<PAGE>   1

                              EMPLOYMENT AGREEMENT


         AGREEMENT, dated as of October 1, 2000, by and among GLIMCHER
DEVELOPMENT CORPORATION, a Delaware Corporation, with offices at 20 South Third
Street, Columbus, Ohio, 43215, ("the Company") and SCOTT T. MCCARTHY, an
individual residing at 1934 Dunham, Rochester, MI 48306 (the "Executive").

         WHEREAS, the Executive Compensation Committee of the Board of Trustees
of Glimcher Realty Trust ("Committee"), ratified and approved the employment by
Glimcher Development Corporation, an affiliate of Glimcher Realty Trust, of the
Executive pursuant to the terms and conditions of the Executed Engagement
Letter.

         WHEREAS, the Company, upon approval of the employment of Executive by
the Committee, agreed to prepare a formal written Employment Agreement
containing provisions of the Engagement Letter.

         IT IS AGREED:

A.  JOB COMMENCEMENT:

    October 1, 2000, or sooner at your discretion


B.  TERM OF EMPLOYMENT AGREEMENT:

    1.  This Contract will be for three years and will automatically be extended
        on a one-year basis upon the expiration of the initial three-year
        period. Further, the contract will be automatically extended for one
        year upon the expiration of each one-year term as extended after the
        initial three-year period.
    2.  Subject to Termination Issues as set forth below

C.  DUTIES:

    1.  Title:  Senior Vice President of Development
    2.  Report to Michael Glimcher
    3.  Responsibilities: You will be directly responsible for the redevelopment
        of all existing properties and the development of future properties
        within the parameters of pro formas that will be budgeted for on a
        project-by-project basis. You will be responsible for directly
        supervising the development department personnel and further training
        and hiring additional personnel as needed. You will be directly
        responsible for all hiring and terminations within the department,
        subject to guidelines of the Executive Compensation Committee of
        Glimcher Properties Corporation andsubject to approval by the Vice
        President of Human Resources.

<PAGE>   2

    4.  You will be responsible for being familiar with and abiding by all of
        the policies contained in the Managers' Handbook, which will be provided
        to you upon commencement of your employment and which may be modified
        from time to time within the discretion of the Company.

D.  TERMINATION ISSUES:

    1.  Death or Disability:  This agreement will terminate upon your death
        or total disability.  In the event of termination all long-term
        compensation will be vested and payable.
    2.  Termination with Cause:  During the term of your employment, you can
        only be terminated by the Company for cause. "Cause" means the willful
        failure to perform your duties with the Company of your engagement in
        conduct (including but in no way limited to fraud or theft) which has a
        material adverse effect on the business affairs of the Company,
        monetarily or otherwise. If the Company terminates your employment for
        cause, you will not be entitled to severance benefits of any kind.
    3.  Termination without cause:  If you are terminated without cause, the
        Company shall pay your base salary and bonus for a period equal to the
        remaining term of the contract or one year's salary, whichever is
        greater, and will pay for the continuation of your health, life and
        disability insurance for a two-year period beginning on the date your
        employment is terminated. In the event of termination without cause all
        long-term compensation will be vested and payable. Severance amounts
        are not subject to mitigation.
    4.  Termination by Employee:  If you voluntarily terminate your employment
        for any reason, you shall not be entitled to severance benefits of
        any kind.
    5.  Change of Control: In the event of a Change in Control of GRT as
        provided for in the Severance Benefits Agreement referenced in Section
        G below, any and all sums due to the Executive under this Contract
        shall be credited against any and all sums due to the Executive under
        the Severance Benefits Agreement.

E.  COMPENSATION:

    1.  Salary:  Base Salary of $250,000 annually.
    2.  Additional Compensation:  Beginning on December 31, 2000 and
        continuing at the end of every succeeding three-month period, the
        Company will pay you additional compensation in the amount of $25,000
        for overseeing the redevelopment of the Value MegaMall (VMM) properties
        including the Great Mall of the Great Plains in Olathe, Kansas,
        Supermall of the Great Northwest in Auburn, Washington, and Jersey
        Gardens in Elizabeth, New Jersey. The compensation will be allocated
        1/3 to each VMM property.

<PAGE>   3
    3.  Bonus: Upon commencement of your employment, you and the Company will
        mutually agree in writing upon a bonus system based on meeting specific
        net operating income (NOI) and other occupancy goals for the VMM
        properties, the creation of new development opportunities and creating
        redevelopment opportunities in the existing Glimcher portfolio.
    4.  Equity Compensation:  Your participation in stock options or stock grant
        issues and the amounts of options or shares will be determined by the
        Executive Compensation Committee in its sole discretion. Participation
        will be consistent with the philosophy of allocation to other Senior
        Executives.
    5.  Long Term Compensation:  In consideration of the current long-term
        bonus arrangements with your current employer, upon your providing the
        Company with written verification of these arrangements, the Company
        will pay you $171,876 at the expiration of the initial term of your
        employment agreement with the Company or upon termination of your
        employment without cause by the Company, whichever occurs first.

F.  RETIREMENT PROGRAMS:

    You will be eligible to participate in the Company's 401(k) plan in
    accordance with the terms of the Company's plan applicable to employees.
    You will receive a benefits packet upon commencement of your employment,
    which will describe the Company's 401(k) plan in more detail.

G.  SEVERANCE BENEFIT AGREEMENTS:

    Subject to the approval of the Executive Compensation Committee and
    Board of Trustees, you will be offered substantially the same written
    severance benefit agreement as provided other senior executives which
    provides a lump sum payment equal to three (3) times your total base
    salary only in the event of a change in control of the Company, as the
    term "change in control" is defined in the severance benefit agreement.
    Severance benefits shall also include acceleration of vesting of options
    and other benefits in the event of a change in control as contained in the
    current Severance Benefit Agreements currently in effect with other senior
    executives. There will be no severance benefit agreement between the Company
    and you relating to a change in control other than that agreed to by you
    and the Company in writing.

<PAGE>   4
H.  MISCELLANEOUS BENEFITS:


    1.  Documented business travel expenses will be reimbursed in accordance
        with Company policy.
    2.  Temporary Housing/Relocation expenses will be paid as outlined below:
           Up to 90 days of documented temporary housing expenses, not to
           exceed $4,500 total
           The documented cost of up to 10 trips between Columbus and Detroit
           for you and/or your spouse, not to exceed 3 round trip flights
           The documented commission on the sale of your existing residence in
           Rochester, Michigan, not to exceed $18,000
    3.  The documented cost of moving your household goods to Columbus, not
        exceed $7,500
    4.  Insurance:  You will be eligible for medical, dental, life and
        disability insurance coverage in accordance with the terms of the
        Company's plans which apply to the Company's full time employees. You
        will receive a benefits packet upon commencement of employment which
        will describe the Company's 401(k) plan in more detail.
    5.  3 weeks vacation
    6.  Holidays are per Company policy as outlined in the Managers Handbook.


IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written,


GLIMCHER DEVELOPMENT CORPORATION
A Delaware Corporation

By: /s/ Michael P. Glimcher                            October 19, 2000
    ---------------------------                        --------------------
      Michael P. Glimcher                              Date
      President



EXECUTIVE

/s/ Scott T. McCarthy                                  October 19, 2000
-------------------------------                        -------------------
Scott T. McCarthy                                             Date