Employment Agreement - Abercrombie & Fitch Co. and Michael S. Jeffries
EMPLOYMENT AGREEMENT
THIS AGREEMENT is entered into as of May 13, 1997, by and between
Abercrombie & Fitch Co., a Delaware company (the "Company"), and Michael S.
Jeffries (the "Executive") (hereinafter collectively referred to as "the
parties").
WHEREAS, the Executive has heretofore been employed by Abercrombie & Fitch
Services Corporation ("Services") and the Company as the President and Chief
Executive Officer of the Company and is experienced in all phases of its
business and possesses an intimate knowledge of the business and affairs of the
Company and its policies, procedures, methods and personnel; and
WHEREAS, the Company has determined that it is essential and in its best
interests to retain the services of its key management personnel and to ensure
their continued dedication and efforts; and
WHEREAS, the Board of Directors of the Company (the "Board") has determined
that it is in its best interest of the Company to secure the continued services
and employment of the Executive and the Executive is willing to render such
services on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the respective
agreements of the parties contained herein, the parties hereby agree as follows:
1. Term. The initial term of employment under this Agreement shall be for
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the period commencing on the date hereof (the "Commencement Date") and ending on
the sixth anniversary of the Commencement Date (the "Initial Term"); provided,
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however, that upon the expiration of the Initial Term, this Agreement shall be
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automatically extended for a period of one year, unless either the Company or
the Executive shall have given written notice to the other at least ninety (90)
days prior thereto that the term of this Agreement shall not be so extended.
2. Employment.
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(a) Position. The Executive shall be employed by Services and the
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Company as the President and Chief Executive Officer of the Company. The
Executive shall perform the duties, undertake the responsibilities and exercise
the authority customarily performed, undertaken and exercised by persons
employed in a similar executive capacity. The Executive shall report directly
to Leslie H. Wexner, as Chairman of the Board, or his successor as Chairman.
(b) Obligations. The Executive agrees to devote his full business
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time and attention to the business and affairs of the Company. The foregoing,
however, shall not preclude the Executive from serving on corporate, civil or
charitable boards or committees or managing personal investments, so long as
such activities do not interfere with the performance of the Executive's
responsibilities hereunder.
<PAGE>
3. Base Salary. The Company agrees to pay or cause to be paid to the
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Executive from March 2, 1997 and during the term of this Agreement a base salary
at the rate of $600,000 per year or such larger amount as the Board may from
time to time determine (hereinafter referred to as the "Base Salary"). Such
Base Salary shall be payable in accordance with the Company's customary
practices applicable to its executives.
4. Equity Compensation. Subject to approval of the Company's 1997 Stock
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Option and Performance Incentive Plan by the Company's stockholders at the
annual meeting of stockholders on May 20, 1997, the Company shall grant to the
Executive rights to receive 500,000 shares of Class A Common Stock of the
Company and options to acquire an aggregate of 1,000,000 shares of Class A
Common Stock of the Company pursuant to the terms of the agreements attached
hereto as Exhibits A, B and C. The Company shall use its reasonable best
efforts to maintain and keep current a Form S-8 (or any successor form) pursuant
to which such shares of Common Stock shall be registered.
5. Employee Benefits. The Executive shall be entitled to participate in all
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employee benefit plans, practices and programs maintained by the Company and
made available to senior executives generally and as may be in effect from time
to time. The Executive's participation in such plans, practices and programs
shall be on the same basis and terms as are applicable to senior executives of
the Company generally.
6. Bonus. The Executive shall be entitled to participate in the Company's
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Incentive Compensation Plan on such terms and conditions as may be determined
from time to time by the Board, provided that the Executive's bonus opportunity
shall be at least 100% of Base Salary upon attainment of target.
7. Other Benefits.
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(a) Life Insurance.
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(1) The Company shall maintain term life insurance coverage on the
life of the Executive in the amount of $10,000,000 the proceeds of which shall
be payable to the beneficiary or beneficiaries designated by the Executive. The
Company shall pay the premiums with respect to such term life insurance policy
for a period of eight (8) years commencing on the Commencement Date; provided,
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however, that the Company shall no longer be obligated to maintain such coverage
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and pay such premiums in the event that the Executive's employment is or was
terminated by the Company with Cause (as defined in Section 9(b) hereof) or by
the Executive without Good Reason (as defined in Section 9(c) hereof). Such
policy shall provide for its conversion to an individual policy owned by the
Executive subsequent to termination of his employment. The Executive agrees to
undergo any reasonable physical examination and other procedures as may be
necessary to maintain such policy.
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<PAGE>
(2) During the term of this Agreement, the Company shall be
entitled to maintain a "key man" term life insurance policy on the life of the
Executive, the proceeds of which shall be payable to the Company or its
designees. The Executive agrees to undergo any reasonable physical examination
and other procedures as may be necessary to maintain such policy.
