Abercrombie & Fitch 2012 Annual Report Download - page 45

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Table of Contents
September 30, 1996 — January 31, 2012
Total Stockholder Return
ANF vs. S&P 500 vs. S&P Retail
Chart Data Source: S&P Research Insight
Compensation Program for the CEO
Mr. Jeffries, the Company's current Chairman and CEO, is effectively the "founder" of the modern day Abercrombie & Fitch due to his unique role and
contributions during his more than 20-year tenure. In addition to his role as Chairman and CEO, he also functions as the brand visionary and chief creative
talent for the Company. Under his leadership, the Company reinvented the Abercrombie & Fitch brand, created the Hollister, abercrombie kids and Gilly
Hicks brands and launched aggressive long-term international expansion. During Mr. Jeffries' tenure, the Company's market value has increased by
approximately $4 billion since 1996 and has significantly outperformed the S&P 500 (as shown on the chart above).
The Company's compensation arrangement with the CEO reflects his unique "founder" status and the extraordinary contributions he continues to
deliver. To ensure the continuation of Mr. Jeffries' service with the Company, the Board entered into a new five-year employment agreement in December
2008, when his previous agreement expired.
Under his employment agreement, the CEO is eligible to earn semi-annual performance-based equity grants based on a formula that ties the size of
semi-annual grants to increases in the Company's total stockholder return. The CEO does not earn a performance-based equity grant unless the Company's
total stockholder return for each semi-annual measurement period increases above all previous high-water marks since the beginning of the contract, adjusted
for cash dividends, and then only to the extent that the value created exceeds any cash compensation paid to or earned by the CEO and any increase in the
CEO's pension benefits accrued with respect to the semi-annual period to which the grant relates. Moreover, pursuant to a recent amendment to the CEO's
employment agreement, 80% of the total fair value any semi-annual equity grants earned during the remaining term of his employment agreement will be
awarded in the form of SARs and 20% will be awarded in the form of restricted stock units. The restricted stock units will be subject to the same target and
threshold adjusted earnings per share performance levels that apply to performance shares granted to our Executive Vice Presidents, as well as the time-based
vesting requirements specified in the CEO's employment agreement. Under this amendment to the CEO's employment agreement, 100% of the restricted stock
units will be eligible to vest if the target adjusted earnings per share performance level is achieved or exceeded. Only 50% of the restricted stock units will be
eligible to vest if the threshold adjusted earnings per share performance level is achieved and 50% of the restricted stock units will be forfeited. Interpolation
will be used to determine the percentage of the restricted
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