FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Delaware 31-1469076
- --------------------------------- -----------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
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Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.
Class A Common Stock Outstanding at December 2, 1996
- --------------------------------- -------------------------------------
$.01 Par Value 8,050,000 Shares
Class B Common Stock Outstanding at December 2, 1996
- --------------------------------- -------------------------------------
$.01 Par Value 43,000,000 Shares
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ABERCROMBIE & FITCH CO.
TABLE OF CONTENTS
Page No.
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Part I. Financial Information
Item 1. Financial Statements
Consolidated Statements of Income
Thirteen and Thirty-nine Weeks Ended
November 2, 1996 and October 28, 1995............... 3
Consolidated Balance Sheets
November 2, 1996 and February 3, 1996............... 4
Consolidated Statements of Cash Flows
Thirty-nine Weeks Ended
November 2, 1996 and October 28, 1995............... 5
Notes to Consolidated Financial Statements............... 6
Item 2. Management's Discussion and Analysis of
Results of Operations and Financial Condition.... 11
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K................... 16
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PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
ABERCROMBIE & FITCH CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Thousands except per share amounts)
(Unaudited)
Thirteen Weeks Ended Thirty-nine Weeks Ended
------------------------- ------------------------
November 2, October 28, November 2, October 28,
1996 1995 1996 1995
----------- ----------- ---------- -----------
NET SALES $87,688 $57,222 $196,139 $129,267
Cost of Goods Sold, Occupancy
and Buying Costs 56,731 37,719 132,236 89,313
----------- ----------- ---------- -----------
GROSS INCOME 30,957 19,503 63,903 39,954
General, Administrative and
Store Operating Expenses 21,732 15,220 53,252 37,190
----------- ----------- ---------- -----------
OPERATING INCOME 9,225 4,283 10,651 2,764
Interest Expense 2,643 - 3,794 -
----------- ----------- ---------- -----------
INCOME BEFORE INCOME TAXES 6,582 4,283 6,857 2,764
Provision for Income Taxes 2,600 1,700 2,700 1,100
----------- ----------- ---------- -----------
NET INCOME $ 3,982 $ 2,583 $ 4,157 $ 1,664
=========== =========== ========== ===========
NET INCOME PER SHARE $.09 $.06 $.09 $.04
=========== =========== ========== ===========
WEIGHTED AVERAGE SHARES
OUTSTANDING 45,945 43,000 43,982 43,000
=========== =========== ========== ===========
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The accompanying notes are an integral part of these consolidated financial statements.
ABERCROMBIE & FITCH CO. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Thousands)
November 2, February 3,
1996 1996
----------- -----------
(Unaudited)
ASSETS
------
CURRENT ASSETS:
Cash $ 1,816 $ 874
Accounts Receivable 3,109 3,617
Inventories 51,339 30,388
Store Supplies 4,243 3,529
Other 961 448
----------- -----------
TOTAL CURRENT ASSETS 61,468 38,856
PROPERTY AND EQUIPMENT, NET 51,256 47,203
DEFERRED INCOME TAXES 1,218 1,624
OTHER ASSETS 6 10
----------- -----------
TOTAL ASSETS $ 113,948 $ 87,693
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
---------------------------------------------
CURRENT LIABILITIES:
Accounts Payable $ 9,357 $ 4,359
Accrued Expenses 21,198 14,500
Intercompany Debt - 86,045
Credit Agreement 29,733 -
Working Capital Note 8,616 -
Income Taxes 1,485 4,892
----------- -----------
TOTAL CURRENT LIABILITIES 70,389 109,796
INTERCOMPANY PAYABLE 1,601 -
LONG-TERM MIRROR NOTE 50,000 -
OTHER LONG-TERM LIABILITIES 855 519
SHAREHOLDERS' EQUITY (DEFICIT):
Common Stock 511 -
Paid-in Capital 118,362 305
Retained Earnings (Deficit) (127,770) (22,927)
----------- -----------
TOTAL SHAREHOLDERS' EQUITY (DEFICIT) (8,897) (22,622)
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY (DEFICIT) $ 113,948 $ 87,693
=========== ===========
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The accompanying notes are an integral part of these consolidated financial statements.
ABERCROMBIE & FITCH CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Thousands)
(Unaudited)
Thirty-nine Weeks Ended
------------------------
November 2, October 28,
1996 1995
----------- ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 4,157 $ 1,664
Impact of Other Operating Activities on Cash Flows:
Depreciation and Amortization 8,423 6,706
Changes in Assets and Liabilities:
Inventories (20,951) (30,102)
Accounts Payable and Accrued Expenses 11,696 5,676
Income Taxes (3,001) (3,600)
Other Assets and Liabilities 56 (121)
---------- ---------
NET CASH PROVIDED FROM (USED FOR) OPERATING ACTIVITIES 380 (19,777)
---------- ---------
CASH USED FOR INVESTING ACTIVITIES
Capital Expenditures (12,910) (11,657)
---------- ---------
FINANCING ACTIVITIES:
Increase in Intercompany Payable 15,172 31,566
Repayment of Intercompany Debt (91,000) -
Repayment of Trademark Obligation (32,000) -
Dividend Paid to Parent (27,000) -
Proceeds from Borrowings Under Credit Agreement 150,000 -
Repayment of Borrowings Under Credit Agreement (120,267) -
Net Proceeds from Sale of Stock 118,567 -
Other Changes in Shareholders' Equity - 150
---------- ---------
NET CASH PROVIDED FROM FINANCING ACTIVITIES 13,472 31,716
---------- ---------
NET INCREASE IN CASH 942 282
Cash, Beginning of Year 874 592
---------- ---------
CASH, END OF PERIOD $ 1,816 $ 874
========== =========
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In the thirty-nine weeks ended November 2, 1996, non-cash financing activities included the distribution of a note representing preexisting obligations of Abercrombie & Fitch's operating subsidiary in respect of certain trademarks in the amount of $32 million by Abercrombie & Fitch's trademark subsidiary to The Limited Inc., distribution of the $50 million long-term mirror note and the conversion of $8.6 million of intercompany debt into the working capital note.
The accompanying notes are an integral part of these consolidated financial statements.
ABERCROMBIE & FITCH CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. BASIS OF PRESENTATION
Abercrombie & Fitch Co. (the "Company") was incorporated on June 26, 1996, and on July 15, 1996 acquired the stock of Abercrombie & Fitch Holdings, the parent company of the Abercrombie & Fitch Business, and A&F Trademark, Inc., in exchange for 43 million shares of Class B common stock issued to The Limited, Inc. ("The Limited"). The Company is a specialty retailer of high quality, casual apparel for men and women with an active, youthful lifestyle. The business was established in 1892 and subsequently acquired by The Limited in 1988.
An initial public offering of 8.05 million shares of the Company's Class A common stock, including the sale of 1.05 million shares pursuant to the exercise by the underwriters of their options to purchase additional shares (the "Offering"), was consummated on October 1, 1996. As a result of the Offering, approximately 84.2% of the outstanding common stock of the Company is owned by The Limited.
Holders of Class A common stock generally have rights identical to holders of Class B common stock except that holders of Class A common stock are entitled to one vote per share while holders of Class B common stock are entitled to three votes per share on all matters submitted to a vote of shareholders. Under certain circumstances, each share of Class B common stock is convertible into one share of Class A common stock, while held by The Limited.
The net proceeds received by the Company from the Offering, approximating $118.6 million, and cash from operations were used to partially repay the borrowings under the $150 million credit agreement.
The accompanying consolidated financial statements include the historical financial statements of, and transactions applicable to Abercrombie & Fitch Co. and its subsidiaries and reflect the assets, liabilities, results of operations and cash flows on a historical cost basis. The Company is a direct subsidiary of The Limited. The common stock issued to The Limited (43 million Class B shares) in connection with the incorporation of the Company has been reflected as outstanding for all periods presented.
The consolidated financial statements as of and for the periods ended November 2, 1996 and October 28, 1995 are unaudited and are presented pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, these consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company's Prospectus dated September 25, 1996. In the opinion of management, the accompanying consolidated financial statements reflect all adjustments (which are of a normal recurring nature) necessary to present fairly the financial position and results of operations and cash flows for the interim periods, but are not necessarily indicative of the results of operations for a full fiscal year.
The consolidated financial statements as of November 2, 1996 and for the thirteen and thirty-nine week periods ended November 2, 1996 and October 28, 1995 included herein have been reviewed by the independent public accounting firm of Coopers & Lybrand L.L.P. and the report of such firm follows the notes to consolidated financial statements.
1. ADOPTION OF ACCOUNTING STANDARD
In October 1995, the Financial Accounting Standards Board issued SFAS No. 123, "Accounting for Stock-Based Compensation." The Company will make the required disclosures in its 1996 Annual Report.
3. INVENTORIES
The fiscal year of the Company and its subsidiaries is comprised of two principal selling seasons: Spring (the first and second quarters) and Fall (the third and fourth quarters). Valuation of finished goods inventories is based principally upon the lower of average cost or market determined on a first-in, first-out basis utilizing the retail method. Inventory valuation at the end of the first and third quarters reflects adjustments for inventory markdowns and shrinkage estimates for the total selling season.
4. PROPERTY AND EQUIPMENT, NET
Property and equipment, net, consisted of (thousands):
November 2, February 3,
1996 1996
------------ -----------
Property and equipment, at cost $ 93,294 $ 80,867
Accumulated depreciation and
amortization (42,038) (33,664)
----------- -----------
Property and equipment, net $ 51,256 $ 47,203
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5. INCOME TAXES
The Company is included in The Limited's consolidated federal income tax group for income tax purposes and is responsible for its proportionate share of income taxes calculated upon its federal taxable income at a current estimate of the Company's annual effective tax rate.
6. FINANCING ARRANGEMENTS
Short-term borrowings consist of the following at November 2, 1996 (thousands):
Credit Agreement $29,733
Working Capital Note 8,616
---------
$38,349
=========
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The credit agreement represents the remaining balance on $150 million originally borrowed on July 2, 1996 under a bank credit agreement. The LIBOR-related interest rate at November 2, 1996 was 5.92%. The agreement places restrictions on mergers, consolidations, acquisitions, sales of assets, transactions with affiliates, sale and leaseback transactions, liens, restricted payments, debt and investments. It also contains an interest and rental expense coverage ratio and a maximum ratio of debt to earnings before income taxes, depreciation and amortization. The amounts borrowed are repayable in nine consecutive semi-annual installments, commencing on June 30, 1997. In addition, any outstanding borrowings must be paid in full in the event that The Limited ceases to own directly at least 80% of the outstanding stock of the Company. It is anticipated that the remaining balance will be paid by cash provided from operations within one year, and, accordingly, is classified as short-term borrowings. The working capital note, which represents an obligation payable to The Limited matures on January 31, 1997 and bears interest at an annual rate of 6.75%.
The long-term mirror note of $50 million represents a note distributed by the Company's operating subsidiary to The Limited on July 2, 1996. The 7.8% interest rate and May 15, 2002 maturity of the mirror note parallels that of the corresponding debt of The Limited.
Interest paid during the thirty-nine weeks ended November 2, 1996,
including interest on the intercompany cash management account (see Note
7), approximated $2.5 million.
7. INTERCOMPANY RELATIONSHIP WITH PARENT
The Limited provides various services to the Company including, but not limited to, store design and construction supervision, real estate management, travel and flight support and merchandise sourcing. To the extent expenditures are specifically identifiable they are charged to the Company. All other related support expenses are charged to the Company and other divisions of The Limited pro rata based upon various allocation methods.
The Company participates in The Limited's centralized cash management system whereby cash received from operations is transferred to The Limited's centralized cash accounts and cash disbursements are funded from the centralized cash accounts on a daily basis. After the initial capitalization of the Company, the intercompany cash management account became an interest earning asset or interest bearing liability of the Company depending upon the level of cash receipts and disbursements. Interest on the intercompany cash management account is calculated based on the commercial paper rates for "AA" rated companies as reported in the Federal Reserve's H.15 statistical release. The amount of the intercompany payable under these arrangements to The Limited at November 2, 1996 is approximately $1.6 million.
[LETTERHEAD OF COOPERS & LYBRAND]
REPORT OF INDEPENDENT ACCOUNTANTS
To The Board of Directors of
Abercrombie & Fitch Co.
We have reviewed the condensed consolidated balance sheet of Abercrombie & Fitch Co. at November 2, 1996, and the related condensed consolidated statements of income and cash flows for the thirteen-week and thirty-nine-week periods ended November 2, 1996 and October 28, 1995. These financial statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements for them to be in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet as of February 3, 1996, and the related consolidated statements of income, shareholders' equity, and cash flows for the year then ended (not presented herein); and in our report dated July 11, 1996, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of February 3, 1996, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.
/s/ COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
Columbus, Ohio
December 11, 1996
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Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
RESULTS OF OPERATIONS
During the third quarter of 1996, net sales increased 53% to $87.7 million from $57.2 million a year ago. Third quarter operating income of $9.2 million more than doubled last year's $4.3 million.
Earnings per share were $.09 in the third quarter of 1996 compared to $.06 in 1995. Year-to-date earnings per share were $.09 in 1996 compared to $.04 in 1995. On an adjusted basis, third quarter earnings per share were $.09 in 1996 compared to $.03 in 1995 and year-to-date earnings per share were $.08 in 1996 compared to a $(.02) loss in 1995. The adjusted results for the current and prior year periods presented reflect: 1) 51.05 million shares outstanding; 2) interest expense on the Company's ongoing capital structure, which excludes interest expense on the Company's $150 million credit agreement that the Company anticipates will be repaid in the fourth quarter of 1996; and 3) interest expense on the Company's seasonal borrowings. Seasonal borrowings are provided through The Limited's centralized cash management system and are reflected in the Company's intercompany balances with The Limited.
The following summarized statement of income data compares the adjusted thirteen and thirty-nine week periods ended November 2, 1996 to the adjusted information for the comparable 1995 periods (in thousands except per share data):
Third Quarter
------------------------------------------------------------------------------------------------
As Reported Adjusted As Reported Adjusted
November 2, November 2, October 28, October 28,
1996 Adjustments 1996 1995 Adjustments 1995
------------ ----------- ----------- ------------- ------------ -----------
Operating income $ 9,225 - $ 9,225 $ 4,283 - $ 4,283
Interest expense (2,643) $1,300 (1,343) - $(1,556) (1,556)
------- ------ ------- ------- ------- -------
Income before income taxes 6,582 1,300 7,882 4,283 (1,556) 2,727
Provision for income taxes 2,600 550 3,150 1,700 (610) 1,090
------- ------ ------- ------- ------- -------
Net income $ 3,982 $ 750 $ 4,732 $ 2,583 $ (946) $ 1,637
======= ====== ======= ======= ======= =======
Net income per share $.09 $.09 $ .06 $.03
======= ======= ======= =======
Weighted average shares
outstanding 45,945 51,050 43,000 51,050
======= ======= ======= =======
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Year-to-Date
------------------------------------------------------------------------------------------------
As Reported Adjusted As Reported Adjusted
November 2, November 2, October 28, October 28,
1996 Adjustments 1996 1995 Adjustments 1995
------------ ----------- ----------- ------------- ------------ -----------
Operating income $10,651 - $10,651 $ 2,764 - $ 2,764
Interest expense (3,794) $(97) (3,891) - $(4,241) (4,241)
------- ------ ------- ------- ------- -------
Income before income taxes 6,857 (97) 6,760 2,764 (4,241) 1,477
Provision for income taxes 2,700 - 2,700 1,100 (1,690) (590)
------- ------ ------- ------- ------- -------
Net income (loss) $ 4,157 $(97) $ 4,060 $ 1,664 $(2,551) $ (887)
======= ====== ======= ======= ======= =======
Net income (loss) per share $.09 $.08 $ .04 ($.02)
======= ======= ======= =======
Weighted average shares
outstanding 43,982 51,050 43,000 51,050
======= ======= ======= =======
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The following summarized financial and statistical data compares the thirteen and thirty-nine week periods ended November 2, 1996 to the comparable 1995 periods:
Third Quarter Year-to-Date
------------------------------ -----------------------------
1996 1995 % Change 1996 1995 % Change
------ ------ -------- ------ ------ --------
Increase in comparable store sales 19% 9% 17% 6%
Sales increase attributable to
new and remodeled stores 35% 40% 35% 37%
Sales per average selling square foot $99 $88 13% $227 $210 8%
Sales per average store (thousands) $779 $702 11% $1,791 $1,690 6%
Average store size at end of
quarter (selling square feet) 7,849 8,012 (2%)
Selling square feet at end of quarter
(thousands) 934 689 36%
Number of stores:
Beginning of period 106 77 100 67
Opened 13 9 19 19
Closed - - - -
----- ----- ----- -----
End of period 119 86 119 86
===== ===== ===== =====
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Net sales for the third quarter of 1996 increased 53% to $87.7 million from $57.2 million, an increase of $30.5 million. The increase was due to a comparable store sales increase of 19%, combined with the addition of 33 new stores as compared to the third quarter of 1995. Total selling square footage increased by 245,000 square feet or 36%. Comparable store sales increases were strong in both the men's and women's categories with women's sweaters and pants and men's sweaters, pants and jeans among the best performing departments. Net sales per selling square foot for the Company increased 13%.
Year-to-date net sales were $196.1 million, an increase of 52%, from $129.3 million for the same period in 1995. Sales growth came primarily from a comparable store sales increase of 17% and the addition of new stores. Net sales per selling square foot for the Company increased 8%.
For the third quarter, gross income, expressed as a percentage of net sales, was 35.3%, which represented a 1.2% increase from the 34.1% level in the third quarter of 1995. The increase was attributable to a decrease in buying and occupancy costs, as a percentage of net sales, due to favorable expense leveraging associated with increased comparable store sales. This more than offset a decline in merchandise margins (representing gross income before the deduction of buying and occupancy costs). The decline in merchandise margins reflects higher markdowns in the third quarter of 1996 versus 1995, consistent with the Company's strategy to introduce fresh merchandise for the holiday selling period.
The 1996 year-to-date gross income, expressed as a percentage of net sales, was 32.6%, which represented a 1.7% increase from the 30.9% level in the comparable period in 1995. Buying and occupancy costs declined as a percentage of net sales, due to favorable expense leveraging associated with increased comparable store sales. Merchandise margins were down slightly for the period due to higher markdowns.
General, administrative and store operating expenses, expressed as a percentage of net sales, were 24.8% in the third quarter of 1996 and 26.6% for the same period in 1995. The decline is attributable to expense leverage associated with the strong comparable store sales growth and continued improvement in the management of store payroll.
General, administrative and store operating expenses, expressed as a percentage of net sales, were 27.2% and 28.8% for the year-to-date periods in 1996 and 1995, respectively. The improvement resulted from management's continued emphasis on expense control and the favorable leveraging of store and home office expenses over higher sales volume.
