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EXHIBIT 10.3
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (this "Agreement") is made and entered
into this 5th day of July, 2001, by and between ▇▇▇▇ ▇. ▇▇▇▇▇▇ (the "Indemnified
Party") and CHICO'S FAS, INC., a Florida corporation (the "Corporation").
W I T N E S S E T H:
WHEREAS, it is essential to the Corporation to retain and attract as
Directors and/or Executive Officers the most capable persons available; and
WHEREAS, the substantial increase in corporate litigation subjects
directors and officers to expensive litigation risks at the same time that the
availability of directors' and officers' liability insurance has been severely
limited; and
WHEREAS, in addition, the statutory indemnification provisions of the
Florida Business Corporation Act and Article VII of the bylaws of the
Corporation (the "Article") expressly provide that they are non-exclusive; and
WHEREAS, the Indemnified Party does not regard the protection available
under the Article and insurance, if any, as adequate in the present
circumstances, and considers it necessary and desirable to his service as a
Director and/or Executive Officer to have adequate protection, and the
Corporation desires the Indemnified Party to serve in such capacity and have
such protection; and
WHEREAS, the Florida Business Corporation Act and the Article provide
that indemnification of Directors and Executive Officers of the Corporation may
be authorized by agreement, and thereby contemplates that contracts of this
nature may be entered into between the Corporation and the Indemnified Party
with respect to indemnification of the Indemnified Party as a Director and/or
Executive Officer of the Corporation.
NOW THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained in this Agreement, it is hereby agreed as follows:
1. INDEMNIFICATION GENERALLY.
(a) Grant of Indemnity. (i) Subject to and upon the terms and
conditions of this Agreement, the Corporation shall indemnify and hold harmless
the Indemnified Party in respect of any and all costs, claims, losses, damages
and expenses which may be incurred or suffered by the Indemnified Party as a
result of or arising out of prosecuting, defending, settling or investigating:
(1) any threatened, pending, or completed claim,
demand, inquiry, investigation, action, suit or proceeding,
whether formal or informal or brought by or in the right of the
Corporation or otherwise and whether of a civil, criminal,
administrative or investigative nature, in which the Indemnified
Party may be or may have been involved as a party or otherwise,
arising out of the fact that the Indemnified Party is or was a
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director, officer, employee, independent contractor or
stockholder of the Corporation or any of its "Affiliates" (as
such term is defined in the rules and regulations promulgated by
the Securities and Exchange Commission under the Securities Act
of 1933), or served as a director, officer, employee, independent
contractor or stockholder in or for any person, firm,
partnership, corporation or other entity at the request of the
Corporation (including without limitation service in any capacity
for or in connection with any employee benefit plan maintained by
the Corporation or on behalf of the Corporation's employees);
(2) any attempt (regardless of its success) by any
person to charge or cause the Indemnified Party to be charged
with wrongdoing or with financial responsibility for damages
arising out of or incurred in connection with the matters
indemnified against in this Agreement; or
(3) any expense, interest, assessment, fine, tax,
judgment or settlement payment arising out of or incident to any
of the matters indemnified against in this Agreement including
reasonable fees and disbursements of legal counsel, experts,
accountants, consultants and investigators (before and at trial
and in appellate proceedings).
(ii) The obligation of the Corporation under this
Agreement is not conditioned in any way on any attempt by the Indemnified Party
to collect from an insurer any amount under a liability insurance policy.
(iii) In no case shall any indemnification be provided
under this Agreement to the Indemnified Party by the Corporation in:
(1) Any action or proceeding brought by or
in the name or interest of the
Indemnified Party against the
Corporation; or
(2) Any action or proceeding brought by the
Corporation against the Indemnified
Party, which action is initiated at the
direction of the Board of Directors of
the Corporation.
(b) Claims for Indemnification. (i) Whenever any claims shall
arise for indemnification under this Agreement, the Indemnified Party shall
notify the Corporation promptly and in any event within 30 days after the
Indemnified Party has actual knowledge of the facts constituting the basis for
such claim. The notice shall specify all facts known to the Indemnified Party
giving rise to such indemnification right and the amount or an estimate of the
amount of liability (including estimated expenses) arising therefrom.
(ii) Any indemnification under this Agreement shall be
made no later than 30 days after receipt by the Corporation of the written
notification specified in Section 1(b)(i), unless
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a determination is made within such 30 day period by (X) the Board of Directors
by a majority vote of a quorum consisting of directors who were not parties to
the matter described in the notice or (Y) independent legal counsel, agreed to
by the Corporation, in a written opinion (which counsel shall be appointed if
such a quorum is not obtainable), that the Indemnified Party has not met the
relevant standards for indemnification under this Agreement.
