Exhibit 10.3


 


AMENDED AND RESTATED


 


2005 EQUITY INCENTIVE PLAN

OF

THE CHILDREN’S PLACE RETAIL STORES, INC.


 


1.                                       Purpose.                                                The
purpose of this Equity Incentive Plan is to advance the interests of the
Corporation by encouraging and enabling the acquisition of a larger personal
proprietary interest in the Corporation by key employees and directors of the
Corporation and its Subsidiaries upon whose judgment and keen interest the
Corporation is largely dependent for the successful conduct of its operations
and by providing such key employees and directors with incentives to put forth
maximum efforts for the success of the Corporation’s business. It is
anticipated that the acquisition of such proprietary interests in the
Corporation and such incentives will stimulate the efforts of such key
employees and directors on behalf of the Corporation and its Subsidiaries and
strengthen their desire to remain with the Corporation and its Subsidiaries. It
is also expected that such incentives and the opportunity to acquire such a
proprietary interest will enable the Corporation and its Subsidiaries to
attract desirable employees and directors.


 


2.                                       Definitions.                                When
used in this Plan, unless the context otherwise requires:


 


(a)                                  Alternative
Rights” shall have the meaning as set forth in Section 9 hereof.


 


(b)                                 “Board
of Directors” shall mean the Board of Directors of the Corporation, as
constituted at any time.


 


(c)                                  Except
as otherwise provided in the holder’s employment agreement (if any) with the
Corporation or a Subsidiary, “Cause” shall mean, with respect to the
holder of an Incentive Award, (i) a breach by the holder of any of the
material provisions of any employment agreement between the holder and the
Corporation or a Subsidiary that the holder fails to remedy or cease within ten
(10) days after notice thereof to the holder; (ii) any conduct,
action or behavior by the holder that has or may reasonably be expected to have
a material adverse effect on the reputation of the Corporation or its
Subsidiaries or on the holder’s reputation or that is not befitting of an
executive officer, employee or director of the Corporation or a Subsidiary; (iii) the
commission by the holder of an act involving moral turpitude or dishonesty,
whether or not in connection with the holder’s employment by, or service as a
director of, the Corporation or a Subsidiary; (iv) the holder shall have
committed any act of fraud or embezzlement against the Corporation or a
Subsidiary or engaged in any other willful misconduct in connection with his
duties; or (v) the holder shall have been convicted of a felony (other
than a felony relating to motor vehicle laws). 
Notwithstanding the foregoing, no Cause shall be deemed to exist with
respect to the holder’s acts described in (ii) above unless the
Corporation shall have given prior written notice to the holder specifying the
Cause with reasonable particularity and, 


 

















 


within 30 days after such notice, the holder shall not
have cured or eliminated the problem or thing giving rise to such Cause.


 


(d)                                 “Chairman
of the Board” shall mean the person who at the time shall be Chairman of
the Board of Directors.


 


(e)                                  “Change
in Control” shall mean any of the following events: (i) the sale to
any purchaser of (A) all or substantially all of the assets of the
Corporation or (B) capital stock representing more than 50% of the stock
of the Corporation entitled to vote generally in the election of directors of
the Corporation; (ii) the merger or consolidation of the Corporation with
another corporation if, immediately after such merger or consolidation, less
than a majority of the combined voting power of the then outstanding securities
entitled to vote generally in the election of directors of the surviving or
resulting corporation in such merger or consolidation is held, directly or
indirectly, in the aggregate by the holders immediately prior to such
transaction of the outstanding securities of the Corporation; (iii) the
filing of a report on Schedule 13D or Schedule 14D-1 (or any successor
schedule, form, or report or item therein), each promulgated pursuant to the
Exchange Act, disclosing that any person (as the term “person” is used in Section 13(d)(3) or
Section 14(d)(2) of the Exchange Act) has become the beneficial owner
(as the term “beneficial owner” is defined under Rule 13d-3 or any
successor rule or regulation promulgated under the Exchange Act) of
securities representing 50% or more of the combined voting power of the voting
stock of the Corporation; or (iv) the filing by the Corporation of a
report or proxy statement with the Securities and Exchange Commission pursuant
to the Exchange Act disclosing in response to Form 8-K or Schedule 14A (or
any successor schedule, form, or report or item therein) that a change in
control of the Corporation has occurred or will occur in the future pursuant to
any then existing contract or transaction. 
Notwithstanding the foregoing, a “Change in Control” shall not be deemed
to occur as a result of an event described above if a majority of the
individuals who are members of the Board of Directors prior to such event
specifically determines that a Change in Control should not be deemed to have
occurred.


 


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


 


(g)                                 “Committee”
shall mean the Committee hereinafter described in Section 3 hereof.


 


(h)                                 “Corporation”
shall mean The Children’s Place Retail Stores, Inc., a Delaware
corporation.


 


(i)                                     “Deferred
Stock Award” shall mean an Incentive Award granted in accordance with Section 15
hereof.


 


(j)                                     “Disability”
shall mean: (i) with respect to the holder of an Option that is not an
incentive stock option, the holder’s inability, as a result of physical or
mental incapacity or infirmity, to perform the duties of his employment for (a) a
continuous period of at least 120 days, or (b) periods aggregating at
least 180 days during any period of 12 consecutive months; or (ii) with
respect to the holder of an Option that is an 


 

















 


incentive stock option, and when used in connection
with such incentive stock option following such holder’s termination of
employment, a “disability” within the meaning of Section 22(e)(3) of
the Code.


 


(k)                                  “Eligible
Director” shall mean a director of the Corporation who is not also an
employee of the Corporation or a Subsidiary.


 


(l)                                     “Eligible
Persons” shall mean those persons described in Section 4 who are
potential recipients of Incentive Awards.


 


(m)                               “Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended.


