Exhibit 10.1

 

CHRISTOPHER & BANKS CORPORATION

2009 QUALIFIED ANNUAL INCENTIVE PLAN

 

Section 1.  Establishment and Purpose

 

Christopher & Banks Corporation hereby establishes the Christopher & Banks
Qualified Annual Incentive Plan for the purpose of authorizing the issuance of
performance awards specifically intended to qualify as “qualified
performance-based compensation” within the meaning of Section 162(m) of the
Code.

 

Section 2.  Certain Definitions

 

Wherever the following capitalized terms are used in the Plan, they shall have
the meanings specified below:

 

(a)       “Award” shall mean an award of “qualified performance-based
compensation” within the meaning of Section 162(m) that is granted pursuant to
the terms of the Plan to a Participant.

 

(b)       “Board” shall mean the Board of Directors of the Company.

 

(c)       “Code” shall mean the Internal Revenue Code of 1986, as amended.

 

(d)       “Committee” shall mean the Compensation Committee of the Board, or
such other committee of the Board appointed by the Board to administer the Plan;
each member of the Committee shall qualify as an “outside director” pursuant to
the terms of Section 162(m).

 

(e)       “Company” shall mean Christopher & Banks Corporation.

 

(f)        “Participant” shall mean any full-time officer or employee of the
Company covered by Section 162(m) or who reports directly to the Chief Executive
Officer of the Company and who is designated by the Committee to receive an
Award.  A Participant in this Plan shall not be a participant in the
Non-Qualified Annual Incentive Plan for the same Performance Period.

 

(g)       “Performance Period” shall mean the period or periods established by
the Committee during which any performance goals specified by the Committee with
respect to such Award are to be measured.

 

(h)       “Plan” shall mean the Christopher & Banks Corporation Qualified
Performance-Based Cash Compensation Plan.

 

(i)        “Section 162(m)” shall mean Section 162(m) of the Code, and all
rules and regulations promulgated thereunder.

 

Section 3.  Administration

 

This Plan shall be administered by the Committee.  All questions of
interpretation of this Plan shall be determined by the Committee, and each
determination, interpretation or other action that the Committee makes or takes
pursuant to the provisions of this Plan shall be conclusive and binding for all
purposes and on all persons.  The Committee shall not be liable for any action
or determination made in good faith with respect to this Plan.

 

Section 4.  Qualified Performance-Based Cash Compensation under Section 162(m)

 

From time to time, the Committee may designate Participants to receive an Award
or Awards granted pursuant to the Plan.  Each Award granted under the Plan shall
be payable only in cash.  The following additional requirements shall apply to
all Awards made to any Participant under the Plan:

 

(a)           Stockholder Approval of Plan.  Any Award shall be null and void
and have no effect whatsoever unless the Plan shall have been approved by the
stockholders of the Company at the Company’s 2009 Annual Meeting of
Stockholders.  No Award shall be granted on a date that is more than

 

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five years after the date of such meeting of stockholders unless the
stockholders of the Company have re-approved the Plan to the extent required by
Section 162(m).

 

(b)           Business Criteria.  Unless and until the Committee proposes for
stockholder approval, and the Company’s stockholders approve, a change in the
general business criteria set forth in this Section 4(b), the attainment of
which may determine the amount, if any, of an Award, the business criteria to be
used for purposes of establishing performance goals for Awards shall be selected
from among the following alternatives, which criteria may be selected
individually, alternatively or in combination for any Award:

 

·                  net sales;

·                  net sales per foot;

·                  revenue per employee;

·                  revenue growth;

·                  revenue growth by one or more merchandise categories;

·                  comparable store sales growth;

·                  operating income (before or after taxes);

·                  pre- or after-tax income (before or after allocation of
corporate overhead and bonus);

·                  earnings per share;

·                  gross profits;

·                  earnings (including earnings before taxes, earnings before
interest and taxes, and earnings before interest, taxes, depreciation and
amortization);

·                  operating margins;

·                  gross margins;

·                  return on equity;

·                  total shareholder return;

·                  return on assets or net assets;

·                  appreciation in and/or maintenance of the price of shares of
Common Stock, or any other publicly traded securities, of the Company;

·                  price-to-earnings ratio;

·                  economic value-added models or equivalent metrics;

·                  comparisons with one or more stock market indices;

·                  comparisons with one or more peer group indices or peer group
metrics;

 

·                  return on capital (including return on total capital or
return on invested capital);

·                  reductions in costs, including reductions in net store lease
costs and/or reductions in net store rental costs;

·                  cash flow, cash flow from operations or cash flow per share
(before or after accounting for any or all of the following:  dividends, income
tax payments or refunds, capital expenditures);

·                  expense ratios;

·                  total expenditures, improvement in or attainment of expense
levels or working capital levels;

·                  cash and cash equivalents, measured either at fiscal year-end
or on a comparative fiscal year-over-fiscal year basis;

·                  debt reductions;

·                  shareholder equity;

·                  market share;

·                  net new store openings; and

·                  implementation, completion or attainment of measurable
objectives with respect to (i) strategic plan development and/or implementation,
(ii) tactical plans, (iii) sales plan, (iv) annual operating budgets,
(v) establishing and/or maintaining multiple vendors and/or sourcing providers,
(vii) products or projects, (viii) acquisitions and divestitures, and
(ix) recruiting, retaining and maintaining personnel (including workforce
diversity goals).

