Document:

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                              EMPLOYMENT AGREEMENT
                                 (James McGrady)

THIS AGREEMENT is by and between Value City Department Stores, Inc. ("Company")
and James McGrady ("Executive"), and is effective as of the date it has been
fully executed by both parties.

Company agrees to employ Executive as its Chief Financial Officer ("CFO") and
Executive hereby accepts this offer and agrees to serve Company subject to the
general supervision, advice and direction of Company's President and Chief
Operating Officer, and upon the following terms and conditions:

1.       POSITION AND DUTIES.  Executive shall be employed as CFO of Company,
with such authority and duties as are customary for this position, and shall
perform such other services and duties as may be designated from time to time.
Executive shall report to Company's COO.

         1.1. Executive agrees to devote his full business time, best efforts,
and undivided attention to the business and affairs of Company, except for any
vacations, illness, or disability. Executive shall not engage in any other
businesses that would interfere with his duties, provided that nothing contained
herein is intended to limit Executive's right to make passive investments in the
securities of publicly-owned companies or other businesses which will not
interfere or conflict with his duties hereunder or, with the prior written
consent of Company's President, to sit on the boards of other businesses.

         1.2. Executive agrees that he shall at all times observe and be bound
by all rules, policies, practices, and resolutions heretofore or hereafter
adopted in writing by Company which are generally applicable and provided to
Company's officers and employees and which do not otherwise conflict with this
Agreement.

         1.3. Company shall indemnify Executive in the performance of his duties
and responsibilities and advance expenses in connection therewith to the same
extent as other senior executives and officers. Such rights shall not be subject
to arbitration under paragraph 6.

2.        TERM. This Agreement shall terminate three years from its effective
date unless sooner terminated as stated herein; provided, however, that this
Agreement shall be extended automatically for successive 12-month periods unless
either party notifies the other of an intent to terminate, in writing, at least
60 calendar days prior to the date of automatic extension.

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3.       COMPENSATION.

         3.1. BASE SALARY. Company shall pay Executive a base salary of $300,000
as compensation for his services to Company, payable in equal installments in
accordance with Company's payroll practices for executive employees. Company's
President, with the Chairman's approval, may increase Executive's base salary at
his discretion.

         3.3. INCENTIVE BONUS. Executive shall be eligible to receive an
incentive bonus of at least 40% of his base salary under Company's Management
Incentive Plan" ("the Bonus Plan"). The Bonus Plan conditions the payment of
this annual performance bonus based on achievement of pre-determined performance
goals. Company's Board of Directors must verify that the performance goals and
other material terms are met prior to payment. It is the parties' intention that
the Bonus Plan be adopted and administered in a manner that enables Company to
deduct for federal income tax purposes the amount of any annual incentive bonus.
The incentive bonus determined to be due, if any, will be paid within 120
calendar days after the close of Company's fiscal year and completion of an
outside audit by its outside audit firm.

         3.4. STOCK OPTIONS. Subject to approval of Company's Board of
Directors, Executive will receive 30,000 non-qualified options to purchase
shares of Company's common stock. These options vest 20% annually over five
years with a ten-year term. The option price will be determined from the average
of the high and low price on the day they are allocated to Executive. Any
options shall be subject to exercise in accordance with Company's "1991 Stock
Option Plan" (as amended or revised with Board approval).

         3.5. VACATION. During the term of this Agreement, Executive shall be
entitled to vacation commensurate with other senior executives. Company's COO
and Executive shall mutually agree upon Executive's vacations.

         3.6. CAR. During the term of this Agreement, Company shall provide
Executive with a car allowance of $1,250 a month ($15,000/year) payable along
with his base salary on a semi-monthly basis. This benefit shall be "grossed up"
for Executive's personal tax purposes, as that term is commonly used.

         3.7. BUSINESS EXPENSES. Company shall pay, advance or reimburse
Executive for all normal and reasonable business-related expenses, including
travel expenses, incurred in the performance of his duties on the same basis as
paid to other senior executives. Company shall furnish Executive with company
credit cards provided to other senior executives for use solely in the
performance of his duties.

         3.8. TAXES. The compensation provided to Executive hereunder shall be
subject to any withholdings and deductions required by any applicable tax laws.

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         3.9. BENEFIT PLANS. Executive is entitled to participate in any
deferred compensation or other employee benefit plans, including any profit
sharing or 401(k) plans; group life, health, hospitalization and disability
insurance plans; deferred compensation plans; discount privileges; incentive
bonus plans; and other employee welfare benefits made available generally to,
and under the same terms as, Company's executives.

