AMENDMENT TO
                              EMPLOYMENT AGREEMENT

     The  EMPLOYMENT  AGREEMENT (the  "Agreement"),  entered into as of July 24,
2000, by and between Prime Retail, Inc., a Maryland corporation  ("Prime"),  and
the sole general partner of Prime Retail,  L.P., a Delaware limited  partnership
(the  "Operating  Partnership"),  and Glenn D.  Reschke  (the  "Executive"),  is
amended  by this  Amendment,  effective  June 6, 2002  (unless  otherwise  noted
herein) in the following respects:

     1.  Section  1 of the  Agreement  is hereby  deleted  in its  entirety  and
replaced with the following:

                  1. Duties.  During  the  Term  hereof (as defined in Section 2
                  hereof), the Company agrees to retain Executive, and Executive
                  agrees to  be retained  by the Company, as the Chief Executive
                  Officer and,  at  the determination of the Board of Directors,
                  Chairman of the Board, on the terms and conditions provided in
                  this Agreement.  Executive  shall  serve in such positions and
                  report to the Board  of Directors  and his duties will include
                  oversight   and   responsibility   for  the  Company's  sales,
                  marketing,  operations,  finance and administrative functions.
                  Furthermore,  Executive  shall  exercise such other powers and
                  authority as are  customarily inherent in similar positions in
                  a comparable  publicly-held  entity  or  as  provided  by  the
                  By-laws  of  Prime  ("By-laws")  and  the Agreement of Limited
                  Partnership  of  the  Operating  Partnership,  as amended (the
                  "Partnership Agreement").  Prime,  in  its  capacity  as  sole
                  general partner of  the  Operating Partnership, may, from time
                  to time,  in  its  sole discretion,  by action of its Board of
                  Directors (the "Board") further define and clarify Executive's
                  duties  and   services  hereunder  or  under  the  By-laws  or
                  Partnership  Agreement in a manner consistent with the offices
                  for which he has been retained hereunder and the scope of work
                  set forth herein.  Executive agrees to devote his best efforts
                  and substantially all of his business time, attention, energy,
                  and  skill to  performing his duties to the Company under this
                  Agreement.

     2.  Section  2 of the  Agreement  is hereby  deleted  in its  entirety  and
replaced with the following:

                  2. Term.  Unless  earlier  terminated  in  accordance with the
                  terms of this Agreement, the term of this Agreement shall be a
                  period  commencing  on  June 6, 2002  and  ending on the third
                  anniversary of such date.  On such third  anniversary and each
                  succeeding  anniversary,  the  Term  of  this  Agreement shall
                  automatically  be  extended for an  additional one year period
                  unless, not later than one hundred  eighty (180) days prior to
                  any such anniversary,  either  party  to  this Agreement gives
                  notice to the other that the Term of this  Agreement shall not
                  be extended or further  extended beyond its then automatically
                  extended Term.

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     3. The last  sentence of Section  3(b)(1),  "Performance  Bonus," is hereby
deleted in its entirety and replaced with the following:

                  Any  amount  of  Performance  Bonus  required  to  be  paid to
                  Executive  for  a  calendar  year  during  the  Term  of  this
                  Agreement  shall  be  paid  by the Company to Executive on the
                  earlier  of (x)  the next  pay period of the Company following
                  finalization of the audit  for  such  calendar  year and final
                  review and approval of the bonus calculation  by the Committee
                  or (y)  March 31 (or  the  next  business  day)  of  the  year
                  immediately  following the  end of the calendar year for which
                  such Performance Bonus is attributable.

     4. A new Section 3(g), "Stock Options," is hereby added to the Agreement as
follows:

                  (g) Stock Options. As additional consideration for Executive's
                  employment  hereunder,   as  of  June 6, 2002  (the  "Date  of
                  Grant"),  Prime  granted Executive an option (the "Option") to
                  purchase  500,000  shares  of  Prime's common stock, par value
                  $0.01 per share  (the "Common Stock").  The purchase price per
                  share is $0.11  (the "Exercise Price").  The Option is subject
                  to  the  terms  and  conditions  contained  in the Stock Award
                  Agreement  entered  into  between  Prime  and Executive, which
                  terms include: (i) the  Option  will have  a term of ten years
                  measured from the date  of grant; (ii) the greatest portion of
                  the Option shares allowable will be  issued as incentive stock
                  options (as determined on a  prorated basis for all recipients
                  of option  awards  on June 6, 2002);  (iii)  the Option shares
                  will  vest  and become  exercisable as follows:  1/3 will vest
                  upon the first anniversary of the Date of Grant, 1/3 will vest
                  upon the second anniversary of the Date of Grant, and 1/3 will
                  vest  upon  the  third  anniversary  of the Date of Grant. The
                  vesting on each of the above anniversary dates shall  occur if
                  Executive  is  employed  with  Prime on the date on which that
                  portion vests. (iv) the Option will  remain exercisable for 30
                  days following termination  of Executive for Cause, and in the
                  event of  Executive's  termination of employment for any other
                  reason,  including  without  Good  Reason  as  that  term  has
                  hereinafter  been  defined, the Option will remain exercisable
                  for 90 days;  and  (v) upon  Executive's  resignation for Good
                  Reason or termination  without  Cause  (each as herein defined
                  and  without  regard  to  whether  a  Change  of  Control  has
                  occurred)  during  the  Term  of  this  Agreement,  the entire
                  Option, in addition to  all other outstanding options  awarded
                  by   Prime   to   Executive,  will  become  fully  vested  and
                  exercisable,  to the  extent  not previously exercised.  Prime
                  will take all steps necessary  to ensure that all options held
                  by Executive survive any Change of Control.

