EXHIBIT 10(j)(iv)

 

KATE SPADE & COMPANY
[    ] MARKET SHARE UNIT AWARD
NOTICE OF GRANT:

 

PARTICIPANT NAME:

 

PARTICIPANT ID:

 

GRANT DATE:

 

NUMBER OF UNITS:                        · shares

 

We are pleased to inform you that, pursuant to the Company’s 2013 Stock
Incentive Plan, the Compensation Committee of the Board of Directors of Kate
Spade & Company has made an award of market share units to you, subject to the
terms and conditions set forth in the attached Grant Certificate.

 

*                              *                              *

 

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[      ] MARKET SHARE UNIT AWARD GRANT CERTIFICATE

 

The Grant Certificate (the “Grant Certificate”) is made as of the Grant Date set
forth in the attached Notice of Grant (the “Grant Date”), by and between Kate
Spade & Company (the “Company”) and the employee named in the attached Notice of
Award (the “Participant”).

 

The Compensation Committee (the “Committee”) of the Board of Directors of the
Company (“Board”) has made the award described herein (this “Award”) to the
Participant under the Company’s 2013 Stock Incentive Plan (the “Equity Plan”). 
Any term that is capitalized but not defined herein shall have the meaning given
to such term in the Equity Plan.

 

1.             [      ] Market Share Unit Award.  This Award consists of a
number of market share units (the “MSUs”) set forth in the Notice of Grant (such
number of MSUs, the “Target Shares”).

 

2.             Threshold Section 162(m) Goal.

 

(a)           No part of this Award shall vest and no amount shall be paid (or
shares delivered) in respect of this Award unless and until the Committee
certifies that the Company has achieved an adjusted operating income for the
[      ] fiscal year of $[      ] (the “162(m) Goal”).  If the 162(m) Goal is
not achieved during the [      ] fiscal year, the Award shall be immediately
cancelled and the Participant shall have no further rights with respect to the
Award.

 

(b)           Once the Committee certifies that the 162(m) Goal has been
achieved, the Participant’s entitlement to payment in respect of the Award shall
be determined in accordance with the terms of this Grant Certificate.  In no
event shall the Participant receive payment in respect of the Award in an amount
that exceeds the maximum amount allocated to the Participant in the Committee’s
resolution approving the establishment of the 162(m) Goal.

 

3.             Determination of Earned MSUs.

 

(a)           The “Performance Period” for one-half of the Target Shares shall
be the period from the Grant Date to the second anniversary of the Grant Date
and for the other half of the Target Shares shall be the period from the Grant
Date to the third anniversary of the Grant Date.

 

(b)           The number of MSUs earned for each Performance Period shall equal
(1) the Target Shares for that Performance Period multiplied by (2) the
Settlement Price for that Performance Period divided by (3) the Grant Price;
provided that the number of MSUs earned for any Performance Period may not be
less than 30% or more than 200% of the Target Shares for that Performance Period
(the “Earned MSUs” for that Performance Period).

 

(c)           The Earned MSUs for a Performance Period shall be determined by
the Committee within 60 days following the end of the Performance Period.  The
date the Committee determines the number of Earned Performance Shares for each
performance period is the “Vesting Date”.

 

(d)           The following terms have the meanings indicated below:

 

(1)           “Average Price” for any day means the average official closing
price per share over the 40 consecutive trading days ending with and including
that day (or, if there is no official closing price on that day, the last
trading day before that day).

 

(2)           “Cause” and “Good Reason” have the meanings provided in the
Executive Severance Agreement between the Participant and the Company (as it may
be amended, replaced or supplemented in accordance with its terms); provided
that if there is no Executive Severance Agreement between the Participant and
the Company, then Cause shall mean:

 

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(a)                                 the Participant’s willful and intentional
repeated failure or refusal, continuing after notice that specifically
identifies the breach(es) complained of, to perform substantially his or her
material duties, responsibilities and obligations (other than a failure
resulting from the Participant’s incapacity due to physical or mental illness or
other reasons beyond the control of the Participant), and which failure or
refusal results in demonstrable direct and material injury to the Company or any
of its affiliates;

 

(b)                                 any willful or intentional act or failure to
act involving fraud, misrepresentation, theft, embezzlement, dishonesty or moral
turpitude (collectively, “Fraud”) which results in demonstrable direct and
material injury to the Company or any of its respective affiliates;

 

(c)                                  the Participant’s conviction of (or a plea
of nolo contendere to) an offense which is a felony in the jurisdiction involved
or which is a misdemeanor in the jurisdiction involved but which involves Fraud;
or

 

(d)                                 the Participant’s material breach of a
written policy of the Company or the rules of any governmental or regulatory
body applicable to the Company.

