EXHIBIT 10.17
CHARMING SHOPPES, INC.
2004 STOCK AWARD AND INCENTIVE PLAN
RESTRICTED STOCK AGREEMENT - ASSOCIATES
OTHER THAN SECTION 16 OFFICERS
Agreement (the "Agreement"), dated as of ____________ , 200__ (the "Grant
Date") between CHARMING SHOPPES, INC. (the "Company") and _____________________
("Participant")
1. Grant of Restricted Stock; Consideration; Participant Acknowledgments.
The Company hereby confirms the grant, under the 2004 Stock Award and
Incentive Plan (the "Plan"), on the Grant Date, of __________ shares of
Restricted Stock pursuant to Section 6(e) of the Plan. The Restricted Stock is
subject to the terms and conditions of the Plan and the provisions of this
Agreement. Participant shall be required to pay no cash consideration for the
grant of the Restricted Stock, but performance of services prior to the
expiration of applicable restrictions relating to the Restricted Stock and
otherwise during his or her employment, and his or her agreement to abide by the
terms set forth in the Plan, this Restricted Stock Agreement (the "Agreement"),
and any Rules and Regulations under the Plan, shall be deemed to be
consideration for this grant of Restricted Stock. Participant acknowledges and
agrees that (i) the Restricted Stock is nontransferable as provided in Section
5(b) hereof and Sections 6(e) and 10(b) of the Plan, (ii) the Restricted Stock
is subject to forfeiture in the event of Participant's termination of employment
in certain circumstances, as specified in Section 5(a) hereof, and (iii) sales
of shares of the Company's common stock, par value $0.10 per share ("Shares"),
following the lapse of restrictions will be subject to the Company's policies
regulating trading by employees as specified in Section 5(c) hereof.
2. Nature of Award of Restricted Stock; Restricted Period.
Each share of "Restricted Stock" granted hereunder represents the right to
receive one share of the Company's Common Stock, which will be issued at the end
of a specified "Restricted Period" and which right is subject to a risk of
forfeiture and other conditions during such Restricted Period. The Restricted
Period applicable to the Restricted Stock shall begin on the Grant Date and
lapse as to ______________ (__%) percent of the total number of shares of
Restricted Stock on the _________ anniversary of the Date of Grant, an
additional _______________ (___%) percent of the total number of shares of
Restricted Stock on the _____________ anniversary of the Date of Grant and the
remaining ___________ (____%) percent of the total number of shares of
Restricted Stock on the _________ anniversary of the Date of Grant, provided,
however, that the Restricted Period will lapse on an accelerated basis as
provided in Section 5(a) and Section 8 hereof. [to be completed in accordance
with each individual grant] Shares of Common Stock will be issued to Participant
in settlement of Restricted Stock promptly following the lapse of the applicable
Restricted Period. This award differs from some other awards of "restricted
stock" which involve issuance of Shares at the beginning rather than the end of
the restricted period; Participant has no voting rights or rights to actual
dividends prior to the end of the Restricted Period.
--------------------------------------------------------------------------------
DATE OF RESTRICTED STOCK: _____________
AWARD NUMBER: _______________
3. Incorporation of Plan by Reference.
The Restricted Stock has been granted to Participant 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 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. Participant hereby accepts the grant of Restricted Stock, acknowledges
receipt of the attached copy 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, the Committee,
or any person or committee designated by the Committee to administer the Plan
(the "Administrator").
4. Participant's Account.
Shares of Restricted Stock are bookkeeping units, and do not constitute
ownership of Shares or any other equity security. The Company shall maintain a
bookkeeping account for Participant (the "Account") reflecting the number of
shares of Restricted Stock then credited to Participant hereunder as a result of
this grant of Restricted Stock and any crediting of additional Restricted Stock
to Participant pursuant to payments equivalent to dividends paid on Shares under
Section 7 ("Dividend Equivalents").
