EXHIBIT 10.16
CONFIDENTIAL
SEPARATION AND RELEASE AGREEMENT
THIS CONFIDENTIAL SEPARATION AND RELEASE AGREEMENT ("Agreement") is
made and entered into the 15th day of June, 2001, by and between CHICO'S FAS,
INC., a Florida corporation (the "Company"), and TEDFORD MARLOW ("Marlow").
WITNESSETH:
WHEREAS, Marlow and the Company are parties to that certain Employment
Agreement dated as of September 6, 2000, as clarified by that certain letter
agreement dated September 20, 2000 (collectively, the "Employment Agreement"),
that certain Stock Option Agreement dated as of September 6, 2000 with respect
to 220,000 options (the "220,000 Share Option Agreement") and that certain
Stock Option Agreement dated as of September 6, 2000 with respect to 30,000
options (the "30,000 Share Option Agreement"); and
WHEREAS, Marlow has been an employee and officer of the Company; and
WHEREAS, the parties each acknowledge that the Company provided formal
written notice to Marlow of non-renewal of the Employment Agreement by way of
letter dated May 24, 2001 and delivered to and received by Marlow on May 24,
2001, such that absent an earlier termination in accordance with the terms of
the Employment Agreement, the term of the Employment Agreement was to end on
September 1, 2002; and
WHEREAS, Marlow and the Company each wish to agree finally and
amicably to terms of a continued employment with the Company for a specified
period and the terms and conditions of the termination of his service as an
employee and officer of the Company (including any and all rights and
obligations of the parties under the Employment Agreement, the 220,000 Share
Option Agreement and the 30,000 Share Option Agreement) and Marlow desires to
release the Company from any and all existing claims, subject to the terms and
conditions stated herein; and
WHEREAS, the Company desires to provide certain continuation of
employment benefits and certain termination benefits to Marlow; and
WHEREAS, the Company desires to have Marlow continue to remain subject
to certain nondisclosure restrictions and nonsolicitation obligations in order
to protect the Company's legitimate business interests and Marlow is willing to
agree to same; and
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WHEREAS, the parties desire to delineate their respective rights,
duties, and obligations, and desire complete accord.
NOW, THEREFORE, in consideration of the premises, and the agreements
of the parties set forth in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto, intending to be legally bound, hereby covenant and agree as
follows:
1. RECITALS AND DEFINITIONS.
(a) Recitals. The recitals set forth above are true and
correct in every respect and are incorporated herein by reference.
(b) Definitions. AS USED IN THIS AGREEMENT, THE
FOLLOWING TERMS HAVE THE MEANINGS SET FORTH BELOW:
"Applicable Termination Date" For purposes of
this Agreement, the Applicable Termination Date shall be
September 1, 2001 unless Marlow delivers to the Company the
Extension Notice (as hereinafter defined) on or before 5:00
p.m., Ft. Myers time on August 25, 2001, in which event the
Extension Notice will serve as an election by Marlow to
extend his employment past September 1, 2001 and for his
employment to terminate instead on, and for the Applicable
Termination Date to be, September 15, 2001 with the
understanding that the September 1, 2001 termination shall
not take effect and instead, Marlow will continue to be
employed through September 15, 2001, on which date Marlow's
employment will terminate, with the rights and
responsibilities of the parties thereafter being as described
in this Agreement.
"Extension Notice" shall mean a written notice
signed by Marlow and delivered to and received by the Company
on or before 5:00 p.m., Ft. Myers time on August 25, 2001
which expressly sets forth that Marlow elects to extend his
employment to September 15, 2001 in accordance with this
Agreement and expressly states that such written notice is to
be considered an Extension Notice for purposes of this
Agreement. Such Extension Notice shall not be effective if at
the time such Extension Notice is delivered Marlow is in
material default or breach of any of his obligations under
this Agreement.
2. RESIGNATIONS BY MARLOW.
(a) Effective as of the close of business on June 15,
2001, Marlow resigns from his position as Executive Vice President -
Merchandising, Marketing and Product Development, and
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the Company hereby accepts this resignation. It is agreed that effective as of
the close of business on June 15, 2001, Marlow has no further privileges,
duties or obligations in such capacity.
(b) If Marlow timely delivers the Extension Notice to
the Company, then Marlow's employment with the Company shall be considered to
have terminated effective as of the close of business on September 15, 2001.
Otherwise, Marlow's employment with the Company shall be considered to have
terminated effective as of the close of business on September 1, 2001.
3. DISCONTINUATION OF EMPLOYMENT AND TERMINATION OF EMPLOYMENT
AGREEMENT.
(a) Effective as of the close of business on June 15,
2001, the parties agree that (i) consistent with Section 2(a) of this
Agreement, Marlow's position with the Company as Executive Vice President -
Merchandising, Marketing and Product Development is discontinued, and (ii)
except as otherwise expressly provided for in this Agreement, the Employment
Agreement is terminated and of no further force and effect and Marlow
relinquishes any and all continuing rights and benefits he may have under the
Employment Agreement or as Executive Vice President - Merchandising, Marketing
and Product Development of the Company. The close of business on June 15, 2001
shall be referred to as the "Effective Time" under this Agreement.
(b) As provided in Section 9 of this Agreement, Marlow
shall nevertheless continue as an employee of the Company until the close of
business on the Applicable Termination Date. On the Applicable Termination
Date, Marlow's employment by the Company in any and all capacities shall
terminate and, except as otherwise required by applicable law or as provided
for in this Agreement, Marlow relinquishes all remaining rights and benefits,
if any, he may then have as an employee of the Company.
