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EX-10.1 - FOOT LOCKER INCc60830_ex10-1.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

_____________________

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 23, 2010

Foot Locker, Inc.
(Exact Name of Registrant as Specified in its Charter)

New York   1-10299   13-3513936
(State or other Jurisdiction   (Commission File Number)   (I.R.S. Employer
of Incorporation)       Identification No.)
         
112 West 34th Street, New York, New York   10120
(Address of Principal Executive Offices)   (Zip Code)
     
                   Registrant's telephone number, including area code: 212-720-3700
 
Former Name/Address
(Former name or former address, if changed from last report)
 
_____________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
[   ]   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
     
[   ]   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
     
[   ]   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
     
[   ]   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
     


Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
 
  (e) (1) Bonus Waiver Letter.

On March 23, 2010, Ken C. Hicks, Chairman of the Board, President and Chief Executive Officer of Foot Locker, Inc. (the “Company”), and the Company signed a letter (the “March 23, 2010 Letter”) confirming Mr. Hicks’ election to irrevocably waive his entitlement to the cash annual bonus for the Company’s 2009 fiscal year referred to in Section 4(b) of Mr. Hicks’ employment agreement dated June 25, 2009 (the “Employment Agreement”). Except with regard to Mr. Hicks’ waiver of such bonus under his Employment Agreement, the terms of Mr. Hicks’ Employment Agreement remain in full force and effect. A copy of the March 23, 2010 Letter is attached hereto as Exhibit 10.1, and the description herein of such letter is qualified in its entirety by reference to the March 23, 2010 Letter.

(2) Establishment of Performance Goals.

(i) On March 23, 2010, the Compensation and Management Resources Committee (the “Compensation Committee”) of the Board of Directors of the Company established the performance goals for the 2010 fiscal year under the Annual Bonus Plan. The goals for the executives are based on the Company’s pre-tax income. Under the Annual Bonus Plan, the amount that would be paid to the executives if the performance goals are met is based on a percentage of their annual base salaries earned for the plan year. The percentage of annual base salary payable at threshold, target, and maximum for each of the executives included as named executive officers in the Company’s 2010 proxy statement is stated in the table below:

   Name   Percent of Annual   Percent of Annual   Percent of Annual
    Base Salary at   Base Salary at   Base Salary at
    Threshold Payout   Target Payout   Maximum Payout
   Ken C. Hicks   31.25%   125%   218.75%
   Robert W. McHugh   12.5%   50%   87.5%
   Ronald J. Halls   12.5%   50%   87.5%
   Richard A. Johnson   12.5%   50%   87.5%
   Gary M. Bahler   12.5%   50%   87.5%

(ii) On March 23, 2010, the Compensation Committee established long-term incentive compensation performance goals for the 2010-2011 performance period based on a combination of the Company’s two-year average after-tax income and return-on-invested capital. Provided the performance goals are achieved, the payout structure of the executives’ long-term awards is as follows: (a) 50 percent of the award would be payable in cash under the Long-Term Incentive Compensation Plan, (b) 50 percent of the award would be payable


in restricted stock units under the 2007 Stock Incentive Plan, subject to shareholder approval of an amendment and restatement of such plan at the 2010 annual meeting of shareholders, and (c) both the cash portion and the restricted stock unit portion of the payout would be subject to a time-based, one-year holding period following the end of the performance period before payout to the executives.

     Individual long-term target awards are expressed as a percentage of the rate of the executive’s annual base salary in the first year of the performance period. The percentages shown in the table below represent the percent of 2010 annual base salary rates that would be paid to each of the named executive officers, in cash and restricted stock units as described in the foregoing paragraph, only if the established goals are achieved.

Name   Performance   Percent of   Percent of   Percent of Annual
    Period   Annual Base   Annual Base   Base Salary at
        Salary at   Salary at   Maximum Payout
        Threshold   Target    
        Payout   Payout    
   Ken C. Hicks   2010-2011   43.75%   175%   350%
   Robert W. McHugh   2010-2011   18.75%   75%   150%
   Ronald J. Halls   2010-2011   18.75%   75%   150%
   Richard A. Johnson   2010-2011   18.75%   75%   150%
   Gary M. Bahler   2010-2011   18.75%   75%   150%

The threshold, target, and maximum number of restricted stock units for each executive was calculated on March 23, 2010 on the basis of that day’s closing stock price. The actual number of restricted stock units awarded will be based on the Company’s performance compared to targets. The value of the restricted stock units received by an executive will depend upon the Company’s stock price on the payment date.

(3) Stock Option Awards. On March 23, 2010, the Compensation Committee granted nonstatutory stock options to the following named executive officers under the 2007 Stock Incentive Plan. The options will vest in three equal installments, on March 23, 2011, March 23, 2012, and March 23, 2013. The options were granted at an exercise price of $15.10 per share, which was 100 percent of the fair market value (closing price) of a share of the Company’s Common Stock on the date of grant.

   Name   Number of Shares
   Ken C. Hicks   300,000
   Robert W. McHugh   80,000
   Ronald J. Halls   80,000
   Richard A. Johnson   80,000
   Gary M. Bahler   40,000

(4) Annual Base Salaries. On March 23, 2010, the Compensation Committee approved the annual base salaries, effective as of May 1, 2010, of the following executive officers of the Company who will be included as Named Executive Officers in the Company’s 2010 proxy statement. As the Company’s salary increases generally become effective on May 1 of each year, the annual base salary rate shown in the table may be higher than the actual salary earned by the executive for the year. The actual salary earned for the year is the amount that will be reflected in the Summary Compensation Table in the Company’s proxy statement for the relevant year:

  Name and Position     Year     Base Salary
    Ken C. Hicks   2010   $1,100,000  
           Chairman of the Board, President          
           and Chief Executive Officer          
  Robert W. McHugh   2010   $ 600,000  
           Executive Vice President and          
           Chief Financial Officer          
  Ronald J. Halls   2010   772,500  
           President and Chief Executive          
           Officer – Foot Locker, Inc. -          
           International          
  Richard A. Johnson   2010   700,000  
           President and Chief Executive          
           Officer – Foot Locker U.S./Lady          
           Foot Locker/Kids Foot Locker/          
           Footaction          
  Gary M. Bahler   2010   533,000  
           Senior Vice President, General          
           Counsel and Secretary          

Item 9.01. Financial Statements and Exhibits

(c)     

Exhibits

 
 

10.1 Ken C. Hicks bonus waiver letter signed on March 23, 2010

 

SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

    FOOT LOCKER, INC.
    (Registrant)
 
Date: March 29, 2010   By: /s/ Gary M. Bahler
         Senior Vice President, General Counsel and
         Secretary