Exhibit - 10.57













                              EMPLOYMENT AGREEMENT

                                     BETWEEN

                          GOODY'S FAMILY CLOTHING, INC.

                                       AND


                               STANLEY B. LATACHA

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                                TABLE OF CONTENTS



1.       Definitions.................................................1

2.       Employment..................................................3

3.       Term........................................................3

4.       Position and Duties; Business Time..........................3

5.       Compensation................................................3

6.       Termination of Employment...................................5

7.       Obligations of the Company Upon Termination.................6

8.       Change of Control...........................................8

9.       Non-exclusivity of Rights...................................8

10.      Full Settlement.............................................8

11.      Arbitration of Disputes.....................................8

12.      Confidential Information and Nonsolicitation................9

13.      Successors..................................................9

14.      Miscellaneous...............................................10



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97295-11 ~ 03833-0 ~ 12/02/98 ~ 09:26AM
                              EMPLOYMENT AGREEMENT

         THIS  EMPLOYMENT  AGREEMENT,  by and between  GOODY'S FAMILY  CLOTHING,
INC.,  a Tennessee  corporation  (the  "Company"),  and STANLEY B.  LATACHA (the
"Executive"), shall be effective as of the 16th day of September, 1998.

                                    RECITALS:

         A. The  Executive  has for some time served as Senior  Vice  President,
Marketing and  Advertising  of the Company.  The Company and the Executive  have
entered  into  an  Employment  Agreement  dated  June  9,  1997  (the  "Existing
Employment Contract").

         B. The Company wishes to assure the continued service of the Executive.
The Company desires to recognize the  Executive's  commitment to the Company and
to confirm the right of the Executive to certain  employment,  compensation  and
severance  benefits.  To attain that end, the Company and the Executive  wish to
enter into this Employment Agreement (the "Agreement").

         NOW,  THEREFORE,  in consideration of the promises and mutual covenants
herein contained, and other good and valuable consideration, the Company and the
Executive do hereby agree as follows:

                  1.       Definitions.

                  (a) "Accrued  Obligations" shall mean (i) the Executive's Base
Salary  through  the Date of  Termination,  (ii)  any  amounts  deferred  by the
Executive and not yet paid by the Company  pursuant to a valid election to defer
the receipt of all or a portion of such  payments  made in  accordance  with any
plan of deferred compensation sponsored by the Company and any earned but unpaid
vacation pay for the current  year,  (iii) any amounts or benefits  owing to the
Executive or to the Executive's beneficiaries under the then applicable employee
benefit  plans or policies  of the  Company  and (iv) any  amounts  owing to the
Executive  for  reimbursement  of expenses  properly  incurred by the  Executive
through the Date of Termination  and which are  reimbursable  in accordance with
the reimbursement policy of the Company described in Section 5(f).



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                                                        11
97295-11 ~ 03833-0 ~ 12/02/98 ~ 09:26AM
                  (b) "Base  Salary" shall have the meaning set forth in Section
5(b).

                  (c) "Board" shall mean the Board of Directors of the Company.

                  (d) "Cause" shall mean that the Executive has, in the judgment
of a majority of the Board (i) committed a felony, or committed an act of fraud,
embezzlement  or theft in connection  with his duties with the Company or in the
course of his  employment  with the Company;  (ii)  willfully  caused  damage to
property of the Company;  (iii) been convicted of a criminal  offense  (either a
misdemeanor  involving  acts of  dishonesty,  theft  or  moral  turpitude,  or a
felony);  or (iv)  engaged in a willful and material  breach of his  obligations
under Section 4 of this  Agreement  which breach (under this clause iv) has been
communicated to the Executive with specificity by written notice,  and which has
not been cured to the reasonable  satisfaction  of the Board within a reasonable
period of time, which shall not be less than ten (10) days, nor more than thirty
(30) days, following receipt of such written notice by the Executive.  The Board
shall provide the Executive  with an opportunity to meet with the Board in order
to provide the Executive an  opportunity  to refute or explain acts or omissions
referred to in such written notice.  For the purpose of this Section,  no act or
omission  shall be considered  willful  unless done or omitted to be done in bad
faith and without  reasonable  belief that such act or omission  was done in the
best interest of the Company.

