Document:

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CUSIP NO.: 875127 AU 6                           PRINCIPAL AMOUNT:  $400,000,000

REGISTERED NO. 1

                             TAMPA ELECTRIC COMPANY

                              6.375% Notes Due 2012

[X]      Check this box if the Note is a Global Note.
         Applicable if the Note is a Global Note:

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION, TO THE ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

     This Note is a Global Security within the meaning of the Indenture
hereinafter referred to and is registered in the name of Cede & Co., or such
other nominee of The Depository Trust Company, a New York corporation, or any
successor depositary ("Depositary"), as requested by an authorized
representative of the Depositary. This Note is exchangeable for Notes registered
in the name of a person other than the Depositary or its nominee only in the
limited circumstances described in the Indenture and may not be transferred
except as a whole by the Depositary to a nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another nominee of the
Depositary.

<TABLE>
<S>                                      <C>                                    <C>
ORIGINAL ISSUE DATE:                     INTEREST PAYMENT DATES: August 15      SINKING FUND:  N/A
August 26, 2002                          and February 15 of each year,
                                         commencing February 15, 2003.          YIELD TO MATURITY:  N/A

ISSUE PRICE:  99.197% (as a percentage
of principal amount)                     SPECIFIED CURRENCY:  U.S. dollars      REDEMPTION:  Redeemable in whole or
                                                                                in part, at the Company's option,
STATED MATURITY:  August 15, 2012        AUTHORIZED DENOMINATIONS:  N/A         from time to time at the redemption
                                         (Only applicable if specified          prices described on the reverse of
INTEREST RATE: 6.375% per annum.         currency is other than U.S. dollars.)  this Note.

                                                                                REMARKETING PROVISIONS: N/A

                                                                                DEPOSITARY:  The Depository Trust
                                                                                Company
</TABLE>

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     TAMPA ELECTRIC COMPANY, a corporation duly organized and existing under the
laws of the State of Florida (herein called the "COMPANY," which term includes
any successor corporation under the Indenture hereinafter referred to), for
value received, hereby promises to pay to CEDE & CO., or registered assigns, the
principal sum set forth on the face of this Note on the Stated Maturity, upon
the presentation and surrender hereof at the principal corporate trust office of
The Bank of New York, or its successor in trust (the "TRUSTEE") or such other
office as the Trustee has designated in writing, and to pay interest on the
unpaid principal balance hereof at a rate per annum (computed based on a 360-day
year consisting of twelve 30-day months) equal to the Interest Rate set forth on
the face of this Note for the period from the Original Issue Date to, but
excluding, the Stated Maturity.

     Interest will be payable on the Interest Payment Dates to the Person in
whose name this Note is registered at the close of business on the related
Record Date, which is the fifteenth calendar day (whether or not a Business Day)
immediately preceding the related Interest Payment Date. In each case, payments
shall be made in accordance with the provisions hereof, until the principal
hereof is paid or duly made available for payment.

     Interest on this Note will be computed on the basis of a year of 360 days
consisting of twelve 30-day months. Except for the effect of any adjustment in
the Interest Payment Date as provided in the following sentence, the amount of
interest payable for any period shorter than a full six-month period for which
interest is computed, will be computed on the basis of the actual number of days
elapsed in such a 180-day period. If any Interest Payment Date would otherwise
be a day that is not a Business Day, the payment required to be made on such
Interest Payment Date will be postponed to the next succeeding Business Day, and
no interest will accrue on such payment for the period from and after such
Interest Payment Date to the date of such payment on the next succeeding
Business Day, except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on such date.

     Payment of the principal of (and premium, if any) and any such interest on
this Note shall be made in immediately available funds at the office or agency
of the Company maintained for that purpose in the City of New York in the State
of New York, in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts.

     Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.

     Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Note shall
not be entitled to any benefit under the Indenture or be valid or obligatory for
any purpose.

                                       1

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     IN WITNESS WHEREOF, TAMPA ELECTRIC COMPANY has caused this instrument to be
duly executed.

Dated:  August 26, 2002

TRUSTEE'S CERTIFICATE                          TAMPA ELECTRIC COMPANY
OF AUTHENTICATION

This is one of the series designated
therein referred                               By: /s/ Robert D. Fagan
                                                  ------------------------------
to in the within-mentioned Indenture.          Name:  Robert D. Fagan
                                               Title: Chairman of the Board and
                                               Chief Executive Officer
THE BANK OF NEW YORK,
as Authenticating Agent for the Trustee

By: /s/ Mary K. Lagumina
    ----------------------------------
         Authorized signatory

                                       2

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                                (REVERSE OF NOTE)

                             TAMPA ELECTRIC COMPANY

                              6.375% Notes Due 2012

     This Note is one of a duly authorized series of securities of the Company
(herein called the "NOTES"), issued and to be issued under an Indenture dated as
of July 1, 1998, as supplemented by the Fourth Supplemental Indenture, dated as
of August 15, 2002 (as such has been or shall be amended or supplemented, the
"INDENTURE"), between the Company and The Bank of New York, as trustee (the
"TRUSTEE", which term includes any successor Trustee under the Indenture), to
which Indenture reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee and the Holders of the Notes and of the terms upon which the Notes
are, and are to be, authenticated and delivered. This Note is one of the
securities of the series designated on the face hereof.

