EXHIBIT 10.2.25
CHARMING SHOPPES, INC.
1999 ASSOCIATES' STOCK INCENTIVE PLAN
STOCK OPTION AGREEMENT
Agreement dated as of April 1, 1999 between CHARMING SHOPPES, INC.
(the "Company") and (the "Associate").
It is agreed as follows:
1. GRANT OF OPTION; CONSIDERATION
The Company hereby confirms the grant, under and pursuant to the
Company's 1999 Associates' Stock Incentive Plan (the "Plan"), to the
Associate on of a nonqualified stock option to purchase up to
shares of the Company's common stock, par value $.10 per share
(the "Shares"), at an exercise price of per share (the
"Option"). The Option granted hereunder is not intended to constitute an
incentive stock option within the meaning of Section 422 of the Code.
The Associate shall be required to pay no consideration for the grant
of the Option except for his or her agreement to provide services to the
Company prior to exercise and other agreements set forth herein.
2. INCORPORATION OF PLAN BY REFERENCE
The Option has been granted to the Associate under the Plan, a copy of
which is attached hereto. All of the terms, conditions and other
provisions of the Plan are hereby incorporated by reference into this
Associate Stock Option Agreement (the "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.
3. DATE WHEN EXERCISABLE
(a) This Option may not be exercised unless and only to the extent
that it has become exercisable as specified in this Agreement. Subject to
acceleration as provided in this Section 3, and Sections 7 and 8 below,
limitations on exercisability imposed in Section 8 below, and all other
terms and conditions of this Agreement, this Option shall become
exercisable as follows: The Associate may purchase up to one-fifth of the
total number of shares granted hereunder commencing one (1) year after the
date of grant of this Option, an additional one-fifth commencing two (2)
years after the date of grant of this Option, an additional one-fifth
commencing three (3) years after the date of grant of this Option, an
additional one-fifth commencing four (4) years after the date of grant of
this Option, and the remaining shares granted hereunder commencing five (5)
years after the date of grant of this Option. Except as otherwise
specifically provided herein, the Option to purchase any and all Shares
covered by this Agreement shall expire at 5:00 p.m. on the date ten (10)
years after the date of grant of this Option.
(b) The number of Shares with respect to which the Option may be
exercised shall be cumulative so that if, in any of the aforementioned
periods, the full number of Shares shall not have been purchased, any such
unpurchased Shares shall continue to be included in the number of Shares
with respect to which this Option shall then be exercisable along with any
other Shares as to which this Option may become exercisable in accordance
with its terms.
THE DATE OF GRANT OF THIS OPTION IS:
GRANT NUMBER:
(c) The provisions contained in Section 3(a) above notwithstanding,
the Committee may, in its sole discretion, at any time, upon written notice
to the Associate, accelerate the vesting described in Section 3(a) so that
the Option shall become immediately exercisable to the extent of all or any
portion of the Shares covered hereunder. Acceleration pursuant to this
Section 3(c) shall be separate and independent from any acceleration
pursuant to Section 7 of this Agreement, and the provisions of Sections
3(d) and (e) shall not apply in the case of acceleration pursuant to
Section 7 of this Agreement.
(d) In the event that the acceleration described in Section 3(c)
occurs prior to the time that all of the Options would have otherwise been
exercisable in accordance with Section 3(a), in consideration of such
acceleration, the Associate, if so requested by the Company at the time,
agrees to hold and not dispose of that number of Shares covered by this
Option for which this Option would not have been exercisable at the time of
such acceleration, if such acceleration had not occurred, and further
agrees to dispose of such Shares only at such time and to the extent of
that number of Shares for which this Option would have been exercisable in
accordance with the schedule set forth in Section 3(a) as if the
acceleration had not occurred. In addition, if the Associate's employment
with the Company or any of its subsidiaries shall be voluntarily terminated
(other than for a temporary leave of absence approved by the Company or
retirement at age 65 or older or through early retirement with the consent
of the Company pursuant to any retirement plan of the Company or any
subsidiary) prior to a Change of Control and prior to the expiration of
five (5) years after the date of grant of this Option, the Associate shall
be obligated, at the Company's option exercisable within 60 days after
termination of the Associate's employment, to sell to the Company any
Shares theretofore acquired by the Associate upon exercise of this Option
at a price which is equal to the price that the Associate paid for such
Shares, but only to the extent that the Option would not have been
exercisable at the date of termination of employment in accordance with
Section 3(a) were it not for the acceleration provided for herein.
