Document:

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                                                                      EX-10.A(I)

                                    L E A S E

         THIS INDENTURE OF LEASE made as of the 1st day of January, 2001, by and
between CAPITAL PROPERTIES, INC., a Rhode Island corporation (hereinafter
referred to as "Landlord"), and METROPARK, LTD., a Rhode Island corporation
(hereinafter referred to as "Tenant").

                          W I T N E S S E T H  T H A T:

         In consideration of the rents, covenants and agreements to be paid,
kept and performed by Tenant, as hereinafter provided, Landlord hereby demises
and leases to Tenant, and Tenant hereby hires and takes from Landlord the real
property known as the parking garage adjacent to the Providence train station
located on Parcel 7A in the Capital Center, in Providence, Rhode Island, as
shown on a plan attached to this Lease as Exhibit A (hereinafter called the
"Premises").

         TO HAVE AND TO HOLD the Premises, together with all rights, privileges,
easements and appurtenances thereunto belonging and attaching, unto Tenant for a
term of two (2) years (hereinafter called the "Term") commencing as of January
1, 2001, and ending on December 31, 2002.

         This Lease is made upon the covenants and agreements herein set forth
on the part of the respective parties, all of which the parties respectively
agree to observe and comply with during the term hereof.

        1. Rental.

           During the period from January 1, 2001 to December 31, 2001, Tenant
shall pay to Landlord an annual rental of One Hundred Thirty-Eight Thousand Six
Hundred ($138,600) Dollars payable in monthly installments of Eleven Thousand
Five Hundred Fifty ($11,550) Dollars on the first day of each month without
offset, deduction or abatement.

           During the period from January 1, 2002 to December 31, 2002, Tenant
shall pay to Landlord an annual rental of One Hundred Forty Seven Thousand Six
Hundred ($147,600) Dollars payable in monthly installments of Twelve Thousand
Three Hundred Dollars ($12,300) Dollars on the first day of each month without
offset, deduction or abatement.

        2. Utilities and Other Charges.

           Tenant will pay directly before the same become delinquent all
charges, duties, rates, license and permit fees and other amounts of every
description to which the Premises or any part thereof or any improvement thereon
erected or used by Tenant may, during the term hereof, be assessed or become
liable for electricity, refuse collection, telephone or any other utilities or
services or any connection or meters therefor, whether assessed to or payable by
Landlord or Tenant. Tenant will, within ten (10) days after receipt of written
demand by Landlord, furnish Landlord with receipts or other evidence indicating
that all such amounts have been paid. Provided, however, that Tenant shall only
be responsible for those charges and assessments which are for the period of its
occupancy of the Premises.

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        3. Taxes and Assessments.

           Landlord will pay and keep current the real estate taxes assessed
against the premises .

        4. Compliance with Laws and Regulations.

           Tenant will at all times during the term hereof keep the Premises in
good order and a strictly sanitary condition and observe and perform all laws,
ordinances, orders, rules and regulations now or hereafter made by any
governmental authority for the time being applicable to the Premises or any
improvement thereon or use thereof, and with the orders, rules and regulations
of the National Board of Fire Underwriters or similar organization so far as the
same may relate to the use of the Premises, and will indemnify Landlord against
all actions, suits, damages and claims by whomsoever brought or made by reason
of the nonobservance or nonperformance of such laws, ordinances, orders, rules
and regulations, or of this covenant. Nothing herein shall obligate the Tenant
to construct any additional improvements on the Premises.

        5. Inspection.

           Tenant will permit Landlord and its agents at all reasonable times
during the term hereof to enter the Premises and examine the state of repair and
condition thereof, and the use being made of the same. Landlord may also enter
upon the Premises to perform any repairs or maintenance which Tenant has failed
to perform hereunder, and to show the premises to prospective purchasers,
tenants and mortgagees in such a fashion not to unreasonably interfere with
Tenant's business operations.

