<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------
THE CATO CORPORATION
(Exact name of registrant, as specified in its charter)
DELAWARE 56-0484485
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8100 Denmark Road
Charlotte, North Carolina 28273-5975
(704) 554-8510
(Address of principal executive offices)
-------------
THE CATO CORPORATION
1999 INCENTIVE COMPENSATION PLAN
(Full title of the plan)
-------------
MICHAEL O. MOORE
Executive Vice President
Chief Financial Officer and
Secretary
The Cato Corporation
8100 Denmark Road
Charlotte, North Carolina 28273-5975
(Name and address of agent for service)
(704) 554-8510
(Telephone number, including area code, of agent for service)
-------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=======================================================================================================================
Title of securities to Amount to be Proposed maximum offering Proposed maximum Amount of
be registered registered price per unit aggregate offering price registration fee
- -------------------------- ----------------- --------------------------- ------------------------- -------------------
<S> <C> <C> <C> <C>
Class A and Class B 1,000,000 $10.625 (1) $10,625,000 (1) $2,805
Common Stock, par value
$0.03 1/3 (including
rights to purchase
Common Stock)
=======================================================================================================================
</TABLE>
(1) In accordance with Rule 457(h)(1) of Regulation C, the proposed maximum
offering price per unit is computed on the basis of the average of the high
and low prices on the NASDAQ National Market System on January 31, 2000.
- --------------------------------------------------------------------------------
<PAGE> 2
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
ITEM 1. PLAN INFORMATION.
Omitted pursuant to the instructions and provisions of Form S-8.
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.
Omitted pursuant to the instructions and provisions of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents filed with the Securities and Exchange
Commission (the "Commission") by The Cato Corporation (the "Registrant") are
incorporated by reference in this Registration Statement:
(a) The Registrant's annual report on Form 10-K for the fiscal
year ended January 30, 1999;
(b) The Registrant's quarterly reports on Form 10-Q for the
quarters ended May 1, 1999, July 31, 1999 and October 30, 1999;
(c) The description of the Registrant's Common Stock contained in
the Registrant's Registration Statement on Form 8-A, as amended; and
(d) All documents subsequently filed by the Registrant with the
Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934 (the "Exchange Act") after the date of this Registration
Statement and prior to the filing of a post-effective amendment which indicates
that all securities offered hereby have been sold or which deregisters all
securities then remaining unsold from the date of filing such documents with the
Commission.
Any statement contained herein or in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Registration Statement to the extent that a
statement contained herein or in any other subsequently filed document (which
also is or is deemed to be incorporated by reference herein) modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Registration Statement.
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ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145(a) of the General Corporation Law of the State of
Delaware provides that a Delaware corporation may indemnify any person who was
or is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation or enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
cause to believe his conduct was unlawful.
Section 145(b) provides that a Delaware corporation may indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted
under similar standards, except that no indemnification may be made in respect
of any claim, issue or matter as to which such person shall have been adjudged
to be liable to the corporation unless and only to the extent that the court in
which such action or suit was brought shall determine that despite the
adjudication of liability, such person is fairly and reasonably entitled to be
indemnified for such expenses which the court shall deem proper.
Section 145 further provides that to the extent a present or
former director or officer of a corporation has been successful in the defense
of any action, suit or proceeding referred to in subsections (a) and (b) or in
the defense of any claim, issue, or matter therein, he shall be indemnified
against expenses actually and reasonably incurred by him in connection
therewith; that indemnification provided for by Section 145 shall not be deemed
exclusive of any other rights to which the indemnified party may be entitled;
and that the corporation may purchase and maintain insurance on behalf of a
director, officer, employee or agent of the corporation against any liability
asserted against him or incurred by him in any such capacity or arising out of
his status as such whether or not the corporation would have the power to
indemnify him against such liabilities under Section 145.
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Section 102(b)(7) of the General Corporation Law provides that a
corporation in its original certificate of incorporation or an amendment thereto
validly approved by stockholders may eliminate or limit personal liability of
members of its board of directors or governing body for breach of a director's
fiduciary duty. However, no such provision may eliminate or limit the liability
of a director for breaching his duty of loyalty, failing to act in good faith,
engaging in intentional misconduct or knowingly violating a law, paying a
dividend or approving a stock repurchase which was illegal, or obtaining an
improper personal benefit. A provision of this type has no effect on the
availability of equitable remedies, such as injunction or rescission, for breach
of fiduciary duty.
The Company's Certificate of Incorporation eliminates, to the
fullest extent permitted by Delaware law, liability of a director to the Company
or its stockholders for monetary damages for a breach of such director's
fiduciary duty of care. In addition, a director is not relieved of his or her
responsibilities under any other law, including the federal securities laws.
The Cato Corporation 1999 Incentive Corporation Plan provides that
no member of the Committee that administers the Plan will be liable for any
action or decision made in good faith relating to the Plan or any award
thereunder.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
See the Exhibit Index on page 8.
ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration
Statement:
(i) to include any prospectus required by Section
10(a)(3) of the Securities Act;
(ii) to reflect in the prospectus any facts or events
arising after the effective date of this
Registration Statement (or the most recent
post-effective amendment hereof) which, individually
or in the aggregate, represent a fundamental change
in the information set forth in this Registration
Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered
(if the total dollar value of securities offered
would not exceed that which was registered) and any
deviation from the low or high end of the estimated
maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to
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Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20% change
in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the
effective Registration Statement; and
(iii) to include any material information with respect to
the plan of distribution not previously disclosed in
this Registration Statement or any material change
to such information in this Registration Statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act, each filing of
the Registrant's annual report pursuant to Section 13(a) or 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to section 15(d) of the Exchange Act) that is
incorporated by reference in this Registration Statement shall be deemed to be a
new registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) The undersigned Registrant hereby undertakes that insofar as
indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Commission such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
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SIGNATURES
THE REGISTRANT. Pursuant to the requirements of the Securities Act of
1933, the Registrant certifies that it has reasonable grounds to believe it
meets all the requirements for filing on Form S-8 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Charlotte, State of North Carolina on January
14, 2000.
THE CATO CORPORATION
By: /s/ MICHAEL O. MOORE
----------------------------------
Michael O. Moore
Executive Vice President
and Chief Financial Officer
POWER OF ATTORNEY
Each undersigned and director and officer of The Cato Corporation
hereby constitutes and appoints Michael O. Moore and John P. Derham Cato, and
each of them, with full power of substitution and resubstitution, his true and
lawful attorneys-in-fact and agents, for him and his name, place, and stead, in
any and all capacities, to sign on his behalf any and all amendments (including
post-effective amendments and amendments thereto) to this Registration
Statement, and to file the same, with all exhibits thereto and other documents
in connection therewith, with the Securities and Exchange Commission, and grants
unto said attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing requisite and necessary
to de done in and about the premises as fully as to all intents and purposes as
he might or could do in person, and hereby ratifies and confirms all that such
attorneys-in-fact or agents, or any of them, or their substitutes shall lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ JOHN P. DERHAM CATO President and Chief Executive January 14, 2000
---------------------------------- Officer (principal executive
John P. Derham Cato officer) and Director
</TABLE>
(Signatures Continued)
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<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ MICHAEL O. MOORE Executive Vice President and Chief January 14, 2000
-------------------------------------------- Financial Officer (principal
Michael O. Moore financial officer and principal
accounting officer)
/s/ WAYLAND H. CATO, JR. Chairman of the Board and Director January 14, 2000
--------------------------------------------
Wayland H. Cato, Jr.
/s/ EDGAR T. CATO Director January 14, 2000
--------------------------------------------
Edgar T. Cato
/s/ HOWARD A. SEVERSON Director January 14, 2000
--------------------------------------------
Howard A. Severson
/s/ ROBERT W. BRADSHAW, JR. Director January 14, 2000
--------------------------------------------
Robert W. Bradshaw, Jr.
/s/ GRANT L. HAMRICK Director January 14, 2000
--------------------------------------------
Grant L. Hamrick
/s/ THOMAS E. CATO Director January 14, 2000
--------------------------------------------
Thomas E. Cato
/s/ CLARICE CATO GOODYEAR Director January 14, 2000
--------------------------------------------
Clarice Cato Goodyear
/s/ GEORGE S. CURRIN Director January 14, 2000
--------------------------------------------
George S. Currin
/s/ PAUL FULTON Director January 14, 2000
--------------------------------------------
Paul Fulton
/s/ JAMES H. SHAW Director January 19, 2000
--------------------------------------------
James H. Shaw
/s/ A. F. SLOAN Director January 14, 2000
--------------------------------------------
A. F. Sloan
</TABLE>
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
-------------- -----------
<S> <C>
4.1 The Registrant's Certificate of Incorporation
4.2 The Registrant's Bylaws
4.3 The Cato Corporation 1999 Incentive Corporation Plan
5.1 Opinion of Robinson, Bradshaw & Hinson, P.A.
23.1 Consent of Robinson, Bradshaw & Hinson, P.A. (included in Exhibit 5.1)
23.2 Consent of Deloitte & Touche LLP
24 Form of Power of Attorney (included in the signature pages to this
registration statement)
</TABLE>
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<PAGE> 1
EXHIBIT 4.1
RESTATED CERTIFICATE OF INCORPORATION
OF
THE CATO CORPORATION
The Cato Corporation, a corporation organized and existing under the
laws of the State of Delaware, hereby certifies as follows:
1. The name of the corporation is "The Cato Corporation," and the name
under which the corporation was originally incorporated is "Cato Stores, Inc."
The date of filing its original Certificate of Incorporation with the Secretary
of State was March 28, 1946.
2. The text of the Restated Certificate of Incorporation as amended or
supplemented heretofore is further amended hereby to read as herein set forth in
full:
FIRST. The name of the Corporation is
THE CATO CORPORATION
SECOND. Its registered office in the State of Delaware is located at
1209 Orange Street, in the City of Wilmington, County of New Castle.
The name and address of its resident agent is The Corporation Trust
Company, 1209 Orange Street, Wilmington, Delaware, 19801.
THIRD. The purpose of the corporation is to engage in any lawful act or
activity for which corporations may be organized under the General
Corporation Law of Delaware.
FOURTH (A) The total number of shares of all classes of capital stock
which the Corporation shall have the authority to issue is 65,100,000,
consisting of:
(1) 50,000,000 shares of Class A Common Stock having a par
value of $.03 1/3 per share,
(2) 15,000,000 shares of Class B Common Stock having a par
value of $.03 1/3 per share, and
(3) 100,000 shares of Preferred Stock having a par value of
$100.00 per share.
The issued shares of the Corporation's capital stock as of the date of
filing of this Amendment shall be reclassified as shares of Class A
Common Stock, without any further action required by the holders
thereof.
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(B) Except to the extent otherwise provided below, the holders of Class
A Common Stock and the Class B Common Stock shall have the same powers,
designations, preferences and participation rights and privileges. The
holders of Class A Common Stock and Class B Common Stock shall have the
following specific powers, designations, preferences, and relative
participating rights and privileges:
(1) Each holder of Class A Common Stock shall be entitled to
one (1) vote per share of Class A Common Stock standing in his
name on the transfer books of the Corporation, and each holder
of Class B Common Stock shall be entitled to ten (10) votes
per share of Class B Common Stock standing in his name on the
transfer books of the Corporation, with respect to each matter
to be voted upon.
(2) The holders of Class A Common Stock and Class B Common
Stock shall have the right to vote, but not as separate
classes except to the extent required by law or as otherwise
provided in subsection (B) (3) below, upon all matters
submitted to the stockholders of the Corporation.
(3) In addition to any other vote required by law, the
Corporation may not alter or change, by rights, preferences,
privileges, restrictions, dividend rights, voting power or
other powers given to the holders of Class A Common Stock and
Class B Common stock pursuant to this Article Fourth other
than by the affirmative vote of not less than sixty-six and
two thirds (66 2/3) percent of all the votes entitled to be
voted by the holders of each class of stock to be adversely
affected thereby voting as a separate class, except that the
Corporation may increase the total number of authorized shares
of Class A Common Stock or Class B Common Stock that may be
issued by the corporation by the affirmative vote of a
majority of all the votes entitled to be voted by the holders
of Class A Common Stock and Class B Common Stock voting
together, without regard to class.
