SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
CATHERINES STORES CORPORATION
(Exact Name of Registrant as Specified in Charter)
October 22, 1998
(Date of earliest event
reported: October 1, 1998)
Tennessee 000-19372 62-1460411
(State or Other Jurisdiction of (Commission File Number) (IRS Employer
Incorporation) Identification No.)
3742 Lamar Avenue 38118
Memphis, Tennessee (Zip Code)
(Address of Principal Executive Offices)
(901) 363-3900
(Registrant's telephone number,
including area code)
N/A
(Former Name or Former Address,
if Changed Since Last Report)
<PAGE>
Item 5. Other Events.
Pursuant to discussions held during its September 2, 1998 regular joint
meeting of directors, the Board of Directors of the registrant and its
wholly-owned operating subsidiary, Catherines, Inc. (the "Subsidiary"),
unanimously approved amendments to the executive employment agreements between
the Subsidiary and each of Bernard J. Wein, David C. Forell and Stanley H.
Grossman (each, an "Executive" and collectively, the "Executives"). Messrs.
Wein, Forell and Grossman are members of the Board of Directors of
registrant and Subsidiary, and they currently serve, respectively, as the
President and Chief Executive Officer, the Executive Vice President, Chief
Financial Officer and Secretary, and the Executive Vice
President -- Merchandising, of registrant and Subsidiary.
The executive employment agreements have provided for certain lump sum
severance payments by Subsidiary to the Executives in the event of certain
terminations of employment. The amendments provide for incremental changes
in such lump sums upon a termination of their employment with Subsidiary,
either by Subsidiary other than for cause or by themselves as a result of
material adverse changes in their duties and responsibilities, within
two years following a "change of control" (as defined therein) of
Subsidiary or registrant. The lump sum payment of a multiple of the
Executive's annual salary and target bonus in effect at the time of
his termination will equal, in the case of Mr. Wein, a three times
(formerly two times) multiple and, in the case of Messrs. Forell and Grossman,
a two times (formerly one and one-half times) multiple. The amendments
also provide that the severance payments are to be increased for any
federal excise taxes imposed with respect to such payments and any federal
and state income taxes payable as a result of Subsidiary's payment of the
initial excise taxes on behalf of the Executives.
Item 7. Exhibits
1. First Amendment to Executive Employment Agreement dated as of October 1,
1998, between Catherines, Inc. and Bernard J. Wein.
2. First Amendment to Executive Employment Agreement dated as of October 1,
1998, between Catherines, Inc. and David C. Forell.
3. Second Amendment to Executive Employment Agreement dated as of October
1, 1998, between Catherines, Inc. and Stanley H. Grossman.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CATHERINES STORES CORPORATION
Date: October 21, 1998 By:
David C. Forell,
Executive Vice President
and Chief Financial Officer
<PAGE>
FIRST AMENDMENT TO
EXECUTIVE EMPLOYMENT AGREEMENT
THIS FIRST AMENDMENT TO EXECUTIVE EMPLOYMENT AGREEMENT (the "Amendment"),
dated and effective as of October 1, 1998, is made and entered into by and
between CATHERINES, INC., a Delaware corporation having its principal offices at
3742 Lamar Avenue, Memphis, Tennessee 38118 (the "Company"), and BERNARD J.
WEIN, an individual residing at 500 Carysbrook Cove, Memphis, Tennessee 38120
the "Employee").
