<SUBMISSION>
<ACCESSION-NUMBER>0000950128-01-000186
<TYPE>10-Q
<PUBLIC-DOCUMENT-COUNT>6
<PERIOD>20001223
<FILING-DATE>20010206
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>NATIONAL RECORD MART INC /DE/
<CIK>0000904535
<ASSIGNED-SIC>5735
<IRS-NUMBER>112782687
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>0328
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>10-Q
<ACT>34
<FILE-NUMBER>000-22074
<FILM-NUMBER>1526472
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>507 FOREST AVE
<CITY>CARNEGIE
<STATE>PA
<ZIP>15106-2873
<PHONE>4122766200
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>507 FOREST AVE
<CITY>CARNEGIE
<STATE>PA
<ZIP>15106
</MAIL-ADDRESS>
</FILER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>j8626301e10-q.txt
<DESCRIPTION>NATIONAL RECORD MART, INC.
<TEXT>

<PAGE>   1

                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                 --------------

                                    FORM 10-Q

(Mark One)
[ X ]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
         SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD
         ENDED DECEMBER 23, 2000

                                       or

[   ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
         SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD
         FROM_______ TO _______

                        COMMISSION FILE NUMBER: 0 - 22074

                           NATIONAL RECORD MART, INC.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

             DELAWARE                                     11-2782687
  ------------------------------               ---------------------------------
     (State or jurisdiction of                 (IRS Employer Identification No.)
  incorporation or organization)

                                507 FOREST AVENUE
                        CARNEGIE, PENNSYLVANIA 15106-2873
          ------------------------------------------------------------
          (Address of principal executive offices, including zip code)

                                 (412) 276-6200
              ----------------------------------------------------
              (Registrant's telephone number, including area code)

Indicate by a check mark whether the Registrant (1) has filed all reports
required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes   X      No
    ------      -----

Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.

                          COMMON STOCK, $.01 PAR VALUE,
               5,051,667 SHARES OUTSTANDING AS OF FEBRUARY 6, 2001

                            EXHIBIT INDEX ON PAGE 10.
                       THIS DOCUMENT CONSISTS OF 11 PAGES.


<PAGE>   2

                           NATIONAL RECORD MART, INC.
                                      INDEX

<TABLE>
<CAPTION>
                                                                                                 Page No.
                                                                                                 --------
<S>        <C>                                                                                  <C>
PART I.  FINANCIAL INFORMATION

Item 1.     Consolidated Financial Statements

                 Balance Sheets: December 23, 2000 (unaudited) and March 25, 2000                      3

                 Statements of Operations: Thirteen and Thirty-nine Weeks Ended
                 December 23, 2000 (unaudited) and December 25, 1999 (unaudited)                       4

                 Statements of Cash Flows: Thirty-nine Weeks Ended December 23, 2000
                 (unaudited) and December 25, 1999 (unaudited)                                         5

                 Notes to Consolidated Financial Statements (unaudited)                              6-7

                 Notes to Consolidated Financial Statements (unaudited)                              6-7

Item 2.     Management's Discussion and Analysis of Financial Condition and
            Results of Operations                                                                    8-9

PART II. OTHER INFORMATION

Item 4.     Submission of Matters to a Vote of Security Holders                                        9

Item 6.     Exhibits and Reports on Form 8-K                                                          10

             Signature                                                                                10

             Exhibit 11 Calculation, etc.                                                             11
</TABLE>



                           NATIONAL RECORD MART, INC.

                                       2
<PAGE>   3



                           NATIONAL RECORD MART, INC.
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                        December 23,          March 25,
                                                                            2000                 2000
                                                                        ------------         ------------
                                                                         (unaudited)
<S>                                                                     <C>                  <C>
Assets
   Current assets:
     Cash and cash equivalents                                          $  6,303,067         $  1,935,092
     Merchandise inventory                                                46,872,381           51,040,684

     Due from stockholder                                                    354,279              380,154
     Other current assets                                                  1,779,178            2,239,753
                                                                        ------------         ------------
     Total current assets                                                 55,308,905           55,595,683
   Property and equipment, at cost                                        42,640,274           44,332,172
   Accumulated depreciation and amortization                             (21,886,998)         (21,006,162)
                                                                        ------------         ------------
   Property and equipment, net                                            20,753,276           23,326,010
   Other assets:
     Intangibles, net                                                      1,967,573            2,296,205
     Other                                                                   572,887              633,514
                                                                        ------------         ------------
     Total other assets                                                    2,540,460            2,929,719
                                                                        ------------         ------------
           Total assets                                                 $ 78,602,641         $ 81,851,412
                                                                        ============         ============

Liabilities and stockholders' equity Current liabilities:
     Accounts payable                                                   $ 28,875,407         $ 25,046,213
     Deferred income                                                       2,561,990            1,012,159
     Other liabilities and accrued expenses                                4,400,190            5,046,649
     Current maturities of long-term debt                                     83,622              161,770
     Current maturity of note payable- subordinated                       14,830,318                   --
                                                                        ------------         ------------

   Total current liabilities                                              50,751,527           31,266,791
   Long-term debt:
     Notes Payable                                                           134,043                   --
     Notes payable - subordinated                                                 --           14,558,285
     Revolving credit facility                                            28,404,665           28,219,850
                                                                        ------------         ------------
     Total long-term debt                                                 28,538,708           42,778,135
   Stockholders' equity:
     Preferred stock, $.01 par value,
           2,000,000 shares authorized, none issued                               --                   --
     Common stock, $.01 par value, 9,000,000 shares
           authorized, 5,498,484 issued at December 23, 2000 and
           March 25, 2000 and 5,051,667 outstanding at
           December 23, 2000, and March 25, 2000                              54,985               54,985
     Additional paid-in capital                                           15,902,474           15,902,474
     Retained earnings                                                   (14,975,828)          (6,481,748)
                                                                        ------------         ------------
                                                                             981,631            9,475,711
     Less treasury stock, 446,817 shares at
           December 23, 2000 and March 25, 2000                           (1,669,225)          (1,669,225)
                                                                        ------------         ------------
     Total stockholders' equity                                             (687,594)           7,806,486
                                                                        ------------         ------------
           Total liabilities and stockholders' equity                   $ 78,602,641         $ 81,851,412
                                                                        ============         ============
</TABLE>

           See accompanying notes to consolidated financial statements



                                       3
<PAGE>   4





                           NATIONAL RECORD MART, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (unaudited)

