2004 Stock Incentive Plan Performance Restricted Stock Unit Award Grant Notice and Agreement
Exhibit
10.13
2004
Stock Incentive Plan
Xxx Xxxxxxxxx
Coach,
Inc. (the “Company”) is
pleased to confirm that you have been granted a performance restricted stock
unit award (the “Award”), effective as of August 6, 2009 (the
“Award Date”), as
provided in this Performance Restricted Stock Unit Award Grant Notice and
Agreement (including all annexes attached hereto, the “Agreement”) pursuant to the
Coach, Inc. 2004 Stock Incentive Plan (as amended, the “Plan”). The Award
is subject to all of the terms and conditions set forth in the
Agreement.
1. Defined
Terms. Capitalized terms used but not otherwise defined in the
Agreement shall have the meanings set forth in the Definition Annex attached
hereto as Annex
A.
2. Award. Subject to
the restrictions, limitations and conditions described in the Agreement, the
Company hereby awards to you as of the Award Date performance restricted stock
units (the “PRSUs”) in
accordance with the terms and conditions of the Agreement. PRSUs are
considered Performance Stock Units under the Plan. Each PRSU
represents the right to receive one share of Common Stock upon the satisfaction
of the terms and conditions of the Agreement and the Plan (and in particular the
terms and conditions set forth on Annex B) (the “Restrictions”). While
the Restrictions are in effect, the PRSUs are not transferable by you by means
of sale, assignment, exchange, pledge, or otherwise. The number of
PRSUs subject to the Award shall be determined in accordance with the terms of
Xxxxx
X.
3. Vesting. The PRSUs
will remain restricted and may not be sold or transferred by you until they have
become vested pursuant to the terms of the Agreement and the vesting provisions
set forth on Annex
B.
4. Distribution of the
Award. Except as otherwise provided by Section 5(d), on, or as
soon as reasonably practicable following, the Vesting Date (and in no event
later than the last date permitted by Treasury Regulation Section 1.409A-3(d)),
the Committee will release the portion of the Award that has become vested as of
the Vesting Date. Applicable withholding taxes will be settled by
withholding a number of shares of
Common Stock with a market value not less than the amount of such taxes
(determined at the minimum applicable rates), and the net number of shares of
Common Stock subject to the Award shall be distributed to you; provided, however, that certain
transfer restrictions will continue to apply to certain shares of Common Stock
distributed to you hereunder until the expiration of the Retention Period; and,
provided, further, that in the event
that the Company is liquidated in bankruptcy (a) the Committee will not release
shares of Common Stock pursuant to the Award and (b) all payments made
pursuant to the Award will be made in a per-share cash payment equal to the fair
market value per share of Common Stock on the distribution date.
5. Termination of
Employment.
(a) Death or
Disability. If prior to the Vesting Date you cease active
employment with the Company because of your death or Disability (i) any portion
of the Fiscal Year PRSUs that relates to a fiscal year of the Company that ended
on or prior to the Date of Termination that would have become vested had you
remained employed by the Company through the Vesting Date shall become vested
effective as of the Vesting Date and (ii) the Performance Period PRSUs and any
portion of the Fiscal Year PRSUs that relates to a fiscal year that has not
ended on or prior to the Date of Termination shall thereupon be forfeited; provided, however, that the Committee
may, in its sole discretion, cause any or all of the Section 5(a) Portion to
become vested effective as of the Date of Termination.
(b) Termination without Cause or for Good
Reason. Except as otherwise provided in Section 5(d) with
respect to certain terminations of employment in connection with a Change in
Control, if prior to the Vesting Date your employment is terminated by the
Company without Cause or by you for Good Reason, all Fiscal Year PRSUs and
Performance Period PRSUs that would have been eligible to become vested with
respect to the Award had you remained employed through the Vesting Date shall
become vested as of the Vesting Date, pursuant to the terms and conditions set
forth on Annex
B, based on the Company’s performance through the Vesting
Date.
(c) Termination for Cause or without Good
Reason. If prior to the Vesting Date your employment is
terminated by the Company for Cause or by you without Good Reason (including,
without limitation, by reason of your retirement) the Award shall thereupon be
forfeited in its entirety.
(d) Certain Terminations of Employment in
connection with a Change in Control. Notwithstanding Section
5(b), if your employment is terminated by the Company without Cause or by you
for Good Reason prior to the Vesting Date and within six months prior to a
Change in Control or during the 12 month period immediately following such
Change in Control, then, effective as of the later of the Date of Termination or
the date of the Change in Control, the Award shall become vested with respect to
(i) any portion of the Fiscal Year PRSUs that relates to a fiscal year of the
Company that ended on or prior to the Date of Termination (or date of the Change
in Control, if later) that would have become vested had you remained employed by
the Company through the Vesting Date (assuming for these purposes that the
Company’s performance (A) would not be Marginal or below for any fiscal year
that ends following the Date of Termination (or date of the Change in Control,
if later) and (B) would be above Superior in at least one fiscal year that ends
following the Date of Termination (or date of Change in Control, if later)) and
(ii) the Section 5(d) Portion, and, notwithstanding Section 4, such vested
portion of the Award shall be distributed in accordance with the provisions of
Section 3 and Annex
B as soon as reasonably practicable following the date of such
vesting.
