10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarter Ended:	Commission File Number:
October 29, 2016	001-16435

Chico’s FAS, Inc.

(Exact name of registrant as specified in charter)

Florida	59-2389435
(State of Incorporation)	(I.R.S. Employer Identification No.)

11215 Metro Parkway, Fort Myers, Florida 33966

(Address of principal executive offices)

239-277-6200

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ý    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ý    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer, accelerated filer and smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	ý	Accelerated filer	¨
Non-accelerated filer	¨ (do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  ý

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

At November 14, 2016, the registrant had 129,205,515 shares of Common Stock, $0.01 par value per share, outstanding.

1

CHICO’S FAS, INC. AND SUBSIDIARIES

TABLE OF CONTENTS

PART I – Financial Information
Item 1.	Financial Statements:
	Condensed Consolidated Statements of Income (Loss) for the Thirteen Weeks and Thirty-Nine Weeks Ended October 29, 2016 (Unaudited) and October 31, 2015 (Unaudited)	3
	Condensed Consolidated Statements of Comprehensive Income (Loss) for the Thirteen and Thirty-Nine Weeks Ended October 29, 2016 (Unaudited) and October 31, 2015 (Unaudited)	4
	Condensed Consolidated Balance Sheets –October 29, 2016 (Unaudited), January 30, 2016 (Unaudited) and October 31, 2015 (Unaudited)	5
	Condensed Consolidated Statements of Cash Flows for the Thirty-Nine Weeks Ended October 29, 2016 (Unaudited ) and October 31, 2015 (Unaudited)	6
	Notes to Condensed Consolidated Financial Statements (Unaudited)	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	25
Item 4.	Controls and Procedures	25
PART II – Other Information
Item 1.	Legal Proceedings	26
Item 1A.	Risk Factors	27
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 5.	Other Information	29
Item 6.	Exhibits	29
Signatures		30

2

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CHICO’S FAS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(Unaudited)

(In thousands, except per share amounts)

	Thirteen Weeks Ended										Thirty-Nine Weeks Ended
	October 29, 2016					October 31, 2015					October 29, 2016					October 31, 2015
						(as adjusted)										(as adjusted)
	Amount			% of Sales		Amount			% of Sales		Amount			% of Sales		Amount			% of Sales
Net sales	$	596,912		100.0		$	645,433		100.0		$	1,875,621		100.0		$	2,029,025		100.0
Cost of goods sold	366,618			61.4		396,270			61.4		1,142,182			60.9		1,219,543			60.1
Gross margin	230,294			38.6		249,163			38.6		733,439			39.1		809,482			39.9
Selling, general and administrative expenses	188,350			31.6		226,256			35.1		583,117			31.1		661,491			32.6
Goodwill and intangible impairment charges	—			0.0		45,514			7.1		—			0.0		112,455			5.6
Restructuring and strategic charges	10,820			1.8		3,137			0.4		31,027			1.6		34,178			1.6
Income (loss) from operations	31,124			5.2		(25,744		)	(4.0	)	119,295			6.4		1,358			0.1
Interest expense, net	(526		)	(0.1	)	(466		)	(0.1	)	(1,474		)	(0.1	)	(1,421		)	(0.1	)
Income (loss) before income taxes	30,598			5.1		(26,210		)	(4.1	)	117,821			6.3		(63		)	0.0
Income tax provision (benefit)	7,000			1.1		(14,600		)	(2.3	)	40,100			2.2		(23,100		)	(1.1	)
Net income (loss)	$	23,598		4.0		$	(11,610	)	(1.8	)	$	77,721		4.1		$	23,037		1.1
Per share data:
Net income (loss) per common share-basic	$	0.18				$	(0.09	)			$	0.59				$	0.16
Net income (loss) per common and common equivalent share–diluted	$	0.18				$	(0.09	)			$	0.58				$	0.16
Weighted average common shares outstanding–basic	128,753					136,172					129,830					139,386
Weighted average common and common equivalent shares outstanding–diluted	128,996					136,172					129,999					139,724
Dividends declared per share	$	—				$	—				$	0.2400				$	0.2325

The accompanying notes are an integral part of these condensed consolidated statements.

3

CHICO’S FAS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)

(In thousands)

	Thirteen Weeks Ended						Thirty-Nine Weeks Ended
	October 29, 2016			October 31, 2015			October 29, 2016			October 31, 2015
Net income (loss)	$	23,598		$	(11,610	)	$	77,721		$	23,037
Other comprehensive income (loss):
Unrealized (losses) gains on marketable securities, net of taxes	(35		)	12			4			(6		)
Foreign currency translation (losses) gains, net of taxes	(19		)	(31		)	(46		)	90
Comprehensive income (loss)	$	23,544		$	(11,629	)	$	77,679		$	23,121

The accompanying notes are an integral part of these condensed consolidated statements.

4

CHICO’S FAS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands)

	October 29, 2016			January 30, 2016			October 31, 2015
ASSETS
Current Assets:
Cash and cash equivalents	$	80,331		$	89,951		$	91,256
Marketable securities, at fair value	50,411			50,194			47,316
Inventories	261,341			233,834			268,968
Prepaid expenses and other current assets	46,635			45,660			55,149
Income tax receivable	3,402			29,157			16,225
Assets held for sale	18,520			16,525			41,802
Total Current Assets	460,640			465,321			520,716
Property and Equipment, net	495,587			550,953			556,172
Other Assets:
Goodwill	96,774			96,774			96,774
Other intangible assets, net	38,930			38,930			38,930
Other assets, net	18,382			14,074			40,622
Total Other Assets	154,086			149,778			176,326
	$	1,110,313		$	1,166,052		$	1,253,214
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	125,532		$	129,343		$	147,526
Current debt	10,000			10,000			10,000
Other current and deferred liabilities	148,706			158,788			140,557
Liabilities held for sale	—			—			8,478
Total Current Liabilities	284,238			298,131			306,561
Noncurrent Liabilities:
Long-term debt	74,768			82,219			84,702
Deferred liabilities	122,848			130,743			135,390
Deferred taxes	9,320			15,171			20,385
Total Noncurrent Liabilities	206,936			228,133			240,477
Commitments and Contingencies
Stockholders’ Equity:
Preferred stock	—			—			—
Common stock	1,301			1,355			1,394
Additional paid-in capital	445,787			435,881			429,746
Treasury stock, at cost	(366,081		)	(289,813		)	(249,854		)
Retained earnings	538,134			492,325			524,244
Accumulated other comprehensive (loss) income	(2		)	40			646
Total Stockholders’ Equity	619,139			639,788			706,176
	$	1,110,313		$	1,166,052		$	1,253,214

The accompanying notes are an integral part of these condensed consolidated statements.

5

CHICO’S FAS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

	Thirty-Nine Weeks Ended
	October 29, 2016			October 31, 2015
Cash Flows From Operating Activities:
Net income	$	77,721		$	23,037
Adjustments to reconcile net income to net cash provided by operating activities:
Goodwill and intangible impairment charges, pre-tax	—			112,455
Depreciation and amortization	82,585			90,266
Loss on disposal and impairment of property and equipment	6,434			22,609
Deferred tax benefit	(8,098		)	(52,623		)
Stock-based compensation expense	15,483			20,712
Excess tax benefit from stock-based compensation	(322		)	(2,992		)
Deferred rent and lease credits	(14,264		)	(15,018		)
Changes in assets and liabilities:
Inventories	(27,506		)	(44,811		)
Prepaid expenses and accounts receivable	(6,237		)	(12,024		)
Income tax receivable	25,755			(15,629		)
Accounts payable	(3,789		)	7,377
Accrued and other liabilities	(3,391		)	(3,300		)
Net cash provided by operating activities	144,371			130,059
Cash Flows From Investing Activities:
Purchases of marketable securities	(43,266		)	(43,479		)
Proceeds from sale of marketable securities	43,058			122,712
Purchases of property and equipment, net	(35,663		)	(66,595		)
Net cash (used in) provided by investing activities	(35,871		)	12,638
Cash Flows From Financing Activities:
Proceeds from borrowings	—			124,000
Payments on borrowings	(7,500		)	(29,000		)
Proceeds from issuance of common stock	2,363			10,614
Excess tax benefit from stock-based compensation	322			2,992
Dividends paid	(31,936		)	(32,933		)
Repurchase of common stock	(81,324		)	(260,555		)
Net cash used in financing activities	(118,075		)	(184,882		)
Effects of exchange rate changes on cash and cash equivalents	(45		)	90
Net decrease in cash and cash equivalents	(9,620		)	(42,095		)
Cash and Cash Equivalents, Beginning of period	89,951			133,351
Cash and Cash Equivalents, End of period	$	80,331		$	91,256
Supplemental Disclosures of Cash Flow Information:
Cash paid for interest	$	1,713		$	2,112
Cash paid for income taxes, net	$	22,752		$	47,377

The accompanying notes are an integral part of these condensed consolidated statements.

6

Chico’s FAS, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

October 29, 2016

(Unaudited)

Note 1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Chico’s FAS, Inc. and its wholly-owned subsidiaries (collectively, the “Company”) have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and notes required by accounting principles generally accepted in the U.S. (“U.S. GAAP”) for complete financial statements. In the opinion of management, such interim financial statements reflect all normal, recurring adjustments considered necessary to present fairly the condensed consolidated financial position, the results of operations and cash flows for the interim periods presented. All significant intercompany balances and transactions have been eliminated in consolidation. For further information, refer to the consolidated financial statements and notes thereto for the fiscal year ended January 30, 2016, included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 8, 2016.

As used in this report, all references to “we,” “us,” “our,” and “the Company,” refer to Chico’s FAS, Inc. and all of its wholly-owned subsidiaries.

Our fiscal years end on the Saturday closest to January 31 and are designated by the calendar year in which the fiscal year commences. Operating results for the thirteen and thirty-nine weeks ended October 29, 2016 are not necessarily indicative of the results that may be expected for the entire year.

Reclassifications

Reclassifications of certain prior year balances were made in order to conform to the current year presentation.

Change in Accounting Policy

Effective January 31, 2016, the Company made a voluntary change in accounting principle related to our classification of shipping expenses. Historically, we have presented shipping expenses within selling, general and administrative expenses ("SG&A"). Under the new policy, the Company is presenting these expenses within cost of good sold ("COGS") in the unaudited Condensed Consolidated Statements of Income. The Company believes that this change is preferable as the shipping expenses represent direct costs associated with the sale of our merchandise and improves comparability with the Company's peers. The accounting policy change was applied retrospectively to all periods presented. There was no change to consolidated net income, however, cost of sales increased by $8.8 million and SG&A decreased by the same amount for the thirteen weeks ended October 31, 2015. The Company recorded $8.6 million in shipping expense as a component of COGS during the thirteen weeks ended October 29, 2016. For the year-to-date period ended October 31, 2015, cost of sales increased by $27.6 million and SG&A decreased by the same amount. The Company recorded $25.5 million in shipping expense as a component of COGS during the thirty-nine weeks ended October 29, 2016.

Reclassification of Occupancy Expenses and Correction of Immaterial Accounting Error

The Company has changed its classification of store occupancy expenses. Historically, we have presented store occupancy expenses within SG&A. As now reclassified, the Company is presenting these expenses within COGS in the unaudited Condensed Consolidated Statements of Income. The Company believes that the store occupancy expenses represent direct costs associated with the sale of our merchandise and improves comparability with the Company’s peers. This reclassification was applied retrospectively to all periods presented. There was no change to consolidated net income, however, cost of sales increased by $96.8 million and SG&A decreased by the same amount for the thirteen weeks ended October 31, 2015. The Company recorded $95.4 million in store occupancy expenses as a component of COGS during the thirteen weeks ended October 29, 2016. For the year-to-date period ended October 31, 2015, cost of sales increased by $289.3 million and SG&A decreased by the same amount. The Company recorded $287.3 million in store occupancy expenses as a component of COGS during the thirty-nine weeks ended October 29, 2016.

The Company has also elected to correct the historical classification of shipping revenue within SG&A. To correct the immaterial error, we are classifying shipping revenue as a component of net sales within the unaudited Condensed Consolidated Statements of Income for all periods presented. There was no change to consolidated net income, however, net sales increased by $4.2 million and SG&A increased by the same amount for the thirteen weeks ended October 31, 2015. The Company recorded $3.0 million in shipping revenue as a component of net sales during the thirteen weeks ended October 29, 2016. For the year-to-date period ended October 31, 2015, net sales increased by $14.1 million and SG&A increased by the same amount. The Company recorded $9.7 million in shipping revenue as a component of net sales during the thirty-nine weeks ended October 29, 2016.

7

Chico’s FAS, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

October 29, 2016

(Unaudited)

Adjustments to Presentation

The above mentioned changes had no cumulative effect on the presentation of the unaudited Condensed Consolidated Statements of Income, Condensed Consolidated Balance Sheets, or Condensed Consolidated Statements of Cash Flows. The effects of the aforementioned accounting policy change, change in classification and error correction to the October 31, 2015 unaudited Condensed Consolidated Statement of Income are as follows (dollars in thousands):

	As Previously Reported		% of Sales	Change in Accounting Policy			Effect of Change in Occupancy Classification			Effect of Error Correction		As Adjusted		% of Sales
Thirteen Weeks Ended October 31, 2015
Net sales	$	641,219	100.0	$	—		$	—		$	4,214	$	645,433	100.0
Cost of goods sold	290,737		45.3	8,760			96,773			—		396,270		61.4
Gross Margin	350,482		54.7	(8,760		)	(96,773		)	4,214		249,163		38.6
Selling, general and administrative expenses	327,575		51.1	(8,760		)	(96,773		)	4,214		226,256		35.1

	As Previously Reported		% of Sales	Change in Accounting Policy			Effect of Change in Occupancy Classification			Effect of Error Correction		As Adjusted		% of Sales
Thirty-Nine Weeks Ended October 31, 2015
Net sales	$	2,014,910	100.0	$	—		$	—		$	14,115	$	2,029,025	100.0
Cost of goods sold	902,690		44.8	27,585			289,268			—		1,219,543		60.1
Gross Margin	1,112,220		55.2	(27,585		)	(289,268		)	14,115		809,482		39.9
Selling, general and administrative expenses	964,229		47.9	(27,585		)	(289,268		)	14,115		661,491		32.6

Footnotes to the unaudited Condensed Consolidated Financial Statements herein have been adjusted to reflect the impact of these changes accordingly.

Note 2. New Accounting Pronouncements

In March 2016, the Financial Accounting Standards Board ("FASB") issued ASU No. 2016-09, Compensation - Stock Compensation. ASU 2016-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. ASU 2016-09 requires entities to recognize the income tax effects of awards in the income statement when the awards vest or are settled. The standard also permits an employer to repurchase more of an employee's shares for tax withholding purposes without triggering liability accounting and to make a policy election to account for forfeitures as they occur. This standard will be effective and adopted for our first quarter 2017. We are currently assessing the new standard and its impact to our consolidated results of operations, financial position and cash flows.

In February 2016, the FASB issued ASU No. 2016-02, Leases, which replaces the existing guidance in Accounting Standard Codification 840, Leases. ASU 2016-02 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. ASU 2016-02 requires a dual approach for lessee accounting under which a lessee would account for leases as finance leases or operating leases. Both finance leases and operating leases will result in the lessee recognizing a right-of-use asset and corresponding lease liability. For finance leases, the lessee would recognize interest expense and amortization of the right-of-use asset and for operating leases, the lessee would recognize straight-line total rent expense. We are currently assessing the new standard and its impact to our consolidated results of operations, financial position and cash flows.

8

Chico’s FAS, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

October 29, 2016

(Unaudited)

In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes, which modifies the presentation of noncurrent and current deferred taxes. ASU 2015-17 requires that all deferred tax assets and liabilities be classified as noncurrent on the balance sheet instead of separating deferred taxes into current and noncurrent amounts. The standard is effective for interim and annual reporting periods beginning after December 15, 2016. Early adoption is permitted. We early adopted this standard in the fourth quarter of 2015, with retrospective presentation, as shown in our consolidated balance sheets. Our retrospective presentation resulted in a $26.9 million reclassification from current assets to other assets, net for the period ending October 31, 2015.

In July 2015, the Financial Accounting Standards Board ("FASB") issued ASU No. 2015-11, Simplifying the Measurement of Inventory (Topic 330). The amendments, which apply to inventory that is measured using any method other than the last-in, first-out (LIFO) or retail inventory method, require that entities measure inventory at the lower of cost or net realizable value. ASU 2015-11 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016 and should be applied on a prospective basis. We are currently assessing the potential impact of adopting this ASU, but do not, at this time, anticipate a material impact to our consolidated results of operations, financial position or cash flows.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers. The update outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. ASU 2014-09 requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration the entity expects to be entitled to in exchange for those goods or services. In August 2015, the FASB approved a one year deferral of the effective date, to make it effective for annual and interim reporting periods beginning after December 15, 2017. The standard allows for either a full retrospective or a modified retrospective transition method. The FASB has issued subsequent ASUs related to ASU No. 2014-09, which detail amendments to the ASU, implementation considerations, narrow-scope improvements and practical expedients. We are currently assessing the new standard and all related ASUs and its impact to our consolidated results of operations, financial position and cash flows.

Note 3. Restructuring and Strategic Charges

During the fourth quarter of fiscal 2014, we initiated a restructuring program, including the acceleration of domestic store closures and an organizational realignment, to ensure that resources align with long-term growth initiatives, including omni-channel. In fiscal 2015, in connection with the restructuring program, we completed an evaluation of the Boston Proper brand, completed the sale of the Boston Proper direct-to-consumer business, and closed its stores. 

During the first quarter of fiscal 2016, we announced an expansion of our restructuring program to further align the organizational structure with long-term growth initiatives, including transition of executive leadership, and to reduce COGS and SG&A through strategic initiatives. These strategic initiatives include realigning marketing and digital commerce, improving supply chain efficiency, and reducing non-merchandise and marketing expenses. In fiscal 2016, the Company recorded pre-tax restructuring and strategic charges of $10.8 million for the third quarter and $31.0 million year-to-date, primarily related to outside services, severance and proxy solicitation costs.

In connection with the restructuring program, we evaluated our domestic store portfolio and identified approximately 175 stores for closure, with 90 stores across our brands, including 20 Boston Proper stores, closed through the third quarter of fiscal 2016. As a result, we expect to incur additional cash charges related to lease termination expenses of approximately $1.7 million through fiscal 2017 related to these future closures.

9

Chico’s FAS, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

October 29, 2016

(Unaudited)

A summary of the pre-tax restructuring and strategic charges is presented in the table below:

	Thirteen Weeks Ended					Thirty-Nine Weeks Ended
	October 29, 2016		October 31, 2015			October 29, 2016		October 31, 2015
	(in thousands)
Impairment charges	$	—	$	329		$	1,453	$	21,259
Continuing employee-related costs	781		—			1,796		5,639
Severance charges	65		(12		)	9,485		1,808
Proxy solicitation costs	108		—			5,697		—
Lease termination charges	79		2,146			427		4,903
Outside services	9,779		—			12,013		—
Other charges	8		674			156		569
Total restructuring and strategic charges, pre-tax	$	10,820	$	3,137		$	31,027	$	34,178

As of October 29, 2016, a reserve of $18.1 million related to restructuring and strategic activities was included in other current and deferred liabilities in the accompanying condensed consolidated balance sheets. A roll-forward of the reserve is presented as follows:

	Continuing Employee-related Costs			Severance Charges			Proxy Solicitation Costs			Lease Termination Charges			Outside Services			Other charges			Total
	(in thousands)
Beginning Balance, January 30, 2016	$	2,549		$	1,678		$	—		$	1,101		$	9		$	—		$	5,337
Charges	1,796			9,485			5,697			427			12,013			156			29,574
Payments	(3,702		)	(6,066		)	(5,697		)	(612		)	(623		)	(130		)	(16,830		)
Ending Balance, October 29, 2016	$	643		$	5,097		$	—		$	916		$	11,399		$	26		$	18,081

Note 4. Stock-Based Compensation

For the thirty-nine weeks ended October 29, 2016 and October 31, 2015, stock-based compensation expense was $15.5 million and $20.7 million, respectively. As of October 29, 2016, approximately 5.8 million shares remain available for future grants of equity awards under our 2012 Omnibus Stock and Incentive Plan.

Restricted Stock Awards

Restricted stock award activity for the thirty-nine weeks ended October 29, 2016 was as follows:

	Number of Shares		Weighted Average Grant Date Fair Value
Unvested, beginning of period	2,585,392		$	16.60
Granted	1,719,380		12.35
Vested	(1,062,433	)	17.06
Forfeited	(776,587	)	15.20
Unvested, end of period	2,465,752		13.88

10

Chico’s FAS, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

October 29, 2016

(Unaudited)

Performance-based Stock Units

For the thirty-nine weeks ended October 29, 2016, we granted performance-based restricted stock units (“PSUs”), contingent upon the achievement of a Company-specific performance goal during fiscal 2016. Any units earned as a result of the achievement of this goal will vest over 3 years from the date of grant and will be settled in shares of our common stock.

Performance-based restricted stock unit activity for the thirty-nine weeks ended October 29, 2016 was as follows:

	Number of Shares		Weighted Average Grant Date Fair Value
Unvested, beginning of period	469,898		$	18.23
Granted	733,360		12.55
Vested	(228,105	)	18.23
Forfeited (1)	(329,891	)	15.29
Unvested, end of period	645,262		13.28

⁽¹⁾ The performance goal for the PSUs granted in 2015 was not fully met. Forfeitures for the thirty-nine weeks ended October 29, 2016 include the portion of the fiscal 2015 PSUs that were not earned.

Stock Option Awards

For the thirty-nine weeks ended October 29, 2016 and October 31, 2015, we did not grant any stock options.

Stock option activity for the thirty-nine weeks ended October 29, 2016 was as follows:

	Number of Shares		Weighted  Average Exercise Price
Outstanding, beginning of period	1,060,774		$	15.17
Granted	—		—
Exercised	(46,810	)	6.51
Forfeited or expired	(202,783	)	23.98
Outstanding and exercisable at October 29, 2016	811,181		13.47

Note 5. Income Taxes

The provision for income taxes is based on a current estimate of the annual effective tax rate and is adjusted as necessary for quarterly events. Our effective income tax rate may fluctuate from quarter to quarter as a result of a variety of factors, including changes in our assessment of certain tax contingencies, valuation allowances, changes in tax law, outcomes of administrative audits, the impact of discrete items, and the mix of earnings.

For the thirteen weeks ended October 29, 2016 and October 31, 2015, the effective tax rate was 22.9% and (55.7)%, respectively. For the thirteen weeks ended October 29, 2016, the income tax provision was $7.0 million compared to the income tax benefit of $14.6 million for the thirteen weeks ended October 31, 2015. The favorability in the effective tax rate for the third quarter of 2016 primarily reflects an additional tax benefit related to the disposition of Boston Proper's stock and the realization of income tax credits in 2016. The income tax benefit for the third quarter of 2015 of $14.6 million and effective tax rate of (55.7)% primarily reflected the tax benefit related to the disposition of Boston Proper's stock and the impact of the Boston Proper goodwill and trade name impairment on the annual effective tax rate.

11

Chico’s FAS, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

October 29, 2016

(Unaudited)

For the thirty-nine weeks ended October 29, 2016, the income tax provision of $40.1 million and effective tax rate of 34.0% primarily reflected the pre-tax net income during the year and the additional tax benefit related to the disposition of Boston Proper's stock and the realization of income tax credits in 2016. For the thirty-nine weeks ended October 31, 2015, the income tax benefit was $23.1 million. The effective tax rate of 34.0% for the thirty-nine weeks ended October 29, 2016 was not comparable to the effective tax rate for the thirty-nine weeks ended October 31, 2015 primarily due to the tax benefit recorded in fiscal 2015 related to the disposition of Boston Proper's stock and the impact of the Boston Proper goodwill impairment on the annual effective tax rate.

Note 6. Earnings Per Share

In accordance with relevant accounting guidance, unvested share-based payment awards that include non-forfeitable rights to dividends, whether paid or unpaid, are considered participating securities. As a result, such awards are required to be included in the calculation of earnings per common share pursuant to the “two-class” method. For us, participating securities are composed entirely of unvested restricted stock awards and PSUs that have met their relevant performance criteria.

Earnings per share (“EPS”) is determined using the two-class method when it is more dilutive than the treasury stock method. Basic EPS excludes dilution and is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding during the period, including participating securities. Diluted EPS reflects the dilutive effect of potential common shares from non-participating securities such as stock options and PSUs.

The following table sets forth the computation of basic and diluted EPS shown on the face of the accompanying condensed consolidated statements of operations (in thousands, except per share amounts):

	Thirteen Weeks Ended						Thirty-Nine Weeks Ended
	October 29, 2016			October 31, 2015			October 29, 2016			October 31, 2015
Numerator
Net income (loss)	$	23,598		$	(11,610	)	$	77,721		$	23,037
Net income and dividends declared allocated to participating securities	(502		)	—			(1,677		)	(492		)
Net income (loss) available to common shareholders	$	23,096		$	(11,610	)	$	76,044		$	22,545
Denominator
Weighted average common shares outstanding – basic	128,753			136,172			129,830			139,386
Dilutive effect of non-participating securities	243			—			169			338
Weighted average common and common equivalent shares outstanding – diluted	128,996			136,172			129,999			139,724
Net income (loss) per common share:
Basic	$	0.18		$	(0.09	)	$	0.59		$	0.16
Diluted	$	0.18		$	(0.09	)	$	0.58		$	0.16

For the thirteen weeks weeks ended October 29, 2016 and October 31, 2015, 0.7 million and 0.3 million potential shares of common stock, respectively, were excluded from the diluted per share calculation relating to non-participating securities, because the effect of including these potential shares was antidilutive.

For the thirty-nine weeks ended October 29, 2016 and October 31, 2015, 0.9 million and 1.3 million potential shares of common stock, respectively, were excluded from the diluted per share calculation relating to non-participating securities, because the effect of including these potential shares was antidilutive.

12

Chico’s FAS, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

October 29, 2016

(Unaudited)

Note 7. Fair Value Measurements

Our financial instruments consist of cash, money market accounts, marketable securities, assets held in our non-qualified deferred compensation plan, accounts receivable and payable, and debt. Cash, accounts receivable and accounts payable are carried at cost, which approximates their fair value due to the short-term nature of the instruments.

Marketable securities are classified as available-for-sale and as of October 29, 2016 generally consist ofcorporate bonds, U.S. government agencies, municipal securities, and commercial paper with $25.4 million of securities with maturity dates within one year or less and $25.0 million with maturity dates over one year and less than two years.

We consider all marketable securities available-for-sale, including those with maturity dates beyond 12 months, and therefore classify these securities within current assets on the condensed consolidated balance sheets as they are available to support current operational liquidity needs. Marketable securities are carried at fair value, with the unrealized holding gains and losses, net of income taxes, reflected in accumulated other comprehensive income until realized. For the purposes of computing realized and unrealized gains and losses, cost is determined on a specific identification basis.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. Entities are required to use a three-level hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability on the measurement date. The three levels are defined as follows:

Level 1	—	Unadjusted quoted prices in active markets for identical assets or liabilities
Level 2	—	Unadjusted quoted prices in active markets for similar assets or liabilities, or; Unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or; Inputs other than quoted prices that are observable for the asset or liability
Level 3	—	Unobservable inputs for the asset or liability

We measure certain financial assets at fair value on a recurring basis, including our marketable securities, which are classified as available-for-sale securities, certain cash equivalents, specifically our money market accounts, and assets held in our non-qualified deferred compensation plan. The money market accounts are valued based on quoted market prices in active markets. Our marketable securities are generally valued based on other observable inputs for those securities (including market corroborated pricing or other models that utilize observable inputs such as interest rates and yield curves) based on information provided by independent third party pricing entities, except for U.S. government securities which are valued based on quoted market prices in active markets. The investments in our non-qualified deferred compensation plan are valued using quoted market prices and are included in other assets on our condensed consolidated balance sheets.

From time to time, we measure certain assets at fair value on a non-recurring basis, including evaluation of long-lived assets, goodwill and other intangible assets for impairment using company-specific assumptions which would fall within Level 3 of the fair value hierarchy. We estimate the fair value of assets held for sale using market values for similar assets which would fall within Level 2 of the fair value hierarchy.

To assess the fair value of long-term debt, we utilize a discounted future cash flow model using current borrowing rates for similar types of debt of comparable maturities.

Fair value calculations contain significant judgments and estimates, which may differ from actual results due to, among other things, economic conditions, changes to the business model or changes in operating performance.

During the quarter ended October 29, 2016, we did not make any transfers between Level 1 and Level 2 financial instruments. Furthermore, as of October 29, 2016, January 30, 2016 and October 31, 2015, we did not have any Level 3 financial instruments. We conduct reviews on a quarterly basis to verify pricing, assess liquidity, and determine if significant inputs have changed that would impact the fair value hierarchy disclosure.

13

Chico’s FAS, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

October 29, 2016

(Unaudited)

In accordance with the provisions of the guidance, we categorized our financial instruments, which are valued on a recurring basis, based on the priority of the inputs to the valuation technique for the instruments, as follows:

			Fair Value Measurements at Reporting Date Using
	Balance as of October 29, 2016		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(in thousands)
Financial Assets:
Current Assets
Cash equivalents:
Money market accounts	$	365	$	365	$	—	$	—
Marketable securities:
Municipal securities	3,193		—		3,193		—
U.S. government agencies	23,113		—		23,113		—
Corporate bonds	18,253		—		18,253		—
Commercial paper	5,852		—		5,852		—
Non Current Assets
Deferred compensation plan	7,291		7,291		—		—
Total	$	58,067	$	7,656	$	50,411	$	—
Financial Liabilities:
Long-term debt1	$	84,768	$	—	$	85,207	$	—
	Balance as of January 30, 2016
Financial Assets:
Current Assets
Cash equivalents:
Money market accounts	$	275	$	275	$	—	$	—
Marketable securities:
U.S. government agencies	21,800		—		21,800		—
Corporate bonds	26,149		—		26,149		—
Commercial paper	2,245		—		2,245		—
Non Current Assets
Deferred compensation plan	7,023		7,023		—		—
Total	$	57,492	$	7,298	$	50,194	$	—
Financial Liabilities:
Long-term debt	$	92,219	$	—	$	92,647	$	—
	Balance as of October 31, 2015
Financial Assets:
Current Assets
Cash equivalents:
Money market accounts	$	3,100	$	3,100	$	—	$	—
Marketable securities:
U.S. government agencies	17,817		—		17,817		—
Corporate bonds	27,256		—		27,256		—
Commercial paper	2,243		—		2,243		—
Non Current Assets
Deferred compensation plan	8,632		8,632		—		—
Total	$	59,048	$	11,732	$	47,316	$	—
Financial Liabilities:
Long-term debt	94,702		—		$	95,161	—

¹ The carrying value of long-term debt includes the remaining unamortized discount of $0.2 million on the issuance of debt.

14

Chico’s FAS, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

October 29, 2016

(Unaudited)

Note 8. Debt

In fiscal 2015, we entered into a credit agreement (the "Agreement) providing for a term loan of $100.0 million and a revolving credit facility of $100.0 million. The term loan and revolving credit facility mature on May 4, 2020 and accrue interest by reference, at our election, at either an adjusted eurodollar rate tied to LIBOR or an Alternate Base Rate plus an interest rate margin, as defined in the Agreement. The Agreement contains customary representations, warranties, and affirmative covenants, including the requirement to maintain certain financial ratios. The Company was in compliance with the applicable ratio requirements and other covenants at October 29, 2016. As of October 29, 2016, we had total available borrowing capacity of $100.0 million under our revolving credit facility.

The following table provides details on our debt outstanding as of October 29, 2016, January 30, 2016 and October 31, 2015:

	October 29, 2016			January 30, 2016			October 31, 2015
	(in thousands)
Credit Agreement, net	$	84,768		$	92,219		$	94,702
Less: current portion	(10,000		)	(10,000		)	(10,000		)
Total long-term debt	$	74,768		$	82,219		$	84,702

Note 9. Share Repurchases

During the thirty-nine weeks ended October 29, 2016, we repurchased 6.5 million shares, under our share repurchase program announced in November 2015 at a total cost of approximately $76.3 million. As of October 29, 2016, the Company has $183.7 million remaining under the share repurchase program. However, we have no continuing obligation to repurchase shares under this authorization, and the timing, actual number and value of any additional shares to be purchased will depend on the performance of our stock price, market conditions and other considerations.

Note 10. Commitments and Contingencies

In July 2015, the Company was named as a defendant in Altman v. White House Black Market, Inc., a putative class action filed in the United States District Court for the Northern District of Georgia. The Complaint alleges that the Company, in violation of federal law, published more than the last five digits of a credit or debit card number or an expiration date on customers' receipts. The Company denies the material allegations of the complaint. Its motion to dismiss was denied on July 13, 2016, but the Company continues to believe that the case is without merit and is not appropriate for class treatment. It intends to vigorously defend the matter. At this time however, it is not possible to predict whether the proceeding will be permitted to proceed as a class or the size of the putative class, and no assurance can be given that the Company will be successful in its defense on the merits or otherwise. Because the case is still in the early stages and class determinations have not been made, the Company is unable to estimate any potential loss or range of loss.

In June 2015, the Company was named as a defendant in Ackerman v. Chico’s FAS, Inc., a putative representative Private Attorney General action filed in the Superior Court of California, County of Los Angeles. The Complaint alleges numerous violations of California law related to wages, meal periods, rest periods, wage statements, and failure to reimburse business expenses, among other things. Plaintiff subsequently amended her complaint to make the same allegations on a class action basis. In June 2016, the parties submitted a proposed settlement of the matter to the court, and the court granted preliminary approval on August 26, 2016, and settlement notices have been distributed. If finally approved, the proposed settlement will not have a material adverse effect on the Company’s consolidated financial condition or results of operations.

