EXHIBIT 10.2.31
Executive Severance
Agreement for [NAME]
Charming Shoppes, Inc.
February 2003
Contents
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Article 1. Establishment, Term, and Purpose 1
Article 2. Definitions 2
Article 3. Severance Benefits 6
Article 4. Form and Timing of Severance Benefits 8
Article 5. Excise Tax Treatment 8
Article 6. The Company's Payment Obligation 10
Article 7. Legal Remedies 11
Article 8. Outplacement Assistance 11
Article 9. Successors and Assignment 11
Article 10. Miscellaneous 12
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Charming Shoppes, Inc.
Executive Severance Agreement
THIS AGREEMENT is made and entered into as of the 6th day of February, 2003
(the "Effective Date"), by and between Charming Shoppes, Inc. (hereinafter
referred to as the "Company") and [NAME] (hereinafter referred to as the
"Executive").
WHEREAS, the Board of Directors of the Company has approved the Company
entering into severance agreements with certain key executives of the Company;
WHEREAS, the Executive is a key executive of the Company;
WHEREAS, should the possibility of a Change in Control of the Company
arise, the Board believes it is imperative that the Company and the Board should
be able to rely upon the Executive to continue in his position, and that the
Company should be able to receive and rely upon the Executive's advice, if
requested, as to the best interests of the Company and its shareholders without
concern that the Executive might be distracted by the personal uncertainties and
risks created by the possibility of a Change in Control; and
WHEREAS, should the possibility of a Change in Control arise, in addition
to his regular duties, the Executive may be called upon to assist in the
assessment of such possible Change in Control, advise management and the Board
as to whether such Change in Control would be in the best interests of the
Company and its shareholders, and to take such other actions as the Board might
determine to be appropriate.
NOW THEREFORE, to assure the Company that it will have the continued
dedication of the Executive and the availability of his advice and counsel
notwithstanding the possibility, threat, or occurrence of a Change in Control of
the Company, and to induce the Executive to remain in the employ of the Company,
and for other good and valuable consideration, the Company and the Executive
agree as follows:
Article 1. Establishment, Term, and Purpose
This Agreement will commence on the Effective Date and shall continue in
effect for three (3) full years (i.e., until the day before the third
anniversary of the Effective Date). However, at the end of such three (3) year
period and at the end of each additional year thereafter, the term of this
Agreement shall be extended automatically for one (1) additional year, unless
the Committee delivers written notice six (6) months prior to the end of such
term, or extended term, to each Executive, that the Agreement will not be
extended. In such case, the Agreement will terminate at the end of the term, or
extended term, then in progress.
However, in the event a Change in Control occurs during the original or any
extended term, this Agreement will remain in effect for the longer of: (i)
twenty-four (24) months beyond the month in which such Change in Control
occurred; or (ii) until all obligations of the Company hereunder have been
fulfilled, and until all benefits required hereunder have been paid to the
Executive.
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Article 2. Definitions
Whenever used in this Agreement, the following terms shall have the
meanings set forth below and, when the meaning is intended, the initial letter
of the word is capitalized.
2.1 "Base Salary" means the salary of record paid to an Executive as annual
salary, excluding amounts received under incentive or other bonus plans, whether
or not any such salary or other amounts are deferred.
2.2 "Beneficial Owner" shall have the meaning ascribed to such term in Rule
13d-3 of the General Rules and Regulations under the Exchange Act and shall
include related terms such as "Beneficial Ownership."
2.3 "Beneficiary" means the persons or entities designated or deemed
designated by the Executive pursuant to Section 10.2 herein.
2.4 "Board" means the Board of Directors of the Company.
2.5 "Cause" means: (a) the Executive's willful and continued failure to
substantially perform his duties with the Company (other than any such failure
resulting from Disability or occurring after issuance by the Executive of a
Notice of Termination for Good Reason), after a written demand for substantial
performance is delivered to the Executive that specifically identifies the
manner in which the Company believes that the Executive has willfully failed to
substantially perform his duties, and after the Executive has failed to resume
substantial performance of his duties on a continuous basis within thirty (30)
calendar days of receiving such demand; (b) the Executive's willfully engaging
in conduct (other than conduct covered under (a) above) which is demonstrably
and materially injurious to the Company, monetarily or otherwise; or (c) the
Executive's having been convicted of a felony. For purposes of this
subparagraph, no act, or failure to act, on the Executive's part shall be deemed
"willful" unless done, or omitted to be done, by the Executive not in good faith
and without reasonable belief that the action or omission was in the best
interests of the Company.
