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EXHIBIT 10(b)
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT is entered into as of the 19th day of May,
1998, by and among CONSOLIDATED STORES CORPORATION, a Delaware corporation
("CSC"), CONSOLIDATED STORES CORPORATION, an Ohio corporation ("Consolidated")
(CSC and Consolidated are hereinafter jointly referred to as "Employer"), and
Xxxxxxx X. Xxxxxx, an individual residing in Florida ("Executive").
W I T N E S S E T H:
WHEREAS, Employer and Executive desire to enter into this Employment
Agreement to insure to Employer and Employer's direct and indirect subsidiaries
the services of Executive and to set forth the rights and duties of the parties
thereto; and
WHEREAS, Executive is a director of each of CSC and Consolidated; and
WHEREAS, the Board of Directors of CSC and Consolidated have elected
Executive as the Chairman of the Board of Directors and Chief Executive Officer
of each of CSC and Consolidated.
NOW, THEREFORE, in consideration of the mutual promises herein
contained, the parties agree as follows:
1. EMPLOYMENT; DUTIES.
(a) EMPLOYMENT. Employer employs Executive as the senior
officer of each of CSC and Consolidated, with such
duties as may from time to time be prescribed by the
Board of Directors of CSC and Consolidated and as the
Chairman of the Board of Directors and Chief
Executive Officer of each of CSC and Consolidated,
and Executive hereby accepts such employment, on the
terms and conditions hereinafter set forth.
(b) DUTIES. During the term of this Employment Agreement,
Executive shall devote his entire business time and
attention to his employment and perform diligently
such duties as are customarily performed by the
Chairman of the Board of Directors and Chief
Executive Officer of a company the size and structure
of CSC and its subsidiaries, together with, as of the
date hereof, such other duties as may be reasonably
requested from time to time by the Board of Directors
of CSC or Consolidated, which duties shall be
consistent with his position as set forth above and
in Paragraph 2 of this Employment Agreement.
Executive shall cooperate and work with all
committees formed by the Board of Directors of CSC or
Consolidated including, but not limited to, the Audit
Committee, the Compensation Committee, and the
Nominating Committee. As Chief Executive Officer,
Executive shall have the authority to implement the
policies and deci-
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EXHIBIT 10(b)
sions of the Board of Directors and to direct
Employer's business strategy, development and
operations. So long as Executive shall serve as Chief
Executive Officer, Executive shall report only to the
Board of Directors of each of CSC and Consolidated
and shall not be subject to the authority, direction
or discretion of any officer, whether in a position
now existing or hereafter created or appointed. All
employees of CSC and Consolidated shall, directly or
indirectly, report to Executive.
Any material adverse modification or diminution of
Executive's duties or diminution in Executive's
authority, title or office shall be considered to be
a Change in Control of Employer and shall entitle
Executive, in addition to any other rights he may
have, to the rights and remedies provided in
Paragraph 7(d) hereof; PROVIDED, HOWEVER, that
Executive shall notify Employer of any alleged such
modification or diminution, specifying the same, and
Employer shall have a period of fifteen (15) days
after such notice to cure such alleged modification
or diminution before Executive shall be entitled to
exercise any such rights and remedies. The right of
Employer to cure any modification or diminution in
Executive's authority, title or office set forth in
the immediately preceding sentence shall be
applicable only in the event that a "Change in
Control" shall have occurred solely by reason of such
modification or diminution of duties or authority and
shall not be applicable following the occurrence of
any change in Control as defined in Paragraph 7(f)
below.
(c) FULL TIME AND ATTENTION. Except as expressly
permitted herein, Executive shall not, without the
prior written consent of Employer, directly or
indirectly during the term of this Employment
Agreement, render services of a business,
professional or commercial nature to any other person
or firm, whether for compensation or otherwise. So
long as it does not interfere with his full time
employment hereunder, Executive may (i) attend to
outside investments and serve as a director, trustee
or officer of or otherwise participate in
educational, welfare, social, religious and civic
organizations and (ii) serve as a director of not
more than two (2) public corporations that are not
engaged in the Company Business (as defined in
Paragraph 9(a) hereof).
(d) BUSINESS DECISIONS. Executive shall have no liability
to Employer for any act or omission undertaken during
the term of this Employment Agreement in his good
faith business judgment in furtherance of his duties
as prescribed in or under this Employment Agreement.
2. TERM AND POSITIONS.
(a) TERM. Subject to the provisions for termination as
hereinafter provided, the term of this Employment
Agreement shall begin on May 19, 1998 and shall
continue thereafter until Executive's employment is
terminated as provided in Paragraph 7. This
Employment Agreement supersedes and replaces the
December 12,
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EXHIBIT 10(b)
1989 Employment Agreement between Employer and
Executive as amended on January 26, 1995.
