Exhibit 10.1


 


 


Separation Agreement and Release


 


August 30, 2007


 


Via Hand Delivery


Personal and Confidential


 


To:          Matthew Dillon


 


Re:          Separation Agreement and Release


 


Dear
Matt:


 


As
you know, your employment with, and any positions as an officer of, Christopher
& Banks Corporation and its affiliates, including without limitation Christopher & Banks,
Inc., Christopher & Banks Company and Christopher & Banks Services
Company (collectively referred to herein as
“Christopher & Banks”) will end effective at the close of business today,
August 30, 2007.  The purpose of this
Separation Agreement and Release letter (“Agreement”) is to set forth the
specific separation pay and benefits that Christopher & Banks will provide
you in exchange for your agreement to the terms and conditions of this
Agreement.


 


By
your signature below, you agree to the following terms and conditions:


 


                1.             End of Employment.


 


                                a.             Your employment with Christopher
& Banks ended effective August 30, 2007 (the “Separation Date”).


 


                                b.             Upon your receipt of your final
paycheck, which includes payment for services through August 30, 2007, you will
have received all wages owed to you by virtue of your employment with
Christopher & Banks or separation thereof.


 


                                c.             Upon your receipt of payment from
Christopher & Banks for your accrued and unused vacation at your regular
rate, less applicable deductions and withholding, you will have received all
vacation benefits owed to you by virtue of your employment with Christopher
& Banks or separation thereof.


 


                                d.             The COBRA period for continuation
of your insurance coverage under Christopher & Banks’ group plans will
begin on September 1, 2007.  Information
regarding your right to elect COBRA coverage will be sent to you via separate
letter.


 


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                                e.             During your employment with
Christopher & Banks, Christopher & Banks granted you various stock
options and restricted stock.


 


•                                          You will have ninety (90) calendar days after
August 30, 2007 to exercise your vested stock options.  You are have three separate stock options
covering an aggregate of 98,500 shares of Christopher & Banks’ common
stock.  The first option for 40,000
shares is fully vested and its exercise price is $15.74 per share.  The second option for 33,000 shares is vested
as to 11,000 of such shares, and its exercise price is $19.45 per share.  The third option for 25,500 shares is not
vested and its exercise price is $17.98 per share.


 


•                                          You currently have no vested
restricted stock.


 


Pursuant to the terms of the applicable plan
documents, all unvested stock options and all restricted stock granted by
Christopher & Banks is forfeited, effective upon your Separation Date.


 


                                f.              You are not eligible for any other
payments or benefits by virtue of your employment with Christopher & Banks
or separation thereof except for those expressly described in this
Agreement.  You will not receive the pay
and benefits described in Section 2 and subsequent sections of this Agreement
if you (i) do not sign and return this Agreement, (ii) rescind this Agreement
after signing it, or (iii) violate any of the terms and conditions set forth in
this Agreement.


 


                2.             Separation Pay and Benefits.  Specifically in consideration of your signing
this Agreement and subject to the limitations, obligations, and other
provisions contained in this Agreement, Christopher & Banks agrees as
follows:


 


                                a.             Subject to the offset requirement
explained below, to pay you your ending base salary ($775,000 annualized), less
applicable deductions and withholding, for the period August 31, 2007 through
February 28, 2010.  No payments shall be
made by Christopher & Banks pursuant to this Section 2(a) until March 3,
2008.  Any payments pursuant to this
Section 2(a) that, but for the immediately preceding sentence, would otherwise
have been payable by Christopher & Banks between August 31, 2007 and
February 28, 2008 shall be paid by Christopher & Banks in a lump sum on
March 3, 2008.  Thereafter, any remaining
separation pay payable to you pursuant to this Section 2(a) for the period
March 1, 2008 through February 28, 2010, shall be paid to you on Christopher
& Banks’ regular pay days beginning with the first regularly scheduled
payday following March 3, 2008. 
Notwithstanding the foregoing, if you secure other employment, self employment or a
consulting position before February 28, 2010, the separation pay payable to you
under this Section 2(a) shall be offset and reduced by any and all cash
compensation you earn through employment, self employment or consulting work
during the period August 31, 2007 through February 28, 2010.  You agree to immediately notify Christopher
& Banks’ General Counsel of the amount of compensation earned by you from
employment, self-employment or consulting during such period and, if requested,
to promptly provide documentation of such compensation to Christopher &
Banks.