2.6 "Change in Control" of the Company shall be deemed to have occurred as
of the first day after the Effective Date that any one or more of the following
conditions is satisfied:
(a) Any Person, other than the Company or a Related Party, acquires
directly or indirectly the Beneficial Ownership of any Voting Security
and immediately after such acquisition such Person has directly or
indirectly, the Beneficial Ownership of Voting Securities representing
twenty percent (20%) or more of the total voting power of all the
then-outstanding Voting Securities; or
(b) During any period of two (2) consecutive years, individuals who at the
beginning of such period constitute the Board of Directors and any new
director (other than a director designated by a person who has entered
into an agreement with the Company to effect a transaction described
in paragraph (a) or (c) of this section) whose election by the Board
of Directors or nomination of election by the Company's stockholders
was approved by a
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vote of at least two-thirds (2/3) of the directors then still in
office who either were directors at the beginning of the period or
whose election or nomination for election was previously so approved,
cease for any reason to constitute two-thirds (2/3) of the Board; or
(c) 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 eighty percent (80%) 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 sixty percent (60%)
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
(d) 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 fifty percent (50%) of the assets owned by the
Company immediately prior to the transaction.
However, in no event shall a Change in Control be deemed to have occurred,
with respect to the Executive, if the Executive is part of a purchasing group
which consummates the Change-in-Control transaction. The Executive shall be
deemed "part of a purchasing group" for purposes of the preceding sentence if
the Executive is an equity participant in the purchasing company or group
(except for: (i) passive ownership of less than three percent (3%) of the stock
of the purchasing company; or (ii) ownership of equity participation in the
purchasing company or group which is otherwise not significant, as determined
prior to the Change in Control by a majority of the nonemployee continuing
Directors).
2.7 "Code" means the United States Internal Revenue Code of 1986, as
amended, and any successors thereto.
2.8 "Committee" means the Compensation Committee of the Board or any other
committee appointed by the Board to perform the functions of the Compensation
Committee.
2.9 "Company" means Charming Shoppes, Inc., a Pennsylvania corporation, or
any successor thereto as provided in Article 9 herein. If the Executive is an
officer of Charming Shoppes of Delaware, Inc. and/or any other subsidiary,
direct or indirect, of Charming Shoppes, Inc. only, or an officer of any or all
of Charming Shoppes of Delaware, Inc., Charming Shoppes, Inc., and/or any other
subsidiary, direct or indirect, of Charming Shoppes, Inc., the word "Company"
shall be deemed to include not only Charming Shoppes, Inc. but also Charming
Shoppes of Delaware, Inc., and/or such other subsidiary, direct or indirect, of
Charming Shoppes, Inc., as applicable, with
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respect to employment matters, including termination of employment, where
appropriate. References to the "Company" with respect to a Change in Control and
matters incidental to the determination of a Change in Control relate only to
Charming Shoppes, Inc.
2.10 "Disability" means complete and permanent inability by reason of
illness or accident to perform the duties of the occupation at which the
Executive was employed when such disability commenced.
2.11 "Effective Date" means the date of this Agreement set forth above.
2.12 "Effective Date of Termination" means the date on which a Qualifying
Termination occurs which triggers the payment of Severance Benefits hereunder.
2.13 "Exchange Act" means the United States Securities Exchange Act of
1934, as amended.
