FIRST AMENDMENT TO
EXECUTIVE EMPLOYMENT AGREEMENT
THIS FIRST AMENDMENT TO EXECUTIVE EMPLOYMENT AGREEMENT (the "Amendment"),
dated and effective as of October 1, 1998, is made and entered into by and
between CATHERINES, INC., a Delaware corporation having its principal offices at
3742 Lamar Avenue, Memphis, Tennessee 38118 (the "Company"), and DAVID C.
FORELL, an individual residing at 8592 Edenfield Road, Germantown, Tennessee
38138 (the "Employee").
W I T N E S S E T H:
WHEREAS, the Company and Employee are parties to an Executive
Employment Agreement dated as of May 23, 1991 (the "Employment Agreement"),
pursuant to which the Company has engaged Employee to perform executive and
managerial services for the Company; and
WHEREAS, the parties desire to amend the Employment Agreement upon the
terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements hereinafter contained, and other good and valuable consideration,
the receipt and sufficiency of all of which are hereby acknowledged, the parties
agree as follows:
1. Amendment to Employment Agreement. The Employment Agreement is hereby
amended by adding the following new Paragraph 11(d) thereto:
"(d) (1) If Employee's employment is terminated within two (2)
years after the occurrence of a "change of control" of the Company or
its parent corporation, Catherines Stores Corporation (the "Parent"),
by either (i) the Company or its successor other than for cause or (ii)
the Employee during the period beginning with the second (2nd) month
and continuing through the twenty-fourth (24th) month after any change
in control, if he determines that by reason of material adverse changes
in, inter alia, his authority, compensation, duties, managerial
responsibilities or geographical place of work, he is unable to perform
the duties and responsibilities of the position he held immediately
prior to the change in control, then the Employee shall be entitled to
receive a lump sum payment, payable within thirty (30) days after the
date of such termination, equal to (X) the sum of (A) 1/12th of his
annual base salary in effect immediately before such termination plus
(B) 1/12th of 100% of his target bonus opportunity for the fiscal year
of the Company in which such termination occurs, multiplied by (Y) the
greater of (a) the number of calendar months remaining in the term of
Employee's employment hereunder and (b) 24. In the event of such
termination, the Employee shall also be entitled to a continuation
during the number of months following the date of termination equal to
the number of months determined pursuant to the immediately preceding
clause (Y) of (i) the supplemental retirement benefits provided in
accordance with Paragraph 6 hereof, and (ii) health and insurance
benefits upon the same terms and conditions as in effect at the time of
such termination subject to the proviso at the end of Paragraph 11(b)
above.
(2) If any excise tax is imposed pursuant to the
Internal Revenue Code of 1986, as amended (the "Code") (including,
without limitation, Section 4999 of the Code), or of any successor
legislation (an "Excise Tax") upon any portion of a benefit payment
made to the Employee in accordance with this Paragraph 11, the Company
shall pay the initial Excise Tax and any additional Excise Tax and
federal and state income tax which arises as a result of the Company's
payment of the initial Excise Tax on behalf of the Employee.
(3) As used herein, the term "change in control"
means (i) a person (including, without limitation, a corporation,
trust, partnership, joint venture, limited liability company,
individual or other entity) or group of affiliated (directly or
indirectly) persons becoming the owner(s) (whether directly,
indirectly, beneficially or of record) of more than thirty-five percent
(35%) of the outstanding shares of common stock of the Company or the
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Parent at any time after October 1, 1998, (ii) the merger or
consolidation into, or sale of substantially all of the assets of the
Company or the Parent to, another corporation in which the Company or
the Parent, as the case may be, is not the surviving and operating
corporation, or where the stockholders of the Company or the Parent
prior to such transaction(s) do not own at least sixty-five percent
(65%) of the outstanding voting securities of the surviving corporation
after such transaction(s), or (iii) the persons who are directors of
the Company or the Parent as of October 1, 1998 cease to constitute a
majority of the Board of Directors of the Company or the Parent, as the
case may be, during any 24-month period after a transaction described
in (i) or (ii) of this Paragraph 11(d)."
2. Ratification of Employment Agreement. Except as specifically modified
hereby, all other terms, conditions and restrictions set forth in the Employment
Agreement are hereby ratified and confirmed by the Company and Employee and
shall remain in full force and effect. To the extent any of the terms of this
Amendment conflict with the terms of the Employment Agreement, the terms of this
Amendment shall govern.
3. Miscellaneous. Capitalized terms used but not otherwise defined herein
shall have the respective meanings given to such terms in the Employment
Agreement. This Amendment may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument. This Amendment shall become effective as of the
date first written above, upon the execution by each of the parties of at least
one counterpart hereof, and it shall not be necessary that any single
counterpart bear the signatures of both parties. The execution and delivery of
this Amendment by delivery of a facsimile copy bearing the facsimile signature
of a party hereto shall constitute a valid and binding execution and delivery of
this Amendment by such party, and such facsimile copies shall constitute
enforceable original documents. This Amendment shall be governed by and
construed and enforced exclusively in accordance with the laws of the State of
Tennessee, without regard to principles of conflicts of laws.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first above written.
CATHERINES, INC.
By:
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Bernard J. Wein,
President
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David C. Forell
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