EXHIBIT 10.2
EMPLOYMENT AGREEMENT
SAKS INCORPORATED AND SUBSIDIARIES

SEVENTH AMENDED AND RESTATED
EMPLOYMENT AGREEMENT

    This Seventh Amended and Restated Employment Agreement ("Agreement") is
entered into as of the 1st day of November 2000, by and between Saks
Incorporated ("Company"), and R. Brad Martin ("Executive").

    Company and Executive agree as follows:

    1. Employment. Company hereby employs Executive as Chief Executive Officer
of Company. It is anticipated that Executive will be elected Chairman of the
Board.

    2. Duties. During his employment, Executive shall devote substantially all
of his working time, energies, and skills to the benefit of Company's business.
Executive agrees to serve Company diligently and to the best of his ability and
to use his best efforts to follow the policies and directions of Company's Board
of Directors.

    3. Compensation. Executive's compensation and benefits under this Agreement
shall be as follows:

        (a) Base Salary. Company shall pay Executive a base salary ("Base
Salary") at a rate of no less than $950,000 per year. In addition, the Board of
Directors of Company shall, in good faith, consider granting increases in such
Base Salary based upon such factors as Executive's performance and the growth
and/or profitability of Company. Executive's Base Salary shall be paid in
installments in accordance with Company's normal payment schedule for its senior
management. All payments shall be subject to the deduction of payroll taxes and
similar assessments as required by law.

        (b) Bonus. In addition to the Base Salary, Executive shall be eligible
pursuant to the 1998 Senior Executive Bonus Plan for a yearly cash bonus with a
maximum potential of 150% ("Maximum Bonus Potential") of Base Salary based upon
his performance, in accordance with specific annual objectives, set in advance,
all as approved by the Board of Directors.

        (c) End of Five-Years Service Stock Grants. In accordance with
Executive's prior employment agreements, Company shall issue to Executive fifty
thousand (50,000) shares of common stock as soon as possible after October 11,
2001, provided Executive has served the Company continuously for five years
following October 11, 1996, the date of Executive's Second Amended and Restated
Employment Agreement. In the event of Executive's death prior to October 11,
2001, Executive's estate shall be issued a pro rata potion of the shares, on the
basis of 10,000 shares per year.

        (d) Annual Stock Grant Bonus. Pursuant to the 1998 Senior Executive
Bonus Plan, an amount up to twenty thousand (20,000) shares of Company common
stock may be issued to Executive as soon as possible after the end of each
fiscal year of Company, based upon annual targeted growth in intrinsic value of
the Company or other factors, as determined by the Human Resources Committee of
the Board of Directors. The Human Resources Committee, subject to approval from
the Board of Directors, shall have sole and exclusive discretion to grant or
withhold any portion of such yearly stock grant.

        (e) Second Annual Stock Grant Bonus. Pursuant to the 1998 Senior
Executive Bonus Plan, Company shall award Executive a bonus of up to 20,000
(twenty thousand) shares of Company common stock on the basis of growth in
earnings per share with the Human Resources Committee of the Board of Directors
setting the objectives in advance. The Human Resources Committee shall have sole
and exclusive discretion to determine whether that objective has been met, and
the Committee may consider matters such as nonrecurring and extraordinary items.
The Human Resource Committee may allocate the 40,000 shares bonus potential in
Paragraphs 3(d) and 3(e) in any manner permitted by the 1998 Senior Executive
Bonus Plan so that. if less than 20,000 shares of stock may be earned under this
Section 3(e), it may increase accordingly the number of shares that may be
earned under Section 3(d).

        (f)  New Option Grant. Executive is granted a non-qualified option
("Option") to purchase 1,323,631 shares of Company common stock at an option
price equal to the closing price of the stock at the close of business on
November 1, 2000 (the "Grant Date"), as reported in the Wall Street Journal. The
Option is granted pursuant to the Company's 1994 Amended and Restated Long-Term
Incentive Plan ("1994 LTIP"), and shall be subject to the terms and conditions
thereof. The Option shall be exercisable at the following times: to the extent
of 20% on May 1, 2001, 20% on November 1, 2001, 20% on November 1, 2002, 20% on
November 1, 2003, and 20% on November 1, 2004. The Option may be exercised up to
ten (10) years from the Grant Date; provided, however, that 100% of the option
shall be exercisable at the time the closing price of the Company common stock
reaches $22 per share on any day, and Executive shall then have 6 months to
exercise the option or it shall expire.