        6. Repair and Maintenance.

           Tenant will, at its own expense, from time to time and at all times
during the term hereof, well and substantially repair, maintain, amend and keep
the Premises, together with all fixtures and items of personal property used or
useful in connection therewith, including the sprinkler system, with all
necessary reparations and amendments whatsoever in as good order and condition
as they now are or may be put in, reasonable wear and tear and damage by the
elements and such unavoidable casualty against which insurance is not required
hereunder excepted. Tenant will maintain the signs on the Premises. Tenant will
have the benefit of all warranties pertaining thereto. Landlord will be
responsible for any capital replacement or improvement.

        7. Use.

           Tenant shall use the Premises only for the operation of a parking
garage and other accessories related to a parking garage which are approved by
Landlord.

        8.  Notices re Premises.

           Landlord will forthwith furnish Tenant copies of any notices it
receives regarding the Premises from any third parties which notices relate to
the Tenant's use and occupancy of the Premises.

        9. Cancellation of Lease.

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           Either Landlord or Tenant may cancel this Lease upon thirty (30)
days' written notice to the other.

       10. Insurance.

           Tenant agrees to maintain at all times public liability insurance on
an occurrence basis against all claims and demands for personal injury liability
(including, without limitation, bodily injury, sickness, disease, and death) and
damage to property which may be claimed to have occurred on the Land or in the
Building in the event of injury to any number of persons or damage to property,
arising out of any one occurrence, which shall, at the beginning of the Term, be
at least equal to $1,000,000, and to name Landlord and any mortgagees and ground
lessors designated by landlord as additional insured and furnish landlord with
the certificates thereof; such insurance shall contain a provision that the
Landlord, and each such mortgagee and ground lessor although named as an
insured, shall nevertheless be entitled to recovery under said policy for any
loss occasioned to it, its servants, agents and employees by reason of the
negligence of the Tenant; all insurance required under the terms of this Lease
shall be effected with insurers having a general policyholders rating of not
less than A in Best's latest rating guide and shall not be canceled or modified
without at least 30 days' prior written notice to each insured named therein.
Tenant shall provide landlord with certificates of all insurance required to be
carried by Tenant under the Lease at or prior to the Commencement Date and prior
to the expiration of each such policy.

       11. Landlord's Costs and Expenses.

           If Tenant shall fail to comply with any of its obligations hereunder,
landlord may, upon ten (10) days' prior written notice to Tenant (or without
notice in case of emergency), take any such action as may be reasonably required
to cure any such default by Tenant. Tenant will pay to Landlord, on demand, all
costs and expenses, including reasonable attorneys' fees, incurred by Landlord
in collecting any delinquent rents, or other charges payable by Tenant
hereunder, or in connection with any litigation commenced by or against Tenant
(other than condemnation proceedings) to which Landlord, without any fault on
its part, shall be made a party. All such amounts owing to Landlord shall
constitute additional rent hereunder.

       12.  Indemnification of Landlord.

                12.1. Tenant shall indemnify and save harmless Landlord
(regardless of Tenant's covenant to insure) against and from any and all claims
by or on behalf of any person or persons, firm or firms, corporation or
corporations, arising from the use, occupancy, conduct or management of the
Premises, unless done by or contributed to Landlord, any of its agents,
contractors, servants, employees or licensees, and shall further indemnify and
save Landlord harmless against and from any and all claims arising during the
term hereof from any condition of the Premises, or arising from any breach or
default on the part of Tenant in the performance of any covenant or agreement on
the part of Tenant to be performed pursuant to the terms of this Lease, or
arising from any act of Tenant or any of its agents, contractors, servants or
employees to any person, firm or corporation occurring during the term hereof in
or about the Premises or upon or under said areas, and from and against all
costs, counsel fees, expenses or liabilities incurred in or about any such claim
or action or proceeding brought thereon.

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                12.2. Tenant shall pay and indemnify Landlord against all legal
costs and charges incurred in obtaining possession of the Premises after the
default of Tenant or upon expiration or earlier termination of the term hereof,
other than by reason of any default of Landlord, or in enforcing any covenant or
agreement of Tenant herein contained.

       13. Liens.

                13.1. Tenant will not commit, suffer any act or neglect whereby
the Premises or any improvements thereon or the estate of Landlord therein shall
at any time during the term hereof become subject to any attachment, judgment,
lien, charge or encumbrance whatsoever, except as herein expressly provided, and
will indemnify and hold Landlord harmless from and against all loss, costs and
expenses, including reasonable attorneys' fees, with respect thereto.

