Coach 2007 Annual Report Download

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
(Exact Name of Registrant as Specified in Its Charter)
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(State or Other Jurisdiction of
Incorporation or Organization)
(I.R.S. Employer
Identification No.)
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(Address of Principal Executive Offices) (Zip Code)
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(Registrant’s Telephone Number, Including Area Code)
Securities Registered Pursuant to Section 12(b) of the Act:
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Common Stock, par value $.01 per share New York Stock Exchange
Securities Registered Pursuant to Section 12(g) of the Act: 
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes x No o
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No x
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “non-accelerated filer” and “smaller reporting
company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer x Accelerated Filer o Non-Accelerated Filer o Smaller Reporting Company o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x
The aggregate market value of Coach, Inc. common stock held by non-affiliates as of December 28, 2007 (the last business day of the
most recently completed second fiscal quarter) was approximately $10.6 billion. For purposes of determining this amount only, the
registrant has excluded shares of common stock held by directors and officers. Exclusion of shares held by any person should not be
construed to indicate that such person possesses the power, direct or indirect, to direct or cause the direction of the management or policies of
the registrant, or that such person is controlled by or under common control with the registrant.
On August 8, 2008, the Registrant had 336,887,747 shares of common stock outstanding, which is the Registrant’s only class of

Table of contents

  • Page 1
    ... (Address of Principal Executive Offices) (Zip Code) (212) 594-1850 (Registrant's Telephone Number, Including Area Code) Securities Registered Pursuant to Section 12(b) of the Act: Title of Each Class: Name of Each Exchange on Which Registered Common Stock, par value $.01 per share New York...

  • Page 2
    ... Governance Executive Compensation Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Certain Relationships and Related Transactions, and Director Independence Principal Accountant Fees and Services PART IV Exhibits and Financial Statement Schedules...

  • Page 3
    .... We hold the number one position within the U.S. premium handbag and accessories market and the number two position within the Japanese imported luxury handbag and accessories market. Products Coach's product offerings include handbags, women's and men's accessories, footwear, jewelry, wearables...

  • Page 4
    .... Footwear is distributed through over 900 locations in the U.S., including leading Coach retail stores and U.S. department stores. Footwear sales are comprised primarily of women's styles, which coordinate with Coach's handbag collections. Jewelry - In November 2006, Coach launched a jewelry line...

  • Page 5
    ... retail channel. These stores operate under the Coach Factory name and are geographically positioned primarily in established outlet centers that are generally more than 50 miles from major markets. Coach's factory store design, visual presentations and customer service levels support and reinforce...

  • Page 6
    ... retail businesses in Greater China from ImagineX in fiscal 2009, sales in Coachoperated stores in this region will be reported in the Direct segment. 5 TABLE OF CONTENTS The following table shows the number of international wholesale locations at which Coach products are sold: Fiscal Year Ended...

  • Page 7
    ... offices in Hong Kong, China and South Korea that work closely with our independent manufacturers. Coach also operates a European sourcing and product development organization based in Florence, Italy that works closely with the New York design team. This broad-based, global manufacturing strategy...

  • Page 8
    ... pack orders, track shipments, manage inventory and generally provide excellent service to our customers. Coach's products are primarily shipped to Coach retail stores and wholesale customers via express delivery providers and common carriers, and direct to consumers via express delivery providers...

  • Page 9
    ...including but not limited to: distinct newness, innovation and quality of our products, ability to meet consumer's changing preferences and our superior customer service. Employees As of June 28, 2008, Coach employed approximately 12,000 people, including both full and part time employees. Of these...

  • Page 10
    ... diversity helps to reduce the Company's exposure to risks in any one country, we are subject to risks associated with international operations, including, but not limited to: • changes in exchange rates for foreign currencies, which may adversely affect the retail prices of our products, result...

  • Page 11
    ... New York Carlstadt, New Jersey Tokyo, Japan Shenzhen, China Florence, Italy Hong Kong Dongguan, China Seoul, South Korea Shanghai, China Distribution and consumer service Corporate, sourcing and product development Corporate and product development Coach Japan regional management Sourcing, quality...

  • Page 12
    ... Coach's executive officers serve indefinite terms and may be appointed and removed by Coach's board of directors at any time. Coach's directors are elected at the annual stockholders meeting and serve terms of one year. (2) Member of the Audit Committee. (3) Member of the Human Resources Committee...

  • Page 13
    .... Before that, she was Executive Vice President and Chief Operating Officer, Avon North America and Global Business Operations, with responsibility for the company's North American operating business unit as well as global marketing, R&D, supply chain operations and information technology. Ms. Kropf...

  • Page 14
    ...Menezes was elected to Coach's Board of Directors in February 2005. Mr. Menezes has served as President and Chief Executive Officer of Diageo North America, the world's leading premium drinks company, since January 2004, after having served as its President and Chief Operating Officer from July 2002...

  • Page 15
    ...OF CONTENTS Stocs Repurchase Program The Company's share repurchases during the fourth quarter of fiscal 2008 were as follows: Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Approximate Dollar Value of...

  • Page 16
    ... financial data included elsewhere herein. Fiscal Year Ended(1) June 28, 2008(3) June 30, 2007(2) July 1, 2006 July 2, 2005 July 3, 2004 Consolidated Statements of Income: Net sales Gross profit Selling, general and administrative expenses Operating income Interest income, net Income from...

