Execution Copy
SECOND AMENDMENT TO
EMPLOYMENT AGREEMENT
The EMPLOYMENT AGREEMENT (the "Agreement"), entered into as of July 24,
2000, 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. Xxxxxxx (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, "Term," of the Agreement is hereby deleted in its
entirety and replaced with the following:
2. Term. Unless earlier terminated in accordance with the
terms of this Agreement, the term of this Agreement shall be a
period commencing on June 6, 2002 and ending on December 31,
2005. On December 31, 2005, and each succeeding anniversary of
such date, the Term of this Agreement shall automatically be
extended for an additional one year period unless, not later
than one hundred eighty (180) days prior to December 31, 2005,
or any anniversary of such date, either party to this Agreement
gives notice to the other that the Term of this Agreement shall
not be extended or further extended beyond its then
automatically extended Term.
2. Subpart (B) of Section 4(a)(1) is hereby deleted in its entirety
and replaced with the following:
(B) a termination payment in an amount equal to the sum of
(x) one (1) times the amount of the Base Salary then applicable,
plus (y) one (1) times the average of the amounts payable to
the Executive pursuant to the provisions of Section 3(b)
hereof (which section excludes awards received pursuant to the
Prime Retail, Inc. 2002 Long-Term Incentive Plan) for the two
(2) calendar years immediately preceding the calendar year in
which the effective date of the termination of this Agreement
occurs (the sum of the amounts determined by adding subsection
(x) and (y) is in the aggregate hereinafter referred to as the
"Normal Termination Payment"), and the Normal Termination
Payment shall be payable within thirty (30) days of the
effective date of termination;
3. The following subpart (G) is hereby added to Sections 4(a)(1),
4(a)(2), and 4(a)(4) of the Agreement:
(G) 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.
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4. The following subpart (H) is hereby added to Section 4(b)(1) of
the Agreement:
(H) 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 (G) is hereby added to Section 4(b)(2) of
the Agreement:
(G) 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. 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.
7. Subpart (B) of Section 4(e), "Termination Following a Change of
Control," is hereby deleted in its entirety and replaced with the following:
(B) a termination payment in an amount equal to $1,600,000,
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 (B) 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(e) at the time the Change of Control Accelerated Award was
distributed to Executive;
8. Subpart (B) of Section 4(e)(I) is hereby deleted in its entirety
and replaced with the following:
(B) a termination payment in an amount equal to two times
the sum of (x) Executive's then current Base Salary and (y) a
bonus payment equal to 100% of the average annual bonus paid
to Executive for the two most recent calendar years in which
he received a bonus, or if no such bonus payments were paid to
Executive, a bonus payment equal to fifty percent (50%) of his
then current Base Salary; 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 (B)
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(e)(I) at the time the Change of
Control Accelerated Award was distributed to Executive;
Page (3)
9. This Amendment may be executed in one or more counterparts which
taken together shall constitute one and the same instrument.
EXECUTIVE:
/s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx
PRIME RETAIL, INC., a Maryland PRIME RETAIL, L.P., a Delaware limited
corporation partnership
By: /s/ Xxxxxx X. Xxxxxxx By: Prime Retail, Inc.
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Name: XXXXXX X. XXXXXXX Its: Sole General Partner
Title: PRESIDENT By: /s/ Xxxxxx X. Xxxxxxx
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Name: XXXXXX X. XXXXXXX
Title: PRESIDENT