Coach 2009 Annual Report Download - page 56

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TABLE OF CONTENTS
COACH, INC.
Notes to Consolidated Financial Statements
(dollars and shares in thousands, except per share data)
3. ACQUISITIONS – (continued)
Prior to these acquisitions, the ImagineX group operated eight retail and department store locations in Hong Kong, two retail locations in
Macau, and 15 retail locations in mainland China. The strength of the going concern and the established locations supported a premium
above the fair value of the individual assets acquired. Unaudited pro forma information related to these acquisitions is not included as the
impact of these transactions is not material to the consolidated results of the Company.
4. SHARE-BASED COMPENSATION
The Company maintains several share-based compensation plans which are more fully described below. The following table shows the
total compensation cost charged against income for these plans and the related tax benefits recognized in the income statement:
Fiscal Year Ended
July 3,
2010
June 27,
2009
June 28,
2008
Share-based compensation expense $ 81,420 $ 67,542 $ 66,979
Income tax benefit related to share-based compensation
expense
28,446 23,920 24,854
Coach Stock-Based Plans
Coach maintains the 2000 Stock Incentive Plan, the 2000 Non-Employee Director Stock Plan and the 2004 Stock Incentive Plan to
award stock options and shares to certain members of Coach management and the outside members of its Board of Directors (“Board”).
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 process generally vest ratably over three years. Other stock option and share awards, granted primarily for retention
purposes, are subject to forfeiture until completion of the vesting period, which ranges from one to five years. The Company issues new
shares upon the exercise of stock options, vesting of share units and employee stock purchase.
For options granted under Coach’s stock option plans prior to July 1, 2003, an active employee can receive a replacement stock option
equal to the number of shares surrendered upon a stock-for-stock exercise. The exercise price of the replacement option equals 100% of the
market value at the date of exercise of the original option and will remain exercisable for the remaining term of the original option.
Replacement stock options generally vest six months from the grant date. No replacement stock options were granted in fiscal 2010 or fiscal
2009 and 16 were granted in fiscal 2008.
52