(4) Subject to the rights of any holders of Preferred Stock,
holders of Class A Common Stock and Class B Common Stock shall
be entitled to receive such dividends and other distributions
in cash, stock or property of the Corporation as may be
declared thereon by the Board of Directors from time to time
out of assets or funds of the Corporation legally available
therefor; provided, however, that:
(a) No cash dividend may be declared and paid on the
Class B Common Stock unless a dividend of an equal or greater
amount of cash per share has been declared and paid on the
Class A Common Stock.
(b) In the event of any dividend or other
distribution payable in stock of the Corporation, other than
Preferred Stock, including a distribution pursuant to any
stock split or division, which occurs after the initial
issuance of Class B Common Stock by the Corporation, only
shares of Class A Common Stock shall
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<PAGE> 3
be distributed with respect to Class A Common Stock, and the
Corporation's Board of Directors, in its discretion, shall
determine whether to distribute shares of Class A or Class B
Common Stock, in an amount per share equal to the amount per
share distributed with respect to the Class A Common Stock,
with respect to Class B Common Stock.
(c) In the case of any combination, reclassification
or recapitalization of the Class A Common Stock, the shares of
Class B Common stock shall also be combined, reclassified or
recapitalized so that the number of shares of Class B Common
stock outstanding immediately following such combination
reclassification or recapitalization shall bear the same
relationship to the number of shares of Class B Common Stock
outstanding immediately prior to such combination,
reclassification or recapitalization as the number of shares
of Class A Common Stock outstanding immediately following such
combination, reclassification or recapitalization bears to the
number of shares of Class A Common Stock outstanding
immediately prior to such combination, reclassification or
recapitalization.
(d) Shares of Class B Common stock outstanding at any
time shall not be reverse split or combined, whether by
reclassification, recapitalization or otherwise, so as to
decrease the number of shares thereof issued and outstanding
unless at the same time the shares of Class A Common Stock are
reverse split or combined so that the number of shares of
Class A Common Stock outstanding immediately following such
reclassification or recapitalization shall bear the same
relationship to the number of shares of Class A Common Stock
outstanding immediately prior to such reclassification or
recapitalization as the number of shares of Class B Common
Stock outstanding immediately following such reclassification
or recapitalization bears to the number of shares of Class B
Common Stock outstanding immediately prior to such
reclassification or recapitalization.
(5) Any outstanding shares of Class B Common Stock shall be
convertible on or after July 1, 1988 into fully paid and
nonassessable shares of Class A Common Stock at the option of
the holders thereof on a one share for one share basis. In
order for a stockholder to effect any such conversion; such
stockholder must furnish the Corporation with a written notice
of the request for conversion, which notice shall be addressed
to the principal office of the Corporation or to the
Corporation's designation transfer agent, shall state the
number of shares of Class B Common Stock to be converted into
shares of Class A Common Stock, shall state the name of the
person(s) in whose name(s) the shares of Class A Common Stock
are to be registered and shall be accompanied by a certificate
or certificates representing such shares, properly endorsed
and ready for transfer. A conversion shall be deemed to be
made (and the holder of such shares shall be deemed to be the
holder of record of an equal number of shares of Class A
Common Stock) on
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the close of business of the date when the Corporation or
transfer agent has received the prescribed written notice and
required certificate or certificates, properly endorsed and
ready for transfer. The Corporation hereby reserves and shall
at all times reserve and keep available out of its authorized
and unissued shares of Class A Common Stock, for the purposes
of effecting conversion such number of duly authorized shares
of Class A Common Stock as shall from time to time be
sufficient to effect the conversion of all outstanding shares
of Class B Stock.
(6) In the event of a liquidation or dissolution of the
Corporation, or a winding up of its affairs, whether voluntary
or involuntary, or a merger or consolidation of the
Corporation, after payment or provision for payment of the
debts or liabilities of the Corporation and the amounts to
which holders of the Preferred Stock shall be entitled,
holders of Class A Common Stock shall be entitled to receive
out of the net assets of the Corporation, the amount of $1.00
per share, prior to any distribution to be made with respect
to Class B Common Stock. After such payment or provision for
such payment to the holders of Class A Common Stock, the
holders of Class A Common stock and the holders of Class B
Common Stock shall be entitled to share ratably (i.e., an
equal amount of assets for each share of either Class A Common
Stock or Class B Common Stock) in the remaining assets of the
Corporation.
(C) (1) No person holding shares of Class B Common Stock of record
(hereinafter called a "Class B Holder") may transfer, and the
Corporation shall not register the transfer of, such shares of Class B
Common Stock, as Class B Common Stock, whether by sale, assignment,
gift, bequest, appointment or otherwise, except to a Permitted
Transferee (as hereinafter defined). Shares of Class B Common Stock
transferred to any party other than a Permitted Transferee (as
hereinafter defined) shall be converted into shares of Class A Common
Stock as provided by subsection (4) of this Section C. A Permitted
Transferee shall mean, with respect to each person from time to time
shown as the record holder of shares of Class B Common Stock:
(a) In the Case of a Class B Holder who is a natural
person;
(i) any lineal descendant of such Class B
Holder (the Class B Holder and such lineal
descendants herein collectively referred to
as "Class B Holder's Family Members");
(ii) The trustee of a trust (including a
voting trust) principally for the benefit of
such Class B Holder and/or one or more of
his or her Permitted Transferees described
in each subclause of this clause (a) other
than this subclause (ii), provided that such
trust may also grant a general or special
power of appointment to one or more of
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<PAGE> 5
such Class B Holder's Family Members and may
permit trust assets to be used to pay taxes,
legacies and other obligations of the trust
or of the estates of one or more of such
Class B Holder's Family Members payable by
reason of the death of any of such Family
Members:
(iii) A corporation if all of the
outstanding capital stock of such
corporation which is entitled to vote for
the election of directors is owned by, or a
partnership if all of the partners are, and
all of the beneficial interests in the
partnership are owned by, the Class B Holder
or his or her permitted Transferees
determined under this clause (a), provided
that if by reason of any change in the
ownership of such stock or partnership
interests, such corporation or partnership
would no longer qualify as a Permitted
Transferee, all shares of Class B Common
Stock then held by such corporation or
partnership shall, upon the election of the
Corporation given by written notice to such
corporation or partnership, without further
act be converted into a like number of
shares of common Stock effective upon the
date of the giving of such notice, and stock
certificates formerly representing such
shares of Class B Common stock shall
thereupon and thereafter be deemed to
represent the like number of shares of
common Stock; and
(iv) The estate of such Class B Holder.
(b) In the case of a Class B Holder holding shares of
Class B Common Stock as trustee pursuant to a trust (other
than a trust described in clause (c) below), Permitted
Transferee means (i) any person transferring Class B Common
Stock to such trust and (ii) any Permitted Transferee of any
such transferor determined pursuant to clause (a) above.
(c) In the case of a Class B Holder holding the
shares of Class B Common Stock in question as trustee pursuant
to a trust which was irrevocable on the record date for
determining the persons to whom the Class B Common Stock is
first issued by the Corporation, Permitted Transferee means
(i) any person to whom or for whose benefit principal may be
distributed either during or at the end of the term of such
trust whether by power of appointment or otherwise and (ii)
any Permitted Transferee of any such person determined
pursuant to clause (a) above.
(d) In the case of a Class B Holder which is a
partnership or corporation acquiring record and beneficial
ownership of the shares
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<PAGE> 6
of Class B Common Stock in question upon its initial issuance
by the Corporation, Permitted Transferee mean (i) any partner
of such partnership, or stockholder of such corporation, as of
the date of the initial issuance of the shares of Class B
Common Stock, and (ii) any Permitted Transferee of any such
person, partner, or stockholder referred to in subclause (i)
of this clause (d).
(e) In the case of a Class B Holder which is a
corporation or partnership (other than a corporation or
partnership described in clause (d) above) holding record and
beneficial ownership of the shares of Class B Common Stock in
question, Permitted Transferee means (i) any person
transferring such shares of Class B Common Stock to such
corporation or partnership and (ii) any Permitted Transferee
of any such transferor determined under clause (a) above.
(f) In the case of a Class B Holder which is the
estate of a deceased Class B Holder, or which is the estate of
a bankrupt or insolvent Class B Holder, which holds record and
beneficial ownership of the shares of Class B Common Stock in
question, Permitted Transferee means a permitted Transferee of
such deceased, bankrupt or insolvent Class B Holder as
determined pursuant to clause (a), (b), (c), (d) or (e) above,
as the case may be.
(g) Any employee benefit plan for the benefit of the
employees of the Corporation (a "Plan").
(h) In the case of a Class B Holder which is a Plan,
Permitted Transferee includes any beneficiary of such plan to
whom shares of stock of the Corporation may be distributed,
but only as such shares are distributable.
(2) Notwithstanding anything to the contrary set forth herein,
any Class B Holder may pledge such Holder's shares of Class B Common
Stock to a pledge pursuant to a bona fide pledge of such shares as
collateral security for indebtedness due to the pledge, provided that
such shares shall not be transferred to or registered in the name of
the pledge and shall remain subject to the provisions of this Section
C. In the event of foreclosure or other similar action by the pledge,
such pledged shares of Class B Common stock may only be transferred to
a Permitted Transferee of the pledge or converted into shares of Common
Stock, as the pledge may elect.
(3) For purposes of this Section C:
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(a) The relationship of any person that is derived by
or through legal adoption shall be considered a natural one.
(b) Each joint owner of shares of Class B Common
Stock shall be considered a "class B Holder" of such shares.
(c) A minor for whom shares of Class B Common Stock
are held pursuant to a Uniform Gifts to Minors Act or similar
law shall be considered a Class B Holder of such shares.
(d) Unless otherwise specified, the term "person"
means both natural persons and legal entities.
(e) Without derogating from the election conferred
upon the Corporation pursuant to subclause (iii) of clause (a)
above, each reference to a corporation shall include any
successor corporation resulting from merger or consolidation
and each reference to a partnership shall include any
successor partnership resulting from the death or withdrawal
of a partner.
(4) Any transfer of shares of Class B Common Stock not
permitted hereunder shall result in the conversion of the transferee's
shares of Class B Common Stock into shares of Class A Common Stock,
effective as of the date on which certificates representing such shares
are presented for transfer on the books of the Corporation. The
Corporation may, in connection with preparing a list of stockholders
entitled to vote at any meeting of stockholders, or as a condition to
the transfer or the registration of shares of Class B Common Stock on
the Corporation's books require the furnishing of such affidavits or
other proof as it deems necessary to establish that any person is the
beneficial owner of shares of Class B Common Stock or is a Permitted
Transferee.
(5) Shares of Class B Common Stock shall be registered in the
names of the beneficial owners thereof and not in "street" or "nominee"
name. For this purpose, a "beneficial owner" of any shares of Class B
Common Stock shall mean a person who, or an entity which possesses the
power, either singly or jointly, to direct the voting or disposition of
such shares. The corporation shall note on the certificates for shares
of Class B Common stock that there are restrictions on the transfer and
registration of transfer imposed by Article Fourth, Section C hereof.
(D) The Board of Directors is expressly authorized, subject to the
limitations prescribed by law, to provide for the issuance of the
Preferred Stock in series, and to fix by resolution or resolutions
providing for the issue of any series
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the number of shares included in such series and the designations,
relative powers, preferences and rights, and the qualifications,
limitations or restrictions thereof.
FIFTH. No holder of shares of the capital stock of any class of the
corporation shall have any pre-emptive or preferential right of
subscription to any shares of any class of stock of the corporation,
whether now or hereafter authorized, or to any bonds, debentures or
other securities convertible into stock of any class, and all such
additional shares of stock, bonds, debentures or other securities
convertible into stock may be issued and disposed of by the Board of
Directors to such person or persons and on such terms and for such
consideration (so far as may be permitted by law) as the Board of
Directors, in its absolute discretion, may deem advisable.
SIXTH. The corporation is to have perpetual existence.
SEVENTH. The private property of the stockholders shall not be subject
to the payment of corporate debts to any extent whatever.
