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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): July 31, 2006
0-15898
(Commission File Number)
______________________________
CASUAL MALE RETAIL GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 04-2623104
(State of Incorporation) (IRS Employer
Identification Number)
555 Turnpike Street, Canton, Massachusetts 02021
(Address of registrant's principal executive office)
(781) 828-9300
(Registrant's telephone number)
______________________________
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 (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act(17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act(17 CFR 240.13e-4(c))
ITEM 1.01 Entry into a Material Definitive Agreement.
1. Approval of 2006 Incentive Compensation Plan
At the 2006 Annual Meeting of Stockholders of Casual Male Retail Group, Inc.
(the "Company"), the Company's stockholders approved the adoption of the 2006
Incentive Compensation Plan (the "2006 Plan"). As a result of such
approval, no further grants will be made under the Company's 1992 Stock
Incentive Plan.
The terms of the 2006 Plan provide for grants of stock options, stock
appreciation rights, or SARs, restricted stock, deferred stock, other stock-
related awards and performance awards that may be settled in cash, stock or
other property.
The following is a summary of certain principal features of the 2006 Plan.
This summary is qualified in its entirety by reference to the complete text
of the 2006 Plan, which is included as an appendix to the Company's
definitive proxy statement filed with the SEC on June 26, 2006.
Shares Available for Awards; Annual Per-Person Limitations
- ----------------------------------------------------------
Under the 2006 Plan, the total number of shares of Common Stock that may be
subject to the granting of awards under the 2006 Plan shall be equal to
2,500,000 shares, plus the number of shares with respect to which awards
previously granted thereunder that terminate without being exercised;
provided, however, that the maximum number of shares that may be subject to
the granting of awards other than stock options and SARs shall not exceed
1,250,000.
Awards that are settled or exercised through the payment of shares will be
counted in full against the number of shares available for award under the
2006 Plan, regardless of the number of shares actually issued upon settlement
or exercise of any such award.
Awards with respect to shares that are granted to replace outstanding awards
or other similar rights that are assumed or replaced by awards under the 2006
Plan pursuant to the acquisition of a business are not subject to, and do not
count against, the foregoing limit.
In addition, the 2006 Plan imposes individual limitations on the amount of
certain awards in part to comply with Section 162(m) of the Internal Revenue
Code of 1986, as amended (the "Code"). Under these limitations, during any
fiscal year the number of options, SARs, restricted shares of Common Stock,
deferred shares of Common Stock, shares as a bonus or in lieu of other
Company obligations, and other stock-based awards granted to any one
participant may not exceed 500,000 for each type of such award, subject to
adjustment in certain circumstances. The maximum amount that may be earned by
any one participant as a performance award in respect of a performance period
of one year is $1,000,000, and in addition the maximum amount that may be
earned by one participant in respect of a performance period greater than one
year is $2,000,000.
A committee of our Board of Directors, which we refer to as the Committee, is
to administer the Plan. See "Administration." The Committee is authorized to
adjust the limitations described in the two preceding paragraphs and is
authorized to adjust outstanding awards (including adjustments to exercise
prices of options and other affected terms of awards) in the event that a
dividend or other distribution (whether in cash, shares of Common Stock or
other property), recapitalization, forward or reverse split, reorganization,
merger, consolidation, spin-off, combination, repurchase, share exchange or
other similar corporate transaction or event affects the Common Stock so that
an adjustment is appropriate in order to prevent dilution or enlargement of
the rights of participants. The Committee is also authorized to adjust
performance conditions and other terms of awards in response to these kinds
of events or in response to changes in applicable laws, regulations or
accounting principles.
Eligibility
- -----------
The persons eligible to receive awards under the 2006 Plan are the officers,
directors, employees and independent contractors of the Company. An employee
on leave of absence may be considered as still in the employ of the Company
for purposes of eligibility for participation in the 2006 Plan.
