CHICO’S FAS, INC.
11215 Metro Parkway
Ft. Myers, Florida 33966

 

May 4, 2009

 

TO OUR STOCKHOLDERS:

 

 

It is our pleasure to invite you to attend our 2009 Annual Meeting of Stockholders, which will be held at our corporate headquarters located at 11215 Metro Parkway, Ft. Myers, Florida on June 25, 2009 at 2:00 P.M., local time. The meeting will begin with a discussion and voting on the matters described in the attached Proxy Statement and Notice of Annual Meeting of Stockholders, followed by a report by several of our officers on Chico’s financial performance and operations.

 

The attached Proxy Statement is a critical element of the corporate governance process. Its purpose is to answer your questions, and to provide you with information about the Chico’s Board of Directors and the Company’s executive officers and a discussion of proposals that require your vote.

 

Please read these materials so that you’ll know what we plan to do at the meeting. Also, please sign and return the accompanying proxy card. This way, your shares will be voted as you direct even if you can’t attend the meeting.

 

This year we are arranging to furnish proxy materials over the Internet to those stockholders who own their shares in “street name,” but are continuing to furnish a full set of the proxy materials to each of our stockholders of record. We plan to have a Notice of Internet Availability of Proxy Materials mailed to those stockholders who own their shares in “street name” on or about May 11, 2009. The Notice of Internet Availability of Proxy Materials contains instructions on how “street name” holders can access our 2009 proxy statement and 2008 Annual Report on Form 10-K over the Internet. The Notice of Internet Availability also provides instructions on how such “street name” stockholders can request a paper copy of these documents if they so desire.

 

On behalf of the management and directors of Chico’s FAS, Inc., we want to thank you for your continued support and confidence in Chico’s.

 

 

DAVID F. DYER
President and Chief Executive Officer

 

CHICO’S FAS, INC.
11215 Metro Parkway
Ft. Myers, Florida 33966

 

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD JUNE 25, 2009

 

To the Stockholders of Chico’s FAS, Inc.:

 

 

 

 

By Order of the Board of Directors,

 

A. Alexander Rhodes

Secretary

 

May 4, 2009

 

TABLE OF CONTENTS

 

CHICO’S FAS, INC.
11215 Metro Parkway
Ft. Myers, Florida 33966

 

 

PROXY STATEMENT

 

 

ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 25, 2009

 

May 4, 2009

 

To the Stockholders of

Chico’s FAS, Inc.:

 

These proxy materials are delivered in connection with the solicitation by the Board of Directors of Chico’s FAS, Inc. (“Chico’s,” the “Company,” “we,” or “us”), a Florida corporation, of proxies to be voted at our 2009 Annual Meeting of Stockholders and at any adjournments or postponements thereof.

 

You are invited to attend our Annual Meeting of Stockholders on June 25, 2009, beginning at 2:00 P.M., local time. The Annual Meeting will be held at our corporate headquarters located at 11215 Metro Parkway, Ft. Myers, Florida. Stockholders will be admitted beginning at approximately 1:30 P.M. The operation of cameras (including cellular phones with photographic capabilities), recording devices and other electronic devices will not be permitted at the meeting.

 

It is important that proxies be returned promptly to avoid unnecessary expense to the Company. Therefore, regardless of whether you plan to attend the Annual Meeting or the number of shares of stock you own, please date, sign and return the enclosed proxy promptly.

 

At the Annual Meeting, stockholders will act upon the matters outlined in the accompanying notice of meeting, including the election of directors, a proposed amendment to the Company’s Amended and Restated Articles of Incorporation, and ratification of the Company’s independent certified public accountants. In addition, the Company’s management will report on the performance of the Company and respond to questions from stockholders.

 

This proxy statement and the form of proxy, or the Notice of Internet Availability of Proxy Materials, if applicable, are being mailed starting on approximately May 11, 2009.

 

New rules adopted by the Securities and Exchange Commission allow us to provide access to our proxy materials over the Internet instead of mailing a full set of such materials to every stockholder. However, under current Florida law, certain of those materials must still be provided to our stockholders of record by way of mail. Thus, for stockholders of record, you are being provided a full set of printed proxy materials. However, for stockholders who own their shares in “street name,” we have arranged to send you a Notice of Internet Availability. All of our stockholders may access our proxy materials over the

Internet using the directions below under “How do I access Chico’s proxy materials online?” or by using the directions set forth in the Notice of Internet Availability. In addition, by following the instructions set forth at such Internet site or the instructions set forth in the Notice of Internet Availability, any stockholder may request that a full set of printed proxy materials be sent to them.

 

We have chosen to send the Notice of the Internet Availability to stockholders who own their shares in “street name,” instead of automatically sending a full set of printed copies to all stockholders, to reduce the impact of printing our proxy materials on the environment and to save on the costs of printing and mailing incurred by the Company.

 

Chico’s proxy statement for the Annual Meeting and 2008 Annual Report may be accessed at http://materials.proxyvote.com/168615, which does not have “cookies” that identify visitors to the site.

 

If you are a stockholder who owns shares in “street name” and who received the Notice of Internet Availability, paper copies of Chico’s proxy materials will be made available at no cost to you, but they will only be sent to you if you request them. To request a paper copy of the proxy materials follow the instructions on the Notice of Internet Availability which you received. You will be able to submit your request for copies of the proxy materials by sending an email to the email address set forth in the Notice of Internet Availability, by going to the Internet address set forth in the Notice of Internet Availability or by calling the telephone number provided in the Notice of Internet Availability.

 

It is your legal designation of another person to vote the stock you own. That other person is called a proxy. If you designate someone as your proxy in a written document, that document also is called a proxy or a proxy card. The form of proxy card included with this proxy statement designates each of David F. Dyer, Kent A. Kleeberger and A. Alexander Rhodes as proxies for the 2009 Annual Meeting.

 

It is a document that the Securities and Exchange Commission’s regulations require us to give you when we ask you to sign a proxy card designating individuals as proxies to vote on your behalf.

 

If your shares are registered in your name, you are a stockholder of record. Owners of record receive their proxy materials from us. When you properly complete, sign and return your proxy card, you are instructing the named proxies to vote your shares in the manner you indicate on the proxy card.

 

If your shares are held in the name of your broker or other financial institution, which is usually the case if you hold your shares in a brokerage or similar account, your shares are held in “street name.” Your broker or other financial institution or its respective nominee is the stockholder of record for your shares. As the holder of record, only your broker, other institution or nominee is authorized to vote or grant a proxy for your shares. Accordingly, if you wish to vote your shares in person, you must contact your broker or other institution to obtain the authority to do so. Street name holders can access their proxy materials through the Internet or can elect to receive their proxy materials directly from their broker or other institution by contacting their broker or other institution. When you properly vote in accordance

with the instructions provided in the Notice of Internet Availability, you are giving your broker, other institution or nominee instructions on how to vote the shares they hold for you.

 

The record date for the 2009 Annual Meeting is April 27, 2009. The record date is established by the Board of Directors as required by law and the Company’s Amended and Restated Articles of Incorporation and By-laws. Owners of record of common stock at the close of business on the “record date” are entitled to:

 

(a) receive notice of the meeting, and

 

(b) vote at the meeting and any adjournments or postponements of the meeting.

 

A certain minimum number of shares must be present or represented by proxy at a meeting before any stockholder vote at the meeting can be effective. A quorum is necessary to conduct business at the meeting. For the Annual Meeting, the quorum requirement will be satisfied if a majority of the outstanding shares of common stock is present and/or represented by proxy. You are part of the quorum if you have voted by proxy. Abstentions, broker non-votes and votes withheld from director nominees count as “shares present” at the meeting for purposes of determining a quorum.

 

If you are a common stockholder of record at the close of business on the record date, you can vote. For each matter presented for vote, you have one vote for each share you own. If you are a holder in street name at the close of business on the record date, you generally will have the right to instruct your broker or other financial institution how to vote your shares, although specific procedures depend on the terms of your account arrangement. As of the record date, there were            common shares outstanding. Each common share is entitled to one vote on each matter properly brought before the Annual Meeting. Shares of common stock, par value $.01 per share, are the only outstanding voting securities of the Company.

 

Stockholders of record can vote by:

 

 

If you hold your shares in street name, you can vote by following the instructions contained in the Notice of Internet Availability. If your shares are held in street name and you wish to cast your vote in person at the Annual Meeting, you must either (i) obtain a “legal proxy,” executed in your favor, from the bank, broker, or nominee, as the case may be, or (ii) obtain a proxy direction form from the bank, broker, or nominee, as the case may be, and follow the instructions on the form so as to provide such bank, broker or nominee with your directions as to how you want such shares to be voted.

 

The Company has not established procedures to allow telephone or electronic voting by record stockholders, but may do so for future stockholder meetings if we determine that the added convenience to our record stockholders would justify the additional costs to the Company associated with these voting methods.

 

Street name holders may vote by way of the Internet as explained in the Notice of Internet Availability.

 

You may revoke your proxy or change your voting instructions before the time of voting at the meeting in several ways.

 

If you are a stockholder of record, you may revoke or change your proxy instructions at any time prior to the vote at the Annual Meeting. To do so:

 

 

If you hold your shares in street name, you may revoke or change your proxy instructions at any time prior to the vote at the Annual Meeting by submitting new voting instructions to your broker or other institution in accordance with the procedures and requirements applicable to your account.

 

If you submit a properly executed proxy card, the individuals named on the card, as your proxies, will vote your shares in the manner you indicate. If you sign and return the card without indicating your instructions, your shares will be voted for the election of the two nominees to serve three-year terms on our Board of Directors, for approval of the Articles of Amendment to the Amended and Restated Articles of Incorporation of Chico’s FAS, Inc., for ratification of the appointment of Ernst & Young LLP as the Company’s independent certified public accountants for the fiscal year ending January 30, 2010 (fiscal 2009), and otherwise as recommended by the Board of Directors.

 

Your vote is important. Whether or not you plan to attend the meeting, we encourage you to vote by proxy as soon as possible.

 

Your shares may be voted if they are held in the name of a broker or other institution, even if you do not provide the broker or other institution with voting instructions. Brokers and certain other institutions have the authority, under the rules of the New York Stock Exchange, to vote shares on certain “routine” matters for which their customers do not provide voting instructions by the tenth day before the meeting. The election of directors and the ratification of the appointment of Ernst & Young LLP as the independent certified public accountants of the Company are currently considered routine matters and thus may be voted on the matters scheduled to come before the meeting as your broker or

other institution may determine if you have not provided voting instructions within the applicable time frame. We believe that the approval of the Articles of Amendment to the Amended and Restated Articles of Incorporation is a non-routine proposal on which brokers will not be able to vote absent instruction from beneficial owners.

 

The Board’s recommendations regarding the proposals to be considered at the Annual Meeting are set forth together with the descriptions of the proposals in this proxy statement. In summary, the Board recommends a vote:

 

 

With respect to any other matter that properly comes before the meeting, the proxy holders will vote as recommended by the Board of Directors or, if no recommendation is given, in their own discretion. At the date this proxy statement went to press, we did not know of any other matter to be raised at the Annual Meeting.

 

Election of Directors.  Directors shall be elected by a plurality of the votes present in person or represented by proxy at the Annual Meeting and entitled to vote on the election of directors. A properly executed proxy marked “WITHHOLD AUTHORITY” with respect to the election of one or more directors will not be voted with respect to the director or directors indicated, even though it will be counted for purposes of determining whether there is a quorum present at the Annual Meeting.

 

Approval of the Articles of Amendment to the Amended and Restated Articles of Incorporation.  The Articles of Amendment to the Amended and Restated Articles of Incorporation of Chico’s FAS, Inc. will be approved if at least sixty-six and two thirds percent (662/3%) of the total issued and outstanding common stock of the Company are voted “FOR” approval of such Articles of Amendment.

 

Ratification of Appointment of Accountants.  The appointment of Ernst & Young LLP as the Company’s independent certified public accountants for the fiscal year ending January 30, 2010 will be ratified if the number of votes cast “FOR” ratification of the appointment by holders entitled to vote exceeds the number of votes cast opposing the ratification of the appointment.

 

Other Items.  If any other item requiring a stockholder vote should come before the meeting, the item will be approved if the number of shares voting for the item is greater than the number of shares voting against the item.

 

An abstention occurs when a stockholder of record (which may be a broker or other nominee of a street name holder) is present at a meeting (or deemed present) but fails to vote on a proposal, indicates that the stockholder abstains from voting on the proposal, or withholds authority from proxies to vote for director nominees while failing to vote for other eligible candidates in their place. A broker non-vote occurs when a broker or other nominee who holds shares for another does not vote on a particular item

because the nominee does not have discretionary voting authority for that item and has not received instructions from the street name owner of the shares.