(b) Expenses. The Executive shall be entitled to receive prompt
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reimbursement of all expenses reasonably incurred by him in connection with the
performance of his duties hereunder or for promoting, pursuing or otherwise
furthering the business or interests of the Company.
(c) Office and Facilities. The Executive shall be provided with an
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appropriate office and with such secretarial and other support facilities as are
commensurate with the Executive's status with the Company and adequate for the
performance of his duties hereunder.
8. Vacation. The Executive shall be entitled to annual vacation in
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accordance with the policies as periodically established by the Board for
similarly situated executives of the Company.
9. Termination. The Executive's employment hereunder may be terminated under
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the following circumstances:
(a) Disability. The Company shall be entitled to terminate the
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Executive's employment after having established the Executive's Disability. For
purposes of this Agreement, "Disability" means a physical or mental infirmity
which impairs the Executive's ability to substantially perform his duties under
this Agreement for a period of at least six (6) months in any twelve (12) month
calendar period as determined in accordance with the The Limited, Inc. Long-Term
Disability Plan.
(b) Cause. The Company shall be entitled to terminate the Executive's
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employment for "Cause" without prior written notice. For purposes of this
Agreement, "Cause" shall mean that the Executive (1) has plead "guilty" or "no
contest" to or has been convicted of an act which is defined as a felony under
federal or state law, or (2) engaged in willful misconduct which could
reasonably be expected to harm the Company's business or its reputation. For
this purpose, an act or failure to act shall be considered "willful misconduct"
only if done, or omitted to be done, by the Executive in bad faith and without a
reasonable belief that such act or failure to act was in the best interests of
the Company.
The Executive shall not be terminated for Cause unless he has been
given written notice by the Board of its intention to so terminate his
employment, such notice to state in detail the particular act or acts or failure
or failures to act that constitute the grounds on which the proposed termination
for Cause is based. If such notice is given, the Executive shall be entitled to
a hearing before the Board, and to be accompanied by his counsel, at which he
shall be entitled to contest the Board's findings. Such hearing shall be held
within fifteen (15) days of notice to the Company by the Executive, provided he
requests such hearing within thirty (30) days of the written notice from the
Board of its intention to terminate his employment. If the Executive fails to
request such hearing within the thirty (30)-day period specified in the
preceding sentence, his employment shall be terminated for Cause effective upon
the expiration of such period. If the Executive requests such hearing and,
within ten (10) days following such hearing, the Executive is furnished with a
copy of a resolution, duly adopted by the affirmative vote of a majority of the
members of the Board, finding that in the good-faith opinion of the Board, the
Executive was guilty of conduct constituting Cause (as defined herein),
specifying the particulars thereof in reasonable detail, the Executive shall
thereupon be terminated for Cause. Any such resolution shall be accompanied by a
certificate of the Secretary or another appropriate officer of the Company which
shall state that such resolution was duly adopted by the affirmative vote of a
majority of the members of the Board at a duly convened meeting called for such
purpose.
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(c) Termination by the Executive. The Executive may terminate his
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employment hereunder for "Good Reason" by delivering to the Company (1) a
Preliminary Notice of Good Reason (as defined below), and (2) not earlier than
thirty (30) days from the delivery of such Preliminary Notice, a Notice of
Termination. For purposes of this Agreement, "Good Reason" means (i) the
failure to continue the Executive as President and Chief Executive Officer of
the Company; (ii) the failure of the Board to nominate the Executive for
election to the Board at the Company's annual stockholder meeting; (iii) the
assignment to the Executive of any duties materially inconsistent with, or the
failure to assign to the Executive duties materially consistent with, the
Executive's positions, duties, authority, responsibilities and reporting
requirements as set forth in Section 2 hereof; (iv) a reduction in or a material
delay in payment of the Executive's total cash compensation and benefits from
those required to be provided in accordance with the provisions of this
Agreement; (v) the Company, the Board or any person controlling the Company
requires the Executive to be based outside of the United States, other than on
travel reasonably required to carry out the Executive's obligations under the
Agreement or (vi) the failure of the Company to obtain the assumption in writing
of its obligation to perform this Agreement by any successor to all or
substantially all of the assets of the Company not later than the effective date
of a merger, consolidation, sale or similar transaction; provided, however, that
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"Good Reason" shall not include (A) acts not taken in bad faith which are cured
by the Company in all respects not later than thirty (30) days from the date of
receipt by the Company of a written notice from the Executive identifying in
reasonable detail the act or acts constituting "Good Reason" (a "Preliminary
Notice of Good Reason") or (B) acts taken by the Company to reassign the
Executive's duties and/or titles to another person or persons if the Executive
has suffered a physical or mental infirmity which renders him unable to
substantially perform his duties under this Agreement, provided that any such
acts may be taken by the Company only after receiving an opinion of a physician
reasonably acceptable to the Executive or his legal representative stating that
there is no reasonable likelihood that the Executive will be able to return to
full-time employment with the Company performing his duties hereunder within six
(6) months. A Preliminary Notice of Good Reason shall not, by itself,
constitute a Notice of Termination.
