-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, R2h1mr+4S/tiGiqfaMdotXA4pIJDG0Hz88yApgyVGggdCswoUFx0QcnbyNZV2MaD c3YmcniRNM1Zr/5MeiuQGA== 0001021408-00-003938.txt : 20001211 0001021408-00-003938.hdr.sgml : 20001211 ACCESSION NUMBER: 0001021408-00-003938 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 20001028 FILED AS OF DATE: 20001208 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CHICOS FAS INC CENTRAL INDEX KEY: 0000897429 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-WOMEN'S CLOTHING STORES [5621] IRS NUMBER: 592389435 STATE OF INCORPORATION: FL FISCAL YEAR END: 0130 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-21258 FILM NUMBER: 786237 BUSINESS ADDRESS: STREET 1: 11215 METRO PKWY CITY: FT MYERS STATE: FL ZIP: 33912-1206 BUSINESS PHONE: 8134335505 MAIL ADDRESS: STREET 1: 11215 METRO PKY CITY: FT MYERS STATE: FL ZIP: 33912-1206 10-Q 1 0001.txt FORM 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: October 28, 2000 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 November 27, 2000, there were 17,494,145 shares outstanding of Common Stock, $.01 par value per share. CHICO'S FAS, Inc. Index PART I - Financial Information - ------------------------------ Item I. Financial Statements (Unaudited): Condensed Consolidated Balance Sheets - October 28, 2000 and January 29, 2000.......... 3 Condensed Consolidated Statements of Income for the Thirteen and Thirty-Nine Weeks Ended October 28, 2000 and October 30, 1999................................. 4 Condensed Consolidated Statements of Cash Flows for the Thirty-Nine Weeks Ended October 28, 2000 and October 30, 1999............................................. 5 Notes to Condensed Consolidated Financial Statements................................... 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations........................................................................ 7 Item 3. Quantitative and Qualitative Disclosures About Market Risk............................. 11 PART II - Other Information - --------------------------- Item 6. Exhibits and Reports on Form 8-K....................................................... 11 Signatures..................................................................................... 12
2 CHICO'S FAS, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (Unaudited)
As of As of 10-28-00 01-29-00 ------------ ---------- ASSETS ------ Current Assets: Cash and cash equivalents $ 7,533,563 $ 3,980,930 Marketable securities, at market 13,356,141 13,995,527 Receivables, net 3,078,406 1,706,661 Inventories 26,730,997 14,834,800 Prepaid expenses 987,961 668,695 Deferred taxes 2,901,000 2,038,000 ----------------- ----------------- Total Current Assets 54,588,068 37,224,613 ----------------- ----------------- Land, Building and Equipment: Cost 68,214,067 41,217,160 Less accumulated depreciation and amortization (13,206,845) (9,872,163) ----------------- ----------------- Land, Building and Equipment, Net 55,007,222 31,344,997 ----------------- ----------------- Other Assets: Deferred taxes 1,359,000 1,106,000 Other assets, net 706,019 640,211 ----------------- ----------------- Total Other Assets 2,065,019 1,746,211 ----------------- ----------------- $111,660,309 $70,315,821 ================= ================= LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ Current Liabilities: Accounts payable $ 15,316,139 $ 5,982,684 Accrued liabilities 9,746,855 4,593,104 Current portion of debt and lease obligations 275,247 260,111 ----------------- ----------------- Total Current Liabilities 25,338,241 10,835,899 ----------------- ----------------- Noncurrent Liabilities: Mortgage note payable 5,167,500 5,221,500 Deferred rent 1,823,256 1,617,680 ----------------- ----------------- Total Noncurrent Liabilities 6,990,756 6,839,180 ----------------- ----------------- Stockholders' Equity: Common stock 174,932 171,285 Additional paid-in capital 18,724,754 14,709,238 Unrealized loss on marketable securities (26,369) (24,334) Retained earnings 60,457,995 37,784,553 ----------------- ----------------- Total Stockholders' Equity 79,331,312 52,640,742 ----------------- ----------------- $111,660,309 $70,315,821 ================= =================
See Accompanying Notes 3 CHICO'S FAS, Inc. and Subsidiaries Condensed Consolidated Statements of Income (Unaudited)
Thirty-Nine Weeks Ended Thirteen Weeks Ended 10-28-00 10-30-99 10-28-00 10-30-99 -------- -------- -------- -------- Net sales by Company stores $183,061,434 $111,196,667 $67,806,170 $39,283,282 Net sales to Franchisees 3,260,169 2,008,602 1,184,303 725,713 ------------- ------------- ------------- ------------- Net sales 186,321,603 113,205,269 68,990,473 40,008,995 Cost of goods sold 76,729,277 46,995,650 28,321,331 16,600,678 ------------- ------------- ------------- ------------- Gross profit 109,592,326 66,209,619 40,669,142 23,408,317 General, administrative and store operating expenses 73,379,232 46,560,809 28,143,889 16,881,195 ------------- ------------- ------------- ------------- Income from operations 36,213,094 19,648,810 12,525,253 6,527,122 Interest income, net 356,348 95,618 87,843 51,187 ------------- ------------- ------------- ------------- Income before taxes 36,569,442 19,744,428 12,613,096 6,578,309 Income tax provision 13,896,000 7,503,000 4,793,000 2,500,000 ------------- ------------- ------------- ------------- Net income $ 22,673,442 $ 12,241,428 $ 7,820,096 $ 4,078,309 ============= ============= ============= ============= Per share data: Net income per common share - basic $1.31 $0.72 $0.45 $0.24 ============= ============= ============= ============= Net income per common and common equivalent share - diluted $1.25 $0.69 $0.43 $0.23 ============= ============= ============= ============= Weighted average common shares outstanding - basic 17,302,286 16,888,878 17,468,885 16,972,338 ============= ============= ============= ============= Weighted average common and common equivalent shares outstanding - diluted 18,101,147 17,613,180 18,299,416 17,679,110 ============= ============= ============= =============
See Accompanying Notes 4 CHICO'S FAS, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (Unaudited)
Thirty-Nine Weeks Ended 10-28-00 10-30-99 -------- -------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 22,673,442 $ 12,241,428 ------------ ------------ Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 4,008,671 2,315,544 Stock option compensation 17,539 - Deferred taxes (1,116,000) (716,000) Tax benefit of options exercised 2,605,000 925,000 Loss on disposal of land, building and equipment 255,152 160,845 Deferred rent expense, net 205,576 150,327 Changes in assets and liabilities: Increase in receivables, net (1,371,745) (1,022,617) Increase in inventories (11,896,197) (5,046,337) Increase in prepaid expenses and other assets (397,650) (272,767) Increase in accounts payable 9,333,455 3,825,489 Increase in accrued liabilities 5,168,887 1,710,897 ------------ ------------ Total adjustments 6,812,688 2,030,381 ------------ ------------ Net cash provided by operating activities 29,486,130 14,271,809 ------------ ------------ CASH FLOWS FROM INVESTING ACTIVITIES: Sale (purchase) of marketable securities, net 637,351 (12,839,691) Purchase of land, building and equipment (27,832,222) (9,558,572) ------------ ------------ Net cash used in investing activities (27,194,871) (22,398,263) ------------ ------------ CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuances of common stock 1,396,624 959,675 Principal payments on debt (54,000) (114,273) Deferred finance costs and other (81,250) - ------------ ------------ Net cash provided by financing activities 1,261,374 845,402 ------------ ------------ Net increase (decrease) in cash and cash equivalents 3,552,633 (7,281,052) CASH AND CASH EQUIVALENTS - Beginning of Period 3,980,930 14,484,776 ------------ ------------ CASH AND CASH EQUIVALENTS - End of Period $ 7,533,563 $ 7,203,724 ============ ============
See Accompanying Notes 5 CHICO'S FAS, Inc. and Subsidiaries Notes to Condensed Consolidated Financial Statements October 28, 2000 (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 January 29, 2000, included in the Company's Annual Report on Form 10-K filed on April 28, 2000. The January 29, 2000 balance sheet amounts were derived from audited financial statements included in the Company's Annual Report. Operating results for the thirteen and thirty-nine weeks ended October 28, 2000 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 two-for-one split effective in January 2000. 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:
Thirty-Nine Weeks Ended Thirteen Weeks Ended 10-28-00 10-30-99 10-28-00 10-30-99 -------- -------- -------- -------- Basic weighted average outstanding common shares 17,302,286 16,888,878 17,468,885 16,972,338 Dilutive effect of options outstanding 798,861 724,302 830,531 706,772 ---------- ---------- ---------- ---------- Diluted weighted average common and common equivalent shares outstanding 18,101,147 17,613,180 18,299,416 17,679,110 ========== ========== ========== ==========
6 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations - Thirteen Weeks Ended October 28, 2000 Compared to the - --------------------- Thirteen Weeks Ended October 30, 1999. Net Sales. Net sales by Company-owned stores for the thirteen weeks ended October 28, 2000 (the current period) increased by $28.5 million, or 72.6% over net sales by Company-owned stores for the comparable thirteen weeks ended October 30, 1999 (the prior period). The increase was the result of a comparable Company store net sales increase of $15.1 million, $12.7 million additional sales from the new stores not yet included in the Company's comparable store base (net of sales of $0.3 million from three stores closed in fiscal 2000 and fiscal 2001), and $0.7 million of net sales from the Company's call center (website and mailer sales) which began operations in late May 2000. Net sales to franchisees for the current period increased by $0.5 million or 63.2% 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 one additional franchised location in fiscal 2001 by an existing franchisee. Gross Profit. Gross profit for the current period was $40.7 million, or 58.9% of net sales, compared with $23.4 million, or 58.5% of net sales, for the prior period. The increase in the gross profit percentage primarily resulted from leverage in the Company's distribution center, product development and merchandising costs, and to a lesser degree, a decrease in the Company's overall markdowns. General, Administrative and Store Operating Expenses. General, administrative and store operating expenses increased to $28.1 million, or 40.8% of net sales, in the current period from $16.9 million, or 42.2% 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 decrease in these expenses as a percentage of net sales was principally due to leverage associated with the Company's 39.1% comparable Company store sales increase for the current period, net of an increase in marketing expenses as a percentage of net sales. Interest Income, Net. The Company had net interest income during the current period of approximately $88,000 versus approximately $51,000 in the prior period. The increase in net interest income was primarily a result of the Company's increased cash and marketable securities position, as well as improved interest rates earned on cash and marketable securities. Net Income. As a result of the factors discussed above, net income reflects an increase of 91.7% to $7.8 million in the current period from net income of $4.1 million in the prior period. The income tax provision represented an effective rate of 38.0% for the current and prior period. 7 Results of Operations - Thirty-Nine Weeks Ending October 28, 2000 Compared to - --------------------- the Thirty-Nine Weeks Ended October 30, 1999. Net Sales. Net sales by Company-owned stores for the thirty-nine weeks ended October 28, 2000 (the current period) increased by $71.9 million, or 64.6%, over net sales by Company-owned stores for the comparable thirty-nine weeks ended October 30, 1999 (the prior period). The increase was the result of a comparable Company store net sales increase of $38.0 million, $33.0 million additional sales from the new stores not yet included in the Company's comparable store base (net of sales of $1.0 million from five stores closed in fiscal 2000 and fiscal 2001), and $0.9 million of net sales from the Company's call center (website and mailer phone sales) which began operations in late May 2000. Net sales to franchisees for the current period increased by $1.3 million or 62.3% 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 by an existing franchisee of one additional franchised location in each of fiscal 2001 and fiscal 2000. Gross Profit. Gross profit for the current period was $109.6 million, or 58.8% of net sales, compared with $66.2 million, or 58.5% of net sales, for the prior period. The increase in the gross profit percentage resulted from reduced markdowns in the current period versus the prior period, net of additional mailer-related promotional activities and increased volume of discounts, including those associated with expanding the Company's frequent shopper club (the "Passport Club") which was relaunched in the first quarter of last year, and net of a decline in the gross margins in the Company's seven outlet locations. To a lesser degree, the increase in gross profit percentage resulted from leverage in the Company's distribution center, product development and merchandising costs. General, Administrative and Store Operating Expenses. General, administrative and store operating expenses increased to $73.4 million, or 39.4% of net sales, in the current period from $46.6 million, or 41.1% 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 decrease in these expenses as a percentage of net sales was principally due to leverage associated with the Company's 34.9% comparable Company store sales increase for the current period, net of an increase in marketing expenses as a percentage of sales. Interest Income, Net. The Company had net interest income during the current period of $0.4 million versus $0.1 million in the prior period. The increase in net interest income was primarily a result of the Company's increased cash and marketable securities position, as well as improved interest rates earned on cash and marketable securities. Net Income. As a result of the factors discussed above, net income reflects an increase of 85.2% to $22.7 million in the current period from net income of $12.2 million in the prior period. The income tax provision represented an effective rate of 38.0% for the current and prior period. 8 Comparable Company Store Net Sales - ---------------------------------- Comparable Company store net sales increased by 39.1% in the current quarter and 34.9% in the first nine months of this fiscal year when compared to the comparable prior periods. 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 24 stores that were expanded, within the last 13 months, by an average of 739 net square selling feet. 