SECOND AMENDMENT TO
EXECUTIVE EMPLOYMENT AGREEMENT
THIS SECOND 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
0000 Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxx 00000 (the "Company"), and XXXXXXX X.
XXXXXXXX, an individual residing at 0000 Xxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxxx 00000
(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, as amended by an Amendment to Executive
Employment Agreement dated as of May 30, 1997 (collectively, 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. Amendments to Employment Agreement.
1.1 Paragraph 11(b) of the Employment Agreement is hereby amended by
deleting the proviso at the end thereof in its entirety and substituting the
following in lieu thereof:
"; provided, however, that the termination of
Employee's employment and expiration of this Agreement on the
Termination Date shall not constitute an event entitling
Employee to any lump sum payment or continuation of benefits
under this Paragraph 11(b) or under Paragraphs 11(c) or
11(d)."
1.2 Paragraph 11(c) of the Employment Agreement is hereby deleted in its
entirety and the following is substituted in lieu thereof:
"(c) If (i) the Company terminates the employment of
the Employee during the term of this Agreement other than for
"cause" (as defined in Paragraph 11(a) hereof) or (ii) if the
Employee terminates his employment during the term of this
Agreement because the Company, upon 30 days' prior written
notice from Employee to the Company specifying a material
breach by the Company of any of its material obligations to
the Employee pursuant to this Agreement, has failed to cure
such material breach (within such 30-day notice period), then
the Employee shall be entitled to receive a lump sum payment,
payable within 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) 18. In
the event of such termination, the Employee shall also be
entitled to a continuation during the number of months
following the date of such 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."
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1.3 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
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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
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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Xxxxxxx X. Xxxx,
President
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Xxxxxxx X. Xxxxxxxx
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