CHARMING SHOPPES, INC. STOCK APPRECIATION RIGHTS AGREEMENT
EXHIBIT
10.10
CHARMING
SHOPPES, INC.
STOCK
APPRECIATION RIGHTS AGREEMENT
Agreement
dated as of July 16, 2008 (the “Grant Date”) between CHARMING SHOPPES, INC. (the
“Company”) and Xxxx Xxxxxxxx (the “Rosskamm”).
1. Grant of SAR; Consideration;
Rosskamm Acknowledgments.
The
Company hereby confirms the grant, under the Company’s 2004 Stock Award and
Incentive Plan (the “Plan”), to Rosskamm on the Grant Date of a stock
appreciation right (the “SAR”) with respect to 41,152 shares of the Company’s
common stock, par value $.10 per share (the “Shares”). The SAR
represents the right to receive, at exercise, a number of Shares with a then
Fair Market Value equal to the appreciation in value of the Shares over the base
amount. The base amount is $4.60 per share, which is the fair market
value of a Share on the Grant Date (the “Base Amount”).
Rosskamm
shall be required to pay no consideration for the grant of the SAR except for
his agreement to provide services to the Company prior to exercise and his
agreement to abide by the terms set forth in the Plan, this Stock Appreciation
Rights Agreement (the “Agreement”), and any Rules and Regulations under the
Plan. Rosskamm acknowledges and agrees that (i) the SAR is
nontransferable, except as provided in Sections 8 and 9 hereof and in the Plan,
(ii) the SAR is subject to forfeiture in certain circumstances, as specified in
Section 7 hereof, and (iii) sales of Shares will be subject to the Company’s
policies regulating trading by employees, including any applicable “blackout” or
other designated periods in which sales of Shares are not
permitted.
2. Incorporation of Plan by
Reference.
The SAR has been granted to Rosskamm under the Plan. All of the
terms, conditions and other provisions of the Plan are hereby incorporated by
reference into this Agreement. Capitalized terms used in this
Agreement but not defined herein shall have the same meanings as in the
Plan. If there is any conflict between the provisions of this
Agreement and the provisions of the Plan, the provisions of the Plan shall
govern. Rosskamm hereby accepts the grant of the SAR, acknowledges
receipt of the Plan, and agrees to be bound by all the terms and provisions
hereof and thereof (as presently in effect or hereafter amended), and by all
decisions and determinations of the Board or Committee under the
Plan.
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3. Date When
Exercisable.
(a) This SAR
may be exercised only if and to the extent that it has become exercisable as
specified in this Agreement. Subject to the terms and conditions of
this Agreement and the approval of the SAR by the Committee, this SAR shall vest
and become exercisable in full on the earlier to occur of the
following: (i) on the date that the first permanent Chief Executive
Officer immedietely succeeding Xxxxxx X. Xxxx, the Company’s former Chief
Executive Officer, commences employment, (ii) upon a Change of Control as
provided in Section 6, (iii) upon Rosskamm’s death, or (iv) upon termination of
Rosskamm’s service as a Director of the Company due to disability.
(b) The SAR
shall expire at 5:00 p.m. on the day before the seventh anniversary of the Grant
Date, unless the SAR terminates on an earlier date as provided
herein.
4. Method of
Exercise.
(a) The SAR
may be exercised, to the extent the SAR is then vested and exercisable, by
delivery to and receipt by the Secretary of the Company at 0000 Xxxxx Xxxx,
Xxxxxxxx, Xxxxxxxxxxxx 00000, of a written notice, signed by Rosskamm,
specifying the portion of the vested SAR that Rosskamm wishes to
exercise. Simultaneous with or as soon as practicable after the
receipt of such notice, the Company shall deliver to Rosskamm a number of whole
Shares that will be determined by dividing the Stock Appreciation by the Fair
Market Value of a Share on the date of exercise, less applicable tax
withholding. “Stock Appreciation” shall mean the amount that results
from multiplying (i) the number of Shares as to which the SAR is exercised by
(ii) the amount by which the Fair Market Value of a Share on the date of
exercise exceeds the Base Amount. Only whole Shares will be delivered
pursuant to the exercise of the SAR.