        (g) Vesting of Restricted Stock Grants. Company has declared earned the
137,500 unvested shares of restricted stock granted under the TARSAP programs in
1996 and 1998. One third of those shares shall vest on each of the first three
anniversaries of this Agreement provided that Executive remains employed by
Company on those dates.

        (h) Effect of Change In Control on Options and Restricted Stock. In the
event of a Change in Control (as defined in the Company's 1994 LTIP), any
Options and restricted stock granted to Executive prior to such Change In
Control shall immediately vest.

        (i) Forgiveness of Loan. Company shall continue to forgive the original
$500,000 interest-free loan due January 31, 1999, in $100,000 increments, at the
end of each fiscal year; provided, however, that Executive must continue to be
employed by Company for any portion of the loan to be forgiven, and provided
further that Executive must repay any outstanding balance if he terminates
employment.

        (j) Company Aircraft. Company requires Executive to use Company aircraft
for personal or family use, whenever possible. Such use is important for the
safety of Executive and so that Executive may remain in communications with
other Company officials as necessary. Executive may use Company aircraft or
charter aircraft for such uses without further reimbursement to Company.

    Upon Executive's termination of employment for any reason, Executive shall
be entitled to use at his discretion and without cost to Executive, an aircraft,
comparable in size and quality to the aircraft he is using as of this date, for
200 hours a year for three years.

    Upon Executive's termination of employment for any reason after a Change in
Control (as defined in the 1994 LTIP), Executive shall have the option to buy
any one Company aircraft at its then book value on the Company's books. If he
exercises this option, Company shall reimburse him for the operating costs of
the aircraft for up to 200 hours per year for three years.

        (k) Future Restricted Stock Agreement. Beginning in fiscal year 2001,
Company shall enter into a new restricted stock agreement patterned after
Executive's prior restricted stock agreement entered into in 1998, following the
significant terms of the 1998 agreement as it relates to number of shares and
vesting.

    4. Insurance and Other Expenses and Benefits. Company shall allow Executive
to participate in each employee benefit plan and to receive each executive
benefit that Company provides for senior executives at the level of Executive's
position.

        (a) Company shall pay the reasonable costs for Executive's tax and
financial planning, and shall buy split-dollar life insurance for Executive in
accordance with the directions of the Human Resources Committee of the Board. In
addition, Company shall reimburse Executive, as additional compensation, his
share of annual premiums paid for split dollar life insurance.

        (b) Company shall provide security for Executive's residences or shall
reimburse Executive for such expenses.

        (c) Executive shall be entitled to lifetime participation in Company's
health plan in the event that he retires from Company.

  

             (d)    Executive shall be entitled to a lifetime associate discount
for merchandise purchased from Company, and this provision shall survive
termination of employment or expiration of this Agreement.

    5. Term; termination without Cause or for Good Reason. The term of this
Agreement shall be for five (5) years, provided, however, that Company may
terminate this Agreement at any time without Cause, as defined below, upon
thirty (30) days' prior written notice and Executive may terminate this
Agreement for Good Reason. Good Reason shall mean a mandatory relocation from
the Memphis, Tennessee area, or at any time Executive chooses to terminate
employment within one year after a Change In Control of Company (as defined in
the in the 1994 LTIP). Upon such termination of employment, this Agreement shall
terminate except for Section 8, which shall continue in effect as set forth in
Section 8. In the event of such termination by Company without Cause or by
Executive for Good Reason, Executive shall be entitled, in addition to all
earned but unpaid wages and benefits, to the following severance benefits:

        (a) a sum equal to the Base Salary then in effect plus 25% of
Executive's Maximum Bonus Potential times the longer of 3 years or the balance
of the time remaining in the Term, and

        (b) immediate vesting of all stock options and restricted stock awards
(including service grants) with the ability to exercise the stock options for
the shorter of two years or the original expiration period of the option, and

        (c) participation in Company's health plans, with family coverage, for
his life, and continuation of split-dollar insurance agreements for five years,
and

        (d) vesting at the retirement rate in Company's Supplemental Savings
Plan with no reduction in the current rate of return,

        (e) reimbursement for the cost of a full-time secretary during the
balance of the term of this Agreement, and

        (f) if any payment, right or benefit provided for in this Agreement or
otherwise paid to Executive by Company is treated as an "excess parachute
payment" under Section 280(G)(b) of the Internal Revenue Code of 1986, as
amended, (the "Code"), Company shall indemnify and hold harmless and make whole,
on an after-tax basis, Executive for any adverse tax consequences, including but
not limited to providing to Executive on an after-tax basis the amount necessary
to pay any tax imposed by Code Section 4999.

