COACH, INC.

Notes to Condensed Consolidated Financial Statements
Quarters and Six Months Ended December 31, 2005 and January 1, 2005
(dollars and shares in thousands, except per share data)
(unaudited)

1.    Basis of Presentation and Organization

The accompanying unaudited condensed consolidated financial statements include the accounts of Coach, Inc. (‘‘Coach’’ or the ‘‘Company’’) and all 100% owned subsidiaries, including Coach Japan, Inc. These condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (‘‘SEC’’). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted from this report as is permitted by SEC rules and regulations. However, the Company believes that the disclosures are adequate to make the information presented not misleading. This report should be read in conjunction with the audited consolidated financial statements and notes thereto, included in the Company’s Annual Report on Form 10-K filed with the SEC for the year ended July 2, 2005 (‘‘fiscal 2005’’).

In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all normal and recurring adjustments necessary to present fairly the consolidated financial condition, results of operations and changes in cash flows of the Company for the interim periods presented. The results of operations for the quarter and six months ended December 31, 2005 are not necessarily indicative of results to be expected for the entire fiscal year, which will end on July 1, 2006 (‘‘fiscal 2006’’).

Reclassifications

Certain prior year amounts have been reclassified to conform to the current period presentation. Specifically, as a result of Coach’s acquisition of Sumitomo’s 50% interest in Coach Japan, the Company reevaluated the composition of its reportable segments and determined that Coach Japan should be a component of the Direct to Consumer segment. Previously, Coach Japan was included in the Indirect segment. All prior period information has been reclassified to include Coach Japan as a component of the Direct to Consumer segment. See Note 6 for segment disclosures.

Change in Accounting Principle

As more fully discussed below in Note 2, the Company adopted Statement of Financial Accounting Standards (‘‘SFAS’’) No. 123R, ‘‘Share-Based Payment’’ effective July 3, 2005. In accordance with the modified retrospective application method, all financial statement amounts for the prior periods presented have been adjusted to reflect the grant-date fair value method of expensing stock options as prescribed by SFAS 123R.

2.    Share-Based Payment

During the first quarter of fiscal 2006, the Company adopted SFAS No. 123R, ‘‘Share-Based Payment’’, which requires an entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. Previously, the Company accounted for stock-based compensation plans and the employee stock purchase plan in accordance with Accounting Principles Board (‘‘APB’’) Opinion No. 25, ‘‘Accounting for Stock Issued to Employees’’ and related Interpretations and provided the required pro forma disclosures of SFAS No. 123, ‘‘Accounting for Stock-Based Compensation’’. The Company elected to adopt the modified retrospective application method as provided by SFAS 123R and accordingly, all financial statement amounts for the prior periods presented have been adjusted to reflect the cost of such awards based on the grant-date fair value of the awards.

5

COACH, INC.

Notes to Condensed Consolidated Financial Statements  - (Continued)
Quarters and Six Months Ended December 31, 2005 and January 1, 2005
(dollars and shares in thousands, except per share data)
(unaudited)

The Company maintains several share-based compensation plans which are more fully described below. During the second quarters of fiscal 2006 and fiscal 2005, total compensation cost charged against income for these plans was $17,079 and $13,224, respectively and total income tax benefit recognized in the income statement from these plans was $6,839 and $5,025, respectively. During the first six months of fiscal 2006 and fiscal 2005, total compensation cost charged against income for these plans was $30,080 and $25,409, respectively and total income tax benefit recognized in the income statement from these plans was $12,045 and $9,655, respectively.

The following table details the modified retrospective application impact of SFAS 123R on previously reported amounts:

Quarter ended January 1, 2005				Adjusted				As Previously Reported
Selling, general and administrative expenses				$	191,478			$	179,833
Operating income					211,490				223,135
Income before provision for income taxes and minority interest					214,959				226,604
Provision for income taxes					81,684				86,109
Net income					126,903				134,123
Earnings per share:
Basic					0.33				0.35
Diluted					0.32				0.34
Six months ended January 1, 2005
Selling, general and administrative expenses				$	349,095			$	326,572
Operating income					312,047				334,570
Income before provision for income taxes and minority interest					318,026				340,549
Provision for income taxes					120,849				129,408
Net income					187,884				201,848
Earnings per share:
Basic					0.50				0.53
Diluted					0.48				0.52
Net cash provided by operating activities					242,751				292,517
Net cash provided by (used in) financing activities					40,913				(8,853	)
At July 2, 2005
Deferred income taxes				$	54,545			$	31,520
Total assets					1,370,157				1,347,132
Accrued liabilities					188,234				188,353
Total current liabilities					265,661				265,780
Total liabilities					314,237				314,356
Capital in excess of par value					579,329				465,015
Retained earnings					484,971				576,141
Total stockholders' equity					1,055,920				1,032,776
Total liabilities and stockholders' equity					1,370,157				1,347,132

6

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COACH, INC.

Notes to Condensed Consolidated Financial Statements  - (Continued)
Quarters and Six Months Ended December 31, 2005 and January 1, 2005
(dollars and shares in thousands, except per share data)
(unaudited)

Coach Stock-Based Plans. Coach maintains the 2000 Stock Incentive Plan, the 2000 Non-Employee Director Stock Plan and the 2004 Stock Incentive Plan to award stock options and other forms of equity compensation to certain members of Coach management and the outside members of its Board of Directors. The 2000 Stock Incentive Plan and the 2000 Non-Employee Director Stock Plan were approved by Coach’s stockholders during fiscal 2002. The 2004 Stock Incentive Plan was approved by Coach’s stockholders during fiscal 2005. The exercise price of each stock option equals 100% of the market price of Coach’s stock on the date of grant and generally has a maximum term of 10 years. Options generally vest ratably over three years.

For options granted under Coach’s stock option plans prior to July 1, 2003, an active employee can receive a replacement stock option equal to the number of shares surrendered upon a stock-for-stock exercise. The exercise price of the replacement option is 100% of the market value at the date of exercise of the original option and will remain exercisable for the remaining term of the original option. Replacement stock options generally vest six months from the grant date.

A summary of options held by Coach employees under the Coach option plans is as follows:

				Number of Coach Outstanding Options				Weighted- Average Exercise Price				Exercisable Options				Weighted- Average Exercise Price
Outstanding at July 2, 2005					31,554			$	16.17				11,178			$	16.48
Granted					12,836				34.14
Exercised					(10,204	)			18.43
Canceled/expired					(503	)			18.38
Outstanding at December 31, 2005					33,683			$	22.30				10,722			$	14.11

The following table summarizes information about stock options under the Coach option plans at December 31, 2005:

				Options Outstanding												Options Exercisable
Range of Exercise Prices				Number Outstanding at December 31, 2005				Weighted- Average Remaining Contractual Life (Years)				Weighted- Average Exercise Price				Number Exercisable at December 31, 2005				Weighted- Average Exercise Price
$2.00 - 5.00					1,818				5.10			$	3.94				1,818			$	3.94
$5.01 - 10.00					2,600				6.41				6.73				2,266				6.48
$10.01 - 20.00					13,350				7.96				15.50				4,163				14.99
$20.01 - 35.75					15,915				7.47				32.64				2,475				27.09
					33,683				7.46			$	22.30				10,722			$	14.11

The fair value of each Coach option grant is estimated on the date of grant using the Black-Scholes option pricing model and the following weighted-average assumptions:

				Quarter Ended
				December 31, 2005				January 1, 2005
Expected lives (years)					2.83				1.50
Risk-free interest rate					4.20	%			2.50	%
Expected volatility					35.18	%			30.23	%
Dividend yield					—	%			—	%

7

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COACH, INC.

Notes to Condensed Consolidated Financial Statements  - (Continued)
Quarters and Six Months Ended December 31, 2005 and January 1, 2005
(dollars and shares in thousands, except per share data)
(unaudited)

During the first six months of fiscal 2006 and fiscal 2005, the weighted-average grant-date fair value of individual options granted was $8.92 and $3.21, respectively. At December 31, 2005, $109,891 of total unrecognized compensation cost related to non-vested awards is expected to be recognized over a weighted-average period of 1.8 years.

During the first six months of fiscal 2006 and fiscal 2005, the total intrinsic value of options exercised was $162,549 and $144,191 respectively. The total cash received from these option exercises was $53,314 and $37,427, respectively, and the actual tax benefit realized for the tax deductions from these option exercises was $64,572 and $54,793, respectively.

Employee Stock Purchase Plan. Under the Employee Stock Purchase Plan, full-time Coach employees are permitted to purchase a limited number of Coach common shares at 85% of market value. Compensation expense is calculated for the fair value of employees’ purchase rights using the Black-Scholes model.

Stock Unit Awards. Restricted stock unit awards of Coach common stock have been granted to employees as retention awards. The value of retention awards is determined based upon the fair value of Coach stock at the grant date. Stock awards are restricted and subject to forfeiture until the retention period is completed. The retention period is generally three years.

3.    Goodwill and Other Intangible Assets

The carrying value of goodwill as of December 31, 2005 and July 2, 2005, by operating segment, is as follows:

				Direct to Consumer				Indirect				Total
Balance at July 2, 2005				$	237,195			$	1,516			$	238,711
Coach Japan acquisition					(2,666	)			—				(2,666	)
Foreign exchange impact					(12,834	)			—				(12,834	)
Balance at December 31, 2005				$	221,695			$	1,516			$	223,211

See Note 13, ‘‘Acquisition of Coach Japan, Inc.’’ for additional information.

4.    Debt

Coach’s revolving credit facility (the ‘‘Bank of America facility’’) is available for seasonal working capital requirements or general corporate purposes and may be prepaid without penalty or premium. During the first six months of fiscal 2006 and fiscal 2005 there were no borrowings under the Fleet facility. Accordingly, as of December 31, 2005 and July 2, 2005, there were no outstanding borrowings under the Bank of America facility.

Coach pays a commitment fee of 10 to 25 basis points on any unused amounts of the Bank of America facility. Coach also pays interest of LIBOR plus 45 to 100 basis points on any outstanding borrowings. Both the commitment fee and the LIBOR margin are based on the Company’s fixed charge coverage ratio. At December 31, 2005, the commitment fee was 10 basis points and the LIBOR margin was 45 basis points.

The Bank of America facility contains various covenants and customary events of default. The Company has been in compliance with all covenants since the inception of the Bank of America facility.

8

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COACH, INC.

Notes to Condensed Consolidated Financial Statements  - (Continued)
Quarters and Six Months Ended December 31, 2005 and January 1, 2005
(dollars and shares in thousands, except per share data)
(unaudited)

Coach Japan has available credit facilities with several Japanese financial institutions. These facilities contain various covenants and customary events of default. Coach Japan has been in compliance with all covenants since the inception of the facilities. Coach, Inc. is not a guarantor on any of these facilities.

During the first six months of fiscal 2006 and fiscal 2005, the peak borrowings under the Japanese credit facilities were $21,568 and $50,461, respectively. As of December 31, 2005 and July 2, 2005, the outstanding borrowings under the Japanese facilities were $13,237 and $12,292, respectively.

5.    Earnings Per Share

Basic net income per share was calculated by dividing net income by the weighted-average number of shares outstanding during the period. Diluted net income per share was calculated similarly but includes potential dilution from the exercise of stock options and stock awards.

The following is a reconciliation of the weighted-average shares outstanding and calculation of basic and diluted earnings per share:

				Quarter Ended								Six Months Ended
				December 31, 2005				January 1, 2005				December 31, 2005				January 1, 2005
Net earnings				$	174,174			$	126,903			$	267,789			$	187,884
Total weighted-average basic shares					380,837				379,354				380,144				378,866
Dilutive securities: Employee benefit and stock award plans					1,900				2,959				1,824				2,887
Stock option programs					7,883				8,200				8,279				8,448
Total weighted-average diluted shares					390,620				390,513				390,247				390,201
Earnings per share:
Basic				$	0.46			$	0.33			$	0.70			$	0.50
Diluted				$	0.45			$	0.32			$	0.69			$	0.48

At December 31, 2005, options to purchase 9,626 shares of common stock were outstanding but not included in the computation of diluted earnings per share, as these options’ exercise prices, ranging from $33.77 to $35.75, were greater than the average market price of the common shares.

At January 1, 2005, options to purchase 4,024 shares of common stock were outstanding but not included in the computation of diluted earnings per share, as these options’ exercise prices, ranging from $24.46 to $28.03, were greater than the average market price of the common shares.

6.    Segment Information

The Company operates its business in two reportable segments: Direct to Consumer and Indirect. The Company's reportable segments represent channels of distribution that offer similar merchandise, service and marketing strategies. Sales of Coach products through Company operated stores in North America and Japan, the Internet and the Coach catalog constitute the Direct to Consumer segment. Indirect refers to sales of Coach products to other retailers. In deciding how to allocate resources and assess performance, Coach's executive officers regularly evaluate the sales and operating income of these segments. Operating income is the gross margin of the segment less direct expenses of the segment. Unallocated corporate expenses include production variances, general marketing, administration and information systems, as well as distribution and customer service expenses.

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COACH, INC.

Notes to Condensed Consolidated Financial Statements  - (Continued)
Quarters and Six Months Ended December 31, 2005 and January 1, 2005
(dollars and shares in thousands, except per share data)
(unaudited)

As a result of Coach’s acquisition of Sumitomo’s 50% interest in Coach Japan, the Company reevaluated the composition of its reportable segments and determined that Coach Japan should be a component of the Direct to Consumer segment. Previously, Coach Japan was included in the Indirect segment. All prior period information has been reclassified to include Coach Japan as a component of the Direct to Consumer segment.

Quarter Ended December 31, 2005				Direct to Consumer				Indirect				Corporate Unallocated				Total
Net sales				$	503,807			$	146,529			$	—			$	650,336
Operating income (loss)					245,275				94,070				(65,403	)			273,942
Interest income, net					—				—				6,990				6,990
Income (loss) before provision for income taxes and minority interest					245,275				94,070				(58,413	)			280,932
Provision for income taxes					—				—				106,758				106,758
Minority interest, net of tax					—				—				—				—
Depreciation and amortization					10,790				1,524				5,322				17,636
Total assets					702,074				103,194				953,895				1,759,163
Additions to long-lived assets					25,774				4,117				5,133				35,024
Quarter Ended January 1, 2005				Direct to Consumer				Indirect				Corporate Unallocated				Total
Net sales				$	5,959			$	115,800			$	—			$	531,759
Operating income (loss)					196,474				71,757				(56,741	)			211,490
Interest income, net					—				—				3,469				3,469
Income (loss) before provision for income taxes and minority interest					196,474				71,757				(53,272	)			214,959
Provision for income taxes					—				—				81,684				81,684
Minority interest, net of tax					—				—				6,372				6,372
Depreciation and amortization					9,808				1,091				2,306				13,205
Total assets					458,296				83,685				897,537				1,439,518
Additions to long-lived assets					23,842				1,695				4,133				29,670
Six Months Ended December 31, 2005				Direct to Consumer				Indirect				Corporate Unallocated				Total
Net sales				$	8,352			$	280,935			$	—			$	1,099,287
Operating income (loss)					368,850				177,492				(127,291	)			419,051
Interest income, net					—				—				12,877				12,877
Income (loss) before provision for income taxes and minority interest					368,850				177,492				(114,414	)			431,928
Provision for income taxes					—				—				164,139				164,139
Minority interest, net of tax					—				—				—				—
Depreciation and amortization					20,933				2,767				7,925				31,625
Total assets					702,074				103,194				953,895				1,759,163
Additions to long-lived assets					41,486				5,728				9,695				56,909

10

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COACH, INC.

Notes to Condensed Consolidated Financial Statements  - (Continued)
Quarters and Six Months Ended December 31, 2005 and January 1, 2005
(dollars and shares in thousands, except per share data)
(unaudited)

Six Months Ended January 1, 2005				Direct to Consumer				Indirect				Corporate Unallocated				Total
Net sales				$	659,573			$	216,251			$	—			$	875,824
Operating income (loss)					286,804				131,735				(106,492	)			312,047
Interest income, net					—				—				5,979				5,979
Income (loss) before provision for income taxes and minority interest					286,804				131,735				(100,513	)			318,026
Provision for income taxes					—				—				120,849				120,849
Minority interest, net of tax					—				—				9,293				9,293
Depreciation and amortization					19,002				2,228				4,576				25,806
Total assets					458,296				83,685				897,537				1,439,518
Additions to long-lived assets					37,891				2,700				5,866				46,457

The following is a summary of the common costs not allocated in the determination of segment performance:

				Quarter Ended								Six Months Ended
				December 31, 2005				January 1, 2005				December 31, 2005				January 1, 2005
Production variances				$	2,654			$	1,331			$	4,047			$	2,567
Advertising, marketing and design					(25,030	)			(20,612	)			(44,968	)			(35,729	)
Administration and information systems					(31,615	)			(28,096	)			(65,691	)			(56,025	)
Distribution and customer service					(11,412	)			(9,364	)			(20,679	)			(17,305	)
Total corporate unallocated				$	(65,403	)		$	(56,741	)		$	(127,291	)		$	(106,492	)

Geographic Area Information

As of December 31, 2005, Coach operated 203 retail stores and 84 factory stores in North America and 109 department store shop-in-shops, retail stores and factory stores in Japan, as well as distribution, product development and quality control locations in the United States, Italy, Hong Kong, China and South Korea. Geographic revenue information is based on the location of the customer. Geographic long-lived asset information is based on the physical location of the assets at the end of each period.

Quarter Ended December 31, 2005				United States				Japan				Other International				Total
Net sales				$	500,384			$	116,212			$	33,740			$	650,336
Long-lived assets					233,667				282,516				3,159				519,342
Quarter Ended January 1, 2005					United States				Japan				Other International				Total
Net sales				$	394,655			$	108,751			$	28,353			$	531,759
Long-lived assets					436,821				71,733				2,495				511,049
Six Months Ended December 31, 2005					United States				Japan				Other International				Total
Net sales				$	831,694			$	200,237			$	67,356			$	1,099,287
Long-lived assets					233,667				282,516				3,159				519,342
Six Months Ended January 1, 2005					United States				Japan				Other International				Total
Net sales				$	649,360			$	177,674			$	48,790			$	875,824
Long-lived assets					436,821				71,733				2,495				511,049

11

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COACH, INC.

Notes to Condensed Consolidated Financial Statements  - (Continued)
Quarters and Six Months Ended December 31, 2005 and January 1, 2005
(dollars and shares in thousands, except per share data)
(unaudited)

7.    Commitments and Contingencies

At December 31, 2005, the Company had outstanding letters of credit totaling $78,191. Of this amount, $15,122 relates to the letter of credit obtained in connection with leases transferred to the Company by the Sara Lee Corporation, for which Sara Lee retains contingent liability. The remaining letters of credit were issued for purchases of inventory and lease guarantees.

In the ordinary course of business, Coach is a party to several pending legal proceedings and claims. Although the outcome of such items cannot be determined with certainty, Coach's general counsel and management are of the opinion that the final outcome should not have a material effect on Coach's financial position, results of operations or cash flows.

Coach is also a party to employment agreements with certain key executives, which provide for compensation and other benefits as well as severance payments under certain circumstances. On August 22, 2005, the Company 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 Operation Officer. These amendments extend the terms of the executives’ employment agreements from July 2008 through August 2011. On November 8, 2005, Coach entered into five-year employment agreements with two key executives: Michael Tucci, President, North America Retail Division, and Michael F. Devine, III, Senior Vice President and Chief Financial Officer. The terms of these employment agreements run through June 30, 2010.

8.    Derivative Instruments and Hedging Activities

Coach is exposed to market risk from foreign currency exchange rate fluctuations with respect to Coach Japan as a result of its U.S. dollar denominated inventory purchases. Coach Japan enters into certain foreign currency derivative contracts, primarily foreign exchange forward contracts, to manage these risks. These transactions are in accordance with Company risk management policies. Coach does not enter into derivative transactions for speculative or trading purposes.

Coach is also exposed to market risk from foreign currency exchange rate fluctuations with respect to Coach Japan as a result of its $231,000 U.S. dollar denominated fixed rate intercompany loan from Coach. To manage this risk, on July 1, 2005, Coach Japan entered into a cross currency swap transaction, the terms of which include an exchange of a U.S. dollar fixed interest rate for a yen fixed interest rate. The loan matures in 2010, at which point the swap requires an exchange of yen and U.S. dollar based principals.

The fair value of open foreign currency derivatives included in current assets at December 31, 2005 and July 2, 2005 was $10,349 and $1,535, respectively. For the six months ended December 31, 2005 and January 1, 2005, changes in the fair value of contracts designated and effective as cash flow hedges resulted in a reduction to equity as a charge to other comprehensive income of $1,811 and $703, respectively, net of taxes.

9.    Stock Repurchase Program

On May 11, 2005, the Coach Board of Directors approved a common stock repurchase program to acquire up to $250,000 of Coach’s outstanding common stock. Purchases of Coach stock may be made from time to time, subject to market conditions and at prevailing market prices, through open market purchases. Repurchased shares become authorized but unissued shares and may be issued in the future for general corporate and other purposes. The Company may terminate or limit the stock repurchase program at any time.

12

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COACH, INC.

Notes to Condensed Consolidated Financial Statements  - (Continued)
Quarters and Six Months Ended December 31, 2005 and January 1, 2005
(dollars and shares in thousands, except per share data)
(unaudited)

During the second quarter of fiscal 2006, the Company repurchased and retired 2,043 shares at an average cost of $32.07 per share. The Company did not repurchase any shares during the second quarter of fiscal 2005.

During the first six months of fiscal 2006 and fiscal 2005, the Company repurchased and retired 2,964 and 4,860 shares, respectively, of common stock, at an average cost of $32.22 and $19.53, respectively, per share.

As of December 31, 2005, approximately $154,000 remained available for future repurchases under the existing program.

10.    Business Interruption Insurance

In the fiscal year ended June 29, 2002, Coach’s World Trade Center location was completely destroyed as a result of the September 11^th attack. Inventory and fixed asset losses were filed with the Company’s insurers and fully recovered. Losses covered under the Company’s business interruption insurance program were also filed with the insurers. During the quarters ended December 31, 2005 and January 1, 2005, Coach received $1,825 and $1,027, respectively, under its business interruption coverage. For the six months ended December 31, 2005 and January 1, 2005, Coach received $2,025 and $2,204, respectively, under its business interruption coverage. These amounts are included as a reduction of selling, general and administrative expenses.

During the second quarter of fiscal 2006, the Company reached a final settlement with its insurance carriers related to losses covered under the business interruption insurance program. Accordingly, the Company does not expect to receive any business interruption proceeds related to the World Trade Center location in the future.

11.    Retirement Plans

The components of net periodic pension cost for the Coach Leatherware Company, Inc. Supplemental Pension Plan are:

				Quarter Ended								Six Months Ended
				December 31, 2005				January 1, 2005				December 31, 2005				January 1, 2005
Service cost				$	3			$	3			$	6			$	7
Interest cost					81				77				163				154
Expected return on plan assets					(63	)			(45	)			(127	)			(90	)
Recognized actuarial loss					57				48				114				95
Net periodic pension cost				$	78			$	83			$	156			$	166

12.    Hurricane Losses

During the first quarter of fiscal 2006, three Coach locations in the Gulf Coast area were damaged and temporarily closed as a result of Hurricane Katrina. The Company is currently evaluating the damage to its property at these stores. During the second quarter, Coach notified its insurer of the Company’s intent to file insurance claims for any property losses as well as losses related to business interruption. Coach expects to file these claims with the insurer in the third quarter of fiscal 2006. The Company expects to substantially recover any losses, net of policy deductibles and does not believe that these losses will have a material impact on the consolidated financial statements.

13

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COACH, INC.

Notes to Condensed Consolidated Financial Statements  - (Continued)
Quarters and Six Months Ended December 31, 2005 and January 1, 2005
(dollars and shares in thousands, except per share data)
(unaudited)

13.    Acquisition of Coach Japan, Inc.

During the second quarter of fiscal 2006, the Company completed its purchase price allocation related to the July 1, 2005 acquisition of Sumitomo’s 50% interest in Coach Japan, Inc. At the time of the acquisition, Coach recorded the 50% interest in the assets and liabilities that were acquired through the transaction at fair values. The initial recorded fair values, purchase price allocation adjustments and final purchase price allocations are as follows:

Assets and liabilities acquired				As Previously Reported				Adjustments				Final Purchase PriceAllocation
Trade accounts receivable				$	15,369			$	—			$	15,369
Inventory					43,089				2,666				45,755
Property and equipment					21,848				—				21,848
Customer list					250				—				250
Goodwill					225,263				(2,666	)			222,597
Other assets					24,969				—				24,969
Other liabilities					30,672				—				30,672

14.    Recent Accounting Developments

In November 2004, the Financial Accounting Standards Board (‘‘FASB’’) issued SFAS No. 151, ‘‘Inventory Costs – an amendment of ARB No. 43, Chapter 4’’. SFAS 151 is an amendment of Accounting Research Board Opinion No. 43 and sets standards for the treatment of abnormal amounts of idle facility expense, freight, handling costs and spoilage. SFAS 151 is effective for fiscal years beginning after June 15, 2005. The adoption of SFAS 151 did not have a material impact on the Company’s financial statements.

In December 2004, the FASB issued Staff Position No. 109-2, ‘‘Accounting and Disclosure Guidance for the Foreign Earnings Repatriation Provision within the American Jobs Creation Act of 2004’’ (‘‘FSP 109-2’’). FSP 109-2 provides guidance under SFAS 109, ‘‘Accounting for Income Taxes,’’ with respect to recording the potential impact of the repatriation provisions of the American Jobs Creation Act of 2004 (the ‘‘Jobs Act’’) on enterprises’ income tax expense and deferred tax liability. FSP 109-2 states that an enterprise is allowed time beyond the financial reporting period of enactment to evaluate the effect of the Jobs Act on its plan for reinvestment or repatriation of foreign earnings for purposes of applying SFAS 109. As the Company does not plan to make any dividends under this provision, FSP 109-2 is not expected to have a material impact on the Company’s consolidated financial statements.

In December 2004, the FASB issued SFAS No. 153, ‘‘Exchanges of Nonmonetary Assets – an amendment of APB Opinion No. 29’’, which eliminates certain narrow differences between APB 29 and international accounting standards. SFAS 153 is effective for fiscal periods beginning on or after June 15, 2005. The adoption of SFAS 153 did not have a material impact on the Company’s consolidated financial statements.

In March 2005, the SEC issued Staff Accounting Bulletin (‘‘SAB’’) No. 107 ‘‘Share-Based Payment’’. SAB 107 expresses views of the SEC staff regarding the interaction between SFAS 123R and certain SEC rules and regulations and provides the staff’s views regarding the valuation of share-based payment arrangements. The Company adopted SFAS 123R effective July 3, 2005. See Footnote 2 for further information.

In March 2005, the FASB issued SFAS Interpretation Number 47 (‘‘FIN 47’’), ‘‘Accounting for Conditional Asset Retirement Obligations’’. FIN 47 provides clarification regarding the meaning of the

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COACH, INC.

Notes to Condensed Consolidated Financial Statements  - (Continued)
Quarters and Six Months Ended December 31, 2005 and January 1, 2005
(dollars and shares in thousands, except per share data)
(unaudited)

term ‘‘conditional asset retirement obligation’’ as used in FASB 143, ‘‘Accounting for Asset Retirement Obligations’’. This Interpretation is effective no later than the end of fiscal years ending after December 15, 2005. The Company is currently evaluating the impact of FIN 47 on the consolidated financial statements.

In May 2005, the FASB issued SFAS No. 154, ‘‘Accounting Changes and Error Corrections – a replacement of APB Opinion No. 20 and FASB Statement No. 3’’. SFAS 154 provides guidance on the accounting for and reporting of accounting changes and error corrections. This statement is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005. The Company does not expect the adoption of SFAS 154 to have a material impact on the Company’s consolidated financial statements.

In June 2005, the Emerging Issues Task Force (‘‘EITF’’) reached consensus on EITF 05-6, ‘‘Determining the Amortization Period for Leasehold Improvements’’. Under EITF 05-6, leasehold improvements placed in service significantly after and not contemplated at or near the beginning of the lease term, should be amortized over the lesser of the useful life of the assets or a term that includes renewals that are reasonably assured at the date the leasehold improvements are purchased. EITF 05-6 is effective for periods beginning after June 29, 2005. The adoption of EITF 05-6 did not have a material impact on the consolidated financial statements.

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ITEM 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion of Coach’s financial condition and results of operations should be read together with our condensed consolidated financial statements and related notes thereto which are included herein.

Executive Overview

Founded in 1941, Coach is a designer and marketer of high-quality, modern American classic accessories. Coach’s primary product offerings include handbags, accessories, business cases, outerwear and related accessories and weekend and travel accessories. Coach generates revenue by selling its products directly to consumers, indirectly through wholesale customers and by licensing its brand name to select manufacturers. Direct to consumer sales consists of sales of Coach products in Company operated stores in North America and Japan, Coach’s online store and our catalogs. Indirect sales consist of sales of Coach products to department store locations in the United States as well as international department stores, freestanding retail locations and specialty retailers. Coach generates additional wholesale sales through business-to-business programs, in which companies purchase Coach products to use as gifts or incentive awards. Licensing revenues consist of royalties paid to Coach under licensing arrangements with select partners for the sale of Coach branded watches, footwear, eyewear and office furniture.

During the quarter ended December 31, 2005, net sales increased 22.3% to $650.3 million from $531.8 million during the same period of fiscal 2005. The increase in net sales is attributable to growth across all distribution channels and key categories. Operating income for the quarter ended December 31, 2005 increased 29.5% to $274.0 million from $211.5 million generated in the same period of fiscal 2005, driven by these increases in net sales and improved gross margins, partially offset by an increase in selling, general and administrative expenses. Net income for the quarter ended December 31, 2005 increased 37.2% to $174.2 million from $126.9 million generated in the same period of fiscal 2005. The increase in net income is attributable to this increased operating income and the elimination of minority interest expense, partially offset by a higher provision for income taxes.

During the six months ended December 31, 2005, net sales increased 25.5% to $1,099.3 million from $875.8 million during the same period of fiscal 2005. The increase in net sales is attributable to growth across all distribution channels and key categories. Operating income for the six months ended December 31, 2005 increased 34.3% to $419.0 million from $312.0 million generated in the same period of fiscal 2005, driven by these increases in net sales and improved gross margins, partially offset by an increase in selling, general and administrative expenses. Net income for the six months ended December 31, 2005 increased 42.5% to $267.8 million from $187.9 million generated in the same period of fiscal 2005. The increase in net income is attributable to this increased operating income and the elimination of minority interest expense, partially offset by a higher provision for income taxes.

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Results of Operations

The following is a discussion of the results of operations for the second quarter and first six months of fiscal 2006 compared to the second quarter and first six months of fiscal 2005 and a discussion of the changes in financial condition during the first six months of fiscal 2006.

