Charming Shoppes, Inc. Amendment 2009-1to the Severance Agreement
EXHIBIT
10.1
Charming
Shoppes, Inc.
Amendment
2009-1to the Severance Agreement
This
AMENDMENT is dated as of April 1, 2009, between
Charming Shoppes, Inc. (the “Company”) and __________ (the
“Executive”).
WHEREAS, the Company and the
Executive have entered into a Severance Agreement dated as of February 1, 2008
(the “Severance Agreement”), and the parties now wish to amend the Severance
Agreement.
WHEREAS, Section 11.5 of the
Severance Agreement provides that the Severance Agreement may be modified upon
approval by the Compensation Committee of the Board of Directors of the Company
(the “Committee”) and agreement in writing by the Executive and an authorized
officer of the Company.
WHEREAS, on February 10, 2009,
the Committee approved the amendment to the Severance Agreement set forth
below.
NOW, THEREFORE, for good and
valuable consideration, receipt of which is hereby acknowledged, the parties
agree that the Severance Agreement is hereby amended as follows:
|
1.
|
Article
5 is hereby deleted in its entirety and replaced with the
following:
|
“Article 5. Application of
280G
5.1 Effect of Section 280G on
Payments. In the event a Change in Control occurs and the
Executive becomes entitled to any benefits or payments in the nature of
compensation (within the meaning of Section 280G(b)(2) of the Code) under this
Agreement, or any other plan, arrangement, or agreement with the Company (the
“Payments”), and such benefits or payments will be subject to the tax (the
“Excise Tax”) imposed by Section 4999 of the Code (or any similar tax that may
hereafter be imposed), the aggregate present value of the Payments under this
Agreement shall be reduced (but not below zero) to the Reduced Amount (as
defined below), if reducing the Payments under this Agreement will provide the
Executive with a greater net after-tax amount than would be the case if no
reduction was made. The “Reduced Amount” shall be an amount expressed
in present value which maximizes the aggregate present value of Payments without
causing any Payment under this Agreement to be subject to the Excise Tax,
determined in accordance with Section 280G(d)(4) of the Code. The
Company shall reduce the Payments under this Agreement by first reducing
Payments that are not payable in cash and then by reducing cash
Payments. Only amounts payable under this Agreement shall be reduced
pursuant to this Section 5.1.
5.2 Computation. In
determining the potential impact of the Excise Tax, the Company may rely on any
advice it deems appropriate, including, but not limited to, the counsel of its
independent accounting firm. For purposes of determining whether any
of the Payments will be subject to the Excise Tax and the amount of such Excise
Tax, the Company may take into account any relevant guidance under the Code and
the regulations promugalted thereunder, including, but not limited to, the
following:
|
|
(a)
|
The
amount of the Payments which shall be treated as subject to the Excise Tax
shall be equal to the amount of excess parachute payments within the
meaning of Section 280G(b)(1) of the Code, as determined by the Company’s
independent accounting firm;
|
|
|
(b)
|
The
value of any non-cash benefits or any deferred or accumulated payment or
benefit shall be determined by the Company's independent accounting firm
in accordance with the principles of Sections 280G(d)(3) and (4) of the
Code; and
|
|
|
(c)
|
The
value of the non-competition covenants contained in this Agreement shall
be taken into account to reduce “parachute payments” to the maximum extent
allowable under Section 280G of the
Code.
|
For
purposes of the determinations under this Article 5, the Executive shall be
deemed to pay federal income taxes at the highest marginal rate of federal
income taxation in the calendar year in which the applicable payment is to be
made, and state and local income taxes at the highest marginal rate of taxation
in the state and locality of the Executive’s residence, net of the maximum
reduction in federal income taxes which could be obtained from deduction of such
state and local taxes.”
|
2.
|
The
following Section 10.5 is hereby
added:
|
10.5 Non-Disparagement. During
or after the term of his or her employment by the Company, (a) the Executive
will not make any negative or disparaging statements about the professional or
personal reputation of the Company, its officers, directors, or employees,
except if testifying truthfully under oath pursuant to subpoena or other legal
process, and (b) the Company will not make any negative or disparaging
statements about the professional or personal reputation of the Executive except
if testifying truthfully under oath pursuant to subpoena or other legal
process.
|
|
3.
|
This
amendment shall be effective as of April 1,
2009.
|
2
|
4.
|
In
all respects not amended, the Severance Agreement is hereby ratified and
confirmed.
|
|
CHARMING
SHOPPES, INC.
|
|
By:______________________________
|
|
Xxxxx
Xxxxxxx
|
|
Chief
Executive Officer
|
|
EXECUTIVE
|
|
__________________________________
|
3