Administration
- --------------
The Company's Board of Directors shall select the Committee that will
administer the 2006 Plan. All Committee members must be "non-employee
directors" as defined by Rule 16b-3 of the Exchange Act, "outside directors"
for purposes of Section 162(m) of the Code, and independent as defined by the
Nasdaq Stock Market or any other national securities exchange on which any
securities of the Company may be listed for trading in the future. However,
except as otherwise required to comply with Rule 16b-3 of the Exchange Act or
Section 162(m) of the Code, the Board of Directors may exercise any power or
authority granted to the Committee. Subject to the terms of the 2006 Plan,
the Committee is authorized to select eligible persons to receive awards,
determine the type and number of awards to be granted and the number of
shares of Common Stock to which awards will relate, specify times at which
awards will be exercisable or settled (including performance conditions that
may be required as a condition thereof), set other terms and conditions of
awards, prescribe forms of award agreements, interpret and specify rules and
regulations relating to the 2006 Plan and make all other determinations that
may be necessary or advisable for the administration of the 2006 Plan.
Stock Options and SARs
- -----------------------
The Committee is authorized to grant stock options, including both incentive
stock options, or ISOs, which can result in potentially favorable tax
treatment to the participant, and non-qualified stock options and SARs,
entitling the participant to receive the amount by which the fair market
value of a share of Common Stock on the date of exercise exceeds the grant
price of the SAR. The exercise price per share subject to an option and the
grant price of an SAR are determined by the Committee, but must not be less
than the fair market value of a share of Common Stock on the date of grant.
For purposes of the 2006 Plan, the term "fair market value" means the fair
market value of the Common Stock, awards or other property as determined by
the Committee or under procedures established by the Committee. Unless
otherwise determined by the Committee or the Company's Board of Directors,
the fair market value of the Common Stock as of any given date shall be the
closing sales price per share of Common Stock as reported on the principal
stock exchange or market on which the Common Stock is traded on the date
immediately preceding the date as of which such value is being determined or,
if there is no sale on that date, the last previous day on which a sale was
reported. The maximum term of each option or SAR, the times at which each
option or SAR will be exercisable, and provisions requiring forfeiture of
unexercised options or SARs at or following termination of employment or
service generally are fixed by the Committee except that no option or SAR may
have a term exceeding 10 years. Options may be exercised by payment of the
exercise price in cash, shares, outstanding awards or other property
(including notes or other contractual obligations of participants to make
deferred payments, so long as such notes or other contractual obligations are
not in violation of applicable law), as the Committee may determine from time
to time. Methods of exercise and settlement and other terms of the SARs are
determined by the Committee.
Restricted and Deferred Stock
- -----------------------------
The Committee is authorized to grant restricted stock and deferred stock.
Restricted stock is a grant of shares of Common Stock which may not be sold
or disposed of, and which may be forfeited in the event of certain
terminations of employment or service, prior to the end of a restricted
period specified by the Committee. A participant granted restricted stock
generally has all of the rights of a stockholder of the Company, unless
otherwise determined by the Committee. An award of deferred stock confers
upon a participant the right to receive shares of Common Stock at the end of
a specified deferral period, and may be subject to possible forfeiture of the
award in the event of certain terminations of employment prior to the end of
a specified restricted period. Prior to settlement, an award of deferred
stock carries no voting or dividend rights or other rights associated with
share ownership, although dividend equivalents may be granted, as discussed
below.
Dividend Equivalents
- --------------------
The Committee is authorized to grant dividend equivalents conferring on
participants the right to receive, currently or on a deferred basis, cash,
shares of Common Stock, other awards or other property equal in value to
dividends paid on a specific number of shares of Common Stock or other
periodic payments. Dividend equivalents may be granted alone or in connection
with another award, may be paid currently or on a deferred basis and, if
deferred, may be deemed to have been reinvested in additional shares of
Common Stock, awards or otherwise as specified by the Committee.
