-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, M8yHnQSedJB3EyAltYshVGkG7bz0ZZU+GoDjZgGRU8imKXj6bNtAWndaixF0O+i2 einpABXVVzK55TcMToDVew== 0000950136-97-000258.txt : 19970314 0000950136-97-000258.hdr.sgml : 19970314 ACCESSION NUMBER: 0000950136-97-000258 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 19970313 SROS: NONE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: GOODYS FAMILY CLOTHING INC /TN CENTRAL INDEX KEY: 0000879123 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-FAMILY CLOTHING STORES [5651] IRS NUMBER: 620793974 STATE OF INCORPORATION: TN FISCAL YEAR END: 0126 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-42079 FILM NUMBER: 97555772 BUSINESS ADDRESS: STREET 1: 400 GOODYS LN STREET 2: P O BOX 22000 CITY: KNOXVILLE STATE: TN ZIP: 379332000 BUSINESS PHONE: 4239662000 MAIL ADDRESS: STREET 1: P O BOX 22000 STREET 2: 400 GOODYS LANE CITY: KNOXVILLE STATE: TN ZIP: 379332000 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: GOODFRIEND ROBERT M CENTRAL INDEX KEY: 0000933239 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 400 GOODYS LANE CITY: KNOXVILLE STATE: TN ZIP: 37933-2000 BUSINESS PHONE: 4139662000 MAIL ADDRESS: STREET 1: PO BOX 22000 CITY: KNOXVILLE STATE: TN ZIP: 37933-2000 SC 13D/A 1 AMENDED SCHEDULE 13D UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. 5) Goody's Family Clothing, Inc. ----------------------------- (Name of Issuer) Common Stock, no par value per share ------------------------------------ (Title of Class of Securities) 382588 10 1 ----------- (CUSIP Number) Martin Nussbaum, Esq. Shereff, Friedman, Hoffman & Goodman, LLP 919 Third Avenue New York, New York 10022 (212) 758-9500 --------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) December 18, 1996 ------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b) (3) or (4), check the following box: [ ] Check the following box if a fee is being paid with this statement: [ ] SCHEDULE 13D CUSIP No. 382588 10 1 ----------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Robert M. Goodfriend 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |_| (b) |_| 3 SEC USE ONLY 4 SOURCE OF FUNDS OO 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) |_| 6 CITIZENSHIP OR PLACE OF ORGANIZATION U.S.A. NUMBER OF 7 SOLE VOTING POWER SHARES 9,358,355 BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH 8 SHARED VOTING POWER 11,250 9 SOLE DISPOSITIVE POWER 9,358,355 10 SHARED DISPOSITIVE POWER 11,250 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 9,369,605 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES |_| 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 56% 14 TYPE OF REPORTING PERSON IN 2 AMENDMENT NO. 5 TO SCHEDULE 13D This Amendment No. 5 to the Schedule 13D originally filed by Robert M. Goodfriend with the Securities and Exchange Commission (the "SEC") on November 25, 1994, as previously amended by Amendment No. 1 filed with the SEC on January 9, 1995, Amendment No. 2 filed with the SEC on October 17, 1996, Amendment No. 3 filed with the SEC on December 9, 1996 and Amendment No. 4 filed with the SEC on December 16, 1996 (collectively, the "Schedule 13D"), relates to Mr. Goodfriend's beneficial ownership of shares of the common stock, no par value per share, of Goody's Family Clothing, Inc. This Amendment No. 5 amends and supplements the Schedule 13D. Unless otherwise indicated, all capitalized terms used herein but not otherwise defined shall have the respective meanings set forth in the Schedule 13D. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. ------------------------------------------------- Item 3 of the Schedule 13D is hereby amended to include the following information: On December 18, 1996, in recognition of the Reporting Person's services to the Company and as incentive compensation to the Reporting Person, the Compensation Committee of the Board of Directors of the Company unanimously approved the grant to the Reporting Person under the Company's 1993 Stock Option Plan of stock options immediately exercisable to purchase an aggregate of 320,000 shares of Common Stock over a five-year term at an exercise price of $17.44 per share (the closing sales price of the Common Stock on The Nasdaq National Market on December 17, 1996). Such grant was subsequently unanimously approved by the Board of Directors of the Company (with the Reporting Person abstaining) on December 18, 1996. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER. ------------------------------------ Item 5 of the Schedule 13D is hereby amended to include the following information: As of the date hereof, the Reporting Person beneficially owns 9,369,605 shares of Common Stock, which represents approximately 56% of the outstanding shares of Common Stock. (According to the Company and its transfer agent, as of March 10, 1997 there were 16,367,082 shares of Common Stock outstanding. Accordingly, in computing the percentage of Common Stock beneficially owned by the Reporting Person, such number, as adjusted for exercisable options held by the Reporting Person, was used.) Such 9,369,605 shares include 11,250 shares of Common Stock owned by the Reporting Person's spouse ("Mrs. Goodfriend"). Such 9,369,605 shares include 320,000 shares of Common Stock issuable upon exercise of stock options granted under the Company's 1993 Stock Option Plan which are currently exercisable. Such 9,369,605 shares do not include 417,270 shares of Common Stock held in trust for the benefit of the Reporting Person's children. The Reporting Person has no voting or investment power with respect to these 417,270 shares of Common Stock and disclaims beneficial ownership of them. The Reporting Person has sole voting and dispositive power with respect to the 9,358,355 shares of Common Stock owned directly by him and shares voting and dispositive power with Mrs. Goodfriend with respect to the 11,250 shares of Common Stock she owns directly. 