COVID-19 pandemic. In August 2020, the Committee selected adjusted operating
profit (weighted 80%) and comparable sales (weighted 20%) as the performance measures for the objective
annual incentive award for fiscal 2020. The Committee selected adjusted operating profit as the primary
performance measure because they believe it represents a key indicator of the strength of our operating
results and financial condition and incentivizes the participants in our annual cash incentive award program
to achieve strong earnings growth. The Committee selected comparable sales as the other performance
measure because continued comparable sales growth was a key component of the Company’s growth strategy
under Operation North Star.

The Compensation Committee established the performance goals for the adjusted operating profit and
comparable sales performance measures in August 2020 based on management’s projected results for fiscal
2020 and the second half of fiscal 2020 and the potential challenges to our business in the second half of fiscal
2020 relating to sales pulled forward into the first half of fiscal 2020 as a result of stimulus payments,
potential inventory constraints and holiday season shopping disruptions, as well as the continued additional
unknown impacts of the COVID-19 pandemic. The Compensation Committee set the threshold, target
and maximum adjusted operating profit performance goals for fiscal 2020 at a level that would require us to
increase our adjusted operating profit in fiscal 2020 by 3.5%, 8.1% and 72%, respectively, compared to
fiscal 2019. The threshold, target and maximum comparable sales performance goals established by the
Compensation Committee for fiscal 2020 would require us to increase our comparable sales by 9.9%, 11.6%
and 13.4%, respectively, compared to fiscal 2019.

The following table sets forth for fiscal 2020 the adjusted operating income performance goal established

for each performance level and the payout percentage established for each named executive officer for each
performance level (the lower payout percentages applicable to the award for Mr. Pestello are attributable to his
partial year of service):

Payout Percentage (% of salary)

Fiscal 2020 Performance
Levels

Performance
Goal ($)

Mr. Thorn Mr. Ramsden Mr. Schlonsky Mr. Robins Mr. Pestello Ms. Bachmann

Below Threshold . . . 0-$215,000,000
$215,000,000
Threshold . . . . . . . .
$225,000,000
Target . . . . . . . . . . .

0
30%
60%

Maximum . . . . . . . .

$357,000,000

120%

0
14.4%
28.8%

57.6%

0
14.4%
28.8%

57.6%

0
14.4%
28.8%

57.6%

0
12.1%
24.2%

48.4%

0
14.4%
28.8%

57.6%

The following table sets forth for fiscal 2020 the comparable sales performance goal established for each
performance level and the payout percentage established for each named executive officer for each performance
level (the lower payout percentages applicable to the award for Mr. Pestello are attributable to his partial
year of service):

Performance

Payout Percentage (% of salary)

Fiscal 2020 Performance Levels

Goal (%) Mr. Thorn Mr. Ramsden Mr. Schlonsky Mr. Robins Mr. Pestello Ms. Bachmann

Below Threshold . . . . . . .

0-9.9%

Threshold . . . . . . . . . . .

Target . . . . . . . . . . . . . .

Maximum . . . . . . . . . . .

9.9%

11.6%

13.4%

7.5%

15%

30%

3.6%

7.2%

14.4%

3.6%

7.2%

3.6%

7.2%

14.4%

12%

3.6%

7.2%

14.4%

To calculate the amount of the objective performance-based annual incentive award for fiscal 2020
earned under the 2019 Bonus Plan, if any, we first calculate the applicable financial measure for purposes of
our financial statements. We then adjust the measure to eliminate the effect of selective events, transactions
or accrual items. The Committee approves such adjustments at the same time it establishes the corporate
performance goals and annual incentive award payout percentages applicable to the award. These
adjustments may increase or decrease the corporate performance amount achieved. Consistent with
prior years, the Committee exercised negative discretion to reduce the corporate performance amount
achieved with respect to the objective performance-based incentive awards to exclude certain accrual items,
such as the gain on the sale-leaseback of the Company’s four owned distribution centers in June 2020, which
would have otherwise increased such amount. The Committee decided to exclude these accrual items
principally because they were either anticipated as part of the corporate operating plan for fiscal 2020 upon
which the financial measure and corporate performance goals were established or because of their potential
outsized effect on operating income, and not because of any corporate or individual performance factors.
Notwithstanding the exercise of such negative discretion, the Company achieved maximum payout
against the objective performance-based incentive award for fiscal 2020 as a result of the Company’s
achievement of adjusted operating profit and comparable sales of $410.8 million and 16.1%, respectively,
for fiscal 2020.

The following table sets forth the payout percentage achieved and the objective corporate performance-
based incentive award earned by each named executive officer for fiscal 2020 (the awards earned by Mr. Pestello
and Ms. Bachmann were prorated based on their period of service):

Name

Mr. Thorn . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Mr. Ramsden . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Mr. Schlonsky . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mr. Robins . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mr. Pestello . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ms. Bachmann . . . . . . . . . . . . . . . . . . . . . . . . . . .

Long-Term Equity Incentive Compensation

Payout Percentage (% of salary)

Annual Cash Incentive Award
($)

150%

72%

72%
72%
60%
43%

$1,650,000

$ 504,000

$ 369,792
$ 360,000
$ 386,532
$ 336,152

The Committee awarded PRSUs and RSUs to each of our named executive officers in April 2020.
Each named executive officer received 50% of their equity awards in the form of PRSUs and 50% in the
form of RSUs, instead of 60% in the form of PSUs and 40% in the form of RSUs that we awarded to our
named executive officers in recent fiscal years prior to fiscal 2020. All of these awards were granted utilizing
a 20% premium to the grant date share price so that each award was granted at a value of approximately
80% of the typical annual long-term equity incentive compensation awards to the named executive officers.
The Committee determined the value of the equity awards granted to our named executive officers, and the
allocation of the equity awards between PRSUs and RSUs, based on:

• the uncertainty of the impacts of the COVID-19 pandemic on our performance and the short-term

and long-term market price of our Common Shares;

• the lack of business visibility resulting from the COVID-19 pandemic and our related inability to

establish realistic performance goals until the second half of the year for the performance measures
that have applied to the PSUs granted in previous fiscal years;

• management’s estimate of the number of Common Shares underlying the equity awards to be

granted during fiscal 2020;

• comparative compensation data;

• individual performance;

• the executive’s level of responsibility;

• the potential impact that the executive could have on our operations and financial condition;

• the market price of our Common Shares; and

• the recommendations for the value of the equity awards granted to the other named executive

officers.

The Committee did not utilize a particular formula in making these determinations, although individual
performance and the executive’s role and responsibility were the most significant factors in determining the
value of the equity awards granted to our named executive officers in fiscal 2020. See “Performance
Evaluation Process” above for more information regarding how we evaluate performance.

PRSUs and RSUs are settled in our Common Shares. Any PRSUs or RSUs that do not vest will be
forfeited. The PRSUs and RSUs do not have voting rights. PRSUs and RSUs include a dividend-equivalent
right, which represents the right to receive the equivalent of any cash dividends payable with respect to our
Common Shares underlying the awards. Any cash dividends will accrue without interest and will vest and be
paid only at the time the corresponding PRSUs or RSUs vest. Any accrued cash dividends relating to
PRSUs or RSUs that do not vest will be forfeited.

Fiscal 2020 PRSU Awards

In connection with its equity award process for fiscal 2020, the Committee decided to continue to grant

equity awards to our named executive officers early in the year to motivate and incentivize executive
performance throughout the year. The Committee decided to award PRSUs to our named executive officers
in fiscal 2020, instead of the PSUs it awarded to our named executive officers in fiscal 2019 and fiscal 2018,
due to the lack of business visibility resulting from the COVID-19 pandemic, and our related inability to
establish realistic performance goals until the second half of the year. The Committee determined the
number of PRSUs awarded to our named executive officers in fiscal 2020 by applying a 20 percent premium
to the closing price of our Common Shares on the grant date in an effort to impose appropriate limits on
the potential dilution of our Common Shares and to acknowledge the decline in the price of our Common
Shares following the onset of the COVID-19 pandemic

The PRSUs awarded to our named executive officers vest 33-1/3% upon the closing price of our
Common Shares equaling or exceeding the following thresholds for 20 consecutive trading days on or
before the third anniversary of the grant date: (1) $17.00 (an increase of approximately 7% above the price
of our Common Shares on the grant date); (2) $21.00 (an increase of approximately 33% above the price of
our Common Shares on the grant date); and (3) $25.00 (an increase of approximately 58% above the price
of our Common Shares on the grant date). PRSUs do not have the ability to be earned above target as is the
case with our historical PSUs. As a result of our Common Shares trading above $25.00 for 20 consecutive
trading days during fiscal 2020, the PRSUs awarded to our named executive officers fully vested on the first
anniversary of the grant date although the underlying Common Shares may not be sold until the third
anniversary of the grant date.

Fiscal 2020 RSU Awards

The Committee determined the number of RSUs awarded to our named executive officers in fiscal
2020 (other than the RSUs awarded to Mr. Pestello, which were granted to him in August 2020 in connection

with his hiring) by applying a 20 percent premium to the closing price of our Common Shares on the grant
date in an effort to impose appropriate limits on the potential dilution of our Common Shares and to
acknowledge the decline in the market price of our Common Shares following the onset of the COVID-19
pandemic.

The RSUs awarded to our named executive officers vest ratably over three years from the grant date of
the award and, are subject to (1) the participant remaining employed by us through each annual vesting date
and (2) an operating profit performance component that requires us to earn at least one dollar in operating
profit for the fiscal year in which the grant date occurs or in either of the two fiscal years immediately
thereafter. As a result of our performance in fiscal 2020, the performance requirement for the fiscal 2020
RSU awards was met. Accordingly, one-third of the RSU awards for fiscal 2020 vested on the second trading
day after we filed our Current Report on Form 8-K with the SEC reporting the satisfaction of the
performance requirement.

The following table sets forth the number and grant value of the PRSUs awarded to the named

executive officers in fiscal 2020 (Mr. Pestello did not receive a PRSU award in fiscal 2020 and Ms. Bachmann’s
PRSU award terminated with her employment in fiscal 2020), the number and grant value of the RSUs
awarded to the named executive officers in fiscal 2020 (Ms. Bachmann’s RSU award was prorated due to her
termination of employment) and the total grant value of the PRSUs and the RSUs awarded to our named
executive officers in fiscal 2020.

Name

Number of PRSUs

Mr. Thorn . . . . . . . . . .

115,911

Mr. Ramsden . . . . . . . .

Mr. Schlonsky . . . . . . .

Mr. Robins . . . . . . . . . .

Mr. Pestello . . . . . . . . .

41,491

30,442

29,636

—

Grant Value of
PRSUs

$1,833,712

$ 656,388

$ 481,592

$ 468,842

—

Ms. Bachmann . . . . . . .

46,634

$ 737,750

Number of RSUs

Grant Value of
RSUs

Total Grant Value of
PRSUs and RSUs

115,911

41,491

30,442

29,636

22,577

46,634

$1,833,712

$ 656,388

$ 481,592

$ 468,842

$1,129,979

$ 737,750

$3,667,424

$1,312,775

$ 963,184

$ 937,684

$1,129,979

$1,475,500

PSU Award Process for Fiscal 2019 and Fiscal 2018

In Fiscal 2019 and Fiscal 2018, the Committee awarded a target number of PSUs to our named
executive officers subject to (1) the attainment of performance goals applicable to specified performance
measures during a three-year performance cycle consisting of three annual service periods and (2) the named
executive officer’s continued employment through the end of the performance cycle. To calculate the
attainment of the performance goals, we first calculate the applicable performance measures derived from
our financial statements and then adjust the performance measures to eliminate the effect of selected events,
transactions or accrual items described in the 2017 LTIP and approved by the Committee when it establishes
the performance goals. These adjustments may increase or decrease the amount achieved for the performance
measure.

The Committee establishes the performance measures for each performance cycle at the beginning of

each performance cycle (EPS and ROIC in the case of both the Fiscal 2019 PSU awards and the Fiscal 2018
PSU awards) and has historically established the performance goals for each service period at the beginning
of the service period. The Committee did not establish the performance goals applicable to the second service
period of the fiscal 2019 PSU award performance cycle and the last service period of the 2018 PSU award
performance cycle until August 2020 due to the lack of business visibility resulting from the COVID-19
pandemic and our related inability to establish realistic performance goals until the second half of the year.
The following table sets forth the performance goals established by the Committee for each performance
measure for fiscal 2020 and the actual amount of each performance measure in fiscal 2020:

Performance Measure

Weighting

Target

Actual

EPS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

50% $4.06

$7.64

ROIC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

50%

15.3% 23.6%

Fiscal 2019 PSU Awards

For the fiscal 2019 PSU awards, a percentage of the target number of PSUs (i.e., the vesting factor)
vests based on our average attainment of the performance goals applicable to the performance measures
during the three-year performance cycle (with linear interpolation between the performance levels) as
described in the following chart:

Performance Level

3-Year Average Performance
Attainment

Vesting Factor

Threshold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Target . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Maximum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

80%

100%

120%

50%

100%

150%

The following table sets forth the target number and grant value of the PSUs awarded to the named

executive officers in fiscal 2019 (Mr. Pestello was not employed by the Company during fiscal 2019 and
Ms. Bachmann’s 2019 PSU award terminated with her employment in fiscal 2020) and the performance
attained for each performance measure during each completed service period in the fiscal 2019 PSU award
performance cycle:

Name

Target Number of
PSUs

Grant Value of
PSUs

Mr. Thorn . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Mr. Ramsden . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Mr. Schlonsky . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Mr. Robins . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

72,528

20,770

19,049

17,573

$2,640,019

$ 472,518

$ 693,384

$ 639,657

Fiscal 2019 PSU Award Performance Cycle Attainment
(2019 – 2021)

EPS

ROIC

Actual Results

Target Performance Goal

Performance %

Actual Results

Target Performance Goal

Performance %

Fiscal
2019

$3.69

$3.72

99.2%

13.9%

14.7%

94.8%

Fiscal
2020

$7.64

$4.06

188.2%

23.6%

15.3%

154.3%

Fiscal
2021

TBD

Fiscal 2018 PSU Awards

For the fiscal 2018 PSU awards, a percentage of the target number of PSUs (i.e., the vesting factor)
vests based on our average attainment of the performance goals applicable to the performance measures
during the three-year performance cycle (with linear interpolation between the performance levels) as
described in the following chart:

Performance Level

3-Year Average Performance
Attainment

Vesting Factor

Threshold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Target . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Maximum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

90%

100%
110%

50%

100%
150%

The following table sets forth the target number and grant value of the PSUs awarded to the named
executive officers in fiscal 2018 (Mr. Thorn did not receive a PSU award in fiscal 2018, Messrs. Ramsden
and Pestello were not employed by the Company during fiscal 2018 and Ms. Bachmann’s 2018 PSU award
terminated with her employment in fiscal 2020), the number and value (calculated based on the closing price

of our Common Shares on the last trading day of fiscal 2020) of the PSUs actually earned by the named
executive officer under such awards, the vesting factor applicable to such awards and the performance attained
for each performance measure during each service period in the fiscal 2018 PSU award performance cycle:

Name

Target Number of
PSUs

Grant Value of
PSUs

Number of PSUs
Earned

Value of PSUs
Earned

Vesting Factor

Mr. Schlonsky . . . . . . . . . . . . . . . .

Mr. Robins . . . . . . . . . . . . . . . . . . .

14,214

11,656

$673,175

$552,028

20,738

17,006

$1,237,644

$1,014,918

145.9%

EPS

Fiscal 2018 PSU Award Performance Cycle Attainment
(2018 – 2020)

Actual Results

Target Performance Goal

Fiscal
2018

$3.91

$4.90

Fiscal
2019

$3.69

$3.72

Fiscal
2020

$7.64

$4.06

Performance %

79.8%

99.2%

188.2%

EPS 3-year average performance: 122.4% (150% vesting factor)

ROIC

Actual Results

Target Performance Goal

Performance %

17.5%

23.0%

76.0%

13.9%

14.7%

94.8%

23.6%

15.3%

154.3%

ROIC 3-year average performance: 108.4% (141.8% vesting factor)

Personal Benefits and Perquisites

We provide our named executive officers with certain benefits that are available to nearly all salaried

employees, including paid group term life insurance equal to one and a half times base salary, matching
contributions to our Savings Plan, and medical and dental insurance. We generally provide the following
limited personal benefits and perquisites to employees at or above the vice president level: (1) coverage under
the Big Lots Executive Benefit Plan (“Executive Benefit Plan”); (2) enhanced long-term disability insurance
coverage; and (3) payment of an automobile allowance. We believe these personal benefits and perquisites,
although immaterial to us in amount, are an important element of total compensation because of the value
our executives place on these benefits.

Our Executive Benefit Plan reimburses executives for health-related costs incurred but not covered
under our Big Lots Associate Benefit Plan, up to an annual maximum reimbursement of $40,000 per family.
Amounts received by named executive officers under the Executive Benefit Plan are treated as taxable
income, and we reimburse each executive the approximate amount of his or her income tax liability relating
to the benefits received under the Executive Benefit Plan.

We offer short-term disability coverage to all full-time employees and long-term disability coverage to
all salaried employees. The benefits provided under the long-term disability plan are greater for our named
executive officers than for employees below the vice president level. Under the enhanced long-term disability
coverage, a named executive officer may receive 67% of his or her monthly salary, up to $25,000 per
month, until the executive is no longer disabled or turns 65, whichever occurs earlier. We pay the premiums
for this long-term disability coverage and also reimburse our named executive officers for any income taxes
resulting from our payment of such premiums.

In June 2020, in light of concerns regarding commercial travel through the COVID-19 pandemic and
the fact that Mr. Thorn maintained a residence in Arizona, where members of his immediate family continued
to reside, the Board resolved to strongly encourage Mr. Thorn to use the Company’s business relationship
with NetJets for personal and business travel through the remainder of fiscal 2020 and agreed to cover up to
three round-trip domestic trips on NetJets during such period. The total incremental cost of Mr. Thorn’s
personal use of NetJets in fiscal 2020 was $105,214. In March 2020, in order to attend to pressing business

matters and avoid the risk of COVID-19 travel restrictions, Mr. Ramsden utilized the Company’s relationship
with NetJets to transport himself and his family home from a vacation outside the United States several
days prior to his scheduled commercial flight. With the approval of the Committee, the Company reimbursed
Mr. Ramsden for the expense he incurred in connection with the NetJets flight, net of the cost of the
unused return commercial flights, in the amount of $26,584.

Post-Termination and Change in Control Arrangements

The senior executive severance agreements described below in “Agreements with Named Executive
Officers” provide our named executive officers with potential severance and change in control payments and
benefits. Our equity compensation plans and related award agreements also provide for the accelerated
vesting of outstanding equity awards, including PSUs and RSUs, in connection with certain termination
events. The change in control provisions of the severance agreements provide the named executive officer
certain cash payments and other benefits upon a change in control only if the executive is terminated in
connection with the change in control (including a constructive termination). The Committee believes that
this “double trigger” structure incentivizes our executive officers to remain objective in connection with,
and not be distracted by the personal uncertainties and risks created by, an actual or proposed change in
control.

While the Committee considers the potential payments upon termination or change in control annually

when it establishes compensation for the applicable year, this information is not a primary consideration in
setting salary, bonus payout percentages or equity compensation amounts.

See “Potential Payments Upon Termination or Change in Control” below for a discussion of the
compensation that may be paid to our named executive officers in connection with a change in control or
the termination of employment.

AGREEMENTS WITH NAMED EXECUTIVE OFFICERS

Senior Executive Severance Agreements

We entered into a separation agreement with Ms. Bachmann in connection with the termination of her

employment. The separation agreement provides Ms. Bachmann with the following severance benefits:

• a cash payment equal to $1,573,550 less applicable withholdings payable in regular installments until

the end of the post-termination restriction period;

• a cash payment equal to a prorated portion of the annual incentive award that she would have

earned for fiscal 2020 had her employment not terminated;

• a cash payment of $25,000 for outplacement assistance;

• continued coverage under our health plans until the last day of the calendar month in which the post-
termination restriction period ends, plus the amount necessary to reimburse Ms. Bachmann for the
taxes she would be liable for as a result of such continued coverage; and

• prorated vesting of all unvested, outstanding RSU awards granted to Ms. Bachmann.

The payment of these severance benefits is subject to Ms. Bachmann’s continuing compliance with the

restrictive covenants set forth in the Severance Plan and her release of claims against the Company.

We have entered into a senior executive severance agreement with each of Messrs. Thorn, Ramsden,

Schlonsky, Robins and Pestello and several other key officers who are not parties to an employment
agreement. The senior executive severance agreements expire on the first anniversary of the date of execution
and automatically renew for an additional year unless we provide the executive at least 30 days’ notice of non-
renewal. The senior executive severance agreements provide for the following severance benefits if, within
24 months after a change in control, the executive is terminated by us (other than for cause) or as a result
of a constructive termination: (1) a lump-sum payment equal to 200% of the executive’s then current annual
salary and target annual incentive award; (2) a lump-sum payment equal to executive’s target bonus
prorated for the number of days the executive worked during the applicable performance period prior to

the executive’s termination; and (3) for a period of two years, the executive is entitled to participate in any
group life, hospitalization or disability insurance plan, health program or other executive benefit plan generally
available to similarly titled executive officers. The executives are also entitled to reimbursement of legal fees
and expenses they incur in seeking to enforce their rights under the agreement.

The senior executive severance agreements do not provide a gross-up payment to any participants to

offset any Excise Tax.

Severance Plan

The Board adopted the Severance Plan, which covers each of our named executive officers and several

of our other key executives, to provide more uniform severance payments and benefits to our executives,
avoid the use of individual severance agreements and ensure that restrictive covenants apply to our key
executives. The payments and benefits to which our named executive officers would be entitled to under the
Severance Plan (collectively, the “Severance Benefits”) if they are terminated without Cause (as defined in
the Severance Plan) or as a result of a Constructive Termination (as defined in the Severance Plan) are
described below in the “Potential Payments Upon Termination or Change in Control — Involuntary
Termination Without Cause.”

The Severance Plan also imposes confidentiality, non-competition, non-solicitation, non-disparagement

and post-termination cooperation obligations on participants. The non-competition and non-solicitation
obligations apply during the period of employment and continue until the end of the restriction period set
forth in the Severance Plan.

The Severance Plan does not provide a gross-up payment to any participants to offset any Excise Tax.

Retirement Plans

We maintain a tax-qualified defined contribution plan (“Savings Plan”). We believe that the Savings
Plan is generally commensurate with the retirement plans provided by companies in our peer groups and
that providing this plan enhances our ability to attract and retain qualified executives. In December 2020, the
Board approved the termination of our non-qualified supplemental defined contribution plan (“Supplemental
Savings Plan”). The balances under the Supplemental Savings Plan will be distributed to participants in
December 2021 and January 2022. See the “Nonqualified Deferred Compensation — Supplemental Savings
Plan” section of this Proxy Statement for a discussion of our retirement plans.

OTHER EXECUTIVE COMPENSATION POLICIES AND PRACTICES

Minimum Share Ownership Requirements and Hedging and Pledging Prohibition

The Board has adopted minimum share ownership requirements for all outside directors and Leadership

Team members. These requirements are designed to align the long-term interests of our outside directors
and executives with those of our shareholders. Under the requirements, the outside directors and Leadership
Team members must own Common Shares having an aggregate value equal to at least the following
multiple of his or her Board retainer or salary (as is in effect at the time compliance with the requirements is
evaluated), as applicable:

Title

Multiple of
Retainer or Salary

Outside Director . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Chief Executive Officer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Executive Vice President
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Senior Vice President . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5x
5x
2.5x
2x

Shares counted toward these requirements include Common Shares held directly or through a broker,

Common Shares held under the Savings Plan or Supplemental Savings Plan, unvested restricted stock,
unvested RSUs, unvested PSUs (at the threshold amount), unvested or vested PRSUs, deferred stock units
and vested but unexercised in-the-money stock options. Each member of senior management that is required

to meet the minimum share ownership requirements is required to hold 50% of any net (after-tax) shares
received until his or her minimum share ownership requirements are met or whenever his or her minimum
share ownership requirements are not met. Outside directors and executives must meet the requirements on
the first annual testing date for outside directors or executives following the fifth anniversary of their
election, hire or promotion, as applicable. Each outside director and executive who has been on the Board
or a Leadership Team member for at least five years satisfied our minimum share ownership requirements.

In addition to the minimum share ownership requirements, we do not allow our outside directors or

Leadership Team members to enter into any hedging, pledging or monetization transactions involving our
Common Shares.

Anti-Hedging Policy

Our insider trading policies prohibit our Leadership Team and members of the Board from engaging

in hedging and monetization transactions relating to Company securities, including through the use of
financial instruments such as prepaid variable forwards, equity swaps, collars and exchange funds. Our insider
trading policies also prohibit our Leadership Team and members of the Board from holding Company
securities in a margin account or otherwise pledging Company securities as collateral for a loan.

The Committee has adopted an incentive compensation recoupment policy, commonly referred to as a

clawback policy, which applies to all cash and equity incentive-based compensation paid or awarded to an
associate (including our named executive officers) on or after March 2017. Under the policy, if we determine
that we must prepare an accounting restatement due to material noncompliance with any financial reporting
requirement under the U.S. federal securities laws, we will seek to recover, at the discretion of the
compensation committee after it has reviewed the facts and circumstances that led to the requirement for
the restatement, the amount of erroneously awarded cash and equity incentive-based compensation received
by the associate during the three-year period immediately preceding the date on which we are required to
prepare the restatement.

Equity Grant Timing

Pursuant to the terms of the 2017 LTIP and the 2020 LTIP, the grant date of equity awards must be
the later of the date the terms of the award are established by corporate action or the date specified in the
award agreement. In fiscal 2020, the Committee specified that the grant date of the equity awards was April 6,
2020. This date was somewhat later than the grant dates in prior years (typically in March), reflecting
additional deliberation by the Compensation Committee in the highly unusual circumstances of the emerging
COVID-19 pandemic. For equity awards made throughout the fiscal year, which generally are made as a
result of a hiring or promotion, the grant date is the 15th day of the month following the month of the hire
or promotion date. We have no policy of timing the grant date of equity awards with the release of material
non-public information, and we have not timed the release of material non-public information for the
purpose of affecting the value of any equity awards.

Tax and Accounting Considerations

The Committee reviews and considers the impact that tax laws and accounting regulations may have

on the executive compensation awards, including the deductibility of executive compensation under
Section 162(m) of the Internal Revenue Code of 1986, as amended (the “IRC”). In doing so, the Committee
relies on guidance from members of our finance and legal departments, as well as outside accountants and
attorneys.

Section 162(m) generally does not allow a tax deduction to publicly-held companies for compensation

over $1 million paid in any fiscal year to certain current and former executive officers of the Company.
However, prior to December 2017, when the Tax Cuts and Jobs Act (“Tax Act”) was enacted into law,
Section 162(m) exempted qualified performance-based compensation from this $1 million limit if certain
requirements were met. Historically, the Committee had structured the annual cash incentives and
performance-based compensation awarded to covered employees in a manner intended to meet the exception
from Section 162(m)’s deduction limits.

The Tax Act eliminated the qualified performance-based exception to the $1 million deduction limit

and subjects all compensation paid to the chief executive officer, the chief financial officer and the next
three highest paid officers whose compensation is required to be reported in the Summary Compensation
Table of the proxy statement for 2018 and beyond (each, a “Covered Employee”). Once an individual becomes
a Covered Employee, that individual will remain a Covered Employee for all subsequent years. The Tax
Act includes a grandfathering provision for compensation paid pursuant to a written binding contract in
effect on or before November 2, 2017 that has not been modified in any material way since that date. Based
on current guidance, we believe our equity awards granted on and prior to November 2, 2017 comply with the
grandfathering provision and will remain deductible. However, equity awards granted after November 2,
2017 will likely be subject to the limitations on deductibility under Section 162(m).

Prior to 2019, we granted short-term annual cash incentive awards to our named executive officers
under the 2006 Bonus Plan. Beginning with the 2019 fiscal year, we granted short-term annual cash incentive
awards to our named executive officers under the 2019 Bonus Plan. Historically, we intended annual cash
incentive awards issued to covered employees under the 2006 Bonus Plan to qualify for the performance-
based compensation deduction allowed by Section 162(m). Although we still intend to grant performance-
based annual compensation opportunities, amounts paid pursuant to the 2019 Bonus Plan are subject to
the limitations on deductibility under Section 162(m).

COMPENSATION COMMITTEE REPORT

The Compensation Committee reviewed and discussed the above CD&A with management and, based

on such review and discussion, the Compensation Committee recommended to the Board that the CD&A
be included in this Proxy Statement and our Annual Report on Form 10-K for fiscal 2020 (“Form 10-K”).

Members of the Compensation Committee

Nancy A. Reardon (Chair)

Cynthia T. Jamison

Thomas A. Kingsbury

Marla C. Gottschalk

Christopher J. McCormick

Summary Compensation Table for Fiscal 2020

Name and
Principal Position(1)
(a)

Bruce K. Thorn,

President and Chief Executive
Officer(8)

Jonathan E. Ramsden,

Executive Vice President, Chief
Financial and Administrative
Officer(9)

Michael A. Schlonsky,

Executive Vice President, Chief
Human Resources Officer

Ronald A. Robins, Jr.,

Executive Vice President, Chief
Legal and Governance Officer,
General Counsel and Corporate
Secretary

Year
(b)

Salary
($)(2)
(c)

Bonus
($)(3)
(d)

Stock
Awards
($)(4)
(e)

Non-Equity
Incentive Plan
Compensation
($)(5)
(g)

2020 1,072,500

— 3,667,424

2,750,000

2019 1,100,000

— 4,399,996

976,113

2018

2020

2019

2020

2019

2018

2020

2019

2018

359,615 500,000 2,999,992

682,500

336,539

— 1,312,775

— 937,506

500,760

513,600

511,008

487,500

481,358

471,412

— 963,184

— 1,155,591

— 1,620,517

— 937,684

— 1,066,047

— 1,379,975

—

840,000

177,519

616,320

218,763

—

600,000

212,970

—

Jack Pestello,

2020

320,000

— 1,129,979

396,659

Executive Vice President, Chief
Merchandising Officer(10)

Lisa M. Bachmann,

Former Executive Vice President,
Chief Merchandising and Operating
Officer(11)

2020

2019

2018

464,500

786,775

782,807

— 1,475,500

— 1,770,241

— 3,269,227

560,253

335,119

—

Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
($)
(h)

—

All Other
Compensation
($)(6)(7)
(i)

Total
($)
(j)

235,716

7,725,640

71,721

6,547,830

47,725

3,907,332

87,007

2,922,282

28,997

1,480,561

133,396

2,213,660

139,672

2,027,626

135,267

2,266,792

115,152

2,140,336

96,540

1,856,915

84,277

1,935,664

43,485

1,890,123

1,769,042

4,269,295

196,835

3,088,970

235,106

4,287,140

(1) We are a party to a separation agreement with Ms. Bachmann and a senior executive severance

agreement with Mr. Thorn, Mr. Ramsden, Mr. Schlonsky, Mr. Robins and Mr. Pestello, the material
terms of which are described in the “Agreements with Named Executive Officers — Senior Executive
Severance Agreements” section of the CD&A. We are a party to an executive severance plan with each
of our named executive officers, the material terms of which are described in the “Agreements with
Named Executive Officers — Severance Plan” section of the CD&A.

(2) The amounts in this column reflect the salary earned by each named executive officer for fiscal 2020,

fiscal 2019 and fiscal 2018.

(3) The amount in this column reflects the one-time bonus paid by the Company to Mr. Thorn upon the

commencement of his employment with the Company.

(4) The amounts in this column reflect the sum of (i) the grant date fair value of the RSUs, as determined

in accordance with ASC 718, awarded to Mr. Pestello in fiscal 2020 under the 2020 LTIP and to the other
named executive officers in fiscal 2020, fiscal 2019 and fiscal 2018 under the 2017 LTIP and (ii) the
estimated fair value of the PRSUs awarded to the named executive officers in fiscal 2020 under the 2017
LTIP and the PSUs awarded to the named executive officers in fiscal 2019 and fiscal 2018 under the
2017 LTIP. These amounts do not represent the actual amounts that will be realized by the Named
Executive Officers with respect to such awards. Assumptions used in the calculation of these amounts are
included in Note 7 to the Company’s audited consolidated financial statements for the fiscal year
ended January 30, 2021, included in the Form 10-K.

(5) The amounts in this column reflect annual incentive awards earned under the 2019 Bonus Plan for

performance during fiscal 2020 and fiscal 2019.

(6) For fiscal 2020, the amounts in this column include the following compensation for the executives, as

more fully described in the table included with this footnote:

The reimbursement of taxes related to our payment of healthcare costs, including costs covered by
the Executive Benefit Plan, long-term disability insurance premiums, and relocation expenses;

ii. Matching contributions made by Big Lots pursuant to the Savings Plan and the Supplemental

Savings Plan, both of which are described in the narrative disclosure accompanying the Nonqualified
Deferred Compensation table below;

iii. Healthcare costs paid by Big Lots pursuant to the Executive Benefit Plan, which is described in

the “Components of our Executive Compensation Program — Personal Benefits and Perquisites”
section of the CD&A;

iv. Premiums paid by Big Lots for life insurance, which is generally available to all full-time employees;

Premiums paid by Big Lots for long-term disability insurance, which is described in the
“Components of our Executive Compensation Program — Personal Benefits and Perquisites”
section of the CD&A;

vi. The cost to Big Lots associated with the executive’s receipt of a cash allowance in lieu of an

automobile;

vii. Separation payments made to Ms. Bachmann pursuant to her severance agreement and the

executive severance plan;

viii. Matching charitable contributions made by Big Lots;

ix. Dividends paid on vested RSU and PSU awards;

x. The aggregate incremental cost to Big Lots associated with non-business use of non-commercial

aircraft by Messrs. Thorn and Ramsden; and

xi. Payments made to Mr. Pestello to reimburse him for expenses he incurred in connection with his

relocation to Columbus, Ohio.

Name

Mr. Thorn Mr. Ramsden Mr. Schlonsky Mr. Robins Mr. Pestello Ms. Bachmann

Reimbursement of Taxes ($) . . . . . . . . .

7,538

3,628

8,728

5,905

13,129

16,688

Big Lots Contributions to Defined

Contribution Plans ($) . . . . . . . . . . .

11,400

—

11,400

Big Lots Paid Health Care under

Executive Benefits Plans ($) . . . . . . . .

7,584

6,826

18,529

12,049

1,343

19,109

Big Lots Paid Life Insurance

Premiums ($) . . . . . . . . . . . . . . . . .

775

599

583

Big Lots Paid Long-Term Disability

Insurance Premiums ($)

. . . . . . . . . .

1,501

372

625

Use of Automobile or Automobile

Allowance ($) . . . . . . . . . . . . . . . . .

13,200

6,600

Severance Expenses ($)

. . . . . . . . . . . .

—

Matching Charitable Contributions ($) . .

15,000

Dividend Payments ($)

. . . . . . . . . . . .

73,504

8,093

Personal Use of Company Aircraft ($) . . . 105,214

26,584

Relocation Expenses ($) . . . . . . . . . . . .

—

15,000

64,439

—

15,000

55,514

—

— 21,415

452

1,001

8,123

1,598,550

15,000

98,719

—

Total . . . . . . . . . . . . . . . . . . . . . . . . 235,716

87,007

133,396

115,152

43,485

1,769,042

(7) We purchase tickets to entertainment and sporting venues for the primary purpose of allowing

employees to use such tickets in furtherance of our business. Because we incur no incremental cost if a
named executive officer uses such tickets for purposes other than our business, such tickets are not
included in the amounts in this column.

(8) Mr. Thorn joined Big Lots as our President and CEO on September 30, 2018 and did not serve in any

other capacity with Big Lots prior to such date.

(9) Mr. Ramsden joined Big Lots as our Executive Vice President, Chief Financial and Administrative
Officer on August 5, 2019 and did not serve in any other capacity with Big Lots prior to such date.

(10) Mr. Pestello joined Big Lots as our Executive Vice President, Chief Merchandising Officer on July 27,

2020 and did not serve in any other capacity with Big Lots prior to such date.

(11) Ms. Bachmann served as our Executive Vice President, Chief Merchandising and Operating Officer

until September 4, 2020.

Bonus and Equity Plans

The amounts reported in the Summary Compensation Table above include awards granted to the
named executive officers under the 2019 Bonus Plan, the 2017 LTIP and the 2020 LTIP. Below is a description
of the material terms of each plan and the awards made under those plans to our named executive officers,
as reflected in the following Grants of Plan-Based Awards in Fiscal 2020 table.

Big Lots 2019 Bonus Plan

The 2019 Bonus Plan provides for cash compensation paid annually when we meet or exceed pre-
established minimum corporate performance amounts under one or more financial measures approved by
the Compensation Committee and other non-employee directors at the start of the fiscal year. Whether we
achieve the minimum corporate performance amounts is substantially uncertain at the time the corporate
performance amounts and financial measures are established. No right to a minimum annual incentive
award exists under the 2019 Bonus Plan, and the Compensation Committee has the discretion to cancel or
decrease an annual incentive award calculated under the 2019 Bonus Plan. Payments made with respect to a
fiscal year were made in the first quarter of the following fiscal year. The annual incentive awards that
may be earned under the 2019 Bonus Plan range from the threshold to the maximum annual incentive award
payout percentages, and include all amounts in between. The threshold annual incentive award payout
percentage is pre-established annually by the Compensation Committee and the other non-employee directors
and has historically been one-half of the target annual incentive award payout percentage. The Compensation
Committee and the other non-employee directors retain the right to adjust the payout percentages and, in
the past, have generally done so as deemed necessary to realign an executive’s annual incentive award
opportunity with our compensation philosophy. See the “Components of our Executive Compensation
Program — Annual Cash Incentive Awards” section of the CD&A for more information regarding the 2019
Bonus Plan and the awards made under that plan for fiscal 2020.

Big Lots 2017 Long-Term Incentive Plan

From May 25, 2017 through June 10, 2020, all equity awards granted to our employees and non-
employee directors were granted under the 2017 LTIP. The 2017 LTIP authorized the grant of (1) NQSOs,
(2) ISOs, (3) SARs, (4) restricted stock, (5) RSUs, (6) deferred stock units, (7) performance shares, (8) PSUs,
(9) performance units, (10) cash-based awards, and (11) other stock-based awards. All of our and our
affiliates’ employees, outside directors and consultants were eligible to receive Awards under the 2017 LTIP.

