ITEM 5.02 DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS;
APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS.
(c) Appointment of Joshua Schulman
On August 24, 2021 Capri Holdings Limited (the "Company") announced that Joshua
Schulman is being appointed to the newly-created role of Chief Executive Officer
of Michael Kors effective that same date (the "Commencement Date").
Mr. Schulman, age 50, was President and Chief Executive Officer of Coach brand
at Tapestry Inc. from June 2017 through March 2020. Prior to his tenure at
Coach, Mr. Schulman was with Neiman Marcus Group serving as President of
Bergdorf Goodman from 2012 to 2017, and assuming additional responsibility for
NMG International with the acquisition of MyTheresa.com in 2014. From 2007 to
2012, he was Chief Executive Officer of Jimmy Choo. Previously, Mr. Schulman had
held senior positions in global fashion and luxury brands including Yves Saint
Laurent and Gucci.
There are no arrangements or understandings between Mr. Schulman and any other
person pursuant to which he was selected to be an officer of the Company. Mr.
Schulman does not have any family relationship with any director or other
executive officer of the Company or any person nominated or chosen by the
Company to become a director or executive officer, and there are no transactions
in which Mr. Schulman has an interest requiring disclosure under Item 404(a) of
Regulation S-K.
The following is a description of the material terms of the employment agreement
between the Company, Michael Kors (USA), Inc. ("MK USA", together with the
Company, the "Company Parties") and Mr. Schulman, effective as of August 24,
2021 (the "Schulman Employment Agreement"). Such description is qualified in its
entirety by the terms of the Schulman Employment Agreement which the Company
intends to file with the U.S. Securities and Exchange Commission as an exhibit
to its next quarterly report on Form 10-Q.
The Schulman Employment Agreement provides that Mr. Schulman will serve as the
Chief Executive Officer of Michael Kors. The Schulman Employment Agreement
further provides that, immediately following the earlier of (i) September 1,
2022 and (ii) the date that the Current CEO of Capri (as defined in the Schulman
Employment Agreement) ceases to hold that position for any reason, Mr. Schulman
will be promoted to the position of Chief Executive Officer of the Company,
reporting to the Board of Directors of the Company (the "Board"), and will be
nominated to the Board.
Mr. Schulman's initial base salary as Chief Executive Officer of Michael Kors
will be $1,200,000 per annum. His base salary will increase to $1,300,000 per
annum upon being promoted to Chief Executive Officer of the Company. The base
salary will be subject to annual review and merit increases in the discretion of
the Board.
Beginning in fiscal year 2022, Mr. Schulman will be eligible to participate in
the Capri Holdings Limited Annual Cash Incentive Plan (which is a component of
the Capri Holdings Limited Second Amended and Restated Omnibus Incentive Plan
(together, as the same may be amended from time to time, the "Incentive Plan")).
Pursuant to the Schulman Employment Agreement, annual cash incentives will be
based on a fixed percentage of Mr. Schulman's base salary with the incentive
levels set at 100% target - 200% maximum in his role as Chief Executive Officer
of Michael Kors, and 200% target - 400% maximum in his role as Chief Executive
Officer of the Company. Mr. Schulman's actual annual cash incentive may range
from 0% of salary for performance below established thresholds to 200% or 400%
(as applicable) of salary for maximum performance (interpolated based on the
actual level of attainment) with performance components, measures and target
values established by the Board (or appropriate committee thereof).
Notwithstanding the foregoing, Mr. Schulman's annual cash incentive (i) for
fiscal year 2022 shall be guaranteed at $700,000 and (ii) for fiscal year 2023
shall be guaranteed at $500,000 (each, a "Guaranteed Cash Incentive"). The
Guaranteed Cash Incentive reflects the minimum cash incentive payable to Mr.
Schulman for the applicable fiscal year, and Mr. Schulman may earn an actual
annual cash incentive in excess of the Guaranteed Cash Incentive if actual
fiscal year performance exceeds threshold. Any such additional annual cash
incentive for fiscal year 2022 shall be pro-rated from the Commencement Date.