EIGHTH. Whenever a compromise or arrangement is proposed between this
corporation and its creditors or any class of them, and/or between this
corporation and its stockholders or any class of them, any court of
equitable jurisdiction within the State of Delaware may, on the
application in a summary way of this corporation or of any creditor or
stockholder thereof, or on the application of any receiver or receivers
appointed for this corporation under the provisions of Section 291 of
Title 8 of the Delaware Code or on the application of trustees in
dissolution or of any receiver or receivers appointed for this
corporation under the provisions of Section 279 of Title 8 of the
Delaware Code, order a meeting of the creditors or class of creditors,
and/or of the stockholders or class of stockholders of this
corporation, as the case may be, to be summoned in such manner as the
said court directs. If a majority in number representing three-fourths
in value of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of this corporation, as the case
may be, agree to any compromise or arrangement and to any
reorganization of this corporation as consequence of such compromise or
arrangement, the said compromise or arrangement and the said
reorganization shall, if sanctioned by the court to which the said
application has been made, be binding on all the creditors or class of
creditors, and/or on all the stockholders or class of stockholders of
this corporation, as the case may be, and also on this corporation.
NINTH. Meetings of stockholders may be held without the State of
Delaware, if the bylaws so provide. The books of the corporation may be
kept (subject to any provision contained in the statutes) outside of
the State of Delaware at such place or places as may be from time to
time designated by the Board of Directors or in the bylaws of the
corporation.
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TENTH. The provisions of this Certificate of Incorporation shall not be
modified, revised, altered or amended, repealed or rescinded in whole
or in part, without the affirmative vote of sixty-six and two-thirds
(66 2/3) percent of the votes to which the holders of the outstanding
stock are entitled.
ELEVENTH. (A) A director of the Corporation shall not be personally
liable to the Corporation or its stockholders for monetary damages for
breach of fiduciary duty as a director, except for liability (i) for
any breach of the director's duty of loyalty to the Corporation or its
stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii)
under Section 174 of the Delaware General Corporation Law, or (iv) for
any transaction from which the director derived an improper personal
benefit. If the Delaware General Corporation Law is amended after
approval by the Corporation's stockholders of this Article to authorize
corporate action further eliminating or limiting the personal liability
of Directors, then the liability of a Director of the Corporation shall
be eliminated or limited to the fullest extent permitted by the
Delaware General Corporation Law, as so amended.
Any repeal or modification of the immediately preceding
paragraph by the stockholders of the Corporation shall not adversely
affect any right or protection of a Director of the Corporation
existing at the time of such repeal or modification.
(B) Each person who was or is made a party or is threatened to be made
a party to or is otherwise involved in any action, suit or proceeding,
whether civil, criminal, administrative or investigative (hereinafter a
"proceeding"), by reason of the fact that he or she is or was a
director, officer or employee of the Corporation or is or was serving
at the request of the Corporation as a director, officer, employee or
agent of another corporation or of a partnership, joint venture, trust
or other enterprise, including service with respect to employee benefit
plans (hereinafter an "indemnitee"), whether the basis of such
proceeding is alleged action in an official capacity as a director,
officer, employee or agent or in any other capacity while serving as a
director, officer, employee or agent, shall be indemnified and held
harmless by the Corporation to the fullest extent authorized by the
Delaware General Corporation Law, as the same exists or may hereafter
be amended but, in the case of any such amendment, only to the extent
that such amendment permits the Corporation to provide broader
indemnification rights than such law permitted the Corporation to
provide prior to such amendment), against all expense, liability and
loss (including attorneys' fees, judgments, fines, ERISA excise taxes
or penalties and amounts paid in settlement) reasonably incurred or
suffered by such indemnitee in connection therewith, and such
indemnification shall continue as to an indemnitee who has ceased to be
a director, officer, employee or agent and shall inure to the benefit
of the indemnitee's heirs, executors and administrators; provided,
however, that, except as provided in paragraph (C) hereof with respect
to proceedings to enforce rights to indemnification, the
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Corporation shall indemnify any such indemnitee in connection with the
proceeding (or part thereof) initiated by such indemnitee only if such
proceeding (or part thereof) was authorized by the Board of Directors
of the Corporation. The right to indemnification conferred in this
Section shall be a contract right and shall include the right to be
paid by the Corporation the expenses incurred in defending any such
proceeding in advance of its final disposition (hereinafter an
"advancement of expenses"); provided, however, that, if the Delaware
General Corporation Law requires, an advancement of expenses incurred
by an indemnitee in his or her capacity as a director or officer (and
not in any other capacity in which service was or is rendered by such
indemnitee, including without limitation, service to an employee
benefit plan) shall be made only upon delivery to the Corporation of an
undertaking, by or on behalf of such indemnitee, to repay all amounts
so advanced if it shall ultimately be determined by final decision from
which there is no further right to appeal that such indemnitee is not
entitled to be indemnified for such expenses under this Section or
otherwise (hereinafter an "undertaking").
(C) If a claim under paragraph (B) of this Article is not paid in full
by the Corporation within sixty days after a written claim has been
received by the corporation, except in the case of a claim for an
advancement of expenses, in which case the applicable period shall be
twenty days, the indemnitee may at any time thereafter bring suit
against the Corporation to recover the unpaid amount of the claim. If
successful in whole or in part in any such suit or in a suit brought by
the Corporation to recover an advancement of expenses pursuant to the
terms of an undertaking, the indemnitee shall be entitled to be paid
also the expense of prosecuting or defending such suit. In (i) any suit
brought by the indemnitee to enforce a right to indemnification
hereunder (but not in a suit brought by the indemnitee to enforce a
right to an advancement of expenses) it shall be a defense that, and
(ii) any suit by the Corporation to recover an advancement of expenses
pursuant to the terms of an undertaking the Corporation shall be
entitled to recover such expenses upon a final adjudication that, the
indemnitee has not met the applicable standard of conduct set forth in
the Delaware General Corporation Law. Neither the failure of the
Corporation (including its Board of Directors, independent legal
counsel, or its stockholders) to have made a determination prior to the
commencement of such suit that indemnification of the indemnitee is
proper in the circumstances because the indemnitee has met the
applicable standard of conduct set forth in the Delaware General
Corporation Law, nor an actual determination by the Corporation
(including its Board of Directors, independent legal counsel, or its
stockholders) that the indemnitee has not met such applicable standard
of conduct, shall create a presumption that the indemnitee has not met
such applicable standard of conduct or, in the case of such a suit
brought by the indemnitee, be a defense to such suit. In any suit
brought by the indemnitee to enforce a right hereunder, or by the
Corporation to recover an advancement of expenses pursuant to the terms
of an undertaking, the burden of proving that the
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indemnitee is not entitled to be indemnified or to such advancement of
expenses under this Section or otherwise shall be on the Corporation.
(D) The rights to indemnification and to the advancement of expenses
conferred in this Section shall not be exclusive of any other right
which any person may have or hereafter acquire under any statute, this
Certificate of Incorporation, by-law, agreement, vote of stockholders
or disinterested directors or otherwise.
(E) The Corporation may maintain insurance, at its expense, to protect
itself and any director, officer, employee or agent of the Corporation
or another corporation, partnership, joint venture, trust or other
enterprise against any expense, liability or loss, whether or not the
Corporation would have the power to indemnify such person against such
expense, liability or loss under the Delaware General Corporation Law.
(F) The Corporation may, to the extent authorized from time to time by
the Board of Directors, grant rights to indemnification and to the
advancement of expenses, to any agent of the Corporation to the fullest
extent of the provisions of this Article with respect to the
indemnification and advancement of expenses of directors, officers and
employees of the Corporation.
TWELFTH. (A) The Board of Directors shall consist of not less than five
(5) nor more than fifteen (15) members and shall be divided into three
classes as nearly equal in number as possible. At the annual meeting of
stockholders in 1987, the directors of one class shall be elected for a
term of one year, the directors of the second class shall be elected
for a term of two years, and the directors of the third class shall be
elected for a term of three years. At each annual meeting of the
stockholders after the 1988 annual meeting, the successors of the
directors of the class whose terms expire in that year shall be elected
to hold office for a term of three years, so that the term of office of
one class of directors shall expire in each year.
(B) Vacancies in the Board of Directors may be filled by a vote of
three of the directors then in office, although less than a quorum.
Directors so elected shall hold office until he next election of the
class for which such Directors shall have been chosen and until their
successors shall have been elected and qualified.
3. The aforesaid amendment was duly adopted in accordance with
the applicable provisions of Section 242 and 245 of the General
Corporation Law of the State of Delaware.
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IN WITNESS WHEREOF, the foregoing is executed by the Vice President of
the Corporation and attested by the Assistant Secretary of the Corporation, this
6th day of March, 1987.
THE CATO CORPORATION
By: /s/ Alan E. Wiley
-----------------------------------
Alan E. Wiley
Senior Executive Vice President
Secretary
Chief Financial and Administrative Officer
ORIGINAL CERTIFICATE OF INCORPORATION FILED MARCH 28, 1946
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EXHIBIT 4.2
STATE OF DELAWARE
BY-LAWS
OF
THE CATO CORPORATION
INDEX
ARTICLE I
OFFICES
Section 1. Registered Office
Section 2. Other Offices
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Location
Section 2. Annual Meeting
Section 3. Stockholder Nominations
Section 4. Notice and Business to be Conducted
Section 5. Stock Ledger
Section 6. Special Meetings
Section 7. Notice of Special Meetings
Section 8. Business at Special Meeting
Section 9. Quorum
Section 10. Vote
Section 11. Proxies
Section 12. Action Without Meeting
ARTICLE III
DIRECTORS
Section 1. Number
Section 2. Vacancies
Section 3. Powers
Section 4. Chairman of Board
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MEETINGS OF THE BOARD OF DIRECTORS
Section 5. Location
Section 6. Regular Meetings
Section 7. Special Meetings
Section 8. Quorum
Section 9. Action Without Meeting
Section 10. Meeting by Conference Telephone
COMMITTEES OF DIRECTORS
Section 11. Committees
COMPENSATION OF DIRECTORS
Section 12. Compensation
ARTICLE IV
NOTICES
Section 1. Writing
Section 2. Waiver
ARTICLE V
OFFICERS
Section 1. Officers
Section 2. Election
Section 3. Other Officers
Section 4. Salaries
Section 5. Term
THE PRESIDENT
Section 6. Duties
Section 7. Powers
THE VICE-PRESIDENTS
Section 8. Duties
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THE SECRETARY
Section 9. Duties
Section 10. Assistant Secretaries
THE TREASURER AND ASSISTANT TREASURERS
Section 11. Duties
Section 12. Disbursement
Section 13. Bond
Section 14. Assistant Treasurer
CONTROLLER
Section 15. Duties
OFFICIALS AND AGENTS
Section 16. Officials and Agents
ARTICLE VI
CERTIFICATES OF STOCK
Section 1. Certificates
Section 2. Facsimile Signatures
Section 3. Lost Certificate
Section 4. Transfers of Stock
Section 5. Closing of Transfer Books
Section 6. Registered Stockholders
ARTICLE VII
RIGHT OF FIRST REFUSAL ON ESOP STOCK
ARTICLE VIII
GENERAL PROVISIONS
Section 1. Dividends
Section 2. Reserves
Section 3. Annual Statement
Section 4. Checks
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Section 5. Fiscal Year
Section 6. Seal
ARTICLE IX
AMENDMENTS
Section 1. Amendments
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STATE OF DELAWARE
BY-LAWS
OF
THE CATO CORPORATION
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office in Delaware shall
be in the City of Wilmington, County of New Castle, State of Delaware.
Section 2. Other Offices. The corporation may also have offices at such
other places both within and without the State of Delaware as the board of
directors may from time to time determine or the business of the corporation may
require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Location. Meetings of stockholders for any purpose may be
held at such time and place, within or without the State of Delaware, as shall
be stated in the notice of the meeting or in a duly executed waiver of notice
thereof.
Section 2. Annual Meeting. The annual meeting of stockholders shall be
held on such day in each year not earlier than March 10 nor later than June 15
and at such hour as shall be fixed by the board of directors. At such annual
meeting the stockholders shall elect by plurality vote the successors of the
class of directors whose term expires at such meeting for a term expiring at the
annual meeting of stockholders held in the third year following the year of
their election, and shall transact such other business as may have been properly
brought before the meeting in accordance with Section 4 of this Article II.