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 37.4 % for the current quarter and 33.0% for the first nine months of this fiscal year. The Company does not consider this material to the overall comparable sales 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. Liquidity and Capital Resources - ------------------------------- The Company's primary ongoing capital requirements are for funding capital expenditures for new store openings and merchandise inventory purchases. In addition, over the past nine months and continuing over the next six months, the Company has experienced and anticipates continuing to experience the need for capital to address expansions of its office and design facility at its headquarters, the chain-wide roll out of new point-of-sale devices and the development of infrastructure, including internal call and fulfillment centers, to support the Company's current expansion into catalog and Internet sales. During the first three quarters of the current fiscal year (fiscal 2001) and the first three quarters of the prior fiscal year (fiscal 2000), the Company's primary source of working capital was cash flow from operations of $26.9 million and $13.3 million, respectively. The increase in cash flow from operations of $13.6 million was primarily due to an increase of $10.4 million in net income, an increase of $8.8 million in accounts payable and accrued liabilities, and an increase of $1.7 million in depreciation and amortization, net of an increase in inventories of $6.9 million, and an increase in deferred taxes of $0.4 million. The increase in accounts payable and inventories is associated with increased inventory purchase activities to support the Company's significant overall sales increases and, to a lesser degree, with increased fabric purchases (which generally have an extended payment due date). The Company invested $27.8 million in the first three quarters of the current fiscal year for capital expenditures. The capital expenditures for the first three quarters of the current fiscal year included $20.4 million primarily associated with the planning and opening of new Company stores, and the remodeling/relocating/expansion of numerous existing stores, $3.1 million for new point-of-sale devices, approximately $2.5 million for the expansion of its office and design facilities, and approximately $1.8 million for the development of infrastructure associated with catalog and Internet sales. During the same period in the prior fiscal year, the Company invested $9.6 million primarily for capital expenditures associated with the opening of new Company stores, and the remodeling of several existing stores. During the first three quarters of the current fiscal year, two of the Company's officers and its three independent directors exercised 248,735 stock options at prices ranging from $1.625 to $11.344 and several employees and former employees exercised 102,819 options at prices ranging from $1.625 to $13.125. Also during this period, the Company sold 13,155 shares of common stock under its employee 9 stock purchase plan at a price of $15.25. The proceeds from these issuances of stock, together with the tax benefit recognized by the Company, amounted to approximately $4.0 million. As more fully described in "Item 1-Business" beginning on page 13 of the Company's Annual Report on Form 10-K for the fiscal year ended January 29, 2000, 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 approximately 50 Company-owned new stores in fiscal 2001, 34 of which were open as of October 28, 2000. Further, the Company plans to open between 50 and 55 Company-owned new stores in fiscal 2002. The Company believes that the liquidity needed for its planned new store growth, continuing remodel/expansion program, maintenance of proper inventory levels associated with this growth, expansion of its office and design facilities and establishment of catalog and Internet sales activities will be funded primarily from cash flow from operations and its strong existing cash 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. In further support of its liquidity needs, the Company expanded its line of credit and letter of credit facilities to $25 million, effective May 2000. 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. 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 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 10 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 October 28, 2000 has not significantly changed since October 28, 2000. 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 October 28, 2000, 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 $5.2 million mortgage loan indebtedness which bears a variable interest rate based upon changes in the prime rate. PART II - OTHER INFORMATION - --------------------------- ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits: 10.1 Amendment No. 1 to Employment Agreement between the Company and Charles J. Kleman, effective as of August 21, 2000 10.2 Amendment No. 1 to Employment Agreement between the Company and Scott A. Edmonds, effective as of August 21, 2000 10.3 Amendment No. 1 to Employment Agreement between the Company and Mori C. MacKenzie, effective as of August 21, 2000 10.4 Employment Agreement between the Company and Patricia A. Murphy, effective as of August 21, 2000 10.5 Stock Option Agreement between the Company and Tedford G. Marlow, effective as of September 6, 2000 11 10.6 Stock Option Agreement between the Company and Tedford G. Marlow, effective as of September 6, 2000 27 Financial Data Schedule (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: December 7, 2000 By: /s/ Marvin J. Gralnick ----------------------------- ---------------------------------- Marvin J. Gralnick Chief Executive Officer (Principal Executive Officer) Date: December 7, 2000 By: /s/ Charles J. Kleman ----------------------------- ----------------------------------- Charles J. Kleman Chief Financial Officer (Principal Financial and Accounting Officer) 12 EX-10.1 2 0002.txt AMEND AGREE BETW CO AND CHARLES KLEMAN EXHIBIT 10.1 AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT THIS AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT is made and entered into this 13th day of September, 2000, to be effective for all purposes as of August 21, 2000, by and between CHICO'S FAS, INC., a Florida corporation (the "Company"), and CHARLIE J. KLEMAN, residing at 12330 McGregor Woods Circle, Ft. Myers, Florida, 33908 (the "Employee"). W I T N E S S E T H: - - - - - - - - - - WHEREAS, the parties hereto have entered into that certain Employment Agreement dated March 18, 1993 by and between the Company and the Employee (the "Employment Agreement"); and WHEREAS, the Company and the Employee have agreed to amend the terms of the Employment Agreement in certain respects as set forth in this Amendment No. 1 to Employment Agreement (the "Amendment"). 1. TERM Section 2 of the Employment Agreement shall be replaced in its entirety by the following: Subject to the provisions of termination as hereinafter provided, the term of employment under this Agreement shall be effective as of the date first above written and shall continue through December 31, 2001; provided, however, that beginning on December 31, 2000 and on each December 31st (each a "Renewal Date") thereafter, the term of this agreement shall automatically be extended for one additional year so that on each Renewal Date the then remaining unexpired term of this Agreement shall be two years, unless either party gives the other written notice of non-renewal at least ninety (90) days prior to any such Renewal Date. 2. COMPENSATION Sections 3(a) and (b) of the Employment Agreement shall be replaced in their entirety by the following, with the specified annualized salary effective from February 7, 2000: (a) The Employer shall pay to the Employee as compensation for all services rendered by the Employee during the term of this Agreement a basic annualized salary of $285,000 per year (the "Basic Salary"), or such other sum as the parties may agree on from time to time, payable monthly or in other more frequent 1. installments, as determined by the Employer. The Board of Directors of the Employer shall have the right to increase the Employee's compensation from time to time by action of the Board of Directors. In addition, the Board of Directors of the Employer, in its discretion, may, with respect to any year during the term hereof, award a bonus or bonuses to the Employee in addition to the bonuses provided for in Section 3(b). The compensation provided for in this Section 3(a) shall be in addition to any pension or profit sharing payments set aside or allocated for the benefit of the Employee. (b) In addition to the Basic Salary paid pursuant to Section 3(a), the Employer shall pay as incentive compensation a semi annual bonus based upon the Employee's performance and computed in accordance with the incentive bonus plan adopted each year by the Board of Directors of the Employer. 3. DUTIES Section 4 of the Employment Agreement shall be replaced in its entirety as follows: 4. Duties. The Employee is engaged as the Executive Vice President - ------ Finance and Chief Financial Officer. In addition, the Employee shall have such other duties and hold such other offices as may from time to time be reasonably assigned to him by the Board of Directors of the Employer. 4. OTHER TERMINATIONS Section 8(c)(i) of the Employment Agreement shall be replaced in its entirety as follows: (i) If the Employer shall terminate the employment of the Employee without good cause effective on a date earlier than the termination date provided for in Section 2 (with the effective date of termination as so identified by the Employer being referred to herein as the "Accelerated Termination Date"), the Employee, until the termination date provided for in Section 2 or until the date which is twelve (12) months after the Accelerated Termination Date, whichever is later, shall continue to receive the Basic Salary and other compensation and employee benefits (including without limitation the bonus that would otherwise have been payable during such compensation continuation period under the bonus plan in effect immediately before the Accelerated Termination Date) that the Employer has heretofore in Section 3 agreed to pay and to provide for the Employee, in each case in the amount and kind and at the time provided for in Section 3; provided that, notwithstanding such termination of employment, the Employee's covenants set forth in Section 10 and Section 11 are intended to and shall remain in full force and effect. Section 8(d)(i) of the Employment Agreement shall be replaced in its entirety as follows: 2. (i) If a Change in Control of the Employer, as defined in Section 8(d)(ii) shall occur and the Employee shall: (1) voluntarily terminate his employment within one year following such Change in Control and such termination shall be as a result of the Employee's good faith determination that as a result of the Change in Control and a change in circumstances thereafter significantly affecting his position, he can no longer adequately exercise the authorities, powers, functions or duties attached to his position as an executive officer of the Employer; or (2) voluntarily terminate his employment within one year following such Change in Control, and such termination shall be as a result of the Employee's good faith determination that he can no longer perform his duties as an executive officer of the Employer by reason of a substantial diminution in his responsibilities, status or position; or (3) have his employment terminated by the Employer for reasons other than those specified in Section 8(b)(ii) within one (1) year following such Change in Control; then in any of the above three cases, the Employee shall have, instead of the further rights described in Section 3(a), the right to immediately terminate this Agreement and a nonforfeitable right to receive, payable in a lump sum, the sum of the monthly amounts of his Basic Salary for a period equal to 36 months plus three times his most recently set annual target bonus; provided, however, no payments or benefits pursuant to this Section, together with any other payments to the Employee under this Agreement or otherwise, shall cause the total of such payments to exceed the maximum amount allowable as a deduction to the Employer for federal income tax purposes, as may be determined in the reasonable discretion of the Employer, under any applicable provision of law or regulations. The following Section 8(f) shall be added: (f) Release. Payment of any compensation to the Employee under this ------- Section 8 following termination of employment shall be conditioned upon the prior receipt by the Employer of a release executed by the Employee in substantially the form attached to this Agreement as Exhibit A. 3. 5. MISCELLANEOUS Unless specifically modified, added or deleted by this Amendment No.1, all terms and provisions of the Employment Agreement remain in full force and effect throughout the term of the Employment Agreement, as amended. IN WITNESS WHEREOF, the parties hereto have executed this Amendment the day and year first above written. CHICO'S FAS, INC. By: /s/ Marvin Gralnick -------------------------- Marvin J. Gralnick, President "Company" /s/ Charlie Kleman ---------------------------- CHARLIE J. KLEMAN "Employee" 4. EXHIBIT A TO EMPLOYMENT AGREEMENT WITH CHARLIE J. KLEMAN DATED AS OF _______________, 2000 Release WHEREAS, _______________________________ (the "Executive") is an employee of Chico's FAS, Inc., (the "Company") and is a party to the Employment Agreement dated __________________ (the "Agreement"); WHEREAS, the Executive's employment has been terminated in accordance with Section 8___ of the Agreement; and WHEREAS, the Executive is required to sign this Release in order to receive the payment of any compensation under Section 8 of the Agreement following termination of employment. NOW, THEREFORE, in consideration of the promises and agreements contained herein and other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, and intending to be legally bound, the Executive agrees as follows: 1. This Release is effective on the date hereof and will continue in effect as provided herein. 2. In consideration of the payments to be made and the benefits to be received by the Executive pursuant to the Agreement (collectively, the "Release Consideration), which the Executive acknowledges are in addition to payments and benefits to which the Executive would be entitled but for the Agreement, the Executive, for the Executive and the Executive's dependents, successors, assigns, heirs, executors and administrators (and the Executive and their legal representatives of every kind), hereby releases, dismisses, remises and forever discharges the Company, its predecessors, parents, subsidiaries, divisions, related or affiliated companies, officers, directors, stockholders, members, employees, heirs, successors, assigns, representatives, agents and counsel (collectively the "Released Party") from any and all arbitrations, claims, including claims for attorney's fees, demands, damages, suits, proceedings, actions and/or causes of action of any kind and every description, whether known or unknown, which the Executive now has or may have had for, upon, or by reason of any cause whatsoever ("claims"), against the Released Party, including but not limited to: (1) any and all claims arising out of or relating to Executive's employment by or service with the Company and the Executive's termination from the Company. (2) any and all claims of discrimination, including but not limited to claims of discrimination on the basis of sex, race, age, national origin, marital status, religion or handicap, including, specifically, but without limiting the generality of the foregoing, any claims under the Age Discrimination in Employment Act, as A-1. amended, Title VII of the Civil Rights Act of 1964, as amended, the Americans with Disabilities Act; and (3) any and all claims of wrongful or unjust discharge or breach of any contract or promise, express or implied. Notwithstanding the foregoing, nothing herein shall be considered as releasing the Company from its obligations to pay and/or provide the Release Consideration or as an agreement by the Executive not to file a lawsuit to enforce the payment and/or providing of the Release Consideration. 3. The Executive understands and acknowledges that the Company does not admit any violation of law, liability or invasion of any of the Executive rights and that any such violation, liability or invasion is expressly denied. The consideration provided for this Release is made for the purpose of settling and extinguishing all claims and rights (and every other similar or dissimilar matter) that the Executive ever had or now may have against the Company to the extent provided in this Release. The Executive further agrees and acknowledges that no representations, promises or inducements have been made that the Company other than as appear in the Agreement. 