<TABLE>
<CAPTION>
                                                        Thirteen            Thirteen           Thirty-nine         Thirty-nine
                                                       Weeks Ended         Weeks Ended         Weeks Ended         Weeks Ended
                                                       December 23,        December 25,        December 23,        December 29,
                                                          2000                 1999               2000                 1999
                                                       -----------         -----------         -----------         ------------
<S>                                                   <C>                 <C>                 <C>                 <C>
   Net sales                                           $39,788,576         $48,756,029         $97,313,811         $109,738,339
   Cost of sales                                        24,465,401          29,827,915          61,387,056           67,057,493
                                                       -----------         -----------         -----------         ------------
     Gross profit                                       15,323,175          18,928,114          35,926,755           42,680,846

   Selling, general and administrative expenses         12,041,358          12,315,826          36,591,854           37,091,437
   Depreciation and amortization                         1,220,618           1,200,940           3,721,162            3,334,248
   Interest expense                                      1,394,887           1,241,048           4,006,567            3,278,091
   Interest income                                          (8,857)             (9,795)            (27,819)             (27,604)
   Other expenses                                           72,598              34,904             129,071               84,830
                                                       -----------         -----------         -----------         ------------
     Total expenses                                     14,720,604          14,782,923          44,420,835           43,761,002
                                                       -----------         -----------         -----------         ------------

   Income (loss) before income taxes                       602,571           4,145,191          (8,494,080)          (1,080,156)
Income tax expense (benefit)                                    --           1,491,560                  --             (386,410)
                                                       -----------         -----------         -----------         ------------
     Net income (loss)                                     602,571           2,653,631          (8,494,080)            (693,746)
                                                       ===========         ===========         ===========         ============
     Basic net income (loss) per share                 $      0.12         $      0.53         $     (1.68)        $      (0.14)
                                                       ===========         ===========         ===========         ============
     Diluted net income (loss) per share               $      0.11         $      0.50         $     (1.68)        $      (0.14)
                                                       ===========         ===========         ===========         ============

   Basic weighted average common shares
     Outstanding                                         5,051,667           5,048,167           5,051,667            5,048,372
                                                       ===========         ===========         ===========         ============

   Weighted average number of common shares
     and common equivalent shares
     outstanding                                         5,245,359           5,336,654           5,051,667            5,048,372
                                                       ===========         ===========         ===========         ============
</TABLE>



           See accompanying notes to consolidated financial statements


                                       4
<PAGE>   5



                           NATIONAL RECORD MART, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                      Thirty-nine           Thirty-nine
                                                                      Weeks Ended           Weeks Ended
                                                                      December 23,          December 25,
                                                                          2000                   1999
                                                                      -------------         -------------
<S>                                                                  <C>                   <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) income                                                     $  (8,494,080)        $    (693,746)
Adjustments to reconcile net income to net cash
   Provided by operating activities:
     Depreciation and amortization                                        3,721,162             3,334,248
     Accretion of notes payable for value assigned to warrants              413,028               334,098
     Other                                                                   70,147              (263,009)
     Changes in operating assets and liabilities:
       Merchandise inventory                                              4,168,303           (10,522,215)
       Other assets                                                         608,194            (1,143,377)
       Accounts payable                                                   3,829,197            18,821,877
       Other liabilities and accrued expenses                               903,369             1,662,640
                                                                      -------------         -------------
           Net cash provided by operating activities                      5,219,320            11,530,516

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment                                         (976,935)           (8,585,577)
Other long term assets                                                           --                    --
Amounts repaid by (loaned to) stockholders                                   25,875                78,933
                                                                      -------------         -------------
           Net cash used in investing activities                           (951,060)           (8,506,644)

CASH FLOWS FROM FINANCING ACTIVITIES
Payments on debt                                                       (104,502,966)         (120,538,252)
Borrowings on revolving line of credit                                  104,602,681           122,322,504
Borrowings on note                                                               --               250,000
Exercise of options                                                              --                 1,500
Purchases of treasury stock                                                      --                (8,360)
                                                                      -------------         -------------
           Net cash provided by financing activities                         99,715             2,027,392
                                                                      -------------         -------------

Net increase in cash and cash equivalents                                 4,367,975             5,051,264
Cash and cash equivalents, beginning of period                            1,935,092               853,222
                                                                      -------------         -------------
Cash and cash equivalents, end of period                              $   6,303,067         $   5,904,486
                                                                      =============         =============
</TABLE>



           See accompanying notes to consolidated financial statements


                                       5
<PAGE>   6



                           NATIONAL RECORD MART, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1 - BASIS OF PRESENTATION

The accompanying interim consolidated financial statements of National Record
Mart, Inc. (the "Company") and subsidiary are unaudited. However, in the opinion
of management, they include all adjustments necessary for a fair presentation of
financial position, results of operations, and cash flows for the interim
periods. All adjustments made for the third quarter ended December 23, 2000 were
of a normal recurring nature. The results of operations for the third quarter
ended December 23, 2000 are not necessarily indicative of the results of
operations to be expected for the entire fiscal year ending March 31, 2001.
Additional information is contained in the Company's audited consolidated
financial statements for the year ended March 25, 2000, included in the
Company's Form 10K and should be read in conjunction with this quarterly report.

The Consolidated Financial Statements include the accounts of the Company and
its wholly owned subsidiary, National Record Mart Investments, Inc., a Delaware
holding company. All intercompany accounts and transactions have been eliminated
in consolidation.

NOTE  2 - SEASONALITY

The Company's business is seasonal in nature, with the highest sales and
earnings occurring in the third quarter of its fiscal year, which includes the
Christmas selling season.

NOTE 3 - INCOME TAXES

The Company provides for income taxes in interim periods on an estimated basis.
For the third quarter ended December 23, 2000 and December 25, 1999, the
effective income tax rate is 35% and 36%, respectively. Based on assessment of
all available evidence, including the fact that the Company is in a cumulative
loss position, management concluded that the deferred tax asset should be
reduced by a valuation allowance equal to the net deferred tax asset. A
valuation allowance of approximately $4.2 and $3.0 million was recorded in the
fourth quarter of fiscal 2000 and the first, second and third quarters of fiscal
2001, respectively.

NOTE 4 - REVOLVING CREDIT FACILITY

The Company has a revolving credit facility (the "Revolver") which expires on
June 10, 2003. The maximum borrowings under the Revolver are $35,000,000 and are
based upon eligible inventory levels as defined therein. During the months of
October through December 31 of each year, an overadvance in the amount of $1.5
million is available in addition to the borrowing base as calculated by levels
of inventory. The total borrowings under this facility shall not exceed the
limit of $35 million. The interest rate is the bank's borrowing rate (9.50% at
December 23, 2000) or Libor (6.66375% at December 23, 2000) plus 2.0%. The
Company is required to pay a monthly commitment fee of .25% per annum on the
unused portion of the Revolver and a monthly collateral monitoring fee of
$3,500. The Revolver also contains various financial and other covenants that
place restrictions or limitations on the Company and its subsidiary, the more
restrictive of which include: (i) maintenance of a number of financial
covenants, as defined, (ii) a restriction on dividends, and (iii) limitation on
capital expenditures. The Company received a waiver from its lender for the Cash
Flow covenant under the Revolver for the quarter ended December 23, 2000.
Borrowings are collateralized by substantially all assets of the Company,
including inventory, property and equipment.




