Definitive Proxy Statement
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
20549
SCHEDULE 14A
Proxy Statement Pursuant to
Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-12
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lululemon athletica inc.
(Name of Registrant as Specified In Its Charter)
(Name
of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
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Per unit price or other underlying value of transaction computed
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the offsetting fee was paid previously. Identify the previous
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TABLE OF
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NOTICE OF
2009 ANNUAL MEETING OF STOCKHOLDERS
To Be
Held June 10, 2009
TO OUR STOCKHOLDERS:
Notice is hereby given that the 2009 annual meeting of the
stockholders, or the Annual Meeting, of lululemon athletica
inc., a Delaware corporation, will be held on June 10,
2009, at 10:00 a.m. local time, in the Cheakamus Room at
the Fairmont Waterfront Hotel located at 900 Canada Place Way,
Vancouver, British Columbia, for the following purposes:
1. To elect three Class II directors to hold office
for a three-year term and until their respective successors are
elected and qualified.
2. To ratify the appointment of PricewaterhouseCoopers LLP
as our independent registered public accounting firm for the
fiscal year ending January 31, 2010.
3. To transact such other business as may properly come
before the meeting.
Our board of directors, or the Board, recommends that you vote
FOR the election of each of the nominees to the
Board and FOR the ratification of the appointment of
PricewaterhouseCoopers LLP as our independent registered public
accounting firm.
Stockholders of record at the close of business on
April 22, 2009 are entitled to notice of, and to vote at,
this meeting and any adjournment or postponement thereof. In
accordance with our Third Amended and Restated Bylaws, a list of
those stockholders entitled to vote at the Annual Meeting will
be available for examination by any stockholder, for any purpose
relating to the meeting, at the office of the Secretary,
lululemon athletica inc., 2285 Clark Drive, Vancouver, British
Columbia, beginning May 4, 2009. The list will also be
available at the Annual Meeting.
This year, we are pleased to take advantage of the Securities
and Exchange Commissions new Notice and Access
delivery model allowing companies to furnish proxy materials to
their stockholders over the Internet. We believe that this new
delivery process will expedite stockholders receipt of
proxy materials and lower the costs and reduce the environmental
impact of our Annual Meeting. On or about April 30, 2009,
we intend to mail to our stockholders of record as of
April 22, 2009 a Notice of Internet Availability of Proxy
Materials, or the Notice, containing instructions on how to
access our Proxy Statement and Annual Report to Stockholders for
the fiscal year ended February 1, 2009. This Notice also
provides instructions on how to vote online and includes
instructions on how to receive a paper copy of the proxy
materials by mail.
All stockholders are invited to attend the Annual Meeting. If
you are a stockholder of record as of April 22, 2009, you
will be admitted to the meeting if you present a form of photo
identification. If you own stock beneficially through a bank,
broker or otherwise, you will be admitted to the meeting if you
present a form of photo identification and proof of ownership or
a valid proxy signed by the record holder. A recent brokerage
statement or a letter from a bank or broker are examples of
proof of ownership. Whether or not you plan to attend the
Annual Meeting, please vote your shares via the Internet, as
described in the accompanying materials, to assure that your
shares are represented at the meeting, or, if you elect to
receive a paper copy of the proxy card by mail, you may mark,
sign and date the proxy card and return it in the enclosed
postage-paid envelope. If you attend the meeting you will, of
course, have the right to revoke the proxy and vote your shares
in person.
By order of the Board of Directors,
Dennis J. Wilson
Chairman of the Board of Directors
Vancouver, British Columbia
April 30, 2009
1
LULULEMON
ATHLETICA INC.
PROXY
STATEMENT
2009
ANNUAL MEETING OF STOCKHOLDERS
WEDNESDAY,
JUNE 10, 2009
GENERAL
INFORMATION
This Proxy Statement is being provided to solicit proxies on
behalf of the board of directors of lululemon athletica inc. for
use at the 2009 annual meeting of stockholders to be held on
Wednesday, June 10, 2009, at 10:00 a.m., local time,
in the Cheakamus Room at the Fairmont Waterfront Hotel, 900
Canada Way Place, Vancouver, British Columbia, and at any
adjournment or postponement thereof. We expect to first make
this Proxy Statement available, together with our Annual Report
for the fiscal year ended February 1, 2009, to stockholders
on approximately April 30, 2009.
Our principal offices are located at 2285 Clark Drive,
Vancouver, British Columbia V5N 3G9.
In this Proxy Statement, we refer to lululemon athletica inc. as
lululemon, we, us or the company.
Internet
Availability of Annual Meeting Materials
Under rules adopted by the Securities and Exchange Commission,
or SEC, we have elected to provide access to our proxy materials
over the Internet. Accordingly, we are sending a Notice of
Internet Availability of Proxy Materials, or the Notice, to our
stockholders of record. All stockholders will have the ability
to access the proxy materials on the website referred to in the
Notice or to request to receive a printed set of the proxy
materials. Instructions on how to access the proxy materials
over the Internet or to request a printed copy may be found in
the Notice. You will not receive a printed copy of the proxy
materials unless you request one in the manner set forth in the
Notice. This permits us to conserve natural resources and
reduces our printing costs, while giving stockholders a
convenient and efficient way to access our proxy materials and
vote their shares.
We intend to mail the Notice on or about April 30, 2009 to
all stockholders of record entitled to vote at the Annual
Meeting.
Who May
Vote
Only holders of record of our Common Stock and holders of record
of our Special Voting Stock, which we refer to as the
Exchangeable Stock, at the close of business on April 22,
2009, or the Record Date, will be entitled to notice of, and to
vote at, the Annual Meeting. On the Record Date,
50,706,078 shares of Common Stock and
19,502,205 shares of Exchangeable Stock were issued and
outstanding. Each share of Common Stock is entitled to one vote
at the Annual Meeting and each share of Exchangeable Stock is
entitled to one vote at the Annual Meeting. Holders of Common
Stock and Exchangeable Stock will vote together as a single
class on all matters that come before the Annual Meeting;
accordingly, throughout this Proxy Statement we refer generally
to our outstanding Common Stock and Special Voting Stock as our
Common Stock.
What
Constitutes a Quorum
Stockholders may not take action at the Annual Meeting unless
there is a quorum present at the meeting. The presence, in
person or by proxy, of a majority of the outstanding shares of
Common Stock entitled to vote as of the close of business on the
Record Date constitutes a quorum. Abstentions and broker
non-votes will count toward establishing a quorum. Broker
non-votes occur when brokers holding shares in street name for
beneficial owners do not receive instructions from the
beneficial owners about how to vote the shares. An abstention
occurs when a stockholder withholds such stockholders vote
by checking the abstain box on the proxy card, or
similarly elects to abstain via the Internet voting. Under the
rules that govern brokers who are voting with respect to shares
held in street name, brokers have the discretion to vote such
shares on routine matters, including the election of directors.
2
Vote
Required
Under applicable law and our Third Amended and Restated Bylaws,
if a quorum is present at the Annual Meeting, the three director
candidates who receive the greatest number of votes cast for the
election of directors by shares present in person or represented
by proxy and entitled to vote shall be elected directors. The
ratification of the appointment of our independent registered
public accounting firm requires the affirmative vote of a
majority of the votes cast at the Annual Meeting. You are not
entitled to cumulative voting rights in the election of
directors.
Voting
Process
Shares that are properly voted or for which proxy cards are
properly executed and returned will be voted at the Annual
Meeting in accordance with the directions given or, in the
absence of directions, will be voted FOR the
election of each nominee to the Board named herein, and
FOR the ratification of the appointment of our
independent registered public accounting firm. It is not
expected that any other matters will be brought before the
Annual Meeting. If, however, other matters are properly
presented, the persons named as proxies will vote in accordance
with their discretion with respect to such matters.
The manner in which your shares may be voted depends on how your
shares are held. If you are the record holder of your shares,
meaning you appear as the stockholder of your shares on the
records of our stock transfer agent, you may vote those shares
via the Internet, or, if you request a printed copy of the proxy
materials, via a proxy card for voting those shares included
with the printed proxy materials. If you own shares in street
name, meaning you are a beneficial owner with your shares held
through a bank or brokerage firm, you may instead receive a
voting instruction form with this Proxy Statement that you may
use to instruct your bank or brokerage firm how to vote your
shares.
Voting on
the Internet
You can vote your shares via the Internet by following the
instructions in the Notice. The Internet voting procedures are
designed to authenticate your identity and to allow you to vote
your shares and confirm your voting instructions have been
properly recorded. If you vote via the Internet, you do not need
to complete and mail a proxy card. We encourage you to vote your
shares via the Internet even if you plan to attend the Annual
Meeting.
Voting by
Mail
You can vote your shares by mail by requesting a printed copy of
the proxy materials sent to your address. When you receive the
proxy materials, you may fill out the proxy card enclosed
therein and return it per the instructions on the card. By
signing and returning the proxy card according to the
instructions provided, you are enabling the individuals named on
the proxy card, known as proxies, to vote your
shares at the Annual Meeting in the manner you indicate. If you
request a printed copy of the proxy materials, we encourage you
to sign and return the proxy card even if you plan to attend the
Annual Meeting.
Voting by
Telephone
You may be able to vote by telephone. If so, instructions are
included with your Notice. If you vote by telephone, you do not
need to complete and mail your proxy card.
Attendance
and Voting at the Annual Meeting
If you are the record holder of your shares, you may attend the
Annual Meeting and vote in person. You will be required to
present a form of photo identification for admission to the
Annual Meeting. If you own your stock in street name, you may
attend the Annual Meeting in person provided that you present a
form of photo identification and proof of ownership, such as a
recent brokerage statement or a letter from a bank or broker,
but in order to vote your shares at the Annual Meeting you must
obtain a legal proxy from the bank or brokerage firm
that holds your shares. You should contact your bank or
brokerage account representative to obtain a legal proxy.
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Revocation
If you are the record holder of your shares, you may revoke a
previously granted proxy at any time before the Annual Meeting
by delivering to the Secretary of lululemon athletica inc. a
written notice of revocation or a duly executed proxy bearing a
later date or by attending the Annual Meeting and voting in
person. Any stockholder owning shares in street name may change
or revoke previously given voting instructions by contacting the
bank or brokerage firm holding the shares or by obtaining a
legal proxy from such bank or brokerage firm and voting in
person at the Annual Meeting. Your personal attendance at the
Annual Meeting does not revoke your proxy. Your last vote, prior
to or at the Annual Meeting, is the vote that will be counted.
Householding
The SEC permits companies to send a single Notice, and for those
stockholders that elect to receive a paper copy of proxy
materials in the mail, one copy of our fiscal 2008 Annual Report
and this Proxy Statement to any household at which two or more
stockholders reside, unless contrary instructions have been
received, but only if we provide advance notice and follow
certain procedures. In such cases, each stockholder continues to
receive a separate Notice, and for those stockholders that elect
to receive a paper copy of proxy materials in the mail, one copy
of our fiscal 2008 Annual Report and this Proxy Statement. This
householding process reduces the volume of duplicate information
and reduces printing and mailing expenses. We have not
instituted householding for stockholders of record; however,
certain brokerage firms may have instituted householding for
beneficial owners of our Common Stock held through brokerage
firms. If your family has multiple accounts holding our Common
Stock, you may have already received householding notification
from your broker. Please contact your broker directly if you
have any questions or require additional copies of the Notice,
our fiscal 2008 Annual Report and this Proxy Statement. The
broker will arrange for delivery of a separate copy of the
Notice, and, if so requested, a separate copy of these proxy
materials promptly upon your written or oral request. You may
decide at any time to revoke your decision to household, and
thereby receive multiple copies.
Solicitation
of Proxies
We pay the cost of soliciting proxies for the Annual Meeting. We
solicit by mail, telephone, personal contact and electronic
means and arrangements are made with brokerage houses and other
custodians, nominees and fiduciaries to send Notices, and if
requested, other proxy materials, to beneficial owners. Upon
request, we will reimburse them for their reasonable expenses.
In addition, our directors, officers and employees may solicit
proxies, either personally or by telephone, facsimile or written
or electronic mail. Our transfer agent, Computershare
Trust Company, N.A., will assist in the solicitation of
proxies. The transfer agent does not charge a separate fee for
this service. We will reimburse the transfer agent for any
expenses related to proxy solicitation. Stockholders are
requested to return their proxies without delay.
4
PROPOSAL NO. 1
ELECTION OF DIRECTORS
At the Annual Meeting, three Class II directors are to be
elected to hold office for a term of three years. One of our
current Class II directors, Steven J. Collins, will resign
as a Class II director of the company effective immediately
prior to the Annual Meeting. Each director will serve until his
or her successor shall be elected and qualified. The Board has
no reason to believe that any of the nominees listed below will
be unable to serve as a director. If, however, any nominee
becomes unavailable, the proxies will have discretionary
authority to vote for a substitute nominee. There are no family
relationships among any of the directors or executive officers.
Unless authority to do so is withheld, the persons named as
proxies will vote FOR the election of the nominees
listed below.
The following table sets forth the name and age of each director
and director nominee, the positions and offices held by each
director with lululemon and the period during which the director
has served as a director of lululemon.
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Director
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Age
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Positions and Offices with lululemon
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Since
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Class I Directors whose terms expire at the 2011 Annual Meeting:
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Michael Casey
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Director
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2007
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RoAnn Costin
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Director
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2007
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R. Brad Martin
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Director
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Class II Director Nominees for election at the 2009 Annual
Meeting*:
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Christine M. Day
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Chief Executive Officer
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2008
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Martha A.M. Morfitt
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Director
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2008
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Rhoda M. Pitcher
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Director
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2005
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Class III Directors whose terms expire at the 2010 Annual
Meeting:
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David M. Mussafer
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Director
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2005
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Thomas G. Stemberg
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Director
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Dennis J. Wilson
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Chairman of the Board and Chief Product Designer
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* Steven J. Collins, a current Class II director, will
resign as a Class II Director immediately prior to the
Annual Meeting.