6. Forfeiture. Notwithstanding
anything contained in the Agreement to the contrary, you shall be subject to the
restrictive covenants set forth on Annex D hereto (the
“Restrictive
Covenants”), and you acknowledge and agree that the Company is granting
you the Award in consideration for your agreement to be bound by such
Restrictive Covenants. Accordingly, if you (a) violate any of the
covenants set forth in Sections 1 or 2 of the Restrictive Covenants or (b)
materially violate any of the covenants set forth in Sections 3, 4 or 5 of the
Restrictive Covenants, then (i) any portion of the Award that has not been
distributed to you prior to the date of such violation shall thereupon be
forfeited and (ii) you shall be required to pay to the Company the amount of all
PRSU Gain. The forfeiture provisions of this Section 6 shall also
apply, and you shall also be required to pay to the Company the amount of all
PRSU Gain, if you willfully commit any act of fraud, embezzlement,
misappropriation, material misconduct or breach of fiduciary duty against the
Company (or any predecessor thereto or successor thereof) having a material
adverse impact on the Company.
2
7. Award Not
Transferable. The Award will not be assignable or transferable
by you, other than by a qualified domestic relations order or by will or by the
laws of descent and distribution, and will be exercisable during your lifetime
only by you (or your legal guardian or personal representative).
8. Transferability of Award
Shares. You acknowledge and agree that certain shares of Common Stock
distributed to you pursuant to the Award shall be subject to the transfer
restrictions set forth in Annex
B. Except as otherwise set forth in Annex B, the shares
you will receive under the Award on or following the Vesting Date (or such other
vesting date pursuant to Section 5) generally are freely tradable in the United
States. However, you may not offer, sell or otherwise dispose of any
shares in a way which would: (a) require the Company to file any registration
statement with the Securities and Exchange Commission (or any similar filing
under state law or the laws of any other country) or to amend or supplement any
such filing or (b) violate or cause the Company to violate the Securities Act of
1933, as amended, the rules and regulations promulgated thereunder, any other
state or federal law, or the laws of any other country. The Company
reserves the right to place restrictions required by law on any shares of Common
Stock received by you pursuant to the Award.
9. Conformity with the
Plan. The Award is intended to conform in all respects with,
and is subject to applicable provisions of, the Plan. Inconsistencies
between the Agreement and the Plan shall be resolved in accordance with the
terms of the Plan. By your acceptance of the Agreement, you agree to
be bound by all of the terms of the Agreement (including the terms of any annex
attached hereto) and the Plan.
10. No Rights to Continued
Employment. Nothing in the Agreement confers any right on you
to continue in the employ of the Company and any of its affiliates or direct or
indirect subsidiaries or affects in any way the right of the Company and any of
its affiliates or direct or indirect subsidiaries to terminate your employment
at any time with or without cause.
11. Miscellaneous.
(a) Amendment or
Modifications. The grant of the Award (and the allocation of
PRSUs for each fiscal year and the Performance Period, as applicable) is
documented by the minutes of the Committee, which records are the final
determinant of the number of PRSUs granted in any fiscal year or the Performance
Period, as applicable, and the conditions of any such grant. The
Committee may amend or modify the Award in any manner to the extent that the
Committee would have had the authority under the Plan initially to grant such
Award, provided that no
such amendment or modification shall directly or indirectly impair or otherwise
adversely affect your rights under the Agreement (including, without limitation,
under Annex B)
without your prior written consent. Except as in accordance with the
two immediately preceding sentences, the Agreement may be amended, modified or
supplemented only by an instrument in writing signed by both parties
hereto.
3
(b) Governing Law. All
matters regarding or affecting the relationship of the Company and its
stockholders shall be governed by the General Corporation Law of the State of
Maryland. All other matters arising under the Agreement shall be
governed by the internal laws of the State of New York, including matters of
validity, construction and interpretation. You and the Company agree
that all claims in respect of any action or proceeding arising out of or
relating to the Agreement shall be heard or determined in any state or federal
court sitting in New York, New York and you and the Company agree to submit to
the jurisdiction of such courts, to bring all such actions or proceedings in
such courts and to waive any defense of inconvenient forum to such actions or
proceedings. A final judgment in any action or proceeding so brought
shall be conclusive and may be enforced in any manner provided by
law.
(c) Successors and
Assigns. Except as otherwise provided herein, the Agreement
will bind and inure to the benefit of the respective successors and permitted
assigns and heirs and legal representatives of the parties hereto whether so
expressed or not.
(d) Severability. Whenever
feasible, each provision of the Agreement will be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of the
Agreement is held to be prohibited by or invalid under applicable law, such
provision will be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of the Agreement.
12. Section 409A.
(a) In General. The
parties acknowledge and agree that, to the extent applicable, the Agreement
shall be interpreted in accordance with Section 409A. Notwithstanding
any provision of the Agreement to the contrary, in the event that the Company
determines that any amounts payable hereunder 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 the Agreement and appropriate
policies and procedures, including amendments and policies with retroactive
effect, that the Company reasonably determines are necessary or appropriate to
(i) exempt the amounts payable hereunder from Section 409A and/or preserve the
intended tax treatment of the amounts payable hereunder or (ii) comply with the
requirements of Section 409A.
