Exhibit 10.1
 
EMPLOYMENT AGREEMENT
 
This Employment Agreement (this “Agreement”), dated as of April 10, 2017 (the
“Effective Date”), is between Fred’s Inc., a Tennessee corporation (the
“Company”), and Jason Jenne a resident of the State of Tennessee (“Employee”).
 
W I T N E S S E T H:

WHEREAS, the Company desires to employ Employee to serve as Senior Vice
President of Pharmacy/Finance, and Employee desires to accept such employment,
on the terms and subject to the conditions set forth herein.
 
NOW, THEREFORE, in consideration of the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:
 
1. Term of Employment.  Subject to the terms and conditions of this Agreement,
the Company agrees to employ Employee, and Employee accepts employment with the
Company for a term of two (2) years, unless sooner terminated as provided
herein, commencing on the Effective Date (the “Initial Term”). Upon the
expiration of the Initial Term, this Agreement shall automatically renew for
additional terms of two (2) years (each, a “Renewal Term” and, together with the
Initial Term, the “Term”), unless either party provides the other party with
written notice of its intent not to renew the Agreement at least one hundred
eighty (180) days prior to the expiration of the then-current Term.
 
2. Duties.  Employee agrees to serve as Senior Vice President of
Pharmacy/Finance. During the term of Employee’s employment hereunder, Employee
shall perform the duties consistent with that which the Company shall from time
to time reasonably assign to Employee. Employee shall devote his full business
time, best efforts, and ability to the business of the Company, shall comply
with the overall policies established by the Company, and shall do all
reasonably in Employee’s power to promote, develop and enhance the profitability
of the business of the Company.  Without limiting the generality of the
foregoing, during his employment by the Company, Employee shall not, without the
prior written consent of the Company, render services, other than as an employee
of the Company, to or for any person, firm, partnership, limited liability
company, corporation, or other organization for compensation.
 
3. Compensation and Benefits.
 
(a) Base Pay. The Company shall pay Employee an annual salary (the “Base Pay”)
of $325,000 which shall be payable in accordance with the Company’s regular
payroll practices as in effect from time to time, and less any amounts required
to be withheld under applicable state and Federal tax and other related laws and
regulations.  The Base Pay is subject to the Company’s annual review practices;
provided, Employee’s Base Pay may be increased by the Company, but in no event
will Employee’s Base Pay be reduced below $325,000 (same as above).
 
(b) Management Incentive Program.  For each fiscal year completed during
Employee’s employment under this Agreement, Employee will be eligible to
participate in the Company’s Management Incentive Program at the Senior Vice
President level, which Program specifies the parameters of an annual bonus
payable based upon Employee’s performance and that of the Company against
achievement of pre-established and approved goals and targets (the “Annual
Bonus”).  The Management Incentive Program currently provides for an Annual
Bonus in the range of 55%-110% of Base Pay, but the Program and these parameters
are subject to change from time to time by the Company in its sole discretion. 
But for the percentages included in this Agreement, the Company’s Management
Incentive Plan will control all process and procedure. Employee must be an
employee in good standing throughout the fiscal year in which an Annual Bonus is
earned and on the date the Annual Bonus is paid in order to be eligible for
payment of such Annual Bonus.  The Annual Bonus, if any is earned, will be paid
by the Company within the timeframe specified by the Management Incentive
Program policies and procedures.
 

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(c) Participation in Employee Benefit Plans.  Employee will be eligible to
participate in all employee benefit plans from time to time in effect for
similarly situated and titled employees of the Company generally, except to the
extent such plans are duplicative of benefits otherwise provided Employee under
this Agreement. Employee’s participation will be subject to the terms of the
applicable plan documents and generally applicable Company policies. Employee
will have no recourse against either the Company or any Affiliate under this
Agreement in the event that the Company should alter, modify, add to or
eliminate any employee benefit plans.
 
(d) Paid Time Off.  Employee will be entitled to 4 weeks of vacation. Vacation
may be taken at such times and intervals as Employee shall determine, subject to
the business needs of and approval of the Company, which shall not be
unreasonably withheld. Vacation shall otherwise be subject to the policies of
the Company, as in effect from time to time; provided, Employee will be entitled
to the greater of 4 weeks vacation or the vacation Employee would otherwise be
entitled to receive under such Company vacation policies.
 
