Item 2.02 Results of Operations and Financial Condition.
On October 29, 2020, Tapestry, Inc. ("Tapestry" or the "Company") issued a press
release (the "Press Release") in which the Company announced its financial
results for its first fiscal quarter ended September 26, 2020. The Company also
posted a slide presentation entitled "Investor Presentation" dated October 29,
2020 on the "Presentations & Financial Reports" investor section of its website
(www.tapestry.com). Copies of the Press Release and slide presentation are
furnished herewith as Exhibit 99.1 and Exhibit 99.2, respectively. Information
on the Company's website is not, and will not be deemed to be, a part of this
Current Report on Form 8-K or incorporated into any other filings the Company
may make with the Securities and Exchange Commission (the "Commission").
The information in this Current Report on Form 8-K, including Exhibit 99.1 and
Exhibit 99.2, is being furnished to the Commission and shall not be deemed
"filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (the
"Exchange Act") or otherwise subject to liability under that section, nor shall
it be deemed incorporated by reference in any filing under the Securities Act of
1933, as amended, or the Exchange Act, except as expressly set forth by specific
reference in such a filing.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Appointment of Chief Executive Officer
On October 27, 2020, the Company announced that the Board of Directors (the
"Board") of the Company appointed Joanne Crevoiserat, age 56, as Chief Executive
Officer of the Company, effective as of October 27, 2020 (the "Effective Date").
Ms. Crevoiserat will serve as the Company's principal executive officer. Ms.
Crevoiserat has served as the Company's Interim Chief Executive Officer since
July 21, 2020. Prior to this role, she served as the Company's Chief Financial
Officer since August 2019. Prior to joining the Company, Ms. Crevoiserat was
Executive Vice President and Chief Operating Officer at Abercrombie & Fitch Co.
from February 2017 to June 2019. She joined Abercrombie & Fitch in May 2014 as
Chief Financial Officer and also served as Executive Vice President, CFO and
COO, and Interim Principal Executive Officer during her tenure with the company.
Prior to joining Abercrombie & Fitch, she served in a number of senior
management roles at Kohl's Corporation including Executive Vice President of
Finance and Executive Vice President of Merchandise Planning and Allocation.
Prior to her time with Kohl's, Ms. Crevoiserat held senior finance positions
with Wal-Mart Stores and May Department Stores, including Chief Financial
Officer of the Filene's, Foley's and Famous-Barr brands. She is a graduate of
the University of Connecticut where she received a Bachelor of Science degree in
Finance. Ms. Crevoiserat has served on the board of directors of At Home Group
Inc. since January 2019.
In connection with her appointment as Chief Executive Officer, Ms. Crevoiserat
and the Company entered into a letter agreement (the "Letter Agreement"). The
material terms of the Letter Agreement are summarized below.
Ms. Crevoiserat will be an employee at-will of the Company, meaning either Ms.
Crevoiserat or the Company may terminate Ms. Crevoiserat's employment at any
time, although Ms. Crevoiserat is required to provide the Company with six
months' advance written notice of her intention to resign.
Pursuant to the Letter Agreement, Ms. Crevoiserat will receive a base salary of
$1,300,000 per year, which will be temporarily reduced by 20% as part of the
Company-wide salary reductions that were announced in a Form 8-K filed with the
Commission on April 20, 2020 for so long as such salary reductions are in
effect. See "Salary Reinstatement Actions" below for information on the
Company-wide salary reductions. She will be eligible for a target bonus of 175%
of salary actually paid under the Company's Performance-Based Annual Incentive
Plan ("AIP), starting on the Effective Date (with payment ranging from 0-200% of
target subject to performance). Ms. Crevoiserat's bonus for the portion of
fiscal year 2021 prior to the Effective Date will be based on her target bonus
percentage in effect at that time. The actual amount of this bonus will be based
on the Company attaining criteria determined by the Company's Board in
accordance with the terms of the Performance-Based Annual Incentive Plan. All
performance-based compensation paid to Ms. Crevoiserat is subject to the
Company's incentive repayment policy applicable in the event of a material
restatement of the Company's financial results.
Ms. Crevoiserat will receive appointment equity awards under the Amended and
Restated Tapestry, Inc. 2018 Stock Incentive Plan with an aggregate grant date
value of $3,500,000 (the "Appointment Grant"). The Appointment Grant will be
made up of stock options that will vest ratably over four years and performance
restricted stock units ("PRSUs") that are eligible to vest on the second
anniversary of the grant date based on the Company's achievement of performance
goals established by the Company's Board. Ms. Crevoiserat will be required to
retain all of the net shares earned upon vesting of the PRSUs for two years
following the vesting date.
Ms. Crevoiserat has a guideline annual equity grant with a fair market value on
the grant date of $6,500,000 for fiscal year 2022, to be granted in a fixed
proportion of different equity vehicles as determined by the Board and normally
granted in August, which may include PRSUs, stock options and/or restricted
stock units ("RSUs").
If the Company terminates Ms. Crevoiserat's employment without "Cause", or if
she resigns for "Good Reason" (as each such term is defined in the Letter
Agreement), she will be eligible to receive (i) cash severance equal to
twenty-four (24) months of base salary, (ii) a pro-rated portion of her AIP
bonus for the fiscal year in which any termination occurs, based on actual
Company performance, to be paid on the regular AIP payout date, and (iii)
payment of her AIP bonus on the regular payout date for AIP that was earned and
payable for the prior fiscal year based on actual performance, which has not
been paid as of the date of termination. Ms. Crevoiserat will be subject to the
noncompetition and nonsolicitation covenants set forth in the Agreement, both
during her employment with the Company as well as during the twenty-four (24)
months following termination.
There are no family relationships between Ms. Crevoiserat and any director or
executive officer of the Company and she has no direct or indirect material
interest in any transaction required to be disclosed pursuant to Item 404(a) of
The foregoing summary of the material terms of the Letter Agreement is not
complete and is qualified entirely by reference to the full text of the Letter
Agreement, which will be filed as an exhibit to the Company's next annual report
on Form 10-Q.
Salary Reinstatement Actions
The Company announced on April 20, 2020 that, due to the economic impacts of the
COVID-19 global pandemic, it was reducing the base salaries of its executives
and certain employees above a certain salary threshold, effective June 28, 2020,
the first day of the Company's fiscal year 2021. Effective November 1, 2020,
all impacted employees will have their salaries restored to full salary levels
going forward. As of November 1, 2020, the base salary of:
? Joanne Crevoiserat, the Company's Chief Executive Officer, which had been
reduced by 20%, will revert from the reduced rate of $1,040,000 to the full
rate of $1,300,000;
? Andrea Shaw Resnick, the Company's Interim Chief Financial Officer; Global Head
of Investor Relations and Corporate Communications, which had been reduced by
15%, will revert from the reduced rate of $595,000 to the full rate of
? Todd Kahn, Interim Chief Executive Officer & Brand President, Coach; President,
Chief Administrative Officer, which had been reduced by 20%, will revert from
the reduced rate of $720,000 to the full rate of $900,000; and
? Tom Glaser, Chief Operations Officer, which had been reduced by 20%, will
revert from the reduced rate of $640,000 to the full rate of $800,000.
In addition, in conjunction with the corporate salary reductions, the Board had
determined to reduce the value of the Board's cash retainers by 50%. Effective
November 1, 2020, such cash retainers will be restored to their full values
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. The following exhibits are being furnished herewith:
99.1 Text of Press Release, dated October 29, 2020
99.2 Slide Presentation entitled "Investor Presentation," dated October 29,
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