Bonus Stock and Awards in Lieu of Cash Obligations
- --------------------------------------------------
The Committee is authorized to grant shares of Common Stock as a bonus free
of restrictions, or to grant shares of Common Stock or other awards in lieu
of the Company obligations to pay cash under the 2006 Plan or other plans or
compensatory arrangements, subject to such terms as the Committee may
specify.
Other Stock-Based Awards
- --------------------------
The Committee is authorized to grant awards under the 2006 Plan that are
denominated or payable in, valued by reference to, or otherwise based on or
related to shares of Common Stock. Such awards might include convertible or
exchangeable debt securities, other rights convertible or exchangeable into
shares of Common Stock, purchase rights for shares of Common Stock, awards
with value and payment contingent upon performance of the Company or any
other factors designated by the Committee, and awards valued by reference to
the book value of shares of Common Stock or the value of securities of or the
performance of specified subsidiaries or business units. The Committee
determines the terms and conditions of such awards.
Performance Awards
- ------------------
The right of a participant to exercise or receive a grant or settlement of an
award, and the timing thereof, may be subject to such performance conditions
(including subjective individual goals) as may be specified by the Committee.
In addition, the 2006 Plan authorizes specific performance awards, which
represent a conditional right to receive cash, shares of Common Stock or
other awards upon achievement of certain pre-established performance goals
and subjective individual goals during a specified fiscal year. Performance
awards granted to persons whom the Committee expects will, for the year in
which a deduction arises, be "covered employees" (as defined below) will, if
and to the extent intended by the Committee, be subject to provisions that
should qualify such awards as "performance-based compensation" not subject to
the limitation on tax deductibility by the Company under Code Section 162(m).
For purposes of Section 162(m), the term "covered employee" means the
Company's chief executive officer and each other person whose compensation is
required to be disclosed in the Company's filings with the SEC by reason of
that person being among the four highest compensated officers of the Company
as of the end of a taxable year. If and to the extent required under
Section 162(m) of the Code, any power or authority relating to a performance
award intended to qualify under Section 162(m) of the Code is to be exercised
by the Committee, not the Company's Board of Directors.
Subject to the requirements of the 2006 Plan, the Committee will determine
performance award terms, including the required levels of performance with
respect to specified business criteria, the corresponding amounts payable
upon achievement of such levels of performance, termination and forfeiture
provisions and the form of settlement. One or more of the following business
criteria for the Company, on a consolidated basis, or for business or
geographical units of the Company (except with respect to the total
stockholder return and earnings per share criteria), shall be used by the
Committee in establishing performance goals for performance awards to
"covered employees" that are intended to qualify under Section 162(m):
(1) earnings per share; (2) revenues or margin; (3) cash flow; (4) operating
margin; (5) return on net assets; (6) return on investment; (7) return on
capital; (8) return on equity; (9) economic value added; (10) direct
contribution; (11) net income, (12) pretax earnings; (13) earnings before
interest, taxes, depreciation and amortization; (14) earnings after interest
expense and before extraordinary or special items; (15) operating income;
(16) income before interest income or expense, unusual items and income
taxes, local, state or federal and excluding budgeted and actual bonuses
which might be paid under any ongoing bonus plans of the Company;
(17) working capital; (18) management of fixed costs or variable costs;
(19) identification or consummation of investment opportunities or completion
of specified projects in accordance with corporate business plans, including
strategic mergers, acquisitions or divestitures; (20) total stockholder
return; (21) debt reduction; and (22) any of the above goals determined on an
absolute or relative basis or as compared to the performance of a published
or special index deemed applicable by the Committee including, but not
limited to, the Standard & Poor's 500 Stock Index or a group of comparable
companies. The Committee may exclude the impact of an event or occurrence
which the Committee determines should appropriately be excluded, including
without limitation (i) restructurings, discontinued operations, extraordinary
items, and other unusual or non-recurring charges, (ii) an event either not
directly related to the operations of the Company or not within the
reasonable control of the Company's management, or (iii) a change in
accounting standards required by generally accepted accounting principles.
