MICHAEL K. SPEAR
AGREEMENT, dated as of March 6, 1995 by and between FRED'S, INC., a Tennessee corporation, with
offices at 4300 New Getwell Road, Memphis, Tennessee 38118 ("Company") and MICHAEL K. SPEAR,
currently residing at 3293 Piedmont Cove, Memphis, Tennessee 38115, ("Executive").
In consideration of the mutual covenants and conditions herein set forth, the parties hereto and each of them
agree as follows:
1. Company hereby agrees to employ Executive to serve as its "Executive Vice President and Director of
Merchandising, Advertising and Purchasing", for a term of three (3) years from and after the date hereof (the
"Initial Term"). At the end of the Initial Term and at the end of each successive Additional Term (defined below),
the term of this Agreement shall be automatically extended for an additional one year term ("Additional Terms"),
unless either party shall have given to the other written notice of termination at least six (6) months prior to the
end of the then current term (which termination shall become effective at the end of the then current term).
2. Executive agrees to serve as Company's "Executive Vice President and Director of Merchandising,
Advertising and Purchasing" during the term of this Agreement. As such, he shall have and agrees to assume
primary responsibility (subject at all times to the control of the Chief Executive Officer of the Company) for
matters assigned to him by the Chief Executive Officer. In the performance of such duties, Executive agrees to
make available to Company all of his professional and managerial knowledge and skill and such portion of his
time as may be required for the proper fulfillment of his duties. In addition, during the term of this Agreement,
Executive shall continue to serve in the aforesaid capacity and in such other offices and capacities to which he
may be appointed or elected by the Board of Directors of Company.
3. As compensation for all of the services to be performed hereun