Lululemon 2013 Annual Report Download - page 20

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Table of Contents
In addition, we are governed by Section 203 of the Delaware General Corporation Law which, subject to some specified exceptions,
prohibits "business combinations" between a Delaware corporation and an "interested stockholder," which is generally defined as a stockholder
who becomes a beneficial owner of 15% or more of a Delaware corporation's voting stock, for a three-year period following the date that the
stockholder became an interested stockholder. Section 203 could have the effect of delaying, deferring or preventing a change in control that our
stockholders might consider to be in their best interests.
ITEM 2. PROPERTIES
Our principal executive and administrative offices are located at 1818 Cornwall Avenue, Vancouver, British Columbia, Canada, V6J 1C7.
In March 2011, we purchased the building that currently houses our administrative offices and in October 2012 we purchased additional space in
Vancouver, BC for our administrative offices. We currently operate three distribution centers located in Vancouver, British Columbia, Sumner,
Washington, and Melbourne, Victoria. In November 2013 we purchased a distribution center in Columbus, Ohio and will commence operations
in mid-2014. We expect that our current administrative offices and distribution centers are sufficient for our expansion plans for the foreseeable
future.
The general location, use, approximate size and lease renewal date of our properties at February 2, 2014 , are set forth below:
As of February 2, 2014 , we leased approximately 734,000 gross square feet relating to 252 of our 254 corporate-owned stores. Our leases
generally have initial terms of between five and 10 years, and generally can be extended only in five-year increments, if at all. All of our leases
require a fixed annual rent, and most require the payment of additional rent if store sales exceed a negotiated amount. Generally, our leases are
"net" leases, which require us to pay all of the cost of insurance, taxes, maintenance and utilities. We generally cannot cancel these leases at our
option.
ITEM 3. LEGAL PROCEEDINGS
On October 25, 2013, plaintiff Laborers' District Council Industry Pension Fund filed a books-and-records action entitled Laborers'
District Council Construction Industry Pension Fund v. lululemon athletica inc.,
No. 9039 (Del. Ch.) under 7 Del. C. Sec. 220 based on a
demand letter it sent to us on or around August 8, 2013 to request certain lululemon records relating to the March 2013 sheer Luon issue, our
announcement that our then CEO, Christine Day, intends to resign, and certain stock trades executed by the Chairman of our board of directors,
Mr. Wilson, prior to our announcement regarding our former CEO, Christine Day. We moved to dismiss the complaint on November 11, 2013,
and the motion remains pending. We believe there is no merit to plaintiff's claims and we intend to continue to defend vigorously.
On August 12, 2103 and August 23, 2013, plaintiffs Thomas Canty and Tammy Federman filed shareholder derivative actions entitled
Canty v. Day , et al., No. 13-CV-5629 (S.D.N.Y.) and Federman v. Day, et al., No. 13-CV-5977 (S.D.N.Y.). Plaintiffs allege that they are acting
on behalf of us and name as defendants our current and former directors and certain officers. On January 17, 2014, plaintiffs filed an amended
complaint, operative in both actions. In that amended complaint, plaintiffs challenge certain public disclosures and conduct relating to the March
2013 sheer Luon issue, the June 2013 announcement of the resignation of our former CEO, Christine Day, and certain stock trades executed by
Mr. Wilson and Ms. Day in the months leading up to that announcement. Plaintiffs allege violations of Section 14(a) of the Securities Exchange
Act and breach of fiduciary duty, unjust enrichment, abuse of control, and gross mismanagement. Defendants believe there is no merit to
plaintiffs' claims and have moved to dismiss both lawsuits.
15
•
prohibiting stockholder action by written consent; and
• our stockholders must comply with advance notice procedures in order to nominate candidates for election to our board of directors or
to place stockholder proposals on the agenda for consideration at any meeting of our stockholders.
Location
Use
Approximate
Square Feet
Lease Renewal Date
Sumner, WA
Distribution Center
167,000
April 2020
Columbus, OH
Distribution Center (Intended)
307,000
n/a
Vancouver, BC
Distribution Center
120,000
November 2017
Vancouver, BC
Executive and Administrative Offices
78,000
n/a
Vancouver, BC
Executive and Administrative Offices
15,000
n/a
Melbourne, VIC
Distribution Center
54,000
September 2016
Melbourne, VIC
Executive and Administrative Offices
28,000
September 2019