Section 3. Stockholder Nominations. Only persons who are nominated in
accordance with the procedures set forth in this Section 3 shall be eligible for
election as directors. Nominations of persons for election to the board of
directors of the corporation may be made at a meeting of stockholders by or at
the direction of the board of directors or by any stockholder of the corporation
entitled to vote for the election of directors at the meeting who complies with
the notice procedures set forth in this Section 3. Such nominations, other than
those made by or at the direction of the board of directors, shall be made
pursuant to timely notice in writing to the Secretary of the corporation. To be
timely, a stockholder's notice shall be delivered to or mailed and received at
the principal executive offices of the corporation not later than (i) with
respect to an election to be held at an annual meeting of stockholders, ninety
days prior to the anniversary date of the immediately preceding annual meeting,
and (ii) with respect to an election to be held at a special meeting of
stockholders for the election the date on which
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notice of such meeting is first given to stockholders. Such stockholder's notice
shall set forth (a) as to each person whom the stockholder proposes to nominate
for election or re-election as a director, (i) the name, age, business address
and residence address of such person, (ii) the principal occupation or
employment of such person, (iii) the class and number of shares of the
corporation which are beneficially owned by such person and (iv) any other
information relating to such person that is required to be disclosed in
solicitations of proxies for election of directors, or is otherwise required, in
each case pursuant to Regulation 14A under the Securities Exchange Act of 1934,
as amended (including without limitation such persons' written consent to being
named in the proxy statement as a nominee and to serving as a director if
elected); and 9b) as to the stockholder giving the notice (i) the name and
address, as they appear on the corporation's books, of such stockholder and (ii)
the class and number of shares of the corporation which are beneficially owned
by such stockholder. At the request of the board of directors any person
nominated by the board of directors for election as a director shall furnish to
the Secretary of the corporation that information required to be set forth in a
stockholder's notice of nomination which pertains to the nominee. No person
shall be eligible for election as a director of the corporation unless nominated
in accordance with the procedures set forth in this Section 3. The Chairman of
the meeting shall, if the facts warrant, determine and declare to the meeting
that a nomination was not made in accordance with the procedures prescribed by
the by-laws, and if he should so determine, he shall so declare to the meeting
and the defective nomination shall be disregarded.
Section 4. Notice and Business to be Conducted. Written notice of the
annual meeting shall be given to each stockholder entitled to vote thereat at
least 10 but not more than 60 days before the date of the meeting.
At an annual meeting of the stockholders, only such business shall be
conducted as shall have been properly brought before the meeting. To be properly
brought before an annual meeting business must be (a) specified in the notice of
meeting (or any supplement thereto) given by or at the direction of the board of
directors, (b) otherwise properly brought before the meeting by or at the
direction of the board of directors, or (c) otherwise properly brought before
the meeting by a stockholder. For business to be properly brought before an
annual meeting by a stockholder, the stockholder must have given timely notice
thereof in writing to the Secretary of the corporation. To be timely, a
stockholder's notice must be delivered to or mailed and received at the
principal executive offices of the corporation, not later than ninety days prior
to the anniversary date of the immediately preceding annual meeting, A
stockholder's notice to the Secretary shall set forth as to each matter the
stockholder proposes to bring before the annual meeting (a) a brief description
of the business desired to be brought before the annual meeting and the reasons
for conducting such business at the annual meeting, (b) the name and address, as
they appear on the corporation's books, of the stockholder proposing such
business, (c) the class and number of shares of the corporation which are
beneficially owned by the stockholder, and (d) any material interest of the
stockholder in such business. Notwithstanding anything in the by-laws to the
contrary, no business shall be conducted at any annual meeting except in
accordance with the procedures set forth in this section. The Chairman of the
annual meeting shall, if the facts warrant, determine and declare to the meeting
that business was not properly brought before the
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meeting and in accordance with the provisions of this section, and if he should
so determine, he shall so declare to the meeting and any such business not
properly brought before the meeting shall not be transacted.
Section 5. Stock Ledger. The officer who has charge of the stock ledger
of the corporation shall prepare and make, at least ten days before every
election of directors, a complete list of the stockholders entitled to vote at
said election, arranged in alphabetical order, showing the address of and the
number of shares registered in the name of each stockholder. Such list shall be
open to the examination of any stockholder, during ordinary business hours, for
a period of at least ten days prior to the election, either at a place within
the city, town or village where the election is to be held and which place shall
be specified in the notice of the meeting, or, if not specified, at the place
where said meeting is to be held, and election during the whole time thereof,
and subject to the inspection of any stockholder who may be present.
Section 6. Special Meetings.Special meetings of the stockholders, for
any purpose or purposes, unless otherwise prescribed by statute or by the
certificate of incorporation, may be called by the president and shall be called
by the president or secretary at the request in writing of a majority of the
board of directors, or at the request in writing of stockholders owning shares
of the corporation's capital stock entitled to a majority of the total number of
votes entitled to be cast by the entire capital stock of the corporation issued
and outstanding and entitled to vote. Such request shall state the purpose or
purposes of the proposed meeting.
Section 7. Notice of Special Meeting.Written notice of a special
meeting of stockholders, stating the time, place and purpose thereof, shall be
given in accordance with section 222 of the General Corporation Law of the State
of Delaware to each stockholder entitled to vote thereat, at least then days
before the date fixed for the meeting.
Section 8. Business at Special Meeting. Business transacted at any
special meeting of stockholders shall be limited to the purposes stated in the
notice.
Section 9. Quorum. The holders of a majority of the total voting power
of the capital stock of the corporation issued and outstanding and entitled to
vote thereat, present in person or represented by proxy, shall constitute a
quorum at all meetings of the stockholders for the transaction of business
except as otherwise provided by statute or by the certificate of incorporation.
If, however, such quorum shall not be present or represented at any meeting of
the stockholders, the stockholders entitled to vote thereat, present in person
or represented by proxy, shall have the power to adjourn the meeting from time
to time, without notice other than announcement at the meeting, until a quorum
shall be present or represented. At such adjourned meeting at which a quorum
shall be present or represented, any business may be transacted which might have
been transacted at the meeting as originally noticed.
Section 10. Vote. When a quorum is present at any meeting, the vote of
a majority of the votes to which the holders of the stock having voting power,
present in person or by proxy, are entitled shall decide any question brought
before such meeting, unless the question is one
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upon which by express provision of statute or of the certificate of
incorporation, a different vote is required in which case such express provision
shall govern and control the decision of such question.
Section 11. Proxies. Each stockholder shall at every meeting of the
stockholders be entitled in person or by proxy to the number of votes provided
for in the corporation's Certificate of Incorporation (or in a resolution of the
board of directors fixing the powers, designations, preferences and relative,
participating, optional or other special rights of a particular series of stock
within any class thereof) for each share of the corporation's capital stock
having voting power held by such stockholder, but no proxy shall be voted on
after three years from its date, unless the proxy provides for a longer period
and, except where the transfer books of the corporation have been closed or a
date has been fixed as a record date for determination of its stockholders
entitled to vote, no share of stock shall be voted at any election for directors
which has been transferred on the books of the corporation within twenty days
next preceding such election of directors. A duly executed proxy shall be
irrevocable if it states that it is irrevocable and if, and only as long as, it
is coupled with an interest sufficient in law to support an irrevocable power. A
stockholder may revoke any proxy which is not irrevocable by attending the
meeting and voting in person or by filing an instrument in writing revoking the
proxy or another duly executed proxy bearing a later date with the Secretary of
the corporation. Voting at meetings of stockholders need not be by written
ballot and need not be conducted by inspectors unless the holders of a majority
of the outstanding shares of all classes of stock entitled to vote there on
present in person or by proxy at such meeting shall so determine.
Section 12. Action Without Meeting. Whenever the vote of stockholders
at a meeting thereof is required or permitted to be taken in connection with any
corporate action by any provisions of the statutes or of the certificate of
incorporation, the meeting and vote of stockholders may be dispensed with if a
consent in writing, setting forth the action so taken, shall be signed by the
holders of outstanding stock having not less than the minimum number of votes
that would be necessary to authorize or take such action at a meeting at which
all shares entitled to vote thereon were present and voted. Prompt notice of the
taking of the corporate action without a meeting by less than unanimous written
consent shall be given to those stockholders who have not consented in writing.
ARTICLE III
DIRECTORS
Section 1. Number. The number of directors which shall constitute the
whole board shall be fixed from time to time by resolution of the board of
directors and shall not be less than 5 nor more than 15. The directors shall be
elected at the annual meeting of the stockholders, except as provided in Section
2 of this Article, and each director elected shall hold office until his
successor is elected and qualified. Directors need not be stockholders.
Section 2. Vacancies. Vacancies and newly created directorships
resulting from any increase in the authorized number of directors may be filled
by a majority of the directors then
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in office, though less than a quorum. Any directors elected in accordance with
the preceding sentence shall hold office for the remainder of the full term of
the class of directors in which the directorship was created or the vacancy
occurred and until his successor is duly elected and shall qualify, unless
sooner displaced. The Chairman of the Board, at his discretion, may place a
newly elected Board Member, or a Director filling a vacancy, into class other
than the class of Directors in which the directorship was created or the vacancy
occurred.
Section 3. Powers. The business of the corporation shall be managed by
its board of directors which may exercise all such powers of the corporation and
do all such lawful acts and things as are not by statute or by the certificate
of incorporation or by these by-laws directed or required to be exercised or
done by the stockholders.
Section 4. Chairman of Board. There shall be a Chairman and a Vice
Chairman of the Board of Directors elected by the directors from their number at
the board's first meeting after the annual meeting of stockholders. The Chairman
shall preside at all meetings of the board of directors and perform such other
duties as may be directed by the board. He shall, in the absence or disability
of the president, perform the duties and exercise the powers of the president,
and shall perform such other duties as the board shall assign. In the absence of
the Chairman, the Vice Chairman of the Board shall preside at a meeting of the
board of directors.
MEETINGS OF THE BOARD OF DIRECTORS
Section 5. Location. The board of directors of the corporation may hold
meetings, both regular and special, either within or without the State of
Delaware.
Section 6. Regular Meetings.There shall be regular meetings of the
board, which may be held on such dates and without notice or upon such notice as
the board may from time to time determine. Regular meetings shall be held at the
principal office of the corporation within the State of North Carolina or at
such other places either within or without the state of North Carolina and at
such specific time as may be fixed by the board from time to time. There shall
also be a regular meeting of the board, which may be held without notice or upon
such notice as the board may from time to time determine, after the annual
meeting of the stockholders.
Section 7. Special Meetings.Special meetings of the board may be called
by the Chairman of the Board or the president on not less than two, or, in the
case of notice given by mail, not less than three days' notice to each director
either personally or by mail or by telegram; special meetings shall be called by
the Chairman of the Board, the president or secretary in like manner and on like
notice on the written request of four directors.
Section 8. Quorum. At all meetings of the board a majority of the
directors shall constitute a quorum for the transaction of business and the act
of a majority of the directors present at any meeting at which there is a quorum
shall be the act of the board of directors, except as may be otherwise
specifically provided by statute or by the certificate of incorporation or these
by-laws. If a quorum shall not be present at any meeting of the board of
directors the directors
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present thereat may adjourn the meeting from time to time, without notice other
than announcement at the meeting, until a quorum shall be present.
Section 9. Action Without Meeting. Unless otherwise restricted by the
certificate of incorporation or these by-laws, any action required or permitted
to be taken at any meeting of the board of directors or of any committee thereof
may be taken without a meeting, if prior to such action a written consent
thereto is signed by all members of the board or of such committee as the case
may be, and such written consent is filed with the minutes of proceeding of the
board or committee.
Section 10. Meeting by Conference Telephone. Unless otherwise
restricted by the certificate of incorporation, members of the board of
directors or any committee designated by the board may participate in the
meeting of the board or committee by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other and such participation in a meeting shall constitute
presence in person at such meeting.
COMMITTEES OF DIRECTORS
Section 11. Committees. The board may designate from among its members
an Executive Committee, or a Finance Committee and other committees, each
consisting of one or more directors. Each such committee shall have all the
authority of the board to the extent provided in such resolution, except as
limited by law. No such committee shall exercise its authority in a manner
inconsistent with any action, direction, or instruction of the board.
