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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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): August 22, 2005
Coach, Inc.
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(Exact name of registrant as specified in its charter)
Maryland 1-16153 52-2242751
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(State of (Commission File Number) (IRS Employer
Incorporation) Identification No.)
516 West 34th Street, New York, NY 10001
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(Address of principal executive offices) (Zip Code)
(212) 594-1850
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(Registrant's telephone number, including area code)
Item 1.01: Entry into a Material Definitive Agreement.
On August 22, 2005, Coach, Inc. entered into three-year extensions to
the employment agreements of three key executives: Lew Frankfort, Chairman and
Chief Executive Officer; Reed Krakoff, President and Executive Creative
Director; and Keith Monda, President and Chief Operating Officer. These
amendments extend the terms of the executives' employment agreements from July
2008 through August 2011.
Mr. Frankfort's extended agreement provides for an initial base salary
(beginning September 1, 2005) of $1,000,000 per year, with an initial maximum
bonus pursuant to Coach's Performance-Based Annual Incentive Plan equal to 200%
of his annual base salary. Pursuant to his extension, on August 22, 2005, Mr.
Frankfort received a grant of options to purchase 532,717 shares of Coach common
stock at an exercise price of $32.37 per share; subject generally to Mr.
Frankfort's continued employment with us, 25% of these options will vest on
August 22, 2009, 25% will vest on August 22, 2010, and 50% will vest on August
22, 2011. The options will expire on August 22, 2015.
Mr. Krakoff's extended agreement provides for an initial base salary
(beginning September 1, 2005) of $2,000,000 per year, with an initial maximum
bonus pursuant to Coach's Performance-Based Annual Incentive Plan equal to 150%
of his annual base salary. Under his agreement extension, Mr. Krakoff is
entitled to receive additional cash bonuses of $1,095,000 on each of July 1,
2009 and July 1, 2010 and $2,190,000 on July 1, 2011. He will be eligible to
receive additional bonuses of up to $1,867,500 in each of fiscal years 2009 and
2010 and up to $3,735,000 in fiscal year 2011 based on Coach's attaining pre-set
financial or other operating criteria determined by the Human Resources and
Governance Committee in its discretion in accordance with Section 162(m) of the
United States Internal Revenue Code of 1986 (the "Code"). Pursuant to his
extension, on August 22, 2005, Mr. Krakoff received a grant of options to
purchase 1,686,581 shares of Coach common stock at an exercise price of $32.37
per share; subject generally to Mr. Krakoff's continued employment with us, 25%
of these options will vest on August 22, 2009, 25% will vest on August 22, 2010
and 50% will vest on August 22, 2011. The options will expire on August 22,
2015.
Mr. Monda's extended agreement provides for an initial base salary
(beginning September 1, 2005) of $750,000 per year, with an initial maximum
bonus pursuant to Coach's Performance-Based Annual Incentive Plan equal to 150%
of his annual base salary. Pursuant to his extension, on August 22, 2005, Mr.
Monda received a grant of options to purchase 532,717 shares of Coach common
stock at an exercise price of $32.37 per share; subject generally to Mr. Monda's
continued employment with us, 25% of these options will vest on August 22, 2009,
25% will vest on August 22, 2010, and 50% will vest on August 22, 2011. The
options will expire on August 22, 2015.
Additional terms of the stock options received by all three executives
are the same as the options they received under their initial employment
agreements in July 2003; these terms are more fully described under the heading
"Executive Compensation--Employment Agreements" in the Proxy Statement for
Coach's 2004 Annual Meeting of Stockholders, which was filed with the Securities
and Exchange Commission on September 29, 2004. Except as otherwise described
above, all of the remaining terms of the executives' original employment
agreements remain in effect.
Item 2.02: Results of Operations and Financial Condition.
On August 24, 2005, Coach, Inc. (the "Company") issued a press release
(the "Press Release") in which the Company announced its revised estimated
financial results for its fiscal quarter ending October 1, 2005. All information
in the press release is being furnished to the Securities and Exchange
Commission and shall not be deemed "filed" for purposes of Section 18 of the
Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to
liability under that section, nor shall it be deemed incorporated by reference
in any filing under the Securities Act of 1933, as amended, or the Exchange Act,
except as expressly set forth by specific reference in such a filing.
Item 9.01: Financial Statements and Exhibits.
(c) Exhibits. The following exhibit is being furnished herewith:
99.1 Press Release, dated August 24, 2005
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.
