10-Q

FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT

For the Quarter Ended:	Commission File Number:
August 4, 2001	0-21258

CHICO’S FAS, Inc.
(Exact name of registrant as specified in charter)

Florida	59-2389435
(State of Incorporation)	(I.R.S. Employer Identification No.)

11215 Metro Parkway, Fort Myers, Florida 33912
(Address of principal executive offices)

941-277-6200
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [   ]

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practical date.

At August 20, 2001 there were 26,742,878 (post-split) shares outstanding of Common Stock, $.01 par value per share.

TABLE OF CONTENTS

	Condensed Consolidated Balance Sheets
	Condensed Consolidated Statements of Income
	Condensed Consolidated Statements of Cash Flows
	Notes to Condensed Consolidated Financial Statements
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
PART II – OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Signatures
Amendment of Amended Articles of Incorporation
Tedford Marlow Separation and Release Agreement
John W. Burden Indemnification Agreement
Ross E. Roeder Indemnification Agreement

CHICO’S FAS, Inc.

Index

PART I –	Financial Information
Item 1.	Financial Statements (Unaudited):
	Condensed Consolidated Balance Sheets – August 4, 2001 and February 3, 2001	3
	Condensed Consolidated Statements of Income for the Thirteen and Twenty-Six Weeks Ended August 4, 2001 and July 29, 2000	4
	Condensed Consolidated Statements of Cash Flows for the Twenty-Six Weeks Ended August 4, 2001 and July 29, 2000	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	8
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	12
PART II –	Other Information
Item 4.	Submission of Matters to a Vote of Security Holders	13
Item 6.	Exhibits and Reports on Form 8-K	13
Signatures		14

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CHICO’S FAS, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited)

			As of			As of
			08-04-01			02-03-01
ASSETS
Current Assets:
	Cash and cash equivalents		$	8,315,526		$	3,914,118
	Marketable securities, at market			21,321,250			14,221,520
	Receivables, net			3,848,417			2,998,910
	Inventories			29,299,357			24,394,162
	Prepaid expenses			3,413,808			2,254,349
	Deferred taxes			3,642,000			3,003,000
		Total Current Assets		69,840,358			50,786,059
Land, Building and Equipment:
	Cost			95,534,819			80,198,367
	Less accumulated depreciation and amortization			(17,910,977	)		(14,613,356	)
		Land, Building and Equipment, Net		77,623,842			65,585,011
Other Assets:
	Deferred taxes			1,152,000			747,000
	Other assets, net			725,247			688,547
		Total Other Assets		1,877,247			1,435,547
			$	149,341,447		$	117,806,617
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
	Accounts payable		$	12,797,023		$	13,751,762
	Accrued liabilities			12,816,631			11,299,352
	Current portion of debt and lease obligations			253,773			276,410
		Total Current Liabilities		25,867,427			25,327,524
Noncurrent Liabilities:
	Mortgage note payable			5,113,500			5,149,500
	Deferred rent			2,496,229			2,008,352
		Total Noncurrent Liabilities		7,609,729			7,157,852
Stockholders’ Equity:
	Common stock			267,446			174,994
	Additional paid-in capital			25,917,025			18,935,829
	Accumulated other comprehensive gain			46,907			47,246
	Retained earnings			89,632,913			66,163,172
		Total Stockholders’ Equity		115,864,291			85,321,241
			$	149,341,447		$	117,806,617

See Accompanying Notes

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CHICO’S FAS, Inc. and Subsidiaries
Condensed Consolidated Statements of Income
(Unaudited)

			Twenty-Six Weeks Ended				Thirteen Weeks Ended
			08-04-01		07-29-00		08-04-01		07-29-00
Net sales by Company stores			$	175,409,547	$	115,052,141	$	85,775,913	$	59,369,732
Net sales by catalog and Internet				4,639,911		203,123		2,343,495		203,123
Net sales to Franchisees				2,675,771		2,075,866		1,372,809		1,065,461
		Net sales		182,725,229		117,331,130		89,492,217		60,638,316
Cost of goods sold				72,748,964		48,407,946		35,807,668		25,643,952
		Gross profit		109,976,265		68,923,184		53,684,549		34,994,364
General, administrative and store operating expenses				72,371,429		45,235,343		35,942,236		23,267,122
		Income from operations		37,604,836		23,687,841		17,742,313		11,727,242
Interest income, net				248,905		268,505		146,300		171,184
		Income before taxes		37,853,741		23,956,346		17,888,613		11,898,426
Income tax provision				14,384,000		9,103,000		6,798,000		4,521,000
		Net income	$	23,469,741	$	14,853,346	$	11,090,613	$	7,377,426
Per share data:
	Net income per common share – basic(1)		$	0.88	$	0.58	$	0.42	$	0.28
	Net income per common and common equivalent share–diluted(1)		$	0.85	$	0.55	$	0.40	$	0.27
	Weighted average common shares outstanding–basic(1)			26,542,013		25,828,480		26,667,182		25,940,172
	Weighted average common and common equivalent shares outstanding–diluted(1)			27,739,842		26,949,267		27,870,403		27,115,089

(1) Restated to give retroactive effect to the 3 for 2 stock split payable May 16, 2001.

See Accompanying Notes

4

CHICO’S FAS, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)

					Twenty-Six Weeks Ended
					08-04-01			07-29-00
CASH FLOWS FROM OPERATING ACTIVITIES:
	Net income				$	23,469,741		$	14,853,346
	Adjustments to reconcile net income to net cash provided by operating activities:
		Depreciation and amortization				4,560,977			2,463,499
		Stock option compensation				44,644			—
		Deferred taxes				(1,044,000	)		(1,004,000	)
		Tax benefit of options exercised				3,840,000			1,804,000
		Loss on disposal of land, building and equipment				985,139			186,734
		Deferred rent expense, net				487,877			156,585
		Changes in assets and liabilities:
			Increase in receivables, net			(849,507	)		(237,485	)
			Increase in inventories			(4,905,195	)		(6,615,162	)
			Increase in prepaid expenses and other assets			(1,214,186	)		(1,028,125	)
			(Decrease) increase in accounts payable			(954,739	)		6,581,353
			Increase in accrued liabilities			1,494,642			2,848,334
				Total adjustments		2,445,652			5,155,733
		Net cash provided by operating activities				25,915,393			20,009,079
CASH FLOWS FROM INVESTING ACTIVITIES:
	Purchase of marketable securities, net					(7,100,069	)		(5,100,966	)
	Purchase of land, building and equipment					(17,516,920	)		(16,125,943	)
		Net cash used in investing activities				(24,616,989	)		(21,226,909	)
CASH FLOWS FROM FINANCING ACTIVITIES:
	Proceeds from issuances of common stock					3,189,004			1,117,480
	Principal payments on debt					(36,000	)		(36,000	)
	Deferred finance costs					(50,000	)		(15,000	)
		Net cash provided by financing activities				3,103,004			1,066,480
		Net increase (decrease) in cash and cash equivalents				4,401,408			(151,350	)
CASH AND CASH EQUIVALENTS – Beginning of Period						3,914,118			3,980,930
CASH AND CASH EQUIVALENTS – End of Period					$	8,315,526		$	3,829,580

See Accompanying Notes

5

CHICO’S FAS, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
August 4, 2001
(Unaudited)

ITEM 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Basis of Presentation

     The accompanying unaudited condensed consolidated financial statements of Chico’s FAS, Inc. and its wholly-owned subsidiaries (collectively, “Chico’s” or the “Company”) have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and notes required by accounting principles generally accepted in the U.S. for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. All significant intercompany balances and transactions have been eliminated in consolidation. For further information, refer to the consolidated financial statements and notes thereto for the fiscal year ended February 3, 2001, included in the Company’s Annual Report on Form 10-K filed on April 30, 2001. The February 3, 2001 balance sheet amounts were derived from audited financial statements included in the Company’s Annual Report.

     Operating results for the thirteen and twenty-six weeks ended August 4, 2001 are not necessarily indicative of the results that may be expected for the entire year. All per share data for the prior year has been restated to reflect the three-for-two stock split effective in May 2001.

Net Income Per Common and Common Equivalent Share

     Basic EPS is based upon the weighted average number of common shares outstanding and diluted EPS is based upon the weighted average number of common shares outstanding plus the dilutive common equivalent shares outstanding during the period. The following is a reconciliation of the denominators of the basic and diluted EPS computations shown on the face of the accompanying statements of income:

	Twenty-Six Weeks Ended				Thirteen Weeks Ended
	08-04-01		07-29-00		08-04-01		07-29-00
Basic weighted average outstanding common shares		26,542,013		25,828,480		26,667,182		25,940,172
Dilutive effect of options outstanding		1,197,829		1,120,787		1,203,221		1,174,917
Diluted weighted average common and common equivalent shares outstanding		27,739,842		26,949,267		27,870,403		27,115,089

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Summary of Recent Accounting Pronouncements

     On July 20, 2001, the Financial Accounting Standards Board issued Statements of Financial Accounting Standards No. 141 (SFAS No. 141), “Business Combinations”, and No. 142 (SFAS No. 142), “Goodwill and Other Intangible Assets.” SFAS No. 141 addresses financial accounting and reporting for goodwill and other intangible assets acquired in a business combination at acquisition. SFAS No. 141 requires the purchase method of accounting to be used for all business combinations initiated after June 30, 2001; establishes specific criteria for the recognition of intangible assets separately from goodwill; and requires unallocated negative goodwill to be written off immediately as an extraordinary gain (instead of being deferred and amortized). SFAS No. 142 addresses financial accounting and reporting for intangible assets acquired individually or with a group of other assets (but not those acquired in a business combination) at acquisition. SFAS No. 142 also addresses financial accounting and reporting for goodwill and other intangible assets subsequent to their acquisition. SFAS No. 142 provides that goodwill and intangible assets which have indefinite useful lives will not be amortized but rather will be tested at least annually for impairment. It also provides that intangible assets that have finite useful lives will continue to be amortized over their useful lives, but those lives will no longer be limited to forty years. SFAS No. 141 is effective for all business combinations initiated after June 30, 2001 and for all business combinations accounted for by the purchase method for which the date of acquisition is after June 30, 2001. The provisions of SFAS No. 142 are effective for fiscal years beginning after December 15, 2001. The Company will adopt SFAS No. 142 beginning February 3, 2002. The Company believes the adoption of SFAS No. 142 will not have a material effect on the Company’s results of operations.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Results of Operations – Thirteen Weeks Ended August 4, 2001 Compared to the Thirteen Weeks Ended July 29, 2000.

     Net Sales. Net sales by Company-owned stores for the thirteen weeks ended August 4, 2001 (the current period) increased by $26.4 million, or 44.5% over net sales by Company-owned stores for the comparable thirteen weeks ended July 29, 2000 (the prior period). The increase was the result of a comparable Company store net sales increase of $10.2 million and $16.2 million additional sales from the new stores not yet included in the Company’s comparable store base (net of sales of approximately $.4 million from four stores closed in the current and previous fiscal years).

     Net sales by catalog and Internet were $2.3 million for the current period versus approximately $203,000 in the prior period as the Company only began its catalog and Internet operations in late May 2000.

     Net sales to franchisees for the current period increased by $.3 million or 28.8% compared to net sales to franchisees for the prior period. The increase in net sales to franchisees was primarily due to a net increase in purchases by the franchisees as a whole and the opening of an additional franchised location after the second quarter of the last fiscal year by an existing franchisee.

     Gross Profit. Gross profit for the current period was $53.7 million, or 60.0% of net sales, compared with $35.0 million, or 57.7% of net sales, for the prior period. The increase in the gross profit percentage primarily resulted from an improvement in the Company’s initial markup on goods and lower markdowns as a percent of sales in the current period versus the prior period. To a lesser degree, the increase in the gross profit percentage resulted from leveraging costs associated with the Company’s distribution center, product development and merchandising areas, which costs are included in the Company’s cost of goods sold.

     General, Administrative and Store Operating Expenses. General, administrative and store operating expenses increased to $35.9 million, or 40.2% of net sales, in the current period from $23.3 million, or 38.4% of net sales, in the prior period. The increase in general, administrative and store operating expenses was, for the most part, the result of increases in store operating expenses, including store compensation, occupancy and other costs associated with additional store openings, and to a lesser degree, an increase in marketing expenses. The increase in these expenses as a percentage of net sales was principally due to an increase in store operating expenses, including store payroll (principally time associated with additional training), telephone, supplies and depreciation (principally related to the rollout of a new cash register system to the entire chain). It is not anticipated that this level of increase, as a percent of sales, will continue into the third and fourth quarters. To a lesser degree, this increase was due to an increase in direct marketing expenses as a percentage of net sales, comprising 2.7% of net sales in the current period, versus 2.0% of net sales in the prior period.

     Interest Income, Net. The Company had net interest income during the current period of approximately $146,000 versus approximately $171,000 in the prior period. The decrease in net interest income was primarily a result of a decrease in interest rates on cash and marketable securities.

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     Net Income. As a result of the factors discussed above, net income reflects an increase of 50.3% to $11.1 million in the current period from net income of $7.4 million in the prior period. The income tax provision represented an effective rate of 38% for the current and prior period.

Results of Operations — Twenty-Six Weeks Ending August 4, 2001 Compared to the Twenty-Six Weeks Ended July 29, 2000.

     Net Sales. Net sales by Company-owned stores for the twenty-six weeks ended August 4, 2001 (the current period) increased by $60.4 million, or 52.5% over net sales by Company-owned stores for the comparable twenty-six weeks ended July 29, 2000 (the prior period). The increase was the result of a comparable Company store net sales increase of $25.8 million and $34.6 million additional sales from the new stores not yet included in the Company’s comparable store base (net of sales of approximately $1.0 million from four stores closed in the current and previous fiscal years).

     Net sales by catalog and Internet were $4.6 million for the current period versus approximately $203,000 in the prior period as the Company only began its catalog and Internet operations in late May 2000.

     Net sales to franchisees for the current period increased by $.6 million or 28.9% compared to net sales to franchisees for the prior period. The increase in net sales to franchisees was primarily due to a net increase in purchases by the franchisees as a whole and the opening of two additional franchised locations last fiscal year by an existing franchisee.

     Gross Profit. Gross profit for the current period was $110.0 million, or 60.2% of net sales, compared with $68.9 million, or 58.7% of net sales, for the prior period. The increase in the gross profit percentage primarily resulted from an improvement in the Company’s initial markup on goods and lower markdowns as a percent of sales in the current period versus the prior period. To a lesser degree, the increase in the gross profit percentage resulted from leveraging costs associated with the Company’s distribution center, product development and merchandising areas, which costs are included in the Company’s cost of goods sold.

     General, Administrative and Store Operating Expenses. General, administrative and store operating expenses increased to $72.4 million, or 39.6% of net sales, in the current period from $45.2 million, or 38.6% of net sales, in the prior period. The increase in general, administrative and store operating expenses was, for the most part, the result of increases in store operating expenses, including store compensation, occupancy and other costs associated with additional store openings, and to a lesser degree, an increase in marketing expenses. The increase in these expenses as a percentage of net sales was principally due to the increase in direct marketing expenses as a percentage of net sales, comprising 3.1% of net sales in the current period, versus 2.2% of net sales in the prior period, an increase in store operating expenses, including store payroll (principally time associated with additional training), telephone, supplies and depreciation (principally related to the rollout of a new cash register system to the entire chain), net of leverage associated with the Company’s 22.5% comparable Company store sales increase for the current period.

     Interest Income, Net. The Company had net interest income during the current period of approximately $249,000 versus approximately $269,000 in the prior period. The decrease in net interest income was primarily a result of a decrease in interest rates on cash and marketable securities.

9

     Net Income. As a result of the factors discussed above, net income reflects an increase of 58.0% to $23.5 million in the current period from net income of $14.9 million in the prior period. The income tax provision represented an effective rate of 38% for the current and prior period.

Comparable Company Store Net Sales

     Comparable Company store net sales increased by 17.4% in the current quarter and 22.5% in the first six months of this fiscal year when compared to the comparable prior period. Comparable Company store net sales data is calculated based on the change in net sales of currently open Company-owned stores that have been operated as a Company store for at least thirteen months, including stores that have been expanded or relocated within the same general market area (approximately five miles). The comparable store percentages reported above include 30 and 33 stores, respectively, that were expanded within the last 12 months from the beginning of the respective period by an average of 817 and 829 net square selling feet, respectively. If the stores that were expanded had been excluded from the comparable Company-owned store base, the increase in comparable Company-owned store net sales would have been 16.5% for the current quarter and 20.7% for the first six months. The Company does not consider this material to the overall comparable sales results and believes the inclusion of expanded stores in the comparable store net sales to be an acceptable practice, consistent with the practice followed by the Company in prior periods and by many other retailers.

     The Company believes that the increase in comparable Company store net sales in the current period resulted from the continuing effort to focus the Company’s product development, merchandise planning, buying and marketing departments on Chico’s target customer. The Company also believes that the look, fit and pricing policy of the Company’s product was in line with the needs of the Company’s target customer and that the increase in comparable store sales was also fueled by a successful introduction of television advertising beginning in late February, increased direct mailings, a larger database of existing customers for such mailings and the success of the Company’s frequent shopper club (the “Passport Club”). To a lesser degree, the Company believes the increase was due to increased store-level training efforts associated with ongoing training programs and continuing strong sales associated with several styles of clothing produced from a related group of fabrics newly introduced by the Company in the fourth quarter of fiscal 1998.

Liquidity and Capital Resources

     The Company’s primary ongoing capital requirements are for funding capital expenditures for new store openings and merchandise inventory purchases.

     During the first six months of the current fiscal year (fiscal 2001) and the first six months of the prior fiscal year (fiscal 2000), the Company’s primary source of working capital was cash flow from operations of $25.9 million and $20.0 million, respectively. The increase in cash flow from operations of $5.9 million was primarily due to an increase in net income of $8.6 million, an increase in depreciation and amortization of $2.1 million, an increase in the tax benefit of options exercised of $2.0 million, an increase in inventories of $4.9 million in the current period versus an increase of $6.6 million in the prior period, net of a decrease in accounts payable of $1.0 million in the current period versus an increase of $6.6 million in the prior period, and an increase in accrued liabilities of $1.5 million in the current period versus an increase of $2.8 million in the prior period. The decrease in accounts payables in the current

10

period versus an increase in the prior period was related primarily to a decreased growth rate of inventory purchases (finished goods and fabric) and store construction costs in the current year.

     The Company invested $17.5 million in the current fiscal year for capital expenditures primarily associated with the planning and opening of new Company stores, and the remodeling/relocating/expansion of numerous existing stores. During the same period in the prior fiscal year, the Company invested $16.1 million primarily for capital expenditures associated with the opening of new Company stores, the remodeling of several existing stores, the expansion of its office and design facilities, new point-of-sale devices and the development of infrastructure associated with catalog and Internet sales. During the current period, the Company invested an additional $7.1 million in marketable securities versus $5.1 million in the prior period.

     During the first six months of the current fiscal year, eleven of the Company’s officers (or former officers) and one of its three independent directors exercised an aggregate of 386,524 stock options (split -adjusted) at prices ranging from $20.75 to $33.84 (split-adjusted) and several employees (or former employees) exercised an aggregate of 50,899 options (split-adjusted) at prices ranging from $21.70 to $33.74 (split-adjusted). Also, during this period, the Company sold 49,854 shares of common stock under its employee stock purchase plan at a price of $25.28. The proceeds from these issuances of stock, net of the tax benefit recognized by the Company, amounted to $3.2 million.

     As more fully described in “Item 1-Business” beginning on page 15 of the Company’s Annual Report on Form 10-K for the fiscal year ended February 3, 2001, the Company is subject to ongoing risks associated with imports. The Company’s reliance on sourcing from foreign countries causes the Company to be exposed to certain unique business and political risks. Import restrictions, including tariffs and quotas, and changes in such tariffs or quotas could affect the importation of apparel generally and, in that event, could increase the cost or reduce the supply of apparel available to the Company and have an adverse effect on the Company’s business, financial condition and/or results of operations. The Company’s merchandise flow could also be adversely affected by political instability in any of the countries in which its goods are manufactured, by significant fluctuations in the value of the U.S. dollar against applicable foreign currencies and by restrictions on the transfer of funds.

     The Company plans to open 60 Company-owned new stores in fiscal 2001, 25 of which were open as of August 20, 2001. Further, the Company plans to open between 60 and 65 Company-owned new stores in fiscal 2002. The Company believes that the liquidity needed for its planned new store growth, continuing remodel/expansion program and maintenance of proper inventory levels associated with this growth will be funded primarily from cash flow from operations and its strong existing cash and marketable securities balances. The Company further believes that this liquidity will be sufficient, based on currently planned new store openings, to fund anticipated capital needs over the near-term, including scheduled debt repayments. Given the Company’s existing cash and marketable securities balances and the capacity included in its newly expanded bank credit facilities, the Company does not believe that it would need to seek other sources of financing to conduct its operations or pursue its expansion plans even if cash flow from operations should prove to be less than anticipated or even if there should arise a need for additional letter of credit capacity due to establishing new and expanded sources of supply, or if the Company were to increase the number of new Company stores planned to be opened in future periods.

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Seasonality and Inflation

     Although the operations of the Company are influenced by general economic conditions, the Company does not believe that inflation has had a material effect on the results of operations during the current or prior periods. The Company does not consider its business to be seasonal.

Certain Factors That May Affect Future Results

     This Form 10-Q may contain forward-looking statements which reflect the current views of the Company with respect to certain events that could have an effect on the Company’s future financial performance. These statements include the words “expects”, “believes”, and similar expressions. These forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from historical results or those currently anticipated. These potential risks and uncertainties include ability to secure customer acceptance of Chico’s styles, propriety of inventory mix and sizing, quality of merchandise received from vendors, timeliness of vendor production and deliveries, increased competition, extent of the market demand by women for private label clothing and related accessories, adequacy and perception of customer service, ability to coordinate product development along with buying and planning, rate of new store openings, performance of management information systems, ability to hire, train, energize and retain qualified sales associates and other employees, availability of quality store sites, ability to hire and retain qualified managerial employees, ability to effectively and efficiently establish and operate catalog and Internet sales activities and other risks. In addition, there are potential risks and uncertainties that are peculiar to the Company’s heavy reliance on sourcing from foreign vendors, including the impact of work stoppages, transportation delays and other interruptions, political instability, foreign currency fluctuations, imposition of and changes in tariffs and import and export controls such as import quotas, changes in governmental policies in or towards such foreign countries and other similar factors.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The market risk of the Company’s financial instruments as of August 4, 2001 has not significantly changed since February 3, 2001. The Company is exposed to market risk from changes in interest rates on its indebtedness. The Company’s exposure to interest rate risk relates in part to its revolving line of credit with its bank; however, as of August 4, 2001, the Company did not have any outstanding balance on its line of credit and, given its existing liquidity position, does not expect to utilize its line of credit in the foreseeable future except for its continuing use of the letter of credit facility portion thereof. The Company’s exposure to interest rate risk also relates to its $5.1 million mortgage loan indebtedness which bears a variable interest rate based upon changes in the prime rate. The Company plans to retire this debt in the fourth quarter of this fiscal year.

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PART II – OTHER INFORMATION

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

The Annual Meeting of Shareholders of the Company was held June 19, 2001. There were 17,700,819 shares (pre-split) of common stock entitled to a vote. The following matters were voted upon at the meeting:

	a)	Election of Directors:			Votes For	Votes Withheld
		Class II- Term Expiring in 2004
				Helene B. Gralnick	13,844,251		2,599,622
				Verna K. Gibson	16,239,826		204,047
The terms of offices of each of Marvin J. Gralnick, Charles J. Kleman, Ross E Roeder and John W. Burden continued after the annual meeting.
	b)	Proposal to ratify the appointment of Arthur Andersen LLP as the Company’s independent certified public accountants for fiscal year ending February 2, 2002.
			Voting Results:		For the Proposal		16,232,661
					Against the Proposal		204,215
					Abstentions		6,997
	c)	Proposal to ratify the amendment of the 1993 employee stock purchase plan.
			Voting Results:		For the Proposal		16,370,248
					Against the Proposal		47,045
					Abstentions		26,580
	d)	Proposal to amend the Company’s amended and restated articles of incorporation to increase the Company’s authorized common stock from 50,000,000 to 100,000,000 shares.
			Voting Results:		For the Proposal		14,949,753
					Against the Proposal		1,481,012
					Abstentions		13,108

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits: 3.1 Articles of Amendment of the Amended and Restated Articles of Incorporation.

13

	10.1	Confidential Separation and Release Agreement dated June 15, 2001 between Chico’s FAS, Inc. and Tedford Marlow.
	10.2	Indemnification Agreement between Chico’s FAS, Inc. and John W. Burden effective as of July 5, 2001.
	10.3	Indemnification Agreement between Chico’s FAS, Inc. and Ross E. Roeder effective as of July 2, 2001.
(b) Reports on Form 8-K		The Company did not file any reports on Form 8-K during the current period.