(e) The Associate acknowledges that the certificates representing
those Shares received upon exercise of the Option at a time the Option
would not otherwise have been exercisable but for an acceleration pursuant
to Section 3(c) may bear an appropriate legend giving notice of the
foregoing restrictions, including the restriction on transfer of the
Shares.
4. METHOD OF EXERCISE
The Option may be exercised as to any part of the Shares which may
then be purchased by delivery to and receipt by the Secretary of the
Company at 000 Xxxxx Xxxx, Xxxxxxxx, Xxxxxxxxxxxx 00000, of a written
notice, signed by the Associate, specifying the number of Shares which the
Associate wishes to purchase, accompanied by payment in full of the
exercise price therefor in accordance with Section 5. As soon as
practicable after the receipt of such notice and payment, the Company shall
deliver to the Associate a stock certificate for the Shares so purchased,
with any requisite legend affixed. Subject to the provisions of the Plan,
such exercise may include instructions to the Company to deliver Shares due
upon exercise of the Option to any registered broker or dealer designated
by the Committee (a "Designated Broker") in lieu of delivery to the
Associate. Such instructions must designate the account into which the
Shares are to be deposited. The Associate may tender this notice of
exercise, which has been properly executed by the Associate, and the
aforementioned delivery instructions to any Designated Broker together with
irrevocable instructions to the Designated Broker to promptly deliver to
the Company the cash amount of sale or loan proceeds from the Shares
sufficient to pay the exercise price, and thereupon the Company may issue
Shares and deliver them to such Designated Broker.
5. PAYMENT OF EXERCISE PRICE
The exercise price of the Option shall be payable in cash or by
certified or bank cashier's check, provided, however, that, in lieu of
payment in full in cash or by such check, the exercise price may, if and to
the extent then permitted by the Committee, upon written request of the
Associate, be paid in full or in part by delivery and transfer to the
Company of that number of shares of the Company's common stock otherwise
owned by the Associate with an aggregate fair market value (determined in
accordance with procedures for valuing shares as set forth in rules and
regulations adopted by the Committee and in effect at the time the
Associate's notice of exercise is received by the Company) equal to the
aggregate exercise price of that number of Shares for which the Option is
being exercised or such lesser portion of the aggregate purchase price as
may be specified by the Associate (in which case the balance must be paid
in cash or by certified or bank cashier's check).
6. TAX WITHHOLDING
Whenever Shares are to be delivered upon exercise of the Option, the
Company shall be entitled to require as a condition of delivery that the
Associate remit or, in appropriate cases, agree to remit when due an amount
sufficient to satisfy all federal, state and local withholding tax
requirements relating thereto. Subject to the approval of the Committee,
the Associate will be entitled to elect to have the Company withhold from
the Shares to be delivered upon the exercise of the Option, or to elect to
deliver to the Company from shares of the Company's common stock owned
separately by the Associate, a sufficient number of such shares to satisfy
the Associate's federal, state and local tax obligations relating to the
Option exercise (and the Company's withholding obligations), to the extent,
if any, permitted under rules and regulations adopted by the Committee and
in effect at the time of the exercise of the Option. In such case, the
Shares withheld or the shares surrendered will be valued at the fair market
value determined in accordance with procedures for valuing shares as set
forth in rules and regulations adopted by the Committee and otherwise in
effect at the time of the exercise of the Option.
7. CHANGE OF CONTROL PROVISIONS
(a) Acceleration of Exercisability. In the event of a Change of
Control at a time that the Associate is employed by the Company or any of
its subsidiaries and after the date of grant of this Option, this Option
shall become immediately and fully exercisable upon the occurrence of such
Change of Control, and no restriction or limitation on the rights of the
Associate set forth in Section 3 hereof shall have any further force or
effect.
(b) Definitions of Certain Terms. For purposes of this Agreement,
the following definitions shall apply:
(1) "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 7, "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.
