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                                                                    EXHIBIT 10.9



                              AMENDED AND RESTATED
                              CLOSING PRICE OPTION

         This AMENDED AND RESTATED STOCK OPTION AGREEMENT (this "Agreement") is
made as of April 14, 2000 between Hanover Direct, Inc., a Delaware corporation
(the "Company"), and Rakesh K. Kaul (the "Executive").

         WHEREAS, the Compensation Committee of the Company's Board of
Directors (the "Compensation Committee") has heretofore adopted and the
Company's shareholders have heretofore approved and ratified the 2000 Long-Term
Incentive Plan for Rakesh K. Kaul (the "Plan");

         WHEREAS, the Plan provides for certain modifications to the terms of
the Closing Price Option granted to Executive as part of the Long-Term
Incentive Plan for Rakesh K. Kaul dated August 23, 1996 (the "Old Plan")
subject to the terms set forth herein.

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

         1. The Company hereby evidences and confirms the grant to the
Executive on August 23, 1996 (the "Date of Grant") by the Compensation
Committee of an option (the "Option") to purchase 2,000,000 shares of Common
Stock (the "Shares") at an option price of $1.15625 per share, representing the
fair market value of the Common Stock on the date thereof. The Option shall
expire on March 7, 2006 (the "Expiration Date"), subject to earlier
cancellation or termination as provided herein.

         2.  Subject to the other provisions contained herein regarding the
exercisability of the Option, this Option shall become exercisable only as
provided in this Section 2.

         (a)  Except as otherwise provided in paragraph (b), this Option shall
vest and become exercisable in equal parts on each successive anniversary of
March 6, 2000 over the three year period commencing on March 6, 2000 provided
that Executive remains employed by the Company and/or its affiliates or
subsidiaries (collectively the "Company").

         (b)  Notwithstanding the foregoing, the Option shall immediately vest
and become exercisable in full (i) upon the termination of Executive's
employment by reason of death, Disability, by Company without Cause or by
Executive within ninety days of an occurrence constituting Good Reason (as such
terms are defined in the Employment Agreement dated as of March 6, 2000 between
Executive and the Company (the "Employment Agreement")), (ii) upon a Change of
Control (as such term is defined in the Hanover Direct, Inc. Thirty-Six Month
Compensation Continuation Plan (the "Change of Control Plan")), or (iii) upon
satisfaction of the condition, as certified by the Compensation Committee (such
certification not to be improperly withheld), that the average closing price of
the Common Stock on the American



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Stock Exchange composite tape or other recognized market source, as determined
by the Compensation Committee, has obtained an average of $4.50 per share during
any period of 91 consecutive calendar days commencing after August 23, 1996 and
ending on or before March 7, 2002.

         3. In the event of a termination of the Executive's employment with
the Company while any portion of the Option remains unexercised, the
Executive's rights to exercise the Option shall be exercisable only as follows:

         (i) Involuntary Termination. If the Executive's employment is
involuntarily terminated by the Company other than for Cause or Executive
resigns for Good Reason (as such terms are defined in the Employment
Agreement), his Option may be exercised during the six-month period following
the later of (x) such termination or (y) the registration of the Shares
underlying the Option.  For purposes hereof, the provisions of the Employment
Agreement shall apply in determining whether the Executive's employment has
been involuntarily terminated by the Company other than for Cause or if
Executive has resigned with Good Reason.

         (ii) Death.  If the Executive's employment terminates by reason of
death, the Option may be exercised during the twelve-month period following
such termination.

         (iii) Disability. If the Executive's employment terminates by reason
of Disability (as such term is defined in the Employment Agreement), the Option
may be exercised during the twelve-month period following such termination. For
purposes hereof, the provisions of the Employment Agreement shall apply in
determining whether the Executive's employment has been terminated due to a
Disability.

         (iv) Change of Control.  If Executive's employment terminates other
than for Cause or if Executive resigns with Good Reason (as such terms are
defined in the Change of Control Plan) within twenty-four months of a Change of
Control (as such term is defined in the Change of Control Plan), the Option may
be exercised during the twelve-month period following such termination.  For
purposes hereof, the provisions of the Change of Control Plan shall apply in
determining whether a Change of Control has occurred.

