STOCK
APPRECIATION RIGHT AGREEMENT
(2007
Long-Term Incentive Plan)
Retention
Grant Tranche 2
This
STOCK AWARD AGREEMENT (this “AGREEMENT”) is made to be
effective as of March 2, 2009 (the “GRANT DATE”),
by and between Abercrombie & Fitch Co., a Delaware corporation
(the “COMPANY”), and Michael S. Jeffries (the
“PARTICIPANT”).
WHEREAS,
pursuant to the provisions of the 2007 Long-Term Incentive Plan of
the COMPANY (the “PLAN”), the Compensation Committee
(the “COMMITTEE”) of the Board of Directors of the
COMPANY (the “BOARD”) administers the PLAN;
WHEREAS,
the Employment Agreement between the COMPANY and the PARTICIPANT,
dated as of December 19, 2008 (the “EMPLOYMENT
AGREEMENT”) provides that the PARTICIPANT shall receive
certain equity grants under the PLAN; and
WHEREAS,
the COMMITTEE has determined that an award of stock appreciation
rights (“SARs”) with respect to one million two hundred
thousand (1,200,000) shares of Class A Common Stock, $0.01 par
value (the “SHARES”), of the COMPANY should be granted
to the PARTICIPANT upon the terms and conditions set forth in the
EMPLOYMENT AGREEMENT and this AGREEMENT.
NOW,
THEREFORE, in consideration of the premises, the parties hereto
make the following agreement, intending to be legally bound
thereby:
1.
Grant of AWARD . Pursuant to, and subject to, the terms and
conditions set forth in this AGREEMENT, the EMPLOYMENT AGREEMENT
and in the PLAN, the COMPANY hereby grants to the PARTICIPANT an
award of one million two hundred thousand (1,200,000) SARs (the
“AWARD”). Each SAR represents the right to receive,
upon exercise of the SAR, pursuant to this AGREEMENT, from the
COMPANY, a payment, paid in SHARES of the COMPANY, having a value
equal to the excess of the FAIR MARKET VALUE (as defined in the
PLAN), on the date of exercise, of one SHARE of the COMPANY
(subject to adjustment as provided in Section 11(c) of the PLAN)
over the BASE PRICE (as defined below).
2.
Terms and Conditions of the AWARD .
(A)
BASE PRICE . The “BASE PRICE” for the AWARD
shall be as follows:
(i) with
respect to six hundred thousand (600,000) of the SARs awarded
hereunder, the “BASE PRICE” shall be $
per share [TO BE EQUAL TO THE FAIR MARKET VALUE ON THE GRANT DATE]
(subject to adjustment as provided in Section 11(c) of the
PLAN);
(ii) with
respect to one hundred fifty thousand (150,000) of the SARs awarded
hereunder, the “BASE PRICE” shall be $
per share [TO BE EQUAL TO 120% OF THE FAIR MARKET VALUE ON THE
GRANT DATE] (subject to adjustment as provided in Section 11(c) of
the PLAN);
(iii) with
respect to one hundred fifty thousand (150,000) of the SARs awarded
hereunder, the “BASE PRICE” shall be $
per share [TO BE EQUAL TO 140% OF THE FAIR MARKET VALUE ON THE
GRANT DATE] (subject to adjustment as provided in Section 11(c) of
the PLAN);
(iv) with
respect to one hundred fifty thousand (150,000) of the SARs awarded
hereunder, the “BASE PRICE” shall be $
per share [TO BE EQUAL TO 160% OF THE FAIR MARKET VALUE ON THE
GRANT DATE] (subject to adjustment as provided in Section 11(c) of
the PLAN); and
(v) with
respect to one hundred fifty thousand (150,000) of the SARs awarded
hereunder, the “BASE PRICE” shall be $
per share [TO BE EQUAL TO 180% OF THE FAIR MARKET VALUE ON THE
GRANT DATE] (subject to adjustment as provided in Section 11(c) of
the PLAN).
(B)
Exercise of the AWARD . Except as otherwise provided in this
AGREEMENT, the AWARD may be exercised at any time on or after
January 31, 2014, as to 100% of the SARs subject to the AWARD,
provided that the PARTICIPANT is employed by the COMPANY or a
subsidiary of the COMPANY on such date.
Subject
to the other provisions of this AGREEMENT, including
Section 5, if the AWARD becomes vested and exercisable as to
certain SARs, it shall remain exercisable as to those SARs until
the date of expiration of the AWARD term. The COMMITTEE may, but
shall not be required to (unless otherwise provided in this
AGREEMENT or the EMPLOYMENT AGREEMENT), accelerate the vesting and
exercisability of the AWARD.
