UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
(Amendment No. 1)
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: April 13, 2012
(Date of earliest event reported)
CHRISTOPHER & BANKS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
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001-31390 |
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06-1195422 |
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(Commission file number) |
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(IRS Employer Identification No.) |
2400 Xenium Lane North
Plymouth, Minnesota 55441
(Address of principal executive offices, including zip code)
(763) 551-5000
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
EXPLANATORY NOTE
This Amendment No. 1 amends the Current Report on Form 8-K of Christopher & Banks Corporation (the “Company”) filed on April 17, 2012, disclosing Peter G. Michielutti’s election as Senior Vice President, Chief Financial Officer (“SVP, CFO”) of the Company, effective April 23, 2012. This Amendment No. 1 amends the original 8-K filing solely to include information regarding Mr. Michielutti’s employment and equity agreements and does not affect the accuracy of the information provided in the original 8-K filing.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(e) Effective April 20, 2012, in connection with Mr. Michielutti’s earlier election as the Company’s SVP, CFO, the Company and Mr. Michielutti entered into a one-year employment agreement (the “Agreement”) commencing April 23, 2012 and ending April 19, 2012. Under the terms of the Agreement, Mr. Michielutti is entitled to an annualized salary of $350,000. In addition, he is eligible to participate in the employee benefit plans and programs generally applicable to senior executives of the Company. During his employment, Mr. Michielutti is not to directly or indirectly engage in activities with a “Prohibited Company”, as defined in the Agreement, and also agrees for a period of one year after termination of employment not to solicit the Company’s employees to leave the Company or terminate their employment nor to interfere with the business relationships between the Company and its vendors, suppliers and sales agents.
In addition, if Mr. Michielutti’s employment is involuntarily terminated by the Company other than for “Cause”, as defined in the Agreement, prior to April 19, 2013, the Company shall pay through April 19, 2013 the remaining portion of his annualized salary and the employer-portion of any health, dental and other employee benefit program premiums to the extent Mr. Michielutti is participating in such programs or the cash equivalent thereof.
In connection with his joining the Company, Mr. Michielutti received three equity awards under the Company’s 2005 Stock Incentive Plan (as amended to date), to be effective April 23, 2012. The equity awards consist of (x) a non-qualified stock option to purchase 30,000 shares of the Company’s Common Stock (the “Option”), such grant made and effective as of April 23, 2012, with an exercise price equal to $1.86 (the closing price of the Company’s common stock on the New York Stock Exchange (“NYSE”) as of the date of grant); (y) a performance-based restricted stock award in the amount of 20,000 shares, such grant made and effective as of April 23, 2012 (the “20,000 Share Grant”);and (z) a
performance-based restricted stock award of 18.817 shares under the Company’s equity incentive program for the current fiscal year, granted and effective as of April 23, 2012 (the “PBRS Grant”). With respect to the 20,000 Share Grant, (1) if, on or prior to April 19, 2013, the closing stock price of the Company’s common stock, as reported on the NYSE, exceeds $3.50 for a period of twenty consecutive trading days, then the performance-based restrictions on the first tranche of 10,000 restricted shares will lapse, and (2) if, on or prior to April 19, 2013, the closing stock price of the Company’s common stock, as reported on the NYSE, exceeds $4.50 for a period of twenty consecutive trading days, then the performance-based restrictions on the second tranche of 10,000 restricted shares will lapse. The Option and PBRS Grant were made pursuant to the form of non-qualified stock option and restricted stock award agreements, respectively, that are on file with the Securities and Exchange Commission.
The foregoing summary of the Agreement and the 20,000 Share Grant are qualified in their entirety by reference to the Agreement and the 20,000 Share Grant, a copy of which is filed as Exhibits 10.1 and 10.2, respectively, to this Current Report on Form 8-K and incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
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10.1 |
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Agreement by and between Christopher & Banks Corporation and Peter G. Michielutti effective as of April 20, 2012. |
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10.2 |
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Performance-Based Restricted Stock Agreement by and between Christopher & Banks Corporation and Peter G. Michielutti effective as of April 23, 2012. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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CHRISTOPHER & BANKS CORPORATION | |
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By: |
/s/ Luke R. Komarek |
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Luke R. Komarek |
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Senior Vice President, General Counsel and Corporate Secretary |
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Date: April 24, 2012 |
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EXHIBIT INDEX
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Exhibit |
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Description |
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10.1 |
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Agreement by and between Christopher & Banks Corporation and Peter G. Michielutti effective as of April 20, 2012. |
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10.2 |
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Performance-Based Restricted Stock Agreement by and between Christopher & Banks Corporation and Peter G. Michielutti effective as of April 23, 2012. |
Exhibit 10.1
EMPLOYMENT AGREEMENT
BETWEEN
CHRISTOPHER & BANKS CORPORATION
AND
PETER G. MICHIELUTTI
THIS AGREEMENT is to be effective as of the date it is fully executed (the “Effective Date”), by and between Christopher & Banks Corporation, a corporation duly organized and existing under the laws of the State of Delaware (the “Corporation”), and Peter G. Michielutti (“Executive”).
