Exhibit 10.1


 


CHRISTOPHER &
BANKS CORPORATION


2009
QUALIFIED ANNUAL INCENTIVE PLAN


 


Section 1.  Establishment and Purpose


 


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


 


Section 2.  Certain Definitions


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


Section 3.  Administration


 


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


 


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


 


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


 


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


 

















 


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


 


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


 


	
  ·                  net sales;

  ·                  net sales per foot;

  ·                  revenue per employee;

  ·                  revenue growth;

  ·                  revenue growth by one or more
  merchandise categories;

  ·                  comparable store sales growth;

  ·                  operating income (before or after
  taxes);

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

  ·                  earnings per share;

  ·                  gross profits;

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

  ·                  operating margins;

  ·                  gross margins;

  ·                  return on equity;

  ·                  total shareholder return;

  ·                  return on assets or net assets;

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

  ·                  price-to-earnings ratio;

  ·                  economic value-added models or
  equivalent metrics;

  ·                  comparisons with one or more stock
  market indices;

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

  	
   

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

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

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

  ·                  expense ratios;

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

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

  ·                  debt reductions;

  ·                  shareholder equity;

  ·                  market share;

  ·                  net new store openings; and

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

  



 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


Section 5.  Amendment and Termination of Plan


 


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


 


Section 6.  Effective Date of the Plan


 


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


 


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