Document:

bws8k032709ex10_2.htm

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
10.2

    

    BROWN
SHOE COMPANY, INC.

    

    INCENTIVE
AND STOCK COMPENSATION PLAN OF 2002

    (as Amended and
Restated)

    

    PERFORMANCE
AWARD AGREEMENT

    200_ to
201_

    

    

    You have been selected by the
Compensation Committee of the Brown Shoe Company, Inc. Board of Directors (the
“Committee”) to be a Participant in the Performance Award Plan under the
Incentive and Stock Compensation Plan of 2002, as Amended and Restated (the
“Plan”) of Brown Shoe Company, Inc. (the “Company”), as specified
below:

    

    Participant:  ____

    

    Performance Award:

    Target Award- Number of Performance
Shares:  ___  shares of Company common
stock

    
      	
               
      

            	
              Form of
      Payment:  [shares of Company common stock] [and/or cash
      equivalent value]

            

    

    

    Target Award-
Cash:  $___

       Form of
Payment:  cash

    

    Target
Award:   [other]

    

    
      	
               
      

            	
                    Performance
      Period:  the Company’s Fiscal Year
  [20__]

            

    

    

    
      	
               
      

            	
              Performance
      Measures:  As described on Attachment
  A

            

    

    

    Minimum Performance Level:
[metric(s) and amount]

    

    Maximum Award
Value:  [percent (in excess of 100%) of each applicable
target]

     

    Vesting: [insert date]

     

     

    THIS AWARD AGREEMENT, effective ___,
20__, represents the grant of [Performance Shares (“Performance Shares”)]
[and/or the Cash Award (“Cash”)] [and  [other award] as identified
above (collectively, the “Award”) by the Company to the Participant named above,
pursuant to the provisions of the Plan.

    

    The Plan provides a complete
description of the terms and conditions governing the Award.  If there
is any inconsistency between the terms of this Award Agreement and the terms of
the Plan, the Plan’s terms shall completely supersede and replace the
conflicting terms of this Agreement.  All capitalized terms shall have
the meanings ascribed to them in the Plan, unless specifically set forth
otherwise herein.  The parties hereto agree as follows:

     

    1.    Performance Period. The Performance
Performance Period shall be as specified above.

     

    2.           Value of Award.  The
Award shall represent and have a Maximum Award Value as specified
above.

    

    3.       Earning
the Award; Certification of Performance and Percent
Earned.  The Award shall be “earned” following the end of the
Performance Period, as of the date the Committee shall determine and certify:
(a) whether the Minimum Performance Level has been satisfied; (b) and if so, the
percent of the Award that has been earned in accordance with the Performance
Payoff Profile (on Attachment A) (the “Percent Earned”), but in no
event  more than the Maximum Award Value; and (c) as to the
determinations pursuant to (a) and (b), subject to the Committee’s right to
exercise its discretion to reduce the Company’s level of performance based on
the quality of earnings.  All calculations as to the Performance
Measures shall be subject to the Committee’s right, pursuant to Section 14.2 of
the Plan, to make adjustments for unusual or nonrecurring events.

    

    4.            Vesting, Amount Payable and Payment
of the Award.

    (a) Unless this Award is
sooner terminated in accordance with Section 5, this Award shall be vested in
the Participant as of the Vesting Date and shall be payable within sixty (60)
days following the Vesting Date subject to Participant’s continued employment
through the date actual payment is made. If you do not meet these conditions at
any time, this Award shall be forfeited.

    

    (b) The amount payable to the
Participant shall be determined by multiplying the Percent Earned by the Target
Award(s) specified, and shall be paid in cash and/or shares as specified
above.

     

    
      (c) Unless otherwise specified above,
payment of the earned Performance Share shall be made in shares of the Company's
Common Stock, and payment of the earned Cash Award shall be made in
cash.

      
        5.            Termination
Provisions.

      

    

    (a)  If,
pursuant to Section 3, the Committee certifies that the Minimum Performance
Level has not been achieved, this Award shall immediately terminate and no
longer be of any effect.

    

    (b)  If a Participant retires
at normal retirement date or retires at an early retirement date with the
approval of the Committee (each being “Retirement”); suffers a permanent
Disability; or dies prior to the Vesting Date, the Committee, in its sole
discretion, may determine that the Participant (or Participant’s beneficiary in
the event of death) shall be eligible for a pro-rated portion of the Amount
Earned, with such proration to be based on the number of full months of
continued active employment by Participant during the Performance Period as a
percent of the total number of months in the Performance Period.  If
the Committee does determine that this award shall be payable pursuant to the
prior sentence, then payment shall be made in accordance with Section 4
[provided that if the Performance Period is completed prior to the Vesting Date,
then payment in the event of Disability or death shall be made following
completion of the Performance Period or such later date (prior to the Vesting
Date) of Participant’s Disability or death].  In the event of
participant’s Retirement, payment, if at all, shall occur only if the
Committee’s determination to allow for pro-rated payment has been made prior to
the date of Retirement and only if payment occurs at the time set forth in
Section 4.

    

    6.      Dividends.  The
Participant shall have no right to any dividends that may be paid with respect
to shares of Company stock until any such shares are vested and
earned.

