Coach 2012 Annual Report Download - page 20

number of respects from comparable laws and regulations in Hong Kong. There are certain differences
between the stockholder protection regimes in Maryland and the United States and in Hong Kong.
We have obtained a ruling from the Securities and Futures Commission of Hong Kong (the ‘‘SFC’’) that
we will not be regarded as a public company in Hong Kong for the purposes of the Code on Takeovers and
Mergers and the Share Repurchases Code of Hong Kong and hence, these codes will not apply to us. We have
also obtained a partial exemption from the SFC in respect of the disclosure of interest provisions set out in the
Securities and Futures Ordinance of Hong Kong. In addition, we have been granted waivers or exemptions by
the Hong Kong Stock Exchange from certain requirements under its listing rules. Neither our stockholders nor
the HDR holders will have the benefit of those Hong Kong rules, regulations and the listing rules of the Hong
Kong Stock Exchange for which we have applied, and been granted, waivers or exemptions by the Hong
Kong Stock Exchange and SFC.
Additionally, if any of these waivers or exemptions were to be revoked in circumstances including our
non-compliance with applicable undertakings for any reason, additional legal and compliance obligations
might be costly and time consuming, and might result in issues of interjurisdictional compliance, which could
adversely affect us and HDR holders.
As the SFC does not have extra-territorial jurisdiction on any of its powers of investigation and
enforcement, it will also have to rely on the regulatory regimes of Maryland state authorities and the SEC to
enforce any corporate governance breaches committed by us in the United States. Investors in the HDRs
should be aware that it could be difficult to enforce any judgment obtained outside the United States against
us or any of our associates.
Furthermore, prospective investors in the HDRs should be aware, among other things, that there are U.S.
federal withholding and estate tax implications for HDR holders.
HDR holders are not stockholders of the Company and must rely on the depositary for the HDRs (the
‘‘HDR Depositary’’) to exercise on their behalf the rights that are otherwise available to the stockholders of
the Company.
HDR holders do not have the rights of stockholders. They only have the contractual rights set forth for
their benefit under the deposit agreement for the HDRs (the ‘‘Deposit Agreement’’). Holders of HDRs are not
permitted to vote at stockholders’ meetings, and they may only vote by providing instructions to the HDR
Depositary. There is no guarantee that holders of HDRs will receive voting materials in time to instruct the
HDR Depositary to vote and it is possible that holders of HDRs, or persons who hold their Hong Kong
depositary shares through brokers, dealers or other third parties, will not have the opportunity to exercise a
right to vote, although both we and the HDR Depositary will endeavor to make arrangements to ensure as far
as practicable that all holders of HDRs will be able to vote. As the HDR Depositary or its nominee will be
the registered owner of the Common Stock underlying their HDRs, holders of HDRs must rely on the HDR
Depositary (or its nominee) to exercise rights on their behalf. In addition, holders of HDRs will also incur
charges on any cash distribution made pursuant to the Deposit Agreement and on transfers of certificated
HDRs.
Holders of HDRs will experience dilution in their indirect interest in the Company in the event of an equity
offering which is not extended to them.
If we decide to undertake an equity offering (that is not a rights or other offering that is extended to
HDR holders), HDR holders may suffer a dilution in their indirect ownership and voting interest in the
Common Stock, as compared to their holdings in the HDRs immediately prior to such an offering.
Holders of HDRs will be reliant upon the performance of several service providers. Any breach of those
service providers of their contractual obligations could have adverse consequences for an investment in
HDRs.
An investment in HDRs will depend for its continuing viability on the performance of several service
providers, including but not limited to the HDR Depositary, the registrar for the HDRs, the custodian and any
sub-custodian appointed in respect of the underlying Common Stock. A failure by any of those service
17