  • Page 17
    ... document. Executive Overview Coach is a leading American marketer of fine accessories and gifts for women and men. Our product offerings include handbags, women's and men's accessories, footwear, jewelry, wearables, business cases, sunwear, watches, travel bags and fragrance. Coach operates in two...

  • Page 18
    ... by increased sales from new stores, comparable stores and expanded stores. Comparable store sales measure sales performance at stores that have been open for at least 12 months. Coach excludes new locations from the comparable store base for the first year of operation. Similarly, stores that are...

  • Page 19
    ... Coach-operated stores in North America and Japan open during any fiscal period and the related 22 TABLE OF CONTENTS proportion of retail and wholesale sales. Advertising, marketing and design expenses include employee compensation, media space and production, advertising agency fees, new product...

  • Page 20
    ...over prior year. The increase is primarily attributable to increased net sales as discussed above. Income from Discontinued Operations In March 2007, the Company exited its corporate accounts business in order to better control the location and image of the brand where Coach product is sold. Through...

  • Page 21
    ... fiscal 2007, Coach opened 19 net new locations and expanded nine locations in Japan. Sales 25 TABLE OF CONTENTS growth in the Internet business accounted for the remaining sales increase. These sales increases were slightly offset by store closures and a decline in the direct marketing channel...

  • Page 22
    ... North America store expenses is attributable to increased variable expenses related to higher sales, new stores opened during the fiscal year and the incremental expense associated with having a full year of expenses related to stores opened in the prior year. The increase in Coach Japan operating...

  • Page 23
    ...credit facilities. For the fiscal year ending June 27, 2009, the Company expects total capital expenditures to be approximately $200 million. Capital expenditures will be primarily for new stores and expansions in North America, Japan and Greater China. We will also continue to invest in department...

  • Page 24
    ... the current portion of long-term debt, in the Consolidated Balance Sheet at June 28, 2008 as these items will be paid within one year; long-term liabilities not requiring cash payments, such as deferred lease incentives; and cash contributions for the Company's pension plans. The Company intends...

  • Page 25
    ... inventories of Coach Japan, for which cost is determined by the lastin, first-out method. The Company reserves for slow-moving and aged inventory based on historical experience, current product demand and expected future demand. A decrease in product demand due to changing customer tastes, buying...

  • Page 26
    ... defined benefit plan assets and obligations as of the date of the employer's fiscal year-end statement of financial position. The recognition provision and the related disclosures were effective as of the end of the fiscal year ended June 30, 2007. The measurement provision is effective for Coach...

  • Page 27
    ... rates associated with revenues and expenses of foreign operations, which are denominated in Japanese Yen and Canadian Dollars, are not material to the Company's consolidated financial statements. Interest Rate Coach is exposed to interest rate risk in relation to its investments, revolving credit...

  • Page 28
    ..., the Company's internal control over financial reporting. Item 9B. Other Information None. 34 TABLE OF CONTENTS PART III Item 10. Directors, Executive Officers and Corporate Governance The information set forth in the Proxy Statement for the 2008 Annual Meeting of Stockholders is incorporated...

  • Page 29
    ... 20549 FORM 10-K FINANCIAL STATEMENTS For the Fiscal Year Ended June 28, 2008 COACH, INC. New Yors, New Yors 10001 INDEX TO FINANCIAL STATEMENTS Page Reports of Independent Registered Public Accounting Firm Consolidated Balance Sheets - At June 28, 2008 and June 30, 2007 Consolidated Statements...

  • Page 30
    ... information is shown in the consolidated financial statements or notes thereto. 37 TABLE OF CONTENTS REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Coach, Inc. New York, New York We have audited the accompanying consolidated balance sheets...

  • Page 31
    ... & Touche LLP New York, New York August 21, 2008 39 TABLE OF CONTENTS COACH, INC. CONSOLIDATED BALANCE SHEETS (amounts in thousands, except share data) June 28, 2008 June 30, 2007 ASSETS Current Assets: Cash and cash equivalents Short-term investments Trade accounts receivable, less allowances...

  • Page 32
    ... Financial Statements. 40 TABLE OF CONTENTS COACH, INC. CONSOLIDATED STATEMENTS OF INCOME (amounts in thousands, except per share data) Fiscal Year Ended June 28, 2008 June 30, 2007 July 1, 2006 Net sales Cost of sales Gross profit Selling, general and administrative expenses Operating income...

  • Page 33
    ..., net of tax Balances at June 30, 2007 Net income Unrealized gains on cash flow hedging derivatives, net of tax Translation adjustments Change in pension liability, net of tax Comprehensive income Shares issued for stock options and employee benefit plans Share-based compensation Adjustment to adopt...

  • Page 34
    ... Provision for bad debt Share-based compensation Excess tax benefit from share-based compensation Deferred income taxes Other noncash credits and (charges), net Changes in operating assets and liabilities: Decrease (increase) in trade accounts receivable Increase in inventories Increase in other...

  • Page 35
    ... include handbags, women's and men's accessories, footwear, jewelry, wearables, business cases, sunwear, watches, travel bags and fragrance. Coach's products are sold through the Direct-to-Consumer segment, which includes Company-operated stores in North America and Japan, the Internet and the Coach...