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(d) Notice of Termination. Subject to Section 9(b), any purported
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termination by the Company or by the Executive shall be communicated by a
written Notice of Termination to the other two weeks prior to the Termination
Date (as defined below). For purposes of this Agreement, a "Notice of
Termination" shall mean a notice which indicates the specific termination
provision in this Agreement relied upon and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination of the
Executive's employment under the provision so indicated. For purposes of this
Agreement, no such purported termination of employment shall be effective
without such Notice of Termination.
(e) Termination Date, Etc. "Termination Date" shall mean in the case
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of the Executive's death, his date of death, or in all other cases, the date
specified in the Notice of Termination; provided, however, that if the
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Executive's employment is terminated by the Company due to Disability, the date
specified in the Notice of Termination shall be at least thirty (30) days from
the date the Notice of Termination is given to the Executive.
10. Compensation Upon Termination.
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(a) If during the term of this Agreement (including any extensions
thereof), the Executive's employment is terminated by the Company for Cause, by
the Executive other than for Good Reason or by reason of the Executive's death,
or if the Executive gives written notice not to extend the term of this
Agreement, the Company's sole obligation hereunder shall be to pay the Executive
the following amounts earned hereunder but not paid as of the Termination Date:
(i) Base Salary, (ii) reimbursement for any and all monies advanced or expenses
incurred in connection with the Executive's employment for reasonable and
necessary expenses incurred by the Executive on behalf of the Company through
the Termination Date, and (iii) any compensation which has been earned but not
paid, including any amounts which the Executive had previously deferred
(including any interest earned or credited thereon) (collectively, "Accrued
Compensation"), provided, however, that if the Executive has given written
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notice not to extend the term of this Agreement, the Company shall continue to
pay the premiums provided for in Section 7(a) for the time period set forth
therein. The Executive's entitlement to any other benefits shall be determined
in accordance with the Company's employee benefit plans then in effect.
(b) If the Executive's employment is terminated by reason of the
Company's written notice to the Executive of its decision not to extend the
Initial Term of this Agreement as contemplated in Section 1 hereof, by the
Company other than for Cause or by the Executive for Good Reason, the Company's
sole obligation hereunder shall be as follows:
(i) the Company shall pay the Executive the Accrued
Compensation;
(ii) the Company shall continue to pay the Executive the Base
Salary for a period of one (1) year following the Termination Date, and
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<PAGE>
(iii) the Company shall continue to pay the premiums provided
for in Section 7(a) hereof for the time period set forth therein.
(c) If the Executive's employment is terminated by the Company by
reason of the Executive's Disability, the Company's sole obligation hereunder
shall be as follows:
(i) the Company shall pay the Executive the Accrued
Compensation;
(ii) the Company shall continue to pay the Executive 100% of
the Base Salary for the first twenty four months following the
Termination Date and 80% of the Base Salary for the third twelve months
following the Termination Date; provided, however, that such Base
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Salary shall be reduced by the amount of any benefits the Executive
receives by reason of his Disability under the Company's relevant
disability plan or plans; and
(iii) the Company shall continue to pay the premiums provided
for in Section 7(a) hereof for the time period set forth therein.
(d) During the period the Executive is receiving salary continuation
pursuant to Section 10(b)(ii) or 10(c)(ii) hereof, the Company shall, at its
expense, provide to the Executive and his beneficiaries medical and dental
benefits substantially similar in the aggregate to those provided to the
Executive immediately prior to the date of the Executive's termination of
employment; provided, however, that the Company's obligation with respect to the
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foregoing benefits shall be reduced to the extent that the Executive or his
beneficiaries obtains any such benefits pursuant to a subsequent employer's
benefit plans.
(e) The Executive shall not be required to mitigate the amount of any
payment provided for in this Agreement by seeking other employment or otherwise
and no such payment shall be offset or reduced by the amount of any compensation
provided to the Executive in any subsequent employment.
11. Employee Covenants.
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(a) Unauthorized Disclosure. The Executive shall not, during the term
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of this Agreement and thereafter, make any Unauthorized Disclosure. For
purposes of this Agreement, "Unauthorized Disclosure" shall mean disclosure by
the Executive without the prior written consent of the Board to any person,
other than an employee of the Company or a person to whom disclosure is
reasonably necessary or appropriate in connection with the performance by the
Executive of his duties as an executive of the Company or as may be legally
required, of any information relating to the business or prospects of the
Company (including, but not limited to, any confidential information with
respect to any of the Company's customers, products, methods of distribution,
strategies, business and marketing plans and business policies and practices);
provided, however, that such term shall not include the use or disclosure by the
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Executive, without consent, of any information known generally to the public
(other than as a result of disclosure by him in violation of this Section
11(a)). This confidentiality covenant has no temporal, geographical or
territorial restriction.
