{"id":40247,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/performance-based-annual-incentive-plan-coach-inc.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"performance-based-annual-incentive-plan-coach-inc","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/performance-based-annual-incentive-plan-coach-inc.html","title":{"rendered":"Performance-Based Annual Incentive Plan – Coach Inc."},"content":{"rendered":"
COACH, INC.
\nPERFORMANCE-BASED ANNUAL INCENTIVE PLAN<\/b>\n<\/font>\n\n<\/p>
ARTICLE I \u0097 PURPOSE OF THE PLAN<\/b>\n<\/font>\n\n<\/p>
         The purpose of the Coach, Inc. Performance-Based Annual Incentive Plan is\nto advance the interests of Coach, Inc. and its stockholders by providing\ncertain of its key executives with annual incentive compensation which is tied\nto the achievement of pre-established and objective performance goals. The\nPlan is intended to provide participants with annual incentive compensation\nwhich is not subject to the deduction limitation rules prescribed under Section\n162(m) of the Internal Revenue Code of 1986, as amended (the \u0093Code\u0094), and\nshould be construed to the extent possible as providing for remuneration which\nis \u0093performance-based compensation\u0094 within the meaning of Section 162(m) of the\nCode and the regulations promulgated thereunder.\n\n<\/font>\n<\/p>
ARTICLE II \u0097 DEFINITIONS<\/b>\n<\/font>\n\n<\/p>
         Unless the context clearly indicates otherwise, the following terms shall\nhave the following meanings:\n<\/font>\n<\/p>
         a.     \u0093Board\u0094<\/b> means the Board of Directors of Coach, Inc.\n<\/font>\n<\/p>
         b.     \u0093Committee\u0094<\/b> means the Compensation and Employee Benefits Committee of\nthe Board of Directors, a subcommittee thereof, or such other committee as may\nbe appointed by the Board of Directors. The Committee shall be comprised of\ntwo (2) or more non-employee members of the Board of Directors who shall\nqualify to administer the Plan as \u0093disinterested directors\u0094 under Rule 16b-3 of\nthe Securities Exchange Act of 1934, as amended, and as \u0093outside directors\u0094\nunder Section 162(m) of the Code.\n\n<\/font>\n<\/p>
         c.     \u0093Corporation\u0094<\/b> means Coach, Inc., or any entity that is directly or\nindirectly controlled by Coach, Inc.\n<\/font>\n<\/p>
         d.     \u0093Plan\u0094<\/b> means the Coach, Inc. Performance-Based Annual Incentive Plan,\nas may be amended and restated from time to time.\n<\/font>\n<\/p>
         e.     \u0093Participant\u0094 <\/b>means (i) a \u0093covered employee\u0094 as defined in Section\n162(m) of the Code and the regulations promulgated thereunder, who has been\nselected by the Committee as a participant in the Plan during a Performance\nPeriod and (ii) each other employee who has been selected by the Committee as a\nparticipant in the Plan during a Performance Period.\n<\/font>\n<\/p>
         f.     \u0093Performance Award\u0094<\/b> means an award granted pursuant to the terms of\nArticle IV of this Plan.\n<\/font>\n<\/p>
         g.     \u0093Performance Goal\u0094 <\/b>means the performance goal and payout schedules\nestablished by the Committee for a Participant (or group of Participants) no\nlater than ninety (90)\n<\/font>\n<\/p>
 <\/font>\n<\/p>
<\/p>
\n\n\n<\/p>
 days after the commencement of each Performance Period which relates to\none or more of the following performance measures of the Corporation and\/or its\naffiliates: cash flow, net income, pre-tax income, net revenue, EBITDA,\noperating income, diluted earnings per share, earnings per share, gross margin,\nreturn on sales, return on equity, return on investment, cost reductions or\nsavings, funds from operations, and\/or appreciation in the fair market value of\nthe Corporation\u0092s stock.\n<\/font>\n<\/p>