(c) Rights to Defend or Settle; Third Party Claims, etc. (i) If
the facts giving rise to any indemnification right under this Agreement shall
involve any actual or threatened claim or demand against the Indemnified Party,
or any possible claim by the Indemnified Party against any third party, such
claim shall be referred to as a "Third Party Claim." If the Corporation provides
the Indemnified Party with an agreement in writing in form and substance
satisfactory to the Indemnified Party and his counsel, agreeing to indemnify,
defend or prosecute and hold the Indemnified Party harmless from all costs and
liability arising from any Third Party Claim (an "Agreement of Indemnity"), and
demonstrating to the satisfaction of the Indemnified Party the financial
wherewithal to accomplish such indemnification, the Corporation may at its own
expense undertake full responsibility for the defense or prosecution of such
Third Party Claim. The Corporation may contest or settle any such Third Party
Claim for money damages on such terms and conditions as it deems appropriate but
shall be obligated to consult in good faith with the Indemnified Party and not
to contest or settle any Third Party Claim involving injunctive or equitable
relief against or affecting the Indemnified Party or his properties or assets
without the prior written consent of the Indemnified Party, such consent not to
be withheld unreasonably. The Indemnified Party may participate at his own
expense and with his own counsel in defense or prosecution of a Third Party
Claim pursuant to this Section 1(c)(i), and such participation shall not relieve
the Corporation of its obligation to indemnify the Indemnified Party under this
Agreement.
(ii) If the Corporation fails to deliver a satisfactory
Agreement of Indemnity and evidence of financial wherewithal within 10 days
after receipt of notice pursuant to Section 1(b), the Indemnified Party may
contest or settle the Third Party Claim on such terms as it sees fit but shall
not reach a settlement with respect to the payment of money damages without
consulting in good faith with the Corporation. The Corporation may participate
at its own expense and with its own counsel in defense or prosecution of a Third
Party Claim pursuant to this Section 1(c)(ii), but any such participation shall
not relieve the Corporation of its obligations to indemnify the Indemnified
Party under this Agreement. All expenses (including attorneys' fees) incurred in
defending or prosecuting any Third Party Claim shall be paid promptly by the
Corporation as the suit or other matter is proceeding, upon the submission of
bills therefor or other satisfactory evidence of such expenditures during the
pendency of any matter as to which indemnification is available under this
Agreement. The failure to make such payments within 10 days after submission of
evidence of those expenses shall constitute a breach of a material obligation of
the Corporation under this Agreement.
(iii) If by reason of any Third Party Claim a lien,
attachment, garnishment or execution is placed upon any of the property or
assets of the Indemnified Party, the Corporation shall promptly furnish a
satisfactory indemnity bond to obtain the prompt release of such lien,
attachment, garnishment or execution.
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(iv) The Indemnified Party shall cooperate in the
defense of any Third Party Claim which is controlled by the Corporation, but the
Indemnified Party shall continue to be entitled to indemnification and
reimbursement for all costs and expenses incurred by him in connection therewith
as provided in this Agreement.
(d) Cooperation. The parties to this Agreement shall execute such
powers of attorney as may be necessary or appropriate to permit participation of
counsel selected by any party hereto and, as may be reasonably related to any
such claim or action, shall provide to the counsel, accountants and other
representatives of each party access during normal business hours to all
properties, personnel, books, records, contracts, commitments and all other
business records of such other party and will furnish to such other party copies
of all such documents as may be reasonably requested (certified, if requested).
(e) Choice of Counsel. In all matters as to which indemnification
is available to the Indemnified Party under this Agreement, the Indemnified
Party shall be free to choose and retain counsel, provided that the Indemnified
Party shall secure the prior written consent of the Corporation as to such
selection, which consent shall not be unreasonably withheld.
(f) Consultation. If the Indemnified Party desires to retain the
services of an attorney prior to the determination by the Corporation as to
whether it will undertake the defense or prosecution of the Third Party Claim as
provided in Section 1(c), the Indemnified Party shall notify the Corporation of
such desire in the notice delivered pursuant to Section 1(b)(i), and such notice
shall identify the counsel to be retained. The Corporation shall then have 10
days within which to advise the Indemnified Party whether it will assume the
defense or prosecution of the Third Party Claim in accordance with Section
1(c)(i). If the Indemnified Party does not receive an affirmative response
within such 10 day period, he shall be free to retain counsel of his choice, and
the indemnity provided in Section 1(a) shall apply to the reasonable fees and
disbursements of such counsel incurred after the expiration of such 10 day
period. Any fees or disbursements incurred prior to the expiration of such 10
day period shall not be covered by the indemnity of Section 1(a).