                13.2. If due to any act or neglect of Tenant, any mechanic's,
laborer's or materialmen's lien shall at any time be filed against the premises
or any part hereof, Tenant, within thirty (30) days after notice of the filing
thereof shall cause the same to be discharged of record by payment, bonding or
otherwise, and if Tenant shall fail to cause the same to be discharged, then
Landlord may, in addition to any other right or remedy, cause the same to be
discharged, either by paying the amount claimed to be due, or by procuring the
discharge of such lien by deposit or by bonding proceedings, and all amounts so
paid by landlord, together with all reasonable costs and expenses incurred in
connection therewith, and together with interest thereon at the rate of ten
percent (10%) per annum from the respective dates of payment, shall be paid by
Tenant to Landlord, on demand, as additional rent hereunder.

                13.3. Nothing in this lease contained shall be deemed or
construed in any way as constituting the consent or request of Landlord, express
or implied by inference or otherwise, to any contractor, subcontractor, laborer,
materialmen, architect or engineer for the performance of any labor or the
furnishing of any materials or services for or in connection with the Premises
or any part thereof. Notice is hereby given that Landlord shall not be liable
for any labor or materials or services furnished or to be furnished to Tenant
upon credit, and that no mechanic's or other lien for any such labor, materials,
or services shall attach to or affect the fee or reversionary or other estate or
interest of Landlord in the Premises of and in this Lease.

       14. Default.

                14.1. In the event that during the term hereof any of the
following events shall occur (each of which shall be an "Event of Default");
                         (a) Tenant shall default in the payment of any
installment of the Rent for ten (10) days after the same shall become due,
during which ten-day period Tenant may cure the default;
                         (b) Tenant or any permitted assignee of Tenant shall
(i) apply for or consent to an appointment of a receiver, a trustee or
liquidator of it or of all or a substantial part of its assets; (ii) make a
general assignment for the benefit of creditors; (iii) be adjudicated a bankrupt
or insolvent; (iv) file a voluntary petition in bankruptcy or a petition or an
answer

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seeking reorganization or an arrangement with creditors to take advantage of any
insolvency law or an answer admitting the material allegations of a petition
filed against it in any bankruptcy, reorganization or insolvency proceeding or
corporate action shall be taken by it for the purpose of effecting any of the
foregoing;
                         (c) An order, judgment or decree shall be entered,
without the application, approval or consent of Tenant or any permitted assignee
of Tenant by any court of competent jurisdiction, approving a petition seeking
reorganization of Tenant or such assignee or appointing a receiver, trust or
liquidator of Tenant or such assignee or of all or a substantial part of its
assets and such order, judgment or decree shall continue unstayed and in effect
for any period of sixty (60) consecutive days; or
                         (d) Any other default by Tenant in performing any of
its other obligations hereunder shall continue uncorrected for ten (10) days
after receipt of written notice thereof from Landlord, during which period
Tenant or such assignee may cure the default; then landlord may, by giving
written notice to Tenant, either (a) terminate this Lease, (b) re-enter the
Premises by summary proceedings or otherwise, expelling Tenant and removing all
of Tenant's property therefrom, and relet the Premises and receive the rent
therefrom, or (c) exercise any other remedies permitted by law. Tenant shall
also be liable for the reasonable cost of obtaining possession of and reletting
the Premises and of any repairs and alterations or other payments necessary to
prepare them for reletting. Any and all such amounts shall be payable to
Landlord upon demand. Notwithstanding anything contained herein to the contrary,
no termination of this Lease prior to the last day of the term hereof, except as
provided in Section 15 hereof, shall relieve Tenant of its liability and
obligations under this Lease, and such liability and obligations shall survive
any such termination.

                14.2. In the event of any breach by Tenant of any of the
covenants, agreements, terms or conditions contained in this Lease, Landlord
shall be entitled to enjoin such breach or threatened breach and shall have the
right to invoke any right and remedy allowed at law or in equity, or by statute
or otherwise, as though reentry, summary proceedings and other remedies were not
provided for in this Lease.