 


(n)                                 “Fair
Market Value” on a specified date shall mean the average of the highest and
lowest selling price at which a Share is traded on the stock exchange, if any,
on which Shares are primarily traded or, if the Shares are not then traded on a
stock exchange, the average of the closing representative bid and asked price
of a Share as reported by the principal securities exchange or securities
trading market on which the Shares are listed or approved for trading, but if
no Shares were traded on such date, then on the last previous date on which a
Share was so traded, or, if none of the above are applicable, the value of a
Share as established by the Board of Directors or the Committee for such date
using any reasonable method of valuation.


 


(o)                                 “Incentive
Award” shall mean an Option, Right, Restricted Stock Award, Deferred Stock
Award or Performance Award granted pursuant to this Plan.


 


(p)                                 “Options”
shall mean the stock options granted pursuant to this Plan.


 


(q)                                 “Performance
Award” shall mean an Incentive Award granted in accordance with Section 16
hereof.


 


(r)                                    “Plan”
shall mean this 2005 Equity Incentive Plan of The Children’s Place Retail
Stores, Inc., as adopted by the Board of Directors on April 18, 2005,
as amended and restated on June 23, 2005, as such Plan from time to time
may be further amended.


 


(s)                                  “President”
shall mean the person who at the time shall be the President of the
Corporation.


 


(t)                                    “Restricted
Shares” shall mean the Shares issued as a result of a Restricted Stock
Award.


 


(u)                                 “Restricted
Stock Award” shall mean a grant of Restricted Shares or of the right to
purchase Restricted Shares pursuant to Section 13 hereof.


 


(v)                                 “Rights”
shall mean Alternative Rights and/or Stock Appreciation Rights granted pursuant
to the Plan.


 

















 


(w)                               “Share”
shall mean a share of common stock, par value $.10 per share, of the
Corporation.


 


(x)                                   “Spread”
shall mean the excess of the Fair Market Value of a Share on the date of
exercise of a Right over the exercise price per Share of such Right.


 


(y)                                 “Stock
Appreciation Rights” shall have the meaning as set forth in Section 9
hereof.


 


(z)                                   “Subsidiary”
shall mean any corporation, limited liability corporation, partnership or
limited partnership, 50% or more of whose stock having general voting power,
membership interests, or capital or profits interests, as the case may be, is
owned by the Corporation, or by another Subsidiary as herein defined, of the
Corporation; provided, however, that for purposes of an Option that is an
incentive stock option to be granted to an employee of a Subsidiary, the term “Subsidiary”
shall mean a subsidiary corporation as defined in Section 424(f) of
the Code.


 


3.                                       Administration.  The Plan shall be administered by the
Compensation Committee of the Board of Directors (the “Committee”), which shall
consist of two or more directors of the Corporation, each of whom shall be a “Non-Employee
Director” within the meaning of Rule 16b-3 under the Exchange Act and an “outside
director” within the meaning of Section 162(m) of the Code.


 


The Committee shall have
full power and authority to administer and interpret the Plan.  Determinations of the Committee as to any
question which may arise with respect to the interpretation of the provisions
of the Plan and Incentive Awards shall be final.  The Committee may authorize and establish
such rules, regulations and revisions thereof not inconsistent with the
provisions of the Plan, as it may deem advisable to make the Plan and Incentive
Awards effective or provide for their administration, and may take such other
action with regard to the Plan and Incentive Awards as it shall deem desirable to
effectuate their purpose.


 


4.                                       Participants.  The class of persons who are potential
recipients of Incentive Awards granted under this Plan shall consist of key
employees and directors of the Corporation or a Subsidiary, as determined by
the Committee in its sole discretion. 
The parties to whom Incentive Awards are granted under this Plan, and
the number of Shares subject to each such Incentive Award, shall be determined
by the Committee in its sole discretion, subject, however, to the terms and
conditions of this Plan.  Notwithstanding
anything contained herein to the contrary, an Eligible Director shall only be
eligible to receive Deferred Stock Awards in accordance with Section 7
hereof.


 


5.                                       Shares.  Subject to the provisions of Section 20
hereof, the Committee may grant Incentive Awards with respect to an aggregate
of up to 2 million Shares, all of which Shares may be either Shares held in
treasury or authorized but unissued Shares, provided, however, that the
foregoing limitation shall not apply to Alternative Rights but shall apply to
any Option with respect to which the Alternative Rights are granted.  The maximum number of Shares which may be the
subject of Incentive Awards granted 


 

















 


during any calendar year to any individual shall not
exceed 500,000 Shares.  If the Shares
that would be issued or transferred pursuant to any Incentive Awards are not
issued or transferred and cease to be issuable or transferable for any reason,
or if Restricted Shares which are subject to a Restricted Stock Award are
forfeited, the number of Shares subject to such Incentive Award will no longer
be charged against the limitation provided for herein and may again be made
subject to Incentive Awards; provided, however, that Shares as to which an
Option has been surrendered in connection with the exercise of an Alternative
Right shall not again be available for the grant of any further Incentive
Awards.  If any portion of a Stock
Appreciation Right expires or is forfeited for any reason prior to being
exercised, the number of Shares subject to the unexercised portion of such
Stock Appreciation Right will no longer be charged against the limitation
provided for herein and may again be made subject to Incentive Awards.  Notwithstanding the preceding, with respect
to any Option and/or Rights granted to any individual who is a “covered
employee” within the meaning of Section 162(m) of the Code that is
canceled, the number of shares subject to such Option and/or Rights shall
continue to count against the maximum number of shares which may be the subject
of Options and Rights granted to such individual during the applicable calendar
year.  For purposes of the preceding
sentence, if, after grant, the exercise price of an Option and/or the base
amount of any Rights is reduced, such reduction shall be treated as a
cancellation of such Option and/or Rights and the grant of a new Option and/or
Rights (if any), and both the cancellation of the Option and/or Rights and the
new Option and/or Rights shall reduce the maximum number of Shares for which
Options and Rights may be granted to the holder of such Option and/or Rights
during the applicable calendar year.  In
the event Shares are withheld by the Corporation to satisfy income or other tax
withholding obligations with respect to any Incentive Award, the Shares
withheld for this purpose shall reduce the maximum number of Shares for which
Options and/or Rights may be granted to the holder of such Option and/or Rights
and shall be charged against the limitations in this Section 5.


