Item 1.01 Entry into a Material Definitive Agreement.
On June 29, 2011, the Compensation Committee of our Board of Directors granted restricted
stock units, pursuant to our 2005 Stock Incentive Plan, as amended to date (the “2005 Plan”), that
will enable the following persons to receive shares of our common stock, subject to satisfaction of
specified conditions, as follows: (i) up to 150,000 shares to Morris Goldfarb, our Chairman and
Chief Executive Officer, (ii) up to 100,000 shares to Sammy Aaron, our Vice Chairman, (iii) up to
65,000 shares to Wayne S. Miller, our Chief Operating Officer, (iv) up to 7,000 shares to Jeanette
Nostra, our President and (v) up to 10,000 shares to Neal S. Nackman, our Chief Financial Officer.
The above-named persons will be entitled to receive these shares of our common stock only if
the average closing price per share of our common stock on the Nasdaq Global Select Market is
$39.00 (which is 17.6% above the closing price of our common stock on the Nasdaq Global Select
Market on the date of grant) or higher over a twenty consecutive trading day period during the
five-year period commencing on June 30, 2011 and ending on June 29, 2016 (the “Price Vesting
Condition”). In addition, the right to receive these shares of common stock will become vested in
annual increments beginning on the second anniversary of the date of grant (the “Time Vesting
Condition”).
If the Price Vesting Condition is satisfied and the named executive officer remains employed
by us or otherwise provides service for us, we will issue to him or her 25% of the shares of common
stock to which he or she is entitled on each of the second, third, fourth and fifth anniversaries
of the date of grant, but only if the named executive officer remains employed by us or otherwise
performs service for us on each anniversary date. If the Price Vesting Condition is not
satisfied within the five-year period, no shares of common stock will be issued pursuant to
the restricted stock unit grants. If the Price Vesting Condition is satisfied at any time during
the five-year period, any shares that would have previously satisfied the Time Vesting Condition
will be issued.
The number of shares of common stock to which the restricted stock units relate and the
vesting price will be appropriately adjusted in the event of stock splits, stock dividends and
other extraordinary corporate events.
A copy of the form of Deferred Stock Award Agreement for these grants under the 2005 Plan is
filed herewith as Exhibit 10.1.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain Officers.
(e) See “Item 1.01 Entry into a Material Definitive Agreement” above for a description of
restricted stock unit grants to our Chief Executive Officer, Chief Financial Officer and other
named executive officers on June 29, 2011.