(b) POSITIONS. Executive shall, without any compensation
in addition to that which is specifically provided in
this Employment Agreement, serve as an officer of CSC
and of Consolidated and in such substitute or further
offices or positions with Employer or any subsidiary
of Employer as shall from time to time be reasonably
requested by the Board of Directors of CSC. Each
office and position with Employer or any subsidiary
of Employer in which Executive may serve or to which
he may be appointed shall be consistent in title and
duties with Executive's position as Chief Executive
Officer of Employer. For service as a director or
officer of CSC, Consolidated or any subsidiary of
either of them, which service shall in each instance
be deemed to be at the request of CSC and its Board
of Directors, Executive shall be entitled to the
protection of the applicable indemnification
provisions of the charter and by-laws of CSC,
Consolidated and any such subsidiary and Employer
agrees to indemnify and hold harmless Executive from
and against any claims, liabilities, damages or
expenses incurred by Executive in or arising out of
the status, capacities and activities as an officer
or director of CSC, Consolidated and any subsidiary
of either to the maximum extent permitted by law. For
purposes of this Employment Agreement, all references
herein to subsidiaries of CSC and/or Consolidated
shall be deemed to include references to subsidiaries
now or hereafter existing.
3. COMPENSATION.
(a) SALARY. For all services he may render to CSC and
Consolidated (and any subsidiary of either of them)
during the term of this Employment Agreement, as
determined by the Compensation Committee of the CSC
Board of Directors on February 23, 1998, Employer
shall pay to Executive, commencing on February 1,
1998, a salary at the rate (the "Salary Rate") of
Nine Hundred Thirty-five Thousand Dollars
($935,000.00) per annum, subject to adjustment by the
Board of Directors of CSC, payable in those
installments customarily used in payment of salaries
to Employer's executives (but in no event less
frequently than monthly).
(b) BONUS. In addition to the salary compensation as
above stated, Employer shall pay to Executive bonus
compensation during the term of this Employment
Agreement in amounts to be determined and paid as
follows:
(i) Beginning February 1, 1998 for each fiscal
year of Employer completed during the term
of this Employment Agreement, an amount
equal to the Salary Rate at the end of such
fiscal year multiplied by the Bonus Payout
percentage as determined by the Bonus
Program set each fiscal year by the
Compensation Committee of the CSC Board of
Directors. The Bonus Program is based upon
the achievement of Employer's annual
financial plan. The Target Bonus for
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EXHIBIT 10(b)
Executive is 100% of base salary and the
Stretch Bonus for Executive is 200% of base
salary, both of which are defined in the
Bonus Program and are subject to adjustment
by the Board of Directors of CSC.
(ii) Any bonus paid for a fiscal year under
Paragraph 3(b)(i) shall be paid within
forty-five (45) days after Employer's
independent auditor has delivered its
opinion with respect to the financial
statements of Employer for such fiscal year
(whether or not Executive is then in the
employ of Employer). Employer shall use all
reasonable efforts to cause such auditor to
deliver such opinion within ninety (90) days
after the close of such fiscal year.
(iii) For purposes of this Employment Agreement,
the term "fiscal year" shall mean with
respect to any year, the period commencing
on the Sunday next following the Saturday
closest to January 31 in a calendar year and
ending in the next following calendar year
on the Saturday closest to January 31.
4. DISABILITY IN THE EVENT OF DEATH OR PERMANENT DISABILITY. In
the event of a termination of employment as a consequence of
Employee's death or "permanent disability" (as defined below)
during the term of this Employment Agreement:
(a) Executive or his estate, as the case may be, shall be
entitled to receive a pro rata portion of the bonus
applicable to the fiscal year in which such death or
permanent disability occurs, as such bonus is
determined under Paragraph 3(b) of this Employment
Agreement. Such pro rata portion shall be determined
by multiplying a fraction, the numerator of which
shall be the number of days in the applicable fiscal
year elapsed prior to the date of death or permanent
disability, as the case may be, and the denominator
of which shall be 365, by the amount of bonus that
would have been payable, if any, pursuant to such
Paragraph 3(b), if Executive had remained employed
under this Employment Agreement for the entire
applicable fiscal year. The bonus shall be paid when
and as provided in Paragraph 3(b)(ii) of this
Employment Agreement.
(b) Except as otherwise provided in Paragraphs 5, 6 and 8
of this Employment Agreement, Executive shall be
entitled to no further compensation or other benefits
under this Employment Agreement, except as to that
portion of any unpaid salary and other benefits
accrued and earned by him hereunder up to and
including the date of such death or permanent
disability, as the case may be.
(c) For the purposes of this Employment Agreement,
Executive's "permanent disability" occurrence and
benefits shall be determined in the same manner as
are other such occurrences and benefits under
Employer's Disability Policy in effect at the date of
the occurrence.
5. TRANSPORTATION. During the term of this Employment Agreement,
Employer shall provide Executive with a current luxury model
automobile purchased or leased by Em-
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EXHIBIT 10(b)
ployer, in accordance with applicable policies of Employer.