2.14 "Good Reason" shall mean, without the Executive's express written
consent, the occurrence of any one or more of the following:
(a) The assignment of the Executive to duties materially inconsistent with
the Executive's authorities, duties, responsibilities, and status
(including offices and reporting requirements) as an employee of the
Company, or a reduction or alteration in the nature or status of the
Executive's authorities, duties, or responsibilities from the greatest
of: (i) those in effect on the Effective Date; (ii) those in effect
during the fiscal year immediately preceding the year of the Change in
Control; or (iii) those in effect immediately preceding the Change in
Control;
(b) The Company's requiring the Executive to be based at a location which
is at least fifty (50) miles farther from the current primary
residence than is such residence from the Company's current
headquarters, except for required travel on the Company's business to
an extent substantially consistent with the Executive's business
obligations as of the Effective Date;
(c) A reduction by the Company in the Executive's Base Salary as in effect
on the Effective Date or as the same shall be increased from time to
time or a failure by the Company to pay to the Executive any portion
of his compensation or any installment of deferred compensation under
any plan or program of the Company within thirty (30) days after the
date such payment is due;
(d) A material reduction in the Executive's level of participation and
compensation opportunities in any of the Company's short- and/or
long-term incentive compensation plans, or employee benefit or
retirement plans, policies, practices, or arrangements in which the
Executive participates from the greatest of the levels in place on:
(i) the Effective Date; (ii) the fiscal year immediately preceding the
Change in Control; or (iii) immediately preceding the Change in
Control; provided, however, that reductions in the levels of
participation in any such plans shall not be deemed to be "Good
Reason" if the Executive's reduced level of participation in each such
program remains substantially
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consistent with the average level of participation of other executives
of the Company, any Person who then controls the Company, and any
persons who have positions commensurate with the Executive's position;
(e) The failure of the Company to obtain a satisfactory agreement from any
successor to the Company to assume and agree to perform this
Agreement, as contemplated in Article 9 herein; or
(f) Any purported termination of Executive's employment by the Company
that is not effected pursuant to a Notice of Termination.
The existence of Good Reason shall not be affected by the Executive's
temporary incapacity due to physical or mental illness not constituting a
Disability. The Executive's Retirement shall constitute a waiver of the
Executive's rights with respect to any circumstance constituting Good Reason.
The Executive's continued employment shall not constitute a waiver of the
Executive's rights with respect to any circumstance constituting Good Reason.
2.15 "Notice of Termination" shall mean a written notice which shall
indicate the specific termination provision in this Agreement relied upon, and
shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Executive's employment under the
provision so indicated.
2.16 "Person" shall have the meaning ascribed to such term in Section
3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof,
including a "group" as provided in Section 13(d).
2.17 "Qualifying Termination" means any of the events described in Section
3.2 herein, the occurrence of which triggers the payment of Severance Benefits
hereunder.
2.18 "Related Party" means (a) a majority-owned subsidiary of the Company;
or (b) a trustee or other fiduciary holding securities under an employment plan
of the Company or any majority-owned subsidiary; or (c) a corporation owned
directly or indirectly by the shareholders of the Company in substantially the
same proportion as their ownership of Voting Securities.
2.19 "Retirement" means the Executive's voluntary termination of employment
in a manner which qualifies the Executive to receive immediately payable
retirement benefits under the Company's tax-qualified retirement plan or under
the successor or replacement of such retirement plan if it is then no longer in
effect. The term "Retirement" shall not mean a termination of the Executive's
employment under circumstances which constitute Good Reason or that constitute
an involuntary termination of the Executive's employment by the Company.
2.20 "Severance Benefits" means the payment of severance compensation as
provided in Section 3.3 herein.
2.21 "Voting Securities" means any securities of the Company which carry
the right to vote generally in the election of directors.
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Article 3. Severance Benefits
3.1 Right to Severance Benefits. The Executive shall be entitled to receive
from the Company Severance Benefits, as described in Section 3.3 herein, if
there has been a Change in Control of the Company and if, within twenty-four
(24) calendar months following the Change in Control, a Notice of Termination
for a Qualifying Termination of the Executive has been delivered.
The Executive shall not be entitled to receive Severance Benefits if he is
terminated for Cause, or if his employment with the Company ends due to death,
Disability, or Retirement or due to a voluntary termination of employment by the
Executive without Good Reason.
