Exhibit 10.4

CHARLOTTE RUSSE HOLDING, INC.

EXECUTIVE OFFICER COMPENSATION PROGRAM

PURPOSE

The purpose of this Charlotte Russe Holding, Inc. (the “Company”) Executive
Officer Compensation Program (the “Program”) is to align the interests of the
Company’s executive officers with the interests of the Company’s stockholders
and to attract, motivate and retain talented executive officers to continually
maximize stockholder value.

The Program is focused on “pay for performance” and accountability and targets
annual base salaries for the Company’s executive officers at the median of the
Company’s peer group of companies (the “Peer Group”) while providing for
above-market incentive payments for above-market performance.

The Peer Group for each fiscal year shall be approved by the Company’s board of
directors (the “Board”) or the Compensation Committee of the Board (the
“Compensation Committee”) on an annual basis, following the completion of the
previous fiscal year and with assistance from the Company’s management and
outside consultants, in each case as the Board or the Compensation Committee
deems necessary or appropriate.

ELIGIBLE EMPLOYEES

The following Company employees shall be eligible to participate in the Program:

 

  •  

Chief Executive Officer (“CEO”);

 

  •  

President or Chief Merchandising Officer (“President/CMO”);

 

  •  

Executive Vice President, Chief Financial Officer (“CFO”);

 

  •  

Executive Vice President, Chief Operating Officer (“COO”);

 

  •  

Executive Vice President, Store Operations (“EVPSO”); and

 

  •  

Any other persons named as “executive officers” within the meaning of the
Securities Exchange Act of 1934, as amended.

ELEMENTS OF COMPENSATION

To accomplish the aforementioned objectives, compensation for the Company’s
executive officers generally consists of the following components: cash
compensation, consisting of base salary and an annual incentive bonus; and
equity compensation, consisting of stock options and restricted stock grants.

Cash Compensation

Base salaries for each fiscal year shall be approved by the Board or
Compensation Committee on an annual basis at or near the beginning of such
fiscal year, and shall be effective as of the first day of the applicable fiscal
year.

 

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Annual incentive bonuses for each fiscal year shall be approved by the Board or
Compensation Committee on an annual basis following the completion of such
fiscal year and shall be calculated as a percentage of each executive officer’s
base salary for such fiscal year.

Financial Component

70% of the annual incentive bonus shall be based upon the Company’s achievement
of operating income goals for the subject fiscal year (the “Financial
Component”) that (i) are approved by the Board or the Compensation Committee, in
their sole discretion, at the beginning of such fiscal year and (ii) correspond
to the minimum, midpoint and maximum percentages of each executive officer’s
base salary as set forth below (the “Bonus Percentages”).

 

     Percentage of Base Salary  

Title

   Minimum     Midpoint     Maximum  

CEO

   50 %   100 %   150 %

President/CMO

   50 %   75 %   100 %

CFO/COO

   35 %   60 %   100 %

EVPSO

   25 %   50 %   80 %

The actual Bonus Percentages for each fiscal year shall be determined by the
Board or the Compensation Committee, in their sole discretion, and may vary from
the percentages set forth above. The Financial Component shall be determined by
multiplying 70% of the executive officer’s base salary by the Bonus Percentage
that corresponds to the operating income goal achieved. Notwithstanding the
foregoing, no Financial Component shall be paid if the operating income goal for
the minimum Bonus Percentage is not achieved.

Non-Financial Component

30% of each annual incentive bonus shall be based upon the achievement of
non-financial corporate and individual performance goals for the subject fiscal
year (the “Non-Financial Component”) approved by the Board or the Compensation
Committee, in their sole discretion, at the beginning of such fiscal year. The
Board or the Compensation Committee shall also approve a floor operating income
goal for such fiscal year that must be achieved as a condition to any
Non-Financial Component being paid (the “Floor Operating Income Target”). The
Non-Financial Component shall be determined by multiplying 30% of the executive
officer’s base salary by (i) the Bonus Percentage that corresponds to the
operating income goal achieved (provided that the minimum Bonus Percentage shall
be used in the event the operating income goal achieved is equal to or greater
than the Floor Operating Income Target and equal to or less than the minimum
Bonus Percentage operating income goal) and (ii) the percentage of the
non-financial corporate and individual performance goals actually achieved, as
determined by the Board or the Compensation Committee, in their sole discretion.
For purposes of clarity, no Non-Financial Component shall be paid if the Floor
Operating Income Target is not achieved.

