exv10w17



 




Exhibit 10.17






February 8,
2006


Michael James Leedy

318 Meadow lane

Sewickley, PA 15143




VIA EMAIL




Dear Michael:



It is with great pleasure that we offer you the opportunity to join Chico’s FAS, Inc. as our Chief
Marketing Officer. This offer is subject to, and contingent upon, the approval of our Board of
Directors. As you are aware, Chico’s is a fast-growing respected organization within which
marketing is a key driver of our success. As one of the top specialty retailers we offer tremendous
opportunity for personal and professional growth. Please let this letter serve as an offer to join
Chico’s FAS, Inc. and your acceptance of that offer. The following will outline the specifics:




	 	 	 
	Title:

	 	Senior Vice President & Chief Marketing Officer
	 
	 	 
	Duties:

	 	Member of the Management Committee. Responsible for all of the
marketing activities, including distinct catalogs and websites for each
Chico’s brand as set forth more fully in the attached position
description. Duties currently include oversight of e-commerce
initiatives for all brands.
	 
	 	 
	Reporting to:

	 	Chief Operating Officer
	 
	 	 
	Base Salary:

	 	$525,000.00 annually
	 
	 	 
	Start Date:

	 	April 3, 2006
	 
	 	 
	Incentive Bonus:

	 	Range: 60%-120% of base salary earned during the semi annual
bonus period, which is contingent upon the achievement of corporate
financial targets established by the Chico’s Board of Directors; paid
semi-annually (generally in September and March). Bonus for the
2006 Spring season will be prorated based on actual employment
start date. Our two semi-annual bonus periods are February thru July
and August thru January. Payouts normally occur at or around the
time of our earnings release in early March, and early September.
	 
	 	 
	Super Bonus:

	 	Chico’s currently has a Super Bonus program for certain members of
management. The super bonus payout is currently based on
achievement of financial performance objectives, incremental to the
annual operating plan established by the Chico’s Board of Directors.
The Super Bonus is subject to annual approval by the Board of
Directors. The Board is currently reviewing this program for 2006. In
2005, the Super bonus opportunity for this position was 30% of base
earned during the fiscal year. To qualify for any super bonus payout,
Chico’s FAS, Inc. must achieve its EPS growth plan for fiscal 2006.
Super Bonuses are paid on an annual basis. Any earned payout is






h   u   m   a   n       r   e   s   o   u   r   c   e   s




Chico’s FAS, Inc. • 11215 Metro Parkway • Fort Myers, Florida 33912 • (239) 277-6200















 







Michael J. Leedy

February 8, 2006

Page 2




	 	 	 
	 

	 	expected to be paid at or around the time of the earnings release,
during the first week of March. This program must be approved by
the Board of Directors and has not yet been reviewed for the 2006
fiscal year. If the Board of Directors does not renew the Super Bonus
program for 2006 no payments will be made regardless of
performance.
	 
	 	 
	Stock options:

	 	A one-time grant on start date of 35,000 non-qualified stock options
at Fair Market value on date of hire. These options will vest over a 3-year
period with one-third vesting each year on the anniversary of
your hire date. You will be eligible for additional grants at the end of
each fiscal year.
	 
	 	 
	Restricted Stock:

	 	A one-time grant on start date of 5,000 shares of restricted stock with
two-year vesting. These shares will vest over a two-year period with
one-half vesting on each of the first and second anniversaries of your
hire date. You will be eligible for additional grants at the end of each
fiscal year.
	 
	 	 
	Equity Compensation Value:

	 	Total value of options and Restricted Stock = $967,500
	 

	 	Black Scholes Value of 35,000 options is approximately $752,500
based on $43 stock price and 50% Black-Scholes valuation. Value of
the Restricted Stock is approximately $215,000 based upon $43 stock
price. For more complete information, please see the attached Chico’s
FAS, Inc. 2002 Omnibus Stock and Incentive Plan.
	 