5. Risk of Forfeiture; Non-Transferability; Xxxxxxx Xxxxxxx Policy.
(a) Risk of Forfeiture. In the event of a Termination of Employment of
Participant, the Restricted Stock as to which the Restricted Period has not
ended shall be forfeited; provided, however, that:
(i) In the event of a Change of Control at or before Participant's
Termination of Employment, this risk of forfeiture shall automatically
lapse, and all Restricted Periods shall end, on all of Participant's
Restricted Stock immediately prior to the Change of Control, so
Participant's Restricted Stock will not be forfeited;
(ii) In the event that Participant's Termination of Employment is due to
death or a permanent disability, this risk of forfeiture shall
automatically lapse, and all Restricted Periods shall end, on all of
Participant's Restricted Stock, so Participant's Restricted Stock will
not be forfeited;
iii) In the event that Participant's Termination of Employment is due to
an involuntary termination by the Company for reasons other than
"Cause," the risk of forfeiture shall automatically lapse, and the
Restricted Period shall end, on those shares of Participant's
Restricted Stock as to which the Restricted Period would have ended at
the next anniversary of the Date of Grant (i.e., if Termination of
Employment is more than _______ years after the Grant Date and before
settlement, one additional tranche of the Restricted Stock will become
non-forfeitable), so those shares of Restricted Stock will not be
forfeited, but those shares of Restricted Stock as to which the
Restricted Period would not have ended due to the passage of time at
or before the next anniversary of the Date of Grant shall be forfeited
at the time of such Termination of Employment;
(iv) In the event that Participant's Termination is due to Retirement,
Participant's Restricted Stock will not be forfeited upon such
Retirement, but instead the risk of forfeiture and other restrictions
on Participant's Restricted Stock shall remain in effect until the
earlier of the end of the Restricted Period or Participant's death.
During such post-Retirement period in which the restrictions remain in
effect, the Restricted Stock shall be immediately forfeited if
Participant: (A) directly or indirectly owns any equity or proprietary
interest in (except for ownership of shares in a publicly traded
company not
2
exceeding five percent of any class of outstanding securities), or is
an employee, agent, director, advisor, or consultant to or for, any
Competitor (as defined below) of the Company in the United States,
whether on his or her own behalf or on behalf of any person, in the
procuring, sale, marketing, promotion, or distribution of any product
or product lines competitive with any product or product lines of the
Company at the time of Participant's Retirement, or if Participant
assists in, manages, or supervises any of the foregoing activities, or
(B) undertakes any action to induce or cause any supplier to
discontinue any part of its business with the Company, or (C) attempts
to induce any merchant, buyer, or manager or higher level employee of
the Company to terminate his or her employment with the Company, or
(D) discloses confidential or proprietary information of the Company
to any person, firm, corporation, association, or other entity for any
reason or purpose whatsoever, or make use of any such information for
his or her own purposes, so long as such information has not otherwise
been disclosed to the public or is not otherwise in the public domain
except as required by law or pursuant to administrative or legal
process.
(v) The Committee may otherwise accelerate the date or dates as of which
this risk of forfeiture and the Restricted Period shall lapse, subject
to Section 6(c).
For purposes of this Agreement, (A) "Termination of Employment" means a
termination of employment with the Company or any subsidiary immediately
after which the Participant is not employed by the Company or any
subsidiary; (B) "Cause" means Participant'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
Participant's control, such neglect, refusal or failure shall be determined
in the sole and reasonable judgment of the Administrator; and (C)
"permanent disability" shall be determined by, or in accordance with
criteria and standards adopted by, the Administrator; and (D) "Retirement"
shall mean a retirement at or after Participant has attained age 62, and
(E) "Competitor" shall mean at any time only a chain of retail stores with
50 or more store locations; provided, however, that the average square
footage of the chain's stores is less than 15,000 square feet. .
(b) Nontransferability. Restricted Stock and all related rights hereunder
shall not be transferable or assignable by a Participant (subject to any
exception approved by the Committee under the Plan), 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, attachment, lien, or
similar process.
(c) Xxxxxxx Xxxxxxx Policy. After settlement of Restricted Stock and
delivery of Shares under Section 6, Participant will be subject to restrictions
on selling such Shares or otherwise disposing of them under the Company's
policies regulating trading by employees and affiliates, as such policies may
then be in effect. Such policies may specify "blackout" or other designated
periods in which sales of Shares are not permitted or otherwise restrict such
sales.
6. Settlement.
(a) Generally. Settlement of Restricted Stock shall occur upon the lapse of
the Restricted Period applicable to the Restricted Stock. The Company may make
delivery of Shares hereunder in settlement of Restricted Stock by either
delivering one or more certificates representing such Shares to the Participant,
registered in the name of the Participant (and any joint name, if so directed by
the Participant), or by depositing such Shares into an account maintained for
the Participant (or of which the Participant is a joint owner, with the consent
of the Participant) 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 Participant's rights are similar in nature to those
under a stock brokerage account. If the Company determines to settle Restricted
Stock by making a deposit of Shares into such an account, the Company may settle
any fractional Share of Restricted Stock by means of such deposit. In other
circumstances 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.
