AMENDMENT NO. 3 TO EMPLOYMENT AGREEMENT
This Amendment No. 3 to Employment Agreement is made and entered into on
the 25th day of March, 1999, among PAMIDA HOLDINGS CORPORATION ("Holdings"), a
Delaware corporation, PAMIDA, INC. ("Pamida"), a Delaware corporation, and
XXXXXX X. XXXXXXX (the "Executive"). Holdings and Pamida collectively are
referred to in this Amendment No. 3 as the "Companies".
* * *
WHEREAS, the Companies and the Executive are parties to an Employment
Agreement dated March 6, 1997 (the "Employment Agreement"); and
WHEREAS, the Companies and the Executive now desire to amend the Employment
Agreement as more particularly set forth below;
NOW, THEREFORE, the Companies and the Executive agree as follows:
1. Pursuant to Paragraph 6 of the Employment Agreement, the Companies and
the Executive agree that the Executive's incentive bonus program for the fiscal
year of Holdings ending January 30, 2000 ("Fiscal 2000") shall be the following:
(a) If (i) the consolidated earnings of Holdings and its
subsidiaries (on a first-in, first-out basis with respect to
merchandise inventories) before interest, taxes,
depreciation, and amortization (the "EBITDA") for Fiscal
2000 (the "FY2000 EBITDA") are less than $48,500,000 or (ii)
the percentage increase in the comparable store sales of
Pamida for Fiscal 2000 compared with the fiscal year ended
January 31, 1999 (the "Comparable Store Sales Increase") is
less than 3%, then the Executive shall not be entitled to
any incentive bonus for Fiscal 2000.
(b) If the FY2000 EBITDA equals or exceeds $48,500,000 and the
Comparable Store Sales Increase equals or exceeds 3%, then
the Executive's incentive bonus for Fiscal 2000 shall be
determined as a percentage of the Executive's base salary
from the matrix attached to this Amendment No. 3 taking into
account (i) the FY2000 EBITDA and (ii) the Comparable Store
Sales Increase. The Comparable Store Sales Increase shall be
determined in accordance with Pamida's historical practices.
(c) For purposes of such matrix, a Comparable Store Sales
Increase of more than 9% shall be treated as an increase of
9%, and FY2000 EBITDA of more than $56,000,000 shall be
treated as FY2000 EBITDA of $56,000,000.
(d) For purposes of applying such matrix, the Executive's base
salary shall be the Executive's base salary in effect on
January 30, 2000.
(e) The maximum incentive bonus that the Executive shall have
the opportunity to earn for Fiscal 2000 is 115% of the
Executive's applicable base salary.
(f) FY2000 EBITDA amounts between whole millions of dollars and
a Comparable Store Sales Increase between whole percentages
shall be interpolated on a straight-line basis for purposes
of applying such matrix.
(g) Solely by way of illustration of the application of such
matrix, if the FY2000 EBITDA is $50,500,000 and the
Comparable Store Sales Increase for Fiscal 2000 is 4.6%,
then the Executive's incentive bonus for Fiscal 2000 would
be 49.25% of the Executive's applicable base salary.
The Executive's incentive bonus for Fiscal 2000 (if any) shall be paid to the
Executive as soon as practicable after Holdings has received the final audit
report with respect to Fiscal 2000 from its independent accountants.
2. The provisions of Paragraph 1 of this Amendment No. 3 are intended to
satisfy the requirements of Paragraph 6 of the Employment Agreement for the
fiscal year of Holdings ending in 2000.