Employer shall pay all maintenance and repair expenses with
respect to the automobile, procure and maintain in force at
Employer's expense collision, comprehensive, and liability
insurance coverage with respect to the automobile, and pay
operating expenses with respect to the automobile to the
extent such operating expenses are incurred in the conduct of
Employer's business. Executive shall be permitted and is
expected to utilize Employer's aircraft for business and
personal travel in order to increase his personal security and
his availability to attend to the Company Business.
6. LIFE INSURANCE AND OTHER BENEFITS.
(a) VACATION AND SICK LEAVE. Executive shall be entitled
to such periods of vacation and sick leave allowance
each year which shall not be less than as provided
under Employer's Vacation and Sick Leave Policy for
executive officers.
(b) GROUP PLANS, ETC. Executive shall be entitled to
participate in any group life, hospitalization, or
disability insurance plan, health program, or other
executive benefit plan (other than bonus compensation
or performance plans to the extent that such plans,
in the case of Executive, are in lieu of the bonus
plan set forth in Paragraph 3(b) above) that is
generally available to senior executive officers, as
distinguished from general management, of Employer.
Executive's participation in and benefits under any
such plan shall be on the terms and subject to the
conditions specified in the governing document of the
particular plan. Executive shall be entitled to 100%
reimbursement of his medical and dental expenses
incurred during the term of this Employment
Agreement.
7. TERMINATION AND FURTHER COMPENSATION.
(a) The employment of Executive under this Employment
Agreement and the term hereof may be terminated:
(i) by Employer or Executive at any time upon
thirty (30) days notice to the other party
of such termination, or
(ii) by Employer on death or permanent disability
of Executive, or
(iii) By Employer for cause at any time. For
purposes hereof, the term "cause" shall
mean:
(A) Executive's conviction of fraud or
a felony or any crime involving
moral turpitude or Executive's
commission of acts of embezzlement
or theft in connection with his
duties or in the course of his
employment with Employer or any
subsidiary;
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(B) Executive's willful breach of any
material provision of this
Employment Agreement which failure
has not been cured in all
substantial respects within ten
(10) days after Employer gives
notice thereof to Executive; or
(C) Executive's willful, wrongful
engagement in any Competitive
Activity (as that term is
hereinafter defined).
Any termination of Executive for "cause"
shall not be effective until all the
following shall have taken place:
(i) The Secretary of CSC pursuant to
resolution of the Board of
Directors of CSC, shall have given
written notice to Executive that,
in the opinion of the Board of
Directors, Executive may be
terminated for cause, specifying
the details;
(ii) Executive shall have been given a
reasonable opportunity to appear
before the Board of Directors prior
to the determination of the Board
evidenced by such resolution;
(iii) With respect to any matters other
than Executive's conviction of
fraud or a felony or a crime
involving moral turpitude,
Executive shall neither have ceased
to engage in the activity giving
rise to the proposed determination
for cause within thirty (30) days
after his receipt of such notice
nor diligently taken all reasonable
steps to that end during such
thirty (30) day period and
thereafter;
(iv) After complying with the procedures
set forth in subparagraphs (i)
through (iii) above, Executive
shall have been delivered a
certified copy of a resolution of
the Board of Directors of CSC
adopted by the affirmative vote of
not less than three-fourths (3/4)
of the entire membership of the
Board of Directors finding that
Executive was guilty of the conduct
giving rise to the termination for
cause.
Any termination by reason of the foregoing
shall not be in limitation of any other
right or remedy Employer may have under this
Employment Agreement, at law, in equity or
otherwise. On any termination of this
Employment Agreement, Executive shall be
deemed to have resigned from all offices and
directorships held by Executive in Employer
and any subsidiaries of CSC.
The term "Competitive Activity" shall mean
Executive's participation, without the
written consent of the Board of Directors of
CSC, in the management of any business
operation of any enterprise if such
operation (a "Competitive Operation")
engages in substantial and direct
competition with Employer or any subsidiary.
For purposes of this Employment Agreement, a
business enterprise shall be considered in
substantial and direct competition with
Employer or any subsidiary if such business
operation's sales of closeout merchandise or
toy merchandise amount to ten percent (10%)
or more of such business operation's
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EXHIBIT 10(b)
total sales. "Competitive Activity" shall
not include (i) the mere ownership of
securities in any publicly traded enterprise
and the exercise of rights appurtenant
thereto or (ii) participation in management
of any publicly traded enterprise or
business operation thereof other than in
connection with the Competitive Operation of
such enterprise.
(b) In the event of termination for any of the
reasons set forth in subparagraph (a)(iii)
of this Paragraph 7, except as otherwise
provided in Paragraph 8 of this Employment
Agreement, Executive shall be entitled to no
further compensation or other benefits under
this Employment Agreement (other than as
provided by law), except as to that portion
of any unpaid salary and other benefits
accrued and earned by him hereunder up to
and including the effective date of such
termination, and Executive shall not be
entitled to receive any bonus determined
under Paragraph 3 of this Employment
Agreement or otherwise, except for and in
respect of completed fiscal years for which
Executive has not then been paid.
