Document:

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EXHIBIT 10.1

                         EMPLOYMENT AGREEMENT AMENDMENT

                               Amendment Number 1

      This Amendment Number 1 to the Employment Agreement made as of September
1, 2002 between Hanover Direct, Inc., a Delaware corporation (the "Company"),
and Thomas C. Shull ("Shull") (the "Employment Agreement"), shall be effective
as of September 1, 2002.

                              W I T N E S S E T H :

      WHEREAS, the Company and Shull entered into the Employment Agreement; and

      WHEREAS, the Company and Shull now desire to amend the Employment
Agreement in certain respects.

      NOW, THEREFORE, it is agreed by and between the parties hereto to the
following amendments to the Employment Agreement:

      1. The second sentence of paragraph 4(f) of the Employment Agreement is
hereby amended to read as follows:

      "In addition, the Company shall make cash payments of $450,000 in the
      aggregate to Shull in two equal lump sum amounts of $225,000 each payable
      on March 31, 2003 and September 30, 2004; provided that on each such date
      this Agreement has not been terminated pursuant to paragraph 6(a)(i) or
      6(a)(iv) hereof; and provided, further, however, that such payments shall
      be made notwithstanding any termination of this Agreement on or prior to
      such dates pursuant to paragraph 6(a)(ii), 6(a)(iii), 6(a)(v) (or as a
      result of another event constituting a Change of Control (as hereinafter
      defined)) or 6(a)(vi) hereof."

      2. The first sentence of paragraph 6(b)(iii) of the Employment Agreement
is hereby amended to read as follows:

      "If the termination is pursuant to paragraph 6(a)(ii) or 6(a)(vi), Shull
      shall be entitled to receive a lump sum payment equal to (A) the aggregate
      amount of Base Compensation to which he would have otherwise been entitled
      through the end of the Agreement Term (not to exceed 18 months of such
      Base Compensation) plus (B) such additional amount, if any, in severance
      pay which, when combined with
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      the amount payable pursuant to clause (A) equals 18 months of Base
      Compensation and such amount of bonus as may be payable pursuant to the
      Company's 2002 Management Incentive Plan or other bonus plan, as
      applicable (based upon the termination date and the terms and conditions
      of the applicable bonus plan), as described in paragraph 4(b), as well as
      such amounts as may be unpaid pursuant to paragraph 4(f) and employee
      benefits such as accrued vacation and insurance in accordance with the
      Company's customary practice."

      3. Except as hereunder provided, the Employment Agreement shall remain in
full force and effect without further modification.

      IN WITNESS WHEREOF, the Company and Shull have executed this Amendment
Number 1 as of September 1, 2002.

                                  HANOVER DIRECT, INC.

                                  By:     /s/ Michael D. Contino
                                          Name: Michael D. Contino
                                          Title: EVP/C.O.O

                                  /s/ Thomas C. Shull
                                  THOMAS C. SHULL<PAGE>
                                                                    Exhibit 10.2
[month] [day], 200_

[Name]
[address]

Dear [name]:

It's with pleasure I confirm your continued employment with Hanover Direct, Inc.
("Hanover Direct" or the "Company") as Executive Vice President and __________.
This letter will highlight essential details and summarize information
concerning the terms and conditions of your employment with Hanover Direct and
sets forth the entire understanding of you and Hanover Direct relating to the
subject matter hereof, and supersedes all prior agreements, arrangements,
representations and understandings, written or oral, relating to the subject
matter hereof.

General Duties and Responsibilities
-----------------------------------

You shall carry out the responsibilities and duties as shall be determined from
time to time by the Chief Executive Officer and the Board of Directors of
Hanover Direct. During your employment, you shall devote your full business time
and attention to the business of Hanover Direct and shall not, during such
period, be engaged in any other business activity, whether or not such business
activity is pursued for gain, profit or other pecuniary or non-pecuniary
advantage, without the prior written and informed consent of the Chief Executive
Officer and the Board of Directors (or the Compensation Committee thereof) of
Hanover Direct. Notwithstanding the above, you (a) may serve on the boards of
directors of charitable or other organizations and companies not competing with
Hanover Director or as an unpaid officer of a charitable organization, and (b)
can manage your own personal and family investments and affairs; provided,
however, that such activities do not interfere with the execution of your duties
to Hanover Direct, do not otherwise violate any provision of your employment or
otherwise conflict in any way with the business of Hanover Direct.