In March 2016, the Company was named as a defendant in Cunningham v. Chico’s FAS, Inc., a putative class action filed in the Superior Court of California, County of San Diego. Given the overlap with the claims alleged in the Ackerman case, described above, the Court initially stayed the Cunningham case pending final approval of the Ackerman settlement. In October 2016, the parties agreed to lift the stay and to resolve the matter as an individual action. The Court has since dismissed the case. The settlement amount was immaterial.

15

Chico’s FAS, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

October 29, 2016

(Unaudited)

In June 2016, the Company was named as a defendant in Rodems v. Chico’s FAS, Inc., a putative class action filed in the Superior Court of California, County of Fresno. Plaintiff sought to represent current and former nonexempt employees of Chico’s stores in California. The Complaint alleged many of the same Labor Code violations as Ackerman, described above. As a result, the court stayed the matter pending final approval of the Ackerman proposed settlement. The Company and the plaintiff subsequently agreed to a lifting of the stay and a filing of an amended complaint in early November, and the Company removed the case to the United State District Court for the Eastern District of California on November 9, 2016. In the proposed First Amended Complaint, the plaintiff makes similar claims of Labor Code violations against the Company but does not seek to represent a putative class or make class action allegations. The Company disputes the allegations of the First Amended Complaint and, at this time, does not expect that this case will have a material adverse effect on the Company’s consolidated financial condition or results of operation.

On July 28, 2016, the Company was named as a defendant in Calleros v. Chico’s FAS, Inc., a putative class action filed in the Superior Court of California, County of Santa Barbara. Plaintiff alleges that the Company failed to comply with California law requiring it to provide consumers cash for gift cards with a stored value of less than $10.00. The Company believes that the matter is not appropriate for class treatment; however, it is not possible to predict whether it will be permitted to proceed as a class or the size of the putative class, and no assurance can be given that the Company will be successful in its defense of this action on the merits or otherwise. Because class determinations have not been made, the Company is unable to estimate any potential loss or range of loss were it to lose on the merits of the case. However, the case is scheduled for voluntary mediation on November 28, 2016, and, at this time, the Company does not expect that the case will have a material adverse effect on the Company’s consolidated financial conditions or results of operation.

Other than as noted above, we are not currently a party to any legal proceedings other than claims and lawsuits arising in the normal course of business. All such matters are subject to uncertainties and outcomes may not be predictable. Consequently, the ultimate aggregate amount of monetary liability or financial impact with respect to these matters as of October 29, 2016 are not estimable. However, while such matters could affect our consolidated operating results when resolved in future periods, management believes that upon final disposition, any monetary liability or financial impact to us would not be material to our annual consolidated financial statements.

Note 11. Subsequent Events

On November 22, 2016, we announced that our Board of Directors has declared a quarterly dividend of $0.08 per share on our common stock. The dividend will be payable on December 19, 2016 to shareholders of record at the close of business on December 5, 2016. Although it is our Company’s intention to continue to pay a quarterly cash dividend in the future, any decision to pay future cash dividends will be made by the Board of Directors and will depend on future earnings, financial condition and other factors.

16

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) should be read in conjunction with the accompanying unaudited condensed consolidated financial statements and notes thereto and our 2015 Annual Report to Stockholders.

Executive Overview

We are a leading omni-channel specialty retailer of women’s private branded, sophisticated, casual-to-dressy clothing, intimates, complementary accessories, and other non-clothing items operating under the Chico’s, White House Black Market (“WHBM”) and Soma brand names. We earn revenues and generate cash through the sale of merchandise in our domestic and international retail stores, on our various websites, through our call center which takes orders for all of our brands, and through an unaffiliated franchise partner in Mexico.

We utilize an integrated omni-channel approach to managing our business. For each of our brands, we want our customers to view the brand, through all of its various sales channels, as an integrated experience, rather than viewing it through a single channel (such as the store or the website). This approach allows our customers to browse, purchase, return, or exchange our merchandise through whatever sales channel and at whatever time is most convenient. As a result, we track total sales and comparable sales on a combined basis.

Net sales for the third quarter of fiscal 2016 were $596.9 million compared to $645.4 million in last year's third quarter. This decrease of 7.5% included $18.7 million related to Boston Proper. Excluding Boston Proper from fiscal 2015, net sales decreased 4.8% and primarily reflected a 4.9%decrease in comparable sales, comprised of a decrease in transaction count and lower average dollar sale. Third quarter average unit retail increased with a decline in promotional activity.

We reported net income for the third quarter of fiscal 2016 of $23.6 million, or $0.18 per diluted share, compared to a net loss of $11.6 million, or $0.09 per diluted share, in last year’s third quarter. Results for the third quarter of fiscal 2016 include restructuring and strategic charges of $6.8 million after-tax, or $0.05 per diluted share, primarily consisting of outside services, partially offset by an additional tax benefit on the disposition of Boston Proper's stock of $4.0 million, or $0.03 per diluted share. Results for the third quarter of fiscal 2015 include the impact of Boston Proper non-cash goodwill and trade name impairment charges of $23.9 million after-tax, or $0.18 per diluted share, restructuring and strategic charges of $1.9 million after-tax, or $0.01 per diluted share, primarily related to property and equipment impairment charges for the Boston Proper stores, and the operating loss related to Boston Proper of $3.5 million, or $0.03 per diluted share. The change in earnings per share also reflects the impact of approximately 10.2 million shares repurchased since the end of the third quarter last year.

Net sales for the year-to-date period of fiscal 2016 were $1.876 billion, a decrease of 7.5% compared to $2.029 billion in last year’s year-to-date period. Net income for the year-to-date period of fiscal 2016 was $77.7 million, or $0.58 per diluted share, compared to net income of $23.0 million, or $0.16 per diluted share last year. Results for the year-to-date period of fiscal 2016 include restructuring and strategic charges of $19.4 million after-tax, or $0.15 per diluted share, primarily consisting of severance, proxy solicitation costs, and outside services, partially offset by an additional tax benefit on the disposition of Boston Proper's stock of $4.0 million, or $0.03 per diluted share. Results for the year-to-date period of fiscal 2015 include the impact of Boston Proper non-cash goodwill and trade name impairment charges of $71.0 million after-tax, or $0.50 per diluted share, restructuring and strategic charges of $21.2 million after-tax, or $0.15 per diluted share, primarily related to property and equipment impairment charges, employee-related costs and lease termination charges, a tax benefit related to the disposition of Boston Proper's stock of $23.8 million, or $0.17 per diluted share, and the operating loss related to Boston Proper of $8.2 million, or $0.06 per diluted share. The change in earnings per share also reflects the impact of approximately 10.2 million shares repurchased since the end of the third quarter last year.

Our Business Strategy

Our overall business strategy is focused on building and cultivating a portfolio of high-performing retail brands serving the fashion needs of women 35 years and older. We are focused on increasing the sales volume and profitability of our existing brands through our four focus areas: (1) evolving the customer experience, (2) strengthening our brands' positions, (3) leveraging actionable retail science, and (4) sharpening our financial principles. Over the long term, we may build our brand portfolio by organic development or acquisition of other specialty retail concepts if research indicates that the opportunity complements our current brands and is appropriate and in the best interest of the shareholders.

17

We pursue the growth of the brands in our portfolio by building our omni-channel capabilities, which includes managing our store base and our growing online presence, executing marketing plans, effectively leveraging expenses and optimizing the potential of each of our three brands. We have invested heavily in our omni-channel capabilities in order to allow customers to fully experience our brands, through more than one channel. In essence, we view our various sales channels as a single, integrated process rather than as separate sales channels operating independently. To that end, we often refer to our brands' respective websites as "our largest store" within the brand.

Under this integrated, omni-channel approach, we encourage our customers to take advantage of each of our sales channels in whatever way best fits their needs. Customers may shop our products through one channel and consummate the purchase through a different channel. Our domestic customers have the option of returning merchandise to a store or to our distribution center, regardless of the channel used for purchase. We believe this omni-channel approach meets our customers’ expectations, enhances the customer experience, contributes to the overall success of our brands, reflects that our customers do not differentiate between channels, and is consistent with how we plan and manage our business. As a result, we maintain a shared inventory platform for our operations, allowing us to fulfill orders for all channels from our distribution center in Winder, Georgia. We also fulfill in-store orders directly from other stores or our distribution center and offer domestic online and catalog customers the option of returning items to our stores.

We seek to acquire and retain omni-channel customers by leveraging existing customer-specific data and through targeted marketing, including e-marketing, television, catalogs and mailers. We seek to optimize the potential of our brands with improved product offerings, which includes potential new merchandise opportunities and brand extensions that complement the current offerings, as well as our continued emphasis on our “Most Amazing Personal Service” standard.

In 2016, we announced new initiatives to realign marketing and digital commerce, improve supply chain efficiency, and reduce non-merchandise and marketing expenses. Actions taken as part of these initiatives are expected to reduce expenses and complexity, standardize processes and improve the Company's ability to respond in real-time to changes in customer demand for merchandise.

18

RESULTS OF OPERATIONS

Thirteen Weeks Ended October 29, 2016 Compared to the Thirteen Weeks Ended October 31, 2015

Net Sales

The following table depicts net sales by Chico’s, WHBM, Soma and Boston Proper in dollars and as a percentage of total net sales for the thirteen weeks ended October 29, 2016 and October 31, 2015:

	Thirteen Weeks Ended
	October 29, 2016				October 31, 2015
	(dollars in thousands)
Chico's	$	312,203	52.3	%	$	333,421	51.7	%
WHBM	210,389		35.2		220,965		34.2
Soma	74,320		12.5		72,349		11.2
Boston Proper	—		—		18,698		2.9
Total net sales	$	596,912	100.0	%	$	645,433	100.0	%

Net sales for the third quarter decreased to $596.9 million from $645.4 million in last year’s third quarter. This 7.5% decrease includes $18.7 million related to Boston Proper in last year’s third quarter and primarily reflects a 4.9%decrease in comparable sales, comprised of reduced transaction count and lower average dollar sale. For the third quarter, average unit retail increased with a decline in promotional activity. Net sales reflects 36 net store closures, including 20 Boston Proper store closures, or a 1.7% net decrease in selling square footage since last year's third quarter.

The following table depicts comparable sales percentages by Chico's, WHBM and Soma for the thirteen weeks ended October 29, 2016 and October 31, 2015:

	Thirteen Weeks Ended
	October 29, 2016		October 31, 2015
Chico's	(5.6	)%	(4.7	)%
WHBM	(5.5	)%	(2.0	)%
Soma	0.4	%	(0.9	)%
Total Company	(4.9	)%	(3.3	)%

Cost of Goods Sold/Gross Margin

The following table depicts cost of goods sold and gross margin in dollars and gross margin as a percentage of total net sales for the thirteen weeks ended October 29, 2016 and October 31, 2015:

	Thirteen Weeks Ended
	October 29, 2016			October 31, 2015
	(dollars in thousands)
Cost of goods sold	$	366,618		$	396,270
Gross margin	$	230,294		$	249,163
Gross margin percentage	38.6		%	38.6		%

For the third quarter of fiscal 2016, gross margin was $230.3 million, or 38.6%, compared to $249.2 million, or 38.6%, in last year’s third quarter. When excluding Boston Proper from fiscal 2015, gross margin decreased 40 basis points in fiscal 2016 compared to gross margin of $244.2 million, or 39.0% last year. This decrease in gross margin rate primarily reflects an improvement in merchandise margin, which was more than offset by deleverage of occupancy costs and an increase in incentive compensation.

19

Selling, General and Administrative Expenses

The following table depicts SG&A, which includes direct operating expenses, marketing expenses and National Store Support Center (“NSSC”) expenses, in dollars and as a percentage of total net sales for the thirteen weeks ended October 29, 2016 and October 31, 2015:

	Thirteen Weeks Ended
	October 29, 2016			October 31, 2015
	(dollars in thousands)
Selling, general and administrative expenses	$	188,350		$	226,256
Percentage of total net sales	31.6		%	35.1		%

For the third quarter of fiscal 2016, SG&A was $188.4 million compared to $226.3 million in last year's third quarter. SG&A was 31.6% of net sales, a 350 basis point decrease from last year's third quarter, primarily due a reduction in marketing spend in fiscal 2016, $11.5 million of SG&A related to Boston Proper in fiscal 2015, and savings in store labor, partially offset by an increase in incentive compensation.

Restructuring and Strategic Charges

In fiscal 2014, we initiated a restructuring program, including the acceleration of domestic store closures and an organizational realignment, to ensure that resources are aligned with long-term growth initiatives, including omni-channel. During the first quarter of fiscal 2016, we announced an expansion of our restructuring program to further align the organizational structure with long-term growth initiatives, including transition of executive leadership, and to reduce COGS and SG&A through strategic initiatives. These strategic initiatives include realigning marketing and digital commerce, improving supply chain efficiency, and reducing non-merchandise and marketing expenses. We have continued to execute on our cost reduction and operating efficiency initiatives, including an organizational redesign in the third quarter of fiscal 2016 which clarified roles, responsibilities and processes across our brands and shared service center.

In connection with this effort, in the third quarter of fiscal 2016, we recorded pre-tax restructuring and strategic charges totaling $10.8 million, primarily consisting of outside services related to cost reduction and operating efficiency initiatives, compared to $3.1 million in the third quarter of fiscal 2015, primarily consisting of Boston Proper lease termination charges. The after-tax impact of the restructuring and strategic charges in the third quarter totaled $6.8 million, or $0.05 per diluted share, compared to $1.9 million, or $0.01 per diluted share in fiscal 2015.

In connection with the restructuring program, we evaluated our domestic store portfolio and identified approximately 175 stores for closure, with 90 stores across our brands, including 20 Boston Proper stores, closed through the third quarter of fiscal 2016. As a result, we expect to incur additional cash charges related to lease termination expenses of approximately $1.7 million through fiscal 2017 related to these future closures.

Provision for Income Taxes

Our effective tax rate for the third quarter was 22.9% compared to an effective tax rate of (55.7)% in last year's third quarter. The favorability in the effective tax rate for the third quarter of 2016 primarily reflects an additional tax benefit related to the disposition of Boston Proper's stock and the realization of income tax credits in 2016. The income tax benefit of $14.6 million for the third quarter of 2015 and effective tax rate of (55.7)% primarily reflected the tax benefit related to the disposition of Boston Proper's stock and the tax impact of the Boston Proper goodwill and trade name impairment on the annual effective tax rate. Excluding the net after-tax impact of restructuring and strategic charges and the exit of Boston Proper, the effective tax rate for the third quarter of 2016 would have been 36.2% compared to 37.0% in the same period last year.

Net Income and Earnings Per Diluted Share

We reported net income for the third quarter of fiscal 2016 of $23.6 million, or $0.18 per diluted share, compared to net loss of $11.6 million, or $0.09 per diluted share in last year’s third quarter. Results for the third quarter of fiscal 2016 include the impact of restructuring and strategic charges of $6.8 million after-tax, or $0.05 per diluted share, primarily related to outside services related to cost reduction and operating efficiency initiatives, partially offset by an additional tax benefit related to the exit of Boston Proper of $4.0 million, or $0.03 per diluted share. Results for the third quarter of fiscal 2015 include charges of $29.3 million after-tax, or $0.22 per diluted share, related to Boston Proper non-cash goodwill and trade name impairment charges, restructuring and strategic charges and Boston Proper operating results. The change in earnings per share also reflects the impact of approximately 10.2 million shares repurchased since the end of the third quarter last year.

20

Thirty-Nine Weeks EndedOctober 29, 2016 Compared to the Thirty-Nine Weeks EndedOctober 31, 2015

Net Sales

The following table depicts net sales by Chico’s, WHBM, Soma and Boston Proper in dollars and as a percentage of total net sales for the thirty-nine weeks ended October 29, 2016 and October 31, 2015:

	Thirty-Nine Weeks Ended
	October 29, 2016				October 31, 2015
	(dollars in thousands)
Chico's	$	995,067	53.0	%	$	1,058,697	52.2	%
WHBM	633,420		33.8	%	659,682		32.5	%
Soma	247,134		13.2	%	240,347		11.8	%
Boston Proper	—		0.0	%	70,299		3.5	%
Total net sales	$	1,875,621	100.0	%	$	2,029,025	100.0	%

Net sales for the year-to-date period decreased to $1.876 billion from $2.029 billion in last year’s year-to-date period. This 7.6% decrease includes $70.3 million related to Boston Proper last year and primarily reflects a 4.0%decrease in comparable sales, comprised of a decrease in transaction count and average dollar sale.

The following table depicts comparable sales percentages by Chico's, WHBM and Soma for the thirty-nine weeks ended October 29, 2016 and October 31, 2015:

	Thirty-Nine Weeks Ended
	October 29, 2016		October 31, 2015
Chico's	(5.4	)%	(2.1	)%
WHBM	(3.5	)%	(0.8	)%
Soma	0.6	%	3.6	%
Total Company	(4.0	)%	(1.0	)%

Cost of Goods Sold/Gross Margin

The following table depicts cost of goods sold and gross margin in dollars and gross margin as a percentage of total net sales for the thirty-nine weeks ended October 29, 2016 and October 31, 2015:

	Thirty-Nine Weeks Ended
	October 29, 2016			October 31, 2015
	(dollars in thousands)
Cost of goods sold	$	1,142,182		$	1,219,543
Gross margin	$	733,439		$	809,482
Gross margin percentage	39.1		%	39.9		%

Gross margin for the year-to-date period was $733.4 million, or 39.1%, compared to $809.5 million, or 39.9%, in last year’s year-to-date period. When excluding Boston Proper from fiscal 2015, gross margin decreased 110 basis points in fiscal 2016 compared to $786.5 million, or 40.2%, last year. The decrease is primarily due to sales deleverage of store occupancy expense.

21

Selling, General and Administrative Expenses

The following table depicts SG&A, which includes store and direct operating expenses, marketing expenses and NSSC expenses, in dollars and as a percentage of total net sales for the thirty-nine weeks ended October 29, 2016 and October 31, 2015:

	Thirty-Nine Weeks Ended
	October 29, 2016			October 31, 2015
	(dollars in thousands)
Selling, general and administrative expenses	$	583,117		$	661,491
Percentage of total net sales	31.1		%	32.6		%

For the year-to-date period of fiscal 2016, SG&A was $583.1 million compared to $661.5 million in last year’s year-to-date period. SG&A was 31.1% of net sales, a 150 basis point decrease from last year, primarily due to $40.5 million of SG&A related to Boston Proper in fiscal 2015, and a reduction in marketing spend and store labor, partially offset by employee benefit costs in fiscal 2016.

Restructuring and Strategic Charges

Restructuring and strategic charges for the year-to-date period of fiscal 2016 were $31.0 million pre-tax, primarily consisting of outside services, severance, proxy solicitation costs, compared to $34.2 million in fiscal 2015, primarily consisting of non-cash property and equipment impairment charges, continuing employee-related costs, lease termination charges and severance charges. The after-tax impact of the restructuring and strategic charges totaled $19.4 million, or $0.15 per diluted share, compared to $21.2 million, or $0.15 per diluted share in fiscal 2015.

Provision for Income Taxes

For the year-to-date period of fiscal 2016, the income tax provision of $40.1 million and effective tax rate of 34.0% primarily reflected the pre-tax net income during the period and the additional tax benefit related to the disposition of Boston Proper's stock and the realization of income tax credits in 2016. For the year-to-date period of fiscal 2015, the income tax benefit was $23.1 million. The effective tax rate for the year-to-date period of fiscal 2015 was not comparable to the 34.0% effective tax rate for the year-to-date period of fiscal 2016, primarily due to the tax benefit recorded in fiscal 2015 related to the disposition of Boston Proper's stock and the impact of the Boston Proper goodwill impairment on the annual effective tax rate.

Net Income and Earnings Per Diluted Share

Net income for the year-to-date period of fiscal 2016 was $77.7 million, or $0.58 per diluted share, compared to net income of $23.0 million, or $0.16 per diluted share, in last year's year-to-date period. Results for the year-to-date period of fiscal 2016 include the impact of restructuring and strategic charges of $19.4 million after-tax, or $0.15 per diluted share, primarily related to outside services, severance, proxy solicitation costs, partially offset by an additional tax benefit related to the exit of Boston Proper of $4.0 million, or $0.03 per diluted share. Results for the year-to-date period of fiscal 2015 include charges of $76.7 million after tax, or $0.54 per diluted share, related to Boston Proper non-cash goodwill and trade name impairment charges, restructuring and strategic charges, a tax benefit as a result of the disposition of Boston Proper's stock and Boston Proper operating results. The change in earnings per share also reflects the impact of approximately 10.2 million shares repurchased since the end of the third quarter last year.

Liquidity and Capital Resources

We believe that our existing cash and marketable securities balances, cash generated from operations, available credit facilities and potential future borrowings will be sufficient to fund capital expenditures, working capital needs, dividend payments, potential share repurchases, commitments, and other liquidity requirements associated with our operations for the foreseeable future. Furthermore, while it is our intention to repurchase our stock and pay a quarterly cash dividend in the future, any determination to repurchase additional shares of our stock or pay future dividends will be made by the Board of Directors and will depend on our stock price, future earnings, financial condition, and other factors considered by the Board.

Our ongoing capital requirements will continue to be primarily for enhancing and expanding our omni-channel capabilities, including: information technology and relocated, remodeled and new stores.

22

Operating Activities

Net cash provided by operating activities for the year-to-date period of fiscal 2016 was $144.4 million, an increase of approximately $14.3 million from last year's year-to-date period. This increase primarily reflected the change in working capital, partially offset by lower net income compared to prior year when adjusted for non-cash impairment charges and the deferred tax benefit related to the exit of Boston Proper, as well as lower stock compensation expense and depreciation and amortization. The change in working capital is primarily due to a decrease in net income tax receivable, improved inventory management and the timing of payables.

Investing Activities

Net cash used in investing activities for the year-to-date period of fiscal 2016 was $35.9 million compared to $12.6 million provided by investing activities in last year's year-to-date period, primarily reflecting a $79.4 milliondecrease in marketable securities related to share repurchases in fiscal 2015. Investing activities in the third quarter of fiscal 2016 included net purchases of property and equipment totaling $35.7 million compared to $66.6 million in the same period last year, consistent with our overall business strategy.

Financing Activities

Net cash used in financing activities for the year-to-date period of fiscal 2016 was $118.1 million compared to $184.9 million in last year's year-to-date period. The decrease in net cash used in financing activities primarily reflects a decrease of $179.2 million in share repurchases in fiscal 2016 compared to fiscal 2015, partially offset by net borrowings of $95.0 million under our Credit Agreement in fiscal 2015.

Store and Franchise Activity

During the fiscal 2016 year-to-date period, we had 8 net store closure, consisting of net closures of 10 Chico's and 4 WHBM stores, and openings of 6 Soma stores. Currently, we expect an additional 9 net store closures in fiscal 2016, reflecting approximately 8 net closures of Chico's stores and 1 net WHBM closure. We continuously evaluate the appropriate new store growth rate in light of economic conditions and may adjust the growth rate as conditions require or as opportunities arise. As of October 29, 2016, we also sold merchandise through 88 international franchise locations.

Critical Accounting Policies and Estimates

The discussion and analysis of our financial condition and results of operations are based upon the condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosure of contingent assets and liabilities. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Management has discussed the development and selection of these critical accounting policies and estimates with the Audit Committee of our Board of Directors and believes the assumptions and estimates, as set forth in our Annual Report on Form 10-K for the fiscal year ended January 30, 2016, are significant to reporting our results of operations and financial position.

In fiscal 2016 we implemented changes to our accounting policy for the classification of shipping expense, corrected an immaterial error in the classification of shipping revenue and changed the classification of occupancy expenses. Please see Note 1 in our Notes to Condensed Consolidated Financial Statements for a detailed description and reconciliation of these matters.

Other than discussed above, there have been no material changes to our critical accounting policies as disclosed in our Annual Report on Form 10-K for the fiscal year ended January 30, 2016.

23

Forward-Looking Statements

This Form 10-Q may contain certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which reflect our current views with respect to certain events that could have an effect on our future financial performance, including but without limitation, statements regarding our plans, objectives, the implementation of our previously announced restructuring program and organizational redesign for improved business performance, including our re-balancing of our store fleet and streamlining the headquarter workforce, and the future success of our store concepts. These statements may address items such as future sales and sales initiatives, gross margin expectations, SG&A expectations (particularly estimated expected savings), operating margin expectations, earnings per share expectations, planned store openings, closings and expansions, future comparable sales, future product sourcing plans, inventory levels, planned marketing expenditures, planned capital expenditures and future cash needs. In addition, from time to time, we may issue press releases and other written communications, and our representatives may make oral statements, which contain forward-looking information.

These statements, including those in this Form 10-Q and those in press releases or made orally, relate to expectations concerning matters that are not historical fact and may include the words or phrases such as “expects,” “believes,” “anticipates,” “plans,” “estimates,” “approximately,” “our planning assumptions,” “future outlook,” and similar expressions. Except for historical information, matters discussed in such oral and written statements, including this Form 10-Q, are forward-looking statements. These forward-looking statements are based largely on information currently available to our management and on our current expectations, assumptions, plans, estimates, judgments and projections about our business and our industry, and are subject to various risks and uncertainties that could cause actual results to differ materially from historical results or those currently anticipated. Although we believe our expectations are based on reasonable estimates and assumptions, they are not guarantees of performance and there are a number of known and unknown risks, uncertainties, contingencies, and other factors (many of which are outside our control) that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Accordingly, there is no assurance that our expectations will, in fact, occur or that our estimates or assumptions will be correct, and we caution investors and all others not to place undue reliance on such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those described in Item 1A, “Risk Factors” in our Annual Report on Form 10-K filed with the SEC on March 8, 2016, those described in Item 1A herein, and the following:

Potential risks and uncertainties include: the financial strength of retailing in particular and the economy in general; the extent of financial difficulties or uncertainty that may be experienced by customers; our ability to secure and maintain customer acceptance of styles and store concepts; the ability to effectively manage and maintain an appropriate level of inventory; the extent and nature of competition in the markets in which we operate; the extent of the market demand and overall level of spending for women’s private branded clothing and related accessories; the effectiveness of our brand awareness and marketing programs; the adequacy and perception of customer service; the ability to coordinate product development with buying and planning; the quality of merchandise received from suppliers; the ability to efficiently, timely and successfully execute significant economic, labor or other shifts in the countries from which our merchandise is supplied; the ability of our suppliers to timely produce and deliver clothing and accessories; the changes in the costs of manufacturing, raw materials, labor and advertising; the availability of quality store sites; our ability to manage our store fleet and the risk that our investments in shopping initiatives may not deliver the results we anticipate; the risk that comparable sales and margins will experience fluctuations; the ability to successfully execute our business strategies; the continuing performance, implementation and integration of management information systems; the impact of any systems failures, cyber security or other data or security breaches, including any security breaches that result in theft, transfer, or unauthorized disclosure of customer, employee, or company information or our compliance with information security and privacy laws and regulations in the event of such an incident; the ability to hire, train, energize and retain qualified sales associates, managerial employees and other employees; the successful integration of our new management team; the ability to achieve the results of our previously announced restructuring program and expense initiatives the ability to respond effectively to actions of activist shareholders and others; the ability to utilize our distribution center and other support facilities in an efficient and effective manner; the ability to establish our websites and operate them in a manner that produces profitable sales and marketing; the ability to secure and protect trademarks and other intellectual property rights and to protect our reputation and brand images; and the risk that natural disasters, public health crises, political uprisings or unrest, or other catastrophic events could adversely affect our operations and financial results. In addition, there are potential risks and uncertainties that are related to our reliance on sourcing from foreign suppliers, including the impact of work stoppages; transportation delays and other interruptions; political or civil instability; imposition of and changes in tariffs and import and export controls such as import quotas; changes in governmental policies in or towards foreign countries; currency exchange rates and other similar factors.

All written or oral forward-looking statements that are made or attributable to us are expressly qualified in their entirety by this cautionary notice. The forward-looking statements included herein are only made as of the date of this Quarterly Report on Form 10-Q. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

24

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The market risk of our financial instruments as of October 29, 2016 has not significantly changed since January 30, 2016. We are exposed to market risk from changes in interest rates on any future indebtedness and our marketable securities and from foreign currency exchange rate fluctuations.

Our exposure to interest rate risk relates in part to our revolving line of credit with our bank. On May 4, 2015, we entered into a credit agreement, as further discussed in Note 7. The Agreement, which matures on May 4, 2020, has borrowing options which accrue interest by reference, at our election, at either an adjusted eurodollar rate tied to LIBOR or an Alternate Base Rate plus an interest rate margin, as defined in the Agreement. An increase or decrease in market interest rates of 100 basis points would not have a material effect on annual interest expense. 

Our investment portfolio is maintained in accordance with our investment policy which identifies allowable investments, specifies credit quality standards and limits the credit exposure of any single issuer. Our investment portfolio consists of cash equivalents and marketable securities including municipal securities, corporate bonds, U.S. government agencies and commercial paper.The marketable securities portfolio as of October 29, 2016, consisted of $25.4 million of securities with maturity dates within one year or less and $25.0 million with maturity dates over one year and less than or equal to two years. We consider all marketable securities available-for-sale, including those with maturity dates beyond 12 months, and therefore classify these securities as short-term investments within current assets on the condensed consolidated balance sheets as they are available to support current operational liquidity needs. As of October 29, 2016, an increase or decrease of 100 basis points in interest rates would not have a material effect on the fair value of our marketable securities portfolio.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed in our reports under the Securities and Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

As of the end of the period covered by this report, an evaluation was carried out under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as amended). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the end of such period, our disclosure controls and procedures were effective in providing reasonable assurance in timely alerting them to material information relating to us (including our consolidated subsidiaries) and that information required to be disclosed in our reports is recorded, processed, summarized, and reported as required to be included in our periodic SEC filings.

Changes in Internal Controls

There were no significant changes in our internal controls or in other factors that could significantly affect our disclosure controls and procedures subsequent to the date of the above referenced evaluation. Furthermore, there was no change in our internal control over financial reporting or in other factors during the quarterly period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

25

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

In July 2015, the Company was named as a defendant in Altman v. White House Black Market, Inc., a putative class action filed in the United States District Court for the Northern District of Georgia. The Complaint alleges that the Company, in violation of federal law, published more than the last five digits of a credit or debit card number or an expiration date on customers' receipts. The Company denies the material allegations of the complaint. Its motion to dismiss was denied on July 13, 2016, but the Company continues to believe that the case is without merit and is not appropriate for class treatment. It intends to vigorously defend the matter. At this time however, it is not possible to predict whether the proceeding will be permitted to proceed as a class or the size of the putative class, and no assurance can be given that the Company will be successful in its defense on the merits or otherwise. Because the case is still in the early stages and class determinations have not been made, the Company is unable to estimate any potential loss or range of loss.

In June 2015, the Company was named as a defendant in Ackerman v. Chico’s FAS, Inc., a putative representative Private Attorney General action filed in the Superior Court of California, County of Los Angeles. The Complaint alleges numerous violations of California law related to wages, meal periods, rest periods, wage statements, and failure to reimburse business expenses, among other things. Plaintiff subsequently amended her complaint to make the same allegations on a class action basis. In June 2016, the parties submitted a proposed settlement of the matter to the court, and the court granted preliminary approval on August 26, 2016, and settlement notices have been distributed. If finally approved, the proposed settlement will not have a material adverse effect on the Company’s consolidated financial condition or results of operations.

In March 2016, the Company was named as a defendant in Cunningham v. Chico’s FAS, Inc., a putative class action filed in the Superior Court of California, County of San Diego. Given the overlap with the claims alleged in the Ackerman case, described above, the Court initially stayed the Cunningham case pending final approval of the Ackerman settlement. In October 2016, the parties agreed to lift the stay and to resolve the matter as an individual action. The Court has since dismissed the case. The settlement amount was immaterial.

In June 2016, the Company was named as a defendant in Rodems v. Chico’s FAS, Inc., a putative class action filed in the Superior Court of California, County of Fresno. Plaintiff sought to represent current and former nonexempt employees of Chico’s stores in California. The Complaint alleged many of the same Labor Code violations as Ackerman, described above. As a result, the court stayed the matter pending final approval of the Ackerman proposed settlement. The Company and the plaintiff subsequently agreed to a lifting of the stay and a filing of an amended complaint in early November, and the Company removed the case to the United State District Court for the Eastern District of California on November 9, 2016. In the proposed First Amended Complaint, the plaintiff makes similar claims of Labor Code violations against the Company but does not seek to represent a putative class or make class action allegations. The Company disputes the allegations of the First Amended Complaint and, at this time, does not expect that this case will have a material adverse effect on the Company’s consolidated financial condition or results of operation.

On July 28, 2016, the Company was named as a defendant in Calleros v. Chico’s FAS, Inc., a putative class action filed in the Superior Court of California, County of Santa Barbara. Plaintiff alleges that the Company failed to comply with California law requiring it to provide consumers cash for gift cards with a stored value of less than $10.00. The Company believes that the matter is not appropriate for class treatment; however, it is not possible to predict whether it will be permitted to proceed as a class or the size of the putative class, and no assurance can be given that the Company will be successful in its defense of this action on the merits or otherwise. Because class determinations have not been made, the Company is unable to estimate any potential loss or range of loss were it to lose on the merits of the case. However, the case is scheduled for voluntary mediation on November 28, 2016, and, at this time, the Company does not expect that the case will have a material adverse effect on the Company’s consolidated financial conditions or results of operation.

Other than as noted above, we are not currently a party to any legal proceedings other than claims and lawsuits arising in the normal course of business. All such matters are subject to uncertainties and outcomes may not be predictable. Consequently, the ultimate aggregate amount of monetary liability or financial impact with respect to these matters as of October 29, 2016 are not estimable. However, while such matters could affect our consolidated operating results when resolved in future periods, management believes that upon final disposition, any monetary liability or financial impact to us would not be material to our annual consolidated financial statements.