The RSUs awarded to our named executive officers in fiscal 2020 pursuant to the 2017 LTIP covered a
fixed number of RSUs. The RSUs will vest, if at all, ratably over three years from the grant date of the award
if the participant remains employed by us through each annual vesting date (except in the case of death,
disability, retirement, involuntary termination or constructive termination). These RSUs are also subject to
an operating profit performance component that requires us to earn at least one dollar in operating profit
for the fiscal year in which the grant date occurs or in either of the two fiscal years immediately thereafter.

The PRSUs awarded to our named executive officers in fiscal 2020 pursuant to the 2017 LTIP covered

a fixed number of PRSUs. The PRSUs vest 33-1/3% upon the closing price of our Common Shares equaling
or exceeding the following thresholds for 20 consecutive trading days on or before the third anniversary of
the grant date: (1) $17.00; (2) $21.00; and (3) $25.00.

The PSUs awarded to our named executive officers in fiscal 2019 and fiscal 2018 pursuant to the 2017

LTIP covered a target number of PSUs. The PSUs will vest, if at all, after the completion of a three-year
performance period, based: (1) 50% on our average EPS performance, excluding selected plan-defined items,
for each of the three service periods during the performance period; (2) 50% on our average ROIC
performance (net operating profit after-tax divided by invested capital for the fiscal year), excluding selected
plan-defined items, for each of the three service periods during the performance period; and (3) on the
named executive officer’s continued employment through the end of the performance period (except in the
case of death, disability or retirement). The actual number of PSUs that will vest will increase to 150% of the
target number if we achieve the maximum performance levels for both of the EPS and ROIC performance
goals, and decrease to zero if we fail to meet the minimum performance levels for both of the performance
goals. If we achieve the minimum performance levels for both of the EPS and ROIC performance goals,
50% of the target number of PSUs will vest. The percentage of the target number of PSUs that will vest for
performance between the threshold and maximum performance levels will increase proportionately from
50% to 150% based on our actual performance.

Upon a change in control (as defined in the 2017 LTIP), all awards outstanding under the 2017 LTIP
automatically become fully vested. For a discussion of the change in control provisions in Ms. Bachmann’s
severance agreement, our senior executive severance agreements and the 2017 LTIP, see the “Potential
Payments Upon Termination or Change in Control — Rights Under Post-Termination and Change in
Control Arrangements” section below. See the “Components of our Executive Compensation
Program — Long-Term Equity Incentive Compensation” section of the CD&A and the “Potential Payments
Upon Termination or Change in Control — Rights Under Post-Termination and Change in Control
Arrangements” section below for more information regarding the equity awards made under the 2017 LTIP
in fiscal 2020.

Big Lots 2020 Long-Term Incentive Plan

All equity awards granted to our employees and non-employee directors since June 10, 2020 have been

granted under the 2020 LTIP. The 2020 LTIP authorized the grant of (1) NQSOs, (2) ISOs, (3) SARs,
(4) restricted stock, (5) RSUs, (6) deferred stock units, (7) performance shares, (8) PSUs, (9) performance units,
(10) cash-based awards, and (11) other stock-based awards. All of our and our affiliates’ employees,
outside directors and consultants were eligible to receive Awards under the 2020 LTIP.

The RSUs awarded to our named executive officers in fiscal 2020 pursuant to the 2020 LTIP (which
consisted of the RSUs awarded to Mr. Pestello in connection with his hiring) covered a fixed number of
RSUs. The RSUs will vest, if at all, ratably over three years from the grant date of the award if the participant
remains employed by us through each annual vesting date (except in the case of death, disability, retirement,
involuntary termination or constructive termination).

In the event of a change in control (as defined in the 2020 LTIP) where the participant incurs a

separation of service (as defined in Section 409A of the IRC) within the 30 days before or 24 months
following the change in control, all awards outstanding under the 2020 LTIP automatically become fully
vested. For a discussion of the change in control provisions in our senior executive severance agreements and
the 2020 LTIP, see the “Potential Payments Upon Termination or Change in Control — Rights Under Post-
Termination and Change in Control Arrangements” section below. See the “Components of our Executive
Compensation Program — Long-Term Equity Incentive Compensation” section of the CD&A and the
“Potential Payments Upon Termination or Change in Control — Rights Under Post-Termination and
Change in Control Arrangements” section below for more information regarding the equity awards made
under the 2020 LTIP in fiscal 2020.

Grants of Plan-Based Awards in Fiscal 2020

The following table sets forth each award made to our named executive officers in fiscal 2020 under the

2019 Bonus Plan, the 2017 LTIP and the 2020 LTIP.

Estimated Possible
Payouts Under
Non-Equity
Incentive Plan
Awards(2)

Estimated Future
Payouts Under
Equity
Incentive Plan
Awards(3)

Name
(a)

Grant
Date(1)
(b)

Threshold
($)
(c)

Target
($)
(d)

Maximum
($)
(e)

Threshold
(#)
(f)

Target
(#)
(g)

Maximum
(#)
(h)

All Other
Stock
Awards:
Number
of Shares
of Stock
or Units
(#)(4)
(i)

All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)
(j)

Mr. Thorn . . . . . .

— 275,000 550,000 1,100,000 —

— 412,500 825,000 1,650,000 —

—

4/6/20

—

— — 115,911

— —

Mr. Ramsden . . . .

— 84,000 168,000

336,000 —

— 126,000 252,000

504,000 —

4/6/20

—

— —

Mr. Schlonsky . . . .

— 61,632 123,264

246,528 —

— 92,448 184,896

369,792 —

4/6/20

—

— —

Mr. Robins . . . . . .

— 60,000 120,000

240,000 —

— 90,000 180,000

360,000 —

4/6/20

—

— —

Mr. Pestello . . . . . .

— 2,532

5,064

10,127 —

— 99,165 198,330

396,660 —

8/15/20

—

— —

Ms. Bachmann . . . .

— 94,313 188,826

377,652 —

— 141,620 283,239

566,478 —

4/6/20

—

— —

46,634

—

41,491

—

30,442

—

29,636

—

115,911

—

41,491

—

30,442

—

29,636

—

21,578

999

—

46,634

—

Grant
Date Fair
Value of
Stock
and
Option
Awards
($/
Shr.)(5)
(l)

—

Exercise
or Base
Price of
Option
Awards
($/Sh.)
(k)

—

— 1,833,712

—

656,388

—

481,592

—

468,842

—

— 1,079,979

—

50,000

—

737,750

(1) As discussed in the “Compensation Policies & Practices — Equity Grant Timing” section of the

CD&A, in fiscal 2020, the Board set the grant date for the PRSU and RSU awards as April 6, 2020 in
order to provide the market with more time to absorb and react to our release of material non-public
information, and to avoid any suggestion that the Board, the Committee or any employee manipulated
the terms of the equity awards. For all other equity awards, the Board set the grant date as the 15th day of
the month following the award date.

(2) The amounts in columns (c), (d) and (e) of the first row represent our named executive officers’

threshold, target and maximum discretionary annual incentive award levels, respectively, for fiscal 2020
pursuant to the 2019 Bonus Plan. The amounts in columns (c), (d) and (e) of the second row represent
our named executive officers’ threshold, target and maximum objective corporate performance-based
annual incentive award levels, respectively, for fiscal 2020 pursuant to the 2019 Bonus Plan. These

awards are further described in the “Components of our Executive Compensation Program — Annual
Cash Incentive Awards” section of the CD&A.

(3) The amounts in columns (g) represent PRSUs awarded pursuant to the 2017 LTIP. The PRSUs vest

33-1/3% upon the closing price of our Common Shares equaling or exceeding the following thresholds
for 20 consecutive trading days on or before the third anniversary of the grant date: (1) $17.00; (2) $21.00;
and (3) $25.00. For more information on PRSUs, see the narrative discussion preceding this table and
the “Components of our Executive Compensation Program — Long-Term Equity Incentive
Compensation” section of the CD&A.

(4) The amounts in column (i) represent RSUs awarded pursuant to the 2017 LTIP and, in the case of the
RSUs awarded to Mr. Pestello, the 2020 LTIP, which awards are described in the narrative discussion
preceding this table and the “Components of our Executive Compensation Program — Long-Term
Equity Incentive Compensation” section of the CD&A.

(5) This column represents the full grant date fair value of the RSUs as calculated in accordance with
ASC 718 and the estimated fair value of the PRSUs as of the issuance date based on the probable
outcome of the performance conditions.

Outstanding Equity Awards at 2020 Fiscal Year-End

The following table sets forth, as of the end of fiscal 2020, all equity awards outstanding under our

equity compensation plans for each named executive officer.

Option Awards

Stock Awards

Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)
(d)

Number of
Shares or
Units of
Stock
That Have
Not
Vested
(#)(1)
(g)

Market
Value of
Shares
or Units
of Stock
That
Have Not
Vested
($)(3)
(h)

Option
Exercise
Price
($)
(e)

Option
Expiration
Date
(f)

Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
(b)

Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
(c)

Name
(a)

Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested
($)(3)
(j)

Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested
(#)(2)
(i)

Mr. Thorn . . . . . . . .

Mr. Ramsden . . . . . .

Mr. Schlonsky . . . . . .

Mr. Robins . . . . . . . .
Mr. Pestello . . . . . . .
Ms. Bachmann . . . . .

—

—
—
—

—

—
—
—

—

—
—
—

—

—
—
—

—

—
—
—

171,643 10,243,654 188,439 11,246,040

55,186

3,293,500

62,261

3,715,736

42,172

2,516,825

63,705

3,801,914

40,127
22,577
12,175

2,394,779
1,347,395
726,604

58,865
—
—

3,513,063
—
—

(1) The awards reported in column (g) reflect the unvested RSUs awarded to Mr. Pestello in fiscal 2020

under the 2020 LTIP, the unvested RSUs awarded to Mr. Ramsden in fiscal 2020 and fiscal 2019 under
the 2017 LTIP and the unvested RSUs awarded to our other named executive officers in fiscal 2020,
fiscal 2019 and fiscal 2018 under the 2017 LTIP. The first third of the fiscal 2019 RSU awards and the
second third of the fiscal 2018 RSU awards vested during fiscal 2020. For additional information
regarding the fiscal 2020 RSU awards, including the vesting terms, see the narrative discussion preceding
the Grants of Plan-Based Awards in Fiscal 2020 table and the “Components of our Executive
Compensation Program — Long-Term Equity Incentive Compensation” section of the CD&A.

(2) The awards reported in column (i) reflect the following: (1) for Mr. Thorn, Mr. Ramsden, Mr. Schlonsky,
and Mr. Robins, a PRSU award in fiscal 2020, (2) for Mr. Thorn and Mr. Ramsden, a PSU award in

fiscal 2019 (each at target amount); and (3) for Mr. Schlonsky and Mr. Robins, a PSU award in fiscal
2019 and fiscal 2018 (each at the target amount). If we achieve the maximum performance levels
applicable to the PSU awards in fiscal 2019, the total number of PSUs that would vest and be earned
for such PSU awards would be: (1) 108,792 for Mr. Thorn; (2) 31,155 for Mr. Ramsden; (3) 28,573 for
Mr. Schlonsky; and (4) 26,539 for Mr. Robins. The awards reported in column (i) were made pursuant to
the 2017 LTIP. The PRSUs awarded to our named executive officers in fiscal 2020 vest 33-1/3% upon
the closing price of our Common Shares equaling or exceeding the following thresholds for 20 consecutive
trading days on or before the third anniversary of the grant date: (1) $17.00; (2) $21.00; and (3) $25.00.
The actual number of PSUs awarded to our named executive officers in fiscal 2019 and fiscal 2018
that will vest and be earned (if any) by each named executive officer is determined after the three-year
performance period based: (1) 50% on our average EPS performance, excluding plan-defined items, for
each of the three service periods during the performance period; (2) 50% on our average ROIC
performance (net operating profit after-tax divided by invested capital for the fiscal year), excluding plan-
defined items, for each of the three service periods during the performance period; and (3) on the
named executive officer’s continued employment through the end of the performance period (except in
the case of death, disability or retirement).

(3) The market value was computed by multiplying the number of units or shares by $59.68, the closing

price of our Common Shares on January 29, 2021 (the last trading day of fiscal 2020). If we achieve the
maximum performance levels applicable to the PSU awards in fiscal 2019, the aggregate market value
for such PSU awards would be: (1) $6,492,707 for Mr. Thorn; (2) $1,859,330 for Mr. Ramsden;
(3) $1,705,237 for Mr. Schlonsky; and (4) $1,583,848 for Mr. Robins. The fiscal 2020 PRSU awards and
the fiscal 2018 PSU awards vested on April 6, 2021 and March 31, 2021, respectively. For additional
information on the fiscal 2020 PRSU awards and the fiscal 2018 PSU awards, see the narrative discussion
in the “Components of our Executive Compensation Program — Long-Term Equity Incentive
Compensation” section of the CD&A.

Option Exercises and Stock Vested in Fiscal 2020

The following table reflects all stock option exercises and the vesting of restricted stock held by each of

our named executive officers during fiscal 2020.

Option Awards

Stock Awards

Name
(a)

Number of Shares
Acquired on Exercise
(#)
(b)

Value Realized
on Exercise
($)
(c)

Number of Shares
Acquired on Vesting
(#)
(d)

Mr. Thorn . . . . . . . . . . . . . . . . . . . . .

Mr. Ramsden . . . . . . . . . . . . . . . . . . .

Mr. Schlonsky . . . . . . . . . . . . . . . . . .

Mr. Robins . . . . . . . . . . . . . . . . . . . . .

Mr. Pestello . . . . . . . . . . . . . . . . . . . .
Ms. Bachmann . . . . . . . . . . . . . . . . . .

—

—
—

—

—
—

38,604

6,744

25,278

22,116

—
38,725

Value Realized
on Vesting
($)(1)
(e)

1,443,731

319,126

417,327

365,868

—
639,330

(1) The amounts shown reflect the number of Common Shares issued to the named executive officer in
settlement of the vesting of stock awards multiplied by the closing price of our Common Shares on
trading day before the vesting date.

Nonqualified Deferred Compensation

Supplemental Savings Plan

All of our named executive officers, as well as substantially all other employees, are eligible to participate
in the Savings Plan, our “401(k) plan.” The Supplemental Savings Plan was maintained for those executives
participating in the Savings Plan who desired to contribute more than the amount allowable under the
Savings Plan. The Supplemental Savings Plan constitutes a contract to pay deferred compensation and limits

deferrals in accordance with prevailing tax law. The Supplemental Savings Plan was designed to pay the
deferred compensation in the same amount as if contributions had been made to the Savings Plan. We have
no obligation to fund the Supplemental Savings Plan, and all assets and amounts payable under the
Supplemental Savings Plan are subject to the claims of our general creditors.

In order to participate in the Savings and Supplemental Savings Plans, an eligible employee must

satisfy applicable service requirements and must make contributions to such plans (“Participant
Contributions”). Participant Contributions are made through authorized payroll deductions to one or more
of the several investment funds available under the Savings and Supplemental Savings Plans and selected
at the discretion of the participant. All Participant Contributions are matched by us (“Registrant
Contributions”) at a rate of 100% for the first 3% of salary contributed and 50% for the next 2% of salary
contributed. Additionally, the amount of the Registrant Contribution is subject to the maximum annual
compensation that may be taken into account for benefit calculation purposes under the IRC ($285,000 for
calendar year 2020). Accordingly, the maximum aggregate Registrant Contribution that could be made to
a named executive officer participating in the Savings and Supplemental Savings Plans was $11,400 for fiscal
2020.

Prior to fiscal 2017, under the Savings Plan and the Supplemental Savings Plan, 25% of the Registrant

Contributions vests annually beginning on the second anniversary of the employee’s hiring. Under the
Savings Plan, a participant who has terminated employment with us is entitled to all funds in his or her
account, except that if termination is for a reason other than retirement, disability or death, then the
participant is entitled to receive only the Participant Contributions and the vested portion of the Registrant
Contributions. Under the Supplemental Savings Plan, a participant who has terminated employment with
us for any reason is entitled to receive the Participant Contributions and only the vested portion of the
Registrant Contributions. Under both plans, all other unvested accrued benefits pertaining to Registrant
Contributions will be forfeited. Upon a change in control of Big Lots, the participant will receive a lump
sum payment of all amounts (vested and unvested) under the Supplemental Savings Plan. In fiscal 2017, the
Savings Plan and Supplemental Savings Plan were amended and all Registrant Contributions in fiscal
2017 and in the future will vest immediately and a participant in the Savings Plan and Supplemental Savings
Plan who has terminated employment will be entitled to all funds in his or her account.

In December 2020, the Board approved the termination of the Supplemental Savings Plan. The
balances under the Supplemental Savings Plan will be distributed to participants in December 2021 and
January 2022.

Nonqualified Deferred Compensation Table for Fiscal 2020

The following table reflects the contributions to, earnings in and balance of each named executive

officer’s account held under the Supplemental Savings Plan.

Name
(a)

Executive
Contributions
in Last FY
($)(1)
(b)

Registrant
Contributions
in Last FY
($)
(c)

Mr. Thorn . . . . . . . . . . . . . . . . . . . . . . .

Mr. Ramsden . . . . . . . . . . . . . . . . . . . .
Mr. Schlonsky . . . . . . . . . . . . . . . . . . . .
Mr. Robins . . . . . . . . . . . . . . . . . . . . . .
Mr. Pestello . . . . . . . . . . . . . . . . . . . . . .
Ms. Bachmann . . . . . . . . . . . . . . . . . . .

—

—
22,075
21,297
—
—

—

—
—
—
—
—

Aggregate
Earnings
in Last FY
($)(2)
(d)

—

—
233,463
57,293
—
69,490

Aggregate
Withdrawals/
Distributions
($)
(e)

Aggregate
Balance
at Last FYE
($)(3)
(f)

—

—
—
— 1,341,460
249,967
—
—
—
1,461,461
(73,110)

(1) The amounts in this column are included in the “Salary” column of the Summary Compensation Table

for fiscal 2020.

(2) The amounts in this column are not included in the Summary Compensation Table as these amounts
reflect only the earnings on the investments designated by the named executive officer in his or her

Supplemental Savings Plan account in fiscal 2019 (i.e., appreciation or decline in account value). The
amounts in this column do not include any above-market or preferential earnings, as defined by
Item 402(c)(2)(viii) of Regulation S-K and the instructions thereto.

(3) $88,237, $11,389 and $94,560 of the amounts in this column were previously reported as compensation

to Mr. Schlonsky, Mr. Robins, and Ms. Bachmann, respectively, in the Summary Compensation Table
for the prior years reported.

Potential Payments Upon Termination or Change in Control

The “Rights Under Post-Termination and Change in Control Arrangements” section below summarizes

the rights of our named executive officers under their employment agreements and other compensation
arrangements upon a change in control or in the event their employment with us is terminated.

The “Estimated Payments if Triggering Event Occurred at 2020 Fiscal Year End” section below sets
forth the payments that would have been received by each executive (or his or her beneficiaries, as applicable)
upon a change in control or in the event the executive’s employment with us terminated on January 30,
2021: (1) voluntarily or for cause; (2) involuntarily without cause (including a constructive termination (as
defined in the Severance Plan)); (3) in connection with the executive’s disability; (4) upon the executive’s death;
(5) upon the executive’s retirement (none of the named executive officers was retirement eligible at the end
of fiscal 2020 other than Mr. Robins); or (6) in connection with a change in control.

Rights Under Post-Termination and Change in Control Arrangements

Termination for Cause

If a named executive officer is terminated for cause or due to his or her voluntary resignation, we have

no obligation to pay any unearned compensation or to provide any future benefits to the executive.

Involuntary Termination Without Cause

If a named executive officer is involuntarily terminated without cause (including a constructive

termination), the Severance Plan would entitle the named executive officer to:

• a cash payment equal to the product of (1) the named executive officer’s annualized base salary in

effect on the date of termination and (2) a multiple thereof;

• a cash payment equal to a prorated portion of the annual incentive award that the named executive

officer would have earned for the fiscal year in which the termination occurred had such termination
not occurred;

• a cash payment for outplacement assistance;

• continued coverage for the named executive officer under our health plans until the last day of the
calendar month in which the post-termination restriction period applicable to the named executive
officer elapses, plus the amount necessary to reimburse the named executive officer for the taxes he or
she would be liable for as a result of such continued coverage; and

• upon achievement of the applicable performance trigger, except for Mr. Thorn’s 2018 RSU award,

prorated vesting of all unvested, outstanding RSU awards granted to the named executive officer. If
Mr. Thorn is involuntary terminated without cause, his 2018 RSU award will vest in full.

Termination due to Disability or Death

If a named executive officer is terminated as a result of his or her disability or death:

• the Severance Plan would entitle the named executive officer to a cash payment equal to a prorated

portion of the annual incentive award that the named executive officer would have earned for the fiscal
year in which the termination occurred had such termination not occurred;

• a prorated portion of the unvested PSUs granted under the 2017 LTIP that the named executive
officer would have earned had the named executive officer remained employed for the entire
performance period would vest upon the certification of the applicable performance condition; and

• a prorated portion of the unvested RSUs granted under the 2017 LTIP and the 2020 LTIP would

vest on the termination date.

Termination Upon Retirement

If a named executive officer is terminated as a result of his or her retirement (as defined in the

applicable award agreement):

• a prorated portion of the unvested RSUs granted under the 2017 LTIP and the 2020 LTIP would

vest on the termination date.

Termination in connection with Change in Control

If terminated without cause (including a constructive termination) within 24 months after a change in
control, the senior executive severance agreements would entitle the named executive officers to (1) a lump-
sum payment equal to 200% of the executive’s then current annual base salary and target annual incentive
award, (2) a lump-sum payment equal to executive’s target bonus prorated for the number of days the executive
worked during the applicable performance period prior to the executive’s termination and (3) continued
coverage under our health plans for up to two years after the date of termination.

In addition, upon a change in control:

• if the change in control occurs before the third anniversary of the grant date, all unvested RSUs

granted to the named executive officer under the 2017 LTIP would vest;

• if the change in control occurs before the third anniversary of the grant date and the named

executive officer incurs a separation of service (as defined in Section 409A of the IRC) within the
30 days before or 24 months following the change in control, all unvested RSUs granted to the named
executive officer under the 2020 LTIP would vest; and

• if the change in control occurs before the end of the applicable performance period, the greater of

(1) the target number of PSUs and (2) a number of PSUs calculated based on the satisfaction of the
applicable performance conditions before the change in control, would vest for each named
executive officer.

Upon a change in control, each participating named executive officer would also receive a lump sum

payment of all vested and unvested amounts under the Supplemental Savings Plan. (See the “Nonqualified
Deferred Compensation” section above for more information regarding the Supplemental Savings Plan and
our named executive officers’ aggregate balances under such plans at the end of fiscal 2020.)

Change in Control Described

Under the 2017 LTIP, the 2020 LTIP, the Supplemental Savings Plan (as to amounts earned and vested
before January 1, 2005, including earnings attributable to such amounts) and the Severance Plan, a change
in control generally occurs upon: (i) certain acquisitions of 20% or more of our outstanding voting securities;
(ii) an unapproved change in the majority of the Board during any two-year period; or (iii) certain corporate
transactions, including certain mergers, consolidations or the sale of substantially all of the Company’s
assets.

Under the senior executive severance agreements, the 2019 Bonus Plan and the Supplemental Savings

Plan (as to all amounts earned and vested on or after January 1, 2005), a change in control generally occurs
upon: (i) certain acquisitions of more than 50% of the total fair market value or voting power in our
outstanding voting securities; (ii) certain acquisitions during a one-year period of 30% or more of our
outstanding voting securities; (iii) an unapproved change in the majority of the Board during any one-year
period; or (iv) the disposition, during any one-year period, of 40% or more of the total gross fair market value
of all of our assets.

Estimated Payments if Triggering Event Occurred at 2020 Fiscal Year-End

The amounts in the following tables are approximations based on various assumptions and estimates.
The actual amounts to be paid can only be determined at the time of the change in control or termination
of employment, as applicable. In the tables that follow, we have made the following material assumptions,
estimates and characterizations:

• Except as otherwise provided in the tables below, the amounts are calculated based on compensation

levels and benefits effective at January 30, 2021, the last day of fiscal 2020.

• We have not taken into account the possibility that a named executive officer may be eligible to
receive healthcare benefits from another source following his or her termination. Therefore, the
amounts shown in the “Healthcare Coverage” row in the tables below reflect, consistent with the
assumptions that would be used to estimate the cost of these benefits for financial reporting purposes
under generally accepted accounting principles, the current monthly cost to provide continued
healthcare coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”)
applied to each month these benefits would be provided to the named executive officer. Included in
the amounts shown in the “Healthcare Coverage” row in the tables below are the related tax gross-up
amounts. The amounts shown in the “Long-Term Disability Benefit” row in the tables below
represent 67% of the named executive officer’s monthly salary, up to a maximum of $25,000 per
month in accordance with the long-term disability insurance we maintain for our named executive
officers. This benefit is payable until the named executive officer is no longer disabled or age 65,
whichever occurs earlier. Due to the speculative nature of estimating the period of time during which
a named executive officer may be disabled, we have presented only one month of disability benefits
in the tables below.

• The amounts in the “Accelerated Equity Awards” row under the “Termination upon Disability” and
“Termination upon Death” columns in the tables below represent the value (as of the final trading
day on the NYSE during fiscal 2020) of (1) a prorated portion of the unvested RSUs granted under
the 2017 LTIP and the 2020 LTIP, (2) a prorated portion of the unvested PSUs granted under the 2017
LTIP in fiscal 2019, assuming that the applicable performance goals will be achieved at the target
level, and (3) the PSUs granted under the 2017 LTIP in fiscal 2018, that will vest based on our actual
performance. The amounts in the “Accelerated Equity Awards” row under the “Retirement”
columns in the tables below represent the value (as of the final trading day of fiscal 2020) of (1) a
prorated portion of the unvested RSUs granted under the 2017 LTIP and the 2020 LTIP, (2) a prorated
portion of the unvested PSUs granted under the 2017 LTIP in fiscal 2019, assuming that the
applicable performance goals will be achieved at the target level and (3) the PSUs granted under the
2017 LTIP in fiscal 2018 that vested based on our actual performance.

• The amounts in the “Accelerated Equity Awards” row under the “Termination in Connection with a
Change in Control” and “Change in Control (without termination)” columns in the tables below
include all unvested RSUs and PSUs that would have vested on an accelerated basis had a change in
control occurred as of the end of fiscal 2020. These amounts do not reflect any equity awards that
vested in fiscal 2020.

• The closing market price of our Common Shares on the final trading day on the NYSE during fiscal

2020 was $59.68 per share.

Bruce K. Thorn

The following table reflects the payments that would have been due to Mr. Thorn in the event of a

change in control and/or the termination of his employment on January 30, 2021.

Event Occurring at January 30, 2021

Voluntary
Termination/
For Cause
($)

Involuntary
Termination
without
Cause ($)

Termination
upon
Disability
($)

Termination
upon
Death ($)

Retirement
($)

Termination in
Connection
with a
Change in
Control ($)

Change in
Control
(without
termination)
($)

Salary/Salary Continuation ($) . . . . . .

Non-Equity Incentive Plan

Compensation ($) . . . . . . . . . . . . .

Healthcare Coverage ($)

. . . . . . . . . .

Long-Term Disability Benefit ($) . . . .

Outplacement Benefits ($) . . . . . . . . .

Accelerated Equity Awards ($) . . . . . .

Total ($)

. . . . . . . . . . . . . . . . . . . . .

—

2,200,000 —

—

— 2,200,000

2,750,000 — 2,750,000 2,750,000

4,125,000

61,069 —

— —

40,000 —

—

25,000

—

61,069

—

4,285,908 — 6,278,394 6,278,394 22,013,158 22,013,158

9,336,977 — 9,053,394 9,028,394 28,399,227 22,013,158

Jonathan E. Ramsden

The following table reflects the payments that would have been due to Mr. Ramsden in the event of a

change in control and/or the termination of his employment with us on January 30, 2021.

Event Occurring at January 30, 2021

Voluntary
Termination/
For Cause
($)

Involuntary
Termination
without
Cause ($)

Termination
upon
Disability
($)

Termination
upon
Death ($)

Retirement
($)

Termination in
Connection
with a
Change in
Control ($)

Change in
Control
(without
termination)
($)

Salary/Salary Continuation ($) . . . . . . .

Non-Equity Incentive Plan

Compensation ($) . . . . . . . . . . . . . .

Healthcare Coverage ($) . . . . . . . . . . .

Long-Term Disability Benefit ($) . . . . .

Outplacement Benefits ($) . . . . . . . . . .

Accelerated Equity Awards ($) . . . . . . .

Total ($) . . . . . . . . . . . . . . . . . . . . . .

—

1,400,000 —

—

— 1,400,000

840,000 —

840,000

1,260,000

85,337 —

— —

25,000 —

—

25,000

—

85,337

—

851,474 — 1,444,897 1,444,897

7,154,311

3,201,811 — 2,309,897 2,284,897

9,899,648

7,154,311

Michael A. Schlonsky

The following table reflects the payments that would have been due to Mr. Schlonsky in the event of a

change in control and/or the termination of his employment with us on January 30, 2021.

Event Occurring at January 30, 2021

Voluntary
Termination/
For Cause
($)

Involuntary
Termination
without
Cause
($)

Termination
upon
Disability
($)

Termination
upon
Death
($)

Retirement
($)

Termination in
Connection
with a
Change in
Control
($)

Change in
Control
(without
termination)
($)

Salary/Salary Continuation ($) . . . . . . .

Non-Equity Incentive Plan

Compensation ($) . . . . . . . . . . . . . .

Healthcare Coverage ($) . . . . . . . . . . .

Long-Term Disability Benefit ($) . . . . .

Outplacement Benefits ($) . . . . . . . . . .

Accelerated Equity Awards ($) . . . . . . .

Total ($) . . . . . . . . . . . . . . . . . . . . . .

—

1,027,200 —

—

— 1,027,200

616,320 —

616,320

924,480

85,337 —

— —

25,000 —

—

25,000

—

85,337

—

925,751 — 3,024,233 3,024,233

6,502,441

2,679,608 — 3,665,553 3,640,553

8,539,458

6,502,441

Ronald A. Robins, Jr.

The following table reflects the payments that would have been due to Mr. Robins in the event of a

change in control and/or the termination of his employment with us on January 30, 2021.

Voluntary
Termination/
For Cause
($)

Salary/Salary Continuation ($) . . . . . .

Non-Equity Incentive Plan

Compensation ($) . . . . . . . . . . . . .

Healthcare Coverage ($)

. . . . . . . . . .

Long-Term Disability Benefit ($) . . . .

Outplacement Benefits ($) . . . . . . . . .

Accelerated Equity Awards ($) . . . . . .

Total ($)

. . . . . . . . . . . . . . . . . . . . .

—

Event Occurring at January 30, 2021

Termination
upon
Disability
($)

Termination
upon
Death
($)

Retirement
($)

Termination in
Connection
with a
Change in
Control
($)

Change in
Control
(without
termination)
($)

—

— 1,000,000

Involuntary
Termination
without
Cause
($)

1,000,000

600,000

900,000

85,337

—

25,000

—

— 25,000

—

85,337

—

861,083 2,662,504 2,662,504 2,662,504

6,073,673

2,571,420 3,262,504 3,287,504 3,262,504

8,059,010

6,073,673

Jack Pestello

The following table reflects the payments that would have been due to Mr. Pestello in the event of a change in

control and/or the termination of his employment with us on January 30, 2021.

Event Occurring at January 30, 2021

Voluntary
Termination/
For Cause
($)

Involuntary
Termination
without
Cause
($)

Termination
upon
Disability
($)

Termination
upon
Death
($)

Retirement
($)

Termination in
Connection
with a
Change in
Control
($)

Change in
Control
(without
termination)
($)

Salary/Salary Continuation ($) . . . . . . .

Non-Equity Incentive Plan

Compensation ($) . . . . . . . . . . . . . .

Healthcare Coverage ($) . . . . . . . . . . .

Long-Term Disability Benefit ($) . . . . .

Outplacement Benefits ($) . . . . . . . . . .

Accelerated Equity Awards ($) . . . . . . .

Total ($) . . . . . . . . . . . . . . . . . . . . . .

—

1,280,000 —

—

— 1,280,000

396,659 —

396,659

1,152,000

85,337 —

—

— —

25,000

25,000 —

—

85,337

—

210,016 —

210,016

1,360,942

1,997,012 —

631,675

606,675

3,878,279

—

Lisa M. Bachmann

The following table reflects the payments due to Ms. Bachmann following her termination of

employment on September 4, 2020.

Event Occurring at September 4, 2020

Voluntary
Termination/
For Cause
($)

Involuntary
Termination
without
Cause
($)

Termination
upon
Disability
($)

Termination
upon
Death
($)

Retirement
($)

Termination in
Connection
with a
Change in
Control
($)

Change in
Control
(without
termination)
($)

Salary/Salary Continuation ($) . . . . . . .

Non-Equity Incentive Plan

Compensation ($) . . . . . . . . . . . . . .

Healthcare Coverage ($) . . . . . . . . . . .

Long-Term Disability Benefit ($) . . . . .

Outplacement Benefits ($) . . . . . . . . . .

Accelerated Equity Awards ($) . . . . . . .

Total ($) . . . . . . . . . . . . . . . . . . . . . .

—

1,573,550 —

560,253 —

61,069 —

— —

25,000 —

749,063 —

2,968,935 —

—

PROPOSAL TWO: APPROVAL, ON AN ADVISORY BASIS, OF THE COMPENSATION OF OUR
NAMED EXECUTIVE OFFICERS, AS DISCLOSED IN THIS PROXY STATEMENT PURSUANT TO
ITEM 402 OF REGULATION S-K, INCLUDING THE CD&A, COMPENSATION TABLES AND
THE NARRATIVE DISCUSSION ACCOMPANYING THE TABLES

Section 14A of the Exchange Act requires that we provide our shareholders with the opportunity to

vote to approve, on a nonbinding, advisory basis, the compensation of our named executive officers as
disclosed in this Proxy Statement in accordance with the compensation disclosure rules of the SEC. The
following summary of our executive compensation program describes our compensation philosophy and the
key objectives identified by our Compensation Committee to implement our compensation philosophy.

Our executive compensation program is designed to: (1) pay for superior results by rewarding executives

for achieving short- and long-term performance goals and creating long-term shareholder value; (2) align
the interests of our executives with the interests of our shareholders through performance- and equity-
based compensation; and (3) attract and retain talented executives by paying compensation that is competitive
with the compensation paid by the companies in our peer group. We use a balanced mix of salary, annual
cash incentive awards and equity awards to promote these objectives. For a more detailed discussion of how
our executive compensation program promotes these objectives and our executive compensation
philosophy, including information about the fiscal 2020 compensation of our named executive officers, we
encourage you to read the CD&A as well as the Summary Compensation Table and other compensation
tables in this Proxy Statement and the narrative discussion accompanying the tables.

Fiscal 2020 presented unprecedented challenges as a result of the COVID-19 pandemic, which has
disrupted and may continue to disrupt our business. Due to the lack of business visibility resulting from the
COVID-19 pandemic and our related inability to establish realistic performance goals until the second
half of the year, the executive compensation program established by the Compensation Committee for fiscal
2020 differed significantly from the programs established for recent fiscal years.

• Base Salaries.

In light of the uncertainty surrounding the COVID-19 pandemic and the potential

effect of the pandemic on the Company’s business at the time the Compensation Committee evaluates
base salaries, the Compensation Committee did not approve any merit increases in fiscal 2020 to
the base salaries of our named executive officers. In addition, to help fund the Company’s Employee
Assistance Fund in order to provide aid to Big Lots associates affected by COVID-19, each member
of the Company’s senior management, including each of our named executive officers, voluntarily
relinquished 10% of their base salary in each pay period in April, May, and June.

• Annual Cash Incentive Awards. The Compensation Committee bifurcated the annual cash incentive
award for fiscal 2020 into (1) a discretionary award based on effective management and leadership
through the crisis, including goals related to health and safety, business continuity, cash and liquidity
management, and internal and external communication, during the first half of fiscal 2020 and
(2) an objective corporate performance-based award similar to the annual cash incentive awards we
have granted to our executives in recent fiscal years based on our adjusted operating profit and
comparable sales in fiscal 2020. Based on the Compensation Committee’s assessment of various
actions taken and results achieved by management in the areas of cash and liquidity management
and crisis leadership during the first half of fiscal 2020, each of our named executive officers earned
a maximum payout under discretionary annual incentive award. Based on the Company’s adjusted
operating profit and comparable sales for fiscal 2020, each of our named executive officers also earned
a maximum payout under the objective corporate performance-based awards.

• Long-Term Equity Incentive Awards. The long-term equity incentive awards granted to our named

executive officers in fiscal 2020 consisted of PRSUs (50% weighting) and restricted stock units
(“RSUs”) (50% weighting). The Compensation Committee determined the number of PRSUs and
RSUs awarded to our named executive officers in fiscal 2020 by applying a 20 percent premium to the
closing price of our Common Shares on the grant date in an effort to impose appropriate limits on
the potential dilution of our Common Shares and to acknowledge the decline in the market price of
our Common Shares following the onset of the COVID-19 pandemic.

The Compensation Committee granted PRSUs in lieu of the PSUs that it granted in recent years due

to its desire to grant equity awards at approximately the same time that it granted equity awards in recent years

in order to motivate and incentivize executive performance throughout the year and our inability to
establish realistic performance goals for PSUs until the second half of the year. The PRSUs vested 33-1∕3%
upon the closing price of our Common Shares equaling or exceeding the following thresholds for 20
consecutive trading days on or before the third anniversary of the grant date: (1) $17.00; (2) $21.00; and
(3) $25.00, which represented premiums of approximately 7%, 33%, and 58%, respectively, above the closing
price of our Common Shares on the grant date. The closing price of our Common Shares subsequently
exceeded each of the thresholds in fiscal 2020 and, as a result, all of the PRSUs vested in April 2021 on the
first anniversary of the grant date although the underlying Common Shares may not be sold until the third
anniversary of the grant date.