         h.     \u0093Performance Period\u0094 <\/b>means the Corporation\u0092s fiscal year, or such other\nperiod as designated by the Committee.\n<\/font>\n<\/p>
ARTICLE III \u0097 PLAN ADMINISTRATION<\/b>\n<\/font>\n\n<\/p>
         The Committee shall have full discretion, power and authority to\nadminister and interpret the Plan and to establish rules and procedures for its\nadministration as the Committee deems necessary and appropriate. Any\ninterpretation of the Plan or other act of the Committee in administering the\nPlan shall be final and binding on all Participants.\n<\/font>\n<\/p>
ARTICLE IV \u0097 PERFORMANCE AWARDS<\/b>\n<\/font>\n\n<\/p>
         For each Performance Period, the Committee shall determine the amount of a\nParticipant\u0092s Performance Award as follows:\n<\/font>\n<\/p>
         a.     General <\/b>- Each Participant shall be eligible to receive a Performance\nAward if the Participant\u0092s Performance Goal for the Performance Period has been\nachieved. The maximum amount of a Participant\u0092s Performance Award, expressed\nas a percentage of base salary, shall be set by the Committee prior to each\nPerformance Period; provided, however, that in no event shall a Participant\u0092s\nPerformance Award exceed two million dollars ($2,000,000). The actual amount\nof a Participant\u0092s Performance Award may be reduced or eliminated by the\nCommittee as set forth in paragraph (b) below.\n<\/font>\n<\/p>
         b.     Reduction or Elimination of Performance Award <\/b>- The Performance Award\nfor each Participant may be reduced or eliminated by the Committee in its sole\ndiscretion; provided, however, that under no circumstances may the amount of\nany Performance Award to any Participant be increased. In determining whether\na Performance Award will be reduced or eliminated, the Committee shall consider\nany extraordinary changes which may occur during the Performance Period, such\nas changes in accounting practices or applicable law, extraordinary items of\ngain or loss, discontinued operations, restructuring costs, sales or\ndispositions of assets and acquisitions, and shall consider such individual or\nbusiness performance criteria that it deems appropriate, including, but not\nlimited to, the Corporation\u0092s cash flow, net income, pre-tax income, net\nrevenue, EBITDA, operating income, diluted earnings per share, earnings per\nshare, gross margin, return on sales, return on equity, return on investment,\ncost reductions or savings, funds from operations, appreciation in the fair\nmarket value of the Corporation\u0092s stock, and other relevant operating and\nstrategic business results applicable to an individual Participant. Once the\nCommittee has determined the amount of a Participant\u0092s Performance award\npursuant this\n<\/font>\n<\/p>
-2-<\/font>\n<\/p>
<\/p>
\n\n\n<\/p>
 Article IV, and upon the certification required under Article V, the\nCommittee shall grant the Participant\u0092s Performance Award pursuant to such\nterms and procedures as the Committee shall adopt under Article III.\n<\/font>\n<\/p>
ARTICLE V \u0097 PAYMENT OF PERFORMANCE AWARDS<\/b>\n<\/font>\n\n<\/p>
         Subject to any stockholder approval required by law, payment of any\nPerformance Award to a Participant for any Performance Period shall be made in\ncash after written certification by the Committee that the Performance Goal for\nthe Performance Period was achieved, and any other material terms of the\nPerformance Award were satisfied. Any Performance Award may be deferred\npursuant to the terms and conditions of the Coach, Inc. Executive Deferred\nCompensation Plan or a successor thereto.\n<\/font>\n<\/p>
ARTICLE VI \u0097 PLAN AMENDMENT AND TERMINATION<\/b>\n<\/font>\n\n<\/p>
