CHARMING SHOPPES, INC. RESTRICTED STOCK UNITS AGREEMENT
EXHIBIT
99.1
CHARMING
SHOPPES, INC.
RESTRICTED
STOCK UNITS AGREEMENT
Agreement
(the "Agreement"), dated as of __________________________ (the "Grant Date"),
between CHARMING SHOPPES, INC. (the "Company") and ___________________ (the
"Employee").
1. Grant
of Restricted Stock Units; Consideration; Employee
Acknowledgments.
The
Company hereby confirms the grant, under the Company’s 2004 Stock Award and
Incentive Plan (the "Plan"), of __________ Restricted Stock Units pursuant
to
Section 6(e) of the Plan. The Restricted Stock Units are subject to the terms
and conditions of the Plan and this Agreement (and, in the case of any elective
deferral, the Company’s Variable Deferred Compensation Plan for Executives (the
“Deferred Compensation Plan”)). Employee is required to pay no cash
consideration for the grant of the Restricted Stock Units, but performance
of
services prior to the expiration of the risk of forfeiture relating to the
Restricted Stock Units 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
Units Agreement (the "Agree-ment"), and any Rules and Regulations under the
Plan, shall be deemed to be consideration for this grant of Restricted Stock
Units. Employee acknowledges and agrees that (i) the Restricted Stock Units
are
nontransferable as provided in Section 3(d) hereof and Sections 6(e) and
10(b)
of the Plan, (ii) the Restricted Stock Units are subject to forfeiture in
the
event of Employee's termination of employment in certain circum-stances,
as
specified in and under Section 3 hereof, and (iii) sales of shares of the
Company's common stock, par value $0.10 per share ("Shares"), following the
lapse of restrictions and settlement of the Restricted Stock Units will be
subject to the Company's policies regulating trading by employees, including
any
applicable “blackout” or other designated periods in which sales of Shares are
not permitted. .
2. Incorporation
of Plan and Deferred Compensation Plan by Reference.
The
Restricted Stock Units have been granted to Employee under the Plan, a copy
of
which is attached hereto as Exhibit A. All of the terms, conditions, and
other
provisions of the Plan are hereby incorpor-ated 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. In addition, the terms of any deferral of settlement
of
the Restricted Stock Units are governed by the Deferred Compensation Plan,
a
copy of which previously has been provided to Employee, which terms are also
incorporated herein by reference. Employee hereby accepts the grant of
Restricted Stock Units, acknowledges receipt of a copy of the Plan and the
Deferred Compensation 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 or Committee under the Plan
and
the Deferred Compensation Plan, or any person or committee designated by
the
Committee to administer the Plan (the "Administrator").
______________________________________________________________________________
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3. Restrictions
on Restricted Stock Units.
(a) Nature
of Restricted Stock Units; Restricted Period and Deferral of
Settlement.
Each
Restricted Stock Unit represents the right to receive one Share, which will
be
issued and delivered, after the lapse of the "Restricted Period" specified
in
Section 3(b) and 3(c) and 5(a) below to the extent the Restricted Stock Units
have not been forfeited, at the settlement date applicable under Section
6.
Restricted Stock Units are subject to a risk of forfeiture during such
Restricted Period and are subject to restrictions on transfer and other
conditions during the Restricted Period and the additional deferral period,
if
any. Shares of Common Stock will be issued and delivered in settlement of
Restricted Stock Units at the settlement date applicable under Section 6.
This
Award differs from awards of "restricted stock" in that such restricted stock
awards involve issuance of Shares at or shortly after grant, with such shares
subject to forfeiture (i.e., such shares must be returned to the Company
if
forfeited) during any restricted period. With respect to Restricted Stock
Units,
Employee has no voting rights or rights to actual dividends prior to the
end of
the Restricted Period, but Employee is entitled to dividend equivalents in
accordance with Section 4.
(b) Forfeiture
and Termination of Employment.