4. The Executive further agrees and acknowledges that: (1) The Release provided for herein releases claims to and including the date of this Release; (2) The Executive has been advised by the Company to consult with legal counsel prior to executing this Release, has had an opportunity to consult with and to be advised by legal counsel of the Executive's choice, fully understands the terms of this Release, and enters into this Release freely, voluntarily and intending to be found. (3) The Executive has been given a period of 21 days to review and consider the terms of this Release, prior to its execution and that the Executive may use as much of the 21 day period as the Executive desires; and (4) The Executive may, within 7 days after execution, revoke this Release. Revocation shall be made by delivering a written notice of revocation to the Chief Financial Officer at the Company. For such revocation to be effective, written notice must be actually received by the Chief Financial Officer at the Company no later than the close of business on the 7th day after the Executive executes this Release. If the Executive does exercise the Executive's right to revoke this Release, all of the terms and conditions of the Release shall be of no force and effect and the Company shall not have any obligation to make payments or provide benefits to the Executive as set forth in Sections 8 of the Agreement. 5. The Executive agrees that the Executive will never file a lawsuit or other complaint asserting any claim that is released in this Release. A-2. 6. The Executive waives and releases any claim that the Executive has or may have to reemployment after ________________________________. IN WITNESS WHEREOF, the Executive has executed and delivered this Release on the date set forth below. Dated:_______________________ Executive A-3. EX-10.2 3 0003.txt AMEND AGREE BETW CO AND SCOTT EDMONDS EXHIBIT 10.2 AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT THIS AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT is made and entered into this 13th day of September, 2000, to be effective for all purposes as of August 21, 2000, by and between CHICO'S FAS, INC., a Florida corporation (the "Company"), and SCOTT A. EDMONDS, residing at 14360 Bigelow Road, Ft. Myers, Florida, 33905 (the "Employee"). W I T N E S S E T H: - - - - - - - - - - WHEREAS, the parties hereto have entered into that certain Employment Agreement dated June 28, 1995 by and between the Company and the Employee (the "Employment Agreement"); and WHEREAS, the Company and the Employee have agreed to amend the terms of the Employment Agreement in certain respects as set forth in this Amendment No. 1 to Employment Agreement (the "Amendment"). 1. TERM Section 2 of the Employment Agreement shall be replaced in its entirety by the following: Subject to the provisions of termination as hereinafter provided, the term of employment under this Agreement shall be effective as of the date first above written and shall continue through February 28, 2002; provided, however, that beginning on February 28, 2001 and on each February 28th (each a "Renewal Date") thereafter, the term of this agreement shall automatically be extended for one additional year so that on each Renewal Date the then remaining unexpired term of this Agreement shall be two years, unless either party gives the other written notice of non-renewal at least ninety (90) days prior to any such Renewal Date. 2. COMPENSATION Sections 3(a) and (b) of the Employment Agreement shall be replaced in their entirety by the following, with the specified annualized salary effective from February 7, 2000: (a) The Employer shall pay to the Employee as compensation for all services rendered by the Employee during the term of this Agreement a basic annualized salary of $275,000 per year (the "Basic Salary"), or such other sum as the parties may agree on from time to time, payable monthly or in other more frequent installments, as determined by the Employer. The Board of Directors of the 1. Employer shall have the right to increase the Employee's compensation from time to time by action of the Board of Directors. In addition, the Board of Directors of the Employer, in its discretion, may, with respect to any year during the term hereof, award a bonus or bonuses to the Employee in addition to the bonuses provided for in Section 3(b). The compensation provided for in this Section 3(a) shall be in addition to any pension or profit sharing payments set aside or allocated for the benefit of the Employee. (b) In addition to the Basic Salary paid pursuant to Section 3(a), the Employer shall pay as incentive compensation a semi annual bonus based upon the Employee's performance and computed in accordance with the incentive bonus plan adopted each year by the Board of Directors of the Employer. 3. DUTIES Section 4 of the Employment Agreement shall be replaced in its entirety as follows: 4. Duties. The Employee is engaged as the Chief Operating Officer. ------ In addition, the Employee shall have such other duties and hold such other offices as may from time to time be reasonably assigned to him by the Board of Directors of the Employer. 4. OTHER TERMINATIONS Section 8(c)(i) of the Employment Agreement shall be replaced in its entirety as follows: (i) If the Employer shall terminate the employment of the Employee without good cause effective on a date earlier than the termination date provided for in Section 2 (with the effective date of termination as so identified by the Employer being referred to herein as the "Accelerated Termination Date"), the Employee, until the termination date provided for in Section 2 or until the date which is twelve (12) months after the Accelerated Termination Date, whichever is later, shall continue to receive the Basic Salary and other compensation and employee benefits (including without limitation the bonus that would otherwise have been payable during such compensation continuation period under the bonus plan in effect immediately before the Accelerated Termination Date) that the Employer has heretofore in Section 3 agreed to pay and to provide for the Employee, in each case in the amount and kind and at the time provided for in Section 3; provided that, notwithstanding such termination of employment, the Employee's covenants set forth in Section 10 and Section 11 are intended to and shall remain in full force and effect. Section 8(d)(i) of the Employment Agreement shall be replaced in its entirety as follows: 2. (i) If a Change in Control of the Employer, as defined in Section 8(d)(ii) shall occur and the Employee shall: (1) voluntarily terminate his employment within one year following such Change in Control and such termination shall be as a result of the Employee's good faith determination that as a result of the Change in Control and a change in circumstances thereafter significantly affecting his position, he can no longer adequately exercise the authorities, powers, functions or duties attached to his position as an executive officer of the Employer; or (2) voluntarily terminate his employment within one year following such Change in Control, and such termination shall be as a result of the Employee's good faith determination that he can no longer perform his duties as an executive officer of the Employer by reason of a substantial diminution in his responsibilities, status or position; or (3) have his employment terminated by the Employer for reasons other than those specified in Section 8(b)(ii) within one (1) year following such Change in Control; then in any of the above three cases, the Employee shall have, instead of the further rights described in Section 3(a), the right to immediately terminate this Agreement and a nonforfeitable right to receive, payable in a lump sum, the sum of the monthly amounts of his Basic Salary for a period equal to 36 months plus three times his most recently set annual target bonus; provided, however, no payments or benefits pursuant to this Section, together with any other payments to the Employee under this Agreement or otherwise, shall cause the total of such payments to exceed the maximum amount allowable as a deduction to the Employer for federal income tax purposes, as may be determined in the reasonable discretion of the Employer, under any applicable provision of law or regulations. The following Section 8(f) shall be added: (f) Release. Payment of any compensation to the Employee under this ------- Section 8 following termination of employment shall be conditioned upon the prior receipt by the Employer of a release executed by the Employee in substantially the form attached to this Agreement as Exhibit A. 5. MISCELLANEOUS 3. Unless specifically modified, added or deleted by this Amendment No.1, all terms and provisions of the Employment Agreement remain in full force and effect throughout the term of the Employment Agreement, as amended. IN WITNESS WHEREOF, the parties hereto have executed this Amendment the day and year first above written. CHICO'S FAS, INC. By: /s/ Marvin Gralnick --------------------------------------- Marvin J. Gralnick, President "Company" /s/ Scott A. Edmonds ------------------------------------------- SCOTT A. EDMONDS "Employee" 4. EXHIBIT A TO EMPLOYMENT AGREEMENT WITH SCOTT A. EDMONDS DATED AS OF _______________, 2000 Release WHEREAS, _______________________________ (the "Executive") is an employee of Chico's FAS, Inc., (the "Company") and is a party to the Employment Agreement dated __________________ (the "Agreement"); WHEREAS, the Executive's employment has been terminated in accordance with Section 8___ of the Agreement; and WHEREAS, the Executive is required to sign this Release in order to receive the payment of any compensation under Section 8 of the Agreement following termination of employment. NOW, THEREFORE, in consideration of the promises and agreements contained herein and other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, and intending to be legally bound, the Executive agrees as follows: 1. This Release is effective on the date hereof and will continue in effect as provided herein. 2. In consideration of the payments to be made and the benefits to be received by the Executive pursuant to the Agreement (collectively, the "Release Consideration), which the Executive acknowledges are in addition to payments and benefits to which the Executive would be entitled but for the Agreement, the Executive, for the Executive and the Executive's dependents, successors, assigns, heirs, executors and administrators (and the Executive and their legal representatives of every kind), hereby releases, dismisses, remises and forever discharges the Company, its predecessors, parents, subsidiaries, divisions, related or affiliated companies, officers, directors, stockholders, members, employees, heirs, successors, assigns, representatives, agents and counsel (collectively the "Released Party") from any and all arbitrations, claims, including claims for attorney's fees, demands, damages, suits, proceedings, actions and/or causes of action of any kind and every description, whether known or unknown, which the Executive now has or may have had for, upon, or by reason of any cause whatsoever ("claims"), against the Released Party, including but not limited to: (1) any and all claims arising out of or relating to Executive's employment by or service with the Company and the Executive's termination from the Company. (2) any and all claims of discrimination, including but not limited to claims of discrimination on the basis of sex, race, age, national origin, marital status, religion or handicap, including, specifically, but without limiting the generality of the foregoing, any claims under the Age Discrimination in Employment Act, as A-1. amended, Title VII of the Civil Rights Act of 1964, as amended, the Americans with Disabilities Act; and (3) any and all claims of wrongful or unjust discharge or breach of any contract or promise, express or implied. Notwithstanding the foregoing, nothing herein shall be considered as releasing the Company from its obligations to pay and/or provide the Release Consideration or as an agreement by the Executive not to file a lawsuit to enforce the payment and/or providing of the Release Consideration. 3. The Executive understands and acknowledges that the Company does not admit any violation of law, liability or invasion of any of the Executive rights and that any such violation, liability or invasion is expressly denied. The consideration provided for this Release is made for the purpose of settling and extinguishing all claims and rights (and every other similar or dissimilar matter) that the Executive ever had or now may have against the Company to the extent provided in this Release. The Executive further agrees and acknowledges that no representations, promises or inducements have been made that the Company other than as appear in the Agreement. 4. The Executive further agrees and acknowledges that: (1) The Release provided for herein releases claims to and including the date of this Release; (2) The Executive has been advised by the Company to consult with legal counsel prior to executing this Release, has had an opportunity to consult with and to be advised by legal counsel of the Executive's choice, fully understands the terms of this Release, and enters into this Release freely, voluntarily and intending to be found. (3) The Executive has been given a period of 21 days to review and consider the terms of this Release, prior to its execution and that the Executive may use as much of the 21 day period as the Executive desires; and (4) The Executive may, within 7 days after execution, revoke this Release. Revocation shall be made by delivering a written notice of revocation to the Chief Financial Officer at the Company. For such revocation to be effective, written notice must be actually received by the Chief Financial Officer at the Company no later than the close of business on the 7th day after the Executive executes this Release. If the Executive does exercise the Executive's right to revoke this Release, all of the terms and conditions of the Release shall be of no force and effect and the Company shall not have any obligation to make payments or provide benefits to the Executive as set forth in Sections 8 of the Agreement. 5. The Executive agrees that the Executive will never file a lawsuit or other complaint asserting any claim that is released in this Release. A-2. 6. The Executive waives and releases any claim that the Executive has or may have to reemployment after________________________________________. IN WITNESS WHEREOF, the Executive has executed and delivered this Release on the date set forth below. Dated:_______________________ Executive A-3. EX-10.3 4 0004.txt AMEND AGREE BETW CO AND MORI MACKENZIE EXHIBIT 10.3 AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT THIS AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT is made and entered into this 21st day of September, 2000, to be effective for all purposes as of August 21, 2000, by and between CHICO'S FAS, INC., a Florida corporation (the "Company"), and MORI CAMERON MACKENZIE, residing at 23561 Sandy Creek Terrace, #1305, Bonita Springs, Florida 34135 (the "Employee"). W I T N E S S E T H: - - - - - - - - - - WHEREAS, the parties hereto have entered into that certain Employment Agreement dated September 26, 1995 by and between the Company and the Employee (the "Employment Agreement"); and WHEREAS, the Company and the Employee have agreed to amend the terms of the Employment Agreement in certain respects as set forth in this Amendment No. 1 to Employment Agreement (the "Amendment"). [1. TERM Section 2 of the Employment Agreement shall be replaced in its entirety by the following: Subject to the provisions of termination as hereinafter provided, the term of employment under this Agreement shall be effective as of October 9, 1995 and shall continue through September 30, 2001; provided, however, that beginning on September 30, 2000 and on each September 30th (each a "Renewal Date") thereafter, the term of this agreement shall automatically be extended for one additional year so that on each Renewal Date the then remaining unexpired term of this Agreement shall be two years, unless either party gives the other written notice of non-renewal at least ninety (90) days prior to any such Renewal Date.] 2. COMPENSATION Section 3(a) of the Employment Agreement shall be replaced in its entirety by the following, with the specified annualized salary effective from February 7, 2000: (a) The Employer shall pay to the Employee as compensation for all services rendered by the Employee during the term of this Agreement a basic annualized salary of $195,000 per year (the "Basic Salary"), or such other sum as the 1. parties may agree on from time to time, payable monthly or in other more frequent installments, as determined by the Employer. The Board of Directors of the Employer shall have the right to increase the Employee's compensation from time to time by action of the Board of Directors. In addition, the Board of Directors of the Employer, in its discretion, may, with respect to any year during the term hereof, award a bonus or bonuses to the Employee in addition to the bonuses provided for in Section 3(b). The compensation provided for in this Section 3(a) shall be in addition to any pension or profit sharing payments set aside or allocated for the benefit of the Employee. 