PREAMBLE
Based upon the mutual promises contained in this Agreement and other consideration, Corporation and Executive have agreed to execute this Agreement containing the following terms and conditions:
ARTICLE 1
EMPLOYMENT
1.1 Commencing on or about April 23, 2012, the Corporation hereby employs Executive and Executive agrees to be employed by the Corporation as its Senior Vice President, Chief Financial Officer. Executive further agrees to perform such duties as are customarily incident to such position and such other duties which may be assigned to Executive from time to time by the Chief Executive Officer and/or the Board of Directors of Corporation.
ARTICLE 2
TERM
2.1 The term of this Agreement shall be for a period of approximately one year commencing on or about April 23, 2012 and ending April 19, 2013, unless terminated earlier as provided in Section 7.4.
ARTICLE 3
COMPENSATION AND BENEFITS
3.1 The Corporation agrees to pay Executive an annualized salary of $350,000, less required and authorized deductions and withholdings.
3.2 Effective as of Executive’s first day of employment, Corporation shall grant to Executive, subject to and in accordance with equity award agreements to be entered into between Executive and Corporation, 20,000 shares of its Common Stock as a performance-based restricted stock grant and a non-qualified stock option to acquire 30,000 shares of Common Stock with an exercise price equal to the closing price on the New York Stock Exchange as of Executive’s first day of employment.
3.3 Subject to the terms and conditions of such plans and programs, Executive shall be eligible to participate in the employee benefit plans and programs generally applicable to senior executives of the Corporation; provided, however, that Executive’s participation in the fiscal 2012-R equity incentive program shall be as determined by the Compensation Committee of the Corporation’s Board of Directors.
ARTICLE 4
DUTIES
4.1 Executive agrees to devote Executive’s full time and effort, to the best of Executive’s ability, to carry out the duties of Senior Vice President, Chief Financial Officer for the profit, benefit and advantage of the Corporation. Executive shall report directly to the Chief Executive Officer of the Corporation or such other person as the Board of Directors of Corporation may designate.
ARTICLE 5
COOPERATION
5.1 During Executive’s employment and for one (1) year thereafter, Executive agrees to cooperate fully with the Company, including its attorneys and accountants, in connection with any potential or actual litigation, other real or potential disputes, internal investigations or government investigations, which directly or indirectly involve the Company. Executive agrees to appear as a witness voluntarily upon the Company’s request regardless of whether served with a subpoena and to be available to attend depositions, court proceedings, consultations or meetings regarding investigations, litigation or potential litigation as requested by the Company. With respect to the Executive’s cooperation obligations under this provision, for the one (1) year period following the cessation of Executive’s employment with the Corporation, the Company acknowledges that these cooperation obligations, if exercised, will impose on Executive’s time and could likely interfere with other commitments Executive may have in the future. Consequently, the Company shall attempt to schedule such depositions, court proceedings, consultations or meetings in coordination with Executive’s schedule and to allow Executive to participate telephonically as appropriate but Executive recognizes that scheduling of certain court proceedings, including depositions and trials, may be beyond the Company’s control and that for some matters or proceedings Executive’s physical presence may be required.
5.2 The Corporation agrees to reimburse Executive for his time incurred under this Article 5 at a rate of $170.00 per hour for actual time spent preparing for and attending such depositions, consultations or meetings if Executive is no longer an employee of the Company. The Corporation also agrees to reimburse Executive for the out-of-pocket expenditures actually and reasonably incurred by Executive in connection with the performance of services contemplated by this Article 5, including hotel accommodations, coach airfare, transportation and meals consistent with the Corporation’s generally applicable expense reimbursement policies at such time.