	 	 
	Severance:

	 	If we terminate your employment without cause, we will continue to
pay you your base salary for a period of twelve-months following the
date of termination. In general terms, cause shall mean any action or
inaction by you that causes the company substantial harm. If,
however, Chico’s adopts a severance plan applicable to all
officers, you
agree that any such plan will supersede the provisions of this
paragraph.
	 
	 	 
	Change of Control:

	 	If there is a greater than 50%
change in Company ownership or
greater than 50% turnover in the Company’s Board of Directors in any
12 month period that results in your good faith determination that you
can no longer adequately perform your duties as a senior officer
resulting in your voluntarily terminating your employment, then you
will be entitled to a lump sum payment of your annual salary. If,
however, Chico’s adopts a severance plan applicable to all officers that
covers a change of control, you agree that such plan will supersede
the provisions of this paragraph.
	 
	 	 
	Change of Management:

	 	If both Scott Edmonds and Charles Nesbit cease to be employed by
Chico’s, for any reason, within the first year of your employment that
results in your good faith determination that you can no longer
adequately perform your duties as a senior officer resulting in your

















 







Michael J. Leedy

February 8, 2006

Page 3




	 	 	 
	 

	 	voluntarily terminating your employment then you will be entitled to a
lump sum payment of your annual salary; provided, however, that
your rights under this paragraph must be exercised within 90 days of
the last of Mr. Edmonds or Mr. Nesbit leaving and you must provide
Chico’s with at least 90 days written notice of your intention to
voluntarily terminate your employment. If you exercise your rights
under this paragraph, you agree to execute a Non-Competition and
Non-Solicitation Agreement substantially in the form of the
Agreement attached to this letter.
	 
	 	 
	Timing of Payments:

	 	In the event that at the time your employment with Chico’s FAS, Inc. terminates Chico’s FAS, Inc. is publicly
traded (as defined in Section 409A of the Internal Revenue Code), any amounts payable under this Offer Letter that would otherwise
be considered deferred compensation subject to the additional twenty percent (20%) tax imposed by Section 409A if paid within six
(6) months following the date of termination of Chico’s FAS, Inc. employment shall be paid at the later of the time otherwise
provided in the Offer Letter or the time that will prevent such amounts from being considered deferred compensation.
	 
	 	 
	Car Allowance:

	 	$12,000.00 annually ($1,000 per month.)
	 
	 	 
	Time Off:

	 	You will be eligible for three weeks of vacation per calendar
year starting in 2006, as well as three personal, one floating holiday,
and up to six sick days per year.
	 
	 	 
	Annual
Review:

	 	Merit reviews and equity grants for
officers are considered at the end of the fiscal year, approximately
February of each year.





You will also be eligible to participate in Chico’s FAS, Inc. comprehensive benefits program outlined below:




	 	 	 
	Group Insurance

Plan:

	 	Medical/Dental/Vision

Chico’s will reimburse you for COBRA premiums on medical insurance with
your old company until you are eligible for the Chico’s medical
insurance. If you elect not to enroll in the Chico’s program when
eligible, COBRA payments will cease.
	 
	 	 
	 

	 	Eligibility Date: first day of the month after 60 days of employment
	 
	 	 
	Life Insurance:

	 	Chico’s provides term insurance equal to 1X your base salary; in
addition Chico’s provides accidental death and dismemberment insurance
equal to 1X your base salary. Supplemental insurance is available for
purchase.
	 
	 	 
	 

	 	Eligibility Date: first day of the month after 60 days of employment


















 







Michael J. Leedy

February 8, 2006

Page 4




	 	 	 
	401(k) Plan:

	 	Eligible deferral of 1-50% of your compensation (subject to an IRS
	 

	 	maximum), with a match of 50% of the first 6% of compensation you defer.
	 

	 	You will be able to roll over existing qualified funds immediately.
	 