Class II
Director Nominees
Christine M. Day has been a member of our Board
and has served as the our Chief Executive Officer since June
2008. Prior to serving as our Chief Executive Officer,
Ms. Day served as our Executive Vice President, Retail
Operations, from January 2008 through April 2008, was appointed
to the offices of President and Chief Operating Officer in April
2008, and was named our Chief Executive Officer in June 2008.
Ms. Day previously worked with Starbucks Corporation, a
leading roaster and retailer of specialty coffee, where she
served as President, Asia Pacific Group from July 2004 through
February 2007. From July 2003 to October 2003, Ms. Day
served as Co-President for Starbucks Coffee International. From
1987 to 2003, Ms. Day served in various capacities at
Starbucks, including Senior Vice President, North American
Finance & Administration, and Vice President of Sales
and Operations for Business Alliances. Ms. Day is a member
of the board of directors of Select Comfort Corporation, a
provider of adjustable-firmness beds and other sleep-related
accessory products. Ms. Day received a B.A. in
Administrative Management from Central Washington University and
is a graduate of Harvard Business Schools Advanced
Management Program.
Martha A.M. (Marti) Morfitt has been a member of
our Board since December 2008. Ms. Morfitt has served as a
principal of River Rock Partners, Inc., a business and cultural
transformation consulting firm since 2008. Ms. Morfitt
served as the President and Chief Executive Officer of CNS,
Inc., a manufacturer and marketer of consumer healthcare
products, from 2001 through March 2007. From 1998 to 2001, she
was Chief Operating Officer of CNS, Inc. Ms. Morfitt
currently serves on the boards of Graco, Inc., a fluid handling
systems and components company, Solta Medical, Inc., the
developer of energy-based medical devices for aesthetic
5
applications, and Life Time Fitness, Inc., an operator of
fitness and athletic centers. Ms. Morfitt received a B.A.
degree from the Richard Ivey School of Business at the
University of Western Ontario.
Rhoda M. Pitcher has been a member of our Board
since 2005. For the past eleven years she has been the founder
and Chief Executive Officer of Rhoda M. Pitcher Inc., a
management consulting firm providing services in organizational
strategy and the building of executive capability to Fortune 500
corporations, institutions,
start-ups
and non-profits. From 1978 to 1997, Ms. Pitcher co-founded,
built and sold two international consulting firms.
Ms. Pitcher holds a Masters of Organization Development
from University Associates.
Class I
Directors Continuing in Office until the 2011 Annual Meeting of
Stockholders
Michael Casey has been a member of our Board since
October 2007. Mr. Casey retired from Starbucks Corporation,
a leading roaster and retailer of specialty coffee, where he
served as Senior Vice President and Chief Financial Officer from
August 1995 to September 1997, Executive Vice President, Chief
Financial Officer and Chief Administrative Officer from
September 1997 to October 2007. Subsequent to retirement he
served as a Senior Advisor to Starbucks Corporation from October
2007 to May 2008 and from November 2008 to the present. Prior to
joining Starbucks, Mr. Casey was Executive Vice President
and Chief Financial Officer for Family Restaurants, Inc., and
President and Chief Executive Officer of El Torito Restaurants,
Inc. Mr. Casey is also a member of the board of directors
of The NASDAQ OMX Group, Inc. Mr. Casey graduated from
Harvard College with an A.B. degree in Economics and later
returned to graduate school, where he earned his MBA degree from
Harvard Business School.
RoAnn Costin has been a member of our Board since
March 2007. Ms. Costin has served as the President of
Wilderness Point, a financial investment firm, since 2005. From
1992 until 2005, Ms. Costin served as the President of
Reservoir Capital Management, Inc., an investment advisory firm.
Ms. Costin received a B.A. in Government from Harvard
University and an M.B.A. from the Stanford University Graduate
School of Business.
R. Brad Martin has been a member of our Board
since March 2007. Mr. Martin served as the Chief Executive
Officer of Saks Incorporated, a retail department store company,
from 1989 until January 2006. Mr. Martin is a member of the
board of directors of Ruby Tuesday, Inc, a restaurant company,
First Horizon National Corporation, a banking company,
Dillards, Inc., a retail department store company, Gaylord
Entertainment Company, a hospitality and entertainment company.
Mr. Martin received a B.S. in political science from the
University of Memphis and an M.B.A. from Vanderbilt University.
Class III
Directors Continuing in Office until the 2010 Annual Meeting of
Stockholders
David M. Mussafer has been a member of our Board
since 2005. Mr. Mussafer is currently a Managing Partner of
Advent International Corporation, one of our principal
stockholders, and is responsible for Advent International
Corporations North American private equity operations.
Mr. Mussafer joined Advent International Corporation in
1990 and has been a principal of the firm since 1993 and is a
member of Advents executive committee and board of
directors. Mr. Mussafer is a member of the board of
directors of Amscan Holdings, Inc., a designer, manufacturer and
retailer of party supply goods and Shoes for Crews Inc, a
designer and marketer of footwear. Mr. Mussafer received a
B.S.M. from Tulane University and an M.B.A. from the Wharton
School of the University of Pennsylvania.
Thomas G. Stemberg has been a member of our Board
since 2005. Since March 2007, he has been the managing general
partner of Highland Consumer Fund, a venture capital firm. From
February 2005 until March 2007, Mr. Stemberg was a venture
partner with Highland Capital Partners. Mr. Stemberg
co-founded Staples, Inc., an office supplies retailer, serving
as its Chairman from 1988 to 2005, and as its Chief Executive
Officer from 1986 until 2002. Mr. Stemberg serves on the
board of directors of CarMax, Inc., a retailer of used cars and
PETsMART, Inc., a retailer of pet supplies and products.
Mr. Stemberg received an A.B. in Physical Science from
Harvard University and an M.B.A. from the Harvard Business
School.
Dennis J. Wilson founded our company in 1998 and
has served as the Chairman of our Board since 1998 and currently
also serves as our Chief Product Designer. Prior to serving as
our Chairman and Chief Product Designer, Mr. Wilson served
as our Chief Executive Officer from 1998 until 2005. In 1980,
Mr. Wilson founded Westbeach
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Snowboard Ltd., a surf, skate and snowboard vertical retailer,
and served as its Chief Executive Officer from 1980 until 1986,
its Co-Chief Executive Officer from 1986 to 1995 and as its Head
of Design and Production from 1995 until 1997. Mr. Wilson
received a B.A. in Economics from the University of Calgary.
The Board
Unanimously Recommends a Vote FOR the Election of
the Three
Class II Director Nominees.
CORPORATE
GOVERNANCE
Independence
of the Board
Pursuant to the listing standards of The Nasdaq Stock Market, or
NASDAQ, a majority of the members of our Board must qualify as
independent, as affirmatively determined by the
Board. The Board consults with our outside legal counsel to
ensure that the Boards determinations are consistent with
relevant securities and other laws and regulations regarding the
definition of independent, including those set forth
in the NASDAQ listing standards in effect at the time of the
determination.
Consistent with these considerations, after review of all
relevant transactions or relationships between each director, or
any of his or her family members, and lululemon, our senior
management and our independent auditors, the Board has
affirmatively determined that the following seven directors are
independent directors within the meaning of the applicable
NASDAQ listing standards: Michael Casey, RoAnn Costin, R. Brad
Martin, Martha A.M. Morfitt, David M. Mussafer, Rhoda M.
Pitcher and Thomas G. Stemberg. In making this determination,
the Board found that none of these directors had a material or
other disqualifying relationship with the company. Dennis J.
Wilson, our Chairman of the Board and our Chief Product
Designer, and Christine M. Day, our Chief Executive Officer, are
not independent directors by virtue of their current employment
with lululemon.
Executive
Sessions
Non-management directors meet in an executive session without
management present each time the Board holds its regularly
scheduled meetings. Mr. Martin has been designated by the
Board to act as the Lead Director for such executive sessions of
non-management directors.
Committees
and Meeting Attendance
The Board has an Audit Committee, a Compensation Committee and a
Nominating and Governance Committee. Each of these committees
operates under a written charter adopted by the Board. Copies of
these charters are available on our website at
www.lululemon.com. The Board held eight meetings during the
fiscal year ended February 1, 2009. Each of the standing
committees of the Board held the number of meetings indicated
below. During the last fiscal year, each of our directors
attended at least 75% of the total number of meetings of the
Board and all of the committees of the Board on which such
director served during that period. Directors are encouraged to
attend our annual meetings of stockholders. Seven directors
attended the 2008 annual meeting of stockholders.
7
The following table sets forth the three standing committees of
the Board, the members of each committee during the last fiscal
year and the number of meetings held by each committee:
|
|
|
|
|
|
|
|
|
|
|
|
|
Nominating and
|
Name of Director
|
|
Audit
|
|
Compensation
|
|
Governance
|
|
Michael Casey
|
|
Chair
|
|
|
|
|
Steven J. Collins(1)
|
|
Member(2)
|
|
Member
|
|
Member(3)
|
RoAnn Costin
|
|
Member
|
|
|
|
|
R. Brad Martin
|
|
Member
|
|
Member(4)
|
|
|
Martha A.M. Morfitt
|
|
Member(5)
|
|
|
|
|
David M. Mussafer
|
|
|
|
Chair
|
|
Member
|
Rhoda M. Pitcher
|
|
|
|
Member
|
|
Member
|
Thomas G. Stemberg
|
|
|
|
Member
|
|
Chair
|
Number of Meetings in Fiscal 2008
|
|
4
|
|
9
|
|
4
|
|
|
|
(1) |
|
Mr. Collins will resign from the Board and all Board
committees effective immediately prior to the Annual Meeting. |
|
(2) |
|
Mr. Collins resigned from the Audit Committee effective
September 2008. |
|
(3) |
|
Mr. Collins was appointed to the Nominating and Governance
Committee effective March 2008. |
|
(4) |
|
Mr. Martin was appointed to the Compensation Committee
effective March 2009. |
|
(5) |
|
Ms. Morfitt was appointed to the Audit Committee effective
March 2009. |
Audit
Committee
The Audit Committee is appointed by the Board to assist the
Board in fulfilling its financial oversight responsibilities by
overseeing the accounting and financial reporting processes of
lululemon and audits of our financial statements. The Audit
Committees primary duties and responsibilities include:
|
|
|
|
|
Appointing and retaining our independent registered public
accounting firm, approving all audit, review, and other services
to be provided by our independent registered public accounting
firm and determining the compensation to be paid for such
services;
|
|
|
|
Overseeing the integrity of our financial reporting process and
systems of internal controls regarding accounting and finance;
|
|
|
|
Overseeing the qualifications, independence, and performance of
our independent registered public accounting firm;
|
|
|
|
Reviewing and, if appropriate, approving any related party
transactions;
|
|
|
|
Reviewing lululemons Code of Business Conduct and Ethics
applicable to all directors, officers, and employees, and
monitoring and approving any modifications or waivers of such
code;
|
|
|
|
Providing a means for processing complaints and anonymous
submissions by employees of concerns regarding accounting or
auditing matters; and
|
|
|
|
Monitoring compliance with legal and regulatory requirements.
|
The current members of the Audit Committee are Michael Casey
Chairman, RoAnn Costin, R. Brad Martin, and Martha
A.M. Morfitt. Mr. Collins resigned from the Audit
Committee in September 2008. The Board has determined that all
members of the Audit Committee meet the independence
requirements of both NASDAQ and the SEC and that Michael Casey
qualifies as an Audit Committee Financial Expert, as
defined in Item 407(d)(5) of
Regulation S-K
promulgated by the SEC. There were four Audit Committee meetings
in fiscal 2008.
8
Compensation
Committee
The Compensation Committee has been delegated authority by the
Board to oversee all significant aspects of lululemons
compensation policies and programs, including:
|
|
|
|
|
Reviewing and approving the compensation and annual performance
objectives and goals of all of our executive officers;
|
|
|
|
Reviewing, approving, and administering incentive-based and
equity-based compensation plans in which our executive officers
participate;
|
|
|
|
Reviewing and recommending to the Board new executive
compensation programs; and
|
|
|
|
Reviewing and recommending to the Board proposed changes in
director compensation.
|
The current members of the Compensation Committee are David M.
Mussafer Chairman, Steven J. Collins, R. Brad Martin, Rhoda M.
Pitcher and Thomas G. Stemberg. Mr. Collins will resign
from the Board, including the Compensation Committee, effective
immediately prior to the Annual Meeting. The Board has
determined that each of Mr. Mussafer, Mr. Martin,
Ms. Pitcher and Mr. Stemberg meets the independence
requirements of NASDAQ. The Compensation Committee held nine
meetings during fiscal 2008.
Nominating
and Governance Committee
The Nominating and Governance Committee is responsible for
matters relating to the corporate governance of our company and
the nomination of members of the Board and committees thereof.
The current members of the Nominating and Governance Committee
are Thomas G. Stemberg Chairman, Steven J. Collins, David M.
Mussafer, and Rhoda M. Pitcher. Mr. Collins will resign
from the Board, including the Nominating and Governance
Committee, effective immediately prior to the Annual Meeting.
The Board has determined that each of Mr. Stemberg,
Mr. Mussafer and Ms. Pitcher meet the independence
requirements of NASDAQ. The Nominating and Governance Committee
held four meetings during fiscal 2008.
Director
Nominations
The Nominating and Governance Committee considers nominees
recommended by directors, officers, employees, stockholders, and
others based upon each candidates qualifications,
including whether a candidate possesses any of the specific
qualities and skills desirable in certain members of the Board.
Evaluations of candidates generally involve a review of
background materials, internal discussions, and interviews with
selected candidates, as appropriate. Upon selection of a
qualified candidate, the Nominating and Governance Committee
recommends the candidate to the Board. The Nominating and
Governance Committee may engage consultants or third-party
search firms to assist in identifying and evaluating potential
nominees.
Nominees for the Board must be committed to enhancing long-term
stockholder value and possess a high level of personal and
professional ethics, sound business judgment, appropriate
experience and achievements, personal character and integrity.
Board members are expected to understand our business and the
industry in which we operate, regularly attend Board and
committee meetings, participate in meetings and decision making
processes in an objective and constructive manner and be
available to advise our officers and management.