                  (e) A "Change of Control" of the Company  shall mean and shall
be deemed to have  occurred  if (i) any person or group  (within  the meaning of
Rule  13d-3 of the  rules  and  regulations  promulgated  under  the  Securities
Exchange Act of 1934, as amended (the "1934 Act  Rules")),  other than Robert M.
Goodfriend,  members of his immediate family, his affiliates,  trusts or private
foundations  established  by or on his  behalf,  and  the  heirs,  executors  or
administrators  of Robert M.  Goodfriend,  shall  acquire  in one or a series of
transactions,  whether  through  sale of stock or  merger,  more than 50% of the
outstanding  voting  securities  of the Company or any  successor  entity of the
Company, (ii) all or substantially all of the Company's assets are sold or (iii)
the shareholders of the Company approve a complete liquidation or dissolution of
the Company.

                  (f) "Change of Control  Date" shall mean (i) the closing  date
on which a Change of Control shall have occurred,  (ii) in the case of a sale of
all or substantially  all of the Company's  assets,  the closing date on which a
Change of Control shall have occurred after shareholder approval is obtained, or
(iii) in the case of complete  liquidation or  dissolution  of the Company,  the
date on which shareholder approval is obtained.



<PAGE>


                  (g) "Date of Termination"  shall have the meaning set forth in
Section 6(e).

                  (h) "Disability"  shall mean disability  whereby the Executive
is unable to render the  services  provided  for by this  Agreement by reason of
illness,   injury  or  incapacity  (whether  physical,   mental,   emotional  or
psychological)  for a period of either (i) ninety (90)  consecutive days or (ii)
one hundred eighty (180) days in any consecutive three hundred  sixty-five (365)
day period.

                  (i)  "Incentive  Bonus" shall have the meaning as set forth in
Section 5(c).

                  (j)  "Incentive  Plan"  shall have the meaning as set forth in
Section 5(c).

                  (k)  "Notice of  Termination"  shall  have the  meaning as set
forth in Section 6(d).

                  (l) "Qualified Plan" shall mean any retirement plan maintained
by the  Company  which is  intended  to meet the  requirements  of the  Internal
Revenue Code of 1986, as amended.

                  (m) "Subsidiary" shall mean any  majority-owned  subsidiary of
the Company.

                  (n) "Supplemental Payment Date" shall have the same meaning as
set forth in Section 7(c).

                  2. Employment. The Company has employed the Executive, and the
Executive  has agreed to continue to be employed by the Company,  as Senior Vice
President,  Marketing and Advertising of the Company. The Executive has held the
title of Senior Vice  President,  Marketing and Advertising of the Company since
July 7, 1997.

                  3. Term. The Executive shall be considered an at-will employee
and his employment may be terminated by either party subject to the  obligations
of the parties upon such termination as set forth in this Agreement.

                  4.       Position and Duties; Business Time.



<PAGE>


                  (a)  Position and Duties.  The  Executive  shall  continue his
service as Senior Vice  President,  Marketing and  Advertising of the Company or
another  position  which shall be either of  comparable  rank or a promotion and
shall  continue to have such  responsibilities  and duties as assigned to him by
the Chief Executive  Officer of the Company,  the Chief Operating Officer of the
Company or the Board from time to time.

                  (b) Business  Time.  The  Executive  agrees to devote his full
business  time to the  business  and  affairs of the Company and to use his best
efforts to perform faithfully and efficiently the  responsibilities  assigned to
him  hereunder,  to the extent  necessary  to discharge  such  responsibilities,
except for:

     (i) time spent in managing his  personal,  financial  and legal affairs and
serving on corporate,  civic or charitable  boards or  committees,  in each case
only if and to the extent not substantially  interfering with the performance of
such responsibilities, and

     (ii)  periods of vacation to which he is  entitled,  periods of illness and
other absences beyond his control.

It is  expressly  understood  and  agreed  that  the  continued  service  by the
Executive on any boards and  committees  on which he is serving or with which he
is otherwise associated immediately preceding the date hereof, or his service on
any other  boards  and  committees  shall not be  deemed to  interfere  with the
performance of the Executive's  services to the Company;  provided,  that in the
case of boards or committees on which the Executive is not currently serving the
Executive  provides  written  notice  of his  intention  to serve  and the Board
thereafter  approves such service  (other than  non-compensatory  positions with
local boards or  committees  e.g.  charitable,  chamber of commerce or homeowner
associations which shall not require approval).

