Incentive Compensation Performance Plan - Abercrombie & Fitch Co.
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"). 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 respect of each Spring and/or Fall selling season or fiscal year, the
Committee may establish performance goals for the Company. The performance goals
selected by the Committee shall be based on any one or more of the following:
price of the Company's Class A Common Stock, stockholder return, return on
equity, return on investment, return on capital, sales productivity, comparable
store sales growth, economic profit, economic value added, net income, operating
income, gross margin, sales, free cash flow, earnings per share or market share.
These factors shall have a minimum performance standard below which, and a
maximum performance standard above which, no payments will be made. These
performance goals may 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 financial 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 10% 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 bear
the maximum incentive payment of double the target, must be established by the
Committee prior to the commencement of each bonus period. 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 maximum dollar amount to be paid for any year under the Incentive Plan
to any participant may not exceed $3,000,000.