Lululemon 2010 Annual Report Download - page 72

Table of Contents
lululemon athletica inc. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Borrowings under the credit facility can be made either as i) Revolving Loans — Revolving loan borrowings
will bear interest at a rate equal to the Bank’s CDN$ or USD$ annual base rate (defined as zero% plus the lender’s
annual prime rate) per annum, ii) Offshore Loans — Offshore rate loan borrowings will bear interest at a rate equal
to a base rate based upon LIBOR for the applicable interest period, plus 1.125 percent per annum, iii) Bankers
Acceptances — Bankers acceptance borrowings will bear interest at the bankers acceptance rate plus 1.125 percent
per annum and iv) Letters of Credit and Letters of Guarantee — Borrowings drawn down under letters of credit or
guarantee issued by the banks will bear a 1.125 percent per annum fee.
At January 30, 2011, there were no borrowings outstanding under this credit facility. As well, at January 30,
2011, letters of credit totaling USD$nil and guarantees totaling USD$1,466 had been issued under the facility, which
reduced the amount available by a corresponding amount.
Authorized share capital
As part of the reorganization in connection with the Company’s 2007 initial public offering (“the
reorganization”), the Company’s stockholders approved an amended and restated certificate of incorporation that
provides for the issuance of up to 200,000 shares of common stock, 5,000 shares of undesignated preferred stock and
30,000 shares of special voting stock.
The holders of the special voting stock are entitled to one vote for each share held. The special voting shares are
not entitled to receive dividends or distributions or receive any consideration in the event of a liquidation, dissolution
or wind-up. To the extent that exchangeable shares as described below are exchanged for common stock, a
corresponding number of special voting shares will be cancelled without consideration.
The holders of the exchangeable shares have dividend and liquidation rights equivalent to those of holders of the
common shares of the Company. The exchangeable shares can be converted on a one for one basis by the holder at
any time into common shares of the Company plus a cash payment for any accrued and unpaid dividends. Holders of
exchangeable shares are entitled to the same or economically equivalent dividend as declared on the common stock
of the Company. The exchangeable shares are non-voting. The Company has the right to convert the exchangeable
shares into common shares of the Company at any time after the earlier of July 26, 2047, the date on which less than
2,094 exchangeable shares are outstanding or in the event of certain events such as a change in control.
Share option plans
The Company’s employees participate in various stock-
based compensation plans which are either provided by a
principal stockholder of the Company or the Company.
During the year ended January 31, 2006, LIPO and LIPO USA, entities controlled by a principal stockholder of
the Company, created a stockholder sponsored stock-based compensation plans (“LIPO Plans”) for certain eligible
employees of the Company in order to provide incentive to increase stockholder value. Under the provisions of the
LIPO plans, the eligible employees were granted options to acquire shares of LIPO and LIPO USA, respectively.
LIPO and LIPO USA held shares in LACI and the Company, respectively. Shares of the Company that are or will be
issued to holders of the options or restricted shares under the LIPO Plans are currently held by LIPO USA, an
affiliate of a principal stockholder. The exercise, vesting or forfeiture of any of these awards will not have any impact
on the outstanding common shares of the Company.
In July 2007, the Company’s Board of Directors adopted, and the Company’s stockholders approved the 2007
Equity Incentive Plan (“2007 Plan”). The 2007 Plan provides for the grants of stock options, stock appreciation
rights, performance stock units, restricted stock or restricted stock units to employees (including officers and
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STOCKHOLDERS
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EQUITY
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STOCK
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BASED COMPENSATION