3.2 Qualifying Termination. The occurrence of any one or more of the
following events (as evidenced by a Notice of Termination) shall trigger the
payment of Severance Benefits to the Executive under this Agreement:
(a) An involuntary termination of the Executive's employment by the
Company for reasons other than Cause within twenty-four (24) calendar
months following the end of the month in which a Change in Control of
the Company occurred as evidenced by a Notice of Termination delivered
by the Executive to the Company;
(b) A voluntary termination by the Executive for Good Reason within
twenty-four (24) calendar months following the end of the month in
which a Change in Control of the Company occurred as evidenced by a
Notice of Termination delivered to the Company by the Executive; or
(c) The Company or any successor company breaches any of the provisions of
this Agreement.
3.3 Description of Severance Benefits. In the event the Executive becomes
entitled to receive Severance Benefits, as provided in Sections 3.1 and 3.2
herein, the Company shall pay to the Executive and provide him with the
following:
(a) An amount equal to two (2) times the highest rate of the Executive's
annualized Base Salary in effect at any time from his initial date of
employment with the Company up to and including the Effective Date of
Termination.
(b) An amount equal to two (2) times the Executive's highest targeted
annual incentive award established for any plan year from his initial
date of employment with the Company up to and including the year in
which the Executive's Effective Date of Termination occurs, regardless
of whether the targeted annual incentive award was earned.
(c) An amount equal to the Executive's unpaid targeted annual incentive
award, established for the year in which the Executive's Effective
Date of Termination occurs, multiplied by a fraction, the numerator of
which is the number of completed days in the then-existing fiscal year
through the Effective Date of Termination, and the denominator of
which is three hundred sixty-five (365);
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(d) An amount equal to the Executive's unpaid Base Salary, accrued
vacation pay, and earned but not taken vacation pay through the
Effective Date of Termination.
(e) A continuation of the welfare benefits of health care, life and
accidental death and dismemberment, and disability insurance coverage
for two (2) full years after the Effective Date of Termination. These
benefits shall be provided to the Executive at the same coverage
level, as in effect as of the Executive's Effective Date of
Termination or, if greater, as in effect 90 days prior to the date of
the Change in Control, and at the same premium cost to the Executive
which was paid by the Executive at the time such benefits were
provided. However, in the event the premium cost and/or level of
coverage shall change for all employees of the Company, or for
management employees with respect to supplemental benefits, the cost
and/or coverage level, likewise, shall change for the Executive in a
corresponding manner.
The continuation of these welfare benefits shall be discontinued prior
to the end of the two (2) year period in the event the Executive has
available substantially similar benefits at a comparable cost to the
Executive from a subsequent employer, as determined by the Committee.
Incentive awards granted under the incentive arrangements adopted by the
Company shall be treated pursuant to the terms of the applicable plan.
The aggregate benefits accrued by the Executive as of the Effective Date of
Termination under the Charming Shoppes, Inc., and other savings and retirement
plans sponsored by the Company, shall be distributed pursuant to the terms of
the applicable plan.
Compensation which has been deferred under the Charming Shoppes Variable
Deferred Compensation Plan or other plans sponsored by the Company, as
applicable, together with all interest that has been credited with respect to
any such deferred compensation balances, shall be distributed pursuant to the
terms of the applicable plan.
3.4 Termination for Disability. Following a Change in Control of the
Company, if an Executive's employment is terminated due to Disability, the
Executive shall receive his Base Salary and accrued vacation through the
Effective Date of Termination, at which point in time the Executive's benefits
shall be determined in accordance with the Company's disability, retirement,
insurance, and other applicable plans and programs then in effect. In the event
the Executive's employment is terminated due to Disability, the Executive shall
not be entitled to the Severance Benefits described in Section 3.3.
3.5 Termination for Retirement or Death. Following a Change in Control of
the Company, if the Executive's employment is terminated by reason of his
Retirement or death, the Executive's benefits shall be determined in accordance
with the Company's retirement, survivor's benefits, insurance, and other
applicable programs of the Company then in effect. In the event the Executive's
employment is terminated by reason of his Retirement or death, the Executive
shall not be entitled to the Severance Benefits described in Section 3.3.
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3.6 Termination for Cause, or Other Than for Good Reason or Retirement.