(b) Upon
exercise of the SAR, the Company will deliver a stock certificate for the Shares
to be delivered, with any requisite legend affixed. Such exercise may
include instructions to the Company to deliver Shares due upon exercise of the
SAR to any registered broker or dealer designated by the Committee in lieu of
delivery to Rosskamm. Such instructions must designate the account
into which the Shares are to be deposited. The method of exercise and
related matters governed by this Section 4 shall be subject to Rules and
Regulations adopted by the Committee and in effect at the time Rosskamm’s notice
of exercise is received by the Company; such Rules and Regulations may vary from
or limit the procedures specified in this Section 4, and may specify other
methods of exercise. Upon exercise of any portion of the SAR, the
exercised portion of the SAR shall terminate and cease to be
outstanding.
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(c) If, on
the date on which the vested SAR will terminate according to its terms, the
Executive has not given the Company written notice of exercise, and if the Stock
Appreciation amount is a positive number, then the outstanding vested portion of
the SAR shall be automatically exercised and taxes shall be withheld as
described in Section 5 below.
5. Tax
Withholding.
Unless
otherwise determined by the Company upon notice to Rosskamm, the Company will
withhold from the Shares to be delivered upon the exercise of the SAR a
sufficient number of such Shares to satisfy the minimum federal, state and local
tax withholding obligations relating to the SAR exercise. The Shares
withheld will be valued at the Fair Market Value, determined in such manner as
may be specified under the Plan.
6. Change of Control
Provisions.
(a) Acceleration of
Exercisability. In the event of a Change of Control at a time
when Rosskamm is employed by the Company or any of its subsidiaries or is
serving as a Director of the Company, this SAR shall become immediately and
fully vested and exercisable immediately prior to the occurrence of such Change
of Control.
(b) Exercise after a Change in
Control; Adjustments. In the event of Rosskamm’s termination
of employment after a Change in Control, or in the event that Rosskamm ceases to
be a Director of the Company after a Change of Control, the vested SAR, to the
extent then outstanding, shall be exercisable for a one year period from the
later of (i) the date of such termination, or (ii) the date of such cessation,
as the case may be. In the event of a Change in Control, the Committee may make
such adjustments and take such other actions with respect to outstanding SARs as
the Committee deems appropriate pursuant to Section 10(c) of the
Plan.
(c) Definitions of Certain
Terms. For purposes of this Agreement, the following
definitions shall apply:
(i) “Beneficial Owner,”
“Beneficially Owns,” and “Beneficial Ownership” shall have the meanings ascribed
to such terms for purposes of Section 13(d) of the Exchange Act and the rules
thereunder, except that, for purposes of this Section 6, “Beneficial Ownership”
(and the related terms) shall include Voting Securities that a Person has the
right to acquire pursuant to any agreement, or upon exercise of conversion
rights, warrants, options or otherwise, regardless of whether any such right is
exercisable within 60 days of the date as of which Beneficial Ownership is to be
determined.
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(ii) “Change of Control” means and
shall be deemed to have occurred if
(1) any
Person, other than the Company or a Related Party, acquires directly or
indirectly the Beneficial Ownership of any Voting Security of the Company and
immediately after such acquisition such Person has, directly or indirectly, the
Beneficial Ownership of Voting Securities representing 20 percent or more of the
total voting power of all the then-outstanding Voting Securities;
or
(2) those
individuals who as of the Grant Date constitute the Board or who thereafter are
elected to the Board and whose election, or nomination for election, to the
Board was approved by a vote of at least two-thirds (2/3) of the directors then
still in office who either were directors as of the Grant Date or whose election
or nomination for election was previously so approved, cease for any reason to
constitute a majority of the members of the Board; or
(3) there is
consummated a merger, consolidation, recapitalization or reorganization of the
Company, a reverse stock split of outstanding Voting Securities, or an
acquisition of securities or assets by the Company (a “Transaction”), other than
a Transaction which would result in the holders of Voting Securities having at
least 80 percent of the total voting power represented by the Voting Securities
outstanding immediately prior thereto continuing to hold Voting Securities or
voting securities of the surviving entity having at least 60 percent of the
total voting power represented by the Voting Securities or the voting securities
of such surviving entity outstanding immediately after such Transaction and in
or as a result of which the voting rights of each Voting Security relative to
the voting rights of all other Voting Securities are not altered;
or
(4) there is
implemented or consummated a plan of complete liquidation of the Company or sale
or disposition by the Company of all or substantially all of the Company’s
assets other than any such transaction which would result in Related Parties
owning or acquiring more than 50 percent of the assets owned by the Company
immediately prior to the transaction.
(iii) “Person” shall have the
meaning ascribed for purposes of Section 13(d) of the Exchange Act and the rules
thereunder.