RSUs are primarily intended to align the interests of our named executive officers and our shareholders
and help retain and motivate our named executive officers. The RSUs will vest ratably over three years from
the grant date of the award if the participant remains employed by us through each annual vesting date
and are subject to an operating profit performance component. Based on the Company’s operating profit in
fiscal 2020, one-third of the RSUs we granted in fiscal 2020 vested on the first anniversary of the grant
and the remaining two-thirds will vest ratably over the next two years.

We request that our shareholders indicate their support for the compensation of our named executive

officers as disclosed in this Proxy Statement pursuant to Item 402 of Regulation S-K by approving the
following resolution:

“RESOLVED, that the shareholders of Big Lots approve, on an advisory basis, the compensation of the
named executive officers of Big Lots, as disclosed in Big Lots’ Proxy Statement for the 2021 Annual Meeting
of Shareholders pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and
Analysis, compensation tables and the narrative discussion accompanying the tables.”

The vote on the approval of the compensation of our named executive officers is advisory, which
means that the vote is not binding on the Board, the Compensation Committee or us. If a majority of the
votes are cast against the approval of the compensation of our named executive officers, the Board and the
Compensation Committee will evaluate whether to take any actions to address the concerns of the
shareholders with respect to our executive compensation program.

THE BOARD RECOMMENDS THAT YOU VOTE FOR THE APPROVAL OF THE COMPENSATION
OF OUR NAMED EXECUTIVE OFFICERS, AS DISCLOSED IN THIS PROXY STATEMENT
PURSUANT TO ITEM 402 OF REGULATION S-K, INCLUDING THE CD&A, COMPENSATION
TABLES AND THE NARRATIVE DISCUSSION ACCOMPANYING THE TABLES.

2020 CEO PAY RATIO

As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act

and Item 402(u) of Regulation S-K, the Company is disclosing the following information about the
relationship of the annual total compensation of our CEO and the median of the annual total compensation
of our employees (other than the CEO) for our 2020 fiscal year:

• The annual compensation of our CEO (Bruce K. Thorn) was $7,725,640.

• The annual total compensation of our median employee, a part-time store associate, was $10,124.

• The ratio of the annual total compensation of our CEO to the annual total compensation of our

median employee was 763 to 1.

We identified our median employee for our 2020 fiscal year using the following methodology and

material assumptions and adjustments. To identify the median of the annual total compensation of our
active employees as of January 30, 2021, including any full-time, part-time, temporary or seasonal employees
but excluding our CEO, we used total wages from our payroll records as reported to the Internal Revenue
Service on Form W-2 for 2020. In making this determination, we did not annualize compensation for any full-
time or part-time permanent employees who were employed on January 30, 2021 but did not work for us
the entire year or make any full-time equivalent adjustments for part-time employees. We consistently applied
this compensation measure and methodology to all of our employees included in the calculation.

We determined the annual total compensation for fiscal year 2020 of our median employee (who was
calculated to be a part-time store associate) in the same manner that we determine the total compensation
of our named executive officers for purposes of the Summary Compensation Table. With respect to the
annual total compensation of our CEO for fiscal 2020, we used the amount for fiscal 2020 reported in the
“Total” column of the Summary Compensation Table.

This information is being provided for compliance purposes. Neither the Compensation Committee

nor management of the Company used the pay ratio measure in making compensation decisions.

AUDIT COMMITTEE DISCLOSURE

General Information

The Audit Committee consists of five non-employee directors of the Board. The members of the Audit

Committee have been reviewed by the Board and determined to be independent within the meaning of all
applicable SEC regulations and NYSE listing standards.

The charter of the Audit Committee states that the purpose of the Audit Committee is to assist the

Board in its oversight of:

• the integrity of our financial statements and financial reporting process, and our systems of internal

accounting and financial controls;

• our compliance with legal and regulatory requirements, including our disclosure controls and

procedures;

• the annual independent audit of our financial statements, the engagement of our independent

registered public accounting firm, and the evaluation of the firm’s qualifications, independence and
performance;

• the performance of our internal audit function;

• the evaluation of enterprise risk issues; and

• the fulfillment of other responsibilities set forth in its charter.

The full text of the Audit Committee’s charter is available in the Investor Relations section of our

website (www.biglots.com) under the “Corporate Governance” caption. The Audit Committee regularly
reviews its responsibilities as outlined in its charter, prepares an annual agenda that addresses all of its
responsibilities and conducts a self-assessment and review of the charter annually. The Audit Committee
believes it fulfilled its responsibilities under the charter in fiscal 2020.

The Audit Committee schedules its meetings with a view towards ensuring that it devotes appropriate

attention to all of its responsibilities. The Audit Committee’s meetings include, whenever appropriate,
executive sessions with the independent registered public accounting firm, the Company’s Vice President,
Internal Audit and our Chief Financial Officer, in each case without the presence of management. The Audit
Committee also meets in executive session without the presence of anyone else, whenever appropriate.

During fiscal 2020, our management completed an assessment of our system of internal control over
financial reporting in accordance with the requirements set forth in Section 404 of the Sarbanes-Oxley Act
of 2002 and related regulations. The Audit Committee was apprised of the progress of the assessment and
provided oversight and advice to management during the process. In connection with its oversight, the
Audit Committee received periodic updates provided by management and the independent registered public
accounting firm at each regularly scheduled Audit Committee meeting. The Audit Committee also reviewed
the report of management contained in our Form 10-K, as well as the independent registered public
accounting firm’s Report of Independent Registered Public Accounting Firm included in our Form 10-K
related to its audit of (1) our financial statements and (2) the effectiveness of our internal control over
financial reporting. The Audit Committee continues to oversee efforts related to our system of internal control
over financial reporting and management’s preparations for the assessment thereof in fiscal 2021. The
Audit Committee has also reviewed key initiatives and programs aimed at strengthening the effectiveness of
our internal and disclosure control structure.

Independent Registered Public Accounting Firm

The Audit Committee engaged Deloitte & Touche LLP as our independent registered public accounting
firm to audit our financial statements for fiscal 2020. Deloitte & Touche LLP has served as our independent
registered public accounting firm since October 1989. The Audit Committee annually selects and evaluates
our independent registered public accounting firm and reviews the scope of and plans for the audit by the
independent registered public accounting firm. Some of the factors the Audit Committee considers in its
evaluation include the independent auditor’s qualifications, performance, independence and tenure. Based on
its evaluation and review, the Audit Committee believes that it is in the best interest of the Company to
retain Deloitte & Touche LLP as our independent registered public accounting firm for fiscal 2021.

Audit and Non-Audit Services Pre-Approval Policy

Pursuant to the Audit Committee’s Audit and Non-Audit Services Pre-Approval Policy, all audit and
non-audit services rendered by Deloitte & Touche LLP in fiscal 2020 and fiscal 2019, including the related
fees, were pre-approved by the Audit Committee. Under the policy, the Audit Committee is required to
pre-approve all audit and permissible non-audit services performed by the independent registered public
accounting firm to assure that the provision of those services does not impair the firm’s independence.
Pre-approval is detailed as to the particular service or category of service and is subject to a specific
engagement authorization. The Audit Committee requires the independent registered public accounting
firm and management to report on the actual fees incurred for each category of service at Audit Committee
meetings throughout the year.

During the year, it may become necessary to engage the independent registered public accounting firm

for additional services that have not been pre-approved. In those instances, the Audit Committee requires
specific pre-approval before engaging the independent registered public accounting firm. The Audit
Committee may delegate pre-approval authority to one or more of its members for those instances when
pre-approval is needed prior to a scheduled Audit Committee meeting. The member or members to whom
pre-approval authority is delegated must report any pre-approval decisions to the Audit Committee at its next
scheduled meeting.

Fees Paid to Independent Registered Public Accounting Firm

The fees billed to us for the professional services rendered by Deloitte & Touche LLP during the two

most recently completed fiscal years were as follows:

($ in thousands)

Audit Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Audit-Related Fees(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All Other Fees(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Fiscal 2019
($)

Fiscal 2020
($)

1,400

1,440

2
1,462

2
1,624

(1) For fiscal 2019 and fiscal 2020, the audit-related fees principally related to implementation of new

accounting standards and significant non-routine transactions.

(2) For fiscal 2019 and fiscal 2020, the other fees include fees related to online subscription fees for

technical support.

Audit Committee Report

The Audit Committee has reviewed and discussed the audited financial statements for fiscal 2020 with

management and the independent registered public accounting firm. The Audit Committee has discussed
with the independent registered public accounting firm the matters required to be discussed by Auditing
Standard No. 1301, as adopted by the Public Company Accounting Oversight Board. The Audit Committee
has received the written communications from the independent registered public accounting firm required

by applicable requirements of the Public Company Accounting Oversight Board regarding the independent
registered public accounting firm’s communications with the Audit Committee concerning independence,
and has discussed with the independent registered public accounting firm its independence. Based on these
reviews and discussions, the undersigned members of the Audit Committee recommended to the Board that
the audited consolidated financial statements for fiscal 2020 be included in our Form 10-K for filing with
the SEC.

Members of the Audit Committee:
Marla C. Gottschalk, Chair
Sebastian J. DiGrande
Thomas A. Kingsbury
Christopher J. McCormick
Wendy L. Schoppert

PROPOSAL THREE: RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE
LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL 2021

At its March 3, 2021 meeting, the Audit Committee appointed Deloitte & Touche LLP as our
independent registered public accounting firm for fiscal 2021, subject to our entry into a mutually agreed
upon services contract with Deloitte & Touche LLP. The submission of this matter for approval by
shareholders is not legally required; however, we believe that such submission is consistent with best practices
in corporate governance and is another opportunity for shareholders to provide direct feedback on an
important issue of our corporate governance. If the shareholders do not ratify the appointment of Deloitte
& Touche LLP, the selection of such firm as our independent registered public accounting firm will be
reconsidered by the Audit Committee.

A representative of Deloitte & Touche LLP will be present at the Annual Meeting to respond to

appropriate questions and to make a statement if so desired.

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE PROPOSAL TO
RATIFY THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS OUR INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL 2021.

SHAREHOLDER PROPOSALS

Any proposals of shareholders that are intended to be presented at our 2022 annual meeting of

shareholders must be received by our Corporate Secretary at our corporate offices on or before December 14,
2021 to be eligible for inclusion in our 2022 proxy statement and form of proxy. Such proposals must be
submitted in accordance with Rule 14a-8 of the Exchange Act. If a shareholder intends to present a proposal
at our 2022 annual meeting of shareholders without inclusion of that proposal in our 2022 proxy materials
and written notice of the proposal is not received by our Corporate Secretary at our corporate offices on or
before February 27, 2022, or if we meet other requirements of the SEC rules, proxies solicited by the
Board for our 2022 annual meeting of shareholders will confer discretionary authority on the proxy holders
named therein to vote on the proposal at the meeting.

Our Amended Code of Regulations permits a shareholder, or a group of shareholders, who has
continuously owned at least 3% of our outstanding Common Shares for at least 3 years, to nominate and
include in our proxy statement candidates for the Board, subject to certain requirements. Each eligible
shareholder, or group of shareholders that together is an eligible shareholder, may nominate candidates for
director, up to a limit of 25% of the number of directors on the Board. Any nominee must meet the
qualification standards set forth in our Amended Code of Regulations. Any such notice and nomination
materials must be delivered to, or mailed to and received by, our Corporate Secretary no earlier than 150 days
and no later than 120 days before the anniversary of the date that the Company issued its proxy statement
for the previous year’s annual meeting of shareholders; provided however, that if the date of the annual
meeting has changed by more than 30 calendar days from the previous year, then the eligible shareholder
must deliver the notice and nomination materials to our Corporate Secretary a reasonable time before we issue
our proxy materials. Based on the anticipated one-year anniversary of the date that we issued our proxy
statement for the 2021 annual meeting, an eligible shareholder wishing to nominate a candidate for election
to the Board at the 2022 annual meeting must provide such notice no earlier than November 14, 2021 and
no later than December 14, 2021. Any such notice and accompanying nomination materials must meet the
requirements set forth in our Amended Code of Regulations, which is available in the Investor Relations
section of our website (www.biglots.com) under the “Corporate Governance” caption.

PROXY SOLICITATION COSTS

This solicitation of proxies is made by and on behalf of the Board. In addition to mailing the Notice of

Internet Availability of Proxy Materials (or, if applicable, paper copies of this Proxy Statement, the Notice
of Annual Meeting of Shareholders and the proxy card) to shareholders of record on the Record Date, the
brokers and banks holding our Common Shares for beneficial shareholders must, at our expense, provide
our proxy materials to persons for whom they hold our Common Shares in order that such Common Shares
may be voted. Solicitation of proxies may also be made by our officers and regular employees personally
or by telephone, mail or electronic mail. Officers and employees who assist with the solicitation will not receive

any additional compensation. The cost of the solicitation will be borne by us. We have also retained
Georgeson LLC to aid in the solicitation of proxies for a fee estimated to be $11,000, plus reasonable
out-of-pocket expenses.

OTHER MATTERS

As of the date of this Proxy Statement, we know of no business that will be presented for consideration

at the Annual Meeting other than as referred to in Proposal One, Proposal Two and Proposal Three above.
If any other matter is properly brought before the Annual Meeting for action by shareholders, Common
Shares represented by proxies returned to us and not revoked will be voted on such matter in accordance
with the recommendations of the Board.

By order of the Board of Directors,

Ronald A. Robins, Jr.
Executive Vice President, Chief Legal and
Governance Officer, General Counsel and
Corporate Secretary

April 13, 2021

Appendix A

BIG LOTS, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(In thousands, except per share data)
(Unaudited)

The following tables reconcile net income and diluted earnings per share (GAAP financial measures) to

adjusted net income and adjusted diluted earnings per share (non-GAAP financial measures) for fiscal
2020, fiscal 2019 and fiscal 2018.

Fiscal 2020

As Reported

Adjustment to exclude gain on sale of
distribution centers and related expenses

As Adjusted
(non-GAAP)

Net income . . . . . . . . . . . . . . . . . . . . . . . . . .

$629,191

Diluted earnings per share . . . . . . . . . . . . . . .

$ 16.11

$(341,903)

(8.75)

$287,288

7.35

The above adjusted net income and adjusted diluted earnings per share are “non-GAAP financial

measures” as that term is defined by Rule 101 of Regulation G (17 CFR Part 244) and Item 10 of
Regulation S-K (17 CFR Part 229). These non-GAAP financial measures exclude from the most directly
comparable financial measures calculated and presented in accordance with accounting principles generally
accepted in the United States of America (“GAAP”) a gain resulting from the sale of our Columbus,
OH; Durant, OK; Montgomery, AL; and Tremont, PA distribution centers and the related expenses of
$459,097 ($341,903, net of tax).

Fiscal 2019

Impact to exclude
department exit
inventory
impairment

Impact to exclude
transformational
restructuring costs

Adjustment to
exclude legal
settlement loss
contingencies

Adjustment to
exclude gain on
sale of distribution
center

As Adjusted
(non-GAAP)

As Reported

Net income . . .

$242,464

$4,497

$28,502

$5,554

$(136,604)

$144,413

Diluted

earnings per
share . . . . . .

6.16

$ 0.11

0.72

$ 0.14

(3.47)

3.67

The above adjusted net income and adjusted diluted earnings per share are “non-GAAP financial

measures” as that term is defined by Rule 101 of Regulation G (17 CFR Part 244) and Item 10 of
Regulation S-K (17 CFR Part 229). These non-GAAP financial measures exclude from the most directly
comparable financial measures calculated and presented in accordance with GAAP: (1) an inventory
impairment amount of $6,050 ($4,497, net of tax) as a result of a merchandise department exit; (2) the
costs associated with a transformational restructuring initiative of $38,338 ($28,502, net of tax); (3) a pretax
charge related to estimated legal settlement of employee class actions of $7,250 ($5,554, net of tax); and
(4) a gain resulting from the sale of our Rancho Cucamonga, CA distribution center of $178,534 ($136,604,
net of tax).

Fiscal 2018

As Reported

Adjustment to exclude CEO
retirement costs

Adjustment to exclude
shareholder litigation
matter

As Adjusted (non-GAAP)

Net income . . . . . . . . . . . . . . . $156,894

Diluted earnings per share . . . . . $

3.83

$6,123

$ 0.15

$2,621

$ 0.06

$165,638

4.04

The above adjusted net income and adjusted diluted earnings per share are “non-GAAP financial

measures” as that term is defined by Rule 101 of Regulation G (17 CFR Part 244) and Item 10 of
Regulation S-K (17 CFR Part 229). These non-GAAP financial measures exclude from the most directly

comparable financial measures calculated and presented in accordance with GAAP: (1) the costs associated
with the retirement of our former CEO of $7,018 ($6,123, net of tax); and (2) a pretax charge related to
the settlement in principle of shareholder litigation matters of $3,500 ($2,621, net of tax).

Our management believes that the disclosure of these non-GAAP financial measures provides useful
information to investors because the non-GAAP financial measures present an alternative and more relevant
method for measuring our operating performance, excluding special items included in the most directly
comparable GAAP financial measures, which management believes is more indicative of our on-going
operating results and financial condition. Our management uses these non-GAAP financial measures, along
with the most directly comparable GAAP financial measures, in evaluating our operating performance.

Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended January 30, 2021

or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

☑

☐

Commission File Number 001-08897

BIG LOTS, INC.

(Exact name of registrant as specified in its charter)

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

Ohio

06-1119097

4900 E. Dublin-Granville Road, Columbus, Ohio
(Address of principal executive offices)

43081
(Zip Code)

(614) 278-6800
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class
Common Shares $0.01 par value

Trading Symbol(s)
BIG

Name of each exchange on which registered
New York Stock Exchange

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90 days.

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted
and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such files).

Yes ☑ No ☐
Yes ☐ No ☑

Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and
"emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☑ Accelerated filer ☐

Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the
effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b))
by the registered public accounting firm that prepared or issued its audit report.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☐

☑
Yes ☐ No ☑

The aggregate market value of the Common Shares held by non-affiliates of the Registrant (assuming for these purposes that all executive officers
and directors are “affiliates” of the Registrant) was $1,532,148,465 on July 31, 2020, the last business day of the Registrant’s most recently
completed second fiscal quarter (based on the closing price of the Registrant’s Common Shares on such date as reported on the New York Stock
Exchange).

The number of the Registrant’s common shares, $0.01 par value, outstanding as of March 26, 2021, was 35,056,102.

Documents Incorporated by Reference
Portions of the Registrant’s Proxy Statement for its 2021 Annual Meeting of Shareholders are incorporated by reference into Part III of this Annual
Report on Form 10-K.

Table of Contents

BIG LOTS, INC.
FORM 10-K
FOR THE FISCAL YEAR ENDED JANUARY 30, 2021

TABLE OF CONTENTS

Part I

Item 1.

Item 1A.

Item 1B.

Item 2.

Item 3.

Item 4.

Item 5.

Item 6.

Item 7.

Item 7A.

Item 8.

Item 9.

Item 9A.

Item 9B.

Item 10.

Item 11.

Item 12.

Item 13.

Item 14.

Item 15.

Item 16.

Business
Risk Factors

Unresolved Staff Comments

Properties

Legal Proceedings

Mine Safety Disclosures

Supplemental Item. Executive Officers of the Registrant

Part II

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities

Selected Financial Data

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Quantitative and Qualitative Disclosures About Market Risk

Financial Statements and Supplementary Data

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

Controls and Procedures

Other Information

Directors, Executive Officers and Corporate Governance

Executive Compensation

Part III

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Certain Relationships and Related Transactions, and Director Independence

Principal Accountant Fees and Services

Exhibits and Financial Statement Schedules

Form 10-K Summary
Signatures

Part IV

Page
2

69
70

Table of Contents

Item 1. Business

The Company

Part I

Big Lots, Inc., an Ohio corporation, through its wholly owned subsidiaries is a neighborhood discount retailer operating in the
United States (“U.S.”). At January 30, 2021, we operated a total of 1,408 stores and an e-commerce platform. Our mission is to
help people live BIG and save LOTS by providing our customers with the right product at the right price. Our vision is to be the
BIG difference for a better life by delivering unmatched value through surprise and delight, building a “Best Places to Work”
culture, rewarding shareholders with consistent growth and top tier returns, and doing good as we do well. Our values are
leading with our core customer (whom we refer to as Jennifer), treating all like friends, succeeding together, and playing to win.

Our principal executive offices are located at 4900 E. Dublin-Granville Road, Columbus, Ohio 43081, and our telephone
number is (614) 278‑6800.

Unless this Annual Report on Form 10-K (“Form 10-K”) otherwise indicates or the context otherwise requires, the terms the
“Company,” “we,” “us,” and “our” refer to Big Lots, Inc. and its subsidiaries.

Similar to many other retailers, our fiscal year ends on the Saturday nearest to January 31, which results in some fiscal years
being comprised of 52 weeks and some fiscal years being comprised of 53 weeks. Unless otherwise stated, references to years
in this Form 10-K relate to fiscal years rather than to calendar years. The following table provides a summary of our fiscal year
calendar and the associated number of weeks in each fiscal year:

Fiscal Year

Number of Weeks

Year Begin Date

2021

2020

2019

2018

2017

2016

January 31, 2021

February 2, 2020

February 3, 2019

February 4, 2018

January 29, 2017

January 31, 2016

Year End Date

January 29, 2022

January 30, 2021

February 1, 2020

February 2, 2019

February 3, 2018

January 28, 2017

We manage our business on the basis of one segment: discount retailing. In 2020, we evaluated and reported overall sales and
merchandise performance based on the following key merchandising categories: Furniture; Seasonal; Soft Home; Food;
Consumables; Hard Home; and Electronics, Toys, & Accessories. The Furniture category includes our upholstery; mattress;
case goods; and ready-to-assemble departments. The Seasonal category includes our lawn & garden; summer; Christmas; and
other holiday departments. The Soft Home category includes our fashion bedding; utility bedding; bath; window; decorative
textile; home organization; area rugs; home décor; and frames departments. The Food category includes our beverage &
grocery; candy & snacks; and specialty foods departments. The Consumables category includes our health, beauty and
cosmetics; plastics; paper; chemical; and pet departments. The Hard Home category includes our small appliances; table top;
food preparation; stationery; and home maintenance departments. The Electronics, Toys, & Accessories category includes our
electronics; toys; jewelry; apparel; and hosiery departments.

Merchandising

We focus our merchandising strategy on (1) being the authority on price and value to Jennifer in all of our merchandise
categories and (2) surprising and delighting Jennifer with our product assortment. We utilize traditional sourcing methods and
in certain merchandise categories, we also take advantage of closeout channels to enhance our ability to offer outstanding value
and bring surprise and delight into our product offerings. We evaluate our product offerings to ensure we are providing quality
and value. This process requires us to focus our product offering decisions on our customer’s expectations and enables us to
compare the potential performance of traditionally-sourced merchandise, either domestic or import, to closeout merchandise,
which is generally sourced from production overruns, packaging changes, discontinued products, order cancellations,
liquidations, returns, and other disruptions in the supply chain of manufacturers. We believe that focusing on our customers’
expectations has improved our ability to provide a desirable assortment of offerings in our merchandise categories.

Table of Contents

We source our merchandise through both closeout opportunities and planned purchases to provide Jennifer with the novelty of
closeouts and the consistency of staple product offerings. Our planned purchases in the Food, Consumables, Soft Home, and
Furniture merchandise categories provide a merchandise assortment that our customers expect us to consistently offer in our
stores at a significant value. Over the last two years, we have focused on increasing our sourcing and purchasing of quality
closeout merchandise directly from manufacturers and other vendors, typically at prices lower than those paid by traditional
discount retailers. We believe that our strong vendor relationships and our strong credit profile support this sourcing model. We
expect that the unpredictability of the retail and manufacturing environments coupled with what we believe is our significant
purchasing power position will continue to support our ability to source quality closeout merchandise at competitive prices. As
a result of our renewed focus on closeouts, our 2020 closeout-related net sales increased by approximately 37% compared to
2019.

Our global sourcing department and overseas vendor relationships represent important components of our merchandising
strategy. We expect our import partners to responsibly source goods that our merchandising teams identify as having our
desired mix of quality, fashion, and value. During 2020, we purchased approximately 21% of our merchandise, at cost, directly
from overseas vendors, including approximately 13% from vendors located in China. Additionally, a significant amount of our
domestically-purchased merchandise is manufactured abroad. As a result, a significant portion of our merchandise supply is
subject to certain risks described in “Item 1A. Risk Factors” of this Form 10-K.

Advertising and Promotion

Our brand image is an important part of our marketing program. We use a variety of marketing vehicles to promote our brand
awareness, including television, internet, social media, e-mail, in-store point-of-purchase, and print media.

Over the past few years, we have refined our brand identity to accentuate our friendly service and community orientation. We
focus on serving Jennifer with a friendly approach and an easy, positive shopping experience. We believe our approach to
retailing differentiates us from the competition and allows us to make a difference in the communities we serve. Our
community-oriented approach to retailing includes “doing good as we do well,” which means supporting both local and national
causes that aid the communities in which we do business. In our local markets, we invest in point of sale campaigns in each of
our geographic regions, the beneficiaries of which are selected based on their impacts on local customers and associates. We
serve the community on a national level through our Big Lots Foundation, which focuses on healthcare, housing, hunger, and
education. In addition, we are pleased to support our local community in Columbus, OH through our partnership with
Nationwide Children’s Hospital, to which the Company committed $40 million and the Big Lots Foundation committed
additional funds to open the Big Lots Behavioral Health Pavilion, a state-of-the-art medical facility dedicated to child and
adolescent mental and behavioral health.

In all of our markets, we design and distribute printed advertising circulars, through newspaper insertions and mailings. In
2020, we distributed multi-page circulars representing 23 weeks of advertising coverage, compared to 29 circulars in 2019. We
create regional versions of these circulars to tailor our advertising message based on market differences caused by product
availability, climate, and customer preferences.

Our customer database is an important marketing tool that allows us to communicate in a cost-effective manner with our
customers, including through e-mail delivery of our circulars, announcement of flash sales, and product-specific promotions. In
addition, our BIG Rewards program rewards our customers for making frequent and high-ticket purchases and offers a special
birthday reward. We utilize insights gained through the BIG Rewards program to evaluate the effectiveness of our promotions
and tailor promotions to our customers’ desires. At January 30, 2021, our BIG Rewards program included nearly 21 million
active members who had made a purchase in our stores in the last 12 months.

In 2020, we substantially increased our investment in social media marketing and digital media marketing, which includes
Facebook®, Instagram®, Twitter®, Pinterest®, and YouTube®. Our marketing program also employs a traditional television
campaign, which combines strategic branding and promotional elements used in most of our other marketing media. Our
highly-targeted media placement strategy uses strategically selected networks and programs aired by national cable providers as
the foundation of our television advertising. In addition, we use in-store promotional materials, including in-store signage, to
emphasize special bargains and significant values offered to our customers. Total advertising expense as a percentage of total
net sales was 1.7%, 1.8%, and 1.8% in 2020, 2019, and 2018, respectively.

Table of Contents

Competition

We operate in the highly competitive retail industry. We face strong sales competition from other general merchandise,
discount, food, furniture, arts and crafts, and dollar store retailers, which operate in traditional brick and mortar stores and/or
online. Additionally, we compete with a number of companies for retail site locations, to attract and retain quality employees,
and to acquire our broad merchandising assortment from vendors. We operate an e-commerce platform which faces additional
competition from a wider range of retailers in a highly competitive marketplace, where we compete for customers, fulfillment
capabilities, and technological innovation.

Real Estate

The following table compares the number of our stores in operation at the beginning and end of each of the last five fiscal
years:

2020

2019

2018

2017

2016

Stores open at the beginning of the year

1,404

1,401

1,416

1,432

1,449

Stores opened during the year

Stores closed during the year

(20)

(51)

(47)

(40)

(26)

Stores open at the end of the year

1,408

1,404

1,401

1,416

1,432

For additional information about our real estate strategy, see the discussion under the caption “Operating Strategy - Real Estate”
in the accompanying “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of
Operations” (“MD&A”) in this Form 10-K.

The following table details our U.S. stores by state at January 30, 2021:

Alabama

Arizona

Arkansas

California

Colorado

Connecticut

Delaware

Florida

Georgia
Idaho

Illinois
Indiana

Iowa

Kansas

Kentucky

Louisiana

150

104

50
6

33
44

Maine

Maryland

Massachusetts

Michigan

Minnesota

Mississippi

Missouri

Montana

Nebraska
Nevada

New Hampshire
New Jersey

New Mexico

New York

North Carolina

North Dakota

Ohio

Oklahoma

Oregon

Pennsylvania

Rhode Island

South Carolina

Tennessee

Texas

Utah
Vermont

Virginia
Washington

West Virginia

Wisconsin

Wyoming

3
12

6
29

112

7
4

40
27

Total stores

Number of states

1,408

Of our 1,408 stores, 33% operate in four states: California, Texas, Florida, and Ohio, and net sales from stores in these states
represented 33% of our 2020 net sales. We have a concentration in these states based on their size, population, and customer
base.

Table of Contents

Warehouse and Distribution

The majority of our merchandise offerings are processed for retail sale and distributed to our stores from five regional
distribution centers located in Alabama, California, Ohio, Oklahoma, and Pennsylvania.

We select the locations of our distribution centers to help manage transportation costs and to minimize the distance from our
distribution centers to our stores. While certain of our merchandise vendors deliver directly to our stores, the large majority of
our inventory is staged and delivered from our distribution centers to facilitate prompt and efficient distribution and
transportation of merchandise to our stores and help maximize our sales and inventory turnover.

In addition to our regional distribution centers that handle store merchandise, we operate two warehouses within our Ohio
distribution center. One warehouse distributes fixtures and supplies to our stores and our five regional distribution centers and
the other warehouse supplements our fulfillment center for our e-commerce operations. In 2020, to supplement our e-commerce
fulfillment center, we began fulfilling direct-ship e-commerce orders from 47 of our store locations, which we strategically
selected based on geographic location, size, and other relevant factors. We continue to evaluate our e-commerce fulfillment
capabilities to reduce shipping times.

In 2021, we intend to expand our distribution network by opening two small-format distribution centers, which will be operated
by a third party, to increase the efficiency and capacity of our supply chain, and support future growth. These small-format
distribution centers will process full-pallet shipments and other bulky items, particularly furniture, which will allow our
regional distribution centers to focus on standard carton processing.

For additional information regarding our warehouses and distribution facilities and related initiatives, see the discussion under
the caption “Warehouse and Distribution” in “Item 2. Properties” of this Form 10-K.

Table of Contents

Seasonality

We have historically experienced seasonal fluctuations in our sales and profitability, with a larger percentage of our net sales
and operating profit realized in our fourth fiscal quarter, which includes the Christmas holiday selling season. In addition, our
quarterly net sales and operating profits can be affected by the timing of new store openings and store closings, advertising, and
certain holidays. We historically receive a higher proportion of merchandise, carry higher inventory levels, and incur higher
outbound shipping and payroll expenses as a percentage of sales in our third fiscal quarter in anticipation of increased sales
activity during our fourth fiscal quarter. Performance during our fourth fiscal quarter typically reflects a leveraging effect which
has a favorable impact on our operating results because net sales are higher and certain of our costs, such as rent and
depreciation, are fixed and do not vary as sales levels escalate. If our sales performance is significantly better or worse during
the Christmas holiday selling season, we would expect a more pronounced impact on our annual financial results than if our
sales performance is significantly better or worse in a different season. Our net sales as a percentage of full year in the second
quarter of 2020 were disproportionately higher as a result of increased demand arising from the COVID-19 pandemic. Due to
the ongoing COVID-19 pandemic and the demand volatility we have experienced during the COVID-19 pandemic, the
seasonality of our 2021 results may also differ from historical experience.

The following table sets forth the seasonality of net sales and operating profit (loss) for 2020, 2019, and 2018 by fiscal quarter:

Fiscal Year 2020

Net sales as a percentage of full year
Operating profit as a percentage of full year (a)
Fiscal Year 2019

Net sales as a percentage of full year
Operating profit as a percentage of full year (b)
Fiscal Year 2018

Net sales as a percentage of full year

Operating profit (loss) as a percentage of full year

First

Second

Third

Fourth

23.2 %

8.7

24.3 %

7.7

24.2 %

20.8

26.5 %

71.0

23.5 %

3.9

23.3 %

15.7

22.2 %

5.0

21.9 %

50.9

22.0 %

(4.4)

28.1 %

15.3

30.3 %

37.5

30.5 %

67.9

(a) The second quarter of 2020 included a gain on sale of distribution centers and related expenses of $459.1 million related to
the sale and leaseback of four distribution centers, which significantly increased second quarter operating profit as a percentage
of full year in comparison to 2019 and 2018.
(b) The third quarter of 2019 included a gain on sale of distribution center of $178.5 million, which significantly increased third
quarter operating profit as a percentage of full year in comparison to 2018 and 2020.

Human Capital

At January 30, 2021, we had approximately 37,000 active associates comprised of 10,800 full-time and 26,200 part‑time
associates. Approximately 71% of the associates we employed during 2020 were employed on a part-time basis. Temporary
associates hired for the holiday selling season increased the total number of associates to a peak of approximately 39,100 in
2020. We are not a party to any labor agreements. We require all of our associates to adhere to our code of ethics and workplace
safety protocols.

We believe our associates are among our most important resources. We evaluate our human capital management at our stores,
distribution centers, and corporate headquarters on the basis of associate engagement, diversity, equity, and inclusion,
compensation and benefits, and talent development.

Associate Engagement
We send an associate engagement survey to each of the associates in our corporate headquarters and to our field and
distribution center leadership on an annual basis to assess our associate engagement and ask those associates their thoughts on
manager effectiveness, performance enablement, and our diversity and inclusion efforts. In 2020, 93% of the associates
surveyed responded to the survey with an 82% favorable engagement rate. Based on results of the annual survey, our leaders
create action plans to address areas where our associates have told us we can improve.

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Diversity, Equity, and Inclusion
We recognize the value of creating a diverse, equitable, and inclusive workplace. As a result, diversity, equity, and inclusion
(“DEI”) is a significant component of our human capital management. In 2020, we established our Diversity, Equity, and
Inclusion Council (“DEI Council”), which is comprised of associates from our stores, distribution centers, and corporate
headquarters who represent various job levels, locations, ages, genders, languages, work shifts, races, sexual orientations, and
leadership styles. The DEI Council’s mission is to lead the development and advancement of our DEI strategy. Additionally, we
formed a Diversity, Equity, and Inclusion Executive Advisory Committee, which is comprised of senior leaders who provide
guidance to the DEI Council, as well as approve our DEI strategy and promote its achievement throughout our organization. In
2021, our DEI strategy for human capital includes, among other things, a focus on recruitment and development of diverse
talent, conscious inclusion training, and policy review to prevent bias.

Compensation and Benefits
We offer a competitive compensation and benefits package to our eligible associates including, among other benefits, incentive
compensation, performance-based merit pay, paid holidays, paid vacation, 401(k) match, and healthcare coverage, including
medical, dental, and vision insurance with health savings account and flexible savings account options. Our compensation and
benefits packages are designed to attract and retain high-performing talent. Additionally, we provide our associates with a
company discount on our merchandise and our associates redeemed approximately $37 million in corporate discounts in 2020.

Talent Development
Talent development is critical to developing the high-performance culture that we seek to foster. Each of our associates
participates in an annual goal-setting process and completes an annual performance review, which is followed by periodic
discussions throughout the year to assess progress. Each of our managers also completes an individual development plan on an
annual basis to set and track long-term goals. Additionally, our business leaders participate in a succession planning process
that serves as a tool for identifying and developing high-potential individuals within our organization as well as ensuring
business continuity. We also offer a robust catalog of training and development programs to our associates through our Big Lots
University training tool, which covers topics including, but not limited to, workplace harassment, safety, ethics, and job skills.

COVID-19 Response
One of our key business goals during 2020 was to ensure the safety and well-being of our associates during the COVID-19
pandemic. To provide a safe working environment for our associates and our customers, we increased sanitation protocols,
secured personal protective equipment for our associates, installed plexiglass at all registers, implemented social distancing and
mask protocols at our stores and distribution centers, and implemented daily health screens and temperature checks for all
associates. From March 2020 through July 2020, we also provided our non-exempt store and distribution center associates with
a $2 per hour wage increase and, in the second quarter of 2020, we made additional bonus payments to our associates. In 2020,
we spent more than $50 million on these and other COVID-19 related response efforts.

Available Information

We make available, free of charge, through the “Investors” section of our website (www.biglots.com) under the “SEC Filings”
caption, our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments
to those reports filed or furnished pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended
(“Exchange Act”), as well as our definitive proxy materials filed pursuant to section 14 of the Exchange Act, as soon as
reasonably practicable after we file such material with, or furnish it to, the Securities and Exchange Commission (“SEC”).
These filings are also available on the SEC’s website at http://www.sec.gov. In April 2021, we will publish our first Corporate
Social Responsibility Report, titled Big Cares, which will be available on our website. The contents of our website are not
incorporated into, or otherwise made a part of, this Form 10-K.

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Item 1A. Risk Factors

The statements in this item describe material risks to our business and should be considered carefully. In addition, these
statements constitute cautionary statements under the Private Securities Litigation Reform Act of 1995.

This Form 10-K contains forward-looking statements that set forth anticipated results based on management’s plans and
assumptions. From time to time, we also provide forward-looking statements in other materials we release to the public and in
oral statements that may be made by us. Such forward-looking statements give our current expectations or forecasts of future
events. They do not relate strictly to historical or current facts. Such statements are commonly identified by using words such as
“anticipate,” “estimate,” “approximate,” “expect,” “objective,” “goal,” “project,” “intend,” “plan,” “believe,” “will,” “should,”
“may,” “target,” “forecast,” “guidance,” “outlook,” and similar expressions in connection with any discussion of future
operating or financial performance. In particular, forward-looking statements include statements relating to future actions,
future performance, or results of current and anticipated products, sales efforts, expenses, interest rates, the outcome of
contingencies, such as legal proceedings, and financial results.

We cannot guarantee that any forward-looking statement will be actualized. Achievement of future results is subject to risks,
uncertainties, and potentially inaccurate assumptions. If known or unknown risks or uncertainties materialize, or should
underlying assumptions prove inaccurate, actual results could differ materially from past results or those anticipated, estimated,
or projected results set forth in the forward-looking statements. You should bear this in mind as you consider forward-looking
statements made or to be made by us.