(c) In the event of the termination of
Executive's employment by Employer pursuant
to subparagraph (a)(i) above, Executive
shall be entitled to severance compensation
as follows: (x) the continuation of his
compensation for a period of 365 days,
including bonus compensation (as provided
below), and (y) all other benefits and
perquisites to which he is entitled
hereunder for a period of 365 days following
the date of such termination of employment,
except that (i) the benefits and perquisites
referred to in clause (y) shall be sooner
reduced and/or terminated (other than as
provided by law) when and to the extent that
the Executive is entitled to receive the
same from another employer during such
period (but no obligation of Executive to
attempt to mitigate damages under this
subparagraph (c) shall be implied) and (ii)
any bonus compensation to be paid to
Executive in respect of such period shall be
limited solely to the pro rata portion
thereof earned in the fiscal year of
Employer (determined in the manner provided
in Paragraph 3) in which such termination
occurs, except for and in respect of
completed fiscal years for which Executive
has not then been paid.
(d) If there is a Change in Control (as defined
in Section 7(f) hereof) and Executive's
employment is thereupon terminated or
terminated within twenty four (24) months
after the effective date thereof, Executive
shall be entitled to the termination
benefits set forth in Section 7(e) hereof.
For purposes of this Employment Agreement,
Executive's employment shall be deemed to
have been terminated only if Employer
terminates such employment other than for
cause (as defined in Section 7(a)(iii)
hereof) or if a Constructive Termination
occurs. "Constructive Termination" shall
mean a resignation by Executive because of
any material adverse change or material
diminution in Executive's then current
reporting relationships, job description,
duties, responsibilities, compensation,
perquisites, office or location of
employment (as reasonably determined by
Executive in his good faith discretion).
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EXHIBIT 10(b)
(e) The benefits payable to Executive pursuant
to Section 7(d) hereof are as follows:
(i) Consolidated shall pay to Executive
a lump sum cash payment, net of any
applicable withholding taxes in an
amount equal to two times the
annual salary paid or payable to
Executive immediately prior to the
effective date of such Change in
Control (the "Lump Sum Payment");
provided, that if there are fewer
than twenty four (24) months
remaining from the date of
Executive's termination to
Executive's normal retirement date
at age 65, Consolidated shall
instead pay Executive the amount
obtained by multiplying the Lump
Sum Payment by a fraction, the
numerator of which is the number of
months so remaining and the
denominator of which is 24. The
applicable amount shall be paid on
the later of (x) the next business
day after the day Executive's
employment is terminated, or (y)
the next business day after the
effective date of such Change in
Control.
(ii) In addition to the payment
described in Subsection 7(e)(i)
above, Consolidated shall pay to
Executive a lump sum cash payment,
net of any applicable withholding
taxes, in an amount equal to two
times the Executive's then current
annual Stretch Bonus, as defined in
the Bonus Program described in
Subsection 3(b)(i) above (the "Lump
Sum Bonus Payment"); provided, that
(A) in the event the Executive's
then current Stretch Bonus is
undefined or is not subject to a
maximum payout, the Executive's
annual Stretch Bonus shall be
deemed to be 200% of the
Executive's then current base
salary and (B) if there are fewer
than twenty four (24) months
remaining from the date of
Executive's termination to
Executive's normal retirement date
at age 65, Consolidated shall
instead pay Executive the amount
obtained by multiplying the Lump
Sum Bonus Payment by a fraction,
the numerator of which is the
number of months so remaining and
the denominator of which is 24.
Executive shall receive the Lump
Sum Bonus Payment at the same time
Executive receives the Lump Sum
Payment described in Subsection
7(e)(i) above.
(iii) For a period of one year, Executive
(and his family, if their
participation is permitted under
the terms of the subject plan)
shall be entitled to participate in
any group life, hospitalization, or
disability insurance plan, health
program, or other executive benefit
plan (other than bonus compensation
or performance plans to the extent
that such plans, in the case of
Executive, are in lieu of the bonus
plan set forth in Subsection
7(e)(ii) above) that is generally
available to similarly titled
executive officers of Consolidated;
provided, that Executive's
participation in the plans referred
to in this Subsection 7(e)(iii)
shall be terminated (other than as
provided by law) when and to the
extent that Executive is entitled
to receive the same from another
employer during such period.
Executive's participation in and
benefits under any such plan shall
be on the terms and subject to the
conditions specified in the
governing document of the
particular plan, including, but not
limited to, reimbursement of 100%
of all medical
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EXHIBIT 10(b)
and dental expenses incurred during
the period of participation in the
plans referred to above.
