Executive Employment Agreement

Exhibit 10.1

Private & Confidential

This Agreement is dated for reference as of August 1, 2008.

Dear Ms. Day:

This Agreement contains the terms and conditions of our offer of employment in the position of Chief Executive Officer with lululemon athletica inc. This Agreement will take effect as of the Effective Date and will continue until terminated in accordance with its terms.

If you accept our offer of employment on the terms and conditions set out below, please execute this Agreement where indicated and return it to Mr. Dennis (Chip ) Wilson.

ARTICLE 1 — INTERPRETATION

1.01 Definitions

          In this Agreement, unless something in the subject matter or context is inconsistent therewith:

“Affiliate” has the meaning attributed to such term in the Canada Business Corporations Act and includes each direct and indirect subsidiary of the Company and any other entities, including joint ventures and franchises, in which the Company has an interest.

“Agreement” means this agreement, including its recitals and schedules, as amended from time to time.

“Base Salary” has the meaning attributed to such term in Section 3.01(1).

“Board” means the board of directors of the Company in office from time to time.

“Bonus Plan” means Company’s 2008 Executive Bonus Plan.

“Business” means all the business and activities from time to time carried on by the Company and its Affiliates, including, without limitation, the design, retail and wholesale of technical athletic apparel.

“Cause” means an act or failure to act which would constitute cause at common law, and includes any of the following conduct by, or authorized or permitted by, the Executive: violation of any contractual or common law duty to the Company; unlawful activity; activity contrary to professional or ethical standards; or breach of the terms and conditions of this Agreement which amount to just cause at common law.

“Company” means lululemon athletica inc., a Delaware corporation.

“Effective Date” of this Agreement and the Executive’s employment under this Agreement will mean August 1, 2008.

“Executive” means Ms. Christine Day of 2285 Clark Drive, Vancouver BC.

“Existing Options” has the meaning given to it in Section 3.03(2).

“Fair Market Value” has the meaning given to it in the Plan.

“Option” has the meaning given to it in Section 3.03(1).

“Permanent Disability” means the mental or physical condition of the Executive such that the Executive has been unable, as a result of illness, disease, disability or similar cause, to fulfill her duties with the Company on a full time basis for more than 6 consecutive months, or for an aggregate of a 6 month period within any consecutive 12 months.

“Plan” means the Company’s 2007 Equity Incentive Plan.

“Target Bonus” has the meaning given to it in the Bonus Plan.

“Termination Date” has the meaning given to it in Section 5.01.

ARTICLE 2 — EMPLOYMENT

2.01 Employment

     (1) Subject to the terms and conditions of this Agreement, the Company will, commencing on the Effective Date, employ the Executive in the position of Chief Executive Officer.

     (2) The Executive will report to the Board or such person as may be designated by the Board, provided such designate is a Board member.

     (3) The Executive will have the powers and authority to perform the duties and functions of the Chief Executive Officer of a corporation, subject always to the control and direction of the Board.

     (4) The Executive will be responsible for developing and executing strategies, advising and reporting to the Board, and for operating the Company within a budget set by the Board. Subject to the overall direction of the Board, the Executive will direct and be responsible for the day-to-day management of the operations of the Company, which responsibilities include, human resources, information technology and office administration, financial reporting and accounting, business development, retail operations, guest service and guest relations.

2.02 Review

          The Executive and the Board agree that they will review the terms and conditions of the Executive’s employment annually and recommend changes, if any, to this Agreement to be made only upon mutual agreement.

2.03 Directorships

     (1) During the Executive’s employment with the Company, the Executive agrees to serve as a director and/or officer of all subsidiaries of the Company. The Executive acknowledges that, to the extent the Executive serves as a director or officer of any such entity, the Executive will do so without any additional remuneration but will be entitled to receive a suitable indemnity for any liability from any such entity. The Company shall provide director and officer insurance.