                  5.  Compensation.  The  Executive  shall  be  entitled  to the
following  compensation  and  benefits for as long as the  Executive  remains an
employee of the Company:

                  (a) Existing  Employment  Contract.  The Executive and Company
acknowledge  that  all  the  terms  of the  existing  employment  contract  (the
"Existing  Employment  Contract") are in full force and effect and there has not
been any breach of such Existing Employment Contract.



<PAGE>


                  (b) Base Salary.  The  Executive  shall  receive a base salary
(the "Base  Salary")  payable  in equal  bi-weekly  installments  (or such other
installments  as are  provided  by the Company for  employees  generally)  at an
annual  rate  of   $205,000.00.   The  Company  shall  review  the  Base  Salary
periodically and in light of such review may, in its sole  discretion,  increase
(but not  decrease)  the Base  Salary  taking  into  account  any  change in the
Executive's responsibilities, increases in compensation of other executives with
comparable  responsibilities,  performance of the Executive and other  pertinent
factors,  and such adjusted Base Salary shall then  constitute the "Base Salary"
for purposes of this Agreement.

                  (c)  Short  Term  Incentive   Plan  Bonus.   The  Company  has
established a "Short Term Incentive Plan" (the "Incentive Plan") under which the
Executive  shall be  eligible to  participate  for each fiscal year he holds the
position  stated  in  Section  2 and  shall be  eligible  to  receive  an annual
incentive  target bonus of not less than 40% of Base Salary based on performance
and other specific objectives adopted by the Compensation Committee of the Board
(the "Incentive Bonus").

                  (d) Incentive and Savings Plans;  Retirement and Death Benefit
Programs.  The Executive  shall be entitled to  participate in all incentive and
savings plans and programs,  including stock option plans and other equity-based
compensation  plans, and in all employee  retirement,  executive  retirement and
executive  death  benefit  plans on a basis no less  favorable  than that  basis
generally available to executives of the Company holding comparable positions or
having comparable responsibilities.

                  (e) Other Benefit Plans.  The Executive,  his spouse and their
eligible  dependents  (as  defined  in,  and to the  extent  permitted  by,  the
applicable  plan), as the case may be, shall be entitled to participate in or be
covered under all medical,  dental,  group  disability,  group life,  severance,
accidental death and travel accident insurance plans and programs of the Company
to the extent such plans and programs are  generally  available to executives of
the Company holding comparable positions or having comparable responsibilities.

                  (f)      Other Perquisites.  The Executive shall also be 
entitled to:

     (i)  prompt  reimbursement  for all  reasonable  expenses  incurred  by the
Executive in accordance with the policies and procedures of the Company;

                           (ii)  three  (3)  weeks  paid  vacation,   such  paid
vacation time to be increased
(but not decreased) in accordance with Company policy;

     (iii) an automobile at least comparable to the model currently furnished by
the  Company  shall be  provided  by the  Company  with  expenses  to be paid in
accordance with the Company's policies and procedures with respect thereto; and

     (iv)  an  office  or  offices  suitable  for  an  executive   officer  with
secretarial  and  other  assistance  as  shall  reasonably  be  required  by the
Executive.

                  6.       Termination of Employment.

                  (a)   Disability;   Death.   The  Company  may  terminate  the
Executive's employment after having established the Executive's  Disability,  by
giving  to the  Executive  written  notice of its  intention  to  terminate  his
employment, and his employment with the Company shall terminate effective on the
thirtieth (30th) day after receipt of such notice if the Executive shall fail to
return to full-time performance of his duties within thirty (30) days after such
receipt. If the Executive dies during the term of this Agreement, his employment
hereunder shall be deemed to cease as of the date of his death.

                  (b) Voluntary  Termination by the  Executive.  Notwithstanding
anything in this  Agreement to the contrary,  the  Executive  may, upon not less
than thirty (30) days'  written  notice to the  Company,  voluntarily  terminate
employment for any reason (including retirement under the terms of the Company's
retirement plan as in effect from time to time).



<PAGE>


                  (c)  Termination  by the Company.  The Company at any time may
terminate the Executive's employment for Cause or without Cause.