5.3 It is expressly understood by the parties that (i) any services Executive may provide to Company pursuant to this Article 5 shall not be as an employee and Executive’s provision of such services shall not create an employment relationship between Executive and the Company, (ii) any payments to Executive pursuant to this provision are not wages and instead shall be reflected on a federal 1099 tax form, and (iii) the payment or reimbursement of expenses by the Corporation to Executive under this Article 5 shall be in exchange for Executive’s time and/or reimbursement for expenses actually incurred and are not intended or understood to be dependent upon the character or content of any information Executive discloses in good faith in any such proceedings, meetings or consultations.
ARTICLE 6
DEFINITIONS
6.1 “Cause” shall mean (i) any fraud, misappropriation or embezzlement by Executive in connection with or affecting the business of the Company or its affiliates, (ii) any conviction of (including any plea of guilty or no contest to) a felony or a gross misdemeanor by Executive, (iii) any gross neglect or persistent neglect by Executive to perform the duties assigned to Executive or any other act that can be reasonably expected to cause substantial economic or reputational injury to the Company, (iv) any material breach of Sections 4.1, 5.1, or Articles 7 or 8 of this Agreement, or (v) any material violation of the Company’s written policies, procedures or Code of Conduct; provided further that in connection with clauses (iii) — (v), Executive shall first have received a written notice from the Corporation’s Chief Executive Officer or its Board of Directors that summarizes and reasonably describes the manner in which Executive has persistently neglected his duties, engaged in an act reasonably expected to cause substantial harm, materially breached Sections 4.1, 5.1, or Articles 7 or 8 of the Agreement, or materially violated a Company policy, procedure or the Code of Conduct (the “Event”). To the extent the Event is capable of being cured, Executive shall have fourteen (14) calendar days from the date notice of the Event is delivered to Executive (via electronic mail, regular mail, in person or otherwise) to cure the same. The Corporation is not required to give written notice of, nor shall Executive have a period to cure the same or any similar failure, which was the subject of an earlier written notice to Executive under this Section 6.1.
6.2 “Company” shall mean Corporation and/or its majority-owned and wholly-owned subsidiaries.
6.3 “Confidential Information” means any information that is not generally known outside the Company, including but not limited to trade secrets, and that is proprietary to the Company, relating to any phase of the Company’s existing or reasonably foreseeable business, including information conceived, discovered or developed by Executive. Confidential Information includes, but is not limited to, business plans; strategic plans and initiatives; financial information, statements and projections; new store plans or locations; payroll and personnel records and information; marketing information, materials and plans; product designs; supplier information; customer information; customer lists; project lists; information relating to pricing and costs; or other information that is designated by the Company as “Confidential” or other similar designation or is treated by the Company as Confidential.
6.4 (a) A “Prohibited Company” means any of the following women’s specialty apparel companies: Ann Taylor Stores Corporation; Ascena Retail Group, Inc.; Cato Corporation; Charming Shoppes, Inc.; Chicos FAS, Inc.; Coldwater Creek, Inc.; New York & Co., Inc.; and The Talbots, Inc. (b) “Prohibited Company” shall also include: (i) all divisions, subsidiaries, affiliates and successors in interest of the stores or legal entities identified in Section 6.4(a); and (ii) any person, business, or entity where a substantial portion of Executive’s duties involve providing advice, consultation, products or services to any of the entities or their affiliates identified in this Section 6.4(a) or (b) (i).
ARTICLE 7
NONCOMPETITION, NONSOLICITATION AND NONDISPARAGEMENT
7.1 During Executive’s employment, (i) Executive shall not plan, organize or engage in any business competitive with the Company or any product or service marketed or planned for marketing by the Company or assist or work with any other person or entity to do so; (ii) Executive shall not, without the prior written permission of the Corporation’s Board of Directors, (x) directly or indirectly engage in activities with a Prohibited Company or (y) own (whether as a shareholder, partner or otherwise, other than as a 3% or less shareholder of a publicly held company) any interest in a Prohibited Company, or (z) be connected as an officer, director, advisor, consultant, agent or employee or participate in the management of any Prohibited Company.