 

Abstentions (that is, a properly executed proxy marked “WITHHOLD AUTHORITY” with respect to the election of directors or “ABSTAIN” with respect to any other matter) and broker non-votes with respect to a particular matter do not count in any vote totals for or against any matter, even though the shares associated with such abstentions and broker non-votes are counted for purposes of determining whether there is a quorum present at the Annual Meeting. Accordingly, for purposes of any vote, abstentions and broker non-votes will have the same effect as does a share that is not present or otherwise not voted, as more specifically described below.

 

Election of Directors.  Abstentions will have no effect on the outcome of the election of candidates for director. Additionally, the election of directors is a matter on which a broker or other nominee is generally empowered to vote, and therefore no broker non-votes are expected to exist in connection with the election of directors.

 

Approval of the Articles of Amendment to the Amended and Restated Articles of Incorporation.  Because the proposal to approve and ratify the Articles of Amendment to the Articles of Incorporation of Chico’s FAS, Inc. is a matter on which brokers are not empowered to vote without instructions, there may be broker non-votes. For purposes of approval of such Articles of Amendment, abstentions and broker non-votes will have the same substantive effect as votes “AGAINST” such approval, because approval requires the affirmative vote of at least sixty-six and two thirds percent (662/3%) of the total issued and outstanding shares of common stock.

 

Ratification of Appointment of Accountants.  Abstentions will have no effect on the outcome of the ratification of the appointment of the accountants. As for broker non-votes, the ratification of the appointment of the independent certified public accountants for the fiscal year ending January 30, 2010 is a matter on which a broker or other nominee is generally empowered to vote. Accordingly, no broker non-votes are expected to exist in connection with ratification of the appointment.

 

The votes of all stockholders are held in confidence from directors, officers and employees, except:

 

 

(b) in case of a contested proxy solicitation,

 

 

(d) to allow the independent inspectors of election to certify the results of the vote.

 

All votes will be tabulated by employees of The Registrar and Transfer Company, the Company’s transfer agent for the common stock, whose representatives will serve as one or more of the inspectors of election.

 

We will pay the expenses of soliciting proxies. Proxies may be solicited on our behalf by directors, officers or employees in person or by telephone, mail, electronic transmission, facsimile transmission or telegram. The Company will request brokerage houses and other custodians, nominees and fiduciaries to forward soliciting material to stockholders and the Company will reimburse such institutions for their out-of-pocket expenses incurred thereby. The Company has not engaged any outside service provider to assist in the solicitation of proxies.

 

In some cases, for stockholders of record, we may send only one Annual Report and proxy statement to an address shared by two or more stockholders, unless we have received contrary instructions from one or more stockholders at that address. This practice, known as “householding,” is designed to reduce our printing and postage costs. If you are a stockholder of record residing at such an address and you wish to receive a separate copy of our 2008 Annual Report or this proxy statement, please contact Bob Atkinson, Vice President — Investor Relations by phone at (239) 277-6200 or in writing at 11215 Metro Parkway, Ft. Myers, Florida 33966 and we will promptly send you separate copies. If we have been sending only one annual report and/or proxy statement to your household but you or another stockholder in the household wishes to receive separate copies of annual reports and/or proxy statements in the future, please contact us in the same manner. Please also contact us if your household receives multiple copies of our annual report and/or proxy statement and you would prefer that we send only one copy for the entire household.

 

If you are a beneficial holder and hold your shares in “street name,” your broker, bank or other institution may be utilizing “householding” in sending you the annual report, the proxy statement and/or the Notice of Internet Availability. If you prefer to change the manner in which “householding” is being applied to these deliveries, you should directly contact your broker, bank or other institution.

 

You can send written communications to one or more members of the Board, addressed to:

 

Chairman, Board of Directors

Chico’s FAS, Inc.

c/o Corporate Secretary

11215 Metro Parkway

Ft. Myers, Florida 33966

 

All such communications will be forwarded to the relevant director(s), except for solicitations or other matters unrelated to the Company.

 

The Company’s 2010 Annual Meeting is currently expected to be held on June 17, 2010. If a stockholder wishes to have a proposal considered for inclusion in next year’s proxy statement, he or she must submit the proposal in writing so that we receive it by January 4, 2010. Proposals should be addressed to the Company’s Corporate Secretary, 11215 Metro Parkway, Ft. Myers, Florida 33966. In addition, the Company’s Amended and Restated Articles of Incorporation also require certain advance notice to the Company of any stockholder proposal and of any nominations by stockholders of persons to stand for election as directors at a stockholders’ meeting. That notice must provide certain other

information as described in the Company’s Amended and Restated Articles of Incorporation. See “Stockholder Proposals for Presentation at the 2010 Annual Meeting.”

 

As previously announced or reported, the following key officer and director changes occurred since the Company’s 2008 Annual Meeting:

 

 

 

The full Board is currently comprised of eight directors. The Board is divided into three classes with Class I having two directors, Class II having three directors and Class III having three directors.

 

Directors are elected for three-year terms.

 

The terms of the existing Class I directors, Ross E. Roeder and Andrea M. Weiss, expire at the 2009 Annual Meeting.

 

The Class II directors, Verna K. Gibson, Betsy S. Atkins and David F. Dyer, serve until the Annual Meeting of stockholders in 2010, and the Class III directors, John W. Burden III, David F. Walker and John J. Mahoney, serve until the Annual Meeting of stockholders in 2011.

 

The election of the two Class I directors will take place at the 2009 Annual Meeting. By unanimous written consent effective as of March 10, 2009, the Board approved the recommendation of

the Corporate Governance and Nominating Committee and nominated the following persons to stand for election at the 2009 Annual Meeting:

 

Class I Director Seats

 

Ross E. Roeder

Andrea M. Weiss

 

If elected, Ross E. Roeder and Andrea M. Weiss will continue their service on the Board beginning at the 2009 Annual Meeting and will serve on the Board until the annual meeting in 2012, or until their successors are duly elected and qualified, or until their earlier death, resignation or removal. Unless otherwise directed, the persons named in the enclosed form of proxy intend to vote such proxy “FOR” the election of Ross E. Roeder and Andrea M. Weiss as Class I directors of the Company.

 

Effective February 24, 2009, we entered into a letter agreement with one of our shareholders, Spotlight Capital Partners, L.P. and certain entities and persons affiliated with Spotlight Capital Partners, (collectively, “Spotlight”). In the letter agreement, we agreed to appoint Ms. Weiss as a Class I director, and to include her as a nominee as a Class I director at our 2009 Annual Meeting. The Company also agreed to appoint Ms. Weiss to the Company’s Compensation and Benefits Committee and the Company’s Merchant Committee. Spotlight agreed, among other matters, that they would support the Board’s full list of nominees at our 2009 Annual Meeting, and agreed to a standstill agreement with us. A copy of the agreement with Spotlight was included in our Current Report on Form 8-K that we filed with the SEC on February 25, 2009.

 

None of the nominees is related to another or to any other director or any executive officer of Chico’s FAS, Inc. by blood, marriage, or adoption.

 

Each of the proposed nominees for election as directors has consented to serve if elected. If, as a result of circumstances not now known or foreseen, any of the nominees becomes unable or unwilling to serve as a director, proxies may be voted for the election of such other person or persons as the Board of Directors may select. The Board of Directors has no reason to believe that any of the nominees will be unable or unwilling to serve.

 

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ELECTION OF THESE NOMINEES FOR ELECTION AS CLASS I DIRECTORS. The nominees that receive a plurality of the votes cast by the shares entitled to vote at the Annual Meeting shall be elected as the directors.

 

Nominees for election at this meeting to terms expiring in 2012:

 

Ross E. Roeder, 71, has been a director since 1997 and currently serves as the Chairman of the Board, having been appointed Chairman on January 8, 2009, upon the departure of Mr. Edmonds. Mr. Roeder is the former Chairman of Smart & Final, Inc., having held this position from 1999 and having also served as a director of SFI Corporation, the parent corporation of Smart & Final, from 1984 until his retirement in 2007. From 1999 until 2004, Mr. Roeder also held the position of Chief Executive Officer of Smart & Final, Inc. From 1986 to 1998, Mr. Roeder served as a director of Morgan-Kaufman Publishers, Inc., a publisher of computer science text and reference books, and from 1993 to 1998 served as its Chairman of the Board. From 1986 until February 1993, Mr. Roeder was President and Chief Executive Officer of Federal Construction Company. Mr. Roeder is also a director of Mercantile Bank.

 

Andrea M. Weiss, 53, has been a director since February 2009. Ms. Weiss formed Retail Consulting, Inc., a boutique consulting practice focused on product and brand development, consumer contact strategies, operational improvements, and turnarounds, and has served as its President and Chief

Executive Officer since its formation in October 2002. She served as Chairman of Cortefiel Group, SA, a European retailer, from April 2006 to June 2007, as President of dELiA*s Corp., a multichannel retailer to teenage girls and young women, from May 2001 to October 2002, as Executive Vice President and Chief Store Officer of The Limited, Inc. and Intimate Brands, Inc., units of Limited Brands, Inc., a women’s retailer, from May 1998 to February 2001 and also has held senior executive level positions at Guess, Inc., and Ann Taylor Stores, Inc. Ms. Weiss currently serves on the boards of directors of Cracker Barrel Old Country Store, Inc., eDiets.com, Inc., and GSI Commerce, Inc. Ms. Weiss was appointed to the Board in February 2009 pursuant to the terms of the letter agreement entered into by the Company with Spotlight. Prior to entering into the letter agreement, the Corporate Governance and Nominating Committee evaluated Ms. Weiss’ qualifications and approved her qualifications to serve as a director of the Company.

 

Directors whose present terms continue until 2010 (Class II directors):

 

Verna K. Gibson, 66, has been a director since 1993 and is presently a retailing consultant. Ms. Gibson provided certain retail consulting services to the Company from early January 2009 through early April 2009 for an aggregate compensation of $90,000 and has been engaged to continue such consulting services through early July 2009 for an additional aggregate compensation of $90,000. From 1985 to 1991, Ms. Gibson was President and Chief Executive Officer of the Limited Stores Division of The Limited, Inc., a retail apparel specialty chain. From January 1991 through 1995, she served as President of Outlook Consulting Int., Inc. and in January 1999, she resumed the position of President of Outlook Consulting Int., Inc. From December 1994 to July 1996, Ms. Gibson was the Chairman of the Board of Petrie Retail, Inc. From 1993 to fall 1999, Ms. Gibson was a partner of Retail Options, Inc., a New York based retail consulting firm.

 

Betsy S. Atkins, 55, has been a director since 2004 and beginning April 1, 2009 is the Chief Executive Officer and Chairman of Clear Standards, Inc. Ms. Atkins is also the Chief Executive Officer of Baja Ventures, an independent venture capital firm focused on the technology and life sciences industry since 1994. Prior to 1994, Ms. Atkins was Chairman and Chief Executive Officer of NCI, Inc., a functional food/nutraceutical company, from 1991 to 1993. Ms. Atkins was a co-founder of Ascend Communications, Inc. in 1989, a member of their Board of Directors, and served as its Executive Vice President of Sales, Marketing, Professional Services and International Operations prior to its acquisition by Lucent Technologies. Ms. Atkins serves on the boards of Directors of Polycom, Inc., Reynolds American Inc., SunPower Corporation, and a number of private companies (including the board of directors of the NASDAQ Stock Market LLC) and is an advisor to British Telecom. Ms. Atkins was a Presidential-appointee to the Pension Benefit Guaranty Corporation advisory committee, and is a Governor-appointed member of the Florida International University Board of Trustees.

 

David F. Dyer, 59, has been a director since 2007.  Mr. Dyer is also the President and Chief Executive Officer of the Company, having assumed these officer positions on January 8, 2009, succeeding Mr. Edmonds. Mr. Dyer is the former President and Chief Executive Officer of Tommy Hilfiger Corporation where he served from August 2003 until his retirement in May 2006. Mr. Dyer was retired from May 2006 until January 2009. Prior to joining Tommy Hilfiger Corporation, Mr. Dyer served as President and Chief Executive Officer of Lands’ End from 1998 through 2002. From June 2002 until August 2003, Mr. Dyer also served as Executive Vice President of Sears and was a member of its Management Executive Committee, in addition to his position as President and Chief Executive Officer of Lands’ End. His responsibilities included, in addition to Lands’ End, the Sears Direct businesses, both internet and catalog, and the Great Indoors Home division of Sears. Mr. Dyer previously served in various

other roles at Lands’ End from 1989 to 1994, including as Vice Chairman and Director from 1991 to 1994. Mr. Dyer began his career with Burdines, a division of Federated Department Stores, and held various merchandising and marketing posts during his 17 years there. He later served as President and Chief Operating Officer of Home Shopping Network and was Acting President of J. Crew Catalog from 1997 to 1998.