4. CONSIDERATION; CONTINUATION OF COMPENSATION AND BENEFITS.
(a) From the Date of this Agreement to September 1,
2001. So long as Marlow has not breached any of his obligations under this
Agreement, the following compensation arrangements shall apply from the date of
this Agreement to September 1, 2001 (the "Base Employment Continuation Period")
and shall supercede the provisions of the Employment Agreement:
(1) Basic Salary. During the Base Employment
Continuation Period, Marlow will continue to receive his current basic salary
(that being an annualized basic salary of $500,000), payable on an every other
week basis or in more frequent installments as may be determined by the Company
in its sole discretion.
(2) Incentive Bonus. During the Base
Employment Continuation Period, Marlow will continue to receive all but $50,000
of the incentive bonus that would have otherwise been payable to him during
such period had his employment under the Employment Agreement continued through
September 1, 2001 and had the bonus plan in effect for Marlow on the date
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immediately preceding the date of this Agreement (the "Currently Effective
Bonus Plan") continued in effect through September 1, 2001. Such incentive
bonus payment (less the $50,000 reduction) shall be paid on such date as the
bonus would have been paid under the Currently Effective Bonus Plan were the
Currently Effective Bonus Plan to continue through September 1, 2001. In
particular, any bonus so earned would be expected to be paid in or about the
month of September 2001. Marlow shall become entitled to receive the $50,000
portion of the incentive bonus which is not to be paid under this Section
4(a)(2) (the "$50,000 Supplemental Incentive Bonus Amount") but only if the
conditions to receipt of the $50,000 Supplemental Incentive Bonus Amount, as
set forth in Section 4(g) hereof, are satisfied.
(3) Automobile. During the Base Employment
Continuation Period, Marlow shall continue to be entitled to receive a monthly
automobile allowance of $2,000 per month.
(4) Other Fringe Benefits. Marlow may be
eligible for benefit continuation in accordance with the provisions of COBRA
and acknowledges receipt of the required written notice in this regard. The
Company will pay Marlow's COBRA costs from June 15, 2001 through September 1,
2001. Any and all other fringe benefits and benefit plan participations not
specifically referenced in this Section 4 shall cease on June 15, 2001.
(b) If Marlow Timely Delivers an Extension Notice. So
long as Marlow has not breached his obligations under this Agreement and if
Marlow timely delivers an Extension Notice, the following compensation
arrangements shall apply and shall supercede the provisions of the Employment
Agreement, and the provisions of Section 4(c) hereof shall not be applicable
(it being understood that the provisions of this Section 4(b) and the
provisions of Section 4(c) hereof shall be mutually exclusive such that if one
of such subsections applies, the other shall not):
(1) Basic Salary. During the period from
September 1, 2001 and September 15, 2001 (the "Extended Employment Continuation
Period"), Marlow will continue to receive his current basic salary (that being
an annualized basic salary of $500,000), payable on the same type of pay period
schedule as was in effect during the Base Employment Continuation Period.
Marlow agrees that, after the end of the Extended Employment Continuation
Period, he shall not be entitled to, and waives any and all right to, any
additional basic salary including any basic salary which would otherwise be
payable under and pursuant to the Employment Agreement and any and all other
basic salary payments of any kind.
(2) No Incentive Bonus. Marlow agrees that both
during the Extended Employment Continuation Period and thereafter, he shall not
be entitled to, and waives any and all right to, any incentive bonuses (other
than the incentive bonus payable under Section 4(a) hereof with respect to the
Base Employment Continuation Period), including without limitation any bonuses
that may relate to the second half of the Company's fiscal year which commenced
February 4, 2001, any bonuses which would otherwise be payable under and
pursuant to the Employment Agreement and any and all other bonuses of any kind.
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(3) Automobile. With respect to the Extended
Employment Continuation Period, Marlow shall be entitled to receive an
additional automobile allowance of $1,000. Marlow agrees that, after the end of
the Extended Employment Continuation Period, he shall not be entitled to, and
waives any and all right to, any additional automobile allowance payments,
including any automobile allowance payments which would otherwise be payable
under and pursuant to the Employment Agreement and any and all other automobile
allowance payments of any kind.
(4) Stock Options. As more particularly
described in Section 5 hereof, because Marlow's employment extends through
September 15, 2001 if Marlow timely delivers the Extension Notice, it would
then be anticipated that, in accordance with their terms, (i) a portion of each
of the 30,000 Share Option Agreement and the 220,000 Share Option Agreement
would vest on September 6, 2001, (ii) such vested portions would be exercisable
until December 15, 2001 and (iii) because Marlow's employment would terminate
on September 15, 2001, the balance of the options represented by such stock
option agreements would not vest in any respect as of such Applicable
Termination Date and, it is specifically agreed that, as of such Applicable
Termination Date, such options will terminate and become void.
(c) If Marlow Does Not Timely Deliver an Extension
Notice. So long as Marlow has not breached his obligations under this Agreement
and if Marlow does not timely deliver an Extension Notice, the following
compensation arrangements shall apply and shall supercede the provisions of the
Employment Agreement, and the provisions of Section 4(b) hereof shall not be
applicable (it being understood that the provisions of this Section 4(c) and
the provisions of Section 4(b) hereof shall be mutually exclusive such that if
one of such subsections applies, the other shall not):
(1) Basic Salary. After the end of the Base
Employment Continuation Period and through and until September 1, 2002, Marlow
will continue to receive an amount equal to his current basic salary (that
being an annualized basic salary of $500,000), payable on an every other week
basis or in more frequent installments as may be determined by the Company in
its sole discretion.
