exh101mar232009.htm


    
      
         


      

      
         


        
          
EXHIBIT
10.1

      

      
         


      

    


    CHARMING
SHOPPES, INC.

    2004
STOCK AWARD AND INCENTIVE PLAN

    STOCK
APPRECIATION RIGHTS AGREEMENT

     

    Agreement
dated as of ________________, 2009 (the “Grant Date”) between CHARMING SHOPPES,
INC. (the “Company”) and _________________ (the “Employee”).

     

    1. Grant of SAR; Consideration;
Employee Acknowledgments.

     

    The
Company hereby confirms the grant, under the Company’s 2004 Stock Award and
Incentive Plan (the “Plan”), to the Employee on the Grant Date of a stock
appreciation right (the “SAR”) with respect to ____ shares of the Company’s
common stock, par value $.10 per share (the “Shares”).  The SAR
represents the right to receive, at exercise, a number of Shares with a then
Fair Market Value equal to the appreciation in value of the Shares over the base
amount.  The base amount is $_________ per share, which is the Fair
Market Value of a Share on the Grant Date (the “Base Amount”).

     

    The
Employee shall be required to pay no consideration for the grant of the SAR
except for his or her agreement to provide services to the Company prior to
exercise and his or her agreement to abide by the terms set forth in the Plan,
this Stock Appreciation Rights Agreement (the “Agreement”), and any Rules and
Regulations under the Plan.  The Employee acknowledges and agrees that
(i) the SAR is nontransferable, except as provided in Section 9 hereof and in
the Plan, (ii) the SAR is subject to forfeiture in the event of Employee’s
termination of employment in certain circumstances, as specified in Section 7
hereof, and (iii) sales of Shares will be subject to the Company’s policies
regulating trading by employees, including any applicable “blackout” or other
designated periods in which sales of Shares are not permitted.

     

    2. Incorporation of Plan by
Reference.

     

    The SAR
has been granted to the Employee under the Plan.  All of the terms,
conditions and other provisions of the Plan are hereby incorporated by reference
into this Agreement.  Capitalized terms used in this Agreement but not
defined herein shall have the same meanings as in the Plan.  If there
is any conflict between the provisions of this Agreement and the provisions of
the Plan, the provisions of the Plan shall govern.  The Employee
hereby accepts the grant of the SAR, acknowledges receipt of the Plan, and
agrees to be bound by all the terms and provisions hereof and thereof (as
presently in effect or hereafter amended), and by all decisions and
determinations of the Board or Committee under the Plan.

     

    3. Date When
Exercisable.

     

    (a) This SAR
may be exercised only if and to the extent that it has become exercisable as
specified in this Agreement.  Subject to Sections 6 and 7 below, and
all other terms and conditions of this Agreement, this SAR shall become
exercisable as follows:

     

     

    
      
        
        

      

      
         

        
          

        

      

      
        
        

      

    

     

    
      
        
          
            	
                    Vesting Date

                  	 	
                    Exercisable SAR

                  
	 
      	 	 
      
	
                    _________________,
      2011

                  	 	
                    40%

                  
	
                    _________________,
      2012

                  	 	
                    30%

                  
	
                    _________________,
      2013

                  	 	
                    30%

                  


          

        

      

    

    


    (b) The
number of Shares with respect to which the SAR may be exercised shall be
cumulative but shall not exceed 100% of the Shares subject to the
SAR.  If the foregoing schedule would produce fractional Shares, the
number of Shares for which the SAR becomes exercisable shall be rounded to the
nearest whole Share.  The SAR shall expire at 5:00 p.m. on the day
before the seventh anniversary of the Grant Date, unless the SAR terminates on
an earlier date as provided herein.

     

    4. Method of
Exercise.

     

    (a) The SAR
may be exercised, to the extent the SAR is then vested and exercisable, by
delivery to and receipt by the Secretary of the Company at 3750 State Road,
Bensalem, Pennsylvania 19020, of a written notice, signed by the Employee,
specifying the portion of the vested SAR that the Employee wishes to
exercise.  Simultaneous with or as soon as practicable after the
receipt of such notice, the Company shall deliver to the Employee a number of
whole Shares that will be determined by dividing the Stock Appreciation by the
Fair Market Value of a Share on the date of exercise, less applicable tax
withholding.  “Stock Appreciation” shall mean the amount that results
from multiplying (i) the number of Shares as to which the SAR is exercised by
(ii) the amount by which the Fair Market Value of a Share on the date of
exercise exceeds the Base Amount.  Only whole Shares will be delivered
pursuant to the exercise of the SAR.