 


6.                                       Grant of Options.  The number of Options to be granted to any
Eligible Person (other than an Eligible Director) shall be determined by the
Committee in its sole discretion.


 


At the time an Option is
granted, the Committee may, in its sole discretion, designate whether such
Option (a) is to be considered as an incentive stock option within the
meaning of Section 422 of the Code, or (b) is not to be treated as an
incentive stock option for purposes of this Plan and the Code.  Options with respect to which no designation
is made by the Committee shall be deemed to be incentive stock options to the
extent that the $100,000 limitation described in the succeeding paragraph is
satisfied.  No Option which is intended
to qualify as an incentive stock option shall be granted under this Plan to any
person who, at the time of such grant, is not an employee of the Corporation or
a Subsidiary.


 


Notwithstanding any other
provision of this Plan to the contrary, to the extent that the aggregate Fair
Market Value (determined as of the date an Option is granted) of the Shares
with respect to which Options which are designated as incentive stock options,
and any other incentive stock options, granted to an employee (under this Plan,
or any 


 

















 


other incentive stock option plan maintained by the
Corporation or any Subsidiary that meets the requirements of Section 422
of the Code) first become exercisable in any calendar year exceeds $100,000,
such Options shall be treated as Options which are not incentive stock
options.  This paragraph shall be applied
by taking Options into account in the order in which they are granted.


 


Nothing herein contained
shall be construed to prohibit the issuance of Options at different times to
the same person.


 


An Option agreement
signed by the Chairman of the Board or the President or a Vice President of the
Corporation, attested by the Treasurer or an Assistant Treasurer, or Secretary
or an Assistant Secretary of the Corporation, shall be issued to each person to
whom an Option is granted.  The Option
agreement shall be in the form as may be determined by the Committee from time
to time, and need not be identical with respect to each grantee.


 


7.                                       Grants of Deferred Stock Awards to Eligible
Directors. 
Notwithstanding any other provision of this Plan to the contrary,
Deferred Stock Awards having terms and conditions set forth in Section 15
shall be automatically granted to each Eligible Director in accordance with
this Section 7 without any additional action by the Committee
necessary.  On the first day of each
fiscal year of the Corporation, each member of the Board of Directors who is an
Eligible Director on such date shall be granted a number of Deferred Stock
Awards determined by dividing $100,000 by the Fair Market Value of a Share on
such date (which number shall be rounded down to the next whole number of
Shares).  Each Eligible Director who is
initially elected to the Board of Directors by the Corporation during the
fiscal year shall be granted a number of Deferred Stock Awards, which number of
Shares shall be rounded up to the next whole number of Shares, equal to the
quotient of (i) the product of $100,000 multiplied by a fraction, the
numerator of which shall be the number of days remaining during the fiscal year
and the denominator of which shall be 365, which number of Shares shall be
rounded up to the next whole number of Shares, divided by (ii) the Fair
Market Value of a Share on such Eligible Director’s date of election. In
addition on June 28, 2008, each Eligible Director shall be granted a number
of Deferred Stock Awards, which number of Shares shall be rounded up to the
next whole number of Shares, equal to the quotient of (i) the product of
$100,000 multiplied by a fraction, the numerator of which shall be the number
of days remaining during the fiscal year and the denominator of which shall be
365 and divided by (ii) the Fair Market Value of a Share.


 


8.                                       Option Purchase Price.  The price per Share of the Shares to be
purchased pursuant to the exercise of any Option shall be fixed by the Committee
at the time of grant; provided, however, that in no event shall such purchase
price be less than 100% of the Fair Market Value of a Share on the date of
grant of the Option.


 


9.                                       Grant of Rights.  The Committee, in its sole discretion, shall
have the authority to grant Rights to any Eligible Person (other than an
Eligible Director), which may be granted separately, or in connection with an
Option at the time of the grant of an Option. 
Any Rights granted in connection with an Option (“Alternative Rights”)
shall be 


 

















 


granted with respect to the same number of Shares as
are covered by the Option, subject to adjustment pursuant to the provisions of Section 20
hereof, and may be exercised as an alternative to the exercise of the related
Option.


 


Alternative Rights
granted in connection with an Option shall entitle the holder thereof to
receive Shares from the Corporation, determined as hereinafter provided, only
if and to the extent that the related Option is exercisable, by surrendering
the Option with respect to the number of Shares as to which such Rights are
then exercised.  Such Option, to the
extent surrendered, shall be deemed exercised for purposes of the limitations
under Section 5.  Upon any exercise
of Alternative Rights, the holder thereof shall be entitled to receive a number
of Shares (rounded down to the next whole number of Shares) equal to (i) the
product obtained by multiplying (A) the Spread by (B) the number of
Shares in respect of which the Rights shall have then been so exercised, divided
by (ii) the Fair Market Value of a Share on the date of exercise.


 


Upon the exercise of
Rights granted without relationship to an Option (“Stock Appreciation Rights”),
the holder thereof shall be entitled to receive a number of Shares (rounded
down to the next whole number of Shares) equal to (i) the product obtained
by multiplying (A) the Spread by (B) the number of Shares in respect
of which the Stock Appreciation Rights shall have then been so exercised,
divided by (ii) the Fair Market Value of a Share on the date of exercise.