(e) Equipment.  Employee will be provided a laptop computer (if needed),
smartphone and such other technology as determined by the Company.  These items
are to be used for Company business and are subject to Company policy and
procedures which further outline the appropriate use of these items.
 
(f) Expense Reimbursement.  The Company shall reimburse Employee for all
reasonable and necessary out-of-pocket expenses incurred in carrying out their
duties under this Agreement in accordance with the Company’s written policies. 
Employee shall present to the Company an itemized account of and receipts for
such expenses in any form reasonably required by the Company. Employee will also
be provided a Company credit card for use only on Company business and in
compliance with Company policies.
 
(g) Car Allowance.  The Company shall provide a car allowance to Employee, and
Employee agrees to be responsible for any income taxes related to this benefit.
 
(h) Relocation.  The Company shall provide relocation expenses, in accordance
with the Company’s current practices, for Employee upon the need for Employee to
relocate.
 
4. Termination.
 
(a) Termination by Employee Without Cause. Employee may terminate this Agreement
and Employee’s employment hereunder, for any reason or no reason, by providing
at least one hundred eighty (180) days’ advance written notice to the Company.
 
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(b) Termination by the Company.  The Company may terminate this Agreement and
Employee’s employment hereunder at any time with or without cause upon providing
thirty (30) days written notice if terminating without cause or at any time with
Cause upon providing written notice to Employee, which shall set forth in
reasonable detail the specific conduct of Employee that the Company considers to
constitute Cause  For purposes of this Agreement, the term “Cause” means
termination due to the gross negligence or willful misconduct of Employee in the
performance or intentional non-performance of Employee’s duties to the Company. 
No act or failure on the part of Employee shall be considered “willful”
hereunder unless it is done, or omitted to be done, by Employee in bad faith and
without the reasonable belief that Employee’s action or omission was in the best
interests of the Company.
 
(c) Termination in the Event of Death or Disability.  Notwithstanding any other
provision of this Agreement, this Agreement shall terminate (i) upon the death
of Employee; or (ii) upon Employee’s Disability, where Employee’s “Disability”
shall mean Employee has been unable to perform, without a reasonable
accommodation, the essential functions of his position under this Agreement by
reason of physical or mental incapacity or disability for a total of  ninety
(90) consecutive days or for an aggregate of one hundred and eighty (180) days
or more in any consecutive period of three hundred and sixty five (365) days. 
The determination of whether (and, if appropriate, when) a Disability has
occurred shall be made by a licensed physician mutually agreed upon in good
faith by the Parties (provided that, Parties wherever referenced in this
Section, could include Employee’s personal representative), or in the event the
Parties fail to agree, the Board and Executive (or his personal representative)
shall each select a licensed physician, who shall mutually select a third
licensed physician to make such determination).
 
(d) Termination under Change of Control. In the event of a Change of Control, as
defined below, that results in the Employee’s termination without cause within
one hundred eighty (180) days of the Change of Control, then Company shall pay
Employee, in substantially equal installments, at Employee’s Base Pay (also
including Annual Bonus as dictated by the Management Incentive Plan), over a
period of twenty-four (24) months beginning no later than the first regular
Company payroll payment date which occurs within thirty (30) days following the
Employees Termination. Until the Company has finished the monthly payouts for
the Employee, the Employee, their dependents, beneficiaries, and estate shall be
entitled to all benefits under Company's group medical and dental insurance
plans as if the Employee were still employed by Company hereunder during such
period, with benefits or premium payments, as applicable, to be paid with the
same frequency and at the same time as applies for active employees of the
Company. On the Date of Separation, Employee’s rights under any compensation or
benefits programs shall become vested and any restrictions on stock options or
contractual rights granted to Employee shall be removed;
 
Employee shall not be required to mitigate the amount of any payment provided
for in this section by seeking other employment or otherwise. However, Should
Employee become employed by another organization, individual, or corporation
(“New Employer”) during the above-referenced twenty-four (24) month period
following separation, then Company will only pay the difference between
Employee’s Base Pay and that income received from Employee’s New Employer, as
indicated by the pay stubs voluntarily submitted to Company by Employee; so as
to guarantee that Employee will receive his Base Pay during this period. At no
time will Company be responsible for putting Employee in a position of
collecting more than his Base Pay during this tenure with New Employer. Company
reserves the right to audit the Employee’s annual tax returns or other documents
to ensure compliance with this clause; and Employee agrees to voluntarily
produce any reasonable documents requested by Company pursuant to this audit.
Should Employee’s New Employer pay equal to or greater than Employee’s Base Pay,
then Company shall not make any payments during Employee’s tenure with New
Employer.
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As used herein, the term "Change of Control" means the happening of any of the
following:
 