  • Page 36
    ... are included in selling, general and administrative expenses. Advertising costs are expensed when the advertising first appears. Share-Based Compensation The Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of...

  • Page 37
    ... defined benefit plan assets and obligations as of the date of the employer's fiscal year-end statement of financial position. The recognition provision and the related disclosures were effective as of the end of the fiscal year ended June 30, 2007. The measurement provision is effective for Coach...

  • Page 38
    ...Directors. These plans were approved by Coach's stockholders. The exercise price of each stock option equals 100% of the market price of Coach's stock on the date of grant and generally has a maximum term of 10 years. Stock options and share awards that are granted as part of the annual compensation...

  • Page 39
    ... under the Coach stock option plans as of June 28, 2008 and changes during the year then ended is as follows: Number of Options Weighted- Weighted- Aggregate Intrinsic Average Exercise Price Average Remaining Contractual Term (In Years) Outstanding Value Outstanding at June 30, 2007 Granted...

  • Page 40
    ... Plan Under the Employee Stock Purchase 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 155, 159 and 162 shares to employees in fiscal 2008, fiscal 2007 and fiscal 2006, respectively. Compensation...

  • Page 41
    ... Financial Statements (dollars and shares in thousands, except per share data) 5. Investments - (continued) As of June 30, 2007, ARS were included in short-term investments as they were intended to meet the short-term working capital needs of the Company and the Company could offer to sell...

  • Page 42
    .... The letters of credit, which expire at various dates through 2012, primarily collateralize the Company's obligation to third parties for the purchase of inventory. Coach is a party to employment agreements with certain key executives which provide for compensation and other benefits. The...

  • Page 43
    ... as a component of cost of sales when the related inventory is sold. Coach is also exposed to market risk from foreign currency exchange rate fluctuations with respect to Coach Japan as a result of its $231,000 U.S. dollar denominated fixed rate intercompany loan from Coach. To manage this risk, on...

  • Page 44
    ..., except per share data) 10. Income Taxes - (continued) The components of deferred tax assets and liabilities at the respective year-ends were as follows: Fiscal 2008 Fiscal 2007 Reserves not deductible until paid Pensions and other employee benefits Property and equipment Net operating loss Other...

  • Page 45
    ... Consolidated Financial Statements (dollars and shares in thousands, except per share data) 11. Retirement Plans - (continued) The following tables provide information about the Company's pension plans: Fiscal Year Ended June 28, 2008 June 30, 2007 Change in Benefit Obligation Benefit obligation...

  • Page 46
    ...COACH, INC. Notes to Consolidated Financial Statements (dollars and shares in thousands, except per share data) 11. Retirement Plans - (continued) Fiscal Year Ended June 28, 2008 June 30, 2007 July 1, 2006 Components of net periodic benefit cost Service cost Interest cost Expected return on plan...

  • Page 47
    ... reportable segments: Direct-to-Consumer and Indirect. The Company's reportable segments represent channels of distribution that offer similar merchandise, service and marketing strategies. Sales of Coach products through Company-operated stores in North America and Japan, the Internet and the Coach...

  • Page 48
    ... eight retail stores in Canada and 149 department store shop-in-shops, retail stores and factory stores in Japan. Coach also operates distribution, product development and quality control locations in the United States, Italy, Hong Kong, China and South Korea. Geographic revenue information is based...

  • Page 49
    ...' exercise prices, ranging from $31.28 to $36.86, were greater than the average market price of the common shares. 15. Discontinued Operations In March 2007, the Company exited its corporate accounts business in order to better control the location and image of the brand where Coach product is sold...

  • Page 50
    ... Statement of Cash Flows includes the corporate accounts business for all periods presented. 16. Stocs Repurchase Program Purchases of Coach's common stock are made from time to time, subject to market conditions and at prevailing market prices, through open market purchases. Repurchased shares...

  • Page 51
    ... common share of the Company at an exercise price far below the then-current market price. Subject to certain exceptions, Coach's Board of Directors will be entitled to redeem the rights at $0.0001 per right at any time before the close of business on the tenth day following either the public...

  • Page 52
    ... listed on the New York Stock Exchange and is traded under the symbol "COH." The following table sets forth, for the fiscal periods indicated, the high and low closing prices per share of Coach's common stock as reported on the New York Stock Exchange Composite Tape. Fiscal Year Ended 2008 High Low...

  • Page 53
    ... Statement for the 2005 Annual Meeting of Stockholders, filed on September 28, 2005 10.4 10.5 10.6 10.7 10.8 Coach, Inc. 2000 Non-Employee Director Stock Plan, which is incorporated by reference from Exhibit 10.13 to Coach's Annual Report on Form 10-K for the fiscal year ended June 28, 2003 Coach...

  • Page 54
    ...10.21 to Coach's Annual Report on Form 10-K for the fiscal year ended June 28, 2003 Employment Agreement dated June 1, 2003 between Coach and Keith Monda, which is incorporated by reference from Exhibit 10.22 to Coach's Annual Report on Form 10-K for the fiscal year ended June 28, 2003 68 TABLE OF...

