Document:

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                                                                   EXHIBIT 10.11

                                    GUARANTY

         THIS GUARANTY, dated as of February 9, 2001 (as amended, modified or
supplemented from time to time in accordance with its terms, this "Guaranty"),
is issued by UNIVERSAL COMPRESSION HOLDINGS, INC., a Delaware corporation
(together with its successors and permitted assigns, the "Guarantor"), for the
benefit of UCO COMPRESSION LLC, a Delaware limited liability company (together
with its successors and permitted assigns, the "Head Lessee"), BRL UNIVERSAL
COMPRESSION FUNDING I, L.P., a Delaware limited partnership (together with its
successors and permitted assigns, the "Issuer" or the "Head Lessor"), and their
respective successors and assigns, including, but not limited to WELLS FARGO
BANK, NATIONAL ASSOCIATION, a national banking association, as indenture trustee
(the "Indenture Trustee"; each of the Head Lessee, the Head Lessor and the
Indenture Trustee, a "Beneficiary" and collectively, the "Beneficiaries").

         PRELIMINARY STATEMENTS:

         (1) The Head Lessee and the Head Lessor are entering into that certain
Master Equipment Lease Agreement, dated as of February 9, 2001 (as amended,
modified or supplemented from time to time in accordance with its terms, the
"Head Lease") pursuant to which the Head Lessor will lease certain Compressors
to the Head Lessee;

         (2) The Head Lessee, the Head Lessor and Universal Compression, Inc.
("UCI") will enter into a management agreement, dated as of February 9, 2001 (as
amended, modified or supplemented from time to time in accordance with its
terms, the "Management Agreement") pursuant to which UCI will agree to manage
certain Compressors on behalf of the Head Lessor or the Head Lessee, as the case
may be;

         (3) The Issuer is issuing one or more classes of notes (collectively,
the "Notes") pursuant to an indenture (as amended, modified or supplemented from
time to time in accordance with its terms, the "Indenture"), dated as of
February 9, 2001, between the Issuer and the Indenture Trustee, which Notes will
be collateralized by, inter alia, all of the Issuer's right, title and interest
in and to the Head Lease and the Management Agreement;

         (4) UCI is a wholly-owned subsidiary of the Guarantor;

         (5) Issuer requires that the Guarantor guarantee the payment and
performance by UCI under the Management Agreement as a condition to leasing
Compressors to Head Lessee under the Head Lease;

         (6) Guarantor will obtain substantial direct and indirect benefit from
the lease of the Compressors to the Head Lessee and the management thereof by
UCI, and is willing to provide this guaranty on the terms and conditions set
forth herein;

         NOW, THEREFORE, in consideration of the premises and other
consideration, the receipt and sufficiency of which is hereby acknowledged by
the Guarantor, the Guarantor hereby agrees as follows:

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         SECTION 1. Definitions. Capitalized terms used in this Guaranty, unless
otherwise defined herein, shall have the meaning set forth in the Indenture or,
if not defined therein, as defined in the Management Agreement.

         SECTION 2. Guaranty. Guarantor hereby unconditionally guarantees the
full and prompt payment when due, whether by acceleration or otherwise, and at
all times thereafter, and the full and prompt performance, of the obligations of
UCI as the initial Manager under the Management Agreement (UCI in this capacity,
the "Guaranteed Party"), whether monetary or otherwise, howsoever created,
arising or evidenced, whether direct or indirect, primary or secondary, absolute
or contingent, joint or several, now or hereafter existing or due or to become
due, which arise out of or in connection with the Management Agreement (all of
such obligations being hereinafter collectively called the "Liabilities");
provided that nothing contained herein shall be deemed to constitute credit
recourse to the Guarantor for payment of (A) losses arising solely from the
financial inability of a User to make rental or other payments under a User
Lease, (B) losses arising solely from the failure of the remarketing proceeds of
a Compressor to equal or exceed the Appraised Value thereof for reasons other
than the Manager's failure to comply with the Services Standard, or (C) the
Notes. Guarantor further agrees to pay all expenses (including reasonable
attorneys' fees and legal expenses) paid or incurred by any Beneficiary in
endeavoring to collect the Liabilities, or any part thereof, and in enforcing
this Guaranty.

         SECTION 3. Continuing Guaranty. This Guaranty shall in all respects be
a continuing, absolute and unconditional guaranty, and shall remain in full
force and effect (notwithstanding, without limitation, that at any time or from
time to time all Liabilities may have been paid in full), subject to
discontinuance only upon payment and performance in full of: (i) all Liabilities
and (ii) any and all expenses paid or incurred by a Beneficiary in endeavoring
to collect the Liabilities and in enforcing this Guaranty; and all of the
agreements and obligations under this Guaranty shall remain fully in effect
until all such obligations and expenses finally shall have been paid in full.

         SECTION 4. Rescission. Guarantor further agrees that, if at any time
all or any part of any payment theretofore applied by Beneficiary to any of the
Liabilities is or must be rescinded or returned by Beneficiary for any reason
whatsoever, such Liabilities shall, for the purposes of this Guaranty, to the
extent that such payment is or must be rescinded or returned, be deemed to have
continued in existence, notwithstanding such application by Beneficiary, and
this Guaranty shall continue to be effective or be reinstated, as the case may
be, as to such Liabilities, all as though such application by Beneficiary had
not been made.

