Document:

<PAGE>   1

                                                                     EXHIBIT 4.1

                      RESTATED CERTIFICATE OF INCORPORATION

                                       OF

                              THE CATO CORPORATION

         The Cato Corporation, a corporation organized and existing under the
laws of the State of Delaware, hereby certifies as follows:

         1. The name of the corporation is "The Cato Corporation," and the name
under which the corporation was originally incorporated is "Cato Stores, Inc."
The date of filing its original Certificate of Incorporation with the Secretary
of State was March 28, 1946.

         2. The text of the Restated Certificate of Incorporation as amended or
supplemented heretofore is further amended hereby to read as herein set forth in
full:

         FIRST. The name of the Corporation is

                              THE CATO CORPORATION

         SECOND. Its registered office in the State of Delaware is located at
         1209 Orange Street, in the City of Wilmington, County of New Castle.
         The name and address of its resident agent is The Corporation Trust
         Company, 1209 Orange Street, Wilmington, Delaware, 19801.

         THIRD. The purpose of the corporation is to engage in any lawful act or
         activity for which corporations may be organized under the General
         Corporation Law of Delaware.

         FOURTH (A) The total number of shares of all classes of capital stock
         which the Corporation shall have the authority to issue is 65,100,000,
         consisting of:

                  (1) 50,000,000 shares of Class A Common Stock having a par
         value of $.03 1/3 per share,

                  (2) 15,000,000 shares of Class B Common Stock having a par
         value of $.03 1/3 per share, and

                  (3) 100,000 shares of Preferred Stock having a par value of
         $100.00 per share.

         The issued shares of the Corporation's capital stock as of the date of
         filing of this Amendment shall be reclassified as shares of Class A
         Common Stock, without any further action required by the holders
         thereof.

                                       1

<PAGE>   2

         (B) Except to the extent otherwise provided below, the holders of Class
         A Common Stock and the Class B Common Stock shall have the same powers,
         designations, preferences and participation rights and privileges. The
         holders of Class A Common Stock and Class B Common Stock shall have the
         following specific powers, designations, preferences, and relative
         participating rights and privileges:

                  (1) Each holder of Class A Common Stock shall be entitled to
                  one (1) vote per share of Class A Common Stock standing in his
                  name on the transfer books of the Corporation, and each holder
                  of Class B Common Stock shall be entitled to ten (10) votes
                  per share of Class B Common Stock standing in his name on the
                  transfer books of the Corporation, with respect to each matter
                  to be voted upon.

                  (2) The holders of Class A Common Stock and Class B Common
                  Stock shall have the right to vote, but not as separate
                  classes except to the extent required by law or as otherwise
                  provided in subsection (B) (3) below, upon all matters
                  submitted to the stockholders of the Corporation.

                  (3) In addition to any other vote required by law, the
                  Corporation may not alter or change, by rights, preferences,
                  privileges, restrictions, dividend rights, voting power or
                  other powers given to the holders of Class A Common Stock and
                  Class B Common stock pursuant to this Article Fourth other
                  than by the affirmative vote of not less than sixty-six and
                  two thirds (66 2/3) percent of all the votes entitled to be
                  voted by the holders of each class of stock to be adversely
                  affected thereby voting as a separate class, except that the
                  Corporation may increase the total number of authorized shares
                  of Class A Common Stock or Class B Common Stock that may be
                  issued by the corporation by the affirmative vote of a
                  majority of all the votes entitled to be voted by the holders
                  of Class A Common Stock and Class B Common Stock voting
                  together, without regard to class.

                  (4) Subject to the rights of any holders of Preferred Stock,
                  holders of Class A Common Stock and Class B Common Stock shall
                  be entitled to receive such dividends and other distributions
                  in cash, stock or property of the Corporation as may be
                  declared thereon by the Board of Directors from time to time
                  out of assets or funds of the Corporation legally available
                  therefor; provided, however, that:

                           (a) No cash dividend may be declared and paid on the
                  Class B Common Stock unless a dividend of an equal or greater
                  amount of cash per share has been declared and paid on the
                  Class A Common Stock.

                           (b) In the event of any dividend or other
                  distribution payable in stock of the Corporation, other than
                  Preferred Stock, including a distribution pursuant to any
                  stock split or division, which occurs after the initial
                  issuance of Class B Common Stock by the Corporation, only
                  shares of Class A Common Stock shall

                                       2

<PAGE>   3

                  be distributed with respect to Class A Common Stock, and the
                  Corporation's Board of Directors, in its discretion, shall
                  determine whether to distribute shares of Class A or Class B
                  Common Stock, in an amount per share equal to the amount per
                  share distributed with respect to the Class A Common Stock,
                  with respect to Class B Common Stock.

                           (c) In the case of any combination, reclassification
                  or recapitalization of the Class A Common Stock, the shares of
                  Class B Common stock shall also be combined, reclassified or
                  recapitalized so that the number of shares of Class B Common
                  stock outstanding immediately following such combination
                  reclassification or recapitalization shall bear the same
                  relationship to the number of shares of Class B Common Stock
                  outstanding immediately prior to such combination,
                  reclassification or recapitalization as the number of shares
                  of Class A Common Stock outstanding immediately following such
                  combination, reclassification or recapitalization bears to the
                  number of shares of Class A Common Stock outstanding
                  immediately prior to such combination, reclassification or
                  recapitalization.

                           (d) Shares of Class B Common stock outstanding at any
                  time shall not be reverse split or combined, whether by
                  reclassification, recapitalization or otherwise, so as to
                  decrease the number of shares thereof issued and outstanding
                  unless at the same time the shares of Class A Common Stock are
                  reverse split or combined so that the number of shares of
                  Class A Common Stock outstanding immediately following such
                  reclassification or recapitalization shall bear the same
                  relationship to the number of shares of Class A Common Stock
                  outstanding immediately prior to such reclassification or
                  recapitalization as the number of shares of Class B Common
                  Stock outstanding immediately following such reclassification
                  or recapitalization bears to the number of shares of Class B
                  Common Stock outstanding immediately prior to such
                  reclassification or recapitalization.

                  (5) Any outstanding shares of Class B Common Stock shall be
                  convertible on or after July 1, 1988 into fully paid and
                  nonassessable shares of Class A Common Stock at the option of
                  the holders thereof on a one share for one share basis. In
                  order for a stockholder to effect any such conversion; such
                  stockholder must furnish the Corporation with a written notice
                  of the request for conversion, which notice shall be addressed
                  to the principal office of the Corporation or to the
                  Corporation's designation transfer agent, shall state the
                  number of shares of Class B Common Stock to be converted into
                  shares of Class A Common Stock, shall state the name of the
                  person(s) in whose name(s) the shares of Class A Common Stock
                  are to be registered and shall be accompanied by a certificate
                  or certificates representing such shares, properly endorsed
                  and ready for transfer. A conversion shall be deemed to be
                  made (and the holder of such shares shall be deemed to be the
                  holder of record of an equal number of shares of Class A
                  Common Stock) on

                                       3

<PAGE>   4

                  the close of business of the date when the Corporation or
                  transfer agent has received the prescribed written notice and
                  required certificate or certificates, properly endorsed and
                  ready for transfer. The Corporation hereby reserves and shall
                  at all times reserve and keep available out of its authorized
                  and unissued shares of Class A Common Stock, for the purposes
                  of effecting conversion such number of duly authorized shares
                  of Class A Common Stock as shall from time to time be
                  sufficient to effect the conversion of all outstanding shares
                  of Class B Stock.