The board may appoint a Chairman of the Executive Committee, the
Finance Committee and of any other committees who shall preside at meetings of
their respective committees. The board may fill any vacancy in any committee and
may designate one or more directors as alternate members of such committee, who
may replace any absent member or members at any meeting of such committee. Each
such committee shall serve at the pleasure of the board, but in no event beyond
its first meeting following the annual meeting of the stockholders.
All acts done and powers conferred by the Executive Committee or other
committee pursuant to the foregoing authorization shall be deemed to be and may
be certified as being done or conferred under authority of the board.
A record of the proceedings of the Executive committee and any other
committee shall be kept and submitted at the next regular meeting of the board.
At least one-third but not less than two of the members of any
committee having more than two members shall constitute a quorum for the
transaction of business by such committee, and the vote of a majority of the
members present at the time of the vote, if a quorum is present at such time,
shall be the act of the committee. If a committee shall have only two members, a
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quorum shall not be present for the transaction of business unless both members
are present at the time of the vote.
If a committee or the board shall establish regular meetings of any
committee, such meetings may be held without notice or upon such notice as the
committee may from time to time determine. Notice of the time and place of
special meetings of any committee shall be given to each member of the committee
in the same manner as in the case of special meetings of the board. Notice of a
meeting need not be given to any member of a committee who signs a waiver of
notice whether before or after the meeting, or who attends the meeting without
protesting, prior thereto or at its commencement, the lack of notice to him.
Except as otherwise provided in these by-laws, each committee shall adopt its
own rules of procedure.
COMPENSATION OF DIRECTORS
Section 13. Compensation. The directors may be paid their expenses, if
any, of attendance at each meeting of the board of directors and may be paid a
fixed sum for attendance at each meeting of the board of directors or a stated
salary as director. No such payment shall preclude any director from serving the
corporation in any other capacity and receiving compensation therefor. Members
of special or standing committees may be allowed like compensation for attending
committee meetings.
ARTICLE IV
NOTICES
Section 1. Writing. Notices to directors and stockholders shall be in
writing and delivered personally or mailed to the directors or stockholders at
their addresses appearing on the books of the corporation. Notice to directors
may also be given by telegram.
Section 2. Waiver. Whenever any notice is required to be given under
provisions of the statutes or of the certificate of incorporation or of these
by-laws, a waiver thereof in writing, signed by the person or persons entitled
to said notice, whether before or after the time stated therein, shall be deemed
equivalent thereto.
ARTICLE V
OFFICERS
Section 1. [See attached amendment].
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by the same person, except the offices of President and Secretary or President
and Assistant Secretary.
Section 2. Election. The board of directors at its first meeting after
each annual meeting of stockholders shall choose a president from among the
directors, and shall choose a secretary and a treasurer, and may choose one or
more vice presidents, none of whom need be a member of the board.
Section 3. Other Officers. The board of directors may appoint such
other officers and agents as it shall deem necessary who shall hold their
offices for such terms and shall exercise such powers and perform such duties as
shall be determined from time to time by the board.
Section 4. Salaries. The salaries of all officers and agents of the
corporation shall be fixed by the board of directors.
Section 5. Term. The officers of the corporation shall hold office
until their successors are chosen and qualify. Any officer elected or appointed
by the board of directors may be removed at any time with or without cause by
the affirmative vote of a majority of the board of directors. Any officer may
resign at any time by giving written notice thereof to the president or to the
board, or by retiring or by leaving the employ of the corporation (without being
employed by a subsidiary or affiliate) and any such action shall take effect as
a resignation without necessity of further action. any vacancy occurring in any
office of the corporation shall be filled by the board of directors.
THE PRESIDENT
Section 6. Duties. The president shall be the chief executive officer
of the corporation, shall preside at all meetings of the stockholders and the
board of directors, shall have general and active management of the business of
the corporation and shall see that all orders and resolutions of the board of
directors are carried into effect. He shall be ex officio a member of all
standing committees and, in the absence of the Chairman and the Vice Chairman of
the Board, shall preside at all meetings of the stockholders and directors.
Except as otherwise provided by these by-laws or any statute or regulation, the
president shall have the authority to assign duties to other officers, and
employees and agents of the corporation, including the authority to designate
other officers to execute instruments on behalf of the corporation without
obtaining a resolution therefor from the board of directors.
Section 7. Powers. He shall execute bonds, mortgages and other
contracts requiring a seal, under the seal of the corporation, except where
required or permitted by law to be otherwise signed and executed and except
where the signing and execution thereof shall be expressly delegated by the
board of directors to some other officer or agent of the corporation.
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THE VICE PRESIDENTS
Section 8. Duties. The vice president, or if there shall be more than
one, the vice presidents, in the order determined by the board of directors,
shall, in the absence or disability of the president, perform the duties and
exercise the powers of the president and shall perform such other duties and
have such other powers as the board of directors may from time to time
prescribe.
THE SECRETARY
Section 9. Duties. The secretary shall attend all meetings of the board
of directors and all meetings of the stockholders and record all the proceedings
of the meetings of the corporation and of the board of directors in a book to be
kept for that purpose and shall perform like duties for the standing committees
when required. He shall have charge of the record of stockholders required by
law, which may be kept by any transfer agent or agents under his direction. he
shall give, or cause to be given, notice of all meetings of the stockholders and
special meetings of the board of directors, and shall perform such other duties
as may be prescribed by the board of directors or president, under whose
supervision he shall be. He shall keep in safe custody the seal of the
corporation and, when authorized by the board of directors, affix the same to
any instrument requiring it and, when so affixed, it shall be attested by his
signature or by the signature of an assistant secretary.
Section 10. Assistant Secretaries. The assistant secretary, of if there
be more than one, the assistant secretaries in the order determined by the board
of directors, shall, in the absence or disability of the secretary, perform the
duties and exercise the powers of the secretary and shall perform such other
duties and have such other powers as the board of directors may from time to
time prescribe.
THE TREASURER AND ASSISTANT TREASURERS
Section 11. Duties. The treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the corporation and shall
deposit all moneys and other valuable effects in the name and to the credit of
the corporation in such depositories as may be designated by the board of
directors.
Section 12. Disbursement. He shall disburse the funds of the
corporation as may be ordered by the board of directors, taking proper vouchers
for such disbursements, and shall render to the president and the board of
directors, at its regular meetings, or when the board of directors so requires,
an account of all his transactions as treasurer and of the financial condition
of the corporation.
Section 13. Bond. If required by the board of directors, he shall give
the corporation a bond (which shall be renewed every six years) in such sum and
with such surety or sureties as shall be satisfactory to the board of directors
for the faithful performance of the duties
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of his office and for the restoration to the corporation, in case of his death,
resignation, retirement or removal from office, of all books, appears, vouchers,
money and other property of whatever kind in his possession or under his control
belong to the corporation.
Section 14. Assistant Treasurer. The assistant treasurer, or if there
shall be more than one, the assistant treasurers in the order determined by the
board of directors, shall, in the absence or disability of the treasurer,
perform the duties and exercise the powers of the treasurer and shall perform
such other duties and have such other powers as the board of directors may from
time to time prescribe.
CONTROLLER
Section 15. Duties. The Controller shall be the chief accounting
officer of the corporation and shall have control of all its books of account.
He shall see that correct and complete books and records of account are kept as
required by law, showing fully, in such form as he shall prescribe, all
transactions of the corporation, and he shall require, keep and preserve all
vouchers relating thereto for such period as may be necessary.
The Controller shall render periodically such financial statements and
such other reports relating to the corporation's business as may be required by
the president or the board. He shall generally perform all duties appertaining
to the office of controller of a corporation.
OFFICIALS AND AGENTS
Section 16. Officials and Agents. The president or his delegate may
appoint such officials and agents of the corporation as the conduct of its
business may require and assign to them such titles, powers, duties and
compensation as he shall see fit and may remove or suspend or modify such
titles, powers, duties or compensation at any time with or without cause.
ARTICLE VI
CERTIFICATES OF STOCK
Section 1. Certificates. Every holder of stock in the corporation shall
be entitled to have a certificate, signed by, or in the name of the corporation
by, the president or a vice president and the treasurer or an assistant
treasurer, or the secretary or an assistant secretary of the corporation,
certifying the number of shares owned by him in the corporation. If the
corporation shall be authorized to issue more than one class of stock, or more
than one series of any class, the designations, preference and relative,
participating, optional or other special rights of each class of stock or series
thereof and the qualifications, limitations or restrictions of such preferences
and/or rights shall be set forth in full or summarization on the face or the
back of the certificate which the corporation shall issue to represent such
class of stock; provided, however, that except as otherwise provided in Section
202 of the General Corporation Law of Delaware, in lieu of the foregoing
requirements, there may be set forth on the face or back of the certificate
which the corporation shall issue to present such class or series of stock, a
statement that the
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corporation will furnish without charge to each stockholder who so requests, a
copy of the designations, preferences and relative, participating, option or to
her special rights of each class of stock or series thereof and the
qualifications, limitations or restrictions of such preferences and/or rights.
Section 2. Facsimile Signatures. Where a certificate is signed (1) by a
transfer agent or an assistant transfer agent or (2) by a transfer clerk acting
on behalf of the corporation and a registrar, the signature of any such
president, vice president, treasurer, assistant treasurer, secretary or
assistant secretary may be facsimile. In case any officer or officers who have
signed or whose facsimile signature or signatures have been use don any such
certificate or certificates shall cease to be such officer or officers of the
corporation, whether because of death, resignation or otherwise, before such
certificate or certificates have been delivered by the corporation, such
certificate or certificates may nevertheless be adopted by the corporation and
be issued an delivered as though the person or persons who signed such
certificate or certificates or whose facsimile signature or signatures have been
used thereon had not ceased to be such officer or officers of the corporation.
Section 3. Lost Certificate.The board of directors may direct a new
certificate or certificates to be issued in place or any certificate or
certificates theretofore issued by the corporation alleged to have been lost or
destroyed, upon the making of an affidavit of the fact by the person claiming
the certificate of stock to be lost or destroyed. When authorizing such issue of
a new certificate or certificates, the board of directors may, in its discretion
and as a condition precedent to the issuance thereof, require the owner of such
lost or destroyed certificate or certificates, or his legal representative, to
advertise the same in such manner as it shall require and/or to give the
corporation a bond in such sum as it may direct as indemnity against any claim
that may be made against the corporation with respect to the certificate alleged
to have been lost or destroyed.
Section 4. Transfers of Stock. Upon surrender to the corporation or the
transfer agent of the corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books.
Section 5. Closing of Transfer Books.The board of directors may close
the stock transfer books of the corporation for a period not exceeding fifty
days preceding the date of any meeting of stockholders or the date for payment
of any dividend or the date for the allotment of rights or the date when any
change or conversion or exchange of capital stock shall go into effect or for a
period of not exceeding fifty days in connection with obtaining the consent of
stockholders for any purpose. In lieu of closing the stock transfer books as
aforesaid, the board of directors may fix in advance a date, not exceeding fifty
days preceding the date of any meeting of stockholders, or the date for the
payment of any dividend, or the date for the allotment of rights, or the date
when any change or conversion or exchange of capital stock shall go into effect,
or a date in connection with obtaining such consent, as a record date for the
determination
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of the stockholders entitled to notice of, and to vote at, any such meeting, and
any adjournment thereof, or entitled to receive payment of any such dividend, or
to any such allotment of rights, or to exercise the rights in respect of any
such change, conversion or exchange of capital stock, or to give such consent,
and in such case such stockholders and only such stockholders as shall be
stockholders of record on the date so fixed shall be entitled to such notice of,
or to receive payment of such dividend, or to receive such allotment of rights,
or to exercise such rights, or to give such consent, as the case may be
notwithstanding any transfer of any stock on the books of the corporation after
any such record date fixed as aforesaid.
Section 6. Registered Stockholders. The corporation shall be entitled
to recognize the exclusive right of a person registered on its books as the
owner of shares to receive dividends, and to vote as such owner, and to hold
liable for calls and assessments a person registered on its books as the owner
of shares, and shall not be bound to recognize any equitable or other claim to
or interest in such share or shares on the part of any other person, whether or
not it shall have express or other notice thereof, except as otherwise provided
by the laws of Delaware.