Second Quarter Fiscal 2006 Compared to Second Quarter Fiscal 2005

Consolidated statements of income for the second quarter of fiscal 2006 compared to the second quarter of fiscal 2005 are as follows:

				Quarter Ended
				December 31, 2005								January 1, 2005
				(amounts in millions, except per share data) (unaudited)
				$				% of net sales				$				% of net sales
Net sales				$	648.0				99.6	%		$	530.4				99.7	%
Licensing revenue					2.3				0.4				1.4				0.3
Total net sales					650.3				100.0				531.8				100.0
Cost of sales					145.6				22.4				128.8				24.2
Gross profit					504.7				77.6				403.0				75.8
Selling, general and administrative expenses					230.7				35.5				191.5				36.0
Operating income					274.0				42.1				211.5				39.8
Interest income, net					7.0				1.1				3.5				0.7
Income before provision for income taxes and minority interest					281.0				43.2				215.0				40.4
Provision for income taxes					106.8				16.4				81.7				15.4
Minority interest, net of tax					—				0.0				6.4				1.2
Net income				$	174.2				26.8	%		$	126.9				23.9	%
Net income per share:
Basic				$	0.46							$	0.33
Diluted				$	0.45							$	0.32
Weighted-average number of shares:
Basic					380.8								379.4
Diluted					390.6								390.5

Net Sales

Net sales by business segment in the second quarter of fiscal 2006 compared to the second quarter of fiscal 2005 are as follows: 

				Quarter Ended
				(unaudited)
				Net Sales												Percentage of Total Net Sales
				December 31, 2005				January 1, 2005				Rate of Increase				December 31, 2005				January 1, 2005
				(dollars in millions)								(FY06 v. FY05)
Direct to consumer				$	503.8			$	416.0				21.1	%			77.5	%			78.2	%
Indirect					146.5				115.8				26.5	%			22.5				21.8
Total net sales				$	650.3			$	531.8				22.3	%			100.0	%			100.0	%

As a result of Coach’s acquisition of Sumitomo’s 50% interest in Coach Japan, the Company reevaluated the composition of its reportable segments and determined that Coach Japan should be a component of the

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Direct to Consumer segment. Previously, Coach Japan was included in the Indirect segment. All prior period information has been reclassified to include Coach Japan as a component of the Direct to Consumer segment.

Direct to Consumer. Net sales increased 21.1% to $503.8 million during the second quarter of fiscal 2006 from $416.0 million during the same period in fiscal 2005, driven by increased comparable store sales, new store sales and expanded store sales in our North America and Japan stores.

In North America, sales growth in comparable stores, defined as those stores open for at least the previous twelve months, was 12.8% for retail stores and 30.2% for factory stores. Comparable store sales growth for the entire North America store chain was 19.9%, which accounted for $54.6 million of the net sales increase. Since the end of the second quarter of fiscal 2005, Coach has opened 18 retail stores and five factory stores. Sales from these new stores, as well as the non-comparable portion of sales from stores opened during the second quarter of fiscal 2005, accounted for $19.7 million of the net sales increase.

In Japan, we opened 10 new locations since the end of the second quarter of fiscal 2005. Sales from these new stores, as well as the non-comparable portion of sales from stores opened during the second quarter of fiscal 2005, accounted for $11.0 million of the net sales increase. In addition, sales growth in comparable stores accounted for $7.5 million of the net sales increase.

Since the end of the second quarter of fiscal 2005, Coach also expanded seven locations in North America and nine locations in Japan. Sales from these expanded stores, as well as the non-comparable portion of sales from stores expanded during the second quarter of fiscal 2005, accounted for $4.4 million and $3.0 million, respectively, of the net sales increase.

Sales growth in the Internet business accounted for the remaining sales increase. These increases were slightly offset by store closures and the impact of foreign currency exchange rates. Since the end of the second quarter of fiscal 2005, Coach has closed two factory stores in North America and five locations in Japan. The impact of foreign currency exchange rates resulted in a decrease in Coach Japan’s reported net sales of $12.1 million.

Indirect. Net sales increased 26.5% to $146.5 million in the second quarter of fiscal 2006 from $115.8 million during the same period of fiscal 2005. This increase was driven by growth primarily in the U.S. wholesale, business-to-business and international wholesale divisions, which contributed increased sales of $16.3 million, $9.0 million and $5.8 million, respectively, as compared to the same period in the prior year. These increases were slightly offset by decreases in other indirect channels.

Gross Profit

Gross profit increased 25.2% to $504.7 million in the second quarter of fiscal 2006 from $403.0 million during the same period of fiscal 2005. Gross margin increased 180 basis points to 77.6% in the second quarter of fiscal 2006 from 75.8% during the same period of fiscal 2005. This improvement was driven by the continuing impact of sourcing cost benefits and a shift in product mix, reflecting increased penetration of higher margin collections, slightly offset by a shift in channel mix, as our lower gross margin channels grew faster than the business as a whole.

The following chart illustrates the gross margin performance Coach has experienced over the last six quarters.

				Fiscal Year Ended July 2, 2005																Fiscal Year Ending July 1, 2006
				Q1				Q2				Q3				Q4				Q1				Q2
Gross margin					75.0	%			75.8	%			78.1	%			77.6	%			76.0	%			77.6	%

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased 20.5% to $230.7 million in the second quarter of fiscal 2006 from $191.5 million during the same period of fiscal 2005. As a percentage of net sales, selling, general and administrative expenses during the second quarter of fiscal 2006 were 35.5% compared to 36.0%

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during the second quarter of fiscal 2005. This improvement is attributable to leveraging our expense base on higher sales.

Selling expenses increased 22.4% to $158.7 million, or 24.4% of net sales, in the second quarter of fiscal 2006 from $129.7 million, or 24.4% of net sales, during the same period of fiscal 2005. The dollar increase in these expenses was primarily due to an increase in operating expenses associated with North American retail stores and Coach Japan. The $21.9 million increase in North American retail stores operating expenses is attributable to increased variable expenses to support sales growth and operating expenses associated with new and expanded stores. Domestically, Coach opened 18 new retail stores and five new factory stores since the end of the second quarter of fiscal 2005. Expenses from these new stores, as well as the non-comparable portion of expenses from stores opened during the second quarter of fiscal 2005, increased total expenses by $6.3 million. Coach also expanded seven domestic locations since the end of the second quarter of fiscal 2005. Expenses from these expanded stores, as well as the non-comparable portion of expenses from stores expanded during the second quarter of fiscal 2005, increased total expenses by $3.3 million. The increase in Coach Japan expenses was $4.8 million, driven by operating expenses of new stores and increased variable expenses related to higher sales. In addition, the impact of foreign currency exchange rates decreased reported expenses by $6.5 million. The remaining increase in selling expenses was due to increased variable expenses to support sales growth.

Advertising, marketing, and design costs increased 19.2% to $28.5 million, or 4.4% of net sales, in the second quarter of fiscal 2006, from $23.9 million, or 4.5% of net sales, during the same period of fiscal 2005. The dollar increase was primarily due to increased staffing costs and design expenditures.

Distribution and customer service expenses increased to $11.9 million in the second quarter of fiscal 2006 from $9.9 million during the same period of fiscal 2005. The dollar increase in these expenses was primarily due to higher sales volumes. However, efficiency gains at the distribution and customer service facility resulted in an improvement in the ratio of these expenses to net sales from 1.9% in the second quarter of fiscal 2005 to 1.8% in the second quarter of fiscal 2006.

Administrative expenses increased 12.9% to $31.6 million, or 4.9% of net sales, in the second quarter of fiscal 2006 from $28.0 million, or 5.2% of net sales, during the same period of fiscal 2005. The dollar increase in these expenses was primarily due to increased share-based compensation costs and employee staffing costs, offset by an increase in the receipt of business interruption insurance proceeds.

Interest Income, Net

Interest income, net was $7.0 million in the second quarter of fiscal 2006 as compared to $3.5 million in the second quarter of fiscal 2005. The dollar increase was primarily due to higher returns on our investments.

Income Taxes

The effective tax rate was 38.0% in the second quarter of fiscal 2006 and fiscal 2005.

Minority Interest, Net of Tax

Minority interest expense was $0 in the second quarter of fiscal 2006 as compared to $6.4 million, or 1.2% of net sales, in the second quarter of fiscal 2005. This decrease was due to Coach’s purchase of Sumitomo’s 50% interest in Coach Japan on July 1, 2005, which eliminated minority interest in the first quarter of fiscal 2006 onward.

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First Six Months Fiscal 2006 Compared to First Six Months Fiscal 2005

Consolidated statements of income for the first six months of fiscal 2006 compared to the first six months of fiscal 2005 are as follows:

				Six Months Ended
				December 31, 2005								January 1, 2005
				(amounts in millions, except per share data) (unaudited)
				$				% of net sales				$				% of net sales
Net sales				$	1,095.0				99.6	%		$	872.9				99.7	%
Licensing revenue					4.3				0.4				2.9				0.3
Total net sales					1,099.3				100.0				875.8				100.0
Cost of sales					253.3				23.0				214.7				24.5
Gross profit					846.0				77.0				661.1				75.5
Selling, general and administrative expenses					427.0				38.8				349.1				39.9
Operating income					419.0				38.1				312.0				35.6
Interest income, net					12.9				1.2				6.0				0.7
Income before provision for income taxes and minority interest					431.9				39.3				318.0				36.3
Provision for income taxes					164.1				14.9				120.8				13.8
Minority interest, net of tax					—				0.0				9.3				1.1
Net income				$	267.8				24.4	%		$	187.9				21.5	%
Net income per share:
Basic				$	0.70							$	0.50
Diluted				$	0.69							$	0.48
Weighted-average number of shares:
Basic					380.1								378.9
Diluted					390.2								390.2

Net Sales

Net sales by business segment in the first six months of fiscal 2006 compared to the first six months of fiscal 2005 are as follows:

				Six Months Ended
				(unaudited)
				Net Sales												Percentage of Total Net Sales
				December 31, 2005				January 1, 2005				Rate of Increase				December 31, 2005				January 1, 2005
				(dollars in millions)								(FY06 v. FY05)
Direct to consumer				$	818.4			$	659.6				24.1	%			74.4	%			75.3	%
Indirect					280.9				216.2				29.9	%			25.6				24.7
Total net sales				$	1,099.3			$	875.8				25.5	%			100.0	%			100.0	%

Direct to Consumer. Net sales increased 24.1% to $818.4 million during the first six months of fiscal 2006 from $659.6 million during the same period in fiscal 2005, driven by increased comparable store sales, new store sales and expanded store sales in our North America and Japan stores.

In North America, sales growth in comparable stores, defined as those stores open for at least the previous twelve months, was 13.3% for retail stores and 32.4% for factory stores. Comparable store sales growth for the entire North America store chain was 21.7%, which accounted for $90.5 million of the net sales increase. Since the end of the first six months of fiscal 2005, Coach has opened 18 retail stores and five factory stores. Sales

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from these new stores, as well as the non-comparable portion of sales from stores opened during the first six months of fiscal 2005, accounted for $36.5 million of the net sales increase.

In Japan, we opened 10 new locations since the end of the first six months of fiscal 2005. Sales from these new stores, as well as the non-comparable portion of sales from stores opened during the first six months of fiscal 2005, accounted for $20.9 million of the net sales increase. In addition, sales growth in comparable stores accounted for $12.5 million of the net sales increase.

Since the end of the first six months of fiscal 2005, Coach also expanded seven locations in North America and nine locations in Japan. Sales from these expanded stores, as well as the non-comparable portion of sales from stores expanded during the first six months of fiscal 2005, accounted for $7.6 million and $5.9 million, respectively, of the net sales increase.

Sales growth in the Internet business accounted for the remaining sales increase. These increases were slightly offset by store closures and the impact of foreign currency exchange rates. Since the end of the first six months of fiscal 2005, Coach has closed two factory stores in North America and five locations in Japan. The impact of foreign currency exchange rates resulted in a decrease in Coach Japan’s reported net sales of $12.7 million.

Indirect. Net sales increased 29.9% to $280.9 million in the first six months of fiscal 2006 from $216.2 million during the same period of fiscal 2005. This increase was driven by growth primarily in the U.S. wholesale, international wholesale and business-to-business divisions, which contributed increased sales of $33.7 million, $19.3 million and $9.9 million, respectively, as compared to the same period in the prior year. The remaining net sales increase is attributable to increases in other indirect channels.

Gross Profit

Gross profit increased 28.0% to $846.0 million in the first six months of fiscal 2006 from $661.1 million during the same period of fiscal 2005. Gross margin increased 150 basis points to 77.0% in the first six months of fiscal 2006 from 75.5% during the same period of fiscal 2005. This improvement was driven by the continuing impact of sourcing cost benefits and a shift in product mix, reflecting increased penetration of higher margin collections, slightly offset by a shift in channel mix, as our lower gross margin channels grew faster than the business as a whole.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased 22.3% to $427.0 million in the first six months of fiscal 2006 from $349.1 million during the same period of fiscal 2005. As a percentage of net sales, selling, general and administrative expenses during the first six months of fiscal 2006 were 38.8% compared to 39.9% during the first six months of fiscal 2005. This improvement is attributable to leveraging our expense base on higher sales.

Selling expenses increased 23.5% to $289.1 million, or 26.3% of net sales, in the first six months of fiscal 2006 from $234.0 million, or 26.7% of net sales, during the same period of fiscal 2005. The dollar increase in these expenses was primarily due to an increase in operating costs associated with North American retail stores and Coach Japan. The $38.9 million increase in North American retail stores operating expenses is attributable to increased variable expenses to support sales growth and operating expenses associated with new stores. Domestically, Coach opened 18 new retail stores and five new factory stores since the end of the first six months of fiscal 2005. Expenses from these new stores, as well as the non-comparable portion of expenses from stores opened during the first six months of fiscal 2005, increased total expenses by $11.8 million. Coach also expanded seven domestic locations since the end of the second quarter of fiscal 2005. Expenses from these expanded stores, as well as the non-comparable portion of expenses from stores expanded during the second quarter of fiscal 2005, increased total expenses by $5.0 million. The increase in Coach Japan expenses was $12.0 million, driven by operating expenses of new stores and increased variable expenses related to higher sales. In addition, the impact of foreign currency exchange rates decreased reported expenses by $6.8 million. The remaining increase in selling expenses was due to increased variable expenses to support sales growth.

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Advertising, marketing, and design costs increased 23.5% to $50.4 million, or 4.6% of net sales, in the first six months of fiscal 2006 from $40.8 million, or 4.7% of net sales, during the same period of fiscal 2005. The dollar increase was primarily due to increased employee staffing costs and design expenditures.

Distribution and customer service expenses increased to $21.8 million in the first six months of fiscal 2006 from $18.3 million during the same period of fiscal 2005. The dollar increase in these expenses was primarily due to higher sales volumes. However, efficiency gains at the distribution and customer service facility resulted in an improvement in the ratio of these expenses to net sales from 2.1% in the first six months of fiscal 2005 to 2.0% in the first six months of fiscal 2006.

Administrative expenses increased by 17.3% to $65.7 million, or 6.0% of net sales, in the first six months of fiscal 2006 from $56.0 million, or 6.4% of net sales, during the same period of fiscal 2005. The dollar increase in these expenses was primarily due to increased share-based compensation costs, employee staffing costs and professional fees.

Interest Income, Net

Interest income, net was $12.9 million in the first six months of fiscal 2006 as compared to $6.0 million in the first six months of fiscal 2005. The dollar increase was primarily due to higher returns on our investments.

Income Taxes

The effective tax rate was 38.0% in the first six months of fiscal 2006 and fiscal 2005.

Minority Interest, Net of Tax

Minority interest expense was $0 in the first six months of fiscal 2006 as compared to $9.3 million, or 1.1% of net sales, in the first six months of fiscal 2005. This decrease was due to Coach’s purchase of Sumitomo’s 50% interest in Coach Japan on July 1, 2005, which eliminated minority interest in the first quarter of fiscal 2006 onward.

FINANCIAL CONDITION

Liquidity and Capital Resources

Net cash provided by operating activities was $303.6 million for the first six months of fiscal 2006 compared to $242.8 million in the first six months of fiscal 2005. The year-to-year improvement of $60.8 million was primarily the result of a $79.9 million increase in earnings during the first six months of fiscal 2006. This increase in earnings was offset by a $9.3 decrease in minority interest expense, as a result of Coach’s acquisition of Sumitomo’s 50% interest in Coach Japan on July 1, 2005 as well as other changes in assets and liabilities as a result of normal operating fluctuations.

Net cash used in investing activities was $289.0 million in the first six months of fiscal 2006 compared to $249.7 million in the first six months of fiscal 2005. The increase in net cash used is primarily attributable to an additional $34.9 million of net purchases of investments. In addition, capital expenditures, which related primarily to new and renovated retail stores in the United States and Japan, increased by $4.4 million.

Net cash provided by financing activities was $15.9 million in the first six months of fiscal 2006 compared to $40.9 million provided in the comparable period of fiscal 2005. The decrease in net cash provided primarily resulted from a $47.8 million decrease in borrowings on our Japanese credit facilities, offset by a $15.9 increase in proceeds from the exercise of stock options and a $7.5 million increase in excess tax benefit from stock options.

Coach’s revolving credit facility (the ‘‘Bank of America facility’’) is available for seasonal working capital requirements or general corporate purposes and may be prepaid without penalty or premium. During the first six

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months of fiscal 2006 and fiscal 2005 there were no borrowings under the Bank of America facility. Accordingly, as of December 31, 2005 and July 2, 2005, there were no outstanding borrowings under the Bank of America facility.

Coach pays a commitment fee of 10 to 25 basis points on any unused amounts of the Bank of America facility. Coach also pays interest of LIBOR plus 45 to 100 basis points on any outstanding borrowings. Both the commitment fee and the LIBOR margin are based on the Company’s fixed charge coverage ratio. At December 31, 2005, the commitment fee was 10 basis points and the LIBOR margin was 45 basis points.

The Bank of America facility contains various covenants and customary events of default. Coach has been in compliance with all covenants since the inception of the Bank of America facility.

To provide funding for working capital and general corporate purposes, Coach Japan has available credit facilities with several Japanese financial institutions. These facilities allow a maximum borrowing of 7.6 billion yen or approximately $65 million at December 31, 2005. Interest is based on the Tokyo Interbank rate plus a margin of up to 50 basis points.

These Japanese facilities contain various covenants and customary events of default. Coach Japan has been in compliance with all covenants since the inception of these facilities. Coach, Inc. is not a guarantor on these facilities.

During the first six months of fiscal 2006 and fiscal 2005, the peak borrowings under the Japanese credit facilities were $21.6 million and $50.5 million, respectively. As of December 31, 2005 and July 2, 2005, the outstanding borrowings under the Japanese facilities were $13.2 million and $12.3 million, respectively.

On May 11, 2005, the Coach Board of Directors approved a common stock repurchase program to acquire up to $250 million of Coach’s outstanding common stock. Purchases of Coach stock may be made from time to time, subject to market conditions and at prevailing market prices, through open market purchases. Repurchased shares become authorized but unissued shares and may be issued in the future for general corporate and other uses. Coach may terminate or limit the stock repurchase program at any time.

During the first six months of fiscal 2006 and fiscal 2005, the Company repurchased 3.0 million and 4.9 million shares, respectively, of common stock, at an average cost of $32.22 and $19.53, respectively, per share.

As of December 31, 2005, approximately $154 million remained available for future repurchases under the existing program.

We expect that fiscal 2006 capital expenditures will be approximately $120 million and will relate to the following: new retail and factory stores as well as store expansions both in the United States and Japan, corporate facilities, department store and distributor location renovations and information systems. In the U.S., we plan to open about 30 new stores, of which 13 were opened by the end of the first six months of fiscal 2006. In Japan, we plan to open about 12 new locations, of which six were opened by the end of the first six months of fiscal 2006. We intend to finance these investments from internally generated cash flows, on hand cash, or by using funds from our Japanese revolving credit facilities.

Coach experiences significant seasonal variations in its working capital requirements. During the first fiscal quarter Coach builds inventory for the holiday selling season, opens new retail stores and generates higher levels of trade receivables. In the second fiscal quarter its working capital requirements are reduced substantially as Coach generates greater consumer sales and collects wholesale accounts receivable. During the first six months of fiscal 2006, Coach purchased approximately $274 million of inventory, which was funded by operating cash flow and by using funds from our Japanese revolving credit facilities.

Management believes that cash flow from operations and on hand cash will provide adequate funds for the foreseeable working capital needs, planned capital expenditures and the common stock repurchase program. Any

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future acquisitions, joint ventures or other similar transactions may require additional capital and there can be no assurance that any such capital will be available to Coach on acceptable terms or at all. Coach’s ability to fund its working capital needs, planned capital expenditures and scheduled debt payments, and to comply with all of the financial covenants under its debt agreements, depends on its future operating performance and cash flow, which in turn are subject to prevailing economic conditions and to financial, business and other factors, some of which are beyond Coach’s control.

Reference should be made to our most recent Annual Report on Form 10-K for additional information regarding liquidity and capital resources.

Seasonality

Because Coach products are frequently given as gifts, the Company has historically realized, and expects to continue to realize, higher sales and operating income in the second quarter of its fiscal year, which includes the holiday months of November and December. In addition, fluctuations in sales and operating income in any fiscal quarter are affected by the timing of seasonal wholesale shipments and other events affecting retail sales. However, over the past several years, we have achieved higher levels of growth in the non-holiday quarters, which has reduced these seasonal fluctuations. We expect these trends to continue.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our discussion of results of operations and financial condition relies on our consolidated financial statements that are prepared based on certain critical accounting policies that require management to make judgements and estimates that are subject to varying degrees of uncertainty. We believe that investors need to be aware of these policies and how they impact our financial statements as a whole, as well as our related discussion and analysis presented herein. While we believe that these accounting policies are based on sound measurement criteria, actual future events can and often do result in outcomes that can be materially different from these estimates or forecasts. The accounting policies and related risks described in our Annual Report on Form 10-K for the year ended July 2, 2005 are those that depend most heavily on these judgements and estimates. As of December 31, 2005, there have been no material changes to any of the critical accounting policies contained therein with the exception of the adoption of Statement of Financial Accounting Standards (‘‘SFAS’’) No. 123R.

Change in Accounting Principle

Effective July 3, 2005, the Company adopted SFAS No. 123R, ‘‘Share-Based Payment’’, which supersedes Accounting Principles Board (‘‘APB’’) Opinion No. 25, ‘‘Accounting for Stock Issued to Employees’’. The pronouncement requires an entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. That cost will be recognized over the period during which an employee is required to provide service in exchange for the award – the requisite service period (typically the vesting period). The Company elected to adopt the modified retrospective application method as provided by SFAS 123R and accordingly, all financial statement amounts for the prior periods presented have been adjusted to reflect the cost of such awards based on the grant-date fair value of the awards. See Note 2 for additional disclosures.

Recent Accounting Developments

In November 2004, the Financial Accounting Standards Board (‘‘FASB’’) issued SFAS No. 151, ‘‘Inventory Costs – an amendment of ARB No. 43, Chapter 4’’. SFAS 151 is an amendment of Accounting Research Board Opinion No. 43 and sets standards for the treatment of abnormal amounts of idle facility expense, freight, handling costs and spoilage. SFAS 151 is effective for fiscal years beginning after June 15, 2005. The adoption of SFAS 151 did not have a material impact on the Company’s financial statements.

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In December 2004, the FASB issued Staff Position No. 109-2, ‘‘Accounting and Disclosure Guidance for the Foreign Earnings Repatriation Provision within the American Jobs Creation Act of 2004’’ (‘‘FSP 109-2’’). FSP 109-2 provides guidance under SFAS 109, ‘‘Accounting for Income Taxes’’, with respect to recording the potential impact of the repatriation provisions of the American Jobs Creation Act of 2004 (the ‘‘Jobs Act’’) on enterprises’ income tax expense and deferred tax liability. FSP 109-2 states that an enterprise is allowed time beyond the financial reporting period of enactment to evaluate the effect of the Jobs Act on its plan for reinvestment or repatriation of foreign earnings for purposes of applying SFAS 109. As the Company does not plan to make any dividends under this provision, FSP 109-2 is not expected to have a material impact on the Company’s consolidated financial statements.

In December 2004, the FASB issued SFAS No. 153, ‘‘Exchanges of Nonmonetary Assets – an amendment of APB Opinion No. 29’’, which eliminates certain narrow differences between APB 29 and international accounting standards. SFAS 153 is effective for fiscal periods beginning on or after June 15, 2005. The adoption of SFAS 153 did not have a material impact on the Company’s consolidated financial statements.

In March 2005, the SEC issued Staff Accounting Bulletin (‘‘SAB’’) No. 107 ‘‘Share-Based Payment’’. SAB 107 expresses views of the SEC staff regarding the interaction between SFAS 123R and certain SEC rules and regulations and provides the staff’s views regarding the valuation of share-based payments arrangements. The Company adopted SFAS 123R effective July 3, 2005. See Note 2 for further information.

In March 2005, the FASB issued SFAS Interpretation Number 47 (‘‘FIN 47’’), ‘‘Accounting for Conditional Asset Retirement Obligations’’. FIN 47 provides clarification regarding the meaning of the term ‘‘conditional asset retirement obligation’’ as used in FASB 143, ‘‘Accounting for Asset Retirement Obligations’’. This Interpretation is effective no later than the end of fiscal years ending after December 15, 2005. The Company is currently evaluating the impact of FIN 47 on the consolidated financial statements.

In May 2005, the FASB issued SFAS No. 154, ‘‘Accounting Changes and Error Corrections – a replacement of APB Opinion No. 20 and FASB Statement No. 3’’. SFAS 154 provides guidance on the accounting for and reporting of accounting changes and error corrections. This statement is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005. The Company does not expect the adoption of SFAS 154 to have a material impact on the Company’s consolidated financial statements.

In June 2005, the Emerging Issues Task Force (‘‘EITF’’) reached consensus on EITF 05-6, ‘‘Determining the Amortization Period for Leasehold Improvements’’. Under EITF 05-6, leasehold improvements placed in service significantly after and not contemplated at, or near, the beginning of the lease term, should be amortized over the lesser of the useful life of the assets or a term that includes renewals that are reasonably assured at the date the leasehold improvements are purchased. EITF 05-6 is effective for periods beginning after June 29, 2005. The adoption of EITF 05-6 did not have a material impact on the consolidated financial statements.

ITEM 3. Quantitative and Qualitative Disclosures about Market Risk

The market risk inherent in our financial instruments represents the potential loss in fair value, earnings or cash flows arising from adverse changes in interest rates or foreign currency exchange rates. Coach manages these exposures through operating and financing activities and, when appropriate, through the use of derivative financial instruments with respect to Coach Japan. The following quantitative disclosures are based on quoted market prices obtained through independent pricing sources for the same or similar types of financial instruments, taking into consideration the underlying terms and maturities and theoretical pricing models. These quantitative disclosures do not represent the maximum possible loss or any expected loss that may occur, since actual results may differ materially from those estimates.

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Foreign Exchange

Foreign currency exposures arise from transactions, including firm commitments and anticipated contracts, denominated in a currency other than the entity’s functional currency, and from foreign-denominated revenues and expenses translated into U.S. dollars.

Substantially all of Coach’s fiscal 2006 non-licensed product needs were purchased from independent manufacturers in countries other than the United States. These countries include China, Turkey, India, Costa Rica, Dominican Republic, Hungary, Indonesia, Italy, Korea, Philippines, Singapore, Spain, Taiwan and Thailand. Additionally, sales are made through international channels to third party distributors. Substantially all purchases and sales involving international parties are denominated in U.S. dollars and therefore are not hedged by Coach using any derivative instruments.

Coach is exposed to market risk from foreign currency exchange rate fluctuations with respect to Coach Japan as a result of its U.S. dollar denominated inventory purchases. Coach Japan enters into certain foreign currency derivative contracts, primarily foreign exchange forward contracts, to manage these risks. These transactions are in accordance with Company risk management policies. Coach does not enter into derivative transactions for speculative or trading purposes.

Coach is also exposed to market risk from foreign currency exchange rate fluctuations with respect to Coach Japan as a result of its $231 million U.S. dollar denominated fixed rate intercompany loan from Coach. To manage this risk, on July 1, 2005, Coach Japan entered into a cross currency swap transaction, the terms of which include an exchange of a U.S. dollar fixed interest rate for a yen fixed interest rate. The loan matures in 2010, at which point the swap requires an exchange of yen and U.S. dollar based principals.

The fair value of open foreign currency derivatives included in current assets at December 31, 2005 and July 2, 2005 was $10.3 million and $1.5 million, respectively. For the six months ended December 31, 2005 and January 1, 2005, changes in the fair value of contracts designated and effective as cash flow hedges resulted in a reduction to equity as a charge to other comprehensive income of $1.8 million and $0.7 million, respectively, net of taxes.

Interest Rate

Coach faces minimal interest rate risk exposure in relation to its outstanding debt of $16.5 million at December 31, 2005. Of this amount, $13.2 million, under revolving credit facilities, is subject to interest rate fluctuations. As this level of debt and the resulting interest expense are not significant, any change in interest rates applied to the fair value of this debt would not have a material impact on the results of operations or cash flows of Coach.

ITEM 4. Controls and Procedures

Based on the evaluation of the Company's disclosure controls and procedures as of December 31, 2005, each of Lew Frankfort, the Chairman and Chief Executive Officer of the Company, and Michael F. Devine, III, the Chief Financial Officer of the Company, has concluded that the Company's disclosure controls and procedures are effective in ensuring that information required to be disclosed by the Company in the reports that it files or submits under the Securities and Exchange Act of 1934, as amended, is recorded, processed, summarized and reported, within the time periods specified by the Securities and Exchange Commission's rules and forms.

Based on an evaluation by management, with the participation of Messrs. Frankfort and Devine, there was no change in the Company’s internal control over financial reporting that occurred during the Company’s first fiscal half that has materially affected, or is reasonably like to materially affect, the Company’s internal control over financial reporting.

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PART II

ITEM 1.    Legal Proceedings

Coach is involved in various routine legal proceedings as both plaintiff and defendant incident to the ordinary course of its business, including proceedings to protect Coach’s intellectual property rights, litigation instituted by persons alleged to have been injured upon premises within Coach’s control and litigation with present or former employees. As part of its policing program for its intellectual property rights, from time to time, Coach files lawsuits in the U.S. and abroad alleging acts of trademark counterfeiting, trademark infringement, patent infringement, trade dress infringement, trademark dilution and/or state or foreign law claims. At any given point in time, Coach may have one or more of such actions pending. These actions often result in seizure of counterfeit merchandise and/or out of court settlements with defendants. From time to time, defendants will raise as affirmative defenses or as counterclaims the invalidity or unenforceability of certain of Coach’s intellectual properties. Although Coach’s litigation with present or former employees is routine and incidental to the conduct of Coach’s business, as well as for any business employing significant numbers of U.S. based employees, such litigation can result in large monetary awards when a civil jury is allowed to determine compensatory and/or punitive damages for actions claiming discrimination on the basis of age, gender, race, religion, disability or other legally protected characteristic or for termination of employment that is wrongful or in violation of implied contracts. Coach believes, however, that the outcome of all pending legal proceedings in the aggregate will not have a material adverse effect on Coach’s business or consolidated financial statements.