 

Directors whose present terms continue until 2011 (Class III directors):

 

John W. Burden, III, 72, has been a director since 1997 and is currently an independent retailing consultant, having served as a consultant and partner in Retail Options, Inc. from November 1993 to December 1997. From December 1990 to March 1993, Mr. Burden’s principal occupation was as an officer in Pelican Palms Realty Company, a real estate sales company he owned. In 1990, he retired as the Chairman of both Federated Department Stores, Inc., and Allied Department Stores, Inc., following a 19 year career in various merchandising positions in the Federated organization, including President of Burdines and Chairman of the Abraham & Straus Division. Prior to that time, he spent 12 years with Macy’s.

 

David F. Walker, 55, has been a director since 2005 and is currently the Director of the Accountancy Program at the University of South Florida in St. Petersburg and leads the school’s Program for Social Responsibility and Corporate Governance. He has held these positions since 2002. Mr. Walker also has been an independent consultant with respect to accounting, auditing and business issues since 2002. For approximately 27 years, through 2002, Mr. Walker was with the accounting firm of Arthur Andersen LLP, having served as a partner with the firm from 1986 until 2002, and most recently until 2002 as partner in charge of the firm’s assurance and business advisory services practice in the Florida/Caribbean region. Mr. Walker is a certified public accountant, certified fraud examiner, and holds a Masters of Business Administration degree from the University of Chicago Graduate School of Business. He currently also serves on the Board of Directors of First Advantage Corporation, Comm Vault Systems, Inc., and Technology Research Corporation, Inc.

 

John J. Mahoney, 57, has been a director since 2007 and is currently the Vice Chairman and Chief Financial Officer for Staples, Inc., having served as Vice Chairman since January 2006 and as Chief Financial Officer since 1996. Prior to 1996, Mr. Mahoney was a partner at Ernst & Young LLP.

 

The Company has adopted Corporate Governance Guidelines that are available at www.chicosfas.com by first clicking on “Corporate Governance” and then “Corporate Governance Guidelines.” The “Corporate Governance Guidelines” are also available in print to any stockholder who requests it by contacting the Company’s Corporate Secretary, 11215 Metro Parkway, Ft. Myers, Florida 33966. These guidelines were adopted by the Board to formalize its obligation to be independent from management, to adequately perform its function as the overseer of management, and to align the interests of the Board and management with the interests of the stockholders. The Guidelines have been updated from time to time since their initial adoption. The Guidelines, as adopted by the Board, meet the updated listing standards of the New York Stock Exchange. The Company has completed its annual review of the Guidelines. Any revisions to the Guidelines continue to meet the applicable listing standards of the New York Stock Exchange and have been posted on the Company’s website.

 

On an annual basis, each director and executive officer is obligated to complete a Director and Officer Questionnaire which, among other things, requires disclosure of any transactions with the

Company in which the director or executive officer, or any member of his or her immediate family, have a direct or indirect material interest. As of March 31, 2009, other than compensation arrangements fully described elsewhere in this proxy, no such transactions have been disclosed.

 

The members of the Board of Directors on the date of this proxy statement, and the committees of the Board on which they currently serve, are identified below:

 

 

Governance Structure

 

Corporate governance is typically defined as the system that allocates duties and authority among a company’s stockholders, board of directors, and management. The stockholders elect the board and vote on extraordinary matters. The board is the Company’s governing body, responsible for hiring, overseeing and evaluating executive management, particularly the Chief Executive Officer, and management runs the Company’s day-to-day operations. Our Board of Directors currently consists of eight directors. The current Board members include six independent directors and two individuals who are not considered independent directors, one being a member of the Company’s senior management and the other providing substantial consulting services for the Company. If all of the nominees for election are elected, the Board will continue to be comprised of six independent directors and two non-independent directors.

 

Board Responsibilities

 

The primary responsibilities of the Board of Directors are oversight, counseling, and direction to the Company’s executive management in the long-term interests of Chico’s and its stockholders. To the extent appropriate under Florida law, the Board, in carrying out its duties, also may consider the interests of other constituencies, which include employees, suppliers, customers and the communities in which it does business, and the economy of the state of Florida and the United States. The Board’s detailed responsibilities include: (a) selecting, regularly evaluating the performance of, and approving the compensation of the Chief Executive Officer and other senior executives; (b) planning for succession with respect to the position of Chief Executive Officer and monitoring management’s succession planning for other senior executives; (c) reviewing and, where appropriate, approving Chico’s major financial objectives, strategic and operating plans and actions; (d) overseeing the conduct of Chico’s business to evaluate whether the business is being properly managed and whether proper internal controls are in place and effective; and

(e) overseeing the processes for maintaining Chico’s integrity with regard to its financial statements and other public disclosures and compliance with law and ethics. The Board of Directors has delegated to the Chief Executive Officer, working with Chico’s other executive officers, the authority and responsibility for managing the Company’s business in a manner consistent with the Company’s standards and practices, and in accordance with any specific plans, instructions or directions of the Board. The Chief Executive Officer and management are responsible for seeking the advice and, in appropriate situations, the approval of the Board and/or its various committees with respect to significant actions to be undertaken by Chico’s.

 

The Board and its committees meet throughout the year on a set schedule, and also hold special meetings and act by written consent from time to time as appropriate. The Board of Directors held seven meetings during fiscal 2008 (consisting of six regularly scheduled meetings and one special meeting), and each incumbent director attended at least 75% of the total number of Board meetings and meetings of committees on which he or she served. Indeed, during fiscal 2008, our directors attended 100% of the Board meetings and on average 95% of the meetings of the committees on which they served.

 

During fiscal 2008, the non-employee directors of the Board met without the Chief Executive Officer or other members of management present during three of the six regularly scheduled Board meetings.

 

In August 2003, the Board created the position of lead director, whose primary responsibility was to preside over periodic executive sessions of the Board in which management directors and other members of management do not participate. The position was created, in part, because the persons serving as Chairman of the Board of the Company were generally not independent members of the Board. From September 2007 until January 2009, Ross E. Roeder had served in the position of lead director while Scott Edmonds served as the Chairman of the Board. Upon the resignation of Mr. Edmonds in January 2009, Mr. Roeder, an independent member of the Board, was appointed as Chairman, a position in which he was designated to continue serving until at least the Company’s 2009 Annual Meeting of stockholders. The Company decided that because Mr. Roeder is an independent director, Mr. Roeder should be able to carry out his former responsibilities as lead director through his position as Chairman and that, so long as the appointed Chairman was a person who qualified as an independent director, no separate appointment of a lead director was necessary.

 

Pursuant to the Corporate Governance Guidelines, the Board undertook a review of director and director nominee independence in February 2009. During this review, the Board considered transactions and relationships between each director or nominee or any member of his or her immediate family and the Company and its subsidiaries and affiliates. The Board also examined transactions and relationships between directors, nominees or their affiliates and members of the Company’s senior management or their affiliates. As provided in the Guidelines, the purpose of this review was to determine whether any such relationships or transactions were inconsistent with a determination that the director is independent. A director is considered independent only if the Board affirmatively determines that the director has no material relationship with the Company, either directly or indirectly. In accordance with the Guidelines and the NYSE listing standards, a director is not independent if:

 

 

 

As a result of this review, and based on information furnished by all members of the Board regarding their relationships with the Company and research conducted by management with respect to outside affiliations, the Board affirmatively determined that six of the eight current directors, Mr. Roeder, Mr. Burden, Ms. Atkins, Mr. Walker, Mr. Mahoney, and Ms. Weiss, are independent of the Company and its management under the independence standards set forth in the Guidelines, under the NYSE independence standards and under the independence standards set forth in Rule 10A-3 under the Securities Exchange Act of 1934. In its deliberations, the Board considered the position Mr. Burden’s son-in-law holds with the Company, as described under the heading “Certain Relationships and Related Party Transactions,” and determined that such relationship did not cause Mr. Burden to fail to meet the applicable independence standards. As a result of this review and this process, the Board also affirmatively determined that the Audit, Compensation and Benefits, and Corporate Governance and Nominating Committees are all comprised entirely of independent directors. In addition, members of the Compensation and Benefits Committee meet the additional standards applicable to “outside directors” under Internal Revenue Code Section 162(m) and qualify as “non-employee directors” as defined in Rule 16b-3 under the Securities Exchange Act of 1934.

 

Although he was considered an independent director until his appointment as President and Chief Executive Officer in January 2009, Mr. Dyer is now considered a non-independent director because of his employment as a senior executive of the Company. The Board also determined in April 2009 that Ms. Gibson, who was formerly considered an independent director, is now considered a non-independent director because of her consulting relationship with the Company, which commenced in early January 2009 and is currently scheduled to continue through early July 2009.

 

The Company has a Code of Ethics, which is applicable to all employees and directors of the Company, including the principal executive officer, the principal financial officer and the principal accounting officer, and to all the directors. The Code of Ethics is available at the Company’s investor relations website (www.chicosfas.com) by clicking on “Corporate Governance.” The Company intends to post amendments to or waivers from its Code of Ethics (to the extent applicable to the Company’s chief executive officer, principal financial officer, principal accounting officer or its directors) at this location on its website. No waivers have been granted under the Code of Ethics.

 

Stockholders and other parties interested in communicating with the Chairman or with the other non-management directors as a group may do so by writing to: Chairman, Board of Directors, Chico’s FAS, Inc., c/o Corporate Secretary, 11215 Metro Parkway, Ft. Myers, Florida 33966. Letters addressed to the Chairman or any of the other non-management directors will be routed to the Corporate Secretary who will review all such correspondence, will keep a file with copies of such correspondence (including a log thereof), will regularly forward such correspondence that, in the opinion of the Corporate Secretary, deals with the functions of the Board or committees thereof or that he otherwise determines requires their attention and may also provide each of the directors with summaries of all such correspondence. Directors may at any time review the file of such correspondence or the log of such correspondence and may request copies of any such correspondence.

 

A separate process has been established for dealing with concerns relating to accounting, internal controls or auditing matters. Stockholders, employees, and other parties interested in communicating about any of these particular matters may alternatively submit such communications by calling a third party hotline that has been established by the Board of Directors (1-888-669-4911, ext. 2273) and such reports will immediately be brought directly to the attention of the chair of the Company’s Audit Committee and separately to the General Counsel and to the Vice President-Internal Audit. If a communication relating to accounting, internal controls or auditing matters is received in writing by the Company, the Corporate Secretary will promptly forward such written correspondence to the chair of the Company’s Audit Committee and separately to the General Counsel and to the Vice President-Internal Audit. These particular reports, whether received through the hotline or in writing, will be handled in accordance with procedures established by the Company’s Audit Committee.

 

The Company has no policy with regard to Board members’ attendance at stockholders’ annual meetings; however, it has been the custom for Chico’s directors to attend the annual meeting of stockholders. All of the directors then holding office attended the Annual Meeting in June 2008.

 

The Company’s Corporate Governance Guidelines are intended to provide a set of flexible guidelines for the effective functioning of the Board and are reviewed annually and revised as necessary or appropriate in response to changing regulatory requirements and evolving best practices. They are available at the Company’s investor relations website (www.chicosfas.com) by clicking on “Corporate Governance.”

In addition to the Company’s Corporate Governance Guidelines, other information relating to corporate governance at Chico’s is available on the Corporate Governance section of the Company’s investor relations website, including:

 

 

The current charters of each of these committees as well as Chico’s Corporate Governance Guidelines and Code of Ethics are available at the Company’s investor relations website (www.chicosfas.com) by clicking on “Corporate Governance.” Chico’s stockholders may obtain printed copies of these documents by writing to Chico’s FAS, Inc. Corporate Secretary, 11215 Metro Parkway, Ft. Myers, Florida 33966.

 

The Board of Directors has a standing Corporate Governance and Nominating Committee, Audit Committee, Compensation and Benefits Committee, Executive Committee, and Merchant Committee.