                14.3. Each right and remedy of Landlord provided for in this
Lease shall be cumulative and shall be in addition to every other right or
remedy provided for in this Lease or now or hereafter existing, at law or in
equity, or by statute or otherwise, and the exercise or beginning of the
exercise by Landlord of any one or more of the rights or remedies provided for
in this Lease, or now or hereafter existing at law or in equity, or by statute
or otherwise, shall not preclude the simultaneous or later exercise by Landlord
of any or all other rights or remedies provided for in this Lease, or now or
hereafter existing at law or in equity, or by statute or otherwise.

       15. Eminent Domain.

           If the whole or any part of the demised premises shall be condemned
or acquired by eminent domain for any public or quasi-public use or purpose,
then the term of this Lease shall cease and terminate as of the date of vesting
of title in such proceeding and all rentals shall be paid up to the date of the
vacating of the premises by Tenant and Tenant shall have no claim against
Landlord nor the condemning authority for the value of any unexpired term of
this Lease.

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           In the event of any condemnation or taking as aforesaid, whether
whole or partial, Tenant shall not be entitled to any part of the award paid for
such condemnation and Landlord is to receive the full amount of such award,
Tenant hereby expressly waiving any right or claim to any part thereof.

       16. Condition of Premises.

           Tenant represents that the Premises, has been examined by Tenant, and
Tenant agrees that it will accept the same in the condition or state in which
they, or any of them, now are, without representation or warranty, express or
implied in fact or by law, by Landlord, and without recourse to Landlord as to
the nature, condition or usability thereof, or the use or uses to which the
Premises, or any part thereof, may be put.

       17.  Independent Covenants -- No Waiver.

                17.1. Each and every of the covenants and agreements contained
in this Lease shall be for all purposes construed to be separate and independent
covenants and the waiver of the breach of any covenant contained hereby by
Landlord shall in no way or manner discharge or relieve Tenant from Tenant's
obligation to perform each and every of the covenants contained herein.

                17.2. If any term or provision of this Lease or the application
thereof to any person or circumstance shall to any extent be invalid or
unenforceable, the remainder of this Lease, or the application of such term or
provision to persons or circumstances other than those as to which it is invalid
or unenforceable, shall not be affected thereby, and each term and provision of
this Lease shall be valid and shall be enforced to the fullest extent permitted
by law.

                17.3. The failure of Landlord to insist in any one or more cases
upon the strict performance of any of the covenants of this Lease shall not be
construed as a waiver or a relinquishment for the future of such covenant. A
receipt by Landlord of rent with knowledge of the breach of any covenant hereof
shall not be deemed a waiver of such breach, and no waiver by landlord of any
provision of this Lease shall be deemed to have been made unless expressed in
writing and signed by Landlord. All remedies to which landlord may resort under
the terms of this Lease or by law provided shall be cumulative.

       18.  Subordination.

           This Lease and the rights of Tenant hereunder are subject and
subordinate in all respects to all matters of record, including, without
limitation, deeds and all mortgages which may now or hereafter be placed on or
affect the Premises, or any part thereof, and/or Landlord's interest or estate
therein, and to each advance made and/or hereafter to be made under any such
mortgages, and to all renewals, modifications, consolidations, replacements and
extensions thereof, and all substitutions.

       19.  Quiet Enjoyment.

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           Landlord covenants that Tenant, upon paying the rent and performing
the covenants hereof on the part of Tenant to be performed shall and may
peaceably and quietly have, hold and enjoy the Premises and all related
appurtenances, rights, privileges and easements throughout the term hereof
without any lawful hindrance by landlord and any person claiming by, through or
under it.

       20. Return of Premises.

           At the expiration or other termination of the term hereof, Tenant
will remove from the Premises its property and that of all claiming under it and
will peaceably yield up to Landlord the Premises in as good condition in all
respects as the same were at the commencement of this Lease, except for ordinary
wear and tear, damage by the elements, by any exercise of the right of eminent
domain or by public or other authority, or damage which Landlord is required
herein to replace, restore or rebuild or damage for which no insurance is
required hereunder.