ITEM 4. Submission of Matters to a Vote of Security Holders

In connection with the 2005 Annual Meeting of Stockholders held on November 2, 2005, stockholders were asked to vote with respect to two proposals. A total of 330,871,621 votes were cast as follows:

Proposal Number 1 – Election of Directors – The following persons received that number of votes set forth next to their respective names:

				Votes For				Votes Withheld
Joseph Ellis					310,060,339				20,811,282
Lew Frankfort					315,719,927				15,151,694
Gary Loveman					301,095,811				29,775,810
Ivan Menezes					308,250,180				22,621,441
Irene Miller					300,724,524				30,147,097
Keith Monda					317,526,742				13,344,879
Michael Murphy					294,341,900				36,529,721

Proposal Number 2 – Amendment of the Coach, Inc. Performance-Based Annual Incentive Plan:

Votes For				Votes Against				Votes Abstaining
312,205,864					16,579,388				2,086,369

ITEM 6. Exhibits and Reports on Form 8-K

(a)	Exhibits

10.1	Employment Agreement dated November 8, 2005 between Coach and Michael Tucci

10.2	Employment Agreement dated November 8, 2005 between Coach and Michael F. Devine, III

31.1	Rule 13(a) – 14(a)/15(d) – 14(a) Certifications

32.1	Section 1350 Certifications

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(b)	Reports on Form 8-K

	Current report on Form 8-K, filed with the Commission on July 7, 2005. This report announced the completion of the Company’s purchase of Sumitomo’s 50% ownership interest in Coach Japan, Inc.

Current report on Form 8-K, filed with the Commission on August 16, 2005. This report announced that the Human Resources and Government Committee (‘‘HRGC’’) of the Board of Directors had determined the performance goals for the Company’s fiscal year 2006 for purposes of determining bonuses to be paid under the Company’s Performance-Based Annual Incentive Plan. This report also announced the HRGC’s approval of the Company’s annual grants of stock options and restricted stock units to the Company’s management and employees.

Current report on Form 8-K, filed with the Commission on August 26, 2005. This report announced three-year extensions to the Company’s employment agreements with 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. This report also contained the Company’s revised estimated financial results for the fiscal quarter ending October 1, 2005.

	Current report on Form 8-K, filed with the Commission on October 27, 2005. This report contained the Company’s preliminary earnings results for the first quarter of fiscal year 2006.

	Current report on Form 8-K, filed with the Commission on November 10, 2005. This report announced that the Company entered into five-year employment agreements with two key executives: Michael Tucci, President North America Retail Division, and Michael F. Devine, III, Senior Vice President and Chief Financial Officer.

	Current report on Form 8-K, filed with the Commission on December 9, 2005. This report announced that Lew Frankfort, Chairman and Chief Executive Officer, entered into a trading plan with Goldman, Sachs & Co. to comply with Rule 10b5-1 of the Securities Exchange Act of 1934.

	Current report on Form 8-K, filed with the Commission on January 24, 2006. This report contained the Company’s preliminary earnings results for the second quarter and first half of fiscal year 2006.

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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, thereunto duly authorized.

				COACH, INC. (Registrant)
				By:				/s/ Michael F. Devine, III
				Name:    Michael F. Devine, III Title:       Senior Vice President, Chief Financial Officer and Chief Accounting Officer

Dated: February 9, 2006

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                              EMPLOYMENT AGREEMENT
                              --------------------

                  THIS AGREEMENT, effective as of November 8, 2005 (the
"Effective Date"), but subject to the approval of the Committee (as defined
below), is made by and between Coach, Inc., a Maryland corporation (the
"Company") and Michael Tucci (the "Executive").

                                    RECITALS:

                  A.   It is the desire of the Company to assure itself of the
services of the Executive by engaging the Executive as its President, North
American Retail Division.

                  B.   The Executive desires to commit himself to serve the
Company on the terms herein provided.

                  NOW, THEREFORE, in consideration of the foregoing and of the
respective covenants and agreements set forth below, the parties hereto agree as
follows:

                  1.   Certain Definitions

                       (a)   "Affiliate" shall mean with respect to any Person,
            any other Person directly or indirectly, through one or more
            intermediaries, controlling, controlled by, or under common control
            with, such Person. For purposes of this Section 1(a), "control"
            shall have the meaning given such term under Rule 405 of the
            Securities Act of 1933, as amended.

                       (b)   "Annual Base Salary" shall have the meaning set
            forth in Section 5(a).

                       (c)   "Board" shall mean the Board of Directors of the
            Company.

                       (d)   "Bonus" shall have the meaning set forth in Section
            5(b).

                       (e)   The Company shall have "Cause" to terminate the
            Executive's employment upon (i) the Executive's failure to attempt
            in good faith to substantially perform the duties as President,
            North American Retail Division (other than any such failure
            resulting from the Executive's physical or mental incapacity) which
            is not remedied within 30 days after receipt of written notice from
            the Company specifying such failure; (ii) the Executive's failure to
            attempt in good faith to carry out, or comply with, in any material
            respect any lawful and reasonable directive of the Company's Chief
            Executive Officer which is not remedied within 30 days after receipt
            of written notice from the Company specifying such failure; (iii)
            the Executive's commission at any time of any act or omission that
            results in, or may reasonably be expected to result in, a
            conviction, plea of no contest, or imposition of unadjudicated
            probation for any felony (or any other crime involving fraud,
            embezzlement, material misconduct or misappropriation having a
            material adverse impact on the Company); (iv) the Executive's
            unlawful use (including being under the influence) or possession of
            illegal drugs on the Company's premises or while performing the
            Executive's duties and responsibilities; or (v) the Executive's
            willful commission at any time of any act of fraud, embezzlement,





            misappropriation, misconduct, or breach of fiduciary duty against
            the Company (or any predecessor thereto or successor thereof) having
            a material adverse impact on the Company.

                       (f)   "Change in Control" shall occur when:

                             (i)   A Person (which term, when used in this
                  Section 1(f), shall not include the Company, any underwriter
                  temporarily holding securities pursuant to an offering of
                  such securities, any trustee or other fiduciary holding
                  securities under an employee benefit plan of the Company, or
                  any Company owned, directly or indirectly, by the
                  stockholders of the Company in substantially the same
                  proportions as their ownership of Voting Stock of the
                  Company) is or becomes, without the prior consent of a
                  majority of the Continuing Directors, the beneficial owner
                  (as defined in Rule 13d-3 promulgated under the Securities
                  Exchange Act of 1934, as amended), directly or indirectly,
                  of Voting Stock representing, without the prior written
                  consent of a majority of the Continuing Directors twenty
                  percent (20%) (or, even with such prior consent, thirty-five
                  percent (35%)) or more of the combined voting power of the
                  Company's then outstanding securities; or

                             (ii)  The Company consummates a reorganization,
                  merger or consolidation of the Company (which prior to the
                  date of such consummation has been approved by the Company's
                  stockholders) or the Company sells, or otherwise disposes
                  of, all or substantially all of the Company's property and
                  assets (other than a reorganization, merger, consolidation
                  or sale which would result in all or substantially all of
                  the beneficial owners of the Voting Stock of the Company
                  outstanding immediately prior thereto continuing to
                  beneficially own, directly or indirectly (either by
                  remaining outstanding or by being converted into voting
                  securities of the resulting entity), more than fifty percent
                  (50%) of the combined voting power of the voting securities
                  of the Company or such entity resulting from the transaction
                  (including, without limitation, an entity which as a result
                  of such transaction owns the Company or all or substantially
                  all of the Company's property or assets, directly or
                  indirectly) outstanding immediately after such transaction
                  in substantially the same proportions relative to each other
                  as their ownership immediately prior to such transaction),
                  or the Company's stockholders approve a liquidation or
                  dissolution of the Company; or

                             (iii) The individuals who are Continuing Directors
                  of the Company (as defined below) cease for any reason to
                  constitute at least a majority of the Board.

                       (g)   "Code" shall mean the Internal Revenue Code of
            1986, as amended.

                       (h)   "Committee" shall mean the Human Resources and
            Corporate Governance Committee of the Board.



                                       2




                       (i)   "Common Stock" shall mean the $.01 par value common
            stock of the Company.

                       (j)   "Company" shall, except as otherwise provided in
            Section 9, have the meaning set forth in the preamble hereto.

                       (k)   "Competitive Business" shall mean any entity that,
            as of the date of the Executive's termination of employment, the
            Committee has designated in its sole discretion as an entity that
            competes with any of the businesses of the Company; provided, that
            (i) not more than 20 entities (which term "entities" shall include
            any subsidiaries, parent entities and other Affiliates thereof)
            shall be designated as Competitive Businesses at one time and (ii)
            such entities are the same 20 entities used for any list of
            competitive entities for any other arrangement with an executive of
            the Company; and, provided further, that subject to compliance with
            clauses (i) and (ii) of this definition, the Committee may change
            its designation of Competitive Businesses at any time that is not
            less than 90 days prior to the Executive's termination of employment
            upon written notice thereof to the Executive (and any such change
            within the 90 day period immediately preceding the Executive's
            termination of employment shall not be effective). The list of
            Competitive Businesses in effect as of the Effective Date is
            attached hereto as Exhibit A (which the parties acknowledge and
            agree may be changed by the Committee in accordance with the terms
            of the immediately preceding sentence).

                       (l)   "Continuing Director" means (i) any member of the
            Board (other than an employee of the Company) as of the Effective
            Date or (ii) any person who subsequently becomes a member of the
            Board (other than an employee of the Company) whose election or
            nomination for election to the Board is recommended by a majority of
            the Continuing Directors.

                       (m)   "Contract Year" shall mean (i) the period beginning
            on November 8, 2005 and ending on June 30, 2006 and (ii) each
            twelve-month period beginning on July 1, 2006 or any anniversary
            thereof.

                       (n)   "Date of Termination" shall mean (i) if the
            Executive's employment is terminated by his death, the date of his
            death and (ii) if the Executive's employment is terminated pursuant
            to Section 6(a)(ii) - (vi), the date specified in the Notice of
            Termination (or if no such date is specified, the last day of the
            Executive's active employment with the Company).

                       (o)   "Disability" shall mean any mental or physical
            illness, condition, disability or incapacity which:

                             (i)   Prevents the Executive from discharging
                  substantially all of his essential job responsibilities and
                  employment duties;

                             (ii)  Shall be attested to in writing by a
                  physician or a group of physicians selected by the Executive
                  and acceptable to the Company; and



                                       3




                             (iii) Has prevented the Executive from so
                  discharging his duties for any 180 days in any 365 day
                  period.

            A Disability shall be deemed to have occurred on the 180th day in
            any such 365 day period.

                       (p)   "Executive" shall have the meaning set forth in the
            preamble hereto.

                       (q)   "Extension Term" shall have the meaning set forth
            in Section 2.

                       (r)   "Financial Gain" with respect to any specified
            period of time shall mean the sum of all (i) Retention Option
            Gains realized by the Executive during such period and (ii)
            Retention RSU Gains realized by the Executive during such period.

                       (s)   The Executive shall have "Good Reason" to resign
            his employment upon the occurrence of any of the following: (i)
            failure of the Company to continue the Executive in the position
            of President, North American Retail Division (or any other
            position not less senior to such position); (ii) a material
            diminution in the nature or scope of the Executive's
            responsibilities, duties or authority; (iii) relocation of the
            Company's executive offices more than 50 miles outside of New
            York, New York or relocation of Executive away from the executive
            offices; (iv) failure of the Company to timely make any material
            payment or provide any material benefit under this Agreement, or
            the Company's material reduction of any compensation, equity or
            benefits that the Executive is eligible to receive under this
            Agreement; or (v) the Company's material breach of this
            Agreement; provided, however, that notwithstanding the foregoing
            the Executive may not resign his employment for Good Reason
            unless: (x) the Executive provides the Company with at least 30
            days prior written notice of his intent to resign for Good Reason
            (which notice is provided not later than the 60th day following
            the occurrence of the event constituting Good Reason) and (y) the
            Company does not remedy the alleged violation(s) within such
            30-day period; and, provided, further, that Executive may resign
            his employment for Good Reason if in connection with any Change
            in Control the surviving entity does not assume this Agreement
            (or, with the written consent of the Executive, substitute a
            substantially identical agreement) with respect to the Executive
            in writing delivered to the Executive prior to, or as soon as
            reasonably practicable following, the occurrence of such Change
            in Control.

                       (t)   "Initial Term" shall have the meaning set forth in
            Section 2.

                       (u)   "Intellectual Property" shall have the meaning set
            forth in Section 9(f).

                       (v)   "Maximum Bonus" shall have the meaning set forth in
            Section 5(b).

                       (w)   "Notice of Termination" shall have the meaning set
            forth in Section 6(b).




                                       4




                       (x)   "Option" shall mean an option to purchase Common
            Stock pursuant to any of the Stock Incentive Plans (or any other
            equity based compensation plan or agreement that may be adopted or
            entered into by the Company from time to time).

                       (y)   "Person" shall mean an individual, partnership,
            corporation, business trust, limited liability company, joint stock
            company, trust, unincorporated association, joint venture,
            governmental authority or other entity of whatever nature.

                       (z)   "Pro-Rata Bonus" shall have the meaning set forth
            in Section 7(d).

                       (aa)  "Release" shall have the meaning set forth in
            Section 7(b).

                       (bb)  "Retention Option Gain" with respect to any
            specified period of time shall mean the product of (i) the number of
            shares of Common Stock purchased upon the exercise of any Retention
            Options during such period and (ii) the excess of (A) the fair
            market value per share of Common Stock as of the date of such
            exercise over (B) the exercise price per share of Common Stock
            subject to such Retention Options.

                       (cc)  "Retention Options" shall have the meaning set
            forth in Section 5(c).

                       (dd)  "Retention RSU Gain" with respect to any specified
            period of time shall mean the product of (i) the number of shares of
            Common Stock subject to Retention RSUs that first become vested
            during such period and (ii) the fair market value per share of
            Common Stock as of the date such Retention RSUs first become vested.

                       (ee)  "Retention RSUs" shall have the meaning set forth
            in Section 5(d).

                       (ff)  "Section 409A" shall mean Section 409A of the Code
            and the Department of Treasury Regulations and other interpretive
            guidance issued thereunder, including without limitation any such
            regulations or other guidance that may be issued after the Effective
            Date.

                       (gg)  "Severance Amount" shall have the meaning set forth
            in Section 7(b)(i).

                       (hh)  "Severance Commencement Date" shall mean the
            six-month anniversary of the Date of Termination.

                       (ii)  "Stock Incentive Plans" shall mean the Company's
            2000 Stock Incentive Plan and the Company's 2004 Stock Incentive
            Plan, each as amended from time to time.

                       (jj)  "Target Bonus" shall have the meaning set forth in
            Section 5(b).

                       (kk)  "Term" shall have the meaning set forth in
            Section 2.



                                       5



                       (ll)  "Voting Stock" means all capital stock of the
            Company which by its terms may be voted on all matters submitted to
            stockholders of the Company generally.

            2.         Employment. The Company shall employ the Executive and
the Executive shall continue in the employ of the Company, for the period set
forth in this Section 2, in the positions set forth in the first sentence of
Section 3 and upon the other terms and conditions herein provided. The initial
term of employment under this Agreement (the "Initial Term") shall be for the
period beginning on the Effective Date and ending on June 30, 2010, unless
earlier terminated as provided in Section 6. The Initial Term shall
automatically be extended for successive one-year periods (each, an "Extension
Term") unless either party hereto gives written notice of non-extension to the
other no later than 180 days prior to the scheduled expiration of the Initial
Term or the then applicable Extension Term (the Initial Term and any Extension
Term shall be collectively referred to hereunder as the "Term").

            3.         Position and Duties. The Executive shall serve as
President, North American Retail Division, reporting directly to the Company's
Chief Executive Officer, with such responsibilities, duties and authority as are
customary for such role. The Executive shall devote all necessary business time
and attention, and employ his reasonable best efforts, toward the fulfillment
and execution of all assigned duties, and the satisfaction of defined annual
and/or longer-term performance criteria. Notwithstanding the foregoing, the
Executive may manage his personal investments, be involved in charitable and
professional activities (including serving on charitable and professional
boards), and, with the consent of the Board, serve on for profit boards of
directors and advisory committees so long as such service does not materially
interfere with Executive's obligations hereunder or violate Section 9 hereof.

            4.         Place of Performance. In connection with his employment
during the Term, the Executive shall be based at the Company's offices in New
York, New York, except for necessary travel on the Company's business.

            5.         Compensation and Related Matters

                       (a) Annual Base Salary. Commencing September 1, 2005, the
            Executive shall receive a base salary at a rate of $650,000 per
            annum (the "Annual Base Salary"), paid in accordance with the
            Company's general payroll practices for executives, but no less
            frequently than monthly. No less frequently than annually during the
            Term, the Board and the Committee shall review the rate of Annual
            Base Salary payable to the Executive, and may, in their discretion,
            increase the rate of Annual Base Salary payable hereunder; provided,
            however, that any increased rate shall thereafter be the rate of
            "Annual Base Salary" hereunder.

                       (b) Bonus. Except as otherwise provided for herein, with
            respect to each Contract Year on which the Executive is employed
            hereunder on the last day, the Executive shall be eligible to
            receive a bonus (the "Bonus"), as determined pursuant to the Coach,
            Inc. Performance-Based Annual Incentive Plan or another "qualified
            performance-based compensation" bonus plan that has been approved by
            the stockholders of the Company in accordance with the provisions
            for such approval under Code Section





                                       6




            162(m) and the regulations promulgated thereunder (collectively, the
            "Bonus Plan"), and on the basis of the Executive's or the Company's
            attainment of objective financial or other operating criteria
            established by the Committee in its sole discretion and in
            accordance with Code Section 162(m) and the regulations promulgated
            thereunder. With respect to each Contract Year (i) the Executive
            shall be eligible to receive a maximum Bonus (the "Maximum Bonus")
            in an amount equal to at least 125% of his Annual Base Salary and
            (ii) the Executive's target-level Bonus (the "Target Bonus") shall
            be equal to 75% of the amount of the Maximum Bonus. In addition, the
            Executive shall be eligible to participate in any other bonus plan
            or program that may be established by the Committee and that covers
            the Executive (even if such plan or program does not provide for
            qualified performance-based bonuses within the meaning of Code
            Section 162(m)). Notwithstanding anything to the contrary in the
            Bonus Plan, the parties acknowledge and agree that with respect to
            each Contract Year, the Company shall pay the Bonus to the Executive
            within the period required by Section 409A such that it qualifies as
            a "short-term deferral" pursuant to Section 1.409A-1(b)(4) of the
            Department of Treasury Regulations.

                       (c)   Stock Options

                             (i)   During the Term, the Executive shall be
                  eligible to be granted Options at such time(s) and in such
                  amount(s) as may be determined by the Committee in its sole
                  discretion; provided, that the Executive shall be granted
                  such Options in accordance with the Company's customary past
                  practice unless the Committee determines in its good faith
                  discretion that the amount or timing of such Option grants
                  shall be revised based upon the Executive's performance.

                             (ii)  In addition to any Options granted in
                  accordance with subsection (i), as of the Effective Date the
                  Executive shall be granted a non-qualified stock option (the
                  "Retention Options") to purchase 252,658 shares of Common
                  Stock pursuant to either or both of the Stock Incentive
                  Plans, which Retention Option shall be evidenced by one or
                  more written Retention Stock Option Agreements to be entered
                  into by and between the Company and Executive as of the date
                  hereof, each in substantially the form attached hereto as
                  Exhibit B. The Retention Options shall have an exercise
                  price equal to the fair market value per share of Common
                  Stock as of the Effective Date and shall have a term of 10
                  years. The Retention Options shall become exercisable in
                  three cumulative installments as follows: (A) the first
                  installment shall consist of 20% of the shares of Common
                  Stock covered by the Retention Options and shall become
                  vested and exercisable on June 30, 2008, (B) the second
                  installment shall consist of 20% of the shares of Common
                  Stock covered by the Retention Options and shall become
                  vested and exercisable on June 30, 2009 and (C) the third
                  installment shall consist of 60% of the shares of Common
                  Stock covered by the Retention Options and shall become
                  exercisable on June 30, 2010; provided, that, except as
                  otherwise provided in Section 7 or in the Retention Stock
                  Option Agreement, no portion of the Retention Options not
                  then exercisable shall become exercisable following the
                  Executive's termination of employment for any reason. In the
                  event of the Executive's termination of employment for any
                  reason other



                                       7




                  than for Cause, the Retention Options to the extent then
                  exercisable shall remain exercisable until the earlier of
                  (x) the date provided in the Retention Stock Option
                  Agreement or (y) the tenth anniversary of the Effective
                  Date. The Company and the Executive acknowledge and agree
                  that the Retention Options shall not provide for the grant
                  of any "Restoration Options" as defined in the Company's
                  2000 Stock Incentive Plan.


                       (d)   Restricted Stock Units

                             (i)   During the Term, the Executive shall be
                  eligible to be awarded Restricted Stock Units ("RSUs") and
                  other equity compensation awards pursuant to the Stock
                  Incentive Plans (or any other equity based compensation plan
                  that may be adopted by the Company from time to time), at
                  such time(s) and in such amount(s) as may be determined by
                  the Committee in its sole discretion.

                             (ii)  In addition to any RSUs awarded in accordance
                  with subsection (i), as of the Effective Date the Executive
                  shall be awarded 73,271 RSUs (the "Retention RSUs") pursuant
                  to either or both of the Stock Incentive Plans, which
                  Retention RSUs shall be evidenced by one or more written
                  Retention RSU Agreements to be entered into by and between
                  the Company and Executive as of the date hereof, each in
                  substantially the form attached hereto as Exhibit C. The
                  Retention RSUs shall become vested with respect to 20% of
                  the Retention RSUs on each of June 30, 2008 and June 30,
                  2009 and with respect to 60% of the Retention RSUs on June
                  30, 2010; provided, that, except as otherwise provided in
                  Section 7 or in the Retention RSU Agreement, no Retention
                  RSUs not then vested shall become vested following the
                  Executive's termination of employment.

                       (e)   Benefits. The Executive shall be entitled to
            receive such benefits and to participate in such employee group
            benefit plans, including life, health and disability insurance
            policies, as are generally provided by the Company to its senior
            executives in accordance with the plans, practices and programs
            of the Company.

                       (f)   Expenses. The Company shall reimburse the Executive
            for all reasonable and necessary expenses incurred by the
            Executive in connection with the performance of the Executive's
            duties as an employee of the Company. Such reimbursement is
            subject to the submission to the Company by the Executive of
            appropriate documentation and/or vouchers in accordance with the
            customary procedures of the Company for expense reimbursement, as
            such procedures may be revised by the Company from time to time.

                       (g)   Vacations. The Executive shall be entitled to paid
            vacation in accordance with the Company's vacation policy as in
            effect from time to time. However, in no event shall the
            Executive be entitled to less than four weeks vacation per
            Contract Year. The Executive shall also be entitled to paid
            holidays and personal days in accordance with the Company's
            practice with respect to same as in effect from time to



                                       8




            time (but in no event shall the Executive be entitled to fewer
            than two personal days per Contract Year).

                       (h)   Transportation Allowance. During the Term, the
            Company shall provide the Executive with a transportation
            allowance in accordance with the Company's applicable policies
            and procedures.

            6.         Termination. The Executive's employment hereunder may be
terminated by the Company, on the one hand, or the Executive, on the other hand,
as applicable, without any breach of this Agreement only under the following
circumstances:

                       (a)   Terminations

                             (i) Death. The Executive's employment hereunder
                  shall terminate upon his death.

                             (ii) Disability. In the event of the Executive's
                  Disability, the Company may give the Executive written notice
                  of its intention to terminate the Executive's employment. In
                  such event, the Executive's employment with the Company shall
                  terminate effective on the 14th day after delivery of such
                  notice, provided that within the 14 days after such delivery,
                  the Executive shall not have returned to full-time performance
                  of his duties.

                             (iii) Cause. The Company may terminate the
                  Executive's employment hereunder for Cause; provided, however,
                  that, notwithstanding the foregoing, if (A) the Company
                  terminates the Executive's employment for Cause pursuant to
                  Section 1(e)(iii) and (B) the Executive (i) is not indicted
                  for, or otherwise charged by any court or other governmental
                  or regulatory authority with, any felony or any other crime
                  involving fraud, embezzlement, material misconduct or
                  misappropriation having a material adverse impact on the
                  Company (which felony or other crime was the reason for such
                  termination) within 18 months following the date of his
                  termination of employment, or (ii) is not convicted of, does
                  not plea no contest to, and does not receive unadjudicated
                  probation for, any felony (or any other crime involving fraud,
                  embezzlement, material misconduct or misappropriation having a
                  material adverse impact on the Company) (which felony or other
                  crime was the reason for such termination), then the
                  Executive's termination of employment will be deemed to be
                  without Cause and the Executive shall retroactively be
                  eligible for severance payments to the extent provided by
                  Section 7(b).

                             (iv) Good Reason. The Executive may terminate his
                  employment for Good Reason.

                             (v) Without Cause. The Company may terminate the
                  Executive's employment hereunder without Cause. A notice by
                  the Company of non-extension of the Term shall be treated as a
                  termination without Cause as of the last day of the Term.



                                       9



                             (vi) Resignation without Good Reason. The Executive
                  may resign his employment without Good Reason upon 180 days
                  written notice to the Company.

                       (b)   Notice of Termination. Any termination of the
            Executive's employment by the Company or by the Executive under
            this Section 6 (other than termination pursuant to paragraph
            (a)(i)) shall be communicated by a written notice to the other
            party hereto indicating the specific termination provision in
            this Agreement relied upon, setting forth in reasonable detail
            any facts and circumstances claimed to provide a basis for
            termination of the Executive's employment under the provision so
            indicated, and specifying a Date of Termination which, except in
            the case of termination for Cause or Disability, shall be at
            least thirty days (or such longer period provided by Section
            6(a)(vi)) following the date of such notice (a "Notice of
            Termination"); provided, the Company may pay out such notice
            period instead of employing the Executive.

            7.         Severance Payments and Benefits

                       (a)   Termination for any Reason. In the event the
            Executive's employment with the Company is terminated for any
            reason, the Company shall pay the Executive (or his beneficiary in
            the event of his death) any unpaid Annual Base Salary that has
            accrued as of the Date of Termination, any unreimbursed expenses due
            to the Executive and an amount for any accrued but unused vacation
            days within 60 days following the Date of Termination, or such
            earlier time as may be required by applicable law. Any earned but
            unpaid Bonus for any fiscal year of the Company completed prior to
            the date of such termination shall be paid within 60 days following
            the date such Bonus is determined pursuant to the Bonus Plan or such
            earlier time as may be required to comply with Section 409A and
            thereby avoid the application of penalty taxes under such section.
            The Executive shall also be entitled to accrued, vested benefits
            under the Company's benefit plans and programs as provided therein.
            The Executive shall be entitled to the cash severance payments
            described below only as set forth herein and the provisions of this
            Section 7 shall supersede in their entirety any severance payment
            provisions in any severance plan, policy, program or arrangement
            maintained by the Company.

                       (b)   Terminations without Cause or for Good Reason.
            Except as otherwise provided by Section 7(c) with respect to
            certain terminations of employment in connection with a Change in
            Control, if the Executive's employment shall terminate without
            Cause (pursuant to Section 6(a)(v)), or for Good Reason (pursuant
            to Section 6(a)(iv)), the Company shall (subject to the
            Executive's entering into a Separation and Release Agreement with
            the Company in substantially the form attached hereto as Exhibit
            D (the "Release")):

                             (i) Pay to the Executive an amount (the "Severance
                  Amount") equal to the sum of his then current (A) Annual Base
                  Salary and (B) Target Bonus for the year of termination; one
                  half of which amount shall be paid in a cash lump-sum on the
                  six month anniversary of the Date of Termination, with the
                  other one-half of the Severance Amount payable to the
                  Executive in accordance with the Company's customary payroll
                  practices in equal monthly installments during



                                       10




                  the period beginning on the six-month anniversary of the Date
                  of Termination and ending on the 12-month anniversary thereof;
                  and provided, further, that no amount shall be payable
                  pursuant to this Section 7(b)(i) on or following the date the
                  Executive first (i) violates any of the covenants set forth in
                  Section 9(a) or 9(b), or (ii) materially violates any of the
                  covenants set forth in Section 9(c), 9(e) or 9(f);

                             (ii) Continue to provide the Executive with all
                  health and welfare benefits and perquisites which he was
                  participating in or receiving as of the Date of Termination
                  until the earlier of (A) the first anniversary of the Date of
                  Termination or (B) the date the Executive first (i) violates
                  any of the covenants set forth in Section 9(a) or 9(b), or
                  (ii) materially violates any of the covenants set forth in
                  Section 9(c), 9(e) or 9(f). If such benefits cannot be
                  provided under the Company's programs, such benefits and
                  perquisites will be provided on an individual basis to the
                  Executive such that his after-tax costs will be no greater
                  than the costs for such benefits and perquisites under the
                  Company's programs. Notwithstanding the foregoing, the parties
                  acknowledge and agree that no payment or benefit shall be made
                  pursuant to this Section 7(b)(ii) to the extent that such
                  payment or benefit would, pursuant to Section
                  1.409A-1(b)(9)(iv) of the Department of Treasury Regulations,
                  constitute a deferral of compensation subject to Section 409A
                  (and to the extent permissible any such payment or benefit
                  shall be modified to comply with Section 1.409A-1(b)(9)(iv) of
                  the Department of Treasury Regulations);

                             (iii) Notwithstanding any provision to the contrary
                  in any Option or RSU agreement, cause all (A) Retention RSUs
                  and Retention Options not vested or exercisable as of the Date
                  of Termination to remain or become vested and remain
                  exercisable in accordance with the terms and conditions of the
                  applicable Retention Option or Retention RSU agreement and (B)
                  Options and RSUs (other than the Retention Options and the
                  Retention RSUs) then held by the Executive to continue to
                  become vested and exercisable in accordance with their terms
                  as if the Executive had remained employed by the Company until
                  the first anniversary of the Date of Termination (and all
                  Options and RSUs (other than the Retention Options and the
                  Retention RSUs) that do not become vested and exercisable on
                  or prior to the first anniversary of the Date of Termination
                  shall thereupon be forfeited). Notwithstanding the foregoing,
                  the parties acknowledge and agree that no payment or benefit
                  shall be made pursuant to this Section 7(b)(iii) to the extent
                  that such payment or benefit would, pursuant to Section
                  1.409A-1(b)(5)(v) of the Department of Treasury Regulations,
                  constitute a modification, extension or renewal of a stock
                  right subject to Section 409A (and to the extent permissible
                  any such payment or benefit shall be modified to comply with
                  Section 1.409A-1(b)(5)(v) of the Department of Treasury
                  Regulations);

                             (iv) Pay to the Executive a Pro-Rata Bonus, as
                  defined in Section 7(d), when bonuses are paid for the year of
                  termination based on actual results and the relative portion
                  of the fiscal year during which the Executive was employed.