 

Corporate Governance and Nominating Committee

 

The Corporate Governance and Nominating Committee held four meetings during fiscal 2008. This Committee is responsible for developing and implementing policies and practices relating to corporate governance, including reviewing and monitoring implementation of the Company’s Corporate Governance Guidelines. In addition, its principal responsibilities from the perspective of its role as a nominating committee are to interview, evaluate, nominate, and recommend individuals for membership on the Company’s Board of Directors and its committees. This Committee also prepares and supervises the Board’s annual review of director independence and the Board’s performance self-evaluation.

 

All of the members of this Committee are independent within the meaning of the listing standards of the New York Stock Exchange and the Company’s Corporate Governance Guidelines.

 

Audit Committee

 

The Audit Committee held eight meetings during fiscal 2008. The Audit Committee’s principal responsibilities are to assist the Board in its general oversight of Chico’s financial reporting, internal controls, ethics compliance, and audit functions. This Committee is directly responsible for the appointment, compensation, and oversight of the work of the Company’s independent certified public accountants, reviews the annual financial results and the annual audit of the Company’s financial statements and approves the inclusion of the audited financial statements in the Form 10-K, reviews the Company’s quarterly financial results and each Form 10-Q, and meets with the independent accountants and the Vice President-Internal Audit from time to time in order to review the Company’s internal controls and financial management practices. During each fiscal year, at least one

(and usually more) of the meetings between this Committee and the independent accountants is held separately without management present. This Committee has established policies and procedures for the engagement of the independent accountants to provide permissible non-audit services, which includes pre-approval of all permissible non-audit services to be provided by the independent accountants.

 

All members of this Committee are independent within the meaning of the listing standards of the New York Stock Exchange and the Company’s Corporate Governance Guidelines. Federal regulations also require the Board to determine if a member of its Audit Committee is an “Audit Committee Financial Expert.” According to these regulations, an audit committee member can be designated an Audit Committee Financial Expert only when the audit committee member satisfies five specified qualification requirements, including experience in (or “experience actively supervising” others engaged in) preparing, auditing, analyzing, or evaluating financial statements presenting a level of accounting complexity comparable to what is encountered in connection with the Company’s financial statements. The regulations further require such qualifications to have been acquired through specified means of experience or education. The Board has determined that Mr. Walker, the chair of this Committee, and Mr. Mahoney are each qualified as an Audit Committee Financial Expert within the meaning of the regulations of the Securities and Exchange Commission (“SEC”), and that each of them has accounting and related financial management expertise within the meaning of the listing standards of the New York Stock Exchange. Although the Board of Directors has determined that Mr. Walker and Mr. Mahoney each has the requisite attributes defined under the rules of the SEC, their respective responsibilities are generally the same as those of the other Audit Committee members. The Audit Committee members are not auditors or accountants for the Company, do not perform “field work” and are not full-time employees of any audit firm. The SEC has determined that an audit committee member who is designated as an Audit Committee Financial Expert will not be deemed to be an “expert” for any purpose as a result of being identified as an Audit Committee Financial Expert. See the Audit Committee Report on page 25 for further information.

 

Compensation and Benefits Committee

 

The Compensation and Benefits Committee held six meetings during fiscal 2008 and regularly acts by written consent. The principal responsibilities of this Committee are to review and make recommendations to the Board of Directors concerning the compensation of all officers of the Company, to provide input and make recommendations to the Board on individuals elected to be executive officers of the Company; to review and make recommendations with respect to the Company’s existing and proposed compensation and bonus plans, and to serve as the committee responsible for administering the Company’s various equity incentive plans, Deferred Compensation Plan, 401(k) Plan, and the Cash Bonus Incentive Plan.

 

All of the members of this Committee are independent within the meaning of the listing standards of the New York Stock Exchange and the Company’s Corporate Governance Guidelines. See the Compensation and Benefits Committee Report on page 30 for further information.

 

Executive Committee

 

The Executive Committee serves primarily as a means for taking action requiring Board approval between regularly scheduled meetings of the Board. The Executive Committee is authorized to act for the full Board on matters other than those specifically reserved by Florida law to the Board. In practice, the Committee’s actions are generally limited to more routine matters such as the authorization of ordinary-course corporate credit facilities and borrowings. The Executive Committee held no meetings during fiscal 2008, but, from time to time, acts by written consent.

Merchant Committee

 

The Merchant Committee consults with and advises the Company on matters concerning the Company’s products for each of its brands. The Merchant Committee held seven meetings during fiscal 2008.

 

Policies and Procedures Regarding Related Person Transactions

 

Transactions and relationships that involve directors, executive officers or other related persons and that constitute a conflict with the Company’s interests require, in advance, a full disclosure to and review by the Company’s Audit Committee of all facts and circumstances concerning the transactions and relationships, all in accordance with our Code of Ethics.

 

Responsibility for Selection of Director Candidates

 

The Board is responsible for selecting director candidates. The Board has delegated the screening process to the Corporate Governance and Nominating Committee, with the expectation that other members of the Board and executives will be asked to take part in the process as appropriate. Candidates recommended by the Corporate Governance and Nominating Committee are subject to approval by the Board.

 

Stockholder Nominees

 

The policy of the Corporate Governance and Nominating Committee is to consider written recommendations from stockholders for positions on the Board of Directors. A stockholder who wishes to recommend a prospective nominee for the Board should notify the Corporate Secretary of the Company or any member of such Committee in writing with whatever supporting material the stockholder considers appropriate, including the nominee’s name and qualifications for Board membership. In evaluating such nominations, such Committee seeks to address the criteria set forth under “Director Criteria” and “Director Obligations” below. Such Committee will also consider whether to nominate any person nominated by a stockholder pursuant to the provisions set forth in the Amended and Restated Articles of Incorporation of the Company relating to stockholder nominations. See “Stockholder Proposals for Presentation at the 2010 Annual Meeting” on page 71 for further information. In fiscal 2008, the Company received several recommendations of persons to be considered for nomination and/or appointment as directors, including persons proposed by Spotlight for consideration. These nominations and recommendations were carefully considered and evaluated by the Committee and ultimately Andrea Weiss was accepted from among the recommendations to be appointed to the Board and to be nominated for continued service.

 

Identifying and Evaluating Nominees

 

The Corporate Governance and Nominating Committee utilizes a variety of methods for identifying and evaluating nominees for director positions. The Committee regularly assesses the appropriate size of the Board, and whether any vacancies on the Board are expected due to retirement or otherwise. In the event that vacancies are anticipated, or otherwise arise, the Committee considers various potential candidates for the director positions. Candidates may come to the attention of the Committee through current Board members, current management, professional search firms, stockholders (as described above) or other persons. Once the Committee has identified a prospective nominee, it will make an initial determination as to whether to conduct a full evaluation of the

candidate. This initial determination is based on whatever information is provided to the Committee with the recommendation of the prospective candidate, as well as the Committee’s own knowledge of the prospective candidate, which may be supplemented by inquiries to the person making the recommendation or others. The preliminary determination is based primarily on the need for additional Board members to fill vacancies or expand the size of the Board and the likelihood that the prospective nominee can satisfy the applicable criteria for directors.

 

If the Committee determines, in consultation with the Chairman of the Board and other Board members, as appropriate, that additional consideration is warranted, it may ask Board members or engage third parties to gather additional information about the prospective nominee’s background and experience and to report the findings to the Committee. The Committee then evaluates the prospective nominee against the criteria set out in the Company’s Corporate Governance Guidelines. The Committee also considers such other relevant factors as it deems appropriate, including the backgrounds, qualifications and skills of existing Board members, the balance of management and independent directors, the need for Audit Committee expertise, and the Committee’s evaluation of other prospective nominees.

 

In connection with this evaluation, the Committee determines whether to interview the prospective nominee, and if warranted, the Chair of the Committee, one of the other independent directors, as well as the Chief Executive Officer, and others as appropriate, interview prospective nominees in person or by telephone. After completing these evaluations and interviews, the Committee deliberates and makes a recommendation to the full Board as to the persons who should be nominated by the Board, and the Board determines the nominees after considering the recommendation and report of the Committee.

 

In the letter agreement with Spotlight described earlier, the Company agreed to identify, as promptly as practicable, one additional candidate to serve on the Board who is qualified to serve under all applicable requirements, is not employed by or affiliated with the Company, and otherwise is “independent”, and to appoint such person as a Class I director. The Company is currently engaged in the process of identifying such additional director. At such time as an additional director is appointed, the letter agreement with Spotlight provides that we will increase the size of the Board to nine directors.

 

Director Criteria

 

The Corporate Governance and Nominating Committee is responsible for reviewing with the Board the requisite skills and characteristics of new Board candidates in the context of the then current composition of the Board. This assessment includes experience in industry, finance, administration, operations and marketing, as well as diversity. Director candidates should be able to provide insights and practical wisdom based on their experience and expertise. Service on other boards and other commitments are considered by such Committee when reviewing Board candidates.

 

Director Obligations

 

Directors are expected to prepare for, attend and participate in Board meetings and meetings of the committees of the Board on which they serve, to ask direct questions and require straight answers, and to spend the time needed and meet as frequently as necessary to properly discharge their responsibilities and duties as directors. Each Board member is expected to ensure that other existing and planned future commitments do not materially interfere with the member’s service as a director.

 

General.  In recent years, the Company’s compensation consultants have assisted the Board in its review of director compensation, including conducting a total outside director compensation analysis in early 2008 and again in 2009 utilizing data for the Company’s peer group companies. These analyses were used in connection with making the decision to change the compensation arrangements for the non-management directors, effective on and after June 26, 2008, to the compensations arrangements described below.

 

Indemnification.  We indemnify our directors and certain of our officers to the fullest extent permitted by law so that they will serve free from undue concern that they will not be indemnified. This is authorized under our By-laws, and accordingly we have signed agreements with each of those individuals contractually obligating us to provide this indemnification to them.

 

Base Compensation and Non-Equity Benefits.  Under the current compensation arrangements for directors, which were also in effect in the latter half of fiscal 2008, each non-employee director receives an annual retainer of $60,000 per year. The lead director had been entitled to receive an additional annual retainer of $30,000 per year. However, in January 2009, the Board elected a new Chairman who is independent and not a member of the Company’s management. A non-employee director serving as the Chairman of the Board receives an additional annual retainer of $60,000 instead of the lead director retainer. As a result, the position of lead director will not be necessary during such time as the Chairman elected to serve is independent and not a member of the Company’s management. In addition, each non-employee director who serves as a committee chair for the Audit and Compensation and Benefits Committees receives an additional annual retainer of $20,000 and all other committee chairs receive an additional annual retainer of $10,000. All directors continue to be entitled to reimbursement of their reasonable out-of-pocket expenses for attendance at board and committee meetings and non-employee directors also continue to be entitled to elect to participate in the Company’s health insurance program with coverage provided for the director and his or her dependents and with the cost thereof paid by the Company. During the last fiscal year, Ms. Gibson and Ms. Atkins participated in this health insurance program.

 

Stock Options and Restricted Stock.  As a result of an amendment and restatement of the Company’s 2002 Omnibus Stock and Incentive Plan approved at the Company’s 2008 Annual Meeting, the Company’s non-employee directors no longer receive automatic awards of stock options under such plan. Instead, the Board has the discretion to make equity awards to non-employee directors. In particular, at the time the amended and restated plan was adopted, it was anticipated that each year around the time of the Annual Meeting of stockholders, beginning with the 2008 Annual Meeting, but at the discretion of the Board, each continuing non-employee director would be awarded a determined number of shares of restricted stock that would vest one year following the grant date. On June 26, 2008, Ms. Gibson, Ms. Atkins, Mr. Burden, Mr. Roeder, Mr. Walker, Mr. Mahoney and Mr. Dyer each received grants of 10,000 shares of restricted stock under the Company’s Amended and Restated 2002 Omnibus Stock and Incentive Plan for their service as directors. Each such restricted stock grant vests 100% on June 26, 2009.

 

Under the current compensation arrangements, the Company’s current non-employee directors, Ms. Gibson, Ms. Atkins, Mr. Burden, Mr. Roeder, Mr. Walker, Mr. Mahoney, and Ms. Weiss may occasionally receive additional option grants or restricted stock awards at the discretion of the Board of Directors under the Company’s Amended and Restated 2002 Omnibus Stock and Incentive Plan.

Non-Employee Director Compensation Table

 

The following table provides information on the compensation for non-employee directors for the fiscal year ended January 31, 2009.

 

 

 

 

The Board of Directors is proposing that the Company’s Amended and Restated Articles of Incorporation be amended to require majority voting in uncontested director elections.

