EXHIBIT 10.16(b)
AMENDMENT TO CHANGE OF CONTROL AGREEMENT
OF XXXXX X. XXXXXX
AMENDMENT dated as of December 3, 1996 to the Change of Control
Agreement (the "Change of Control Agreement" formerly titled Employment
Agreement) dated as of August 25, 1988, by and among The Musicland Group,
Inc., a Delaware corporation (the "Company"), Musicland Stores Corporation, a
Delaware corporation (the "Parent") and Xxxxx X. Xxxxxx (the "Executive").
WHEREAS, the Board of Directors, on behalf of the Company and the
Parent, and the Executive have determined it to be in their mutual best
interests to amend the Change of Control Agreement in certain respects;
NOW, THEREFORE, BE IT RESOLVED, that the Change of Control Agreement
shall be amended as follows:
1. Section 1, OPERATION OF AGREEMENT, is amended by deleting the words
"prior to September 1, 1991" in clause (i) of subparagraph (a) of
Paragraph 1.01, by deleting clause (ii) of subparagraph (a) of
Paragraph 1.01 and deleting the last sentence of 1.01(a) and inserting
this sentence in its place: Upon the date of a change of control, this
Agreement shall become operative immediately." and by deleting
subparagraph (b) of Paragraph 1.01.
2. Paragraph 1.02, "Change of Control", subparagraph (a) the definition
"Change of Control" is amended by deleting the phrase "and are publicly
traded on a recognized securities exchange." and by deleting "30%" and
inserting in its place "20%".
3. Paragraph 1.02, "Change in Control" is amended by deleting subparagraph
(b) thereof and inserting in its place the following new subparagraph
(b):
"(b) a majority of the directors of the Company or the Parent are persons
other than persons (i) for whose election proxies have been solicited
by the Board of Directors of the Company or the Parent, or (ii) who
are then serving as directors appointed by the Board of Directors of
the Company or the Parent to fill vacancies on the applicable Board
of Directors caused by death or resignation (but not by removal) or
to fill newly-created directorships, but excluding for purposes of
this clause (ii) any such individual whose initial assumption of
office occurs as a result of either an actual or threatened election
contest (as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Securities Exchange Act of 1934) or other
actual or threatened solicitation of proxies or consents, or"
4. Paragraph 1.03 of Section 1 is amended by deleting the phrase "or within
30 days of the date Eugster is terminated within the meaning of clause
(ii) of subparagraph 1.01(a), whichever is later,"
5. Paragraph 2.01 of Section 2, EMPLOYMENT; PERIOD OF EMPLOYMENT, is amended
by inserting, after the word, "subsidiary" the words "or affiliate."
6. Paragraph 2.02 of Section 2, EMPLOYMENT; PERIOD OF EMPLOYMENT, is
amended by deleting "36th" and inserting in its place "24th," by
deleting "24th" and inserting in its place "12th," and by deleting
"18th" and inserting in its place "6th."
7. Paragraph 3.01 of Section 3, POSITION, DUTIES, RESPONSIBILITIES, is
amended by deleting the title "Executive Vice President and Chief
Financial Officer" in both places that it appears in subparagraph (a)
thereof, and inserting in said places the title "President, Mall Stores
Division."
8. Paragraph 4.01 of Section 4, COMPENSATION, COMPENSATION PLANS,
PERQUISITES, is amended by deleting the salary of "$170,000" in clause
(i) thereof and inserting in its place "$308,700"; and by deleting
"30%" in clause (ii) thereof and inserting in its place "35%."
9. Paragraph 8.02 of Section 8, TERMINATION, is amended by deleting "30%"
in subparagraph (b) thereof and inserting in its place "35%."
10. Paragraph 8.03 of Section 8, "TERMINATION" subparagraph 8.03(b)(ii) is
hereby deleted, in its entirety, and is no longer of any force or
effect.
11. Subparagraph 8.03(iii) is amended by deleting the words "clauses (i)
and (ii)" and inserting in its place "clause (i)."
12. Paragraph 10.01 of Section 10, MINIMUM SEVERANCE PAYMENT, is amended by
deleting in the first and last sentences of the first paragraph of this
section the number "24" and inserting in both places the number "12."
13. Paragraph 10.01 is further amended by deleting subparagraph (ii)(C) of
the definition of "Severance Period" in its entirety and is no longer
of any force or effect.
14. Section 11, REDUCTION FOR EQUITY APPRECIATION, is hereby deleted in its
entirety and is no longer of any force or effect.
15. Paragraph 12.02 of Section 12, JOINT AND SEVERAL LIABILITY; TRUST
AGREEMENT, relating to establishment of a trust, is amended by adding the
following words at the end of that paragraph:
"; provided, however, that Executive may request that such trust be
established at any time on or after the date a Change in Control occurs
and prior to the date all amounts to which Executive is or may become
entitled from such trust have been paid to Executive."
IN WITNESS WHEREOF, the undersigned have executed this Amendment of
Change of Control Agreement as of the date set forth above.
THE MUSICLAND GROUP, INC.
By: /s/ Xxxx X. Xxxxxxx
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Its: Xxxx X. Xxxxxxx, Chairman & CEO
MUSICLAND STORES CORPORATION
By: /s/ Xxxx X. Xxxxxxx
-------------------------------------
Its: Xxxx X. Xxxxxxx, Chairman & CEO
EXECUTIVE
/s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
