EXHIBIT 10.13
EXECUTION VERSION
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into this
29th day of December, 2003, but is effective as of the 3rd day of September,
2003 (the "Commencement Date"), by and between CHICO'S FAS, INC., a Florida
corporation (the "Employer"), and XXXXX X. XXXXXXX (the "Executive").
W I T N E S S E T H:
1. EMPLOYMENT. The Employer hereby employs the Executive, and the
Executive 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 Commencement Date and shall continue through March 1, 2005; provided,
however, that beginning on March 1, 2005, and on each March 1st (each a "Renewal
Date") thereafter, the term of employment under this Agreement shall
automatically be extended for one (1) additional year, unless either party gives
the other written notice of non-renewal at least one hundred eighty (180) days
prior to any such Renewal Date (the "Employment Term"). A notice of non-renewal
of the Employment Term by the Employer shall be deemed to be a termination of
the Executive's employment without Good Cause (as defined below) as of the end
of the then Employment Term, but the Executive may terminate at any time after
the receipt of such notice and shall be treated as if he was terminated without
Good Cause as of such date.
3. COMPENSATION; REIMBURSEMENT, ETC.
(a) Basic Salary. The Employer shall pay to the Executive
as compensation for all services rendered by the Executive during the
Employment Term a basic annualized salary of $750,000 per year (the
"Basic Salary"), or such other sum as the parties may agree on, in
writing, 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 Executive's
compensation from time to time by action of the Board of Directors,
provided that the Basic Salary may not be decreased, and, provided,
further, once the Basic Salary is increased it may not be decreased
below such increased amount. 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 Executive 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
Executive.
(b) Bonus. 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 Executive's performance and computed
in accordance with the incentive bonus plan adopted
each year by the Board of Directors of the Employer, provided that for
each bonus period during the Employment Term the target bonus shall be
equal to at least 100% of the Executive's Basic Salary during such
bonus period (the "Target Bonus").
(c) Stock Options. Subsequent to the Commencement Date
and no later than thirty (30) days after the execution date of this
Agreement, the Executive shall receive or shall have received one or
more nonqualified stock options to purchase an aggregate of 150,000
shares of the Employer's common stock. The right to purchase such stock
shall be nontransferable and shall vest in equal thirds on each one (1)
year anniversary of the Commencement Date over a three (3) year period
commencing one (1) year after the Commencement Date. The options shall
have a term of ten (10) years and the exercise price of the options
shall be equal to the closing market price of the stock on the date of
grant. The options shall become fully vested upon the occurrence of any
of the following: (i) a termination of Executive's employment by the
Employer without Good Cause (as defined below); (ii) a termination of
the Executive's employment by the Executive for Good Reason (as defined
below); (iii) a termination of the Executive's employment as a result
of his death or Permanent Disability (as defined below); or (iv) the
occurrence of a Change in Control (as defined below) (the "Accelerated
Vesting"). The Employer may grant said stock options either under the
Employer's currently existing stock option plans ("Plans"), or in such
other manner as may be determined by the Employer; provided, however,
that the terms pursuant to which the stock option is granted, if
granted outside of the Plans, shall be substantially similar to the
terms of grant contained in the Plans, and further provided, that in
any case the shares of common stock underlying the options shall be
registered on Form S-8 (or an equivalent registration statement).
During the Employment Term, the Executive shall also be eligible to
receive additional stock options as determined by the Board of
Directors (or the appropriate committee thereof) in accordance with the
Employer's practices applicable to senior executives of the Employer,
provided that the next time the Employer makes its customary grant of
options to senior officers of the Employer, the Executive shall be
granted options in an amount, on a basis relative to other
contemporaneous option grants to officers, considered in the judgment
of the Board of Directors (or the appropriate committee thereof) to be
commensurate with the Executive's position, all on the same terms as
described above, provided that the option price of such additional
options shall be equal to the closing market price of the stock on the
date of such additional grant and vesting shall commence on the date of
such additional grant.
(d) Reimbursements. The Employer shall pay or reimburse
the Executive for all reasonable expenses incurred by the Executive in
the performance of his duties under this Agreement; provided, however,
that the Executive must furnish to the Employer an itemized account,
reasonably satisfactory to the Employer, in substantiation of such
expenditures. The Executive shall be entitled to first class air travel
where the travel involves a domestic flight in excess of four (4) hours
or an international flight.
2.
(e) Other Fringe Benefits. The Executive 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 senior officers of the Employer at a level
commensurate with the Executive's position.
(f) Automobile. The Executive shall provide his own
automobile for use as an employee hereunder. The Employer shall provide
the Executive with an automobile allowance of $2,000 per month ($24,000
per year).
4. DUTIES. The Executive is engaged as the Chief Executive
Officer and President of the Employer, and as of the Commencement Date, shall be
elected or appointed to the Board of Directors of the Employer no later than
March 31, 2004. The Executive shall have such duties, authority and
responsibilities as are commensurate with his positions. In addition, the
Executive 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, which shall be consistent with the duties and authority of chief
executive officers of public companies of similar size and type. The Executive
shall report directly to the Board of Directors.