4.       EXECUTIVE'S OBLIGATIONS.

         4.1. CONFIDENTIAL INFORMATION. Executive agrees that during and after
his employment, any "confidential information" as defined below shall be held in
confidence and treated as proprietary to Company. Executive agrees not to use or
disclose any confidential information except to promote and advance the business
interests of Company. Executive agrees that upon his separation from employment,
for any reason whatsoever, he shall not take or copy, and shall immediately
return to Company, any documents that constitute or contain confidential
information. "Confidential information" includes, but is not limited to, any
confidential data, figures, projections, estimates, pricing data, customer
lists, buying manuals or procedures, distribution manuals or procedures, other
policy and procedure manuals or handbooks, supplier information, tax records,
personnel histories and records, information regarding sales, information
regarding properties and any other confidential information regarding the
business, operations, properties or personnel of Company which are disclosed to
or learned by Executive as a result of his employment, but shall not include his
personal personnel records. Confidential information shall not include any
information that (i) Executive had in his possession prior to his first
performing services for Company; (ii) becomes a matter of public knowledge
thereafter through sources independent of Executive; (iii) is disclosed by
Company without restriction on its use; or (iv) is required to be disclosed by
law or governmental order or regulation.

         4.2.     SOLICITATION.

                  4.2.1. EMPLOYEES. Executive agrees that during his employment
and for two years after the end of his employment, for any reason, he shall not,
directly or indirectly, solicit, or in any other manner induce or encourage
Company's employees or consultants to leave their employment or assignments; he
shall not hire or offer to hire them; and, he shall not cause or induce any of
Company's competitors to do the same with respect such employees or consultants.

                  4.2.2. THIRD PARTIES. Executive agrees that during his
employment and for two years following the end of his employment, for any
reason, he shall not, either directly or indirectly, recruit, solicit or
otherwise induce or influence any customer, supplier, sales representative,
lender, lessor or any other person having a business relationship with Company
to discontinue or reduce the extent of such relationship except in the course of
his duties pursuant to this Agreement and with the good faith objective of
advancing the business interests of same.

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         4.3. NONCOMPETITION. Executive agrees that for a period of one year
following the end of his employment, for any reason, he shall not, either
directly or indirectly, accept employment with, act as a consultant to, or
otherwise perform the same services (which shall be determined regardless of job
title) for any business that directly competes with Company's business, which is
understood to currently be the sale of off-price and discount merchandise,
including jewelry and shoes and related merchandise, and shall also include any
other line of business pursued by Company in the future. The parties may
mutually agree to revise, amend or eliminate this provision; provided; however,
that such agreement must be in writing and signed by Company's President.

         4.4.     COOPERATION.

                  4.4.1. WITH COMPANY. Executive agrees to cooperate with
Company during the course of all third-party proceedings arising out of
Company's business about which Executive has knowledge or information. Such
proceedings may include, but are not limited to, internal investigations,
administrative investigations or proceedings, and lawsuits (including pre-trial
discovery). For purposes of this paragraph, cooperation includes, but is not
limited to, Executive's making himself available for interviews, meetings,
depositions, hearings, and/or trials without the need for subpoena or assurances
by Company, providing any and all documents in his possession that relate to the
proceeding, and providing assistance in locating any and all relevant notes
and/or documents.

                  4.4.2. WITH THIRD PARTIES. Executive agrees to communicate
with, or give statements to, third parties relating to any matter about which
Executive has knowledge or information as a result of his employment only to the
extent that it is Executive's good faith belief that such communication or
statement is in Company's business interests. This shall not preclude Executive
from any manner of communication which is legally required or which may be
required to respond to governmental or regulatory agency inquiries.

                  4.4.3. WITH MEDIA. Executive agrees to communicate with, or
give statements to, any member of the media (print, television or radio)
relating to any matter about which Executive has knowledge or information as a
result of his employment only to the extent that it is Executive's good faith
belief that such communication or statement is in Company's business interests.

         4.5. REMEDIES. Executive agrees that any disputes under this paragraph
shall not be subject to arbitration. If Executive breaches this paragraph, the
damage will be substantial, although difficult to quantify, and money damages
may not afford Company an adequate remedy; therefore, if Employee breaches or
threatens to breach this paragraph, Company shall be entitled, in addition to
other rights and remedies, to specific performance, injunctive relief and other
equitable relief to prevent or restrain such conduct.

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5.       TERMINATION AND RELATED BENEFITS.

         5.1. DEATH. This Agreement shall terminate automatically upon
Executive's Death, and Company shall pay his surviving spouse, or if he leaves
no spouse, his estate, any base salary earned by Executive, and any rights or
benefits that have vested. In addition, Company shall pay Executive's surviving
spouse, or if he leaves no spouse, his estate, any declared but unpaid bonus
that, but for Executive's death, would otherwise have been payable to Executive.

         5.2. PERMANENT DISABILITY. Upon Executive's permanent disability,
Company shall have the right to terminate this Agreement immediately with
written notice. For these purposes, permanent disability shall mean that
Executive fails to perform his duties on a full-time basis for a period of more
than 90 calendar days during any 12-month period, due to a physical or mental
disability or infirmity. If this Agreement is terminated due to Executive's
permanent disability, Company shall pay Executive any base salary earned and any
rights or benefits that have vested. In addition, Company shall pay Executive
any declared but unpaid bonus that, but for Executive's permanent disability,
would otherwise have been payable to Executive.