(2) Incentive Bonus. After the end of the Base
Employment Continuation Period and through and until September 1, 2002, Marlow
will continue to receive the incentive bonus that would have otherwise been
payable to him had his employment under the Employment Agreement continued from
the end of the Base Employment Continuation Period through September 1, 2002
and had the bonus plan in effect for Marlow on the date immediately preceding
the date of this Agreement (the "Currently Effective Bonus Plan") continued in
effect during the period from the end of the Base Employment Continuation
Period through September 1, 2002. Such bonus payments shall be paid on such
dates as the bonuses would have been paid under the Currently Effective Bonus
Plan were the Currently Effective Bonus Plan to continue from the end of the
Base Employment Continuation Period through September 1, 2002. In particular,
any bonuses so earned would be expected to be paid in or about the months of
March 2002 and September 2002.
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(3) Automobile. After the end of the Base
Employment Continuation Period and through and until September 1, 2002, Marlow
shall continue to be entitled to receive an amount equal to his monthly
automobile allowance of $2,000 per month.
(4) Other Fringe Benefits. Marlow may continue
to be eligible for benefit continuation after the end of the Base Employment
Continuation Period in accordance with the provisions of COBRA and acknowledges
receipt of the required written notice in this regard. The Company will pay
Marlow's COBRA costs from September 1, 2001 through September 1, 2002. Any
election by Marlow to continue COBRA benefits after September 1, 2002 shall be
subject to Marlow's payment of the COBRA costs associated with such
continuation. As provided in Section 4(a)(4) hereof, any and all other fringe
benefits and benefit plan participations not specifically referenced in this
Section 4 shall cease on June 15, 2001.
(5) Stock Options. As more particularly
described in Section 5 hereof, because Marlow's employment extends through only
September 1, 2001 if Marlow does not timely deliver the Extension Notice, none
of the options represented by either the 30,000 Share Option Agreement or the
220,000 Share Option Agreement would vest (because employment would have
terminated before the first vesting date of September 6, 2001) and thus it is
specifically agreed that all of the options represented by such stock option
agreements would not vest in any respect as of such Applicable Termination Date
and, as of such Applicable Termination Date, such options will terminate and
become void.
(d) Reimbursements and Advances. Marlow has advised the
Company that he has appropriate substantiation and can prepare appropriate
expense reports for certain reasonable expenditures incurred in connection with
his employment by the Company through the date of this Agreement. If, on or
before August 1, 2001 and in accordance with the Company's requirements and
policies for expense substantiation and expense reports, Marlow submits expense
reports substantiating such expenditures, the Company shall reimburse Marlow
for such expenditures on or before September 1, 2001. Marlow shall not be
entitled to any other reimbursements or advances for expenses incurred by
Marlow in the performance of his duties under the Employment Agreement or,
except as specified in Section 9 hereof, under this Agreement.
(e) Relocation Expenses and Commuting Expenses. Marlow
acknowledges that he has already received all relocation expenses and commuting
expenses to which he may have been entitled under the Employment Agreement or
otherwise and shall be entitled to no further relocation expenses and no
further commuting expenses.
(f) Discount on Clothing. From and after the applicable
Termination Date under this Agreement (which date shall be September 1, 2001 if
Marlow does not deliver the Extension Notice to the Company on or before August
25, 2001 and shall be September 15, 2001 if Marlow delivers the Extension
Notice to the Company on or before August 25, 2001), Marlow shall no
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longer be entitled to the currently existing Company-wide employee benefit
which provides a 50% discount on purchases made at Company-owned stores.
(g) $50,000 Supplemental Incentive Bonus Amount. In
exchange for Marlow's agreement to execute and the execution of the additional
release attached hereto as Exhibit A when and as contemplated by Section 12(b)
hereof and compliance with the remaining terms of this Agreement and Exhibit A,
the Company agrees to pay to Marlow the $50,000 Supplemental Incentive Bonus
Amount, which shall be paid within ten days after the Applicable Termination
Date. Such payment shall be contingent on receipt by the Company of the
executed additional release attached hereto as Exhibit A.
(h) Withholding and Taxes. All basic salary payments,
incentive bonus payments, auto allowance payments and other payments made to
Marlow pursuant to this Agreement shall be subject to any and all applicable
income tax withholding, FICA taxes, FUTA taxes and any other required
deductions and withholdings.
(i) No Other Entitlements; Good and Complete
Consideration.
(1) Marlow agrees that he is not otherwise
entitled to payment or other benefit under any plans or policies of the
Company, including, but not limited to, any severance plan.
(2) Marlow covenants and agrees that the
amounts and considerations set forth in this Section 4 and Section 6 hereof are
in full and complete satisfaction of any and all sums owed to Marlow, if any,
by the Company and constitute good and complete consideration for his release
contained in Section 12 hereof and obligations under Sections 2, 3, 7, 8, 9,
10, 11, 15 and 16 hereof. Marlow agrees that the total of such consideration is
in addition to that, if any, which he might otherwise be entitled.
5. STOCK OPTIONS.
(a) Acknowledgments.
(1) The parties acknowledge that, under the
30,000 Share Option Agreement and subject to the terms and conditions thereof,
(i) as a result of the Company's recent 3 for 2 stock split, the 30,000 options
covered by the 30,000 Share Option Agreement which had an exercise price of
$22.96 per share were adjusted to be an aggregate of 45,000 options with an
exercise price of $15.31 per share, and (ii) as adjusted and subject to the
other provisions of the 30,000 Share Option Agreement, 15,000 of such options
are scheduled to vest on September 6, 2001 (the "First Tranche of 15,000"),
15,000 of such options are scheduled to vest on September 6, 2002 (the "Second
Tranche of 15,000") and the remaining 15,000 of such options are scheduled to
vest on September 6, 2003 (the "Third Tranche of 15,000").
