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Exhibit 10(a)
EMPLOYMENT AGREEMENT
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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
Xxxxxxx X. Xxxxxx, 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 Chief Executive Officer of each of CSC and Consolidated, and shall
elect Executive as Chairman of the Board of Directors of CSC on August 15, 2000.
NOW, THEREFORE, in consideration of the mutual promises herein
contained, the parties agree as follows:
1. EMPLOYMENT; DUTIES.
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(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
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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. As Chief Executive Officer, Executive shall have the authority to
implement the policies and decisions 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.
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(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 June
26, 2000 and shall continue thereafter until Executive's employment is
terminated as provided in Paragraph 7. This Employment Agreement supersedes 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 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
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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, Employer shall pay to Executive, commencing on June 26,
2000, a minimum salary at the rate (the "Salary Rate") of Six Hundred Fifty
Thousand Dollars ($650,000.00) 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
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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 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.
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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 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
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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 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.
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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;
(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;
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(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
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any subsidiary, if such business operation's sales, related to any activity then
engaged in by Employer, amount to ten percent (10%) or more of such business
operation's total sales. At the date hereof, Employer is engaged in the sale of
closeout merchandise, toy merchandise and furniture. "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 2 years, including bonus compensation (as provided below), and
(y) all other benefits and perquisites to which he is entitled hereunder for a
period of 2 years 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
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prorata 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.
In addition should Executive's employment be terminated by Employer pursuant to
subparagraph (a)(i) above, Executive's stock option grant dated June 26, 2000,
will immediately fully vest to the extent not already vested.
(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).
(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
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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.
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(iii) For a period of two years, 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 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
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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
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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.
(vi) In addition to the benefits described above,
Executive shall be entitled to all rights
derived under the Consolidated Stores
Corporation Executive Stock Option and Stock
Appreciation Rights Plan in the event of a
Change in Effective Control (as defined in
that plan) and all rights derived under the
Consolidated Stores Corporation 1996
Performance Incentive Plan in the event of a
Change in Control (as defined in that plan).
(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 Directors 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
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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
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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 receipt 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.
(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
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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 between 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
at the date hereof (i) the principal businesses of Employer include the
operation of its "Odd Lots", "Big
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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 K-B Toy, K-B Toys Works, and K-B
Toy Liquidator toy stores, 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
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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 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.
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(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
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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.
(d) BLUE-PENCILLING. 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.
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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.
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: Xxxxxxx Xxxxxxx, Esq.
Vice President and General Counsel
with a copy to: Chairman of the Compensation Committee
of the CSC Board of Directors
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(ii) if to the Executive to: Xxxxxxx X. Xxxxxx
0000 Xxxxx Xxxxx Xxxxx
Xxxxxxxxx, XX 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.
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.
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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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IN WITNESS WHEREOF, the parties have caused this Employment Agreement
to be effective as of the 26th day of June, 2000.
Attest: CONSOLIDATED STORES CORPORATION,
a Delaware Corporation
/s/ Xxxxxxx X. Xxxxxxx XX By: /s/ Xxxxx X. Xxxxxx
---------------------------- --------------------------------------------
Secretary Xxxxx X. Xxxxxx
Chairman of the Compensation Committee
of the Board of Directors
Attest: CONSOLIDATED STORES CORPORATION,
an Ohio Corporation
/s/ Xxxxxxx X. Xxxxxxx XX By: /s/ Xxxxx X. Xxxxxx
---------------------------- --------------------------------------------
Secretary Xxxxx X. Xxxxxx
Chairman of the Compensation Committee
of the Board of Directors
/s/ XXXXXXX X. XXXXXX
---------------------------------------------
Xxxxxxx X. Xxxxxx
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