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8-K
ABERCROMBIE & FITCH CO /DE/ filed this Form 8-K on 06/18/2012
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Form 8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): June 14, 2012

 

 

ABERCROMBIE & FITCH CO.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   1-12107   31-1469076

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

6301 Fitch Path, New Albany, Ohio 43054

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code (614) 283-6500

Not Applicable

(Former name or former address, if changed since last report.)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Re-Approval of Incentive Compensation Performance Plan

At the 2012 Annual Meeting of Stockholders held on June 14, 2012 (the “2012 Annual Meeting”), the stockholders of Abercrombie & Fitch Co. (the “Company”) re-approved the Abercrombie & Fitch Co. Incentive Compensation Performance Plan (the “Incentive Plan”). The Incentive Plan is a cash-based incentive plan that allows the Company to grant awards that are intended to satisfy the requirements of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”).

The Incentive Plan is administered by the Compensation Committee of the Board of Directors of the Company. The Compensation Committee has the authority to select participants in the Incentive Plan from among the Company’s key associates and to determine the performance goals, target amounts and other terms and conditions of awards under the Incentive Plan.

The Company’s associates with significant operating and financial responsibility and who are likely to be “covered employees” (within the meaning of Code Section 162(m)) for the relevant fiscal year, are eligible to earn seasonal or annual cash incentive compensation payments to be paid under the Incentive Plan. In addition, all associates of the Company selected to participate for a given fiscal year will be eligible to earn seasonal or annual cash incentive compensation under the Incentive Plan.

In respect of each Spring and/or Fall selling season or fiscal year, the Compensation Committee may establish performance goals for the Company as described in the Incentive Plan. Annual incentive compensation targets may be established for eligible associates ranging from 5% to 150% of base salary. The target incentive compensation percentage for each associate will be based on the level and functional responsibility of his or her position, size of the business for which the associate is responsible and competitive practices. Associates may earn their target incentive compensation if the pre-established performance goals are achieved. The amount of incentive compensation paid to participating associates may range from zero to double their targets, based upon the extent to which performance goals are achieved or exceeded. The maximum dollar amount which may be paid for any one year under the Incentive Plan to any participant is $5,000,000.

A description of the material terms of the Incentive Plan, including the performance goals which may be applied under the Incentive Plan, was included in the Company’s definitive Proxy Statement, dated May 11, 2012 (the “2012 Proxy Statement”), filed with the Securities and Exchange Commission on May 11, 2012, under the caption “PROPOSAL 4 – RE-APPROVAL OF THE ABERCROMBIE & FITCH CO. INCENTIVE COMPENSATION PERFORMANCE PLAN,” beginning on page 74 of the 2012 Proxy Statement, which description is incorporated herein by reference. The foregoing description of the Incentive Plan is qualified in its entirety by reference to the actual terms of the Incentive Plan, which is included with this Current Report on Form 8-K as Exhibit 10.1.

Item 5.07. Submission of Matters to a Vote of Security Holders.

The Company held its 2012 Annual Meeting on June 14, 2012 at its home office located at 6301 Fitch Path, New Albany, Ohio. At the close of business on April 25, 2012, the record date for the 2012 Annual Meeting, there were a total of 82,655,406 shares of Class A Common Stock outstanding and entitled to vote. At the 2012 Annual Meeting, 72,702,233 or 87.96% of the outstanding shares of Class A Common Stock entitled to vote were represented by proxy or in person and, therefore, a quorum was present.

 

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The vote on the proposals presented for stockholder vote at the 2012 Annual Meeting was as follows:

Proposal 1 — Election of Directors.

 

     Votes For      Votes Against      Abstentions      Broker
Non-Votes
 

Class of 2013

           

James B. Bachmann

     62,452,445         1,857,048         2,273,669         6,119,071   

Michael S. Jeffries

     61,487,331         2,807,470         2,288,361         6,119,071   

John W. Kessler

     56,427,816         7,881,440         2,273,906         6,119,071   

Each of James B. Bachmann, Michael S. Jeffries and John W. Kessler was elected as a director of the Company to serve for a term of one year to expire at the Annual Meeting of Stockholders to be held in 2013.

Proposal 2 — Approval of the Advisory Resolution on Executive Compensation.

 

     Votes For      Votes Against      Abstentions      Broker
Non-Votes
 

Beneficial Holders of Class A Common Stock

     15,722,701         48,525,899         2,291,177         6,119,071   

Registered Holders of Class A Common Stock

     32,372         9,919         1,094         N/A   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

     15,755,073         48,535,818         2,292,271         6,119,071   
  

 

 

    

 

 

    

 

 

    

 

 

 

Proposal 3 — Ratification of Appointment of PricewaterhouseCoopers LLP as the Independent Registered Public Accounting Firm of the Company for the fiscal year ending February 2, 2013.