You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date made. We
undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events, or
otherwise. You are advised, however, to consult any further disclosures we make on related subjects in our future Annual
Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with the SEC.

The following cautionary discussion of material risks, uncertainties, and assumptions relevant to our businesses describes
factors that, individually or in the aggregate, we believe could cause our actual results to differ materially from expected and
historical results. Additional risks not presently known to us or that we presently believe to be immaterial also may adversely
impact us. Should any risks or uncertainties develop into actual events, these developments could have material adverse effects
on our business, financial condition, results of operations, and liquidity. Consequently, all forward-looking statements made or
to be made by us are qualified by these cautionary statements, and there can be no assurance that the results or developments we
anticipate will be realized or that they will have the expected effects on our business or operations. This discussion is provided
as permitted by the Private Securities Litigation Reform Act of 1995.

Our ability to achieve the results contemplated by forward-looking statements is subject to a number of factors, any one or a
combination of which could materially affect our business, financial condition, results of operations, or liquidity. These factors
may include, but are not limited to:

Operational Risks

If we are unable to successfully refine and execute our operating strategies, our operating performance could be
significantly impacted.

There is a risk that we will be unable to meet or exceed our operating performance targets and goals in the future if our
strategies and initiatives are unsuccessful. Our ability to execute and/or refine our operating and strategic plans, as necessary,
including cost savings initiatives, could impact our ability to meet our operating performance targets. Additionally, we must be
able to effectively adjust our operating and strategic plans over time to adapt to an ever-changing marketplace. See the MD&A
in this Form 10-K for additional information concerning our operating strategy.

Our inability to properly manage our inventory levels and offer merchandise that meets changing customer demands may
materially impact our business and financial performance.

We must maintain sufficient inventory levels to successfully operate our business. However, we also must seek to avoid
accumulating excess inventory to maintain appropriate in-stock levels based on evolving customer demands. We obtain slightly
less than one quarter of our merchandise directly from vendors outside of the U.S. These foreign vendors often require us to
order merchandise and enter into purchase order contracts for the purchase of such merchandise well in advance of the time we
offer these products for sale. As a result, we may experience difficulty in rapidly responding to a changing retail environment,
which makes us vulnerable to changes in price and in consumer preferences. In addition, we attempt to maximize our operating

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profit and operating efficiency by delivering proper quantities of merchandise to our stores in a timely manner. If we do not
accurately anticipate future demand for a particular product or the time it will take to replenish inventory levels, our inventory
levels may not be appropriate and our results of operations may be negatively impacted.

Disruption to our distribution network, the capacity of our distribution centers, and our timely receipt of merchandise
inventory could adversely affect our operating performance.

We rely on our ability to replenish depleted merchandise inventory through deliveries to our distribution centers and from the
distribution centers to our stores by various means of transportation, including shipments by sea, rail and truck carriers. A
decrease in the capacity of carriers and/or labor strikes, disruptions or shortages in the transportation industry could negatively
affect our distribution network, our timely receipt of merchandise and/or our transportation costs. In addition, disruptions to the
U.S. and international transportation infrastructure from wars, political unrest, terrorism, natural disasters, pandemic diseases,
governmental budget constraints and other significant events that lead to delays or interruptions of service could adversely
affect our business. Also, a fire, earthquake, or other disaster at one of our distribution centers could disrupt our timely receipt,
processing and shipment of merchandise to our stores which could adversely affect our business. Additionally, as we seek to
expand our operation through the implementation of our online retail capabilities, we may face increased or unexpected
demands on distribution center operations, as well as new demands on our distribution network. Lastly, global pandemics, such
as the COVID-19 pandemic, could lead to the shutdown of parts, or all, of our distribution network and generally disrupt our
ability to receive, process, and ship merchandise to our stores and meet the demand of our customers.

If we are unable to retain existing and/or secure suitable new store locations under favorable lease terms, our financial
performance may be negatively affected.

We lease almost all of our stores, and a significant number of these leases expire or are up for renewal each year, as noted
below in “Item 2. Properties” and in MD&A in this Form 10-K. Our strategy to improve our financial performance includes
increasing sales while managing the occupancy cost of each of our stores. The primary component of our sales growth strategy
is increasing our comparable store sales, which will require renewing many leases each year. Additional components of our
sales growth strategy include relocating certain existing stores to new locations within existing markets and opening new store
locations, either as an expansion in an existing market or as an entrance into a new market. If the commercial real estate market
does not allow us to negotiate favorable lease renewals and new store leases, our financial position, results of operations, and
liquidity may be negatively affected.

If we are unable to maintain or upgrade our computer systems or if our information technology or computer systems are
damaged or cease to function properly, our operations may be disrupted or become less efficient.

We depend on a variety of information technology and computer systems for the efficient functioning of our business. We rely
on certain hardware, telecommunications and software vendors to maintain and periodically upgrade many of these systems so
that we can continue to support our business. Various components of our information technology and computer systems,
including hardware, networks, and software, are licensed to us by third party vendors. We rely extensively on our information
technology and computer systems to process transactions, summarize results, and manage our business, including management
and distribution of our inventory. Our information technology and computer systems are subject to damage or interruption from
power outages, computer and telecommunications failures, computer viruses, cyberattacks or other security breaches,
obsolescence, catastrophic events such as fires, floods, earthquakes, tornados, hurricanes, acts of war or terrorism, and usage
errors by our employees or our contractors. In recent years, we have begun using vendor-hosted solutions for certain of our
information technology and computer systems, which are more exposed to telecommunication failures.

If our information technology or computer systems are damaged or cease to function properly, we may have to make a
significant investment to fix or replace them, and we may suffer loss of critical data and interruptions or delays in our
operations as a result. Any material interruption experienced by our information technology or computer systems could
negatively affect our business and results of operations. Costs and potential interruptions associated with the implementation of
new or upgraded systems and technology or with maintenance or adequate support of our existing systems could disrupt or
reduce the efficiency of our business.

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Human Capital Risks

If we are unable to attract, train, and retain highly qualified associates while also controlling our labor costs, our financial
performance may be negatively affected.

Our customers expect a positive shopping experience, which is driven by a high level of customer service from our associates
and a quality presentation of our merchandise. To grow our operations and meet the needs and expectations of our customers,
we must attract, train, and retain a large number of highly qualified associates, while at the same time control labor costs. We
compete with other retail businesses for many of our associates in hourly and part-time positions. These positions have
historically had high turnover rates, which can lead to increased training and retention costs. In addition, our ability to control
labor costs is subject to numerous external factors, including prevailing wage rates, the impact of federal, state, or local
minimum wage legislation (including the increased possibility of federal, state, and/or local wage rate legislation in 2021), the
impact of legislation or regulations governing labor relations or benefits, and health insurance costs.

The loss of key personnel may have a material impact on our future business and results of operations.

We believe that we benefit substantially from the leadership and experience of our senior executives. The loss of the services of
these individuals could have a material adverse impact on our business and results of operations. Competition for key personnel
in the retail industry is intense, and our future success will depend on our ability to recruit, train, and retain our senior
executives and other qualified personnel.

Market and Competitive Risks

If we are unable to compete effectively in the highly competitive discount retail industry, our business and results of
operations may be materially adversely affected.

The discount retail industry, which includes both traditional brick and mortar stores and online marketplaces, is highly
competitive. As discussed in Item 1 of this Form 10-K, we compete for customers, products, employees, real estate, and other
aspects of our business with a number of other companies. Some of our competitors have broader distribution (e.g., more stores
and/or a more established online presence), and/or greater financial, marketing, and other resources than us. It is possible that
increased competition, significant discounting, improved performance by our competitors, or an inability to distinguish our
brand from our competitors may reduce our market share, gross margin, and operating margin, and may materially adversely
affect our business and results of operations.

If we are unable to compete effectively in today’s omnichannel retail marketplace, our business and results of operations
may be materially adversely affected.

With the saturation of mobile devices, competition from other retailers in the online retail marketplace is very high and
growing. Certain of our competitors, and a number of pure online retailers, have established online operations against which we
compete for customers and products. It is possible that the competition in the online retail space may reduce our market share,
gross margin, and operating margin, and may materially adversely affect our business and results of operations in other ways.
Our operations include an e-commerce platform with multiple fulfillment options to enhance our omnichannel experience.
Operating an e-commerce platform is a complex undertaking and there is no guarantee that the resources we have applied to
this effort will result in increased revenues or improved operating performance. If our online retailing initiatives do not meet
our customers’ expectations, the initiatives may reduce our customers’ desire to purchase goods from us both online and at our
brick and mortar stores and may materially adversely affect our business and results of operations.

Deterioration in general economic conditions, disposable income levels, and other conditions, such as unseasonable weather
or pandemic diseases, could lead to reduced consumer demand for our merchandise, thereby materially affecting our
revenues and gross margin.

Our results of operations can be directly impacted by the health of the U.S. economy. Our business and financial performance
may be adversely impacted by current and future economic conditions, including factors that may restrict or otherwise
negatively impact consumer financing, disposable income levels, unemployment levels, energy costs, interest rates, recession,
and inflation, and other matters, such as tax reform, natural disasters, pandemic diseases, or terrorist activities, that influence
consumer spending. Specifically, our Soft Home, Hard Home, Furniture and Seasonal merchandise categories may be
threatened when disposable income levels are negatively impacted by economic conditions. Additionally, the net sales of
cyclical product offerings in our Seasonal category may be threatened when we experience extended periods of unseasonable
weather. Inclement weather can also negatively impact our Furniture category, as many customers transport the product home

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personally. In particular, the economic conditions and weather patterns of four states (California, Texas, Florida, and Ohio) are
important as approximately 33% of our current stores operate and 33% of our 2020 net sales occurred in these states.

Cybersecurity Risks

If we are unable to secure customer, employee, vendor and company data, our systems could be compromised, our
reputation could be damaged, and we could be subject to penalties or lawsuits.

In the normal course of business, we process and collect relevant data about our customers, employees and vendors. The
protection of our customer, employee, vendor and company data and information is critical to us. We have implemented
procedures, processes and technologies designed to safeguard our customers’ debit and credit card information and other
private data, our employees’ and vendors’ private data, and our records and intellectual property. We utilize third-party service
providers in connection with certain technology related activities, including credit card processing, website hosting, data
encryption and software support. We require these providers to take appropriate measures to secure such data and information
and assess their ability to do so.

Despite our procedures, technologies and other information security measures, we cannot be certain that our information
technology systems or the information technology systems of our third-party service providers are or will be able to prevent,
contain or detect all cyberattacks, cyberterrorism, or security breaches. As evidenced by other retailers who have suffered
serious security breaches, we may be vulnerable to data security breaches and data loss, including cyberattacks. A material
breach of our security measures or our third-party service providers’ security measures, the misuse of our customer, employee,
vendor and company data or information or our failure to comply with applicable privacy and information security laws and
regulations could result in the exposure of sensitive data or information, attract a substantial amount of negative media
attention, damage our customer or employee relationships and our reputation and brand, distract the attention of management
from their other responsibilities, subject us to government enforcement actions, private litigation, penalties and costly response
measures, and result in lost sales and a reduction in the market value of our common shares. While we have taken action to
mitigate our financial risk, in the event we experience a material data or information security breach, our protection may not be
sufficient to cover the impact to our business.

In addition, the regulatory environment surrounding data and information security and privacy is increasingly demanding, as
new and revised requirements are frequently imposed across our business. Compliance with more demanding privacy and
information security laws and standards may result in significant expense due to increased investment in technology and the
development of new operational processes.

Regulatory and Legal Liability Risks

We rely on manufacturers located in foreign countries, including China, for significant amounts of merchandise, including
a significant amount of our domestically-purchased merchandise. Our business may be materially adversely affected by risks
associated with international trade, including the impact of tariffs and/or sanctions imposed by the U.S. with respect to
certain consumer goods imported from China and the impact of the COVID-19 pandemic.

Global sourcing of many of the products we sell is an important factor in driving higher operating profit. During 2020, we
purchased approximately 21% of our products, at cost, directly from overseas vendors, including 13% from vendors located in
China. Additionally, a significant amount of our domestically-purchased merchandise is manufactured abroad. Our ability to
identify qualified vendors and to access products in a timely and efficient manner is a significant challenge, especially with
respect to goods sourced outside of the U.S. Global sourcing and foreign trade involve numerous risks and uncertainties beyond
our control, including increased shipping costs, increased import duties, more restrictive quotas, loss of most favored nation
trading status, currency and exchange rate fluctuations, work stoppages, transportation delays, economic uncertainties such as
inflation, foreign government regulations, political unrest, pandemic diseases, natural disasters, war, terrorism, trade restrictions
and tariffs (including retaliation by the U.S. against foreign practices or by foreign countries against U.S. practices), the
financial stability of vendors, or merchandise quality issues. U.S. policy on trade restrictions is ever-changing and may result in
new laws, regulations, or treaties that increase the costs of importing goods and/or limit the scope of available foreign vendors.
These and other issues affecting our international vendors could materially adversely affect our business and financial
performance.

The majority of our products and components of our products imported from China are currently subject to tariffs and proposed
tariffs. As a result, we are continually evaluating the potential impact of the effective and proposed tariffs on our supply chain,
costs, sales, and profitability, and are considering strategies to mitigate such impact, including reviewing sourcing options,
exploring first sale valuation strategies, filing requests for exclusion from the tariffs with the U.S. Trade Representative for

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certain product lines, and working with our vendors and merchants. Given the volatility and uncertainty regarding the scope and
duration of these tariffs, as well as the potential for additional trade actions by the U.S. or other countries, the impact on our
operations and results is uncertain and could be significant. We can provide no assurance that any strategies we implement to
mitigate the impact of such tariffs or other trade actions will be successful. To the extent that our supply chain, costs, sales, or
profitability are negatively affected by the tariffs or other trade actions, our business, financial condition and results of
operations may be materially adversely affected.

The COVID-19 pandemic has led to general manufacturing and supply chain disruption in the U.S. and globally, including
manufacturers and supply chains that produce our retail merchandise, supplies, and fixtures. To the extent our manufacturers,
supply chain and associated costs are negatively affected by the COVID-19 pandemic, including delayed shipment of
seasonally sensitive product offerings, our business, financial condition, results of operations, and liquidity may be materially
adversely affected.

Changes in federal or state legislation and regulations, including the effects of legislation and regulations on product safety
and hazardous materials, could increase our cost of doing business and adversely affect our operating performance.

We are exposed to the risk that new federal or state legislation, including new product safety and hazardous material laws and
regulations, may negatively impact our operations, increase our cost of doing business and adversely affect our operating
performance. Changes in product safety legislation or regulations may lead to product recalls and the disposal or write-off of
merchandise, as well as fines or penalties and reputational damage. If our merchandise and food products do not meet
applicable governmental safety standards or our customers’ expectations regarding quality or safety, we could experience lost
sales, increased costs and be exposed to legal and reputational risk.

In addition, if we discard or dispose of our merchandise, particularly that which is non-salable, in a fashion that is inconsistent
with jurisdictional standards, we could expose ourselves to certain fines and litigation costs related to hazardous material
regulations. Our inability to comply on a timely basis with regulatory requirements, execute product recalls in a timely manner,
or consistently implement waste management standards, could result in fines or penalties which could have a material adverse
effect on our financial results. In addition, negative customer perceptions regarding the safety of the products we sell could
cause us to lose market share to our competitors. If this occurs, it may be difficult for us to regain lost sales.

We are subject to periodic litigation and regulatory proceedings, including Fair Labor Standards Act, state wage and hour,
and shareholder class action lawsuits, which may adversely affect our business and financial performance.

From time to time, we are involved in litigation and regulatory actions, including various collective, class action or shareholder
derivative lawsuits that are brought against us for alleged violations of the Fair Labor Standards Act, state wage and hour laws,
sales tax and consumer protection laws, False Claims Act, federal securities laws and environmental and hazardous waste
regulations. Due to the inherent uncertainties of litigation, we may not be able to accurately determine the impact on us of any
future adverse outcome of such proceedings. The ultimate resolution of these matters could have a material adverse impact on
our financial condition, results of operations, and liquidity. In addition, regardless of the outcome, these proceedings could
result in substantial cost to us and may require us to devote substantial attention and resources to defend ourselves. For a
description of certain current legal proceedings, see note 9 to the accompanying consolidated financial statements.

Our current insurance program may expose us to unexpected costs and negatively affect our financial performance.

Our insurance coverage is subject to deductibles, self-insured retentions, limits of liability and similar provisions that we
believe are prudent based on our overall operations. We may incur certain types of losses that we cannot insure or which we
believe are not economically reasonable to insure, such as losses due to acts of war, employee and certain other crime, some
natural disasters, and pandemic diseases. If we incur these losses and they are material, our business could suffer. Certain
material events may result in sizable losses for the insurance industry and adversely impact the availability of adequate
insurance coverage or result in excessive premium increases. To offset negative cost trends in the insurance market, we may
elect to self-insure, accept higher deductibles or reduce the amount of coverage in response to these market changes. In
addition, we self-insure a significant portion of expected losses under our workers’ compensation, general liability, including
automobile, and group health insurance programs. Unanticipated changes in any applicable actuarial assumptions and
management estimates underlying our recorded liabilities for these self-insured losses, including potential increases in medical
and indemnity costs, could result in significantly different expenses than expected under these programs, which could have a
material adverse effect on our financial condition and results of operations. Although we continue to maintain property
insurance for catastrophic events, we are self-insured for losses up to the amount of our deductibles. If we experience a greater
number of self-insured losses than we anticipate, our financial performance could be adversely affected.

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Financial Risks

If we are unable to comply with the terms of the 2018 Credit Agreement, our capital resources, financial condition, results of
operations, and liquidity may be materially adversely effected.

We may need to borrow funds under our $700 million five-year unsecured credit facility (“2018 Credit Agreement”) from time
to time, depending on operating or other cash flow requirements. The 2018 Credit Agreement contains financial and other
covenants, including, but not limited to, limitations on indebtedness, liens, and investments, as well as the maintenance of a
leverage ratio and a fixed charge coverage ratio. Additionally, we are subject to cross-default provisions under the synthetic
lease agreement (the “Synthetic Lease”) that we entered in connection with our distribution center in California. A violation of
any of these covenants may permit the lenders to restrict our ability to borrow additional funds, provide letters of credit under
the 2018 Credit Agreement and may require us to immediately repay any outstanding loans. Our failure to comply with these
covenants may have a material adverse effect on our capital resources, financial condition, results of operations, and liquidity.

A significant decline in our operating profit may impair our ability to realize the value of our long-lived assets.

We are required by accounting rules to periodically assess our property and equipment and intangible assets for impairment and
recognize an impairment loss, if necessary. In performing these assessments, we use our historical financial performance to
determine whether we have potential impairments or valuation concerns and as evidence to support our assumptions about
future financial performance. A significant decline in our financial performance could negatively affect the results of our
assessments of the recoverability of our property and equipment, deferred tax assets, and our intangible assets and trigger the
impairment of these assets. Impairment charges taken against property and equipment and intangible assets could be material
and could have a material adverse impact on our capital resources, financial condition, results of operations, and liquidity.

Other Risks

We also may be subject to a number of other factors which may, individually or in the aggregate, materially adversely affect
our business, capital resources, financial condition, results of operations and liquidity. These factors include, but are not
limited to:

•

•
•
•

•

•
•

Changes in governmental laws, case law and regulations, including changes that increase our effective tax rate,
comprehensive tax reform, or other matters related to taxation;
Changes in accounting standards, including new interpretations and updates to current standards;
A downgrade in our credit rating could negatively affect our ability to access capital or increase our borrowing costs;
Events or circumstances could occur which could create bad publicity for us or for the types of merchandise offered in
our stores which may negatively impact our business results including our sales;
Fluctuating commodity prices, including but not limited to diesel fuel and other fuels used by utilities to generate
power, may affect our gross profit and operating profit margins;
Infringement of our intellectual property, including the Big Lots trademarks, could dilute their value; and
Other risks described from time to time in our filings with the SEC.

Item 1B. Unresolved Staff Comments

None.

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Item 2. Properties

Retail Operations

All of our stores are located in the U.S., predominantly in strip shopping centers, and have an average store size of
approximately 32,700 square feet, of which an average of 22,700 is selling square feet. For additional information about the
properties in our retail operations, see the discussion under the caption “Real Estate” in “Item 1. Business” and under the
caption “Real Estate” in MD&A in this Form 10-K.

The average cost to open a new store in a leased facility during 2020 was approximately $1.7 million, including the cost of
construction, fixtures, and inventory. All of our stores are leased, except for the 50 stores we own in the following states:

State

California

Colorado

Florida

Louisiana

Michigan

New Mexico

Ohio

Texas

Total

Stores Owned

Additionally, we own two closed sites which we are not currently operating and one of those sites is available for sale. Since
these owned sites are no longer operating as active stores, they have been excluded from our store counts at January 30, 2021.

Store leases generally obligate us for fixed monthly rental payments plus the payment, in most cases, of our applicable portion
of real estate taxes, common area maintenance costs (“CAM”), and property insurance. Some leases require the payment of a
percentage of sales in addition to minimum rent. Such payments generally are required only when sales exceed a specified
level. Our typical store lease is for an initial minimum term of approximately ten years with multiple five-year renewal options.
Twenty-six store leases have sales termination clauses that allow us to exit the location at our option if we do not achieve
certain sales volume results.

The following table summarizes the number of store lease expirations in each of the next five fiscal years and the total
thereafter. As stated above, many of our store leases have renewal options. The table also includes the number of leases that are
scheduled to expire each year that do not have a renewal option. The table includes leases for stores with more than one lease
and leases for stores not yet open and excludes 18 month-to-month leases and 50 owned locations.

Fiscal Year:

Expiring Leases

Leases Without
Options

2021

2022

2023

2024

2025

Thereafter

245

204

235

190

204

267

Warehouse and Distribution

At January 30, 2021, we leased and operated approximately 9.0 million square feet of distribution center and warehouse space
in five distribution facilities strategically located across the United States. In the first quarter of 2020, we completed the
transition of operations from our former Rancho Cucamonga, CA distribution center to our Apple Valley, CA distribution
center, which we opened in the fourth quarter of 2019. The regional distribution centers utilize warehouse management
technology, which we believe enables highly accurate and efficient processing of merchandise from vendors to our retail stores.
The combined output of our regional distribution centers was approximately 2.4 million merchandise cartons per week in 2020.

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Certain vendors deliver merchandise directly to our stores when it supports our operational goal to deliver merchandise from
our vendors to the sales floor in the most efficient manner. We operate an e-commerce fulfillment center out of our Columbus,
OH warehouse. In 2020, to supplement our Columbus, OH e-commerce fulfillment center, we began fulfilling direct-ship e-
commerce orders from 47 of our store locations, which we strategically selected based on geographic location, size, and other
relevant factors.

Distribution centers and warehouse space, and the corresponding square footage of the facilities, by location at January 30,
2021, were as follows:

Location

Year Opened

Total Square Footage

Number of Stores Served

(Square footage in thousands)

Columbus, OH

Montgomery, AL

Tremont, PA

Durant, OK

Apple Valley, CA

Total

Corporate Office

1989

1996

2000

2004

2019

3,559

1,411

1,295

1,297

1,416

8,978

323

304

310

253

218

1,408

In 2018, we moved our corporate headquarters to a new leased facility within Columbus, Ohio. In 2019, we exercised our
purchase option to acquire our headquarters facility and completed the purchase transaction in October 2019.

Item 3. Legal Proceedings

For information regarding certain legal proceedings to which we have been named a party or are subject, see note 9 to the
accompanying consolidated financial statements.

Item 4. Mine Safety Disclosures

None.

Supplemental Item. Executive Officers of the Registrant

Our executive officers at March 30, 2021 were as follows:

Name
Bruce K. Thorn

Gene Eddie Burt

Andrej Mueller

Age Offices Held
53

President and Chief Executive Officer

55 Executive Vice President, Chief Supply Chain Officer

44 Executive Vice President, Strategy and Chief Customer Officer

Nicholas E. Padovano

57 Executive Vice President, Chief Stores Officer

Jack A. Pestello

51 Executive Vice President, Chief Merchandising Officer

Jonathan E. Ramsden

56 Executive Vice President, Chief Financial Officer and Chief

Administrative Officer

Officer Since
2018

2020

2019

2014

2020

2019

Ronald A. Robins, Jr.

57 Executive Vice President, Chief Legal and Governance Officer, General

2015

Counsel and Corporate Secretary

Michael A. Schlonsky

54 Executive Vice President, Chief Human Resources Officer

2000

Bruce K. Thorn is our President and Chief Executive Officer. Before joining Big Lots in September 2018, he served as
President and Chief Operating Officer of Tailored Brands, Inc., a leading specialty retailer of men’s tailored clothing and
formalwear, from 2015 to 2018. Mr. Thorn also held various enterprise-level roles with PetSmart, Inc., most recently as
Executive Vice President, Store Operations, Services and Supply Chain, as well as leadership positions with Gap, Inc., Cintas
Corp, LESCO, Inc. and The United States Army.

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Gene Eddie Burt is responsible for our supply chain and logistics. He was promoted to Executive Vice President, Chief Supply
Chain Officer in January 2021 after serving as our Senior Vice President, Supply Chain since joining us in March 2019. Prior to
joining us, Mr. Burt served as the Executive Vice President of Merchandising and Supply Chain at GNC Holdings, a specialty
nutrition retailer. Additionally, Mr. Burt spent eight years with PetSmart, Inc., in multiple Vice President and Senior Vice
President roles focusing on distribution, transportation, supply chain, and real estate development. His experience also includes
logistics and supply chain roles with Tuesday Morning Corporation and Home Depot, Inc..

Andrej Mueller is responsible for business strategy and marketing. Mr. Mueller was promoted to Executive Vice President,
Strategy and Chief Customer Officer in May 2020. Mr. Mueller joined us in October 2019 as Executive Vice President,
Business Strategy. Prior to joining us, Mr. Mueller spent 18 years at Boston Consulting Group, an international management
consulting firm, where he most recently was a partner and managing director. He has over 15 years of experience in the
consumer products sector across a broad range of categories including personal care, snacks, beverages, cheese and dairy, and
durable goods. He has worked in both developed and developing trade environments in Western and Eastern Europe, Russia,
the Middle East, South Africa, and Latin America.

Nicholas E. Padovano is responsible for store operations and customer engagement. He was promoted to Executive Vice
President, Chief Stores Officer in March 2021. Mr. Padovano joined us in 2014 as Senior Vice President, Store Operations.
Prior to joining us, Mr. Padovano was an executive at the Hudson Bay Company, a department store retailer, where he was
responsible for store operations of the Bay and Zellers brands. Additionally, Mr. Padovano served as Head of Stores,
Distribution and Supply Chain for Lowes Canada, a home improvement retailer.

Jack A. Pestello is responsible for merchandising and global sourcing, merchandise presentation, and merchandise planning and
allocation. Mr. Pestello joined us in July 2020 as Executive Vice President, Chief Merchandising Officer following seven years
in leadership roles at Walmart Inc., an international retailer, where he most recently served as Senior Vice President and
General Merchandise Manager for Walmart Inc.’s grocery business, after having served as Senior Vice President, Private
Brands and Vice President of Walmart Inc’s International Division. Additionally, Mr. Pestello has previously served in
leadership roles with Woolworths Group Ltd., an international retailer, and Daymon Worldwide, Inc., an international retail
branding and sourcing consultant.

Jonathan E. Ramsden is responsible for financial reporting and controls, financial planning and analysis, treasury, risk
management, tax, internal audit, investor relations, real estate, and asset protection. Mr. Ramsden joined us in August 2019 as
Executive Vice President, Chief Financial Officer and Chief Administrative Officer. Prior to joining us, Mr. Ramsden served
for over seven years with Abercrombie & Fitch Co., an apparel retailer, as Chief Financial Officer and then later Chief
Operating Officer. Additionally, Mr. Ramsden spent 10 years as Chief Financial Officer of TBWA Worldwide, a global
marketing services group, after having served as Controller of TBWA’s parent, Omnicom Group Inc.

Ronald A. Robins, Jr. is responsible for legal affairs, corporate governance and related matters. Mr. Robins was promoted to
Executive Vice President in September 2019, and now serves as the Chief Legal and Governance Officer. Prior to that, Mr.
Robins served as Senior Vice President, General Counsel and Corporate Secretary since joining us. Prior to joining us, Mr.
Robins was a partner at Vorys, Sater, Seymour and Pease LLP and also previously served as General Counsel, Chief
Compliance Officer, and Secretary of Abercrombie & Fitch Co., an apparel retailer.

Michael A. Schlonsky is responsible for talent management and oversight of human resources. He was promoted to Executive
Vice President in August 2015, and now serves as the Chief Human Resources Officer. He was promoted to Senior Vice
President, Human Resources in August 2012 and promoted to Vice President, Associate Relations and Benefits in 2010. Prior
to that, Mr. Schlonsky was promoted to Vice President, Associate Relations and Risk Management in 2005. Mr. Schlonsky
joined us in 1993 as Staff Counsel and was promoted to Director, Risk Management in 1998, and to Vice President, Risk
Management and Administrative Services in 2000.

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Part II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity

Securities

Our common shares are listed on the New York Stock Exchange (“NYSE”) under the symbol “BIG.”

The following table sets forth information regarding our repurchase of common shares during the fourth fiscal quarter of 2020:

(In thousands, except price per share data)

Period

November 1, 2020 - November 28, 2020

November 29, 2020 - December 26, 2020

December 27, 2020 - January 30, 2021

Total

(1)

(a) Total
Number of
Shares
Purchased (1)(2)
3

(d) Approximate
Dollar Value of
Shares that May
Yet Be Purchased
Under the Plans or
Programs

(b) Average
Price Paid per
Share (1)(2)

1,010

561

1,574

47.47

45.30

48.31

46.38

— $

1,009

561

1,570 $

400,000

354,305

327,167

The 2020 Repurchase Authorization is comprised of an August 27, 2020 authorization by our Board of Directors for
the repurchase of up to $500.0 million of our common shares. During the fourth quarter of 2020, we purchased
approximately 1.6 million of our common shares for approximately $72.8 million under the 2020 Repurchase
Authorization. The 2020 Repurchase Authorization has no scheduled termination date.

(2)

In November 2020, December 2020, and January 2021, in connection with the vesting of certain outstanding restricted
stock units, we acquired 2,764, 752, and 11 of our common shares, respectively, which were withheld to satisfy
minimum statutory income tax withholdings.

At the close of trading on the NYSE on March 26, 2021, there were approximately 849 registered holders of record of our
common shares.

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The following graph and table compares, for the five fiscal years ended January 30, 2021, the cumulative total shareholder
return for our common shares, the S&P 500 Index, and the S&P 500 Retailing Index. Measurement points are the last trading
day of each of our fiscal years ended January 28, 2017, February 3, 2018, February 2, 2019, February 1, 2020 and January 30,
2021. The graph and table assume that $100 was invested on January 30, 2016, in each of our common shares, the S&P 500
Index, and the S&P 500 Retailing Index and reinvestment of any dividends. The stock price performance on the following
graph and table is not necessarily indicative of future stock price performance.

Indexed Returns

Years Ended

Base Period

January

2016

2017

2018

2019

2020

2021

100.00 $
100.00

127.64 $
120.87

154.50 $
148.47

86.44 $
148.38

77.91 $
180.37

180.46
211.48

309.14

Company / Index
Big Lots, Inc.
S&P 500 Index

S&P 500 Retailing Index

100.00 $

118.55 $

167.52 $

181.29 $

218.65 $

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Item 6. Selected Financial Data

The following statements of operations and balance sheet data have been derived from our consolidated financial statements
and should be read in conjunction with MD&A and the consolidated financial statements and related notes included herein.

(In thousands, except per share amounts and store counts)

2020 (a)

2019 (a)

2018 (a)

2017 (b)

2016 (a)

Net sales

$ 6,199,186 $ 5,323,180 $ 5,238,105 $ 5,264,362 $ 5,193,995

Cost of sales (exclusive of depreciation expense shown separately below)

3,701,800

3,208,498

3,116,210

3,121,920

3,094,576

Fiscal Year

Gross margin

Selling and administrative expenses

Depreciation expense

Gain on sale of distribution centers

Operating profit

Interest expense

Other income (expense)

Income before income taxes

Income tax expense

Net income

Earnings per common share - basic:

Earnings per common share - diluted:

2,497,386

2,114,682

2,121,895

2,142,442

2,099,419

1,965,555

1,823,409

1,778,416

1,723,996

1,730,956

138,336

134,981

124,970

117,093

120,460

(463,053)

(178,534)

—

856,548

334,826

218,509

301,353

248,003

(11,031)

(16,827)

(10,338)

(6,711)

(5,091)

(911)

(451)

(558)

712

844,606

215,415

317,548

207,613

75,084

50,719

295,354

105,522

1,387

244,299

91,471

629,191 $

242,464 $

156,894 $

189,832 $

152,828

16.46 $

16.11 $

6.18 $

6.16 $

3.84 $

3.83 $

4.43 $

4.38 $

3.37

3.32

Weighted-average common shares outstanding:

Basic

Diluted

38,233

39,067

39,244

39,351

40,809

40,962

42,818

43,300

45,316

45,974

Cash dividends declared per common share

1.20 $

1.00 $

0.84

Balance sheet data:

Total assets (c)

Working capital (c)

Cash and cash equivalents

Long-term debt

Shareholders’ equity

Cash flow data:

$ 4,037,257 $ 3,189,281 $ 2,023,347 $ 1,651,726 $ 1,607,707

585,165

559,556

193,129

489,443

432,365

315,784

52,721

46,034

51,176

51,164

35,764

279,464

374,100

199,800

106,400

$ 1,277,731 $

845,464 $

693,041 $

669,587 $

650,630

Cash provided by operating activities

Cash provided by (used in) investing activities

399,349 $

338,970 $

234,060 $

250,368 $

311,925

452,987 $

(74,480) $

(376,473) $

(156,508) $

(84,701)

Store data:

Total gross square footage

Total selling square footage

Stores open at end of the fiscal year

46,008

32,016

1,408

45,453

31,705

1,404

44,500

31,217

1,401

44,638

31,399

1,416

44,570

31,519

1,432

(a) The period presented is comprised of 52 weeks.
(b) The period presented is comprised of 53 weeks.
(c)

In 2019, we adopted Accounting Standards Update 2016-02, Leases (Topic 842). As such, 2020 and 2019 include right-of-
use assets and operating lease liabilities and are not comparable to the other fiscal years presented.

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

The discussion and analysis presented below should be read in conjunction with the accompanying consolidated financial
statements and related notes. Please refer to “Item 1A. Risk Factors” of this Form 10-K for a discussion of forward-looking
statements and certain risk factors that may have a material adverse effect on our business, financial condition, results of
operations, and/or liquidity.

Our fiscal year ends on the Saturday nearest to January 31, which results in some fiscal years with 52 weeks and some with 53
weeks. Fiscal years 2020, 2019, and 2018 were comprised of 52 weeks. Fiscal year 2021 will also be comprised of 52 weeks.

Operating Results Summary

The following are the results from 2020 that we believe are key indicators of our financial condition and results of operations
when compared to 2019.

•
•

•

Net sales increased $876.0 million, or 16.5%.
Comparable sales for stores open at least fifteen months, plus our e-commerce operations, increased $816.1 million, or
16.1%.
Gross margin dollars increased $382.7 million and gross margin rate increased 60 basis points to 40.3% of net sales.
Selling and administrative expenses increased $142.2 million. However, as a percentage of net sales, selling and
administrative expenses decreased 260 basis points to 31.7% of net sales.
Gain on sale of distribution centers increased $284.6 million to $463.1 million resulting from the sale of four
distribution centers in 2020 compared to the sale of one distribution center in 2019.
Operating profit increased $521.7 million to $856.5 million.
Diluted earnings per share increased 161.5% to $16.11 per share, compared to $6.16 per share in 2019.
Our return on invested capital increased to 48.4% from 21.2%.
Cash and cash equivalents increased $506.9 million to $559.6 million compared to $52.7 million in 2019.
Inventory of $940.3 million represented a $19.0 million increase, or 2.1%, from 2019.

•
•
•
•
•
• We acquired 3.8 million of our outstanding common shares for $172.8 million under our 2020 Repurchase

Authorization (as defined below) compared to 1.3 million of our outstanding common shares for $50.0 million, under
share repurchase programs in 2019.

• We declared and paid four quarterly cash dividends in the amount of $0.30 per common share, for a total paid amount

of $47.0 million.

The following table compares components of our consolidated statements of operations as a percentage of net sales:

Net sales
Cost of sales (exclusive of depreciation expense shown separately
below)

Gross margin

Selling and administrative expenses

Depreciation expense

Gain on sale of distribution centers

Operating profit

Interest expense

Other income (expense)

Income before income taxes

Income tax expense

Net income

2020

2019

2018

100.0 %

59.7

40.3

31.7

2.2

(7.5)

13.8

(0.2)

(0.0)

13.6

3.5

60.3

39.7

34.3

2.5

(3.4)

6.3

(0.3)

(0.0)

6.0

1.4

59.5

40.5

34.0

2.4

0.0

4.2

(0.2)

(0.0)

4.0

1.0

10.1 %

4.6 %

3.0 %

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See the discussion below under the caption “2020 Compared To 2019” for additional details regarding the specific components
of our operating results. See our Item 7. Management’s Discussion and Analysis of Financial Condition and Results of
Operations included in our Form 10-K for the year ended February 1, 2020 for a comparison of operating results for 2019 to
operating results for 2018.

In 2020, we recognized a gain on sale of distribution centers of $463.1 million related to the sale and leaseback of four
distribution centers. Additionally, our selling and administrative expenses include $4.0 million of consulting and other costs
associated with the sale and leaseback transactions. The combined gain on sale of distribution centers and associated consulting
and other expenses increased our operating profit by $459.1 million and increased our diluted earnings per share by
approximately $8.75 per share. See note 10 to the accompanying consolidated financial statements for additional information on
the sale and leaseback transactions.