ARTICLE VII
RIGHT OF FIRST REFUSAL ON ESOP STOCK
All shares of stock of the corporation distributed by The Cato
Corporation employee Stock Ownership Trust (the "Trust") shall be subject to a
right of first refusal as follows:
Prior to any transfer of any such shares to a prospective third party
transferee by the holder of the shares, those shares must first be offered for
sale by written offer made concurrently to the Trust and to the corporation upon
the same terms and at the same price as offered by or to the prospective third
party transferee. Any such offer to the Trust and the corporation shall disclose
the name of the prospective third party transferee and the price and terms
offered by or to the transferee. The corporation shall have the first right to
purchase all or part of the shares; to the extent the corporation shall not
accept the offer to sell, the Trust may purchase all or part of the remaining
shares. an acceptance by the corporation or the Trust of any such offer must be
made in writing within 60 days following receipt of the offer by the
corporation.
If the offer is not accepted by the corporation, the Trust, or both,
then the proposed transfer may be completed within 6 months following receipt of
the offer by the corporation but only to the same prospective third party
transferee and only upon the same terms and at the same price as originally
offered to or by that prospective third party transferee. If the transfer is not
competed within 6 months as described, the holder of the shares must comply once
again with the procedures described in this Article VII before making any
transfer of the shares.
The right provided in this Article VII shall apply to all shares
distributed by the Trust, whether such shares are held by a participant in the
Employee Stock Ownership Plan, his beneficiary or other person to whom such
shares may have been distributed by the Trustee (or by any transferee or
successor transferee of any of the foregoing unless the Trust and the
corporation
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had failed to exercise any earlier right of first refusal with respect to such
shares and such shares had been transferred to the prospective transferee in
accordance with this Article VII). Unless the corporation shall waive its rights
hereunder, a suitable legend regarding this right of first refusal shall be
printed on each share certificate subject to such right, and the board of
directors of the corporation may provide from time to time for such reasonable
rules designed to facilitate the administration of such right as it shall deem
appropriate.
The corporation and the Trust may in any instance waive the right of
refusal granted to the corporation or the Trust by this Article VII. Any such
waiver shall be made by a resolution of the board of directors directing that
the legend referred to above shall not be included on any share certificates to
be distributed by the Trust, and any such shares to which such direction applies
shall thereafter be free forever of the first right of refusal contained in this
Article VII.
ARTICLE VIII
GENERAL PROVISIONS
Section 1. Dividends. Dividends upon the capital stock of the
corporation, subject to the provisions of the certificate of incorporation, if
any, may be declared by the board of directors at any regular or special
meeting, pursuant to law. Dividends may be paid in cash, in property, or in
shares of the capital stock, subject to the provisions of the certificate of
incorporation.
Section 2. Reserves. Before payment of any dividend, there may be set
aside out of any funds of the corporation available for dividends such sum or
sums as the directors from time to time, in their absolute discretion, think
proper as a reserve or reserves to meet contingencies, or for equalizing
dividends, or for repairing or maintaining any property of the corporation, or
for such other purpose as the directors shall think conducive to the interest of
the corporation, and the directors may modify or abolish any such reserve in the
manner in which it was created.
Section 3. Annual Statement.The board of directors shall present at
each annual meeting, and at any special meeting of the stockholders when called
for by vote of the stockholders, full and clear statement of the business and
condition of the corporation.
Section 4. Checks. All checks or demands for money and notes of the
corporation shall be signed by such officer or officers or such other person or
persons as the board of directors may from time to time designate.
Section 5. Fiscal Year. The fiscal year of the corporation shall end on
the last Saturday in January of each year.
Section 6. Seal. The corporate seal of the corporation shall consist of
two concentric circles between which is the name of the corporation and in the
center of which is
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inscribed SEAL. The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or reproduced or otherwise.
ARTICLE IX
AMENDMENTS
Section 1. Amendments. These by-laws may be altered or repealed at any
regular meeting of the stockholders or the board of directors or at any special
meeting of the stockholders or of the board of directors if notice of such
alteration or repeal be contained in the notice of such special meeting.
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RESOLUTIONS OF
THE BOARD OF DIRECTORS OF
THE CATO CORPORATION
RESOLVED, that the By-laws of The Cato Corporation (the "Corporation") be, and
the same hereby are, amended by deleting Section 1 of Article V in its entirety
and inserting in lieu thereof a new Section 1 of Article V, which shall be and
read as follows:
Section 1. Officers of the Corporation. The officers of the
Corporation shall consist of such officers as the Board of Directors
may from time to time elect, including without limitations, a Chairman
of the Board, a Chief Executive Officer, a Chief Financial Officer, a
Chief Operating Officer, a Chief Merchandising Officer, a Chief
Marketing Officer, a Vice Chairman of the Board, a president, a
Secretary, a Treasurer, and such one or more Executive Vice presidents,
Senior Vice Presidents and Vice Presidents with such vice presidential
designations, if any, as the Board may determine, and such Assistant
Vice Presidents, Assistant Secretaries, and Assistant Treasurers as the
Board of Directors may elect. Any two (2) or more of such offices may
be held by the same person, except the offices of president and
Secretary or president and Assistant Secretary.
RESOLVED FURTHER, that the Chairman and Chief Executive Officer is hereby vested
with the authority to appoint such other officers and reassign such duties as he
may deem appropriate from time to time and it is further understood that all
officers serve at discretion of the Chairman and Chief Executive Officer, and it
is understood that the Chairman and Chief Executive Officer will keep the Board
informed of any such appointments and changes at the regular board meeting.
RESOLVED FURTHER, that this amendment to the Corporation's By-laws shall be
effective as of January 28, 1993.
<PAGE> 1
EXHIBIT 4.3
Approved by Board of Directors
8/26/99
THE CATO CORPORATION
1999 INCENTIVE COMPENSATION PLAN
ARTICLE I
PURPOSE AND TERM OF PLAN
1.1 PURPOSE. The purposes of this The Cato Corporation 1999 Incentive
Compensation Plan (the "Plan") are to (1) align the interests of participating
employees of The Cato Corporation ("Cato") and its Related Companies (the
"Company") with the interests of Cato's shareholders by reinforcing the
relationship between participants' rewards and shareholder value; (2) encourage
equity ownership in Cato by participants; and (3) provide an incentive to
participants for continuous employment with the Company.
1.2 TERM. This Plan will be effective as of August 26, 1999, subject to
the Plan's approval by the shareholders of Cato at the 2000 annual shareholders
meeting. No Awards shall be exercisable or payable before such shareholder
approval of the Plan. Awards shall not be granted under this Plan after July 31,
2004.
ARTICLE II
DEFINITIONS
2.1 "1987 Plan" shall mean The Cato Corporation 1987 Non-Qualified
Stock Option Plan.
2.2 "Award" means any form of Stock Option, share of Restricted Stock
or cash bonus granted under the Plan to a Participant by the Committee.
2.3 "Base Salary" shall have the meaning set forth in Section 8.2.
2.4 "Bonus Formula" shall have the meaning set forth in Section 8.3.
2.5 "Bonus Period" means the one-year periods, or such other periods as
the Committee may select, over which the attainment of one or more Performance
Goals will be measured for purposes of determining a Participant's right to an
Award under the Bonus Award Program.
2.6 "Cato" shall have the meaning set forth in Section 1.1.
2.7 "Change in Control" of the Company means:
(a) an acquisition (other than directly from the Company) by a
Person (as defined below) (excluding the Company or an employee benefit
plan of the Company or an entity controlled by the Company's
shareholders) that results in such Person beneficially owning shares of
the Company's voting securities with total voting power exceeding the
total voting power of the Company's voting securities beneficially
owned by the current holders of the Company's Class B Common Stock and
persons who would be "Permitted Transferees" as such term is defined in
the Company's certificate of incorporation.
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Approved by Board of Directors
8/26/99
(b) a merger, consolidation or sale of all or substantially all of
the Company's assets or stock (collectively a "Business Combination")
other than a Business Combination in which the shareholders of the
Company, as a group, receive stock having fifty percent (50%) or more
of the aggregate voting power in the entity resulting from the Business
Combination.
Notwithstanding the foregoing, a transaction in which Participant is a material
participant in the acquiring Person or entity effecting the transaction shall
not constitute a Change in Control with respect to such Participant. For the
purpose of this paragraph, the term "beneficially owned" shall have the meaning
set forth in Rule l3d-3 promulgated under the Securities Exchange Act of 1934,
and the term "Person" shall have the meaning set forth in Sections 3(a)(2) and
13(d)(3) of the Exchange Act.
2.8 "Code" means the Internal Revenue Code of 1986, as amended from
time to time, including regulations thereunder and successor provisions and
regulations thereto.
2.9 "Committee" shall have the meaning set forth in Section 5.1.
2.10 "Common Stock" shall have the meaning set forth in Section 3.1
2.11 "Company" has the meaning set forth in Section 1.1.
2.12 "Covered Employee" means an Employee who is a "covered employee"
within the meaning of Section 162(m) of the Code.
2.13 "Disability" means the inability of a Participant to perform the
essential functions of the Participant's job due to injury or physical or mental
illness, which inability lasts for 60 or more days.
2.14 "Effective Date" means the date an Award is determined to be
effective by the Committee upon its grant of such Award. In the case of Stock
Options, the Effective Date shall be the date of grant.
2.15 "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, including rules thereunder and successor provisions
and rules thereto.
2.16 "Key Employee" has the meaning set forth in Article IV.
2.17 "Negative Discretion" means the discretion authorized by the Plan
to be applied by the Committee in determining the size of a Bonus Award if, in
the Committee's sole judgment, such application is appropriate. Negative
Discretion may only be used by the Committee to eliminate or reduce the size of
an Award.
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Approved by Board of Directors
8/26/99
2.18 "Participant" means any Key Employee who for a Bonus Period has
been selected to participate in the Bonus Program pursuant to Article VIII or
who has been selected for an Award of a Stock Option or Restricted Stock
pursuant to this Plan.
2.19 "Performance Criteria" means the one or more criteria that the
Committee shall select for purposes of establishing the Performance Goal(s) for
a Bonus Period. The Performance Criteria that will be used to establish such
Performance Goal(s) shall be limited to the following: net profit after taxes,
return on assets, return on shareholder's equity, return on capital, net
earnings, operating earnings (any of which may be calculated with respect to the
Company or any subsidiary or division), earnings per share and trading price of
the Common Stock.
2.20 "Performance Goal" means, for a Bonus Period, or with respect to
Restricted Stock, the one or more goals established by the Committee based upon
the Performance Criteria. The Committee is authorized at any time during the
first 25% of a Bonus Period, or at any time thereafter (but only to the extent
the exercise of such authority thereafter would not cause the Awards granted to
the Covered Employees for the Bonus Period to fail to qualify as
"performance-based compensation" under Section 162(m) of the Code), in its sole
and absolute discretion, to adjust or modify the calculation of a Performance
Goal for such Bonus Period in order to prevent the dilution or enlargement of
the rights of Participants, (a) in the event of, or in anticipation of, any
unusual or extraordinary corporate item, transaction, event or development; (b)
in recognition of, or in anticipation of, any other unusual or nonrecurring
events affecting the Company, or the financial statements of the Company, or in
response to, or in anticipation of, changes in applicable laws, regulations,
accounting principles, or business conditions; and (c) in view of the
Committee's assessment of the business strategy of the Company, performance of
comparable organizations, economic and business conditions and any other
circumstances deemed relevant.
2.21 "Plan" shall have the meaning set forth in Section 1.1.
2.22 "Related Companies" means any company during any period in which
it is a "parent company" (as that term is defined in Section 424(e) of the Code)
with respect to the Company, or a "subsidiary corporation" (as that term is
defined in Code Section 424(f) of the Code) with respect to Cato.
2.23 "Restricted Stock" means Common Stock subject to restrictions of
the type referred to in Section 6.3 awarded to a Key Employee pursuant to this
Plan.
2.24 "Restriction Period" means, with respect to an Award of Restricted
Stock, the period specified by the Committee during which the Restricted Stock
is subject to a risk of forfeiture or the Participant's rights to the Restricted
Stock are otherwise restricted.
2.25 "Retirement" means a termination of employment from the Company on
or after reaching age 65 or such other termination of employment from the
Company after age 60 specifically approved by the Committee, in its sole
discretion, as a "Retirement."
