CHARMING SHOPPES, INC. RESTRICTED STOCK UNITS AGREEMENT
EXHIBIT
99.2
CHARMING
SHOPPES, INC.
RESTRICTED
STOCK UNITS AGREEMENT
Agreement
(the "Agreement"), dated as of February 2, 2006 (the "Grant Date") between
CHARMING SHOPPES, INC. (the "Company") and XXXXXX X. XXXX (the
"Employee").
1. Grant
of Restricted Stock and Restricted Stock Units; Consideration; Employee
Acknowledgments.
The
Company hereby confirms the grant, under the Company’s 2004 Stock Award and
Incentive Plan (the "Plan"), of _______ Restricted Stock Units pursuant to
Section 6(e) of the Plan. The Restricted Stock Units are subject to the terms
and conditions of the Plan, the Charming Shoppes Variable Deferred Compensation
Plan (the “Deferred Compensation Plan”) and this Agreement. Employee is required
to pay no cash consideration for the grant of the Restricted Stock Units, but
performance of services prior to the expiration of the risk of forfeiture
relating to the Restricted Stock Units and otherwise during his or her
employment, and his or her agreement to abide by the terms set forth in the
Plan, this Agreement, and any Rules and Regulations under the Plan, shall be
deemed to be consideration for this grant of Restricted Stock Units. Employee
acknowledges and agrees that (i) the Restricted Stock Units are nontransferable
as provided in Section 3(e) hereof and Sections 6(e) and 10(b) of the Plan,
(ii)
the Restricted Stock Units are subject to forfeiture in the event of Employee's
termination of employment in certain circum-stances, as specified in and under
Section 3 hereof, and (iii) sales of shares of the Company's common stock,
par
value $0.10 per share ("Shares"), following the lapse of restrictions and
settlement of the Restricted Stock Units 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 and Deferred Compensation Plan by Reference.
The
Restricted Stock Units have been granted to Employee under the Plan, a copy
of
which previously has been provided to Employee. All of the terms, conditions,
and other provisions of the Plan are hereby incorpor-ated 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. In addition, the terms of the deferral of settlement
of
the Restricted Stock Units are governed by the Deferred Compensation Plan,
a
copy of which previously has been provided to Employee, which terms are also
incorporated herein by reference. Employee hereby accepts the grant of
Restricted Stock Units, acknowledges receipt of a copy of the Plan and the
Deferred Compensation 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
and
the Deferred Compensation Plan, or any person or committee designated by the
Committee to administer the Plan (the "Administrator").
______________________________________________________________________________
DATE
OF GRANT OF RESTRICTED STOCK UNITS: February
2, 2006
3. Restrictions
on Restricted Stock Units.
(a) Nature
of Restricted Stock Units; Restricted Period and Deferral of
Settlement.
Each
Restricted Stock Unit represents the right to receive one Share, which will
be
issued and delivered, after the lapse of the "Restricted Period" specified
in
this Section 3 to the extent the Restricted Stock Units have not been forfeited,
at the settlement date applicable under Section 5. Restricted Stock Units are
subject to a risk of forfeiture during such Restricted Period and are subject
to
restrictions on transfer and other conditions during the Restricted Period
and
the additional deferral period, if any. Shares of Common Stock will be issued
and delivered in settlement of Restricted Stock Units at the settlement date
applicable under Section 5. This Award differs from awards of "restricted
stock," in that such awards involve issuance of Shares at or shortly after
grant, with such shares subject to forfeiture (i.e., such shares must be
returned to the Company if forfeited) during any restricted period. With respect
to Restricted Stock Units, Employee has no voting rights or rights to actual
dividends prior to the end of the Restricted Period, but Employee is entitled
to
dividend equivalents in accordance with Section 4.
(b) Termination
of Employment.
(i) Forfeiture.
Unless
otherwise determined by the Committee or as provided by the Employment Agreement
described below, if Employee’s employment terminates and she thereafter is not
an employee of the Company or any of its subsidiaries (a “Termination”), and
such Termination is for any reason other than due to death, Disability,
termination by Employee for Good Reason, or termination by the Company for
reasons other than Cause, the Restricted Stock Units as to which the Restricted
Period has not lapsed at or before such Termination shall be forfeited at the
time of such Termination. For purposes of this Agreement, “Cause,” “Good
Reason” and
“Disability” shall have the meanings ascribed to such terms in the Employment
Agreement by and between the Company and Employee dated as of January 1, 2005,
as amended (the “Employment Agreement”). Accordingly, unless otherwise
determined by the Committee or as provided by the Employment Agreement,
Employee’s voluntary Termination (other than due to Disability or for Good
Reason) or Termination by the Company for Cause will result in all Restricted
Stock Units as to which the Restricted Period has not lapsed at or before such
Termination being immediately forfeited.