26

ITEM 1A. RISK FACTORS

In addition to the other information discussed in this report, the factors described in Part I, Item 1A. “Risk Factors” in our 2015 Annual Report on Form 10-K filed with the SEC on March 8, 2016 should be considered as they could materially affect our business, financial condition or future results. Other than as noted below, there have not been any significant changes with respect to the risks described in our 2015 Form 10-K, but these are not the only risks facing our company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may adversely affect our business, financial condition or operating results.

As discussed in Note 3 in our Notes to Condensed Consolidated Financial Statements, we are currently involved in significant strategic initiatives intended to increase the efficiency and productivity of our business processes. These initiatives require substantial internal change and effort, including reductions and changes in personnel and significant adjustments in how we design and source product and how we ultimately present it to our customers. While we are confident that these initiatives are appropriate for the long-term viability and success of our business, they may not deliver all of the results we expect. Moreover, the process of implementing them places significant stress on the company and could result in unexpected short-term disruptions or negative impacts to our business, including, by way of example:

• Unintended loss of key personnel or unexpected delay in the hiring of personnel whose expertise is needed for the successful implementation of the initiatives.

• Disruption to our current business processes as we migrate to the new processes, or failure to successfully migrate to those new processes, which could negatively impact product flow, product quality or inventory levels.

• Inadvertent lapses or failures in our process, compliance or financial controls as we implement the new initiatives.

These negative impacts, or others, could adversely affect our business and results of operations. In addition, there is no assurance that we can complete the implementation of these initiatives in the manner or in the time-frame planned, or that, once implemented, they will result in the expected increases in the efficiency or productivity of our business. Failure to successfully implement them or their failure to produce the savings and productivity increases we anticipate could materially adversely affect our business and results of operations.

27

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table sets forth information concerning our purchases of common stock for the periods indicated (amounts in thousands, except share and per share amounts):

Period	Total Number of Shares Purchased (a)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans (b)	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Publicly Announced Plans
July 31, 2016 - August 27, 2016	1,899	$	11.66	—	$	203,706
August 28, 2016 - October 1, 2016	57,168		12.32	—		203,706
October 2, 2016 - October 29, 2016	1,651,538		12.13	1,651,440		183,673
Total	1,710,605		12.14	1,651,440		183,673

(a) Total number of shares purchased includes 59,165 shares of restricted stock repurchased in connection with employee tax withholding obligations under employee compensation plans, which are not purchases under any publicly announced plan.

(b) In November 2015, we announced a $300.0 million share repurchase plan. There was approximately $183.7 million remaining under the program as of the end of the third quarter. The repurchase program has no specific termination date and will expire when we have repurchased all securities authorized for repurchase thereunder, unless terminated earlier by our Board of Directors.

28

ITEM 5. OTHER INFORMATION

On November 17, 2016, the Company amended and restated the Company's Amended and Restated Bylaws (the "Bylaws") to add proxy access and to make other updates to the Bylaws (the “Amendments”), effective November 17, 2016. The Amendments include a new provisions Section 2.05 to the Bylaws that permits a stockholder, or a group of up to 20 stockholders, owning at least 3% of the number of outstanding shares of common stock of the Company continuously for at least three years, to include in the Company’s annual meeting proxy materials director nominees constituting up to 20% of the Board, provided that the stockholder(s) and the nominee(s) satisfy certain notice and other requirements specified in the Bylaws.

The foregoing description of the Amendments does not purport to be complete and is qualified in its entirety by reference to the full text of the Bylaws, as amended, a copy of which is attached hereto as Exhibit 3.1 to this Form 10-Q.

On November 22, 2016, we announced that its Board of Directors declared a quarterly cash dividend of $0.08 per share of its common stock, a 3.2% increase over the dividend rate from November 2015. The dividend is payable on December 19, 2016 to Chico’s FAS shareholders of record at the close of business on December 5, 2016.

ITEM 6. EXHIBITS

(a) The following documents are filed as exhibits to this Quarterly Report on Form 10-Q:

Exhibit 3.1	Amended and Restated Bylaws
Exhibit 3.2	Amended and Restated Articles of Incorporation
Exhibit 10.1	Amended Restricted Stock Agreement (Non-Soma Officers)
Exhibit 10.2	Amended Restricted Stock Agreement (Soma Officers)
Exhibit 31.1	Chico’s FAS, Inc. and Subsidiaries Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 - Chief Executive Officer
Exhibit 31.2	Chico’s FAS, Inc. and Subsidiaries Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 - Chief Financial Officer
Exhibit 32.1	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Exhibit 32.2	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Exhibit 101.INS	XBRL Instance Document
Exhibit 101.SCH	XBRL Taxonomy Extension Schema Document
Exhibit 101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
Exhibit 101.DEF	XBRL Taxonomy Definition Linkbase Document
Exhibit 101.LAB	XBRL Taxonomy Extension Label Linkbase Document
Exhibit 101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

29

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

			CHICO’S FAS, INC.
Date:	November 22, 2016	By:	/s/ Shelley G. Broader
			Shelley G. Broader
			Chief Executive Officer, President and Director
Date:	November 22, 2016	By:	/s/ Todd E. Vogensen
			Todd E. Vogensen
			Executive Vice President, Chief Financial Officer and Assistant Corporate Secretary
Date:	November 22, 2016	By:	/s/ David M. Oliver
			David M. Oliver
			Group Vice President Finance - Controller and Chief Accounting Officer

30

EX-3.1

Exhibit 3.1

AMENDED AND RESTATED

BYLAWS

OF

CHICO’S FAS, INC.

Revised November 17, 2016                            

AMENDED AND RESTATED

BYLAWS

OF

CHICO’S FAS, INC.

TABLE OF CONTENTS

TitlePage

ARTICLE I        Offices    1

Section 1.    PRINCIPAL OFFICE1

Section 2.    REGISTERED OFFICE; OTHER OFFICES1

ARTICLE II        Shareholders1

Section 1.    ANNUAL MEETING1

Section 2.    SPECIAL MEETINGS1

Section 3.    PRESIDING OFFICER1

Section 4.    PLACE OF MEETING1

Section 5.    NOTICE OF MEETING2

Section 6.    NOTICE OF ADJOURNED MEETING2

Section 7.    WAIVER OF CALL AND NOTICE OF MEETING3

Section 8.    QUORUM3

Section 9.    ADJOURNMENT: QUORUM FOR RECONVENED MEETING3

Section 10.    VOTING ON MATTERS OTHER THAN ELECTION OF

DIRECTORS3

Section 11.    VOTING FOR DIRECTORS4

Section 12.    VOTING LISTS4

Section 13.    VOTING OF SHARES4

Section 14.    PROXIES4

Section 15.    NO ACTION BY SHAREHOLDERS WITHOUT A MEETING5

Section 16.     ORGANIZATION AND CONDUCT OF BUSINESS5

Section 17.    INSPECTORS5

Section 18.    PROXY ACCESS5

ARTICLE III        Board of Directors16

Section 1.    GENERAL POWERS16

Section 2.    NUMBER, TENURE AND QUALIFICATIONS16

Section 3.    APPOINTMENT OF CHAIR16

Section 4.    ANNUAL AND REGULAR MEETINGS16

Section 5.    SPECIAL MEETINGS16

Section 6.    PRESIDING OFFICER16

Section 7.    NOTICE17

Section 8.    QUORUM17

Section 9.    ADJOURNMENT: QUORUM FOR ADJOURNED MEETING17

Section 10.    MANNER OF ACTING17

Revised November 17, 2016        

Title                                             Page

Section 11.    RESIGNATIONS AND REMOVAL17

Section 12.    VACANCIES17

Section 13.    COMPENSATION18

Section 14.    PRESUMPTION OF ASSENT18

Section 15.    INFORMAL ACTION BY BOARD18

Section 16.    MEETING BY TELEPHONE, ETC.18

ARTICLE IV        Officers18

Section 1.    NUMBER18

Section 2.    APPOINTMENT AND TERM OF OFFICE19

Section 3.    RESIGNATION19

Section 4.    REMOVAL19

Section 5.    VACANCIES19

Section 6.    DUTIES OF OFFICERS19

Section 7.    SALARIES19

Section 8.    DELEGATION OF DUTIES19

Section 9.    DISASTER EMERGENCY POWERS OF ACTING

OFFICERS20

ARTICLE V        Executive and Other Committees20

Section 1.    CREATION AND AUTHORITY OF COMMITTEES20

Section 2.    REMOVAL OR DISSOLUTION21

Section 3.    VACANCIES ON COMMITTEES21

Section 4.    CONDUCT OF MEETINGS OF COMMITTEES21

Section 5.    ABSENCE OF COMMITTEE MEMBERS21

Section 6.    INFORMAL ACTION21

ARTICLE VI        Indemnification of Directors and Officers21    

Section 1.    GENERAL21

Section 2.    ACTIONS BY OR IN THE RIGHT OF THE

CORPORATION22

Section 3.    OBLIGATION TO INDEMNIFY22

Section 4.    DETERMINATION THAT INDEMNIFICATION IS PROPER23

Section 5.    EVALUATION AND AUTHORIZATION23

Section 6.    PREPAYMENT OF EXPENSES23

Section 7.    NON-EXCLUSIVITY AND LIMITATIONS23

Section 8.    CONTINUATION OF INDEMNIFICATION RIGHT24

Section 9.    INSURANCE24

ARTICLE VII        Interested Parties24

Section 1.    GENERAL24

Section 2.    APPROVAL BY DIRECTORS OR COMMITTEES25

Section 3.    APPROVAL BY SHAREHOLDERS25

Revised November 17, 2016        

Title                                             Page

ARTICLE VIII    Certificates of Shares25

Section 1.    CERTIFICATES FOR SHARES25

Section 2.    SIGNATURES OF PAST OFFICERS26

Section 3.    TRANSFER AGENTS AND REGISTRARS26

Section 4.    TRANSFER OF SHARES27

Section 5.    LOST, STOLEN, OR DESTROYED CERTIFICATES27

ARTICLE IX        Record Date27

Section 1.    RECORD DATE FOR SHAREHOLDER ACTIONS27

Section 2.    RECORD DATE FOR DIVIDEND AND OTHER

DISTRIBUTIONS28

ARTICLE X        Dividends28

ARTICLE XI        Fiscal Year28

ARTICLE XII        Seal28

ARTICLE XIII    Stock in Other Corporations28

ARTICLE XIV    Amendments29

ARTICLE XV        General Provisions29

Section 1.    RELIANCE UPON BOOKS, REPORTS AND RECORDS29

Section 2.    TIME PERIODS29

ARTICLE XVI    Emergency Bylaws29

Section 1.    SCOPE OF EMERGENCY BYLAWS29

Section 2.    CALL AND NOTICE OF MEETING30

Section 3.    QUORUM AND VOTING30

Section 4.    APPOINTMENT OF TEMPORARY DIRECTORS30

Section 5.    MODIFICATION OF LINES OF SUCCESSION30

Section 6.    CHANGE OF PRINCIPAL OFFICE31

Section 7.    LIMITATION OF LIABILITY31

Section 8.    REPEAL AND CHANGE31

Revised November 17, 2016        

AMENDED AND RESTATED BYLAWS OF

CHICO’S FAS, INC.

ARTICLE I

Offices

Section 1.    PRINCIPAL OFFICE. The principal office of Chico’s FAS, Inc. (the “Corporation”) may be located within or without the County of Lee and the State of Florida as the board of directors (“Board of Directors” or “Board”) may designate or as the business of the Corporation may require from time to time.     

Section 2.    REGISTERED OFFICE; OTHER OFFICES. The address of the registered office of the Corporation, required by the Florida Business Corporation Act (“FBCA”) to be maintained in the State of Florida may be changed from time to time by the Board of Directors. The Corporation may also have offices at such other places both within and without the State of Florida as the Board of Directors or the Chief Executive Officer (“CEO”) may from time to time determine or the business of the Corporation may require.

ARTICLE II

Shareholders

Section 1.    ANNUAL MEETING. An annual meeting of the shareholders shall be held each year for the purpose of electing directors and for the transaction of such other business as may properly come before the meeting, at such date and time as shall be designated by the Board of Directors from time to time and stated in a notice of meeting.

Section 2.    SPECIAL MEETINGS. Special meetings of the shareholders may be called, for any purpose(s), at any time by (a) the Board of Directors, (b) the Chair of the Board, (if one is so appointed), (c) the CEO or the President of the Corporation, or (d) by the holders of not less than 25 percent of all the votes entitled to be cast on any issue proposed to be considered at such special meeting, if such shareholders sign, date and deliver to the Secretary of the Corporation (“Secretary”) one or more written demands for a special meeting, describing the purpose or purposes for which it is to be held. Special meetings of the shareholders of the Corporation may not be called by any other person(s). At any special meeting of shareholders, only such business shall be conducted, and only such proposals shall be acted upon, as shall have been set forth in the notice of such special meeting.

Section 3.    PRESIDING OFFICER. The Chair of the Board of the Corporation or the CEO, if there shall not be a Chair of the Board or if the Chair of the Board shall not be present and shall not have designated another director in his or her stead, or as the Chair of the Board should otherwise so direct, shall preside at each meeting of the shareholders.

Revised November 17, 2016                            Page 1             

Section 4.    PLACE OF MEETING. The Board of Directors may designate any place, within or without the State of Florida, for any annual or special meeting of the shareholders. The Board may, in its sole discretion, determine that shareholder meetings shall not be held at any place, but may instead be held solely by means of remote communication in accordance with Section 607.0701(4) of the FBCA for annual meetings or Section 607.0702(4) of the FBCA for special meetings. If authorized by the Board of Directors in its sole discretion, and subject to such guidelines and procedures as the Board may adopt, shareholders and proxy holders not physically present at a meeting of shareholders may, by means of remote communication (a) participate in a meeting of shareholders, and (b) be deemed present in person and vote at a meeting of shareholders whether such meeting is to be held at a designated place or solely by means of remote communication, provided that (i) the Corporation shall implement reasonable measures to verify that each person deemed present and permitted to vote at the meeting by means of remote communication is a shareholder of the Corporation or proxy holder; (ii) the Corporation shall implement reasonable measures to provide such shareholders and proxy holders a reasonable opportunity to participate in the meeting and to vote on matters submitted to the shareholders, including an opportunity to read or hear the proceedings of the meeting substantially concurrently with such proceedings; and (iii) if any shareholder or proxy holder votes or takes other action at the meeting by means of remote communication, a record of such vote or other action shall be maintained by the Corporation. A waiver of notice signed by all shareholders entitled to vote at a meeting may designate any place, within or without the State of Florida, as the place for the holding of such meeting. If no designation is made, the place of meeting shall be the principal office of the Corporation.

Section 5.    NOTICE OF MEETING. Written notice stating the place, date and time of the meeting of shareholders, the means of remote communications, if any, by which shareholders and proxy holders may be deemed to be present in person and vote at such meeting,and, in the case of a special meeting, the purpose(s) for which the meeting is called, shall be delivered not less than ten (10) nor more than sixty (60) days before the date of the meeting to each shareholder entitled to vote at such meeting, except that no notice of a meeting need be given to any shareholders for which notice is not required to be given under applicable law. Such notice may be delivered personally, by first-class United States mail, facsimile transmission, or “electronic transmission” (as defined under the FBCA), or by private mail carriers handling nationwide mail services, by or at the direction of the CEO, the President, the Secretary, the Board of Directors, or the person(s) calling the meeting. Such notice shall be deemed delivered when hand delivered or, if mailed, when deposited in the United States mail, postpaid and addressed to the shareholder at its address as it appears on the share transfer books of the Corporation. If communicated by electronic transmission, such notice shall be deemed delivered when transmitted to the shareholder in the manner authorized by the shareholder. Notice shall be deemed to have been given to all shareholders of record who share an address if notice is given in accordance with the “householding” rules set forth in Rule 14a-3(e) under the Securities Exchange Act of 1934, as amended (“Exchange Act”).

Revised November 17, 2016        Page 2

Section 6.    NOTICE OF ADJOURNED MEETING. Any meeting of the shareholders, annual or special, may adjourn from time to time to reconvene at the same or some other place (such reconvened meeting referred to herein as the “reconvened meeting”), and notice need not be given of the reconvened meeting if, prior to such adjournment, the new date, time or place thereof, and the means of remote communications, if any, by which shareholders and proxy holders may be deemed to be present in person and vote at such reconvened meeting, are announced at the meeting at which the adjournment is taken, and any business may be transacted at the reconvened meeting that might have been transacted on the original date of the meeting. If, however, the Board fixes a new record date for the reconvened meeting or if a new record date for the reconvened meeting is required to be fixed under law, notice of the reconvened meeting must be given in compliance with Section 5 of this Article II to each shareholder of record on the new record date entitled to notice of and to vote at such reconvened meeting.

Section 7.    WAIVER OF CALL AND NOTICE OF MEETING. Notice of any meeting of shareholders may be waived by any shareholder before or after the date and time stated in the notice. Such waiver must be in writing signed by the shareholder and delivered to the Corporation. Neither the business to be transacted at nor the purpose of any special or annual meeting need be specified in such waiver. A shareholder’s attendance at a meeting (a) waives such shareholder’s ability to object to lack of notice or defective notice of the meeting, unless the shareholder at the beginning of the meeting objects to holding the meeting or transacting business at the meeting, and (b) waives such shareholder’s ability to object to consideration of a particular matter at the meeting that is not within the purpose(s) described in the meeting notice, unless the shareholder objects to considering the matter when it is presented.

Section 8.    QUORUM. A majority of the outstanding shares of the Corporation entitled to vote, represented in person or by proxy, shall constitute a quorum at any meeting of the shareholders, unless the FBCA provides otherwise. Shares of the Corporation owned, directly or indirectly, by the Corporation or by any corporation of which the Corporation holds, directly or indirectly, a majority of the shares entitled to vote in the election of directors of such other corporation, shall not be counted for quorum purposes, except for shares held by it in a fiduciary capacity. Once a share is represented for any purpose at a meeting, it is deemed present for quorum purposes for the remainder of the meeting and for any adjournment of that meeting (unless a new record date is or must be set for any reconvened meeting), and the subsequent withdrawal of shares or shareholders after a quorum has been established at a meeting shall not affect the validity of any action taken at the meeting or any adjournment thereof.

Section 9.    ADJOURNMENT: QUORUM FOR RECONVENED MEETING. In the absence of a quorum, the holders of a majority of the shares entitled to vote who are present, in person or by proxy, may adjourn the meeting from time to time in the manner provided in Article II, Section 6 of these Bylaws. At such reconvened meeting at which a quorum shall be present or deemed to be present in person or by proxy, any business may be transacted which might have been transacted at the meeting as originally noticed.

Revised November 17, 2016        Page 3

Section 10.    VOTING ON MATTERS OTHER THAN ELECTION OF DIRECTORS. Except as otherwise provided by the Corporation’s articles of incorporation (“Articles of Incorporation”) or the FBCA, action on all matters other than the election of directors shall be approved at a meeting where a quorum is present, in person or by proxy, if the votes cast in favor of the action exceed the votes cast opposing the action by the holders of shares represented at the meeting and entitled to vote on the subject matter thereof.

Section 11.    VOTING FOR DIRECTORS. Directors shall be elected as set forth in the Articles of Incorporation, as amended or restated from time to time.

Section 12.    VOTING LISTS. After fixing the record date for a meeting, an alphabetical list of the names of all shareholders entitled to notice of the meeting, arranged by voting group, with the address of and the number, class and series, if any, of shares held by each, shall be prepared by the Secretary. The shareholders’ list shall, upon written demand, be available during regular business hours, for inspection by any shareholder and at his or her expense for a period of ten (10) days prior to the meeting date, or such shorter time as may exist between the record date and the meeting, and continuing through the meeting, at the Corporation’s principal office, at a place set forth in the meeting notice in the city where the meeting will be held, or at the office of the Corporation’s transfer agent or registrar. The shareholders’ list also shall be made available at the meeting and shall be subject to inspection by any shareholder at any time during the meeting or any adjournment. The shareholders’ list shall be prima facie evidence of the identity of shareholders entitled to examine the shareholders’ list or to vote at any meeting of the shareholders.

Section 13.    VOTING OF SHARES. Each shareholder entitled to vote at any meeting of shareholders shall be entitled to one vote in person or by proxy on each matter for each voting share held by such shareholder. Such right to vote shall be subject to the right of the Board of Directors to close the transfer books or to fix a record date for voting shareholders as hereinafter provided.

Section 14.    PROXIES. Every shareholder entitled to vote at a meeting of shareholders, or his duly authorized attorney-in-fact, may vote in person or may authorize another person or persons to act for the shareholder by proxy. A proxy must be authorized by (a) a signed written appointment form, with a signature affixed, by any reasonable means including, but not limited to, facsimile or electronic signature, or (b) an electric transmission appearing to have been, or containing or accompanied by such information or obtained under such procedures to reasonably ensure that electronic transmission was, transmitted by the shareholder authorizing such proxy. For these purposes, an electronic transmission includes, but is not limited to, telegrams, cablegrams, and transmissions through the internet. Any copy, facsimile transmission, or other reliable reproduction of the writing or electronic transmission may be substituted or used in lieu of the original writing or electronic transmission for any purposes for which the original writing or electronic transmission could be used if the copy, facsimile transmission or reproduction is a complete reproduction of the entire original writing or electronic transmission. Such proxy shall be filed with or transmitted to the Secretary, or other officer or agent authorized to tabulate votes, before or at the time of such meeting. No proxy shall be valid after eleven (11) months from the date of its execution, unless a

Revised November 17, 2016        Page 4

longer period is expressly provided in the proxy. A duly executed proxy shall be irrevocable if it conspicuously states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A shareholder may revoke any proxy which is not irrevocable by attending the meeting and voting in person, or by filing an instrument in writing with the Secretary revoking the proxy, or by giving a duly executed proxy bearing a later date. If an appointment form expressly provides therefor, any proxy holder may appoint, in writing, a substitute to act in his or her place.

Section 15.    NO ACTION BY SHAREHOLDERS WITHOUT A MEETING. Any action requiring or permitting a vote of the shareholders must be taken at an annual or special meeting of shareholders duly called in accordance with the terms of this Article II, and may not be taken by the written consent of shareholders.

Section 16. ORGANIZATION AND CONDUCT OF BUSINESS. The Chair of the Board of Directors, if any, or in his or her absence, the CEO, if any, or in his or her absence, the President, if any, or in his or her absence, a Vice President, if any, or in his or her absence, such person designated by the Board, or in the absence of such designation, such person as may be chosen by the holders of a majority of the shares entitled to vote at the meeting and who are present, in person or by proxy, shall call to order any meeting of shareholders and act as chair of the meeting. The Secretary shall act as secretary of the meeting, but in his or her absence the chair of the meeting may appoint any person to act as secretary of the meeting. The chair of any meeting of shareholders shall determine the order of business and the procedure at the meeting, including the manner of voting and the conduct of discussion as seems to him or her to be in order. The date and time of the opening and closing of the polls for each matter upon which shareholders will vote at the meeting shall be announced at the meeting.

Section 17.    INSPECTORS. For each meeting of the shareholders, the Board of Directors, the CEO or the President may appoint two inspectors to supervise the voting; and, if inspectors are so appointed, all questions respecting the qualification of any vote, the validity of any proxy, and the acceptance or rejection of any vote shall be decided by such inspectors. Before acting at any meeting, the inspectors shall take an oath to execute their duties with strict impartiality and according to the best of their ability. If any inspector shall fail to be present or shall decline to act, the CEO or the President shall appoint another inspector to act in his or her place. In case of a tie vote by the inspectors on any question, the presiding officer shall decide the issue.

Section 18.    PROXY ACCESS.

(a)    Proxy Access for Shareholder Director Nominations. Subject to the terms and conditions of these Bylaws, the Corporation shall include in its proxy statement for any annual meeting of shareholders at which directors are to be elected, and on its form of proxy (the proxy statement and form of proxy, collectively the “proxy materials”), the name of any person nominated for election to the Board at such meeting by an Eligible Shareholder (as defined below) submitted pursuant to this Section 18 of Article II (“Shareholder Nominee”), and will include in its proxy statement the Required Information (as defined below), if:

Revised November 17, 2016        Page 5

(i)     the Shareholder Nominee satisfies the eligibility requirements in Section 18(j) of this Article II;

(ii)     the Shareholder Nominee is identified in a timely notice (“Shareholder Notice”) that satisfies this Section 18 of Article II and is delivered by a shareholder that qualifies as, or is acting on behalf of, an Eligible Stockholder;

(iii)     the Eligible Stockholder expressly elects at the time of the delivery of the Shareholder Notice to have the Shareholder Nominee included in the Corporation’s proxy materials; and

(iv)     the additional requirements of these Bylaws are met.

(b)    Required Information. For purposes of this Section 18 of Article II, the “Required Information” means (i) the information set forth in the Schedule 14N provided with the Shareholder Notice concerning each Shareholder Nominee and the Eligible Shareholder that the Corporation determines is required to be disclosed in the Corporation’s proxy materials by the applicable requirements of the Exchange Act and the rules and regulations thereunder, and (ii) if the Eligible Shareholder so elects, a written statement (“Supporting Statement”) of the Eligible Shareholder, not to exceed 500 words, in support of each Shareholder Nominee, which must be provided at the same time as the Shareholder Notice for inclusion in the Corporation’s proxy materials for the annual meeting of shareholders.

(c)    Eligible Shareholder.

(i)    An “Eligible Shareholder” is a shareholder or group of shareholders (as described in Section 18(c)(ii) of this Article II) that: (A) Own and have Owned (as defined in Section 18(d) of this Article II) continuously for at least three (3) years (the “Minimum Holding Period”), as of the date of the Shareholder Notice, a number of shares of the Corporation that represents at least three percent (3%) of the issued and outstanding shares of the Corporation entitled to vote in the election of directors as of the date the Shareholder Notice (the “Required Shares”), (B) continues to own the Required Shares through the date of such annual meeting of shareholders, and (C) satisfies such additional requirements of, and complies with all applicable procedures set forth in, these Bylaws, including, without limitation, Section 18(c)(ii) of this Article II below.

(ii)    For purposes of determining qualification as an Eligible Shareholder:

(A)     a group of no more than twenty (20) shareholders and beneficial owners may aggregate the number of common shares of the Corporation that each group member has itself individually Owned continuously for the Minimum Holding Period; provided, that, no shareholder or beneficial owner, alone or together with any of its affiliates, may individually or as a member of a group qualify as more than one Eligible Shareholder under this Section 18 of Article II, and the same shares may not be attributable to more than one Eligible Shareholder;

Revised November 17, 2016        Page 6

(B)    a group of two or more funds (a “group of funds”) that are: (1) under common management and investment control, (2) under common management and funded primarily by a single employer, or (3) a “group of investment companies,” as such term is defined in Section 12(d)(1)(G)(ii) of the Investment Company Act of 1940, as amended, shall be treated as one shareholder or beneficial owner; and

(C)    Whenever an Eligible Shareholder consists of a group of shareholders and/or beneficial owners, any and all requirements and obligations for an Eligible Shareholder set forth in this Section 18 of Article II must be satisfied by and as to each such shareholder or beneficial owner member of such group, except that shares may be aggregated as specified in this Section 18(c) of Article II and except as otherwise provided in this Section 18 of Article II.

(d)    Ownership Requirements.

(i)    A shareholder or beneficial owner shall be deemed to “Own” only those outstanding shares of the Corporation as to which such person possesses both (A) the full voting and investment power pertaining to the shares, and (B) the full economic interest in (including the opportunity for profit and risk of loss on) such shares; provided, that the number of shares calculated in accordance with clauses (A) and (B) shall not include any shares (1) sold by such person or any of its affiliates in any transaction that has not been settled or closed, including any short sale, (2) borrowed by such person or any of its affiliates for any purposes or purchased by such person or any of its affiliates pursuant to an agreement to resell, or (3) subject to any option, warrant, forward contract, swap, contract of sale, or other derivative or similar agreement entered into by such person or any of its affiliates, whether any such instrument or agreement is to be settled with shares or with cash based on the notional amount or value of outstanding shares of the Corporation, in any such case which instrument or agreement has, or is intended to have, or if exercised would have, the purpose or effect of (y) reducing in any manner, to any extent or at any time in the future, such person’s or its affiliates’ full right to vote or direct the voting of any such shares, and/or (z) hedging, offsetting or altering to any degree any gain or loss arising from the full economic ownership of such shares by such person or its affiliate. For purposes of this Section 18 of Article II, the terms “affiliate” or “affiliates” shall have the meanings ascribed thereto under the rules and regulations promulgated under the Exchange Act.

(ii)    A shareholder or beneficial owner shall be deemed to “Own” shares held in the name of a nominee or other intermediary so long as the person retains the right to instruct how the shares are voted with respect to the election of directors and possesses the full economic interest in the shares. A person’s Ownership of shares shall be deemed to continue during any period in which such person has delegated any voting power by means of a proxy, power of attorney or other instrument or arrangement that is revocable at any time by such person.

Revised November 17, 2016        Page 7

(iii)    A shareholder or beneficial owner’s Ownership of shares shall be deemed to continue during any period in which the person has loaned such shares; provided, that (A) the person has the power to recall such loaned shares on no more than five (5) business days’ notice, (B) that person recalls the loaned shares within five (5) business days of being notified that its Shareholder Nominee will be included in the Corporation’s proxy materials for the relevant annual meeting of shareholders, and (C) that person holds the recalled shares through such annual meeting of shareholders.

(iv)    The terms “Owned,” “Owning” and other variations of the word “Own,” when used with respect to a shareholder or beneficial owner, shall have correlative meanings. Whether outstanding shares of the Corporation are “Owned” for these purposes shall be determined by the Board.

(e)    Shareholder Notice Requirements. In order to be in proper written form, the Shareholder Notice must include or be accompanied by the following information and documents (which collectively comprise the Shareholder Notice):

(i)     a copy of the Schedule 14N relating to the Shareholder Nominee that has been or concurrently is filed with the Securities and Exchange Commission (“SEC”) under the Exchange Act in accordance with SEC rules (which, for purposes of clarity, requires the Schedule 14N to be filed with the SEC prior to or concurrently with the delivery of the Shareholder Notice to the Corporation as a condition of compliance with the Shareholder Notice requirements of pursuant to Section 18(f) of the Article II);

(ii)    a written notice of the nomination of such Shareholder Nominee that includes the following additional information, representations, and warranties by the Eligible Shareholder:

(A)    the information required with respect to the nomination of directors pursuant to Section 8 of Article VI of the Articles of Incorporation;

(B)    a statement of the Eligible Shareholder (and in the case of a group, the written agreement of each shareholder or beneficial owner whose shares are aggregated for purposes of constituting an Eligible Shareholder), which statement(s) shall also be included in the Schedule 14N filed with the SEC (1) setting forth and certifying to the number of shares of the Corporation that the Eligible Shareholder Owns and has Owned continuously for at least three (3) years as of the date of the Shareholder Notice, (2) agreeing to continue to own such shares through the annual meeting of shareholders, and (3) stating whether it intends to maintain ownership of the Required Shares for at least one year following the annual meeting; and

(C)    the details of any relationship that existed within the past three years and that would have been described pursuant to Item 6(e) of Schedule 14N (or any successor item) if it existed on the date of submission of the Schedule 14N.

Revised November 17, 2016        Page 8

(iii)    the written agreement of the Eligible Shareholder (and in the case of a group, the written agreement of each shareholder or beneficial owner whose shares are aggregated for purposes of constituting an Eligible Shareholder) addressed to the Corporation, setting forth the following:

(A)    the representation and warranty of the Eligible Shareholder that the Eligible Shareholder satisfies the eligibility requirements set forth in Section 18(c) of this Article II and one or more written statements from the record holder of the Required Shares (and from each intermediary through which the Required Shares are or have been held during the Minimum Holding Period) verifying that, as of the date within five (5) calendar days prior to the date that the Shareholder Notice is delivered to or mailed and received by the Corporation, the Eligible Shareholder Owns, and has continually Owned for the Minimum Holding Period, the Required Shares.

(B)    the agreement of the Eligible Shareholder to provide (1) within five (5) business days of the record date for the annual meeting of shareholders, a written statement certifying the number of shares it Owns and has Owned continuously through the record date, and (2) immediate notice if the Eligible Shareholder ceases to Own any of the Required Shares prior to the date of the annual meeting of shareholders.

(C)    the representation and warranty of the Eligible Shareholder that the Eligible Shareholder: (1) will continue to Own and hold the Required Shares through the date of the annual meeting of shareholders, (2) acquired the Required Shares in the ordinary course of business and not with the intent to change or influence control at the Corporation, and does not presently have any such intent, (3) has not nominated and will not nominate for election to the Board at the annual meeting any person other than the Shareholder Nominee(s) being nominated pursuant to this Section 18 of Article II, (4) has not engaged and will not engage in, and has not been and will not be a participant (as defined in Item 4 of Exchange Act Schedule 14A) in, a solicitation within the meaning of Rule 14a-1(l) under the Exchange Act in support of the election of any individual as a director at the annual meeting other than its Shareholder Nominee or a nominee of the Board, (5) has not distributed and will not distribute to any shareholder any form of proxy for the annual meeting other than the form distributed by the Corporation, (6) has complied and will comply with all laws and regulations applicable to solicitations and the use, if any, of soliciting material in connection with the annual meeting, and (7) has provided and will provide facts, statements and other information in all communications with the Corporation and its shareholders that are or will be true and correct in all material respects and do not and will not omit a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading.