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<PAGE>
(b) Non-Competition. During the Non-Competition/No-Raid Period
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described below, the Executive shall not, directly or indirectly, without the
prior written consent of the Company, own, manage, operate, join, control, be
employed by, consult with or participate in the ownership, management, operation
or control of, or be connected with (as a stockholder, partner, or otherwise),
any business, individual, partner, firm, corporation, or other entity that
competes, directly or indirectly, with the Company or any affiliate of the
Company; provided, however, that the "beneficial ownership" by the Executive
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after his termination of employment with the Company, either individually or as
a member of a "group," as such terms are used in Rule 13d of the General Rules
and Regulations under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), of not more than two percent (2%) of the voting stock of any
publicly held corporation shall not be a violation of this Agreement.
(c) Non-Solicitation. During the Non-Competition/No-Raid Period
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described below, the Executive shall not, either directly or indirectly, alone
or in conjunction with another party, interfere with or harm, or attempt to
interfere with or harm, the relationship of the Company, its subsidiaries and/or
affiliates, with any person who at any time was an employee, customer or
supplier of the Company, its subsidiaries and/or affiliates or otherwise had a
business relationship with the Company, its subsidiaries and/or affiliates.
For purposes of this Agreement, the "Non-Competition/No-Raid Period" means the
period the Executive is employed by the Company plus one (1) year thereafter.
(d) Remedies. The Executive agrees that any breach of the terms of
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this Section 11 would result in irreparable injury and damage to the Company for
which the Company would have no adequate remedy at law; the Executive therefore
also agrees that in the event of said breach or any threat of breach, the
Company shall be entitled to an immediate injunction and restraining order to
prevent such breach and/or threatened breach and/or continued breach by the
Executive and/or any and all persons and/or entities acting for and/or with the
Executive, without having to prove damages, in addition to any other remedies to
which the Company may be entitled at law or in equity. The terms of this
paragraph shall not prevent the Company from pursuing any other available
remedies for any breach or threatened breach hereof, including but not limited
to the recovery of damages from the Executive. The Executive and the Company
further agree that the provisions of the covenants not to compete and solicit
are reasonable and that the Company would not have entered into this Agreement
but for the inclusion of such covenants herein. Should a court or arbitrator
determine, however, that any provision of the covenants is unreasonable, either
in period of time, geographical area, or otherwise, the parties hereto agree
that the covenant should be interpreted and enforced to the maximum extent which
such court or arbitrator deems reasonable.
The provisions of this Section 11 shall survive any termination of
this Agreement, and the existence of any claim or cause of action by the
Executive against the Company, whether predicated on this Agreement or
otherwise, shall not constitute a defense to the enforcement by
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<PAGE>
the Company of the covenants and agreements of this Section 11; provided,
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however, that this paragraph shall not, in and of itself, preclude the Executive
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from defending himself against the enforceability of the covenants and
agreements of this Section 11.
12. Certain Additional Payments.
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(a) In the event it shall be determined that any payment or
distribution of any type to or for the benefit of the Executive by the Company,
any of its affiliates, or any person who acquires ownership or effective control
of the Company or ownership of a substantial portion of the Company's assets
(within the meaning of Section 280G of the Internal Revenue Code of 1986, as
amended (the "Code"), and the regulations thereunder) or any affiliate of such
person, whether paid or payable or distributed or distributable pursuant to the
terms of this Agreement or otherwise (the "Total Payments"), is subject to the
excise tax imposed by Section 4999 of the Code or any similar successor
provision or any interest or penalties with respect to such excise tax (such
excise tax, together with any such interest and penalties, are collectively
referred to as the "Excise Tax"), then the Executive shall be entitled to
receive an additional payment (a "Gross-Up Payment") in an amount such that
after payment by the Executive of all taxes (including any interest or penalties
imposed with respect to such taxes), including any Excise Tax, imposed upon the
Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal
to the Excise Tax imposed upon the Total Payments (not including any Gross-Up
Payment).
