EXHIBIT 10.11
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made and entered into as of the 14th day
of April, 2000, by and between CHICO'S FAS, INC. a Florida corporation (the
"Employer"), and JAMES P. FRAIN (the "Employee").
WITNESSETH:
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 begin April 14,
2000 and shall continue through March 31, 2001; provided, however, that
beginning on April 1, 2001 and on each April 1st (each a "Renewal Date")
thereafter, the term of this agreement shall automatically be extended for one
additional year unless either party gives the other written notice of
termination 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 $165,000 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) The Employer shall reimburse the Employee for all
reasonable expenses incurred by the Employee in the performance of his 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.
(c) 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.
(d) The Employee shall provide his 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 Employee with an
automobile allowance of $1,000 per month ($12,000 per year).
4. DUTIES. The Employee is engaged as the Director of Marketing.
In addition, the Employee shall have such other duties as may from time to time
be reasonably assigned to him by the Board of Directors of the Employer.
5. EXTENT OF SERVICES; VACATIONS AND DAYS OFF.
(a) During the term of his 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 his 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 his 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 his
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 his death occurs plus six (6) month's additional compensation. The
Employer shall have no additional financial obligation under this Agreement to
the Employee or his estate. After receiving the payments provided in this
subparagraph (a), the Employee and his 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)
2.
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 him 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 he 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 him 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 in capacity 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 himself
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) (i) The Employee may terminate his 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 his duties under this Agreement (without reduction in
compensation through the termination date).
(b) (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
he 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:
3.
(1) the Employee's conviction of
either a felony involving moral turpitude or any crime in connection
with his 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 him in writing;
(4) the Employee's continued failure
to attend to his 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) (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 date which is twelve
(12) months after the Accelerated Termination Date shall continue to receive
the salary and other compensation and employee benefits 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 his
damages.
4.
(d) 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 his employment by written notice to the Employer under
Section 8(a) of this Agreement, 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.
9. DISCLOSURE. The Employee agrees that during the term of his
employment by the Employer, he will disclose and disclose only to the Employer
all ideas, methods, plans, developments or improvements known by him which
relate directly or indirectly to the business of the Employer, whether acquired
by the Employee before or during his 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 he has access during his 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 his employment by the Employer, he 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. NONSOLICITATION.
The Employee hereby acknowledges that, during and solely as a result
of his employment by the Employer, he 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 his employment with the Employer and, except
as may be otherwise herein provided, for a period of two (2) years following
the termination of his employment with the Employer, regardless of the reason
for such termination, the Employee agrees he 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 solicit any of the
employees of the Employer to terminate their employment.
5.
(b) The period of time during which the Employee is
prohibited from engaging in certain business practices pursuant to Section
11(a) shall be extended by any length of time during which the Employee is in
breach of such covenants.
(c) It is understood by and between the parties hereto
that the foregoing restrictive covenants set forth in Sections 11(a) and (b)
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.
(d) 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.
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 him and his performance of his
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.
6.
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 mailed, first class mail, certified mail, return receipt requested,
with postage prepaid. In each case notice shall be sent to:
If to the Employee: James P. Frain
4240 Steamboat Bend #101
Fort Myers, FL 33919
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
7.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
the day and year first above written.
CHICO'S FAS, INC.
By: /S/ Marvin J. Gralnick
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EMPLOYEE:
/s/ James P. Frain
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JAMES P. FRAIN
8.