Signatures

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date:	August 29, 2001	By:	/s/ Marvin J. Gralnick
			Marvin J. Gralnick
			Chief Executive Officer
			(Principal Executive Officer)
Date:	August 29, 2001	By:	/s/ Charles J. Kleman
			Charles J. Kleman
			Chief Financial Officer
			(Principal Financial and Accounting Officer)

14 EX-3.1 3 g71478ex3-1.txt AMENDMENT OF AMENDED ARTICLES OF INCORPORATION 1 EXHIBIT 3.1 ARTICLES OF AMENDMENT OF THE AMENDED AND RESTATED ARTICLES OF INCORPORATION OF CHICO'S FAS, INC. CHICO'S FAS, INC., a corporation organized and existing under the laws of the State of Florida (the "Corporation"), in order to amend its Amended and Restated Articles of Incorporation as now in effect (the "Articles of Incorporation"), in accordance with the requirements of Chapter 607, Florida Statutes, does hereby certify as follows: 1. The name of the Corporation is CHICO'S FAS, INC. 2. The amendment being effected hereby (the "Amendment") was duly adopted and approved by the Board of Directors of the Corporation by the execution of a written consent effective April 25, 2001. 3. The Amendment was duly adopted and approved by a majority of the shareholders of the Corporation at a meeting of shareholders on June 19, 2001 and the number of votes cast for the Amendment were sufficient for approval. 4. These Articles of Amendment of the Amended and Restated Articles of Incorporation of Chico's FAS, Inc. (the "Articles of Amendment") shall be effective upon filing hereof with the Department of State of the State of Florida. 5. The Amendment causes the authorized common stock of the Corporation to increase from 50,000,000 shares of common stock, par value $.01 per share to 100,000,000 shares of common stock, par value $.01 per share. 6. The Amended and Restated Articles of Incorporation are hereby amended by deleting Section 1(a) of Article IV thereof in its entirety, and in its place and stead substituting the following: * * * (a) The total number of shares of capital stock authorized to be issued by this Corporation shall be: Page 1 of 2 2 2,500,000 shares of preferred stock, par value $.01 per share (the "Preferred Stock"). 100,000,000 shares of common stock, par value $.01 per share (the "Common Stock"). * * * IN WITNESS WHEREOF, the undersigned officer of the Corporation has executed these Articles of Amendment of the Amended and Restated Articles of Incorporation of Chico's FAS, Inc. this 19th day of June, 2001. CHICO'S FAS, INC. By: /s/ Marvin J. Gralnick ------------------------------ President, CEO Marvin J. Gralnick Page 2 of 2 EX-10.1 4 g71478ex10-1.txt TEDFORD MARLOW SEPARATION AND RELEASE AGREEMENT 1 EXHIBIT 10.1 CONFIDENTIAL SEPARATION AND RELEASE AGREEMENT THIS CONFIDENTIAL SEPARATION AND RELEASE AGREEMENT ("Agreement") is made and entered into the 15th day of June, 2001, by and between CHICO'S FAS, INC., a Florida corporation (the "Company"), and TEDFORD MARLOW ("Marlow"). WITNESSETH: WHEREAS, Marlow and the Company are parties to that certain Employment Agreement dated as of September 6, 2000, as clarified by that certain letter agreement dated September 20, 2000 (collectively, the "Employment Agreement"), that certain Stock Option Agreement dated as of September 6, 2000 with respect to 220,000 options (the "220,000 Share Option Agreement") and that certain Stock Option Agreement dated as of September 6, 2000 with respect to 30,000 options (the "30,000 Share Option Agreement"); and WHEREAS, Marlow has been an employee and officer of the Company; and WHEREAS, the parties each acknowledge that the Company provided formal written notice to Marlow of non-renewal of the Employment Agreement by way of letter dated May 24, 2001 and delivered to and received by Marlow on May 24, 2001, such that absent an earlier termination in accordance with the terms of the Employment Agreement, the term of the Employment Agreement was to end on September 1, 2002; and WHEREAS, Marlow and the Company each wish to agree finally and amicably to terms of a continued employment with the Company for a specified period and the terms and conditions of the termination of his service as an employee and officer of the Company (including any and all rights and obligations of the parties under the Employment Agreement, the 220,000 Share Option Agreement and the 30,000 Share Option Agreement) and Marlow desires to release the Company from any and all existing claims, subject to the terms and conditions stated herein; and WHEREAS, the Company desires to provide certain continuation of employment benefits and certain termination benefits to Marlow; and WHEREAS, the Company desires to have Marlow continue to remain subject to certain nondisclosure restrictions and nonsolicitation obligations in order to protect the Company's legitimate business interests and Marlow is willing to agree to same; and Initials TM MG ------- ------- Date 6/15/01 6/15/01 ------- ------- -1- 2 WHEREAS, the parties desire to delineate their respective rights, duties, and obligations, and desire complete accord. NOW, THEREFORE, in consideration of the premises, and the agreements of the parties set forth in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby covenant and agree as follows: 1. RECITALS AND DEFINITIONS. (a) Recitals. The recitals set forth above are true and correct in every respect and are incorporated herein by reference. (b) Definitions. As used in this Agreement, the following terms have the meanings set forth below: "Applicable Termination Date" For purposes of this Agreement, the Applicable Termination Date shall be September 1, 2001 unless Marlow delivers to the Company the Extension Notice (as hereinafter defined) on or before 5:00 p.m., Ft. Myers time on August 25, 2001, in which event the Extension Notice will serve as an election by Marlow to extend his employment past September 1, 2001 and for his employment to terminate instead on, and for the Applicable Termination Date to be, September 15, 2001 with the understanding that the September 1, 2001 termination shall not take effect and instead, Marlow will continue to be employed through September 15, 2001, on which date Marlow's employment will terminate, with the rights and responsibilities of the parties thereafter being as described in this Agreement. "Extension Notice" shall mean a written notice signed by Marlow and delivered to and received by the Company on or before 5:00 p.m., Ft. Myers time on August 25, 2001 which expressly sets forth that Marlow elects to extend his employment to September 15, 2001 in accordance with this Agreement and expressly states that such written notice is to be considered an Extension Notice for purposes of this Agreement. Such Extension Notice shall not be effective if at the time such Extension Notice is delivered Marlow is in material default or breach of any of his obligations under this Agreement. 2. RESIGNATIONS BY MARLOW. (a) Effective as of the close of business on June 15, 2001, Marlow resigns from his position as Executive Vice President - Merchandising, Marketing and Product Development, and Initials TM MG ------- ------- Date 6/15/01 6/15/01 ------- ------- -2- 3 the Company hereby accepts this resignation. It is agreed that effective as of the close of business on June 15, 2001, Marlow has no further privileges, duties or obligations in such capacity. (b) If Marlow timely delivers the Extension Notice to the Company, then Marlow's employment with the Company shall be considered to have terminated effective as of the close of business on September 15, 2001. Otherwise, Marlow's employment with the Company shall be considered to have terminated effective as of the close of business on September 1, 2001. 3. DISCONTINUATION OF EMPLOYMENT AND TERMINATION OF EMPLOYMENT AGREEMENT. (a) Effective as of the close of business on June 15, 2001, the parties agree that (i) consistent with Section 2(a) of this Agreement, Marlow's position with the Company as Executive Vice President - Merchandising, Marketing and Product Development is discontinued, and (ii) except as otherwise expressly provided for in this Agreement, the Employment Agreement is terminated and of no further force and effect and Marlow relinquishes any and all continuing rights and benefits he may have under the Employment Agreement or as Executive Vice President - Merchandising, Marketing and Product Development of the Company. The close of business on June 15, 2001 shall be referred to as the "Effective Time" under this Agreement. (b) As provided in Section 9 of this Agreement, Marlow shall nevertheless continue as an employee of the Company until the close of business on the Applicable Termination Date. On the Applicable Termination Date, Marlow's employment by the Company in any and all capacities shall terminate and, except as otherwise required by applicable law or as provided for in this Agreement, Marlow relinquishes all remaining rights and benefits, if any, he may then have as an employee of the Company. 4. CONSIDERATION; CONTINUATION OF COMPENSATION AND BENEFITS. (a) From the Date of this Agreement to September 1, 2001. So long as Marlow has not breached any of his obligations under this Agreement, the following compensation arrangements shall apply from the date of this Agreement to September 1, 2001 (the "Base Employment Continuation Period") and shall supercede the provisions of the Employment Agreement: (1) Basic Salary. During the Base Employment Continuation Period, Marlow will continue to receive his current basic salary (that being an annualized basic salary of $500,000), payable on an every other week basis or in more frequent installments as may be determined by the Company in its sole discretion. (2) Incentive Bonus. During the Base Employment Continuation Period, Marlow will continue to receive all but $50,000 of the incentive bonus that would have otherwise been payable to him during such period had his employment under the Employment Agreement continued through September 1, 2001 and had the bonus plan in effect for Marlow on the date Initials TM MG ------- ------- Date 6/15/01 6/15/01 ------- ------- -3- 4 immediately preceding the date of this Agreement (the "Currently Effective Bonus Plan") continued in effect through September 1, 2001. Such incentive bonus payment (less the $50,000 reduction) shall be paid on such date as the bonus would have been paid under the Currently Effective Bonus Plan were the Currently Effective Bonus Plan to continue through September 1, 2001. In particular, any bonus so earned would be expected to be paid in or about the month of September 2001. Marlow shall become entitled to receive the $50,000 portion of the incentive bonus which is not to be paid under this Section 4(a)(2) (the "$50,000 Supplemental Incentive Bonus Amount") but only if the conditions to receipt of the $50,000 Supplemental Incentive Bonus Amount, as set forth in Section 4(g) hereof, are satisfied. (3) Automobile. During the Base Employment Continuation Period, Marlow shall continue to be entitled to receive a monthly automobile allowance of $2,000 per month. (4) Other Fringe Benefits. Marlow may be eligible for benefit continuation in accordance with the provisions of COBRA and acknowledges receipt of the required written notice in this regard. The Company will pay Marlow's COBRA costs from June 15, 2001 through September 1, 2001. Any and all other fringe benefits and benefit plan participations not specifically referenced in this Section 4 shall cease on June 15, 2001. (b) If Marlow Timely Delivers an Extension Notice. So long as Marlow has not breached his obligations under this Agreement and if Marlow timely delivers an Extension Notice, the following compensation arrangements shall apply and shall supercede the provisions of the Employment Agreement, and the provisions of Section 4(c) hereof shall not be applicable (it being understood that the provisions of this Section 4(b) and the provisions of Section 4(c) hereof shall be mutually exclusive such that if one of such subsections applies, the other shall not): (1) Basic Salary. During the period from September 1, 2001 and September 15, 2001 (the "Extended Employment Continuation Period"), Marlow will continue to receive his current basic salary (that being an annualized basic salary of $500,000), payable on the same type of pay period schedule as was in effect during the Base Employment Continuation Period. Marlow agrees that, after the end of the Extended Employment Continuation Period, he shall not be entitled to, and waives any and all right to, any additional basic salary including any basic salary which would otherwise be payable under and pursuant to the Employment Agreement and any and all other basic salary payments of any kind. (2) No Incentive Bonus. Marlow agrees that both during the Extended Employment Continuation Period and thereafter, he shall not be entitled to, and waives any and all right to, any incentive bonuses (other than the incentive bonus payable under Section 4(a) hereof with respect to the Base Employment Continuation Period), including without limitation any bonuses that may relate to the second half of the Company's fiscal year which commenced February 4, 2001, any bonuses which would otherwise be payable under and pursuant to the Employment Agreement and any and all other bonuses of any kind. Initials TM MG ------- ------- Date 6/15/01 6/15/01 ------- ------- -4- 5 (3) Automobile. With respect to the Extended Employment Continuation Period, Marlow shall be entitled to receive an additional automobile allowance of $1,000. Marlow agrees that, after the end of the Extended Employment Continuation Period, he shall not be entitled to, and waives any and all right to, any additional automobile allowance payments, including any automobile allowance payments which would otherwise be payable under and pursuant to the Employment Agreement and any and all other automobile allowance payments of any kind. (4) Stock Options. As more particularly described in Section 5 hereof, because Marlow's employment extends through September 15, 2001 if Marlow timely delivers the Extension Notice, it would then be anticipated that, in accordance with their terms, (i) a portion of each of the 30,000 Share Option Agreement and the 220,000 Share Option Agreement would vest on September 6, 2001, (ii) such vested portions would be exercisable until December 15, 2001 and (iii) because Marlow's employment would terminate on September 15, 2001, the balance of the options represented by such stock option agreements would not vest in any respect as of such Applicable Termination Date and, it is specifically agreed that, as of such Applicable Termination Date, such options will terminate and become void. (c) If Marlow Does Not Timely Deliver an Extension Notice. So long as Marlow has not breached his obligations under this Agreement and if Marlow does not timely deliver an Extension Notice, the following compensation arrangements shall apply and shall supercede the provisions of the Employment Agreement, and the provisions of Section 4(b) hereof shall not be applicable (it being understood that the provisions of this Section 4(c) and the provisions of Section 4(b) hereof shall be mutually exclusive such that if one of such subsections applies, the other shall not): (1) Basic Salary. After the end of the Base Employment Continuation Period and through and until September 1, 2002, Marlow will continue to receive an amount equal to his current basic salary (that being an annualized basic salary of $500,000), payable on an every other week basis or in more frequent installments as may be determined by the Company in its sole discretion. (2) Incentive Bonus. After the end of the Base Employment Continuation Period and through and until September 1, 2002, Marlow will continue to receive the incentive bonus that would have otherwise been payable to him had his employment under the Employment Agreement continued from the end of the Base Employment Continuation Period through September 1, 2002 and had the bonus plan in effect for Marlow on the date immediately preceding the date of this Agreement (the "Currently Effective Bonus Plan") continued in effect during the period from the end of the Base Employment Continuation Period through September 1, 2002. Such bonus payments shall be paid on such dates as the bonuses would have been paid under the Currently Effective Bonus Plan were the Currently Effective Bonus Plan to continue from the end of the Base Employment Continuation Period through September 1, 2002. In particular, any bonuses so earned would be expected to be paid in or about the months of March 2002 and September 2002. Initials TM MG ------- ------- Date 6/15/01 6/15/01 ------- ------- -5- 6 (3) Automobile. After the end of the Base Employment Continuation Period and through and until September 1, 2002, Marlow shall continue to be entitled to receive an amount equal to his monthly automobile allowance of $2,000 per month. (4) Other Fringe Benefits. Marlow may continue to be eligible for benefit continuation after the end of the Base Employment Continuation Period in accordance with the provisions of COBRA and acknowledges receipt of the required written notice in this regard. The Company will pay Marlow's COBRA costs from September 1, 2001 through September 1, 2002. Any election by Marlow to continue COBRA benefits after September 1, 2002 shall be subject to Marlow's payment of the COBRA costs associated with such continuation. As provided in Section 4(a)(4) hereof, any and all other fringe benefits and benefit plan participations not specifically referenced in this Section 4 shall cease on June 15, 2001. (5) Stock Options. As more particularly described in Section 5 hereof, because Marlow's employment extends through only September 1, 2001 if Marlow does not timely deliver the Extension Notice, none of the options represented by either the 30,000 Share Option Agreement or the 220,000 Share Option Agreement would vest (because employment would have terminated before the first vesting date of September 6, 2001) and thus it is specifically agreed that all of the options represented by such stock option agreements would not vest in any respect as of such Applicable Termination Date and, as of such Applicable Termination Date, such options will terminate and become void. (d) Reimbursements and Advances. Marlow has advised the Company that he has appropriate substantiation and can prepare appropriate expense reports for certain reasonable expenditures incurred in connection with his employment by the Company through the date of this Agreement. If, on or before August 1, 2001 and in accordance with the Company's requirements and policies for expense substantiation and expense reports, Marlow submits expense reports substantiating such expenditures, the Company shall reimburse Marlow for such expenditures on or before September 1, 2001. Marlow shall not be entitled to any other reimbursements or advances for expenses incurred by Marlow in the performance of his duties under the Employment Agreement or, except as specified in Section 9 hereof, under this Agreement. (e) Relocation Expenses and Commuting Expenses. Marlow acknowledges that he has already received all relocation expenses and commuting expenses to which he may have been entitled under the Employment Agreement or otherwise and shall be entitled to no further relocation expenses and no further commuting expenses. (f) Discount on Clothing. From and after the applicable Termination Date under this Agreement (which date shall be September 1, 2001 if Marlow does not deliver the Extension Notice to the Company on or before August 25, 2001 and shall be September 15, 2001 if Marlow delivers the Extension Notice to the Company on or before August 25, 2001), Marlow shall no longer be entitled to the currently existing Company-wide employee benefit which provides a 50% discount on purchases made at Company-owned stores. Initials TM MG ------- ------- Date 6/15/01 6/15/01 ------- ------- -6- 7 (g) $50,000 Supplemental Incentive Bonus Amount. In exchange for Marlow's agreement to execute and the execution of the additional release attached hereto as Exhibit A when and as contemplated by Section 12(b) hereof and compliance with the remaining terms of this Agreement and Exhibit A, the Company agrees to pay to Marlow the $50,000 Supplemental Incentive Bonus Amount, which shall be paid within ten days after the Applicable Termination Date. Such payment shall be contingent on receipt by the Company of the executed additional release attached hereto as Exhibit A. (h) Withholding and Taxes. All basic salary payments, incentive bonus payments, auto allowance payments and other payments made to Marlow pursuant to this Agreement shall be subject to any and all applicable income tax withholding, FICA taxes, FUTA taxes and any other required deductions and withholdings. (i) No Other Entitlements; Good and Complete Consideration. (1) Marlow agrees that he is not otherwise entitled to payment or other benefit under any plans or policies of the Company, including, but not limited to, any severance plan. (2) Marlow covenants and agrees that the amounts and considerations set forth in this Section 4 and Section 6 hereof are in full and complete satisfaction of any and all sums owed to Marlow, if any, by the Company and constitute good and complete consideration for his release contained in Section 12 hereof and obligations under Sections 2, 3, 7, 8, 9, 10, 11, 15 and 16 hereof. Marlow agrees that the total of such consideration is in addition to that, if any, which he might otherwise be entitled. 5. STOCK OPTIONS. (a) Acknowledgments. (1) The parties acknowledge that, under the 30,000 Share Option Agreement and subject to the terms and conditions thereof, (i) as a result of the Company's recent 3 for 2 stock split, the 30,000 options covered by the 30,000 Share Option Agreement which had an exercise price of $22.96 per share were adjusted to be an aggregate of 45,000 options with an exercise price of $15.31 per share, and (ii) as adjusted and subject to the other provisions of the 30,000 Share Option Agreement, 15,000 of such options are scheduled to vest on September 6, 2001 (the "First Tranche of 15,000"), 15,000 of such options are scheduled to vest on September 6, 2002 (the "Second Tranche of 15,000") and the remaining 15,000 of such options are scheduled to vest on September 6, 2003 (the "Third Tranche of 15,000"). (2) The parties acknowledge that, under the 220,000 Share Option Agreement and subject to the terms and conditions thereof, (i) as a result of the Company's recent 3 for 2 stock split, the 220,000 options covered by the 220,000 Share Option Agreement which had Initials TM MG ------- ------- Date 6/15/01 6/15/01 ------- ------- -7- 8 an exercise price of $34.44 per share were adjusted to be an aggregate of 330,000 options with an exercise price of $22.96 per share, and (ii) as adjusted and subject to the other provisions of the 220,000 Share Option Agreement, 110,000 of such options are scheduled to vest on September 6, 2001 (the "First Tranche of 110,000"), 110,000 of such options are scheduled to vest on September 6, 2002 (the "Second Tranche of 110,000") and the remaining 110,000 of such options are scheduled to vest on September 6, 2003 (the "Third Tranche of 110,000"). (b) If Marlow Timely Delivers an Extension Notice. So long as Marlow has not breached his obligations under this Agreement and if Marlow timely delivers an Extension Notice, the parties acknowledge and agree that the provisions of this Section 5(b) shall apply with respect to the stock options covered by both the 30,000 Share Option Agreement and the 220,000 Share Option Agreement, and the provisions of Section 5(c) shall not be applicable (it being understood that the provisions of this Section 5(b) and the provisions of Section 5(c) hereof shall be mutually exclusive such that if one of such subsections applies, the other shall not): (1) Because Marlow will be continuing as an employee of the Company during the Extended Employment Continuation Period, the First Tranche of 15,000, in accordance with and subject to the terms of the 30,000 Share Option Agreement, is expected to (i) vest in full on September 6, 2001, and (ii) be exercisable in accordance with the terms and conditions of the 30,000 Share Option Agreement at any time commencing on September 6, 2001 and ending December 15, 2001 (i.e., three months after the termination of Marlow's employment with the Company on the Applicable Termination Date). (2) Because Marlow's employment relationship with the Company will terminate on September 15, 2001, any and all rights to the options covered by the Second Tranche of 15,000 and any and all rights to the options covered by the Third Tranche of 15,000 will terminate in accordance with and subject to the terms of the 30,000 Share Option Agreement, because no portion of the options comprising the Second Tranche of 15,000 and no portion of the options comprising the Third Tranche of 15,000 will have vested or will have become exercisable as of that date. As such, Marlow confirms that, effective as of September 15, 2001 and as a result of the termination as of such date, (i) he shall be considered to have relinquished any and all rights he may then have, may have had or in the future would have had under the options comprising the Second Tranche of 15,000 and under the options comprising the Third Tranche of 15,000 and (ii) the options comprising the Second Tranche of 15,000 and the options comprising the Third Tranche of 15,000 shall become null and void in all respects. (3) Because Marlow will be continuing as an employee of the Company during the Extended Employment Continuation Period, the First Tranche of 110,000, in accordance with and subject to the terms of the 220,000 Share Option Agreement, is expected to (i) vest in full on September 6, 2001, and (ii) be exercisable in accordance with the terms and conditions of the 220,000 Share Option Agreement at any time commencing on September 6, 2001 and ending December 15, 2001 (i.e., three months after the termination of Marlow's employment with the Company on the Applicable Termination Date). Initials TM MG ------- ------- Date 6/15/01 6/15/01 ------- ------- -8- 9 (4) Because Marlow's employment relationship with the Company will terminate on September 15, 2001, any and all rights to the options covered by the Second Tranche of 110,000 and any and all rights to the options covered by the Third Tranche of 110,000 will terminate in accordance with and subject to the terms of the 220,000 Share Option Agreement, because no portion of the options comprising the Second Tranche of 110,000 and no portion of the options comprising the Third Tranche of 110,000 will have vested or will have become exercisable as of that date. As such, Marlow confirms that, effective as of September 15, 2001 and as a result of the termination as of such date, (i) he shall be considered to have relinquished any and all rights he may then have, may have had or in the future would have had under the options comprising the Second Tranche of 110,000 and under the options comprising the Third Tranche of 110,000 and (ii) the options comprising the Second Tranche of 110,000 and the options comprising the Third Tranche of 110,000 shall become null and void in all respects. (c) If Marlow Does Not Timely Deliver an Extension Notice. So long as Marlow has not breached his obligations under this Agreement and if Marlow does not timely deliver an Extension Notice, the parties acknowledge and agree that the provisions of this Section 5(c) shall apply with respect to the stock options covered by both the 30,000 Share Option Agreement and the 220,000 Share Option Agreement, and the provisions of Section 5(b) hereof shall not be applicable (it being understood that the provisions of this Section 5(c) and the provisions of Section 5(b) hereof shall be mutually exclusive such that if one of such subsections applies, the other shall not): (1) Because Marlow's employment relationship with the Company will terminate on September 1, 2001, any and all rights to the options covered by the 30,000 Share Option Agreement will terminate in accordance with and subject to the terms of the 30,000 Share Option Agreement, because no portion of any of the options under the 30,000 Share Option Agreement will have vested or will have become exercisable as of that date. As such, Marlow confirms that, effective as of September 1, 2001 and as a result of his termination as of such date, (i) he shall be considered to have relinquished any and all rights he may then have, may have had or in the future would have had under the options covered by the 30,000 Share Option Agreement and (ii) all of the options covered by the 30,000 Share Option Agreement, including the First Tranche of 15,000, the Second Tranche of 15,000 and the Third Tranche of 15,000 shall become null and void in all respects. (2) Because Marlow's employment relationship with the Company will terminate on September 1, 2001, any and all rights to the options covered by the 220,000 Share Option Agreement will terminate in accordance with and subject to the terms of the 220,000 Share Option Agreement, because no portion of any of the options under the 220,000 Share Option Agreement will have vested or will have become exercisable as of that date. As such, Marlow confirms that, effective as of September 1, 2001 and as a result of his termination as of such date, (i) he shall be considered to have relinquished any and all rights he may then have, may have had or in the future would have had under the options covered by the 220,000 Share Option Agreement and (ii) all of the options covered by the 220,000 Share Option Agreement, including the First Tranche Initials TM MG ------- ------- Date 6/15/01 6/15/01 ------- ------- -9- 10 of 110,000, the Second Tranche of 110,000 and the Third Tranche of 110,000 shall become null and void in all respects. 6. PURSUIT OF CLAIM AND LIMITED INDEMNIFICATION WITH RESPECT TO DORADO DISPUTE. (a) The parties acknowledge that a dispute exists between Dorado of Naples ("Dorado") and Marlow relative to a contract under which Marlow, subject to specified terms and conditions, was to purchase certain real estate from Dorado and that counsel for Dorado has advised the law firm of Smoot Adams (counsel for Marlow and his wife) that suit had been filed regarding this matter. Marlow is seeking return of a $100,000 deposit that he had given to Dorado and Dorado has asserted that the deposit has been forfeited as liquidated damages. (b) The Company agrees to pay Marlow's reasonable costs and expenses incurred with the Smoot Adams firm in defending against Dorado's position that it is entitled to retain the entire deposit and in pursuing Marlow's claim that he is entitled to a return of the deposit, it being understood that such agreement to pay reasonable costs and expenses shall not extend to costs and expenses in defending any other claims asserted by Dorado. Although Marlow and the Company believe that Marlow should be entitled to a return of the full deposit under the terms of the applicable real estate contract and intend to vigorously defend Dorado's claim to the contrary and to vigorously pursue Marlow's claim for a return of the deposit, the Company agrees to indemnify Marlow for any portion of the deposit that may not be returned by Dorado after the dispute has been finally resolved either by way of final court action, binding arbitration or settlement; provided however that the Company's liability to Marlow with respect to this indemnity for any unreturned deposit or any other liability of Marlow under the applicable real estate contract shall under no circumstances exceed $100,000. (c) Because of the Company's agreement to pay the reasonable costs and expense of litigation and to provide Marlow with this limited indemnity, it is agreed that the Company, at its option, shall have the right to take the primary role in directing the defense/pursuit of this dispute from the perspective of Marlow's interest, with Marlow also providing input and having the right to consult in good faith. In addition, provided that any settlement relates only to the payment/retention of money and does not require any payment of money by Marlow (other than forfeiture of all or a portion of the deposit), the Company may require that such settlement be entered into and effectuated, after consultation in good faith with Marlow. 7. RETURN OF COMPANY ASSETS AND PROPERTY. As promptly as possible following the execution of this Agreement, Marlow will return to the Company (1) all company credit cards and company calling cards in Marlow's possession, (2) all keys and security badges providing access to any of the Company's facilities and all Company owned equipment in Marlow's possession, and (3) all documents, papers, information and software remaining in his possession that he obtained from the Company, or that belong to the Company, without retaining any copies thereof. Initials TM MG ------- ------- Date 6/15/01 6/15/01 ------- ------- -10- 11 8. REMOVAL OF PERSONAL PROPERTY FROM THE COMPANY'S OFFICES. The Company acknowledges that certain property belonging to Marlow may remain physically located at the Company's offices, including without limitation, certain office furniture, computer equipment and wall hangings. The Company agrees to permit Marlow, during normal business hours and upon reasonable notice to a senior officer of the Company and for a period ending on June 30, 2001, to remove or arrange for the removal of such personal effects. 9. TRANSITION EMPLOYMENT. (a) From the date hereof, through and including the Applicable Termination Date, and for no additional compensation other than provided in this Agreement, Marlow shall continue as an employee of the Company under common law rules and, as such, shall make himself available to provide such advice and assistance as the Company may from time to time during such period reasonably request in order to effectuate a smooth transition of management associated with Marlow's departure from the Company on the Applicable Termination Date; provided that such services shall not exceed, without the consent of Marlow, twenty five hours from the date of this Agreement until September 1, 2001 (and an additional five hours if the Applicable Termination Date is extended in the manner provided herein to September 15, 2001); and provided further that all such services shall be provided by way of communications directly with Marvin Gralnick or Scott Edmonds or as otherwise may be authorized in writing by Marvin Gralnick or Scott Edmonds. During the Base Employment Continuation Period and any Extended Employment Continuation Period, the Company shall have the right to control and direct Marlow not only as to the results to be accomplished by Marlow but also as to the detail and means by which such results are accomplished by Marlow. The parties acknowledge that, among other matters, Marlow's services as an employee are being continued until the Applicable Termination Date because of his past involvement in helping to coordinate efforts concerning the Company's relationships with the factories utilized to assemble the Company's merchandise and fabric purchases and warehousing for the fabric and because of the importance of such relationships, merchandise and inventories to the continued success of the Company. (b) The Company anticipates that the services to be rendered by Marlow from June 15, 2001 through the Applicable Termination Date will be performed away from the Company's Ft. Myers offices with communications provided principally by way of telephone; however, Marlow agrees to provide such services at the Ft. Myers offices of the Company if expressly requested to do so by senior executives of the Company and if his reasonable costs of travel to Ft. Myers are paid by the Company in accordance with the Company's expense reimbursement policies. Otherwise, in the performance of such services, Marlow shall not be required to travel. 10. PROPERTY RIGHTS AND USE OR DISCLOSURE OF CONFIDENTIAL INFORMATION; NONSOLICITATION. Marlow shall continue to be bound in all respects by the provisions of the Employment Agreement relating to Confidentiality as contained in Section 10 thereof and the provisions of the Employment Agreement relating to Nonsolicitation as contained in Section 11 thereof; and notwithstanding the termination of the Employment Agreement in all other respects, such Initials TM MG ------- ------- Date 6/15/01 6/15/01 ------- ------- -11- 12 Sections 10 and 11 shall continue in force and effect as separately enforceable agreements as if such provisions were contained herein. Such continuing obligations shall be in addition to Marlow's obligations arising under applicable law including without limitation the obligations relating to trade secrets arising under Chapter 688, Florida Statutes. For purposes of the continuing effectiveness of the provisions of Section 11 of the Employment Agreement, Marlow's employment under Section 9 of this Agreement shall be considered continued employment of Marlow by the Company through the end of the Base Employment Continuation Period or the Extended Employment Continuation Period, as the case may be, and the additional two (2) year restriction period contemplated by the provisions of Section 11 of the Employment Agreement shall be considered to begin as of the applicable Termination Date (September 1, 2001 or September 15, 2001, as the case may be). 11. NON-DISPARAGEMENT; PUBLIC DISCLOSURE. (a) Marlow covenants and agrees that he will not make any disparaging remarks, whether orally or in writing, about the Company, its subsidiaries and/or related entities, its products, services, officers, Board of Directors, managers, supervisors, and employees, to any persons whatsoever. The obligation under this Section includes, but is not limited to, refraining from making any disparaging, degrading or demeaning remarks or casting any aspersions on the Company which are reasonably likely to have a harmful effect on its reputation. Marlow will not communicate with the press or make any press release or other similar public disclosure regarding the circumstances leading up to this Agreement except after consulting in good faith with the Company. (b) Neither the Company nor any of its directors or senior officers will issue any formal Company sponsored release or formal Company sponsored communication with the press, or issue any press release or other similar formal public disclosure regarding the circumstances leading up to this Agreement, except after consulting in good faith with Marlow; provided however, that nothing herein shall be deemed to prohibit the Company from making any disclosure which is required in order to fulfill the Company's disclosure obligations imposed by law. 12. GENERAL RELEASES BY MARLOW; CONDITION TO SUBSEQUENT DELIVERY OF GENERAL RELEASES BY THE COMPANY. (a) Marlow, for himself, his heirs, personal representatives, and assigns, does hereby remise, release and forever discharge the Company and its respective officers, directors, employees, agents, shareholders, and affiliates, including, but not limited to, the Company, its respective predecessors, successors, assigns, heirs, executors, administrators, the Company's benefit plans, including the 401(k) Plan, the benefit plan's trustees, administrators, and all other fiduciaries, employees, and their agents (collectively, "Releasees"), of and from any and all manner of actions and causes of action, suits, debts, claims, and demands whatsoever at law or in equity, known or unknown, actual or contingent, which Marlow and his heirs, executors, administrators, agents, distributees, beneficiaries, successors in interest and assignees, ever had or now have or in the future may have, by reason of any matter, cause or thing whatsoever from the beginning of the world to the day of the date of these presents. The Release by Marlow includes, but is not limited to the following Initials TM MG ------- ------- Date 6/15/01 6/15/01 ------- ------- -12- 13 (except that such Release shall not operate to release the Company from its express obligations under this Agreement): (1) Any and all claims for salary, wages, compensation, monetary relief, employment benefits, including but not limited to, any claims for benefits under, or contribution to, an associate benefits plan, profit sharing or any retirement plan, capital stock, bonuses, merit and longevity increases, and all other benefits of all kind, earnings, backpay, front pay, liquidated, and other damages, interest, attorney's fees and costs, compensatory damages, punitive damages, damage to character, damage to reputation, emotional distress, mental anguish, depression, injury, impairment in locating employment, financial loss, pain and suffering, injunctive and declaratory relief arising from his employment with the Company or his separation thereof. (2) Any and all claims growing out of, resulting from, or connected in any way to Marlow's employment with the Company, and/or the separation thereof, including any and all claims for discrimination, including but not limited to discrimination on the basis of race, national origin, color, religion, handicap or disability, age, sex, harassment of any kind, including sexual harassment, retaliation, whistleblowing, breach of contract, rescission, promises, claims under the Employee Retirement Income Security Act of 1974 ("ERISA") [29 U.S.C. Sections 1001-1461], as amended, including ERISA Section 510 and any claims to benefits under any and all bonus, severance or any other similar plan sponsored by the Company now and hereafter, torts of all kinds, including but not limited to, misrepresentation, negligent or otherwise, fraud, defamation, slander, libel, worker's compensation retaliation, interference with an advantageous business relationship, negligent employment, including negligent hiring, negligent retention, and negligent supervision, discrimination, claims or rights under state and federal whistleblower legislation, including Sections 448.101-448.105, Florida Statutes, as amended, the Consolidated Omnibus Budget Reconciliation Act of 1985 [Pub. L. 99-509], as amended ("COBRA"), the Florida Health Insurance Coverage Continuation Act ("FHICCA"), the Family and Medical Leave Act [29 U.S.C. Sections 2601-2654], as amended ("FMLA"), the Americans with Disabilities Act [42 U.S.C. Sections 12101-12213], as amended ("ADA"), the Age Discrimination in Employment Act, as amended ("ADEA"), the Polygraph Protection Act, the Internal Revenue Code [Title 26, U.S.C.], as amended, the Older Workers Benefit Protection Act [29 U.S.C. Section 621-630], as amended ("OWBPA"), the Equal Pay Act [29 U.S.C. Section 206(d)], as amended ('EPA"), Title VII of the Civil Rights Act of 1964 [42 U.S.C. Section 2000e-2000e-17], as amended ("Title VII"), the Florida Civil Rights Act of 1992 [Sections 760.02-760.11, Fla. Stats.], as amended ("FCRA"), the Uniformed Services Employment and Reemployment Rights Act of 1994 [38 U.S.C. Sections 4301-4333] ("USERRA"), the National Labor Relations Act [29 U.S.C. Sections 151-169], as amended ("NLRA"), the Occupational Safety and Health Act [29 U.S.C. Sections 651-678], as amended ("OSHA"), the Fair Labor Standards Act [29 U.S.C. Sections 201-219], as amended ("FLSA"), retaliation pursuant to Section 440.205 Florida Statutes, and any other claim of any kind. (3) Marlow agrees that if he violates this Agreement by suing Releasees with respect to any matter for which he has herein released the Company, he will pay all costs, Initials TM MG ------- ------- Date 6/15/01 6/15/01 ------- ------- -13- 14 damages, and expenses of defending the suit incurred by Releasees or those associated with Releasees, including reasonable attorneys' fees and all further costs and fees. (b) In exchange for Marlow's agreement to execute the release attached hereto as Exhibit A on or shortly after the applicable Termination Date, and provided such release is executed and delivered to the Company on or shortly after the applicable Termination Date and subject to compliance with the remaining terms of this Agreement and the terms of the release set forth in Exhibit A, the Company shall pay the $50,000 Supplemental Incentive Bonus Amount as more specifically provided in Section 4(g) hereof and shall execute and deliver the release attached hereto as Exhibit B. 13. ENFORCEMENT; ATTORNEYS' FEES. If, within 10 days after demand to comply with the obligations of one of the parties to this Agreement served in writing on the other, compliance or reasonable assurance of compliance is not forthcoming, and the other party engages the services of an attorney to enforce rights under this Agreement, the prevailing party in any action shall be entitled to recover all reasonable costs and expenses (including reasonable attorneys' fees before and at trial and in appellate proceedings). 