Exhibit 10.1
Execution Copy
January 7, 2009
Scott A. Edmonds
c/o Chico’s FAS, Inc.
11215 Metro Parkway
Ft. Myers, Florida 33912
Dear Scott:
Reference is made to your employment agreement with Chico’s FAS, Inc. (the
“Company”), dated December 29, 2003, as amended on June 22, 2004 and
December 19, 2008 (the “Employment Agreement”). We understand that you have
determined to resign as an officer and director of the Company. This letter (the
“Letter”) addresses certain matters arising under your Employment Agreement and
otherwise in connection with your separation from employment with the Company.
Unless otherwise defined herein, capitalized terms shall have the meaning set
forth in the Employment Agreement.
     1.     Separation from Employment. Your separation from employment will be
effective as of January 7, 2009 (the “Separation Date”) and as of such date you
shall cease to be employed by the Company in any capacity and you shall resign
from all executive positions you then hold with the Company and its
subsidiaries. Your resignation as a member of the Board of Directors of the
Company (as well as of the Board of Directors of any of the Company’s
subsidiaries) shall be effective as of the Separation Date. Notwithstanding
anything in the Employment Agreement to the contrary, in consideration of your
execution of this Letter, and as further provided herein, the parties agree that
your resignation from the Company (i) shall be treated under the Employment
Agreement as a “Termination By Employer Without Good Cause” pursuant to Section
8(d) of the Employment Agreement and an involuntary termination by the Company
without cause for purposes of any other Company benefit plan or arrangement
(including your Accrued Amounts), (ii) shall constitute a “separation from
service” within the meaning of Section 409A of the Code as of the Separation
Date, and (iii) shall not be subject to any prior notice provisions under the
Employment Agreement. The Company shall continue to pay you at your current rate
of basic salary and benefits through the Separation Date, in accordance with the
Company’s payroll practices.
     2.     Payments Due Under the Employment Agreement. (a) Pursuant to Section
8(d) of the Employment Agreement, and conditioned on your execution of the
release attached as Exhibit A to this Letter on the Separation Date and such
release becoming effective pursuant to its terms on January 15, 2009 (such date
being the “Effective Date” so long as you do not exercise your right to revoke
such release on or before January 14, 2009), the Company shall pay you (subject
to the payment delay provided for in the succeeding sentence) an aggregate of
$4,376,000 (the “Separation Amount”), which represents two times the sum of
(i) your current annual salary ($1,094,000) (“Basic Salary”) and (ii) your
target bonus for the fiscal year ending January 31, 2009 (100% of Basic Salary).
As provided for in Section 8(d) of the

 

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Employment Agreement, the Separation Amount shall be paid to you or your estate
(as the case may be), by wire transfer to an account designated by you or your
legal representative in advance, on the earlier of the date which is six
(6) months and one (1) day following the Separation Date or your death (the
“409A Payment Date”). You shall also receive a pro-rata bonus, to the extent a
bonus would otherwise be payable, for the applicable bonus period ending
January 31, 2009, calculated in accordance with Section 8(b)(ii)(B) of the
Employment Agreement (the “Pro Rata Bonus”), with such payment to be made to you
in 2009 if and when fiscal year 2008 bonuses are paid to other executives of the
Company. There shall be deducted from the payment of the Separation Amount and
Pro Rata Bonus all applicable federal, state and local withholding taxes and
other appropriate deductions.
     3.     Benefit Coverage Under the Employment Agreement. On and after the
Effective Date, the Company shall provide you with continued health benefits for
you and your dependents as provided under Sections 8(b)(ii)(C) and 8(d) of your
Employment Agreement, either in the form of continued coverage or, if such
continued coverage would be a taxable benefit, in the form of lump sum payment
provided for under Section 8(b)(ii)(C) thereof. The provisions of Section 3(d)
of the Employment Agreement shall apply to the reimbursement for costs, expenses
or in-kind benefits in connection with your termination of employment. In the
event that the Company changes to a partially or fully self-insured health plan
during the coverage period that would be taxable to you under Section 105(h) of
the Code, the parties mutually agree to negotiate in good faith at such time and
to take commercially reasonable actions with the goal of providing that you
shall not be subject to taxation for such continued health coverage.
     4.     Treatment of Equity Awards. (a) You have been granted stock options
to purchase shares of common stock of the Company (the “Options”) pursuant to
the terms of the Chico’s FAS, Inc. Omnibus Stock and Incentive Plan (the “Stock
Incentive Plan”), as follows:

                                  Vested                 Options   Number of  
Exercise         as of   Unvested   Price Per   Remaining Vesting Grant Date  
1/7/2009   Options   Share   Dates
2/24/2003
    50,000       0     $ 8.80      
12/4/2003
    100,000       0     $ 17.325      
2/2/2004
    133,334       0     $ 18.665      
1/31/2005
    187,500       0     $ 26.34      
1/31/2006
    60,000       30,000     $ 43.56      
3/9/2007
    30,000       60,000     $ 22.47     3/9/2009, 3/9/2010
3/7/2008
    0       90,000     $ 7.42     3/7/2009, 3/7/2010,
3/7/2011

     (b) you have been granted restricted shares of common stock of the Company
(the “Restricted Shares”) pursuant to the terms of the Stock Incentive Plan, as
follows:

                  Number of         Unvested Out-         Standing Restricted  
  Grant Date   Shares   Vesting Dates
1/31/2006
    10,000     1/31/2009
3/9/2007
    20,000     3/9/2009; 3/9/2010
6/8/2007
    16,667     6/8/2009; 6/8/2010
3/7/2008
    30,000     3/7/2009; 3/7/2010; 3/7/2011

     (c) As of the Effective Date, and as provided for the Employment Agreement,
the Options and Restricted Shares shall be fully vested and in the case of the
Options, fully exercisable until the earlier to occur of the ninetieth (90th)
day following the Separation Date or the original expiration date of the Options
as set forth in the Stock Incentive Plan or applicable Option agreements.
     5.     Outplacement Services. As provided for in Section 8(b)(ii) of the
Employment Agreement, the Company shall provide you with executive outplacement
assistance for one (1) year after the Separation Date.
     6.     Accrued Benefits. As provided for in Section 8(a)(i) of the
Employment Agreement, the Accrued Amounts shall be paid within sixty (60) days
of the Separation Date, with any bonus amount to be paid as it would otherwise
have been paid in the normal course. In addition, following the Separation Date,
you will be entitled to receive vested amounts payable to you under the
Company’s 401(k) plan, Nonqualified Deferred Compensation Plans and other
retirement and deferred compensation plans in accordance with the terms of such
plans and applicable law.
     7.     Employment Agreement Provisions. Notwithstanding your separation
from employment, your rights and obligations under the following provisions of
the Employment Agreement shall remain in full force and effect: Section 10
(“Confidentiality”), Section 11 (“Noncompetition and Nonsolicitation”),
Section 12 (“Specific Performance”), Section 13 (“Excise Taxes”), Section 15
(“Indemnification”), Section 16 (“Liability Insurance”), Section 18
(“Arbitration”) and Section 21 (“Binding Effect; Assignment”). The Company
confirms that, as of the Separation Date, it has in compliance with the
Employment Agreement arranged for and has in place directors and officers
insurance coverage for you following the Separation Date.
     8.     Press Release. You and the Company agree that the Company shall
issue a press release announcing your resignation promptly after the date hereof
and that any further press releases and/or governmental filings with regard to
the topics covered therein shall be consistent therewith. The Company agrees to
provide you with an opportunity to review and comment upon the content of the
press release a reasonable period in advance of its issuance, and to consider
your comments in good faith before finalizing the press release.