Following a Change in Control of the Company, if the Executive's employment is
terminated either: (a) by the Company for Cause; or (b) by the Executive (other
than for Retirement, Good Reason, or under circumstances giving rise to a
Qualifying Termination described in Section 3.2(c) herein), the Company shall
pay the Executive his full Base Salary and accrued vacation through the
Effective Date of Termination, at the rate then in effect, plus all other
amounts to which the Executive is entitled under any compensation plans of the
Company, at the time such payments are due, and the Company shall have no
further obligations to the Executive under this Agreement.
3.7 Notice of Termination. Any termination of employment by the Company or
by the Executive for Good Reason shall be communicated by a Notice of
Termination.
Article 4. Form and Timing of Severance Benefits
4.1 Form and Timing of Severance Benefits. The Severance Benefits described
in Sections 3.3(a), 3.3(b), 3.3(c), and 3.3(d) herein shall be paid in cash to
the Executive in a single lump sum as soon as practicable following the
Effective Date of Termination, but in no event beyond thirty (30) days from such
date.
4.2 Withholding of Taxes. The Company shall be entitled to withhold from
any amounts payable under this Agreement all taxes as legally shall be required
to be withheld (including, without limitation, any United States federal taxes
and any other state, city, or local taxes).
Article 5. Excise Tax Treatment
5.1 Excise Tax Equalization Payment. In the event that a Change in Control
occurs and the Executive becomes entitled to any benefits or payments under this
Agreement, or any other plan, arrangement, or agreement with the Company (the
"Total Payments"), and such benefits or payments will be subject to the tax (the
"Excise Tax") imposed by Section 4999 of the Code (or any similar tax that may
hereafter be imposed), the Company shall pay to the Executive in cash an
additional amount (the "Gross-Up Payment") such that the net amount to be
retained by the Executive after deduction of any Excise Tax upon the Total
Payments and any Federal, state and local income tax and Excise Tax upon the
Gross-Up Payment provided for by this Section 5.1 (including FICA), shall be
equal to the Total Payments. Such payment shall be made by the Company to the
Executive as soon as practical following the effective date of termination, but
in no event beyond thirty (30) days from such date, or in the event Excise Tax
is due without regard to a termination, within thirty (30) days of the due date
for payment of such Excise Tax.
5.2 Tax Computation. In determining the potential impact of the Excise Tax,
the Company may rely on any advice it deems appropriate, including, but not
limited to, the counsel of its independent auditors. For purposes of determining
whether any of the Total Payments will be subject to the Excise Tax and the
amounts of such Excise Tax:
(a) Any other payments or benefits received or to be received by the
Executive in connection with a Change in Control of the Company or the
Executive's termination of employment (whether pursuant to the terms of this
Agreement or any other plan, arrangement, or agreement with the Company, or with
any Person whose actions result in a Change in Control of the Company or
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any Person affiliated with the Company or such Persons) shall be treated as
"parachute payments" within the meaning of Section 280G(b)(2) of the Code, and
all "excess parachute payments" within the meaning of Section 280G(b)(1) shall
be treated as subject to the Excise Tax, unless in the opinion of the Company's
advisors, including, but not limited to, its independent auditors, any portion
of the Total Payments do not constitute parachute payments, by reason of Section
280G(b)(4)(A)-(B) of the Code, or are otherwise not subject to the Excise Tax;
(b) The amount of the Total Payments which shall be treated as subject to
the Excise Tax shall be equal to the amount of excess parachute payments within
the meaning of Section 280G(b)(1) of the Code (after applying clause (a) above);
and
(c) The value of any non-cash benefits or any deferred or accumulated
payment or benefit shall be determined by the Company's independent auditors in
accordance with the principles of Sections 280G(d)(3) and (4) of the Code.
For purposes of determining the amount of the Gross-Up Payment, the
Executive shall be deemed to pay Federal income taxes at the highest marginal
rate of Federal income taxation in the calendar year in which the Gross-Up
Payment is to be made, and state and local income taxes at the highest marginal
rate of taxation in the state and locality of the Executive's residence on the
Effective Date of Termination, net of the maximum reduction in Federal income
taxes which could be obtained from deduction of such state and local taxes.