     

    (b) Upon
exercise of the SAR, the Company will deliver a stock certificate for the Shares
to be delivered, with any requisite legend affixed.  Such exercise may
include instructions to the Company to deliver Shares due upon exercise of the
SAR to any registered broker or dealer designated by the Committee in lieu of
delivery to the Employee.  Such instructions must designate the
account into which the Shares are to be deposited.  The method of
exercise and related matters governed by this Section 4 shall be subject to
Rules and Regulations adopted by the Committee and in effect at the time the
Employee’s notice of exercise is received by the Company; such Rules and
Regulations may vary from or limit the procedures specified in this Section 4,
and may specify other methods of exercise.  Upon exercise of any
portion of the SAR, the exercised portion of the SAR shall terminate and cease
to be outstanding.

     

    (c) If, on
the date on which the vested SAR will terminate according to its terms, the
Employee has not given the Company written notice of exercise, and if the Stock
Appreciation amount is a positive number, then the outstanding vested portion of
the SAR shall be automatically exercised and taxes shall be withheld as
described in Section 5 below.

     


    
      
         


      

      
        2

        
          

        

      

      
         


      

    


    5. Tax
Withholding.

     

    The
Company will withhold from the Shares to be delivered upon the exercise of the
SAR a sufficient number of such Shares to satisfy the minimum federal, state and
local tax withholding obligations relating to the SAR exercise.  The
Shares withheld will be valued at the Fair Market Value on the date of exercise,
determined in such manner as may be specified under the Plan.

     

    6. Change of Control
Provisions; Definitions.

     

    (a) The
following provisions shall apply in the event of a Change of
Control:

     

    (i) In the
event of a Change of Control at a time when the Employee is employed by the
Company or any of its subsidiaries, if the acquiring company does not convert
the Employee’s outstanding SAR to a stock appreciation right with respect to the
stock of the acquiring company (or the parent of the acquiring company, if the
acquiror is a subsidiary) that has the same economic value, vesting provisions
and other terms as the Employee’s outstanding SAR, this SAR shall become fully
vested and exercisable immediately prior to the occurrence of such Change of
Control.

     

    (ii) If the
Employee’s employment is terminated as a result of a Qualifying Termination
which occurs upon or within 24 months following a Change of Control, the SAR
shall become fully vested and exercisable on the date of the Qualifying
Termination (to the extent that it is not already vested).

     

    (b) Exercise after a Change of
Control.  In the event of the Employee’s termination of
employment after a Change of Control, the vested SAR, to the extent then
outstanding, shall be exercisable for the applicable time period described in
Section 7(a)(iii), (iv), (v), (vi) or (vii) (determined without regard to any
requirement that the termination occur at least one year after the Grant
Date).

     

    (c) Other
Actions.  In the event of a Change of Control, the Committee
may make such adjustments and take such other actions with respect to
outstanding SARs as the Committee deems appropriate pursuant to Section 10(c) of
the Plan.

     

    (d) Definitions of Certain
Terms.  For purposes of this Agreement, the following
definitions shall apply:

     

    (i) “Beneficial Owner,”
“Beneficially Owns,” and “Beneficial Ownership” shall have the meanings ascribed
to such terms for purposes of Section 13(d) of the Exchange Act and the rules
thereunder, except that, for purposes of this Section 6, “Beneficial Ownership”
(and the related terms) shall include Voting Securities that a Person has the
right to acquire pursuant to any agreement, or upon exercise of conversion
rights, warrants, options or otherwise, regardless of whether any such right is
exercisable within 60 days of the date as of which Beneficial Ownership is to be
determined.

     


    
      
         


      

      
        3

        
          

        

      

      
         


      

    


    (ii) “Cause” shall
mean:  (1) the Employee’s willful and continued failure to
substantially perform his or her duties with the Company (other than any such
failure resulting from a Permanent Disability or occurring after issuance by the
Employee of a Notice of Termination), after a written demand for substantial
performance is delivered to the Employee that specifically identifies the manner
in which the Company believes that the Employee has willfully failed to
substantially perform his or her duties, and after the Employee has failed to
resume substantial performance of his or her duties on a continuous basis within
30 calendar days of receiving such demand; (2) the Employee’s willfully engaging
in conduct (other than conduct covered under (1) above) which is demonstrably
and materially injurious to the Company, monetarily or otherwise; or (3) the
Employee’s having been convicted of a felony.  For purposes of this
subparagraph, no act, or failure to act, on the Employee’s part shall be deemed
“willful” unless done, or omitted to be done, by the Employee not in good faith
and without reasonable belief that the action or omission was in the best
interests of the Company.