In 2019, our cost of sales includes a $6.0 million charge for impairment of inventory in our greeting cards department, which
we chose to exit in the first quarter of 2019. Additionally, our selling and administrative expenses include $38.3 million of costs
associated with our transformational restructuring initiative, which we refer to as “Operation North Star”, announced in the first
quarter of 2019 and $7.3 million in estimated costs associated with employee wage and hour claims brought against us in the
state of California. We also recognized a gain on sale of distribution center of $178.5 million related to the sale of our Rancho
Cucamonga, CA distribution center which increased our 2019 operating profit by $178.5 million and increased our diluted
earnings per share by approximately $3.47 per share. See note 10 to the accompanying consolidated financial statements for
additional information on this sale transaction.

Operating Strategy

In 2019, the Company completed an initial, comprehensive review of its operating strategy. The outcome of the review was a
multi-year plan for a strategic transformation, which we refer to as “Operation North Star.”

Operation North Star
Operation North Star has three primary objectives:

•
•
•

Drive profitable long-term growth;
Fund the journey; and
Create long-term shareholder value.

Drive profitable long-term growth
The “drive profitable long-term growth” objective of Operation North Star is focused on growing our net sales, which includes:

•

•
•
•
•
•

Strengthening our home offerings (“Home”), which spans our Furniture, Seasonal, and Soft Home merchandise
categories, as a destination for Jennifer;
Growing our own brands, especially our Broyhill® brand;
Growing store traffic;
Responsibly investing in store presentation initiatives to create an easy shopping experience;
Growing our store count; and
Growing our e-commerce sales.

Fund the journey
The “fund the journey” objective of Operation North Star is focused on reducing costs so we can invest those savings in the
growth areas of our business, which includes:

•
•
•
•
•

Expanding our gross margin rate;
Increasing store efficiency and productivity;
Increasing organizational efficiency;
Encouraging a culture of frugality; and
Continuously analyzing our purchasing habits and vendor agreements to ensure we are maximizing our buying power
and making cost-effective decisions.

Create long-term shareholder value
The “create long-term shareholder value” objective is the culmination of our “drive profitable long-term growth” and “fund the
journey” objectives. If we effectively execute the first two objectives of Operation North Star, we believe that we will deliver
value to our shareholders through earnings growth over time. In addition, we continue to optimize our capital allocation to
support Operation North Star initiatives while returning capital to our shareholders, when appropriate.

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Enablers
In recognition of the importance of having the appropriate technology and processes in place to achieve our “drive profitable
long-term growth” and “fund the journey” objectives, we have established several enabler work streams with the following
objectives:
•
•
•

Improve in-store engagement;
Scale supply chain capabilities; and
Nurture a high performance culture.

Operation North Star Progress
In 2020, we successfully completed the following under our Operation North Star strategy:

•
•
•
•
•
•
•
•
•
•

Grew our Broyhill® brand offerings to account for over $400 million of net sales in 2020;
Grew our net store count by four stores, which is our second consecutive year of net store growth;
Implemented our presentation initiatives, The Lot and Queue Line, in approximately 50% of our chain;
Completed our Pantry Optimization project in our full chain of stores;
Developed curbside pickup capabilities for our buy online pick up in store (“BOPIS”) orders;
Partnered with Instacart® and PICKUP® to provide same-day delivery;
Achieved 82% favorable associate engagement rate, which is above our retail industry benchmark;
Increased our customer satisfaction score, which is based on survey results, by 600 bps to approximately 81%
Expanded our gift card offerings to our e-commerce platform and third-party gift card sellers; and
Expanded our e-commerce distribution network by implementing ship-from-store capabilities in 47 of our stores.

Next Steps
In 2021, we plan to implement the following initiatives to achieve our Operation North Star goals:

•
•

•
•
•
•
•

Expand our presentation initiatives, The Lot and Queue Line, to approximately 550 additional stores in our chain;
Expand our distribution network by opening two small-format distribution centers to enable efficient processing of
bulky items and full-pallet shipments;
Implement a space planning tool to improve space productivity and insights;
Expand our Broyhill® offerings to include housewares and kitchen textiles;
Continue to grow our store count;
Update the user interface of our e-commerce platform for easier online shopping; and
Invest in e-commerce analytics tools for better insights into our customers’ online shopping habits.

Merchandising

We focus our merchandising strategy on (1) being the authority on price and value to Jennifer in all of our merchandise
categories and (2) providing a merchandise assortment that surprises and delights her. Under Operation North Star, our
merchandising strategy is also focused on strengthening our Home offerings. Home is an area where we believe Jennifer gives
us the right to play and where we believe we can play to win.

Strengthening Home begins with growing our own brands, particularly the Broyhill® brand, an iconic brand that we acquired in
2018. We launched the Broyhill® brand of product offerings in late 2019 with initial product offerings in our Furniture,
Seasonal, Soft Home, and Hard Home merchandise categories. Available both in-store and online, we believe the Broyhill®
assortment strengthens our Home assortment with a high-quality product offering at a value-based price that Jennifer finds
attractive. In 2020, we expanded our assortment of Broyhill® products and our customers responded positively. Our Broyhill®-
related net sales exceeded $400 million in 2020. In 2021, we plan to expand our Broyhill® assortment to include housewares
and kitchen textiles.

We believe our merchandising strategies for Furniture, Seasonal, and Soft Home position us to surprise and delight Jennifer
with our Home offerings:

•

Our Furniture category primarily focuses on being a destination for our core customer’s home furnishing needs, such
as upholstery, mattresses, case goods, and ready-to-assemble. In Furniture, we believe our competitive advantage is
attributable to our sourcing relationships, our in-store availability, and everyday value offerings. A significant majority
of our offerings in this category consist of replenishable products sold under our own brands or sourced from
recognized brand-name manufacturers. Our long-standing relationships with certain brand-name manufacturers, most
notably in our mattresses and upholstery departments, allow us to work directly with them to create product offerings
specifically for us, which enables us to provide a high-quality product at a competitive price. Additionally, we believe
our “buy today, take home today” practice of carrying in-stock inventory of our core furniture offerings, which allows
Jennifer to take home her purchase at the end of her shopping experience, positively differentiates us from our

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•

competition. We encourage Jennifer to shop and buy our products online anytime and anywhere, and we invite her into
our stores to touch and feel the quality and comfort of our products. Additionally, Jennifer can have furniture delivered
to her door same-day through PICKUP®, our new national delivery partner. We believe that offering a focused
assortment, which is displayed in furniture vignettes, provides Jennifer a solution for decorating her home when
combined with our home décor offerings. Supplementing our merchandising and presentation strategies, we provide
multiple third-party financing options for our customers who may be more challenged for approval in traditional credit
channels. Our financing partners are solely responsible for the credit approval decisions and carry the financial risk.

Our Seasonal category strengthens Home with our patio furniture, gazebos, Christmas trim, and other holiday
departments. We believe we have a competitive advantage in this category by offering trend-right products with a
strong value proposition in our own brands. We have a large selection of samples assembled and displayed throughout
the seasonal section of our store and have packaged the box stock so that it is very easy for Jennifer to purchase and
take home. Much of this merchandise is sourced on an import basis, which allows us to maintain our competitive
pricing. Additionally, our Seasonal category offers a mix of departments and products that surprise and delight by
complementing her outdoor experience and holiday decorating desires. We continue to work with our vendors to
expand the product assortment in our Seasonal category to respond to Jennifer’s evolving wants and needs.

Our Soft Home category complements our Furniture and Seasonal categories in making our stores a destination for a
broader range of Home needs. Over the past several years, we have enhanced our assortment in Soft Home by
allocating more selling space to the category to support a wider range of replenishable, fashion-based products. We
believe that we have a competitive advantage in Soft Home as a result of our trend-right, focused assortment with
improved quality and perceived value, and our ability to furnish Jennifer’s home with décor that complements an in-
store furniture purchase. We have worked to develop a “solutions” approach to complete a room through our cross-
merchandising efforts, particularly color palette coordination, when combining our Soft Home offerings with our
Furniture and Seasonal categories. We believe that this approach helps Jennifer envision how the product can work in
her home and enhances our brand image.

We consider Food, Consumables, Hard Home, and Electronics, Toys, & Accessories as convenience categories:

•

Our Food and Consumables categories focus primarily on catering to Jennifer’s daily essentials by providing reliable
value, consistency, and convenience of product offerings. We believe we possess a competitive advantage in the Food
and Consumables categories based on our sourcing capabilities for closeout merchandise. Manufacturers and vendors
have closeout merchandise for a variety of different reasons, including other retailers canceling orders or going out of
business, production overruns, or marketing or packaging changes. We believe our vendor relationships, along with
our size and financial strength, afford us these opportunities. To supplement our closeout business, we have focused on
improving and expanding our brand name, “never out” product assortment to provide more consistency in those areas
where Jennifer desires consistently available product offerings, such as over-the-counter medications. We believe that
we have added top brands to our “never out” programs in Consumables and that our assortment and value proposition
will continue to differentiate us in this highly competitive industry. In 2020, we reallocated space from the Food
category to the Consumables category through our “Pantry Optimization” initiative, which right-sized our food
assortment, including reducing our refrigerated foods, and allowed us to expand the “never out” Consumables
assortment that Jennifer has told us she loves.

• We believe that our Hard Home and Electronics, Toys, & Accessories categories serve as convenient adjacencies to

our other merchandise categories. Over the past several years, with the exception of apparel, we have intentionally
narrowed our assortments in these categories and reallocated space from these categories to our Home categories.
These categories focus on value, and savings in comparison to competitors, in areas such as food prep, table top, home
maintenance, small appliances, electronics, and apparel. In 2020, we expanded our apparel assortment to include
graphic tees following a successful test during 2019. These graphic tees are primarily displayed in The Lot, but also
appear in other sections of our store. Additionally, during 2020, we took advantage of several well-received closeout
opportunities to expand our apparel offering and we intend to continue seeking apparel closeouts going forward.

Our merchandising management team is aligned with our merchandise categories, and their primary goal is to increase our total
company comparable sales (“comp” or “comps”), which includes stores open at least fifteen months, plus our e-commerce
operations. Our review of the performance of the members of our merchandise management team focuses on comps by
merchandise category, as we believe it is the key metric that will drive our long-term net sales. By focusing on strengthening
our Home offerings, and managing our convenience categories, we believe our merchandise management team can effectively
address the changing shopping behaviors of our customers and implement more focused offerings within each merchandise
category, which we believe will lead to continued comp growth.

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Marketing

The top priority of our marketing activities is to increase our net sales and comps by developing our brand identity as (1) the
authority on price and value for Jennifer and (2) a source of surprise and delight. Over the past few years, we have reviewed our
brand identity to gain further insights into Jennifer’s perception of us and how best to improve the overall effectiveness of our
marketing efforts. Our research has affirmed that Jennifer is deal-driven, enjoys a “treasure hunt,” comes to us for our value-
priced merchandise assortment, and appreciates our ability to assist her in fashioning and furnishing her home so that she can
feel empowered to enjoy the space with family and friends. We believe our strong price value perception and the surprise and
delight factor in our stores enhances our ability to effectively connect with Jennifer in a way that lets her understand when
shopping at Big Lots, she can afford to live Big, while saving Lots.

In an effort to align our messaging with the positive aspects of Jennifer’s perception of our brand, we have focused our
marketing efforts on driving our value proposition in every season and category. We continue to increase our use of social and
digital media outlets, including conducting entire campaigns through these outlets (specifically on Facebook®, Instagram®,
Pinterest®, Twitter®, and YouTube®), to drive an increased understanding of our value proposition with our core customer and
to communicate that message to new potential customers. These outlets enable us to deliver our message directly to Jennifer
and provide her with the opportunity to share direct feedback with us, which can enhance our understanding of what is most
important to her and how we can improve the shopping experience in our stores. Given our customer’s proficiency with mobile
devices and digital media, we focus on communicating with her through those channels.

Our BIG Rewards Program allows us to more effectively incentivize our loyal customers and encourage new membership by
highlighting the significant features and benefits. Our loyalty program rewards Jennifer with a coupon after every third
purchase, a birthday reward offer, and special rewards after large-ticket furniture purchases. Research has shown there is a
direct correlation between loyal, frequent shoppers and a larger basket. We believe that growing the membership base of the
BIG Rewards Program will provide more opportunities to understand and leverage customer behavior through segmentation.
We leverage our rewards program database to gain insights into shopping behaviors, reengage lapsed members, and tailor our
assortment and promotions to Jennifer’s desires. At January 30, 2021, our BIG Rewards Program had nearly 21 million active
members (defined as having made a purchase in the last 12 months) and we are focused on continuing to grow the membership
base of our BIG Rewards Program in 2021.

In addition to electronic, social and digital media, our marketing communication efforts involve a mix of television advertising,
printed ad circulars, and in-store signage. The primary goals of our television advertising are to promote our brand and, from
time to time, promote products or special discounts in our stores. We have also shifted towards using more digital streaming
media in concentrated markets, which allows us to connect more deeply and frequently with Jennifer. Our printed advertising
circulars and our in-store signage initiatives focus on promoting our value proposition on our unique merchandise offerings.

Shopping Experience

One of the core objectives of Operation North Star is to responsibly invest in store presentation initiatives that create an easy
shopping experience for our customers.

From 2017 through 2019, we invested heavily in a presentation initiative we called “Store of the Future,” which moved our
Furniture department to the front center of the store with Seasonal and Soft Home on either side and moved Food and
Consumables to the back of the store, while keeping them visible with clear sight lines from the entrance of the store.
Additionally, the Store of the Future concept included improved lighting and new flooring. Prior to 2020, we intended to
expand the Store of the Future concept to our entire chain of stores. In 2020, we reevaluated our investment in the Store of the
Future concept and chose to shift our focus to smaller scale initiatives, such as The Lot and Queue Line initiatives discussed
below, that we believe will have a higher return on our investment. Therefore, we do not plan to invest in the Store of the
Future concept going forward.

In 2020, we implemented a presentation solution we call “The Lot” in approximately 50% of our stores. We designed The Lot
to add incremental selling space to our store layout and display items from various merchandise categories placed in vignettes
to promote life’s occasions, such as fall tailgating. The Lot offers surprise and delight to Jennifer by demonstrating the breadth
and value of products that we offer in one convenient experience. Our expectation is to re-introduce Jennifer to the “treasure”
that we offer, while removing the challenges of the “hunt” from the experience. In 2021, we plan to expand The Lot to
approximately 550 additional stores.

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Also in 2020, we implemented a streamlined checkout experience in approximately 50% of our stores that we call the “Queue
Line,” which features a reconfigured checkout design. The Queue Line both enhances the customer experience and builds a
bigger basket as our customers walk by new and expanded convenience offerings as they check out. Furthermore, the Queue
Line creates additional selling space for our Furniture merchandise category. In 2021, we plan to expand the Queue Line to
approximately 550 additional stores.

As discussed above in “Merchandising,” in 2020, we reallocated space from the Food category to the Consumables category as
part of our Pantry Optimization project. This project streamlined our Food assortment and added more staple Consumables
offerings to provide the consistency that drives our customers to keep coming back to our stores. We believe this initiative has
resonated well with our customers and we are continuing to refine our assortments to meet her needs.

In addition to our efforts to improve the in-store shopping experience, Operation North Star is focused on improving our e-
commerce shopping experience and growing e-commerce net sales. Our efforts are centered around removing barriers, creating
a fun and easy experience, and expanding the items available for purchase online. Over the last few years, we have made a
concerted effort to increase our “extended aisle” assortments on our e-commerce platform, which offer additional fabric and
color options on products in our Furniture and Seasonal categories, including items only available online. In 2019, we launched
our BOPIS program nationwide, which has allowed us to nearly double the available SKUs online. In 2020, we launched
curbside pickup to supplement our BOPIS service, began selling gift cards online, reduced shipping times by expanding our
distribution network to include ship-from-store capabilities at 47 stores around the country, and introduced same-day delivery
of all items available in our stores through our partnerships with Instacart® and PICKUP®. In 2021, we plan to update the user
interface of our e-commerce site to create an easier shopping experience and implement new analytics tools so we can gain
better insights into our customer’s online shopping habits to fuel future improvements to the user experience.

Lastly, we continue to offer a private label credit card and our Easy Leasing lease-to-own solutions for customer financing and
a coverage/warranty program, focused on our Furniture and Seasonal merchandise categories, to round out Jennifer’s
experience. Our private label credit card provides access to revolving credit, through a third party, for use on both larger ticket
items and daily purchases. Our Easy Leasing lease-to-own program provides a single use opportunity for access to third-party
financing. Our coverage/warranty program provides a method for obtaining multi-year warranty coverage for Furniture
purchases. In 2021, we plan to expand our coverage/warranty program to include additional merchandise categories and offer
coverage/warranty plans on our e-commerce platform.

Real Estate

Historically, we had determined that our average store size of approximately 22,000 selling square feet was appropriate for us
to provide our core customer with a positive shopping experience and properly present a representative assortment of
merchandise categories that our core customer finds meaningful. As we have shifted our net sales to a higher proportion of
Furniture, we have chosen to gradually expand the size of our new stores to accommodate the Furniture vignettes.

From 2017 through 2019, we remodeled existing stores and opened new stores in our Store of the Future layout. In 2020, we
reevaluated our investment in the Store of the Future concept and chose to shift our focus to smaller scale initiatives that we
believe will generate higher returns.

Our current real estate development plans include a focus on growing our store count, which we expect to increase by 15 to 25
stores in 2021, and refreshing select older stores in our fleet, which includes low-cost updates to paint, flooring, restrooms, and
exterior signage.

During 2021, we anticipate opening 50 to 60 stores and closing approximately 35 of our existing locations, which includes
approximately 20 relocations within the same market. As discussed in “Item 2. Properties,” of this Form 10-K, we have 245
store leases that will expire in 2021. The majority of our 2021 closings will involve the relocation of stores to improved
locations within the same local market, with the balance resulting from a lack of renewal options or our belief that a location’s
sales and operating profit volume are not strong enough to warrant additional investment in the location. As part of our
evaluation of potential store closings, we consider our ability to transfer sales from a closing store to other nearby locations and
generate a better overall financial result for the geographic market. For our remaining store locations with fiscal 2021 lease
expirations, we expect to exercise our renewal option or negotiate lease renewal terms sufficient to allow us to continue
operations and achieve an acceptable return on our investment. As we increase our capital investment in our stores, we have
collaborated with our landlords to negotiate longer lease terms and renewal options.

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2020 COMPARED TO 2019

Net Sales
Net sales by merchandise category (in dollars and as a percentage of total net sales), net sales change (in dollars and
percentage), and comps in 2020 compared to 2019 were as follows:

(In thousands)

Furniture

Soft Home

Consumables

Seasonal

Food

Electronics, Toys, & Accessories

Hard Home

Net sales

2020

2019

Change

Comps

$ 1,736,932

28.0 % $ 1,427,129

26.8 % $ 309,803

21.7 %

20.5 %

1,048,970

932,259

815,378

798,950

438,450

428,247

16.9

15.0

13.2

12.9

7.1

6.9

853,434

803,593

773,720

757,351

344,947

363,006

16.0

15.1

14.6

14.2

6.5

6.8

195,536

128,666

41,658

41,599

93,503

65,241

22.9

16.0

5.4

5.5

27.1

18.0

22.8

16.6

5.4

5.6

26.9

18.4

$ 6,199,186

100.0 % $ 5,323,180

100.0 % $ 876,006

16.5 %

16.1 %

We periodically assess and make minor adjustments to our product hierarchy, which can impact the roll-up to our merchandise
categories. Our financial reporting process utilizes the most current product hierarchy in reporting net sales by merchandise
category for all periods presented. Therefore, there may be minor reclassifications of net sales by merchandise category
compared to previously reported amounts.

Net sales increased $876.0 million, or 16.5%, to $6,199.2 million in 2020, compared to $5,323.2 million in 2019. The increase
in net sales was due to comp increases in each of our merchandise categories, with an overall comp increase of 16.1%, which
increased net sales by $816.1 million. Additionally, there was a $59.9 million increase in net sales from our non-comparable
stores, driven by increased sales in our new and relocated stores compared to our closed stores and the net increase of four
stores in 2020.

In 2020, we experienced a favorable impact to net sales due to our position as an “essential retailer” during the COVID-19
pandemic and an increased demand for our home products as customers were spending more time at home. In the first quarter,
we experienced a significant increase in demand for “Essential Products”, which we define as food, consumables, health
products, and pet supplies. The primary impact was in our Food and Consumables merchandise categories as customers began
stocking up on Essential Products as concern over the COVID-19 pandemic grew. From the end of the first quarter through the
second quarter of 2020, we experienced a surge in demand in our Furniture, Seasonal, Soft Home, and Hard Home categories
driven by the release of government stimulus and unemployment funds under the Coronavirus Aid, Relief, and Economic
Security (CARES) Act of 2020. Following the release of government stimulus and unemployment funds, a “nesting” trend
emerged. As a result of spending more time at home, customers chose to invest more in their home which drove a continued
demand in our Furniture, Soft Home, and Hard Home through the balance of 2020. We experienced earlier-than-usual
Christmas holiday sales late in the third quarter of 2020 and early in the fourth quarter of 2020, which, combined with an
intentional reduction in Christmas inventory purchases due to demand uncertainty in the Spring of 2020, led to lower levels of
Christmas seasonal inventory and had an unfavorable impact on net sales early in the fourth quarter of 2020. Late in the fourth
quarter, we experienced a favorable impact to net sales due to the release of a second round of government stimulus funds.

In 2020, we introduced The Lot and the Queue Line initiatives in approximately 50% of our stores, which also contributed to
the increased net sales and positive comps compared to 2019. Additionally, the impact of our Pantry Optimization project,
which was completed late in the third quarter of 2020, contributed to the increased net sales and positive comps in comparison
to 2019.

We believe we have successfully retained the new customers we attracted as a result of our position as an essential retailer and
we have seen a positive response to our strategic initiatives and our product assortment’s alignment with customer demand.

All of our merchandise categories generated increased net sales and positive comps in 2020 compared to 2019:

•

Our Furniture and Soft Home categories experienced increased net sales and positive comps during 2020, driven by
our customers choosing to invest in home furnishings and home decor as a result of nesting trends throughout 2020, as
well as a surge in demand following the release of government stimulus and unemployment funds in the second and
fourth quarters of 2020. Additionally, customers have responded positively to our brand-name mattress assortment and
our Broyhill® assortments.

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•

The increased sales and positive comps in our Food and Consumables categories were driven primarily by a surge in
demand for Essential Products during the COVID-19 pandemic. Additionally, the Consumables category benefited
from the completion of our Pantry Optimization project, which reallocated linear square footage from the Food
category to the Consumables category.
Our Seasonal category experienced an increase in net sales and positive comps driven by the summer, lawn & garden,
and harvest departments. These increases were primarily driven by nesting trends, as our customers have spent more
time in their homes throughout the COVID-19 pandemic, which increased their desire to decorate for holidays and
invest in outdoor furniture and lawn maintenance. Additionally, we benefited from increased sales of high-ticket items
such as patio furniture following the release of government unemployment and stimulus funds in mid-April 2020. Our
customers have also continued to respond well to our Broyhill® patio furniture assortments. The increase in net sales
and comps in our Seasonal category was partially offset by a decrease in net sales and comps in our Christmas
department, which was due to our decision in the Spring of 2020 to reduce our Christmas inventory purchases based
on discretionary spending concerns connected with the COVID-19 pandemic. While we worked to increase our
Christmas purchases when pandemic-related economic concerns subsided, we were unable to reach inventory levels
that met our pre-pandemic planned purchases and customer demand.
The increase in net sales and comps in the Electronics, Toys, & Accessories category was driven by our toys, apparel,
and accessories departments. The increase was primarily due to the introduction of these products into The Lot and
Queue line presentations in 2020.

• Hard Home experienced increased sales and positive comps driven by an increase in our small appliances, table top,

and food preparation departments. Despite space reductions and the exit from our greeting card offering, we
experienced high demand for products that improve our customers’ at-home dining experience.

Gross Margin
Gross margin dollars increased $382.7 million, or 18.1%, to $2,497.4 million in 2020, compared to $2,114.7 million in
2019. The increase in gross margin dollars was primarily due to an increase in net sales, which increased gross margin dollars
by $348.0 million. Gross margin as a percentage of net sales, or gross margin rate, increased 60 basis points to 40.3% in 2020
compared to 39.7% in 2019. The gross margin rate increase was primarily due to a lower markdown rate, higher comps in our
high margin merchandise categories, and the absence of a $6.0 million impairment of inventory in our greeting cards
department, which we chose to exit in the first quarter of 2019. The increase in gross margin rate was partially offset by higher
shrink costs and lower initial mark-up compared to 2019, as our receipts skewed towards domestic purchases, which carry a
lower average initial markup. Additionally, our lower initial markup was driven by a significant increase in inbound freight
costs in the fourth quarter of 2020, which resulted from transportation capacity restraints and processing backlogs at our
distribution centers as we worked to restore inventory levels.

Selling and Administrative Expenses
Selling and administrative expenses were $1,965.6 million in 2020, compared to $1,823.4 million in 2019. The increase of
$142.2 million, or 7.8%, was primarily due to $59.2 million in distribution and transportation costs, store-related payroll of
$50.5 million, bonus expense of $34.3 million, $13.1 million of share-based compensation expense, $9.1 million of store
occupancy expense, advertising expense of $7.6 million, transaction fees of $8.8 million, $7.0 million in stores supplies
expense, $4.6 million of employee retirement and separation costs, $4.0 million of sale and leaseback related expenses, and
$3.7 million of proxy contest-related costs, partially offset by the absence of $38.3 million in costs incurred for our
transformational restructuring initiative, the absence of a $7.3 million loss contingency recorded in 2019, and a decrease in
health benefit costs of $16.4 million. The increase in distribution and transportation expenses was due to the transition from our
Rancho Cucamonga, CA distribution center to our Apple Valley, CA distribution center, rent expense on our leased distribution
centers, higher outbound rates and volume to support our increased net sales, and a temporary $2 per hour wage increase that
began in March 2020 and continued through early July 2020 for most of our non-exempt workforce during the COVID-19
coronavirus pandemic. The increase in store-related payroll was driven by additional payroll hours allocated to stores to support
the increased net sales in 2020 and the aforementioned temporary $2 per hour wage increase. The increase in bonus expense
was driven by increased performance in 2020 relative to our quarterly and annual operating plans as compared to our
performance in 2019 relative to our quarterly and annual operating plans, and a one-time discretionary bonus in the second
quarter of 2020 to recognize our non-exempt associates in our stores and distribution centers. Our share-based compensation
expense increased as a result of higher grant date fair value and higher estimated performance for the 2018 performance share
units (“PSUs”) for which we recognized expense during 2020, compared to the 2017 PSUs for which expense was recognized
in 2019. Additionally, our share-based compensation expense increased due to our grant in 2020 of performance share units
with a restriction feature to certain members of management, which vest based on the achievement of share price performance
goals and a minimum service requirement of one year (“PRSUs”). We began recognizing expense for PRSUs in 2020,
compared to our PSU awards, which typically have a deferred grant date. The increase in store occupancy expense was due to
new stores opened since the end of 2019, which have higher rents than the stores closed, and normal rent increases resulting
from lease renewals. Advertising expense increased due to increased investments in social media engagement and rewards-

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based marketing. The increase in transaction fees, which includes credit card fees, debit card fees, and other transaction-driven
costs, was primarily due to the increased net sales in 2020 compared to 2019. The increase in store supplies expense was driven
by safety and cleaning supplies, such as personal protective equipment, hand sanitizer, and disinfectants, distributed to our
stores in 2020 to ensure a safe environment for our customers and associates during the COVID-19 coronavirus pandemic. The
employee retirement and separation costs were primarily driven by the retirement and separation of senior executives in 2020.
The sale and leaseback related expenses were due to consulting costs incurred in connection with the completion of the sale and
leaseback transactions for four distribution centers in the second quarter of 2020. The proxy contest-related costs were
comprised of legal, public relations, and advisory fees, and settlement costs incurred to resolve a proxy contest in the first
quarter of 2020. The costs incurred for our transformational restructuring initiative consisted of consulting expenses and
employee separation costs recognized in 2019. The loss contingency recorded in 2019 was associated with wage and hour
claims in the state of California. The decrease in health benefits costs was primarily due to lower benefits claim volume in 2020
as many medical care providers suspended non-emergency care and procedures during 2020 due to the COVID-19 coronavirus
pandemic.

As a percentage of net sales, selling and administrative expenses decreased by 260 basis points to 31.7% in 2020 compared to
34.3% in 2019.

Depreciation Expense
Depreciation expense increased $3.3 million to $138.3 million in 2020 compared to $135.0 million in 2019. The increase was
primarily driven by the full-year impact of investments in our Apple Valley, CA distribution center, new store build-outs and
Store of the Future remodels in 2019, and the acquisition of our corporate headquarters facility in the third quarter of 2019,
partially offset by a decrease resulting from the sale of four distribution centers in 2020.

Depreciation expense as a percentage of net sales decreased by 30 basis points compared to 2019.

Gain on Sale of Distribution Centers
The gain on sale of distribution center in 2020 was $463.1 million, compared to $178.5 million in 2019. The gain on sale of
distribution centers in 2020 was attributable to the sale and leaseback of our distribution centers in Durant, OK; Tremont, PA;
Montgomery, AL; and Columbus, OH. The gain on sale of distribution centers in 2019 was attributable to the sale of our
Rancho Cucamonga, CA distribution center.

Operating Profit
Operating profit was $856.5 million in 2020 compared to $334.8 million in 2019. The increase in operating profit was primarily
driven by the items discussed in the “Net Sales,” “Gross Margin,” “Selling and Administrative Expenses,” “Depreciation
Expense,” and “Gain on Sale of Distribution Centers” sections above. In summary, operating profit was driven by the gain on
the sale of our distribution centers and an increase in net sales and gross margin rate, partially offset by increases in selling and
administrative expenses and depreciation expense.

Interest Expense
Interest expense decreased $5.8 million, to $11.0 million in 2020 compared to $16.8 million in 2019. The decrease in interest
expense was driven by lower total average borrowings (including finance leases and the sale and leaseback financing liability)
and a lower average interest rate on our revolving debt. We had total average borrowings of $257.6 million in 2020 compared
to total average borrowings of $461.6 million in 2019. The decrease in total average borrowings was driven by our repayment
of all outstanding debt under the 2018 Credit Agreement following the sale and leaseback transactions completed in the second
quarter of 2020, partially offset by the timing of our entry into a $70 million term note on August 7, 2019 (“2019 Term Note”),
as the 2019 Term Note was only in place for the second half of 2019, and the establishment of a financial liability in connection
with the sale and leaseback transactions for our distribution centers in the second quarter of 2020. The average interest rate on
our revolving debt, which is variable based on LIBOR and our credit rating, decreased due to a significant decline in the
LIBOR rate in 2020 as a result of the COVID-19 coronavirus pandemic, partially offset by the impact of a decrease in our
credit rating during the first quarter of 2020.

Other Income (Expense)
Other income (expense) was $(0.9) million in 2020, compared to $(0.5) million in 2019. The change was primarily driven by
unrealized losses on our diesel fuel derivatives due to a sharp decline in current and forward diesel fuel prices in the first quarter
of 2020 as a result of the COVID-19 pandemic.

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Income Taxes
Our effective income tax rate in 2020 and 2019 was 25.5% and 23.6%, respectively. The increase in the effective income tax
rate was primarily attributable to the impact of the sale of our distribution centers. In 2019, the tax rate on the gain on the sale of
our California distribution center was less than our normalized rate, thereby reducing our effective tax rate in 2019. In 2020, the
tax rate on the gain on sale of our non-California distribution centers was similar to our normalized tax rate, thereby having a
more muted impact on our effective tax rate in 2020. Additionally, the impact of our discrete items was similar in value in 2020
compared to 2019, but their impact on the tax rate was significantly curtailed in 2020 by the significant increase in income
before income taxes in 2020 as compared to 2019.

2021 Guidance
In March 2020, the World Health Organization declared COVID-19 a pandemic. The continued spread of the virus throughout
the U.S. has significantly impacted the U.S. economy, which has reduced our visibility to future financial results. In 2021, we
expect that our financial performance will continue to be significantly impacted by the COVID-19 pandemic, which includes
the impact of volatility in consumer sentiment and potential impact of future government stimulus. Therefore, at this time, the
Company does not believe it has sufficient visibility to provide full year guidance for 2021.

Based on information available as of March 5, 2021, and excluding consideration of potential share repurchase activity and
government stimulus and/or enhanced unemployment funds released during the first quarter of 2021, we expect the following in
the first quarter of 2021:

•
•
•
•

Comparable sales increase in the low single digits;
Gross margin rate in the range of flat to slightly above last year, despite higher anticipated freight costs;
Selling and administrative expenses above last year; and
Diluted earnings per share in the range of $1.30 to $1.45.

Capital Resources and Liquidity
On August 31, 2018, we entered into the 2018 Credit Agreement, which provides for a $700 million five-year unsecured credit
facility. The 2018 Credit Agreement expires on August 31, 2023. Borrowings under the 2018 Credit Agreement are available
for general corporate purposes, working capital, and to repay certain indebtedness. The 2018 Credit Agreement includes a $30
million swing loan sublimit, a $75 million letter of credit sublimit, a $75 million sublimit for loans to foreign borrowers, and a
$200 million optional currency sublimit. The interest rates, pricing and fees under the 2018 Credit Agreement fluctuate based
on our debt rating. The 2018 Credit Agreement allows us to select our interest rate for each borrowing from multiple interest
rate options. The interest rate options are generally derived from the prime rate or LIBOR. We may prepay revolving loans
made under the 2018 Credit Agreement without penalty. The 2018 Credit Agreement contains financial and other covenants,
including, but not limited to, limitations on indebtedness, liens and investments, as well as the maintenance of two financial
ratios – a leverage ratio and a fixed charge coverage ratio. The covenants of the 2018 Credit Agreement do not restrict our
ability to pay dividends. Additionally, we are subject to cross-default provisions associated with the synthetic lease for our
distribution center in Apple Valley, CA. A violation of any of the covenants could result in a default under the 2018 Credit
Agreement that would permit the lenders to restrict our ability to further access the 2018 Credit Agreement for loans and letters
of credit and require the immediate repayment of any outstanding loans under the 2018 Credit Agreement. At January 30, 2021,
we were in compliance with the covenants of the 2018 Credit Agreement.

On August 7, 2019, we entered into the 2019 Term Note, a $70 million term note agreement, which is secured by the equipment
at our California distribution center. The 2019 Term Note will expire on May 7, 2024. We are required to make monthly
payments over the term of the 2019 Term Note and are permitted to prepay the note, subject to penalties, at any time. The
interest rate on the note is fixed at 3.3%.

The primary source of our liquidity is cash flows from operations and borrowings under the 2018 Credit Agreement, as
necessary. Our net income and, consequently, our cash provided by operations are impacted by net sales volume, seasonal sales
patterns, and operating profit margins. Our net sales are typically highest during the nine-week Christmas selling season in our
fourth fiscal quarter. However, due to demand volatility we have experienced during the COVID-19 pandemic, the seasonality
of our 2020 results differed from historical experience and our 2021 results may differ from historical experience. Generally,
our working capital requirements peak late in our third fiscal quarter or early in our fourth fiscal quarter. We have historically
funded those requirements with borrowings under our credit facility. However, as a result of the sale and leaseback transactions
completed in the second quarter of 2020 and our strong cash flow from operations in 2020, we funded our working capital
requirements for the second half of 2020 without borrowing under the 2018 Credit Agreement. At January 30, 2021, we had no
borrowings under the 2018 Credit Agreement, and the borrowings available under the 2018 Credit Agreement were $693.3
million, after taking into account the reduction in availability resulting from outstanding letters of credit totaling $6.7 million.
Currently, we do not anticipate borrowing under the 2018 Credit Agreement during 2021. Cash requirements include among
other things, capital expenditures, working capital needs, interest payments, and other contractual commitments.

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As a measure to secure additional liquidity during a period of economic uncertainty caused by the COVID-19 pandemic, on
June 12, 2020, we completed the sale and leaseback transactions relating to our distribution centers located in Columbus, OH;
Durant, OK; Montgomery, AL; and Tremont, PA for an aggregate selling price of $725 million. Due to sale-leaseback
accounting requirements, the proceeds received in the transactions were allocated between proceeds on the sale of the
distribution centers and financing proceeds. Accordingly, aggregate net proceeds on the sales of the distribution centers was
$586.9 million and the aggregate gain on the sales was $463.1 million. The remainder of consideration received was financing
liability proceeds of $134.0 million. See note 10 to the accompanying consolidated financial statements for additional
information on the sale and leaseback transactions.

In 2020, we invested a portion of the proceeds from the sale and leaseback of the four distribution centers in money market
funds, commercial paper, and treasury bills, of which only money market funds were held at January 30, 2021. These highly
liquid investments were recorded in cash and cash equivalents in our consolidated balance sheets at their fair value. Our
aggregate money market fund investments were $175.1 million and $0 at January 30, 2021 and February 1, 2020, respectively.

As a result of the sale and leaseback transactions and our strong cash flow from operations during 2020, our cash and cash
equivalents increased $506.9 million to $559.6 million compared to 2019.

In August 2020, our Board of Directors authorized the repurchase of up to $500 million of our common shares (“2020
Repurchase Authorization”). Pursuant to the 2020 Repurchase Authorization, we are authorized to repurchase shares in the
open market and/or in privately negotiated transactions at our discretion, subject to market conditions and other factors.
Common shares acquired through the 2020 Repurchase Authorization will be available to meet obligations under our equity
compensation plans and for general corporate purposes. The 2020 Repurchase Authorization has no scheduled termination date
and we intend to fund repurchases under the authorization with cash and cash equivalents on hand and cash generated from
operations going forward. During 2020, we purchased 3.8 million of our common shares for $172.8 million under the 2020
Repurchase Authorization, at an average price of $46.05.

In 2020, we declared and paid four quarterly cash dividends of $0.30 per common share for a total paid amount of $47.0
million. The cash dividends declared and paid in 2020 were consistent with the cash dividends declared and paid in 2019.

In March 2021, our Board declared a quarterly cash dividend of $0.30 per common share payable on April 2, 2021 to
shareholders of record as of the close of business on March 19, 2021.

