Form 8-K lululemon athletica inc. For: Oct 19
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E-mailUNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
October 19, 2015
Date of Report (Date of earliest event reported)
lululemon athletica inc.
(Exact name of registrant as specified in its charter)
Delaware | 001-33608 | 20-3842867 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||
1818 Cornwall Avenue
Vancouver, British Columbia
Canada, V6J 1C7
(Address of principal executive offices, including Zip Code)
Registrant’s telephone number, including area code: (604) 732-6124
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
On October 21, 2015, we announced some strategic changes to our organizational structure which are intended to further elevate and reinforce our design and innovation driven brand focus. As a result of these changes, we have eliminated the role of Chief Product Officer and Tara Poseley, who has served as our Chief Product Officer since she joined lululemon in October 2013, will be leaving lululemon after providing transition consulting services through the end of March 2016.
In connection with Ms. Poseley’s termination of employment, we entered into a Separation Agreement and Release on October 19, 2015. Under this agreement, Ms. Poseley agreed to provide transition consulting services to us until the end of March 2016. We agreed to pay Ms. Poseley payments equal to her base salary in accordance with our usual payroll practices and dates during the period she provides consulting services to us. In addition, Ms. Poseley will be eligible to receive a bonus under our Executive Bonus Plan if she continues to provide these services through the end of the fiscal year and her outstanding equity awards will continue to vest according to the terms of our equity incentive plans and applicable equity award agreements during the period she provides consulting services to us.
A copy of the press release we issued about this matter is attached as Exhibit 99.1.
Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits.
Exhibit No. | Description | |
10.1 | Separation Agreement and Release between lululemon and Tara Poseley, dated October 19, 2015. | |
99.1 | Press release dated October 21, 2015. | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
lululemon athletica inc. | ||||||
Dated: October 23, 2015 | /s/ STUART HASELDEN | |||||
Stuart Haselden | ||||||
Chief Financial Officer | ||||||
EXHIBIT INDEX
Exhibit No. | Description | |
10.1 | Separation Agreement and Release between lululemon and Tara Poseley, dated October 19, 2015. | |
99.1 | Press release dated October 21, 2015. | |
Exhibit 10.1
SEPARATION AGREEMENT AND RELEASE
This Separation Agreement and Release Agreement is dated October 19, 2015, and is between lululemon athletica, inc., a Delaware corporation (“lululemon”) and Tara Poseley, an individual (“Ms. Poseley”).
A. Ms. Poseley and lululemon entered into an Executive Employment Agreement dated October 15, 2013 (the “Employment Agreement”).
B. Ms. Poseley and lululemon have mutually determined that it is in the best interests of lululemon and Ms. Poseley for Ms. Poseley’s employment with lululemon to terminate effective as of the close of business on October 19, 2015 (the “Termination Date”) and for such termination to be treated as a termination of employment without Cause, as defined in section 1.01 of the Employment Agreement. Ms. Poseley and lululemon have also mutually determined that it is in the best interests of lululemon and Ms. Poseley for Ms. Poseley to provide transition consulting services to lululemon for the period beginning on the Termination Date and ending on the earlier of March 31, 2016 and the termination of the consulting services in accordance with paragraph 4 (such date, the “Separation Date”).
C. Section 5.03 of the Employment Agreement specified certain payments and benefits to be paid or provided to Ms. Poseley if her employment with lululemon was terminated by lululemon without Cause. This agreement is the full general release referenced in section 5.03(c)(iv) of the Employment Agreement.
D. The parties desire to settle all claims and issues that have, or could have, been raised, in relation to Ms. Poseley’s employment with lululemon and arising out of or in any way related to the acts, transactions or occurrences between Ms. Poseley and lululemon to date, including, but not limited to, her employment with lululemon or the termination of that employment, on the terms set forth below.
lululemon and Ms. Poseley therefore agree as follows:
1. Ms. Poseley’s employment with lululemon will end on the Termination Date and her consulting services described in paragraph 4 will end on the Separation Date. Ms. Poseley shall use her best efforts to perform her employment responsibilities and fulfil her employment obligations until the Termination Date. Ms. Poseley must resign from any and all other positions that she holds with lululemon or any affiliated entity on the Termination Date and will sign any documentation that lululemon reasonably requests to confirm such resignations. Ms. Poseley and lululemon agree that the Non-Competition Period and the Non-Solicitation Period stated in article 4 of the Restrictive Covenant Agreement attached as Schedule A to the Employment Agreement will continue until 12 months after the Separation Date.