5. EXTENT OF SERVICES; VACATIONS AND DAYS OFF.
(a) During the Employment Term, except during customary
vacation periods and periods of illness, the Executive shall devote
substantially all of his time and attention during regular business
hours to the benefit and business of the Employer as may be reasonably
necessary in performing the Executive's duties pursuant to this
Agreement. Notwithstanding the foregoing, the Executive may (i) serve
on corporate, trade association, civic, religious or charitable boards
or committees, (ii) deliver lectures, fulfill speaking engagements or
teach at educational institutions and (iii) manage personal
investments, so long as such activities do not interfere with the
performance of the Executive's duties and responsibilities and do not
create a conflict of interest.
(b) The Executive shall be entitled to at least four (4)
weeks of vacation per year 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 and applied to other
senior officers of the Employer.
6. FACILITIES. The Employer shall provide the Executive with a
fully furnished office commensurate with the Executive's position at the
Employer's executive offices, and the facilities of the Employer shall be
generally available to the Executive 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
Executive's duties under this Agreement shall be supplied by the Employer.
7. ILLNESS OR INCAPACITY, TERMINATION ON DEATH, ETC.
3.
(a) DEATH OF EXECUTIVE. The Employment Term shall
terminate automatically on the Executive's death. If the Executive dies
during the Employment Term, the Employer shall pay to the estate of the
Executive such compensation, including any bonus compensation earned
but not yet paid for any completed fiscal year, as would otherwise have
been payable to the Executive up to the end of the month in which his
death occurs, any unreimbursed business expenses payable in accordance
with the Employer's policies, accrued but unusued vacation payable in
accordance with the Employer's policies, and all other payments and
benefits to which the Executive may be entitled under the terms of any
applicable plan, program, policy or arrangement (as modified herein).
In addition, following the date of the Executive's death and for twelve
(12) months thereafter, the Employer shall pay monthly the following
amount to the estate of the Executive the sum of (i) one (1) year's
Basic Salary (as existing at the time of death) divided by twelve (12);
and (ii) an amount equal to the greater of the Target Bonus or the
highest actual bonus paid to the Executive in the three (3) fiscal
years preceding the Executive's death and divided by twelve (12). The
Executive's estate shall also be entitled to the Accelerated Vesting,
continued medical coverage for the Executive's dependents for two (2)
years at the same level in effect immediately prior to the Executive's
death. The Employer shall have no additional financial obligation under
this Agreement to the Executive or his estate, and after receiving the
payments provided in this subparagraph (a), the Executive and his
estate shall have no further rights under this Agreement (other than
the Executive's right to indemnification and directors and officers
liability insurance as provided herein).
(b) DISABILITY OF EXECUTIVE.
(i) During any period of disability, illness or
incapacity during the term of this Agreement which renders the
Executive at least temporarily unable to perform the services required
under this Agreement, the Executive shall continue to receive the
compensation and benefits payable under Section 3(a) of this Agreement,
less any benefits received by him under any disability insurance
carried by or provided by the Employer.
(ii) If, as a result of the Executive's Permanent
Disability (as defined below), the Executive has been unable to perform
his duties under this Agreement, the Employer may terminate the
Executive's employment hereunder in accordance with subsection (iii)
below. Upon a termination of the Executive's employment as a result of
Permanent Disability, all rights of the Executive under this Agreement
(other than rights already accrued and the Executive's right to
indemnification and directors and officers liability insurance as
provided herein) shall terminate as provided below, and the Executive
shall receive the compensation and benefits payable under Section 7(a)
of this Agreement, less any benefits received by him under any
disability income insurance which may be carried by or provided by the
Employer from time to time.
4.
(iii) The term Permanent Disability as used in
this Agreement shall mean the Executive incurring a condition that
satisfies the definition of disability under any long term disability
income insurance which may be carried, or provided by, the Employer
from time to time, and such condition has caused the Executive not to
be able to perform his material duties and responsibilities for at
least six (6) months after its occurrence, or in the absence of such
insurance, a condition that renders the Executive unable by reason of
physical or mental illness or incapacity to perform the duties required
of him under this Agreement for a period in excess of one hundred and
twenty (120) consecutive days or one hundred and eighty (180) days in
any consecutive twelve (12) month period. Upon such determination, the
Board of Directors may terminate the Executive'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 Executive, the parties hereto agree to
abide by the decision of a panel of three (3) physicians. The Executive
and Employer shall each appoint one (1) member, and the third member of
the panel shall be appointed by the other two (2) members. The
Executive agrees to make himself reasonably available for and submit to
examinations by such physicians as may be reasonably directed by the
Employer. The Employer shall pay all costs and expenses with respect to
the determination of Permanent Disability. If the Executive receives
any amounts under any disability policy carried or provided by the
Employer, the amount actually received thereunder prior to the end of
the aforesaid six (6) month period shall be offset against any base
salary due to the Executive from the Employer during the corresponding
period.
8. OTHER TERMINATIONS AND CONSEQUENCES OF TERMINATION.
(a) VOLUNTARY TERMINATION BY EXECUTIVE WITHOUT GOOD
REASON.