3. DUTIES Section 4 of the Employment Agreement shall be replaced in its entirety as follows: 4. Duties. The Employee is engaged as the Vice President - Director ------ of Stores. In addition, the Employee shall have such other duties and hold such other offices as may from time to time be reasonably assigned to her by the Board of Directors of the Employer. 4. OTHER TERMINATIONS Section 8(c)(i) of the Employment Agreement shall be replaced in its entirety as follows: (i) If the Employer shall terminate the employment of the Employee without good cause effective on a date earlier than the termination date provided for in Section 2 (with the effective date of termination as so identified by the Employer being referred to herein as the "Accelerated Termination Date"), the Employee, until the termination date provided for in Section 2 or until the date which is twelve (12) months after the Accelerated Termination Date, whichever is later, shall continue to receive the Basic Salary and other compensation and employee benefits (including without limitation the bonus that would otherwise have been payable during such compensation continuation period under the bonus plan in effect immediately before the Accelerated Termination Date) that the Employer has heretofore in Section 3 agreed to pay and to provide for the Employee, in each case in the amount and kind and at the time provided for in Section 3; provided that, notwithstanding such termination of employment, the Employee's covenants set forth in Section 10 and Section 11 are intended to and shall remain in full force and effect. Section 8(d) of the Employment Agreement shall be replaced in its entirety by Sections 8(d), 8(e) and 8(f), as follows: (a) Rights Upon Change in Control. ----------------------------- 2. (i) If a Change in Control of the Employer, as defined in Section 8(d)(ii) shall occur and the Employee shall: (1) voluntarily terminate her employment within one year following such Change in Control and such termination shall be as a result of the Employee's good faith determination that as a result of the Change in Control and a change in circumstances thereafter significantly affecting her position, she can no longer adequately exercise the authorities, powers, functions or duties attached to her position as an executive officer of the Employer; or (2) voluntarily terminate her employment within one year following such Change in Control, and such termination shall be as a result of the Employee's good faith determination that she can no longer perform her duties as an executive officer of the Employer by reason of a substantial diminution in her responsibilities, status or position; or (3) have her employment terminated by the Employer for reasons other than those specified in Section 8(b)(ii) within one (1) year following such Change in Control; then in any of the above three cases, the Employee shall have, instead of the further rights described in Section 3(a), the right to immediately terminate this Agreement and a nonforfeitable right to receive the sum of the monthly amounts of her Basic Salary for a period equal to 36 months plus three times her most recently set annual target bonus. (ii) For purposes of this Agreement, a "Change in Control" shall mean: (1) the obtaining by any party of fifty percent (50%) or more of the voting shares of the Employer pursuant to a "tender offer" for such shares as provided under Rule 14d-2 promulgated under the Securities Exchange Act of 1934, as amended, or any subsequent comparable federal rule or regulation governing tender offers; or (2) individuals who were members of the Employer's Board of Directors immediately prior to any particular meeting of the Employer's shareholders which involves a contest for the election of directors fail to constitute a majority of the members of the Employer's Board of Directors following such election; or 3. (3) the Employer's executing an agreement concerning the sale of substantially all of its assets to a purchaser which is not a subsidiary; or (4) the Employer's adoption of a plan of dissolution or liquidation; or (5) the Employer's executing an agreement concerning a merger or consolidation involving the Employer in which the Employer is not the surviving corporation or if, immediately following such merger or consolidation, less than fifty percent (50%) of the surviving corporation's outstanding voting stock is held by persons who are stockholders of the Employer immediately prior to such merger or consolidation. (iii) The provisions of Section 8(c) and this Section 8(d) are mutually exclusive, provided, however, that if within one year following commencement of an 8(c) payout there shall be a Change in Control as defined in Section 8(d)(ii), then the Employee shall be entitled to the amount payable to the Employee under Section 8(d)(i) reduced by the amount that the Employee has received under Section 8(c) up to the date of the change in control. The triggering of the lump sum payment requirement of this Section 8(d) shall cause the provisions of Section 8(c) to become inoperative. The triggering of the continuation of payment provisions of Section 8(c) shall cause the provisions of Section 8(d) to become inoperative except to the extent provided in this Section 8(d)(iii). (b) Compensation Payable Upon Termination by Employer for Good Cause ---------------------------------------------------------------- or Voluntarily by Employee Absent Change in Control. If the employment of --------------------------------------------------- the Employee is terminated for good cause under Section 8(b)(ii) of this Agreement, or if the Employee voluntarily terminates her employment by written notice to the Employer under Section 8(a) of this Agreement without reliance on Section 8(d), the Employer shall pay to the Employee any compensation earned but not paid to the Employee prior to the effective date of such termination. Under such circumstances, such payment shall be in full and complete discharge of any and all liabilities or obligations of the Employer to the Employee hereunder, and the Employee shall be entitled to no further benefits under this Agreement. (c) Release. Payment of any compensation to the Employee under this ------- Section 8 following termination of employment shall be conditioned upon the prior receipt by the Employer of a release executed by the Employee in substantially the form attached to this Agreement as Exhibit A. 5. MISCELLANEOUS 4. Unless specifically modified, added or deleted by this Amendment No.1, all terms and provisions of the Employment Agreement remain in full force and effect throughout the term of the Employment Agreement, as amended. IN WITNESS WHEREOF, the parties hereto have executed this Amendment the day and year first above written. CHICO'S FAS, INC. By: /s/ Marvin Gralnick ----------------------- Marvin J. Gralnick, President "Company" /s/ Mori Cameron MacKenzie --------------------------------- MORI CAMERON MACKENZIE "Employee" 5. EXHIBIT A TO EMPLOYMENT AGREEMENT WITH MORI CAMERON MACKENZIE DATED AS OF _______________, 2000 Release WHEREAS, _______________________________ (the "Executive") is an employee of Chico's FAS, Inc., (the "Company") and is a party to the Employment Agreement dated __________________ (the "Agreement"); WHEREAS, the Executive's employment has been terminated in accordance with Section 8___ of the Agreement; and WHEREAS, the Executive is required to sign this Release in order to receive the payment of any compensation under Section 8 of the Agreement following termination of employment. NOW, THEREFORE, in consideration of the promises and agreements contained herein and other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, and intending to be legally bound, the Executive agrees as follows: 1. This Release is effective on the date hereof and will continue in effect as provided herein. 2. In consideration of the payments to be made and the benefits to be received by the Executive pursuant to the Agreement (collectively, the "Release Consideration), which the Executive acknowledges are in addition to payments and benefits to which the Executive would be entitled but for the Agreement, the Executive, for the Executive and the Executive's dependents, successors, assigns, heirs, executors and administrators (and the Executive and their legal representatives of every kind), hereby releases, dismisses, remises and forever discharges the Company, its predecessors, parents, subsidiaries, divisions, related or affiliated companies, officers, directors, stockholders, members, employees, heirs, successors, assigns, representatives, agents and counsel (collectively the "Released Party") from any and all arbitrations, claims, including claims for attorney's fees, demands, damages, suits, proceedings, actions and/or causes of action of any kind and every description, whether known or unknown, which the Executive now has or may have had for, upon, or by reason of any cause whatsoever ("claims"), against the Released Party, including but not limited to: (1) any and all claims arising out of or relating to Executive's employment by or service with the Company and the Executive's termination from the Company. (2) any and all claims of discrimination, including but not limited to claims of discrimination on the basis of sex, race, age, national origin, marital status, religion or handicap, including, specifically, but without limiting the generality of the foregoing, any claims under the Age Discrimination in Employment Act, as A-1. amended, Title VII of the Civil Rights Act of 1964, as amended, the Americans with Disabilities Act; and (3) any and all claims of wrongful or unjust discharge or breach of any contract or promise, express or implied. Notwithstanding the foregoing, nothing herein shall be considered as releasing the Company from its obligations to pay and/or provide the Release Consideration or as an agreement by the Executive not to file a lawsuit to enforce the payment and/or providing of the Release Consideration. 3. The Executive understands and acknowledges that the Company does not admit any violation of law, liability or invasion of any of the Executive rights and that any such violation, liability or invasion is expressly denied. The consideration provided for this Release is made for the purpose of settling and extinguishing all claims and rights (and every other similar or dissimilar matter) that the Executive ever had or now may have against the Company to the extent provided in this Release. The Executive further agrees and acknowledges that no representations, promises or inducements have been made that the Company other than as appear in the Agreement. 4. The Executive further agrees and acknowledges that: (1) The Release provided for herein releases claims to and including the date of this Release; (2) The Executive has been advised by the Company to consult with legal counsel prior to executing this Release, has had an opportunity to consult with and to be advised by legal counsel of the Executive's choice, fully understands the terms of this Release, and enters into this Release freely, voluntarily and intending to be found. (3) The Executive has been given a period of 21 days to review and consider the terms of this Release, prior to its execution and that the Executive may use as much of the 21 day period as the Executive desires; and (4) The Executive may, within 7 days after execution, revoke this Release. Revocation shall be made by delivering a written notice of revocation to the Chief Financial Officer at the Company. For such revocation to be effective, written notice must be actually received by the Chief Financial Officer at the Company no later than the close of business on the 7th day after the Executive executes this Release. If the Executive does exercise the Executive's right to revoke this Release, all of the terms and conditions of the Release shall be of no force and effect and the Company shall not have any obligation to make payments or provide benefits to the Executive as set forth in Sections 8 of the Agreement. 5. The Executive agrees that the Executive will never file a lawsuit or other complaint asserting any claim that is released in this Release. A-2. 6. The Executive waives and releases any claim that the Executive has or may have to reemployment after________________________. IN WITNESS WHEREOF, the Executive has executed and delivered this Release on the date set forth below. Dated:________________________ Executive A-3. EX-10.4 5 0005.txt EMPLOY AGREE BETW CO AND PATRICIA MURPHY EXHIBIT 10.4 EMPLOYMENT AGREEMENT -------------------- THIS EMPLOYMENT AGREEMENT is made and entered into as of the 21st day of August, 2000, by and between CHICO'S FAS, INC. a Florida corporation (the "Employer"), and PATRICIA MURPHY (the "Employee"). W I T N E S S E T H: - - - - - - - - - - 1. Employment. The Employer hereby employs the Employee, and the ---------- Employee hereby accepts such employment, upon the terms and subject to the conditions set forth in this Agreement. 2. Term. ---- Subject to the provisions of termination as hereinafter provided, the term of employment under this Agreement shall be effective as of the date first above written and shall continue through December 31, 2001; provided, however, that beginning on December 31, 2000 and on each December 31st (each a "Renewal Date") thereafter, the term of this agreement shall automatically be extended for one additional year so that on each Renewal Date the then remaining unexpired term of this Agreement shall be two years, unless either party gives the other written notice of non-renewal at least ninety (90) days prior to any such Renewal Date. 3. Compensation; Reimbursement, Etc. --------------------------------- (a) The Employer shall pay to the Employee as compensation for all services rendered by the Employee during the term of this Agreement a basic annualized salary of $240,000 per year (the "Basic Salary"), or such other sum as the parties may agree on from time to time, payable monthly or in other more frequent installments, as determined by the Employer. The Board of Directors of the Employer shall have the right to increase the Employee's compensation from time to time by action of the Board of Directors. In addition, the Board of Directors of the Employer, in its discretion, may, with respect to any year during the term hereof, award a bonus or bonuses to the Employee in addition to the bonuses provided for in Section 3(b). The compensation provided for in this Section 3(a) shall be in addition to any pension or profit sharing payments set aside or allocated for the benefit of the Employee. (b) In addition to the Basic Salary paid pursuant to Section 3(a), the Employer shall pay as incentive compensation a semi annual bonus based upon the Employee's performance and computed in accordance with the incentive bonus plan adopted each year by the Board of Directors of the Employer. (c) The Employer shall reimburse the Employee for all reasonable expenses incurred by the Employee in the performance of her duties under this Agreement; provided, however, that the Employee must furnish to the Employer an itemized account, satisfactory to the Employer, in substantiation of such expenditures. (d) The Employee shall be entitled to such fringe benefits including, but not limited to, medical and insurance benefits as may be provided from time to time by the Employer to other management employees of the Employer. (e) The Employee shall provide her own automobile for use as an employee hereunder. The Employee shall at all times maintain said automobile in good repair and condition and shall insure both Employer and Employee against claims for bodily injury, death or property damage occurring as a result of its use to the limit of not less than Five Hundred Thousand ($500,000.00) Dollars in respect to any one accident and to the limit of not less than One Million ($1,000,000.00) Dollars in respect to any one accident and to the limit of not less than One Hundred Thousand ($100,000.00) Dollars in respect to property damage. The Employer shall provide the Executive with an automobile allowance of $1,000 per month ($12,000 per year). 