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(2) The parties acknowledge that, under the
220,000 Share Option Agreement and subject to the terms and conditions thereof,
(i) as a result of the Company's recent 3 for 2 stock split, the 220,000
options covered by the 220,000 Share Option Agreement which had an exercise
price of $34.44 per share were adjusted to be an aggregate of 330,000 options
with an exercise price of $22.96 per share, and (ii) as adjusted and subject to
the other provisions of the 220,000 Share Option Agreement, 110,000 of such
options are scheduled to vest on September 6, 2001 (the "First Tranche of
110,000"), 110,000 of such options are scheduled to vest on September 6, 2002
(the "Second Tranche of 110,000") and the remaining 110,000 of such options are
scheduled to vest on September 6, 2003 (the "Third Tranche of 110,000").
(b) If Marlow Timely Delivers an Extension Notice. So
long as Marlow has not breached his obligations under this Agreement and if
Marlow timely delivers an Extension Notice, the parties acknowledge and agree
that the provisions of this Section 5(b) shall apply with respect to the stock
options covered by both the 30,000 Share Option Agreement and the 220,000 Share
Option Agreement, and the provisions of Section 5(c) shall not be applicable
(it being understood that the provisions of this Section 5(b) and the
provisions of Section 5(c) hereof shall be mutually exclusive such that if one
of such subsections applies, the other shall not):
(1) Because Marlow will be continuing as an
employee of the Company during the Extended Employment Continuation Period, the
First Tranche of 15,000, in accordance with and subject to the terms of the
30,000 Share Option Agreement, is expected to (i) vest in full on September 6,
2001, and (ii) be exercisable in accordance with the terms and conditions of
the 30,000 Share Option Agreement at any time commencing on September 6, 2001
and ending December 15, 2001 (i.e., three months after the termination of
Marlow's employment with the Company on the Applicable Termination Date).
(2) Because Marlow's employment relationship
with the Company will terminate on September 15, 2001, any and all rights to
the options covered by the Second Tranche of 15,000 and any and all rights to
the options covered by the Third Tranche of 15,000 will terminate in accordance
with and subject to the terms of the 30,000 Share Option Agreement, because no
portion of the options comprising the Second Tranche of 15,000 and no portion
of the options comprising the Third Tranche of 15,000 will have vested or will
have become exercisable as of that date. As such, Marlow confirms that,
effective as of September 15, 2001 and as a result of the termination as of
such date, (i) he shall be considered to have relinquished any and all rights
he may then have, may have had or in the future would have had under the
options comprising the Second Tranche of 15,000 and under the options
comprising the Third Tranche of 15,000 and (ii) the options comprising the
Second Tranche of 15,000 and the options comprising the Third Tranche of 15,000
shall become null and void in all respects.
(3) Because Marlow will be continuing as an
employee of the Company during the Extended Employment Continuation Period, the
First Tranche of 110,000, in accordance with and subject to the terms of the
220,000 Share Option Agreement, is expected to (i) vest in full on September 6,
2001, and (ii) be exercisable in accordance with the terms and conditions of
the
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220,000 Share Option Agreement at any time commencing on September 6, 2001 and
ending December 15, 2001 (i.e., three months after the termination of Marlow's
employment with the Company on the Applicable Termination Date).
(4) Because Marlow's employment relationship
with the Company will terminate on September 15, 2001, any and all rights to
the options covered by the Second Tranche of 110,000 and any and all rights to
the options covered by the Third Tranche of 110,000 will terminate in
accordance with and subject to the terms of the 220,000 Share Option Agreement,
because no portion of the options comprising the Second Tranche of 110,000 and
no portion of the options comprising the Third Tranche of 110,000 will have
vested or will have become exercisable as of that date. As such, Marlow
confirms that, effective as of September 15, 2001 and as a result of the
termination as of such date, (i) he shall be considered to have relinquished
any and all rights he may then have, may have had or in the future would have
had under the options comprising the Second Tranche of 110,000 and under the
options comprising the Third Tranche of 110,000 and (ii) the options comprising
the Second Tranche of 110,000 and the options comprising the Third Tranche of
110,000 shall become null and void in all respects.
(c) If Marlow Does Not Timely Deliver an Extension
Notice. So long as Marlow has not breached his obligations under this Agreement
and if Marlow does not timely deliver an Extension Notice, the parties
acknowledge and agree that the provisions of this Section 5(c) shall apply with
respect to the stock options covered by both the 30,000 Share Option Agreement
and the 220,000 Share Option Agreement, and the provisions of Section 5(b)
hereof shall not be applicable (it being understood that the provisions of this
Section 5(c) and the provisions of Section 5(b) hereof shall be mutually
exclusive such that if one of such subsections applies, the other shall not):
(1) Because Marlow's employment relationship
with the Company will terminate on September 1, 2001, any and all rights to the
options covered by the 30,000 Share Option Agreement will terminate in
accordance with and subject to the terms of the 30,000 Share Option Agreement,
because no portion of any of the options under the 30,000 Share Option
Agreement will have vested or will have become exercisable as of that date. As
such, Marlow confirms that, effective as of September 1, 2001 and as a result
of his termination as of such date, (i) he shall be considered to have
relinquished any and all rights he may then have, may have had or in the future
would have had under the options covered by the 30,000 Share Option Agreement
and (ii) all of the options covered by the 30,000 Share Option Agreement,
including the First Tranche of 15,000, the Second Tranche of 15,000 and the
Third Tranche of 15,000 shall become null and void in all respects.