 


                                b.             Provided
you timely elect COBRA coverage, to pay your COBRA premiums for the period
September 1, 2007 through February 28, 2009. 
Christopher & Banks will discontinue payments under this Section
2(b) before February 28, 2009 if, and at such time as, you (1) are covered or
eligible to be covered under the health and/or dental insurance policy of a new
employer, or (2) cease to participate, for whatever reason, in Christopher
& Banks’ group insurance plans.  By
your signature below, you 


 


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acknowledge and agree that Christopher & Banks may
modify or terminate its group insurance plans at any time and that you shall
have the same right to participate in Christopher & Banks’ group insurance
plans only as is provided on an equivalent basis to the company’s
employees.  You further agree to promptly
provide Christopher & Banks’ General Counsel notice if you become covered
or eligible to be covered under the health and/or dental insurance policy of a
new employer.


 


                3.             Release of Claims.  Specifically in consideration of the
separation pay and benefits described in Section 2, to which you would not
otherwise be entitled, by signing this Agreement you, for yourself and anyone
who has or obtains legal rights or claims through you, agree to the following:


 


                                a.             You hereby do release, agree not to
sue, and forever discharge Christopher & Banks (as defined below) of and
from any and all manner of claims, demands, actions, causes of action,
administrative claims, liability, damages, claims for punitive or liquidated
damages, claims for attorney’s fees, costs and disbursements, individual or
class action claims, or demands of any kind whatsoever, you have or might have
against them or any of them, whether known or unknown, in law or equity,
contract or tort, arising out of or in connection with your employment with
Christopher & Banks, or the termination of that employment, or otherwise,
and however originating or existing, from the beginning of time through the
date of your signing this Agreement.


 


                                b.             This release includes, without
limiting the generality of the foregoing, any claims you may have for wages,
bonuses, commissions, penalties, deferred compensation, vacation pay,
separation benefits, employee benefits (except those listed in Section 3(d)),
defamation, invasion of privacy, negligence, emotional distress, breach of
contract, estoppel, improper discharge (based on contract, common law, or
statute, including any federal, state or local statute or ordinance prohibiting
discrimination or retaliation in employment), violation of the United States
Constitution, the Minnesota Constitution, the Age Discrimination in Employment
Act, 29 U.S.C. § 621 et  seq., the Minnesota Human Rights Act,
Minn. Stat. § 363A.01 et  seq., Title VII of the Civil Rights Act,
42 U.S.C. § 2000e et  seq., the Americans with Disabilities Act,
42 U.S.C. § 12101 et  seq., the Employee Retirement Income Security
Act of 1974, 29 U.S.C. § 1001 et  seq., the Family and Medical
Leave Act, 29 U.S.C. § 2601 et  seq., the National Labor Relations
Act, 29 U.S.C. § 151 et  seq., the Worker Adjustment and
Retraining Notification Act, 29 U.S.C. § 2101 et seq., the Sarbanes-Oxley Act, 15 U.S.C. § 7201 et  seq., any claim arising under Minn.
Stat. Chapters 177 and 181, Minn. Stat. § 176.82, Minn. Stat. § 181.932, and
any claim for retaliation, harassment or discrimination based on sex, race,
color, creed, religion, age, national origin, marital status, sexual
orientation, disability, status with regard to public assistance, military
status or any other protected class, or sexual or other harassment.  You hereby waive any and all relief not
provided for in this Agreement.  You understand
and agree that, by signing this Agreement, you waive and release any past,
present, or future claim to employment with Christopher & Banks.


 


                                c.             If you file, or have filed on your
behalf, a charge, complaint, or action, you agree that the payments and
benefits described above in Section 2 are in complete satisfaction of any and
all claims in connection with such charge, complaint, or action and you waive, and agree not to take, any award
of money or other damages from such charge, complaint, or action.


 


                                d.             You are not, by signing this
Agreement, releasing or waiving (1) any vested interest you may have in any
401(k) or profit sharing plan by virtue of your employment with Christopher
& Banks, (2) any rights or claims that may arise after the Agreement is
signed, (3) the post-employment payments 


 


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and
benefits specifically promised to you under this Agreement, (4) the right to
institute legal action for the purpose of enforcing the provisions of this
Agreement, (5) your rights, if any, to indemnification and/or insurance for
your acts or omissions that occurred within the scope of your employment with
Christopher & Banks, (6) any rights you may have under state unemployment
compensation benefits law, (7) any rights you may have under workers
compensation benefits laws, or (8) the right to file a charge of discrimination
with a governmental agency, although, as noted above, you agree that you will
not be able to recover any award of money or damages if you file such a charge
or have a charge filed on your behalf.