 

For purposes of this definition, no act, or failure to act, on the Participant’s
part shall be deemed “willful” or “intentional” unless done, or omitted to be
done, by the Participant without reasonable belief that the Participant’s action
or omission was in the best interests of the Company.

 

and “Good Reason” shall mean the occurrence of one or more of the following
events:

 

(a)                                 the Participant experiences a material
diminution in duties or responsibilities, without the Participant’s consent
(provided that a change in reporting structure shall not be deemed a diminution
in duties or responsibilities);

 

(b)                                 the Company moves the Participant’s work
location or its principal offices by more than 100 miles (provided that such
move increases the Participant’s commuting distance by more than 100 miles);

 

(c)                                  a material reduction in the Participant’s
base salary; or

 

(d)                                 a material breach by the Company of any of
its material obligations under any employment agreement between the Participant
and the Company then in effect;

 

provided, however, that no event or condition shall constitute Good Reason
unless (x) the Participant gives the Company a written notice of termination for
Good Reason no fewer than 30 days prior to the date of termination and not more
than 90 days after the initial existence of the condition giving rise to Good
Reason, and (y) the grounds for termination (if susceptible to correction) are
not corrected by the Company within 30 days of its receipt of such notice.

 

(3)           “Determination Date” for any Performance Period means the last day
of that Performance Period.

 

(4)           “Grant Price” shall be the Average Price for the Grant Date.

 

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(5)           “Settlement Price” for any Determination Date means the Average
Price for that Determination Date.

 

4.             Adjustments.

 

(a)           No adjustments may be made to the 162(m) Goal.

 

(b)           Notwithstanding anything to the contrary contained herein,
pursuant to Section 3.7 of the Equity Plan, the Committee shall adjust this
Award to reflect any dividend, stock split, reverse stock split,
recapitalization, merger, consolidation, combination, exchange of shares or
similar corporate change, in such manner as the Committee may deem appropriate,
in its sole discretion, to prevent the enlargement or dilution of the
Participant’s rights.

 

5.             Settlement of Award.  The Participant’s Earned MSUs shall be
settled by delivery of shares of Common Stock, on a one-for-one basis, as soon
as administratively possible following the applicable Vesting Date, and in no
event later than 74 days following the year in which the applicable Vesting Date
occurred; provided that settlement shall be subject in all respects to Section 2
and no delivery of shares may occur before the Committee certifies whether the
162(m) Goal has been achieved (which determination will occur no later than the
Determination Date for the first Performance Period).  Shares of Common Stock
shall be issued by the Company in the name of the Participant by electronic
book-entry transfer or credit of such shares to an account of the Participant
maintained with a brokerage firm or other custodian as the Company determines. 
Alternatively, in the Company’s sole discretion, such issuance may be effected
in such other manner (including through physical certificates) as the Company
may determine.

 

6.             Termination of Employment; Change in Control.

 

(a)           Except as set forth in Sections 6(b), (c) and (d), if the
Participant’s employment terminates for any reason prior to a Vesting Date, the
Target Shares for that Performance Period shall be forfeited, there shall be no
Earned MSUs for those Target Shares and the portion of the Award represented
thereby (or the entire Award for a termination on or before the first
Determination Date) shall be cancelled and the Participant shall have no rights
with respect to the Award.

 

(b)           If the Participant’s employment is terminated by the Company
without Cause or pursuant to the Participant’s resignation for Good Reason then:

 

(1)           If the termination date is on or before the Vesting Date with
respect to the first Performance Period, then the Earned MSUs shall equal the
number of Earned MSUs the Participant would have vested in if the Participant
remained employed through the Vesting Date with respect to the first Performance
Period, as determined on the Vesting Date, prorated by multiplying that number
of Earned MSUs by (1) the number of days during the first Performance Period up
to and including the date of termination and dividing by (2) the total number of
scheduled days in the first Performance Period without giving effect to this
Section 6(b).  Following the Vesting Date, the prorated Earned MSUs shall be
settled in accordance with Section 5, and any remaining Target Shares shall be
forfeited in accordance with Section 6(a).