7.2 During Executive’s employment and for a period of one year after termination of Executive’s employment with the Corporation for any reason, under any circumstance, by either party, whether voluntary or involuntary, Executive shall not solicit, entice, encourage, or induce (or attempt to do so, directly or indirectly), any employee of the Company to leave or terminate his or her employment with the Company or to establish a relationship with a Prohibited Company. This Section 7.2 shall apply to the then-current employees of the Company and any individual who was employed by the Company at any time in the forty-five (45) day period immediately prior to Executive’s last day of employment with the Company.
7.3 During Executive’s employment and for a period of one year after termination of Executive’s employment with the Corporation for any reason, under any circumstance, by either party, whether voluntary or involuntary, Executive shall not solicit, engage, or induce (or attempt to do so, directly or indirectly) any vendor, supplier, sales agent or buying agent of the Company to commence work on behalf of, or to establish a relationship with, a Prohibited Company or to sever or materially alter his/her/its relationship with the Company. The post-termination obligations of this Section 7.3 shall apply to the vendors, suppliers, sales agents and buying agents of the Company as of the date of Executive’s termination and at any time in the six-month period immediately prior to Executive’s termination date.
7.4 If Executive’s employment is involuntarily terminated by the Corporation other than for Cause prior to April 19, 2013, the Corporation shall pay through April 19, 2013 the remaining portion of Executive’s annualized salary, paid according to the Corporation’s normal payroll schedule and subject to applicable withholdings, deductions, and tax reporting requirements and shall pay through April 19, 2013 the employer portion of any health, dental and
other employee benefit program premiums, to the extent Executive is participating in such programs prior to such involuntary termination, or the cash equivalent if the benefit may not be continued after employment with the Company ceases. The payments under this Section 7.4 shall be expressly conditioned on Executive’s executing a release of claims (the “Release”) in favor of the Company and its related entities and Executive not exercising his right of rescission with respect to such Release. Corporation shall prepare and provide the Release to Executive within five (5) business days of Executive’s termination by the Corporation if such termination is without cause and prior to April 19, 2013.
7.5 Executive promises and agrees not to disparage the Company and the Company’s officers, directors, employees, products or services.
ARTICLE 8
CONFIDENTIAL AND PROPRIETARY INFORMATION, IDEAS, AND PROPERTY
8.1 Executive promises and agrees to take reasonable measures to maintain and preserve the confidentiality of the Confidential Information.
8.2 Executive promises and agrees not to use or disclose Confidential Information except in the course of performing Executive’s duties solely for the benefit of, and on behalf of, the Company.
8.3 Executive promises and agrees not to use, discuss, disclose, divulge, or make available in any way, whether directly or indirectly, Confidential Information to any person or entity not authorized by the Company to receive or use it.
8.4 Employee acknowledges and agrees that all documents, electronic data or files, or other tangible property relating in any way to the business of the Company, including those which are conceived by Executive or come into Executive’s possession during Executive’s employment, are and shall remain the exclusive property of the Company, and Executive agrees to return all such documents, electronic data and files, and tangible property to the Company upon termination of Executive’s employment or at such earlier time as the Company may request of Executive, and Executive further promises and agrees not to retain any copies, summaries, or abstracts thereof.
8.5 The obligations of this section shall continue after the termination of Executive’s employment and shall be binding on Executive’s assigns, executors, administrators, or other legal representatives.
ARTICLE 9
JUDICIAL CONSTRUCTION
9.1 Executive believes and acknowledges that the provisions contained in this Agreement, including without limitation the provisions contained in Section 5.1 and Articles 7, and 8 of this Agreement, are fair and reasonable and necessary to protect the Company’s legitimate interests. Nonetheless, it is agreed that if a court finds any of these provisions to be invalid in whole or in part, such finding shall not invalidate any such provision, nor the
Agreement, in its entirety, but rather the provision in question shall be construed, blue-lined, reformed, rewritten, and/or equitably modified by the court as if the most restrictive covenants permissible under applicable law were contained herein.
ARTICLE 10
RIGHT TO INJUNCTIVE RELIEF
10.1 Executive acknowledges that a breach or threatened breach by Executive of any of the terms of Section 5.1 or Articles 7 or 8 of this Agreement will render irreparable harm to the Corporation or its related entities. Accordingly, the Corporation shall therefore be entitled to any and all equitable relief, including, but not limited to, temporary and permanent injunctive relief, and to any other remedy that may be available under any applicable law or agreement between the parties, and to recover from Executive all costs of litigation including, but not limited to, attorneys’ fees and court costs incurred in enforcing the provisions of Articles 5, 7 and 8.