The following table compares the primary components of our cash flows from 2020 to 2019:

(In thousands)

Net cash provided by operating activities

Net cash provided by (used in) investing activities
Net cash used in financing activities

2020

2019

Change

399,349

338,970

452,987
(345,501)

(74,480)
(257,803)

60,379

527,467
(87,698)

Cash provided by operating activities increased by $60.4 million to $399.3 million in 2020 compared to $339.0 million in 2019.
The increase was primarily driven by our higher net income, after adjusting for non-cash activity such as deferred taxes and the
add-back for the gain on disposition of property and equipment, and an increase in income taxes payable, which was principally
due to our higher taxable income in 2020 compared to 2019. The increase was partly offset by a decrease in the combined
change in inventory and accounts payable, which resulted from our lower inventory position at the end of 2019.

Cash provided by (used in) investing activities increased by $527.5 million to cash provided by investing activities of $453.0
million in 2020 compared to cash used in investing activities of $74.5 million in 2019. The increase was primarily due to an
increase in cash proceeds from sale of property and equipment, resulting from the sale of four distribution centers in 2020
compared to the sale of one distribution center in 2019. Additionally, our capital expenditures decreased compared to 2019,
which was driven by our decision to reduce our investments in our Store of the Future concept and new stores in 2020 to
preserve liquidity and promote safety during the COVID-19 coronavirus pandemic, and a decrease in investments in our Apple
Valley, CA distribution center which opened in late 2019.

Cash used in financing activities increased by $87.7 million to $345.5 million in 2020 compared to $257.8 million in cash used
in financing activities in 2019. The increase was driven by increases in net repayments of long-term debt resulting from our
repayment of all outstanding borrowings under the 2018 Credit Agreement during 2020 and payment for treasury shares
acquired, which is due to our repurchase of $172.8 million of our common shares under the 2020 Repurchase Authorization

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during 2020, compared to our repurchase of $50.0 million of our common shares under the 2019 Repurchase Program during
2019. The increases were partially offset by an increase in net financing proceeds from sale and leaseback resulting from the
sale and leaseback of four distribution centers in 2020 and a decrease in payment of finance lease obligations, which was due to
the exercise of a purchase option to acquire our corporate headquarters in 2019.

Based on historical and expected financial results, we believe that we have or, if necessary, have the ability to obtain, adequate
resources to fund ongoing and seasonal working capital requirements, proposed capital expenditures, new projects, and
currently maturing obligations.

Contractual Obligations

The following table summarizes payments due under our contractual obligations at January 30, 2021:

(In thousands)
Long-term debt (2)
Operating lease obligations (3)
Finance lease obligations
Purchase obligations (4) (5)
Other long-term liabilities (6)
Total contractual obligations

Payments Due by Period (1)

Total

Less than
1 year

1 to 3 years

3 to 5 years

More than
5 years

53,293 $

16,076 $

31,900 $

5,317 $

—

2,486,847

362,784

704,150

505,290

914,623

4,602

3,820

710

1,123,719

932,543

138,151

250,106

43,562

23,391

53,024

24,315

—

158,838

3,918,567 $

1,358,785 $

898,302 $

588,018 $

1,073,462

(1) The disclosure of contractual obligations in this table is based on assumptions and estimates that we believe to be

reasonable as of the date of this report. Those assumptions and estimates may prove to be inaccurate; consequently, the
amounts provided in the table may differ materially from those amounts that we ultimately incur. Variables that may
cause the stated amounts to vary from the amounts actually incurred include, but are not limited to: the termination of a
contractual obligation prior to its stated or anticipated expiration; fees or damages incurred as a result of the premature
termination or breach of a contractual obligation; the acquisition of more or less services or goods under a contractual
obligation than are anticipated by us as of the date of this report; fluctuations in third party fees, governmental charges,
or market rates that we are obligated to pay under contracts we have with certain vendors; and the exercise of renewal
options under, or the automatic renewal of, contracts that provide for the same.

(2) Long-term debt consists of the borrowings outstanding under the 2019 Term Note, expected interest on the 2019 Term
Note, and associated accrued interest of $0.1 million. At January 30, 2021, we had no borrowings under the 2018
Credit Agreement. In addition, we had outstanding letters of credit totaling $41.0 million at January 30, 2021.
Approximately $34.3 million of the outstanding letters of credit represent stand-by letters of credit and we do not
expect to meet the conditions requiring significant cash payments on these letters of credit; accordingly, they have
been excluded from this table. For further discussion, see note 3 to the accompanying consolidated financial
statements. The remaining $6.7 million of outstanding letters of credit represent commercial letters of credit whereby
the related obligation is included in the purchase obligation.

(3) Operating lease obligations include, among other items, leases for retail stores and distribution centers. The future

commitments for retail store and distribution center leases are $2,144.4 million. In accordance with lease accounting
requirements, we have assessed the reasonable certainty of exercising options to extend or terminate existing leases to
determine the duration of our lease obligations. For a further discussion of leases, see note 5 to the accompanying
consolidated financial statements. Many of our store lease obligations require us to pay for our applicable portion of
CAM, real estate taxes, and property insurance. In connection with our store lease obligations, we estimated that future
obligations for CAM, real estate taxes, and property insurance were $342.4 million at January 30, 2021. We have made
certain assumptions and estimates in order to account for our contractual obligations relative to CAM, real estate taxes,
and property insurance. Those assumptions and estimates include, but are not limited to: use of historical data to
estimate our future obligations; calculation of our obligations based on comparable store averages where no historical
data is available for a particular leasehold; and assumptions related to average expected increases over historical data.

(4) For purposes of the purchase obligation disclosures, we have assumed that we will make all payments scheduled or

reasonably estimated to be made under those obligations that have a determinable expiration date, and we disregarded
the possibility that such obligations may be prematurely terminated or extended, whether automatically by the terms of

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the obligation or by agreement between us and the counterparty, due to the speculative nature of premature termination
or extension. Where a purchase obligation is subject to a month-to-month term or another automatically renewing
term, we included in the table our minimum commitment under such obligation, such as one month in the case of a
month-to-month obligation and the then-current term in the case of another automatically renewing term, due to the
uncertainty of future decisions to exercise options to extend or terminate any existing agreements.

(5) Purchase obligations include outstanding purchase orders for merchandise issued in the ordinary course of our
business that are valued at $722.5 million, the entirety of which represents obligations due within one year of
January 30, 2021. The remaining $401.2 million of purchase obligations is primarily related to distribution and
transportation, information technology, print advertising, energy procurement, and other store security, supply, and
maintenance commitments, which includes $16.0 million for a charitable commitment over six years, which is the
remaining obligation of a $40.0 million charitable donation over a 10-year period.

(6) Other long-term liabilities include $213.8 million for payment of financing obligations related to the sale and

leaseback transactions for four distribution centers, $32.8 million for obligations related to our nonqualified deferred
compensation plan, and $3.4 million for unrecognized tax benefits. In 2020, we completed sale and leaseback
transactions for four distribution centers, which gave rise to a financing obligation. The financing obligations related to
the sale and leaseback transactions include expected interest on the obligations. In December 2020, we notified plan
participants in our nonqualified deferred compensation plan of our decision to terminate the plan and distribute all
account balances to plan participants by the end of 2021. Accordingly, obligations related to our nonqualified deferred
compensation plan reflect our intent to pay all remaining obligations by the end of 2021. We have included
unrecognized tax benefits of $2.1 million for payments expected in 2021 and $1.3 million of timing-related income tax
uncertainties anticipated to reverse in 2021. Unrecognized tax benefits in the amount of $10.0 million have been
excluded from the table because we are unable to make a reasonably reliable estimate of the timing of future payments.

Off-Balance Sheet Arrangements

Not applicable.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of
America (“GAAP”) requires management to make estimates, judgments, and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the
reporting period, as well as the related disclosure of contingent assets and liabilities at the date of the financial statements. The
use of estimates, judgments, and assumptions creates a level of uncertainty with respect to reported or disclosed amounts in our
consolidated financial statements or accompanying notes. On an ongoing basis, management evaluates its estimates, judgments,
and assumptions, including those that management considers critical to the accurate presentation and disclosure of our
consolidated financial statements and accompanying notes. Management bases its estimates, judgments, and assumptions on
historical experience, current trends, and various other factors that management believes are reasonable under the
circumstances. Because of the inherent uncertainty in using estimates, judgments, and assumptions, actual results may differ
from these estimates.

Our significant accounting policies, including the recently adopted accounting standards and recent accounting standards -
future adoptions, if any, are described in note 1 to the accompanying consolidated financial statements. We believe the
following estimates, assumptions, and judgments are the most critical to understanding and evaluating our reported financial
results. Management has reviewed these critical accounting estimates and related disclosures with the Audit Committee of our
Board of Directors.

Merchandise Inventories
Merchandise inventories are valued at the lower of cost or market using the average cost retail inventory method. Market is
determined based on the estimated net realizable value, which generally is the merchandise selling price at or near the end of
the reporting period. The average cost retail inventory method requires management to make judgments and contains estimates,
such as the amount and timing of markdowns to clear slow-moving inventory and the allowance for shrinkage, which may
impact the ending inventory valuation and current or future gross margin. These estimates are based on historical experience
and current information.

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When management determines the salability of merchandise inventories is diminished, markdowns for clearance activity and
the related cost impact are recorded at the time the price change decision is made. Factors considered in the determination of
markdowns include current and anticipated demand, customer preferences, the age of merchandise, and seasonal trends. Timing
of holidays within fiscal periods, weather, and customer preferences could cause material changes in the amount and timing of
markdowns from year to year.

The allowance for shrinkage is recorded as a reduction to inventories, charged to cost of sales, and calculated as a percentage of
sales for the period from the last physical inventory date to the end of the reporting period. Such estimates are based on both our
current year and historical inventory results. Independent physical inventory counts are typically taken at each store once a year.
During 2020, scheduling challenges arising due to COVID-19 resulted in a small number of stores that did not take physical
inventory counts in calendar 2020 as initially planned. These stores were prioritized to be counted early in the 2021 physical
inventory counting cycle and the allowance for shrinkage associated with these stores at January 30, 2021 was adjusted in
consideration of early calendar 2021 results. During calendar 2021, the majority of physical counts will occur between January
and June. As physical inventories are completed, actual results are recorded and new go-forward allowance for shrinkage rates
are established based on historical results at the individual store level. Thus, the allowance for shrinkage rates will be adjusted
throughout the January to June inventory cycle based on actual results. At January 30, 2021, a 10% difference in our shrink
accrual would have affected gross margin, operating profit and income before income taxes by approximately $4.1 million.
While it is not possible to quantify the impact from each cause of shrinkage, we have asset protection programs and policies
aimed at minimizing shrinkage.

Insurance and Insurance-Related Reserves
We are self-insured for certain losses relating to property, general liability, workers’ compensation, and employee medical,
dental, and prescription drug benefit claims, a portion of which is funded by employees. We purchase stop-loss coverage from
third party insurance carriers to limit individual or aggregate loss exposures in these areas. Accrued insurance liabilities and
related expenses are based on actual claims reported and estimates of claims incurred but not reported. The estimated loss
accruals for claims incurred but not paid are determined by applying actuarially-based calculations taking into account
historical claims payment results and known trends such as claims frequency and claims severity. Management makes
estimates, judgments, and assumptions with respect to the use of these actuarially-based calculations, including but not limited
to, estimated health care cost trends, estimated lag time to report and pay claims, average cost per claim, network utilization
rates, network discount rates, and other factors. A 10% change in our self-insured liabilities at January 30, 2021 would have
affected selling and administrative expenses, operating profit, and income before income taxes by approximately $7.9 million.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk
We are subject to market risk from exposure to changes in interest rates on investments and on borrowings under the 2018
Credit Agreement that we make from time to time. We had no borrowings under the 2018 Credit Agreement at January 30,
2021. An increase of 1% in our variable interest rate on our investments and estimated future borrowings would not currently
affect our financial condition, results of operations, or liquidity. Additionally, we are subject to cross-default provisions
associated with the Synthetic Lease for our distribution center in California. An increase of 1% in this leasing instrument could
affect our financial condition, results of operations, or liquidity through higher rent expense by approximately $0.9 million.

Risks Associated with Derivative Instruments
We are subject to market risk from exposure to changes in our derivative instruments, associated with diesel fuel. At
January 30, 2021, we had outstanding derivative instruments, in the form of collars, covering 3.6 million gallons of diesel fuel.
The below table provides further detail related to our current derivative instruments, associated with diesel fuel.

Calendar Year of
Maturity

Diesel Fuel Derivatives

Fair Value

Puts

Calls

Asset (Liability)

2021

2022

Total

(Gallons, in thousands)

(In thousands)

2,400

1,200

3,600

2,400

1,200

3,600

(525)

(212)

(737)

Additionally, at January 30, 2021, a 10% difference in the forward curve for diesel fuel prices could affect unrealized gains
(losses) in other income (expense) by approximately $1.1 million.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors of Big Lots, Inc.

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of Big Lots, Inc. and subsidiaries (the “Company”) as of January
30, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material
respects, effective internal control over financial reporting as of January 30, 2021, based on criteria established in Internal
Control — Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the consolidated financial statements as of and for the year ended January 30, 2021, of the Company and our report
dated March 30, 2021, expressed an unqualified opinion on those financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report
on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control
over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be
independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all
material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk
that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the
assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit
provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ DELOITTE & TOUCHE LLP

Columbus, Ohio
March 30, 2021

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors of Big Lots, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Big Lots, Inc. and subsidiaries (the “Company”) as of
January 30, 2021 and February 1, 2020, the related consolidated statements of operations and comprehensive income,
shareholders’ equity, and cash flows, for each of the three years in the period ended January 30, 2021, and the related notes
(collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material
respects, the financial position of the Company as of January 30, 2021 and February 1, 2020, and the results of its operations
and its cash flows for each of the three years in the period ended January 30, 2021, in conformity with accounting principles
generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the Company’s internal control over financial reporting as of January 30, 2021, based on criteria established in
Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway
Commission and our report dated March 30, 2021, expressed an unqualified opinion on the Company’s internal control over
financial reporting.

Change in Accounting Principle

As discussed in Note 1 to the financial statements, effective February 3, 2019, the Company adopted FASB Accounting
Standards Update 2016-02, Leases (Topic 842), using the optional transition method, as allowed by ASU 2018-11, Leases
(Topic 842), Targeted Improvements, to apply the new standard as of the effective date.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on
the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to
error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial
statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included
examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included
evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall
presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that
were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that
are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The
communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and
we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on
the accounts or disclosures to which they relate.

Measurement of Inventory Valuation Reserves - Refer to Note 1 to the financial statements

Critical Audit Matter Description

Merchandise inventories are valued at the lower of cost or market using the average cost retail inventory method. The average
cost retail inventory method requires management to make judgments and contains estimates, including the amount and timing
of markdowns to clear slow-moving inventory and an estimated allowance for shrinkage, which may impact ending inventory
valuation. The balance of ending inventory was $940.3 million at January 30, 2021.

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The inventory allowance for shrinkage is recorded as a reduction to inventories, charged to cost of sales, and calculated as a
percentage of sales for the period from the last physical inventory date to the end of the reporting period.

Given the significant estimates and assumptions management utilizes to quantify inventory reserves which includes markdowns
and the allowance for shrinkage, a high degree of auditor judgment and an increased extent of effort is required when
performing audit procedures to evaluate the methodology and reasonableness of the estimates and assumptions. For
markdowns, such estimates are based on the timing and completeness of recorded markdowns. For the allowance for shrinkage,
such estimates are based on a combination of historical shrinkage experience and current year physical inventory results.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the measurement of the valuation of inventory reserves included the following, among others:

• We tested the effectiveness of controls over the completeness and measurement of inventory reserves.
• We evaluated the methods and assumptions used by management to estimate markdowns by:

◦

◦
◦

Evaluating management’s estimate for markdowns by comparing markdowns recorded after period end to the
markdowns reserve at year end.
Performing an analysis comparing the markdown reserve to historical results.
Comparing inventory sell through for the first period subsequent to year end to historical sell through results
to evaluate the salability of merchandise inventories at year end.

• We evaluated the methods and assumptions used by management to estimate the allowance for shrinkage by:

◦

Attending a selection of store physical inventories and recalculating the shrink for locations using the results
of the store physical inventory.
Performing an analysis comparing the methodology and inputs used by management to historical results,
trends in the prior years and current year, and industry averages.
Comparing management’s prior-year assumptions of expected shrink activity to actual activity incurred
during the current year to determine the appropriateness of the shrinkage inventory allowance.

Measurement of Insurance Valuation Reserves - Refer to Notes 1 and 9 to the financial statements

Critical Audit Matter Description

The Company is self-insured for certain losses relating to general liability and workers’ compensation. Accrued insurance
liabilities, $92.1 million at January 30, 2021, are based on actual claims reported and estimates of claims incurred but not
reported. The estimated loss accruals for claims incurred but not paid are determined by applying actuarially-based calculations
taking into account historical claims payment results and known trends such as claims frequency and claims severity.

Given the significant estimates and assumptions in determination of the selected actuarial models management utilizes to
quantify insurance reserves, a high degree of auditor judgment and increased extent of effort is required, including the need to
involve our actuarial specialists, when performing audit procedures to evaluate whether insurance reserves were appropriately
valued.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the general liability and workers’ compensation self-insurance reserves included the following,
among others:

• We tested the effectiveness of controls related to general liability and workers’ compensation self-insurance reserves.
• We evaluated the methods and assumptions used by management to estimate the self-insurance reserves by:

◦

Testing the underlying data that served as the basis of the actuarial analysis, including historical claims, to test
that the inputs to the actuarial estimate were reasonable.
Comparing management’s prior-year assumptions of expected loss to actuals incurred during the current year
to evaluate the appropriateness of assumptions used to determine the insurance reserves.

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• With the assistance of our actuarial specialists, we developed independent estimates of the insurance reserves,

including loss and industry claim development factors, and compared our estimates to management’s estimates.
Further, the actuarial specialists:

◦

Assessed the actuarial models used by the Company for consistency with the generally accepted actuarial
standards;
Evaluated the Company’s ability to estimate the insurance liabilities by comparing its historical estimates
with actual loss payments;
Evaluated the key assumptions underlying the Company’s actuarial estimates used to determine the insurance
reserves.

/s/ DELOITTE & TOUCHE LLP

Columbus, Ohio
March 30, 2021

We have served as the Company’s auditor since 1989.

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BIG LOTS, INC. AND SUBSIDIARIES
Consolidated Statements of Operations and Comprehensive Income (In thousands, except per share amounts)

Net sales

2020

2019

2018

6,199,186 $

5,323,180 $

5,238,105

Cost of sales (exclusive of depreciation expense shown separately below)

3,701,800

3,208,498

3,116,210

Gross margin

Selling and administrative expenses

Depreciation expense

Gain on sale of distribution centers

Operating profit

Interest expense

Other income (expense)

Income before income taxes

Income tax expense

2,497,386

2,114,682

2,121,895

1,965,555

1,823,409

1,778,416

138,336

134,981

124,970

(463,053)

(178,534)

856,548

(11,031)

(911)

844,606

215,415

334,826

(16,827)

(451)

317,548

75,084

—

218,509

(10,338)

(558)

207,613

50,719

Net income and comprehensive income

629,191 $

242,464 $

156,894

Earnings per common share:

Basic

Diluted

16.46 $

16.11 $

6.18 $

6.16 $

3.84

3.83

The accompanying notes are an integral part of these consolidated financial statements.

BIG LOTS, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands, except par value)

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ASSETS

Current assets:

Cash and cash equivalents

Inventories

Other current assets

Total current assets

Operating lease right-of-use assets

Property and equipment - net

Deferred income taxes

Other assets

Total assets

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:

Accounts payable

Current operating lease liabilities

Property, payroll, and other taxes

Accrued operating expenses

Insurance reserves

Accrued salaries and wages

Income taxes payable

Total current liabilities

Long-term debt

Noncurrent operating lease liabilities

Deferred income taxes

Insurance reserves

Unrecognized tax benefits
Other liabilities

Shareholders’ equity:

Preferred shares - authorized 2,000 shares; $0.01 par value; none issued
Common shares - authorized 298,000 shares; $0.01 par value; issued 117,495
shares; outstanding 35,535 shares and 39,037 shares, respectively

January 30, 2021

February 1, 2020

559,556

940,294

85,939

1,585,789

1,649,009

717,216

16,329

68,914

52,721

921,266

89,962

1,063,949

1,202,252

849,147

4,762

69,171

4,037,257

3,189,281

398,433

226,075

109,694

138,331

34,660

49,830

43,601

1,000,624

35,764

1,465,433

7,762

57,452

11,304
181,187

—

1,175

378,241

212,144

82,109

118,973

36,131

39,292

3,930

870,820

279,464

1,035,377

48,610

57,567

10,722
41,257

—

1,175

Treasury shares - 81,960 shares and 78,458 shares, respectively, at cost

(2,709,259)

(2,546,232)

Additional paid-in capital

Retained earnings

Total shareholders’ equity

634,813

3,351,002

1,277,731

620,728

2,769,793

845,464

Total liabilities and shareholders’ equity

4,037,257

3,189,281

The accompanying notes are an integral part of these consolidated financial statements.

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BIG LOTS, INC. AND SUBSIDIARIES
Consolidated Statements of Shareholders’ Equity
(In thousands)

Balance - February 3, 2018

Comprehensive income

Dividends declared ($1.20 per share)

Purchases of common shares

Exercise of stock options

Restricted shares vested

Performance shares vested

Other

Share-based employee compensation expense

Balance - February 2, 2019

Comprehensive income

Dividends declared ($1.20 per share)

Adjustment for ASU 2016-02

Purchases of common shares

Exercise of stock options

Restricted shares vested

Performance shares vested

Other

Share-based employee compensation expense

Balance - February 1, 2020

Comprehensive income

Dividends declared ($1.20 per share)

Purchases of common shares

Exercise of stock options

Restricted shares vested

Performance shares vested

Other

Common

Treasury

Amount

Additional
Paid-In
Capital

Retained
Earnings

Total

41,925 $

1,175 75,570 $ (2,422,396) $ 622,550 $ 2,468,258 $ 669,587

—

(2,635)

413

296

— —

—

156,894

(49,885)

— 2,635

(107,830)

(3,920)

—

(111,750)

—

(43)

1,395

464

—

(413)

13,271

(13,271)

—

(296)

9,475

(9,475)

—

— —

(1)

—

26,335

—

1,859

—

26,335

40,042

1,175 77,453 (2,506,086)

622,685 2,575,267

693,041

—

(1,474)

202

261

—

— —

—

— 1,474

(55,347)

—

(6)

—

(202)

—

(261)

— —

202

6,545

8,459

(5)

—

(2)

(6,545)

(8,459)

(2)

13,051

242,464

(48,286)

348

—

(55,347)

200

—

(7)

13,051

39,037

1,175 78,458 (2,546,232)

620,728 2,769,793

845,464

—

(3,890)

309

— —

—

— 3,890

(175,642)

—

(13)

429

—

(309)

10,034

(10,034)

—

(65)

(1)

2,107

(2,107)

—

26,155

629,191

(47,982)

—

(175,642)

—

493

—

26,155

Share-based employee compensation expense

—

— —

Balance - January 30, 2021

35,535 $

1,175 81,960 $ (2,709,259) $ 634,813 $ 3,351,002 $ 1,277,731

The accompanying notes are an integral part of these consolidated financial statements.

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BIG LOTS, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(In thousands)

Operating activities:

Net income

Adjustments to reconcile net income to net cash provided by operating activities:

2020

2019

2018

629,191

242,464

156,894

Depreciation and amortization expense

Non-cash lease expense

Deferred income taxes

Non-cash share-based compensation expense

Non-cash impairment charge

(Gain) loss on disposition of property and equipment

Unrealized (gain) loss on fuel derivatives

Change in assets and liabilities:

Inventories

Accounts payable

Operating lease liabilities

Current income taxes

Other current assets

Other current liabilities

Other assets

Other liabilities

Net cash provided by operating activities

Investing activities:

Capital expenditures

Cash proceeds from sale of property and equipment

Assets acquired under synthetic lease

Payments for purchase of intangible assets

Other

138,848

246,442

(52,415)

26,155

1,792

(462,916)

(294)

(19,028)

20,193

(250,131)

56,564

(10,238)

55,775

(90)

19,501

399,349

(135,220)

588,258

—

(51)

135,686

229,143

52,374

13,051

3,986

(177,996)

346

48,295

(18,662)

(215,956)

(4,442)

(5,836)

36,962

(5,499)

5,054

338,970

(265,203)

190,741

—

(18)

114,025

—

5,353

26,335

141

732

1,075

(96,772)

45,677

—

(14,108)

(7,055)

(11,637)

1,985

11,415

234,060

(232,402)

519

(128,872)

(15,750)

Net cash provided by (used in) investing activities

452,987

(74,480)

(376,473)

Financing activities:

Net (repayments of) proceeds from long-term debt

Net financing proceeds from sale and leaseback

Payment of finance lease obligations

Dividends paid

Proceeds from the exercise of stock options

Payment for treasury shares acquired

Proceeds from synthetic lease

Payments for debt issuance costs

Other

Net cash (used in) provided by financing activities

Increase (decrease) in cash and cash equivalents

Cash and cash equivalents:

Beginning of year

End of year

(243,227)

123,435

(3,648)

(46,964)

493

(175,642)

—

(345,501)

506,835

(80,609)

—

(73,469)

(48,421)

200

(55,347)

—

(150)

(7)

(257,803)

6,687

52,721

46,034

559,556

52,721

174,300

—

(3,908)

(50,608)

1,859

(111,750)

128,872

(1,495)

137,271

(5,142)

51,176

46,034

The accompanying notes are an integral part of these consolidated financial statements.

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BIG LOTS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements

NOTE 1 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business
We are a neighborhood discount retailer in the United States (“U.S.”). At January 30, 2021, we operated 1,408 stores in 47
states and an e-commerce platform. Our mission is to help people live BIG and save LOTS. Our vision is to be the BIG
difference for a better life by delivering unmatched value through surprise and delight, by building a “Best Places to Work”
culture, by rewarding shareholders with consistent growth and top tier returns, and by doing good as we do well. Our values are
leading with our core customer (whom we refer to as Jennifer), treating all like friends, succeeding together, and playing to win.

Basis of Presentation
The consolidated financial statements include Big Lots, Inc. and all of its subsidiaries, have been prepared in accordance with
accounting principles generally accepted in the United States of America (“GAAP”), and include all of our accounts. We
consolidate all majority-owned and controlled subsidiaries. All intercompany accounts and transactions have been eliminated.

Management Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates, judgments, and
assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period, as well as the related disclosure of contingent assets and
liabilities at the date of the financial statements. The use of estimates, judgments, and assumptions creates a level of uncertainty
with respect to reported or disclosed amounts in our consolidated financial statements and accompanying notes. On an ongoing
basis, management evaluates its estimates, judgments, and assumptions, including those that management considers critical to
the accurate presentation and disclosure of our consolidated financial statements and accompanying notes. Management bases
its estimates, judgments, and assumptions on historical experience, current trends, and various other factors that it believes are
reasonable under the circumstances. Because of the inherent uncertainty in using estimates, judgments, and assumptions, actual
results may differ from these estimates.

Fiscal Periods
Our fiscal year ends on the Saturday nearest to January 31, which results in fiscal years consisting of 52 or 53 weeks. Unless
otherwise stated, references to years in this report relate to fiscal years rather than calendar years. Fiscal year 2020 (“2020”)
was comprised of the 52 weeks that began on February 2, 2020 and ended on January 30, 2021. Fiscal year 2019 (“2019”) was
comprised of the 52 weeks that began on February 3, 2019 and ended on February 1, 2020. Fiscal year 2018 (“2018”) was
comprised of the 52 weeks that began on February 4, 2018 and ended on February 2, 2019.

Segment Reporting
We manage our business based on one segment, discount retailing. Our entire operation is located in the U.S.

Cash and Cash Equivalents
Cash and cash equivalents primarily consist of amounts on deposit with financial institutions, outstanding checks, credit and
debit card receivables, and highly liquid investments, such as money market funds, treasury bills, and commercial paper, which
are unrestricted to withdrawal or use and which have an original maturity of three months or less. We review cash and cash
equivalent balances on a bank by bank basis in order to identify book overdrafts. Book overdrafts occur when the aggregate
amount of outstanding checks and electronic fund transfers exceed the cash deposited at a given bank. We reclassify book
overdrafts, if any, to accounts payable on our consolidated balance sheets. Amounts due from banks for credit and debit card
transactions are typically settled in less than three days, and at January 30, 2021 and February 1, 2020, totaled $34.7 million and
$28.8 million, respectively.

Investments
Investment securities are classified as available-for-sale, held-to-maturity, or trading at the date of purchase. Investments are
recorded at fair value as either current assets or non-current assets based on the stated maturity or our plans to either hold or sell
the investment. Unrealized holding gains and losses on trading securities are recognized in earnings. Unrealized holding gains
and losses on available-for-sale securities are recognized in other comprehensive income until realized. We did not own any
held-to-maturity or available-for-sale securities as of January 30, 2021 and February 1, 2020.

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Merchandise Inventories
Merchandise inventories are valued at the lower of cost or market using the average cost retail inventory method. Cost includes
any applicable inbound shipping and handling costs associated with the receipt of merchandise into our distribution centers (see
the discussion below under the caption “Selling and Administrative Expenses” for additional information regarding outbound
shipping and handling costs to our stores). Market is determined based on the estimated net realizable value, which generally is
the merchandise selling price. Under the average cost retail inventory method, inventory is segregated into classes of
merchandise having similar characteristics at its current retail selling value. Current retail selling values are converted to a cost
basis by applying an average cost factor to each specific merchandise class’s retail selling value. Cost factors represent the
average cost-to-retail ratio computed using beginning inventory and all fiscal year-to-date purchase activity specific to each
merchandise class.

Under the average cost retail inventory method, permanent sales price markdowns result in cost reductions in inventory. Our
permanent sales price markdowns are typically related to end of season clearance events and are recorded as a charge to cost of
sales in the period of management’s decision to initiate sales price reductions with the intent not to return the price to regular
retail. Promotional markdowns are recorded as a charge to net sales in the period the merchandise is sold. Promotional
markdowns are typically related to specific marketing efforts with respect to products maintained continuously in our stores or
products that are only available in limited quantities but represent substantial value to our customers. Promotional markdowns
are principally used to drive higher sales volume during a defined promotional period.

We record a reduction to inventories and charge to cost of sales for an allowance for shrinkage. The allowance for shrinkage is
calculated as a percentage of sales for the period from the last physical inventory date to the end of the reporting period. Such
estimates are based on a combination of our historical experience and current year physical inventory results.

We record a reduction to inventories and charge to cost of sales for any excess or obsolete inventory. The excess or obsolete
inventory is estimated based on a review of our aged inventory and takes into account any items that have already received a
cost reduction as a result of the permanent markdown process discussed above. We estimate the reduction for excess or obsolete
inventory based on historical sales trends, age and quantity of product on hand, and anticipated future sales.

Property and Equipment - Net
Depreciation and amortization expense of property and equipment are recorded on a straight‑line basis using estimated service
lives. The estimated service lives of our depreciable property and equipment by major asset category were as follows:

Land improvements

Buildings

Leasehold improvements

Store fixtures and equipment

Distribution and transportation fixtures and equipment

Office and computer equipment
Computer software costs
Company vehicles

15 years

40 years

5 - 10 years

2 - 7 years

5 - 15 years

3 - 5 years
3 - 8 years
3 years

Leasehold improvements are amortized on a straight-line basis using the shorter of their estimated service lives or the lease
term.

Assets acquired under leases which meet the criteria of a finance lease are capitalized in property and equipment - net and
amortized over the estimated service life of the asset or the applicable lease term, whichever is shorter.

Depreciation estimates are revised prospectively to reflect the remaining depreciation or amortization of the asset over the
shortened estimated service life when a decision is made to dispose of property and equipment prior to the end of its previously
estimated service life. The cost of assets sold or retired and the related accumulated depreciation are removed from the accounts
with any resulting gain or loss included in selling and administrative expenses. Major repairs that extend service lives are
capitalized. Maintenance and repairs are charged to expense as incurred. Capitalized interest was not significant in any period
presented.

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Long-Lived Assets
Our long-lived assets primarily consist of property and equipment - net and operating lease right-of-use assets. In order to
determine if impairment indicators are present for store property and equipment and operating lease right-of-use assets, we
review historical operating results at the store level on an annual basis, or when other impairment indicators are present.
Generally, all other property and equipment and operating lease right-of-use assets are reviewed for impairment at the
enterprise level. If the net book value of a store’s long-lived assets is not recoverable by the expected undiscounted future cash
flows of the store, we estimate the fair value of the store’s assets and recognize an impairment charge for the excess net book
value of the store’s long-lived assets over their fair value. Our assumptions related to estimates of undiscounted future cash
flows are based on historical results of cash flows adjusted for management projections for future periods. We estimate the fair
value of our long-lived assets using expected cash flows, including salvage value, which is based on readily available market
information for similar assets.

Intangible Assets
During 2018, we acquired the Broyhill® trademark and trade name. This trademark and trade name have indefinite lives. We
test the trademark and trade name for impairment annually or whenever circumstances indicate that the carrying value of the
asset may not be recoverable. We estimate the fair value of these intangible assets based on an income approach. We perform
our annual impairment testing during our fourth fiscal quarter of each year.

Savings Plans
We have a savings plan with a 401(k) deferral feature and a nonqualified deferred compensation plan with a similar deferral
feature for eligible employees. We provide a matching contribution based on a percentage of employee contributions. Our
matching contributions are subject to Internal Revenue Service (“IRS”) regulations. For 2020, 2019, and 2018, we expensed
$9.2 million, $8.3 million, and $8.5 million, respectively, related to our matching contributions. In connection with our
nonqualified deferred compensation plan, we had liabilities of $33.0 million and $33.9 million at January 30, 2021 and
February 1, 2020, respectively, which are recorded in other liabilities. In December 2020, we notified plan participants in our
nonqualified deferred compensation plan of our decision to terminate the plan and distribute all account balances to plan
participants by the end of 2021.

Income Taxes
We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and
liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements.
Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statement
basis and tax basis of assets and liabilities using enacted law and tax rates in effect for the year in which the differences are
expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the
period that includes the enactment date.

We assess the adequacy and need for a valuation allowance for deferred tax assets. In making such assessment, we consider all
available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable
income, tax planning strategies and recent financial operations. We have established a valuation allowance to reduce our
deferred tax assets to the balance that is more likely than not to be realized.

We recognize interest and penalties related to unrecognized tax benefits within the income tax expense line in the
accompanying consolidated statements of operations and comprehensive income. Accrued interest and penalties are included
within the related tax liability line in the accompanying consolidated balance sheets.

The effective income tax rate in any period may be materially impacted by the overall level of income (loss) before income
taxes, the jurisdictional mix and magnitude of income (loss), changes in the income tax laws (which may be retroactive to the
beginning of the fiscal year), subsequent recognition, de-recognition and/or measurement of an uncertain tax benefit, changes in
a deferred tax valuation allowance, and adjustments of a deferred tax asset or liability for enacted changes in tax laws or rates.

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Fair Value of Financial Instruments
The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy, as defined
below, gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities and the lowest
priority to unobservable inputs.

Level 1, defined as observable inputs such as unadjusted quoted prices in active markets for identical assets or liabilities.
Level 2, defined as observable inputs other than Level 1 inputs. These include quoted prices for similar assets or liabilities
in an active market, quoted prices for identical assets and liabilities in markets that are not active, or other inputs that
are observable or can be corroborated by observable market data for substantially the full term of the assets or
liabilities.

Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its

own assumptions.

Revenue Recognition
We recognize sales revenue at the time the customer takes possession of the merchandise (i.e., the point at which we transfer
the goods). Sales are recorded net of discounts (i.e., the amount of consideration we expect to receive for the goods) and
estimated returns and exclude any sales tax. The reserve for merchandise returns is estimated based on our prior return
experience.

We sell gift cards in our stores, online, and through third-party retailers, and issue merchandise credits, typically as a result of
customer returns, on stored value cards. We do not charge administrative fees on unused gift card or merchandise credit
balances and our gift cards and merchandise credits do not expire. We recognize sales revenue related to gift cards and
merchandise credits (1) when the gift card or merchandise credit is redeemed in a sales transaction by the customer or (2) as
breakage occurs. We recognize gift card and merchandise credit breakage when we estimate that the likelihood of the card or
credit being redeemed by the customer is remote and we determine that we do not have a legal obligation to remit the value of
unredeemed cards or credits to the relevant regulatory authority. We estimate breakage based upon historical redemption
patterns. The liability for the unredeemed cash value of gift cards and merchandise credits is recorded in accrued operating
expenses in our consolidated balance sheets.

We offer price hold contracts and buy now pick up later arrangements on merchandise. Revenue for price hold contracts and
buy now pick up later arrangements is recognized when the customer makes the final payment and takes possession of the
merchandise. Amounts paid by customers under price hold contracts and buy now pick up later arrangements are recorded in
accrued operating expenses in our consolidated balance sheets until a sale is consummated.

We recognize sales revenue for direct-to-customer transactions on our e-commerce platform at the time the merchandise is
shipped (i.e., the point at which we transfer the goods). We also offer buy online pick up in store services on our e-commerce
platform. Revenue for buy online pick up in store transactions is recognized when the customer takes possession of the
merchandise at the store.

Cost of Sales
Cost of sales includes the cost of merchandise, net of cash discounts and rebates, markdowns, and inventory shrinkage. Cost of
merchandise includes related inbound freight to our distribution centers, duties, and commissions. We classify warehousing,
distribution and outbound transportation costs as selling and administrative expenses. Due to this classification, our gross
margin rates may not be comparable to those of other retailers that include warehousing, distribution and outbound
transportation costs in cost of sales.

Selling and Administrative Expenses
Selling and administrative expenses include store expenses (such as payroll and occupancy costs) and costs related to
warehousing, distribution, outbound transportation to our stores, advertising, purchasing, insurance, non-income taxes,
accepting credit/debit cards, and overhead. Our selling and administrative expense rates may not be comparable to those of
other retailers that include warehousing, distribution, and outbound transportation costs in cost of sales. Distribution and
outbound transportation costs included in selling and administrative expenses were $251.0 million, $191.8 million, and $180.5
million for 2020, 2019, and 2018, respectively.