(i) The Executive may terminate his employment
hereunder without Good Reason (as defined below) upon at least sixty
(60) days' prior written notice to the Employer. Promptly after the
effective date of the Executive's termination of employment without
Good Reason, the Executive shall receive any unpaid Basic Salary
through the date of termination, any earned but unpaid bonus for any
fiscal year completed prior to the effective date of the Executive's
termination, any unreimbursed business expenses in accordance with the
Employer's policies, and accrued but unusued vacation payable in
accordance with the Employer's policies (collectively, the "Accrued
Amounts"); and the Executive shall continue to be entitled to all other
then accrued benefits to which the Executive may be entitled under the
terms of any applicable plan, program, policy or arrangement (as
modified herein), payable as and when provided under the express terms
of such plan, program, policy or arrangement (collectively, the
"Accrued Benefits"). Under such circumstances, such payment and such
rights to accrued benefits shall be in full and complete discharge of
any and all liabilities or obligations of the Employer to the Executive
hereunder, and the Executive shall be entitled to no further benefits
under this Agreement (other than the Executive's right to
indemnification and directors and officers liability insurance as
provided herein).
5.
(ii) If the Executive gives notice pursuant to
Section 8(a)(i) above, the Employer shall have the right to relieve the
Executive, in whole or in part, of his duties under this Agreement
(without reduction in compensation and benefits through the termination
date).
(b) TERMINATION BY EXECUTIVE FOR GOOD REASON.
(i) The Employment Term shall immediately
terminate upon written notice by the Executive to the Employer of a
termination for Good Reason. Good Reason shall mean, without the
express written consent of the Executive, the occurrence of any of the
following events unless such events are fully corrected in all material
respects by the Employer within thirty (30) days following the
Employer's receipt of written notification by the Executive that he
intends to terminate his employment hereunder for one of the reasons
set forth below:
(A) any reduction or diminution (except
temporarily during any period of illness or
incapacity) in the Executive's then titles or
positions, or a material reduction or diminution in
the Executive's then authorities, duties or
responsibilities or reporting requirements with the
Employer, including, but not limited to, a failure by
June 30, 2004 to either elect the Executive to the
Board of Directors or to recommend to the
stockholders of the Employer in the annual meeting
proxy statement that the Executive be elected to the
Board of Directors, or following such election,
failure to reelect such Executive to the Board of
Directors whenever, during the term of this
Agreement, his term of office as a director expires,
or the assignment to the Executive of duties or
responsibilities that are materially adversely
inconsistent with his then position;
(B) a material breach by the Employer of any
provisions of this Agreement, including, but not
limited to, any reduction in any part of the
Executive's then compensation (including Basic
Salary) or benefits or any failure to timely pay any
part of Executive's compensation or to provide the
benefits contemplated herein;
(C) a relocation of the Employer's current
executive offices to a location more than fifty (50)
miles from its current location, but only if such
relocation occurs following a Change in Control (as
hereinafter defined); or
(D) the failure of the Employer to obtain
and deliver to the Executive a satisfactory written
agreement from any successor to the Employer to
assume and agree to perform this Agreement.
(ii) If the Executive's employment is terminated
by the Executive for Good Reason, the Employer shall:
6.
(A) provide the Executive with the following
payments promptly after, but in no event later than
thirty (30) days after, the termination date: (i) 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 Basic Salary then in effect and
(b) the Target Bonus;
(B) provide the Executive with a pro-rata
bonus for the applicable bonus period in which the
termination occurs equal to the product of (x) the
actual bonus that would otherwise have been payable
to the Executive for the applicable bonus period had
employment continued through the end of such period
multiplied by (y) a fraction, the numerator of which
is the number of days of the applicable bonus period
during which the Executive was employed by the
Employer, and the denominator of which is the number
of days in the applicable bonus period, payable when
bonuses are generally paid to senior executive
officers of the Employer for such bonus period (it
being understood that if the Executive has bonus
periods different from other senior executives, the
applicable bonus period will be determined based on
the Executive's bonus period);
(C) provide continued health benefits for
the Executive and his dependents for two (2) years
following termination at the same level in effect
immediately prior to the Executive's termination;
(D) provide the Executive with the
Accelerated Vesting; and
(E) provide the Executive with executive
outplacement assistance for one (1) year after such
termination.
Notwithstanding such termination of employment, the Executive's
covenants set forth in Section 10 and Section 11, and the Employer's
obligation set forth in Sections 15 and 16, are intended to and shall
remain in full force and effect.
(c) TERMINATION BY EMPLOYER FOR GOOD CAUSE.
(i) The Employer may terminate the employment of
the Executive hereunder for Good Cause (as defined below), upon written
notice, and only by action taken by at least two-thirds of the Board of
Directors at a duly called and properly held Board meeting, which was
called for the purpose of considering such termination and which the
Executive and his representative had the right to attend and address
the Board, and the Board, in good faith, has determined that the
Executive engaged in conduct constituting Good Cause; provided,
however, that no breach or default by the Executive shall be deemed to
occur hereunder unless the Executive shall have failed to cure the
breach or default within thirty
7.