                                       6
<PAGE>   7

                           NATIONAL RECORD MART, INC.
        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) CONTINUED


NOTE 5 - SUBORDINATED DEBT

On April 16, 1998, the Company secured a private placement of $15,000,000 in
senior subordinated notes. The notes carry an interest rate of 11.75% payable
semi-annually and expire April 16, 2001. In consideration of the placement the
Company issued 400,000 common stock warrants with an exercise price of $0.01.
The Company has allocated $1,600,000 of value for accounting purposes to the
warrants, which has been recorded as a reduction of the $15,000,000. This
reduction will be accreted as additional interest expense over the term of the
note. The Company received a waiver for the Cash Flow covenant relating to the
subordinated debt for the quarter ended December 23, 2000. An aggregate
principal amount of $7,500,000 of the senior subordinated notes is
collateralized, on a basis subordinated to the revolver, by substantially all
the assets of the Company, including inventory, property and equipment.

NOTE 6 - ACCOUNTING FOR STOCK-BASED COMPENSATION

The Company has elected to follow Accounting Principles Board Opinion No. 25
(APB 25), "Accounting for Stock Issued to Employees" and the related
interpretations in accounting for its employee stock options because the
alternative fair value accounting provided for under FASB Statement No. 123
(FASB 123), "Accounting for Stock-Based Compensation," requires the use of
option valuation models that were not developed for use in valuing employee
stock options. Under APB 25, because the exercise price of the Company's
employee stock options is greater than the market price of the underlying stock
on the date of the grant, no compensation expense is recognized.

                 ITEM 2- MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the unaudited
consolidated financial statements and notes thereto included elsewhere in this
report and with the Company's audited consolidated financial statements and
notes thereto for the fiscal year ended March 25, 2000 ("fiscal 2000") included
in the Company's Form 10K.

RESULTS OF OPERATIONS

         NET SALES: The Company's net sales decreased during the third quarter
ended December 23, 2000 of the Company's fiscal year ending March 31, 2001
("fiscal 2001") by $9.0 million or 18.4%, over the third quarter of fiscal 2000.
Net comparable store sales for the third quarter were down 16.1% or $7.5
million. The decrease in total sales is attributable to the 16.1% decrease in
comparable store sales. Sales for the thirty-nine weeks ended December 23, 2000
decreased $12.4 million or 11.3% compared to the thirty-nine weeks ended
December 25, 1999. Net comparable store sales for the thirty-nine weeks ended
December 23, 2000 decreased 11.1% or $11.6 million as compared to the same
period in the prior year. The comparative store sales decreases were primarily
due to an increase in competition of loss leader mass merchants in key market
areas.


                                       7
<PAGE>   8



                 ITEM 2- MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)


         GROSS PROFIT: Gross profit decreased $3.6 million or 19.0% from the
same quarter in the previous year. As a percentage of net sales, gross profit
decreased to 38.5% for the third quarter of fiscal 2001 from 38.8% in the third
quarter of fiscal 2000. Gross profit for the thirty-nine weeks ended December
23, 2000 was 36.9% as compared to 38.9% for the thirty-nine weeks ended December
25, 1999. The decrease in margin as a percentage of sales is related to the
continued shift of consumer preference from higher margin cassettes to lower
margin CD's and competitive shelf pricing.

         EXPENSES: Selling, general and administrative (SG&A) expenses,
decreased $274,000 or 2.2% to $12.0 million during the third quarter of fiscal
2001 from $12.3 million in the third quarter of fiscal 2000. Expressed as a
percentage of sales, SG&A expenses increased to 30.3% for the third quarter
ending December 23, 2000 compared to 25.3% for the quarter ending December 25,
1999. For the thirty-nine weeks ended December 23, 2000, SG&A expenses decreased
$500,000 or 1.3% as compared to the same period of the prior year. Expressed as
a percentage of sales, SG&A expenses increased to 37.6% for the thirty-nine
weeks ended December 23, 2000 compared to 33.8% for the thirty-nine weeks ended
December 25, 1999. The increase as a percentage of sales is primarily
attributable to the decrease in comparable store sales of 16.1% for the quarter
and 11.1% for the thirty-nine weeks. The decrease in SG&A expenses is
attributable to personnel and operating costs.

Net interest expense increased $155,000 to $1,386,000 in the third quarter of
fiscal 2001 from $1,231,000 in the third quarter of fiscal 2000. The increase is
due to an increase in borrowings.

         NET INCOME (LOSS): The Company had a net income of $603,000, or $0.12
per share, in the third quarter of fiscal 2001 compared to a net income of
$2,654,000 or $0.53 per share, in the same quarter of fiscal 2000. The net loss
for the thirty-nine weeks ended December 23, 2000 was ($8,494,000) or basic net
loss per share ($1.68) compared to ($694,000) or ($0.14) per share for the
thirty-nine weeks ended December 25, 1999. The increase in the net loss is
primarily attributable to the decrease in sales and gross margin and the effect
of recording a valuation allowance on the deferred tax asset in the first,
second and third quarters of fiscal 2001.

         INCOME TAXES: The Company's effective tax rate in the third quarter of
fiscal 2001 and 2000 was 35% and 36%, respectively. The Company recorded a
valuation allowance in the fourth quarter of fiscal 2000 and the first, second
and third quarter of fiscal 2001 of approximately $4.2 and $3.0 million,
respectively. See Note 3 of notes to Consolidated Financial Statements.


LIQUIDITY AND CAPITAL RESOURCES

         During the first nine months of fiscal 2001 and 2000 the Company had
net cash provided by operating activities of $5.2 million and $11.5 million,
respectively due to the cash loss from operations, more than offset by non-cash
charges to operations and changes in operating assets and liabilities.

         The Company made capital expenditures during the first nine months of
fiscal 2001 of $977,000 relating to store equipment, fixtures and leaseholds for
one new store, and two remodels and expansions.

         The Company has a five-year revolving credit facility (the "Revolver")
from an institutional lender, which expires June 10, 2003. Advances under the
Revolver bear interest at a floating rate equal to the lender's base rate (9.5%
at December 23, 2000) or Libor (6.66375% at December 23, 2000) plus 2.0%.



