EXHIBIT 10.12
CHARMING SHOPPES,
INC.
2003 Non-Employee Directors
Compensation Plan
Amended and Restated Effective
May 1, 2009
1.
Purpose and Scope of the Plan .
(a)
Purpose. The purpose of this 2003 Non-Employee
Directors Compensation Plan (the "Plan") of Charming Shoppes, Inc.
(the "Company") is to advance the interests of the Company and its
shareholders by providing for fair and adequate equity compensation
of non-employee directors and an opportunity for deferral of
compensation in order to attract and retain high quality persons to
serve as directors and to enable such persons to increase their
proprietary interest in the Company. In furtherance of
this purpose, the Plan provides for grants of Options, Stock
Appreciation Rights, Restricted Share Units, and/or Restricted
Stock, and the opportunity for a director to elect deferred and
alternative forms of compensation in lieu of cash
fees for service as a director, including Deferred Shares and
deferred cash.
(b)
Effect of Amendment and Restatement of the Plan
. The Company hereby amends and restates the Plan,
effective May 1, 2009 (the "Effective Date"). The Plan was
initially adopted on August 21, 1996 and was subsequently amended
and restated on several occasions. Non-employee director
compensation paid or granted before May 7, 2008 was governed by the
Plan and other policies of the Company then in effect, except that
Section 4 hereof applies to any outstanding Deferred Shares,
Section 6(a) applies to any outstanding Restricted Stock and
Section 6(b) applies to RSUs granted in 2007 and
thereafter.
(c)
Grandfathered Accounts. The amendment and
restatement of January 1, 2005 and subsequent amendments to the
Plan shall not affect Grandfathered Accounts (as defined below),
which shall continue to be subject to, and governed by, the terms
and conditions of the Plan as in effect on December 31,
2004.
(d)
Relation of Plan to Other Director Compensation. The amount,
timing, and other terms of cash compensation that may be paid by
the Company to non-employee directors are not governed by this
Plan, except for cash-settled equity awards hereunder and except to
the extent that opportunities for deferral of cash compensation
otherwise payable to a director, or receipt of such cash
compensation in alternative forms, may be made available to a
director under this Plan. In addition, adoption of the
Plan does not limit the authority of the Board of Directors in
adopting other compensation programs in which directors may
participate.
2.
Definitions. In addition to the terms defined in
Section 1, the following terms shall be defined as set forth
below:
(a) "Account"
means the account established and maintained by the Company for
RSUs granted under Section 6 and Deferred Shares and deferred cash
credited under Section 8. A subaccount for RSUs and a
subaccount for such Deferred Shares and deferred cash may be
designated within the Account. The Account and RSUs,
Deferred Shares and deferred cash credited to the Account will be
maintained solely as bookkeeping entries by the Company to evidence
unfunded obligations of the Company.
(b) "Administrator"
means the individual or committee specified in Section 3(b) to whom
the Board has delegated authority to administer the
Plan.
(c) "Beneficiary"
means the person(s) or trust(s) which have been designated by a
Participant in his or her most recent written beneficiary
designation filed with the Administrator to receive the benefits
specified under the Plan upon such Participant's
death. If, upon a Participant's death, there is no
designated Beneficiary or surviving designated Beneficiary, then
the term Beneficiary means the person(s) or trust(s) entitled by
will or the laws of descent and distribution to receive such
benefits.
(d) "Board"
means the Board of Directors of the Company. The Board
may delegate its functions to a committee of the Board as specified
under Section 3(a), in which case references to the Board shall be
deemed to include such committee.
(e) "Change
in Control" and related terms are defined in Section 12.
(f) "Code"
means the Internal Revenue Code of 1986, as amended, including
regulations thereunder and successor provisions and regulations
thereto.
(g) "Deferred
Shares" means a Share Unit credited to a Participant's Account
under Section 8 as a result of deferral of cash fees or other
deferral permitted hereunder.
(h) "Director
Compensation" means annual retainer fees payable to a director in
his or her capacity as such for service on the Board and service as
chairman of any Board committee, and any other fees payable to a
director in his or her capacity as such for attending meetings and
other service on the Board and Board committees; provided, however,
that the Administrator may determine that specific fees will not be
deemed Director Compensation (such determination to be made in
advance of the applicable deadline for deferral of fees) and may
determine that cash paid in settlement of Cash-Settled RSUs will be
deemed to be Director Compensation. Reimbursement of
expenses does not constitute Director Compensation.
(i) "Disability"
means a Participant's termination of service as a director of the
Company due to a physical or mental incapacity of long duration
which renders the Participant unable to perform the duties of a
director of the Company.