 


                                e.             Christopher & Banks, as used in
this Section 3, shall mean Christopher & Banks Corporation, Christopher
& Banks, Inc., and its and their subsidiaries, divisions, affiliated or
related entities, insurers, and its and their present and former officers,
directors, shareholders, trustees, employees, agents, attorneys,
representatives and consultants, and the successors and assigns of each,
whether in their individual or official capacities, and the current and former
trustees or administrators of any pension or other benefit plan applicable to
the employees or former employees of Christopher & Banks, in their official
and individual capacities.


 


                4.             Notice of Right to Consult Attorney and Twenty-One
(21) Calendar Day Consideration Period. 
By signing this Agreement, you acknowledge and agree that Christopher
& Banks has informed you by this Agreement that (1) you have the right to
consult with an attorney of your choice prior to signing this Agreement, and
(2) you are entitled to twenty-one (21) calendar days from the receipt of this
Agreement to consider whether the terms are acceptable to you.  Christopher & Banks encourages you to use
the full 21-day period to consider this Agreement but you have the right, if
you choose, to sign this Agreement prior to the expiration of the twenty-one
(21) day period.


 


                5.             Notification of Rights under the Minnesota Human
Rights Act (Minn. Stat. Chapter 363A) and the Federal Age Discrimination in
Employment Act (29 U.S.C. § 621 et seq.). 
You are hereby notified of your right to rescind the release of claims
contained in Section 3 with regard to claims arising under the Minnesota Human
Rights Act, Minnesota Statutes Chapter 363A, within fifteen (15) calendar days
of your signing this Agreement, and with regard to your rights arising under
the federal Age Discrimination in Employment Act, 29 U.S.C. § 621 et  seq.,
within seven (7) calendar days of your signing this Agreement.  The two rescission periods shall run
concurrently.  In order to be effective,
the rescission must (a) be in writing; (b) delivered to Luke R. Komarek,
Esq., Senior Vice President & General Counsel, Christopher & Banks
Corporation, 2400 Xenium Lane North, Plymouth, MN 55441 by hand or mail within
the required period; and (c) if delivered by mail, the rescission must be
postmarked within the required period, properly addressed to Luke Komarek, as
set forth above, and sent by certified mail, return receipt requested.  This Agreement will be effective upon the
expiration of the 15-day period without rescission.  You understand that if you rescind any part
of this Agreement in accordance with this Section 5, you will not receive the
separation payments and benefits described in Section 2 and you will be
obligated to return any such payments and benefits if already received.


 


                6.             Return of Property.  By signing this Agreement, you acknowledge
and agree that all documents and materials relating to the business of, or the
services provided by, Christopher & Banks are the sole property of
Christopher & Banks.  By signing this
Agreement you further agree and represent that you have returned to Christopher
& Banks all of its property, including but not limited to, its laptop, cell
phone, all customer records and other documents and materials, whether on
computer disc, hard drive or other form, and all copies thereof, within your
possession or control, which in any manner relate to the 


 


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business
of, or the duties and services you performed on behalf of Christopher &
Banks.


 


                7.             On-Going Obligations Under Your Executive Employment
Agreement.  You are hereby reminded
of and affirm your on-going obligations to Christopher & Banks under
Sections 7, 8, and 9 of your Executive Employment Agreement with Christopher
& Banks dated June 12, 2006, as amended, which remain in full force and
effect.  You understand and agree that if
you fail to comply with such Sections of your Executive Employment Agreement,
Christopher & Banks’ obligations under Section 2 hereof shall cease, you
will not receive the separation pay and other benefits described in Section 2,
and you will be obligated to return any such payments and benefits if already
received.


 


                8.             Non-Disparagement and Confidentiality.  You promise and agree not to disparage
Christopher & Banks (as defined in Section 3(e) above).  Likewise, Christopher & Banks’ Board of
Directors and those management-level employees of Christopher & Banks who
are aware of this Agreement promise and agree not to disparage you. You promise
and agree not to disclose or discuss, directly or indirectly, in any manner
whatsoever, any information regarding either (1) the contents and terms of this
Agreement, or (2) the substance and/or nature of any dispute between
Christopher & Banks and any employee or former employee, including
yourself.  You agree that the only people
with whom you may discuss this confidential information are your legal and
financial advisors, your domestic partner, and your immediately family,
provided they agree to keep the information confidential, or as otherwise
required by law.