(b) Specified Employee Separation from
Service. Notwithstanding anything to the contrary in the
Agreement, if you are determined to be a “specified employee” within the meaning
of Section 409A as of the date of your “separation from service” as defined in
Treasury Regulation Section 1.409A-1(h) (or any successor regulation), and if
any payments or entitlements provided for in the Agreement constitute a
“deferral of compensation” within the meaning of Section 409A and therefore
cannot be paid or provided in the manner provided herein without subjecting you
to additional tax, interest or penalties under Section 409A, then any such
payment and/or entitlement which would have been payable during the first six
months following your “separation from service” shall instead be paid or
provided to you in a lump sum payment on the first business day immediately
following the six-month anniversary of your “separation from service” (or, if
earlier, the date of your death).
[signature
page follows]
4
In
witness whereof, the parties hereto have executed and delivered the
Agreement.
COACH,
INC.
__________________________________
Xxxxx
Xxxx
Senior
Vice President of Human Resources
Date:
I
acknowledge that I have read and understand the terms and conditions of the
Agreement and of the Plan and I agree to be bound thereto.
AWARD
RECIPIENT:
__________________________________
Xxx Xxxxxxxxx
Employee
ID: ______________________________
Date:
5
Exhibit
F-Annex A
DEFINITION
ANNEX
For
purposes of the Performance Restricted Stock Unit Award Grant Notice and
Agreement (including all annexes thereto, the “Agreement”) to which this Definition
Annex is attached as an Annex, the following terms have the meanings set forth
below:
(a) “Award Date” shall have the
meaning set forth in the preamble to the Agreement.
(b) “Board” shall mean the Board of
Directors of the Company.
(c) The
Company shall have “Cause” to terminate the
Executive’s employment upon (i) the Executive’s failure to attempt in good faith
to substantially perform the duties as Chairman and Chief Executive Officer
(other than any such failure resulting from the Executive’s physical or mental
incapacity) which is not remedied within 30 days after receipt of written notice
from the Company specifying such failure; (ii) the Executive’s failure to
attempt in good faith to carry out, or comply with, in any material respect any
lawful and reasonable directive of the Board, which is not remedied within 30
days after receipt of written notice from the Company specifying such failure;
(iii) the Executive’s commission at any time of any act or omission that results
in, or may reasonably be expected to result in, a conviction, plea of no
contest, or imposition of unadjudicated probation for any felony (or any other
crime involving fraud, embezzlement, material misconduct or misappropriation
having a material adverse impact on the Company); (iv) the Executive’s unlawful
use (including being under the influence) or possession of illegal drugs on the
Company’s premises or while performing the Executive’s duties and
responsibilities; or (v) the Executive’s willful commission at any time of any
act of fraud, embezzlement, misappropriation, misconduct, or breach of fiduciary
duty against the Company (or any predecessor thereto or successor thereof)
having a material adverse impact on the Company.
(i) A
Person (which term, when used in this Section 1(f), shall not include the
Company, any underwriter temporarily holding securities pursuant to an offering
of such securities, any trustee or other fiduciary holding securities under an
employee benefit plan of the Company, or any Company owned, directly or
indirectly, by the stockholders of the Company in substantially the same
proportions as their ownership of Voting Stock of the Company) is or becomes,
without the prior consent of a majority of the Continuing Directors, the
beneficial owner (as defined in Rule 13d-3 promulgated under the Securities
Exchange Act of 1934, as amended), directly or indirectly, of Voting Stock
representing, without the prior written consent of a majority of the Continuing
Directors twenty percent (20%) (or, even with such prior consent, thirty-five
percent (35%)) or more of the combined voting power of the Company’s then
outstanding securities; or
(ii) The
Company consummates a reorganization, merger or consolidation of the Company
(which prior to the date of such consummation has been approved by the Company’s
stockholders) or the Company sells, or otherwise disposes of, all or
substantially all of the Company’s property and assets (other than a
reorganization, merger, consolidation or sale which would result in all or
substantially all of the beneficial owners of the Voting Stock of the Company
outstanding immediately prior thereto continuing to beneficially own, directly
or indirectly (either by remaining outstanding or by being converted into voting
securities of the resulting entity), more than fifty percent (50%) of the
combined voting power of the voting securities of the Company or such entity
resulting from the transaction (including, without limitation, an entity which
as a result of such transaction owns the Company or all or substantially all of
the Company’s property or assets, directly or indirectly) outstanding
immediately after such transaction in substantially the same proportions
relative to each other as their ownership immediately prior to such
transaction), or the Company’s stockholders approve a liquidation or dissolution
of the Company; or
A-1
(iii) The
individuals who are Continuing Directors of the Company (as defined below) cease
for any reason to constitute at least a majority of the Board.
In
addition, if a Change in Control constitutes a payment event with respect to any
Award which provides for the deferral of compensation and is subject to Section
409A, the transaction or event described in subsection (i), (ii) or (iii) with
respect to such Award must also constitute a “change in control event,” as
defined in Treasury Regulation §1.409A-3(i)(5) to the extent required by Section
409A.