                  (d) Notice of Termination.  Any termination by the Company for
Cause  or by  the  Executive  shall  be  communicated  by a  written  Notice  of
Termination  to the other party hereto given in accordance  with Section  14(c).
For purposes of this Agreement, a "Notice of Termination" means a written notice
given in the case of a  termination  for Cause which (i)  indicates the specific
termination  provision  in this  Agreement  relied  upon,  (ii)  sets  forth  in
reasonable  detail  the facts and  circumstances  claimed to provide a basis for
termination of the Executive's employment under the provision so indicated,  and
(iii) if the termination  date is other than the date of receipt of such notice,
specifies  the  termination  date (which date shall be not more than thirty (30)
days after the receipt of such notice).

                  (e) Date of  Termination.  For the purpose of this  Agreement,
the term "Date of Termination"  means (i) in the case of a termination for which
a Notice of  Termination  is  required,  the date of receipt  of such  Notice of
Termination or, if later,  the date specified  therein,  as the case may be, and
(ii) in all other  cases,  the actual date on which the  Executive's  employment
terminates.

                  7.   Obligations  of  the  Company  Upon   Termination.   Upon
termination of the Executive's  employment  with the Company,  the Company shall
have the following obligations:



<PAGE>


                  (a)  Death,  Disability  and  Retirement.  If the  Executive's
employment is  terminated by reason of the  Executive's  death,  Disability,  or
retirement on or after the attainment of age sixty-five  (65), the Company shall
have no further obligations to the Executive's legal  representatives under this
Agreement  other than  payment of the Accrued  Obligations.  If the  Executive's
employment is terminated by reason of the Executive's  death or Disability,  the
Company  shall  have the  additional  obligation,  subject  to the  terms of the
Incentive Plan and further  provided that the Executive has been employed by the
Company for the first six (6) months of the then applicable  fiscal year, to pay
a cash  amount  equal to a portion  of the  Incentive  Bonus,  the  product of a
fraction,  the  numerator of which is the number of days elapsed  since the date
the Incentive Plan began for the applicable  fiscal year through the date of the
Disability or the date of death of the Executive,  and the  denominator of which
is the total  number of days of the  applicable  fiscal year for such  Incentive
Plan.  Unless  otherwise  directed  by the  Executive  (or,  in the  case of the
Incentive Plan or a Qualified Plan, as may be required by such Incentive Plan or
Qualified  Plan) all Accrued  Obligations  shall be paid to the  Executive,  his
beneficiaries or his estate, as applicable,  in a lump sum in cash within thirty
(30) days of the Date of  Termination.  In the event of the  termination  of the
Executive by reason of retirement on or after the  attainment of age  sixty-five
(65), death or Disability,  he and/or his named  beneficiaries,  as the case may
be, shall be entitled to the benefits  available  through the Company  sponsored
plans and programs  designated  for such category of  termination on Schedule A.
With  regard  to the  termination  of the  Executive's  employment  by reason of
retirement on or after the attainment of age sixty-five (65) or Disability,  the
Company shall pay the premiums (to the same extent paid prior to the termination
of employment) for the continued  participation of the Executive for a period of
six (6) months after the Date of Termination  in any  individual  life insurance
policy on the same terms as the  Executive  and the Company  were  participating
prior to the Date of Termination. Further, with regard to the termination of the
Executive's  employment  by reason of the  Executive's  death,  retirement on or
after the  attainment of age sixty-five  (65) or Disability,  the Company shall,
for a period of six (6) months after the Executive's  Date of  Termination,  pay
the entire COBRA premium under any Company  medical and dental  program that the
Executive (and his spouse and eligible dependents) was participating in prior to
the  termination  of  employment.  The  Company's  premium  obligations  in  the
preceding two sentences shall exclude normal employee  contributions paid by the
Executive prior to the Date of Termination. In addition to the foregoing, in the
event of  termination  of the  Executive's  employment by reason of the death or
Disability of the  Executive,  all unvested  stock options held by the Executive
shall  become fully  vested,  effective  on the Date of  Termination,  and shall
thereafter be  exercisable  in accordance  with the provisions of the applicable
Option Plan (including, without limitation, Sections 5 and 6 thereof) and Option
Agreement.

                  (b)  Termination  by  the  Company  for  Cause  and  Voluntary
Termination by the Executive.  If the Executive's employment shall be terminated
for Cause or  voluntarily  terminated by the Executive the Company shall pay the
Executive the Accrued Obligations.  The Executive shall be paid all such Accrued
Obligations  in a lump  sum in cash  within  thirty  (30)  days  of the  Date of
Termination  and the Company shall have no further  obligations to the Executive
under this Agreement, unless otherwise required by a Qualified Plan or specified
pursuant  to a valid  election  to defer the receipt of all or a portion of such
payments made in accordance with any plan of deferred compensation  sponsored by
the Company.