                                       8
<PAGE>   9



                 ITEM 2- MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

         On April 16, 1998 the Company completed a private placement of
$15,000,000 of senior subordinated notes to a group of institutional lenders.
The notes carry an interest rate of 11.75% payable semi-annually and are due on
April 16, 2001.

         Management believes that cash flows from operations and amounts
available under the credit facilities will be sufficient to meet the Company's
current liquidity and capital needs at least through fiscal 2001 which ends
March 31, 2001. The Company's ability to meet its liquidity and capital needs
after March 31, 2001 will depend primarily upon its ability to refinance the
$15,000,000 of senior subordinated notes due April 16, 2001. There can be no
assurance that such refinancing will be effected.

         Forward-Looking Statements. This quarterly report on Form 10-Q contains
certain forward-looking statements, as defined in the Private Securities
Litigation Reform Act of 1995, and information relating to the Company that are
based on the beliefs of the management of the Company as well as assumptions
made by and information currently available to the management of the Company.
Forward-looking statements can be identified by, among other things, the use of
forward-looking terminology such as "believes," "expects," "may," "will,"
"should," "seeks," "anticipates," "intends" or intentions. Accordingly, any
forward-looking statements included therein do not purport to be predictions of
future events or circumstances and may not be realized. Subsequent written and
oral forward-looking statements attributable to the Company or persons acting on
its behalf are expressly qualified in their entirety by the cautionary
statements in this paragraph.

                           PART II - OTHER INFORMATION


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         The Company held its annual meeting of stockholders on Thursday
         September 21, 2000 at 9:30 a.m. at the James H. Reed Building, 435
         Sixth Avenue, 9th Floor, Pittsburgh, Pennsylvania at which time the
         following matters were voted upon:


         1.    Six directors were voted on for appointment to the Board. All
               six were appointed by virtue of the vote as follows:

               William A. Teitelbaum             4,949,686 for  98,113 withheld
               Theresa Carlise                   4,953,225 for  94,574 withheld
               Samuel S. Zacharias               4,958,086 for  89,713 withheld
               Irwin B. Goldstein                4,957,786 for  90,013 withheld
               Damian Georgino                   4,958,486 for  89,313 withheld
               David Lang                        4,980,525 for  67,274 withheld

         2     The appointment of Ernst & Young to audit the Company's
               financial statement for the 2001 fiscal year was ratified by a
               vote of 5,000,860 for; 43,614 against and 3,325 abstaining.



                                       9
<PAGE>   10



ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

            (a)   Exhibits:

<TABLE>
<CAPTION>
                  Exhibit No.        Description                                             Page No.
                  -----------        -----------                                             --------
<S>                                 <C>                                                     <C>
                      10.13          Amendment to Employment Agreement dated as of
                                     January 1, 2001 by and between National Record Mart,
                                     Inc. and William A. Teitelbaum.

                      10.14          Amendment to Employment Agreement dated as of
                                     December 30, 2000 by and between National Record
                                     Mart, Inc. and Theresa Carlise.

                      10.15          Change in Control Agreement dated as of January 1,
                                     2001 by and between National Record Mart, Inc. and
                                     William A. Teitelbaum.

                      10.16          Change in Control Agreement dated as of January 1,
                                     2001 by and between National Record Mart, Inc. and
                                     Theresa Carlise.

                      11             Calculation of Net Income (Loss) Per Common
                                     Share - For the thirteen and thirty-nine
                                     weeks ended December 23, 2000 and
                                     December 25, 1999                                      11
</TABLE>

            (b)   Reports on Form 8-K:

                  There was one report on Form 8-K filed during the thirteen
                  weeks ended December 23, 2000. The date of report (date of
                  earliest event reported) was November 10, 2000. The report
                  disclosed, under Item 4 thereof, the resignation on November
                  10, 2000 of Ernst & Young LLP, the independent accountant
                  previously engaged as the principal accountant to audit the
                  financial statements of the registrant.

                                    SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereto duly authorized.

                             NATIONAL RECORD MART, INC.

                             By:  Theresa Carlise
                                 ---------------------------------------------
                                  Theresa Carlise
                                  Senior Vice President and Chief
                                  Financial Officer
                                  (Principal Financial and Accounting Officer)

                             Date:  February 6, 2001
                                   ------------------



                                       10
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.13
<SEQUENCE>2
<FILENAME>j8626301ex10-13.txt
<DESCRIPTION>AMENDMENT TO EMPLOYMENT AGREEMENT 1-1-01
<TEXT>

<PAGE>   1
                                                                   Exhibit 10.13

                        AMENDMENT TO EMPLOYMENT AGREEMENT

                  This Amendment to Employment Agreement (the "Amendment") is
made and entered into as of this 1st day of January 2001 by and between William
A. Teitelbaum, an individual (the "Executive"), and National Record Mart, Inc.,
a Delaware corporation (the "Company").

                                    RECITALS

                  A. The Company and Executive are parties to that certain
Employment Agreement made as of April 1, 1993 (the "Employment Agreement").

                  B. The Company and Executive desire to amend certain
provisions of the Employment Agreement, as set forth herein.

                  NOW THEREFORE, intended to be legally bound, the Company and
Executive agree as follows:

                  1. Amendment to Section 1(a). Section 1(a) of the Employment
Agreement is hereby amended to read as follows:

                  (a) The term of employment of Executive under this Agreement
         shall be the period commencing on April 1, 1993 and ending on March 31,
         2003. Said term shall be subject to extension by operation of the
         provisions of Section 1(b) hereof.

                  2. Amendment to Section 1(b). Section 1(b) of the Employment
Agreement is hereby amended to read as follows:

                  (b) On March 31, 2003, and on March 31 of each succeeding
         odd-numbered calendar year, the term of employment of the Executive
         under this Agreement shall be automatically extended to March 31 of the
         second calendar year thereafter, unless either party, acting under this
         Section 1(b), has elected to fix the expiration date of the Executive's
         term of employment hereunder. Each party shall have the right,
         exercisable by written notice to the other, to terminate the automatic
         renewal provided for herein and thereby to fix the expiration of
         Executive's term of employment; provided such notice shall have been
         given not more than sixty (60) days and not less than thirty (30) days
         prior to the expiration date in effect at such time. Such notice having
         been so given, the term of Executive's employment hereunder shall
         terminate on the expiration date in effect at such time.

                  3. New Section 1(d). Section 1 of the Employment Agreement is
hereby amended by adding thereto immediately following Section 1(c) a new
Section 1(d) to read as follows:

                  (d) Notwithstanding the provisions of Sections 1(a) and (b),
         the term of employment of the Executive under this Agreement shall be
         subject to early



<PAGE>   2

         termination by Executive in accordance with the Change in Control
         Agreement between the Company and Executive.