 

Each of such performance goals may be based solely by reference to absolute
results of individual performance or organizational performance at various
levels (e.g., the Company’s performance or the performance of a subsidiary,
division, business segment or business unit of the Company), or may be based
upon organizational performance relative to the comparable performance of other
companies selected by the Committee.  To the extent consistent with
Section 162(m), the Committee may also exclude charges related to an event or
occurrence which the Committee determines should appropriately be excluded,
including (X) restructurings, discontinued operations, extraordinary items, and
other unusual or non-recurring charges, (Y) an event either not directly related
to the operations of the Company or not within the reasonable control of the
Company’s management, or (Z) the cumulative effects of tax or accounting changes
in accordance with U.S. generally accepted accounting principles (or other
accounting principles which may then be in effect).

 

In the event that Section 162(m) or other applicable tax and/or securities laws
or regulations change to permit Committee discretion to alter the governing
performance measures without obtaining stockholder approval of such changes and
without thereby exposing the Company to potentially adverse tax or other legal
consequences, the Committee shall have the sole discretion to make such changes
without obtaining stockholder approval.

 

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(c)           Limitation on Awards to Individual Participants.  The maximum
dollar value that may be certified by the Committee for payment to any
Participant in any calendar year with respect to an Award or Awards granted
hereunder is $ 3,000,000.  If an Award is cancelled, the cancelled Award shall
continue to be counted toward this limitation for the applicable calendar year.

 

(d)           Payment of Qualified Performance Awards.  Certified Awards shall
be paid no later than two and one-half months following the conclusion of the
applicable performance period; provided, however, that the Committee may
establish procedures that allow for the payment of Certified Awards on a
deferred basis subject to the requirements of Section 409A of the Code.  The
Committee may, in its discretion, reduce the amount of a payout achieved and
otherwise to be paid in connection with an Award, but may not exercise
discretion to increase such amount.

 

(e)           Certain Events.  If a Participant dies or becomes permanently and
totally disabled before the end of a performance period or after the performance
period and before an Award is paid, the Committee may, in its discretion,
determine that the Participant shall be paid a pro-rated portion of the Award
that the Participant would have received but for his or her death or disability.

 

(f)            Timing of Designations; Duration of Performance Periods.  For
each Award, the Committee shall, not later than 90 days after the beginning of
each performance period, (i) designate all Participants for such performance
period, and (ii) establish the objective performance factors for each
Participant for that performance period on the basis of one or more of the
criteria set forth in Section 4(b) above; provided that, with respect to such
criteria, the outcome is substantially uncertain at the time the Committee
actually establishes the goal.  The Committee shall have sole discretion to
determine the applicable performance period, provided that in the case of a
performance period less than 12 months, in no event will a performance goal be
considered to be pre-established if it is established after 25 percent of the
performance period (as scheduled in good faith at the time the goal is
established) has elapsed.

 

(g)           Certification.  Following the close of each performance period and
prior to payment of any amount to a Participant with respect to an Award, the
Committee shall certify in writing as to the attainment of all factors
(including the performance factors for a Participant) upon which any payments to
a Participant for that performance period are to be based.

 

(h)           Interpretation.  Each of the provisions in this Section 4, and all
of the other terms and conditions of the Plan as they apply to any Award, shall
be interpreted in such a fashion as to qualify all compensation paid hereunder
as “qualified performance-based compensation” within the meaning of
Section 162(m).  Nothing in this Plan shall be interpreted to limit the
Committee’s authority to grant any other awards to Participants, whether
qualifying as or not qualifying as performance awards for purposes of
Section 162(m), under the terms of any other incentive plan of the Company.

 

Section 5.  Amendment and Termination of Plan

 

The Committee shall have the power to amend the Plan or terminate the Plan at
any time, as a whole or with respect to any Participant or group of
Participants, and any such amendment or Plan termination shall be binding on all
Participants and their beneficiaries and all other parties in interest.  In
accordance with the Committee’s authority to amend or terminate the Plan, such
amendment or termination may amend, alter, suspend, discontinue or terminate a
Participant’s rights with respect to any outstanding Awards not yet certified by
the Company, either prospectively or retroactively, without the consent of the
Participant or beneficiary thereof; provided that, the Committee may not amend
any Award in any manner that would cause the Award to fail to qualify as
“qualified performance-based compensation” within the meaning of Section 162(m).

 

Section 6.  Effective Date of the Plan

 

The Plan shall be effective as of the date of its approval by the stockholders
of the Company.

 

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