February 8, 2006
Michael James Leedy
318 Meadow lane
Sewickley, PA 15143
It is with
great pleasure that we offer you the opportunity to join
Chico’s FAS, Inc. as our Chief Marketing Officer. This offer
is subject to, and contingent upon, the approval of our Board of
Directors. As you are aware, Chico’s is a fast-growing
respected organization within which marketing is a key driver of
our success. As one of the top specialty retailers we offer
tremendous opportunity for personal and professional growth. Please
let this letter serve as an offer to join Chico’s FAS, Inc.
and your acceptance of that offer. The following will outline the
specifics:
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Senior Vice
President & Chief Marketing Officer
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Member of the
Management Committee. Responsible for all of the marketing
activities, including distinct catalogs and websites for each
Chico’s brand as set forth more fully in the attached
position description. Duties currently include oversight of
e-commerce initiatives for all brands.
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Chief Operating
Officer
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$525,000.00
annually
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April 3,
2006
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Range: 60%-120%
of base salary earned during the semi annual bonus period, which is
contingent upon the achievement of corporate financial targets
established by the Chico’s Board of Directors; paid
semi-annually (generally in September and March). Bonus for the
2006 Spring season will be prorated based on actual employment
start date. Our two semi-annual bonus periods are February thru
July and August thru January. Payouts normally occur at or around
the time of our earnings release in early March, and early
September.
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Chico’s
currently has a Super Bonus program for certain members of
management. The super bonus payout is currently based on
achievement of financial performance objectives, incremental to the
annual operating plan established by the Chico’s Board of
Directors. The Super Bonus is subject to annual approval by the
Board of Directors. The Board is currently reviewing this program
for 2006. In 2005, the Super bonus opportunity for this position
was 30% of base earned during the fiscal year. To qualify for any
super bonus payout, Chico’s FAS, Inc. must achieve its EPS
growth plan for fiscal 2006. Super Bonuses are paid on an annual
basis. Any earned payout is
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h
u
m a
n
r e s o u r c e s
Chico’s FAS, Inc.
• 11215 Metro Parkway • Fort Myers,
Florida 33912 • (239) 277-6200
Michael J.
Leedy
February 8, 2006
Page 2
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expected to be
paid at or around the time of the earnings release, during the
first week of March. This program must be approved by the Board of
Directors and has not yet been reviewed for the 2006 fiscal year.
If the Board of Directors does not renew the Super Bonus program
for 2006 no payments will be made regardless of
performance.
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A one-time
grant on start date of 35,000 non-qualified stock options at Fair
Market value on date of hire. These options will vest over a 3-year
period with one-third vesting each year on the anniversary of your
hire date. You will be eligible for additional grants at the end of
each fiscal year.
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A one-time
grant on start date of 5,000 shares of restricted stock with
two-year vesting. These shares will vest over a two-year period
with one-half vesting on each of the first and second anniversaries
of your hire date. You will be eligible for additional grants at
the end of each fiscal year.
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Equity
Compensation Value:
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Total value of
options and Restricted Stock = $967,500
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Black Scholes
Value of 35,000 options is approximately $752,500 based on $43
stock price and 50% Black-Scholes valuation. Value of the
Restricted Stock is approximately $215,000 based upon $43 stock
price. For more complete information, please see the attached
Chico’s FAS, Inc. 2002 Omnibus Stock and Incentive
Plan.
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If we terminate
your employment without cause, we will continue to pay you your
base salary for a period of twelve-months following the date of
termination. In general terms, cause shall mean any action or
inaction by you that causes the company substantial harm. If,
however, Chico’s adopts a severance plan applicable to all
officers, you agree that any such plan will supersede the
provisions of this paragraph.
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If there is a
greater than 50% change in Company ownership or greater than 50%
turnover in the Company’s Board of Directors in any
12 month period that results in your good faith determination
that you can no longer adequately perform your duties as a senior
officer resulting in your voluntarily terminating your employment,
then you will be entitled to a lump sum payment of your annual
salary. If, however, Chico’s adopts a severance plan
applicable to all officers that covers a change of control, you
agree that such plan will supersede the provisions of this
paragraph.
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If both Scott
Edmonds and Charles Nesbit cease to be employed by Chico’s,
for any reason, within the first year of your employment that
results in your good faith determination that you can no longer
adequately perform your duties as a senior officer resulting in
your
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Michael J.
Leedy
February 8, 2006
Page 3
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voluntarily
terminating your employment then you will be entitled to a lump sum
payment of your annual salary; provided, however, that your rights
under this paragraph must be exercised within 90 days of the
last of Mr. Edmonds or Mr. Nesbit leaving and you must
provide Chico’s with at least 90 days written notice of
your intention to voluntarily terminate your employment. If you
exercise your rights under this paragraph, you agree to execute a
Non-Competition and Non-Solicitation Agreement substantially in the
form of the Agreement attached to this letter.
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In the event
that at the time your employment with Chico’s FAS, Inc.
terminates Chico’s FAS, Inc. is publicly traded (as defined
in Section 409A of the Internal Revenue Code), any amounts
payable under this Offer Letter that would otherwise be considered
deferred compensation subject to the additional twenty percent
(20%) tax imposed by Section 409A if paid within six
(6) months following the date of termination of Chico’s
FAS, Inc. employment shall be paid at the later of the time
otherwise provided in the Offer Letter or the time that will
prevent such amounts from being considered deferred
compensation.
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$12,000.00
annually ($1,000 per month.)
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You will be
eligible for three weeks of vacation per calendar year starting in
2006, as well as three personal, one floating holiday, and up to
six sick days per year.
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Merit reviews
and equity grants for officers are considered at the end of the
fiscal year, approximately February of each year.
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You will also
be eligible to participat
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