                  (6) In the event of a liquidation or dissolution of the
                  Corporation, or a winding up of its affairs, whether voluntary
                  or involuntary, or a merger or consolidation of the
                  Corporation, after payment or provision for payment of the
                  debts or liabilities of the Corporation and the amounts to
                  which holders of the Preferred Stock shall be entitled,
                  holders of Class A Common Stock shall be entitled to receive
                  out of the net assets of the Corporation, the amount of $1.00
                  per share, prior to any distribution to be made with respect
                  to Class B Common Stock. After such payment or provision for
                  such payment to the holders of Class A Common Stock, the
                  holders of Class A Common stock and the holders of Class B
                  Common Stock shall be entitled to share ratably (i.e., an
                  equal amount of assets for each share of either Class A Common
                  Stock or Class B Common Stock) in the remaining assets of the
                  Corporation.

         (C) (1) No person holding shares of Class B Common Stock of record
         (hereinafter called a "Class B Holder") may transfer, and the
         Corporation shall not register the transfer of, such shares of Class B
         Common Stock, as Class B Common Stock, whether by sale, assignment,
         gift, bequest, appointment or otherwise, except to a Permitted
         Transferee (as hereinafter defined). Shares of Class B Common Stock
         transferred to any party other than a Permitted Transferee (as
         hereinafter defined) shall be converted into shares of Class A Common
         Stock as provided by subsection (4) of this Section C. A Permitted
         Transferee shall mean, with respect to each person from time to time
         shown as the record holder of shares of Class B Common Stock:

                           (a) In the Case of a Class B Holder who is a natural
                  person;

                                    (i) any lineal descendant of such Class B
                                    Holder (the Class B Holder and such lineal
                                    descendants herein collectively referred to
                                    as "Class B Holder's Family Members");

                                    (ii) The trustee of a trust (including a
                                    voting trust) principally for the benefit of
                                    such Class B Holder and/or one or more of
                                    his or her Permitted Transferees described
                                    in each subclause of this clause (a) other
                                    than this subclause (ii), provided that such
                                    trust may also grant a general or special
                                    power of appointment to one or more of

                                       4

<PAGE>   5

                                    such Class B Holder's Family Members and may
                                    permit trust assets to be used to pay taxes,
                                    legacies and other obligations of the trust
                                    or of the estates of one or more of such
                                    Class B Holder's Family Members payable by
                                    reason of the death of any of such Family
                                    Members:

                                    (iii) A corporation if all of the
                                    outstanding capital stock of such
                                    corporation which is entitled to vote for
                                    the election of directors is owned by, or a
                                    partnership if all of the partners are, and
                                    all of the beneficial interests in the
                                    partnership are owned by, the Class B Holder
                                    or his or her permitted Transferees
                                    determined under this clause (a), provided
                                    that if by reason of any change in the
                                    ownership of such stock or partnership
                                    interests, such corporation or partnership
                                    would no longer qualify as a Permitted
                                    Transferee, all shares of Class B Common
                                    Stock then held by such corporation or
                                    partnership shall, upon the election of the
                                    Corporation given by written notice to such
                                    corporation or partnership, without further
                                    act be converted into a like number of
                                    shares of common Stock effective upon the
                                    date of the giving of such notice, and stock
                                    certificates formerly representing such
                                    shares of Class B Common stock shall
                                    thereupon and thereafter be deemed to
                                    represent the like number of shares of
                                    common Stock; and

                                    (iv) The estate of such Class B Holder.

                           (b) In the case of a Class B Holder holding shares of
                  Class B Common Stock as trustee pursuant to a trust (other
                  than a trust described in clause (c) below), Permitted
                  Transferee means (i) any person transferring Class B Common
                  Stock to such trust and (ii) any Permitted Transferee of any
                  such transferor determined pursuant to clause (a) above.

                           (c) In the case of a Class B Holder holding the
                  shares of Class B Common Stock in question as trustee pursuant
                  to a trust which was irrevocable on the record date for
                  determining the persons to whom the Class B Common Stock is
                  first issued by the Corporation, Permitted Transferee means
                  (i) any person to whom or for whose benefit principal may be
                  distributed either during or at the end of the term of such
                  trust whether by power of appointment or otherwise and (ii)
                  any Permitted Transferee of any such person determined
                  pursuant to clause (a) above.

                           (d) In the case of a Class B Holder which is a
                  partnership or corporation acquiring record and beneficial
                  ownership of the shares

                                       5

<PAGE>   6

                  of Class B Common Stock in question upon its initial issuance
                  by the Corporation, Permitted Transferee mean (i) any partner
                  of such partnership, or stockholder of such corporation, as of
                  the date of the initial issuance of the shares of Class B
                  Common Stock, and (ii) any Permitted Transferee of any such
                  person, partner, or stockholder referred to in subclause (i)
                  of this clause (d).

                           (e) In the case of a Class B Holder which is a
                  corporation or partnership (other than a corporation or
                  partnership described in clause (d) above) holding record and
                  beneficial ownership of the shares of Class B Common Stock in
                  question, Permitted Transferee means (i) any person
                  transferring such shares of Class B Common Stock to such
                  corporation or partnership and (ii) any Permitted Transferee
                  of any such transferor determined under clause (a) above.

                           (f) In the case of a Class B Holder which is the
                  estate of a deceased Class B Holder, or which is the estate of
                  a bankrupt or insolvent Class B Holder, which holds record and
                  beneficial ownership of the shares of Class B Common Stock in
                  question, Permitted Transferee means a permitted Transferee of
                  such deceased, bankrupt or insolvent Class B Holder as
                  determined pursuant to clause (a), (b), (c), (d) or (e) above,
                  as the case may be.

                           (g) Any employee benefit plan for the benefit of the
                  employees of the Corporation (a "Plan").

                           (h) In the case of a Class B Holder which is a Plan,
                  Permitted Transferee includes any beneficiary of such plan to
                  whom shares of stock of the Corporation may be distributed,
                  but only as such shares are distributable.

                  (2) Notwithstanding anything to the contrary set forth herein,
         any Class B Holder may pledge such Holder's shares of Class B Common
         Stock to a pledge pursuant to a bona fide pledge of such shares as
         collateral security for indebtedness due to the pledge, provided that
         such shares shall not be transferred to or registered in the name of
         the pledge and shall remain subject to the provisions of this Section
         C. In the event of foreclosure or other similar action by the pledge,
         such pledged shares of Class B Common stock may only be transferred to
         a Permitted Transferee of the pledge or converted into shares of Common
         Stock, as the pledge may elect.

                  (3) For purposes of this Section C:

                                       6

<PAGE>   7

                           (a) The relationship of any person that is derived by
                  or through legal adoption shall be considered a natural one.

                           (b) Each joint owner of shares of Class B Common
                  Stock shall be considered a "class B Holder" of such shares.

                           (c) A minor for whom shares of Class B Common Stock
                  are held pursuant to a Uniform Gifts to Minors Act or similar
                  law shall be considered a Class B Holder of such shares.

                           (d) Unless otherwise specified, the term "person"
                  means both natural persons and legal entities.

                           (e) Without derogating from the election conferred
                  upon the Corporation pursuant to subclause (iii) of clause (a)
                  above, each reference to a corporation shall include any
                  successor corporation resulting from merger or consolidation
                  and each reference to a partnership shall include any
                  successor partnership resulting from the death or withdrawal
                  of a partner.

                  (4) Any transfer of shares of Class B Common Stock not
         permitted hereunder shall result in the conversion of the transferee's
         shares of Class B Common Stock into shares of Class A Common Stock,
         effective as of the date on which certificates representing such shares
         are presented for transfer on the books of the Corporation. The
         Corporation may, in connection with preparing a list of stockholders
         entitled to vote at any meeting of stockholders, or as a condition to
         the transfer or the registration of shares of Class B Common Stock on
         the Corporation's books require the furnishing of such affidavits or
         other proof as it deems necessary to establish that any person is the
         beneficial owner of shares of Class B Common Stock or is a Permitted
         Transferee.