    In addition, this Agreement shall terminate upon the death of Executive,
except as to: (a) Executive's estate's right to exercise any unexercised stock
options pursuant to Company's stock option plan then in effect, with it being
understood that Company would follow its traditional policy of vesting all of
Executive's stock options upon death, (b) other entitlements under this contract
that expressly survive death, (c) vesting at the retirement rate of benefits
under Company's Supplemental Savings Plan, (d) payment of earned but unpaid
wages and benefits, and (e) any rights which Executive's estate or dependents
may have under COBRA or any other federal or state law or which are derived
independent of this Agreement by reason of his participation in any plan
maintained by Company.

    6. Termination by Company for Cause. (a) Company shall have the right to
terminate Executive's employment under this Agreement for Cause, in which event
no salary or bonus shall be paid after termination for Cause except for (i)
earned but unpaid wages and benefits, and (ii) Company shall vest a pro rata
fractional portion of Executive's stock options based on the number of days
Executive was employed since the last vesting of such options. Termination for
Cause shall be effective immediately upon notice sent or given to Executive. For
purposes of this Agreement, the term "Cause" shall mean and be strictly limited
to: conviction of Executive, after all applicable rights of appeal have been
exhausted or waived, for any crime that materially discredits Company or is
materially detrimental to the reputation or goodwill of Company.

        (b) In the event that Executive's employment is terminated, Executive
agrees to resign as an officer and/or director of Company (or any of its
subsidiaries or affiliates), effective as of the date of such termination, and
Executive agrees to return to Company upon such termination any of the following
which contain confidential information: all documents, instruments, papers,
facsimiles, and computerized information which are the property of Company or
such subsidiary or affiliate.

    7. Disability. If Executive becomes disabled at any time during the term of
this Agreement, he shall after he becomes disabled continue to receive all
payments and benefits provided under the terms of this Agreement for a period of
twelve consecutive months, or for the remaining term of this Agreement,
whichever period is shorter. In the event that Executive is disabled for more
than twelve consecutive months during the term of this Agreement, Executive
shall, at the expiration of the initial twelve consecutive month period, be
entitled to receive under this Agreement 50% of his Base Salary plus the
insurance and benefits described in Section 4 of this Agreement for the
remaining term of this Agreement. While Executive is disabled, he shall remain
employed for purposes of vesting of restricted stock and stock options, and,
after his employment ends, he shall be entitled to the lifetime benefits set
forth in Section 5(c). For purposes of this Agreement, the term "disabled" shall
mean the inability of Executive (as the result of a physical or mental
condition) to perform the duties of his position under this Agreement with
reasonable accommodation and which inability is reasonably expected to last at
least one (1) full year.

    8. Non-competition; Unauthorized Disclosure.

        (a) Non-competition. During the period Executive is employed under this
Agreement, and for a period of two years thereafter, Executive:

            (i) shall not engage in any activities, whether as employer,
proprietor, partner, stockholder (other than the holder of less than 5% of the
stock of a corporation the securities of which are traded on a national
securities exchange or in the over-the-counter market), director, officer,
employee or otherwise, in competition with (i) the businesses conducted at the
date hereof by Company or any subsidiary or affiliate, or (ii) any business in
which Company or any subsidiary or affiliate is substantially engaged at any
time during the employment period;

            (ii) shall not solicit, in competition with Company, any person who
is a customer of the businesses conducted by Company at the date hereof or of
any business in which Company is substantially engaged at any time during the
term of this Agreement; and

            (iii) shall not induce or attempt to persuade any employee of
Company or any of its divisions, subsidiaries or then present affiliates to
terminate his or her employment relationship in order to enter into competitive
employment.