(g) Repayment. (i) Notwithstanding the other provisions of this
Agreement to the contrary, if the Corporation has incurred any cost, damage or
expense under this Agreement paid to or for the benefit of the Indemnified Party
and it is determined by a court of competent jurisdiction from which no appeal
may be taken that the Indemnified Party's actions or omissions constitute
"Nonindemnifiable Conduct" as that term is defined in Section 1(g)(ii), the
Indemnified Party shall and does hereby undertake in such circumstances to
reimburse the Corporation for any and all such amounts previously paid to or for
the benefit of the Indemnified Party.
(ii) For these purposes, "Nonindemnifiable Conduct"
shall mean actions or omissions of the Indemnified Party material to the cause
of action to which the indemnification under this Agreement related is
determined to involve:
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(1) a violation of the criminal law, unless the
Indemnified Party had reasonable cause to believe his conduct was
lawful and had no reasonable cause to believe his conduct was
unlawful;
(2) a transaction in which the Indemnified Party
derived an improper personal benefit;
(3) if the Indemnified Party is a director of the
Corporation, a circumstance under which the liability provisions
of Section 607.0834 (or any successor or similar statute) are
applicable;
(4) willful misconduct or a conscious disregard for
the best interests of the Corporation (when indemnification is
sought in a proceeding by or in the right of the Corporation to
procure a judgment in favor of the Corporation or when
indemnification is sought in a proceeding by or in the right of a
stockholder); or
(5) conduct pursuant to then applicable law that
prohibits such indemnification.
2. TERM.
This Agreement shall be effective upon its execution by all
parties and shall continue in full force and effect until the date seven years
after the date of this Agreement, or seven years after the termination of the
Indemnified Party's employment or term of office, whichever is later, provided
that such term shall be extended by any period of time during which the
Corporation is in breach of a material obligation to the Indemnified Party, plus
ninety days. Such term shall also be extended with respect to each Third Party
Claim then pending and as to which notice under Section 1(b) has theretofore
been given by the Indemnified Party to the Corporation, and this Agreement shall
continue to be applicable to each such Third Party Claim.
3. REPRESENTATIONS AND AGREEMENTS OF THE CORPORATION.
(a) Authority. The Corporation represents, covenants and agrees
that it has the corporate power and authority to enter into this Agreement and
to carry out its obligations under this Agreement. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated by this Agreement have been duly authorized by the Board of
Directors of the Corporation. This Agreement is a valid and binding obligation
of the Corporation and is enforceable against the Corporation in accordance with
its terms.
(b) Noncontestability. The Corporation represents, covenants and
agrees that it will not initiate, and that it will use its best efforts to cause
any of its Affiliates not to initiate, any action, suit or proceeding
challenging the validity or enforceability of this Agreement.
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(c) Good Faith Judgment. The Corporation represents, covenants
and agrees that it will exercise good faith judgment in determining the
entitlement of the Indemnified Party to indemnification under this Agreement.
4. RELATIONSHIP OF THIS AGREEMENT TO OTHER INDEMNITIES.
(a) Nonexclusivity. (i) This Agreement and all rights granted to
the Indemnified Party under this Agreement are in addition to and are not deemed
to be exclusive with or of any other rights that may be available to the
Indemnified Party under any Articles of Incorporation, bylaw, statute,
agreement, or otherwise.
(ii) The rights, duties and obligations of the
Corporation and the Indemnified Party under this Agreement do not limit,
diminish or supersede the rights, duties and obligations of the Corporation and
the Indemnified Party with respect to the indemnification afforded to the
Indemnified Party under any liability insurance, the Florida Business
Corporation Act, or under the bylaws or the Articles of Incorporation of the
Corporation. In addition, the Indemnified Party's rights under this Agreement
will not be limited or diminished in any respect by any amendment to the bylaws
or the Articles of Incorporation of the Corporation.
(b) Availability, Contribution, Etc.. (i) The availability or
nonavailability of indemnification by way of insurance policy, Articles of
Incorporation, bylaw, vote of stockholders, or otherwise from the Corporation to
the Indemnified Party shall not affect the right of the Indemnified Party to
indemnification under this Agreement, provided that all rights under this
Agreement shall be subject to applicable statutory provisions in effect from
time to time.