 

     Votes For      Votes Against      Abstentions      Broker
Non-Votes
 

Beneficial Holders of Class A Common Stock

     69,872,154         506,776         2,279,918         N/A   

Registered Holders of Class A Common Stock

     41,604         320         1,461         N/A   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

     69,913,758         507,096         2,281,379         N/A   
  

 

 

    

 

 

    

 

 

    

 

 

 

Proposal 4 — Re-Approval of the Abercrombie & Fitch Co. Incentive Compensation Performance Plan.

 

     Votes For      Votes Against      Abstentions      Broker
Non-Votes
 

Beneficial Holders of Class A Common Stock

     62,770,617         1,469,386         2,299,774         6,119,071   

Registered Holders of Class A Common Stock

     28,518         11,505         3,362         N/A   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

     62,799,135         1,480,891         2,303,136         6,119,071   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

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Item 8.01. Other Events.

Following discussions with several of its largest stockholders and other key stakeholders in the weeks and months leading up to its 2012 Annual Meeting, the Company announced on June 18, 2012, that the Compensation Committee and Michael S. Jeffries, the Company’s Chief Executive Officer, had entered into negotiations in good faith to further amend the Employment Agreement between the Company and Mr. Jeffries, which was last amended on May 7, 2012. Pursuant to the Employment Agreement, Mr. Jeffries has been eligible to receive two equity grants in respect of each fiscal year of the term of the agreement starting with Fiscal 2009 (the “Semi-Annual Grants”).

Subject to negotiation of the proposed amendment with the Compensation Committee, Mr. Jeffries would forego any remaining Semi-Annual Grants under his Employment Agreement. Instead, Mr. Jeffries would be eligible to receive long-term incentive equity awards in connection with the normal cycle of annual grants made to the other named executive officers of the Company. It is contemplated that such awards would be in amounts and pursuant to terms determined by the Compensation Committee, in consultation with its independent advisors, in light of current best practices.

In connection with the announcement, the Company reiterated its commitment, made prior to the 2011 Annual Meeting of Stockholders, to continue to enhance its proxy statement disclosure regarding equity awards and to add additional transparency regarding the Compensation Committee’s decision-making process in granting such awards. In fiscal 2012, the Compensation Committee added Performance Share Awards to the total mix of long-term equity awards for the Company’s Executive Vice Presidents. In line with evolving best practices, the Compensation Committee and the Company anticipate that such awards will comprise an increased percentage of the mix of long-term equity awards granted to named executive officers in future fiscal years.

Item 9.01. Financial Statements and Exhibits.

(a) through (c)         Not applicable

 

  (d) Exhibits:

The following exhibit is included with this Current Report on Form 8-K:

 

Exhibit No.

  

Description

10.1    Abercrombie & Fitch Co. Incentive Compensation Performance Plan

[Remainder of page intentionally left blank; signature on following page]

 

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

    ABERCROMBIE & FITCH CO.
Dated: June 18, 2012     By:   /s/ Ronald A. Robins, Jr.
     

Ronald A. Robins, Jr.

Senior Vice President, General Counsel and Secretary

 

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INDEX TO EXHIBITS

 

Exhibit No.   

Description

   Location
10.1
   Abercrombie & Fitch Co. Incentive Compensation Performance Plan    Filed herewith

 

6

EX-10.1

Exhibit 10.1

ABERCROMBIE & FITCH CO.

INCENTIVE COMPENSATION PERFORMANCE PLAN

The Abercrombie & Fitch Co. Incentive Compensation Performance Plan (the “Incentive Plan”) is intended to satisfy the applicable provisions of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”). The Incentive Plan shall be administered by the Compensation Committee (the “Committee”) of the Board of Directors of Abercrombie & Fitch Co. (the “Company”), which is intended to consist solely of “outside directors” as such term is defined in Section 162(m) of the Code. The Committee shall select those key executives of the Company with significant operating and financial responsibility and who are likely to be “covered employees” (within the meaning of Section 162(m) of the Code) for the relevant fiscal year, to be eligible to earn seasonal or annual cash incentive compensation payments to be paid under the Incentive Plan. In addition, all associates of the Company selected to participate for a given fiscal year shall be eligible to earn seasonal or annual cash incentive compensation under the Incentive Plan.