Unless
otherwise determined by the Committee, if Employee's employment terminates
and
he or she thereafter is not an employee of the Company or any of its
subsidiaries (a "Termination"), and such Termination is for any reason other
than due to death, permanent disability, Retirement or involuntary termination
by the Company for reasons other than "Cause," the Restricted Stock Units
as to
which the Restricted Period has not lapsed at or before such Termination
shall
be forfeited at the time of such Termination. Accordingly, unless otherwise
determined by the Committee, Employee's voluntary Termination (other than
due to
Retirement) or Termination by the Company for Cause will result in all
Restricted Stock Units as to which the Restricted Period has not lapsed being
immediately forfeited. Vesting and forfeiture terms applicable to other
terminations are as follows:
(i) Death
or Disability.
In the
event of Employee's Termination due to death or permanent disability, the
Restricted Period on the Restricted Stock Units shall lapse at the time of
such
Termination (i.e.,
none of
the Restricted Stock Units will be forfeited). For purposes of this Agreement,
the existence of a "permanent disability" shall be determined by, or in
accordance with criteria and standards adopted by, the Committee.
(ii) Termination
Not for Cause.
In the
event of Employee's Termination due to involuntary termination by the Company
for reasons other than "Cause," the Restricted Period on those Restricted
Stock
Units (if any) as to which the Restricted Period would have lapsed on the
next
anniversary of the Grant Date pursuant to Section 3(c) in the absence of
a
Termination (but disregarding any other event occurring prior to that next
date)
will lapse on an accelerated basis at the time of such Termination (for example,
if Termination occurs 3.5 years after the Grant Date, one additional tranche
of
the Restricted Stock Units will become non-forfeitable), so those Restricted
Stock Units will not be forfeited, and the other Restricted Stock Units as
to
which the Restricted Period has not lapsed at or before such Termination
(i.e.,
any
tranche as to which the Restricted Period would not have lapsed as scheduled
pursuant to Section 3(c) assuming continued employment through the next
anniversary of the Grant Date) shall be forfeited at the time of such
Termination.
(iii) Definition
of "Cause."
For
purposes of this Agreement, "Cause" shall mean Employee'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
Employee's control. Such neglect, refusal or failure shall be determined
in the
sole and reasonable judgment of the Committee.
(iv) Retirement.
In the
event of Employee's Termination due to Retirement, Employee's Restricted
Stock
Units will not be forfeited upon such Retirement, but instead the Restricted
Period on Employee's Restricted Stock Units shall remain in effect until
the
earlier of the time such Restricted Period shall lapse under Section 3(c)
or
5(a) or Employee's death. During such post-Retirement period during which
the
Restricted Period remains in effect, the Restricted Stock Units shall be
immediately forfeited if Employee: (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
Employee's Retirement, or if Employee 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. For purposes of this Agreement, "Retirement"
shall mean a retirement at or after Employee has attained age 62, and
"Competitor" shall mean (a) 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 (b) 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.
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(c) Expiration
of Restricted Period.
Unless
the Restric-xxx Period on Restricted Stock Units has lapsed earlier under
Section 3(b) or 5(a) or the Restricted Stock Units have been forfeited under
Section 3(b), the Restricted Period shall lapse as to thirty-three (33%)
percent
of the total number of Restricted Stock Units on the third anniversary of
the
Grant Date, an additional thirty-three (33%) percent of the total number
of
Restricted Stock Units on the fourth anniversary of the Grant Date and the
remaining thirty-four (34%) percent of the total number of Restricted Stock
Units on the fifth anniversary of the Grant Date.
(d) Nontransferability.
Restricted Stock Units and all related rights hereunder shall not be
transferable or as-signable by Employee 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, attach-ment, lien, or similar
process.
4. Employee's
Account, Dividend Equivalents and Adjustments
(a) Account.
