THIS EMPLOYMENT AGREEMENT is effective as of the 1st day of May, 1998, by and between Trans
World Entertainment Corporation, a New York corporation (the Company), and Robert J. Higgins (Higgins).
WHEREAS, Higgins has served as the President and Chief Executive Officer of the Company and as the
Chairman of its Board of Directors since 1973; and
WHEREAS, Higgins and the Company executed an employment agreement effective as of February 1, 1996,
which will end on January 30, 1999 (the 1996 Employment Agreement); and
WHEREAS, the Company recognizes that Higgins' contribution to the growth and success of the Company has
continued to be substantial throughout the term of the 1996 Employment Agreement and that without his
continued leadership and vision the Company would not have achieved and maintained its current status in the
WHEREAS, the Company desires to renegotiate and extend the terms of the 1996 Employment Agreement to
assure the Company of Higgins' continued services in a leadership capacity and to compensate him therefor; and
WHEREAS, Higgins is willing to commit to continue serving the Company on the terms and conditions provided
in this Agreement.
NOW THEREFORE, in consideration of the premises and the mutual covenants and agreements contained
herein and intending to be legally bound hereby, the parties agree as follows:
SECTION 1. CAPACITY AND DUTIES
1.1 Employment. The Company hereby employs Higgins and Higgins hereby accepts employment by the
Company upon the terms and conditions hereinafter set forth for a term commencing on the date hereof and
expiring on April 30, 2003 (unless Higgins' service is sooner terminated as set forth below) (the Contract Period).
1.2 Capacity and Duties.
1.2.1 Higgins shall be employed by the Company generally as its President and Chief Executive Officer and shall
have the executive authority, consistent with these positions, as may from time to time be specified by the Board