(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 mean:
(A) the Executive's conviction in any
criminal proceeding (or the Executive entering into a
plea bargain admitting criminal guilt) of a felony or
any violation of federal or state securities laws
which has a material adverse effect on the Employer,
but specifically shall not include traffic offenses;
(B) the Executive's willful and continued
failure to use good faith efforts to follow the legal
directions of the Employer's Board of Directors which
the Board of Directors has communicated to him in
writing, provided that minutes of a Board of
Directors meeting attended in its entirety by the
Executive shall be deemed communicated to the
Executive, provided such written minutes have been
promptly provided to the Executive;
(C) the Executive's willful and continued
failure to use good faith efforts to perform his
duties under this Agreement after a written demand
for substantial performance is delivered to the
Executive by the Board of Directors, which
specifically identifies the manner in which it is
believed that the Executive has substantially and
continually failed to attempt to perform his duties
hereunder; or
(D) drug or alcohol abuse, but only to the
extent that such abuse has an obvious and material
adverse effect on the Employer's reputation and/or
the performance of the Executive's duties and
responsibilities under this Agreement.
For the purposes of this Section 8(c)(ii), no act or failure to act
shall be considered "willful" unless it is done, or omitted to be done,
in bad faith without reasonable belief that the action or omission was
in the best interest of the Employer.
Termination of the employment of the Executive by the Employer for
reasons other than those expressly specified in this Agreement as Good
Cause, or failure of the Employer to follow the termination procedures
specified herein, shall be deemed to be a termination of employment
without Good Cause.
(iii) Upon the Executive's termination of
employment by the Employer for Good Cause, the Executive shall only be
entitled to the Accrued Amounts, which shall be payable promptly after,
but in no event later than thirty (30) days after, such termination,
and the Accrued Benefits. Under such circumstances, such payment shall
be in full and complete discharge of any and all liabilities or
obligations of the Employer to the Executive hereunder,
8.
and the Executive shall be entitled to no further benefits under this
Agreement (other than the Executive's right to indemnification and
directors and officers liability insurance as provided herein).
(d) TERMINATION BY EMPLOYER WITHOUT GOOD CAUSE.
(i) The Employer may terminate the Executive's
employment without Good Cause upon written notice to the Executive. If
the Employer shall terminate the employment of the Executive without
Good Cause, the Executive shall receive the payments and benefits
payable pursuant to Section 8(b)(ii) hereof. Notwithstanding such
termination of employment, the Executive's covenants set forth in
Section 10 and Section 11, and the Executive's rights under Sections 15
and 16 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 Executive or the
Employer as a result of a termination by the Employer of the
Executive's employment without Good Cause or a termination by the
Executive for Good Reason, as applicable, the payments and benefits
paid and provided pursuant to this Section 8(d) and Section 8(b) shall
be deemed to constitute liquidated damages and not a penalty for the
Employer's termination of the Executive's employment without Good Cause
or the Executive's termination for Good Reason.
(e) RIGHTS UPON CHANGE IN CONTROL.
(i) If a Change in Control of the Employer, as
defined in Section 8(e)(ii) shall occur and the Executive shall:
(A) terminate his employment for Good Reason
within eighteen (18) months following such Change in
Control;
(B) have his employment terminated by the
Employer for reasons other than those specified in
Section 8(c)(ii) within eighteen (18) months
following such Change in Control; or
(C) have had his employment terminated by
the Employer without Good Cause or terminated his
employment for Good Reason "in contemplation of" a
Change in Control (a termination shall be deemed to
be "in contemplation of" a Change in Control if the
Executive's employment is terminated after initial
discussions of a transaction that could result in a
Change in Control having taken place or it is
reasonably demonstrated by the Executive that such
termination was at the request of a third party who
has taken steps reasonably calculated to enter into
or effect the Change in Control
9.
or the Executive's termination otherwise arose in
connection with or in anticipation of the Change in
Control);
then in any of the above three (3) cases, the Executive 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
payments and benefits provided in Section 8(b)(ii) provided
that the two (2) times multiple shall be three (3) and the
medical coverage provided therein shall continue for three (3)
years.
(ii) For purposes of this Agreement, a "Change in
Control" shall mean:
(A) any "person" as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934 ("Act") (other than the Employer, any
trustee or other fiduciary holding securities under
any employee benefit plan of the Employer, or any
company owned, directly or indirectly, by the
shareholders of the Employer in substantially the
same proportions as their ownership of common stock
of the Employer), is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Act),
directly or indirectly, of securities of the Employer
representing fifty percent (50%) or more of the
combined voting power of the Employer's then
outstanding securities;
(B) during any period of two (2) consecutive
years, individuals who at the beginning of such
period constitute the Board of Directors, and any new
director (other than a director designated by a
person who has entered into an agreement with the
Employer to effect a transaction described in clause
(A), (C), or (D) of this paragraph) whose election by
the Board or nomination for election by the
Employer's stockholders was approved by a vote of at
least two-thirds of the directors then still in
office who either were directors at the beginning of
the two-year period or whose election or nomination
for election was previously so approved, cease for
any reason to constitute at least a majority of the
Board;
(C) a merger or consolidation of the
Employer with any other corporation, other than a
merger or consolidation which would result in the
voting securities of the Employer outstanding
immediately prior thereto continuing to represent
(either by remaining outstanding or by being
converted into voting securities of the surviving
entity) more than fifty percent (50%) of the combined
voting power of the voting securities of the Employer
or such surviving entity outstanding immediately
after such merger or consolidation; or
10.