         5.3.     TERMINATION BY COMPANY.

                  5.3.1. AT END OF TERM. Company may terminate this Agreement at
the end of its term or any extension thereof by giving 60 calendar days' written
notice to Executive. Company may, in its sole discretion, require Executive to
cease active employment and pay out the 60-day notice period.

                  5.3.2. DURING THE TERM. Except as provided below in paragraph
5.3.3, Company may terminate this Agreement during its term, for any reason,
upon 30 days' written notice to Executive. Company may, in its sole discretion,
require Executive to cease active employment immediately. In the event of such a
termination, Company shall have only the following obligations:

(i)               Pay Executive severance in the form of base salary
                  continuation for 12 months; provided, however, that such
                  salary continuation shall immediately cease if Executive
                  accepts employment or an assignment with or otherwise performs
                  services for one of Company's competitors.

(ii)              If Executive has been employed the full fiscal year prior to
                  the date of termination, pay Executive any incentive bonus
                  declared, but unpaid.

(iii)             Continue Executive's health coverage (excluding life and
                  disability) for 12 months under the same terms as provided to
                  other Company executives; provided, however, that such
                  coverage shall cease upon Executive's becoming eligible for
                  similar coverage under another benefit plan or if Executive
                  accepts employment or an assignment with or otherwise

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                   performs services for one of Company's competitors.

                   5.3.3. FOR CAUSE. Company may terminate this Agreement during
its term if it has "cause" to do so. For purposes of this paragraph, the term
"cause" means the following:

         (i)      willful violation of laws and regulations governing Company;

         (ii)     failure to substantially comply with any material term of this
                  Agreement, provided Company shall make a written demand for
                  substantial compliance setting forth the specific reason(s)
                  for same and Executive shall have 60 days to cure, if
                  possible;

         (iii)    willful breach of fiduciary duties;

         (iv)     willful damage, willful misrepresentation, willful dishonesty,
                  or act of moral terpitude which Company determines has had or
                  is likely to have a material adverse effect upon its
                  operations, assets, reputation or financial conditions; or

         (v)      willful breach of any stated material employment policy.

Failure to meet performance targets and measures shall not constitute "cause" as
that term is used herein. Executive shall have reasonable opportunity to be
heard by the Board prior to a termination for cause. For purposes of this
paragraph, Executive's acts or omissions shall be considered "willful" if done
without a good faith, reasonable belief that such act or omission was in
Company's best interest. In the event of termination for cause, Company's
obligations hereunder cease on Executive's last day of active employment, unless
otherwise provided herein.

                  5.3.4. METHOD OF PAYMENT. Executive agrees that Company shall
have the option of paying the present value of any amount(s) due under this
paragraph in a lump sum or in the form of salary continuation, but in no event
shall such payout period exceed the applicable severance period stated in
paragraph 5.3.2(i) above. Present value shall be calculated based upon National
City Bank's prime interest rate.

         5.4.     TERMINATION BY EXECUTIVE.

                  5.4.1. AT END OF TERM. Executive may terminate this Agreement
at the end of its term or any extension of this Agreement by giving 60 calendar
days' written notice to Company's President. Company may, in its sole
discretion, accept Executive's termination effective immediately; provided,
however, that it shall continue to pay Executive for 60 calendar days. Company
shall thereafter have no obligations to Executive under this Agreement.

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                  5.4.2. VOLUNTARY RESIGNATION. Executive may terminate this
Agreement by his voluntary resignation. Executive shall give at least 60
calendar days' written notice of his intention to resign to Company's President,
which Company may accept immediately. In the event of Executive's resignation,
Company will have no further obligations or liability hereunder except as
provided herein.

         5.5. SALARY DUE AT TERMINATION. In the event of any termination of
Executive's employment under this Agreement, Executive (or his estate) shall be
paid any unpaid portion of his salary that has accrued by virtue of his
employment during the period prior to termination, and any unpaid, declared
bonus, together with any unpaid business expenses properly incurred under this
Agreement prior to termination. Such amounts shall be paid within 15 days of the
date of termination, unless otherwise provided herein.

6.       ARBITRATION. Unless stated otherwise herein, the parties agree that
arbitration shall be the sole and exclusive remedy to redress any dispute, claim
or controversy involving the interpretation of this Agreement or the terms,
conditions or termination of this Agreement or the terms, conditions or
termination of Executive's employment with Company. The parties intend that any
arbitration award shall be final and binding and that a judgment on the award
may be entered in any court of competent jurisdiction and enforcement may be had
according to its terms. This paragraph shall survive the termination or
expiration of this Agreement.

         6.1. Arbitration shall be held in Columbus, Ohio, and shall be
conducted by a retired federal judge or other qualified arbitrator mutually
agreed upon by the parties in accordance with the Voluntary Arbitration Rules of
the American Arbitration Association then in effect. The parties shall have the
right to conduct discovery pursuant the Federal Rules of Civil Procedure;
provided, however, that the Arbitrator shall have the authority to establish an
expedited discovery schedule and cutoff and to resolve any discovery disputes.
The Arbitrator shall not have jurisdiction or authority to change any provision
of this Agreement by alterations of, additions to or subtractions from the terms
hereof. The Arbitrator's sole authority in this regard shall be to interpret or
apply any provision(s) of this Agreement. The Arbitrator shall be limited to
awarding compensatory damages, including unpaid wages or benefits, but shall
have no authority to award punitive, exemplary or similar-type damages.

