EXHIBIT 10.1
TRANS WORLD ENTERTAINMENT
CORPORATION
1994 DIRECTOR RETIREMENT PLAN
SECTION 1. PURPOSE
1.01 The Purpose of the 1994 Director Retirement Plan (the "Plan")
is to provide a reward to members of the Board of Directors for
their service to Trans World Entertainment Corporation (which,
together with any successor corporations, is referred to herein as
the "Company"). In addition, the Plan is intended to help the
Company attract and retain the services of qualified directors.
SECTION 2. DEFINITIONS
2.01 "Benefits" shall mean an amount equal to Fifteen Thousand
Dollars ($15,000) annually, payable in monthly installments in
advance, for the period specified in Section 4.
2.02 "Board of Directors" shall mean the Board of Directors of the
Company.
2.03 "Change in Control" is an event that may only be deemed to
occur if and after a date that fewer than twenty percent of the
outstanding shares of Common Stock of the Company in the aggregate
are beneficially owned (as defined in Rule 13d-3 under the Exchange
Act) by Robert J. Higgins, members of his immediate family and one
or more trusts established for the benefit of such individual or
family members for a period of 60 consecutive calendar days. If
such condition has taken place, "Change in Control" shall mean the
occurrence of any one of the following events that occur after such
share ownership reduction, if ever, has occurred: (i) the sale of
the Company substantially as an entirety (whether sale by stock,
sale of assets, merger, consolidation, liquidation, dissolution or
similar occurrence), where the shareholders of the Company,
immediately prior to a consolidation or merger, would not,
immediately after the consolidation or merger, beneficially own (as
such term is defined under Rule 13d-3 under the Exchange Act),
directly or indirectly, shares representing in the aggregate at least
one-half of the voting stock of the corporation issuing cash
or securities in a consolidation or merger (or its ultimate parent
corporation, if any); (ii) any tender offer or exchange offer
subject to the regulations of the Securities and Exchange
Commission is made by which any person or group, other than Robert
J. Higgins, members of his immediate family and one or more trusts
established for the benefit of such individual or family members,
as "person" or "group" is defined within the meaning of Section
13(d) of the Exchange Act, which becomes the beneficial owner,
directly or indirectly, or more than one-half of the outstanding
shares of Common Stock; or (iii) one-half or more of the directors
elected to the Board of Directors in the most recent proxy
statement of the Company, excluding from such computation the
replacement of any director or directors who resign voluntarily and
not as a result of any disagreement expressed in writing with the
Company's operations, policies or practices.
Notwithstanding the foregoing, a "Change in Control" shall not be
deemed to have occurred for purposes of Section 2.03(i) solely as
the result of such acquisition of securities by the Company which,
by reducing the number of shares of Common Stock outstanding,
increases the proportionate number of shares of Common Stock
beneficially owned by any person to 40% more of the shares of
Common Stock then outstanding; provided, however, that if any
person referred to in this sentence shall thereafter become the
beneficial owner of any additional shares of Common Stock (other
than pursuant to a stock split, stock dividend, or similar
transaction), then a "Change in Control" shall be deemed to have
occurred for purposes hereof.
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2.04 "Committee" shall mean, initially, the Compensation Committee
of the Board of Directors, and shall generally refer to the
applicable committee of the Board of Directors authorized from time
to time to administer the benefit plans of the Company.
2.05 "Company" shall mean the Company and any subsidiary or other
entity at any time at which 50% or more of the voting power or
beneficial interest of such subsidiary or other entity, is owned
directly or indirectly by the Company. References in the Plan to
the Company shall be deemed to include successors to the Company.
2.06 "Director" shall mean any member of the Board of Directors who
does not participate in any defined benefit pension plan of the
Company.
2.07 "Plan" shall mean the 1994 Director Retirement Plan, as
described herein and as amended from time to time.
2.08 "Retiree" shall mean any Director who retires from the Board of
Directors with the written consent of the Committee, or without the
consent of the Committee if the Director is age 62 or older and has
resigned from the Board of Directors or has permitted his last term
on the Board of Directors to expire, on or after the Effective Date
of the Plan; provided, however, that any such Director is not at
the time of retirement or resignation then subject to a proceeding
involving Removal for Cause (as permitted in the Company's
By-Laws), or such Director is not then the subject of specific,
written allegations that would support Removal for Cause (as
permitted in the Company's By-Laws).
2.09 "Surviving Spouse" shall mean a person who is married to a
Director at the date of his death and for at least one year prior
thereto.
2.10 "Years of Service" shall mean the number of continuous 12 month
periods occurring in succession during which a Director serves on
the Board of Directors, beginning on the date that service on the
Board of Directors was commenced. There shall be no proration of
Years of Service. If an individual's service as a Director is
interrupted with the consent of the Committee, but later resumes,
service shall include the period of time before and the period of
time after the interruption of service on the Board of Directors.
SECTION 3. ELIGIBILITY
3.01 All Directors of the Company who, on or after the effective
date of the Plan: (a) become Retirees, (b) are age 62 or older,
and (c) complete at least five Years of Service, are eligible to
receive Benefits under the Plan. A Director who completes fewer
than five complete Years of Service is not eligible for any
Benefits under the Plan without respect to the reason or reasons
that service on the Board of Directors terminated. A Director need
not be an active director of the Company when he becomes age 62 to
be eligible to receive Benefits, provided that he has previously
satisfied the minimum of five Years of Service at the time he
becomes a Retiree, at which point he becomes vested under the Plan.
