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EXCEL - IDEA: XBRL DOCUMENT - RALPH LAUREN CORP | Financial_Report.xls |
10-Q - FORM 10-Q - RALPH LAUREN CORP | y85876e10vq.htm |
EX-32.1 - EX-32.1 - RALPH LAUREN CORP | y85876exv32w1.htm |
EX-10.5 - EX-10.5 - RALPH LAUREN CORP | y85876exv10w5.htm |
EX-32.2 - EX-32.2 - RALPH LAUREN CORP | y85876exv32w2.htm |
EX-31.2 - EX-31.2 - RALPH LAUREN CORP | y85876exv31w2.htm |
EX-10.3 - EX-10.3 - RALPH LAUREN CORP | y85876exv10w3.htm |
EX-31.1 - EX-31.1 - RALPH LAUREN CORP | y85876exv31w1.htm |
EX-10.4 - EX-10.4 - RALPH LAUREN CORP | y85876exv10w4.htm |
EX-10.1 - EX-10.1 - RALPH LAUREN CORP | y85876exv10w1.htm |
EXHIBIT 10.2
THIS
DOCUMENT CONSTITUTES PART OF A PROSPECTUS
COVERING SECURITIES THAT HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED
COVERING SECURITIES THAT HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED
Pro-Rata Restricted
Performance Share Unit Award
Fiscal 2011
Overview
July 16, 2010
THIS OVERVIEW IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
THE MEMORANDUM TO PARTICIPANTS IN THE POLO RALPH LAUREN
CORPORATION 1997 LONG-TERM STOCK INCENTIVE PLAN AND TO THE PLAN
ITSELF. COPIES OF THE MEMORANDUM AND THE PLAN ARE AVAILABLE FROM
YOUR HUMAN RESOURCES DEPARTMENT.
OVERVIEW
The Polo Ralph Lauren Corporation (the Company) 1997
Long-Term Stock Incentive Plan (the Plan) authorizes
the Compensation & Organizational Development
Committee of the Board of Directors (the Compensation
Committee) to grant equity awards to officers and other
employees of the Company and its Subsidiaries and Affiliates.
As determined by the Compensation Committee, the Company may
grant one or more types of Restricted Performance Share Unit
awards (RPSUs). This Overview describes one type of RPSU that
has three-year, pro-rata vesting (Pro-Rata RPSU).
A Pro-Rata RPSU award provides the participant with the
opportunity to receive shares of the Companys Class A
Common Stock (traded on the New York Stock Exchange under the
symbol RL) at a later date based on achievement of performance
goals and continued service.
AWARD
OBJECTIVES
Objectives of RPSUs are to:
1. Motivate achievement of performance goals by linking
equity-based compensation to Company results
2. Attract and retain individuals of superior talent
3. Enable individuals to participate in the long-term
growth and financial success of the Company
PLAN
ADMINISTRATION
The Companys Human Resources Department administers the
program and Merrill Lynch is the recordkeeper. Participants
must have an open brokerage account at Merrill Lynch in order to
facilitate distribution of shares of the Companys
Class A Common Stock upon the vesting of Pro-Rata
RPSUs. To open a brokerage account, or for questions
regarding your account and account transactions, please contact
Merrill Lynch at
(609) 818-8908
or (877) 765-POLO (7656).
The Companys Board of Directors reserves the right to
amend, modify or terminate the Plan at any time. No such
amendment to the Plan would adversely affect any Pro-Rata RPSU
awards then outstanding.
Nothing contained herein may be construed as creating a promise
of future benefits or a binding contract with the Company.
Further, an individuals employment continues to be at will.
For questions regarding the Plan and its provisions, please
contact Human Resources.
ELIGIBILITY
FOR GRANT
Equity awards, including Pro-Rata RPSU awards, may be granted
annually to designated, key executives who have a significant
impact on the strategic direction and business results of the
Company, and who are actively employed on April 1 of the year
when the grant is made.