 

The Company’s Amended and Restated Articles of Incorporation do not currently provide any special rule regarding votes for the election of directors of the Company. Accordingly, pursuant to the applicable provisions of the Florida Business Corporation Act, the Company’s directors are elected by a plurality of the votes cast by the shares entitled to vote in the election at a meeting at which a quorum is present, even if that plurality constitutes less than a majority. In practice, our stockholders have consistently provided strong support for our nominees, with all nominees for director during the past five years receiving more than a majority of the shares voted and almost every nominee for director during the past five years receiving an affirmative vote greater than 90% of the shares voted. Despite this historical support, we understand the interest of stockholders in majority voting for the election of directors.

 

During the past year, certain of our stockholders, including Spotlight, have requested that we consider adopting a majority voting standard for the election of directors. The Corporate Governance and Nominating Committee carefully evaluated the majority voting issue and the current statutory requirements. Based on input from that Committee, the Board agreed to recommend that the stockholders approve an amendment to the Company’s Amended and Restated Articles of Incorporation that would implement a majority voting standard in uncontested director elections, which could not be amended without further stockholder approval. In particular, by unanimous written consent effective March 10, 2009, the Board approved, and recommends that stockholders approve, Articles of Amendment to the Amended and Restated Articles of Incorporation of the Company to provide that (i) where an election is uncontested, each director shall be elected if the number of votes “FOR” a nominee exceed the votes cast “AGAINST” a nominee, with abstentions and non-votes not counting and (ii) where an election is contested, the nominees receiving the greatest number of votes “FOR” their election, up to the number of directors to be elected, shall be elected. For these purposes, an election is considered “contested” if (i) the Secretary of the Company has received a notice that a stockholder has nominated a person for election to the Board in compliance with the advance notice requirements for stockholder nominees for directors and (ii) such nomination has not been withdrawn by such stockholder on or prior to the tenth (10th) business day preceding the date the Company first mails its notice of meeting to the stockholders.

If approved by the Company’s stockholders, the proposed amendments to the Amended and Restated Articles will be filed with the Department of State of the State of Florida such that thereafter, in an election that is uncontested, a nominee who is not an incumbent director and who receives a greater number of “against” votes than “for” votes will not be elected to the Board. However, under Florida law, incumbent directors who receive a greater number of “against” votes than “for” votes would still remain in office until their successors are elected and qualified under the so-called “holdover rule.” In order to address the statutory “holdover rule,” if the Company’s stockholders approve this amendment to the Company’s Amended and Restated Articles and after the amendment is filed with the Florida Department of State, the Board will amend our Corporate Governance Guidelines to state that an incumbent director who receives a greater number of “against” votes than “for” votes will be expected to offer to resign from the Board. After the director submits his or her offer to resign, the Corporate Governance and Nominating Committee will evaluate the circumstances and make a recommendation to the full Board. The Board will determine whether or not to accept the director’s offer to resign and publicly disclose the outcome of this process within 90 days after the certification of the vote. If the Board accepts a director’s resignation, the Board would be able to fill the vacancy resulting from the resignation or decrease the size of the Board. The Board would likewise be able to fill a vacant position or decrease the size of the Board if a nominee who is not an incumbent director fails to receive a majority vote in an uncontested election. The Board will also amend our Corporate Governance Guidelines to state an expectation that any director who fails to offer to resign in these circumstances will not be re-nominated for an additional term.

 

If the Company’s stockholders approve this amendment to the Company’s Amended and Restated Articles and once the amendment is filed with the Florida Department of State, the majority voting standard would then apply to uncontested elections of directors beginning with the 2010 Annual Meeting of stockholders. In addition, if this amendment is so approved and filed, future Annual Meeting proxy cards relating to uncontested elections will be modified so that stockholders will be able to vote “for” or “against”, or to “abstain” from voting with respect to each nominee. Currently, the proxy card allows stockholders either to vote “for’’ a nominee or to “withhold” voting for a nominee.

 

If the Company’s stockholders do not approve the proposed amendment, directors will continue to be elected by plurality vote in both contested and uncontested elections.

 

If this proposal is approved, effective upon filing of the proposed amendment with the Florida Department of State, Section 7 of Article VI of the Company’s Amended and Restated Articles of Incorporation will be deleted in its entirety, and in its place new Sections 7 and 8 of Article VI of the Company’s Amended and Restated Articles of Incorporation will be substituted. A copy of the as amended version of Article VI of the Company’s Amended and Restated Articles of Incorporation, marked to show the effect of the proposed amendment recommended by the Board for approval by the stockholders, is set forth in Appendix A, and this discussion is qualified in its entirety by reference to Appendix A.

 

Recommendation and Required Vote

 

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE ARTICLES OF AMENDMENT TO THE AMENDED AND RESTATED ARTICLES OF INCORPORATION OF CHICO’S FAS, INC. In accordance with the current provisions of our Amended and Restated Articles of Incorporation, the Articles of Amendment will be approved and ratified if at least sixty-six and two thirds percent (662/3%) of the issued and outstanding common stock of the Company are voted “FOR” approval of the Articles of Amendment. Abstentions and broker non-votes will have the same effect as a vote against the proposal.

 

Based on the recommendation of the Company’s Audit Committee, the Company has selected Ernst & Young LLP (“E&Y”) as its independent certified public accountants for the current fiscal year ending January 30, 2010 (fiscal 2009), subject to ratification of such appointment by the stockholders. Ratification of the Company’s independent certified public accountants is not required by the Company’s By-Laws or otherwise, but the Board of Directors has decided to seek such ratification as a matter of good corporate practice. E&Y has audited the accounts of the Company since first being engaged by the Company effective July 1, 2002. Representatives of E&Y are expected to be present at the Annual Meeting. They will have the opportunity to make a statement if they desire to do so and are expected to be available to respond to appropriate questions by stockholders.

 

We have been advised by E&Y that neither the firm, nor any member of the firm, has any financial interest, direct or indirect, in any capacity in the Company or its subsidiaries.

 

The persons named in the enclosed form of proxy intend, unless otherwise directed, to vote such proxy “FOR” ratification of the appointment of Ernst & Young LLP as independent certified public accountants for the period specified. If the stockholders do not ratify this appointment, other certified public accountants will be considered by the directors upon recommendations of the Audit Committee.

 

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE RATIFICATION OF APPOINTMENT OF ERNST & YOUNG LLP AS OUR INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS FOR THE PERIOD SPECIFIED. The appointment will be ratified if the number of votes cast “FOR” ratification of the appointment by holders entitled to vote exceeds the number of votes cast opposing the ratification of the appointment.

 

The following table presents fees for professional services rendered by E&Y for the audit of the Company’s annual financial statements for fiscal 2008 (ended January 31, 2009) and fiscal 2007 (ended February 2, 2008) and fees billed for audit-related services, tax services and all other services rendered by E&Y for fiscal 2008 and fiscal 2007.

 

 

Audit Fees

 

Fees for audit services include fees associated with the annual audits, the reviews of the Company’s quarterly reports on Form 10-Q and other SEC filings and audit consultations and the Sarbanes-Oxley Section 404 attestation.

Audit-Related Fees

 

Fees for audit-related services in fiscal 2008 principally related to review of documentation for internal controls related to the Company’s enterprise resource planning software. For fiscal 2007, such fees principally related to a review of the Company’s purchase price allocation related to the acquisition of its remaining franchise operations and to the Company’s adoption of FIN 48.

 

Tax Fees

 

Fees for tax services in fiscal 2008 principally related to the review of the Company’s federal and certain state income tax returns, tax compliance, tax advice and tax audit assistance. Fees for tax services in fiscal 2007 principally related to transfer pricing services and the review of the Company’s federal and certain state income tax returns

 

All audit-related services, tax services and other services in fiscal 2008 were pre-approved by the Audit Committee, which concluded that the provision of such services by E&Y was compatible with the maintenance of that firm’s independence in the conduct of its auditing functions. The Audit Committee’s outside auditor independence policy provides for pre-approval of audit, audit-related and tax services specifically described by the Audit Committee on an annual basis and, in addition, individual engagements anticipated to exceed pre-established thresholds must be separately approved. The policy authorizes the Committee to delegate to one or more of its members pre-approval authority with respect to permitted services.

 

The following report of the Audit Committee does not constitute soliciting material and should not be deemed filed or incorporated by reference into any other Company filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent the Company specifically incorporates this report by reference therein.

 

The Audit Committee consists of three directors and operates under a written charter adopted by the Board of Directors. This Committee’s charter is available at the Company’s investor relations website (www.chicosfas.com) by clicking on “Corporate Governance.” The current members of this Committee are David F. Walker (Chair), Ross E. Roeder, and John J. Mahoney. Each member of the Committee is independent, in the judgment of the Company’s Board of Directors, as required by the listing standards of The New York Stock Exchange and as set forth in the Company’s Corporate Governance Guidelines. This Committee is responsible for selecting, engaging and negotiating fee arrangements with the Company’s independent certified public accountants (the independent accountants) with input from the Company’s Board and management. Management is responsible for the Company’s internal controls and the financial reporting process. The independent accountants are responsible for performing an audit of internal control over financial reporting that is integrated with an audit of the Company’s consolidated financial statements in accordance with auditing standards of the Public Company Accounting Oversight Board in the United States, and for expressing opinions thereon. This Committee’s responsibility is to monitor and oversee these processes. In this context, this Committee has met and held discussions with management, the internal auditors and the independent accountants.

 

The Sarbanes-Oxley Act of 2002 and regulations issued thereunder added a number of provisions to federal law to strengthen the authority of, and increase the responsibility of, corporate audit committees. Related rules concerning audit committee structure, membership, authority and responsibility have been promulgated by The New York Stock Exchange.

The members of this Committee are not professional accountants or auditors, and their functions are not intended to duplicate or to certify the activities of management or the independent accountants, nor can this Committee certify that the independent accountants are “independent” under applicable rules. This Committee serves a board-level oversight role, in which it provides advice, counsel and direction to management, internal auditors, and the independent accountants on the basis of several factors, including the information it receives, discussions with management, internal auditors, and the independent accountants, and the experience of this Committee’s members in business, financial and accounting matters.

 

As part of its oversight of the Company’s financial statements, this Committee reviews and discusses with both management and the Company’s independent accountants all annual and quarterly financial statements prior to their issuance. This Committee reviewed and discussed the audited consolidated financial statements of the Company as of and for the year ended January 31, 2009 (fiscal 2008), with management, the internal auditor and the Company’s independent accountants. With respect to fiscal 2008, management advised the Audit Committee that each set of the Company’s consolidated financial statements reviewed had been prepared in accordance with accounting principles generally accepted in the United States, and reviewed significant accounting and disclosure issues with this Committee. Discussions regarding the Company’s audited financial statements included the independent accountants’ judgments about the quality, not just the acceptability, of the Company’s accounting principles and underlying estimates used in the Company’s financial statements, as well as other matters, as required by Statement on Auditing Standards (SAS) 114 (The Auditor’s Communication With Those Charged With Governance) and by the Audit Committee’s charter. The Committee annually assesses the independent accountant’s independence. To that end, the Company’s independent accountants provided the Committee the written disclosures and the letter required by applicable requirements of the Public Company Accounting Oversight Board for independent auditor communications with Audit Committees concerning its independence.

 

In addition, this Committee reviewed key initiatives and programs aimed at strengthening the effectiveness of the Company’s internal and disclosure control structure. As part of this process, this Committee continued to monitor the scope and adequacy of the Company’s internal auditing program, reviewing staffing levels and steps taken to implement recommended improvements in internal procedures and control.

 

Based upon the Audit Committee’s discussion with management, the internal auditor, and the independent accountants, this Committee’s review of the representations of management, and the report of the independent accountants to this Committee, and subject to the limitations on the role and responsibilities of this Committee described above and in the Committee’s charter, this Committee recommended that the Board of Directors approve the inclusion of the Company’s audited consolidated financial statements in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission as of and for the fiscal year ended January 31, 2009.

 

MEMBERS OF THE AUDIT COMMITTEE

 

David F. Walker, Chair
Ross E. Roeder
John J. Mahoney

 

The following table sets forth certain information regarding the Company’s current executive officers.

 

 

*    Became an executive officer in January 2009; first elected a director in 2007

**   Joined the Company in February 2009

 

Non-Director Executive Officers

 

Donna M. Colaco is Brand President-White House | Black Market for the Company, having joined the Company in August 2007. Ms. Colaco has over 25 years of experience in women’s specialty apparel. Prior to joining the Company, Ms. Colaco worked for Ann Taylor Corporation for more than 10 years in numerous capacities including, most recently serving as President of Ann Taylor LOFT. Prior to Ann Taylor, Ms. Colaco worked for the Lerner New York Division of Limited, Inc. and Petrie Stores Corporation.