(2) Because Marlow's employment relationship
with the Company will terminate on September 1, 2001, any and all rights to the
options covered by the 220,000 Share Option Agreement will terminate in
accordance with and subject to the terms of the 220,000 Share Option Agreement,
because no portion of any of the options under the 220,000 Share Option
Agreement will have vested or will have become exercisable as of that date. As
such, Marlow confirms that, effective as of September 1, 2001 and as a result
of his termination as of such date, (i)
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he shall be considered to have relinquished any and all rights he may then
have, may have had or in the future would have had under the options covered by
the 220,000 Share Option Agreement and (ii) all of the options covered by the
220,000 Share Option Agreement, including the First Tranche of 110,000, the
Second Tranche of 110,000 and the Third Tranche of 110,000 shall become null
and void in all respects.
6. PURSUIT OF CLAIM AND LIMITED INDEMNIFICATION WITH RESPECT TO
DORADO DISPUTE.
(1) The parties acknowledge that a dispute exists
between Dorado of Naples ("Dorado") and Marlow relative to a contract under
which Marlow, subject to specified terms and conditions, was to purchase
certain real estate from Dorado and that counsel for Dorado has advised the law
firm of Smoot Adams (counsel for Marlow and his wife) that suit had been filed
regarding this matter. Marlow is seeking return of a $100,000 deposit that he
had given to Dorado and Dorado has asserted that the deposit has been forfeited
as liquidated damages.
(2) The Company agrees to pay Marlow's reasonable costs
and expenses incurred with the Smoot Adams firm in defending against Dorado's
position that it is entitled to retain the entire deposit and in pursuing
Marlow's claim that he is entitled to a return of the deposit, it being
understood that such agreement to pay reasonable costs and expenses shall not
extend to costs and expenses in defending any other claims asserted by Dorado.
Although Marlow and the Company believe that Marlow should be entitled to a
return of the full deposit under the terms of the applicable real estate
contract and intend to vigorously defend Dorado's claim to the contrary and to
vigorously pursue Marlow's claim for a return of the deposit, the Company
agrees to indemnify Marlow for any portion of the deposit that may not be
returned by Dorado after the dispute has been finally resolved either by way of
final court action, binding arbitration or settlement; provided however that
the Company's liability to Marlow with respect to this indemnity for any
unreturned deposit or any other liability of Marlow under the applicable real
estate contract shall under no circumstances exceed $100,000.
(3) Because of the Company's agreement to pay the
reasonable costs and expense of litigation and to provide Marlow with this
limited indemnity, it is agreed that the Company, at its option, shall have the
right to take the primary role in directing the defense/pursuit of this dispute
from the perspective of Marlow's interest, with Marlow also providing input and
having the right to consult in good faith. In addition, provided that any
settlement relates only to the payment/retention of money and does not require
any payment of money by Marlow (other than forfeiture of all or a portion of
the deposit), the Company may require that such settlement be entered into and
effectuated, after consultation in good faith with Marlow.
7. RETURN OF COMPANY ASSETS AND PROPERTY. As promptly as
possible following the execution of this Agreement, Marlow will return to the
Company (1) all company credit cards and company calling cards in Marlow's
possession, (2) all keys and security badges providing access to any of the
Company's facilities and all Company owned equipment in Marlow's possession,
and (3)
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all documents, papers, information and software remaining in his possession
that he obtained from the Company, or that belong to the Company, without
retaining any copies thereof.
8. REMOVAL OF PERSONAL PROPERTY FROM THE COMPANY'S OFFICES. The
Company acknowledges that certain property belonging to Marlow may remain
physically located at the Company's offices, including without limitation,
certain office furniture, computer equipment and wall hangings. The Company
agrees to permit Marlow, during normal business hours and upon reasonable
notice to a senior officer of the Company and for a period ending on June 30,
2001, to remove or arrange for the removal of such personal effects.
9. TRANSITION EMPLOYMENT.
(1) From the date hereof, through and including the
Applicable Termination Date, and for no additional compensation other than
provided in this Agreement, Marlow shall continue as an employee of the Company
under common law rules and, as such, shall make himself available to provide
such advice and assistance as the Company may from time to time during such
period reasonably request in order to effectuate a smooth transition of
management associated with Marlow's departure from the Company on the
Applicable Termination Date; provided that such services shall not exceed,
without the consent of Marlow, twenty five hours from the date of this
Agreement until September 1, 2001 (and an additional five hours if the
Applicable Termination Date is extended in the manner provided herein to
September 15, 2001); and provided further that all such services shall be
provided by way of communications directly with Marvin Gralnick or Scott
Edmonds or as otherwise may be authorized in writing by Marvin Gralnick or
Scott Edmonds. During the Base Employment Continuation Period and any Extended
Employment Continuation Period, the Company shall have the right to control and
direct Marlow not only as to the results to be accomplished by Marlow but also
as to the detail and means by which such results are accomplished by Marlow.
The parties acknowledge that, among other matters, Marlow's services as an
employee are being continued until the Applicable Termination Date because of
his past involvement in helping to coordinate efforts concerning the Company's
relationships with the factories utilized to assemble the Company's merchandise
and fabric purchases and warehousing for the fabric and because of the
importance of such relationships, merchandise and inventories to the continued
success of the Company.