         6.2. Any claim or controversy not sought to be submitted to
arbitration, in writing, within 120 days of when it arose shall be deemed waived
and the moving party shall have no further right to seek arbitration or recovery
with respect to such claim or controversy.

         6.3. The arbitrator shall be entitled to award expenses, including the
costs of the proceeding, and reasonable counsel fees.

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         6.4. The parties hereby acknowledge that since arbitration is the
exclusive remedy, neither party has the right to resort to any federal, state or
local court or administrative agency concerning breaches of this Agreement,
except as otherwise provided herein in paragraph 6, and that the decision of the
Arbitrator shall be a complete defense to any suit, action or proceeding
instituted in any federal, state or local court before any administrative agency
with respect to any arbitrable claim or controversy.

7.       GENERAL PROVISIONS.

         7.1. The parties agree that the covenants and promises set forth in
paragraphs 4, 5 and 6 shall survive the termination of this Agreement and
continue in full force and effect.

         7.2. Except as otherwise provided in paragraph 6.2 above, failure to
insist upon strict compliance with any term hereof shall not be considered a
waiver of any such term.

         7.3. In computing the number of days for purposes of this Agreement,
all days shall be counted, including Saturdays, Sundays, and legal holidays;
provided, however, that if the final day of any time period falls on a Saturday,
Sunday, or legal holiday, then such final day shall be deemed to be the next day
which is not a Saturday, Sunday, or legal holiday.

         7.4. Executive represents and warrants to Company that he is not now
under, or bound to be under in the future, any obligation to any person, firm or
corporation which is or would be inconsistent or in conflict with this
Agreement, or that would prevent, limit, or impair in any way the performance of
his obligations hereunder.

         7.5. This Agreement, along with any other document, policy or practice
referenced herein (collectively referred to as "Agreement"), contain the entire
agreement of the parties regarding Executive's employment and supersede any
prior written or oral agreements or understandings relating to the same. No
modification or amendment of this Agreement shall be valid unless in writing and
signed by or on behalf of both parties.

         7.6. Once signed by both parties, this Agreement shall be binding upon
and shall inure to the benefit of the heirs, successors, and assigns of the
parties.

         7.7. This Agreement is intended to be performed in accordance with, and
only to the extent permitted by, all applicable laws, ordinances, rules and
regulations. If any provisions of this Agreement, or the application thereof to
any person or circumstance, shall, for any reason and to any extent, be held
invalid or unenforceable, such invalidity and unenforceability shall not affect
the remaining provisions hereof and the application of such provisions to other
persons or circumstances, all of which shall be enforced to the greatest extent
permitted by law.

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         7.8. The validity, construction, and interpretation of this Agreement
and the rights and duties of the parties hereto shall be governed by the laws of
the State of Ohio, without reference to the Ohio choice of law rules.

         7.9. Any written notice required or permitted hereunder shall be
mailed, certified mail (return receipt requested) or hand-delivered, addressed
to Company's President at its then principal office, or to Executive at the most
recent home address. Notices are effective upon receipt.

         7.10. The rights of Executive under this Agreement shall be solely
those of an unsecured general creditor of Company.

         7.11. The headings in this Agreement are inserted for convenience of
reference only and shall not be a part of or control or affect the meaning of
any provision hereof.

IN WITNESS WHEREOF, the parties have duly executed and delivered this Agreement
consisting of nine pages.

                                    EXECUTIVE

                                    /s/ James McGrady
                                    -------------------------------------
                                    James McGrady

                                    Signed: June 21, 2000

                                    VALUE CITY DEPARTMENT STORES, INC.

                                     By:  /s/ Michael J. Tanner
                                          --------------------------------
                                          Michael J. Tanner

                                     Its: President

                                          Signed: June 21, 2000

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                       VALUE CITY DEPARTMENT STORES, INC.

                         EXECUTIVE EMPLOYMENT AGREEMENT

         This Executive Employment Agreement (this "Agreement") is made as of
this 4th day of December, 2000 (the "effective date"), by and between George
Kolber ("Executive") and Value City Department Stores, Inc., an Ohio
corporation, its subsidiaries, successors and assigns (the "Company").

                                    RECITALS

         A. The Company desires to employ Executive as Vice Chairman and Chief
Executive Officer of the Company.

         B. The Company considers Executive's continued services to be in the
best interest of the Company and desires, through this Agreement, to assure his
continued services on behalf of the Company.

         C. Executive is willing to become employed by and to remain in the
employ of the Company on the terms set forth in this Agreement.

                                    AGREEMENT

         NOW, THEREFORE, the parties agree as follows:

         1. CONSIDERATION. As consideration for Executive's entering into this
Agreement and his willingness to remain bound by its terms, the Company shall
employ Executive and provide him with access to certain Confidential Information
as defined in this Agreement and other valuable consideration as provided for
throughout this Agreement, including in Sections 3 and 4 of this Agreement.

