Attached files
| file | filename |
|---|---|
| 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-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 |
| EX-10.2 - EX-10.2 - RALPH LAUREN CORP | y85876exv10w2.htm |
EXHIBIT 10.3
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
Stock
Option
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.
This Overview explains the Company’s current Stock Option
program under the Plan, describes its benefits to you as a
participant, and outlines the various steps needed to be taken
in regard to your Stock Option grant.
| • | A Stock Option granted under the Plan provides a participant the opportunity to purchase, within a specified period of time, a stated number of shares of the Company’s Class A Common Stock (traded on the New York Stock Exchange under the symbol RL) at a fixed price (the option grant price) | |
| • | The option grant price equals the Fair Market Value (the average of the high and the low trading prices) of a share of the Company’s Class A Common Stock on the grant date | |
| • | Stock Options increase in value when the price of the Company’s Class A Common stock moves above the option grant price | |
| • | Unlike actual share ownership, Stock Options do not provide voting rights or earn dividends |
AWARD
OBJECTIVES
Objectives of the Stock Option program are to:
1. Motivate key contributors to continuously improve the
Company’s performance, which should ultimately result in
increased stock value
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 Company’s 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
exercise vested stock options. 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 Company’s 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 stock options
then outstanding.
Nothing contained herein may be construed as creating a promise
of future benefits or a binding contract with the Company.
Further, an individual’s employment continues to be at will.
For questions regarding the Plan and its provisions, please
contact Human Resources.
ELIGIBILITY
FOR STOCK OPTION GRANT
Equity awards, including Stock Option grants, may be made
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 fiscal
year for which the grant is being made.
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Guidelines have been established for the number and types of
equity awards eligible participants may receive. The guidelines
reflect a position’s scope, accountability and impact on
the organization, and may also reflect changes in the value of
the Company’s Class A Common Stock.
Please note that these guidelines do not constitute a
guarantee that any specific individual will receive an equity
award in any given year, or guarantee the type or size of any
grant, if a grant is made.
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.
or her annual performance appraisal is not eligible for an equity award in the fiscal year
following that performance appraisal period.
OPTION
PRICE
The option grant price, which is equal to the Fair Market Value
on the date of grant, is provided in your on-line Total Rewards
statement and on your Merrill Lynch statement. Though the stock
price may fluctuate over the term of the option, the option
grant price does not change, except in the event of a stock
split or other similar event.
VESTING
PERIOD AND EXPIRATION OF OPTIONS
Stock Options vest in three equal, annual installments beginning
on the first anniversary of the grant, and are 100% vested after
three years. Vested Stock Options must be exercised by the end
of their “contractual term.” Currently, Stock Options
have a seven-year contractual term. Stock Options granted prior
to June 2006 have a ten-year contractual term.
VESTING/EXPIRATION
SCHEDULE(1)
Although participants have the right to exercise Stock Options
once they have vested, they may choose to hold vested options in
anticipation of future gains from an increase in the stock price.
VALUE OF
STOCK OPTIONS
Stock Options increase in value when the market price of the
Company’s Class A Common Stock rises above the Stock
Option grant price. Upon exercise, the difference between the
market price and the option grant price is considered the gain
received from the exercise.
This example demonstrates how the value of the award increases
as stock price increases.
(1) Vesting
contingent upon continuous service to the respective vesting
dates. In addition, option expiration dates may be accelerated
based on certain employment events such as Retirement. Refer to
the If You Leave The Company chart on page 7.
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EXAMPLE:
POTENTIAL VALUE
AWARD OF
1,000 STOCK OPTIONS
| Grant Price | If Future Stock Price Reaches: | |||||||||||||||
| $75 | $85 | $90 | $100 | |||||||||||||
|
Gain per Share (assumes all shares granted have vested)
|
$ | 0 | $ | 10 | $ | 15 | $ | 25 | ||||||||
|
Gain per Share x 1000 Shares
|
$ | 0 | $ | 10,000 | $ | 15,000 | $ | 25,000 | ||||||||
Example
is hypothetical and is not a forecast of growth in the
Company’s Class A Common Stock price
STOCK
OPTION EXERCISE
All Stock Option exercise transactions and recordkeeping are
performed for the Company by Merrill Lynch. Participants must
have an open brokerage account at Merrill Lynch in order to
exercise Stock Options.
The exercise of vested Stock Options has tax consequences in
most jurisdictions. Contact your financial advisor for important
information about how Stock Option exercise impacts you.