(iv) If all or any portion of the amount
payable to Executive under this
Employment Agreement, either alone
or together with other amounts that
Executive is entitled to receive in
connection with a Change in
Control, constitutes "excess
parachute payments," within the
meaning of Section 280G of the
Internal Revenue Code of 1986, as
amended (the "Code"), or successor
provision, that are subject to the
excise tax imposed by Section 4999
of the Code (or any similar tax or
assessment), the amounts payable
hereunder shall be increased to the
extent necessary to place Executive
in the same after-tax position as
Executive would have been in had no
such excise tax or assessment been
imposed on any such payment paid or
payable to Executive under this
Employment Agreement or any other
payment that Executive may receive
as a result of such Change in
Control. The determination of the
amount of any such tax or
assessment and the resulting amount
of incremental payment required
hereby in connection therewith
shall be made by the independent
accounting firm employed by
Consolidated immediately prior to
the applicable Change in Control,
within thirty (30) calendar days
after the payment of the amount
payable pursuant to Subsections
(e)(i), (e)(ii) and (e)(iii)
hereof, and said incremental
payment shall be made within five
(5) business days after said
determination has been made.
(v) If, after the date upon which any
payment required under this
Employment Agreement has been made,
it is determined (pursuant to final
judgment of a court of competent
jurisdiction, or an agreed upon tax
assessment) that the amount of
excise or other similar taxes or
assessments payable by Executive is
greater than the amount initially
so determined, then Consolidated
shall pay Executive an amount equal
to the sum of (i) such additional
excise or other similar taxes, plus
(ii) any interest, fines and
penalties resulting from such
underpayment, plus (iii) an amount
necessary to reimburse Executive
for any income, excise or other tax
or assessment payable by Executive
with respect to the amounts
specified in (i) and (ii) above,
and the reimbursement provided by
this clause (iii). Payment thereof
shall be made within five (5)
business days after the date upon
which such subsequent determination
is made.
(f) As used herein, "Change in Control"
means any of the following events:
(i) any person or group (as defined
for purposes of Section 13(d) of
the Securities Exchange Act of
1934) becomes the beneficial owner
of, or has the right to acquire (by
contract, option, warrant,
conversion of convertible
securities or otherwise), 20% or
more of the outstanding equity
securities of CSC entitled to vote
for the election of directors; (ii)
a majority of the Board of
Directors of CSC is replaced within
any period of two years or less by
directors not nominated and
approved by a majority of the
directors of CSC in office at the
beginning of such period (or their
successors so nominated and
approved), or a majority of the
Board of Di-
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EXHIBIT 10(b)
rectors of CSC at any date consists
of persons not so nominated and
approved; (iii) the stockholders of
CSC approve an agreement to
reorganize, merge or consolidate
with another corporation (other
than Consolidated or an affiliate);
or (iv) the stockholders of CSC
adopt a plan or approve an
agreement to sell or otherwise
dispose of all or substantially all
of CSC's assets (including without
limitation, a plan of liquidation
or dissolution), in a single
transaction or series of related
transactions. The effective date of
any such Change in Control shall be
the date upon which the last event
occurs or last action taken such
that the definition of such Change
in Control (as set forth above) has
been met. For purposes of this
Employment Agreement, the term
"affiliate" shall mean: (i) any
person or entity qualified as part
of an affiliated group which
includes Consolidated and CSC
pursuant to Section 1504 of the
Code; or (ii) any person or entity
qualified as part of a
parent-subsidiary group of trades
and businesses under common control
within the meaning of Treasury
Regulation Section 1.414(c)(2)(b).
Determination of affiliate shall be
tested as of the date immediately
prior to any event constituting a
Change in Control. The other
provisions of this Paragraph 7(f)
notwithstanding, the term "Change
in Control" shall not mean any
transaction, merger, consolidation,
or reorganization in which CSC
exchanges or offers to exchange
newly issued or treasury shares in
an amount less than 50% of the then
outstanding equity securities of
CSC entitled to vote for the
election of directors, for 51% or
more of the outstanding equity
securities entitled to vote for the
election of at least the majority
of the directors of a corporation
other than Employer or an affiliate
thereof (the "Acquired
Corporation"), or for all or
substantially all of the assets of
the Acquired Corporation.
(g) Executive shall provide
Consolidated with at least forty
five (45) days notice of any
election by Executive to terminate
his employment, which shall set
forth in detail the grounds upon
which any Constructive Termination
of Executive's employment is based,
and shall not be entitled to the
benefits available hereunder in
connection therewith unless such
notice is timely given.
(h) If Executive hires legal counsel
with respect to any alleged failure
by Consolidated or CSC to comply
with any of the terms of this
Employment Agreement, or institutes
any negotiation or institutes or
responds to any legal action to
assert or defend the validity of or
to enforce Executive's rights
under, or to recover damages for
breach of, this Employment
Agreement, Consolidated shall pay
Executive's actual expenses for
attorneys' fees and disbursements,
together with such additional
payments, if any, as may be
necessary so that the net after-tax
payments so made to Executive equal
such fees and disbursements;
provided, that Executive shall be
responsible for his own fees and
expenses with respect to any
lawsuit between Executive and
Employer to enforce rights or
obligations under this Employment
Agreement in which Employer is the
prevailing party. The fees and
expenses incurred by Executive in
instituting or responding to any
such negotiation or legal action
shall be paid by Consolidated as
they are incurred, in advance of
the final disposition of the action
or proceeding, upon re-
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EXHIBIT 10(b)
ceipt of an undertaking by
Executive to repay such amounts if
Employer is ultimately determined
to be the prevailing party.