Revised November 17, 2016        Page 9

(D)     the agreement of the Eligible Shareholder to: (1) assume all liability stemming from any legal or regulatory violation arising out of the Eligible Shareholder’s communications with the shareholders of the Corporation or out of the information that the Eligible Shareholder provided to the Corporation, (2) indemnify and hold harmless (jointly with all other group members, in the case of a group member) the Corporation and its affiliates and each of its directors, officers and employees individually against any liability, loss, damages, expenses or other costs (including attorneys’ fees) in connection with any threatened or pending action, suit or proceeding, whether legal, administrative or investigative, against the Corporation or any of its directors, officers or employees arising out of any nomination submitted by the Eligible Shareholder pursuant to this Section 18 of Article II, or any solicitation activity in connection therewith, (3) comply with all laws, rules, regulations and listing standards applicable to its nomination and any solicitation in connection with the annual meeting, (4) file all materials described below in Section 18(g)(i)(C) of this Article II with the SEC, regardless of whether any such filing is required under Exchange Act Regulation 14A, or whether any exemption from filing is available for such materials under Exchange Act Regulation 14A, and (5) at the request of the Corporation, promptly, but in any event within five (5) business days after such request, provide to the Corporation prior to the day of the annual meeting such additional information as necessary or reasonably requested by the Corporation.

(E)    in the case of a nomination by a group of shareholders or beneficial owners that together is an Eligible Shareholder, the designation by all group members of one group member that is authorized to act on behalf of all members of the group with respect to the nomination and matters related thereto, including withdrawal of the nomination.

(f)    Delivery of Shareholder Notice. To be timely under this Section 18 of Article II, the Shareholder Notice must be delivered by a shareholder to the Secretary at the principal offices of the Corporation no earlier than 150 calendar days and no later than 120 calendar days before the first anniversary of the date that the definitive proxy statement was first sent to shareholders by the Corporation in connection with the preceding year’s annual meeting of shareholders (as stated in the Corporation’s proxy materials); provided, however, that in the event the annual meeting is more than 30 days before or more than 60 days after the first anniversary of the previous year’s annual meeting, or if no annual meeting was held in the preceding year, to be timely, the Shareholder Notice must be so delivered not earlier than the close of business on the 150th day prior to such annual meeting and not later than the close of business on the later of the 120th day prior to such annual meeting or the 10th day following the day on which public announcement of the date of such annual meeting is first made by the Corporation. In no event shall the public announcement of an adjournment or postponement of an annual meeting of shareholders commence a new time period (or extend any time period) for the giving of the Shareholder Notice as described above.

Revised November 17, 2016        Page 10

(g)    Eligible Shareholder Required Actions.

(i)    An Eligible Shareholder must:

(A)     within five (5) business days after the date of the Shareholder Notice, provide one or more written statements from the record holder(s) of the Required Shares and from each intermediary through which the Required Shares are or have been held, in each case during the requisite Minimum Holding Period, specifying the number of shares that the Eligible Shareholder Owns, and has Owned continuously, in compliance with this Section 18 of Article II;

(B)     include in the Schedule 14N filed with the SEC a statement certifying that the Eligible Shareholder (and in the case of a group, by each shareholder or beneficial owner whose shares are aggregated for purposes of constituting an Eligible Shareholder) Owns and has Owned the Required Shares in compliance with this Section 18 of Article II;

(C)     file with the SEC any solicitation or other communication by or on behalf of the Eligible Shareholder relating to the Corporation’s annual meeting of shareholders, one or more of the Corporation’s directors or director nominees or any Shareholder Nominee, regardless of whether any such filing is required under Exchange Act Regulation 14A or whether any exemption from filing is available for such solicitation or other communication under Exchange Act Regulation 14A; and

(D)     in the case of any group whose shares are aggregated for purposes of constituting an Eligible Shareholder, within five (5) business days after the date of the Shareholder Notice, provide documentation reasonably satisfactory to the Corporation that demonstrates that the number of shareholders and beneficial owners within such group does not exceed twenty (20), including whether a group of funds qualifies as one shareholder within the meaning of Section 18(c)(ii)(B) of this Article.

(ii)     The information provided pursuant to this Section 18(g) of Article II shall be deemed part of the Shareholder Notice for purposes of Section 18(e) of this Article II.

(h)    Shareholder Nominee Agreements.

(i)    Within the time period prescribed in Section 18(f) of this Article II for delivery of the Shareholder Notice, the Eligible Shareholder must also deliver to the Secretary a written representation and agreement (which shall be deemed part of the Shareholder Notice for purposes of this Section 18(e) of this Article II) of each Shareholder Nominee, which shall be signed by each Shareholder Nominee and shall represent, warrant, and agree that such Shareholder Nominee:

(A)    consents to being named in the Corporation's proxy statement and form of proxy as a nominee and to serving as a director if elected;

(B)     is not and will not become a party to any agreement, arrangement, or understanding with, and has not given any commitment or assurance to, any person or entity as to how such Shareholder Nominee, if elected as a director, will act or vote on any issue or question, unless such agreement, arrangement, or understanding has been disclosed to the Corporation and filed in the Schedule 14N filed by the Eligible Shareholder;

(C)    is not and will not become a party to (1) any direct or indirect compensatory payment, reimbursement, indemnification, or other financial agreement, arrangement, or understanding with any person or entity in connection with service or action as a director of the Corporation that has not been disclosed to the Corporation, (2) any agreement, arrangement or understanding with any person or entity as to how the Nominee would vote or act on any issue or question as a director (“Voting Commitment”) that has not been disclosed to the Corporation or (3) any Voting Commitment that could limit or interfere with the Shareholder Nominee’s ability to comply, if elected as a director of the Corporation, with its fiduciary duties under applicable law;

Revised November 17, 2016        Page 11

(D)     if elected as a director, will comply with all of the Corporation’s corporate governance, business conduct, conflict of interest, confidentiality, insider trading and stock ownership and trading policies and guidelines, and any other Corporation policies and guidelines applicable to directors; and

(E)    is not disqualified under Section 18(j) of this Article II.

(ii)    At the request of the Corporation, the Shareholder Nominee must promptly, but in any event within five (5) business days after such request, submit all completed and signed questionnaires required of the Corporation’s directors and provide to the Corporation such other information as it may reasonably request. The Corporation may request such additional information as necessary to permit the Corporation to determine if each Shareholder Nominee satisfies this Section 18 of Article II.

(i)    Permitted Number of Shareholder Nominees.

(i)    The maximum number of Shareholder Nominees submitted by all Eligible Shareholders that may be included in the Corporation’s proxy materials pursuant to this Section 18 of Article II, shall not exceed twenty percent (20%) of the number of directors in office as of the last day on which a Shareholder Notice may be delivered pursuant to Section 18(f) of this Article II with respect to the annual meeting of shareholders (rounding down to the nearest whole number, but not less than one) (such resulting number, the “Permitted Number”); provided, however, that the Permitted Number shall be reduced by: (A) any Shareholder Nominee whose name was submitted for inclusion in the Corporation’s proxy materials pursuant to this Section 18 of Article II but either is subsequently withdrawn or who the Board of Directors decides to nominate as a Board nominee, (B) directors in office who had been a Shareholder Nominee at any one of the preceding two annual meetings of shareholders and whose re-election at the upcoming annual meeting of shareholders is being recommended by the Board of Directors, (C) director candidates for which the Corporation shall have received one or more valid shareholder notices (whether or not subsequently withdrawn) nominating director candidates pursuant to Section 8 of Article VI of the Articles of Incorporation, and (D) directors in office or director candidates that in either case will be included in the Corporation’s proxy materials with respect to such an annual meeting as an unopposed (by the Corporation) nominee pursuant to any agreement, arrangement or other understanding between the Corporation and any shareholder or group of shareholders (other than any such agreement, arrangement or understanding entered into in connection with an acquisition of capital stock, by such shareholder or group of shareholders, from the Corporation), other than any such director who at the time of such annual meeting will have served as a director continuously, as a nominee of the Board, for at least two annual terms.

(ii)    In the event that one or more vacancies for any reason occurs after the deadline in Section 18(f) of this Article II for delivery of the Shareholder Notice but before the annual meeting of shareholders and the Board resolves to reduce the size of the Board in connection therewith, the Permitted Number shall be calculated based on the number of directors in office as so reduced.

Revised November 17, 2016        Page 12

(iii)    In the event that the number of Shareholder Nominees submitted by Eligible Shareholders pursuant to this Section 18 of Article II exceeds the Permitted Number, the Corporation shall determine which Shareholder Nominees shall be included in the Corporation’s proxy materials in accordance with the following provisions: each Eligible Shareholder (or in the case of a group, each group constituting an Eligible Shareholder) will select one Shareholder Nominee for inclusion in the Corporation’s proxy materials until the Permitted Number is reached, going in order of the amount (largest to smallest) of shares of the Corporation each Eligible Shareholder disclosed as Owned in its respective Shareholder Notice submitted to the Corporation. If the Permitted Number is not reached after each Eligible Shareholder (or in the case of a group, each group constituting an Eligible Shareholder) has selected one Shareholder Nominee, this selection process will continue as many times as necessary, following the same order each time, until the Permitted Number is reached.

(iv)    Following the determination of which Shareholder Nominees shall be included in the Corporation’s proxy materials, if any Shareholder Nominee who satisfies the eligibility requirements in this Section 18 of Article II thereafter is nominated by the Board, thereafter is not included in the Corporation’s proxy materials, or thereafter is not submitted for director election for any reason (including the Eligible Shareholder’s or Shareholder Nominee’s failure to comply with this Section 18 of Article II), no other nominee or nominees shall be included in the Corporation’s proxy materials or otherwise submitted for election as a director at the applicable annual meeting in substitution for such Shareholder Nominee.

(v) If, after the deadline for submitting a Shareholder Notice as set forth in Section 18(f) of this Article II, an Eligible Shareholder becomes ineligible or withdraws its nomination or a Shareholder Nominee becomes unwilling to serve on the Board of Directors, whether before or after the mailing of the definitive proxy statement, then the nomination shall be disregarded, and the Corporation: (A) shall not be required to include in its proxy statement or on any ballot or form of proxy the disregarded Shareholder Nominee or any successor or replacement nominee proposed by the Eligible Shareholder or by any other Eligible Shareholder, and (B) may otherwise communicate to its shareholders, including without limitation by amending or supplementing its proxy statement or ballot or form of proxy, that the Shareholder Nominee will not be included as a Shareholder Nominee in the proxy statement or on any ballot or form of proxy and will not be voted on at the annual meeting.

(j)    Shareholder Nominee Eligibility. Notwithstanding anything to the contrary contained in this Section 18 of Article II, the Corporation may omit from its proxy materials any Shareholder Nominee, and such nomination shall be disregarded and no vote on such Shareholder Nominee will occur, notwithstanding that proxies in respect of such vote may have been received by the Corporation, if:

(i)     (A) the Eligible Shareholder (or any member of any group of shareholders that together is such Eligible Shareholder) or Shareholder Nominee breaches any of its respective agreements, representations, or warranties set forth in the Shareholder Notice (or that are otherwise submitted pursuant to this Section 18 of Article II), (B) any of the information in the Shareholder Notice (or that is otherwise submitted pursuant to this Section 18 of Article II) was not, when provided, true, correct and complete, or (C) otherwise fails to comply with its obligations pursuant to these Bylaws, including, but not limited to the requirements of this Section 18 of Article II;

(ii)     the Shareholder Nominee: (A) is not an “independent director” for purposes of membership of the Board of Directors or any committee thereof under any applicable stock exchange listing standards, any applicable rules of the SEC, or any publicly-disclosed standards used by the Board in determining and disclosing the independence of the Corporation’s directors, including, but not limited to, the corporate governance guidelines or committee charters of the Corporation, (B) does not qualify as independent under the audit committee independence requirements set forth under any applicable stock exchange listing standards, as a “non-employee director” under Exchange Act Rule 16b-3, or as an “outside director” for the purposes of Section 162(m) of the Internal Revenue Code (or any successor provision), (C) is or has been, within the past three (3) years, an officer or director of a competitor, as defined in Section 8 of the Clayton Antitrust Act of 1914, as amended, (D) is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses) or has been convicted in a criminal proceeding within the past ten (10) years, or (E) is subject to any order of the type specified in Rule 506(d) of Regulation D promulgated under the Securities Act of 1933, as amended; or

(iii)     the election of the Shareholder Nominee to the Board of Directors would cause the Corporation to be in violation of the Articles of Incorporation, these Bylaws, any applicable state or federal law, rule, or regulation, or any applicable listing standard.

(k)    Restrictions on Re-Nomination. Any Shareholder Nominee who is included in the Corporation’s proxy materials for a particular annual meeting of shareholders but either (i) withdraws from or becomes ineligible or unavailable for election at the annual meeting of shareholders for any reason, including for the failure to comply with any provision of these Bylaws (provided that in no event shall any such withdrawal, ineligibility or unavailability commence a new time period or extend any time period for the giving of a Shareholder Notice), or (ii) does not receive a number of votes cast in favor of his or her election at least equal to twenty-five percent (25%) of the shares present in person or represented by proxy and entitled to vote in the election of directors, will be ineligible to be a Shareholder Nominee pursuant to this Section 18 of Article II for the next two (2) annual meetings of shareholders.

(l)    Additional Provisions.

(i)    Notwithstanding the foregoing provisions of this Section 18 of Article II, unless otherwise required by law or otherwise determined by the Board of Directors, if (A) the Eligible Shareholder, or (B) a qualified representative of the Eligible Shareholder does not appear at the annual meeting of shareholders of the Corporation to present its Shareholder Nominee or

Revised November 17, 2016        Page 13

Shareholder Nominees, such nomination or nominations shall be disregarded, and no vote on such Shareholder Nominee or Shareholder Nominees will occur, notwithstanding that proxies in respect of such vote may have been received by the Corporation. For purposes of this Section 18 of Article II, to be considered a qualified representative of the Eligible Shareholder, a person must be authorized by a writing executed by such Eligible Shareholder or an electronic transmission delivered by such Eligible Shareholder to act for such Eligible Shareholder as proxy at the annual meeting of shareholders and such person must produce such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at the annual meeting of shareholders.

(ii)    In the event that any information or communications provided by the Eligible Shareholder or any Shareholder Nominees to the Corporation or its shareholders is not, when provided, or thereafter ceases to be, true, correct and complete in all material respects (including omitting a material fact necessary to make the statements made, in light of the circumstances under which they were made, not misleading), each Eligible Shareholder or Shareholder Nominee, as the case may be, shall promptly notify the Secretary and provide the information that is required to make such information or communication true, correct, complete and not misleading, it being understood that providing any such notification shall not be deemed to cure any such defect or limit the Corporation’s right to omit a Shareholder Nominee from its proxy materials pursuant to this Section 18 of Article II.

(iii)    Notwithstanding anything to the contrary contained in this Section 18 of Article II, the Corporation may omit from its proxy materials any information or Supporting Statement that it, in good faith, believes (A) is untrue in any material respect (or omits a material fact necessary in order to make the statements made, in light of the circumstances under which they are made, not misleading), (B) directly or indirectly impugns character, integrity or personal reputation of, or directly or indirectly makes charges concerning improper, illegal or immoral conduct or associations, without factual foundation, with respect to, any person, or (C) if included, would otherwise violate the SEC proxy rules or any other applicable law, rule or regulation.

(iv)    Nothing in this Section 18 of Article II shall limit the ability of the Corporation to solicit proxies against any Shareholder Nominee or to include in its proxy materials its own statements or any other additional information relating to any Eligible Shareholder or Shareholder Nominee.

(v)    The Board of Directors (and any other person or body authorized by the Board) shall have the power and authority to interpret this Section 18 of Article II and to make any and all determinations necessary or advisable to apply this Section 18 of Article II to any persons, facts or circumstances, including the power to determine (A) whether one or more shareholders or beneficial owners qualifies as an Eligible Shareholder, (B) whether a Shareholder Notice complies with this Section 18 of Article II and has otherwise met the requirements of this Section 18 of Article II, (C) whether a Shareholder Nominee satisfies the qualifications and requirements in this Section 18 of Article II, and (iv) whether any and all requirements of this Section 18 of Article II (or any applicable requirements of Section 8 of Article VI of the Articles of Incorporation) have been satisfied; provided, however, that, if any determination must be made at the annual meeting of shareholders, the Chairman of the meeting shall have the power and authority to make such

Revised November 17, 2016        Page 14

determination, unless otherwise determined by the Board. Any such interpretation or determination adopted in good faith by the Board (or any other person or body authorized by the Board) or the Chair of the meeting, as the case may be, shall be binding on all persons, including the Corporation and its shareholders (including any beneficial owners).

(m)    Exclusive Method. This Section 18 of Article II shall be the exclusive method for shareholders of the Corporation to include nominees for election to the Board of Directors in the Corporation’s proxy materials.

ARTICLE III

Board of Directors

Section 1.    GENERAL POWERS. The business and affairs of the Corporation shall be managed by its Board of Directors, which may exercise all such powers of the Corporation and do all such lawful acts and things as may be exercised or done by the Corporation, except as otherwise provided by law, the Articles of Incorporation or these Bylaws which are directed or required to be exercised or done only by the shareholders.

Section 2.    NUMBER, TENURE AND QUALIFICATIONS. The number of directors of the Corporation shall be not less than three (3) nor more than twelve (12), with the exact number to be fixed by the directors from time to time by an affirmative vote of a majority of the entire Board of Directors. Any increase in the number of directors shall be effective immediately. Each director shall hold office until his or her term of office expires and until such director’s successor shall have been duly elected and shall have qualified, unless such director sooner dies, resigns or is removed by the shareholders at any annual or special meeting. Any decrease in the number of directors shall be effective at the time of the next succeeding annual meeting of the shareholders unless, at the time of such decrease, there shall be vacancies on the Board which are being eliminated by the decrease, in which case such decrease may become effective at any time prior to the next succeeding annual meeting to the extent of the number of vacancies, provided, however, that in no event shall any decrease in the number of directors shall have the effect of shortening the term of any incumbent director. It shall not be necessary for directors to be shareholders. All directors shall be natural persons who are 18 years of age or older.

Section 3.    APPOINTMENT OF CHAIR. The Board of Directors may appoint a Chair of the Board and, if the Board so desires, a Vice Chair, each with such responsibilities as the Board may determine to be appropriate.

Section 4.    ANNUAL AND REGULAR MEETINGS. The annual meeting of the Board of Directors shall be held without other notice than this bylaw, immediately after and at the same place as the annual meeting of shareholders. The Board may provide, by resolution, for the holding of other regular meetings, which meetings shall be held on such date(s), at such time(s), and at such place(s) as established by such resolution. A notice of each regular meeting other than by resolution shall not be required.

Revised November 17, 2016        Page 15

Section 5.    SPECIAL MEETINGS. Special meetings of the Board of Directors may be called by the Chair of the Board, if there be one, or by the CEO or President. Such person may fix the place for holding any special meetings of the Board of Directors. If no such designation is made, the place of meeting shall be the principal office of the Corporation.

Section 6.    PRESIDING OFFICER. The Chair of the Board of Directors or the designated lead director (if there is not a Chair) shall preside at each meeting of the Board. In the absence of a Chair of the Board and a designated lead director, the Vice-Chair (if any) or the CEO shall preside at each meeting of the Board of Directors.

Section 7.    NOTICE. Whenever notice of a meeting is required, including, without limitation, any special meeting of the Board, written notice stating the place, day and hour of the meeting shall be delivered at least two (2) days prior thereto to each director at his or her residence or business address, either personally, or by United States mail, telegraph, teletype, facsimile or other form of electronic transmission, or by private mail carriers handling nationwide mail services. If a notice of meeting is sent by regular mail, such notice shall be deemed delivered five (5) days after its deposit in the United States mail, if correctly addressed and mailed postpaid. Any director may waive notice of any meeting, either before, at or after such meeting. The attendance of a director at a meeting shall constitute a waiver of notice of such meeting, except where a director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened and so states at the beginning of the meeting or promptly upon arrival at the meeting.

Section 8.    QUORUM. A majority of the total number of directors serving at the time of any meeting shall constitute a quorum for transacting business at any meeting of the Board of Directors.

Section 9.    ADJOURNMENT: QUORUM FOR ADJOURNED MEETING. In the absence of a quorum of the Board, a majority of the directors so present may adjourn the meeting from time to time without further notice. At any reconvened meeting of the Board at which a quorum shall be present, any business may be transacted which might have been transacted at the meeting as originally noticed.

Section 10.    MANNER OF ACTING. Except as otherwise required by law or the Articles of Incorporation, the act of a majority of the directors present at the meeting in which a quorum is present shall be the act of the Board of Directors.

Section 11.    RESIGNATIONS AND REMOVAL. Any director may resign at any time by delivering his written resignation to the Secretary, such resignation to specify whether it will be effective at a particular time, upon receipt by the Secretary or at the pleasure of the Board of Directors. If no such specification is made, it shall be deemed effective at the pleasure of the Board. Any director may be removed by the shareholders only for cause and in compliance with the provisions set forth in the Articles of Incorporation, as amended or restated from time to time, setting forth the requirements and procedures for the removal of directors by shareholders, provided, that any such

Revised November 17, 2016        Page 16

removal shall be without prejudice to the contract rights, if any, of the person removed. Directors may not be removed by the shareholders without cause.

Section 12.    VACANCIES. If any vacancy occurs on the Board of Directors, including any vacancy created by reason of an increase in the number of directors of the Corporation, such vacancy may be filled by the affirmative vote of a majority of the remaining directors, although less than a quorum of the Board of Directors, or by a sole remaining director, or by the shareholders, unless otherwise provided in the Articles of Incorporation. Any director elected in accordance with the preceding sentence to fill a vacancy shall hold office until the next meeting of shareholders at which directors are elected and until such director’s successor shall have been elected and qualified.

Section 13.    COMPENSATION. By resolution of the Board of Directors, directors may receive fixed fees and other compensation for their services as directors, including, without limitation, their services as members of committees of the Board, and reimbursement for expenses incurred for attendance at meetings of the Board and its committees. The compensation of directors shall be on such basis as determined by the Board. No payment shall preclude, in and of itself, any director from serving the Corporation in any other capacity and receiving compensation therefore.

Section 14.    PRESUMPTION OF ASSENT. A director of the Corporation who is present at a meeting of the Board of Directors at which action on any corporate matter is taken shall be presumed to have assented to the action taken unless such director objects at the beginning of the meeting (or promptly upon his arrival) to the holding of the meeting or the transacting of specified business at the meeting or such director votes against such action or abstains from voting in respect of such matter.

Section 15.    INFORMAL ACTION BY BOARD. Any action required or permitted to be taken by any provision of law, the Articles of Incorporation or these Bylaws at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting if each and every member of the Board or of such committee, as the case may be, consents thereto and the action taken is evidenced by one or more written consents describing the action taken signed by each director. Such written consent or consents shall be filed in the minutes of the proceedings of the Board or any such committee, as the case may be. A written consent of a director may be signed with an electronic signature adopted by such consenting director with the intent to authenticate the written consent. Action taken under this section is effective when the last director signs the consent, unless the consent specifies a different effective date, in which case it is effective on the date so specified. A consent so signed has the effect of a meeting vote and may be described as such in any document.

Section 16.    MEETING BY TELEPHONE, ETC. Directors or the members of any committee thereof may participate in a meeting of the Board of Directors or of any such committee, as the case may be, through the use of any means of communication by which all directors participating in the meeting may simultaneously hear each other during the meeting (including, without limitation, by means of a conference telephone, video phone, webcast, web conference, or similar communications equipment). A director participating in a meeting by this means shall constitute presence in person at the meeting.

ARTICLE IV

Officers

Section 1.    NUMBER. The officers of the Corporation shall include a CEO, a CFO, a Secretary, a Treasurer, and such other executive officers as the Board may determine, each of whom shall be appointed by the Board of Directors. The CEO, in turn, may appoint one or more Vice Presidents and one or more Assistant Secretaries and Assistant Treasurers, as he or she shall deem appropriate. The same individual may simultaneously hold more than one office in the Corporation.

Section 2.    APPOINTMENT AND TERM OF OFFICE. The officers of the Corporation shall be appointed by the Board of Directors or the CEO at the annual meeting of the Board. If the appointment of officers shall not be made at such meeting, such appointment shall be made as soon thereafter as is convenient. A duly appointed officer may appoint one or more officers or assistant officers if authorized by the Board. Each officer shall hold office until such officer’s successor shall have been duly appointed and shall have qualified, unless such officer sooner dies, resigns or is removed by the Board or by the CEO. The appointment of an officer does not itself create contract rights.

Section 3.    RESIGNATION. An officer may resign at any time by delivering notice to the Corporation. A resignation shall be effective when the notice is delivered unless the notice specifies a later effective date. An officer’s resignation shall not affect the Corporation’s contract rights, if any, with the officer.

Section 4.    REMOVAL. The Board of Directors may remove any officer or agent of the Corporation at any time with or without cause. Any officer or assistant officer, if appointed by the CEO, may likewise be removed by the CEO. An officer’s removal shall not affect the officer’s contract rights, if any, with the Corporation. Any officer or assistant officer, if appointed by another officer, may likewise be removed by the officer who so appointed them or by the Board of Directors or the CEO. Election or appointment of an officer or agent shall not of itself create contract rights.

Section 5.    VACANCIES. A vacancy, however occurring, in any office may be filled by the Board of Directors for the unexpired portion of the term, unless such authority is delegated by the Board to the CEO.

Section 6.    DUTIES OF OFFICERS. The CEO shall be the chief executive officer of the Corporation. The Secretary shall be responsible for preparing minutes of the directors’ and shareholders’ meetings and for authenticating records of the Corporation. Subject to the foregoing, the officers of the Corporation shall have such powers and duties as ordinarily pertain to their respective offices and such additional powers and duties specifically conferred by law, the Articles of Incorporation and these Bylaws, or as may be assigned to them from time to time by the Board of Directors, the CEO, or an officer authorized by either the Board or the CEO to prescribe the duties of other officers.

Section 7.    SALARIES. The salaries and other compensation of the officers shall be fixed from time to time by the Board of Directors, and no officer shall be prevented from receiving a salary or other compensation by reason of the fact, in and of itself, that the officer is also a director of the Corporation.

Section 8.    DELEGATION OF DUTIES. In the absence or disability of any officer of the Corporation or for any other reason deemed sufficient by the Board of Directors, the Board may delegate the powers or duties of such officer to any other officer or to any director for the time being. In the absence or disability of any officer of the Corporation appointed by the CEO or for any other reason deemed sufficient by the CEO, the CEO may delegate the powers or duties of any such officer appointed by the CEO to any other officer or to any director for the time being.

Section 9.    DISASTER EMERGENCY POWERS OF ACTING OFFICERS. Unless otherwise expressly prescribed by action of the Board of Directors taken pursuant to Article XVI of these Bylaws, if, as a result of some catastrophic event, a quorum of the Corporation’s directors cannot readily be assembled and the CEO is unable to perform the duties of the office of CEO and/or other officers are unable to perform their duties, (a) the powers and duties of CEO shall be held and performed by that officer of the Corporation highest on the list of successors (adopted by the Board for such purpose) who shall be available and capable of holding and performing such powers and duties; and, absent any such prior designation, by the President; or, if the President is not available and capable of holding and performing such powers and duties, then by that Executive Vice President who shall be available and capable of holding and performing such powers and duties whose surname commences with the earliest letter of the alphabet among all such Executive Vice Presidents; or, if no Executive Vice President is available and capable of holding and performing such powers and duties, then by the Secretary; or, if the Secretary is likewise unavailable, by the Treasurer; (b) the officer so selected to hold and perform such powers and duties shall serve as Acting CEO until the CEO again becomes capable of holding and performing the powers and duties of CEO, or until the Board shall have elected a new CEO or designated another individual as Acting CEO; (c) such officer (or the CEO, if such person is still serving) shall have the power, in addition to all other powers granted to the chief executive officer by law, the Articles of Incorporation, these Bylaws and the Board of Directors, to appoint acting officers to fill vacancies that may have occurred, either permanently or temporarily, by reason of such disaster or emergency, each of such acting appointees to serve in such capacity until the officer for whom the acting appointee is acting is capable of performing the duties of such office, or until the Board shall have designated another individual to perform such duties or shall have elected or appointed another person to fill such

Revised November 17, 2016        Page 17

office; (d) each acting officer so appointed shall be entitled to exercise all powers invested by law, the Articles of Incorporation, these Bylaws and the Board in the office in which such person is serving; and (e) anyone transacting business with the Corporation may rely upon a certificate signed by any two officers of the Corporation that a specified individual has succeeded to the powers and duties of the CEO or such other specified office. Any person, firm, corporation or other entity to which such certificate has been delivered by such officers may continue to rely upon it until notified of a change by means of a writing signed by two officers of this Corporation.

ARTICLE V

Executive and Other Committees

Section 1.    CREATION AND AUTHORITY OF COMMITTEES. The Board of Directors may from time to time designate an Executive Committee and one or more other committees of the Board, with such lawfully delegable powers and duties as it thereby confers, to serve at the pleasure of the Board. The Board shall, for those committees designate at least two (2) or more of the directors of the Corporation to serve as members. Any committee so designated, to the extent permitted by law and to the extent provided in a Board resolution, the Corporation’s corporate governance guidelines, or the charter for such committee, shall have and may exercise the powers and authority of the Board in the management of the business and affairs of the Corporation.

Section 2.    REMOVAL OR DISSOLUTION. Any committee of the Board of Directors may be dissolved by the Board at any meeting. Further, the members of each committee serve at the pleasure of the Board and any member of such committee may be removed by the Board of Directors with or without cause. Such removal shall be without prejudice to the contract rights, if any, of the person so removed.

Section 3.    VACANCIES ON COMMITTEES. Vacancies on any committee of the Board of Directors shall be filled by the Board.

Section 4.    CONDUCT OF MEETINGS OF COMMITTEES. Each committee designated by the Board of Directors may determine, make, alter, and repeal the procedural rules for meeting and conducting its business and shall act in accordance therewith, except as otherwise required by law or as provided by the Board or these Bylaws.

Section 5.    ABSENCE OF COMMITTEE MEMBERS. The Board of Directors may designate one or more directors as alternate members of any committee of the Board, who may replace at any meeting of such committee, any member not able to attend.

Section 6.    INFORMAL ACTION. Any committee of the Board of Directors may take such informal action and hold such informal meetings as allowed by the provisions of Sections 15 and 16 of Article III of these Bylaws.

ARTICLE VI

Indemnification of Directors and Officers

Section 1.    GENERAL.

(a)    To the fullest extent permitted by law from time to time, and consistent with the principles set forth in Section 1(b) below, the Corporation shall be entitled but not obligated to indemnify any person who is or was a party, or is threatened to be made a party, to any threatened, pending or completed action, suit or other type of proceeding (other than an action by or in the right of the Corporation), whether civil, criminal, administrative, investigative or otherwise, and whether formal or informal, by reason of the fact that such person is or was a director or officer of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise.

(b)    Any person for whom indemnification is authorized under Section 1(a) above shall be indemnified against all liabilities, judgments, amounts paid in settlement, penalties, and fines (including attorneys’ fees and court costs) actually and reasonably incurred in connection with any such action, suit or other proceeding, including any appeal thereof. Indemnification shall be available only if the person to be indemnified acted in good faith and in a manner such person reasonably believed to be in, or not opposed to, the best interests of the Corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person’s conduct was unlawful. The termination of any such action, suit or other proceeding by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner that such person reasonably believed to be in, or not opposed to, the best interests of the Corporation or, with respect to any criminal action or proceeding, had reasonable cause to believe that such person’s conduct was unlawful.

Section 2.    ACTIONS BY OR IN THE RIGHT OF THE CORPORATION.

(a)To the fullest extent permitted by law from time to time, and consistent with the principles set forth in Section 2(b) below the Corporation shall be entitled but not obligated to indemnify any person who is or was a party, or is threatened to be made a party, to any threatened, pending or completed action, suit, or other type of proceeding (as further described in Section 1 of this Article VI) by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that such person is or was a director or officer of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise.

(b)Any person for whom indemnification is authorized under Section 2(a) above shall be indemnified against expenses (including attorneys’ fees and court costs) and amounts paid in settlement not exceeding, in the judgment of the Board of Directors, the estimated expenses of litigating the action, suit or other proceeding to conclusion, that are actually and reasonably incurred

Revised November 17, 2016        Page 18

in connection with the defense or settlement of such action, suit or other proceeding, including any appeal thereof. Indemnification shall be available only if the person to be indemnified acted in good faith and in a manner such person reasonably believed to be in, or not opposed to, the best interests of the Corporation. Notwithstanding the foregoing, no indemnification shall be made under this Section 2 in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable unless, and only to the extent that, the court in which such action, suit or other proceeding was brought, or any other court of competent jurisdiction, shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnification for such expenses that such court shall deem proper.

Section 3.    OBLIGATION TO INDEMNIFY. To the extent that a director or officer has been successful on the merits or otherwise in defense of any action, suit or other proceeding referred to in Section 1 or Section 2 of this Article VI, or in the defense of any claim, issue or matter therein, such person shall, upon application, be indemnified against expenses (including attorneys’ fees and court costs) actually and reasonably incurred by such person in connection therewith.

Section 4.    DETERMINATION THAT INDEMNIFICATION IS PROPER. Indemnification pursuant to Section 1 or Section 2 of this Article VI, unless made under the provisions of Section 3 of this Article VI or unless otherwise made pursuant to a determination by a court, shall be made by the Corporation only as authorized in the specific case upon a determination that the indemnification is proper in the circumstances because the indemnified person has met the applicable standard of conduct set forth in Section 1 or Section 2 of this Article VI. Such determination shall be made under one of the following procedures:

(a)    by the Board of directors by a majority vote of a quorum consisting of directors who were not parties to the action, suit or other proceeding to which the indemnification relates;

(b)    if such a quorum is not obtainable or, even if obtainable, by majority vote of a committee duly designated by the Board of Directors (the designation being one in which directors who are parties may participate) consisting solely of two or more directors not at the time parties to such action, suit or other proceeding;

(c)    by independent legal counsel (i) selected by the Board of Directors in accordance with the requirements of subsection (a) or by a committee designated under subsection (b) or (ii) if a quorum of the directors cannot be obtained and a committee cannot be designated, selected by majority vote of the full Board of Directors (the vote being one in which directors who are parties may participate); or

(d)    by the shareholders of the Corporation by a majority vote of a quorum consisting of shareholders who were not parties to such action, suit or other proceeding or, if no such quorum is obtainable, by a majority vote of shareholders who were not parties to such action, suit or other proceeding.