Dated: August 26, 2005
COACH, INC.
By: /s/ Carole P. Sadler
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Carole P. Sadler
Senior Vice President, General Counsel
and Secretary
EXHIBIT INDEX
99.1 Press Release, dated August 24, 2005
Exhibit 99.1
Coach Announces Extensions to Long-Term Employment Agreements for Three Key
Executives; Provides First Quarter Business Update; Earnings of at Least $0.25
Projected, up at Least 47% and Ahead of Analysts' Expectations
NEW YORK--(BUSINESS WIRE)--Aug. 24, 2005--Coach, Inc. (NYSE: COH),
a leading marketer of modern classic American accessories, today
announced that three key executives: Lew Frankfort, Chairman and CEO,
Reed Krakoff, President and Executive Creative Director, and Keith
Monda, President and Chief Operating Officer, entered into three-year
extensions to their original five-year employment agreements, which
will now be in effect through August 2011.
The company also announced that its first quarter results to date
are tracking ahead of plan. The company now expects that fiscal first
quarter sales and earnings for the period ending October 1, 2005 will
increase to at least $445 million and $0.25 per diluted share,
respectively. This compares with prior year's sales of $344 million
and earnings of $0.17 per share and represents increases of at least
29% and 47%, respectively. The analysts' consensus estimate is
currently $0.24 per share. The company also expects fiscal year 2006
sales of about $2.1 billion and earnings per share of at least $1.25.
Lew Frankfort, Chairman and Chief Executive Officer of Coach,
Inc., said, "I am very pleased to announce that Reed Krakoff and Keith
Monda have joined me in extending their employment agreements with the
company, underscoring our optimism and continued commitment towards
the business. Clearly, our management team has communicated a
consistent vision and instilled a culture of innovation and continuous
improvement throughout Coach, driving the company to deliver
exceptional financial performance during the last several years. I
believe that ensuring the continuity of this leadership will be a key
factor in providing excellent results well into the future."
Mr. Frankfort added, "We have seen robust sales continue
throughout the summer and into the start of the fall season across all
business units. All of our key performance metrics continue to
demonstrate the vibrancy of the Coach brand. And we reaffirm the first
quarter comparable store sales guidance presented during our August
conference call. Consumers have enthusiastically embraced our
transitional and fall offerings, including the updated Hamptons
Weekend, Soho and Hamptons Leather collections, the new sophisticated
Signature Patchwork handbag group and the Chelsea collection in
leather and Optic Signature fabrications."
Coach will present at the Goldman Sachs Global Retailing
Conference Thursday, September 8, 2005 at 8:55 a.m. (EDT). The audio
portion of the presentation will be webcast live and archived for a
period of five business days and is available to the general public.
To access the live audio portion of the presentation, log onto:
http://customer.talkpoint.com/GOLD006/090705a_mk/default.asp?entity=
coach or www.coach.com/investors. (Due to the length of this URL, it
may be necessary to copy and paste this hyperlink into your Internet
browser's URL address field. You may also need to remove an extra
space in the URL if one exists).
In should be noted that forward guidance excludes the earnings
impact from the implementation of accounting for share-based payments
(Statement of Financial Accounting Standards No. 123R), which is
currently required in the first quarter of fiscal year 2006.
Coach, with headquarters in New York, is a leading American
marketer of fine accessories and gifts for women and men, including
handbags, women's and men's small leathergoods, business cases,
weekend and travel accessories, footwear, watches, outerwear, scarves,
sunwear, and related accessories. Coach is sold worldwide through
Coach stores, select department stores and specialty stores, through
the Coach catalog in the U.S. by calling 1-800-223-8647 and through
Coach's website at www.coach.com. Coach's shares are traded on The New
York Stock Exchange under the symbol COH.
This press release contains forward-looking statements based on
management's current expectations. These statements can be identified
by the use of forward-looking terminology such as "may," "will,"
"should," "expect," "intend," "estimate," "are positioned to,"
"continue," "project," "guidance," "forecast," "anticipated," or
comparable terms. Future results may differ materially from
management's current expectations, based upon risks and uncertainties
such as expected economic trends, the ability to anticipate consumer
preferences, the ability to control costs, etc. Please refer to
Coach's latest Annual Report on Form 10-K for a complete list of risk
factors.
CONTACT: Coach
Analysts & Media:
Andrea Shaw Resnick, 212-629-2618