Execution Copy
SECOND AMENDMENT TO
EMPLOYMENT AGREEMENT
The EMPLOYMENT AGREEMENT (the "Agreement"), dated as of March 21, 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 R. Xxxxxx Xxxxxx (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."
Page (2)
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 most recent calendar years in which he
received a bonus, or if no such bonus payments were made to
Executive, 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;
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 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) 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. This Amendment may be executed in one or more counterparts which
taken together shall constitute one and the same instrument.
EXECUTIVE:
/s/ R. Xxxxxx Xxxxxx
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R. Xxxxxx Xxxxxx
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: PRESIDENT, CHIEF EXECUTIVE OFFICER By: /s/ Xxxxx X. Xxxxxxx
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Name: XXXXX X. XXXXXXX
Title: PRESIDENT, CHIEF EXECUTIVE
OFFICER