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All annual cash incentive payments are subject to the terms and conditions of
the Incentive Plan, including that Mr. Schulman be employed by the Company on
the date the annual cash incentive is actually paid to similarly situated
executives. Accordingly, if Mr. Schulman resigns other than for "good reason"
(as defined in the Schulman Employment Agreement) or is terminated for "cause"
(as defined in the Schulman Employment Agreement) prior to the date the annual
cash incentive is actually paid to similarly situated executives, he is not
entitled to receive the annual cash incentive payment. If the Board (or
appropriate committee thereof) determines that Mr. Schulman was overpaid as a
result of certain restatements of the reported financial or operating results of
the Company due to material non-compliance with financial reporting
requirements, then it may reduce the amount of the cash incentive, or require
Mr. Schulman to re-pay the overpaid portion of the cash incentive, as long as
the determination as to the fact that a cash incentive has been overpaid is made
before the end of the third fiscal year following the year for which the cash
incentive performance evaluation was inaccurate, provided that if steps have
been taken within such period to restate the Company's financial or operating
results, such three year time period will be extended until such restatement is
completed.
On the first business day of the month following Mr. Schulman's start date
(assuming he remains employed on the grant date), he will receive a long-term
incentive award under the Incentive Plan in an amount that is valued at
approximately $15,000,000 based on the closing price of the Company's ordinary
shares on the New York Stock Exchange on the date of grant in accordance with,
and subject to, the terms and conditions of such Incentive Plan and the
applicable award agreement. This grant shall be comprised of 100% restricted
share units ("RSUs") that will vest in equal installments over five (5) years on
each anniversary of the grant date. In addition, in accordance with the
Company's annual performance review cycle (which typically occurs in June of
each year), on an annual basis commencing in June 2022, Executive will be
eligible to receive a discretionary long-term incentive award under the
Incentive Plan in form and amount, if any, to be determined in the Company's
sole discretion in accordance with, and subject to, the terms and conditions of
such Incentive Plan.
Mr. Schulman is entitled to 25 vacation days per year under the Schulman
Employment Agreement. In addition, Mr. Schulman will be eligible to participate
in all employee benefit plans and programs, including, without limitation,
medical, dental, vision, life insurance, disability insurance, deferred
compensation program and 401(k), that MK USA provides generally to similarly
situated executives. Mr. Schulman is also entitled to reimbursement for ordinary
and necessary business expenses incurred by him in the performance of his duties
(including the cost of first class airfare) in accordance with the Company's
policies and procedures. MK USA will also reimburse Mr. Schulman for reasonable
and documented legal fees of up to $25,000 incurred in connection with the
negotiation of his offer letter and the Schulman Employment Agreement.
The Schulman Employment Agreement sets forth Mr. Schulman's rights to severance
upon termination of employment. In the event the Company terminates his
employment without "cause" (which the Company shall have the right to do at any
time), or he resigns for "good reason," and subject to Mr. Schulman's providing
the Company with an executed separation agreement and release (that is not
subject to revocation) of claims against the Company and its affiliates and
their respective directors, officers, employees, agents and representatives,
which release is satisfactory in form and content to the Company's counsel, the
Company agrees to provide continuation of Mr. Schulman's then-current base
salary for a two (2) year period commencing upon the termination date plus a
payment equivalent to two (2) years of his annual cash incentive payment at
target plus the annual cash incentive for the fiscal year in which the
termination date occurs (pro-rated based on the termination date within the
performance period) plus the value of accrued by unused vacation (together, the
"Schulman Severance Payments").
The Schulman Severance Payments shall be payable in substantially equal
installments in accordance with the normal payroll practices of the Company
(except for the annual cash incentive for the fiscal year in which the
terminated date occurs which shall be payable at the same time such annual cash
incentive is paid to other similarly situated executives) less applicable
withholdings and deductions, and shall not be offset or otherwise reduced by any
compensation that Mr. Schulman may receive from other employment (including
self-employment) during such payment period. In addition, if the Company is
required to make the Schulman Severance Payments described herein, Mr. Schulman
shall also be eligible to vest in any long-term incentive award that has a
. . .
Item 8.01. Other Events.
On August 24, 2021, the Company issued a press release announcing that Joshua
Schulman has been appointed to the newly created role of Chief Executive Officer
of Michael Kors effective that same date, and that he will succeed John D. Idol
as Chief Executive Officer of the Company in September 2022 when Mr. Idol will
become Executive Chairman. The full text of the press release is attached hereto
as Exhibit 99.1 and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No.
99.1 Capri Holdings Limited Press Release, dated August 24, 2021
Cover Page Interactive Data File (embedded within the inline XBRL
104 document)
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