(2) "Change of Control" means and shall be deemed to have
occurred
if
(i) 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
(ii) those individuals who as of (grantdate) 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 (grantdate) 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
(iii) the shareholders of the Company approve 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"), or consummation of
such a Transaction if shareholder approval is not obtained, 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; provided, however, a Change of Control shall
not be deemed to have occurred if the Committee shall have determined, by
action taken prior to the approval of the Transaction by shareholders or
consummation of the Transaction if shareholder approval is not obtained,
that such Transaction shall not constitute a Change of Control for purposes
of all options then outstanding under the Plan, which determination, if
made with respect to a Transaction, shall not be deemed to constitute a
determination with respect to any subsequent Transaction; or
(iv) the shareholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the 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.
(3) "Person" shall have the meaning ascribed for purposes of
Section 13(d) of the Exchange Act and the rules thereunder.
(4) "Related Party" means (i) a majority-owned subsidiary of the
Company; or (ii) a trustee or other fiduciary holding securities under an
Associate benefit plan of the Company or any majority-owned subsidiary of
the Company; or (iii) a corporation owned directly or indirectly by the
shareholders of the Company in substantially the same proportion as their
ownership of Voting Securities; or (iv) 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, 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.
(5) "Voting Securities" means any securities of the Company which
carry the right to vote generally in the election of directors.
8. TERMINATION OF EMPLOYMENT
(a) This Option shall terminate and no longer be exercisable at the
earlier of the scheduled expiration time of the Option, as set forth in
Section 3(a) above, or the earliest time specified below at or following a
termination of employment of the Associate; provided, however, that in the
event of termination of the employment of the Associate, this Option shall
be exercisable during the period, if any, between the occurrence of such
termination and the time designated for the termination of this Option only
to the extent indicated below:
(1) at the time of involuntary termination of the Associate's
employment with the Company or any of its subsidiaries for reasons of moral
turpitude, at which time this Option shall immediately terminate; provided,
however, that, the provisions of Section 3(a) notwithstanding, this Option
may not be exercised during any period prior to a Change of Control during
which the Company, having given notice to the Associate, is investigating a
claim that the Associate has engaged in one or more acts of moral
turpitude; or
(2) at the time of voluntary or involuntary termination of the
Associate's employment with the Company or any of its subsidiaries for any
reason at any time prior to the expiration of one year after the date of
grant of this Option and prior to any Change of Control, other than by
reason of the Associate's death or disability, at which time this Option
shall immediately terminate; or
(3) at the expiration of three months after the voluntary or, if
for cause (other than for reasons of moral turpitude), the involuntary
termination of the Associate's employment with the Company or any of its
subsidiaries, in either case at any time (A) after the expiration of one
year after the date of grant of this Option, except as may be otherwise
provided in Section 8(a)(7) below, during which three-month period this
Option shall be exercisable only to the extent that it was exercisable at
the date of the Associate's termination of employment, or (B) after a
Change of Control, except as may be otherwise provided in Section 8(a)(7)
below, during which three-month period this Option shall be exercisable in
full; or
(4) at the expiration of three months after the involuntary
termination of the Associate's employment, other than for reasons of cause,
moral turpitude, death or disability, with the Company or any of its
subsidiaries at any time (A) after the expiration of one year after the
date of grant of this Option, except as may be otherwise provided in
Section 8(a)(7) below, during which three-month period this Option shall be
exercisable to purchase the greater of (i) a number of Shares determined
pursuant to the Option Formula (as set forth in Section 8(e) below) and
(ii) the number of Shares as to which this Option was exercisable at the
date of the Associate's termination of employment, or (B) after a Change of
Control, except as may be otherwise provided in Section 8(a)(7) below,
during which three-month period this Option shall be exercisable in full;
or
(5) at the expiration of three years after the date this Option is
scheduled to become exercisable in full under Section 3 above or three
years after the termination of employment, whichever is the later (but in
no event later than the scheduled expiration time of this Option), if the
Associate's termination results from his normal retirement at age 65 or
thereafter ("Normal Retirement") or early retirement after reaching age 60
and prior to age 65 with the consent of the Company pursuant to any
retirement plan ("Early Retirement"), or such longer or shorter period as
may be provided in Section 8(a)(6) below, provided that (i) during the
period between Normal Retirement or Early Retirement, as the case may be,
and termination of the Option as specified in this Section 8(a)(5) (the
"Exercisability Period"), this Option shall continue to be exercisable by
the Associate at such times and to the same extent that it would have been
exercisable had the Associate continued his employment throughout the
Exercisability Period, except as may be otherwise provided in Section
8(a)(6) below, and (ii) at the time of Normal Retirement or Early
Retirement, as the case may be, the Associate enters into an agreement not
to engage, directly or indirectly, in any business activity in competition
with any business then engaged in by the Company or any of its subsidiaries
during the Exercisability Period, and containing such other terms and
conditions as may be specified by the Company; or
(6) at the expiration of one year after the Associate's death if
the Associate dies while employed by the Company or any of its subsidiaries
or dies during the Exercisability Period specified in Section 8(a)(5)
above, during which one-year period this Option shall be exercisable in
full; or
(7) at the expiration of one year after the Associate's death if
the Associate dies during the three-month periods referred to in Sections
8(a)(3) or (4) above, during which one-year period this Option shall be
exercisable to the same extent provided in Section 8(a)(3) or (4) above
(whichever was applicable prior to the Associate's death); or
(8) at the expiration of one year after the termination of the
Associate's employment with the Company or any of its subsidiaries by
reason of the Associate's permanent disability if the Associate becomes
permanently disabled while employed by the Company or any of its
subsidiaries, during which one-year period this Option shall be exercisable
in full.