        (b) Unauthorized Disclosure. During the period Executive is employed
under this Agreement, and for a further period of two years thereafter,
Executive shall not, except as required by any court or administrative agency,
without the written consent of the Board of Directors, or a person authorized
thereby, disclose to any person, other than an employee of Company or a person
to whom disclosure is reasonably necessary or appropriate in connection with the
performance by Executive of his duties as an executive for Company, any
confidential information obtained by him while in the employ of Company;
provided, however, that confidential information shall not include any
information now known or which becomes known generally to the public (other than
as a result of unauthorized disclosure by Executive).

        (c) Scope of Covenants; Remedies. The following provisions shall apply
to the covenants of Executive contained in this Section 8:

            (i) the covenants contained in paragraph (i) and (ii) of Section
8(a) shall apply within all the territories in which Company is actively engaged
in the conduct of business while Executive is employed under this Agreement,
including, without limitation, the territories in which customers are then being
solicited;

            (ii) without limiting the right of Company to pursue all other legal
and equitable remedies available for violation by Executive of the covenants
contained in this Section 8, it is expressly agreed by Executive and Company
that such other remedies cannot fully compensate Company for any such violation
and that Company shall be entitled to injunctive relief to prevent any such
violation or any continuing violation thereof;

            (iii) each party intends and agrees that if, in any action before
any court or agency legally empowered to enforce the covenants contained in this
Section 8, any term, restriction, covenant or promise contained therein is found
to be unreasonable and accordingly unenforceable, then such term, restriction,
covenant or promise shall be deemed modified to the extent necessary to make it
enforceable by such court or agency; and

            (iv) the covenants contained in this Section 8 shall survive the
conclusion of Executive's employment by Company.

    9. General Provisions.

        (a) Notices. Any notice to be given hereunder by either party to the
other may be effected by personal delivery, facsimile, electronic mail or U.S.
mail, registered or certified, postage prepaid with return receipt requested.
Mailed notices shall be addressed to the parties at the addresses set forth
below, but each party may change his or its address by written notice in
accordance with this Section 9(a). Notices shall be deemed communicated as of
the actual receipt or refusal of receipt.

    If to Executive: R. Brad Martin
  

                                              1025 Cherry Road
                     Memphis, TN 38117

    If to Company:   Saks Incorporated
  

                                              750 Lakeshore Parkway
                     Birmingham, AL 35211

        (b) Partial Invalidity. If any provision in this Agreement is held by a
court of competent jurisdiction to be invalid, void or unenforceable, the
remaining provisions shall, nevertheless, continue in full force and without
being impaired or invalidated in any way.

        (c) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Tennessee.

        (d) Entire Agreement. Except for any prior grants of options, restricted
stock, or other forms of incentive compensation evidenced by a written
instrument -- some of which are attached hereto as Exhibit A -- or by an action
of the Board or Directors, this Agreement supersedes any and all other
agreements, either oral or in writing, between the parties hereto with respect
to employment of Executive by Company and contains all of the covenants and
agreements between the parties with respect to such employment. Each party to
this Agreement acknowledges that no representations, inducements or agreements,
oral or otherwise, that have not been embodied herein, and no other agreement,
statement or promise not contained in this Agreement, shall be valid or binding.
Any modification of this Agreement will be effective only if it is in writing
signed by the party to be charged.

        (e) No Conflicting Agreement. By signing this Agreement, Executive
warrants that he is not a party to any restrictive covenant, agreement or
contract which limits the performance of his duties and responsibilities under
this Agreement or under which such performance would constitute a breach.

        (f) Headings. The Section, paragraph, and subparagraph headings are for
convenience or reference only and shall not define or limit the provisions
hereof.

        (g) Attorney's Fees. If any case is brought to enforce any right or
provision set out in this Agreement, Company shall reimburse Executive for
reasonable costs incurred (including attorneys' fees) by Executive: (i) in the
case of termination of employment that occurs prior to a Change in Control only
if the Executive substantially prevails, and (ii) in the case of termination of
employment after a Change in Control regardless of the outcome of the action
with reimbursement being made as expenses are incurred.

    IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.

                        SAKS INCORPORATED

                        BY: _____________________
  

                                                                James A. Coggin
                            President and COO

 

                            _____________________
  

                                                                Brian J. Martin
                            General Counsel

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__________________________
                                                                         R. Brad
Martin
                                                                        
Executive