     (2) Notwithstanding any provision of this Agreement or any other agreement or document to the contrary, the Executive will be deemed to have resigned as a director and officer of all subsidiaries of the Company contemporaneously with the date of termination of the Executive’s employment by the Company and will, immediately on request by the Company, sign any and all documents necessary to give effect to or confirm such resignation.

     (3) The Executive may serve as a director of no more than two entities which are unrelated to the Company and which are listed in Schedule B attached, provided the Executive receives approval of the Board in advance of accepting any such directorships.

2.04 Term

          The term of this Agreement and the Executive’s employment under this Agreement will commence on the Effective Date and will continue for an indefinite period, subject to termination in accordance with the terms of this Agreement.

2.05 Place of Employment

     (1) When not travelling, the Executive will perform her work and services for the Company at the principal executive offices of the Company in Vancouver, British Columbia, and the Executive will reside within a reasonable daily commuting distance of such place of employment.

     (2) The Executive acknowledges that the performance of her duties and functions will necessitate frequent travel to other places.

ARTICLE 3 — REMUNERATION AND BENEFIT S

3.01 Base Salary

     (1) The Company will pay the Executive a base salary (the “Base Salary” ) in the amount of CAD$550,000 per annum effective July 1, 2008. Such Base Salary will be payable in 26 equal instalments during each year of employment, in accordance with the Company’s usual payroll practices and dates, in arrears by direct deposit, and subject to deductions required by law or authorized by the Executive.

     (2) The Board or a committee thereof will review the Base Salary annually. The Board will not be under any obligation to increase Base Salary, but in no case will it decrease.

3.02 Bonus

          The Executive will be eligible to receive an annual bonus pursuant to the terms and conditions of the Bonus Plan and this Agreement. The Executive’s Target Bonus shall be 75% of Base Salary. The Executive acknowledges that she has been provided with a copy of the Bonus Plan and that she understands and accepts each of the terms and conditions thereof.

3.03 Stock Options

     (1) In connection with, and within a reasonable time following, the execution of this Agreement and the Effective Date, the Executive will be granted a nonqualified stock option to purchase up to 250,000 shares of the Company’s common stock (the “ Option ”) pursuant to the terms and conditions of the Plan and standard form of stock option agreement to be granted 83,333 on August 1, 2008; 83,333 on September 2, 2008; and 83,334 on October 1, 2008. The Option will vest in equal annual instalments over four (4) years, will have an exercise price equal to the Fair Market Value on the date of grant, as determined in accordance with the Plan, and will be subject to all of the provisions of the Plan, except as specifically modified by this Agreement.

     (2) The Executive will retain the right to the following stock options (the “Existing Options ”) as previously agreed with the Executive, on the following terms:

     (3) The Existing Options will have an exercise price equal to the Fair Market Value on the date of grant, as determined in accordance with the Plan, and will be subject to all of the provisions of the Plan.

     (4) The Executive acknowledges that she has been provided with a copy of the Plan and that she understands and accepts each of the terms and conditions thereof.

     (5) The granting and vesting of all options, including without limitation the Option and the Existing Options, are conditional upon the Executive remaining actively employed by the Company on the granting and vesting dates.

     (6) The Board may on its sole discretion consider further grants on an annual basis based on performance.

3.04 Benefits

          The Executive will be entitled to participate in all of the Company’s benefit plans, subject to the terms and conditions of such plans, generally available to its senior executives from time to time, including and without limitation, health, disability and death, subject to and in accordance with the terms and conditions of the applicable plans, subject to any express limitations by this Agreement or unless a greater benefit is expressly provided to the Executive under this Agreement. The Executive acknowledges that she has been provided with a summary of the current benefit plans and that she understands and accepts each of the terms and conditions thereof. The Executive further acknowledges that the Company may amend or terminate the benefit plans from time to time, as provided in the applicable plan, fund or arrangement. The Company will provide coverage for benefit coverage for the Executive’s dependents in the U.S. to a maximum cost of US $12,000.