(j) "Exchange
Act" means the Securities Exchange Act of 1934, as amended,
including rules thereunder and successor provisions and rules
thereto.
(k) "Grandfathered
Account" means that portion of a Participant's Account that was
earned and vested as of December 31, 2004, and shall include
earnings (including dividends paid in accordance with Section 13(b)
and dividends and dividend equivalents paid in accordance with
Section 9(a)) credited to such amount under the terms of the
Plan. All Grandfathered Accounts shall be calculated in
accordance with Section 409A of the Code. The Company
shall maintain a separate record of Grandfathered
Accounts.
(l) "Fair
Market Value" means, with respect to Shares, the fair market value
of such Shares determined by such methods or procedures as shall be
established from time to time by the Board. Unless
otherwise determined by the Board, the Fair Market Value of a Share
as of any given date means the closing sale price of a Share
reported on the Nasdaq Global Select Market (or, if Shares are then
principally traded on a national securities exchange, in the
reported "composite transactions" for such exchange) for such date,
or, if no Shares were traded on that date, on the next preceding
day on which there was such a trade.
(m) “Mandatory
Retirement” means the termination of a director's service in
accordance with any mandatory retirement policy adopted by the
Board of Directors and then in effect.
(n) "Option"
means the right, granted to a Participant under Section 7, to
purchase a specified number of Shares at the specified exercise
price for a specified period of time under the Plan. All
Options will be non-qualified stock options.
(o) "Participant"
means any person who has been granted an Option which remains
outstanding, has RSUs, Deferred Shares or deferred cash credited to
his or her Account, or has elected to defer receipt of Director
Compensation in the form of Deferred Shares or deferred cash under
the Plan.
(p) "Plan
Year" means, with respect to a Participant, the period commencing
at the time of election of the director at an annual meeting of
shareholders (or the election of a class of directors if the
Company then has a classified Board of Directors), or the
director's initial appointment to the Board if not at an annual
meeting of shareholders, and continuing until the close of business
of the day preceding the next annual meeting of
shareholders.
(q) "Restricted
Stock" means Shares granted under Section 6, subject to a risk of
forfeiture and restrictions on transfer for a specified
period.
(r) "RSU"
or "Restricted Share Unit" means a Share Unit credited to a
Participant's Account as a grant under Section 6, which is subject
to a risk of forfeiture for a specified period.
(s) "Shares"
means shares of common stock of the Company and such other
securities as may be substituted or resubstituted for Shares
pursuant to Section 13(b).
(t) "Share
Unit" means a right to receive, at a specified settlement date,
delivery of one Share or the cash Fair Market Value of a Share at
that date, subject to the terms and conditions of the
Plan. Share Units in the form of RSUs shall be subject
to a risk of forfeiture, but Share Units in the form of Deferred
Shares will be at all times non-forfeitable. Share Units
and related awards settleable in cash shall be referred to as
"Cash-Settled" and those settleable in Shares shall be referred to
as "Share-Settled." A given award will be deemed to be a
Share-Settled award unless it has been specifically designated as a
Cash-Settled award in this Plan or otherwise by the Committee in
writing.
(u) "Stock
Appreciation Right" or "SAR" means the right, granted to the
Participant under Section 7, to receive, upon exercise thereof, the
excess of (i) the Fair Market Value of one Share on the date of
exercise over (ii) the grant price of the SAR as determined by the
Board at the time of grant.
(v) "Valuation
Date" shall mean the close of business on the last business day of
each calendar quarter and, in the case of any final distribution of
deferred cash from a Participant's Account, the day as of which
such distribution is made; provided, however, that the
Administrator may specify a different Valuation Date in order to
coordinate the Participant's deferred cash balance with any actual
investment by which the deferred cash balance is to be
measured.
(a)
Authority . Both the Board and the Administrator
(subject to the ability of the Board to restrict the Administrator)
shall administer the Plan in accordance with its terms, and shall
have all powers necessary to accomplish such purpose, including the
power and authority to construe and interpret the Plan, to define
the terms used herein, to prescribe, amend and rescind rules and
regulations, agreements, forms, and notices relating to the
administration of the Plan, and to make all other determinations
necessary or advisable for the administration of the
Plan. The Board may delegate any or all of its functions
to a committee of the Board, provided that the Board shall approve
the form and amount of compensation to directors under any
provision of the Plan. The Administrator may perform any
function of the Board under the Plan, except for establishing the
form and amount of compensation under any provision, adopting
material amendments to the Plan under Section 13(e), and any other
function from time to time specifically reserved by the Board to
itself. Any actions of the Board or the Administrator
with respect to the Plan shall be final, conclusive, and binding
upon all persons interested in the Plan, except that any action of
the Administrator will not be binding on the Board. The
Board and Administrator may each appoint agents and delegate
thereto powers and duties under the Plan, except as otherwise
limited by the Plan.
