Re: Employment Agreement Amendment
March
11,
2008
Mr.
Xxxx
Xxxxxxx
00
Xxxxxxx Xxxxx
Xxx
Xxxx,
XX 00000
| Re: |
Employment
Agreement Amendment
|
Dear
Xxxx:
This
Letter Agreement confirms the understanding reached between you and Coach,
Inc.,
a Maryland corporation (the “Company”),
regarding the terms of your continued employment with the Company. This Letter
Agreement constitutes an amendment to that certain Employment Agreement by
and
between you and the Company dated as of June 1, 2003 (the “2003
Employment Agreement”),
as
subsequently amended by that certain Letter Agreement between you and the
Company dated August 22, 2005 (the “2005
Letter Agreement”
and, collectively with the 2003 Employment Agreement, the “Employment
Agreement”).
Capitalized terms used in this Letter Agreement and not defined herein shall
have the meaning given such terms in the Employment Agreement.
|
1.
|
Employment
Agreement Term.
You and the Company acknowledge and agree that, notwithstanding anything
to the contrary in the Employment Agreement, the Initial Term shall
end on
June 28, 2014 unless earlier terminated as provided in Section 6
of the
2003 Employment Agreement.
|
|
2.
|
Annual
Base Salary.
Effective as of June 29, 2008, your Annual Base Salary shall be payable
at
a rate of $2,500,000 per year, which rate of Annual Base Salary shall
increase by not less than 5% as of the first day of each fiscal year
of
the Company commencing on or after June 27, 2009 during the Term.
|
|
3.
|
Annual
Bonus.
With respect to each fiscal year of the Company commencing on and
after
June 29, 2008 during the Term, your Maximum Bonus shall be equal
to at
least 200% of your Annual Base Salary. Such Annual Bonus shall be
paid at
the time bonuses are paid generally under the Bonus Plan but, in
any
event, no later than 90 days after the end of the applicable Contract
Year.
|
|
4.
|
Contract
Extension Bonuses.
During the Term, in addition to any other Annual Bonuses, Retention
Bonuses or other bonuses that may be payable to you pursuant to the
2003
Employment Agreement or the 2005 Letter Agreement, subject to the
terms
and conditions set forth below you shall be eligible to receive the
following supplemental bonuses:
|
|
(a)
|
Extension
Signing Bonus:
Subject to your continued employment with the Company, as provided
below
(i) through June 28, 2008, you shall be paid a supplemental bonus
in the
amount of $3,500,000; (ii) through June 26, 2009, you shall be paid
a
supplemental bonus in the amount of $3,500,000; (iii) through July
3,
2010, you shall be paid a supplemental bonus in the amount of $3,000,000.
Such amounts shall be paid within 45 days following each of the specified
dates. If, prior to July 2, 2011, you are terminated by the Company
for
Cause or resign your employment with the Company other than for Good
Reason you shall repay to the Company the full amount of all of the
Extension Signing Bonuses previously paid to you pursuant to this
Section
4(a). If, during the period beginning on July 3, 2011 and ending
on June
28, 2014, you are terminated by the Company for Cause or resign your
employment with the Company other than for Good Reason you shall
repay to
the Company an amount equal to the product of (x) $10 million and
(y) the
ratio of (i) the number of days that have expired between July 3,
2011 and
the date of your termination of employment and (ii) 1092. Notwithstanding
the above, if your employment with the Company is terminated by the
Company without Cause or you resign your employment for Good Reason
(including, without limitation, separation from employment due to
a Change
in Control) prior to June 28, 2014, the Company shall pay you the
full
amount of each Extension Signing Bonus set forth in this paragraph
(to the
extent not already paid) at the time such bonus would have been
paid.
|
|
(b)
|
Service
Bonuses:
Subject to your continued employment with the Company, as provided
below
(i) through June 30, 2012, you shall be paid a supplemental bonus
in the
amount of $1,101,475; (ii) through June 29, 2013, you shall be paid
a
supplemental bonus in the amount of $1,101,475; (iii) through June
28,
2014, you shall be paid a supplemental bonus in the amount of $3,202,950.
Such amounts shall be paid within 45 days following each of the specified
dates. Notwithstanding the above, if your employment with the Company
is
terminated by the Company without Cause or you resign your employment
for
Good Reason (including, without limitation, separation from employment
due
to a Change in Control) prior to June 28, 2014, the Company shall
pay you
the full amount of each Service Bonus set forth in this paragraph
(to the
extent not already paid) at the time such bonus would have been
paid.