 


Notwithstanding anything
contained herein, the Committee, in its sole discretion, may limit the amount
payable upon the exercise of Rights.  Any
such limitation shall be determined as of the date of grant and noted in the
Rights agreement evidencing the grant of the Rights.


 


Rights shall be evidenced
by an agreement executed on behalf of the Corporation and by the Eligible
Person to whom the Rights are granted. 
Each Rights agreement shall set forth the number of Shares subject to
the Rights being granted, the exercise price per Share thereof, and such other
terms and conditions as determined by the Committee at the time of grant;
provided, however, that (i) the exercise price per Share of Alternative
Rights shall be equal to the purchase price per Share of the Option related
thereto, and (ii) in no event shall the exercise price per Share of any
Rights be less than 100% of the Fair Market Value of a Share on the date of
grant of such Rights.  The form of
agreement shall be as determined from time to time by the Committee, and need
not be identical with respect to each grantee.


 


10.                                 Duration of Options and Rights.  The duration of any Option or Right granted
under this Plan shall be fixed by the Committee at the time of grant; provided,
however, that no Option or Right shall remain in effect for a period of more
than ten (10) years from the date upon which it is granted.


 


The duration of any
Alternative Rights granted in connection with any Option shall be coterminous
with the duration of the related Option.


 

















 


11.                                 Ten Percent Shareholders.  Notwithstanding any other provision of this
Plan to the contrary, no Option which is intended to qualify as an incentive
stock option may be granted under this Plan to any employee who, at the time
the Option is granted, owns shares possessing more than ten percent (10%) of
the total combined voting power of all classes of stock of the Corporation,
unless the exercise price under such Option is at least 110% of the Fair Market
Value of a Share on the date such Option is granted and the duration of such
Option is no more than five (5) years.


 


12.                                 Exercise of Options and Rights.  Except as otherwise provided herein or in the
holder’s employment agreement (if any) with the Corporation or a Subsidiary, Options
and Rights shall become vested and exercisable by the holder as determined by
the Committee in its sole discretion at the time of grant and as set forth in
the applicable Option and/or Rights agreement (such vesting may be based on
continued employment or service, or upon the achievement of pre-established
corporate or individual performance objectives, or otherwise, including any
combination thereof but in no event shall the vesting period be less than one (1) year
commencing on the date of the grant if based on achievement of pre-established
corporate or individual performance objectives, or otherwise, including any
combination thereof).


 


Notwithstanding the
foregoing, all or any part of any remaining unexercised Options and/or Rights
granted to any Eligible Person may be exercised, subject to Section 19
hereof, in the following circumstances (but in no event, other than the holder’s
death, during the six (6) month period commencing on the date of grant,
and in no event prior to approval of the Plan by shareholders of the
Corporation as provided in Section 26 hereof or after the term of the
Option or Rights has expired): (a) upon the holder’s retirement from the
Corporation and all Subsidiaries on or after his 65th birthday; (b) upon
the Disability or death of the holder; (c) upon a Change of Control while
the holder is in the employ or service of the Corporation; or (d) upon the
occurrence of such special circumstance or event as in the opinion of the
Committee merits special consideration.


 


An Option shall be
exercised by the delivery of a written notice duly signed by the holder thereof
to such effect, together with the full purchase price of the Shares purchased
pursuant to the exercise of the Option, to the Chairman of the Board of
Directors or an officer of the Corporation appointed by the Chairman of the
Board of Directors for the purpose of receiving the same.  Payment of the full purchase price shall be
made as follows: in cash or by check payable to the order of the Corporation;
by delivery to the Corporation of Shares which shall be valued at their Fair
Market Value on the date of exercise of the Option (provided, that a holder may
not use any Shares to pay the purchase price unless the holder has beneficially
owned such Shares for at least six (6) months); or by such other methods
as the Committee may permit from time to time.


 


Within a reasonable time
after the exercise of an Option, the Corporation shall cause to be delivered to
the person entitled thereto, a certificate for the Shares purchased pursuant to
the exercise of the Option.  The
Committee may permit deemed or constructive transfers of Shares in lieu of
actual transfer and physical delivery of certificates.


 

















 


Upon the exercise of an
Option with respect to which Alternative Rights were also granted in relation
thereto, the number of Shares subject to exercise under the related Alternative
Rights shall also be reduced by the number of Shares for which the related
Option was exercised.


 


Alternative Rights or
Stock Appreciation Rights shall be exercised by the delivery of a duly signed
notice in writing to such effect.  Within
a reasonable time thereafter, the Corporation shall cause to be delivered to
the person entitled thereto, a certificate for the number of Shares determined
in accordance with Section 9 hereof. 
Upon the exercise of Alternative Rights, the number of Shares subject to
exercise under the related Option or portion thereof shall be reduced by the
number of Shares represented by the Option or portion thereof surrendered.


 


Notwithstanding any other
provision of the Plan or of any Option or Rights agreement, no Option or Rights
granted pursuant to the Plan may be exercised at any time when the Option or
Rights or the granting or exercise thereof violates any law or governmental
order or regulation.