14. NOTICES. Any notice, request, demand, consent, approval, instruction or other communication required or permitted under this Agreement (collectively a "notice") shall be in writing and shall be sufficiently given if delivered in person, sent by telex or telecopier, sent by a reputable overnight courier service or sent by registered or certified mail, postage prepaid, as follows: If to Marlow: Tedford Marlow 553 Weed Street New Caanan, Connecticut 06840 Telecopy: (203) 966-6180_________ If to the Company: Chico's FAS, Inc. 11215 Metro Parkway Ft. Myers, FL 33912 Attn: Marvin J. Gralnick President and Chief Executive Officer Telecopy: (941) 277-7035 Any notice which is delivered personally in the manner provided herein shall be deemed to have been duly given to the party to whom it is directed upon actual receipt by such party (or by such party's agent for notices hereunder). Any notice which is addressed and mailed in the manner herein provided shall be presumed to have been duly given to the party to whom it is addressed at the close Initials TM MG ------- ------- Date 6/15/01 6/15/01 ------- ------- -14- 15 of business, local time of the recipient, on the fifth day after the date it is so placed in the mail. Any notice which is telexed or telecopied in the manner provided herein shall be presumed to have been duly given to the party to whom it is directed upon confirmation of such telex or telecopy. Any notice which is sent by a reputable overnight courier service in the manner provided herein shall be presumed to have been duly given to the party to which it is addressed at the close of business on the next day after the day it is deposited with such courier service. Any person wishing to change the person or address to whom notices are to be given may do so by complying with the foregoing notice provisions. 15. OTHER FUTURE COOPERATION. It is agreed and understood that, notwithstanding the other provisions of this Agreement, Marlow will continue after the Employment Continuation Period to make himself available and cooperate in any reasonable manner at reasonable times in providing assistance to the Company in concluding any matters which are presently pending but only to the extent that Marlow was directly involved in such matter while in the Company's employ. In securing such cooperation, the Company will be reasonable in considering other commitments and time constraints that Marlow may have at the time such assistance is requested. It is understood that such cooperation and assistance shall be without additional compensation to Marlow. Should Marlow ever receive notice of a subpoena in the future or other attempt to talk with him or attempt to obtain his testimony relating to or regarding the Company in any way, Marlow agrees to notify counsel for the Company, Gary I. Teblum, 101 E. Kennedy Boulevard, Suite 2700, Tampa, Florida 33602, (813) 227-7457 (phone) or (813) 229-6553 (fax) and to provide a copy of any subpoena or request, within two (2) calendar days of receipt of such notice. Further, Marlow agrees to and authorizes, at the Company's expense, the assertion of an objection or objections and a motion for protective order, motion to quash or other legal proceeding ("legal proceeding") in order that all legal rights of the Company, including those set forth in the Agreement, may be fully protected. Marlow agrees that he will not respond to any attempt to talk with him or obtain his testimony, should a legal proceeding be asserted, until such legal proceeding has been finally determined. Marlow further agrees that a representative, in behalf of, chosen by, and at the expense of the Company, will have the opportunity to participate fully during any testimony, statements or communication by him in any proceeding relating to the Company, including raising objections to any examination, examining witnesses, and the right to have a record made by a court reporter or other means of the testimony, statements or communication or objections. Within the restrictions set forth in this Section 15, Marlow shall provide truthful testimony to or before a court or regulatory body. 16. WAIVER OF REINSTATEMENT/COVENANT NOT TO RE-APPLY. As part of the settlement, Marlow specifically waives any present and future claim to reinstatement or employment with the Company at any time in the future. Marlow further specifically agrees, as a condition of his receipt and retention of the sums and other consideration provided for herein, not to seek employment with the Company at any time in the future. 17. SUCCESSORS AND ASSIGNS; APPLICABLE LAW. This Agreement shall be binding upon and inure to the benefit of Marlow and his heirs, administrators, representatives, executors, Initials TM MG ------- ------- Date 6/15/01 6/15/01 ------- ------- -15- 16 successors and assigns, and shall be binding upon and inure to the benefit of Releasees and each of them, and to their respective heirs, administrators, representatives, executors, successors and assigns. This Agreement shall be construed and interpreted in accordance with the laws of the state of Florida. 18. COMPLETE AGREEMENT. This Agreement shall constitute the full and complete agreement between the parties concerning its subject matter and fully supersedes any and all other prior agreements or understandings between the parties regarding the subject matter hereto. This Agreement shall not be modified or amended except by a written instrument signed by both Marlow and an authorized representative of the Company. 19. SEVERABILITY. The unenforceability or invalidity of any particular provision of this Agreement shall not affect its other provisions and to the extent necessary to give such other provisions effect, they shall be deemed severable. 20. WAIVER OF BREACH; SPECIFIC PERFORMANCE. The waiver of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any other breach. Each of the parties to this Agreement will be entitled to enforce its rights under this Agreement specifically to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights existing in its favor. The parties hereto agree and acknowledge that money damages may not be an adequate remedy for any breach of any of the provisions of this Agreement and that any party may in its sole discretion apply to any court of law or equity of competent jurisdiction for specific performance and/or injunctive relief in order to enforce or prevent any violations of any of the provisions of this Agreement. 21. NO ADMISSIONS OF LIABILITY. This Agreement shall not in any way be construed as an admission by the Company or Marlow of any improper actions or liability whatsoever as to one another, and each specifically disclaims any liability to or improper actions against the other or any other person, on the part of itself, its employees or its agents. 22. REVERSION OF THE PROCEEDS. Marlow covenants and agrees that all monies received under this Agreement will become immediately due and payable to the Company if Marlow should ever disavow this Agreement, breach any term of this Agreement or if the Agreement is found to be unenforceable. 23. ACKNOWLEDGMENT/VOLUNTARY SIGNING OF AGREEMENT. Marlow warrants, represents, and agrees that he has been encouraged to seek advice from anyone of his choosing regarding this Agreement, including his attorney, accountant or tax advisor prior to his signing it; that this Agreement represents written notice to do so; and that he has been given the opportunity and sufficient time to seek such advice; and that he fully understands the meaning and contents of this Agreement. MARLOW UNDERSTANDS THAT HE HAD THE RIGHT TO TAKE UP TO TWENTY-ONE (21) DAYS TO CONSIDER WHETHER OR NOT HE DESIRES TO ENTER INTO THIS AGREEMENT. Marlow acknowledges that he has completely read this Agreement and that prior to signing he has had sufficient opportunity to examine it and ask questions and consult Initials TM MG ------- ------- Date 6/15/01 6/15/01 ------- ------- -16- 17 with his attorneys and other persons of his own choosing prior to entering into this Agreement. Marlow further acknowledges that this Agreement is being signed voluntarily and without coercion or duress and with full understanding of its terms and effects. Marlow has not been promised any benefit except for the mutual consideration set out herein and there are no other understandings or oral/written agreements relating to the separation of his employment relationship except those set out above. Marlow specifically states that he is executing this Agreement knowingly and voluntarily. 24. ABILITY TO REVOKE AGREEMENT. MARLOW UNDERSTANDS THAT HE MAY REVOKE THIS AGREEMENT BY NOTIFYING THE COMPANY IN WRITING OF SUCH REVOCATION WITHIN SEVEN (7) DAYS OF HIS EXECUTION OF THIS AGREEMENT AND THAT THIS AGREEMENT IS NOT EFFECTIVE UNTIL THE EXPIRATION OF SUCH SEVEN (7) DAYS. HE UNDERSTANDS THAT UPON THE EXPIRATION OF SUCH SEVEN (7) DAY PERIOD THIS AGREEMENT WILL BE BINDING UPON HIM AND HIS HEIRS, ADMINISTRATORS, REPRESENTATIVES, EXECUTORS, SUCCESSORS AND ASSIGNS AND WILL BE IRREVOCABLE. IN WITNESS WHEREOF, the parties hereto have executed this Agreement, as of the date first above written. WITNESS: CHICO'S FAS, INC. /s/ Scott Edmonds - ----------------- /s/ Robin Martin By: /s/ Marvin J. Gralnick - ----------------- ------------------------------------- Marvin J. Gralnick President and Chief Executive Officer I UNDERSTAND THAT BY SIGNING THIS AGREEMENT, I AM GIVING UP RIGHTS I MAY HAVE. I UNDERSTAND THAT I DO NOT HAVE TO SIGN THIS AGREEMENT. WITNESS: /s/ Traci Fields - ----------------- /s/ Mary M. Curry /s/ Tedford Marlow - ----------------- ------------------------------- Tedford Marlow Initials TM MG ------- ------- Date 6/15/01 6/15/01 ------- ------- -17- 18 EXHIBIT A TO CONFIDENTIAL SEPARATION AND RELEASE AGREEMENT WITH TEDFORD MARLOW DATED AS OF _______________, 2001 GENERAL RELEASE AND DISCLAIMER ("RELEASE") In consideration of the promises and actions of CHICO'S FAS, INC., a Florida corporation (the "Company") set out in the Confidential Separation and Release Agreement entered into between the parties to this Release on _June __, 2001 (the "Agreement"), including without limitation Section 4(g) of the Agreement, TEDFORD MARLOW ("Marlow") hereby remises, acquits, releases, satisfies and discharges, on his own behalf and on behalf of anyone who could claim by and through him, the Company, its predecessors and successors in interest, assignees, parents, subsidiaries, divisions and related companies and entities, and their past, present and future shareholders, officers, directors, agents, attorneys, employees and representatives in their individual and official capacities, and their heirs, and legal representatives and predecessors and successors in interest and assigns (collectively "Releasees"), of and from any and all claims and demands, past, present or future, known or unknown, and all manner of action and actions, causes of action, suits, administrative proceedings, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, torts, trespasses, damages, judgments, executions, warranties, claims and demands whatsoever, in law or in equity, which Marlow and his heirs, executors, administrators, agents, distributees, beneficiaries, successors in interest and assignees, ever had or now have or in the future may have, by reason of any matter, cause or thing whatsoever from the beginning of the world to the day of the date of these presents, including, but not limited to: (1) Any and all claims for salary, wages, compensation, monetary relief, employment, benefits, including but not limited to any claims for benefits under an employee benefit plan or any retirement plan, profit-sharing, capital stock, bonuses, merit and longevity increases, commissions, and all other benefits of all kind (other than as specifically recognized in Sections 4 and 6 of the Agreement), earnings, back pay, front pay, liquidated and other damages, compensatory damages, punitive damages, damage to character, damage to reputation, emotional distress, mental anguish, depression, injury, impairment in locating employment, financial loss, pain and suffering, injunctive and declaratory relief, interest, attorneys fees and costs, arising from his employment with the Company or his separation thereof. (2) Any and all claims growing out of, resulting from, or connected in any way to Marlow's alleged contractual relationship and/or employment with the Company and/or the termination thereof, including any and all claims for handicap or disability discrimination, age discrimination, religious discrimination, sex discrimination, harassment of any kind, including sexual harassment, retaliation, whistleblowing, breach of contract, rescission, promises, claims under the Employee Retirement Income Security Act of 1974 ("ERISA") [29 U.S.C. Sections 1001-1461], as Initials TM MG ------- ------- Date 6/15/01 6/15/01 ------- ------- A-1- 19 amended, including ERISA Section 510 and any claims to benefits under any and all bonus, severance or any other similar plan sponsored by the Company now and hereafter, torts of all kinds, including but not limited to, misrepresentation, negligent or otherwise, fraud, defamation, slander, libel, worker's compensation retaliation, interference with an advantageous business relationship, negligent hiring, negligent retention, negligent supervision, discrimination, claims or rights under state and federal whistleblower legislation including Section 448.101-448.105, Fla. Stats., as amended, the Consolidated Omnibus Budget Reconciliation Act of 1985 [Pub. L. 99-509], as amended ("COBRA"), the Florida Health Insurance Coverage Continuation Act ("FHICCA"), the Family and Medical Leave Act [29 U.S.C. Sections 2601-2654], as amended ("FMLA"), the Americans with Disabilities Act [42 U.S.C. Sections 12101-12213], as amended ("ADA"), the Age Discrimination in Employment Act, as amended ("ADEA"), the Polygraph Protection Act, the Internal Revenue Code [Title 26, U.S.C.], as amended, the Older Workers Benefit Protection Act [29 U.S.C. Section 621-630], as amended ("OWBPA"), the Equal Pay Act [29 U.S.C. Section 206(d)], as amended ("EPA"), Title VII of the Civil Rights Act of 1964 [42 U.S.C. Section 2000e-2000e-17], as amended ("Title VII"), the Florida Civil Rights Act of 1992 [Sections 760.02-760.11, Fla. Stats.], as amended, the Uniformed Services Employment and Reemployment Rights Act of 1994 [38 U.S.C. Sections 4301-4333] ("USERRA"), the National Labor Relations Act [29 U.S.C. Sections 151-169], as amended ("NLRA"), the Occupational Safety and Health Act [29 U.S.C. Sections 651-678], as amended ("OSHA"), the Fair Labor Standards Act [29 U.S.C. Sections 201-219], as amended ("FLSA"), retaliation pursuant to Section 440.205, Fla. Stats., and any other claim of any kind. (3) As part of the settlement, Marlow specifically waives any present and future claim to reinstatement or employment with the Company at any time in the future and agrees never to apply for employment with the Company in the future. (4) Marlow further specifically waives any rights of action and administrative and judicial relief which he might otherwise have available in the state and federal courts, including all common law claims and claims under federal and state constitutions, statutes and regulations and federal executive orders and county and municipal ordinances and regulations, as well as before the Wage and Hour Division or any other division or department of the U.S. Department of Labor, the Equal Employment Opportunity Commission, the Florida Commission on Human Relations, the Lee County Office of Equal Opportunity, the National Labor Relations Board or any other federal, state or local administrative agency. Marlow promises never to file, participate in or prosecute a lawsuit, complaint, charge or other proceeding asserting any claims that are released by this Release. Marlow further agrees not to voluntarily participate in any employment related claim brought by any other party against the Releasees. In consideration of the monies provided for in Section 4(g) of the Agreement and other good and valuable consideration, Marlow represents and warrants that all the terms of this Release shall be complied with. Should Marlow breach or act in noncompliance with or in default of this Release (except insofar as it relates to any claim under the ADEA), the Company may recover damages from Marlow, along with all costs, including attorneys' fees incurred by the Company in recovering such damages and in enforcing this Release, with the Company maintaining all other rights, remedies Initials TM MG ------- ------- Date 6/15/01 6/15/01 ------- ------- A-2- 20 and/or causes of action otherwise available at law or in equity. It is understood that the Company shall be entitled to recover, as a part of its costs, any attorneys fees incurred by it in connection with any claim, or type of claim, released by this Release. The parties hereto acknowledge that any breach of this Release shall entitle the non-breaching party not only to damages, but to injunctive relief to enjoin the actions of the breaching party, as well as attorney's fees and costs. MARLOW SHALL HAVE A REASONABLE TIME PERIOD UP TO TWENTY-ONE (21) DAYS FROM RECEIPT OF THIS DOCUMENT TO ACCEPT THE TERMS OF THIS RELEASE. MARLOW MAY ACCEPT AND SIGN THIS RELEASE BEFORE EXPIRATION OF THE TWENTY-ONE DAY TIME PERIOD, BUT HE IS NOT REQUIRED TO DO SO BY THE COMPANY. MARLOW HAS BEEN ADVISED TO CONSULT WITH AN ATTORNEY OF HIS OWN CHOOSING AND HAS CONSULTED WITH LEGAL COUNSEL AND OTHER PERSONS OF HIS OWN CHOOSING REGARDING THIS MATTER PRIOR TO THE EXECUTION OF THIS RELEASE. AFTER SIGNING THIS RELEASE, MARLOW MAY REVOKE HIS ACCEPTANCE WITHIN SEVEN (7) DAYS BY PROVIDING WRITTEN NOTICE OF REVOCATION AS PROVIDED IN PARAGRAPH 13 OF THE AGREEMENT. THIS RELEASE WILL BECOME EFFECTIVE ON THE TENTH DAY FOLLOWING ITS SIGNATURE BY ALL OF THE PARTIES, IT BEING RECOGNIZED THAT THE COMPANY HAS NO OBLIGATION TO MAKE ANY PAYMENT PURSUANT TO SECTION 4(G) OF THE AGREEMENT UNTIL THIS RELEASE BECOMES EFFECTIVE IN ACCORDANCE WITH THIS PROVISION NOTWITHSTANDING ANY LANGUAGE CONTAINED HEREIN OR IN THE AGREEMENT TO THE CONTRARY. I UNDERSTAND THAT BY SIGNING THIS RELEASE, I AM GIVING UP RIGHTS I MAY HAVE. I UNDERSTAND THAT I DO NOT HAVE TO SIGN THIS RELEASE. - ----------------------------- ------------------------ Tedford Marlow Date Sworn to and subscribed before me this ______ day of _______________, 2001, by Tedford Marlow, who is personally known to me [or who has produced ________________ as identification]. [SEAL] _______________________________________________[sign] Type/Print Name of Notary______________________ Notary Public - State of Florida Commission #:__________________________________ Commission Expires:____________________________ - ------------------------------ ----------------------------- Witness Witness Initials TM MG ------- ------- Date 6/15/01 6/15/01 ------- ------- A-3- 21 EXHIBIT B TO CONFIDENTIAL SEPARATION AND RELEASE AGREEMENT WITH TEDFORD MARLOW DATED AS OF _______________, 2001 GENERAL RELEASE AND DISCLAIMER ("RELEASE") In consideration of the promises and actions of TEDFORD MARLOW ("Marlow") set out in the Confidential Separation and Release Agreement entered into between the parties to this Release on _June __, 2001 (the "Agreement"), CHICO'S FAS, INC., a Florida corporation (the "Company") hereby remises, acquits, releases, satisfies and discharges, on its own behalf and on behalf of anyone who could claim by and through it, Marlow, his heirs, and legal representatives and predecessors and successors in interest and assigns (collectively "Marlow Releasees"), of and from any and all claims and demands, past, present or future, and all manner of action and actions, causes of action, suits, administrative proceedings, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, torts, trespasses, damages, judgments, executions, warranties, claims and demands whatsoever, in law or in equity, which the Company, and its successors in interest and assignees, ever had or now have or in the future may have, but only to the extent known to senior management of the Company (other than Marlow) that the Company or any of its affiliates may have against Marlow, his successors or assigns, by reason of any matter, cause or thing whatsoever from the beginning of the world to the day of the date of these presents to the extent related to or occurring in connection with Marlow's employment by the Company., and except that this release shall not constitute a release of Marlow from any of the obligations of Marlow arising under the Agreement and shall not constitute a release of Marlow from any matter involving gross negligence or willful misconduct on the part of Marlow in his capacity as an employee or officer of the Company which resulted or results in a material loss to the Company. For these purposes, action or inaction by Marlow shall not be considered to be gross negligence or willful misconduct if a senior member of management of the Company (other than Marlow) either consented to such action or inaction on the part of Marlow or had actual knowledge of such action or inaction as of the date of the Agreement. (4) The Company promises never to file, participate in or prosecute a lawsuit, complaint, charge or other proceeding asserting any claims that are released by this Release. For good and valuable consideration, the Company represents and warrants that all the terms of this Release shall be complied with. Should the Company breach or act in noncompliance with or in default of this Release, Marlow may recover damages from the Company, along with all costs, including attorneys' fees incurred by Marlow in recovering such damages and in enforcing this Release, with the Company maintaining all other rights, remedies and/or causes of action otherwise available at law or in equity. It is understood that Marlow shall be entitled to recover, as a part of his costs, any attorneys' fees incurred by him in connection with any claim, or type of claim, released Initials TM MG ------- ------- Date 6/15/01 6/15/01 ------- ------- B-1- 22 by this Release. The parties hereto acknowledge that any breach of this Release shall entitle the non-breaching party not only to damages, but to injunctive relief to enjoin the actions of the breaching party, as well as attorney's fees and costs. THIS RELEASE WILL BECOME EFFECTIVE ON THE TENTH DAY FOLLOWING ITS SIGNATURE BY ALL OF THE PARTIES BUT WILL NOT BECOME EFFECTIVE IF FOR ANY REASON MARLOW WERE TO REVOKE ACCEPTANCE OF THE SEPARATE RELEASE THAT IS BEING DELIVERED BY MARLOW TO THE COMPANY ON OR ABOUT THE DATE ON WHICH THIS RELEASE IS BEING DELIVERED. Chico's FAS, Inc. ---------------------- By:__________________________ Date Title:_________________________ Sworn to and subscribed before me this ______ day of _______________, 2001, by ____________, as ____________________ of Chico's FAS, Inc., who is personally known to me [or who has produced ________________ as identification]. [SEAL] _______________________________________________[sign] Type/Print Name of Notary______________________ Notary Public - State of Florida Commission #:__________________________________ Commission Expires:____________________________ - ------------------------------ ----------------------------- Witness Witness Initials TM MG ------- ------- Date 6/15/01 6/15/01 ------- ------- B-2- EX-10.2 5 g71478ex10-2.txt JOHN W. BURDEN INDEMNIFICATION AGREEMENT 1 EXHIBIT 10.2 INDEMNIFICATION AGREEMENT THIS INDEMNIFICATION AGREEMENT (this "Agreement") is made and entered into this 2nd day of July, 2001, by and between JOHN W. BURDEN (the "Indemnified Party") and CHICO'S FAS, INC., a Florida corporation (the "Corporation"). W I T N E S S E T H: WHEREAS, it is essential to the Corporation to retain and attract as Directors and/or Executive Officers the most capable persons available; and WHEREAS, the substantial increase in corporate litigation subjects directors and officers to expensive litigation risks at the same time that the availability of directors' and officers' liability insurance has been severely limited; and WHEREAS, in addition, the statutory indemnification provisions of the Florida Business Corporation Act and Article VII of the bylaws of the Corporation (the "Article") expressly provide that they are non-exclusive; and WHEREAS, the Indemnified Party does not regard the protection available under the Article and insurance, if any, as adequate in the present circumstances, and considers it necessary and desirable to his service as a Director and/or Executive Officer to have adequate protection, and the Corporation desires the Indemnified Party to serve in such capacity and have such protection; and WHEREAS, the Florida Business Corporation Act and the Article provide that indemnification of Directors and Executive Officers of the Corporation may be authorized by agreement, and thereby contemplates that contracts of this nature may be entered into between the Corporation and the Indemnified Party with respect to indemnification of the Indemnified Party as a Director and/or Executive Officer of the Corporation. NOW THEREFORE, in consideration of the premises and the mutual covenants and agreements contained in this Agreement, it is hereby agreed as follows: 1. INDEMNIFICATION GENERALLY. (a) Grant of Indemnity. (i) Subject to and upon the terms and conditions of this Agreement, the Corporation shall indemnify and hold harmless the Indemnified Party in respect of any and all costs, claims, losses, damages and expenses which may be incurred or suffered by the Indemnified Party as a result of or arising out of prosecuting, defending, settling or investigating: (1) any threatened, pending, or completed claim, demand, inquiry, investigation, action, suit or proceeding, whether formal or informal or brought by or in the right of the Corporation or otherwise and whether of a civil, criminal, administrative or investigative nature, in which the Indemnified Party may be or may have been involved as a party or otherwise, arising out of the fact that the Indemnified Party is or was a 2 director, officer, employee, independent contractor or stockholder of the Corporation or any of its "Affiliates" (as such term is defined in the rules and regulations promulgated by the Securities and Exchange Commission under the Securities Act of 1933), or served as a director, officer, employee, independent contractor or stockholder in or for any person, firm, partnership, corporation or other entity at the request of the Corporation (including without limitation service in any capacity for or in connection with any employee benefit plan maintained by the Corporation or on behalf of the Corporation's employees); (2) any attempt (regardless of its success) by any person to charge or cause the Indemnified Party to be charged with wrongdoing or with financial responsibility for damages arising out of or incurred in connection with the matters indemnified against in this Agreement; or (3) any expense, interest, assessment, fine, tax, judgment or settlement payment arising out of or incident to any of the matters indemnified against in this Agreement including reasonable fees and disbursements of legal counsel, experts, accountants, consultants and investigators (before and at trial and in appellate proceedings). (ii) The obligation of the Corporation under this Agreement is not conditioned in any way on any attempt by the Indemnified Party to collect from an insurer any amount under a liability insurance policy. (iii) In no case shall any indemnification be provided under this Agreement to the Indemnified Party by the Corporation in: (1) Any action or proceeding brought by or in the name or interest of the Indemnified Party against the Corporation; or (2) Any action or proceeding brought by the Corporation against the Indemnified Party, which action is initiated at the direction of the Board of Directors of the Corporation. (b) Claims for Indemnification. (i) Whenever any claims shall arise for indemnification under this Agreement, the Indemnified Party shall notify the Corporation promptly and in any event within 30 days after the Indemnified Party has actual knowledge of the facts constituting the basis for such claim. The notice shall specify all facts known to the Indemnified Party giving rise to such indemnification right and the amount or an estimate of the amount of liability (including estimated expenses) arising therefrom. (ii) Any indemnification under this Agreement shall be made no later than 30 days after receipt by the Corporation of the written notification specified in Section 1(b)(i), unless -2- 3 a determination is made within such 30 day period by (X) the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to the matter described in the notice or (Y) independent legal counsel, agreed to by the Corporation, in a written opinion (which counsel shall be appointed if such a quorum is not obtainable), that the Indemnified Party has not met the relevant standards for indemnification under this Agreement. (c) Rights to Defend or Settle; Third Party Claims, etc. (i) If the facts giving rise to any indemnification right under this Agreement shall involve any actual or threatened claim or demand against the Indemnified Party, or any possible claim by the Indemnified Party against any third party, such claim shall be referred to as a "Third Party Claim." If the Corporation provides the Indemnified Party with an agreement in writing in form and substance satisfactory to the Indemnified Party and his counsel, agreeing to indemnify, defend or prosecute and hold the Indemnified Party harmless from all costs and liability arising from any Third Party Claim (an "Agreement of Indemnity"), and demonstrating to the satisfaction of the Indemnified Party the financial wherewithal to accomplish such indemnification, the Corporation may at its own expense undertake full responsibility for the defense or prosecution of such Third Party Claim. The Corporation may contest or settle any such Third Party Claim for money damages on such terms and conditions as it deems appropriate but shall be obligated to consult in good faith with the Indemnified Party and not to contest or settle any Third Party Claim involving injunctive or equitable relief against or affecting the Indemnified Party or his properties or assets without the prior written consent of the Indemnified Party, such consent not to be withheld unreasonably. The Indemnified Party may participate at his own expense and with his own counsel in defense or prosecution of a Third Party Claim pursuant to this Section 1(c)(i), and such participation shall not relieve the Corporation of its obligation to indemnify the Indemnified Party under this Agreement. (ii) If the Corporation fails to deliver a satisfactory Agreement of Indemnity and evidence of financial wherewithal within 10 days after receipt of notice pursuant to Section 1(b), the Indemnified Party may contest or settle the Third Party Claim on such terms as it sees fit but shall not reach a settlement with respect to the payment of money damages without consulting in good faith with the Corporation. The Corporation may participate at its own expense and with its own counsel in defense or prosecution of a Third Party Claim pursuant to this Section 1(c)(ii), but any such participation shall not relieve the Corporation of its obligations to indemnify the Indemnified Party under this Agreement. All expenses (including attorneys' fees) incurred in defending or prosecuting any Third Party Claim shall be paid promptly by the Corporation as the suit or other matter is proceeding, upon the submission of bills therefor or other satisfactory evidence of such expenditures during the pendency of any matter as to which indemnification is available under this Agreement. The failure to make such payments within 10 days after submission of evidence of those expenses shall constitute a breach of a material obligation of the Corporation under this Agreement. (iii) If by reason of any Third Party Claim a lien, attachment, garnishment or execution is placed upon any of the property or assets of the Indemnified Party, the Corporation shall promptly furnish a satisfactory indemnity bond to obtain the prompt release of such lien, attachment, garnishment or execution. -3- 4 (iv) The Indemnified Party shall cooperate in the defense of any Third Party Claim which is controlled by the Corporation, but the Indemnified Party shall continue to be entitled to indemnification and reimbursement for all costs and expenses incurred by him in connection therewith as provided in this Agreement. (d) Cooperation. The parties to this Agreement shall execute such powers of attorney as may be necessary or appropriate to permit participation of counsel selected by any party hereto and, as may be reasonably related to any such claim or action, shall provide to the counsel, accountants and other representatives of each party access during normal business hours to all properties, personnel, books, records, contracts, commitments and all other business records of such other party and will furnish to such other party copies of all such documents as may be reasonably requested (certified, if requested). (e) Choice of Counsel. In all matters as to which indemnification is available to the Indemnified Party under this Agreement, the Indemnified Party shall be free to choose and retain counsel, provided that the Indemnified Party shall secure the prior written consent of the Corporation as to such selection, which consent shall not be unreasonably withheld. (f) Consultation. If the Indemnified Party desires to retain the services of an attorney prior to the determination by the Corporation as to whether it will undertake the defense or prosecution of the Third Party Claim as provided in Section 1(c), the Indemnified Party shall notify the Corporation of such desire in the notice delivered pursuant to Section 1(b)(i), and such notice shall identify the counsel to be retained. The Corporation shall then have 10 days within which to advise the Indemnified Party whether it will assume the defense or prosecution of the Third Party Claim in accordance with Section 1(c)(i). If the Indemnified Party does not receive an affirmative response within such 10 day period, he shall be free to retain counsel of his choice, and the indemnity provided in Section 1(a) shall apply to the reasonable fees and disbursements of such counsel incurred after the expiration of such 10 day period. Any fees or disbursements incurred prior to the expiration of such 10 day period shall not be covered by the indemnity of Section 1(a). (g) Repayment. (i) Notwithstanding the other provisions of this Agreement to the contrary, if the Corporation has incurred any cost, damage or expense under this Agreement paid to or for the benefit of the Indemnified Party and it is determined by a court of competent jurisdiction from which no appeal may be taken that the Indemnified Party's actions or omissions constitute "Nonindemnifiable Conduct" as that term is defined in Section 1(g)(ii), the Indemnified Party shall and does hereby undertake in such circumstances to reimburse the Corporation for any and all such amounts previously paid to or for the benefit of the Indemnified Party. (ii) For these purposes, "Nonindemnifiable Conduct" shall mean actions or omissions of the Indemnified Party material to the cause of action to which the indemnification under this Agreement related is determined to involve: -4- 5 (1) a violation of the criminal law, unless the Indemnified Party had reasonable cause to believe his conduct was lawful and had no reasonable cause to believe his conduct was unlawful; (2) a transaction in which the Indemnified Party derived an improper personal benefit; (3) if the Indemnified Party is a director of the Corporation, a circumstance under which the liability provisions of Section 607.0834 (or any successor or similar statute) are applicable; (4) willful misconduct or a conscious disregard for the best interests of the Corporation (when indemnification is sought in a proceeding by or in the right of the Corporation to procure a judgment in favor of the Corporation or when indemnification is sought in a proceeding by or in the right of a stockholder); or (5) conduct pursuant to then applicable law that prohibits such indemnification. 2. TERM. This Agreement shall be effective upon its execution by all parties and shall continue in full force and effect until the date seven years after the date of this Agreement, or seven years after the termination of the Indemnified Party's employment or term of office, whichever is later, provided that such term shall be extended by any period of time during which the Corporation is in breach of a material obligation to the Indemnified Party, plus ninety days. Such term shall also be extended with respect to each Third Party Claim then pending and as to which notice under Section 1(b) has theretofore been given by the Indemnified Party to the Corporation, and this Agreement shall continue to be applicable to each such Third Party Claim. 3. REPRESENTATIONS AND AGREEMENTS OF THE CORPORATION. (a) Authority. The Corporation represents, covenants and agrees that it has the corporate power and authority to enter into this Agreement and to carry out its obligations under this Agreement. The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated by this Agreement have been duly authorized by the Board of Directors of the Corporation. This Agreement is a valid and binding obligation of the Corporation and is enforceable against the Corporation in accordance with its terms. (b) Noncontestability. The Corporation represents, covenants and agrees that it will not initiate, and that it will use its best efforts to cause any of its Affiliates not to initiate, any action, suit or proceeding challenging the validity or enforceability of this Agreement. -5- 6 (c) Good Faith Judgment. The Corporation represents, covenants and agrees that it will exercise good faith judgment in determining the entitlement of the Indemnified Party to indemnification under this Agreement. 