       21. Holdover.

           Tenant agrees to pay to landlord twice the total of all rent then
applicable for each month or portion thereof Tenant shall retain possession of
the Premises or any part thereof after the termination of this Lease (unless and
to the extent such holding over shall be pursuant to a written agreement between
Landlord and Tenant), whether by lapse of time or otherwise, and also to pay all
damages sustained by landlord on account thereof; the provisions of this
subsection shall not operate as a waiver by Landlord of any right of re-entry
provided in this Lease or under law. Tenant shall also pay all reasonable legal
fees and damages incurred by Landlord as a result of such holdover.

       22. Limitation of Liability.

           Tenant shall neither assert nor seek to enforce any claim for breach
of this Lease against any of Landlord's assets other than Landlord's interest in
the Premises, and Tenant agrees to look solely to such interest for the
satisfaction of any liability of Landlord under this Lease, it being
specifically agreed that in no event shall landlord (which term shall include,
without limitation, any of the officers, employees, agents, attorneys, trustees,
directors, partners, beneficiaries, joint venturers, members, stockholders or
other principals or representatives, disclosed or undisclosed, thereof) ever be
personally liable for any such liability.

       24. No Recording of Lease.

           Tenant hereby acknowledges and agrees that it shall not record this
Lease or any notice or memorandum of this Lease in any land evidence records or
any other public record without the express prior written consent of Landlord.
In the event of any such recording, Tenant shall be in default of this Agreement
and Landlord shall have all rights and remedies available under law or in equity
as a result of such recordation including, without limitation, the right to
terminate this Lease.

       24. Assignment and Subletting.

           Tenant will not assign this Lease, in whole or in part, nor sublet
all or any part of the Premises, nor license, nor pledge or encumber by mortgage
or other instruments its interest in this Lease without landlord's prior written
consent, which consent may be withheld by landlord

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in its sole and absolute discretion. This prohibition includes any subletting or
assignment which would otherwise occur by operation of law, merger,
consolidation, reorganization, transfer or other change of Tenant's corporate or
trustee in any federal or state bankruptcy, insolvency, or other proceedings.
Consent by landlord to any assignment or subletting shall not constitute a
waiver of the foregoing prohibition with respect to any subsequent assignment or
subletting.

       25. Use of Hazardous Material.

           Tenant shall not cause or permit any Hazardous Material to be brought
upon, kept or used in or about the Premises by Tenant, its agents, employees,
contractors or invitees without the prior written consent of Landlord. If Tenant
breaches the obligations stated in the preceding sentence, or if contamination
of the Premises by Hazardous Material otherwise occurs, Tenant shall indemnify,
protect, defend and hold Landlord harmless from any and all claims, judgments,
damages, penalties, fines, costs, liabilities or losses (including, without
limitation, diminution in value of the Premises, damages for the loss or
restriction on use of rentable Premises or usable space or of any amenity of the
Premises, damages arising from any adverse impact on marketing of Premises
space, and sums paid in settlement of claims, attorneys' fees, consultant fees
and expert fees) which arise during or after the Term as a result of such
contamination. This indemnification of Landlord by Tenant includes, without
limitation, costs incurred in connection with any investigation of site
conditions or any clean-up, remedial, removal or restoration work required by
any federal, state or local government agency or political subdivision because
of Hazardous Material present in the sole, surface water or groundwater on, near
or under the Premises.

           As used herein, the term "Hazardous Material" means any hazardous or
toxic substance, material or waste, including, but not limited to, those
substances, materials, and wastes listed in the United States Department of
Transportation Hazardous materials Table (49 CFR 172.101) or by the
Environmental Protection Agency as hazardous substances (40CFR part 302) and
amendments thereto, or such substances, materials and wastes that are or become
regulated under any applicable local, state or federal law.

           Landlord and its agents shall have the right, but not the duty, to
inspect the Premises at any time to determine whether Tenant is complying with
the terms of this Lease.