 


13.                                 Terms and Conditions of Restricted Stock Awards.  The Committee shall have the authority to
grant to any Eligible Person (other than an Eligible Director) a Restricted
Stock Award, subject to the following terms and conditions:


 


(a)                                  All
Restricted Shares granted to or purchased by an Eligible Person pursuant to the
Plan shall be subject to the following conditions:


 


(1)                                  except
as otherwise provided in the holder’s employment agreement (if any) with the
Corporation or a Subsidiary, the Restricted Shares shall be subject to such
transfer restrictions and risk of forfeiture as the Committee shall determine
at the time the Restricted Stock Award is granted, until such specific
conditions are met (which conditions may be based on continued employment or
service, or achievement of pre-established corporate or individual performance
objectives, or otherwise, including any combination thereof), and such
restrictions shall lapse, and the Restricted Shares subject to a Restricted
Stock Award shall vest, as determined by the Committee in its sole discretion
at the time of grant and as set forth in the applicable Restricted Stock Award
agreement but in no event shall the vesting period be less than three (3) years
commencing on the date of the grant if based on continued employment or service
or less than one (1) year commencing on the date of the grant if based on
achievement of pre-established corporate or individual performance objectives,
or otherwise, including any combination thereof;


 


(2)                                  the
Restricted Shares may not be sold, transferred, or otherwise alienated or
hypothecated until the restrictions are satisfied, removed or expire;


 














 


(3)           each certificate representing Restricted
Shares issued pursuant to a Restricted Stock Award under this Plan shall bear a
legend making appropriate reference to the restrictions imposed;


 


(4)           the Committee may impose such other
conditions as it may deem advisable on any Restricted Shares granted to or
purchased by an Eligible Person pursuant to a Restricted Stock Award under this
Plan, including, without limitation, restrictions under the requirements of any
stock exchange upon which such Shares or shares of the same class are then
listed, and under any securities law applicable to such Shares; and


 


(5)           Notwithstanding the foregoing, all
restrictions to which a Restricted Stock Award is subject shall lapse, in the
following circumstances: (a) upon the holder’s retirement from the
Corporation and all Subsidiaries on or after his 65th birthday; (b) upon
the Disability or death of the holder; (c) upon a Change of Control while
the holder is in the employ or service of the Corporation; or (d) upon the
occurrence of such special circumstance or event as in the opinion of the
Committee merits special consideration.


 


(b)           Prior to the satisfaction, expiration or
lapse of all of the restrictions and conditions imposed upon Restricted Shares,
a stock certificate or certificates representing such Restricted Shares shall
be registered in the holder’s name but shall be retained by the Corporation for
the holder’s account.  The holder shall
have the right to vote such Restricted Shares and shall have all other rights
and privileges of a beneficial and record owner with respect thereto,
including, without limitation, the right to receive dividends, distributions
and adjustments with respect thereto; provided, however, that such dividends,
distributions and adjustments shall be retained by the Corporation for the
holder’s account and for delivery to the holder, together with the stock
certificate or certificates representing such Restricted Shares, as and when
said restrictions and conditions shall have been satisfied, expired or lapsed.


 


(c)           A Restricted Stock Award shall be
evidenced by an agreement executed on behalf of the Corporation and by the
Eligible Person to whom the Restricted Stock Award is granted.  The form of Restricted Stock Award agreement
shall be determined from time to time by the Committee, and need not be
identical with respect to each grantee.


 


14.           Restricted Stock Purchase Price. 
The purchase price (if any) per Share for Restricted Shares to be
purchased pursuant to Restricted Stock Awards shall be fixed by the Committee
at the time of the grant of the Restricted Stock Award and shall be set forth
in the applicable Restricted Stock Award agreement.  Payment of any purchase price (if any) shall
be made in cash or by check payable to the order of the Corporation or by such
other method as the Committee may permit. 
If so determined by the Committee, the holder’s performance of services
for the Corporation or a Subsidiary may serve as the


 

















 


consideration for issuance of the Restricted Stock
Award, and no purchase price need be paid by the holder in such event.


 


15.           Deferred Stock Awards. 
The Committee shall have the authority to grant to any Eligible Person
(other than an Eligible Director) a Deferred Stock Award (an Employee Deferred
Stock Award”).  A Deferred Stock Award to
an Eligible Director (a “Director Deferred Stock Award”) shall be granted
pursuant to Section 7.  All Deferred
Stock Awards shall be subject to the following terms and conditions:


 


(a)           Delivery of, and the issuance of
certificates representing, Shares issuable pursuant to a Deferred Stock Award
shall occur upon expiration of the applicable deferral period;


 


(b)           Employee Deferred Stock Awards shall be
subject to such vesting conditions or other restrictions as the Committee may,
in its sole discretion, impose at the time of grant and as set forth in the
applicable Deferred Stock Award agreement (such vesting conditions or other
restrictions may be based on continued employment or service, upon the
achievement of pre-established corporate or individual performance objectives,
or such conditions may lapse upon expiration of a specified deferral period or
at earlier specified times, separately or in combination, in installments, or
otherwise, including any combination thereof, but in no event shall the vesting
period be less than three (3) years if based on continued employment or
service or less than one (1) year if based upon the achievement of
pre-established corporate or individual performance objectives, at the
expiration of a specified deferral period or at earlier times, separately or in
combination, in installments, or otherwise, including any combination thereof);


 


(c)           A Director Deferred Stock Award shall be
evidenced by a Deferred Stock Award agreement. 
Subject to subparagraph (d) below, a Director Deferred Stock Award
shall vest upon the first anniversary of the date of grant under Section 7
provided that the Eligible Director remains in the service or employment of the
Corporation throughout the one year period commencing on the date of grant.


 


(d)           Notwithstanding the foregoing, all
restrictions to which a Deferred Stock Award is subject shall lapse, in the
following circumstances: (i) upon the holder’s retirement from the
Corporation and all Subsidiaries on or after his 65th birthday; (ii) upon
the Disability or death of the holder; (iii) upon a Change of Control
while the holder is in the employ or service of the Corporation; or (iv) upon
the occurrence of such special circumstance or event as in the opinion of the
Committee merits special consideration; and


 


(e)           A Deferred Stock Award shall be evidenced
by an agreement executed on behalf of the Corporation and by the Eligible
Person to whom the Deferred Stock Award is granted.  The form of Deferred Stock Award agreement


 

















 


shall be determined from time to time by the Committee, and need not be
identical with respect to each grantee.


