Coach 2012 Annual Report Download - page 19

of these audits and negotiations with taxing authorities may affect the ultimate settlement of these issues. As a
result, we expect that throughout the year there could be ongoing variability in our quarterly tax rates as
events occur and exposures are evaluated. In addition, our effective tax rate in a given financial statement
period may be materially impacted by changes in the mix and level of earnings or by changes to existing
accounting rules or regulations. Further, proposed tax changes that may be enacted in the future could
negatively impact our current or future tax structure and effective tax rates.
Provisions in Coach’s charter, bylaws and Maryland law may delay or prevent an acquisition of Coach by a
third party.
Coach’s charter, bylaws and Maryland law contain provisions that could make it more difficult for a third
party to acquire Coach without the consent of Coach’s Board. Coach’s charter permits its Board, without
stockholder approval, to amend the charter to increase or decrease the aggregate number of shares of stock or
the number of shares of stock of any class or series that Coach has the authority to issue. In addition, Coach’s
Board may classify or reclassify any unissued shares of common stock or preferred stock and may set the
preferences, rights and other terms of the classified or reclassified shares. Although Coach’s Board has no
intention to do so at the present time, it could establish a series of preferred stock that could have the effect of
delaying, deferring or preventing a transaction or a change in control that might involve a premium price for
Coach’s common stock or otherwise be in the best interest of Coach’s stockholders.
Coach’s bylaws can only be amended by Coach’s Board. Coach’s bylaws also provide that nominations
of persons for election to Coach’s Board and the proposal of business to be considered at a stockholders
meeting may be made only in the notice of the meeting, by Coach’s Board or by a stockholder who is entitled
to vote at the meeting and has complied with the advance notice procedures of Coach’s bylaws. Also, under
Maryland law, business combinations, including issuances of equity securities, between Coach and any person
who beneficially owns 10% or more of Coach’s common stock or an affiliate of such person are prohibited for
a five-year period, beginning on the date such person last becomes a 10% stockholder, unless exempted in
accordance with the statute. After this period, a combination of this type must be approved by two
super-majority stockholder votes, unless some conditions are met or the business combination is exempted by
Coach’s Board.
Risks relating to our Hong Kong Depositary Receipts (‘‘HDRs’’)
An active trading market for the Hong Kong Depositary Receipts on the Hong Kong Stock Exchange might
not develop or be sustained and their trading prices might fluctuate significantly.
We cannot assure you that an active trading market for the HDRs on the Hong Kong Stock Exchange can
develop or be sustained. If an active trading market of the HDRs on the Hong Kong Stock Exchange does not
develop or is not sustained, the market price and liquidity of the HDRs could be materially and adversely
affected. As a result, the market price for HDRs in Hong Kong might not be indicative of the trading prices of
Coach’s Common Stock on the NYSE, even allowing for currency differences.
The characteristics of the U.S. capital markets and the Hong Kong capital markets are different.
The NYSE and the Hong Kong Stock Exchange have different trading hours, trading characteristics
(including trading volume and liquidity), trading and listing rules, and investor bases (including different
levels of retail and institutional participation). As a result of these differences, the trading prices of Common
Stock and the HDRs representing them might not be the same, even allowing for currency differences.
Fluctuations in the price of our Common Stock due to circumstances peculiar to the U.S. capital markets
could materially and adversely affect the price of the HDRs. Because of the different characteristics of the
U.S. and Hong Kong equity markets, the historic market prices of our Common Stock may not be indicative
of the performance of the HDRs.
We are a corporation incorporated in the State of Maryland in the United States and our corporate
governance practices are principally governed by U.S. federal and Maryland state laws and regulations.
We are a corporation incorporated in the State of Maryland in the United States and our HDRs are listed
on the Hong Kong Stock Exchange. Our corporate governance practices are primarily governed by and subject
to U.S. federal and Maryland laws and regulations. U.S. federal and Maryland laws and regulations differ in a
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