	 	 
	 

	 	Eligibility Date: first quarter after 12 months of employment
	 
	 	 
	Deferred

Compensation

	 	 
	Plan:

	 	As an officer of Chico’s, you will be immediately eligible to participate in the
	 

	 	Chico’s Deferred Compensation Plan. You will have the opportunity to defer
	 

	 	pre-tax compensation (less applicable FICA/Medicare tax withholding). You
	 

	 	may defer up to 80% of your base salary payable during 2006, and up to
	 

	 	100% of your semi-annual bonus paid for the second half of 2006, payable in
	 

	 	March 2007.
	 
	 	 
	Stock Purchase

	 	 
	Plan:

	 	Opportunity to purchase Chico’s stock directly from the company, two times a
	 

	 	year, in March and September.
	 
	 	 
	 

	 	Eligibility Date: March, 2007






Relocation:




In order to ensure a successful relocation, Chico’s FAS, Inc. will provide the following relocation

assistance:




	 	•	 	Purchase of your home in Sewickley, PA.
	 
	 	•	 	Packing of household goods
	 
	 	•	 	Movement and insurance of household goods from Sewickley, PA to Fort Myers, FL
	 
	 	•	 	Temporary storage of household goods up to six months (if necessary)
	 
	 	•	 	Temporary housing up to six months (if necessary)
	 
	 	•	 	Movement of vehicle(s) from Sewickley, PA to Fort Myers, FL
	 
	 	•	 	Transportation for your final relocation trip from Sewickley, PA to Fort Myers, FL
	 
	 	•	 	Reimbursement of up to $10,000.00 for documented miscellaneous relocation expenses associated with the sale of your Sewickley home and the
purchase of a home in southwest Florida. Points or other fees paid to lower the interest rate on a mortgage are not eligible for reimbursement.
	 
	 	•	 	Reimbursement for up to two months of COBRA insurance
coverage with your current provider
	 
	 	•	 	Up to six airline tickets for return trips to Sewickley, PA
	 
	 	•	 	Taxable relocation expenses will be grossed up for taxes





Please indicate your acceptance of our offer by signing below and returning to my attention by a
confidential fax at 239-274-5186. By signing this letter you warrant that you are not a party to
any agreement that would bar or limit the scope of your employment with Chico’s FAS, Inc. As we
discussed, this offer is contingent upon a successful background check, references and an
evaluation



 


















 




Michael J. Leedy

February 8, 2006

Page 5



from Organizational Diagnostics, Dr. Bud Bolton. To enable us to complete the background check,
please sign and return the attached Background Inquiry Authorization form.



Michael, we are looking forward to having you on our Chico’s team. Let me be the first to welcome
you aboard! We are sure you will find it a challenging and rewarding experience.



If you have any questions, please feel free to call me at 239-274-4239.




Regards,




/s/ Brett K. Avner




Brett Avner

Senior Vice President Human Resources




	 	 	 	 
	 
	 	 
	Accepted by:
	 	 
	 
	 	 
	/s/ Michael James Leedy

	 	APRIL 3RD, 2006
	 

	 	 
	Michael James Leedy

	 	Date







 









 







Michael J. Leedy

February 8, 2006

Page 6




Chico’s FAS, Inc. Relocation Offer Addendum — Michael James
Leedy



Chico’s FAS, Inc. (Chico’s) hereby includes as part of it’s Offer of Employment to Michael James
Leedy, an offer to purchase his home through a designated third-party relocation vendor. One of
the most expensive portions of the relocation process is the sale of the current residence. Chico’s
will provide home marketing and home sale assistance to you. We anticipate as a relocating
Associate that you will take full advantage of this assistance.



It is very important that you refrain from contacting any real estate agents until you have reviewed
the relocation offer and talked with Chico’s third-party relocation vendor. The program has been
designed to help you effectively market your home and to achieve a sale in the shortest amount of time.