(2) The Company anticipates that the services to be
rendered by Marlow from June 15, 2001 through the Applicable Termination Date
will be performed away from the Company's Ft. Myers offices with communications
provided principally by way of telephone; however, Marlow agrees to provide
such services at the Ft. Myers offices of the Company if expressly requested to
do so by senior executives of the Company and if his reasonable costs of travel
to Ft. Myers are paid by the Company in accordance with the Company's expense
reimbursement policies. Otherwise, in the performance of such services, Marlow
shall not be required to travel.
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10. PROPERTY RIGHTS AND USE OR DISCLOSURE OF CONFIDENTIAL
INFORMATION; NONSOLICITATION. Marlow shall continue to be bound in all respects
by the provisions of the Employment Agreement relating to Confidentiality as
contained in Section 10 thereof and the provisions of the Employment Agreement
relating to Nonsolicitation as contained in Section 11 thereof; and
notwithstanding the termination of the Employment Agreement in all other
respects, such Sections 10 and 11 shall continue in force and effect as
separately enforceable agreements as if such provisions were contained herein.
Such continuing obligations shall be in addition to Marlow's obligations
arising under applicable law including without limitation the obligations
relating to trade secrets arising under Chapter 688, Florida Statutes. For
purposes of the continuing effectiveness of the provisions of Section 11 of the
Employment Agreement, Marlow's employment under Section 9 of this Agreement
shall be considered continued employment of Marlow by the Company through the
end of the Base Employment Continuation Period or the Extended Employment
Continuation Period, as the case may be, and the additional two (2) year
restriction period contemplated by the provisions of Section 11 of the
Employment Agreement shall be considered to begin as of the applicable
Termination Date (September 1, 2001 or September 15, 2001, as the case may be).
11. NON-DISPARAGEMENT; PUBLIC DISCLOSURE.
(1) Marlow covenants and agrees that he will not make
any disparaging remarks, whether orally or in writing, about the Company, its
subsidiaries and/or related entities, its products, services, officers, Board
of Directors, managers, supervisors, and employees, to any persons whatsoever.
The obligation under this Section includes, but is not limited to, refraining
from making any disparaging, degrading or demeaning remarks or casting any
aspersions on the Company which are reasonably likely to have a harmful effect
on its reputation. Marlow will not communicate with the press or make any press
release or other similar public disclosure regarding the circumstances leading
up to this Agreement except after consulting in good faith with the Company.
(2) Neither the Company nor any of its directors or
senior officers will issue any formal Company sponsored release or formal
Company sponsored communication with the press, or issue any press release or
other similar formal public disclosure regarding the circumstances leading up
to this Agreement, except after consulting in good faith with Marlow; provided
however, that nothing herein shall be deemed to prohibit the Company from
making any disclosure which is required in order to fulfill the Company's
disclosure obligations imposed by law.
12. GENERAL RELEASES BY MARLOW; CONDITION TO SUBSEQUENT DELIVERY
OF GENERAL RELEASES BY THE COMPANY.
(1) Marlow, for himself, his heirs, personal
representatives, and assigns, does hereby remise, release and forever discharge
the Company and its respective officers, directors, employees, agents,
shareholders, and affiliates, including, but not limited to, the Company, its
respective predecessors, successors, assigns, heirs, executors, administrators,
the Company's benefit
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plans, including the 401(k) Plan, the benefit plan's trustees, administrators,
and all other fiduciaries, employees, and their agents (collectively,
"Releasees"), of and from any and all manner of actions and causes of action,
suits, debts, claims, and demands whatsoever at law or in equity, known or
unknown, actual or contingent, which Marlow and his heirs, executors,
administrators, agents, distributees, beneficiaries, successors in interest and
assignees, ever had or now have or in the future may have, by reason of any
matter, cause or thing whatsoever from the beginning of the world to the day of
the date of these presents. The Release by Marlow includes, but is not limited
to the following (except that such Release shall not operate to release the
Company from its express obligations under this Agreement):
(1) Any and all claims for salary, wages,
compensation, monetary relief, employment benefits, including but not limited
to, any claims for benefits under, or contribution to, an associate benefits
plan, profit sharing or any retirement plan, capital stock, bonuses, merit and
longevity increases, and all other benefits of all kind, earnings, backpay,
front pay, liquidated, and other damages, interest, attorney's fees and costs,
compensatory damages, punitive damages, damage to character, damage to
reputation, emotional distress, mental anguish, depression, injury, impairment
in locating employment, financial loss, pain and suffering, injunctive and
declaratory relief arising from his employment with the Company or his
separation thereof.