                  (c) Other Termination of Employment. If the Company terminates
the  Executive's  employment  other than for  Cause,  death or  Disability,  the
Company shall pay and provide to the Executive the following:



<PAGE>


     (i) Severance Payment. The Company shall pay to the Executive in a lump sum
in  cash  or  certified  check  within  fifteen  (15)  days  after  the  Date of
Termination a severance payment equal to the sum of the following amounts (other
than amounts payable from the Incentive Plan or Qualified  Plans,  non-qualified
retirement plans and deferred compensation plans, which amounts shall be paid in
accordance with the terms of such plans):

                                    (A)     all Accrued Obligations;

                                    (B) a cash amount equal to six (6) months of
the Executive's Base Salary
at the rate in effect as of the date when the Notice of Termination was given;

                                    (C)  subject  to the terms of the  Incentive
Plan and further provided that
the  Executive  has been employed by the Company for the first six (6) months of
the then  applicable  fiscal  year,  a cash  amount  equal to a  portion  of the
Incentive Bonus, the product of a fraction, the numerator of which is the number
of days  elapsed  since the date the  Incentive  Plan  began for the  applicable
fiscal year through the date of such  Termination or termination  without Cause,
and the  denominator  of which is the  total  number  of days of the  applicable
fiscal year for such Incentive Plan.

In addition,  if the  Executive  has not accepted  employment  from a subsequent
employer  prior  to the  date  which  is  seven  (7)  months  from  the  Date of
Termination (the  "Supplemental  Payment Date"),  commencing on the Supplemental
Payment  Date the  Company  shall pay the  Executive  an  amount  equal to fifty
percent  (50%) of his  monthly  Base Salary at the rate in effect as of the date
when the Notice of Termination was given in equal monthly installments until the
earlier of (i) the payment of the sixth (6th) monthly  installment;  or (ii) the
date of the Executive's acceptance of employment from a subsequent employer. The
Executive shall notify the Company  immediately  upon his acceptance of any such
new  employment  if secured  prior to the payment by the Company of such six (6)
additional monthly installments.

                  (d)  Release.  As a condition  precedent to the receipt of any
termination  benefits  payable  to the  Executive  under  this  Section  7,  the
Executive  agrees to execute a general release among other things  releasing the
Company from any obligation or liability (other than those contained in Sections
7, 8, 9, 10, 11, 13 and 14 hereof,  to the extent an  obligation  under any such
section arose at or prior to the Date of Termination  and remains  unfulfilled).
Such release shall exclude the Executive's rights under any Qualified Plan.

                  (e)  Discharge  of  Company's  Obligations.   Subject  to  the
performance  of its  obligations  under Sections 7, 8, 9, 10, 11, 13 and 14 (and
then, only to the extent an obligation  under any such section arose at or prior
to the Date of Termination and remains  unfulfilled),  the Company shall have no
further  obligations  to the  Executive  under this  Agreement in respect of any
termination of employment.



<PAGE>


                  8.  Change  of  Control.  Upon the  occurrence  of a Change of
Control, the Company shall pay the Executive, as consideration for assisting the
Company in bringing  about a successful  transaction,  an amount equal to twelve
(12)  months  of the  Executive's  Base  Salary  at the rate in effect as of the
Change of Control  Date.  Such amount  shall be payable in a lump sum in cash or
certified check within five (5) days after the Change of Control Date.

                  9. Non-exclusivity of Rights.  Nothing in this Agreement shall
prevent  or limit the  Executive's  continuing  or future  participation  in any
benefit,  bonus,  incentive or other plan or program provided by the Company and
for  which  the  Executive  may  qualify,  nor shall  anything  herein  limit or
otherwise  prejudice  such  rights  as the  Executive  may have  under any other
agreements  with  the  Company,  including,  but not  limited  to  stock  option
agreements.  Amounts  which  are  vested  benefits  or which  the  Executive  is
otherwise  entitled  to receive  under any plan or program of the  Company at or
subsequent to the Date of Termination  shall be payable in accordance  with such
plan or program.