 


16.           Performance Awards. 
The Committee shall have the authority to grant to any Eligible Person a
Performance Award, subject to such terms and conditions as shall be determined
by the Committee in its sole discretion at the time of grant and as set forth
in the applicable Performance Award agreement. 
The value of a Performance Award may be linked to the market value, book
value, net profits or other measure of the value of a Share, or other specific
performance criteria determined appropriate by the Committee, in each case on a
specified date or dates or over any period or periods determined by the
Committee, or may be based upon the appreciation in the market value, book
value, net profits or other measure of the value of a specified number of
Shares over a fixed period or periods determined by the Committee; provided,
however, that the dates or periods described herein shall not be prior to or
less than one (1) year following the date of the grant.  In making such determinations, the Committee
may consider (among such other factors as it deems relevant in light of the
specific type of award) the contributions, responsibilities and other
compensation of the particular Eligible Person. A Performance Award shall be
evidenced by an agreement executed on behalf of the Corporation and by the
Eligible Person to whom the Performance Award is granted. The form of
Performance Award agreement shall be determined from time to time by the
Committee, and need not be identical with respect to each grantee.


 


17.           Consideration for Incentive Awards. 
The Corporation shall obtain such consideration for the grant of an
Incentive Award as the Committee in its discretion may determine.


 


18.           Restrictions on Transferability of Incentive
Awards.  Incentive Awards and all other rights
thereunder shall be non-transferable and non-assignable by the holder thereof
except to the extent that the estate of a deceased holder of an Incentive Award
may be permitted to exercise them. Options and Rights may be exercised or
surrendered during the holder’s lifetime only by the holder thereof.


 


19.           Termination of Employment or Service.


 


(a)           Except as otherwise provided herein, in
the holder’s employment agreement (if any) with the Corporation or a
Subsidiary, or in the applicable Option and/or Rights agreement, all or any
part of any Option and/or Rights, to the extent unexercised, shall terminate
immediately upon the cessation or termination for any reason of the holder’s
employment by, or service as a director of, the Corporation or any Subsidiary,
provided that (except as otherwise provided herein, in the holder’s employment
agreement (if any) with the Corporation or a Subsidiary, or in the applicable
Option and/or Rights agreement) the holder shall have ninety (90) days
following the cessation of the holder’s employment or service with the
Corporation or its Subsidiaries, and no longer, within which to exercise any
unexercised Option and/or Rights that such holder could have exercised on the
day on which such employment or service terminated; and provided, further, that
such exercise must be accomplished prior to the expiration


 

















 


of the term of such Option and/or Rights.  Notwithstanding the foregoing, if the
cessation of employment or service is due to Disability or to death, the holder
or the representative of the Estate or the heirs of a deceased holder shall
have the privilege of exercising the Options and/or Rights which are vested but
unexercised at the time of such Disability or death for a period of time that
is no less than one (1) year from the date of the holder’s Disability or
death.  Notwithstanding the foregoing,
and except as otherwise provided in the holder’s employment agreement (if any)
with the Corporation or a Subsidiary, if the employment or service of any
holder of an Option and/or Rights with the Corporation or a Subsidiary shall be
terminated for Cause, all unexercised Options and/or Rights of such holder
shall terminate immediately upon such termination of the holder’s employment or
service with the Corporation and all Subsidiaries, and a holder of Options
and/or Rights whose employment or service with the Corporation and all
Subsidiaries is so terminated, shall have no right after such termination to
exercise any unexercised Option and/or Rights he might have exercised prior to
the termination of his employment or service with the Corporation and all
Subsidiaries.


 


(b)           Except as otherwise provided in the
holder’s employment agreement (if any) with the Corporation or a Subsidiary or
Sections 13(a)(5) or 15(d) hereof, the Committee shall determine in
its sole discretion at the time of grant of a Restricted Stock Award or a
Deferred Stock Award, the affect, if any, that a termination of the holder’s
employment or service with the Corporation or any Subsidiary shall have on such
Incentive Award, and such terms shall be set forth in the applicable Incentive
Award agreement.  Notwithstanding the
foregoing, and except as otherwise provided in the holder’s employment
agreement (if any) with the Corporation or a Subsidiary, if the employment or
service of any holder of a Restricted Stock Award or a Deferred Stock Award
with the Corporation or a Subsidiary shall be terminated for Cause, then (i) all
Restricted Shares subject to restrictions at the time his employment terminates
(and any dividends, distributions and adjustments retained by the Corporation
with respect thereto), and (ii) any Shares subject to a Deferred Stock
Award with respect to which the deferral period has not expired, shall be
forfeited and any consideration received therefor from the holder shall be
returned to the holder.


 


(c)           Except as otherwise provided in the
holder’s employment agreement (if any) with the Corporation or a Subsidiary,
the Committee shall determine in its sole discretion at the time of grant of a
Performance Award, the affect, if any, that a termination of the holder’s
employment or service with the Corporation or any Subsidiary shall have on such
Performance Award, and such terms shall be set forth in the applicable
Performance Award agreement. Notwithstanding the foregoing, and except as
otherwise provided in the holder’s employment agreement (if any) with the
Corporation or a Subsidiary, if the employment or service of any holder of a
Performance Award with the Corporation or a Subsidiary shall be terminated for
Cause, then such holder’s Performance Award shall terminate immediately upon
such termination of the holder’s employment or service with the Corporation and
all Subsidiaries.


 

















 


(d)           Notwithstanding anything contained herein to the
contrary, an individual who changes his or her status (e.g., from that of an
employee to a director or consultant, or vice versa) shall not be deemed to
have ceased being in the employ or service, as applicable, of the Corporation
or any Subsidiary for purposes of this Section 19, nor shall a transfer of
employment among the Corporation and any Subsidiary be considered a termination
of employment; provided, however, if the recipient of an incentive stock option
ceases being an employee but continues as a consultant or director, such
incentive stock options shall not be deemed to be incentive stock options three
months after the date of such cessation.