                  4. Miscellaneous. The parties agree that the execution of this
Amendment and the matters contemplated hereby were mutually agreed upon and do
not and did not trigger any termination rights or compensation provision in the
Employment Agreement. Except as amended hereby, the Employment Agreement is
hereby ratified and confirmed in all respects. This Amendment shall be governed
by and construed in accordance with laws of the Commonwealth of Pennsylvania.
Any dispute concerning this Amendment shall be subject to the arbitration
provisions set forth in Section 16 of the Employment Agreement.

                  IN WITNESS WHEREOF, the parties hereto executed this Amendment
or caused this Amendment to be duly executed as of the day and year first
written above.



WITNESS:                                     WILLIAM A. TEITELBAUM

Theresa Carlise                              William A. Teitelbaum
---------------------------                  -------------------------------



ATTEST:                                      NATIONAL RECORD MART, INC.


Glenn E. Spoharski                           By: Theresa Carlise
---------------------------                     ----------------------------
Assistant Secretary                          Name:  Theresa Carlise
                                             Title: Sr. VP, CFO & Secretary



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.14
<SEQUENCE>3
<FILENAME>j8626301ex10-14.txt
<DESCRIPTION>AMENDMENT TO EMPLOYMENT AGREEMENT 12-30-00
<TEXT>

<PAGE>   1


                                                                   Exhibit 10.14



                        AMENDMENT TO EMPLOYMENT AGREEMENT

                  This Amendment to Employment Agreement (the "Amendment") is
made and entered into as of this 30th day of December 2000 by and between
Theresa Carlise, an individual (the "Executive"), and National Record Mart,
Inc., a Delaware corporation (the "Company").

                                    RECITALS

                  A. The Company and Executive are parties to that certain
Employment Agreement made as of January 1, 1996 (the "Employment Agreement").

                  B. The Company and Executive desire to amend certain
provisions of the Employment Agreement, as set forth herein.

                  NOW THEREFORE, intended to be legally bound, the Company and
Executive agree as follows:

                  1. Amendment to Section 1(a). Section 1(a) of the Employment
Agreement is hereby amended to read as follows:

                  (a) The term of employment of Executive under this Agreement
         shall be the period commencing on January 1, 1996 and ending on
         December 31, 2002. Said term shall be subject to extension by operation
         of the provisions of Section 1(b) hereof.

                  2. Amendment to Section 1(b). Section 1(b) of the Employment
Agreement is hereby amended to read as follows:

                  (b) On December 31, 2002, and on December 31 of each
         succeeding even-numbered calendar year, the term of employment of the
         Executive under this Agreement shall be automatically extended to
         December 31 of the second calendar year thereafter, unless either
         party, acting under this Section 1(b), has elected to fix the
         expiration date of the Executive's term of employment hereunder. Each
         party shall have the right, exercisable by written notice to the other,
         to terminate the automatic renewal provided for herein and thereby to
         fix the expiration of Executive's term of employment; provided such
         notice shall have been given not more than sixty (60) days and not less
         than thirty (30) days prior to the expiration date in effect at such
         time. Such notice having been so given, the term of Executive's
         employment hereunder shall terminate on the expiration date in effect
         at such time.

                  3. New Section 1(d). Section 1 of the Employment Agreement is
hereby amended by adding thereto immediately following Section 1(c) a new
Section 1(d) to read as follows:

                  (d) Notwithstanding the provisions of Sections 1(a) and (b),
         the term of employment of the Executive under this Agreement shall be
         subject to early



<PAGE>   2

         termination by Executive in accordance with the Change in Control
         Agreement between the Company and Executive.

                  4. Miscellaneous. The parties agree that the execution of this
Amendment and the matters contemplated hereby were mutually agreed upon and do
not and did not trigger any termination rights or compensation provision in the
Employment Agreement. Except as amended hereby, the Employment Agreement is
hereby ratified and confirmed in all respects. This Amendment shall be governed
by and construed in accordance with laws of the Commonwealth of Pennsylvania.
Any dispute concerning this Amendment shall be subject to the arbitration
provisions set forth in Section 14 of the Employment Agreement.

                  IN WITNESS WHEREOF, the parties hereto have executed this
Amendment or caused this Amendment to be duly executed as of the day and year
first written above.



WITNESS:                                    THERESA CARLISE

Glenn E. Spoharski                          Theresa Carlise
------------------------------              ----------------------------------




ATTEST:                                     NATIONAL RECORD MART, INC.


Glenn E. Spoharski                          By: William Teitelbaum
------------------------------                 -------------------------------
Assistant Secretary                         Name:  William Teitelbaum
                                            Title: CEO, President & Chairman

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.15
<SEQUENCE>4
<FILENAME>j8626301ex10-15.txt
<DESCRIPTION>CHANGE IN CONTROL AGREEMENT DATED 1-1-01
<TEXT>

<PAGE>   1
                                                                   Exhibit 10.15


                           CHANGE IN CONTROL AGREEMENT

                  This Change in Control Agreement ("Agreement") is made and
entered into as of this 1st day of January 2001 by and between William A.
Teitelbaum, an individual (the "Executive"), and National Record Mart, Inc., a
Delaware Company (the "Company").

                                    RECITALS

                  A. The Company considers it essential to the best interests of
its shareholders to foster the continued employment of key management personnel.

                  B. The Company's Board of Directors recognizes that, as is the
case with many publicly held Companies, the possibility of a change in control
exists and that such possibility, and the uncertainty which it may engender
among management, may result in the departure or distraction of management
personnel to the detriment of the Company and its shareholders.

                  C. The Board of Directors has determined that appropriate
steps should be taken to reinforce and encourage the continued attention and
dedication of members of the Company's management, including the Executive, to
their assigned duties without distraction in the face of potentially disturbing
circumstances arising from the possibility of a change in control.

                  NOW, THEREFORE, in consideration of the premises and the
respective covenants herein contained, the Company and the Executive hereby
agree as follows:

                  1. Certain Definitions. The following terms when used in this
Agreement shall have the meaning hereafter set forth:

                  (a) "Beneficial Owner" shall have the meaning ascribed to such
term in Rule 13d-3 under the Securities Exchange Act of 1934, as amended from
time to time.

