Document:

<PAGE>   1
Exhibit 10(b)
LANVISION SYSTEMS, INC.

                        THIRD AMENDMENT TO LOAN AGREEMENT

     THIS THIRD AMENDMENT TO LOAN AGREEMENT ("Amendment") is executed pursuant
to and made a part of the Loan and Security Agreement dated July 17, 1998, by
and between LANVISION SYSTEMS, INC., a Delaware Corporation ("Borrower"), and
THE HILLSTREET FUND, L.P., a Delaware limited partnership ("Lender"), as amended
by letter agreements dated March 18, 1999, April 12, 1999, September 14, 1999
and Amendment Number 1, dated November 25, 1998 and an Amendment dated February
11, 2000 ( as amended, the "Loan Agreement").

     WHEREAS, Borrower and Lender wish to further amend the Loan Agreement in
accordance with the terms and provisions hereof.

     NOW, THEREFORE, the parties agree as follows:

     1.   Waiver. Lender hereby agrees to waive Borrower's compliance with the
          following covenants set forth in the Amendment dated February 11,
          2000:

          Section 6.4 (a) Minimum Revenues and Section 6.4 (b) Minimum EBIT for
          the July 31, 2000 Computation Date.

     2.   Amendments to Loan Agreement. The following amendments shall be made
          to the terms of the Loan Agreement:

          (a)  Minimum Revenues and EBIT. Section 6.4 of the Loan Agreement
               shall be amended in its entirety to read as follows:

          "Section 6.4 Minimum Revenues and EBIT.

               (a)  Minimum Revenues. On each of the Computation Dates set forth
                    below, the Borrower shall not permit the total cumulative
                    revenues (calculated for the period of time beginning on
                    February 1, 2000 through such Computation Date) to be less
                    than the minimum amount set forth bellow:

<TABLE>
<CAPTION>
                                                                  MINIMUM
                    COMPUTATION DATE                        CUMULATIVE REVENUES
                    ----------------                        -------------------
<S>                                                         <C>
                    October 31, 2000                             $5,500,000

                    January 31, 2001                             $8,800,000
</TABLE>

<PAGE>   2

               (b)  Minimum EBIT. On each Computation date set forth below, the
                    Borrower shall not permit the total Cumulative EBIT
                    (calculated for the period of time beginning on February 1,
                    2000 through such Computation Date) to be less than the
                    minimum amount set forth below:

<TABLE>
<CAPTION>
                                                                MINIMUM
                    COMPUTATION DATE                        CUMULATIVE EBIT
                    ----------------                        ---------------
<S>                                                         <C>
                    October 31, 2000                           ($415,000)

                    January 31, 2001                            $400,000
</TABLE>

                    Borrower and Lender shall amend this Agreement on or before
                    February 28, 2001, to provide covenant compliance ( at
                    minimum levels acceptable to Lender ) under Section 6.4(a)
                    and 6.4 (b) above for April 30, 2001, and each Computation
                    date thereafter."

               (c)  Net Worth. Section 6.5 of the Loan Agreement shall be
                    amended in its entirety to read as follows:

                    "Section 6.5 Net Worth. At all times prior to January 31,
                    2001, Borrower shall maintain a minimum Net Worth of
                    Eight-Hundred Thousand Dollars ($800,000), and at all times
                    during the term of this Loan Agreement on or after January
                    31, 2001, Borrower shall maintain a minimum Net Worth of One
                    Million One Hundred Thousand Dollars ($1,100,000)."

          (b)  Section 2 of the Loan Agreement shall be amended to add the
               following:

               "Section 2.10 Special Payment. Borrower has accrued on its
               balance sheet at August 31, 2000 the sum of One Million Nine
               Hundred Forty-one Thousand Five Hundred Nineteen and 09/100
               Dollars ($1,941,519.09) as a liability to Lender, representing
               the amount of the additional fee accrued through August 31, 2000
               to guarantee Lender a minimum compounded annual internal rate of
               return of twenty-five percent (25%) at maturity on July 31, 2004
               pursuant to Section 2.3(c) of the Loan Agreement (the "Yield
               Guarantee at Maturity"). Borrower has agreed to pay to Lender the
               sum of One Million Dollars ($1,000,000) of such accrued amount
               contemporaneously with the execution of this Third Amendment,