4. RELATIONSHIP OF THIS AGREEMENT TO OTHER INDEMNITIES. (a) Nonexclusivity. (i) This Agreement and all rights granted to the Indemnified Party under this Agreement are in addition to and are not deemed to be exclusive with or of any other rights that may be available to the Indemnified Party under any Articles of Incorporation, bylaw, statute, agreement, or otherwise. (ii) The rights, duties and obligations of the Corporation and the Indemnified Party under this Agreement do not limit, diminish or supersede the rights, duties and obligations of the Corporation and the Indemnified Party with respect to the indemnification afforded to the Indemnified Party under any liability insurance, the Florida Business Corporation Act, or under the bylaws or the Articles of Incorporation of the Corporation. In addition, the Indemnified Party's rights under this Agreement will not be limited or diminished in any respect by any amendment to the bylaws or the Articles of Incorporation of the Corporation. (b) Availability, Contribution, Etc.. (i) The availability or nonavailability of indemnification by way of insurance policy, Articles of Incorporation, bylaw, vote of stockholders, or otherwise from the Corporation to the Indemnified Party shall not affect the right of the Indemnified Party to indemnification under this Agreement, provided that all rights under this Agreement shall be subject to applicable statutory provisions in effect from time to time. (ii) Any funds received by the Indemnified Party by way of indemnification or payment from any source other than from the Corporation under this Agreement shall reduce any amount otherwise payable to the Indemnified Party under this Agreement. (iii) If the Indemnified Party is entitled under any provision of this Agreement to indemnification by the Corporation for some claims, issues or matters, but not as to other claims, issues or matters, or for some or a portion of the expenses, judgments, fines or penalties actually and reasonably incurred by him or amounts actually and reasonably paid in settlement by him in the investigation, defense, appeal or settlement of any matter for which indemnification is sought under this Agreement, but not for the total amount thereof, the Corporation shall nevertheless indemnify the Indemnified Party for the portion of such claims, issues or matters or expenses, judgments, fines, penalties or amounts paid in settlement to which the Indemnified Party is entitled. (iv) If for any reason a court of competent jurisdiction from which no appeal can be taken rules that the indemnity provided under this Agreement is unavailable, or if for any reason the indemnity under this Agreement is insufficient to hold the Indemnified Party harmless as provided in this Agreement, then in either event, the Corporation shall contribute to the amounts paid or -6- 7 payable by the Indemnified Party in such proportion as equitably reflects the relative benefits received by, and fault of the Indemnified Party and the Corporation and its Affiliates. (c) Allowance for Compliance with SEC Requirements. The Indemnified Party acknowledges that the Securities and Exchange Commission ("SEC") has expressed the opinion that indemnification of directors and officers from liabilities under the Securities Act of 1933 (the "1933 Act") is against public policy as expressed in the 1933 Act and, is therefore, unenforceable. The Indemnified Party hereby agrees that it will not be a breach of this Agreement for the Corporation to undertake with the SEC in connection with the registration for sale of any stock or other securities of the Corporation from time to time that, in the event a claim for indemnification against such liabilities (other than the payment by the Corporation of expenses incurred or paid by a director or officer of the Corporation in the successful defense of any action, suit or proceeding) is asserted in connection with such stock or other securities being registered, the Corporation will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of competent jurisdiction on the question of whether or not such indemnification by it is against public policy as expressed in the 1933 Act and will be governed by the final adjudication of such issue. The Indemnified Party further agrees that such submission to a court of competent jurisdiction shall not be a breach of this Agreement. 5. MISCELLANEOUS. (a) Notices. All notices, requests, demands and other communications which are required or may be given under this Agreement shall be in writing and shall be deemed to have been duly given when received if personally delivered; when transmitted if transmitted by telecopy, electronic telephone line facsimile transmission or other similar electronic or digital transmission method; the day after it is sent, if sent by recognized expedited delivery service; and five days after it is sent, if mailed, first class mail, postage prepaid. In each case notice shall be sent to: If to the Indemni- fied Party: John W. Burden P.O. Box 1131 Sanibel Island, FL 33957 If to the Corporation: Chico's FAS, Ins. 11215 Metro Parkway Ft. Myers, Florida 33912 or to such other address as either party may have specified in writing to the other using the procedures specified above in this Section 5(a). -7- 8 (b) Construction and Interpretation. (i) This Agreement shall be construed pursuant to and governed by the substantive laws of the State of Florida (and any provision of Florida law shall not apply if the law of a state or jurisdiction other than Florida would otherwise apply). (ii) The headings of the various sections in this Agreement are inserted for the convenience of the parties and shall not affect the meaning, construction or interpretation of this Agreement. (iii) Any provision of this Agreement which is determined by a court of competent jurisdiction to be prohibited, unenforceable or not authorized in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition, unenforceability or non- authorization without invalidating the remaining provisions hereof or affecting the validity, enforceability or legality of such provision in any other jurisdiction. In any such case, such determination shall not affect any other provision of this Agreement, and the remaining provisions of this Agreement shall remain in full force and effect. If any provision or term of this Agreement is susceptible to two or more constructions or interpretations, one or more of which would render the provision or term void or unenforceable, the parties agree that a construction or interpretation which renders the term or provision valid shall be favored. (iv) As used in this Agreement, (2) the word "including" is always without limitation; (3) the words in the singular number include words of the plural number and vice versa; and (4) the word "person" includes a trust, corporation, association, partnership, joint venture, business trust, unincorporated organization, limited liability company, government, public body or authority and any governmental agency or department, as well as a natural person. (c) Entire Agreement. This Agreement constitutes the entire Agreement, and supersedes all prior agreements and understandings, oral and written, among the parties to this Agreement with respect to the subject matter hereof. (d) Specific Enforcement. (i) The parties agree and acknowledge that in the event of a breach by the Corporation of its obligation promptly to indemnify the Indemnified Party as provided in this Agreement, or breach of any other material provision of this Agreement, damages at law will be an insufficient remedy to the Indemnified Party. Accordingly, the parties agree that, in addition to any other remedies or rights that may be available to the Indemnified Party, the Indemnified Party shall also be entitled, upon application to a court of competent jurisdiction, to obtain temporary or permanent injunctions to compel specific performance of the obligations of the Corporation under this Agreement. (ii) There shall exist in such action a rebuttable presumption that the Indemnified Party has met the applicable standard(s) of conduct and is therefore entitled to indemnification pursuant to this Agreement, and the burden of proving that the relevant standards have not been met by the Indemnified Party shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors or independent legal counsel) prior to the commencement of such -8- 9 action to have made a determination that indemnification is proper in the circumstances because the Indemnified Party has met the applicable standard of conduct, nor an actual determination by the Corporation (including its Board of Directors or independent legal counsel) that the Indemnified Party has not met such applicable standard of conduct, shall (X) constitute a defense to the action, (Y) create a presumption that the Indemnified Party has not met the applicable standard of conduct, or (Z) otherwise alter the presumption in favor of the Indemnified Party referred to in the preceding sentence. (e) Cost of Enforcement; Interest. (i) If the Indemnified Party engages the services of an attorney or any other third party or in any way initiates legal action to enforce his rights under this Agreement, including but not limited to the collection of monies due from the Corporation to the Indemnified Party, the prevailing party shall be entitled to recover all reasonable costs and expenses (including reasonable attorneys' fees before and at trial and in appellate proceedings). Should the Indemnified Party prevail, such costs and expenses shall be in addition to monies otherwise due him under this Agreement. (ii) If any monies shall be due the Indemnified Party from the Corporation under this Agreement and shall not be paid within 30 days from the date of written request for payment, interest shall accrue on such unpaid amount at the rate of 2% per annum in excess of the prime rate announced from time to time by Bank of America, or such lower rate as may be required to comply with applicable law from the date when due until it is paid in full. (f) Application to Third Parties, Etc.. Nothing in this Agreement, whether express or implied, is intended or should be construed to confer upon, or to grant to, any person, except the Corporation, the Indemnified Party and their respective heirs, assignees and successors, any claim, right or remedy under or because of this Agreement or in any provision of it. This Agreement shall be binding upon and inure to the benefit of the successors in interest and assigns, heirs and personal representatives, as the case may be, of the parties, including any successor corporation resulting from a merger, consolidation, recapitalization, reorganization, sale of all or substantially all of the assets of the Corporation, or any other transaction resulting in the successor corporation assuming the liabilities of the Corporation under this Agreement (by operation of law, or otherwise). (g) Further Assurances. The parties to this Agreement will execute and deliver, or cause to be executed and delivered, such additional or further documents, agreements or instruments and shall cooperate with one another in all respects for the purpose of carrying out the transactions contemplated by this Agreement. (h) Venue; Process. The parties to this Agreement agree that jurisdiction and venue in any action brought pursuant to this Agreement to enforce its terms or otherwise with respect to the relationships between the parties shall properly lie in the Circuit Court of the Twentieth Judicial Circuit of the State of Florida in and for Lee County or in the United States District Court for the Middle District of Florida, Tampa Division. Such jurisdiction and venue are merely permissive; jurisdiction and venue shall also continue to lie in any court where jurisdiction and venue would -9- 10 otherwise be proper. The parties agree that they will not object that any action commenced in the foregoing jurisdictions is commenced in a forum non conveniens. The parties further agree that the mailing by certified or registered mail, return receipt requested, of any process required by any such court shall constitute valid and lawful service of process against them, without the necessity for service by any other means provided by statute or rule of court. (i) Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be considered an original, but all of which together shall constitute one and the same instrument. (j) Waiver and Delay. No waiver or delay in enforcing the terms of this Agreement shall be construed as a waiver of any subsequent breach. No action taken by the Indemnified Party shall constitute a waiver of his rights under this Agreement. IN WITNESS WHEREOF, the parties have executed this Agreement on the date first above written. CHICO'S FAS, INC. By: /s/ Marvin J. Gralnick ------------------------------------- Marvin J. Gralnick, Chief Executive Officer and President WITNESSES: /s/ Charles J. Kleman /s/ John W. Burden - -------------------------------------- -------------------------------------- John W. Burden /s/ Sherry Terzian - -------------------------------------- -10- EX-10.3 6 g71478ex10-3.txt ROSS E. ROEDER INDEMNIFICATION AGREEMENT 1 EXHIBIT 10.3 INDEMNIFICATION AGREEMENT THIS INDEMNIFICATION AGREEMENT (this "Agreement") is made and entered into this 5th day of July, 2001, by and between ROSS E. ROEDER (the "Indemnified Party") and CHICO'S FAS, INC., a Florida corporation (the "Corporation"). W I T N E S S E T H: WHEREAS, it is essential to the Corporation to retain and attract as Directors and/or Executive Officers the most capable persons available; and WHEREAS, the substantial increase in corporate litigation subjects directors and officers to expensive litigation risks at the same time that the availability of directors' and officers' liability insurance has been severely limited; and WHEREAS, in addition, the statutory indemnification provisions of the Florida Business Corporation Act and Article VII of the bylaws of the Corporation (the "Article") expressly provide that they are non-exclusive; and WHEREAS, the Indemnified Party does not regard the protection available under the Article and insurance, if any, as adequate in the present circumstances, and considers it necessary and desirable to his service as a Director and/or Executive Officer to have adequate protection, and the Corporation desires the Indemnified Party to serve in such capacity and have such protection; and WHEREAS, the Florida Business Corporation Act and the Article provide that indemnification of Directors and Executive Officers of the Corporation may be authorized by agreement, and thereby contemplates that contracts of this nature may be entered into between the Corporation and the Indemnified Party with respect to indemnification of the Indemnified Party as a Director and/or Executive Officer of the Corporation. NOW THEREFORE, in consideration of the premises and the mutual covenants and agreements contained in this Agreement, it is hereby agreed as follows: 1. INDEMNIFICATION GENERALLY. (a) Grant of Indemnity. (i) Subject to and upon the terms and conditions of this Agreement, the Corporation shall indemnify and hold harmless the Indemnified Party in respect of any and all costs, claims, losses, damages and expenses which may be incurred or suffered by the Indemnified Party as a result of or arising out of prosecuting, defending, settling or investigating: (1) any threatened, pending, or completed claim, demand, inquiry, investigation, action, suit or proceeding, whether formal or informal or brought by or in the right of the Corporation or otherwise and whether of a civil, criminal, administrative or investigative nature, in which the Indemnified Party may be or may have been involved as a party or otherwise, arising out of the fact that the Indemnified Party is or was a 2 director, officer, employee, independent contractor or stockholder of the Corporation or any of its "Affiliates" (as such term is defined in the rules and regulations promulgated by the Securities and Exchange Commission under the Securities Act of 1933), or served as a director, officer, employee, independent contractor or stockholder in or for any person, firm, partnership, corporation or other entity at the request of the Corporation (including without limitation service in any capacity for or in connection with any employee benefit plan maintained by the Corporation or on behalf of the Corporation's employees); (2) any attempt (regardless of its success) by any person to charge or cause the Indemnified Party to be charged with wrongdoing or with financial responsibility for damages arising out of or incurred in connection with the matters indemnified against in this Agreement; or (3) any expense, interest, assessment, fine, tax, judgment or settlement payment arising out of or incident to any of the matters indemnified against in this Agreement including reasonable fees and disbursements of legal counsel, experts, accountants, consultants and investigators (before and at trial and in appellate proceedings). (ii) The obligation of the Corporation under this Agreement is not conditioned in any way on any attempt by the Indemnified Party to collect from an insurer any amount under a liability insurance policy. (iii) In no case shall any indemnification be provided under this Agreement to the Indemnified Party by the Corporation in: (1) Any action or proceeding brought by or in the name or interest of the Indemnified Party against the Corporation; or (2) Any action or proceeding brought by the Corporation against the Indemnified Party, which action is initiated at the direction of the Board of Directors of the Corporation. (b) Claims for Indemnification. (i) Whenever any claims shall arise for indemnification under this Agreement, the Indemnified Party shall notify the Corporation promptly and in any event within 30 days after the Indemnified Party has actual knowledge of the facts constituting the basis for such claim. The notice shall specify all facts known to the Indemnified Party giving rise to such indemnification right and the amount or an estimate of the amount of liability (including estimated expenses) arising therefrom. (ii) Any indemnification under this Agreement shall be made no later than 30 days after receipt by the Corporation of the written notification specified in Section 1(b)(i), unless -2- 3 a determination is made within such 30 day period by (X) the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to the matter described in the notice or (Y) independent legal counsel, agreed to by the Corporation, in a written opinion (which counsel shall be appointed if such a quorum is not obtainable), that the Indemnified Party has not met the relevant standards for indemnification under this Agreement. (c) Rights to Defend or Settle; Third Party Claims, etc. (i) If the facts giving rise to any indemnification right under this Agreement shall involve any actual or threatened claim or demand against the Indemnified Party, or any possible claim by the Indemnified Party against any third party, such claim shall be referred to as a "Third Party Claim." If the Corporation provides the Indemnified Party with an agreement in writing in form and substance satisfactory to the Indemnified Party and his counsel, agreeing to indemnify, defend or prosecute and hold the Indemnified Party harmless from all costs and liability arising from any Third Party Claim (an "Agreement of Indemnity"), and demonstrating to the satisfaction of the Indemnified Party the financial wherewithal to accomplish such indemnification, the Corporation may at its own expense undertake full responsibility for the defense or prosecution of such Third Party Claim. The Corporation may contest or settle any such Third Party Claim for money damages on such terms and conditions as it deems appropriate but shall be obligated to consult in good faith with the Indemnified Party and not to contest or settle any Third Party Claim involving injunctive or equitable relief against or affecting the Indemnified Party or his properties or assets without the prior written consent of the Indemnified Party, such consent not to be withheld unreasonably. The Indemnified Party may participate at his own expense and with his own counsel in defense or prosecution of a Third Party Claim pursuant to this Section 1(c)(i), and such participation shall not relieve the Corporation of its obligation to indemnify the Indemnified Party under this Agreement. (ii) If the Corporation fails to deliver a satisfactory Agreement of Indemnity and evidence of financial wherewithal within 10 days after receipt of notice pursuant to Section 1(b), the Indemnified Party may contest or settle the Third Party Claim on such terms as it sees fit but shall not reach a settlement with respect to the payment of money damages without consulting in good faith with the Corporation. The Corporation may participate at its own expense and with its own counsel in defense or prosecution of a Third Party Claim pursuant to this Section 1(c)(ii), but any such participation shall not relieve the Corporation of its obligations to indemnify the Indemnified Party under this Agreement. All expenses (including attorneys' fees) incurred in defending or prosecuting any Third Party Claim shall be paid promptly by the Corporation as the suit or other matter is proceeding, upon the submission of bills therefor or other satisfactory evidence of such expenditures during the pendency of any matter as to which indemnification is available under this Agreement. The failure to make such payments within 10 days after submission of evidence of those expenses shall constitute a breach of a material obligation of the Corporation under this Agreement. (iii) If by reason of any Third Party Claim a lien, attachment, garnishment or execution is placed upon any of the property or assets of the Indemnified Party, the Corporation shall promptly furnish a satisfactory indemnity bond to obtain the prompt release of such lien, attachment, garnishment or execution. -3- 4 (iv) The Indemnified Party shall cooperate in the defense of any Third Party Claim which is controlled by the Corporation, but the Indemnified Party shall continue to be entitled to indemnification and reimbursement for all costs and expenses incurred by him in connection therewith as provided in this Agreement. (d) Cooperation. The parties to this Agreement shall execute such powers of attorney as may be necessary or appropriate to permit participation of counsel selected by any party hereto and, as may be reasonably related to any such claim or action, shall provide to the counsel, accountants and other representatives of each party access during normal business hours to all properties, personnel, books, records, contracts, commitments and all other business records of such other party and will furnish to such other party copies of all such documents as may be reasonably requested (certified, if requested). (e) Choice of Counsel. In all matters as to which indemnification is available to the Indemnified Party under this Agreement, the Indemnified Party shall be free to choose and retain counsel, provided that the Indemnified Party shall secure the prior written consent of the Corporation as to such selection, which consent shall not be unreasonably withheld. (f) Consultation. If the Indemnified Party desires to retain the services of an attorney prior to the determination by the Corporation as to whether it will undertake the defense or prosecution of the Third Party Claim as provided in Section 1(c), the Indemnified Party shall notify the Corporation of such desire in the notice delivered pursuant to Section 1(b)(i), and such notice shall identify the counsel to be retained. The Corporation shall then have 10 days within which to advise the Indemnified Party whether it will assume the defense or prosecution of the Third Party Claim in accordance with Section 1(c)(i). If the Indemnified Party does not receive an affirmative response within such 10 day period, he shall be free to retain counsel of his choice, and the indemnity provided in Section 1(a) shall apply to the reasonable fees and disbursements of such counsel incurred after the expiration of such 10 day period. Any fees or disbursements incurred prior to the expiration of such 10 day period shall not be covered by the indemnity of Section 1(a). (g) Repayment. (i) Notwithstanding the other provisions of this Agreement to the contrary, if the Corporation has incurred any cost, damage or expense under this Agreement paid to or for the benefit of the Indemnified Party and it is determined by a court of competent jurisdiction from which no appeal may be taken that the Indemnified Party's actions or omissions constitute "Nonindemnifiable Conduct" as that term is defined in Section 1(g)(ii), the Indemnified Party shall and does hereby undertake in such circumstances to reimburse the Corporation for any and all such amounts previously paid to or for the benefit of the Indemnified Party. (ii) For these purposes, "Nonindemnifiable Conduct" shall mean actions or omissions of the Indemnified Party material to the cause of action to which the indemnification under this Agreement related is determined to involve: -4- 5 (1) a violation of the criminal law, unless the Indemnified Party had reasonable cause to believe his conduct was lawful and had no reasonable cause to believe his conduct was unlawful; (2) a transaction in which the Indemnified Party derived an improper personal benefit; (3) if the Indemnified Party is a director of the Corporation, a circumstance under which the liability provisions of Section 607.0834 (or any successor or similar statute) are applicable; (4) willful misconduct or a conscious disregard for the best interests of the Corporation (when indemnification is sought in a proceeding by or in the right of the Corporation to procure a judgment in favor of the Corporation or when indemnification is sought in a proceeding by or in the right of a stockholder); or (5) conduct pursuant to then applicable law that prohibits such indemnification. 2. TERM. This Agreement shall be effective upon its execution by all parties and shall continue in full force and effect until the date seven years after the date of this Agreement, or seven years after the termination of the Indemnified Party's employment or term of office, whichever is later, provided that such term shall be extended by any period of time during which the Corporation is in breach of a material obligation to the Indemnified Party, plus ninety days. Such term shall also be extended with respect to each Third Party Claim then pending and as to which notice under Section 1(b) has theretofore been given by the Indemnified Party to the Corporation, and this Agreement shall continue to be applicable to each such Third Party Claim. 3. REPRESENTATIONS AND AGREEMENTS OF THE CORPORATION. (a) Authority. The Corporation represents, covenants and agrees that it has the corporate power and authority to enter into this Agreement and to carry out its obligations under this Agreement. The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated by this Agreement have been duly authorized by the Board of Directors of the Corporation. This Agreement is a valid and binding obligation of the Corporation and is enforceable against the Corporation in accordance with its terms. (b) Noncontestability. The Corporation represents, covenants and agrees that it will not initiate, and that it will use its best efforts to cause any of its Affiliates not to initiate, any action, suit or proceeding challenging the validity or enforceability of this Agreement. -5- 6 (c) Good Faith Judgment. The Corporation represents, covenants and agrees that it will exercise good faith judgment in determining the entitlement of the Indemnified Party to indemnification under this Agreement. 4. RELATIONSHIP OF THIS AGREEMENT TO OTHER INDEMNITIES. (a) Nonexclusivity. (i) This Agreement and all rights granted to the Indemnified Party under this Agreement are in addition to and are not deemed to be exclusive with or of any other rights that may be available to the Indemnified Party under any Articles of Incorporation, bylaw, statute, agreement, or otherwise. (ii) The rights, duties and obligations of the Corporation and the Indemnified Party under this Agreement do not limit, diminish or supersede the rights, duties and obligations of the Corporation and the Indemnified Party with respect to the indemnification afforded to the Indemnified Party under any liability insurance, the Florida Business Corporation Act, or under the bylaws or the Articles of Incorporation of the Corporation. In addition, the Indemnified Party's rights under this Agreement will not be limited or diminished in any respect by any amendment to the bylaws or the Articles of Incorporation of the Corporation. (b) Availability, Contribution, Etc.. (i) The availability or nonavailability of indemnification by way of insurance policy, Articles of Incorporation, bylaw, vote of stockholders, or otherwise from the Corporation to the Indemnified Party shall not affect the right of the Indemnified Party to indemnification under this Agreement, provided that all rights under this Agreement shall be subject to applicable statutory provisions in effect from time to time. (ii) Any funds received by the Indemnified Party by way of indemnification or payment from any source other than from the Corporation under this Agreement shall reduce any amount otherwise payable to the Indemnified Party under this Agreement. (iii) If the Indemnified Party is entitled under any provision of this Agreement to indemnification by the Corporation for some claims, issues or matters, but not as to other claims, issues or matters, or for some or a portion of the expenses, judgments, fines or penalties actually and reasonably incurred by him or amounts actually and reasonably paid in settlement by him in the investigation, defense, appeal or settlement of any matter for which indemnification is sought under this Agreement, but not for the total amount thereof, the Corporation shall nevertheless indemnify the Indemnified Party for the portion of such claims, issues or matters or expenses, judgments, fines, penalties or amounts paid in settlement to which the Indemnified Party is entitled. (iv) If for any reason a court of competent jurisdiction from which no appeal can be taken rules that the indemnity provided under this Agreement is unavailable, or if for any reason the indemnity under this Agreement is insufficient to hold the Indemnified Party harmless as provided in this Agreement, then in either event, the Corporation shall contribute to the amounts paid or -6- 7 payable by the Indemnified Party in such proportion as equitably reflects the relative benefits received by, and fault of the Indemnified Party and the Corporation and its Affiliates. (c) Allowance for Compliance with SEC Requirements. The Indemnified Party acknowledges that the Securities and Exchange Commission ("SEC") has expressed the opinion that indemnification of directors and officers from liabilities under the Securities Act of 1933 (the "1933 Act") is against public policy as expressed in the 1933 Act and, is therefore, unenforceable. The Indemnified Party hereby agrees that it will not be a breach of this Agreement for the Corporation to undertake with the SEC in connection with the registration for sale of any stock or other securities of the Corporation from time to time that, in the event a claim for indemnification against such liabilities (other than the payment by the Corporation of expenses incurred or paid by a director or officer of the Corporation in the successful defense of any action, suit or proceeding) is asserted in connection with such stock or other securities being registered, the Corporation will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of competent jurisdiction on the question of whether or not such indemnification by it is against public policy as expressed in the 1933 Act and will be governed by the final adjudication of such issue. The Indemnified Party further agrees that such submission to a court of competent jurisdiction shall not be a breach of this Agreement. 5. MISCELLANEOUS. (a) Notices. All notices, requests, demands and other communications which are required or may be given under this Agreement shall be in writing and shall be deemed to have been duly given when received if personally delivered; when transmitted if transmitted by telecopy, electronic telephone line facsimile transmission or other similar electronic or digital transmission method; the day after it is sent, if sent by recognized expedited delivery service; and five days after it is sent, if mailed, first class mail, postage prepaid. In each case notice shall be sent to: If to the Indemni- fied Party: Ross E. Roeder Suite 200 1355 Snell Isle Blvd., N.E. St. Petersburg, FL 33704 If to the Corporation: Chico's FAS, Ins. 11215 Metro Parkway Ft. Myers, Florida 33912 or to such other address as either party may have specified in writing to the other using the procedures specified above in this Section 5(a). -7- 8 (b) Construction and Interpretation. (i) This Agreement shall be construed pursuant to and governed by the substantive laws of the State of Florida (and any provision of Florida law shall not apply if the law of a state or jurisdiction other than Florida would otherwise apply). (ii) The headings of the various sections in this Agreement are inserted for the convenience of the parties and shall not affect the meaning, construction or interpretation of this Agreement. (iii) Any provision of this Agreement which is determined by a court of competent jurisdiction to be prohibited, unenforceable or not authorized in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition, unenforceability or non- authorization without invalidating the remaining provisions hereof or affecting the validity, enforceability or legality of such provision in any other jurisdiction. In any such case, such determination shall not affect any other provision of this Agreement, and the remaining provisions of this Agreement shall remain in full force and effect. If any provision or term of this Agreement is susceptible to two or more constructions or interpretations, one or more of which would render the provision or term void or unenforceable, the parties agree that a construction or interpretation which renders the term or provision valid shall be favored. (iv) As used in this Agreement, (2) the word "including" is always without limitation; (3) the words in the singular number include words of the plural number and vice versa; and (4) the word "person" includes a trust, corporation, association, partnership, joint venture, business trust, unincorporated organization, limited liability company, government, public body or authority and any governmental agency or department, as well as a natural person. (c) Entire Agreement. This Agreement constitutes the entire Agreement, and supersedes all prior agreements and understandings, oral and written, among the parties to this Agreement with respect to the subject matter hereof. (d) Specific Enforcement. (i) The parties agree and acknowledge that in the event of a breach by the Corporation of its obligation promptly to indemnify the Indemnified Party as provided in this Agreement, or breach of any other material provision of this Agreement, damages at law will be an insufficient remedy to the Indemnified Party. Accordingly, the parties agree that, in addition to any other remedies or rights that may be available to the Indemnified Party, the Indemnified Party shall also be entitled, upon application to a court of competent jurisdiction, to obtain temporary or permanent injunctions to compel specific performance of the obligations of the Corporation under this Agreement. (ii) There shall exist in such action a rebuttable presumption that the Indemnified Party has met the applicable standard(s) of conduct and is therefore entitled to indemnification pursuant to this Agreement, and the burden of proving that the relevant standards have not been met by the Indemnified Party shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors or independent legal counsel) prior to the commencement of such -8- 9 action to have made a determination that indemnification is proper in the circumstances because the Indemnified Party has met the applicable standard of conduct, nor an actual determination by the Corporation (including its Board of Directors or independent legal counsel) that the Indemnified Party has not met such applicable standard of conduct, shall (X) constitute a defense to the action, (Y) create a presumption that the Indemnified Party has not met the applicable standard of conduct, or (Z) otherwise alter the presumption in favor of the Indemnified Party referred to in the preceding sentence. (e) Cost of Enforcement; Interest. (i) If the Indemnified Party engages the services of an attorney or any other third party or in any way initiates legal action to enforce his rights under this Agreement, including but not limited to the collection of monies due from the Corporation to the Indemnified Party, the prevailing party shall be entitled to recover all reasonable costs and expenses (including reasonable attorneys' fees before and at trial and in appellate proceedings). Should the Indemnified Party prevail, such costs and expenses shall be in addition to monies otherwise due him under this Agreement. (ii) If any monies shall be due the Indemnified Party from the Corporation under this Agreement and shall not be paid within 30 days from the date of written request for payment, interest shall accrue on such unpaid amount at the rate of 2% per annum in excess of the prime rate announced from time to time by Bank of America, or such lower rate as may be required to comply with applicable law from the date when due until it is paid in full. (f) Application to Third Parties, Etc.. Nothing in this Agreement, whether express or implied, is intended or should be construed to confer upon, or to grant to, any person, except the Corporation, the Indemnified Party and their respective heirs, assignees and successors, any claim, right or remedy under or because of this Agreement or in any provision of it. This Agreement shall be binding upon and inure to the benefit of the successors in interest and assigns, heirs and personal representatives, as the case may be, of the parties, including any successor corporation resulting from a merger, consolidation, recapitalization, reorganization, sale of all or substantially all of the assets of the Corporation, or any other transaction resulting in the successor corporation assuming the liabilities of the Corporation under this Agreement (by operation of law, or otherwise). (g) Further Assurances. The parties to this Agreement will execute and deliver, or cause to be executed and delivered, such additional or further documents, agreements or instruments and shall cooperate with one another in all respects for the purpose of carrying out the transactions contemplated by this Agreement. (h) Venue; Process. The parties to this Agreement agree that jurisdiction and venue in any action brought pursuant to this Agreement to enforce its terms or otherwise with respect to the relationships between the parties shall properly lie in the Circuit Court of the Twentieth Judicial Circuit of the State of Florida in and for Lee County or in the United States District Court for the Middle District of Florida, Tampa Division. Such jurisdiction and venue are merely permissive; jurisdiction and venue shall also continue to lie in any court where jurisdiction and venue would -9- 10 otherwise be proper. The parties agree that they will not object that any action commenced in the foregoing jurisdictions is commenced in a forum non conveniens. The parties further agree that the mailing by certified or registered mail, return receipt requested, of any process required by any such court shall constitute valid and lawful service of process against them, without the necessity for service by any other means provided by statute or rule of court. (i) Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be considered an original, but all of which together shall constitute one and the same instrument. (j) Waiver and Delay. No waiver or delay in enforcing the terms of this Agreement shall be construed as a waiver of any subsequent breach. No action taken by the Indemnified Party shall constitute a waiver of his rights under this Agreement. IN WITNESS WHEREOF, the parties have executed this Agreement on the date first above written. CHICO'S FAS, INC. By: /s/ Marvin J. Gralnick ------------------------------------- Marvin J. Gralnick, Chief Executive Officer and President WITNESSES: /s/ Charles J. Kleman /s/ Ross E. Roeder - -------------------------------------- ------------------------------------- Ross E. Roeder /s/ Sherry Terzian - -------------------------------------- -10- -----END PRIVACY-ENHANCED MESSAGE-----