The Nominating and Governance Committee will consider director
candidates recommended by stockholders. The Nominating and
Governance Committee will evaluate director candidates in light
of several factors, including the minimum criteria set forth
above. Stockholders who wish to recommend individuals for
consideration by the Nominating and Governance Committee to
become nominees for election to the Board at an annual meeting
of stockholders must do so in accordance with the procedures set
forth in Stockholder Proposals to be Presented at the 2010
Annual Meeting of Stockholders section of this Proxy
Statement and in compliance with our bylaws. Each submission
must set forth: the name and address of the stockholder on whose
behalf the submission is made; the number of our shares that are
owned beneficially by such stockholder as of the date of the
submission and the time period for which such shares have been
held; the derivative securities interests owned beneficially by
such stockholder as of the date of the submission; a statement
from the record holder of the shares and derivative securities
interests verifying the holdings; the full name of the proposed
candidate; a description of the proposed
9
candidates business experience for at least the previous
five years; complete biographical information for the proposed
candidate; a description of the proposed candidates
qualifications as a director; and any other information
described in our bylaws and in our Guidelines for
Evaluating Director Candidates, which is available on our
website at www.lululemon.com. To date, the Nominating and
Governance Committee has not received a director nomination from
a stockholder or stockholders holding more than 5% of our voting
stock.
Communications
with Directors
Stockholders may communicate with lululemon directors by
transmitting correspondence by mail, facsimile or email,
addressed as follows:
Corporate Secretary
c/o lululemon
athletica inc.
2285 Clark Drive
Vancouver, British Columbia
Canada V5N 3G9
Facsimile: (604) 874-6124
Email: investors@lululemon.com
The Secretary will, as appropriate, forward communication to the
Board or to any individual director, directors, or Board
committee to whom the communication is directed.
Code of
Business Conduct and Ethics
We have adopted a Code of Business Conduct and Ethics that
applies to all of the officers, directors and employees of
lululemon and its subsidiaries. The most current version is
available on our web site at www.lululemon.com. If we make any
substantive amendments to the code or grant any waiver from a
provision of the code to any executive officer or director, we
will promptly disclose the nature of the amendment or waiver on
our website, as well as via any other means required by NASDAQ
rules or applicable law.
Compensation
Committee Interlocks and Insider Participation
Two of the current members of our Compensation Committee, Steven
J. Collins and David M. Mussafer, briefly served as corporate
officers of lululemon and a subsidiary during part of fiscal
2007 prior to our initial public offering in July 2007. The
other two members of the Compensation Committee, Thomas G.
Stemberg and Rhoda M. Pitcher, have never served as one of our
officers or employees. None of our executive officers currently
serves, or in fiscal 2008 served, as a member of the board or
compensation committee of any entity that has one or more
executive officers who serve on our Board or Compensation
Committee. Mr. Collins will resign from the Board and the
Compensation Committee effective immediately prior to the Annual
Meeting.
Director
and Officer Stock Ownership Guidelines
In June 2008, we adopted our Director and Officer Stock
Ownership Guidelines due to our belief that our officers
and non-employee directors should have a meaningful ownership
stake in lululemon to underscore the clear linkage of
officer, director, and stockholder interests and to encourage a
long-term perspective in managing lululemon. Accordingly, our
Nominating and Governance Committee adopted formal stock
ownership requirements as follows:
|
|
|
Position
|
|
Minimum Ownership Requirements
|
|
|
(Dollar Value of Shares)
|
|
Directors
|
|
4 x Annual Retainer Compensation
|
Chief Executive Officer
|
|
3 x Base Salary
|
Other Executive Officers reporting to Chief Executive Officer
|
|
1 x Base Salary
|
Non-employee directors and executive officers subject to the
guidelines are encouraged to comply with the guidelines by April
2013. New non-executive directors and executive officers who
report directly to the Chief Executive Officer are encouraged to
comply with these guidelines within five years after their date
of hire, appointment or election. The guidelines are voluntary.
10
Executive
Officers
Our executive officers and their ages as of February 1,
2009 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Officer
|
Name
|
|
Age
|
|
Positions
|
|
Since
|
|
Christine M. Day
|
|
47
|
|
Chief Executive Officer
|
|
2008
|
Dennis J. Wilson
|
|
53
|
|
Chief Product Designer
|
|
1998
|
John E. Currie
|
|
53
|
|
Chief Financial Officer
|
|
2007
|
Sheree Waterson
|
|
53
|
|
Executive Vice President,
General Merchandise Management and Sourcing
|
|
2008
|
Christine M. Days biographical summary is
included under Proposal No. 1 Election of
Directors.
Dennis J. Wilsons biographical summary is
included under Proposal No. 1 Election of
Directors.
John E. Currie has served as our Chief Financial
Officer since January 2007. Prior to joining us, Mr. Currie
worked for Intrawest Corporation, a provider of destination
resorts and leisure travel, from 1989 to 2006, including as
Chief Financial Officer from 2004 to 2006 and Senior Vice
President, Financing & Taxation from 1997 to 2004.
Prior to joining Intrawest he held senior financial positions
within the BCE Group, a telecommunications service provider, and
was a specialist in international taxation with a major
accounting firm. Mr. Currie is a member of the board of
directors of Hathor Exploration Limited, a resource exploration
company. Mr. Currie, a Chartered Accountant, received a
Bachelor of Commerce degree from the University of British
Columbia.
Sheree Waterson has served as our Executive Vice
President, General Merchandise Management and Sourcing, since
June 2008. Prior to joining us, she served as President of
Speedo North America, a Warnaco, Inc. brand, from January 2005
to June 2007. She served as Vice President of Merchandising,
Womens, for Levi Strauss & Co.,
from January 2002 to August 2004, where she spearheaded
initial work on new womens speed-to-market and
profitability models and pioneered the fit logic
initiative. From July 1997 to April 2000, she served as Vice
President of Merchandising at Gymboree, and from August 2000 to
August 2001 she served as CEO of Enfashion.com. She graduated
from the University of California Berkley with a Bachelor of
Arts in Psychology.
11
PROPOSAL NO. 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee of the Board has selected
PricewaterhouseCoopers LLP, or PwC, as our independent
registered public accounting firm to audit the consolidated
financial statements of lululemon for the fiscal year ending
January 31, 2010. PwC has acted in such capacity since its
appointment in fiscal 2006. A representative of PwC is expected
to be present at the Annual Meeting, with the opportunity to
make a statement if the representative desires to do so, and is
expected to be available to respond to appropriate questions.
The following table sets forth the aggregate fees billed to
lululemon for the fiscal years ended February 1, 2009 and
February 3, 2008 by PwC:
|
|
|
|
|
|
|
|
|
|
|
Fiscal 2008
|
|
|
Fiscal 2007
|
|
|
Audit Fees(1)
|
|
$
|
697,614
|
|
|
$
|
1,503,460
|
|
Audit-Related Fees(2)
|
|
|
$0
|
|
|
|
$0
|
|
Tax Fees(3)
|
|
|
$0
|
|
|
|
$0
|
|
All Other Fees(4)
|
|
|
$0
|
|
|
|
$0
|
|
|
|
|
(1) |
|
Audit Fees consist of fees billed for professional services
rendered for the audit of the companys consolidated annual
financial statements and review of the interim consolidated
financial statements included in quarterly reports and services
that are normally provided by PwC in connection with statutory
and regulatory filings or engagements, including issuance of
comfort letters to underwriters and consent procedures in
connection with our initial public offering and other public
filings in fiscal 2007. |
|
(2) |
|
Audit-Related Fees consist of fees billed for assurance and
related services that are reasonably related to the performance
of the audit or review of the companys consolidated
financial statements and are not reported under Audit
Fees. |
|
(3) |
|
Tax Fees consist of fees billed for professional services
rendered for tax compliance, tax advice and tax planning
(domestic and international). These services include assistance
regarding federal, state and international tax compliance,
acquisitions and international tax planning. |
|
(4) |
|
All Other Fees consist of fees for products and services other
than the services reported above. |
None of the services related to Audit-Related Fees, Tax Fees or
All Other Fees described above was approved by the Audit
Committee pursuant to the waiver of pre-approval provisions set
forth in applicable rules of the SEC. The Audit Committees
policy is to pre-approve all audit and permissible non-audit
services provided by our independent registered public
accounting firm. These services may include audit services,
audit-related services, tax services and other services.
Pre-approval is generally provided for up to one year and any
pre-approval is detailed as to the particular service or
category of services. The independent registered public
accounting firm and management are required to periodically
report to the Audit Committee regarding the extent of services
provided by the independent registered public accounting firm in
accordance with this pre-approval. The Chairman of the Audit
Committee is also authorized, pursuant to delegated authority,
to pre-approve additional services of up to $25,000 per
engagement on a
case-by-case
basis, and such approvals are communicated to the full Audit
Committee at its next meeting.
Vote
Required and Board Recommendation
Approval of this proposal requires the affirmative vote of a
majority of the votes cast affirmatively or negatively on the
proposal at the Annual Meeting, as well as the presence of a
quorum representing a majority of all outstanding shares of our
Common Stock, either in person or by proxy. Abstentions and
broker non-votes will each be counted as present for purposes of
determining the presence of a quorum but will not have any
effect on the outcome of the proposal.
The Board unanimously recommends a vote FOR the
appointment of PricewaterhouseCoopers LLP as our independent
registered public accounting firm for the fiscal year ending
January 31, 2010.
12
REPORT OF
THE AUDIT COMMITTEE
The Audit Committee oversees lululemons financial
reporting process on behalf of the Board. Management has the
primary responsibility for the financial statements and the
reporting process, including internal control systems. Our
independent registered public accounting firm,
PricewaterhouseCoopers LLP, is responsible for expressing an
opinion as to the conformity of our audited financial statements
with generally accepted accounting principles.
The Audit Committee consists of four directors, each of whom, in
the judgment of the Board, is an independent
director as defined in the listing standards for The
Nasdaq Stock Market. The Audit Committee acts pursuant to a
written charter that has been adopted by the Board. A copy of
this charter is available on our website at www.lululemon.com.
The Audit Committee has reviewed and discussed the audited
financial statements with management. The Audit Committee has
discussed and reviewed with the auditors all matters required to
be discussed Statement on Auditing Standards No. 61, as
amended (Communication with Audit Committees). The Audit
Committee has met with PricewaterhouseCoopers LLP, with and
without management present, to discuss the overall scope of
PricewaterhouseCoopers LLPs audit, the results of its
examinations, and the overall quality of its financial reporting.
The Audit Committee has received from the auditors a formal
written statement describing all relationships between the
auditors and lululemon that might bear on the auditors
independence consistent with Independence Standards Board
Standard No. 1 (Independence Discussions with Audit
Committees), discussed with the auditors any relationships that
may impact their objectivity and independence, and satisfied
itself as to the auditors independence.
Based on the review and discussions referred to above, the Audit
Committee recommended to the Board that lululemons audited
financial statements be included in lululemons Annual
Report on
Form 10-K
for the fiscal year ended February 1, 2009.
AUDIT COMMITTEE
Michael Casey (Chairman)
RoAnn Costin
R. Brad Martin
Martha A.M. Morfitt
13
EXECUTIVE
COMPENSATION
Compensation
Discussion and Analysis
Compensation
Philosophy and Objectives
The primary goals of our executive compensation program are to:
|
|
|
|
|
attract, retain, motivate and reward talented executives;
|
|
|
|
tie annual and long-term compensation incentives to achievement
of specified performance objectives inherent in our business
strategy;
|
|
|
|
create long-term value for our stockholders by aligning the
interests of our executives with those of our
stockholders; and
|
|
|
|
provide our executives with a total compensation package that
recognizes individual contributions, as well as overall business
results.
|
To achieve these goals, we intend to maintain compensation plans
that tie a substantial portion of our executives overall
compensation to the achievement of key strategic, operational
and financial goals.
Our Compensation Committee and Board evaluate individual
executive performance with the goal of setting compensation at
levels that they believe are comparable with executives in other
companies of similar size and stage of development
operating in the retail apparel industry. In connection with
setting appropriate levels of compensation, our Compensation
Committee and Board base their decisions on their general
business and industry knowledge and experience and publicly
available information of high growth retailers, branded athletic
apparel companies, and other comparable companies, while also
taking into account our relative performance and strategic
goals. We intend to continue to conduct an annual review of the
aggregate level of our executive compensation as part of our
annual budget review and annual performance review processes. As
part of this review, we will determine the operating metrics and
non-financial elements used to measure our performance and to
compensate our executive officers. This review is based on our
knowledge of how other retail apparel companies measure their
executives performance and on the key operating metrics
that are critical in our effort to increase the value of our
company.
Role
of Executive Officers in Executive Compensation
Our Compensation Committee determines the compensation for our
executive officers, based in part on recommendations from our
Chief Executive Officer.
Elements
of Compensation
Our executive officer compensation consists of the following
components:
|
|
|
|
|
base salary;
|
|
|
|
annual cash incentives linked to corporate and individual
performance;
|
|
|
|
long-term incentive awards in the form of equity-based
compensation; and
|
|
|
|
other executive benefits such as reimbursement of relocation and
moving expenses, temporary housing, health benefits, life
insurance, and tax consulting services.
|
Our Compensation Committees policies with respect to each
of these elements, including the basis for the compensation
awarded to our executive officers, are discussed below. In
addition, while each element of compensation described below is
considered separately, our Compensation Committee takes into
account the full compensation package for each individual in
determining total compensation.
Base
Salary
The base salary established for each of our executive officers
is intended to reflect each individuals responsibilities,
experience, prior performance and other discretionary factors
deemed relevant by our Compensation Committee and Board. Base
salary is also designed to provide our executive officers with
steady cash flow during the course of the fiscal year that is
not contingent on short-term variations in our operating
performance. We believe that executive base salaries targeted
at, or slightly above, the midpoint of the market is a key
factor in
14
attracting and retaining the services of qualified executives.
Our Compensation Committee determines market level based on our
executives experience in the industry with reference to
the base salaries of similarly situated executives in other
companies of similar size and stage of development operating in
the retail apparel industry, as provided in publicly available
documents.