(i) Any person or entity, including a "group" as defined in Section 13(d)(3) of
the 1934 Act, other than the Company, a subsidiary of the Company, or any
employee benefit plan of the Company or its subsidiaries, becomes the beneficial
owner of the Company's securities having 35 percent or more of the combined
voting power of the then outstanding securities of the Company that may be cast
for the election for directors of the Company (other than as a result of an
issuance of securities initiated by the Company in the ordinary course of
business), or
 
(ii) As the result of, or in connection with, any cash tender or exchange offer,
merger or other business combination, sale of assets or contested election, or
any combination of the foregoing transactions, less than a majority of the
combined voting power of the then outstanding securities of the Company or any
successor corporation or entity entitled to vote generally in the election of
directors of the Company or such other corporation or entity after such
transaction, are held in the aggregate by holders of the Company's securities
entitled to vote generally in the election of directors of the Company
immediately prior to such transactions; or
 
(iii) During any period of two consecutive years, individuals who at the
beginning of any such period constitute the Board of Directors cease for any
reason to constitute at least a majority thereof, unless the election, or the
nomination for election by the Company's stockholders, of each director of the
Company first elected during such period was approved by a vote of at least
two-thirds of the directors of the Company then still in office who were
directors of the Company at the beginning of any such period.
 
(e) Effect of Termination.
 
(i) In the event of termination pursuant to this Section 4 howsoever occurring,
Employee shall be entitled to receive (A) their Base Pay for the period ending
on the effective date of such termination,  (B) any unreimbursed expenses
accrued but unpaid as of the effective Date of Termination, any Annual Bonus
unpaid for prior year(s) and earned for the termination year up to the effective
Date of Termination, and (C) payment of any employee benefit due but unpaid as
of the effective Date of Termination, including but not limited to all accrued,
but unused Paid Time Off under Section 3(d) (all of the foregoing, the “Final
Compensation”).
 
(ii) In the event of Employee’s Separation from Service in connection with any
termination by the Company without cause, in addition to the Final Compensation
(but not in addition to any other post-employment payments hereunder), Employee
shall be entitled to receive (A) an amount equal to twenty-four (24) months
(“Severance Pay”), in either case payable in accordance with the Company’s
prevailing payroll practices for a period of twenty-four (24) months from the
Date of Termination (“Severance Period”);  (B) reimbursement for twenty-four
(24)  months of COBRA premiums incurred by Employee during the Severance Period,
payable in equal monthly installments, with the first such installment due at
the same time Employee is paid their first payment of Severance Pay; and (C) on
the Date of Termination, Employee’s rights under any compensation or benefits
programs shall become vested and any restrictions on stock options or
contractual rights granted to Employee shall be removed;
 
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(iii) Any obligation of the Company to Employee hereunder, other than for Final
Compensation, is conditioned, however, on Employee signing and returning to the
Company a timely and effective release of claims in the form provided to
Employee by the Company in the form attached hereto as Exhibit A (the “Employee
Release”).  Employee must sign and return (and not revoke) the Employee Release,
if at all, by the deadline specified therein,.(such deadline being the
"Effective Date of the Employee Release").  The first payment in respect of
Employee’s Severance Pay will be made on the Company’s next regular payroll date
following the later of the effective date of the Employee Release or the date it
is received by the Company; but that first payment shall be retroactive to the
Date of Termination; provided that if Employee’s Separation from Service occurs
in one taxable year and the revocation period expires in the second taxable
year, the payments in respect of Employee’s Severance Pay shall commence in the
second taxable year.  Notwithstanding anything to the contrary contained in this
Agreement, however, in the event Employee is a “Specified Employee” at the time
of Employee’s Separation from Service, any and all amounts payable under this
Section 4 in connection with such Separation from Service that constitutes
deferred compensation subject to Section 409A of the Internal Revenue Code of
1986, as amended (“Section 409A”), as determined by the Company in its sole
discretion, and that would (but for this sentence) be payable within six (6)
months following such Separation from Service, shall instead be paid on the date
that follows the date of such Separation from Service by six (6) months.  For
purposes of this Section 4(d)(ii), “Separation from Service” shall be determined
in a manner consistent with subsection (a)(2)(A)(i) of Section 409A, and the
term “Specified Employee” shall mean an individual determined by the Company to
be a specified employee as defined in subsection (a)(2)(B)(i) of Section 409A.
 