(iv) “Related Party” means (A) a
majority-owned subsidiary of the Company; or (B) a trustee or other fiduciary
holding securities under an employee benefit plan of the Company or any
majority-owned subsidiary of the Company; or (C) a corporation owned directly or
indirectly by the shareholders of the Company in substantially the same
proportion as their ownership of Voting Securities. Additionally, a
Person would be considered a Related Party, if, prior to any acquisition of a
Voting Security which would result in any Person Beneficially Owning more than
ten percent of any outstanding class of Voting Security and which would be
required to be reported on a Schedule 13D or an amendment thereto, the Board
approved the initial transaction giving rise to an increase in Beneficial
Ownership in excess of ten percent and any subsequent transaction giving rise to
any further increase in Beneficial Ownership; provided, however, that such
Person has not, prior to obtaining Board approval of any such
transaction,
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publicly
announced an intention to take actions which, if consummated or successful (at a
time such Person has not been deemed a “Related Party”), would constitute a
Change of Control.
(v) “Voting Securities” means any
securities of the Company which carry the right to vote generally in the
election of directors.
7. Termination of Employment;
Cessation of Service as a Director
This SAR
shall terminate and no longer be exercisable at the earlier of (i) the scheduled
expiration time of the SAR, as set forth in Section 3(b) above, or (ii) the
expiration of a one year period after Rosskamm ceases to be both a Director and
employee of the Company whether by reason of voluntary termination, involuntary
termination (other than for cause) or removal (other than for cause), if the SAR
granted to him will have already vested and become exercisable pursuant to
Section 3(a)(i) hereof at the time of such cessation, or the date of such
cessation if the SAR granted to him has not already vested and become
exercisable at the time of such cessation, or (iii) the expiration of a one year
period after Xx. Xxxxxxxx ceases to be both a Director and employee of the
Company by reason of death or disability.
8. Limits on Transfer of SARs;
Beneficiaries.
No right
or interest of a participant in this SAR shall be pledged, encumbered or
hypothecated to or in favor of any third party or shall be subject to any lien,
obligation or liability of Rosskamm to any third party. This SAR
shall not be transferable to any third party by Rosskamm otherwise than by will
or the laws of descent and distribution, and this SAR shall be exercisable,
during the lifetime of Rosskamm, only by Rosskamm; provided, however, that
Rosskamm will be entitled to designate a beneficiary or beneficiaries to
exercise his rights under this SAR upon the death of Rosskamm, in the manner and
to the extent permitted by the Committee under Rules and Regulations adopted by
the Committee under the Plan, and the Committee may permit transfers otherwise
to the extent permitted under the Plan.
9. Investment
Representation.
Unless,
at the time of any exercise of this SAR, the issuance and delivery of Shares
hereunder to Rosskamm is registered under a then-effective registration
statement under the Securities Act of 1933, as amended (the “Securities Act”),
and complies with all applicable registration requirements under state
securities laws, Rosskamm shall provide to the Company, as a condition to the
valid exercise of this SAR and the delivery of any certificates representing
Shares, appropriate evidence, satisfactory in form and substance to the Company,
that he is acquiring the Shares for investment and not with a view to the
distribution of the Shares or any interest in the Shares, and a representation
to the effect that Rosskamm shall make no sale or other disposition of the
Shares unless (i) the Company shall have received an opinion of counsel
satisfactory to it in form and substance that such sale or other disposition may
be made without registration under the then-applicable provisions of the
Securities Act, the related rules and
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regulations
of the Securities and Exchange Commission, and applicable state securities laws
and regulations, or (ii) the sale or other disposition of the Shares shall be
registered under a currently effective registration statement under the
Securities Act and complies with all applicable registration requirements under
state securities laws. The certificates representing the Shares may
bear an appropriate legend giving notice of the foregoing restriction on
transfer of the Shares, and any other restrictive legend deemed necessary or
appropriate by the Committee.
10. Miscellaneous.
This
Agreement shall be binding upon the heirs, executors, administrators and
successors of the parties. This Agreement constitutes the entire
agreement between the parties with respect to the SAR, and supersedes any prior
agreements or documents with respect to the SAR. No amendment,
alteration, suspension, discontinuation or termination of this Agreement which
may impose any additional obligation upon the Company or impair the rights of
Rosskamm with respect to the SAR shall be valid unless in each instance such
amendment, alteration, suspension, discontinuation or termination is expressed
in a written instrument duly executed in the name and on behalf of the Company
and by Rosskamm.
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CHARMING
SHOPPES, INC.
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BY:________________________________
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Xxxxx
X. Xxxxx, Secretary
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EMPLOYEE:
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____________________________________
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Xxxx
Xxxxxxxx
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