W I T N E S S E T H:
WHEREAS, the Company and Employee are parties to an Executive Employment
Agreement dated as of May 23, 1991 (the "Employment Agreement"), pursuant to
which the Company has engaged Employee to perform executive and managerial
services for the Company; and
WHEREAS, the parties desire to amend the Employment Agreement upon the
terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements hereinafter contained, and other good and valuable consideration,
the receipt and sufficiency of all of which are hereby acknowledged, the parties
agree as follows: 1. Amendment to Employment Agreement. The Employment Agreement
is hereby amended by adding the following new Paragraph 11(d) thereto:
"(d) (1) If Employee's employment is terminated within two (2) years after
the occurrence of a "change of control" of the Company or its parent
corporation, Catherines Stores Corporation (the "Parent"), by either (i)
the Company or its successor other than for cause or (ii) the Employee
during the period beginning with the second (2nd) month and continuing
through the twenty-fourth (24th) month after any change in control, if he
determines that by reason of material adverse changes in, inter alia, his
authority, compensation, duties, managerial responsibilities or
geographical place of work, he is unable to perform the duties and
responsibilities of the position he held immediately prior to the change in
control, then the Employee shall be entitled to receive a lump sum payment,
payable within thirty (30) days after the date of such termination, equal
to (X) the sum of (A) 1/12th of his annual base salary in effect
immediately before such termination plus (B) 1/12th of 100% of his target
bonus opportunity for the fiscal year of the Company in which such
termination occurs, multiplied by (Y) the greater of (a) the number of
calendar months remaining in the term of Employee's employment hereunder
and (b) 36. In the event of such termination, the Employee shall also be
entitled to a continuation during the number of months following the date
of termination equal to the number of months determined pursuant to the
immediately preceding clause (Y) of (i) the supplemental retirement
benefits provided in accordance with Paragraph 6 hereof, and (ii) health
and insurance benefits upon the same terms and conditions as in effect at
the time ofsuch termination subject to the proviso at the end of Paragraph
11(b) above.
(2) If any excise tax is imposed pursuant to the Internal Revenue Code of
1986, as amended (the "Code") (including, without limitation, Section 4999
of the Code), or of any successor legislation (an "Excise Tax") upon any
portion of a benefit payment made to the Employee in accordance with this
Paragraph 11, the Company shall pay the initial Excise Tax and any
additional Excise Tax and federal and state income tax which arises as a
result of the Company's payment of the initial Excise Tax on behalf of the
Employee.
1
<PAGE>
(3) As used herein, the term "change in control" means (i) a person
(including, without limitation, a corporation, trust, partnership, joint
venture, limited liability company, individual or other entity) or group
of affiliated (directly or indirectly) persons becoming the owner(s)
(whether directly, indirectly, beneficially or of record) of more than
thirty-five percent (35%) of the outstanding shares of common stock of the
Company or the Parent at any time after October 1, 1998, (ii) the merger
or consolidation into, or sale of substantially all of the assets of the
Company or the Parent to, another corporation in which the Company or the
Parent, as the case may be, is not the surviving and operating
corporation, or where the stockholders of the Company or the Parent prior
to such transaction(s) do not own at least sixty-five percent (65%) of the
outstanding voting securities of the surviving corporation after such
transaction(s), or (iii) the persons who are directors of the Company or
the Parent as of October 1, 1998 cease to constitute a majority of the
Board of Directors of the Company or the Parent, as the case may be,
during any 24-month period after a transaction described in (i) or (ii) of
this Paragraph 11(d)."
2. Ratification of Employment Agreement. Except as specifically modified
hereby, all other terms, conditions and restrictions set forth in the Employment
Agreement are hereby ratified and confirmed by the Company and Employee and
shall remain in full force and effect. To the extent any of the terms of this
Amendment conflict with the terms of the Employment Agreement, the terms of this
Amendment shall govern.
3. Miscellaneous. Capitalized terms used but not otherwise defined herein
shall have the respective meanings given to such terms in the Employment
Agreement. This Amendment may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument. This Amendment shall become effective as of the
date first written above, upon the execution by each of the parties of at least
one counterpart hereof, and it shall not be necessary that any single
counterpart bear the signatures of both parties. The execution and delivery of
this Amendment by delivery of a facsimile copy bearing the facsimile signature
of a party hereto shall constitute a valid and binding execution and delivery of
this Amendment by such party, and such facsimile copies shall constitute
enforceable original documents. This Amendment shall be governed by and
construed and enforced exclusively in accordance with the laws of the State of
Tennessee, without regard to principles of conflicts of laws.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first above written.
CATHERINES, INC.