 


(d)           Notwithstanding anything
contained herein to the contrary, the Committee shall have discretion to extend
the post-termination exercisability period of any Option or Right longer than
is otherwise provided for above; provided, however, that in no event may an extension
of the exercise period exceed the term of the Option or Right set forth in Section 10.


 


20.           Adjustment Provision. 
If, prior to the complete exercise of any Option and/or Rights, or prior
to the satisfaction, expiration or lapse of all of the restrictions and
conditions imposed pursuant to a Restricted Stock Award or Deferred Stock
Award, there shall be declared and paid a stock dividend upon the Shares or if
the Shares shall be split up, converted, exchanged, reclassified, or in any way
substituted for:


 


(a)           in the case of an Option, then the
Option, to the extent that it has not been exercised, shall entitle the holder
thereof upon the future exercise of the Option to such number and kind of
securities or cash or other property subject to the terms of the Option to
which he would have been entitled had he actually owned the Shares subject to
the unexercised portion of the Option at the time of the occurrence of such
stock dividend, split-up, conversion, exchange, reclassification or
substitution, and the aggregate purchase price upon the future exercise of the
Option shall be the same as if the originally optioned Shares were being
purchased thereunder; provided, however, that with respect to an Option that is
an incentive stock option, such adjustment shall be made in accordance with Section 424
of the Code;


 


(b)           in the case of an Alternative Right, then
the number of Shares subject to the Alternative Right, to the extent that it
has not been exercised, shall be adjusted to equal the number of Shares to
which the holder would have been entitled had he actually owned the Shares
subject to the unexercised portion of the Alternative Right at the time of the
occurrence of such stock dividend, split-up, conversion, exchange,
reclassification or substitution, and the aggregate exercise price shall
proportionately be adjusted so that the aggregate exercise price of such
Alternative Right immediately prior to such an event shall be equal to the
aggregate exercise price of the adjusted Alternative Right immediately
following the occurrence of such event;


 

















 


(c)           in the case of a Stock Appreciation
Right, then the number of Shares subject to the Stock Appreciation Right, to
the extent that it has not been exercised, shall be adjusted to equal the
number of Shares to which the holder would have been entitled had he actually
owned the Shares subject to the unexercised portion of the Stock Appreciation
Right at the time of the occurrence of such stock dividend, split-up,
conversion, exchange, reclassification or substitution, and the aggregate
exercise price shall proportionately be adjusted so that the aggregate exercise
price of such Stock Appreciation Right immediately prior to such an event shall
be equal to the aggregate exercise price of the adjusted Stock Appreciation
Right immediately following the occurrence of such event;


 


(d)           in the case of a Restricted Share issued
pursuant to a Restricted Stock Award, the holder of such Restricted Stock Award
shall receive, subject to the same restrictions and other conditions of such
Restricted Stock Award as determined pursuant to the provisions of Section 13,
the same securities or other property as are received by the holders of the
Corporation’s Shares pursuant to such stock dividend, split-up, conversion,
exchange, reclassification or substitution; and


 


(e)           in the case of a Deferred Stock Award,
the holder shall receive, at such time as would otherwise apply under such
Deferred Stock Award, such number and kind of securities or cash or other
property to which he would have been entitled had he actually owned the Shares
subject to the Deferred Stock Award at the time of the occurrence of such stock
dividend, split-up, conversion, exchange, reclassification or substitution.


 


With respect to any
Incentive Awards other than Rights, any fractional shares or securities
issuable as a result of such adjustment shall be payable in cash based upon the
Fair Market Value of such shares or securities at the time such shares or
securities would have otherwise been issued. With respect to any Rights, any
fractional shares or securities issuable as a result of such adjustment shall
be rounded down to the nearest whole number of Shares. If any such event should
occur, the number of Shares with respect to which Incentive Awards remain to be
issued, or with respect to which Incentive Awards may be reissued, shall be
adjusted in a similar manner.


 


In addition to the
adjustments provided for in the preceding paragraph, upon the occurrence of any
of the events referred to in said paragraph prior to the complete payments
pursuant to a Performance Award, the Committee, in its sole discretion, shall
determine the amount of cash and/or the number of Shares which shall be paid to
the holder of a Performance Award at such time as payment would otherwise be
made, so that there shall be no increase or dilution in the cash and/or value
of the Shares or other property to which the holder shall be entitled by reason
of such events.


 


Notwithstanding any other
provision of the Plan, in the event of a recapitalization, merger,
consolidation, rights offering, separation, reorganization or liquidation, or
any other change in the corporate structure or outstanding shares, the
Committee, in its sole discretion, may make such adjustments to the number of
Shares and the class of shares


 

















 


available hereunder or to any outstanding Incentive
Awards as shall be necessary to prevent dilution or enlargement of rights,
and/or make provision for the payment of cash (or other property if received as
consideration) in cancellation of any outstanding Incentive Award.


 


21.           Issuance of Shares and Compliance with Securities
Act.  The Corporation may postpone the issuance and
delivery of Shares pursuant to the grant or exercise of any Incentive Award
until (a) the admission of such Shares to listing on the principal
securities exchange or securities trading market on which Shares of the
Corporation of the same class are then listed or approved for trading, and (b) the
completion of such registration or other qualification of such Shares under any
State or Federal law, rule or regulation as the Corporation shall
determine to be necessary or advisable. 
Any holder of an Incentive Award shall make such representations and
furnish such information as may, in the opinion of counsel for the Corporation,
be appropriate to permit the Corporation, in the light of the then existence or
non-existence with respect to such Shares of an effective Registration
Statement under the Securities Act of 1933, as from time to time amended (the “Securities
Act”), to issue the Shares in compliance with the provisions of the Securities
Act or any comparable act.  The
Corporation shall have the right, in its sole discretion, to legend any Shares
which may be issued pursuant to the grant or exercise of any Incentive Award,
or may issue stop transfer orders in respect thereof.