(i) If any amount due Executive
hereunder is not paid when due,
then Consolidated shall pay
interest on said amount at an
annual rate equal to the base
lending rate of National City Bank,
Cleveland, Ohio, or successor, as
in effect from time to time, for
the period between the date on
which such payment is due and the
date said amount is paid.
(j) Consolidated's obligation to pay
Executive the compensation and to
make the arrangements required
hereunder shall be absolute and
unconditional and shall not be
affected by any circumstance,
including, without limitation, any
setoff, counterclaim, recoupment,
defense or other right that
Consolidated may have against
Executive or otherwise. All amounts
payable by Consolidated hereunder
shall be paid without notice or
demand. Subject to the proviso in
Section 7(h) above, each and every
payment made hereunder by
Consolidated shall be final and
Consolidated shall not seek to
recover all or any part of such
payment from Executive or from
whosoever may be entitled thereto,
for any reason whatsoever.
Executive shall not be obligated to
seek other employment or
compensation or insurance in
mitigation of any amount payable or
arrangement made under any
provision of this Employment
Agreement, and the obtaining of any
such other employment or
compensation or insurance shall in
no event effect any reduction of
Consolidated's obligations to make
the payments and arrangements
required to be made under this
Employment Agreement.
(k) From and after any termination of
Executive's employment, Executive
shall retain in confidence and not
use for his own benefit or on
behalf of any other person or
entity any confidential information
known to him concerning CSC,
Consolidated, their respective
subsidiaries or their respective
businesses so long as such
information is not publicly
disclosed by someone other than
Executive.
(l) In partial consideration of the
benefits granted to Executive
herein, Executive agrees that
during the six-month period
immediately following Executive's
termination, if Executive shall
have received benefits under
Section 7(e) above, Executive shall
not engage in any Competitive
Activity, as defined in Section
7(a).
(m) Any provision in this Employment
Agreement which is prohibited or
unenforceable in any jurisdiction
shall, as to such jurisdiction, be
ineffective only to the extent of
such prohibition or
unenforceability without
invalidating or affecting the
remaining provision hereof, and any
such prohibition or
unenforceability in any
jurisdiction shall not invalidate
or render unenforceable such
provision in any other
jurisdiction.
(n) Except as specifically set forth
herein, this Employment Agreement
shall not be deemed to negate,
supersede or alter any other
agreement or arrangement be-
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tween Executive and Consolidated or
CSC or any other rights to which
Executive may be entitled, and
shall be and remain in effect in
addition to any such other
agreement or rights, whether now
existing or later created.
8. EXPENSES. Employer shall reimburse Executive during the term
of this Employment Agreement for travel, entertainment and
other expenses reasonably incurred by Executive in the
promotion of Employer's business. Executive shall furnish such
documentation with respect to reimbursement to be paid under
this Paragraph 8 as Employer shall reasonably request.
9. COVENANTS OF EXECUTIVE.
(a) Covenant Against Competition. Executive acknowledges
that (i) the principal businesses of Employer include
the operation of its "Odd Lots", "Big Lots",
"MacFrugal's" and "Pic N' Save" discount general
merchandise consumer goods retail outlets, the
inventories of which are acquired primarily through
special purchase situations such as overstocks,
closeouts, liquidations, bankruptcies, wholesale
distribution of overstock, distress, liquidation and
other volume inventories the operation of its KoB
Toy, KoB Toy Works, and KoB Toy Liquidator toy
stores, and the operation of its Big Lots Furniture
and Odd Lots Furniture stores (the "Company
Business"); (ii) Employer is one of the limited
number of persons who has developed such business;
(iii) the Company Business is national in scope; (iv)
Executive's work for Employer will give him access to
the confidential affairs of Employer; and (v) the
agreements and covenants of Executive contained in
this Paragraph 9 are essential to the business and
goodwill of Employer. Accordingly, Executive
covenants and agrees that:
(A) During the term of Executive's employment
with Employer and for a period of two (2)
years (the "Restricted Period") following
either the voluntary termination of such
employment by Executive or the termination
of such employment for "cause" (as such
terms is defined in Subsection 7(a)(iii)
above, Executive shall not in any location
where Employer's retail stores are located
throughout the United States of America,
directly or indirectly, (1) engage in the
Company Business for Executive's own account
(other than pursuant to this Employment
Agreement), (2) render any services to any
person engaged in such activities (other
than Employer), or (3) or engage in any
Competitive Activity (as defined above),
provided, however, that in the event of a
Change in Control the Restricted Period
shall be for a period of six (6) months.
