EXHIBIT 10.6
CHARMING SHOPPES, INC.
RESTRICTED STOCK AGREEMENT - ASSOCIATES
OTHER THAN SECTION 16 OFFICERS
Agreement (the "Agreement"), dated as of June ___, 2005 (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 on the Grant Date, of ______
shares of Restricted Stock. 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 or her employment, and his or her agreement to
abide by the terms set forth in this Restricted Stock Agreement (the
"Agreement"), and any Rules and Regulations under 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 third anniversary of the Date of Grant, an additional
thirty-three (33%) percent of the total number of shares of Restricted Stock on
the fourth anniversary of the Date of Grant and the remaining thirty-four (34%)
percent of the total number of shares of Restricted Stock on the fifth
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. 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").
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:
(1) 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;
(2) 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;
(3) 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 two 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;
(4) 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
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
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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.
(5) 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; (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 (D) "Competitor" shall mean (i) 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, or (ii) a chain of retail
stores with 100 or more store locations (without regard to square
footage) whose gross revenues in plus size women's apparel (sizes
14-34) exceed 5% of its total gross revenues.
(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 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.
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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. 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
(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 the Date of
Grant constitute the Board or who thereafter
are elected to the Board and whose election,
or nomination for election, to the Board
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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
the Date of Grant 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 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.
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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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Print Name:
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