Third quarter and year-to-date operating income, expressed as a percentage of net sales, were 10.5% and 5.4%, respectively in 1996, up from 7.5% and 2.1% for the comparable periods in 1995. The improvement in operating income in these periods is a result of both higher gross income and lower general, administrative and store operating expenses, expressed as a percentage of net sales.
Third quarter adjusted interest expense of $1.3 million was down $.2 million from adjusted interest expense for 1995. Year-to-date 1996, the Company's adjusted interest expense was $3.9 million, down from $4.2 million in 1995. Adjusted interest expense was lower in 1996 principally due to higher cash flows generated from operations during 1996. Historical interest expense of $2.6 million for the third quarter and $3.8 million for the year-to-date period in 1996 reflects interest on the $150 million credit agreement from June 30, 1996 through the end of September and interest on the remaining balance of $29.7 million for October, interest on the $50 million mirror notes and $300,000 in financing fees relating to the credit agreement.
FINANCIAL CONDITION
Cash provided from operating activities and cash funding from The Limited's centralized cash management system provide the resources to support operations, including seasonal requirements and capital expenditures. A summary of the Company's working capital position and long-term ongoing capitalization follows (thousands):
November 2, 1996 February 3, 1996
---------------- ----------------
Working capital $(8,921) (1) $(70,940) (2)
Intercompany payable $ 1,601 -
Capitalization:
Long-term debt $50,000 -
Deferred income tax asset (1,218) $ (1,624)
Shareholders' equity (deficit) (8,897) (22,622)
------- --------
Total capitalization $39,885 $(24,246)
======= ========
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(1) Includes the $8.6 million working capital note due The Limited.
(2) Includes $86.0 million of intercompany debt due The Limited.
Net cash provided from operating activities totaled $.4 million for the thirty- nine weeks ended November 2, 1996 versus net cash used for operating activities of $(19.8) million in the comparable period in 1995. Inventories increased 10% to $51.3 million in 1996 compared to the same period in 1995 causing a use of cash to support current year sales growth. Commensurate with the growth in sales and inventories, accounts payable and accrued expenses also increased.
Investing activities were all for capital expenditures, which are primarily for new stores.
The $150 million credit agreement, of which $29.7 million was outstanding at November 2, 1996, is classified as a short-term obligation. It is currently anticipated that all of the borrowings under the credit agreement will be repaid by cash provided by operations in the fourth quarter of the 1996 fiscal year.
Financing activities were primarily due to intercompany transactions as discussed in Note 7 to the quarterly financial statements. In addition, financing activities during 1996 included proceeds of $150 million from the credit agreement which were used to repay $91 million of intercompany debt and $32 million of Trademark Obligations and fund a $27 million dividend to The Limited.
Abercrombie & Fitch's operations are seasonal in nature and are comprised of two principal selling seasons: Spring (the first and second quarters) and Fall (the third and fourth quarters), with the fourth quarter, including the holiday season, accounting for approximately 45% of net sales in each of the last two years. Accordingly, cash requirements are highest in the third quarter as the Company's inventory builds in anticipation of the holiday selling season.
Capital expenditures, primarily for new and remodeled stores, totaled $12.9 million for the thirty-nine weeks ended November 2, 1996 compared to $11.7 million for the comparable period of 1995. The Company anticipates spending $21 - $25 million in 1996 for capital expenditures, of which $18 - $22 million will be for new stores, the relocation and expansion of existing stores and related improvements for the retail business.
The Company has announced its intention to add approximately 214,000 net selling square feet in 1996, which will represent a 27% increase over year-end 1995. It is anticipated that the increase will result from the addition of 29 new stores and the remodeling of one store. The Company expects that future capital `expenditures will be funded principally by net cash provided by operating activities.
PART II - OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
3. Articles of Incorporation and Bylaws
3.1 Amended and Restated Certificate of Incorporation of the Company.
3.2 Bylaws of the Company.
4. Instruments Defining the Rights of Security Holders
4.1 Specimen Certificate of Class A Common Stock of the Company incorporated by reference to Exhibit 4.1 to the Company's Registration Statement on Form S-1 (File No. 333-8231) (the "Form S-1").
4.2 Certificate of Incorporation of The Limited incorporated by reference to Exhibit 4.2 to the Company's Form S-1.
4.3 Bylaws of The Limited incorporated by reference to Exhibit 4.3 to the Company's Form S-1.
4.4 Credit Agreement dated as of June 28, 1996 among Abercrombie & Fitch Stores, Inc., Abercrombie & Fitch Trademark, Inc., the banks listed therein and Chase Manhattan Bank, N.A. as Agent incorporated by reference to Exhibit 10.1 to the Company's Registration Statement on Form S-1.
10. Material Contracts
10.1 Services Agreement, dated September 27, 1996, by and between Abercrombie & Fitch Co. and The Limited.
10.2 Shared Facilities Agreement, dated September 27, 1996, by and between The Limited London-Paris-New York, Inc. and Abercrombie & Fitch Co.
10.3 Shared Facilities Agreement, dated September 27, 1996, by and between Express, Inc. and Abercrombie & Fitch Co.
10.4 Tax Sharing Agreement, dated September 27, 1996, by and between Abercrombie & Fitch Co. and The Limited.
10.5 Corporate Agreement, dated October 1, 1996, by and between Abercrombie & Fitch Co. and The Limited.
10.6 Abercrombie & Fitch Co. Incentive Compensation Plan.
10.7 Abercrombie & Fitch Co. 1996 Stock Option and Performance Incentive Plan incorporated by reference to Exhibit 4.3 to the Company's Registration Statement of Form S-8 (File No. 333-15945).
10.8 Abercrombie & Fitch Co. 1996 Stock Plan for Non-Associate Directors incorporated by reference to Exhibit 4.3 to the Company's Registration Statement on Form S-8 (File No. 333-15941).
15. Letter re: Unaudited Interim Financial Information to Securities and Exchange Commission re: Incorporation of Report of Independent Accountants
27. Financial Data Schedule
None.
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.
ABERCROMBIE & FITCH CO.
(Registrant)
By /s/ Seth R. Johnson
________________________
Seth R. Johnson,
Vice President and Chief
Financial Officer*
Date: December 13, 1996
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* Mr. Johnson is the principal financial officer and has been duly authorized to sign on behalf of the Registrant.
Exhibit No. Document
- ----------- ----------------------------------------------------------------
3.1 Amended and Restated Certificate of Incorporation of the Company.
3.2 Bylaws of the Company.
10.1 Services Agreement, dated as of September 27, 1996, by and between
Abercrombie & Fitch Co. and The Limited.
10.2 Shared Facilities Agreement, dated September 27, 1996, by and
between The Limited London-Paris-New York, Inc. and Abercrombie
& Fitch Co.
10.3 Shared Facilities Agreement, dated September 27, 1996, by and
between Express, Inc. and Abercrombie & Fitch Co.
10.4 Tax Sharing Agreement, dated September 27, 1996, by and between
Abercrombie & Fitch Co. and The Limited.
10.5 Corporate Agreement, dated October 1, 1996, by and between
Abercrombie & Fitch Co. and The Limited.
10.6 Abercrombie & Fitch Co. Incentive Compensation Plan.
15 Letter re: Unaudited Interim Financial Information to Securities
and Exchange Commission re: Incorporation of Independent
Accountants' Report.
27 Financial Data Schedule.
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EXHIBIT 3.1
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
ABERCROMBIE & FITCH CO.
* * * * *
Abercrombie & Fitch Co. (the "Corporation"), a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware does hereby amend the Certificate of Incorporation of the Corporation, which was originally filed on June 26, 1996, under the name Abercrombie & Fitch, Inc.
ABERCROMBIE & FITCH CO.
(b) The Board of Directors is expressly authorized to provide for the issue of all or any shares of the Common Stock and the Preferred Stock, to determine the number of shares of each class and to fix for each class of Common Stock and for any series of Preferred Stock such voting powers, full or limited, or no voting powers, and such designations, preferences and relative, participating, optional or other special rights, and such qualifications, limitations or restrictions thereof, as shall be stated and expressed in the resolution or resolutions adopted by the Board of Directors or a duly authorized committee thereof providing for the issue of such series and as may be permitted by Delaware Law.
(c) The number of authorized shares of any class or classes of stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of a majority of the Common Stock of the Corporation irrespective of the provisions of Section 242(b)(2) of Delaware Law.
below without the consent of the holders of any outstanding shares of Common Stock or Preferred Stock.
(1) Except as otherwise set forth below in this ARTICLE FOURTH, the powers, preferences and relative participating, optional or other special rights and qualifications, limitations or restrictions of the Class A Common Stock and Class B Common Stock shall be identical in all respects.
(2) Subject to the rights of the holders of Preferred Stock, and subject to any other provisions of this Amended and Restated Certificate of Incorporation, holders of Class A Common Stock and Class B Common Stock shall be entitled to receive such dividends and other distributions in cash, stock of any corporation (other than Common Stock of the Corporation) or property of the Corporation as may be declared thereon by the Board of Directors from time to time out of assets or funds of the Corporation legally available therefor and shall share equally on a per share basis in all such dividends and other distributions. In the case of dividends or other distributions payable in Common Stock, including distributions pursuant to stock splits or divisions of Common Stock of the Corporation, only shares of Class A Common Stock shall be paid or distributed with respect to Class A Common Stock and only shares of Class B Common Stock shall be paid or distributed with respect to Class B Common Stock. The number of shares of Class A Common Stock and Class B Common Stock so distributed shall be equal in number on a per share basis. Neither the shares of Class A Common Stock nor the shares of Class B Common Stock may be reclassified, subdivided or combined unless such reclassification, subdivision or combination occurs simultaneously and in the same proportion for each class.
(3)(A) At every meeting of the stockholders of the Corporation every holder of Class A Common
Stock shall be entitled to one vote in person or by proxy for each share of Class A Common Stock standing in his or her name on the transfer books of the Corporation, and every holder of Class B Common Stock shall be entitled to three votes in person or by proxy for each share of Class B Common Stock standing in his or her name on the transfer books of the Corporation in connection with the election of directors and all other matters submitted to a vote of stockholders;
(B) Every reference in this Amended and Restated Certificate of Incorporation to a majority or other proportion of shares of Common Stock, Class A Common Stock or Class B Common Stock, shall refer to such majority or other proportion of the votes to which such shares of Common Stock, Class A Common Stock or Class B Common Stock are entitled.
(4) In the event of any dissolution, liquidation or winding up of the affairs of the Corporation, whether voluntary or involuntary, after payment in full of the amounts required to be paid to the holders of Preferred Stock, the remaining assets and funds of the Corporation shall be distributed pro rata to the holders of Class A Common Stock and Class B Common Stock. For the purposes of this paragraph (d)(4), the voluntary sale, conveyance, lease, exchange or transfer (for cash, shares of stock, securities or other consideration) of all or substantially all of the assets of the Corporation or a consolidation or merger of the Corporation with one or more other corporations (whether or not the
Corporation is the corporation surviving such consolidation or merger) shall not be deemed to be a liquidation, dissolution or winding up, voluntary or involuntary.
(5)(A) Prior to the earliest to occur of the date on which shares of Class B Common Stock are issued to stockholders of The Limited, Inc. or its successors ("The Limited") in a Tax-Free Spin-Off (as defined in paragraph (d)(5)(B)) and the date on which the number of shares of Class B Common Stock outstanding is less than 60% of the aggregate number of shares of Common Stock outstanding and a Tax-Free Spin-Off has not occurred, each share of Class B Common Stock is convertible at the option of the holder thereof into one share of Class A Common Stock. At the time of a voluntary conversion, the holder of shares of Class B Common Stock shall deliver to the office of the Corporation or any transfer agent for the Class B Common Stock (i) the certificate or certificates representing the shares of Class B Common Stock to be converted, duly endorsed in blank or accompanied by proper instruments of transfer, and (ii) written notice to the Corporation stating that such holder elects to convert such share or shares and stating the name and address in which each certificate for shares of Class A Common Stock issued upon such conversion is to be issued. To the extent permitted by law and subject to the taking of any necessary action or making any filing contemplated by paragraph (d)(5)(E), such voluntary conversion shall be deemed to have been effected at the close of business on the date when such delivery is made to the Corporation or such transfer agent of the shares to be converted, and the person exercising such voluntary conversion shall be deemed to be the holder of record of the number of shares of Class A Common Stock issuable upon such conversion at such time. The Corporation shall promptly deliver certificates evidencing the appropriate number of shares of Class A Common Stock to such person.
(B) Each share of Class B Common Stock shall automatically convert into one share of Class A Common Stock upon the transfer of such share if, after such transfer, such share is not beneficially owned by The Limited, unless such
transfer is effected in connection with a transfer of Class B Common Stock to stockholders of The Limited as a dividend intended to be on a tax-free basis under the Internal Revenue Code of 1986, as amended from time to time (the "Code"), (a "Tax-Free Spin-Off"). For purposes of this paragraph (d)(5), the term "beneficially owned" with respect to shares of Class B Common Stock means ownership by a person who, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise controls the voting power (which includes the power to vote or to direct the voting of) of such Class B Common Stock. In the event of a Tax-Free Spin-Off, shares of Class B Common Stock shall automatically convert into shares of Class A Common Stock on the fifth anniversary of the date on which shares of Class B Common Stock are first transferred to stockholders of The Limited in a Tax-Free Spin-Off unless, prior to such Tax-Free Spin-Off, The Limited delivers to the Corporation an opinion of The Limited's counsel (which counsel shall be reasonably satisfactory to the Corporation) to the effect that such conversion would preclude The Limited from obtaining a favorable ruling from the Internal Revenue Service that the distribution would be a Tax-Free Spin-Off under the Code. If such an opinion is received, approval of such conversion shall be submitted to a vote of the holders of the Common Stock as soon as practicable after the fifth anniversary of the Tax-Free Spin-Off unless The Limited delivers to the Corporation an opinion of The Limited's counsel (which counsel shall be reasonably satisfactory to the Corporation) prior to such anniversary to the effect that such vote would adversely affect the status of the Tax-Free Spin-Off. At the meeting of stockholders called for such purpose, every holder of Common Stock shall be entitled to one vote in person or by proxy for each share of Common Stock standing in his or her name on the transfer books of the Corporation. Approval of such conversion shall require the approval of a majority of the votes entitled to be cast by the holders of the Class A Common Stock and Class B Common Stock present and voting, voting together as a single class, and the holders of the Class B Common Stock shall not be entitled to a separate class vote. Such conversion shall be effective on
the date on which such approval is given at a meeting of stockholders called for such purpose.
Each share of Class B Common Stock shall automatically convert into one share of Class A Common Stock on the date on which the number of shares of Class B Common Stock outstanding is less than 60% of the aggregate number of shares of Common Stock outstanding and a Tax-Free Spin-Off has not occurred.
The Corporation shall at all times reserve and keep available, free from
preemptive rights, out of the aggregate of its authorized but unissued Common
Stock and its issued Common Stock held in its treasury for the purpose of
effecting any conversion of the Class B Common Stock pursuant to this paragraph
(d)(5)(B), the full number of shares of Class A Common Stock then deliverable
upon any such conversion of all outstanding shares of Class B Common Stock.
(i) the automatic conversion date;
(ii) the number of outstanding shares of Class B Common Stock that are to be converted automatically;
(iii) the place or places where certificates for such shares are to be surrendered for conversion; and
(iv) that no dividends will be declared on the shares of Class B Common Stock converted after such conversion date.
As promptly as practicable after the time of conversion, upon the delivery to the Corporation of certificates formerly representing shares of Class B Common Stock, the Corporation shall deliver or cause to be delivered, to or upon the written order of the record holder of the surrendered certificates formerly representing shares of Class B Common Stock, a certificate or certificates representing the number of fully paid and nonassessable shares of Class A Common Stock into which the shares of Class B Common Stock formerly represented by such certificates have been converted in accordance with the provisions of this paragraph (d)(5)(B).
(C) Subject to the provisions of this paragraph (d)(5)(C), from and after the date on which shares of Class B Common Stock are transferred to the stockholders of The Limited in a Tax-Free Spin-Off, (i) each share of Class A Common Stock shall be convertible at the option of the holder thereof into one share of Class B Common Stock on the date on which any person (other than The Limited or any of its consolidated subsidiaries) or any group of persons (other than a group composed of The Limited and/or one or more of its consolidated subsidiaries) agreeing to act together for the purpose of acquiring, holding, voting or disposing of shares of Class B Common Stock, shall make an offer, which the Board of
Directors determines in its sole discretion to be "bona fide", to holders of
Class B Common Stock to purchase 5% or more of the issued and outstanding shares
of such Class B Common Stock for cash or a combination of cash and other
securities or property and (ii) each share of Class B Common Stock shall be
convertible at the option of the holder thereof into one share of Class A Common
Stock on the date on which any person (other than The Limited or any of its
consolidated subsidiaries) or any group of persons (other than a group composed
of The Limited and/or one or more of its consolidated subsidiaries) agreeing to
act together for the purpose of acquiring, holding, voting or disposing of
shares of Class A Common Stock, shall make an offer, which the Board of
Directors determines in its sole discretion to be "bona fide", to holders of
Class A Common Stock to purchase 5% or more of the issued and outstanding shares
of Class A Common Stock for cash or a combination of cash and other securities
or property. The Corporation will provide notice in writing to all holders of
Common Stock of any offer referred to in the foregoing clauses (i) and (ii).
Such notice shall be provided by mailing notice of such offer, first class
postage prepaid, to each holder of the class of Common Stock then entitled to be
converted, at such holder's address as it appears on the transfer books of the
Corporation. The Common Stock shall be convertible under this paragraph
(d)(5)(C) as long as such offer shall remain in effect and shall not be
terminated, rescinded or completed, as determined by the Board of Directors in
its sole discretion. Notwithstanding the foregoing, each share of Common Stock
converted into a share of the other class of Common Stock pursuant to this
paragraph (d)(5)(C) and not purchased pursuant to such offer prior to the
termination, rescission or completion thereof, as determined by the Board of
Directors in its sole discretion, shall automatically be reconverted into a
share of Common Stock of the class from which it was converted pursuant to this
paragraph (d)(5)(C) upon the earliest to occur of the termination, rescission or
completion of such offer, as so determined by the Board of Directors.