       26. Construction.

           The mention of the parties hereto by name or otherwise shall be
construed as including and referring to their respective successors and assigns
as well as to the parties themselves whenever such construction is required or
admitted by the provisions hereof; and all covenants, agreements, conditions,
rights, powers and privileges hereinbefore contained shall inure to the benefit
of and be binding upon the successors and assigns of such parties, unless
otherwise provided.

       27. Permits.

           Tenant, at its cost, shall obtain any necessary permits for the
Premises from the City of Providence.

       28. Parking Facility Operation and Maintenance Agreement.

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           This lease is made subject to the terms and conditions set forth in
the Parking Facility Operation and Maintenance Agreement, which agreement is
attached hereto as Exhibit B.

       29. Notices.

           Whenever notice shall be given under this Lease, the same shall be in
writing and shall be sent by certified or registered mail, return receipt
requested as follows:

                To the Landlord:    100 Dexter Road
                                    East Providence, Rhode Island  02914

                To the Tenant:      c/o Charles Meyers
                                    56 Pine Street
                                    Providence, Rhode Island  02903

                To the Tenant's     Charles Koutsogiane
                  Attorney:         One Grove Avenue
                                    East Providence, Rhode Island  02914

or to such other address or addresses as each party may from time to time
designate by like notice to the other. Said notice shall be valid and times
begin to run hereunder upon receipt of the party to which said notice is given.

           IN WITNESS WHEREOF, the parties hereto have caused these presents to
be executed in duplicate as of the day and year first above written.

CAPITAL PROPERTIES, INC.                         METROPARK, LTD.

By /s/ Ronald P. Chrzanowski                     By /s/ Charles Meyers
   ---------------------------------                ---------------------------
    Ronald P. Chrzanowski                           Charles Meyers, President
    President

STATE OF RHODE ISLAND
COUNTY OF PROVIDENCE

         In Providence, in said County on the 2nd day of October, 2000, before
me personally appeared RONALD P. CHRZANOWSKI, President of CAPITAL PROPERTIES,
INC., to me known and known by me to be the person executing the foregoing
instrument on behalf of said corporation, and he acknowledged said instrument by
him executed to be his free act and deed and the free act and deed of said
corporation.

                                                 /s/ Gloria P. Hopkins
                                                 ------------------------------
                                                 Notary Public

                                      -25-
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STATE OF RHODE ISLAND
COUNTY OF PROVIDENCE

         In Providence, in said County on the 10th day of October, 2000, before
me personally appeared CHARLES MEYERS, President of METROPARK, LTD., to me known
and known by me to be the person executing the foregoing instrument on behalf of
said corporation, and he acknowledged said instrument by him executed to be his
free act and deed and the free act and deed of said corporation.

                                              /s/ Carolyn M.Bouchard
                                              ---------------------------------
                                              Notary Public

                                    GUARANTEE

In consideration of the execution of the foregoing lease by the Landlord, the
undersigned (jointly and severally, if more than one) guarantees that the Tenant
will pay all rent thereunder and will perform all other terms, conditions or
agreements on its part to be performed or fulfilled, and agrees that the
foregoing lease may be amended from time to time by the parties thereto without
notice to the undersigned. The undersigned consents that extensions of time of
payment or any other indulgences may be granted to the Tenant without notice to
and without releasing or affecting in any way the liability of the undersigned
and the undersigned waives demand and notice of default. This guarantee is in
addition to any other security which the Landlord may have for the performance
of the Tenant's obligations and the Landlord may have the recourse to this
guarantee without first pursuing the Landlord's remedies against such other
security, if any. The Landlord may release, in whole or in part, any other
security without releasing or affecting in any way the liability of the
undersigned. In addition, the undersigned will pay to the Landlord all costs and
expenses (including attorneys' fees) incurred in connection with the enforcement
of this guarantee.

Executed this 10th day of October, 2000.

                                              /s/ Charles Meyers
                                              --------------------------------
                                              Charles Meyers

                                      -26-<PAGE>   1
                                                                   EXHIBIT 10.87

                               SEVERANCE AGREEMENT

                                     BETWEEN

                          GOODY'S FAMILY CLOTHING, INC.

