SECOND AMENDMENT TO EMPLOYMENT AGREEMENT
THIS SECOND AMENDMENT TO EMPLOYMENT AGREEMENT (the "Amendment")
is made and entered into effective as of the 1st day of March, 1998,
by and between XXXX STORES, INC. (the "Company") and XXXXX X. XXXXX
(the "Executive"). The Executive and the Company previously entered
into an Employment Agreement as of March 1, 1996, as amended (the
"Agreement"), and it is now the intention of the Executive and the
Company to further amend the Agreement as set forth below.
1. The Executive and the Company hereby amend the Agreement by
deleting paragraph 1 of the Agreement in its entirety and replacing it
with the following new paragraph 1:
A. Term. The employment of the Executive by the Company
will continue as of the date hereof and end on March 1,
2002, unless extended or terminated in accordance with this
Agreement. During September 2000, and during September
every two years thereafter (2002, 2004, etc.) for so long as
the Executive is employed by the Company, upon the written
request of the Executive, the Company's Chief Executive
Officer shall consider extending the Executive's employment
with the Company. Such request must be delivered to the
Chief Executive Officer no later than the August 31 that
precedes the September in which the requested extension will
be considered. The Chief Executive Officer shall advise the
Executive, in writing, on or before the October 1st
following the Executive's written request, whether the
requested extension is approved. The failure of the Chief
Executive Officer to provide such written advice shall
constitute approval of the Executive's request for
extension. If the Executive's request for an extension is
approved, this Agreement shall be extended three additional
years.
2. The Executive and the Company hereby amend the Agreement by
adding the following at the end of paragraph 4(a):
In the event of the occurrence of a Change of Control (as
defined in paragraph 6(f) hereof), then during the period
commencing on the effective date of the Change of Control
and expiring two years thereafter (the "Remaining Term"),
the Executive shall receive as additional salary the
aggregate amount of $750,000 per year (the "Additional
Salary") which shall be payable in equal installments during
the Remaining Term in accordance with the Company's normal
payroll policies applicable for senior officers. The
provisions of paragraph 1 ("Term") of the Agreement
notwithstanding, the Executive's employment by the Company
under this Agreement shall continue until the later of (a)
the expiration of the Remaining Term or (b) the expiration
of any extension pursuant to paragraph 1. If any portion of
the Additional Salary is subject to the tax ("Excise Tax")
imposed by Section 4999 of the Internal Revenue Code, the
Company shall reimburse the Executive in such amounts so
that, after deduction of any Excise Taxes paid by the
Executive and any federal, state or local income tax and
Excise Taxes paid upon such reimbursements, the net amounts
retained by the Executive are equal to the Additional
Salary. For all purposes of paragraph 8 hereof
("Compensation and Benefits Upon Termination"), the
Additional Salary shall be included within the term "salary"
as used in such paragraph 8. Notwithstanding the above, the
Additional Salary shall not be included in base salary for
purposes of determining any payments under the Company's
Incentive Compensation Plan. The Executive's entitlement to
this Additional Salary is expressly conditioned upon the
Executive's compliance with the terms of this Agreement.
3. The Executive and the Company hereby amend the Agreement by
changing the date set forth in paragraph 9 from March 1, 1999, to
March 1, 2002.
4. Except as modified by this Amendment, the Agreement shall
remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Second
Amendment to Employment Agreement effective as of the date and year
first above written.
XXXX STORES, INC. EXECUTIVE
By: /s/Xxxxxxx Xxxxxxx /s/Xxxxx X. Xxxxx
Xxxxxxx Xxxxxxx Xxxxx X. Xxxxx
Vice Chairman and
Chief Executive Officer