3 Other than as set forth herein, the Reporting Person has not made any purchases or sales of securities of the Company during the sixty (60) days preceding the date of this Schedule 13D. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS -------------------------------------------------------- WITH RESPECT TO SECURITIES OF THE ISSUER. ---------------------------------------- Item 6 of the Schedule 13D is hereby amended to include the following information: On December 18, 1996, in recognition of the Reporting Person's services to the Company and as incentive compensation to the Reporting Person, the Compensation Committee of the Board of Directors of the Company unanimously approved the grant to the Reporting Person under the Company's 1993 Stock Option Plan of stock options immediately exercisable to purchase an aggregate of 320,000 shares of Common Stock over a five-year term at an exercise price of $17.44 per share (the closing sales price of the Common Stock on The Nasdaq National Market on December 17, 1996). Such grant was subsequently unanimously approved by the Board of Directors of the Company (with the Reporting Person abstaining) on December 18, 1996. These stock options are subject to early termination in the event of termination of the Reporting Person's employment by the Company. A copy of the Award Agreement is attached hereto as an exhibit and is incorporated herein by reference. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. -------------------------------- 8. Non-Qualified Stock Option Award Pursuant to Goody's Family Clothing, Inc. 1993 Stock Option Plan 4 SIGNATURES After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: March 11, 1997 /s/ Robert M. Goodfriend ------------------------ Robert M. Goodfriend 5 EXHIBIT INDEX EXHIBIT PAGE - ------- ---- 8. Non-Qualified Stock Option Award Pursuant to Goody's Family Clothing, Inc. 1993 Stock Option Plan 6 EX-8 2 STOCK OPTION AWARD NON-QUALIFIED STOCK OPTION AWARD PURSUANT TO GOODY'S FAMILY CLOTHING, INC. 1993 STOCK OPTION PLAN THIS AWARD is made as of the Grant Date by GOODY'S FAMILY CLOTHING, INC. (the "Company") to ROBERT M. GOODFRIEND (the "Optionee"). Upon and subject to the Terms and Conditions attached hereto and incorporated herein by reference, the Company hereby awards as of the Grant Date to Optionee a non-qualified stock option (the "Option"), as described below, to purchase the Option Shares. A. Grant Date: December 18, 1996. B. Type of Option: Non-Qualified Stock Option. C. Plan (under which Option is granted): Goody's Family Clothing, Inc. 1993 Stock Option Plan. D. Option Shares: All or any part of 320,000 shares of the Company's common stock, no par value per share (the "Common Stock"), subject to adjustment as provided in the attached Terms and Conditions. E. Exercise Price: $17.44 per share, subject to adjustment as provided in the attached Terms and Conditions. F. Option Period: The Option may be exercised during the Option Period which commences on the Grant Date and ends on the earlier of (a) the fifth (5th) anniversary of the Grant Date; or (b) thirty (30) days after the Optionee ceases to be an employee of the Company or any subsidiary and/or a director of the Company for any reason other than death or disability or the first (1st) anniversary of the Optionee's death or disability; provided that the Option may be exercised as to no more than the vested Option Shares, determined pursuant to the Vesting Schedule. Note that other restrictions to exercising the Option described in the attached Terms and Conditions may apply. G. Vesting Schedule: The Option Shares are immediately vested in their entirety. IN WITNESS WHEREOF, the Company has executed and sealed this Award as of the Grant Date set forth above. ROBERT M. GOODFRIEND GOODY'S FAMILY CLOTHING, INC. By: /s/Robert M. Goodfriend By: /s/Harry M. Call ----------------------- ---------------- Title: Chief Executive Officer Title: President TERMS AND CONDITIONS TO THE NON-QUALIFIED STOCK OPTION AWARD PURSUANT TO GOODY'S FAMILY CLOTHING, INC. 1993 STOCK OPTION PLAN 1. Exercise of Option. Subject to the provisions provided herein or in the Award made pursuant to the Goody's Family Clothing, Inc. 1993 Stock Option Plan: (a) the Option may be exercised with respect to all or any portion of the vested Option Shares at any time during the Option Period by the delivery to the Company, at its principal place of business, of (i) a written notice of exercise in substantially the form attached hereto as Exhibit 1, which shall be actually delivered to the Company no earlier than thirty (30) days and no later than ten (10) days prior to the date upon which Optionee desires to exercise all or any portion of the Option; (b) payment to the Company of the Exercise Price multiplied by the number of shares being purchased (the "Purchase Price") as provided in Section 2; and (c) payment of any tax withholding liability as provided in Section 3. Upon acceptance of such notice and receipt of payment in full of the Purchase Price and any tax withholding liability, the Company shall cause to be issued a certificate representing the Option Shares purchased. 