     5. The following subpart (F) is hereby added to Sections 4(a)(1),  4(a)(2),
and 4(a)(4):

                  (F) the right to exercise stock options and purchase shares as
                  set forth in Section 3(g) herein.

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     6. The following subpart (G) is hereby added to Section 4(b)(1):

                  (G) the right to exercise stock options and purchase shares as
                  set forth in Section 3(g) herein.

     7. The following subpart (F) is hereby added to Section 4(b)(2):

                  (F) the right to exercise stock options and purchase shares as
                  set forth in Section 3(g) herein.

     8.  Paragraph  (G) of  Section  4(e),  "Termination  Following  a Change of
Control," is hereby deleted in its entirety and replaced with the following:

                  (G) The right to exercise stock options and purchase shares in
                  accordance with Section 3(g) herein.

     9. The following  paragraphs are hereby added as Subsection I to Subsection
4(e):

                  I.      Notwithstanding the foregoing, if Executive terminates
                  this Agreement for  any  reason  or  without  Good  Reason (i)
                  simultaneously with a Change of Control (in which event notice
                  under  Section 4(b) (2) hereof  will not  be necessary and the
                  termination payments to be made under paragraphs (A),  (B) and
                  (C) below shall be paid simultaneously with, and as a part of,
                  the Change of Control) or (ii) within six (6) months following
                  a Change of Control,  subject  to  the  notice  provisions  of
                  Section 4(b)(2) hereof,  the Company shall pay Executive  (and
                  Executive's  eligible dependents with respect to paragraph (D)
                  below) the following benefits and payments:

                           (A) all  accrued  but  unpaid amounts of Base Salary,
                  bonus and vacation through the effective  date of termination,
                  payable  in  accordance with  the provisions of Sections 3(a),
                  3(b) and 3(d), above,  which amounts will be paid on or before
                  the earlier of (i) the date required by applicable law or (ii)
                  the 30th day following the effective date of termination;

                           (B) a termination  payment  in an amount equal to two
                  times the sum of (x) Executive's then current  Base Salary and
                  (y) a bonus payment  equal to 100% of the average annual bonus
                  paid to Executive for the  two most  recent calendar  years in
                  which he received a bonus, or if no such  bonus payments  were
                  paid  to  Executive,  a  bonus  payment equal to fifty percent
                  (50%) of his then current Base Salary;

                           (C)  any  vested  benefits  or  amounts  pursuant  to
                  Section 3(c), 3(e), 3(f) and 3(g) hereof through the effective
                  date of termination, payable in accordance with the provisions
                  of any such plan(s); and

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                           (D)  the  health  insurance   benefits  described  in
                  Section 3(c) (1) above for  the maximum period permitted under
                  COBRA at the Company's sole  expense, together with either (i)
                  additional benefits equivalent to those in  effect at the date
                  of termination, such that Executive will  receive Company-paid
                  coverage for a total  of 24 months, or (ii)  if providing such
                  benefits  is  not  permitted  by  the  tax  laws or applicable
                  benefit plans, the  after-tax equivalent  of the premiums paid
                  by the Company for such coverage.

                           The termination benefits pursuant to subsections (a),
                  (b), (c) and (e) of this Section 4 are mutually exclusive, and
                  Executive shall not  be entitled to seek  termination benefits
                  under more than one  such  subsection (other than as described
                  in the last paragraph  of Section 4(a)(1)). Provided, however,
                  that  nothing in this Subsection  I shall reduce or extinguish
                  Executive's  rights to payments  as  set forth  in  Paragraphs
                  4(e) (A),  (B),  (C), (D), (E), (F) and (G) in the  event of a
                  termination  as  set  forth  in  the  first  paragraph of this
                  Section 4(e).

     10. This Amendment may be executed in one or more counterparts  which taken
together shall constitute one and the same instrument.

EXECUTIVE:

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         Glenn D. Reschke

PRIME  RETAIL,  INC.,  a Maryland  corporation  PRIME  RETAIL,  L.P., a Delaware
limited partnership

By:___________________________              By:      Prime Retail, Inc.
Name:_________________________              Its:     Sole General Partner
Title:________________________              By:____________________________
                                            Name:__________________________
                                            Title:_________________________