         SECTION 5. Certain Actions. Each Beneficiary may, from time to time at
its sole discretion and without notice to Guarantor, take any or all of the
following actions without affecting the obligations of Guarantor hereunder: (a)
retain or obtain a lien upon or a security interest in any property to secure
any of the Liabilities or any obligation hereunder; (b) retain or obtain the
primary or secondary obligation of any obligor or obligors, in addition to
Guarantor, with respect to any of the Liabilities or any obligation hereunder;
(c) extend or renew for one or more periods (regardless of whether longer than
the original period), alter or exchange any of the Liabilities, or release or
compromise any obligation of Guarantor hereunder or any obligation of any nature
of any other obligor including UCI with respect to any of the Liabilities; (d)
release or fail to perfect its lien upon or security interest in, or impair,
surrender, release or permit any substitution or exchange for, all or

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any part of any property securing any of the Liabilities or any obligation
hereunder, or extend or renew for one or more periods (regardless of whether
longer than the original period) or release, compromise, alter or exchange any
obligations of any nature of any obligor with respect to any such property; and
(e) resort to Guarantor for payment of any of the Liabilities, regardless of
whether Beneficiary shall have resorted to any property securing any of the
Liabilities or any obligation hereunder or shall have proceeded against any
other obligor primarily or secondarily obligated with respect to any of the
Liabilities.

         SECTION 6. Subrogation. Any amounts received by a Beneficiary from
whatsoever source on account of the Liabilities may be applied by it toward the
payment of such of the Liabilities, and in such order of application, as
Beneficiary may from time to time elect. Until one year and one day after
payment of the full amount of all Liabilities and performance of all of
Guarantor's obligations hereunder, no payment made by or for the account of
Guarantor pursuant to this Guaranty shall entitle Guarantor by subrogation,
indemnity or otherwise to any payment by UCI or from or out of any property of
UCI and Guarantor shall not exercise any right or remedy against UCI or any
property of UCI by reason of any performance by Guarantor of this Guaranty.

         SECTION 7. Waiver. Guarantor hereby expressly waives: (a) notice of any
Beneficiary's acceptance of this Guaranty; (b) notice of the existence or
creation or non-payment of all or any of the Liabilities; (c) presentment,
demand, notice of dishonor, protest, and all other notices whatsoever (provided
that nothing contained in this clause (c) shall affect any obligations to give
notice or make demand as set forth in the Management Agreement); and (d) all
diligence in collection or protection of or realization upon the Liabilities or
any thereof, any obligation hereunder, or any security for or guaranty of any of
the foregoing.

         SECTION 8. Unconditional Nature of Guaranty. This Guaranty shall
constitute a guaranty of payment or of performance and not of collection, and
the Guarantor specifically agrees that it shall not be necessary, and that the
Guarantor shall not be entitled to require, before or as a condition of
enforcing the liability of the Guarantor under this Guaranty or requiring
payment or performance of the Liabilities by the Guarantor hereunder, or at any
time thereafter, that any Person: (a) file suit or proceed to obtain or assert a
claim for personal judgment against UCI or any other Person that may be liable
for any Liabilities; (b) make any other effort to obtain payment or performance
of any Liabilities from UCI or any other Person that may be liable for such
Liabilities; (c) foreclose against or seek to realize upon any security now or
hereafter existing for such Liabilities; (d) exercise or assert any other right
or remedy to which such Person is or may be entitled in connection with any
Liabilities or any security or other guaranty therefor; or (e) assert or file
any claim against the assets of UCI or any other Person liable for any
Liabilities. Notwithstanding anything herein to the contrary, no provision of
this Guaranty shall require the Guarantor to pay, perform or discharge any
Liabilities prior to the time such Liabilities is due and payable. No delay on
any Beneficiary's part in the exercise of any right or remedy shall operate as a
waiver thereof, and no single or partial exercise by any Beneficiary of any
right or remedy shall preclude other or further exercise thereof or the exercise
of any other right or remedy; nor shall any modification or waiver of any of the
provisions of this Guaranty be binding upon Beneficiary except as expressly set
forth in a writing duly signed by each Beneficiary. No action of Beneficiary
permitted hereunder shall in any way affect or impair any Beneficiary's rights
or Guarantor's obligations under this Guaranty. For the purposes of this
Guaranty, Liabilities shall include all of UCI's obligations under the
Management

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Agreement, notwithstanding any right or power of UCI or anyone else to assert
any claim or defense as to the invalidity or unenforceability of any such
obligation, and no such claim or defense shall affect or impair the obligations
of Guarantor hereunder. Guarantor's obligations under this Guaranty shall be
absolute and unconditional irrespective of any circumstance whatsoever which
might constitute a legal or equitable discharge or defense of Guarantor.
Guarantor hereby acknowledges that there are no conditions to the effectiveness
of this Guaranty.

         SECTION 9. Information. Guarantor has and will continue to have
independent means of obtaining information concerning UCI's affairs, financial
condition and business. Beneficiary shall not have any duty or responsibility to
provide Guarantor with any credit or other information concerning UCI's affairs,
financial condition or business which may come into Beneficiary's possession.

