Exhibit 10.1

NONQUALIFIED STOCK OPTION AGREEMENT

CHRISTOPHER & BANKS CORPORATION

2006 EQUITY INCENTIVE PLAN FOR NON-EMPLOYEE DIRECTORS

 

THIS AGREEMENT, made effective as of this           day of           ,
          , by and between Christopher & Banks Corporation, a Minnesota
corporation (the “Company”), and                                       
(“Participant”).

W I T N E S S E T H:

WHEREAS, Participant on the date hereof is a director of the Company or one of
its Subsidiaries; and

WHEREAS, the Company wishes to grant a nonqualified stock option to Participant
to purchase shares of the Company’s Common Stock pursuant to the Company’s 2006
Equity Incentive Plan For Non-Employee Directors (the “Plan”); and

WHEREAS, the Administrator has authorized the grant of a nonqualified stock
option to Participant and has determined that, as of the effective date of this
Agreement, the fair market value of the Company’s Common Stock is $           
per share;

NOW, THEREFORE, in consideration of the premises and of the mutual covenants
herein contained, the parties hereto agree as follows:

1.             Grant of Option.  The Company hereby grants to Participant on the
date set forth above (the “Date of Grant”), the right and option (the “Option”)
to purchase all or portions of an aggregate of                             
(               ) shares of Common Stock at a per share price of $            on
the terms and conditions set forth herein, and subject to adjustment pursuant to
Section 13 of the Plan.  This Option is a nonqualified stock option and will not
be treated as an incentive stock option, as defined under Section 422, or any
successor provision, of the Internal Revenue Code of 1986, as amended (the
“Code”), and the regulations thereunder.

2.             Duration and Exercisability.

a.              General.  The term during which this Option may be exercised
shall terminate on                      ,         , except as otherwise provided
in Paragraphs 2(b) through 2(d) below.  This Option shall become exercisable
according to the following schedule:

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Vesting Date

 

Cumulative Percentage
of Shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Once the Option becomes fully exercisable, Participant may continue to exercise
this Option under the terms and conditions of this Agreement until the
termination of the Option as provided herein.  If Participant does not purchase
upon an exercise of this Option the full number of shares which Participant is
then entitled to purchase, Participant may purchase upon any subsequent exercise
prior to this Option’s termination such previously unpurchased shares in
addition to those Participant is otherwise entitled to purchase.

b.              Termination of Relationship (other than Disability or Death). 
If Participant ceases to be a director of the Company or any Subsidiary for any
reason other than disability or death, this Option shall completely terminate on
the earlier of (i) the close of business on the three-month anniversary of the
date of termination of Participant’s relationship, and (ii) the expiration date
of this Option stated in Paragraph 2(a) above.  In such period following such
termination of Participant’s relationship, this Option shall be exercisable only
to the extent the Option was exercisable on the vesting date immediately
preceding the date on which Participant’s relationship with the Company or
Subsidiary has terminated, but had not previously been exercised.  To the extent
this Option was not exercisable upon the termination of such relationship, or if
Participant does not exercise the Option within the time specified in this
Paragraph 2(b), all rights of Participant under this Option shall be forfeited.

c.              Disability.  If Participant ceases to be a director of the
Company or any Subsidiary because of disability (as defined in Code Section
22(e), or any successor provision), this Option shall completely terminate on
the earlier of (i) the close of business on the twelve-month anniversary of the
date of termination of Participant’s relationship, and (ii) the expiration date
of this Option stated in Paragraph 2(a) above.  In such period following such
termination of Participant’s relationship, this Option shall be exercisable only
to the extent the Option was exercisable on the vesting date immediately
preceding the date on which Participant’s relationship with the Company or
Subsidiary has terminated, but had not previously been exercised.  To the extent
this Option was not exercisable upon the termination of such relationship, or if
Participant does not exercise the Option within the time specified in this
Paragraph 2(c), all rights of Participant under this Option shall be forfeited.

d.              Death.  In the event of Participant’s death, this Option shall
terminate on the earlier of (i) the close of business on the twelve-month
anniversary of the date of Participant’s death, and (ii) the expiration date of
this Option stated in Paragraph 2(a) above.  In such period following
Participant’s death, this Option may be exercised by the person or persons to
whom Participant’s rights under this Option shall have passed by Participant’s
will or by the laws of descent and distribution only to the extent the Option
was exercisable on the vesting date immediately preceding the date of
Participant’s death, but had not previously been exercised.  To

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the extent this Option was not exercisable upon the date of Participant’s death,
or if such person or persons fail to exercise this Option within the time
specified in this Paragraph 2(d), all rights under this Option shall be
forfeited.