5.3 Subsequent Recalculation. In the event the Internal Revenue Service
proposes to increase the amount of Excise Tax payable by the Executive in excess
of the computation of the Company under Section 5.2 herein so that the Executive
did not receive the greatest net benefit, the Company shall reimburse the
Executive for the full amount necessary to make the Executive whole, plus a
market rate of interest, as determined by the Committee; provided, however, that
the Executive follow the procedures set forth in this Section 5.3.
The Executive shall notify the Company in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment by the
Company of the Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than ten (10) business days after the later of either:
(i) the date the Executive has actual knowledge of such claim, or (ii) ten (10)
days after the Internal Revenue Service issues to the Executive either a written
report proposing imposition of the Excise Tax or a statutory notice of
deficiency with respect thereto, and shall apprise the Company of the nature of
such claim and the date on which such claim is requested to be paid. The
Executive shall not pay such claim prior to the expiration of the thirty (30)
day period following the date on which it gives such notice to the Company (or
such shorter period ending on the date that any payment of taxes with respect to
such claim is due). If the Company notifies the Executive in writing prior to
the expiration of such period that it desires to contest such claim, the
Executive shall:
(a) Give the Company any information reasonably requested by the Company
relating to such claim;
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(b) Take such action in connection with contesting such claim as the
Company shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with
respect to such claim by an attorney reasonably selected by the
Company;
(c) Cooperate with the Company in good faith in order effectively to
contest such claim; and
(d) Permit the Company to participate in any proceedings relating to such
claims.
Provided, however, that the Company shall directly bear and pay all costs
and expenses (including additional interest and penalties) incurred in
connection with such contest and shall indemnify and hold the Executive
harmless, on an after-tax basis, for any Excise Tax or income tax, including
interest and penalties with respect thereto, imposed and payment of costs and
expenses. Without limitation of the foregoing provisions of this Section 5.3,
the Company shall control all proceedings taken in connection with such contest
and, at its sole option, may pursue or forego any and all administrative
appeals, proceedings, hearings, and conferences with the taxing authority in
respect of such claim.
If the Company does not notify the Executive in writing prior to the
expiration of such thirty (30) day period that it desires to contest such claim,
the Company shall reimburse the Executive for the full amount necessary to make
the Executive whole, plus a market rate of interest, as determined by the
Committee, all as contemplated by this Section 5.3.
If, after the receipt by the Executive of an amount advanced by the Company
pursuant to this Article 5.3, the Executive receives a refund with respect to
such claim due to an overpayment of Excise Tax, including interest and penalties
with respect thereto, the Executive shall (subject to the Company's complying
with the requirements of this Section 5.3) promptly pay to the Company the
amount of such refund (together with any interest paid or credited thereon after
taxes applicable thereto).
Article 6. The Company's Payment Obligation
The Company's obligation to make the payments and the arrangements provided
for herein shall be absolute and unconditional, and shall not be affected by any
circumstances, including, without limitation, any offset, counterclaim,
recoupment, defense, or other right which the Company may have against the
Executive or anyone else. All amounts payable by the Company hereunder shall be
paid without notice or demand. Each and every payment made hereunder by the
Company shall be final, and the Company shall not seek to recover all or any
part of such payment from the Executive or from whomsoever may be entitled
thereto, for any reasons whatsoever.
The Executive shall not be obligated to seek other employment in mitigation
of the amounts payable or arrangements made under any provision of this
Agreement, and the obtaining of any such other employment shall in no event
effect any reduction of the Company's obligations to make the payments and
arrangements required to be made under this Agreement, except to the extent
provided in Section 3.3(e) herein.
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Article 7. Legal Remedies
7.1 Payment of Legal Fees. To the extent permitted by law, the Company
shall pay all legal fees, costs of litigation, prejudgment interest, and other
expenses incurred in good faith by the Executive as a result of the Company's
refusal to provide the Severance Benefits to which the Executive becomes
entitled under this Agreement, or as a result of the Company's contesting the
validity, enforceability, or interpretation of this Agreement, or as a result of
any conflict (including conflicts related to the calculation of parachute
payments) between the parties pertaining to this Agreement, subject to an
overall limit on the payment of legal fees of thirty-five thousand dollars
($35,000).