(e) “Code” shall mean the Internal
Revenue Code of 1986, as amended.
(f) “Committee” shall mean the
Human Resources Committee of the Board.
(g) “Common Stock” shall mean the
$0.01 par value common stock of the Company.
(h) “Company” shall mean Coach,
Inc., a Maryland corporation.
(i) “Continuing Director” shall
mean (i) any member of the Board (other than an employee of the Company) as of
the Award Date or (ii) any person who subsequently becomes a member of the Board
(other than an employee of the Company) whose election or nomination for
election to the Board is recommended by a majority of the Continuing
Directors.
(j) “Date of Termination” shall
mean (i) if the Executive’s employment is terminated by his death, the date of
his death and (ii) if the Executive’s employment is terminated for any other
reason, the date specified in the written notice of termination delivered by the
Executive to the Company (or if no such date is specified, the last day of the
Executive’s active employment with the Company).
(k) “Disability” shall mean any
mental or physical illness, condition, disability or incapacity that can be
expected to result in death or can be expected to last for a continuous period
of not less than 12 months, and which:
(i) Prevents
the Executive from discharging all of his essential job responsibilities and
employment duties;
(ii) Shall
be attested to in writing by a physician or group of physicians selected by the
Executive and acceptable to the Company; and
A-2
(iii) Has
prevented the Executive from so discharging his duties for any 180 days in any
365 day period.
A
Disability shall be deemed to have occurred on the 180th day in
such 365 day period.
(l) “Executive” shall mean Xxx
Xxxxxxxxx.
(m) “Fair Market Value” shall mean,
as of any given date, the fair market value of a share of Common Stock on such
date determined by such methods or procedures as may be established from time to
time by the Committee. Unless otherwise determined by the Committee,
the Fair Market Value of a share of Common Stock as of any date shall be the
average of the high and low trading prices for a share of Common Stock as
reported on the New York Stock Exchange (or any national securities exchange on
which the Common Stock is then listed) for such date or, if no such prices are
reported for that date, the average of the high and low trading prices on the
next preceding date for which such prices were reported.
(n) “Fiscal Year PRSUs” shall have
the meaning set forth on Annex B.
(o) A
performance level of “Good” with respect to any
Performance Goal shall have the meaning set forth on Annex C.
(p) The
Executive shall have “Good
Reason” to resign his employment upon the occurrence of any of the
following: (i) failure of the Company to continue the Executive in
the position of Chairman and Chief Executive Officer; (ii) a material diminution
in the nature or scope of the Executive’s responsibilities, duties or authority
(including, without limitation, the Executive’s failure to continue to serve as
member of the Board); (iii) relocation of the Company’s executive offices more
than 50 miles outside of New York, New York or relocation of Executive away from
the executive offices; (iv) failure of the Company to timely make any material
payment or provide any material benefit under the Executive’s employment
agreement with the Company, or the Company’s material reduction of any
compensation, equity or benefits that the Executive is eligible to receive under
his employment agreement; or (v) the Company’s material breach of the
Executive’s employment agreement; provided, however, that
notwithstanding the foregoing the Executive may not resign his employment for
Good Reason unless: (x) the Executive provides the Company with at least 30 days
prior written notice of his intent to resign for Good Reason (which notice is
provided not later than the 60th day following the occurrence of the event
constituting Good Reason) and (y) the Company does not remedy the alleged
violation(s) within such 30-day period; and, provided, further, that
Executive may resign his employment for Good Reason if in connection with any
Change in Control the surviving entity does not assume his employment agreement
(or, with the written consent of the Executive, substitute a substantially
identical agreement) with respect to the Executive in writing delivered to the
Executive prior to, or as soon as reasonably practicable following, the
occurrence of such Change in Control
(q) A
performance level of “Marginal” with respect to any
Performance Goal shall have the meaning set forth on Annex C.
(r) A
performance level of “Outstanding” with respect to
any Performance Goal shall have the meaning set forth on Annex C.
A-3
(s) “Performance Criteria” shall
mean the criteria that the Committee selects for purposes of establishing the
Performance Goals. The Performance Criteria that will be used to
establish Performance Goals are limited to the following: net earnings (either
before or after interest, taxes, depreciation and amortization), economic
value-added (as determined by the Committee), sales or revenue, net income
(either before or after taxes), operating earnings or income, cash flow
(including, but not limited to, operating cash flow and free cash flow), funds
from operations, cash flow return on capital, return on investment, return on
stockholders’ equity, return on assets or net assets, return on capital,
stockholder returns, return on sales, gross or net profit margin, productivity,
expense, margins, operating efficiency, cost reduction or savings, customer
satisfaction, working capital, earnings or diluted earnings per share, price per
share of Stock, and market share, any of which may be measured either in
absolute terms or as compared to any incremental increase or as compared to
results of a peer group. The Committee shall, within the time
prescribed by Section 162(m) of the Code, define in an objective fashion the
manner of calculating the Performance Criteria it selects to use for the
Performance Period or a fiscal year of the Company.
(t) “Performance Goals” shall mean
the Performance Goals (as defined in the Plan) established in writing by the
Committee for the Performance Period, or for a fiscal year of the Company during
the Performance Period, based on the Performance Criteria, and set forth on
Annex
C.