EX-3.1

   1
                                                                     EXHIBIT 3.1

                              ARTICLES OF AMENDMENT
                                     OF THE
                              AMENDED AND RESTATED
                            ARTICLES OF INCORPORATION
                                       OF
                                CHICO'S FAS, INC.


         CHICO'S FAS, INC., a corporation organized and existing under the laws
of the State of Florida (the "Corporation"), in order to amend its Amended and
Restated Articles of Incorporation as now in effect (the "Articles of
Incorporation"), in accordance with the requirements of Chapter 607, Florida
Statutes, does hereby certify as follows:

         1. The name of the Corporation is CHICO'S FAS, INC.

         2. The amendment being effected hereby (the "Amendment") was duly
adopted and approved by the Board of Directors of the Corporation by the
execution of a written consent effective April 25, 2001.

         3. The Amendment was duly adopted and approved by a majority of the
shareholders of the Corporation at a meeting of shareholders on June 19, 2001
and the number of votes cast for the Amendment were sufficient for approval.

         4. These Articles of Amendment of the Amended and Restated Articles of
Incorporation of Chico's FAS, Inc. (the "Articles of Amendment") shall be
effective upon filing hereof with the Department of State of the State of
Florida.

         5. The Amendment causes the authorized common stock of the Corporation
to increase from 50,000,000 shares of common stock, par value $.01 per share to
100,000,000 shares of common stock, par value $.01 per share.

         6. The Amended and Restated Articles of Incorporation are hereby
amended by deleting Section 1(a) of Article IV thereof in its entirety, and in
its place and stead substituting the following:

        *                              *                              *

                           (a) The total number of shares of capital stock
                  authorized to be issued by this Corporation shall be:


                                   Page 1 of 2

   2


                           2,500,000 shares of preferred stock, par value $.01
                           per share (the "Preferred Stock").

                           100,000,000 shares of common stock, par value $.01
                           per share (the "Common Stock").


        *                              *                              *

         IN WITNESS WHEREOF, the undersigned officer of the Corporation has
executed these Articles of Amendment of the Amended and Restated Articles of
Incorporation of Chico's FAS, Inc. this 19th day of June, 2001.

                                               CHICO'S FAS, INC.



                                               By: /s/ Marvin J. Gralnick
                                                  ------------------------------
                                                        President, CEO
                                                        Marvin J. Gralnick


                                  Page 2 of 2

EX-10.1

   1
                                                                    EXHIBIT 10.1

                                  CONFIDENTIAL
                        SEPARATION AND RELEASE AGREEMENT


         THIS CONFIDENTIAL SEPARATION AND RELEASE AGREEMENT
("Agreement") is made and entered into the 15th day of June, 2001, by and
between CHICO'S FAS, INC., a Florida corporation (the "Company"), and TEDFORD
MARLOW ("Marlow").


                                   WITNESSETH:


         WHEREAS, Marlow and the Company are parties to that certain Employment
Agreement dated as of September 6, 2000, as clarified by that certain letter
agreement dated September 20, 2000 (collectively, the "Employment Agreement"),
that certain Stock Option Agreement dated as of September 6, 2000 with respect
to 220,000 options (the "220,000 Share Option Agreement") and that certain Stock
Option Agreement dated as of September 6, 2000 with respect to 30,000 options
(the "30,000 Share Option Agreement"); and

         WHEREAS, Marlow has been an employee and officer of the Company; and

         WHEREAS, the parties each acknowledge that the Company provided formal
written notice to Marlow of non-renewal of the Employment Agreement by way of
letter dated May 24, 2001 and delivered to and received by Marlow on May 24,
2001, such that absent an earlier termination in accordance with the terms of
the Employment Agreement, the term of the Employment Agreement was to end on
September 1, 2002; and

         WHEREAS, Marlow and the Company each wish to agree finally and amicably
to terms of a continued employment with the Company for a specified period and
the terms and conditions of the termination of his service as an employee and
officer of the Company (including any and all rights and obligations of the
parties under the Employment Agreement, the 220,000 Share Option Agreement and
the 30,000 Share Option Agreement) and Marlow desires to release the Company
from any and all existing claims, subject to the terms and conditions stated
herein; and

         WHEREAS, the Company desires to provide certain continuation of
employment benefits and certain termination benefits to Marlow; and

         WHEREAS, the Company desires to have Marlow continue to remain subject
to certain nondisclosure restrictions and nonsolicitation obligations in order
to protect the Company's legitimate business interests and Marlow is willing to
agree to same; and


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   2



         WHEREAS, the parties desire to delineate their respective rights,
duties, and obligations, and desire complete accord.

         NOW, THEREFORE, in consideration of the premises, and the agreements of
the parties set forth in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound, hereby covenant and agree as
follows:


         1. RECITALS AND DEFINITIONS.

                  (a) Recitals. The recitals set forth above are true and
correct in every respect and are incorporated herein by reference.

                  (b) Definitions. As used in this Agreement, the following
terms have the meanings set forth below:

                           "Applicable Termination Date" For purposes of this
                  Agreement, the Applicable Termination Date shall be September
                  1, 2001 unless Marlow delivers to the Company the Extension
                  Notice (as hereinafter defined) on or before 5:00 p.m., Ft.
                  Myers time on August 25, 2001, in which event the Extension
                  Notice will serve as an election by Marlow to extend his
                  employment past September 1, 2001 and for his employment to
                  terminate instead on, and for the Applicable Termination Date
                  to be, September 15, 2001 with the understanding that the
                  September 1, 2001 termination shall not take effect and
                  instead, Marlow will continue to be employed through September
                  15, 2001, on which date Marlow's employment will terminate,
                  with the rights and responsibilities of the parties thereafter
                  being as described in this Agreement.

                           "Extension Notice" shall mean a written notice signed
                  by Marlow and delivered to and received by the Company on or
                  before 5:00 p.m., Ft. Myers time on August 25, 2001 which
                  expressly sets forth that Marlow elects to extend his
                  employment to September 15, 2001 in accordance with this
                  Agreement and expressly states that such written notice is to
                  be considered an Extension Notice for purposes of this
                  Agreement. Such Extension Notice shall not be effective if at
                  the time such Extension Notice is delivered Marlow is in
                  material default or breach of any of his obligations under
                  this Agreement.

         2. RESIGNATIONS BY MARLOW.

                  (a) Effective as of the close of business on June 15, 2001,
Marlow resigns from his position as Executive Vice President - Merchandising,
Marketing and Product Development, and

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                                       -2-

   3



the Company hereby accepts this resignation. It is agreed that effective as of
the close of business on June 15, 2001, Marlow has no further privileges, duties
or obligations in such capacity.

                  (b) If Marlow timely delivers the Extension Notice to the
Company, then Marlow's employment with the Company shall be considered to have
terminated effective as of the close of business on September 15, 2001.
Otherwise, Marlow's employment with the Company shall be considered to have
terminated effective as of the close of business on September 1, 2001.

         3. DISCONTINUATION OF EMPLOYMENT AND TERMINATION OF EMPLOYMENT
AGREEMENT.

                  (a) Effective as of the close of business on June 15, 2001,
the parties agree that (i) consistent with Section 2(a) of this Agreement,
Marlow's position with the Company as Executive Vice President - Merchandising,
Marketing and Product Development is discontinued, and (ii) except as otherwise
expressly provided for in this Agreement, the Employment Agreement is terminated
and of no further force and effect and Marlow relinquishes any and all
continuing rights and benefits he may have under the Employment Agreement or as
Executive Vice President - Merchandising, Marketing and Product Development of
the Company. The close of business on June 15, 2001 shall be referred to as the
"Effective Time" under this Agreement.

                  (b) As provided in Section 9 of this Agreement, Marlow shall
nevertheless continue as an employee of the Company until the close of business
on the Applicable Termination Date. On the Applicable Termination Date, Marlow's
employment by the Company in any and all capacities shall terminate and, except
as otherwise required by applicable law or as provided for in this Agreement,
Marlow relinquishes all remaining rights and benefits, if any, he may then have
as an employee of the Company.

         4. CONSIDERATION; CONTINUATION OF COMPENSATION AND BENEFITS.

                  (a) From the Date of this Agreement to September 1, 2001. So
long as Marlow has not breached any of his obligations under this Agreement, the
following compensation arrangements shall apply from the date of this Agreement
to September 1, 2001 (the "Base Employment Continuation Period") and shall
supercede the provisions of the Employment Agreement:

                           (1) Basic Salary. During the Base Employment
Continuation Period, Marlow will continue to receive his current basic salary
(that being an annualized basic salary of $500,000), payable on an every other
week basis or in more frequent installments as may be determined by the Company
in its sole discretion.

                           (2) Incentive Bonus. During the Base Employment
Continuation Period, Marlow will continue to receive all but $50,000 of the
incentive bonus that would have otherwise been payable to him during such period
had his employment under the Employment Agreement continued through September 1,
2001 and had the bonus plan in effect for Marlow on the date

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                                       -3-

   4



immediately preceding the date of this Agreement (the "Currently Effective Bonus
Plan") continued in effect through September 1, 2001. Such incentive bonus
payment (less the $50,000 reduction) shall be paid on such date as the bonus
would have been paid under the Currently Effective Bonus Plan were the Currently
Effective Bonus Plan to continue through September 1, 2001. In particular, any
bonus so earned would be expected to be paid in or about the month of September
2001. Marlow shall become entitled to receive the $50,000 portion of the
incentive bonus which is not to be paid under this Section 4(a)(2) (the "$50,000
Supplemental Incentive Bonus Amount") but only if the conditions to receipt of
the $50,000 Supplemental Incentive Bonus Amount, as set forth in Section 4(g)
hereof, are satisfied.

                           (3) Automobile. During the Base Employment
Continuation Period, Marlow shall continue to be entitled to receive a monthly
automobile allowance of $2,000 per month.

                           (4) Other Fringe Benefits. Marlow may be eligible for
benefit continuation in accordance with the provisions of COBRA and acknowledges
receipt of the required written notice in this regard. The Company will pay
Marlow's COBRA costs from June 15, 2001 through September 1, 2001. Any and all
other fringe benefits and benefit plan participations not specifically
referenced in this Section 4 shall cease on June 15, 2001.

                  (b) If Marlow Timely Delivers an Extension Notice. So long as
Marlow has not breached his obligations under this Agreement and if Marlow
timely delivers an Extension Notice, the following compensation arrangements
shall apply and shall supercede the provisions of the Employment Agreement, and
the provisions of Section 4(c) hereof shall not be applicable (it being
understood that the provisions of this Section 4(b) and the provisions of
Section 4(c) hereof shall be mutually exclusive such that if one of such
subsections applies, the other shall not):

                           (1) Basic Salary. During the period from September 1,
2001 and September 15, 2001 (the "Extended Employment Continuation Period"),
Marlow will continue to receive his current basic salary (that being an
annualized basic salary of $500,000), payable on the same type of pay period
schedule as was in effect during the Base Employment Continuation Period. Marlow
agrees that, after the end of the Extended Employment Continuation Period, he
shall not be entitled to, and waives any and all right to, any additional basic
salary including any basic salary which would otherwise be payable under and
pursuant to the Employment Agreement and any and all other basic salary payments
of any kind.

                           (2) No Incentive Bonus. Marlow agrees that both
during the Extended Employment Continuation Period and thereafter, he shall not
be entitled to, and waives any and all right to, any incentive bonuses (other
than the incentive bonus payable under Section 4(a) hereof with respect to the
Base Employment Continuation Period), including without limitation any bonuses
that may relate to the second half of the Company's fiscal year which commenced
February 4, 2001, any bonuses which would otherwise be payable under and
pursuant to the Employment Agreement and any and all other bonuses of any kind.

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                                       -4-

   5



                           (3) Automobile. With respect to the Extended
Employment Continuation Period, Marlow shall be entitled to receive an
additional automobile allowance of $1,000. Marlow agrees that, after the end of
the Extended Employment Continuation Period, he shall not be entitled to, and
waives any and all right to, any additional automobile allowance payments,
including any automobile allowance payments which would otherwise be payable
under and pursuant to the Employment Agreement and any and all other automobile
allowance payments of any kind.

                           (4) Stock Options. As more particularly described in
Section 5 hereof, because Marlow's employment extends through September 15, 2001
if Marlow timely delivers the Extension Notice, it would then be anticipated
that, in accordance with their terms, (i) a portion of each of the 30,000 Share
Option Agreement and the 220,000 Share Option Agreement would vest on September
6, 2001, (ii) such vested portions would be exercisable until December 15, 2001
and (iii) because Marlow's employment would terminate on September 15, 2001, the
balance of the options represented by such stock option agreements would not
vest in any respect as of such Applicable Termination Date and, it is
specifically agreed that, as of such Applicable Termination Date, such options
will terminate and become void.

                  (c) If Marlow Does Not Timely Deliver an Extension Notice. So
long as Marlow has not breached his obligations under this Agreement and if
Marlow does not timely deliver an Extension Notice, the following compensation
arrangements shall apply and shall supercede the provisions of the Employment
Agreement, and the provisions of Section 4(b) hereof shall not be applicable (it
being understood that the provisions of this Section 4(c) and the provisions of
Section 4(b) hereof shall be mutually exclusive such that if one of such
subsections applies, the other shall not):

                           (1) Basic Salary. After the end of the Base
Employment Continuation Period and through and until September 1, 2002, Marlow
will continue to receive an amount equal to his current basic salary (that being
an annualized basic salary of $500,000), payable on an every other week basis or
in more frequent installments as may be determined by the Company in its sole
discretion.

                           (2) Incentive Bonus. After the end of the Base
Employment Continuation Period and through and until September 1, 2002, Marlow
will continue to receive the incentive bonus that would have otherwise been
payable to him had his employment under the Employment Agreement continued from
the end of the Base Employment Continuation Period through September 1, 2002 and
had the bonus plan in effect for Marlow on the date immediately preceding the
date of this Agreement (the "Currently Effective Bonus Plan") continued in
effect during the period from the end of the Base Employment Continuation Period
through September 1, 2002. Such bonus payments shall be paid on such dates as
the bonuses would have been paid under the Currently Effective Bonus Plan were
the Currently Effective Bonus Plan to continue from the end of the Base
Employment Continuation Period through September 1, 2002. In particular, any
bonuses so earned would be expected to be paid in or about the months of March
2002 and September 2002.

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   6


                           (3) Automobile. After the end of the Base Employment
Continuation Period and through and until September 1, 2002, Marlow shall
continue to be entitled to receive an amount equal to his monthly automobile
allowance of $2,000 per month.

                           (4) Other Fringe Benefits. Marlow may continue to be
eligible for benefit continuation after the end of the Base Employment
Continuation Period in accordance with the provisions of COBRA and acknowledges
receipt of the required written notice in this regard. The Company will pay
Marlow's COBRA costs from September 1, 2001 through September 1, 2002. Any
election by Marlow to continue COBRA benefits after September 1, 2002 shall be
subject to Marlow's payment of the COBRA costs associated with such
continuation. As provided in Section 4(a)(4) hereof, any and all other fringe
benefits and benefit plan participations not specifically referenced in this
Section 4 shall cease on June 15, 2001.

                           (5) Stock Options. As more particularly described in
Section 5 hereof, because Marlow's employment extends through only September 1,
2001 if Marlow does not timely deliver the Extension Notice, none of the options
represented by either the 30,000 Share Option Agreement or the 220,000 Share
Option Agreement would vest (because employment would have terminated before the
first vesting date of September 6, 2001) and thus it is specifically agreed that
all of the options represented by such stock option agreements would not vest in
any respect as of such Applicable Termination Date and, as of such Applicable
Termination Date, such options will terminate and become void.

                  (d) Reimbursements and Advances. Marlow has advised the
Company that he has appropriate substantiation and can prepare appropriate
expense reports for certain reasonable expenditures incurred in connection with
his employment by the Company through the date of this Agreement. If, on or
before August 1, 2001 and in accordance with the Company's requirements and
policies for expense substantiation and expense reports, Marlow submits expense
reports substantiating such expenditures, the Company shall reimburse Marlow for
such expenditures on or before September 1, 2001. Marlow shall not be entitled
to any other reimbursements or advances for expenses incurred by Marlow in the
performance of his duties under the Employment Agreement or, except as specified
in Section 9 hereof, under this Agreement.

                  (e) Relocation Expenses and Commuting Expenses. Marlow
acknowledges that he has already received all relocation expenses and commuting
expenses to which he may have been entitled under the Employment Agreement or
otherwise and shall be entitled to no further relocation expenses and no further
commuting expenses.

                  (f) Discount on Clothing. From and after the applicable
Termination Date under this Agreement (which date shall be September 1, 2001 if
Marlow does not deliver the Extension Notice to the Company on or before August
25, 2001 and shall be September 15, 2001 if Marlow delivers the Extension Notice
to the Company on or before August 25, 2001), Marlow shall no longer be entitled
to the currently existing Company-wide employee benefit which provides a 50%
discount on purchases made at Company-owned stores.

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   7


                  (g) $50,000 Supplemental Incentive Bonus Amount. In exchange
for Marlow's agreement to execute and the execution of the additional release
attached hereto as Exhibit A when and as contemplated by Section 12(b) hereof
and compliance with the remaining terms of this Agreement and Exhibit A, the
Company agrees to pay to Marlow the $50,000 Supplemental Incentive Bonus Amount,
which shall be paid within ten days after the Applicable Termination Date. Such
payment shall be contingent on receipt by the Company of the executed additional
release attached hereto as Exhibit A.

                  (h) Withholding and Taxes. All basic salary payments,
incentive bonus payments, auto allowance payments and other payments made to
Marlow pursuant to this Agreement shall be subject to any and all applicable
income tax withholding, FICA taxes, FUTA taxes and any other required deductions
and withholdings.

                  (i) No Other Entitlements; Good and Complete Consideration.

                           (1) Marlow agrees that he is not otherwise entitled
to payment or other benefit under any plans or policies of the Company,
including, but not limited to, any severance plan.

                           (2) Marlow covenants and agrees that the amounts and
considerations set forth in this Section 4 and Section 6 hereof are in full and
complete satisfaction of any and all sums owed to Marlow, if any, by the Company
and constitute good and complete consideration for his release contained in
Section 12 hereof and obligations under Sections 2, 3, 7, 8, 9, 10, 11, 15 and
16 hereof. Marlow agrees that the total of such consideration is in addition to
that, if any, which he might otherwise be entitled.

         5. STOCK OPTIONS.

                  (a) Acknowledgments.