(b)
Administrator . The Administrator shall be the
Executive Vice President, General Counsel and Secretary of the
Company, or, if that officer is unavailable, the Executive Vice
President, Chief Financial Officer, or, if that officer is
unavailable, the Executive Vice President and Director of Human
Resources; provided, however, that the Board may designate a
different individual or committee to serve as
Administrator. In any case in which a director is a
member of the Administrator, such director shall not act on or
decide any matter relating solely to himself or herself or any of
his or her rights or benefits under the Plan. No bond or
other security need be required of the Administrator or any member
thereof in any jurisdiction.
(c)
Limitation of Liability . Each member of the
Board and the Administrator shall be entitled to, in good faith,
rely or act upon any report or other information furnished to him
or her by any officer or other employee of the Company or any
subsidiary, the Company's independent certified public accountants,
or any executive compensation consultant, legal counsel, or other
professional retained by the Company to assist in the
administration of the Plan. No member of the Board or
the Administrator, nor any person to whom ministerial duties under
the Plan have been delegated, shall be personally liable for any
action, determination, or interpretation taken or made in good
faith with respect to the Plan, and any such person shall, to the
extent permitted by law, be fully indemnified and protected by the
Company with respect to any such action, determination, or
interpretation.
4.
Shares Available Under the Plan . Subject to
adjustment as provided in Section 13(b), the total number of Shares
reserved and available for delivery under the Plan for awards
granted on or after June 26, 2003 shall be 600,000; provided
however, that, in no event may more than 50% of such Shares be
delivered in connection with "full-value
Awards." For this purpose, "full-value Awards"
means awards other than Options or SARs for which a Participant
does not pay or surrender rights to payment equal to at least the
Fair Market Value of the award determined at the date of
grant. Shares subject to and to be delivered in
connection with awards granted before June 26, 2003 which remain
outstanding at that date shall be drawn from the shares reserved
and available under the Plan at the time of
grant. The Shares delivered under the Plan may
consist, in whole or in part, of authorized and unissued Shares or
treasury Shares. For purposes of this Section 4, Shares
subject to an award under the Plan (including an award granted
before June 26, 2003) that is canceled, expired, forfeited, settled
in cash, or otherwise terminated without a delivery of Shares to
the Participant, including the number of Shares withheld or
surrendered in payment of any exercise or purchase price of an
award and including the number of Shares subject to an award but
not delivered upon exercise or settlement of the award, will become
available for awards under the Plan. Shares delivered in settlement
of Deferred Shares shall not be deemed to be Shares drawn from the
Shares reserved and available under this Section 4, to the fullest
extent permitted under Nasdaq Marketplace Rule 4350(i)(1)(A)(ii)
and excluding Deferred Shares resulting from deferrals of
Share-Settled RSUs. Likewise, Shares delivered in
settlement of Cash-Settled RSUs as to which the Director has
validly elected to receive settlement in the form of actual Shares
shall not be deemed to be Shares drawn from the Shares reserved and
available under this Section 4, to the fullest extent permitted
under Nasdaq Marketplace Rule 4350(i)(1)(A)(ii).
5.
Eligibility. Each non-employee director of the
Company may participate in the Plan, subject to the terms
hereof. No person other than those specified in this
Section 5 will be eligible to participate in the
Plan. The Administrator will notify each person of his
or her eligibility to participate in an elective feature of the
Plan not later than 15 days prior to any deadline for filing an
election form.
6.
Grants of Restricted Stock or RSUs. Restricted
Stock and/or RSUs shall be granted to non-employee directors in
accordance with policies established from time to time by the Board
specifying the directors or classes of directors to be granted such
awards, the number of shares of Restricted Stock or RSUs to be
granted, and the time or times at which such awards shall be
granted. An award granted under this Section 6 shall
become vested and non-forfeitable at such dates as may be specified
by the Board, and shall have such other terms as may be established
by the Board.
(a)
One-Time Grant Upon First Election as a Non-Employee
Director. The policy with respect to newly appointed or elected
non-employee directors under this Section 6, effective as of June
21, 2007 and continuing until modified or revoked by the Board,
shall be as follows:
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Award Type
and Amount . Effective June 21, 2007, one-time
grants of Restricted Stock to each newly appointed or elected
non-employee director were discontinued.