 

Cynthia S. Murray is Brand President-Chico’s for the Company, having recently joined the Company in February 2009. Ms. Murray has nearly 30 years of experience in retail. Prior to joining the Company, Ms. Murray spent the previous five years with Stage Stores, Inc., most recently serving as its Executive Vice President and Chief Merchandising Officer. Prior to Stage Stores, Ms. Murray worked for Talbot’s, Saks Fifth Avenue / Saks Off 5th, and Charming Shoppes, among other retailers.

 

Charles L. Nesbit, Jr. is Brand President-Soma, having been appointed to that position in March 2009. Mr. Nesbit has been with the Company since August 2004, when he was hired as Senior Vice President-Strategic Planning and Business Development. He was promoted to Executive Vice President-Operations in April 2005 and to the additional title of Chief Operating Officer in August 2005. As part of a management realignment and in an effort to provide greater focus and oversight for the Soma brand and to take greater advantage of Mr. Nesbit’s expertise with respect to intimate apparel operations, Mr. Nesbit

was appointed as Brand President-Soma and resigned his positions as Executive Vice President-Operations and Chief Operating Officer in February 2009. Prior to joining the Company, Mr. Nesbit spent twenty years at the Sara Lee Corporation where he most recently served as a corporate vice president and Chief Supply Chain Officer for the corporation’s U.S. and Canada apparel operations. He served as President and Chief Executive Officer of Sara Lee Intimate Apparel, the largest intimate apparel company in the United States and Canada, from 1999 to 2003, and President and Chief Executive Officer of the Bali Company from 1996 to 1999.

 

Manuel O. Jessup is Executive Vice President-Chief Human Resources Officer of the Company, having been promoted to that position in September 2007. Mr. Jessup joined the Company in September 2006 as Senior Vice President of Human Resources. Mr. Jessup was previously employed by Sara Lee Branded Apparel where he most recently served as Corporate Vice President, Human Resources. During his 21 year career at Sara Lee, he also served as Global Vice President, Human Resources, Sara Lee Branded Apparel, Latin America and Asia, as well as Vice President, Human Resources, Sara Lee Hosiery. Prior to joining Sara Lee, Mr. Jessup held human resources management positions at Levi Strauss and J.P. Stevens.

 

Jeffrey A. Jones is Executive Vice President-Chief Operating Officer of the Company, having recently joined the Company in February 2009. Prior to joining the Company, Mr. Jones was Executive Vice President of Merchandise Operations for Sears, Roebuck and Co. from 2003 to 2006. From 2000 through 2002, Mr. Jones served as Chief Operating Officer for Lands’ End, which was acquired by Sears in 2003. Prior to joining Lands’ End, Mr. Jones spent seven years with Shopko Stores, Inc., and its subsidiary, Provantage Health Services, Inc. Mr. Jones had previously spent 11 years with Arthur Andersen & Co.

 

Gary A. King is Executive Vice President-Chief Information Officer for the Company. Mr. King joined the Company in October 2004 after five years at Barnes & Noble, Inc., where he most recently served as Vice President, Chief Information Officer. From 1988 to 1999, Mr. King held various positions with Avon Products, Inc. including Vice President, Global Information Technology. From 1982 to 1987, Mr. King held various system management positions with Unisys Corporation and Burroughs Corporation.

 

Kent A. Kleeberger is Executive Vice President-Finance, Chief Financial Officer and Treasurer, having joined the Company in November 2007. From 2004 through October 2007, Mr. Kleeberger was the Senior Vice President-Chief Financial Officer for Dollar Tree Stores, Inc. From 1998 to 2004, he served in numerous capacities for Too Inc., now known as Tween Brands, Inc., culminating in his appointment as Executive Vice President, Chief Operating Officer, Chief Financial Officer, Secretary and Treasurer. Prior to that, Mr. Kleeberger served in various financial positions with The Limited, Inc. Mr. Kleeberger also serves on the Board of Directors of Shoe Carnival, Inc.

 

Mori C. MacKenzie is Executive Vice President-Chief Stores Officer for the Company. Ms. MacKenzie has been with the Company since October 1995, when she was hired as the Director of Stores. From June 1999 until October 2001, she served as Vice President-Director of Stores. In October 2001, Ms. MacKenzie was promoted to Senior Vice President-Stores, and effective February 2004 she was promoted to the position of Executive Vice President-Chief Stores Officer. From January 1995 until October 1995, Ms. MacKenzie was the Vice President of Store Operations for Canadians Corporation. From August 1994 until December 1994, she was the Vice President of Store Development for Goody’s Family Clothing. From April 1992 until August 1994, Ms. MacKenzie was the Vice President of Stores for United Retail Group (“URG”) and from August 1991 until April 1992 she was employed by Conston Corporation, a predecessor of URG. In addition, Ms. MacKenzie was Vice President-Stores for

Park Lane from November 1987 until July 1991, and was Regional Director of Stores for the Limited, Inc. from June 1976 until October 1987.

 

A. Alexander Rhodes is Senior Vice President-General Counsel and Secretary for the Company. Mr. Rhodes joined the Company in January 2003 as its Intellectual Property Counsel, expanding his oversight of legal matters for the Company into several other areas until October 2004, when he was promoted to Vice President-Corporate Counsel and Secretary. In April 2006, Mr. Rhodes was promoted to Senior Vice President-General Counsel and Secretary. Mr. Rhodes graduated from the Stetson University College of Law in 1994. From 1997 through December 2002, Mr. Rhodes practiced law with the Annis Mitchell Cockey Edwards & Roehn and Carlton Fields law firms working primarily in the areas of commercial litigation and intellectual property.

 

None of the executive officers or directors who currently serve or who served in such capacities during fiscal 2008 are related to one another. There are no arrangements or understandings pursuant to which any executive officer was elected to office. Executive officers are elected by and serve at the discretion of the Board of Directors.

 

The following report of the Compensation and Benefits Committee does not constitute soliciting material and should not be deemed filed or incorporated by reference into any other Company filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent the Company specifically incorporates this report by reference therein.

 

The Compensation and Benefits Committee (the “Committee”) evaluates and establishes compensation for executive officers and oversees the deferred compensation plan, the Company’s management stock plans, and other management incentive, benefit and perquisite programs. Management has the primary responsibility for the Company’s financial statements and reporting process, including the disclosure of executive compensation. With this in mind, the Committee has reviewed and discussed with management the Compensation Discussion and Analysis found on pages 31-44 of this proxy statement. The Committee is satisfied that the Compensation Discussion and Analysis fairly and completely represents the philosophy, intent, and actions of the Committee with regard to executive compensation. We recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement for filing with the Securities and Exchange Commission.

 

MEMBERS OF THE COMPENSATION
AND BENEFITS COMMITTEE

 

John J. Mahoney, Chair

Betsy S. Atkins

Andrea M. Weiss

 

Overview of Compensation Philosophy and Objectives

 

In a highly competitive business such as ours and especially in these challenging economic times, it is essential that our executive compensation program is designed to help us attract, motivate, and retain highly skilled executive officers who are able to drive long term, sustainable, and profitable growth for our Company. Ultimately, the goal of our executive compensation program is the same as our goal for the Company – to increase stockholder value over the long term. To this end, we have implemented a compensation program designed to reward our executive officers for entrepreneurial activity that increases stockholder value through sustained financial performance and outstanding leadership that reflects our values and unique culture.

 

The Company’s Compensation and Benefits Committee (the “Committee”) is responsible for monitoring adherence with our compensation philosophy and reviewing and approving the annual compensation, compensation procedures and compensation plans and programs for our officers, including the Named Executive Officers (“NEOs”). For fiscal 2008, our NEOs are David F. Dyer, Chief Executive Officer¹, Kent A. Kleeberger, Chief Financial Officer, Charles L. Nesbit, Jr., Chief Operating Officer², Donna M. Colaco, Brand President – White House | Black Market, and Mori C. MacKenzie, Chief Stores Officer. Under SEC rules, we are also required to include as NEOs Scott A. Edmonds, former Chief Executive Officer, and Michele M. Cloutier, former Brand President – Chico’s.

 

The Company bases its executive compensation programs and decisions on the same objectives that guide the Company in establishing all of its compensation programs:

 

 

 

 ¹ Mr. Dyer became CEO on January 7, 2009.

 ² Mr. Nesbit’s title changed to Brand President – Soma in early fiscal 2009.

 

 

Role of the Committee and the Executive Officers in Compensation Decisions

 

The Committee, in consultation with its external compensation consultant, reviews, evaluates, and determines the various components of the compensation for the CEO including establishing his base salary, the terms under which his cash incentive bonuses are paid, and determining the extent to which he receives stock-based compensation awards. The Chief Human Resources Officer (“CHRO”) may assist the Committee with gathering relevant data, but he does not participate in recommending or setting the CEO’s compensation. The Committee then recommends a compensation package for the CEO to the Board for its review, input, and approval.

 

The Committee also determines the amount and terms of the cash-based and stock-based compensation awards for the other executive and non-executive officers, taking into account recommendations on individual compensation levels and performance evaluation input from the CEO and CHRO. The CEO and CHRO have limited authority to make changes and adjustments to cash based compensation, with the expectation that any adjustments would be in keeping with our overall compensation philosophy. No other NEO had an active role in the evaluation, design, or administration of the 2008 executive officer compensation program. Each NEO, however, provided input to the CEO and CHRO on individual compensation levels for the NEO’s direct reports.

 

Setting Executive Compensation – Benchmarking and Use of Compensation Experts

 

In 2007, the Committee engaged Frederic W. Cook & Co., Inc. (“Cook”), as its independent compensation consultant, to provide us with relevant market and benchmarking data and strategic alternatives to consider when making compensation decisions and recommendations for our executive officers for fiscal 2008. During this time, Cook provided only compensation consulting services to the Committee. Cook does no work for management unless requested by the Committee Chair, receives no compensation from the Company other than for its work advising the Committee, and maintains no other economic relationship with the Company. In addition, our human resources department includes associates with significant compensation experience who provide the CHRO and the Committee with additional support, data, and analysis.

 

In making compensation decisions, the Committee reviews all compensation components for the NEOs taking into account a tally sheet showing overall compensation for each NEO. The Committee also compares each element of total compensation against a peer group of publicly-traded specialty retailers (the “Compensation Peer Group”). The Compensation Peer Group, which is periodically reviewed and updated, consists of U.S. based publicly traded retailers of generally similar size and

scope to us and against which the Company competes for talent and for stockholder investment. The companies currently comprising the Compensation Peer Group are:

 

 

In fiscal 2008, we generally tried to target base salaries at the 50th percentile of the Compensation Peer Group. Previously, we targeted base salaries between the 50th and 75th percentiles. We made this change because we believe it is more in line with our philosophy that increasing proportions of executive compensation should be tied to the Company’s performance. Although no base salaries were reduced as a result of this change, we expect base salaries will reach this target over time. We also tried to set total compensation, where performance targets are achieved, at or near the 75th percentile of the Compensation Peer Group. Variations to this target positioning may occur as dictated by the experience level of the individual and by other market factors. This target competitive positioning takes into account our expectations and desires that, over the long term, we will be able to generate stockholder returns in excess of the average of our peer group.

 

Principal Components of Executive Compensation

 

The principal components of our executive compensation program are:

 

 

Mix of Compensation Components

 

Executive compensation is designed to help emphasize executive performance measures that correlate closely with the achievement of our shorter-term performance objectives as well as our longer-term focus on increasing stockholder value, consistent with our overriding compensation objectives and philosophy. To this end, a substantial portion of the annual and long-term compensation for our NEOs is at-risk. We define at-risk compensation to include potential bonus payments under our executive bonus plan and the targeted economic value of equity awards.

There is no pre-established policy or target for the allocation between either cash and non-cash incentive compensation or short-term and long-term incentive compensation. Rather, the Committee reviews information provided by consultants, surveys, and other information considered relevant that is available to it to determine the appropriate level and mix of incentive compensation for each executive officer. However, the portion of the compensation that is at-risk increases commensurate with the executive’s position within the Company. This approach is designed to provide more upside potential and downside risk for those with more senior positions because we believe that the more senior executive officers tend to have greater influence on our performance as a whole. The following chart describes the percent of target pay at risk for our NEOs in 2008:

 

 

Mr. Dyer had no pay “at risk” as a NEO in fiscal 2008 because he assumed the CEO role just before the end of the fiscal year.