                           (1) The parties acknowledge that, under the 30,000
Share Option Agreement and subject to the terms and conditions thereof, (i) as a
result of the Company's recent 3 for 2 stock split, the 30,000 options covered
by the 30,000 Share Option Agreement which had an exercise price of $22.96 per
share were adjusted to be an aggregate of 45,000 options with an exercise price
of $15.31 per share, and (ii) as adjusted and subject to the other provisions of
the 30,000 Share Option Agreement, 15,000 of such options are scheduled to vest
on September 6, 2001 (the "First Tranche of 15,000"), 15,000 of such options are
scheduled to vest on September 6, 2002 (the "Second Tranche of 15,000") and the
remaining 15,000 of such options are scheduled to vest on September 6, 2003 (the
"Third Tranche of 15,000").

                           (2) The parties acknowledge that, under the 220,000
Share Option Agreement and subject to the terms and conditions thereof, (i) as a
result of the Company's recent 3 for 2 stock split, the 220,000 options covered
by the 220,000 Share Option Agreement which had

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an exercise price of $34.44 per share were adjusted to be an aggregate of
330,000 options with an exercise price of $22.96 per share, and (ii) as adjusted
and subject to the other provisions of the 220,000 Share Option Agreement,
110,000 of such options are scheduled to vest on September 6, 2001 (the "First
Tranche of 110,000"), 110,000 of such options are scheduled to vest on September
6, 2002 (the "Second Tranche of 110,000") and the remaining 110,000 of such
options are scheduled to vest on September 6, 2003 (the "Third Tranche of
110,000").

                  (b) If Marlow Timely Delivers an Extension Notice. So long as
Marlow has not breached his obligations under this Agreement and if Marlow
timely delivers an Extension Notice, the parties acknowledge and agree that the
provisions of this Section 5(b) shall apply with respect to the stock options
covered by both the 30,000 Share Option Agreement and the 220,000 Share Option
Agreement, and the provisions of Section 5(c) shall not be applicable (it being
understood that the provisions of this Section 5(b) and the provisions of
Section 5(c) hereof shall be mutually exclusive such that if one of such
subsections applies, the other shall not):

                           (1) Because Marlow will be continuing as an employee
of the Company during the Extended Employment Continuation Period, the First
Tranche of 15,000, in accordance with and subject to the terms of the 30,000
Share Option Agreement, is expected to (i) vest in full on September 6, 2001,
and (ii) be exercisable in accordance with the terms and conditions of the
30,000 Share Option Agreement at any time commencing on September 6, 2001 and
ending December 15, 2001 (i.e., three months after the termination of Marlow's
employment with the Company on the Applicable Termination Date).

                           (2) Because Marlow's employment relationship with the
Company will terminate on September 15, 2001, any and all rights to the options
covered by the Second Tranche of 15,000 and any and all rights to the options
covered by the Third Tranche of 15,000 will terminate in accordance with and
subject to the terms of the 30,000 Share Option Agreement, because no portion of
the options comprising the Second Tranche of 15,000 and no portion of the
options comprising the Third Tranche of 15,000 will have vested or will have
become exercisable as of that date. As such, Marlow confirms that, effective as
of September 15, 2001 and as a result of the termination as of such date, (i) he
shall be considered to have relinquished any and all rights he may then have,
may have had or in the future would have had under the options comprising the
Second Tranche of 15,000 and under the options comprising the Third Tranche of
15,000 and (ii) the options comprising the Second Tranche of 15,000 and the
options comprising the Third Tranche of 15,000 shall become null and void in all
respects.

                           (3) Because Marlow will be continuing as an employee
of the Company during the Extended Employment Continuation Period, the First
Tranche of 110,000, in accordance with and subject to the terms of the 220,000
Share Option Agreement, is expected to (i) vest in full on September 6, 2001,
and (ii) be exercisable in accordance with the terms and conditions of the
220,000 Share Option Agreement at any time commencing on September 6, 2001 and
ending December 15, 2001 (i.e., three months after the termination of Marlow's
employment with the Company on the Applicable Termination Date).

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   9


                           (4) Because Marlow's employment relationship with the
Company will terminate on September 15, 2001, any and all rights to the options
covered by the Second Tranche of 110,000 and any and all rights to the options
covered by the Third Tranche of 110,000 will terminate in accordance with and
subject to the terms of the 220,000 Share Option Agreement, because no portion
of the options comprising the Second Tranche of 110,000 and no portion of the
options comprising the Third Tranche of 110,000 will have vested or will have
become exercisable as of that date. As such, Marlow confirms that, effective as
of September 15, 2001 and as a result of the termination as of such date, (i) he
shall be considered to have relinquished any and all rights he may then have,
may have had or in the future would have had under the options comprising the
Second Tranche of 110,000 and under the options comprising the Third Tranche of
110,000 and (ii) the options comprising the Second Tranche of 110,000 and the
options comprising the Third Tranche of 110,000 shall become null and void in
all respects.

                  (c) If Marlow Does Not Timely Deliver an Extension Notice. So
long as Marlow has not breached his obligations under this Agreement and if
Marlow does not timely deliver an Extension Notice, the parties acknowledge and
agree that the provisions of this Section 5(c) shall apply with respect to the
stock options covered by both the 30,000 Share Option Agreement and the 220,000
Share Option Agreement, and the provisions of Section 5(b) hereof shall not be
applicable (it being understood that the provisions of this Section 5(c) and the
provisions of Section 5(b) hereof shall be mutually exclusive such that if one
of such subsections applies, the other shall not):

                           (1) Because Marlow's employment relationship with the
Company will terminate on September 1, 2001, any and all rights to the options
covered by the 30,000 Share Option Agreement will terminate in accordance with
and subject to the terms of the 30,000 Share Option Agreement, because no
portion of any of the options under the 30,000 Share Option Agreement will have
vested or will have become exercisable as of that date. As such, Marlow confirms
that, effective as of September 1, 2001 and as a result of his termination as of
such date, (i) he shall be considered to have relinquished any and all rights he
may then have, may have had or in the future would have had under the options
covered by the 30,000 Share Option Agreement and (ii) all of the options covered
by the 30,000 Share Option Agreement, including the First Tranche of 15,000, the
Second Tranche of 15,000 and the Third Tranche of 15,000 shall become null and
void in all respects.

                           (2) Because Marlow's employment relationship with the
Company will terminate on September 1, 2001, any and all rights to the options
covered by the 220,000 Share Option Agreement will terminate in accordance with
and subject to the terms of the 220,000 Share Option Agreement, because no
portion of any of the options under the 220,000 Share Option Agreement will have
vested or will have become exercisable as of that date. As such, Marlow confirms
that, effective as of September 1, 2001 and as a result of his termination as of
such date, (i) he shall be considered to have relinquished any and all rights he
may then have, may have had or in the future would have had under the options
covered by the 220,000 Share Option Agreement and (ii) all of the options
covered by the 220,000 Share Option Agreement, including the First Tranche

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   10


of 110,000, the Second Tranche of 110,000 and the Third Tranche of 110,000 shall
become null and void in all respects.

         6. PURSUIT OF CLAIM AND LIMITED INDEMNIFICATION WITH RESPECT TO DORADO
DISPUTE.

                  (a) The parties acknowledge that a dispute exists between
Dorado of Naples ("Dorado") and Marlow relative to a contract under which
Marlow, subject to specified terms and conditions, was to purchase certain real
estate from Dorado and that counsel for Dorado has advised the law firm of Smoot
Adams (counsel for Marlow and his wife) that suit had been filed regarding this
matter. Marlow is seeking return of a $100,000 deposit that he had given to
Dorado and Dorado has asserted that the deposit has been forfeited as liquidated
damages.

                  (b) The Company agrees to pay Marlow's reasonable costs and
expenses incurred with the Smoot Adams firm in defending against Dorado's
position that it is entitled to retain the entire deposit and in pursuing
Marlow's claim that he is entitled to a return of the deposit, it being
understood that such agreement to pay reasonable costs and expenses shall not
extend to costs and expenses in defending any other claims asserted by Dorado.
Although Marlow and the Company believe that Marlow should be entitled to a
return of the full deposit under the terms of the applicable real estate
contract and intend to vigorously defend Dorado's claim to the contrary and to
vigorously pursue Marlow's claim for a return of the deposit, the Company agrees
to indemnify Marlow for any portion of the deposit that may not be returned by
Dorado after the dispute has been finally resolved either by way of final court
action, binding arbitration or settlement; provided however that the Company's
liability to Marlow with respect to this indemnity for any unreturned deposit or
any other liability of Marlow under the applicable real estate contract shall
under no circumstances exceed $100,000.

                  (c) Because of the Company's agreement to pay the reasonable
costs and expense of litigation and to provide Marlow with this limited
indemnity, it is agreed that the Company, at its option, shall have the right to
take the primary role in directing the defense/pursuit of this dispute from the
perspective of Marlow's interest, with Marlow also providing input and having
the right to consult in good faith. In addition, provided that any settlement
relates only to the payment/retention of money and does not require any payment
of money by Marlow (other than forfeiture of all or a portion of the deposit),
the Company may require that such settlement be entered into and effectuated,
after consultation in good faith with Marlow.

         7. RETURN OF COMPANY ASSETS AND PROPERTY. As promptly as possible
following the execution of this Agreement, Marlow will return to the Company (1)
all company credit cards and company calling cards in Marlow's possession, (2)
all keys and security badges providing access to any of the Company's facilities
and all Company owned equipment in Marlow's possession, and (3) all documents,
papers, information and software remaining in his possession that he obtained
from the Company, or that belong to the Company, without retaining any copies
thereof.

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   11


         8. REMOVAL OF PERSONAL PROPERTY FROM THE COMPANY'S OFFICES. The Company
acknowledges that certain property belonging to Marlow may remain physically
located at the Company's offices, including without limitation, certain office
furniture, computer equipment and wall hangings. The Company agrees to permit
Marlow, during normal business hours and upon reasonable notice to a senior
officer of the Company and for a period ending on June 30, 2001, to remove or
arrange for the removal of such personal effects.

         9. TRANSITION EMPLOYMENT.

                  (a) From the date hereof, through and including the Applicable
Termination Date, and for no additional compensation other than provided in this
Agreement, Marlow shall continue as an employee of the Company under common law
rules and, as such, shall make himself available to provide such advice and
assistance as the Company may from time to time during such period reasonably
request in order to effectuate a smooth transition of management associated with
Marlow's departure from the Company on the Applicable Termination Date; provided
that such services shall not exceed, without the consent of Marlow, twenty five
hours from the date of this Agreement until September 1, 2001 (and an additional
five hours if the Applicable Termination Date is extended in the manner provided
herein to September 15, 2001); and provided further that all such services shall
be provided by way of communications directly with Marvin Gralnick or Scott
Edmonds or as otherwise may be authorized in writing by Marvin Gralnick or Scott
Edmonds. During the Base Employment Continuation Period and any Extended
Employment Continuation Period, the Company shall have the right to control and
direct Marlow not only as to the results to be accomplished by Marlow but also
as to the detail and means by which such results are accomplished by Marlow. The
parties acknowledge that, among other matters, Marlow's services as an employee
are being continued until the Applicable Termination Date because of his past
involvement in helping to coordinate efforts concerning the Company's
relationships with the factories utilized to assemble the Company's merchandise
and fabric purchases and warehousing for the fabric and because of the
importance of such relationships, merchandise and inventories to the continued
success of the Company.

                  (b) The Company anticipates that the services to be rendered
by Marlow from June 15, 2001 through the Applicable Termination Date will be
performed away from the Company's Ft. Myers offices with communications provided
principally by way of telephone; however, Marlow agrees to provide such services
at the Ft. Myers offices of the Company if expressly requested to do so by
senior executives of the Company and if his reasonable costs of travel to Ft.
Myers are paid by the Company in accordance with the Company's expense
reimbursement policies. Otherwise, in the performance of such services, Marlow
shall not be required to travel.

         10. PROPERTY RIGHTS AND USE OR DISCLOSURE OF CONFIDENTIAL INFORMATION;
NONSOLICITATION. Marlow shall continue to be bound in all respects by the
provisions of the Employment Agreement relating to Confidentiality as contained
in Section 10 thereof and the provisions of the Employment Agreement relating to
Nonsolicitation as contained in Section 11 thereof; and notwithstanding the
termination of the Employment Agreement in all other respects, such

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Sections 10 and 11 shall continue in force and effect as separately enforceable
agreements as if such provisions were contained herein. Such continuing
obligations shall be in addition to Marlow's obligations arising under
applicable law including without limitation the obligations relating to trade
secrets arising under Chapter 688, Florida Statutes. For purposes of the
continuing effectiveness of the provisions of Section 11 of the Employment
Agreement, Marlow's employment under Section 9 of this Agreement shall be
considered continued employment of Marlow by the Company through the end of the
Base Employment Continuation Period or the Extended Employment Continuation
Period, as the case may be, and the additional two (2) year restriction period
contemplated by the provisions of Section 11 of the Employment Agreement shall
be considered to begin as of the applicable Termination Date (September 1, 2001
or September 15, 2001, as the case may be).

         11. NON-DISPARAGEMENT; PUBLIC DISCLOSURE.

                  (a) Marlow covenants and agrees that he will not make any
disparaging remarks, whether orally or in writing, about the Company, its
subsidiaries and/or related entities, its products, services, officers, Board of
Directors, managers, supervisors, and employees, to any persons whatsoever. The
obligation under this Section includes, but is not limited to, refraining from
making any disparaging, degrading or demeaning remarks or casting any aspersions
on the Company which are reasonably likely to have a harmful effect on its
reputation. Marlow will not communicate with the press or make any press release
or other similar public disclosure regarding the circumstances leading up to
this Agreement except after consulting in good faith with the Company.

                  (b) Neither the Company nor any of its directors or senior
officers will issue any formal Company sponsored release or formal Company
sponsored communication with the press, or issue any press release or other
similar formal public disclosure regarding the circumstances leading up to this
Agreement, except after consulting in good faith with Marlow; provided however,
that nothing herein shall be deemed to prohibit the Company from making any
disclosure which is required in order to fulfill the Company's disclosure
obligations imposed by law.

         12. GENERAL RELEASES BY MARLOW; CONDITION TO SUBSEQUENT DELIVERY OF
GENERAL RELEASES BY THE COMPANY.

                  (a) Marlow, for himself, his heirs, personal representatives,
and assigns, does hereby remise, release and forever discharge the Company and
its respective officers, directors, employees, agents, shareholders, and
affiliates, including, but not limited to, the Company, its respective
predecessors, successors, assigns, heirs, executors, administrators, the
Company's benefit plans, including the 401(k) Plan, the benefit plan's trustees,
administrators, and all other fiduciaries, employees, and their agents
(collectively, "Releasees"), of and from any and all manner of actions and
causes of action, suits, debts, claims, and demands whatsoever at law or in
equity, known or unknown, actual or contingent, which Marlow and his heirs,
executors, administrators, agents, distributees, beneficiaries, successors in
interest and assignees, ever had or now have or in the future may have, by
reason of any matter, cause or thing whatsoever from the beginning of the world
to the day of the date of these presents. The Release by Marlow includes, but is
not limited to the following

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(except that such Release shall not operate to release the Company from its
express obligations under this Agreement):

                           (1) Any and all claims for salary, wages,
compensation, monetary relief, employment benefits, including but not limited
to, any claims for benefits under, or contribution to, an associate benefits
plan, profit sharing or any retirement plan, capital stock, bonuses, merit and
longevity increases, and all other benefits of all kind, earnings, backpay,
front pay, liquidated, and other damages, interest, attorney's fees and costs,
compensatory damages, punitive damages, damage to character, damage to
reputation, emotional distress, mental anguish, depression, injury, impairment
in locating employment, financial loss, pain and suffering, injunctive and
declaratory relief arising from his employment with the Company or his
separation thereof.

                           (2) Any and all claims growing out of, resulting
from, or connected in any way to Marlow's employment with the Company, and/or
the separation thereof, including any and all claims for discrimination,
including but not limited to discrimination on the basis of race, national
origin, color, religion, handicap or disability, age, sex, harassment of any
kind, including sexual harassment, retaliation, whistleblowing, breach of
contract, rescission, promises, claims under the Employee Retirement Income
Security Act of 1974 ("ERISA") [29 U.S.C. Sections 1001-1461], as amended,
including ERISA Section 510 and any claims to benefits under any and all bonus,
severance or any other similar plan sponsored by the Company now and hereafter,
torts of all kinds, including but not limited to, misrepresentation, negligent
or otherwise, fraud, defamation, slander, libel, worker's compensation
retaliation, interference with an advantageous business relationship, negligent
employment, including negligent hiring, negligent retention, and negligent
supervision, discrimination, claims or rights under state and federal
whistleblower legislation, including Sections 448.101-448.105, Florida Statutes,
as amended, the Consolidated Omnibus Budget Reconciliation Act of 1985 [Pub. L.
99-509], as amended ("COBRA"), the Florida Health Insurance Coverage
Continuation Act ("FHICCA"), the Family and Medical Leave Act [29 U.S.C.
Sections 2601-2654], as amended ("FMLA"), the Americans with Disabilities Act
[42 U.S.C. Sections 12101-12213], as amended ("ADA"), the Age Discrimination in
Employment Act, as amended ("ADEA"), the Polygraph Protection Act, the Internal
Revenue Code [Title 26, U.S.C.], as amended, the Older Workers Benefit
Protection Act [29 U.S.C. Section 621-630], as amended ("OWBPA"), the Equal Pay
Act [29 U.S.C. Section 206(d)], as amended ('EPA"), Title VII of the Civil
Rights Act of 1964 [42 U.S.C. Section 2000e-2000e-17], as amended ("Title VII"),
the Florida Civil Rights Act of 1992 [Sections 760.02-760.11, Fla. Stats.], as
amended ("FCRA"), the Uniformed Services Employment and Reemployment Rights Act
of 1994 [38 U.S.C. Sections 4301-4333] ("USERRA"), the National Labor Relations
Act [29 U.S.C. Sections 151-169], as amended ("NLRA"), the Occupational Safety
and Health Act [29 U.S.C. Sections 651-678], as amended ("OSHA"), the Fair Labor
Standards Act [29 U.S.C. Sections 201-219], as amended ("FLSA"), retaliation
pursuant to Section 440.205 Florida Statutes, and any other claim of any kind.

                           (3) Marlow agrees that if he violates this Agreement
by suing Releasees with respect to any matter for which he has herein released
the Company, he will pay all costs,

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damages, and expenses of defending the suit incurred by Releasees or those
associated with Releasees, including reasonable attorneys' fees and all further
costs and fees.

                  (b) In exchange for Marlow's agreement to execute the release
attached hereto as Exhibit A on or shortly after the applicable Termination
Date, and provided such release is executed and delivered to the Company on or
shortly after the applicable Termination Date and subject to compliance with the
remaining terms of this Agreement and the terms of the release set forth in
Exhibit A, the Company shall pay the $50,000 Supplemental Incentive Bonus Amount
as more specifically provided in Section 4(g) hereof and shall execute and
deliver the release attached hereto as Exhibit B.

         13. ENFORCEMENT; ATTORNEYS' FEES. If, within 10 days after demand to
comply with the obligations of one of the parties to this Agreement served in
writing on the other, compliance or reasonable assurance of compliance is not
forthcoming, and the other party engages the services of an attorney to enforce
rights under this Agreement, the prevailing party in any action shall be
entitled to recover all reasonable costs and expenses (including reasonable
attorneys' fees before and at trial and in appellate proceedings).

         14. NOTICES. Any notice, request, demand, consent, approval,
instruction or other communication required or permitted under this Agreement
(collectively a "notice") shall be in writing and shall be sufficiently given if
delivered in person, sent by telex or telecopier, sent by a reputable overnight
courier service or sent by registered or certified mail, postage prepaid, as
follows:

                      If to Marlow:       Tedford Marlow
                                          553 Weed Street
                                          New Caanan, Connecticut 06840
                                          Telecopy: (203) 966-6180_________



                      If to the Company:  Chico's FAS, Inc.
                                          11215 Metro Parkway
                                          Ft. Myers, FL 33912
                                          Attn: Marvin J. Gralnick
                                          President and Chief Executive Officer
                                          Telecopy: (941) 277-7035

Any notice which is delivered personally in the manner provided herein shall be
deemed to have been duly given to the party to whom it is directed upon actual
receipt by such party (or by such party's agent for notices hereunder). Any
notice which is addressed and mailed in the manner herein provided shall be
presumed to have been duly given to the party to whom it is addressed at the
close

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of business, local time of the recipient, on the fifth day after the date it is
so placed in the mail. Any notice which is telexed or telecopied in the manner
provided herein shall be presumed to have been duly given to the party to whom
it is directed upon confirmation of such telex or telecopy. Any notice which is
sent by a reputable overnight courier service in the manner provided herein
shall be presumed to have been duly given to the party to which it is addressed
at the close of business on the next day after the day it is deposited with such
courier service.

         Any person wishing to change the person or address to whom notices are
to be given may do so by complying with the foregoing notice provisions.

         15. OTHER FUTURE COOPERATION. It is agreed and understood that,
notwithstanding the other provisions of this Agreement, Marlow will continue
after the Employment Continuation Period to make himself available and cooperate
in any reasonable manner at reasonable times in providing assistance to the
Company in concluding any matters which are presently pending but only to the
extent that Marlow was directly involved in such matter while in the Company's
employ. In securing such cooperation, the Company will be reasonable in
considering other commitments and time constraints that Marlow may have at the
time such assistance is requested. It is understood that such cooperation and
assistance shall be without additional compensation to Marlow. Should Marlow
ever receive notice of a subpoena in the future or other attempt to talk with
him or attempt to obtain his testimony relating to or regarding the Company in
any way, Marlow agrees to notify counsel for the Company, Gary I. Teblum, 101 E.
Kennedy Boulevard, Suite 2700, Tampa, Florida 33602, (813) 227-7457 (phone) or
(813) 229-6553 (fax) and to provide a copy of any subpoena or request, within
two (2) calendar days of receipt of such notice. Further, Marlow agrees to and
authorizes, at the Company's expense, the assertion of an objection or
objections and a motion for protective order, motion to quash or other legal
proceeding ("legal proceeding") in order that all legal rights of the Company,
including those set forth in the Agreement, may be fully protected. Marlow
agrees that he will not respond to any attempt to talk with him or obtain his
testimony, should a legal proceeding be asserted, until such legal proceeding
has been finally determined. Marlow further agrees that a representative, in
behalf of, chosen by, and at the expense of the Company, will have the
opportunity to participate fully during any testimony, statements or
communication by him in any proceeding relating to the Company, including
raising objections to any examination, examining witnesses, and the right to
have a record made by a court reporter or other means of the testimony,
statements or communication or objections. Within the restrictions set forth in
this Section 15, Marlow shall provide truthful testimony to or before a court or
regulatory body.

         16. WAIVER OF REINSTATEMENT/COVENANT NOT TO RE-APPLY. As part of the
settlement, Marlow specifically waives any present and future claim to
reinstatement or employment with the Company at any time in the future. Marlow
further specifically agrees, as a condition of his receipt and retention of the
sums and other consideration provided for herein, not to seek employment with
the Company at any time in the future.

         17. SUCCESSORS AND ASSIGNS; APPLICABLE LAW. This Agreement shall be
binding upon and inure to the benefit of Marlow and his heirs, administrators,
representatives, executors,

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   16


successors and assigns, and shall be binding upon and inure to the benefit of
Releasees and each of them, and to their respective heirs, administrators,
representatives, executors, successors and assigns. This Agreement shall be
construed and interpreted in accordance with the laws of the state of Florida.

         18. COMPLETE AGREEMENT. This Agreement shall constitute the full and
complete agreement between the parties concerning its subject matter and fully
supersedes any and all other prior agreements or understandings between the
parties regarding the subject matter hereto. This Agreement shall not be
modified or amended except by a written instrument signed by both Marlow and an
authorized representative of the Company.

         19. SEVERABILITY. The unenforceability or invalidity of any particular
provision of this Agreement shall not affect its other provisions and to the
extent necessary to give such other provisions effect, they shall be deemed
severable.

         20. WAIVER OF BREACH; SPECIFIC PERFORMANCE. The waiver of a breach of
any provision of this Agreement shall not operate or be construed as a waiver of
any other breach. Each of the parties to this Agreement will be entitled to
enforce its rights under this Agreement specifically to recover damages by
reason of any breach of any provision of this Agreement and to exercise all
other rights existing in its favor. The parties hereto agree and acknowledge
that money damages may not be an adequate remedy for any breach of any of the
provisions of this Agreement and that any party may in its sole discretion apply
to any court of law or equity of competent jurisdiction for specific performance
and/or injunctive relief in order to enforce or prevent any violations of any of
the provisions of this Agreement.

         21. NO ADMISSIONS OF LIABILITY. This Agreement shall not in any way be
construed as an admission by the Company or Marlow of any improper actions or
liability whatsoever as to one another, and each specifically disclaims any
liability to or improper actions against the other or any other person, on the
part of itself, its employees or its agents.

         22. REVERSION OF THE PROCEEDS. Marlow covenants and agrees that all
monies received under this Agreement will become immediately due and payable to
the Company if Marlow should ever disavow this Agreement, breach any term of
this Agreement or if the Agreement is found to be unenforceable.

         23. ACKNOWLEDGMENT/VOLUNTARY SIGNING OF AGREEMENT. Marlow warrants,
represents, and agrees that he has been encouraged to seek advice from anyone of
his choosing regarding this Agreement, including his attorney, accountant or tax
advisor prior to his signing it; that this Agreement represents written notice
to do so; and that he has been given the opportunity and sufficient time to seek
such advice; and that he fully understands the meaning and contents of this
Agreement. MARLOW UNDERSTANDS THAT HE HAD THE RIGHT TO TAKE UP TO TWENTY-ONE
(21) DAYS TO CONSIDER WHETHER OR NOT HE DESIRES TO ENTER INTO THIS AGREEMENT.
Marlow acknowledges that he has completely read this Agreement and that prior to
signing he has had sufficient opportunity to examine it and ask questions and
consult

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   17


with his attorneys and other persons of his own choosing prior to entering into
this Agreement. Marlow further acknowledges that this Agreement is being signed
voluntarily and without coercion or duress and with full understanding of its
terms and effects. Marlow has not been promised any benefit except for the
mutual consideration set out herein and there are no other understandings or
oral/written agreements relating to the separation of his employment
relationship except those set out above. Marlow specifically states that he is
executing this Agreement knowingly and voluntarily.

         24. ABILITY TO REVOKE AGREEMENT. MARLOW UNDERSTANDS THAT HE MAY REVOKE
THIS AGREEMENT BY NOTIFYING THE COMPANY IN WRITING OF SUCH REVOCATION WITHIN
SEVEN (7) DAYS OF HIS EXECUTION OF THIS AGREEMENT AND THAT THIS AGREEMENT IS NOT
EFFECTIVE UNTIL THE EXPIRATION OF SUCH SEVEN (7) DAYS. HE UNDERSTANDS THAT UPON
THE EXPIRATION OF SUCH SEVEN (7) DAY PERIOD THIS AGREEMENT WILL BE BINDING UPON
HIM AND HIS HEIRS, ADMINISTRATORS, REPRESENTATIVES, EXECUTORS, SUCCESSORS AND
ASSIGNS AND WILL BE IRREVOCABLE.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement, as
of the date first above written.

WITNESS:                               CHICO'S FAS, INC.

/s/ Scott Edmonds
- -----------------
/s/ Robin Martin                       By: /s/ Marvin J. Gralnick
- -----------------                          -------------------------------------
                                           Marvin J. Gralnick
                                           President and Chief Executive Officer


I UNDERSTAND THAT BY SIGNING THIS AGREEMENT, I AM GIVING UP RIGHTS I MAY HAVE. I
UNDERSTAND THAT I DO NOT HAVE TO SIGN THIS AGREEMENT.