(B) During the Restricted Period, Executive
shall keep secret and retain in strictest
confidence, and shall not use for his
benefit or the benefit of others, all
confidential matters relating to the Company
Business hereafter learned by Executive, and
shall not disclose them to anyone except
with Employer's express written consent and
except for information which (i) is
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13
at the time of receipt or thereafter becomes
publicly known through no wrongful act of
Executive, or (ii) is received from a third
party not under an obligation to keep such
information confidential and without breach
of this Employment Agreement.
(C) So long as there has not occurred a Change
in Control, Executive shall not, during the
Restricted Period, without Employer's prior
written consent, directly or indirectly,
solicit or encourage to leave the employment
of Employer or any of its subsidiaries, any
executive of Employer or any of its
subsidiaries.
(D) All memoranda, notes, lists, records and
other documents (and all copies thereof)
made or compiled by Executive or made
available to Executive concerning the
Company Business shall be Employer's
property and shall be delivered to Employer
at any time on request.
(b) Rights and Remedies Upon Breach. If Executive
breaches any of the provisions of Paragraph 9(a) (the
"Restrictive Covenants"), or a breach thereof is
imminent, Employer shall have the following rights
and remedies, each of which rights and remedies shall
be independent of the other and severally
enforceable, and all of which rights and remedies
shall be in addition to, and not in lieu of, any
other rights and remedies available to Employer under
law or in equity:
(i) The right and remedy to have the Restrictive
Covenants specifically enforced by any court
having equity jurisdiction, including,
without limitation, the right to an entry
against Executive of restraining orders and
injunctions (preliminary, temporary or
permanent) against violations, threatened or
actual, and whether or not then continuing,
of such covenants, it being acknowledged and
agreed that any such breach or threatened
breach will cause irreparable injury to
Employer and that money damage will not
provide adequate remedy to Employer; and
(ii) The right and remedy to require Executive to
account for and pay over to Employer all
compensation, profits, monies, accruals,
increments, or other benefits derived or
received by him as the result of any
transactions constituting a breach of the
Restrictive Covenants. Employer may set off
any amounts finally determined to be due it
under this Paragraph 9(b) against any
amounts owed to Executive.
(c) Severability of Covenants. Executive acknowledges and
agrees that the Restrictive Covenants are reasonable
in geographical and temporal scope, with respect to
the activities restricted and in all other respects.
If it is determined that any of the Restrictive
Covenants, or any part thereof, is invalid or
unenforceable, the remainder of the Restrictive
Covenants shall not thereby be affected and shall be
given full effect, without regard to the invalid
portions.
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14
EXHIBIT 10(b)
(d) Blue-penciling. If it is determined that any of the
Restrictive Covenants, or any part thereof, is
unenforceable because of the duration or geographical
scope of such provision, the duration or scope of
such provision, as the case may be, shall be reduced
so that such provision becomes enforceable and, in
its reduced form, such provision shall then be
enforceable and shall be enforced.
10. WITHHOLDING TAXES. Except as otherwise provided, all payments
to Executive, including the bonus compensation under this
Employment Agreement, shall be subject to withholding on
account of federal, state, and local taxes as required by law.
Any amounts remitted by Employer to the appropriate taxing
authorities a taxes withheld by Employer from Executive on
income realized by Executive shall reduce the amounts payable
by Employer to Executive hereunder. If any particular payment
required hereunder is insufficient to provide the amount of
such taxes required to be withheld, Employer may withhold such
taxes from any other payment due Executive.
11. NO CONFLICTING AGREEMENTS. Executive represents and warrants
that he is not a party to any agreement, contract or
understanding, whether employment or otherwise, which would
restrict or would prohibit him from undertaking or performing
employment in accordance with the terms and conditions of this
Employment Agreement.
12. SEVERABLE PROVISIONS. The provisions of this Employment
Agreement are severable, and if any one or more provisions may
be determined to be illegal or otherwise unenforceable, in
whole or in part, the remaining provisions and any partially
unenforceable provision to the extent enforceable in any
jurisdiction shall, nevertheless, be binding and enforceable.
13. BINDING AGREEMENT. Each of CSC and Consolidated shall require
any successor (whether direct or indirect), by purchase,
merger, consolidation, reorganization or otherwise, to all or
substantially all of the business and/or assets of any of them
expressly to assume and to agree to perform this Employment
Agreement in the same manner and to the same extent that each
of them would be required to perform if no such succession has
taken place. This Employment Agreement shall be binding upon
and inure to the benefit of each of CSC and Consolidated and
any successor of any of them, including without limitation any
persons acquiring directly or indirectly all or substantially
all of the business and/or assets of any of them whether by
sale, merger, consolidation, reorganization or otherwise (and
such successor shall thereafter be deemed the "Employer" for
purposes of this Employment Agreement), but shall not
otherwise be assignable or delegatable by CSC or Consolidated.
This Employment Agreement shall inure to the benefit of and be
enforceable by Executive and each of Executive's personal or
legal representatives, executive, administrators, successor,
heirs, distributees and/or legatees.