(iv) In the event of termination by the Company due to Employee’s death or
disability pursuant to Section 4(c), in addition to the Final Compensation (but
not in addition to any other post-employment payments hereunder), Employee shall
be entitled to receive an amount equal to twenty-four (24) months of Base Pay
(at the rate then in effect), payable in accordance with the Company’s
prevailing payroll practices for a period of twenty-four (24) months from the
Date of Termination.
 
(f) Notwithstanding any other provision in this Agreement to the contrary, if
any compensation becomes payable to the Executive that is considered to be
contingent on a change in control under Code Section 280G (the "Contractual
Amount") and if, but for this subsection,  the Contractual Amount exceeds the
maximum amount which may be paid without any loss of tax deductibility for the
Company under Code Section 280G(a) and/or the imposition of an excise tax upon
Executive pursuant to Code Section 4999,  then the Company shall pay the
Executive either (x)  an amount which is One Dollar ($1.00) less than the
maximum  amount which may be paid without triggering such non-deductibility
and/or excise tax or (y) the Contractual Amount, whichever provides the greater
net amount (after deduction of  all federal, state and local taxes imposed upon
the Executive including but not limited to such excise tax) to the Executive.
 
(g) Survival.  Notwithstanding the termination of this Agreement by Employee or
the Company, the provisions of Sections 4, 5, 6, 7, 8, 9, 11 and 13 shall
survive such termination as if this Agreement remained in full force and effect,
and no such termination shall terminate the covenants and obligations in said
Sections hereof.
 
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(h) The termination date of this Agreement that is specified in the written
notice as required in Section 4.(a), 4.(b), and 4.(c) shall be the “Date of
Termination.”
 
5. Covenants of Employee.
 
(a) Confidential Information.  During the course of Employee’s employment with
the Company, Employee will learn of Confidential Information, as defined below,
and Employee may develop Confidential Information on behalf of the Company and
its Affiliates. Employee agrees that he will not use or disclose to any Person
(except as required by applicable law or for the good faith performance of
Employee’s duties and responsibilities for the Company) any Confidential
Information obtained by Employee incident to Employee’s employment with the
Company or any of its Affiliates. Employee agrees that this restriction will
continue to apply after Employee’s employment terminates, regardless of the
reason for such termination.
 
“Affiliates” means all persons and entities directly or indirectly controlling,
controlled by or under common control with the Company, where control may be by
management authority, equity interest or otherwise, including, but not limited
to, Fred’s Stores of Tennessee, Inc., National Pharmaceutical Network, Inc. dba
EIRIS Health Services, and Reeves-Sain Drug Store, Inc.
 
“Confidential Information” means all of the following materials and information
of the Company or any Affiliate (whether or not reduced to writing and whether
or not subject to copyright or patentable) that Employee has received or may
hereafter receive access to or that Employee has developed or may hereafter
develop in whole or in part as a direct or indirect result of Employee’s
employment by the Company or through the use of any of the Company’s or any
Affiliate’s facilities or resources:

(i) All materials or information relating to the manner in which the Company or
any Affiliate conducts its business including, but not limited to, all
agreements between the Company or any Affiliate and its vendors or customers;
all marketing techniques; all purchasing information; all price lists; all
pricing policies; all sales figures; all sales projections; payor contracts,
pricing, and contacts; pharma contracts, pricing and contacts within the
industry; all financial information; all promotions; all accounting procedures;
all employee records and personnel history; strategic plans for growth and
development; and tax records and all other materials or information relating to
the manner in which the Company or any Affiliate does business;
 
(ii) Personal Health Information, including but not limited to names, addresses,
disease states, treatment regimens, and refill schedules;
 
(iii) Key business referral sources, including but not limited to physicians and
their office staff;
 
(iv) Any other materials or information related to the business or activities of
the Company or any Affiliate which are not generally known to others engaged in
similar businesses or activities;
 
(v) All materials, information and ideas that are derived from or relate to
Employee’s access to or knowledge of any of the above-enumerated materials and
information; and
 
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(vi) Any information received by the Company or any of its Affiliates from any
Person with any understanding, express or implied, that it will not be
disclosed.
 
Confidential Information does not include information that enters the public
domain, other than through Employee’s breach of Employee’s obligations under
this Agreement.