For employees at the Vice President level or above
(“Officers”) and all employees in the Finance, Legal
and Human Resources departments, all transactions in the
Company’s securities (including, but not limited to
purchases, sales, transfers, etc.) must be pre-cleared with the
Corporate Counsel. If contemplating a transaction, please
provide a written request via
e-mail to
the Corporate Counsel, specifying the number of Stock Options
you wish to exercise
and/or the
number of shares you wish to purchase or sell before
contacting Merrill Lynch or taking any other step to initiate a
transaction.
| • | Once you receive pre-clearance from the Corporate Counsel, Officers and all employees in the Finance Legal and Human Resources departments must indicate your intent to exercise by contacting the Executive Advisory Team at Merrill Lynch at (800) 937-0526 between 8:30 a.m. and 6:00 p.m. (ET) on any day the New York Stock Exchange is open. Outside the U.S., Puerto Rico or Canada, call (212) 236-5574. | |
| • | All transactions in the Company’s securities, including cash or cashless exercise of Stock Options and sales and purchases of the Company’s Class A Common Stock as described below, are prohibited during a Company trading blackout period as defined in the Company’s Securities Trading policy which is included in this Overview beginning on page 8. |
METHODS
OF EXERCISING STOCK OPTION
When exercising Stock Options, participants purchase shares of
the Company’s Class A Common Stock at the grant price
set at the time the option was granted. Stock Options may be
exercised in three ways:
1. Cash Exercise: Paying cash for the shares
exercised
2. Cashless Exercise: Exercising a number of
Stock Options and paying for the exercise by simultaneously
selling the stock and retaining the net gain
3. Stock-for-Stock
Exchange: Delivering shares of the Company’s
Class A Common Stock owned for at least six months and that
are not subject to any pledge or other security interest, to pay
for the shares exercised
SALE OF
SHARES SUBSEQUENT TO EXERCISE
When shares acquired from the exercise of Stock Options are sold
at a later date, participants benefit from any price
appreciation that may have occurred since the date the shares
were acquired. As noted above, shares realized from a Stock
Option exercise may be sold at any time, except when such sale
would be considered insider trading or during blackout periods
as described in more detail by the Company’s Securities
Trading policy beginning on page 8.
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IF YOU
LEAVE THE COMPANY
This chart explains what happens to your Stock Options if you
leave Polo Ralph Lauren.
| Event | Vested Options | Unvested Options | ||
| Normal Retirement (Age 65) |
• Up to three years to exercise any vested
stock options after retirement, provided they do not expire
sooner. If not exercised within the three years following
retirement, the options expire.
|
• All unvested stock options are
forfeited
|
||
| Early Retirement (Age 55 through Age 64, with seven or more years of service) |
• Up to one year to exercise any vested
stock options after early retirement, provided they do not
expire sooner. If not exercised within one year following
retirement, the options expire. However, any vested options
are forfeited if a participant goes to work for a
competitor(1).
|
• All unvested stock options are
forfeited
|
||
|
Disability
|
• Up to three years to exercise any vested
stock options after long-term disability begins, provided they
do not expire sooner. The options expire if not exercised
within the three years following onset of LTD.
|
• Options continue to vest according to
the original vesting schedule (1/3 each year for
3 years). If vested options are not exercised within
three years of the date of disability, the options expire.
|
||
|
Death
|
• The optionee’s estate has up to
three years to exercise any vested stock options, provided they
do not expire sooner. Options expire if not exercised within
the three years.
|
• Options continue to vest according to
the original vesting schedule (1/3 each year for 3 years).
If vested options are not exercised within three years of the
date of death, the options expire.
|
||
| Dismissal for Cause (as defined by the Company and if applicable, the participant’s employment agreement), or Voluntary Resignation |
• All vested stock options are
forfeited as of the date of termination
|
• All unvested stock options are
forfeited
|
||
|
Involuntary
Termination(2)
|
• Up to three months to exercise any
vested stock options, provided they do not expire sooner
|
• All unvested stock options are
forfeited
|
| (1) | For purposes hereof, a “competitor” shall mean any business engaged in the designing, marketing or distribution of premium lifestyle products, including but not limited to apparel, home, accessories and fragrance products, which competes in any material respect with the Company or any of its Subsidiaries, Affiliates or Licensees | |
| (2) | Refers to termination by Polo without cause, and when the employee has executed a general release with terms satisfactory to the Company |
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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 the Company’s Common Stock —
either positively or negatively — or affect a
person’s decision to buy, hold or sell securities. The
prohibition on insider trading applies to all transactions in
the Company’s securities, including cash exercises,
cashless exercises of Stock Options and sales and purchases of
the Company’s 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 Affiliates worldwide.
COMPANY
BLACKOUT PERIODS
To avoid even the appearance of “insider trading,” our
Company’s Securities Trading policy prohibits members of
the Board of Directors, all employees and their “Related
Parties” (as such term is defined in the Company’s
policy) from making trades involving stock of the Company during
certain “blackout periods.” This prohibition covers
all transactions in the Company’s securities, including
buying or selling shares, cashless exercise of Stock Options and
cash exercises of Stock Options. 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 Company’s 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 Company’s
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 Company’s 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 |
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| extended this prohibition to all employees. The receipt of shares pursuant to the exercise of Stock Options is not considered a purchase under the SEC’s 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 all
personnel in the Finance, Legal and Human Resources departments
must be pre-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 Stock Option
Overview, and either the terms of the Plan or the provisions
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.
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