Guidelines have been established for the number and type of
equity awards that eligible participants may receive. The
guidelines reflect a positions scope, accountability and
impact on the organization, and may also reflect changes in the
value of the Companys Class A Common Stock.
Please note that the guidelines do not constitute a guarantee
that any specific individual will receive an equity award in any
given year, or guarantee the type or the size of any grant, if a
grant is made.
2
An
eligible employee who receives a Below Expectations (B) or
Unsatisfactory (U) rating on his or
her annual performance appraisal is not eligible for an equity award in the fiscal year following
that performance appraisal period.
her annual performance appraisal is not eligible for an equity award in the fiscal year following
that performance appraisal period.
VALUE OF
RESTRICTED PERFORMANCE SHARE UNITS
If Threshold or better performance against the fiscal year goal
is achieved, Pro-Rata RPSUs can provide participants with
ownership of the Companys Class A Common Stock and
offer the opportunity to recognize value in the following ways:
| Receive shares of the Companys Class A Common Stock without paying any exercise price | |
| Any increases in the Companys Class A Common Stock price above the price on the grant date increases the value of the award |
The example on the following page illustrates the opportunity
for gains in the Companys Class A Common Stock price
at different share prices.
EXAMPLE:
POTENTIAL VALUE
Award of 300 Pro-Rata RPSUs
Award of 300 Pro-Rata RPSUs
Grant Price | If Stock Price Reaches: | |||||||||||||||||||||||
# of Shares | $75 | $85 | $90 | $95 | $100 | |||||||||||||||||||
Value (assumes shares vest)
|
300 | $ | 22,500 | $ | 25,500 | $ | 27,000 | $ | 28,500 | $ | 30,000 |
Note: |
Value is before tax and a portion of the shares would be
withheld in satisfaction of withholding taxes Example is hypothetical and is not a forecast of growth in the Companys Class A Common Stock price |
GRANT
AMOUNT AND AWARD VESTING
The number of units in a Pro-Rata RPSU award is set as of the
grant date. The award will vest in equal, annual installments
(tranches) over a three-year period. One third of the Pro-Rata
RPSUs granted in fiscal 2011 will vest each year after the end
of fiscal 2011, fiscal 2012 and fiscal 2013, subject to
achievement of the applicable Company performance goal in the
first year and the participant having continuous service through
each vesting date (see examples on page 6).
PERFORMANCE
MEASURES FOR RPSU VESTING
The Companys performance measure(s) are established by the
Compensation Committee at the time of the grant from a list of
performance criteria set forth in the Plan. Such measure(s) may
include, for example, one or more of the following:
| Net Earnings or Net Income (before or after taxes) | |
| Basic or Diluted Earnings Per Share | |
| Net Operating Profit | |
| Net Revenue or Net Revenue Growth | |
| Gross Profit or Gross Profit Growth | |
| Return on Assets | |
| Other measures of economic value added or other value creation metrics |
Once a Pro-Rata RPSU award is granted, the performance
measure(s), vesting and payout schedule will not be modified
during the term for that particular award. The Compensation
Committee may only change the performance measure(s) and
associated goals, and the vesting and payout schedule for any
future Pro-Rata RPSU awards
3
not yet granted. In calculating performance against the goal for
any fiscal year, the Companys results may be adjusted to
exclude effects of certain events and transactions as specified
by the Compensation Committee at the time of grant.
Fiscal
2011 Grant Performance Measure and Performance Level for
Vesting
The performance measure for fiscal 2011 Pro-Rata RPSU awards is
Corporate Net Income Before Tax (NIBT). This performance measure
is also used for bonus awards under the Executive Incentive Plan
(EIP).
The performance level that must be achieved for Pro-Rata RPSU
vesting is NIBT at Threshold (80% of Target) or
better and is communicated in your on-line Total Rewards
Statement.