                  (5) Shares of Class B Common Stock shall be registered in the
         names of the beneficial owners thereof and not in "street" or "nominee"
         name. For this purpose, a "beneficial owner" of any shares of Class B
         Common Stock shall mean a person who, or an entity which possesses the
         power, either singly or jointly, to direct the voting or disposition of
         such shares. The corporation shall note on the certificates for shares
         of Class B Common stock that there are restrictions on the transfer and
         registration of transfer imposed by Article Fourth, Section C hereof.

         (D) The Board of Directors is expressly authorized, subject to the
         limitations prescribed by law, to provide for the issuance of the
         Preferred Stock in series, and to fix by resolution or resolutions
         providing for the issue of any series

                                       7

<PAGE>   8

         the number of shares included in such series and the designations,
         relative powers, preferences and rights, and the qualifications,
         limitations or restrictions thereof.

         FIFTH. No holder of shares of the capital stock of any class of the
         corporation shall have any pre-emptive or preferential right of
         subscription to any shares of any class of stock of the corporation,
         whether now or hereafter authorized, or to any bonds, debentures or
         other securities convertible into stock of any class, and all such
         additional shares of stock, bonds, debentures or other securities
         convertible into stock may be issued and disposed of by the Board of
         Directors to such person or persons and on such terms and for such
         consideration (so far as may be permitted by law) as the Board of
         Directors, in its absolute discretion, may deem advisable.

         SIXTH. The corporation is to have perpetual existence.

         SEVENTH. The private property of the stockholders shall not be subject
         to the payment of corporate debts to any extent whatever.

         EIGHTH. Whenever a compromise or arrangement is proposed between this
         corporation and its creditors or any class of them, and/or between this
         corporation and its stockholders or any class of them, any court of
         equitable jurisdiction within the State of Delaware may, on the
         application in a summary way of this corporation or of any creditor or
         stockholder thereof, or on the application of any receiver or receivers
         appointed for this corporation under the provisions of Section 291 of
         Title 8 of the Delaware Code or on the application of trustees in
         dissolution or of any receiver or receivers appointed for this
         corporation under the provisions of Section 279 of Title 8 of the
         Delaware Code, order a meeting of the creditors or class of creditors,
         and/or of the stockholders or class of stockholders of this
         corporation, as the case may be, to be summoned in such manner as the
         said court directs. If a majority in number representing three-fourths
         in value of the creditors or class of creditors, and/or of the
         stockholders or class of stockholders of this corporation, as the case
         may be, agree to any compromise or arrangement and to any
         reorganization of this corporation as consequence of such compromise or
         arrangement, the said compromise or arrangement and the said
         reorganization shall, if sanctioned by the court to which the said
         application has been made, be binding on all the creditors or class of
         creditors, and/or on all the stockholders or class of stockholders of
         this corporation, as the case may be, and also on this corporation.

         NINTH. Meetings of stockholders may be held without the State of
         Delaware, if the bylaws so provide. The books of the corporation may be
         kept (subject to any provision contained in the statutes) outside of
         the State of Delaware at such place or places as may be from time to
         time designated by the Board of Directors or in the bylaws of the
         corporation.

                                       8

<PAGE>   9

         TENTH. The provisions of this Certificate of Incorporation shall not be
         modified, revised, altered or amended, repealed or rescinded in whole
         or in part, without the affirmative vote of sixty-six and two-thirds
         (66 2/3) percent of the votes to which the holders of the outstanding
         stock are entitled.

         ELEVENTH. (A) A director of the Corporation shall not be personally
         liable to the Corporation or its stockholders for monetary damages for
         breach of fiduciary duty as a director, except for liability (i) for
         any breach of the director's duty of loyalty to the Corporation or its
         stockholders, (ii) for acts or omissions not in good faith or which
         involve intentional misconduct or a knowing violation of law, (iii)
         under Section 174 of the Delaware General Corporation Law, or (iv) for
         any transaction from which the director derived an improper personal
         benefit. If the Delaware General Corporation Law is amended after
         approval by the Corporation's stockholders of this Article to authorize
         corporate action further eliminating or limiting the personal liability
         of Directors, then the liability of a Director of the Corporation shall
         be eliminated or limited to the fullest extent permitted by the
         Delaware General Corporation Law, as so amended.

                  Any repeal or modification of the immediately preceding
         paragraph by the stockholders of the Corporation shall not adversely
         affect any right or protection of a Director of the Corporation
         existing at the time of such repeal or modification.

         (B) Each person who was or is made a party or is threatened to be made
         a party to or is otherwise involved in any action, suit or proceeding,
         whether civil, criminal, administrative or investigative (hereinafter a
         "proceeding"), by reason of the fact that he or she is or was a
         director, officer or employee of the Corporation or is or was serving
         at the request of the Corporation as a director, officer, employee or
         agent of another corporation or of a partnership, joint venture, trust
         or other enterprise, including service with respect to employee benefit
         plans (hereinafter an "indemnitee"), whether the basis of such
         proceeding is alleged action in an official capacity as a director,
         officer, employee or agent or in any other capacity while serving as a
         director, officer, employee or agent, shall be indemnified and held
         harmless by the Corporation to the fullest extent authorized by the
         Delaware General Corporation Law, as the same exists or may hereafter
         be amended but, in the case of any such amendment, only to the extent
         that such amendment permits the Corporation to provide broader
         indemnification rights than such law permitted the Corporation to
         provide prior to such amendment), against all expense, liability and
         loss (including attorneys' fees, judgments, fines, ERISA excise taxes
         or penalties and amounts paid in settlement) reasonably incurred or
         suffered by such indemnitee in connection therewith, and such
         indemnification shall continue as to an indemnitee who has ceased to be
         a director, officer, employee or agent and shall inure to the benefit
         of the indemnitee's heirs, executors and administrators; provided,
         however, that, except as provided in paragraph (C) hereof with respect
         to proceedings to enforce rights to indemnification, the

                                       9

<PAGE>   10

         Corporation shall indemnify any such indemnitee in connection with the
         proceeding (or part thereof) initiated by such indemnitee only if such
         proceeding (or part thereof) was authorized by the Board of Directors
         of the Corporation. The right to indemnification conferred in this
         Section shall be a contract right and shall include the right to be
         paid by the Corporation the expenses incurred in defending any such
         proceeding in advance of its final disposition (hereinafter an
         "advancement of expenses"); provided, however, that, if the Delaware
         General Corporation Law requires, an advancement of expenses incurred
         by an indemnitee in his or her capacity as a director or officer (and
         not in any other capacity in which service was or is rendered by such
         indemnitee, including without limitation, service to an employee
         benefit plan) shall be made only upon delivery to the Corporation of an
         undertaking, by or on behalf of such indemnitee, to repay all amounts
         so advanced if it shall ultimately be determined by final decision from
         which there is no further right to appeal that such indemnitee is not
         entitled to be indemnified for such expenses under this Section or
         otherwise (hereinafter an "undertaking").