4. Duties. The Employee is engaged as the Senior Vice President - ------ General Merchandise Manager. In addition, the Employee shall have such other duties as may from time to time be reasonably assigned to her by the Board of Directors of the Employer. 5. Extent of Services; Vacations and Days Off. ------------------------------------------ (a) During the term of her employment under this Agreement, the Employee shall devote such time, energy and attention during regular business hours to the benefit and business of the Employer as may be reasonably necessary in performing her duties pursuant to this Agreement. (b) The Employee shall be entitled to vacations with pay and to such personal and sick leave with pay in accordance with the policy of the Employer as may be established from time to time by the Employer. 6. Facilities. The Employer shall provide the Employee with a fully ---------- furnished office, and the facilities of the Employer shall be generally available to the Employee in the performance of her duties pursuant to this Agreement, it being understood and contemplated by the parties that all equipment, supplies and office personnel required in the performance of the Employee's duties under this Agreement shall be supplied by the Employer. 7. Illness or Incapacity, Termination on Death, Etc. ------------------------------------------------- (a) If the Employee dies during the term of her employment, the Employer shall pay to the estate of the Employee such compensation, including any bonus compensation earned but not yet paid, as would otherwise have been payable to the Employee up to the end of the month in which her death occurs plus six (6) month's additional compensation. The Employer shall have no additional financial obligation under this Agreement to the Employee or her estate. After receiving 2. the payments provided in this subparagraph (a), the Employee and her estate shall have no further rights under this Agreement. (b) (i) During any period of disability, illness or incapacity during the term of this Agreement which renders the Employee at least temporarily unable to perform the services required under this Agreement for a period which shall not equal or exceed one hundred and eighty (180) continuous days, or one hundred and eighty (180) continuous days in any one (1) year period, the Employee shall receive the compensation payable under Section 3(a) of this Agreement plus any bonus compensation earned but not yet paid, less any benefits received by her under any disability insurance carried by or provided by the Employer. All rights of the Employee under this Agreement (other than rights already accrued) shall terminate as provided below upon the Employee's permanent disability (as defined below), although the Employee shall continue to receive any disability benefits to which she may be entitled under any disability income insurance which may be carried by or provided by the Employer from time to time. (ii) The term "permanent disability" as used in this Agreement shall mean the inability of the Employee, as determined by the Board of Directors of the Employer, by reason of physical or mental disability to perform the duties required of her under this Agreement for a period of one hundred and eighty (180) days in any one-year period. Successive periods of disability, illness or incapacity will be considered separate periods unless the later period of disability, illness or incapacity is due to the same or related cause and commences less than six months from the ending of the previous period of disability. Upon such determination, the Board of Directors may terminate the Employee's employment under this Agreement upon ten (10) days' prior written notice. If any determination of the Board of Directors with respect to permanent disability is disputed by the Employee, the parties hereto agree to abide by the decision of a panel of three physicians. The Employee and Employer shall each appoint one member, and the third member of the panel shall be appointed by the other two members. The Employee agrees to make herself available for and submit to examinations by such physicians as may be directed by the Employer. Failure to submit to any such examination shall constitute a breach of a material part of this Agreement. 8. Other Terminations. ------------------ (a) Voluntary Termination By Executive. ---------------------------------- (i) The Employee may terminate her employment hereunder upon giving at least ninety (90) days' prior written notice. (ii) If the Employee gives notice pursuant to Section 8(a) above, the Employer shall have the right to relieve the Employee, in whole or in part, of her duties under this Agreement (without reduction in compensation through the termination date). (b) Termination by Employer. ----------------------- 3. (i) Except as otherwise provided in this Agreement, the Employer may terminate the employment of the Employee hereunder only for good cause and upon written notice; provided, however, that no breach or default by the Employee shall be deemed to occur hereunder unless the Employee shall have failed to cure the breach or default within thirty (30) days after she received written notice thereof indicating that it is a notice of termination pursuant to this Section of this Agreement. (ii) As used herein, "good cause" shall include: (1) the Employee's conviction of either a felony involving moral turpitude or any crime in connection with her employment by the Employer which causes the Employer a substantial detriment, but specifically shall not include traffic offenses; (2) actions by the Employee which clearly are contrary to the best interests of the Employer; (3) the Employee's willful failure to take actions permitted by law and necessary to implement policies of the Employer's Board of Directors which the Board of Directors has communicated to her in writing; (4) the Employee's continued failure to attend to her duties as an management employee of the Employer; or (5) any condition which either resulted from the Employee's substantial dependence, as determined by the Board of Directors of the Employer, on alcohol, or any narcotic drug or other controlled or illegal substance. If any determination of substantial dependence is disputed by the Employee, the parties hereto agree to abide by the decision of a panel of three physicians appointed in the manner and subject to the same penalties for noncompliance as specified in Section 7(b)(ii) of this Agreement. (iii) Termination of the employment of the Employee for reasons other than those expressly specified in this Agreement as good cause shall be deemed to be a termination of employment "without good cause." (c) Continuation of Compensation Following Termination Without Good --------------------------------------------------------------- Cause. - ----- (i) If the Employer shall terminate the employment of the Employee without good cause effective on a date earlier than the termination date provided for in Section 2 (with the effective date of termination as so identified by the Employer being referred to herein as the "Accelerated Termination Date"), the Employee, until the termination date provided for in Section 2 or until the date which is twelve (12) months after the Accelerated Termination Date, whichever is later, shall continue to receive the Basic Salary and other compensation and employee benefits (including without limitation the bonus that would otherwise have been payable during such 4. compensation continuation period under the bonus plan in effect immediately before the Accelerated Termination Date) that the Employer has heretofore in Section 3 agreed to pay and to provide for the Employee, in each case in the amount and kind and at the time provided for in Section 3; provided that, notwithstanding such termination of employment, the Employee's covenants set forth in Section 10 and Section 11 are intended to and shall remain in full force and effect. (ii) The parties agree that, because there can be no exact measure of the damage that would occur to the Employee as a result of a termination by the Employer of the Employee's employment without good cause, the payments and benefits paid and provided pursuant to this Section 8(c) shall be deemed to constitute liquidated damages and not a penalty for the Employer's termination of the Employee's employment without good cause, and the Employer agrees that the Employee shall not be required to mitigate her damages. (d) Rights Upon Change in Control. ----------------------------- (i) If a Change in Control of the Employer, as defined in Section 8(d)(ii) shall occur and the Employee shall: (1) voluntarily terminate her employment within one year following such Change in Control and such termination shall be as a result of the Employee's good faith determination that as a result of the Change in Control and a change in circumstances thereafter significantly affecting her position, she can no longer adequately exercise the authorities, powers, functions or duties attached to her position as an executive officer of the Employer; or (2) voluntarily terminate her employment within one year following such Change in Control, and such termination shall be as a result of the Employee's good faith determination that she can no longer perform her duties as an executive officer of the Employer by reason of a substantial diminution in her responsibilities, status or position; or (3) have her employment terminated by the Employer for reasons other than those specified in Section 8(b)(ii) within one (1) year following such Change in Control; then in any of the above three cases, the Employee shall have, instead of the further rights described in Section 3(a), the right to immediately terminate this Agreement and a nonforfeitable right to receive, payable in a lump sum, the sum of the monthly amounts of her Basic Salary for a period equal to the greater of 12 months or the number of full months remaining in the period from the date of such termination through the termination date provided for in Section 2 of this Agreement plus an amount equal to the aggregate of all bonuses earned by the Employee with respect to the 12 month period ended on the fiscal quarter end which next precedes such date of termination. 5. (ii) For purposes of this Agreement, a "Change in Control" shall mean: (1) the obtaining by any party of fifty percent (50%) or more of the voting shares of the Employer pursuant to a "tender offer" for such shares as provided under Rule 14d-2 promulgated under the Securities Exchange Act of 1934, as amended, or any subsequent comparable federal rule or regulation governing tender offers; or (2) individuals who were members of the Employer's Board of Directors immediately prior to any particular meeting of the Employer's shareholders which involves a contest for the election of directors fail to constitute a majority of the members of the Employer's Board of Directors following such election; or (3) the Employer's executing an agreement concerning the sale of substantially all of its assets to a purchaser which is not a subsidiary; or (4) the Employer's adoption of a plan of dissolution or liquidation; or (5) the Employer's executing an agreement concerning a merger or consolidation involving the Employer in which the Employer is not the surviving corporation or if, immediately following such merger or consolidation, less than fifty percent (50%) of the surviving corporation's outstanding voting stock is held by persons who are stockholders of the Employer immediately prior to such merger or consolidation. (iii) The provisions of Section 8(c) and this Section 8(d) are mutually exclusive, provided, however, that if within one year following commencement of an 8(c) payout there shall be a Change in Control as defined in Section 8(d)(ii), then the Employee shall be entitled to the amount payable to the Employee under Section 8(d)(i) reduced by the amount that the Employee has received under Section 8(c) up to the date of the change in control. The triggering of the lump sum payment requirement of this Section 8(d) shall cause the provisions of Section 8(c) to become inoperative. The triggering of the continuation of payment provisions of Section 8(c) shall cause the provisions of Section 8(d) to become inoperative except to the extent provided in this Section 8(d)(iii). (e) Compensation Payable Upon Termination by Employer for Good Cause ---------------------------------------------------------------- or Voluntarily by Employee Absent Change in Control. If the employment of the - --------------------------------------------------- Employee is terminated for good cause under Section 8(b)(ii) of this Agreement, or if the Employee voluntarily terminates her employment by written notice to the Employer under Section 8(a) of this Agreement without reliance on Section 8(d), the Employer shall pay to the Employee any compensation earned but not paid to the Employee prior to the effective date of such termination. Under such circumstances, such payment shall be in full and complete discharge of any and all liabilities or obligations of the Employer to the Employee hereunder, and the Employee shall be entitled to no further benefits under this Agreement. 6. (f) Release. Payment of any compensation to the Employee under this ------- Section 8 following termination of employment shall be conditioned upon the prior receipt by the Employer of a release executed by the Employee in substantially the form attached to this Agreement as Exhibit A. 9. Disclosure. The Employee agrees that during the term of her ---------- employment by the Employer, she will disclose and disclose only to the Employer all ideas, methods, plans, developments or improvements known by her which relate directly or indirectly to the business of the Employer, whether acquired by the Employee before or during her employment by the Employer. Nothing in this Section 9 shall be construed as requiring any such communication where the idea, plan, method or development is lawfully protected from disclosure as a trade secret of a third party or by any other lawful prohibition against such communication. 10. Confidentiality. The Employee agrees to keep in strict secrecy and --------------- confidence any and all information the Employee assimilates or to which she has access during her employment by the Employer and which has not been publicly disclosed and is not a matter of common knowledge in the fields of work of the Employer. The Employee agrees that both during and after the term of her employment by the Employer, she will not, without the prior written consent of the Employer, disclose any such confidential information to any third person, partnership, joint venture, company, corporation or other organization. 