Any conversion pursuant to this paragraph (d)(5)(C) may be effected at the office of the Corporation or any transfer agent for the Common Stock and at such other place or places, if any, as the Board of Directors may designate. Upon conversion pursuant to this paragraph (d)(5)(C), the Corporation shall make no payment or adjustment on account of dividends accrued or in arrears on Common Stock surrendered for conversion or on account of any dividends on Common Stock issuable on such conversion. Before any holder of Common Stock shall be entitled to convert the same into any other class of stock pursuant to this paragraph (d)(5)(C), such holder shall surrender the certificate or certificates for such Common Stock at the office of said transfer agent (or other place as provided above). Such certificate(s), if the Corporation shall so request, shall be duly endorsed to the Corporation or in blank or accompanied by proper instruments of transfer to the Corporation or in blank (such endorsements or instruments of transfer to be in form satisfactory to the Corporation). Such certificate(s) shall be accompanied by a written notice to the Corporation at said office stating that such holder elects to convert all or a specified number of Common Stock represented by such certificate(s) in accordance with this paragraph (d)(5)(C) and stating the name(s) in which such holder desires the certificate(s) representing the stock to be issued. Such written notice shall also state the name(s) of the person(s) making the offer entitling such holder to convert such Common Stock. The Corporation will, as soon as practicable after deposit of the certificate(s) for the class of Common Stock to be converted, accompanied by the written notice and the statements prescribed above, issue and deliver at the office of said transfer agent (or other place as provided above) to the person for whose account such Common Stock was so surrendered, or to such person's nominee or nominees, a certificate or certificates for the number of shares of such other class of Common Stock to which such holder shall be entitled as aforesaid.
Any certificate of Common Stock issued in connection with a conversion pursuant to this paragraph (d)(5)(C) shall bear a legend substantially to the effect of the last sentence
of the first subparagraph of this paragraph (d)(5)(C) until such certificate shall be transferred to the person(s) making the offer entitling a holder of Common Stock to convert such Common Stock pursuant to this paragraph (d)(5)(C), or the nominee or nominees of such person(s).
Any conversion pursuant to this paragraph (d)(5)(C) shall be deemed to have been made as of the date of surrender of the Common Stock to be converted; and the person or persons entitled to receive the Common Stock issuable upon conversion shall be treated for all purposes as the record holder or holders of such Common Stock on such date.
(E) Concurrently with any conversion of one class of Common Stock into the other class of Common Stock effected pursuant to paragraphs (d)(5)(A) and (B) above and, in the case of a conversion pursuant to paragraph (d)(5)(C) above, concurrently with the purchase of shares so converted, each share of a class of Common Stock that is converted (i) shall be retired and canceled and shall not be reissued and (ii) shall proportionally decrease the number of shares of Common Stock of such class designated hereby. The Secretary of the Corporation shall be, and hereby is, authorized and directed to file with the Secretary of State of the State of Delaware one or more Certificates of Decrease of Designated Shares
to record any such decrease in designated shares of Common Stock. No undesignated shares of Common Stock shall be designated shares of Class B Common Stock following an automatic conversion of shares of Class B Common Stock pursuant to paragraph (d)(5)(B) above.
(F) Immediately upon the effectiveness of this Amended and Restated Certificate of Incorporation each share of common stock of the Corporation, par value $.10 per share, that is issued and outstanding immediately prior to such effectiveness, shall be changed into and reclassified as 43,000 shares of Class B Common Stock.
(1) the distinctive designation of such series and the number of shares which shall constitute such series, which number may be increased (except where otherwise provided by the Board of Directors in creating such series) or decreased (but not below the number of shares thereof then outstanding) from time to time by like action of the Board of Directors;
(2) the annual rate of dividends payable on shares of such series, the conditions upon which such dividends shall be payable and the date from which dividends shall be cumulative in the event the Board of Directors determines that dividends shall be cumulative;
(3) whether such series shall have voting rights, in addition to the voting rights provided by law and, if so, the terms of such voting rights;
(4) whether such series shall have conversion privileges and, if so, the terms and conditions of such conversion, including, but not limited to, provision for adjustment of the conversion rate upon such events and in such manner as the Board of Directors shall determine;
(5) whether or not the shares of such series shall be redeemable and, if so, the terms and conditions of such redemption, including the date or dates upon or after which they shall be redeemable, and the amount per share payable in case of redemption, which amount may vary under different conditions and at different redemption dates;
(6) whether such series shall have a sinking fund for the redemption or purchase of shares of that series and, if so, the terms and amount of such sinking fund;
(7) the rights of the shares of such series in the event of voluntary or involuntary liquidation, dissolution or winding up of the Corporation, and the relative rights of priority, if any, of payment of shares of that series; and
(8) any other relative rights, preferences and limitations of such series.
or appertain any warrants or rights entitling the holders thereof to purchase or subscribe for shares.
calendar year 1996, and the directors first elected to Class C shall serve for a term ending on the date of the third annual meeting next following the end of the calendar year 1996. Notwithstanding the foregoing formula provisions, in the event that, as a result of any change in the authorized number of directors, the number of directors in any class would differ from the number allocated to that class under the formula provided in this ARTICLE SIXTH immediately prior to such change, the following rules shall govern:
(a) each director then serving as such shall nevertheless continue as a director of the class of which such director is a member until the expiration of his current term, or his prior death, resignation or removal;
(b) at each subsequent election of directors, even if the number of directors in the class whose term of office then expires is less than the number then allocated to that class under said formula, the number of directors then elected for membership in that class shall not be greater than the number of directors in that class whose term of office then expires, unless and to the extent that the aggregate number of directors then elected plus the number of directors in all classes then duly continuing in office does not exceed the then authorized number of directors of the Corporation;
(c) at each subsequent election of directors, if the number of directors in the class whose term of office then expires exceeds the number then allocated to that class under said formula, the Board of Directors shall designate one or more of the directorships then being elected as directors of another class or classes in which the number of directors then serving is less than the number then allocated to such other class or classes under said formula;
(d) in the event of the death, resignation or removal of any director who is a member of a class in which the number of directors serving immediately preceding the creation of such vacancy exceeded the number then allocated to that class under said formula, the Board of Directors shall designate the vacancy thus created as a vacancy in another class in which the number of directors then serving is less than the
number then allocated to such other class under said formula;
(e) In the event of any increase in the authorized number of directors, the newly created directorships resulting from such increase shall be apportioned by the Board of Directors to such class or classes as shall, so far as possible, bring the composition of each of the classes into conformity with the formula in this ARTICLE SIXTH, as it applies to the number of directors authorized immediately following such increase; and
(f) designation of directorships or vacancies into other classes and apportionments of newly created directorships to classes by the Board of Directors under the foregoing items (c), (d) and (e) shall, so far as possible, be effected so that the class whose term of office is due to expire next following such designation or apportionment shall contain the full number of directors then allocated to said class under said formula.
Notwithstanding any of the foregoing provisions of this ARTICLE SIXTH, each director shall serve until his successor is elected and qualified or until his death, resignation or removal.
such Preferred Stock or series, voting as a class pursuant to such provisions or elected to fill any vacancies resulting from the death, resignation or removal of directors so elected by the holders of such Preferred Stock or series, shall forthwith terminate and the authorized number of directors shall be reduced accordingly.
known address at least 10 days prior to the date of the stockholders' meeting; provided further, that directors who shall have been elected by the holders of a series or class of Preferred Stock, voting separately as a class, shall be removed only pursuant to the provisions establishing the rights of such series or class to elect such directors.
involving the Corporation that would have the effect of increasing the voting power of any Interested Person with respect to Voting Stock of the Corporation, and (g) any agreement, contract or other arrangement providing for any of the transactions described in this definition of Business Combination.
of the Corporation and its subsidiaries taken as a whole as of the end of its most recent fiscal year ended prior to the time the determination is being made.
Section 1. In anticipation that the Corporation will cease to be a wholly
owned subsidiary of The Limited, but that The Limited will remain a stockholder
of the Corporation, and in anticipation that the Corporation and The Limited may
engage in the same or similar activities or lines of business and have an
interest in the same areas of corporate opportunities, and in recognition of (i)
the benefits to be derived by the Corporation through its continued contractual,
corporate and business relations with The Limited (including service of officers
and directors of The Limited as officers and directors of the Corporation) and
(ii) the difficulties attendant to any director, who desires and endeavors fully
to satisfy such director's fiduciary duties, in determining the full scope of
such duties in any particular situation, the provisions of this ARTICLE TWELFTH
are set forth to regulate, define and guide the conduct of certain affairs of
the Corporation as they may involve The Limited and its officers and directors,
and the powers, rights, duties and liabilities of the Corporation and its
officers, directors and stockholders in connection therewith.
Section 2. Except as The Limited may otherwise agree in writing,
(a) The Limited shall not have a duty to refrain from engaging directly or indirectly in the same or similar business activities or lines of business as the Corporation, and
(b) neither The Limited nor any officer or director thereof shall be liable to the Corporation or its stockholders for breach of any fiduciary duty by reason of any such activities of The Limited or of such person's participation therein.
In the event that The Limited acquires knowledge of a potential transaction or matter that may be a corporate opportunity for both The Limited and the Corporation, The Limited shall have no duty to communicate or offer such corporate opportunity to the Corporation and shall not be liable to the Corporation or its stockholders for breach of any fiduciary duty as a stockholder of the Corporation or controlling person of a stockholder by reason of the fact that The Limited pursues or acquires such corporate opportunity for itself, directs such corporate opportunity to another person or entity, or does not communicate information regarding, or offer, such corporate opportunity to the Corporation.
Section 3. In the event that a director, officer or employee of the Corporation who is also a director, officer or employee of The Limited acquires knowledge of a potential transaction or matter that may be a corporate opportunity for the Corporation and The Limited (whether such potential transaction or matter is proposed by a third-party or is conceived of by such director, officer or employee of the Corporation), such director, officer or employee shall be entitled to offer such corporate opportunity to the Corporation or The Limited as such director, officer or employee deems appropriate under the circumstances in his sole discretion, and no such director, officer or employee shall be liable to the Corporation or its stockholders for breach of any fiduciary duty or duty of loyalty or failure to act in (or not opposed to) the best interests of the Corporation or the derivation of any improper personal benefit by reason of the fact that (i) such director, officer or employee offered such corporate opportunity to The Limited (rather than the Corporation) or did not communicate information
regarding such corporate opportunity to the Corporation or (ii) The Limited pursues or acquires such corporate opportunity for itself or directs such corporate opportunity to another person or does not communicate information regarding such corporate opportunity to the Corporation.
Section 4. Any person or entity purchasing or otherwise acquiring any interest in any shares of capital stock of the Corporation shall be deemed to have notice of and to have consented to the provisions of this ARTICLE TWELFTH.
Section 5. For purposes of this ARTICLE TWELFTH and ARTICLE THIRTEENTH
only, (i) the term "Corporation" shall mean the Corporation and all
corporations, partnerships, joint ventures, associations and other entities in
which the Corporation beneficially owns (directly or indirectly) fifty percent
or more of the outstanding voting stock, voting power or similar voting
interests, and (ii) the term "The Limited" shall mean The Limited and all
corporations, partnerships, joint ventures, associations and other entities
(other than the Corporation, defined in accordance with clause (i) of this
Section 5) in which The Limited beneficially owns (directly or indirectly) fifty
percent or more of the outstanding voting stock, voting power or similar voting
interests.
Section 6. Notwithstanding anything in this Certificate of Incorporation to the contrary, the foregoing provisions of this ARTICLE TWELFTH shall expire on the date that The Limited ceases to own beneficially Common Stock representing at least 20% of the number of outstanding shares of Common Stock of the Corporation and no person who is a director or officer of the Corporation is also a director or officer of The Limited. Neither the alteration, amendment, change or repeal of any provision of this ARTICLE TWELFTH nor the adoption of any provision of this Amended and Restated Certificate of Incorporation inconsistent with any provision of this ARTICLE TWELFTH shall eliminate or reduce the effect of this ARTICLE TWELFTH in respect of any matter occurring, or any cause of action, suit or claim that, but for this ARTICLE TWELFTH, would accrue or arise, prior to such alteration, amendment, repeal or adoption.
Section 7. The provisions of this ARTICLE TWELFTH are in addition to the provisions of ARTICLE SIXTH, Section 5, and ARTICLE THIRTEENTH.
Section 1. No contract, agreement, arrangement or transaction (or any
amendment, modification or termination thereof) between the Corporation and The
Limited or any Related Entity (as defined below) or between the Corporation and
one or more of the directors or officers of the Corporation, The Limited or any
Related Entity, shall be void or voidable solely for the reason that The
Limited, any Related Entity or any one or more of the officers or directors of
the Corporation, The Limited or any Related Entity are parties thereto, or
solely because any such directors or officers are present at or participate in
the meeting of the Board of Directors or committee thereof which authorizes the
contract, agreement, arrangement, transaction, amendment, modification or
termination or solely because his or their votes are counted for such purpose,
but any such contract, agreement, arrangement or transaction (or any amendment,
modification or termination thereof) shall be governed by the provisions of this
Amended and Restated Certificate of Incorporation, the Corporation's Bylaws,
Delaware Law and other applicable law. For purposes of this ARTICLE THIRTEENTH,
(i) the term "Related Entities" means one or more directors of this Corporation,
or one or more corporations, partnerships, associations or other organizations
in which one or more of its directors have a direct or indirect financial
interest and (ii) the terms the "Corporation" and "The Limited" have the
meanings set forth in ARTICLE TWELFTH, Section 5.
Section 2. Directors of the Corporation who are also directors or officers of The Limited or any Related Entity may be counted in determining the presence of a quorum at a meeting of the Board of Directors or of a committee that authorizes or approves any such contract, agreement, arrangement or transaction (or amendment, modification or termination thereof). Outstanding shares of Common Stock owned by The Limited and any Related Entities may be counted in determining the presence of a quorum at a meeting of stockholders that authorizes or approves any such contract, agreement, arrangement or transaction (or amendment, modification or termination thereof).
Section 3. Neither The Limited nor any officer or director thereof or Related Entity shall be liable to the Corporation or its stockholders for breach of any fiduciary duty or duty of loyalty or failure to act in (or not opposed to) the best interests of the Corporation or the derivation of any improper personal benefit by reason of the fact that The Limited or an officer of director thereof or such Related Entity in good faith takes any action or exercises any rights or gives or withholds any consent in connection with any agreement or contract between The Limited or such Related Entity and the Corporation. No vote cast or other action taken by any person who is an officer, director or other representative of The Limited or such Related Entity, which vote is cast or action is taken by such person in his capacity as a director of this Corporation, shall constitute an action of or the exercise of a right by or a consent of The Limited or such Related Entity for the purpose of any such agreement or contract.
Section 4. Any person or entity purchasing or otherwise acquiring any interest in any shares of capital stock of the Corporation shall be deemed to have notice of and to have consented to the provisions of this ARTICLE THIRTEENTH.
Section 5. For purposes of this ARTICLE THIRTEENTH, any contract, agreement, arrangement or transaction with any corporation, partnership, joint venture, association or other entity in which the Corporation beneficially owns (directly or indirectly) fifty percent or more of the outstanding voting stock, voting power or similar voting interests, or with any officer or director thereof, shall be deemed to be a contract, agreement, arrangement or transaction with the Corporation.
Section 6. Neither the alteration, amendment, change or repeal of any provision of this ARTICLE THIRTEENTH nor the adoption of any provision inconsistent with any provision of this ARTICLE THIRTEENTH shall eliminate or reduce the effect of this ARTICLE THIRTEENTH in respect of any matter occurring, or any cause of action, suit or claim that, but for this ARTICLE THIRTEENTH, would accrue or arise, prior to such alteration, amendment, change, repeal or adoption.
Section 7. The provisions of this ARTICLE THIRTEENTH are in addition to the provisions of ARTICLE SIXTH, Section 5, and ARTICLE TWELFTH.
IN WITNESS WHEREOF, this Amended and Restated Certificate of Incorporation, having been duly adopted by the written consent of the sole stockholder of the Corporation in accordance with the provisions of Sections 228, 242 and 245 of the General Corporation Law of the State of Delaware, has been executed this 27th day of August 1996.
ABERCROMBIE & FITCH CO.
By: /s/ Samuel P. Fried
-----------------------
Name: Samuel P. Fried
Title: Secretary
|
EXHIBIT 3.2
BYLAWS
OF
ABERCROMBIE & FITCH CO.
Adopted September 20, 1996
ARTICLE I
STOCKHOLDERS
mailed to each stockholder of record entitled to vote or entitled to notice, not more than 60 days nor less than 10 days before any such meeting. If mailed, such notice shall be directed to a stockholder at his or her address as the same appears on the records of the corporation. If a meeting is adjourned to another time or place and such adjournment is for 30 days or less and no new record date is fixed for the adjourned meeting, no further notice as to such adjourned meeting need be given if the time and place to which it is adjourned are fixed and announced at such meeting. In the event of a transfer of shares after notice has been given and prior to the holding of the meeting, it shall not be necessary to serve notice on the transferee. Such notice shall specify the place where the stockholders list will be open for examination prior to the meeting if required by Section 1.08 hereof. If the adjournment is for more than 30 days, or after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.
(b) A written waiver of any such notice signed by the person entitled thereto, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends the meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice.
(ii) in any case involving the determination of stockholders for any purpose other than notice of or voting at a meeting of stockholders, the record date for determining stockholders for such purpose shall be the close of business on the day on which the Board of Directors shall adopt the resolution relating thereto. Determination of stockholders entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of such meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.
without notice other than by announcement at the meeting of the time and place of the adjourned meeting. At any such adjourned meeting at which a quorum is present any business may be transacted which might have been transacted at the meeting as originally called.
Nomination of persons for election to the Board of Directors may be made by
the Board of Directors or any committee designated by the Board of Directors or
by any stockholder entitled to vote for the election of directors at the
applicable meeting of stockholders. However, nominations other than those made
by the Board of Directors or its designated committee must comply with the
procedures set forth in this Section 1.09, and no person shall be eligible for
election as a director unless nominated in accordance with the terms of this
Section 1.09.
A stockholder may nominate a person or persons for election to the Board of Directors by giving written notice to the secretary of the corporation in accordance with the procedures set forth above. In addition to the timeliness requirements set forth above for notice to the corporation by a stockholder of business to be submitted at an annual
meeting of stockholders, with respect to any special meeting of stockholders called for the election of directors, written notice must be delivered in the manner specified above and not later than the close of business on the seventh day following the date on which notice of such meeting is first given to stockholders.
The secretary of the corporation shall deliver any stockholder proposals and nominations received in a timely manner for review by the Board of Directors or a committee designated by the Board of Directors.
A stockholder's notice to submit business to an annual meeting of
stockholders shall set forth (i) the name and address of the stockholder, (ii)
the class and number of shares of stock beneficially owned by such stockholder,
(iii) the name in which such shares are registered on the stock transfer books
of the corporation, (iv) a representation that the stockholder intends to appear
at the meeting in person or by proxy to submit the business specified in such
notice, (v) any material interest of the stockholder in the business to be
submitted and (vi) a brief description of the business desired to be submitted
to the annual meeting, including the complete text of any resolutions to be
presented at the annual meeting, and the reasons for conducting such business at
the annual meeting. In addition, the stockholder making such proposal shall
promptly provide any other information reasonably requested by the corporation.
In addition to the information required above to be given by a stockholder
who intends to submit business to a meeting of stockholders, if the business to
be submitted is the nomination of a person or persons for election to the Board
of Directors then such stockholder's notice must also set forth, as to each
person whom the stockholder proposes to nominate for election as a director, (a)
the name, age, business address and, if known, residence address of such person,
(b) the principal occupation or employment of such person, (c) the class and
number of shares of stock of the corporation which are beneficially owned by
such person, (d) any other information relating to such person that is required
to be disclosed in solicitations of proxies for election of directors or is
otherwise required by the rules and regulations of the Securities and Exchange
Commission promulgated under the Securities Exchange Act of 1934, as amended,
(e) the written consent of such person to be named in the proxy statement as a
nominee and to serve as a director if elected and (f) a description of all
arrangements or understandings between such stockholder and each nominee and any
other person or persons (naming such
person or persons) pursuant to which the nomination or nominations are to be made by such stockholder.
Any person nominated for election as director by the Board of Directors or any committee designated by the Board of Directors shall, upon the request of the Board of Directors or such committee, furnish to the secretary of the corporation all such information pertaining to such person that is required to be set forth in a stockholder's notice of nomination.
Notwithstanding the foregoing provisions of this Section 1.09, a stockholder who seeks to have any proposal included in the corporation's proxy statement shall comply with the requirements of Regulation 14A under the Securities Exchange Act of 1934, as amended.
(b) Shares of its own stock belonging to the corporation or to another corporation, if a majority of the shares entitled to vote in the election of directors in such other corporation is held, directly or indirectly, by the corporation, shall neither be entitled to vote nor be counted for quorum purposes.
(c) Any such voting rights may be exercised by the stockholder entitled thereto in person or by his proxy appointed by an instrument in writing, subscribed by such stockholder or by his attorney thereunto authorized and delivered to the secretary of the meeting in sufficient time to permit the necessary examination and tabulation thereof before the vote is taken; provided, however, that no proxy shall be valid after the expiration of three years after the date of its execution, unless the stockholder executing it shall have specified therein the length of time it is to continue in force. At any meeting of the stockholders all matters, except as otherwise provided in the certificate of incorporation, in these bylaws or by law, shall be decided by the vote of a majority in voting interest of the stockholders present in person or by proxy and voting thereon, a quorum being present. The vote at any meeting of the stockholders on any question need not be by ballot,
unless so directed by the chairman of the meeting or required by the certificate of incorporation. On a vote by ballot each ballot shall be signed by the stockholder voting, or by his proxy, if there be such proxy, and it shall state the number of shares voted.
ARTICLE II
BOARD OF DIRECTORS
shall not be less than four nor more than nine, the exact number of directors to be such number as may be set from time to time within the limits set forth above by resolution adopted by affirmative vote of a majority of the whole Board of Directors. As used in these Bylaws, the term "whole Board" means the total number of directors which the corporation would have if there were no vacancies.
2.04.1. Nominations for the election of directors may be made by the Board of Directors or by any stockholder entitled to vote for the election of directors.
2.04.2. Such nominations, if not made by the Board of Directors, shall be made by notice in writing, delivered or mailed by first class United States mail, postage prepaid, to the secretary of the corporation not less than 14 days nor more than 50 days prior to any meeting of the stockholders called for the election of directors; provided, however, that if less than 21 days' notice of the meeting is given to stockholders, such written notice shall be delivered or mailed, as prescribed, to the secretary of the corporation not later than the close of the seventh day following the day on which notice of the meeting was mailed to stockholders. Each such notice shall set forth (i) the name, age, business address and, if known, residence address of each nominee proposed in such notice, (ii) the principal occupation or employment of each such nominee, and (iii) the number of shares of stock of the corporation which are beneficially owned by each such nominee.
2.04.3. Notice of nominations which are proposed by the Board of Directors shall be given on behalf of the Board by the chairman of the meeting.
2.04.4. The chairman of the meeting may, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the foregoing procedure, and if the chairman should so determine, the chairman shall so declare to the meeting and the defective nomination shall be disregarded.
corporation. Such resignation shall take effect at the time specified therein, and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.
transaction of business. Except as otherwise required by law, the certificate of incorporation, or these bylaws, the vote of a majority of the directors present at any meeting at which a quorum is present shall be the act of the Board of Directors. At all meetings of the Board of Directors, each director shall have one vote.
ARTICLE III
OFFICERS
ARTICLE IV
DUTIES OF THE OFFICERS
specially authorized by the Board of Directors or when required or deemed necessary or advisable by him in the ordinary conduct of the corporation's normal business, except in cases where the signing and execution thereof shall be expressly delegated by these bylaws to some other officer or agent of the corporation or shall be required by law or otherwise to be signed or executed by some other officer or agent, and the president may cause the seal of the corporation, if any, to be affixed to any instrument requiring the same.
ARTICLE V
INDEMNIFICATION OF DIRECTORS AND OFFICERS
(b) The corporation may, by action of its Board of Directors, provide indemnification to such of the employees and agents of the corporation to such extent and to such effect as the Board of Directors shall determine to be appropriate and authorized by the laws of Delaware as they may exist from time to time.
by such person of his duties to the corporation also imposes duties on, or otherwise involves services by, such person to the plan or participants or beneficiaries of the plan; excise taxes assessed on a person with respect to an employee benefit plan pursuant to said Act of Congress shall be deemed "fines"; and action taken or omitted by a person with respect to an employee benefit plan in the performance of such person's duties for a purpose reasonably believed by such person to be in the interest of the participants and beneficiaries of the plan shall be deemed to be for a purpose which is not opposed to the best interests of the corporation.
ARTICLE VI
DEPOSITORIES, CONTRACTS AND OTHER INSTRUMENTS
for the funds of the corporation are each authorized to designate depositories for the funds of the corporation deposited in its name and the signatories and conditions with respect thereto in each case, and from time to time, to change such depositories, signatories and conditions, with the same force and effect as if each such depository, the signatories and conditions with respect thereto and changes therein had been specifically designated or authorized by the Board of Directors; and each depository designated by the Board of Directors or by the chairman of the board, the vice chairman of the board, the president, the treasurer, or any such vice-president of the corporation, shall be entitled to rely upon the certificate of the secretary or any assistant secretary of the corporation setting forth the fact of such designation and of the appointment of the officers of the corporation or of other persons who are to be signatories with respect to the withdrawal of funds deposited with such depository, or from time to time the fact of any change in any depository or in the signatories with respect thereto.
ARTICLE VII
SHARES AND THEIR TRANSFER
shall be numbered in the order in which they shall be issued and shall be signed in the name of the corporation by the chairman of the board or the vice chairman of the board, or the president or a vice president, and by the secretary or an assistant secretary or the treasurer or an assistant treasurer. A record shall be kept of the name of the person, firm, or corporation owning the shares represented by each such certificate and the number of shares represented thereby, the date thereof, and in case of cancellation, the date of cancellation. Every certificate surrendered to the corporation for exchange or transfer shall be cancelled and no new certificate or certificates shall be issued in exchange for any existing certificates until such existing certificates shall have been so cancelled.
powers and evidence of the payment of all taxes imposed upon such transfer. The person in whose name shares stand on the books of the corporation shall, to the full extent permitted by law, be deemed the owner thereof for all purposes as regards the corporation.
ARTICLE VIII
SEAL
The Board of Directors may provide a corporate seal, which shall be circular and contain the name of the corporation engraved around the margin and the words "corporate seal", the year of its organization, and the word "Delaware".
Exhibit 10.1
This Services Agreement (this "Agreement") is entered into as of September 27, 1996 by and between Abercrombie & Fitch Co., a Delaware corporation ("Abercrombie & Fitch"), and The Limited, Inc. a Delaware corporation ("The Limited").
RECITALS
WHEREAS, Abercrombie & Fitch is issuing shares of Class A Common Stock, $0.01 par value per share ("Class A Common Stock"), to the public in an offering (the "Initial Public Offering") registered under the Securities Act of 1933, as amended;
WHEREAS, The Limited beneficially owns all of the issued and outstanding Abercrombie & Fitch Class B Common Stock, par value $0.01 per share ("Class B Common Stock");
WHEREAS, The Limited has heretofore directly or indirectly provided certain administrative, financial, management and other services to Abercrombie & Fitch or its Subsidiaries;
WHEREAS, on the terms and subject to the conditions set forth herein, Abercrombie & Fitch desires to retain The Limited as an independent contractor to provide, directly or indirectly, certain of those services to Abercrombie & Fitch and its Subsidiaries (as defined below) after the Closing Date (as defined below); and
WHEREAS, on the terms and subject to the conditions set forth herein, The Limited desires to provide, directly or indirectly, such services to Abercrombie & Fitch and its Subsidiaries.
AGREEMENTS
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, The Limited and Abercrombie & Fitch, for themselves, their successors and assigns, hereby agree as follows:
ARTICLE I
DEFINITIONS
"Abercrombie & Fitch" has the meaning ascribed thereto in the preamble hereto.
"Abercrombie & Fitch Entities" means Abercrombie & Fitch and its Subsidiaries and "Abercrombie & Fitch Entity" shall mean any of the Abercrombie & Fitch Entities.
"Abercrombie & Fitch Indemnified Person" has the meaning ascribed thereto in Section 4.05.
"Actions" has the meaning ascribed thereto in Section 4.04.
"Actual-Use Billing" has the meaning ascribed thereto in Section 3.01
"Agreement" has the meaning ascribed thereto in the preamble hereto, as such agreement may be amended and supplemented from time to time in accordance with its terms.
"Associate Discount Program" means the program which allows the associates of The Limited and Abercrombie & Fitch to purchase items at agreed upon discount rates at each of the Subsidiaries of The Limited and Abercrombie & Fitch.
"Benefit Billing" has the meaning ascribed thereto in Section 3.01.
"Benefits Services" has the meaning ascribed thereto in Section 3.06.
"Change Notice" has the meaning ascribed thereto in Section 3.08.
"Class A Common Stock" has the meaning ascribed thereto in the recitals to this Agreement.
"Class B Common Stock" has the meaning ascribed thereto in the recitals to this Agreement.
"Closing Date" means the date of the closing of the initial sale of Class A Common Stock in the Initial Public Offering.
"Common Stock" means the Class B Common Stock, the Class A Common Stock and any other class of Abercrombie & Fitch capital stock representing the right to vote generally for the election of directors.
"Customary Billing" has the meaning ascribed thereto in Section 3.01.
"Employee Welfare Plans" has the meaning ascribed thereto in Section 4.02.
"Initial Public Offering" has the meaning ascribed thereto in the recitals to this Agreement.
"Limited Entities" means The Limited and Subsidiaries of The Limited and "Limited Entity" shall mean any of The Limited Entities.
"Limited Indemnified Person" has the meaning ascribed thereto in
Section 4.03.
"Pass-Through Billing" has the meaning ascribed thereto in Section 3.01.
"Payment Date" has the meaning ascribed thereto in Section 3.07.
"Percent of Sales Billing" has the meaning ascribed thereto in Section 3.01.
"Person" means any individual, partnership, limited liability company, joint venture, corporation, trust, unincorporated organization, government (and any department or agency thereof) or other entity.
"Prior Agreements" has the meaning ascribed thereto in the recitals to this Agreement.
"Schedule I" means the first schedule hereto which lists the Services (other than Services relating to employee plan and benefit matters) to be provided by The Limited to Abercrombie & Fitch and sets forth the related billing methodology.
"Schedule II" means the second schedule attached hereto which lists the Services relating to employee plans and benefit arrangements to be provided by The Limited to Abercrombie & Fitch and sets forth the related billing methodology.
"Schedules" has the meaning ascribed thereto in Section 3.01.
"SEC" means the United States Securities and Exchange Commission.
"Service Costs" has the meaning ascribed thereto in Section 3.01.
"Services" has the meaning ascribed thereto in Section 2.01.
"Subsidiary" means, as to any Person, any corporation, association, partnership, joint venture or other business entity of which more than 50% of the voting capital stock or other voting ownership interests is owned or controlled directly or indirectly by such Person or by one or more of the Subsidiaries of such Person or by a combination thereof. Subsidiary, when used with respect to The Limited or Abercrombie & Fitch, shall also include any other entity affiliated with The Limited or Abercrombie & Fitch, as the case may be, that The Limited and Abercrombie & Fitch may hereafter agree in writing shall be treated as a "Subsidiary" for the purposes of this Agreement.
"The Limited" has the meaning ascribed thereto in the preamble hereto.
ARTICLE II
PURCHASE AND SALE OF SERVICES
and to the extent that The Limited and Abercrombie & Fitch may mutually agree, The Limited shall provide additional services (including services not provided by The Limited to the Abercrombie & Fitch Entities prior to the Closing Date) to Abercrombie & Fitch. The scope of any such services, as well as the term, costs, and other terms and conditions applicable to such services, shall be as mutually agreed by The Limited and Abercrombie & Fitch.
ARTICLE III
SERVICE COSTS; OTHER CHARGES
(b) As provided herein, The Limited shall permit eligible Abercrombie & Fitch associates to participate in certain of The Limited's employee benefit plans. In addition to reimbursing The Limited for the Services as set forth herein, Abercrombie & Fitch shall reimburse The Limited for The Limited's costs (including any contributions and premium costs and including certain third-party expenses and allocations of certain Limited personnel expenses), generally in accordance with past practice, subject to Section 3.06 hereof, relating to participation by Abercrombie & Fitch associates in any of The Limited's benefit plans. It is the express intent of the parties that Service Costs relating to the administration of Abercrombie & Fitch employee plans and the performance of related Services will not exceed reasonable compensation for such Services as defined in 29 CFR (S)2550.408c-2.
(b) The costs payable by Abercrombie & Fitch for Services relating to employee plans and benefit arrangements ("Benefits Services") may be charged on the basis of Customary Billing, Pass-Through Billing, Percent of Sales Billing or Benefit Billing. In addition, costs associated with certain plans and programs identified in Schedule II will be paid principally through employee payroll deductions for such plans and programs. Benefit Services consists of those categories of Services which are more fully described on Schedule II attached hereto.
(c) Each party to this Agreement may request changes in the applicable terms of or services relating to The Limited Plans, approval of which shall not be unreasonably
withheld; provided, however, that approval of changes in the terms of any of The Limited Plans shall be in the sole discretion of The Limited.
(d) The Limited and Abercrombie & Fitch agree to cooperate fully with
each other in the administration and coordination of regulatory and
administrative requirements associated with The Limited Plans. Such
coordination, upon request, will include (but is not limited to) the following:
sharing payroll data for determination of highly compensated associates,
providing census information (including accrued benefits) for purposes of
running discrimination tests, providing actuarial reports for purposes of
determining the funded status of any plan, review and coordination of insurance
and other independent third party contracts, and providing for review of all
summary plan descriptions, requests for determination letters, insurance
contracts, Forms 5500, financial statement disclosures and plan documents.
(b) Abercrombie & Fitch agrees to pay on or before 30 days after the
date on which The Limited invoices or notifies Abercrombie & Fitch of the
Service Costs after the Closing Date (or the next Business Day, if such day is
not a Business Day) (each, a "Payment Date"), at The Limited's option upon
reasonable notice to Abercrombie & Fitch, through The Limited's intra-company
billing system, cash management systems, or, if requested by The Limited, by
wire transfer of immediately available funds payable to the order of The Limited
and without set off, all amounts invoiced by The Limited pursuant to paragraph
(a) during the preceding calendar month (or since the Closing Date, in the case
of the first Payment Date). If Abercrombie & Fitch fails to pay any monthly
payment within 90 days of the relevant Payment Date, Abercrombie & Fitch shall
be obligated to pay, in addition to the amount due on such Payment Date,
interest on such amount at the prime, or best rate announced by Banc One Corp.
plus 3% per annum compounded monthly from the relevant Payment Date through the
date of payment.
(c) Except as otherwise provided in the Schedules or agreed in writing by the parties, Abercrombie & Fitch shall take such action as is necessary to establish bank accounts (to be funded by Abercrombie & Fitch) or to otherwise fund all wage and salary payments to Abercrombie & Fitch associates and to fund all medical, retirement and other benefit claims payable to or on behalf of Abercrombie & Fitch associates and their dependents to the extent
not covered by third party insurance. Payroll services and benefit claims processing activities performed by The Limited or The Limited's subcontractors shall be coordinated to facilitate payments. Following prior written notice of not less than 15 business days, The Limited shall be relieved of any obligation to deliver benefit and payroll services under this Agreement to the extent that such bank accounts or other funding arrangements are not established at the time drafts are presented for payment, or at any time when there are insufficient funds in the relevant account or such other arrangements fail to satisfy a properly presented claim.
ARTICLE IV
THE SERVICES
(i) provide administrative and other services;
(ii) reach factually supported conclusions consistent with the terms of the Employee Welfare Plans;
(iii) make a full and fair review of each claim denial and decision related to the provision of benefits provided or arranged for under the Employee Welfare Plans, pursuant to the requirements of ERISA, if within sixty days after receipt of the notice of denial, a claimant requests in writing a review for reconsideration of such decisions. Administrator shall notify the claimant in writing of its decision on review. Such notice shall satisfy all ERISA requirements relating thereto; and
(iv) notify the claimant in writing of its decision on review.
ARTICLE V
ADDITIONAL AGREEMENT
ARTICLE VI
TERM AND TERMINATION
(b) This Agreement will be subject to early termination by either Abercrombie & Fitch or The Limited upon six months' written notice if The Limited ceases to own shares of Common Stock representing more than 50% of the combined voting power of the Common Stock of Abercrombie & Fitch.
(c) The Limited may, at its option, terminate this Agreement as it relates to any given Service if The Limited would otherwise be required to provide such Service with respect to any employee benefit plan or program that is not substantially similar to a corresponding plan or program of The Limited (as such plans and programs of The Limited exist from time to time) or if the method of delivering such Service would no longer be substantially similar to the manner in which such Service was delivered to the Abercrombie & Fitch Entities, as such delivery may change from time to time.
(d) The Limited may terminate any affected Service at any time if Abercrombie & Fitch shall have failed to perform any of its material obligations under this Agreement relating to any such Service, The Limited has notified Abercrombie & Fitch in writing of such failure, and such failure shall have continued for a period of 60 days after receipt of Abercrombie & Fitch of notice of such failure.
(e) Abercrombie & Fitch may terminate any affected Service at any time if The Limited shall have failed to perform any of its material obligations under this Agreement relating to any such Service, Abercrombie & Fitch has notified The Limited in writing of such failure, and such failure shall have continued for a period of 60 days after receipt by The Limited of notice of such failure.
(f) Each of Abercrombie & Fitch and The Limited agrees that prior to exercising its rights under this Section 6.02 it will consult for a reasonable period with the other party in advance of such termination as to its implementation.
(h) Abercrombie & Fitch may terminate any affected Service pursuant to Section 3.08 hereof.
(b) Following termination of this Agreement with respect to any Service, The Limited and Abercrombie & Fitch agree to cooperate in providing for an orderly transition of such Service to Abercrombie & Fitch or to a successor service provider. Without limiting the foregoing, The Limited agrees to (i) provide, within 90 days of the termination, copies in a format designated by The Limited, all records relating directly or indirectly to benefit determinations of Abercrombie & Fitch associates, including but not limited to compensation and service records, correspondence, plan interpretive policies, plan procedures, administration guidelines, minutes, or any data or records required to be maintained by law and (ii) work with Abercrombie & Fitch in developing a transition schedule.
ARTICLE VII
MISCELLANEOUS
(b) Neither party shall be under any liability for failure to fulfill any obligation under this Agreement, so long as and to the extent to which the fulfillment of such obligation is prevented, frustrated, hindered, or delayed as a consequence of circumstances of force majeure, provided always that such party shall have exercised all due diligence to minimize to the greatest extent possible the effect of force majeure on its obligations hereunder.
(c) Promptly on becoming aware of force majeure causing a delay in performance or preventing performance of any obligations imposed by this Agreement (and termination of such delay), the party affected shall give written notice to the other party giving details of the same, including particulars of the actual and, if applicable, estimated continuing effects of such force majeure on the obligations of the party whose performance is prevented or delayed. If such notice shall have been duly given, and actual delay resulting from such force majeure shall be deemed not to be a breach of this Agreement, and the period for performance of the obligation to which it relates shall be extended accordingly, provided that if force majeure results in the performance of a party being delayed by more than 60 days, the other party shall have the right to terminate this Agreement with respect to any Service effected by such delay forthwith by written notice.
hereof. This Agreement is not intended to confer upon any Person other than the parties hereto any rights or remedies hereunder.
(a) If to Abercrombie & Fitch, to:
Abercrombie & Fitch Co.
Four Limited Parkway
Reynoldsburg, OH 43068
Attention: Samuel P. Fried Fax: 614-479-7188
(b) If to The Limited, to:
The Limited, Inc.
Three Limited Parkway
Columbus, OH 43230
Attention: Samuel P. Fried
Fax: 614-479-7188
with a copy to:
Davis Polk & Wardwell
450 Lexington Avenue
New York, NY 10017
Attention: Jeffrey Small
Fax: 212-450-4800
or to such other addresses or telecopy numbers as may be specified by like notice to the other parties.
(b) Abercrombie & Fitch agrees to permit The Limited and its Subsidiaries to use the trademarks and service marks owned by Abercrombie & Fitch or any of its Subsidiaries at no cost to The Limited or its Subsidiaries in The Limited's annual report to shareholders and publicity materials and for other similar purposes.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by their duly authorized representatives.
ABERCROMBIE & FITCH CO.
/s/ Kenneth B. Gilman
By:_________________________________
Name: Kenneth B. Gilman
Title: Vice Chairman
|
THE LIMITED, INC.
/s/ Kenneth B. Gilman
By:_________________________________
Name: Kenneth B. Gilman
Title: Vice Chairman and Chief
Financial Officer
|
Services Agreement - Schedule I General Corporate Services/1/
Service Billing Methodology
- ----------------------- ------------------------
. Aircraft Services Actual-Use Billing
. General Real Estate Services Customary Billing
. Import and Shipping Services Customary Billing
. International Expansion Services Customary Billing
. Store Planning and Construction Customary Billing
. Accounting, Public Reporting Percent of Sales Billing
and Consolidation Services
. Internal Audit Percent of Sales Billing
. Treasury and Cash Management Percent of Sales Billing
(including loans and investments)
. Corporate Development Percent of Sales Billing
. Risk Management and Administrative Insurance Percent of Sales Billing
. Corporate Secretarial Services Percent of Sales Billing
. Marketing Data Services Percent of Sales Billing
. Executive Compensation and Customary Billing
Benefit Plan Design Services
. Governmental Affairs Percent of Sales Billing
. Human Resources and Compensation Customary Billing
. Investor and Public Relations Percent of Sales Billing
. Legal Services Percent of Sales Billing
|
Service Billing Methodology
- ----------------------- ------------------------
. Tax Return Preparation and Percent of Sales Billing
Tax Planning Services
. Corporate Finance Percent of Sales Billing
. Insurance Policies Pass-Through Billing
(liability, property, casualty
and fiduciary)
. Corporate, administrative Percent of Sales Billing
and general overhead
. Management Information
Systems processing Percent of Sales Billing
|
Services Agreement - Schedule II Benefits Services
Service Billing Methodology
- ----------------------- ------------------------
MEDICAL/DENTAL PROGRAMS
Benefits/Claims
- ---------------
. Claims costs for Abercrombie & Fitch Customary Billing
Associates participating
in the following Limited Plans
and programs:
- Medical Plan
- Short Term Disability Plan
- Prescription Drug Plan
- Dental Plan
Administration
- --------------
. Administration of above Abercrombie & Fitch Customary Billing
plans and programs, including:
- maintenance of eligibility files
upon Abercrombie & Fitch's notification
of status changes
- claim adjudication under the terms
of applicable plans
- maintenance of toll-free telephone
lines for inquiries, etc.
- support services (internal and
external, including COBRA)
|
Service Billing Methodology
- ----------------------- ------------------------
Participant Contributions
- -------------------------
. Participant contributions for
deductions above plans or direct
bill to associates/retirees Participant payroll
OTHER BENEFIT PLANS
. Life Insurance Customary Billing
--------------
Life insurance for Abercrombie & Fitch
Associates (including Accidental
Death and Dismemberment)
. Savings/Retirement Plans
- Company match/retirement contribution Customary Billing
- Participant Contributions Payroll Deduction
. Long-Term Disability Plans
--------------------------
- Employer contributions Customary Billing
- Associate contributions Payroll deduction
Other Benefit Support Services
- ------------------------------
. Audit, Legal, Actuarial Fees and Customary Billing
related recoveries
. Payroll support of benefits Customary Billing
administration (insurance,
savings, other benefit
plans and statutory requirements)
Employee Stock Purchase Program
- -------------------------------
- - Payroll Services Customary Billing
----------------
|
Exhibit 10.2
This SHARED FACILITIES AGREEMENT is entered into as of September 27, 1996 (this "Agreement"), by and between THE LIMITED London-Paris-New York, Inc., a Delaware corporation ("Sublessor"), and ABERCROMBIE & FITCH CO., a Delaware corporation (" Sublessee").
WHEREAS, prior to the date hereof, Sublessee has occupied all or a portion of the premises leased by Sublessor under such lease agreements without a written agreement; and
WHEREAS, Sublessor and Sublessee desire to evidence their agreement relating to such shared occupancy upon the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the covenants set forth herein, the parties covenant and agree as follows
"Affiliate" means a corporation, partnership or other business entity, which, directly or indirectly, controls, is controlled by, or is under common control with, another corporation, partnership or other business entity. If more than 50 percent of the voting stock of a corporation shall be owned by another corporation or by a partnership or other business entity, the corporation whose stock is so owned shall be deemed to be controlled by the corporation, partnership or business entity owning such stock.
"Lease Term" means the initial term of a Prime Lease as it may be extended by Sublessor pursuant to a renewal or extension option therein.
"Leased Premises" means the premises in which Sublessor has a leasehold interest under a Prime Lease or all such premises collectively, as the context may require.
"Lessor" means the landlord under a Prime Lease.
(b) If any utility services to the Leased Premises are not separately metered as between the Subleased Premises and the remainder of the Leased Premises, the accounts shall be in the name of Sublessor, or the Lessor if required by the Prime Lease, and the payments to the utility companies or the Lessor, as the case may be, shall be shared prorata by Sublessee and Sublessor based on the Space Size Ratios, and without regard to consumption. Sublessee shall pay its share of same to Sublessor on or before the later of (i) five business days after Sublessee receives an invoice (including a copy of the Lessor's invoice, if any) for same or (ii) the date such payment is due and payable to the utility company or the Lessor, as the case may be
(b) Sublessee shall pay its prorata share of such monetary obligations to Sublessor on or before the later of (i) five business days after Sublessee's receipt of written notice of such obligation (if the obligation is a recurring one, only one notice that specifies the due dates shall be required) and a copy of the Lessor's invoice, if any, or (ii) the date Sublessor is required to pay such monetary obligations to the Lessor. The monetary obligations referred to in this Section 6 shall include, without limitation, base, fixed and minimum rent, percentage rent, common area maintenance charges, enclosed mall maintenance charges, real estate taxes and assessments, insurance charges, merchants association dues, marketing, advertising and other promotional fund contributions and HVAC and chilled water charges.
agreed to a different cost-sharing arrangement under a separate written agreement (e g, the "Services Agreement" between The Limited, Inc., and Abercrombie & Fitch Co.)
(b) No party may make any alterations to its premises that would adversely affect the other party's business or use or occupancy of its premises, including any alterations that would (i) reduce the availability of utilities, HVAC or other services to the other party's premises, (ii) impair access to the other party's premises or (iii) cause the other party's premises not to comply with applicable law
provided that if at any time after such permitted Transfer the transferee is no longer an Affiliate of either Sublessor or Sublessee, the event terminating such affiliation shall be deemed a Transfer subject to Sublessor's consent pursuant to the preceding sentence.
(b) In the event of any Transfer, whether or not Sublessor grants its consent to such Transfer or has the right to withhold its consent to such Transfer, Sublessee shall remain fully liable to perform its duties under this Agreement following a Transfer. If Sublessee enters into a Transfer, Sublessee shall pay Sublessor any and all consideration received by Sublessee in such transaction (as rent or inducement for such Transfer) in excess of the total sums that Sublessee is obligated to pay Sublessor under this Agreement, or the prorated portion thereof if only a portion of the Subleased Premises is Transferred, as additional rent under this Agreement without affecting or reducing any other obligations of Sublessee hereunder. Sublessee acknowledges that the foregoing is intended to preclude Sublessee from obtaining a profit from a Transfer.
(c) Any proposed Transfer shall also be subject to the restrictions and requirements set forth in the Prime Lease. Any purported Transfer consummated in violation of the provisions of this Section 11 shall be null and void and of no force or effect.
(d) In the event Sublessor intends to assign a Prime Lease or further
sublet the Leased Premises exclusive of the Subleased Premises to a person or
entity that is not an Affiliate of Sublessor, Sublessor shall give Sublessee
written notice of such proposed assignment or sublease at least 60 days prior to
the effective date of such assignment or sublease, and Sublessee shall have the
right to terminate this Agreement with respect to such Prime Lease by giving
written notice thereof to Sublessor prior to such effective date. Sublessee's
termination notice shall specify the termination's effective date, which shall
be no later than 60 days after the effective date of the Sublessor's assignment
or sublease. If Sublessee does not elect to terminate this Agreement with
respect to such Prime Lease or such assignment or sublease is to an Affiliate of
Sublessor, the following shall be conditions precedent to the effectiveness of
such assignment or sublease: (i) in the case of an assignment, Sublessor shall
cause the assignee to assume and be bound by the terms of this Agreement, but
only to the extent such terms apply to such Prime Lease, and, notwithstanding
such assignment, Sublessor shall not be released from and shall remain fully
liable under the terms of this Agreement with respect to such Prime Lease; and
(ii) in the case of a sublease, Sublessor shall cause the sublessee to
acknowledge the rights of Sublessee under this Agreement with respect to the
Subleased Premises and the remainder of the Leased Premises and agree that its
possession is subject to such rights of Sublessee.
part of Sublessee by reason of which the Prime Lease may be terminated or forfeited or Sublessor found to be in default thereunder or the Lessor may be entitled to damages or a penalty.
In the event (i) Sublessor receives a notice of any monetary default from the Lessor with respect to any matter pertaining to the Leased Premises that does not pertain to any obligation of Sublessee under this Agreement, (ii) Sublessor is not contesting or undertaking to cure the alleged default and (iii) the Prime Lease permits a sublessee to cure such a default, Sublessor shall immediately notify Sublessee of same in writing, and Sublessee shall have the right, but no obligation, to immediately cure such default but shall not be entitled to reimbursement from Sublessor for the costs incurred in connection with such cure.
(b) Sublessee shall defend, indemnify and hold harmless Sublessor and its employees, officers, directors, partners and agents against and from any and all Claims in favor of, anyone whomsoever, and against and from any and all costs, damages and expenses, including attorneys' fees, resulting from, or in connection with, loss of life, bodily or personal injury or property damage (i) arising, directly or indirectly, out of, or from, or on account of any accident or other occurrence in, upon or from the Subleased Premises or (ii) occasioned in whole or in part through the use and occupancy of the Subleased Premises or any construction, repair, alterations or improvements therein or appurtenances thereto, or by any act or omission of Sublessee or any subtenant, concessionaire or licensee of Sublessee, or its employees, agents, contractors or invitees in, upon, at or from the Subleased Premises.
(c) Each party hereto (the "Releasing Party") hereby releases the other (the "Released Party"), from any loss, damage, claim or liability which the Released Party would, but for this Section 1 7(c), have had to the Releasing Party arising out of or in connection with any damage to the property of the Releasing Party to the extent such damage or the cause thereof is covered by insurance maintained by the Releasing Party. Such insurance coverage maintained shall be deemed to include any deductible or self-insured retention in effect or permitted pursuant to this Agreement. SUCH RELEASE SHALL EXTEND TO ANY LOSS, DAMAGE, CLAIM OR LIABILITY THAT MAY HAVE RESULTED 1N WHOLE OR 1N PART FROM ANY ACT OR NEGLECT OF THE RELEASED PARTY, ITS OFFICERS, AGENTS OR EMPLOYEES. Each party hereto shall immediately give to each insurance company which has issued to it property insurance policies written notice of the terms of such mutual releases and have such insurance policies properly endorsed, if necessary, to prevent the
invalidation of such insurance coverages by reason of such releases and to waive the Releasing Party's insurer's right of subrogation that would exist had the Releasing Party not given the foregoing release.
If to Sublessor: THE LIMITED London-Paris-New York, Inc.
Three Limited Parkway
P.O. Box 16000
Columbus, Ohio 43216
(Columbus, Ohio 43230 for non-U.S. mail)
Attn: Corporate Real Estate Department
with a copy to:
The Limited, Inc.
Three Limited Parkway
P.O. Box 16000
Columbus, Ohio 43216
(Columbus, Ohio 43230 for non-U.S. mail)
Attn: Corporate Real Estate Department
If to Sublessee: Abercrombie & Fitch Co.
Four Limited Parkway East
Columbus, Ohio 43218
(Reynoldsburg, Ohio 43068 for non-U.S. mail)
Attn: Real Estate Department
with a copy to:
The Limited, Inc.
Three Limited Parkway
P.O. Box 16000
Columbus, Ohio 43216
(Columbus, Ohio 43230 for non-U.S. mail)
Attn: Corporate Real Estate Department
Either party may, by notice in writing, direct that future notices or demands be sent to a different address.
Agreement, without the written consent of Sublessee. Sublessor shall furnish Sublessee with a copy of any amendment to the Prime Lease.
(i) the execution by Sublessor and delivery to the Lessor, promptly following receipt of Sublessee's written request therefor, of notices, requests and other similar writings; and
Sublessee shall defend, indemnify and hold Sublessor harmless from and against any and all court costs, costs of filing, attorneys' fees and awards resulting from, or incurred in connection with, legal proceedings instituted by Sublessor pursuant to this Section 28.
accompanied by a good-faith notice stating why the party has elected to make a
payment under protest. Such protest will be deemed waived unless the subject
matter identified in the protest is submitted to arbitration pursuant to this
Section 30.
IN WITNESS WHEREOF, the parties hereto have caused these presents to be executed the day and year first written above.
ATTEST: By: /s/ George R. Sappenfield
-------------------------------------
Name: George R. Sappenfield
Title: Vice President -- Real Estate
/s/ Samuel P. Fried
- -------------------------------
Samuel P. Fried
Assistant Secretary
|
ABERCROMBIE & FITCH CO.,
a Delaware corporation,
ATTEST: By: /s/ Seth R. Johnson
-------------------------------------
Name: Seth R. Johnson
Title: Vice President--
Chief Financial Officer
/s/ Samuel P. Fried
- -------------------------------
Samuel P. Fried,
Secretary
|
- --------------------------------------------------------------
Bill Lse No. Center Name State Store Gross Store %
- --------------------------------------------------------------
LTD 2,567 The Gardens FL ABF 589 8,755 36%
LTD 775 11,663 50%
TOO 775 3,892 16%
------
24,310
- --------------------------------------------------------------
|
Exhibit 10.3
This SHARED FACILITIES AGREEMENT is entered into as of September 27, 1996 (this "Agreement"), by and between EXPRESS, INC., a Delaware corporation ("Sublessor"), and ABERCROMBIE & FITCH CO., a Delaware corporation ("Sublessee").
WHEREAS, prior to the date hereof, Sublessee has occupied all or a portion of the premises leased by Sublessor under such lease agreements without a written agreement; and
WHEREAS, Sublessor and Sublessee desire to evidence their agreement relating to such shared occupancy upon the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the covenants set forth herein, the parties covenant and agree as follows
"Affiliate" means a corporation, partnership or other business entity, which, directly or indirectly, controls, is controlled by, or is under common control with, another corporation, partnership or other business entity. If more than 50 percent of the voting stock of a corporation shall be owned by another corporation or by a partnership or other business entity, the corporation whose stock is so owned shall be deemed to be controlled by the corporation, partnership or business entity owning such stock.
"Lease Term" means the initial term of a Prime Lease as it may be extended by Sublessor pursuant to a renewal or extension option therein.
"Leased Premises" means the premises in which Sublessor has a leasehold interest under a Prime Lease or all such premises collectively, as the context may require.
"Lessor" means the landlord under a Prime Lease.
(b) If any utility services to the Leased Premises are not separately metered as between the Subleased Premises and the remainder of the Leased Premises, the accounts shall be in the name of Sublessor, or the Lessor if required by the Prime Lease, and the payments to the utility companies or the Lessor, as the case may be, shall be shared prorata by Sublessee and Sublessor based on the Space Size Ratios, and without regard to consumption. Sublessee shall pay its share of same to Sublessor on or before the later of (i) five business days after Sublessee receives an invoice (including a copy of the Lessor's invoice, if any) for same or (ii) the date such payment is due and payable to the utility company or the Lessor, as the case may be
(b) Sublessee shall pay its prorata share of such monetary obligations to Sublessor on or before the later of (i) five business days after Sublessee's receipt of written notice of such obligation (if the obligation is a recurring one, only one notice that specifies the due dates shall be required) and a copy of the Lessor's invoice, if any, or (ii) the date Sublessor is required to pay such monetary obligations to the Lessor. The monetary obligations referred to in this Section 6 shall include, without limitation, base, fixed and minimum rent, percentage rent, common area maintenance charges, enclosed mall maintenance charges, real estate taxes and assessments, insurance charges, merchants association dues, marketing, advertising and other promotional fund contributions and HVAC and chilled water charges.
agreed to a different cost-sharing arrangement under a separate written agreement (e g, the "Services Agreement" between The Limited, Inc., and Abercrombie & Fitch Co.)
(b) No party may make any alterations to its premises that would adversely affect the other party's business or use or occupancy of its premises, including any alterations that would (i) reduce the availability of utilities, HVAC or other services to the other party's premises, (ii) impair access to the other party's premises or (iii) cause the other party's premises not to comply with applicable law
provided that if at any time after such permitted Transfer the transferee is no longer an Affiliate of either Sublessor or Sublessee, the event terminating such affiliation shall be deemed a Transfer subject to Sublessor's consent pursuant to the preceding sentence.
(b) In the event of any Transfer, whether or not Sublessor grants its consent to such Transfer or has the right to withhold its consent to such Transfer, Sublessee shall remain fully liable to perform its duties under this Agreement following a Transfer. If Sublessee enters into a Transfer, Sublessee shall pay Sublessor any and all consideration received by Sublessee in such transaction (as rent or inducement for such Transfer) in excess of the total sums that Sublessee is obligated to pay Sublessor under this Agreement, or the prorated portion thereof if only a portion of the Subleased Premises is Transferred, as additional rent under this Agreement without affecting or reducing any other obligations of Sublessee hereunder. Sublessee acknowledges that the foregoing is intended to preclude Sublessee from obtaining a profit from a Transfer.
(c) Any proposed Transfer shall also be subject to the restrictions and requirements set forth in the Prime Lease. Any purported Transfer consummated in violation of the provisions of this Section 11 shall be null and void and of no force or effect.
(d) In the event Sublessor intends to assign a Prime Lease or further
sublet the Leased Premises exclusive of the Subleased Premises to a person or
entity that is not an Affiliate of Sublessor, Sublessor shall give Sublessee
written notice of such proposed assignment or sublease at least 60 days prior to
the effective date of such assignment or sublease, and Sublessee shall have the
right to terminate this Agreement with respect to such Prime Lease by giving
written notice thereof to Sublessor prior to such effective date. Sublessee's
termination notice shall specify the termination's effective date, which shall
be no later than 60 days after the effective date of the Sublessor's assignment
or sublease. If Sublessee does not elect to terminate this Agreement with
respect to such Prime Lease or such assignment or sublease is to an Affiliate of
Sublessor, the following shall be conditions precedent to the effectiveness of
such assignment or sublease: (i) in the case of an assignment, Sublessor shall
cause the assignee to assume and be bound by the terms of this Agreement, but
only to the extent such terms apply to such Prime Lease, and, notwithstanding
such assignment, Sublessor shall not be released from and shall remain fully
liable under the terms of this Agreement with respect to such Prime Lease; and
(ii) in the case of a sublease, Sublessor shall cause the sublessee to
acknowledge the rights of Sublessee under this Agreement with respect to the
Subleased Premises and the remainder of the Leased Premises and agree that its
possession is subject to such rights of Sublessee.
part of Sublessee by reason of which the Prime Lease may be terminated or forfeited or Sublessor found to be in default thereunder or the Lessor may be entitled to damages or a penalty.
In the event (i) Sublessor receives a notice of any monetary default from the Lessor with respect to any matter pertaining to the Leased Premises that does not pertain to any obligation of Sublessee under this Agreement, (ii) Sublessor is not contesting or undertaking to cure the alleged default and (iii) the Prime Lease permits a sublessee to cure such a default, Sublessor shall immediately notify Sublessee of same in writing, and Sublessee shall have the right, but no obligation, to immediately cure such default but shall not be entitled to reimbursement from Sublessor for the costs incurred in connection with such cure.
(b) Sublessee shall defend, indemnify and hold harmless Sublessor and its employees, officers, directors, partners and agents against and from any and all Claims in favor of, anyone whomsoever, and against and from any and all costs, damages and expenses, including attorneys' fees, resulting from, or in connection with, loss of life, bodily or personal injury or property damage (i) arising, directly or indirectly, out of, or from, or on account of any accident or other occurrence in, upon or from the Subleased Premises or (ii) occasioned in whole or in part through the use and occupancy of the Subleased Premises or any construction, repair, alterations or improvements therein or appurtenances thereto, or by any act or omission of Sublessee or any subtenant, concessionaire or licensee of Sublessee, or its employees, agents, contractors or invitees in, upon, at or from the Subleased Premises.
(c) Each party hereto (the "Releasing Party") hereby releases the other (the "Released Party"), from any loss, damage, claim or liability which the Released Party would, but for this Section 1 7(c), have had to the Releasing Party arising out of or in connection with any damage to the property of the Releasing Party to the extent such damage or the cause thereof is covered by insurance maintained by the Releasing Party. Such insurance coverage maintained shall be deemed to include any deductible or self-insured retention in effect or permitted pursuant to this Agreement. SUCH RELEASE SHALL EXTEND TO ANY LOSS, DAMAGE, CLAIM OR LIABILITY THAT MAY HAVE RESULTED 1N WHOLE OR 1N PART FROM ANY ACT OR NEGLECT OF THE RELEASED PARTY, ITS OFFICERS, AGENTS OR EMPLOYEES. Each party hereto shall immediately give to each insurance company which has issued to it property insurance policies written notice of the terms of such mutual releases and have such insurance policies properly endorsed, if necessary, to prevent the
invalidation of such insurance coverages by reason of such releases and to waive the Releasing Party's insurer's right of subrogation that would exist had the Releasing Party not given the foregoing release.
If to Sublessor: Express, Inc.
Three Limited Parkway
P.O. Box 16000
Columbus, Ohio 43216
(Columbus, Ohio 43230 for non-U.S. mail)
Attn: Corporate Real Estate Department
with a copy to:
The Limited, Inc.
Three Limited Parkway
P.O. Box 16000
Columbus, Ohio 43216
(Columbus, Ohio 43230 for non-U.S. mail)
Attn: Corporate Real Estate Department
If to Sublessee: Abercrombie & Fitch Co.
Four Limited Parkway East
Columbus, Ohio 43218
(Reynoldsburg, Ohio 43068 for non-U.S. mail)
Attn: Real Estate Department
with a copy to:
The Limited, Inc.
Three Limited Parkway
P.O. Box 16000
Columbus, Ohio 43216
(Columbus, Ohio 43230 for non-U.S. mail)
Attn: Corporate Real Estate Department
Either party may, by notice in writing, direct that future notices or demands be sent to a different address.
Agreement, without the written consent of Sublessee. Sublessor shall furnish Sublessee with a copy of any amendment to the Prime Lease.
(i) the execution by Sublessor and delivery to the Lessor, promptly following receipt of Sublessee's written request therefor, of notices, requests and other similar writings; and
Sublessee shall defend, indemnify and hold Sublessor harmless from and against any and all court costs, costs of filing, attorneys' fees and awards resulting from, or incurred in connection with, legal proceedings instituted by Sublessor pursuant to this Section 28.
accompanied by a good-faith notice stating why the party has elected to make a
payment under protest. Such protest will be deemed waived unless the subject
matter identified in the protest is submitted to arbitration pursuant to this
Section 30.
IN WITNESS WHEREOF, the parties hereto have caused these presents to be executed the day and year first written above.
ATTEST: By: /s/ George R. Sappenfield
--------------------------------------
Name: George R. Sappenfield
Title: Vice President -- Real Estate
/s/ Samuel P. Fried
- --------------------------
Samuel P. Fried
Assistant Secretary
|
ABERCROMBIE & FITCH CO.,
a Delaware corporation,
ATTEST: By: /s/ Seth R. Johnson
------------------------------------------------
Name: Seth R. Johnson
Title: Vice President -- Chief Financial Officer
/s/ Samuel P. Fried
- --------------------------
Samuel P. Fried
Secretary
|
Bill Lse No. Center Name State Store Gross Store %
EXP 4272 Highland Park TX ABF 522 11,424 36.7%
EXP 155 8,961 28.7%
STC 155 4,045 13%
VIC 490 5,752 18.4%
VSB 490 1,022 3.3%
------
31,204
EXP 5923 San Franciso Centre CA ABF 575 8,360 45.9%
EXP 427 9,868 54.1%
------
18,228
|
Exhibit 10.4
THIS TAX SHARING AGREEMENT ("Agreement") is entered into as of September 27, 1996 by and between Abercrombie & Fitch Co., a Delaware corporation ("Abercrombie & Fitch"), and The Limited, Inc., a Delaware corporation ("The Limited").
RECITALS
WHEREAS, The Limited is the common parent corporation of an affiliated group of corporations within the meaning of Section 1504(a) of the Internal Revenue Code of 1986, as amended (the "Code");
WHEREAS, The Limited beneficially owns all of the issued and outstanding Abercrombie & Fitch Class B Common Stock, par value $.01 per share and Abercrombie & Fitch is a member of The Limited consolidated group for federal income tax purposes;
WHEREAS, the parties are contemplating the possibility that Abercrombie & Fitch will issue shares of Class A Common Stock, $.01 par value per share to the public in an offering (the "Initial Public Offering") registered under the Securities Act of 1933, as amended;
WHEREAS, The Limited Group (as defined below) has filed and intends to file consolidated federal income tax returns as permitted by Section 1501 of the Code and certain members of the Abercrombie & Fitch Group (as defined below) and certain members of The Limited Sub-Group (as defined below), have filed and intend to file returns relating to Combined State Taxes (as defined below);
WHEREAS, Abercrombie & Fitch desires to engage The Limited to provide certain services, and The Limited desires to provide certain services, relating to separate state, local and foreign taxes other than Federal Taxes and Combined State Taxes; and
WHEREAS, The Limited and Abercrombie & Fitch desire to agree upon a method for determining the financial consequences to each party and their subsidiaries resulting from the filing of a consolidated federal income tax return and the filing of returns relating to Combined State Taxes.
AGREEMENTS
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, The Limited and Abercrombie & Fitch, for themselves, their successors, and assigns, hereby agree as follows:
ARTICLE I
DEFINITIONS
from earlier years of the Abercrombie & Fitch Group, but without regard to any such carryforward from a tax period (or portion thereof) ending on or before the date of the Initial Public Offering and arising solely due to treating the Abercrombie & Fitch Group as if it were never part of The Limited Group, (D) as though the highest rate of tax specified in subsection (b) of Section 11 of the Code (or any other similar rates applicable to specific types of income) were the only rates set forth in that subsection, and with other similar adjustments as described in Section 1561 of the Code, and (E) reflecting the positions, elections and accounting methods used by The Limited in preparing the consolidated federal income tax return for The Limited Group and (F) by not permitting the Abercrombie & Fitch Group any compensation deductions arising in respect of any exercise of options on Limited stock by any employee of the Abercrombie & Fitch Group.
"Abercrombie & Fitch Group" shall mean, at any time, Abercrombie & Fitch and any direct or indirect corporate subsidiaries of Abercrombie & Fitch that would be eligible to join with Abercrombie & Fitch, with respect to Federal Taxes, in the filing of a consolidated federal income tax return and, with respect to Combined State Taxes, in the filing of a consolidated, combined or unitary income or franchise tax return if Abercrombie & Fitch were not consolidated, combined or filing on a unitary basis with any member of The Limited Sub-Group.
"Combined State Tax" means, with respect to each state or local taxing jurisdiction, any income, franchise or similar tax payable to such state or local taxing jurisdiction in which a member of the Abercrombie & Fitch Group files tax returns with a member of The Limited Sub-Group, on a consolidated, combined or unitary basis for purposes of such income or franchise tax.
"Deconsolidation" means any event pursuant to which Abercrombie & Fitch ceases to be a subsidiary corporation includible in a consolidated tax return of The Limited Group for Federal Tax purposes.
"Federal Tax" means any tax imposed under Subtitle A of the Code.
"Final Determination" shall mean (i) with respect to Federal Taxes, a "determination" as defined in Section 1313(a) of the Code or execution of an Internal Revenue Service Form 870AD and, with respect to taxes other than Federal Taxes, any final determination of liability in respect of a tax that, under applicable law, is not subject to further appeal, review or modification through proceedings or otherwise, (ii) any final disposition of a tax issue by reason of the expiration of a statute of limitations or (iii) the payment of tax by The Limited with respect to any item disallowed or adjusted by any taxing authority where The Limited determines in good faith that no action should be taken to recoup such payment.
"Post-Deconsolidation Tax Period" means (i) any tax period beginning and ending after the date of Deconsolidation and (ii) with respect to a tax period that begins before and ends after the date of Deconsolidation, such portion of the tax period that commences on the day immediately after the date of Deconsolidation.
"Pre-Deconsolidation Tax Period" means (i) any tax period beginning and ending before or on the date of Deconsolidation and (ii) with respect to a period that begins before and ends after the date of Deconsolidation, such portion of the tax period ending on and including the date of Deconsolidation.
"Tax Asset" means any net operating loss, net capital loss, investment tax credit, foreign tax credit, charitable deduction or any other deduction, credit or tax attribute which could reduce taxes (including, without limitation, deductions and credits related to alternative minimum taxes).
"The Limited Group" shall mean, at any time, The Limited and each direct and indirect corporate subsidiary eligible to join with The Limited in the filing of a consolidated federal income tax return.
"The Limited Sub-Group" shall mean, at any time, The Limited and each of its direct and indirect corporate subsidiaries other than those subsidiaries that are members of the Abercrombie & Fitch Group.
ARTICLE II
TAX SHARING
to The Limited's estimated Federal Tax installment), as determined under the principles of Section 2.1(a) of this Agreement. Abercrombie & Fitch shall, within 5 days of receipt of such determination (but in no event earlier than 5 days prior to the due date of The Limited's corresponding estimated tax payment), pay to The Limited the amount so determined. The Limited shall determine under provisions of applicable law the amount of the estimated tax installment of the Abercrombie & Fitch Combined State Tax Liability (corresponding to the relevant estimated Combined State Tax installment), as determined under the principles of Section 2.1(a) of this Agreement. Abercrombie & Fitch shall, within 5 days of receipt of such determination (but in no event earlier than 5 days prior to the due date of The Limited's corresponding estimated tax payment), pay to The Limited the amount so determined.
(i) On or before the due date (including all applicable and valid extensions) for The Limited Group's consolidated Federal Tax return, The Limited shall make available to Abercrombie & Fitch a pro forma Federal Tax return (a "Pro Forma Federal Return") of the Abercrombie & Fitch Group reflecting the Abercrombie & Fitch Federal Tax Liability. On or before the due date for each Combined State Tax return, The Limited shall make available to Abercrombie & Fitch the relevant pro forma Combined State Tax return (each a "Pro Forma Combined State Return" and together with the Pro Forma Federal Return, the "Pro Forma Returns") of the Abercrombie & Fitch Group reflecting the relevant Abercrombie & Fitch Combined State Tax Liability. The Pro Forma Returns shall be prepared in good faith in a manner generally consistent with past practice.
(ii) On or before the date The Limited files its consolidated Federal Tax return for any year for which payments are to be made under this Agreement, Abercrombie & Fitch shall pay to The Limited, or The Limited shall pay to Abercrombie & Fitch, as appropriate, an amount equal to the difference, if any, between the Abercrombie & Fitch Federal Tax Liability reflected on the Pro Forma Federal Return for such year and the aggregate amount of the estimated installments of the Abercrombie & Fitch Federal Tax Liability for such year made pursuant to Section 2.1(b). On or before the date The Limited files a Combined State Tax return for any year for which payments are to be made under this Agreement, Abercrombie & Fitch shall pay to The Limited, or The Limited shall pay to Abercrombie & Fitch, as appropriate, an amount equal to the difference, if any, between the Abercrombie & Fitch Combined State Tax Liability reflected on the relevant Pro Forma Combined State Tax Return and the aggregate amount of the estimated installments paid with respect to the corresponding Abercrombie & Fitch Combined State Tax Liability pursuant to Section 2.1(b).
(iii) If a Pro Forma Return reflects a Tax Asset that may under applicable law be used to reduce a Federal Tax or Combined State Tax liability of any member of
The Limited Sub-Group for any taxable period, The Limited shall pay to Abercrombie & Fitch an amount equal to the actual tax saving (which would include refunds actually received) produced by such Tax Asset at the time such tax saving is realized and the future Pro Forma Returns of the Abercrombie & Fitch Group shall be adjusted to reflect such use. The amount of any such tax saving for any taxable period shall be the amount of the reduction in taxes payable to a taxing authority with respect to such tax period as compared to the taxes that would have been payable to a taxing authority with respect to such tax period in the absence of such Tax Asset.
(iv) In the event that The Limited makes a cash deposit with a taxing authority in order to stop the running of interest or makes a payment of tax and correspondingly takes action to recoup such payment (such as suing for a refund), Abercrombie & Fitch shall pay to The Limited an amount equal to Abercrombie & Fitch' share of the amount so deposited or paid (calculated in a manner consistent with the determinations provided in this Article 2). Upon receipt by The Limited of a refund of any amounts paid by it in respect of which Abercrombie & Fitch shall have advanced an amount hereunder, The Limited shall pay to Abercrombie & Fitch the amount of such refund, together with any interest received by it on such refund. If and to the extent that any claim for refund or contest based thereupon shall be unsuccessful, the payment by Abercrombie & Fitch under Section 2.1(c)(iv) shall be credited toward Abercrombie & Fitch' obligations under this Section 2(c)(iv) and any other payment obligation of Abercrombie & Fitch under Section 2(d) below.
The Limited shall act in good faith with regard to all members included in an
applicable return. The Limited shall have the right with respect to any
consolidated Federal Tax returns or returns relating to a Combined State Tax
that it has filed or will file to determine in good faith (i) the manner in
which such returns, documents or statements shall be prepared and filed,
including, without limitation, the manner in which any item of income, gain,
loss, deduction or credit shall be reported, (ii) whether any extensions should
be requested, and (iii) the elections that will be made by any member of The
Limited Group. In addition, The Limited shall have the right, in good faith, to
(i) contest, compromise or settle any adjustment or deficiency proposed,
asserted or assessed as a result of any audit of any Federal Tax return or
return relating to a Combined State Tax, (ii) file, prosecute, compromise or
settle any claim for refund, and (iii) determine whether any refunds shall be
received by way of refund or credited against tax liabilities. In addition, The
Limited shall prepare and file ruling requests, and take all other actions on
behalf of any member of The Limited Group that it deems appropriate in providing
tax services to the members of The Limited Group. The Limited shall, to the
extent such information is available, advise Abercrombie & Fitch of any
significant Abercrombie & Fitch tax issue being contested by the federal, state,
local or other relevant taxing authorities, and shall keep Abercrombie & Fitch
informed with respect to any contest, compromise or settlement thereof.
ARTICLE III
POST-DECONSOLIDATION
(a) Abercrombie & Fitch covenants that on or after a Deconsolidation it will not, nor will it cause or permit any member of the Abercrombie & Fitch Group to make or change any tax election, change any accounting method, amend any tax return or take any tax position on any tax return, take any other action, omit to take any action or enter into any transaction that results in any increased tax liability or reduction of any Tax Asset of The Limited Group or any member thereof (immediately after the Deconsolidation) in respect of any Pre-Deconsolidation Tax Period, without first obtaining the written consent of an authorized representative of The Limited.
(b) In the event of a Deconsolidation, The Limited may, at its option,
elect and Abercrombie & Fitch shall join The Limited in electing (if necessary),
(i) to reattribute to itself certain Tax Assets of the Abercrombie & Fitch Group
pursuant to Treasury Regulations Section 1.1502-20(g) and, if The Limited makes
such election, Abercrombie & Fitch shall comply with the requirements of
Treasury Regulations Section 1.1502-20(g)(5)) and (ii) to ratably allocate items
(other than extraordinary items) of the Abercrombie & Fitch Group in accordance
with relevant provisions of the Treasury Regulations Section 1.1502-76. If The
Limited elects to reattribute to itself any Tax Assets under clause (i) this
Section 3.1(b), The Limited shall pay Abercrombie & Fitch an amount equal to the
actual tax saving (which would include refunds actually received) produced by
such Tax Asset if and when such actual tax saving is realized.
(c) The Limited agrees to pay to Abercrombie & Fitch the actual tax benefit received by The Limited Group from the use in any Pre-Deconsolidation Tax Period of a carryback of any Tax Asset of the Abercrombie & Fitch Group from a Post- Deconsolidation Tax Period. Such benefit shall be considered equal to the excess of (i) the amount of Federal Taxes or Combined State Taxes, as the case may be, that would have been payable by The Limited Group in the absence of such carryback over (ii) the amount of Federal Taxes or Combined State Taxes, as the case may be, actually payable by The Limited Group. Payment of the amount of such benefit shall be made within 90 days of the filing of the applicable tax return for the taxable year in which the Tax Asset is utilized. If, subsequent to the payment by The Limited to Abercrombie & Fitch of any such amount, there shall be (A) a Final Determination which results in a disallowance or a reduction of the Tax Asset so carried back or (B) a reduction in the amount of the benefit realized by The Limited Group as a result of any other Tax Asset that arises in a Post-Deconsolidation Tax Period, Abercrombie & Fitch shall repay to The Limited, within 90 days of such event described in (A) or (B) (an "Event" or, collectively, the "Events") any amount which would not have been payable to Abercrombie & Fitch pursuant to this Section 3.1(c) had the amount of the benefit been determined in light of the Events.
Abercrombie & Fitch shall hold The Limited harmless for any penalty or interest payable by any member of The Limited Group, as a result of any Event. Any such amount shall be paid by Abercrombie & Fitch to The Limited within 90 days of the payment by The Limited or any member of The Limited Group of any such interest or penalty. Nothing in this Section 3.1(c) shall require The Limited to file a claim for refund of Federal Taxes or Combined State Taxes which The Limited, in its sole discretion, determines lacks substantial authority, as defined in the Code and the regulations thereunder.
ARTICLE IV
MISCELLANEOUS
requesting party such assistance and documentation as may be reasonably requested by such party in connection with any of the activities described in Article II or Article III. In addition, The Limited and Abercrombie & Fitch shall retain all relevant tax records for relevant open periods in accordance with past practice.
by facsimile or other generally accepted means of electronic transmission (provided that a copy of any notice delivered pursuant to this clause (c) shall also be sent pursuant to clause (b), addressed as follows:
(a) If to Abercrombie & Fitch, to:
Abercrombie & Fitch Co.
Three Limited Parkway
Columbus, OH 43230
Attention: Timothy B. Lyons Fax: 614-479-7020
(b) If to The Limited, to:
The Limited, Inc.
Three Limited Parkway
Columbus, OH 43230
Attention: Timothy B. Lyons
Fax: 614-479-7020
or to such other addresses or telecopy numbers as may be specified by like notice to the other parties.
does not contravene or conflict with any provision of law or of its charter or bylaws or any agreement, instrument or order binding on such party.
IN WITNESS WHEREOF, each of the parties hereto has caused this agreement to be executed by a duly authorized officer as of the date first above written.
ABERCROMBIE & FITCH CO.
By: /s/ Kenneth B. Gilman _____________________________ Name: Kenneth B. Gilman Title: Vice Chairman |
THE LIMITED, INC.
By: /s/ Kenneth B. Gilman
_____________________________
Name: Kenneth B. Gilman
Title: Vice Chairman and Chief
Financial Officer
|
Exhibit 10.5
THIS CORPORATE AGREEMENT ("Agreement") is entered into as of October 1, 1996 by and between Abercrombie & Fitch Co., a Delaware corporation ("Abercrombie & Fitch"), and The Limited, Inc., a Delaware corporation ("The Limited").
RECITALS
WHEREAS, The Limited beneficially owns all of the issued and outstanding Abercrombie & Fitch Class B Common Stock, par value $0.01 per share ("Class B Common Stock"), and Abercrombie & Fitch is a member of The Limited's "affiliated group" of corporations ("Limited Group") for federal income tax purposes;
WHEREAS, Abercrombie & Fitch issued shares of Class A Common Stock, $0.01 par value per share ("Class A Common Stock"), to the public in an offering (the "Initial Public Offering") registered under the Securities Act of 1933, as amended; and
WHEREAS, the parties desire to enter into this Agreement to set forth their agreement regarding (i) The Limited's rights to purchase additional shares of Class B Common Stock upon any issuance of certain classes of capital stock of Abercrombie & Fitch to any person to permit The Limited to maintain its then current percentage ownership interest in Abercrombie & Fitch, (ii) The Limited's rights to purchase shares of non-voting classes of capital stock of Abercrombie & Fitch to permit The Limited to own 80 percent of each class of such stock outstanding, (iii) certain registration rights with respect to Class B Common Stock (and any other securities issued in respect thereof or in exchange therefor) and (iv) certain representations, warranties, covenants and agreements applicable to Abercrombie & Fitch so long as it is a subsidiary of The Limited.
AGREEMENTS
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, The Limited and Abercrombie & Fitch, for themselves, their successors and assigns, hereby agree as follows:
ARTICLE I
DEFINITIONS
"Abercrombie & Fitch" has the meaning ascribed thereto in the preamble hereto.
"Abercrombie & Fitch Entities" means Abercrombie & Fitch and its Subsidiaries and "Abercrombie & Fitch Entity" shall mean any of the Abercrombie & Fitch Entities.
"Affiliate" means, with respect to any Person, any Person controlling, controlled by or under common control with such Person. For purposes of this definition, "control" (including, with correlative meanings, the terms "controlled by" and "under common control with"), as applied to any Person, means the possession, directly or indirectly, of the power to vote a majority of the securities having voting power for the election of directors (or other Persons acting in similar capacities) of such Person or otherwise to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.
"Agreement" has the meaning ascribed thereto in the preamble hereto, as such agreement may be amended and supplemented from time to time in accordance with its terms.
"Class A Common Stock" has the meaning ascribed thereto in the recitals to this Agreement.
"Class B Common Stock" has the meaning ascribed thereto in the recitals to this Agreement.
"Class B Common Stock Option" has the meaning ascribed thereto in Section 2.1(a).
"Class B Common Stock Option Notice" has the meaning ascribed thereto in
Section 2.2.
"Common Stock" means the Class B Common Stock, the Class A Common Stock, any other class of Abercrombie & Fitch capital stock having the right to vote generally for the election of directors and, for so long as Abercrombie & Fitch continues to be a subsidiary corporation includible in a consolidated federal income tax return of the Limited Group, any other security of Abercrombie & Fitch treated as stock for purposes of Section 1504 of the Internal Revenue Code of 1986, as amended.
"Company Securities" has the meaning ascribed thereto in Section 3.2(b).
"Disadvantageous Condition" has the meaning ascribed thereto in Section 3.1(a).
"Holder" means The Limited and any Transferee.
"Holder Securities" has the meaning ascribed thereto in Section 3.2(b).
"Initial Public Offering" has the meaning ascribed thereto in the recitals to this Agreement.
"Initial Public Offering Date" means the date of completion of the initial sale of Class A Common Stock in the Initial Public Offering.
"Issuance Event" has the meaning ascribed thereto in Section 2.2.
"Issuance Event Date" has the meaning ascribed thereto in Section 2.2.
"Limited Entities" means The Limited and Subsidiaries of The Limited and "Limited Entity" shall mean any of the Limited Entities.
"Limited Group" has the meaning ascribed thereto in the recitals to this Agreement.
"Limited Ownership Reduction" means any decrease at any time in the Ownership Percentage to less than 50%.
"Limited Transferee" has the meaning ascribed thereto in Section 3.9.
"Market Price" of any shares of Class A Common Stock on any date means (i) the average of the last sale price of such shares on each of the five trading days immediately preceding such date on the Nasdaq National Market or, if such shares are not quoted thereon, on the principal national securities exchange or automated interdealer quotation system on which such shares are traded or (ii) if such sale prices are unavailable or such shares are not so traded, the value of such shares on such date determined in accordance with agreed-upon procedures reasonably satisfactory to Abercrombie & Fitch and The Limited.
"Nonvoting Stock" means any class of Abercrombie & Fitch capital stock not having the right to vote generally for the election of directors.
"Nonvoting Stock Option" has the meaning ascribed thereto in Section 2.1(b).
"Nonvoting Stock Option Notice" has the meaning ascribed thereto in Section 2.2.
"Other Holders" has the meaning ascribed thereto in Section 3.2(c).
"Other Securities" has the meaning ascribed thereto in Section 3.2.
"Person" means any individual, partnership, limited liability company, joint venture, corporation, trust, unincorporated organization, government (and any department or agency thereof) or other entity.
"Registrable Securities" means Class B Common Stock and any stock or other securities into which or for which such Class B Common Stock may hereafter be changed, converted or exchanged and any other shares or securities issued to Holders of such Class B Common Stock (or such shares or other securities into which or for which such shares are so changed, converted or exchanged) upon any reclassification, share combination, share subdivision, share dividend, share exchange, merger, consolidation or similar transaction or event or pursuant to the Nonvoting Stock Option. As to any particular Registrable Securities, such Registrable Securities shall cease to be Registrable Securities when (i) a registration statement with respect to the sale by the Holder thereof shall have been declared effective under the Securities Act and such securities shall have been disposed of in accordance with such registration statement, (ii) they shall have been distributed to the public in accordance with Rule 144, (iii) they shall have been otherwise transferred, new certificates for them not bearing a legend restricting further transfer shall have been delivered by Abercrombie & Fitch and subsequent disposition of them shall not require registration or qualification of them under the Securities Act or any state securities or blue sky law then in effect or (iv) they shall have ceased to be outstanding.
"Registration Expenses" means any and all expenses incident to performance of or compliance with any registration of securities pursuant to Article III, including, without limitation, (i) the fees, disbursements and expenses of Abercrombie & Fitch's counsel and accountants and the reasonable fees and expenses of counsel selected by the Holders in accordance with this Agreement in connection with the registration of the securities to be disposed of; (ii) all expenses, including filing fees, in connection with the preparation, printing and filing of the registration statement, any preliminary prospectus or final prospectus, any
other offering document and amendments and supplements thereto and the mailing
and delivering of copies thereof to any underwriters and dealers; (iii) the cost
of printing or producing any agreements among underwriters, underwriting
agreements, and blue sky or legal investment memoranda, any selling agreements
and any other documents in connection with the offering, sale or delivery of the
securities to be disposed of; (iv) all expenses in connection with the
qualification of the securities to be disposed of for offering and sale under
state securities laws, including the fees and disbursements of counsel for the
underwriters or the Holders of securities in connection with such qualification
and in connection with any blue sky and legal investment surveys; (v) the filing
fees incident to securing any required review by the National Association of
Securities Dealers, Inc. of the terms of the sale of the securities to be
disposed of; (vi) transfer agents' and registrars' fees and expenses and the
fees and expenses of any other agent or trustee appointed in connection with
such offering; (vii) all security engraving and security printing expenses;
(viii) all fees and expenses payable in connection with the listing of the
securities on any securities exchange or automated interdealer quotation system
or the rating of such securities; (ix) any other fees and disbursements of
underwriters customarily paid by the issuers of securities, but excluding
underwriting discounts and commissions and transfer taxes, if any; and (x) other
reasonable out-of-pocket expenses of Holders other than legal fees and expenses
referred to in clause (i) and (iv) above.
"Rule 144" means Rule 144 (or any successor rule to similar effect) promulgated under the Securities Act.
"Rule 415 Offering" means an offering on a delayed or continuous basis pursuant to Rule 415 (or any successor rule to similar effect) promulgated under the Securities Act.
"SEC" means the United States Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, or any successor statute.
"Selling Holder" has the meaning ascribed thereto in Section 3.5(e).
"Subsidiary" means, as to any Person, any corporation, association, partnership, joint venture or other business entity of which more than 50% of the voting capital stock or other voting ownership interests is owned or controlled directly or indirectly by such Person or by one or more of the Subsidiaries of such Person or by a combination thereof.
"The Limited" has the meaning ascribed thereto in the preamble hereto.
"Transferee" has the meaning ascribed thereto in Section 3.9.
ARTICLE II
OPTIONS
(b) Abercrombie & Fitch hereby grants to The Limited, on the terms and conditions set forth herein, a continuing right (the "Nonvoting Stock Option" and, together with the Class B Common Stock Option, the "Options") to purchase from Abercrombie & Fitch, at the times set forth herein, such number of shares of Nonvoting Stock as is necessary to allow the Limited Entities to own 80 percent of each class of outstanding Nonvoting Stock. The Nonvoting Stock Option shall be assignable, in whole or in part and from time to time, by The Limited to any Limited Entity. The exercise price for the shares of Nonvoting Stock purchased pursuant to the Nonvoting Stock Option shall be the price at which such Nonvoting Stock is then being sold to third parties or, if no Nonvoting Stock is being sold, the fair market value thereof as determined in good faith by the Board of Directors of Abercrombie & Fitch.
exercise of the Nonvoting Stock Option, would result in the Limited Entities owning less than 80 percent of each class of outstanding Nonvoting Stock, Abercrombie & Fitch will notify The Limited in writing (a "Nonvoting Stock Option Notice" and, together with a Class B Common Stock Option, an "Option Notice") of any plans it has to issue such shares or the date on which such event could first occur. Each Option Notice must specify the date on which Abercrombie & Fitch intends to issue such additional shares or on which such event could first occur (such issuance or event being referred to herein as an "Issuance Event" and the date of such issuance or event as an "Issuance Event Date"), the number of shares Abercrombie & Fitch intends to issue or may issue and the other terms and conditions of such Issuance Event.
ARTICLE III
REGISTRATION RIGHTS
(i) with respect to any registration statement filed, or to be filed, pursuant to this Section 3.1, if Abercrombie & Fitch shall furnish to the Holders of Registrable Securities that have made such request a certified resolution of the Board of Directors of Abercrombie & Fitch (adopted by the affirmative vote of a majority of the directors not designated by the Limited Entities) stating that in the Board of Directors' good faith judgment it would (because of the existence of, or in anticipation of, any acquisition or financing activity, or the unavailability for reasons beyond Abercrombie & Fitch's reasonable control of any required financial statements, or any other event or condition of similar significance to Abercrombie & Fitch) be significantly disadvantageous (a "Disadvantageous Condition") to Abercrombie & Fitch for such a registration statement to be maintained effective, or to be filed and become effective, and setting forth the general reasons for such judgment, Abercrombie & Fitch shall be entitled to cause such registration statement to be withdrawn and the effectiveness of such registration statement terminated, or, in the event no registration statement has yet been filed, shall be entitled not to file any such registration statement, until such Disadvantageous Condition no longer exists (notice of which Abercrombie & Fitch shall promptly deliver to such Holders). Upon receipt of any such notice of a
(ii) after the occurrence of the Limited Ownership Reduction, if any, the Holders of Registrable Securities may collectively exercise their rights under this Section 3.1 on not more than three occasions (it being acknowledged that prior to the Limited Ownership Reduction, if any, there shall be no limit to the number of occasions on which such Holders (other than any of the Limited Transferees and their Affiliates (other than the Limited Entities)) may exercise such rights); and
(iii) the Holders of Registrable Securities shall not have the right to exercise registration rights pursuant to this Section 3.1 in any six-month period following the registration and sale of Registrable Securities effected pursuant to a prior exercise of the registration rights provided in this Section 3.1.
(b) Notwithstanding any other provision of this Agreement to the contrary, a
registration requested by a Holder of Registrable Securities pursuant to this
Section 3.1 shall not be deemed to have been effected (and, therefore, not
requested for purposes of paragraph (a) above), (i) unless it has become
effective, (ii) if after it has become effective such registration is interfered
with by any stop order, injunction or other order or requirement of the SEC or
other governmental agency or court for any reason other than a misrepresentation
or an omission by such Holder and, as a result thereof, the Registrable
Securities requested to be registered cannot be completely distributed in
accordance with the plan of distribution set forth in the related registration
statement or (iii) if the conditions to closing specified in the purchase
agreement or underwriting agreement entered into in connection with such
registration are not satisfied or waived other than by reason of some act or
omission by such Holder of Registrable Securities.
(c) In the event that any registration pursuant to this Section 3.1 shall involve, in whole or in part, an underwritten offering, the Holders of a majority of the Registrable Securities to be registered shall have the right to designate an underwriter or underwriters as the lead or managing underwriters of such underwritten offering reasonably acceptable to Abercrombie & Fitch and, in connection with each registration pursuant to this Section 3.1, such Holders may select one counsel to represent all such Holders.
(d) Abercrombie & Fitch shall have the right to cause the registration of additional equity securities for sale for the account of any Person (including, without limitation,
(a) if, at any time after giving such written notice of its intention to register any Other Securities and prior to the effective date of the registration statement filed in connection with such registration, Abercrombie & Fitch shall determine for any reason not
to register the Other Securities, Abercrombie & Fitch may, at its election, give written notice of such determination to such Holders and thereupon Abercrombie & Fitch shall be relieved of its obligation to register such Registrable Securities in connection with the registration of such Other Securities, without prejudice, however, to the rights of the Holders of Registrable Securities immediately to request that such registration be effected as a registration under Section 3.1 to the extent permitted thereunder;
(b) if the registration referred to in the first sentence of this
Section 3.2 is to be an underwritten registration on behalf of Abercrombie &
Fitch, and a nationally recognized investment banking firm selected by
Abercrombie & Fitch advises Abercrombie & Fitch in writing that, in such firm's
good faith view, the inclusion of all or a part of such Registrable Securities
in such registration would be likely to have an adverse effect upon the price,
timing or distribution of the offering and sale of the Other Securities then
contemplated, Abercrombie & Fitch shall include in such registration: (i)
first, all Other Securities Abercrombie & Fitch proposes to sell for its own
account ("Company Securities"), (ii) second, up to the full number of
Registrable Securities held by Holders constituting the Limited Entities that
are requested to be included in such registration (Registrable Securities that
are so held being sometimes referred to herein as "Holder Securities") in excess
of the number of Company Securities to be sold in such offering which, in the
good faith view of such investment banking firm, can be sold without adversely
affecting such offering and the sale of the Other Securities then contemplated
(and (x) if such number is less than the full number of such Holder Securities,
such number shall be allocated by The Limited among such Limited Entities and
(y) in the event that such investment banking firm advises that less than all of
such Holder Securities may be included in such offering, such Limited Entities
may withdraw their request for registration of their Registrable Securities
under this Section 3.2 and 90 days subsequent to the effective date of the
registration statement for the registration of such Other Securities request
that such registration be effected as a registration under Section 3.1 to the
extent permitted thereunder), (iii) third, up to the full number of Registrable
Securities held by Holders (other than the Limited Entities) of Registrable
Securities that are requested to be included in such registration in excess of
the number of Company Securities and Holder Securities to be sold in such
offering which, in the good faith view of such investment banking firm, can be
so sold without so adversely affecting such offering (and (x) if such number is
less than the full number of such Registrable Securities, such number shall be
allocated pro rata among such Holders on the basis of the number of Registrable
Securities requested to be included therein by each such Holder and (y) in the
event that such investment banking firm advises that less than all of such
Registrable Securities may be included in such offering, such Holders may
withdraw their request for registration of their Registrable Securities under
this Section 3.2 and 90 days subsequent to the effective date of the
registration statement for the registration of such Other Securities request
that such registration be effected as a registration under Section 3.1 to the
extent permitted thereunder), and (iv) fourth, up to the full number of the
Other Securities (other than Company Securities), if any, in excess of the
number of Company Securities and Registrable Securities to be sold in such
offering which, in the good faith view of such investment banking firm, can be
so sold
without so adversely affecting such offering (and, if such number is less than the full number of such Other Securities, such number shall be allocated pro rata among the holders of such Other Securities (other than Company Securities) on the basis of the number of securities requested to be included therein by each such holder);
of such Other Securities request that such registration be effected as a registration under Section 3.l to the extent permitted thereunder);
(d) Abercrombie & Fitch shall not be required to effect any registration of Registrable Securities under this Section 3.2 incidental to the registration of any of its securities in connection with mergers, acquisitions, exchange offers, subscription offers, dividend reinvestment plans or stock option or other executive or employee benefit or compensation plans; and
(e) no registration of Registrable Securities effected under this
Section 3.2 shall relieve Abercrombie & Fitch of its obligation to effect a
registration of Registrable Securities pursuant to Section 3.1.
(a) prepare, file and use its best efforts to cause to become effective a registration statement under the Securities Act relating to the Registrable Securities to be offered;
(c) furnish to the Holders of Registrable Securities and to any underwriter of such Registrable Securities such number of conformed copies of such registration statement and of each such amendment and supplement thereto (in each case including all exhibits), such
number of copies of the prospectus included in such registration statement (including each preliminary prospectus and any summary prospectus), in conformity with the requirements of the Securities Act, such documents incorporated by reference in such registration statement or prospectus, and such other documents, as the Holders of Registrable Securities or such underwriter may reasonably request, and a copy of any and all transmittal letters or other correspondence to or received from, the SEC or any other governmental agency or self-regulatory body or other body having jurisdiction (including any domestic or foreign securities exchange) relating to such offering;
(e) (i) use its best efforts to furnish to each Holder of Registrable Securities included in such registration (each, a "Selling Holder") and to any underwriter of such Registrable Securities an opinion of counsel for Abercrombie & Fitch addressed to each Selling Holder and dated the date of the closing under the underwriting agreement (if any) (or if such offering is not underwritten, dated the effective date of the registration statement), and (ii) use its best efforts to furnish to each Selling Holder a "cold comfort" letter addressed to each Selling Holder and signed by the independent public accountants who have audited the financial statements of Abercrombie & Fitch included in such registration statement, in each such case covering substantially the same matters with respect to such registration statement (and the prospectus included therein) as are customarily covered in opinions of issuer's counsel and in accountants' letters delivered to underwriters in underwritten public offerings of securities and such other matters as the Selling Holders may reasonably request and, in the case of such accountants' letter, with respect to events subsequent to the date of such financial statements;
(f) as promptly as practicable, notify the Selling Holders in writing
(i) at any time when a prospectus relating to a registration pursuant to
Sections 3.1 or 3.2 is required to be delivered under the Securities Act of the
happening of any event as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, and (ii) of any request by the SEC or any
other regulatory body
or other body having jurisdiction for any amendment of or supplement to any registration statement or other document relating to such offering, and in either such case, at the request of the Selling Holders prepare and furnish to the Selling Holders a reasonable number of copies of a supplement to or an amendment of such prospectus as may be necessary so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they are made, not misleading:
(g) if reasonably requested by the lead or managing underwriters, use its best efforts to list all such Registrable Securities covered by such registration on each securities exchange and automated inter-dealer quotation system on which a class of common equity securities of Abercrombie & Fitch is then listed;
(h) to the extent reasonably requested by the lead or managing underwriters, send appropriate officers of Abercrombie & Fitch to attend any "road shows" scheduled in connection with any such registration, with all out- of-pocket costs and expense incurred by Abercrombie & Fitch or such officers in connection with such attendance to be paid by Abercrombie & Fitch; and
(i) furnish for delivery in connection with the closing of any offering of Registrable Securities pursuant to a registration effected pursuant to Sections 3.1 or 3.2 unlegended certificates representing ownership of the Registrable Securities being sold in such denominations as shall be requested by the Selling Holders or the underwriters.
benefit of such underwriters, shall also be made to and for the benefit of such Selling Holders. Such underwriting agreement shall also contain such representations and warranties by such Selling Holders and such other terms and provisions as are customarily contained in underwriting agreements with respect to secondary distributions, including, without limitation, indemnification and contribution provisions substantially to the effect and to the extent provided in Section 3.7.
(b) In connection with the preparation and filing of each registration statement registering Registrable Securities under the Securities Act pursuant to this Article III, Abercrombie & Fitch shall give the Holders of such Registrable Securities and the underwriters, if any, and their respective counsel and accountants, such reasonable and customary access to its books and records and such opportunities to discuss the business of Abercrombie & Fitch with its officers and the independent public accountants who have certified the financial statements of Abercrombie & Fitch as shall be necessary, in the opinion of such Holders and such underwriters or their respective counsel, to conduct a reasonable investigation within the meaning of the Securities Act; provided, that such Holders and the underwriters and their respective counsel and accountants shall use their reasonable best efforts to coordinate any such investigation of the books and records of Abercrombie & Fitch and any such discussions with Abercrombie & Fitch's officers and accountants so that all such investigations occur at the same time and all such discussions occur at the same time.
(b) In the case of each offering made pursuant to this Agreement, each Selling Holder, by exercising its registration rights hereunder, agrees to indemnify and hold harmless, and to cause each underwriter of Registrable Securities included in such offering (in the same manner and to the same extent as set forth in Section 3.7(a)) to agree to indemnify and hold harmless, Abercrombie & Fitch, each other underwriter who participates in such offering, each other Selling Holder or other holder with securities included in such offering and in the case of an underwriter, such Selling Holder or other holder, and each Person, if any, who controls any of the foregoing within the meaning of the Securities Act and the officers, directors, affiliates, employees and agents of each of the foregoing, against any and all losses, liabilities, costs, claims and damages to which they or any of them may become subject, under the Securities Act or otherwise, including any amount paid in settlement of any litigation commenced or threatened, insofar as such losses, liabilities, costs, claims and damages (or actions or proceedings in respect thereof, whether or not such indemnified Person is a party thereto) arise out of or are based upon any untrue statement or alleged untrue statement by such Selling Holder or underwriter, as the case may be, of a material fact contained in the registration statement (or in any preliminary or final prospectus included therein) or in any offering memorandum or other offering document relating to the offering and sale of such Registrable Securities prepared by Abercrombie & Fitch or at its direction, or any amendment thereof or supplement thereto, or any omission by such Selling Holder or underwriter, as the case may be, or alleged omission by such Selling Holder or underwriter, as the case may be, of a material fact required to be stated therein or necessary to make the statements therein not
against the indemnified party, without the prior written consent of the indemnified party, which consent shall not be unreasonably withheld. In any action hereunder as to which the indemnifying party has assumed the defense thereof with counsel satisfactory to the indemnified party, the indemnified party shall continue to be entitled to participate in the defense thereof, with counsel of its own choice, but the indemnifying party shall not be obligated hereunder to reimburse the indemnified party for the costs thereof.
(d) If the indemnification provided for in this Section 3.7 shall for any reason be unavailable (other than in accordance with its terms) to an indemnified party in respect of any loss, liability, cost, claim or damage referred to therein, then each indemnifying party shall, in lieu of indemnifying such indemnified party, contribute to the amount paid or payable by such indemnified party as a result of such loss, liability, cost, claim or damage (i) as between Abercrombie & Fitch and the Selling Holders on the one hand and the underwriters on the other, in such proportion as shall be appropriate to reflect the relative benefits received by Abercrombie & Fitch and the Selling Holders on the one hand and the underwriters on the other hand or, if such allocation is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits but also the relative fault of Abercrombie & Fitch and the Selling Holders on the one hand and the underwriters on the other with respect to the statements or omissions which resulted in such loss, liability, cost, claim or damage as well as any other relevant equitable considerations and (ii) as between Abercrombie & Fitch on the one hand and each Selling Holder on the other, in such proportion as is appropriate to reflect the relative fault of Abercrombie & Fitch and of each Selling Holder in connection with such statements or omissions as well as any other relevant equitable considerations. The relative benefits received by Abercrombie & Fitch and the Selling Holders on the one hand and the underwriters on the other shall be deemed to be in the same proportion as the total proceeds from the offering (net of underwriting discounts and commissions but before deducting expenses) received by Abercrombie & Fitch and the Selling Holders bear to the total underwriting discounts and commissions received by the underwriters, in each case as set forth in the table on the cover page of the prospectus. The relative fault of Abercrombie & Fitch and the Selling Holders on the one hand and of the underwriters on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by Abercrombie & Fitch and the Selling Holders or by the underwriters. The relative fault of Abercrombie & Fitch on the one hand and of each Selling Holder on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by such party, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission, but not by reference to any indemnified party's stock ownership in Abercrombie & Fitch. The amount paid or payable by an indemnified party as a result of the loss, cost, claim, damage or liability, or action in respect thereof, referred to above in this paragraph (d) shall be deemed to include, for purposes of this paragraph (d), any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending
any such action or claim. Abercrombie & Fitch and the Selling Holders agree that it would not be just and equitable if contribution pursuant to this Section 3.7 were determined by pro rata allocation (even if the underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in this paragraph. Notwithstanding any other provision of this Section 3.7, no Selling Holder shall be required to contribute any amount in excess of the amount by which the total price at which the Registrable Securities of such Selling Holder were offered to the public exceeds the amount of any damages which such Selling Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. Each Selling Holder's obligations to contribute pursuant to this Section 3.7 are several in proportion to the proceeds of the offering received by such Selling Holder bears to the total proceeds of the offering received by all the Selling Holders and not joint. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.
(e) Indemnification and contribution similar to that specified in the preceding paragraphs of this Section 3.7 (with appropriate modifications) shall be given by Abercrombie & Fitch, the Selling Holders and underwriters with respect to any required registration or other qualification of securities under any state law or regulation or governmental authority.
(f) The obligations of the parties under this Section 3.7 shall be in addition to any liability which any party may otherwise have to any other party.
Securities to which Registrable Securities are transferred, sold or assigned directly by a Limited Entity (such Transferee, a "Limited Transferee"), together with any Affiliate of such Limited Transferee (and any subsequent direct or indirect Transferees of Registrable Securities from such Limited Transferee and any Affiliates (other than the Limited Entities) thereof), shall be entitled to request the registration of Registrable Securities pursuant to Section 3.1 only once. Any transfer of registration rights pursuant to this Section 3.9 shall be effective upon receipt by Abercrombie & Fitch of (i) written notice from such Holder stating the name and address of any Transferee and identifying the number of Registrable Securities with respect to which the rights under this Agreement are being transferred and the nature of the rights so transferred and (ii) a written agreement from such Transferee to be bound by the terms of this Article III and Sections 5.3, 5.4, 5.9, 5.10, and 5.11 of this Agreement. The Holders may exercise their rights hereunder in such priority as they shall agree upon among themselves.
ARTICLE IV
CERTAIN COVENANTS AND AGREEMENTS
(b) Abercrombie & Fitch and The Limited agree to provide to the other any information and documentation requested by the other for the purpose of evaluating and ensuring compliance with Section 4.1(a) hereof.
(c) Notwithstanding the foregoing Sections 4.1(a) and 4.1(b), nothing in this Agreement is intended to limit or restrict in any way the ability of The Limited to effect, restrict or limit any action or proposed action of Abercrombie & Fitch, including, but not limited to, the incurrence by Abercrombie & Fitch of indebtedness, based upon The Limited's internal policies or other factors.
ARTICLE V
MISCELLANEOUS
requested, or (c) by facsimile or other generally accepted means of electronic transmission (provided that a copy of any notice delivered pursuant to this clause (c) shall also be sent pursuant to clause (b), addressed as follows:
(a) If to Abercrombie & Fitch, to:
Abercrombie & Fitch Co.
Four Limited Parkway
Reynoldsburg, OH 43068
Attention: Samuel P. Fried
Fax: 614-479-7188
(b) If to The Limited, to:
The Limited, Inc.
Three Limited Parkway
Columbus, OH 43230
Attention: Samuel P. Fried
Fax: 614-479-7188
with a copy to:
Davis Polk & Wardwell
450 Lexington Avenue
New York, NY 10017
Attention: Jeffrey Small
Fax: 212-450-4800
or to such other addresses or telecopy numbers as may be specified by like notice to the other parties.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and year first above written.
ABERCROMBIE & FITCH CO.
By: /s/ Kenneth B. Gilman
______________________________
Name: Kenneth B. Gilman
Title: Vice Chairman and Chief
Financial Officer
|
THE LIMITED, INC.
By: /s/ Kenneth B. Gilman
______________________________
Name: Kenneth B. Gilman
Title: Vice Chairman and Chief
Financial Officer
|
EXHIBIT 10.6
ABERCROMBIE & FITCH CO.
Incentive Compensation Plan
The Abercrombie & Fitch Co. Incentive Compensation Plan (the "Incentive Plan") is intended to satisfy the applicable provisions of Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"). The Incentive Plan shall be administered by the Compensation Committee (the "Committee") of the Board of Directors of Abercrombie & Fitch Co. (the "Company"). The Committee shall determine which key executives of the Company with significant operating and financial responsibility will be eligible to earn seasonal cash incentive compensation payments to be paid twice each year under the Incentive Plan. Neither Leslie H. Wexner nor Kenneth B. Gilman are eligible to participate in the Incentive Plan.
Prior to the beginning of each spring and fall selling season, the Committee may establish operating income and/or gross margin and/or sales objectives for the Company. These objectives must assume an increased performance level, and be based on an analysis of historical performance and growth expectations for the business, financial results of other comparable businesses, and progress towards achieving the long-range strategic plan for the business. These objectives and determination of results are based entirely on financial measures, and the Committee may not use any discretion to modify award results.
Annual incentive compensation targets may be established for eligible executives ranging from 10% to 110% of base salary, as established under the Company's pay guidelines. Executives may earn their target incentive compensation if the business achieves the established operating income and/or gross margin and/or sales objectives. The target incentive compensation percentage for each executive will be based on the level and functional responsibility of his or her position, size of the business for which the executive is responsible, and competitive practices, in that order of priority. The annual incentive compensation targets for the Company's eligible executive officers required to be named in the Company's proxy statement may range from 40% to 110% of base salary. The amount of incentive compensation paid to participating executives may range from zero to double their targets, based upon the extent to which operating income and/or gross margin and/or sales objectives are achieved or exceeded. The minimum level at which a participating executive will earn any incentive payment, and the level at which an executive will earn the maximum incentive payment of double the target, must be established by the Committee prior to the commencement of each bonus period. Actual payouts must
be based on a straight-line interpolation based on these minimum and maximum levels and the target operating income and/or gross margin and/or sales objectives.
The maximum dollar amount to be paid for any year under the Incentive Plan to any participant may not exceed $2,000,000.
[LETTERHEAD OF COOPERS & LYBRAND]
Securities and Exchange Commission
450 5th Street, N.W.
Judiciary Plaza
Washington, D.C. 20549
We are aware that our report dated December 11, 1996, on our review of the interim consolidated financial information of Abercrombie & Fitch Co. for the thirteen-week and thirty-nine-week periods ended November 2, 1996 and included in this Form 10-Q is incorporated by reference in the Company's registration statements on Form S-8, Registration Nos. 333-15941, 333-15943 and 333-15945. Pursuant to Rule 436(c) under the Securities Act of 1933, this report should not be considered a part of the registration statement prepared or certified by us within the meaning of Sections 7 and 11 of that Act.
/s/ COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
Columbus, Ohio
December 11, 1996
|
| ARTICLE 5 |
| This schedule contains summary information extracted from the Consolidated Financial Statements of Abercrombie & Fitch Co. and Subsidiaries for the quarter ended November 2, 1996 and is qualified in its entirety by reference to such financial statements. |
| MULTIPLIER: 1,000 |
| PERIOD TYPE | 9 MOS |
| FISCAL YEAR END | FEB 01 1997 |
| PERIOD START | FEB 04 1996 |
| PERIOD END | NOV 02 1996 |
| CASH | 1,816 |
| SECURITIES | 0 |
| RECEIVABLES | 3,109 |
| ALLOWANCES | 0 |
| INVENTORY | 51,339 |
| CURRENT ASSETS | 61,468 |
| PP&E | 93,294 |
| DEPRECIATION | 42,038 |
| TOTAL ASSETS | 113,948 |
| CURRENT LIABILITIES | 70,389 |
| BONDS | 50,000 |
| PREFERRED MANDATORY | 0 |
| PREFERRED | 0 |
| COMMON | 511 |
| OTHER SE | (9,408) |
| TOTAL LIABILITY AND EQUITY | 113,948 |
| SALES | 196,139 |
| TOTAL REVENUES | 196,139 |
| CGS | 132,236 |
| TOTAL COSTS | 132,236 |
| OTHER EXPENSES | 53,252 |
| LOSS PROVISION | 0 |
| INTEREST EXPENSE | 3,794 |
| INCOME PRETAX | 6,857 |
| INCOME TAX | 2,700 |
| INCOME CONTINUING | 4,157 |
| DISCONTINUED | 0 |
| EXTRAORDINARY | 0 |
| CHANGES | 0 |
| NET INCOME | 4,157 |
| EPS PRIMARY | .09 |
| EPS DILUTED | .09 |