In considering whether to adjust base salary from year to year,
our Compensation Committee considers the following:
|
|
|
|
|
corporate performance and the performance of each individual
executive officer;
|
|
|
|
new responsibilities delegated to each executive officer during
the year;
|
|
|
|
any contractual agreements with our executive officers; and
|
|
|
|
the competitive marketplace for executive talent, including a
comparison of base salaries for comparable positions at other
similarly situated companies operating in the retail apparel
industry.
|
To help guide the components and levels of our executive
compensation, the Compensation Committee engaged the Hay Group
in January 2008. The Hay Group assisted the Compensation
Committee with development of a peer group of companies, and
reviewed compensation practices of this peer group to assist the
Compensation Committee with development of the primary elements
of our executive compensation program. The Compensation
Committee has based fiscal 2009 executive compensation in part
on the analysis conducted by the Hay Group.
With these principles in mind, base salaries are reviewed at
least annually by our Compensation Committee and the Board, and
may be adjusted from time to time based on the results of this
review.
Fiscal
2009, 2008, and 2007 Base Salaries
As described elsewhere in this Proxy Statement, Mr. Meers
resigned as our Chief Executive Officer, effective June 30,
2008, and Ms. Day was appointed as our new Chief Executive
Officer, effective June 30, 2008.
In light of the current economic environment, including the
global economic crisis and the pervasive uncertainty surrounding
2009 revenue expectations, and based on the overall performance
of the company in fiscal 2008, our Compensation Committee
determined in March 2009 that, other than with respect to
Mr. Wilson, none of our named executive officers will
receive a base salary increase for fiscal 2009. In early 2009,
the Compensation Committee engaged The Hay Group to analyze
non-executive chairman compensation. The Compensation Committee
considered the compensation practices at a number of retailers
and wholesalers, including Bon-Ton Stores, Charlotte Russe,
Columbia Sportswear, Dress Barn, Guess, Hanes Brands, Jaclyn,
Jones Apparel, Movado Group, Retail Ventures, Show Carnival,
Syms, Timberland and Zumiez. Based on this analysis the
Compensation Committee determined that it was appropriate to
increase Mr. Wilsons base salary for fiscal 2009 by 10%,
to $275,000, to bring his base salary more in line with peer
group averages for his position as Chairman of the Board and
Chief Product Designer.
The following table sets forth the fiscal 2009, 2008 and 2007
base salaries (in Canadian dollars) for each of our executive
officers:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal 2009
|
|
|
Fiscal 2008
|
|
|
Fiscal 2007
|
|
|
|
Base Salary
|
|
|
Base Salary
|
|
|
Base Salary
|
|
Name
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
Christine M. Day(1)
|
|
|
550,000
|
|
|
|
550,000
|
|
|
|
365,000
|
|
John E. Currie
|
|
|
375,000
|
|
|
|
375,000
|
|
|
|
325,000
|
|
Dennis J. Wilson
|
|
|
275,000
|
|
|
|
250,000
|
|
|
|
250,000
|
|
Sheree Waterson(2)
|
|
|
350,000
|
|
|
|
350,000
|
|
|
|
|
|
Robert Meers(3)
|
|
|
|
|
|
|
600,000
|
|
|
|
600,000
|
|
Mike J. Tattersfield(4)
|
|
|
|
|
|
|
|
|
|
|
392,111
|
|
|
|
|
(1) |
|
Ms. Day became Chief Executive Officer of the company
effective June 30, 2008. |
|
(2) |
|
Ms. Waterson became Executive Vice President, General
Merchandise Management and Sourcing effective June 16, 2008. |
|
(3) |
|
Mr. Meers retired from the company effective June 30,
2008. |
|
(4) |
|
Mr. Tattersfields employment terminated effective
April 4, 2008. |
15
Annual
Cash Incentives
Annual Discretionary Cash Performance
Bonus. Our Board has the authority and
discretion to award annual cash performance bonuses to our
executive officers. The annual performance bonuses are intended
to compensate officers for achieving financial, operational and
strategic goals and for achieving individual annual performance
objectives. These annual bonus amounts are intended to reward
both overall company and individual performance during the year
and, as such, can be highly variable from year to year. Cash
bonuses, as opposed to equity grants, are designed to more
immediately reward annual performance against key short-term
performance metrics. We believe that establishing cash bonus
opportunities is an important factor in both attracting and
retaining the services of qualified and highly skilled
executives.
Pursuant to the terms of their employment agreement or offer
letter with us, each of Mr. Wilson, Ms. Day,
Mr. Currie and Ms. Waterson are eligible to receive
annual bonuses of up to 75%, 75%, 60% and 60%, respectively, of
their base salaries, if specified corporate and individual
performance goals, as established by our Compensation Committee,
are met for the year.
During the first quarter of each fiscal year, our Compensation
Committee reviews our performance relative to the achievement of
our financial, operational and strategic goals established at
the beginning of the preceding fiscal year and each
executives individual performance and contribution to
achieving those goals in order to determine the amount of bonus,
if any, payable to our executive officers. In making its
determination, the Compensation Committee may make adjustments
to the corporate and individual performance goals to take into
account certain extraordinary
and/or
non-recurring events such as acquisitions, dispositions, and
other corporate transactions that could have an effect on our
operating budget during the preceding fiscal year.
2008 Executive Bonus Plan. In April
2008, our Compensation Committee adopted our 2008 Executive
Bonus Plan for our executive officers (in positions of Executive
Vice President and above), including our named executive
officers, with respect to performance during fiscal 2008, or the
2008 Plan. Because the diluted earnings per share
hurdle of $0.68 was not satisfied, which was the
minimum condition to be achieved before granting any bonuses
under the 2008 Plan, the Compensation Committee determined that
no bonus payments would be made under the 2008 Plan. This is
consistent with our philosophy that a portion of executive
bonuses be tied to achievement of company performance measures.
We believe this aligns the interests of our executives with
those of our stockholders in achieving company operating goals.
Pursuant to the terms of the 2008 Plan, had the threshold for
diluted earnings per share of $0.68 been achieved, the
Compensation Committee would have then evaluated the
companys overall financial performance against the
following four financial performance goals for fiscal 2008:
diluted earnings per share, which means our earnings per share
calculated using our fully diluted shares outstanding;
comparable store sales, which means a comparison of the sales
from year-to-year of our retail stores that have been opened for
one year or longer; operating margin, which means our operating
income divided by our revenue; and forward weeks sales, which
means a calculation of the bill of materials inventory divided
by product costs for the third and fourth fiscal quarters of
fiscal 2008. Additionally, the Compensation Committee would have
analyzed each executive officers achievement of his or her
individual performance goals. The Compensation Committee
approved the weighting of the financial performance goals and
individual performance goals for executives under the 2008 Plan
so that 90% of the target bonus would be based on the
achievement of financial performance goals and 10% would be
based on the achievement of individual performance goals.
The weighting of each financial performance goal comprising 90%
of the target bonus and a range of potential payouts resulting
from the achievement of each financial performance goal were
approved by the Compensation Committee in April 2008.
|
|
|
|
|
|
|
|
|
|
|
|
|
Minimum Company
|
|
|
|
|
Performance
|
|
|
|
|
to Achieve
|
Company Performance Measure
|
|
Weight
|
|
100% Bonus
|
Diluted Earnings Per Share
|
|
|
40.0
|
%
|
|
$
|
0.74
|
|
Comparable Store Sales
|
|
|
16.67
|
%
|
|
|
12
|
%
|
Operating Margin
|
|
|
16.67
|
%
|
|
|
20
|
%
|
Forward Weeks Sales
|
|
|
16.67
|
%
|
|
|
16
|
%
|
16
The Compensation Committee also determined in April 2008 the
amount of the target bonuses that would have been paid to each
plan participant if, following achievement of the minimum
diluted earnings per share of $0.68, the financial performance
goals and individual performance goals were met, and the method
by which such amounts would have been calculated. The terms of
the 2008 Plan permitted bonus payouts in excess of the target
bonus amount, based on achievement of corporate performance
goals, up to a maximum of 120% of the target bonus amount.
2009 Executive Bonus Plan. In March
2009, our Board, upon the recommendation of the Compensation
Committee, adopted our 2009 Executive Bonus Plan for our
executive officers (in positions of Executive Vice President and
above) with respect to performance during fiscal 2009, or the
2009 Plan. Taking into account the anticipated challenging
global economic environment throughout fiscal 2009, the
Compensation Committee determined that the corporate performance
goals under the 2009 Plan should be adjusted from those under
the 2008 Plan to reflect our priorities for a difficult
environment over the coming year. While the 2009 Plan retains
the same 90%/10% weighting of the financial and individual
performance goals, the specific financial performance goals and
their respective weightings have been modified. Additionally, no
bonus will be paid under the 2009 Plan unless a predetermined
level of positive cash flow is achieved. Set forth below is a
summary of the material terms of the 2009 Plan.
Administration. The 2009 Plan will be
administered by the Compensation Committee. Among other things,
the Compensation Committee has the authority to select
participants in the 2009 Plan from among the companys
executive officers and to determine the performance goals,
target amounts and other terms and conditions of awards under
the 2009 Plan. The Compensation Committee, in conjunction with
the companys Chief Executive Officer and Chief Financial
Officer, also has the authority to establish and amend rules
relating to the administration of the 2009 Plan. All decisions
made by the Compensation Committee in connection with the 2009
Plan will be made in the Compensation Committees sole
discretion and will be final and conclusive.
Eligibility. The companys employees
serving in positions of Executive Vice President and above, and
other senior officers of the company, as designated by the
Compensation Committee, are eligible to participate in the 2009
Plan. The Chief Executive Officer has the authority to recommend
participants. The Compensation Committee has the sole authority
to designate participants. Eligibility to participate in the
2009 Plan will cease upon termination of the participants
employment, withdrawal of designation by the Compensation
Committee, transfer of the participant to a position compensated
otherwise than as provided in the 2009 Plan, termination of the
plan by the company, or if the participant engaged, directly or
indirectly, in any activity which is competitive with any
company activity.
Terms of Awards. Awards under the 2009 Plan
will be payable upon the achievement during fiscal 2009 of
specified financial and individual performance goals. After the
end of the performance period, the Compensation Committee will
certify the extent to which the performance goals are achieved
and determine the amount of any bonuses that are payable,
provided that the Compensation Committee will have the
discretion to determine that the actual amount paid with respect
to an award will be less than (but not greater than) the amount
calculated under the 2009 Plan.
Financial Performance Goals. Pursuant to the
terms of the 2009 Plan, the Compensation Committee will evaluate
the companys overall financial performance against the
following four financial performance goals for fiscal 2009:
diluted earnings per share; company revenue; gross margin; and
inventory turns. The Compensation Committee has set performance
goals for each participant based on the financial performance
goals, together with related target awards. The Compensation
Committee believes that the approved financial goals are
reasonable in light of the companys historic growth and
current business strategy, and as such the committee anticipates
achievement levels consistent with those achieved historically.
Individual Performance Goals. The 2009 Plan
provides further that the remaining portion of the total bonus
payout available to participants will be based on achievement
with individual performance goals. Individual performance goals
may differ from participant to participant.
Target Bonus Amounts. Pursuant to the terms of
the 2009 Plan, the Compensation Committee has determined the
amount of the target bonuses that will be paid to each plan
participant if the financial performance goals and individual
performance goals are met, and the method by which such amounts
will be calculated. The terms of the 2009 Plan permit bonus
payouts in excess of the target bonus amount, up to a maximum of
120% of the target bonus amount.
17
As reported in the companys Current Report on
Form 8-K
filed with the SEC on March 31, 2009, the Compensation
Committee approved the weighting of the financial performance
goals and individual performance goals so that 90% of the target
bonus is based on the achievement of financial performance goals
and 10% is based on the achievement of individual performance
goals. Any bonuses paid under the 2009 Plan will be paid within
approximately 75 days after the companys fiscal year
end.
Equity-Based Compensation. We believe
that equity awards are an important component of our executive
compensation program and that providing a significant portion of
our executive officers total compensation package in
equity-based compensation aligns the incentives of our
executives with the interests of our stockholders and with our
long-term success. Additionally, we believe that equity-based
awards enable us to attract, motivate, retain and adequately
compensate executive talent. To that end, we award equity-based
compensation in the form of options to purchase our Common
Stock. Our Compensation Committee believes stock options provide
executives with a significant long-term interest in our success
by rewarding the creation of stockholder value over time.
Generally, each executive officer is provided with a stock
option grant when they join our company based upon their
position with us and their relevant prior experience. These
inducement grants generally vest in four equal annual
installments beginning on the first anniversary of the date of
grant to encourage executive longevity and to compensate our
executive officers for their contribution over the long-term.
Stock options are granted with an exercise price equal to the
closing price of our Common Stock on the date of grant.
Our Compensation Committee determines the size, terms and
conditions of option grants to our executive officers in
accordance with the terms of the applicable plan. Equity grants
made to our executive officers are recommended by our
Compensation Committee and approved by our Board, or may be
approved directly by our Compensation Committee.
Severance Arrangements. We have entered
into employment agreements or offer letters with each of
Mr. Wilson, Ms. Day and Ms. Waterson that provide
them with certain severance rights. These agreements were made
in order to attract and retain the services of these particular
executives. The agreements were the result of negotiations
between the parties, which we believe resulted in severance
rights that are commercially reasonable and typical of the
rights afforded to similarly situated executives in other
companies of similar size and stage of development operating in
the retail apparel industry.
In each case, the severance payments are contingent on the
occurrence of certain termination (or constructive termination)
events and require the executive to execute a release of claims
in our favor. These severance arrangements are intended to
provide the executives with a sense of security in making the
commitment to dedicate his or her professional career to our
success. These severance rights do not differ based on whether
or not we experience a change in control. The specific terms of
these arrangements are discussed in detail below under the
heading Agreements with Named Executive
Officers.