2.26 "Stock Option" means an Award granted to a Key Employee in the
form of an option to purchase Common Stock pursuant to this Plan.
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Approved by Board of Directors
8/26/99
2.27 "Trading Price" means, with respect to any day, the average of the
high and low sale prices of the Company's Common Stock, as reported on the
NASDAQ national market system (or on the primary securities exchange on which
the Common Stock is then traded).
ARTICLE III
SHARES SUBJECT TO PLAN
3.1 AVAILABLE SHARES. Shares of stock which may be issued under the
Plan shall be authorized and unissued shares of Class A and Class B common stock
of Cato ("Common Stock"). The maximum number of shares of Common Stock which may
be issued under the Plan shall be 1,000,000, subject to adjustment as set forth
in this Article III.
3.2 ADJUSTMENT TO SHARES.
(a) IN GENERAL. The provisions of this Subsection 3.2(a) are subject to
the limitation contained in Subsection 3.2(b). If there is any change in the
number of outstanding shares of Common Stock through the declaration of stock
dividends, stock splits or the like, the number of shares available for Awards,
the shares subject to any Award and the option prices or exercise prices of
Awards shall be automatically adjusted. If there is any change in the number of
outstanding shares of Common Stock through any change in the capital account of
Cato, or through a merger, consolidation, separation (including a spin-off or
other distribution of stock or property), reorganization (whether or not such
reorganization comes within the meaning of such term in Section 368(a) of the
Code) or partial or complete liquidation, the Committee shall make appropriate
adjustments in the maximum number of shares of Common Stock that may be issued
under the Plan and any adjustments and/or modifications to outstanding Awards as
it, in its sole discretion, deems appropriate. In event of any other change in
the capital structure or in the Common Stock, the Committee shall also be
authorized to make such appropriate adjustments in the maximum number of shares
of Common Stock available for issuance under the Plan and any adjustments and/or
modifications to outstanding Awards as it, in its sole discretion, deems
appropriate. If the Company effects a dissolution or liquidation of the Company
or a merger or a consolidation that involves a Change in Control of the Company,
then (i) the restrictions on any outstanding Restricted Stock will lapse and
such Restricted Stock will become unrestricted Common Stock, and (ii) each
outstanding Stock Option will terminate, provided that each optionee shall, in
such event, have the right immediately prior to such dissolution, liquidation,
merger or consolidation, to exercise his option in whole or in part without
regard to any installment or waiting period provision contained in his option.
(b) COVERED EMPLOYEES. In no event shall the Award to any Participant
who is a Covered Employee be adjusted pursuant to Subsection 3.2(a) to the
extent it would cause such Award to fail to qualify as "performance-based
compensation" under Section 162(m) of the Code.
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ARTICLE IV
ELIGIBILITY
Participants in the Plan shall be selected by the Committee from the
executive officers and other key employees of the Company who occupy responsible
managerial or professional positions and who have the capability of making a
substantial contribution to the success of the Company ("Key Employees"). In
making this selection and in determining the form and amount of awards, the
Committee shall consider any factors deemed relevant, including the individual's
functions, responsibilities, value of services to the Company and past and
potential contributions to the Company's profitability and sound growth.
ARTICLE V
PLAN ADMINISTRATION
5.1 ADMINISTRATION OF PLAN BY COMMITTEE. The Plan shall be administered
by a committee of two or more members of the Board of Directors of Cato selected
by the Board (the "Committee"), as constituted from time to time.
5.2 AUTHORITY OF COMMITTEE.
(a) The Committee shall have the authority, in its sole discretion and
from time to time, to:
(i) designate the Key Employees eligible to participate in the
Plan;
(ii) grant Awards provided in the Plan in such form and amount as
the Committee shall determine;
(iii) impose such terms, limitations, restrictions and conditions
upon any such Award as the Committee shall deem appropriate, including
but not limited to an acceleration of the vesting and lapsing of the
restrictions of such Award upon a change in control of the ownership of
Cato; and
(iv) interpret the Plan, adopt, amend and rescind rules and
regulations relating to the Plan, correct any default, supply any
omission and construe any ambiguity in the Plan, accelerate the
vesting, exercise or payment of any Award when such action would be in
the best interest of the Company and make all other determinations and
take all other action necessary or advisable for the implementation and
administration of the Plan.
(b) The Committee shall have full discretionary authority in all
matters related to the discharge of its responsibilities and the exercise of its
authority under the Plan, including without limitation its construction of the
terms of the Plan and its determination of eligibility for participation and
Awards under the Plan. The decisions and determinations of the Committee and its
action with respect to the Plan shall be final, binding and conclusive upon all
persons having or claiming to have any right or interest in or under the Plan.
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(c) No member of the Committee shall be liable for any action taken or
decision made in good faith relating to the Plan or any Award thereunder.
5.3 SECTION 162(m) OF THE CODE. With regard to all Covered Employees,
the Plan shall, for all purposes, be interpreted and construed in accordance
with Section 162(m) of the Code.
5.4 DELEGATION BY COMMITTEE. Except to the extent prohibited by
applicable law or the rules of an applicable stock exchange, the Committee may
allocate all or any portion of its responsibilities and powers to any person or
persons selected by it. Any such allocation or delegation may be resolved by the
Committee at any time.
ARTICLE VI
FORMS OF AWARDS
6.1 IN GENERAL. Awards under the Plan may be in the form of any one or
more of the following:
(a) Stock Options as described in Section 6.2;
(b) Restricted Stock, as described in Section 6.3; and
(c) Cash, as set forth in Article VIII.
6.2 STOCK OPTIONS.
(a) NON-QUALIFIED STOCK OPTIONS. Stock Options shall be issued in the
form of non-qualified stock options (Stock Options that are not intended to
qualify as incentive stock options under the provisions of Section 422 of the
Internal Revenue Code of 1986). The price at which Common Stock may be purchased
upon exercise of a Stock Option shall be not less than 100% of the Trading Price
of a share of Common Stock on the Effective Date of the Stock Option Award, or
the next preceding trading day if such date was not a trading date.
(b) TERMS AND CONDITIONS OF STOCK OPTIONS. A Stock Option shall be
exercisable in whole or in such installments and at such times as may be
determined by the Committee. All Stock Options shall expire not later than 10
years after the Effective Date of the grant. The Committee may, by way of an
award notice or otherwise, establish such other terms, conditions, restrictions,
and limitations, if any, of any Award of Stock Options, provided they are not
inconsistent with the Plan.
(c) MAXIMUM AWARD OF STOCK OPTIONS PER YEAR PER PARTICIPANT.
Notwithstanding any provision contained in the Plan to the contrary, the maximum
number of shares of Common Stock for which Stock Options may be granted under
this Plan to any Participant in any calendar year is 200,000.
(d) EXERCISE. Upon exercise, the option price of a Stock Option may be
paid in cash, shares of Common Stock, a combination of the foregoing, or such
other consideration as the Committee may deem appropriate. The Committee shall
establish appropriate methods for accepting Common Stock, whether Restricted or
unrestricted, and may impose such conditions as it deems appropriate on the use
of such Common Stock to exercise a Stock Option. Subject to Section 10.12, the
Committee may permit a Participant to elect to pay the option price upon the
exercise of a Stock Option by authorizing a third party to sell shares of Common
Stock (or a sufficient portion of the shares) acquired upon exercise of the
Stock Option and remit to the Company a sufficient portion of the sale proceeds
to pay the entire option price and any tax withholding resulting from such
exercise. The Committee may permit a Participant to satisfy any amounts required
to be withheld under the applicable Federal, state and local tax laws in effect
from time to time, by electing to have the Company withhold a portion of the
shares of Common Stock to be delivered for the payment of such taxes.
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6.3 RESTRICTED STOCK.
(a) RESTRICTED STOCK. Restricted Stock is an Award of shares of Common
Stock that is subject to a risk of forfeiture or other restriction on ownership
as may be established by the Committee at the time the Award is made.
(b) RESTRICTIONS. Each Award of Restricted Stock shall be subject to
such conditions, restrictions and contingencies as the Committee shall
determine. These may include continuous service and the achievement of
Performance Goals. The Committee may designate a single goal criterion or
multiple goal criteria for performance measurement purposes, with the
measurement based on absolute Company or business unit performance or on
performance as compared with that of other publicly-traded companies. If the
right to become vested in an Award of Restricted Stock is conditioned on the
completion of a specified period of service with the Company and the Related
Companies, without achievement of Performance Goals or other objectives being
required as a condition of the Award or the vesting thereof, then the required
period of service for vesting shall be not less than three years (subject to
acceleration of vesting, to the extent permitted by the Committee, in the event
of the Participant's death, disability, change in control or involuntary
termination).
(c) MAXIMUM AWARD OF RESTRICTED STOCK PER YEAR PER PARTICIPANT.
Notwithstanding any provision contained in the Plan to the contrary, the maximum
number of shares of Restricted Stock that may be granted under this Plan to any
Participant in any calendar year is 200,000.
ARTICLE VII
AWARDS OF STOCK OPTIONS AND RESTRICTED STOCK
7.1 GRANTS OF STOCK OPTIONS AND RESTRICTED STOCK. Subject to the
limitations set forth in Article VI, the Committee may award Stock Options and
Restricted Stock pursuant to this Plan from time to time as it shall determine.
ARTICLE VIII
CASH BONUS AWARDS
8.1 GENERAL. The Compensation Committee may establish a Performance
Goal or Goals for a Key Employee, and may award a cash bonus to such Key
Employee based on the attainment of such Performance Goal or Goals. With respect
to each Key Employee selected by the Committee to be eligible to receive a bonus
award pursuant to this Plan, the Committee will establish the relevant Bonus
Period. The entitlement of any Participant to payment of a Bonus Award for such
Bonus Period shall be decided solely in accordance with the provisions of this
Article VIII. Moreover, designation of a Key Employee as a Participant for a
particular Bonus Period shall not require designation of such Key Employee as a
Participant in any subsequent Bonus Period, and designation of one Key Employee
as a Participant shall not require designation of any other Key Employee as a
Participant in such Bonus Period or in any other Bonus Period. All of the Bonus
Awards issued under this Plan to Covered Employees are intended to qualify as
"performance-based compensation" under Section 162(m) of the Code.
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8.2 CALCULATION OF BASE SALARY. For purposes of determining the bonus
to be awarded with respect to a Bonus Period, the Participant's Base Salary for
any Bonus Period shall be the Participant's base salary as of the last day of
such Bonus Period.
8.3 PROCEDURE FOR DETERMINING AWARDS. Within the first 25% of a Bonus
Period, the Committee shall establish in writing, with respect to each
Participant, the specific Performance Criteria that will be used to establish
the Performance Goal(s) for such Bonus Period and a Bonus Formula detailing the
Bonus Award for each Participant depending on the extent to which such
Performance Goals are attained.
8.4 FORM OF PAYMENT OF BONUS AWARD. Bonus Awards shall be paid in cash.
The Committee may provide for deferred payment of all or a portion of the cash
bonus, and may further condition the right to receive deferred amounts on the
achievement of other Performance Goals, or on continued employment, or
otherwise.
8.5 PAYMENT OF AWARDS.
(a) CONDITION TO RECEIPT OF AWARDS. Except as provided in Section 8.6,
or as otherwise provided by the Compensation Committee, a Participant must be
employed by the Company on the last day of a Bonus Period and at the time of
Bonus Payment to be eligible for a Bonus Award for such Bonus Period.
(b) CERTIFICATION. Following the completion of a Bonus Period, the
Committee shall meet to review and certify in writing whether, and to what
extent, the Performance Goals for the Bonus Period have been achieved and, based
on the application of the Bonus Formula, shall calculate and certify in writing
for each Participant the Bonus Award earned for the Bonus Period.
(c) NEGATIVE DISCRETION. In determining the size of an individual Bonus
Award to be paid for a Bonus Period, the Committee may, through the use of
Negative Discretion, reduce or eliminate the amount of the Bonus Award that
would otherwise result from application of the Bonus Formula for the Bonus
Period if, in its sole discretion, such reduction or elimination is appropriate.
(d) TIMING OF AWARD PAYMENTS. Subject to any deferred payment
provisions established by the Committee pursuant to Section 8.4, the Bonus
Awards granted by the Committee for a Bonus Period shall be paid to Participants
reasonably soon after the certifications set forth in Section 8.5(b).