  • Page 55
    ... with the Company is terminated by the Company without Cause or you resign your employment for Good Reason (including, without limitation, separation from employment due to a Change in Control) prior to June 28, 2014, the Company shall pay you the full amount of each Extension Signing Bonus set...

  • Page 56
    ... if your employment with the Company is terminated by the Company without Cause or you resign your employment for Good Reason (including, without limitation, separation from employment due to a Change in Control) prior to June 28, 2014, the Company shall pay you the full amount of each Service Bonus...

  • Page 57
    ...at the time of your termination of employment you are a "specified employee" as defined in Section 409A (and any related regulations or other pronouncements thereunder) and the deferral of any payments otherwise payable hereunder as a result of such termination of employment is necessary in order to...

  • Page 58
    ...; fully understand and agree to its terms and provisions; and intend and agree that it be final and legally binding on you and the Company. This Letter Agreement shall be governed and construed under the internal laws of the State of New York and may be executed in several counterparts. Very truly...

  • Page 59
    ... Directors of Coach (the " Board"). The Executive, however, will not be deemed an Outside Director and shall not receive additional compensation for such service to the Board. From the Transition Date until August 31, 2009 (the " Term"), the Executive's employment with the Company shall be governed...

  • Page 60
    ...contrary in the Coach Supplemental Retirement Plan, the Executive's vested account balance under such plan shall be distributed to the Executive on March 1, 2010. (d) Executive shall retain his leased automobile during the period of his part-time employment, and the Company shall continue to provide...

  • Page 61
    ... any employee, consultant, director, wholesale customer, vendor, supplier, lessor or lessee of the Company to terminate its employment or arrangement with the Company, or, for employees only, establish any relationship with the Executive or employees in his chain of command for any business purpose...

  • Page 62
    ..., reports, programs, plans, proposals, financial documents, electronically stored data, computer equipment or software, access codes or disks and instructional manuals or any other documents concerning the Company's customers, business plans, sourcing and operations, marketing strategies, products...

  • Page 63
    ... WARRANTS THAT HE HAS DONE SO. THE EXECUTIVE FURTHER WARRANTS THAT HE UNDERSTANDS THAT HE HAS SEVEN (7) DAYS AFTER SIGNING THIS AGREEMENT TO REVOKE THE AGREEMENT BY NOTICE IN WRITING TO GENERAL COUNSEL, C/O COACH, 516 WEST 34TH STREET, NEW YORK, NY 10001. THIS AGREEMENT SHALL BE BINDING, EFFECTIVE...

  • Page 64
    ... the Code, such portion of the Executive's termination benefits shall not be provided to the Executive prior to the earlier of (i) the expiration of the six-month period measured from the date of the Executive's "separation from service" with the Company (as such term is defined in the Department of...

  • Page 65
    ...in this Agreement, which Executive may have had with the Company, including, without limitation, the Employment Agreement. 10. Applicable Law. This Agreement shall be governed, construed, interpreted and enforced in accordance with the substantive laws of the state of New York, without reference to...

  • Page 66
    ... regarding the terms and meaning of this Agreement, that Executive has had sufficient time to consider the terms provided for in this Agreement, that no representatives or inducements have been made to Executive except as set forth in this Agreement, and that Executive has signed the same knowingly...

  • Page 67
    IN WITNESS WHEREOF, and intending to be legally bound, the parties have executed the foregoing on the dates shown below. KEITH MONDA: _____ _____ Date COACH, INC. By: _____ Lew Frankfort Chairman, Chief Executive Officer _____ Date

  • Page 68
    ...date you execute this Letter Agreement (the "Grant Date"), you shall be granted a number of Retention Options (rounded to the nearest whole number) equal to (a) $3.75 million divided by (b) the product of (i) 60% and (ii) the Fair Market Value (as defined in the Coach, Inc. 2004 Stock Incentive Plan...

  • Page 69
    ... compensation and benefits provided with respect to this Letter Agreement or (b) comply with the requirements of Section 409A. Notwithstanding anything herein to the contrary, if at the time of your termination of employment you are a "specified employee" as defined in Section 409A (and any related...

  • Page 70
    ... binding on you and the Company. This Letter Agreement shall be governed and construed under the internal laws of the State of New York and may be executed in several counterparts. Very truly yours, COACH, INC. By: _____ Sarah Dunn Senior VP, Human Resources Agreed and Accepted: _____ Michael...

  • Page 71
    ... been designated by the Committee as Competitive Businesses as of August 5, 2008: American Eagle Outfitters, Inc.; Burberry Group PLC; Club 21 Retail Holdings Pte. Ltd.; Nike, Inc.; Gap, Inc.; Gucci Group/PPR; J. Crew Group, Inc.; Jones Apparel Group. Inc.; Kenneth Cole Productions, Inc.; Limited...

  • Page 72
    ... the remaining 60% of the Option Shares as of such date. 1 Number (rounded to the nearest whole number) equal to (a) $3.75 million divided by (b) the product of (i) 60% and (ii) the Fair Market Value (as defined in the Coach, Inc. 2004 Stock Incentive Plan) of a share of Common Stock on the Grant...

  • Page 73
    ...(as defined in the Employment Agreement), any portion of this Option that is not vested and exercisable as of the date of such termination shall thereupon be forfeited; propided, that in the alternative the Human Resources Committee (the " Committee ") of the Company's Board of Directors may, in its...