(D) the shareholders of the Employer approve
a plan of complete liquidation of the Employer or the
consummation of the sale or disposition by the
Employer of all or substantially all of the
Employer's assets other than the sale or disposition
of all or substantially all of the assets of the
Employer to a person or persons who beneficially own,
directly or indirectly, at least fifty percent (50%)
or more of the combined voting power of the
outstanding voting securities of the Employer at the
time of the sale.
(f) NO MITIGATION/SETOFF. The Executive shall not be
required to mitigate the amount of any payment or benefit contemplated
by Section 8, nor shall any such payment or benefit described under
those sections be reduced by any earnings or benefits that Executive
may receive from any other source. The Employer's obligation to pay the
Executive the amounts and benefits provided hereunder shall not be
subject to set-off, counterclaim or recoupment of amounts owed by the
Executive to the Employer or its affiliates, except for any specific,
stated amounts owed by the Executive to the Employer.
(g) RELEASE. Payment of any compensation (other than
Accrued Amounts and/or the Accrued Benefits) to the Executive under
this Section 8 following termination of employment shall be conditioned
upon the prior receipt by the Employer of a release executed by the
Executive in the form attached to this Agreement as Exhibit A.
9. DISCLOSURE. The Executive 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 to the business of the Employer, which are or have been acquired
by the Executive during his employment by the Employer (including during his
employment by the Employer preceding the Commencement Date under this
Agreement). 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 Executive agrees to keep in strict
secrecy and confidence any and all information the Executive assimilates or to
which he has access, and knowledge of, during his employment by the Employer and
which is not public knowledge or not a matter of common knowledge in the fields
of work of the Employer. Subject to the next sentence, the Executive 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. Nothing herein shall prevent the
Executive from disclosing information that is compelled pursuant to the order of
a court or other governmental or legal body having jurisdiction over such matter
or from disclosing information in connection with the performance of his duties
under this Agreement as he deems in good faith to be necessary or desirable,
provided however that promptly after receipt of such order the Executive shall
provide the Employer with a copy of such order to enable the Employer, at its
sole expense, to seek a
11.
protective or similar order and the Executive will provide the Employer with
such cooperation in seeking such protective order as may be reasonably requested
by the Employer.
11. NONCOMPETITION AND NONSOLICITATION. The Executive 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 Executive by the Employer as a result of the
Executive's employment, as outlined in the previous sentence, the Executive
hereby agrees as follows:
(a) During the term of the Executive'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 his employment
with the Employer, regardless of the reason for such termination, the
Executive shall not, directly or indirectly, enter into, engage in, be
employed by or consult with any specialty retail business which
competes with the business of the Employer by selling, offering to
sell, or soliciting offers to buy on behalf of any specialty retail
business, or by consulting with any specialty retail business,
concerning the selling of, any women's apparel or intimates product
substantially similar to those sold or planned to be sold by the
Employer. The Executive 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); (ii) other outside business investments
that do not in any manner conflict with the services to be rendered by
the Executive for the Employer and that do not diminish or detract from
the Executive's ability to render his required attention to the
business of the Employer; or (iii) the Executive's employment by (or
association with) any entity so long as the Executive is not employed
directly by the women's apparel or intimate products specialty store
divisions thereof and no more than five percent (5%) of the revenue of
such entity under the Executive's supervision is generated from women's
apparel or intimate products specialty stores.
(b) 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 Executive 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 non-clerical employee
of the Employer who was such an employee as of the date of the
Executive's termination of employment to
12.
terminate his or her employment. Nothing herein shall prevent the
Executive from serving as a reference for any employee of the Employer
or from the general advertising for employees.
(c) The period of time during which the Executive 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 Executive is in breach of such covenants, as such breach and
time period is determined by a court of law or arbitrator, provided
that such court or arbitrator deems an extension appropriate.
(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 Executive to comply with such covenants, the
Employer would not have agreed to enter into this Agreement. Such
covenants by the Executive shall be construed as agreements independent
of any other provision in this Agreement. The existence of any claim or
cause of action of the Executive 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 Executive 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 Executive 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
Executive. The Employer and the Executive 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 Executive agrees that damages at law
will be an insufficient remedy to the Employer if the Executive 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. An arbitrator or court may award the
prevailing party in any litigation or arbitration with regard to enforcement of
the terms of Sections 9, 10 or 11 of this Agreement, its reasonable fees and
disbursements of counsel (including before trial, at trial and in appellate
proceedings) if an arbitrator or court determines it appropriate.
13. EXCISE TAXES. In the event that the Executive becomes entitled
to payments and/or benefits which would constitute "parachute payments" within
the meaning of Section 280G(b)(2) of the Internal Revenue Code of 1986, as
amended, the provisions of Exhibit B shall apply.
13.
14. LEGAL FEES. The Employer shall pay the Executive's reasonable
legal fees incurred in connection with the negotiation and drafting of this
Agreement. To the extent any such payments result in taxable income to the
Executive, the Employer shall provide the Executive with an amount equal to any
income and other taxes such that the Executive shall not incur any tax costs
with respect to such payments or benefits.