2. Purchase Price. Payment of the Purchase Price for all Option Shares purchased pursuant to the exercise of an Option shall be made in cash or certified check or, alternatively, as follows: (a) by delivery to the Company of a number of shares of Common Stock which have been owned by the Optionee for at least six (6) months prior to the date of the Option's exercise having a fair market value, as determined under the Plan, on the date of exercise either equal to the Purchase Price or in combination with cash or a certified check to equal the Purchase Price; or (b) by receipt of the Purchase Price in cash from a broker, dealer or other "creditor" as defined by Regulation T issued by the Board of Governors of the Federal Reserve System following delivery by the Optionee to the Committee (as defined in the Plan) of instructions in a form acceptable to the Committee regarding delivery to such broker, dealer or other creditor of that number of Option Shares with respect to which the Option is exercised. 3. Withholding. The Optionee must pay to the Company the full amount of the federal, state and local tax withholding obligation arising from the exercise of the Option. (a) The tax withholding liability may be paid in cash or by certified check, or, alternatively, as follows: (i) by the Optionee making a written election (a "Withholding Election") on or prior to the date on which the amount of tax required to be withheld is determined (the "Tax Date") to reduce the number of Option Shares to be issued upon exercise by the whole number of shares of Common Stock having a fair market value, as determined under the Plan, equal to the amount of withholding tax; or (ii) by the Optionee making a Withholding Election and delivering to the Company before the Tax Date a whole number of shares of Common Stock that the Optionee has owned for at least six (6) months having a fair market value equal to the amount of withholding tax. (b) A Withholding Election must be made substantially in the form attached as Exhibit 2 and may be made only if: (i) the Optionee delivers to the Company a completed written Withholding Election no later than on the Tax Date; (ii) the Withholding Election is irrevocable and, where applicable, satisfies the requirements of the exemption provided under Rule 16b-3 of the Securities Exchange Act of 1934; and (iii) the Optionee delivers to the Company the Withholding Election on a date determined by the Committee (i.e., at least six (6) months prior to the Tax Date or prior to the Tax Date and in any ten-day period beginning on the third day following the release of the Company's quarterly or annual summary statement of sales and earnings), if the Optionee is considered by the Committee to be subject to Section 16 of the Securities Exchange Act of 1934. The Committee may give no effect to any Withholding Election. 4. Rights as Shareholder. Until the stock certificates reflecting the Option Shares accruing to the Optionee upon exercise of the Option are issued to the Optionee, the Optionee shall have no rights as a shareholder with respect to such Option Shares. The Company shall make no adjustment for any dividends or distributions or other rights on or with respect to Option Shares for which the record date is prior to the issuance of that stock certificate, except as the Plan or this Award otherwise provides. 5. Restriction on Transfer of Option and of Option Shares. The Option evidenced hereby is nontransferable other than by will or the laws of descent and distribution and shall be exercisable during the lifetime of the Optionee only by the Optionee (or in the event of his disability, by his personal representative) and after his death, only by his legatee or the executor of his estate. 6. Changes in Capitalization. (a) Except as provided in Subsection (b) below, if the number of shares of Common Stock shall be increased or decreased by a stock split or the payment of a stock dividend, a subdivision or combination involving the Common Stock, a reclassification or a merger or consolidation involving the Common Stock, an appropriate adjustment shall be made by the Committee, in a manner determined in its sole discretion, in the number and kind of Option Shares and in the Exercise Price. Any adjustment may provide for the elimination of any fractional share that would otherwise become subject to the Option. (b) In the event of a Sale of the Company (as defined in the Plan) in which the purchaser of the Company does not agree to the assumption of the Option, provisions shall be made to cause the Option to become exercisable prior to the Sale of the Company and to terminate upon the consummation of the Sale of the Company. (c) The existence of the Plan and this Award shall not affect in any way the right or power of the Company to make or authorize any adjustment, reclassification, reorganization or other change in its capital or business structure, or to merge, consolidate, dissolve, liquidate, sell or transfer all or any part of its business or assets. 