AMENDMENT NO. 2 TO EMPLOYMENT AGREEMENT
Exhibit
10.1
THIS AMENDMENT NO. 2 TO EMPLOYMENT AGREEMENT is made and entered into this 18 day of
December, 2008, by and between CHICO’S FAS, INC., a Florida corporation (the “Company”), and XXXXX
X. XXXXXXX (the “Executive”).
WITNESSETH:
WHEREAS, the parties hereto have entered into that certain Employment Agreement dated
December 29, 2003, as amended June 22, 2004, by and between the Company and the Executive (the
“Employment Agreement”); and
WHEREAS, the Company and the Executive have agreed to amend the terms of the Employment
Agreement in certain respects as set forth in this Amendment No. 2 to Employment Agreement (the
“Amendment”), to comply with Section 409A of the Internal Revenue Code of 1986, as amended.
NOW, THEREFORE, effective January 1, 2005, it is agreed as follows:
| 1. | REIMBURSEMENTS |
Section 3(d) of the Employment Agreement is amended to add the following three sentences to
the end thereto which shall read as follows:
The reimbursement payment for costs, expenses or in-kind benefits under this Section
or otherwise, except as permitted by Section 409A of the Code, shall (1) be made no
later than the end of the calendar year following the calendar year in which such
costs, expenses or in-kind benefits were incurred or provided, (2) the amount of
expenses eligible for reimbursement, or in-kind benefits provided, during any taxable
year shall not affect on the amounts of expenses eligible for reimbursement, or
in-kind benefits to be provided, in any other taxable year (other than with regard to
a limit related to the period in which an arrangement is in effect with regard to an
arrangement subject to Section 105(b) of the Internal Revenue Code of 1986, as
amended) and (3) the reimbursement or in-kind benefit cannot be liquidated or
exchanged for any other benefit.
| 2. | DEATH |
Section 7(a) of the Employment Agreement is amended to add the following sentence immediately
before the last sentence thereto which shall read as follows:
The Base Salary payment shall be made in accordance with the Employer’s
standard payroll policies and the bonus payments shall be made at such time as they
would otherwise have been made in the normal course.
| 3. | DISABILITY |
Section 7(b)(iii) of the Employment Agreement is amended to add the following two sentences
to the end thereto which shall read as follows:
Notwithstanding the foregoing, in the event the Executive incurs an earlier
separation from service (within the meaning of Section 409A of the Code) as a result
of a physical or mental incapacity or illness, such separation from service shall be
a Disability termination under this section. Notwithstanding anything herein to the
contrary, in the event of Executive’s separation from service due to Permanent
Disability, payments due and owing hereunder shall be made in a lump sum amount
(less projected disability benefits to be received under the Employer’s disability
insurance) on the date which is six (6) months and one (1) day following Executive’s
separation from service.
| 4. | DELAYED PAYMENT OF BENEFITS |
Sections 7(b)(ii), 8(a), 8(b), 8(d), and 8(e) of the Employment Agreement are amended to add
the following to the end of each such section, which shall read as follows:
Notwithstanding the above to the contrary, in the event the Executive is a
“specified employee” (as such term is defined in Section 409A(a)(2)(B)(i) of the
Code), any payment due and payable to the Executive hereunder as a result of the
Executive’s separation from service (within the mean of Section 409A of the Code)
with the Employer which is “nonqualified deferred compensation” under Section 409A
of the Code shall not be made before the earlier of (i) the date which is six (6)
months after such severance from service or (ii) Executive’s death. In addition, no
amount which is “nonqualified deferred compensation” shall be paid on a termination
of employment unless such termination of employment is a separation from service.
| 5. | PAYMENT OF ACCRUED AMOUNTS |
The first sentence of Section 8(a)(i) of the Employment Agreement is amended to insert the
following phrase immediately following the parenthetical (collectively, the “Accrued Amounts”)
which shall read as follows:
“ . . ., such Accrued Amounts (other than any bonus) to be paid within sixty (60)
days following the Executive’s termination of employment, with any bonus amount to be
paid at such time as it would otherwise have been paid in the normal
course . . .”
| 6. | GOOD REASON TERMINATION |
(a) Section 8(b)(ii)(A) of the Employment Agreement is amended in its entirety to
read as follows:
“provide the Executive with the following payments on the date which is six (6)
months and one (1) day after Executive’s separation from service: (1) a lump sum
payment equal to the Accrued Amounts, and (ii) a lump sum equal to two (2) times the
sum of: (a) the Executive’s Base Salary then in effect and (b) the Target Bonus;”
(b) Section 8(b)(ii)(C) of the Employment Agreement is amended to add the
following phrase to the end thereto which shall read as follows:
“ . . .; in the event the provision of such continued health benefits would be a
taxable benefit, in lieu of providing the coverage, the Employer shall provide
Executive with access to such continuation coverage and pay to the Executive in a
lump sum payment on the sixtieth (60th) day following the Executive’s
termination of employment, an amount equal to 24 times (24x) the monthly COBRA
premium rate applicable as of the date of Executive’s termination of employment.”