         2.       EMPLOYMENT.

                  (a) POSITION. As long as this Agreement remains in effect,
Executive will be employed as Vice Chairman and Chief Executive Officer of the
Company, reporting to the Board of Directors and its Chairman. Executive shall
perform the duties, undertake the responsibilities and exercise the authority
customarily performed, undertaken and exercised by persons employed in similar
executive capacities.

                  (b) RESTRICTED EMPLOYMENT. So long as Executive is employed
under this Agreement, Executive agrees to devote his full time and efforts
exclusively on behalf of the Company and its affiliates and to competently,
diligently, and effectively discharge Executive's duties hereunder.
Notwithstanding the foregoing, it is expressly acknowledged by the Company that
Executive serves as an officer of American Eagle Outfitters, Inc. and that such
employment will not interfere

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with Executive's employment with the Company. Executive shall not be prohibited
from engaging in such personal, charitable, or other nonemployment activities
that do not interfere with Executive's full time employment hereunder and which
do not violate the other provisions of this Agreement. Executive further agrees
to comply fully with all policies and practices of the Company as are from time
to time in effect.

                  (c) TERM. Unless terminated sooner pursuant to Section 9
hereof, the term of Executive's employment shall commence on effective date of
this Agreement and continue through the end of the Company's fiscal year 2003
(FY2003), and, at the end of the Initial Term, the term of this Agreement shall
be automatically extended for a period of three years, unless either the Company
or Executive shall have given written notice to the other at least three hundred
sixty (360) days prior to expiration of the Initial Term that the term of this
Agreement shall not be so extended.

         3.       COMPENSATION.

                  (a) Commencing on December 4, 2000, Executive's compensation
will be at an annual base rate of $900,000 through the Company's first full
fiscal year of this Agreement (FY2001) $1,000,000 in the second year (FY2002),
and $1,100,000 in the third fiscal year (FY2002), ("Basic Salary"), payable in
accordance with the normal payroll practices of the Company.

                  (b) Executive shall be granted 500,000 shares of restricted
stock of the Company which shall vest equally on the last day of each fiscal
year ending in 2002, 2003, and 2004 provided that the Company has positive
income before income taxes (exclusive of extraordinary gains and extraordinary
losses) for the fiscal year ended on the date of vesting, and which shall be
subject to the terms and conditions set forth in the restricted stock agreement
attached hereto as Exhibit A.

                  (c) Executive shall be granted 200,000 options to purchase
shares of the Company's common stock that will vest immediately. Executive will
also be granted an additional 300,000 options to purchase shares of the
Company's common stock which will vest equally on the first, second and third
anniversaries of the effective date of this Agreement. The option price for
these grants will be the market price established at the effective date of this
Agreement. The options granted pursuant to this Agreement shall be subject to
the terms and conditions set forth in the stock option agreements attached
hereto as Exhibit B. Additional stock options will be negotiated annually in
good faith.

                  (d) Beginning for the fiscal year ending February 2, 2002 and
in accordance with the Company's Incentive Compensation Plan, Executive will
receive an annual cash incentive bonus equal to three percent (3%) of the
Company's income before provision for income taxes for the first $50 million of
Company income before provision for income taxes and two percent (2%) of the
income before provision for income taxes above $50 million. Income before
provision for income taxes, as used in this Agreement, shall include all
extraordinary gains, but shall exclude all extraordinary losses and any bonuses
payable under the Company's Incentive Compensation Plan.

                  (g) Subject to applicable Company policies, Executive will be
reimbursed for necessary and reasonable business expenses incurred in connection
with the performance of his duties hereunder or for promoting, pursuing or
otherwise furthering the business or interests of the Company. The Company will
reimburse Executive for first class round trip travel from Executive's

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home to Columbus and all other business-related destinations. The Company shall
also pay all costs associated with Executive's tele-commuting.

                  (h) The Company will reimburse Executive for all reasonable
selling and closing costs associated with the sale of Executive's home in the
Pittsburgh, Pennsylvania area.

         4. FRINGE BENEFITS. Executive will be entitled to receive employee
benefits and participate in any employee benefit plans, in accordance with their
terms as from time to time amended, that the Company maintains during
Executive's employment and which are made generally available to all other
management employees in like positions. This includes a 401(k) and profit
sharing plan, health and medical insurance, and housing and car allowances. It
is agreed that the Company will pay any necessary COBRA payments on Executive's
behalf due to any break in medical coverage for any reason, including
pre-existing conditions.

         5. PUBLIC COMMUNICATIONS. Executive and the Company will agree upon the
text and manner of distribution of any public statements concerning Executive's
employment under this Agreement.