 

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Equity Compensation

The Black-Scholes value of each executive officer’s total equity compensation
for each fiscal year shall be approximately equal to a percentage of such
executive officer’s base salary for such fiscal year (the “Target Value”) and
shall be approved by the Board or the Compensation Committee on an annual basis
prior to the beginning of such fiscal year.

The table below sets forth guidelines for determining the Target Value for each
executive officer’s total equity compensation.

 

     Percentage of Base Salary  

Title

   Minimum     Midpoint     Maximum  

CEO

   100 %   150 %   200 %

President/CMO

   75 %   125 %   200 %

CFO/COO

   65 %   100 %   150 %

EVPSO

   50 %   75 %   125 %

The actual Target Value for each executive officer shall be determined by the
Board or the Compensation Committee, in their sole discretion, and may vary from
the percentages set forth above based on prior years’ corporate and individual
performance.

For each fiscal year: 30% of the Target Value shall be in the form of a stock
option granted pursuant to the Company’s 1999 Equity Incentive Plan, as may be
amended from time to time, or any successor plan thereto (the “Plan”), approved
prior to, and effective as of, the first business day of such fiscal year and
subject to vesting in equal annual installments over a three-year period from
the date of grant (the “Stock Option”); 30% of the Target Value shall be in the
form of restricted stock granted pursuant to the Plan, approved prior to, and
effective as of, the first business day of such fiscal year and subject to
vesting in equal annual installments over a three-year period from the date of
grant (the “Time-Based Restricted Stock Grant”); and 40% of the Target Value
shall be in the form of restricted stock granted pursuant to the Plan, approved
prior to, and effective as of, the first business day of such fiscal year and
subject to performance-based vesting over a three-year period from the date of
grant as set forth in the table below (the “Performance-Based Restricted Stock
Grant”); provided, however, that the percentage of the Target Value allocated to
the Stock Option, Time-Based Restricted Stock Option Grant and Performance-Based
Stock Option Grant shall be subject to adjustment by the Board or Compensation
Committee for each fiscal year.

 

Three-Year Total Stockholder Return,
Company v. Peer Group

   Percentage Vested at Third Anniversary of
the Date of Grant(1)

Less than the 25th Percentile

   0%

25th Percentile

   33 1/3%

50th Percentile

   66 2/3%

75th Percentile or Greater

   100%

 

(1)

Percentage vested for Three-Year Total Stockholder Returns between the 25th and
75th percentile shall be calculated on a linear scale from 33 1/3% to 100%.

 

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“Three-Year Total Stockholder Return” for any three consecutive Company fiscal
years shall be defined as the change in market valuation from the first day of
the first such fiscal year through the last day of the third such fiscal year,
as determined in good faith by the Board or Compensation Committee. For example,
for fiscal 2008, the Three-Year Total Stockholder Return shall be measured from
the first day of the Company’s fiscal year 2008 through the last day of the
Company’s fiscal year 2010. For each fiscal year, Three-Year Total Stockholder
Returns shall be calculated for each member of the applicable Peer Group and the
Company shall be given a percentile ranking.

The number of shares subject to the Stock Option, Time-Based Restricted Stock
Grant and Performance-Based Restricted Stock Grant shall be rounded to the
nearest 500 shares and determined following the close of business on the first
business day of the applicable fiscal year (the effective date of grant) such
that the Black-Scholes value of the Stock Option, Time-Based Restricted Stock
Grant and Performance-Based Restricted Stock Grant, based upon the closing price
of the Company’s common stock on such day, shall be equal to 30%, 30% and 40%
(or such other percentages as may be determined by the Board or Compensation
Committee for each fiscal year), respectively, of the Target Value. Such
determination shall be made on a basis consistent with the Company’s
methodologies for financial reporting purposes.

 

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