15. INDEMNIFICATION. In addition to any other rights of
indemnification of the Executive, the Employer hereby covenants and agrees to
promptly indemnify the Executive (or, in the event of his death, his heirs,
executors, administrators or legal representatives) and hold him harmless to the
fullest extent permitted by law against and in respect to any and all actions,
suits, proceedings, claims, demands, judgments, costs, expenses (including
attorneys' fees), penalties, fines, settlements, losses, and damages resulting
from, or in connection with, the Executive's employment with, and serving as a
director of, the Employer, including, but not limited to, as an officer and
director of any subsidiary or as a fiduciary of any employee benefit plan. Such
indemnification and any advancement of expenses shall be provided in accordance
with and be subject to the terms and conditions of the Executive's
Indemnification Agreement dated June 28, 1995 (the "Indemnification Agreement").
16. LIABILITY INSURANCE. The Employer shall cover the Executive
under directors and officers liability insurance both during and, while
potential liability exists (but no less than six years), after the term of this
Agreement in the same amount and to the same extent, if any, as the Employer
covers its other officers and directors.
17. WITHHOLDING. All amounts or benefits payable hereunder shall
be subject to applicable tax withholding (including without limitation any
applicable excise tax), and the withholding of any such amounts shall be treated
as payment thereof to the Executive for purposes of determining whether all
amounts required hereunder to be paid have been paid. Withholding of tax from
any non-cash amounts or benefits that are subject to withholding may be made
from cash amounts otherwise payable to the Executive.
18. ARBITRATION. All disputes and controversies arising under or
in connection with this Agreement, other than the seeking of injunctive or other
equitable relief pursuant to Section 11 hereof, shall be settled by arbitration
conducted before one (1) arbitrator sitting in the city in which Executive's
principal office space is located at the time of the dispute or such other
location agreed by the parties hereto, in accordance with the National Rules for
the Resolution of Employment Disputes of the American Arbitration Association
then in effect. The arbitration shall take place before a single arbitrator, who
will preferably but not necessarily be a lawyer but who shall have at least five
years' experience in working in or with retail companies. The determination of
the arbitrator shall be final and binding on the parties. Judgment may be
entered on the award of the arbitrator in any court having proper jurisdiction.
The American Arbitration Association fees associated with any such arbitration
proceedings (including the fees of the arbitrator) shall be borne solely by the
Employer. In the event the Executive substantially prevails on the majority of
any material claims brought in such arbitration proceedings, the arbitration
panel shall require the Employer to reimburse the Executive
14.
for all reasonable legal fees and expenses incurred during the course of such
arbitration. In the event that the Executive does not so prevail, the
arbitration panel shall have the authority to require the Executive to reimburse
the Employer for one-half of the arbitration fees (excluding legal fees and
expenses incurred by the Employer).
19. COMPLIANCE WITH OTHER AGREEMENTS. The Executive 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 Executive is a party or by which the Executive is or may be bound.
20. WAIVER OF BREACH. The waiver by either party of a breach by
the other party of any provision or condition of this Agreement, or any
condition or provision provided in this Agreement to be performed by such other
party, shall not be construed as a waiver of a similar or dissimilar breach,
condition or provision at the same or any prior or subsequent time.
21. 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 permitted assigns of the Employer, and the rights of the
Executive shall inure to the benefit of his personal or legal representatives,
executors, administrators, successors, heirs, distributes, devisees, legatees
and permitted assigns. 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, but shall apply only with
regard to the Employer's business. This Agreement is a personal employment
contract and the rights, obligations and interests of the Executive hereunder
may not be sold, assigned, transferred, pledged or hypothecated. The Employer
shall require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of the Employer to expressly assume and agree, in writing, to perform
this Agreement in the same manner and to the same extent that the Employer would
be required to perform it if no such succession had taken place, and may not
assign this Agreement or its rights hereunder other than to a successor to all
or substantially all of its business.
22. ENTIRE AGREEMENT. This Agreement (together with the
Indemnification 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.
23. HEADINGS. The headings contained in this Agreement are for
reference purposes only and shall not affect the meaning or interpretation of
this Agreement.
24. GOVERNING LAW. This Agreement shall be construed and enforced
in accordance with the laws of the State of Florida.
15.
25. 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 (1) working day after it
is sent, if sent by recognized expedited delivery service; and five (5) 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:
To the Employer: Chico's FAS, Inc.
00000 Xxxxx Xxxxxxx
Xx. Xxxxx, Xxxxxxx 00000
With a copy to: Xxxx X. Xxxxxx, Esquire
Trenam, Kemker, Scharf,
Barkin, Frye, X'Xxxxx & Xxxxxx, P.A.
Xxxx Xxxxxx Xxx 0000
Xxxxx, Xxxxxxx 00000
To the Executive at his address on file with the Employer.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
CHICO'S FAS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------
Xxxxxxx X. Xxxxxx
Chief Operating Officer
EMPLOYEE:
/s/ Xxxxx X. Xxxxxxx
-------------------------------------
XXXXX X. XXXXXXX
16.