Other Benefits. Our executive
compensation program includes limited and other benefits. The
cost of providing these and other benefits to the named
executive officers is included in the amounts shown in the
All Other Compensation column of the Summary
Compensation Table on page 20 and detailed in footnote
4 to such table. We believe the executive benefits we
provide are representative of benefits offered by the companies
with which we compete for executive talent, and therefore
offering these benefits serves the objective of attracting and
retaining top executive talent. A discussion and analysis of
such benefits follows.
|
|
|
|
|
Relocation Package. Under limited
circumstances, we provide certain relocation benefits to
executive officers who relocate to Canada from another country
for work on the companys behalf. Ms. Day and
Ms. Waterson both relocated to Canada from the United
States for purposes of working for the company. Each of
Ms. Day and Ms. Waterson received tax preparation
assistance, reimbursement of moving expenses and reimbursement
of temporary housing expenses.
|
|
|
|
Housing and Living Expenses. We agreed to pay
certain housing and living expenses to certain of our named
executive officers in connection with their relocation to Canada.
|
18
|
|
|
|
|
Executive Life and Long-Term Disability
Insurance. We provide life and long-term
disability insurance to our named executive officers. We believe
this is a standard benefit offered to executive-level management
by comparator group companies.
|
We have no current plans to make changes to the employment
agreement of our Chief Product Designer, Chief Executive Officer
or Executive Vice President, General Merchandise Management and
Sourcing, or to the offer letter of our Chief Financial Officer
(except as required by law or as required to clarify the
benefits to which our executive officers are entitled as set
forth herein) or to levels of benefits and perquisites provided
to our executive officers.
Tax
and Accounting Considerations Affecting Executive
Compensation
We structure our compensation program in a manner that is
consistent with our compensation philosophy and objectives.
However, while it is our Compensation Committees general
intention to design the components of our executive compensation
program in a manner that is tax efficient for both us and our
executives, there can be no assurance that our Compensation
Committee will always approve compensation that is tax
advantageous for us. Additionally, we do not currently maintain
a committee of outside directors for the purposes of
Section 162(m) under the Internal Revenue Code and,
accordingly, any compensation we grant over a $1 million
threshold may be subject to a deduction limitation.
Similarly, we endeavor to design our equity incentive awards
conventionally, so that they are accounted for under standards
governing equity-based arrangements and, more specifically, so
that they are afforded fixed treatment under those standards.
19
SUMMARY
COMPENSATION TABLE
The following table sets forth summary information concerning
the compensation of our principal executive officer and
principal financial officer and each of our next four most
highly compensated executive officers during fiscal 2008, 2007,
and 2006. We refer to these persons as our named executive
officers. The dollar amounts shown were converted to
U.S. dollars from Canadian dollars using the average of the
exchange rates on the last business day of each month during the
applicable fiscal year. Applying this formula to fiscal 2008,
2007, and 2006, CDN$1.00 was equal to US$0.928, US$0.947, and
US$0.882, respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option
|
|
|
Incentive Plan
|
|
|
All Other
|
|
|
|
|
|
|
Fiscal
|
|
|
Salary
|
|
|
Bonus
|
|
|
Awards
|
|
|
Compensation
|
|
|
Compensation
|
|
|
Total
|
|
Name and Principal Position
|
|
Year
|
|
|
($)
|
|
|
($)(1)
|
|
|
($)(2)
|
|
|
($)(3)
|
|
|
($)(4)
|
|
|
($)
|
|
|
Dennis J. Wilson,
Chairman and Chief Product Designer(5)
|
|
|
2008
|
|
|
|
240,962
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18
|
|
|
|
240,980
|
|
|
|
|
2007
|
|
|
|
236,750
|
|
|
|
|
|
|
|
|
|
|
|
198,870
|
|
|
|
|
|
|
|
435,620
|
|
|
|
|
2006
|
|
|
|
220,500
|
|
|
|
70,736
|
|
|
|
|
|
|
|
|
|
|
|
36,929
|
|
|
|
328,164
|
|
Christine M. Day,
Chief Executive Officer(6)
|
|
|
2008
|
|
|
|
448,019
|
|
|
|
|
|
|
|
815,933
|
|
|
|
|
|
|
|
63,586
|
|
|
|
1,263,952
|
|
|
|
|
2007
|
|
|
|
27,934
|
|
|
|
|
|
|
|
41,406
|
|
|
|
|
|
|
|
|
|
|
|
69,340
|
|
John E. Currie,
Chief Financial Officer(7)
|
|
|
2008
|
|
|
|
332,884
|
|
|
|
|
|
|
|
722,625
|
|
|
|
|
|
|
|
18
|
|
|
|
1,055,527
|
|
|
|
|
2007
|
|
|
|
307,775
|
|
|
|
|
|
|
|
722,628
|
|
|
|
208,671
|
|
|
|
|
|
|
|
1,239,074
|
|
|
|
|
2006
|
|
|
|
20,580
|
|
|
|
|
|
|
|
55,434
|
|
|
|
|
|
|
|
|
|
|
|
76,014
|
|
Sheree Waterson,
Executive Vice President, General Merchandise Management and
Sourcing(8)
|
|
|
2008
|
|
|
|
192,235
|
|
|
|
|
|
|
|
100,862
|
|
|
|
|
|
|
|
45,870
|
|
|
|
293,097
|
|
Robert Meers,
former Chief Executive Officer(9)
|
|
|
2008
|
|
|
|
248,458
|
|
|
|
|
|
|
|
1,029,684
|
|
|
|
|
|
|
|
104,509
|
|
|
|
1,382,651
|
|
|
|
|
2007
|
|
|
|
568,200
|
|
|
|
|
|
|
|
997,548
|
|
|
|
477,288
|
|
|
|
44,349
|
|
|
|
2,087,385
|
|
|
|
|
2006
|
|
|
|
529,200
|
|
|
|
188,572
|
|
|
|
624,996
|
|
|
|
|
|
|
|
41,331
|
|
|
|
1,384,099
|
|
Mike J. Tattersfield,
former Chief Operating Officer(10)
|
|
|
2008
|
|
|
|
76,987
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
394,200
|
|
|
|
|
|
|
|
|
2007
|
|
|
|
371,224
|
|
|
|
|
|
|
|
843,072
|
|
|
|
227,189
|
|
|
|
17,273
|
|
|
|
1,458,758
|
|
|
|
|
2006
|
|
|
|
28,820
|
|
|
|
106,449
|
|
|
|
80,842
|
|
|
|
|
|
|
|
12,882
|
|
|
|
228,993
|
|
|
|
|
(1) |
|
For fiscal 2006, bonuses consist of: (a) payments made
pursuant to discretionary performance bonuses to the following
individuals in the following amounts:
Mr. Wilson $70,736, Mr. Meers
$188,572 and Mr. Tattersfield $106,449. |
|
(2) |
|
This column reflects the dollar amount recognized for financial
accounting reporting purposes for the fiscal year in accordance
with SFAS 123(R). See the Grants of Plan Based Awards
Table for information on stock options granted to our
named executive officers in fiscal 2008. These amounts reflect
our annual accounting expense for these awards, and do not
correspond to the actual value that will be realized by the
executive officer. See the notes to our financial statements
contained in our Annual Report on
Form 10-K
for the fiscal year ended February 1, 2009 for a discussion
of all assumptions made by us in determining the
SFAS 123(R) values of our equity awards. |
|
(3) |
|
Non-Equity Incentive Plan Compensation includes the annual bonus
paid to certain officers of the company. For fiscal 2008 the
company did not achieve its bonus targets and therefore a bonus
was not paid out to these officers. For fiscal 2007 bonuses were
paid out to the following individuals in the following amounts:
Mr. Wilson $198,870,
Mr. Currie $208,671, Mr. Meers
$477,288 and Mr. Tattersfield $227,189. |
20
|
|
|
(4) |
|
For fiscal 2008, all other compensation consists of:
(a) life insurance premiums paid on behalf of the following
individuals in the following amounts:
Mr. Wilson $18, Mr. Currie
$18, and Mr. Tattersfield $928,
(b) employee moving allowances paid on behalf of the
following individuals in the following amounts:
Ms. Day $63,586 and
Ms. Waterson $45,870, (c) payments made on
behalf of Mr. Meers for housing and other living expenses
in the amount of $70,990 and for expenses associated with a
vehicle lease in the amount of $41,609 and (d) severance
payments made to Mr. Tattersfield of $393,727. For fiscal
2007, all other compensation consists of payments made on
behalf of Mr. Meers for housing and other living expenses
in the amount of $28,960 and for expenses associated with a
vehicle lease in the amount of $15,389. For fiscal 2006, all
other compensation consists of: (a) imputed interest in
connection with an interest free loan we made to Mr. Wilson
in the amount of $36,917; and (b) life insurance premiums
paid on behalf of the following individuals in the following
amounts: Mr. Wilson $12, and
Mr. Tattersfield $3, and (c) payments made
on behalf of Mr. Meers for housing and other living
expenses in the amount of $28,823 and for expenses associated
with a vehicle lease in the amount of $12,508. |
|
(5) |
|
Mr. Wilsons 2007 and 2006 bonuses related solely to a
discretionary performance bonus. |
|
(6) |
|
Ms. Day joined us as our Executive Vice President, Retail
Operations, in January 2008 and has served as our Chief
Executive Officer since June 2008. |
|
(7) |
|
Mr. Currie joined us as our Chief Financial Officer in
January 2007. |
|
(8) |
|
Ms. Waterson joined us as our Executive Vice President,
General Merchandise Management and Sourcing in June 2008. |
|
(9) |
|
Mr. Meers joined us as our Chief Executive Officer in
December 2005 and retired in June 2008. |
|
(10) |
|
Mr. Tattersfield became our Chief Operating Officer in
November 2006 and his employment terminated in April 2008. |
2008
GRANTS OF PLAN-BASED AWARDS
The following table sets forth each grant of an award made to a
named executive officer in fiscal 2008.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Future
|
|
|
|
Grant Date
|
|
|
|
|
Payouts Under
|
|
Exercise or
|
|
Fair Value of
|
|
|
|
|
Equity Incentive
|
|
Base Price of
|
|
Stock and
|
|
|
|
|
Plan Awards Target
|
|
Option Awards
|
|
Option Awards
|
Name
|
|
Grant Date(1)
|
|
(#)
|
|
($/Sh)
|
|
($)(2)
|
|
Christine M. Day
|
|
|
08/01/08
|
|
|
|
83,333
|
|
|
|
22.02
|
|
|
|
866,786
|
|
|
|
|
09/02/08
|
|
|
|
83,333
|
|
|
|
18.91
|
|
|
|
762,473
|
|
|
|
|
10/01/08
|
|
|
|
83,334
|
|
|
|
23.74
|
|
|
|
934,503
|
|
|
|
|
01/07/09
|
|
|
|
41,667
|
|
|
|
8.17
|
|
|
|
152,123
|
|
Sheree Waterson
|
|
|
06/16/08
|
|
|
|
45,000
|
|
|
|
28.47
|
|
|
|
605,170
|
|
|
|
|
(1) |
|
The above granted stock options will vest in 25% installments on
the four anniversary dates following the grant date. |
|
(2) |
|
This column reflects the fair value of the option granted in
accordance with SFAS 123(R). See the notes to our financial
statements contained in our Annual Report on
Form 10-K
for the fiscal year ended February 1, 2009 for a discussion
of all assumptions made by us in determining the
SFAS 123(R) values of our equity awards. |
21
2008
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END
The following table sets forth unexercised stock options, stock
that has not yet vested and equity incentive plan awards for
each named executive officer outstanding as of the fiscal year
ended February 1, 2009.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Number of
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities
|
|
|
Securities
|
|
|
|
|
|
|
|
|
|
|
|
|
Underlying
|
|
|
Underlying
|
|
|
Option
|
|
|
|
|
|
|
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
Exercise
|
|
|
Option
|
|
|
|
|
|
|
Options (#)
|
|
|
Options (#)
|
|
|
Price
|
|
|
Expiration
|
|
Name
|
|
Grant Date
|
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
($)
|
|
|
Date
|
|
|
Christine M. Day
|
|
|
01/18/08
|
(1)
|
|
|
31,250
|
|
|
|
93,750
|
|
|
|
33.66
|
|
|
|
01/18/18
|
|
|
|
|
08/01/08
|
(1)
|
|
|
|
|
|
|
83,333
|
|
|
|
22.02
|
|
|
|
08/01/18
|
|
|
|
|
09/02/08
|
(1)
|
|
|
|
|
|
|
83,333
|
|
|
|
18.91
|
|
|
|
09/02/18
|
|
|
|
|
10/01/08
|
(1)
|
|
|
|
|
|
|
83,334
|
|
|
|
23.74
|
|
|
|
10/01/18
|
|
|
|
|
01/07/09
|
(1)
|
|
|
|
|
|
|
41,667
|
|
|
|
8.17
|
|
|
|
01/07/19
|
|
Dennis J. Wilson
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John E. Currie
|
|
|
01/03/07
|
(1)
|
|
|
16,084
|
|
|
|
32,167
|
|
|
|
0.49
|
|
|
|
01/03/17
|
|
|
|
|
01/03/07
|
(1)
|
|
|
110,897
|
|
|
|
146,501
|
|
|
|
0.60
|
|
|
|
01/03/17
|
|
Sheree Waterson
|
|
|
06/16/08
|
(1)
|
|
|
|
|
|
|
45,000
|
|
|
|
28.47
|
|
|
|
06/16/18
|
|
Robert Meers
|
|
|
07/03/06
|
(2)
|
|
|
37,635
|
|
|
|
|
|
|
|
0.49
|
|
|
|
03/15/09
|
|
|
|
|
07/03/06
|
(2)
|
|
|
171,407
|
|
|
|
|
|
|
|
0.60
|
|
|
|
03/15/09
|
|
|
|
|
(1) |
|
The above granted stock options vest in 25% installments on the
four anniversary dates following the grant date. |
|
(2) |
|
Mr. Meers options were fully vested on May 6,
2008 pursuant to the terms of that certain Retirement,
Transition and Release Agreement between Mr. Meers and the
company, dated May 6, 2008. |
2008
OPTION EXERCISES
The following table provides information regarding stock options
exercised by our named executive officers during fiscal 2008.