Compensation
------------

Your bi-weekly salary is $____, which annualized is equivalent to $_______. You
will be eligible for a performance review in March 200_, and thereafter, under
the current practices of the Company, your base salary will be reviewed in March
of all subsequent years you remain an employee of Hanover Direct.

In addition, as part of your annual cash compensation, you will be eligible for
an annual performance bonus based on attainment of corporate EBITDA goals to be
established by the Compensation Committee of the Board or Directors. Although
the Compensation Committee will determine the actual amount of your bonus, you
will receive a bonus of at least 50% of your base salary at threshold, 75% of
your base salary at target and 125% of your base salary in the event the
corporate EBITDA goals are exceeded. Notwithstanding the preceding sentence, for
2002 you will receive a bonus of at least 50% of your base salary at maximum at
threshold, 100% of your base salary at maximum at target and 150% of your base
salary at maximum in the event the corporate EBITDA goals are exceeded.

With the approval of the Compensation Committee of the Board of Directors, you
were [recently] awarded options to purchase ____ shares of common stock of
Hanover Direct (the "Option") pursuant to the Hanover Direct, Inc. 2000
Management Stock Option Plan (the "Plan"). The terms and conditions of the

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Option, including but not limited to vesting, transfer, exercise and expiration,
are set forth within and are governed by a stock option agreement between you
and the Company and by the Plan. The Option is in addition to the _______ stock
options previously awarded to you by separate grants.

Rights Upon Termination of Employment
-------------------------------------

In addition to the above compensation package, you are also guaranteed:

>>       In the event of the termination of your employment with Hanover Direct
         either (a) by the Company other than "For Cause" (as such term is
         hereinafter defined), or (b) by you "For Good Reason" (as such term is
         hereinafter defined), you will receive eighteen (18) months of
         severance pay, COBRA reimbursement and Exec-U-Care plan coverage.
         Severance pay and COBRA and other severance benefits are conditioned
         upon your (i) providing an unconditional general release in favor of
         Hanover Direct in a form approved by the Company of any and all claims
         arising out of, relating to or concerning your employment or the
         termination of your employment with the Company and (ii) material
         compliance with the restrictive covenants set forth below.

         "For Good Reason" shall mean the voluntary termination by you of your
         employment with Hanover Direct on account of any of the following
         actions: (a) a substantial and material diminution of your duties or
         responsibilities for Hanover Direct, (b) a material and substantial
         diminution of your base salary or any long-term incentive opportunity
         (each as in effect as of the date hereof), (c) Hanover Direct's
         requiring you to regularly report to work at a facility that is more
         than thirty (30) miles from the facility at which you regularly report
         as of the date hereof, (d) the failure of Hanover Direct to provide you
         with the number of paid vacation days to which you would otherwise be
         entitled in accordance with the vacation policy of the Company and as
         set forth below, or (e) any action by Hanover Direct that adversely
         affects in a material way your participation in or materially reduces
         your benefits under any of such of Hanover Direct's employee benefit or
         compensation plans.

         "For Cause" shall mean the involuntary termination of your employment
         with Hanover Direct on account of your (a) willful and continued
         failure to perform your regular duties for Hanover Direct, (b)
         commission of an act of fraud relating to and adversely affecting
         Hanover Direct, or (c) conviction of a felony in connection with your
         employment with Hanover Direct.

>>       In the event of the termination of your employment with Hanover Direct
         following a Change of Control (as that term is defined in the Hanover
         Direct, Inc. Eighteen Month Key Executive Compensation Continuation
         Plan (the "Change of Control Plan"), your severance rights and benefits
         shall be controlled by the terms and conditions of the Change of
         Control Plan.

>>       In addition to the severance and other benefits provided for in the
         Change of Control Plan, you will receive a Transaction Bonus equal to
         50% of your base salary in the event of a Change of Control.