11. Noncompetition and Nonsolicitation. ---------------------------------- The Employee hereby acknowledges that, during and solely as a result of her employment by the Employer, she has received and shall continue to receive: (1) special training and education with respect to the operations of a retail clothing chain and other related matters, and (2) access to confidential information and business and professional contacts. In consideration of the special and unique opportunities afforded to the Employee by the Employer as a result of the Employee's employment, as outlined in the previous sentence, the Employee hereby agrees as follows: (a) During the term of the Employee's employment, whether pursuant to this Agreement, any automatic or other renewal hereof or otherwise, and, except as may be otherwise herein provided, for a period of two (2) years after the termination of her employment with the Employer, regardless of the reason for such termination, the Employee shall not, directly or indirectly, enter into, engage in, be employed by or consult with any business which competes with the business of the Employer by selling, offering to sell, soliciting offers to buy, or producing, or by consulting with others concerning the selling or producing of, any product substantially similar to those now sold or produced by the Employer or included in the product lines then developed by the Employer for sale or production, or by engaging in transactions with any person who was a vendor of merchandise to the Employer; provided that the restriction on the ability to deal with a vendor shall not apply to dealing with any vendor from whom the Employer has not purchased or is not expected to purchase in excess of $250,000 of merchandise in any one fiscal year. The Employee 7. shall not engage in such prohibited activities, either as an individual, partner, officer, director, stockholder, employee, advisor, independent contractor, joint venturer, consultant, agent, or representative or salesman for any person, firm, partnership, corporation or other entity so competing with the Employer. The restrictions of this Section 11 shall not be violated by (i) the ownership of no more than 2% of the outstanding securities of any company whose stock is traded on a national securities exchange or is quoted in the Automated Quotation System of the National Association of Securities Dealers (NASDAQ), or (ii) other outside business investments that do not in any manner conflict with the services to be rendered by the Employee for the Employer and that do not diminish or detract from the Employee's ability to render her required attention to the business of the Employer. (b) During her employment with the Employer and, except as may be otherwise herein provided, for a period of two (2) years following the termination of her employment with the Employer, regardless of the reason for such termination, the Employee agrees she will refrain from and will not, directly or indirectly, as an individual, partner, officer, director, stockholder, employee, advisor, independent contractor, joint venturer, consultant, agent, representative, salesman or otherwise (1) solicit any of the employees of the Employer to terminate their employment or (2) accept employment with or seek remuneration by any of the clients or customers of the Employer with whom the Employer did business during the term of the Employee's employment. (c) The period of time during which the Employee is prohibited from engaging in certain business practices pursuant to Sections 11(a) or (b) shall be extended by any length of time during which the Employee is in breach of such covenants. (d) It is understood by and between the parties hereto that the foregoing restrictive covenants set forth in Sections 11(a) through (c) are essential elements of this Agreement, and that, but for the agreement of the Employee to comply with such covenants, the Employer would not have agreed to enter into this Agreement. Such covenants by the Employee shall be construed as agreements independent of any other provision in this Agreement. The existence of any claim or cause of action of the Employee against the Employer, whether predicated on this Agreement, or otherwise, shall not constitute a defense to the enforcement by the Employer of such covenants. (e) It is agreed by the Employer and Employee that if any portion of the covenants set forth in this Section 11 are held to be invalid, unreasonable, arbitrary or against public policy, then such portion of such covenants shall be considered divisible both as to time and geographical area. The Employer and Employee agree that, if any court of competent jurisdiction determines the specified time period or the specified geographical area applicable to this Section 11 to be invalid, unreasonable, arbitrary or against public policy, a lesser time period or geographical area which is determined to be reasonable, non-arbitrary and not against public policy may be enforced against the Employee. The Employer and the Employee agree that the foregoing covenants are appropriate and reasonable when considered in light of the nature and extent of the business conducted by the Employer. 8. 12. Specific Performance. The Employee agrees that damages at law will be -------------------- an insufficient remedy to the Employer if the Employee violates the terms of Sections 9, 10 or 11 of this Agreement and that the Employer would suffer irreparable damage as a result of such violation. Accordingly, it is agreed that the Employer shall be entitled, upon application to a court of competent jurisdiction, to obtain injunctive relief to enforce the provisions of such Sections, which injunctive relief shall be in addition to any other rights or remedies available to the Employer. The Employee agrees to pay to the Employer all costs and expenses incurred by the Employer relating to the enforcement of the terms of Sections 9, 10 or 11 of this Agreement, including reasonable fees and disbursements of counsel (both at trial and in appellate proceedings). 13. Compliance with Other Agreements. The Employee represents and -------------------------------- warrants that the execution of this Agreement by her and her performance of her obligations hereunder will not conflict with, result in the breach of any provision of or the termination of or constitute a default under any Agreement to which the Employee is a party or by which the Employee is or may be bound. 14. Waiver of Breach. The waiver by the Employer of a breach of any of ---------------- the provisions of this Agreement by the Employee shall not be construed as a waiver of any subsequent breach by the Employee. 15. Binding Effect; Assignment. The rights and obligations of the -------------------------- Employer under this Agreement shall inure to the benefit of and shall be binding upon the successors and assigns of the Employer. It is expressly acknowledged that the provisions of Section 11 relating to noncompetition, nonsolicitation and nonacceptance may be enforced by the Employer's successors and assigns. This Agreement is a personal employment contract and the rights, obligations and interests of the Employee hereunder may not be sold, assigned, transferred, pledged or hypothecated. 16. Entire Agreement. This Agreement contains the entire agreement and ---------------- supersedes all prior agreements and understandings, oral or written, with respect to the subject matter hereof. This Agreement may be changed only by an agreement in writing signed by the party against whom any waiver, change, amendment, modification or discharge is sought. 17. Headings. The headings contained in this Agreement are for reference -------- purposes only and shall not affect the meaning or interpretation of this Agreement. 18. Governing Law. This Agreement shall be construed and enforced in ------------- accordance with the laws of the State of Florida. 19. Notice. All notices 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 or similar electronic transmission method; one working day after it is sent, if sent by recognized expedited delivery service; and five days after it is sent, if 9. mailed, first class mail, certified mail, return receipt requested, with postage prepaid. In each case notice shall be sent to: If to the Employee: Patricia Murphy 127 Vista Lane Naples, FL 34119 If to the Employer: Chico's FAS, Inc. 11215 Metro Parkway Ft. Myers, Florida 33912 with a copy to: Gary I. Teblum, Esquire Trenam, Kemker, Scharf, Barkin, Frye, O'Neill & Mullis, P.A. Post Office Box 1102 Tampa, Florida 33601 IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and year first above written. CHICO'S FAS, INC. By: /s/ Marvin Gralnick ----------------------------- EMPLOYEE: /s/ Patricia Murphy --------------------------------- PATRICIA MURPHY 10. EXHIBIT A TO EMPLOYMENT AGREEMENT WITH PATRICIA MURPHY DATED AS OF AUGUST 21, 2000 Release WHEREAS, _______________________________ (the "Executive") is an employee of Chico's FAS, Inc., (the "Company") and is a party to the Employment Agreement dated __________________ (the "Agreement"); WHEREAS, the Executive's employment has been terminated in accordance with Section 8___ of the Agreement; and WHEREAS, the Executive is required to sign this Release in order to receive the payment of any compensation under Section 8 of the Agreement following termination of employment. NOW, THEREFORE, in consideration of the promises and agreements contained herein and other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, and intending to be legally bound, the Executive agrees as follows: 1. This Release is effective on the date hereof and will continue in effect as provided herein. 2. In consideration of the payments to be made and the benefits to be received by the Executive pursuant to the Agreement, which the Executive acknowledges are in addition to payment and benefits to which the Executive would be entitled to but for the Agreement, the Executive, for the Executive and the Executive's dependents, successors, assigns, heirs, executors and administrators (and the Executive and their legal representatives of every kind), hereby releases, dismisses, remises and forever discharges the Company, its predecessors, parents, subsidiaries, divisions, related or affiliated companies, officers, directors, stockholders, members, employees, heirs, successors, assigns, representatives, agents and counsel (collectively the "Released Party") from any and all arbitrations, claims, including claims for attorney's fees, demands, damages, suits, proceedings, actions and/or causes of action of any kind and every description, whether known or unknown, which the Executive now has or may have had for, upon, or by reason of any cause whatsoever ("claims"), against the Released Party, including but not limited to: (a) any and all claims arising out of or relating to Executive's employment by or service with the Company and the Executive's termination from the Company. (b) any and all claims of discrimination, including but not limited to claims of discrimination on the basis of sex, race, age, national origin, marital status, religion or handicap, including, specifically, but without limiting the generality of the foregoing, any claims under the Age Discrimination in Employment Act, as amended, A-1 Title VII of the Civil Rights Act of 1964, as amended, the Americans with Disabilities Act; and (c) any and all claims of wrongful or unjust discharge or breach of any contract or promise, express or implied. 3. The Executive understands and acknowledges that the Company does not admit any violation of law, liability or invasion of any of the Executive rights and that any such violation, liability or invasion is expressly denied. The consideration provided for this Release is made for the purpose of settling and extinguishing all claims and rights (and every other similar or dissimilar matter) that the Executive ever had or now may have against the Company to the extent provided in this Release. The Executive further agrees and acknowledges that no representations, promises or inducements have been made that the Company other than as appear in the Agreement. 4. The Executive further agrees and acknowledges that: (a) The Release provided for herein releases claims to and including the date of this Release; (b) The Executive has been advised by the Company to consult with legal counsel prior to executing this Release, has had an opportunity to consult with and to be advised by legal counsel of the Executive's choice, fully understands the terms of this Release, and enters into this Release freely, voluntarily and intending to be found. (c) The Executive has been given a period of 21 days to review and consider the terms of this Release, prior to its execution and that the Executive may use as much of the 21 day period as the Executive desires; and (d) The Executive may, within 7 days after execution, revoke this Release. Revocation shall be made by delivering a written notice of revocation to the Chief Financial Officer at the Company. For such revocation to be effective, written notice must be actually received by the Chief Financial Officer at the Company no later than the close of business on the 7th day after the Executive executes this Release. If the Executive does exercise the Executive's right to revoke this Release, all of the terms and conditions of the Release shall be of no force and effect and the Company shall not have any obligation to make payments or provide benefits to the Executive as set forth in Sections 8 of the Agreement. 5. The Executive agrees that the Executive will never file a lawsuit or other complaint asserting any claim that is released in this Release. 6. The Executive waives and releases any claim that the Executive has or may have to reemployment after _______________________________________________. A-2 IN WITNESS WHEREOF, the Executive has executed and delivered this Release on the date set forth below. Dated:______________________________ _________________________ Executive A-3 EX-10.5 6 0006.txt STOCK OPTION AGREE BETW CO AND TEDFORD MARLOW EXHIBIT 10.5 STOCK OPTION AGREEMENT ---------------------- THIS STOCK OPTION AGREEMENT is made effective as of the 6th day of September, 2000 between CHICO'S FAS, INC., a Florida corporation ("Chico's") and TEDFORD MARLOW (the "Optionee"). W I T N E S S E T H ------------------- WHEREAS, the Optionee is presently engaged by Chico's as its Executive Vice President and pursuant to the terms of that certain Employment Agreement between the parties hereto dated August 29, 2000; Chico's has agreed to grant to the Optionee the option herein provided for, to the end that the Optionee may thereby be assisted in obtaining an interest in the stock ownership of Chico's. NOW, THEREFORE, in consideration of the covenants and agreements herein contained, the parties hereto hereby agree as follows: 1. Grant. Chico's hereby grants to the Optionee an option (the "Option") ----- to purchase 220,000 shares of Chico's common stock, par value $.01 per share ("Common Stock") at an exercise price of $34.44 per share, both as adjusted pursuant to Section 10 hereof. 2. Exercise. The Option may be exercised at any time during the period -------- hereinafter permitted by presentation at the principal offices of Chico's in Ft. Myers, Florida of (a) written notice to Chico's advising Chico's of the election of the Optionee to purchase the shares of Common Stock covered by this Option and (b) payment of the aggregate option price therefor. 3. Period of Exercise. The Option is exercisable in whole or from time ------------------ to time in part during the period from September 6, 2001 through September 5, 2010, except as provided in Section 8 hereof. 4. Vesting Schedule. The Optionee's rights under the Option shall vest ---------------- (on a cumulative basis) over the Exercise Period in accordance with the following schedule:
-------------------------------------------------------------- Number of Years From the Exercisable Percentage of Date the Option is Granted Number of Shares Originally Covered by the Option -------------------------------------------------------------- Less than 1 year 0% -------------------------------------------------------------- 1 year but less than 2 years 33.33% -------------------------------------------------------------- 2 years but less than 3 years 66.66% -------------------------------------------------------------- 3 years or more 100% --------------------------------------------------------------