         6. INSURANCE. As long as Executive is a director or officer of the
Company, the Company will use its best efforts to provide directors' and
officers' insurance coverage for Executive on terms not less favorable than its
existing directors' and officers' insurance policies

         7.       CONFIDENTIAL INFORMATION.

                  (a) As used throughout this Agreement, the term "Confidential
Information" means any information Executive acquires during employment by the
Company (including information Executive conceives, discovers or develops) which
is not readily available to the general public and which relates to the
business, including research and development projects, of the Company, its
subsidiaries or its affiliated companies.

                  (b) Except in furtherance of the Company's business, Executive
shall not at any time, either during or for one (1) year following employment
with the Company, make use of, or disclose to any third party, any Confidential
Information unless the specific information becomes public from a source other
than Executive or another person or entity that owes a duty of confidentiality
to the Company. However, Executive may discuss Confidential Information with
employees of the Company when necessary to perform his duties to the Company.

                  (c) Upon Employment Separation, Executive shall deliver to the
Company all copies, notes, documents or records of any kind that relate to any
Confidential Information. As used herein, the term "notes" means written or
printed words, symbols, pictures, numbers or formulae. As used throughout this
Agreement, the term "Employment Separation" means the separation and/or
termination of Executive's employment with the Company, regardless of the time,
manner or cause of such separation or termination.

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         8.       NONCOMPETITION AND NONSOLICITATION.

                  (a) By entering into this Agreement, Executive acknowledges
that the Confidential Information has been and will be developed and acquired by
the Company by means of substantial expense and effort, that the Confidential
Information is a valuable asset of the Company's business, that the disclosure
of the Confidential Information to any of the Company's competitors would cause
substantial and irreparable injury to the Company's business, and that any
customers of the Company developed by Executive or others during his employment
are developed on behalf of the Company. Executive further acknowledges that
Executive has been provided with access to Confidential Information, including
Confidential Information concerning the Company's major customers, and it's
marketing and business plans, disclosure or misuse of which would irreparably
injure the Company.

                  (b) In exchange for the consideration specified in Section 1
of this Agreement -- the adequacy of which Executive expressly acknowledges --
Executive agrees that, without the express approval of the Company's Chairman,
during his employment by the Company and for a period of twelve (12) months
following Employment Separation, Executive shall not, directly or indirectly, as
an owner, shareholder, officer, employee, manager, consultant, independent
contractor, or otherwise:

                           (i) Attempt to recruit or hire, interfere with or
         harm, or attempt to interfere with or harm, the relationship of the
         Company, its subsidiaries or affiliates, with any person who is an
         employee, customer or supplier of the Company, it subsidiaries or
         affiliates;

                           (ii) Contact any employee of the Company for the
         purpose of discussing or suggesting that such employee resign from
         employment with the Company for the purpose of becoming employed
         elsewhere or provide information about individual employees of the
         Company or personnel policies or procedures of the Company to any
         person or entity, including any individual, agency or company engaged
         in the business of recruiting employees, executives or officers; or

                           (iii) Own, manage, operate, join, control, be
         employed by, consult with or participate in the ownership, management,
         operation or control of, or be connected with (as a stockholder,
         partner, or otherwise), any business, individual, partner, firm,
         corporation, or other entity that competes or plans to compete,
         directly or indirectly, with the Company, its products, or any
         division, subsidiary or affiliate of the Company including, but not
         limited to the companies expressly set forth on Exhibit C attached
         hereto; provided, however, that Executive's "beneficial ownership,"
         either individually or as a member of a "group" as such terms are used
         in Rule 13d of the General Rules and Regulations under the Securities
         Exchange Act of 1934, as amended (the "Exchange Act"), of not more than
         five percent (5%) of the voting stock of any publicly held corporation,
         shall not be a violation of this Agreement; provided, however, that
         Executive may own, manage, operate, join, control, be employed by,
         consult with or participate in the ownership, management, operation or
         control of, or be connected with (as a stockholder, partner, or
         otherwise), any business, individual, partner, firm, corporation, or
         other entity that is affiliated with or owned by the Company, its
         parent or any subsidiary or affiliate of its parent as of the date of
         this Agreement or which

                                       4
<PAGE>   5

          becomes such entity anytime hereafter, including American Eagle
          Outfitters, Inc. and its affiliates.

         9.       TERMINATION OF EMPLOYMENT.

                  (a) Termination Upon Death or Disability. Executive's
employment will terminate automatically upon Executive's death. The Company will
be entitled to terminate Executive's employment because of Executive's
disability upon 30 days written notice. "Disability" will mean "total
disability" as defined in the Company's long term disability plan or any
successor thereto. In the event of a termination under this Section 9(a), the
Company will pay Executive only the earned but unpaid portion of Executive's
Basic Salary plus the earned but unpaid portion of Executive's bonus, as
determined pursuant to Section 3(d) above, for the then current fiscal year pro
rated from the beginning of the then current fiscal year through Executive's
death.

