**Exhibit 10.8**

**FOURTH AMENDED AND RESTATED EMPLOYMENT SEVERANCE AGREEMENT**

This Fourth Amended and RestatedEmployment Severance Agreement (the “Agreement”) is made and entered into effective as of 4-17-06 (the “Effective Date”), by and between Joan Fujii (the “Executive”) and Cost Plus, Inc. (the “Company”).

R E C I T A L S 

A.The Company desires to retain the services of the Executive, and the Executive desires to be employed by the Company, on the terms and subject to the conditions set forth in this Agreement. 

B. The Board of Directors of the Company (the “Board”) believes the Company should provide the Executive with certain severance benefits shouldthe Executive’s employment with the Company terminate under certain circumstances, such benefits to provide the Executive with enhanced financial security and sufficient incentive and encouragement to remain with the Company. 

C. This Agreement amends and restates the Third Amended and Restated Employment Severance Agreement dated April 29, 2005 between the Company and theExecutive. 

D. Certain capitalized terms used in the Agreement are defined in Section 6 below. 

**AGREEMENT**

In consideration of themutual covenants herein contained, and in consideration of the continuing employment of the Executive by the Company, the Third Amended and Restated Employment Severance Agreement is hereby amended and restated in its entirety as set forth herein,and the parties further agree as follows: 

1. Duties and Scope of Employment. The Company shall employ the Executivein the position of Senior Vice President in charge of Human Resources with such duties, responsibilities and compensation as in effect as of the Effective Date. The Board and the Chief Executive Officer of the Company (the “CEO”) shallhave the right to revise such responsibilities and compensation from time to time as the Board or the CEO may deem necessary or appropriate. If any such revision constitutes “Involuntary Termination” as defined in Section 6(d) of thisAgreement, the Executive shall be entitled to benefits upon such Involuntary Termination as provided under this Agreement. 

2. At-Will Employment. The Company and the Executive acknowledge that the Executive’s employment is and shall continue to be at-will, as defined under applicable law. If the Executive’s employment terminates for any reason,the Executive shall not be entitled to any payments, benefits, damages, awards or compensation other than as provided by this Agreement, or as may otherwise be available in accordance with the Company’s established employee plans and practicesor in accordance with other agreements between the Company and the Executive. This Agreement shall remain in effect until the earlier of (i) the date that all obligations of the parties 

hereunder have been satisfied or (ii) the date upon which this Agreement terminates by consent of the parties hereto. 

3. Severance Benefits. 

(a) Benefits upon Termination. Unless the Executive is entitled to benefits under Section 3(b) of this Agreement, if the Executive’s employment terminates as a result of Involuntary Termination priorto June 15, 2007 and the Executive signs and does not revoke a Release of Claims, then the Company shall pay the Executive’s Base Compensation on a salary continuation basis in accordance with the Company’s normal payroll practices tothe Executive for twelve (12) months from the Termination Date. The Executive shall not be entitled to receive any payments if the Executive voluntarily terminates employment other than as a result of an Involuntary Termination. 

(b) Benefits upon Termination After a Change of Control. If after a Change of Control the Executive’s employment terminates asa result of Involuntary Termination prior to June 15, 2007 and the Executive signs and does not revoke a Release of Claims, then the Company shall pay the Executive’s Base Compensation on a salary continuation basis in accordance with theCompany’s normal payroll practices to the Executive for eighteen (18) months from the Termination Date. The Executive shall not be entitled to receive any payments if the Executive voluntarily terminates employment other than as a resultof an Involuntary Termination. 

(c) Stock Options. Unless otherwise provided in the Company’s stock option plansor in the Executive’s stock option agreements, the Executive shall not be entitled to acceleration of any unvested stock options upon the termination of the Executive’s employment for any reason, including an Involuntary Termination.