In granting performance awards, the Committee may establish unfunded award
"pools," the amounts of which will be based upon the achievement of a
performance goal or goals based on one or more of certain business criteria
described in the 2006 Plan (including, for example, total stockholder return,
net income, pretax earnings, EBITDA, earnings per share, and return on
investment). During the first 90 days of a performance period, the Committee
will determine who will potentially receive performance awards for that
performance period, either out of the pool or otherwise.
After the end of each performance period, the Committee will determine
(i) the amount of any pools and the maximum amount of potential performance
awards payable to each participant in the pools and (ii) the amount of any
other potential performance awards payable to participants in the 2006 Plan.
The Committee may, in its discretion, determine that the amount payable as a
performance award will be reduced from the amount of any potential award.
Other Terms of Awards
- ---------------------
Awards may be settled in the form of cash, shares of Common Stock, other
awards or other property, in the discretion of the Committee. The Committee
may require or permit participants to defer the settlement of all or part of
an award in accordance with such terms and conditions as the Committee may
establish, including payment or crediting of interest or dividend equivalents
on deferred amounts, and the crediting of earnings, gains and losses based on
deemed investment of deferred amounts in specified investment vehicles. The
Committee is authorized to place cash, shares of Common Stock or other
property in trusts or make other arrangements to provide for payment of the
Company's obligations under the 2006 Plan. The Committee may condition any
payment relating to an award on the withholding of taxes and may provide that
a portion of any shares of Common Stock or other property to be distributed
will be withheld (or previously acquired shares of Common Stock or other
property be surrendered by the participant) to satisfy withholding and other
tax obligations. Awards granted under the 2006 Plan generally may not be
pledged or otherwise encumbered and are not transferable except by will or by
the laws of descent and distribution, or to a designated beneficiary upon the
participant's death, except that the Committee may, in its discretion, permit
transfers for estate planning or other purposes subject to any applicable
restrictions under Rule 16b-3 of the Exchange Act.
Awards under the 2006 Plan are generally granted without a requirement that
the participant pay consideration in the form of cash or property for the
grant (as distinguished from the exercise), except to the extent required by
law. The Committee may, however, grant awards in exchange for other awards
under the 2006 Plan awards or under other Company plans, or other rights to
payment from the Company, and may grant awards in addition to and in tandem
with such other awards, rights or other awards.
Acceleration of Vesting; Change in Control
- --------------------------------------------
The Committee may, in its discretion, accelerate the exercisability, the
lapsing of restrictions or the expiration of deferral or vesting periods of
any award, and, if so provided in the award agreement, such accelerated
exercisability, lapse, expiration and vesting shall occur automatically in
the case of a "change in control" of the Company, as defined in the 2006 Plan
(including the cash settlement of SARs and "limited SARs" which may be
exercisable in the event of a change in control). In addition, the Committee
may provide in an award agreement that the performance goals relating to any
performance based award will be deemed to have been met upon the occurrence
of any "change in control."