                  10. Full  Settlement.  The Executive shall not be obligated to
seek  other  employment  by way of  mitigation  of the  amounts  payable  to the
Executive under any of the provisions of this Agreement.

                  11.  Arbitration  of  Disputes.  In the event that a claim for
payment or  benefits  under this  Agreement  is  disputed,  the  Company and the
Executive  agree to submit such  dispute to final and binding  arbitration  with
United States Arbitration and Mediation,  Inc. ("USAM") in Knoxville,  Tennessee
or such other  arbitration  firm as the Company and the Executive shall mutually
agree.  Either party wishing to arbitrate any claim  hereunder  shall notify the
other party and USAM in writing whereupon USAM shall select a neutral arbitrator
and shall schedule an arbitration  hearing within thirty (30) days of receipt of
such notice of  arbitration.  The  arbitration  shall be conducted in accordance
with the rules and procedures of USAM.  The parties agree that any  arbitrator's
award may be presented to a court of competent jurisdiction and judgment entered
thereon.

                  12.      Confidential Information and Nonsolicitation.



<PAGE>


                  (a) The Executive  shall hold in a fiduciary  capacity for the
benefit of the  Company all secret or  confidential  information,  knowledge  or
data,  including without limitation all trade secrets,  relating to the Company,
and its  business,  (i) obtained by the Executive  during his  employment by the
Company, and (ii) which is not otherwise publicly known (other than by reason of
an  unauthorized  act by the  Executive)  and is  subject  to  efforts  that are
reasonable under the circumstances to maintain its secrecy. After termination of
the Executive's  employment with the Company,  the Executive shall not,  without
the prior written consent of the Company,  unless compelled pursuant to an order
of a court or other body having  jurisdiction  over such matter,  communicate or
divulge any such information, knowledge or data to anyone other than the Company
and those designated by it.

                  (b) Upon  termination  of the  Executive's  employment for any
reason, the Executive,  for the twelve (12) month period following the Notice of
Termination,  shall not, on his own behalf or on behalf of any person or entity,
directly or indirectly  solicit or aid in the  solicitation  of any employees of
the Company to leave their employment.  In the event the Executive  violates the
terms of Section  12(a) or this Section  12(b),  the Employee  shall forfeit the
right to all salary and benefits  that the Executive  and/or his family  members
were otherwise  entitled  pursuant to the terms of Section 7. Also, in the event
that this Section 12 is  determined  to be  unenforceable  in part,  it shall be
construed to be enforceable to the maximum extent permitted by law.

                  (c) The Executive agrees that the covenants of confidentiality
and non-solicitation contained in this Section 12 are reasonable covenants under
the circumstances and necessary to protect the business interests and properties
of the Company.  The Executive  agrees that  irreparable loss and damage will be
suffered  by the  Company  should  the  Executive  breach  any of the  covenants
contained  in this  Section  12.  Accordingly,  the  Executive  agrees  that the
Company,  in addition  to all  remedies  provided at law or in equity,  shall be
entitled  to  a  temporary   restraining   order  and  temporary  and  permanent
injunctions to prevent a breach or  contemplated  breach of any of the covenants
contained in this Section 12.

                  13.      Successors.

                  (a) This Agreement is personal to the Executive  and,  without
the  prior  written  consent  of the  Company,  shall not be  assignable  by the
Executive  otherwise than by will or the laws of descent and distribution.  This
Agreement  shall inure to the benefit of and be enforceable  by the  Executive's
legal representatives.

                  (b)  This  Agreement  shall  inure  to the  benefit  of and be
binding  upon the Company and its  successors.  The  Company  shall  require any
successor  to all or  substantially  all of the  business  and/or  assets of the
Company,  whether  direct  or  indirect,  by  purchase,  merger,  consolidation,
acquisition  of stock,  or  otherwise,  expressly to assume and agree to perform
this Agreement in the same manner and to the same extent as the Company would be
required to perform if no such succession had taken place.



<PAGE>


                  14       Miscellaneous.

                  (a) Applicable  Law. This  Agreement  shall be governed by and
construed in accordance with the laws of the State of Tennessee, applied without
reference to principles of conflict of laws.

                  (b) Amendments.  This Agreement may not be amended or modified
otherwise  than by a written  agreement  executed by the parties hereto or their
respective successors and legal representatives.