Leases and Rent Expense
We determine if an arrangement contains a lease at inception of the agreement. Our leased property consists of our retail stores,
our distribution centers, store security, and other office equipment. Certain of our store and distribution center leases have rent
escalations and/or have tenant allowances or other lease incentives, which are fixed in nature and included in our calculation of
right-of-use assets and lease liabilities. Certain of our store leases provide for contingent rents, which are recorded as variable

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costs and not included in our calculation of right-of-use assets and lease liabilities. Many of our leases obligate us to pay for our
applicable portion of real estate taxes, common area maintenance costs (“CAM”), and property insurance, which are recorded
as variable costs and not included in our calculation of right-of-use assets and lease liabilities, except for certain fixed CAM and
insurance charges that are not variable. Many of our leases contain provisions for options to renew, extend the original term for
additional periods, or terminate the lease if certain sales thresholds are not attained. We have assessed the reasonable certainty
of these provisions to determine the appropriate lease term. Our lease agreements do not contain material residual value
guarantees (excluding the Synthetic Lease discussed in note 5 to the accompanying consolidated financial statements),
restrictions, or covenants.

We recognize a lease liability and right-of-use asset at commencement of the lease when possession of the property is taken
from the lessor, which, for stores, normally includes a construction or set-up period prior to store opening. We begin
recognizing rent expense at commencement of the lease. Rent expense for operating leases is recognized on a straight-line basis
over the lease term and is included in selling and administrative expenses.

Advertising Expense
Advertising costs, which are expensed as incurred, consist primarily of television and print advertising, digital, social media,
internet and e-mail marketing and advertising, and in-store point-of-purchase signage and presentations. Advertising expenses
are included in selling and administrative expenses. Advertising expenses were $102.8 million, $95.2 million, and $93.6 million
for 2020, 2019, and 2018, respectively.

Share-Based Compensation
Share-based compensation expense is recognized in selling and administrative expense in our consolidated statements of
operations and comprehensive income for all awards that we expect to vest.

Non-vested Restricted Stock Units
We expense our non-vested restricted stock units with graded vesting as a single award with an average estimated life over the
entire term of the award. The expense for the non-vested restricted stock units is recorded on a straight-line basis over the
vesting period.

Performance Share Units
In 2020, we awarded performance share units with a restriction feature to certain members of senior management, which vest
based on the achievement of share price performance goals and a minimum service requirement of one year (“PRSUs”). The
PRSUs have a contractual term of three years. The grant date fair value and estimated vesting period of the PRSUs is
determined by a third party using a Monte Carlo simulation. The awards are expensed over their estimated vesting period on a
straight-line basis.

Compensation expense for performance share units (“PSUs”) is recorded based on fair value of the award on the grant date and
the estimated achievement of financial performance objectives. From an accounting perspective, the grant date is established
once all financial performance targets have been set. We monitor the estimated achievement of the financial performance
objectives at each reporting period and will potentially adjust the estimated expense on a cumulative basis. The expense for the
PSUs is recorded on a straight-line basis from the grant date through the end of the performance period.

Earnings per Share
Basic earnings per share is based on the weighted-average number of shares outstanding during each period. Diluted earnings
per share is based on the weighted-average number of shares outstanding during each period and the additional dilutive effect of
stock options, restricted stock awards, restricted stock units, PRSUs, and PSUs, calculated using the treasury stock method.

Derivative Instruments
We use derivative instruments to mitigate the risk of market fluctuations in diesel fuel prices. We do not enter into derivative
instruments for speculative purposes. Our derivative instruments may consist of collar or swap contracts. Our current derivative
instruments do not meet the requirements for cash flow hedge accounting. Instead, our derivative instruments are marked-to-
market to determine their fair value and any gains or losses are recognized currently in other income (expense) on our
consolidated statements of operations and comprehensive income.

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Supplemental Cash Flow Disclosures
The following table provides supplemental cash flow information for 2020, 2019, and 2018:

(In thousands)

Supplemental disclosure of cash flow information:

2020

2019

2018

Cash paid for interest

6,366

17,446

Cash paid for income taxes, excluding impact of refunds

Gross proceeds from long-term debt

Gross payments of long-term debt

Gross financing proceeds from sale and leaseback

Gross repayments of financing from sale and leaseback

Cash paid for operating lease liabilities

Non-cash activity:

Assets acquired under finance or capital leases

Accrued property and equipment
Operating lease right-of-use assets obtained in exchange for
operating lease liabilities

217,308

514,500

757,727

133,999

10,564

340,747

—

17,791

29,375

1,811,000

1,891,609

—

292,048

70,831

17,632

10,292

59,691

1,861,900

1,687,600

—

902

32,264

694,811

1,493,888

—

Recently Adopted Accounting Standards
In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-15
Intangibles - Goodwill and Other - Internal-Use Software. This update evaluates the accounting for costs paid by a customer to
implement a cloud computing arrangement. The new guidance aligns cloud computing arrangement implementation cost
accounting with the capitalization requirements for internal-use software development, while leaving the accounting for service
elements unchanged. On February 2, 2020, we adopted ASU 2018-15 on a prospective basis. The impact of the adoption was
immaterial to the consolidated financial statements.

In February 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842). The update requires a
lessee to recognize, on the balance sheet, a liability to make lease payments and a right-of-use asset representing a right to use
the underlying asset for the lease term. Additionally, this guidance expanded related disclosure requirements. On February 3,
2019, we adopted the new standard and elected the optional transition method, as allowed by ASU 2018-11, Leases (Topic
842), Targeted Improvements, to apply the new standard as of the effective date. Therefore, we have not applied the new
standard to the comparative prior periods presented in the consolidated financial statements. We elected to apply the following
practical expedients and policy elections at adoption:

Practical expedient package

We have not reassessed whether any expired or existing contracts are, or contain, leases.

We have not reassessed the lease classification for any expired or existing leases.

We have not reassessed initial direct costs for any expired or existing leases.

Hindsight practical expedient

We have not elected the hindsight practical expedient, which permits the use of hindsight
when determining lease term and impairment of operating lease assets.

Separation of lease and non-
lease components

We have elected to establish an accounting policy to account for lease and non-lease
components as a single component for our real estate class of assets.

Short-term policy

We have elected to establish a short-term lease exception policy, permitting us to not apply
the recognition requirements of the new standard to short-term leases (i.e., leases with terms
of 12 months or less).

Adoption of this ASU 2016-02, in the first quarter of 2019, resulted in the recognition of right-of-use assets and lease liabilities
for operating leases of $1,110 million and $1,138 million, respectively, with difference in amounts being primarily comprised
of pre-existing deferred rent and prepaid rent. The impact of the adoption was immaterial to the consolidated statements of
shareholders’ equity. For further discussion on our leases, see note 5 to the accompanying consolidated financial statements.

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Subsequent Events
We have evaluated events and transactions subsequent to the balance sheet date. Based on this evaluation, we are not aware of
any events or transactions that occurred subsequent to the balance sheet date but prior to filing that would require recognition or
disclosure in our consolidated financial statements.

NOTE 2 – PROPERTY AND EQUIPMENT - NET

Property and equipment - net consist of:

(In thousands)

Land and land improvements

Buildings and leasehold improvements

Fixtures and equipment

Computer software costs

Construction-in-progress

Property and equipment - cost

Less accumulated depreciation and amortization

Property and equipment - net

January 30, 2021

February 1, 2020

48,862 $

779,104

870,074

213,042

27,455

1,938,537

1,221,321

717,216 $

63,691

1,034,458

884,051

196,449

22,038

2,200,687

1,351,540

849,147

Property and equipment - cost includes $25.8 million and $27.5 million at January 30, 2021 and February 1, 2020, respectively,
to recognize assets from finance leases. Accumulated depreciation and amortization includes $22.2 million and $20.1 million at
January 30, 2021 and February 1, 2020, respectively, related to finance leases.

During 2020, 2019, and 2018, respectively, we invested $135.2 million, $265.2 million, and $232.4 million of cash in capital
expenditures and we recorded $138.3 million, $135.0 million, and $125.0 million of depreciation expense.

In 2020, we disposed of $123.8 million of property and equipment - cost in connection with the sale of four distribution centers
in sale and leaseback transactions (see note 10 to the accompanying consolidated financial statements for additional information
on the sale and leaseback transactions).

We incurred $0.9 million, $0.4 million, and $0.1 million in asset impairment charges, excluding impairment of right-of-use
assets (see note 5 to the accompanying consolidated financial statements), in 2020, 2019, and 2018, respectively. In 2020, we
impaired the value of property and equipment assets at four stores as a result of our annual store impairment review. In 2019,
we impaired the value of property and equipment assets at two stores as a result of our annual store impairment review. During
2018, we wrote down the value of an asset held for sale.

Asset impairment charges are included in selling and administrative expenses in our accompanying consolidated statements of
operations and comprehensive income. We perform annual impairment reviews of our long-lived assets at the store level. When
we perform the annual impairment reviews, we first determine which stores had impairment indicators present. We generally
use actual historical cash flows to determine if stores had negative cash flows within the past two years. For each store with
negative cash flows, we estimate future cash flows based on operating performance estimates specific to each store’s operations
that are based on assumptions currently being used to develop our company level operating plans. If the net book value of a
store’s long-lived assets is not recoverable by the expected future cash flows of the store, we estimate the fair value of the
store’s assets and recognize an impairment charge for the excess net book value of the store’s long-lived assets over their fair
value.

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NOTE 3 – DEBT

Bank Credit Facility
On August 31, 2018, we entered into a $700 million five-year unsecured credit facility (“2018 Credit Agreement”). The 2018
Credit Agreement expires on August 31, 2023. In connection with our entry into the 2018 Credit Agreement, we paid bank fees
and other expenses in the aggregate amount of $1.5 million, which are being amortized over the term of the agreement.

Borrowings under the 2018 Credit Agreement are available for general corporate purposes, working capital, and to repay
certain indebtedness. The 2018 Credit Agreement includes a $30 million swing loan sublimit, a $75 million letter of credit
sublimit, a $75 million sublimit for loans to foreign borrowers, and a $200 million optional currency sublimit. The interest
rates, pricing and fees under the 2018 Credit Agreement fluctuate based on our debt rating. The 2018 Credit Agreement allows
us to select our interest rate for each borrowing from multiple interest rate options. The interest rate options are generally
derived from the prime rate or LIBOR. We may prepay revolving loans made under the 2018 Credit Agreement. The 2018
Credit Agreement contains financial and other covenants, including, but not limited to, limitations on indebtedness, liens and
investments, as well as the maintenance of two financial ratios - a leverage ratio and a fixed charge coverage ratio. The
covenants of the 2018 Credit Agreement do not restrict our ability to pay dividends. Additionally, we are subject to cross-
default provisions associated with the synthetic lease for our distribution center in Apple Valley, CA. A violation of any of the
covenants could result in a default under the 2018 Credit Agreement that would permit the lenders to restrict our ability to
further access the 2018 Credit Agreement for loans and letters of credit and require the immediate repayment of any outstanding
loans under the 2018 Credit Agreement. At January 30, 2021, we had no borrowings outstanding under the 2018 Credit
Agreement, while $6.7 million was committed to outstanding letters of credit, leaving $693.3 million available under the 2018
Credit Agreement.

Secured Equipment Term Note
On August 7, 2019, we entered into a $70 million term note agreement (“2019 Term Note”), which is secured by the equipment
at our California distribution center. The 2019 Term Note will expire on May 7, 2024. We are required to make monthly
payments over the term of the 2019 Term Note and are permitted to prepay, subject to penalties, at any time. The interest rate
on the 2019 Term Note is 3.3%. In connection with our entry into the 2019 Term Note, we paid debt issuance costs of $0.2
million.

Debt was recorded in our consolidated balance sheets as follows:

Instrument (In thousands)

2019 Term Note

2018 Credit Agreement

Total debt

Less current portion of long-term debt (included in
Accrued operating expenses)

Long-term debt

January 30, 2021

February 1, 2020

50,264

—

50,264

(14,500)

35,764

64,291

229,200

293,491

(14,027)

279,464

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NOTE 4 – FAIR VALUE MEASUREMENTS

In 2020, we invested a portion of the proceeds from the sale of four distribution centers (see note 10 to the accompanying
consolidated financial statements for additional information on the sale and leaseback transactions) in highly liquid investments,
including money market funds, commercial paper, and treasury bills, of which only money market funds were held at
January 30, 2021. These highly liquid investments were recorded in cash and cash equivalents in our consolidated balance
sheets at their fair value. The fair values of the money market fund investments were Level 1 valuations under the fair value
hierarchy because each fund’s quoted market value per share was available in an active market.

In connection with our nonqualified deferred compensation plan, we had mutual fund investments, which were recorded in
other assets. These investments were classified as trading securities and were recorded at their fair value. The fair values of
mutual fund investments were Level 1 valuations under the fair value hierarchy because each fund’s quoted market value per
share was available in an active market.

As of January 30, 2021, the fair value of our investments were recorded in our consolidated balance sheets as follows:

(In thousands)

Assets:

Balance Sheet Location

January 30, 2021

Level 1

Money market funds

Cash and cash equivalents

Mutual funds - deferred compensation plan

Other Assets

175,113 $

32,484

175,113

32,484

As of February 1, 2020, the fair value of our investments were recorded in our consolidated balance sheets as follows:

(In thousands)

Assets:

Balance Sheet Location

February 1, 2020

Level 1

Money market funds

Cash and cash equivalents

Mutual funds - deferred compensation plan

Other Assets

— $

33,715

—

33,715

The fair values of our long-term obligations under the 2018 Credit Agreement are estimated based on quoted market prices for
the same or similar issues and the current interest rates offered for similar instruments. These fair value measurements are
classified as Level 2 within the fair value hierarchy. The carrying value of these instruments was $0 as of January 30, 2021.

The fair value of our long-term obligations under the 2019 Term Note are based on quoted market prices and are classified as
Level 2 within the fair value hierarchy. The carrying value of the instrument approximates its fair value.

The carrying value of accounts receivable and accounts payable approximates fair value because of the relatively short maturity
of these items.

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NOTE 5 – LEASES

Our leased property consists of our retail stores, distribution centers, store security, and other office equipment.

In November 2017, we entered into a synthetic lease arrangement (the “Synthetic Lease”) for our Apple Valley, CA distribution
center. The term of the Synthetic Lease commenced in the second quarter of 2019 and will expire 5 years after commencement.
The Synthetic Lease is included in our operating lease right-of-use assets and operating lease liabilities.

In the second quarter of 2020, we completed sale and leaseback transactions for our distribution centers located in Columbus,
OH; Durant, OK; Montgomery, AL; and Tremont, PA. The leases for the Columbus, OH and Montgomery, AL distribution
centers each have an initial term of 15 years and multiple five-year extension options. The leases for the Durant, OK and
Tremont, PA distribution centers each have an initial term of 20 years and multiple five-year extension options. At lease
commencement, we determined that none of the extension options were reasonably certain to be exercised. Therefore, none of
the extension options were included in the computation of the operating lease liabilities and operating lease right-of-use assets.
At commencement of the leases, we recorded aggregate operating lease liabilities of $466.1 million and aggregate operating
lease right-of-use assets of $466.1 million. The weighted average discount rate for the leases was 6.2%. All of the leases are
absolute net. Additionally, all of the leases include a right of first refusal beginning after the fifth year of the initial term which
allows us to purchase the leased property if the buyer-lessor receives a bona fide purchase offer from a third-party. For
additional information on the sale and leaseback transactions, see note 10 to the accompanying consolidated financial
statements.

Leases were recorded in our consolidated balance sheets as follows:

Leases (In thousands)

Balance Sheet Location

January 30, 2021 February 1, 2020

Assets

Operating
Finance

Total right-of-use assets
Liabilities
Current
Operating
Finance
Noncurrent
Operating
Finance

Total lease liabilities

Operating lease right-of-use assets
Property and equipment - net

Current operating lease liabilities
Accrued operating expenses

Noncurrent operating lease liabilities
Other liabilities

1,649,009 $
3,667
1,652,676 $

1,202,252
7,436
1,209,688

226,075 $
3,190

212,144
3,650

1,465,433
1,242
1,695,940 $

1,035,377
4,482
1,255,653

The components of lease costs were as follows:

Lease cost (In thousands)

Operating lease cost
Finance lease cost

Statements of Operations and Comprehensive
Income Location

2020

2019

Selling and administrative expenses

326,780 $

295,810

Amortization of leased assets Depreciation
Interest on lease liabilities

Interest expense
Selling and administrative expenses
Selling and administrative expenses

Short-term lease cost
Variable lease cost
Total lease cost

3,800
274
4,728
88,074
423,656 $

4,373
948
5,671
81,666
388,468

In 2020 and 2019, our operating lease cost above included $0.9 million and $3.6 million, respectively, of right-of-use asset
impairment charges related to store closures prior to lease termination date.

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Maturity of our lease liabilities at January 30, 2021, was as follows:

Fiscal Year (In thousands)

Operating Leases

Finance Leases

2021

2022

2023

2024

2025

Thereafter

Total lease payments

Less amount to discount to present value

Present value of lease liabilities

288,500

3,820

308,518

275,233

231,367

191,446

849,370

2,144,434

(452,926)

1,691,508

586

124

—

4,602

(170)

4,432

Lease term and discount rate for our operating leases were as follows:

Weighted average remaining lease term (years)

Weighted average discount rate

8.7

4.5 %

6.4

4.1 %

January 30, 2021

February 1, 2020

Our weighted average discount rate represents our estimated incremental borrowing rate, assuming a secured borrowing, based
on the remaining lease term at the time of adoption of the standard, lease commencement, or the period in which the lease term
expectation was modified. Our finance leases, and the associated remaining lease term and discount rate, are insignificant.

Disclosures Related to Periods Prior to Adoption of ASC 842, Leases
Under ASC 840, Leases, total rent expense, including real estate taxes, CAM, and property insurance for operating leases
consisted of the following:

(In thousands)

Minimum rents

Contingent rents
Total rent expense

2018

346,067

168

346,235

NOTE 6 – SHAREHOLDERS’ EQUITY

Earnings per Share
There were no adjustments required to be made to weighted-average common shares outstanding for purposes of computing
basic and diluted earnings per share and there were no securities outstanding in any year presented, which were excluded from
the computation of earnings per share other than antidilutive stock options, restricted stock awards, restricted stock units, PSUs,
and PRSUs. Stock options outstanding that were excluded from the diluted share calculation because their impact was
antidilutive at the end of 2019 and 2018 were insignificant. There were no stock options outstanding at the end of 2020.

The restricted stock units, PSUs, and PRSUs that were antidilutive, as determined under the treasury stock method, were
immaterial for 2020, 0.3 million for 2019 and immaterial for 2018.

A reconciliation of the number of weighted-average common shares outstanding used in the basic and diluted earnings per share
computations is as follows:

(In thousands)

Weighted-average common shares outstanding:

Basic

Dilutive effect of share-based awards

Diluted

2020

2019

2018

38,233

39,244

834

107

39,067

39,351

40,809

153

40,962

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Share Repurchases
On August 27, 2020, our Board of Directors authorized the repurchase of up to $500 million of our common shares (“2020
Repurchase Authorization”). Pursuant to the 2020 Repurchase Authorization, we may repurchase shares in the open market
and/or in privately negotiated transactions at our discretion, subject to market conditions and other factors. The 2020
Repurchase Authorization has no scheduled termination date. During 2020, we acquired 3.8 million shares for $172.8 million
under the 2020 Repurchase Authorization.

Common shares acquired through repurchase programs are held in treasury at cost and are available to meet obligations under
equity compensation plans and for general corporate purposes.

Dividends
The Company declared and paid cash dividends per common share during the periods presented as follows:

2019:

First quarter

Second quarter

Third quarter

Fourth quarter

Total

2020:

First quarter

Second quarter

Third quarter

Fourth quarter

Total

Dividends
Per Share

Amount
Declared

Amount Paid

(In thousands)

0.30

1.20

0.30

1.20

12,206

12,196

11,954

11,930

48,286

11,905

12,335

11,993

11,749

47,982

13,197

11,718

11,792

11,714

48,421

12,478

11,807

11,540

11,139

46,964

The amount of dividends declared may vary from the amount of dividends paid in a period due to the vesting of restricted stock
units and performance share units, which accrue dividend equivalent rights that are paid when the award vests. The payment of
future dividends will be at the discretion of our Board of Directors and will depend on our financial condition, results of
operations, capital requirements, compliance with applicable laws and agreements and any other factors deemed relevant by our
Board of Directors.

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NOTE 7 – SHARE-BASED PLANS

Our shareholders approved the Big Lots 2020 Long-Term Incentive Plan (“2020 LTIP”) in June 2020. The 2020 LTIP authorizes
the issuance of incentive and nonqualified stock options, restricted stock, restricted stock units, deferred stock units, performance
shares, PSUs, performance units, stock appreciation rights, cash-based awards, and other share-based awards. We have issued
restricted stock units under the 2020 LTIP. The number of common shares available for issuance under the 2020 LTIP consists of an
initial allocation of 3,600,000 common shares plus any common shares subject to the 1,360,943 outstanding awards as of February
1, 2020 under the Big Lots 2017 Long-Term Incentive Plan (“2017 LTIP”) that, on or after February 1, 2020, cease for any reason
to be subject to such awards (other than by reason of exercise or settlement). The Compensation Committee of our Board of
Directors (“Committee”), which is charged with administering the 2020 LTIP, has the authority to determine the terms of each
award.

Our former equity compensation plan, the 2017 LTIP, approved by our shareholders in May 2017, was terminated on June 10, 2020.
The 2017 LTIP authorized the issuance of incentive and nonqualified stock options, restricted stock, restricted stock units, deferred
stock awards, PSUs, stock appreciation rights, cash-based awards, and other share-based awards. We have issued restricted stock
units, PSUs, and PRSUs under the 2017 LTIP.

During 2020, all nonqualified stock options granted to employees under the Big Lots 2012 Long-Term Incentive Plan (“2012
LTIP”) were exercised or expired. There were no nonqualified stock options outstanding at January 30, 2021.

Share-based compensation expense was $26.2 million, $13.1 million, and $26.3 million in 2020, 2019, and 2018, respectively.

Non-vested Restricted Stock
The following table summarizes the non-vested restricted stock awards and restricted stock units activity for fiscal years 2018, 2019,
and 2020:

Outstanding non-vested restricted stock at February 3, 2018

Granted

Vested

Forfeited

Outstanding non-vested restricted stock at February 2, 2019

Granted

Vested
Forfeited

Outstanding non-vested restricted stock at February 1, 2020
Granted

Vested

Forfeited

Outstanding non-vested restricted stock at January 30, 2021

Weighted
Average
Grant-Date
Fair Value
Per Share

Number of
Shares

589,843 $

354,457

(413,261)

(47,857)

483,182 $

440,014

(202,101)
(72,585)

648,510 $
1,031,213

(308,797)

(156,714)

1,214,212 $

44.77

45.38

42.60

44.49

46.50

33.54

46.26
39.89

38.52
18.18

40.65

22.80

22.71

The non-vested restricted stock units granted in 2018, 2019, and 2020 generally vest, and are expensed, on a ratable basis over three
years from the grant date of the award, if a threshold financial performance objective is achieved and the grantee remains employed
by us through the vesting dates.

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Performance Share Units
In 2020, we awarded PRSUs to certain members of senior management, which vest based on the achievement of share price
performance goals and a minimum service requirement of one year. The PRSUs have a contractual term of three years. We use a
Monte Carlo simulation to estimate the fair value of the PRSUs on the grant date and recognize expense over the derived service
period. If the share price performance goals applicable to the PRSUs are not achieved prior to expiration, the unvested portion of the
awards will be forfeited. Shares issued in connection with vested PRSUs are generally restricted from sale, transfer, or other
disposition prior to the third anniversary of the grant date except under certain circumstances, including death, disability, or change
in control. At January 30, 2021, the share price performance goals applicable to all outstanding PRSUs had been attained and we
expect the outstanding PRSUs to vest in 2021.

Prior to 2020, we awarded PSUs to certain members of management, which will vest if certain financial performance objectives are
achieved over a three-year performance period and the grantee remains employed by us through that performance period. The
financial performance objectives for each fiscal year within the three-year performance period are generally approved by the
Committee during the first quarter of the respective fiscal year. In 2020, due to lack of business visibility resulting from the
COVID-19 pandemic, the Committee deferred establishing the third and final financial performance objectives for the PSUs issued
in 2018 until the third quarter of 2020. At January 30, 2021, 737,818 non-vested PSUs and PRSUs were outstanding in the
aggregate.

As a result of the process used to establish the financial performance objectives, we will only meet the requirements of establishing
a grant date for the PSUs when we communicate the financial performance objectives for the third fiscal year of the award to the
award recipients, which will then trigger the service inception date, the fair value of the awards, and the associated expense
recognition period. If we meet the applicable threshold financial performance objectives over the three-year performance period and
the grantee remains employed by us through the end of the performance period, the PSUs will vest on the first trading day after we
file our Annual Report on Form 10-K for the last fiscal year in the performance period.

We have begun, or expect to begin, recognizing expense related to PSUs and PRSUs as follows:

Issue Year

2018

2019

2020

Total

Outstanding PSUs
and PRSUs at
January 30, 2021

134,463

263,787

339,568

737,818

Actual Grant Date

August 2020

April 2020

Expected Valuation
(Grant) Date

Actual or Expected
Expense Period

March 2021

Fiscal 2020

Fiscal 2021

Fiscal 2020 - 2021

The number of shares to be distributed upon vesting of the PSUs depends on our average performance attained during the three-year
performance period as compared to the targets defined by the Committee, and may result in the distribution of an amount of shares
that is greater or less than the number of PSUs granted, as defined in the award agreement. At January 30, 2021, we estimate the
attainment of an average performance that is substantially greater than the average targets established for the PSUs issued in 2018.
In 2020, 2019, and 2018, we recognized $14.2 million, $1.2 million and $14.9 million, respectively, in share-based compensation
expense related to PSUs and PRSUs.

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The following table summarizes the activity related to PSUs and PRSUs for fiscal years 2018, 2019, and 2020:

Outstanding PSUs and PRSUs at February 3, 2018

Granted

Vested

Forfeited

Outstanding PSUs and PRSUs at February 2, 2019

Granted

Vested

Forfeited

Outstanding PSUs and PRSUs at February 1, 2020

Granted

Vested

Forfeited

Outstanding PSUs and PRSUs at January 30, 2021

Weighted
Average
Grant-Date
Fair Value
Per Share

Number of
Shares

249,324 $

337,421

(249,324)

(55,338)

282,083 $

217,518

(282,083)

(35,596)

181,922 $

580,285

(181,062)

(107,114)

474,031 $

51.49

55.67

51.49

46.31

55.67

31.89

55.67

31.89

24.53

31.89

25.56

24.31

Board of Directors’ Awards
In 2018, we granted (1) the chairman of our Board of Directors an annual restricted stock unit award having a grant date fair value
of approximately $200,000, and (2) the remaining non-employee directors an annual restricted stock unit award having a grant date
fair value of approximately $135,000. In 2019 and 2020, we granted (1) the chairman of our Board of Directors an annual restricted
stock unit award having a grant date fair value of approximately $210,000, and (2) the remaining non-employee directors an annual
restricted stock unit award having a grant date fair value of approximately $145,000. These awards vest on the earlier of (1) the
trading day immediately preceding the annual meeting of our shareholders following the grant of such awards or (2) the death or
disability of the grantee. However, the non-employee directors will forfeit their restricted stock units if their service on the Board
terminates before either vesting event occurs. Additionally, we allow our non-employee directors to defer all or a portion of their
restricted stock unit award and by such election, the non-employee directors can defer receipt of their restricted stock units until the
earlier of the first to occur of: (1) the specified date by the non-employee director in the deferral agreement, (2) the non-employee
director’s death or disability, or (3) the date the non-employee director ceases to serve as a member of the Board of Directors.

During 2020, 2019, and 2018, the following activity occurred under our share-based compensation plans:

(In thousands)

Total intrinsic value of stock options exercised

Total fair value of restricted stock vested
Total fair value of performance shares vested

2020

2019

2018

161 $

7,102
924

42 $

6,452
9,849

228

19,240
12,792

The total unearned compensation cost related to all share-based awards outstanding, excluding PSUs issued in 2019, at January 30,
2021 was approximately $17.2 million. This compensation cost is expected to be recognized through November 2023 based on
existing vesting terms with the weighted-average remaining expense recognition period being approximately 1.8 years from
January 30, 2021.

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NOTE 8 – INCOME TAXES

The provision for income taxes was comprised of the following:

(In thousands)

Current:

U.S. Federal

U.S. State and local

Total current tax expense

Deferred:

U.S. Federal

U.S. State and local

Total deferred tax expense

Income tax provision

2020

2019

2018

206,883 $

60,947

267,830

(40,848)

(11,567)

(52,415)

15,495 $

7,215

22,710

48,613

3,761

52,374

215,415 $

75,084 $

35,025

10,341

45,366

5,300

5,353

50,719

Reconciliation between the statutory federal income tax rate and the effective income tax rate was as follows:

Statutory federal income tax rate

Effect of:

State and local income taxes, net of federal tax benefit

Executive compensation limitations - permanent difference

Work opportunity tax and other employment tax credits

Excess tax detriment (benefit) from share-based compensation

Other, net

Effective income tax rate

Income tax payments and refunds were as follows:

2020

2019

2018

21.0 %

4.6

0.2

(0.3)

0.2

(0.2)

2.7

0.4

(0.8)

0.4

(0.1)

4.0

0.7

(1.4)

0.4

(0.3)

25.5 %

23.6 %

24.4 %

(In thousands)

Income taxes paid

Income taxes refunded

Net income taxes paid

2020

2019

2018

217,308 $

(1,522)

215,786 $

29,375 $

(2,313)

27,062 $

59,691

(474)

59,217

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Deferred taxes reflect the net tax effects of temporary differences between carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for income tax, including income tax uncertainties. Significant components
of our deferred tax assets and liabilities were as follows:

January 30, 2021

February 1, 2020

449,058 $

(In thousands)

Deferred tax assets:

Lease liabilities, net of lease incentives

Depreciation and fixed asset basis differences

Sale and leaseback financing liability

Uniform inventory capitalization

Workers’ compensation and other insurance reserves

Compensation related

Accrued payroll taxes related to CARES Act

Accrued operating liabilities

Accrued state taxes

State tax credits, net of federal tax benefit

Other

Valuation allowances, net of federal tax benefit

Total deferred tax assets

Deferred tax liabilities:

Right-of-use assets, net of amortization

Accelerated depreciation and fixed asset basis differences

Synthetic lease obligation

Deferred gain on like-kind exchange

Lease construction reimbursements

Prepaid expenses

37,117

32,263

24,050

20,692

20,171

9,367

4,011

4,045

2,470

14,500

(2,105)

615,639

421,801

111,427

34,438

14,809

9,216

4,539

3,591

7,251

607,072

8,567 $

327,499

37,430

—

22,611

21,013

16,378

—

3,674

3,027

3,495

13,907

(2,674)

446,360

305,091

100,187

34,485

15,382

18,920

5,039

3,507

7,597

490,208

(43,848)

Workers’ compensation and other insurance reserves

Other

Total deferred tax liabilities

Net deferred tax assets (liabilities)

Our deferred tax assets and deferred tax liabilities, netted by tax jurisdiction, are summarized in the table below:

(In thousands)

U.S. Federal
U.S. State and local

Net deferred tax assets (liabilities)

January 30, 2021

February 1, 2020

(7,762) $
16,329

8,567 $

(48,610)
4,762

(43,848)

We have the following income tax loss and credit carryforwards at January 30, 2021 (amounts are shown net of tax excluding
the federal income tax effect of the state and local items):

(In thousands)

U.S. State and local:

State net operating loss carryforwards

15 Expires predominately during fiscal year 2021

California enterprise zone credits

2,958 Predominately expires fiscal year 2023

Other state credits

168 Expires fiscal years through 2025

Total income tax loss and credit carryforwards

3,141

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The following is a tabular reconciliation of the total amounts of unrecognized tax benefits for 2020, 2019, and 2018:

(In thousands)

2020

2019

2018

Unrecognized tax benefits - beginning of year

10,760 $

11,986 $

Gross increases - tax positions in current year

Gross increases - tax positions in prior period

Gross decreases - tax positions in prior period

Settlements

Lapse of statute of limitations

728

745

(1,871)

(20)

(877)

976

1,031

(2,333)

(484)

(416)

11,673

1,649

1,025

(1,827)

403

(937)

Unrecognized tax benefits - end of year

9,465 $

10,760 $

11,986

At the end of 2020 and 2019, the total amount of unrecognized tax benefits that, if recognized, would affect the effective
income tax rate is $7.1 million and $8.4 million, respectively, after considering the federal tax benefit of state and local income
taxes of $1.3 million and $1.4 million, respectively. Unrecognized tax benefits of $1.1 million and $1.0 million in 2020 and
2019, respectively, relate to tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty
about the timing of such deductibility. The uncertain timing items could result in the acceleration of the payment of cash to the
taxing authority to an earlier period.

We recognized an expense (benefit) associated with interest and penalties on unrecognized tax benefits of approximately $(0.4)
million, $(1.1) million, and $(0.7) million during 2020, 2019, and 2018, respectively, as a component of income tax expense.
The amount of accrued interest and penalties recognized in the accompanying consolidated balance sheets at January 30, 2021
and February 1, 2020 was $3.9 million and $4.3 million, respectively.

We are subject to U.S. federal income tax, and income tax of multiple state and local jurisdictions. The statute of limitations for
assessments on our federal income tax returns for periods prior to 2017 has lapsed. In addition, the state income tax returns filed
by us are subject to examination generally for periods beginning with 2006, although state income tax carryforward attributes
generated prior to 2006 and non-filing positions may still be adjusted upon examination. We have various state returns in the
process of examination or administrative appeal.

We have estimated the reasonably possible expected net change in unrecognized tax benefits through January 29, 2022, based
on expected cash and noncash settlements or payments of uncertain tax positions and lapses of the applicable statutes of
limitations for unrecognized tax benefits. The estimated net decrease in unrecognized tax benefits for the next 12 months is
approximately $3.0 million. Actual results may differ materially from this estimate.

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NOTE 9 – COMMITMENTS, CONTINGENCIES AND LEGAL PROCEEDINGS

California Wage and Hour Matters
We currently are defending several wage and hour matters in California. The cases were brought by various current and/or
former California associates alleging various violations of California wage and hour laws. Upon further consideration of these
matters, including outcomes of cases against other retailers, during the first quarter of 2019, we determined a loss from these
matters was probable and we increased our accrual for litigation by recording a $7.3 million charge as our best estimate for
these matters in aggregate. Since the end of the first quarter of 2019, we have settled and/or reached settlement agreements,
including preliminary approval by the courts, in each of the class actions. We intend to defend ourselves vigorously against the
allegations levied in the remaining individual lawsuits. We believe the existing accrual for litigation remains appropriate.

Shareholder and Derivative Matters
In 2012, three shareholder derivative lawsuits were filed in the U.S. District Court for the Southern District of Ohio against us
and certain of our current and former outside directors and executive officers. The lawsuits were consolidated, and, on August
13, 2012, plaintiffs filed a consolidated complaint captioned In re Big Lots, Inc. Shareholder Litigation , No. 2:12-cv-00445
(S.D. Ohio) (the “Consolidated Derivative Action”). The consolidated complaint asserted various claims under Ohio law,
including for breach of fiduciary duty. On December 14, 2017, the parties entered into a Stipulation and Agreement of
Settlement and plaintiffs filed an Unopposed Motion for Preliminary Approval of Derivative Settlement with the Court. On
August 28, 2018, the Court issued an Order granting final approval of the Settlement.

Also in 2012, a putative securities class action lawsuit captioned Willis, et al. v. Big Lots, Inc., et al., 2:12-cv-00604 (S.D. Ohio)
was filed in the U.S. District Court for the Southern District of Ohio on behalf of persons who acquired our common shares
between February 2, 2012 and April 23, 2012. Effective May 16, 2018, the parties executed a Stipulation of Settlement. On
November 9, 2018, the Court issued an Order granting final approval of the Settlement.

In connection with the settlement of the Willis class action and the Consolidated Derivative Action, during the first quarter of
2018, we recorded a net charge of $3.5 million related to the expected cost of the settlements for the funds in excess of our
insurance coverage. During the second quarter of 2018, the settlement associated with the Willis class action was paid into
escrow and has since been released.

Other Matters
We are involved in other legal actions and claims arising in the ordinary course of business. We currently believe that each such
action and claim will be resolved without a material effect on our financial condition, results of operations, or liquidity.
However, litigation involves an element of uncertainty. Future developments could cause these actions or claims to have a
material effect on our financial condition, results of operations, and liquidity.

We are self-insured for certain losses relating to property, general liability, workers’ compensation, and employee medical,
dental, and prescription drug benefit claims, a portion of which is paid by employees, and we have purchased stop-loss
coverage in order to limit significant exposure in these areas. Accrued insurance liabilities are actuarially determined based on
claims filed and estimates of claims incurred but not reported. We use letters of credit, which amounted to $41.0 million at
January 30, 2021, as collateral to back certain of our self-insured losses with our claims administrators.

We have purchase obligations for outstanding purchase orders for merchandise issued in the ordinary course of our business
that are valued at $722.5 million, the entirety of which represents obligations due within one year of January 30, 2021. We have
additional purchase obligations in the amount of $401.2 million primarily related to distribution and transportation, information
technology, print advertising, energy procurement, and other store security, supply, and maintenance commitments.

Table of Contents

NOTE 10 - GAIN ON SALE OF DISTRIBUTION CENTER

In the second quarter of 2020, we completed sale and leaseback transactions for our distribution centers located in Columbus,
OH; Durant, OK; Montgomery, AL; and Tremont, PA. The aggregate sale price for the transactions was $725.0 million. Due to
sale-leaseback accounting requirements, the proceeds received in the transactions were allocated between proceeds on the sale
of the distribution centers and financing proceeds. Accordingly, aggregate net proceeds, before income taxes, on the sales of the
distribution centers were $586.9 million and the aggregate gain on the sales was $463.1 million. Additionally, we incurred $4.0
million of additional selling and administrative expenses in connection with the transaction, which primarily consisted of
consulting services. The remainder of consideration received was financing liability proceeds of $134.0 million. The current
portion of the financing liability was recorded in accrued operating expenses in our consolidated balance sheets. The noncurrent
portion of the financing liability was recorded in other liabilities in our consolidated balance sheets. Interest expense will be
recognized on the financing liability using the effective interest method and the financing liability will be accreted over the
duration of the lease agreements. Future payments to the buyer-lessor will be allocated between the financing liability and the
lease liabilities. See note 5 to the accompanying consolidated financial statements for information on the lease agreements.