FISCAL
2011 VESTING SCHEDULE
All three tranches of the fiscal 2011 Pro-Rata RPSUs are deemed
earned and available for vesting based on achievement of the
fiscal 2011 performance goal as follows:
| One-third would vest and be paid out after the end of fiscal 2011 based on achievement of the fiscal 2011 Company performance goal and on the participants continuous service with the Company from the grant date to the vesting date | |
| One-third would vest and be paid out after the end of fiscal 2012 (participant must have continuous service with the Company from the grant date to the vesting date) | |
| One-third would vest and be paid out after the end of fiscal 2013 (participant must have continuous service with the Company from the grant date to the vesting date) |
All three
tranches of the fiscal 2011 Pro-Rata RPSU award will be
forfeited if the fiscal 2011
performance goal (Corporate NIBT at Threshold or better) is not achieved.
performance goal (Corporate NIBT at Threshold or better) is not achieved.
Vesting of the Pro-Rata RPSUs and the distribution of the
Companys Class A Common Stock will occur as soon as
administratively practical following certification of
achievement of the Companys performance goals by the
Compensation Committee. The vesting date typically occurs in
June of each year, but may be earlier or later. Once the
Pro-Rata RPSUs are vested and distributed as Company
Class A Common Stock, the participant owns the shares and
as a shareholder, will have voting rights and will receive
dividends on such shares. Prior to the vesting date, dividends
are not earned on Pro-Rata RPSUs and the participant does not
have voting rights.
VESTING
EXAMPLES
The examples on the following page illustrate how a Pro-Rata
RPSU award granted in fiscal 2011 would vest, in equal
installments, over three fiscal years. Vesting is subject to
achievement of FY11 performance goal (Corporate NIBT at
Threshold or better) and the participants continuous
service with the Company from the grant date to each vesting
date.
EXAMPLE
1: 300 FY11 Pro-Rata RPSUs (Granted July 2010)
# Pro-Rata RPSUs |
||||||||||||||||
Vested and |
||||||||||||||||
Distributed if |
||||||||||||||||
# Pro-Rata RPSUs |
Performance |
Vesting |
Vesting |
|||||||||||||
Performance Period | Eligible to Vest | Level(1) | Criteria Met(2) | Date(3) | ||||||||||||
FY11
|
100 | Threshold | 100 | June 2011 | ||||||||||||
FY12
|
100 | N/A | 100 | June 2012 | ||||||||||||
FY13
|
100 | N/A | 100 | June 2013 | ||||||||||||
Total
|
300 | 300 |
4
(1) | Threshold refers to attaining at least 80% of the fiscal 2011 Corporate NIBT goal. If Threshold or better performance is not achieved in the first year, all three tranches will be forfeited | |
(2) | Vesting criteria includes a minimum of Threshold performance and the participants continuous service with the Company from grant date | |
(3) | The vesting date typically occurs in June of each year, but may be earlier or later |
Additionally, depending on any previous grants received, more
than one Pro-Rata RPSU award may be eligible to vest each year,
as shown below:
EXAMPLE
2: MULTIPLE PRIOR GRANTS WITH SHARES ELIGIBLE TO
VEST
# of Pro-Rata |
1/3 of Pro-Rata RPSUs Eligible to Vest(1) | |||||||||||||||
Year Granted | RPSUs Granted | June 2011 | June 2012 | June 2013 | ||||||||||||
FY11 (July 2010)
|
300 | 100 | 100 | 100 | ||||||||||||
FY10 (July 2009)
|
270 | 90 | 90 | |||||||||||||
FY09 (July 2008)
|
300 | 100 | | |||||||||||||
Total Pro-Rata RPSUs
|
870 | 290 | 190 | 100 |
(1) | Assumes that goal measures, performance and service with the Company, applicable to each tranche of each grant are met. The vesting date typically occurs in June of each year, but may be earlier or later. |
In the U.S. and in many other jurisdictions, vesting of
RPSUs and delivery of shares of the Companys Class A
Common Stock is a taxable event. When shares are distributed, a
portion of the shares is withheld to satisfy withholding
requirements, and the net shares are delivered to participants
in their Merrill Lynch account.