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               September 5, 2000 (the "Special Payment"). Accordingly, upon
               payment in full of the Term Loan, Lender agrees to credit against
               the amount of the Yield Guarantee at Maturity due Lender an
               amount equal to the future value of One Million Dollars
               ($1,000,000), compounded at an assumed interest rate of six
               percent (6%) per annum from the date hereof to the date of
               payment of the Term Loan. The amount so computed is referred to
               as the "Future Credit Amount." For example, if the Loan is paid
               in full at maturity on July 31, 2004, the Future Credit Amount
               shall be equal to One Million Two Hundred Fifty-five Thousand,
               Four Hundred Forty-two and 63/100 Dollars ($1,255,442.63).
               Notwithstanding this Special Payment of One Million Dollars
               ($1,000,000), Borrower shall be liable to Lender for the full
               amount of the Yield Guarantee at Maturity as if this Special
               Payment had not been made, and will continue to accrue an amount
               to satisfy such Yield Guarantee at Maturity on a monthly basis as
               if this Special Payment had not been made.

               "Section 2.11 Special Prepayment Fee with New Option to Prepay.
               Lender agrees that Borrower may prepay the Loan at any time upon
               payment of a "Special Prepayment Fee" (in addition to payment in
               full of the principal of the Term Loan and any accrued and unpaid
               interest and any other fees and expenses or other obligations due
               under the Loan Agreement) as follows. The Special Prepayment Fee
               shall be equal to (i) the amount of the Yield Guarantee at
               Maturity, but discounted to present value to the date of payment
               in full of the Loan, using an assumed discount rate of six
               percent (6%), minus (ii) the Future Credit Amount, computed in
               the same manner as specified in Section 2.10."

     3.   Reaffirmation of Covenants, Representations and Warranties. Borrower
          hereby agrees and covenants that all representations and warranties in
          the Loan Agreement including, without limitation, all of those
          representations and warranties set forth in Article 4, are true and
          accurate as of the date hereof. Borrower further reaffirms all
          covenants in the Loan Agreement and reaffirms each of the covenants
          set forth in Articles 5 & 6 thereof, as if fully set forth herein,
          except to the extent modified by this agreement.

       Remainder of page intentionally left blank. Signature page follows.

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          IN WITNESS WHEREOF, the parties hereto have executed this Amendment to
     Loan Agreement as of the 5th day of September, 2000.

        LENDER:                                         BORROWER:

THE HILLSTREET FUND, L.P.                   LANVISION SYSTEMS, INC.

By:  HillStreet Capital, Inc.               By:   /s/ J. Brian Patsy
                                               ---------------------------------
Its: Investment Manager                           J. Brian Patsy
                                                  Chief Executive Officer

By:   /s/ Chris Meininger
   ---------------------------------
   Christian L. Meininger, President

Date:     9/5/00                                  Date:      9/5/00
     ----------------------                            ------------<PAGE>   1
                                                                   Exhibit 10(a)

                              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
Michael J. Potter, 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.
                  ------------------

                  (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

                                       13
<PAGE>   14

                                    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

                                       14
<PAGE>   15

                                    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

                                       15
<PAGE>   16

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

                                       16
<PAGE>   17

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

                                       17
<PAGE>   18

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

                                       18
<PAGE>   19

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

                                       19
<PAGE>   20

                                    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.

                                       20
<PAGE>   21

                  (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

                                       21
<PAGE>   22

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.

                                       22
<PAGE>   23

         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:

<TABLE>
<CAPTION>
<S>                                                           <C>
                           (i)      if to the Employer to:    Consolidated Stores Corporation
                                                              300 Phillipi Road
                                                              Columbus, Ohio  43228-1310
                                                              Attention:  Charles Haubiel, Esq.
                                                              Vice President and General Counsel

                                    with a copy to:           Chairman of the Compensation Committee
                                                              of the CSC Board of Directors
</TABLE>

                                       23
<PAGE>   24

<TABLE>
<CAPTION>
<S>                                                           <C>
                           (ii)     if to the Executive to:   Michael J. Potter
                                                              1127 Poppy Hills Drive
                                                              Blacklick, OH 43230
</TABLE>

                  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.

                                       24
<PAGE>   25

         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.

                                       25
<PAGE>   26

         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/ Charles W. Haubiel II      By: /s/ David T. Kollat
----------------------------       --------------------------------------------
Secretary                          David T. Kollat
                                   Chairman of the Compensation Committee
                                   of the Board of Directors

Attest:                        CONSOLIDATED STORES CORPORATION,
                               an Ohio Corporation

/s/ Charles W. Haubiel II      By: /s/ David T. Kollat
----------------------------       --------------------------------------------
Secretary                          David T. Kollat
                                   Chairman of the Compensation Committee
                                   of the Board of Directors

                                   /s/ MICHAEL J. POTTER
                                   ---------------------------------------------
                                   Michael J. Potter

                                       26

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