         The Committee may amend or terminate the Plan by resolution at any time as\nit shall deem advisable, subject to any stockholder approval required by law,\nprovided that the Committee may not amend the Plan to change the method for\ndetermining Performance Awards or the individual award limit under Article IV\nwithout the approval of the majority of votes cast by stockholders in a\nseparate vote. No amendment may impair the rights of a Participant to any\nPerformance Award already granted with respect to any Performance Period.\n<\/font>\n<\/p>
ARTICLE VII \u0097 MISCELLANEOUS PROVISIONS<\/b>\n<\/font>\n\n<\/p>
         a.     Employment Rights <\/b>- The Plan does not constitute a contract of\nemployment and participation in the Plan will not give a Participant the right\nto continue in the employ of the Corporation on a full-time, part-time, or any\nother basis. Participation in the Plan will not give any Participant any right\nor claim to any benefit under the Plan, unless such right or claim has\nspecifically been granted by the Committee under the terms of the Plan.\n<\/font>\n<\/p>
         b.     Committee\u0092s Decision Final <\/b>- Any interpretation of the Plan and any\ndecision on any matter pertaining to the Plan which is made by the Committee in\nits discretion in good faith shall be binding on all persons.\n<\/font>\n<\/p>
         c.     Gender and Number <\/b>- Where the context permits, words in the masculine\ngender shall include the feminine and neuter genders, the plural form of a word\nshall include the singular form, and the singular form of a word shall include\nthe plural form.\n<\/font>\n<\/p>
         d. Governing Law <\/b>- Except to the extent superseded by the laws of the\nUnited States, the laws of the State of New York, without regard to its\nconflict of laws principles, shall govern in all matters relating to the Plan.\n<\/font>\n<\/p>
-3-<\/font>\n<\/p>
<\/p>
\n<\/p>
         e.     Interests Not Transferable <\/b>- Any interests of Participants under the\nPlan may not be voluntarily sold, transferred, alienated, assigned or\nencumbered, other than by will or pursuant to the laws of descent and\ndistribution.\n<\/font>\n<\/p>
         f.     Severability <\/b>- In the event any provision of the Plan shall be held to\nbe illegal or invalid for any reason, such illegality or invalidity shall not\naffect the remaining parts of the Plan, and the Plan shall be construed and\nenforced as if such illegal or invalid provisions had never been contained in\nthe Plan.\n<\/font>\n<\/p>
         g.     Withholding <\/b>- The Corporation will withhold from any amounts payable\nunder this Plan all federal, state, foreign, city and local taxes as shall be\nlegally required.\n<\/font>\n<\/p>
         h.     Effect on Other Plans or Agreements <\/b>- Payments or benefits provided to\na Participant under any stock, deferred compensation, savings, retirement or\nother employee benefit plan are governed solely by the terms of such plan.\n<\/font>\n<\/p>
ARTICLE VIII \u0097 EFFECTIVE DATE<\/b>\n<\/font>\n\n<\/p>
         This Plan is effective as of June 29, 2000, as approved by Sara Lee\nCorporation as the sole shareholder of the Corporation. The Plan shall\nautomatically terminate as of the first meeting of shareholders on and after\nthe first anniversary of the date on which the Corporation first issues equity\nsecurities of the Corporation that are required to be registered under Article\nII of the Securities Exchange Act of 1934, as amended, unless resubmitted to\nand approved by shareholders on or prior to that date.\n<\/font>\n<\/p>
* * *\n<\/font>\n\n<\/p>
         IN WITNESS WHEREOF, pursuant to resolutions of its Board of Directors\ndated August 9, 2001, Coach, Inc. has caused this Plan document to be signed by\nits duly authorized officer this ninth day of August, 2001.\n<\/font>\n<\/p>
\n<\/p><\/pre>\n\n\n
 <\/font><\/td>\nCOACH, INC.<\/font><\/td>\n<\/tr>\n<\/table>\n\n\n
 <\/font><\/td>\nBy:                                                   <\/u><\/font><\/td>\n<\/tr>\n<\/table>\n
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