Value realized is calculated by subtracting the aggregate
exercise price of the options exercised from the aggregate
market value of the shares of common stock acquired on the date
of exercise.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
|
|
|
|
Number of Shares
|
|
|
|
|
|
|
|
|
|
Acquired on
|
|
|
Value Realized on
|
|
Name
|
|
Grant Date
|
|
|
Exercise (#)
|
|
|
Exercise ($)
|
|
|
Robert Meers
|
|
|
01/27/06
|
|
|
|
1,951,059
|
|
|
|
40,434,231
|
|
John E. Currie
|
|
|
01/03/07
|
|
|
|
51,687
|
|
|
|
1,278,479
|
|
Mike J. Tattersfield
|
|
|
12/27/06
|
|
|
|
104,222
|
|
|
|
3,509,953
|
|
22
DIRECTOR
COMPENSATION
General
Description of Director Compensation
In light of the current economic environment, including the
global economic crisis and the pervasive uncertainly surrounding
2009 revenue expectations, it is expected that, in line with the
Compensations Committees decision to not increase base
salaries for our named executive officers, we would also not
increase director compensation. Each of our non-employee
directors receives compensation for participating on our Board
comprised of an annual retainer and fees for each meeting
attended based on the following schedule:
|
|
|
|
|
|
|
|
|
|
|
Fiscal 2009
|
|
|
Fiscal 2008
|
|
|
Meeting Attendance
|
|
|
|
|
|
|
|
|
In-person
|
|
$
|
1,000
|
|
|
$
|
1,000
|
|
Telephonic
|
|
|
500
|
|
|
|
500
|
|
Committee
|
|
|
500
|
|
|
|
500
|
|
Retainers
|
|
|
|
|
|
|
|
|
All directors
|
|
|
30,000
|
|
|
|
30,000
|
|
Additional Retainers
|
|
|
|
|
|
|
|
|
Chairman
|
|
|
30,000
|
|
|
|
30,000
|
|
Audit Committee Chair
|
|
|
20,000
|
|
|
|
20,000
|
|
Compensation Committee Chair
|
|
|
10,000
|
|
|
|
10,000
|
|
Lead Director
|
|
|
10,000
|
|
|
|
10,000
|
|
In addition to the amounts set forth in the table above, each
non-employee director annually shall be entitled to equity
compensation consisting of (1) an annual grant of a
restricted stock award under our 2007 Equity Incentive Plan
having a fair value at the time of grant equal to $30,000,
subject to one-year vesting, and (2) an annual option grant
under our 2007 Equity Incentive Plan having a fair value at the
time of grant equal to $80,000 subject to annual four-year
vesting on each anniversary of the grant date. Such annual
non-employee director grants will be made at the conclusion of
each annual meeting of stockholders if the director is then a
member of our Board. Stock option grants have historically had a
10-year
term. The Board will determine the appropriate term of the 2009
non-employee director grants at the time of grant. The
non-employee director grants will have an exercise price equal
to the fair market value on the date of grant.
The following table sets forth the amount of compensation we
paid to each of our directors for fiscal 2008.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fees Earned
|
|
|
|
|
|
|
|
|
|
|
|
|
or Paid in
|
|
|
Stock
|
|
|
Option
|
|
|
|
|
|
|
Cash
|
|
|
Awards
|
|
|
Awards
|
|
|
Total
|
|
Name
|
|
($)
|
|
|
($)(1)
|
|
|
($)(2)
|
|
|
($)
|
|
|
Michael Casey
|
|
|
55,000
|
|
|
|
35,552
|
|
|
|
28,900
|
|
|
|
119,452
|
|
Steven J. Collins
|
|
|
50,500
|
|
|
|
32,503
|
|
|
|
33,328
|
|
|
|
116,331
|
|
RoAnn Costin
|
|
|
40,500
|
|
|
|
32,503
|
|
|
|
33,328
|
|
|
|
106,331
|
|
R. Brad Martin
|
|
|
47,000
|
|
|
|
32,503
|
|
|
|
33,328
|
|
|
|
112,831
|
|
Martha A.M. Morfitt
|
|
|
7,093
|
|
|
|
2,342
|
|
|
|
1,562
|
|
|
|
10,997
|
|
David M. Mussafer
|
|
|
59,000
|
|
|
|
32,503
|
|
|
|
33,328
|
|
|
|
124,831
|
|
Rhoda M. Pitcher
|
|
|
39,000
|
|
|
|
32,503
|
|
|
|
33,328
|
|
|
|
104,831
|
|
Thomas G. Stemberg
|
|
|
48,500
|
|
|
|
32,503
|
|
|
|
33,328
|
|
|
|
114,331
|
|
|
|
|
(1) |
|
The amounts in this column represent the expense recognized in
fiscal 2008 by the company in accordance with SFAS 123(R).
See the notes to our financial statements contained in our
Annual Report on
Form 10-K
for the fiscal year ended February 1, 2009 for a discussion
of all assumptions made by us in determining the
SFAS 123(R) values of our stock awards. |
23
|
|
|
(2) |
|
The amounts in this column represent the expense recognized in
fiscal 2008 by the company in accordance with SFAS 123(R).
See the notes to our financial statements contained in our
Annual Report on
Form 10-K
for the fiscal year ended February 1, 2009 for a discussion
of all assumptions made by us in determining the
SFAS 123(R) values of our equity awards. |
The following table summarizes director options and restricted
shares granted in fiscal 2008:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grant Date Fair
|
|
|
|
|
Securities
|
|
Value of Securities
|
|
|
Securities
|
|
Underlying
|
|
Underlying Options
|
|
|
Underlying
|
|
Restricted Stock
|
|
and Restricted Stock
|
|
|
Option Granted
|
|
Award Granted
|
|
Awards Granted
|
|
|
During Fiscal 2008
|
|
During Fiscal 2008
|
|
During Fiscal 2008(1)
|
Name
|
|
(#)
|
|
(#)
|
|
($)
|
|
Michael Casey
|
|
|
5,926
|
|
|
|
1,050
|
|
|
|
110,000
|
|
Steven J. Collins
|
|
|
5,926
|
|
|
|
1,050
|
|
|
|
110,000
|
|
RoAnn Costin
|
|
|
5,926
|
|
|
|
1,050
|
|
|
|
110,000
|
|
R. Brad Martin
|
|
|
5,926
|
|
|
|
1,050
|
|
|
|
110,000
|
|
Martha A.M. Morfitt
|
|
|
11,778
|
|
|
|
1,971
|
|
|
|
51,534
|
|
David M. Mussafer
|
|
|
5,926
|
|
|
|
1,050
|
|
|
|
110,000
|
|
Rhoda M. Pitcher
|
|
|
5,926
|
|
|
|
1,050
|
|
|
|
110,000
|
|
Thomas G. Stemberg
|
|
|
5,926
|
|
|
|
1,050
|
|
|
|
110,000
|
|
|
|
|
(1) |
|
The amounts in this column represent the fair value of the
options and restricted stock awards granted in fiscal 2008 by
the company in accordance with SFAS 123(R). See the notes
to our financial statements contained in our Annual Report on
Form 10-K
for the fiscal year ended February 1, 2009 for a discussion
of all assumptions made by us in determining the
SFAS 123(R) values of our equity awards. |
Agreements
with Named Executive Officers
Christine
M. Day
On August 1, 2008, we entered into an Executive Employment
Agreement with Christine M. Day, our Chief Executive Officer.
The term of Ms. Days employment agreement continues
until either she or we terminate her employment. Under the terms
of her employment agreement, Ms. Day will receive an annual
base salary of CDN$550,000. Ms. Day is also eligible to
receive an annual performance bonus of 75% of her base salary
for the applicable fiscal year, if specified corporate and
individual performance goals are met for that year. Pursuant to
the terms of her employment agreement, the company granted
Ms. Day options to purchase 250,000 shares of Common
Stock in connection with her appointment to the position of
Chief Executive Officer, 83,333 of which were granted on
August 1, 2008, 83,333 of which were granted on
September 2, 2008 and 83,334 of which were granted on
October 1, 2008. Additionally, Ms. Day retained the
right to receive those stock options that we previously agreed
to grant to her under the terms of a prior agreement, which
include an option to purchase 125,000 shares of Common
Stock in connection with her initial hire granted on
January 18, 2008, an option to purchase 41,667 shares
of Common Stock granted on January 7, 2009, and an
agreement to grant her an option to purchase 41,667 shares
of Common Stock on January 7, 2010, and 41,666 shares
of Common Stock on January 7, 2011. All options have or
will have an exercise price equal to the fair market value of
our Common Stock on the date of grant and will vest 25% per year
for four years on each anniversary of the effective grant date
of the option.
Ms. Day agrees to serve as a director of the company and
its affiliates, and will not be entitled to additional
compensation for such positions. Upon the termination of her
employment agreement for any reason, Ms. Day agrees to
resign from all such director positions. Ms. Day further
covenants that she will not serve as a director of more than two
entities that are unrelated to the company, and agrees to obtain
the advance consent of the Board prior to commencing any such
service for an unrelated entity.
We will reimburse Ms. Day for all reasonable out-of-pocket
expenses and she is entitled to participate in the employee
benefit and fringe benefit arrangements generally available to
the companys senior executive employees. Additionally, we
will provide Ms. Day with benefit coverage for her
dependents up to a maximum amount of
24
US$12,000, and will also reimburse Ms. Day for the cost of
supplemental term life insurance up to a maximum amount of
US$17,500 per year.
Ms. Days employment may be terminated by Ms. Day
or by us at any time, with or without cause. In the event
Ms. Day voluntarily resigns or we terminate her employment
for cause, she will receive only her base salary then in effect
and benefits earned and payable as of the date of termination.
In the event we terminate Ms. Day without cause, and
subject to her compliance with the surviving terms of the
employment agreement and a non-compete, non-solicitation and
non-disparagement agreement and execution of a full release, she
will be entitled to a minimum of 12 months of base salary,
which amount will be increased by two additional months of base
salary for each additional year of service that Ms. Day
provides to the company, up to a maximum amount of
18 months of base salary.
For purposes of Ms. Days employment agreement with
us, termination for cause will be deemed to have
occurred upon the happening of any act, or failure to act, which
would constitute cause at common law, and includes:
|
|
|
|
|
conduct by, or authorized or permitted by, Ms. Day;
|
|
|
|
violation of any contractual or common law duty to the company;
|
|
|
|
unlawful activity;
|
|
|
|
activity contrary to professional or ethical standards; and
|
|
|
|
breach of the terms and conditions of the employment agreement
by Ms. Day which amount to just cause at common law.
|
Ms. Day is also obligated to maintain the confidentiality
of our proprietary information. In addition, Ms. Day agrees
that all rights to our proprietary information and intellectual
property are and will remain our sole and exclusive property.
Dennis
J. Wilson
On December 5, 2005, we entered into an Employment and
Restrictive Covenant Agreement with Dennis J. Wilson, our
Chairman and Chief Product Designer. The term of
Mr. Wilsons employment agreement continues until
either he or we terminate his employment. Under his employment
agreement, Mr. Wilson receives a minimum annual base salary
of CDN$250,000, which is subject to annual review and
adjustment. Mr. Wilsons base salary for fiscal 2008
was CDN$250,000 and will be CDN$275,000 for fiscal 2009.
Beginning in 2006, he became eligible for an annual bonus of up
to 75% of his base salary for the applicable fiscal year, if
specified corporate and individual performance goals, as
determined by our Board, are met for that year.
Mr. Wilson is entitled to participate in health insurance,
term life insurance, long term disability insurance and other
employee benefit arrangements generally available to our
employees, as well as to vacation time and reimbursement of his
reasonable business expenses.
If we terminate Mr. Wilsons employment without cause,
he will be entitled, provided he agrees to a mutually acceptable
release, to:
|
|
|
|
|
payment of all accrued and unpaid base salary through the date
of such termination;
|
|
|
|
payment for all unused vacation and personal days accrued
through the date of such termination; and
|
|
|
|
payment of any otherwise unpaid annual bonus payable with
respect to the fiscal year ending prior to the date of such
termination.
|
For purposes of Mr. Wilsons employment agreement with
us, termination for cause will be deemed to have
occurred upon the happening of the following:
|
|
|
|
|
theft, embezzlement, fraud, or similar acts of misconduct or
misappropriation by Mr. Wilson;
|
|
|
|
a material breach of any agreement with or duty owed to us;
|
25
|
|
|
|
|
a refusal to perform the lawful and reasonable directives of our
Board; and
|
|
|
|
any other conduct that would constitute just cause at common law.
|
If Mr. Wilsons employment is otherwise terminated,
including for cause or as a result of his death or disability,
then we will only be obligated to pay him accrued and unpaid
base salary through the date of such termination.
Mr. Wilson is obligated, for 24 months following his
termination, not to:
|
|
|
|
|
participate in a company that competes against us in the United
States or Canada;
|
|
|
|
become interested in a company that competes against us;
|
|
|
|
influence or attempt to influence any of our employees,
consultants, suppliers, licensors, licensees, contractors,
agents, strategic partners, distributors, customers or other
persons to terminate or modify such persons agreement or
arrangement with us or any of our affiliates; or
|
|
|
|
solicit for employment or employ or retain (or arrange to have
any other person or entity employ or retain) any person who has
been employed or retained by us or any of our affiliates within
the prior 12 months.
|
Mr. Wilson is also obligated to maintain the
confidentiality of our proprietary information. In addition,
Mr. Wilson agrees that all rights to our proprietary
information and intellectual property are and will remain our
sole and exclusive property.
John
E. Currie
On December 20, 2006, we entered into an offer letter with
John E. Currie, our Chief Financial Officer.
Mr. Curries employment with us began on
January 3, 2007. Under his offer letter, Mr. Currie
receives a minimum annual base salary of CDN$325,000, which is
subject to annual review and adjustment. Mr. Curries
base salary for fiscal 2008 was CDN$375,000. Mr. Currie is
also eligible to receive an annual performance bonus of at least
60% of his base salary for the applicable fiscal year, if
specified corporate and individual performance goals, as
determined by our Board or Compensation Committee, are met for
that year. We also granted Mr. Currie options to purchase
357,335 shares of our Common Stock at a weighted average
exercise price of $0.58 per share to vest 25% per year for four
years on each anniversary of grant date of the option.