10.2 Executive acknowledges and agrees that, in the event a court determines that a bond is necessary in connection with any grant to the Corporation of injunctive relief, then a fair and reasonable amount for any such bond would be $5,000.
ARTICLE 11
ASSIGNMENT
11.1 Executive consents to and the Corporation shall have the right to assign this Agreement to its successors or assigns. Additionally, Executive consents to and the Corporation shall have the right to assign this Agreement to any subsidiary. All covenants or agreements hereunder shall inure to the benefit of and be enforceable by Corporation’s successors or assigns.
11.2 For purposes of Section 11.1 and the possible assignment of this Agreement, the terms “successors” and “assigns” shall include any corporation which buys all or substantially all of the Corporation’s assets, or a controlling portion of its stock, or with which it merges or consolidates.
11.3 Executive’s rights under this Agreement are personal to Executive and may not be assigned except with the written consent of the Corporation’s Board of Directors.
ARTICLE 12
FAILURE TO DEMAND PERFORMANCE AND WAIVER
12.1 The Corporation’s failure at any time to demand strict performance or compliance by Executive either during or after Executive’s employment with any part of this Agreement shall not be deemed to be a waiver of the Corporation’s rights under this Agreement or by operation of law. The Corporation’s rights under this Agreement can only be waived expressly, in writing by the Corporation’s Board of Directors. Any express waiver by either party of a breach of any provision of this Agreement shall not operate as or be construed as a waiver of any subsequent breach thereof.
ARTICLE 13
ENTIRE AGREEMENT
13.1 The Corporation and Executive agree that no modifications of this Agreement may be made except by means of a written agreement or memorandum signed by both parties and also acknowledge that this Agreement contains the full and complete agreement between and among them, that there are no oral or implied agreements or other modifications relating to the same subject matter.
ARTICLE 14
GOVERNING LAW
14.1 The parties acknowledge that the Corporation’s principal place of business is located in the State of Minnesota. The parties hereby agree that this Agreement shall be construed in accordance with the internal laws of the State of Minnesota without giving effect to any choice or conflict of law provision or rule that would cause the application of the laws of any jurisdiction other than the State of Minnesota.
14.2 Executive and the Company agree to submit to the exclusive jurisdiction of, and venue in, the courts of the State of Minnesota, County of Hennepin, or of the Federal District Court of Minnesota with respect to any dispute that may arise between them.
ARTICLE 15
SURVIVAL
15.1 The parties agree that Articles 5, 7 and 8 of this Agreement, and those provisions necessary for the enforcement of Articles 5, 7 and 8 of this Agreement, shall survive termination of this Agreement and termination of Executive’s employment for any reason.
ARTICLE 16
UNDERSTANDINGS
16.1 Executive hereby acknowledges that (i) this Agreement constitutes good and valuable consideration in exchange for the obligations and agreements undertaken by Executive by this Agreement, including, without limitation, the provisions contained in Articles 7 and 8 of this Agreement and (ii) that Executive has carefully considered the obligations, restrictions, and undertakings contained in this Agreement and, having had the opportunity to confer with counsel of Executive’s own choosing, has determined that they are reasonable.
16.2 By signing below, Executive authorizes the Corporation to notify third parties (including, but not limited to, Executive’s actual or potential future employers) of Articles 7 and 8 of this Agreement, and those provisions necessary for the enforcement of Articles 7 and 8 of this Agreement, and Executive’s responsibilities hereunder.
16.3 Executive represents and warrants to the Corporation that Executive is not under, or currently bound to be under in the future, any obligation to any person or entity that is or
would be inconsistent or in conflict with this Agreement or would prevent, limit, or impair in any way the performance by Executive of Executive’s obligations hereunder.
16.4 If Executive possesses any information that Executive knows or should know is considered by any third party to be the confidential, trade secret, or otherwise proprietary information of such third party, Executive shall not disclose such information to the Company or use such information in the course of Executive’s employment or in any other way to benefit the Company.
IN WITNESS WHEREOF, the Corporation has hereunto signed its name and Executive hereunder has signed Executive’s name, all as of the day and year written below.
