Cto Employment Agreement

EMPLOYMENT AGREEMENT


THIS EMPLOYMENT AGREEMENT is entered into as of the 26th day of June, 2000, 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 Albert J. Bell, an individual residing in Ohio ("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 Vice Chairman of the Board of Directors and Chief Administrative 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 Vice Chairman of the Board of Directors and Chief Administrative Officer of each of CSC and Consolidated, with such duties as may from time to time be prescribed by the Chief Executive Officer of Employer 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 Vice Chairman of the Board of Directors and Chief


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Administrative 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 Chief Executive Officer 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. So long as Executive shall serve as Vice Chairman of the Board of Directors and Chief Administrative Officer, Executive shall report only to the Chief Executive Officer 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.


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


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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 June 26, 2000 and shall continue thereafter until Executive's employment is terminated as provided in Paragraph 7. This Employment Agreement supercedes and replaces the May 19, 1998 Senior Executive Severance Agreement between Employer and Executive.


(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 Chief Executive Officer. 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 Vice Chairman and Chief Administrative 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


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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, Employer shall pay to Executive, commencing on June 26, 2000, a minimum salary at the rate (the "Salary Rate") of Six Hundred Twenty-five Thousand Dollars ($625,000.00) per annum, payable in those installments customarily used in payment of salaries to Employer's executives (but in no event less frequently than monthly). At least annually, the Compensation Committee of the CSC Board of Directors shall review Executive's performance and determine whether an increase in the Executive's Salary Rate is merited.


(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 January 30, 2000 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


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based upon the achievement of Employer's
annual financial plan. The Target Bonus for
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 ; provided
however, Executive's Target Bonus shall
never fall below 100% of base salary and
Executive's Stretch Bonus shall never fall
below 200% of base salary.


(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 forty-five (45)
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 prorata portion of the bonus applicable to the fiscal year in which such death or permanent


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disability occurs, as such bonus is determined under Paragraph 3(b) of this Employment Agreement. Such prorata 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) Upon permanent disability Executive shall be entitled to six (6) months of short term disability at his then current Salary Rate. At the end of the six month period Executive shall be entitled to long term disability at a minimum rate of twenty five thousand dollars ($25,000.00) per month, tax free, until age sixty-five (65).


(c) 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.


(d) For the purposes of this Employment Agreement, except as modified in paragraph 4(b) above, 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 Employer, 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


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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. Commencing June 26, 2000, Executive shall be entitled to a similar vehicle every three years or 36,000 miles, whichever occurs first.


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. Up to the applicable maximum, 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


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(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;


(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


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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 th ...