3.             Manner of Exercise.

a.              General.  The Option may be exercised only by Participant (or
other proper party in the event of death or incapacity), subject to the
conditions of the Plan and subject to such other administrative rules as the
Administrator may deem advisable, by delivering within the option period written
notice of exercise to the Company at its principal office.  The notice shall
state the number of shares as to which the Option is being exercised and shall
be accompanied by payment in full of the option price for all shares designated
in the notice.  The exercise of the Option shall be deemed effective upon
receipt of such notice by the Company and upon payment that complies with the
terms of the Plan and this Agreement.  The Option may be exercised with respect
to any number or all of the shares as to which it can then be so exercised and,
if partially exercised, may be so exercised as to the unexercised shares any
number of times during the option period as provided herein.

b.              Form of Payment.  Subject to the approval of the Administrator,
payment of the option price by Participant shall be in the form of cash,
personal check, certified check or previously acquired shares of Common Stock of
the Company, or any combination thereof.  Any stock so tendered as part of such
payment shall be valued at its Fair Market Value as provided in the Plan.  For
purposes of this Agreement, “previously acquired shares of Common Stock” shall
include shares of Common Stock that are already owned by Participant at the time
of exercise.

c.              Stock Transfer Records.  As soon as practicable after the
effective exercise of all or any part of the Option, Participant shall be
recorded on the stock transfer books of the Company as the owner of the shares
purchased, and the Company shall deliver to Participant one or more duly issued
stock certificates evidencing such ownership.  All requisite original issue or
transfer documentary stamp taxes shall be paid by the Company.

4.             Miscellaneous.

a.              Director or Other Relationship; Rights as Shareholder.  This
Agreement shall not confer on Participant any right with respect to the
continuance as a director or any other relationship with the Company or any of
its Subsidiaries, nor will it interfere in any way with the right of the Company
to terminate such directorship or relationship.  Participant shall have no
rights as a shareholder with respect to shares subject to this Option until such
shares have been issued to Participant upon exercise of this Option.  No
adjustment shall be made for dividends (ordinary or extraordinary, whether in
cash, securities or other property), distributions or other rights for which the
record date is prior to the date such shares are issued, except as provided in
Section 13 of the Plan.

b.              Mergers, Recapitalizations, Stock Splits, Etc.  Except as
otherwise specifically provided in any employment, change of control, severance
or similar agreement executed by the Participant and the Company, pursuant and
subject to Section 13 of the Plan, certain changes in the number or character of
the Common Stock of the Company (through sale, merger, consolidation, exchange,
reorganization, divestiture (including a spin-off), liquidation,

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recapitalization, stock split, stock dividend or otherwise) shall result in an
adjustment, reduction or enlargement, as appropriate, in Participant’s rights
with respect to any unexercised portion of the Option (i.e., Participant shall
have such “anti-dilution” rights under the Option with respect to such events,
but shall not have “preemptive” rights).

c.              Shares Reserved.  The Company shall at all times during the
option period reserve and keep available such number of shares as will be
sufficient to satisfy the requirements of this Agreement.

d.              Withholding Taxes.  To permit the Company to comply with all
applicable federal and state income tax laws or regulations, the Company may
take such action as it deems appropriate to ensure that, if necessary, all
applicable federal and state payroll, income or other taxes are withheld from
any amounts payable by the Company to Participant.  If the Company is unable to
withhold such federal and state taxes, for whatever reason, Participant hereby
agrees to pay to the Company an amount equal to the amount the Company would
otherwise be required to withhold under federal or state law.  Subject to such
rules as the Administrator may adopt, the Administrator may, in its sole
discretion, permit Participant to satisfy such withholding tax obligations, in
whole or in part (i) by delivering shares of Common Stock, or (ii) by electing
to have the Company withhold shares of Common Stock otherwise issuable to
Participant, in either case having a Fair Market Value, as of the date the
amount of tax to be withheld is determined under applicable tax law, equal to
the minimum amount required to be withheld for tax purposes.  Participant’s
request to deliver shares or to have shares withheld for purposes of such
withholding tax obligations shall be made on or before the date that triggers
such obligations or, if later, the date that the amount of tax to be withheld is
determined under applicable tax law.  Participant’s request shall be approved by
the Administrator and otherwise comply with such rules as the Administrator may
adopt to assure compliance with Rule 16b-3 or any successor provision, as then
in effect, of the General Rules and Regulations under the Securities and
Exchange Act of 1934, if applicable.