“Person” means an individual, a corporation, a limited liability company, an
association, a partnership, an estate, a trust or any other entity or
organization, other than the Company or any of its Affiliates.

(b) Prohibited Activities.  Employee acknowledges that, during their employment
with the Company, Employee will have access to Confidential Information and
trade secrets which, if disclosed, would assist in competition against the
Company and its Affiliates, and that Employee will also generate goodwill for
the Company and its Affiliates. Therefore, in consideration of Employee’s
employment with the Company, Employee agrees that the following restrictions on
their activities during and after the termination of Employee’s employment are
necessary to protect the goodwill, Confidential Information and trade secrets of
the Company and its Affiliates.

(c) Confidentiality and Non-Disclosure.   Employee agrees not to use, reproduce,
disclose, or make available the Company’s Confidential Information for their own
benefit or the benefit of any person or entity other than the Company, except as
reasonably necessary for the performance of the Employee’s duties as an employee
of the Company, without prior written consent of the Company, unless and to the
extent that any Confidential Information (i) becomes generally known to and
available for use by the public other than as a result of the Employee’s
improper acts or omissions to act or (ii) is required to be disclosed pursuant
to any applicable law, regulatory action or court order; provided, however, that
the Employee must give the Company prompt written notice of any such legal
requirement, disclose no more information than is so required, and cooperate
fully with all efforts by the Company to obtain a protective order or similar
confidentiality treatment for such information. Upon the termination of the
Employee’s employment with the Company, Employee agrees to deliver to the
Company, upon request, all memoranda, notes, plans, records, reports and other
documents (including copies thereof and electronic media) relating to the
business of the Company (including, without limitation, all Confidential
Information) that Employee may then possess or have under Employee’s control,
other than such documents as are generally or publicly known (provided, that
such documents are not known as a result of Employee’s breach or actions in
violation of this Agreement); and at any time thereafter, if any such materials
are brought to Employee’s attention or Employee discovers them in Employee’s
possession, Employee must deliver such materials to the Company immediately upon
such notice or discovery.  Employee also agrees to indemnify and hold the
Company harmless for any loss, claim or damages, including attorney’s fees or
costs, arising out of or related to the unauthorized disclosure or use of the
Confidential Information by Employee.
 
(d) Non-Competition.  Employee agrees that during Employee’s employment with the
Company and for a period of one (1) year after termination of Employee’s
employment for whatever reason (“Restricted Period”), Employee will not,
directly or indirectly, whether as owner, partner, investor, consultant, agent,
employee, co-venturer or otherwise, engage in or assist with any activity in
those states within the United States in which the Company or any of its
subsidiaries conducts business  (the “Restricted Area”) or undertake any
planning for any business competitive with the Company or any of its Affiliates
anywhere in the Restricted Area. Specifically, but without limiting the
foregoing, Employee agrees not to work or provide services, in any capacity,
whether as an employee, independent contractor or otherwise, whether with or
without compensation, to any Competitor (as defined below), as conducted or in
planning during Employee’s employment with the Company anywhere in the
Restricted Area. The foregoing, however, will not prevent Employee’s passive
ownership of one percent (1%) or less of the equity securities of any publicly
traded company.
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“Competitor” shall include, without limitation, the following businesses:
Wal-Mart,  Family Dollar, Dollar General, Big Lots, Variety Wholesalers,  Dollar
Tree, Walgreen’s, CVS, and Rite Aid (and/or any other trade name or similar
business used by any of the foregoing businesses, their parents, affiliates,
subsidiaries, successors or assigns). The parties expressly recognize that the
term “Competitor” shall not be limited by this Agreement and that such term may
expand to include other businesses, industries and/or markets in which Company
may engage from time to time.
 
(e) Non-Solicitation.
 
(i) Employee agrees that during the Restricted Period, Employee will not,
directly or indirectly, either through any form of ownership, or as a director,
officer, principal, agent, employee, employer, advisor, consultant, partner,
independent contractor, or in any individual or representative capacity
whatsoever, solicit or encourage any customer of the Company or any of its
Affiliates, including but not limited to patients, physicians and their staff,
payors, and pharma, in the Restricted Area to terminate or diminish its
relationship with them.
 
(ii) Employee agrees that during the Restricted Period, Employee will not,
directly or through any other Person, hire or solicit for hiring any employee of
the Company or any of its Affiliates or seek to persuade any employee of the
Company or any of its Affiliates to discontinue his employment.
 