(b) All determinations as to whether any of the Total Payments are
"parachute payments" (within the meaning of Section 280G of the Code), whether a
Gross-Up Payment is required, the amount of such Gross-Up Payment and any
amounts relevant to the last sentence of Subsection 12(a), shall be made by an
independent accounting firm selected by the Company from among the largest six
accounting firms in the United States (the "Accounting Firm"). The Accounting
Firm shall provide its determination (the "Determination"), together with
detailed supporting calculations, regarding the amount of any Gross-Up Payment
and any other relevant matter, both to the Company and the Executive, within
five (5) days of the Termination Date, if applicable, or such earlier time as is
requested by the Company or the Executive (if the Executive reasonably believes
that any of the Total Payments may be subject to the Excise Tax). Any
determination by the Accounting Firm shall be binding upon the Company and the
Executive. As a result of uncertainty in the application of Section 4999 of the
Code at the time of the initial determination by the Accounting Firm hereunder,
it is possible that the Company should have made Gross-Up Payments
("Underpayment"), or that Gross-Up Payments will have been made by the Company
which should not have been made ("Overpayments"). In either such event, the
Accounting Firm shall determine the amount of the Underpayment or Overpayment
that has occurred. In the case of an Underpayment, the amount of such
Underpayment shall be promptly paid by the Company to or for the benefit of the
Executive. In the case of an Overpayment, the Executive shall, at the direction
and expense of the Company, take such steps as are reasonably necessary
(including the filing of returns and claims for refund), follow reasonable
instructions from, and procedures established by, the Company, and otherwise
reasonably cooperate with the Company to correct such Overpayment.
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<PAGE>
13. Successors and Assigns.
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(a) This Agreement shall be binding upon and shall inure to the
benefit of the Company, its successors and assigns and the Company shall require
any successor or assign to expressly assume and agree to perform this Agreement
in the same manner and to the same extent that the Company would be required to
perform it if no such succession or assignment had taken place. The term "the
Company" as used herein shall include any such successors and assigns. The term
"successors and assigns" as used herein shall mean a corporation or other entity
acquiring or otherwise succeeding to, directly or indirectly, all or
substantially all the assets and business of the Company (including this
Agreement) whether by operation of law or otherwise.
(b) Neither this Agreement nor any right or interest hereunder shall
be assignable or transferable by the Executive, his beneficiaries or legal
representatives, except by will or by the laws of descent and distribution.
This Agreement shall inure to the benefit of and be enforceable by the
Executive's legal personal representative.
14. Arbitration. Except with respect to the remedies set forth in
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Section 11(d) hereof, if in the event of any controversy or claim between the
Company or any of its affiliates and the Executive arising out of or relating to
this Agreement, either party delivers to the other party a written demand for
arbitration of a controversy or claim then such claim or controversy shall be
submitted to binding arbitration. The binding arbitration shall be administered
by the American Arbitration Association under its Commercial Arbitration Rules.
The arbitration shall take place in Columbus, Ohio. Each of the Company and the
Employee shall appoint one person to act as an arbitrator, and a third
arbitrator shall be chosen by the first two arbitrators (such three arbitrators,
the "Panel"). The Panel shall have no authority to award punitive damages
against the Company or the Executive. The arbitrator shall have no authority to
add to, alter, amend or refuse to enforce any portion of the disputed
agreements. The Company and the Executive each waive any right to a jury trial
or to petition for stay in any action or proceeding of any kind arising out of
or relating to this Agreement.
15. Fees and Expenses. The Company shall pay the legal fees reasonably
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incurred by the Executive in connection with the negotiation and execution of
this Agreement up to a maximum of $25,000, payable upon submission of the
billing statement or paid receipt for such services rendered by the Executive's
counsel. In addition, the Company agrees to pay promptly upon presentation of
an invoice from the Executive, to the full extent permitted by law, all legal
fees and expenses which the Executive may reasonably incur as a result of (a)
any contest by the Company of the validity or enforceability of, or liability
under, any provision of this Agreement, (b) any effort to enforce the
Executive's rights hereunder or (c) any dispute between the Executive and the
Corporation relating to this Agreement, but only if such contest, effort or
dispute results in a judgment, award or settlement in Executive's favor in any
material respect.
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<PAGE>
16. Notice. For the purposes of this Agreement, notices and all other
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communications provided for in the Agreement (including the Notice of
Termination) shall be in writing and shall be deemed to have been duly given
when personally delivered or sent by registered or certified mail, return
receipt requested, postage prepaid, or upon receipt if overnight delivery
service or facsimile is used, addressed as follows:
To the Executive:
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Michael S. Jeffries
XXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXX
To the Company:
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Abercrombie & Fitch
Four Limited Parkway
Reynoldsburg, Ohio 43068
Attn: Secretary
With a Copy to:
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The Limited, Inc.
3 Limited Parkway
Columbus, Ohio 43230
Attn: Secretary
17. Settlement of Claims. The Company's obligation to make the payments
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provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any circumstances, including, without
limitation, any set-off, counterclaim, recoupment, defense or other right which
the Company may have against the Executive or others.