By:
----------------------
David C. Forell,
Executive Vice President
--------------------------
Bernard J. Wein
2
<PAGE>
FIRST AMENDMENT TO
EXECUTIVE EMPLOYMENT AGREEMENT
THIS FIRST AMENDMENT TO EXECUTIVE EMPLOYMENT AGREEMENT (the "Amendment"),
dated and effective as of October 1, 1998, is made and entered into by and
between CATHERINES, INC., a Delaware corporation having its principal offices at
3742 Lamar Avenue, Memphis, Tennessee 38118 (the "Company"), and DAVID C.
FORELL, an individual residing at 8592 Edenfield Road, Germantown, Tennessee
38138 (the "Employee").
W I T N E S S E T H:
WHEREAS, the Company and Employee are parties to an Executive
Employment Agreement dated as of May 23, 1991 (the "Employment Agreement"),
pursuant to which the Company has engaged Employee to perform executive and
managerial services for the Company; and
WHEREAS, the parties desire to amend the Employment Agreement upon the
terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements hereinafter contained, and other good and valuable consideration,
the receipt and sufficiency of all of which are hereby acknowledged, the parties
agree as follows:
1. Amendment to Employment Agreement. The Employment Agreement is hereby
amended by adding the following new Paragraph 11(d) thereto:
"(d) (1) If Employee's employment is terminated within two (2)
years after the occurrence of a "change of control" of the Company or
its parent corporation, Catherines Stores Corporation (the "Parent"),
by either (i) the Company or its successor other than for cause or (ii)
the Employee during the period beginning with the second (2nd) month
and continuing through the twenty-fourth (24th) month after any change
in control, if he determines that by reason of material adverse changes
in, inter alia, his authority, compensation, duties, managerial
responsibilities or geographical place of work, he is unable to perform
the duties and responsibilities of the position he held immediately
prior to the change in control, then the Employee shall be entitled to
receive a lump sum payment, payable within thirty (30) days after the
date of such termination, equal to (X) the sum of (A) 1/12th of his
annual base salary in effect immediately before such termination plus
(B) 1/12th of 100% of his target bonus opportunity for the fiscal year
of the Company in which such termination occurs, multiplied by (Y) the
greater of (a) the number of calendar months remaining in the term of
Employee's employment hereunder and (b) 24. In the event of such
termination, the Employee shall also be entitled to a continuation
during the number of months following the date of termination equal to
the number of months determined pursuant to the immediately preceding
clause (Y) of (i) the supplemental retirement benefits provided in
accordance with Paragraph 6 hereof, and (ii) health and insurance
benefits upon the same terms and conditions as in effect at the time of
such termination subject to the proviso at the end of Paragraph 11(b)
above.
(2) If any excise tax is imposed pursuant to the
Internal Revenue Code of 1986, as amended (the "Code") (including,
without limitation, Section 4999 of the Code), or of any successor
legislation (an "Excise Tax") upon any portion of a benefit payment
made to the Employee in accordance with this Paragraph 11, the Company
shall pay the initial Excise Tax and any additional Excise Tax and
federal and state income tax which arises as a result of the Company's
payment of the initial Excise Tax on behalf of the Employee.
(3) As used herein, the term "change in control"
means (i) a person (including, without limitation, a corporation,
trust, partnership, joint venture, limited liability company,
individual or other entity) or group of affiliated (directly or
indirectly) persons becoming the owner(s) (whether directly,
indirectly, beneficially or of record) of more than thirty-five percent
(35%) of the outstanding shares of common stock of the Company or the
1
<PAGE>
Parent at any time after October 1, 1998, (ii) the merger or
consolidation into, or sale of substantially all of the assets of the
Company or the Parent to, another corporation in which the Company or
the Parent, as the case may be, is not the surviving and operating
corporation, or where the stockholders of the Company or the Parent
prior to such transaction(s) do not own at least sixty-five percent
(65%) of the outstanding voting securities of the surviving corporation
after such transaction(s), or (iii) the persons who are directors of
the Company or the Parent as of October 1, 1998 cease to constitute a
majority of the Board of Directors of the Company or the Parent, as the
case may be, during any 24-month period after a transaction described
in (i) or (ii) of this Paragraph 11(d)."
2. Ratification of Employment Agreement. Except as specifically modified
hereby, all other terms, conditions and restrictions set forth in the Employment
Agreement are hereby ratified and confirmed by the Company and Employee and
shall remain in full force and effect. To the extent any of the terms of this
Amendment conflict with the terms of the Employment Agreement, the terms of this
Amendment shall govern.