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|
(c)
|
Additional
Performance Bonuses:
|
|
(i)
|
With
respect to the Contract Year ending on June 30, 2012, you shall be
eligible to receive an additional bonus under the Bonus Plan or otherwise
in the maximum amount of $2,188,000 on the basis of the Company’s
attainment of objective financial or other operating criteria established
by the Committee in its sole discretion and in accordance with Code
Section 162(m) and the regulations promulgated thereunder, such additional
bonus to be paid at the time bonuses under the Bonus Plan are paid
generally but, in any event, no later than 90 days after the end
of the
applicable Contract Year.
|
|
(ii)
|
With
respect to the Contract Year ending on June 29, 2013, you shall be
eligible to receive an additional bonus under the Bonus Plan or otherwise
in the maximum amount of $2,188,000 on the basis of the Company’s
attainment of objective financial or other operating criteria established
by the Committee in its sole discretion and in accordance with Code
Section 162(m) and the regulations promulgated thereunder, such additional
bonus to be paid at the time bonuses under the Bonus Plan are paid
generally but, in any event, no later than 90 days after the end
of the
applicable Contract Year.
|
|
(iii)
|
With
respect to the Contract Year ending on June 28, 2014, you shall be
eligible to receive an additional bonus under the Bonus Plan or otherwise
in the maximum amount of $4,376,000 on the basis of the Company’s
attainment of objective financial or other operating criteria established
by the Committee in its sole discretion and in accordance with Code
Section 162(m) and the regulations promulgated thereunder, such additional
bonus to be paid at the time bonuses under the Bonus Plan are paid
generally but, in any event, no later than 90 days after the end
of the
applicable Contract Year.
|
|
5.
|
Employment
Agreement.
You and the Company acknowledge and agree that, except as provided
by this
Letter Agreement, the 2003 Employment Agreement and the 2005 Letter
Agreement shall remain in full force and
effect.
|
|
6.
|
Section
409A.
You and the Company acknowledge and agree that, to the extent applicable,
this Letter Agreement shall be interpreted in accordance with, and
you and
the Company agree to use best efforts to achieve timely compliance
with,
Section 409A of the Internal Revenue Code and the Department of Treasury
Regulations and other interpretive guidance issued thereunder
(collectively, “Section
409A”),
including without limitation any such regulations or other guidance
that
may be issued after the date hereof. Notwithstanding any provision
of this
Letter Agreement to the contrary, in the event that the Company determines
that any compensation or benefits payable or provided under this
Letter
Agreement may be subject to Section 409A, the Company may adopt (without
any obligation to do so or to indemnify you for failure to do so)
such
limited amendments to this Letter Agreement and appropriate policies
and
procedures, including amendments and policies with retroactive effect,
that the Company reasonably determines are necessary or appropriate
to (a)
exempt the compensation and benefits payable under this Letter Agreement
from Section 409A and/or preserve the intended tax treatment of the
compensation and benefits provided with respect to this Letter Agreement
or (b) comply with the requirements of Section 409A; provided,
however, that the foregoing shall not reduce the total compensation
to
which you are entitled hereunder. Notwithstanding anything herein
to the
contrary, if at the time of your termination of employment you are
a
“specified employee” as defined in Section 409A (and any related
regulations or other pronouncements thereunder) and the deferral
of any
payments otherwise payable hereunder as a result of such termination
of
employment is necessary in order to prevent any accelerated or additional
tax under Section 409A, then the Company shall defer such payments
(without any reduction in such payments ultimately paid or provided
to
you) until the date that is six months following your termination
of
employment (or the earliest date as is permitted under Section
409A).
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7.
|
Severance
Payments and Benefits.
Section 7(b)(i) and 7(c)(i) of the 2003 Employment Agreement shall
be
amended to include as required severance payments (a) all Extension
Signing Bonuses; (b) all Service Bonuses; and (c) all Additional
Performance Bonuses, each as provided herein.
|
[signature
page follows]
Please
indicate your acceptance of the terms and provisions of this Letter Agreement
by
signing both copies of this Letter Agreement and returning one copy to me.
The
other copy is for your files. By signing below, you acknowledge and agree that
you have carefully read this Letter Agreement in its entirety; fully understand
and agree to its terms and provisions; and intend and agree that it be final
and
legally binding on you and the Company. This Letter Agreement shall be governed
and construed under the internal laws of the State of New York and may be
executed in several counterparts.
Very
truly yours,
____________________________
Xxx
Xxxxxxxxx
Chairman
and CEO
Agreed
and Accepted:
____________________________
Xxxx
Xxxxxxx