         (v) Termination in Other Circumstances. If the Executive's employment
terminates in circumstances not described in clauses (i) through (iv), the
Executive may, within 30 days following such termination, exercise the Option
with respect to such number of Shares as to which the Option is exercisable on
the date of termination, as determined pursuant to Section 2.

Notwithstanding the foregoing, the Option shall in no event be exercisable in
whole or in part after the Expiration Date.

         4. (a) Except as provided in paragraph (b), the Option is not
transferable by the Executive other than by will or the laws of descent and
distribution and is exercisable, during the Executive's lifetime, only by the
Executive.

         (b) Notwithstanding the provisions of paragraph (a):



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         (i) In the event of the Executive's incapacity, the Option may be
exercised by a conservator, guardian, or the agent under a Durable Power of
Attorney;

         (ii) Upon the Executive's death, the Option is transferable by will,
by a revocable or irrevocable trust established by the Executive, or by a
written beneficiary designation executed by the Executive and delivered to the
Company prior to the Executive's death;

         (iii) The Executive may transfer the Option to the Executive's spouse
and/or issue or trusts for the benefit of the Executive, the Executive's
spouse, and/or the Executive's issue.

         5.  In order to exercise the Option, in whole or in part, the
Executive shall give written notice to the Company, specifying the number of
Shares to be purchased and the purchase price to be paid, and accompanied by
the payment of the purchase price. Such purchase price may be paid in cash, a
certified check, or a bank check payable to the Company, or in whole shares of
Common Stock evidenced by negotiable certificates, valued at their fair market
value on the date of exercise, or in a combination of the foregoing.
Alternatively, the Option may be exercised, in whole or in part, by delivering
a properly executed exercise notice together with irrevocable instructions to a
broker to deliver promptly to the Company the amount of sale or loan proceeds
necessary to pay the purchase price, and such other documents as the
Compensation Committee may require. Upon receipt of payment, the Company shall
deliver to the Executive (or to any other person entitled to exercise the
Option) a certificate or certificates for such Shares. If certificates
representing shares of Common Stock are used to pay all or part of the purchase
price of the Option, separate certificates shall be delivered by the Company
representing the same number of shares as each certificate so used and an
additional certificate shall be delivered representing the additional shares to
which the Executive is entitled as a result of exercise of the Option.

         6.  The Option shall be exercised only with respect to full Shares; no
fractional Shares shall be issued.

         7.  As a condition to the issuance of Shares under the Option, the
Executive agrees to remit to the Company at the time of exercise any taxes
required to be withheld by the Company under the applicable laws or other
regulations of any governmental authority, whether federal, state of local, and
whether domestic or foreign. The Company shall promptly remit such taxes to the
applicable governmental authority.

         8.  If the Executive so requests in writing, shares purchased upon
exercise of the Option may be issued in the name of the Executive and another
person jointly with the right of survivorship, or in the name of a revocable
trust of which the Executive is the grantor.

         9. The Option does not qualify as an incentive stock option under
Section 422 of the Internal Revenue Code.

         10. This Option shall be binding upon and inure to the benefit of any
successor or assignee of the Company and to any executor, administrator, legal
representative, legatee, or distributee or transferee entitled by law or the
provisions of the Plan to the Executive's rights hereunder.



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         11. The Option is subject in all respects to the terms of the Plan,
the provisions of which are incorporated in this Agreement by reference.

         12. This Agreement is entered into, and shall be construed and
enforced, under the laws of the State of New York, and shall not be modified
except by written agreement signed by the parties hereto.

         13. This Agreement supercedes any prior agreements regarding the
Closing Price Option, including the Stock Option Agreement between Hanover
Direct, Inc. and Kaul dated August 23, 1996 concerning the subject matter
hereof.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

                                 HANOVER DIRECT, INC.


                                 By:  /s/ Brian C. Harriss
                                    -------------------------------------


                                 Its: Senior Vice President
                                     ------------------------------------


                                      /s/ Rakesh K. Kaul
                                 ----------------------------------------
                                 Rakesh K. Kaul






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