For purposes of the 2006 Plan, a "change in control" will be deemed to occur
upon the earliest of the follow:
(a) the acquisition by any Person of Beneficial Ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of fifty percent
(50%) or more of either (1) the then outstanding shares of Common Stock of
the Corporation (the "Outstanding Common Stock") or (2) the combined voting
power of the then outstanding voting securities of the Company entitled to
vote generally in the election of directors (the "Outstanding Company Voting
Securities") (such Beneficial Ownership, a "Controlling Interest"); provided,
however, that for this purpose, the following acquisitions shall not
constitute a Change of Control: (v) any acquisition directly from the
Company; (w) any acquisition by the Company; (x) any acquisition by any
person that as of the effective date of the 2006 Plan owns Beneficial
Ownership of a Controlling Interest; (y) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Company or any
Related Entities; or (z) any acquisition by any company pursuant to a
transaction which complies with clauses (1), (2) and (3) of (c) below; or
(b) during any period of two (2) consecutive years (not including any period
prior to the effective date of the 2006 Plan) individuals who constitute the
Board on the effective date of the 2006 Plan (the "Incumbent Board") cease
for any reason to constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent to the effective
date of the 2006 Plan whose election, or nomination for election by the
Company's stockholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as though
such individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the
election or removal of directors or other actual or threatened solicitation
of proxies or consents by or on behalf of a person other than the Board; or
(c) consummation of a reorganization, merger, statutory share exchange or
consolidation or similar corporate transaction involving the Company or any
of its subsidiaries, a sale or other disposition of all or substantially all
of the assets of the Company, or the acquisition of assets or stock of
another entity by the Company or any of its subsidiaries (each a "Business
Combination"), in each case, unless, following such Business Combination,
(1) all or substantially all of the individuals and entities who were the
Beneficial Owners, respectively, of the Outstanding Common Stock and
Outstanding Company Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than fifty percent
(50%) of, respectively, the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities entitled to
vote generally in the election of directors, as the case may be, of the
company resulting from such Business Combination (including, without
limitation, a company which as a result of such transaction owns the Company
or all or substantially all of the Company's assets either directly or
through one or more subsidiaries) in substantially the same proportions as
their ownership, immediately prior to such Business Combination of the
Outstanding Common Stock and Outstanding Company Voting Securities, as the
case may be, (2) no person (excluding any employee benefit plan (or related
trust) of the Company or such company resulting from such Business
Combination or any person that owns a Controlling Interest as of the
effective date of the 2006 Plan) beneficially owns, directly or indirectly,
fifty percent (50%) or more of the then outstanding shares of common stock of
the company resulting from such Business Combination or the combined voting
power of the then outstanding voting securities of such company except to the
extent that such ownership existed prior to the Business Combination and
(3) at least a majority of the members of the Board of Directors of the
company resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement, or of
the action of the Board, providing for such Business Combination; or
(d) approval by the stockholders of the Company of a complete liquidation
or dissolution of the Company.
Amendment and Termination
- --------------------------
The Company's Board of Directors may amend, alter, suspend, discontinue or
terminate the 2006 Plan or the Committee's authority to grant awards without
further stockholder approval, except stockholder approval must be obtained
for any amendment or alteration if such approval is required by law or
regulation or under the rules of any stock exchange or quotation system on
which shares of Common Stock are then listed or quoted. Thus, stockholder
approval may not necessarily be required for every amendment to the 2006 Plan
which might increase the cost of the 2006 Plan or alter the eligibility of
persons to receive awards. Stockholder approval will not be deemed to be
required under laws or regulations, such as those relating to ISOs, that
condition favorable treatment of participants on such approval, although the
Company's Board of Directors may, in its discretion, seek stockholder
approval in any circumstance in which it deems such approval advisable.
Unless earlier terminated by the Company's Board of Directors, the 2006 Plan
will terminate at such time as no shares of Common Stock remain available for
issuance under the 2006 Plan and the Company has no further rights or
obligations with respect to outstanding awards under the 2006 Plan.
Other than in connection with standard adjustments (as set forth in
Section 10(c) of the 2006 Plan), the Committee is not permitted to (i) lower
the exercise price per share of an option or SAR after it is granted,
(ii) cancel an option or SAR when the exercise price per share exceeds the
fair market value of the underlying shares in exchange for another award
(other than in connection with substitute awards granted in connection with
business combinations) or (iii) take any other action with respect to an
option or SAR that may be treated as a repricing, without approval of the
Company's stockholders.
2. Non-Employee Director Compensation
On July 31, 2006, the Company's Board of Directors approved an increase in
compensation payable to non-employee directors for each meeting of the Board
of Directors. Effective July 31, 2006, each non-employee director will
receive $4,000 for each meeting of the Board of Director (up from $3,000 per
meeting). Each non-employee director will continue to receive $3,000 for
each committee meeting and $500 for certain telephonic board or committee
meetings.