(iii) Employee agrees that during the Restricted Period, Employee will not,
directly or through any other Person, hire or solicit for hiring any independent
contractor or vendor of the Company or any of its Affiliates or seek to persuade
any independent contractor or vendor of the Company or any of its Affiliates to
discontinue his employment.
 
(f) Non-Disparagement.  While employed by Company and at any time after the Date
of Termination, Executive agrees not to make any untruthful or disparaging
statements, written or oral, about Company, its affiliates, their predecessors
or successors or any of their past and present officers, directors,
stockholders, partners, members, agents and employees or Company's business
practices, operations or personnel policies and practices to any of Company's
customers, clients, competitors, suppliers, investors, directors, consultants,
employees, former employees, or the press or other media in any country.
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(g) Intellectual Property Rights. Employee hereby covenants and agrees to
promptly and fully inform the Company of all improvements, inventions and other
intellectual property rights (collectively, “IP Rights”) relating to the
business or to trade secrets of the Company that Employee may make or create,
either individually or jointly with other persons, in connection with Employee’s
Work (as hereinafter defined).  Employee hereby further covenants and agrees
that all IP Rights made or created by Employee, either alone or with other
persons, in connection with Employee’s Work, and all rights with respect
thereto, are the property of the Company, without additional compensation to
Employee. Employee, when reasonably requested in writing by the Company, shall
execute all documents reasonably necessary to obtain and perfect rights in and
to IP Rights in the United States of America or any foreign country and shall
reasonably assist the Company in obtaining and enforcing any such rights, title
and interest whenever reasonably requested to do so in writing by the Company. 
The Company hereby covenants and agrees to bear any and all expenses that the
Company causes Employee to actually incur in obtaining, extending, reissuing,
maintaining and enforcing IP Rights and in vesting and perfecting title thereto
in the Company. For purposes of this Agreement, the term “Work” shall mean (i)
(A) any direct assignments by and required performance for the Company, and (B)
any other productive output of Employee that relates to the business of the
Company and is produced during Employee’s employment by the Company, but shall
specifically exclude (ii) Employee’s efforts after normal working hours, away
from the Company’s premises, on an unsupervised basis, alone or with others, so
long as such efforts do not involve Employee’s use of Confidential Information
and so long as such efforts are not related to and do not include the business
of the Company.
 
(h) Enforcement.
 
(i) Each of the parties hereto acknowledges that: (a) the covenants and the
restrictions contained in this Agreement are reasonable, necessary, fundamental
and required to protect the goodwill of the business of the Company and to
secure its confidential information and trade secrets; (b) the knowledge and
expertise of Employee in the Company’s business is of a special, unique, unusual
and extraordinary character, which gives such knowledge and expertise a
significant value; (c) a breach of this Agreement will result in immediate and
irreparable harm and damages which cannot be estimated or adequately compensated
by a monetary award; and (d) enforcement of this Agreement by way of an
injunction will not adversely affect the ability of Employee to make a living.
Accordingly, it is expressly agreed that the Company or its affiliates shall be
entitled to the immediate remedy of a temporary restraining order, preliminary
injunction, or other form of injunctive or equitable relief as may be necessary
or appropriate in order to restrain or enjoin Employee from breaching any
covenant or restriction contained in this Agreement and to specifically enforce
the provisions hereof. Employee agrees that the existence of any claim, demand,
action or cause of action of Employee against the Company or its affiliates,
whether predicated upon this Agreement or otherwise, shall not constitute a
defense to the imposition of any such restraining order, injunction or relief or
otherwise to the enforcement by the Company or its affiliates of the provisions
of this Agreement. The Company shall not be required to provide any bond or
other security in connection with any such restraining order, injunction or
other relief or in connection with any related activity or proceeding.
 