                                       11




                       (c)   Certain Terminations in connection with a Change in
            Control. If the Executive's employment shall terminate without Cause
            (pursuant to Section 6(a)(v)) or for Good Reason (pursuant to
            Section 6(a)(iv)) within six months prior to a Change in Control or
            during the 12 month period immediately following such Change in
            Control, the Company shall (subject to the receipt of the Release):

                             (i) Pay to the Executive an amount equal to the
                  Severance Amount; one half of which amount shall be paid in a
                  cash lump-sum on the six month anniversary of the Date of
                  Termination, with the other one-half of the Severance Amount
                  payable to the Executive in accordance with the Company's
                  customary payroll practices in equal monthly installments
                  during the period beginning on the six-month anniversary of
                  the Date of Termination and ending on the 12-month anniversary
                  thereof; and provided, further, that no amount shall be
                  payable pursuant to this Section 7(b)(i) on or following the
                  date the Executive first (i) violates any of the covenants set
                  forth in Section 9(a) or 9(b), or (ii) materially violates any
                  of the covenants set forth in Section 9(c), 9(e) or 9(f);

                             (ii) Continue to provide the Executive with all
                  health and welfare benefits and perquisites which he was
                  participating in or receiving as of the Date of Termination
                  until the earlier of (A) the first anniversary of the Date of
                  Termination or (B) the date the Executive first (i) violates
                  any of the covenants set forth in Section 9(a) or 9(b), or
                  (ii) materially violates any of the covenants set forth in
                  Section 9(c), 9(e) or 9(f). If such benefits cannot be
                  provided under the Company's programs, such benefits and
                  perquisites will be provided on an individual basis to the
                  Executive such that his after-tax costs will be no greater
                  than the costs for such benefits and perquisites under the
                  Company's programs. Notwithstanding the foregoing, the parties
                  acknowledge and agree that no payment or benefit shall be made
                  pursuant to this Section 7(c)(ii) to the extent that such
                  payment or benefit would, pursuant to Section
                  1.409A-1(b)(9)(iv) of the Department of Treasury Regulations,
                  constitute a deferral of compensation subject to Section 409A
                  (and to the extent permissible any such payment or benefit
                  shall be modified to comply with Section 1.409A-1(b)(9)(iv) of
                  the Department of Treasury Regulations);

                             (iii) Notwithstanding any provision to the contrary
                  in any Option or RSU agreement, cause all Options (including
                  without limitation the Retention Options), RSUs (including
                  without limitation the Retention RSUs) and other equity based
                  compensation awards then held by the Executive to become fully
                  vested and exercisable with respect to all shares subject
                  thereto effective immediately prior to the Date of Termination
                  and all Options shall remain exercisable for the remainder of
                  the 10 year term. Notwithstanding the foregoing, the parties
                  acknowledge and agree that no payment or benefit shall be made
                  pursuant to this Section 7(c)(iii) to the extent that such
                  payment or benefit would, pursuant to Section
                  1.409A-1(b)(5)(v) of the Department of Treasury Regulations,
                  constitute a modification, extension or renewal of a stock
                  right subject to Section 409A (and to the extent permissible
                  any such payment or benefit shall be



                                       12




                  modified to comply with Section 1.409A-1(b)(5)(v) of the
                  Department of Treasury Regulations); and

                             (iv) Pay to the Executive a Pro-Rata Bonus, as
                  defined in Section 7(d), within 10 days following the date of
                  such termination.

                       (d)   Termination by Reason of Disability or Death. If
            the Executive's employment shall terminate by reason of his
            Disability (pursuant to Section 6(a)(ii)) or death (pursuant to
            Section 6(a)(i)), then (i) the Company shall pay to the Executive
            (or Executive's estate) a pro-rated amount of the Executive's
            Target Bonus for the Contract Year in which the Date of
            Termination occurs (the "Pro-Rata Bonus"); (ii) all Retention
            Options and Retention RSUs not vested or exercisable as of the
            Date of Termination shall thereupon be forfeited; provided, that
            in the alternative the Committee may, in its sole discretion,
            cause all or any portion of any Retention Options or Retention
            RSUs then held by the Executive to become vested and exercisable
            effective as of the Date of Termination; and (iii) all Options
            and RSUs (other than Retention Options and the Retention RSUs)
            then held by the Executive shall be or become vested and shall
            remain exercisable in accordance with the terms of the applicable
            Option or RSU agreement.

                       (e)   Termination for Cause or without Good Reason. If
            the Executive's employment shall terminate by reason of his
            voluntary resignation without Good Reason (pursuant to Section
            6(a)(vi)) or by the Company for Cause (pursuant to Section
            6(a)(iii)), then (i) notwithstanding any provision to the
            contrary in any Option or RSU agreement, all Retention RSUs and
            Retention Options not vested or exercisable as of the Date of
            Termination shall thereupon be forfeited and (ii) all Options and
            RSUs (other than the Retention Options and the Retention RSUs) or
            other equity based compensation awards not vested or exercisable
            as of the Date of Termination shall thereupon be forfeited and,
            except as set forth in Section 7(a), the Company shall have no
            further obligations to the Executive.

                       (f)   Survival. The expiration or termination of the Term
            shall not impair the rights or obligations of any party hereto which
            shall have accrued hereunder prior to or in connection with such
            expiration or termination.

                       (g)   No Mitigation. The Executive shall have no
            obligation to mitigate any payments due hereunder. Any amounts
            earned by the Executive from other employment shall not offset
            amounts due hereunder, except as provided in this Section 7.

            8.         Parachute Payments.

                       (a)   If it is determined by a nationally recognized
            United States public accounting firm selected by the Company and
            approved in writing by the Executive (which approval shall not be
            unreasonably withheld) (the "Auditors") that any payment or
            benefit made or provided to the Executive in connection with this
            Agreement or otherwise (including without limitation any Option
            or RSU vesting) (collectively, a "Payment"), would be subject to
            the excise tax imposed by Section 4999 of the Code (the
            "Parachute Tax"), then the Company shall pay to the Executive,
            prior to the time the



                                       13



            Parachute Tax is payable with respect to such Payment, an
            additional payment (a "Gross-Up Payment") in an amount such that,
            after payment by the Executive of all taxes (including any
            Parachute Tax) imposed upon the Gross-Up Payment, the Executive
            retains an amount of the Gross-Up Payment equal to the Parachute
            Tax imposed upon the Payment. The amount of any Gross-Up Payment
            shall be determined by the Auditors, subject to adjustment, as
            necessary, as a result of any Internal Revenue Service position.
            For purposes of making the calculations required by this
            Agreement, the Auditors may make reasonable assumptions and
            approximations concerning applicable taxes and may rely on
            reasonable, good faith interpretations concerning the application
            of Sections 280G and 4999 of the Code, provided that the
            Auditors' determinations must be made with substantial authority
            (within the meaning of Section 6662 of the Code).

                       (b)   The federal tax returns filed by the Executive (and
            any filing made by a consolidated tax group which includes the
            Company) shall be prepared and filed on a basis consistent with the
            determination of the Auditors with respect to the Parachute Tax
            payable by the Executive. The Executive shall make proper payment of
            the amount of any Parachute Tax, and at the request of the Company,
            provide to the Company true and correct copies (with any amendments)
            of his federal income tax return as filed with the Internal Revenue
            Service, and such other documents reasonably requested by the
            Company, evidencing such payment. If, after the Company's payment to
            the Executive of the Gross-Up Payment, the Auditors determine in
            good faith that the amount of the Gross-Up Payment should be reduced
            or increased, or such determination is made by the Internal Revenue
            Service, then within ten business days of such determination, the
            Executive shall pay to the Company the amount of any such reduction,
            or the Company shall pay to the Executive the amount of any such
            increase; provided, however, that in no event shall the Executive
            have any such refund obligation if it is determined by the Company
            that to do so would be a violation of the Sarbanes-Oxley Act of
            2002, as it may be amended from time to time; and provided, further,
            that if the Executive has prior thereto paid such amounts to the
            Internal Revenue Service, such refund shall be due only to the
            extent that a refund of such amount is received by the Executive;
            and provided, further, that (i) the fees and expenses of the
            Auditors (and any other legal and accounting fees) incurred for
            services rendered in connection with the Auditor's determination of
            the Parachute Tax or any challenge by the Internal Revenue Service
            or other taxing authority relating to such determination shall be
            paid by the Company and (ii) the Company shall indemnify and hold
            the Executive harmless on an after-tax basis for any interest and
            penalties imposed upon the Executive to the extent that such
            interest and penalties are related to the Auditor's determination of
            the Parachute Tax or the Gross-Up Payment. Notwithstanding anything
            to the contrary herein, the Executive's rights under this Section 8
            shall survive the termination of his employment for any reason and
            the termination or expiration of this Agreement for any reason.

            9.         Certain Restrictive Covenants

                       (a)   The Executive shall not, at any time during the
            Term or during the 12-month period following the Date of
            Termination (the "Restricted Period") directly or indirectly
            engage in, have any equity interest in, or manage or operate any
            (i) Competitive Business, or (ii) new luxury accessories business
            that competes directly with




                                       14




            the existing or planned product lines of the Company; provided,
            however, that the Executive shall be permitted to acquire a
            passive stock or equity interest in such a business provided the
            stock or other equity interest acquired is not more than five
            percent (5%) of the outstanding interest in such business; and,
            provided, further, that this Section 9(a) shall not apply in the
            event that, prior to June 30, 2008 (A) the Executive's employment
            is terminated by reason of his voluntary resignation without Good
            Reason (pursuant to Section 6(a)(vi)), (B) the Executive's
            employment is terminated by the Company without Cause (pursuant
            to Section 6(a)(v)) or (C) the Executive's employment is
            terminated by the Executive for Good Reason (pursuant to Section
            6(a)(iv)) and, in connection with such termination, the Executive
            agrees in writing to waive his right to receive all payments and
            benefits that he would otherwise be entitled to receive pursuant
            to Section 7(b) or 7(c), as applicable.

                       (b)   During the Restricted Period, the Executive will
            not, directly or indirectly recruit or otherwise solicit or
            induce any employee, director, consultant, wholesale customer,
            vendor, supplier, lessor or lessee of the Company to terminate
            its employment or arrangement with the Company, otherwise change
            its relationship with the Company, or establish any relationship
            with the Executive or any of his Affiliates for any business
            purpose.

                       (c)   Except as required in the good faith opinion of the
            Executive in connection with the performance of the Executive's
            duties hereunder or as specifically set forth in this Section 9(c),
            the Executive shall, in perpetuity, maintain in confidence and shall
            not directly, indirectly or otherwise, use, disseminate, disclose or
            publish, or use for his benefit or the benefit of any person, firm,
            corporation or other entity any confidential or proprietary
            information or trade secrets of or relating to the Company,
            including, without limitation, information with respect to the
            Company's operations, processes, products, inventions, business
            practices, finances, principals, vendors, suppliers, customers,
            potential customers, marketing methods, costs, prices, contractual
            relationships, regulatory status, business plans, designs, marketing
            or other business strategies, compensation paid to employees or
            other terms of employment, or deliver to any person, firm,
            corporation or other entity any document, record, notebook, computer
            program or similar repository of or containing any such confidential
            or proprietary information or trade secrets. The parties hereby
            stipulate and agree that as between them the foregoing matters are
            important, material and confidential proprietary information and
            trade secrets and affect the successful conduct of the businesses of
            the Company (and any successor or assignee of the Company). Upon
            termination of the Executive's employment with the Company for any
            reason, the Executive will promptly deliver to the Company all
            correspondence, drawings, manuals, letters, notes, notebooks,
            reports, programs, plans, proposals, financial documents, or any
            other documents concerning the Company's customers, business plans,
            designs, marketing or other business strategies, products or
            processes, provided that the Executive may retain his rolodex,
            address book and similar information.

                       (d)   Notwithstanding Section 9(c), the Executive may
            respond to a lawful and valid subpoena or other legal process or
            other government or regulatory inquiry but shall give the Company
            prompt notice thereof (except to the extent legally



                                       15




            prohibited), and shall, as much in advance of the return date as
            is reasonably practicable, make available to the Company and its
            counsel copies of any documents sought which are in the
            Executive's possession or to which the Executive otherwise has
            reasonable access. In addition, the Executive shall reasonably
            cooperate with and assist the Company and its counsel at any time
            and in any manner reasonably requested by the Company or its
            counsel (with due regard for the Executive's other commitments if
            he is not employed by the Company) in connection with any
            litigation or other legal process affecting the Company of which
            the Executive has knowledge as a result of his employment with
            the Company (other than any litigation with respect to this
            Agreement). In the event of such requested cooperation, the
            Company shall reimburse the Executive's reasonable out of pocket
            expenses.

                       (e)   The Executive shall not disparage the Company, any
            of its products or practices, or any of its directors, officers,
            agents, representatives, or employees, stockholders or
            Affiliates, either orally or in writing, at any time. The Company
            (including without limitation its directors) shall not disparage
            the Executive, either orally or in writing, at any time.
            Notwithstanding the foregoing, nothing in this Section 9(e) shall
            limit the ability of the Company or the Executive, as applicable,
            to provide truthful testimony as required by law or any judicial
            or administrative process.

                       (f)   The Executive agrees that all strategies, methods,
            processes, techniques, marketing plans, merchandising schemes,
            themes, layouts, mechanicals, trade secrets, copyrights, trademarks,
            patents, ideas, specifications and other material or work product
            ("Intellectual Property") that the Executive creates, develops or
            assembles in connection with his employment hereunder shall become
            the permanent and exclusive property of the Company to be used in
            any manner it sees fit, in its sole discretion. The Executive shall
            not communicate to the Company any ideas, concepts, or other
            intellectual property of any kind (other than in his capacity as an
            officer of the Company) which (i) were earlier communicated to the
            Executive in confidence by any third party as proprietary
            information, or (ii) the Executive knows or has reason to know is
            the proprietary information of any third party. Further, the
            Executive shall adhere to and comply with the Company's Global
            Business Integrity Program Guide. All Intellectual Property created
            or assembled in connection with the Executive's employment hereunder
            shall be the permanent and exclusive property of the Company. The
            Company and the Executive mutually agree that all Intellectual
            Property and work product created in connection with this agreement,
            which is subject to copyright, shall be deemed to be "work made for
            hire," and that all rights to copyrights shall be vested in the
            Company. If for any reason the Company cannot be deemed to have
            commissioned "work made for hire," and its rights to copyright are
            thereby in doubt, then the Executive agrees not to claim to be the
            proprietor of the work prepared for the Company, and to irrevocably
            assign to the Company, at the Company's expense, all rights in the
            copyright of the work prepared for the Company.

                       (g)   As used in this Section 9, the term "Company" shall
            include the Company and any of its Affiliates or direct or indirect
            subsidiaries.


                                       16




                       (h)   The Company and the Executive expressly acknowledge
            and agree that the agreements and covenants contained in this
            Section 9 are reasonable. In the event, however, that any agreement
            or covenant contained in this Section 9 shall be determined by any
            court of competent jurisdiction to be unenforceable by reason of its
            extending for too great a period of time or over too great a
            geographical area or by reason of its being too extensive in any
            other respect, it will be interpreted to extend only over the
            maximum period of time for which it may be enforceable, and/or over
            the maximum geographical area as to which it may be enforceable
            and/or to the maximum extent in all other respects as to which it
            may be enforceable, all as determined by such court in such action.

            10.        Specific Performance. It is recognized and acknowledged
by the Executive that a breach of the covenants contained in Section 9 will
cause irreparable damage to the Company and its goodwill (or to the Executive,
as the case may be), the exact amount of which will be difficult or impossible
to ascertain, and that the remedies at law for any such breach will be
inadequate. Accordingly, the parties agree that in the event a party breaches
any covenant contained in Section 9, in addition to any other remedy which may
be available at law or in equity (or pursuant to Section 11 of this Agreement or
under any other agreement between the Company and the Executive), the other
party will be entitled to specific performance and injunctive relief.

            11.        Claw-Backs

                       (a)   In the event that the Executive violates any of the
            covenants set forth in Section 9(a) or 9(b) or materially violates
            any of the covenants set forth in Section 9(c), 9(e) or 9(f), the
            Executive shall, in addition to any other remedy which may be
            available (i) at law or in equity, (ii) pursuant to Section 10 or
            (iii) pursuant to any applicable Option or RSU agreement, be
            required to pay to the Company an amount equal to all Financial Gain
            that the Executive has received during the 12-month period
            immediately preceding (or at any time after) the date that the
            Executive first breaches such covenant. In addition, all Retention
            Options that have not been exercised prior to the date that the
            Executive violates any of the covenants set forth in Section 9(a) or
            9(b), or materially violates any of the covenants set forth in
            Section 9(c), 9(e), or 9(f) and all Retention RSUs that have not
            become vested prior to the date of such breach shall thereupon be
            forfeited.

                       (b)   If at any time during the Term the Executive
            willfully commits any act of fraud, embezzlement, misappropriation,
            material misconduct, or breach of fiduciary duty against the Company
            (or any predecessor thereto or successor thereof) having a material
            adverse impact on the Company, then (in addition to any remedy which
            may be available under any applicable Option or RSU agreement) the
            Executive shall be required to pay to the Company an amount equal to
            all Financial Gain that the Executive has received at any time
            following the date of such act. The Executive shall not be required
            to make any payments of Financial Gain pursuant to this Section
            11(b) to the extent the Executive makes payments of such Financial
            Gain in connection with the same act pursuant to Section 11(a).



                                       17



            12.        Purchases and Sales of the Company's Securities. The
Executive agrees to use his reasonable best efforts to comply in all respects
with the Company's applicable written policies regarding the purchase and sale
of the Company's securities by employees, as such written policies may be
amended from time to time and disclosed to the Executive. In particular, and
without limitation, the Executive agrees that he shall not purchase or sell
Company securities (a) at any time that he possesses material non-public
information about the Company or any of its businesses; and (b) while an
employee during any "trading blackout period" as may be determined by the
Company and set forth in the Company's applicable written policies from time to
time.

            13.        Indemnification. The Executive shall be entitled to
indemnification set forth in the Company's Charter to the maximum extent allowed
under the laws of the State of Maryland, and he shall be entitled to the
protection of any insurance policies the Company may elect to maintain generally
for the benefit of its directors and officers against all costs, charges and
expenses incurred or sustained by him in connection with any action, suit or
proceeding to which he may be made a party by reason of his being or having been
a director, officer or employee of the Company or any of its subsidiaries or his
serving or having served any other enterprise or benefit plan as a director,
officer, employee or fiduciary at the request of the Company (other than any
dispute, claim or controversy arising under or relating to this Agreement).
Notwithstanding anything to the contrary herein, the Executive's rights under
this Section 13 shall survive the termination of his employment for any reason
and the expiration of this Agreement for any reason.

            14.        Delegation and Assignment. The Executive shall not
delegate his employment obligations under this Agreement to any other person.
The Company may not assign any of its obligations hereunder other than to any
entity that acquires (by purchase, merger or otherwise) all or substantially all
of the Voting Stock or assets of the Company. In the event of the Executive's
death while he is receiving severance hereunder the remainder shall be paid to
his estate.

            15.        Notices. Any written notice required by this Agreement
will be deemed provided and delivered to the intended recipient when (a)
delivered in person by hand; or (b) three days after being sent via U.S.
certified mail, return receipt requested; or (c) the day after being sent via by
overnight courier, in each case when such notice is properly addressed to the
following address and with all postage and similar fees having been paid in
advance:

            If to the Company:     Coach, Inc.
                                   516 West 34th Street
                                   New York, New York 10001
                                   Attn:  General Counsel

            with a copy to:        Latham & Watkins LLP
                                   885 Third Avenue, Suite 1000
                                   New York, NY 10022
                                   Attn:  Bradd L. Williamson

            If to the Executive:   to him at the most recent address in the
                                   Company's records.



                                       18



Either party may change the address to which notices, requests, demands and
other communications to such party shall be delivered personally or mailed by
giving written notice to the other party in the manner described above.

            16.        Legal Fees. The Company shall pay the Executive's
reasonable attorneys' fees and disbursements incurred by him in connection with
the negotiation of this Agreement.

            17.        Binding Effect. This Agreement shall be for the benefit
of and binding upon the parties hereto and their respective heirs, personal
representatives, legal representatives, successors and, where applicable,
assigns.

            18.        Entire Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter described in
this Agreement and supersedes all prior agreements, understandings and
arrangements, both oral and written, between the parties with respect to such
subject matter; provided, however, that any written agreements between the
Executive and the Company concerning Options, RSUs or any other equity
compensation awards shall remain in full force and effect in accordance with
their terms. Subject to Section 27, this Agreement may not be modified, amended,
altered or rescinded in any manner, except by written instrument signed by both
of the parties hereto; provided, however, that the waiver by either party of a
breach or compliance with any provision of this Agreement shall not operate nor
be construed as a waiver of any subsequent breach or compliance.

            19.        Severability. In case any one or more of the provisions
of this Agreement shall be held by any court of competent jurisdiction or any
arbitrator selected in accordance with the terms hereof to be illegal, invalid
or unenforceable in any respect, such provision shall have no force and effect,
but such holding shall not affect the legality, validity or enforceability of
any other provision of this Agreement.

            20.        Dispute Resolution and Arbitration. In the event that any
dispute arises between the Company and the Executive regarding or relating to
this Agreement and/or any aspect of the Executive's employment relationship with
the Company, AND IN LIEU OF LITIGATION AND A TRIAL BY JURY, the parties consent
to resolve such dispute through mandatory arbitration under the Commercial Rules
of the American Arbitration Association ("AAA"), before a single arbitrator in
New York, New York. The parties hereby consent to the entry of judgment upon
award rendered by the arbitrator in any court of competent jurisdiction.
Notwithstanding the foregoing, however, should adequate grounds exist for
seeking immediate injunctive or immediate equitable relief, any party may seek
and obtain such relief. The parties hereby consent to the exclusive jurisdiction
in the state and Federal courts of or in the State of New York for purposes of
seeking such injunctive or equitable relief as set forth above. Any and all
out-of-pocket costs and expenses incurred by the parties in connection with such
arbitration (including attorneys' fees) shall be allocated by the arbitrator in
substantial conformance with his or her decision on the merits of the
arbitration.

            21.        Choice of Law. The Executive and the Company intend and
hereby acknowledge that jurisdiction over disputes with regard to this
Agreement, and over all aspects of the relationship between the parties hereto,
shall be governed by the laws of the State of New York without giving effect to
its rules governing conflicts of laws.


                                       19




            22.        Section Headings. The section headings contained in this
Agreement are for reference purposes only and shall not affect in any manner the
meaning or interpretation of this Agreement.

            23.        Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, but all of
which taken together shall constitute one and the same instrument.

            24.        Force Majeure. Neither Company nor the Executive shall be
liable for any delay or failure in performance of any part of this Agreement to
the extent that such delay or failure is caused by an event beyond its
reasonable control including, but not be limited to, fire, flood, explosion,
war, strike, embargo, government requirement, acts of civil or military
authority, and acts of God not resulting from the negligence of the claiming
party.

            25.        Right of Offset. The Company may offset any payment to be
made to the Executive pursuant to this Agreement by any amount that the
Executive owes to the Company (including without limitation any amount that the
Executive may be required to pay to the Company pursuant to Section 11) as of
the time such payment would otherwise be made. This right of offset shall be
cumulative (but not duplicative) with any similar obligation with respect to
which the Executive may be subject under any other agreement with the Company.
Notwithstanding the foregoing, no amount of (a) Annual Base Salary or Bonus
deferred by the Executive on or following the Effective Date pursuant to any
deferred compensation plan or arrangement maintained by the Company, or (b)
compensation deferred by the Executive prior to the Effective Date pursuant to
any deferred compensation plan or arrangement maintained by the Company shall be
subject to the Company's right of offset described in this Section 25.

            26.        Withholding. The Company shall be entitled to withhold
from any amounts payable under this Agreement any federal, state, local or
foreign withholding or other taxes or charges which the Company is required to
withhold. The Company shall be entitled to rely on an opinion of counsel if any
questions as to the amount or requirement of withholding shall arise.

            27.        Section 409A. The parties acknowledge and agree that, to
the extent applicable, this Agreement shall be interpreted in accordance with,
and the parties agree to use their best efforts to achieve timely compliance
with, Section 409A. Notwithstanding any provision of this Agreement to the
contrary, in the event that the Company determines that any amounts payable
hereunder would otherwise be taxable to the Executive under Section 409A, the
Company may (a), provided it reasonably determines that any such amendments are
likely to be effective, adopt such limited amendments to this Agreement and
appropriate policies and procedures, including amendments and policies with
retroactive effect, that the Company reasonably determines are necessary or
appropriate to comply with the requirements of Section 409A and thereby avoid
the application of penalty taxes under such Section.




                                       20





                  IN WITNESS WHEREOF, the parties have executed this Agreement
on the date and year first above written.


                              COMPANY



                              By:
                                   ---------------------------------------------

                              Its:
                                   ---------------------------------------------



                              EXECUTIVE


                              --------------------------------------------------
                              Michael Tucci





















                                       21




                                    EXHIBIT A
                                    ---------


Competitive Businesses
- ----------------------


                  The following entities, together with their respective
subsidiaries, parent entities and other affiliates, have been designated by the
Committee as Competitive Businesses as of the Effective Date: Burberry Limited;
Cole Hahn; Dooney and Bourke; Ferragamo; GAP, Inc.; Gucci Group; Hermes
International; J. Crew; Jones Apparel Group; Kate Spade; Kenneth Cole
Productions; Limited Brands, Inc.; Liz Claiborne; LVMH; Prada; Polo Ralph
Lauren; Timberland; Tod's S.p.A.; Tommy Hilfiger; Tumi.

                                                                       EXHIBIT B

                                      COACH
                            2000 STOCK INCENTIVE PLAN
                   RETENTION OPTION GRANT NOTICE AND AGREEMENT


Michael Tucci

         Coach, Inc. (the "COMPANY") is pleased to confirm that you have been
granted a stock option (the "OPTION"), effective as of NOVEMBER 8, 2005 (the
"GRANT DATE"), as provided in this agreement (the "AGREEMENT"). The Option
evidenced by this Agreement is the "RETENTION OPTION" as defined in that certain
Employment Agreement entered into by and between you and the Company effective
as of NOVEMBER 8, 2005 (the "EMPLOYMENT AGREEMENT").

         1. OPTION RIGHT. Your Option is to purchase, on the terms and
conditions set forth below, the following number of shares (the "OPTION SHARES")
of the Company's Common Stock, par value $.01 per share (the "COMMON STOCK"), at
the exercise price specified below (the "EXERCISE PRICE").

                       Number of Option Shares   Exercise Price Per Option Share
                       -----------------------   -------------------------------
      Shares Granted           252,658                       $34.12

         2. OPTION. This Option is a non-qualified stock option that is intended
to conform in all respects with the Company's 2000 Stock Incentive Plan (the
"PLAN"), a copy of which will be supplied to you upon your request, and the
provisions of which are incorporated herein by reference. This Option is not
intended to qualify as an incentive stock option within the meaning of Section
422 of the Internal Revenue Code of 1986, as amended.

         3. EXPIRATION DATE. This Option expires on the tenth (10th) anniversary
of the Grant Date (the "EXPIRATION DATE"), subject to earlier expiration upon
your death, disability or other termination of employment, as provided in
Section 5 below.

         4. VESTING. This Option may be exercised only to the extent it has
vested. Subject to Section 5 below, if you are continuously employed by the
Company or any of its affiliates (collectively, the "COACH COMPANIES") from the
Grant Date until (a) JUNE 30, 2008, this Option will vest with respect to 20% of
the Option Shares as of such date, (b) JUNE 30, 2009, this Option will vest with
respect to 20% of the Option Shares as of such date, and (c) JUNE 30, 2010, this
Option will vest with respect to the remaining 60% of the Option Shares as of
such date.



         5. TERMINATION OF EMPLOYMENT.

            (a) DEATH OR DISABILITY. If you cease active employment with the
         Company because of your death or "DISABILITY" (as defined in the
         Employment Agreement), any portion of this Option that is not vested
         and exercisable as of the date of such termination shall thereupon be
         forfeited; provided, that in the alternative the Human Resources and
         Corporate Governance Committee (the "COMMITTEE") of the Company's Board
         of Directors may, in its sole discretion, cause all or any portion of
         this Option then held by you to become vested and exercisable effective
         as of the date of such termination. In the event that your employment
         terminates due to your death or Disability, the last day on which any
         vested Options may be exercised shall be the earlier of (i) the
         Expiration Date, or (ii) the fifth anniversary of your death or
         Disability.

            (b) TERMINATION WITHOUT CAUSE OR FOR GOOD REASON. Except as
         otherwise provided in Section 5(d) with respect to certain terminations
         of employment in connection with a Change in Control, if your
         employment is terminated by the Company without "CAUSE" (as defined in
         the Employment Agreement) or by you for "GOOD REASON" (as defined in
         the Employment Agreement), then (i) any portion of this Option that is
         not vested and exercisable as of the date of such termination shall
         continue to become exercisable as of the dates set forth in Section 4
         and (ii) the last day on which this Option may be exercised shall be
         the Expiration Date.

            (c) TERMINATION FOR CAUSE OR WITHOUT GOOD REASON. If your employment
         is terminated by the Company for Cause or by you without Good Reason
         (including without limitation by reason of your retirement), then (i)
         any portion of this Option that is not vested and exercisable as of the
         date of such termination shall thereupon be forfeited and (ii) the
         vested portion of this Option shall terminate (A) if your employment is
         terminated by the Company for Cause, then this Option shall terminate
         on the date your employment terminates, (B) if your employment is
         terminated by you without Good Reason (including without limitation by
         reason of your retirement) prior to June 30, 2010, then this Option
         shall terminate on the earlier of (x) the Expiration Date, or (y) the
         90th day following the date of your termination of employment, or (C)
         if your employment is terminated by you without Good Reason (including
         without limitation by reason of your retirement) on or following June
         30, 2010, then this Option shall terminate on the Expiration Date.

            (d) CERTAIN TERMINATIONS OF EMPLOYMENT IN CONNECTION WITH A CHANGE
         IN CONTROL. Notwithstanding Section 5(b), if your employment is
         terminated by the Company without Cause or by you for Good Reason
         within six months prior to a "CHANGE IN CONTROL" (as defined in the
         Employment Agreement) or during the 12 month period immediately
         following such Change in Control, then (i) this Option shall become
         fully vested and exercisable with respect to all shares subject thereto
         effective immediately prior to the date of such


                                       2



         termination, and (ii) the last day on which this Option may be
         exercised shall be the Expiration Date.

         6. EXERCISE. This Option may be exercised (subject to the restrictions
contained in this Agreement) in whole or in part for the number of shares
specified (which in all cases must be at least the lesser of two-hundred and
fifty (250) or the total number of shares outstanding under this Option) in a
verbal or written notice that is delivered to the Company or its designated
agent and is accompanied by full payment of the Exercise Price for such number
of Option Shares in cash, or by surrendering or attesting to the ownership of
shares of Common Stock, or a combination of cash and shares of Common Stock, in
an amount or having a combined value equal to the aggregate Exercise Price for
such Option Shares. In connection with any payment of the Exercise Price by
surrender or attesting to the ownership of shares of Common Stock, proof
acceptable to the Company shall be submitted upon request that such previously
acquired shares have been owned by you for at least six (6) months prior to the
date of exercise. Notwithstanding anything contained in this Agreement to the
contrary, this Option shall not provide for the grant of any "RESTORATION
OPTIONS" as defined in the Plan.

         7. FORFEITURE. Notwithstanding anything contained in this Agreement to
the contrary, this Option shall be subject to Section 11 of the Employment
Agreement. Accordingly, if you (a) violate any of the covenants set forth in
Section 9(a) or 9(b) of the Employment Agreement, or (b) materially violate any
of the covenants set forth in Section 9(c), 9(e) or 9(f) of the Employment
Agreement, then pursuant to Section 11 of the Employment Agreement, then (i) any
portion of this Option that has not been exercised prior to the date of such
breach shall thereupon be forfeited and (ii) you shall be required to pay to the
Company the amount of all Retention Option Gain (as defined in the Employment
Agreement). You shall also be required to pay to the Company the amount of all
Retention Option Gain upon the occurrence of those certain events described in
Section 11(b) of the Employment Agreement.

         8. RIGHTS AS A STOCKHOLDER. You will have no right as a stockholder
with respect to any Option Shares until and unless ownership of such Option
Shares has been transferred to you.