                  (b) "Change in Control" shall mean the determination (which
may be made effective as of a particular date specified by the Board of
Directors of the Company) by the Board of Directors of the Company, made by a
majority vote that a change in control has occurred, or is about to occur. Such
a change shall not include, however, a restructuring, reorganization, merger, or
other change in capitalization in which the Persons who own an interest in the
Company on the date hereof (the "Current Owners") (or any individual or entity
which receives from a Current Owner an interest in the Company through will or
the laws of descent and distribution) maintain more than an eighty percent (80%)
interest in the resultant entity. Regardless of the Board's vote or whether or
not the Board votes, a Change in Control will be deemed to have occurred as of
the first day any one (1) or more of the following subparagraphs shall have been
satisfied:

                      (i) Any Person (other than a Person in control of the
Company as of the date of this Agreement, or other than a trustee or other
fiduciary holding securities under an employee benefit plan of the Company, or a
Company owned directly or indirectly by the stockholders of the Company in
substantially the same proportions as their ownership of stock of


<PAGE>   2



the Company), becomes the Beneficial Owner, directly or indirectly, of
securities of the Company representing more than twenty percent (20%) of the
combined voting power of the Company's then outstanding securities;

                      (ii) The Company institutes any proceeding seeking an
order for relief under the Federal bankruptcy laws as now or hereafter in effect
or seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution,
winding up, liquidation, reorganization, arrangement, adjustment or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors or fails to file an answer or other pleading
denying the material allegations of any such proceeding filed against it; or

                      (iii) The stockholders of the Company approve:

                      (A) a plan of complete liquidation of the Company; or

                      (B) an agreement for the sale or disposition of all or
substantially all of the Company's assets; or

                      (C) a merger, consolidation, or reorganization of the
Company with or involving any other Company, other than a merger, consolidation,
or reorganization that would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least eighty percent (80%) of the combined voting power of
the voting securities of the Company (or such surviving entity) outstanding
immediately after such merger, consolidation, or reorganization.

However, in no event shall a Change in Control be deemed to have occurred, with
respect to the Executive, if the Executive is part of a purchasing group which
consummates the Change in Control transaction. The Executive shall be deemed
"part of a purchasing group" for purposes of the preceding sentence if the
Executive is an equity participant or has agreed to become an equity participant
in the purchasing company or group (except for (i) passive ownership of less
than five percent (5%) of the voting equity securities of the purchasing
company; or (ii) ownership of equity participation in the purchasing company or
group which is otherwise deemed not to be significant, as determined prior to
the Change in Control by a majority of the nonemployee continuing Directors of
the Board of Directors of the Company).

                  (c) "Person" shall have the meaning ascribed to such term in
Section 3(a)(9) of the Securities Exchange Act of 1934, as in effect on the date
hereof ("Exchange Act") and used in Sections 13(d) and 14(d) thereof, including
a "group" as defined in Section 13(d) thereof.

                  2. Term of Agreement. The Term of this Agreement shall
commence on the date hereof and end on December 31, 2001, unless further
extended as hereinafter provided. Commencing on January 1, 2002 and each January
1 thereafter, the Term shall automatically be extended for one additional year
unless, not later than September 30 of the preceding year, the Company or the
Executive shall have given notice not to extend the Term; provided, however,
that if a Change in Control shall have occurred during the Term, the Term shall
expire no earlier than six (6) months beyond the month in which such Change in
Control occurred.

                                      -2-
<PAGE>   3


                  3. Executive's Right to Terminate upon Change in Control.
Notwithstanding the term of employment set forth in the Employment Agreement,
dated as of April 1, 1993, between the Executive and the Company, as amended (as
the same may be further amended from time to time, the "Employment Agreement"),
the Executive shall have the right, exercisable by providing Notice of
Termination to the Company, to immediately terminate his employment in the event
of a Change in Control; provided such Notice of Termination shall have been
given not more than ninety (90) days after the date on which such Change in
Control is deemed to have occurred.

                  4. Severance Payment. In the event that Executive elects to
terminate his employment in accordance with Section 3 hereof, the Company shall
pay the Executive a lump sum severance payment, in cash, equal to the
Executive's annual base salary as in effect immediately prior to the Date of
Termination (the "Severance Payment"). The Severance Payment shall be in lieu of
any further salary payments to the Executive for periods subsequent to the Date
of Termination and in lieu of any severance benefit or separation pay otherwise
payable to the Executive. No Severance Payment shall be payable under this
Agreement unless there shall have been a termination of the Executive's
employment with the Company in accordance with Section 3 hereof and during the
Term. This Agreement shall not be construed as creating an express or implied
contract of employment and, except as otherwise agreed in writing between the
Executive and the Company, the Executive shall not have any right to be retained
in the employ of the Company.

                  5. Notice of Termination. After a Change in Control and during
the Term, any purported termination of his employment by the Executive hereunder
shall be communicated to the Company by written notice ("Notice of Termination")
which shall specify the date on which the Executive's employment shall
terminate, which shall not be less than fifteen (15) days nor more than sixty
(60) days, respectively, from the date such Notice of Termination is given
("Date of Termination").

                  6. Timing of Severance Payment. The Severance Payment shall be
made not later than the tenth business day following the Date of Termination

                  7. Successors. This Agreement shall inure to the benefit of
and be enforceable by the Executive's personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. If the Executive shall die while any amount would still be payable to
the Executive hereunder (other than amounts which, by their terms, terminate
upon the death of the Executive) if the Executive had continued to live, each
such amount, unless otherwise provided herein, shall be paid in accordance with
the terms of this Agreement to the executors, personal representatives or
administrators of the Executive's estate.

                  8. Notices. For the purpose of this Agreement, notices and all
other communications provided for in the Agreement shall be in writing and shall
be deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed, if to the
Executive, to the address inserted below the Executive's signature on the final
page hereof and, if to the Company, to the address set forth below, or to such
other address as either party may have furnished to the other in writing in
accordance herewith, except that notice of change of address shall be effective
only upon actual receipt:


                                      -3-
<PAGE>   4

                  To the Company:

                  National Record Mart, Inc.
                  507 Forest Avenue
                  Carnegie, PA 15106
                  Attention:  Theresa Carlise

                  9. Miscellaneous. No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing and signed by the Executive and such officer as may be
specifically designated by the Board of Directors of the Company. No waiver by
either party hereto at any time of any breach by the other party hereto of, or
of any lack of compliance with, any condition or provision of this Agreement to
be performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time. This Agreement supersedes any other agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter hereof which
have been made by either party. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the Commonwealth
of Pennsylvania. Any payments provided for hereunder shall be paid net of any
applicable withholding required under federal, state or local law and any
additional withholding to which the Executive has agreed.

                  10. Validity. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.

                  11. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.