18. Miscellaneous. No provision of this Agreement may be modified, waived
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or discharged unless such waiver, modification or discharge is agreed to in
writing and signed by the Executive and the Company. No waiver by either party
hereto at any time of any breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or conditions
at the same or at any prior or subsequent time. No agreement or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not expressly set
forth in this Agreement.
19. Governing Law. This Agreement shall be governed by and construed and
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enforced in accordance with the laws of the State of Ohio without giving effect
to the conflict of law principles thereof.
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20. Severability. The provisions of this Agreement shall be deemed
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severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
21. Entire Agreement. This Agreement and the agreements attached hereto
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as Exhibits A, B and C constitute the entire agreement between the parties
hereto and supersede all prior agreements, if any, understandings and
arrangements, oral or written, between the parties hereto with respect to the
subject matter hereof. This Agreement may be executed in one or more
counterparts.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by
its duly authorized officer and the Executive has executed this Agreement as of
the day and year first above written.
ABERCROMBIE & FITCH, CO.
By: /s/ Leslie H. Wexner
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Leslie H. Wexner
Chairman of the Board
/s/ Michael S. Jeffries
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MICHAEL S. JEFFRIES
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<PAGE>
EXHIBIT A
RESTRICTED STOCK AGREEMENT
ACKNOWLEDGEMENT OF RECEIPT
This Restricted Stock Agreement, dated as of May 13, 1997, is entered into by
and between Abercrombie & Fitch Co. (the "Company") and the associate or
director of the Company whose name appears below (the "Associate") in order to
set forth the terms and conditions of Restricted Shares granted to the Associate
under The Abercrombie & Fitch 1996 Stock Option and Performance Incentive Plan-
1997 Restatement ("the Plan").
Associate's Name: MICHAEL JEFFRIES
Division: ABERCROMBIE & FITCH
Social Security #: XXXXXXXXXXXXXXXXXXXX
Address: XXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXX
Subject to the attached Terms and Conditions and the terms of the Plan, which
are incorporated herein by reference, the Company hereby grants to the Associate
Restricted Shares of the Company's Common Stock, as outlined below.
<TABLE>
<CAPTION>
(E) Date and Number of
Shares as to which
Restricted Period
(B) Date (C) Total Terminates if Performance
---- No. of (D) Date of Satisfaction Requirements Have Been
(A) Plan Name of Grant Shares of Performance Requirements Satisfied*
--------- -------- --------- ------------------------------ ---------
<S> <C> <C> <C> <C>
1996 5/13/97 500,000 (1) As to the first 2/1/99: 200,000
200,000 shares, as of
February 1, 1999, if the
Company's aggregate
gross revenue for the
Company's 1997 and 1998
fiscal years is equal to
or greater than $xxx
million.
(2) As to the remaining 300,000 2/1/2000: 75,000, plus
----
shares (or the entire that number of shares as
500,000 shares if the to which the Restricted
--
requirement described in Period (i) has not
(D)(1) has not been terminated, and (ii)
satisfied), as of the would have
earliest of the following terminated in any
dates: February 1, 2000, if earlier year(s) if
the Company's aggregate the performance
gross revenue for the requirements
Company's 1999 fiscal year had been satisfied in
is equal to or greater such earlier year(s)
than $xxx million;
[or]
</TABLE>
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* The number of shares as to which the Restricted Period will terminate as
of the dates shown may not exceed the number of shares as to which the
performance requirements described in column (D) have been satisfied.
<PAGE>
EXHIBIT A
RESTRICTED STOCK AGREEMENT
ACKNOWLEDGEMENT OF RECEIPT
<TABLE>
<S> <C>
February 1, 2001, if the 2/1/2001: 75,000, plus that
Company's aggregate gross revenue ----
for the Company's 2000 fiscal number of shares as to which
year is equal to or greater the Restricted Period (i) has
than $xxx million; not terminated, and (ii) would
have terminated in any earlier
[or] year(s) if the performance
requirements had been satisfied
in such earlier year(s)
February 1, 2002, if the 2/1/2002: 75,000, plus
Company's aggregate gross revenue ----
for the Company's 2001 fiscal that number of shares as
year is equal to or greater to which the Restricted
than $xxx million; Period (i) has not
terminated, and (ii)
[or] would have terminated
in any earlier year(s) if
the performance requirements
had been satisfied in
such earlier year(s)
February 1, 2003, if the 2/1/2003: 75,000, plus that
Company's aggregate gross ----
revenue for the Company's number of shares as to which
2002 fiscal year is equal the Restricted Period (i) has
to or greater than $xxx not terminated, and (ii)
million. would have terminated in any
earlier year(s) if the performance
requirements had been satisfied
in such earlier year(s)
</TABLE>
This Agreement is subject to stockholder approval of the Plan at the Company's
annual meeting on May 20, 1997. Subject to such approval, the Company has the
corporate power and authority to enter into this Agreement and to perform its
obligations hereunder.
