EXHIBIT 10.5
CHARMING SHOPPES, INC.
RESTRICTED STOCK AGREEMENT
Agreement (the "Agreement"), dated as of June 2, 2005 (the "Grant
Date") between CHARMING SHOPPES, INC. (the "Company") and Xxxxxx X. Xxxxxxxx
("Participant")
1. Grant of Restricted Stock; Consideration; Participant Acknowledgments.
The Company hereby confirms the grant on the Grant Date of 45,000
shares of Restricted Stock to the Participant. The Restricted Stock is subject
to the terms and conditions 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 employment, and his agreement to abide
by the terms set forth in this Agreement, and any Rules and Regulations
established by the Committee (as defined in Section 3 hereof) for administration
of this Agreement, 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, (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 thirty-three (33%) percent of the total number of shares of
Restricted Stock on the first anniversary of the Grant Date, an additional
thirty-three (33%) percent of the total number of shares of Restricted Stock on
the second anniversary of the Grant Date and the remaining thirty-four (34%)
percent of the total number of shares of Restricted Stock on the third
anniversary of the Grant Date, provided, however, that the Restricted Period
will lapse on an accelerated basis as provided in Section 5(a) and Section 8
hereof. 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.
3. Acceptance of Award; Administrator.
Participant hereby accepts the grant of Restricted Stock, acknowledges
receipt of this Agreement, and agrees to be bound by all the terms and
provisions hereof (as presently in effect or hereafter amended), and by all
decisions and determinations of the Board, the Compensation and Stock Option
Committee of the Board (the "Committee"), or any person or committee designated
by the Committee to administer this Agreement (the "Administrator").
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DATE OF RESTRICTED STOCK: June 2, 2005
AWARD NUMBER: ___
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 "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" or by Participant for "Good Reason," the
risk of forfeiture shall automatically lapse (i.e.,
Participant's Restricted Stock will not be forfeited); and
(iv) 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; and (B) "Cause," "Good Reason" and "Disability"
shall have the meanings ascribed to such terms in the Employment
Agreement by and between the Company and the Participant, dated as of
May 18, 2005 (the "Employment Agreement").
(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), 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
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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.
(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 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 shall be adjusted by the Committee in order to reflect any
large, special and non-recurring dividend or other distribution,
recapitalization, forward or reverse split, stock dividend, reorganization,
merger, consolidation, spin-off, combination, repurchase, share exchange,
liquidation, dissolution or other similar corporate transaction or event that
affects the stock such that an adjustment is determined by the Committee to be
appropriate. 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. Lapse of Restrictions on Change of Control.
In the event of a Change of Control of the Company or Crosstown 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. For
purposes of this Agreement, a "Change of Control" of the Company shall have the
meaning ascribed to such term in Section 6(b) of the Employment Agreement, and a
"Change of Control" of Crosstown shall have the meaning ascribed to such term in
Section 6(d) of the Employment Agreement.
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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 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. Deferred Compensation Plan.
Notwithstanding the foregoing, if Employee is eligible for and elects
to defer any of the Restricted Stock pursuant to the Charming Shoppes Variable
Deferred Compensation Plan for Executives, or a successor plan (the "Deferred
Compensation Plan"), the terms of the Deferred Compensation Plan shall govern
the timing of payment of vested Restricted Stock and dividend equivalents. The
Company and Employee acknowledge and agree that if any provisions of this
Agreement are subject to section 409A of the Internal Revenue Code of 1986, as
amended (the "Code"), the Company and Employee may take such actions as they
mutually deem appropriate to modify the terms of this Agreement so as to comply
with section 409A of the Code.
11. 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 this Agreement (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:
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Xxxxxx X. Xxxxxxxx
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