WITNESS:
/s/ Traci Fields
- -----------------
/s/ Mary M. Curry                       /s/ Tedford Marlow
- -----------------                       -------------------------------
                                        Tedford Marlow



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   18



                                    EXHIBIT A
                                       TO
                  CONFIDENTIAL SEPARATION AND RELEASE AGREEMENT
                               WITH TEDFORD MARLOW
                        DATED AS OF _______________, 2001


                   GENERAL RELEASE AND DISCLAIMER ("RELEASE")

         In consideration of the promises and actions of CHICO'S FAS, INC., a
Florida corporation (the "Company") set out in the Confidential Separation and
Release Agreement entered into between the parties to this Release on _June __,
2001 (the "Agreement"), including without limitation Section 4(g) of the
Agreement, TEDFORD MARLOW ("Marlow") hereby remises, acquits, releases,
satisfies and discharges, on his own behalf and on behalf of anyone who could
claim by and through him, the Company, its predecessors and successors in
interest, assignees, parents, subsidiaries, divisions and related companies and
entities, and their past, present and future shareholders, officers, directors,
agents, attorneys, employees and representatives in their individual and
official capacities, and their heirs, and legal representatives and predecessors
and successors in interest and assigns (collectively "Releasees"), of and from
any and all claims and demands, past, present or future, known or unknown, and
all manner of action and actions, causes of action, suits, administrative
proceedings, debts, dues, sums of money, accounts, reckonings, bonds, bills,
specialties, covenants, contracts, controversies, agreements, promises,
variances, torts, trespasses, damages, judgments, executions, warranties, claims
and demands whatsoever, in law or in equity, which Marlow and his heirs,
executors, administrators, agents, distributees, beneficiaries, successors in
interest and assignees, ever had or now have or in the future may have, by
reason of any matter, cause or thing whatsoever from the beginning of the world
to the day of the date of these presents, including, but not limited to:

         (1) Any and all claims for salary, wages, compensation, monetary
relief, employment, benefits, including but not limited to any claims for
benefits under an employee benefit plan or any retirement plan, profit-sharing,
capital stock, bonuses, merit and longevity increases, commissions, and all
other benefits of all kind (other than as specifically recognized in Sections 4
and 6 of the Agreement), earnings, back pay, front pay, liquidated and other
damages, compensatory damages, punitive damages, damage to character, damage to
reputation, emotional distress, mental anguish, depression, injury, impairment
in locating employment, financial loss, pain and suffering, injunctive and
declaratory relief, interest, attorneys fees and costs, arising from his
employment with the Company or his separation thereof.

         (2) Any and all claims growing out of, resulting from, or connected in
any way to Marlow's alleged contractual relationship and/or employment with the
Company and/or the termination thereof, including any and all claims for
handicap or disability discrimination, age discrimination, religious
discrimination, sex discrimination, harassment of any kind, including sexual
harassment, retaliation, whistleblowing, breach of contract, rescission,
promises, claims under the Employee Retirement Income Security Act of 1974
("ERISA") [29 U.S.C. Sections 1001-1461], as

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   19


amended, including ERISA Section 510 and any claims to benefits under any and
all bonus, severance or any other similar plan sponsored by the Company now and
hereafter, torts of all kinds, including but not limited to, misrepresentation,
negligent or otherwise, fraud, defamation, slander, libel, worker's compensation
retaliation, interference with an advantageous business relationship, negligent
hiring, negligent retention, negligent supervision, discrimination, claims or
rights under state and federal whistleblower legislation including Section
448.101-448.105, Fla. Stats., as amended, the Consolidated Omnibus Budget
Reconciliation Act of 1985 [Pub. L. 99-509], as amended ("COBRA"), the Florida
Health Insurance Coverage Continuation Act ("FHICCA"), the Family and Medical
Leave Act [29 U.S.C. Sections 2601-2654], as amended ("FMLA"), the Americans
with Disabilities Act [42 U.S.C. Sections 12101-12213], as amended ("ADA"), the
Age Discrimination in Employment Act, as amended ("ADEA"), the Polygraph
Protection Act, the Internal Revenue Code [Title 26, U.S.C.], as amended, the
Older Workers Benefit Protection Act [29 U.S.C. Section 621-630], as amended
("OWBPA"), the Equal Pay Act [29 U.S.C. Section 206(d)], as amended ("EPA"),
Title VII of the Civil Rights Act of 1964 [42 U.S.C. Section 2000e-2000e-17],
as amended ("Title VII"), the Florida Civil Rights Act of 1992 [Sections
760.02-760.11, Fla. Stats.], as amended, the Uniformed Services Employment and
Reemployment Rights Act of 1994 [38 U.S.C. Sections 4301-4333] ("USERRA"), the
National Labor Relations Act [29 U.S.C. Sections 151-169], as amended ("NLRA"),
the Occupational Safety and Health Act [29 U.S.C. Sections 651-678], as amended
("OSHA"), the Fair Labor Standards Act [29 U.S.C. Sections 201-219], as amended
("FLSA"), retaliation pursuant to Section 440.205, Fla. Stats., and any other
claim of any kind.

         (3) As part of the settlement, Marlow specifically waives any present
and future claim to reinstatement or employment with the Company at any time in
the future and agrees never to apply for employment with the Company in the
future.

         (4) Marlow further specifically waives any rights of action and
administrative and judicial relief which he might otherwise have available in
the state and federal courts, including all common law claims and claims under
federal and state constitutions, statutes and regulations and federal executive
orders and county and municipal ordinances and regulations, as well as before
the Wage and Hour Division or any other division or department of the U.S.
Department of Labor, the Equal Employment Opportunity Commission, the Florida
Commission on Human Relations, the Lee County Office of Equal Opportunity, the
National Labor Relations Board or any other federal, state or local
administrative agency. Marlow promises never to file, participate in or
prosecute a lawsuit, complaint, charge or other proceeding asserting any claims
that are released by this Release. Marlow further agrees not to voluntarily
participate in any employment related claim brought by any other party against
the Releasees.

         In consideration of the monies provided for in Section 4(g) of the
Agreement and other good and valuable consideration, Marlow represents and
warrants that all the terms of this Release shall be complied with. Should
Marlow breach or act in noncompliance with or in default of this Release (except
insofar as it relates to any claim under the ADEA), the Company may recover
damages from Marlow, along with all costs, including attorneys' fees incurred by
the Company in recovering such damages and in enforcing this Release, with the
Company maintaining all other rights, remedies

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   20


and/or causes of action otherwise available at law or in equity. It is
understood that the Company shall be entitled to recover, as a part of its
costs, any attorneys fees incurred by it in connection with any claim, or type
of claim, released by this Release. The parties hereto acknowledge that any
breach of this Release shall entitle the non-breaching party not only to
damages, but to injunctive relief to enjoin the actions of the breaching party,
as well as attorney's fees and costs.

         MARLOW SHALL HAVE A REASONABLE TIME PERIOD UP TO TWENTY-ONE (21) DAYS
FROM RECEIPT OF THIS DOCUMENT TO ACCEPT THE TERMS OF THIS RELEASE. MARLOW MAY
ACCEPT AND SIGN THIS RELEASE BEFORE EXPIRATION OF THE TWENTY-ONE DAY TIME
PERIOD, BUT HE IS NOT REQUIRED TO DO SO BY THE COMPANY. MARLOW HAS BEEN ADVISED
TO CONSULT WITH AN ATTORNEY OF HIS OWN CHOOSING AND HAS CONSULTED WITH LEGAL
COUNSEL AND OTHER PERSONS OF HIS OWN CHOOSING REGARDING THIS MATTER PRIOR TO THE
EXECUTION OF THIS RELEASE.

         AFTER SIGNING THIS RELEASE, MARLOW MAY REVOKE HIS ACCEPTANCE WITHIN
SEVEN (7) DAYS BY PROVIDING WRITTEN NOTICE OF REVOCATION AS PROVIDED IN
PARAGRAPH 13 OF THE AGREEMENT. THIS RELEASE WILL BECOME EFFECTIVE ON THE TENTH
DAY FOLLOWING ITS SIGNATURE BY ALL OF THE PARTIES, IT BEING RECOGNIZED THAT THE
COMPANY HAS NO OBLIGATION TO MAKE ANY PAYMENT PURSUANT TO SECTION 4(G) OF THE
AGREEMENT UNTIL THIS RELEASE BECOMES EFFECTIVE IN ACCORDANCE WITH THIS PROVISION
NOTWITHSTANDING ANY LANGUAGE CONTAINED HEREIN OR IN THE AGREEMENT TO THE
CONTRARY.

         I UNDERSTAND THAT BY SIGNING THIS RELEASE, I AM GIVING UP RIGHTS
I MAY HAVE.  I UNDERSTAND THAT I DO NOT HAVE TO SIGN THIS RELEASE.


- -----------------------------                           ------------------------
Tedford Marlow                                          Date


Sworn to and subscribed before me this ______ day of _______________, 2001, by
Tedford Marlow, who is personally known to me [or who has produced
________________ as identification].

                                     [SEAL]

_______________________________________________[sign]
Type/Print Name of Notary______________________
Notary Public - State of Florida
Commission #:__________________________________
Commission Expires:____________________________

- ------------------------------                    -----------------------------
Witness                                           Witness

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   21



                                    EXHIBIT B
                                       TO
                  CONFIDENTIAL SEPARATION AND RELEASE AGREEMENT
                               WITH TEDFORD MARLOW
                        DATED AS OF _______________, 2001


                   GENERAL RELEASE AND DISCLAIMER ("RELEASE")

         In consideration of the promises and actions of TEDFORD MARLOW
("Marlow") set out in the Confidential Separation and Release Agreement entered
into between the parties to this Release on _June __, 2001 (the "Agreement"),
CHICO'S FAS, INC., a Florida corporation (the "Company") hereby remises,
acquits, releases, satisfies and discharges, on its own behalf and on behalf of
anyone who could claim by and through it, Marlow, his heirs, and legal
representatives and predecessors and successors in interest and assigns
(collectively "Marlow Releasees"), of and from any and all claims and demands,
past, present or future, and all manner of action and actions, causes of action,
suits, administrative proceedings, debts, dues, sums of money, accounts,
reckonings, bonds, bills, specialties, covenants, contracts, controversies,
agreements, promises, variances, torts, trespasses, damages, judgments,
executions, warranties, claims and demands whatsoever, in law or in equity,
which the Company, and its successors in interest and assignees, ever had or now
have or in the future may have, but only to the extent known to senior
management of the Company (other than Marlow) that the Company or any of its
affiliates may have against Marlow, his successors or assigns, by reason of any
matter, cause or thing whatsoever from the beginning of the world to the day of
the date of these presents to the extent related to or occurring in connection
with Marlow's employment by the Company., and except that this release shall not
constitute a release of Marlow from any of the obligations of Marlow arising
under the Agreement and shall not constitute a release of Marlow from any matter
involving gross negligence or willful misconduct on the part of Marlow in his
capacity as an employee or officer of the Company which resulted or results in a
material loss to the Company. For these purposes, action or inaction by Marlow
shall not be considered to be gross negligence or willful misconduct if a senior
member of management of the Company (other than Marlow) either consented to such
action or inaction on the part of Marlow or had actual knowledge of such action
or inaction as of the date of the Agreement.

         (4) The Company promises never to file, participate in or prosecute a
lawsuit, complaint, charge or other proceeding asserting any claims that are
released by this Release.

         For good and valuable consideration, the Company represents and
warrants that all the terms of this Release shall be complied with. Should the
Company breach or act in noncompliance with or in default of this Release,
Marlow may recover damages from the Company, along with all costs, including
attorneys' fees incurred by Marlow in recovering such damages and in enforcing
this Release, with the Company maintaining all other rights, remedies and/or
causes of action otherwise available at law or in equity. It is understood that
Marlow shall be entitled to recover, as a part of his costs, any attorneys' fees
incurred by him in connection with any claim, or type of claim, released

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   22


by this Release. The parties hereto acknowledge that any breach of this Release
shall entitle the non-breaching party not only to damages, but to injunctive
relief to enjoin the actions of the breaching party, as well as attorney's fees
and costs.

         THIS RELEASE WILL BECOME EFFECTIVE ON THE TENTH DAY FOLLOWING ITS
SIGNATURE BY ALL OF THE PARTIES BUT WILL NOT BECOME EFFECTIVE IF FOR ANY REASON
MARLOW WERE TO REVOKE ACCEPTANCE OF THE SEPARATE RELEASE THAT IS BEING DELIVERED
BY MARLOW TO THE COMPANY ON OR ABOUT THE DATE ON WHICH THIS RELEASE IS BEING
DELIVERED.

Chico's FAS, Inc.

                                                      ----------------------
By:__________________________                         Date

Title:_________________________

Sworn to and subscribed before me this ______ day of _______________, 2001, by
____________, as ____________________ of Chico's FAS, Inc., who is personally
known to me [or who has produced ________________ as identification].

                                     [SEAL]

_______________________________________________[sign]
Type/Print Name of Notary______________________
Notary Public - State of Florida
Commission #:__________________________________
Commission Expires:____________________________

- ------------------------------                  -----------------------------
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EX-10.2

   1
                                                                    EXHIBIT 10.2

                            INDEMNIFICATION AGREEMENT

        THIS INDEMNIFICATION AGREEMENT (this "Agreement") is made and entered
into this 2nd day of July, 2001, by and between JOHN W. BURDEN (the "Indemnified
Party") and CHICO'S FAS, INC., a Florida corporation (the "Corporation").

                              W I T N E S S E T H:

        WHEREAS, it is essential to the Corporation to retain and attract as
Directors and/or Executive Officers the most capable persons available; and

        WHEREAS, the substantial increase in corporate litigation subjects
directors and officers to expensive litigation risks at the same time that the
availability of directors' and officers' liability insurance has been severely
limited; and

        WHEREAS, in addition, the statutory indemnification provisions of the
Florida Business Corporation Act and Article VII of the bylaws of the
Corporation (the "Article") expressly provide that they are non-exclusive; and

        WHEREAS, the Indemnified Party does not regard the protection available
under the Article and insurance, if any, as adequate in the present
circumstances, and considers it necessary and desirable to his service as a
Director and/or Executive Officer to have adequate protection, and the
Corporation desires the Indemnified Party to serve in such capacity and have
such protection; and

        WHEREAS, the Florida Business Corporation Act and the Article provide
that indemnification of Directors and Executive Officers of the Corporation may
be authorized by agreement, and thereby contemplates that contracts of this
nature may be entered into between the Corporation and the Indemnified Party
with respect to indemnification of the Indemnified Party as a Director and/or
Executive Officer of the Corporation.

        NOW THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained in this Agreement, it is hereby agreed as follows:

        1. INDEMNIFICATION GENERALLY.

               (a) Grant of Indemnity. (i) Subject to and upon the terms and
conditions of this Agreement, the Corporation shall indemnify and hold harmless
the Indemnified Party in respect of any and all costs, claims, losses, damages
and expenses which may be incurred or suffered by the Indemnified Party as a
result of or arising out of prosecuting, defending, settling or investigating:

                             (1) any threatened, pending, or completed claim,
               demand, inquiry, investigation, action, suit or proceeding,
               whether formal or informal or brought by or in the right of the
               Corporation or otherwise and whether of a civil, criminal,
               administrative or investigative nature, in which the Indemnified
               Party may be or may have been involved as a party or otherwise,
               arising out of the fact that the Indemnified Party is or was a


   2



               director, officer, employee, independent contractor or
               stockholder of the Corporation or any of its "Affiliates" (as
               such term is defined in the rules and regulations promulgated by
               the Securities and Exchange Commission under the Securities Act
               of 1933), or served as a director, officer, employee,
               independent contractor or stockholder in or for any person,
               firm, partnership, corporation or other entity at the request of
               the Corporation (including without limitation service in any
               capacity for or in connection with any employee benefit plan
               maintained by the Corporation or on behalf of the Corporation's
               employees);

                             (2) any attempt (regardless of its success) by any
               person to charge or cause the Indemnified Party to be charged
               with wrongdoing or with financial responsibility for damages
               arising out of or incurred in connection with the matters
               indemnified against in this Agreement; or

                             (3) any expense, interest, assessment, fine, tax,
               judgment or settlement payment arising out of or incident to any
               of the matters indemnified against in this Agreement including
               reasonable fees and disbursements of legal counsel, experts,
               accountants, consultants and investigators (before and at trial
               and in appellate proceedings).

                (ii) The obligation of the Corporation under this Agreement is
not conditioned in any way on any attempt by the Indemnified Party to collect
from an insurer any amount under a liability insurance policy.

                (iii) In no case shall any indemnification be provided under
this Agreement to the Indemnified Party by the Corporation in:

                        (1)     Any action or proceeding brought by or in the
                                name or interest of the Indemnified Party
                                against the Corporation; or

                        (2)     Any action or proceeding brought by the
                                Corporation against the Indemnified Party, which
                                action is initiated at the direction of the
                                Board of Directors of the Corporation.

               (b) Claims for Indemnification. (i) Whenever any claims shall
arise for indemnification under this Agreement, the Indemnified Party shall
notify the Corporation promptly and in any event within 30 days after the
Indemnified Party has actual knowledge of the facts constituting the basis for
such claim. The notice shall specify all facts known to the Indemnified Party
giving rise to such indemnification right and the amount or an estimate of the
amount of liability (including estimated expenses) arising therefrom.

                (ii) Any indemnification under this Agreement shall be made no
later than 30 days after receipt by the Corporation of the written notification
specified in Section 1(b)(i), unless


                                       -2-

   3



a determination is made within such 30 day period by (X) the Board of Directors
by a majority vote of a quorum consisting of directors who were not parties to
the matter described in the notice or (Y) independent legal counsel, agreed to
by the Corporation, in a written opinion (which counsel shall be appointed if
such a quorum is not obtainable), that the Indemnified Party has not met the
relevant standards for indemnification under this Agreement.

               (c) Rights to Defend or Settle; Third Party Claims, etc. (i) If
the facts giving rise to any indemnification right under this Agreement shall
involve any actual or threatened claim or demand against the Indemnified Party,
or any possible claim by the Indemnified Party against any third party, such
claim shall be referred to as a "Third Party Claim." If the Corporation provides
the Indemnified Party with an agreement in writing in form and substance
satisfactory to the Indemnified Party and his counsel, agreeing to indemnify,
defend or prosecute and hold the Indemnified Party harmless from all costs and
liability arising from any Third Party Claim (an "Agreement of Indemnity"), and
demonstrating to the satisfaction of the Indemnified Party the financial
wherewithal to accomplish such indemnification, the Corporation may at its own
expense undertake full responsibility for the defense or prosecution of such
Third Party Claim. The Corporation may contest or settle any such Third Party
Claim for money damages on such terms and conditions as it deems appropriate but
shall be obligated to consult in good faith with the Indemnified Party and not
to contest or settle any Third Party Claim involving injunctive or equitable
relief against or affecting the Indemnified Party or his properties or assets
without the prior written consent of the Indemnified Party, such consent not to
be withheld unreasonably. The Indemnified Party may participate at his own
expense and with his own counsel in defense or prosecution of a Third Party
Claim pursuant to this Section 1(c)(i), and such participation shall not relieve
the Corporation of its obligation to indemnify the Indemnified Party under this
Agreement.

                        (ii) If the Corporation fails to deliver a satisfactory
Agreement of Indemnity and evidence of financial wherewithal within 10 days
after receipt of notice pursuant to Section 1(b), the Indemnified Party may
contest or settle the Third Party Claim on such terms as it sees fit but shall
not reach a settlement with respect to the payment of money damages without
consulting in good faith with the Corporation. The Corporation may participate
at its own expense and with its own counsel in defense or prosecution of a Third
Party Claim pursuant to this Section 1(c)(ii), but any such participation shall
not relieve the Corporation of its obligations to indemnify the Indemnified
Party under this Agreement. All expenses (including attorneys' fees) incurred in
defending or prosecuting any Third Party Claim shall be paid promptly by the
Corporation as the suit or other matter is proceeding, upon the submission of
bills therefor or other satisfactory evidence of such expenditures during the
pendency of any matter as to which indemnification is available under this
Agreement. The failure to make such payments within 10 days after submission of
evidence of those expenses shall constitute a breach of a material obligation of
the Corporation under this Agreement.

                        (iii) If by reason of any Third Party Claim a lien,
attachment, garnishment or execution is placed upon any of the property or
assets of the Indemnified Party, the Corporation shall promptly furnish a
satisfactory indemnity bond to obtain the prompt release of such lien,
attachment, garnishment or execution.


                                       -3-

   4



                        (iv) The Indemnified Party shall cooperate in the
defense of any Third Party Claim which is controlled by the Corporation, but the
Indemnified Party shall continue to be entitled to indemnification and
reimbursement for all costs and expenses incurred by him in connection therewith
as provided in this Agreement.

               (d) Cooperation. The parties to this Agreement shall execute such
powers of attorney as may be necessary or appropriate to permit participation of
counsel selected by any party hereto and, as may be reasonably related to any
such claim or action, shall provide to the counsel, accountants and other
representatives of each party access during normal business hours to all
properties, personnel, books, records, contracts, commitments and all other
business records of such other party and will furnish to such other party copies
of all such documents as may be reasonably requested (certified, if requested).

               (e) Choice of Counsel. In all matters as to which indemnification
is available to the Indemnified Party under this Agreement, the Indemnified
Party shall be free to choose and retain counsel, provided that the Indemnified
Party shall secure the prior written consent of the Corporation as to such
selection, which consent shall not be unreasonably withheld.

               (f) Consultation. If the Indemnified Party desires to retain the
services of an attorney prior to the determination by the Corporation as to
whether it will undertake the defense or prosecution of the Third Party Claim as
provided in Section 1(c), the Indemnified Party shall notify the Corporation of
such desire in the notice delivered pursuant to Section 1(b)(i), and such notice
shall identify the counsel to be retained. The Corporation shall then have 10
days within which to advise the Indemnified Party whether it will assume the
defense or prosecution of the Third Party Claim in accordance with Section
1(c)(i). If the Indemnified Party does not receive an affirmative response
within such 10 day period, he shall be free to retain counsel of his choice, and
the indemnity provided in Section 1(a) shall apply to the reasonable fees and
disbursements of such counsel incurred after the expiration of such 10 day
period. Any fees or disbursements incurred prior to the expiration of such 10
day period shall not be covered by the indemnity of Section 1(a).

               (g) Repayment. (i) Notwithstanding the other provisions of this
Agreement to the contrary, if the Corporation has incurred any cost, damage or
expense under this Agreement paid to or for the benefit of the Indemnified Party
and it is determined by a court of competent jurisdiction from which no appeal
may be taken that the Indemnified Party's actions or omissions constitute
"Nonindemnifiable Conduct" as that term is defined in Section 1(g)(ii), the
Indemnified Party shall and does hereby undertake in such circumstances to
reimburse the Corporation for any and all such amounts previously paid to or for
the benefit of the Indemnified Party.

                        (ii) For these purposes, "Nonindemnifiable Conduct"
shall mean actions or omissions of the Indemnified Party material to the cause
of action to which the indemnification under this Agreement related is
determined to involve:



                                       -4-

   5



                             (1) a violation of the criminal law, unless the
               Indemnified Party had reasonable cause to believe his conduct was
               lawful and had no reasonable cause to believe his conduct was
               unlawful;

                             (2) a transaction in which the Indemnified Party
               derived an improper personal benefit;

                             (3) if the Indemnified Party is a director of the
               Corporation, a circumstance under which the liability provisions
               of Section 607.0834 (or any successor or similar statute) are
               applicable;

                             (4) willful misconduct or a conscious disregard for
               the best interests of the Corporation (when indemnification is
               sought in a proceeding by or in the right of the Corporation to
               procure a judgment in favor of the Corporation or when
               indemnification is sought in a proceeding by or in the right of a
               stockholder); or

                             (5) conduct pursuant to then applicable law that
               prohibits such indemnification.

        2. TERM.

               This Agreement shall be effective upon its execution by all
parties and shall continue in full force and effect until the date seven years
after the date of this Agreement, or seven years after the termination of the
Indemnified Party's employment or term of office, whichever is later, provided
that such term shall be extended by any period of time during which the
Corporation is in breach of a material obligation to the Indemnified Party, plus
ninety days. Such term shall also be extended with respect to each Third Party
Claim then pending and as to which notice under Section 1(b) has theretofore
been given by the Indemnified Party to the Corporation, and this Agreement shall
continue to be applicable to each such Third Party Claim.

        3. REPRESENTATIONS AND AGREEMENTS OF THE CORPORATION.

               (a) Authority. The Corporation represents, covenants and agrees
that it has the corporate power and authority to enter into this Agreement and
to carry out its obligations under this Agreement. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated by this Agreement have been duly authorized by the Board of
Directors of the Corporation. This Agreement is a valid and binding obligation
of the Corporation and is enforceable against the Corporation in accordance with
its terms.

               (b) Noncontestability. The Corporation represents, covenants and
agrees that it will not initiate, and that it will use its best efforts to cause
any of its Affiliates not to initiate, any action, suit or proceeding
challenging the validity or enforceability of this Agreement.



                                       -5-

   6



               (c) Good Faith Judgment. The Corporation represents, covenants
and agrees that it will exercise good faith judgment in determining the
entitlement of the Indemnified Party to indemnification under this Agreement.

        4. RELATIONSHIP OF THIS AGREEMENT TO OTHER INDEMNITIES.

               (a) Nonexclusivity. (i) This Agreement and all rights granted to
the Indemnified Party under this Agreement are in addition to and are not deemed
to be exclusive with or of any other rights that may be available to the
Indemnified Party under any Articles of Incorporation, bylaw, statute,
agreement, or otherwise.

                        (ii) The rights, duties and obligations of the
Corporation and the Indemnified Party under this Agreement do not limit,
diminish or supersede the rights, duties and obligations of the Corporation and
the Indemnified Party with respect to the indemnification afforded to the
Indemnified Party under any liability insurance, the Florida Business
Corporation Act, or under the bylaws or the Articles of Incorporation of the
Corporation. In addition, the Indemnified Party's rights under this Agreement
will not be limited or diminished in any respect by any amendment to the bylaws
or the Articles of Incorporation of the Corporation.

               (b) Availability, Contribution, Etc.. (i) The availability or
nonavailability of indemnification by way of insurance policy, Articles of
Incorporation, bylaw, vote of stockholders, or otherwise from the Corporation to
the Indemnified Party shall not affect the right of the Indemnified Party to
indemnification under this Agreement, provided that all rights under this
Agreement shall be subject to applicable statutory provisions in effect from
time to time.

                        (ii) Any funds received by the Indemnified Party by way
of indemnification or payment from any source other than from the Corporation
under this Agreement shall reduce any amount otherwise payable to the
Indemnified Party under this Agreement.

                        (iii) If the Indemnified Party is entitled under any
provision of this Agreement to indemnification by the Corporation for some
claims, issues or matters, but not as to other claims, issues or matters, or for
some or a portion of the expenses, judgments, fines or penalties actually and
reasonably incurred by him or amounts actually and reasonably paid in settlement
by him in the investigation, defense, appeal or settlement of any matter for
which indemnification is sought under this Agreement, but not for the total
amount thereof, the Corporation shall nevertheless indemnify the Indemnified
Party for the portion of such claims, issues or matters or expenses, judgments,
fines, penalties or amounts paid in settlement to which the Indemnified Party is
entitled.

                        (iv) If for any reason a court of competent jurisdiction
from which no appeal can be taken rules that the indemnity provided under this
Agreement is unavailable, or if for any reason the indemnity under this
Agreement is insufficient to hold the Indemnified Party harmless as provided in
this Agreement, then in either event, the Corporation shall contribute to the
amounts paid or


                                       -6-

   7



payable by the Indemnified Party in such proportion as equitably reflects the
relative benefits received by, and fault of the Indemnified Party and the
Corporation and its Affiliates.

               (c) Allowance for Compliance with SEC Requirements. The
Indemnified Party acknowledges that the Securities and Exchange Commission
("SEC") has expressed the opinion that indemnification of directors and officers
from liabilities under the Securities Act of 1933 (the "1933 Act") is against
public policy as expressed in the 1933 Act and, is therefore, unenforceable. The
Indemnified Party hereby agrees that it will not be a breach of this Agreement
for the Corporation to undertake with the SEC in connection with the
registration for sale of any stock or other securities of the Corporation from
time to time that, in the event a claim for indemnification against such
liabilities (other than the payment by the Corporation of expenses incurred or
paid by a director or officer of the Corporation in the successful defense of
any action, suit or proceeding) is asserted in connection with such stock or
other securities being registered, the Corporation will, unless in the opinion
of its counsel the matter has been settled by controlling precedent, submit to a
court of competent jurisdiction on the question of whether or not such
indemnification by it is against public policy as expressed in the 1933 Act and
will be governed by the final adjudication of such issue. The Indemnified Party
further agrees that such submission to a court of competent jurisdiction shall
not be a breach of this Agreement.

        5. MISCELLANEOUS.

               (a) Notices. All notices, requests, demands and other
communications which are required or may be given under this Agreement shall be
in writing and shall be deemed to have been duly given when received if
personally delivered; when transmitted if transmitted by telecopy, electronic
telephone line facsimile transmission or other similar electronic or digital
transmission method; the day after it is sent, if sent by recognized expedited
delivery service; and five days after it is sent, if mailed, first class mail,
postage prepaid. In each case notice shall be sent to:

        If to the Indemni-
         fied Party:                              John W. Burden
                                                  P.O. Box 1131
                                                  Sanibel Island, FL 33957

        If to the
         Corporation:                             Chico's FAS, Ins.
                                                  11215 Metro Parkway
                                                  Ft. Myers, Florida 33912

or to such other address as either party may have specified in writing to the
other using the procedures specified above in this Section 5(a).


                                       -7-

   8

                (b) Construction and Interpretation. (i) This Agreement shall be
construed pursuant to and governed by the substantive laws of the State of
Florida (and any provision of Florida law shall not apply if the law of a state
or jurisdiction other than Florida would otherwise apply).

                        (ii) The headings of the various sections in this
Agreement are inserted for the convenience of the parties and shall not affect
the meaning, construction or interpretation of this Agreement.