         (C) If a claim under paragraph (B) of this Article is not paid in full
         by the Corporation within sixty days after a written claim has been
         received by the corporation, except in the case of a claim for an
         advancement of expenses, in which case the applicable period shall be
         twenty days, the indemnitee may at any time thereafter bring suit
         against the Corporation to recover the unpaid amount of the claim. If
         successful in whole or in part in any such suit or in a suit brought by
         the Corporation to recover an advancement of expenses pursuant to the
         terms of an undertaking, the indemnitee shall be entitled to be paid
         also the expense of prosecuting or defending such suit. In (i) any suit
         brought by the indemnitee to enforce a right to indemnification
         hereunder (but not in a suit brought by the indemnitee to enforce a
         right to an advancement of expenses) it shall be a defense that, and
         (ii) any suit by the Corporation to recover an advancement of expenses
         pursuant to the terms of an undertaking the Corporation shall be
         entitled to recover such expenses upon a final adjudication that, the
         indemnitee has not met the applicable standard of conduct set forth in
         the Delaware General Corporation Law. Neither the failure of the
         Corporation (including its Board of Directors, independent legal
         counsel, or its stockholders) to have made a determination prior to the
         commencement of such suit that indemnification of the indemnitee is
         proper in the circumstances because the indemnitee has met the
         applicable standard of conduct set forth in the Delaware General
         Corporation Law, nor an actual determination by the Corporation
         (including its Board of Directors, independent legal counsel, or its
         stockholders) that the indemnitee has not met such applicable standard
         of conduct, shall create a presumption that the indemnitee has not met
         such applicable standard of conduct or, in the case of such a suit
         brought by the indemnitee, be a defense to such suit. In any suit
         brought by the indemnitee to enforce a right hereunder, or by the
         Corporation to recover an advancement of expenses pursuant to the terms
         of an undertaking, the burden of proving that the

                                       10

<PAGE>   11

         indemnitee is not entitled to be indemnified or to such advancement of
         expenses under this Section or otherwise shall be on the Corporation.

         (D) The rights to indemnification and to the advancement of expenses
         conferred in this Section shall not be exclusive of any other right
         which any person may have or hereafter acquire under any statute, this
         Certificate of Incorporation, by-law, agreement, vote of stockholders
         or disinterested directors or otherwise.

         (E) The Corporation may maintain insurance, at its expense, to protect
         itself and any director, officer, employee or agent of the Corporation
         or another corporation, partnership, joint venture, trust or other
         enterprise against any expense, liability or loss, whether or not the
         Corporation would have the power to indemnify such person against such
         expense, liability or loss under the Delaware General Corporation Law.

         (F) The Corporation may, to the extent authorized from time to time by
         the Board of Directors, grant rights to indemnification and to the
         advancement of expenses, to any agent of the Corporation to the fullest
         extent of the provisions of this Article with respect to the
         indemnification and advancement of expenses of directors, officers and
         employees of the Corporation.

         TWELFTH. (A) The Board of Directors shall consist of not less than five
         (5) nor more than fifteen (15) members and shall be divided into three
         classes as nearly equal in number as possible. At the annual meeting of
         stockholders in 1987, the directors of one class shall be elected for a
         term of one year, the directors of the second class shall be elected
         for a term of two years, and the directors of the third class shall be
         elected for a term of three years. At each annual meeting of the
         stockholders after the 1988 annual meeting, the successors of the
         directors of the class whose terms expire in that year shall be elected
         to hold office for a term of three years, so that the term of office of
         one class of directors shall expire in each year.

         (B) Vacancies in the Board of Directors may be filled by a vote of
         three of the directors then in office, although less than a quorum.
         Directors so elected shall hold office until he next election of the
         class for which such Directors shall have been chosen and until their
         successors shall have been elected and qualified.

                  3. The aforesaid amendment was duly adopted in accordance with
         the applicable provisions of Section 242 and 245 of the General
         Corporation Law of the State of Delaware.

                                       11

<PAGE>   12

         IN WITNESS WHEREOF, the foregoing is executed by the Vice President of
the Corporation and attested by the Assistant Secretary of the Corporation, this
6th day of March, 1987.

                                THE CATO CORPORATION

                                By: /s/  Alan E. Wiley
                                   -----------------------------------
                                      Alan E. Wiley
                                      Senior Executive Vice President
                                      Secretary
                                      Chief Financial and Administrative Officer

           ORIGINAL CERTIFICATE OF INCORPORATION FILED MARCH 28, 1946

                                       12<PAGE>   1

                                                                     EXHIBIT 4.2

                                STATE OF DELAWARE
                                     BY-LAWS
                                       OF
                              THE CATO CORPORATION
                                      INDEX

                                    ARTICLE I

OFFICES

         Section 1.        Registered Office
         Section 2.        Other Offices

                                   ARTICLE II

MEETINGS OF STOCKHOLDERS

         Section 1.        Location
         Section 2.        Annual Meeting
         Section 3.        Stockholder Nominations
         Section 4.        Notice and Business to be Conducted
         Section 5.        Stock Ledger
         Section 6.        Special Meetings
         Section 7.        Notice of Special Meetings
         Section 8.        Business at Special Meeting
         Section 9.        Quorum
         Section 10.       Vote
         Section 11.       Proxies
         Section 12.       Action Without Meeting

                                   ARTICLE III

DIRECTORS

         Section 1.        Number
         Section 2.        Vacancies
         Section 3.        Powers
         Section 4.        Chairman of Board

<PAGE>   2

MEETINGS OF THE BOARD OF DIRECTORS

         Section 5.        Location
         Section 6.        Regular Meetings
         Section 7.        Special Meetings
         Section 8.        Quorum
         Section 9.        Action Without Meeting
         Section 10.       Meeting by Conference Telephone

COMMITTEES OF DIRECTORS

         Section 11.       Committees

COMPENSATION OF DIRECTORS

         Section 12.       Compensation

                                   ARTICLE IV

NOTICES

         Section 1.        Writing
         Section 2.        Waiver

                                    ARTICLE V

OFFICERS

         Section 1.        Officers
         Section 2.        Election
         Section 3.        Other Officers
         Section 4.        Salaries
         Section 5.        Term

THE PRESIDENT

         Section 6.        Duties
         Section 7.        Powers

THE VICE-PRESIDENTS

         Section 8.        Duties

                                       2

<PAGE>   3

THE SECRETARY

         Section 9.        Duties
         Section 10.       Assistant Secretaries

THE TREASURER AND ASSISTANT TREASURERS

         Section 11.       Duties
         Section 12.       Disbursement
         Section 13.       Bond
         Section 14.       Assistant Treasurer

CONTROLLER

         Section 15.       Duties

OFFICIALS AND AGENTS

         Section 16.       Officials and Agents

                                   ARTICLE VI

CERTIFICATES OF STOCK

         Section 1.        Certificates
         Section 2.        Facsimile Signatures
         Section 3.        Lost Certificate
         Section 4.        Transfers of Stock
         Section 5.        Closing of Transfer Books
         Section 6.        Registered Stockholders

                                   ARTICLE VII

RIGHT OF FIRST REFUSAL ON ESOP STOCK

                                  ARTICLE VIII

GENERAL PROVISIONS

         Section 1.        Dividends
         Section 2.        Reserves
         Section 3.        Annual Statement
         Section 4.        Checks

                                       3

<PAGE>   4

         Section 5.        Fiscal Year
         Section 6.        Seal

                                   ARTICLE IX

AMENDMENTS

         Section 1.        Amendments

                                       4

<PAGE>   5

                                STATE OF DELAWARE
                                     BY-LAWS
                                       OF
                              THE CATO CORPORATION
                                    ARTICLE I
                                     OFFICES

         Section 1. Registered Office. The registered office in Delaware shall
be in the City of Wilmington, County of New Castle, State of Delaware.

         Section 2. Other Offices. The corporation may also have offices at such
other places both within and without the State of Delaware as the board of
directors may from time to time determine or the business of the corporation may
require.

                                   ARTICLE II
                            MEETINGS OF STOCKHOLDERS

         Section 1. Location. Meetings of stockholders for any purpose may be
held at such time and place, within or without the State of Delaware, as shall
be stated in the notice of the meeting or in a duly executed waiver of notice
thereof.

         Section 2. Annual Meeting. The annual meeting of stockholders shall be
held on such day in each year not earlier than March 10 nor later than June 15
and at such hour as shall be fixed by the board of directors. At such annual
meeting the stockholders shall elect by plurality vote the successors of the
class of directors whose term expires at such meeting for a term expiring at the
annual meeting of stockholders held in the third year following the year of
their election, and shall transact such other business as may have been properly
brought before the meeting in accordance with Section 4 of this Article II.