(ii) Vesting.
In the
event of a Termination due to death, Disability, termination by Employee for
Good Reason, or termination by the Company for reasons other than Cause, the
Restricted Period shall lapse at the time of such Termination. Notwithstanding
anything in this Agreement to the contrary, the Restricted Period shall lapse
under all events as may be specified for full vesting of stock awards under
the
Employment Agreement.
(c) Expiration
of Restricted Period.
Unless
the Restricted Period on Restricted Stock Units lapsed earlier under Section
3(b) or 3(d), the Restricted Period shall lapse at the Vesting Date set forth
in
the following schedule, subject to Employee’s continued employment with the
Company through the relevant Vesting Date:
|
Vesting
Date
|
Restricted
Stock Units Vesting
|
|
January
31, 2008
|
100%
|
(d) Acceleration
of Expiration of Restricted Period.
In the
event of a Change in Control at a time that Employee is employed by the Company
or any of its subsidiaries (or simultaneously with Employee’s Termination), the
Restricted Period shall lapse immediately prior to the Change in Control. For
purposes of this Agreement, Change in Control” shall have the meaning ascribed
to such term in the Employment Agreement.
(e) Nontransferability.
Restricted Stock Units and all related rights hereunder shall not be
transferable or as-signable by Employee other than by will or the laws of
descent and distribution, and shall not be pledged, hypothecated, or otherwise
encumbered in any way or subject to execution, attach-ment, lien, or similar
process.
2
4. Employee's
Account, Dividend Equivalents and Adjustments
(a) Account.
Restricted Stock Units are bookkeeping units, and do not constitute ownership
of
Shares or any other equity security. The Company shall maintain a bookkeeping
account for Employee (the "Account") reflecting the number of Restricted Stock
Units then credited to Employee hereunder as a result of this grant of
Restricted Stock Units and any crediting of additional Restricted Stock Units
to
Employee pursuant to payments equivalent to dividends paid on Shares under
Section 4(b) ("Dividend Equivalents").
(b) Dividend
Equivalents.
Dividend Equivalents shall be credited in accordance with the provisions of
the
Deferred Compensation Plan and the methodology specified by the Company for
crediting dividend equivalents on Share units in effect from time to time
thereunder. It is understood that the intention hereunder is that Dividend
Equivalents be credited in a manner that provides an economic benefit to
Employee equivalent to dividends on Shares without undue administrative burdens
on the Company. Accordingly, unless otherwise determined by the Company under
the Deferred Compensation Plan or by the Committee hereunder, no interest will
be credited on any cash amount (if any) of such dividend equivalents from the
dividend date to the time of settlement of the Restricted Stock Units. Unless
otherwise determined by the Committee, all Dividend Equivalents deemed
reinvested in additional Restricted Stock Units shall be subject to the same
risk of forfeiture, Restricted Period, and other restrictions and terms as
apply
to the original Restricted Stock Units. Employee shall not be entitled to
receive actual dividends in respect of Restricted Stock Units prior to the
issuance of Shares in settlement thereof.
(c) Adjustments
The
number of Restricted Stock Units credited to Employee's Account shall be
adjusted by the Committee, in accordance with Section 10(c) of the Plan, in
order to preserve, without enlarging Employee’s rights with respect to, such
Restricted Stock Units. Any such adjustment shall be made taking into account
any crediting of Restricted Stock Units or cash to the Employee under Section
4(b) in connection with such transaction or event.
5. Settlement.
(a) Time
of Settlement.