Further, the Board of Directors also approved an annual grant of stock
options to each non-employee director to purchase 25,000 shares of the
Company's Common Stock upon such director's annual election to the Board (up
from 15,000 shares previously). Upon the initial election of a non-employee
director, such director will continue to receive a stock option to purchase
15,000 shares of Common Stock. Such stock options will vest in three equal
installments, with one-third vesting on the date of grant and on the first
and second anniversaries of the date of grant. All options are granted with
a term of ten years and have an exercise price equal to the closing price of
the Common Stock on the date of grant.
3. Second Amendment to the Employment Agreement between the Company and
Ms. Carlo
On August 2, 2006, the Company entered into the Second Amendment to the
Employment Agreement originally dated July 9, 2003 ("Second Amendment") with
Linda B. Carlo, the Company's Executive Vice President of Business
Development & Direct-to-Consumer. Under the terms of the Second Amendment,
Ms. Carlo's employment with the Company was extended to March 31, 2008 and
her annual salary was increased to $313,676.75 effective May 7, 2006.
A copy of the Second Amendment to Ms. Carlo's Employment Agreement is
attached hereto as Exhibit 10.1.
ITEM 9.01 Financial Statements and Exhibits
(d) Exhibits
Exhibit No. Description
------------- ------------
10.1 Second Amendment to Employment Agreement
dated as of August 2, 2006 between the
Company and Linda B. Carlo
SIGNATURES
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, thereunto duly authorized.
CASUAL MALE RETAIL GROUP, INC.
By: /s/ Dennis R. Hernreich
-----------------------
Name: Dennis R. Hernreich
Title: Executive Vice President
and Chief Financial Officer
Date: August 4, 2006
SECOND AMENDMENT TO
EMPLOYMENT AGREEMENT
WHEREAS, Casual Male Retail Group, Inc., and Linda B. Carlo ("Executive")
entered into a certain Employment Agreement dated as of July 9, 2003,
(hereinafter referred to as the "Agreement"); and
WHEREAS, Company and Executive wish to amend, modify and/or restate certain
terms, provisions, conditions, and covenants of the Agreement.
NOW, THEREFORE, in consideration of the foregoing, and of the promises,
covenants, conditions and agreements contained herein, and for One Dollar
($1.00) and for other good and valuable consideration, the receipt and
sufficiency of which is hereby expressly acknowledged, the Company and
Executive hereby agree to amend the Agreement as follows:
1. Section 2 of the Agreement is herby deleted in its entirety and the
following is hereby substituted in lieu thereof:
"2. TERM
The term of employment under this agreement shall begin on
August 4, 2006 ("Employment Date") and shall continue through
March 31, 2008, subject to prior termination in accordance with
the terms hereof"
2. Section 3 (a) of the Agreement is hereby deleted in it's entirety
and the following is hereby substituted in lieu thereof:
"3. COMPENSATION
(a) As compensation for the employment services to be rendered
by the Executive hereunder, the Company agrees to pay to
executive, and Executive agrees to accept, payable in equal
installments in accordance with Company practice, an annual
base salary of $313,656.75 effective May 7, 2006.
3. Except as herein specifically modified and amended, all of the terms,
provisions, conditions, and covenants of the Agreement shall continue in full
force and effect and shall be deemed unchanged except to the extent modified
and amended herein.
IN WITNESS WHEREOF, the parties hereto have executed this Second
Amendment to Employment Agreement as a sealed instrument, in any number of
counterpart copies, each of which shall be deemed an original for all purposes,
as of the day and year first written below.
CASUAL MALE RETAIL GROUP, INC. (Company)
By: /s/DAVID A. LEVIN August 2, 2006
------------------- ---------------
David A. Levin Date
President and Chief Executive Officer
By: /s/DENNIS R. HERNREICH August 2, 2006
---------------------------- ---------------
Dennis R. Hernreich Date
Secretary
EXECUTIVE
/s/ LINDA B. CARLO August 2, 2006
------------------- -----------------
Linda B. Carlo Date