                  (b) Termination by Company for Cause. An Employment Separation
for Cause will occur upon a determination by the Company that "Cause" exists for
Executive's termination and the Company serves Executive written notice of such
termination. As used in this Agreement, the term "Cause" shall refer only to any
one or more of the following grounds:

                           (i) Knowing commission of an act of dishonesty
          involving the Company, its business or property, including, but not
          limited to, misappropriation of funds or any property of the Company;

                           (ii) Engagement in activities or conduct clearly
          injurious to the best interests or reputation of the Company;

                           (iii) Willful and continued failure substantially to
         perform Executive's duties under this Agreement (other than as a result
         of physical or mental illness or injury), after the Board of Directors
         of the Company delivers to Executive a written demand for substantial
         performance that specifically identifies the manner in which the Board
         believes that Executive has not substantially performed his duties, and
         Executive shall have 30 days to cure, if possible;

                           (iv) Illegal  conduct or gross  misconduct that is
          willful and results in material and demonstrable damage to the
          business or reputation of the Company;

                           (v) The clear violation of any of the material terms
         and conditions of this Agreement or any other written agreement or
         agreements Executive may from time to time have with the Company,
         duties, and Executive shall have 30 days to cure, if possible;

                           (vi) The clear violation of the Company's code of
         business conduct or the clear violation of any other rules of behavior
         as may be provided in any employee handbook which would be grounds for
         dismissal of any employee of the Company; or

                           (vii) Commission of a crime which is a felony, a
         misdemeanor involving an act of moral turpitude, or a misdemeanor
         committed in connection with Executive's employment by the Company
         which causes the Company a substantial detriment.

                                       5
<PAGE>   6

                  No act or failure to act shall be considered "willful" unless
it is done, or omitted to be done, by Executive in bad faith or without
reasonable belief that Executive's action or omission was in the best interests
of the Company. Any act or failure to act that is based upon authority given
pursuant to a resolution duly adopted by the Board of Directors, or the advice
of counsel for the Company, shall be conclusively presumed to be done, or
omitted to be done, by Executive in good faith and in the best interests of the
Company.

                  In the event of a termination under this Section 9(b), the
Company will pay Executive only the earned but unpaid portion of Executive's
Basic Salary through the termination date.

                  Following a termination for Cause by the Company, if Executive
desires to contest such determination, Executive's sole remedy will be to submit
the Company's determination of Cause to arbitration in Columbus, Ohio before a
single arbitrator under the commercial arbitration rules of the American
Arbitration Association. If the arbitrator determines that the termination was
other than for Cause, the Company's sole liability to Executive will be the
amount that would be payable to Executive under Section 9(d) of this Agreement
for a termination of Executive's employment by the Company without Cause. Each
party will bear his or its own expenses of the arbitration.

                  (c) Termination by Executive. In the event of an Employment
Separation as a result of a termination by Executive for any reason, Executive
must provide the Company with at least 14 days advance written notice ("Notice
of Termination") and continue working for the Company during the 14-day notice
period, but only if the Company so desires to continue Executive's employment
and to compensate Executive during such period.

                  In the event of such termination under this Section, the
Company will pay Executive the earned but unpaid portion of Executive's Basic
Salary through the termination date.

                  (d) Termination by Company Without Cause. In the event of an
Employment Separation as a result of termination by the Company without Cause,
the Company will pay Executive the earned but unpaid portion of Executive's
Basic Salary through the termination date plus the earned but unpaid portion of
Executive's bonus, as determined pursuant to Section 3(d) above, for the then
current fiscal year pro rated from the beginning of the then current fiscal year
through the termination date, and will continue to pay Executive's Basic Salary
for the remainder of the then current term of this Agreement set forth in
Section 2(c) above (the "Severance Period"); provided, however, any such
payments will immediately end if (i) Executive is in violation of any of his
obligations under this Agreement, including Sections 7 and/or 8; or (ii) the
Company, after Executive's termination, learns of any facts about Executive's
job performance or conduct that would have given the Company Cause, as defined
in Section 9(b), to terminate Executive's employment. For purposes of this
Agreement, any "pro-rated" bonus amounts due Executive shall be determined by
dividing the number of days Executive was actively employed within the fiscal
year by 364 days, then multiplying the result against the fiscal year's bonus
calculation.

                  (e) The nonsolicitation/noncompetition periods described in
Section 8 of this Agreement shall be suspended and subject to extension while
Executive engages in any activities in

                                       6
<PAGE>   7

breach of this Agreement. In the event that a court grants injunctive relief to
the Company for Executive's failure to comply with Section 8, the
nonsolicitation/noncompetition period shall begin again on the date such
injunctive relief is granted. Nothing in this section shall relieve Executive of
his obligations under Section 8.

                  (f) Nothing contained in this Section 9 shall be construed as
limiting Executive's obligations under Sections 7 and/or 8 of this Agreement
concerning Confidential Information, or Noncompetition and Nonsolicitation.

         10.      REMEDIES; ARBITRATION.

                  (a) Executive hereby agrees that any disputes under Sections 7
and/or 8 shall not be subject to arbitration. If Executive breaches Sections 7
and/or 8, the damage will be substantial, although difficult to quantify, and
money damages may not afford the Company an adequate remedy; therefore, if
Executive breaches or threatens to breach Sections 7 and/or 8, the Company shall
be entitled, in addition to other rights and remedies, to specific performance,
injunctive relief and other equitable relief to prevent or restrain such
conduct.