Settlement of Restricted Stock Units shall occur at the later of the lapse
of
the Restricted Period or the applicable date in accordance with the Restricted
Stock Units Election filed by Employee under the Deferred Compensation Plan
on
or before December 31, 2005 with respect to the Restricted Stock Units, in
each
case subject to Section 5(c). The Company shall settle the Restricted Stock
Units by making delivery in such manner as may be specified under the Deferred
Compensation Plan; provided, however, that if permitted under the Deferred
Compensation Plan, the Company may make delivery of Shares hereunder in
settlement of Restricted Stock Units by either delivering one or more
certificates representing such Shares to the Employee, registered in the name
of
the Employee (and any joint name, if so directed by the Employee), or by
depositing such Shares into an account maintained for the Employee (or of which
the Employee is a joint owner, with the consent of the Employee) established
in
connection with the Company's Employee Stock Purchase Program or another plan
or
arrangement providing for investment in Shares and under which the Employee's
rights are similar in nature to those under a stock brokerage account. If the
Company determines to settle Restricted Stock Units by making a deposit of
Shares into such an account, the Company may settle any fractional Restricted
Stock Unit by means of such deposit. In other circumstan-ces or if so determined
by the Company, the Company shall instead pay cash in lieu of fractional Shares,
on such basis as the Administrator may determine. In no event will the Company
in fact issue fractional Shares.
(b) Effect
of Settlement.
Upon
settlement of the Restricted Stock Units, all obligations of the Company in
respect of such Restricted Stock Units shall be terminated.
3
(c) Avoidance
of Constructive Receipt.
Other
provisions of this Agreement notwithstanding, under Section 409A of the Internal
Revenue Code (the “Code”) or any other U.S. federal income tax law as presently
in effect or hereafter amended (i) if the timing of any settlement hereunder
would result in a distribution of Shares to Employee at a time that Employee
is
a “Specified Employee” under Code Section 409A(a)(2)(B)(i) (i.e., a “key”
employee) and precluded under Code Section 409A from then receiving the
distribution, such settlement shall be delayed in accordance with Section 7.2(c)
of the Deferred Compensation Plan (but without any effect on the timing of
any
settlement that otherwise would occur six months or more after Employee’s
separation from service within the meaning of Code Section 409A); (ii) any
distribution in settlement of the Restricted Stock Units that is triggered
by a
termination of employment hereunder will occur only at such time as Employee
has
had a “separation from service” as defined in Proposed Treasury Regulation §
1.409A-1(h) (and any successor regulation) regardless of whether any other
event
might be viewed as a termination of employment by the Company for any other
purpose; (iii) the Company shall have no power or authority to accelerate the
distribution and settlement of the Restricted Stock Units except to the extent
such acceleration is permitted under Code Section 409A; (iv) all other
requirements of Code Section 409A and regulations thereunder (including proposed
regulations), shall apply to the extent necessary so that the Employee is not
subject to constructive receipt of income under Code Section 409A prior to
the
actual distribution of Restricted Stock Units hereunder or to tax penalties
under Code Section 409A; and (v) other restrictions and limitations under the
Deferred Compensation Plan with respect to distributions apply to the Restricted
Stock Units subject to Code Section 409A whether or not the Restricted Period
has yet lapsed.
6. Tax
Withholding.
Unless
otherwise determined by the Board or Committee, or unless the Employee has
made
other arrangements satisfactory to the Company to provide for payment of
mandatory withholding taxes in advance of the settlement date applicable to
the
Restricted Stock Units (by such deadline as the Company may specify), the
Company will withhold from the number of Shares to be delivered upon settlement
a number of whole shares which has a Fair Market Value nearest to but not
exceeding the amount of federal, state and local taxes required to be withheld
as a result of such settlement. The Employee may elect such other methods of
satisfying such withholding obligation as may be permitted under the Deferred
Compensation Plan and in effect at the time of settlement. In the case of the
withholding or surrender of Shares to pay withholding taxes, the Shares withheld
or the Shares surrendered will be valued at the Fair Market Value determined
in
accordance with procedures for valuing Shares as determined by the Committee
and
otherwise in effect at the time of settlement, including under the Deferred
Compensation Plan.
7. 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 Restricted Stock Units granted hereby,
and supersedes any prior agreements or documents with respect to such Restricted
Stock Units. No amendment, alteration, suspension, discontinuation, or
termination of this Agreement which may impose any additional obligation upon
the Company or materially and adversely affect the rights of Employee with
respect to the Restricted Stock Units 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 Employee.
By
accepting this grant of Restricted Stock Units, Employee agrees to the terms
of
this Agreement and agrees to be bound by all the terms and provisions of the
Agreement, the Plan (as presently in effect or hereafter amended), and the
Deferred Compensation Plan, and by all decisions and determinations of the
Committee and the Administrator.
CHARMING
SHOPPES, INC.
BY:______________________________________
(Authorized
Officer)
EMPLOYEE:
______________________________________
Xxxxxx
X.
Xxxx
4