(ii) Any funds received by the Indemnified Party by way
of indemnification or payment from any source other than from the Corporation
under this Agreement shall reduce any amount otherwise payable to the
Indemnified Party under this Agreement.
(iii) If the Indemnified Party is entitled under any
provision of this Agreement to indemnification by the Corporation for some
claims, issues or matters, but not as to other claims, issues or matters, or for
some or a portion of the expenses, judgments, fines or penalties actually and
reasonably incurred by him or amounts actually and reasonably paid in settlement
by him in the investigation, defense, appeal or settlement of any matter for
which indemnification is sought under this Agreement, but not for the total
amount thereof, the Corporation shall nevertheless indemnify the Indemnified
Party for the portion of such claims, issues or matters or expenses, judgments,
fines, penalties or amounts paid in settlement to which the Indemnified Party is
entitled.
(iv) If for any reason a court of competent jurisdiction
from which no appeal can be taken rules that the indemnity provided under this
Agreement is unavailable, or if for any reason the indemnity under this
Agreement is insufficient to hold the Indemnified Party harmless as provided in
this Agreement, then in either event, the Corporation shall contribute to the
amounts paid or
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payable by the Indemnified Party in such proportion as equitably reflects the
relative benefits received by, and fault of the Indemnified Party and the
Corporation and its Affiliates.
(c) Allowance for Compliance with SEC Requirements. The
Indemnified Party acknowledges that the Securities and Exchange Commission
("SEC") has expressed the opinion that indemnification of directors and officers
from liabilities under the Securities Act of 1933 (the "1933 Act") is against
public policy as expressed in the 1933 Act and, is therefore, unenforceable. The
Indemnified Party hereby agrees that it will not be a breach of this Agreement
for the Corporation to undertake with the SEC in connection with the
registration for sale of any stock or other securities of the Corporation from
time to time that, in the event a claim for indemnification against such
liabilities (other than the payment by the Corporation of expenses incurred or
paid by a director or officer of the Corporation in the successful defense of
any action, suit or proceeding) is asserted in connection with such stock or
other securities being registered, the Corporation will, unless in the opinion
of its counsel the matter has been settled by controlling precedent, submit to a
court of competent jurisdiction on the question of whether or not such
indemnification by it is against public policy as expressed in the 1933 Act and
will be governed by the final adjudication of such issue. The Indemnified Party
further agrees that such submission to a court of competent jurisdiction shall
not be a breach of this Agreement.
5. MISCELLANEOUS.
(a) Notices. All notices, requests, demands and other
communications 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, electronic
telephone line facsimile transmission or other similar electronic or digital
transmission method; the day after it is sent, if sent by recognized expedited
delivery service; and five days after it is sent, if mailed, first class mail,
postage prepaid. In each case notice shall be sent to:
If to the Indemni-
fied Party: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Suite 200
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇., ▇.▇.
▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to the
Corporation: Chico's FAS, Ins.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
or to such other address as either party may have specified in writing to the
other using the procedures specified above in this Section 5(a).
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(b) Construction and Interpretation. (i) This Agreement shall be
construed pursuant to and governed by the substantive laws of the State of
Florida (and any provision of Florida law shall not apply if the law of a state
or jurisdiction other than Florida would otherwise apply).
(ii) The headings of the various sections in this
Agreement are inserted for the convenience of the parties and shall not affect
the meaning, construction or interpretation of this Agreement.
(iii) Any provision of this Agreement which is
determined by a court of competent jurisdiction to be prohibited, unenforceable
or not authorized in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition, unenforceability or non-
authorization without invalidating the remaining provisions hereof or affecting
the validity, enforceability or legality of such provision in any other
jurisdiction. In any such case, such determination shall not affect any other
provision of this Agreement, and the remaining provisions of this Agreement
shall remain in full force and effect. If any provision or term of this
Agreement is susceptible to two or more constructions or interpretations, one or
more of which would render the provision or term void or unenforceable, the
parties agree that a construction or interpretation which renders the term or
provision valid shall be favored.
(iv) As used in this Agreement, (2) the word "including"
is always without limitation; (3) the words in the singular number include words
of the plural number and vice versa; and (4) the word "person" includes a trust,
corporation, association, partnership, joint venture, business trust,
unincorporated organization, limited liability company, government, public body
or authority and any governmental agency or department, as well as a natural
person.
(c) Entire Agreement. This Agreement constitutes the entire
Agreement, and supersedes all prior agreements and understandings, oral and
written, among the parties to this Agreement with respect to the subject matter
hereof.