3
(b) Effect of Settlement. Upon settlement of the Restricted Stock, all
obligations of the Company in respect of such Restricted Stock shall be
terminated. Any shares delivered in settlement of Restricted Stock shall no
longer be deemed Restricted Stock for purposes of the Plan or this Agreement.
(c) Avoidance of Constructive Receipt. Other provisions of this Agreement
notwithstanding, if under U.S. federal income tax laws as presently in effect or
hereafter amended (i) the timing of any settlement hereunder would result in the
Participant's constructive receipt of income relating to the Restricted Stock
prior to such settlement, the date of settlement will be the earliest date after
the specified date of settlement that settlement can be effected without
resulting in such constructive receipt; and (ii) any other rights of the
Participant with respect to the Restricted Stock shall be automatically modified
and limited to the extent necessary such that the Participant will not be deemed
to be in constructive receipt of income relating to any portion of the
Restricted Stock prior to such settlement.
7. Dividend Equivalents and Adjustments.
(a) Dividend Equivalents. If the Company pays a dividend or distribution on
Shares, Participant shall be entitled to receive credit of equivalent cash
amount on each share of Restricted Stock then credited to Participant's Account.
Unless otherwise determined by the Committee, payment of all such amounts
equivalent to dividends and distributions which would otherwise be payable to
the Participant when, as, and if declared and paid on Shares, shall be deferred
until and payable to the Participant when, as, and if the risk of forfeiture and
other restrictions on the Restricted Stock lapse under Sections 2, 5(a) or 8 in
the same proportion that the number of shares of Restricted Stock as to which
the Restrictions have lapsed bears to the total number of shares of Restricted
Stock. Unless otherwise determined by the Committee, all dividends and
distributions referred to in the immediately preceding sentence, other than
regular quarterly cash dividends (if any), shall be deemed reinvested in
additional Restricted Stock at the Fair Market Value of Shares on the date when
such dividends and distributions would be paid on Shares and such additional
Restricted Stock shall be subject to the same risk of forfeiture and other
restrictions and terms as apply to the original Restricted Stock. No interest
will be credited on any cash amount (if any) of such dividends payable at the
time of lapse of the risk of forfeiture and other restrictions. Such
Restrictions shall lapse as to the shares of additional Restricted Stock in the
same proportion that the number of shares of original Restricted Stock as to
which the Restrictions have lapsed bears to the total number of shares of
original Restricted Stock. The Administrator will determine all terms applicable
to the deemed reinvestment of dividend equivalents hereunder. A Participant
shall not be entitled to receive actual dividends in respect of Restricted Stock
prior to the issuance of Shares in settlement thereof.
(b) Adjustments The number of shares of Restricted Stock credited to
Participant's Account may be adjusted by the Committee in accordance with
Section 10(c) of the Plan. Any such adjustment shall be made taking into account
any crediting of Restricted Stock to the Participant under Section 7(a) in
connection with such transaction or event.
8. Change of Control Provisions.
(a) Acceleration of Lapse of Restricted Period. In the event of a Change of
Control at a time that Participant is employed by the Company or any of its
subsidiaries and at any time after the Grant Date, the Restricted Period
applicable to the Restricted Stock shall expire immediately prior to the Change
of Control.
(b) Definitions of Terms Relating to Change of Control. 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 8, "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
4
(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 _____________ 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 _____________ 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) 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
(iv) 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.
(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
employee 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.
9. Tax Withholding.
Unless otherwise determined by the Board or Committee, or unless the
Participant 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 (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
5
Participant may elect such other methods of satisfying such withholding
obligation as may be permitted under Rules and Regulations adopted by the
Committee and in effect at the time of settlement, which may include the
surrender of shares of the Company's common stock owned separately by
Participant. 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 set forth in Rules and Regulations adopted by the Committee and
otherwise in effect at the time of settlement.
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 Restricted Stock granted hereby, and
supersedes any prior agreements or documents with respect to such Restricted
Stock. 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 Participant with respect to the
Restricted Stock 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
Participant.
By accepting this grant of Restricted Stock, Participant agrees to the terms of
this Agreement and agrees to be bound by all the terms and provisions of the
Agreement and the Plan (as presently in effect or hereafter amended), and by all
decisions and determinations of the Committee and the Administrator.
CHARMING SHOPPES, INC.
BY:____________________________________
(Authorized Officer)
PARTICIPANT:
____________________________________
Attachments: 2004 Stock Award and Incentive Plan
6