2. lululemon shall pay or provide the payments and benefits to Ms. Poseley described in section 5.03 of the Employment Agreement upon the terms and conditions stated therein except that:
a) Notwithstanding section 5.03(1)(c) of the Employment Agreement, the Severance Payment described in such section shall be ten months of base salary (at the rate in effect on the Termination Date) and shall be paid in equal installments on lululemon’s normal paydays beginning on the first regular payday occurring after the Separation Date;
b) Notwithstanding section 5.03(1)(b) of the Employment Agreement, Ms. Poseley’s entitlement to any 2015 bonus compensation will be as described in paragraph 5 of this agreement; and
c) Notwithstanding section 5.03(1) of the Employment Agreement, Ms. Poseley will be entitled to participate in all of lululemon’s benefit plans generally available to its senior executives until October 31, 2015, subject to the terms and conditions of such plans.
3. In addition to the payments described in paragraph 2 of this agreement, for a period of twelve months after the Termination Date, lululemon shall reimburse Ms. Poseley for expenses incurred after the Termination Date to relocate from Vancouver, B.C., in an amount not to exceed US$50,000. Ms. Poseley must provide lululemon with appropriate statements and receipts verifying such expenses as requested by lululemon. Promptly after the Termination Date, lululemon shall pay Ms. Poseley a lump sum of US$15,000, less applicable withholdings or deductions required by law, for her use of outplacement services after the Termination Date, and an additional lump sum of US$15,000, less applicable withholdings or deductions required by law, for her use of the services of an accountant to assist with her tax filings in Canada and the USA.
4. Ms. Poseley shall provide transition consulting services (“Consulting Services”) to lululemon for the period beginning on the Termination Date and ending on the Separation Date (such period, the “Consulting Period”). Ms. Poseley shall provide Consulting Services at reasonable times as requested by lululemon’s chief executive officer. Subject to Ms. Poseley’s continued availability to perform Consulting Services and her use of commercially reasonable efforts to perform requested Consulting Services, lululemon shall pay Ms. Poseley payments during the Consulting Period equal to her base salary as of the Termination Date in accordance with lululemon’s usual payroll practices and dates (such payments, the “Consulting Fees”). Ms. Poseley acknowledges that she is an independent contractor for all purposes at all times during the Consulting Period. lululemon acknowledges that it does not retain a right to control the manner in which Ms. Poseley performs Consulting Services. Ms. Poseley and lululemon agree that the Consulting Fees are not to be treated as employment income for tax purpose and, accordingly, for United States tax purposes will be treated as form 1099 income and are not to be reduced by tax-related deductions and withholdings. Unless otherwise agreed by Ms. Poseley and lululemon, Ms. Poseley may perform Consulting Services at a location or locations of her choosing outside of lululemon’s offices. Ms. Poseley is not to be prohibited from seeking or obtaining employment during the Consulting Period so long as she is not in violation of the terms of the Restrictive Covenant Agreement. Ms. Poseley may terminate the Consulting Services at any time by delivering lululemon a written notice of termination. lululemon may terminate the Consulting Services at any time by delivering Ms. Poseley a written notice of termination only if Ms. Poseley fails to comply with the terms of the Restrictive Covenant Agreement. Ms. Poseley acknowledges that compliance with all her obligations under the Restrictive Covenant Agreement is a material part of her Consulting Services and that, in addition to all other rights and remedies available to lululemon at law, she must repay lululemon all Consulting Fees if she violates the terms of the Restrictive Covenant Agreement.
5. Ms. Poseley is to be deemed a “Consultant” under lululemon’s 2014 Equity Incentive Plan (the “Equity Plan”) during the Consulting Period and will be considered as providing service to lululemon during the Consulting Period for purposes of the Equity Plan and all applicable award agreements thereunder. Ms. Poseley’s fiscal 2015 bonus payout under lululemon’s Executive Bonus Plan (the “Bonus Plan”) is to be deemed earned as of the end of fiscal 2015 and Ms. Poseley will be eligible to receive such bonus payout according to the Bonus Plan if the Consulting Services have not been terminated in accordance with paragraph 4 before the end of fiscal 2015 to the same extent that Ms. Poseley would have been eligible to receive such bonus payout if she had remained an employee of lululemon through the date on which bonus payments are made to participants under the Bonus Plan. Any applicable payment under the Bonus Plan will be paid at the same time other participants are paid under the Bonus Plan.