(u) “Performance Period” shall mean
the period beginning on June 28, 2009 and ending on June 29, 2013.
(v) “Performance Period PRSUs”
shall have the meaning set forth on Annex B.
(w) “Person” shall mean an
individual, partnership, corporation, business trust, limited liability company,
joint stock company, trust, unincorporated association, joint venture,
governmental authority or other entity of whatever nature.
(x) “PRSU Gain” shall mean an
amount equal to the product of (i) the number of shares of Common Stock that are
distributed pursuant to the PRSU Award and (ii) the Fair Market Value per share
of Common Stock on the date of such distribution.
(y) “Retention Period” shall mean
the period beginning on the Vesting Date and ending on the second anniversary of
the Vesting Date.
(z) “Section 409A” shall mean
Section 409A of the Code and the Department of Treasury Regulations and other
interpretive guidance issued thereunder, including without limitation any such
regulations or guidance that may be issued after the date hereof.
(aa) “Section 5(a) Portion” shall
mean a number of PRSUs equal to the sum of (x) the number of Fiscal Year PRSUs
that relate to any fiscal year of the Company that ended on or prior to the Date
of Termination due to death or Disability (assuming for these purposes that (A)
the Company’s performance would not be Marginal or below for any fiscal year
that ends following the Date of Termination and (B) the Company’s performance
would be at least Superior for at least one fiscal year that ends following the
Date of Termination), (y) 102,424 PRSUs (the Target
Number of Performance Period PRSUs) and (z) the ratio of (i) the product of (A)
$1,750,000 and (B) the number of fiscal years during the Performance Period that
have not ended on or prior to the Date of Termination due to death or
Disability, to (ii) the Fair Market Value per share of Common Stock on the first
day of the fiscal year in which the Date of Termination due to death or
Disability occurs.
A-4
(bb) “Section 5(d) Portion” shall
mean a number of PRSUs equal to the sum of (x) 102,424 PRSUs (the Target
Number of Performance Period PRSUs) and (y) the ratio of (i) the product of (A)
$1,750,000 and (B) the number of fiscal years during the Performance Period that
have not ended prior to the Date of Termination (or date of Change in Control,
if later), to (ii) the Fair Market Value per share of Common Stock on the first
day of the fiscal year in which the Date of Termination, or Change in Control,
as applicable, occurs.
(cc) A
performance level of “Superior” with respect to any
Performance Goal shall have the meaning set forth on Annex C.
(dd) “Target Number of PRSUs” shall,
with respect to each of the Performance Period PRSUs and the Fiscal Year PRSUs,
mean that certain number of PRSUs calculated in accordance with the formula set
forth on Annex
B for the Performance Period or an individual fiscal year, as
applicable.
(ee) “Vesting Date” shall mean June
29, 2013.
(ff) “Voting Stock” shall mean all
capital stock of the Company which by its terms may be voted on all matters
submitted to stockholders of the Company generally.
A-5
Exhibit
F-Annex B
PERFORMANCE
RESTRICTED STOCK UNIT TERMS
As set
forth in that certain Performance Restricted Stock Unit Award Grant Notice and
Agreement to which this Annex B is attached
(the “Agreement”), this
Annex B sets
forth certain terms and conditions related to the PRSUs granted pursuant to the
Agreement. Capitalized terms not defined herein are defined in the
Agreement or in the Definitions Annex attached to the Agreement as Annex A.
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Executive:
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Xxx
Xxxxxxxxx
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Award
Date:
|
August
6, 2009
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Performance
Period:
|
June
28, 2009 through June 29, 2013 (i.e., the Company’s 2010 through 2013
fiscal years)
|
|
Target
Value of Award:
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The
aggregate target value of the Award is $10,000,000, divided as
follows:
(a) $7,000,000
based on the Company’s performance as measured against specified
pre-established performance goals for each of the Company’s 2010 through
2013 fiscal years (“Fiscal Year
PRSUs”).
(b) $3,000,000
based on the Company’s aggregate international growth during the
Performance Period (“Performance Period
PRSUs”).
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Target
Number of PRSUs:
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The
Target Number of PRSUs shall be determined as follows:
(a) Fiscal Year
PRSUs:
(i) Fiscal Year
2010: 59,747
PRSUs
(ii)
Fiscal Year
2011: That number of PRSUs equal to the ratio of:
(A). $1,750,000, to (B)the Fair Market Value
per share of Common Stock on the date the Committee approves the
performance goals for Fiscal Year 2011
(iii) Fiscal Year
2012: That number of PRSUs equal to the ratio of: (A) $1,750,000,
to (B)the
Fair Market Value per share of Common Stock on the date the Committee
approves the performance goals for Fiscal Year 2012
(iv) Fiscal Year
2013: That number of PRSUs equal to the ratio of: (A) $1,750,000,
to (B)the
Fair Market Value per share of Common Stock on the date the Committee
approves the performance goals for Fiscal Year 2013
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B-1
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Fractional
PRSUs shall not be granted, and the number of PRSUs determined pursuant to
(ii), (iii) and (iv) will be rounded down to the nearest whole number to
eliminate fractional PRSUs.