                  (b) Unless stated otherwise herein, the parties agree that
arbitration shall be the sole and exclusive remedy to redress any dispute, claim
or controversy involving the interpretation of this Agreement or the terms,
conditions or termination of this Agreement or the terms, conditions or
termination of Executive's employment with the Company. The parties intend that
any arbitration award shall be final and binding and that a judgment on the
award may be entered in any court of competent jurisdiction and enforcement may
be had according to its terms. This section shall survive the termination or
expiration of this Agreement.

                           (i) Arbitration shall be held in Columbus, Ohio,
and shall be conducted by a retired federal judge or other qualified arbitrator
mutually agreed upon by the parties in accordance with the Voluntary Arbitration
Rules of the American Arbitration Association then in effect. The parties shall
have the right to conduct discovery pursuant to the Federal Rules of Civil
Procedure; provided, however, that the Arbitrator shall have the authority to
establish an expedited discovery schedule and cutoff and to resolve any
discovery disputes. The Arbitrator shall not have jurisdiction or authority to
change any provision of this Agreement by alterations of, additions to or
subtractions from the terms hereof. The Arbitrator's sole authority in this
regard shall be to interpret or apply any provisions(s) of this Agreement. The
Arbitrator shall be limited to awarding compensatory damages, including unpaid
wages or benefits, but shall have no authority to award punitive, exemplary or
similar-type damages.

                           (ii) Any claim or controversy not sought to be
submitted to arbitration, in writing, within 120 days of when it arose shall be
deemed waived and the moving party shall have no further right to seek
arbitration or recovery with respect to such claim or controversy.

                           (iii) The arbitrator shall be entitled to award
expenses, including the costs of the proceeding, and reasonable counsel fees.

                           (iv)  The parties hereby  acknowledge that since
arbitration is the exclusive remedy, neither party has the right to resort to
any federal, state or local court or administrative

                                       7
<PAGE>   8

agency concerning breaches of this Agreement, except as otherwise provided
herein in Section 10, and that the decision of the Arbitrator shall be a
complete defense to any suit, action or proceeding instituted in any federal,
state or local court before any administrative agency with respect to any
arbitrable claim or controversy.

         11. INDEMNIFICATION. The Company will indemnify, defend and hold
Executive harmless for and against any liabilities arising from or relating to
this Agreement.

         12. NO WAIVER. Any failure by the Company to enforce any provision of
this Agreement shall not in any way affect the Company's right to enforce such
provision or any other provision at a later time.

         13. SAVING. If any provision of this Agreement is later found to be
completely or partially unenforceable, the remaining part of that provision of
any other provision of this Agreement shall still be valid and shall not in any
way be affected by the finding. Moreover, if any provision is for any reason
held to be unreasonably broad as to time, duration, geographical scope, activity
or subject, such provision shall be interpreted and enforced by limiting and
reducing it to preserve enforceability to the maximum extent permitted by law.

         14. NO LIMITATION. Executive acknowledges that his employment with the
Company may be terminated at any time by the Company or by Executive with or
without cause in accordance with the terms of this Agreement. This Agreement is
in addition to and not in place of other obligations of trust, confidence and
ethical duty imposed on Executive by law.

         15. GOVERNING LAW. This Agreement shall be interpreted and enforced in
accordance with the laws of the State of Ohio without reference to its choice of
law rules.

         16. FINAL AGREEMENT. This Agreement replaces any existing agreement
between Executive and the Company relating to the same subject matter and may be
modified only by an agreement in writing signed by both Executive and a duly
authorized representative of the Company.

         17. FURTHER AGREEMENTS. The parties to this Agreement will execute, or
cause to be executed, any further agreement(s) necessary to effectuate the terms
of this Agreement.

                                       8

<PAGE>   9

         18. FURTHER ACKNOWLEDGMENTS. EXECUTIVE ACKNOWLEDGES THAT HE HAS
RECEIVED A COPY OF THIS AGREEMENT, THAT HE HAS READ AND UNDERSTOOD THIS
AGREEMENT, THAT HE UNDERSTANDS THIS AGREEMENT AFFECTS HIS RIGHTS, AND THAT HE
HAS ENTERED INTO THIS AGREEMENT VOLUNTARILY.

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

                                       VALUE CITY DEPARMENT STORES, INC.

                                       By:/s/ Jay L. Schottenstein
                                          ------------------------
                                              Jay L. Schottenstein,
                                              Chairman

                                       EXECUTIVE:

                                       /s/ George Kobler
                                        ---------------------------
                                       George Kolber

                                       9

<PAGE>   10

                                    EXHIBIT A

                           RESTRICTED STOCK AGREEMENT

<PAGE>   11

                                    EXHIBIT B

                             STOCK OPTION AGREEMENT

<PAGE>   12

                                    EXHIBIT C

                           LIST OF COMPETING COMPANIES

Ross Stores, Inc. and its affiliates

The TJX Companies, Inc. and its affiliates

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