Exhibit 10.2


 


SEVERANCE AGREEMENT


 


This SEVERANCE AGREEMENT (“Agreement”)
is entered into between Citi Trends, Inc., a Delaware corporation, including its subsidiaries, affiliates, divisions, successors,
and related entities (the “Company”), and Heather Plutino, an individual (the “Executive”), as of the date signed
by the Executive below, to be effective as of June 27, 2022.


 


WHEREAS, the Company and the
Executive are also parties to an Employment Non-Compete, Non-Solicit and Confidentiality Agreement (the “Confidentiality Agreement”)
and certain restricted stock award and stock option agreements (collectively, the “Equity Agreements”), which are to
remain in full force and effect;


 


NOW, THEREFORE, in consideration
of the mutual agreements set forth herein, the parties agree as follows:


 


1.            Termination
Payments and Benefits. Regardless of the circumstances of the Executive’s termination, Executive shall be entitled to payment
when due of any earned and unpaid base salary, expense reimbursements and vacation days accrued prior to the termination of Executive’s
employment, and other unpaid vested amounts or benefits under Company retirement and health benefit plans, and, as applicable, under Equity
Agreements in accordance with their terms, and to no other compensation or benefits.


 


(a)            If
(i) the Company terminates the Executive’s employment without Cause, or (ii) the Executive terminates employment with
the Company within twelve (12) months following the occurrence of a Change in Control, provided that within such period, (a) either
Executive’s job duties have been materially and permanently diminished or the Executive’s compensation has been materially
decreased and (b) Executive provides written notice to the Company within ninety (90) days of the occurrence of an aforementioned
event and the Company fails to cure the event within thirty (30) days following the Company’s receipt of the Executive’s written
notice, then, in the case of either (i) or (ii) above, the Company will provide the Executive with separation payments of twelve
(12) months base salary at Executive’s base salary rate at the time of Executive’s termination or if greater, the Executive’s
base rate in effect on the Change of Control Date; to be paid in twenty-six (26) regular bi-weekly pay periods beginning on the first
pay period occurring after the sixtieth (60th) day following the Executive’s termination, provided the Executive executes and does
not subsequently revoke the Separation and General Release Agreement referenced below within such sixty (60) day period.


 


(b)            For
a period of twelve (12) months from the Executive’s separation from service, the Company will pay to the Executive an amount, minus
all applicable taxes and withholdings, equal to the full monthly cost (including any portion of the cost previously paid by the employee)
to provide the same level of group health benefits maintained by Executive as of Executive’s separation from service, provided the
Executive executes and does not subsequently revoke the Separation and General Release Agreement referenced below within such sixty (60)
day period.


 






     


     


    

 


(c)            For
purposes of this Agreement, “Change in Control” shall mean the occurrence of any one of the following events:


 


(i)            the
acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934, as amended (the “1934 Act”)) (a “Person”) of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the 1934 Act) of 50% or more of the combined voting power of the then outstanding voting securities
of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”);
provided, however, that for purposes of this subsection (1), the following acquisitions shall not constitute a Change of Control: (i) any
acquisition by a Person who is on the date of this Agreement the beneficial owner of 50% or more of the Outstanding Company Voting Securities,
(ii) any acquisition directly from the Company, (iii) any acquisition by the Company, (iv) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company, or (v) any acquisition
by any corporation pursuant to a transaction which complies with clauses (i), (ii) and (iii) of subsection (3) of this
definition; or


 


(ii)            individuals
who, as of the date of this Agreement, constitute the Board of Directors of the Company (the “Incumbent Board”) cease
for any reason to constitute at least a majority of the Board of Directors of the Company; provided, however, that any individual becoming
a director subsequent to the Effective Date whose election, or nomination for election by the Company's shareholders, was approved by
a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were
a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result
of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation
of proxies or consents by or on behalf of a Person other than the Board of Directors of the Company; or


 


(iii)            consummation
of a reorganization, merger, consolidation or share exchange or sale or other disposition of all or substantially all of the assets of
the Company (a “Business Combination”), in each case, unless, following such Business Combination, (i) all or
substantially all of the individuals and entities who were the beneficial owners of the Outstanding Company Voting Securities immediately
prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of directors of the corporation resulting from such Business Combination
(including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the
Company's assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately
prior to such Business Combination of the Outstanding Company Voting Securities, and (ii) no Person (excluding any corporation resulting
from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from such
Business Combination) beneficially owns, directly or indirectly, 20% or more of the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such ownership existed prior to the Business Combination, and (iii) at least
a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent
Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or


 


(iv)            approval
by the shareholders of the Company of a complete liquidation or dissolution of the Company.


 






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(d)            The
separation payments and benefits described in Sections 1(a) and 1(b), above, are conditioned upon Executive executing a Separation
and General Release Agreement at the time of termination, which releases and waives any and all claims against the Company and its affiliated
persons and companies, and is acceptable to the Company.