3. Miscellaneous. Capitalized terms used but not otherwise defined herein
shall have the respective meanings given to such terms in the Employment
Agreement. This Amendment may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument. This Amendment shall become effective as of the
date first written above, upon the execution by each of the parties of at least
one counterpart hereof, and it shall not be necessary that any single
counterpart bear the signatures of both parties. The execution and delivery of
this Amendment by delivery of a facsimile copy bearing the facsimile signature
of a party hereto shall constitute a valid and binding execution and delivery of
this Amendment by such party, and such facsimile copies shall constitute
enforceable original documents. This Amendment shall be governed by and
construed and enforced exclusively in accordance with the laws of the State of
Tennessee, without regard to principles of conflicts of laws.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first above written.
CATHERINES, INC.
By:
----------------------
Bernard J. Wein,
President
----------------------
David C. Forell
2
<PAGE>
SECOND AMENDMENT TO
EXECUTIVE EMPLOYMENT AGREEMENT
THIS SECOND AMENDMENT TO EXECUTIVE EMPLOYMENT AGREEMENT (the "Amendment"),
dated and effective as of October 1, 1998, is made and entered into by and
between CATHERINES, INC., a Delaware corporation having its principal offices at
3742 Lamar Avenue, Memphis, Tennessee 38118 (the "Company"), and STANLEY H.
GROSSMAN, an individual residing at 6433 Wynfrey Place, Memphis, Tennessee 38120
(the "Employee").
W I T N E S S E T H:
WHEREAS, the Company and Employee are parties to an Executive Employment
Agreement dated as of May 23, 1991, as amended by an Amendment to Executive
Employment Agreement dated as of May 30, 1997 (collectively, the "Employment
Agreement"), pursuant to which the Company has engaged Employee to perform
executive and managerial services for the Company; and
WHEREAS, the parties desire to amend the Employment Agreement upon the
terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements hereinafter contained, and other good and valuable consideration,
the receipt and sufficiency of all of which are hereby acknowledged, the parties
agree as follows:
1. Amendments to Employment Agreement.
1.1 Paragraph 11(b) of the Employment Agreement is hereby amended by
deleting the proviso at the end thereof in its entirety and substituting the
following in lieu thereof:
"; provided, however, that the termination of
Employee's employment and expiration of this Agreement on the
Termination Date shall not constitute an event entitling
Employee to any lump sum payment or continuation of benefits
under this Paragraph 11(b) or under Paragraphs 11(c) or
11(d)."
1.2 Paragraph 11(c) of the Employment Agreement is hereby deleted in its
entirety and the following is substituted in lieu thereof:
"(c) If (i) the Company terminates the employment of
the Employee during the term of this Agreement other than for
"cause" (as defined in Paragraph 11(a) hereof) or (ii) if the
Employee terminates his employment during the term of this
Agreement because the Company, upon 30 days' prior written
notice from Employee to the Company specifying a material
breach by the Company of any of its material obligations to
the Employee pursuant to this Agreement, has failed to cure
such material breach (within such 30-day notice period), then
the Employee shall be entitled to receive a lump sum payment,
payable within 30 days after the date of such termination,
equal to (X) the sum of (A) 1/12th of his annual base salary
in effect immediately before such termination plus (B) 1/12th
of 100% of his target bonus opportunity for the fiscal year of
the Company in which such termination occurs, multiplied by
(Y) the greater of (a) the number of calendar months remaining
in the term of Employee's employment hereunder and (b) 18. In
the event of such termination, the Employee shall also be
entitled to a continuation during the number of months
following the date of such termination equal to the number of
months determined pursuant to the immediately preceding clause
(Y) of (i) the supplemental retirement benefits provided in
accordance with Paragraph 6 hereof, and (ii) health and
insurance benefits upon the same terms and conditions as in
effect at the time of such termination subject to the proviso
at the end of Paragraph 11(b) above."