Restricted Stock Units are bookkeeping units, and do not constitute ownership
of
Shares or any other equity security. The Company shall maintain a bookkeeping
account for Employee (the "Account") reflecting the number of Restricted
Stock
Units then credited to Employee hereunder as a result of this grant of
Restricted Stock Units and any crediting of additional Restricted Stock Units
to
Employee pursuant to payments equivalent to dividends paid on Shares under
Section 4(b) ("Dividend Equivalents").
(b) Dividend
Equivalents.
Dividend Equivalents shall be credited in accordance with the provisions
of the
Deferred Compensation Plan and the methodology specified by the Company for
crediting dividend equivalents on Share units in effect from time to time
thereunder. It is understood that the intention hereunder is that Dividend
Equivalents be credited in a manner that provides an economic benefit to
Employee equivalent to dividends on Shares without undue administrative burdens
on the Company. Accordingly, unless otherwise determined by the Company under
the Deferred Compensation Plan or by the Committee hereunder, no interest
will
be credited on any cash amount (if any) of such dividend equivalents from
the
dividend date to the time of settlement of the Restricted Stock Units. Unless
otherwise determined by the Committee, all Dividend Equivalents deemed
reinvested in additional Restricted Stock Units shall be subject to the same
risk of forfeiture, Restricted Period, and other restrictions and terms as
apply
to the original Restricted Stock Units. Employee shall not be entitled to
receive actual dividends in respect of Restricted Stock Units prior to the
issuance of Shares in settlement thereof.
(c) Adjustments
The
number of Restricted Stock Units credited to Employee's Account shall be
adjusted by the Committee, in accordance with Section 10(c) of the Plan,
in
order to preserve without enlarging Employee’s rights with respect to such
Restricted Stock Units. Any such adjustment shall be made taking into account
any crediting of Restricted Stock Units or cash to the Employee under Section
4(b) in connection with such transaction or event.
5. Change
of Control.
(a) Accelerated
Expiration of Restricted Period.
In the
event of a Change of Control at a time that Employee is employed by the Company
or any of its subsidiaries (or simultaneously with Employee's Termination)
and
after the Grant Date of the Restricted Stock Units, the Restricted Period
on the
Restricted Stock Units shall lapse immediately prior to the Change of
Control.
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(b) Definitions
of Certain Terms.
For
purposes of this Agreement, the following definitions shall apply:
(1) "Beneficial
Owner," "Beneficially Owns," and "Beneficial Ownership" shall have the meanings
ascribed to such terms for purposes of Section 13(d) of the Exchange Act
and the
rules thereunder, except that, for purposes of this Section 5, "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 Grant Date 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 the Grant Date 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
reor-gani-zation 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.
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6. Settlement.
(a) Time
of Settlement.
Settlement of Restricted Stock Units will occur as follows:
(i)
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If
Employee has not filed a valid Restricted Stock Units Deferral
Election
under the Deferred Compensation Plan by the applicable deadline
for such
filing under Section 409A of the Internal Revenue Code (the “Code”),
settlement of Restricted Stock Units will occur within 60 days
following
the lapse of the Restricted Period; provided, however, that settlement
shall comply with applicable requirements of Section 6(d) to the
extent
necessary so that no constructive receipt or tax penalty applies
to the
Employee under Code Section 409A.
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(ii)
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If
Employee has filed a valid Restricted Stock Units Deferral Election
by the
applicable deadline for such filing under Code Section 409A, settlement
of
Restricted Stock Units shall occur at the applicable date in accordance
with such Restricted Stock Units Deferral Election and other applicable
terms of the Deferred Compensation Plan, and settlement otherwise
shall
comply with applicable requirements of Section 6(d).
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(b) Manner
of Settlement.