         SECTION 10. Representations and Warranties. Guarantor represents and
warrants as follows:

              (a) Organization and Good Standing. It has been duly organized and
         is validly existing as a corporation in good standing under the laws of
         its state of incorporation, with corporate power and authority to own
         its properties and to conduct its business as such properties are
         presently owned and such business is presently conducted.

              (b) Due Qualification. It is duly licensed, qualified and
         authorized to do business and is in good standing in each jurisdiction
         where the ownership, leasing or operation of its property or the
         conduct of its business requires such licensure or qualification except
         for failures to be so qualified which, individually or in the
         aggregate, could not reasonably be expected to have a material adverse
         effect on the business, operations, property, assets, liabilities,
         condition (financial or otherwise) or prospects of Guarantor.

              (c) Power and Authority; Due Authorization. It has (i) all
         necessary power, authority and legal right to execute, deliver and
         perform its obligations under this Guaranty and (ii) duly authorized by
         all necessary corporate action such execution, delivery and performance
         of this Guaranty.

              (d) Binding Obligations. This Guaranty constitutes the legal,
         valid and binding obligation of Guarantor, enforceable in accordance
         with its terms, except as enforceability may be limited by bankruptcy,
         insolvency, reorganization or other similar laws affecting the
         enforcement of creditors' rights generally and by general principles of
         equity, regardless of whether such enforceability is considered in a
         proceeding in equity or at law.

              (e) No Violation. The execution, delivery and performance of this
         Guaranty will not (i) conflict with, or result in any breach of any of
         the terms and provisions of, or constitute (with or without notice or
         lapse of time or both) a default under (A) the certificate of
         incorporation or by-laws of Guarantor or (B) any indenture, lease, loan
         agreement, receivables purchase agreement, mortgage, deed of trust, or
         other agreement or instrument to which Guarantor is a party or by which
         it or its property is bound, (ii) result in or require the creation or
         imposition of any Lien upon any of its properties pursuant to the terms
         of any such indenture, lease, loan agreement, receivables purchase
         agreement, mortgage, deed of trust, or

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         other agreement or instrument or (iii) violate any law or any order,
         rule, regulation applicable to Guarantor of any court or of any
         federal, state or foreign regulatory body, administrative agency or
         other governmental instrumentality having jurisdiction over Guarantor
         or any of its properties.

              (f) Solvency. The execution, delivery and performance by the
         Guarantor of this Guaranty will not render the Guarantor insolvent, nor
         is it being made in contemplation of the Guarantor's insolvency; the
         Guarantor does not, in its reasonable judgment, have an unreasonably
         small capital for conducting its business as presently contemplated by
         it.

         SECTION 11. Successors and Assigns; Amendment. This Guaranty shall be
binding upon Guarantor and upon Guarantor's successors and assigns and all
references herein to Guarantor or UCI shall be deemed to include any successor
or successors whether immediate or remote, to such Person. Guarantor shall not
assign any of its obligations hereunder without the prior written consent of
each Beneficiary.

              (a) This Guaranty shall inure to the benefit of each Beneficiary
         and respective its successors and assigns and all references herein to
         Beneficiary shall be deemed to include any successors and assigns of
         Beneficiary (whether or not reference in a particular provision is made
         to such successors and assigns). Without limiting the foregoing,
         Guarantor acknowledges and agrees that each Beneficiary's rights to
         receive payment and exercise rights and pursue remedies under this
         Guaranty are being assigned to the Issuer which will further assign
         such rights to the Indenture Trustee, for the benefit of the persons
         set forth in the Indenture.

              (b) No amendment or waiver of any provision of this Guaranty, and
         no consent to any departure by the Guarantor herefrom, shall in any
         event be effective unless the same shall be in writing and signed by
         the Guarantor and each Beneficiary and then such waiver or consent
         shall be effective only in the specific instance and for the specific
         purpose for which given.

         SECTION 12. GOVERNING LAW. THIS GUARANTY SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICT OF LAW PRINCIPLES. Wherever possible each provision of this
Guaranty shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Guaranty shall be prohibited by or
invalid under such law, such provision shall be ineffective only to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Guaranty.

         SECTION 13. Consent to Jurisdiction; Waiver of Jury Trial. Each
Beneficiary may enforce any claim arising out of this Guaranty in any state or
federal court having subject matter jurisdiction and located in New York, New
York and with respect to any such claim, Guarantor hereby irrevocably submits to
the jurisdiction of such courts. Guarantor irrevocably consents to the service
of process out of said courts by mailing a copy thereof, by registered mail,
postage prepaid, to Guarantor, and agrees that such service, to the fullest
extent permitted by law, (i) shall be deemed in every respect effective service
of process upon it in any such suit, action or proceeding and (ii)

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shall be taken and held to be valid personal service upon and personal delivery
to it. Nothing herein contained shall preclude Beneficiary from bringing an
action or proceeding in respect hereof in any other country, state or place
having jurisdiction over such action. Guarantor irrevocably waives, to the
fullest extent permitted by law, any objection which it may now or hereafter
have to the laying of the venue of any such suit, action or proceeding brought
in such a court located in New York, New York and any claim that any such suit,
action or proceeding brought in such court has been brought in an inconvenient
forum. GUARANTOR HEREBY EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY
ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS GUARANTY OR
UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN
THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR ARISING FROM ANY RELATIONSHIP
EXISTING IN CONNECTION WITH THIS GUARANTY, AND AGREES THAT ANY SUCH ACTION OR
PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.