(b) Performance Period
PRSUs: 102,424
PRSUs
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|
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Actual
Number of PRSUs:
|
The
actual number of PRSUs which vest pursuant to the Award may be greater
than or less than the Target Number of PRSUs based on the Company’s
achievement of the Performance Goals set forth on Annex C and
determined in accordance with the Vesting Schedule set forth
below.
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Vesting
Schedule:
|
Subject
to subsection (c), below, the PRSUs shall become vested on the Vesting
Date based on the Company’s achievement of the Performance Goals set forth
on Annex C as follows:
(a) Fiscal Year
PRSUs:
With
respect to the performance of the Company in each of the Company’s 2010 –
2013 fiscal years, the number of PRSUs vesting on the Vesting Date shall
be:
(i)
Zero, if the Company performance level for such fiscal year is less than
or equal to Marginal;
(ii)
67% of the Target Number of PRSUs for such fiscal year if the Company
performance level for such fiscal year is Good;
(iii)
100% of the Target Number of PRSUs for such fiscal year if the Company
performance level for such fiscal year is Superior; and
(iv)
133% of the Target Number of PRSUs for such fiscal year if the Company
performance level for such fiscal year is Outstanding.
If
the Company performance level for a fiscal year is between Marginal and
Good, between Good and Superior, or between Superior and Outstanding, the
number of PRSUs that may become vested with respect to such fiscal year on
the Vesting Date shall be determined by means of linear
interpolation.
Notwithstanding
the foregoing, no Fiscal Year PRSUs in excess of the Target Number of
PRSUs shall vest on the Vesting Date with respect to performance in any
fiscal year unless (x) the Company’s performance level was greater than
Superior in at least two of the fiscal years during the Performance
Period, and (y) the Company’s performance level was at least Marginal in
every fiscal year during the Performance Period.
(b) Performance Period
PRSUs:
The
number of PRSUs vesting on the Vesting Date shall be:
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(i)
Zero, if the Company performance level for the Performance Period is less
than or equal to Marginal;
(ii)
50% of the Target Number of PRSUs if the Company performance level for the
Performance Period is Good;
(iii)
100% of the Target Number of PRSUs if the Company performance level for
the Performance Period is Superior; and
(iv)
133% of the Target Number of PRSUs if the Company performance level for
the Performance Period is Outstanding.
If
the Company performance level for the Performance Period is between
Marginal and Good, between Good and Superior, or between Superior and
Outstanding, the number of PRSUs that may become vested on the Vesting
Date shall be determined by means of linear interpolation.
(c)
Termination of
Employment Prior to Vesting Date:
Notwithstanding
the foregoing subsections (a) and (b), in the event of the Executive’s
termination of employment prior to the Vesting Date, any or all Fiscal
Year PRSUs and Performance Period PRSUs shall be subject to forfeiture in
accordance with Section 5 of the Agreement (and no PRSUs that are
forfeited pursuant to Section 5 of the Agreement shall become vested
pursuant to this Annex
B).
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Dividend
Equivalents:
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(a) The
Executive shall be eligible to receive Dividend Equivalents (as defined in
the Plan) with respect to the Award (the “Dividend Equivalent
PRSUs”). Subject to subsection (b), below, the
amount of the Dividend Equivalent PRSUs shall be determined as of the
Vesting Date (or, if earlier, the date the Award is distributed to
Executive pursuant to Section 5 of the Agreement) and shall be distributed
in accordance with the terms of the Agreement. For purposes of
determining the amount of Dividend Equivalent PRSUs (and subject to
subsection (b), below): (i) an amount representing dividends payable on
the number of shares of Common Stock equal to (A) the number of
Performance Period PRSUs and (B) Fiscal Year PRSUs with respect
to fiscal years beginning on or prior to the dividend record date shall be
deemed reinvested in Common Stock and credited as additional PRSUs as of
the dividend payment date; and (ii) (A) with respect to the Performance
Period PRSUs, the Company’s performance will be deemed to be Outstanding,
(B) with respect to the Fiscal Year PRSUs for the fiscal year in which the
dividend record date occurs, the Company’s performance level will be
deemed to be Outstanding; provided, however, that in the
event the Company’s performance level is Marginal or below in any fiscal
year that ends prior to the dividend record date, the Company’s
performance for the fiscal year in which the dividend record date occurs
shall be deemed to be Superior, and (C) with respect to the Fiscal Year
PRSUs for the fiscal years ending prior to the fiscal year in which the
dividend record date occurs, the Company’s performance will be based on
actual results for such prior fiscal
years.
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B-3
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(b) All
Dividend Equivalent PRSUs (including Dividend Equivalent PRSUs paid with
respect to any prior year’s Dividend Equivalent PRSUs) will be subject to
forfeiture if the underlying PRSUs are forfeited in accordance with the
forfeiture and vesting provisions set forth in Section 5 of the Agreement
and this Annex
B.
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Transfer
Restrictions:
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The
PRSUs shall be subject to the transfer restrictions set forth in the
Agreement and the Retention Requirements set forth below.
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Retention
Requirements:
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Following
the Vesting Date, 50% of the net number of shares of Common Stock
distributed to the Executive pursuant to the vesting of the Award (after
the deduction of shares for tax withholding in accordance with the
Agreement) must be retained by the Executive until the expiration of the
Retention Period and during such period the Executive may not in any
manner, directly or indirectly, transfer, assign, sell, exchange, pledge,
hypothecate or otherwise dispose of any such shares of Common
Stock.