(d) Miscellaneous. In addition to the benefits described in Section 3(a) or Section 3(b) of thisAgreement, upon the termination of the Executive’s employment, (i) the Company shall pay the Executive any unpaid base salary due for periods prior to the Termination Date; (ii) the Company shall pay the Executive all of theExecutive’s accrued and unused vacation through the Termination Date; (iii) following submission of proper expense reports by the Executive, the Company shall reimburse the Executive for all expenses reasonably and necessarily incurred bythe Executive in connection with the business of the Company prior to the Termination Date; and (iv) if benefits will be paid under Section 3(a) or Section 3(b) of this Agreement, the Company shall pay the Executive a pro-rata portionof his fiscal year bonus, if any, under the Company’s Management Incentive Plan in effect for the fiscal year in which the Termination Date occurs. Such amount shall be paid at the time bonuses for the completed fiscal year are paid to otherexecutives (but no later than the period of time required to fit within the short-term deferral rule of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”)), shall be pro-rated for the period of time during thefiscal year that the Executive was an employee of the Company and shall only be paid if, and to the extent, that the relevant performance targets have been achieved by the Company. Except for any bonus payment under clause (iv) of the precedingsentence, these 

 

2 

payments shall be made promptly upon termination and within the period of time mandated by applicable law. 

4. Limitation on Payments. 

(a) Code Section 409A. If the Company reasonably determines that Section 409A will result in the imposition of additional tax to an earlier payment of the severance and other benefits provided in thisAgreement or otherwise payable to the Executive, then the first six (6) months of the Executive’s severance benefits under Section 3 of this Agreement will accrue during the six (6)-month period following the Executive’stermination and will become payable in a lump sum payment on the date that is six (6) months and one (1) day following the date of the Executive’s termination of employment. The remaining severance benefits will be payable as providedin Section 3 of this Agreement. 

(b) Code Section 280G. In the event that the severance and other benefitsprovided for in this Agreement or otherwise payable to the Executive (i) constitute “parachute payments” within the meaning of Section 280G of the Code and (ii) but for this Section 4, would be subject to the excise taximposed by Section 4999 of the Code, then the Executive’s severance benefits under Section 3(b) of this Agreement shall be either: 

(i) delivered in full, or 

(ii) delivered as to such lesser extent which would result in noportion of such severance benefits being subject to excise tax under Section 4999 of the Code, 

whichever of the foregoing amounts, taking intoaccount the applicable federal, state and local income taxes and the excise tax imposed by Section 4999 of the Code, results in the receipt by the Executive on an after-tax basis, of the greatest amount of severance benefits, notwithstandingthat all or some portion of such severance benefits may be taxable under Section 4999 of the Code. Unless the Company and the Executive otherwise agree in writing, any determination required under this Section 4 shall be made in writing bythe Company’s independent public accountants immediately prior to Change of Control (the “Accountants”), whose determination shall be conclusive and binding upon the Executive and the Company for all purposes. For purposes of makingthe calculations required by this Section 4, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and4999 of the Code. The Company and the Executive shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this Section. The Company shall bear all costs theAccountants may reasonably incur in connection with any calculations contemplated by this Section 4. 

5.Non-Solicitation. In consideration for the mutual agreements as set forth herein, the Executive agrees that the Executive shall not, at any time, within twelve (12) months following termination of the Executive’s employment with theCompany for any reason, directly or 

 

3 

indirectly solicit the employment or other services of any individual who at that time shall be or within the prior twelve (12) months shall have beenan employee of the Company. 

6. Definition of Terms. The following terms referred to in this Agreement shall have thefollowing meanings: 

(a) Base Compensation. “Base Compensation” means the Executive’s monthly basesalary paid by the Company for services performed calculated as the average base salary for the six (6) months completed prior to the Termination Date. If the Executive has not been employed by the Company for six (6) complete months priorto the Termination Date, Base Compensation shall be calculated as the average base salary for the period of the Executive’s employment. 

(b) Cause. “Cause” means the Executive’s (i) intentional failure to perform reasonably assigned duties, (ii) dishonesty or willful misconduct in the performance of duties,(iii) engaging in a transaction in connection with the performance of duties to the Company or any of its subsidiaries thereof which transaction is adverse to the interests of the Company or any of its subsidiaries and which is engaged in forthe Executive’s personal enrichment or (iv) willful violation of any material law, rule or regulation in connection with the performance of duties. 