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15
EXHIBIT 10(b)
14. NOTICES. Any notice or other communication required or
permitted hereunder shall be in writing and shall be delivered
personally, telegraphed, telexed, sent by facsimile
transmission or sent by certified, registered or express mail,
postage prepaid. Any such notice shall be deemed given when so
delivered personally, telegraphed, telexed, or sent by
facsimile transmission or, if mailed five (5) days after the
date of deposit in the United States mails as follows:
(i) if to the Employer to: Consolidated Stores Corporation
000 Xxxxxxxx Xxxx
Xxxxxxxx, Xxxx 00000-0000
Attention: Xxxxxx X. Xxxx, Esq.
Executive Vice President
with a copy to: Chairman of the Compensation
Committee of the CSC Board of
Directors
(ii) if to the Executive to: Xxxxxxx X. Xxxxxx
0000 Xxxxxx Xxxxx
Xxxxxx, Xxxxxxx 00000
Any such person may by notice given in accordance with this
Paragraph to the other parties hereto, designate another
address or person for receipt by such person of notices
hereunder.
15. WAIVER. The failure of either party to enforce any provision
or provisions of this Employment Agreement shall not in any
way be construed as a waiver of any such provision or
provisions as to any future violations thereof, nor prevent
that party thereafter from enforcing each and every other
provision of this Employment Agreement. The rights granted the
parties herein are cumulative and the waiver of any single
remedy shall not constitute a waiver of such party's rights to
assert all other legal remedies available to it under the
circumstances.
16. MISCELLANEOUS. This Employment Agreement supersedes all prior
agreements and understandings between the parties and may not
be modified or terminated orally. No modification, termination
or attempted waiver shall be valid unless in writing and
signed by the party against whom the same is sought to be
enforced. If Executive is successful in any proceeding against
Employer to collect amounts due Executive under this
Employment Agreement, Employer shall reimburse Executive for
his court costs and reasonable attorneys' fees in connection
therewith.
17. GOVERNING LAW. This Employment Agreement shall be governed by
and constructed according to the laws of the State of Ohio.
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EXHIBIT 10(b)
18. CAPTIONS AND PARAGRAPHS HEADINGS. Captions and paragraph
headings used herein are for convenience and are not a part of
this Employment Agreement and shall not be used in construing
it.
19. INTERPRETATION. Where necessary or appropriate to the meaning
hereof, the singular and plural shall be deemed to include
each other, and the masculine, feminine and neuter shall be
deemed to include each other.
20. AMENDMENTS. Neither CSC nor Consolidated shall amend,
terminate, or suspend this Employment Agreement or any
provision hereof without the written consent of Executive.
21. LEGAL FEES AND EXPENSES. It is the intent of Employer that
Executive not be required to incur the expenses associated
with the enforcement of his rights under this Employment
Agreement in the event of a Change in Control by litigation or
other legal action because the cost and expense thereof would
substantially detract from the benefits intended to be
extended to Executive hereunder. Accordingly, if it should
appear to Executive that Employer has failed to comply with
any of its obligations under this Employment Agreement, or in
the event that Employer or any other person takes any action
to declare this Employment Agreement void and/or
unenforceable, or institutes any litigation designed to deny,
and/or to recover from, Executive the benefits intended to be
provided to Executive hereunder, Employer hereby irrevocably
authorizes Executive from time to time to retain counsel of
his choice at the expense of Employer to represent Executive
in connection with the initiation or defense of any litigation
and/or other legal action, whether by or against Employer or
any director, officer, stockholder, or other person affiliated
with Employer in any jurisdiction. Notwithstanding any
existing or prior attorney-client relationship between
Employer and such counsel, into an attorney-client
relationship with such counsel, and in that connection
Employer acknowledges that a confidential relationship shall
exist between Executive and such counsel. Employer shall pay
and be solely responsible for any and all attorneys' and
related fees and expenses incurred by Executive as a result of
Employer or any person contesting the validity and/or
enforceability of this Employment Agreement or any provision
hereof.
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EXHIBIT 10(b)
IN WITNESS WHEREOF, the parties have caused this Employment Agreement
to be effective as of the 19th day of May, 1998.
Attest: CONSOLIDATED STORES CORPORATION,
a Delaware Corporation
/s/ Xxxxxx X. Xxxx By: /s/ Xxxxxxx X. Xxxxxx
-------------------------- -------------------------------------------
Secretary Xxxxxxx X. Xxxxxx, Executive Vice President
Attest: CONSOLIDATED STORES CORPORATION,
an Ohio Corporation
/s/ Xxxxxx X. Xxxx By: /s/ Xxxxxxx X. Xxxxxx
-------------------------- -------------------------------------------
Secretary Xxxxxxx X. Xxxxxx, Executive Vice President
/s/ Xxxxxxx X. Xxxxxx
-----------------------------------------
Xxxxxxx X Xxxxxx
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