                                   DEFINITIONS

     The following terms, as used herein, have the following meanings unless the
context or use clearly indicates another or different meaning or intent:

     "ADJUSTED TREASURY RATE" means, with respect to any redemption date:

     (i)  the yield, under the heading which represents the average for the
          immediately preceding week, appearing in the most recently published
          statistical release designated "H.15(519)" or any successor
          publication which is published weekly by the Board of Governors of the
          Federal Reserve System and which establishes yields on actively traded
          United States Treasury securities adjusted to constant maturity under
          the caption "Treasury Constant Maturities," for the maturity
          corresponding to the Comparable Treasury Issue (if no maturity is
          within three months before or after the Remaining Life, as defined
          below, yields for the two published maturities most closely
          corresponding to the Comparable Treasury Issue will be determined and
          the Adjusted Treasury Rate will be interpolated or extrapolated from
          such yields on a straight line basis, rounding to the nearest month);
          or

     (ii) if such release (or any successor release) is not published during the
          week preceding the calculation date or does not contain such yields,
          the rate per annum equal to the semi-annual equivalent yield to
          maturity of the Comparable Treasury Issue, calculated using a price
          for the Comparable Treasury Issue (expressed as a percentage of its
          principal amount) equal to the Comparable Treasury Price for such
          redemption date.

The Adjusted Treasury Rate will be calculated on the third Business Day
preceding the redemption date.

     "BUSINESS DAY" shall mean any day other than a Saturday or Sunday that is
neither a legal holiday nor a day on which banking institutions are authorized
or obligated by law or executive order to close in the City of New York.

                                       3

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     "COMPARABLE TREASURY ISSUE" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term of the Notes to be redeemed that would be used, at the time
of selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the remaining term
of the Notes (the "REMAINING LIFE").

     "COMPARABLE TREASURY PRICE" means (1) the average of five Reference
Treasury Dealer Quotations for such redemption date, after excluding the highest
and lowest Reference Treasury Dealer Quotations, or (2) if an Independent
Investment Banker obtains fewer than five such Reference Treasury Dealer
Quotations, the average of all such quotations.

     "DEPOSITARY" shall mean The Depository Trust Company or any successor
depositary.

     "INDEPENDENT INVESTMENT BANKER" means any of Salomon Smith Barney Inc.,
Barclays Capital Inc. and J.P. Morgan Securities Inc. or any of their respective
successors, as designated by the Company, or if those firms are unwilling or
unable to serve as such, an independent investment and banking institution of
national standing appointed by the Company.

     "INTEREST PAYMENT DATE" shall mean August 15 and February 15 of each year.

     "REFERENCE TREASURY DEALER" means:

     (i)  Salomon Smith Barney Inc., Barclays Capital Inc. and J.P. Morgan
          Securities Inc. and each of their respective successors; provided
          that, if any such Reference Treasury Dealer ceases to be a primary
          U.S. Government securities dealer in New York City (a "PRIMARY
          TREASURY DEALER"), the Company will substitute another Primary
          Treasury Dealer; and

     (ii) up to two other Primary Treasury Dealers selected by the Company.

     "REFERENCE TREASURY DEALER QUOTATIONS" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
an Independent Investment Banker, of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to an Independent Investment Banker at 5:00 p.m., New York
City time, on the third Business Day preceding such redemption date.

                                  INTEREST RATE

     This Note will bear interest at the rate per annum (computed based on a
360-day year consisting of twelve 30-day months) identified on the face of this
Note. Except for the effect of any adjustment in the Interest Payment Date as
provided in the following sentence, the amount of interest payable for any
period shorter than a full six-month period for which interest is computed, will
be computed on the basis of the actual number of days elapsed in such a 180-day
period. If any Interest Payment Date would otherwise be a day that is not a
Business Day, the payment required to be made on such Interest Payment Date will
be postponed to the next succeeding Business Day, and no interest will accrue on
such payment for the period from and after such Interest Payment Date to the
date of such payment on the next succeeding Business Day, except that, if such
Business Day is in the next succeeding calendar year, such payment

                                       4

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shall be made on the immediately preceding Business Day, in each case with the
same force and effect as if made on such date.