                                       AND

                                CHRIS A. BULLARD

<PAGE>   2
                                TABLE OF CONTENTS

<TABLE>
<S>      <C>                                                                                                <C>
1.       Definitions........................................................................................1

2.       Termination of Employment..........................................................................2

3.       Obligations of the Company Upon Termination........................................................3

4.       Non-exclusivity of Rights..........................................................................5

5.       No Duty to Mitigate................................................................................5

6.       Arbitration of Disputes............................................................................5

7.       Confidential Information and Nonsolicitation.......................................................6

8.       Successors.........................................................................................6

9.       Miscellaneous......................................................................................7
</TABLE>

<PAGE>   3

                               SEVERANCE AGREEMENT

         THIS SEVERANCE AGREEMENT, by and between GOODY'S FAMILY CLOTHING, INC.,
a Tennessee corporation (the "Company"), and CHRIS A. BULLARD (the "Executive"),
shall be effective as of the 4th day of February, 2001.

                                    RECITALS:

         A.       The Executive has been appointed to the position of Vice
President, Sales for the Southern Region.

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

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

         1.       Definitions.

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

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

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

                  (d)      "Date of Termination" shall have the meaning set
forth in Section 2(e).

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

<PAGE>   4

                  (f)      "Incentive Bonus" shall mean the annual incentive
target bonus payable under the Incentive Plan.

                  (g)      "Incentive Plan" shall mean the Company's "Short Term
Incentive Plan" under which certain employees are eligible to receive an annual
incentive target bonus based on performance and other specific objectives
adopted by the Compensation Committee of the Board.

                  (h)      "Notice of Termination" shall have the meaning as set
forth in Section 2(d).

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

                  (j)      "Senior Executive Officer Group" shall mean the
Company's senior vice presidents, executive vice presidents, president and/or
chief operating officer, and chief executive officer, and any other senior
executives of the Company holding similar positions with the Company as may be
appointed by the Board from time to time.

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

                  (l)      "Supplemental Payment Date" shall have the meaning as
set forth in Section 3(c).

         2.       Termination of Employment.

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

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

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

                  (d)      Notice of Termination. Any termination by the Company
for Cause shall be communicated by a written Notice of Termination to the other
party hereto given in accordance with Section 9(c). For purposes of this
Agreement, a "Notice of Termination" means a written notice given in the case of
a termination for Cause which (i) indicates the specific termination provision
in this Agreement relied upon, (ii) sets forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of the Executive's
employment, and (iii) if the termination date is other than the date of receipt
of such notice, specifies the termination date (which date shall be not more
than thirty (30) days after the receipt of such notice).

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

                                       2
<PAGE>   5

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

                  (a)      Death, Disability and Retirement. If the Executive's
employment is terminated by reason of the Executive's death, Disability, or
retirement on or after the attainment of age sixty-five (65), the Company shall
have no further obligations to the Executive's legal representatives under this
Agreement other than payment of the Accrued Obligations. If the Executive's
employment is terminated by reason of the Executive's death or Disability, the
Company shall have the additional obligation, subject to the terms of the
Incentive Plan and further provided that the Executive has been employed by the
Company for the first six (6) months of the then applicable fiscal year, to pay
a cash amount equal to a portion of the Incentive Bonus, the product of a
fraction, the numerator of which is the number of days elapsed since the date
the Incentive Plan began for the applicable fiscal year through the date of the
Disability or the date of death of the Executive, and the denominator of which
is the total number of days of the applicable fiscal year for such Incentive
Plan. Unless otherwise directed by the Executive (or, in the case of the
Incentive Plan or a Qualified Plan, as may be required by such Incentive Plan or
Qualified Plan) all Accrued Obligations shall be paid to the Executive, his
beneficiaries or his estate, as applicable, in a lump sum in cash within thirty
(30) days of the Date of Termination.