Shares received from the vesting of a Pro-Rata RPSU award may be
sold subject to the Companys trading restrictions as set
forth in the Companys Securities Trading policy beginning
on page 8. In certain circumstances, certain Executive
Officers may sell shares pursuant to Rule 144 or another
applicable exemption under the U.S. Securities Act of 1933,
as amended.
In the U.S. and in many other jurisdictions, sale of such
shares after vesting has tax implications. Contact your
financial advisor for important information about how a
subsequent sale of shares impacts you.
Once Pro-Rata RPSUs have vested and you receive shares of the
Companys Class A Common Stock from the vesting of a
particular Pro-Rata RPSU award, you retain all rights to those
shares, regardless of employment status with the Company.
5
IF YOU
LEAVE THE COMPANY
This chart explains what happens to RPSUs if you leave Polo
Ralph Lauren.
Event | Status of Awards | |
Retirement at (Age 65)(1)
Early Retirement (Age 55 through age 64 with 7 or more years of service(1)) Disability Death |
In the fiscal year of retirement,
disability or death, a
pro-rated(2)
number of the Pro-Rata RPSUs scheduled to vest that fiscal year
will be determined and will be eligible to vest at their normal
vesting date. Vesting is contingent upon achievement of the
performance goal established for the performance period. Any
pro-rated RPSUs that do not meet the vesting requirements will
be forfeited.
|
|
All remaining Pro-Rata RPSUs (for
that fiscal year and any other fiscal years remaining) are
forfeited
|
||
Voluntary Resignation |
All unvested Pro-Rata RPSUs are
forfeited
|
|
Involuntary Termination (without cause)
|
All unvested Pro-Rata RPSUs are
forfeited
|
|
Dismissal for Cause (as defined by the Company and if applicable, the participants employment agreement) |
All vested Pro-Rata RPSUs not yet
distributed into shares of the Companys Class A Common
Stock are forfeited
All unvested Pro-Rata RPSUs are forfeited |
(1) | Pro-rated RPSUs vest only if retirement date is on or after the last day of the first quarter of the fiscal year | |
(2) | The pro-rated portion is determined by taking the number of months worked in the fiscal year, dividing by 12 then multipying by the number of Pro-Rata RPSUs scheduled to vest for that fiscal year |
SECURITIES
TRADING POLICY
INSIDER
TRADING
As provided in the Polo Ralph Lauren (the Company)
Employee Handbook, employees are prohibited by law from buying
or selling securities if an employee has or is aware of any
material, non-public information about the Company and
its subsidiaries. This is commonly referred to as insider
information. Material, non-public information is any
information that has not been disclosed to the public that could
affect the price of Company Common Stock either
positively or negatively or affect a persons
decision to buy, hold or sell stock.
Examples of what might be considered insider
information include, but are not limited to, the following:
| Earnings or other financial information | |
| Changes in dividend policy | |
| Stock splits | |
| Mergers and acquisitions | |
| Major new contracts or product-line introductions | |
| Litigation involving substantial amounts of money | |
| Changes in management |
These insider-trading rules are applicable to employees of Polo
Ralph Lauren and its Subsidiaries and Affilitates, worldwide.