         Section 3. Stockholder Nominations. Only persons who are nominated in
accordance with the procedures set forth in this Section 3 shall be eligible for
election as directors. Nominations of persons for election to the board of
directors of the corporation may be made at a meeting of stockholders by or at
the direction of the board of directors or by any stockholder of the corporation
entitled to vote for the election of directors at the meeting who complies with
the notice procedures set forth in this Section 3. Such nominations, other than
those made by or at the direction of the board of directors, shall be made
pursuant to timely notice in writing to the Secretary of the corporation. To be
timely, a stockholder's notice shall be delivered to or mailed and received at
the principal executive offices of the corporation not later than (i) with
respect to an election to be held at an annual meeting of stockholders, ninety
days prior to the anniversary date of the immediately preceding annual meeting,
and (ii) with respect to an election to be held at a special meeting of
stockholders for the election the date on which

                                       5

<PAGE>   6

notice of such meeting is first given to stockholders. Such stockholder's notice
shall set forth (a) as to each person whom the stockholder proposes to nominate
for election or re-election as a director, (i) the name, age, business address
and residence address of such person, (ii) the principal occupation or
employment of such person, (iii) the class and number of shares of the
corporation which are beneficially owned by such person and (iv) any other
information relating to such person that is required to be disclosed in
solicitations of proxies for election of directors, or is otherwise required, in
each case pursuant to Regulation 14A under the Securities Exchange Act of 1934,
as amended (including without limitation such persons' written consent to being
named in the proxy statement as a nominee and to serving as a director if
elected); and 9b) as to the stockholder giving the notice (i) the name and
address, as they appear on the corporation's books, of such stockholder and (ii)
the class and number of shares of the corporation which are beneficially owned
by such stockholder. At the request of the board of directors any person
nominated by the board of directors for election as a director shall furnish to
the Secretary of the corporation that information required to be set forth in a
stockholder's notice of nomination which pertains to the nominee. No person
shall be eligible for election as a director of the corporation unless nominated
in accordance with the procedures set forth in this Section 3. The Chairman of
the meeting shall, if the facts warrant, determine and declare to the meeting
that a nomination was not made in accordance with the procedures prescribed by
the by-laws, and if he should so determine, he shall so declare to the meeting
and the defective nomination shall be disregarded.

         Section 4. Notice and Business to be Conducted. Written notice of the
annual meeting shall be given to each stockholder entitled to vote thereat at
least 10 but not more than 60 days before the date of the meeting.

         At an annual meeting of the stockholders, only such business shall be
conducted as shall have been properly brought before the meeting. To be properly
brought before an annual meeting business must be (a) specified in the notice of
meeting (or any supplement thereto) given by or at the direction of the board of
directors, (b) otherwise properly brought before the meeting by or at the
direction of the board of directors, or (c) otherwise properly brought before
the meeting by a stockholder. For business to be properly brought before an
annual meeting by a stockholder, the stockholder must have given timely notice
thereof in writing to the Secretary of the corporation. To be timely, a
stockholder's notice must be delivered to or mailed and received at the
principal executive offices of the corporation, not later than ninety days prior
to the anniversary date of the immediately preceding annual meeting, A
stockholder's notice to the Secretary shall set forth as to each matter the
stockholder proposes to bring before the annual meeting (a) a brief description
of the business desired to be brought before the annual meeting and the reasons
for conducting such business at the annual meeting, (b) the name and address, as
they appear on the corporation's books, of the stockholder proposing such
business, (c) the class and number of shares of the corporation which are
beneficially owned by the stockholder, and (d) any material interest of the
stockholder in such business. Notwithstanding anything in the by-laws to the
contrary, no business shall be conducted at any annual meeting except in
accordance with the procedures set forth in this section. The Chairman of the
annual meeting shall, if the facts warrant, determine and declare to the meeting
that business was not properly brought before the

                                       6

<PAGE>   7

meeting and in accordance with the provisions of this section, and if he should
so determine, he shall so declare to the meeting and any such business not
properly brought before the meeting shall not be transacted.

         Section 5. Stock Ledger. The officer who has charge of the stock ledger
of the corporation shall prepare and make, at least ten days before every
election of directors, a complete list of the stockholders entitled to vote at
said election, arranged in alphabetical order, showing the address of and the
number of shares registered in the name of each stockholder. Such list shall be
open to the examination of any stockholder, during ordinary business hours, for
a period of at least ten days prior to the election, either at a place within
the city, town or village where the election is to be held and which place shall
be specified in the notice of the meeting, or, if not specified, at the place
where said meeting is to be held, and election during the whole time thereof,
and subject to the inspection of any stockholder who may be present.

         Section 6. Special Meetings.Special meetings of the stockholders, for
any purpose or purposes, unless otherwise prescribed by statute or by the
certificate of incorporation, may be called by the president and shall be called
by the president or secretary at the request in writing of a majority of the
board of directors, or at the request in writing of stockholders owning shares
of the corporation's capital stock entitled to a majority of the total number of
votes entitled to be cast by the entire capital stock of the corporation issued
and outstanding and entitled to vote. Such request shall state the purpose or
purposes of the proposed meeting.

         Section 7. Notice of Special Meeting.Written notice of a special
meeting of stockholders, stating the time, place and purpose thereof, shall be
given in accordance with section 222 of the General Corporation Law of the State
of Delaware to each stockholder entitled to vote thereat, at least then days
before the date fixed for the meeting.

         Section 8. Business at Special Meeting. Business transacted at any
special meeting of stockholders shall be limited to the purposes stated in the
notice.

         Section 9. Quorum. The holders of a majority of the total voting power
of the capital stock of the corporation issued and outstanding and entitled to
vote thereat, present in person or represented by proxy, shall constitute a
quorum at all meetings of the stockholders for the transaction of business
except as otherwise provided by statute or by the certificate of incorporation.
If, however, such quorum shall not be present or represented at any meeting of
the stockholders, the stockholders entitled to vote thereat, present in person
or represented by proxy, shall have the power to adjourn the meeting from time
to time, without notice other than announcement at the meeting, until a quorum
shall be present or represented. At such adjourned meeting at which a quorum
shall be present or represented, any business may be transacted which might have
been transacted at the meeting as originally noticed.

         Section 10. Vote. When a quorum is present at any meeting, the vote of
a majority of the votes to which the holders of the stock having voting power,
present in person or by proxy, are entitled shall decide any question brought
before such meeting, unless the question is one

                                       7

<PAGE>   8

upon which by express provision of statute or of the certificate of
incorporation, a different vote is required in which case such express provision
shall govern and control the decision of such question.

         Section 11. Proxies. Each stockholder shall at every meeting of the
stockholders be entitled in person or by proxy to the number of votes provided
for in the corporation's Certificate of Incorporation (or in a resolution of the
board of directors fixing the powers, designations, preferences and relative,
participating, optional or other special rights of a particular series of stock
within any class thereof) for each share of the corporation's capital stock
having voting power held by such stockholder, but no proxy shall be voted on
after three years from its date, unless the proxy provides for a longer period
and, except where the transfer books of the corporation have been closed or a
date has been fixed as a record date for determination of its stockholders
entitled to vote, no share of stock shall be voted at any election for directors
which has been transferred on the books of the corporation within twenty days
next preceding such election of directors. A duly executed proxy shall be
irrevocable if it states that it is irrevocable and if, and only as long as, it
is coupled with an interest sufficient in law to support an irrevocable power. A
stockholder may revoke any proxy which is not irrevocable by attending the
meeting and voting in person or by filing an instrument in writing revoking the
proxy or another duly executed proxy bearing a later date with the Secretary of
the corporation. Voting at meetings of stockholders need not be by written
ballot and need not be conducted by inspectors unless the holders of a majority
of the outstanding shares of all classes of stock entitled to vote there on
present in person or by proxy at such meeting shall so determine.