 


(e)            In
all other circumstances of separation, including if the Executive resigns, retires or is terminated for Cause, the Executive shall not
be entitled to receive any separation payments or benefits. For purposes of this Agreement, “Cause” shall mean the
Executive’s:


 


(i)            commission
of an act of fraud or dishonesty, the purpose or effect of which, in the CEO and/or Board’s sole determination, adversely affects
the Company;


 


(ii)            conviction
of a felony or a crime involving embezzlement, conversion of property or moral turpitude (whether by plea of nolo contendere or otherwise);


 


(iii)            engaging
in willful or reckless misconduct or gross negligence in connection with any property or activity of the Company, the purpose or effect
of which, in the CEO and/or Board’s sole determination, adversely affects the Company;


 


(iv)            material
breach of any of the Executive’s obligations as an employee or stockholder as set forth in the Company’s Information Security
Policies and Code of Business Conduct, the Confidentiality Agreement or any other agreement in effect between the Company and the Executive;
provided that, in the event such breach is susceptible to cure, the Executive has been given written notice by the CEO and/or Board of
such breach and 30 days from such notice fails to cure the breach; or


 


(v)            failure
or refusal to perform any material duty or responsibility under this Agreement or a determination that the Executive has breached his
fiduciary obligations to the Company; provided that, in the event such failure, refusal or breach is susceptible to cure, the Executive
has been given written notice by the CEO and/or Board of such failure, refusal or breach and 30 days from such notice fails to cure such
failure, refusal or breach.


 


2.            Notice.
The Executive will send all communications to the Company in writing, to: Executive Vice President of Human Resources, Citi Trends, Inc.,
104 Coleman Blvd., Savannah, Georgia 31408, Fax: (866) 231-8835. All communications from the Company to the Executive relating to this
Agreement shall be sent to the Executive in writing at his office and home address as reflected in the Company’s records.


 


3.            Amendment.
No provisions of this Agreement may be modified, waived, or discharged except by a written document signed by a duly authorized Company
officer and the Executive. A waiver of any conditions or provisions of this Agreement in a given instance shall not be deemed a waiver
of such conditions or provisions at any other time in the future.


 


4.            Choice
of Law and Venue. The validity, interpretation, construction, and performance of this Agreement shall be governed by the laws of the
State of Georgia (excluding any that mandate the use of another jurisdiction’s laws). Any action to enforce or for breach of this
Agreement shall be brought exclusively in the state or federal courts of the County of Chatham, City of Savannah.


 






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5.            Successors.
This Agreement shall be binding upon, and shall inure to the benefit of, the Executive and Executive’s estate, but the Executive
may not assign or pledge this Agreement or any rights arising under it, except to the extent permitted under the terms of the benefit
plans in which Executive participates. Without the Executive’s consent, the Company may assign this Agreement to any affiliate or
to a successor to substantially all the business and assets of the Company.


 


6.            Counterparts.
This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together
shall constitute the same instrument.


 


7.            Entire
Agreement. This Agreement and the Confidentiality Agreement between the parties constitute the entire agreement between the parties
and supersede any and all prior contracts, agreements, or understandings between the parties which may have been entered into by Company
and the Executive relating to the subject matter hereof (including, without limitation, the Prior Severance Agreement), except for the
Equity Agreements, which are to remain in full force and effect. This Agreement may not be amended or modified in any manner except by
an instrument in writing signed by both the Company and the Executive. The failure of either party to enforce at any time any of the provisions
of this Agreement shall in no way be construed to be a waiver of any such provision or the right of such party thereafter to enforce each
and every such provision. No waiver of any breach of this Agreement shall be held to be a waiver of any other or subsequent breach. All
remedies are cumulative, including the right of either party to seek equitable relief in addition to money damages.


 


8.            Employment
At-Will Relationship. Executive and the Company agree that nothing in this Agreement alters the at-will nature of Executive’s
employment relationship with the Company.


 


9.            Internal
Revenue Code Section 409A. Notwithstanding anything in this Agreement to the contrary, to the extent that any amount or benefit
that would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Internal Revenue Code (“Section 409A”)
would otherwise be payable or distributable hereunder by reason of a Participant’s termination of employment, such amount or benefit
will not be payable or distributable to the Participant by reason of such circumstance unless the circumstances giving rise to such termination
of employment meet any description or definition of “separation from service” in Section 409A of the Code and applicable
regulations (without giving effect to any elective provisions that may be available under such definition). For purposes of Section 409A,
each installment payable under Section 1(a) and 1(b) of this Agreement shall be deemed to be a separate payment.


 






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IN WITNESS WHEREOF, the parties hereto have set
their hands as of the day and year set forth below.


 


	 	CITI TRENDS, INC.
	 	 
	 	By: 	/s/ David N. Makuen
	 	Name: 	David N. Makuen
	 	Title: 	Chief Executive Officer
	 	Dated: 	June 14, 2022



 


	 	By:	/s/ Heather L. Plutino
	 	Employee Name: Heather L. Plutino
	 	Dated: June 14,
2022



 






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