Abercrombie & Fitch 2012 Annual Report Download - page 42

Table of Contents
(2) The percent of class is based upon the sum of 84,841,792 shares of Common Stock outstanding on April 25, 2012 and the number of shares of Common Stock, if any, as to which the
named individual or group has the right to acquire beneficial ownership by June 24, 2012, either through the vesting of restricted shares or restricted stock units or upon the exercise of
stock options or SARs which are currently exercisable or will become exercisable by June 24, 2012.
(3) The "Amount and Nature of Beneficial Ownership" does not include the following number of shares of Common Stock credited to the bookkeeping accounts of the following directors
under the Directors' Deferred Compensation Plan: Mr. Griffin, 24,209 shares; Mr. Kessler, 5,536 shares; Mr. Stapleton, 3,539 shares; and all directors as a group, 33,284 shares. While the
directors have an economic interest in these shares, each director's only right with respect to his bookkeeping account (and the amounts allocated thereto) is to receive a distribution of the
whole shares of Common Stock represented by the share equivalent credited to his bookkeeping account (plus cash representing the value of fractional shares) in accordance with the terms
of the Directors' Deferred Compensation Plan.
Stock Ownership Guidelines
The Board believes it is important that the executive officers and directors have, and are recognized both internally and externally as having, long-term
financial interests that are aligned with those of the Company's stockholders. Accordingly, the Board adopted stock ownership guidelines for all directors and
executive officers effective as of November 12, 2009. The Company's stock ownership guidelines are posted on the "Corporate Governance" page of the
Company's website at www.abercrombie.com, accessible through the "Investors" page.
The guidelines for the executive officers are five times annual base salary for the CEO and one times annual base salary for the other executive officers.
The guidelines are initially calculated using the executive officer's base salary as of the later of the date the guidelines were adopted and the date the
individual was first designated as an executive officer by the Board. The guidelines may be modified, at the discretion of the Nominating and Board
Governance Committee, when an executive officer changes pay grade and otherwise from time to time. Until the amount contemplated by the guidelines is
achieved, the executive officer is required to retain an amount equal to 50% of the shares received as a result of the exercise of stock options or stock-settled
SARs or the vesting of restricted stock or restricted stock units, in each case netted to pay any exercise price or withholding taxes; provided, that for a three-
year transition period ending November 12, 2012, executive officers are required to retain 33 1/3% of the net shares received if they are not above the
applicable guidelines. Failure to meet or, in unique circumstances, to show sustained progress toward meeting these stock ownership guidelines may be a
factor considered by the Compensation Committee in determining future long-term incentive equity grants and/or appropriate levels of incentive
compensation. All of the executive officers have complied with their obligations under the guidelines.
The guideline for the directors is three times the amount of the annual retainer paid to directors, calculated using the annual retainer as of the later of the
date the guidelines were adopted and the date the director is elected to the Board. It is anticipated that directors should be able to achieve the guideline within
three years of joining the Board, or, in the case of directors serving at the time the guidelines were adopted, within three years of the date of adoption of the
guidelines. All of the directors are in compliance with the guidelines.
Section 16(a) Beneficial Ownership Reporting Compliance
To the Company's knowledge, based solely on a review of the forms furnished to the Company and written representations that no other forms were
required, during Fiscal 2011, all directors, officers and beneficial owners of greater than 10% of the outstanding shares of Common Stock timely filed the
reports required by Section 16(a) of the Exchange Act.
PROPOSAL 2 — ADVISORY VOTE ON EXECUTIVE COMPENSATION
We are asking stockholders to approve an advisory resolution on the Company's executive compensation as reported in this Proxy Statement. As
described below in the "COMPENSATION DISCUSSION AND ANALYSIS" section of this Proxy Statement beginning on page 41, the Compensation
Committee has structured the Company's executive compensation programs, among other things, to achieve the following key objectives:
• Align executive pay with the achievement of financial and operational objectives;
• Create and sustain long-term stockholder value; and
• Reflect the strong team-based culture of the Company.
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