Revised November 17, 2016        Page 19

Section 5.    EVALUATION AND AUTHORIZATION. Evaluation of the reasonableness of expenses and authorization of indemnification shall be made in the same manner as is prescribed in Section 4 of this Article VI for the determination that indemnification is permissible; provided, however, that if the determination as to whether indemnification is permissible is made by independent legal counsel, the persons who selected such independent legal counsel shall be responsible for evaluating the reasonableness of expenses and may authorize indemnification.

Section 6.    PREPAYMENT OF EXPENSES. Expenses (including attorneys’ fees and court costs) incurred by a director or officer in defending a civil or criminal action, suit or other proceeding referred to in Section 1 or Section 2 of this Article VI may, in the discretion of the Board of Directors, be paid by the Corporation in advance of the final disposition thereof. Any such payment shall be made only upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if such person is ultimately found not to be entitled to indemnification by the Corporation pursuant to this Article VI.

Section 7.    NON-EXCLUSIVITY AND LIMITATIONS. The indemnification and advancement of expenses provided pursuant to this Article VI shall not be deemed exclusive of any other rights to which a person may be entitled under any law, bylaw, agreement, vote of shareholders or disinterested directors, or otherwise, both as to action in such person’s official capacity and as to action in any other capacity while holding office with the Corporation. Such indemnification and advancement of expenses shall continue as to any person who has ceased to be a director or officer and shall inure to the benefit of such person’s heirs and personal representatives. The Board of Directors may, at any time, approve indemnification of or advancement of expenses to any other person that the Corporation has the power by law to indemnify, including, without limitation, employees and agents of the Corporation. In all cases not specifically provided for in this Article VI, indemnification or advancement of expenses shall not be made to the extent that such indemnification or advancement of expenses is expressly prohibited by law.

Section 8.    CONTINUATION OF INDEMNIFICATION RIGHT.

(a)Unless expressly otherwise provided when authorized or ratified by this Corporation, indemnification and advancement of expenses as provided for in this Article VI shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors, and administrators of such person.

(b)For purposes of this Article VI, the term “Corporation” includes, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger, so that any person who is or was a director or officer of a constituent corporation, or is or was serving at the request of a constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, is in the same position under this Article VI with respect to the resulting or surviving corporation as such person would have been with respect to such constituent corporation if its separate existence had continued.

Revised November 17, 2016        Page 20

Section 9.    INSURANCE. The Corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or who is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity or arising out of such person’s status as such, whether or not the corporation would have the power to indemnify such person against the liability under Section 1 or Section 2 of this Article VI or under applicable law.

ARTICLE VII

Interested Parties

Section 1.    GENERAL. No contract or other transaction between the Corporation and any one or more of its directors or any other corporation, firm, association or entity in which one or more of its directors are directors or officers or are financially interested shall be either void or voidable because of such relationship or interest, because such director or directors were present at the meeting of the Board of Directors or of a committee thereof which authorizes, approves or ratifies such contract or transaction or because such director’s or directors’ votes are counted for such purpose if: (a) the fact of such relationship or interest is disclosed or known to the Board of Directors or committee which authorizes, approves or ratifies the contract or transaction by a vote or consent sufficient for the purpose without counting the votes or consents of such interested directors; (b) the fact of such relationship or interest is disclosed or known to the shareholders entitled to vote on the matter, and they authorize, approve or ratify such contract or transaction by vote or written consent; or (c) the contract or transaction is fair and reasonable as to the Corporation at the time it is authorized by the Board of Directors, a committee thereof or the shareholders.

Section 2.    APPROVAL BY DIRECTORS OR COMMITTEES. For purposes of Section 1(a) of this Article VII, a conflict of interest transaction shall be authorized, approved, or ratified if it receives the affirmative vote of a majority of the directors on the Board of Directors, or on the committee, who have no relationship or interest in the transaction described in Section 1 of this Article VII, but a transaction may not be authorized, approved, or ratified under this Section by a single director. If a majority of the directors who have no such relationship or interest in the transaction vote to authorize, approve, or ratify the transaction, a quorum is present for the purpose of taking action under Section 1(a) of this Article VII. The presence of, or a vote cast by, a director with such relationship or interest in the transaction does not affect the validity of any action taken under Section 1(a) of this Article VII if the transaction is otherwise authorized, approved, or ratified as provided in Section 1(a) of this Article VII, but such presence or vote of those directors may be counted for purposes of determining whether the transaction is approved under other applicable law.

Section 3.    APPROVAL BY SHAREHOLDERS. For purposes of Section 1(b) of this Article VII, a conflict of interest transaction shall be authorized, approved or ratified if it receives the vote of a majority of the shares entitled to be counted under this Section 3. Shares owned by or voted under the control of a director who has a relationship or interest in the transaction described in Section 1 of this Article VII may not be counted in a vote of shareholders to determine whether

Revised November 17, 2016        Page 21

to authorize, approve or ratify a conflict of interest transaction under Section 1(b) of this Article VII. The vote of the shares owned by or voted under the control of a director who has a relationship or interest in the transaction described in Section 1 of this Article VII, shall be counted, however, in determining whether the transaction is approved under other sections of these Bylaws and applicable law. A majority of those shares that would be entitled, if present, to be counted in a vote on the transaction under this Section 3 shall constitute a quorum for the purpose of taking action under this Section 3.

ARTICLE VIII

Certificates of Shares

Section 1.    CERTIFICATES FOR SHARES. Shares shall either be represented by certificates or shall be uncertificated and represented by book entry registered in the name of the shareholder on the books and records of the Corporation or its transfer agent. At the direction of the Corporation to its transfer agent and absent a specific request for a certificate by the registered shareholder or transferee thereof, all shares of the Corporation shall be in uncertificated, book entry form upon the original issuance thereof by the Corporation or upon the surrender of the certificate representing such shares to the Corporation, in accordance with a Direct Registration System approved by the Securities and Exchange Commission and by the New York Stock Exchange or any securities exchange on which the share of the Corporation may from time to time be traded.

The rights and obligations of shareholders of the Corporation shall be identical whether or not their shares are represented by certificates. If shares are represented by certificates, each certificate shall be in such form as the Board of Directors may from time to time prescribe, signed (either manually or in facsimile) by the President or a Vice President (and may be signed (either manually or in facsimile) by the Secretary or an Assistant Secretary and sealed with the seal of the Corporation or its facsimile), exhibiting the holder’s name, certifying the number of shares owned and stating such other matters as may be required by law. The certificates shall be numbered and entered on the books of the Corporation as they are issued. If shares are not represented by certificates, then, within a reasonable time after issue or transfer of shares without certificates, the Corporation shall send the shareholder a written statement in such form as the Board may from time to time prescribe, certifying as to the number of shares owned by the shareholder and as to such other information as would have been required to be on certificates for such shares.

If and to the extent the Corporation is authorized to issue shares of more than one class or more than one series of any class, every certificate representing shares shall set forth or fairly summarize upon the face or back of the certificate, or shall state that the Corporation will furnish to any shareholder upon request and without charge a full statement of:

(a)The designations, relative rights, preferences and limitations of the shares of each class or series authorized to be issued.

Revised November 17, 2016        Page 22

(b)The variations in rights, preferences and limitations between the shares of each such series, if the Corporation is authorized to issue any preferred or special class in series insofar as the same have been fixed and determined.

(c)    The authority of the Board to fix and determine the variations, relative rights and preferences of future series.

Section 2.    SIGNATURES OF PAST OFFICERS. If the person who signed (either manually or in facsimile) a share certificate no longer holds office when the certificate is issued, the certificate shall nevertheless be valid.

Section 3.    TRANSFER AGENTS AND REGISTRARS. The Board of Directors may, in its discretion, appoint responsible banks or trust companies in such city or cities as the Board may deem advisable from time to time to act as transfer agents and registrars of the shares of the Corporation; and, when such appointments shall have been made, no share certificate shall be valid until countersigned by one of such transfer agents and registered by one of such registrars.

Section 4.    TRANSFER OF SHARES. Transfers of shares of the Corporation shall be made upon its books by the holder of the shares in person or by the holder’s lawfully constituted representative, upon surrender of the certificate of shares for cancellation if such shares are represented by a share certificate or by delivery to the Corporation of such evidence of transfer as may be required by the Corporation if such shares are not represented by certificates. The person in whose name shares stand on the books of the Corporation shall be deemed by the Corporation to be the owner thereof for all purposes and the Corporation shall not be bound to recognize any equitable or other claim to or interest in such share on the part of any other person, whether or not it shall have express or other notice thereof, save as expressly provided by the laws of the State of Florida.

Section 5.    LOST, STOLEN, OR DESTROYED CERTIFICATES. The Board of Directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Corporation and alleged to have been lost, stolen, or destroyed, upon the making of an affidavit of that fact by the person claiming the share certificate to be lost, stolen, or destroyed and pursuant to such requirements as the Board may establish concerning proof of such loss, theft, or destruction. When authorizing such issue of a new certificate or certificates, the Board may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen, or destroyed certificate or certificates, or the owner’s legal representative, to advertise the same in such manner as it shall require and/or to give the Corporation a bond of indemnity in such sum as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost, stolen, or destroyed. The issue, transfer, conversion, and registration of share certificates shall be governed by such other requirements as the Board of Directors may establish.

Revised November 17, 2016        Page 23

ARTICLE IX

Record Date

Section 1.    RECORD DATE FOR SHAREHOLDER ACTIONS. The Board of Directors is authorized from time to time to fix in advance a date, not more than seventy (70) nor less than ten (10) days before the date of any meeting of the shareholders, as the record date for the determination of shareholders entitled to notice of and to vote at any such meeting. In no event may a record date so fixed by the Board precede the date on which the resolution establishing such record date is adopted by the Board. Only those shareholders listed as shareholders of record as of the close of business on the date so fixed as the record date shall be entitled to notice of and to vote at such meeting, notwithstanding any transfer of any shares on the books of the Corporation after any such record date fixed as aforesaid. If the Board fails to establish a record date as provided herein, the record date shall be deemed to be the date ten (10) days prior to the date of the shareholders’ meeting. A determination of shareholders of record entitled to notice of or to vote at a meeting of shareholders shall apply to any adjournment of the meeting; provided, however, that the Board may or, if the meeting is adjourned to a date more than 120 days after the date fixed for the original meeting the Board shall, fix a new record date for the reconvened meeting and a notice of the reconvened meeting shall be given in compliance with Section 5 of Article II of these Bylaws to each shareholder of record on the new record date entitled to notice thereof and to vote at the reconvened meeting.

Section 2.    RECORD DATE FOR DIVIDEND AND OTHER DISTRIBUTIONS. The Board of Directors is authorized from time to time to fix in advance a date as the record date for the determination of the shareholders entitled to receive a dividend or other distribution. Only those shareholders listed as shareholders of record as of the close of business on the date so fixed as the record date shall be entitled to receive the dividend or other distribution, as the case may be, notwithstanding any transfer of any shares on the books of the Corporation after any such record date fixed as aforesaid. If the Board fails to establish a record date as provided herein, the record date shall be deemed to be the date of Board resolution authorizing the payment of the dividend or other distribution.

ARTICLE X

Dividends

The Board of Directors may from time to time declare, and the Corporation may pay, dividends on its outstanding shares of capital stock in the manner and upon the terms and conditions provided by the Articles of Incorporation and law. Subject to the provisions of the Articles of Incorporation and applicable law, dividends may be paid in cash or property, including shares or other securities of the Corporation.

Revised November 17, 2016        Page 24

ARTICLE XI

Fiscal Year

The fiscal year of the Corporation shall be the period selected by the Board of Directors as the taxable year of the Corporation for federal income tax purposes.

ARTICLE XII

Seal

The Board of Directors shall provide a corporate seal which shall have the name of the Corporation inscribed thereon and shall be in such form as may be approved from time to time by the Board.

ARTICLE XIII

Stock in Other Corporations

All shares of stock and other securities of other corporations owned or held by the Corporation for itself, or for other parties in any capacity, shall be voted,and all proxies with respect thereto shall be executed, by such officer or officers or other agent of the Corporation as the Board of Directors shall from time to time designate. In the absence of any such designation or, in case of conflicting designation by the Corporation, the Chair of the Board, the CEO, the Secretary, and the CFO of the Corporation shall be presumed to possess, in that order, authority to vote such shares.

ARTICLE XIV

Amendments

Except as otherwise provided by the Articles of Incorporation, these Bylaws may be altered, amended or repealed or new Bylaws adopted by (1) a vote of the Board of Directors, unless shareholders, in amending or repealing the Bylaws generally or a particular bylaw provision, provide expressly that the Board may not alter, amend, or repeal the Bylaws or that particular bylaw provision, or (2) by a vote of the shareholders at any meeting.

Revised November 17, 2016        Page 25

ARTICLE XV

General Provisions

Section 1. RELIANCE UPON BOOKS REPORTS AND RECORDS. Each director, each member of any committee designated by the Board of Directors, and each officer of the Corporation shall, in the performance of his duties, be fully protected in relying in good faith upon the books of account or other records of the Corporation and upon such information, opinions, reports, or statements presented to the Corporation by any of its officers or employees or committees of the Board so designated, or by any other person as to matters which such director or committee member reasonably believes are within such other person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation.

Section 2. TIME PERIODS. In applying any provision of these Bylaws which requires that an act be done or not be done a specified number of days prior to an event or that an act be done during a period of a specified number of days prior to an event, calendar days shall be used, the day of the doing of the act shall be excluded, and the day of the event shall be included.

ARTICLE XVI

Emergency Bylaws

Section 1.    SCOPE OF EMERGENCY BYLAWS. The emergency Bylaws provided in this Article XVI shall be operative during any emergency, notwithstanding any different provision set forth in the preceding articles hereof or the Articles of Incorporation. For purposes of the emergency Bylaw provisions of this Article XVI, an emergency shall exist if a quorum of the Corporation’s directors cannot readily be assembled because of some catastrophic event. To the extent not inconsistent with the provisions of this Article XVI, the Bylaws provided in the preceding articles shall remain in effect during such emergency and, upon termination of such emergency, these emergency Bylaws shall cease to be operative.

Section 2.    CALL AND NOTICE OF MEETING. During any emergency, a meeting of the Board of Directors may be called by any officer or director of the Corporation. Notice of the date, time and place of the meeting shall be given by the person calling the meeting to such of the directors as it may be feasible to reach by any available means of communication. Such notice shall be given at such time in advance of the meeting as circumstances permit in the judgment of the person calling the meeting.

Section 3.    QUORUM AND VOTING. At any such meeting of the Board of Directors, a quorum shall consist of any one or more directors, and the act of the majority of the directors present at such meeting shall be the act of the Corporation.

Revised November 17, 2016        Page 26

Section 4.    APPOINTMENT OF TEMPORARY DIRECTORS.

(a)    The director or directors who are able to be assembled at a meeting of directors during an emergency may assemble for the purpose of appointing, if such directors deem it necessary, one or more temporary directors (the “Temporary Directors”) to serve as directors of the Corporation during the term of any emergency.

(b)    If no directors are able to attend a meeting of directors during an emergency, then such shareholders as may reasonably be assembled shall have the right, by majority vote of those assembled, to appoint Temporary Directors to serve on the Board of Directors until the termination of the emergency.

(c)    If no shareholders can reasonably be assembled in order to conduct a vote for Temporary Directors, then the President or his or her successor, as determined pursuant to Section 9 of Article IV herein shall be deemed a Temporary Director of the Corporation, and such President or his or her successor, as the case may be, shall have the right to appoint additional Temporary Directors to serve with him on the Board of Directors of the Corporation during the term of the emergency.

(d)    Temporary Directors shall have all of the rights, duties and obligations of directors appointed pursuant to Article III hereof, provided, however, that a Temporary Director may be removed from the Board of Directors at any time by the person or persons responsible for appointing such Temporary Director, or by vote of the majority of the shareholders present at any meeting of the shareholders during an emergency, and, in any event, the Temporary Director shall automatically be deemed to have resigned from the Board of Directors upon the termination of the emergency in connection with which the Temporary Director was appointed.

Section 5.    MODIFICATION OF LINES OF SUCCESSION. During any emergency, the Board of Directors may provide, and from time to time modify, lines of succession different from that provided in Section 9 of Article IV in the event that during such an emergency any or all officers or agents of the Corporation shall for any reason be rendered incapable of discharging their duties.

Section 6.    CHANGE OF PRINCIPAL OFFICE. The Board of Directors may, either before or during any such emergency, and effective during such emergency, change the principal office of the Corporation or designate several alternative head offices or regional offices, or authorize the officers of the Corporation to do so.

Section 7.    LIMITATION OF LIABILITY. No officer, director or employee acting in accordance with these emergency Bylaws during an emergency shall be liable except for willful misconduct.

Section 8.    REPEAL AND CHANGE. These emergency Bylaws shall be subject to repeal or change by further action of the Board of Directors or by action of the shareholders, but no such repeal or change shall modify the provisions of Section 6 of this Article XVI with regard

Revised November 17, 2016        Page 27

to actions taken prior to the time of such repeal or change. Any amendment of these emergency Bylaws may make any further or different provision that may be practical or necessary under the circumstances of the emergency.

Revised November 17, 2016        Page 28

EX-3.2

Exhibit 3.2

AMENDED AND RESTATED

ARTICLES OF INCORPORATION

OF

CHICO’S, FAS, INC.

Pursuant to Sections 607.1003 and 607.1007 of the Florida Business Corporation Act, CHICO’S FAS, INC., a Florida corporation (“Corporation”), hereby restates its Articles of Incorporation as follows:

ARTICLE I

Name

The name of this Corporation shall be:

CHICO’S FAS, INC.

ARTICLE II

Term of Existence

This Corporation is to exist perpetually.

ARTICLE III

General Purpose

The general purpose for which this Corporation is organized is the transaction of any and all lawful business for which corporations may be incorporated under the Business Corporation Act of the State of Florida, and any amendments thereto, and in connection therewith, this Corporation shall have and may exercise any and all powers conferred from time to time by law upon corporations formed under such Act.

ARTICLE IV

Capital Stock

1.    Authorized Capitalization.

(a)    The total number of shares of capital stock authorized to be issued by this Corporation shall be:

2,500,000 shares of preferred stock, par value $0.01 per share (the “Preferred Stock”);

400,000,000 shares of common stock, par value $0.01 per share (the “Common Stock”); and

(b)    The designation, relative rights, preferences and liabilities of each class of stock, itemized by class, shall be as follows:

Page 1

(i)    Preferred. Shares of the Preferred Stock may be issued from time to time in one or more series. The board of directors of this Corporation (hereafter the “Board of Directors” or “Board”) by resolution shall establish each series of Preferred Stock and fix and determine the number of shares and the designations, preferences, limitations and relative rights of each such series, provided that all shares of the Preferred Stock shall be identical except as to the following relative rights and preferences, as to which there may be variations fixed and determined by the Board of Directors between different series:

(A)    The rate or manner of payment of dividends.

(B)    Whether shares may be redeemed and, if so, the redemption price and the terms and conditions of redemption.

(C)    The amount payable upon shares in the event of voluntary and involuntary liquidation.

(D)    Sinking fund provisions, if any, for the redemption or purchase of shares.

(E)    The terms and conditions, if any, on which the shares may be converted.

(F)    Voting rights, if any.

(G)    Any other rights or preferences now or hereafter permitted by the laws of the State of Florida as variations between different series of preferred stock.

(ii)    Common. Each share of Common Stock shall be entitled to one vote on all matters submitted to a vote of stockholders, except matters required to be voted on exclusively by holders of Preferred Stock or of any series of Preferred Stock. The holders of Common Stock shall be entitled to such dividends as may be declared by the Board of Directors from time to time, provided that required dividends, if any, on the Preferred Stock have been paid or provided for. In the event of the liquidation, dissolution, or winding up, whether voluntary or involuntary, of this Corporation, the assets and funds of this Corporation available for distribution to stockholders, and remaining after the payment to holders of Preferred Stock of the amounts to which they are entitled, shall be divided and paid to the holders of the Common Stock according to their respective shares.

2.    No Preemptive Rights.

(a)    Preferred Stock. Unless otherwise specifically provided in the terms of the Preferred Stock, the holders of any class of Preferred Stock of this Corporation shall have no preemptive right to subscribe for and purchase their proportionate share of any additional Preferred Stock (of the same class or otherwise) or Common Stock issued by this Corporation, from and after the issuance of the shares originally subscribed for by the stockholders of this Corporation, whether such additional shares be issued for cash, property, services or any other consideration and whether or not such shares be presently authorized or be authorized by subsequent amendment to these Articles of Incorporation.

Page 2

(b)    Common Stock. The holders of Common Stock of this Corporation shall have no preemptive right to subscribe for and purchase their proportionate share of any additional Preferred Stock or Common Stock issued by this Corporation, from and after the issuance of the shares originally subscribed for by the stockholders of this Corporation, whether such additional shares be issued for cash, property, services or any other consideration and whether or not such shares be presently authorized or be authorized by subsequent amendment to these Articles of Incorporation.

3.    Payment for Stock. The consideration for the issuance of shares of capital stock may be paid, in whole or in part, in cash, in promissory notes, in other property (tangible or intangible), in labor or services actually performed for this Corporation, in promises to perform services in the future evidenced by a written contract, or in other benefits to the Corporation at a fair valuation to be fixed by the Board of Directors. When issued, all shares of stock shall be fully paid and non-assessable.

4.    Treasury Stock. The Board of Directors of this Corporation shall have the authority to acquire by purchase and hold from time to time any shares of its issued and outstanding capital stock for such consideration and upon such terms and conditions as the Board of Directors in its discretion shall deem proper and reasonable in the interest of this Corporation.

ARTICLE V

Directors

1.    Number. The Board of Directors of this Corporation shall consist of not less than three (3) and not more than twelve (12) members, the exact number of directors to be fixed from time to time as provided in the bylaws of this Corporation.

2.    Terms. The directors elected prior to the 2017 annual meeting of stockholders, shall be and are divided into three classes, Class I, Class II and Class III, as nearly equal in number as possible and each such director shall hold office for a term expiring at the annual meeting of stockholders held in the third year following the year of his or her election and until his or her successor is duly elected and qualified, subject, however, to prior death, resignation, retirement, disqualification or removal from office. Each director elected at each annual meeting of stockholders, commencing with the annual meeting in 2017, shall hold office for a term expiring at the next annual meeting of stockholders held after such director’s election and until such director’s successor is elected and qualified, subject, however, to prior death, resignation, retirement, disqualification or removal from office.

Notwithstanding the foregoing, whenever the holders of any one or more classes or series of Preferred Stock issued by this Corporation shall have the right, voting separately by class or series, to elect directors at an annual or special meeting of stockholders, the election, term of office, filling of vacancies and other features of such directorships shall be governed by the terms of these Articles of Incorporation or the resolution or resolutions adopted by the Board of Directors pursuant to Article IV hereof.

3.    Powers. The business and affairs of this Corporation shall be managed by the Board of Directors, which may exercise all such powers of this Corporation and do all such lawful acts and things as are not by law directed or required to be exercised or done by the stockholders.

Page 3

4.    Quorum. A quorum for the transaction of business at all meetings of the Board of Directors shall be a majority of the number of directors determined from time to time to comprise the Board of Directors, and the act of a majority of the directors present at a meeting at which a quorum is present shall be the act of the directors.

5.    Removal. Subject to the rights, if any, of the holders of shares of Preferred Stock then outstanding, any or all of the directors of this Corporation may be removed from office for cause by the stockholders of this Corporation at any annual or special meeting of stockholders by the affirmative vote of at least 66-2/3% of the outstanding shares of Common Stock of this Corporation. Notice of any such annual or special meeting of stockholder shall state that the removal of a director or directors for cause is among the purposes of the meeting. Directors may not be removed by the stockholders without cause.

6.    Vacancies. Newly created directorships resulting from any increase in the number of directors or any vacancy on the Board of Directors resulting from death, resignation, disqualification, removal or other cause shall be filled solely by the affirmative vote of a majority of the remaining directors then in office, even though less than a quorum, or by a sole remaining director, or by the stockholders. Any director elected in accordance with the preceding sentence shall hold office until the next annual meeting of stockholders and until such director’s successor shall have been elected and qualified. No decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director.

7.    Elections. When a quorum is present at any meeting for the election of directors, the vote required for election of a director by stockholders, other than in a contested election, shall be the affirmative vote of a majority of votes cast with respect to the director nominee. A majority of votes cast means that the number of votes cast “for” a director must exceed the number of votes cast “against” that director. In a contested election, the nominees receiving the greatest number of votes “for” their election, up to the number of directors to be elected, shall be elected. Abstentions and broker non-votes will not count as votes either “for” or “against” a nominee.

The election is “contested” if (i) the Secretary of the Corporation has received a notice that a stockholder has nominated a person for election to the Board of Directors in compliance with the advance notice requirements for stockholder nominees for director set forth in Article VI, Section 8 hereof and (ii) such nomination has not been withdrawn by such stockholder on or prior to the tenth business day preceding the date the Corporation first mails its notice of meeting to the stockholders.

8.    Nominations. Subject to the rights, if any, of the holders of shares of Preferred Stock then outstanding, only persons who are nominated in accordance with the following procedures shall be eligible for election as directors at meetings of stockholders.

Nominations of persons for election to the Board of Directors of this Corporation may be made at a meeting of stockholders by or at the direction of: (a) the Board of Directors; (b) by any nominating committee or person appointed by the Board; (c) or by any stockholder of this Corporation entitled to vote for the election of directors at the meeting who complies with the notice procedures set forth in this Article VI, Section 8.

Page 4

Nominations by stockholders shall be made pursuant to timely notice in writing to the Secretary of this Corporation. To be timely, a stockholder’s notice must by delivered to, or mailed and received at, the principal executive offices of this Corporation not less than 60 days prior to the date of the meeting at which the director(s) are to be elected, regardless of any postponements, deferrals or adjournments of that meeting to a later date; provided, however, that if less than 70 days’ notice or prior public disclosure of the date of the scheduled meeting is given or made, notice by the stockholder, to be timely, must be so delivered or received not later than the close of business on the tenth day following the earlier of the day on which notice was given or such public disclosure was made.

A stockholder’s notice to the Secretary shall set forth (a) as to each person whom the stockholder proposes to nominate for election or reelection as a director, (i) the name, age, business address and residence address of the person, (ii) the principal occupation or employment of the person, (iii) the class and number of shares of capital stock of this Corporation which are beneficially owned by the person, and (iv) any other information relating to the person that is required to be disclosed in solicitations for proxies for election of directors pursuant to Schedule 14A under the Securities Exchange Act of 1934, as amended; and (b) as to the stockholder giving the notice (i) the name and address, as they appear on this Corporation’s books, of the stockholder and (ii) the class and number of shares of this Corporation’s stock which are beneficially owned by the stockholder on the date of such stockholder notice. This Corporation may require any proposed nominee to furnish such other information as may reasonably be required by this Corporation to determine the eligibility of such proposed nominee to serve as a director of this Corporation.

The presiding officer of the meeting shall determine and declare at the meeting whether the nomination was made in accordance with the terms of this Article VI, Section 8. If the presiding officer determines that a nomination was not made in accordance with the terms of this Article VI, Section 8, he or she shall so declare at the meeting and any such defective nomination shall be disregarded.

ARTICLE VI

Address

The address of the principal office and mailing address of this Corporation shall be:

11215 Metro Parkway

Ft. Myers, Florida 33966

ARTICLE VII

Stockholder Meetings

1.    Annual Meetings. At any annual meeting of stockholders, only such business shall be conducted, and only such proposals shall be acted upon, as shall have been brought before the annual meeting (a) by, or at the direction of, the Board of Directors, or (b) by any stockholder of this Corporation who complies with the notice procedures set forth in this Article VIII, Section 1 and the requirements of Rule 14a-8 under the Securities Exchange Act of 1934.

Page 5

For a proposal to be properly brought before an annual meeting by a stockholder, the stockholder must have given timely notice thereof in writing to the Secretary of this Corporation. To be timely, a stockholder’s notice must be delivered to, or mailed and received at, the principal executive offices of this Corporation not less than 60 days prior to the scheduled annual meeting, regardless of any postponements, deferrals or adjournments of that meeting to a later date; provided, however, that if less than 70 days’ notice or prior public disclosure of that date of the scheduled annual meeting is given or made, notice by the stockholder, to be timely, must be so delivered or received not later than the close of business on the tenth day following the earlier of the day on which such notice of the date of the scheduled annual meeting was given or the day on which such public disclosure was made.

A stockholder’s notice to the Secretary shall set forth as to each matter the stockholder proposes to bring before the annual meeting (a) a brief description of the proposal desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (b) the name and address, as they appear on this Corporation’s books, of the stockholder proposing such business and any other stockholders known by such stockholder to be supporting such proposal, (c) the class and number of shares of this Corporation’s stock which are beneficially owned by the stockholder on the date of such stockholder notice and by any other stockholders known by such stockholder to be supporting such proposal on the date of such stockholder notice, and (d) any financial interest of the stockholder in such proposal.

The presiding officer of the annual meeting shall determine and declare at the annual meeting whether the stockholder proposal was made in accordance with the terms of this Article VIII, Section 1. If the presiding officer determines that a stockholder proposal was not made in accordance with the terms of this Article VIII, Section 1, he or she shall so declare at the annual meeting and any such proposal shall not be acted upon at the annual meeting.

This provision shall not prevent the consideration and approval or disapproval at the annual meeting of reports of officers, directors and committees of the Board of Directors, but, in connection with such reports, no new business shall be acted upon at such annual meeting unless stated, filed and received as herein provided.

2.    Special Meetings. Special meetings of the stockholders of this Corporation for any purpose or purposes may be called at any time by (a) the Board of Directors; (b) the Chairman of the Board of Directors (if one is so appointed); (c) the President of this Corporation; or (d) by holders of not less than 25% of all the votes entitled to be cast on any issue proposed to be considered at the proposed special meeting, if such stockholders sign, date and deliver to this Corporation’s secretary one or more written demands for the meeting describing the purpose or purposes for which it is to be held. Special meetings of the stockholders of this Corporation may not be called by another person or persons.

At any special meeting of stockholders, only such business shall be conducted, and only such proposals shall be acted upon, as shall have been set forth in the notice of such special meeting.

3.    Written Consents. Effective beginning as of June 1, 1993, any action required or permitted to be taken at any annual or special meeting of stockholders of this Corporation may be taken only upon the vote of such stockholders at an annual or special meeting duly called in accordance with the terms of this Article VIII, Section 1 and 2, and may not be taken by written consent of such stockholders.

Page 6

ARTICLE VIII

Amendments

This Corporation reserves the right to amend, alter, change or repeal any provisions contained in these Articles of Incorporation in the manner now or hereafter prescribed by statute, and all rights conferred upon the stockholders herein are subject to this reservation. Notwithstanding anything contained in these Articles of Incorporation to the contrary, the affirmative vote of at least 66-2/3% of the outstanding shares of Common Stock of this Corporation shall be required to amend or repeal Articles VI or VIII of these Articles of Incorporation or to adopt any provision inconsistent therewith.

ARTICLE IX

Bylaws

1.    Adoptions, Amendments, Etc. The power to adopt the bylaws of this Corporation, to alter, amend or repeal the bylaws, or to adopt new bylaws, shall be vested in the Board of Directors of this Corporation; provided, however, that any bylaw or amendment thereto as adopted by the Board of Directors may be altered, amended, or repealed by vote of the stockholders entitled to vote thereon, or a new bylaw in lieu thereof may be adopted by the stockholders, and the stockholders may prescribe in any bylaw made by them that such bylaw shall not be altered, amended or repealed by the Board of Directors.

2.    Scope. The bylaws of this Corporation shall be for the government of this Corporation and may contain any provisions or requirements for the management or conduct of the affairs and business of this Corporation, provided the same are not inconsistent with the provisions of these Articles of Incorporation, or contrary to the laws of the State of Florida or of the United States.

IN WITNESS WHEREOF, CHICO’S FAS, INC. has caused these Restated Articles of Incorporation to be executed and acknowledged by its President and Secretary this 17th day of August, 2016.

ATTEST:                        CHICO’S FAS, INC.

/s/ Susan Faw

L. Susan Faw, Secretary    

/s/ Shelley G. Broader

Shelley Broader, President

Page 7

EX-10.1

Exhibit 10.1

CHICO’S FAS, INC.
2012 OMNIBUS STOCK AND INCENTIVE PLAN
RESTRICTED STOCK AGREEMENT

Capitalized terms not defined herein have the meaning given such terms in the Chico’s FAS, Inc. 2012 Omnibus Stock and Incentive Plan.

This Restricted Stock Agreement (the “Restricted Stock Agreement”) is effective as of the date of grant (the “Grant Date”), and is entered into between Chico’s FAS, Inc., a Florida corporation (the “Company”), and Grantee (the “Employee”).

WHEREAS, the Compensation Committee of the Board of Directors of the Company (the “Committee”) is authorized to make grants of Restricted Stock under the Company’s 2012 Omnibus Stock and Incentive Plan;

WHEREAS, prior to the Grant Date, pursuant to the Plan, the Committee approved the grant of Restricted Stock to the Employee on the Grant Date provided that the Employee continued to be employed as an employee of the Company on the Grant Date;

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises set forth below, the parties hereto agree as follows:

1.Grant of Restricted Stock. The Company hereby grants to the Employee all right, title and interest in the record and beneficial ownership of a defined number of shares of common stock, $.01 par value per share, of the Company (“Common Stock”) subject to the provisions of this Restricted Stock Agreement (the “Restricted Stock”). The Restricted Stock is granted pursuant to and to implement in part the Chico’s FAS, Inc. 2012 Omnibus Stock and Incentive Plan (as amended and in effect from time to time, the “Plan”) and is subject to the provisions of the Plan, which is hereby incorporated herein and is made a part hereof, as well as the provisions of this Restricted Stock Agreement. The Employee agrees to be bound by all of the terms, provisions, conditions and limitations of the Plan and this Restricted Stock Agreement. To the extent the terms of the Plan and the Restricted Stock Agreement are in conflict, the terms of the Plan shall govern. All capitalized terms have the meanings set forth in the Plan unless otherwise specifically provided in this Restricted Stock Agreement. All references to specified paragraphs pertain to paragraphs of this Restricted Stock Agreement unless otherwise specifically provided.