     

    (iii) “Change of Control” means and
shall be deemed to have occurred if

     

    (1) any
Person, other than the Company or a Related Party, acquires directly or
indirectly the Beneficial Ownership of any Voting Security of the Company and
immediately after such acquisition such Person has, directly or indirectly, the
Beneficial Ownership of Voting Securities representing 50 percent or more of the
total voting power of all the then-outstanding Voting Securities;
or

     

    (2) those
individuals who as of Grant Date constitute the Board or who thereafter are
elected to the Board and whose election, or nomination for election, to the
Board was approved by a vote of at least two-thirds of the directors then still
in office who either were directors as of Grant Date or whose election or
nomination for election was previously so approved, cease for any reason to
constitute a majority of the members of the Board; or

     

    (3) there is
consummated a merger, consolidation, recapitalization or reorganization of the
Company, a reverse stock split of outstanding Voting Securities, or an
acquisition of securities or assets by the Company (a “Transaction”), other than
a Transaction which would result in the holders of Voting Securities having at
least 80 percent of the total voting power represented by the Voting Securities
outstanding immediately prior thereto continuing to hold Voting Securities or
voting securities of the surviving entity having at least 60 percent of the
total voting power represented by the Voting Securities or the voting securities
of such surviving entity outstanding immediately after such Transaction and in
or as a result of which the voting rights of each Voting Security relative to
the voting rights of all other Voting Securities are not altered;
or

     

    (4) there is
implemented or consummated a plan of complete liquidation of the Company or sale
or disposition by the Company of all or substantially all of the Company’s
assets other than any such transaction which would result in Related Parties
owning or acquiring more than 50 percent of the assets owned by the Company
immediately prior to the transaction.

     


    
      
         


      

      
        4

        
          

        

      

      
         


      

    


    (iv) “Good Reason” shall mean,
without the Employee’s express written consent, the occurrence of any one or
more of the following:

     

    (1) A
material diminution of the Employee’s authorities, duties or responsibilities as
an employee of the Company;

     

    (2) A
material change in the geographic location at which the Employee must perform
services; for purposes of this Agreement, a material change means the Company
requires the Employee to be based at a location which is at least 50 miles
farther from the Employee’s then current primary residence than is the
Employee’s then current office location;

     

    (3) A
material diminution by the Company in the Employee’s base salary as in effect on
the Grant Date or as the same shall be increased from time to time;
or

     

    (4) A
material breach by the Company of this Agreement or any written severance
agreement in effect between the Employee and the Company.

     

    Notwithstanding
the foregoing, the Employee shall not have Good Reason for termination if,
within 60 days after the date on which the Employee gives a Notice of
Termination, the Company corrects the action or failure to act that constitutes
the grounds for termination for Good Reason as set forth in the Employee’s
Notice of Termination.  If the Company does not correct the action or
failure to act, the Employee must terminate his or her employment within 30 days
after the end of the cure period, in order for the termination to be considered
a Good Reason termination.  The existence of Good
Reason shall not be affected by the Employee’s temporary incapacity due to
physical or mental illness not constituting a Permanent
Disability.

     

    (v) “Notice of Termination” means
a written notice which (1) shall indicate the specific termination provision in
this Agreement relied upon, and shall set forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of the Employee’s
employment under the provision so indicated, and (2) shall be provided by the
Employee within 30 days after the event giving rise to the termination of
employment by the Employee for Good Reason.

     

    (vi) “Qualifying Termination” means
the occurrence of any one or more of the following events (as evidenced by a
Notice of Termination):

     

    (1) A
termination of the Employee’s employment by the Company for reasons other than
Cause, as evidenced by a Notice of Termination delivered by the Company to the
Employee; or

     

    (2) A
termination by the Employee for Good Reason, as evidenced by a Notice of
Termination delivered by the Employee to the Company.

     


    
      
         


      

      
        5

        
          

        

      

      
         


      

    


    (vii) “Permanent Disability” means
the complete and permanent inability by reason of illness or accident to perform
the duties of the occupation at which the Employee was employed when such
disability commenced.

     

    (viii) “Person” shall have the
meaning ascribed for purposes of Section 13(d) of the Exchange Act and the rules
thereunder.