                  (c) Notices.  All notices and other  communications  hereunder
shall be in writing and shall be given by hand  delivery to the other party,  by
overnight delivery or by registered or certified mail, return receipt requested,
postage prepaid, addressed as follows:

                  If to the Executive:      at the address listed on the last
 page hereof

                  If to the Company:        Goody's Family Clothing, Inc.
                                            400 Goody's Lane
                                            P.O. Box 22000
                         Knoxville, Tennessee 37933-2000
                           Attention: General Counsel

(with a copy to the  attention  of the  Secretary  or to such  other  address as
either  party  shall  have  furnished  to the  other in  writing  in  accordance
herewith).  Communications  delivered by hand or by overnight  delivery shall be
deemed received on the date of delivery and communications sent by registered or
certified  mail  shall be deemed  received  three (3)  business  days  after the
sending thereof.

                  (d) Tax Withholding. The Company may withhold from any amounts
payable  under this  Agreement  such  federal,  state or local taxes as shall be
required to be withheld pursuant to any applicable law or regulation.

                  (e) Severability.  The invalidity or  unenforceability  of any
provision of this Agreement shall not affect the validity or  enforceability  of
any other provision of this Agreement.

                  (f) Captions.  The captions of this  Agreement are not part of
the provisions hereof and shall have no force or effect.



<PAGE>


                  (g) Entire  Agreement.  This  Agreement  expresses  the entire
understanding  and agreement of the parties  regarding the terms and  conditions
governing the Executive's  employment with the Company, and all prior agreements
governing  the  Executive's  employment  with the  Company  (including,  without
limitation,  the Existing  Employment  Contract)  shall have no further  effect;
provided,  however,  that except as specifically  provided herein,  the terms of
this Agreement do not supersede the terms of any grant or award to the Executive
under  any stock  option or profit  sharing  program  of the  Company  except as
specifically  set  forth  in  Section  7(a)  with  respect  to the  vesting  and
exercisability of stock options.

<PAGE>



97295-11 ~ 03833-0 ~ 12/02/98 ~ 09:26AM
                  IN WITNESS  WHEREOF,  the  Executive has hereunto set his hand
and the  Company  has caused  this  Agreement  to be executed in its name on its
behalf,  and its  corporate  seal to be  hereunto  affixed  and  attested by its
Secretary, all effective as of the day and year first above written.

                                               GOODY'S FAMILY CLOTHING, INC.


                                               By:       /s/ Harry M. Call
                                                             Harry M. Call
                                 Title:   President and Chief Operating Officer
ATTEST:

______/s/ Regis J. Hebbeler___________
         Regis J. Hebbeler
Title:__Assistant Secretary_________

(CORPORATE SEAL)

                                                EXECUTIVE:  Stanley B. Latacha

                                                       /s/ Stanley B. Latacha
                                                Name:    Stanley B. Latacha

                                    Address:   843 Weatherly Hills Blvd.
                                                  Knoxville, TN 37922



<PAGE>


                            SCHEDULE A - STAN LATACHA


         The following is a summary list of benefits  available to the Executive
upon  termination  of the  Executive's  employment by reason of retirement on or
after the attainment of age sixty-five (65), death or Disability through Company
sponsored  plans and programs as of the date of this  Agreement.  Nothing herein
shall preclude the Company from amending, altering, suspending, discontinuing or
terminating any of such plans and programs in compliance with applicable law and
regulation.

COVERAGE TYPE     .........                                     BENEFIT AMOUNT

Group Life Insurance.......         --     Basic                      $205,000
                  .........                High Option                      $0



Group Disability Insurance.--              Basic 2 year                $5,000
                  .........                High Option                     $0
                  .........                (benefit for 5 years)


Coverage  by group  life  and  disability  insurance  policies  terminates  upon
termination of the Executive's  employment for any reason,  except death (in the
case of life  insurance) and  disability (in the case of disability  insurance).
The  Executive's  beneficiaries  are  entitled to benefits  under the group life
insurance  policy if the  Executive  dies  during  the  period  he is  receiving
disability payments as a result of such disability.

In  addition,  the  Company  has a  401(k)  plan  in  which  the  Executive  may
participate on a voluntary basis.  Company  contributions  therein on his behalf
vest in accordance  with the terms of the 401(k) plan,  which provides that such
contributions become immediately vested in the event of death during the term of
employment.  Upon  termination  for any reason,  the Executive must withdraw his
vested funds by the end of the following fiscal quarter.


<PAGE>