Second Amendment to Employment Agreement between Charlotte Russe, Inc. and Bernard Zeichner

Summary

This amendment updates the employment agreement between Charlotte Russe, Inc. and Bernard Zeichner. It extends Mr. Zeichner's employment term to seven years from the original start date, sets his annual base salary at $550,000, and outlines bonus eligibility based on the company's EBITDA growth for fiscal years 2002 and 2003. The amendment also provides for company-paid life insurance premiums (up to $25,000 per year) and additional payments to cover taxes on certain benefits. All other terms of the original agreement remain unchanged.

EX-10.19 3 a77853ex10-19.txt EXHIBIT 10.19 EXHIBIT 10.19 SECOND AMENDMENT TO EMPLOYMENT AGREEMENT This SECOND AMENDMENT TO EMPLOYMENT AGREEMENT ("Second Amendment") is entered into as of October 1, 2001, by and between Charlotte Russe, Inc., a California corporation (the "Company"), formerly known as Lawrence Merchandising Corporation, and Mr. Bernard Zeichner ("Mr. Zeichner"). Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to such terms in the Employment Agreement (as defined below). WHEREAS, the Company and Mr. Zeichner have entered into an Employment Agreement (the "Employment Agreement"), dated October 1, 1996, which sets forth the terms and conditions of Mr. Zeichner's employment by the Company; WHEREAS, Section 7.01 of the Employment Agreement provides that the Company and Mr. Zeichner may amend the Employment Agreement; and WHEREAS, the Company and Mr. Zeichner desire to amend the Employment Agreement as set forth in this Second Amendment; NOW, THEREFORE, in consideration of the premises set forth herein and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Company and Mr. Zeichner hereby amend the Employment Agreement as follows, effective as of October 1, 2001: 1. Section 3.01 of the Employment Agreement is hereby restated in its entirety as follows: "SECTION 3.01. Term. Subject to earlier termination as provided in this Agreement, Mr. Zeichner shall be employed commencing on the date first mentioned above (the "Commencement Date") and ending on the seventh anniversary of such date (the "Term"). Neither party is under any obligation to extend or renew this Agreement. Any new employment agreement shall only be effective after having been reduced to writing and executed by both parties hereto. In the absence of earlier termination as provided herein, this Agreement shall terminate automatically on the seventh anniversary of the Commencement Date. In the event Mr. Zeichner continues to perform services after this Agreement has terminated, and pending execution of a new employment agreement, if any, such services shall constitute employment for an unspecified term, terminable at will, with or without cause or reason, with or without advance notice, and with or without pay in lieu of advance notice." 2. Section 4.01 of the Employment Agreement is hereby restated in its entirety as follows: "SECTION 4.01. Salary. The Company shall pay Mr. Zeichner an annualized base salary of $550,000, to be paid in accordance with the Company's pay policy. 3. Section 4.03 of the Employment Agreement is hereby amended by adding the following sentence to the end of such Section: "For work performed during each of fiscal year 2002 and 2003 (ending September 30, 2002 and 2003, respectively), Mr. Zeichner shall receive an annual bonus in an amount determined in accordance with SCHEDULE A hereto." 4. The following new Sections 4.12, 4.13 and 4.14 are hereby added to the Employment Agreement immediately following Section 4.11 thereof: "SECTION 4.12. Life Insurance. The Company shall pay for, or promptly reimburse Mr. Zeichner for, insurance premiums incurred by Mr. Zeichner with respect to life insurance policy number #1530859, provided that the amount of such payments shall in no event exceed $25,000 per year. SECTION 4.13. Certain Additional Payments. The Company shall pay to Mr. Zeichner such additional amounts (the "Gross-Up Payment") as are necessary to reimburse Mr. Zeichner, on an after-tax basis, for all federal, state and local income and employment taxes (the "Taxes") payable by Mr. Zeichner with respect to the payments or benefits received by Mr. Zeichner pursuant to Sections 4.05, 4.06, and 4.12 hereof (the "Payments"), such that the net amount retained by Mr. Zeichner, after deduction of any Taxes on the Payments and on the Gross-Up Payment, shall be equal to the Payments. 5. This Second Amendment shall be and is hereby incorporated in and forms a part of the Employment Agreement. 6. Except as amended as set forth herein, the Employment Agreement shall continue in full force and effect. IN WITNESS WHEREOF, the parties hereto have duly executed this Second Amendment to Employment Agreement as of the date first set forth above. BERNARD ZEICHNER CHARLOTTE RUSSE, INC., formerly known as LAWRENCE MERCHANDISING CORPORATION By: /s/ BERNARD ZEICHNER By: /s/ MARK A. HOFFMAN ---------------------------- ---------------------------- Title: Chief Operating Officer Dated: October 8, 2001 Dated: October 5, 2001 ------------------------- ------------------------- 2 SCHEDULE A BONUS DETERMINATION For the Company's fiscal years 2002 and 2003, Mr. Zeichner shall be eligible for a bonus based on achievement of annual EBITDA results. The bonus amount shall be based on the Company's total consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) for each respective year, computed pursuant to the definition provided in the Company's Second Amended and Restated Revolving Credit Agreement, dated December 23, 1998, as amended. The annual bonus shall be an amount equal to the annual EBITDA amount multiplied by a predetermined percentage. Such percentage shall be 0.00% in the event that EBITDA for any particular year grows 10% or less over the prior fiscal year, shall be 0.50% if EBITDA grows 20%, and shall be 0.75% if EBITDA grows 35% or more. Should EBITDA for any particular year reflect a growth rate between 10% and 20%, the bonus percentage shall be a proportional interpolation between 0.00% and 0.50%. Should EBITDA reflect a growth rate between 20% and 35%, the bonus percentage shall be a proportional interpolation between 0.50% and 0.75%. The growth rates, bonus percentages and resultant bonus payments shall be adjusted in the event of any extraordinary acquisition by the Company, as such adjustments shall be established by the Board, in which deliberations Mr. Zeichner shall be entitled to participate as a member thereof. A-1