2.No Transfer of Nonvested Shares. During the period that any shares of Restricted Stock are nonvested under this Agreement, such nonvested shares shall not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of, other than by will, the laws of descent and distribution, by qualified domestic relations order or as expressly provided in Paragraph 3. No right or benefit hereunder shall in any manner be liable for or subject to any debts, contracts, liabilities, or torts of the Employee.

Page | 1

RSA Non-Soma Officers

3.Custody of Restricted Stock. The shares of Restricted Stock will be issued in the name of the Employee and delivered electronically to the Plan Administrator as escrow agent (the “Escrow Agent”), and will not be sold, assigned, transferred, pledged or otherwise disposed of or encumbered unless and until the expiration of the Restriction Period set forth in Paragraph 5 or the occurrence of any of the events contemplated by Paragraphs 6 or 7. Notwithstanding the foregoing, while such restrictions remain in effect, the Employee may transfer the shares of Restricted Stock to a trust created by such Employee for the benefit of the Employee and the Employee’s family as part of the Employee’s estate planning program, provided that prior to any such transfer, (a) the Employee must submit to the Company a legal opinion of the Employee’s counsel, satisfactory to the Committee, that the transfer to such trust and the holdings of the shares of Restricted Stock by such trust shall have no adverse tax or securities law consequences for the Company and (b) the trust must execute and deliver to the Company a joinder to this Agreement, satisfactory to the Committee, which shall, among other things, acknowledge the terms of the grant of the Restricted Stock and the restrictions on transfer of the shares of Restricted Stock imposed and established pursuant to the terms of this Agreement and the Plan and the trust must continue the deposit of the shares of Restricted Stock with the Escrow Agent and deposit with the Escrow Agent a stock power endorsed in blank by the trustee on behalf of the trust. The Company may instruct the transfer agent for its Common Stock to reflect in its records the restrictions on transfer set forth in this Agreement and the Plan. No shares of Restricted Stock will be transferred by the Escrow Agent to the Employee unless and until the shares of Restricted Stock have vested and all other terms and conditions in this Agreement and the Plan have been satisfied.

4.Risk of Forfeiture. Subject to Paragraphs 6 and 7, upon termination of employment (as defined in Paragraph 8) prior to the end of a Restriction Period set forth in Paragraph 5, the Employee shall forfeit the right to receive the Restricted Stock that would otherwise have vested at the end of said Restriction Period. The Employee hereby appoints the Escrow Agent with full power of substitution, as the Employee’s true and lawful attorney-in-fact with irrevocable power and authority in the name and on behalf of the Employee to take any action and execute all documents and instruments, including, without limitation, stock powers which may be necessary to electronically transfer such nonvested shares of Restricted Stock to the Company upon such forfeiture.

5.Vesting Dates. Subject to Paragraphs 6 and 7, the restrictions applicable to the Restricted Stock will lapse in accordance with the following Restriction Periods: (i) the restrictions as to one-third of the Restricted Stock will lapse one year after the Grant Date; (ii) the restrictions as to an additional one-third of the Restricted Stock will lapse two years after the Grant Date; and (iii) the restrictions as to the remaining one-third of the Restricted Stock will lapse three years after the Grant Date.

6.Termination of Service. The Employee’s voluntary or involuntary termination of employment (as defined in Paragraph 8) shall affect the Employee’s rights under this Restricted Stock Agreement as follows:

a.Voluntary Termination or Termination for Cause. If, other than as specified below, the Employee voluntarily terminates employment with the Company or if employment is terminated

Page | 2

RSA Non-Soma Officers

by the Company for cause, then the Employee shall forfeit the right to receive all nonvested Restricted Stock. Cause for termination shall exist if the Employee engages in any of the following conduct:

(i) Conduct resulting in a conviction of, or entering a plea of no contest to, any felony;

(ii) Conduct resulting in a conviction of, or entering a plea of no contest to, any crime related to employment, but specifically excluding traffic offenses;

(iii) Continued neglect, gross negligence, or wilful misconduct by the Employee in the performance of the Employee’s employment duties, which has a material adverse effect on the Company or its subsidiaries;

(iv) Willful failure to take actions permitted by law and necessary to implement the policies of the Company or its subsidiaries as such policies have been communicated to the Employee;

(v) Material breach of the terms of the Restricted Stock Agreement; or

(vi) Drug or alcohol abuse to the extent that such abuse has an obvious and material adverse effect on the Company or its subsidiaries or upon the Employee’s ability to perform his or her duties and responsibilities.

b.Involuntary Termination without Cause. If the Employee’s employment is terminated by the Company without Cause, then Employee shall forfeit the right to receive all nonvested Restricted Stock under this Agreement. The Committee shall retain the authority to accelerate vesting of all or a portion of the Award in its sole discretion.

7.Retirement, Change in Control, Death or Disability. The Employee’s retirement, or death or Disability, or a Change in Control, shall affect the Employee’s rights under this Restricted Stock Agreement as follows:

a.Retirement. If the Employee’s employment with the Company (as defined in Paragraph 8) is terminated by retirement prior to the last day of the Restriction Period, then as of the Termination Date, such number of shares of nonvested Restricted Stock equal to the Accelerated Portion shall fully vest, all restrictions (other than those described in Paragraph 12) applicable to the Accelerated Portion of the nonvested Restricted Stock shall terminate, the Company shall release from escrow or trust and shall issue and transfer electronically into Employee’s account at current plan administrator the Accelerated Portion of the nonvested Restricted Stock and the Employee shall forfeit the right to receive all shares of the nonvested Restricted Stock in excess of the Accelerated Portion. For these purposes, the “Accelerated Portion” shall be equal to the number of shares which is the product of (i) a fraction, the numerator of which is the number of completed months elapsed beginning on the Grant Date and ending on the date of termination of service as an Employee of the Company and the denominator of which is the total number of months in the Restriction Period, multiplied by (ii) the total number of shares of nonvested Restricted Stock

Page | 3

RSA Non-Soma Officers

immediately prior to the date of termination of the Employee’s position as an Employee of the Company. For these purposes, the Employee’s position as an Employee of the Company will not be considered to be terminated by “retirement” unless and until (i) the Employee provides written notice to the Company of intent to formally retire; (ii) the Employee has reached age 55; (iii) the Employee’s combined age and years of service with the Company as an Employee is equal to 65 or greater; and (iv) the Company approves the Employee’s request to retire, which approval is in the Company’s sole discretion.

b.Death or Disability. If the Employee’s employment by the Company (as defined in Paragraph 8) is terminated by death or Disability, then immediately all nonvested Restricted Stock shall fully vest and all restrictions (other than described in Paragraph 12) applicable to Restricted Stock shall terminate. For purposes of this Agreement, Disability shall mean that the Employee was approved for a disability benefit under the Company’s Long-Term Disability Plan.

c.Change in Control. If a Change in Control shall occur, then all nonvested Restricted Stock shall fully vest, all restrictions (other than those described in Paragraph 12) applicable to such Restricted Stock shall terminate and the Company shall release from escrow or trust and shall issue and electronically transfer to the Employee all shares of Restricted Stock, but only if either: (i) the successor company does not assume, convert, continue, or otherwise replace the Restricted Stock on proportionate and equitable terms or (ii) the Employee is terminated without cause within twelve (12) months following the Change in Control.

8.Definition of Employment and Termination. For purposes of this Restricted Stock Agreement, “employment” means employment by the Company and/or its subsidiary (as “subsidiary” is defined under the Plan). “Termination Date” means the date upon which the Employee is separated from employment, whether voluntary or involuntary. Neither the transfer of the Employee from employment by the Company to employment by a subsidiary, nor the transfer of the Employee from employment by a subsidiary to employment by the Company, nor the transfer of the Employee from employment by a subsidiary to employment by another subsidiary shall be deemed to be a termination of employment of the Employee. Furthermore, in no event shall employment be deemed terminated under this Restricted Stock Agreement unless and until Employee’s employment by Company, to the extent applicable, and each of its subsidiaries, to the extent applicable, occur such that the Employee is no longer employed by the Company or any of its subsidiaries. Moreover, the employment of the Employee shall not be deemed terminated because of absence from active employment on account of temporary illness or during authorized vacation or during temporary leaves of absence from active employment granted by the Company or a subsidiary for reasons of professional advancement, education, health, or government service, or during military leave for any period if the Employee returns to active employment within 90 days after the termination of military leave, or during any period required to be treated as a leave of absence by virtue of any valid law or agreement. The Plan Administrator’s determination in good faith regarding whether a termination of employment of any type or Disability has occurred shall be conclusive and determinative.

9.Ownership Rights. Subject to the restrictions set forth herein and subject to Paragraph 12, the Employee is entitled to all voting and ownership rights applicable to the Restricted

Page | 4

RSA Non-Soma Officers

Stock, including the right to receive any dividends that may be paid on Restricted Stock, whether or not vested. (Information on Chico’s stock, Annual Reports, and other relevant information may be found at www.chicosfas.com.)

10.Reorganization of Company and Subsidiaries. The existence of this Restricted Stock Agreement shall not affect in any way the right or power of the Company or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the Company’s capital structure or its business, or any merger or consolidation of the Company or any issue of bonds, debentures, preferred or prior preference stock ahead of or affecting the Restricted Stock or the rights thereof, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.

11.Adjustment of Shares. In the event of stock dividends, spin-offs of assets or other extraordinary dividends, stock splits, combinations of shares, recapitalizations, mergers, consolidations, reorganizations, liquidations, issuances of rights or warrants and similar transactions or events involving the Company (“Recapitalization Events”), then for all purposes references herein to Common Stock or to Restricted Stock shall mean and include all securities or other property (other than cash) that holders of Common Stock of the Company are entitled to receive in respect of Common Stock by reason of each successive Recapitalization Event, which securities or other property (other than cash) shall be treated in the same manner and shall be subject to the same restrictions as the underlying Restricted Stock.

12.Certain Restrictions. By accepting the Restricted Stock, the Employee agrees that if at the time of delivery of the shares of Restricted Stock issued hereunder any sale of such shares is not covered by an effective registration statement filed under the Securities Act of 1933 (the “Act”), the Employee will acquire the Restricted Stock for the Employee’s own account and without a view to resale or distribution in violation of the Act or any other securities law, and upon any such acquisition the Employee will enter into such written representations, warranties and agreements as the Company may reasonably request in order to comply with the Act or any other securities law or with this Restricted Stock Agreement.

13.Confidentiality. By accepting the Restricted Stock, Employee agrees that during the twenty-four month period immediately following Termination Date, Employee will not use or disclose Company's and/or its subsidiaries’ Confidential Information, except in the faithful performance of the Employee's duties for the Company. For purposes of this Agreement, Confidential Information includes trade secrets and other confidential and proprietary information and materials pertaining to, among other things: (a) designs (including garment and fabric) and fashion trends; (b) sourcing, manufacturing, merchandising, licensing and supply chain processes, techniques and plans; (c) advertising, marketing and promotional plans; (d) technical and business strategies and processes; (e) sales, revenues, profits, margin, expenses, and other financial information; (f) relationships between Company and its customers, its vendors and its employees; (g) customers' personal identifying information; (h) stores and real estate, including expansion and relocation plans; (i) store operations, including policies and procedures; (j) compensation, benefits, performance history and other information relating to the Company's and/or its subsidiaries’

Page | 5

RSA Non-Soma Officers

employees; and (k) acquisitions, mergers, divestitures, and agreements regarding franchising and distribution. Confidential Information does not include information that is, or becomes, generally known within the industry or generally available to the public (unless through Employee's improper disclosure). The purpose of this provision is to protect the Company’s and/or its subsidiary’s legitimate interest in maintaining the confidentiality of its private business information; accordingly, nothing herein is intended to or shall be construed to prohibit communications among associates regarding their compensation or any other terms and conditions of employment.

14.Non-Competition. By accepting this Restricted Stock Agreement, the Employee agrees that during the six month period, or twelve month period for Group Vice President and above, immediately following Termination Date, the Employee will not, directly or indirectly, perform any job, task, function, skill, or responsibility for a Competing Business that the Employee has provided for Company (and/or its subsidiaries) within the twelve month period immediately preceding Employee’s Termination Date. For purposes of this Agreement, a Competing Business shall mean any direct competitor of the Company which, in general, means a specialty retailer of better women’s apparel whose target customers are 30 years of age or older and have an annual household income of $75,000 or more. The Employee acknowledges that the foregoing restrictions may impair the Employee’s ability to engage in certain business activities during the defined period, but acknowledges that these restrictions are reasonable consideration for the grant of the Restricted Stock hereunder.

15.Nonsolicitation. By accepting the Restricted Stock, Employee agrees that for a period of twelve months following Termination Date, Employee will not directly or indirectly solicit, induce or attempt to influence any Company employee (including Company's subsidiaries' employee) to leave the Company's employ, nor will Employee assist anyone in soliciting or recruiting a Company employee (including Company's subsidiaries' employee) for purposes of being employed or retained as a consultant or contractor elsewhere.

16.Noncompliance Reporting. By accepting the Restricted Stock, Employee agrees that if, at any time, Employee learns of information suggesting conduct by an officer or employee of Company (including of Company's subsidiaries) or a member of Company's Board of Directors that is unlawful, unethical, or constitutes a material violation of any Company policy, regardless of the source of such information, Employee will report promptly such information to Company through any of the Company's internal mechanisms available for the reporting of such conduct such as, for instance, the Company's Ethics and Compliance Hotline.

17.Amendment and Termination. No amendment or termination of this Restricted Stock Agreement which would impair the rights of the Employee shall be made by the Board, the Committee or the Plan Administrator at any time without the written consent of the Employee. No amendment or termination of the Plan will adversely affect the right, title and interest of the Employee under this Restricted Stock Agreement or to Restricted Stock granted hereunder without the written consent of the Employee.

18.No Guarantee of Employment. This Restricted Stock Agreement shall not confer upon the Employee any right with respect to continuance of employment or other service with the Company or any subsidiary, nor shall it interfere in any way with any right the Company or any

Page | 6

RSA Non-Soma Officers

subsidiary would otherwise have to terminate such Employee’s employment or other service at any time.

19.Withholding of Taxes. The Company shall have the right to (i) make deductions from the number of shares of Restricted Stock otherwise deliverable upon satisfaction of the conditions precedent under this Restricted Stock Agreement (and other amounts payable under this Restricted Stock Agreement) in an amount sufficient to satisfy withholding of any federal, state or local taxes required by law, or (ii) take such other action as may be necessary or appropriate to satisfy any such tax withholding obligations, provided, in any event, the Company shall withhold only the minimum amount necessary to satisfy applicable statutory withholding requirements.

20.No Guarantee of Tax Consequences. Neither the Company nor any subsidiary nor the Plan Administrator makes any commitment or guarantee that any federal or state tax treatment will apply or be available to any person eligible for benefits under this Restricted Stock Agreement.

21.Entire Agreement. This Restricted Stock Agreement constitutes and contains the entire agreement between the parties with respect to the subject matter hereof and supersedes any prior or contemporaneous oral or written agreements.

22.Severability. In the event that any provision of this Restricted Stock Agreement shall be held illegal, invalid, or unenforceable for any reason, such provision shall be fully severable, but shall not affect the remaining provisions of this Restricted Stock Agreement and this Restricted Stock Agreement shall be construed and enforced as if the illegal, invalid, or unenforceable provision had never been included herein.

23.Governing Law. The Restricted Stock Agreement shall be construed in accordance with the laws of the State of Florida to the extent federal law does not supersede and preempt Florida law.

24.Miscellaneous Provisions.

a.Not a Part of Salary. The grant of an Award under the Plan is not intended to be a part of the salary of the Employee.

b.Conflicts with Any Employment Agreement. Notwithstanding paragraph 21 above, if the Employee has an employment agreement with the Company or any of its subsidiaries which contains different or additional provisions relating to vesting of restricted stock awards, or otherwise conflicts with the terms of this Restricted Stock Agreement, the provisions of the employment agreement shall govern.

c.Independent Covenants. The Employee acknowledges that the promises set forth herein by either party are independent of each other and are independent of any other provision in any other agreement between the Employee and the Company and the existence of any claim or cause of action the Employee may have against the Company shall not constitute a defense to enforcement of the Employee’s promises herein.

Page | 7

RSA Non-Soma Officers

d.Electronic Delivery and Signatures. The Employee hereby consents and agrees to electronic delivery of share(s) of Common Stock, Plan documents, proxy materials, annual reports and other related documents. The Company has established procedures for an electronic signature system for delivery and acceptance of Plan documents (including documents relating to any programs adopted under the Plan). The Employee hereby consents to such procedures and agrees that his or her electronic signature is the same as, and shall have the same force and effect as, his or her manual signature. The Employee consents and agrees that any such procedures and delivery may be effected by a third party engaged by the Company to provide administrative services related to the Plan, including any program adopted under the Plan.

Firmwide:142190761.1 049970.1002

Page | 8

RSA Non-Soma Officers

EX-10.2

Exhibit 10.2

CHICO’S FAS, INC.
2012 OMNIBUS STOCK AND INCENTIVE PLAN
RESTRICTED STOCK AGREEMENT

Capitalized terms not defined herein have the meaning given such terms in the Chico’s FAS, Inc. 2012 Omnibus Stock and Incentive Plan.

This Restricted Stock Agreement (the “Restricted Stock Agreement”) is effective as of the date of grant (the “Grant Date”), and is entered into between Chico’s FAS, Inc., a Florida corporation (the “Company”), and Grantee (the “Employee”).

WHEREAS, the Compensation Committee of the Board of Directors of the Company (the “Committee”) is authorized to make grants of Restricted Stock under the Company’s 2012 Omnibus Stock and Incentive Plan;

WHEREAS, prior to the Grant Date, the Committee approved the grant, pursuant to the Plan, Restricted Stock to the Employee on the Grant Date provided that the Employee continued to be employed as an employee of the Company on the Grant Date;

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises set forth below, the parties hereto agree as follows:

1.Grant of Restricted Stock. The Company hereby grants to the Employee all right, title and interest in the record and beneficial ownership of a defined number of shares of common stock, $.01 par value per share, of the Company (“Common Stock”) subject to the provisions of this Restricted Stock Agreement (the “Restricted Stock”). The Restricted Stock is granted pursuant to and to implement in part the Chico’s FAS, Inc. 2012 Omnibus Stock and Incentive Plan (as amended and in effect from time to time, the “Plan”) and is subject to the provisions of the Plan, which is hereby incorporated herein and is made a part hereof, as well as the provisions of this Restricted Stock Agreement. The Employee agrees to be bound by all of the terms, provisions, conditions and limitations of the Plan and this Restricted Stock Agreement. To the extent the terms of the Plan and the Restricted Stock Agreement are in conflict, the terms of the Plan shall govern. All capitalized terms have the meanings set forth in the Plan unless otherwise specifically provided in this Restricted Stock Agreement. All references to specified paragraphs pertain to paragraphs of this Restricted Stock Agreement unless otherwise specifically provided.

2.No Transfer of Nonvested Shares. During the period that any shares of Restricted Stock are nonvested under this Agreement, such nonvested shares shall not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of, other than by will, the laws of descent and distribution, by qualified domestic relations order or as expressly provided in Paragraph 3. No right or benefit hereunder shall in any manner be liable for or subject to any debts, contracts, liabilities, or torts of the Employee.

Page | 1

RSA Soma Officers

3.Custody of Restricted Stock. The shares of Restricted Stock will be issued in the name of the Employee and delivered electronically to the Plan Administrator as escrow agent (the “Escrow Agent”), and will not be sold, assigned, transferred, pledged or otherwise disposed of or encumbered unless and until the expiration of the Restriction Period set forth in Paragraph 5 or the occurrence of any of the events contemplated by Paragraphs 6 or 7. Notwithstanding the foregoing, while such restrictions remain in effect, the Employee may transfer the shares of Restricted Stock to a trust created by such Employee for the benefit of the Employee and the Employee’s family as part of the Employee’s estate planning program, provided that prior to any such transfer, (a) the Employee must submit to the Company a legal opinion of the Employee’s counsel, satisfactory to the Committee, that the transfer to such trust and the holdings of the shares of Restricted Stock by such trust shall have no adverse tax or securities law consequences for the Company and (b) the trust must execute and deliver to the Company a joinder to this Agreement, satisfactory to the Committee, which shall, among other things, acknowledge the terms of the grant of the Restricted Stock and the restrictions on transfer of the shares of Restricted Stock imposed and established pursuant to the terms of this Agreement and the Plan and the trust must continue the deposit of the shares of Restricted Stock with the Escrow Agent and deposit with the Escrow Agent a stock power endorsed in blank by the trustee on behalf of the trust. The Company may instruct the transfer agent for its Common Stock to reflect in its records the restrictions on transfer set forth in this Agreement and the Plan. No shares of Restricted Stock will be transferred by the Escrow Agent to the Employee unless and until the shares of Restricted Stock have vested and all other terms and conditions in this Agreement and the Plan have been satisfied.

4.Risk of Forfeiture. Subject to Paragraphs 6 and 7, upon termination of employment (as defined in Paragraph 8) prior to the end of a Restriction Period set forth in Paragraph 5, the Employee shall forfeit the right to receive the Restricted Stock that would otherwise have vested at the end of said Restriction Period. The Employee hereby appoints the Escrow Agent with full power of substitution, as the Employee’s true and lawful attorney-in-fact with irrevocable power and authority in the name and on behalf of the Employee to take any action and execute all documents and instruments, including, without limitation, stock powers which may be necessary to electronically transfer such nonvested shares of Restricted Stock to the Company upon such forfeiture.

5.Vesting Dates. Subject to Paragraphs 6 and 7, the restrictions applicable to the Restricted Stock will lapse in accordance with the following Restriction Periods: (i) the restrictions as to one-third of the Restricted Stock will lapse one year after the Grant Date; (ii) the restrictions as to an additional one-third of the Restricted Stock will lapse two years after the Grant Date; and (iii) the restrictions as to the remaining one-third of the Restricted Stock will lapse three years after the Grant Date.

6.Termination of Service. The Employee’s voluntary or involuntary termination of employment (as defined in Paragraph 8) shall affect the Employee’s rights under this Restricted Stock Agreement as follows:

a.Voluntary Termination or Termination for Cause. If, other than as specified below, the Employee voluntarily terminates employment with the Company or if employment is terminated

Page | 2

RSA Soma Officers

by the Company for cause, then the Employee shall forfeit the right to receive all nonvested Restricted Stock. Cause for termination shall exist if the Employee engages in any of the following conduct:

(i) Conduct resulting in a conviction of, or entering a plea of no contest to, any felony;

(ii) Conduct resulting in a conviction of, or entering a plea of no contest to, any crime related to employment, but specifically excluding traffic offenses;

(iii) Continued neglect, gross negligence, or wilful misconduct by the Employee in the performance of the Employee’s employment duties, which has a material adverse effect on the Company or its subsidiaries;

(iv) Willful failure to take actions permitted by law and necessary to implement the policies of the Company or its subsidiaries as such policies have been communicated to the Employee;

(v) Material breach of the terms of the Restricted Stock Agreement; or

(vi) Drug or alcohol abuse to the extent that such abuse has an obvious and material adverse effect on the Company or its subsidiaries or upon the Employee’s ability to perform his or her duties and responsibilities.

b.Involuntary Termination without Cause. If the Employee’s employment is terminated by the Company without Cause, then Employee shall forfeit the right to receive all nonvested Restricted Stock under this Agreement. The Committee shall retain the authority to accelerate vesting of all or a portion of the Award in its sole discretion.

7.Retirement, Change in Control, Death or Disability. The Employee’s retirement, or death or Disability, or a Change in Control, shall affect the Employee’s rights under this Restricted Stock Agreement as follows:

a.Retirement. If the Employee’s employment with the Company (as defined in Paragraph 8) is terminated by retirement prior to the last day of the Restriction Period, then as of the Termination Date, such number of shares of nonvested Restricted Stock equal to the Accelerated Portion shall fully vest, all restrictions (other than those described in Paragraph 12) applicable to the Accelerated Portion of the nonvested Restricted Stock shall terminate, the Company shall release from escrow or trust and shall issue and transfer electronically into Employee’s account at current plan administrator the Accelerated Portion of the nonvested Restricted Stock and the Employee shall forfeit the right to receive all shares of the nonvested Restricted Stock in excess of the Accelerated Portion. For these purposes, the “Accelerated Portion” shall be equal to the number of shares which is the product of (i) a fraction, the numerator of which is the number of completed months elapsed beginning on the Grant Date and ending on the date of termination of service as an Employee of the Company and the denominator of which is the total number of months in the Restriction Period, multiplied by (ii) the total number of shares of nonvested Restricted Stock

Page | 3

RSA Soma Officers

immediately prior to the date of termination of the Employee’s position as an Employee of the Company. For these purposes, the Employee’s position as an Employee of the Company will not be considered to be terminated by “retirement” unless and until (i) the Employee provides written notice to the Company of intent to formally retire; (ii) the Employee has reached age 55; (iii) the Employee’s combined age and years of service with the Company as an Employee is equal to 65 or greater; and (iv) the Company approves the Employee’s request to retire, which approval is in the Company’s sole discretion.

b.Death or Disability. If the Employee’s employment by the Company (as defined in Paragraph 8) is terminated by death or Disability, then immediately all nonvested Restricted Stock shall fully vest and all restrictions (other than described in Paragraph 12) applicable to Restricted Stock shall terminate. For purposes of this Agreement, Disability shall mean that the Employee was approved for a disability benefit under the Company’s Long-Term Disability Plan.

c.Change in Control. If a Change in Control shall occur, then all nonvested Restricted Stock shall fully vest, all restrictions (other than those described in Paragraph 12) applicable to such Restricted Stock shall terminate and the Company shall release from escrow or trust and shall issue and electronically transfer to the Employee all shares of Restricted Stock, but only if either: (i) the successor company does not assume, convert, continue, or otherwise replace the Restricted Stock on proportionate and equitable terms or (ii) the Employee is terminated without cause within twelve (12) months following the Change in Control.

8.Definition of Employment and Termination. For purposes of this Restricted Stock Agreement, “employment” means employment by the Company and/or its subsidiary (as “subsidiary” is defined under the Plan). “Termination Date” means the date upon which the Employee is separated from employment, whether voluntary or involuntary. Neither the transfer of the Employee from employment by the Company to employment by a subsidiary, nor the transfer of the Employee from employment by a subsidiary to employment by the Company, nor the transfer of the Employee from employment by a subsidiary to employment by another subsidiary shall be deemed to be a termination of employment of the Employee. Furthermore, in no event shall employment be deemed terminated under this Restricted Stock Agreement unless and until Employee’s employment by Company, to the extent applicable, and each of its subsidiaries, to the extent applicable, occur such that the Employee is no longer employed by the Company or any of its subsidiaries. Moreover, the employment of the Employee shall not be deemed terminated because of absence from active employment on account of temporary illness or during authorized vacation or during temporary leaves of absence from active employment granted by the Company or a subsidiary for reasons of professional advancement, education, health, or government service, or during military leave for any period if the Employee returns to active employment within 90 days after the termination of military leave, or during any period required to be treated as a leave of absence by virtue of any valid law or agreement. The Plan Administrator’s determination in good faith regarding whether a termination of employment of any type or Disability has occurred shall be conclusive and determinative.

9.Ownership Rights. Subject to the restrictions set forth herein and subject to Paragraph 12, the Employee is entitled to all voting and ownership rights applicable to the Restricted

Page | 4

RSA Soma Officers

Stock, including the right to receive any dividends that may be paid on Restricted Stock, whether or not vested. (Information on Chico’s stock, Annual Reports, and other relevant information may be found at www.chicosfas.com.)

10.Reorganization of Company and Subsidiaries. The existence of this Restricted Stock Agreement shall not affect in any way the right or power of the Company or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the Company’s capital structure or its business, or any merger or consolidation of the Company or any issue of bonds, debentures, preferred or prior preference stock ahead of or affecting the Restricted Stock or the rights thereof, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.

11.Adjustment of Shares. In the event of stock dividends, spin-offs of assets or other extraordinary dividends, stock splits, combinations of shares, recapitalizations, mergers, consolidations, reorganizations, liquidations, issuances of rights or warrants and similar transactions or events involving the Company (“Recapitalization Events”), then for all purposes references herein to Common Stock or to Restricted Stock shall mean and include all securities or other property (other than cash) that holders of Common Stock of the Company are entitled to receive in respect of Common Stock by reason of each successive Recapitalization Event, which securities or other property (other than cash) shall be treated in the same manner and shall be subject to the same restrictions as the underlying Restricted Stock.

12.Certain Restrictions. By accepting the Restricted Stock, the Employee agrees that if at the time of delivery of the shares of Restricted Stock issued hereunder any sale of such shares is not covered by an effective registration statement filed under the Securities Act of 1933 (the “Act”), the Employee will acquire the Restricted Stock for the Employee’s own account and without a view to resale or distribution in violation of the Act or any other securities law, and upon any such acquisition the Employee will enter into such written representations, warranties and agreements as the Company may reasonably request in order to comply with the Act or any other securities law or with this Restricted Stock Agreement.

13.Confidentiality. By accepting the Restricted Stock, Employee agrees that during the twenty-four month period immediately following Termination Date, Employee will not use or disclose Company's and/or its subsidiaries’ Confidential Information, except in the faithful performance of the Employee's duties for the Company. For purposes of this Agreement, Confidential Information includes trade secrets and other confidential and proprietary information and materials pertaining to, among other things: (a) designs (including garment and fabric) and fashion trends; (b) sourcing, manufacturing, merchandising, licensing and supply chain processes, techniques and plans; (c) advertising, marketing and promotional plans; (d) technical and business strategies and processes; (e) sales, revenues, profits, margin, expenses, and other financial information; (f) relationships between Company and its customers, its vendors and its employees; (g) customers' personal identifying information; (h) stores and real estate, including expansion and relocation plans; (i) store operations, including policies and procedures; (j) compensation, benefits, performance history and other information relating to the Company's and/or its subsidiaries’

Page | 5

RSA Soma Officers

employees; and (k) acquisitions, mergers, divestitures, and agreements regarding franchising and distribution. Confidential Information does not include information that is, or becomes, generally known within the industry or generally available to the public (unless through Employee's improper disclosure). The purpose of this provision is to protect the Company’s and/or its subsidiary’s legitimate interest in maintaining the confidentiality of its private business information; accordingly, nothing herein is intended to or shall be construed to prohibit communications among associates regarding their compensation or any other terms and conditions of employment.

14.Non-Competition. By accepting this Restricted Stock Agreement, the Employee agrees that during the six month period, or twelve month period for Group Vice President and above, immediately following Termination Date, the Employee will not, directly or indirectly, perform any job, task, function, skill, or responsibility for a Competing Business that the Employee has provided for Company (and/or its subsidiaries) within the twelve month period immediately preceding Employee’s Termination Date. For purposes of this Agreement, a Competing Business shall mean any direct competitor of the Company which, in general, means a specialty retailer of better women’s more1intimate apparel, sleepwear, and bath and body products. The Employee acknowledges that the foregoing restrictions may impair the Employee’s ability to engage in certain business activities during the defined period, but acknowledges that these restrictions are reasonable consideration for the grant of the Restricted Stock hereunder.

15.Nonsolicitation. By accepting the Restricted Stock, Employee agrees that for a period of twelve months following Termination Date, Employee will not directly or indirectly solicit, induce or attempt to influence any Company employee (including Company's subsidiaries' employee) to leave the Company's employ, nor will Employee assist anyone in soliciting or recruiting a Company employee (including Company's subsidiaries' employee) for purposes of being employed or retained as a consultant or contractor elsewhere.

16.Noncompliance Reporting. By accepting the Restricted Stock, Employee agrees that if, at any time, Employee learns of information suggesting conduct by an officer or employee of Company (including of Company's subsidiaries) or a member of Company's Board of Directors that is unlawful, unethical, or constitutes a material violation of any Company policy, regardless of the source of such information, Employee will report promptly such information to Company through any of the Company's internal mechanisms available for the reporting of such conduct such as, for instance, the Company's Ethics and Compliance Hotline.

17.Amendment and Termination. No amendment or termination of this Restricted Stock Agreement which would impair the rights of the Employee shall be made by the Board, the Committee or the Plan Administrator at any time without the written consent of the Employee. No amendment or termination of the Plan will adversely affect the right, title and interest of the Employee under this Restricted Stock Agreement or to Restricted Stock granted hereunder without the written consent of the Employee.

18.No Guarantee of Employment. This Restricted Stock Agreement shall not confer upon the Employee any right with respect to continuance of employment or other service with the Company or any subsidiary, nor shall it interfere in any way with any right the Company or any

Page | 6

RSA Soma Officers

subsidiary would otherwise have to terminate such Employee’s employment or other service at any time.

19.Withholding of Taxes. The Company shall have the right to (i) make deductions from the number of shares of Restricted Stock otherwise deliverable upon satisfaction of the conditions precedent under this Restricted Stock Agreement (and other amounts payable under this Restricted Stock Agreement) in an amount sufficient to satisfy withholding of any federal, state or local taxes required by law, or (ii) take such other action as may be necessary or appropriate to satisfy any such tax withholding obligations, provided, in any event, the Company shall withhold only the minimum amount necessary to satisfy applicable statutory withholding requirements.

20.No Guarantee of Tax Consequences. Neither the Company nor any subsidiary nor the Plan Administrator makes any commitment or guarantee that any federal or state tax treatment will apply or be available to any person eligible for benefits under this Restricted Stock Agreement.