(2) Any and all claims growing out of,
resulting from, or connected in any way to Marlow's employment with the
Company, and/or the separation thereof, including any and all claims for
discrimination, including but not limited to discrimination on the basis of
race, national origin, color, religion, handicap or disability, age, sex,
harassment of any kind, including sexual harassment, retaliation,
whistleblowing, breach of contract, rescission, promises, claims under the
Employee Retirement Income Security Act of 1974 ("ERISA") [29 U.S.C. Sections
1001-1461], as amended, including ERISA Section 510 and any claims to benefits
under any and all bonus, severance or any other similar plan sponsored by the
Company now and hereafter, torts of all kinds, including but not limited to,
misrepresentation, negligent or otherwise, fraud, defamation, slander, libel,
worker's compensation retaliation, interference with an advantageous business
relationship, negligent employment, including negligent hiring, negligent
retention, and negligent supervision, discrimination, claims or rights under
state and federal whistleblower legislation, including Sections
448.101-448.105, Florida Statutes, as amended, the Consolidated Omnibus Budget
Reconciliation Act of 1985 [Pub. L. 99-509], as amended ("COBRA"), the Florida
Health Insurance Coverage Continuation Act ("FHICCA"), the Family and Medical
Leave Act [29 U.S.C. Sections 2601-2654], as amended ("FMLA"), the Americans
with Disabilities Act [42 U.S.C. Sections 12101-12213], as amended ("ADA"), the
Age Discrimination in Employment Act, as amended ("ADEA"), the Polygraph
Protection Act, the Internal Revenue Code [Title 26, U.S.C.], as amended, the
Older Workers Benefit Protection Act [29 U.S.C. Section 621-630], as amended
("OWBPA"), the Equal Pay Act [29 U.S.C. Section 206(d)], as amended ('EPA"),
Title VII of the Civil Rights Act of 1964 [42 U.S.C. Section 2000e-2000e-17],
as amended ("Title VII"), the Florida Civil Rights Act of 1992 [Sections
760.02-760.11, Fla. Stats.], as amended ("FCRA"), the Uniformed Services
Employment and Reemployment Rights Act of 1994 [38 U.S.C. Sections 4301-4333]
("USERRA"), the National Labor Relations Act [29 U.S.C. Sections 151-169], as
amended ("NLRA"), the Occupational Safety
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and Health Act [29 U.S.C. Sections 651-678], as amended ("OSHA"), the Fair
Labor Standards Act [29 U.S.C. Sections 201-219], as amended ("FLSA"),
retaliation pursuant to Section 440.205 Florida Statutes, and any other claim
of any kind.
(3) Marlow agrees that if he violates this
Agreement by suing Releasees with respect to any matter for which he has herein
released the Company, he will pay all costs, damages, and expenses of defending
the suit incurred by Releasees or those associated with Releasees, including
reasonable attorneys' fees and all further costs and fees.
(2) In exchange for Marlow's agreement to execute the
release attached hereto as Exhibit A on or shortly after the applicable
Termination Date, and provided such release is executed and delivered to the
Company on or shortly after the applicable Termination Date and subject to
compliance with the remaining terms of this Agreement and the terms of the
release set forth in Exhibit A, the Company shall pay the $50,000 Supplemental
Incentive Bonus Amount as more specifically provided in Section 4(g) hereof and
shall execute and deliver the release attached hereto as Exhibit B.
13. ENFORCEMENT; ATTORNEYS' FEES. If, within 10 days after demand
to comply with the obligations of one of the parties to this Agreement served
in writing on the other, compliance or reasonable assurance of compliance is
not forthcoming, and the other party engages the services of an attorney to
enforce rights under this Agreement, the prevailing party in any action shall
be entitled to recover all reasonable costs and expenses (including reasonable
attorneys' fees before and at trial and in appellate proceedings).
14. NOTICES. Any notice, request, demand, consent, approval,
instruction or other communication required or permitted under this Agreement
(collectively a "notice") shall be in writing and shall be sufficiently given
if delivered in person, sent by telex or telecopier, sent by a reputable
overnight courier service or sent by registered or certified mail, postage
prepaid, as follows:
If to Marlow: Tedford Marlow
553 Weed Street
New Caanan, Connecticut 06840
Telecopy: (203) 966-6180
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If to the Company: Chico's FAS, Inc.
11215 Metro Parkway
Ft. Myers, FL 33912
Attn: Marvin J. Gralnick
President and Chief Executive Officer
Telecopy: (941) 277-7035
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Any notice which is delivered personally in the manner provided herein shall be
deemed to have been duly given to the party to whom it is directed upon actual
receipt by such party (or by such party's agent for notices hereunder). Any
notice which is addressed and mailed in the manner herein provided shall be
presumed to have been duly given to the party to whom it is addressed at the
close of business, local time of the recipient, on the fifth day after the date
it is so placed in the mail. Any notice which is telexed or telecopied in the
manner provided herein shall be presumed to have been duly given to the party
to whom it is directed upon confirmation of such telex or telecopy. Any notice
which is sent by a reputable overnight courier service in the manner provided
herein shall be presumed to have been duly given to the party to which it is
addressed at the close of business on the next day after the day it is
deposited with such courier service.
Any person wishing to change the person or address to whom notices are
to be given may do so by complying with the foregoing notice provisions.
15. OTHER FUTURE COOPERATION. It is agreed and understood that,
notwithstanding the other provisions of this Agreement, Marlow will continue
after the Employment Continuation Period to make himself available and
cooperate in any reasonable manner at reasonable times in providing assistance
to the Company in concluding any matters which are presently pending but only
to the extent that Marlow was directly involved in such matter while in the
Company's employ. In securing such cooperation, the Company will be reasonable
in considering other commitments and time constraints that Marlow may have at
the time such assistance is requested. It is understood that such cooperation
and assistance shall be without additional compensation to Marlow. Should
Marlow ever receive notice of a subpoena in the future or other attempt to talk
with him or attempt to obtain his testimony relating to or regarding the
Company in any way, Marlow agrees to notify counsel for the Company, Gary I.
Teblum, 101 E. Kennedy Boulevard, Suite 2700, Tampa, Florida 33602, (813)
227-7457 (phone) or (813) 229-6553 (fax) and to provide a copy of any subpoena
or request, within two (2) calendar days of receipt of such notice. Further,
Marlow agrees to and authorizes, at the Company's expense, the assertion of an
objection or objections and a motion for protective order, motion to quash or
other legal proceeding ("legal proceeding") in order that all legal rights of
the Company, including those set forth in the Agreement, may be fully
protected. Marlow agrees that he will not respond to any attempt to talk with
him or obtain his testimony, should a legal proceeding be asserted, until such
legal proceeding has been finally determined. Marlow further agrees that a
representative, in behalf of, chosen by, and at the expense of the Company,
will have the opportunity to participate fully during any testimony, statements
or communication by him in any proceeding relating to the Company, including
raising objections to any examination, examining witnesses, and the right to
have a record made by a court reporter or other means of the testimony,
statements or communication or objections. Within the restrictions set forth in
this Section 15, Marlow shall provide truthful testimony to or before a court
or regulatory body.