7. Special Limitation on Exercise. No purported exercise of the Option shall be effective without the approval of the Committee, which may be withheld to the extent that the exercise, either individually or in the aggregate together with the exercise of other previously exercised stock options and/or offers and sales pursuant to any prior or contemplated offering of securities, would, in the sole and absolute judgment of the Committee, require the filing of a registration statement with the United States Securities and Exchange Commission or with the securities commission of any state. If a registration statement is not in effect under the Securities Act of 1933 or any applicable state securities law with respect to shares of Common Stock purchasable or otherwise deliverable under the Option, the Optionee (a) shall deliver to the Company, prior to the exercise of the Option or as a condition to the delivery of Common Stock pursuant to the exercise of an Option exercise, such information, representations and warranties as the Company may reasonably request in order for the Company to be able to satisfy itself that the Option Shares are being acquired in accordance with the terms of an applicable exemption from the securities registration requirements of applicable federal and state securities laws and (b) shall agree that the shares of Common Stock so acquired will not be disposed of except pursuant to an effective registration statement, unless the Company shall have received an opinion of counsel that such disposition is exempt from such requirement under the Securities Act of 1933 and any applicable state securities law. 8. Legend on Stock Certificates. Certificates evidencing the Option Shares, to the extent appropriate at the time, shall have noted conspicuously on the certificates a legend intended to give all persons full notice of the existence of the conditions, restrictions, rights and obligations set forth in this Award and in the Plan. 9. Governing Laws. This Award and the Terms and Conditions shall be construed, administered and enforced according to the laws of the State of Tennessee. 10. Successors. This Award and the Terms and Conditions shall be binding upon and inure to the benefit of the heirs, legal representatives, successors and permitted assigns of the Optionee and the Company. 11. Notice. Except as otherwise specified herein, all notices and other communications under this Award shall be in writing and shall be deemed to have been given if personally delivered or if sent by registered or certified United States mail, return receipt requested, postage prepaid, addressed to the proposed recipient at the last known address of the recipient. Any party may designate any other address to which notices shall be sent by giving notice of the address to the other parties in the same manner as provided herein. 12. Severability. In the event that any one or more of the provisions or portion thereof contained in the Award and these Terms and Conditions shall for any reason be held to be invalid, illegal or unenforceable in any respect, the same shall not invalidate or otherwise affect any other provisions of the Award and these Terms and Conditions, and the Award and these Terms and Conditions shall be construed as if the invalid, illegal or unenforceable provision or portion thereof had never been contained herein. 13. Entire Agreement. Subject to the terms and conditions of the Plan, the Award and the Terms and Conditions express the entire understanding of the parties with respect to the Option. 14. Violation. Any transfer, pledge, sale, assignment, or hypothecation of the Option or any portion thereof shall be a violation of the terms of the Award or these Terms and Conditions and shall be void and without effect. 15. Headings and Capitalized Terms. Section headings used herein are for convenience of reference only and shall not be considered in construing the Award or these Terms and Conditions. 16. Specific Performance. In the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of the Award and these Terms and Conditions, the party or parties who are thereby aggrieved shall have the right to specific performance and injunction in addition to any and all other rights and remedies at law or in equity, and all such rights and remedies shall be cumulative. 17. No Right to Continued Employment. Neither the establishment of the Plan nor the award of Option Shares hereunder shall be construed as giving the Optionee the right to continued employment with the Company or any subsidiary or, where applicable, to be retained as a member of the Board of Directors of the Company. NOTICE OF EXERCISE OF STOCK OPTION TO PURCHASE COMMON STOCK OF GOODY'S FAMILY CLOTHING, INC. Name: Address: Goody's Family Clothing, Inc. 400 Goody's Lane P. O. Box 22000 Knoxville, Tennessee 37933-2000 Attn: Assistant Corporate Secretary Re: Exercise of Non-Qualified Stock Option Dear : Subject to acceptance hereof by Goody's Family Clothing, Inc. (the "Company") pursuant to the provisions of the Goody's Family Clothing, Inc. 1993 Stock Option Plan (the "Plan") I hereby give notice of my election to exercise options granted to me to purchase ______ shares of Common Stock of the Company under the Non-Qualified Stock Option Award (the "Award") dated as of _______________. The purchase shall take place as of ____________ (the "Exercise Date"). On or before the Exercise Date, I will pay the applicable purchase price as follows: [ ] by delivery of cash