Employee Benefits
-----------------

During your employment as an Executive Vice President of Hanover Direct, you
will be eligible to participate in the following:

>>       5 weeks vacation annually
>>       The base medical and dental plans of the Company and the Exec-U-Care
         program
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>>       Company paid Life Insurance, with the option to buy supplemental
         insurance
>>       Company paid Long-Term Disability, with the option to buy supplemental
         insurance
>>       Company paid Accidental Death and Dismemberment Insurance, with the
         option to buy supplemental insurance
>>       401(k) retirement savings plan
>>       Employee merchandise discounts of up to 45%
>>       Reimbursement of out-of-pocket expenses incurred on behalf of Hanover
         Direct on business
>>       Indemnification pursuant to the terms and provisions of Article Fifth
         of the charter and Article IV of the by-laws of the Company, as amended
         or supplemented

Restrictive Covenants
---------------------

By signing this letter, you acknowledge, confirm and agree that, given your
position as Executive Vice President, you will be privy to and put in possession
of certain confidential information, proprietary property and trade secrets of
Hanover Direct (collectively, "Confidential Information") and that the
disclosure or use by you of any such Confidential Information, other than
directly for the purposes of fulfilling your job requirements, would cause
material, substantial and irreparable damage to Hanover Direct. Accordingly, you
acknowledge and confirm that you have a continuing duty of confidentiality to
Hanover Direct and agree that you will hold, during the period of your
employment and at all times thereafter, in the utmost and strictest confidence
and will not, without Hanover Direct's prior written permission, use or disclose
(or act so as to cause the use or disclosure of) any Confidential Information.
This provision shall survive the termination of your employment with Hanover
Direct. For purposes hereof, "Confidential Information" shall include
information pertaining to any aspects of Hanover Direct's business which is
either information not known by actual or potential competitors of the Company
or is proprietary information of the Company or its customers, clients or
partners, whether of a technical nature or otherwise, including but not limited
to, product and market research, product plans, products, services, suppliers,
customer lists and customers, prices, costs and forecasts, personnel information
and records, marketing and business development materials, software, technology
code or programs, developments, inventions, processes, formulas, designs,
drawings, engineering, hardware configuration information, licenses, finances,
budgets or other business information.

You further acknowledge and recognize the highly competitive nature of Hanover
Direct's business and that you will have the opportunity to develop substantial
relationships with existing and prospective clients, customers, strategic
partners and employees and representatives of the Company during the course of
and as a result of your employment with the Company. In light of the foregoing,
you also covenant and agree, as a condition of your continued employment, that
for a period of two (2) years following termination of your employment with
Hanover Direct (the "Restricted Period"), whether voluntary or involuntary, you
will not, directly or indirectly, hire or engage, or attempt to hire or engage,
on behalf of yourself or any other person or entity, any person known by you to
be a current employee, consultant or representative of Hanover Direct. In
addition, you also covenant and agree not, directly or indirectly, during the
Restricted Period, to intentionally or knowingly suggest, assist in or influence
a distributor, source, supplier, customer, client or contractor of Hanover
Direct to sever his, her or its business relationship with, decrease in any
material or substantial respect its activity with, or intentionally or knowingly
do anything (whether by act of commission or omission) which would be adverse in
any material or substantial respect to the interests of Hanover Direct. This
provision shall survive the termination of your employment with Hanover Direct.

You further agree that at any time upon the request of the Company or at the
time of the termination of your employment for any reason, you will immediately
deliver to Hanover Direct (and will not keep in your possession, recreate or
deliver to anyone else) any and all Confidential Information or other property
or materials belonging to the Company, its successors or assigns.

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Miscellaneous
-------------

Please understand the foregoing does not constitute a contract of employment
between you and Hanover Direct, either expressed or implied. Your employment is
"at will," meaning that either you or the Company have the right to terminate
your employment at any time, for any reason or for no reason. In addition, the
Company reserves the right at its sole discretion to modify, add or delete any
of its employee benefit programs or other policies and procedures but not to
your material detriment.

Please sign and return to me one of the enclosed copies of this letter.

                                          Sincerely,

                                          ----------------------------
                                          Thomas C. Shull
                                          President, Chief Executive Officer and
                                          Chairman of the Board

-----------------------------
[name]
Date:       , 200_

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