Abercrombie & Fitch 2009 Annual Report Download - page 84

calculation is based on actual compensation, base salary and cash incentive compensation for the past three
fiscal years. In Fiscal 2009 and Fiscal 2008, the Company recorded income of $1.0 million and $2.5 million
associated to the SERP, respectively. The amounts recognized in Fiscal 2009 and Fiscal 2008 were primarily
the result of a reduction in average compensation, partially offset by a reduction in the discount rate. The
expense associated with the SERP was $1.4 million in Fiscal 2007.
16. CONTINGENCIES
A&F is a defendant in lawsuits and other adversary proceedings arising in the ordinary course of
business.
On June 23, 2006, Lisa Hashimoto, et al. v. Abercrombie & Fitch Co. and Abercrombie & Fitch Stores,
Inc., was filed in the Superior Court of the State of California for the County of Los Angeles. In that action,
plaintiffs alleged, on behalf of a putative class of California store managers employed in Hollister and
abercrombie kids stores, that they were entitled to receive overtime pay as “non-exempt” employees under
California wage and hour laws. The complaint seeks injunctive relief, equitable relief, unpaid overtime
compensation, unpaid benefits, penalties, interest and attorneys’ fees and costs. The defendants answered the
complaint on August 21, 2006, denying liability. On June 23, 2008, the defendants settled all claims of
Hollister and abercrombie kids store managers who served in stores from June 23, 2002 through April 30,
2004, but continued to oppose the plaintiffs’ remaining claims. On January 29, 2009, the Court certified a
class consisting of all store managers who served at Hollister and abercrombie kids stores in California from
May 1, 2004 through the future date upon which the action concludes. The parties are continuing to litigate
the claims of that putative class.
On September 2, 2005, a purported class action, styled Robert Ross v. Abercrombie & Fitch Company, et
al., was filed against A&F and certain of its officers in the United States District Court for the Southern
District of Ohio on behalf of a purported class of all persons who purchased or acquired shares of A&F’s
Common Stock between June 2, 2005 and August 16, 2005. In September and October of 2005, five other
purported class actions were subsequently filed against A&F and other defendants in the same Court. All six
securities cases allege claims under the federal securities laws related to sales of Common Stock by certain
defendants and to a decline in the price of A&F’s Common Stock during the summer of 2005, allegedly as a
result of misstatements attributable to A&F. Plaintiffs seek unspecified monetary damages. On November 1,
2005, a motion to consolidate all of these purported class actions into the first-filed case was filed by some of
the plaintiffs. A&F joined in that motion. On March 22, 2006, the motions to consolidate were granted, and
these actions (together with the federal court derivative cases described in the following paragraph) were
consolidated for purposes of motion practice, discovery and pretrial proceedings. A consolidated amended
securities class action complaint (the “Complaint”) was filed on August 14, 2006. On October 13, 2006, all
defendants moved to dismiss that Complaint. On August 9, 2007, the Court denied the motions to dismiss. On
September 14, 2007, defendants filed answers denying the material allegations of the Complaint and asserting
affirmative defenses. On October 26, 2007, plaintiffs moved to certify their purported class. After briefing and
argument, the motion was submitted on March 24, 2009, and granted on May 21, 2009. On June 5, 2009,
defendants petitioned the Sixth Circuit for permission to appeal the class certification order and on August 24,
2009, the Sixth Circuit granted leave to appeal.
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ABERCROMBIE & FITCH CO.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)