(c) Change of Control. “Change of Control” means the consummation of any of the following events: 

(i) The acquisition by any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) (other than theCompany or a person that directly or indirectly controls, is controlled by, or is under common control with, the Company) of the “beneficial ownership” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, ofsecurities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company’s then outstanding voting securities; 

(ii) A change in the composition of the Board of Directors of the Company occurring within a two (2)-year period, as a result of whichfewer than a majority of the directors are Incumbent Directors. “Incumbent Directors” shall mean directors who either (A) are directors of the Company as of the date hereof, or (B) are elected, or nominated for election, to theBoard of Directors of the Company with the affirmative votes of at least a majority of the Incumbent Directors at the time of such election or nomination (but shall not include an individual not otherwise an Incumbent Director whose election ornomination is in connection with an actual or threatened proxy contest relating to the election of directors to the Company); 

(iii) A merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (eitherby remaining outstanding or by being converted into voting securities of the surviving entity) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such 

 

4 

surviving entity outstanding immediately after such merger or consolidation, or the approval by the stockholders of the Company of a plan of completeliquidation of the Company or of an agreement for the sale or disposition by the Company of all or substantially all the Company’s assets; 

(iv) The sale of all or substantially all of the assets of the Company determined on a consolidated basis; or 

(v) The complete liquidation or dissolution of the Company. 

(d) InvoluntaryTermination. “Involuntary Termination” means: 

(i) termination of the Executive’s employment by theCompany for any reason other than Cause; 

(ii) a material reduction in the Executive’s salary, other than any suchreduction which is part of, and generally consistent with, a general reduction of officer salaries; 

(iii) a materialreduction by the Company in the kind or level of employee benefits (other than salary and bonus) to which the Executive is entitled immediately prior to such reduction with the result that the Executive’s overall benefits package (other thansalary and bonus) is substantially reduced (other than any such reduction applicable to officers of the Company generally); 

(iv) any material breach by the Company of any material provision of this Agreement which continues uncured for thirty (30) days following notice thereof; or 

(v) a material reduction in the Executive’s titles, duties, responsibilities or authority; 

provided that none of the foregoing shall constitute Involuntary Termination to the extent the Executive has agreed thereto. Any purported InvoluntaryTermination pursuant to Section 6(d)(ii) through 6(d)(v) will not be effective until the Executive has delivered to the Company a written explanation which describes the basis for the Executive’s belief that the Executive should bepermitted to terminate her employment and have it treated as an Involuntary Termination and the Company has been given thirty (30) days to cure any curable violation. 

(e) Release of Claims. “Release of Claims” shall mean a waiver by the Executive, in a form satisfactory to the Company,of all employment-related obligations of and claims and causes of action against the Company. 

(f) Termination Date.“Termination Date” shall mean the date on which an event that would constitute Involuntary Termination occurs, or the later of (i) the date on which a notice of termination is given, or (ii) the date (which shall not be more thanthirty (30) days after the giving of such notice) specified in such notice. 

 

5 

(g) Management Incentive Plan. “Management Incentive Plan” shall meanthe Company’s bonus program, as implemented by the Company’s board of directors from time to time and pursuant to which the Executive may receive incentive-based compensation at fiscal year end. 

7. Confidentiality. The Executive acknowledges that during the course of the Executive’s employment, the Executive will haveproduced and/or have access to confidential information, records, notebooks, data, formula, specifications, trade secrets, customer lists and secret inventions, and processes of the Company and its affiliated companies. Therefore, during orsubsequent to the Executive’s employment by the Company, the Executive agrees to hold in confidence and not directly or indirectly to disclose or use or copy or make lists of any such information, except to the extent authorized by the Companyin writing. All records, files, drawings, documents, equipment, and the like, or copies thereof, relating to the Company’s business, or the business of an affiliated company, which the Executive shall prepare, or use, or come into contact with,shall be and remain the sole property of the Company, or of an affiliated company, and shall not be removed from the Company’s or the affiliated company’s premises without its written consent, and shall be promptly returned to the Companyupon termination of employment with the Company. 

8. Successors. 

(a) Company’s Successors. Any successor to the Company (whether direct or indirect and whether by purchase, lease, merger,consolidation, liquidation or otherwise) to all or substantially all of the Company’s business and/or assets shall assume the obligations under this Agreement and agree expressly to perform the obligations under this Agreement in the samemanner and to the same extent as the Company would be required to perform such obligations in the absence of a succession. For all purposes under this Agreement, the term “Company” shall include any successor to the Company’s businessand/or assets which executes and delivers the assumption agreement pursuant to this subsection (a) or which becomes bound by the terms of this Agreement by operation of law. 

(b) Executive’s Successors. The terms of this Agreement and all rights of the Executive hereunder shall inure to the benefitof, and be enforceable by, the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. 

9. Notice. 

(a) General. Notices and all other communications contemplated by this Agreement shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed by U.S. registered or certified mail, returnreceipt requested and postage prepaid. In the case of the Executive, mailed notices shall be addressed to the Executive at the home address that the Executive most recently communicated to the Company in writing. In the case of 

 

6 

the Company, mailed notices shall be addressed to its corporate headquarters, and all notices shall be directed to the attention of its CEO. 