The Company and the Associate have executed this Agreement as of the Date of
Grant set forth above.
ABERCROMBIE & FITCH ASSOCIATE
By: /s/ Leslie H. Wexner /s/ Michael S. Jeffries
------------------------------- ------------------------------
Leslie H. Wexner, Chairman Michael S. Jeffries
<PAGE>
AMENDMENT TO MAY 13, 1997 RESTRICTED STOCK AGREEMENT
ACKNOWLEDGEMENT OF RECEIPT
This Restricted Stock Agreement - Amendment (the "Amendment") dated as of
October 22, 1997, is entered into by and between Abercrombie & Fitch Co. (the
"Company") and the associate or director of the Company whose name appears below
(the "Associate") solely to amend the Performance Requirements outlined in the
May 13, 1997 Restricted Stock Agreement (the "May 13 Agreement"), granted to the
Associate under The Abercrombie & Fitch 1996 Stock Option and Performance
Incentive Plan-1997 Restatement ("the Plan").
Associate's Name: MICHAEL JEFFRIES
Division: ABERCROMBIE & FITCH
Social Security #: XXXXXXXXXXXXXXXXXXXX
Address: XXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXX
The Company hereby amends the Performance Requirements required for earning the
second 300,000 Associate Restricted Shares of the Company's Common Stock,
granted in the May 13 Agreement as outlined below:
<TABLE>
<CAPTION>
(D) Date of Satisfaction of Performance
Requirements
---------------------------------------
<S> <C>
(3) The remaining 300,000 shares may be earned
earlier than provided in (D)(2) of the May 13
Agreement, as follows: 100,000 shares will be
earned as of February 1, 1998 if the
Company's aggregate gross revenue for the
Company's fiscal fourth quarter 1997 is equal
to or greater than $xxx million; 100,000
shares will be earned as of August 1, 1998 if
the Company's aggregate gross revenue for the
Company's 1998 fiscal spring season (i.e.
February through July) is equal to or greater
than $xxx million; and 100,000 shares will be
earned as of February 1, 1999 if the
Company's aggregate gross revenue for the
Company's 1998 fiscal fall season (i.e.
August through January) is equal to or
greater than $xxx million. To the extent
that the performance requirements described
in this clause have not been satisfied, the
performance requirements in (D)(2) of the May
13 Agreement shall continue to apply to the
remaining shares which have not yet been
earned.
</TABLE>
This Amendment shall not affect the vesting provisions of section (E) of the May
13 Agreement and, except as expressly provided herein, the terms of the May 13
Agreement shall remain unchanged.
The Company has the corporate power and authority to enter into this Amendment
and to perform its obligations hereunder.
The Company and the Associate have executed this Amendment as of the date set
forth above.
ABERCROMBIE & FITCH ASSOCIATE
By: /s/ Leslie H. Wexner /s/ Michael S. Jeffries
------------------------------- -----------------------------
Leslie H. Wexner, Chairman Michael S. Jeffries
<PAGE>
EXHIBIT B
STOCK OPTION AGREEMENT
ACKNOWLEDGEMENT OF RECEIPT
This Stock Option Agreement, dated as of May 13, 1997, is entered into by and
between Abercrombie & Fitch Co. (the "Company") and the associate or director of
the Company whose name appears below (the "Associate") in order to set forth the
terms and conditions of Options granted to the Associate under The Abercrombie &
Fitch 1996 Stock Option and Performance Incentive Plan--1997 Restatement ("the
Plan").
Associate's Name: MICHAEL JEFFRIES
Division: ABERCROMBIE & FITCH
Social Security #: XXXXXXXXXXXXXX
Address: XXXXXXXXXXXXXX
XXXXXXXXXXXXXX
Subject to the attached Terms and Conditions and the terms of the Plan, which
are incorporated herein by reference, the Company hereby grants to the Associate
an Option to purchase shares of Common Stock of the Company, as outlined below.
This Option is not intended to qualify as an incentive stock option within the
meaning of Section 422 of the Internal Revenue Code. The Option shall become
exercisable with respect to 50,000 of the shares subject thereto on each of the
first day of February in 1998, 1999, 2000 and 2001 (such shares, the "Time
Vesting Shares"), and with respect to 320,000 of the shares subject thereto on
the earlier of February 28, 2005 or the Associate's retirement from the Company
after reaching age 60; provided, however, that with respect to such 320,000
--------- -------
shares, the Option may become exercisable earlier in accordance with the
schedules below if the applicable Performance Requirement described below is
met. Such exercisability may also be accelerated as set forth in the attached
Terms and Conditions.