5. Requirements of Law. Chico's shall not be required to sell or issue ------------------- any shares under the Option if the issuance of such shares shall constitute a violation of any provisions of any law or regulation of any governmental authority. Specifically, in connection with the Securities Act of 1933 (the "Act"), upon exercise of the Option, unless a registration statement under the Act is in effect with respect to the shares of Common Stock covered by the Option, Chico's shall not be required to issue such shares unless Chico's has received evidence reasonably satisfactory to the effect that the Optionee is acquiring such shares for investment and not with a view to the distribution thereof, and unless the certificate issued representing the shares of Common Stock bears the following legend: "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT OR EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933 AS AMENDED AND APPLICABLE STATE SECURITIES LAWS." Any reasonable determination in this connection by Chico's shall be final, binding and conclusive. At such time as a registration statement under the Act is in effect with respect to the shares of Common Stock represented by certificates bearing the above legend or at such time as, in the opinion of counsel for Chico's, such legend is no longer required solely for compliance with applicable securities laws, then the holders of such certificates shall be entitled to exchange such certificates for certificates representing a like number of shares but without such legend. Chico's may, but shall in no event be obligated to, register any securities covered hereby pursuant to the Act. Chico's shall not be obligated to take any other affirmative action in order to cause the exercise of the Option or the issuance of shares pursuant thereto to comply with any law or regulation of any governmental authority. 2. 6. Method of Payment. Payment shall be made: ----------------- (a) in United States dollars by certified check, or bank draft or (b) by tendering to Chico's Common Stock shares owned by the person exercising the Option and having a fair market value equal to the cash exercise price applicable to such Option, such fair market value to be the closing price, on the date in question (or, if no shares are traded on such day, on the next preceding day on which shares were traded), of the Common Stock as reported on the Composite Tape, or if not reported thereon, then such price as reported in the trading reports of the principal securities exchange in the United States on which such stock is listed, or if such stock is not listed on a securities exchange in the United States, the mean between the dealer closing "bid" and "ask" prices on the over-the-counter market as reported by the National Association of Security Dealers Automated Quotation System (NASDAQ), or NASDAQ's successor, or if not reported on NASDAQ, the fair market value of such stock as determined by the Board in good faith and based on all relevant factors, or (c) by a combination of United States dollars and Common Stock shares as aforesaid. To the extent permitted by applicable law and regulations, Chico's may from time to time, in its discretion, approve an arrangement with a brokerage firm under which such brokerage firm, on behalf of the Optionee, would pay to Chico's the full purchase price of the shares being purchased together with an amount equal to any taxes which Chico's is required to withhold in connection with the exercise of the option and Chico's, pursuant to an irrevocable notice from the Optionee, would deliver the shares being purchased to such brokerage firm. 7. Transferability of Option. The Option shall not be transferable by ------------------------- the Optionee otherwise than by will or the laws of descent and distribution, and shall be exercisable during his lifetime only by him. 8. Death or Other Termination of Employment. ---------------------------------------- (a) In the event that the Optionee (1) shall cease to be employed by Chico's because of his discharge for dishonesty, or because he violated any material provision of any employment or other agreement between him and Chico's, or (2) shall voluntarily resign or terminate his employment with Chico's under or followed by such circumstances as would constitute a breach of any material provision of any employment or other agreement between him and Chico's, or (3) shall have committed an act of dishonesty not discovered by Chico's prior to the cessation of his employment but that would have resulted in his discharge if discovered prior to such date, or (4) shall, either before or after cessation of his employment with Chico's, without the written consent of his employer or former employer, use (except for the benefit of his employer or former employer) or disclose to any other person any confidential information relating to the continuation or proposed continuation of his employer's or former employer's business or any trade secrets of Chico's obtained as a result of 3. or in connection with such employment, or (5) shall, either before or after the cessation of his employment with Chico's, without the written consent of his employer or former employer, directly or indirectly, give advice to, or serve as an employee, director, officer, partner or trustee of, or in any similar capacity with, or otherwise directly or indirectly participate in the management, operation or control of, or have any direct or indirect financial interest in, any corporation, partnership or other organization that directly or indirectly competes in any respect with Chico's, then forthwith from the happening of any such event, the Option granted hereunder shall terminate and become void to the extent that it then remains unexercised. (b) In the event that the Optionee shall cease to be employed by Chico's for any reason other than his death or one or more of the reasons set forth in Section 8(a), subject to the condition that the Option shall not be exercisable after the expiration of ten (10) years from the date it is granted, the Optionee shall have the right to exercise the Option at any time within three (3) months after such termination of employment to the extent his right to exercise the Option had accrued and vested hereunder at the date of such termination and had not previously been exercised; such three-month limit shall be increased to one (1) year if the Optionee ceases to be employed by Chico's because he becomes disabled (within the meaning of Section 22(e)(3) of the Internal Revenue Code of 1986, as amended) or if he dies during the three-month period and the Option may be exercised within such extended time limit by the Optionee or, in the case of death, the personal representative of the Optionee or by any person or persons who shall have acquired the Option directly from the Optionee by bequest or inheritance. Whether an authorized leave of absence or absence for military or governmental service shall constitute termination of employment for purposes of this Agreement shall be determined by the Compensation and Benefits Committee of the Board of Directors of Chico's, whose determination shall be final and conclusive. (c) In the event that an Optionee shall die while in the employ of Chico's and shall not have fully exercised this Option, the Option may be exercised, subject to the condition that this Option shall not be exercisable after the expiration of ten (10) years from the date it is granted, to the extent that the Optionee's right to exercise this Option had accrued and vested hereunder at the time of his death and had not previously been exercised, at any time within one (1) year after the Optionee's death, by the personal representative of the Optionee or by any person or persons who shall have acquired the Option directly from the Optionee by bequest or inheritance. (d) If there shall occur a Change in Control (as hereinafter defined) of Chico's while any shares of Common Stock remain subject to this Option, then the Option shall become immediately exercisable and fully vested without regard to Section 4 hereof and such exercisability shall terminate only pursuant to Section 3 hereof without regard to the other provisions of this Section 8. (e) For purposes of this Agreement, a "Change in Control" shall mean: (1) the obtaining by any party of fifty percent (50%) or more of the voting shares of Chico's pursuant to a "tender offer" for such shares as provided under Rule 14d-2 promulgated under the Securities Exchange Act of 1934, as amended, or any subsequent comparable federal rule or regulation governing tender offers; or 4. (2) individuals who were members of Chico's Board of Directors immediately prior to any particular meeting of Chico's shareholders which involves a contest for the election of directors fail to constitute a majority of the members of Chico's Board of Directors following such election; or (3) Chico's executing an agreement concerning the sale of substantially all of its assets to a purchaser which is not a subsidiary; or (4) Chico's adoption of a plan of dissolution or liquidation; or (5) Chico's executing an agreement concerning a merger or consolidation involving Chico's in which Chico's is not the surviving corporation or if, immediately following such merger or consolidation, less than fifty percent (50%) of the surviving corporation's outstanding voting stock is held by persons who are stockholders of Chico's immediately prior to such merger or consolidation. 9. No Rights as Stockholder. The Optionee shall have no rights as a ------------------------ stockholder with respect to shares covered by the Option until the date of issuance of a stock certificate for such shares; no adjustment for dividends, or otherwise, except as provided in Section 10, shall be made if the record date therefor is prior to the date of exercise of such option. 10. Stock Adjustments. ----------------- (a) In the event of any increase or decrease in the number of issued shares of Common Stock resulting from a stock split or other division or consolidation of shares or the payment of a stock dividend (but only on the Common Stock) or any other increase or decrease in the number of such shares effected without any receipt of consideration by Chico's, then, in any such event, the number of shares of Common Stock covered by the Option, and the purchase price per share of Common Stock covered by the Option shall be proportionately and appropriately adjusted for any such increase or decrease. (b) Subject to any required action by the stockholders, if any change occurs in the shares of Common Stock by reason of any recapitalization, reorganization, merger, consolidation, split-up, combination or exchange of shares, or of any similar change affecting the shares of Common Stock, then, in any such event, the number and type of shares covered by the Option, and the purchase price per share of Common Stock covered by the Option, shall be proportionately and appropriately adjusted for any such change. A dissolution or liquidation of Chico's shall cause each outstanding Option to terminate. (c) In the event of a change in the Common Stock as presently constituted that is limited to a change of all of its authorized shares with par value into the same number of 5. shares with a different par value or without par value, the shares resulting from any change shall be deemed to be shares of Common Stock within the meaning of this Agreement. (d) To the extent that the foregoing adjustments relate to stock or securities of Chico's, such adjustments shall be made by, and in the discretion of, the Board, whose determination in that respect shall be final, binding and conclusive. (e) Except as hereinabove expressly provided in this Section 10, the Optionee shall have no rights by reason of any division or consolidation of shares of stock of any class or the payment of any stock dividend or any other increase or decrease in the number of shares of stock of any class or by reason of any dissolution, liquidation, merger or consolidation, or spin-off of assets or stock of another corporation; and any issuance by Chico's of shares of stock of any class, securities convertible into shares of stock of any class, or warrants or options for shares of stock of any class shall not affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock subject to the Option. (f) The grant of this Option shall not affect in any way the right or power of Chico's to make adjustments, reclassifications, reorganizations or changes of its capital or business structure or to merge or to consolidate, or to dissolve, to liquidate, to sell, or to transfer all or any part of its business or assets. 11. Withholding. It shall be a condition to the obligation of Chico's to ----------- issue Common Stock shares upon exercise of an Option, that the Optionee (or any beneficiary or person entitled to act under Section 8 above) pay to Chico's, upon its demand, such amount as may be requested by Chico's for the purpose of satisfying any liability to withhold federal, state, local or foreign income or other taxes. If the amount requested is not paid, Chico's may refuse to issue Common Stock shares. 12. Governing Law. This Agreement shall be governed by the laws of the ------------- State of Florida. 13. Entire Agreement. This Agreement contains the entire agreement of ----------------- Chico's and the Optionee with respect to the subject matter hereof, and supersedes all prior agreements or understandings, written, oral or otherwise, with respect to the subject matter hereof. 14. Headings. The headings contained in this Agreement are for reference --------- purposes only and shall not affect the meaning or interpretation of this Agreement. 15. Waiver. Failure by Chico's at any time to require performance of any ------- provision of this Agreement shall not affect its right to require full performance thereof at any time thereafter. No waiver or delay in enforcing the terms of this Agreement by Chico's shall be construed as a waiver of any subsequent breach or default of the same or similar nature or of any other nature. 6. 16. Binding Effect. This Agreement shall be binding upon the parties, -------------- their heirs, legal representatives, successors, assigns, and transferees. 17. Gender; Word Use. Throughout this Agreement, except where the context ---------------- otherwise requires, the masculine gender shall be deemed to include the feminine, and the singular shall be deemed to include the plural, and vice versa. 18. Counterparts. This Agreement may be executed in one or more ------------ counterparts, all of which shall constitute one and the same instrument. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. ATTEST: CHICO'S FAS, INC. /s/ Charles J. Kleman By: /s/ Marvin J. Gralnick - ----------------------------- ----------------------------------- Secretary Name: Marvin J. Gralnick Title: Chief Executive Officer, President, and Chairman /s/ Gary I. Teblum /s/ Tedford Marlow - ----------------------------- --------------------------------------- Tedford Marlow /s/ Scott Edmonds - ----------------------------- 7. EX-10.6 7 0007.txt STOCK OPTION AGREE BETW CO AND TEDFORD MARLOW EXHIBIT 10.6 STOCK OPTION AGREEMENT ---------------------- THIS STOCK OPTION AGREEMENT is made effective as of the 6th day of September, 2000 between CHICO'S FAS, INC., a Florida corporation ("Chico's") and TEDFORD MARLOW (the "Optionee"). W I T N E S S E T H - - - - - - - - - - WHEREAS, the Optionee is presently engaged by Chico's as its Executive Vice President and pursuant to the terms of that certain Employment Agreement between the parties hereto dated August 29, 2000; Chico's has agreed to grant to the Optionee the option herein provided for, to the end that the Optionee may thereby be assisted in obtaining an interest in the stock ownership of Chico's. NOW, THEREFORE, in consideration of the covenants and agreements herein contained, the parties hereto hereby agree as follows: 1. Grant. Chico's hereby grants to the Optionee an option (the "Option") ----- to purchase 30,000 shares of Chico's common stock, par value $.01 per share ("Common Stock") at an exercise price of $22.96 per share, both as adjusted pursuant to Section 10 hereof. 2. Exercise. The Option may be exercised at any time during the period -------- hereinafter permitted by presentation at the principal offices of Chico's in Ft. Myers, Florida of (a) written notice to Chico's advising Chico's of the election of the Optionee to purchase the shares of Common Stock covered by this Option and (b) payment of the aggregate option price therefor. 3. Period of Exercise. The Option is exercisable in whole or from time ------------------ to time in part during the period from September 6, 2001 through September 5, 2010, except as provided in Section 8 hereof. 