Mr. Currie is entitled to participate in health insurance,
term life insurance, long-term disability insurance and other
employee benefit arrangements generally available to our
employees.
Sheree
Waterson
On May 6, 2008, we entered into an offer letter with Sheree
Waterson, our Executive Vice President, General Merchandise
Management and Sourcing. Under her offer letter,
Ms. Waterson receives an annual base salary of CDN$350,000,
which is subject to annual review and adjustment.
Ms. Waterson is also eligible to receive an annual
performance bonus of at least 60% of her base salary for the
applicable fiscal year, if specified corporate and individual
performance goals, as determined by our Board or Compensation
Committee, are met for that year. We also granted
Ms. Waterson options to purchase 90,000 shares of our
Common Stock, 45,000 of which were granted on June 16,
2008, and 45,000 of which will be granted on June 16, 2009.
All options have or will have an exercise price equal to the
fair market value of our Common Stock on the date of grant and
will vest 25% per year for four years on each anniversary of the
effective grant date of the option.
We also agreed to reimburse Ms. Waterson for her reasonable
moving and relocation expenses incurred, up to CDN$50,000 and
for her temporary living expenses for up to six months following
the effective date of the agreement, at a maximum amount of
CDN$3,500 per month. The Compensation Committee extended the
term of such temporary living expenses reimbursement through the
end of fiscal 2009, up to a maximum amount of CDN$42,000 for
fiscal 2009. If Ms. Waterson resigns from the company
within her first year of employment, she will be required to
reimburse the company for her moving and relocation expenses. We
also agreed to assist Ms. Waterson with her tax filings in
the United States and Canada for the 2008 tax filing year.
Ms. Waterson is entitled to participate in health
insurance, term life insurance, long-term disability insurance
and other employee benefit arrangements generally available to
our employees.
26
Ms. Watersons employment may be terminated by
Ms. Waterson or by us at any time, with or without cause.
In the event we terminate Ms. Waterson without cause, and
subject to her execution of a non-disparagement, non-compete and
non-solicitation agreement, she will be entitled to
12 months of base salary. Additionally, if we terminate
Ms. Waterson without cause, and she can provide necessary
documentation that she has a car lease which will need to be
terminated, we will contribute up to CDN$10,000 toward the cost
of terminating the car lease.
Robert
Meers
On May 6, 2008, we entered into a Retirement, Transaction
and Release Agreement with our former Chief Executive Officer,
Robert Meers, pursuant to which Mr. Meers retired as Chief
Executive Officer of the company effective June 30, 2008
and resigned as a Class II director immediately prior to
our 2008 Annual Meeting.
Under his retirement agreement, Mr. Meers consulted with
the company upon the companys request through
January 31, 2009, and released the company from any claims
he may have had related to his employment with the company and
any of its affiliates. The company also released Mr. Meers
from any claims related to Mr. Meers employment by the
company. Subject to the companys achievement of certain
financial performance metrics, Mr. Meers was entitled to
receive a special cash bonus based on the companys
financial performance pursuant to the terms of the 2008 Plan, in
an amount not to exceed CDN$219,113. Because the company did not
achieve its bonus targets under the 2008 Plan, no bonus was paid
to Mr. Meers. The company also accelerated the vesting of
209,042 options under non-qualified stock options currently held
by Mr. Meers. Consistent with applicable tax regulations,
the company extended the exercise date for such options to a
date between approximately January 1, 2009 and
March 15, 2009.
Mr. Meers will remain obligated, for 24 months
following his resignation, not to:
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participate in a company that competes against us in the United
States or Canada;
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become interested in a company that competes against us;
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influence or attempt to influence any of our employees,
consultants, suppliers, licensors, licensees, contractors,
agents, strategic partners, distributors, customers or other
persons to terminate or modify such persons agreement or
arrangement with us or any of our affiliates; or
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solicit for employment or employ or retain (or arrange to have
any other person or entity employ or retain) any person who has
been employed or retained by us or any of our affiliates within
the prior 12 months.
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Mr. Meers will also remain obligated to maintain the
confidentiality of our proprietary information. In addition,
Mr. Meers agrees that all rights to our proprietary
information and intellectual property are and will remain our
sole and exclusive property.
Until June 30, 2008, Mr. Meers received a pro rated
amount of his annual base salary of CDN$600,000.
Mike
J. Tattersfield
In connection with his termination of employment in April 2008,
the company agreed to continue to pay
Mr. Tattersfields base salary of CDN$392,111 for the
12-month
period following April 5, 2008. Mr. Tattersfield was
also eligible to participate in the companys tax
equalization program in an amount not to exceed US$35,000 and
was entitled to family medical benefits coverage for the
12-month
period following April 5, 2008. In consideration of these
payments and benefits, Mr. Tattersfield entered into a
release agreement pursuant to which Mr. Tattersfield
provided the company a general release and agreed to certain
restrictive covenants, including confidentiality,
non-disparagement, non-competition and non-solicitation
provisions for a period of 12 months after April 5,
2008.
27
Potential
Payments upon Termination of Employment and Change in
Control
The following tables set forth the payments and benefits that
would be due to each of Mr. Wilson, Ms. Day,
Mr. Currie, Ms. Waterson and Mr. Meers upon the
termination of his or her employment without cause
(as that term is defined above with respect to the discussion of
each named executive officers employment agreement or
offer letter and in the companys 2007 Equity Incentive
Plan). The amounts provided in the tables below assume that each
termination was effective as of February 1, 2009 (the last
day of our fiscal year). These are merely illustrative of the
impact of hypothetical events, based on the terms of
arrangements then in effect. The amounts to be payable upon an
actual termination of employment can only be determined at the
time of such event, based on the facts and circumstances then
prevailing. Under the terms of the companys 2007 Equity
Incentive Plan, the Board may, in its sole and absolute
discretion, take a number of actions with respect to outstanding
stock options, including the acceleration of the unvested
portion of the stock options or the cancellation of such
outstanding options in exchange for a substitute award. For the
purpose of the tables below, we have assumed that the Board
would not elect to accelerate the unvested portion of the
outstanding stock options. Our agreements with these executives
do not contain tax
gross-up
provisions.
Assuming that Mr. Wilson was terminated without
cause on February 1, 2009, his payments would have
had an estimated value of:
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Salary
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Continuation
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(CDN$)
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Termination Without Cause
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500,000
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(1)
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(1) |
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This amount represents Mr. Wilsons monthly base
salary for a period of 24 months. Such amount will be
payable over a
24-month
period. |
Assuming that Ms. Day was terminated without
cause on February 1, 2009, her payments and benefits
would have had an estimated value of:
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Salary Continuation
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(CDN$)
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Termination Without Cause
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550,000
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(1)
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(1) |
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This amount represents Ms. Days monthly base salary
for a period of 12 months. Such amount will be payable in
either a lump sum or monthly at our discretion. |
Assuming that Mr. Currie was terminated without
cause on February 1, 2009, he would not be entitled
to receive any other payments or benefits.
Assuming that Ms. Waterson was terminated without
cause on February 1, 2009, her payments and benefits
would have had an estimated value of:
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Salary Continuation
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(CDN$)
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Termination Without Cause
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360,000
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(1)
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(1) |
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This amount represents Ms. Watersons monthly base
salary for a period of 12 months, as well as the
reimbursement of up to CDN$10,000 in termination fees with
respect to an automobile lease. |
28
Compensation
Committee Report
We, the Compensation Committee of the Board, have reviewed and
discussed the Compensation Discussion and Analysis contained in
this Proxy Statement with management. Based on such review and
discussion, we have recommended to the Board that the
Compensation Discussion and Analysis be included in this Proxy
Statement and in lululemons Annual Report on
Form 10-K
for the fiscal year ended February 1, 2009.
COMPENSATION COMMITTEE
David M. Mussafer (Chairman)
Steven J. Collins
R. Brad Martin
Rhoda M. Pitcher
Thomas G. Stemberg
29
CERTAIN
RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Related
Person Transactions for Fiscal 2008
Other than compensation agreements and other arrangements which
are described under Compensation Discussion and
Analysis and the transactions described below, since
February 3, 2008, there has not been, and there is not
currently proposed, any transaction or series of similar
transactions to which we were or will be a party in which the
amount involved exceeded or will exceed $120,000 and in which
any of our directors, executive officers, holders of more than
5% of any class of our voting securities or any member of the
immediate family of the foregoing persons had or will have a
direct or indirect material interest. We believe that we have
executed all of the transactions set forth below on terms no
less favorable to us than we could have obtained from
unaffiliated third parties.
Purchase
of Victoria, British Columbia Franchise Stores
Mr. Wilsons
sister-in-law
and her husband held a 100% interest in Oqqo Enterprises Inc.
and CB Ventures Inc., which entities owned 100% of the two
lululemon athletica inc. franchise stores located in Victoria,
British Columbia. In September 2008, the company purchased the
two Victoria, British Columbia franchises for an aggregate
amount of approximately $1.2 million. In accordance with
the terms of the Companys Related Party Transaction
Policies and Procedures, the Audit Committee reviewed and
approved this related party transaction.
Lease of
Retail Location Property to Company
Honeybee Ventures, Ltd., a British Columbia corporation owned
24% by Mr. Wilson, 26% by his wife, Shannon Wilson, and 50%
by Mr. Wilsons
brother-in-law
and
sister-in-law,
Ryan and Kimberly Smith, owns the building in which the
Victoria, British Columbia lululemon store is located.
Commencing on October 1, 2008, lululemon leased the space
for its Victoria store from Honeybee Ventures, Ltd. at a monthly
rent of CDN$7,291.67, plus GST. Unless earlier terminated
pursuant to its terms, the lease will continue until
June 30, 2012. The total monthly payments due under the
lease from October 1, 2008 through the end of its term are
approximately CDN$328,125.00, plus GST.
Procedures
for Approval of Related Person Transactions
In April 2007, we adopted a written statement of policy with
respect to related party transactions, which is administered by
our Audit Committee. Under our related party transaction policy,
a Related Party Transaction is any transaction,
arrangement or relationship between us or any of our
subsidiaries and a Related Person not including any transactions
involving less than $60,000 when aggregated with all similar
transactions, or transactions that have received pre-approval of
our Audit Committee. A Related Person is any of our
executive officers, directors or director nominees, any
stockholder beneficially owning in excess of 5% of our stock or
securities exchangeable for our stock, any immediate family
member of any of the foregoing persons, and any firm,
corporation or other entity in which any of the foregoing
persons is an executive officer, a partner or principal or in a
similar position or in which such person has a 5% or greater
beneficial ownership interest in such entity.
Pursuant to our related party transaction policy, a Related
Party Transaction may only be consummated or may only continue
if:
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Our Audit Committee approves or ratifies such transaction in
accordance with the terms of the policy; or
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the Chairman of our Audit Committee pre-approves or ratifies
such transaction and the amount involved in the transaction is
less than $100,000, provided that for the Related Party
Transaction to continue it must be approved by our Audit
Committee at its next regularly scheduled meeting.
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If advance approval of a Related Party Transaction is not
feasible, then that Related Party Transaction will be considered
and, if our Audit Committee determines it to be appropriate,
ratified, at its next regularly scheduled meeting. If we decide
to proceed with a Related Party Transaction without advance
approval, then the terms of such Related Party Transaction must
permit termination by us without further material obligation in
the event our Audit Committee ratification is not forthcoming at
our Audit Committees next regularly scheduled meeting.
Transactions with Related Persons, though not classified as
Related Party Transactions by our related party transaction
policy and thus not subject to its review and approval
requirements, may still need to be disclosed if required by the
applicable securities laws, rules and regulations.
30
PRINCIPAL
STOCKHOLDERS AND STOCK OWNERSHIP BY MANAGEMENT
The following table sets forth information concerning the
beneficial ownership of our common stock by
(i) those persons who we know to beneficially own more than
5% of our outstanding common stock, (ii) our directors,
(iii) the named executive officers listed in
the Summary Compensation Table on page 20, and
(iv) all of our current directors and executive officers as
a group. Beneficial ownership is a concept which
takes into account shares that may be acquired within
60 days of April 30, 2009 (such as by exercising
vested stock options) and shares as to which the named person
has or shares voting
and/or
investment power. Information provided for Mr. Wilson,
Advent International Corporation, FMR LLC, Capital World
Investors, and Morgan Stanley is based on the latest Schedules
13D or 13G, or Section 16 reports, as applicable, such
individual or entity had filed with the SEC as of the date of
this Proxy Statement. Information for all other persons is
provided as of April 30, 2009. Except as otherwise noted,
the beneficial owners listed have sole voting and investment
power with respect to shares beneficially owned.
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Number of Shares
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Beneficially
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Owned
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Beneficial Owner(1)
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(#)
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Percent
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Dennis J. Wilson(2)
c/o lululemon
athletica inc.
2285 Clark Drive
Vancouver, British Columbia V5N 3G9
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24,355,355
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34.7
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%
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Advent International Corporation(3)
75 State Street
Boston, MA 02109
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4,418,790
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6.3
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%
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Morgan Stanley(4)
1585 Broadway
New York, NY 10036
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5,417,135
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7.7
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%
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FMR LLC(5)
82 Devonshire Street
Boston, MA 02109
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10,481,336
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14.9
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%
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Capital World Investors(6)
333 South Hope Street
Los Angeles, CA 90071
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7,220,710
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10.3
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%
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David M. Mussafer(7)
c/o lululemon
athletica inc.
2285 Clark Drive
Vancouver, British Columbia V5N 3G9
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4,429,763
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6.3
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%
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Steven J. Collins(8)
c/o lululemon
athletica inc.