The
Company will settle the Restricted Stock Units as follows: If settlement
is
pursuant to Section 6(a)(i) and not governed by Section 6(d), the Company
shall
make delivery of Shares hereunder in settlement of Restricted Stock Units
by
either delivering one or more certificates representing such Shares to the
Employee, registered in the name of the Employee (and any joint name, if
so
directed by the Employee), or by depositing such Shares into an account
maintained for the Employee (or of which the Employee is a joint owner, with
the
consent of the Employee) 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 Employee's rights are similar in nature to
those
under a stock brokerage account. If settlement is pursuant to Section 6(a)(ii)
or otherwise governed by Section 6(d), the Company shall make delivery of
Shares
hereunder in settlement of Restricted Stock Units at the time and in such
manner
as is specified under the Deferred Compensation Plan. In all cases, if the
Company determines to settle Restricted Stock Units by making a deposit of
Shares into an account maintained for the Employee, the Company may settle
any
fractional Restricted Stock Unit by means of such deposit. In other
circumstan-ces 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.
(c) Effect
of Settlement.
Upon
settlement of the Restricted Stock Units, all obligations of the Company
in
respect of such Restricted Stock Units shall be terminated.
(d) Avoidance
of Constructive Receipt.
Other
provisions of this Agreement notwithstanding, under Code Section 409A or
any
other U.S. federal income tax law as presently in effect or hereafter amended
(i) if the timing of any settlement hereunder would result in a distribution
of
Shares to Employee at a time that Employee is a “Specified Employee” under Code
Section 409A(a)(2)(B)(i) (i.e., a “key” employee) and precluded under Code
Section 409A from then receiving the distribution, such settlement shall
be
delayed in accordance with Section 7.2(c) of the Deferred Compensation Plan
(but
without any effect on the timing of any settlement that otherwise would occur
six months or more after Employee’s separation from service within the meaning
of Code Section 409A); (ii) any distribution in settlement of the Restricted
Stock Units that is triggered by a termination of employment hereunder will
occur only at such time as Employee has had a “separation from service” as
defined in Proposed Treasury Regulation § 1.409A-1(h) (and any successor
regulation) regardless of whether any other event might be viewed as a
termination of employment by the Company for any other purpose; (iii) the
Company shall have no power or authority to accelerate the distribution and
settlement of the Restricted Stock Units except to the extent such acceleration
is permitted under Code Section 409A; (iv) all other requirements of Code
Section 409A and regulations thereunder (including proposed regulations)
shall
apply to the extent necessary so that Employee is not subject to constructive
receipt of income under Code Section 409A prior to the actual distribution
of
Restricted Stock Units hereunder or to tax penalties under Code Section 409A;
and (v) other restrictions and limitations under the Deferred Compensation
Plan
with respect to distributions apply to the Restricted Stock Units subject
to
Code Section 409A whether or not the Restricted Period has yet lapsed.
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7. Tax
Withholding.
Unless
otherwise determined by the Board or Committee, or unless the Employee 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 Units (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 Employee may elect such other methods
of
satisfying such withholding obligation as may be permitted under the Deferred
Compensation Plan and in effect at the time of settlement. 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 determined by the Committee
and
otherwise in effect at the time of settlement, including under the Deferred
Compensation Plan.
8. 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 Units granted hereby,
and supersedes any prior agreements or documents with respect to such Restricted
Stock Units. 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 Employee with
respect to the Restricted Stock Units 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 Employee.
By
accepting this grant of Restricted Stock Units, Employee agrees to the terms
of
this Agreement and agrees to be bound by all the terms and provisions of
the
Agreement, the Plan (as presently in effect or hereafter amended), and the
Deferred Compensation Plan, and by all decisions and determinations of the
Committee and the Administrator.
CHARMING
SHOPPES, INC.
BY:______________________________________
Xxxxx
X.
Xxxxx
Executive
Vice President
EMPLOYEE:
______________________________________
«first» «last»
Attachment:
Exhibit
A
- 2004 Stock Award and Incentive Plan
(docs/2004
Plan RSU Agmt - 12-05)
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