EXHIBIT A
TO
EMPLOYMENT AGREEMENT WITH XXXXX X. XXXXXXX
DATED AS OF SEPTEMBER 3, 2003
RELEASE
WHEREAS, Xxxxx X. Xxxxxxx (the "Executive") is an employee of Chico's
FAS, Inc., (the "Company") and is a party to the Employment Agreement dated as
of September 3, 2003 (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 (other than to receive amounts earned and
accrued prior to such termination).
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 [NOTE: specify the
payments and benefits] (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 their respective 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 attorneys' 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 up to the
date the Executive signs this Agreement ("Claims"), against the Released Party,
including but not limited to:
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(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,
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.
Notwithstanding the foregoing, nothing herein shall be considered as releasing
the Released Party from: (i) 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; (ii) any
rights that the Executive may have to indemnification and directors and officers
liability insurance coverage; and (iii) the Executive's right to enforce the
terms of the Agreement.
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 solely releases
Claims up to and including the date of execution 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
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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 Claims that are released in this
Release.
6. The Executive waives and releases any Claims 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
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EXHIBIT B
(a) In the event it shall be determined that the Executive shall
become entitled to payments and/or benefits provided by this Agreement or any
other amounts in the "nature of compensation" (whether pursuant to the terms of
this Agreement or any other plan, arrangement or agreement with the Company or
any affiliate, any person whose actions result in a change of ownership or
effective control of the Company covered by Section 280G(b)(2) of the Internal
Revenue Code of 1986, as amended (the "Code") or any person affiliated with the
Employer or such person) as a result of such change in ownership or effective
control of the Employer (a "Payment") which would be subject to the excise tax
imposed by Section 4999 of the Code or any interest or penalties are incurred by
the Executive with respect to such excise tax (such excise tax, together with
any such interest and penalties, are hereinafter collectively referred to as the
"Excise Tax"), then the Executive shall be entitled to receive an additional
payment (a "Gross-Up Payment") in an amount such that after payment by the
Executive of all taxes (including any interest or penalties imposed with respect
to such taxes), including, without limitation, any income taxes (and any
interest and penalties imposed with respect thereto) and Excise Tax imposed upon
the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Payment.
(b) Subject to the provisions of paragraph (c), all determinations
required to be made under this Exhibit B, including whether and when a Gross-Up
Payment is required and the amount of such Gross-Up Payment and the assumptions
to be utilized in arriving at such determination, shall be made by a nationally
recognized accounting firm, law firm or compensation consulting firm with
substantial expertise in executive compensation taxation (the "Advising Firm")
which shall provide detailed supporting calculations both to the Employer and
the Executive within fifteen (15) business days of the receipt of notice from
the Executive that there has been a Payment, or such earlier time as is
requested by the Employer. The Advising Firm shall be jointly selected by the
Employer and the Executive. If the Employer and the Executive cannot agree on
the firm to serve as the Advising Firm, then the Employer and the Executive
shall each select a nationally recognized accounting firm, law firm or
compensation consulting firm and those two (2) firms shall jointly select a
nationally recognized accounting firm, law firm or compensation consulting firm
to serve as the Advising Firm. All fees and expenses of the Advising Firm(s)
shall be borne solely by the Employer. Any Gross-Up Payment, as determined
pursuant to this Exhibit B, shall be paid by the Employer to the Executive
within thirty days of the receipt of the Advising Firm's determination. If the
Advising Firm determines that no Excise Tax is payable by the Executive, it
shall furnish the Executive with a written opinion to that effect on a
substantial authority level. Any determination by the Advising Firm shall be
binding upon the Employer and the Executive, subject to the provisions of this
Exhibit. As a result of the uncertainty in the application of Section 4999 of
the Code at the time of the initial determination by the Advising Firm
hereunder, it is possible that Gross-Up Payments which will not have been made
by the Employer should have been made ("Underpayment"), consistent with the
calculations required to be made hereunder. In the event that the Employer
exhausts its remedies pursuant to paragraph
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(c) hereof and the Executive thereafter is required to make a payment of any
Excise Tax, the Advising Firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment shall be promptly paid by the
Employer to or for the benefit of the Executive.
(c) The Executive shall notify the Employer in writing of any
claim by the Internal Revenue Service that, if successful, would require the
payment by the Employer of a Gross-Up Payment. Such notification shall be given
as soon as practicable but no later than ten business days after the Executive
is informed in writing of such claim and shall apprise the Employer of the
nature of such claim and the date on which such claim is requested to be paid.
