Coach 2002 Annual Report Download - page 60

Table of Contents
COACH, INC.
Notes to Consolidated Financial Statements — (Continued)
(dollars and shares in thousands, except per share data)
The weighted-average fair values of individual options granted were $4.89 during fiscal 2003, $4.81 during fiscal 2002 and $3.34 during
fiscal 2001.
Employee Stock Purchase Plan. During fiscal 2002, Coach established the employee stock purchase plan and received stockholder
approval of this program. Under this plan, full-time Coach employees are permitted to purchase a limited number of Coach common shares
at 85% of market value. Under this plan, Coach sold 67 shares to employees in fiscal 2003 and 26 shares to employees in fiscal year 2002.
Pro forma compensation expense is calculated for the fair value of employees purchase rights using the Black-Scholes model. Underlying
assumptions are an expected life of .5 years, risk free interest of 1.2%, expected volatility of 38.3% and dividend yield of 0%. The weighted-
average fair value of the purchase rights granted during fiscal 2003 was $10.37 and $5.88 in fiscal 2002.
Stock Unit Awards. Restricted stock unit awards of Coach common stock have been granted to employees as retention awards. The
value of retention awards is determined based upon the fair value of Coach stock at the grant date.
Stock awards are generally restricted and subject to forfeiture until the retention period is completed. The retention period is generally
three years. As of June 28, 2003, retention awards of 257 shares are outstanding. This value is initially recorded as unearned compensation
and is charged to earnings over the retention period. The amortization expense related to these awards was $1,568 for fiscal 2003 and $766
for fiscal 2002.
Deferred Compensation. Under the Coach, Inc. Executive Deferred Compensation Plan, executive officers and employees at or above
the director level may elect to defer all or a portion of their annual bonus or annual base salary into the plan. Under the Coach, Inc. Deferred
Compensation Plan for Non-Employee Directors, Coach’s outside directors may similarly defer their director’s fees. Amounts deferred under
these plans may, at the participants’ election, be either represented by deferred stock units, which represent the right to receive shares of
Coach common stock on the distribution date elected by the participant, or placed in an interest-bearing account to be paid on such distribution
date. The amounts accrued under these plans were $2,915 at June 28, 2003 and $2,051 at June 29, 2002. These amounts are reflected in
other noncurrent liabilities in the consolidated balance sheets.
The following table summarizes share and exercise price information about Coach’s equity compensation plans as of June 28, 2003.
Number of
Number of Weighted- securities
securities to be average remaining
issued upon exercise price of available for
exercise of outstanding future issuance
outstanding options, under equity
options, warrants warrants compensation
Plan Category or rights and rights plans
Equity compensation plans approved by security
holders 9,022 $21.60 5,672
Equity compensation plans not approved by
security holders 233 $10.84 777
9. Retirement Plans
Coach has established the Coach, Inc. Savings and Profit Sharing Plan, which is a noncontributory defined contribution plan. Employees
who meet certain eligibility requirements and are not part of a collective bargaining agreement participate in this program.
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