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

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

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

                                    (A)     all Accrued Obligations;

                                    (B)     a cash amount equal to three (3)
months of the Executive's Base Salary at the rate in effect as of the date when
the Notice of Termination was given;

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

                           In addition, if the Executive has not accepted
employment from a subsequent employer prior to the date which is four (4) months
from the Date of Termination (the "Supplemental Payment Date"), commencing on
the Supplemental Payment Date the Company shall pay the Executive an amount
equal to fifty percent (50%) of his monthly Base Salary at the rate in effect as
of the date when the Notice of Termination was given in equal monthly
installments until the earlier of (i) the payment of the third

                                       3
<PAGE>   6

(3rd) monthly installment or (ii) the date of the Executive's acceptance of
employment from a subsequent employer. The Executive shall notify the Company
immediately upon his acceptance of any such new employment if secured prior to
the payment by the Company of such three (3) additional monthly installments.

                  (d)      Release. As a condition precedent to the receipt of
any termination benefits payable to the Executive under this Section 3, the
Executive agrees to execute a general release among other things releasing the
Company from any obligation or liability (other than those contained in Sections
3, 6, 8 and 9 hereof, to the extent an obligation under such section arose at or
prior to the Date of Termination and remains unfulfilled). Such release shall
exclude the Executive's rights under any Qualified Plan.

                  (e)      Discharge of Company's Obligations. Subject to the
performance of its obligations under Sections 3, 6, 8 and 9 (and then, only to
the extent an obligation under such section arose at or prior to the Date of
Termination and remains unfulfilled), the Company shall have no further
obligations to the Executive under this Agreement in respect of any termination
of employment.

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

         5.       No Duty to Mitigate. The Executive shall not be obligated to
seek other employment by way of mitigation of the amounts payable to the
Executive under any of the provisions of this Agreement.

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

                                       4
<PAGE>   7

         7.       Confidential Information and Nonsolicitation.

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

                  (b)      Upon termination of the Executive's employment for
any reason, the Executive, for the twelve (12) month period following the Notice
of Termination, shall not, on his own behalf or on behalf of any person or
entity, directly or indirectly solicit or aid in the solicitation of any
employees of the Company to leave their employment. In the event the Executive
violates the terms of Section 7(a) or this Section 7(b), the Employee shall
forfeit the right to all salary and benefits that the Executive and/or his
family members were otherwise entitled pursuant to the terms of Section 3. Also,
in the event that this Section 7 is determined to be unenforceable in part, it
shall be construed to be enforceable to the maximum extent permitted by law.

                  (c)      The Executive agrees that the covenants of
confidentiality and non-solicitation contained in this Section 7 are reasonable
covenants under the circumstances and necessary to protect the business
interests and properties of the Company. The Executive agrees that irreparable
loss and damage will be suffered by the Company should the Executive breach any
of the covenants contained in this Section 7. Accordingly, the Executive agrees
that the Company, in addition to all remedies provided at law or in equity,
shall be entitled to a temporary restraining order and temporary and permanent
injunctions to prevent a breach or contemplated breach of any of the covenants
contained in this Section 7.

         8.       Successors.

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

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

         9.       Miscellaneous.

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

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

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

                                       5
<PAGE>   8

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

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

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

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

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

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

                  (g)      Entire Agreement. This Agreement expresses the entire
understanding and agreement of the parties regarding the terms and conditions
governing the Executive's employment with the Company, and all prior agreements
governing the Executive's employment with the Company shall have no further
effect; provided, however, that except as specifically provided herein, the
terms of this Agreement do not supersede the terms of any grant or award to the
Executive under any stock option or profit sharing program of the Company.

                                       6
<PAGE>   9

         IN WITNESS WHEREOF, the Executive has hereunto set his hand and the
Company has caused this Agreement to be executed in its name on its behalf, and
its corporate seal to be hereunto affixed and attested by its Secretary, all
effective as of the day and year first above written.

                                    GOODY'S FAMILY CLOTHING, INC.

                                    By: /s/ Robert M. Goodfriend
                                        ----------------------------------------
                                            Robert M. Goodfriend
                                    Title:  Chairman and Chief Executive Officer
ATTEST:

/s/ Regis J. Hebbeler
------------------------------
Title: Assistant Secretary
      ------------------------
(CORPORATE SEAL)

                                    EXECUTIVE:  Chris A. Bullard

                                    /s/ Chris A. Bullard
                                    --------------------------------------------
                                    Name:  Chris A. Bullard

                                    Address:

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