The
grant of the AWARD shall not confer upon the PARTICIPANT any right
to continue in the employment of the COMPANY or any of its
subsidiaries or interfere with or limit in any way the right of the
COMPANY or any of its subsidiaries to modify the terms of or
terminate the employment of the PARTICIPANT at any time in
accordance with applicable law and the COMPANY’s or the
subsidiary’s governing corporate documents.
(C)
AWARD Term . The AWARD shall in no event be exercisable
after December 19, 2015 and shall expire on such
date.
(D)
Method of Exercise . The AWARD may be exercised by giving
written or electronic notice of exercise to the COMMITTEE, in care
of the Human Resources Department of the COMPANY, or such
third-party administrator as the Human Resources Department may
from time to time designate, stating the number of SARs subject to
the AWARD in respect of which the AWARD is being exercised. After
proper notice has been made, and subject to Section 2(E)
below, the COMPANY shall take all such actions as are necessary to
deliver an appropriate certificate or other evidence of ownership
representing the SHARES due upon the exercise of the AWARD as
promptly thereafter as is reasonably practicable.
(E)
Tax Withholding . The COMPANY shall have the right to
require the PARTICIPANT to remit to the COMPANY an amount
sufficient to satisfy any applicable federal, state and local tax
withholding requirements in respect of the exercise of the AWARD.
These tax withholding requirements may be satisfied in one of
several ways, including:
(i) The
PARTICIPANT may give the COMPANY cash equal to the amount required
to be withheld or tender SHARES of the COMPANY already owned by the
PARTICIPANT for at least six months by actual delivery of the
already-owned SHARES and having a FAIR MARKET VALUE on the exercise
date equal to the amount required to be withheld; or
(ii) The
COMPANY may withhold SHARES otherwise issuable upon exercise of the
AWARD having FAIR MARKET VALUE on the exercise date equal to the
amount required to be withheld (but only to the extent of the
minimum amount that must be withheld to comply with applicable
state, federal and local income, employment and wage tax
laws).
3.
Termination of Employment .
(A) Subject
to the terms of the EMPLOYMENT AGREEMENT, if the PARTICIPANT is
terminated by the COMPANY without CAUSE (as defined in the
EMPLOYMENT AGREEMENT), other than due to death or DISABILITY (as
defined in the EMPLOYMENT AGREEMENT), or by the PARTICIPANT for
GOOD REASON (as defined in the EMPLOYMENT AGREEMENT) prior to a
CHANGE IN CONTROL (as defined in the EMPLOYMENT AGREEMENT), and
subject to the PARTICIPANT executing a release in favor of the
COMPANY pursuant to Section 10(j) of the EMPLOYMENT AGREEMENT, this
AWARD shall become vested as of such termination as to that number
of SARs equal to the product of (i) the total number of SARs
subject to this AWARD and (ii) the fraction obtained by
dividing (1) the number of days of service by the PARTICIPANT
to the COMPANY during the period commencing on the
December 19, 2008 and ending on the termination date
(provided, however, that in no event shall such resulting number be
less than 730) by (2) 1,870.
(B) Subject
to the terms of the EMPLOYMENT AGREEMENT, if the PARTICIPANT is
terminated by the COMPANY without CAUSE, other than due to death or
DISABILITY, or by the PARTICIPANT for GOOD REASON within two
(2) years after a CHANGE IN CONTROL, and subject to the
PARTICIPANT executing a release in favor of the COMPANY pursuant to
Section 10(j) of the EMPLOYMENT AGREEMENT, this AWARD shall become
immediately and fully vested and exercisable as of such termination
date.
(C) Subject
to the terms of the EMPLOYMENT AGREEMENT, if the PARTICIPANT is
terminated by either the PARTICIPANT or the COMPANY by reason of
the PARTICIPANT’s death or DISABILITY, this AWARD shall
become vested as of such termination date as to that number of SARs
equal to the product of (i) the total number of SARs subject
to this AWARD and (ii) the fraction obtained by dividing
(1) the number of days of service by the PARTICIPANT to the
COMPANY during the period commencing on the December 19, 2008
and ending on the termination date (provided, however, that in no
event shall such resulting number be less than 730) by
(2) 1,870.
(D) If
the PARTICIPANT is terminated by the COMPANY for CAUSE, the AWARD,
whether or not vested and exercisable on the date of termination,
shall terminate immediately upon such termination of the
PARTICIPANT’s employment.
4.
Non-Transferability of AWARD . The AWARD may not be
transferred, assigned, pledged or hypothecated (whether by
operation of law or otherwise) by the PARTICIPANT, except as
provided by will or by the applicable laws of descent and
distribution, and the AWARD shall not be subject to execution,
attachment or similar process.
5.
Exercise After Termination of Employment . Except as the
COMMITTEE may at any time provide, if the employment of the
PARTICIPANT with the COMPANY and its subsidiaries is terminated for
any reason other than for CAUSE, the AWARD may be exercised (to the
extent that
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