21.Entire Agreement. This Restricted Stock Agreement constitutes and contains the entire agreement between the parties with respect to the subject matter hereof and supersedes any prior or contemporaneous oral or written agreements.

22.Severability. In the event that any provision of this Restricted Stock Agreement shall be held illegal, invalid, or unenforceable for any reason, such provision shall be fully severable, but shall not affect the remaining provisions of this Restricted Stock Agreement and this Restricted Stock Agreement shall be construed and enforced as if the illegal, invalid, or unenforceable provision had never been included herein.

23.Governing Law. The Restricted Stock Agreement shall be construed in accordance with the laws of the State of Florida to the extent federal law does not supersede and preempt Florida law.

24.Miscellaneous Provisions.

a.Not a Part of Salary. The grant of an Award under the Plan is not intended to be a part of the salary of the Employee.

b.Conflicts with Any Employment Agreement. If the Employee has an employment agreement with the Company or any of its subsidiaries which contains different or additional provisions relating to vesting of restricted stock awards, or otherwise conflicts with the terms of this Restricted Stock Agreement, the provisions of the employment agreement shall govern.

c.Independent Covenants. The Employee acknowledges that the promises set forth herein by either party are independent of each other and are independent of any other provision in any other agreement between the Employee and the Company and the existence of any claim or cause of action the Employee may have against the Company shall not constitute a defense to enforcement of the Employee’s promises herein.

Page | 7

RSA Soma Officers

d.Electronic Delivery and Signatures. The Employee hereby consents and agrees to electronic delivery of share(s) of Common Stock, Plan documents, proxy materials, annual reports and other related documents. The Company has established procedures for an electronic signature system for delivery and acceptance of Plan documents (including documents relating to any programs adopted under the Plan). The Employee hereby consents to such procedures and agrees that his or her electronic signature is the same as, and shall have the same force and effect as, his or her manual signature. The Employee consents and agrees that any such procedures and delivery may be effected by a third party engaged by the Company to provide administrative services related to the Plan, including any program adopted under the Plan.

Firmwide:142191837.1 049970.1002

Page | 8

RSA Soma Officers

EX-31.1

Exhibit 31.1

CHICO’S FAS, INC. AND SUBSIDIARIES CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

CERTIFICATION

I, Shelley G. Broader, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Chico’s FAS, Inc. for the period ended October 29, 2016;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 22, 2016

/s/ Shelley G. Broader
Name:	Shelley G. Broader
Title:	Chief Executive Officer and President

EX-31.2

Exhibit 31.2

CHICO’S FAS, INC. AND SUBSIDIARIES CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

CERTIFICATION

I, Todd E. Vogensen, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Chico’s FAS, Inc. for the period ended October 29, 2016;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 22, 2016

/s/ Todd E. Vogensen
Name:	Todd E. Vogensen
Title:	Executive Vice President, Chief Financial Officer and Assistant Corporate Secretary

EX-32.1

Exhibit 32.1

Certification Pursuant To 18 U.S.C. Section 1350,

As Adopted Pursuant To

Section 906 Of The Sarbanes-Oxley Act Of 2002

I, Shelley G. Broader, Chief Executive Officer and President of Chico’s FAS, Inc. (the “Company”) certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) The Quarterly Report of the Company on Form 10-Q for the period ended October 29, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”) fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Shelley G. Broader

Shelley G. Broader

Chief Executive Officer and President

Date: November 22, 2016

EX-32.2

Exhibit 32.2

Certification Pursuant To 18 U.S.C. Section 1350,

As Adopted Pursuant To

Section 906 Of The Sarbanes-Oxley Act Of 2002

I, Todd E. Vogensen, Executive Vice President, Chief Financial Officer and Corporate Secretary of Chico’s FAS, Inc. (the “Company”) certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) The Quarterly Report of the Company on Form 10-Q for the period ended October 29, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”) fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Todd E. Vogensen

Todd E. Vogensen

Executive Vice President, Chief Financial Officer and Assistant Corporate Secretary

Date: November 22, 2016

XML

Document And Entity Information - shares	9 Months Ended
	Oct. 29, 2016	Nov. 14, 2016
Document And Entity Information [Abstract]
Entity Registrant Name	CHICOS FAS INC
Entity Central Index Key	0000897429
Current Fiscal Year End Date	--01-28
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Document Period End Date	Oct. 29, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Common Stock, Shares Outstanding		129,205,515

XML

Condensed Consolidated Statements of Income (Loss) (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 29, 2016	Oct. 31, 2015	Oct. 29, 2016	Oct. 31, 2015
Income Statement [Abstract]
Net sales	$ 596,912	$ 645,433	$ 1,875,621	$ 2,029,025
Net sales, as a Percentage of Sales	100.00%	100.00%	100.00%	100.00%
Cost of goods sold	$ 366,618	$ 396,270	$ 1,142,182	$ 1,219,543
Cost of goods sold, as a Percentage of Sales	61.40%	61.40%	60.90%	60.10%
Gross margin	$ 230,294	$ 249,163	$ 733,439	$ 809,482
Gross margin, as a Percentage of Sales	38.60%	38.60%	39.10%	39.90%
Selling, general and administrative expenses	$ 188,350	$ 226,256	$ 583,117	$ 661,491
Selling, general and administrative expenses, as a Percentage of Sales	31.60%	35.10%	31.10%	32.60%
Goodwill and intangible impairment charges	$ 0	$ 45,514	$ 0	$ 112,455
Goodwill and intangible impairment charges, as a Percentage of Net Sales	0.00%	7.10%	0.00%	5.60%
Restructuring and strategic charges	$ 10,820	$ 3,137	$ 31,027	$ 34,178
Restructuring and strategic charges, as a Percentage of Sales	1.80%	0.40%	1.60%	1.60%
Income (loss) from operations	$ 31,124	$ (25,744)	$ 119,295	$ 1,358
Income (loss) from operations, as a Percentage of Sales	5.20%	(4.00%)	6.40%	0.10%
Interest expense, net	$ (526)	$ (466)	$ (1,474)	$ (1,421)
Interest expense, net, as a Percentage of Sales	(0.10%)	(0.10%)	(0.10%)	(0.10%)
Income (loss) before income taxes	$ 30,598	$ (26,210)	$ 117,821	$ (63)
Income (loss) before income taxes, as a Percentage of Sales	5.10%	(4.10%)	6.30%	0.00%
Income tax provision (benefit)	$ 7,000	$ (14,600)	$ 40,100	$ (23,100)
Income tax provision (benefit), as a Percentage of Sales	1.10%	(2.30%)	2.20%	(1.10%)
Net income (loss)	$ 23,598	$ (11,610)	$ 77,721	$ 23,037
Net income (loss), as a Percentage of Sales	4.00%	(1.80%)	4.10%	1.10%
Per share data:
Net income (loss) per common share-basic (in dollars per share)	$ 0.18	$ (0.09)	$ 0.59	$ 0.16
Net income (loss) per common and common equivalent share–diluted (in dollars per share)	$ 0.18	$ (0.09)	$ 0.58	$ 0.16
Weighted average common shares outstanding–basic (in shares)	128,753	136,172	129,830	139,386
Weighted average common and common equivalent shares outstanding–diluted (in shares)	128,996	136,172	129,999	139,724
Dividends declared per share (in dollars per share)	$ 0	$ 0	$ 0.24	$ 0.2325

XML

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 29, 2016	Oct. 31, 2015	Oct. 29, 2016	Oct. 31, 2015
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ 23,598	$ (11,610)	$ 77,721	$ 23,037
Other comprehensive income (loss):
Unrealized (losses) gains on marketable securities, net of taxes	(35)	12	4	(6)
Foreign currency translation (losses) gains, net of taxes	(19)	(31)	(46)	90
Comprehensive income (loss)	$ 23,544	$ (11,629)	$ 77,679	$ 23,121

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Oct. 29, 2016	Jan. 30, 2016	Oct. 31, 2015
Current Assets:
Cash and cash equivalents	$ 80,331	$ 89,951	$ 91,256
Marketable securities, at fair value	50,411	50,194	47,316
Inventories	261,341	233,834	268,968
Prepaid expenses and other current assets	46,635	45,660	55,149
Income tax receivable	3,402	29,157	16,225
Assets held for sale	18,520	16,525	41,802
Total Current Assets	460,640	465,321	520,716
Property and Equipment, net	495,587	550,953	556,172
Other Assets:
Goodwill	96,774	96,774	96,774
Other intangible assets, net	38,930	38,930	38,930
Other assets, net	18,382	14,074	40,622
Total Other Assets	154,086	149,778	176,326
Total Assets	1,110,313	1,166,052	1,253,214
Current Liabilities:
Accounts payable	125,532	129,343	147,526
Current debt	10,000	10,000	10,000
Other current and deferred liabilities	148,706	158,788	140,557
Liabilities held for sale	0	0	8,478
Total Current Liabilities	284,238	298,131	306,561
Noncurrent Liabilities:
Long-term debt	74,768	82,219	84,702
Deferred liabilities	122,848	130,743	135,390
Deferred taxes	9,320	15,171	20,385
Total Noncurrent Liabilities	206,936	228,133	240,477
Commitments and Contingencies
Stockholders’ Equity:
Preferred stock	0	0	0
Common stock	1,301	1,355	1,394
Additional paid-in capital	445,787	435,881	429,746
Treasury stock, at cost	(366,081)	(289,813)	(249,854)
Retained earnings	538,134	492,325	524,244
Accumulated other comprehensive (loss) income	(2)	40	646
Total Stockholders’ Equity	619,139	639,788	706,176
Total Liabilities and Stockholders' Equity	$ 1,110,313	$ 1,166,052	$ 1,253,214

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Oct. 29, 2016	Oct. 31, 2015
Cash Flows From Operating Activities:
Net income	$ 77,721	$ 23,037
Adjustments to reconcile net income to net cash provided by operating activities:
Goodwill and intangible impairment charges, pre-tax	0	112,455
Depreciation and amortization	82,585	90,266
Loss on disposal and impairment of property and equipment	6,434	22,609
Deferred tax benefit	(8,098)	(52,623)
Stock-based compensation expense	15,483	20,712
Excess tax benefit from stock-based compensation	(322)	(2,992)
Deferred rent and lease credits	(14,264)	(15,018)
Changes in assets and liabilities:
Inventories	(27,506)	(44,811)
Prepaid expenses and accounts receivable	(6,237)	(12,024)
Income tax receivable	25,755	(15,629)
Accounts payable	(3,789)	7,377
Accrued and other liabilities	(3,391)	(3,300)
Net cash provided by operating activities	144,371	130,059
Cash Flows From Investing Activities:
Purchases of marketable securities	(43,266)	(43,479)
Proceeds from sale of marketable securities	43,058	122,712
Purchases of property and equipment, net	(35,663)	(66,595)
Net cash (used in) provided by investing activities	(35,871)	12,638
Cash Flows From Financing Activities:
Proceeds from borrowings	0	124,000
Payments on borrowings	(7,500)	(29,000)
Proceeds from issuance of common stock	2,363	10,614
Excess tax benefit from stock-based compensation	322	2,992
Dividends paid	(31,936)	(32,933)
Repurchase of common stock	(81,324)	(260,555)
Net cash used in financing activities	(118,075)	(184,882)
Effects of exchange rate changes on cash and cash equivalents	(45)	90
Net decrease in cash and cash equivalents	(9,620)	(42,095)
Cash and Cash Equivalents, Beginning of period	89,951	133,351
Cash and Cash Equivalents, End of period	80,331	91,256
Supplemental Disclosures of Cash Flow Information:
Cash paid for interest	1,713	2,112
Cash paid for income taxes, net	$ 22,752	$ 47,377

XML

Basis of Presentation

9 Months Ended

Oct. 29, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Chico’s FAS, Inc. and its wholly-owned subsidiaries (collectively, the “Company”) have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and notes required by accounting principles generally accepted in the U.S. (“U.S. GAAP”) for complete financial statements. In the opinion of management, such interim financial statements reflect all normal, recurring adjustments considered necessary to present fairly the condensed consolidated financial position, the results of operations and cash flows for the interim periods presented. All significant intercompany balances and transactions have been eliminated in consolidation. For further information, refer to the consolidated financial statements and notes thereto for the fiscal year ended January 30, 2016, included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 8, 2016.

As used in this report, all references to “we,” “us,” “our,” and “the Company,” refer to Chico’s FAS, Inc. and all of its wholly-owned subsidiaries.

Our fiscal years end on the Saturday closest to January 31 and are designated by the calendar year in which the fiscal year commences. Operating results for the thirteen and thirty-nine weeks ended October 29, 2016 are not necessarily indicative of the results that may be expected for the entire year.

Reclassifications

Reclassifications of certain prior year balances were made in order to conform to the current year presentation.

Change in Accounting Policy

Effective January 31, 2016, the Company made a voluntary change in accounting principle related to our classification of shipping expenses. Historically, we have presented shipping expenses within selling, general and administrative expenses ("SG&A"). Under the new policy, the Company is presenting these expenses within cost of good sold ("COGS") in the unaudited Condensed Consolidated Statements of Income. The Company believes that this change is preferable as the shipping expenses represent direct costs associated with the sale of our merchandise and improves comparability with the Company's peers. The accounting policy change was applied retrospectively to all periods presented. There was no change to consolidated net income, however, cost of sales increased by $8.8 million and SG&A decreased by the same amount for the thirteen weeks ended October 31, 2015. The Company recorded $8.6 million in shipping expense as a component of COGS during the thirteen weeks ended October 29, 2016. For the year-to-date period ended October 31, 2015, cost of sales increased by $27.6 million and SG&A decreased by the same amount. The Company recorded $25.5 million in shipping expense as a component of COGS during the thirty-nine weeks ended October 29, 2016.

Reclassification of Occupancy Expenses and Correction of Immaterial Accounting Error

The Company has changed its classification of store occupancy expenses. Historically, we have presented store occupancy expenses within SG&A. As now reclassified, the Company is presenting these expenses within COGS in the unaudited Condensed Consolidated Statements of Income. The Company believes that the store occupancy expenses represent direct costs associated with the sale of our merchandise and improves comparability with the Company’s peers. This reclassification was applied retrospectively to all periods presented. There was no change to consolidated net income, however, cost of sales increased by $96.8 million and SG&A decreased by the same amount for the thirteen weeks ended October 31, 2015. The Company recorded $95.4 million in store occupancy expenses as a component of COGS during the thirteen weeks ended October 29, 2016. For the year-to-date period ended October 31, 2015, cost of sales increased by $289.3 million and SG&A decreased by the same amount. The Company recorded $287.3 million in store occupancy expenses as a component of COGS during the thirty-nine weeks ended October 29, 2016.

The Company has also elected to correct the historical classification of shipping revenue within SG&A. To correct the immaterial error, we are classifying shipping revenue as a component of net sales within the unaudited Condensed Consolidated Statements of Income for all periods presented. There was no change to consolidated net income, however, net sales increased by $4.2 million and SG&A increased by the same amount for the thirteen weeks ended October 31, 2015. The Company recorded $3.0 million in shipping revenue as a component of net sales during the thirteen weeks ended October 29, 2016. For the year-to-date period ended October 31, 2015, net sales increased by $14.1 million and SG&A increased by the same amount. The Company recorded $9.7 million in shipping revenue as a component of net sales during the thirty-nine weeks ended October 29, 2016.

Adjustments to Presentation

The above mentioned changes had no cumulative effect on the presentation of the unaudited Condensed Consolidated Statements of Income, Condensed Consolidated Balance Sheets, or Condensed Consolidated Statements of Cash Flows. The effects of the aforementioned accounting policy change, change in classification and error correction to the October 31, 2015 unaudited Condensed Consolidated Statement of Income are as follows (dollars in thousands):

	As Previously Reported		% of Sales	Change in Accounting Policy			Effect of Change in Occupancy Classification			Effect of Error Correction		As Adjusted		% of Sales
Thirteen Weeks Ended October 31, 2015
Net sales	$	641,219	100.0	$	—		$	—		$	4,214	$	645,433	100.0
Cost of goods sold	290,737		45.3	8,760			96,773			—		396,270		61.4
Gross Margin	350,482		54.7	(8,760		)	(96,773		)	4,214		249,163		38.6
Selling, general and administrative expenses	327,575		51.1	(8,760		)	(96,773		)	4,214		226,256		35.1

	As Previously Reported		% of Sales	Change in Accounting Policy			Effect of Change in Occupancy Classification			Effect of Error Correction		As Adjusted		% of Sales
Thirty-Nine Weeks Ended October 31, 2015
Net sales	$	2,014,910	100.0	$	—		$	—		$	14,115	$	2,029,025	100.0
Cost of goods sold	902,690		44.8	27,585			289,268			—		1,219,543		60.1
Gross Margin	1,112,220		55.2	(27,585		)	(289,268		)	14,115		809,482		39.9
Selling, general and administrative expenses	964,229		47.9	(27,585		)	(289,268		)	14,115		661,491		32.6

Footnotes to the unaudited Condensed Consolidated Financial Statements herein have been adjusted to reflect the impact of these changes accordingly.

XML

New Accounting Pronouncements

9 Months Ended

Oct. 29, 2016

Accounting Changes and Error Corrections [Abstract]

New Accounting Pronouncements

New Accounting Pronouncements

In March 2016, the Financial Accounting Standards Board ("FASB") issued ASU No. 2016-09, Compensation - Stock Compensation. ASU 2016-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. ASU 2016-09 requires entities to recognize the income tax effects of awards in the income statement when the awards vest or are settled. The standard also permits an employer to repurchase more of an employee's shares for tax withholding purposes without triggering liability accounting and to make a policy election to account for forfeitures as they occur. This standard will be effective and adopted for our first quarter 2017. We are currently assessing the new standard and its impact to our consolidated results of operations, financial position and cash flows.

In February 2016, the FASB issued ASU No. 2016-02, Leases, which replaces the existing guidance in Accounting Standard Codification 840, Leases. ASU 2016-02 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. ASU 2016-02 requires a dual approach for lessee accounting under which a lessee would account for leases as finance leases or operating leases. Both finance leases and operating leases will result in the lessee recognizing a right-of-use asset and corresponding lease liability. For finance leases, the lessee would recognize interest expense and amortization of the right-of-use asset and for operating leases, the lessee would recognize straight-line total rent expense. We are currently assessing the new standard and its impact to our consolidated results of operations, financial position and cash flows.

In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes, which modifies the presentation of noncurrent and current deferred taxes. ASU 2015-17 requires that all deferred tax assets and liabilities be classified as noncurrent on the balance sheet instead of separating deferred taxes into current and noncurrent amounts. The standard is effective for interim and annual reporting periods beginning after December 15, 2016. Early adoption is permitted. We early adopted this standard in the fourth quarter of 2015, with retrospective presentation, as shown in our consolidated balance sheets. Our retrospective presentation resulted in a $26.9 million reclassification from current assets to other assets, net for the period ending October 31, 2015.

In July 2015, the Financial Accounting Standards Board ("FASB") issued ASU No. 2015-11, Simplifying the Measurement of Inventory (Topic 330). The amendments, which apply to inventory that is measured using any method other than the last-in, first-out (LIFO) or retail inventory method, require that entities measure inventory at the lower of cost or net realizable value. ASU 2015-11 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016 and should be applied on a prospective basis. We are currently assessing the potential impact of adopting this ASU, but do not, at this time, anticipate a material impact to our consolidated results of operations, financial position or cash flows.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers. The update outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. ASU 2014-09 requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration the entity expects to be entitled to in exchange for those goods or services. In August 2015, the FASB approved a one year deferral of the effective date, to make it effective for annual and interim reporting periods beginning after December 15, 2017. The standard allows for either a full retrospective or a modified retrospective transition method. The FASB has issued subsequent ASUs related to ASU No. 2014-09, which detail amendments to the ASU, implementation considerations, narrow-scope improvements and practical expedients. We are currently assessing the new standard and all related ASUs and its impact to our consolidated results of operations, financial position and cash flows.

XML

Restructuring and Strategic Charges

9 Months Ended

Oct. 29, 2016

Restructuring and Related Activities [Abstract]

Restructuring and Strategic Charges

Restructuring and Strategic Charges

During the fourth quarter of fiscal 2014, we initiated a restructuring program, including the acceleration of domestic store closures and an organizational realignment, to ensure that resources align with long-term growth initiatives, including omni-channel. In fiscal 2015, in connection with the restructuring program, we completed an evaluation of the Boston Proper brand, completed the sale of the Boston Proper direct-to-consumer business, and closed its stores. 

During the first quarter of fiscal 2016, we announced an expansion of our restructuring program to further align the organizational structure with long-term growth initiatives, including transition of executive leadership, and to reduce COGS and SG&A through strategic initiatives. These strategic initiatives include realigning marketing and digital commerce, improving supply chain efficiency, and reducing non-merchandise and marketing expenses. In fiscal 2016, the Company recorded pre-tax restructuring and strategic charges of $10.8 million for the third quarter and $31.0 million year-to-date, primarily related to outside services, severance and proxy solicitation costs.

In connection with the restructuring program, we evaluated our domestic store portfolio and identified approximately 175 stores for closure, with 90 stores across our brands, including 20 Boston Proper stores, closed through the third quarter of fiscal 2016. As a result, we expect to incur additional cash charges related to lease termination expenses of approximately $1.7 million through fiscal 2017 related to these future closures.

A summary of the pre-tax restructuring and strategic charges is presented in the table below:

	Thirteen Weeks Ended					Thirty-Nine Weeks Ended
	October 29, 2016		October 31, 2015			October 29, 2016		October 31, 2015
	(in thousands)
Impairment charges	$	—	$	329		$	1,453	$	21,259
Continuing employee-related costs	781		—			1,796		5,639
Severance charges	65		(12		)	9,485		1,808
Proxy solicitation costs	108		—			5,697		—
Lease termination charges	79		2,146			427		4,903
Outside services	9,779		—			12,013		—
Other charges	8		674			156		569
Total restructuring and strategic charges, pre-tax	$	10,820	$	3,137		$	31,027	$	34,178

As of October 29, 2016, a reserve of $18.1 million related to restructuring and strategic activities was included in other current and deferred liabilities in the accompanying condensed consolidated balance sheets. A roll-forward of the reserve is presented as follows:

	Continuing Employee-related Costs			Severance Charges			Proxy Solicitation Costs			Lease Termination Charges			Outside Services			Other charges			Total
	(in thousands)
Beginning Balance, January 30, 2016	$	2,549		$	1,678		$	—		$	1,101		$	9		$	—		$	5,337
Charges	1,796			9,485			5,697			427			12,013			156			29,574
Payments	(3,702		)	(6,066		)	(5,697		)	(612		)	(623		)	(130		)	(16,830		)
Ending Balance, October 29, 2016	$	643		$	5,097		$	—		$	916		$	11,399		$	26		$	18,081

XML

Stock-Based Compensation

9 Months Ended

Oct. 29, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

Stock-Based Compensation

For the thirty-nine weeks ended October 29, 2016 and October 31, 2015, stock-based compensation expense was $15.5 million and $20.7 million, respectively. As of October 29, 2016, approximately 5.8 million shares remain available for future grants of equity awards under our 2012 Omnibus Stock and Incentive Plan.

Restricted Stock Awards

Restricted stock award activity for the thirty-nine weeks ended October 29, 2016 was as follows:

	Number of Shares		Weighted Average Grant Date Fair Value
Unvested, beginning of period	2,585,392		$	16.60
Granted	1,719,380		12.35
Vested	(1,062,433	)	17.06
Forfeited	(776,587	)	15.20
Unvested, end of period	2,465,752		13.88

Performance-based Stock Units

For the thirty-nine weeks ended October 29, 2016, we granted performance-based restricted stock units (“PSUs”), contingent upon the achievement of a Company-specific performance goal during fiscal 2016. Any units earned as a result of the achievement of this goal will vest over 3 years from the date of grant and will be settled in shares of our common stock.

Performance-based restricted stock unit activity for the thirty-nine weeks ended October 29, 2016 was as follows:

	Number of Shares		Weighted Average Grant Date Fair Value
Unvested, beginning of period	469,898		$	18.23
Granted	733,360		12.55
Vested	(228,105	)	18.23
Forfeited (1)	(329,891	)	15.29
Unvested, end of period	645,262		13.28

⁽¹⁾ The performance goal for the PSUs granted in 2015 was not fully met. Forfeitures for the thirty-nine weeks ended October 29, 2016 include the portion of the fiscal 2015 PSUs that were not earned.

Stock Option Awards

For the thirty-nine weeks ended October 29, 2016 and October 31, 2015, we did not grant any stock options.

Stock option activity for the thirty-nine weeks ended October 29, 2016 was as follows:

	Number of Shares		Weighted  Average Exercise Price
Outstanding, beginning of period	1,060,774		$	15.17
Granted	—		—
Exercised	(46,810	)	6.51
Forfeited or expired	(202,783	)	23.98
Outstanding and exercisable at October 29, 2016	811,181		13.47

XML

Income Taxes

9 Months Ended

Oct. 29, 2016

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The provision for income taxes is based on a current estimate of the annual effective tax rate and is adjusted as necessary for quarterly events. Our effective income tax rate may fluctuate from quarter to quarter as a result of a variety of factors, including changes in our assessment of certain tax contingencies, valuation allowances, changes in tax law, outcomes of administrative audits, the impact of discrete items, and the mix of earnings.

For the thirteen weeks ended October 29, 2016 and October 31, 2015, the effective tax rate was 22.9% and (55.7)%, respectively. For the thirteen weeks ended October 29, 2016, the income tax provision was $7.0 million compared to the income tax benefit of $14.6 million for the thirteen weeks ended October 31, 2015. The favorability in the effective tax rate for the third quarter of 2016 primarily reflects an additional tax benefit related to the disposition of Boston Proper's stock and the realization of income tax credits in 2016. The income tax benefit for the third quarter of 2015 of $14.6 million and effective tax rate of (55.7)% primarily reflected the tax benefit related to the disposition of Boston Proper's stock and the impact of the Boston Proper goodwill and trade name impairment on the annual effective tax rate.

For the thirty-nine weeks ended October 29, 2016, the income tax provision of $40.1 million and effective tax rate of 34.0% primarily reflected the pre-tax net income during the year and the additional tax benefit related to the disposition of Boston Proper's stock and the realization of income tax credits in 2016. For the thirty-nine weeks ended October 31, 2015, the income tax benefit was $23.1 million. The effective tax rate of 34.0% for the thirty-nine weeks ended October 29, 2016 was not comparable to the effective tax rate for the thirty-nine weeks ended October 31, 2015 primarily due to the tax benefit recorded in fiscal 2015 related to the disposition of Boston Proper's stock and the impact of the Boston Proper goodwill impairment on the annual effective tax rate.

XML

Earnings Per Share

9 Months Ended

Oct. 29, 2016

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

In accordance with relevant accounting guidance, unvested share-based payment awards that include non-forfeitable rights to dividends, whether paid or unpaid, are considered participating securities. As a result, such awards are required to be included in the calculation of earnings per common share pursuant to the “two-class” method. For us, participating securities are composed entirely of unvested restricted stock awards and PSUs that have met their relevant performance criteria.

Earnings per share (“EPS”) is determined using the two-class method when it is more dilutive than the treasury stock method. Basic EPS excludes dilution and is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding during the period, including participating securities. Diluted EPS reflects the dilutive effect of potential common shares from non-participating securities such as stock options and PSUs.

The following table sets forth the computation of basic and diluted EPS shown on the face of the accompanying condensed consolidated statements of operations (in thousands, except per share amounts):

	Thirteen Weeks Ended						Thirty-Nine Weeks Ended
	October 29, 2016			October 31, 2015			October 29, 2016			October 31, 2015
Numerator
Net income (loss)	$	23,598		$	(11,610	)	$	77,721		$	23,037
Net income and dividends declared allocated to participating securities	(502		)	—			(1,677		)	(492		)
Net income (loss) available to common shareholders	$	23,096		$	(11,610	)	$	76,044		$	22,545
Denominator
Weighted average common shares outstanding – basic	128,753			136,172			129,830			139,386
Dilutive effect of non-participating securities	243			—			169			338
Weighted average common and common equivalent shares outstanding – diluted	128,996			136,172			129,999			139,724
Net income (loss) per common share:
Basic	$	0.18		$	(0.09	)	$	0.59		$	0.16
Diluted	$	0.18		$	(0.09	)	$	0.58		$	0.16

For the thirteen weeks weeks ended October 29, 2016 and October 31, 2015, 0.7 million and 0.3 million potential shares of common stock, respectively, were excluded from the diluted per share calculation relating to non-participating securities, because the effect of including these potential shares was antidilutive.

For the thirty-nine weeks ended October 29, 2016 and October 31, 2015, 0.9 million and 1.3 million potential shares of common stock, respectively, were excluded from the diluted per share calculation relating to non-participating securities, because the effect of including these potential shares was antidilutive.

XML

Fair Value Measurements

9 Months Ended

Oct. 29, 2016

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

Our financial instruments consist of cash, money market accounts, marketable securities, assets held in our non-qualified deferred compensation plan, accounts receivable and payable, and debt. Cash, accounts receivable and accounts payable are carried at cost, which approximates their fair value due to the short-term nature of the instruments.

Marketable securities are classified as available-for-sale and as of October 29, 2016 generally consist ofcorporate bonds, U.S. government agencies, municipal securities, and commercial paper with $25.4 million of securities with maturity dates within one year or less and $25.0 million with maturity dates over one year and less than two years.

We consider all marketable securities available-for-sale, including those with maturity dates beyond 12 months, and therefore classify these securities within current assets on the condensed consolidated balance sheets as they are available to support current operational liquidity needs. Marketable securities are carried at fair value, with the unrealized holding gains and losses, net of income taxes, reflected in accumulated other comprehensive income until realized. For the purposes of computing realized and unrealized gains and losses, cost is determined on a specific identification basis.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. Entities are required to use a three-level hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability on the measurement date. The three levels are defined as follows:

Level 1	—	Unadjusted quoted prices in active markets for identical assets or liabilities
Level 2	—	Unadjusted quoted prices in active markets for similar assets or liabilities, or; Unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or; Inputs other than quoted prices that are observable for the asset or liability
Level 3	—	Unobservable inputs for the asset or liability

We measure certain financial assets at fair value on a recurring basis, including our marketable securities, which are classified as available-for-sale securities, certain cash equivalents, specifically our money market accounts, and assets held in our non-qualified deferred compensation plan. The money market accounts are valued based on quoted market prices in active markets. Our marketable securities are generally valued based on other observable inputs for those securities (including market corroborated pricing or other models that utilize observable inputs such as interest rates and yield curves) based on information provided by independent third party pricing entities, except for U.S. government securities which are valued based on quoted market prices in active markets. The investments in our non-qualified deferred compensation plan are valued using quoted market prices and are included in other assets on our condensed consolidated balance sheets.

From time to time, we measure certain assets at fair value on a non-recurring basis, including evaluation of long-lived assets, goodwill and other intangible assets for impairment using company-specific assumptions which would fall within Level 3 of the fair value hierarchy. We estimate the fair value of assets held for sale using market values for similar assets which would fall within Level 2 of the fair value hierarchy.

To assess the fair value of long-term debt, we utilize a discounted future cash flow model using current borrowing rates for similar types of debt of comparable maturities.

Fair value calculations contain significant judgments and estimates, which may differ from actual results due to, among other things, economic conditions, changes to the business model or changes in operating performance.

During the quarter ended October 29, 2016, we did not make any transfers between Level 1 and Level 2 financial instruments. Furthermore, as of October 29, 2016, January 30, 2016 and October 31, 2015, we did not have any Level 3 financial instruments. We conduct reviews on a quarterly basis to verify pricing, assess liquidity, and determine if significant inputs have changed that would impact the fair value hierarchy disclosure.

In accordance with the provisions of the guidance, we categorized our financial instruments, which are valued on a recurring basis, based on the priority of the inputs to the valuation technique for the instruments, as follows:

			Fair Value Measurements at Reporting Date Using
	Balance as of October 29, 2016		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(in thousands)
Financial Assets:
Current Assets
Cash equivalents:
Money market accounts	$	365	$	365	$	—	$	—
Marketable securities:
Municipal securities	3,193		—		3,193		—
U.S. government agencies	23,113		—		23,113		—
Corporate bonds	18,253		—		18,253		—
Commercial paper	5,852		—		5,852		—
Non Current Assets
Deferred compensation plan	7,291		7,291		—		—
Total	$	58,067	$	7,656	$	50,411	$	—
Financial Liabilities:
Long-term debt1	$	84,768	$	—	$	85,207	$	—
	Balance as of January 30, 2016
Financial Assets:
Current Assets
Cash equivalents:
Money market accounts	$	275	$	275	$	—	$	—
Marketable securities:
U.S. government agencies	21,800		—		21,800		—
Corporate bonds	26,149		—		26,149		—
Commercial paper	2,245		—		2,245		—
Non Current Assets
Deferred compensation plan	7,023		7,023		—		—
Total	$	57,492	$	7,298	$	50,194	$	—
Financial Liabilities:
Long-term debt	$	92,219	$	—	$	92,647	$	—
	Balance as of October 31, 2015
Financial Assets:
Current Assets
Cash equivalents:
Money market accounts	$	3,100	$	3,100	$	—	$	—
Marketable securities:
U.S. government agencies	17,817		—		17,817		—
Corporate bonds	27,256		—		27,256		—
Commercial paper	2,243		—		2,243		—
Non Current Assets
Deferred compensation plan	8,632		8,632		—		—
Total	$	59,048	$	11,732	$	47,316	$	—
Financial Liabilities:
Long-term debt	94,702		—		$	95,161	—

¹ The carrying value of long-term debt includes the remaining unamortized discount of $0.2 million on the issuance of debt.