4. Vesting Schedule. The Optionee's rights under the Option shall vest ---------------- (on a cumulative basis) over the Exercise Period in accordance with the following schedule: ------------------------------------------------------------ Number of Years From the Exercisable Percentage of Date the Option is Granted Number of Shares Originally Covered by the Option ------------------------------------------------------------ Less than 1 year 0% ------------------------------------------------------------ 1 year but less than 2 years 33.33% ------------------------------------------------------------ 2 years but less than 3 years 66.66% ------------------------------------------------------------ 3 years or more 100% ------------------------------------------------------------ 5. Requirements of Law. Chico's shall not be required to sell or issue ------------------- any shares under the Option if the issuance of such shares shall constitute a violation of any provisions of any law or regulation of any governmental authority. Specifically, in connection with the Securities Act of 1933 (the "Act"), upon exercise of the Option, unless a registration statement under the Act is in effect with respect to the shares of Common Stock covered by the Option, Chico's shall not be required to issue such shares unless Chico's has received evidence reasonably satisfactory to the effect that the Optionee is acquiring such shares for investment and not with a view to the distribution thereof, and unless the certificate issued representing the shares of Common Stock bears the following legend: "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT OR EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933 AS AMENDED AND APPLICABLE STATE SECURITIES LAWS." Any reasonable determination in this connection by Chico's shall be final, binding and conclusive. At such time as a registration statement under the Act is in effect with respect to the shares of Common Stock represented by certificates bearing the above legend or at such time as, in the opinion of counsel for Chico's, such legend is no longer required solely for compliance with applicable securities laws, then the holders of such certificates shall be entitled to exchange such certificates for certificates representing a like number of shares but without such legend. Chico's may, but shall in no event be obligated to, register any securities covered hereby pursuant to the Act. Chico's shall not be obligated to take any other affirmative action in order to cause the exercise of the Option or the issuance of shares pursuant thereto to comply with any law or regulation of any governmental authority. 2. 6. Method of Payment. Payment shall be made: ----------------- (a) in United States dollars by certified check, or bank draft or (b) by tendering to Chico's Common Stock shares owned by the person exercising the Option and having a fair market value equal to the cash exercise price applicable to such Option, such fair market value to be the closing price, on the date in question (or, if no shares are traded on such day, on the next preceding day on which shares were traded), of the Common Stock as reported on the Composite Tape, or if not reported thereon, then such price as reported in the trading reports of the principal securities exchange in the United States on which such stock is listed, or if such stock is not listed on a securities exchange in the United States, the mean between the dealer closing "bid" and "ask" prices on the over-the-counter market as reported by the National Association of Security Dealers Automated Quotation System (NASDAQ), or NASDAQ's successor, or if not reported on NASDAQ, the fair market value of such stock as determined by the Board in good faith and based on all relevant factors, or (c) by a combination of United States dollars and Common Stock shares as aforesaid. To the extent permitted by applicable law and regulations, Chico's may from time to time, in its discretion, approve an arrangement with a brokerage firm under which such brokerage firm, on behalf of the Optionee, would pay to Chico's the full purchase price of the shares being purchased together with an amount equal to any taxes which Chico's is required to withhold in connection with the exercise of the option and Chico's, pursuant to an irrevocable notice from such the Optionee, would deliver the shares being purchased to such brokerage firm. 7. Transferability of Option. The Option shall not be transferable by ------------------------- the Optionee otherwise than by will or the laws of descent and distribution, and shall be exercisable during his lifetime only by him. 8. Death or Other Termination of Employment. ---------------------------------------- (a) In the event that the Optionee (1) shall cease to be employed by Chico's because of his discharge for dishonesty, or because he violated any material provision of any employment or other agreement between him and Chico's, or (2) shall voluntarily resign or terminate his employment with Chico's under or followed by such circumstances as would constitute a breach of any material provision of any employment or other agreement between him and Chico's, or (3) shall have committed an act of dishonesty not discovered by Chico's prior to the cessation of his employment but that would have resulted in his discharge if discovered prior to such date, or (4) shall, either before or after cessation of his employment with Chico's, without the written consent of his employer or former employer, use (except for the benefit of his employer or former employer) or disclose to any other person any confidential information relating to the continuation or proposed continuation of his employer's or former employer's business or any trade secrets of Chico's obtained as a result of 3. or in connection with such employment, or (5) shall, either before or after the cessation of his employment with Chico's, without the written consent of his employer or former employer, directly or indirectly, give advice to, or serve as an employee, director, officer, partner or trustee of, or in any similar capacity with, or otherwise directly or indirectly participate in the management, operation or control of, or have any direct or indirect financial interest in, any corporation, partnership or other organization that directly or indirectly competes in any respect with Chico's, then forthwith from the happening of any such event, the Option granted hereunder shall terminate and become void to the extent that it then remains unexercised. (b) In the event that the Optionee shall cease to be employed by Chico's for any reason other than his death or one or more of the reasons set forth in Section 8(a), subject to the condition that the Option shall not be exercisable after the expiration of ten (10) years from the date it is granted, the Optionee shall have the right to exercise the Option at any time within three (3) months after such termination of employment to the extent his right to exercise the Option had accrued and vested hereunder at the date of such termination and had not previously been exercised; such three-month limit shall be increased to one (1) year if the Optionee ceases to be employed by Chico's because he becomes disabled (within the meaning of Section 22(e)(3) of the Internal Revenue Code of 1986, as amended) or if he dies during the three-month period and the Option may be exercised within such extended time limit by the Optionee or, in the case of death, the personal representative of the Optionee or by any person or persons who shall have acquired the Option directly from the Optionee by bequest or inheritance. Whether an authorized leave of absence or absence for military or governmental service shall constitute termination of employment for purposes of this Agreement shall be determined by the Compensation and Benefits Committee of the Board of Directors of Chico's, whose determination shall be final and conclusive. (c) In the event that an Optionee shall die while in the employ of Chico's and shall not have fully exercised this Option, the Option may be exercised, subject to the condition that this Option shall not be exercisable after the expiration of ten (10) years from the date it is granted, to the extent that the Optionee's right to exercise this Option had accrued and vested hereunder at the time of his death and had not previously been exercised, at any time within one (1) year after the Optionee's death, by the personal representative of the Optionee or by any person or persons who shall have acquired the Option directly from the Optionee by bequest or inheritance. (d) If there shall occur a Change in Control (as hereinafter defined) of Chico's while any shares of Common Stock remain subject to this Option, then the Option shall become immediately exercisable and fully vested without regard to Section 4 hereof and such exercisability shall terminate only pursuant to Section 3 hereof without regard to the other provisions of this Section 8. (e) For purposes of this Agreement, a "Change in Control" shall mean: (1) the obtaining by any party of fifty percent (50%) or more of the voting shares of Chico's pursuant to a "tender offer" for such shares as provided under Rule 14d-2 promulgated under the Securities Exchange Act of 1934, as amended, or any subsequent comparable federal rule or regulation governing tender offers; or 4. (2) individuals who were members of Chico's Board of Directors immediately prior to any particular meeting of Chico's shareholders which involves a contest for the election of directors fail to constitute a majority of the members of Chico's Board of Directors following such election; or (3) Chico's executing an agreement concerning the sale of substantially all of its assets to a purchaser which is not a subsidiary; or (4) Chico's adoption of a plan of dissolution or liquidation; or (5) Chico's executing an agreement concerning a merger or consolidation involving Chico's in which Chico's is not the surviving corporation or if, immediately following such merger or consolidation, less than fifty percent (50%) of the surviving corporation's outstanding voting stock is held by persons who are stockholders of Chico's immediately prior to such merger or consolidation. 9. No Rights as Stockholder. The Optionee shall have no rights as a ------------------------ stockholder with respect to shares covered by the Option until the date of issuance of a stock certificate for such shares; no adjustment for dividends, or otherwise, except as provided in Section 10, shall be made if the record date therefor is prior to the date of exercise of such option. 10. Stock Adjustments. ----------------- (a) In the event of any increase or decrease in the number of issued shares of Common Stock resulting from a stock split or other division or consolidation of shares or the payment of a stock dividend (but only on the Common Stock) or any other increase or decrease in the number of such shares effected without any receipt of consideration by Chico's, then, in any such event, the number of shares of Common Stock covered by the Option, and the purchase price per share of Common Stock covered by the Option shall be proportionately and appropriately adjusted for any such increase or decrease. (b) Subject to any required action by the stockholders, if any change occurs in the shares of Common Stock by reason of any recapitalization, reorganization, merger, consolidation, split-up, combination or exchange of shares, or of any similar change affecting the shares of Common Stock, then, in any such event, the number and type of shares covered by the Option, and the purchase price per share of Common Stock covered by the Option, shall be proportionately and appropriately adjusted for any such change. A dissolution or liquidation of Chico's shall cause each outstanding Option to terminate. (c) In the event of a change in the Common Stock as presently constituted that is limited to a change of all of its authorized shares with par value into the same number of 5. shares with a different par value or without par value, the shares resulting from any change shall be deemed to be shares of Common Stock within the meaning of this Agreement. (d) To the extent that the foregoing adjustments relate to stock or securities of Chico's, such adjustments shall be made by, and in the discretion of, the Board, whose determination in that respect shall be final, binding and conclusive. (e) Except as hereinabove expressly provided in this Section 10, the Optionee shall have no rights by reason of any division or consolidation of shares of stock of any class or the payment of any stock dividend or any other increase or decrease in the number of shares of stock of any class or by reason of any dissolution, liquidation, merger or consolidation, or spin-off of assets or stock of another corporation; and any issuance by Chico's of shares of stock of any class, securities convertible into shares of stock of any class, or warrants or options for shares of stock of any class shall not affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock subject to the Option. (f) The grant of this Option shall not affect in any way the right or power of Chico's to make adjustments, reclassifications, reorganizations or changes of its capital or business structure or to merge or to consolidate, or to dissolve, to liquidate, to sell, or to transfer all or any part of its business or assets. 11. Withholding. It shall be a condition to the obligation of Chico's to ----------- issue Common Stock shares upon exercise of an Option, that the Optionee (or any beneficiary or person entitled to act under Section 8 above) pay to Chico's, upon its demand, such amount as may be requested by Chico's for the purpose of satisfying any liability to withhold federal, state, local or foreign income or other taxes. If the amount requested is not paid, Chico's may refuse to issue Common Stock shares. 12. Governing Law. This Agreement shall be governed by the laws of the ------------- State of Florida. 13. Entire Agreement. This Agreement contains the entire agreement of ----------------- Chico's and the Optionee with respect to the subject matter hereof, and supersedes all prior agreements or understandings, written, oral or otherwise, with respect to the subject matter hereof. 14. Headings. The headings contained in this Agreement are for reference --------- purposes only and shall not affect the meaning or interpretation of this Agreement. 15. Waiver. Failure by Chico's at any time to require performance of any ------- provision of this Agreement shall not affect its right to require full performance thereof at any time thereafter. No waiver or delay in enforcing the terms of this Agreement by Chico's shall be construed as a waiver of any subsequent breach or default of the same or similar nature or of any other nature. 6. 16. Binding Effect. This Agreement shall be binding upon the parties, -------------- their heirs, legal representatives, successors, assigns, and transferees. 17. Gender; Word Use. Throughout this Agreement, except where the context ---------------- otherwise requires, the masculine gender shall be deemed to include the feminine, and the singular shall be deemed to include the plural, and vice versa. 18. Counterparts. This Agreement may be executed in one or more ------------ counterparts, all of which shall constitute one and the same instrument. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. ATTEST: CHICO'S FAS, INC. /s/ Charles J. Kleman By: /s/ Marvin J. Gralnick - ------------------------------- ------------------------------------- Secretary Name: Marvin J. Gralnick Title: Chief Executive Officer, President, and Chairman /s/ Gary I. Teblum /s/ Tedford Marlow - ------------------------------- ----------------------------------------- Tedford Marlow /s/ Scott Edmonds - ------------------------------- 7. EX-27 8 0008.txt FINANCIAL DATA SCHEDULE
5 0000897429 CHICO'S FAS, INC. 9-MOS FEB-03-2001 JAN-30-2000 OCT-28-2000 7,533,563 13,356,141 3,078,406 0 26,730,997 54,588,068 68,214,067 13,206,845 111,660,309 25,338,241 0 0 0 174,932 79,156,380 111,660,309 186,321,603 186,321,603 76,729,277 76,729,277 73,379,232 0 (356,348) 36,569,442 13,896,000 22,673,442 0 0 0 22,673,442 $1.31 $1.25
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