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CHRISTOPHER & BANKS CORPORATION | ||
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Date: |
April 13, 2012 |
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By: |
/s/ Joel N. Waller | |
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Joel N. Waller | |
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Witness: |
/s/ Luke Komarek |
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Luke Komarek |
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Its: |
Chief Executive Officer | |
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PETER G. MICHIELUTTI | |||
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Date: |
April 20, 2012 |
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/s/ Peter G. Michielutti | ||
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Witness: |
/s/ Sandra L. Miller |
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Sandra L. Miller |
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Exhibit 10.2
PERFORMANCE-BASED RESTRICTED STOCK AGREEMENT
THIS PERFORMANCE-BASED RESTRICTED STOCK AGREEMENT (this “Agreement”) is made effective as of the 23rd day of April, 2012 (the “Effective Date”), between Christopher & Banks Corporation, a Delaware corporation (the “Company”), and Peter G. Michielutti (“Employee”).
1. Award.
(a) Shares. Pursuant to the Second Amended and Restated Christopher & Banks Corporation 2005 Stock Incentive Plan (the “Plan”), 20,000 shares (the “Restricted Shares”) of the Company’s common stock, par value $0.01 per share (“Common Stock”), shall be issued, in two equal tranches of 10,000 shares each, as hereinafter provided, in Employee’s name, subject to certain restrictions thereon.
(b) Issuance of Restricted Shares. The Restricted Shares shall be issued upon execution hereof by Employee and upon satisfaction of the conditions of this Agreement.
(c) Plan Controls. Employee hereby agrees to be bound by all of the terms and provisions of the Plan, including any which may conflict with those contained in this Agreement. The Plan is hereby incorporated by reference into this Agreement, and this Agreement is subject in all respects to the terms and conditions of the Plan. In the event of any conflict between this Agreement and the Plan, the terms of the Plan shall control. Except as otherwise defined herein, capitalized terms contained in this Agreement shall have the same meaning as set forth in the Plan.
2. Restrictions. Employee hereby accepts the Restricted Shares when issued and agrees with respect thereto as follows:
(a) Performance-Based Forfeiture Restrictions. Unless or until the performance criteria described in Exhibit A are met, the Restricted Shares may not be sold, assigned, pledged, exchanged, hypothecated or otherwise transferred, encumbered or disposed of. Employee shall, for no consideration, immediately forfeit to the Company all Restricted Shares subject to the Performance-Based Forfeiture Restrictions (as hereinafter defined) that do not vest in accordance with this Agreement and Exhibit A. The prohibition against transfer and the obligation to forfeit and surrender Restricted Shares to the Company upon failure to meet the performance criteria in Exhibit A are herein referred to as the “Performance-Based Forfeiture Restrictions”.
(b) Time-Based Forfeiture Restrictions. The Restricted Shares may not be sold, assigned, pledged, exchanged, hypothecated or otherwise transferred, encumbered or disposed of to the extent then subject to the Time-Based Forfeiture Restrictions (as hereinafter defined). In the event of termination of Employee’s employment with the Company or employing subsidiary for any reason prior to April 19, 2013, except as otherwise provided in subsection (c) of this Section 2, Employee shall, for no consideration, forfeit to the Company all Restricted Shares to the extent then subject to the Time-Based Forfeiture Restrictions. The
prohibition against transfer and the obligation to forfeit and surrender Restricted Shares to the Company upon termination of employment are herein referred to as “Time-Based Forfeiture Restrictions.” The Time-Based Forfeiture Restrictions shall be binding upon and enforceable against any transferee of Restricted Shares.
(c) Lapse of Performance-Based and Time-Based Forfeiture Restrictions. The Performance-Based Forfeiture Restrictions shall lapse as to the Restricted Shares in accordance with, and to the extent provided in, Exhibit A. The Time-Based Forfeiture Restrictions shall lapse as to all the Vested Restricted Shares, if any, on April 19, 2013, or earlier as provided below in this section 2(c) and subject to the provisions of Exhibit A; provided that, Employee has been continuously employed by the Company (or any subsidiary of the Company) from the date of this Agreement through the lapse date. The Performance-Based Forfeiture Restrictions and the Time-Based Forfeiture Restrictions are collectively referred to herein as the “Forfeiture Restrictions”.
Notwithstanding the other provisions of this Agreement, the Forfeiture Restrictions shall lapse as to all of the Restricted Shares on the occurrence, prior to April 19, 2013, of a Change in Control (as such term is defined in Section 10 of the Plan).