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Vesting and
Forfeiture Terms . With respect to Restricted
Stock granted before June 21, 2007 under this Section 6(a),
one-third of the number of Shares of Restricted Stock shall vest
and become non-forfeitable at the close of business on June 1 of
each of the three calendar years following the date of grant of
such award, rounded to the nearest number of whole Shares, subject
to the following:
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In the event of
a Change in Control or termination of the Participant's service as
a director due to death or Disability, the award, if not previously
vested or forfeited, shall immediately vest and become
non-forfeitable in full.
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In the event of
termination of the Participant's service as a director due to
Mandatory Retirement by the Participant, the award, if not
previously vested or forfeited, shall immediately vest and become
non-forfeitable as to that number of Shares of Restricted Stock as
would have vested and become non-forfeitable if the Participant had
continued to serve as a director through the anticipated date of
the next annual meeting of shareholders.
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Unless
otherwise determined by the Board, an award of Restricted Stock
that has not vested at or before the time of termination of the
Participant's service as a director (this would include
all unvested Restricted Stock in the event of a director's removal
from service) will cease to vest and will be forfeited upon such
termination; provided, however, that, if a director's service would
be terminated as a result of the
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failure of such
director to be reelected at an annual meeting of shareholders after
agreeing to be nominated for reelection, such service will be
deemed to terminate at the end of a 60-day period following such
annual meeting if the director has not otherwise been appointed or
elected to a seat on the Board and accepted such appointment or
election.
(b)
Annual Grant to a Non-Employee Director. The
policy with respect to annual grants of RSUs under this Section 6,
effective as of June 21, 2007 and continuing until modified or
revoked by the Board, shall be as follows:
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Award Type
and Amount . At the date of the 2007 Annual
Meeting of Shareholders and each subsequent annual meeting of
shareholders (subject to delayed grant as specified below) at which
a director is elected or reelected as a member of the Board (or at
which members of another class of directors are elected or
reelected, if the Company then has a classified Board), RSUs shall
be automatically granted to each non-employee director eligible to
participate in the Plan at the close of business on that
date. If an election of directors at an annual meeting
is contested, the date of grant for all eligible directors shall be
the date following the annual meeting that the independent Judge of
Elections reports the results of the election to the Company,
unless otherwise determined by the Board. The number of
such RSUs to be granted shall equal $135,000 (or such lesser amount
as may be specified by the Board or Compensation Committee) divided
by the Fair Market Value of a Share on the date of
grant. If a non-employee director is initially elected
or appointed at a date that does not coincide with the date of an
annual meeting and does not fall within 30 days preceding an
announced annual meeting, if he or she is eligible to participate
in the Plan at that date, he or she will be automatically granted
the number of RSUs equal to (A) $135,000 (or such lesser amount as
may be specified by the Board or Compensation Committee) multiplied
by a fraction the numerator of which is the number of days from the
date of grant to the anniversary of the most recent annual meeting
and the denominator of which is 365, divided by (B) the Fair Market
Value of a Share on the date of grant, with the resulting number of
RSUs rounded to the nearest whole RSU; provided, however, that a
director elected or appointed within 60 days after an annual
meeting at which the director was not reelected will receive the
same number of RSUs as were granted at or following the annual
meeting to each other non-employee director. If at the
time of grant of RSUs under this Section 6(b) on or after May 8,
2008 there remains insufficient Shares available for the number of
Share-Settled RSUs anticipated to be granted during that fiscal
year (taking into account previously granted and outstanding
Share-Settled awards), (i) in fiscal 2009 the maximum number of
Share-Settled RSUs granted to each non-employee director will be
3,000, and any RSUs to be granted in excess of that number will be
Cash-Settled RSUs, and (ii) after fiscal 2009 (or earlier at any
time that fewer than 3,000 Shares remain available per director for
new awards to be granted at a given date) all RSUs to be granted to
a non-employee director will be Cash-Settled RSUs.
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Vesting and
Forfeiture Terms . Such award shall become
vested and non-forfeitable as to all RSUs at the close of business
on June 1 of the year following the date of grant, subject to the
following:
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In the event of
a Change in Control or termination of the Participant's service as
a director due to death or Disability, the award, if not previously
vested or forfeited, shall immediately vest and become
non-forfeitable in full.