         SECTION 14. Notices. All notices, demands or requests given pursuant to
this Agreement shall be in writing, sent by overnight courier service or by
telefax or hand delivery to the following addresses:

          To Manager:                Universal Compression, Inc.
                                     4440 Brittmoore Road
                                     Houston, Texas  77042

          To Issuer:                 BRL Universal Compression Management, Inc.
                                     2911 Turtle Creek Boulevard, Suite 1240
                                     Dallas, Texas 75219
                                     Attn: Gregory C. Greene

          To Lessee:                 UCO Compression LLC
                                     4440 Brittmoore Road
                                     Houston, Texas  77042

          To the Indenture Trustee:  Wells Fargo Bank, National Association
                                     Sixth & Marquette Avenue
                                     MAC N9311-161
                                     Minneapolis, MN 55479

         Notice shall be effective and deemed received (a) one (1) day after
being delivered to the courier service, if sent by courier, (b) upon receipt of
confirmation of transmission, if sent by telecopy, or (c) when delivered, if
delivered by hand. Copies of each such notice shall be sent to the
Administrative Agent: First Union Securities, Inc., 301 S. College St., TW-9,
Charlotte, North Carolina 28288, Attention: Manoj Kumar.

                            [SIGNATURE PAGE FOLLOWS]

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         IN WITNESS WHEREOF, this Guaranty has been executed and delivered by
Guarantor's duly authorized officer as of the date first written above.

                                UNIVERSAL COMPRESSION HOLDINGS, INC.

                                By:   /s/ RICHARD W. FITZGERALD
                                   -------------------------------------------
                                   Name:  Richard W. FitzGerald
                                   Title: Senior Vice President

GUARANTY<PAGE>

                                                                    Exhibit 10.1
                                 AMENDMENT NO. 1
                                 ---------------

                  TO AMENDED AND RESTATED EMPLOYMENT AGREEMENT
                  --------------------------------------------

                  AMENDMENT No. 1 dated as of November 4, 2000 to Amended and
Restated Employment Agreement dated as of June 7, 1999 (the "Employment
Agreement") by and between NORTON MCNAUGHTON OF SQUIRE, INC., a New York
corporation (the "Company"), and PETER BONEPARTH (the "Employee").

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

                  WHEREAS, the Company and the Employee have heretofore entered
into an Employment Agreement dated as of April 30, 1997 (the "Old Employment
Agreement"), which Old Employment Agreement was amended and restated in its
entirety pursuant to the Employment Agreement; and

                  WHEREAS, the Company and the Employee desire to amend and
restate certain sections of the Employment Agreement as hereinafter set forth.

                  NOW, THEREFORE, in consideration of the premises and the
mutual agreements hereinafter set forth, the parties hereto hereby agree as
follows:

                  A.    The first sentence of Section 2 of the Employment
Agreement is hereby amended and restated to read in its entirety as follows:

                  "The Employee shall serve in the positions of Chairman of the
                  Board, Chief Executive Officer, President and Chief Operating
                  Officer of the Company in the New York City metropolitan
                  area."

                  B.    Section 3 of the Employment Agreement is hereby amended
and restated to read in its entirety as follows:

                        "3.      Compensation.
                                 ------------

                        3.1      Salary. During the Term, in consideration of
                                 ------
                  the performance by the Employee of the services set forth in
                  Section 2 and his observance of the other covenants set forth
                  herein, the Company shall pay the Employee, and the Employee
                  shall accept, a salary at a rate of $800,000 per annum for the
                  fiscal year of the Company ending in 2001, $900,000 per annum
                  for the fiscal year of the Company ending in 2002 and
                  $1,000,000 per annum for the fiscal year of the Company ending
                  in 2003, payable in accordance with the standard payroll
                  practices of the Company.

                        3.2      Bonus. During the Term, in addition to the
                                 -----
                  salary provided for in Section 3.1, the Employee shall
                  participate in the 2001 McNaughton

<PAGE>

                                                                               2

                  Apparel Group Inc. Incentive Bonus Plan for Senior Officers
                  (the "Bonus Plan"), subject to the approval of the Bonus Plan
                  by the stockholders of the Company at the annual meeting of
                  the stockholders in March 2001, and any successor p lan to the
                  Bonus Plan. The Employee's Target Bonus for the Applicable
                  Fiscal Year under, and as defined in, the Bonus Plan shall be
                  an amount equal to 80% of the Employee's salary for the
                  Applicable Fiscal Year as set forth in Section 3.1. The
                  Employee shall be eligible to participate in any other bonus
                  or compensation plan for executives of the Company in effect
                  during the Term.