e.              Nontransferability.  During the lifetime of Participant, the
accrued Option shall be exercisable only by Participant or by the Participant’s
guardian or other legal representative, and shall not be assignable or
transferable by Participant, in whole or in part, other than by will or by the
laws of descent and distribution.

f.               2006 Equity Incentive Plan For Non-Employee Directors.  The
Option evidenced by this Agreement is granted pursuant to the Plan, a copy of
which Plan has been made available to Participant and is hereby incorporated
into this Agreement.  This Agreement is subject to and in all respects limited
and conditioned as provided in the Plan. All defined terms of the Plan shall
have the same meaning when used in this Agreement.  The Plan governs this Option
and, in the event of any questions as to the construction of this Agreement or
in the event of a conflict between the Plan and this Agreement, the Plan shall
govern, except as the Plan otherwise provides.

g.              Lockup Period Limitation.  Participant agrees that in the event
the Company advises Participant that it plans an underwritten public offering of
its Common Stock in compliance with the Securities Act of 1933, as amended, and
that the underwriter(s) seek to impose restrictions under which certain
shareholders may not sell or contract to sell or grant any option to buy or
otherwise dispose of part or all of their stock purchase rights of the
underlying

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Common Stock, Participant hereby agrees that for a period not to exceed 180 days
from the prospectus, Participant will not sell or contract to sell or grant an
option to buy or otherwise dispose of this Option or any of the underlying
shares of Common Stock without the prior written consent of the underwriter(s)
or its representative(s).

h.              Stock Legend.  The Administrator may require that the
certificates for any shares of Common Stock purchased by Participant (or, in the
case of death, Participant’s successors) shall bear an appropriate legend to
reflect the restrictions of Paragraph 4(g) of this Agreement; provided, however,
that failure to so endorse any of such certificates shall not render invalid or
inapplicable Paragraph 4(g).

i.               Scope of Agreement.  This Agreement shall bind and inure to the
benefit of the Company and its successors and assigns and Participant and any
successor or successors of Participant permitted by Paragraph 2 or Paragraph
4(e) above.

j.               Arbitration.  Any dispute arising out of or relating to this
Agreement or the alleged breach of it, or the making of this Agreement,
including claims of fraud in the inducement, shall be discussed between the
disputing parties in a good faith effort to arrive at a mutual settlement of any
such controversy.  If, notwithstanding, such dispute cannot be resolved, such
dispute shall be settled by binding arbitration.  Judgment upon the award
rendered by the arbitrator may be entered in any court having jurisdiction
thereof.  The arbitrator shall be a retired state or federal judge or an
attorney who has practiced securities or business litigation for at least 10
years.  If the parties cannot agree on an arbitrator within 20 days, any party
may request that the chief judge of the District Court for Hennepin County,
Minnesota, select an arbitrator.  Arbitration will be conducted pursuant to the
provisions of this Agreement, and the commercial arbitration rules of the
American Arbitration Association, unless such rules are inconsistent with the
provisions of this Agreement.  Limited civil discovery shall be permitted for
the production of documents and taking of depositions.  Unresolved discovery
disputes may be brought to the attention of the arbitrator who may dispose of
such dispute.  The arbitrator shall have the authority to award any remedy or
relief that a court of this state could order or grant; provided, however, that
punitive or exemplary damages shall not be awarded.  The arbitrator may award to
the prevailing party, if any, as determined by the arbitrator, all of its costs
and fees, including the arbitrator’s fees, administrative fees, travel expenses,
out-of-pocket expenses and reasonable  attorneys’ fees.  Unless otherwise agreed
by the parties, the place of any arbitration proceedings shall be Hennepin
County, Minnesota.

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ACCORDINGLY, the parties hereto have caused this Agreement to be executed on the
day and year first above written.

 

CHRISTOPHER & BANKS CORPORATION

 

 

 

 

 

 

 

By:

 

 

 

Its:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Participant

 

 

 

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