         9. OPTION NOT TRANSFERABLE. This Option will not be assignable or
transferable by you, other than by a qualified domestic relations order or by
will or by the laws of descent and distribution, and will be exercisable during
your lifetime only by you (or your legal guardian or personal representative).
If this Option remains exercisable after your death, subject to Sections 1, 5
and 6 above, it may be exercised by the personal representative of your estate
or by any person who acquires the right to exercise such Option by bequest,
inheritance or otherwise by reason of your death.

         10. TRANSFERABILITY OF OPTION SHARES. Option Shares generally are
freely tradable in the United States. However, you may not offer, sell or
otherwise dispose of any Option Shares in a way which would: (a) require the
Company to file any registration statement with the Securities and Exchange
Commission (or any similar filing under state


                                       3


law or the laws of any other country) or to amend or supplement any such filing
or (b) violate or cause the Company to violate the Securities Act of 1933, as
amended, the rules and regulations promulgated thereunder, any other state or
federal law, or the laws of any other country. The Company reserves the right to
place restrictions required by law on Common Stock received by you pursuant to
this Option.

         11. CONFORMITY WITH THE PLAN. This Option is intended to conform in all
respects with, and is subject to applicable provisions of, the Plan.
Inconsistencies between this Agreement and the Plan shall be resolved in
accordance with the terms of the Plan. By your acceptance of this Agreement, you
agree to be bound by all of the terms of this Agreement and the Plan.

         12. NO RIGHTS TO CONTINUED EMPLOYMENT. Nothing in this Agreement
confers any right on you to continue in the employ of the Coach Companies or
affects in any way the right of any of the Coach Companies to terminate your
employment at any time with or without cause.

         13. MISCELLANEOUS.

            (a) AMENDMENT OR MODIFICATIONS. The grant of this Option is
         documented by the minutes of the Committee, which records are the final
         determinant of the number of shares granted and the conditions of this
         grant. The Committee may amend or modify this Option in any manner to
         the extent that the Committee would have had the authority under the
         Plan initially to grant such Option, provided that no such amendment or
         modification shall directly or indirectly impair or otherwise adversely
         affect your rights under this Agreement without your prior written
         consent. Except as in accordance with the two immediately preceding
         sentences, this Agreement may be amended, modified or supplemented only
         by an instrument in writing signed by both parties hereto.

            (b) GOVERNING LAW. All matters regarding or affecting the
         relationship of the Company and its stockholders shall be governed by
         the General Corporation Law of the State of Maryland. All other matters
         arising under this Agreement shall be governed by the internal laws of
         the State of New York, including matters of validity, construction and
         interpretation. You and the Company agree that all claims in respect of
         any action or proceeding arising out of or relating to this Agreement
         shall be heard or determined in any state or federal court sitting in
         New York, New York and you and the Company agree to submit to the
         jurisdiction of such courts, to bring all such actions or proceedings
         in such courts and to waive any defense of inconvenient forum to such
         actions or proceedings. A final judgment in any action or proceeding so
         brought shall be conclusive and may be enforced in any manner provided
         by law. Notwithstanding the foregoing, any matter also covered by, or
         dependent upon any interpretation under, the Employment Agreement shall
         be resolved pursuant to the arbitration provisions of Section 20
         thereof.

                                       4


            (c) SUCCESSORS AND ASSIGNS. Except as otherwise provided herein,
         this Agreement will bind and inure to the benefit of the respective
         successors and permitted assigns and heirs and legal representatives of
         the parties hereto whether so expressed or not.

            (d) SEVERABILITY. Whenever feasible, each provision of this
         Agreement will be interpreted in such manner as to be effective and
         valid under applicable law, but if any provision of this Agreement is
         held to be prohibited by or invalid under applicable law, such
         provision will be ineffective only to the extent of such prohibition or
         invalidity, without invalidating the remainder of this Agreement.

         14. SECTION 409A. The parties acknowledge and agree that, to the extent
applicable, this Agreement shall be interpreted in accordance with, and the
parties agree to use their best efforts to achieve timely compliance with
Section 409A of the Internal Revenue Code of 1986, as amended, and the
Department of Treasury Regulations and other interpretive guidance issued
thereunder ("SECTION 409A"). Notwithstanding any provision of this Agreement to
the contrary, in the event that the Company determines that any amounts payable
hereunder would otherwise be taxable to you under Section 409A, the Company may
(a), provided it reasonably determines that any such amendments are likely to be
effective, adopt such limited amendments to this Agreement and appropriate
policies and procedures, including amendments and policies with retroactive
effect, that the Company reasonably determines are necessary or appropriate to
comply with the requirements of Section 409A and thereby avoid the application
of penalty taxes under such Section.



                            [signature page follows]


                                       5




         In witness whereof, the parties hereto have executed and delivered this
agreement.

                                      COACH, INC.



                                      ----------------------------------------
                                      Felice Schulaner
                                      Senior Vice President of Human Resources

                                      Date:  November 8, 2005



         I ACKNOWLEDGE THAT I HAVE READ AND UNDERSTAND THE TERMS AND CONDITIONS
OF THIS AGREEMENT AND OF THE PLAN AND I AGREE TO BE BOUND THERETO.

                                      OPTIONEE:



                                      ----------------------------------------
                                      MICHAEL TUCCI

                                      SSN:
                                           -----------------------------------
                                      Date: November 8, 2005




                                       6

                                                                       EXHIBIT C

                                      COACH
                            2000 STOCK INCENTIVE PLAN
        RETENTION RESTRICTED STOCK UNIT AWARD GRANT NOTICE AND AGREEMENT

Michael Tucci

     Coach, Inc. (the "COMPANY") is pleased to confirm that you have been
granted a restricted stock unit award (the "AWARD"), effective as of NOVEMBER 8,
2005 (the "AWARD DATE"), as provided in this agreement (the "AGREEMENT")
pursuant to the Coach, Inc. 2000 Stock Incentive Plan (the "PLAN"). The
restricted stock units ("RSUs") subject to this Award are the "RETENTION RSUs"
as defined in that certain Employment Agreement entered into by and between you
and the Company effective as of NOVEMBER 8, 2005 (the "EMPLOYMENT AGREEMENT").

     1. AWARD. Subject to the restrictions, limitations and conditions as
described below, the Company hereby awards to you as of the Award Date:

                                   73,271 RSUs

which are considered Awards of Restricted Stock under the Plan. Each RSU
represents the right to receive one share of Coach, Inc. common stock upon the
satisfaction of terms and conditions set forth in this Agreement and the Plan.
While the restrictions are in effect, the RSUs are not transferable by the
Participant by means of sale, assignment, exchange, pledge, or otherwise.

     2. VESTING. The RSUs will remain restricted and may not be sold or
transferred by you until they have become vested pursuant to the terms of this
Agreement. Subject to Section 4 below (a) 20% of the RSUs shall become vested on
EACH OF JUNE 30, 2008 AND JUNE 30, 2009 and (b) the remaining 60% of the RSUs
shall become vested on JUNE 30, 2010. Each of June 30, 2008, June 30, 2009 and
June 30, 2010 shall be referred to herein as a "VESTING DATE."

     3. DISTRIBUTION OF THE AWARD. As soon as reasonably practicable following
each Vesting Date, the Human Resources and Corporate Governance Committee (the
"COMMITTEE") of the Company's Board of Directors will release the portion of the
Award that has become vested as of such Vesting Date. Applicable withholding
taxes will be settled by withholding a number of shares of Coach, Inc. common
stock with a market value not less than the amount of such taxes, and a stock
certificate for the net number of shares of Coach, Inc. common stock distributed
will be delivered to you; provided, that in the event that the Company is
liquidated in bankruptcy, (a) the Committee will not release shares of Coach,
Inc. common stock pursuant to the Award and (b) all payments made pursuant to
the Award will be made in cash equal to the fair market value per share of
Coach, Inc. common stock on the distribution date multiplied by the number of
RSUs.




     4. TERMINATION OF EMPLOYMENT.

          (a) DEATH OR DISABILITY. If you cease active employment with the
     Company because of your death or "DISABILITY" (as defined in the Employment
     Agreement), any portion of the Award that has not become vested on or prior
     to the date of such termination shall thereupon be forfeited; provided,
     that in the alternative the Committee may, in its sole discretion, cause
     all or any portion of the Award to become vested effective as of the date
     of such termination.

          (b) TERMINATION WITHOUT CAUSE OR FOR GOOD REASON. Except as otherwise
     provided in Section 4(d) with respect to certain terminations of employment
     in connection with a Change in Control, if your employment is terminated by
     the Company without "CAUSE" (as defined in the Employment Agreement) or by
     you for "GOOD REASON" (as defined in the Employment Agreement), then any
     portion of the Award that has not become vested on or prior to the date of
     such termination shall continue to become vested as of the dates set forth
     in Section 2.

          (c) TERMINATION FOR CAUSE OR WITHOUT GOOD REASON. If your employment
     is terminated by the Company for Cause or by you without Good Reason
     (including without limitation by reason of your retirement), then any
     portion of the Award that has not become vested on or prior to the date of
     such termination shall thereupon be forfeited.

          (d) CERTAIN TERMINATIONS OF EMPLOYMENT IN CONNECTION WITH A CHANGE IN
     CONTROL. Notwithstanding Section 4(b), if your employment is terminated by
     the Company without Cause or by you for Good Reason within six months prior
     to a "CHANGE IN CONTROL" (as defined in the Employment Agreement) or during
     the 12 month period immediately following such Change in Control, then the
     Award shall become fully vested effective immediately prior to the date of
     such termination.

     5. FORFEITURE. Notwithstanding anything contained in this Agreement to the
contrary, the Award shall be subject to Section 11 of the Employment Agreement.
Accordingly, if you (a) violate any of the covenants set forth in Section 9(a)
or 9(b) of the Employment Agreement, or (b) materially violate any of the
covenants set forth in Section 9(c), 9(e) or 9(f) of the Employment Agreement,
then pursuant to Section 11 of the Employment Agreement (i) any portion of the
Award that has not become vested prior to the date of such breach shall
thereupon be forfeited and (ii) you shall be required to pay to the Company the
amount of all "RETENTION RSU GAIN" (as defined in the Employment Agreement). You
shall also be required to pay to the Company the amount of all Retention RSU
Gain upon the occurrence of those certain events described in Section 11(b) of
the Employment Agreement.

     6. AWARD NOT TRANSFERABLE. The Award will not be assignable or transferable
by you, other than by a qualified domestic relations order or by will or by the


                                       2




laws of descent and distribution, and will be exercisable during your lifetime
only by you (or your legal guardian or personal representative).

     7. TRANSFERABILITY OF AWARD SHARES. The shares you will receive under the
Award on or following the applicable Vesting Date generally are freely tradable
in the United States. However, you may not offer, sell or otherwise dispose of
any shares in a way which would: (a) require the Company to file any
registration statement with the Securities and Exchange Commission (or any
similar filing under state law or the laws of any other country) or to amend or
supplement any such filing or (b) violate or cause the Company to violate the
Securities Act of 1933, as amended, the rules and regulations promulgated
thereunder, any other state or federal law, or the laws of any other country.
The Company reserves the right to place restrictions required by law on any
shares of Coach, Inc. common stock received by you pursuant to the Award.

     8. CONFORMITY WITH THE PLAN. The Award is intended to conform in all
respects with, and is subject to applicable provisions of, the Plan.
Inconsistencies between this Agreement and the Plan shall be resolved in
accordance with the terms of the Plan. By your acceptance of this Agreement, you
agree to be bound by all of the terms of this Agreement and the Plan.

     9. NO RIGHTS TO CONTINUED EMPLOYMENT. Nothing in this Agreement confers any
right on you to continue in the employ of the Coach Companies or affects in any
way the right of any of the Coach Companies to terminate your employment at any
time with or without cause.

     10. MISCELLANEOUS.

          (a) AMENDMENT OR MODIFICATIONS. The grant of the Award is documented
     by the minutes of the Committee, which records are the final determinant of
     the number of shares granted and the conditions of this grant. The
     Committee may amend or modify the Award in any manner to the extent that
     the Committee would have had the authority under the Plan initially to
     grant such Award, provided that no such amendment or modification shall
     directly or indirectly impair or otherwise adversely affect your rights
     under this Agreement without your prior written consent. Except as in
     accordance with the two immediately preceding sentences, this Agreement may
     be amended, modified or supplemented only by an instrument in writing
     signed by both parties hereto.

          (b) GOVERNING LAW. All matters regarding or affecting the relationship
     of the Company and its stockholders shall be governed by the General
     Corporation Law of the State of Maryland. All other matters arising under
     this Agreement shall be governed by the internal laws of the State of New
     York, including matters of validity, construction and interpretation. You
     and the Company agree that all claims in respect of any action or
     proceeding arising out of or relating to this Agreement shall be heard or
     determined in any state or federal court sitting in New York, New York and
     you and the Company agree to submit to the jurisdiction of such courts, to
     bring all such actions or proceedings

                                       3




     in such courts and to waive any defense of inconvenient forum to such
     actions or proceedings. A final judgment in any action or proceeding so
     brought shall be conclusive and may be enforced in any manner provided by
     law. Notwithstanding the foregoing, any matter covered by, or dependent
     upon any interpretation under, the Employment Agreement shall be resolved
     pursuant to the arbitration provisions of Section 20 thereof.

          (c) SUCCESSORS AND ASSIGNS. Except as otherwise provided herein, this
     Agreement will bind and inure to the benefit of the respective successors
     and permitted assigns and heirs and legal representatives of the parties
     hereto whether so expressed or not.

          (d) SEVERABILITY. Whenever feasible, each provision of this Agreement
     will be interpreted in such manner as to be effective and valid under
     applicable law, but if any provision of this Agreement is held to be
     prohibited by or invalid under applicable law, such provision will be
     ineffective only to the extent of such prohibition or invalidity, without
     invalidating the remainder of this Agreement.

     11. SECTION 409A. The parties acknowledge and agree that, to the extent
applicable, this Agreement shall be interpreted in accordance with, and the
parties agree to use their best efforts to achieve timely compliance with
Section 409A of the Internal Revenue Code of 1986, as amended, and the
Department of Treasury Regulations and other interpretive guidance issued
thereunder ("SECTION 409A"). Notwithstanding any provision of this Agreement to
the contrary, in the event that the Company determines that any amounts payable
hereunder would otherwise be taxable to you under Section 409A, the Company may
(a), provided it reasonably determines that any such amendments are likely to be
effective, adopt such limited amendments to this Agreement and appropriate
policies and procedures, including amendments and policies with retroactive
effect, that the Company reasonably determines are necessary or appropriate to
comply with the requirements of Section 409A and thereby avoid the application
of penalty taxes under such Section.


                            [signature page follows]

                                       4




     In witness whereof, the parties hereto have executed and delivered this
agreement.

                                        COACH, INC.


                                        ----------------------------------
                                        Felice Schulaner
                                        Senior Vice President of Human Resources

                                        Date:  November 8, 2005



         I ACKNOWLEDGE THAT I HAVE READ AND UNDERSTAND THE TERMS AND CONDITIONS
OF THIS AGREEMENT AND OF THE PLAN AND I AGREE TO BE BOUND THERETO.

                                        AWARD RECIPIENT:

                                        ----------------------------------
                                        MICHAEL TUCCI

                                        SSN:
                                             -----------------------------

                                        Date: November 8, 2005



                                       5

                                                                       EXHIBIT D

                        SEPARATION AND RELEASE AGREEMENT

         Coach, Inc. and its subsidiaries (collectively, the "COMPANY") and
Michael Tucci ("EXECUTIVE") enter into this Separation and Release Agreement
("AGREEMENT"), which was received by Executive on the _______ day of
____________, 200__, signed by Executive on the date shown below Executive's
signature on the last page of this Agreement and is effective eight days (8)
after the date of execution by Executive unless employee revokes the agreement
before that date, for and in consideration of the promises made among the
parties and other good and valuable consideration as follows:

                              W I T N E S S E T H:
                              -------------------

         WHEREAS, Executive has been employed by the Coach, Inc. as President,
North  America Retail Division;

         WHEREAS, Executive and the Company have agreed that Executive's
employment with the Company [will terminate as of] [has terminated as of]
[termdate;] and

         WHEREAS, Executive and the Company have negotiated and reached an
agreement with respect to all rights, duties and obligations arising between
them, including, but in no way limited to, any rights, duties and obligations
that have arisen or might arise out of or are in any way related to Executive's
employment with the Company and the conclusion of that employment.

         NOW, THEREFORE, in consideration of the covenants and mutual promises
herein contained, it is agreed as follows:

          1. Separation Date. Until [termdate,] (the "SEPARATION DATE"),
     Executive [shall continue][has continued] as an employee of the Company and
     shall receive the same compensation and benefits he presently receives.
     Executive agrees to resign his employment and all appointments he holds
     with the Company and its affiliates effective on the Separation Date.
     Executive understands and agrees that his employment with the Company will
     conclude on the close of business on the Separation Date.

          2. Severance Payments and Benefits.

               (a) The Company hereby agrees to pay Executive all amounts due
          and payable, and to provide the Executive with all benefits and
          perquisites required, pursuant to Section 7 of that certain Employment
          Agreement effective as of November 8, 2005 by and between Coach, Inc.
          and the Executive (the "EMPLOYMENT AGREEMENT").

               (b) In the event of the Executive's death prior to the payment of
          any amount payable pursuant to Section 7 of the Employment Agreement,
          such amount shall be payable to Executive's estate and, except to the
          extent benefits contemplated herein are provided by their terms to
          Executive's heirs and





          beneficiaries, the Company shall have no further obligations to
          Executive's beneficiaries under this Agreement (other than Section 8
          and 13 of the Employment Agreement).

               (c) The severance payments shall cease if the Executive becomes
          reemployed by the Company or any enterprise in which Coach, Inc. owns
          a controlling interest.

          3. Receipt of Other Compensation. Executive acknowledges and agrees
     that, other than as specifically set forth in this Agreement, including
     without limitation the provisions of the Employment Agreement set forth
     herein, Executive is not and will not be due any compensation, including,
     but not limited to, compensation for unpaid salary (except for amounts
     unpaid and owing for Executive's employment with the Company and its
     affiliates prior to the Separation Date), severance and unused vacation
     time or vacation pay from the Company or any of its affiliates, except for
     amounts unpaid but accrued in accordance with Section 7(a) of the
     Employment Agreement, and as of and after the Separation Date, except as
     provided herein and as set forth in accordance with Section 7, 8 or 13 of
     the Employment Agreement, Executive will not be eligible to participate in
     any of the benefit plans of the Company or any of its affiliates,
     including, without limitation, the Company's Savings and Profit Sharing
     Plan, travel accident insurance, personal accident insurance, accidental
     death and dismemberment insurance and short-term and long-term disability
     insurance. Executive will be entitled to receive benefits, which are vested
     and accrued prior to the Separation Date pursuant to the employee benefit
     plans of the Company. The Company shall promptly reimburse Executive for
     business expenses incurred in the ordinary course of Executive's employment
     on or before the Separation Date, but not previously reimbursed, provided
     the Company's policies of documentation and approval are satisfied.

          4. Annual Bonus. Executive shall receive [INSERT PRO RATA PORTION] of
     Executive's bonus earned under the Performance-Based Annual Incentive Plan
     of the Company for the [####] fiscal year as a result of Executive's
     employment with the Company during the [####] fiscal year. For purposes of
     calculating the bonus, the Company will use Executive's actual financial or
     other quantitative performance criteria to determine the Executive's bonus.
     With respect to any discretionary, non-quantitative component of the bonus,
     the Company will assume a [SE/EE/ME] level of performance by the Executive.
     The bonus payment provided for in this Paragraph 4 shall be in lieu of, not
     in addition to, all bonuses payable to the Executive and shall be paid to
     Executive on the same date or dates on which active participants under such
     bonus plan are paid bonuses for the applicable bonus periods. The bonus
     payment, if any, made by the Company shall be reduced by applicable
     withholding and other customary payroll deductions. Executive shall not be
     entitled to participate in any annual bonus plan of the Company for any
     fiscal year ending after the [####] fiscal year.

          5. Stock Options. Notwithstanding any other provision of this
     Agreement, Executive's Stock Options, Retention Stock Units and any other
     equity compensation awards shall be treated pursuant to the written terms
     and conditions of the applicable grant agreement and in accordance with
     Section 7 of the Employment Agreement


                                       2




     including without limitation any provisions therein with regard to
     termination, forfeiture, or claw back. Executive shall not be entitled to
     receive any new stock option grants, including Restoration stock options,
     after the Separation Date.

          6. Health Insurance Continuation, Universal Life. Executive's
     participation in the employee benefit plans available to the Executives of
     Coach, Inc. shall cease as of the Separation Date except as continued in
     accordance with Section 7 of the Employment Agreement; however, Executive
     shall have the right, at Executive's expense, to exercise such conversion
     privileges as may be available under such plans. The Company shall cease
     paying premiums for the individual universal life insurance policy provided
     to Executive by the Company under the Executive Life Insurance Plan as of
     the Separation Date; however, Executive may, at Executive's election, keep
     the policy in effect after the Separation Date by paying the premiums
     therefor as they come due. The Company will continue to provide the
     Executive with all health and welfare benefits and perquisites which he was
     participating in for the duration stated in Section 7 of the Employment
     Agreement, as applicable. When such Company benefits cease, Executive shall
     be eligible to elect COBRA continuation coverage under the group medical
     and dental plan available to the Executives of Coach, Inc. The premium
     charged during the period stated in Section 7 of the Employment Agreement
     shall be at the same rate charged an active employee of the Company for
     similar coverage. The premium charged for COBRA continuation coverage after
     the end of the period stated in Section 7 of the Employment Agreement shall
     be entirely at Executive's expense and may be different from the premium
     charged during the period stated in Section 7 of the Employment Agreement.
     Executive's COBRA continuation coverage shall terminate in accordance with
     the COBRA continuation of coverage provisions under the group medical and
     dental plans of the Company.

          7. [Automobile. Executive may continue to use the automobile provided
     to Executive by the Company in accordance with the terms of the Company's
     leased automobile policy until the earlier of (i) the end of the period
     during which severance is payable pursuant to Section 7 of the Employment
     Agreement, (ii) the date on which Executive accepts full-time employment
     with another employer or (iii) the end of the lease term and provided
     further that the Company shall only be responsible for the lease payments
     and insurance; Executive shall be responsible for all other operating
     expenses, including all fuel and maintenance expenses related to the
     automobile. Executive shall have the option to purchase the automobile at
     any time during the term of this Agreement or upon the termination of this
     Agreement. In the event the Executive elects to purchase the automobile,
     the purchase price shall be determined in accordance with the Company's
     current policy. During the term of this lease, the Company shall continue
     to insure or provide insurance (including collision, comprehensive and
     liability) for the automobile.]

          8. Other Benefits. Executive will be entitled to fulfillment of any
     matching grant obligations under the Company's Matching Grants Program with
     respect to commitments made by Executive prior to the Separation Date.

          9. Non-Solicitation, Non-Competition, Confidentiality,
     Non-Disparagement. Section 9 of the Employment Agreement shall continue to
     apply and shall be deemed
                                       3





     made a part hereof as if set forth herein in full. In the event of a breach
     of such section, all provisions of the Employment Agreement concerning such
     a breach shall apply (including without limitation Sections 10 and 11).

          10. Overpayments, Employee Reimbursements and Return of Company
     Property. Executive agrees to repay any overpayment of severance payments,
     vacation payments, or other amount miscalculated hereunder to which
     Employee is not expressly entitled under the terms of this Agreement
     ("SEVERANCE OVERPAYMENT"). Executive expressly agrees that the Company may
     reconcile or set off any Severance Overpayment against any remaining unpaid
     severance payments or other severance pay, including vacation, due under
     this Agreement, or against any amounts due to Executive under any Company
     non-qualified plans.

          11. Employment Agreement Provisions. Sections 8, 9, 13 and 20 of the
     Employment Agreement shall continue to apply and shall be deemed made a
     part hereof as if set forth herein in full.

          12. Release.

               (a) Executive on behalf of himself, his heirs, executors,
          administrators and assigns, does hereby knowingly and voluntarily
          release, acquit and forever discharge the Company and any affiliates,
          successors, assigns and past, present and future directors, officers,
          employees, trustees and shareholders (the "RELEASED PARTIES") from and
          against any and all charges, complaints, claims, cross-claims,
          third-party claims, counterclaims, contribution claims, liabilities,
          obligations, promises, agreements, controversies, damages, actions,
          causes of action, suits, rights, demands, costs, losses, debts and
          expenses of any nature whatsoever, known or unknown, suspected or
          unsuspected, foreseen or unforeseen, matured or unmatured, which, at
          any time up to and including the date thereof, exists, have existed,
          or may arise from any matter whatsoever occurring, including, but not
          limited to, any claims arising out of or in any way related to
          Executive's employment with the Company or its affiliates and the
          conclusion thereof, which Executive, or any of his heirs, executors,
          administrators and assigns and affiliates and agents ever had, now has
          or at any time hereafter may have, own or hold against the Company or
          any affiliates, legal representatives, successors and assigns, past,
          present and future directors, officers, employees, trustees and
          shareholders. Executive acknowledges that in exchange for this
          release, the Company is providing Executive with total consideration,
          financial or otherwise, which exceeds what Executive would have been
          given without the release. By executing this Agreement, Executive is
          waiving all claims against the Company and its related persons arising
          under federal, state and local labor and antidiscrimination laws and
          any other restriction on the right to terminate employment, including,
          without limitation, Title VII of the Civil Rights Act of 1964, as
          amended, the Americans with Disabilities Act of 1990, as amended, and
          the Human Rights Act, as amended. Nothing herein shall release any
          party from any obligation under this Agreement. Notwithstanding
          anything herein to the contrary, Executive expressly reserves and does
          not release his rights of


                                       4


          indemnification to which he is entitled under Section 13 of the
          Employment Agreement, or any other rights of indemnification with
          regard to his service as an officer and director of the Company and
          its subsidiaries and its affiliates and any benefit plan, or his
          rights to, and under, director and officer liability insurance
          coverage.

               (b) EXECUTIVE SPECIFICALLY WAIVES AND RELEASES THE COMPANY FROM
          ALL CLAIMS EXECUTIVE MAY HAVE AS OF THE DATE EXECUTIVE SIGNS THIS
          AGREEMENT REGARDING CLAIMS OR RIGHTS ARISING UNDER THE AGE
          DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED, 29 U.S.C. ss.
          621 ("ADEA"). EXECUTIVE FURTHER AGREES: (A) THAT EXECUTIVE'S WAIVER OF
          RIGHTS UNDER THIS RELEASE IS KNOWING AND VOLUNTARY AND IN COMPLIANCE
          WITH THE OLDER WORKER'S BENEFIT PROTECTION ACT OF 1990; (B) THAT
          EXECUTIVE UNDERSTANDS THE TERMS OF THIS RELEASE; (C) THAT THE
          SEVERANCE PAYMENTS AND OTHER BENEFITS CALLED FOR IN THIS AGREEMENT
          WOULD NOT BE PROVIDED TO ANY EXECUTIVE TERMINATING HIS OR HER
          EMPLOYMENT WITH THE COMPANY WHO DID NOT SIGN A RELEASE SIMILAR TO THIS
          RELEASE, THAT SUCH PAYMENTS AND BENEFITS WOULD NOT HAVE BEEN PROVIDED
          HAD EXECUTIVE NOT SIGNED THIS RELEASE, AND THAT THE PAYMENTS AND
          BENEFITS ARE IN EXCHANGE FOR THE SIGNING OF THIS RELEASE; (D) THAT
          EXECUTIVE HAS BEEN ADVISED IN WRITING BY THE COMPANY TO CONSULT WITH
          AN ATTORNEY PRIOR TO EXECUTING THIS RELEASE; (E) THAT THE COMPANY HAS
          GIVEN EXECUTIVE A PERIOD OF AT LEAST TWENTY-ONE (21) DAYS WITHIN WHICH
          TO CONSIDER THIS RELEASE; (F) THAT EXECUTIVE REALIZES THAT FOLLOWING
          EXECUTIVE'S EXECUTION OF THIS RELEASE, EXECUTIVE HAS SEVEN (7) DAYS IN
          WHICH TO REVOKE THIS RELEASE BY WRITTEN NOTICE TO THE UNDERSIGNED, AND
          (G) THAT THIS ENTIRE AGREEMENT SHALL BE VOID AND OF NO FORCE AND
          EFFECT IF EXECUTIVE CHOOSES TO SO REVOKE, AND IF EXECUTIVE CHOOSES NOT
          TO SO REVOKE, THAT THIS AGREEMENT AND RELEASE THEN BECOME EFFECTIVE
          AND ENFORCEABLE.

          13. Covenant Not to Sue. To the maximum extent permitted by law,
     Executive covenants not to sue or to institute or cause to be instituted
     any action in any federal, state, or local agency or court against any of
     the Released Parties, with regard to any of the claims released in
     paragraph 12 of this Agreement. In the event of Executive's breach of the
     terms of this provision, without prejudice to the Company's other rights
     and remedies available at law or in equity, except as prohibited by law,
     Executive shall be liable for all costs and expenses (including, without
     limitation, reasonable attorney's fees and legal expenses) incurred by the
     Company as a result of such breach. Notwithstanding the foregoing, nothing
     herein shall prevent Executive or the Company from instituting any action
     required to enforce the terms of this Agreement. In addition, nothing
     herein shall be construed to prevent Executive from enforcing any rights


                                       5



     Executive may have under the Executive Retirement Income Security Act of
     1974, commonly known as ERISA.

          14. Recommendations. The Company's executive officers will provide
     references for Executive to any prospective employer of the Executive who
     contacts the Company's executive officers in accordance with the Company's
     reference policy. The Company represents that it and its executive officers
     have no current knowledge concerning any issues that would affect the
     ability of the Company and its executive officers to provide such
     references.

          15. Executive's Understanding. Executive acknowledges by signing this
     Agreement that Executive has read and understands this document, that
     Executive has had an opportunity to review this Agreement, that Executive
     has conferred with or had opportunity to confer with Executive's attorney
     regarding the terms and meaning of this Agreement, that Executive has had
     sufficient time to consider the terms provided for in this Agreement, that
     no representatives or inducements have been made to Executive except as set
     forth in this Agreement, and that Executive has signed the same KNOWINGLY
     AND VOLUNTARILY.

          16. Non-Reliance. Executive represents to the Company and the Company
     represents to Executive that in executing this Agreement they do not rely
     and have not relied upon any representation or statement not set forth
     herein made by the other or by any of the other's agents, representatives
     or attorneys with regard to the subject matter, basis or effect of this
     Agreement or otherwise.

          17. Severability of Provisions. In the event that any one or more of
     the provisions of this Agreement is held to be invalid, illegal or
     unenforceable, the validity, legality and enforceability of the remaining
     provisions will not in any way be affected or impaired thereby. Moreover,
     if any one or more of the provisions contained in this Agreement are held
     to be excessively broad as to duration, scope, activity or subject, such
     provisions will be construed by limiting and reducing them so as to be
     enforceable to the maximum extent compatible with applicable law.

          18. Non-Admission of Liability. Executive agrees that neither this
     Agreement nor the performance by the parties hereunder constitutes an
     admission by any of the Released Parties of any violation of any federal,
     state or local law, regulation, common law, breach of any contract, or any
     wrongdoing of any type.