                           3.3      Options.
                                    -------

                           (a)      Confirmation of Terms. The Company and the
                                    ---------------------
                  Employee acknowledge and agree that (i) pursuant to Section
                  3.4 of the Old Employment Agreement, on April 30, 1997, the
                  Parent granted to the Employee options (the "First Options")
                  to purchase an aggregate of 700,000 shares of Common Stock of
                  the Parent at an exercise price of $5.50 per share, all of
                  which First Options are currently exercisable and (ii) on
                  April 28, 1999, the Parent granted to the Employee options
                  (the "Second Options"; and together with the First Options,
                  the "Employment Agreement Options") to purchase an aggregate
                  of 100,000 shares of Common Stock of the Parent at an exercise
                  price of $5.50 per share, one-third (1/3) of which Second
                  Options became exercisable on April 28, 2000 and another
                  one-third (1/3) of which Second Options will become
                  exercisable on each of April 28, 2001 and April 28, 2002
                  respectively, and which Second Options were intended to be and
                  are subject to the same terms and conditions pursuant to
                  Section 3.4 of the Old Employment Agreement as the First
                  Options (except as to vesting). The Company and the Employee
                  also agree that (i) the Employment Agreement Options shall, in
                  addition to the terms and conditions thereof set forth in this
                  subsection (a), be subject to the terms and conditions set
                  forth in subsections (b), (c) and (d) below and (ii) in the
                  event of any conflict between this Section 3.3, on the one
                  hand, and the stock option certificates evidencing Employment
                  Agreement Options or Section 3.4 of the Old Employment
                  Agreement, on the other hand, the terms and conditions of this
                  Section 3.3 shall control.

                           (b)      Change in Control. In connection with any
                                    -----------------
                  merger or consolidation involving the Parent which results in
                  the holders of the outstanding voting securities of the Parent
                  (determined immediately prior to such merger or consolidation)
                  owning less than a majority of the outstanding voting
                  securities of the surviving corporation (determined
                  immediately following such merger or consolidation), or any
                  sale or transfer by the Parent of all or substantially all its
                  assets or any tender offer or exchange offer for or the
                  acquisition, directly or indirectly, by any person or group of
                  all or a majority of the then outstanding voting

<PAGE>

                                                                               3

                  securities of the Parent, in each case occurring during the
                  Term, all outstanding Second Options shall become vested and
                  exercisable in full, notwithstanding any other provision
                  hereof, on and after (i) fifteen (15) days prior to the
                  effective date of such merger, consolidation, sale, transfer
                  or acquisition or (ii) the date of commencement of such tender
                  offer or exchange offer, as the case may be.

                           (c)      Term of Options.  Except as provided below,
                                    ---------------
                  the term of the Employment Agreement Options shall be ten
                  years from the applicable date of grant.

                                    (i)   (a) In the event of termination of the
                  employment of the Employee pursuant to Section 6.1 of this
                  Agreement, (b) in the event of the termination of the
                  employment of the Employee with the Company following the Term
                  as a result of the death of the Employee, or (c) in the event
                  of the death of the Employee during the Consulting Term (as
                  defined in Section 7.1 below), then in any case, the
                  Employee's estate shall be entitled to exercise, for a period
                  of two years from the date of the Employee's death, that
                  number of Employment Agreement Options which are vested and
                  exercisable on the date of the Employee's death.

                                    (ii)  (a) In the event of termination of the
                  employment of the Employee pursuant to Section 6.2 of this
                  Agreement, the Employee shall be entitled to exercise, for the
                  Disability Exercise Term (as hereinafter defined), that number
                  of Employment Agreement Options which are vested and
                  exercisable on the date of termination of the employment of
                  the Employee; for purposes hereof, "Disability Exercise Term"
                  shall mean the Disability Salary Continuation Period (as
                  defined in Section 6.2 of this Agreement) plus two years, (b)
                  in the event of termination of the employment of the Employee
                  with the Company is terminated by the Company or the Employee
                  following the Term as a result of a Disability (as defined in
                  Section 6.2 below as if such Section were in effect at the
                  time), the Employee shall be entitled to exercise, for a
                  period of two years from the date of such termination, that
                  number of Employment Agreement Options which are vested and
                  exercisable on the date of termination of the employment of
                  the Employee or (c) in the event of termination of the
                  consultancy of the Employee with the Company pursuant to
                  Section 7 as a result of a Disability, the Employee shall be
                  entitled to exercise, for a period of two years from the date
                  of such termination, that number of Employment Agreement
                  Options which are vested and exercisable on the date of
                  termination of the consultancy.

                                    (iii) (a) In the event of termination of the
                  employment of the Employee by the Company for Due Cause
                  pursuant to Section 6.3 of this Agreement, (b) in the event of
                  termination of the employment of the Employee by the Company
                  following the Term for Due Cause (as defined in Section 6.3
                  below as if such Section were in effect at the time),

<PAGE>

                                                                               4

                  or (c) in the event that the agreements and obligations of the
                  Company set forth in Section 7 are terminated by the Company
                  during the Consulting Term for Due Cause pursuant to Section
                  7.4 hereof, then in any case, no Employment Agreement Options
                  shall be exercisable.

                                  (iv)    (a) In the event of termination of the
                  employment of the Employee by the Company pursuant to Section
                  6.4 of this Agreement, the Employee shall be entitled to
                  exercise, for the Exercise Term (as hereinafter defined), that
                  number of Employment Agreement Options which are vested and
                  exercisable on the date of termination of the employment of
                  the Employee; for purposes hereof, "Exercise Term" shall mean
                  the Salary Continuation Period (as defined in Section 6.4 of
                  this Agreement) plus two years or (b) in the event of
                  termination of the employment of the Employee by the Company
                  following the Term for whatever reason it deems appropriate
                  (other than under the circumstances contemplated by clauses
                  (c)(ii)(b) or (c)(iii)(b) above) or without reason, the
                  Employee shall be entitled to exercise, for a period of two
                  years from the date of such termination, that number of
                  Employment Agreement Options which are vested and exercisable
                  on the date of termination of the employment of the Employee.

                                  (v)     (a) In the event of termination of the
                  employment of the Employee with the Company by the Employee
                  during the Term for any reason other than pursuant to Sections
                  6.1, 6.2 or 6.6 of this Agreement, no Employment Agreement
                  Options shall be exercisable, (b) in the event of termination
                  of the employment of the Employee with the Company by the
                  Employee following the Term for any reason (other than under
                  the circumstances contemplated by clauses (c)(i)(b) or
                  (c)(ii)(b) above), or (c) in the event the Employee terminates
                  the consulting agreements under Section 7 hereof during the
                  Consulting Term, in any case, no Employment Agreement Options
                  shall be exercisable.

                                  (vi)    Except as otherwise provided in
                  clauses (i), (ii), (iii) and (v) above, in the event that
                  Section 7 hereof shall become applicable, the Employee shall
                  be entitled to exercise, for a period of two years from the
                  date of commencement of the Consulting Term, that number of
                  Employment Agreement Options which are vested and exercisable
                  on the date of commencement of the Consulting Term.

                                  (d)     Adjustments. In the event of any
                                          -----------
                  dividend or other distribution (whether in the form of cash,
                  Common Stock, other securities or other property),
                  recapitalization, stock split, reverse stock split,
                  reorganization, merger, consolidation, split-up, spin-off,
                  combination, or repurchase or exchange of Common Stock or
                  other securities of the Parent, the Board of Directors shall,
                  in such manner as it may deem equitable, adjust the number of
                  shares of Common Stock (or other

<PAGE>

                                                                               5

                  securities or property) subject to the Employment Agreement
                  Options or the exercise price with respect to any Employment
                  Agreement Options.

                           3.4    Limitation on Sales of Common Stock. The
                                  -----------------------------------
                  Employee agrees, for the benefit of the Company and the
                  Parent, that during the period of his employment with the
                  Company and at all times thereafter for so long as he shall
                  beneficially own in the aggregate more than 100,000 shares of
                  Common Stock or Employment Agreement Options and whether or
                  not he is at the time deemed to be an "affiliate" (as such
                  term is used in Rule 144 under the Securities Act of 1933, as
                  amended) of the Company or the Parent, he shall not sell
                  shares of Common Stock in excess of the volume limitation
                  which from time to time would be applicable to him under Rule
                  144(e)(1) determined as if he were an affiliate."

                  C.       Sections 6.1, 6.2 and 6.4 of the Employment Agreement
are hereby amended and restated to read in their entirety as follows:

                           "6.1   Death. In the event of the death of the
                                  -----
                  Employee during the Term, the Company shall pay to the estate
                  or other legal representative of the Employee the salary
                  provided for in Section 3.1 accrued to the date of the
                  Employee's death and not theretofore paid to the Employee. In
                  addition, under such circumstances, the Company shall pay to
                  the estate or other legal representative of the Employee an
                  amount equal to (a) the bonus payable to the Employee pursuant
                  to Section 3.2 of this Agreement, multiplied by (b) a
                  fraction, the numerator of which is the number of days elapsed
                  during the Company's fiscal year to the date of the Employee's
                  death and the denominator of which is 365. Rights and benefits
                  of the estate or other legal representative of the Employee
                  under the benefit plans and programs of the Company shall be
                  determined in accordance with the provisions of such plans and
                  programs. Neither the estate or other legal representative of
                  the Employee nor the Company shall have any further rights or
                  obligations under this Agreement, except as provided in
                  Section 3.3 of this Agreement and in or pursuant to any other
                  benefit or option plan of the Company or the Parent in which
                  the Employee participates.

                           6.2    Disability. If during the Term the Employee
                                  ----------
                  shall become incapacitated by reason of physical or mental
                  disability and shall be unable to perform his normal duties
                  hereunder for a cumulative period of six (6) months in any
                  period of twelve (12) consecutive months (a "Disability"), the
                  employment of the Employee hereunder may be terminated by the
                  Company or the Employee upon notice to the other. In the event
                  of such termination, subject to Section 5.4 of this Agreement,
                  the Company shall continue to pay to the Employee the salary
                  provided for in Section 3.1 for the remainder of the Term (the
                  period of time during which the Company shall be required to
                  continue to pay such salary, the "Disability Salary
                  Continuation Period"). In addition, under such circumstances,
                  the Company shall pay to the Employee an amount equal

<PAGE>

                                                                               6

                  to (a) the bonus payable to the Employee pursuant to Section
                  3.2 of this Agreement, multiplied by (b) a fraction, the
                  numerator of which is the number of days elapsed during the
                  Company's fiscal year to the date on which the Employee's
                  Disability occurs and the denominator of which is 365. Rights
                  and benefits of the Employee under the benefit plans and
                  programs of the Company s hall be determined in accordance
                  with the provisions of such plans and programs. Neither the
                  Employee nor the Company shall have any further rights or
                  obligations under this Agreement, except as provided in
                  Section 3.3, 8, 9, 10 and 11 hereof and in or pursuant to any
                  other benefit or option plan of the Company or the Parent in
                  which the Employee participates.

                           6.4    Other Termination by the Company. The Company
                                  --------------------------------
                  may terminate the Employee's employment at any time during the
                  Term for whatever reason it deems appropriate or without
                  reason; provided, however, that in the event that such
                  termination is not pursuant to Section 6.1, 6.2, 6.3, or 6.6,
                  the Company shall continue to pay to the Employee the salary
                  provided for in Section 3.1 for the remainder of the Term (the
                  period of time during which the Company shall be required to
                  continue to pay such salary, the "Salary Continuation
                  Period"). In addition, under such circumstances, the Company
                  shall pay to the Employee the bonus otherwise payable to the
                  Employee pursuant to Section 3.2 of this Agreement for the
                  fiscal year of the Company in which such termination occurs.
                  Rights and benefits of the Employee under the benefit plans
                  and programs of the Company shall be determined in accordance
                  with the provisions of such plans and programs. Neither the
                  Employee nor the Company shall have any further rights or
                  obligations under this Agreement, except as provided in
                  Sections 3.3, 7, 8, 9, 10 and 11 hereof and in or pursuant to
                  any other benefit or option plan of the Company or the Parent
                  in which the Employee participates."

                           D.     Section 6 of the Employment Agreement is
hereby amended by adding the following new Sections 6.5, 6.6 and 6.7 at the end
thereof:

                           "6.5   Constructive Termination Following a Change in
                                  ----------------------------------------------
                  Control. Anything herein to the contrary notwithstanding, if,
                  -------
                  during the period equal to the lesser of (i) the then
                  remaining Term hereunder following a Change in Control and
                  (ii) the one (1) year period following a Change in Control,
                  either the Parent or the Company:

                                  (a)    demotes the Employee to a lesser
                  position than provided in Section 2, in the case of the
                  Company, or to a lesser position than Chairman of the Board,
                  Chief Executive Officer, President and Chief Operating Officer
                  of the Parent, in the case of the Parent;

                                  (b)    causes a material change in the nature
                  or scope of the authorities, powers, functions, duties, or
                  responsibilities attached to the

<PAGE>

                                                                               7

                  Employee's positions as described in Section 2, in the case of
                  the Company, or a material change in the nature or scope of
                  the authorities, powers, functions, duties or responsibilities
                  attached to the Employee's positions with the Parent, in each
                  case as in effect on November 4, 2000;

                                    (c)     decreases the Employee's salary or
                  bonus below the levels provided for in Section 3; or

                                    (d)     fails to obtain the agreement of a
                  successor company to assume the obligations of the Company
                  under this Agreement as required by Section 12;

                  then such action (or inaction) by the Company, unless
                  consented to in writing by the Employee, shall constitute a
                  termination of the Employee's employment by the Company
                  pursuant to Section 6.6 (a "Constructive Termination of
                  Employment"). Notwithstanding the preceding sentence, within
                  thirty (30) days after learning of an action (or inaction)
                  constituting the basis for a Constructive Termination of
                  Employment, the Employee may (unless he gives written consent
                  thereto) advise the Company in writing that such action (or
                  inaction) constitutes a Constructive Termination of
                  Employment, in which event the Company shall have thirty (30)
                  days from the date of such written advice in which to correct
                  such action (or inaction) and if the Company does so correct
                  such action (or inaction) the Employee shall not be entitled
                  to terminate his employment under this Section as a result of
                  such action (or inaction).

                           6.6      Termination of Employment Following a Change
                                    --------------------------------------------
                   in Control. In the event that (a) the Company terminates the
                   ----------
                   Employee's employment during the period equal to the lesser
                   of (i) the then remaining Term hereunder following a Change
                   in Control and (ii) the one (1) year period following a
                   Change in Control (other than pursuant to Section 6.3) or (b)
                   a Constructive Termination of Employment occurs, the Company
                   shall pay to the Employee within ten (10) business days of
                   such termination an amount equal to the greater of (A) the
                   aggregate salary provided for in Section 3.1 during the
                   remainder of the Term or (B) one half (1/2) of the sum of (1)
                   the aggregate salary paid to the Employee during the two year
                   period ending on the date of the Change in Control and (2)
                   the aggregate bonuses paid to the Employee for the two fiscal
                   years of the Company ended prior to the date of the Change in
                   Control. In either case, notwithstanding anything to the
                   contrary contained herein, the Employee shall not be required
                   to seek subsequent employment or to offset any amounts earned
                   from any subsequent employment (whether as an employee, a
                   consultant or otherwise) against such amounts payable by the
                   Company. Rights and benefits of the Employee under the
                   benefit plans and programs of the Company shall be determined
                   in accordance with the provisions of such plans and programs.
                   Neither the Employee nor the Company shall have any further
                   rights or obligations under this

<PAGE>

                                                                               8

                   Agreement, except as provided in Sections 3.3, 8, 9 and 11
                   hereof and in or pursuant to any other benefit or option plan
                   of the Company or the Parent in which the Employee
                   participates. For purposes of this Agreement, a "Change in
                   Control" shall be deemed to have occurred if:

                                    (a)    a "person" (meaning an individual, a
                   partnership, or other group or association as defined in
                   Sections 13(d) and 14(d) of the Securities Exchange Act of
                   1934, other than the Employee or a group including the
                   Employee), acquires fifty percent (50%) or more of the
                   combined voting power of the outstanding securities of the
                   Parent having a right to vote in elections of directors; or

                                    (b)    Continuing Directors shall for any
                   reason cease to constitute a majority of the Board of
                   Directors of the Parent; or

                                    (c)    the business of the Parent is
                   disposed of in a disposition of all or substantially all of
                   its assets (including stock of subsidiary(s)).

                                    For purposes of this Agreement, the term
                  "Continuing Director" shall mean a member of the Board of
                  Directors of the Parent who either was a member of such Board
                  of Directors on the date hereof or who subsequently became a
                  member of such Board of Directors and whose election, or
                  nomination for election, was approved by a vote of at least
                  two-thirds of the Continuing Directors then in office.

                           6.7      Excise Tax Gross Up. Notwithstanding any
                                    -------------------
                  provision in this Agreement to the contrary, if any payment to
                  or for the benefit of the Employee under this Agreement,
                  either alone or together with other payments to or for the
                  benefit of the Employee, is subject to the excise tax imposed
                  by Section 4999 of the Internal Revenue Code of 1986, as
                  amended (the "Code", such payments referred to hereinafter as
                  "Change of Control Payments" and such tax referred to
                  hereinafter as the "Excise Tax"), the Company shall pay to the
                  Employee such additional amount (the "Gross-up Payment") as
                  may be necessary to place the Employee in the same after-tax
                  position as if no portion of the Change of Control Payments
                  and any amounts paid to the Employee pursuant to this Section
                  6.7 had been subject to the Excise Tax. For purposes of
                  determining the amount of the Gross-up Payment, the Employee
                  shall be deemed (i) to pay federal income tax at the highest
                  marginal rate of federal income taxation for the calendar year
                  in which the Gross-up Payment is to be made and (ii) to pay
                  any applicable state and local income taxes at the highest
                  marginal rate of taxation for the calendar year in which the
                  Gross-up Payment is to be made, net of the maximum reduction
                  in federal income taxes which could be obtained from deduction
                  of such state and local taxes if paid in such year. The amount
                  of the Gross-up Payment shall be determined by the
                  Compensation Committee of the Board of Directors acting
                  reasonably,

<PAGE>

                                                                               9

                  promptly and in good faith and shall be paid in cash within
                  ten (10) business days after the determination of such amount,
                  but in any event not later than the business day prior to the
                  date on which the Employee would otherwise pay his federal
                  income taxes for the applicable year in which the Excise Tax
                  is imposed."

                  E.     Section 7.1 of the Employment Agreement is hereby
amended by deleting the last sentence thereof and inserting the following
sentence in its place:

                  "Subject to Section 7.2 hereof, during the Consulting Term, in
                  consideration of the performance by the Employee of services
                  set forth in this Section 7.1, the Company shall pay the
                  Employee, and the Employee shall accept, a consulting fee (the
                  "Fee") (payable on the 15th day of each month for the month in
                  which the payment occurs) in an amount per month equal to the
                  quotient obtained by dividing (x) the sum of (i) the
                  Employee's annual salary under Section 3.1 for the fiscal year
                  immediately preceding the commencement of the Consulting Term
                  (the "Reference Year") and (ii) the bonus paid to the Employee
                  for the Reference Year under Section 3.2 by (y) twelve (12)."

                  F.     The references in Sections 7.2 and 7.4 hereof to
"Section 3.4 of the 1997 Agreement" are hereby deleted and replaced with
references to "Sections 3.3 and 3.4 hereof."

                  G.     The Employment Agreement, as hereby amended, continues
in full force and effect and is hereby ratified and confirmed in all respects.

                  H.     This Amendment No. 1 may be executed in counterparts,
each of which shall be deemed an original, but all of which taken together shall
constitute one and the same instrument.

                         *                     *                       *

<PAGE>

                                                                              10

               IN WITNESS WHEREOF, the parties hereto have executed this
Amendment No. 1 as of the date first above written.

                                            NORTON MCNAUGHTON OF SQUIRE, INC.

                                            By:  /s/ Amanda J. Bokman
                                                --------------------------------
                                                Name:   Amanda J. Bokman
                                                Title:  Vice President

                                                EMPLOYEE:

                                                 /s/ Peter Boneparth
                                                --------------------------------
                                                 Peter Boneparth

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