or a certified check for $________ for the full purchase price payable to the order of Goody's Family Clothing, Inc. [ ] by delivery of cash or a certified check for $___________ representing a portion of the purchase price with the balance to consist of shares of Common Stock that I have owned for at least six months and that are represented by a stock certificate I will surrender to the Company with my endorsement. If the number of shares of Common Stock represented by such stock certificate exceed the number to be applied against the purchase price, I understand that a new stock certificate will be issued to me reflecting the excess number of shares. [ ] by delivery of a stock certificate representing shares of Common Stock that I have owned for at least six months which I will surrender to the Company with my Page 1 of 4 endorsement as payment of the purchase price. If the number of shares of Common Stock represented by such certificate exceed the number to be applied against the purchase price, I understand that a new certificate will be issued to me reflecting the excess number of shares. [ ] by delivery of the purchase price by ______________, a broker, dealer or other "creditor" as defined by Regulation T issued by the Board of Governors of the Federal Reserve System. I hereby authorize the Company to issue a stock certificate for the number of shares indicated above in the name of said broker, dealer or other creditor or its nominee pursuant to instructions received by the Company and to deliver said stock certificate directly to that broker, dealer or other creditor (or to such other party specified in the instructions received by the Company from the broker, dealer or other creditor) upon receipt of the purchase price. The required federal, state and local income tax withholding obligations, if any, on the exercise of the Award shall also be paid on or before the Exercise Date in the manner provided in the Withholding Election previously tendered or to be tendered to the Company no later than the Exercise Date. As soon as the stock certificate is registered in my name, please deliver it to me at the above address. If the Common Stock being acquired is not registered for issuance to and resale by the Optionee pursuant to an effective registration statement on Form S-8 (or successor form) filed under the Securities Act of 1933, as amended (the "1933 Act"), I hereby represent, warrant, covenant, and agree with the Company as follows: The shares of the Common Stock being acquired by me will be acquired for my own account without the participation of any other person, with the intent of holding the Common Stock for investment and without the intent of participating, directly or indirectly, in a distribution of the Common Stock and not with a view to, or for resale in connection with, any distribution of the Common Stock, nor am I aware of the existence of any distribution of the Common Stock; I am not acquiring the Common Stock based upon any representation, oral or written, by any person with respect to the future value of, or income from, the Common Stock but rather upon an independent examination and judgment as to the prospects of the Company; The Common Stock was not offered to me by means of publicly disseminated advertisements or sales literature, nor am I aware of any offers made to other persons by such means; Page 2 of 4 I am able to bear the economic risks of the investment in the Common Stock, including the risk of a complete loss of my investment therein; I understand and agree that the Common Stock will be issued and sold to me without registration under any state law relating to the registration of securities for sale, and will be issued and sold in reliance on the exemptions from registration under the 1933 Act, provided by Sections 3(b) and/or 4(2) thereof and the rules and regulations promulgated thereunder; The Common Stock cannot be offered for sale, sold or transferred by me other than pursuant to: (A) an effective registration under the 1933 Act or in a transaction otherwise in compliance with the 1933 Act; and (B) evidence satisfactory to the Company of compliance with the applicable securities laws of other jurisdictions. The Company shall be entitled to rely upon an opinion of counsel satisfactory to it with respect to compliance with the above laws; The Company will be under no obligation to register the Common Stock or to comply with any exemption available for sale of the Common Stock without registration or filing, and the information or conditions necessary to permit routine sales of securities of the Company under Rule 144 under the 1933 Act are not now available and no assurance has been given that it or they will become available. The Company is under no obligation to act in any manner so as to make Rule 144 available with respect to the Common Stock; I have and have had complete access to and the opportunity to review and make copies of all material documents related to the business of the Company, including, but not limited to, contracts, financial statements, tax returns, leases, deeds and other books and records. I have examined such of these documents as I wished and am familiar with the business and affairs of the Company. I realize that the purchase of the Common Stock is a speculative investment and that any possible profit therefrom is uncertain; I have had the opportunity to