In respect of each Spring and/or Fall selling season or fiscal year, the Committee may establish performance goals for the Company. For purposes of the Incentive Plan, a “performance goal” shall mean any one or more of the following business criteria, either individually, alternatively or in any combination, applied to either the Company as a whole or to a business unit or subsidiary, either individually, alternatively or in any combination, and measured either annually or cumulatively over a period of years, on an absolute basis or relative to a pre-established target, to previous years’ results or to a designated comparison group, in each case as specified by the Committee: (i) gross sales, net sales, or comparable store sales; (ii) gross margin, cost of goods sold, mark-ups or mark-downs; (iii) selling, general and administrative expenses; (iv) operating income, earnings from operations, earnings before or after taxes, earnings before or after interest, depreciation, amortization, or extraordinary or special items; (v) net income or net income per common share (basic or diluted); (vi) inventory turnover or inventory shrinkage; (vii) return on assets, return on investment, return on capital, or return on equity; (viii) cash flow, free cash flow, cash flow return on investment, or net cash provided by operations; (ix) economic profit or economic value created; (x) stock price or total stockholder return; and (xi) market penetration, geographic expansion or new concept development; customer satisfaction; staffing; diversity; training and development; succession planning; employee satisfaction; acquisitions or divestitures of subsidiaries, affiliates or joint ventures. These factors may be adjusted by the Committee to eliminate the effects of charges for restructurings, discontinued operations, extraordinary items and all items of gain, loss or expense determined to be extraordinary or unusual in nature or infrequent in occurrence or related to the disposal of a segment of a business or related to a change in accounting principle all as determined in accordance with standards established by opinion No. 30 of the Accounting Principles Board or other applicable or successor accounting provisions, as well as the cumulative effect of accounting changes, in each case as determined in accordance with generally accepted accounting principles or identified in the Company’s financial statements or notes to the financial statements. These factors shall have a minimum performance standard below which no payments will be made, and a maximum performance standard above which no additional payments will be made. These performance goals may (but need not) be based on an analysis of historical performance and growth expectations for the Company, financial results of other comparable businesses and progress toward achieving the Company’s long-range strategic plan. These performance goals and determination of results shall be based entirely on objective measures. The Committee may not use any discretion to modify award results except as permitted under Section 162(m) of the Code.


Annual incentive compensation targets may be established for eligible executives ranging from 5% to 150% of base salary. Executives may earn their target incentive compensation if the pre-established performance goals are achieved. The target incentive compensation percentage for each executive will be based on the level and functional responsibility of his or her position, size of the business for which the executive is responsible and competitive practices. The amount of incentive compensation paid to participating executives may range from zero to double their targets, based upon the extent to which performance goals are achieved or exceeded. Except as otherwise permitted by Section 162(m) of the Code, the minimum level at which a participating executive will earn any incentive payment, and the level at which an executive will earn the maximum incentive payment of double the target, must be established by the Committee no later than before 25% of the applicable bonus period has elapsed (or, if less, 90 days of such bonus period have elapsed). Actual payouts must be based on either a straight-line or pre-established graded interpolation based on these minimum and maximum levels and the performance goals. The Committee may, in its sole discretion, adjust payouts downward from the amount a covered employee is entitled to receive under the applicable formula.

At such time as it shall determine appropriate following the conclusion of each bonus period, the Committee shall certify, in writing, that the applicable performance goals were satisfied and the amount of a covered employee’s cash incentive compensation for such bonus period. No payments shall be made under the Incentive Plan until such certification has been made. Any payments under the Incentive Plan shall in all events be paid no later than the fifteenth day of the third month following the end of the fiscal year in which the applicable bonus period ends.

The maximum dollar amount to be paid for any year under the Incentive Plan to any participant may not exceed $5,000,000.

The Board may, from time to time, alter, amend, suspend or terminate the Incentive Plan as it shall deem advisable, subject to any requirement for stockholder approval imposed by applicable law, including Section 162(m) of the Code. No amendments to, or termination of, the Incentive Plan shall in any way impair the rights of a covered employee under any award previously granted without such employee’s consent.

If at any time after the date on which an Incentive Plan participant has received payments under the Incentive Plan pursuant to the achievement of a performance goal, the Committee determines that the earlier determination as to the achievement of the performance goal was based on incorrect data and that in fact the performance goal had not been achieved or had been achieved to a lesser extent than originally determined and a portion of such payment would not have been paid, given the correct data, then such portion of any such payment paid to the Incentive Plan participant shall be paid by such participant to the Company upon notice from the Company as provided by the Committee.

 

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