The Executive shall not pay such claim prior to the expiration of the thirty
(30) day period following the date on which he or she gives such notice to the
Employer (or such shorter period ending on the date that any payment of taxes
with respect to such claim is due). If the Employer notifies the Executive in
writing prior to the expiration of such period that it desires to contest such
claim, the Executive shall:
(i) give the Employer any information reasonably
requested by the Employer relating to such claim,
(ii) take such action in connection with contesting such
claim as the Employer shall reasonably request in writing from time to
time, including, without limitation, accepting legal representation
with respect to such claim by an attorney reasonably selected by the
Employer,
(iii) cooperate with the Employer in good faith in order
effectively to contest such claim, and
(iv) permit the Employer to participate in any proceedings
relating to such claim; provided, however, that the Employer shall bear
and pay directly all costs and expenses (including additional interest
and penalties) incurred in connection with such contest and shall
indemnify and hold the Executive harmless, on an after-tax basis, for
any Excise Tax or income tax (including interest and penalties with
respect thereto) imposed on the Payment. Without limitation on the
foregoing provisions of this paragraph (c), the Employer shall control
all proceedings taken in connection with such contest and, at its sole
option, may pursue or forego any and all administrative appeals,
proceedings, hearings and conferences with the taxing authority in
respect of such claim and may, at its sole option, either direct the
Executive to pay the tax claimed and xxx for a refund or contest the
claim in any permissible manner, and the Executive agrees to prosecute
such contest to a determination before any administrative tribunal, in
a court of initial jurisdiction and in one or more appellate courts, as
the Employer shall determine; provided, however, that if the Employer
directs the Executive to pay such claim and xxx for a refund, the
Employer shall advance the amount of such payment to the Executive, on
an interest-free basis and shall indemnify and hold the Executive
harmless, on an after-tax
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basis, from any Excise Tax or income tax (including interest or
penalties with respect thereto) imposed with respect to such advance or
with respect to any imputed income with respect to such advance; and
further provided the Executive shall not be required by the Employer to
agree to any extension of the statute of limitations relating to the
payment of taxes for the taxable year of the Executive with respect to
which such contested amount is claimed to be due unless such extension
is limited solely to such contested amount. To the extent the foregoing
provision shall be deemed to create a loan of a personal nature in
violation of Section 402 of the Xxxxxxxx-Xxxxx Act of 2002, the
provision for repayment shall be null and void. Furthermore, the
Employer's control of the contest shall be limited to issues with
respect to which a Gross-Up Payment would be payable hereunder and the
Executive shall be entitled to settle or contest, as the case may be,
any other issue raised by the Internal Revenue Service or any other
taxing authority.
(d) If, after the receipt by the Executive of an amount advanced
by the Employer pursuant to paragraph (c) hereof, the Executive becomes entitled
to receive any refund with respect to such claim, the Executive shall (subject
to the Employer's complying with the requirements of paragraph (c) hereof)
promptly pay to the Employer the amount of such refund (together with any
interest paid or credited thereon after taxes applicable thereto). To the extent
the foregoing provision shall be deemed to create a loan of a personal nature in
violation of Section 402 of the Xxxxxxxx-Xxxxx Act of 2002, the provision for
repayment shall be null and void. If, after the receipt by the Executive of an
amount advanced by the Employer pursuant to paragraph (c) hereof, a
determination is made that the Executive shall not be entitled to any refund
with respect to such claim and the Employer does not notify the Executive in
writing of its intent to contest such denial of refund prior to the expiration
of thirty (30) days after such determination, then such advance shall be
forgiven and shall not be required to be repaid and the amount of such advance
shall offset, to the extent thereof, the amount of Gross-Up Payment required to
be paid.
(e) If, pursuant to regulations issued under Section 280G or 4999
of the Code, the Employer and the Executive were required to make a preliminary
determination of the amount of an excess parachute payment and thereafter a
redetermination of the Excise Tax is required under the applicable regulations,
the parties shall request the Advising Firm to make such redetermination. If as
a result of such redetermination an additional Gross-Up Payment is required, the
amount thereof shall be paid by the Employer to the Executive within thirty days
of the receipt of the Advising Firm's determination. If the redetermination of
the Excise Tax results in a reduction of the Excise Tax, the Executive shall
take such steps as the Employer may reasonably direct in order to obtain a
refund of the excess Excise Tax paid. If the Employer determines that any suit
or proceeding is necessary or advisable in order to obtain such refund, the
provisions of paragraph (c) hereof relating to the contesting of a claim shall
apply to the claim for such refund, including, without limitation, the
provisions concerning legal representation, cooperation by the Executive,
participation by the Employer in the proceedings and indemnification by the
Employer. Upon receipt of any such refund, the Executive shall promptly
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pay the amount of such refund to the Employer. If the amount of the income taxes
otherwise payable by the Executive in respect of the year in which the Executive
makes such payment to the Employer is reduced as a result of such payment, the
Executive shall, no later than the filing of his income tax return in respect of
such year, pay the amount of such tax benefit to the Employer. In the event
there is a subsequent redetermination of the Executive's income taxes resulting
in a reduction of such tax benefit, the Employer shall, promptly after receipt
of notice of such reduction, pay to the Executive the amount of such reduction.
If the Employer objects to the calculation or recalculation of the tax benefit,
as described in the preceding two sentences, the Advising Firm shall make the
final determination of the appropriate amount. The Executive shall not be
obligated to pay to the Employer the amount of any further tax benefits that may
be realized by him or her as a result of paying to the Employer the amount of
the initial tax benefit. To the extent the foregoing provisions shall be deemed
to create a loan of a personal nature in violation of Section 402 of the
Xxxxxxxx-Xxxxx Act of 2002, the provision for repayment shall be null and void.
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