If Employee’s employment is terminated by the Company prior to April 19, 2013, other than for cause, as such term is defined in Employee’s Employment Agreement, or as a result of Employee’s death, and the Performance-Based Forfeiture Restrictions have already lapsed, then, upon such event, the Time-Based Forfeiture Restrictions shall lapse in full.
In the event Employee is terminated for cause, or dies or is terminated without cause prior to the lapsing of the Performance-Based Forfeiture Restrictions, the Restricted Shares shall be immediately forfeited.
(d) Issuance and Custody of Certificates. The Company shall cause the Restricted Shares to be issued in Employee’s name, either by book-entry registration or issuance of a stock certificate or certificates. Employee shall not have any voting rights with respect to the Restricted Shares unless and until they are designated as Vested Restricted Shares. Employee shall not be entitled to receive any dividends paid by the Company on its Common Stock with respect to the Restricted Shares unless and until they are designated as Vested Restricted Shares, and then only to the extent that dividends are declared after the Performance Vesting Date. Employee shall forfeit such voting and dividend rights at such time, if at all, as the Vested Restricted Shares are forfeited pursuant to the provisions of this Agreement. The Restricted Shares shall be restricted from transfer and shall be subject to an appropriate stop-transfer order. If any certificate is issued, the certificate shall bear a legend evidencing the nature of the Restricted Shares, and the Company may cause the certificate to be delivered upon issuance to the Secretary of the Company or to such other depository as may be designated by the Company as a depository for safekeeping until the forfeiture occurs or the Forfeiture Restrictions lapse pursuant to the terms of the Plan and this Agreement. If a certificate is issued, upon request of the Company’s Compensation Committee (the “Committee”) or its delegate, Employee shall deliver to the Company a stock power, endorsed in blank, relating to the Restricted Shares then subject to the Forfeiture Restrictions.
Upon the lapse of the Forfeiture Restrictions without forfeiture, and following payment of the applicable withholding taxes pursuant to Section 3 hereof, the Company shall cause the shares upon which Forfeiture Restrictions lapsed (less any shares withheld to pay taxes), free of the restrictions and/or legend described above, to be delivered, either by book-entry registration or in the form of a certificate or certificates, registered in Employee’s name.
Notwithstanding any other provisions of this Agreement, the issuance or delivery of any shares of Common Stock (whether subject to restrictions or unrestricted) may be postponed for such period as may be required to comply with applicable requirements of any national securities exchange or any requirements under any law. The Company shall not be obligated to issue or deliver any shares of Common Stock if the issuance or delivery thereof shall constitute a violation of any provision of any law or of any regulation of any governmental authority or any national securities exchange. In addition, the grant of the Restricted Shares and the delivery of any shares of Common Stock pursuant to this Agreement are subject to any clawback policies the Company may adopt in compliance with the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, Section 10D of the Securities Exchange Act of 1934 and any applicable rules and regulations of the Securities and Exchange Commission.
3. Income Tax Matters. In order to comply with all applicable federal, state or local income tax laws or regulations, the Company may take such action as it deems appropriate to ensure that all applicable federal, state or local payroll, withholding, income or other taxes, which are the sole and absolute responsibility of Employee, are withheld or collected from Employee. In accordance with the terms of the Plan, and such rules as may be adopted by the Committee under the Plan, Employee may elect to satisfy Employee’s tax withholding obligations arising from the receipt of, or the lapse of restrictions relating to, the Restricted Shares, by (i) delivering cash, a check (bank check, certified check or personal check) or a money order payable to the Company, (ii) having the Company withhold a portion of the Vested Restricted Shares otherwise to be delivered having a Fair Market Value equal to the amount of such taxes, (iii) delivering to the Company shares of Common Stock held by Employee for more than six (6) months (or such period as the Committee may deem appropriate for accounting purposes or otherwise) having a Fair Market Value equal to the amount of such taxes, or (iv) a combination of the methods described above, as approved by the Committee. If the number of shares of Common Stock to be delivered to Employee is not a whole number, then the number of shares of Common Stock shall be rounded down to the nearest whole number. Employee’s election regarding satisfaction of withholding obligations must be made on or before the date that the amount of tax to be withheld is determined.
