CHARMING SHOPPES, INC. STOCK APPRECIATION RIGHTS AGREEMENT
EXHIBIT
10.6
Performance Based
SARs
Xxxxxx X. Xxxx
CHARMING
SHOPPES, INC.
STOCK
APPRECIATION RIGHTS AGREEMENT
Agreement
dated as of April 1, 2008 (the “Grant Date”) between CHARMING SHOPPES, INC. (the
“Company”) and XXXXXX X. XXXX (the “Executive”).
WHEREAS,
the Executive is presently employed by the Company in the capacity of President
and Chief Executive Officer, and is a member of the Board of Directors of the
Company where she currently serves as Chairman of the Board;
WHEREAS,
the Company recognizes that the Executive’s contribution has been substantial
and meritorious and, as such, the Executive has demonstrated unique
qualifications to act in an executive capacity for the Company; and
WHEREAS,
the Company and the Executive are parties to an Employment Agreement dated as of
December 31, 2007, as amended (the “Employment Agreement”), which provides for
the grant of stock appreciation rights on Company common stock to reward the
Executive for her contributions to the Company.
NOW
THEREFORE, it is agreed as follows:
1. Grant of SAR, Consideration
and Executive Acknowledgments.
The
Company hereby confirms the grant, under the Company’s 2004 Stock Award and
Incentive Plan (the “Plan”), to the Executive on the Grant Date of a stock
appreciation right (the “SAR”) with respect to ____ 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 $_________ per share, which is the fair
market value of a Share on the Grant Date (the “Base Amount”).
The
Executive shall be required to pay no consideration for the grant of the SAR
except for her agreement to provide services to the Company prior to exercise
and her 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. The Executive acknowledges and agrees that (i) the
SAR is nontransferable, except as provided in Section 8 hereof and in the Plan,
(ii) the SAR is subject to forfeiture in the event of Executive’s termination of
employment 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 the Executive 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 or noted to be defined in the
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Employment
Agreement 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. The Executive 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.
3. Date When
Exercisable.
This SAR
may be exercised only if and to the extent that it has become exercisable as
specified in this Agreement. Subject to acceleration as provided in
this Section 3 and Section 6 below, limitations on exercisability imposed in
Section 7 below, and all other terms and conditions of this Agreement, this SAR
shall become exercisable as follows:
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Vesting
Date
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Exercisable
SAR
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April 1,
2009
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1/2
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April 1,
2010
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1/2
|
The
exercisability of the SAR is cumulative, but shall not exceed 100% of the Shares
subject to the SAR. If the foregoing schedule would produce
fractional Shares, the number of Shares for which the SAR becomes exercisable
shall be rounded to the nearest whole Share. 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 the Executive,
specifying the number of Shares which the Executive wishes to
exercise. Simultaneous with or as soon as practicable after the
receipt of such notice, the Company shall deliver to the Executive 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 the Executive. 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 the
Executive’s notice of exercise is received by the Company; such Rules and
Regulations may vary from or limit the procedures specified in this
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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.
(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.
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. Acceleration of
Exercisability.
(a) If the
Executive’s employment is terminated by the Company without Cause (as defined in
the Employment Agreement) or if she terminates her employment for Good Reason
(as defined in the Employment Agreement), the portion of the SAR that would have
vested if the Executive had continued in employment with the Company for an
additional two years following the date of termination shall become vested and
exercisable on the date of termination.
(b) If the
Executive’s employment is terminated due to death or Disability (as defined in
the Employment Agreement), the vesting of the SAR shall be accelerated in full
so that all of the SAR shall become vested and exercisable on the date of the
Executive’s death or termination of employment due to Disability.
(c) The
following provisions shall apply in the event of a Change in Control (as defined
in the Employment Agreement):
(i) In the
event of a Change of Control at a time when the Executive is employed by the
Company or any of its subsidiaries, if the acquiring company does not convert
the Executive’s outstanding SAR to a stock appreciation right with respect to
the stock of the acquiring company (or the parent of the acquiring company, if
the acquirer is a subsidiary) that has the same economic value, vesting
provisions and other terms as the Executive’s outstanding SAR, this SAR shall
become fully vested and exercisable immediately prior to the occurrence of such
Change of Control.
(ii) If, upon
a Change in Control, the acquiring company does convert the Executive’s
outstanding SAR to a stock appreciation right with respect to stock of the
acquiring company (or the parent of the acquiring company, if the acquirer is a
subsidiary) that has the same economic value, vesting provisions and other terms
as the Executive’s outstanding SAR, the portion of this SAR that would have
vested over the two-year period following such Change in Control shall become
vested and exercisable on the date of the Change in Control.
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(iii) If the
Executive’s employment is terminated as a result of a Qualifying Termination (as
defined in the Employment Agreement), the SAR shall become fully vested and
exercisable on the date of the Qualifying Termination.
(d) Notwithstanding
anything in this Agreement to the contrary, vesting of the SAR shall not be less
favorable to the Executive than the vesting specified for equity awards under
the Employment Agreement.
7. Exercisability after
Termination of Employment.
(a) This SAR
shall terminate and no longer be exercisable at the earlier of the scheduled
expiration time of the SAR, as set forth in Section 3 above, or the applicable
time specified below at or following a termination of employment of the
Executive:
(i) at the
expiration of three months after Executive’s employment with the Company and its
subsidiaries is terminated for Cause or the Executive voluntarily terminates her
employment, other than for Good Reason or Disability; or
(ii) at the
expiration of one year after Executive’s employment with the Company and its
subsidiaries is terminated by the Company without Cause or the Executive
terminates her employment for Good Reason; or
(iii) at the
expiration of one year after the Executive’s employment with the Company and its
subsidiaries is terminated by reason of a Qualifying Termination;
or
(iv) at the
expiration of one year after the termination of the Executive’s employment with
the Company and its subsidiaries by reason of the Executive’s Disability or
death.
(b) The
Executive shall not be deemed to have terminated her employment for purposes of
this Section 7 if her employment terminates with the Company but thereafter
continues with one of the Company’s subsidiaries or terminates with a subsidiary
but thereafter continues with the Company or another subsidiary.
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 the Executive to any third party. This SAR
shall not be transferable to any third party by the Executive otherwise than by
will or the laws of descent and distribution, and this SAR shall be exercisable,
during the lifetime of the Executive, only by the Executive; provided, however,
that the Executive will be entitled to designate a beneficiary or beneficiaries
to exercise her rights under this SAR upon the death of Executive, 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.
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9. Investment
Representation.
Unless,
at the time of any exercise of this SAR, the issuance and delivery of Shares
hereunder to the Executive 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, the Executive 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 she 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 the Executive 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 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
the Executive 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 the Executive.
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CHARMING
SHOPPES, INC.
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BY:
___________________________________
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(Authorized
Officer)
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EXECUTIVE:___________________________
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Xxxxxx
X. Xxxx
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