                  12. Settlement of Disputes; Arbitration. Any dispute or
controversy as to the validity, interpretation, construction, application or
enforcement of, or otherwise arising under or in connection with this Agreement,
shall be submitted at the request of either party hereto for resolution and
settlement through arbitration in Pittsburgh, Pennsylvania in accordance with
the rules then prevailing with the American Arbitration Association. Any award
rendered therein shall be final and binding on each of the parties hereto and
their heirs, executors and administrators and successors and assigns, and
judgment may be entered thereon in any court having jurisdiction.


                  [Remainder of page intentionally left blank.]


                                      -4-
<PAGE>   5

                  IN WITNESS WHEREOF, the parties hereto have executed this
Amendment or caused this Amendment to be duly executed as of the day and year
first written above.

WITNESS:                                WILLIAM A. TEITELBAUM

Theresa Carlise                         William A. Teitelbaum
-----------------------------------     ----------------------------------------

                                        Notice Address:
                                        4 Wilson Court
                                        ----------------------------------------
                                        Dix Hills, NY 11743
                                        ----------------------------------------

                                        ----------------------------------------



ATTEST:                                 NATIONAL RECORD MART, INC.

Glenn E. Spoharski                      By: Theresa Carlise
-----------------------------------        -------------------------------------
Assistant Secretary                     Name: Theresa Carlise
                                        Title: Sr. VP, CFO & Secretary












                                      -5-
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.16
<SEQUENCE>5
<FILENAME>j8626301ex10-16.txt
<DESCRIPTION>CHANGE IN CONTROL AGREEMENT DATED 1-1-01
<TEXT>

<PAGE>   1
                                                                   Exhibit 10.16




                           CHANGE IN CONTROL AGREEMENT

                  This Change in Control Agreement ("Agreement") is made and
entered into as of this ___ day of January 2001 by and between Theresa Carlise,
an individual (the "Executive"), and National Record Mart, Inc., a Delaware
Company (the "Company").

                                    RECITALS

                  A. The Company considers it essential to the best interests of
its shareholders to foster the continued employment of key management personnel.

                  B. The Company's Board of Directors recognizes that, as is the
case with many publicly held Companies, the possibility of a change in control
exists and that such possibility, and the uncertainty which it may engender
among management, may result in the departure or distraction of management
personnel to the detriment of the Company and its shareholders.

                  C. The Board of Directors has determined that appropriate
steps should be taken to reinforce and encourage the continued attention and
dedication of members of the Company's management, including the Executive, to
their assigned duties without distraction in the face of potentially disturbing
circumstances arising from the possibility of a change in control.

                  NOW, THEREFORE, in consideration of the premises and the
respective covenants herein contained, the Company and the Executive hereby
agree as follows:

                  1. Certain Definitions. The following terms when used in this
Agreement shall have the meaning hereafter set forth:

                  (a) "Beneficial Owner" shall have the meaning ascribed to such
term in Rule 13d-3 under the Securities Exchange Act of 1934, as amended from
time to time.

                  (b) "Change in Control" shall mean the determination (which
may be made effective as of a particular date specified by the Board of
Directors of the Company) by the Board of Directors of the Company, made by a
majority vote that a change in control has occurred, or is about to occur. Such
a change shall not include, however, a restructuring, reorganization, merger, or
other change in capitalization in which the Persons who own an interest in the
Company on the date hereof (the "Current Owners") (or any individual or entity
which receives from a Current Owner an interest in the Company through will or
the laws of descent and distribution) maintain more than an eighty percent (80%)
interest in the resultant entity. Regardless of the Board's vote or whether or
not the Board votes, a Change in Control will be deemed to have occurred as of
the first day any one (1) or more of the following subparagraphs shall have been
satisfied:

                      (i) Any Person (other than a Person in control of the
Company as of the date of this Agreement, or other than a trustee or other
fiduciary holding securities under an employee benefit plan of the Company, or a
Company owned directly or indirectly by the stockholders of the Company in
substantially the same proportions as their ownership of stock of




<PAGE>   2


the Company), becomes the Beneficial Owner, directly or indirectly, of
securities of the Company representing more than twenty percent (20%) of the
combined voting power of the Company's then outstanding securities;

                      (ii) The Company institutes any proceeding seeking an
order for relief under the Federal bankruptcy laws as now or hereafter in effect
or seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution,
winding up, liquidation, reorganization, arrangement, adjustment or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors or fails to file an answer or other pleading
denying the material allegations of any such proceeding filed against it; or

                      (iii) The stockholders of the Company approve:

                      (A) a plan of complete liquidation of the Company; or

                      (B) an agreement for the sale or disposition of all or
substantially all of the Company's assets; or

                      (C) a merger, consolidation, or reorganization of the
Company with or involving any other Company, other than a merger, consolidation,
or reorganization that would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least eighty percent (80%) of the combined voting power of
the voting securities of the Company (or such surviving entity) outstanding
immediately after such merger, consolidation, or reorganization.

However, in no event shall a Change in Control be deemed to have occurred, with
respect to the Executive, if the Executive is part of a purchasing group which
consummates the Change in Control transaction. The Executive shall be deemed
"part of a purchasing group" for purposes of the preceding sentence if the
Executive is an equity participant or has agreed to become an equity participant
in the purchasing company or group (except for (i) passive ownership of less
than five percent (5%) of the voting equity securities of the purchasing
company; or (ii) ownership of equity participation in the purchasing company or
group which is otherwise deemed not to be significant, as determined prior to
the Change in Control by a majority of the nonemployee continuing Directors of
the Board of Directors of the Company).

                  (c) "Person" shall have the meaning ascribed to such term in
Section 3(a)(9) of the Securities Exchange Act of 1934, as in effect on the date
hereof ("Exchange Act") and used in Sections 13(d) and 14(d) thereof, including
a "group" as defined in Section 13(d) thereof.

                  2. Term of Agreement. The Term of this Agreement shall
commence on the date hereof and end on December 31, 2001, unless further
extended as hereinafter provided. Commencing on January 1, 2002 and each January
1 thereafter, the Term shall automatically be extended for one additional year
unless, not later than September 30 of the preceding year, the Company or the
Executive shall have given notice not to extend the Term; provided, however,
that if a Change in Control shall have occurred during the Term, the Term shall
expire no earlier than six (6) months beyond the month in which such Change in
Control occurred.


                                      -2-
<PAGE>   3

                  3. Executive's Right to Terminate upon Change in Control.
Notwithstanding the term of employment set forth in the Employment Agreement,
dated as of January 1, 1996, between the Executive and the Company, as amended
(as the same may be further amended from time to time, the "Employment
Agreement"), the Executive shall have the right, exercisable by providing Notice
of Termination to the Company, to immediately terminate her employment in the
event of a Change in Control; provided such Notice of Termination shall have
been given not more than ninety (90) days after the date on which such Change in
Control is deemed to have occurred.