4. Employment Relationship. Nothing in this Agreement shall be construed as constituting a commitment, guaranty, agreement, or understanding of any kind or nature that the Company or its subsidiaries shall continue to employ the Employee, and this Agreement shall not affect in any way the right of the Company or any of its subsidiaries to terminate the employment of the Employee. For purposes of this Agreement, Employee shall be considered to be in the employment of the Company as long as Employee remains an employee of either the Company, any successor corporation or a parent or subsidiary corporation of the Company or
any successor corporation. Any question as to whether and when there has been a termination of such employment, and the cause of such termination, shall be determined by the Committee, or its delegate, as appropriate, and subject to the provisions of Section 8 its determination shall be final (the “Termination Determination”).
5. Committee’s Powers. No provision contained in this Agreement shall in any way terminate, modify or alter, or be construed or interpreted as terminating, modifying or altering any of the powers, rights or authority vested in the Committee or, to a delegate to the extent of such delegation, pursuant to the terms of the Plan or resolutions adopted in furtherance of the Plan, including, without limitation, the right to make certain determinations and elections with respect to the Restricted Shares.
6. Binding Effect. This Agreement shall be binding upon and inure to the benefit of any successors to the Company and all lawful successors to Employee permitted under the terms of the Plan.
7. Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, without reference to the principles of conflicts of laws.
8. Mediation. If the Board or Committee makes a Termination Determination, then the Company shall provide written notice thereof to Executive (the “Termination Notice”). If Executive disagrees with the determination referred to in the Termination Notice, then Executive may request that the Company participate in mediation in an effort to resolve the disagreement. Executive shall make such request by submitting to the Company (Attention: General Counsel) and to JAMS (c/o its Minneapolis office or, if none, its Chicago office) (the “Mediation Facilitator”), within five (5) calendar days of the date of the Termination Notice, a written request for mediation (the “Mediation Request”). The parties will cooperate with the Mediation Facilitator and with one another in selecting a mediator from the Mediation Facilitator’s panel of neutrals, and in scheduling the mediation proceedings in the Minneapolis, Minnesota area. In the event that the parties are unable to select a mediator within ten (10) days of the date of the Mediation Request, the Mediation Facilitator shall appoint the mediator and the mediation shall be held as soon as practicable thereafter, but no later than twenty-one (21) days after a mediator has been selected or appointed. The Company covenants that it will participate in the mediation in good faith through representation by an appropriate member of its executive management and Executive covenants that he will personally participate in the mediation in good faith. The parties will share equally the costs of the mediation process, including all fees and expenses of the mediator, but shall each be responsible for its or his own expenses of participating in the mediation. In the event the parties are unable to resolve the dispute through mediation, then the Termination Determination shall be final and binding.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by an officer thereunto duly authorized, and Employee has executed this Agreement, all effective as of the date first above written.
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CHRISTOPHER & BANKS CORPORATION | |||
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By: |
/s/ Luke R. Komarek | ||
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Luke R. Komarek | ||
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Title: |
Senior Vice President, General Counsel | ||
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EMPLOYEE | |||
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Signed: |
/s/ Peter G. Michielutti | ||
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Peter G. Michielutti | ||
EXHIBIT A
Performance Vesting
This Exhibit A to the Restricted Stock Agreement effective April 23, 2012 (the “Agreement”) contains the performance criteria for the Performance-Based Forfeiture Restrictions to lapse with respect to the Restricted Shares. Capitalized terms used but not defined herein shall have the same meanings assigned to them in the Plan and the Agreement.
Lapse of Performance-Based Forfeiture Restrictions
Except as otherwise provided in the Agreement, the Performance-Based Forfeiture Restrictions will lapse with respect to the Restricted Shares as follows:
1. with respect to the first tranche of 10,000 Restricted Shares, if on or prior to April 19, 2013 the closing stock price of the Company’s Common Stock, as reported on the New York Stock Exchange (“NYSE”), exceeds $3.50 for a period of twenty (20) consecutive Trading Days, and
2. with respect to the second tranche of 10,000 Restricted Shares, if on or prior to April 19, 2013 the closing stock price of the Company’s Common Stock, as reported on the NYSE, exceeds $4.50 for a period of twenty (20) consecutive Trading Days.
As used herein, “Trading Day” means a day on which the NYSE is generally open for trading and trading in the Common Stock of the Company has not been suspended for any reason.
The Restricted Shares for which the Performance-Based Forfeiture Restrictions have lapsed in accordance with the performance criteria described above shall be referred to in the Agreement as the “Vested Restricted Shares”.