  • Page 74
    ...as amended, the rules and regulations promulgated thereunder, any other state or federal law, or the laws of any other country. The Company reserves the right to place restrictions required by law on Common Stock received by you pursuant to this Option. 11. Conformity with the Plan . This Option is...

  • Page 75
    ... of any of the Coach Companies to terminate your employment at any time with or without cause. 13. Miscellaneous . (a) Amendment or Modifications . The grant of this Option is documented by the minutes of the Committee, which records are the final determinant of the number of shares granted and the...

  • Page 76
    ...at the time of your termination of employment you are a "specified employee" as defined in Section 409A (and any related regulations or other pronouncements thereunder) and the deferral of any payments otherwise payable hereunder as a result of such termination of employment is necessary in order to...

  • Page 77
    ...witness whereof, the parties hereto have executed and delivered this agreement. COACH, INC. _____ Sarah Dunn Senior Vice President, Human Resources Date: August 5, 2008 I acknowledge that I have read and understand the terms and conditions of this Agreement and of the Plan and I agree to be bound...

  • Page 78
    ... Date, the Human Resources Committee (the " Committee ") of the Company's Board of Directors will release the portion of the Award that has become vested as of such Vesting Date. Applicable withholding taxes will be settled by withholding a number of shares of Coach, Inc. common stock with a market...

  • Page 79
    ... or prior to the date of such termination shall continue to become vested as of the dates set forth in Section 2. (c) Termination for Cause or without Good Reason . If your employment is terminated by the Company for Cause or by you without Good Reason (including without limitation by reason of your...

  • Page 80
    ... of any of the Coach Companies to terminate your employment at any time with or without cause. 10. Miscellaneous . (a) Amendment or Modifications . The grant of the Award is documented by the minutes of the Committee, which records are the final determinant of the number of shares granted and the...

  • Page 81
    ...at the time of your termination of employment you are a "specified employee" as defined in Section 409A (and any related regulations or other pronouncements thereunder) and the deferral of any payments otherwise payable hereunder as a result of such termination of employment is necessary in order to...

  • Page 82
    ...witness whereof, the parties hereto have executed and delivered this agreement. COACH, INC. _____ Sarah Dunn Senior Vice President, Human Resources Date: August 5, 2008 I acknowledge that I have read and understand the terms and conditions of this Agreement and of the Plan and I agree to be bound...

  • Page 83
    Agreement Bauman 34th Street, LLC and Goldberg 34th Street, LLC Seller and 504-514 West 34th Street Corp. Buyer _____ Property 516 West 34th Street New York, NY 10001 _____ Date: July __, 2008

  • Page 84
    Table of Contents Page 1. 2. 3. 4. Basic Terms and Definitions The Property Purchase Price Apportionments; Miscellaneous Payments Title 1 2 2 2 4 5. 6. 7. 8. 9. 10. Closing; Consent of Lender Closing Deliveries Representations 6 7 8 10 Condition of the Property Risk of Loss Default 11 12 12...

  • Page 85
    ... 1.7 Escrow Agent. Goulston & Storrs, P.C. 1.8 Closing Date. The date which is seven business days following the date Seller obtains the consent of the holder of the Loan Documents ("Lender"), subject to Subsection 6.1.2. 1.9 Closing Location. Goulston & Storrs, P.C., 750 Third Avenue, New York, NY...

  • Page 86
    ... on the execution and delivery of this Agreement by Buyer, by certified check of Buyer or official bank check drawn on or by a bank which is a member of the New York Clearing House Association, L.L.C. to the order of Escrow Agent, or, at Seller's option, by a wire transfer to the account of Escrow...

  • Page 87
    ... by Buyer. (b) Unbilled Rents. At the Closing, Seller shall deliver to Buyer a list of all Rents payable under the Leases which are either billed but not due, or are unbilled, as of the Closing Date. To the extent such Rents are unbilled, the list shall contain only a description of the nature...

  • Page 88
    ... the Service Contracts. 4.1.5 Fuel. Fuel (including sales tax) based on a reading obtained by Seller and the last price paid by Seller for fuel. 4.1.6 Employees . Salaries, wages, payroll costs and taxes, vacation pay, union benefits and other fringe benefits, including, without limitation, welfare...

  • Page 89
    ...in this Agreement, the apportionments shall be made as of the date immediately preceding the Closing Date and otherwise in accordance with the customs in respect to title closings recommended by the Real Estate Board of New York, Inc. 4.4 Errors. Any errors in calculating the apportionments shall be...

  • Page 90
    .... Any obligations affecting the Property incurred under the Emergency Repairs provisions of the Administrative Code of the City of New York (Sections 564-18.0, etc.) prior to the Closing shall be paid by Seller. 5.6 Assessments . If, on the Closing Date, the Land or the Improvements are affected by...

  • Page 91
    ...the escrow provisions of this Agreement and the original Escrow Agent shall be released from all liabilities and obligations under this Agreement. (iii) The Closing of the Goldberg Seller interest shall occur at a Closing Location in New York City designated by Buyer's lender or, if none, Goldberg...