 

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     9.     Personal Effects. The Company shall cooperate with the Executive and
permit the Executive to remove or direct the removal of his personal papers and
possessions and effects from his office.
     10.     Cooperation in Transition.
     (a) The Executive agrees to be reasonably available, through March 31,
2009, to provide reasonable transition assistance to the Company; provided, that
such assistance shall not require a significant expenditure of time or otherwise
result in Executive’s provision of services to the Company that would otherwise
affect his “separation from service” as of the Separation Date for purposes of
Section 409A of the Code. The Company agrees to promptly reimburse the Executive
for reasonable expenses incurred by him in connection with his cooperation
pursuant to this paragraph.
     (b) The Executive agrees that, in the event he is subpoenaed or otherwise
required by any person or entity (including, but not limited to, any government
agency) to give testimony or produce documents (in a deposition, court
proceeding or otherwise) which in any way relates to the Executive’s employment
by the Company, he will, to the extent not legally prohibited from doing so,
give prompt notice of such request to the General Counsel of the Company so that
the Company may contest the right of the requesting person or entity to such
disclosure before making such disclosure. Nothing in this provision shall
require the Executive to violate his obligation to comply with valid legal
process.
     (c) The Company agrees that payment by the Company of any amounts to the
Executive under the terms of this Letter and the Employment Agreement, other
than the reimbursement obligations set forth in this Section 10, shall not be
conditioned upon compliance by the Executive with the foregoing paragraphs
(a) and (b).
     11.     Attorney’s Fees. The Company shall reimburse you for your
reasonable attorney’s fees incurred in connection with your separation from
employment, with such amount to be paid to you on the 409A Payment Date.
     12.     No Mitigation/Settoff. The Executive shall not be required to
mitigate the amount of any payment or benefit contemplated by Section 8 of the
Employment Agreement or this Letter, nor shall any such payment or benefit
described under those sections be reduced by any earnings or benefits you may
receive from any other source. The Company’s obligation to pay you the amounts
and benefits provided under the Employment Agreement and hereunder shall not be
subject to set-off, counterclaim or recoupment of amounts owed by the Executive
to the Company or its affiliates.

 

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Signature:
  /s/ Scott A. Edmonds   Date:   January 7, 2009
 
           
 
  Scott A. Edmonds        

              CHICO’S FAS, INC.        
 
           
By:
  /s/ Ross Roeder    Date:   January 7, 2009
 
           
 
 
Title:
  Chairman of the Board         
 
           

 

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EXHIBIT A
TO
EMPLOYMENT AGREEMENT WITH SCOTT A. EDMONDS
DATED AS OF SEPTEMBER 3, 2003
RELEASE
     WHEREAS, Scott A. Edmonds (the “Executive”) is an employee of Chico’s FAS,
Inc., (the “Company”) and is a party to the Employment Agreement dated as of
September 3, 2003 (the “Agreement”);
     WHEREAS, the Executive’s employment has been terminated and such
termination has been treated by the parties as a “Termination By Employer
Without Good Cause” pursuant to section 8(d) of the Agreement; and
     WHEREAS, the Executive is required to sign this Release in order to receive
the payment of any compensation under Section 8 of the Agreement following
termination of employment (other than to receive amounts earned and accrued
prior to such termination).
     NOW, THEREFORE, in consideration of the promises and agreements contained
herein and other good and valuable consideration, the sufficiency and receipt of
which are hereby acknowledged, and intending to be legally bound, the Executive
agrees as follows:
     1.     This Release is effective on the date hereof and will continue in
effect as provided herein.
     2.     In consideration of the payments to be made and the benefits to be
received by the Executive pursuant to the Agreement as set forth in Section 2 of
the letter agreement (the “Letter Agreement”) dated January 7, 2009
(collectively, the “Release Consideration), which the Executive acknowledges are
in addition to payments and benefits to which the Executive would be entitled
but for the Agreement, the Executive, for the Executive and the Executive’s
dependents, successors, assigns, heirs, executors and administrators (and their
respective legal representatives of every kind), hereby releases, dismisses,
remises and forever discharges the Company, its predecessors, parents,
subsidiaries, divisions, related or affiliated companies, officers, directors,
stockholders, members, employees, heirs, successors, assigns, representatives,
agents and counsel (collectively the “Released Party”) from any and all
arbitrations, claims (including claims for attorneys’ fees), demands, damages,
suits, proceedings, actions and/or causes of action of any kind and every
description, whether known or unknown, which the Executive now has or may have
had for, upon, or by reason of any cause whatsoever up to the date the Executive
signs this Agreement (“Claims”), against the Released Party, including but not
limited to:

 

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     (a)     any and all Claims arising out of or relating to Executive’s
employment by or service with the Company and the Executive’s termination from
the Company;
     (b)     any and all Claims of discrimination, including, but not limited
to, Claims of discrimination on the basis of sex, race, age, national origin,
marital status, religion or handicap, including, specifically, but without
limiting the generality of the foregoing, any Claims under the Age
Discrimination in Employment Act, as amended, Title VII of the Civil Rights Act
of 1964, as amended, the Americans with Disabilities Act; and
     (c)     any and all Claims of wrongful or unjust discharge or breach of any
contract or promise, express or implied. Notwithstanding the foregoing, nothing
herein shall be considered as releasing the Released Party from:
          (i)     its obligations to pay and/or provide the Release
Consideration or as an agreement by the Executive not to file a lawsuit to
enforce the payment and/or providing of the Release Consideration;
          (ii)     any rights that the Executive may have to indemnification and
directors and officers liability insurance coverage;
          (iii)     the Executive’s right to enforce the terms of the Agreement
and the Letter Agreement; and
          (iv)     any rights that cannot be waived by applicable law.
     3.     The Executive acknowledges and agrees that no further sums are owed
to him by the Company or any of the Released Parties arising out of or relating
to Executive’s employment with the Company, except as expressly provided in the
Agreement, the Letter Agreement, or with respect to the Accrued Amounts.
     4.     The Executive represents that he has not filed against the Company
or any of the Released Parties any complaints, charges or lawsuits arising out
of his employment by the Company, or any other matters arising on or prior to
the date he signed this Release. Executive covenants and agrees that he will not
seek any personal recovery against the Company or any of the Released Parties
arising out of any of the matters released in this Release.
     5.     The Executive understands and acknowledges that the Company does not
admit any violation of law, liability or invasion of any of the Executive rights
and that any such violation, liability or invasion is expressly denied. The
consideration provided

 

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for this Release is made for the purpose of settling and extinguishing all
Claims and rights (and every other similar or dissimilar matter) that the
Executive ever had or now may have against the Company to the extent provided in
this Release. The Executive further agrees and acknowledges that no
representations, promises or inducements have been made that the Company other
than as appear in the Agreement.
     6.     The Executive further agrees and acknowledges that:
          (a)     the Release provided for herein solely releases Claims up to
and including the date of execution of this Release;
          (b)     the Executive has been advised by the Company to consult with
legal counsel prior to executing this Release, has had an opportunity to consult
with and to be advised by legal counsel of the Executive’s choice, fully
understands the terms of this Release, and enters into this Release freely,
voluntarily and intending to be found;
          (c)     the Executive has been given a period of more than 21 days to
review and consider the terms of this Release prior to Executive’s execution (as
Executive acknowledges and agrees that the substantial form of this Release was
originally provided to him for his review in the Employment Agreement and that
subsequent negotiations, material or immaterial, did not restart the 21 day
review period); and
          (d)     the Executive may, within 7 days after execution, revoke this
Release. Revocation shall be made by delivering a written notice of revocation
to the Chief Financial Officer at the Company. For such revocation to be
effective, written notice must be actually received by the Chief Financial
Officer at the Company no later than the close of business on the 7th day after
the Executive executes this Release. If the Executive does exercise the
Executive’s right to revoke this Release, all of the terms and conditions of the
Release shall be of no force and effect and the Company shall not have any
obligation to make payments or provide benefits to the Executive as set forth in
Sections 8 of the Agreement.
     7.     The Executive waives and releases any Claims that the Executive has
or may have to reemployment after January 7, 2009.

 

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IN WITNESS WHEREOF, the Executive has executed and delivered this Release on the
date set forth below.

         
Dated:
  January 7, 2009    
 
       
 
        /s/ Scott A. Edmonds           Executive