 

Components of Compensation

 

Base Salaries

 

We provide our NEOs and other employees with base salaries to compensate them for services rendered during the fiscal year. Base salary ranges for our NEOs are determined based on each executive’s position, level of responsibility and accountability, experience, and performance, and by using market data. As previously stated, in fiscal 2008, we targeted base salaries at the 50th percentile of the relevant market. We may set a base salary above the 50th percentile when necessary to attract or retain key executives.

 

During its review of base salaries for our executives, the Committee primarily considers:

 

 

The Committee reviews the base salaries of our NEOs on an annual basis as well as at the time of any promotion or other material change in responsibilities.

 

Because of our financial performance in fiscal 2008, no NEO and no other officer received an annual increase in his or her base salary from fiscal 2008 to fiscal 2009. The Company will consider promotional or equity based increases during fiscal 2009, where appropriate.

Annual Cash Incentive Bonuses

 

An important component of an executive officer’s potential total cash compensation consists of an incentive bonus, which is intended to make a significant portion of the executive’s compensation dependent on our performance and to provide executive officers with incentives to achieve our near and long-term goals, increase stockholder value, and work as a team in meeting goals and overcoming challenges.

 

In 2008, bonuses were generally determined pursuant to our Cash Bonus Incentive Plan (the “Bonus Plan”). The performance measures in the Bonus Plan were primarily designed to stimulate growth in sales and operating and merchandise margins, improve return on invested capital, and grow earnings per share. These performance criteria and the weighting of a minimum of 3 metrics for each eligible officer are intended to motivate and reward officers for continued financial improvement for the Company, consistent with increasing stockholder value. In addition, achievement of the fiscal 2008 targets required an improvement in our operating results over our fiscal 2007 results, which we believed would increase stockholder value if met. Moreover, the bonus measures for the CEO and CFO were a combination of the measures noted above and were no longer entirely based on growth in earnings per share as in prior years. For 2008, the Committee reviewed and approved the performance measures for each executive.

 

Under the Bonus Plan, each eligible associate has an assigned target bonus, expressed as a percentage of his or her base salary, generally ranging from 20% to 100% of base salary, depending on the participant’s position. The actual bonus awards can range from 0% to 175% of target, depending on the Company’s actual financial performance.

 

Thus, if the Company failed to achieve any of the minimum performance measures applicable to a particular executive, then no performance based bonuses would be awarded to that particular executive and if the Company achieved certain of the minimum performance measures applicable to a particular executive but failed to achieve others, then only a portion of the performance based bonus would be awarded. On the other hand, if the Company’s performance exceeds all or a portion of the performance measures, then the executive may receive more than the targeted bonus, up to the maximum amount. Under the Bonus Plan, bonuses based on the performance criteria are awarded once, after the end of the fiscal year, except for some positions below the officer level that are paid twice per year and are tied to seasonal financial plans.

 

The bonus measures, target financial performance, target payout, and actual payouts for fiscal 2008 for each respective NEO are set forth below.

 

 

(1)  EPS means earnings per share. ROIC means return on invested capital. Comp store sales means sales from stores that were open for at least one year.

 

 

(3)  ROIC was a new metric in fiscal 2008. As a result, we report the actual target and not a comparison to the prior year.

 

Mr. Dyer did not participate in the 2008 Bonus Plan because he assumed the CEO role just before the end of the fiscal year. Mr. Nesbit’s earned bonus was based entirely on the performance of the Soma brand, which exceeded the brand sales and brand contribution targets.

 

Bonus targets were based on job responsibilities, internal relativity, and peer group data. The Company’s objective was to set bonus targets such that total annual cash compensation was within the broad upper middle range of peer group companies and a substantial portion of that compensation was linked to Company performance.

 

The bonuses paid for fiscal 2008 pursuant to the Plan appear in the Summary Compensation Table under the “Non-Equity Incentive Plan Compensation” column. Satisfactory individual performance is a condition to payment. At the end of the performance period, the Committee has the option to award a discretionary bonus to reward individual productivity improvements even in the face of weaker overall Company performance. Because of our financial performance in fiscal 2008, however, the Company did not award any discretionary bonus to any Company associate.

In fiscal 2008, the earned bonuses paid to all participants under the bonus plan were only approximately 10% of target. Overall, participants were awarded a total of approximately $1,283,495 in incentive bonuses for the 2008 fiscal year.

 

In February 2009, the Committee approved a revised Bonus Plan substantially similar to the 2008 Bonus Plan. The only change to the Bonus Plan was replacing the return on invested capital (“ROIC”) metric in its entirety with return on net assets (“RONA”). RONA is an indicator of how profitable a company is relative to its total assets; the higher the return, the better the profit performance for the Company. The Company believes that RONA is a more appropriate metric than ROIC and more properly aligns the organization with its stockholders because it considers the assets the Company uses to achieve its results, reminds Company associates that there is a cost to obtaining and holding assets, and helps to drive free cash flow, all of which help to improve the Company’s profitability. Otherwise, all other measures and weightings remained the same.

 

Sign On and “Guaranteed” Bonuses

 

The Company will, as necessary, pay sign on and first year guaranteed bonuses in order to attract the management talent necessary to drive long term and sustainable growth. Executives we recruit from other companies are often required to give up a significant amount of compensation, in the form of lost bonus opportunities or unvested equity. Sign on and first year guaranteed bonuses are a necessary and effective means of offsetting the losses an officer will incur when he or she leaves his or her former employer. In those instances in which we have provided an officer with a sign on bonus, we generally require the newly hired officer to pay back a pro rata portion of the sign on bonus if they voluntarily leave the Company within a year after joining us. Sign on and guaranteed bonuses paid to NEOs in fiscal 2008 are listed in the chart on page 45 under the “Bonus” column.

 

Clawback Agreements

 

In fiscal 2008, the Company entered into “Clawback” Agreements with the CEO, CFO, and Chief Accounting Officer. Under these Agreements, each executive is required to reimburse the Company for incentive compensation previously paid to the executive under any of the Company’s executive bonus programs if within two years from the date of payment of such incentive compensation, the Company is required to prepare an accounting restatement due to material noncompliance of the Company with any then applicable financial reporting requirement under the securities laws as a result of misconduct by the executive and/or gross negligence by the executive in failing to prevent the misconduct or if the executive is otherwise subject to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002. The Committee believes that the officers who certify the Company’s financial reporting should not be unjustly enriched in the event of a restatement.

 

Long-Term Incentive Stock-Based Compensation

 

We believe that meaningful equity participation by each executive officer is one of the primary motivating factors that will result in significant long term and sustained increases in value and growth. This belief is reflected in our officer and director stock ownership guidelines and well as the aggregate awards of stock options and restricted stock that we have made to our executive officers. The stock ownership guidelines are described on page 42 and are available on the Company’s website at www.chicosfas.com.

 

We believe that providing executive officers stock-based compensation is the most effective way to align their interests with those of our stockholders. Stock options and restricted stock provide an incentive, beginning immediately upon grant, to executive officers to manage the Company from the perspective of an owner with an equity interest in the business. In addition, stock-based compensation has

been and continues to be a key part of our program for motivating and rewarding key employees over the long term. Multi-year vesting of equity compensation provides a strong retention mechanism for key executive talent, which is critical to our long-term success. We intend to continue to have stock-based compensation serve as an important part of the compensation program for key employees.

 

The Committee, in consultation with its outside compensation consultant, determines the stock-based compensation for the CEO. The Committee, upon the recommendation by the CEO and the CHRO, also makes final decisions regarding stock-based awards for all other officers. Factors such as performance and responsibilities of individual officers and the management team as a whole, as well as general industry practices, play an integral role in the determination of the number of stock options, number of shares of restricted stock and/or number of restricted stock units awarded to a particular recipient. In determining the size of the individual stock-based awards, the Committee also considers the amount of stock-based awards outstanding and previously granted, the amount of stock-based awards remaining available for grant under its Omnibus Stock and Incentive Plan, as amended and restated, the aggregate amount of current awards, and the amount of awards believed necessary to attract and retain qualified management. All stock-based awards vest over time as a means to encourage the recipient to remain in service with us.

 

Stock Options

 

Substantially all stock options granted to key employees have a ten-year term and vest in equal annual installments over a period of three years from the date of grant. Stock option award levels are determined based on external market data and internal fairness considerations and vary among participants based on their positions within the Company. The option exercise price is the closing price on the date of grant. We grant stock options as an incentive for our executives to create stockholder value by encouraging a culture of ownership at the Company. For an executive to receive value from a stock option, the stock price must increase from the time of grant to the time of exercise.

 

We have not re-priced or replaced options in response to declining stock prices.

 

Restricted Stock and Restricted Stock Units

 

Awards of shares of restricted stock or restricted stock units are granted to key employees based on similar criteria as stock option grants. These whole-share awards generally vest in equal annual amounts over a three-year period from the date of grant, but the Committee will consider other vesting schedules, as appropriate. Restricted stock and awards of restricted stock units encourage executives to not only create stockholder value, but also to preserve value. In other words, restricted stock has both upside potential and downside risk. We believe that whole-share awards such as restricted stock grants provide a balance with stock options and further align the interests of management and stockholders.

 

Granting of Stock Options and Restricted Stock Awards

 

The Committee’s procedure for making equity grants is designed to provide some measure of assurance that grant awards are not being manipulated to result in a price that is unreasonably favorable to the recipients of the grants. Beginning in fiscal 2007, the annual equity grant date for all officers was changed to the date on which the trading window period first opens following the public release of year end earnings. This grant date is generally in late February or early March and is established by us well in advance. Because the Committee does not generally meet on this date, the Committee authorizes the grants at its meeting first preceding the grant date, usually several weeks in advance, specifying an effective prospective grant date consistent with this policy. The exercise price for stock options is

generally the closing price on the specified grant date, but in no event less than such closing date price. This grant date is driven by two principal considerations:

 

 

Similarly, the annual equity grant date for all non-officers, which occurs a little later in the fiscal year, is designed to coincide with our non-officer performance management cycle. Again this allows us to deliver the equity awards close in time to performance appraisals, which increases the impact of the awards by strengthening the link between pay and performance. Because the Committee does not generally meet on this date, the Committee authorizes the grants at its meeting first preceding the grant date, usually several weeks in advance, specifying an effective prospective grant date consistent with this policy. Again, the exercise price for stock options is generally the closing date price on the specified prospective grant date, but in no event less than such closing date.

 

In fiscal 2008, the Committee and the former CEO became increasingly concerned about the adverse effect that the Company’s declining stock price was having on the value of its long-term incentive program. Specifically, the Committee and the former CEO were concerned about the large number of outstanding stock options that were “under water,” meaning that the exercise price was higher than our current share price, and the significant decrease in the grant date value of the Company’s long-term incentive compensation program. Historically, grant guidelines have been set at a fixed number of shares, which were not adjusted for changes in our stock price. As a result, the grant date value of the February 2008 annual grant was approximately 33% of the value of the 2007 annual grant, which, in turn, was approximately 50% lower in value than the 2006 grant. Moreover, the deteriorating macro economic environment and the associated drop in consumer spending, the loss of investor confidence in the retail sector, and the likelihood that an economic rebound may take several years to fully achieve made the Committee and former CEO concerned that the Company’s share price was unlikely to rebound significantly in the near to mid term.

 

The Committee was concerned that the large number of under water options, combined with the significantly lowered grant date value of its long-term incentive compensation program could put the Company at risk of losing many of its key executives to the Company’s competitors. As a result, the Committee requested that Cook review a number of strategic alternatives and provide a recommendation to the Committee to address the Committee’s concerns.

 

After analyzing a number of alternatives, Cook and the former CEO recommended that the Committee consider an accelerated equity grant for all eligible associates, but excluding the CEO, at a level that was large enough to be meaningful to the recipients but still affordable to the Company. After discussing the various alternatives, the Committee decided to award eligible associates, excluding the CEO, with a grant of stock options and restricted stock in November 2008, in lieu of the annual grant in the first quarter of fiscal 2009. Each participant in this “early annual” grant was awarded on November 26, 2008 a number of stock options and restricted shares equal to three times the number of shares outlined in our normal grant guidelines. The stock option exercise price was equal to the closing price on the grant date. All equity granted would vest in equal amounts over a period of three years from the grant date. This accelerated equity grant would replace the 2009 annual grant. The Committee’s decision was later ratified by the entire Board.

Based on the share price on the grant date, the grant date fair value and the corresponding compensation cost of the “early annual” grant for 2009 was less than the February 2008 grant, even though three times the number of shares were awarded. The Committee intends for the next annual grant to be made in 2010.

