Saks Fifth Avenue 2010 Annual Report Download - page 97

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replacement benefits for a period of not less than three months under an accident and health plan covering employees of the
service provider’s employer (a “Disability”). During the 12 month period following a Disability, the Executive shall continue to
receive all payments and benefits provided by this Agreement, including without limitation the benefits described in Section 3 o
f
this Agreement, and the Executive shall remain eligible to receive, in accordance with their respective terms, the severance
and/or benefits that would be payable upon a termination of the Executive’s employment as described in Sections 4, 5, 6, 8, 9 or
11 of this Agreement, less all disability payments received pursuant to the Company’s short-term disability/sick pay plan or its
Group Long-Term Disability Insurance Policy. Notwithstanding the foregoing, during the 12 month period following a
Disability, the Base Salary payable pursuant to Section 3(a) of this Agreement shall be paid in monthly installments, and any
bonus payable 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 12-month period, the Company may terminate this Agreement and the Executive’s employment for disability (“Disability
Termination”). Disputes regarding the existence of the Executive’s disability shall be resolved by the determination of a
physician selected by the Board who is reasonably acceptable to the Executive. The Executive shall submit to appropriate
medical examinations for purposes of determining disability. Upon a Disability Termination, the Executive shall be entitled to
(a) the payments in the amounts and at the times described in Sections 4(a)(i)(A), (B) and (C) hereof and described in Section 4
(b)(ii)(B) hereof; (b) the Executive’s unexercisable stock options, unvested shares of restricted stock and unvested performance
shares shall vest as described in Section 4(b)(ii)(E) hereof; and (c) all other benefits in accordance with Section 3(d) of this
Agreement that would be payable upon such Disability Termination. Upon a Disability Termination, the Company’s obligations
in Sections 11, 13(f) and 13(h) of this Agreement, and the Executive’s obligations in Sections 11, 12, and 13(h) of this
Agreement, shall continue in effect in accordance with their respective terms.”
“The Agreement is intended to comply with the requirements of Section 409A or an exemption or exclusion therefrom and, with
respect to amounts that are subject to Section 409A, shall in all respects be administered in accordance with Section 409A. Any
payments that qualify for the “short-term deferral” exception or another exception under Section 409A shall be paid under the
applicable exception. Each payment of compensation under this Agreement shall be treated as a separate payment of
compensation for purposes of Section 409A. All payments to be made upon a termination of employment under this Agreement
may only be made upon a “separation from service” under Section 409A. In no event may the Executive, directly or indirectly,
designate the calendar year of any payment under this Agreement. Any tax gross-up payment made pursuant to this Agreement
shall be made no later than the end of Executive’s taxable year next following Executive’s taxable year in which Executive
remits the related taxes.
Notwithstanding anything to the contrary in this Agreement, all reimbursements and in-kind benefits provided under this
Agreement shall be made or provided in accordance with the requirements of Section 409A, including, where applicable, the
requirement that (a) any reimbursement is for expenses incurred during the Executive’s lifetime (or during a shorter period of
time specified in this Agreement); (b) the amount of expenses eligible
3
6. Section 10 of the Employment Agreement is amended by adding three new paragraphs to the end of the Section which shall
p
rovide as follows: