CATO CORP — Director's Dealing 2004

Oct 26, 2004

SEC Form 4 — Statement of Changes in Beneficial Ownership

Issuer: CATO CORP (CTR)
CIK: 0000018255
Period of Report: 2002-01-08

Reporting Person: CATO WAYLAND H JR (See Remarks below.)

Derivative Transactions

Date	Security	Exercise Price	Code	Shares	A/D	Expiration	Underlying	Ownership
2002-01-08	STARS	$	J	1	Acquired		Class A Common Stock (200000)	Indirect

Footnotes

F1: STARS is an acronym for a secured forward sale transaction designated as a Special Term Appreciation Retention Sale.

F2: On 1/8/2002, the Cato Family Investments Limited Partnership, pursuant to STARS agreements with a bank counterparty, agreed to sell 200,000 shares of class A common stock of The Cato Corporation (the "Shares") at approximately 76% of a floor price of $18.1968 ($2,754,996) which the Partnership received on 1/11/2002. The Partnership agreed to deliver the Shares in increments to the counterparty over ten business days in Feb. 2005 (the "Settlement Dates"). The Partnership pledged the Shares to secure its obligations to the counterparty. On the Settlement Dates, the Partnership will have the option of (a) paying cash to the counterparty and reclaiming the pledged Shares, (b) delivering all the pledged Shares to the counterparty or (c) if the market price of the Shares exceeds the floor price, settling with most of the pledged Shares and reclaiming some of the pledged Shares.