          19. Non-Assignability. The rights and benefits available under this
     Agreement are personal to Executive and such rights and benefits shall not
     be subject to assignment, alienation or transfer, except to the extent such
     rights and benefits are lawfully available to the estate or beneficiaries
     of Executive upon death.

          20. Entire Agreement. This Agreement sets forth all the terms and
     conditions with respect to compensation, remuneration of payments and
     benefits due Executive from the Company and supersedes and replaces any and
     all other agreements or understandings Executive may have had with respect
     thereto. It may not be modified or amended except



                                       6



     in writing and signed by both the Executive and an authorized
     representative of the Company.

          21. Notices. Any notice to be given hereunder shall be in writing and
     shall be deemed given when mailed by certified mail, return receipt
     requested, addressed as follows:

                           To Executive at:
                           Michael Tucci
                           at the last known address on Company record

                           To the Company at:
                           Coach, Inc.
                           516 West 34th Street
                           New York, New York  10001
                           Attention:  General Counsel



                                       7




         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
In witness whereof, the parties hereto have executed and delivered this
agreement.

                                   COACH, INC.



                                   ---------------------------------------------


                                   Date:  ______________________________________



         Accepted and agreed to.

                                   EXECUTIVE:



                                   ---------------------------------------------
                                   Michael Tucci

                                   SSN: ________________________________________

                                   Date:  ______________________________________



                                       8

                              EMPLOYMENT AGREEMENT

          THIS AGREEMENT, effective as of November 8, 2005 (the "Effective
Date"), but subject to the approval of the Committee (as defined below), is made
by and between Coach, Inc., a Maryland corporation (the "Company") and Michael
F. Devine III (the "Executive").

                                    RECITALS:

          A. It is the desire of the Company to assure itself of the services of
the Executive by engaging the Executive as its Senior Vice President and Chief
Financial Officer.

          B. The Executive desires to commit himself to serve the Company on the
terms herein provided.

          NOW, THEREFORE, in consideration of the foregoing and of the
respective covenants and agreements set forth below, the parties hereto agree as
follows:

          1. Certain Definitions

               (a) "Affiliate" shall mean with respect to any Person, any other
     Person directly or indirectly, through one or more intermediaries,
     controlling, controlled by, or under common control with, such Person. For
     purposes of this Section 1(a), "control" shall have the meaning given such
     term under Rule 405 of the Securities Act of 1933, as amended.

               (b) "Annual Base Salary" shall have the meaning set forth in
     Section 5(a).

               (c) "Board" shall mean the Board of Directors of the Company.

               (d) "Bonus" shall have the meaning set forth in Section 5(b).

               (e) The Company shall have "Cause" to terminate the Executive's
     employment upon (i) the Executive's failure to attempt in good faith to
     substantially perform the duties as Senior Vice President and Chief
     Financial Officer (other than any such failure resulting from the
     Executive's physical or mental incapacity) which is not remedied within 30
     days after receipt of written notice from the Company specifying such
     failure; (ii) the Executive's failure to attempt in good faith to carry
     out, or comply with, in any material respect any lawful and reasonable
     directive of the Company's Chief Executive Officer or President and Chief
     Operating Officer which is not remedied within 30 days after receipt of
     written notice from the Company specifying such failure; (iii) the
     Executive's commission at any time of any act or omission that results in,
     or may reasonably be expected to result in, a conviction, plea of no
     contest, or imposition of unadjudicated probation for any felony (or any
     other crime involving fraud, embezzlement, material misconduct or
     misappropriation having a material adverse impact on the Company); (iv) the
     Executive's unlawful use (including being under the influence) or
     possession of illegal drugs on the Company's premises or while performing
     the Executive's duties and responsibilities; or (v) the Executive's willful
     commission at




     any time of any act of fraud, embezzlement, misappropriation, misconduct,
     or breach of fiduciary duty against the Company (or any predecessor thereto
     or successor thereof) having a material adverse impact on the Company.

               (f) "Change in Control" shall occur when:

                    (i) A Person (which term, when used in this Section 1(f),
          shall not include the Company, any underwriter temporarily holding
          securities pursuant to an offering of such securities, any trustee or
          other fiduciary holding securities under an employee benefit plan of
          the Company, or any Company owned, directly or indirectly, by the
          stockholders of the Company in substantially the same proportions as
          their ownership of Voting Stock of the Company) is or becomes, without
          the prior consent of a majority of the Continuing Directors, the
          beneficial owner (as defined in Rule 13d-3 promulgated under the
          Securities Exchange Act of 1934, as amended), directly or indirectly,
          of Voting Stock representing, without the prior written consent of a
          majority of the Continuing Directors twenty percent (20%) (or, even
          with such prior consent, thirty-five percent (35%)) or more of the
          combined voting power of the Company's then outstanding securities; or

                    (ii) The Company consummates a reorganization, merger or
          consolidation of the Company (which prior to the date of such
          consummation has been approved by the Company's stockholders) or the
          Company sells, or otherwise disposes of, all or substantially all of
          the Company's property and assets (other than a reorganization,
          merger, consolidation or sale which would result in all or
          substantially all of the beneficial owners of the Voting Stock of the
          Company outstanding immediately prior thereto continuing to
          beneficially own, directly or indirectly (either by remaining
          outstanding or by being converted into voting securities of the
          resulting entity), more than fifty percent (50%) of the combined
          voting power of the voting securities of the Company or such entity
          resulting from the transaction (including, without limitation, an
          entity which as a result of such transaction owns the Company or all
          or substantially all of the Company's property or assets, directly or
          indirectly) outstanding immediately after such transaction in
          substantially the same proportions relative to each other as their
          ownership immediately prior to such transaction), or the Company's
          stockholders approve a liquidation or dissolution of the Company; or

                    (iii) The individuals who are Continuing Directors of the
          Company (as defined below) cease for any reason to constitute at least
          a majority of the Board.

               (g) "Code" shall mean the Internal Revenue Code of 1986, as
     amended.

               (h) "Committee" shall mean the Human Resources and Corporate
     Governance Committee of the Board.



                                       2


               (i) "Common Stock" shall mean the $.01 par value common stock of
     the Company.

               (j) "Company" shall, except as otherwise provided in Section 9,
     have the meaning set forth in the preamble hereto.

               (k) "Competitive Business" shall mean any entity that, as of the
     date of the Executive's termination of employment, the Committee has
     designated in its sole discretion as an entity that competes with any of
     the businesses of the Company; provided, that (i) not more than 20 entities
     (which term "entities" shall include any subsidiaries, parent entities and
     other Affiliates thereof) shall be designated as Competitive Businesses at
     one time and (ii) such entities are the same 20 entities used for any list
     of competitive entities for any other arrangement with an executive of the
     Company; and, provided further, that subject to compliance with clauses (i)
     and (ii) of this definition, the Committee may change its designation of
     Competitive Businesses at any time that is not less than 90 days prior to
     the Executive's termination of employment upon written notice thereof to
     the Executive (and any such change within the 90 day period immediately
     preceding the Executive's termination of employment shall not be
     effective). The list of Competitive Businesses in effect as of the
     Effective Date is attached hereto as Exhibit A (which the parties
     acknowledge and agree may be changed by the Committee in accordance with
     the terms of the immediately preceding sentence).

               (l) "Continuing Director" means (i) any member of the Board
     (other than an employee of the Company) as of the Effective Date or (ii)
     any person who subsequently becomes a member of the Board (other than an
     employee of the Company) whose election or nomination for election to the
     Board is recommended by a majority of the Continuing Directors.

               (m) "Contract Year" shall mean (i) the period beginning on
     November 8, 2005 and ending on June 30, 2006 and (ii) each twelve-month
     period beginning on July 1, 2006 or any anniversary thereof.

               (n) "Date of Termination" shall mean (i) if the Executive's
     employment is terminated by his death, the date of his death and (ii) if
     the Executive's employment is terminated pursuant to Section 6(a)(ii) -
     (vi), the date specified in the Notice of Termination (or if no such date
     is specified, the last day of the Executive's active employment with the
     Company).

               (o) "Disability" shall mean any mental or physical illness,
     condition, disability or incapacity which:

                    (i) Prevents the Executive from discharging substantially
          all of his essential job responsibilities and employment duties;

                    (ii) Shall be attested to in writing by a physician or a
          group of physicians selected by the Executive and acceptable to the
          Company; and



                                       3


                    (iii) Has prevented the Executive from so discharging his
          duties for any 180 days in any 365 day period.

     A Disability shall be deemed to have occurred on the 180th day in any such
     365 day period.

               (p) "Executive" shall have the meaning set forth in the preamble
     hereto.

               (q) "Extension Term" shall have the meaning set forth in Section
     2.

               (r) "Financial Gain" with respect to any specified period of time
     shall mean the sum of all (i) Retention Option Gains realized by the
     Executive during such period and (ii) Retention RSU Gains realized by the
     Executive during such period.

               (s) The Executive shall have "Good Reason" to resign his
     employment upon the occurrence of any of the following: (i) failure of the
     Company to continue the Executive in the position of Senior Vice President
     and Chief Financial Officer (or any other position not less senior to such
     position); (ii) a material diminution in the nature or scope of the
     Executive's responsibilities, duties or authority; (iii) relocation of the
     Company's executive offices more than 50 miles outside of New York, New
     York or relocation of Executive away from the executive offices; (iv)
     failure of the Company to timely make any material payment or provide any
     material benefit under this Agreement, or the Company's material reduction
     of any compensation, equity or benefits that the Executive is eligible to
     receive under this Agreement; or (v) the Company's material breach of this
     Agreement; provided, however, that notwithstanding the foregoing the
     Executive may not resign his employment for Good Reason unless: (x) the
     Executive provides the Company with at least 30 days prior written notice
     of his intent to resign for Good Reason (which notice is provided not later
     than the 60th day following the occurrence of the event constituting Good
     Reason) and (y) the Company does not remedy the alleged violation(s) within
     such 30-day period; and, provided, further, that Executive may resign his
     employment for Good Reason if in connection with any Change in Control the
     surviving entity does not assume this Agreement (or, with the written
     consent of the Executive, substitute a substantially identical agreement)
     with respect to the Executive in writing delivered to the Executive prior
     to, or as soon as reasonably practicable following, the occurrence of such
     Change in Control.

               (t) "Initial Term" shall have the meaning set forth in Section 2.

               (u) "Intellectual Property" shall have the meaning set forth in
     Section 9(f).

               (v) "Maximum Bonus" shall have the meaning set forth in Section
     5(b).

               (w) "Notice of Termination" shall have the meaning set forth in
     Section 6(b).



                                       4


               (x) "Option" shall mean an option to purchase Common Stock
     pursuant to any of the Stock Incentive Plans (or any other equity based
     compensation plan or agreement that may be adopted or entered into by the
     Company from time to time).

               (y) "Person" shall mean an individual, partnership, corporation,
     business trust, limited liability company, joint stock company, trust,
     unincorporated association, joint venture, governmental authority or other
     entity of whatever nature.

               (z) "Pro-Rata Bonus" shall have the meaning set forth in Section
     7(d).

               (aa) "Release" shall have the meaning set forth in Section 7(b).

               (bb) "Retention Option Gain" with respect to any specified period
     of time shall mean the product of (i) the number of shares of Common Stock
     purchased upon the exercise of any Retention Options during such period and
     (ii) the excess of (A) the fair market value per share of Common Stock as
     of the date of such exercise over (B) the exercise price per share of
     Common Stock subject to such Retention Options.

               (cc) "Retention Options" shall have the meaning set forth in
     Section 5(c).

               (dd) "Retention RSU Gain" with respect to any specified period of
     time shall mean the product of (i) the number of shares of Common Stock
     subject to Retention RSUs that first become vested during such period and
     (ii) the fair market value per share of Common Stock as of the date such
     Retention RSUs first become vested.

               (ee) "Retention RSUs" shall have the meaning set forth in Section
     5(d).

               (ff) "Section 409A" shall mean Section 409A of the Code and the
     Department of Treasury Regulations and other interpretive guidance issued
     thereunder, including without limitation any such regulations or other
     guidance that may be issued after the Effective Date.

               (gg) "Severance Amount" shall have the meaning set forth in
     Section 7(b)(i).

               (hh) "Severance Commencement Date" shall mean the six-month
     anniversary of the Date of Termination.

               (ii) "Stock Incentive Plans" shall mean the Company's 2000 Stock
     Incentive Plan and the Company's 2004 Stock Incentive Plan, each as amended
     from time to time.

               (jj) "Target Bonus" shall have the meaning set forth in Section
     5(b).

               (kk) "Term" shall have the meaning set forth in Section 2.



                                       5


               (ll) "Voting Stock" means all capital stock of the Company which
     by its terms may be voted on all matters submitted to stockholders of the
     Company generally.

          2. Employment. The Company shall employ the Executive and the
Executive shall continue in the employ of the Company, for the period set forth
in this Section 2, in the positions set forth in the first sentence of Section 3
and upon the other terms and conditions herein provided. The initial term of
employment under this Agreement (the "Initial Term") shall be for the period
beginning on the Effective Date and ending on June 30, 2010, unless earlier
terminated as provided in Section 6. The Initial Term shall automatically be
extended for successive one-year periods (each, an "Extension Term") unless
either party hereto gives written notice of non-extension to the other no later
than 180 days prior to the scheduled expiration of the Initial Term or the then
applicable Extension Term (the Initial Term and any Extension Term shall be
collectively referred to hereunder as the "Term").

          3. Position and Duties. The Executive shall serve as Senior Vice
President and Chief Financial Officer, reporting directly to the Company's
President and Chief Operating Officer, with such responsibilities, duties and
authority as are customary for such role. The Executive shall devote all
necessary business time and attention, and employ his reasonable best efforts,
toward the fulfillment and execution of all assigned duties, and the
satisfaction of defined annual and/or longer-term performance criteria.
Notwithstanding the foregoing, the Executive may manage his personal
investments, be involved in charitable and professional activities (including
serving on charitable and professional boards), and, with the consent of the
Board, serve on for profit boards of directors and advisory committees so long
as such service does not materially interfere with Executive's obligations
hereunder or violate Section 9 hereof.

          4. Place of Performance. In connection with his employment during the
Term, the Executive shall be based at the Company's offices in New York, New
York, except for necessary travel on the Company's business.

          5. Compensation and Related Matters

               (a) Annual Base Salary. Commencing September 1, 2005, the
     Executive shall receive a base salary at a rate of $500,000 per annum (the
     "Annual Base Salary"), paid in accordance with the Company's general
     payroll practices for executives, but no less frequently than monthly. No
     less frequently than annually during the Term, the Board and the Committee
     shall review the rate of Annual Base Salary payable to the Executive, and
     may, in their discretion, increase the rate of Annual Base Salary payable
     hereunder; provided, however, that any increased rate shall thereafter be
     the rate of "Annual Base Salary" hereunder.

               (b) Bonus. Except as otherwise provided for herein, with respect
     to each Contract Year on which the Executive is employed hereunder on the
     last day, the Executive shall be eligible to receive a bonus (the "Bonus"),
     as determined pursuant to the Coach, Inc. Performance-Based Annual
     Incentive Plan or another "qualified performance-based compensation" bonus
     plan that has been approved by the stockholders of the Company in
     accordance with the provisions for such approval under Code Section



                                       6


     162(m) and the regulations promulgated thereunder (collectively, the "Bonus
     Plan"), and on the basis of the Executive's or the Company's attainment of
     objective financial or other operating criteria established by the
     Committee in its sole discretion and in accordance with Code Section 162(m)
     and the regulations promulgated thereunder. With respect to each Contract
     Year (i) the Executive shall be eligible to receive a maximum Bonus (the
     "Maximum Bonus") in an amount equal to at least 75% of his Annual Base
     Salary and (ii) the Executive's target-level Bonus (the "Target Bonus")
     shall be equal to 75% of the amount of the Maximum Bonus. In addition, the
     Executive shall be eligible to participate in any other bonus plan or
     program that may be established by the Committee and that covers the
     Executive (even if such plan or program does not provide for qualified
     performance-based bonuses within the meaning of Code Section 162(m)).
     Notwithstanding anything to the contrary in the Bonus Plan, the parties
     acknowledge and agree that with respect to each Contract Year, the Company
     shall pay the Bonus to the Executive within the period required by Section
     409A such that it qualifies as a "short-term deferral" pursuant to Section
     1.409A-1(b)(4) of the Department of Treasury Regulations.

               (c) Stock Options

                    (i) During the Term, the Executive shall be eligible to be
          granted Options at such time(s) and in such amount(s) as may be
          determined by the Committee in its sole discretion; provided, that the
          Executive shall be granted such Options in accordance with the
          Company's customary past practice unless the Committee determines in
          its good faith discretion that the amount or timing of such Option
          grants shall be revised based upon the Executive's performance.

                    (ii) In addition to any Options granted in accordance with
          subsection (i), as of the Effective Date the Executive shall be
          granted a non-qualified stock option (the "Retention Options") to
          purchase 136,435 shares of Common Stock pursuant to either or both of
          the Stock Incentive Plans, which Retention Option shall be evidenced
          by one or more written Retention Stock Option Agreements to be entered
          into by and between the Company and Executive as of the date hereof,
          each in substantially the form attached hereto as Exhibit B. The
          Retention Options shall have an exercise price equal to the fair
          market value per share of Common Stock as of the Effective Date and
          shall have a term of 10 years. The Retention Options shall become
          exercisable in three cumulative installments as follows: (A) the first
          installment shall consist of 20% of the shares of Common Stock covered
          by the Retention Options and shall become vested and exercisable on
          June 30, 2008, (B) the second installment shall consist of 20% of the
          shares of Common Stock covered by the Retention Options and shall
          become vested and exercisable on June 30, 2009 and (C) the third
          installment shall consist of 60% of the shares of Common Stock covered
          by the Retention Options and shall become exercisable on June 30,
          2010; provided, that, except as otherwise provided in Section 7 or in
          the Retention Stock Option Agreement, no portion of the Retention
          Options not then exercisable shall become exercisable following the
          Executive's termination of employment for any reason. In the event of
          the Executive's termination of employment for any reason other



                                       7


          than for Cause, the Retention Options to the extent then exercisable
          shall remain exercisable until the earlier of (x) the date provided in
          the Retention Stock Option Agreement or (y) the tenth anniversary of
          the Effective Date. The Company and the Executive acknowledge and
          agree that the Retention Options shall not provide for the grant of
          any "Restoration Options" as defined in the Company's 2000 Stock
          Incentive Plan.

               (d) Restricted Stock Units

                    (i) During the Term, the Executive shall be eligible to be
          awarded Restricted Stock Units ("RSUs") and other equity compensation
          awards pursuant to the Stock Incentive Plans (or any other equity
          based compensation plan that may be adopted by the Company from time
          to time), at such time(s) and in such amount(s) as may be determined
          by the Committee in its sole discretion.

                    (ii) In addition to any RSUs awarded in accordance with
          subsection (i), as of the Effective Date the Executive shall be
          awarded 38,101 RSUs (the "Retention RSUs") pursuant to either or both
          of the Stock Incentive Plans, which Retention RSUs shall be evidenced
          by one or more written Retention RSU Agreements to be entered into by
          and between the Company and Executive as of the date hereof, each in
          substantially the form attached hereto as Exhibit C. The Retention
          RSUs shall become vested with respect to 20% of the Retention RSUs on
          each of June 30, 2008 and June 30, 2009 and with respect to 60% of the
          Retention RSUs on June 30, 2010; provided, that, except as otherwise
          provided in Section 7 or in the Retention RSU Agreement, no Retention
          RSUs not then vested shall become vested following the Executive's
          termination of employment.

               (e) Benefits. The Executive shall be entitled to receive such
     benefits and to participate in such employee group benefit plans, including
     life, health and disability insurance policies, as are generally provided
     by the Company to its senior executives in accordance with the plans,
     practices and programs of the Company.

               (f) Expenses. The Company shall reimburse the Executive for all
     reasonable and necessary expenses incurred by the Executive in connection
     with the performance of the Executive's duties as an employee of the
     Company. Such reimbursement is subject to the submission to the Company by
     the Executive of appropriate documentation and/or vouchers in accordance
     with the customary procedures of the Company for expense reimbursement, as
     such procedures may be revised by the Company from time to time.

               (g) Vacations. The Executive shall be entitled to paid vacation
     in accordance with the Company's vacation policy as in effect from time to
     time. However, in no event shall the Executive be entitled to less than
     four weeks vacation per Contract Year. The Executive shall also be entitled
     to paid holidays and personal days in accordance with the Company's
     practice with respect to same as in effect from time to



                                       8


     time (but in no event shall the Executive be entitled to fewer than two
     personal days per Contract Year).

               (h) Transportation Allowance. During the Term, the Company shall
     provide the Executive with a transportation allowance in accordance with
     the Company's applicable policies and procedures.

          6. Termination. The Executive's employment hereunder may be terminated
by the Company, on the one hand, or the Executive, on the other hand, as
applicable, without any breach of this Agreement only under the following
circumstances:

               (a) Terminations

                    (i) Death. The Executive's employment hereunder shall
          terminate upon his death.

                    (ii) Disability. In the event of the Executive's Disability,
          the Company may give the Executive written notice of its intention to
          terminate the Executive's employment. In such event, the Executive's
          employment with the Company shall terminate effective on the 14th day
          after delivery of such notice, provided that within the 14 days after
          such delivery, the Executive shall not have returned to full-time
          performance of his duties.

                    (iii) Cause. The Company may terminate the Executive's
          employment hereunder for Cause; provided, however, that,
          notwithstanding the foregoing, if (A) the Company terminates the
          Executive's employment for Cause pursuant to Section 1(e)(iii) and (B)
          the Executive (i) is not indicted for, or otherwise charged by any
          court or other governmental or regulatory authority with, any felony
          or any other crime involving fraud, embezzlement, material misconduct
          or misappropriation having a material adverse impact on the Company
          (which felony or other crime was the reason for such termination)
          within 18 months following the date of his termination of employment,
          or (ii) is not convicted of, does not plea no contest to, and does not
          receive unadjudicated probation for, any felony (or any other crime
          involving fraud, embezzlement, material misconduct or misappropriation
          having a material adverse impact on the Company) (which felony or
          other crime was the reason for such termination), then the Executive's
          termination of employment will be deemed to be without Cause and the
          Executive shall retroactively be eligible for severance payments to
          the extent provided by Section 7(b).

                    (iv) Good Reason. The Executive may terminate his employment
          for Good Reason.

                    (v) Without Cause. The Company may terminate the Executive's
          employment hereunder without Cause. A notice by the Company of
          non-extension of the Term shall be treated as a termination without
          Cause as of the last day of the Term.



                                       9


                    (vi) Resignation without Good Reason. The Executive may
          resign his employment without Good Reason upon 180 days written notice
          to the Company.

               (b) Notice of Termination. Any termination of the Executive's
     employment by the Company or by the Executive under this Section 6 (other
     than termination pursuant to paragraph (a)(i)) shall be communicated by a
     written notice to the other party hereto indicating the specific
     termination provision in this Agreement relied upon, setting forth in
     reasonable detail any facts and circumstances claimed to provide a basis
     for termination of the Executive's employment under the provision so
     indicated, and specifying a Date of Termination which, except in the case
     of termination for Cause or Disability, shall be at least thirty days (or
     such longer period provided by Section 6(a)(vi)) following the date of such
     notice (a "Notice of Termination"); provided, the Company may pay out such
     notice period instead of employing the Executive.

          7. Severance Payments and Benefits

               (a) Termination for any Reason. In the event the Executive's
     employment with the Company is terminated for any reason, the Company shall
     pay the Executive (or his beneficiary in the event of his death) any unpaid
     Annual Base Salary that has accrued as of the Date of Termination, any
     unreimbursed expenses due to the Executive and an amount for any accrued
     but unused vacation days within 60 days following the Date of Termination,
     or such earlier time as may be required by applicable law. Any earned but
     unpaid Bonus for any fiscal year of the Company completed prior to the date
     of such termination shall be paid within 60 days following the date such
     Bonus is determined pursuant to the Bonus Plan or such earlier time as may
     be required to comply with Section 409A and thereby avoid the application
     of penalty taxes under such section. The Executive shall also be entitled
     to accrued, vested benefits under the Company's benefit plans and programs
     as provided therein. The Executive shall be entitled to the cash severance
     payments described below only as set forth herein and the provisions of
     this Section 7 shall supersede in their entirety any severance payment
     provisions in any severance plan, policy, program or arrangement maintained
     by the Company.

               (b) Terminations without Cause or for Good Reason. Except as
     otherwise provided by Section 7(c) with respect to certain terminations of
     employment in connection with a Change in Control, if the Executive's
     employment shall terminate without Cause (pursuant to Section 6(a)(v)), or
     for Good Reason (pursuant to Section 6(a)(iv)), the Company shall (subject
     to the Executive's entering into a Separation and Release Agreement with
     the Company in substantially the form attached hereto as Exhibit D (the
     "Release")):

                    (i) Pay to the Executive an amount (the "Severance Amount")
          equal to the sum of his then current (A) Annual Base Salary and (B)
          Target Bonus for the year of termination; one half of which amount
          shall be paid in a cash lump-sum on the six month anniversary of the
          Date of Termination, with the other one-half of the Severance Amount
          payable to the Executive in accordance with the Company's customary
          payroll practices in equal monthly installments during



                                       10


          the period beginning on the six-month anniversary of the Date of
          Termination and ending on the 12-month anniversary thereof; and
          provided, further, that no amount shall be payable pursuant to this
          Section 7(b)(i) on or following the date the Executive first (i)
          violates any of the covenants set forth in Section 9(a) or 9(b), or
          (ii) materially violates any of the covenants set forth in Section
          9(c), 9(e) or 9(f);

                    (ii) Continue to provide the Executive with all health and
          welfare benefits and perquisites which he was participating in or
          receiving as of the Date of Termination until the earlier of (A) the
          first anniversary of the Date of Termination or (B) the date the
          Executive first (i) violates any of the covenants set forth in Section
          9(a) or 9(b), or (ii) materially violates any of the covenants set
          forth in Section 9(c), 9(e) or 9(f). If such benefits cannot be
          provided under the Company's programs, such benefits and perquisites
          will be provided on an individual basis to the Executive such that his
          after-tax costs will be no greater than the costs for such benefits
          and perquisites under the Company's programs. Notwithstanding the
          foregoing, the parties acknowledge and agree that no payment or
          benefit shall be made pursuant to this Section 7(b)(ii) to the extent
          that such payment or benefit would, pursuant to Section
          1.409A-1(b)(9)(iv) of the Department of Treasury Regulations,
          constitute a deferral of compensation subject to Section 409A (and to
          the extent permissible any such payment or benefit shall be modified
          to comply with Section 1.409A-1(b)(9)(iv) of the Department of
          Treasury Regulations); ==

                    (iii) Notwithstanding any provision to the contrary in any
          Option or RSU agreement, cause all (A) Retention RSUs and Retention
          Options not vested or exercisable as of the Date of Termination to
          remain or become vested and remain exercisable in accordance with the
          terms and conditions of the applicable Retention Option or Retention
          RSU agreement and (B) Options and RSUs (other than the Retention
          Options and the Retention RSUs) then held by the Executive to continue
          to become vested and exercisable in accordance with their terms as if
          the Executive had remained employed by the Company until the first
          anniversary of the Date of Termination (and all Options and RSUs
          (other than the Retention Options and the Retention RSUs) that do not
          become vested and exercisable on or prior to the first anniversary of
          the Date of Termination shall thereupon be forfeited). Notwithstanding
          the foregoing, the parties acknowledge and agree that no payment or
          benefit shall be made pursuant to this Section 7(b)(iii) to the extent
          that such payment or benefit would, pursuant to Section
          1.409A-1(b)(5)(v) of the Department of Treasury Regulations,
          constitute a modification, extension or renewal of a stock right
          subject to Section 409A (and to the extent permissible any such
          payment or benefit shall be modified to comply with Section
          1.409A-1(b)(5)(v) of the Department of Treasury Regulations); =

                    (iv) Pay to the Executive a Pro-Rata Bonus, as defined in
          Section 7(d), when bonuses are paid for the year of termination based
          on actual results and the relative portion of the fiscal year during
          which the Executive was employed.



                                       11


               (c) Certain Terminations in connection with a Change in Control.
     If the Executive's employment shall terminate without Cause (pursuant to
     Section 6(a)(v)) or for Good Reason (pursuant to Section 6(a)(iv)) within
     six months prior to a Change in Control or during the 12 month period
     immediately following such Change in Control, the Company shall (subject to
     the receipt of the Release):

                    (i) Pay to the Executive an amount equal to the Severance
          Amount; one half of which amount shall be paid in a cash lump-sum on
          the six month anniversary of the Date of Termination, with the other
          one-half of the Severance Amount payable to the Executive in
          accordance with the Company's customary payroll practices in equal
          monthly installments during the period beginning on the six-month
          anniversary of the Date of Termination and ending on the 12-month
          anniversary thereof; and provided, further, that no amount shall be
          payable pursuant to this Section 7(b)(i) on or following the date the
          Executive first (i) violates any of the covenants set forth in Section
          9(a) or 9(b), or (ii) materially violates any of the covenants set
          forth in Section 9(c), 9(e) or 9(f);

                    (ii) Continue to provide the Executive with all health and
          welfare benefits and perquisites which he was participating in or
          receiving as of the Date of Termination until the earlier of (A) the
          first anniversary of the Date of Termination or (B) the date the
          Executive first (i) violates any of the covenants set forth in Section
          9(a) or 9(b), or (ii) materially violates any of the covenants set
          forth in Section 9(c), 9(e) or 9(f). If such benefits cannot be
          provided under the Company's programs, such benefits and perquisites
          will be provided on an individual basis to the Executive such that his
          after-tax costs will be no greater than the costs for such benefits
          and perquisites under the Company's programs. Notwithstanding the
          foregoing, the parties acknowledge and agree that no payment or
          benefit shall be made pursuant to this Section 7(c)(ii) to the extent
          that such payment or benefit would, pursuant to Section
          1.409A-1(b)(9)(iv) of the Department of Treasury Regulations,
          constitute a deferral of compensation subject to Section 409A (and to
          the extent permissible any such payment or benefit shall be modified
          to comply with Section 1.409A-1(b)(9)(iv) of the Department of
          Treasury Regulations);

                    (iii) Notwithstanding any provision to the contrary in any
          Option or RSU agreement, cause all Options (including without
          limitation the Retention Options), RSUs (including without limitation
          the Retention RSUs) and other equity based compensation awards then
          held by the Executive to become fully vested and exercisable with
          respect to all shares subject thereto effective immediately prior to
          the Date of Termination and all Options shall remain exercisable for
          the remainder of the 10 year term. Notwithstanding the foregoing, the
          parties acknowledge and agree that no payment or benefit shall be made
          pursuant to this Section 7(c)(iii) to the extent that such payment or
          benefit would, pursuant to Section 1.409A-1(b)(5)(v) of the Department
          of Treasury Regulations, constitute a modification, extension or
          renewal of a stock right subject to Section 409A (and to the extent
          permissible any such payment or benefit shall be


                                       12


          modified to comply with Section 1.409A-1(b)(5)(v) of the Department of
          Treasury Regulations); and

                    (iv) Pay to the Executive a Pro-Rata Bonus, as defined in
          Section 7(d), within 10 days following the date of such termination.