6. Ms. Poseley acknowledges and agrees that the above considerations constitute adequate legal consideration for the promises and representations made by Ms. Poseley in this agreement and are benefits to which Ms. Poseley is not otherwise entitled.
7. Ms. Poseley unconditionally, irrevocably and absolutely releases and discharges lululemon, and any parent and subsidiary corporations, divisions and affiliated corporations, partnerships or other affiliated entities of
lululemon, past and present, as well as lululemon’s officers, directors, agents, successors and assigns (collectively, the “Released Parties”), from all claims related to the transactions or occurrences between them to date, to the fullest extent permitted by law, including, but not limited to, Ms. Poseley’s employment with lululemon, the termination of Ms. Poseley’s employment, and all other losses, liabilities, claims, charges, demands and causes of action, known or unknown, suspected or unsuspected, arising directly or indirectly out of or connected with Ms. Poseley’s employment with lululemon. This release is intended to have the broadest possible application and includes, but is not limited to, any tort, contract, common law, constitutional or other statutory claims arising under local, provincial, state or federal law, including, but not limited to alleged violations of the British Columbia Employment Standards Act, the British Columbia Human Rights Code and (if applicable), and all claims for attorneys’ fees, costs and expenses. Ms. Poseley expressly waives her right to recovery of any type, including damages or reinstatement, in any administrative or court action, whether provincial, state or federal, and whether brought by Ms. Poseley or on her behalf, related in any way to the matters released herein. Ms. Poseley acknowledges that she may discover facts or law different from, or in addition to, the facts or law that she knows or believes to be true with respect to the claims released in this agreement and agrees, nonetheless, that this agreement and the release contained in it is and remains effective in all respects notwithstanding such different or additional facts or the discovery of them. Ms. Poseley declares and represents that she intends this agreement to be complete and not subject to any claim of mistake, and that the release herein expresses a full and complete release and she intends the release herein to be final and complete. Ms. Poseley executes this release with the full knowledge that this release covers all possible claims against the Released Parties, to the fullest extent permitted by law.
8. Ms. Poseley shall comply with continuing covenants and obligations contained in the Restrictive Covenant Agreement and in any other agreement with lululemon previously signed by her.
9. By entering into this agreement, the Released Parties make no admission that they have engaged, or are now engaging, in any unlawful conduct.
10. The parties understand and acknowledge that this agreement is not an admission of liability and shall not be used or construed as such in any legal or administrative proceeding. Ms. Poseley is advised to consult with an attorney before executing this agreement.
11. Ms. Poseley acknowledges and agrees that (a) she has read and understands the terms of this agreement; (b) she has been advised in writing to consult with an attorney before executing this agreement; (c) she has obtained and considered such legal counsel as she deems necessary; and (d) by signing this agreement, she acknowledges that she does so freely, knowingly, and voluntarily.
12. In the event any provision of this agreement is found unenforceable, the unenforceable provision is to be deemed deleted and the validity and enforceability of the remaining provisions is not to be affected thereby. This agreement may be pled as a full and complete defense to, and may be used as a basis for an injunction against, any action, suit or other proceeding that may be prosecuted, instituted or attempted by Ms. Poseley in breach hereof. The validity, interpretation and performance of this agreement shall be construed and interpreted according to the laws of British Columbia and the laws of Canada applicable therein, and any action or proceeding arising out of or in connection with this agreement may be brought only in the courts of competent jurisdiction in the province of British Columbia. This agreement does not grant Ms. Poseley any rights with respect to continued employment by lululemon. This agreement is intended to be the entire agreement between the parties and supersedes and cancels all other and prior agreements, written or oral, between the parties regarding this subject matter, except that this agreement does not supersede, cancel or limit sections 4.03 (Policies, Rules and Regulations), 4.04 (Conflicts of Interest), 4.05 (Restrictive Covenants), 5.05 (Fair and Reasonable), 5.06 (Return of Property), 5.07 (No Termination Claims), 5.08 (Resignation as Director and Officer) or 5.09 (Provisions which Operate Following Termination) or article 6 (Miscellaneous) of the Employment Agreement; section 5.03 (Payments on Termination Without Cause, for Constructive Dismissal, or due to the Executive’s Disability) of the Employment Agreement, as modified and amended by paragraph 2; the Restrictive Covenant Agreement; the Plan and all applicable award agreements thereunder; the Bonus Plan or any other obligations specifically preserved under this agreement. This agreement
may be amended only by a written instrument executed by all parties hereto. The parties may sign this agreement in several counterparts, each of which will be deemed an original but all of which together will constitute one instrument.