1
<PAGE>
1.3 The Employment Agreement is hereby amended by adding the following new
Paragraph 11(d) thereto:
"(d) (1) If Employee's employment is terminated
within two (2) years after the occurrence of a "change of
control" of the Company or its parent corporation, Catherines
Stores Corporation (the "Parent"), by either (i) the Company
or its successor other than for cause or (ii) the Employee
during the period beginning with the second (2nd) month and
continuing through the twenty-fourth (24th) month after any
change in control, if he determines that by reason of material
adverse changes in, inter alia, his authority, compensation,
duties, managerial responsibilities or geographical place of
work, he is unable to perform the duties and responsibilities
of the position he held immediately prior to the change in
control, then the Employee shall be entitled to receive a lump
sum payment, payable within thirty (30) days after the date of
such termination, equal to (X) the sum of (A) 1/12th of his
annual base salary in effect immediately before such
termination plus (B) 1/12th of 100% of his target bonus
opportunity for the fiscal year of the Company in which such
termination occurs, multiplied by (Y) the greater of (a) the
number of calendar months remaining in the term of Employee's
employment hereunder and (b) 24. In the event of such
termination, the Employee shall also be entitled to a
continuation during the number of months following the date of
termination equal to the number of months determined pursuant
to the immediately preceding clause (Y) of (i) the
supplemental retirement benefits provided in accordance with
Paragraph 6 hereof, and (ii) health and insurance benefits
upon the same terms and conditions as in effect at the time of
such termination subject to the proviso at the end of
Paragraph 11(b) above.
(2) If any excise tax is imposed pursuant to
the Internal Revenue Code of 1986, as amended (the "Code")
(including, without limitation, Section 4999 of the Code), or
of any successor legislation (an "Excise Tax") upon any
portion of a benefit payment made to the Employee in
accordance with this Paragraph 11, the Company shall pay the
initial Excise Tax and any additional Excise Tax and federal
and state income tax which arises as a result of the Company's
payment of the initial Excise Tax on behalf of the Employee.
(3) As used herein, the term "change in
control" means (i) a person (including, without limitation, a
corporation, trust, partnership, joint venture, limited
liability company, individual or other entity) or group of
affiliated (directly or indirectly) persons becoming the
2
<PAGE>
owner(s) (whether directly, indirectly, beneficially or of
record) of more than thirty-five percent (35%) of the
outstanding shares of common stock of the Company or the
Parent at any time after October 1, 1998, (ii) the merger or
consolidation into, or sale of substantially all of the assets
of the Company or the Parent to, another corporation in which
the Company or the Parent, as the case may be, is not the
surviving and operating corporation, or where the stockholders
of the Company or the Parent prior to such transaction(s) do
not own at least sixty-five percent (65%) of the outstanding
voting securities of the surviving corporation after such
transaction(s), or (iii) the persons who are directors of the
Company or the Parent as of October 1, 1998 cease to
constitute a majority of the Board of Directors of the Company
or the Parent, as the case may be, during any 24-month period
after a transaction described in (i) or (ii) of this Paragraph
11(d)."
2. Ratification of Employment Agreement. Except as specifically modified
hereby, all other terms, conditions and restrictions set forth in the Employment
Agreement are hereby ratified and confirmed by the Company and Employee and
shall remain in full force and effect. To the extent any of the terms of this
Amendment conflict with the terms of the Employment Agreement, the terms of this
Amendment shall govern.
3. Miscellaneous. Capitalized terms used but not otherwise defined herein
shall have the respective meanings given to such terms in the Employment
Agreement. This Amendment may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument. This Amendment shall become effective as of the
date first written above, upon the execution by each of the parties of at least
one counterpart hereof, and it shall not be necessary that any single
counterpart bear the signatures of both parties. The execution and delivery of
this Amendment by delivery of a facsimile copy bearing the facsimile signature
of a party hereto shall constitute a valid and binding execution and delivery of
this Amendment by such party, and such facsimile copies shall constitute
enforceable original documents. This Amendment shall be governed by and
construed and enforced exclusively in accordance with the laws of the State of
Tennessee, without regard to principles of conflicts of laws.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first above written.
CATHERINES, INC.
By:
----------------------
Bernard J. Wein,
President
----------------------
Stanley H. Grossman
3
<PAGE>