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8.6 TERMINATION OF EMPLOYMENT DURING BONUS PERIOD. In the event the
employment of a Participant in a Bonus Period terminates because of death,
Disability or Retirement prior to the last day of a Bonus Period, the
Participant shall receive, if Awards are payable for such Bonus Period, a pro
rata Bonus Award. The amount of the pro rata Bonus Award shall be determined by
multiplying the Bonus Award the Participant would have otherwise been paid if he
or she had been a Participant for the full Bonus Period by a fraction, the
numerator of which is the number of full months he or she was a Participant
during such Bonus Period and the denominator of which is the number of months in
the Bonus Period. For purposes of this calculation, a partial month of
participation shall: (1) be treated as a full month of participation to the
extent a Participant is a Participant in the Bonus Period for 15 or more days of
such month; and (2) not be taken into consideration to the extent the
Participant is a Participant in the Bonus Period for less than 15 days of such
month. In the event of Disability or Retirement, the pro rata Bonus Award shall
be paid directly to the Participant and, in the event of death, to the
Participant's estate.
8.7 MAXIMUM AWARD PAYABLE. Notwithstanding any provision contained in
the Plan to the contrary, the maximum Bonus Award payable to any Participant for
any Bonus Period is $1,250,000.
ARTICLE IX
TERMINATION OF EMPLOYMENT OF PARTICIPANT
9.1 TERMINATION BECAUSE OF DEATH, DISABILITY OR RETIREMENT. Except as
otherwise provided by the Committee with respect to a specific Award, if a Key
Employee's employment with the Company terminates because of death, Disability
or Retirement, then issued and outstanding Stock Options and shares of
Restricted Stock awarded to such Participant pursuant to this Plan (whether or
not then held by the Participant) shall be treated as follows:
(a) RESTRICTED STOCK. In the event of the termination of employment of
a Participant because of death, Disability or Retirement, the unexpired
Restriction Period(s) with respect to a portion (the "Retained Portion") of each
Award of Restricted Stock shall lapse, and such portion of the Restricted Stock
will become unrestricted Common Stock. With respect to each such Award of
Restricted Stock, the Retained Portion shall be a percentage of the entire
Award, such percentage to be determined by dividing (i) the number of whole
months that have elapsed from the beginning of the Restriction Period by (ii)
the number of whole months in the entire Restriction Period.
(b) STOCK OPTIONS. On the date of a Participant's termination of
employment with the Company because of death, Disability or Retirement, Stock
Options awarded to the Participant under this Plan shall remain exercisable for
a period of no more than one year after the date of such Participant's
termination (but in no event beyond the original expiration date of such Stock
Option), but otherwise shall be subject to all other restrictions and
limitations of such Stock Option.
9.2 TERMINATION FOR ANY REASON OTHER THAN DEATH, DISABILITY OR
RETIREMENT. Except as otherwise provided by the Committee with respect to a
specific Award, upon the termination of Participant's employment by reason other
than Death, Disability or Retirement, issued and outstanding Stock Options and
Stock Rights awarded to a Participant (whether or not then held by the
Participant) shall be treated as follows:
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(a) RESTRICTED STOCK. Upon a Participant's termination of employment
during an unexpired Restriction Period for any reason other than death,
Disability or Retirement, all outstanding shares of Restricted Stock awarded to
such Participant still subject to such unexpired Restriction Period shall be
forfeited by the holder.
(b) STOCK OPTIONS. If a Participant's employment with the Company
terminates for any reason other than death, Disability or Retirement, all of the
unexercised and outstanding Stock Options awarded to such Participant shall
remain exercisable for a period of up to 90 days after the Participant's
termination (but not beyond the original expiration date of such Stock Options)
to the same extent as they were exercisable on the date of Participant's
termination. The remaining portion of the Stock Option shall be forfeited by the
holder.
ARTICLE X
MISCELLANEOUS
10.1 TRANSFERABILITY. Except as provided in Section 10.2, any Award
under the Plan will be non-transferable and, accordingly, shall not be
assignable, alienable, salable or otherwise transferable by the holder other
than by a Participant by will or the laws of descent and distribution.
10.2 THIRD PARTY EXERCISES. In the event a Participant terminates
employment with the Company to assume a position with a governmental,
charitable, educational or similar non-profit institution, the Committee may
subsequently authorize a third party, including but not limited to a "blind"
trust, to act on behalf of and for the benefit of the respective Participant
with respect to any outstanding grants held by the Participant subsequent to
such termination of employment. If permitted by the Committee, a Participant may
designate a beneficiary or beneficiaries to exercise the rights of the
Participant and receive any distributions under the Plan upon the death of the
Participant.
10.3 WITHHOLDING TAXES. The Company shall be entitled to deduct from
any payment under the Plan, regardless of the form of such payment, the amount
of all applicable income and employment taxes required by law to be withheld
with respect to such payment or may require the Participant to pay to it such
tax prior to and as a condition of the making of such payment. In accordance
with any applicable administrative guidelines it establishes, the Committee may
allow a Participant to pay the amount of taxes required by law to be withheld
from an Award by withholding from any payment of Common Stock due as a result of
such Award, or by permitting the Participant to deliver to the Company shares of
Common Stock having a fair-market value (as determined by the Committee) equal
to the amount of such required withholding taxes.
10.4 AMENDMENTS TO AWARDS. The Committee may at any time amend any
unexercised, unearned, or unpaid Award, including, but not by way of limitation,
Awards earned but not yet paid, to the extent it deems appropriate; provided,
however, that any such amendment which, in the opinion of the Committee, is
adverse to the Participant shall require the Participant's consent.
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10.5 REGULATORY APPROVALS AND LISTINGS. Notwithstanding anything
contained in this Plan to the contrary, the Company shall have no obligation to
issue or deliver certificates of Common Stock evidencing any Award resulting in
the payment of Common Stock prior to (i) the obtaining of any approval from any
governmental agent which the Company shall, in its sole discretion, determine to
be necessary or advisable, (ii) the admission of such shares to listing on the
stock exchange on which the Common Stock may be listed and (iii) the completion
of any registration or other qualification of said shares under any state or
Federal law or ruling of any governmental body that the Company shall, in its
sole discretion, determine to be necessary or advisable.
10.6 NO RIGHT TO CONTINUED EMPLOYMENT OR GRANTS. Participation in the
Plan shall not give any Key Employee any right to remain in the employ of the
Company. Cato, or, in the case of employment with a Related Company, the Related
Company, reserves the right to terminate any Employee at any time. Further, the
adoption of this Plan shall not be deemed to give any Key Employee or any other
individual any right to be selected as a Participant or to be granted an Award.
10.7 AMENDMENT/TERMINATION. At any time and with or without prior
notice the Committee may suspend, terminate or amend the Plan in any manner, but
(1) no such suspension, termination or amendment may revoke or eliminate Awards
previously granted to Participants, and (2) with respect to Covered Employees,
the Committee may not without shareholder approval adopt any amendment that
would require the vote of the shareholders of Cato pursuant to Section 16 of the
Exchange Act or Section 162(m) of the Code.
10.8 NON-UNIFORM DETERMINATIONS. Under the Plan (including without
limitation determinations of the persons to receive Awards, the form, amount and
timing of such Awards, the terms and provisions of such Awards and the
agreements evidencing same) need not be uniform and may be made by it
selectively among persons who receive, or are eligible to receive, Awards under
the Plan, whether or not such persons are similarly situated.
10.9 LEAVE OF ABSENCE. The Committee shall be entitled to make such
rules, regulations and determinations as it deems appropriate under the Plan in
respect of any leave of absence taken by the recipient of any Award. Without
limiting the generality of the foregoing, the Committee shall be entitled to
determine (i) whether or not any such leave of absence shall constitute a
termination of employment within the meaning of the Plan and (ii) the impact, if
any, of any such leave of absence on Awards under the Plan theretofore made to
any Participant who takes such leave of absence.
10.10 GOVERNING LAW. The Plan shall be governed by and construed in
accordance with the laws of the State of North Carolina, except as superseded by
applicable federal law.
10.11 NO RIGHT, TITLE, OR INTEREST IN COMPANY ASSETS. No Participant
shall have any rights as a shareholder as a result of participation in the Plan
until the date of issuance of a stock certificate. To the extent any person
acquires a right to receive payments from the Company under the Plan, such
rights shall be no greater than the rights of an unsecured creditor of the
Company and the Participant shall not have any rights in or against any specific
assets of the Company. All of the Awards granted under the Plan shall be
unfunded.
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10.12 SECTION 16 OF THE EXCHANGE ACT. In order to avoid any Exchange
Act violations, the Committee may, from time to time, impose additional
restrictions upon an Award, including but not limited to, restrictions regarding
tax withholdings and restrictions regarding the Participant's ability to
exercise Awards under any broker or third-party assisted exercise program.
10.13 NO GUARANTEE OF TAX CONSEQUENCES. No person connected with the
Plan in any capacity, including, but not limited to, Cato and its Related
Companies and their directors, officers, agents and employees makes any
representation, commitment, or guarantee that any tax treatment, including, but
not limited to, Federal, state and local income, estate and gift tax treatment,
will be applicable with respect to amounts deferred under the Plan, or paid to
or for the benefit of a Participant under the Plan, or that such tax treatment
will apply to or be available to a Participant on account of participation in
the Plan.
10.14 COMPLIANCE WITH SECTION 162(m). If any provision of the Plan
would cause the Awards granted to a Covered Person not to qualify as
"performance-based compensation" under Section 162(m) of the Code, that
provision, insofar as it pertains to the Covered Person, shall be severed from,
and shall be deemed not to be a part of this Plan, but the other provisions
hereof shall remain in full force and effect.
10.15 OTHER BENEFITS. The Committee may establish uniform rules as to
the manner in which benefits received by Participants pursuant to this Plan
shall be taken into account for purposes of calculating benefits under other
benefit plans maintained by the Company.
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Exhibit 5.1
[ROBINSON, BRADSHAW & HINSON, P.A. LETTERHEAD]
PATRICK S. BRYANT
(704) 377-8366
February 3, 2000
The Cato Corporation
8100 Denmark Road
Charlotte, North Carolina 28273-5975
Ladies and Gentlemen:
We refer to the Registration Statement, as amended, of The Cato
Corporation, a Delaware corporation (hereinafter referred to as the "Company"),
filed with the Securities and Exchange Commission for the purpose of
registering under the Securities Act of 1933, as amended, up to 1,000,000 shares
of the Company's Class A and Class B Common Stock, par value $0.03-1/3 per
share (the "Shares"), that may be issued in accordance with the Company's 1999
Incentive Compensation Plan (the "Plan"). We have examined the Restated
Certificate of Incorporation and Bylaws of the Company, minutes of applicable
meetings or consent actions of the Board of Directors of the Company, and other
Company records, together with applicable certificates of public officials and
other documents that we have deemed relevant.
Based upon the foregoing and subject to the conditions set forth
below, it is our opinion that the Shares, if and when issued and sold as
contemplated by the Registration Statement, will be legally issued, fully paid
and nonassessable.
We have assumed that the Company and those persons purchasing Shares
under the Plan will have complied with the relevant requirements of the Plan.
The opinions expressed herein are contingent upon the Company's
Restated Certificate of Incorporation and Bylaws not being further amended
prior to the issuance of any Shares after the date hereof.
We hereby consent to the filing of this opinion as an exhibit to said
Registration Statement and any amendment thereto. In giving such consent, we do
not hereby admit that we are in the category of persons whose consent is
required under Section 7 of the Securities Act of 1933.
This opinion is limited to the General Corporation Law of the State of
Delaware and the federal laws of the United States, and we express no opinion
with respect to the laws of any other state or jurisdiction.
Very truly yours,
ROBINSON, BRADSHAW & HINSON, P.A.
/s/ Patrick S. Bryant
Patrick S. Bryant
PSB/jnb
<PAGE> 1
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
The Cato Corporation on Form S-8 of our report dated March 12, 1999, appearing
in the Annual Report on Form 10-K of The Cato Corporation for the year ended
January 30, 1999.
/s/ Deloitte & Touche LLP
- -------------------------
Charlotte, North Carolina
February 3, 2000