(b) For purposes hereof, "cause" shall mean the Associate's chronic
neglect, refusal or failure to fulfill his or her employment duties and
responsibilities, other than for reasons of sickness, accident or other
similar causes beyond the Associate's control. Such neglect, refusal or
failure shall be determined in the sole and reasonable judgment of the
Committee.
(c) For purposes hereof, the existence of a "disability" shall be
determined by, or in accordance with criteria and standards adopted by, the
Committee.
(d) For purposes hereof, "moral turpitude" shall mean the Associate's
dishonesty or intentional wrongdoing committed against the Company, its
agents or Associates or otherwise in connection with his or her employment
by the Company or conviction of a crime, whether or not in connection with
employment, other than a traffic infraction or other minor violation. The
Committee shall have the sole discretion to determine whether the Associate
has committed an act of moral turpitude.
(e) For purposes hereof, the "Option Formula" shall be the product of
(i) the total number of Shares covered by this Option at the date of
termination of employment times (ii) a fraction, the numerator of which
shall be the lesser of five (5) or the number of full and partial years
that the Associate has been employed by the Company or any of its
subsidiaries between the date of grant of this Option and the date of
termination of employment and the denominator of which shall be the number
five (5), less any shares previously purchased by exercise of the Option.
(f) Except as provided in Section 9, an Associate shall not be deemed
to have terminated his employment for purposes of this Section 8 if his
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.
9. CHANGE IN JOB STATUS
Should the Associate's job classification change, and as a result of
such change the Committee determines, in its sole discretion and prior to
any Change of Control, that the Associate is no longer employed in a
position which would enable him to contribute to the success of the Company
on at least as great a level as that to which he was enabled by his prior
job classification, then the Committee may deem the Associate's employment
with the Company or its subsidiaries to have been terminated involuntarily
(but not for cause or moral turpitude) in respect of all or a portion of
this Option.
10. LIMITS ON TRANSFER OF OPTION; BENEFICIARIES
No right or interest of Associate in this Option 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 Associate to any third
party. This Option shall not be transferable to any third party by the
Associate otherwise than by will or the laws of descent and distribution,
and this Option shall be exercisable, during the lifetime of the Associate,
only by the Associate; provided, however, that the Associate will be
entitled to designate a beneficiary or beneficiaries to exercise his rights
under this Option upon the death of Associate, in the manner and to the
extent permitted by the Committee under rules and regulations adopted by
the Committee under the Plan.
11. INVESTMENT REPRESENTATION
Unless, at the time of any exercise of this Option, the issuance and
delivery of Shares hereunder to the Associate 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 Associate shall
provide to the Company, as a condition to the valid exercise of this Option
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 the Associate 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 of 1933 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.
12. ASSOCIATE BOUND BY PLAN
The Associate hereby acknowledges receipt of the attached copy of the
Plan and agrees to be bound by all the terms and provisions thereof (as
presently in effect or hereafter amended), and by all decisions and
determinations of the Committee thereunder.
13. 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 Option, and
supersedes any prior agreements or documents with respect to the Option.
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 Associate with respect to the Option 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 Associate.
CHARMING SHOPPES, INC.
BY:
(Authorized Officer)
ASSOCIATE:
