☐
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Preliminary Proxy Statement
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☐
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Soliciting Material under §240.14a-12
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Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
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☒
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Definitive Proxy Statement
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☐
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Definitive Additional Materials
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Tapestry, Inc.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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☒
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No fee required.
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☐
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Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11
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(1)
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Title of each class of securities to which transaction applies:
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(2)
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Aggregate number of securities to which transaction applies:
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(3)
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on
which the filing fee is calculated and state how it was determined):
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(4)
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Proposed maximum aggregate value of transaction:
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(5)
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Total fee paid:
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☐
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Fee paid previously with preliminary materials.
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☐
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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(1)
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Amount previously paid:
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(2)
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Form, Schedule or Registration Statement No.:
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(3)
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Filing Party:
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(4)
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Date Filed:
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You are invited to join us for the 2020 Annual Meeting of
Stockholders of Tapestry, Inc., a Maryland corporation, at 9:00 a.m., Eastern Time, on November 5, 2020. This year, in light of the environment, we will be conducting our meeting exclusively online via live webcast at
www.virtualshareholdermeeting.com/TPR2020. As always, your vote is important. Please refer to the attached Notice of 2020 Annual Meeting of Stockholders and Proxy Statement for information detailing the matters to be considered and voted
upon at this year’s meeting.
Fiscal 2020 was a pivotal year for Tapestry. At the start of the fiscal year,
we embarked on a comprehensive review of our
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Susan Kropf
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Joanne Crevoiserat
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Susan Kropf
Chair of the Board of Directors
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Joanne Crevoiserat
Interim Chief Executive Officer
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1.
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2.
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3.
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4.
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5.
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To transact any other business that may properly come before the Annual Meeting or any postponement or adjournment thereof.
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Thursday, November 5, 2020
9:00 a.m. Eastern Time
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Held virtually online via live webcast at
www.virtualshareholdermeeting.com/TPR2020
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Record Date:
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Close of business on September 8, 2020
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Participating in the Annual Meeting:
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• We invite you to join the Annual Meeting online
via live webcast. There will not be a physical meeting. You will be able to participate in the virtual Annual Meeting online, vote your shares electronically and submit your questions during the Annual Meeting by visiting
www.virtualshareholdermeeting.com/
TPR2020. The webcast replay of the Annual Meeting will be available soon after the meeting on our Investor Relations website for at least 30 days.
• Please note that stockholders will need their
unique control number which appears on their Notice of Internet Availability of Proxy Materials, the proxy card (printed in the box and marked by the arrow), and the instructions that accompanied the proxy materials in order to vote
shares or ask questions prior to or at the Annual Meeting. If you are a beneficial owner and you do not have a control number, you must contact your broker or other financial institution to obtain a control number or voting instructions.
• Prior to the Annual Meeting, you may vote your
shares and submit pre-meeting questions online by visiting proxyvote.com and following the instructions on your proxy card.
• If you encounter any technical difficulties
during check-in or during the Annual Meeting, please call the technical support number that will be posted on www.virtualshareholdermeeting.com/
TPR2020.
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Voting:
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• Stockholders on the record date are entitled to
notice and to vote at the Annual Meeting. Each share of common stock is entitled to one vote for each director nominee and each of the other proposals.
• Please authorize a proxy to vote your shares as
soon as possible. If you are a beneficial owner of shares of our common stock, your broker will NOT be able to vote your shares with respect to any of the matters presented at the meeting other than the ratification of the selection of
our independent registered public accounting firm, unless you give your broker specific voting instructions.
• You do not need to participate in the Annual
Meeting to vote if you submitted your proxy in advance of the Annual Meeting.
• See the “Questions You May Have Regarding this Proxy Statement” section on page 8 of this proxy statement for more information.
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We have reduced SG&A and capital expenditures, are tightly managing inventories, have suspended Tapestry’s quarterly cash
dividend and share repurchase program and have drawn down $700 million from our $900 million revolving credit facility.
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We also implemented organizational cost cutting measures, including a reduction in our corporate and retail workforce,
elimination of merit salary increases and temporary salary reductions for fiscal year 2021, and made no payout under the Company’s annual incentive plan for fiscal year 2020. See Compensation
Discussion and Analysis for more information.
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We committed to taking the appropriate actions to protect the health and safety of our employees, customers and communities,
enhancing health and safety operating procedures at our distribution centers and stores, including additional training and protocols, adherence to social distancing measures and providing contact-free shopping opportunities when safe to
do so.
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We exited the year with fourth quarter results ahead of internal top and bottom line expectations, reflecting our effective
and values-led approach to navigating the Covid-19 pandemic; we re-opened the vast majority of our directly operated stores by year-end, drove strong e-commerce growth, expanded gross margin and achieved substantial SG&A savings. We
also ended the year with $1.4 billion in cash and equivalents.
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Sharpening our Focus on the Consumer: Operating with a clearly defined purpose and
strategy for each brand and an unwavering focus on the consumer at the core of everything we do.
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Leveraging Data and Leading with a Digital-First Mindset: Building significant data
and analytics capabilities to drive decision-making and increase efficiency; offering immersive customer experiences across our e-commerce and social channels to meet the needs of consumers who are increasingly utilizing digital
platforms to engage with brands; rethinking the role of stores with an intent to optimize our fleet.
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Transforming into a Leaner and More Responsive Organization: Acting with greater
agility, simplifying internal processes and empowering teams to act quickly to meet the rapidly changing needs of the consumer.
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I 2020 PROXY STATEMENT
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1
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PROXY SUMMARY
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2
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I 2020 PROXY STATEMENT
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PROXY SUMMARY
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Proposal
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Board Voting Recommendation
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Page Reference
(for more detail)
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FOR EACH NOMINEE
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FOR
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FOR
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FOR
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•
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All directors are independent
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•
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Bylaws contain Proxy Access provision
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•
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Bylaws may be amended by stockholders representing a majority of outstanding shares entitled to
vote
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•
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Strong independent Chair of the Board
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•
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Annual election of all directors
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Majority vote standard for uncontested director elections
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•
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Directors have significant board experience
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•
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Board oversight of risk management
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•
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Longstanding active stakeholder engagement
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•
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Rigorous director selection criteria, including outstanding achievement,
board experience, wisdom, integrity, analytical prowess, business expertise and commitment to board duties
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•
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Code of Conduct for ethical business policies and conduct
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•
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Robust Corporate Responsibility program with Board oversight
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•
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Regular executive sessions of independent directors
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•
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Regular Board, Committee and CEO evaluations
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I 2020 PROXY STATEMENT
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3
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PROXY SUMMARY
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Name
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Age
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Director
Since
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Principal
Occupation
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Independent
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Audit
Committee
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Human
Resources
Committee
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Governance and
Nominations
Committee
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Other Public
Company Boards
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71
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2006
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Retired President and Chief
Operating Officer of Avon Products
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• Kroger
• Sherwin Williams
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64
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2020
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Retired Chairman, President and
Chief Executive Officer of The
Hershey Company
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• Campbell Soup Company
• Colgate-Palmolive
• Elanco Animal Health
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47
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2018
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Retired Founder and Chief
Executive Officer of zulily, inc.
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55
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2014
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Executive Vice President and
Chief Financial Officer of Lowe's
Companies, Inc.
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60
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2017
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Retired President of MGA
Entertainment, Inc.
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• Kroger
• Raymond James Financial
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47
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2016
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Chief Executive of Bertelsmann
China Corporate Center; Managing
Partner of Bertelsmann Asia
Investments
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• BitAuto
• China Distance Education
• LexinFintech Holdings
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61
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2005
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Chief Executive of Diageo plc
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• Diageo
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Number of Meetings in fiscal year 2020
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7
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8
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5
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*
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Chair of the Board of Directors
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**
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Audit Committee Financial Expert
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Committee Chair
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Member
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4
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I 2020 PROXY STATEMENT
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PROXY SUMMARY
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2025 Corporate Responsibility Goals
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Our People
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Build diversity in North America Tapestry and brand leadership teams by increasing the number
of North America-based ethnic minority leaders to better reflect our general corporate population.
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Reduce differences in our Employee Inclusion Index scores based on gender and ethnicity.
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Demonstrate a focus on career progression, development and mobility by filling 60% of
leadership roles internally.
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Enable all employees to manage both their work and personal life balance by achieving a global
core benefit standard for self-care and parental and family leave policies.
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Our Planet
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Achieve a 20% reduction in absolute Scope 1 and Scope 2 CO2e emissions and achieve a 20% reduction in absolute Scope 3 CO2e emissions from freight shipping over a 2017
baseline.
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Attain 95% traceability and mapping of our raw materials to ensure a transparent and
responsible supply chain.
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Achieve 75% recycled content in packaging and reduce North America corporate and distribution
center waste by 25% over a 2017 baseline.
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Achieve a 10% reduction in water usage across Tapestry and our supply chain.
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Ensure that 90% of leather is sourced from silver-and gold-rated Leather Working Group
tanneries.
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Our Communities
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Dedicate 100,000 volunteer service hours to be completed by our employees around the globe.
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Give $75,000,000 in financial and product donations to nonprofit organizations globally.
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Provide 50,000 people crafting our products access to empowerment programs during the workday.
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•
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being listed on the Forbes 2020 “Best Employers for Diversity” list for the third consecutive year, and achieving our sixth
consecutive score of 100 on the Human Rights Campaign Corporate Equality Index (CEI) “Best Places to Work for LGBTQ Equality”;
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focusing on company-wide diversity and inclusion programs, such as establishing an Inclusion Council to ensure that employees
with diverse perspectives and backgrounds are included in business decisions and introducing employee training intended to help employees identify and address unconscious biases and drive inclusive behaviors;
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nearly tripling our Renewable Energy Certificate purchases, going from 1,335 MWh in fiscal year 2018 to 3,433 MWh;
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increasing our adoption of recycled polyester, diverting 27 million plastic bottles from landfills; and
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donating over $22 million via grants from the Coach Foundation and kate spade new york foundation, as well as through brand
product donation.
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I 2020 PROXY STATEMENT
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5
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PROXY SUMMARY
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Name & Principal Position*
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Salary
($)
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Bonus
($)
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Stock
Awards
($)
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Option
Awards
($)
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Non-Equity
Incentive Plan
Compensation
($)
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All Other
Compensation
($)
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Total
($)
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Joanne Crevoiserat
Interim Chief
Executive Officer
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785,769
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700,000
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2,800,002
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831,901
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0
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142,265
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5,259,937
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Andrea Shaw Resnick
Interim Chief
Financial Officer and Global Head of Investor Relations and Corporate Communications
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486,880
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104,000
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500,009
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0
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0
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37,202
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1,128,091
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Thomas Glaser
Chief Operations
Officer
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738,462
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200,000
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2,399,982
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623,926
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0
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89,986
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4,052,356
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Todd Kahn
Interim Chief
Executive Officer and Brand President, Coach; President and Chief Administrative Officer
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750,000
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0
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960,007
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665,522
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0
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22,662
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2,398,191
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Jide Zeitlin
Former Chairman and
Chief Executive Officer
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1,015,000
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0
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2,099,995
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1,400,242
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0
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111,623
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4,626,860
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Victor Luis
Former Chief
Executive Officer
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306,923
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0
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2,879,999
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1,996,561
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0
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2,918,303
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8,101,786
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Joshua Schulman
Former Chief
Executive Officer and Brand President, Coach
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975,000
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0
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1,500,005
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1,039,875
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0
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18,632
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| |
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3,533,512
|
|
6
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I 2020 PROXY STATEMENT
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PROXY SUMMARY
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•
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Aligning key employees to the same outcomes realized by our stockholders has been a hallmark of our compensation program, and
allows us to continue to attract, retain and reward the best talent in our industry.
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We generally grant long-term stock incentives annually to approximately 2,300 of our and our subsidiaries' employees around
the world, including our executive officers and most of our store managers, to motivate them to drive our long-term performance.
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•
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It will enable us to have an adequate number of shares available for awards that we anticipate using or making over the next
two years, as the remaining shares available for future awards under the Existing 2018 Plan will likely be insufficient to satisfy our long-term incentive compensation program needs. If the Share Increase is approved, a total of
51,693,835 shares of our common stock will be reserved for issuance under the Amended 2018 Plan, consisting of (i) 13,500,000 new shares reserved pursuant to the Share Increase, (ii) 32,248,639 shares reserved upon stockholder approval
of the Existing 2018 Plan (consisting of 10,500,000 shares reserved under the Existing 2018 Plan when it was adopted in 2018, 8,250,000 shares reserved under the Existing 2018 Plan when it was amended in 2019 and 13,498,639 shares
previously reserved under our prior incentive plan, the Amended and Restated Coach, Inc. 2010 Stock Incentive Plan (the “2010 Stock Incentive Plan”) that were not subject to outstanding awards), and (iii) 5,945,196 shares that were
underlying outstanding awards under prior stock incentive plans that were forfeited or expired since the Existing 2018 Plan originally became effective on November 8, 2018. Additionally, shares currently subject to awards outstanding
under our prior stock incentive plans may become available for grant under the Amended 2018 Plan if they are not issued due to forfeiture or expiration of the outstanding awards. Upon approval, 23,707,568 shares of common stock will be
available for issuance for new awards as of the Record Date.
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•
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If our stockholders do not approve the Share Increase, we may experience a shortfall of shares of our common stock available
for stock-based compensation awards. This shortfall could require us to replace the stock components of compensation with cash, which could reduce the alignment between key employees and stockholders and reduce our ability to retain and
reward the many employees who are critical to our long-term success.
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I 2020 PROXY STATEMENT
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7
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2.
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What information is contained in these materials?
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3.
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What proposals will be voted on at the meeting?
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1.
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2.
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3.
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4.
|
5.
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To transact such other business as may properly come before the Annual Meeting or any postponement or adjournment of the
Annual Meeting.
|
4.
|
Does the Board of Directors recommend voting in favor of the proposals?
|
5.
|
What shares can I vote?
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8
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I 2020 PROXY STATEMENT
|
QUESTIONS YOU MAY HAVE REGARDING THIS PROXY STATEMENT
|
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6.
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What classes of shares are entitled to be voted?
|
7.
|
What do I need to do now?
|
8.
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Do I need to attend the Annual Meeting?
|
9.
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How can I participate, vote and ask questions at the Annual Meeting?
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I 2020 PROXY STATEMENT
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9
|
QUESTIONS YOU MAY HAVE REGARDING THIS PROXY STATEMENT
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10.
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What constitutes a quorum, and why is a quorum required?
|
11.
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What is the voting requirement to approval the proposals?
|
12.
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What if I don't vote? What if I abstain? How are broker non-votes counted?
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10
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I 2020 PROXY STATEMENT
|
QUESTIONS YOU MAY HAVE REGARDING THIS PROXY STATEMENT
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14.
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Can I change my vote after I have delivered my proxy?
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15.
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If my shares are held in “street name” by my broker, will my broker vote my shares for me?
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16.
|
Who will count the votes?
|
17.
|
Where can I find voting results of the Annual Meeting?
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18.
|
Who will bear the costs of soliciting votes for the meeting?
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19.
|
Whom should I call with other questions?
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I 2020 PROXY STATEMENT
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11
|
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Name of Director
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Audit
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Human Resources
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Governance and
Nominations
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Susan Kropf(1)
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John P. Bilbrey(2)
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Darrell Cavens
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David Denton(3)
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Anne Gates(4)
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Annabelle Yu Long
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Ivan Menezes
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Committee Chair
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Member
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12
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I 2020 PROXY STATEMENT
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CORPORATE GOVERNANCE
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•
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is directly responsible for the appointment, compensation determination and oversight of Tapestry's independent accountants;
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•
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is directly responsible for pre-approving the audit and non-audit services rendered by the independent accountants;
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•
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provides oversight of, and has authority for selection and evaluation of, Tapestry's internal auditors;
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•
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meets independently with Tapestry's internal auditors, its independent accountants and senior management;
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•
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reviews the general scope of matters relating to Tapestry's accounting, financial reporting, internal control systems,
|
•
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reviews with Tapestry's Chief Executive Officer and Chief Financial Officer the matters required to be personally certified
by such officers in Tapestry’s public filings and the procedures followed to prepare for such certifications.
|
•
|
determines, approves and reports to the Board of Directors on all elements of compensation for Tapestry’s executive officers
and other key executives, including targeted total cash compensation and long-term equity-based incentives, and oversees the administration of various employee benefit and retirement plans, except as otherwise delegated by the Board or
the Committee;
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•
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reviews non-employee director compensation and benefits and recommends changes to the Board as necessary;
|
•
|
performs, or assists the Board in performing, the duties of the Board relating to the annual performance evaluations of the
Company’s executive officers;
|
•
|
monitors performance, talent development and succession for key executives; and
|
•
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consults, as needed, with third-party compensation consultants.
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|
| |
I 2020 PROXY STATEMENT
|
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13
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CORPORATE GOVERNANCE
|
|
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|
•
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the highest personal and professional ethics, integrity and values;
|
•
|
commitment to representing the long-term interests of the stockholders;
|
•
|
an inquisitive and objective perspective, practical wisdom and mature judgment;
|
•
|
freedom from significant conflicts of interest;
|
•
|
the willingness and ability to devote the time necessary to perform the duties and responsibilities of a director; and
|
•
|
a commitment to serve on the Board for an extended period of time.
|
14
|
| |
|
| |
I 2020 PROXY STATEMENT
|
CORPORATE GOVERNANCE
|
|
|
|
|
| |
I 2020 PROXY STATEMENT
|
| |
15
|
CORPORATE GOVERNANCE
|
|
|
|
16
|
| |
|
| |
I 2020 PROXY STATEMENT
|
CORPORATE GOVERNANCE
|
|
|
|
•
|
the same peer group used for executive compensation benchmarking, described below in the Compensation
Discussion & Analysis, and
|
•
|
general industry survey data (304 companies across industries with revenues between $2.5 billion and $10 billion), from the
2017-18 Director Compensation Report from the National Association of Corporate Directors.
|
|
| |
I 2020 PROXY STATEMENT
|
| |
17
|
CORPORATE GOVERNANCE
|
|
|
|
|
Compensation Element
|
| |
Annual Amount*
($)
|
| |
Received by
|
|
|
Basic annual retainer
|
| |
90,000
|
| |
All Outside Directors
|
|
|
Annual equity grant value(1)
|
| |
150,000
|
| |
All Outside Directors, except Ms. Long
|
|
|
Audit Committee Chair annual retainer
|
| |
30,000
|
| |
Mr. Denton through May 6, 2020; Ms. Gates for the remainder of the fiscal
year
|
|
|
HR Committee Chair annual retainer
|
| |
30,000
|
| |
Ms. Kropf through May 6, 2020; Mr. Denton for the remainder of the fiscal
year
|
|
|
GN Committee Chair annual retainer
|
| |
20,000
|
| |
Mr. Zeitlin through September 3, 2019; Ms. Kropf for the remainder of the
fiscal year
|
|
|
Non-executive Chair of the Board retainer(2)
|
| |
150,000
|
| |
Mr. Zeitlin through September 3, 2019; N/A for the remainder of the fiscal
year
|
|
|
Lead Independent Director
|
| |
30,000
|
| |
Ms. Kropf
|
|
|
Cash payment in lieu of annual equity grant
|
| |
150,000
|
| |
Ms. Long
|
|
•
|
Messrs. Denton and Menezes and Ms. Kropf had achieved the desired level of ownership; and
|
•
|
Mr. Cavens and Ms. Gates were making appropriate progress toward achieving the desired level of ownership (both had been
Outside Directors for less than five years).
|
18
|
| |
|
| |
I 2020 PROXY STATEMENT
|
CORPORATE GOVERNANCE
|
|
|
|
|
Name
|
| |
Fees
Paid in Cash(1)
($)
|
| |
Stock
Awards(2)
($)
|
| |
Option
Awards(2)
($)
|
| |
All Other
Compensation(3)
($)
|
| |
Total
($)
|
|
|
John P. Bilbrey
|
| |
0
|
| |
74,993
|
| |
75,001
|
| |
0
|
| |
149,994
|
|
|
Darrell Cavens
|
| |
90,000
|
| |
75,011
|
| |
75,016
|
| |
16,000
|
| |
256,027
|
|
|
David Denton
|
| |
120,000
|
| |
75,011
|
| |
75,016
|
| |
0
|
| |
270,027
|
|
|
Anne Gates
|
| |
90,000
|
| |
75,011
|
| |
75,016
|
| |
10,000
|
| |
250,027
|
|
|
Susan Kropf
|
| |
148,668
|
| |
75,011
|
| |
75,016
|
| |
10,000
|
| |
308,695
|
|
|
Annabelle Yu Long(4)
|
| |
240,000
|
| |
0
|
| |
0
|
| |
0
|
| |
240,000
|
|
|
Ivan Menezes
|
| |
90,000
|
| |
75,011
|
| |
75,016
|
| |
0
|
| |
240,027
|
|
|
Andrea Guerra(5)
|
| |
78,132
|
| |
75,011
|
| |
75,016
|
| |
0
|
| |
228,159
|
|
|
| |
I 2020 PROXY STATEMENT
|
| |
19
|
|
Name
|
| |
Age
|
| |
Position with Tapestry
|
|
|
Susan Kropf
|
| |
71
|
| |
Independent Chair of the Board of Directors
|
|
|
John P. Bilbrey
|
| |
64
|
| |
Director
|
|
|
Darrell Cavens
|
| |
47
|
| |
Director
|
|
|
David Denton
|
| |
55
|
| |
Director
|
|
|
Anne Gates
|
| |
60
|
| |
Director
|
|
|
Annabelle Yu Long
|
| |
47
|
| |
Director
|
|
|
Ivan Menezes
|
| |
61
|
| |
Director
|
|
20
|
| |
|
| |
I 2020 PROXY STATEMENT
|
PROPOSAL 1: ELECTION OF DIRECTORS
|
|
|
|
|
||||
|
|
| |
|
Chair of the Board of Directors
since 2020
Director Since 2006
Principal Occupation:
Retired President and
Chief Operating Officer of Avon Products
Board Committees:
Governance & Nominations (Chair)
Human Resources
|
| |
Skills and Experience
Leadership / Strategy
Public Company Board Service
Finance / Accounting
Mergers & Acquisitions
International
Marketing & Branding
Human Resources
Corporate Responsibility
|
|
|
||||
Susan Kropf served as
President and Chief Operating Officer of Avon Products from 2001 until January 2007, where she had P&L responsibility for Avon's worldwide operations. Before that, she was executive vice
president and chief operating officer, Avon North America and Global Business Operations, with responsibility for the company's North American operating business unit as well as global marketing, R&D, supply chain operations and information technology. Ms. Kropf also serves on the Board of Directors of Sherwin Williams
Co. and The Kroger Company. Within the last five years, she served as a director of Avon Products, Inc. Ms. Kropf holds a Bachelor of Arts degree from St. John's University and an M.B.A. in
finance from New York University.
Tapestry's Board
believes that Ms. Kropf is qualified to serve as a Director based on all of the experience described above, her experience as an executive officer of a major, publicly-traded, global consumer
products company, her strong financial background, and her extensive experience in manufacturing, marketing, supply chain operations, customer service and product development.
|
|
| |
I 2020 PROXY STATEMENT
|
| |
21
|
PROPOSAL 1: ELECTION OF DIRECTORS
|
|
|
|
|
||||
|
|
| |
|
Director Since 2020
Principal Occupation:
Retired Chairman, President and
Chief Executive Officer of
The Hershey Company
Board Committee:
Audit
|
| |
Skills & Experience
Leadership / Strategy
Public Company Board Service
Finance / Accounting
Mergers & Acquisitions
International
Marketing & Branding
Corporate Responsibility
|
|
|
| |||
John P. Bilbrey served
as President and Chief Executive Officer of The Hershey Company, a global confectionery leader and producer of snack products in the U.S., from 2011 until his retirement in March 2017. He also
served as Chairman of Hershey from 2015 until March 2017 and as Non-Executive Chairman from March 2017 to May 2018. Mr. Bilbrey joined the management
team of Hershey as Senior Vice President, President Hershey International in 2003, serving as Senior Vice President, President Hershey North America from 2007 to 2010 and Executive Vice
President and Chief Operating Officer from 2010 to 2011. He previously spent 22 years at The Procter & Gamble Company. Mr. Bilbrey serves on the Board of Directors of Campbell Soup Company, Colgate-Palmolive and Elanco Animal Health. Mr. Bilbrey holds a Bachelor of Science in Psychology from Kansas State University.
Tapestry’s Board
believes that Mr. Bilbrey is qualified to serve as a Director based on all of the experience described above, his experience as a chief executive officer of a large publicly-traded company, his
strong operational and financial background in consumer facing industries.
|
22
|
| |
|
| |
I 2020 PROXY STATEMENT
|
PROPOSAL 1: ELECTION OF DIRECTORS
|
|
|
|
|
||||
|
|
| |
|
Director Since 2018
Principal Occupation:
Retired Founder and
Chief Executive Officer
of zulily, inc.
Board Committee:
Human Resources
|
| |
Skills & Experience
Leadership / Strategy
Public Company Board Service
Mergers & Acquisitions
Retail Industry
Marketing & Branding
Human Resources
Technology & Digital
|
|
|
||||
Darrell Cavens was
President, New Ventures for the Qurate Retail Group from December 2017 until his retirement in September 2018. Mr. Cavens was previously President and Chief Executive Officer of zulily, inc.,
which he co-founded, from October 2009 until December 2017. From July 2008 to October 2009, Mr. Cavens served as the director of BizTalk Server at Microsoft.
From 1999 to 2008, Mr. Cavens held various positions at Blue Nile, most recently serving as Senior Vice President of Marketing and Technology. From 1996 to 1999, Mr. Cavens served as a staff
engineer within the Advanced Development team at Starwave Corp. Mr. Cavens serves on the Board of Directors of Deliveroo and Rad Power Bikes and as a member of the Advisory Board of Brooks Running. Mr. Cavens previously served, within the last five years, as a director of zulily, inc. Mr. Cavens attended the University of Victoria.
Tapestry’s Board
believes that Mr. Cavens is qualified to serve as a Director based on all of the experience described above, his experience as a chief executive officer and co-founder of a large
publicly-traded company, his strong background in online retailing, technology and data analytics and his understanding of the retail industry.
|
|
| |
I 2020 PROXY STATEMENT
|
| |
23
|
PROPOSAL 1: ELECTION OF DIRECTORS
|
|
|
|
|
||||
|
|
| |
|
Director Since 2014
Principal Occupation:
Executive Vice President and
Chief Financial Officer of
Lowe’s Companies, Inc.
Board Committees:
Human Resources (Chair)
Governance & Nominations
|
| |
Skills & Experience
Leadership / Strategy
Public Company Board Service
Finance / Accounting
Mergers & Acquisitions
Retail Industry
Human Resources
|
|
|
||||
David Denton currently
serves as Executive Vice President and Chief Financial Officer of Lowe’s Companies, Inc., responsible for corporate finance and treasury, strategy, real estate, accounting, tax, internal audit,
process excellence, enterprise risk management, and international and emerging business. Mr. Denton joined Lowes in 2018. Mr. Denton previously served as Executive Vice President and Chief Financial Officer of CVSHealth Corporation (f/k/a CVS Caremark). He joined CVS Caremark in 1999 and held various managerial roles throughout the
company. Previously, Mr. Denton was Senior Vice President and Controller/Chief Accounting Officer of CVS Caremark and served as Chief Financial Officer and Controller for PharmaCare, CVS Corporation’s legacy PBM subsidiary. Mr. Denton holds a Bachelor of Science degree in Business Administration from Kansas State University and an
M.B.A. from Wake Forest University.
Tapestry’s Board
believes that Mr. Denton is qualified to serve as a Director based on all of the experience described above, his experience as an executive officer of a large, publicly-traded, consumer-facing
company, his strong financial background, and understanding of the retail industry.
|
24
|
| |
|
| |
I 2020 PROXY STATEMENT
|
PROPOSAL 1: ELECTION OF DIRECTORS
|
|
|
|
|
||||
|
|
| |
|
Director Since 2017
Principal Occupation:
Retired President of MGA
Entertainment, Inc.
Board Committees:
Audit (Chair)
Governance & Nominations
|
| |
Skills & Experience
Leadership / Strategy
Public Company Board Service
Finance / Accounting
Mergers & Acquisitions
Retail Industry
International
Marketing & Branding
Technology & Digital
|
|
|
||||
Anne Gates was
President of MGA Entertainment, Inc., a privately held developer, manufacturer and marketer of toy and entertainment products for children, a position she held from 2014 through her retirement
in 2017. Ms. Gates held roles of increasing responsibility with The Walt Disney Company from 1991-2012. Her roles included Executive Vice President, Chief Financial Officer for Disney Consumer Products, Managing Director for Disney Consumer Products Europe and Emerging Markets, and Senior Vice President of operations, planning and
analysis for The Walt Disney Company. Prior to joining Disney, Ms. Gates worked for PepsiCo and Bear Stearns. Ms. Gates has over 25 years of experience in the retail and consumer products industry. In addition, Ms. Gates has a broad business background in finance, marketing, strategy and business development, including growing international
businesses. Ms. Gates serves on the Board of Directors of The Kroger Company and Raymond James Financial, Inc. She is also a member of the Boards of the University of California, Berkeley
Foundation, Cadre, Salzburg Global Seminar and PMG SoCal. Ms. Gates holds Bachelor of Arts in Mathematics from the University of California, Berkeley, and
an M.Sc. in Operations Research from Columbia University.
Tapestry’s Board
believes that Ms. Gates is qualified to serve as a Director based on all of the experience described above, her financial literacy and her broad business background in finance, marketing,
strategy and business development, including growing international businesses and her understanding of the retail and consumer products industries.
|
|
| |
I 2020 PROXY STATEMENT
|
| |
25
|
PROPOSAL 1: ELECTION OF DIRECTORS
|
|
|
|
|
||||
|
|
| |
|
Director Since 2016
Principal Occupation:
Chief Executive officer of
Bertelsmann China Corporate
Center and Managing Partner of
Bertelsmann Asia Investments
Board Committee:
Audit
|
| |
Skills and Experience
Leadership / Strategy
Public Company Board Service
Finance / Accounting
Mergers & Acquisitions
Retail Industry
International
Technology & Digital
|
|
|
||||
Annabelle Yu Long currently
serves as a member of Bertelsmann Group Management Committee, Chief Executive Officer of Bertelsmann China Corporate Center and Managing Partner of Bertelsmann Asia Investments. Formerly, Ms. Long was a Principal at Bertelsmann Digital Media Investments. She joined the international media,
services and education company via the Bertelsmann Entrepreneurs Program in 2005. From 1996 to 2003, Ms. Long was a Producer and Lead Anchor for the Sichuan
Broadcasting Group. From 1994 to 1996 she was a Producer and host for Chengdu People’s Radio Broadcasting. Ms. Long is an active member of the World Economic Forum’s Young Global Leaders
Advisory Council. In addition, she is a member of the Stanford Graduate School of Business Advisory Council. Ms. Long serves on the Board of Directors of Bitauto Holdings Limited, China Distance Education Holdings Limited and LexinFintech Holdings Ltd. Within the past five years Ms. Long served on the boards of Tuanche
Limited and iClick Interactive Asia Group Limited. Ms. Long holds a Bachelor of Science degree from the University of Electronic Science and Technology, Chengdu, China and an M.B.A. from
Stanford Graduate School of Business.
Tapestry’s Board
believes that Ms. Long is qualified to serve as a Director based on all the experience described above, her insight about the Chinese consumer and knowledge of and experience with the media
landscape in China, along with her track record of investing in digital and lifestyle companies.
|
26
|
| |
|
| |
I 2020 PROXY STATEMENT
|
PROPOSAL 1: ELECTION OF DIRECTORS
|
|
|
|
|
||||
|
|
| |
|
Director Since 2005
Principal Occupation:
Chief Executive of Diageo plc
Board Committees:
Governance & Nominations
Human Resources
|
| |
Skills & Experience
Leadership / Strategy
Public Company Board Service
Finance / Accounting
Mergers & Acquisitions
International
Marketing & Branding
Technology & Digital
Human Resources
Corporate Responsibility
|
|
|
||||
Ivan Menezes currently
serves as Executive Director and the Chief Executive of Diageo plc, a premium drinks company; he was appointed Chief Executive in July 2013 and has
been an Executive Director since July 2012. Prior to that, he held several executive and senior appointments at Diageo plc and was the Chief Operating Officer, Diageo plc since March 2012, the
Chairman, Diageo Latin America & Caribbean since July 2011, the Chairman, Diageo Asia Pacific since October 2008, and the President and Chief
Executive Officer of Diageo North America since January 2004. He previously served as President and Chief Operating Officer of Diageo North America from July 2002 and as President of Diageo,
Venture Markets since July 2000. Before joining Diageo in 1997, he held senior marketing positions with Whirlpool Europe, a manufacturer and marketer of major home appliances, in Milan and was a principal with Booz Allen Hamilton, Inc., a strategy and technology consulting firm, both in Chicago and in London. Mr. Menezes also serves as
an Executive Director on the Board of Directors of Diageo plc. Mr. Menezes holds a Bachelor of Arts degree
in Economics from St. Stephen’s College, Delhi, a post-graduate diploma from the Indian Institute of Management, Ahmedabad and an M.B.A. from Northwestern University’s Kellogg School of Management.
Tapestry’s Board
believes that Mr. Menezes is qualified to serve as a Director based on all of the experience described above, his experience as a chief executive of a major global consumer products company,
his strong financial background, and his proven track record of driving international growth and expansion.
|
|
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” EACH OF THE ABOVE NOMINEES FOR DIRECTOR.
|
|
|
| |
I 2020 PROXY STATEMENT
|
| |
27
|
|
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE RATIFICATION OF D&T AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL YEAR 2021.
|
|
|
|
| |
Fiscal Year 2019
|
| |
Fiscal Year 2020
|
|
|
Audit Fees(1)
|
| |
$7,428,000
|
| |
$4,944,000
|
|
|
Audit-Related Fees(2)
|
| |
265,000
|
| |
118,000
|
|
|
Tax Fees(3)
|
| |
1,781,000
|
| |
1,281,000
|
|
|
All Other Fees(4)
|
| |
—
|
| |
25,000
|
|
28
|
| |
|
| |
I 2020 PROXY STATEMENT
|
|
|
| |
Audit Committee
|
|
|
|
| |
|
|
|
|
| |
Anne Gates, Chair
John P. Bilbrey*
Annabelle Yu Long
|
|
|
| |
I 2020 PROXY STATEMENT
|
| |
29
|
|
Name
|
| |
Age
|
| |
Position
|
|
|
Joanne Crevoiserat
|
| |
56
|
| |
Interim Chief Executive Officer
|
|
|
Sarah Dunn
|
| |
60
|
| |
Global Human Resources Officer
|
|
|
Liz Fraser
|
| |
58
|
| |
Chief Executive Officer and Brand President, Kate Spade
|
|
|
Thomas Glaser
|
| |
59
|
| |
Chief Operations Officer
|
|
|
David Howard
|
| |
45
|
| |
Senior Vice President, General Counsel and Secretary
|
|
|
Todd Kahn
|
| |
56
|
| |
Interim Chief Executive Officer and Brand President, Coach; President and Chief Administrative
Officer
|
|
|
Andrea Shaw Resnick
|
| |
59
|
| |
Interim Chief Financial Officer and Global Head of Investor Relations and Corporate Communications
|
|
30
|
| |
|
| |
I 2020 PROXY STATEMENT
|
EXECUTIVE OFFICERS
|
|
|
|
|
| |
I 2020 PROXY STATEMENT
|
| |
31
|
|
Beneficial Owner
|
| |
Shares owned
|
| |
Percent of Class (%)
|
|
|
Vanguard(1)
|
| |
31,350,098
|
| |
11.2
|
|
|
FMR(2)
|
| |
28,296,519
|
| |
10.1
|
|
|
Blackrock(3)
|
| |
19,025,678
|
| |
6.8
|
|
|
State Street(4)
|
| |
14,446,054
|
| |
5.2
|
|
|
T. Rowe Price Associates (5)
|
| |
14,355,968
|
| |
5.1
|
|
|
Joanne Crevoiserat(6)
|
| |
68,450
|
| |
*
|
|
|
Andrea Shaw Resnick(7)
|
| |
184,972
|
| |
*
|
|
|
Tom Glaser(8)
|
| |
53,173
|
| |
*
|
|
|
Todd Kahn(9)
|
| |
458,233
|
| |
*
|
|
|
Jide Zeitlin(10)
|
| |
227,286
|
| |
*
|
|
|
Victor Luis(11)
|
| |
1,995,041
|
| |
*
|
|
|
Joshua Schulman(12)
|
| |
176,104
|
| |
*
|
|
|
John P. Bilbrey
|
| |
28,880
|
| |
*
|
|
|
Darrell Cavens(13)
|
| |
26,171
|
| |
*
|
|
|
David Denton(14)
|
| |
88,054
|
| |
*
|
|
|
Anne Gates(15)
|
| |
20,299
|
| |
*
|
|
|
Susan Kropf(16)
|
| |
97,253
|
| |
*
|
|
|
Annabelle Yu Long(17)
|
| |
31,659
|
| |
*
|
|
|
Ivan Menezes(18)
|
| |
116,883
|
| |
*
|
|
|
All Directors and Executive Officers as a Group (17 people)(19)
|
| |
3,876,187
|
| |
1.4
|
|
32
|
| |
|
| |
I 2020 PROXY STATEMENT
|
TAPESTRY STOCK OWNERSHIP BY CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
|
|
|
|
|
| |
I 2020 PROXY STATEMENT
|
| |
33
|
|
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE RESOLUTION APPROVING THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS..
|
|
34
|
| |
|
| |
I 2020 PROXY STATEMENT
|
|
Name
|
| |
Title
|
|
|
Joanne Crevoiserat(1)
|
| |
Interim Chief Executive Officer
|
|
|
Andrea Shaw Resnick(2)
|
| |
Interim Chief Financial Officer and Global Head of Investor Relations and Corporate Communications
|
|
|
Thomas Glaser
|
| |
Chief Operations Officer
|
|
|
Todd Kahn
|
| |
Interim Chief Executive Officer and Brand President, Coach; President and Chief Administrative
Officer
|
|
|
Jide Zeitlin(3)
|
| |
Former Chairman and Chief Executive Officer
|
|
|
Victor Luis(4)
|
| |
Former Chief Executive Officer
|
|
|
Joshua Schulman(5)
|
| |
Former Chief Executive Officer and Brand President, Coach
|
|
|
|
| |
Page
|
|
| | | | ||
| | | | ||
| | | | ||
| | | | ||
| | | | ||
| | | |
|
| |
I 2020 PROXY STATEMENT
|
| |
35
|
COMPENSATION DISCUSSION AND ANALYSIS
|
|
|
|
•
|
Implemented temporary salary reductions for fiscal year 2021, including a 50% salary reduction for Mr. Zeitlin prior to his
departure from the Company, a 50% reduction in cash compensation for our Board of Directors and reductions ranging from 5% to 20% for all corporate employees above a salary threshold.
|
•
|
Determined not to pay out bonuses under the fiscal year 2020 Annual Incentive Plan; no shares were earned under performance
restricted stock units with performance periods ending in fiscal year 2020.
|
•
|
Eliminated merit salary increases for all employees for fiscal year 2021.
|
•
|
Reduced the size of our corporate and retail workforce, and furloughed retail assistant store managers and sales associates
whose stores had not re-opened by May 30, 2020.
|
•
|
Chief Executive Officer: In September 2019, we announced that
Jide Zeitlin, then Chairman of Tapestry's Board of Directors, had been appointed Chairman and Chief Executive Officer, succeeding Victor Luis, who left the Company and the Board of Directors at that time. In July 2020, Mr. Zeitlin
resigned his position as Chairman and Chief Executive Officer for personal reasons, unrelated to the financial operations of the Company. We appointed Joanne Crevoiserat, the Company's Chief Financial Officer, as Interim Chief Executive
Officer.
|
•
|
Chief Financial Officer: In August 2019, Ms. Crevoiserat joined
the Company as Chief Financial Officer, succeeding Ms. Resnick, who had been serving as interim Chief Financial Officer since February 2019. In July 2020, Andrea Shaw Resnick was appointed Interim Chief Financial Officer, in addition to
her role as Global Head of Investor Relations, concurrently with Ms. Crevoiserat's appointment as Interim Chief Executive Officer.
|
•
|
Chief Operations Officer: In July 2019, Tom Glaser joined the
Company as Chief Operations Officer, a newly created role leading our Supply Chain and Information Technology teams.
|
36
|
| |
|
| |
I 2020 PROXY STATEMENT
|
COMPENSATION DISCUSSION AND ANALYSIS
|
|
|
|
•
|
Brand Leadership:
|
•
|
In February 2020, we announced that Liz Fraser had been appointed as Chief Executive Offer and Brand President, Kate Spade,
succeeding Anna Bakst, who departed the Company, and that Giorgio Sarné, the Company's President, Tapestry Asia and President & CEO Coach Asia had been promoted to Chief Executive Officer and Brand President, Stuart Weitzman,
succeeding Eraldo Poletto, who departed the Company.
|
•
|
In July 2020, Todd Kahn was appointed as Chief Executive Officer and Brand President, Coach in an
|
|
|
| |
Fiscal Year 2020 Results(1)
($ in millions, except per share amounts)
|
| |||||||||
|
Measure
|
| |
GAAP
|
| |
Non-GAAP
|
| |
Change Versus
Fiscal Year 2019
on a GAAP
Basis
|
| |
Change Versus
Fiscal Year 2019
on a Non-GAAP
Basis
|
|
|
Net sales
|
| |
$4,961.4
|
| |
$4,961.4
|
| |
(18)%
|
| |
(18)%
|
|
|
Diluted earnings per share
|
| |
$(2.34)
|
| |
$0.97
|
| |
NM
|
| |
(62)%
|
|
|
Annual cash dividend
|
| |
$1.013 per share as of
June 27, 2020
|
| |
(25)%
|
| ||||||
|
Total stockholder return(2)
|
| |
|
| |
|
| |
(58.7)%
|
| |
|
|
|
| |
I 2020 PROXY STATEMENT
|
| |
37
|
COMPENSATION DISCUSSION AND ANALYSIS
|
|
|
|
38
|
| |
|
| |
I 2020 PROXY STATEMENT
|
COMPENSATION DISCUSSION AND ANALYSIS
|
|
|
|
|
What We Do
|
| |
What We Don’t Do
|
| ||||||
|
|
| |
Pay for Performance.
|
| |
|
| |
No Excise Tax Gross Ups Upon Change in Control.
|
|
|
|
| |
Minimum Stock Ownership Policy for NEOs.
|
| |
|
| |
No Excessive Executive Perquisites.
|
|
|
|
| |
Double Trigger Equity Acceleration
Upon a Change-in-Control.
|
| |
|
| |
No Tax Gross Ups on Perquisites or Benefits.
|
|
|
|
| |
Independent Consultant Retained by HR Committee.
|
| |
|
| |
No Payment of Dividends on Unvested
Long-term Incentives.
|
|
|
|
| |
Regular Review of Share Utilization.
|
| |
|
| |
No Repricing of Underwater Stock
Options Without Stockholder Approval.
|
|
|
|
| |
Maintain a Clawback Policy.
|
| |
|
| |
No Inclusion of Long-term Incentive
Awards in Severance or Retirement Benefit Calculations.
|
|
|
|
| |
Minimum Required Notice Period for
voluntary resignations of NEOs.
|
| |
|
| |
No Permitted Hedging, Short Sales or
Derivative Transactions in Company stock.
|
|
|
|
| |
Balance of short and long-term performance metrics.
|
| |
|
| |
No guaranteed salary increases for NEOs.
|
|
|
|
| |
Annual Say on Pay vote.
|
| |
|
| |
No Fixed Term or Evergreen NEO Employment.
|
|
|
|
| |
Regular stockholder outreach.
|
| |
|
| |
|
|
•
|
Reward performance, with performance-based pay constituting a significant portion of total compensation;
|
•
|
Support the attainment of the Company’s short- and long-term strategic and financial objectives;
|
•
|
Align NEOs’ interests with those of our stockholders and encourage ownership of Company stock by our NEOs;
|
•
|
Reward NEOs for achieving the challenging financial and strategic targets that we believe ultimately will drive stockholder
value;
|
•
|
Enable us to attract, retain and reward the best talent in the luxury retail industry, which is necessary to profitably grow
our business and drive stockholder value; and
|
•
|
Be competitive with our peer companies.
|
|
| |
I 2020 PROXY STATEMENT
|
| |
39
|
COMPENSATION DISCUSSION AND ANALYSIS
|
|
|
|
|
Compensation
Component
|
| |
Reason to Provide
|
| |
Performance
Based
|
| |
Not-
Performance
Based
|
| |
Value Linked
to Stock
Price
|
| |
Value
Linked to
Operating
Results
|
|
|
Annual
Incentive
|
| |
Rewards for achieving the annual financial performance goals established by
the HR Committee early in each fiscal year.
|
| |
|
| |
|
| |
|
| |
|
|
|
Long-term Incentive: PRSUs
|
| |
Granted to drive focus on Tapestry’s long-term performance, align executive
rewards with stockholders, and link explicitly to achievement of long term value creation.
|
| |
|
| |
|
| |
|
| |
|
|
|
Long-term Incentive: RSUs
|
| |
Granted to encourage retention. Although the number of shares earned is
fixed, provided the executive is still employed, their value rises and falls with the price of our common stock, adding a performance element.
|
| |
|
| |
|
| |
|
| |
|
|
|
Long-term Incentive: Stock Options
|
| |
Granted to drive focus on Tapestry’s long-term performance and align
executive rewards with stockholders. Stock options have value only when our stock price increases from the price on the date of grant so they are a critical motivational tool to support Tapestry’s success and growth; we utilize stock
options because of this strong pay for performance relationship.
|
| |
|
| |
|
| |
|
| |
|
|
|
Base salary
|
| |
Competitive base salaries are necessary to attract and retain qualified,
high-performing executives. Prior experience, scope of responsibility and performance are key elements considered in setting base salaries.
|
| |
|
| |
|
| |
|
| |
|
|
|
Benefits & Limited Perquisites
|
| |
Competitive benefits and modest perquisites are necessary to attract and
retain qualified, high-performing executives.
|
| |
|
| |
|
| |
|
| |
|
|
40
|
| |
|
| |
I 2020 PROXY STATEMENT
|
COMPENSATION DISCUSSION AND ANALYSIS
|
|
|
|
|
Compensation Program Changes
|
| |
Rationale
|
|
|
For Fiscal Year 2020
|
| |
|
|
|
Awarded no salary increases for fiscal year 2020 for NEOs, as part of the
annual review in September 2019.
|
| |
Ongoing expense control.
|
|
|
Approved the Tapestry, Inc. Special Severance Plan to provide benefits to a
select group of employees at the level of Vice President and higher in the event their employment is terminated within 24 months following a change in control, with multiples of .75 to 2.5 times cash compensation.
Increased period during which employees will receive double trigger change
in control treatment upon termination from 12 to 24 months for equity awards (LTI) granted in August 2019 and later.
|
| |
Encourage retention and focus of employees in the event of any potential
change in control; update to reflect contemporary market practice.
To drive retention during a period of extreme uncertainty and leadership
transition.
|
|
|
For Fiscal Year 2021
|
| |
|
|
|
Announced temporary reduction of base salaries effective June 28, 2020 for
up to 12 months for all NEOs as part of our response to the Covid-19 pandemic: Mr. Zeitlin's salary was reduced 50%; Ms. Crevoiserat, Mr. Kahn and Mr. Schulman's salaries were reduced 20% and Ms. Resnick's salary was reduced 15%.
|
| |
Cash preservation in response to Covid-19 pandemic.
|
|
|
| |
I 2020 PROXY STATEMENT
|
| |
41
|
COMPENSATION DISCUSSION AND ANALYSIS
|
|
|
|
|
Compensation Program Changes
|
| |
Rationale
|
|
|
Awarded temporary salary increases and target AIP percent increases, and
made retention RSU grants to Mses. Crevoiserat and Resnick and Mr. Kahn for taking on Interim roles of Tapestry CEO, CFO and Coach Brand President, respectively.
|
| |
To recognize increased responsibility and retain these leaders in critical
interim leadership roles.
|
|
|
For the August 2020 annual long-term incentive award, granted three-year
cliff vesting RSUs instead of performance RSUs (PRSUs) to Mses. Crevoiserat and Resnick and Messrs. Glaser and Kahn and other senior executives. The Committee intends to return to its normal practice of granting PRSUs as an important part
of regular long-term incentives in August 2021.
|
| |
To drive retention during a period of extreme uncertainty and leadership
transition.
|
|
|
Granted special Acceleration Program PRSU awards to approximately 100
Corporate employees, including Mses. Crevoiserat and Resnick and Messrs. Glaser and Kahn. These awards may be earned from 0% to 200% of target, subject to the Company's achievement of two-year net income and return on net assets targets.
Grants to the NEOs ranged from $200,000 to $500,000.
|
| |
To incentivize the team responsible for achieving the goals and financial
outcomes of the Company's Acceleration Program, which, if successful, we expect to result in significant stockholder value creation through accelerated revenue growth and enhanced profitability across the portfolio of brands. These PRSUs
have a wider than typical performance curve to provide opportunity for payout over a wider range of performance results during a period of extreme uncertainty due to the Covid-19 pandemic.
|
|
|
For the AIP, revised the performance curves and replaced Diluted EPS as a
metric with Inventory Turns.
|
| |
To provide opportunity for AIP payout over a wider range of performance
results during a period of extreme uncertainty due to the Covid-19 pandemic; and to focus and reward all employees on Inventory Turns as a key performance indicator.
|
|
|
Named Executive Officer
|
| |
FY20 Base
Salary Rate(2)
|
| |
FY20 Salary
Increase
|
| |
Salary Rate
Effective
Date
|
| |||
|
Joanne Crevoiserat
|
| |
$900,000
|
| |
n/a
|
| |
|
| |
August 1, 2019
|
|
|
Andrea Shaw Resnick
|
| |
486,880
|
| |
0.0%
|
| |
|
| |
August 26, 2018
|
|
|
Thomas Glaser
|
| |
800,000
|
| |
n/a
|
| |
|
| |
July 15, 2019
|
|
|
Todd Kahn
|
| |
750,000
|
| |
0.0%
|
| |
|
| |
May 1, 2016
|
|
|
Jide Zeitlin(1)
|
| |
1,300,000
|
| |
n/a
|
| |
|
| |
September 4, 2019
|
|
|
Victor Luis(1)
|
| |
1,400,000
|
| |
0.0%
|
| |
|
| |
August 26, 2018
|
|
|
Joshua Schulman(1)
|
| |
975,000
|
| |
0.0%
|
| |
|
| |
August 26, 2018
|
|
42
|
| |
|
| |
I 2020 PROXY STATEMENT
|
COMPENSATION DISCUSSION AND ANALYSIS
|
|
|
|
|
|
| |
|
| |
|
| |
Component and its Weight as a Percent of
Each NEO's “Target Annual Incentive
|
| |||
|
Named Executive Officer(1)
|
| |
Business Area
|
| |
Target Annual
Incentive as a %
of Salary Earned
|
| |
Tapestry, Inc.
Component
|
| |
Brand
Component
|
|
|
Joanne Crevoiserat
|
| |
Tapestry, Inc.
|
| |
100.0%
|
| |
100%
|
| |
|
|
|
Andrea Shaw Resnick
|
| |
Tapestry, Inc.
|
| |
60.0%
|
| |
100%
|
| |
|
|
|
Thomas Glaser
|
| |
Tapestry, Inc.
|
| |
100.0%
|
| |
100%
|
| |
|
|
|
Todd Kahn
|
| |
Tapestry, Inc.
|
| |
100.0%
|
| |
100%
|
| |
|
|
|
Jide Zeitlin
|
| |
Tapestry, Inc.
|
| |
150.0%
|
| |
100%
|
| |
|
|
|
Victor Luis
|
| |
Tapestry, Inc.
|
| |
175.0%
|
| |
100%
|
| |
|
|
|
Joshua Schulman
|
| |
Coach
|
| |
125.0%
|
| |
25%
|
| |
75%
|
|
|
| |
I 2020 PROXY STATEMENT
|
| |
43
|
COMPENSATION DISCUSSION AND ANALYSIS
|
|
|
|
|
($ in millions except per share amounts)
|
| |
Weight
|
| |
Fiscal Year 2019
Results(1)
|
| |
Fiscal Year 2020 Award Targets(2)(3)
|
| |
Fiscal Year
2020
Results(3)
|
| |
Payout as a
% of Target
Incentive
|
| ||||||
|
Threshold
|
| |
Target
|
| |
Maximum
|
| |||||||||||||||
|
Net sales
|
| |
25%
|
| |
$6,027.1
|
| |
$5,960.5
|
| |
$6,274.2
|
| |
$6,399.7
|
| |
$4,973.5
|
| |
0.0%
|
|
|
vs. prior year
|
| |
|
| |
|
| |
|
| |
4%
|
| |
|
| |
(17)%
|
| |
|
|
|
Operating income
|
| |
50%
|
| |
945.4
|
| |
814.6
|
| |
958.4
|
| |
1,054.2
|
| |
438.6
|
| |
0.0%
|
|
|
vs. prior year
|
| |
|
| |
|
| |
|
| |
1%
|
| |
|
| |
(54)%
|
| |
|
|
|
Diluted earnings per share
|
| |
25%
|
| |
2.57
|
| |
2.23
|
| |
2.62
|
| |
2.88
|
| |
1.01
|
| |
0.0%
|
|
|
vs. prior year
|
| |
|
| |
|
| |
|
| |
2%
|
| |
|
| |
(61)%
|
| |
|
|
|
Weighted average payout as a % of Target:
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
0.0%
|
|
|
|
| |
Weight
|
| |
Fiscal Year 2019
Results(1)
|
| |
Fiscal Year 2020 Award Targets(2)(3)
|
| |
Fiscal Year
2020
Results(3)
|
| |
Payout as a %
of Target
Incentive
|
| ||||||
|
($ in millions)
|
| |
Threshold
|
| |
Target
|
| |
Maximum
|
| ||||||||||||
|
Net sales
|
| |
50%
|
| |
$4,270.9
|
| |
$4,161.1
|
| |
$4,380.1
|
| |
$4,467.7
|
| |
$3,534.5
|
| |
0.0%
|
|
|
vs. prior year
|
| |
|
| |
|
| |
|
| |
3%
|
| |
|
| |
(17%)
|
| |
|
|
|
Operating income
|
| |
50%
|
| |
$1,157.4
|
| |
$994.3
|
| |
$1,169.8
|
| |
$1,286.8
|
| |
$787.7
|
| |
0.0%
|
|
|
vs. prior year
|
| |
|
| |
|
| |
|
| |
1%
|
| |
|
| |
(32%)
|
| |
|
|
|
Weighted average payout as a % of Target:
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
0.0%
|
|
44
|
| |
|
| |
I 2020 PROXY STATEMENT
|
COMPENSATION DISCUSSION AND ANALYSIS
|
|
|
|
•
|
Cumulative net income on a non-GAAP basis (weighted at 75%); and
|
•
|
Average return on net assets “RONA” (weighted at 25%). RONA is a non-GAAP measure designed to measure how effectively the
Company manages its deployed assets. The numerator for RONA is non-GAAP earnings before interest, taxes, depreciation, amortization and rent (“EBITDAR”); the denominator is fixed assets (which includes an adjustment for operating
leases) plus working capital (which excludes cash and cash equivalents, short term investments and current debt).
|
|
| |
I 2020 PROXY STATEMENT
|
| |
45
|
COMPENSATION DISCUSSION AND ANALYSIS
|
|
|
|
|
|
| |
FY20 Long-Term Incentive Awards
|
| |
|
| |||||||||||||||
|
|
| |
Stock Options
|
| |
Target PRSUs
|
| |
RSUs(1)
|
| |
Total
|
| |||||||||
|
Named Executive Officer
|
| |
Shares
|
| |
Grant Value
|
| |
Shares
|
| |
Grant Value
|
| |
Shares
|
| |
Grant Value
|
| |
Grant Value
|
|
|
Joanne Crevoiserat
|
| |
224,081
|
| |
$831,901
|
| |
38,150
|
| |
$800,006
|
| |
76,546
|
| |
$1,999,995
|
| |
$3,631,902
|
|
|
Andrea Shaw Resnick
|
| |
—
|
| |
0
|
| |
7,948
|
| |
166,670
|
| |
15,896
|
| |
333,339
|
| |
500,009
|
|
|
Thomas Glaser
|
| |
168,061
|
| |
623,926
|
| |
28,612
|
| |
599,994
|
| |
68,185
|
| |
1,799,988
|
| |
3,023,908
|
|
|
Todd Kahn
|
| |
179,265
|
| |
665,522
|
| |
30,520
|
| |
640,004
|
| |
15,260
|
| |
320,002
|
| |
1,625,528
|
|
|
Jide Zeitlin
|
| |
254,705
|
| |
1,400,242
|
| |
53,743
|
| |
1,400,005
|
| |
26,871
|
| |
699,990
|
| |
3,500,237
|
|
|
Victor Luis
|
| |
537,794
|
| |
1,996,561
|
| |
91,559
|
| |
1,919,992
|
| |
45,780
|
| |
960,007
|
| |
4,876,560
|
|
|
Joshua Schulman
|
| |
280,101
|
| |
1,039,875
|
| |
47,687
|
| |
999,996
|
| |
23,844
|
| |
500,009
|
| |
2,539,880
|
|
•
|
FY19-21 PRSUs: As previously noted, the Covid-19 pandemic resulted in the closing of many of our stores for several months in
fiscal year 2020, and significantly reduced our financial results. Our performance on this PRSU, granted to NEOs and other senior executives in August 2018, was tracking between threshold and target as of January 2020, however, our
financial results for the full two-year performance period fell below the threshold required for payout and, therefore, no shares were earned. Had shares been earned, they would have been subject to an additional one year vesting
requirement. The remainder of this section
|
•
|
Mr. Luis's FY18-20 Performance Stock Option: Under the terms of his separation agreement with the Company, Mr. Luis was
eligible to vest in 379,123 Performance Stock Options granted in August 2017 at an exercise price of $41.00. The vesting of the options was contingent on the Company achieving at least $1.5 billion in cumulative Free Cash Flow for
fiscal years 2018-2020 on a non-GAAP basis. The Company's non-GAAP Free Cash Flow for that period was $1.8 billion and these options vested in August 2020 and will expire 90 days after the end of his severance period. See Appendix A for a reconciliation to results as reported under GAAP.
|
|
|
| |
|
| |
|
| |
Performance Requirements(1)
|
| |
|
| |
|
| |
|
| ||||||
|
Grant Date
|
| |
Performance Measure and Weight
|
| |
Threshold
|
| |
Target
|
| |
Maximum
|
| |
Result(2)
|
| |
Payout as a %
of Target
|
| ||||||
|
August 16, 2018
|
| |
Performance Period: Fiscal Years 2019 and 2020
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
2- year Tapestry, Inc. Cumulative Net Income
|
| |
75%
|
| |
$1,358.7
|
| |
$1,698.3
|
| |
$1,868.1
|
| |
$1,014.5
|
| |
Below Threshold
|
| |
0.0%
|
|
|
|
| |
2-year Tapestry, Inc. Average Return on Net Assets (RONA)
|
| |
25%
|
| |
30.9%
|
| |
36.3%
|
| |
39.2%
|
| |
27.6%
|
| |
Below Threshold
|
| |
0.0%
|
|
|
Weighted average payout as a % of Target:
|
| |
0.0%
|
|
•
|
Cumulative Net income for fiscal years 2019 and 2020 was calculated by adjusting for items impacting comparability as
described in pages 39-40 of the Company’s Form 10-K for fiscal year 2020. In addition, net income for fiscal year 2019 was further adjusted to account for unplanned impacts related to ASU (Accounting Standards Update) 2016-09.
|
•
|
The numerator for RONA is non-GAAP earnings before interest, taxes, depreciation, amortization and rent (“EBITDAR”), which was
adjusted for items impacting comparability for Tapestry, Inc. as described on pages 39-40 of the Company’s Form 10-K for fiscal year 2020. Rent was further adjusted to exclude the impacts of the ASC 842 lease accounting standard, for
comparability to the FY19-20 RONA target, which was set prior to the adopting of the new standard. The denominator is fixed assets (which includes an adjustment for operating leases) plus working capital (excluding cash and cash
equivalents, short term investments and current debt).
|
46
|
| |
|
| |
I 2020 PROXY STATEMENT
|
COMPENSATION DISCUSSION AND ANALYSIS
|
|
|
|
•
|
health, life and disability insurance;
|
•
|
retirement savings plans;
|
•
|
the Company's Matching Gift Programs, under which the Company's foundations match eligible employee donations to qualified
charitable organizations;
|
•
|
a qualified employee stock purchase plan (the Amended and Restated Tapestry, Inc. 2001 Employee Stock Purchase Plan (the
“Employee Stock Purchase Plan”)); and
|
•
|
relocation payments and reimbursements under the Company’s policies covering moving expenses for employees who must relocate
as part of their employment at Tapestry.
|
|
| |
I 2020 PROXY STATEMENT
|
| |
47
|
COMPENSATION DISCUSSION AND ANALYSIS
|
|
|
|
48
|
| |
|
| |
I 2020 PROXY STATEMENT
|
COMPENSATION DISCUSSION AND ANALYSIS
|
|
|
|
|
Company Name
|
| |
Sub-Industry (as defined by GICS codes)
|
| |
Revenue(1)
|
| |
Market Valuation
as of 6/30/2020
(in millions)
|
|
|
The Gap, Inc.
|
| |
Apparel Retail
|
| |
$16,383
|
| |
$4,713
|
|
|
Compagnie Financière Richemont SA(2)
|
| |
Apparel, Accessories and Luxury Goods
|
| |
15,646
|
| |
36,063
|
|
|
The Estée Lauder Companies Inc.
|
| |
Personal Products
|
| |
14,294
|
| |
67,925
|
|
|
L Brands, Inc.
|
| |
Apparel Retail
|
| |
12,914
|
| |
4,159
|
|
|
V.F. Corporation
|
| |
Apparel, Accessories and Luxury Goods
|
| |
10,489
|
| |
23,740
|
|
|
PVH Corp.
|
| |
Apparel, Accessories and Luxury Goods
|
| |
9,909
|
| |
3,413
|
|
|
Ralph Lauren Corporation
|
| |
Apparel, Accessories and Luxury Goods
|
| |
6,160
|
| |
5,269
|
|
|
Williams-Sonoma, Inc.
|
| |
Homefurnishing Retail
|
| |
5,898
|
| |
6,377
|
|
|
Capri Holdings Limited
|
| |
Apparel, Accessories and Luxury Goods
|
| |
5,551
|
| |
2,335
|
|
|
Coty Inc.
|
| |
Personal Products
|
| |
4,718
|
| |
3,411
|
|
|
Tiffany & Co.
|
| |
Specialty Stores
|
| |
4,424
|
| |
14,797
|
|
|
American Eagle Outfitters, Inc.
|
| |
Apparel Retail
|
| |
4,308
|
| |
1,804
|
|
|
Urban Outfitters, Inc.
|
| |
Apparel Retail
|
| |
3,984
|
| |
1,488
|
|
|
Lululemon Athletica Inc.
|
| |
Apparel, Accessories and Luxury Goods
|
| |
3,979
|
| |
40,626
|
|
|
Tapestry, Inc.
|
| |
Apparel, Accessories and Luxury Goods
|
| |
4,961
|
| |
3,667
|
|
|
Tapestry, Inc. Percentile Rank
|
| |
|
| |
33rd
|
| |
33rd
|
|
|
| |
I 2020 PROXY STATEMENT
|
| |
49
|
COMPENSATION DISCUSSION AND ANALYSIS
|
|
|
|
|
Title
|
| |
Multiple of Salary
|
|
|
Chief Executive Officer
|
| |
5
|
|
|
Tapestry Chief Financial Officer, Chief Operations Officer, President and Chief Administrative
Officer, Coach Brand President
|
| |
3
|
|
•
|
Mr. Kahn and Ms. Resnick owned the required number of shares; and
|
•
|
Ms. Crevoiserat and Mr. Glaser were making appropriate progress towards achieving their ownership requirement (both had only
recently joined the Company).
|
50
|
| |
|
| |
I 2020 PROXY STATEMENT
|
COMPENSATION DISCUSSION AND ANALYSIS
|
|
|
|
|
| |
I 2020 PROXY STATEMENT
|
| |
51
|
|
|
| |
Human Resources Committee
|
|
|
|
| |
|
|
|
|
| |
David Denton, Chair*
Darrell Cavens
Susan Kropf
Ivan Menezes
|
|
52
|
| |
|
| |
I 2020 PROXY STATEMENT
|
|
| |
I 2020 PROXY STATEMENT
|
| |
53
|
|
Name & Principal Position
|
| |
Fiscal
Year
|
| |
Salary(1)
($)
|
| |
Bonus(2)
($)
|
| |
Stock
Awards(3)
($)
|
| |
Option
Awards(4)
($)
|
| |
Non-Equity
Incentive Plan
Compensation(5)
($)
|
| |
All Other
Compensation(6)
($)
|
| |
Total
($)
|
|
|
Joanne Crevoiserat
Interim Chief Executive
Officer
|
| |
2020
|
| |
785,769
|
| |
700,000
|
| |
2,800,002
|
| |
831,901
|
| |
0
|
| |
142,265
|
| |
5,259,937
|
|
|
Andrea Shaw Resnick
Interim Chief Financial
Officer and Global Head of Investor Relations and Corporate
Communications
|
| |
2020
|
| |
486,880
|
| |
104,000
|
| |
500,009
|
| |
0
|
| |
0
|
| |
37,202
|
| |
1,128,091
|
|
|
2019
|
| |
485,052
|
| |
208,000
|
| |
500,030
|
| |
0
|
| |
222,532
|
| |
24,337
|
| |
1,439,951
|
| |||
|
2018
|
| |
475,000
|
| |
0
|
| |
333,330
|
| |
166,794
|
| |
285,602
|
| |
14,483
|
| |
1,275,209
|
| |||
|
Thomas Glaser
Chief Operations Officer
|
| |
2020
|
| |
738,462
|
| |
200,000
|
| |
2,399,982
|
| |
623,926
|
| |
0
|
| |
89,986
|
| |
4,052,356
|
|
|
Todd Kahn
Interim Chief Executive
Officer and Brand President, Coach; President and Chief Administrative Officer
|
| |
2020
|
| |
750,000
|
| |
0
|
| |
960,007
|
| |
665,522
|
| |
0
|
| |
22,662
|
| |
2,398,191
|
|
|
2019
|
| |
750,000
|
| |
0
|
| |
959,984
|
| |
637,501
|
| |
573,000
|
| |
58,409
|
| |
2,978,894
|
| |||
|
2018
|
| |
750,000
|
| |
150,000
|
| |
899,991
|
| |
600,468
|
| |
751,585
|
| |
58,279
|
| |
3,210,322
|
| |||
|
Jide Zeitlin
Former Chairman and
Chief Executive Officer
|
| |
2020
|
| |
1,015,000
|
| |
0
|
| |
2,099,995
|
| |
1,400,242
|
| |
0
|
| |
111,623
|
| |
4,626,860
|
|
|
Victor Luis
Former Chief Executive Officer
|
| |
2020
|
| |
306,923
|
| |
0
|
| |
2,879,999
|
| |
1,996,561
|
| |
0
|
| |
2,918,303
|
| |
8,101,786
|
|
|
2019
|
| |
1,392,308
|
| |
0
|
| |
5,399,987
|
| |
3,585,928
|
| |
1,860,658
|
| |
123,359
|
| |
12,362,240
|
| |||
|
2018
|
| |
1,350,000
|
| |
0
|
| |
3,600,005
|
| |
5,400,744
|
| |
2,367,494
|
| |
107,187
|
| |
12,825,430
|
| |||
|
Joshua Schulman
Former Chief Executive Officer and Brand President, Coach
|
| |
2020
|
| |
975,000
|
| |
0
|
| |
1,500,005
|
| |
1,039,875
|
| |
0
|
| |
18,632
|
| |
3,533,512
|
|
|
2019
|
| |
971,154
|
| |
0
|
| |
1,499,988
|
| |
996,092
|
| |
1,043,560
|
| |
21,182
|
| |
4,531,976
|
| |||
|
2018
|
| |
950,000
|
| |
500,000
|
| |
1,199,988
|
| |
800,626
|
| |
931,171
|
| |
18,585
|
| |
4,400,370
|
|
•
|
For Ms. Crevoiserat, a new hire RSU grant plus annual RSUs and PRSUs (assuming target performance for the PRSUs). The annual
PRSU has a grant date fair value of $800,006; at the maximum achievement level, the total grant date fair value would be $1,600,011.
|
•
|
For Ms. Resnick, annual RSUs and PRSUs (assuming target performance for the PRSUs). The annual PRSU has a grant date fair
value of $166,670; at the maximum achievement level, the total grant date fair value would be $333,339.
|
•
|
For Mr. Glaser, a new hire RSU grant plus annual RSUs and PRSUs (assuming target performance for the PRSUs). The annual PRSU
has a grant date fair value of $599,994; at the maximum achievement level, the total grant date fair value would be $1,199,987.
|
•
|
For Mr. Kahn, annual RSUs and PRSUs (assuming target performance for the PRSUs). The annual PRSU has a grant date fair value
of $640,004; at the maximum achievement level, the total grant date fair value would be $1,280,009.
|
•
|
For Mr. Zeitlin, annual RSUs and PRSUs (assuming target performance for the PRSUs). The annual PRSU has a grant date fair
value of $1,400,005; at the maximum achievement level, the total grant date fair value would be $2,800,010.
|
•
|
For Mr. Luis, annual RSUs and PRSUs (assuming target performance for the PRSUs). The annual PRSU has a grant date fair value
of $1,919,992; at the maximum achievement level, the total grant date fair value would be $3,839,984.
|
•
|
For Mr. Schulman, annual RSUs and PRSUs (assuming target performance for the PRSUs). The annual PRSU has a grant date fair
value of $999,996; at the maximum achievement level, the total grant date fair value would be $1,999,993.
|
54
|
| |
|
| |
I 2020 PROXY STATEMENT
|
EXECUTIVE COMPENSATION
|
|
|
|
|
|
| |
Value
|
|
|
Expected Term (years)
|
| |
5.1
|
|
|
Expected Volatility
|
| |
37.6%
|
|
|
Risk-free Interest Rate
|
| |
1.5%
|
|
|
Dividend Yield
|
| |
6.3%
|
|
|
Name & Principal Position
|
| |
Fiscal
Year
|
| |
Company
Contributions to
Qualified
Defined
Contribution
Plans
($)
|
| |
Company
Contributions to
Non-Qualified
Defined
Contribution
Plans
($)
|
| |
Life
Insurance
Premiums
($)
|
| |
Other(a)
($)
|
|
|
Joanne Crevoiserat
Interim Chief
Executive Officer
|
| |
2020
|
| |
11,200
|
| |
0
|
| |
363
|
| |
130,702
|
|
|
Andrea Shaw Resnick
Interim Chief
Financial Officer and Global Head of Investor Relations and Corporate Communications
|
| |
2020
|
| |
9,738
|
| |
22,242
|
| |
386
|
| |
4,836
|
|
|
2019
|
| |
13,380
|
| |
9,635
|
| |
386
|
| |
936
|
| |||
|
2018
|
| |
11,320
|
| |
0
|
| |
386
|
| |
2,777
|
| |||
|
Thomas Glaser
Chief Operations
Officer
|
| |
2020
|
| |
11,200
|
| |
0
|
| |
363
|
| |
78,423
|
|
|
Todd Kahn
Interim Chief
Executive Officer and Brand President, Coach; President and Chief Administrative Officer
|
| |
2020
|
| |
11,200
|
| |
0
|
| |
396
|
| |
11,066
|
|
|
2019
|
| |
12,240
|
| |
32,696
|
| |
396
|
| |
13,077
|
| |||
|
2018
|
| |
9,960
|
| |
37,602
|
| |
396
|
| |
10,321
|
| |||
|
Jide Zeitlin
Former Chairman and
Chief Executive Officer
|
| |
2020
|
| |
0
|
| |
0
|
| |
297
|
| |
111,326
|
|
|
Victor Luis
Former Chief Executive
Officer
|
| |
2020
|
| |
0
|
| |
0
|
| |
8,083
|
| |
2,910,220
|
|
|
2019
|
| |
13,252
|
| |
45,670
|
| |
7,578
|
| |
56,859
|
| |||
|
2018
|
| |
8,948
|
| |
49,200
|
| |
6,910
|
| |
42,129
|
| |||
|
Joshua Schulman
Former Chief Executive
Officer and Brand President, Coach
|
| |
2020
|
| |
11,200
|
| |
0
|
| |
396
|
| |
7,036
|
|
|
2019
|
| |
15,250
|
| |
0
|
| |
396
|
| |
5,536
|
| |||
|
2018
|
| |
17,077
|
| |
0
|
| |
396
|
| |
1,112
|
|
•
|
Long-term disability insurance premiums of $491 for Ms. Crevoiserat, $536 for Ms. Resnick, $491 for Mr. Glaser, $536 for
Mr. Kahn, $402 for Mr. Zeitlin, $134 for Mr. Luis, and $536 for Mr. Schulman.
|
•
|
Company matching charitable contributions under the Company’s Matching Gift program of $4,300 for Ms. Resnick, $8,000 for
Mr. Glaser, $10,530 for Mr. Kahn and $6,500 for Mr. Schulman.
|
•
|
Payment of relocation expenses, pursuant to the Company's Relocation Policy for Vice Presidents and above.
|
°
|
For Ms. Crevoiserat, reimbursement of $71,397 plus $58,813 of associated income taxes paid by the
company in fiscal year 2020.
|
°
|
For Mr. Glaser, reimbursement of $42,485 plus $25,446 of associated income taxes paid by the
company in fiscal year 2020.
|
•
|
For Mr. Glaser, reimbursement of legal fees incurred in connection with his employment offer letter in the amount of $2,000,
for which the income taxes were paid by Mr. Glaser.
|
•
|
For Mr. Zeitlin, outside director cash retainer payments in the amount of $110,924, for his service as Non-Executive Chairman
prior to his appointment as Chief Executive Officer from the beginning of fiscal year 2020 through September 3, 2019.
|
•
|
For Mr. Luis, pursuant to the Separation and Release Agreement entered into in September 2019, salary and average annual
incentive continuation payments in the amount of $2,885,086 made in fiscal year 2020 and Mr. Luis's legal fees paid by the Company in connection with his separation agreement in the amount of $25,000.
|
|
| |
I 2020 PROXY STATEMENT
|
| |
55
|
EXECUTIVE COMPENSATION
|
|
|
|
|
|
| |
|
| |
|
| |
Estimated Future Payouts
Under Non-Equity
Incentive Plan Awards(1)
|
| |
Estimated Future Payouts
Under Equity
Incentive Plan Awards(2)
|
| |
All Other
Stock
Awards:
Number of Shares of Stock or Units
(#)
|
| |
All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)
|
| |
Exercise
or Base
Price of
Option
Awards
($/Share)
(3)
|
| |
Grant
Date Fair
Value of
Stock and
Option
Awards
(4)
($)
|
| ||||||||||||
|
Name & Principal Position
|
| |
Award Type
|
| |
Grant Date
|
| |
Threshold
($)
|
| |
Target
($)
|
| |
Maximum
($)
|
| |
Threshold (#)
|
| |
Target (#)
|
| |
Maximum (#)
|
| ||||||||||||
|
Joanne Crevoiserat
Interim Chief Executive Officer
|
| |
Annual incentive
|
| |
|
| |
235,731
|
| |
785,769
|
| |
1,571,538
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
New Hire RSU grant
|
| |
8/5/2019
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
57,471
|
| |
|
| |
|
| |
1,599,993
|
| |||
|
Annual stock option grant
|
| |
8/19/2019
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
224,081
|
| |
20.97
|
| |
831,901
|
| |||
|
Annual RSU grant
|
| |
8/19/2019
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
19,075
|
| |
|
| |
|
| |
400,003
|
| |||
|
Annual Performance RSU grant
|
| |
8/19/2019
|
| |
|
| |
|
| |
|
| |
11,445
|
| |
38,150
|
| |
76,300
|
| |
|
| |
|
| |
|
| |
800,006
|
| |||
|
Andrea Shaw Resnick
Interim Chief Financial Officer and Global Head of Investor Relations and Corporate Communications
|
| |
Annual incentive
|
| |
|
| |
87,638
|
| |
292,128
|
| |
584,256
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Annual stock option grant
|
| |
8/19/2019
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |||
|
Annual RSU grant
|
| |
8/19/2019
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
15,896
|
| |
|
| |
|
| |
333,339
|
| |||
|
Annual Performance RSU grant
|
| |
8/19/2019
|
| |
|
| |
|
| |
|
| |
2,384
|
| |
7,948
|
| |
15,896
|
| |
|
| |
|
| |
|
| |
166,670
|
| |||
|
Thomas Glaser
Chief Operations Officer
|
| |
Annual incentive
|
| |
|
| |
221,538
|
| |
738,462
|
| |
1,476,923
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
New Hire RSU grant
|
| |
8/5/2019
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
53,879
|
| |
|
| |
|
| |
1,499,991
|
| |||
|
Annual stock option grant
|
| |
8/19/2019
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
168,061
|
| |
20.97
|
| |
623,926
|
| |||
|
Annual RSU grant
|
| |
8/19/2019
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
14,306
|
| |
|
| |
|
| |
299,997
|
| |||
|
Annual Performance RSU grant
|
| |
8/19/2019
|
| |
|
| |
|
| |
|
| |
8,584
|
| |
28,612
|
| |
57,224
|
| |
|
| |
|
| |
|
| |
599,994
|
| |||
|
Todd Kahn
Interim Chief Executive Officer and Brand President, Coach; President and Chief Administrative Officer
|
| |
Annual incentive
|
| |
|
| |
225,000
|
| |
750,000
|
| |
1,500,000
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Annual stock option grant
|
| |
8/19/2019
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
179,265
|
| |
20.97
|
| |
665,522
|
| |||
|
Annual RSU Grant
|
| |
8/19/2019
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
15,260
|
| |
|
| |
|
| |
320,002
|
| |||
|
Annual Performance RSU grant
|
| |
8/19/2019
|
| |
|
| |
|
| |
|
| |
9,156
|
| |
30,520
|
| |
61,040
|
| |
|
| |
|
| |
|
| |
640,004
|
| |||
|
Jide Zeitlin
Former Chairman and Chief Executive Officer
|
| |
Annual incentive
|
| |
|
| |
456,750
|
| |
1,522,500
|
| |
3,045,000
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
New Hire stock option grant
|
| |
9/30/2019
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
254,705
|
| |
26.05
|
| |
1,400,242
|
| |||
|
New Hire RSU Grant
|
| |
9/30/2019
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
26,871
|
| |
|
| |
|
| |
699,990
|
| |||
|
New Hire Performance RSU grant
|
| |
9/30/2019
|
| |
|
| |
|
| |
|
| |
16,123
|
| |
53,743
|
| |
107,486
|
| |
|
| |
|
| |
|
| |
1,400,005
|
| |||
|
Victor Luis
Former Chief Executive Officer
|
| |
Annual incentive
|
| |
|
| |
161,135
|
| |
537,115
|
| |
1,074,231
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Annual stock option grant
|
| |
8/19/2019
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
537,794
|
| |
20.97
|
| |
1,996,561
|
| |||
|
Annual RSU Grant
|
| |
8/19/2019
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
45,780
|
| |
|
| |
|
| |
960,007
|
| |||
|
Annual Performance RSU grant
|
| |
8/19/2019
|
| |
|
| |
|
| |
|
| |
27,468
|
| |
91,559
|
| |
183,118
|
| |
|
| |
|
| |
|
| |
1,919,992
|
| |||
|
Joshua Schulman
Former Chief Executive Officer and Brand President, Coach
|
| |
Annual incentive
|
| |
|
| |
365,625
|
| |
1,218,750
|
| |
2,437,500
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Annual stock option grant
|
| |
8/19/2019
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
280,101
|
| |
20.97
|
| |
1,039,875
|
| |||
|
Annual RSU Grant
|
| |
8/19/2019
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
23,844
|
| |
|
| |
|
| |
500,009
|
| |||
|
Annual Performance RSU grant
|
| |
8/19/2019
|
| |
|
| |
|
| |
|
| |
14,306
|
| |
47,687
|
| |
95,374
|
| |
|
| |
|
| |
|
| |
999,996
|
|
56
|
| |
|
| |
I 2020 PROXY STATEMENT
|
EXECUTIVE COMPENSATION
|
|
|
|
|
| |
I 2020 PROXY STATEMENT
|
| |
57
|
EXECUTIVE COMPENSATION
|
|
|
|
|
Name & Principal Position
|
| |
Option Awards
|
| |
Stock Awards
|
| ||||||||||||||||||||||||
|
Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#)
|
| |
Number of
Securities
Underlying
Unexercised
Options
Unexercisable
(#)
|
| |
Option
Grant
Date
|
| |
Option
Exercise
Price ($/
share)
|
| |
Option
Expiration
Date
|
| |
Number
of Shares
or Units
of Stock
that
Have Not
Vested
(#)
|
| |
Restricted
Stock Unit
Grant
Date
|
| |
Market Value
of Shares
or Units of
Stock that
Have Not
Vested
($)(a)
|
| |
Equity Incentive
Plan Awards:
Number of
Unearned Shares,
Units, or Other
Rights that Have
Not Vested
(#)(b)
|
| |
Equity Incentive
Plan Awards:
Market or
Payout Value of
Unearned Shares,
Units, or Other
Rights that Have
Not Vested
($)(a)
|
| |||
|
Joanne Crevoiserat
Interim Chief Executive Officer
|
| |
0
|
| |
224,081(1)
|
| |
8/19/2019
|
| |
20.97
|
| |
8/19/2029
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
60,426(c)
|
| |
8/5/2019
|
| |
758,346
|
| |
|
| |
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
20,056(d)
|
| |
8/19/2019
|
| |
251,700
|
| |
|
| |
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
8/19/2019
|
| |
|
| |
12,033(h)
|
| |
151,020
|
| |||
|
Andrea Shaw Resnick
Interim Chief Financial Officer and Global Head of Investor Relations and Corporate Communications
|
| |
14,896(2)
|
| |
0
|
| |
8/4/2010
|
| |
38.41
|
| |
8/4/2020
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
10,625(2)
|
| |
0
|
| |
8/3/2011
|
| |
61.92
|
| |
8/3/2021
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |||
|
13,896(2)
|
| |
0
|
| |
8/15/2012
|
| |
55.65
|
| |
8/15/2022
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |||
|
18,806(2)
|
| |
0
|
| |
8/14/2013
|
| |
53.23
|
| |
8/14/2023
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |||
|
20,947(2)
|
| |
0
|
| |
8/14/2014
|
| |
36.31
|
| |
8/14/2024
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |||
|
14,585(2)
|
| |
0
|
| |
8/13/2015
|
| |
31.46
|
| |
8/13/2025
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |||
|
23,224(2)
|
| |
0
|
| |
8/11/2016
|
| |
39.87
|
| |
8/11/2026
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |||
|
10,898(1)
|
| |
10,898(1)
|
| |
8/17/2017
|
| |
41.00
|
| |
8/17/2027
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
2,285(d)
|
| |
8/17/2017
|
| |
28,672
|
| |
|
| |
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
5,311(d)
|
| |
8/16/2018
|
| |
66,658
|
| |
|
| |
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
16,713(d)
|
| |
8/19/2019
|
| |
209,752
|
| |
|
| |
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
8/17/2017
|
| |
|
| |
4,433(f)
|
| |
55,634
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
8/16/2018
|
| |
|
| |
0(g)
|
| |
0
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
8/19/2019
|
| |
|
| |
2,507(h)
|
| |
31,463
|
| |||
|
Thomas Glaser
Chief Operations Officer
|
| |
0
|
| |
168,061(1)
|
| |
8/19/2019
|
| |
20.97
|
| |
8/19/2029
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
|
| |
|
| |
|
| |
56,649(e)
|
| |
8/5/2019
|
| |
710,948
|
| |
|
| |
|
| |
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
15,042(d)
|
| |
8/19/2019
|
| |
188,772
|
| |
|
| |
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
8/19/2019
|
| |
|
| |
9,025(h)
|
| |
113,263
|
| |||
|
Todd Kahn
Interim Chief Executive Officer and Brand President, Coach; President and Chief Administrative Officer
|
| |
14,165(2)
|
| |
0
|
| |
8/4/2010
|
| |
38.41
|
| |
8/4/2020
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
28,839(2)
|
| |
0
|
| |
8/3/2011
|
| |
61.92
|
| |
8/3/2021
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |||
|
36,167(2)
|
| |
0
|
| |
8/15/2012
|
| |
55.65
|
| |
8/15/2022
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |||
|
47,643(2)
|
| |
0
|
| |
8/14/2013
|
| |
53.23
|
| |
8/14/2023
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |||
|
47,970(2)
|
| |
0
|
| |
8/13/2015
|
| |
31.46
|
| |
8/13/2025
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |||
|
83,605(2)
|
| |
0
|
| |
8/11/2016
|
| |
39.87
|
| |
8/11/2026
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |||
|
39,234(1)
|
| |
39,233(1)
|
| |
8/17/2017
|
| |
41.00
|
| |
8/17/2027
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |||
|
13,856(1)
|
| |
41,567(1)
|
| |
8/16/2018
|
| |
51.38
|
| |
8/16/2028
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |||
|
0
|
| |
179,265(1)
|
| |
8/19/2019
|
| |
20.97
|
| |
8/19/2029
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
4,114(d)
|
| |
8/17/2017
|
| |
51,626
|
| |
|
| |
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
5,098(d)
|
| |
8/16/2018
|
| |
63,981
|
| |
|
| |
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
16,045(d)
|
| |
8/19/2019
|
| |
201,360
|
| |
|
| |
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
8/17/2017
|
| |
|
| |
15,959(f)
|
| |
200,282
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
8/16/2018
|
| |
|
| |
0(g)
|
| |
0
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
8/19/2019
|
| |
|
| |
9,627(h)
|
| |
120,816
|
| |||
|
Jide Zeitlin
Former Chairman and Chief Executive Officer
|
| |
4,700(5)
|
| |
0
|
| |
11/3/2010
|
| |
50.50
|
| |
11/3/2020
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
3,255(5)
|
| |
0
|
| |
11/3/2011
|
| |
65.64
|
| |
11/3/2021
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |||
|
4,419(5)
|
| |
0
|
| |
11/7/2012
|
| |
56.95
|
| |
11/7/2022
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |||
|
6,750(5)
|
| |
0
|
| |
11/7/2013
|
| |
51.68
|
| |
11/7/2023
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |||
|
11,321(5)
|
| |
0
|
| |
11/6/2014
|
| |
33.46
|
| |
11/6/2024
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |||
|
11,734(5)
|
| |
0
|
| |
11/4/2015
|
| |
32.28
|
| |
11/4/2025
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |||
|
11,284(5)
|
| |
0
|
| |
11/10/2016
|
| |
36.72
|
| |
11/10/2026
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |||
|
9,338(5)
|
| |
0
|
| |
11/9/2017
|
| |
40.16
|
| |
11/9/2027
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |||
|
7,712(5)
|
| |
0
|
| |
11/8/2018
|
| |
43.03
|
| |
11/8/2028
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |||
|
0
|
| |
254,705(3)
|
| |
9/30/2019
|
| |
26.05
|
| |
9/30/2029
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
27,890(d)
|
| |
9/30/2019
|
| |
350,021
|
| |
|
| |
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
9/30/2019
|
| |
|
| |
16,734(h)
|
| |
210,016
|
|
58
|
| |
|
| |
I 2020 PROXY STATEMENT
|
EXECUTIVE COMPENSATION
|
|
|
|
|
Name & Principal Position
|
| |
Option Awards
|
| |
Stock Awards
|
| ||||||||||||||||||||||||
|
Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#)
|
| |
Number of
Securities
Underlying
Unexercised
Options
Unexercisable
(#)
|
| |
Option
Grant
Date
|
| |
Option
Exercise
Price ($/
share)
|
| |
Option
Expiration
Date
|
| |
Number
of Shares
or Units
of Stock
that
Have Not
Vested
(#)
|
| |
Restricted
Stock Unit
Grant
Date
|
| |
Market Value
of Shares
or Units of
Stock that
Have Not
Vested
($)(a)
|
| |
Equity Incentive
Plan Awards:
Number of
Unearned Shares,
Units, or Other
Rights that Have
Not Vested
(#)(b)
|
| |
Equity Incentive
Plan Awards:
Market or
Payout Value of
Unearned Shares,
Units, or Other
Rights that Have
Not Vested
($)(a)
|
| |||
|
Victor Luis(6)
Former Chief Executive Officer
|
| |
102,030(2)
|
| |
0
|
| |
8/15/2012
|
| |
55.65
|
| |
8/15/2022
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
192,578(2)
|
| |
0
|
| |
8/14/2013
|
| |
53.23
|
| |
8/14/2023
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |||
|
143,911(2)
|
| |
0
|
| |
8/13/2015
|
| |
31.46
|
| |
8/13/2025
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |||
|
222,946(2)
|
| |
0
|
| |
8/11/2016
|
| |
39.87
|
| |
8/11/2026
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |||
|
368,846(4)
|
| |
0
|
| |
8/11/2016
|
| |
39.87
|
| |
8/11/2026
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |||
|
156,935(1)
|
| |
156,934(1)
|
| |
8/17/2017
|
| |
41.00
|
| |
8/17/2027
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |||
|
0
|
| |
379,123(4)
|
| |
8/17/2017
|
| |
41.00
|
| |
8/17/2027
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |||
|
77,938(1)
|
| |
233,814(1)
|
| |
8/16/2018
|
| |
51.38
|
| |
8/16/2028
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |||
|
0
|
| |
537,794(1)
|
| |
8/19/2019
|
| |
20.97
|
| |
8/19/2029
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
28,675(d)
|
| |
8/16/2018
|
| |
359,873
|
| |
|
| |
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
48,134(d)
|
| |
8/19/2019
|
| |
604,080
|
| |
|
| |
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
8/17/2017
|
| |
|
| |
95,753(f)
|
| |
1,201,706
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
8/16/2018
|
| |
|
| |
0(g)
|
| |
0
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
8/19/2019
|
| |
|
| |
28,880(h)
|
| |
362,444
|
| |||
|
Joshua Schulman(7)
Former Chief Executive Officer and Brand President, Coach
|
| |
87,308(3)
|
| |
29,102(3)
|
| |
6/5/2017
|
| |
46.56
|
| |
6/5/2027
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
52,312(1)
|
| |
52,311(1)
|
| |
8/17/2017
|
| |
41.00
|
| |
8/17/2027
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |||
|
21,650(1)
|
| |
64,948(1)
|
| |
8/16/2018
|
| |
51.38
|
| |
8/16/2028
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |||
|
0
|
| |
280,101(1)
|
| |
8/19/2019
|
| |
20.97
|
| |
8/19/2029
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
6,080(c)
|
| |
6/5/2017
|
| |
76,302
|
| |
|
| |
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
5,485(d)
|
| |
8/17/2017
|
| |
68,835
|
| |
|
| |
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
7,965(d)
|
| |
8/16/2018
|
| |
99,967
|
| |
|
| |
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
25,070(d)
|
| |
8/19/2019
|
| |
314,628
|
| |
|
| |
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
8/17/2017
|
| |
|
| |
21,278(f)
|
| |
267,043
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
8/16/2018
|
| |
|
| |
0(g)
|
| |
0
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
8/19/2019
|
| |
|
| |
15,042(h)
|
| |
188,773
|
|
|
| |
I 2020 PROXY STATEMENT
|
| |
59
|
EXECUTIVE COMPENSATION
|
|
|
|
|
Name & Principal Position
|
| |
Option Awards
|
| |
Stock Awards
|
| ||||||
|
Number of
Shares Acquired
on Exercise
(#)
|
| |
Value Realized
on Exercise
($)
|
| |
Number of
Shares Acquired
on Vesting(1)
(#)
|
| |
Value Realized
on Vesting(2)
($)
|
| |||
|
Joanne Crevoiserat
Interim Chief
Executive Officer
|
| |
0
|
| |
0
|
| |
0
|
| |
0
|
|
|
Andrea Shaw Resnick
Interim Chief
Financial Officer and Global Head of Investor Relations and Corporate Communications
|
| |
0
|
| |
0
|
| |
24,094
|
| |
639,354
|
|
|
Thomas Glaser
Chief Operations
Officer
|
| |
0
|
| |
0
|
| |
0
|
| |
0
|
|
|
Todd Kahn
Interim Chief
Executive Officer and Brand President, Coach; President and Chief Administrative Officer
|
| |
0
|
| |
0
|
| |
33,158
|
| |
881,665
|
|
|
Jide Zeitlin(3)
Former Chairman and
Chief Executive Officer
|
| |
0
|
| |
0
|
| |
1,890
|
| |
51,456
|
|
|
Victor Luis
Former Chief Executive
Officer
|
| |
0
|
| |
0
|
| |
136,659
|
| |
3,675,536
|
|
|
Joshua Schulman
Former Chief Executive
Officer and Brand President, Coach
|
| |
0
|
| |
0
|
| |
11,213
|
| |
207,699
|
|
60
|
| |
|
| |
I 2020 PROXY STATEMENT
|
EXECUTIVE COMPENSATION
|
|
|
|
|
Name & Principal Position
|
| |
Non-Qualified
Plan
|
| |
Executive
Contributions
in Last FY(1)
($)
|
| |
Registrant
Contributions
in Last FY(2)
($)
|
| |
Aggregate
Earnings
in Last FY(3)
($)
|
| |
Aggregate
Withdrawals/
Distributions
($)
|
| |
Aggregate
Balance
at Last FYE(4)
($)
|
|
|
Joanne Crevoiserat
|
| |
EDCP
|
| |
0
|
| |
0
|
| |
0
|
| |
0
|
| |
0
|
|
|
Interim Chief Executive Officer
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Andrea Shaw Resnick
|
| |
EDCP
|
| |
24,344
|
| |
22,242
|
| |
7,284
|
| |
0
|
| |
190,048
|
|
|
Interim Chief Financial Officer and Global Head of Investor Relations and
Corporate Communications
|
| |
SRP
|
| |
0
|
| |
0
|
| |
2,891
|
| |
0
|
| |
225,979
|
|
|
Thomas Glaser
|
| |
EDCP
|
| |
0
|
| |
0
|
| |
0
|
| |
0
|
| |
0
|
|
|
Chief Operations Officer
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Todd Kahn
|
| |
EDCP
|
| |
11,250
|
| |
0
|
| |
5,816
|
| |
0
|
| |
281,354
|
|
|
Interim Chief Executive Officer and Brand President, Coach; President and
Chief Administrative Officer
|
| |
SRP
|
| |
0
|
| |
0
|
| |
1,416
|
| |
0
|
| |
110,705
|
|
|
Jide Zeitlin(5)
|
| |
EDCP
|
| |
0
|
| |
0
|
| |
0
|
| |
0
|
| |
0
|
|
|
Former Chairman and Chief Executive Officer
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Victor Luis
|
| |
EDCP
|
| |
21,485
|
| |
0
|
| |
101,379
|
| |
5,159,704
|
| |
0
|
|
|
Former Chief Executive Officer
|
| |
SRP
|
| |
0
|
| |
0
|
| |
11,841
|
| |
544,014
|
| |
0
|
|
|
Joshua Schulman
|
| |
EDCP
|
| |
0
|
| |
0
|
| |
0
|
| |
0
|
| |
0
|
|
|
Former Chief Executive Officer and Brand President, Coach
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
•
|
For Ms. Resnick, $108,298 for fiscal year 2019 ($9,635 of which represented company match), $46,586 for fiscal year 2020
($22,242 of which represented company match).
|
•
|
For Mr. Kahn, $86,992 for fiscal year 2018 ($37,602 of which represented company match), $39,619 for fiscal year 2019 ($32,696
of which represented company match) and $11,250 for fiscal year 2020 ($0 of which represented company match).
|
•
|
For Mr. Luis, $1,892,667 for fiscal year 2018 ($49,200 of which represented company match), $1,524,337 for fiscal year 2019
($45,670 of which represented Company match) and $21,485 for fiscal year 2020, ($0 of which represented Company match).
|
•
|
Ms. Crevoiserat and Messrs. Glaser, Zeitlin, and Schulman have not participated in the EDCP.
|
|
| |
I 2020 PROXY STATEMENT
|
| |
61
|
EXECUTIVE COMPENSATION
|
|
|
|
62
|
| |
|
| |
I 2020 PROXY STATEMENT
|
EXECUTIVE COMPENSATION
|
|
|
|
|
| |
I 2020 PROXY STATEMENT
|
| |
63
|
EXECUTIVE COMPENSATION
|
|
|
|
|
Compensation and Benefits due to Mr. Luis under the Luis Separation Agreement(1)
|
| |
|
|
|
Salary Continuation Severance Payments(2)
|
| |
$3,150,000
|
|
|
Health and Life Insurance Benefits Continuation(2)
|
| |
71,334
|
|
|
Annual Cash Incentive Continuation(2)
|
| |
5,200,125
|
|
|
Fiscal Year 2020 Pro-rata Annual Incentive (3)
|
| |
0
|
|
|
Qualified Retirement Plan Distribution(4)
|
| |
662,065
|
|
|
Non-Qualified Retirement Plan Distribution(4)
|
| |
5,703,719
|
|
|
Payment of Legal Fees
|
| |
25,000
|
|
|
Intrinsic value of unvested long-term incentive awards that continued vesting
upon termination(5)
|
| |
|
|
|
Stock Options: intrinsic value of the portion of awards that are expected to vest
|
| |
0
|
|
|
RSUs: intrinsic value of the portion of awards that are expected to vest
|
| |
541,955
|
|
|
PRSUs: intrinsic value of awards that are expected to vest, subject to the satisfaction of
performance conditions
|
| |
1,564,150
|
|
|
Total
|
| |
$16,918,348
|
|
64
|
| |
|
| |
I 2020 PROXY STATEMENT
|
EXECUTIVE COMPENSATION
|
|
|
|
|
Reason for Termination
|
| |
Treatment of Unvested Awards
|
|
|
Voluntary (including a resignation without “Good Reason,” as defined above
under Employment Agreements and Compensatory Arrangements)
|
| |
Unvested awards forfeit.
Vested stock options remain exercisable for 90 days.
|
|
|
Retirement (departure from the Company, other than for cause, if employee
has attained age 65 and five years of service or age 55 and ten years of service with the Company)
|
| |
Unvested awards remain outstanding and become vested according to their
original schedule, subject to compliance with the restrictive covenants through the last vesting date. The number of PRSUs that vest is based on actual company performance.
Performance stock options will vest subject to satisfaction of the performance
conditions.
Vested options continue to be exercisable for the remainder of the ten-year
term.
|
|
|
Severance Event (including resignation with “Good Reason” or termination
without “Cause,” as defined above under Employment Agreements and Compensatory Arrangements)
|
| |
For grants made on and after August 16, 2018: unvested awards vest pro-rata
as of the employee's termination date.
For grants made prior to August 16, 2018: unvested awards continue to vest
for the duration of the salary continuation period.
In either case, the number of PRSUs that ultimately vest will be based on
actual performance relative to the pre-established targets, and Mr. Luis's performance stock options will pro-rata vest subject to satisfaction of the performance condition.
Exercisability of vested stock options continues for the 90 days following
termination date for grants made on or after August 16, 2018 or the end of the salary continuation period for grants made prior to this date.
|
|
|
Death or Long-Term Disability
|
| |
Vesting of unvested awards and target PRSUs is accelerated; performance
condition for performance options is waived.
The estate (or the executive) may exercise stock options for five years.
|
|
|
Termination upon a Change-in-Control
|
| |
Vesting of unvested awards is accelerated (at target performance for PRSUs if
prior to completion of performance period); performance condition for performance options is waived.
|
|
|
Cause (as defined above under Employment Agreements and Compensatory Arrangements)
|
| |
Vested and unvested stock options and unvested RSUs and PRSUs forfeit, and
financial gains realized in the twelve months prior to termination must be repaid.
|
|
|
Change-in-Control without termination
|
| |
Outstanding awards shall continue vesting as scheduled assuming continued
employment, or an equivalent award shall be substituted by the successor corporation. PRSUs shall be deemed earned at target performance if Change-in-Control is prior to end of performance period.
|
|
|
| |
I 2020 PROXY STATEMENT
|
| |
65
|
EXECUTIVE COMPENSATION
|
|
|
|
•
|
any vested balance in our qualified and non-qualified retirement plans;
|
•
|
the ability to convert life insurance at the NEO's own expense;
|
•
|
the ability to exercise vested stock options for a defined period of time.
|
•
|
Long-term incentive amounts reflect the intrinsic value of unvested stock options, RSUs and PRSUs whose vesting would be
pro-rated, accelerated or continued due to the termination, assuming a closing price of our common stock on June 26, 2020 of $12.55 the last trading day before the assumed termination date. For termination reasons in which the value of
PRSUs earned depends on satisfaction of the performance criteria, FY18-20 PRSUs reflect actual performance of 97% of target, FY19-21 PRSUs reflect no shares earned, as certified by the HR Committee in August 2020, and FY20-22 PRSUs
assume threshold performance.
|
•
|
The HR Committee does not exercise its discretion to pro-rata vest, increase or decrease any equity awards.
|
•
|
The values shown for continuation of benefits and perquisites reflect our cost for each program as of June 27, 2020. These
costs may change annually.
|
•
|
The “Total” row represents the sum of all estimated payments in the column.
|
66
|
| |
|
| |
I 2020 PROXY STATEMENT
|
EXECUTIVE COMPENSATION
|
|
|
|
|
Incremental Benefits Due to Termination Event
|
| |
Termination
by Board
with Cause(1)
($)
|
| |
Resignation
by the
Executive
without
Good
Reason(1)(2)
($)
|
| |
Termination
by the
Board
without
Cause
($)
|
| |
Resignation
by the
Executive
with Good
Reason
($)
|
| |
Termination
due to
Change-in-
Control
($)
|
| |
Termination
due to
Executive’s
Death or
Disability
($)
|
| |
Termination
due to
Executive’s
Retirement(3)
($)
|
|
|
TOTAL
|
| |
31,335
|
| |
31,335
|
| |
1,431,188
|
| |
1,431,188
|
| |
4,280,213
|
| |
1,544,781
|
| |
0
|
|
|
Salary Continuation
|
| |
0
|
| |
0
|
| |
900,000
|
| |
900,000
|
| |
1,350,000
|
| |
0
|
| |
0
|
|
|
Benefit and Perquisite Continuation
|
| |
0
|
| |
0
|
| |
23,621
|
| |
23,621
|
| |
35,432
|
| |
0
|
| |
0
|
|
|
Short Term Incentive
|
| |
0
|
| |
0
|
| |
0
|
| |
0
|
| |
1,350,000
|
| |
0
|
| |
0
|
|
|
Annual Long Term Incentives:
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Unvested Stock Options
|
| |
0
|
| |
0
|
| |
0
|
| |
0
|
| |
0
|
| |
0
|
| |
0
|
|
|
Unvested Restricted Stock Units
|
| |
0
|
| |
0
|
| |
433,103
|
| |
433,103
|
| |
1,010,046
|
| |
1,010,046
|
| |
0
|
|
|
Unvested Performance Restricted Stock Units
|
| |
0
|
| |
0
|
| |
43,129
|
| |
43,129
|
| |
503,400
|
| |
503,400
|
| |
0
|
|
|
Retirement Plan Distribution
|
| |
31,335
|
| |
31,335
|
| |
31,335
|
| |
31,335
|
| |
31,335
|
| |
31,335
|
| |
0
|
|
|
Incremental Benefits Due to Termination Event
|
| |
Termination
by Board
with Cause
($)
|
| |
Resignation
by the
Executive
without
Good
Reason(1)
($)
|
| |
Termination
by the
Board
without
Cause
($)
|
| |
Resignation
by the
Executive
with Good
Reason(2)
($)
|
| |
Termination
due to
Change-in-
Control
($)
|
| |
Termination
due to
Executive’s
Death or
Disability
($)
|
| |
Termination
due to
Executive’s
Retirement(3)
($)
|
|
|
TOTAL
|
| |
2,026,353
|
| |
2,026,353
|
| |
2,922,945
|
| |
0
|
| |
3,288,486
|
| |
2,536,379
|
| |
2,418,533
|
|
|
Salary Continuation
|
| |
0
|
| |
0
|
| |
486,880
|
| |
0
|
| |
486,880
|
| |
0
|
| |
0
|
|
|
Benefit and Perquisite Continuation
|
| |
0
|
| |
0
|
| |
17,532
|
| |
0
|
| |
17,532
|
| |
0
|
| |
0
|
|
|
Short Term Incentive
|
| |
0
|
| |
0
|
| |
0
|
| |
0
|
| |
292,128
|
| |
0
|
| |
0
|
|
|
Annual Long Term Incentives:
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Unvested Stock Options
|
| |
0
|
| |
0
|
| |
0
|
| |
0
|
| |
0
|
| |
0
|
| |
0
|
|
|
Unvested Restricted Stock Units
|
| |
0
|
| |
0
|
| |
305,083
|
| |
0
|
| |
305,083
|
| |
305,083
|
| |
305,083
|
|
|
Unvested Performance Restricted Stock Units
|
| |
0
|
| |
0
|
| |
87,097
|
| |
0
|
| |
160,510
|
| |
204,943
|
| |
87,097
|
|
|
Retirement Plan Distribution
|
| |
2,026,353
|
| |
2,026,353
|
| |
2,026,353
|
| |
0
|
| |
2,026,353
|
| |
2,026,353
|
| |
2,026,353
|
|
|
| |
I 2020 PROXY STATEMENT
|
| |
67
|
EXECUTIVE COMPENSATION
|
|
|
|
|
Incremental Benefits Due to Termination Event
|
| |
Termination
by Board
with Cause(1)
($)
|
| |
Resignation
by the
Executive
without
Good
Reason(1)(2)
($)
|
| |
Termination
by the
Board
without
Cause
($)
|
| |
Resignation
by the
Executive
with Good
Reason
($)
|
| |
Termination
due to
Change-in-
Control
($)
|
| |
Termination
due to
Executive’s
Death or
Disability
($)
|
| |
Termination
due to
Executive’s
Retirement(3)
($)
|
|
|
TOTAL
|
| |
31,825
|
| |
31,825
|
| |
1,243,733
|
| |
1,243,733
|
| |
3,740,724
|
| |
1,309,088
|
| |
0
|
|
|
Salary Continuation
|
| |
0
|
| |
0
|
| |
800,000
|
| |
800,000
|
| |
1,200,000
|
| |
0
|
| |
0
|
|
|
Benefit and Perquisite Continuation
|
| |
0
|
| |
0
|
| |
21,090
|
| |
21,090
|
| |
31,636
|
| |
0
|
| |
0
|
|
|
Short Term Incentive
|
| |
0
|
| |
0
|
| |
0
|
| |
0
|
| |
1,200,000
|
| |
0
|
| |
0
|
|
|
Annual Long Term Incentives:
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Unvested Stock Options
|
| |
0
|
| |
0
|
| |
0
|
| |
0
|
| |
0
|
| |
0
|
| |
0
|
|
|
Unvested Restricted Stock Units
|
| |
0
|
| |
0
|
| |
358,472
|
| |
358,472
|
| |
899,720
|
| |
899,720
|
| |
0
|
|
|
Unvested Performance Restricted Stock Units
|
| |
0
|
| |
0
|
| |
32,346
|
| |
32,346
|
| |
377,543
|
| |
377,543
|
| |
0
|
|
|
Retirement Plan Distribution
|
| |
31,825
|
| |
31,825
|
| |
31,825
|
| |
31,825
|
| |
31,825
|
| |
31,825
|
| |
0
|
|
|
Incremental Benefits Due to Termination Event
|
| |
Termination
by Board
with Cause
($)
|
| |
Resignation
by the
Executive
without
Good
Reason(1)
($)
|
| |
Termination
by the
Board
without
Cause
($)
|
| |
Resignation
by the
Executive
with Good
Reason(2)
($)
|
| |
Termination
due to
Change-in-
Control
($)
|
| |
Termination
due to
Executive’s
Death or
Disability
($)
|
| |
Termination
due to
Executive’s
Retirement(3)
($)
|
|
|
TOTAL
|
| |
813,025
|
| |
813,025
|
| |
2,214,523
|
| |
0
|
| |
4,003,144
|
| |
1,903,603
|
| |
1,451,090
|
|
|
Salary Continuation
|
| |
0
|
| |
0
|
| |
750,000
|
| |
0
|
| |
1,125,000
|
| |
0
|
| |
0
|
|
|
Benefit and Perquisite Continuation
|
| |
0
|
| |
0
|
| |
13,433
|
| |
0
|
| |
20,150
|
| |
0
|
| |
0
|
|
|
Short Term Incentive
|
| |
0
|
| |
0
|
| |
0
|
| |
0
|
| |
1,125,000
|
| |
0
|
| |
0
|
|
|
Annual Long Term Incentives:
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Unvested Stock Options
|
| |
0
|
| |
0
|
| |
0
|
| |
0
|
| |
0
|
| |
0
|
| |
0
|
|
|
Unvested Restricted Stock Units
|
| |
0
|
| |
0
|
| |
316,967
|
| |
0
|
| |
316,967
|
| |
316,967
|
| |
316,967
|
|
|
Unvested Performance Restricted Stock Units
|
| |
0
|
| |
0
|
| |
321,098
|
| |
0
|
| |
603,002
|
| |
773,611
|
| |
321,098
|
|
|
Retirement Plan Distribution
|
| |
813,025
|
| |
813,025
|
| |
813,025
|
| |
0
|
| |
813,025
|
| |
813,025
|
| |
813,025
|
|
68
|
| |
|
| |
I 2020 PROXY STATEMENT
|
EXECUTIVE COMPENSATION
|
|
|
|
|
Incremental Benefits Due to Termination Event
|
| |
Termination
by Board
with Cause
($)
|
| |
Resignation
by the
Executive
without
Good
Reason(1)
($)
|
| |
Termination
by the
Board
without
Cause(1)(2)
($)
|
| |
Resignation
by the
Executive
with Good
Reason(1)
($)
|
| |
Termination
due to
Change-in-
Control
($)
|
| |
Termination
due to
Executive’s
Death or
Disability
($)
|
| |
Termination
due to
Executive’s
Retirement(1)
($)
|
|
|
TOTAL
|
| |
0
|
| |
498,433
|
| |
498,433
|
| |
0
|
| |
1,050,075
|
| |
1,050,075
|
| |
498,433
|
|
|
Salary Continuation
|
| |
0
|
| |
0
|
| |
0
|
| |
0
|
| |
0
|
| |
0
|
| |
0
|
|
|
Benefit and Perquisite Continuation
|
| |
0
|
| |
0
|
| |
0
|
| |
0
|
| |
0
|
| |
0
|
| |
0
|
|
|
Short Term Incentive
|
| |
0
|
| |
0
|
| |
0
|
| |
0
|
| |
0
|
| |
0
|
| |
0
|
|
|
Annual Long Term Incentives:
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Unvested Stock Options
|
| |
0
|
| |
0
|
| |
0
|
| |
0
|
| |
0
|
| |
0
|
| |
0
|
|
|
Unvested Restricted Stock Units
|
| |
0
|
| |
311,519
|
| |
311,519
|
| |
0
|
| |
350,021
|
| |
350,021
|
| |
311,519
|
|
|
Unvested Performance Restricted Stock Units
|
| |
0
|
| |
186,914
|
| |
186,914
|
| |
0
|
| |
700,054
|
| |
700,054
|
| |
186,914
|
|
|
Retirement Plan Distribution
|
| |
0
|
| |
0
|
| |
0
|
| |
0
|
| |
0
|
| |
0
|
| |
0
|
|
|
Incremental Benefits Due to Termination Event
|
| |
Termination
by Board
with Cause
($)
|
| |
Resignation
by the
Executive
without
Good
Reason(1)
($)
|
| |
Termination
by the
Board
without
Cause
($)
|
| |
Resignation
by the
Executive
with Good
Reason
($)
|
| |
Termination
due to
Change-in-
Control
($)
|
| |
Termination
due to
Executive’s
Death or
Disability
($)
|
| |
Termination
due to
Executive’s
Retirement(2)
($)
|
|
|
TOTAL
|
| |
100,590
|
| |
100,590
|
| |
1,621,881
|
| |
1,621,881
|
| |
4,873,530
|
| |
1,823,191
|
| |
0
|
|
|
Salary Continuation
|
| |
0
|
| |
0
|
| |
975,000
|
| |
975,000
|
| |
1,462,500
|
| |
0
|
| |
0
|
|
|
Benefit and Perquisite Continuation
|
| |
0
|
| |
0
|
| |
17,532
|
| |
17,532
|
| |
26,297
|
| |
0
|
| |
0
|
|
|
Short Term Incentive
|
| |
0
|
| |
0
|
| |
0
|
| |
0
|
| |
1,828,125
|
| |
0
|
| |
0
|
|
|
Annual Long Term Incentives:
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Unvested Stock Options
|
| |
0
|
| |
0
|
| |
0
|
| |
0
|
| |
0
|
| |
0
|
| |
0
|
|
|
Unvested Restricted Stock Units
|
| |
0
|
| |
0
|
| |
207,806
|
| |
207,806
|
| |
559,732
|
| |
559,732
|
| |
0
|
|
|
Unvested Performance Restricted Stock Units
|
| |
0
|
| |
0
|
| |
320,953
|
| |
320,953
|
| |
896,286
|
| |
1,162,869
|
| |
0
|
|
|
Retirement Plan Distribution
|
| |
100,590
|
| |
100,590
|
| |
100,590
|
| |
100,590
|
| |
100,590
|
| |
100,590
|
| |
0
|
|
|
| |
I 2020 PROXY STATEMENT
|
| |
69
|
EXECUTIVE COMPENSATION
|
|
|
|
•
|
The total compensation of our median employee was $28,523;
|
•
|
The total annualized compensation of Mr. Zeitlin was $4,911,860; and
|
•
|
The ratio of the median employee’s pay to that of Mr. Zeitlin was 1 to 172.
|
•
|
We selected May 1, 2019 as the determination date, two months before the end of our fiscal year 2019.
|
•
|
At that time, we prepared a file of our consolidated global payroll records. As of the determination date, our analysis
included approximately 22,000 employees working in 27 countries. This figure represented all our employees globally with the exception of 442 employees working in Australia and New Zealand. This group was fewer than 5% of our total
population and therefore was excluded from our analysis using the de minimus exemption.
|
•
|
We utilized total cash compensation as our consistently applied compensation measure to identify the median employee,
including annualized base salary, overtime, bonuses, sales incentives and commissions, as compiled from our payroll records. We converted compensation for employees paid in currencies other than the U.S. dollar into U.S. dollars based
on exchange rates as of the end of fiscal year 2019.
|
•
|
We examined a small group of employees for whom total cash compensation was clustered within a few dollars around the median.
From this group we selected an individual we determined to be reasonably representative of our median employee.
|
•
|
For purposes of the pay ratio, both the CEO's and median employee’s annual total compensation were calculated in accordance
with the requirements of Item 402(c)(2)(x) of SEC Regulation S-K.
|
70
|
| |
|
| |
I 2020 PROXY STATEMENT
|
|
Plan Category
|
| |
Number of securities
to be issued upon
exercise of
outstanding options,
warrants or rights
|
| |
Weighted-average
exercise price of
outstanding options,
warrants and rights
|
| |
Number of securities
remaining available
for future issuance
under equity comp
plans (excluding
securities reflected
in first column)
|
|
|
Equity compensation plans approved by security holders
|
| |
22,521,680(1)
|
| |
37.35(2)
|
| |
20,796,942(3)
|
|
|
Equity compensation plans not approved by security holders(4)
|
| |
36,260
|
| |
N/A
|
| |
0
|
|
|
Total
|
| |
22,557,940
|
| |
|
| |
20,796,942
|
|
•
|
2018 Stock Incentive Plan: 19,874,333
|
•
|
Employee Stock Purchase Plan: 922,609
|
|
| |
I 2020 PROXY STATEMENT
|
| |
71
|
|
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR”
APPROVAL OF THE SECOND AMENDED AND RESTATED TAPESTRY, INC. 2018 STOCK INCENTIVE PLAN.
|
|
72
|
| |
|
| |
I 2020 PROXY STATEMENT
|
PROPOSAL 4: APPROVAL OF THE AMENDED AND RESTATED TAPESTRY, INC. 2018 STOCK INCENTIVE PLAN
|
|
|
|
|
✔
|
| |
Fixed Maximum Share Limit
|
| |
✗
|
| |
No “Evergreen” Share Reserve
|
|
|
✔
|
| |
Double Trigger Equity Acceleration
Upon a Change-in-Control.
|
| |
✗
|
| |
No Dividends on Unvested Awards
|
|
|
✔
|
| |
Equity Ownership Guidelines for Directors and NEOs
|
| |
✗
|
| |
No Liberal “Change-in-Control” Definition
|
|
|
✔
|
| |
Separate Annual Compensation Limit for
Non-Employee Directors
|
| |
✗
|
| |
No Repricing of Underwater Stock
Options or Stock Appreciation Rights Without Stockholder Approval.
|
|
|
✔
|
| |
Minimum Vesting Requirements
|
| |
✗
|
| |
No Discounted Stock Options or SARs
|
|
|
✔
|
| |
NEO Awards Subject to Clawback Policy
|
| |
✗
|
| |
No Liberal Share Counting
|
|
•
|
We grant long-term equity incentives annually to many of our employees around the world, including our management employees
and most of our store managers, as well as our Outside Directors. In fiscal year 2020, more than 70% percent of Tapestry’s equity awards were granted to employees other than our NEOs. We do not currently anticipate any material changes
to the portion of the employee population receiving equity awards.
|
•
|
Utilizing long-term equity incentives to align the interests of our key employees to the outcomes achieved by our
stockholders has been a hallmark of our compensation philosophy and supports our objective to attract and retain the best talent in our industry.
|
•
|
We believe the substitution of deferred cash for equity would reduce the alignment of interests between employees and
shareholders, as well as our flexibility to use cash to invest in our business and maintain strong liquidity during the Covid-19 pandemic.
|
•
|
We seek to deliver compensation at competitive levels. If the Amended 2018 Plan is not approved, we would likely be compelled
to alter our compensation program to increase cash compensation or alternative forms of deferred compensation in order to remain competitive, which we do not believe would be as effective or in the best interests of our stockholders.
|
•
|
As further discussed under the Compensation Discussion and Analysis-Results of Stockholder Advisory Vote to Approve Executive Compensation and the HR Committee’s Response to Stockholder Feedback above, our last four
stockholder advisory votes on executive compensation have received an average of 97% stockholder support, with a range of 95% to 98% in favor during the fiscal 2016 to 2019 time frame.
|
•
|
Our HR Committee and our NEOs viewed each of these stockholder advisory votes as strong support in favor of our compensation
programs and our compensation-related decisions.
|
|
| |
I 2020 PROXY STATEMENT
|
| |
73
|
PROPOSAL 4: APPROVAL OF THE AMENDED AND RESTATED TAPESTRY, INC. 2018
STOCK INCENTIVE PLAN
|
|
|
|
•
|
New Aggregate Share Reserve. As discussed in more detail below, pursuant to the
Share Increase, 13,500,000 additional shares of our common stock will be authorized for issuance under the Amended 2018 Plan,
|
•
|
One share will be removed from the available reserve for each stock option or full-value share awarded after approval of the
Amended 2018 Plan. Shares that were granted prior to approval, and that are forfeited, will return to the Amended 2018 Plan at the ratio that applied to awards at the time they were granted.
|
|
Fiscal Year(1)
|
| |
Total shares granted
|
| |
Common Shares Outstanding
|
| |
Burn Rate
|
|
|
2018
|
| |
5,981,138
|
| |
281,938,089
|
| |
2.1%
|
|
|
2019
|
| |
3,348,110
|
| |
287,975,447
|
| |
1.2%
|
|
|
2020
|
| |
10,242,364
|
| |
286,836,337
|
| |
3.6%
|
|
|
3-yr average
|
| |
|
| |
|
| |
2.3%
|
|
74
|
| |
|
| |
I 2020 PROXY STATEMENT
|
PROPOSAL 4: APPROVAL OF THE AMENDED AND RESTATED TAPESTRY, INC. 2018 STOCK INCENTIVE PLAN
|
|
|
|
|
|
| |
Stock Options
|
| |
|
| |
|
| |
|
| |
|
| ||||||
|
Fiscal Year(1)
|
| |
Number
Outstanding
|
| |
Weighted
average
exercise
Price
|
| |
Weighted
average
remaining
term (yrs)
|
| |
Total Full-
Value
Awards
Outstanding(2)
|
| |
Shares
Available(3)
|
| |
Common
Shares
Outstanding
|
| |
Total
potential
equity
dilution
|
|
|
2018
|
| |
12,476,479
|
| |
$42.94
|
| |
6.6
|
| |
5,309,383
|
| |
19,345,329
|
| |
287,975,447
|
| |
12.9%
|
|
|
2019
|
| |
12,385,106
|
| |
$44.24
|
| |
6.0
|
| |
4,718,329
|
| |
25,121,833
|
| |
286,836,337
|
| |
14.7%
|
|
|
2020
|
| |
15,532,975
|
| |
$37.35
|
| |
6.2
|
| |
6,935,685
|
| |
19,874,333
|
| |
276,241,174
|
| |
15.3%
|
|
|
Current(4)
|
| |
15,622,632
|
| |
$35.77
|
| |
6.3
|
| |
10,071,982
|
| |
10,207,568
|
| |
277,373,538
|
| |
12.9%
|
|
|
New Shares
|
| |
|
| |
|
| |
|
| |
|
| |
13,500,000
|
| |
|
| |
4.9%
|
|
|
Total equity dilution including new shares
|
| |
23,707,568
|
| |
|
| |
17.8%
|
|
|
| |
I 2020 PROXY STATEMENT
|
| |
75
|
PROPOSAL 4: APPROVAL OF THE AMENDED AND RESTATED TAPESTRY, INC. 2018
STOCK INCENTIVE PLAN
|
|
|
|
76
|
| |
|
| |
I 2020 PROXY STATEMENT
|
PROPOSAL 4: APPROVAL OF THE AMENDED AND RESTATED TAPESTRY, INC. 2018 STOCK INCENTIVE PLAN
|
|
|
|
|
| |
I 2020 PROXY STATEMENT
|
| |
77
|
PROPOSAL 4: APPROVAL OF THE AMENDED AND RESTATED TAPESTRY, INC. 2018
STOCK INCENTIVE PLAN
|
|
|
|
78
|
| |
|
| |
I 2020 PROXY STATEMENT
|
PROPOSAL 4: APPROVAL OF THE AMENDED AND RESTATED TAPESTRY, INC. 2018 STOCK INCENTIVE PLAN
|
|
|
|
|
| |
I 2020 PROXY STATEMENT
|
| |
79
|
PROPOSAL 4: APPROVAL OF THE AMENDED AND RESTATED TAPESTRY, INC. 2018
STOCK INCENTIVE PLAN
|
|
|
|
80
|
| |
|
| |
I 2020 PROXY STATEMENT
|
PROPOSAL 4: APPROVAL OF THE AMENDED AND RESTATED TAPESTRY, INC. 2018 STOCK INCENTIVE PLAN
|
|
|
|
|
| |
I 2020 PROXY STATEMENT
|
| |
81
|
82
|
| |
|
| |
I 2020 PROXY STATEMENT
|
|
| |
I 2020 PROXY STATEMENT
|
| |
83
|
OTHER INFORMATION
|
|
|
|
84
|
| |
|
| |
I 2020 PROXY STATEMENT
|
|
ADJUSTMENTS FOR
FISCAL YEAR 2020
FINANCIAL HIGHLIGHTS
AND FISCAL YEAR 2020
ANNUAL INCENTIVE PLAN
|
| |
Tapestry, Inc.
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| |
Coach
|
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|
Net
Sales
(in millions)
|
| |
Operating
Income
(in millions)
|
| |
Diluted
Earnings
Per Share
|
| |
Net
Sales
(in millions)
|
| |
Operating
Income
(in millions)
|
| |||
|
As Reported: (GAAP Basis)
|
| |
$4,961.4
|
| |
$(550.8)
|
| |
$(2.34)
|
| |
$3,525.7
|
| |
$589.4
|
|
|
ERP Implementation
|
| |
N/A
|
| |
28.5
|
| |
0.08
|
| |
N/A
|
| |
N/A
|
|
|
Organization-related & Integration Costs
|
| |
N/A
|
| |
33.4
|
| |
0.13
|
| |
N/A
|
| |
0.6
|
|
|
Impairment
|
| |
N/A
|
| |
840.3
|
| |
2.82
|
| |
N/A
|
| |
178.6
|
|
|
Acceleration Program
|
| |
N/A
|
| |
$87.0
|
| |
$0.28
|
| |
N/A
|
| |
$18.5
|
|
|
Adjusted: (Non-GAAP basis as reported in Form 10-K)(1)
|
| |
4,961.4
|
| |
438.4
|
| |
0.97
|
| |
3,525.7
|
| |
787.1
|
|
|
Foreign Currency Adjustments
|
| |
12.1
|
| |
0.2
|
| |
0.04
|
| |
8.8
|
| |
0.6
|
|
|
Adjusted: (Non-GAAP Basis for AIP results measurement)
|
| |
4,973.5
|
| |
438.6
|
| |
1.01
|
| |
3,534.5
|
| |
787.7
|
|
|
ADJUSTMENTS FOR
FISCAL YEAR 2019
FINANCIAL HIGHLIGHTS
AND FISCAL YEAR 2019
RESULTS REFLECTED IN
FISCAL YEAR 2020
ANNUAL INCENTIVE PLAN
DISCLOSURE
|
| |
Tapestry, Inc.
|
| |
Coach
|
| |||||||||
|
Net
Sales
(in millions)
|
| |
Operating
Income
(in millions)
|
| |
Diluted
Earnings
Per Share
|
| |
Net
Sales
(in millions)
|
| |
Operating
Income
(in millions)
|
| |||
|
As Reported: (GAAP Basis)
|
| |
$6,027.1
|
| |
$819.7
|
| |
$2.21
|
| |
$4,270.9
|
| |
$1,148.4
|
|
|
ERP Implementation
|
| |
N/A
|
| |
36.9
|
| |
0.09
|
| |
N/A
|
| |
N/A
|
|
|
Integration & Acquisition Charges
|
| |
N/A
|
| |
94.4
|
| |
0.24
|
| |
N/A
|
| |
9.0
|
|
|
Impact of Tax Legislation
|
| |
N/A
|
| |
N/A
|
| |
0.03
|
| |
N/A
|
| |
N/A
|
|
|
Adjusted: (Non-GAAP basis as reported in Form 10-K)(1)
|
| |
$6,027.1
|
| |
$951.0
|
| |
$2.57
|
| |
$4,270.9
|
| |
$1,157.4
|
|
|
Foreign Currency Adjustments
|
| |
65.9
|
| |
12.4
|
| |
0.05
|
| |
52.0
|
| |
13.3
|
|
|
Adjustments related to Tax
|
| |
N/A
|
| |
N/A
|
| |
$(0.02)
|
| |
N/A
|
| |
N/A
|
|
|
Adjusted: (Non-GAAP Basis for AIP results measurement)
|
| |
$6,093.0
|
| |
$963.4
|
| |
$2.60
|
| |
$4,322.9
|
| |
$1,170.7
|
|
|
| |
I 2020 PROXY STATEMENT
|
| |
85
|
APPENDIX A
|
|
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ADJUSTMENTS FOR CEO PERFORMANCE OPTION
|
| |
Tapestry, Inc.
|
| ||||||
|
Adjusted Free Cash Flow for CEO Performance Option
|
| |
FY18
|
| |
FY19
|
| |
FY20
|
|
|
Net Cash Provided by Operating Activities: (GAAP Basis)
|
| |
$997.5
|
| |
$792.4
|
| |
$407.0
|
|
|
Purchases of Property & Equipment
|
| |
$(267.4)
|
| |
$(274.2)
|
| |
$(205.4)
|
|
|
Adjustments related to Tax
|
| |
$(41.7)
|
| |
$(5.4)
|
| |
$—
|
|
|
Interest Impact of Share Repurchase
|
| |
$—
|
| |
$0.2
|
| |
$—
|
|
|
Restructuring Charges
|
| |
$186.2
|
| |
$98.8
|
| |
$110.6
|
|
|
Adjustment related to accounting presentation change
|
| |
$(0.8)
|
| |
$(0.7)
|
| |
$—
|
|
|
Adjusted: (non-GAAP basis for CEO Performance Options)
|
| |
$873.8
|
| |
$611.1
|
| |
$312.2
|
|
86
|
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|
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I 2020 PROXY STATEMENT
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2.1
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“Administrator” shall mean the entity that conducts the general administration of the Plan as provided in Article 12.
With reference to the duties of the Committee under the Plan which have been delegated to one or more persons pursuant to Section 12.6, or as to which the Board has assumed, the term “Administrator” shall refer to such person(s) unless
the Committee or the Board has revoked such delegation or the Board has terminated the assumption of such duties.
|
2.2
|
“Affiliate” shall mean (a) Subsidiary; (b) any domestic eligible entity that is related to the Company or any
Subsidiary but is disregarded, under Treasury Regulation Section 301.7701-3, as an entity separate from either (i) the Company or (ii) any Subsidiary; (c) any corporation, trade or business (including, without limitation, a partnership
or limited liability
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2.3
|
“Applicable Accounting Standards” shall mean Generally Accepted Accounting Principles in the United States,
International Financial Reporting Standards or such other accounting principles or standards as may apply to the Company’s financial statements under United States federal securities laws from time to time.
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2.4
|
“Applicable Law” shall mean any applicable law, including, without limitation: (a) provisions of the Code, the
Securities Act, the Exchange Act and any rules or regulations thereunder; (b) corporate, securities, tax or other laws, statutes, rules, requirements or regulations, whether federal, state,
|
|
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I 2020 PROXY STATEMENT
|
| |
87
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APPENDIX B
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2.5
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“Automatic Exercise Date” shall mean, with respect to an Option or a Stock Appreciation Right, the last business day
of the applicable Option Term or Stock Appreciation Right Term that was initially established by the Administrator for such Option or Stock Appreciation Right (e.g., the last business day prior to the tenth anniversary of the date of
grant of such Option or Stock Appreciation Right if the Option or Stock Appreciation Right initially had a ten-year Option Term or Stock Appreciation Right Term, as applicable).
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2.6
|
“Award” shall mean an Option, a Restricted Stock award, a Restricted Stock Unit award, a Performance Award, a Dividend
Equivalents award, a Stock Payment award, a Deferred Stock award, a Deferred Stock Unit award or a Stock Appreciation Right, which may be awarded or granted under the Plan (collectively, “Awards”).
|
2.7
|
“Award Agreement” shall mean any written notice, agreement, terms and conditions, contract or other instrument or
document evidencing an Award, including through electronic medium, which shall contain such terms and conditions with respect to an Award as the Administrator shall determine consistent with the Plan.
|
2.8
|
“Award Limit” shall mean with respect to Awards that shall be payable in Shares or in cash, as the case may be, the
respective limit set forth in Section 3.3.
|
2.9
|
“Board” shall mean the Board of Directors of the Company.
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2.10
|
“Change in Control” shall mean and includes each of the following:
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(a)
|
A “Person” (which term, for purposes of this Section 2.10, shall have the meaning it has when it is used in Section
13(d) of the Exchange Act, but shall not include the Company, any underwriter temporarily holding securities pursuant to an offering of such securities, any trustee or other fiduciary holding securities under an employee benefit plan of
the Company, or any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of voting stock of the Company) is or becomes the beneficial owner (as defined in
Rule 13d-3 promulgated under the Exchange Act), directly
|
(b)
|
The Company consummates a reorganization, merger or consolidation of the Company or the Company sells, or otherwise disposes
of, all or substantially all of the Company’s property and assets, or the stockholders of the Company approve a liquidation or dissolution of the Company (other than a reorganization, merger, consolidation or sale which would result in
all or substantially all of the beneficial owners of the voting stock of the Company outstanding immediately prior thereto continuing to beneficially own, directly or indirectly (either by remaining outstanding or by being converted
into voting securities of the resulting entity), more than fifty percent (50%) of the combined voting power of the voting securities of the Company or such entity resulting from the transaction (including, without limitation, an entity
which as a result of such transaction owns the Company or all or substantially all of the Company’s property or assets, directly or indirectly) outstanding immediately after such transaction in substantially the same proportions
relative to each other as their ownership immediately prior to such transaction); or
|
(c)
|
During any period of 12 consecutive months, individuals who, at the beginning of such period, constitute the Board together
with any new Director(s) (other than a Director designated by a person who shall have entered into an agreement with the Company to effect a transaction described in Section 2.10(a) or Section 2.10(b)) whose election by the Board or
nomination for election by the Company’s stockholders was approved by a vote of at least a majority of the Directors then still in office who either were Directors at the beginning of the 12-month period or whose election or nomination
for election was previously so approved, cease for any reason to constitute a majority thereof.
|
88
|
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I 2020 PROXY STATEMENT
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APPENDIX B
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2.11
|
“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, together with the regulations and
official guidance promulgated thereunder.
|
2.12
|
“Committee” shall mean the Human Resources Committee of the Board, or another committee or subcommittee of the Board,
appointed as provided in Section 12.1. The Board may act as the "Committee" to the extent provided in Section 12.1.
|
2.13
|
“Common Stock” shall mean the common stock of the Company, par value $0.01 per share.
|
2.14
|
“Company” shall mean Tapestry, Inc., a Maryland corporation.
|
2.15
|
“Consultant” shall mean any consultant or advisor engaged to provide services to the Company or any Affiliate who
qualifies as a consultant under the applicable rules of the Securities and Exchange Commission for registration of shares on a Form S-8 Registration Statement.
|
2.16
|
“Deferred Stock” shall mean a right to receive Shares awarded under Section 9.4.
|
2.17
|
“Deferred Stock Unit” shall mean a right to receive Shares awarded under Section 9.5.
|
2.18
|
“Director” shall mean a member of the Board, as constituted from time to time.
|
2.19
|
“Director Limit” shall have the meaning set forth in Section 4.6.
|
2.20
|
“Dividend Equivalent” shall mean a right to receive the equivalent value (in cash or Shares) of dividends paid on
Shares, awarded under Section 9.2.
|
2.21
|
“DRO” shall mean a domestic relations order as defined by the Code or Title I of the Employee Retirement Income
Security Act of 1974, as amended from time to time, or the rules thereunder.
|
2.22
|
“Effective Date” shall mean the date the Plan is approved by the Company’s stockholders.
|
2.23
|
“Eligible Individual” shall mean any Employee, Consultant or Director designated by the Administrator as eligible to
receive an Award or Awards under the Plan.
|
2.24
|
“Employee” shall mean any officer or other employee (as determined in accordance with Section 3401(c) of the Code and
the Treasury Regulations thereunder) of the Company or of any Affiliate, but shall not include any person whose services with the Company are performed pursuant to a contract or arrangement that purports to treat the individual as an
independent contractor even if such individual is later determined (by judicial action or otherwise) to have been a common law employee of the Company rather than an independent contractor.
|
2.25
|
“Equity Restructuring” shall mean a nonreciprocal transaction between the Company and its stockholders, such as a
stock dividend, stock split, spin-off, rights offering or recapitalization through a large, nonrecurring cash dividend, that affects the number or kind of shares of Common Stock (or other securities of the Company) or the share price of
Common Stock (or other securities) and causes a change in the per-share value of the Common Stock underlying outstanding Awards.
|
2.26
|
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to time.
|
2.27
|
“Expiration Date” shall have the meaning given to such term in Section 13.1.
|
2.28
|
“Fair Market Value” shall mean, unless otherwise required by an applicable provision of the Code, as of any given
date, the closing sales price for a share of Common Stock as quoted on the New York Stock Exchange (or on any national securities exchange on which the Common Stock is then listed) for such date or, if there is no closing sales price
for a share of Common Stock on the date in question, the closing sales price for a share of Common Stock on the last preceding date for which such quotation exists, as reported in The Wall Street Journal or such other source as the
Administrator deems reliable. For purposes of the grant of any Award, the applicable date shall be the date on which the Award is granted, or if the Shares shall not have been reported or quoted on such date, on the first day prior
thereto on which the Shares were reported or quoted. For purposes of the exercise of any Award, the applicable date shall be the date a notice of exercise is received or, if not a day on which the applicable market is open, the next day
that it is open.
|
|
| |
I 2020 PROXY STATEMENT
|
| |
89
|
APPENDIX B
|
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|
2.29
|
“Full Value Award” shall mean any Award other than an Option or a Stock Appreciation Right, and that is settled by the
issuance of Shares.
|
2.30
|
“Greater Than 10% Stockholder” shall mean an individual then owning (within the meaning of Section 424(d) of the Code)
more than 10% of the total combined voting power of all classes of stock of the Company or any Affiliate corporation (as defined in Section 424(f) of the Code) or parent corporation thereof (as defined in Section 424(e) of the Code).
|
2.31
|
“Holder” shall mean a person who has been granted an Award.
|
2.32
|
“Incentive Stock Option” shall mean an Option that is intended to qualify as an incentive stock option and to conform
to the applicable provisions of Section 422 of the Code.
|
2.33
|
“Non-Employee Director” shall mean a Director of the Company who is not an Employee.
|
2.34
|
“Non-Employee Director Equity Compensation Policy” shall have the meaning set forth in Section 4.6.
|
2.35
|
“Non-Qualified Stock Option” shall mean an Option that is not an Incentive Stock Option.
|
2.36
|
“Option” shall mean a right to purchase Shares at a specified exercise price, granted under Article 5. An Option shall
be either a Non-Qualified Stock Option or an Incentive Stock Option; provided, however, that Options granted to Consultants and Non-Employee Directors shall only be Non-Qualified Stock Options.
|
2.37
|
“Option Term” shall have the meaning set forth in Section 5.4.
|
2.38
|
“Performance Award” shall mean a cash bonus award, stock bonus award, performance award or incentive award that is
paid in cash, Shares or a combination of both, awarded under Section 9.1.
|
2.39
|
“Performance Criteria” shall mean the criteria (and adjustments) that the Committee selects for an Award for purposes
of establishing the Performance Goal or Performance Goals for a Performance Period, determined as follows:
|
(a)
|
The Performance Criteria that may be used to establish Performance Goals include, without limitation, the following: net
earnings or losses (either before or after one or more of the following: interest, taxes, depreciation and amortization); economic value added (as determined by the Committee); gross or net sales or revenue; net income (either before or
after taxes); adjusted net income; operating earnings,
|
90
|
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|
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I 2020 PROXY STATEMENT
|
APPENDIX B
|
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(b)
|
The Administrator may, in its sole discretion, provide that one or more adjustments shall be made to one or more of the
Performance Goals. Such adjustments may include, without limitation, one or more of the following: items related to a change in accounting principle; items relating to financing activities; expenses for restructuring or productivity
initiatives; other non-operating items; items related to acquisitions; items attributable to the business operations of any entity acquired by the Company during the Performance Period; items related to the disposal of a business or
segment of a business; items related to discontinued operations that do not qualify as a segment of a business under Applicable Accounting Standards; items attributable to any stock dividend, stock split, combination or exchange of
stock occurring during the Performance Period; any other items of significant income or expense which are determined to be appropriate adjustments; items relating to unusual or extraordinary corporate transactions, events or
developments; items related to amortization of acquired intangible assets; items that are outside the scope of the Company’s core, on-going business activities; items related to acquired in-process research and development; items
relating to changes in tax laws; items relating to major licensing or partnership arrangements; items relating to asset impairment charges; items relating to gains or losses for litigation, arbitration and contractual settlements; items
attributable to expenses incurred in connection with a reduction in force or early retirement initiative; items relating to any other unusual or nonrecurring events or changes in Applicable Law, accounting principles or business
conditions; or such other adjustments the Committee determines appropriate, in its sole discretion, taking into account such factors that the Committee deems relevant. The Committee shall have the discretion to determine whether, when
and to what extent an adjustment is
|
2.40
|
“Performance Goals” shall mean, for a Performance Period, one or more goals established in writing by the
Administrator for the Performance Period based upon one or more Performance Criteria. Depending on the Performance Criteria used to establish such Performance Goals, the Performance Goals may be expressed in terms of overall Company
performance or the performance of an Affiliate, Subsidiary, division, business unit, or individual. The achievement of each Performance Goal shall be determined, to the extent applicable, with reference to Applicable Accounting
Standards.
|
2.41
|
“Performance Period” shall mean one or more periods of time, which may be of varying and overlapping durations, as the
Administrator may select, over which the attainment of one or more Performance Goals will be measured for the purpose of determining a Holder’s right to, and the payment of, an Award.
|
2.42
|
“Performance Stock Unit” shall mean a Performance Award awarded under Section 9.1 which is denominated in units of
value, including dollar value of Shares.
|
2.43
|
“Permitted Transferee” shall mean, with respect to a Holder, any “family member” of the Holder, as defined in the
instructions to Form S-8 Registration Statement under the Securities Act, after taking into account Applicable Law.
|
2.44
|
“Plan” has the meaning set forth in Article 1.
|
2.45
|
“Prior Plans” shall mean the Amended and Restated Coach, Inc. 2010 Stock Incentive Plan (Amended and Restated most
recently as of September 20, 2017) (the “2010 Plan”), the Coach, Inc. 2004 Stock Incentive Plan (Amended and Restated Effective May 8, 2008), and the Coach, Inc. 2000 Stock Incentive Plan (Amended and Restated as of August 9,
2001), as such plans may be amended from time to time.
|
2.46
|
“Program” shall mean any program adopted by the Administrator pursuant to the Plan containing the terms and conditions
intended to govern a specified type of Award granted under the Plan and pursuant to which such type of Award may be granted under the Plan.
|
2.47
|
“Restricted Stock” shall mean Common Stock awarded under Article 7 that is subject to certain restrictions and may be
subject to risk of forfeiture or repurchase.
|
|
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I 2020 PROXY STATEMENT
|
| |
91
|
APPENDIX B
|
|
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|
2.48
|
“Restricted Stock Units” shall mean the right to receive Shares awarded under Article 8.
|
2.49
|
“Securities Act” shall mean the Securities Act of 1933, as amended.
|
2.50
|
“Share” shall mean a share of Common Stock.
|
2.51
|
“Share Limit” shall mean the aggregate number of Shares set forth in Section 3.1(a), as adjusted pursuant to Sections
3.1(b) and (c).
|
2.52
|
“Stock Appreciation Right” shall mean a stock appreciation right granted under Article 10.
|
2.53
|
“Stock Appreciation Right Term” shall have the meaning set forth in Section 10.4.
|
2.54
|
“Stock Payment” shall mean (a) a payment in the form of Shares, or (b) an option or other right to purchase Shares, as
part of a bonus, deferred compensation or other arrangement, awarded under Section 9.3.
|
2.55
|
“Subsidiary” shall mean any entity (other than the Company), whether domestic or foreign, in an unbroken chain of
entities beginning with the Company if each of the entities other than the last entity in the unbroken chain beneficially owns, at the time of the determination, securities or interests representing at least fifty percent (50%) of the
total combined voting power of all classes of securities or interests in one of the other entities in such chain.
|
2.56
|
“Substitute Award” shall mean an Award granted under the Plan upon the assumption of, or in substitution for,
outstanding equity awards previously granted by a company or other entity in connection with a corporate transaction, such as a merger, combination, consolidation or acquisition of property or stock; provided, however,
that in no event shall the term “Substitute Award” be construed to refer to an award made in connection with the cancellation and repricing of an Option or Stock Appreciation Right.
|
2.57
|
“Termination of Service” shall mean:
|
(a)
|
As to a Consultant, the time when the engagement of a Holder as a Consultant to the Company or any Affiliate is terminated
for any reason, with or without cause, including, without limitation, by resignation, discharge, death or retirement, but excluding terminations where the Consultant simultaneously commences or remains in employment or service with the
Company or any Affiliate.
|
(b)
|
As to a Non-Employee Director, the time when a Holder who is a Non-Employee Director ceases to be a Director for any reason,
including,
|
(c)
|
As to an Employee, the time when the employee-employer relationship between a Holder and the Company or any Affiliate is
terminated for any reason, including, without limitation, a termination by resignation, discharge, death, disability or retirement; but excluding terminations where the Holder simultaneously commences or remains in employment or service
with the Company or any Affiliate.
|
92
|
| |
|
| |
I 2020 PROXY STATEMENT
|
APPENDIX B
|
|
|
|
3.1
|
Number of Shares.
|
(a)
|
Subject to Section 13.2 and Sections 3.1(b) and (c), the aggregate number of Shares which may be issued or transferred
pursuant to Awards under the Plan shall be the sum of (i) 51,693,835 and (ii) Shares subject to an award under any Prior Plan that is outstanding as of the Effective Date that become available for Awards as permitted by Section 3.1(c).
|
(b)
|
If any Shares subject to an Award are forfeited or expire or such Award is settled for cash (in whole or in part), the Shares
subject to such Award shall, to the extent of such forfeiture, expiration or cash settlement, again be available for future grants of Awards under the Plan. Notwithstanding the foregoing, to the extent that a Full-Value Award that was
granted prior to the Effective Date is forfeited or expires or such Full-Value Award is settled for cash (in whole or in part), the Shares available under the Plan shall be increased by 2.45 Shares for each Share subject to any such
Full-Value Award granted under the Plan that is forfeited, expired or settled in cash prior to, on or following the Effective Date. Notwithstanding anything to the contrary contained herein, the following Shares shall not be added to
the Shares authorized for grant under Section 3.1(a) and will not be available for future grants of Awards under the Plan: (i) Shares tendered by a Holder or withheld by the Company in payment of the exercise price of an Option;
(ii) Shares tendered by the Holder or withheld by the Company to satisfy any tax withholding obligation with respect to an Award; (iii) Shares subject to a Stock Appreciation Right that are not issued in connection with the stock
settlement of the Stock Appreciation Right on exercise thereof; and (iv) Shares purchased on the open market with the cash proceeds from the exercise of Options.
|
(c)
|
If any Shares subject to an award under any Prior Plan outstanding on the Effective Date are forfeited or expire or such
award is settled for cash (in whole or in part), to the extent of such forfeiture, expiration or cash settlement, a number of Shares subject to such award under such Prior Plan shall again be available for future grants of Awards under
the Plan at the same ratio that applied to such award at the time of grant of the award; provided, however, that the following Shares subject to Prior Plan awards shall not be added to the Shares authorized for grant
under Section 3.1(a) and will not be available for future grants of Awards under the Plan: (i) Shares tendered by a Holder or withheld by the Company in payment of the exercise price of a stock option award granted under a Prior Plan;
(ii) Shares tendered by the Holder or withheld by the Company to satisfy any tax withholding obligation with respect to an award granted under a Prior Plan; (iii) Shares subject to a stock appreciation right granted under a Prior Plan
that are not issued in connection with the stock settlement of the stock appreciation right on exercise thereof; and (iv) Shares purchased on the open market with the cash proceeds from the exercise of stock option awards granted under
a
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|
| |
I 2020 PROXY STATEMENT
|
| |
93
|
APPENDIX B
|
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(d)
|
Substitute Awards shall not reduce the Shares authorized for grant under the Plan. Additionally, in the event that a company
acquired by the Company or any Affiliate or with which the Company or any Affiliate combines has shares available under a pre-existing plan approved by stockholders of such company and such pre-existing plan was not adopted in
contemplation of such acquisition or combination, the shares available for grant pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or
formula used in such acquisition or combination to determine the consideration payable to the holders of common stock of the entities party to such acquisition or combination) may be used for Awards under the Plan and shall not reduce
the Shares authorized for grant under the Plan; provided that Awards using such available shares shall not be made after the date awards or grants could have been made under the terms of the pre-existing plan, absent the
acquisition or combination, and shall only be made to individuals who were not employed by or providing services to the Company or its Subsidiaries (excluding individuals employed by or providing services to the acquired or combined
company) immediately prior to such acquisition or combination.
|
3.2
|
Stock Distributed. Any Shares distributed pursuant to
|
3.3
|
Limitation on Number of Shares Subject to Awards. Notwithstanding any provision in the Plan to the contrary, and
subject to Section 13.2, the maximum aggregate number of Shares with respect to all Awards that may be granted to any one Eligible Individual during any fiscal year shall be 1,000,000 and the maximum aggregate amount of cash that may be
paid in cash to any one Eligible Individual during any fiscal year with respect to one or more Awards payable in cash shall be $6,000,000. Shares subject to Awards which are canceled shall continue to be counted against the Award Limit.
The maximum number of Shares that may be subject to Incentive Stock Options during the term of the Plan is 10,500,000 Shares
|
3.4
|
Award Vesting Limitations. Notwithstanding any other provision of the Plan to the contrary, but subject to Section
13.2 of the Plan, Awards granted under the Plan shall vest no earlier than the first anniversary of the date the Award is granted; provided, however, that, notwithstanding the foregoing, Awards that result in the
issuance of an aggregate of up to 5% of the shares of Common Stock available pursuant to Section 3.1(a) may be granted to any one or more Eligible Individuals without respect to such minimum vesting provisions. Nothing in this Section
3.4 shall preclude the Administrator from taking action, in its sole discretion, to accelerate the vesting of any Award in connection with or following a Holder’s death, disability, Termination of Service or the consummation of a Change
in Control.
|
4.1
|
Participation. The Administrator may, from time to time, select, in its sole discretion, from among all Eligible
Individuals those to whom an Award shall be granted and shall determine, in its sole discretion, the nature and amount of each Award, which shall not be inconsistent with the requirements of the Plan. Except as provided in Section 4.6
regarding the grant of Awards pursuant to the Non-Employee Director Equity Compensation Policy, no Eligible Individual shall have any right to be granted an Award pursuant to the Plan.
|
4.2
|
Award Agreement. Each Award shall be evidenced by an Award Agreement that sets forth the terms,
|
4.3
|
Limitations Applicable to Section 16 Persons. Notwithstanding any other provision herein, the Plan, and any Award
granted or awarded to any individual who is then subject to Section 16 of the Exchange Act,
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APPENDIX B
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4.4
|
At-Will Employment; Voluntary Participation. Nothing in the Plan or in any Program or Award Agreement hereunder shall
confer upon any Holder any right to continue in the employ or service of, or as an Employee, Consultant or Director for, the Company or any Affiliate, or shall interfere with or restrict in any way the rights of the Company and any
Affiliate, which rights are hereby expressly reserved, to discharge any Holder at any time for any reason whatsoever, with or without cause, and with or without notice, or to terminate or change all other terms and conditions of
employment or engagement, except to the extent expressly provided otherwise in a written agreement between the Holder and the Company or any Affiliate in effect on or prior to the date an Award is granted. Participation by each Holder
in the Plan shall be voluntary and nothing in the Plan shall be construed as mandating that any Eligible Individual shall participate in the Plan.
|
4.5
|
Foreign Holders. Notwithstanding any provision of the Plan to the contrary, in order to comply with the laws and
regulations in countries other than the United States in which the Company and its Subsidiaries operate or have Employees, Consultants or Non-Employee Directors, or in order to comply with the requirements of any foreign securities
exchange, the Administrator, in its sole discretion, shall have the power and authority to: (a) determine which Affiliates or Subsidiaries shall be covered by the Plan; (b) determine which Eligible Individuals outside the United States
are eligible to participate in the Plan; (c) modify the terms and conditions of any Award granted to Eligible Individuals outside the United States to comply with applicable foreign laws and regulations or listing requirements of any
such foreign securities exchange; (d) establish subplans and modify exercise procedures and other terms and procedures, to the extent such actions may be necessary or advisable (any such subplans and/or modifications shall be attached
to the Plan as appendices); provided, however, that no such subplans and/or modifications shall increase the Share Limit, the Award Limit or the Director Limit; and (e) take any action, before or after an Award is made,
that it deems advisable to obtain approval or comply with any necessary local
|
4.6
|
Non-Employee Director Awards. The Administrator may, in its sole discretion, provide that Awards granted to
Non-Employee Directors shall be granted pursuant to a written non-discretionary formula established by the Administrator (the “Non-Employee Director Equity Compensation Policy”), subject to the terms, conditions and
limitations of the Plan. The Non-Employee Director Equity Compensation Policy shall set forth the type of Award(s) to be granted to Non-Employee Directors, the number of Shares to be subject to Non-Employee Director Awards, the
conditions on which such Awards shall be granted, become exercisable and/or payable and expire, and such other terms and conditions as the Administrator shall determine in its sole discretion. The Non-Employee Director Equity
Compensation Policy may be modified by the Administrator from time to time in its sole discretion. Notwithstanding any provision to the contrary in the Plan or in the Non-Employee Director Equity Compensation Policy, the maximum
aggregate grant date fair value of Awards granted to a Non-Employee Director during any calendar year, plus any cash-based compensation granted to a Non-Employee Director in respect of any calendar year (whether paid in cash or Shares
or on a current or deferred basis), in each case, solely with respect to the individual’s service as a Non-Employee Director, may not exceed $800,000 based on the aggregate Fair Market Value (determined as of the date of grant) of any
equity-based Award plus the aggregate value (determined as of the date of grant) of any cash-based compensation (the “Director Limit”).
|
4.7
|
Stand-Alone and Tandem Awards. Awards granted pursuant to the Plan may, in the sole discretion of the Administrator,
be granted either alone, in addition to, or in tandem with, any other Award granted pursuant to the Plan. Awards granted in addition to or in tandem with other Awards may be granted either at the same time as or at a different time from
the grant of such other Awards.
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APPENDIX B
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|
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5.1
|
Granting of Options to Eligible Individuals. The Administrator is authorized to grant Options to Eligible Individuals
from time to time, in its sole discretion, on such terms and conditions as it may determine, which shall not be inconsistent with the Plan.
|
5.2
|
Qualification of Incentive Stock Options. No Incentive Stock Option shall be granted to any person who is not an
Employee of the Company or any “subsidiary corporation” of the Company (as defined in Section 424(f) of the Code) or “parent corporation” of the Company (as defined in Section 424(e) of the Code). No person who qualifies as a Greater
Than 10% Stockholder may be granted an Incentive Stock Option unless such Incentive Stock Option conforms to the applicable provisions of Section 422 of the Code. Any Incentive Stock Option granted under the Plan may be modified by the
Administrator, with the consent of the Holder, to disqualify such Option from treatment as an “incentive stock option” under Section 422 of the Code. To the extent that the aggregate Fair Market Value of Shares with respect to which
“incentive stock options” (within the meaning of Section 422 of the Code, but without regard to Section 422(d) of the Code) are exercisable for the first time by a Holder during any calendar year under the Plan, and all other plans of
the Company and any parent or subsidiary corporation thereof (each as defined in Section 424(e) and (f) of the Code, respectively), exceeds $100,000, the Options shall be treated as Non-Qualified Stock Options to the extent required by
Section 422 of the Code. The rule set forth in the immediately preceding sentence shall be applied by taking Options and other “incentive stock options” into account in the order in which they were granted and the Fair Market Value of
Shares shall be determined as of the time the respective Options were granted.
|
5.3
|
Option Exercise Price. The exercise price per Share subject to each Option shall be set by the Administrator, but
shall not be less than 100% of the Fair Market Value of a Share on the date the Option is granted (or, as to Incentive Stock Options, on the date the Option is modified, extended or renewed for purposes of Section 424(h) of the Code).
In addition, in the case of Incentive Stock Options granted to a Greater Than 10% Stockholder, such price shall not be less than 110% of the Fair Market Value of a Share
|
5.4
|
Option Term. The term of each Option (the “Option Term”) shall be set by the Administrator in its sole
discretion; provided, however, that the Option Term shall not be more than ten (10) years from the date the Option is granted, or five (5) years from the date an Incentive Stock Option is granted to a Greater Than 10%
Stockholder. The Administrator shall determine the time period, including the time period following a Termination of Service, during which the Holder has the right to exercise the vested Options, which time period may not extend beyond
the last day of the Option Term. Except as limited by the requirements of Section 409A or Section 422 of the Code or the first sentence of this Section 5.4, the Administrator may extend the Option Term of any outstanding Option, and may
extend the time period during which vested Options may be exercised, in connection with any Termination of Service of the Holder, and may amend, subject to Section 13.1, any other term or condition of such Option relating to such a
Termination of Service.
|
5.5
|
Option Vesting.
|
(a)
|
The period during which the right to exercise, in whole or in part, an Option vests in the Holder shall be set by the
Administrator and the Administrator may determine that an Option may not be exercised in whole or in part for a specified period after it is granted. Such vesting may be based on service with the Company or any Affiliate, any of the
Performance Criteria, or any other criteria selected by the Administrator, and, except as limited by the Plan, at any time after the grant of an Option, the Administrator, in its sole discretion, and subject to whatever terms and
conditions it selects, may accelerate the period during which an Option vests.
|
(b)
|
No portion of an Option which is unexercisable at a Holder’s Termination of Service shall thereafter become exercisable,
except as may be otherwise provided by the Administrator either in the applicable Program, the Award Agreement evidencing the grant of an Option, in a binding written agreement between the Holder and the Company entered into on or prior
to the date an Option is granted, or by action of the Administrator following the grant of the Option.
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APPENDIX B
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|
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|
5.6
|
Substitute Awards. Notwithstanding the foregoing provisions of this Article 5 to the contrary, in the case of an
Option that is a Substitute Award, the price per share of the Shares subject to such Option may be less than the Fair Market Value per share on the date of grant; provided that the excess of: (a) the aggregate Fair Market Value
(as of the date such Substitute Award is granted) of the Shares subject to the Substitute Award, over (b) the aggregate exercise price thereof does not exceed the excess of: (x) the aggregate fair market value (as of the time
|
5.7
|
Substitution of Stock Appreciation Rights. The Administrator may provide in the applicable Program or the Award
Agreement evidencing the grant of an Option that the Administrator, in its sole discretion, shall have the right to substitute a Stock Appreciation Right for such Option at any time prior to or upon exercise of such Option; provided
that such Stock Appreciation Right shall be exercisable with respect to the same number of Shares for which such substituted Option would have been exercisable, and shall also have the same exercise price, vesting schedule and remaining
term as the substituted Option.
|
6.1
|
Partial Exercise. An exercisable Option may be exercised in whole or in part. However, an Option shall not be
exercisable with respect to fractional Shares and the Administrator may require that, by the terms of the Option, a partial exercise must be with respect to a minimum number of Shares.
|
6.2
|
Expiration of Option Term: Automatic Exercise of In-The-Money Options. Unless otherwise provided by the
Administrator (in an Award Agreement or otherwise) or as otherwise directed by an Option Holder in writing to the Company, each vested and exercisable Option outstanding on the Automatic Exercise Date with an exercise price per share
that is less than the Fair Market Value per share of Common Stock as of such date shall automatically and without further action by the Option Holder or the Company be exercised on the Automatic Exercise Date. In the sole discretion of
the Administrator, payment of the exercise price of any such Option shall be made pursuant to Section 11.1(b) or 11.1(c) and the Company or any Affiliate shall deduct or withhold an amount sufficient to satisfy all taxes associated with
such exercise in accordance with Section 11.2. Unless otherwise determined by the Administrator, this Section 6.2 shall not apply to an Option if the Holder of such Option incurs a Termination of Service on or before the Automatic
Exercise Date. For the avoidance of doubt, no Option with an exercise price per share
|
6.3
|
Manner of Exercise. All or a portion of an exercisable Option shall be deemed exercised upon delivery of all of the
following to the Secretary of the Company, the stock plan administrator of the Company or such other person or entity designated by the Administrator, or his, her or its office, as applicable:
|
(a)
|
A written or electronic notice complying with the applicable rules established by the Administrator stating that the Option,
or a portion thereof, is exercised. The notice shall be signed by the Holder or other person then entitled to exercise the Option or such portion of the Option;
|
(b)
|
Such representations and documents as the Administrator, in its sole discretion, deems necessary or advisable to effect
compliance with Applicable Law. The Administrator may, in its sole discretion, also take whatever additional actions it deems appropriate to effect such compliance including, without limitation, placing legends on share certificates and
issuing stop-transfer notices to agents and registrars;
|
(c)
|
In the event that the Option shall be exercised pursuant to Section 11.3 by any person or persons
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APPENDIX B
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|
|
|
(d)
|
Full payment of the exercise price and applicable withholding taxes to the stock plan administrator of the Company for the
Shares with respect to which the Option, or portion thereof, is exercised, in a manner permitted by Sections 11.1 and 11.2.
|
6.4
|
Notification Regarding Disposition. The Holder shall give the Company prompt written or electronic notice of any
disposition of shares of Common Stock acquired by exercise of an Incentive Stock Option which occurs within (a) two years from the date of granting (including the date the Option is modified, extended or renewed for purposes of Section
424(h) of the Code) such Option to such Holder, or (b) one year after the transfer of such Shares to such Holder.
|
7.1
|
Award of Restricted Stock.
|
(a)
|
The Administrator is authorized to grant Restricted Stock to Eligible Individuals, and shall determine the terms and
conditions, including the restrictions applicable to each award of Restricted Stock, which terms and conditions shall not be inconsistent with the Plan, and may impose such conditions on the issuance of such Restricted Stock as it deems
appropriate in its sole discretion.
|
(b)
|
The Administrator shall establish the purchase price, if any, and form of payment for Restricted Stock; provided, however,
that if a purchase price is charged, such purchase price shall be no less than the par value, if any, of the Shares to be purchased, unless otherwise permitted by Applicable Law. In all cases, legal consideration shall be required for
each issuance of Restricted Stock to the extent required by Applicable Law.
|
7.2
|
Rights as Stockholders. Subject to Section 7.4, upon issuance of Restricted Stock, the Holder shall have, unless
otherwise provided by the Administrator, all the rights of a stockholder with respect to said Shares, subject to the restrictions in the applicable Program or in each individual Award Agreement, including the right to receive all
dividends and other distributions paid or made with respect to the Shares; provided, however, that, in the sole discretion of the Administrator, any extraordinary distributions with respect to the Shares shall be subject
to the restrictions set forth in Section 7.3. Notwithstanding the foregoing, (i) dividends may accrue in connection with Restricted Stock, but shall not be paid to a Holder prior to the date on which the applicable Shares related to the
dividends become fully vested, and (ii) to the extent such vesting does not occur with respect to any Restricted Stock, any related accrued dividends shall be forfeited.
|
7.3
|
Restrictions. All shares of Restricted Stock (including any shares received by Holders thereof with respect to shares
of Restricted Stock as a result of stock dividends, stock splits or any other form of recapitalization) shall, in the terms of the applicable Program or in each individual Award Agreement, be subject to such restrictions and vesting
requirements as the Administrator shall provide. Such restrictions may include, without limitation, restrictions concerning voting rights and transferability and such restrictions may lapse separately or in combination at such times and
pursuant to such circumstances or based on such criteria as selected by the Administrator, including, without limitation, criteria based on the Holder’s duration of employment, directorship or consultancy with the Company, the
Performance Criteria, Company performance, individual performance or other criteria selected by the Administrator. Subject to Section 3.4, by action taken after the Restricted Stock is issued, the Administrator may, on such terms and
conditions as it may determine, in its sole discretion, to be appropriate, accelerate the vesting of such Restricted Stock by removing any or all of the restrictions imposed by the terms of the applicable Program or Award Agreement.
Restricted Stock may not be sold or encumbered until all restrictions are terminated or expire.
|
7.4
|
Repurchase or Forfeiture of Restricted Stock. Except as otherwise determined by the Administrator at the time of the
grant of the Award or thereafter, if no price was paid by the Holder for the Restricted Stock, upon a Termination of Service during the applicable restriction period, the Holder’s rights in unvested Restricted Stock then subject to
restrictions shall lapse, and such Restricted Stock shall be surrendered to the Company and cancelled without consideration. If a price was paid by the Holder for the Restricted Stock, upon a Termination of Service during the applicable
restriction period, the Company shall have
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APPENDIX B
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|
|
|
7.5
|
Certificates for Restricted Stock. Restricted Stock granted pursuant to the Plan may be evidenced in such manner as
the Administrator shall determine. Certificates or book entries evidencing shares of Restricted Stock shall include an appropriate legend
|
7.6
|
Section 83(b) Election. If a Holder makes an election under Section 83(b) of the Code to be taxed with respect to the
Restricted Stock as of the date of transfer of the Restricted Stock rather than as of the date or dates upon which the Holder would otherwise be taxable under Section 83(a) of the Code, the Holder shall be required to deliver a copy of
such election to the Company promptly after filing such election with the Internal Revenue Service.
|
8.1
|
Grant of Restricted Stock Units. The Administrator is authorized to grant Awards of Restricted Stock Units to any
Eligible Individual selected by the Administrator in such amounts and subject to such terms and conditions as determined by the Administrator in its sole discretion.
|
8.2
|
Term. Except as otherwise provided herein, the term of a Restricted Stock Unit award shall be set by the Administrator
in its sole discretion.
|
8.3
|
Purchase Price. The Administrator shall specify the purchase price, if any, to be paid by the Holder to the Company
with respect to any Restricted Stock Unit award; provided, however, that value of the consideration shall not be less than the par value of a Share, unless otherwise permitted by Applicable Law.
|
8.4
|
Vesting of Restricted Stock Units. At the time of grant, the Administrator shall specify the date or dates on which
the Restricted Stock Units shall become fully vested and nonforfeitable, and may specify such conditions to vesting as it deems appropriate, including, without limitation, vesting based upon the Holder’s duration of service to the
Company or any Affiliate, one or more Performance Criteria, Company performance, individual performance or other specific criteria, in each case on a specified date or dates or over any period or periods, as determined by the
Administrator, subject to Section 3.4.
|
8.5
|
Settlement and Payment. At the time of grant, the Administrator shall specify the settlement date applicable to each
grant of Restricted Stock Units, which shall be no earlier than the vesting date or dates of the Award and may be determined at the election of the Holder (if permitted by the applicable Award Agreement); provided that, except
as otherwise determined by the Administrator, set forth in any applicable Award Agreement, and subject to compliance with Section 409A of the Code, in no event shall the settlement date relating to each Restricted Stock Unit occur
following the later of (a) the 15th day of the third month following the end of the calendar year in which the applicable portion of the Restricted Stock Unit award vests; or (b) the 15th day of the third month following the end of the
Company’s fiscal year in which the applicable portion of the Restricted Stock Unit award vests. On the settlement date, the Company shall, subject to Section 11.4(e), transfer to the Holder one unrestricted, fully transferable Share for
each Restricted Stock Unit scheduled to be paid out on such date and not previously forfeited, or in the sole discretion of the Administrator, an amount in cash equal to the Fair Market Value of such Shares on the settlement date or a
combination of cash and Shares as determined by the Administrator.
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APPENDIX B
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|
|
|
8.6
|
Payment upon Termination of Service. An Award of Restricted Stock Units shall only be payable while the Holder is an
Employee, a Consultant or a Director, as applicable; provided, however, that the Administrator, in its sole discretion may provide (in an Award Agreement or otherwise) that a Restricted Stock Unit award may be paid
subsequent to a Termination of Service in certain events, including a Change in Control, the Holder’s death, retirement or disability or any other specified Termination of Service.
|
8.7
|
No Rights as a Stockholder. Unless otherwise determined by the Administrator, a Holder of Restricted Stock Units shall
possess no incidents of
|
8.8
|
Dividend Equivalents. Subject to Section 9.2, the Administrator may, in its sole discretion, provide that Dividend
Equivalents shall be earned by a Holder of Restricted Stock Units based on dividends declared on the Common Stock, to be credited as of dividend payment dates during the period between the date an Award of Restricted Stock Units is
granted to a Holder and the settlement date of such Award.
|
9.1
|
Performance Awards.
|
(a)
|
The Administrator is authorized to grant Performance Awards, including, without limitation, awards of Performance Stock
Units, to any Eligible Individual. The value of Performance Awards, including Performance Stock Units, may be linked to any one or more of the Performance Goals, Performance Criteria or other specific criteria determined by the
Administrator, in each case on a specified date or dates or over any period or periods and in such amounts as may be determined by the Administrator with respect to a particular Holder. In making such determinations, the Administrator
may consider (among such other factors as it deems relevant) the contributions and responsibilities of the particular Holder. Performance Awards, including Performance Stock Units, may be paid in cash, Shares, or a combination of cash
and Shares, as determined by the Administrator in its sole discretion.
|
(b)
|
With respect to any Performance Award granted to one or more Eligible Individuals, when the outcome of the Performance
Goal(s) for such Award remains substantially uncertain, the Committee shall, in writing, (a) designate one or more Eligible Individuals, (b) select the Performance Criteria applicable to the Performance Period, (c) establish the
Performance Goals, and amounts of such Awards, as applicable, which may be earned for such Performance Period based on the Performance Criteria, and (d) specify the relationship between Performance Criteria and the Performance Goals
|
(c)
|
Without limiting Section 9.1(a), the Administrator may grant Performance Awards to any Eligible Individual in the form of a
cash bonus payable upon the attainment of one or more Performance Criteria, or any other specific criteria, which are established by the Administrator, in each case on a specified date or dates or over any period or periods determined
by the Administrator in its sole discretion; provided, however, the Performance
|
(d)
|
Unless otherwise provided in the applicable Program or Award Agreement, or in a binding
|
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I 2020 PROXY STATEMENT
|
APPENDIX B
|
|
|
|
9.2
|
Dividend Equivalents.
|
(a)
|
Dividend Equivalents may be granted by the Administrator based on dividends declared on the Common Stock, to be credited as
of dividend payment dates with respect to dividends with record dates that occur during the period between the date an Award is granted to a Holder and the date such Award vests, is exercised, is distributed or expires, as determined by
the Administrator in its sole discretion. Such Dividend Equivalents shall be converted to cash or additional Shares by such formula and at such time and subject to such restrictions and limitations as may be determined by the
Administrator in its sole discretion. Notwithstanding the foregoing, (i) Dividend Equivalents may accrue in connection with an Award, but shall not be paid to a Holder prior to the date on which the Award (or the applicable portion of
the Award to which the Dividend Equivalents relate) becomes vested and (ii) to the extent such vesting does not occur with respect to an Award, any related accrued Dividend Equivalents shall be forfeited.
|
(b)
|
Notwithstanding the foregoing, no Dividend Equivalents shall be payable with respect to Options or Stock Appreciation Rights.
|
9.3
|
Stock Payments. The Administrator is authorized to make Stock Payments to any Eligible Individual. The number or value
of Shares of any Stock Payment shall be determined by the Administrator and may be based upon one or more Performance Criteria or any other specific criteria, including service to the Company or any Affiliate, determined by the
Administrator in its sole discretion. Shares underlying a Stock Payment which is subject to a vesting schedule or other conditions or criteria set by the Administrator shall not be issued until those conditions have been satisfied.
|
9.4
|
Deferred Stock. The Administrator is authorized to grant Deferred Stock to any Eligible Individual. The number of
shares of Deferred Stock shall be determined by the Administrator in its sole discretion and may, but is not required to, be based on one or more Performance Criteria or other specific criteria, including service to the Company or any
Affiliate, as the Administrator determines, in each case on a specified date or dates or over any period or periods determined by the Administrator in its sole discretion. Shares underlying a Deferred Stock award which is subject to a
vesting schedule or other conditions or criteria set by the Administrator shall be issued on the vesting date(s) or date(s) that those conditions and criteria have been satisfied, as applicable. Unless otherwise provided by the
Administrator, a Holder of Deferred Stock shall have no rights as a Company stockholder with respect to such Deferred Stock until such time as the Award has vested and any other applicable conditions and/or criteria have been satisfied
and the Shares underlying the Award have been issued to the Holder.
|
9.5
|
Deferred Stock Units. The Administrator is authorized to grant Deferred Stock Units to any Eligible Individual. The
number of Deferred Stock Units shall be determined by the Administrator in its sole discretion and may, but is not required to, be based on one or more Performance Criteria or other specific criteria, including service to the Company or
any Affiliate, as the Administrator determines, in each case on a specified date or dates or over any period or periods determined by the Administrator in its sole discretion. Each Deferred Stock Unit shall entitle the Holder thereof to
receive one Share on the date the Deferred Stock Unit becomes vested or upon a specified settlement date thereafter (which settlement date may, but is not required to, be the date of the Holder’s Termination of Service). Shares
underlying a Deferred Stock Unit award which is subject to a vesting schedule or other conditions or criteria set by the Administrator shall not be issued until on or following the date that those conditions and criteria have been
satisfied. Unless otherwise provided by the Administrator, a Holder of Deferred Stock Units shall have no rights as a Company stockholder with respect
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I 2020 PROXY STATEMENT
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101
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APPENDIX B
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|
|
|
9.6
|
Term. The term of a Performance Award, Dividend Equivalent award, Stock Payment award, Deferred Stock award and/or
Deferred Stock Unit award shall be established by the Administrator in its sole discretion.
|
9.7
|
Purchase Price. The Administrator may establish the purchase price of a Performance Award, Shares distributed as a
Stock Payment award, shares of Deferred Stock or Shares distributed pursuant to a Deferred Stock Unit award; provided, however, that value of the consideration shall not be less than the par value of a Share, unless
otherwise permitted by Applicable Law.
|
9.8
|
Termination of Service. A Performance Award, Dividend Equivalent award, Stock Payment award, Deferred Stock award
and/or Deferred Stock Unit award is distributable only while the Holder is an Employee, Consultant or Director, as applicable. The Administrator, however, in its sole discretion may provide that the Performance Award, Dividend
Equivalent award, Stock Payment award, Deferred Stock award and/or Deferred Stock Unit award may be distributed subsequent to a Termination of Service in certain events, including a Change in Control, the Holder’s death, retirement or
disability or any other specified Termination of Service.
|
10.1
|
Grant of Stock Appreciation Rights.
|
(a)
|
The Administrator is authorized to grant Stock Appreciation Rights to Eligible Individuals from time to time, in its sole
discretion, on such terms and conditions as it may determine, which shall not be inconsistent with the Plan.
|
(b)
|
A Stock Appreciation Right shall entitle the Holder (or other person entitled to exercise the Stock Appreciation Right
pursuant to the Plan) to exercise all or a specified portion of the Stock Appreciation Right (to the extent then exercisable pursuant to its terms) and to receive from the Company an amount determined by multiplying the difference
obtained by subtracting the exercise price per share of the Stock Appreciation Right from the Fair Market Value on the date of exercise of the Stock Appreciation Right by the number of Shares with respect to which the Stock Appreciation
Right shall have been exercised, subject to any limitations the Administrator may impose in its sole discretion. Except as described in (c) below, the exercise price per Share subject to each Stock Appreciation Right shall be set by the
Administrator, but shall not be less than 100% of the Fair Market Value on the date the Stock Appreciation Right is granted.
|
(c)
|
Notwithstanding the foregoing provisions of Section 10.1(b) to the contrary, in the case of a Stock Appreciation Right that
is a Substitute Award, the exercise price per share of the Shares
|
10.2
|
Stock Appreciation Right Vesting.
|
(a)
|
The period during which the right to exercise, in whole or in part, a Stock Appreciation Right vests in the Holder shall be
set by the Administrator and the Administrator may determine that a Stock Appreciation Right may not be exercised in whole or in part for a specified period after it is granted. Such vesting may be based on service with the Company or
any Affiliate, any Performance Criteria, or any other criteria selected by the Administrator. Except as limited by the Plan, at any time after grant of a Stock Appreciation Right, the Administrator may, in its
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APPENDIX B
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|
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(b)
|
No portion of a Stock Appreciation Right which is unexercisable at a Holder’s Termination of Service shall thereafter become
exercisable, except as may be otherwise provided by the Administrator in the applicable Program or the Award Agreement evidencing the grant of the Stock Appreciation Right, in a binding written agreement between the Holder and the
Company entered into on or prior to the date a Stock Appreciation Right is granted, or by action of the Administrator following the grant of the Stock Appreciation Right.
|
10.3
|
Manner of Exercise. All or a portion of an exercisable Stock Appreciation Right shall be deemed exercised upon
delivery of all of the following to the Secretary of the Company, the stock plan administrator of the Company, or such other person or entity designated by the Administrator, or his, her or its office, as applicable:
|
(a)
|
A written or electronic notice complying with the applicable rules established by the Administrator stating that the Stock
Appreciation Right, or a portion thereof, is exercised. The notice shall be signed by the Holder or other person then entitled to exercise the Stock Appreciation Right or such portion of the Stock Appreciation Right;
|
(b)
|
Such representations and documents as the Administrator, in its sole discretion, deems necessary or advisable to effect
compliance with Applicable Law. The Administrator may, in its sole discretion, also take whatever additional actions it deems appropriate to effect such compliance, including, without limitation, placing legends on share certificates
and issuing stop-transfer notices to agents and registrars;
|
(c)
|
In the event that the Stock Appreciation Right shall be exercised pursuant to this Section 10.3 by any person or persons
other than the Holder, appropriate proof of the right of such person or persons to exercise the Stock Appreciation Right, as determined in the sole discretion of the Administrator; and
|
(d)
|
Full payment of the applicable withholding taxes to the stock plan administrator of the Company for the Shares with respect
to which the Stock Appreciation Right, or portion thereof, is exercised, in a manner permitted by Sections 11.1 and 11.2.
|
10.4
|
Stock Appreciation Right Term. The term of each Stock Appreciation Right (the “Stock Appreciation Right Term”)
shall be set by the Administrator in its sole discretion; provided, however, that the Stock Appreciation Right Term shall not be more than ten (10) years from the date the Stock Appreciation Right is granted. The
Administrator shall determine the time period, including the time period following a Termination of Service, during which the Holder has the right to exercise the vested Stock Appreciation Rights, which time period may not extend beyond
the last day of the Stock Appreciation Right Term applicable to such Stock Appreciation Right. Except as limited by the requirements of Section 409A of the Code and regulations and rulings thereunder or the first sentence of this
Section 10.4, the Administrator may extend the Stock Appreciation Right Term of any outstanding Stock Appreciation Right, and may extend the time period during which vested Stock Appreciation Rights may be exercised, in connection with
any Termination of Service of the Holder, and may amend, subject to Section 13.1, any other term or condition of such Stock Appreciation Right relating to such a Termination of Service.
|
10.5
|
Payment. Payment of the amounts payable with respect to Stock Appreciation Rights pursuant to this Article 10 shall be
in cash, Shares (based on its Fair Market Value as of the date the Stock Appreciation Right is exercised), or a combination of both, as determined by the Administrator.
|
10.6
|
Expiration of Stock Appreciation Right Term: Automatic Exercise of In-The-Money Stock Appreciation Rights.
Unless otherwise provided by the Administrator (in an Award Agreement or otherwise) or as otherwise directed by a Stock Appreciation Right Holder in writing to the Company, each vested and exercisable Stock Appreciation Right
outstanding on the Automatic Exercise Date with an exercise price per share that is less than the Fair Market Value per share of Common Stock as of such date shall automatically and without further action by the Stock Appreciation Right
Holder or the Company be exercised on the Automatic Exercise Date. In the sole discretion of the Administrator, the Company or any Affiliate shall deduct or withhold an amount sufficient to satisfy all taxes associated with such
exercise in accordance with Section 11.2. Unless otherwise determined by the Administrator, this Section 10.6 shall not apply to a Stock Appreciation Right if the Stock Appreciation Right Holder incurs a Termination of Service on or
before the Automatic Exercise Date. For the avoidance of doubt, no Stock Appreciation Right with an exercise price per share that is equal to or greater than the Fair Market Value per share of Common Stock on the Automatic Exercise Date
shall be exercised pursuant to this Section 10.6.
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APPENDIX B
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|
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|
11.1
|
Payment. The Administrator shall determine the methods by which payments by any Holder with respect to any Awards
granted under the Plan shall be made, including, without limitation: (a) cash or check, (b) Shares (including, in the case of payment of the exercise price of an Award, Shares issuable pursuant to the exercise of the Award) or Shares
held for such period of time as may be required by the Administrator in its sole discretion in order to avoid adverse accounting consequences, in each case, having a Fair Market Value on the date of delivery equal to the aggregate
payments required, (c) delivery of a written or electronic notice that the Holder has placed a market sell order with a broker acceptable to the Company with respect to Shares then issuable upon exercise or vesting of an Award, and that
the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company in satisfaction of the aggregate payments required; provided that payment of such proceeds is then made to the Company upon
settlement of such sale, or (d) other form of legal consideration acceptable to the Administrator in its sole discretion. The Administrator shall also determine the methods by which Shares shall be delivered or deemed to be delivered to
Holders. Notwithstanding any other provision of the Plan to the contrary, no Holder who is a Director or an “executive officer” of the Company within the meaning of Section 13(k) of the Exchange Act shall be permitted to make payment
with respect to any Awards granted under the Plan, or continue any extension of credit with respect to such payment with a loan from the Company or a loan arranged by the Company in violation of Section 13(k) of the Exchange Act.
|
11.2
|
Tax Withholding. The Company or any Affiliate shall have the authority and the right to deduct or withhold, or require
a Holder to remit to the Company, an amount sufficient to satisfy federal, state, local and foreign taxes (including the Holder’s FICA, employment tax or other social security contribution obligation) required by law to be withheld with
respect to any taxable event concerning a Holder arising as a result of the Plan. The Administrator may, in its sole discretion and in satisfaction of the foregoing requirement, or in satisfaction of such additional withholding
obligation as a Holder may have elected, allow a Holder to satisfy such obligations by any payment means described in Section 11.1 hereof, including, without limitation, by allowing such Holder to elect to have the Company or an
Affiliate withhold
|
11.3
|
Transferability of Awards.
|
(a)
|
Except as otherwise provided in Sections 11.3(b) and 11.3(c):
|
(i)
|
No Award under the Plan may be sold, pledged, assigned or transferred in any manner other than by will or the laws of descent
and distribution or, subject to the consent of the Administrator, pursuant to a DRO, unless and until such Award has been exercised, or the Shares underlying such Award have been issued, and all restrictions applicable to such Shares
have lapsed;
|
(ii)
|
No Award or interest or right therein shall be liable for the debts, contracts or engagements of the Holder or the Holder’s
successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, hypothecation, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of
law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect, except to the extent that such disposition
is permitted by Section 11.3(a)(i); and
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APPENDIX B
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|
|
|
(iii)
|
During the lifetime of the Holder, only the Holder may exercise an Award (or any portion thereof) granted to such Holder
under the Plan, unless, with the Administrator’s consent, it has been disposed of pursuant to a DRO; after the death of the Holder, any exercisable portion of an Award may, prior to the time when such portion becomes unexercisable under
the Plan or the applicable Program or Award Agreement, be exercised by the Holder’s personal representative or by any person empowered to do so under the deceased Holder’s will or under the then-applicable laws of descent and
distribution.
|
(b)
|
Notwithstanding Section 11.3(a), the Administrator, in its sole discretion, may determine to permit a Holder to transfer an
Award other than an Incentive Stock Option to any one or more Permitted Transferees, subject to the following terms and conditions: (i) an Award transferred to a Permitted Transferee shall not be assignable or transferable by the
Permitted Transferee other than by will or the laws of descent and distribution or, with the Administrator’s consent, pursuant to a DRO; (ii) an Award transferred to a Permitted Transferee shall continue to be subject to all the terms
and conditions of the Award as applicable to the original Holder (other than the ability to further transfer the Award); and (iii) the Holder and the Permitted Transferee shall execute any and all documents requested by the
Administrator, including, without limitation documents to (A) confirm the status of the transferee as a Permitted Transferee, (B) satisfy any requirements for an exemption for the transfer under Applicable Law and (C) evidence the
transfer.
|
(c)
|
Notwithstanding Section 11.3(a), a Holder may, in the manner determined by the Administrator in its sole discretion,
designate a beneficiary to exercise the rights of the Holder and to receive any distribution with respect to any Award upon the Holder’s death. A beneficiary, legal guardian, legal representative, or other person claiming any rights
pursuant to the Plan is subject to all terms and conditions of the Plan and any Program or Award Agreement applicable to the Holder, except to the extent the Plan, the Program and the Award Agreement otherwise provide, and to any
additional restrictions deemed necessary or appropriate by the Administrator. If the Holder is married or a domestic partner in a domestic
|
11.4
|
Conditions to Issuance of Shares.
|
(a)
|
Notwithstanding anything herein to the contrary, the Company shall not be required to issue or deliver any certificates or
make any book entries evidencing Shares pursuant to the exercise of any Award, unless and until the Board or the Committee has determined, with advice of counsel, that the issuance of such Shares is in compliance with Applicable Law and
the Shares are covered by an effective registration statement or applicable exemption from registration. The Board or the Committee shall have the right to suspend the exercise or payment of any Option or other Award until, in the
opinion of said counsel, such sale or delivery shall be lawful. In addition to the terms and conditions provided herein, the Board or the Committee may require that a Holder make such reasonable covenants, agreements, and
representations as the Board or the Committee, in its sole discretion, deems advisable in order to comply with Applicable Law.
|
(b)
|
All Share certificates delivered pursuant to the Plan and all Shares issued pursuant to book entry procedures are subject to
any stop-transfer orders and other restrictions as the Administrator deems necessary or advisable to comply with Applicable Law. The Administrator may place legends on any Share certificate or book entry to reference restrictions
applicable to the Shares.
|
(c)
|
The Administrator shall have the right to require any Holder to comply with any timing or other restrictions with respect to
the settlement, distribution or exercise of any Award, including a window-period limitation, as may be imposed in the sole discretion of the Administrator.
|
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I 2020 PROXY STATEMENT
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| |
105
|
APPENDIX B
|
|
|
|
(d)
|
Unless otherwise determined by the Administrator, fractional Shares may be issued pursuant to Awards granted under the Plan.
|
(e)
|
Notwithstanding any other provision of the Plan, unless otherwise determined by the Administrator or required by Applicable
Law, the Company shall not deliver to any Holder certificates evidencing Shares issued in connection with any Award and instead such Shares shall be recorded in the books of the Company (or, as applicable, its transfer agent or stock
plan administrator).
|
11.5
|
Forfeiture and Claw-Back Provisions. Pursuant to its general authority to determine the terms and conditions
applicable to Awards under the Plan, the Administrator shall have the right to provide, in an Award Agreement or otherwise, or to require a Holder to agree by separate written or electronic instrument, that:
|
(a)
|
(i) Any proceeds, gains or other economic benefit actually or constructively received by the Holder upon any receipt or
exercise of the Award, or upon the receipt or resale of any Shares underlying the Award, shall be paid to the Company, and (ii) the Award shall terminate and any unexercised portion of the Award (whether or not vested) shall be
forfeited, if (x) a Termination of Service occurs prior to a specified date, or within a specified time period following receipt or exercise of the Award, or (y) the Holder at any time, or during a specified time period, engages in any
activity in competition with the Company, or which is inimical, contrary or harmful to the interests of the Company, as further defined by the Administrator or (z) the Holder incurs a Termination of Service for “cause” (as such term is
defined in the sole discretion of the Administrator, or as set forth in the applicable Award Agreement or a binding written agreement between the Holder and the Company entered into on or prior to the date an Award is granted); and
|
(b)
|
All Awards (including any proceeds, gains or other economic benefit actually or constructively
|
11.6
|
Prohibition on Repricing. Subject to Section 13.2, the Administrator shall not, without the approval of the
stockholders of the Company, (i) authorize the amendment of any outstanding Option or Stock Appreciation Right to reduce its price per share, or (ii) cancel any Option or Stock Appreciation Right in exchange for cash or another Award
when the Option or Stock Appreciation Right price per share exceeds the Fair Market Value of the underlying Shares. Subject to Section 13.2, the Administrator shall have the authority, without the approval of the stockholders of the
Company, to amend any outstanding Award to increase the price per share or to cancel and replace an Award with the grant of an Award having a price per share that is greater than or equal to the price per share of the original Award.
Furthermore, for purposes of this Section 11.6, except in connection with a corporate transaction involving the Company (including, without limitation, any stock dividend, stock split, extraordinary cash dividend, recapitalization,
reorganization, merger, consolidation, split-up, spin-off, combination or exchange of shares), the terms of outstanding Awards may not be amended to reduce the exercise price per share of outstanding Options or Stock Appreciation Rights
or cancel outstanding Options or Stock Appreciation Rights in exchange for cash, other Awards or Options or Stock Appreciation Rights with an exercise price per share that is less than the exercise price per share of the original
Options or Stock Appreciation Rights without the approval of the stockholders of the Company.
|
12.1
|
Administrator. The Committee (or another committee or a subcommittee of the Board or the Committee assuming the
functions of the Committee under the Plan) shall administer the Plan (except as otherwise
|
106
|
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I 2020 PROXY STATEMENT
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APPENDIX B
|
|
|
|
12.2
|
Duties and Powers of Committee. It shall be the duty of the Committee to conduct the general administration of the
Plan in accordance with its provisions. The Committee in its sole discretion shall have the power to interpret the Plan, Awards granted thereunder, any Program and all Award Agreements, and to adopt such rules for the administration,
interpretation and application of the Plan as are not inconsistent therewith, to interpret, amend or revoke any such rules and to amend any Award, Program or Award Agreement; provided that the rights or obligations of the Holder
of the Award that is the subject of any such Program or Award Agreement are not materially adversely affected by such amendment, unless the consent of the Holder is obtained or such amendment is otherwise permitted under Section 11.5 or
Section 13.10. Any such grant or award under the
|
12.3
|
Action by the Committee. Unless otherwise established by the Board or in any charter of the Committee, a majority of
the Committee shall constitute a quorum and the acts of a majority of the members present at any meeting at which a quorum is present, and acts approved in writing by all members of the Committee in lieu of a meeting, shall be deemed
the acts of the Committee. Each member of the Committee is entitled to, in good faith, rely or act upon any report or other information furnished to that member by any officer or other employee of the Company or any Affiliate, the
Company’s independent certified public accountants, or any executive compensation consultant or other professional retained by the Company to assist in the administration of the Plan.
|
12.4
|
Authority of Administrator. Subject to the Company’s Bylaws, the Committee’s Charter and any specific designation in
the Plan, the Administrator has the exclusive power, authority and sole discretion to:
|
(a)
|
Designate Eligible Individuals to receive Awards;
|
(b)
|
Determine the type or types of Awards to be granted to each Eligible Individual;
|
(c)
|
Determine the number of Awards to be granted and the number of Shares to which an Award will relate;
|
(d)
|
Determine the terms and conditions of any Award granted pursuant to the Plan, including, without limitation, the exercise
price, grant price, or purchase price, any Performance Criteria, any restrictions or limitations on the Award, any
|
|
| |
I 2020 PROXY STATEMENT
|
| |
107
|
APPENDIX B
|
|
|
|
(e)
|
Determine whether, to what extent, and pursuant to what circumstances an Award may be settled in, or the exercise price of an
Award may be paid in cash, Shares, other Awards, or other property, or an Award may be canceled, forfeited, or surrendered;
|
(f)
|
Prescribe the form of each Award Agreement, which need not be identical for each Holder;
|
(g)
|
Decide all other matters that must be determined in connection with an Award;
|
(h)
|
Establish, adopt, or revise any rules and regulations as it may deem necessary or advisable to administer the Plan;
|
(i)
|
Interpret the terms of, and any matter arising pursuant to, the Plan, any Program or any Award Agreement;
|
(j)
|
Make all other decisions and determinations that may be required pursuant to the Plan or as the Administrator deems necessary
or advisable to administer the Plan; and
|
(k)
|
Accelerate wholly or partially the vesting or lapse of restrictions of any Award or portion thereof at any time after the
grant of an Award, subject to
|
12.5
|
Decisions Binding. The Administrator’s interpretation of the Plan, any Awards granted pursuant to the Plan, any
Program, any Award Agreement and all decisions and determinations by the Administrator with respect to the Plan and all Awards granted thereunder are final, binding, and conclusive on all parties.
|
12.6
|
Delegation of Authority. To the extent permitted by Applicable Law, the Board or Committee may from time to time
delegate to a committee of one or more members of the Board or one or more officers of the Company the authority to grant or amend Awards or to take other administrative actions pursuant to Article 12; provided, however,
that in no event shall an officer of the Company be delegated the authority to grant awards to, or amend awards held by, individuals who are subject to Section 16 of the Exchange Act, or officers of the Company (or Directors) to whom
authority to grant or amend Awards has been delegated hereunder; provided, further, that any delegation of administrative authority shall only be permitted to the extent it is permissible under Applicable Law. Any
delegation hereunder shall be subject to the restrictions and limits that the Board or Committee specifies at the time of such delegation, and the Board may at any time rescind the authority so delegated or appoint a new delegatee. At
all times, the delegatee appointed under this Section 12.6 shall serve in such capacity at the pleasure of the Board and the Committee.
|
13.1
|
Amendment, Suspension or Termination of the Plan.
|
(a)
|
Except as otherwise provided in this Section 13.1, the Plan may be wholly or partially amended or otherwise modified,
suspended or terminated at any time or from time to time by the Board or the Committee. However, without approval of the Company’s stockholders given within twelve (12) months before or after the action by the Administrator, no action
of the Administrator may, except as provided in Section 13.2, (i) increase the Share Limit or the Award Limit, (ii) reduce the price per share of any outstanding Option or Stock Appreciation Right granted under the Plan or take any
action prohibited under Section 11.6, or (iii) cancel any
|
(b)
|
No Awards may be granted or awarded during any period of suspension or after termination of the Plan, and, notwithstanding
anything herein to the contrary, in no event may any Award be granted under the Plan after September 19, 2028
|
108
|
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| |
I 2020 PROXY STATEMENT
|
APPENDIX B
|
|
|
|
13.2
|
Changes in Common Stock or Assets of the Company, Acquisition or Liquidation of the Company and Other Corporate
Events.
|
(a)
|
In the event of any other change affecting the shares of the Company’s stock or the share price of the Company’s stock other
than an Equity Restructuring, the Administrator may make equitable adjustments, if any, to reflect such change with respect to (i) the aggregate number and kind of shares that may be issued under the Plan (including, without limitation,
adjustments of the Share Limit and Award Limit); (ii) the number and kind of shares of Common Stock (or other securities or property) subject to outstanding Awards; (iii) the number and kind of Shares (or other securities or property)
for which automatic grants are subsequently to be made to new and continuing Non-Employee Directors pursuant to Section 4.6; (iv) the terms and conditions of any outstanding Awards (including, without limitation, any applicable
performance targets or criteria with respect thereto); and (v) the grant or exercise price per share for any outstanding Awards under the Plan.
|
(b)
|
In the event of any transaction or event described in Section 13.2(a) or any unusual or nonrecurring transactions or events
affecting the Company, any Affiliate of the Company, or the financial statements of the Company or any Affiliate, or of changes in Applicable Law or accounting principles, the Administrator, in its sole discretion, and on such terms and
conditions as it deems appropriate, either by the terms of the Award or by action taken prior to the occurrence of such transaction or event and either automatically or upon the Holder’s request, is hereby authorized to take any one or
more of the following actions whenever the Administrator determines that such action is appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan or with
respect to any Award under the Plan, to facilitate such transactions or events or to give effect to such changes in laws, regulations or principles:
|
(i)
|
To provide for either (A) termination of any such Award in exchange for an amount
|
(ii)
|
To provide that such Award be assumed by the successor or survivor corporation, or a parent or subsidiary thereof, or shall
be substituted for by similar options, rights or awards covering the stock of the successor or survivor corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kind of shares and prices;
|
(iii)
|
To make adjustments in the number and type of Shares (or other securities or property) subject to outstanding Awards, and in
the number and kind of outstanding Restricted Stock or Deferred Stock and/or in the terms and conditions of (including the grant or exercise price), and the criteria included in, outstanding Awards and Awards which may be granted in the
future;
|
(iv)
|
To provide that such Award shall be exercisable or payable or fully vested with respect to all Shares covered thereby,
notwithstanding anything to the contrary in the Plan or the applicable Program or Award Agreement; and
|
(v)
|
To provide that the Award cannot vest, be exercised or become payable after such event.
|
|
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I 2020 PROXY STATEMENT
|
| |
109
|
APPENDIX B
|
|
|
|
(c)
|
In connection with the occurrence of any Equity Restructuring, and notwithstanding anything to the contrary in Sections
13.2(a) and 13.2(b):
|
(i)
|
The number and type of securities subject to each outstanding Award and the exercise price or grant price thereof, if
applicable, shall be equitably adjusted; and/or
|
(ii)
|
The Administrator shall make such equitable adjustments, if any, as the Administrator, in its sole discretion, may deem
appropriate to reflect such Equity Restructuring with respect to the aggregate number and kind of shares that may be issued under the Plan (including, without limitation, adjustments of the Share Limit and Award Limit). The adjustments
provided under this Section 13.2(c) shall be nondiscretionary and shall be final and binding on the affected Holder and the Company.
|
(d)
|
Notwithstanding any other provision of the Plan, in the event of a Change in Control, with respect to each outstanding Award,
unless the Administrator elects to (i) terminate such Award in exchange for cash, rights or property, or (ii) cause such Award to become fully exercisable and no longer subject to any forfeiture restrictions prior to the consummation of
a Change in Control, pursuant to Section 13.2, (A) such outstanding Award (other than any portion subject to performance-based vesting) shall continue in effect, or be assumed or an equivalent Award substituted by the successor
corporation or a parent or subsidiary of the successor corporation, (B) with respect to Awards granted prior to August 19, 2019, the portion of such Award subject to performance-based vesting shall be subject to the terms and conditions
of the applicable Award Agreement or, in the absence of applicable terms and conditions, the Administrator’s discretion and (C) with respect to Awards granted on or after August 19, 2019, the portion of such Award subject to
performance-based vesting (including, without limitation, any Performance Stock Units) shall have any Performance Goals or other performance-based condition deemed to be achieved at the target level of performance and any Performance
Period deemed to have expired, but shall continue to be subject to time-based vesting in accordance with the same time-based vesting schedule that applied to the Award immediately prior to the Change in Control without any performance-
|
(e)
|
In the event that the successor corporation in a Change in Control refuses to assume or substitute for an Award, the
Administrator shall cause any or all of such Awards to (i) terminate in exchange for an amount of cash, rights or other property, pursuant to Section 13.2(b)(i), provided that the purchase of any Awards by the Company is for an amount
equal to the excess Change in Control Price (as defined below) of the shares of Common Stock covered by the Award, over the aggregate exercise price of such Award (if any), and provided further, however, that the termination of an Award
that is subject to performance-based vesting (including, without limitation, any Performance Stock Units) shall have any Performance Goals or other performance-based conditions deemed to be achieved at the target level of performance
and any Performance Period deemed to have expired, or (ii) become fully exercisable immediately prior to the consummation of such transaction and all forfeiture restrictions on any or all of such Awards to lapse. If any such Award is
exercisable, in lieu of assumption or substitution in the event of a Change in Control, the Administrator shall notify the Holder that such Award shall be fully exercisable for a period of fifteen (15) days from the date of such notice,
contingent upon the occurrence of the Change in Control, and such Award shall terminate upon the expiration of such period. “Change in Control Price” shall mean the highest price per share of Common Stock paid in any transaction related
to a Change in Control of the Company.
|
(f)
|
For the purposes of this Section 13.2, an Award shall be considered assumed if, following the
|
110
|
| |
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I 2020 PROXY STATEMENT
|
APPENDIX B
|
|
|
|
(g)
|
The Administrator may, in its sole discretion, include such further provisions and limitations in any Award, agreement or
certificate, as it may deem equitable and in the best interests of the Company that are not inconsistent with the provisions of the Plan.
|
(h)
|
It is intended that no adjustment or action described in this Section 13.2 or in any other provision of the Plan shall be
authorized to the extent that such adjustment or action would cause the Plan to violate Section 422(b)(1) of the Code. Furthermore, it is intended that no such adjustment or action shall be authorized to the extent such adjustment or
action would result in short-swing profits liability under Section 16 or violate the exemptive conditions of Rule 16b-3 unless the Administrator determines that the Award is not to comply with such exemptive conditions.
|
(i)
|
The existence of the Plan, the Program, the Award Agreement and the Awards granted hereunder shall not affect or restrict in
any way the right or power of the Company or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company’s capital structure or its business, any merger or
consolidation of the Company, any issue of stock or of options, warrants or rights to purchase stock or of bonds, debentures, preferred or prior preference stocks whose rights are superior to or
|
(j)
|
It is intended that no action shall be taken under this Section 13.2 which shall cause an Award to fail to be exempt from or
comply with Section 409A of the Code or the Treasury Regulations thereunder.
|
(k)
|
In the event of any pending stock dividend, stock split, combination or exchange of shares, merger, consolidation or other
distribution (other than normal cash dividends) of Company assets to stockholders, or any other change affecting Shares or the share price of the Common Stock, including any Equity Restructuring, for reasons of administrative
convenience, the Company, in its sole discretion, may refuse to permit the exercise of any Award during a period of up to thirty (30) days prior to the consummation of any such transaction.
|
13.3
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Approval of Plan by Stockholders. The Plan was approved by the Company’s stockholders on [_____], 2020. Awards may be
granted or awarded under the Plan after Board approval, but prior to such stockholder approval; provided that Awards granted after Board approval, but prior to such stockholder approval that provide for the grant of Shares in
excess of the Share Limit shall not be exercisable, shall not vest and the restrictions thereon shall not lapse and no Shares shall be issued pursuant thereto prior to the time when this Plan is approved by the stockholders; and provided,
further, that if such stockholder approval has not been obtained at the end of said twelve (12) month period, (a) the Plan will not become effective and (b) all Awards previously granted or awarded under the Plan after Board
approval shall thereupon be canceled and become null and void.
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13.4
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No Stockholders Rights. Except as otherwise provided herein, a Holder shall have none of the rights of a stockholder
with respect to shares of Common Stock covered by any Award until the Holder becomes the record owner of such shares of Common Stock.
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13.5
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Paperless Administration. The Company uses the services of a third-party that provides an electronic system for the
documentation, granting, exercise and settlement of Awards. Notwithstanding anything in the Plan to the contrary, any Award Agreement, notice of exercise of a Stock Option or Stock Appreciation
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I 2020 PROXY STATEMENT
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111
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APPENDIX B
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13.6
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Effect of Plan upon Other Compensation Plans. The adoption of the Plan shall not affect any other compensation or
incentive plans in effect for the Company or any Affiliate, including, without limitation, the Prior Plans. Nothing in the Plan shall be construed to limit the right of the Company or any Affiliate: (a) to establish any other forms of
incentives or compensation for Employees, Consultants or Directors of the Company or any Affiliate, or (b) to grant or assume options or other rights or awards otherwise than under the Plan in connection with any proper corporate
purpose including, without limitation, the grant or assumption of options in connection with the acquisition by purchase, lease, merger, consolidation or otherwise, of the business, stock or assets of any corporation, partnership,
limited liability company, firm or association.
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13.7
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Compliance with Laws. The Plan, the granting and vesting of Awards under the Plan and the issuance and delivery of
Shares and the payment of money under the Plan or under Awards granted or awarded hereunder are subject to compliance with all Applicable Law (including, without limitation, to state, federal and foreign securities law and margin
requirements), and to such approvals by any listing, regulatory or governmental authority as may, in the opinion of counsel for the Company, be necessary or advisable in connection therewith. Any securities delivered under the Plan
shall be subject to such restrictions, and the person acquiring such securities shall, if requested by the Company, provide such assurances and representations to the Company as the Company may deem necessary or desirable to assure
compliance with all Applicable Law. To the extent permitted by Applicable Law, the Plan and Awards granted or awarded hereunder shall be deemed amended to the extent necessary to conform to such Applicable Law.
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13.8
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Titles and Headings, References to Sections of the Code or Exchange Act. The titles and headings of the
Sections in the Plan are for convenience of reference only and, in the event of any conflict, the text of the Plan, rather than such titles or headings, shall control. References to sections of the Code or the Exchange Act shall include
any amendment or successor thereto.
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13.9
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Governing Law. The Plan shall be governed by the General Corporation Law of the State of Maryland with respect to
matters regarding or affecting the
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13.10
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Section 409A. The Company does not guarantee the particular tax treatment of any Award granted under the Plan, and the
Company makes no guarantee that any Award granted under the Plan will comply with or be exempt from Section 409A of the Code. To the extent that the Administrator determines that any Award granted under the Plan is subject to Section
409A of the Code, the Program pursuant to which such Award is granted and the Award Agreement evidencing such Award shall incorporate the terms and conditions required by Section 409A of the Code. To the extent applicable, the Plan, the
Program and any Award Agreements shall be interpreted in accordance with Section 409A of the Code and Department of Treasury regulations and other interpretive guidance issued thereunder, including, without limitation, any such
regulations or other guidance that may be issued after the Effective Date. Notwithstanding any provision of the Plan to the contrary, in the event that following the Effective Date the Administrator determines that any Award may be
subject to Section 409A of the Code and related Department of Treasury guidance (including such Department of Treasury guidance as may be issued after the Effective Date), the Administrator may adopt such amendments to the Plan and the
applicable Program and Award Agreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Administrator determines are necessary or
appropriate to (a) exempt the Award from Section 409A of the Code and/or preserve the intended tax treatment of the benefits provided with respect to the Award, or (b) comply with the requirements of Section 409A of the Code and related
Department of Treasury guidance and thereby avoid the application of any penalty taxes under such Section.
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13.11
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No Rights to Awards. No Eligible Individual or other person shall have any claim to be granted any Award pursuant to
the Plan or to receive an Award in subsequent years, and neither the Company nor the Administrator is obligated to treat Eligible Individuals, Holders or any other persons uniformly.
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13.12
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Unfunded Status of Awards. The Plan is intended to be an “unfunded” plan for incentive compensation. With respect to
any payments not yet made to a Holder
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112
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I 2020 PROXY STATEMENT
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APPENDIX B
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13.13
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Indemnification. To the extent allowable pursuant to Applicable Law, each member of the Committee or of the Board
shall be indemnified and held harmless by the Company from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by such member in connection with or resulting from any claim, action, suit, or proceeding
to which he or she may be a party or in which he or she may be involved by reason of any action or failure to act pursuant to the Plan and against and from any and all amounts paid by him or her in satisfaction of judgment in such
action, suit, or proceeding against him or her; provided he or she gives the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf.
The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled pursuant to the Company’s Certificate of Incorporation or Bylaws, as a matter of law, or
otherwise, or any power that the Company may have to indemnify them or hold them harmless.
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13.14
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Relationship to other Benefits. No payment pursuant to the Plan shall be taken into account in determining any
benefits under any pension, retirement, savings, profit sharing, group insurance, welfare or other benefit plan of the Company or any Affiliate except to the extent otherwise expressly provided in writing in such other plan or an
agreement thereunder.
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13.15
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Expenses. The expenses of administering the Plan shall be borne by the Company and its Subsidiaries.
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13.16
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Successor and Assigns. The Plan shall be binding on all successors and permitted assigns of a Holder, including,
without limitation, the estate of such Holder and the executor, administrator or trustee of such estate.
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13.17
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Severability of Provisions. If any provision of the Plan shall be held invalid or unenforceable, such invalidity or
unenforceability shall not affect any other provisions hereof, and the Plan shall be construed and enforced as if such provisions had not been included.
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13.18
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Payments to Minors, Etc. Any benefit payable to or for the benefit of a minor, an incompetent person or other person
incapable of receipt thereof shall be deemed paid when paid to such person’s guardian or to the party providing or reasonably appearing to provide for the care of such person, and such payment shall fully discharge the Committee, the
Board, the Company, its Affiliates and their employees, agents and representatives with respect thereto.
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/s/ David E. Howard
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Senior Vice President, General
Counsel and Secretary
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I 2020 PROXY STATEMENT
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113
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