 


                9.             Remedies. 
If you or Christopher & Banks breach any term of this Agreement, the
non-breaching party shall be entitled to its available legal and equitable
remedies, including but not limited to, in the case of your breach, terminating
and recovering any and all payments and benefits made or to be made under
Section 2 of this Agreement.   In the event of a lawsuit alleging breach
of this Agreement, the prevailing party shall have the right to collect from
the non-prevailing party its reasonable attorneys’ fees and costs incurred in
connection with bringing or defending such legal or equitable action or
otherwise enforcing the terms and conditions of this Agreement.  If
Christopher & Banks or you seek and/or obtain relief from an alleged breach
of this Agreement, all of the provisions of this Agreement shall remain in full
force and effect.


 


                10.           Non-Admission. 
It is expressly understood that this Agreement does not constitute, nor
shall it be construed as, an admission by Christopher & Banks or you of any
liability or unlawful conduct whatsoever. 
Christopher & Banks and you specifically deny any liability or
unlawful conduct.


 


                11.           Successors and Assigns.  This Agreement is personal to you and may not
be assigned by you without the written agreement of Christopher &
Banks.  The rights and obligations of
this Agreement shall inure to the successors and assigns of Christopher &
Banks.


 


                12.           Enforceability. 
If a court finds any term of this Agreement to be invalid,
unenforceable, or void, the parties agree that the court shall modify such term
to make it enforceable to the maximum extent possible.  If the term cannot be modified, the parties
agree that the term shall be severed and all other terms of this Agreement
shall remain in effect.


 


                13.           Law Governing. 
This Agreement shall be governed and construed in accordance with the
laws of the State of Minnesota.


 


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                14.           Full Agreement. 
This Agreement contains the full agreement between you and Christopher
& Banks and may not be modified, altered, or changed in any way except by
written agreement signed by both parties. 
The parties agree that this Agreement supersedes and terminates any and
all other written and oral agreements and
understandings between the parties, except for the Conflict of Interest,
Certificate of Compliance, Code of Business Conduct & Ethics policies to
which you are subject, Sections 6 — 11 and 14 - 20 of your Executive Employment
Agreement dated June 12, 2006, as amended, and any applicable stock option granting agreements and plan documents,
which shall remain in full force and effect.


 


                15.           Acknowledgment of Reading and Understanding.  By signing this Agreement, you acknowledge
that you have read this Agreement, including the release of claims contained in
Section 3, and understand that the release of claims is a full and final
release of all claims you may have against Christopher & Banks and the
other entities and individuals covered by the release.  By signing, you also acknowledge and agree
that you have entered into this Agreement knowingly and voluntarily.


 


                The offer contained in this
Agreement will expire at 5:00 p.m. on September 21, 2007.  After you have reviewed this Agreement and
obtained whatever advice and counsel you consider appropriate regarding it,
please evidence your agreement to the provisions set forth in this Agreement by
dating and signing below.  Please then return
a signed original of this Agreement to Luke Komarek no later than 5:00 p.m. on
September 21, 2007.  You should keep a
copy for your records.


 


                Matt, we thank you for your
service to Christopher & Banks and wish you all the best both
professionally and personally.


 


Sincerely,


 


CHRISTOPHER
& BANKS CORPORATION


 


 


	
  By

  	
  /s/
  Larry Barenbaum

  
	
   

  	
  Larry
  Barenbaum

  
	
   

  	
  Its:
  Chairman of the Board

  



 


 


ACKNOWLEDGMENT AND SIGNATURE


 


                By signing below, I, Matthew
Dillon, acknowledge and agree to the following:


 


•                  I have had adequate time to
consider whether to sign this Separation Agreement and Release.


•                  I have read this Separation
Agreement and Release carefully.


•                  I understand and agree to all of
the terms of the Separation Agreement and Release.


•                  I am knowingly and voluntarily
releasing my claims against Christopher & Banks to the extent expressly set
forth in this Separation Agreement and Release.


•                  I have not, in signing this
Agreement, relied upon any statements or explanations made by Christopher &
Banks except as for those specifically set forth in this Separation Agreement
and Release.


•                  I intend this Separation
Agreement and Release to be legally binding.


 


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•                  I am signing this Separation
Agreement and Release on or after my last day of employment with Christopher
& Banks.


 


Accepted
this 21st day of September, 2007.


 


/s/
Matthew Dillon


Matthew
Dillon


 


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