3. Paragraph 12 of the Employment Agreement hereby is amended in its
entirety so as to read as follows:
"12. NOTICE OF NONRENEWAL. If, during or after the
expiration of the term of this agreement, the Companies determine
not to continue the employment of the Executive at a base salary
at least equal to the Base Salary which is in effect as of the
last day of the term of this agreement and with fringe benefits
and an incentive bonus program reasonably comparable to those in
effect as of the last day of the term of this agreement, then the
Companies shall so notify the Executive in writing (the "Notice")
promptly after such determination has been made. If the Executive
receives the Notice either at a time when there are less than
twelve (12) months left in the term of this agreement or after
the expiration of the term of this agreement while the Executive
is still in the employ of the Companies, then regardless of the
expiration of the term of this agreement the Executive shall be
entitled to receive the following payments and benefits from the
Companies:
(a) Continued payment of the Executive's Base
Salary, at the annual rate in effect on the
last day of the term of this agreement, until
that date (the "Extended Payment Date") which
is twelve (12) months after the date on which
the Executive received the Notice; provided,
that such payments shall be reduced by the
aggregate amount of salary or consulting fees
which the Executive derives from employment
with another employer (for purposes of this
Paragraph 12, the "Other Employment"),
whether as an employee or as a consultant,
during the period from the effective date of
the termination of the Executive's employment
by the Companies pursuant to the Notice
through the Extended Payment Date (the
"Extended Payment Period"). In no event,
however, shall the Executive be required to
repay to the Companies any portion of any
payments made to the Executive pursuant to
this subparagraph 12(a) for any periods prior
to the periods during which the Executive
earned such salary or consulting fees from
the Other Employment.
(b) An incentive bonus in an amount equal to (i)
the average amount of the incentive bonuses
received by the Executive from the Companies
for the three fiscal years of the Companies
ended prior to March 5, 2000, multiplied by
(ii) a fraction whose numerator is the number
of days in the Extended Payment Period and
whose denominator is 365, such incentive
bonus to be paid on the last day of the
Extended Payment Period; provided, that such
incentive bonus shall be reduced by any
bonuses received or receivable by the
Executive from the Other Employment (if any)
for services performed by him during the
Extended Payment Period.
(c) Continued participation in the following
benefit plans or programs of the Companies
which may be in effect from time to time, to
the extent that continued participation by
the Executive is permitted under the terms
and conditions of such plans or programs
(unless such continued participation is
restricted or prohibited by applicable
governmental regulations governing such plans
or programs), until the first to occur of the
expiration of the Extended Payment Period or
(separately with respect to the termination
of each benefit) the provision of a
substantially equivalent benefit to the
Executive by another employer of the
Executive:
(1) Group medical/hospital insurance,
(2) Group dental insurance,
(3) Group life insurance,
(4) Executive life insurance,
(5) Group long-term disability
insurance,
(6) Exec-U-Care medical expense
reimbursement insurance,
(7) Professional financial, tax, and
estate planning services,
(8) Automobile allowance,
(9) Annual physical examination.
If continued participation by the Executive in any
of the foregoing benefit plans or programs of the
Companies is not permitted under the terms and
conditions of any of such plans or programs, then
in lieu of continued participation in such plan or
program the Companies shall pay to the Executive
in cash an amount equal to the cost that the
Companies would have incurred with respect to the
Executive if the Executive were permitted to
continue as a participant in such plan or program
during the applicable period. The Companies agree
not to unilaterally take any action which would
prevent the Executive from continuing to
participate in any of such plans or programs
unless such action similarly affects all other
participants in such plans or programs.
The Executive promptly shall notify the Companies of his
acceptance of the Other Employment and of the amount of
compensation and benefits which the Executive receives or is
entitled to receive from the Other Employment during the Extended
Payment Period. In the event of the Executive's death prior to
the end of the Extended Payment Period, the payments and benefits
provided for in this Paragraph 12 shall cease and terminate as of
the date of the Executive's death, except as otherwise required
by applicable law. The provisions of this Paragraph 12, if they
become applicable to the Executive, shall survive the expiration
of the term of this agreement unless, by written agreement
between the Executive and the Companies, this agreement is
terminated."
4. This Amendment No. 3 shall be effective as of
February 1, 1999.
5. As hereby amended, the Employment Agreement shall
remain in full force and effect.
IN WITNESS WHEREOF, the Companies and the Executive have executed this
Amendment No. 3 to Employment Agreement on the day and year first above written.
PAMIDA HOLDINGS CORPORATION,
a Delaware corporation
By: /s/Xxxxxx X. Xxxxxxx
--------------------
Xxxxxx X. Xxxxxxx, Chairman of the
Board and Chief Executive Officer
PAMIDA, INC., a Delaware corporation
By: /s/Xxxxxx X. Xxxxxxx
--------------------
Xxxxxx X. Xxxxxxx, Chairman of the
Board and Chief Executive Officer
/s/Xxxxxx X. Xxxxxxx
--------------------
Xxxxxx X. Xxxxxxx