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In the event of
termination of the Participant's service as a director due to a
voluntary termination of service or Mandatory Retirement by the
Participant, the award, if not previously vested or
forfeited, shall immediately vest and become non-forfeitable as to
that number of RSUs equal to the total number of RSUs multiplied by
a fraction the numerator of which is the number of days from the
date of grant to the date of termination of service and the
denominator of which is the number of days from the date of grant
until June 1 of the year following the date of grant of such award
(such fraction in no event will exceed one). This
provision will also apply in the case of a director who fails to be
reelected as a director at an annual meeting of shareholders after
agreeing to be nominated for reelection, provided, however, that,
in such a case the director's service will be deemed to terminate
only if, at the end of a 60-day period following such annual
meeting (but not later than December 31 if that date falls within
the 60-day period), the director has not otherwise been appointed
or elected to a seat on the Board and accepted such appointment or
election.
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Unless
otherwise determined by the Board, an award of RSUs that has not
vested at or before the time of termination of the Participant's
service as a director (this would include all unvested RSUs in the
event of a director's removal from service) as provided herein will
cease to vest and will be forfeited upon such
termination.
(c)
Dividends and Dividend Equivalents . Unless
otherwise determined by the Board, cash dividends on Restricted
Stock which are not large, special and non-recurring and which are
paid prior to the lapse of the risk of forfeiture on such
Restricted Stock shall be paid to the Participant when paid to the
Company's shareholders. Other dividends will be payable
or not payable and subject to adjustment to the Restricted Stock in
accordance with Section 13(b). Dividend Equivalents will
be credited on RSUs in accordance with Section 9(a), with the
resulting additional RSUs subject to the same terms, including risk
of forfeiture, as the RSUs on which the dividend equivalent was
paid; provided, however, that such dividend equivalents may instead
be paid in cash, subject to such terms as the Administrator may
determine, if reinvestment of dividends is determined by the
Administrator to be administratively burdensome.
(d)
Other Restricted Stock Terms . Restricted Stock
shall be nontransferable by the Participant at any time that the
award remains subject to a risk of
forfeiture. Restricted Stock granted under the Plan may
be evidenced in such manner as the Administrator shall
determine. Unless otherwise determined by the
Administrator, if certificates representing Restricted Stock are
registered in the name of the Participant, such certificates shall
bear an appropriate legend referring to the terms, conditions, and
restrictions applicable to such Restricted Stock, the Company shall
retain physical possession of the certificate, and the Participant
shall have delivered a stock power to the Company, endorsed in
blank, relating to the Restricted Stock. Upon the lapse
of restrictions on Restricted Stock, the Share certificate shall be
released by the Company to the Participant with any legend relating
to such restrictions removed.
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General
Rule . Except as provided
in (ii) – (v) below, RSUs shall be settled promptly at the
time the RSUs become vested (and in any case within 90 days
thereafter); provided, however, that settlement of RSUs shall be
subject to delayed settlement if and to the extent specified in
Section 10(d), (e) or (f) below.
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Deferral
Election . A
director may elect to defer settlement of RSUs by timely filing an
election with the Company as provided below:
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Timing of
Elections . A deferral
election must generally be made by the end of the calendar year
prior to the Plan Year in which the RSU is
granted. However, a newly eligible Participant (within
the meaning of Treas. Reg. § 1.409A-2(a)(7)) may make a
deferral election with respect to an initial grant of RSUs under
Section 6(b) within 30 days of election or appointment to the Board
(which will apply only to the portion of the RSUs attributable to
service by the director after the election has been filed), or at
such other time as is permitted under Section 409A of the
Code.
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Effect and
Irrevocability of Elections . Elections relating to RSUs filed
before the calendar year in which the Plan Year to which they
relate begins, other than those subject to Section 9(c), shall
become irrevocable immediately before the beginning of such
calendar year unless the Administrator specifies an earlier
time. Elections subject to Section 9(c) shall become
irrevocable in accordance with Section 9(c). Other
elections shall become irrevocable upon filing or at such other
time as may be specified by the Administrator. The
latest election filed with the Administrator shall be deemed to
supersede all prior inconsistent elections that remain revocable at
the time of filing of the latest election.
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Matters To
Be Elected . The Administrator will provide a
form or forms of election which will permit a director to make
appropriate elections with respect to all relevant matters under
this Section 6. This election form may be included in
the document evidencing the grant of RSUs.
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Permitted
Elections as to Settlement . Elections as to the time of
settlement of deferred RSUs shall conform to the terms of Section
9(c). A Director will be permitted to elect to receive
shares in settlement of non-deferred Cash-Settled RSUs rather than
cash. Such an election must be made in advance of the
applicable vesting date of such Cash-Settled RSUs and at such time
or times as may be specified by the Administrator. Such
an election will not be permitted to defer the time of settlement
of the RSUs, and cannot be made for Cash-Setted RSUs that are
subject to a valid deferral election.
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Forfeiture
Risk. A
validly deferred RSU will remain forfeitable as provided
herein
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