                        (iii) Any provision of this Agreement which is
determined by a court of competent jurisdiction to be prohibited, unenforceable
or not authorized in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition, unenforceability or non-
authorization without invalidating the remaining provisions hereof or affecting
the validity, enforceability or legality of such provision in any other
jurisdiction. In any such case, such determination shall not affect any other
provision of this Agreement, and the remaining provisions of this Agreement
shall remain in full force and effect. If any provision or term of this
Agreement is susceptible to two or more constructions or interpretations, one or
more of which would render the provision or term void or unenforceable, the
parties agree that a construction or interpretation which renders the term or
provision valid shall be favored.

                        (iv) As used in this Agreement, (2) the word "including"
is always without limitation; (3) the words in the singular number include words
of the plural number and vice versa; and (4) the word "person" includes a trust,
corporation, association, partnership, joint venture, business trust,
unincorporated organization, limited liability company, government, public body
or authority and any governmental agency or department, as well as a natural
person.

               (c) Entire Agreement. This Agreement constitutes the entire
Agreement, and supersedes all prior agreements and understandings, oral and
written, among the parties to this Agreement with respect to the subject matter
hereof.

               (d) Specific Enforcement. (i) The parties agree and acknowledge
that in the event of a breach by the Corporation of its obligation promptly to
indemnify the Indemnified Party as provided in this Agreement, or breach of any
other material provision of this Agreement, damages at law will be an
insufficient remedy to the Indemnified Party. Accordingly, the parties agree
that, in addition to any other remedies or rights that may be available to the
Indemnified Party, the Indemnified Party shall also be entitled, upon
application to a court of competent jurisdiction, to obtain temporary or
permanent injunctions to compel specific performance of the obligations of the
Corporation under this Agreement.

                        (ii) There shall exist in such action a rebuttable
presumption that the Indemnified Party has met the applicable standard(s) of
conduct and is therefore entitled to indemnification pursuant to this Agreement,
and the burden of proving that the relevant standards have not been met by the
Indemnified Party shall be on the Corporation. Neither the failure of the
Corporation (including its Board of Directors or independent legal counsel)
prior to the commencement of such


                                       -8-

   9



action to have made a determination that indemnification is proper in the
circumstances because the Indemnified Party has met the applicable standard of
conduct, nor an actual determination by the Corporation (including its Board of
Directors or independent legal counsel) that the Indemnified Party has not met
such applicable standard of conduct, shall (X) constitute a defense to the
action, (Y) create a presumption that the Indemnified Party has not met the
applicable standard of conduct, or (Z) otherwise alter the presumption in favor
of the Indemnified Party referred to in the preceding sentence.

               (e) Cost of Enforcement; Interest. (i) If the Indemnified Party
engages the services of an attorney or any other third party or in any way
initiates legal action to enforce his rights under this Agreement, including but
not limited to the collection of monies due from the Corporation to the
Indemnified Party, the prevailing party shall be entitled to recover all
reasonable costs and expenses (including reasonable attorneys' fees before and
at trial and in appellate proceedings). Should the Indemnified Party prevail,
such costs and expenses shall be in addition to monies otherwise due him under
this Agreement.

                        (ii) If any monies shall be due the Indemnified Party
from the Corporation under this Agreement and shall not be paid within 30 days
from the date of written request for payment, interest shall accrue on such
unpaid amount at the rate of 2% per annum in excess of the prime rate announced
from time to time by Bank of America, or such lower rate as may be required to
comply with applicable law from the date when due until it is paid in full.

               (f) Application to Third Parties, Etc.. Nothing in this
Agreement, whether express or implied, is intended or should be construed to
confer upon, or to grant to, any person, except the Corporation, the Indemnified
Party and their respective heirs, assignees and successors, any claim, right or
remedy under or because of this Agreement or in any provision of it. This
Agreement shall be binding upon and inure to the benefit of the successors in
interest and assigns, heirs and personal representatives, as the case may be, of
the parties, including any successor corporation resulting from a merger,
consolidation, recapitalization, reorganization, sale of all or substantially
all of the assets of the Corporation, or any other transaction resulting in the
successor corporation assuming the liabilities of the Corporation under this
Agreement (by operation of law, or otherwise).

               (g) Further Assurances. The parties to this Agreement will
execute and deliver, or cause to be executed and delivered, such additional or
further documents, agreements or instruments and shall cooperate with one
another in all respects for the purpose of carrying out the transactions
contemplated by this Agreement.

               (h) Venue; Process. The parties to this Agreement agree that
jurisdiction and venue in any action brought pursuant to this Agreement to
enforce its terms or otherwise with respect to the relationships between the
parties shall properly lie in the Circuit Court of the Twentieth Judicial
Circuit of the State of Florida in and for Lee County or in the United States
District Court for the Middle District of Florida, Tampa Division. Such
jurisdiction and venue are merely permissive; jurisdiction and venue shall also
continue to lie in any court where jurisdiction and venue would


                                       -9-

   10


otherwise be proper. The parties agree that they will not object that any action
commenced in the foregoing jurisdictions is commenced in a forum non conveniens.
The parties further agree that the mailing by certified or registered mail,
return receipt requested, of any process required by any such court shall
constitute valid and lawful service of process against them, without the
necessity for service by any other means provided by statute or rule of court.

               (i) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be considered an original, but all of which
together shall constitute one and the same instrument.

               (j) Waiver and Delay. No waiver or delay in enforcing the terms
of this Agreement shall be construed as a waiver of any subsequent breach. No
action taken by the Indemnified Party shall constitute a waiver of his rights
under this Agreement.

        IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first above written.

                                      CHICO'S FAS, INC.


                                      By:  /s/ Marvin J. Gralnick
                                           -------------------------------------
                                           Marvin J. Gralnick,
                                           Chief Executive Officer and President


WITNESSES:



  /s/ Charles J. Kleman                   /s/ John W. Burden
- --------------------------------------    --------------------------------------
                                          John W. Burden

  /s/ Sherry Terzian
- --------------------------------------

                                      -10-

EX-10.3

   1
                                                                    EXHIBIT 10.3

                            INDEMNIFICATION AGREEMENT

        THIS INDEMNIFICATION AGREEMENT (this "Agreement") is made and entered
into this 5th day of July, 2001, by and between ROSS E. ROEDER (the "Indemnified
Party") and CHICO'S FAS, INC., a Florida corporation (the "Corporation").

                              W I T N E S S E T H:

        WHEREAS, it is essential to the Corporation to retain and attract as
Directors and/or Executive Officers the most capable persons available; and

        WHEREAS, the substantial increase in corporate litigation subjects
directors and officers to expensive litigation risks at the same time that the
availability of directors' and officers' liability insurance has been severely
limited; and

        WHEREAS, in addition, the statutory indemnification provisions of the
Florida Business Corporation Act and Article VII of the bylaws of the
Corporation (the "Article") expressly provide that they are non-exclusive; and

        WHEREAS, the Indemnified Party does not regard the protection available
under the Article and insurance, if any, as adequate in the present
circumstances, and considers it necessary and desirable to his service as a
Director and/or Executive Officer to have adequate protection, and the
Corporation desires the Indemnified Party to serve in such capacity and have
such protection; and

        WHEREAS, the Florida Business Corporation Act and the Article provide
that indemnification of Directors and Executive Officers of the Corporation may
be authorized by agreement, and thereby contemplates that contracts of this
nature may be entered into between the Corporation and the Indemnified Party
with respect to indemnification of the Indemnified Party as a Director and/or
Executive Officer of the Corporation.

        NOW THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained in this Agreement, it is hereby agreed as follows:

        1. INDEMNIFICATION GENERALLY.

               (a) Grant of Indemnity. (i) Subject to and upon the terms and
conditions of this Agreement, the Corporation shall indemnify and hold harmless
the Indemnified Party in respect of any and all costs, claims, losses, damages
and expenses which may be incurred or suffered by the Indemnified Party as a
result of or arising out of prosecuting, defending, settling or investigating:

                             (1) any threatened, pending, or completed claim,
               demand, inquiry, investigation, action, suit or proceeding,
               whether formal or informal or brought by or in the right of the
               Corporation or otherwise and whether of a civil, criminal,
               administrative or investigative nature, in which the Indemnified
               Party may be or may have been involved as a party or otherwise,
               arising out of the fact that the Indemnified Party is or was a


   2



               director, officer, employee, independent contractor or
               stockholder of the Corporation or any of its "Affiliates" (as
               such term is defined in the rules and regulations promulgated by
               the Securities and Exchange Commission under the Securities Act
               of 1933), or served as a director, officer, employee, independent
               contractor or stockholder in or for any person, firm,
               partnership, corporation or other entity at the request of the
               Corporation (including without limitation service in any capacity
               for or in connection with any employee benefit plan maintained by
               the Corporation or on behalf of the Corporation's employees);

                             (2) any attempt (regardless of its success) by any
               person to charge or cause the Indemnified Party to be charged
               with wrongdoing or with financial responsibility for damages
               arising out of or incurred in connection with the matters
               indemnified against in this Agreement; or

                             (3) any expense, interest, assessment, fine, tax,
               judgment or settlement payment arising out of or incident to any
               of the matters indemnified against in this Agreement including
               reasonable fees and disbursements of legal counsel, experts,
               accountants, consultants and investigators (before and at trial
               and in appellate proceedings).

                        (ii) The obligation of the Corporation under this
Agreement is not conditioned in any way on any attempt by the Indemnified Party
to collect from an insurer any amount under a liability insurance policy.

                        (iii) In no case shall any indemnification be provided
under this Agreement to the Indemnified Party by the Corporation in:

                                (1)     Any action or proceeding brought by or
                                        in the name or interest of the
                                        Indemnified Party against the
                                        Corporation; or

                                (2)     Any action or proceeding brought by the
                                        Corporation against the Indemnified
                                        Party, which action is initiated at the
                                        direction of the Board of Directors of
                                        the Corporation.

               (b) Claims for Indemnification. (i) Whenever any claims shall
arise for indemnification under this Agreement, the Indemnified Party shall
notify the Corporation promptly and in any event within 30 days after the
Indemnified Party has actual knowledge of the facts constituting the basis for
such claim. The notice shall specify all facts known to the Indemnified Party
giving rise to such indemnification right and the amount or an estimate of the
amount of liability (including estimated expenses) arising therefrom.

                        (ii) Any indemnification under this Agreement shall be
made no later than 30 days after receipt by the Corporation of the written
notification specified in Section 1(b)(i), unless


                                       -2-

   3



a determination is made within such 30 day period by (X) the Board of Directors
by a majority vote of a quorum consisting of directors who were not parties to
the matter described in the notice or (Y) independent legal counsel, agreed to
by the Corporation, in a written opinion (which counsel shall be appointed if
such a quorum is not obtainable), that the Indemnified Party has not met the
relevant standards for indemnification under this Agreement.

               (c) Rights to Defend or Settle; Third Party Claims, etc. (i) If
the facts giving rise to any indemnification right under this Agreement shall
involve any actual or threatened claim or demand against the Indemnified Party,
or any possible claim by the Indemnified Party against any third party, such
claim shall be referred to as a "Third Party Claim." If the Corporation provides
the Indemnified Party with an agreement in writing in form and substance
satisfactory to the Indemnified Party and his counsel, agreeing to indemnify,
defend or prosecute and hold the Indemnified Party harmless from all costs and
liability arising from any Third Party Claim (an "Agreement of Indemnity"), and
demonstrating to the satisfaction of the Indemnified Party the financial
wherewithal to accomplish such indemnification, the Corporation may at its own
expense undertake full responsibility for the defense or prosecution of such
Third Party Claim. The Corporation may contest or settle any such Third Party
Claim for money damages on such terms and conditions as it deems appropriate but
shall be obligated to consult in good faith with the Indemnified Party and not
to contest or settle any Third Party Claim involving injunctive or equitable
relief against or affecting the Indemnified Party or his properties or assets
without the prior written consent of the Indemnified Party, such consent not to
be withheld unreasonably. The Indemnified Party may participate at his own
expense and with his own counsel in defense or prosecution of a Third Party
Claim pursuant to this Section 1(c)(i), and such participation shall not relieve
the Corporation of its obligation to indemnify the Indemnified Party under this
Agreement.

                        (ii) If the Corporation fails to deliver a satisfactory
Agreement of Indemnity and evidence of financial wherewithal within 10 days
after receipt of notice pursuant to Section 1(b), the Indemnified Party may
contest or settle the Third Party Claim on such terms as it sees fit but shall
not reach a settlement with respect to the payment of money damages without
consulting in good faith with the Corporation. The Corporation may participate
at its own expense and with its own counsel in defense or prosecution of a Third
Party Claim pursuant to this Section 1(c)(ii), but any such participation shall
not relieve the Corporation of its obligations to indemnify the Indemnified
Party under this Agreement. All expenses (including attorneys' fees) incurred in
defending or prosecuting any Third Party Claim shall be paid promptly by the
Corporation as the suit or other matter is proceeding, upon the submission of
bills therefor or other satisfactory evidence of such expenditures during the
pendency of any matter as to which indemnification is available under this
Agreement. The failure to make such payments within 10 days after submission of
evidence of those expenses shall constitute a breach of a material obligation of
the Corporation under this Agreement.

                        (iii) If by reason of any Third Party Claim a lien,
attachment, garnishment or execution is placed upon any of the property or
assets of the Indemnified Party, the Corporation shall promptly furnish a
satisfactory indemnity bond to obtain the prompt release of such lien,
attachment, garnishment or execution.


                                       -3-

   4



                        (iv) The Indemnified Party shall cooperate in the
defense of any Third Party Claim which is controlled by the Corporation, but the
Indemnified Party shall continue to be entitled to indemnification and
reimbursement for all costs and expenses incurred by him in connection therewith
as provided in this Agreement.

               (d) Cooperation. The parties to this Agreement shall execute such
powers of attorney as may be necessary or appropriate to permit participation of
counsel selected by any party hereto and, as may be reasonably related to any
such claim or action, shall provide to the counsel, accountants and other
representatives of each party access during normal business hours to all
properties, personnel, books, records, contracts, commitments and all other
business records of such other party and will furnish to such other party copies
of all such documents as may be reasonably requested (certified, if requested).

               (e) Choice of Counsel. In all matters as to which indemnification
is available to the Indemnified Party under this Agreement, the Indemnified
Party shall be free to choose and retain counsel, provided that the Indemnified
Party shall secure the prior written consent of the Corporation as to such
selection, which consent shall not be unreasonably withheld.

               (f) Consultation. If the Indemnified Party desires to retain the
services of an attorney prior to the determination by the Corporation as to
whether it will undertake the defense or prosecution of the Third Party Claim as
provided in Section 1(c), the Indemnified Party shall notify the Corporation of
such desire in the notice delivered pursuant to Section 1(b)(i), and such notice
shall identify the counsel to be retained. The Corporation shall then have 10
days within which to advise the Indemnified Party whether it will assume the
defense or prosecution of the Third Party Claim in accordance with Section
1(c)(i). If the Indemnified Party does not receive an affirmative response
within such 10 day period, he shall be free to retain counsel of his choice, and
the indemnity provided in Section 1(a) shall apply to the reasonable fees and
disbursements of such counsel incurred after the expiration of such 10 day
period. Any fees or disbursements incurred prior to the expiration of such 10
day period shall not be covered by the indemnity of Section 1(a).

               (g) Repayment. (i) Notwithstanding the other provisions of this
Agreement to the contrary, if the Corporation has incurred any cost, damage or
expense under this Agreement paid to or for the benefit of the Indemnified Party
and it is determined by a court of competent jurisdiction from which no appeal
may be taken that the Indemnified Party's actions or omissions constitute
"Nonindemnifiable Conduct" as that term is defined in Section 1(g)(ii), the
Indemnified Party shall and does hereby undertake in such circumstances to
reimburse the Corporation for any and all such amounts previously paid to or for
the benefit of the Indemnified Party.

                        (ii) For these purposes, "Nonindemnifiable Conduct"
shall mean actions or omissions of the Indemnified Party material to the cause
of action to which the indemnification under this Agreement related is
determined to involve:



                                       -4-

   5



                             (1) a violation of the criminal law, unless the
               Indemnified Party had reasonable cause to believe his conduct was
               lawful and had no reasonable cause to believe his conduct was
               unlawful;

                             (2) a transaction in which the Indemnified Party
               derived an improper personal benefit;

                             (3) if the Indemnified Party is a director of the
               Corporation, a circumstance under which the liability provisions
               of Section 607.0834 (or any successor or similar statute) are
               applicable;

                             (4) willful misconduct or a conscious disregard for
               the best interests of the Corporation (when indemnification is
               sought in a proceeding by or in the right of the Corporation to
               procure a judgment in favor of the Corporation or when
               indemnification is sought in a proceeding by or in the right of a
               stockholder); or

                             (5) conduct pursuant to then applicable law that
               prohibits such indemnification.

        2. TERM.

               This Agreement shall be effective upon its execution by all
parties and shall continue in full force and effect until the date seven years
after the date of this Agreement, or seven years after the termination of the
Indemnified Party's employment or term of office, whichever is later, provided
that such term shall be extended by any period of time during which the
Corporation is in breach of a material obligation to the Indemnified Party, plus
ninety days. Such term shall also be extended with respect to each Third Party
Claim then pending and as to which notice under Section 1(b) has theretofore
been given by the Indemnified Party to the Corporation, and this Agreement shall
continue to be applicable to each such Third Party Claim.

        3. REPRESENTATIONS AND AGREEMENTS OF THE CORPORATION.

               (a) Authority. The Corporation represents, covenants and agrees
that it has the corporate power and authority to enter into this Agreement and
to carry out its obligations under this Agreement. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated by this Agreement have been duly authorized by the Board of
Directors of the Corporation. This Agreement is a valid and binding obligation
of the Corporation and is enforceable against the Corporation in accordance with
its terms.

               (b) Noncontestability. The Corporation represents, covenants and
agrees that it will not initiate, and that it will use its best efforts to cause
any of its Affiliates not to initiate, any action, suit or proceeding
challenging the validity or enforceability of this Agreement.



                                       -5-

   6



               (c) Good Faith Judgment. The Corporation represents, covenants
and agrees that it will exercise good faith judgment in determining the
entitlement of the Indemnified Party to indemnification under this Agreement.

        4. RELATIONSHIP OF THIS AGREEMENT TO OTHER INDEMNITIES.

               (a) Nonexclusivity. (i) This Agreement and all rights granted to
the Indemnified Party under this Agreement are in addition to and are not deemed
to be exclusive with or of any other rights that may be available to the
Indemnified Party under any Articles of Incorporation, bylaw, statute,
agreement, or otherwise.

                        (ii) The rights, duties and obligations of the
Corporation and the Indemnified Party under this Agreement do not limit,
diminish or supersede the rights, duties and obligations of the Corporation and
the Indemnified Party with respect to the indemnification afforded to the
Indemnified Party under any liability insurance, the Florida Business
Corporation Act, or under the bylaws or the Articles of Incorporation of the
Corporation. In addition, the Indemnified Party's rights under this Agreement
will not be limited or diminished in any respect by any amendment to the bylaws
or the Articles of Incorporation of the Corporation.

               (b) Availability, Contribution, Etc.. (i) The availability or
nonavailability of indemnification by way of insurance policy, Articles of
Incorporation, bylaw, vote of stockholders, or otherwise from the Corporation to
the Indemnified Party shall not affect the right of the Indemnified Party to
indemnification under this Agreement, provided that all rights under this
Agreement shall be subject to applicable statutory provisions in effect from
time to time.

                        (ii) Any funds received by the Indemnified Party by way
of indemnification or payment from any source other than from the Corporation
under this Agreement shall reduce any amount otherwise payable to the
Indemnified Party under this Agreement.

                        (iii) If the Indemnified Party is entitled under any
provision of this Agreement to indemnification by the Corporation for some
claims, issues or matters, but not as to other claims, issues or matters, or for
some or a portion of the expenses, judgments, fines or penalties actually and
reasonably incurred by him or amounts actually and reasonably paid in settlement
by him in the investigation, defense, appeal or settlement of any matter for
which indemnification is sought under this Agreement, but not for the total
amount thereof, the Corporation shall nevertheless indemnify the Indemnified
Party for the portion of such claims, issues or matters or expenses, judgments,
fines, penalties or amounts paid in settlement to which the Indemnified Party is
entitled.

                        (iv) If for any reason a court of competent jurisdiction
from which no appeal can be taken rules that the indemnity provided under this
Agreement is unavailable, or if for any reason the indemnity under this
Agreement is insufficient to hold the Indemnified Party harmless as provided in
this Agreement, then in either event, the Corporation shall contribute to the
amounts paid or


                                       -6-

   7



payable by the Indemnified Party in such proportion as equitably reflects the
relative benefits received by, and fault of the Indemnified Party and the
Corporation and its Affiliates.

               (c) Allowance for Compliance with SEC Requirements. The
Indemnified Party acknowledges that the Securities and Exchange Commission
("SEC") has expressed the opinion that indemnification of directors and officers
from liabilities under the Securities Act of 1933 (the "1933 Act") is against
public policy as expressed in the 1933 Act and, is therefore, unenforceable. The
Indemnified Party hereby agrees that it will not be a breach of this Agreement
for the Corporation to undertake with the SEC in connection with the
registration for sale of any stock or other securities of the Corporation from
time to time that, in the event a claim for indemnification against such
liabilities (other than the payment by the Corporation of expenses incurred or
paid by a director or officer of the Corporation in the successful defense of
any action, suit or proceeding) is asserted in connection with such stock or
other securities being registered, the Corporation will, unless in the opinion
of its counsel the matter has been settled by controlling precedent, submit to a
court of competent jurisdiction on the question of whether or not such
indemnification by it is against public policy as expressed in the 1933 Act and
will be governed by the final adjudication of such issue. The Indemnified Party
further agrees that such submission to a court of competent jurisdiction shall
not be a breach of this Agreement.

        5. MISCELLANEOUS.

               (a) Notices. All notices, requests, demands and other
communications which are required or may be given under this Agreement shall be
in writing and shall be deemed to have been duly given when received if
personally delivered; when transmitted if transmitted by telecopy, electronic
telephone line facsimile transmission or other similar electronic or digital
transmission method; the day after it is sent, if sent by recognized expedited
delivery service; and five days after it is sent, if mailed, first class mail,
postage prepaid. In each case notice shall be sent to:

        If to the Indemni-
         fied Party:                              Ross E. Roeder
                                                  Suite 200
                                                  1355 Snell Isle Blvd., N.E.
                                                  St. Petersburg, FL  33704

        If to the
         Corporation:                             Chico's FAS, Ins.
                                                  11215 Metro Parkway
                                                  Ft. Myers, Florida 33912

or to such other address as either party may have specified in writing to the
other using the procedures specified above in this Section 5(a).



                                       -7-

   8



               (b) Construction and Interpretation. (i) This Agreement shall be
construed pursuant to and governed by the substantive laws of the State of
Florida (and any provision of Florida law shall not apply if the law of a state
or jurisdiction other than Florida would otherwise apply).

                        (ii) The headings of the various sections in this
Agreement are inserted for the convenience of the parties and shall not affect
the meaning, construction or interpretation of this Agreement.

                        (iii) Any provision of this Agreement which is
determined by a court of competent jurisdiction to be prohibited, unenforceable
or not authorized in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition, unenforceability or non-
authorization without invalidating the remaining provisions hereof or affecting
the validity, enforceability or legality of such provision in any other
jurisdiction. In any such case, such determination shall not affect any other
provision of this Agreement, and the remaining provisions of this Agreement
shall remain in full force and effect. If any provision or term of this
Agreement is susceptible to two or more constructions or interpretations, one or
more of which would render the provision or term void or unenforceable, the
parties agree that a construction or interpretation which renders the term or
provision valid shall be favored.

                        (iv) As used in this Agreement, (2) the word "including"
is always without limitation; (3) the words in the singular number include words
of the plural number and vice versa; and (4) the word "person" includes a trust,
corporation, association, partnership, joint venture, business trust,
unincorporated organization, limited liability company, government, public body
or authority and any governmental agency or department, as well as a natural
person.

               (c) Entire Agreement. This Agreement constitutes the entire
Agreement, and supersedes all prior agreements and understandings, oral and
written, among the parties to this Agreement with respect to the subject matter
hereof.

               (d) Specific Enforcement. (i) The parties agree and acknowledge
that in the event of a breach by the Corporation of its obligation promptly to
indemnify the Indemnified Party as provided in this Agreement, or breach of any
other material provision of this Agreement, damages at law will be an
insufficient remedy to the Indemnified Party. Accordingly, the parties agree
that, in addition to any other remedies or rights that may be available to the
Indemnified Party, the Indemnified Party shall also be entitled, upon
application to a court of competent jurisdiction, to obtain temporary or
permanent injunctions to compel specific performance of the obligations of the
Corporation under this Agreement.

                        (ii) There shall exist in such action a rebuttable
presumption that the Indemnified Party has met the applicable standard(s) of
conduct and is therefore entitled to indemnification pursuant to this Agreement,
and the burden of proving that the relevant standards have not been met by the
Indemnified Party shall be on the Corporation. Neither the failure of the
Corporation (including its Board of Directors or independent legal counsel)
prior to the commencement of such


                                       -8-

   9



action to have made a determination that indemnification is proper in the
circumstances because the Indemnified Party has met the applicable standard of
conduct, nor an actual determination by the Corporation (including its Board of
Directors or independent legal counsel) that the Indemnified Party has not met
such applicable standard of conduct, shall (X) constitute a defense to the
action, (Y) create a presumption that the Indemnified Party has not met the
applicable standard of conduct, or (Z) otherwise alter the presumption in favor
of the Indemnified Party referred to in the preceding sentence.

               (e) Cost of Enforcement; Interest. (i) If the Indemnified Party
engages the services of an attorney or any other third party or in any way
initiates legal action to enforce his rights under this Agreement, including but
not limited to the collection of monies due from the Corporation to the
Indemnified Party, the prevailing party shall be entitled to recover all
reasonable costs and expenses (including reasonable attorneys' fees before and
at trial and in appellate proceedings). Should the Indemnified Party prevail,
such costs and expenses shall be in addition to monies otherwise due him under
this Agreement.

                        (ii) If any monies shall be due the Indemnified Party
from the Corporation under this Agreement and shall not be paid within 30 days
from the date of written request for payment, interest shall accrue on such
unpaid amount at the rate of 2% per annum in excess of the prime rate announced
from time to time by Bank of America, or such lower rate as may be required to
comply with applicable law from the date when due until it is paid in full.

               (f) Application to Third Parties, Etc.. Nothing in this
Agreement, whether express or implied, is intended or should be construed to
confer upon, or to grant to, any person, except the Corporation, the Indemnified
Party and their respective heirs, assignees and successors, any claim, right or
remedy under or because of this Agreement or in any provision of it. This
Agreement shall be binding upon and inure to the benefit of the successors in
interest and assigns, heirs and personal representatives, as the case may be, of
the parties, including any successor corporation resulting from a merger,
consolidation, recapitalization, reorganization, sale of all or substantially
all of the assets of the Corporation, or any other transaction resulting in the
successor corporation assuming the liabilities of the Corporation under this
Agreement (by operation of law, or otherwise).

               (g) Further Assurances. The parties to this Agreement will
execute and deliver, or cause to be executed and delivered, such additional or
further documents, agreements or instruments and shall cooperate with one
another in all respects for the purpose of carrying out the transactions
contemplated by this Agreement.

               (h) Venue; Process. The parties to this Agreement agree that
jurisdiction and venue in any action brought pursuant to this Agreement to
enforce its terms or otherwise with respect to the relationships between the
parties shall properly lie in the Circuit Court of the Twentieth Judicial
Circuit of the State of Florida in and for Lee County or in the United States
District Court for the Middle District of Florida, Tampa Division. Such
jurisdiction and venue are merely permissive; jurisdiction and venue shall also
continue to lie in any court where jurisdiction and venue would


                                       -9-

   10


otherwise be proper. The parties agree that they will not object that any action
commenced in the foregoing jurisdictions is commenced in a forum non conveniens.
The parties further agree that the mailing by certified or registered mail,
return receipt requested, of any process required by any such court shall
constitute valid and lawful service of process against them, without the
necessity for service by any other means provided by statute or rule of court.

               (i) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be considered an original, but all of which
together shall constitute one and the same instrument.

               (j) Waiver and Delay. No waiver or delay in enforcing the terms
of this Agreement shall be construed as a waiver of any subsequent breach. No
action taken by the Indemnified Party shall constitute a waiver of his rights
under this Agreement.

        IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first above written.

                                      CHICO'S FAS, INC.


                                      By:  /s/ Marvin J. Gralnick
                                           -------------------------------------
                                           Marvin J. Gralnick,
                                           Chief Executive Officer and President


WITNESSES:



  /s/ Charles J. Kleman                      /s/ Ross E. Roeder
- --------------------------------------     -------------------------------------
                                           Ross E. Roeder

  /s/ Sherry Terzian
- --------------------------------------

                                      -10-