Notwithstanding
the foregoing, the Retention Period shall not apply (i) following a
termination of employment due to death or Disability, (ii) following a
termination of employment without Cause or for Good Reason that occurs
within 12 months following a Change in Control, or (iii) upon a Change in
Control that occurs within the six months following a termination of
employment without Cause or for Good Reason.
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Performance
Goals:
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The
Award is intended to qualify as “performance-based compensation” within
the meaning of Section 162(m) of the Code.
The
Performance Goals set forth on Annex C shall
be established and the level of achievement of such Performance Goals
shall be determined in the following manner:
(a) Fiscal Year
PRSUs
No
later than 90 days following the commencement of each of the Company’s
fiscal years during the Performance Period (or such earlier time as may be
required under Section 162(m) of the Code), the Committee shall, in
writing, select the Performance Criteria for such fiscal year and
establish the Performance Goals and the Target Number of PRSUs which may
be earned for such fiscal year based on the Performance
Criteria. Following the completion of each fiscal year, the
Committee shall certify in writing whether and the extent to which the
Performance Goals have been achieved for such fiscal year.
(b)Performance Period
PRSUs
No
later than 90 days following the commencement of the Performance Period,
the Committee shall, in writing, select the Performance Criteria for the
Performance Period and establish the Performance Goals and the Target
Number of PRSUs which may be earned for the Performance Period based on
the Performance Criteria. Following the completion of the
Performance Period, the Committee shall certify in writing whether and the
extent to which the Performance Goals have been achieved for the
Performance Period.
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Notwithstanding
any other provision of the Agreement (or any of its annexes), the Award
shall be subject to any additional limitations set forth in Section 162(m)
of the Code or any regulations or rulings thereunder that are requirements
for qualification as “performance-based compensation,” and the Agreement
shall be deemed amended to the extent necessary to conform to such
requirements.
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B-5
Exhibit
F-Annex C
PERFORMANCE
GOALS
I. Fiscal Year
PRSUs
The
Performance Goals for the Fiscal Year PRSUs for each of fiscal years 2010
through 2013 shall equal the performance goals for such fiscal year to be
adopted by the Human Resources Committee of the Board under the Company’s
Performance-Based Annual Incentive Plan (together with any successor plan
adopted by the Company that provides for “performance-based compensation” within
the meaning of Section 162(m) of the Code, the “Bonus Plan”).
Each of
the terms “Good,” “Marginal,” “Outstanding” and “Superior”, with respect to any
Performance Goal for Fiscal Year PRSUs in any fiscal year, shall have the same
value as adopted by the Human Resources Committee for such fiscal year pursuant
to the Bonus Plan.
II. Performance Period
PRSUs
The
Performance Goal for the Performance Period PRSUs shall equal the target to be
approved by the Human Resources Committee on August 6, 2009 for aggregate net
sales by Coach International, excluding Coach Japan, during the final fiscal
year of the Performance Period.
Each
of the terms “Good,” “Marginal,” “Outstanding” and “Superior”, with respect to
such Performance Goal for the Performance Period PRSUs, shall have the same
value as adopted by the Human Resources Committee on August 6,
2009.
C-1
Exhibit
F-Annex D
RESTRICTIVE
COVENANTS
Capitalized
terms used but not otherwise defined herein shall have the meanings ascribed to
them in the Agreement to which this Annex C is attached
or in the Definition Annex attached to the Agreement as Annex B.
1. The
Executive shall not, at any time during his employment or during the 24-month
period following the Date of Termination (the “Restricted Period”) directly
or indirectly engage in, have any equity interest in, or manage or operate any
(a) Competitive Business (as defined below), (b) new luxury accessories business
that competes directly with the existing or planned product lines of the Company
or (c) business with respect to which Xxxx Xxxxxxx is a designer or marketer (or
with respect to which Xxxx Xxxxxxx otherwise performs similar duties to those he
performs for the Company); provided, however, that the
Executive shall be permitted to acquire a passive stock or equity interest in
such a business provided the stock or other equity interest acquired is not more
than five percent (5%) of the outstanding interest in such
business. For purposes of these Restrictive Covenants, “Competitive Business” shall
mean any entity that, as of the date of the Executive’s termination of
employment, the Committee has designated in its sole discretion as an entity
that competes with any of the businesses of the Company; provided, that (i) not more
than 20 entities (which term “entities” shall include any subsidiaries, parent
entities and other affiliates thereof) shall be designated as Competitive
Businesses at one time and (ii) such entities are the same 20 entities used for
any list of competitive entities for any other arrangement with an executive of
the Company; and, provided
further, that the Committee may change its designation of Competitive
Businesses at any time that is not less than 90 days prior to the Executive’s
termination of employment upon written notice thereof to the Executive (and any
such change within the 90 day period immediately preceding the Executive’s
termination of employment shall not be effective).