                               OPTIONAL REDEMPTION

     The Notes are subject to redemption, in whole or in part, at any time, and
at the option of the Company, at a redemption price equal to the greater of:

     (i)  100% of the principal amount of the Notes then outstanding to be
          redeemed, or

     (ii) the sum of the present values of the remaining scheduled payments of
          principal and interest on the Notes then outstanding to be redeemed
          (not including any portion of such payments of interest accrued as of
          the redemption date) discounted to the redemption date on a semiannual
          basis (computed based on a 360-day year consisting of twelve 30-day
          months) at the Adjusted Treasury Rate, plus 30 basis points (0.30%),
          as calculated by an Independent Investment Banker,

plus, in both of the above cases, accrued and unpaid interest thereon to the
redemption date.

     The Company will mail a notice of redemption at least 30 days but no more
than 60 days before the redemption date to each holder of the Notes to be
redeemed. If the Company elects to partially redeem the Notes, the Trustee will
select in a fair and appropriate manner the Notes to be redeemed.

     Unless the Company defaults in payment of the redemption price, on and
after the redemption date, interest will cease to accrue on the Notes or
portions thereof called for redemption.

     The Notes are not entitled to the benefit of any sinking fund or analogous
provision.

                              TRANSFER OR EXCHANGE

     As provided in the Indenture and subject to certain limitations herein and
therein set forth, the transfer of this Note is registerable in the Security
Register, upon surrender of this Note for registration of transfer at the office
or agency of the Company in any place where the principal of (and premium, if
any) and interest on this Note are payable, duly endorsed by, or accompanied by
a written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Notes of this series and of
like tenor, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.

     The Notes are issuable only in registered form without coupons and, except
for such Notes issued in book-entry form, only in denominations of $1,000 and
any integral multiple of $1,000. As provided in the Indenture and subject to
certain limitations herein and therein set forth, this Note is exchangeable for
a like aggregate principal amount of Notes of this series and of like tenor of a
different authorized denomination, as requested by the Holder surrendering the
same.

                                       5

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     No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

     Prior to due presentment of this Note for registration of transfer, the
Company or the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.

                                OTHER PROVISIONS

     The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the Securities at
the time Outstanding of each series to be affected and of the Holders of 66 2/3%
in principal amount of the Securities at the time Outstanding of all series to
be affected. The Indenture also contains provisions permitting the Holders of
specified percentages in principal amount of the Securities of each series at
the time Outstanding, on behalf of the Holders of all Securities of such series,
to waive compliance by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. To the extent
permitted by law, any such consent or waiver by the Holder of this Note shall be
conclusive and binding upon such Holder and upon all future Holders of this Note
and of any Note issued upon the registration of transfer hereof or in exchange
hereof or in lieu hereof, whether or not notation of such consent or waiver is
made upon this Note.

     No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Note at the times, place and rate, and in the coin or currency,
herein prescribed.

     All terms used in this Note which are defined in the Indenture shall have
the meanings assigned to them in the Indenture.

     This Note shall be governed by and construed in accordance with the laws of
The State of New York.

                                       6

<PAGE>

ABBREVIATIONS

     The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM                                   as tenants in common
TEN ENT                                   as tenants by the entireties
JT TEN                                    as joint tenants with right of
                                          survivorship and not as tenants
                                          in common under Uniform Gifts
UNIF GIFT MIN ACT--____CUSTODIAN____      to Minors Act
               (Custodian)     (Minor)

                -------------------
                      (State)

     Additional abbreviations may also be used though not in the above list.

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto

Please Insert Social Security or
Other Identifying Number of Assignee

---------------------------

---------------------------

--------------------------------------------------------------------------------

PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

the within Security of TAMPA ELECTRIC COMPANY and does hereby irrevocably
constitute and appoint __________________________________________________
attorney to transfer said Security on the books of the Company, with full power
of substitution in the premises.

Dated:
      ------------------------            --------------------------------------

                                          --------------------------------------

NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within instrument in every particular, without
alteration or enlargement or any change whatsoever.

                                       7<PAGE>
                                                                  EXHIBIT 10.92

                              SEVERANCE AGREEMENT

                                    BETWEEN

                         GOODY'S FAMILY CLOTHING, INC.

                                      AND

                             WILLIAM S. KEGLEY, JR.

<PAGE>

                               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>

                              SEVERANCE AGREEMENT

         THIS SEVERANCE AGREEMENT, by and between GOODY'S FAMILY CLOTHING,
INC., a Tennessee corporation (the "Company"), and WILLIAM S. KEGLEY, JR. (the
"Executive"), shall be effective as of the 19th day of June, 2002.

                                   RECITALS:

         A.       The Executive has been appointed to the position of Vice
President of Finance and Corporate Controller of the Company.

         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

<PAGE>

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.

                  (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

<PAGE>

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.

         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

<PAGE>

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 (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

<PAGE>

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.

         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

<PAGE>

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.

<PAGE>

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

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

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

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

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

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

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

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

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

                  (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.

<PAGE>

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

-------------------------------

Title:
      -------------------------
(CORPORATE SEAL)

                               EXECUTIVE:  William S. Kegley, Jr.

                                 ------------------------------------------
                               Name:  William S. Kegley, Jr.

                               Address:

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