 

In fiscal 2008, we awarded stock options and restricted shares to our NEOs as follows:

 

 

Mr. Dyer did not receive any equity awards as an officer in fiscal 2008 because he assumed his role as CEO just before the end of the fiscal year. Mr. Dyer did receive restricted stock in fiscal 2008 for his service on the Board as described more fully on page 20.

 

In fiscal 2008, (i) a total of 3,123,550 stock options were granted to our employees and non-employee directors, including 812,500 stock options that were awarded to executive officers and (ii) a total of 1,048,928 shares of restricted stock were awarded to our employees and non-employee directors including 273,108 shares of restricted stock that were awarded to executive officers.

 

Retirement and Welfare Benefits

 

401(k) Plan

 

In 1992, the Company adopted a profit sharing plan to provide a means for all eligible employees at all levels of the Company to share in our profits and accumulate retirement savings. Effective January 1, 1999, we incorporated a 401(k) feature into our profit sharing plan as a further means for all eligible employees at all levels of the Company to accumulate retirement savings. Under the 401(k) aspect of the plan, eligible employees can elect to defer up to 100% of their respective compensation subject to certain statutory limitations and have it contributed to the plan. The Company has elected to match employee contributions at 50% on the first 6% of the employees’ contributions and can elect to make additional contributions over and above the mandatory match, based on the amount it deems appropriate in light of our operating results for any given year. During the fiscal year ended January 31, 2009, our aggregate matching contributions, including both mandatory and additional matching contributions, were approximately $2.3 million, of which approximately $53,000 was contributed for the benefit of our executive officers.

 

Employee Stock Purchase Plan

 

In 2002, the Company adopted a stock purchase plan (replacing our 1993 employee stock purchase plan) to continue to provide all eligible employees at all levels an opportunity to become stockholders of the Company. As an inducement, eligible employees may purchase shares of stock in the Company during each exercise period at a 15% discount to the value of the stock. This plan was amended and restated in 2004 to address certain technical amendments. The executive officers are eligible to participate in this stock purchase plan.

Health and Welfare Benefits

 

Our executive officers are also eligible to participate in the health and dental coverage, life insurance, paid vacation and holiday and other programs that are generally available to all of our employees.

 

Perquisites and Other Benefits

 

We do not provide significant perquisites or personal benefits to executive officers. We do offer to pay for an annual physical examination and offer supplemental disability income insurance for certain officers, including all NEOs. The costs of the annual physical and supplemental disability income insurance are immaterial and we believe the Company benefits from these perquisites. The annual physical helps to mitigate the risk of losing the services of a member of senior management due to otherwise undetected health issues. The Company believes that the financial security provided to executives through the supplemental disability income insurance is a good investment because it provides a useful tool in the retention of top talent. We value perquisites at their incremental cost to us in accordance with SEC regulations, and the NEOs are allowed to reimburse us for such perquisites at their incremental cost to us to the extent that limitations on personal use are exceeded. These amounts, if applicable, are reflected in the Summary Compensation Table below.

 

Deferred Compensation Plan

 

The Company has adopted two unfunded, nonqualified plans that permit executive officers to defer current compensation, on a tax-deferred basis, for long term or retirement savings, one of which relates to deferrals made through December 31, 2004 and related earnings and the other of which relates to deferrals since January 1, 2005 and related earnings. Pursuant to the deferred compensation plans, participants have been allowed to defer all or a portion of their qualifying compensation. Under each plan, a book account is then maintained for each such executive officer in which there is an accounting of the amount of compensation deferred and deemed earnings on those amounts based upon the participant’s selection of various available investment options. The Company has not made any matching funds or other contribution to any participant’s account. In accordance with the terms of each of the plans, the deferral must be placed in a “rabbi” trust. This trust arrangement offers a degree of assurance for ultimate payment of benefits without causing constructive receipt of the deferral or earnings thereon for income tax purposes. The assets in the trust remain subject to the claims of our creditors and are not the property of the executive officer. This provides further incentive to the executive officer to drive future performance.

 

Section 409A of the Internal Revenue Code (the “Code”) imposes restrictions on the funding of, distributions made under, and elections to participate in, nonqualified deferred compensation arrangements. Although we believe that we are operating in compliance with the statutory provisions relating to Section 409A that are currently effective and have made appropriate modifications to the applicable plan, the statute and its regulations are complex and subject to further interpretation and uncertainty. Thus, it is possible that we will have to make additional adjustments to our nonqualified deferred compensation arrangements to comply with the applicable rules as further interpretations are issued.

 

Severance and Change in Control Benefits

 

Certain of the executive officers have employment agreements that provide for severance benefits in connection with certain employment terminations, with separate provisions that would govern a severance associated with a change in control. In particular, these contractual severance benefits are extended to the following current executive officers: David F. Dyer, the Chief Executive Officer; Charles

L. Nesbit, Jr., the Brand President – Soma, and Mori MacKenzie, the Chief Stores Officer. The principal terms of these employment agreements and the related severance benefits are described beginning on page 52 of this proxy statement.

 

In fiscal 2007, the Committee, based on research and experience, concluded that the Company must offer reasonable severance benefits to all officers in order to attract and retain highly skilled management talent. Many other retailers offer comparable severance benefits.

 

As a result, the Company adopted an officer severance plan. This plan, which applied to all officers (other than those officers who had a superseding individual agreement), sets forth the severance benefits for which such officers are eligible upon the occurrence of certain termination of employment events. In fiscal 2008, the Company amended the severance plan to provide for a Vice President Severance Plan and an Executive Severance Plan to recognize the difference in the needs of the Company’s junior and senior officers. Each plan was subsequently amended, in January 2009, to provide for a one-time enhanced benefit, providing for one extra month of severance for those officers who were separated from the Company as part of the Company’s 11% reduction in its headquarters workforce. Once the reduction in workforce was completed, the severance benefits automatically returned to their original levels.

 

The plans are on file with the Securities and Exchange Commission, as required, and their material terms are summarized on page 62 of this proxy statement.

 

In fiscal 2008, the Company entered into a separation agreement with Scott Edmonds. This Agreement is on file with the SEC. In addition, Michele Cloutier became entitled to receive severance under the Executive Severance Plan.

 

Tally Sheets

 

With respect to fiscal 2008 compensation, the Committee utilized a tally sheet of all compensation and maximum potential payouts when approving compensation matters. Through the use of such tally sheets, the Committee reviewed all components of the compensation of our CEO, CFO, and other NEOs, including base salary and annual cash incentive compensation as well as long term equity based incentive compensation and accumulated realized and unrealized equity award gains.

 

Other Matters

 

Share Retention Guidelines; Hedging Prohibition

 

The Company has adopted stock ownership guidelines for all officers and directors, including the NEOs. Compliance with the ownership guidelines are reviewed regularly by the Committee. The current guidelines include: (i) CEO — ownership equal to three times the prior year’s salary; (ii) other covered officers — ownership equal to one to two times prior year’s salary; and (iii) non-employee directors – ownership equal to three times the base annual retainer.

 

Shares counted toward this requirement are based on shares owned outright as well as shares otherwise beneficially owned by such officer or director (as beneficial ownership is defined by the SEC’s rules and regulations) and the value of the gain on vested but unexercised in-the-money options. Unvested restricted shares and unvested options awarded under our stock incentive plan are not counted for these purposes. Officers and directors are not permitted to hedge their economic exposures to the Company stock that they own.

 

Through fiscal 2007, the guidelines provided for a three year period to satisfy the guidelines, either from the date the policy was adopted in October 2005, or the date of appointment to a qualifying position, whichever is later. Because of the number of underwater stock options and the deteriorating

economic environment, the guidelines were amended in fiscal 2008 to eliminate the established timeframes to meet the Guidelines. Officers and directors, however, are required to retain and hold on a net after tax basis at least 25% of shares obtained as a result of a stock option exercise or the vesting of restricted shares until such time as the officer or director is in compliance with the Guidelines.

 

Deductibility of Executive Compensation

 

Section 162(m) of the Internal Revenue Code prohibits publicly held companies, such as us, from deducting certain compensation to any one NEO in excess of $1,000,000 during the tax year. However, Section 162(m) provides that, to the extent that compensation is based on the attainment of performance goals set by the Committee pursuant to plans approved by our stockholders, the compensation is not included for purposes of arriving at the $1,000,000.

 

The Company may seek to qualify executive compensation as tax deductible to the extent feasible and where we believe it is in the best interests of the Company and its stockholders but we have not adopted a policy that all compensation must be deductible. In particular, our annual cash incentive compensation awards currently count against the Section 162(m) limitation on deductible compensation because we have not sought to have our cash incentive bonus plan approved by our stockholders, allowing the Committee to keep flexibility to use judgment to adjust awards (up or down) based on evaluations of individual performance and contribution. Compensation realized from stock options granted under the Amended and Restated Chico’s FAS 2002 Omnibus Stock and Incentive Plan qualifies for the performance-based exemption under Section 162(m), and is, therefore, deductible. Compensation realized from time-based vesting restricted stock grants, however, does not qualify for such an exemption. Thus, to the extent taxable compensation from cash and equity awards in combination with salaries and certain other compensation elements for any NEO exceeds $1,000,000, such compensation will not be deductible. However, we do not anticipate that any significant portion of the applicable compensation for the NEO will exceed the $1,000,000 limit and thus any amount that may not be deductible should be a relatively small portion of the total compensation paid to the NEO.

 

The Company is permitted to and reserves the right to pay other amounts that are not tax deductible to meet the design goals of our executive compensation program. In any event, because of the uncertainties associated with the application and interpretation of Section 162(m) and the regulations issued thereunder, there can be no assurance that compensation intended to satisfy the requirements for deductibility under Section 162(m) will in fact be deductible.

 

Fiscal 2009 Compensation Framework

 

For fiscal 2009, the Company implemented the following changes in compensation arrangements for its executive officers.

 

Because of the Company’s financial performance in fiscal 2008 and the overall state of the economy, no associate received an annual increase in pay, including base pay and bonus target, from fiscal 2008 to fiscal 2009. The Company will, however, consider a pay increase in the event an associate is promoted or an equity adjustment is required.

 

As described more fully on page 37, the Committee made one change to one element of the Company’s Bonus Plan. In evaluating the effectiveness of our fiscal 2008 Bonus Plan, the Committee concluded that the return on invested capital metric in its 2008 Bonus Plan should be replaced with return on net assets (“RONA”) in the 2009 Bonus Plan. Otherwise, all other measures and weightings remained the same.

As described more fully on page 39, the Committee awarded eligible associates, excluding the CEO, additional stock options and restricted stock. This additional award replaces the 2009 annual grant. As a result, there will be no annual equity grant to executives in fiscal 2009.

 

Finally, the Company awarded its new CEO, David Dyer, performance shares of the Company’s stock in 2009. The CEO is eligible to earn from 0 – 133,333 shares, with a target of 100,000 shares, contingent upon the achievement of the RONA goals consistent with the Company’s 2009 Bonus Plan over a one-year period. The exact number of shares earned, if any, is dependent on the level of achievement of the performance measures and goals over the stated period. Any shares earned based on the achievement of such goals will vest three years from the date of grant.

 

The Company also awarded its new CEO 600,000 stock options, 200,000 of which had an exercise price equal to 100% of the closing price of the Company’s stock on the grant date, another 200,000 of which had an exercise price equal to 125% of the closing price of the Company’s stock on the grant date and another 200,000 of which had an exercise price equal to 150% of the closing price of the Company’s stock on the grant date.

 

The performance shares and the stock option grants are in keeping with the Company’s philosophy that executive compensation should be tied to Company performance.

 

Otherwise, all compensation programs are largely unchanged from fiscal 2008.

 

The following table includes information concerning compensation for fiscal years 2006, 2007 and 2008 in reference to the NEOs, which includes the persons who served as the Company’s principal executive officers during fiscal year 2008, the Company’s principal financial officer, the three most highly compensated executive officers of the Company other than the principal executive officers and the principal financial officer and one other person who would have been among the three most highly compensated executive officers but who was not serving as an executive officer at the end of fiscal 2008. A description of the material terms of the employment agreements for each of the NEOs, including a description of potential post employment payments, appears below under the headings “Employment Agreements for Named Executive Officers” and “Potential Payments Upon Termination or Change in Control for Named Executive Officers.”

 

 

 

The following table sets forth certain information with respect to the equity and non-equity awards granted during or for the fiscal year ended January 31, 2009 to each of our executive officers listed in the Summary Compensation Table.