Execution Copy
SECOND AMENDMENT TO
EMPLOYMENT AGREEMENT
The EMPLOYMENT AGREEMENT (the "Agreement"), dated as of January 10, 2002,
by and between Prime Retail, Inc., a Maryland corporation ("Prime"), and the
sole general partner of Prime Retail, L.P., a Delaware limited partnership (the
"Operating Partnership"), and Xxxxx X. Xxxxxxxx (the "Executive"), as amended by
the first Amendment thereto, effective June 6, 2002, is further amended by this
Second Amendment, effective August 12, 2002 in the following respects:
1. Section 2 of the Agreement is hereby deleted in its entirety and
replaced with the following:
2. Term.
The term of this Agreement, unless earlier terminated in
accordance with the terms of this Agreement, will extend to
December 31, 2005 (the "Original Term"); provided, however,
that if this Agreement is not affirmatively terminated by either
party, or extended or renewed for a specific duration in writing
by agreement of the parties, prior to the last day of the
Original Term, this Agreement will continue on a month-to-month
basis thereafter (the "Extended Term"). The parties agree to
cooperate and discuss in good faith their intentions with regard
to this Agreement's extension or renewal 12 months prior to the
end of the Original Term. Notwithstanding the foregoing, the
Company agrees to provide Executive with a minimum of six
months' advance written notice of its intent to terminate this
Agreement during the Original Term or the Extended Term for any
reason other than Cause, in which case the Company shall comply
with the notice requirements of Sections 4(a)(2) and (3) hereof,
and Executive agrees to provide the Company with a minimum of 60
days' advance written notice of his intent to terminate this
Agreement during the Original Term or the Extended Term for any
reason other than Good Reason, in which case Executive shall
comply with the notice requirements of Section 4(b)(1)(E)
hereof. The Original Term and any Extended Term of this
Agreement shall end only following termination by written notice
by the Company or Executive in accordance with this Section. For
purposes of this Agreement, the terms "Original Term" and
"Extended Term" shall herein be collectively referred to as the
"Term."
2. Subpart (B) of Section 4(a)(1) is hereby deleted in its entirety
and replaced with the following:
(B) if such termination occurs during the Original Term, a
termination payment in an amount equal to the product of (x) the
number of full and partial years remaining in the Original Term,
and (y) the sum of (i) Executive's then current Base Salary and
(ii) a bonus payment equal to 100% of the average annual bonus
(which term shall exclude awards received pursuant to the Prime
Retail, Inc. 2002 Long-Term Incentive Plan) paid to Executive
for the two prior calendar years, provided that for purposes of
this calculation, Executive's annual bonus shall be deemed to
have been $160,000 both for year 2000 and for year 2001, or, if
greater, a bonus payment equal to 50% of his then current Base
Salary (the sum of the amounts determined by adding clauses (i)
and (ii) is in the aggregate hereinafter referred to as the
"One-Year Pay Equivalent"), and the product of (x) and (y) shall
be payable within thirty (30) days of the effective date of
termination;
Page (2)
3. The following subpart (E) is hereby added to Section 4(a)(1) of
the Agreement:
(E) all vested but undistributed awards under the Prime
Retail, Inc. 2002 Long-Term Incentive Plan, payable to Executive
in accordance with the provisions of that plan.
4. The following subpart (D) is hereby added to Section 4(a)(2) of
the Agreement:
(D) receive all vested but undistributed awards under the
Prime Retail, Inc. 2002 Long-Term Incentive Plan, payable to
Executive in accordance with the provisions of that plan.
5. The following subpart (E) is hereby added to Section 4(a)(4) of the
Agreement:
(E) all vested but undistributed awards under the Prime
Retail, Inc. 2002 Long-Term Incentive Plan, payable to Executive
in accordance with the provisions of that plan.
6. Subpart (B) of Section 4(b)(1) of the Agreement is hereby
deleted in its entirety and replaced with the following:
(B) any earned and unpaid bonus(es) otherwise payable to him
in accordance with Section 3(b), and all vested but
undistributed awards under the Prime Retail, Inc. 2002 Long-Term
Incentive Plan, payable to Executive in accordance with the
provisions of that plan;
7. The following sentence is hereby added at the end of Section
4(c), "Death":
In addition, the Executive's estate shall be entitled to receive
all vested but undistributed awards under the Prime Retail, Inc.
2002 Long-Term Incentive Plan, payable to the estate in
accordance with the provisions of that plan.
Page (3)
8. Subpart (2) of Section 4(d), "Termination Following a Change of
Control," is hereby deleted in its entirety and replaced with the following:
(2) a termination payment in an amount equal to two times
the One-Year Pay Equivalent, which amount shall be payable
within thirty (30) days of the effective date of termination;
provided, however, that if Executive has received a Milestone
Bonus under the Prime Retail, Inc. 2002 Long-Term Incentive Plan
the vesting of which was accelerated pursuant to Section 5.3(a)
(iv) thereof but the amount of which was not reduced pursuant to
the last sentence of Section 5.4 thereof (the "Change of Control
Accelerated Award"), the termination payment described in this
subpart (2) shall be reduced by the amount that such Change of
Control Accelerated Award would have been reduced pursuant to
the last sentence of Section 5.4 of the Prime Retail, Inc. 2002
Long-Term Incentive Plan had the termination payment been due
and owing under this Section 4(d) at the time the Change of
Control Accelerated Award was distributed to Executive;
9. Nothing in this Amendmen or in the Amendment to Employment
Agreement dated as of January 10, 2002, supersedes, modifies, or replaces any
term or provision of the Agreement, except as explicitly stated in this
Amendment or in the Amendment to Employment Agreement dated as of January 10,
2002. All provisions of the Agreement, as amended, shall remain in full force
and effect, except as explicitly modified herein.
10. This Amendment may be executed in one or more counterparts which
taken together shall constitute one and the same instrument.
EXECUTIVE:
/s/ Xxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxxxx
PRIME RETAIL, INC., a Maryland PRIME RETAIL, L.P., a Delaware
corporation limited partnership
By: /s/ Xxxxx X. Xxxxxxx By: Prime Retail, Inc.
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Name: XXXXX X. XXXXXXX Its: Sole General Partner
Title: CHAIRMAN, CHIEF EXECUTIVE OFFICER By: /s/ Xxxxx X. Xxxxxxx
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Name: XXXXX X. XXXXXXX
Title: CHAIRMAN, CHIEF EXECUTIVE
OFFICER