In order to qualify to have your home purchased through Chico’s relocation offer, we require that
you:





	 	•	 	Not sign a listing agreement. Chico’s designated third-party relocation vendor will enter into
the listing agreement with the real estate broker but instead you will enter into an Option
and Put Agreement with Chico’s designated third-party relocation vendor giving them the
exclusive right to purchase your home at fair market value which will be determined by
appraisals or a market driven offer.
	 	•	 	Cooperate with Chico’s designated third-party relocation vendor in the marketing of your
home.
	 	•	 	Not sign any contract with a buyer nor accept any money from a buyer as earnest money or
down payment and Inform Chico’s and Chico’s designated third-party relocation vendor of
all outside offers you receive.




Although Chico’s and Chico’s designated third-party relocation vendor will work with you to obtain
the best possible price for your home, prior to completion of the appraised value sale process,
fluctuations in property value due to changing market conditions are an inherent risk of home
ownership and not the responsibility of Chico’s. After the appraised value purchase from you is
complete, gains or losses on the sale of the home will be the responsibility of Chico’s designated
third-party relocation vendor.



Chico’s designated third-party relocation vendor is responsible for ensuring the closing process is
well managed and cost-efficient. They ensure all legal issues are addressed, including arranging for
title work and required inspections. If you feel a personal attorney is necessary to protect your
interests, the cost of such services will be your responsibility and payment must be made outside the
closing process.




Appraised Value Sale Process



In order to determine the value at which Chico’s designated third-party relocation vendor will
purchase your home, they will provide you with a list of qualified appraisers from which you should
select two. Chico’s designated third-party relocation vendor will order fair market value appraisals
of your home from the selected appraisers at a time dictated by Chico’s designated third-party















 







Michael J. Leedy

February 8, 2006

Page 7



relocation vendor program. The average of the two appraised values will be designated as the
appraised value offer amount, unless they differ by more than 5%. In that case, a third is obtained
and the average of the two closest is the appraised value. Chico’s designated third-party
relocation vendor will provide you with an offer to purchase your home for the appraised value
after 60 days of marketing. You will have 30 days from the
offer date to return a fully executed
contract of sale, signifying acceptance of the offer.



Closing the Sale and Obtaining Your Equity



Once you have accepted the appraised value offer, Chico’s designated third-party relocation vendor
will assume responsibility for all mortgage payments, utilities and maintenance as of the date of
possession. Possession is defined as ninety days after the start of your employment with Chico’s,
or earlier if sold prior to that date.



Your equity will be your sales price minus your unpaid mortgage balance(s), tax pro-rations(s),
costs of any repairs and all other liens against your property.



Offers Received Prior to May 16th



You are obligated to bring all offers on your home to Chico’s designated third-party relocation
vendor attention. To minimize overall costs to Chico’s, it may be preferable in some cases to
accept an offer below the appraised value during the period prior to May 15, 2006. If Chico’s
designated third-party relocation vendor determines it would be in their best interest to accept an
offer below appraised value, this will be discussed with you. If a mutual decision is made to
accept the offer, you will receive the appraised value for the home.



Amended Value Sales



If prior to May 15, 2006, Chico’s designated third-party relocation vendor receive a bona fide
written offer to purchase the home at a price (the amended value) above the appraised value,
Chico’s designated third-party relocation vendor will review and approve the offer and consult with
you as to whether you will accept the offer. The appraised value amount will be amended to match
the terms negotiated between Chico’s designated third-party relocation vendor, you and the outside
buyer. Once you execute the amended value contract, Chico’s designated third-party relocation
vendor will purchase the property from you and will attempt to resell the property to the
third-party. If such an offer is received before you receive a contract of sale for the appraised
value, the appraised value will still be amended to the higher amount and the above procedures will
apply. Once Chico’s designated third-party relocation vendor executes this contract, should the
bona fide offer subsequently fall through, you will still receive the higher price.



Relocation Payback Provision



If you fail to start with the organization after having accepted our offer, you agree to repay all
relocation costs paid on your behalf. If you voluntarily leave the company one year or less after
your start date, you will be required to pay back to Chico’s 67% percent of the relocation costs
and associated expenses paid on your behalf. If you voluntarily leave the company between one and
two years of your start date, you will be required to pay back to Chico’s 33% percent of the
relocation costs and associated expenses paid on your behalf.