XML

Debt

9 Months Ended

Oct. 29, 2016

Debt Disclosure [Abstract]

Debt

Debt

In fiscal 2015, we entered into a credit agreement (the "Agreement) providing for a term loan of $100.0 million and a revolving credit facility of $100.0 million. The term loan and revolving credit facility mature on May 4, 2020 and accrue interest by reference, at our election, at either an adjusted eurodollar rate tied to LIBOR or an Alternate Base Rate plus an interest rate margin, as defined in the Agreement. The Agreement contains customary representations, warranties, and affirmative covenants, including the requirement to maintain certain financial ratios. The Company was in compliance with the applicable ratio requirements and other covenants at October 29, 2016. As of October 29, 2016, we had total available borrowing capacity of $100.0 million under our revolving credit facility.

The following table provides details on our debt outstanding as of October 29, 2016, January 30, 2016 and October 31, 2015:

	October 29, 2016			January 30, 2016			October 31, 2015
	(in thousands)
Credit Agreement, net	$	84,768		$	92,219		$	94,702
Less: current portion	(10,000		)	(10,000		)	(10,000		)
Total long-term debt	$	74,768		$	82,219		$	84,702

XML

Share Repurchases

9 Months Ended

Oct. 29, 2016

Equity [Abstract]

Share Repurchases

Share Repurchases

During the thirty-nine weeks ended October 29, 2016, we repurchased 6.5 million shares, under our share repurchase program announced in November 2015 at a total cost of approximately $76.3 million. As of October 29, 2016, the Company has $183.7 million remaining under the share repurchase program. However, we have no continuing obligation to repurchase shares under this authorization, and the timing, actual number and value of any additional shares to be purchased will depend on the performance of our stock price, market conditions and other considerations.

XML

Commitments and Contingencies

9 Months Ended

Oct. 29, 2016

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

In July 2015, the Company was named as a defendant in Altman v. White House Black Market, Inc., a putative class action filed in the United States District Court for the Northern District of Georgia. The Complaint alleges that the Company, in violation of federal law, published more than the last five digits of a credit or debit card number or an expiration date on customers' receipts. The Company denies the material allegations of the complaint. Its motion to dismiss was denied on July 13, 2016, but the Company continues to believe that the case is without merit and is not appropriate for class treatment. It intends to vigorously defend the matter. At this time however, it is not possible to predict whether the proceeding will be permitted to proceed as a class or the size of the putative class, and no assurance can be given that the Company will be successful in its defense on the merits or otherwise. Because the case is still in the early stages and class determinations have not been made, the Company is unable to estimate any potential loss or range of loss.

In June 2015, the Company was named as a defendant in Ackerman v. Chico’s FAS, Inc., a putative representative Private Attorney General action filed in the Superior Court of California, County of Los Angeles. The Complaint alleges numerous violations of California law related to wages, meal periods, rest periods, wage statements, and failure to reimburse business expenses, among other things. Plaintiff subsequently amended her complaint to make the same allegations on a class action basis. In June 2016, the parties submitted a proposed settlement of the matter to the court, and the court granted preliminary approval on August 26, 2016, and settlement notices have been distributed. If finally approved, the proposed settlement will not have a material adverse effect on the Company’s consolidated financial condition or results of operations.

In March 2016, the Company was named as a defendant in Cunningham v. Chico’s FAS, Inc., a putative class action filed in the Superior Court of California, County of San Diego. Given the overlap with the claims alleged in the Ackerman case, described above, the Court initially stayed the Cunningham case pending final approval of the Ackerman settlement. In October 2016, the parties agreed to lift the stay and to resolve the matter as an individual action. The Court has since dismissed the case. The settlement amount was immaterial.

In June 2016, the Company was named as a defendant in Rodems v. Chico’s FAS, Inc., a putative class action filed in the Superior Court of California, County of Fresno. Plaintiff sought to represent current and former nonexempt employees of Chico’s stores in California. The Complaint alleged many of the same Labor Code violations as Ackerman, described above. As a result, the court stayed the matter pending final approval of the Ackerman proposed settlement. The Company and the plaintiff subsequently agreed to a lifting of the stay and a filing of an amended complaint in early November, and the Company removed the case to the United State District Court for the Eastern District of California on November 9, 2016. In the proposed First Amended Complaint, the plaintiff makes similar claims of Labor Code violations against the Company but does not seek to represent a putative class or make class action allegations. The Company disputes the allegations of the First Amended Complaint and, at this time, does not expect that this case will have a material adverse effect on the Company’s consolidated financial condition or results of operation.

On July 28, 2016, the Company was named as a defendant in Calleros v. Chico’s FAS, Inc., a putative class action filed in the Superior Court of California, County of Santa Barbara. Plaintiff alleges that the Company failed to comply with California law requiring it to provide consumers cash for gift cards with a stored value of less than $10.00. The Company believes that the matter is not appropriate for class treatment; however, it is not possible to predict whether it will be permitted to proceed as a class or the size of the putative class, and no assurance can be given that the Company will be successful in its defense of this action on the merits or otherwise. Because class determinations have not been made, the Company is unable to estimate any potential loss or range of loss were it to lose on the merits of the case. However, the case is scheduled for voluntary mediation on November 28, 2016, and, at this time, the Company does not expect that the case will have a material adverse effect on the Company’s consolidated financial conditions or results of operation.

Other than as noted above, we are not currently a party to any legal proceedings other than claims and lawsuits arising in the normal course of business. All such matters are subject to uncertainties and outcomes may not be predictable. Consequently, the ultimate aggregate amount of monetary liability or financial impact with respect to these matters as of October 29, 2016 are not estimable. However, while such matters could affect our consolidated operating results when resolved in future periods, management believes that upon final disposition, any monetary liability or financial impact to us would not be material to our annual consolidated financial statements.

XML

Subsequent Events

9 Months Ended

Oct. 29, 2016

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

On November 22, 2016, we announced that our Board of Directors has declared a quarterly dividend of $0.08 per share on our common stock. The dividend will be payable on December 19, 2016 to shareholders of record at the close of business on December 5, 2016. Although it is our Company’s intention to continue to pay a quarterly cash dividend in the future, any decision to pay future cash dividends will be made by the Board of Directors and will depend on future earnings, financial condition and other factors.

XML

Basis of Presentation (Policies)

9 Months Ended

Oct. 29, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Chico’s FAS, Inc. and its wholly-owned subsidiaries (collectively, the “Company”) have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and notes required by accounting principles generally accepted in the U.S. (“U.S. GAAP”) for complete financial statements. In the opinion of management, such interim financial statements reflect all normal, recurring adjustments considered necessary to present fairly the condensed consolidated financial position, the results of operations and cash flows for the interim periods presented. All significant intercompany balances and transactions have been eliminated in consolidation.

Reclassifications

Reclassifications

Reclassifications of certain prior year balances were made in order to conform to the current year presentation.

The Company has changed its classification of store occupancy expenses. Historically, we have presented store occupancy expenses within SG&A. As now reclassified, the Company is presenting these expenses within COGS in the unaudited Condensed Consolidated Statements of Income. The Company believes that the store occupancy expenses represent direct costs associated with the sale of our merchandise and improves comparability with the Company’s peers. This reclassification was applied retrospectively to all periods presented. There was no change to consolidated net income, however, cost of sales increased by $96.8 million and SG&A decreased by the same amount for the thirteen weeks ended October 31, 2015. The Company recorded $95.4 million in store occupancy expenses as a component of COGS during the thirteen weeks ended October 29, 2016. For the year-to-date period ended October 31, 2015, cost of sales increased by $289.3 million and SG&A decreased by the same amount. The Company recorded $287.3 million in store occupancy expenses as a component of COGS during the thirty-nine weeks ended October 29, 2016.

The Company has also elected to correct the historical classification of shipping revenue within SG&A. To correct the immaterial error, we are classifying shipping revenue as a component of net sales within the unaudited Condensed Consolidated Statements of Income for all periods presented.

New Accounting Pronouncements

In March 2016, the Financial Accounting Standards Board ("FASB") issued ASU No. 2016-09, Compensation - Stock Compensation. ASU 2016-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. ASU 2016-09 requires entities to recognize the income tax effects of awards in the income statement when the awards vest or are settled. The standard also permits an employer to repurchase more of an employee's shares for tax withholding purposes without triggering liability accounting and to make a policy election to account for forfeitures as they occur. This standard will be effective and adopted for our first quarter 2017. We are currently assessing the new standard and its impact to our consolidated results of operations, financial position and cash flows.

In February 2016, the FASB issued ASU No. 2016-02, Leases, which replaces the existing guidance in Accounting Standard Codification 840, Leases. ASU 2016-02 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. ASU 2016-02 requires a dual approach for lessee accounting under which a lessee would account for leases as finance leases or operating leases. Both finance leases and operating leases will result in the lessee recognizing a right-of-use asset and corresponding lease liability. For finance leases, the lessee would recognize interest expense and amortization of the right-of-use asset and for operating leases, the lessee would recognize straight-line total rent expense. We are currently assessing the new standard and its impact to our consolidated results of operations, financial position and cash flows.

In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes, which modifies the presentation of noncurrent and current deferred taxes. ASU 2015-17 requires that all deferred tax assets and liabilities be classified as noncurrent on the balance sheet instead of separating deferred taxes into current and noncurrent amounts. The standard is effective for interim and annual reporting periods beginning after December 15, 2016. Early adoption is permitted. We early adopted this standard in the fourth quarter of 2015, with retrospective presentation, as shown in our consolidated balance sheets. Our retrospective presentation resulted in a $26.9 million reclassification from current assets to other assets, net for the period ending October 31, 2015.

In July 2015, the Financial Accounting Standards Board ("FASB") issued ASU No. 2015-11, Simplifying the Measurement of Inventory (Topic 330). The amendments, which apply to inventory that is measured using any method other than the last-in, first-out (LIFO) or retail inventory method, require that entities measure inventory at the lower of cost or net realizable value. ASU 2015-11 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016 and should be applied on a prospective basis. We are currently assessing the potential impact of adopting this ASU, but do not, at this time, anticipate a material impact to our consolidated results of operations, financial position or cash flows.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers. The update outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. ASU 2014-09 requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration the entity expects to be entitled to in exchange for those goods or services. In August 2015, the FASB approved a one year deferral of the effective date, to make it effective for annual and interim reporting periods beginning after December 15, 2017. The standard allows for either a full retrospective or a modified retrospective transition method. The FASB has issued subsequent ASUs related to ASU No. 2014-09, which detail amendments to the ASU, implementation considerations, narrow-scope improvements and practical expedients. We are currently assessing the new standard and all related ASUs and its impact to our consolidated results of operations, financial position and cash flows.

Fair Value Measurements

Our financial instruments consist of cash, money market accounts, marketable securities, assets held in our non-qualified deferred compensation plan, accounts receivable and payable, and debt. Cash, accounts receivable and accounts payable are carried at cost, which approximates their fair value due to the short-term nature of the instruments.

XML

Basis of Presentation (Tables)

9 Months Ended

Oct. 29, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Presentation Adjustment Effects

The effects of the aforementioned accounting policy change, change in classification and error correction to the October 31, 2015 unaudited Condensed Consolidated Statement of Income are as follows (dollars in thousands):

	As Previously Reported		% of Sales	Change in Accounting Policy			Effect of Change in Occupancy Classification			Effect of Error Correction		As Adjusted		% of Sales
Thirteen Weeks Ended October 31, 2015
Net sales	$	641,219	100.0	$	—		$	—		$	4,214	$	645,433	100.0
Cost of goods sold	290,737		45.3	8,760			96,773			—		396,270		61.4
Gross Margin	350,482		54.7	(8,760		)	(96,773		)	4,214		249,163		38.6
Selling, general and administrative expenses	327,575		51.1	(8,760		)	(96,773		)	4,214		226,256		35.1

	As Previously Reported		% of Sales	Change in Accounting Policy			Effect of Change in Occupancy Classification			Effect of Error Correction		As Adjusted		% of Sales
Thirty-Nine Weeks Ended October 31, 2015
Net sales	$	2,014,910	100.0	$	—		$	—		$	14,115	$	2,029,025	100.0
Cost of goods sold	902,690		44.8	27,585			289,268			—		1,219,543		60.1
Gross Margin	1,112,220		55.2	(27,585		)	(289,268		)	14,115		809,482		39.9
Selling, general and administrative expenses	964,229		47.9	(27,585		)	(289,268		)	14,115		661,491		32.6

XML

Restructuring and Strategic Charges (Tables)

9 Months Ended

Oct. 29, 2016

Restructuring and Related Activities [Abstract]

Summary of Restructuring and Strategic Charges

A summary of the pre-tax restructuring and strategic charges is presented in the table below:

	Thirteen Weeks Ended					Thirty-Nine Weeks Ended
	October 29, 2016		October 31, 2015			October 29, 2016		October 31, 2015
	(in thousands)
Impairment charges	$	—	$	329		$	1,453	$	21,259
Continuing employee-related costs	781		—			1,796		5,639
Severance charges	65		(12		)	9,485		1,808
Proxy solicitation costs	108		—			5,697		—
Lease termination charges	79		2,146			427		4,903
Outside services	9,779		—			12,013		—
Other charges	8		674			156		569
Total restructuring and strategic charges, pre-tax	$	10,820	$	3,137		$	31,027	$	34,178

Schedule of Reserve Rollforward

A roll-forward of the reserve is presented as follows:

	Continuing Employee-related Costs			Severance Charges			Proxy Solicitation Costs			Lease Termination Charges			Outside Services			Other charges			Total
	(in thousands)
Beginning Balance, January 30, 2016	$	2,549		$	1,678		$	—		$	1,101		$	9		$	—		$	5,337
Charges	1,796			9,485			5,697			427			12,013			156			29,574
Payments	(3,702		)	(6,066		)	(5,697		)	(612		)	(623		)	(130		)	(16,830		)
Ending Balance, October 29, 2016	$	643		$	5,097		$	—		$	916		$	11,399		$	26		$	18,081

XML

Stock-Based Compensation (Tables)

9 Months Ended

Oct. 29, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Summary of Restricted Stock Activity

Restricted stock award activity for the thirty-nine weeks ended October 29, 2016 was as follows:

	Number of Shares		Weighted Average Grant Date Fair Value
Unvested, beginning of period	2,585,392		$	16.60
Granted	1,719,380		12.35
Vested	(1,062,433	)	17.06
Forfeited	(776,587	)	15.20
Unvested, end of period	2,465,752		13.88

Schedule of Performance-Based Restricted Stock Unit Activity

Performance-based restricted stock unit activity for the thirty-nine weeks ended October 29, 2016 was as follows:

	Number of Shares		Weighted Average Grant Date Fair Value
Unvested, beginning of period	469,898		$	18.23
Granted	733,360		12.55
Vested	(228,105	)	18.23
Forfeited (1)	(329,891	)	15.29
Unvested, end of period	645,262		13.28

⁽¹⁾ The performance goal for the PSUs granted in 2015 was not fully met. Forfeitures for the thirty-nine weeks ended October 29, 2016 include the portion of the fiscal 2015 PSUs that were not earned.

Summary of Stock Option Activity

Stock option activity for the thirty-nine weeks ended October 29, 2016 was as follows:

	Number of Shares		Weighted  Average Exercise Price
Outstanding, beginning of period	1,060,774		$	15.17
Granted	—		—
Exercised	(46,810	)	6.51
Forfeited or expired	(202,783	)	23.98
Outstanding and exercisable at October 29, 2016	811,181		13.47

XML

Earnings Per Share (Tables)

9 Months Ended

Oct. 29, 2016

Earnings Per Share [Abstract]

Computation of Basic and Diluted Earnings Per Share

The following table sets forth the computation of basic and diluted EPS shown on the face of the accompanying condensed consolidated statements of operations (in thousands, except per share amounts):

	Thirteen Weeks Ended						Thirty-Nine Weeks Ended
	October 29, 2016			October 31, 2015			October 29, 2016			October 31, 2015
Numerator
Net income (loss)	$	23,598		$	(11,610	)	$	77,721		$	23,037
Net income and dividends declared allocated to participating securities	(502		)	—			(1,677		)	(492		)
Net income (loss) available to common shareholders	$	23,096		$	(11,610	)	$	76,044		$	22,545
Denominator
Weighted average common shares outstanding – basic	128,753			136,172			129,830			139,386
Dilutive effect of non-participating securities	243			—			169			338
Weighted average common and common equivalent shares outstanding – diluted	128,996			136,172			129,999			139,724
Net income (loss) per common share:
Basic	$	0.18		$	(0.09	)	$	0.59		$	0.16
Diluted	$	0.18		$	(0.09	)	$	0.58		$	0.16

XML

Fair Value Measurements (Tables)

9 Months Ended

Oct. 29, 2016

Fair Value Disclosures [Abstract]

Schedule of Financial Assets Valued on a Recurring Basis

In accordance with the provisions of the guidance, we categorized our financial instruments, which are valued on a recurring basis, based on the priority of the inputs to the valuation technique for the instruments, as follows:

			Fair Value Measurements at Reporting Date Using
	Balance as of October 29, 2016		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(in thousands)
Financial Assets:
Current Assets
Cash equivalents:
Money market accounts	$	365	$	365	$	—	$	—
Marketable securities:
Municipal securities	3,193		—		3,193		—
U.S. government agencies	23,113		—		23,113		—
Corporate bonds	18,253		—		18,253		—
Commercial paper	5,852		—		5,852		—
Non Current Assets
Deferred compensation plan	7,291		7,291		—		—
Total	$	58,067	$	7,656	$	50,411	$	—
Financial Liabilities:
Long-term debt1	$	84,768	$	—	$	85,207	$	—
	Balance as of January 30, 2016
Financial Assets:
Current Assets
Cash equivalents:
Money market accounts	$	275	$	275	$	—	$	—
Marketable securities:
U.S. government agencies	21,800		—		21,800		—
Corporate bonds	26,149		—		26,149		—
Commercial paper	2,245		—		2,245		—
Non Current Assets
Deferred compensation plan	7,023		7,023		—		—
Total	$	57,492	$	7,298	$	50,194	$	—
Financial Liabilities:
Long-term debt	$	92,219	$	—	$	92,647	$	—
	Balance as of October 31, 2015
Financial Assets:
Current Assets
Cash equivalents:
Money market accounts	$	3,100	$	3,100	$	—	$	—
Marketable securities:
U.S. government agencies	17,817		—		17,817		—
Corporate bonds	27,256		—		27,256		—
Commercial paper	2,243		—		2,243		—
Non Current Assets
Deferred compensation plan	8,632		8,632		—		—
Total	$	59,048	$	11,732	$	47,316	$	—
Financial Liabilities:
Long-term debt	94,702		—		$	95,161	—

¹ The carrying value of long-term debt includes the remaining unamortized discount of $0.2 million on the issuance of debt.

XML

Debt (Tables)

9 Months Ended

Oct. 29, 2016

Debt Disclosure [Abstract]

Schedule of Outstanding Debt

The following table provides details on our debt outstanding as of October 29, 2016, January 30, 2016 and October 31, 2015:

	October 29, 2016			January 30, 2016			October 31, 2015
	(in thousands)
Credit Agreement, net	$	84,768		$	92,219		$	94,702
Less: current portion	(10,000		)	(10,000		)	(10,000		)
Total long-term debt	$	74,768		$	82,219		$	84,702

XML

Basis of Presentation (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 29, 2016	Oct. 31, 2015	Oct. 29, 2016	Oct. 31, 2015
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Net sales	$ 596,912	$ 645,433	$ 1,875,621	$ 2,029,025
Net sales, as a Percentage of Sales	100.00%	100.00%	100.00%	100.00%
Cost of goods sold	$ 366,618	$ 396,270	$ 1,142,182	$ 1,219,543
Cost of goods sold, as a Percentage of Sales	61.40%	61.40%	60.90%	60.10%
Gross Margin	$ 230,294	$ 249,163	$ 733,439	$ 809,482
Gross Profit, as a Percentage of Net Sales	38.60%	38.60%	39.10%	39.90%
Selling, general and administrative expenses	$ 188,350	$ 226,256	$ 583,117	$ 661,491
Selling, general and administrative expenses, as a Percentage of Sales	31.60%	35.10%	31.10%	32.60%
Shipping Expense
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cost of goods sold	$ 8,600		$ 25,500
Occupancy Expense
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cost of goods sold	95,400		287,300
Shipping Revenue
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Net sales	$ 3,000		$ 9,700
Previously Reported
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Net sales		$ 641,219		$ 2,014,910
Cost of goods sold		290,737		902,690
Gross Margin		350,482		1,112,220
Selling, general and administrative expenses		$ 327,575		$ 964,229
Previously Reported | Sales | Net sales
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Net sales, as a Percentage of Sales		100.00%		100.00%
Previously Reported | Sales | Cost of goods sold
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cost of goods sold, as a Percentage of Sales		45.30%		44.80%
Previously Reported | Sales | Gross Margin
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Gross Profit, as a Percentage of Net Sales		54.70%		55.20%
Previously Reported | Sales | Selling, general and administrative expenses
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Selling, general and administrative expenses, as a Percentage of Sales		51.10%		47.90%
Restatement Adjustment | Reclassification of Shipping Revenue
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Net sales		$ 4,214		$ 14,115
Cost of goods sold		0		0
Gross Margin		4,214		14,115
Selling, general and administrative expenses		4,214		14,115
Restatement Adjustment | Change in Accounting Policy for Shipping Expense
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Net sales		0		0
Cost of goods sold		8,760		27,585
Gross Margin		(8,760)		(27,585)
Selling, general and administrative expenses		(8,760)		(27,585)
Restatement Adjustment | Reclassification of Occupancy Expense
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Net sales		0		0
Cost of goods sold		96,773		289,268
Gross Margin		(96,773)		(289,268)
Selling, general and administrative expenses		$ (96,773)		$ (289,268)

XML

New Accounting Pronouncements (Details) - New Accounting Pronouncement, Early Adoption - ASU 2015-17 $ in Millions	Oct. 31, 2015 USD ($)
New Accounting Pronouncement, Early Adoption [Line Items]
Current deferred tax asset reclassified to non-current assets	$ 26.9
Non-current deferred tax asset reclassified from current assets	$ 26.9

XML

Restructuring and Strategic Charges - Additional Information (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 29, 2016 USD ($)	Oct. 31, 2015 USD ($)	Oct. 29, 2016 USD ($) store	Oct. 31, 2015 USD ($)	Jan. 30, 2016 USD ($)
Restructuring Cost and Reserve [Line Items]
Total restructuring and strategic charges, pre-tax	$ 10,820	$ 3,137	$ 31,027	$ 34,178
Number of stores to close | store			175
Number of store closures | store			90
Reserve related to restructuring and strategic activities	18,081		$ 18,081		$ 5,337
Lease termination charges
Restructuring Cost and Reserve [Line Items]
Additional lease termination expenses expected	1,700		1,700
Reserve related to restructuring and strategic activities	$ 916		$ 916		$ 1,101
Boston Proper | Disposed of by Sale
Restructuring Cost and Reserve [Line Items]
Number of store closures | store			20

XML

Restructuring and Strategic Charges - Summary of Restructuring and Strategic Charges (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 29, 2016	Oct. 31, 2015	Oct. 29, 2016	Oct. 31, 2015
Restructuring Cost and Reserve [Line Items]
Impairment charges	$ 0	$ 329	$ 1,453	$ 21,259
Restructuring and strategic charges, pre-tax			29,574
Total restructuring and strategic charges, pre-tax	10,820	3,137	31,027	34,178
Continuing employee-related costs
Restructuring Cost and Reserve [Line Items]
Restructuring and strategic charges, pre-tax	781	0	1,796	5,639
Severance charges
Restructuring Cost and Reserve [Line Items]
Restructuring and strategic charges, pre-tax	65	(12)	9,485	1,808
Proxy solicitation costs
Restructuring Cost and Reserve [Line Items]
Restructuring and strategic charges, pre-tax	108	0	5,697	0
Lease termination charges
Restructuring Cost and Reserve [Line Items]
Restructuring and strategic charges, pre-tax	79	2,146	427	4,903
Outside services
Restructuring Cost and Reserve [Line Items]
Restructuring and strategic charges, pre-tax	9,779	0	12,013	0
Other charges
Restructuring Cost and Reserve [Line Items]
Restructuring and strategic charges, pre-tax	$ 8	$ 674	$ 156	$ 569

XML

Restructuring and Strategic Charges - Reserve Rollforward (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 29, 2016	Oct. 31, 2015	Oct. 29, 2016	Oct. 31, 2015
Restructuring Reserve [Roll Forward]
Beginning Balance, January 30, 2016			$ 5,337
Charges			29,574
Payments			(16,830)
Ending Balance, October 29, 2016	$ 18,081		18,081
Continuing employee-related costs
Restructuring Reserve [Roll Forward]
Beginning Balance, January 30, 2016			2,549
Charges	781	$ 0	1,796	$ 5,639
Payments			(3,702)
Ending Balance, October 29, 2016	643		643
Severance charges
Restructuring Reserve [Roll Forward]
Beginning Balance, January 30, 2016			1,678
Charges	65	(12)	9,485	1,808
Payments			(6,066)
Ending Balance, October 29, 2016	5,097		5,097
Proxy solicitation costs
Restructuring Reserve [Roll Forward]
Beginning Balance, January 30, 2016			0
Charges	108	0	5,697	0
Payments			(5,697)
Ending Balance, October 29, 2016	0		0
Lease termination charges
Restructuring Reserve [Roll Forward]
Beginning Balance, January 30, 2016			1,101
Charges	79	2,146	427	4,903
Payments			(612)
Ending Balance, October 29, 2016	916		916
Outside services
Restructuring Reserve [Roll Forward]
Beginning Balance, January 30, 2016			9
Charges	9,779	0	12,013	0
Payments			(623)
Ending Balance, October 29, 2016	11,399		11,399
Other charges
Restructuring Reserve [Roll Forward]
Beginning Balance, January 30, 2016			0
Charges	8	$ 674	156	$ 569
Payments			(130)
Ending Balance, October 29, 2016	$ 26		$ 26

XML

Stock-Based Compensation - Additional Information (Details) - USD ($) $ in Thousands	9 Months Ended
	Oct. 29, 2016	Oct. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense related to stock-based awards	$ 15,483	$ 20,712
Number of shares available for future grants (shares)	5,800,000
Options Granted, Number of Shares (in shares)	0	0
Performance-Based Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	3 years

XML

Stock-Based Compensation - Summary of Restricted Stock and PSU Activity (Details)	9 Months Ended
	Oct. 29, 2016 $ / shares shares
Restricted Stock
Number of Shares
Unvested, beginning of period, Number of Shares (in shares) | shares	2,585,392
Granted, Number of Shares (in shares) | shares	1,719,380
Vested, Number of Shares (in shares) | shares	(1,062,433)
Forfeited, Number of Shares (in shares) | shares	(776,587)
Unvested, end of period, Number of Shares (in shares) | shares	2,465,752
Weighted Average Grant Date Fair Value
Unvested, beginning of period, Weighted Average Grant Date Fair Value (in dollars per share) | $ / shares	$ 16.60
Granted, Weighted Average Grant Date Fair Value (in dollars per share) | $ / shares	12.35
Vested, Weighted Average Grant Date Fair Value (in dollars per share) | $ / shares	17.06
Forfeited, Weighted Average Grant Date Fair Value (in dollars per share) | $ / shares	15.20
Unvested, end of period, Weighted Average Grant Date Fair Value (in dollars per share) | $ / shares	$ 13.88
Performance-Based Stock Units
Number of Shares
Unvested, beginning of period, Number of Shares (in shares) | shares	469,898
Granted, Number of Shares (in shares) | shares	733,360
Vested, Number of Shares (in shares) | shares	(228,105)
Forfeited, Number of Shares (in shares) | shares	(329,891)
Unvested, end of period, Number of Shares (in shares) | shares	645,262
Weighted Average Grant Date Fair Value
Unvested, beginning of period, Weighted Average Grant Date Fair Value (in dollars per share) | $ / shares	$ 18.23
Granted, Weighted Average Grant Date Fair Value (in dollars per share) | $ / shares	12.55
Vested, Weighted Average Grant Date Fair Value (in dollars per share) | $ / shares	18.23
Forfeited, Weighted Average Grant Date Fair Value (in dollars per share) | $ / shares	15.29
Unvested, end of period, Weighted Average Grant Date Fair Value (in dollars per share) | $ / shares	$ 13.28

XML

Stock-Based Compensation - Summary of Stock Option Activity (Details) - $ / shares	9 Months Ended
	Oct. 29, 2016	Oct. 31, 2015
Number of Shares
Outstanding at beginning of period, Number of Shares (in shares)	1,060,774
Granted, Number of Shares (in shares)	0	0
Exercised, Number of Shares (in shares)	(46,810)
Forfeited or expired, Number of Shares (in shares)	(202,783)
Outstanding at end of period, Number of Shares (in shares)	811,181
Exercisable at end of period, Number of Shares (in shares)	811,181
Weighted Average Exercise Price
Outstanding at beginning of period, Weighted Average Exercise Price (in dollars per share)	$ 15.17
Granted, Weighted Average Exercise Price (in dollars per share)	0.00
Exercised, Weighted Average Exercise Price (in dollars per share)	6.51
Forfeited or expired, Weighted Average Exercise Price (in dollars per share)	23.98
Outstanding at end of period, Weighted Average Exercise Price (in dollars per share)	13.47
Exercisable at end of period, Weighted Average Exercise Price (in dollars per share)	$ 13.47

XML

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 29, 2016	Oct. 31, 2015	Oct. 29, 2016	Oct. 31, 2015
Income Tax Disclosure [Abstract]
Effective tax rate	22.90%	(55.70%)	34.00%
Income tax provision (benefit)	$ 7,000	$ (14,600)	$ 40,100	$ (23,100)

XML

Earnings Per Share - Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 29, 2016	Oct. 31, 2015	Oct. 29, 2016	Oct. 31, 2015
Earnings Per Share [Abstract]
Net income (loss)	$ 23,598	$ (11,610)	$ 77,721	$ 23,037
Net income and dividends declared allocated to participating securities	(502)	0	(1,677)	(492)
Net income (loss) available to common shareholders	$ 23,096	$ (11,610)	$ 76,044	$ 22,545
Weighted average common shares outstanding – basic (in shares)	128,753	136,172	129,830	139,386
Dilutive effect of non-participating securities (in shares)	243	0	169	338
Weighted average common and common equivalent shares outstanding – diluted (in shares)	128,996	136,172	129,999	139,724
Net income (loss) per common share: Basic (in dollars per share)	$ 0.18	$ (0.09)	$ 0.59	$ 0.16
Net income (loss) per common share: Diluted (in dollars per share)	$ 0.18	$ (0.09)	$ 0.58	$ 0.16

XML

Earnings Per Share - Additional Information (Details) - shares shares in Millions	3 Months Ended		9 Months Ended
	Oct. 29, 2016	Oct. 31, 2015	Oct. 29, 2016	Oct. 31, 2015
Earnings Per Share [Abstract]
Number of antidilutive securities (in shares)	0.7	0.3	0.9	1.3

XML

Fair Value Measurements - Additional Information (Details) $ in Millions	Oct. 29, 2016 USD ($)
Fair Value Disclosures [Abstract]
Securities with maturity dates less than one year	$ 25.4
Securities with maturity dates over one year and less than two years	$ 25.0

XML

Fair Value Measurements - Financial Assets Valued on a Recurring Basis (Details) - USD ($) $ in Thousands	Oct. 29, 2016	Jan. 30, 2016	Oct. 31, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deferred compensation plan	$ 7,291	$ 7,023	$ 8,632
Total assets	58,067	57,492	59,048
Long-term debt	84,768	92,219	94,702
Unamortized debt discount	200
Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deferred compensation plan	7,291	7,023	8,632
Total assets	7,656	7,298	11,732
Long-term debt	0	0	0
Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deferred compensation plan	0	0	0
Total assets	50,411	50,194	47,316
Long-term debt	85,207	92,647	95,161
Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deferred compensation plan	0	0	0
Total assets	0	0	0
Long-term debt	0	0	0
Municipal securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	3,193
Municipal securities | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	0
Municipal securities | Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	3,193
Municipal securities | Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	0
U.S. government agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	23,113	21,800	17,817
U.S. government agencies | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	0	0	0
U.S. government agencies | Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	23,113	21,800	17,817
U.S. government agencies | Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	0	0	0
Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	18,253	26,149	27,256
Corporate bonds | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	0	0	0
Corporate bonds | Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	18,253	26,149	27,256
Corporate bonds | Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	0	0	0
Commercial paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	5,852	2,245	2,243
Commercial paper | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	0	0	0
Commercial paper | Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	5,852	2,245	2,243
Commercial paper | Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	0	0	0
Money market accounts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	365	275	3,100
Money market accounts | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	365	275	3,100
Money market accounts | Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	0	0	0
Money market accounts | Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	$ 0	$ 0	$ 0

XML

Debt - Additional Information (Details) - USD ($)	Oct. 29, 2016	Jan. 30, 2016
Term Loan
Debt Instrument [Line Items]
Face amount		$ 100,000,000
Line of Credit | Revolving Credit Facility
Debt Instrument [Line Items]
Borrowing capacity	$ 100,000,000	$ 100,000,000

XML

Debt - Schedule of Outstanding Debt (Details) - USD ($) $ in Thousands	Oct. 29, 2016	Jan. 30, 2016	Oct. 31, 2015
Debt Disclosure [Abstract]
Credit Agreement, net	$ 84,768	$ 92,219	$ 94,702
Less: current portion	(10,000)	(10,000)	(10,000)
Total long-term debt	$ 74,768	$ 82,219	$ 84,702

XML

Share Repurchases (Details) shares in Millions, $ in Millions	9 Months Ended
	Oct. 29, 2016 USD ($) shares
Equity [Abstract]
Stock repurchased during period (in shares) | shares	6.5
Stock repurchased during period	$ 76.3
Amount remaining under stock repurchase program	$ 183.7

XML

Subsequent Events (Details)	Nov. 22, 2016 $ / shares
Subsequent Event
Subsequent Event [Line Items]
Quarterly dividend declared (in dollars per share)	$ 0.08