    

    7.      Change in
Control.  If a Participant is employed by the Company on the
date of a Change in Control, subject to Article 2.7 and Article 13 of the Plan,
in the event of the occurrence of a Change in Control, unless otherwise
specifically prohibited under applicable laws, or by the rules and regulations
of any governing governmental agencies or national securities exchange, the
Award shall be deemed to have been fully earned for the entire Performance
Period as of the effective date of the Change in Control, at the target level,
and shall be paid out within thirty (30) days following the effective date of
the Change in Control.

    

    8.      [for
share awards only] Recapitalization.  Subject
to Article 4.2 of the Plan, in the event that there is any change in corporate
capitalization, such as a stock split, or a corporate transaction, such as any
merger, consolidation, separation including a spin-off, or other distribution of
stock or property of the Company, any reorganization (whether or not such
reorganization comes within the definition of such term in Code 368) or any
partial or complete liquidation of the Company, such adjustment shall be made in
the number and class and/or price of the Company’s Common Stock subject to this
Award, as may be determined to be appropriate and equitable by the Committee, in
its sole discretion, to prevent dilution or enlargement of rights; provided,
however, that the number of Performance Shares subject to this Award shall
always be a whole number.

    

    9.      Tax
Withholding.  The Committee shall have the power and the right
to deduct or withhold, or require the Participant or beneficiary to remit to the
Company, an amount sufficient to satisfy Federal, state, and local taxes,
domestic or foreign, required by law or regulation to be withheld with respect
to any taxable event arising as a result of the Award.  In
satisfaction of such requirements, the Participant may elect, subject to the
approval of the Committee, to satisfy the withholding requirement, in whole or
in part, by having the Company withhold from the payment of the Award: [(a)
shares of Company Common Stock having a Fair Market Value on the date the tax is
to be determined equal to the minimum statutory total tax which could be
withheld on the transaction (“Withholding Amount”) with respect to the
Performance Share component of the Award; and/or] (b) cash equal to the
Withholding Amount on the Cash component; [or (c) in lieu of (a) and (b), cash
equal to the Withholding Amount on both the Performance Share and the Cash
components].  All such elections shall be irrevocable, made in
writing, signed by the Participant, and shall be subject to any restrictions or
limitations that the Committee, in its sole discretion, deems
appropriate.

     

    10.                 Clawback.  Any
payouts will be subject to recovery if it is determined that the Participant
personally and knowingly engaged in practices that materially contributed to the
circumstances that led to the restatement of the Company’s financial
statements.

    

    11.                 Nontransferability.  This
Agreement as well as the rights granted thereunder may not be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated, other than by will or
by the laws of descent and distribution.

    

    12.                 Administration.  This
Agreement and the rights of the Participant hereunder are subject to all terms
and conditions of the Plan, as the same may be amended from time to time, as
well as to such rules and regulations as the Committee may adopt for
administration of the Plan.  It is expressly understood that the
Committee is authorized to administer, construe, and make all determinations
necessary or appropriate to the administration of the Plan and this Award
Agreement, all of which shall be binding upon the Participant.

    

    
      13.            Miscellaneous

    

    
      	
               
      

            	
              (a) 
       

            	
              This
      Award Agreement shall not confer upon the Participant any right to
      continuation of employment by the Company, nor shall this Award Agreement
      interfere in any way with the Company’s right to terminate his or her
      employment at any time.

            

    

    

    
      	
               
      

            	
              (b) 
       

            	
              The
      Committee and/or the Company’s Board of Directors may terminate, amend, or
      modify the Plan; provided, however, that no such termination, amendment,
      or modification of the Plan may in any way adversely affect the
      Participant’s rights under this Award Agreement without theParticipant’s
      written consent.

            

    

    

    
      	
               
      

            	
              (c)  
      

            	
              This
      Award Agreement shall be subject to all applicable laws, rules, and
      regulations, and to such approvals by any governmental agencies or
      national securities exchanges as may be
  required.

            

    

    

    
      	
              (d)  

            	
              To
      the extent not preempted by Federal law, this Award Agreement shall be
      construed in accordance with and governed by the substantive laws of the
      State of Missouri without regard to conflicts of laws principles, which
      might otherwise apply.  Any litigation arising out of, in
      connection with, or concerning any aspect of the Plan or this Award
      Agreement shall be conducted exclusively in the State or Federal courts in
      Missouri.

            

    

    

    

    IN WITNESS WHEREOF, the
parties have caused this Agreement to be executed effective as of ____,
20__.

     

    
      
        
          	 	BROWN SHOE COMPANY,
      INC.	 
	 	 	 	 
	
                   

                	
                  By:
      

                	 	 
	 	 	 	 
	 	 	 	 
	 	 	
                  Participant

                	 

        

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    ATTACHMENT
A

    to Brown Shoe
Company, Inc.

    Performance
Award Agreement-

    for Performance Period of
Fiscal Years 200    -20    

    
      	
              1.

            	
              PERFORMANCE
      MEASURES

            

    

    The
Performance Measures for this Award shall be:  _____

    

    
      	
              2.  

            	
              PERFORMANCE PAYOFF
      PROFILE

            

    

    

    

    PROFILE
– 20__ GRANT

    (%
OF TARGET PAID OUT)

    

    

    

    

    

    [Payout gird to be
inserted]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.

     

    
      
         

      

      
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    (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).

     

    
      
         

      

      
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    (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

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