          Upon submission of proper invoices, the Company will reimburse the Executive up to US $17,500 annually for premiums payable with respect to supplement term life insurance and/or long-term disability insurance.

3.05 Vacation

          The Executive will be entitled to four (4) weeks paid vacation each year. Such vacation entitlement will be pro-rated for any part of a year. The Executive will take such vacation at times having regard to the best interests of the Company. The Executive may not carry forward unused vacation time, except two (2) weeks per year, but no more than a total entitlement of six (6) weeks in each year, with the prior written approval of the Board and, except as may be required by applicable employment standards legislation, will lose the entitlement to unused vacation.

3.06 Expenses

          The Company will reimburse the Executive for all reasonable out-of-pocket expenses properly incurred by her in the course of the Executive’s employment with the Company, in accordance with the Company’s expense reimbursement policy in effect as at the date the Executive incurs any such expenses. The Executive will provide the Company with appropriate statements and receipts verifying such expenses as the Company may require.

3.07 Executive Perquisites

          The Executive will be eligible to participate in any fringe benefit or perquisite that the Company provides to other senior executives of the Company, to the same extent that other senior executives are eligible to participate and subject to the terms and conditions of such fringe benefits or perquisites.

ARTICLE 4 — EXECUTIVE’S COVENANTS

4.01 Full Time Service

          The Executive will devote all of her time, attention and effort to the business and affairs of the Company, and will well and faithfully serve the Company and will use her best efforts to promote the interests of the Company and its Affiliates.

4.02 Duties and Responsibilities

          The Executive will duly and diligently perform all of the duties assigned to her while in the employ of the Company.

4.03 Policies, Rules and Regulations

          The Executive will be bound by and will faithfully observe and abide by all of the policies, rules and regulations of the Company from time to time in force which are applicable to senior executives of the Company and which are brought to her notice or of which she should reasonably be aware.

4.04 Conflict of Interest

          The Executive will refrain from any situation in which the Executive’s personal interest conflicts, or may appear to conflict, with the Executive’s duties with the Company. The Executive acknowledges that if there is any doubt in this respect, the Executive will inform the Board and obtain written authorization.

4.05 Restrictive Covenants

          The Executive agrees to be bound by the terms and conditions of the Non-Compete, Non-Solicitation and Non-Disparagement Agreement between the Company and the Executive, a copy of which is attached to this Agreement as Schedule A and is incorporated by reference and deemed to be part of this Agreement.

ARTICLE 5 — TERMINATION

5.01 Termination by the Company

          The Company may terminate the Executive’s employment with the Company at any time by giving notice in writing to the Executive and stipulating the last day of employment (the “Termination Date” ).

5.02 Termination by the Executive

          The Executive may terminate her employment with the Company at any time by giving the Company thirty (30) days notice in writing (the “ Notice of Resignation Period ”). The Company may waive such notice, in whole or in part, in which case the Executive shall only be entitled to (i) payment of the Executive’s Base Salary for the period from the effective date of the waiver of the Notice of Resignation Period to the end of the Notice of Resignation Period; (ii) continued group benefit coverage under Section 3.04, subject to and in accordance with the terms and conditions of the applicable plans, for the period ending the last day of the Notice of Resignation Period; (iii) the value of the pro-rated vacation leave with pay for that portion of the calendar year up to the end of the Notice of Resignation Period, and (iv) any payments or entitlements under the Plan or the Bonus Plan that the Executive would otherwise receive during the Notice of Resignation Period.

5.03 Payments on Termination Without Cause or due to the Executive’s Permanent Disability

          If the Executive’s employment with the Company is terminated by the Company without Cause, or by reason of Permanent Disability, and subject to and conditional upon the Executive’s ongoing compliance with the provisions of the Non-Compete, Non-Solicitation and Non-Disparagement Agreement attached as Schedule A hereto, the Executive will only be entitled to the following payments and benefits: