Saks Fifth Avenue 2010 Annual Report Download - page 102

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3
pursuant to Section 3(b) of this Agreement shall be paid at the time that bonuses for the fiscal year in which the Disability
occurred are paid to other senior executives of the Company. If the Executive’s disability continues after the end of such
twelve-month period, the Company may terminate this Agreement and the Executive’s employment for disability
(“Disability Termination”). Upon a Disability Termination and subject to the last sentence of this paragraph (ii), the
Executive will be entitled to (A) exercise each of the Executive’s unexercised stock option awards, if any, in accordance
with and subject to the Plan and the stock option agreement applicable to the award, (B) receive each of the Executive’s
unvested performance share awards and restricted stock awards in accordance with and subject to the Plan and the
performance share agreement or restricted stock agreement applicable to the award, (C) receive any annual cash bonus
earned by the Executive and payable, but not yet paid, for the fiscal year prior to the fiscal year in which the Disability
Termination occurs paid at the time that bonuses for the fiscal year in which the Disability occurred are paid to other senior
executives of the Company, (D) rights that the Executive or the Executive’s dependents may have under COBRA or any
other federal or state law or that are derived independent of this Agreement by reason of the Executive’s participation in
any employee benefit arrangement or plan maintained by the Company, and (E) receive all other benefits in accordance
with section 4 of this Agreement that would be payable upon the Disability Termination. Upon a Disability Termination,
SKS’s obligations in paragraph (viii) of subsection (b) of this section 5 and in sections 7, 9(f), and 9(h) of this Agreement,
and the Executive’s obligations in sections 7, 8, and 9(h) of this Agreement, will continue in effect in accordance with their
terms. The Company will not have any obligation to provide to the Executive any benefit pursuant to paragraphs
(i) throu
g
h (vii) of subsection (b) of this section 5 u
p
on a Disabilit
y
Termination.”
4. Section 5(
g
) of the Em
p
lo
y
ment A
g
reement is deleted in its entiret
y
and the followin
g
shall be substituted in its
p
lace:
“(g)
A
pplication of IRC Code Section 409A.
(i) This Agreement shall be interpreted and construed in a manner that avoids the imposition of excise taxes and other
penalties under Section 409A of the Code (“409A Penalties”). In the event the terms of this Agreement would subject the
Executive to 409A Penalties, the Company and the Executive shall cooperate diligently to amend the terms of this
Agreement to avoid such 409A Penalties, to the extent possible. Notwithstanding the foregoing, under no circumstance
shall the Company be responsible for any taxes, penalties, interest or other losses or expenses incurred by the Executive
due to any failure to comply with Section 409A of the Code, except that the Company shall be responsible for such taxes,
penalties, interest, losses or expenses that result from a payment by the Company to the Executive in contravention of the
Executive’s written instructions to the Com
p
an
y
, which
p
a
y
ment constitutes an act of ne
g
li
g
ence b
y
the Com
p
an
y
.
(ii) If the Company or the Executive reasonably and in good faith determines that any payment to be made or benefit to be
provided to the Executive upon the Executive’s termination of employment would be subject to Section 409A(a)(1) of the
Internal Revenue Code of 1986, as amended (the “Code”), the Com
p
an
y