         Section 12. Action Without Meeting. Whenever the vote of stockholders
at a meeting thereof is required or permitted to be taken in connection with any
corporate action by any provisions of the statutes or of the certificate of
incorporation, the meeting and vote of stockholders may be dispensed with if a
consent in writing, setting forth the action so taken, shall be signed by the
holders of outstanding stock having not less than the minimum number of votes
that would be necessary to authorize or take such action at a meeting at which
all shares entitled to vote thereon were present and voted. Prompt notice of the
taking of the corporate action without a meeting by less than unanimous written
consent shall be given to those stockholders who have not consented in writing.

                                   ARTICLE III
                                    DIRECTORS

         Section 1. Number. The number of directors which shall constitute the
whole board shall be fixed from time to time by resolution of the board of
directors and shall not be less than 5 nor more than 15. The directors shall be
elected at the annual meeting of the stockholders, except as provided in Section
2 of this Article, and each director elected shall hold office until his
successor is elected and qualified. Directors need not be stockholders.

         Section 2. Vacancies. Vacancies and newly created directorships
resulting from any increase in the authorized number of directors may be filled
by a majority of the directors then

                                       8

<PAGE>   9

in office, though less than a quorum. Any directors elected in accordance with
the preceding sentence shall hold office for the remainder of the full term of
the class of directors in which the directorship was created or the vacancy
occurred and until his successor is duly elected and shall qualify, unless
sooner displaced. The Chairman of the Board, at his discretion, may place a
newly elected Board Member, or a Director filling a vacancy, into class other
than the class of Directors in which the directorship was created or the vacancy
occurred.

         Section 3. Powers. The business of the corporation shall be managed by
its board of directors which may exercise all such powers of the corporation and
do all such lawful acts and things as are not by statute or by the certificate
of incorporation or by these by-laws directed or required to be exercised or
done by the stockholders.

         Section 4. Chairman of Board. There shall be a Chairman and a Vice
Chairman of the Board of Directors elected by the directors from their number at
the board's first meeting after the annual meeting of stockholders. The Chairman
shall preside at all meetings of the board of directors and perform such other
duties as may be directed by the board. He shall, in the absence or disability
of the president, perform the duties and exercise the powers of the president,
and shall perform such other duties as the board shall assign. In the absence of
the Chairman, the Vice Chairman of the Board shall preside at a meeting of the
board of directors.

                       MEETINGS OF THE BOARD OF DIRECTORS

         Section 5. Location. The board of directors of the corporation may hold
meetings, both regular and special, either within or without the State of
Delaware.

         Section 6. Regular Meetings.There shall be regular meetings of the
board, which may be held on such dates and without notice or upon such notice as
the board may from time to time determine. Regular meetings shall be held at the
principal office of the corporation within the State of North Carolina or at
such other places either within or without the state of North Carolina and at
such specific time as may be fixed by the board from time to time. There shall
also be a regular meeting of the board, which may be held without notice or upon
such notice as the board may from time to time determine, after the annual
meeting of the stockholders.

         Section 7. Special Meetings.Special meetings of the board may be called
by the Chairman of the Board or the president on not less than two, or, in the
case of notice given by mail, not less than three days' notice to each director
either personally or by mail or by telegram; special meetings shall be called by
the Chairman of the Board, the president or secretary in like manner and on like
notice on the written request of four directors.

         Section 8. Quorum. At all meetings of the board a majority of the
directors shall constitute a quorum for the transaction of business and the act
of a majority of the directors present at any meeting at which there is a quorum
shall be the act of the board of directors, except as may be otherwise
specifically provided by statute or by the certificate of incorporation or these
by-laws. If a quorum shall not be present at any meeting of the board of
directors the directors

                                       9

<PAGE>   10

present thereat may adjourn the meeting from time to time, without notice other
than announcement at the meeting, until a quorum shall be present.

         Section 9. Action Without Meeting. Unless otherwise restricted by the
certificate of incorporation or these by-laws, any action required or permitted
to be taken at any meeting of the board of directors or of any committee thereof
may be taken without a meeting, if prior to such action a written consent
thereto is signed by all members of the board or of such committee as the case
may be, and such written consent is filed with the minutes of proceeding of the
board or committee.

         Section 10. Meeting by Conference Telephone. Unless otherwise
restricted by the certificate of incorporation, members of the board of
directors or any committee designated by the board may participate in the
meeting of the board or committee by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other and such participation in a meeting shall constitute
presence in person at such meeting.

                             COMMITTEES OF DIRECTORS

         Section 11. Committees. The board may designate from among its members
an Executive Committee, or a Finance Committee and other committees, each
consisting of one or more directors. Each such committee shall have all the
authority of the board to the extent provided in such resolution, except as
limited by law. No such committee shall exercise its authority in a manner
inconsistent with any action, direction, or instruction of the board.

         The board may appoint a Chairman of the Executive Committee, the
Finance Committee and of any other committees who shall preside at meetings of
their respective committees. The board may fill any vacancy in any committee and
may designate one or more directors as alternate members of such committee, who
may replace any absent member or members at any meeting of such committee. Each
such committee shall serve at the pleasure of the board, but in no event beyond
its first meeting following the annual meeting of the stockholders.

         All acts done and powers conferred by the Executive Committee or other
committee pursuant to the foregoing authorization shall be deemed to be and may
be certified as being done or conferred under authority of the board.

         A record of the proceedings of the Executive committee and any other
committee shall be kept and submitted at the next regular meeting of the board.

         At least one-third but not less than two of the members of any
committee having more than two members shall constitute a quorum for the
transaction of business by such committee, and the vote of a majority of the
members present at the time of the vote, if a quorum is present at such time,
shall be the act of the committee. If a committee shall have only two members, a

                                       10

<PAGE>   11

quorum shall not be present for the transaction of business unless both members
are present at the time of the vote.

         If a committee or the board shall establish regular meetings of any
committee, such meetings may be held without notice or upon such notice as the
committee may from time to time determine. Notice of the time and place of
special meetings of any committee shall be given to each member of the committee
in the same manner as in the case of special meetings of the board. Notice of a
meeting need not be given to any member of a committee who signs a waiver of
notice whether before or after the meeting, or who attends the meeting without
protesting, prior thereto or at its commencement, the lack of notice to him.
Except as otherwise provided in these by-laws, each committee shall adopt its
own rules of procedure.

                            COMPENSATION OF DIRECTORS

         Section 13. Compensation. The directors may be paid their expenses, if
any, of attendance at each meeting of the board of directors and may be paid a
fixed sum for attendance at each meeting of the board of directors or a stated
salary as director. No such payment shall preclude any director from serving the
corporation in any other capacity and receiving compensation therefor. Members
of special or standing committees may be allowed like compensation for attending
committee meetings.

                                   ARTICLE IV
                                     NOTICES

         Section 1. Writing. Notices to directors and stockholders shall be in
writing and delivered personally or mailed to the directors or stockholders at
their addresses appearing on the books of the corporation. Notice to directors
may also be given by telegram.

         Section 2. Waiver. Whenever any notice is required to be given under
provisions of the statutes or of the certificate of incorporation or of these
by-laws, a waiver thereof in writing, signed by the person or persons entitled
to said notice, whether before or after the time stated therein, shall be deemed
equivalent thereto.

                                    ARTICLE V
                                    OFFICERS

         Section 1. [See attached amendment].

                                       11

<PAGE>   12

by the same person, except the offices of President and Secretary or President
and Assistant Secretary.

         Section 2. Election. The board of directors at its first meeting after
each annual meeting of stockholders shall choose a president from among the
directors, and shall choose a secretary and a treasurer, and may choose one or
more vice presidents, none of whom need be a member of the board.