  • Page 92
    ..., to record the memorandum. If the Closing of the Goldberg Interest shall not occur and this Agreement is terminated, Buyer shall promptly return the original memorandum, if not recorded or, if recorded, execute, acknowledge and record a cancellation of the memorandum. (e) Buyer shall otherwise...

  • Page 93
    ... the original Consent Date. 6.2.2 Promptly following the execution and delivery of this Agreement Seller shall request the Consent. Seller and Buyer shall (a) furnish the information, documents and other items required by the Loan Documents or Lender, including financial statements, (b) execute and...

  • Page 94
    ... that Seller is not a "foreign person" as such term is defined in Section 1445 of the Internal Revenue Code of 1984, as amended, and the regulations thereunder, in the form required thereby. (e) Notices to the tenants under the Leases signed by Seller and Buyer advising the tenants of the conveyance...

  • Page 95
    ...the foregoing, if prior to the Closing Date any tenant under a Lease shall default under its Lease or any Lease is terminated (other than pursuant to a voluntarily termination by Seller), Buyer's obligation to accept title to the Property and to pay the full Purchase Price shall not be affected, and...

  • Page 96
    ...of Buyer, and their salaries and any applicable collective bargaining or other agreements is attached to this Agreement as Exhibit E. On and after the Closing Date (i) Buyer shall be deemed to have assumed and to be responsible for all employment and employee benefit-related matters, obligations and...

  • Page 97
    ... rules and regulations of the Office of Foreign Assets Control, Department of the Treasury (" OFAC") and in any enabling legislation or other Executive Orders or regulations in respect thereof (the Order and such other rules, regulations, legislation, or orders are collectively called the " Orders...

  • Page 98
    ..., Department of the Treasury (" OFAC") and in any enabling legislation or other Executive Orders or regulations in respect thereof (the Order and such other rules, regulations, legislation, or orders are collectively called the " Orders"). (b) Buyer: (i) is not listed on the Specially Designated...

  • Page 99
    ...Agreement, neither Seller nor any agent or representative of Seller has made, and Seller is not liable for or bound by, any express or implied warranties, guaranties, promises, statements, inducements, representations or information pertaining to the Leases, the Service Contracts, the certificate of...

  • Page 100
    ...(an "Affiliate") which, directly or indirectly, is controlled by, controls, or under common control with, Buyer, provided that (a) Buyer gives Seller notice of the assignment not less than five business days prior to the Closing Date, accompanied by (i) an original assignment signed by Buyer and the...

  • Page 101
    ... mail, postage prepaid, return receipt requested, (c) reputable overnight delivery service, or (d) telecopy, to the Notice Addresses. Any party may, by notice given in accordance with this Section, designate a different address or person for notices or other communications. 14.2 Effectiveness...

  • Page 102
    ... refuse to comply with any demands for the Deposit and shall continue to hold the Deposit until Escrow Agent receives either (x) a notice signed by both Seller and Buyer directing the disbursement of the Deposit or (y) a final order, which is not (or is no longer) appealable, of a court of competent...

  • Page 103
    ... contrary (including any provision limiting the liability of Seller or Buyer), all costs and expenses of the litigation (including the reasonable attorneys and witness fees incurred by the other party and all costs and expenses of Escrow Agent, including reasonable attorneys fees) shall be borne by...

  • Page 104
    ... not disclose to third parties, and shall cause their officers, directors, employees, representatives, brokers, attorneys and advisers to hold in confidence and not disclose to third parties, this Agreement and its terms, and any information relating to the Property provided by Seller to Buyer in...

  • Page 105
    ... executed by Seller and Buyer on the date of this Agreement. Seller Bauman 34th Street, LLC By: Print Name: Patricia Bauman Title: Member Goldberg 34th Street, LLC By: Print Name: Jack Anfang Title: Authorized Signatory Buyer 504-514 West 34th Street Corp. By: Print Name: Title: Escrow Agent...

  • Page 106
    ...of land, situate, lying and being in the Borough of MANHATTAN, City, County and State of NEW YORK, bounded and described as follows: BEGINNING at a point on the northerly side of WEST 33RD STREET, distant 205 feet westerly from the corner formed by the intersection of the northerly side of WEST 33RD...

  • Page 107
    ...Corporation by Guaranty dated July 1, 2000. 2. Forest Electric Corp. - Lease dated August 15, 2002. Guaranteed by EMCOR Group, Inc. by Guaranty of Lease dated August 15, 2002. 3. Van Wagner Communications, LLC - Sign Lease dated December 1, 2000, amended by letter dated January 9, 2003 and currently...

  • Page 108
    ...memorandum of any Lease, and any nondisturbance agreements. 4. Real estate taxes, and water and sewer charges or rents, which are not due and payable prior to the Closing Date (subject to apportionment as provided in this Agreement). 5. Easements and rights of public utilities. 6. Assessments which...

  • Page 109
    ...Service, Inc. - Alarm Management Ready Alarm - Central Station 11. 12. 13. 14. Onyx Restoration Works - Metal Restoration Slade Industries, Inc. - Elevator Maintenance W.H. Christian & Sons, Inc. - Uniform Maintenance TouchCom - Door Card Access System 15. 16. Time Warner Cable of New York City...