ask questions of and receive answers from the Company and any person acting on its behalf and to obtain all material information reasonably available with respect to the Company and its affairs. I have received all information and data with respect to the Company which I have requested and which I have deemed relevant in connection with the evaluation of the merits and risks of my investment in the Company; I have such knowledge and experience in financial and business matters that I am capable of evaluating the merits and risks of the purchase of the Common Stock hereunder and I am able to bear the economic risk of such purchase; and The agreements, representations, warranties and covenants made by me herein extend to and apply to all of the Common Stock of the Company issued to me pursuant to this Award. Acceptance by me of the certificate representing such Common Stock shall constitute a confirmation by me that all such agreements, representations, warranties and covenants made herein shall be true and correct at that time. Page 3 of 4 I understand that the certificates representing the shares being purchased by me in accordance with this notice shall bear a legend referring to the foregoing covenants, representations and warranties and restrictions on transfer, and I agree that a legend to that effect may be placed on any certificate which may be issued to me as a substitute for the certificates being acquired by me in accordance with this notice. Very truly yours, AGREED TO AND ACCEPTED: GOODY'S FAMILY CLOTHING, INC. By: Title: Number of Shares Exercised: ________ Number of Shares Remaining: ________ Date: Page 4 of 4 EXHIBIT 2 NOTICE OF WITHHOLDING ELECTION GOODY'S FAMILY CLOTHING, INC. TO: Corporate Secretary, Goody's Family Clothing, Inc. FROM: RE: Withholding Election This election relates to the option identified in Paragraph 3 below. I hereby certify that: (1) My correct name and social security number and my current address are set forth at the end of this document. (2) I am (check one, whichever is applicable). [ ] the original recipient of the option. [ ] the legal representative of the estate of the original recipient of the option. [ ] a legatee of the original recipient of the option. [ ] the legal guardian of the original recipient of the option. (3) The option to which this election relates was issued under the Goody's Family Clothing, Inc. _______ shares of Common Stock. This election relates to ______ shares of Common Stock issuable upon exercise of the option, provided that the numbers set forth above shall be deemed changed as appropriate to reflect the applicable Plan provisions. (4) In connection with any exercise of the Option, I hereby elect: [ ] to have the amount of the applicable taxes withheld from the proceeds from the sale of the shares by Morgan Keegan and paid to the Company. [ ] to have certain of the shares issuable pursuant to the exercise withheld by the Company for the purpose of having the value of the shares applied to pay federal, state, and local, if any, taxes arising from the exercise; [ ] to tender shares of Common Stock held by me for a period of at least six (6) months prior to the exercise of the option for the purpose of having the value of the shares applied to pay such taxes. [ ] to have the amount of the tax withholding obligation delivered by ________________________________, a broker, dealer or other "creditor" Page 1 of 3 as defined by Regulation T issued by the Board of Governors of the Federal Reserve System. I hereby authorize the Company to issue a stock certificate in number of shares indicated above in the name of said broker, dealer or other creditor or its nominee pursuant to instructions received by the Company and to deliver said stock certificate directly to that broker, dealer or other creditor (or to such other party specified in the instructions received by the Company from the broker, dealer or other creditor) upon receipt of the withholding obligation. The shares to be withheld or tendered, as applicable, shall have, as of the Tax Date applicable to the exercise, a fair market value equal to the minimum statutory tax withholding requirement under federal, state, and local law in connection with the exercise. (5) This Withholding Election is made no later than the Tax Date and is otherwise timely made pursuant to the Plan. (6) I understand that this Withholding Election may not be revised, amended or revoked by me (except in a manner that satisfies, if applicable, the requirements of the exemption provided under Rule 16b-3 of the Securities Exchange Act of 1934). (7) I further understand that the Company shall withhold from the Common Stock a whole number of shares of Common Stock having the value specified in Paragraph 4 above, as applicable. (8) The Plan has been made available to me by the Company. I have read and understand the Plan and I have no reason to believe that any of the conditions to the making of this Withholding Election have not been met. Page 2 of 3 (9) Capitalized terms used in this Notice of Withholding Election without definition shall have the meanings given to them in the Plan. Dated: __________________________ ----------------------------- Signature ----------------------------- Name (Printed) ----------------------------- Social Security Number ----------------------------- Address Page 3 of 3 -----END PRIVACY-ENHANCED MESSAGE-----