COMPANY
BLACKOUT PERIODS
To avoid even the appearance of insider trading, our
Companys Securities Trading policy prohibits members of
the Board of Directors, all employees and their Related
Parties (as such term is defined in the
6
Companys Securities Trading Policy) from making trades
involving stock of the Company during certain blackout
periods. This prohibition covers all transactions in
the Companys securities, including buying or selling
shares, including shares of Class A Common Stock received
upon the vesting of Pro-Rata RPSUs. These blackout periods
generally begin two weeks before the end of each of our fiscal
quarters and continue through one trading day after the Company
issues its earnings release for the fiscal quarter or year just
ended. If the earnings release is issued before the opening of
the market on a trading day, trading may begin the next day. The
blackout periods are announced at the start of each year. The
Company may prohibit trading of the Companys stock at any
time it deems such trading to be inappropriate, even outside the
regular blackout periods. Individuals who receive a specific
notification prohibiting them from trading the Companys
stock should note that such notification takes precedence over
pre-announced blackout periods. In addition, members of the
Board of Directors, Officers (any employee who is a Vice
President or above), and all employees in the Finance, Legal and
Human Resources departments must clear all trades with the
Corporate Counsel, whether they occur within a blackout period
or not.
ADDITIONAL
PROHIBITED TRANSACTIONS
Because we believe it is inappropriate for any Company personnel
to engage in short-term or speculative transactions involving
the Companys Common Stock, it is Company policy that
employees do not engage in any of the following activities with
respect to the securities of the Company:
| In and out trading in securities of the Company. Any Company stock purchased in the market must be held for a minimum of six months and ideally longer. Note that the Securities and Exchange Commission (SEC) has a short-swing profit recapture rule that effectively prohibits Executive Officers and members of the Board of Directors from selling any Company stock within six months of a purchase. The Company has extended this prohibition to all employees. The receipt of shares pursuant to the vesting of Pro-Rata RPSU awards is not considered a purchase under the SECs rule. | |
| Short sales (i.e., selling stock one does not own and then borrowing the shares to make delivery) | |
| Buying or selling puts or calls (i.e., making commitments to buy or sell securities at a specified price for a fixed period of time) |
CLEARANCE
OF ALL TRADES BY DIRECTORS, OFFICERS AND OTHER KEY
PERSONNEL
All
transactions in Company stock (purchases, sales, transfers,
etc.) by members of the Board of
Directors, Officers (any employee who is a Vice President or above), and personnel in the Finance,
Legal and Human Resources departments must be cleared by the Corporate Counsel.
If you contemplate a transaction, please provide a written request via e-mail to the Corporate
Counsel specifying the number of shares that you wish to purchase or sell before contacting
Merrill Lynch or taking any other step to initiate a transaction.
Directors, Officers (any employee who is a Vice President or above), and personnel in the Finance,
Legal and Human Resources departments must be cleared by the Corporate Counsel.
If you contemplate a transaction, please provide a written request via e-mail to the Corporate
Counsel specifying the number of shares that you wish to purchase or sell before contacting
Merrill Lynch or taking any other step to initiate a transaction.
COMPLIANCE
WITH SECTION 409A
To the extent applicable, the Plan shall be interpreted in
accordance with Section 409A of the Internal Revenue Code
of 1986 and the Department of Treasury Regulations and other
interpretive guidance issued hereunder
(Section 409A). Notwithstanding any provision
of the Plan to the contrary, it is intended that this Plan
comply with Section 409A, and all provision of this Plan
shall be construed and interpreted in a manner consistent with
the requirements for avoiding taxes or penalties under
Section 409A. Each Participant is solely responsible and
liable for the satisfaction of all taxes and penalties that may
be imposed on or in respect of such Participant in connection
with this Plan or any other plan maintained by the Company
(including any taxes and penalties under Section 409A), and
neither the Company nor any Affiliate shall have any obligation
to indemnify or otherwise hold such Participant (or any
beneficiary) harmless from any or all of such taxes or
penalties.
In the event of any discrepancy between this Pro-Rata RPSU
Overview and either the Plan or the provision under which the
Plan is administered and governed by the Compensation Committee,
the Plan and the determination of the Compensation Committee
will govern, as applicable. This Overview is qualified in its
entirety based on the determinations, interpretations and other
decisions made within the sole discretion of the Compensation
Committee.
7