  • Page 110
    ... DiLorenzo ($20.248/hr.) Commercial Building Agreement between Local 32BJ, Service Employees International Union, AFL-CIO and The Realty Advisory Board on Labor Relations, Inc., effective October 1, 2004 to December 31, 2007 and extended effective January 1, 2008 to December 31, 2011. Engineer...

  • Page 111
    ... of Mortgages and Security Agreement dated May 30, 2003 5. Assignment of Leases and Rents dated May 30, 2003 6. Indemnity Agreement 7. UCC-1 Financing Statements 8. Assignment of Agreements, Permits and Contracts 9. Cash Management Agreement 10. Clearing Account Agreement 11. Replacement Reserve...

  • Page 112
    ...%) ownership interest as a tenant-in-common with respect to the land and the building located at 516 West 34th Street, New York, New York 10001 (Block 705, Lot 46) together with all of the rights, benefits and appurtenances thereto, as is more particularly described on Exhibit A attached hereto (the...

  • Page 113
    ... of Corp, as currently in effect; (b) any federal, state, provincial, local or municipal laws, statutes, ordinances, regulations, and rules, and all orders, writs, injunctions, awards, judgments and decrees applicable to the assets, properties and business (and any regulations promulgated thereunder...

  • Page 114
    ... Financial Officer of Coach, each acting alone, are designated as authorized agents on behalf of Coach, in its capacity as Corp Representative. (ii) Corp hereby grants to the Corp Representative full authority to execute, deliver, acknowledge, certify, file and record on behalf of Corp (in the name...

  • Page 115
    ... President and General Counsel of Coach and Michael F. Devine, III, Executive Vice President and Chief Financial Officer of Coach, each acting alone, are designated as authorized agents on behalf of Coach, in its capacity as Corp Representative. (b) Representative of Goldberg. (i) Goldberg hereby...

  • Page 116
    ...members of Goldberg and any dissolution of Goldberg. (iv) Goldberg shall be entitled to change the Goldberg Representative and such change shall be effective upon providing written notice to the Corp Representative of the name and contact information for the new Goldberg Representative (the "Change...

  • Page 117
    ...10174 Attention: Lester N. Henner, Esq. Elaine M. Reich, Esq. If to the Corp Representative, to: Coach, Inc. 516 West 34th Street New York, NY 10001 Attention: Michael F. Devine, III, Executive Vice President and Chief Financial Officer Todd Kahn, Senior Vice President and General Counsel -xii-

  • Page 118
    ...time to time, regardless of whether or not such business opportunities relate in any way to the Property or are competitive in any way with the ownership and/or management and operation... over such party, consents to service of process in any manner authorized by New York law, and agrees that a final...

  • Page 119
    ... a Landlord under the Net Lease. (n) Closing Under Contract of Sale . The terms and conditions of this Agreement to the contrary notwithstanding, no default or breach by the Corp or Goldberg, as the case may be, shall relieve the other party of the obligation to sell and purchase (respectively) the...

  • Page 120
    ... the Wall Street Journal, or (ii) the highest rate permitted by law on any amounts paid more than ten (10) days after same is due, which interest shall be paid for the period commencing on the date such amount is due and ending on the date same is paid. In addition, if any amounts...

  • Page 121
    ...situate, lying and being in the Borough of MANHATTAN, City, County and State of NEW YORK, bounded and described as follows: BEGINNING at a point... on the northerly side of WEST 33RD STREET, distant 205 feet westerly from the corner formed...

  • Page 122
    Exhibit H NET LEASE AGREEMENT By and Between GOLDBERG 34TH STREET LLC AND 504-514 WEST 34TH STREET CORP. as Tenants-in-Common and 504-514 WEST 34TH STREET CORP. as Tenant Dated as of: July __, 2008 Property Location: 516 West 34th Street -xvii-

  • Page 123
    ... between GOLDBERG, 34 TH STREET LLC ("Goldberg") and 504-514 WEST 34 TH STREET CORP. ("504"), as tenants-in-common, having an address at 516 West 34th Street, New York, NY 10001 ("Landlord") and 504-514 WEST 34TH STREET CORP ., having an office at 516 West 34th Street, New York, NY 10001 ("Tenant").

  • Page 124
    ... Date, Tenant shall be responsible for all costs of every nature and kind relating to the ownership, maintenance, repair, replacement, and operation of the building, and all other similar costs, including, without limitation the following: (i) Tenant shall be required to arrange and pay for directly...

  • Page 125
    ...II) Tenant shall deliver to Landlord such policies or certificates of such policies (in form reasonably acceptable to landlord) prior to the commencement of the term of this Lease. Tenant shall procure and pay for renewals of such insurance from time to time before the expiration thereof, and Tenant...

  • Page 126
    ...real estate fiscal tax year of the City of New York shall be changed during the term of this Lease, any Taxes for a real estate fiscal tax year, a part of which is included within a particular Tax year and a part of which is not so included, shall be apportioned on the basis of the number of days in...

  • Page 127
    ...Tenant, or consented to or requested by Tenant. Repairs and Maintenance . Subject to Section 3.3 above, (a) Tenant, at its sole cost and expense, shall be solely responsible for the Premises and all fixtures, equipment, machinery and apparatus (including but not limited to heating, air-conditioning...