(ii) The rights and remedies of the Company or its affiliates specified in this
Agreement shall not be construed to be exclusive of or limited by or in
limitation of or a waiver of any other rights or remedies which the Company or
its affiliates may have, whether at law or in equity, by contract or otherwise,
all of which shall be cumulative. Without limiting the generality of the
foregoing, the Company’s rights and remedies hereunder, and the obligations and
liabilities of Employee hereunder, are in addition to their respective rights,
remedies, obligations and liabilities under the law of unfair competition. This
Agreement does not limit, and is not limited by, any employment,
non-competition, non-solicitation, non-inducement, confidentiality or other
agreement which Employee has entered into, or may enter into, with the Company
or its Affiliates.
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(iii) If any provision of this Agreement or any word, phrase, clause, sentence
or other portion thereof including, without limitation, the temporal and
geographic restrictions in Section 5 hereof (each of which is referred to herein
as a “provision”) is held to be illegal, invalid, unreasonable or unenforceable
for any reason, (a) such provision shall be fully severable; (b) this Agreement
shall be construed and enforced as if such illegal, invalid, unreasonable or
unenforceable provision had never comprised a part hereof; and (c) in lieu of
such illegal, invalid, unreasonable or unenforceable provision there shall be
substituted a provision as similar in terms to such illegal, invalid,
unreasonable or unenforceable provision as may be possible and be legal, valid,
reasonable and enforceable. Without limiting the foregoing, if any of the
temporal or geographic restrictions in Section 5 hereof are held to be illegal,
invalid, unreasonable or unenforceable by any court or other tribunal of
competent jurisdiction, the parties hereto agree to the reduction of such
restriction to such time period or geographic area as such court or tribunal
shall deem legal, valid, reasonable and enforceable. The remaining provisions
hereof shall remain in full force and effect and shall not be affected by any
illegal, invalid, unreasonable or unenforceable provision or by its severance or
modification.
 
(iv) Employee agrees to cooperate with the Company, during the term of
Employee’s employment hereunder and thereafter (including following Employee’s
termination of employment for any reason), by making themselves reasonably
available to testify on behalf of the Company in any action, suit, or
proceeding, and to assist the Company, or any affiliate, in any such action,
suit, or proceeding, by providing information and meeting and consulting with
the Company or its representatives or counsel, or representatives or counsel to
the Company, as reasonably requested. The Company agrees to reimburse Employee
for all reasonable expenses actually incurred in connection with his provision
of testimony or assistance.
 
(i) Disclosure of Agreement.  During the Restricted Period, Employee agrees to
provide a copy of Section 5 of this Agreement to any potential employer
following his employment with the Company.  Employee further agrees that the
Company may disclose Section 5 of this Agreement to any employer or potential
employer of Employee during the Restricted Period
 
6. Successors and Assigns.
 
(a) This Agreement and all rights under this Agreement are personal to Employee
and shall not be assignable nor delegable. All of Employee’s rights under the
Agreement shall inure to the benefit of his heirs, personal representatives,
designees or other legal representatives, as the case may be.
 
(b) This Agreement shall inure to the benefit of and be binding upon the Company
and its successors and assigns.
 
7. Governing Law. This Agreement (and any claims or controversies arising out of
or relating to this Agreement) shall be construed in accordance with and
governed by the laws of the State of Tennessee without regard to the conflicts
of laws principles that would result in the application of any law other than
the law of the State of Tennessee.
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8. Notices. All notices, requests and demands given to or made upon the
respective parties hereto shall be deemed to have been given or made three
business days after the date of mailing when mailed by registered or certified
mail, postage prepaid, or on the date of delivery if delivered by hand, or one
business day after the date of mailing by Federal Express or other reputable
overnight delivery service, addressed to the parties at their addresses first
set forth below:
 
(a)       to the Company
 
Fred’s, Inc.Attn: Chief Legal Officer
4300 Getwell Road
Memphis, TN 38118

with a copy to:

Fred’s, Inc.Attn: Chief Executive Officer
4300 Getwell Road
Memphis, TN 38118
 
or to such other addresses furnished by notice given in accordance with this
Section 8.
 
9. Complete Understanding. This Agreement supersedes any prior contracts,
understandings, discussions and agreements relating to employment between
Employee and the Company and constitutes the complete understanding between the
parties with respect to the subject matter hereof. No statement, representation,
warranty or covenant has been made by either party with respect to the subject
matter hereof except as expressly set forth herein.
 
10. Modification; Waiver.
 
(a) This Agreement may be amended or waived if, and only if, such amendment or
waiver is in writing and signed, in the case of an amendment, by the Company and
Employee or in the case of a waiver, by the party against whom the waiver is to
be effective. Any such waiver shall be effective only to the extent specifically
set forth in such writing.
 
(b) No failure or delay by any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege.
 