In connection with our entrance into the sale and leaseback transactions, we agreed to repay all borrowings outstanding under
the 2018 Credit Agreement and restrict our borrowings under the 2018 Credit Agreement for 90 days following closing of the
transactions.

Aggregate initial annual cash payments to the buyer-lessor, including payments of the financing liability and lease payments,
are approximately $50 million and the payments escalate two percent annually. Aggregate annual straight-line rent expense for
the four leases is approximately $46 million. Aggregate initial annual interest expense on the financing liability, which will
decrease over the term, is approximately $8 million.

In the third quarter of 2019, we completed the sale of our distribution center located in Rancho Cucamonga, CA. As part of our
agreement with the purchaser, we leased the property back from the purchaser for several months while we wound down our
operations at the distribution center. The Rancho Cucamonga, CA distribution center was closed in the first quarter of 2020. Net
proceeds from the sale of the distribution center were $190.3 million and our gain on the sale was $178.5 million.

Table of Contents

NOTE 11 – BUSINESS SEGMENT DATA

We use the following seven merchandise categories, which match our internal management and reporting of merchandise net
sales: Food; Consumables; Soft Home; Hard Home; Furniture; Seasonal; and Electronics, Toys, & Accessories. The Food
category includes our beverage & grocery; candy & snacks; and specialty foods departments. The Consumables category
includes our health, beauty and cosmetics; plastics; paper; chemical; and pet departments. The Soft Home category includes the
home décor; frames; fashion bedding; utility bedding; bath; window; decorative textile; home organization; and area rugs
departments. The Hard Home category includes our small appliances; table top; food preparation; stationery; and home
maintenance departments. The Furniture category includes our upholstery; mattress; ready-to-assemble; and case goods
departments. The Seasonal category includes our lawn & garden; summer; Christmas; and other holiday departments. The
Electronics, Toys, & Accessories category includes our electronics; jewelry; hosiery; apparel; and toys departments.

We periodically assess, and make minor adjustments to, our product hierarchy, which can impact the roll-up of our merchandise
categories. Our financial reporting process utilizes the most current product hierarchy in reporting net sales by merchandise
category for all periods presented. Therefore, there may be minor reclassifications of net sales by merchandise category
compared to previously reported amounts.

The following table presents net sales data by merchandise category:

(In thousands)

Furniture

Soft Home

Consumables

Seasonal

Food

Electronics, Toys, & Accessories

Hard Home

Net sales

2020

2019

2018

1,736,932 $

1,427,129 $

1,286,995

1,048,970

932,259

815,378

798,950

438,450

428,247

853,434

803,593

773,720

757,351

344,947

363,006

828,451

799,038

765,619

782,988

367,418

407,596

6,199,186 $

5,323,180 $

5,238,105

Table of Contents

NOTE 12 – SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

Summarized fiscal quarterly financial data for 2020 and 2019 is as follows:

Fiscal Year 2020

First

Second

Third

Fourth

Year

(In thousands, except per share amounts) (a)

Net sales

Gross margin

Net income

Earnings per share:

Basic

Diluted

$ 1,439,149 $ 1,644,197 $ 1,377,925 $ 1,737,915 $ 6,199,186

570,756

683,564

557,893

685,173

2,497,386

49,323

451,972

29,910

97,986

629,191

1.26 $

1.26

11.52 $

11.29

0.79 $

0.76

2.68 $

2.59

16.46

16.11

Fiscal Year 2019

First

Second

Third

Fourth

Year

(In thousands, except per share amounts) (a)

Net sales

Gross margin

Net income

Earnings per share:

Basic

Diluted

$ 1,295,796 $ 1,252,414 $ 1,167,988 $ 1,606,982 $ 5,323,180

519,047

498,230

463,386

634,019

2,114,682

15,540

6,178

126,982

93,764

242,464

0.39 $

0.39

0.16 $

0.16

3.25 $

3.25

2.40 $

2.39

6.18

6.16

(a) Earnings per share calculations for each fiscal quarter are based on the applicable weighted-average shares outstanding for
each period, and the sum of the earnings per share for the four fiscal quarters may not necessarily be equal to the full year
earnings per share amount.

NOTE 13 – RESTRUCTURING COSTS

In March 2019, we announced a transformational restructuring initiative, referred to as “Operation North Star,” to both drive
growth in our net sales and reduce costs within our business. The goal of the initiative was to generate costs savings from this
initiative through improved markdown and merchandise management, reduced management layers, optimization of store labor,
improved efficiencies in our supply chain, and reduced central and other costs. With the initial implementation of this initiative
in 2019, we incurred upfront costs, including employee severance costs and consultancy fees, and made payments to execute
the initiative of $38.3 million. The remaining obligation associated with severance and postemployment benefits was
immaterial and $2.2 million at January 30, 2021 and February 1, 2020, respectively.

Table of Contents

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Principal Executive Officer and Principal Financial Officer, has evaluated the
effectiveness of our disclosure controls and procedures, as that term is defined in Rules 13a-15(e) and 15d-15(e) of the
Securities Exchange Act of 1934, as amended (“Exchange Act”), as of the end of the period covered by this report. Based on
that evaluation, our Principal Executive Officer and Principal Financial Officer have each concluded that such disclosure
controls and procedures were effective as of the end of the period covered by this report.

Management’s Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in
Rules 13a-15(f) and 15d-15(f) under the Exchange Act) for us. Our internal control over financial reporting is designed to
provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in
accordance with accounting principles generally accepted in the United States of America.

Management assessed the effectiveness of our internal control over financial reporting as of January 30, 2021. In making its
assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway
Commission in Internal Control - Integrated Framework (2013 Framework). Based on this assessment, management, including
our Principal Executive Officer and Principal Financial Officer, concluded that we maintained effective internal control over
financial reporting as of January 30, 2021.

Our independent registered public accounting firm, Deloitte & Touche LLP, has issued an attestation report on our internal
control over financial reporting. The report appears in the Financial Statements and Supplementary Data section of this Form
10-K.

Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during our most recent fiscal quarter that
have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information

None.

Table of Contents

Item 10. Directors, Executive Officers and Corporate Governance

Part III

The information contained under the captions “Proposal One: Election of Directors,” “Governance,” and “Stock Ownership” in
our definitive Proxy Statement for our 2021 annual meeting of shareholders ( “2021 Proxy Statement”), with respect to
directors, shareholder nomination procedures, the code of ethics, the Audit Committee, our audit committee financial experts,
and Section 16(a) beneficial ownership reporting compliance, is incorporated herein by reference in response to this item. The
information contained in Part I of this Form 10-K under the caption “Supplemental Item. Executive Officers of the Registrant,”
with respect to executive officers, is incorporated herein by reference in response to this item.

In the “Investors” section of our website (www.biglots.com) under the “Corporate Governance” and “SEC Filings” captions,
the following information relating to our corporate governance may be found: Corporate Governance Guidelines; charters of
our Board of Directors’ Audit, Capital Allocation Planning, Compensation, and Nominating/Corporate Governance
Committees, and our Public Policy and Environmental Affairs Committee; Code of Business Conduct and Ethics; Code of
Ethics for Financial Officers; Chief Executive Officer and Chief Financial Officer certifications related to our SEC filings; the
means by which shareholders may communicate with our Board of Directors; and transactions in our securities by our directors
and executive officers. The Code of Business Conduct and Ethics applies to all of our associates, including our directors and
our principal executive officer, principal financial officer, and principal accounting officer. The Code of Ethics for Financial
Professionals applies to our Chief Executive Officer and all other Senior Financial Officers (as that term is defined therein) and
contains provisions specifically applicable to the individuals serving in those positions. We intend to satisfy the requirement
under Item 5.05 of Form 8-K regarding disclosure of any amendments to, and any waivers from, our Code of Business Conduct
and Ethics (to the extent applicable to our directors and executive officers (including our principal executive officer, principal
financial officer, and principal accounting officer)) and our Code of Ethics for Financial Professionals in the “Investors” section
of our website (www.biglots.com) under the “Corporate Governance” caption. We will provide any of the foregoing
information without charge upon written request to our Corporate Secretary addressed to our principal executive offices at 4900
E. Dublin-Granville Road, Columbus, Ohio 43081.

Item 11. Executive Compensation

The information contained under the caption “Governance” with respect to Compensation Committee interlocks and insider
participation and under the captions “Director Compensation,” “Executive Compensation” and “Compensation Committee
Report” in the 2021 Proxy Statement is incorporated herein by reference in response to this item.

Table of Contents

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Equity Compensation Plan Information
The following table summarizes information as of January 30, 2021, relating to our equity compensation plans pursuant to
which our common shares may be issued.

Number of securities
to be issued upon
exercise of
outstanding options,
warrants, and rights
(#)

Weighted-average
exercise price of
outstanding options,
warrants, and
rights ($)

Number of securities
remaining available
for future issuance
under equity
compensation plans
(excluding securities
reflected in column
(a)) (#)

(a)

(b)

(c)

1,952,030 (1)

—

1,952,030

— (2)

—

— (2)

3,659,048 (3)

—

3,659,048

Plan Category
Equity compensation plans approved by
security holders
Equity compensation plans not approved
by security holders

Total

(1)

Includes performance share units, performance restricted share units, and restricted stock units granted under the
2020 LTIP and the 2017 LTIP.

(2) The weighted average exercise price does not take into account the performance share units, performance restricted

share units, and the restricted stock units granted under the 2020 LTIP and 2017 LTIP.

(3) The common shares available for issuance under the 2020 LTIP are limited to 3,659,048 common shares. There are

no common shares available for issuance under any of the other shareholder-approved plans.

The 2017 LTIP was approved in May 2017 and was terminated in June 2020. The 2020 LTIP was approved in June 2020. See
note 7 to the accompanying consolidated financial statements.

The information contained under the caption “Stock Ownership” in the 2021 Proxy Statement, with respect to the security
ownership of certain beneficial owners and management, is incorporated herein by reference in response to this item.

Item 13. Certain Relationships and Related Transactions, and Director Independence

The information contained under the caption “Governance” in the 2021 Proxy Statement, with respect to the determination of
director independence and related person transactions, is incorporated herein by reference in response to this item.

Item 14. Principal Accountant Fees and Services

The information contained under the captions “Audit Committee Disclosure” in the 2021 Proxy Statement, with respect to our
audit and non-audit services pre-approval policy and the fees paid to our independent registered public accounting firm,
Deloitte & Touche LLP, is incorporated herein by reference in response to this item.

Table of Contents

Item 15. Exhibits and Financial Statement Schedules

Index to Consolidated Financial Statements, Financial Statement Schedules and Exhibits

Part IV

(a)

(1)

Documents filed as part of this report:

Financial Statements

Reports of Independent Registered Public Accounting Firm

Consolidated Statements of Operations and Comprehensive Income

Consolidated Balance Sheets

Consolidated Statements of Shareholders’ Equity

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

All other financial statements not listed in the preceding index are omitted because they are not required or are not applicable or
because the information required to be set forth therein either was not material or is included in the consolidated financial
statements or notes thereto.

(2)

Financial Statement Schedules

All schedules are omitted because they are not required or are not applicable or because the information required to be set forth
therein either was not material or is included in the consolidated financial statements or notes thereto.

Exhibits. Exhibits marked with an asterisk (*) are filed herewith. The Exhibit marked with two asterisks (**) is
(3)
furnished electronically with this Annual Report. Certain portions of the exhibits marked with a pound sign (#) have been
excluded from the exhibit pursuant to Item 601(b)(10)(iv) of Regulation S-K. Copies of exhibits will be furnished upon written
request and payment of our reasonable expenses in furnishing the exhibits. Exhibits 10.1 through 10.23 are management
contracts or compensatory plans or arrangements.

Exhibit No.
2

3.1

3.2

3.3

4.1

4.2*

10.1

10.2

10.3

10.4

Document
Agreement of Merger (incorporated herein by reference to Exhibit 2 to our Form 10-Q for the quarter ended
May 5, 2001) (File No. 1-8897).
Amended Articles of Incorporation (incorporated herein by reference to Exhibit 3(a) to our Form 10-Q for
the quarter ended May 5, 2001) (File No. 1-8897).
Amendment to the Amended Articles of Incorporation of Big Lots, Inc. (incorporated herein by reference to
Exhibit 3.1 to our Form 8-K dated May 27, 2010) (File No. 1-8897).
Amended Code of Regulations of Big Lots, Inc. (incorporated herein by reference to Exhibit 4.3 to our
Form S-8 dated June 10, 2020).
Specimen Common Share Certificate (incorporated herein by reference to Exhibit 4(a) to our Form 10-K for
the year ended February 2, 2002) (File No. 1-8897).
Description of Big Lots, Inc.’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act
of 1934.
Big Lots 2017 Long-Term Incentive Plan (incorporated herein by reference to Appendix A to our definitive
proxy statement on Schedule 14A relating to the 2017 Annual Meeting of Shareholders filed April 11,
2017).

Form of Big Lots 2017 Long-Term Incentive Plan Restricted Stock Units Award Agreement (incorporated
herein by reference to Exhibit 10.1 to our Form 10-Q for the quarter ended April 29, 2017).
Form of Big Lots 2017 Long-Term Incentive Plan Performance Share Units Award Agreement
(incorporated herein by reference to Exhibit 10.2 to our Form 10-Q for the quarter ended April 29, 2017).
Form of Big Lots 2017 Long-Term Incentive Plan Restricted Stock Units Retention Award Agreement
(incorporated herein by reference to Exhibit 10.1 to our Form 10-Q for the quarter ended August 4, 2018).

Table of Contents

Exhibit No.
10.5

10.6

10.7

10.8

10.9

10.10

10.11

10.12

10.13

10.14

10.15

10.16

10.17

10.18

10.19

10.20

10.21

10.22

10.23

10.24

10.25

10.26

10.27

10.28

10.29

Document
Form of Big Lots 2017 Long-Term Incentive Plan Deferral Election Form and Deferred Stock Units Award
for Non-Employee Directors (incorporated herein by reference to Exhibit 10.1 to our Form 10-Q for the
quarter ended October 28, 2017).

Form of Big Lots 2017 Long-Term Incentive Plan Performance Share Units Award Agreement
(incorporated herein by reference to Exhibit 10.1 to our Form 8-K dated April 3, 2020).
Big Lots 2020 Long-Term Incentive Plan (incorporated herein by reference to Appendix A to the
Registrant’s definitive proxy statement on Schedule 14A relating to the 2020 Annual Meeting of
Shareholders of the Registrant filed with the Commission on May 1, 2020 (File No. 1-8897)).

Form of Big Lots 2020 Long-Term Incentive Plan Restricted Stock Units Award Agreement for Non-
Employee Directors (incorporated herein by reference to Exhibit 10.3 to our Form 10-Q for the quarter
ended May 2, 2020).
Form of Big Lots 2020 Long-Term Incentive Plan Restricted Stock Units Award Agreement (incorporated
herein by reference to Exhibit 10.4 to our Form 10-Q for the quarter ended May 2, 2020).
Form of Big Lots 2020 Long-Term Incentive Plan Deferral Election Form and Deferred Stock Unit Award
Agreement for Non-Employee Directors (incorporated herein by reference to Exhibit 10.5 to our Form 10-Q
for the quarter ended May 2, 2020).
Form of Big Lots 2020 Long-Term Incentive Plan Restricted Performance Share Units Award Agreement
(incorporated herein by reference to Exhibit 10.6 to our Form 10-Q for the quarter ended May 2, 2020).
Form of Big Lots 2020 Long-Term Incentive Plan Performance Share Units Award Agreement
(incorporated herein by reference to Exhibit 10.1 to our Form 8-K dated March 9, 2021).
Form of Big Lots 2020 Long-Term Incentive Plan Restricted Stock Units Award Agreement (incorporated
herein by reference to Exhibit 10.2 to our Form 8-K dated March 9, 2021).
Big Lots 2019 Bonus Plan (incorporated herein by reference to Exhibit 10.1 to our Form 8-K dated March
5, 2019).
Big Lots Savings Plan (incorporated herein by reference to Exhibit 10.8 to our Form 10-K for the year
ended January 29, 2005) (File No. 1-8897).
Big Lots Supplemental Savings Plan, as amended and restated effective December 31, 2015 (incorporated
herein by reference to Exhibit 10.25 to our Form 10-K for the year ended January 30, 2016).
Big Lots Executive Benefit Plan (incorporated herein by reference to Exhibit 10(m) to our Form 10-K for
the year ended January 31, 2004) (File No. 1-8897).
First Amendment to Big Lots Executive Benefit Plan (incorporated herein by reference to Exhibit 10.11 to
our Form 10-Q for the quarter ended November 1, 2008) (File No. 1-8897).
Offer Letter with Bruce Thorn (incorporated herein by reference to Exhibit 10.1 to our Form 8-K dated
August 21, 2018).
Second Amended and Restated Employment Agreement with Lisa M. Bachmann (incorporated herein by
reference to Exhibit 10.2 to our Form 8-K dated April 29, 2013).
Form of Indemnification Agreement (incorporated herein by reference to Exhibit 10.12 to our Form 10-Q
for the quarter ended November 1, 2008) (File No. 1-8897).
Big Lots Executive Severance Plan (incorporated herein by reference to Exhibit 10.1 to our Form 8-K dated
August 28, 2014).
Form of Big Lots Executive Severance Plan Acknowledgment and Agreement (incorporated by reference to
Exhibit 10.2 to our Form 8-K dated August 28, 2014).
Credit Agreement, dated August 31, 2018, by and among Big Lots, Inc. and Big Lots Stores, Inc., as
borrowers, the Guarantors named therein, and the Banks named therein (incorporated herein by reference to
Exhibit 10.1 to our Form 8-K dated August 29, 2018).

Security Agreement between Big Lots Stores, Inc. and Big Lots Capital, Inc. (incorporated herein by
reference to Exhibit 10.2 to our Form 8-K dated October 29, 2004) (File No. 1-8897).
Stock Purchase Agreement between KB Acquisition Corporation and Consolidated Stores Corporation
(incorporated herein by reference to Exhibit 2(a) to our Form 10-Q for the quarter ended October 28, 2000)
(File No. 1-8897).

Acquisition Agreement between Big Lots, Inc. and Liquidation World Inc. (incorporated herein by
reference to Exhibit 10.1 to our Form 8-K dated May 26, 2011) (File No. 1-8897).
AVDC Participation Agreement incorporated herein by reference to Exhibit 10.40 to our Form 10-K for the
year ended February 3, 2018) (File No. 1-8897).
AVDC Lease Agreement (Real Property) (incorporated herein by reference to Exhibit 10.41 to our Form
10-K for the year ended February 3, 2018) (File No. 1-8897).

Table of Contents

Exhibit No.
10.30

10.31

10.32#

10.33#

21*

23*

24*

31.1*

31.2*

32.1*

32.2*

101.Def*

101.Pre*

101.Lab*

101.Cal*

101.Sch

101.Ins

104

Document
AVDC Construction Agency Agreement (incorporated herein by reference to Exhibit 10.42 to our Form 10-
K for the year ended February 3, 2018) (File No. 1-8897).
Settlement Agreement dated April 22, 2020, by and among Big Lots, Inc., Ancora Advisors, LLC, Ancora
Merlin Institutional, LP, Ancora Merlin, LP, Ancora Catalyst Institutional, LP, Ancora Catalyst, LP, Ancora
Catalyst SPV I LP, Ancora Catalyst SPV I SPC Ltd. - Segregated Portfolio C, Macellum Advisors GP,
LLC, Macellum Management, LP, and Macellum Opportunity Fund LP. (incorporated herein by reference
to Exhibit 10.1 to our Form 8-K dated April 22, 2020).
Agreement for Purchase and Sale of Real Property, as amended, between Durant DC, LLC and
BIGDUOK001 LLC relating to the registrant’s distribution center located in Durant, Oklahoma.
(incorporated herein by reference to Exhibit 10.1 to our Form 10-Q for the quarter ended August 1, 2020).
Lease Agreement, as amended, between Big Lots Stores, Inc. and BIGCOOH002, LLC relating to the
registrant’s distribution center located in Columbus, OH (incorporated herein by reference to Exhibit 10.1 to
our Form 10-Q for the quarter ended October 31, 2020).
Subsidiaries.

Consent of Deloitte & Touche LLP.

Power of Attorney for James R. Chambers, Andrew C. Clarke, Sebastian J. DiGrande, Marla C. Gottschalk,
Cynthia T. Jamison, Thomas A. Kingsbury, Christopher J. McCormick, Nancy A. Reardon, and Wendy L.
Schoppert.
Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

XBRL Taxonomy Definition Linkbase Document

XBRL Taxonomy Presentation Linkbase Document

XBRL Taxonomy Labels Linkbase Document

XBRL Taxonomy Calculation Linkbase Document

XBRL Taxonomy Schema Linkbase Document

XBRL Taxonomy Instance Document - the instance document does not appear in the Interactive Date File
because its XBRL tags are embedded within the Inline XBRL document
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

Item 16. Form 10-K Summary

None.

Table of Contents

Signatures

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized, on this 30th day of March 2021.

BIG LOTS, INC.

By: /s/ Bruce K. Thorn
Bruce K. Thorn

President and Chief Executive Officer
(Principal Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following
persons on behalf of the Registrant and in the capacities indicated on the 30th day of March 2021.

By: /s/ Bruce K. Thorn
Bruce K. Thorn

President and Chief Executive Officer

(Principal Executive Officer)

By: /s/ Jonathan E. Ramsden
Jonathan E. Ramsden

Executive Vice President, Chief Financial and
Administrative Officer
(Principal Financial Officer, Principal Accounting Officer
and Duly Authorized Officer)

/s/ James R. Chambers *
James R. Chambers

Director

/s/ Andrew C. Clarke *
Andrew C. Clarke

Director

/s/ Sebastian J. DiGrande *
Sebastian J. DiGrande

Director

/s/ Marla C. Gottschalk *
Marla C. Gottschalk

Director

/s/ Cynthia T. Jamison *
Cynthia T. Jamison

Director

/s/ Thomas A. Kingsbury *
Thomas A. Kingsbury

Director

/s/ Christopher J. McCormick *
Christopher J. McCormick

Director

/s/ Nancy A. Reardon *
Nancy A. Reardon

Director

/s/ Wendy L. Schoppert *
Wendy L. Schoppert

Director

* The above named Directors of the Registrant execute this report by Ronald A. Robins, Jr., their attorney-in-fact, pursuant
to the power of attorney executed by the above-named Directors all in the capacities indicated and on the 4th day of March
2021, and filed herewith.

By: /s/ Ronald A. Robins, Jr.

Ronald A. Robins, Jr.

Attorney-in-Fact

EXHIBIT 4.2

DESCRIPTION OF BIG LOTS, INC.’S SECURITIES
REGISTERED PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934

As of January 30, 2021, Big Lots, Inc. (the “Company,” “we,” “us” or “our”) had one class of securities
registered under Section 12 of the Securities Exchange Act of 1934, as amended: the Company’s common shares,
par value $.01 per share (the “common shares”).

The following summary describes the material features of our capital stock. This summary is subject to, and
qualified in its entirety by reference to, our Amended Articles of Incorporation (the “Articles”) and our Amended
Code of Regulations (the “Regulations”), each of which is filed as an exhibit to the Annual Report on Form 10-K of
which this exhibit is a part, and the applicable provisions of Ohio law.

Authorized Capital Stock

Our authorized capital stock consists of 298,000,000 common shares, par value $.01 per share (the common
shares”) and 2,000,000 preferred shares, par value $.01 per share (the “preferred shares”). As of January 30, 2021,
there were 35,535,274 common shares issued and outstanding, 81,960,121 common shares held by us in treasury
and no preferred shares issued and outstanding.

Common Shares

Holders of our common shares are entitled to:

•

one vote for each share held;

receive dividends when, as and if declared by our board of directors from funds legally available
therefor, subject to the rights of holders of preferred shares, if any; and

share ratably in our net assets legally available to our shareholders in the event of our liquidation,
dissolution or winding up, after provision for the distribution of preferential amounts to the
holders of preferred shares, if any.

Holders of our common shares have no preemptive, subscription, redemption, conversion, exchange or
cumulative voting rights. The rights, preferences and privileges of the holders of our common shares are subject to,
and may be adversely affected by, the rights, preferences and privileges of holders of our preferred shares, including
any preferred shares that we may designate and issue in the future.

In all director elections other than uncontested elections, plurality voting will apply and the director
nominees receiving the greatest number of votes cast for their election will be elected as directors. An “uncontested
election” generally means an election of directors at a meeting of shareholders in which the number of nominees for
election does not exceed the number of directors to be elected. Our Articles impose a majority vote standard in
uncontested elections of directors and our Corporate Governance Guidelines contain a majority vote policy
applicable to uncontested elections of directors. Article Eighth of our Articles provides that if a quorum is present at
the Annual Meeting, a director nominee in an uncontested election will be elected to our board of directors if the
number of votes cast for such nominee’s election exceeds the number of votes cast against and/or withheld from
such nominee’s election. The majority vote policy contained in our Corporate Governance Guidelines requires any
nominee for director who does not receive more votes cast for such nominee’s election than votes cast against and/or
withheld as to his or her election to deliver his or her resignation from our board of directors to the Nominating /
Corporate Governance Committee. Upon its receipt of such resignation, the Nominating / Corporate Governance
Committee will promptly consider the resignation and recommend to our board of directors whether to accept the
resignation or to take other action.

Except as otherwise provided by law or as set forth in “Anti-Takeover Effects of Articles, Regulations and
the Ohio General Corporation Law” below, at any shareholder meeting at which a quorum is present all business
which comes before such meeting will be determined by the vote of the holders of a majority of the voting power.

Our common shares are listed on the New York Stock Exchange (“NYSE”) under the trading symbol

“BIG.” Our outstanding common shares are fully paid and nonassessable.

Preferred Shares

Our Articles authorize our board of directors to issue, without any further vote or action by our
shareholders, subject to certain limitations prescribed by law and the rules of the NYSE, up to an aggregate of
2,000,000 preferred shares in one or more series on such terms as our board of directors may determine. Subject to
applicable law, our board of directors is also authorized to fix or change the division of such shares into series and
the designation and authorized number of shares of each series; the dividend or distribution rights; dividend rate;
liquidation rights, preferences and price; redemption rights and price; sinking fund requirements; voting rights; pre-
emptive rights; conversion rights; restrictions on issuance of shares; and such other rights, preferences and
limitations as shall not be inconsistent with our Articles. Absent a determination by our board of directors to
establish different voting rights, holders of preferred shares will be entitled to one vote per share on matters to be
voted upon by the holders of common shares and preferred shares voting together as a single class, except that the
Ohio General Corporation Law entitles the holders of preferred shares to exercise a class vote on certain matters.

Our board of directors may authorize the issuance of preferred shares with voting, conversion or other
rights that could adversely affect the voting power or other rights of the holders of our common shares. The issuance
of preferred shares could have the effect of decreasing the market price of our common shares, decreasing the
amount of earnings and assets available for distribution to holders of our common shares and creating restrictions
upon the payment of dividends and other distributions to holders of our common shares. The issuance of preferred
shares also could have the effect of delaying, deterring or preventing a change in control of us without further action
by our shareholders.

Anti-Takeover Effects of Articles, Regulations and the Ohio General Corporation Law

Certain provisions in our Articles and Regulations and the Ohio General Corporation Law could discourage
potential takeover attempts and make attempts by shareholders to change management more difficult. These
provisions could also adversely affect the market price of our common shares.

Blank Check Preferred Shares. As discussed above under “— Preferred Shares,” our Articles authorize our
board of directors to issue, without any further vote or action by our shareholders, subject to certain limitations
prescribed by law and the rules of NYSE, up to an aggregate of 2,000,000 preferred shares in one or more classes or
series. Our board of directors may authorize the issuance of preferred shares with voting or conversion rights that
could adversely affect the voting power or other rights of the holders of our common shares. The issuance of
preferred shares could have the effect of decreasing the market price of our common shares. The issuance of
preferred shares also could have the effect of delaying, deterring or preventing a change in control without further
action by our shareholders.

Limited Shareholder Action by Written Consent. Section 1701.54 of the Ohio General Corporation Law
requires that an action by written consent of the shareholders in lieu of a meeting be approved by all shareholders
who would be entitled to notice of such meeting, except that, pursuant to Section 1701.11 of the Ohio General
Corporation Law, a corporation’s code of regulations may be amended by an action by written consent of holders of
shares entitling them to exercise two-thirds of the voting power of the corporation or, if the corporation’s articles of
incorporation or code of regulations otherwise provide, such greater or lesser amount, but not less than a
majority. Our Regulations provide that they may be amended without a meeting by the written consent of holders of
shares entitling them to exercise two-thirds of our voting power of the corporation. This provision may have the
effect of delaying, deferring or preventing a tender offer, takeover attempt or other corporate action subject to
approval by our shareholders.

Calling of Special Meetings of Shareholders. Pursuant to our Regulations, special meetings of shareholders
may be called only by the chairman of the board, the chief executive officer, the president, or, in case of the
president’s absence, death, or disability, the vice president or other officer authorized to exercise the authority of the
president; the secretary; the directors by action at a meeting, or a majority of the directors acting without a meeting;
or the holders of at least twenty-five percent (25%) of all shares outstanding and entitled to vote thereat.

Control Share Acquisition Act. Section 1701.831 of the Ohio General Corporation Law, known as the
Control Share Acquisition Act, provides that certain notice and informational filings, and special shareholder
meeting and voting procedures, must occur prior to any acquisition of shares of an “issuing public corporation” that
would entitle the acquirer to exercise or direct the voting power of the “issuing public corporation” in the election of
directors within any of the following ranges:

•

one-fifth or more but less than one-third of such voting power;

one-third or more but less than a majority of such voting power; and

a majority or more of such voting power.

An “issuing public corporation” is an Ohio corporation with 50 or more shareholders that has its principal
place of business, principal executive offices or substantial assets within Ohio, and as to which no close corporation
agreement exists. The Control Share Acquisition Act does not apply to a corporation if its articles of incorporation
or code of regulations so provide. We have not opted out of the application of the Control Share Acquisition Act.

Merger Moratorium Statute. Chapter 1704 of the Ohio Revised Code, known as the Merger Moratorium
Statute, prohibits specified business combinations and other transactions (including mergers, consolidations, asset
sales, loans, disproportionate distributions of property and disproportionate issuances or transfers of shares or rights
to acquire shares) between an Ohio corporation and an “Interested Shareholder” (as such term is defined in Section
1704.01 of the Ohio Revised Code) for a period of three years after a person becomes an Interested Shareholder,
unless, prior to such date, the directors approved either the business combination or other transaction or approved
the acquisition that caused the person to become an Interested Shareholder. Under the Merger Moratorium Statute,
an Interested Shareholder generally includes any beneficial owner of shares of an Ohio corporation who, alone or
with others, may exercise or direct the exercise of at least 10% of the voting power of the corporation in the election
of directors.

Following the three-year moratorium period, the corporation may engage in the covered transaction with

the Interested Shareholder only if:

•

the transaction receives the approval of the holders of shares entitling them to exercise at least
two-thirds of the voting power of the corporation in the election of directors (or a different
proportion specified in the corporation’s articles of incorporation), including at least a majority of
the voting shares held by persons other than an Interested Shareholder; or

the remaining shareholders receive an amount for their shares equal to the higher of the highest
amount paid in the past by the Interested Shareholder for the corporation’s shares or the amount
that would be due to the shareholders if the corporation were to dissolve.

The Merger Moratorium Statute does not apply to a corporation if its articles of incorporation or code of

regulations so provide. We have not opted out of the application of the Merger Moratorium Statute.

Name

Big Lots Capital, Inc.

Big Lots F&S, Inc.

Big Lots Online LLC

Big Lots Stores, Inc.

BLSI Property, LLC

Capital Retail Systems, Inc.

Closeout Distribution, Inc.

Consolidated Property Holdings, Inc.

CSC Distribution, LLC

C.S. Ross Company

Durant DC, LLC

Great Basin LLC

Industrial Products of New England, Inc.
Mac Frugal's Bargains Close‑outs Inc.
Midwestern Home Products, Inc.

PNS Stores, Inc.

Sahara LLC

Sonoran LLC

Tool and Supply Company of New England, Inc.

West Coast Liquidators, Inc.

Barn Acquisition Corporation

Fashion Barn, Inc.

Fashion Barn of Oklahoma, Inc.

Fashion Bonanza, Inc.

Midwestern Home Products Company, Ltd.

Rogers Fashion Industries, Inc.

SS Investments Corporation

BLC LLC

Liquidation Services, Inc.
Liquidation World U.S.A. Holding Corp.

Liquidation World U.S.A Inc.

LQW Traders Inc.

North American Solutions, Inc.

Talon Wholesale, Inc.

Big Lots eCommerce LLC

AVDC, Inc.

BLHQ LLC

Broyhill, LLC

SUBSIDIARIES

EXHIBIT 21

Jurisdiction

DE
DE

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the Registration Statements listed below on Form S-8 of our reports dated
March 30, 2021, relating to the consolidated financial statements of Big Lots, Inc. and subsidiaries (the “Company”), and the
effectiveness of the Company’s internal control over financial reporting, appearing in this Annual Report on Form 10-K of the
Company for the year ended January 30, 2021.

EXHIBIT 23

Post-Effective Amendment No. 1 to Registration Statement No. 33-42692 on Form S-8 pertaining to Big Lots,
Inc. Supplemental Savings Plan;
Post-Effective Amendment No. 2 to Registration Statement No. 33-19309 on Form S-8 pertaining to Big Lots,
Inc. Savings Plan;
Post-Effective Amendment No. 1 to Registration Statement No. 333-32063 on Form S-8 pertaining to Big Lots,
Inc. 1996 Performance Incentive Plan;
Registration Statement No. 333-218262 on Form S-8 pertaining to the Big Lots 2017 Long-Term Incentive Plan;
and
Registration Statement No. 333-239066 on Form S-8 pertaining to the Big Lots 2020 Long-Term Incentive Plan;

/s/ DELOITTE & TOUCHE LLP

Columbus, Ohio

March 30, 2021

POWER OF ATTORNEY

EXHIBIT 24

Each director of Big Lots, Inc. (the “Company”) whose signature appears below hereby appoints Ronald A. Robins, Jr. as the
undersigned’s attorney-in-fact to sign, in the undersigned’s name and on behalf of each such director and in any and all
capacities stated below, and to cause to be filed with the Securities and Exchange Commission (the “Commission”), the
Company’s Annual Report on Form 10-K (the “Form 10-K”) for the 2020 fiscal year ended January 30, 2021, and likewise to
sign and file with the Commission any and all amendments thereto, including any and all exhibits and other documents required
to be included therewith, and the Company hereby also appoints Ronald A. Robins, Jr. as its attorney-in-fact with like authority
to sign and file the Form 10-K and any amendments thereto, granting to such attorneys-in-fact full power of substitution and
revocation, and hereby ratifying all that any such attorneys-in-fact or their substitutes may do by virtue hereof.

IN WITNESS WHEREOF, each of the undersigned has executed this instrument to be effective as of March 4, 2021.

Signature

/s/ James R. Chambers

James R. Chambers

/s/ Andrew C. Clarke

Andrew C. Clarke

/s/ Sebastian J. DiGrande

Sebastian J. DiGrande

/s/ Marla C. Gottschalk

Marla C. Gottschalk

/s/ Cynthia T. Jamison

Cynthia T. Jamison

/s/ Thomas A. Kingsbury

Thomas A. Kingsbury

/s/ Christopher J. McCormick

Christopher J. McCormick

/s/ Nancy A. Reardon

Nancy A. Reardon

/s/ Wendy L. Schoppert

Wendy L. Schoppert

Title

Director

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

EXHIBIT 31.1

I, Bruce K. Thorn, certify that:

I have reviewed this annual report on Form 10-K of Big Lots, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present

in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the
periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period
in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial

reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles;

evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report
our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred

during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control
over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or
persons performing the equivalent functions):

all significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and

any fraud, whether or not material, that involves management or other employees who have a significant role
in the registrant's internal control over financial reporting.

Dated: March 30, 2021

By: /s/ Bruce K. Thorn
Bruce K. Thorn
President and Chief Executive Officer
(Principal Executive Officer)

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

EXHIBIT 31.2

I, Jonathan E. Ramsden, certify that:

I have reviewed this annual report on Form 10-K of Big Lots, Inc.;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present

in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the
periods presented in this report;

b) designed such internal control over financial reporting, or caused such internal control over financial

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred

any fraud, whether or not material, that involves management or other employees who have a significant role
in the registrant's internal control over financial reporting.

Dated: March 30, 2021

By: /s/ Jonathan E. Ramsden
Jonathan E. Ramsden
Executive Vice President, Chief Financial and
Administrative Officer
(Principal Financial Officer)

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

EXHIBIT 32.1

This certification is provided pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002, and accompanies the annual report on Form 10-K (the “Report”) for the year
ended January 30, 2021, of Big Lots, Inc. (the “Company”). I, Bruce K. Thorn, President and Chief Executive Officer of the
Company, certify that:

(i)

the Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of
1934 (15 U.S.C. 78m or 78o(d)); and

(ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of

operations of the Company.

Dated: March 30, 2021

By: /s/ Bruce K. Thorn
Bruce K. Thorn
President and Chief Executive Officer
(Principal Executive Officer)

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

EXHIBIT 32.2

This certification is provided pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002, and accompanies the annual report on Form 10-K (the “Report”) for the year
ended January 30, 2021, of Big Lots, Inc. (the “Company”). I, Jonathan E. Ramsden, Executive Vice President, Chief Financial
and Administrative Officer of the Company, certify that:

(i)

the Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of
1934 (15 U.S.C. 78m or 78o(d)); and

(ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of

operations of the Company.

Dated: March 30, 2021

By: /s/ Jonathan E. Ramsden
Jonathan E. Ramsden
Executive Vice President, Chief Financial and
Administrative Officer
(Principal Financial Officer)