         Section 3. Other Officers. The board of directors may appoint such
other officers and agents as it shall deem necessary who shall hold their
offices for such terms and shall exercise such powers and perform such duties as
shall be determined from time to time by the board.

         Section 4. Salaries. The salaries of all officers and agents of the
corporation shall be fixed by the board of directors.

         Section 5. Term. The officers of the corporation shall hold office
until their successors are chosen and qualify. Any officer elected or appointed
by the board of directors may be removed at any time with or without cause by
the affirmative vote of a majority of the board of directors. Any officer may
resign at any time by giving written notice thereof to the president or to the
board, or by retiring or by leaving the employ of the corporation (without being
employed by a subsidiary or affiliate) and any such action shall take effect as
a resignation without necessity of further action. any vacancy occurring in any
office of the corporation shall be filled by the board of directors.

                                  THE PRESIDENT

         Section 6. Duties. The president shall be the chief executive officer
of the corporation, shall preside at all meetings of the stockholders and the
board of directors, shall have general and active management of the business of
the corporation and shall see that all orders and resolutions of the board of
directors are carried into effect. He shall be ex officio a member of all
standing committees and, in the absence of the Chairman and the Vice Chairman of
the Board, shall preside at all meetings of the stockholders and directors.
Except as otherwise provided by these by-laws or any statute or regulation, the
president shall have the authority to assign duties to other officers, and
employees and agents of the corporation, including the authority to designate
other officers to execute instruments on behalf of the corporation without
obtaining a resolution therefor from the board of directors.

         Section 7. Powers. He shall execute bonds, mortgages and other
contracts requiring a seal, under the seal of the corporation, except where
required or permitted by law to be otherwise signed and executed and except
where the signing and execution thereof shall be expressly delegated by the
board of directors to some other officer or agent of the corporation.

                                       12

<PAGE>   13

                               THE VICE PRESIDENTS

         Section 8. Duties. The vice president, or if there shall be more than
one, the vice presidents, in the order determined by the board of directors,
shall, in the absence or disability of the president, perform the duties and
exercise the powers of the president and shall perform such other duties and
have such other powers as the board of directors may from time to time
prescribe.

                                  THE SECRETARY

         Section 9. Duties. The secretary shall attend all meetings of the board
of directors and all meetings of the stockholders and record all the proceedings
of the meetings of the corporation and of the board of directors in a book to be
kept for that purpose and shall perform like duties for the standing committees
when required. He shall have charge of the record of stockholders required by
law, which may be kept by any transfer agent or agents under his direction. he
shall give, or cause to be given, notice of all meetings of the stockholders and
special meetings of the board of directors, and shall perform such other duties
as may be prescribed by the board of directors or president, under whose
supervision he shall be. He shall keep in safe custody the seal of the
corporation and, when authorized by the board of directors, affix the same to
any instrument requiring it and, when so affixed, it shall be attested by his
signature or by the signature of an assistant secretary.

         Section 10. Assistant Secretaries. The assistant secretary, of if there
be more than one, the assistant secretaries in the order determined by the board
of directors, shall, in the absence or disability of the secretary, perform the
duties and exercise the powers of the secretary and shall perform such other
duties and have such other powers as the board of directors may from time to
time prescribe.

                     THE TREASURER AND ASSISTANT TREASURERS

         Section 11. Duties. The treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the corporation and shall
deposit all moneys and other valuable effects in the name and to the credit of
the corporation in such depositories as may be designated by the board of
directors.

         Section 12. Disbursement. He shall disburse the funds of the
corporation as may be ordered by the board of directors, taking proper vouchers
for such disbursements, and shall render to the president and the board of
directors, at its regular meetings, or when the board of directors so requires,
an account of all his transactions as treasurer and of the financial condition
of the corporation.

         Section 13. Bond. If required by the board of directors, he shall give
the corporation a bond (which shall be renewed every six years) in such sum and
with such surety or sureties as shall be satisfactory to the board of directors
for the faithful performance of the duties

                                       13

<PAGE>   14

of his office and for the restoration to the corporation, in case of his death,
resignation, retirement or removal from office, of all books, appears, vouchers,
money and other property of whatever kind in his possession or under his control
belong to the corporation.

         Section 14. Assistant Treasurer. The assistant treasurer, or if there
shall be more than one, the assistant treasurers in the order determined by the
board of directors, shall, in the absence or disability of the treasurer,
perform the duties and exercise the powers of the treasurer and shall perform
such other duties and have such other powers as the board of directors may from
time to time prescribe.

                                   CONTROLLER

         Section 15. Duties. The Controller shall be the chief accounting
officer of the corporation and shall have control of all its books of account.
He shall see that correct and complete books and records of account are kept as
required by law, showing fully, in such form as he shall prescribe, all
transactions of the corporation, and he shall require, keep and preserve all
vouchers relating thereto for such period as may be necessary.

         The Controller shall render periodically such financial statements and
such other reports relating to the corporation's business as may be required by
the president or the board. He shall generally perform all duties appertaining
to the office of controller of a corporation.

                              OFFICIALS AND AGENTS

         Section 16. Officials and Agents. The president or his delegate may
appoint such officials and agents of the corporation as the conduct of its
business may require and assign to them such titles, powers, duties and
compensation as he shall see fit and may remove or suspend or modify such
titles, powers, duties or compensation at any time with or without cause.

                                   ARTICLE VI
                              CERTIFICATES OF STOCK

         Section 1. Certificates. Every holder of stock in the corporation shall
be entitled to have a certificate, signed by, or in the name of the corporation
by, the president or a vice president and the treasurer or an assistant
treasurer, or the secretary or an assistant secretary of the corporation,
certifying the number of shares owned by him in the corporation. If the
corporation shall be authorized to issue more than one class of stock, or more
than one series of any class, the designations, preference and relative,
participating, optional or other special rights of each class of stock or series
thereof and the qualifications, limitations or restrictions of such preferences
and/or rights shall be set forth in full or summarization on the face or the
back of the certificate which the corporation shall issue to represent such
class of stock; provided, however, that except as otherwise provided in Section
202 of the General Corporation Law of Delaware, in lieu of the foregoing
requirements, there may be set forth on the face or back of the certificate
which the corporation shall issue to present such class or series of stock, a
statement that the

                                       14

<PAGE>   15

corporation will furnish without charge to each stockholder who so requests, a
copy of the designations, preferences and relative, participating, option or to
her special rights of each class of stock or series thereof and the
qualifications, limitations or restrictions of such preferences and/or rights.

         Section 2. Facsimile Signatures. Where a certificate is signed (1) by a
transfer agent or an assistant transfer agent or (2) by a transfer clerk acting
on behalf of the corporation and a registrar, the signature of any such
president, vice president, treasurer, assistant treasurer, secretary or
assistant secretary may be facsimile. In case any officer or officers who have
signed or whose facsimile signature or signatures have been use don any such
certificate or certificates shall cease to be such officer or officers of the
corporation, whether because of death, resignation or otherwise, before such
certificate or certificates have been delivered by the corporation, such
certificate or certificates may nevertheless be adopted by the corporation and
be issued an delivered as though the person or persons who signed such
certificate or certificates or whose facsimile signature or signatures have been
used thereon had not ceased to be such officer or officers of the corporation.

         Section 3. Lost Certificate.The board of directors may direct a new
certificate or certificates to be issued in place or any certificate or
certificates theretofore issued by the corporation alleged to have been lost or
destroyed, upon the making of an affidavit of the fact by the person claiming
the certificate of stock to be lost or destroyed. When authorizing such issue of
a new certificate or certificates, the board of directors may, in its discretion
and as a condition precedent to the issuance thereof, require the owner of such
lost or destroyed certificate or certificates, or his legal representative, to
advertise the same in such manner as it shall require and/or to give the
corporation a bond in such sum as it may direct as indemnity against any claim
that may be made against the corporation with respect to the certificate alleged
to have been lost or destroyed.