 


22.           Code Section 162(m). 
Notwithstanding any other provision of the Plan, if the Committee
determines at the time an Incentive Award is granted to an Eligible Person who
is, or is likely to be, as of the end of the tax year in which the Corporation
would claim a tax deduction in connection with such Incentive Award, a “covered
employee” (as defined under Section 162(m) of the Code), then the
Committee may provide that this Section 22 is applicable to such Incentive
Award. If the Committee determines that an Incentive Award is subject to this Section 22,
the lapsing of restrictions thereon and the distribution of cash, Shares or
other property pursuant thereto, as applicable, shall be subject to the
achievement of one or more objective performance goals established by the
Committee, which shall be based on the attainment of specified levels of one or
any combination of the following: revenue growth; booking of orders; earnings,
or some derivative thereof (including earnings before interest and taxes,
earnings before interest, taxes, depreciation and amortization, or earnings per
share); operating income; pre- or after-tax income; cash flow; net earnings;
return on equity; return on capital (including return on total capital or
return on invested capital); return on assets or net assets; economic value
added (or an equivalent metric); share price performance; total shareholder
return; improvement in or attainment of expense levels; and improvement in or
attainment of working capital levels of the Corporation or any Subsidiary,
division, business unit or product line of the Corporation for or within which
the Eligible Person is primarily employed. Such performance goals also may be
based solely by reference to the Corporation’s performance or the performance
of a Subsidiary, division, business unit or product line of the Corporation, or
based upon the relative performance of other companies or upon comparisons of
any of the indicators of performance relative to other companies. The Committee
may also exclude the impact of an event or occurrence which the Committee
determines should appropriately be excluded, including (i) restructurings,


 

















 


discontinued operations, extraordinary items, and
other unusual or non-recurring charges, (ii) an event either not directly
related to the operations of the Corporation or not within the reasonable
control of the Corporation’s management, or (iii) the cumulative effects
of tax or accounting changes in accounting standards required by generally
accepted accounting principles.  Such
performance goals shall be set by the Committee within the time period
prescribed by, and shall otherwise comply with the requirements of, Section 162(m) of
the Code, and the regulations thereunder.


 


23.           Income Tax Withholding. 
If the Corporation or a Subsidiary shall be required to withhold any
amounts by reason of any Federal, State, local or foreign tax rules or
regulations in respect of any Incentive Award, the Corporation or the Subsidiary
shall be entitled to take such action as it deems appropriate in order to
ensure compliance with such withholding requirements.  In order to facilitate payment by the holder
of an Incentive Award of his withholding obligations with respect to the Incentive
Award, the Corporation or Subsidiary may, at its election, (a) deduct from
any cash payment otherwise due to the holder, the appropriate withholding
amount, (b) require the holder to pay to the Corporation or Subsidiary in
cash the appropriate withholding amount, (c) permit the holder to elect to
have the Corporation withhold a portion of the Shares otherwise to be delivered
with respect to such Incentive Award, the Fair Market Value of which is equal
to the minimum statutory withholding amount, or (d) permit the holder to
elect to deliver to the Corporation Shares already owned by the holder for at
least six (6) months, the Fair Market Value of which is equal to the
appropriate withholding amount; provided, however, that if Shares are to be
withheld by the Corporation for purposes of satisfying such withholding
obligations, the number of Shares withheld shall be calculated using the
minimum statutory withholding rates.


 


24.           Amendment of the Plan. 
Except as hereinafter provided, the Board of Directors or the Committee
may at any time withdraw or from time to time amend the Plan as it relates to,
and the terms and conditions of, any Incentive Awards not theretofore granted,
and the Board of Directors or the Committee may at any time withdraw or from
time to time amend the Plan as it relates to, and the terms and conditions of,
any outstanding Incentive Award, provided that any amendment of an outstanding
Incentive Award that would adversely affect the rights of the holder thereof
shall not be effected without the holder’s consent. Notwithstanding the
foregoing, any material amendment of the Plan by the Board of Directors or the
Committee, including an amendment which would increase the number of Shares
issuable under the Plan or to any individual or change the class of Eligible
Persons, shall be subject to the approval of the shareholders of the
Corporation within one (1) year of such amendment.


 


25.           No Right of Employment or Service. 
Nothing contained herein or in an Incentive Award agreement shall be
construed to confer on any employee or director any right to be continued in
the employ of the Corporation or any Subsidiary or as a director of the
Corporation, or derogate from any right of the Corporation and any Subsidiary
to retire, request the resignation of, or discharge such employee or director
(without or with pay), at any time, with or without Cause.


 

















 


26.           Effective Date of the Plan. 
This Plan is conditioned upon its approval by the shareholders of the
Corporation on or before April 18, 2006; except that this Plan is adopted
and approved by the Board of Directors effective April 18, 2005 to permit
the grant of Incentive Awards prior to the approval of the Plan by the
shareholders of the Corporation as aforesaid. In the event that this Plan is
not approved by the shareholders of the Corporation as aforesaid, this Plan and
any Incentive Awards granted hereunder shall be void and of no force or effect.


 


27.           Final Grant Date. 
No Incentive Award shall be granted under the Plan after April 18,
2015.


 


IN WITNESS WHEREOF, the Corporation has caused this Plan,
as amended and restated in the manner presented, to be executed by its duly
authorized officer as of
                          ,
2009.


 


 


	
   

  	
  THE CHILDREN’S PLACE RETAIL STORES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven Balasiano

  
	
   

  	
  Title:

  	
  Senior Vice President, General Counsel and Chief
  Administrative Officer