               (d) Termination by Reason of Disability or Death. If the
     Executive's employment shall terminate by reason of his Disability
     (pursuant to Section 6(a)(ii)) or death (pursuant to Section 6(a)(i)), then
     (i) the Company shall pay to the Executive (or Executive's estate) a
     pro-rated amount of the Executive's Target Bonus for the Contract Year in
     which the Date of Termination occurs (the "Pro-Rata Bonus"); (ii) all
     Retention Options and Retention RSUs not vested or exercisable as of the
     Date of Termination shall thereupon be forfeited; provided, that in the
     alternative the Committee may, in its sole discretion, cause all or any
     portion of any Retention Options or Retention RSUs then held by the
     Executive to become vested and exercisable effective as of the Date of
     Termination; and (iii) all Options and RSUs (other than Retention Options
     and the Retention RSUs) then held by the Executive shall be or become
     vested and shall remain exercisable in accordance with the terms of the
     applicable Option or RSU agreement.

               (e) Termination for Cause or without Good Reason. If the
     Executive's employment shall terminate by reason of his voluntary
     resignation without Good Reason (pursuant to Section 6(a)(vi)) or by the
     Company for Cause (pursuant to Section 6(a)(iii)), then (i) notwithstanding
     any provision to the contrary in any Option or RSU agreement, all Retention
     RSUs and Retention Options not vested or exercisable as of the Date of
     Termination shall thereupon be forfeited and (ii) all Options and RSUs
     (other than the Retention Options and the Retention RSUs) or other equity
     based compensation awards not vested or exercisable as of the Date of
     Termination shall thereupon be forfeited and, except as set forth in
     Section 7(a), the Company shall have no further obligations to the
     Executive.

               (f) Survival. The expiration or termination of the Term shall not
     impair the rights or obligations of any party hereto which shall have
     accrued hereunder prior to or in connection with such expiration or
     termination.

               (g) No Mitigation. The Executive shall have no obligation to
     mitigate any payments due hereunder. Any amounts earned by the Executive
     from other employment shall not offset amounts due hereunder, except as
     provided in this Section 7.

          8. Parachute Payments.

               (a) If it is determined by a nationally recognized United States
     public accounting firm selected by the Company and approved in writing by
     the Executive (which approval shall not be unreasonably withheld) (the
     "Auditors") that any payment or benefit made or provided to the Executive
     in connection with this Agreement or otherwise (including without
     limitation any Option or RSU vesting) (collectively, a "Payment"), would be
     subject to the excise tax imposed by Section 4999 of the Code (the
     "Parachute Tax"), then the Company shall pay to the Executive, prior to the
     time the



                                       13


     Parachute Tax is payable with respect to such Payment, an additional
     payment (a "Gross-Up Payment") in an amount such that, after payment by the
     Executive of all taxes (including any Parachute Tax) imposed upon the
     Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment
     equal to the Parachute Tax imposed upon the Payment. The amount of any
     Gross-Up Payment shall be determined by the Auditors, subject to
     adjustment, as necessary, as a result of any Internal Revenue Service
     position. For purposes of making the calculations required by this
     Agreement, the Auditors may make reasonable assumptions and approximations
     concerning applicable taxes and may rely on reasonable, good faith
     interpretations concerning the application of Sections 280G and 4999 of the
     Code, provided that the Auditors' determinations must be made with
     substantial authority (within the meaning of Section 6662 of the Code).

               (b) The federal tax returns filed by the Executive (and any
     filing made by a consolidated tax group which includes the Company) shall
     be prepared and filed on a basis consistent with the determination of the
     Auditors with respect to the Parachute Tax payable by the Executive. The
     Executive shall make proper payment of the amount of any Parachute Tax, and
     at the request of the Company, provide to the Company true and correct
     copies (with any amendments) of his federal income tax return as filed with
     the Internal Revenue Service, and such other documents reasonably requested
     by the Company, evidencing such payment. If, after the Company's payment to
     the Executive of the Gross-Up Payment, the Auditors determine in good faith
     that the amount of the Gross-Up Payment should be reduced or increased, or
     such determination is made by the Internal Revenue Service, then within ten
     business days of such determination, the Executive shall pay to the Company
     the amount of any such reduction, or the Company shall pay to the Executive
     the amount of any such increase; provided, however, that in no event shall
     the Executive have any such refund obligation if it is determined by the
     Company that to do so would be a violation of the Sarbanes-Oxley Act of
     2002, as it may be amended from time to time; and provided, further, that
     if the Executive has prior thereto paid such amounts to the Internal
     Revenue Service, such refund shall be due only to the extent that a refund
     of such amount is received by the Executive; and provided, further, that
     (i) the fees and expenses of the Auditors (and any other legal and
     accounting fees) incurred for services rendered in connection with the
     Auditor's determination of the Parachute Tax or any challenge by the
     Internal Revenue Service or other taxing authority relating to such
     determination shall be paid by the Company and (ii) the Company shall
     indemnify and hold the Executive harmless on an after-tax basis for any
     interest and penalties imposed upon the Executive to the extent that such
     interest and penalties are related to the Auditor's determination of the
     Parachute Tax or the Gross-Up Payment. Notwithstanding anything to the
     contrary herein, the Executive's rights under this Section 8 shall survive
     the termination of his employment for any reason and the termination or
     expiration of this Agreement for any reason.

          9. Certain Restrictive Covenants

               (a) The Executive shall not, at any time during the Term or
     during the 12-month period following the Date of Termination (the
     "Restricted Period") directly or indirectly engage in, have any equity
     interest in, or manage or operate any (i) Competitive Business, or (ii) new
     luxury accessories business that competes directly with



                                       14


     the existing or planned product lines of the Company; provided, however,
     that the Executive shall be permitted to acquire a passive stock or equity
     interest in such a business provided the stock or other equity interest
     acquired is not more than five percent (5%) of the outstanding interest in
     such business; and, provided, further, that this Section 9(a) shall not
     apply in the event that, prior to June 30, 2008 (A) the Executive's
     employment is terminated by reason of his voluntary resignation without
     Good Reason (pursuant to Section 6(a)(vi)), (B) the Executive's employment
     is terminated by the Company without Cause (pursuant to Section 6(a)(v)) or
     (C) the Executive's employment is terminated by the Executive for Good
     Reason (pursuant to Section 6(a)(iv)) and, in connection with such
     termination, the Executive agrees in writing to waive his right to receive
     all payments and benefits that he would otherwise be entitled to receive
     pursuant to Section 7(b) or 7(c), as applicable.

               (b) During the Restricted Period, the Executive will not,
     directly or indirectly recruit or otherwise solicit or induce any employee,
     director, consultant, wholesale customer, vendor, supplier, lessor or
     lessee of the Company to terminate its employment or arrangement with the
     Company, otherwise change its relationship with the Company, or establish
     any relationship with the Executive or any of his Affiliates for any
     business purpose.

               (c) Except as required in the good faith opinion of the Executive
     in connection with the performance of the Executive's duties hereunder or
     as specifically set forth in this Section 9(c), the Executive shall, in
     perpetuity, maintain in confidence and shall not directly, indirectly or
     otherwise, use, disseminate, disclose or publish, or use for his benefit or
     the benefit of any person, firm, corporation or other entity any
     confidential or proprietary information or trade secrets of or relating to
     the Company, including, without limitation, information with respect to the
     Company's operations, processes, products, inventions, business practices,
     finances, principals, vendors, suppliers, customers, potential customers,
     marketing methods, costs, prices, contractual relationships, regulatory
     status, business plans, designs, marketing or other business strategies,
     compensation paid to employees or other terms of employment, or deliver to
     any person, firm, corporation or other entity any document, record,
     notebook, computer program or similar repository of or containing any such
     confidential or proprietary information or trade secrets. The parties
     hereby stipulate and agree that as between them the foregoing matters are
     important, material and confidential proprietary information and trade
     secrets and affect the successful conduct of the businesses of the Company
     (and any successor or assignee of the Company). Upon termination of the
     Executive's employment with the Company for any reason, the Executive will
     promptly deliver to the Company all correspondence, drawings, manuals,
     letters, notes, notebooks, reports, programs, plans, proposals, financial
     documents, or any other documents concerning the Company's customers,
     business plans, designs, marketing or other business strategies, products
     or processes, provided that the Executive may retain his rolodex, address
     book and similar information.

               (d) Notwithstanding Section 9(c), the Executive may respond to a
     lawful and valid subpoena or other legal process or other government or
     regulatory inquiry but shall give the Company prompt notice thereof (except
     to the extent legally



                                       15


     prohibited), and shall, as much in advance of the return date as is
     reasonably practicable, make available to the Company and its counsel
     copies of any documents sought which are in the Executive's possession or
     to which the Executive otherwise has reasonable access. In addition, the
     Executive shall reasonably cooperate with and assist the Company and its
     counsel at any time and in any manner reasonably requested by the Company
     or its counsel (with due regard for the Executive's other commitments if he
     is not employed by the Company) in connection with any litigation or other
     legal process affecting the Company of which the Executive has knowledge as
     a result of his employment with the Company (other than any litigation with
     respect to this Agreement). In the event of such requested cooperation, the
     Company shall reimburse the Executive's reasonable out of pocket expenses.

               (e) The Executive shall not disparage the Company, any of its
     products or practices, or any of its directors, officers, agents,
     representatives, or employees, stockholders or Affiliates, either orally or
     in writing, at any time. The Company (including without limitation its
     directors) shall not disparage the Executive, either orally or in writing,
     at any time. Notwithstanding the foregoing, nothing in this Section 9(e)
     shall limit the ability of the Company or the Executive, as applicable, to
     provide truthful testimony as required by law or any judicial or
     administrative process.

               (f) The Executive agrees that all strategies, methods, processes,
     techniques, marketing plans, merchandising schemes, themes, layouts,
     mechanicals, trade secrets, copyrights, trademarks, patents, ideas,
     specifications and other material or work product ("Intellectual Property")
     that the Executive creates, develops or assembles in connection with his
     employment hereunder shall become the permanent and exclusive property of
     the Company to be used in any manner it sees fit, in its sole discretion.
     The Executive shall not communicate to the Company any ideas, concepts, or
     other intellectual property of any kind (other than in his capacity as an
     officer of the Company) which (i) were earlier communicated to the
     Executive in confidence by any third party as proprietary information, or
     (ii) the Executive knows or has reason to know is the proprietary
     information of any third party. Further, the Executive shall adhere to and
     comply with the Company's Global Business Integrity Program Guide. All
     Intellectual Property created or assembled in connection with the
     Executive's employment hereunder shall be the permanent and exclusive
     property of the Company. The Company and the Executive mutually agree that
     all Intellectual Property and work product created in connection with this
     agreement, which is subject to copyright, shall be deemed to be "work made
     for hire," and that all rights to copyrights shall be vested in the
     Company. If for any reason the Company cannot be deemed to have
     commissioned "work made for hire," and its rights to copyright are thereby
     in doubt, then the Executive agrees not to claim to be the proprietor of
     the work prepared for the Company, and to irrevocably assign to the
     Company, at the Company's expense, all rights in the copyright of the work
     prepared for the Company.

               (g) As used in this Section 9, the term "Company" shall include
     the Company and any of its Affiliates or direct or indirect subsidiaries.



                                       16


               (h) The Company and the Executive expressly acknowledge and agree
     that the agreements and covenants contained in this Section 9 are
     reasonable. In the event, however, that any agreement or covenant contained
     in this Section 9 shall be determined by any court of competent
     jurisdiction to be unenforceable by reason of its extending for too great a
     period of time or over too great a geographical area or by reason of its
     being too extensive in any other respect, it will be interpreted to extend
     only over the maximum period of time for which it may be enforceable,
     and/or over the maximum geographical area as to which it may be enforceable
     and/or to the maximum extent in all other respects as to which it may be
     enforceable, all as determined by such court in such action.

          10. Specific Performance. It is recognized and acknowledged by the
Executive that a breach of the covenants contained in Section 9 will cause
irreparable damage to the Company and its goodwill (or to the Executive, as the
case may be), the exact amount of which will be difficult or impossible to
ascertain, and that the remedies at law for any such breach will be inadequate.
Accordingly, the parties agree that in the event a party breaches any covenant
contained in Section 9, in addition to any other remedy which may be available
at law or in equity (or pursuant to Section 11 of this Agreement or under any
other agreement between the Company and the Executive), the other party will be
entitled to specific performance and injunctive relief.

          11. Claw-Backs

               (a) In the event that the Executive violates any of the covenants
     set forth in Section 9(a) or 9(b) or materially violates any of the
     covenants set forth in Section 9(c), 9(e) or 9(f), the Executive shall, in
     addition to any other remedy which may be available (i) at law or in
     equity, (ii) pursuant to Section 10 or (iii) pursuant to any applicable
     Option or RSU agreement, be required to pay to the Company an amount equal
     to all Financial Gain that the Executive has received during the 12-month
     period immediately preceding (or at any time after) the date that the
     Executive first breaches such covenant. In addition, all Retention Options
     that have not been exercised prior to the date that the Executive violates
     any of the covenants set forth in Section 9(a) or 9(b), or materially
     violates any of the covenants set forth in Section 9(c), 9(e), or 9(f) and
     all Retention RSUs that have not become vested prior to the date of such
     breach shall thereupon be forfeited.

               (b) If at any time during the Term the Executive willfully
     commits any act of fraud, embezzlement, misappropriation, material
     misconduct, or breach of fiduciary duty against the Company (or any
     predecessor thereto or successor thereof) having a material adverse impact
     on the Company, then (in addition to any remedy which may be available
     under any applicable Option or RSU agreement) the Executive shall be
     required to pay to the Company an amount equal to all Financial Gain that
     the Executive has received at any time following the date of such act. The
     Executive shall not be required to make any payments of Financial Gain
     pursuant to this Section 11(b) to the extent the Executive makes payments
     of such Financial Gain in connection with the same act pursuant to Section
     11(a).



                                       17


          12. Purchases and Sales of the Company's Securities. The Executive
agrees to use his reasonable best efforts to comply in all respects with the
Company's applicable written policies regarding the purchase and sale of the
Company's securities by employees, as such written policies may be amended from
time to time and disclosed to the Executive. In particular, and without
limitation, the Executive agrees that he shall not purchase or sell Company
securities (a) at any time that he possesses material non-public information
about the Company or any of its businesses; and (b) while an employee during any
"trading blackout period" as may be determined by the Company and set forth in
the Company's applicable written policies from time to time.

          13. Indemnification. The Executive shall be entitled to
indemnification set forth in the Company's Charter to the maximum extent allowed
under the laws of the State of Maryland, and he shall be entitled to the
protection of any insurance policies the Company may elect to maintain generally
for the benefit of its directors and officers against all costs, charges and
expenses incurred or sustained by him in connection with any action, suit or
proceeding to which he may be made a party by reason of his being or having been
a director, officer or employee of the Company or any of its subsidiaries or his
serving or having served any other enterprise or benefit plan as a director,
officer, employee or fiduciary at the request of the Company (other than any
dispute, claim or controversy arising under or relating to this Agreement).
Notwithstanding anything to the contrary herein, the Executive's rights under
this Section 13 shall survive the termination of his employment for any reason
and the expiration of this Agreement for any reason.

          14. Delegation and Assignment. The Executive shall not delegate his
employment obligations under this Agreement to any other person. The Company may
not assign any of its obligations hereunder other than to any entity that
acquires (by purchase, merger or otherwise) all or substantially all of the
Voting Stock or assets of the Company. In the event of the Executive's death
while he is receiving severance hereunder the remainder shall be paid to his
estate.

          15. Notices. Any written notice required by this Agreement will be
deemed provided and delivered to the intended recipient when (a) delivered in
person by hand; or (b) three days after being sent via U.S. certified mail,
return receipt requested; or (c) the day after being sent via by overnight
courier, in each case when such notice is properly addressed to the following
address and with all postage and similar fees having been paid in advance:

          If to the Company:    Coach, Inc.
                                516 West 34th Street
                                New York, New York 10001
                                Attn: General Counsel

          with a copy to:       Latham & Watkins LLP
                                885 Third Avenue, Suite 1000
                                New York, NY 10022
                                Attn: Bradd L. Williamson

          If to the Executive:  to him at the most recent address in the
                                Company's records.



                                       18


Either party may change the address to which notices, requests, demands and
other communications to such party shall be delivered personally or mailed by
giving written notice to the other party in the manner described above.

          16. Legal Fees. The Company shall pay the Executive's reasonable
attorneys' fees and disbursements incurred by him in connection with the
negotiation of this Agreement.

          17. Binding Effect. This Agreement shall be for the benefit of and
binding upon the parties hereto and their respective heirs, personal
representatives, legal representatives, successors and, where applicable,
assigns.

          18. Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter described in this
Agreement and supersedes all prior agreements, understandings and arrangements,
both oral and written, between the parties with respect to such subject matter;
provided, however, that any written agreements between the Executive and the
Company concerning Options, RSUs or any other equity compensation awards shall
remain in full force and effect in accordance with their terms. Subject to
Section 27, this Agreement may not be modified, amended, altered or rescinded in
any manner, except by written instrument signed by both of the parties hereto;
provided, however, that the waiver by either party of a breach or compliance
with any provision of this Agreement shall not operate nor be construed as a
waiver of any subsequent breach or compliance.

          19. Severability. In case any one or more of the provisions of this
Agreement shall be held by any court of competent jurisdiction or any arbitrator
selected in accordance with the terms hereof to be illegal, invalid or
unenforceable in any respect, such provision shall have no force and effect, but
such holding shall not affect the legality, validity or enforceability of any
other provision of this Agreement.

          20. Dispute Resolution and Arbitration. In the event that any dispute
arises between the Company and the Executive regarding or relating to this
Agreement and/or any aspect of the Executive's employment relationship with the
Company, AND IN LIEU OF LITIGATION AND A TRIAL BY JURY, the parties consent to
resolve such dispute through mandatory arbitration under the Commercial Rules of
the American Arbitration Association ("AAA"), before a single arbitrator in New
York, New York. The parties hereby consent to the entry of judgment upon award
rendered by the arbitrator in any court of competent jurisdiction.
Notwithstanding the foregoing, however, should adequate grounds exist for
seeking immediate injunctive or immediate equitable relief, any party may seek
and obtain such relief. The parties hereby consent to the exclusive jurisdiction
in the state and Federal courts of or in the State of New York for purposes of
seeking such injunctive or equitable relief as set forth above. Any and all
out-of-pocket costs and expenses incurred by the parties in connection with such
arbitration (including attorneys' fees) shall be allocated by the arbitrator in
substantial conformance with his or her decision on the merits of the
arbitration.

          21. Choice of Law. The Executive and the Company intend and hereby
acknowledge that jurisdiction over disputes with regard to this Agreement, and
over all aspects of the relationship between the parties hereto, shall be
governed by the laws of the State of New York without giving effect to its rules
governing conflicts of laws.



                                       19


          22. Section Headings. The section headings contained in this Agreement
are for reference purposes only and shall not affect in any manner the meaning
or interpretation of this Agreement.

          23. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument.

          24. Force Majeure. Neither Company nor the Executive shall be liable
for any delay or failure in performance of any part of this Agreement to the
extent that such delay or failure is caused by an event beyond its reasonable
control including, but not be limited to, fire, flood, explosion, war, strike,
embargo, government requirement, acts of civil or military authority, and acts
of God not resulting from the negligence of the claiming party.

          25. Right of Offset. The Company may offset any payment to be made to
the Executive pursuant to this Agreement by any amount that the Executive owes
to the Company (including without limitation any amount that the Executive may
be required to pay to the Company pursuant to Section 11) as of the time such
payment would otherwise be made. This right of offset shall be cumulative (but
not duplicative) with any similar obligation with respect to which the Executive
may be subject under any other agreement with the Company. Notwithstanding the
foregoing, no amount of (a) Annual Base Salary or Bonus deferred by the
Executive on or following the Effective Date pursuant to any deferred
compensation plan or arrangement maintained by the Company, or (b) compensation
deferred by the Executive prior to the Effective Date pursuant to any deferred
compensation plan or arrangement maintained by the Company shall be subject to
the Company's right of offset described in this Section 25.

          26. Withholding. The Company shall be entitled to withhold from any
amounts payable under this Agreement any federal, state, local or foreign
withholding or other taxes or charges which the Company is required to withhold.
The Company shall be entitled to rely on an opinion of counsel if any questions
as to the amount or requirement of withholding shall arise.

          27. Section 409A. The parties acknowledge and agree that, to the
extent applicable, this Agreement shall be interpreted in accordance with, and
the parties agree to use their best efforts to achieve timely compliance with,
Section 409A. Notwithstanding any provision of this Agreement to the contrary,
in the event that the Company determines that any amounts payable hereunder
would otherwise be taxable to the Executive under Section 409A, the Company may
(a), provided it reasonably determines that any such amendments are likely to be
effective, adopt such limited amendments to this Agreement and appropriate
policies and procedures, including amendments and policies with retroactive
effect, that the Company reasonably determines are necessary or appropriate to
comply with the requirements of Section 409A and thereby avoid the application
of penalty taxes under such Section.



                                       20




          IN WITNESS WHEREOF, the parties have executed this Agreement on the
date and year first above written.

                                     COMPANY



                                     By:
                                        ----------------------------------------

                                     Its:
                                         ---------------------------------------



                                     EXECUTIVE




                                     -------------------------------------------
                                     Michael F. Devine III





                                       21





                                    EXHIBIT A

Competitive Businesses

          The following entities, together with their respective subsidiaries,
parent entities and other affiliates, have been designated by the Committee as
Competitive Businesses as of the Effective Date: Burberry Limited; Cole Hahn;
Dooney and Bourke; Ferragamo; GAP, Inc.; Gucci Group; Hermes International; J.
Crew; Jones Apparel Group; Kate Spade; Kenneth Cole Productions; Limited Brands,
Inc.; Liz Claiborne; LVMH; Prada; Polo Ralph Lauren; Timberland; Tod's S.p.A.;
Tommy Hilfiger; Tumi.

                                                                       EXHIBIT B

                                      COACH
                            2000 STOCK INCENTIVE PLAN
                   RETENTION OPTION GRANT NOTICE AND AGREEMENT


Michael F. Devine, III

     Coach, Inc. (the "COMPANY") is pleased to confirm that you have been
granted a stock option (the "Option"), effective as of NOVEMBER 8, 2005 (the
"GRANT DATE"), as provided in this agreement (the "AGREEMENT"). The Option
evidenced by this Agreement is the "RETENTION OPTION" as defined in that certain
Employment Agreement entered into by and between you and the Company effective
as of NOVEMBER 8, 2005 (the "EMPLOYMENT AGREEMENT").

     1. OPTION RIGHT. Your Option is to purchase, on the terms and conditions
set forth below, the following number of shares (the "OPTION SHARES") of the
Company's Common Stock, par value $.01 per share (the "COMMON Stock"), at the
exercise price specified below (the "EXERCISE PRICE").

                    Number of Option Shares      Exercise Price Per Option Share
     Shares Granted -----------------------      -------------------------------
                           136,435                          $34.12

     2. OPTION. This Option is a non-qualified stock option that is intended to
conform in all respects with the Company's 2000 Stock Incentive Plan (the
"PLAN"), a copy of which will be supplied to you upon your request, and the
provisions of which are incorporated herein by reference. This Option is not
intended to qualify as an incentive stock option within the meaning of Section
422 of the Internal Revenue Code of 1986, as amended.

     3. EXPIRATION DATE. This Option expires on the tenth (10th) anniversary of
the Grant Date (the "EXPIRATION DATE"), subject to earlier expiration upon your
death, disability or other termination of employment, as provided in Section 5
below.

     4. VESTING. This Option may be exercised only to the extent it has vested.
Subject to Section 5 below, if you are continuously employed by the Company or
any of its affiliates (collectively, the "COACH COMPANIES") from the Grant Date
until (a) JUNE 30, 2008, this Option will vest with respect to 20% of the Option
Shares as of such date, (b) JUNE 30, 2009, this Option will vest with respect to
20% of the Option Shares as of such date, and (c) JUNE 30, 2010, this Option
will vest with respect to the remaining 60% of the Option Shares as of such
date.




     5. TERMINATION OF EMPLOYMENT.

         (A) DEATH OR DISABILITY. If you cease active employment with the
     Company because of your death or "DISABILITY" (as defined in the Employment
     Agreement), any portion of this Option that is not vested and exercisable
     as of the date of such termination shall thereupon be forfeited; provided,
     that in the alternative the Human Resources and Corporate Governance
     Committee (the "COMMITTEE") of the Company's Board of Directors may, in its
     sole discretion, cause all or any portion of this Option then held by you
     to become vested and exercisable effective as of the date of such
     termination. In the event that your employment terminates due to your death
     or Disability, the last day on which any vested Options may be exercised
     shall be the earlier of (i) the Expiration Date, or (ii) the fifth
     anniversary of your death or Disability.

         (B) TERMINATION WITHOUT CAUSE OR FOR GOOD REASON. Except as otherwise
     provided in Section 5(d) with respect to certain terminations of employment
     in connection with a Change in Control, if your employment is terminated by
     the Company without "CAUSE" (as defined in the Employment Agreement) or by
     you for "GOOD REASON" (as defined in the Employment Agreement), then (i)
     any portion of this Option that is not vested and exercisable as of the
     date of such termination shall continue to become exercisable as of the
     dates set forth in Section 4 and (ii) the last day on which this Option may
     be exercised shall be the Expiration Date.

         (C) TERMINATION FOR CAUSE OR WITHOUT GOOD REASON. If your employment
     is terminated by the Company for Cause or by you without Good Reason
     (including without limitation by reason of your retirement), then (i) any
     portion of this Option that is not vested and exercisable as of the date of
     such termination shall thereupon be forfeited and (ii) the vested portion
     of this Option shall terminate (A) if your employment is terminated by the
     Company for Cause, then this Option shall terminate on the date your
     employment terminates, (B) if your employment is terminated by you without
     Good Reason (including without limitation by reason of your retirement)
     prior to June 30, 2010, then this Option shall terminate on the earlier of
     (x) the Expiration Date, or (y) the 90th day following the date of your
     termination of employment, or (C) if your employment is terminated by you
     without Good Reason (including without limitation by reason of your
     retirement) on or following June 30, 2010, then this Option shall terminate
     on the Expiration Date.

         (D) CERTAIN TERMINATIONS OF EMPLOYMENT IN CONNECTION WITH A CHANGE IN
     CONTROL. Notwithstanding Section 5(b), if your employment is terminated by
     the Company without Cause or by you for Good Reason within six months prior
     to a "CHANGE IN CONTROL" (as defined in the Employment Agreement) or during
     the 12 month period immediately following such Change in Control, then (i)
     this Option shall become fully vested and exercisable with respect to all
     shares subject thereto effective immediately prior to the date of such

                                       2




     termination, and (ii) the last day on which this Option may be exercised
     shall be the Expiration Date.

     6. EXERCISE. This Option may be exercised (subject to the restrictions
contained in this Agreement) in whole or in part for the number of shares
specified (which in all cases must be at least the lesser of two-hundred and
fifty (250) or the total number of shares outstanding under this Option) in a
verbal or written notice that is delivered to the Company or its designated
agent and is accompanied by full payment of the Exercise Price for such number
of Option Shares in cash, or by surrendering or attesting to the ownership of
shares of Common Stock, or a combination of cash and shares of Common Stock, in
an amount or having a combined value equal to the aggregate Exercise Price for
such Option Shares. In connection with any payment of the Exercise Price by
surrender or attesting to the ownership of shares of Common Stock, proof
acceptable to the Company shall be submitted upon request that such previously
acquired shares have been owned by you for at least six (6) months prior to the
date of exercise. Notwithstanding anything contained in this Agreement to the
contrary, this Option shall not provide for the grant of any "RESTORATION
OPTIONS" as defined in the Plan.

     7. FORFEITURE. Notwithstanding anything contained in this Agreement to the
contrary, this Option shall be subject to Section 11 of the Employment
Agreement. Accordingly, if you (a) violate any of the covenants set forth in
Section 9(a) or 9(b) of the Employment Agreement, or (b) materially violate any
of the covenants set forth in Section 9(c), 9(e) or 9(f) of the Employment
Agreement, then pursuant to Section 11 of the Employment Agreement, then (i) any
portion of this Option that has not been exercised prior to the date of such
breach shall thereupon be forfeited and (ii) you shall be required to pay to the
Company the amount of all Retention Option Gain (as defined in the Employment
Agreement). You shall also be required to pay to the Company the amount of all
Retention Option Gain upon the occurrence of those certain events described in
Section 11(b) of the Employment Agreement.

     8. RIGHTS AS A STOCKHOLDER. You will have no right as a stockholder with
respect to any Option Shares until and unless ownership of such Option Shares
has been transferred to you.

     9. OPTION NOT TRANSFERABLE. This Option will not be assignable or
transferable by you, other than by a qualified domestic relations order or by
will or by the laws of descent and distribution, and will be exercisable during
your lifetime only by you (or your legal guardian or personal representative).
If this Option remains exercisable after your death, subject to Sections 1, 5
and 6 above, it may be exercised by the personal representative of your estate
or by any person who acquires the right to exercise such Option by bequest,
inheritance or otherwise by reason of your death.

     10. TRANSFERABILITY OF OPTION SHARES. Option Shares generally are freely
tradable in the United States. However, you may not offer, sell or otherwise
dispose of any Option Shares in a way which would: (a) require the Company to
file any registration statement with the Securities and Exchange Commission (or
any similar filing under state


                                       3



law or the laws of any other country) or to amend or supplement any such filing
or (b) violate or cause the Company to violate the Securities Act of 1933, as
amended, the rules and regulations promulgated thereunder, any other state or
federal law, or the laws of any other country. The Company reserves the right to
place restrictions required by law on Common Stock received by you pursuant to
this Option.

     11. CONFORMITY WITH THE PLAN. This Option is intended to conform in all
respects with, and is subject to applicable provisions of, the Plan.
Inconsistencies between this Agreement and the Plan shall be resolved in
accordance with the terms of the Plan. By your acceptance of this Agreement, you
agree to be bound by all of the terms of this Agreement and the Plan.

     12. NO RIGHTS TO CONTINUED EMPLOYMENT. Nothing in this Agreement confers
any right on you to continue in the employ of the Coach Companies or affects in
any way the right of any of the Coach Companies to terminate your employment at
any time with or without cause.

     13. MISCELLANEOUS.

         (A) AMENDMENT OR MODIFICATIONS. The grant of this Option is documented
     by the minutes of the Committee, which records are the final determinant of
     the number of shares granted and the conditions of this grant. The
     Committee may amend or modify this Option in any manner to the extent that
     the Committee would have had the authority under the Plan initially to
     grant such Option, provided that no such amendment or modification shall
     directly or indirectly impair or otherwise adversely affect your rights
     under this Agreement without your prior written consent. Except as in
     accordance with the two immediately preceding sentences, this Agreement may
     be amended, modified or supplemented only by an instrument in writing
     signed by both parties hereto.

         (B) GOVERNING LAW. All matters regarding or affecting the relationship
     of the Company and its stockholders shall be governed by the General
     Corporation Law of the State of Maryland. All other matters arising under
     this Agreement shall be governed by the internal laws of the State of New
     York, including matters of validity, construction and interpretation. You
     and the Company agree that all claims in respect of any action or
     proceeding arising out of or relating to this Agreement shall be heard or
     determined in any state or federal court sitting in New York, New York and
     you and the Company agree to submit to the jurisdiction of such courts, to
     bring all such actions or proceedings in such courts and to waive any
     defense of inconvenient forum to such actions or proceedings. A final
     judgment in any action or proceeding so brought shall be conclusive and may
     be enforced in any manner provided by law. Notwithstanding the foregoing,
     any matter also covered by, or dependent upon any interpretation under, the
     Employment Agreement shall be resolved pursuant to the arbitration
     provisions of Section 20 thereof.