The parties are signing this agreement on the date stated in the introductory clause.
lululemon athletica inc. | |
/s/ LAURENT POTDEVIN | |
Laurent Potdevin | |
Chief Executive Officer | |
/s/ TARA POSELEY | |
Tara Poseley | |
Exhibit 99.1
lululemon Announces Organizational Changes to Elevate Design and Innovation
Lee Holman Appointed as Company's Creative Director
VANCOUVER, British Columbia--(BUSINESS WIRE)-- lululemon athletica inc. (NASDAQ: LULU) today announced strategic changes to its organizational structure that further elevate and reinforce the Company's design and innovation-driven brand focus.
Lee Holman, formerly Senior Vice President, Women's, has been appointed as lululemon's Executive Vice President, Creative Director, effective immediately. In this new role, Mr. Holman will oversee both Men's and Women's product design and will report directly to lululemon's CEO, Laurent Potdevin.
"Standing out requires a fierce commitment to constant innovation in functional performance. Our unwavering dedication to a singular design vision and craftsmanship has made us the global market leader in the category we've created and continue to define," said lululemon's CEO, Laurent Potdevin. "Changes to the organizational structure, including the new role of Creative Director, are critical to executing upon our 10-year vision," added Mr. Potdevin.
As a result of these changes, lululemon has eliminated the role of Chief Product Officer. Tara Poseley, who joined the Company in October 2013 as Chief Product Officer, will be leaving the Company after a transition period. "We greatly appreciate Tara's contributions, including the build-out of strong product, innovation, and merchandising teams, and we wish her continued success in the future," said Mr. Potdevin.
The establishment of a Creative Director position will further unify Men's and Women's design under a singular creative vision, strengthening the design ethos of the brand. Mr. Holman joined lululemon in 2014 with 20 years of design and leadership experience, including senior positions at Nike, where he served as Creative Director of Nike Sportswear and most recently as Vice President of Global Apparel, Innovation and Equipment Design Men's & Women's. Prior to Nike, Lee was Creative Director for high profile brands such as Burberry, and spent several years at Abercrombie & Fitch, Levi Strauss & Co, and Paul Smith. Mr. Holman obtained his MA Fashion Design from Central Saint Martins. Felix del Toro, Senior Vice President & General Manager, Men's, will continue to oversee the Men's business and will report to Mr. Holman.
Dr. Tom Waller has been promoted to Senior Vice President, Whitespace™ reporting directly to CEO Laurent Potdevin, further reinforcing product R&D and innovation as the core pillar and growth driver for lululemon. Whitespace, lululemon's team of scientists and engineers, will continue to drive long-term innovation. Prior to joining lululemon in 2012, Dr. Waller was Head of Aqualab at Speedo International. As Director of R&D at Progressive Sports Technologies, he provided strategic consultancy to global brands, as well as federation and elite athletes.
Stuart Haselden, Chief Financial Officer, will assume broader operational responsibilities adding Executive Vice President, Operations to his title. As operational excellence continues to be a key priority, lululemon has begun a search for a newly created position of Chief Supply Chain Officer reporting into Haselden, who will be responsible for continuing to optimize the company's scalable, global supply chain across multiple categories.
About lululemon athletica inc.
lululemon athletica (NASDAQ: LULU) is a yoga-inspired athletic apparel company that creates components for people to live long, healthy and fun lives. By producing products that help keep people active and stress free, lululemon believes that the world will be a better place. Setting the bar in technical fabrics and functional designs, lululemon works with yogis and athletes in local communities for continuous research and product feedback. For more information, visit www.lululemon.com.
ICR, Inc.
Investors:
Joseph Teklits/Caitlin Morahan, 203-682-8200
or
Media:
Alecia Pulman, 203-682-8224
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