2. During
the Restricted Period, the Executive will not, directly or indirectly recruit or
otherwise solicit or induce any employee, director, consultant, wholesale
customer, vendor, supplier, lessor or lessee of the Company to terminate its
employment or arrangement with the Company, otherwise change its relationship
with the Company, or establish any relationship with the Executive or any of his
affiliates for any business purpose.
3. Except
as required in the good faith opinion of the Executive in connection with the
performance of the Executive’s duties hereunder or as specifically set forth in
this Section 3, the Executive shall, in perpetuity, maintain in confidence and
shall not directly, indirectly or otherwise, use, disseminate, disclose or
publish, or use for his benefit or the benefit of any person, firm, corporation
or other entity any confidential or proprietary information or trade secrets of
or relating to the Company, including, without limitation, information with
respect to the Company’s operations, processes, products, inventions, business
practices, finances, principals, vendors, suppliers, customers, potential
customers, marketing methods, costs, prices, contractual relationships,
regulatory status, business plans, designs, marketing or other business
strategies, compensation paid to employees or other terms of employment, or
deliver to any person, firm, corporation or other entity any document, record,
notebook, computer program or similar repository of or containing any such
confidential or proprietary information or trade secrets. The parties
hereby stipulate and agree that as between them the foregoing matters are
important, material and confidential proprietary information and trade secrets
and affect the successful conduct of the businesses of the Company (and any
successor or assignee of the Company). Upon termination of the
Executive’s employment with the Company for any reason, the Executive will
promptly deliver to the Company all correspondence, drawings, manuals, letters,
notes, notebooks, reports, programs, plans, proposals, financial documents, or
any other documents concerning the Company’s customers, business plans, designs,
marketing or other business strategies, products or processes, provided that the Executive
may retain his rolodex, address book and similar information and any
non-proprietary documents he received as a director.
D-1
4. Notwithstanding
Section 3, the Executive may respond to a lawful and valid subpoena or other
legal process or other government or regulatory inquiry but shall give the
Company prompt notice thereof (except to the extent legally prohibited), and
shall, as much in advance of the return date as is reasonably practicable, make
available to the Company and its counsel copies of any documents sought which
are in the Executive’s possession or to which the Executive otherwise has
reasonable access. In addition, the Executive shall reasonably
cooperate with and assist the Company and its counsel at any time and in any
manner reasonably requested by the Company or its counsel (with due regard for
the Executive’s other commitments if he is not employed by the Company) in
connection with any litigation or other legal process affecting the Company of
which the Executive has knowledge as a result of his employment with the Company
(other than any litigation with respect to his employment
agreement). In the event of such requested cooperation, the Company
shall reimburse the Executive’s reasonable out of pocket expenses.
5. The
Executive shall not disparage the Company, any of its products or practices, or
any of its directors, officers, agents, representatives, or employees, either
orally or in writing, at any time. The Company (including without
limitation its directors) shall not disparage the Executive, either orally or in
writing, at any time. Notwithstanding the foregoing, nothing in this
Section 5 shall limit the ability of the Company or the Executive, as
applicable, to provide truthful testimony as required by law or any judicial or
administrative process.
6. The
Executive agrees that all strategies, methods, processes, techniques, marketing
plans, merchandising schemes, themes, layouts, mechanicals, trade secrets,
copyrights, trademarks, patents, ideas, specifications and other material or
work product (“Intellectual
Property”) that the Executive creates, develops or assembles in
connection with his employment hereunder shall become the permanent and
exclusive property of the Company to be used in any manner it sees fit, in its
sole discretion. The Executive shall not communicate to the Company
any ideas, concepts, or other intellectual property of any kind (other than in
his capacity as an officer of the Company) which (a) were earlier communicated
to the Executive in confidence by any third party as proprietary information, or
(b) the Executive knows or has reason to know is the proprietary information of
any third party. Further, the Executive shall adhere to and comply
with the Company’s Global Business Integrity Program Guide. All
Intellectual Property created or assembled in connection with the Executive’s
employment hereunder shall be the permanent and exclusive property of the
Company. The Company and the Executive mutually agree that all
Intellectual Property and work product created in connection with the
Executive’s employment, which is subject to copyright, shall be deemed to be
“work made for hire,” and that all rights to copyrights shall be vested in the
Company. If for any reason the Company cannot be deemed to have
commissioned “work made for hire,” and its rights to copyright are thereby in
doubt, then the Executive agrees not to claim to be the proprietor of the work
prepared for the Company, and to irrevocably assign to the Company, at the
Company’s expense, all rights in the copyright of the work prepared for the
Company.
D-2
7. As
used in these Restrictive Covenants, the term “Company” shall include the
Company and any of its affiliates or direct or indirect
subsidiaries.
8. The
Company and the Executive expressly acknowledge and agree that the agreements
and covenants contained in these Restrictive Covenants are
reasonable. In the event, however, that any agreement or covenant
contained in these Restrictive Covenants shall be determined by any court of
competent jurisdiction to be unenforceable by reason of its extending for too
great a period of time or over too great a geographical area or by reason of its
being too extensive in any other respect, it will be interpreted to extend only
over the maximum period of time for which it may be enforceable, and/or over the
maximum geographical area as to which it may be enforceable and/or to the
maximum extent in all other respects as to which it may be enforceable, all as
determined by such court in such action.
D-3