                                       4




         (C) SUCCESSORS AND ASSIGNS. Except as otherwise provided herein, this
     Agreement will bind and inure to the benefit of the respective successors
     and permitted assigns and heirs and legal representatives of the parties
     hereto whether so expressed or not.

         (D) SEVERABILITY. Whenever feasible, each provision of this Agreement
     will be interpreted in such manner as to be effective and valid under
     applicable law, but if any provision of this Agreement is held to be
     prohibited by or invalid under applicable law, such provision will be
     ineffective only to the extent of such prohibition or invalidity, without
     invalidating the remainder of this Agreement.

     14. SECTION 409A. The parties acknowledge and agree that, to the extent
applicable, this Agreement shall be interpreted in accordance with, and the
parties agree to use their best efforts to achieve timely compliance with
Section 409A of the Internal Revenue Code of 1986, as amended, and the
Department of Treasury Regulations and other interpretive guidance issued
thereunder ("SECTION 409A"). Notwithstanding any provision of this Agreement to
the contrary, in the event that the Company determines that any amounts payable
hereunder would otherwise be taxable to you under Section 409A, the Company may
(a), provided it reasonably determines that any such amendments are likely to be
effective, adopt such limited amendments to this Agreement and appropriate
policies and procedures, including amendments and policies with retroactive
effect, that the Company reasonably determines are necessary or appropriate to
comply with the requirements of Section 409A and thereby avoid the application
of penalty taxes under such Section.



                            [signature page follows]


                                      5




     In witness whereof, the parties hereto have executed and delivered this
agreement.

                                        COACH, INC.


                                        ----------------------------------
                                        Felice Schulaner
                                        Senior Vice President of Human Resources

                                        Date:  November 8, 2005


     I ACKNOWLEDGE THAT I HAVE READ AND UNDERSTAND THE TERMS AND CONDITIONS OF
THIS AGREEMENT AND OF THE PLAN AND I AGREE TO BE BOUND THERETO.

                                        OPTIONEE:


                                        ----------------------------------
                                        MICHAEL F. DEVINE, III

                                        SSN:
                                            ------------------------------
                                        Date:  November 8, 2005




                                       6

                                                                       EXHIBIT C
                                                                       ---------

                                      COACH
                            2000 STOCK INCENTIVE PLAN
        RETENTION RESTRICTED STOCK UNIT AWARD GRANT NOTICE AND AGREEMENT

Michael F. Devine, III

        Coach, Inc. (the "COMPANY") is pleased to confirm that you have been
granted a restricted stock unit award (the "AWARD"), effective as of NOVEMBER 8,
2005 (the "AWARD DATE"), as provided in this agreement (the "AGREEMENT")
pursuant to the Coach, Inc. 2000 Stock Incentive Plan (the "PLAN"). The
restricted stock units ("RSUs") subject to this Award are the "RETENTION RSUs"
as defined in that certain Employment Agreement entered into by and between you
and the Company effective as of NOVEMBER 8, 2005 (the "EMPLOYMENT AGREEMENT").

        1. AWARD. Subject to the restrictions, limitations and conditions as
described below, the Company hereby awards to you as of the Award Date:

                                  38,101 RSUs

which are considered Awards of Restricted Stock under the Plan. Each RSU
represents the right to receive one share of Coach, Inc. common stock upon the
satisfaction of terms and conditions set forth in this Agreement and the Plan.
While the restrictions are in effect, the RSUs are not transferable by the
Participant by means of sale, assignment, exchange, pledge, or otherwise.

        2. VESTING. The RSUs will remain restricted and may not be sold or
transferred by you until they have become vested pursuant to the terms of this
Agreement. Subject to Section 4 below (a) 20% of the RSUs shall become vested on
EACH OF JUNE 30, 2008 AND JUNE 30, 2009 and (b) the remaining 60% of the RSUs
shall become vested on JUNE 30, 2010. Each of June 30, 2008, June 30, 2009 and
June 30, 2010 shall be referred to herein as a "VESTING DATE."

        3. DISTRIBUTION OF THE AWARD. As soon as reasonably practicable
following each Vesting Date, the Human Resources and Corporate Governance
Committee (the "COMMITTEE") of the Company's Board of Directors will release the
portion of the Award that has become vested as of such Vesting Date. Applicable
withholding taxes will be settled by withholding a number of shares of Coach,
Inc. common stock with a market value not less than the amount of such taxes,
and a stock certificate for the net number of shares of Coach, Inc. common stock
distributed will be delivered to you; provided, that in the event that the
Company is liquidated in bankruptcy, (a) the Committee will not release shares
of Coach, Inc. common stock pursuant to the Award and (b) all payments made
pursuant to the Award will be made in cash equal to the fair market value per
share of Coach, Inc. common stock on the distribution date multiplied by the
number of RSUs.



        4. TERMINATION OF EMPLOYMENT.

                (a) DEATH OR DISABILITY. If you cease active employment with the
        Company because of your death or "DISABILITY" (as defined in the
        Employment Agreement), any portion of the Award that has not become
        vested on or prior to the date of such termination shall thereupon be
        forfeited; provided, that in the alternative the Committee may, in its
        sole discretion, cause all or any portion of the Award to become vested
        effective as of the date of such termination.

                (b) TERMINATION WITHOUT CAUSE OR FOR GOOD REASON. Except as
        otherwise provided in Section 4(d) with respect to certain terminations
        of employment in connection with a Change in Control, if your employment
        is terminated by the Company without "CAUSE" (as defined in the
        Employment Agreement) or by you for "GOOD REASON" (as defined in the
        Employment Agreement), then any portion of the Award that has not become
        vested on or prior to the date of such termination shall continue to
        become vested as of the dates set forth in Section 2.

                (c) TERMINATION FOR CAUSE OR WITHOUT GOOD REASON. If your
        employment is terminated by the Company for Cause or by you without Good
        Reason (including without limitation by reason of your retirement), then
        any portion of the Award that has not become vested on or prior to the
        date of such termination shall thereupon be forfeited.

                (d) CERTAIN TERMINATIONS OF EMPLOYMENT IN CONNECTION WITH A
        CHANGE IN CONTROL. Notwithstanding Section 4(b), if your employment is
        terminated by the Company without Cause or by you for Good Reason within
        six months prior to a "CHANGE IN CONTROL" (as defined in the Employment
        Agreement) or during the 12 month period immediately following such
        Change in Control, then the Award shall become fully vested effective
        immediately prior to the date of such termination.

        5. FORFEITURE. Notwithstanding anything contained in this Agreement to
the contrary, the Award shall be subject to Section 11 of the Employment
Agreement. Accordingly, if you (a) violate any of the covenants set forth in
Section 9(a) or 9(b) of the Employment Agreement, or (b) materially violate any
of the covenants set forth in Section 9(c), 9(e) or 9(f) of the Employment
Agreement, then pursuant to Section 11 of the Employment Agreement (i) any
portion of the Award that has not become vested prior to the date of such breach
shall thereupon be forfeited and (ii) you shall be required to pay to the
Company the amount of all "RETENTION RSU GAIN" (as defined in the Employment
Agreement). You shall also be required to pay to the Company the amount of all
Retention RSU Gain upon the occurrence of those certain events described in
Section 11(b) of the Employment Agreement.

        6. AWARD NOT TRANSFERABLE. The Award will not be assignable or
transferable by you, other than by a qualified domestic relations order or by
will or by the

                                        2



laws of descent and distribution, and will be exercisable during your lifetime
only by you (or your legal guardian or personal representative).

        7. TRANSFERABILITY OF AWARD SHARES. The shares you will receive under
the Award on or following the applicable Vesting Date generally are freely
tradable in the United States. However, you may not offer, sell or otherwise
dispose of any shares in a way which would: (a) require the Company to file any
registration statement with the Securities and Exchange Commission (or any
similar filing under state law or the laws of any other country) or to amend or
supplement any such filing or (b) violate or cause the Company to violate the
Securities Act of 1933, as amended, the rules and regulations promulgated
thereunder, any other state or federal law, or the laws of any other country.
The Company reserves the right to place restrictions required by law on any
shares of Coach, Inc. common stock received by you pursuant to the Award.

        8. CONFORMITY WITH THE PLAN. The Award is intended to conform in all
respects with, and is subject to applicable provisions of, the Plan.
Inconsistencies between this Agreement and the Plan shall be resolved in
accordance with the terms of the Plan. By your acceptance of this Agreement, you
agree to be bound by all of the terms of this Agreement and the Plan.

        9. NO RIGHTS TO CONTINUED EMPLOYMENT. Nothing in this Agreement confers
any right on you to continue in the employ of the Coach Companies or affects in
any way the right of any of the Coach Companies to terminate your employment at
any time with or without cause.

        10. MISCELLANEOUS.

                (a) AMENDMENT OR MODIFICATIONS. The grant of the Award is
        documented by the minutes of the Committee, which records are the final
        determinant of the number of shares granted and the conditions of this
        grant. The Committee may amend or modify the Award in any manner to the
        extent that the Committee would have had the authority under the Plan
        initially to grant such Award, provided that no such amendment or
        modification shall directly or indirectly impair or otherwise adversely
        affect your rights under this Agreement without your prior written
        consent. Except as in accordance with the two immediately preceding
        sentences, this Agreement may be amended, modified or supplemented only
        by an instrument in writing signed by both parties hereto.

                (b) GOVERNING LAW. All matters regarding or affecting the
        relationship of the Company and its stockholders shall be governed by
        the General Corporation Law of the State of Maryland. All other matters
        arising under this Agreement shall be governed by the internal laws of
        the State of New York, including matters of validity, construction and
        interpretation. You and the Company agree that all claims in respect of
        any action or proceeding arising out of or relating to this Agreement
        shall be heard or determined in any state or federal court sitting in
        New York, New York and you and the Company agree to submit to the
        jurisdiction of such courts, to bring all such actions or proceedings

                                       3



        in such courts and to waive any defense of inconvenient forum to such
        actions or proceedings. A final judgment in any action or proceeding so
        brought shall be conclusive and may be enforced in any manner provided
        by law. Notwithstanding the foregoing, any matter covered by, or
        dependent upon any interpretation under, the Employment Agreement shall
        be resolved pursuant to the arbitration provisions of Section 20
        thereof.

                (c) SUCCESSORS AND ASSIGNS. Except as otherwise provided herein,
        this Agreement will bind and inure to the benefit of the respective
        successors and permitted assigns and heirs and legal representatives of
        the parties hereto whether so expressed or not.

                (d) SEVERABILITY. Whenever feasible, each provision of this
        Agreement will be interpreted in such manner as to be effective and
        valid under applicable law, but if any provision of this Agreement is
        held to be prohibited by or invalid under applicable law, such provision
        will be ineffective only to the extent of such prohibition or
        invalidity, without invalidating the remainder of this Agreement.

        11. SECTION 409A. The parties acknowledge and agree that, to the extent
applicable, this Agreement shall be interpreted in accordance with, and the
parties agree to use their best efforts to achieve timely compliance with
Section 409A of the Internal Revenue Code of 1986, as amended, and the
Department of Treasury Regulations and other interpretive guidance issued
thereunder ("SECTION 409A"). Notwithstanding any provision of this Agreement to
the contrary, in the event that the Company determines that any amounts payable
hereunder would otherwise be taxable to you under Section 409A, the Company may
(a), provided it reasonably determines that any such amendments are likely to be
effective, adopt such limited amendments to this Agreement and appropriate
policies and procedures, including amendments and policies with retroactive
effect, that the Company reasonably determines are necessary or appropriate to
comply with the requirements of Section 409A and thereby avoid the application
of penalty taxes under such Section.


                                               [signature page follows]



                                        4


        In witness whereof, the parties hereto have executed and delivered this
agreement.


                                        COACH, INC.


                                        ----------------------------------------
                                        Felice Schulaner
                                        Senior Vice President of Human Resources
                                        Date: November 8, 2005



        I ACKNOWLEDGE THAT I HAVE READ AND UNDERSTAND THE TERMS AND CONDITIONS
OF THIS AGREEMENT AND OF THE PLAN AND I AGREE TO BE BOUND THERETO.


                                        AWARD RECIPIENT:


                                        ----------------------------------------
                                        MICHAEL F. DEVINE, III

                                        SSN:
                                             -----------------------------------
                                        Date:  November 8, 2005



                                        6

                                                                       EXHIBIT D

                        SEPARATION AND RELEASE AGREEMENT

         Coach, Inc. and its subsidiaries (collectively, the "COMPANY") and
Michael F. Devine, III ("EXECUTIVE") enter into this Separation and Release
Agreement ("AGREEMENT"), which was received by Executive on the _______ day of
____________, 200__, signed by Executive on the date shown below Executive's
signature on the last page of this Agreement and is effective eight days (8)
after the date of execution by Executive unless employee revokes the agreement
before that date, for and in consideration of the promises made among the
parties and other good and valuable consideration as follows:

                              W I T N E S S E T H:
                              -------------------

         WHEREAS,  Executive has been  employed by the Coach,  Inc. as Senior
Vice  President  and Chief  Financial Officer;

         WHEREAS, Executive and the Company have agreed that Executive's
employment with the Company [will terminate as of] [has terminated as of]
[termdate;] and

         WHEREAS, Executive and the Company have negotiated and reached an
agreement with respect to all rights, duties and obligations arising between
them, including, but in no way limited to, any rights, duties and obligations
that have arisen or might arise out of or are in any way related to Executive's
employment with the Company and the conclusion of that employment.

         NOW, THEREFORE, in consideration of the covenants and mutual promises
herein contained, it is agreed as follows:

          1. Separation Date. Until [termdate,] (the "SEPARATION DATE"),
     Executive [shall continue][has continued] as an employee of the Company and
     shall receive the same compensation and benefits he presently receives.
     Executive agrees to resign his employment and all appointments he holds
     with the Company and its affiliates effective on the Separation Date.
     Executive understands and agrees that his employment with the Company will
     conclude on the close of business on the Separation Date.

          2. Severance Payments and Benefits.

               (a) The Company hereby agrees to pay Executive all amounts due
          and payable, and to provide the Executive with all benefits and
          perquisites required, pursuant to Section 7 of that certain Employment
          Agreement effective as of November 8, 2005 by and between Coach, Inc.
          and the Executive (the "EMPLOYMENT AGREEMENT").

               (b) In the event of the Executive's death prior to the payment of
          any amount payable pursuant to Section 7 of the Employment Agreement,
          such amount shall be payable to Executive's estate and, except to the
          extent benefits






          contemplated herein are provided by their terms to Executive's heirs
          and beneficiaries, the Company shall have no further obligations to
          Executive's beneficiaries under this Agreement (other than Section 8
          and 13 of the Employment Agreement).

               (c) The severance payments shall cease if the Executive becomes
          reemployed by the Company or any enterprise in which Coach, Inc. owns
          a controlling interest.

          3. Receipt of Other Compensation. Executive acknowledges and agrees
     that, other than as specifically set forth in this Agreement, including
     without limitation the provisions of the Employment Agreement set forth
     herein, Executive is not and will not be due any compensation, including,
     but not limited to, compensation for unpaid salary (except for amounts
     unpaid and owing for Executive's employment with the Company and its
     affiliates prior to the Separation Date), severance and unused vacation
     time or vacation pay from the Company or any of its affiliates, except for
     amounts unpaid but accrued in accordance with Section 7(a) of the
     Employment Agreement, and as of and after the Separation Date, except as
     provided herein and as set forth in accordance with Section 7, 8 or 13 of
     the Employment Agreement, Executive will not be eligible to participate in
     any of the benefit plans of the Company or any of its affiliates,
     including, without limitation, the Company's Savings and Profit Sharing
     Plan, travel accident insurance, personal accident insurance, accidental
     death and dismemberment insurance and short-term and long-term disability
     insurance. Executive will be entitled to receive benefits, which are vested
     and accrued prior to the Separation Date pursuant to the employee benefit
     plans of the Company. The Company shall promptly reimburse Executive for
     business expenses incurred in the ordinary course of Executive's employment
     on or before the Separation Date, but not previously reimbursed, provided
     the Company's policies of documentation and approval are satisfied.

          4. Annual Bonus. Executive shall receive [INSERT PRO RATA PORTION] of
     Executive's bonus earned under the Performance-Based Annual Incentive Plan
     of the Company for the [####] fiscal year as a result of Executive's
     employment with the Company during the [####] fiscal year. For purposes of
     calculating the bonus, the Company will use Executive's actual financial or
     other quantitative performance criteria to determine the Executive's bonus.
     With respect to any discretionary, non-quantitative component of the bonus,
     the Company will assume a [SE/EE/ME] level of performance by the Executive.
     The bonus payment provided for in this Paragraph 4 shall be in lieu of, not
     in addition to, all bonuses payable to the Executive and shall be paid to
     Executive on the same date or dates on which active participants under such
     bonus plan are paid bonuses for the applicable bonus periods. The bonus
     payment, if any, made by the Company shall be reduced by applicable
     withholding and other customary payroll deductions. Executive shall not be
     entitled to participate in any annual bonus plan of the Company for any
     fiscal year ending after the [####] fiscal year.

          5. Stock Options. Notwithstanding any other provision of this
     Agreement, Executive's Stock Options, Retention Stock Units and any other
     equity compensation awards shall be treated pursuant to the written terms
     and conditions of the applicable


                                       2



     grant agreement and in accordance with Section 7 of the Employment
     Agreement including without limitation any provisions therein with regard
     to termination, forfeiture, or claw back. Executive shall not be entitled
     to receive any new stock option grants, including Restoration stock
     options, after the Separation Date.

          6. Health Insurance Continuation, Universal Life. Executive's
     participation in the employee benefit plans available to the Executives of
     Coach, Inc. shall cease as of the Separation Date except as continued in
     accordance with Section 7 of the Employment Agreement; however, Executive
     shall have the right, at Executive's expense, to exercise such conversion
     privileges as may be available under such plans. The Company shall cease
     paying premiums for the individual universal life insurance policy provided
     to Executive by the Company under the Executive Life Insurance Plan as of
     the Separation Date; however, Executive may, at Executive's election, keep
     the policy in effect after the Separation Date by paying the premiums
     therefor as they come due. The Company will continue to provide the
     Executive with all health and welfare benefits and perquisites which he was
     participating in for the duration stated in Section 7 of the Employment
     Agreement, as applicable. When such Company benefits cease, Executive shall
     be eligible to elect COBRA continuation coverage under the group medical
     and dental plan available to the Executives of Coach, Inc. The premium
     charged during the period stated in Section 7 of the Employment Agreement
     shall be at the same rate charged an active employee of the Company for
     similar coverage. The premium charged for COBRA continuation coverage after
     the end of the period stated in Section 7 of the Employment Agreement shall
     be entirely at Executive's expense and may be different from the premium
     charged during the period stated in Section 7 of the Employment Agreement.
     Executive's COBRA continuation coverage shall terminate in accordance with
     the COBRA continuation of coverage provisions under the group medical and
     dental plans of the Company.

          7. [Automobile. Executive may continue to use the automobile provided
     to Executive by the Company in accordance with the terms of the Company's
     leased automobile policy until the earlier of (i) the end of the period
     during which severance is payable pursuant to Section 7 of the Employment
     Agreement, (ii) the date on which Executive accepts full-time employment
     with another employer or (iii) the end of the lease term and provided
     further that the Company shall only be responsible for the lease payments
     and insurance; Executive shall be responsible for all other operating
     expenses, including all fuel and maintenance expenses related to the
     automobile. Executive shall have the option to purchase the automobile at
     any time during the term of this Agreement or upon the termination of this
     Agreement. In the event the Executive elects to purchase the automobile,
     the purchase price shall be determined in accordance with the Company's
     current policy. During the term of this lease, the Company shall continue
     to insure or provide insurance (including collision, comprehensive and
     liability) for the automobile.]

          8. Other Benefits. Executive will be entitled to fulfillment of any
     matching grant obligations under the Company's Matching Grants Program with
     respect to commitments made by Executive prior to the Separation Date.

                                       3




          9. Non-Solicitation, Non-Competition, Confidentiality,
     Non-Disparagement. Section 9 of the Employment Agreement shall continue to
     apply and shall be deemed made a part hereof as if set forth herein in
     full. In the event of a breach of such section, all provisions of the
     Employment Agreement concerning such a breach shall apply (including
     without limitation Sections 10 and 11).

          10. Overpayments, Employee Reimbursements and Return of Company
     Property. Executive agrees to repay any overpayment of severance payments,
     vacation payments, or other amount miscalculated hereunder to which
     Employee is not expressly entitled under the terms of this Agreement
     ("SEVERANCE OVERPAYMENT"). Executive expressly agrees that the Company may
     reconcile or set off any Severance Overpayment against any remaining unpaid
     severance payments or other severance pay, including vacation, due under
     this Agreement, or against any amounts due to Executive under any Company
     non-qualified plans.

          11. Employment Agreement Provisions. Sections 8, 9, 13 and 20 of the
     Employment Agreement shall continue to apply and shall be deemed made a
     part hereof as if set forth herein in full.

          12. Release.

               (a) Executive on behalf of himself, his heirs, executors,
          administrators and assigns, does hereby knowingly and voluntarily
          release, acquit and forever discharge the Company and any affiliates,
          successors, assigns and past, present and future directors, officers,
          employees, trustees and shareholders (the "RELEASED PARTIES") from and
          against any and all charges, complaints, claims, cross-claims,
          third-party claims, counterclaims, contribution claims, liabilities,
          obligations, promises, agreements, controversies, damages, actions,
          causes of action, suits, rights, demands, costs, losses, debts and
          expenses of any nature whatsoever, known or unknown, suspected or
          unsuspected, foreseen or unforeseen, matured or unmatured, which, at
          any time up to and including the date thereof, exists, have existed,
          or may arise from any matter whatsoever occurring, including, but not
          limited to, any claims arising out of or in any way related to
          Executive's employment with the Company or its affiliates and the
          conclusion thereof, which Executive, or any of his heirs, executors,
          administrators and assigns and affiliates and agents ever had, now has
          or at any time hereafter may have, own or hold against the Company or
          any affiliates, legal representatives, successors and assigns, past,
          present and future directors, officers, employees, trustees and
          shareholders. Executive acknowledges that in exchange for this
          release, the Company is providing Executive with total consideration,
          financial or otherwise, which exceeds what Executive would have been
          given without the release. By executing this Agreement, Executive is
          waiving all claims against the Company and its related persons arising
          under federal, state and local labor and antidiscrimination laws and
          any other restriction on the right to terminate employment, including,
          without limitation, Title VII of the Civil Rights Act of 1964, as
          amended, the Americans with Disabilities Act of 1990, as amended, and
          the Human Rights Act, as amended. Nothing herein shall release any
          party from


                                       4



          any obligation under this Agreement. Notwithstanding anything herein
          to the contrary, Executive expressly reserves and does not release his
          rights of indemnification to which he is entitled under Section 13 of
          the Employment Agreement, or any other rights of indemnification with
          regard to his service as an officer and director of the Company and
          its subsidiaries and its affiliates and any benefit plan, or his
          rights to, and under, director and officer liability insurance
          coverage.

               (b) EXECUTIVE SPECIFICALLY WAIVES AND RELEASES THE COMPANY FROM
          ALL CLAIMS EXECUTIVE MAY HAVE AS OF THE DATE EXECUTIVE SIGNS THIS
          AGREEMENT REGARDING CLAIMS OR RIGHTS ARISING UNDER THE AGE
          DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED, 29 U.S.C. ss.
          621 ("ADEA"). EXECUTIVE FURTHER AGREES: (A) THAT EXECUTIVE'S WAIVER OF
          RIGHTS UNDER THIS RELEASE IS KNOWING AND VOLUNTARY AND IN COMPLIANCE
          WITH THE OLDER WORKER'S BENEFIT PROTECTION ACT OF 1990; (B) THAT
          EXECUTIVE UNDERSTANDS THE TERMS OF THIS RELEASE; (C) THAT THE
          SEVERANCE PAYMENTS AND OTHER BENEFITS CALLED FOR IN THIS AGREEMENT
          WOULD NOT BE PROVIDED TO ANY EXECUTIVE TERMINATING HIS OR HER
          EMPLOYMENT WITH THE COMPANY WHO DID NOT SIGN A RELEASE SIMILAR TO THIS
          RELEASE, THAT SUCH PAYMENTS AND BENEFITS WOULD NOT HAVE BEEN PROVIDED
          HAD EXECUTIVE NOT SIGNED THIS RELEASE, AND THAT THE PAYMENTS AND
          BENEFITS ARE IN EXCHANGE FOR THE SIGNING OF THIS RELEASE; (D) THAT
          EXECUTIVE HAS BEEN ADVISED IN WRITING BY THE COMPANY TO CONSULT WITH
          AN ATTORNEY PRIOR TO EXECUTING THIS RELEASE; (E) THAT THE COMPANY HAS
          GIVEN EXECUTIVE A PERIOD OF AT LEAST TWENTY-ONE (21) DAYS WITHIN WHICH
          TO CONSIDER THIS RELEASE; (F) THAT EXECUTIVE REALIZES THAT FOLLOWING
          EXECUTIVE'S EXECUTION OF THIS RELEASE, EXECUTIVE HAS SEVEN (7) DAYS IN
          WHICH TO REVOKE THIS RELEASE BY WRITTEN NOTICE TO THE UNDERSIGNED, AND
          (G) THAT THIS ENTIRE AGREEMENT SHALL BE VOID AND OF NO FORCE AND
          EFFECT IF EXECUTIVE CHOOSES TO SO REVOKE, AND IF EXECUTIVE CHOOSES NOT
          TO SO REVOKE, THAT THIS AGREEMENT AND RELEASE THEN BECOME EFFECTIVE
          AND ENFORCEABLE.

          13. Covenant Not to Sue. To the maximum extent permitted by law,
     Executive covenants not to sue or to institute or cause to be instituted
     any action in any federal, state, or local agency or court against any of
     the Released Parties, with regard to any of the claims released in
     paragraph 12 of this Agreement. In the event of Executive's breach of the
     terms of this provision, without prejudice to the Company's other rights
     and remedies available at law or in equity, except as prohibited by law,
     Executive shall be liable for all costs and expenses (including, without
     limitation, reasonable attorney's fees and legal expenses) incurred by the
     Company as a result of such breach. Notwithstanding the foregoing, nothing
     herein shall prevent Executive or the Company


                                       5


     from instituting any action required to enforce the terms of this
     Agreement. In addition, nothing herein shall be construed to prevent
     Executive from enforcing any rights Executive may have under the Executive
     Retirement Income Security Act of 1974, commonly known as ERISA.

          14. Recommendations. The Company's executive officers will provide
     references for Executive to any prospective employer of the Executive who
     contacts the Company's executive officers in accordance with the Company's
     reference policy. The Company represents that it and its executive officers
     have no current knowledge concerning any issues that would affect the
     ability of the Company and its executive officers to provide such
     references.

          15. Executive's Understanding. Executive acknowledges by signing this
     Agreement that Executive has read and understands this document, that
     Executive has had an opportunity to review this Agreement, that Executive
     has conferred with or had opportunity to confer with Executive's attorney
     regarding the terms and meaning of this Agreement, that Executive has had
     sufficient time to consider the terms provided for in this Agreement, that
     no representatives or inducements have been made to Executive except as set
     forth in this Agreement, and that Executive has signed the same KNOWINGLY
     AND VOLUNTARILY.

          16. Non-Reliance. Executive represents to the Company and the Company
     represents to Executive that in executing this Agreement they do not rely
     and have not relied upon any representation or statement not set forth
     herein made by the other or by any of the other's agents, representatives
     or attorneys with regard to the subject matter, basis or effect of this
     Agreement or otherwise.

          17. Severability of Provisions. In the event that any one or more of
     the provisions of this Agreement is held to be invalid, illegal or
     unenforceable, the validity, legality and enforceability of the remaining
     provisions will not in any way be affected or impaired thereby. Moreover,
     if any one or more of the provisions contained in this Agreement are held
     to be excessively broad as to duration, scope, activity or subject, such
     provisions will be construed by limiting and reducing them so as to be
     enforceable to the maximum extent compatible with applicable law.

          18. Non-Admission of Liability. Executive agrees that neither this
     Agreement nor the performance by the parties hereunder constitutes an
     admission by any of the Released Parties of any violation of any federal,
     state or local law, regulation, common law, breach of any contract, or any
     wrongdoing of any type.

          19. Non-Assignability. The rights and benefits available under this
     Agreement are personal to Executive and such rights and benefits shall not
     be subject to assignment, alienation or transfer, except to the extent such
     rights and benefits are lawfully available to the estate or beneficiaries
     of Executive upon death.

          20. Entire Agreement. This Agreement sets forth all the terms and
     conditions with respect to compensation, remuneration of payments and
     benefits due Executive from


                                       6


     the Company and supersedes and replaces any and all other agreements or
     understandings Executive may have had with respect thereto. It may not be
     modified or amended except in writing and signed by both the Executive and
     an authorized representative of the Company.

          21. Notices. Any notice to be given hereunder shall be in writing and
     shall be deemed given when mailed by certified mail, return receipt
     requested, addressed as follows:

                           To Executive at:
                           Michael F. Devine, III
                           at the last known address on Company record

                           To the Company at:
                           Coach, Inc.
                           516 West 34th Street
                           New York, New York  10001
                           Attention:  General Counsel



                                        7




         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
In witness whereof, the parties hereto have executed and delivered this
agreement.

                                           COACH, INC.



                                           -------------------------------------


                                           Date:  ______________________________



         Accepted and agreed to.

                                           EXECUTIVE:



                                           -------------------------------------
                                           Michael F. Devine, III

                                           SSN: ________________________________

                                           Date:  ______________________________




                                        8

EXHIBIT 31.1

I, Lew Frankfort, certify that,

1.	I have reviewed this Quarterly Report on Form 10-Q of Coach, Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

	(b)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	(c)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

	(a)	All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: February 9, 2006

By:  /s/ Lew Frankfort                        

Name:    Lew Frankfort

Title: Chairman and Chief Executive Officer

---

I, Michael F. Devine, III, certify that,

1.	I have reviewed this Quarterly Report on Form 10-Q of Coach, Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

	(b)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	(c)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

	(a)	All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: February 9, 2006

By:  /s/ Michael F. Devine, III                    

Name:    Michael F. Devine, III

Title: Senior Vice President and Chief Financial Officer

---

EXHIBIT 32.1

Pursuant to 18 U.S.C. § 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Coach, Inc. (the ‘‘Company’’) hereby certifies, to such officer’s knowledge, that:

(i) the accompanying Quarterly Report on Form 10-Q of the Company for the fiscal quarter ended December 31, 2005 (the ‘‘Report’’) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

(ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: February 9, 2006

By:     /s/ Lew Frankfort                            
Name: Lew Frankfort
Title: Chairman and Chief Executive Officer

Pursuant to 18 U.S.C. § 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Coach, Inc. (the ‘‘Company’’) hereby certifies, to such officer’s knowledge, that:

(i) the accompanying Quarterly Report on Form 10-Q of the Company for the fiscal quarter ended December 31, 2005 (the ‘‘Report’’) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

(ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: February 9, 2006

By:     /s/ Michael F. Devine, III                    
Name: Michael F. Devine, III
Title: Senior Vice President and Chief Financial Officer

---