     

    (ix) “Related Party” means (1) a
majority-owned subsidiary of the Company; or (2) a trustee or other fiduciary
holding securities under an employee benefit plan of the Company or any
majority-owned subsidiary of the Company; or (3) a corporation owned directly or
indirectly by the shareholders of the Company in substantially the same
proportion as their ownership of Voting Securities; or (4) if, prior to any
acquisition of a Voting Security which would result in any Person Beneficially
Owning more than ten percent of any outstanding class of Voting Security and
which would be required to be reported on a Schedule 13D or an amendment
thereto, the Board approved the initial transaction giving rise to an increase
in Beneficial Ownership in excess of ten percent and any subsequent transaction
giving rise to any further increase in Beneficial Ownership; provided, however,
that such Person has not, prior to obtaining Board approval of any such
transaction, publicly announced an intention to take actions which, if
consummated or successful (at a time such Person has not been deemed a “Related
Party”), would constitute a Change of Control.

     

    (x) “Retirement” means the
voluntary termination of the Employee’s employment by the Employer on or after
the date the Employee has attained the age of 62 immediately after which the
Employee is not employed by the Company or any subsidiary.

     

    (xi) ”Voting Securities” means any
securities of the Company which carry the right to vote generally in the
election of directors.

     

    7. Termination of
Employment.

     

    (a) This SAR
shall terminate and no longer be exercisable at the earlier of (i) the scheduled
expiration time of the SAR, as set forth in Section 3(b) above, or (ii) the
earliest time specified below at or following a termination of employment of the
Employee.  In the event of termination of employment before a Change
of Control, the SAR shall be exercisable as follows:

     

    (i) The SAR
shall terminate at the time of voluntary or involuntary termination of the
Employee’s employment with the Company and its subsidiaries for any reason at
any time prior to the expiration of one year after the Grant Date of this SAR,
other than by reason of the Employee’s death, Permanent Disability or
Retirement.

     

    (ii) The SAR
shall terminate at the time of the involuntary termination for Cause of the
Employee’s employment with the Company and its subsidiaries in which event the
SAR shall no longer be exercisable.

     


    
      
         


      

      
        6

        
          

        

      

      
         


      

    


    (iii) The SAR
shall continue in effect until the expiration of 90 days after the voluntary
termination of the Employee’s employment with the Company and its subsidiaries,
other than on account of Retirement, at any time after the expiration of one
year after the Grant Date of this SAR.  During such 90 day period,
this SAR shall be exercisable only to the extent that it was exercisable at the
date of the Employee’s termination of employment.

     

    (iv) The SAR
shall continue in effect until the expiration of 90 days after the involuntary
termination of the Employee’s employment, other than for reasons of Cause or
Permanent Disability, with the Company and its subsidiaries at any time after
the expiration of one year after the Grant Date of this SAR.  During
such 90 day period, this SAR shall be exercisable to purchase the number of
Shares as to which the SAR was exercisable at the date of the Employee’s
termination of employment, plus the number of additional Shares (if any) as to
which the SAR would have become exercisable within 90 days after such
involuntary termination pursuant to Section 3(a) in the absence of a termination
(but disregarding any other event occurring prior to that date).

     

    (v) The SAR
shall continue in effect until the expiration of one year after the Employee’s
termination of employment upon Retirement.  During such one year
period, this SAR shall be exercisable to purchase the number of Shares as to
which the SAR was exercisable at the date of Retirement, plus the number of
additional Shares (if any) equal to the product of (i) the number of Shares as
to which the SAR would have become exercisable on the next vesting date pursuant
to Section 3(a) after the date of Retirement in the absence of a termination
(but disregarding any other event occurring prior to that date), and (ii) a
fraction, the numerator of which shall be the number of full and partial months
that the Employee has been employed by the Company or any of its subsidiaries
between the Grant Date and the date of Retirement and the denominator of which
shall be the number of full or partial months between the Grant Date and the
next vesting date pursuant to Section 3(a) after the date of
Retirement.

     

    (vi) The SAR
shall continue in effect until the expiration of one year after the Employee’s
death if the Employee dies while employed by the Company or any of its
subsidiaries.  During such one year period, this SAR shall be
exercisable to purchase the number of Shares as to which the SAR was exercisable
at the date of the Employee’s death, plus the number of additional shares (if
any) as to which the SAR would have become exercisable within 180 days from the
date of the Employee’s death pursuant to Section 3(a) but for the death of the
Employee (but disregarding any other event occurring prior to that
date).

     

    (vii) The SAR
shall continue in effect until the expiration of one year after the termination
of the Employee’s employment with the Company and its subsidiaries by reason of
the Employee’s Permanent Disability.  During such one year period,
this SAR shall be exercisable to purchase the number of Shares as to which the
SAR was exercisable at the date of the Employee’s Permanent Disability, plus the
number of additional shares (if any) as to which the SAR would have become
exercisable within 180 days from the date of the Employee’s Permanent Disability
pursuant to Section 3(a) but for the Permanent Disability of the Employee (but
disregarding any other event occurring prior to that date).