         Section 4. Transfers of Stock. Upon surrender to the corporation or the
transfer agent of the corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books.

         Section 5. Closing of Transfer Books.The board of directors may close
the stock transfer books of the corporation for a period not exceeding fifty
days preceding the date of any meeting of stockholders or the date for payment
of any dividend or the date for the allotment of rights or the date when any
change or conversion or exchange of capital stock shall go into effect or for a
period of not exceeding fifty days in connection with obtaining the consent of
stockholders for any purpose. In lieu of closing the stock transfer books as
aforesaid, the board of directors may fix in advance a date, not exceeding fifty
days preceding the date of any meeting of stockholders, or the date for the
payment of any dividend, or the date for the allotment of rights, or the date
when any change or conversion or exchange of capital stock shall go into effect,
or a date in connection with obtaining such consent, as a record date for the
determination

                                       15

<PAGE>   16

of the stockholders entitled to notice of, and to vote at, any such meeting, and
any adjournment thereof, or entitled to receive payment of any such dividend, or
to any such allotment of rights, or to exercise the rights in respect of any
such change, conversion or exchange of capital stock, or to give such consent,
and in such case such stockholders and only such stockholders as shall be
stockholders of record on the date so fixed shall be entitled to such notice of,
or to receive payment of such dividend, or to receive such allotment of rights,
or to exercise such rights, or to give such consent, as the case may be
notwithstanding any transfer of any stock on the books of the corporation after
any such record date fixed as aforesaid.

         Section 6. Registered Stockholders. The corporation shall be entitled
to recognize the exclusive right of a person registered on its books as the
owner of shares to receive dividends, and to vote as such owner, and to hold
liable for calls and assessments a person registered on its books as the owner
of shares, and shall not be bound to recognize any equitable or other claim to
or interest in such share or shares on the part of any other person, whether or
not it shall have express or other notice thereof, except as otherwise provided
by the laws of Delaware.

                                   ARTICLE VII
                      RIGHT OF FIRST REFUSAL ON ESOP STOCK

         All shares of stock of the corporation distributed by The Cato
Corporation employee Stock Ownership Trust (the "Trust") shall be subject to a
right of first refusal as follows:

         Prior to any transfer of any such shares to a prospective third party
transferee by the holder of the shares, those shares must first be offered for
sale by written offer made concurrently to the Trust and to the corporation upon
the same terms and at the same price as offered by or to the prospective third
party transferee. Any such offer to the Trust and the corporation shall disclose
the name of the prospective third party transferee and the price and terms
offered by or to the transferee. The corporation shall have the first right to
purchase all or part of the shares; to the extent the corporation shall not
accept the offer to sell, the Trust may purchase all or part of the remaining
shares. an acceptance by the corporation or the Trust of any such offer must be
made in writing within 60 days following receipt of the offer by the
corporation.

         If the offer is not accepted by the corporation, the Trust, or both,
then the proposed transfer may be completed within 6 months following receipt of
the offer by the corporation but only to the same prospective third party
transferee and only upon the same terms and at the same price as originally
offered to or by that prospective third party transferee. If the transfer is not
competed within 6 months as described, the holder of the shares must comply once
again with the procedures described in this Article VII before making any
transfer of the shares.

         The right provided in this Article VII shall apply to all shares
distributed by the Trust, whether such shares are held by a participant in the
Employee Stock Ownership Plan, his beneficiary or other person to whom such
shares may have been distributed by the Trustee (or by any transferee or
successor transferee of any of the foregoing unless the Trust and the
corporation

                                       16

<PAGE>   17

had failed to exercise any earlier right of first refusal with respect to such
shares and such shares had been transferred to the prospective transferee in
accordance with this Article VII). Unless the corporation shall waive its rights
hereunder, a suitable legend regarding this right of first refusal shall be
printed on each share certificate subject to such right, and the board of
directors of the corporation may provide from time to time for such reasonable
rules designed to facilitate the administration of such right as it shall deem
appropriate.

         The corporation and the Trust may in any instance waive the right of
refusal granted to the corporation or the Trust by this Article VII. Any such
waiver shall be made by a resolution of the board of directors directing that
the legend referred to above shall not be included on any share certificates to
be distributed by the Trust, and any such shares to which such direction applies
shall thereafter be free forever of the first right of refusal contained in this
Article VII.

                                  ARTICLE VIII
                               GENERAL PROVISIONS

         Section 1. Dividends. Dividends upon the capital stock of the
corporation, subject to the provisions of the certificate of incorporation, if
any, may be declared by the board of directors at any regular or special
meeting, pursuant to law. Dividends may be paid in cash, in property, or in
shares of the capital stock, subject to the provisions of the certificate of
incorporation.

         Section 2. Reserves. Before payment of any dividend, there may be set
aside out of any funds of the corporation available for dividends such sum or
sums as the directors from time to time, in their absolute discretion, think
proper as a reserve or reserves to meet contingencies, or for equalizing
dividends, or for repairing or maintaining any property of the corporation, or
for such other purpose as the directors shall think conducive to the interest of
the corporation, and the directors may modify or abolish any such reserve in the
manner in which it was created.

         Section 3. Annual Statement.The board of directors shall present at
each annual meeting, and at any special meeting of the stockholders when called
for by vote of the stockholders, full and clear statement of the business and
condition of the corporation.

         Section 4. Checks. All checks or demands for money and notes of the
corporation shall be signed by such officer or officers or such other person or
persons as the board of directors may from time to time designate.

         Section 5. Fiscal Year. The fiscal year of the corporation shall end on
the last Saturday in January of each year.

         Section 6. Seal. The corporate seal of the corporation shall consist of
two concentric circles between which is the name of the corporation and in the
center of which is

                                       17

<PAGE>   18

inscribed SEAL. The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or reproduced or otherwise.

                                   ARTICLE IX
                                   AMENDMENTS

         Section 1. Amendments. These by-laws may be altered or repealed at any
regular meeting of the stockholders or the board of directors or at any special
meeting of the stockholders or of the board of directors if notice of such
alteration or repeal be contained in the notice of such special meeting.

                                       18

<PAGE>   19

                                 RESOLUTIONS OF

                            THE BOARD OF DIRECTORS OF

                              THE CATO CORPORATION

RESOLVED, that the By-laws of The Cato Corporation (the "Corporation") be, and
the same hereby are, amended by deleting Section 1 of Article V in its entirety
and inserting in lieu thereof a new Section 1 of Article V, which shall be and
read as follows:

                  Section 1. Officers of the Corporation. The officers of the
         Corporation shall consist of such officers as the Board of Directors
         may from time to time elect, including without limitations, a Chairman
         of the Board, a Chief Executive Officer, a Chief Financial Officer, a
         Chief Operating Officer, a Chief Merchandising Officer, a Chief
         Marketing Officer, a Vice Chairman of the Board, a president, a
         Secretary, a Treasurer, and such one or more Executive Vice presidents,
         Senior Vice Presidents and Vice Presidents with such vice presidential
         designations, if any, as the Board may determine, and such Assistant
         Vice Presidents, Assistant Secretaries, and Assistant Treasurers as the
         Board of Directors may elect. Any two (2) or more of such offices may
         be held by the same person, except the offices of president and
         Secretary or president and Assistant Secretary.

RESOLVED FURTHER, that the Chairman and Chief Executive Officer is hereby vested
with the authority to appoint such other officers and reassign such duties as he
may deem appropriate from time to time and it is further understood that all
officers serve at discretion of the Chairman and Chief Executive Officer, and it
is understood that the Chairman and Chief Executive Officer will keep the Board
informed of any such appointments and changes at the regular board meeting.

RESOLVED FURTHER, that this amendment to the Corporation's By-laws shall be
effective as of January 28, 1993.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00001-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00001-of-00352.parquet"}]]