  • Page 128
    ... the public utility company servicing the Premises for the furnishing of, and payment of all charges for all utilities of every kind consumed by Tenant in the Premises. All electricity consumed by any of the foregoing utilities or systems shall be paid for by Tenant. ARTICSE 5. END OP TERM Section...

  • Page 129
    ... represents and warrants that as of the date hereof there are no ground or underlying leases covering the whole or any portion of the Building. Intentionally Omitted. Landlord covenants that, during the term of this Lease, it will not encumber the property with any mortgages, liens, ground leases...

  • Page 130
    ... of cancellation of this Lease upon Tenant, and upon the expiration of said five (5) days this Lease and the term thereunder shall end and expire as fully and completely as if the expiration of such five (5) day period were the day herein definitely fixed for the end and expiration of this Lease and...

  • Page 131
    ...ending on the date same as paid. In addition, if any amounts of Rent due and payable under Section 3.1 hereof shall remain past due for more than thirty (30) days, Tenant shall pay...two times the fixed rent and additional rent payable under this lease for the last year of the term of this Lease (which...

  • Page 132
    ... to all of the terms of this Lease. Notwithstanding any such subletting...fixed rent and additional rent due and to become due under this Lease and for the performance of all Tenant's obligations under this Lease...Lease shall be directed as follows: To Tenant: Coach, Inc. 516 West 34th Street New York...

  • Page 133
    ..., return receipt requested, postage prepaid, hand delivered or sent via a nationally recognized next day courier service (such as Federal Express, DHL, etc.) addressed to the party intended to be notified at the address set forth above. Either party may, at any time, or from time to time, notify...

  • Page 134
    ... days after receipt of Landlord's or Tenant's request ("Requesting Party"), Landlord or Tenant, as the case may be ("Answering Party"), shall execute and deliver to the Requesting Party a declaration to any person designated by such party: (i) stating the Commencement Date and Expiration Date of the...

  • Page 135
    ... Law. This Lease shall be construed under the internal laws of the State of New York. Section 15.11 Holding Over. If Tenant remains in possession of all or any part of the Premises after the expiration of the Term: (a) such tenancy will be deemed to be a periodic tenancy from month-to-month only...

  • Page 136
    .... Section 15.16 Corporate Authority. Landlord and Tenant represent and warrant to each other that their respective Board of Directors have duly authorized the execution of this Lease. Section 15.17 No Owner Liability . Landlord, its partners, members, officers, directors and principals, disclosed...

  • Page 137
    ... to be payable in all events unless the obligations to pay the same shall be terminated pursuant to the express provisions of this Lease; and Tenant covenants and agrees that it will remain obligated under this Lease in accordance with its terms, and, except as may be expressly authorized by the...

  • Page 138
    IN WITNESS WHEREOF, Landlord and Tenant have signed this Lease as of the date and year first above written. LANDLORD: GOLDBERG 34TH STREET LLC By: _____ Name: Title: 504-514 WEST 34TH STREET CORP. By: _____ Name: Title: TENANT: 504-514 WEST 34TH STREET CORP. By: _____ Name: Title: -16-

  • Page 139
    ...situate, lying and being in the Borough of MANHATTAN, City, County and State of NEW YORK, bounded and described as follows: BEGINNING at a point... on the northerly side of WEST 33RD STREET, distant 205 feet westerly from the corner formed...

  • Page 140
    ... B With closing in September Rent Schedule Month Rent Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Month 13 Month 14 Month 15 Month 16 Month 17 Month 18 Month 19 Month 20 Month 21 Month 22 Month 23 Month 24 Month 25 and each month thereafter...

  • Page 141
    ...Delivery 504-514 West 34th Street Corp. c/o Coach, Inc. 516 West 34th Street New York, NY 10001 Attention: Todd Kahn, General Counsel July __, 2008 Re: Net Lease... pursuant to the terms of the loan documents relating to the Debt Obligation, then 504-514 Corp. shall pay all costs in connection with ...

  • Page 142
    ... Corp. July __, 2008 Page 2 Please acknowledge your agreement to the provisions of this Letter Agreement by signing this Letter Agreement where indicated below. Very truly yours, GOLDBERG 34TH STREET LLC By: _____ Name: Title: Accepted and agreed this ____ day of July 2008: 504-514 WEST 34TH...

  • Page 143
    ... 6. Coach Japan Investments, Inc. (Delaware) 7. 8. Coach Stores Canada Inc. (Canada) Coach International Holdings, Inc. (Cayman Islands) 9. Coach Consulting (Shenzhen) Co. Limited (China) 10. Coach Shanghai Limited (China) 11. Coach International Limited (Hong Kong) 12. Coach Manufacturing Limited...

  • Page 144
    ... No. 48, "Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement 109") and the effectiveness of Coach, Inc. and subsidiariesr internal control over financial reporting, appearing in this Annual Report on Form 10-K of Coach, Inc. and subsidiaries for the year ended June 28...

  • Page 145
    ... the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who...

  • Page 146
    ... information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: August 21, 2008 By: Name: Title: /s/ Michael F. Devine, III Michael F. Devine, III Executive...

  • Page 147
    ...and (ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Date: August 21, 2008 By: Name: Title: /s/ Lew Frankfort Lew Frankfort Chairman and Chief Executive Officer Pursuant to 18 U.S.C. § 1350...