<TABLE>
<CAPTION>
Accelerated Exercise
Schedule Upon Attainment
of Applicable Performance
Requirement
-------------------------
Total No. of Performance Vesting
Plan Name Date of Grant Shares Option Price Requirement Date Shares
--------- ------------- ------ ------------ ----------- ---- ------
<S> <C> <C> <C> <C> <C> <C>
1996 NQ 5/13/97 520,000 $16.00 (1) NONE 2/1/98 50,000
2/1/99 50,000
2/1/00 50,000
2/1/01 50,000
---------------------------------------------------------
(2) The Company's 2/1/99 40,000
earnings per share
("EPS") for its 2/1/00 40,000
fiscal year ending
in 1998 equals or 2/1/01 40,000
exceeds $xxx
2/1/02 40,000
---------------------------------------------------------
(3) The Company's 2/1/00 40,000
EPS for its fiscal
year ending in 1999 2/1/01 40,000
equals or exceeds
$xxx 2/1/02 40,000
2/1/03 40,000
</TABLE>
STOCK OPTION AGREEMENT
ACKNOWLEDGEMENT OF RECEIPT
This Agreement is subject to stockholder approval of the Plan at the Company's
annual meeting of stockholders on May 20, 1997. Subject to such approval, the
Company has the corporate power and authority to enter into this Agreement and
to perform its obligations hereunder.
The Company and the Associate have executed this Agreement as of the Date of
Grant set forth above.
ABERCROMBIE & FITCH ASSOCIATE
By: /s/ Leslie H. Wexner /s/ Michael S. Jeffries
---------------------------------- -------------------------------
Leslie H. Wexner, Chairman Michael S. Jeffries
<PAGE>
EXHIBIT C
STOCK OPTION AGREEMENT
ACKNOWLEDGEMENT OF RECEIPT
This Stock Option Agreement, dated as of May 13, 1997, is entered into by and
between Abercrombie & Fitch Co. (the "Company"), and the associate or director
of the Company whose name appears below (the "Associate") in order to set forth
the terms and conditions of Options granted to the Associate under The
Abercrombie & Fitch 1996 Stock Option and Performance Incentive Plan--1997
Restatement ("the Plan").
Associate's Name: MICHAEL JEFFRIES
Division: ABERCROMBIE & FITCH
Social Security #: XXXXXXXXXXXXXXXX
Address: XXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXX
Subject to the attached Terms and Conditions and the terms of the Plan, which
are incorporated herein by reference, the Company hereby grants to the Associate
an Option to purchase shares of Common Stock of the Company, as outlined below.
This Option is not intended to qualify as an incentive stock option within the
meaning of Section 422 of the Internal Revenue Code. The Option shall become
exercisable with respect to 100% of the shares subject thereto on the earlier of
the date nine (9) years and six (6) months from the Date of Grant or the
Associate's retirement from the Company after reaching age 60; provided,
---------
however, that all or a portion of the Option may become exercisable earlier in
-------
accordance with the schedules below if the applicable Performance Requirement
described below is met. Such exercisability may also be accelerated as set
forth in the attached Terms and Conditions.
<TABLE>
<CAPTION>
Accelerated Exercise
Schedule Upon Attainment
of Applicable Performance
Requirement
-------------------------
Total No. of Performance Vesting
Plan Name Date of Grant Shares Option Price Requirement Date Shares
--------- ------------- ------ ------------ ----------- ---- ------
<S> <C> <C> <C> <C> <C> <C>
1996 NQ 5/13/97 480,000 $16.00 (1) The Company's 2/1/01 40,000
earnings per share
("EPS") for its 2/1/02 40,000
fiscal year ending
in 2000 equals or 2/1/03 40,000
exceeds $xxx
2/1/04 40,000
---------------------------------------------------------
(2) The Company's 2/1/02 40,000
EPS for its fiscal
year ending in 2/1/03 40,000
2001 equals or
exceeds $xxx 2/1/04 40,000
2/1/05 40,000
---------------------------------------------------------
(3) The Company's 2/1/03 40,000
EPS for its fiscal
year ending in 2/1/04 40,000
2002 equals or
exceeds $xxx 2/1/05 40,000
2/1/06 40,000
</TABLE>
<PAGE>
EXHIBIT C
STOCK OPTION AGREEMENT
ACKNOWLEDGEMENT OF RECEIPT
This Agreement is subject to stockholder approval of the Plan at the Company's
annual meeting on May 20, 1997. Subject to such approval, the Company has the
corporate power and authority to enter into this Agreement and to perform its
obligations hereunder.
The Company and the Associate have executed this Agreement as of the Date of
Grant set forth above.
ABERCROMBIE & FITCH ASSOCIATE
By: /s/ Leslie H. Wexner /s/ Michael S. Jeffries
------------------------------- ------------------------------
Leslie H. Wexner, Chairman Michael S. Jeffries