(b) Notice of Termination. Any termination by the Company for Cause or by the Executive as a result of a voluntary resignation oran Involuntary Termination shall be communicated by a notice of termination to the other party hereto given in accordance with Section 9(a) of this Agreement. Such notice shall indicate the specific termination provision in this Agreementrelied upon, shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination under the provision so indicated, and shall specify the termination date (which shall be not more than thirty (30) daysafter the giving of such notice). The failure by the Executive to include in the notice any fact or circumstance which contributes to a showing of Involuntary Termination shall not waive any right of the Executive hereunder or preclude the Executivefrom asserting such fact or circumstance in enforcing the Executive’s rights hereunder. 

10. MiscellaneousProvisions. 

(a) Non-Disparagement. The Executive agrees to refrain from any defamation, libel or slander ofthe Company and its respective officers, directors, employees, investors, shareholders, administrators, affiliates, divisions, subsidiaries, predecessor and successor corporations, and assigns or tortious interference with the contracts andrelationships of the Company and its respective officers, directors, employees, investors, shareholders, administrators, affiliates, divisions, subsidiaries, predecessor and successor corporations, and assigns. The Executive acknowledges and agreesthat any breach of this paragraph shall constitute a material breach of the Agreement and shall entitle the Company immediately to recover all consideration paid under this Agreement, including, but not limited to the considerationdescribed in Section 3. 

(b) No Duty to Mitigate. The Executive shall not be required to mitigate the amount ofany payment contemplated by this Agreement, nor shall any such payment be reduced by any earnings that the Executive may receive from any other source. 

(c) Waiver. No provision of this Agreement shall be modified, waived or discharged unless the modification, waiver or discharge is agreed to in writing and signed by the Executive and by an authorized officerof the Company (other than the Executive). No waiver by either party of any breach of, or of compliance with, any condition or provision of this Agreement by the other party shall be considered a waiver of any other condition or provision or of thesame condition or provision at another time. 

(d) Whole Agreement. No agreements, representations or understandings(whether oral or written and whether express or implied) which are not expressly set forth in this Agreement have been made or entered into by either party with respect to the subject matter hereof. 

(e) Severance Provisions in Other Agreements. The Executive acknowledges and agrees that the severance provisions set forth in thisAgreement shall supersede any such provisions in any other agreement entered into between the Executive and the Company. 

 

7 

(f) Choice of Law. The validity, interpretation, construction and performance ofthis Agreement shall be governed by the laws of the State of California. 

(g) Severability. The invalidity orunenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision hereof, which shall remain in full force and effect. 

(h) No Assignment of Benefits. The rights of any person to payments or benefits under this Agreement shall not be made subject tooption or assignment, either by voluntary or involuntary assignment or by operation of law, including (without limitation) bankruptcy, garnishment, attachment or other creditor’s process, and any action in violation of this subsection shall bevoid. 

(i) Employment Taxes. All payments made pursuant to this Agreement will be subject to withholding ofapplicable income and employment taxes. 

(j) Code Section 409A. This Agreement will be deemed amended to theextent necessary to avoid imposition of any additional tax or income recognition prior to actual payment to the Executive under Section 409A of the Code and any temporary, proposed or final Treasury Regulations and guidance promulgatedthereunder and the parties agree to cooperate with each other and to take reasonably necessary steps in this regard. 

(k)Assignment by Company. The Company may assign its rights under this Agreement to an affiliate, and an affiliate may assign its rights under this Agreement to another affiliate of the Company or to the Company; provided, however, that noassignment shall be made if the net worth of the assignee is less than the net worth of the Company at the time of assignment. In the case of any such assignment, the term “Company” when used in a section of this Agreement shall mean thecorporation that actually employs the Executive. 

(l) Counterparts. This Agreement may be executed in counterparts,each of which shall be deemed an original, but all of which together will constitute one and the same instrument. 

***[Signature Page toFollow]***

 

8 

IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the Company by itsduly authorized officer, as of the day and year first above written. 

 

COMPANY:
  
COST PLUS, INC.
   
/s/ Barry Feld
  
By
   
CEO
  
Title

EXECUTIVE:
  
/s/ Joan Fujii
  
Joan Fujii

 

9