11. Headings and Word Meanings. Headings and titles in this Agreement are for
convenience of reference only and shall not control the construction or
interpretation of any provisions hereof. The words “herein,” “hereof,”
“hereunder” and words of similar import, when used anywhere in this Agreement,
refer to this Agreement as a whole and not merely to a subdivision in which such
words appear, unless the context otherwise requires. The singular shall include
the plural unless the context otherwise requires.
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12. Counterparts. This Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument. This Agreement shall become
effective when each party hereto shall have received counterparts hereof signed
by the other party hereto. The exchange of copies of this Agreement and of
signature pages by facsimile or email transmission shall constitute effective
execution and delivery of this Agreement as to the parties and may be used in
lieu of the original Agreement for all purposes. Signatures of the parties
transmitted by facsimile or email shall be deemed to be their original
signatures for all purposes.
 
13. No Strict Construction. The parties hereto have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties hereto, and no presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of the authorship
of any of the provisions of this Agreement.

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by one
of its duly authorized officers, and Employee has manually signed his name
hereto, all as of the day and year first above written.

 
FRED’S, INC.
     
By:
/s/ Michael K. Bloom
 
Name:
Michael K. Bloom
 
Title:
Chief Executive Officer

 

  EMPLOYEE  
 
/s/ Jason Jenne
 
Jason Jenne

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EXHIBIT A
GENERAL RELEASE
 
1. This Release is made and entered into by Jason Jenne (the "Employee") and
Fred’s, Inc. (the "Company").
 
2. In consideration of the payments, benefit continuation and acceleration
provided for in Section 4 and Section 6(b)(ii)-(vi) of this Management
Compensation Agreement, Employee, on behalf of himself and for any person or
entity who may claim by or through him, irrevocably and unconditionally
releases, waives, and forever discharges Company, its past, present, and future
subsidiaries, divisions, affiliates, successors, and their respective officers,
directors, attorneys, agents, and present and past employees from any and all
claims or causes of action that Employee had, has, or may have relating to
Employee’s employment with Company and/or termination therefrom up to and
including the date of this Agreement, including but not limited to any claims
under Title VII of the Civil Rights Act of 1964, as amended, the Tennessee Human
Rights Act, the Age Discrimination in Employment Act ("ADEA"), and claims under
any other federal, state, or local statute, regulation, or ordinance, including
wrongful or retaliatory discharge.
 
3. This Release shall not be construed as an admission by Company of any
liability, wrongdoing, or violation of any law, statute, regulation, agreement
or policy, and Company denies any such liability or wrongdoing.
 
4. Employee acknowledges and agrees that this Release includes a release and
waiver as to claims under the ADEA.  Employee acknowledges and confirms that he
understands and agrees to the terms and conditions of this Release; that these
terms are written in layperson terms, and that he has been fully advised of his
rights to seek the advice and assistance of consultants, including an attorney,
to review this Release.  Employee further acknowledges that he does not waive
any rights or claims under the ADEA that arise after the date this Release is
signed by him, and specifically, Employee understands that he is receiving money
and benefits beyond anything of value to which he is already entitled from
Company.  Employee acknowledges that he has had up to 21 days to consider
whether to accept and sign this Release, and has had adequate time and
opportunity to review the Release and consult with any legal counsel or other
advisors of his choosing.  Employee understands that if he signs this Release
before the expiration of the 21-day period, his signature will evidence his
voluntary election to forego waiting the full 21 days to sign this Release.  If
Employee chooses not to accept, or the 21-day period expires without his
acceptance, then the offer in this Release is null and void.  Employee further
acknowledges that in compliance with the Older Workers' Benefit Protection Act
of 1990, he has been fully advised by Company of his right to revoke and nullify
this Release, and that this revocation must be exercised, if at all, within
seven days of the date he signs this Release.  Employee may revoke his
acceptance at any time within the seven days following his signing of this
Release by notifying Company of his decision to revoke the acceptance by writing
directed and delivered to Fred’s Inc., 4300 New Getwell Road, Memphis, TN 38118,
Attention Secretary.
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Acceptance of this offer is strictly voluntary.  This Release shall become
effective and enforceable only after the seven-day revocation period has
expired.  Should Employee decline to accept the benefits of this Release, or if
is revoked by him, Employee will not receive the proposed additional
compensation and benefits.
 
By his signature below, Employee accepts the terms of this Release.

FRED’S, INC.
 
EMPLOYEE
         
By:
                     
Name:
   
Name:
               
Title:
   
Address:
                                       
Date:
   
Date:
   

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