7.2 Arbitration. Any dispute or controversy arising under or in connection
with this Agreement shall be settled by arbitration, conducted before a panel of
three (3) arbitrators sitting in a location selected by the Executive within
fifty (50) miles from the location of his employment with the Company, in
accordance with the rules of the American Arbitration Association then in
effect.
Judgment may be entered on the award of the arbitrator in any court having
proper jurisdiction. All expenses of such arbitration, including the fees and
expenses of the counsel for the Executive, shall be borne by the Company.
Article 8. Outplacement Assistance
Following a Qualifying Termination (as described in Section 3.2 herein),
the Executive shall be reimbursed by the Company for the costs of all
outplacement services obtained by the Executive within the two (2) year period
after the Effective Date of Termination, provided, however, that the total
reimbursement shall be limited to an amount equal to thirty thousand dollars
($30,000).
Article 9. Successors and Assignment
9.1 Successors to the Company. The Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation, or otherwise)
of all or substantially all of the business and/or assets of the Company or of
any division or subsidiary thereof to expressly assume and agree to perform the
Company's obligations under this Agreement in the same manner and to the same
extent that the Company would be required to perform them if no such succession
had taken place. The date on which any such succession becomes effective shall
be deemed to be the date of the Change in Control.
9.2 Assignment by the Executive. This Agreement shall inure to the benefit
of and be enforceable by the Executive's personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees, and
legatees. If the Executive dies while any amount would still be payable to him
hereunder had he continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement to the
Executive's Beneficiary. If the Executive has not named a Beneficiary, then such
amounts shall be paid to the Executive's devisee, legatee, or other designee, or
if there is no such designee, to the Executive's estate.
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Article 10. Miscellaneous
10.1 Employment Status. Except as may be provided under any other agreement
between the Executive and the Company, the employment of the Executive by the
Company is "at will," and may be terminated by either the Executive or the
Company at any time, subject to applicable law.
10.2 Beneficiaries. The Executive may designate one or more persons or
entities as the primary and/or contingent Beneficiaries of any Severance
Benefits owing to the Executive under this Agreement. Such designation must be
in the form of a signed writing acceptable to the Committee. The Executive may
make or change such designations at any time.
10.3 Severability. In the event any provision of this Agreement shall be
held illegal or invalid for any reason, the illegality or invalidity shall not
affect the remaining parts of the Agreement, and the Agreement shall be
construed and enforced as if the illegal or invalid provision had not been
included. Further, the captions of this Agreement are not part of the provisions
hereof and shall have no force and effect.
10.4 Modification. No provision of this Agreement may be modified, waived,
or discharged unless such modification, waiver, or discharge is approved by the
Committee and agreed to in writing and signed by the Executive and by an
authorized officer of the Company, or by the respective parties' legal
representatives and successors.
10.5 Applicable Law. To the extent not preempted by the laws of the United
States, the laws of the state of Pennsylvania shall be the controlling law in
all matters relating to this Agreement.
10.6 Disclosure of Information. The Executive recognizes that he has access
to and knowledge of certain confidential and proprietary information of the
Company which is essential to the performance of his duties under this
Agreement. The Executive will not, during or after the term of his employment by
the Company, in whole or in part, disclose such information to any person, firm,
corporation, association, or other entity for any reason or purpose whatsoever,
nor shall he make use of any such information for his 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 legal
process.
10.7 Covenants Regarding Other Employees. During the term of this
Agreement, and for a period of twenty-four (24) months following the Effective
Date of Termination, the Executive agrees not to attempt to induce any employee
of the Company to terminate his or her employment with the Company or to
interfere in a similar manner with the business of the Company.
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10.8 Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be an original
hereof, and it shall not be necessary in making proof of this Agreement to
produce or account for more than one counterpart hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement on this ______
day of _______________ , 2003.
CHARMING SHOPPES, INC. EXECUTIVE
------------------------------- --------------------------------
Xxxxxx X. Xxxx [NAME]
Its: President and Chief Executive Officer
ATTEST:________________________
Xxxxx X. Xxxxx
Secretary
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