| 7. | CHANGE IN CONTROL |
The conclusory paragraph of Section 8(e)(i) of the Employment Agreement that immediately
follows Section 8(e)(i)(C) is amended in its entirety to read as follows:
“provided, in the event the “in contemplation” of applies, the Executive shall receive
the payments and benefits under Section 8(b) or 8(d), above, at the time set forth in
such section, and, if within the six (6) month period following Executive’s
separation from service, the “in contemplation of” Change in Control occurs, Executive
shall also receive an additional one times (lx) the amount set forth in Sections
8(b)(ii)(A)(ii) and 8(b)(ii)(B) at the same time Executive receives the amounts under
Section 8(b) or 8(d) and an additional twelve (12) months under Section 8(b)(ii)(C).”
| 8. | RELEASE |
Section 8(g) of the Employment Agreement is amended to add the following sentence to the end
thereto which shall read as follows:
In order to receive payment of any compensation that is subject to the execution of
the release, the release must be executed and effective no later than sixty (60)
days following termination of employment.
| 9. | ARBITRATION |
Section 18 of the Employment Agreement is amended to add the following sentence
immediately before the last sentence thereto which shall read as follows:
Reimbursement for such fees and expenses shall be made within sixty (60) days
following the rendering of the award of such fees and expenses.
| 10. | 409A COMPLIANCE |
A new Section 26 of the Employment Agreement is added which shall read as follows:
Section 26. 409A Compliance. Notwithstanding any Employment Agreement
provisions to the contrary and, to the extent applicable, the Employment Agreement
shall be interpreted, construed, and administered (including with respect to any
amendment, modification, or termination of the Employment Agreement) in such a
manner so as to comply with the provisions of Code Section 409A and any related
Internal Revenue Service guidance promulgated thereunder (including, where
applicable, its exemptive provisions). Notwithstanding anything herein to the
contrary, (i) if at the time of termination of employment with the Employer,
Executive is a “specified employee” (as such term is defined in Section
409A(a)(2)(B)(i) of the Code), any payment due and payable to the Executive
hereunder as a result of the Executive’s separation from service (within the mean of
Section 409A of the Code) with the Employer which is “nonqualified deferred
compensation” under Section 409A of the Code shall not be made before the earlier of
(a) the date which is six (6) months after such severance from service or (b)
Executive’s death, with a catch-up payment to be made at the end of such six (6)
month period, and (ii) if any other payments of money or other benefits due to
Executive hereunder could cause the application of an accelerated or additional tax
under Section 409A of the Code, such payments or other benefits shall be deferred if
deferral will make such payment or other benefits compliant under Section 409A of
the Code, or otherwise such payment or other benefits shall be restructured, to the
extent possible, in a manner, determined by the Employer, that does not cause such
an accelerated or additional tax. To the extent any reimbursements or in-kind
benefits due to Executive under this Agreement constitute “deferred compensation”
under Section 409A of the Code, any such reimbursements or in-kind benefits shall be
paid to Executive in a manner consistent with Treas. Reg. Section
1.409A-3(i)(1)(iv). Each payment made under this Agreement shall be designated as a
“separate payment” within the meaning of Section 409A of the Code.
| 11. | EXHIBIT B |
Section (b) of Exhibit B of the Employment Agreement is amended to add a sentence to the end
thereto which shall read as follows:
Notwithstanding the preceding to the contrary, any Gross-Up Payment payable to the
Executive shall be made by the end of the Executive’s taxable year following the
taxable year in which the Executive remits the related taxes to the
governing authorities, which such Gross-Up Payment based on Executive’s actual incremental
tax rate.
| 12. | MISCELLANEOUS |
Except to the extent specifically modified, added or deleted by this
Amendment No. 2, the terms and
provisions of the Employment Agreement shall otherwise remain in full
force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment the day and year first above
written.
| CHICO’S FAS, INC. |
||||
| By: | /s/ Xxxxxxx X. Xxxxxx, Xx. | |||
| “Company” | ||||
| /s/ Xxxxx X. Xxxxxxx | ||||
| XXXXX X. XXXXXXX | ||||
| “Executive” | ||||