16. WAIVER OF REINSTATEMENT/COVENANT NOT TO RE-APPLY. As part of
the settlement, Marlow specifically waives any present and future claim to
reinstatement or employment with the
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Company at any time in the future. Marlow further specifically agrees, as a
condition of his receipt and retention of the sums and other consideration
provided for herein, not to seek employment with the Company at any time in the
future.
17. SUCCESSORS AND ASSIGNS; APPLICABLE LAW. This Agreement shall
be binding upon and inure to the benefit of Marlow and his heirs,
administrators, representatives, executors, successors and assigns, and shall
be binding upon and inure to the benefit of Releasees and each of them, and to
their respective heirs, administrators, representatives, executors, successors
and assigns. This Agreement shall be construed and interpreted in accordance
with the laws of the state of Florida.
18. COMPLETE AGREEMENT. This Agreement shall constitute the full
and complete agreement between the parties concerning its subject matter and
fully supersedes any and all other prior agreements or understandings between
the parties regarding the subject matter hereto. This Agreement shall not be
modified or amended except by a written instrument signed by both Marlow and an
authorized representative of the Company.
19. SEVERABILITY. The unenforceability or invalidity of any
particular provision of this Agreement shall not affect its other provisions
and to the extent necessary to give such other provisions effect, they shall be
deemed severable.
20. WAIVER OF BREACH; SPECIFIC PERFORMANCE. The waiver of a
breach of any provision of this Agreement shall not operate or be construed as
a waiver of any other breach. Each of the parties to this Agreement will be
entitled to enforce its rights under this Agreement specifically to recover
damages by reason of any breach of any provision of this Agreement and to
exercise all other rights existing in its favor. The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of
any of the provisions of this Agreement and that any party may in its sole
discretion apply to any court of law or equity of competent jurisdiction for
specific performance and/or injunctive relief in order to enforce or prevent
any violations of any of the provisions of this Agreement.
21. NO ADMISSIONS OF LIABILITY. This Agreement shall not in any
way be construed as an admission by the Company or Marlow of any improper
actions or liability whatsoever as to one another, and each specifically
disclaims any liability to or improper actions against the other or any other
person, on the part of itself, its employees or its agents.
22. REVERSION OF THE PROCEEDS. Marlow covenants and agrees that
all monies received under this Agreement will become immediately due and
payable to the Company if Marlow should ever disavow this Agreement, breach any
term of this Agreement or if the Agreement is found to be unenforceable.
23. ACKNOWLEDGMENT /VOLUNTARY SIGNING OF AGREEMENT. Marlow
warrants, represents, and agrees that he has been encouraged to seek advice
from anyone of his choosing regarding this Agreement, including his attorney,
accountant or tax advisor prior to his signing it; that this Agreement
represents written notice to do so; and that he has been given the opportunity
and
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sufficient time to seek such advice; and that he fully understands the meaning
and contents of this Agreement. MARLOW UNDERSTANDS THAT HE HAD THE RIGHT TO
TAKE UP TO TWENTY-ONE (21) DAYS TO CONSIDER WHETHER OR NOT HE DESIRES TO ENTER
INTO THIS AGREEMENT. Marlow acknowledges that he has completely read this
Agreement and that prior to signing he has had sufficient opportunity to
examine it and ask questions and consult with his attorneys and other persons
of his own choosing prior to entering into this Agreement. Marlow further
acknowledges that this Agreement is being signed voluntarily and without
coercion or duress and with full understanding of its terms and effects. Marlow
has not been promised any benefit except for the mutual consideration set out
herein and there are no other understandings or oral/written agreements
relating to the separation of his employment relationship except those set out
above. Marlow specifically states that he is executing this Agreement knowingly
and voluntarily.
24. Ability to Revoke Agreement. MARLOW UNDERSTANDS THAT HE
MAY REVOKE THIS AGREEMENT BY NOTIFYING THE COMPANY IN WRITING OF SUCH
REVOCATION WITHIN SEVEN (7) DAYS OF HIS EXECUTION OF THIS AGREEMENT AND THAT
THIS AGREEMENT IS NOT EFFECTIVE UNTIL THE EXPIRATION OF SUCH SEVEN (7) DAYS.
HE UNDERSTANDS THAT UPON THE EXPIRATION OF SUCH SEVEN (7) DAY PERIOD THIS
AGREEMENT WILL BE BINDING UPON HIM AND HIS HEIRS, ADMINISTRATORS,
REPRESENTATIVES, EXECUTORS, SUCCESSORS AND ASSIGNS AND WILL BE IRREVOCABLE.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement,
as of the date first above written.
WITNESS: CHICO'S FAS, INC.
/s/ Scott Edmonds By: /s/ Marvin J. Gralnick
/s/ Robin Martin Marvin J. Gralnick
President and Chief Executive Officer
I UNDERSTAND THAT BY SIGNING THIS AGREEMENT, I AM GIVING UP RIGHTS I MAY HAVE.
I UNDERSTAND THAT I DO NOT HAVE TO SIGN THIS AGREEMENT.
WITNESS:
/s/ Traci Fields /s/ Tedford Marlow
/s/ Mary M. Curry Tedford Marlow
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