                  4. Severance Payment. In the event that Executive elects to
terminate her employment in accordance with Section 3 hereof, the Company shall
pay the Executive a lump sum severance payment, in cash, equal to the
Executive's annual base salary as in effect immediately prior to the Date of
Termination (the "Severance Payment"). The Severance Payment shall be in lieu of
any further salary payments to the Executive for periods subsequent to the Date
of Termination and in lieu of any severance benefit or separation pay otherwise
payable to the Executive. No Severance Payment shall be payable under this
Agreement unless there shall have been a termination of the Executive's
employment with the Company in accordance with Section 3 hereof and during the
Term. This Agreement shall not be construed as creating an express or implied
contract of employment and, except as otherwise agreed in writing between the
Executive and the Company, the Executive shall not have any right to be retained
in the employ of the Company.

                  5. Notice of Termination. After a Change in Control and during
the Term, any purported termination of her employment by the Executive hereunder
shall be communicated to the Company by written notice ("Notice of Termination")
which shall specify the date on which the Executive's employment shall
terminate, which shall not be less than fifteen (15) days nor more than sixty
(60) days, respectively, from the date such Notice of Termination is given
("Date of Termination").

                  6. Timing of Severance Payment. The Severance Payment shall be
made not later than the tenth business day following the Date of Termination

                  7. Successors. This Agreement shall inure to the benefit of
and be enforceable by the Executive's personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. If the Executive shall die while any amount would still be payable to
the Executive hereunder (other than amounts which, by their terms, terminate
upon the death of the Executive) if the Executive had continued to live, each
such amount, unless otherwise provided herein, shall be paid in accordance with
the terms of this Agreement to the executors, personal representatives or
administrators of the Executive's estate.

                  8. Notices. For the purpose of this Agreement, notices and all
other communications provided for in the Agreement shall be in writing and shall
be deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed, if to the
Executive, to the address inserted below the Executive's signature on the final
page hereof and, if to the Company, to the address set forth below, or to such
other address as either party may have furnished to the other in writing in
accordance herewith, except that notice of change of address shall be effective
only upon actual receipt:


                                      -3-
<PAGE>   4

                  To the Company:

                  National Record Mart, Inc.
                  507 Forest Avenue
                  Carnegie, PA 15106
                  Attention: William A. Teitelbaum

                  9. Miscellaneous. No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing and signed by the Executive and such officer as may be
specifically designated by the Board of Directors of the Company. No waiver by
either party hereto at any time of any breach by the other party hereto of, or
of any lack of compliance with, any condition or provision of this Agreement to
be performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time. This Agreement supersedes any other agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter hereof which
have been made by either party. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the Commonwealth
of Pennsylvania. Any payments provided for hereunder shall be paid net of any
applicable withholding required under federal, state or local law and any
additional withholding to which the Executive has agreed.

                  10. Validity. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.

                  11. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.

                  12. Settlement of Disputes; Arbitration. Any dispute or
controversy as to the validity, interpretation, construction, application or
enforcement of, or otherwise arising under or in connection with this Agreement,
shall be submitted at the request of either party hereto for resolution and
settlement through arbitration in Pittsburgh, Pennsylvania in accordance with
the rules then prevailing with the American Arbitration Association. Any award
rendered therein shall be final and binding on each of the parties hereto and
their heirs, executors and administrators and successors and assigns, and
judgment may be entered thereon in any court having jurisdiction.



                  [Remainder of page intentionally left blank.]


                                      -4-
<PAGE>   5


                  IN WITNESS WHEREOF, the parties hereto have executed this
Amendment or caused this Amendment to be duly executed as of the day and year
first written above.


WITNESS:                                 THERESA CARLISE

Glenn E. Spoharski                       Theresa Carlise
------------------------------------     ---------------------------------------


                                         Notice Address:
                                         754 Shady Lane
                                         ---------------------------------------
                                         Pittsburgh, PA 15228
                                         ---------------------------------------

                                         ---------------------------------------




ATTEST:                                  NATIONAL RECORD MART, INC.

Theresa Carlise                          By: William A. Teitelbaum
------------------------------------        ------------------------------------
Secretary                                Name: William A. Teitelbaum
                                         Title: CEO, President & Chairman



Glenn E. Spoharski
------------------------------------
Assistant Secretary





                                      -5-
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-11
<SEQUENCE>6
<FILENAME>j8626301ex11.txt
<DESCRIPTION>CALCULATION OF NET INCOME (LOSS) PER COMMON SHARE
<TEXT>

<PAGE>   1


                                                                  EXHIBIT 11
                                                                     PAGE 1 OF 1

                           NATIONAL RECORD MART, INC.
                CALCULATION OF NET INCOME (LOSS) PER COMMON SHARE
                  FOR THE THIRTEEN AND THIRTY-NINE WEEKS ENDED
                    DECEMBER 23, 2000 AND DECEMBER 25, 1999

NET INCOME (LOSS) PER COMMON SHARE

The computation of weighted average common shares and equivalents outstanding
for the periods presented is as follows:

<TABLE>
<CAPTION>
                                               Thirteen Weeks Ended                  Thirty-nine Weeks Ended
                                          ------------------------------        --------------------------------
                                          December 23,      December 25,        December 23,        December 25,
                                              2000              1999                2000                1999
                                          ------------      ------------        -------------       ------------
<S>                                      <C>               <C>                 <C>                 <C>
Weighted average common                     5,051,667          5,048,167           5,051,667          5,048,372
   shares outstanding

Common Stock Equivalents
   which are dilutive                         200,000            473,800                   *                  *

Treasury stock assumed to
  be repurchased using
  proceeds from options and
  warrants                                     (6,308)          (185,313)                  *                  *
                                           ----------         ----------         -----------         ----------
Weighted average common
   shares and equivalents
   outstanding                              5,245,359          5,336,654           5,051,667          5,048,372
                                           ----------         ----------         -----------         ----------

Net income (loss)                          $  602,571         $2,653,631         $(8,494,080)        $  693,746
                                           ==========         ==========         ===========         ==========

Basic net income (loss) per share               $0.12              $0.53              $(1.68)            $(0.14)
                                           ==========         ==========         ===========         ==========

Diluted net income (loss) per share             $0.11              $0.50              $(1.68)            $(0.14)
                                           ==========         ==========         ===========         ==========
</TABLE>

*    Shares not included in calculation, as the effect of such shares would be
     anti-dilutive


                                       11
</TEXT>
</DOCUMENT>
</SUBMISSION>