SECTION 4. PLAN BENEFITS
4.01 Benefits under the Plan shall be payable by the Company only
with respect to Directors who are Retirees or become Retirees.
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4.02 Except as provided in Section 4.04, a Retiree shall be entitled
to begin receiving monthly payments of the Benefits under the Plan
immediately following the effective date of his resignation from or
expiration of his last term on the Board of Directors, or upon
reaching age 62, whichever date occurs later. A Retiree may, upon
written notice to the Committee and at the Retiree's sole
discretion, defer commencement of his Benefits beyond reaching age
62. Payment of the Benefits shall be made monthly in advance.
4.03 Except as provided in Section 4.04, the Benefits shall continue
and be due and payable to the Retiree for a term equal to the
shorter of three periods: (i) ten years; (ii) the number of Years
of Service by the Retiree, or (iii) the life of the Retiree and his
Surviving Spouse. Payment of the Benefits to a Retiree or his
Surviving Spouse for a Retiree with ten or more Years of Service
shall continue up to a maximum of ten years.
4.04 Notwithstanding the provisions of Section 4.02 and Section
4.03, if a Change in Control occurs, each Director with at least
five Years of Service who resigns from the Board of Directors or
permits his term to expire, or is forced to resign from the Board
of Directors, or who otherwise is or becomes a Retiree, whether
before or as a result of such Change of Control, shall be entitled
to receive an immediate lump sum payment in cash equal to the net
present value of the Benefits that would have been payable if the
age of such Director were the greater of: (i) The Director's actual
age at the time of becoming a Retiree or (ii) age 62, less any
Benefits previously paid to the Retiree. In computing such a net
present value the Committee shall utilize an interest rate
assumption equal to the applicable interest rate (expressed as a
percentage) used by the Pension Benefit Guaranty Company for
valuing benefits for single employer plans that terminate on the
date of such calculation, less two (2) percentage points.
4.05 If a Director dies before the commencement of payment of his
Benefits, then his Surviving Spouse, upon reaching age 62, shall
receive the Benefits that would otherwise be payable to the
Director as a Retiree under the Plan. The Company may, in its sole
and absolute discretion, make such payment in a lump sum to the
Surviving Spouse upon the death of the Director, using a current
discount rate of interest or the rate prescribed in Section 4.04.
SECTION 5. ADMINISTRATION
5.01 The administration of the Plan shall be vested in the
Committee. The Committee is authorized: (a) to adopt, alter and
repeal administrative rules, guidelines and regulations for
carrying out the Plan; (b) to determine whether and to what extent
Benefits are payable under the Plan; (c) to determine the other
terms, conditions and provisions of Benefits under the Plan; and
(d) to interpret the Plan, in all cases in the Committee's sole
discretion consistent with the Plan provisions. The interpretation
of and decisions regarding any questions arising under the Plan
made by the Committee shall be final and conclusive and binding
upon all participants under the Plan. All expenses incurred in
connection with administration of the Plan shall be paid for by the
Company.
SECTION 6. EFFECTIVE DATE
6.01 The Effective Date of the Plan Shall be June 1, 1994.
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SECTION 7. GENERAL PROVISIONS
7.01 If the Committee shall find that a Retiree is unable to care
for his affairs because of illness or accident, the Committee may
direct that any Benefit payment due him, unless claim shall have
been made therefore by a duly appointed legal representative, be
paid to his Spouse, and any such payment so made shall constitute
a discharge of the liabilities of the Plan therefor.
7.02 Benefits shall continue and be payable to the Retiree's
Surviving Spouse upon the death of the Retiree, up to the maximum
period prescribed.
7.03 Subject to any applicable law, no Benefit under the Plan shall
be subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance or charge, and any
attempt to do so shall be void, nor shall any Benefit be in any
manner liable for or subject to the debts, contracts, liabilities,
engagements or torts of the Retiree.
7.04 If a Director shall at any time be convicted of a crime
involving dishonesty or fraud on the part of such Director directly
relating to his relationship with the Company, all Benefits that
would otherwise be payable to him under the Plan shall be
forfeited.
7.05 The rights of any Director to Benefits under the Plan prior to
the actual receipt of such benefits shall be limited to those of a
general unsecured creditor of the Company. The Company is under no
requirement to fund the Plan.
7.06 The Plan shall be construed, regulated and administered under
the laws of the State of New York.
7.07 The masculine pronoun shall mean the feminine wherever
appropriate.
7.08 Each Retiree shall keep the Company informed of his current
address and the current address of his Spouse. The Company shall
not be obligated to search for the whereabouts of any person. If
the location of a Retiree is not made known to the Company within
three years after the date on which the first payment of Benefits
is to be made, and the Company is likewise unable to locate a
Surviving Spouse, then the Company shall have no further obligation
to pay any benefit hereunder to such Retiree or Surviving Spouse or
any other person, and such Benefits shall be irrevocably forfeited.
7.09 Notwithstanding any of the provisions of the Plan, no
individual acting as an employee, Director or an agent of the
Company shall be personally liable to any Retiree, other Director,
Surviving Spouse or any other person for any claim, loss, liability
or expense incurred in connection with the Plan.
SECTION 8. AMENDMENT AND TERMINATION
8.01 The Board of Directors reserves the right to modify or to
amend, in whole or in part, or to terminate, this Plan at any time;
provided, however, that no such modification, amendment or
termination shall adversely affect the right of any retired
Director to receive benefits under the Plan had the Plan not been
modified, amended or terminated, taking into account such
Director's Years of Service and age at the time of such
modification, amendment or termination.
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