(d) Specific Enforcement. (i) The parties agree and acknowledge
that in the event of a breach by the Corporation of its obligation promptly to
indemnify the Indemnified Party as provided in this Agreement, or breach of any
other material provision of this Agreement, damages at law will be an
insufficient remedy to the Indemnified Party. Accordingly, the parties agree
that, in addition to any other remedies or rights that may be available to the
Indemnified Party, the Indemnified Party shall also be entitled, upon
application to a court of competent jurisdiction, to obtain temporary or
permanent injunctions to compel specific performance of the obligations of the
Corporation under this Agreement.
(ii) There shall exist in such action a rebuttable
presumption that the Indemnified Party has met the applicable standard(s) of
conduct and is therefore entitled to indemnification pursuant to this Agreement,
and the burden of proving that the relevant standards have not been met by the
Indemnified Party shall be on the Corporation. Neither the failure of the
Corporation (including its Board of Directors or independent legal counsel)
prior to the commencement of such
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action to have made a determination that indemnification is proper in the
circumstances because the Indemnified Party has met the applicable standard of
conduct, nor an actual determination by the Corporation (including its Board of
Directors or independent legal counsel) that the Indemnified Party has not met
such applicable standard of conduct, shall (X) constitute a defense to the
action, (Y) create a presumption that the Indemnified Party has not met the
applicable standard of conduct, or (Z) otherwise alter the presumption in favor
of the Indemnified Party referred to in the preceding sentence.
(e) Cost of Enforcement; Interest. (i) If the Indemnified Party
engages the services of an attorney or any other third party or in any way
initiates legal action to enforce his rights under this Agreement, including but
not limited to the collection of monies due from the Corporation to the
Indemnified Party, the prevailing party shall be entitled to recover all
reasonable costs and expenses (including reasonable attorneys' fees before and
at trial and in appellate proceedings). Should the Indemnified Party prevail,
such costs and expenses shall be in addition to monies otherwise due him under
this Agreement.
(ii) If any monies shall be due the Indemnified Party
from the Corporation under this Agreement and shall not be paid within 30 days
from the date of written request for payment, interest shall accrue on such
unpaid amount at the rate of 2% per annum in excess of the prime rate announced
from time to time by Bank of America, or such lower rate as may be required to
comply with applicable law from the date when due until it is paid in full.
(f) Application to Third Parties, Etc.. Nothing in this
Agreement, whether express or implied, is intended or should be construed to
confer upon, or to grant to, any person, except the Corporation, the Indemnified
Party and their respective heirs, assignees and successors, any claim, right or
remedy under or because of this Agreement or in any provision of it. This
Agreement shall be binding upon and inure to the benefit of the successors in
interest and assigns, heirs and personal representatives, as the case may be, of
the parties, including any successor corporation resulting from a merger,
consolidation, recapitalization, reorganization, sale of all or substantially
all of the assets of the Corporation, or any other transaction resulting in the
successor corporation assuming the liabilities of the Corporation under this
Agreement (by operation of law, or otherwise).
(g) Further Assurances. The parties to this Agreement will
execute and deliver, or cause to be executed and delivered, such additional or
further documents, agreements or instruments and shall cooperate with one
another in all respects for the purpose of carrying out the transactions
contemplated by this Agreement.
(h) Venue; Process. The parties to this Agreement agree that
jurisdiction and venue in any action brought pursuant to this Agreement to
enforce its terms or otherwise with respect to the relationships between the
parties shall properly lie in the Circuit Court of the Twentieth Judicial
Circuit of the State of Florida in and for ▇▇▇ County or in the United States
District Court for the Middle District of Florida, Tampa Division. Such
jurisdiction and venue are merely permissive; jurisdiction and venue shall also
continue to lie in any court where jurisdiction and venue would
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otherwise be proper. The parties agree that they will not object that any action
commenced in the foregoing jurisdictions is commenced in a forum non conveniens.
The parties further agree that the mailing by certified or registered mail,
return receipt requested, of any process required by any such court shall
constitute valid and lawful service of process against them, without the
necessity for service by any other means provided by statute or rule of court.
(i) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be considered an original, but all of which
together shall constitute one and the same instrument.
(j) Waiver and Delay. No waiver or delay in enforcing the terms
of this Agreement shall be construed as a waiver of any subsequent breach. No
action taken by the Indemnified Party shall constitute a waiver of his rights
under this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first above written.
CHICO'S FAS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Chief Executive Officer and President
WITNESSES:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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