     


    
      
         


      

      
        7

        
          

        

      

      
         


      

    


    (b) Any
portion of the SAR that is not exercisable at the date of termination of
employment and that does not become exercisable pursuant to Section 7(a) shall
terminate as of the Employee’s termination date.  Notwithstanding
anything in this Section 7 to the contrary, in no event may the SAR be exercised
after the expiration date of the SAR as set forth in Section 3(b).

     

    (c) Except as
provided in Section 8, an Employee shall not be deemed to have terminated
employment for purposes of this Section 7 if his or her employment terminates
with the Company but thereafter continues with one of the Company’s subsidiaries
or terminates with a subsidiary but thereafter continues with the Company or
another subsidiary.

     

    8. Change in Job
Status.

     

    Should
the Employee’s job classification change, and as a result of such change the
Committee determines, in its sole discretion and prior to any Change of Control,
that the Employee is no longer employed in a position which would enable the
Employee to contribute to the success of the Company on at least as great a
level as that to which the Employee was enabled by his prior job classification,
then the Committee may deem the Employee’s employment with the Company or its
subsidiaries to have been terminated involuntarily (but not for Cause) in
respect of all or a portion of this SAR.

     

    9. Limits on Transfer of SARs;
Beneficiaries.

     

    No right
or interest of a participant in this SAR shall be pledged, encumbered or
hypothecated to or in favor of any third party or shall be subject to any lien,
obligation or liability of the Employee to any third party.  This SAR
shall not be transferable to any third party by the Employee otherwise than by
will or the laws of descent and distribution, and this SAR shall be exercisable,
during the lifetime of the Employee, only by the Employee; provided, however,
that the Employee will be entitled to designate a beneficiary or beneficiaries
to exercise his or her rights under this SAR upon the death of the Employee, in
the manner and to the extent permitted by the Committee under Rules and
Regulations adopted by the Committee under the Plan, and the Committee may
permit transfers otherwise to the extent permitted under the Plan.

     

    10. Investment
Representation.

     

    Unless,
at the time of any exercise of this SAR, the issuance and delivery of Shares
hereunder to the Employee is registered under a then-effective registration
statement under the Securities Act of 1933, as amended (the “Securities Act”),
and complies with all applicable registration requirements under state
securities laws, the Employee shall provide to the Company, as a condition to
the valid exercise of this SAR and the delivery of any certificates representing
Shares, appropriate evidence, satisfactory in form and substance to the Company,
that he or she is acquiring the Shares for investment and not with a view to the
distribution of the Shares or any interest in the Shares, and a representation
to the effect that the Employee shall make no sale or other disposition of the
Shares unless (i) the Company shall have received an opinion of counsel
satisfactory to it in form and substance that such sale or other disposition may
be made without

     


    
      
         


      

      
        8

        
          

        

      

      
         


      

    


    registration
under the then-applicable provisions of the Securities Act, the related rules
and regulations of the Securities and Exchange Commission, and applicable state
securities laws and regulations, or (ii) the sale or other disposition of the
Shares shall be registered under a currently effective registration statement
under the Securities Act and complies with all applicable registration
requirements under state securities laws.  The certificates
representing the Shares may bear an appropriate legend giving notice of the
foregoing restriction on transfer of the Shares, and any other restrictive
legend deemed necessary or appropriate by the Committee.

     

    11. Miscellaneous.

     

    This
Agreement shall be binding upon the heirs, executors, administrators and
successors of the parties.  This Agreement constitutes the entire
agreement between the parties with respect to the SAR, and supersedes any prior
agreements or documents with respect to the SAR.  No amendment,
alteration, suspension, discontinuation or termination of this Agreement which
may impose any additional obligation upon the Company or impair the rights of
the Employee with respect to the SAR shall be valid unless in each instance such
amendment, alteration, suspension, discontinuation or termination is expressed
in a written instrument duly executed in the name and on behalf of the Company
and by the Employee.

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      	
                                              CHARMING
      SHOPPES, INC.

                                            
	 
	 
	 
	 
	
                                              BY:________________________

                                            
	
                                              (Authorized
      Officer)

                                            
	 
	 
	 
	 
	
                                              EMPLOYEE:

                                            
	 
	 
	 
	
                                              ___________________________

                                            


                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    


     

    


     

    


     

    


     


    
      
         


      

      
        9