2285 Clark Drive
Vancouver, British Columbia V5N 3G9
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4,425,438
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6.3
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%
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RoAnn Costin(9)
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28,628
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*
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Rhoda Pitcher(10)
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148,479
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*
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R. Brad Martin(11)
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41,128
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*
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Thomas G. Stemberg(12)
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12,558
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*
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Michael Casey(13)
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13,529
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*
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Robert Meers
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0
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*
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Christine M. Day(14)
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38,450
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*
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John E. Currie(15)
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136,981
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*
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Marth A.M. Morfitt
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1,971
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*
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Sheree Waterson(16)
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11,250
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*
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Directors and executive officers as a group
(13 persons)(2);(7)-(16)
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29,224,739
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41.7
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%
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31
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(1) |
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Except as otherwise indicated, the persons named in this table
have sole voting and investment power with respect to all shares
of Common Stock shown as beneficially owned by them, subject to
community property laws where applicable and to the information
contained in the footnotes to this table. |
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(2) |
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Based on a Schedule 13G and Form 4 filed by
Mr. Wilson with the SEC on February 17, 2009 and
March 3, 2009, respectively. Includes
18,972,728 shares of Common Stock issuable upon the
exchange of Exchangeable Shares of Lulu Canadian Holding, Inc.
held by Mr. Wilson, 131,654 shares of Common Stock
issuable upon the exchange of Exchangeable Shares of Lulu
Canadian Holding, Inc. held by Mr. Wilsons wife,
5,164,429 shares of Common Stock held by LIPO Investments
(USA), Inc., an entity which Mr. Wilson controls,
42,616 shares of Common Stock issuable upon the exchange of
Exchangeable Shares of Lulu Canadian Holding, Inc. held by
Mr. Wilson as trustee and 43,928 shares of Common
Stock issuable upon the exchange of Exchangeable Shares of Lulu
Canadian Holding, Inc. held by Five Boys Investments ULC, an
entity which Mr. Wilson controls. Lulu Canadian Holding,
Inc. is an indirect wholly-owned subsidiary of the company.
Exchangeable Shares of Lulu Canadian Holding, Inc. may be
exchanged on a one-for-one basis for shares of the
companys Common Stock. |
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(3) |
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Based on a Schedule 13D/A filed by Advent International
Corporation with the SEC on February 10, 2009. Includes
588,734 shares owned by Advent International GPE V Limited
Partnership, 1,462,203 shares owned by Advent International
GPE V-A Limited Partnership, 1,235,488 shares owned by
Advent International GPE V-B Limited Partnership,
943,853 shares owned by Advent International GPE V-G
Limited Partnership, 141,645 shares owned by Advent
International GPE V-I Limited Partnership, 7,342 shares
owned by Advent Partners III Limited Partnership,
19,698 shares owned by Advent Partners GPE V Limited
Partnership, 7,324 shares owned by Advent Partners GPE V-A
Limited Partnership and 12,251 shares owned by Advent
Partners GPE V-B Limited Partnership (collectively, the
Advent Funds). The Advent Funds collectively
purchased their interest in shares of our capital stock on
December 5, 2005. Advent International Corporation is the
General Partner of Advent International Limited Partners and the
Manager of Advent International LLC, which in turn is the
General Partner of GPE GP Limited Partnership which is the
General Partner of each of Advent International GPE V Limited
Partnership, Advent International GPE V-A Limited Partnership,
Advent International GPE V-B Limited Partnership, Advent
International GPE V-G Limited Partnership and Advent
International GPE V-I Limited Partnership. Advent International
Corporation General Partner of Advent International Limited
Partners and the Manager of Advent International LLC, which is
the General Partner of each of Advent Partners III Limited
Partnership, Advent Partners GPE V Limited Partnership, Advent
Partners GPE V-A Limited Partnership and Advent Partners GPE V-B
Limited Partnership. Advent International Corporation exercises
voting and investment power over the shares held by each of
these entities and may be deemed to have beneficial ownership of
these shares. With respect to the shares of our Common Stock
held by the Advent Funds, a group of persons currently composed
of Steven J. Collins, David M. Mussafer and Steven M. Tadler
exercises voting and investment power over the shares
beneficially owned by Advent International Corporation. Each of
Mr. Collins, Mr. Mussafer and Mr. Tadler
disclaims beneficial ownership of the shares held by the Advent
Funds, except to the extent of their respective pecuniary
interest therein. |
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(4) |
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Based on a Schedule 13G/A filed by Morgan Stanley with the
SEC on February 17, 2009. Morgan Stanley Investment
Management Inc., a wholly-owned subsidiary of Morgan Stanley,
may be deemed to beneficially own the shares held by Morgan
Stanley. |
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(5) |
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Based on a Schedule 13G/A filed by FMR LLC with the SEC on
February 17, 2009. Fidelity Management & Research
Company, a wholly-owned subsidiary of FMR LLC, and Edward C.
Johnson 3d, may each be deemed to beneficially own the shares
held by FMR LLC. |
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(6) |
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Based on a Schedule 13G/A filed by Capital World Investors
with the SEC on February 13, 2009. |
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(7) |
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Mr. Mussafer, as a member of a group of persons that
exercises voting and investment power over the shares
beneficially owned by Advent International Corporation, may be
deemed to beneficially own the shares held by the Advent Funds.
Mr. Mussafer disclaims beneficial ownership of all shares
held by the Advent Funds, except to the extent of his pecuniary
interest therein. Includes 7,561 shares and
3,412 shares of our Common Stock issuable upon exercise of
options held by Mr. Mussafer that may be exercised within
60 days of April 30, 2009. |
32
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(8) |
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Mr. Collins, as a member of a group of persons that
exercises voting and investment power over the shares
beneficially owned by Advent International Corporation, may be
deemed to beneficially own the shares held by the Advent Funds.
Mr. Collins disclaims beneficial ownership of all shares
held by the Advent Funds, except to the extent of his pecuniary
interest therein. Includes 3,236 shares and
3,412 shares of our Common Stock issuable upon exercise of
options held by Mr. Collins that may be exercised within
60 days of April 30, 2009. |
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(9) |
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Includes 25,216 shares and 3,412 shares of our Common
Stock issuable upon exercise of options held by Ms. Costin
that may be exercised within 60 days of April 30, 2009. |
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(10) |
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Includes 117,077 shares and 31,402 shares of our
Common Stock issuable upon exercise of options held by
Ms. Pitcher that may be exercised within 60 days of
April 30, 2009. |
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(11) |
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Includes 37,716 shares and 3,412 shares of our Common
Stock issuable upon exercise of options held by Mr. Martin
that may be exercised within 60 days of April 30, 2009. |
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(12) |
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Includes 9,416 shares and 3,412 shares of our Common
Stock issuable upon exercise of options held by
Mr. Stemberg that may be exercised within 60 days of
April 30, 2009. Consists of 930 shares owned in trust
and received by such trust in a distribution made on a pro rata
basis from Highland Entrepreneurs Fund VI, Limited
Partnership and from Highland Management Partners VI Limited
Partnership for no consideration in a transaction exempt under
Rule 16a-9(a). |
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(13) |
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Includes 11,512 shares and 2,017 shares of our Common
Stock issuable upon exercise of options held by Mr. Casey
that may be exercised within 60 days of April 30, 2009. |
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(14) |
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Includes 7,200 shares and 31,250 shares of our Common
Stock issuable upon exercise of options held by Ms. Day
that may be exercised within 60 days of April 30, 2009. |
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(15) |
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Includes 10,000 shares and 126,981 shares of our
Common Stock issuable upon exercise of options held by
Mr. Currie that may be exercised within 60 days of
April 30, 2009. |
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(16) |
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Includes 11,250 shares of our Common Stock issuable upon
exercise of options held by Ms. Waterson that may be
exercised within 60 days of April 30, 2009. |
SECTION 16(a)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934
requires our executive officers and directors and persons who
beneficially own more than 10% of our Common Stock to file
initial reports of beneficial ownership and reports of changes
in beneficial ownership with the SEC. Such persons are required
by SEC regulations to furnish us with copies of all
Section 16(a) forms filed by such person.
Based solely on our review of such forms furnished to us and
written representations from certain reporting persons, we
believe that all filing requirements applicable to our executive
officers, directors and greater-than-10% stockholders were
complied with for fiscal 2008, except that Mr. Wilson filed
two late reports with respect to two transactions and
Mr. Stemberg filed one late report with respect to one
transaction.
33
TRANSACTION
OF OTHER BUSINESS
At the date of this Proxy Statement, the Board knows of no other
business that will be conducted at the 2009 Annual Meeting other
than as described in this Proxy Statement. If any other matter
or matters are properly brought before the meeting or any
adjournment or postponement of the meeting, it is the intention
of the persons named in the accompanying form of proxy to vote
the proxy on such matters in accordance with their best judgment.
STOCKHOLDER
PROPOSALS TO BE PRESENTED
AT THE 2010 ANNUAL MEETING OF STOCKHOLDERS
Stockholder proposals to be included in our Proxy Statement for
our 2010 Annual Meeting of Stockholders must be received by the
Secretary of lululemon no later than December 31, 2009.
Notices must be delivered to the Secretary at our executive
offices at 2285 Clark Drive, Vancouver, British Columbia,
V5N 3G9. If we change the date of the 2010 Annual Meeting
of Stockholders by more than 30 days from June 10,
2010, then the deadline will be the later of the 90th day prior
to the 2010 Annual Meeting of Stockholders or the 10th day
following the day on which we first publicly announce the date
of the 2010 Annual Meeting of Stockholders.
Stockholders wishing to submit a proposal (including a
nomination for election as a director) for consideration at the
2010 Annual Meeting of Stockholders must do so in accordance
with the terms of the advance notice provisions in our bylaws.
These advance notice provisions require that, among other
things, the stockholder give written notice to the Secretary of
lululemon no later than the 120th day prior to the first
anniversary of the date on which we first mailed this proxy
statement. For the 2010 Annual Meeting of Stockholders, a
stockholders notice of a proposal will be considered
timely if received no later than December 31, 2009. Notices
must be delivered to the Secretary at our executive offices at
2285 Clark Drive, Vancouver, British Columbia, V5N 3G9. If
we change the date of the 2010 Annual Meeting of Stockholders by
more than 30 days from June 10, 2010, then the
deadline will be the later of the 90th day prior to the 2010
Annual Meeting of Stockholders or the 10th day following the day
on which we first publicly announce the date of the 2010 Annual
Meeting of Stockholders.
ANNUAL
REPORT AND
FORM 10-K
A copy of our combined annual report to stockholders and Annual
Report on
Form 10-K
for the year ended February 1, 2009 will be mailed with
this Proxy Statement to those stockholders that elect to receive
a paper copy of the proxy materials. For those stockholders that
receive the Notice, this Proxy Statement and our fiscal 2008
Annual Report are available at www.proxyvote.com.
By order of the Board of Directors,
Dennis J. Wilson
Chairman of the Board of Directors
April 30,
2009
Whether or not you plan to attend the Annual Meeting, please
vote your shares via the Internet, as described in the
accompanying materials, to assure that your shares are
represented at the meeting, or, if you elect to receive a paper
copy of the proxy card by mail, you may mark, sign and date the
proxy card and return it in the enclosed postage-paid envelope.
If you attend the meeting you will, of course, have the right to
revoke the proxy and vote your shares in person.
34
Proxy for the Annual Meeting of Stockholders
To be held on June 10, 2009
Solicited by the Board of Directors
The undersigned hereby appoints Christine M. Day and John E. Currie, and each of them, with
full power of substitution, to represent the undersigned and to vote all of the shares of stock in
lululemon athletica inc., a Delaware corporation (the Company), which the undersigned is entitled
to vote at the Annual Meeting of Stockholders of the Company to be held at 10:00 a.m. local time,
in the Cheakamus Room at the Fairmont Waterfront Hotel located at 900 Canada Place Way, Vancouver,
British Columbia, and at any adjournment or postponement thereof (1) as hereinafter specified upon
the proposals listed on the reverse side and as more particularly described in the Proxy Statement
of the Company dated April 30, 2009 (the Proxy Statement), receipt of which is hereby
acknowledged, and (2) in their discretion upon such other matters as may properly come before the
meeting.
THE SHARES REPRESENTED HEREBY SHALL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS
MADE, SUCH SHARES SHALL BE VOTED FOR PROPOSALS 1 AND 2.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, YOU ARE URGED TO SIGN AND
PROMPTLY MAIL THIS PROXY IN THE RETURN ENVELOPE SO THAT YOUR STOCK MAY BE REPRESENTED AT THE
MEETING.
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CONTINUED AND TO BE SIGNED ON REVERSE SIDE
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SEE REVERSE
SIDE |
35
PROPOSAL NO. 1
A vote FOR the following proposal is recommended by the Board of Directors:
Election of Directors. To elect three (3) Class II directors, Christine M.
Day, Martha A.M. Morfitt and Rhoda M. Pitcher to the Companys Board of Directors to serve until
the annual meeting of stockholders in 2012, and until their respective successors are elected and
qualified:
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FOR all nominees listed
below (except as marked
to the contrary below).
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¨
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WITHHOLD AUTHORITY to
vote for all nominees
listed below. |
(INSTRUCTION: To withhold authority to vote for any individual nominee, strike a line
through that nominees name in the list below.)
Christine M. Day (Class II Director)
Martha A.M. Morfitt (Class II Director)
Rhoda M. Pitcher (Class II Director)
PROPOSAL NO. 2
REGISTERED PUBLIC ACCOUNTING FIRM. A vote FOR the following proposal is recommended
by the Board of Directors:
To ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public
accounting firm for the fiscal year ending January 31, 2010:
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FOR the ratification of
the appointment of
PricewaterhouseCoopers
LLP
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¨
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WITHHOLD AUTHORITY to
vote to ratify the
appointment of
PricewaterhouseCoopers
LLP |
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MARK HERE FOR ADDRESS
CHANGE AND NOTE AT LEFT
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¨
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MARK HERE IF YOU PLAN
TO ATTEND THE MEETING
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¨ |
Please sign here. If shares of stock are held jointly, both or all of such persons should sign.
Corporate or partnership proxies should be signed in full corporate or partnership name by an
authorized person. Persons signing in a fiduciary capacity should indicate their full titles in
such capacity.
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Signature:
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Date: |
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Signature:
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Date: |
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36