 

(2)           If the termination date is after the Vesting Date with respect to
the first Performance Period but on or prior to the Determination Date with
respect to the second Performance Period, then the Earned MSUs shall equal the
number of Earned MSUs the Participant would have vested in with respect to the
second Performance Period if the Participant remained employed through the
Vesting Date with respect to the second Performance Period, as determined on the
Vesting Date, prorated by multiplying that number of Earned MSUs by (1) the
number of days during the second Performance Period up to and including the date
of termination and dividing by (2) the total number of scheduled days in the
second Performance Period without giving effect to this Section 6(b).  Following
the Vesting

 

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Date, the prorated Earned MSUs shall be settled in accordance with Section 5,
and any remaining Target Shares shall be forfeited in accordance with
Section 6(a).

 

(c)           If the Participant’s employment is terminated by the Company
without Cause or pursuant to the Participant’s resignation for any reason after
the Determination Date, but prior to the Vesting Date, for a Performance Period,
then the Participant shall be entitled to the Earned MSUs for that Performance
Period as determined on the Vesting Date.  Following the Vesting Date, the
Earned MSUs shall be settled in accordance with Section 5, and any remaining
Target Shares shall be forfeited in accordance with Section 6(a).

 

(d)           Change in Control.  In the event the Participant’s employment is
terminated by the Company (or its acquiror) without Cause or pursuant to the
Participant’s resignation for Good Reason on or within two years following a
Change in Control, each Performance Period shall be deemed to have been
completed, the date of termination shall become the Date of Determination for
each Performance Period, all unvested Target Shares shall be deemed to be Earned
MSUs, and the Participant shall vest in that number of Earned MSUs as of the
date of such termination (or, if later, Change in Control).  In the event that
the Earned MSUs become vested in accordance with this Section 6(d), such shares
shall be settled in accordance with Section 5.

 

7.             Nature of MSUs.  The Participant shall have no rights as a
stockholder with respect to this Award unless and until Common Stock has been
delivered to the Participant upon settlement of the Award.  The MSUs are mere
bookkeeping entries and represent only an unfunded and unsecured obligation of
the Company to issue or deliver Common Stock on a future date, subject to the
terms and conditions hereof.  As a holder of MSUs, the Participant has no rights
other than the rights of a general creditor of the Company.  The MSUs carry
neither voting rights nor rights to cash or other dividends.

 

8.             Plan Provisions to Prevail.  The Award is subject to all of the
terms and provisions of the Equity Plan and is subject to all of the terms and
provisions therein.  In the event of any inconsistency between the provisions of
the Grant Certificate and the Equity Plan, the provisions of the Equity Plan
shall govern.

 

9.             Withholding Taxes.  Shares of Common Stock delivered pursuant to
this Award shall be subject to applicable withholding taxes and the Company
shall withhold from the delivery of Common Stock pursuant hereto shares having a
value equal to the minimum amount of federal, state and other governmental tax
withholding requirements related thereto.  If Participant fails to comply with
his or her obligations in connection with the applicable withholding or other
mandatory tax, the Company may refuse to deliver any shares of Common Stock
pursuant to this Award.  Such shares shall be valued at their Fair Market Value
as of the date on which the amount of tax to be withheld is determined. 
Fractional share amounts shall be settled in cash.  In lieu of such withholding,
the Participant may elect, and the Company may require as a condition of
delivery, that the Participant remit to the Company an amount in cash sufficient
in the opinion of the Company to satisfy all or any portion of such tax
withholding requirements.

 

10.          Nature of Payments.  The grant of this Award is in consideration of
services to be performed by the Participant for the Company and constitutes a
special incentive payment.  The Award does not constitute salary, wages, regular
compensation or contractual compensation for the year of grant or any subsequent
year.  The parties agree that the Award is not to be included in or taken into
account in computing the amount of salary or compensation of the Participant for
the purposes of determining (1) any pension, retirement, profit-sharing, bonus,
life insurance or other benefits under any pension, retirement, profit-sharing,
bonus, life insurance or other benefit plan of the Company, (2) any severance or
other amounts payable under any other agreement between the Company and the
Participant, or (3) any other employment related rights or benefits under law or
any plan, program or agreement.  No claim or entitlement to compensation or
damages shall arise from forfeiture of this Award resulting from termination of
employment.  For purposes of clarity, the Participant’s right to vest in the
Award terminates upon the date upon which he or she no longer actively provides
services to the Company, except as expressly provided herein, and does not
continue during any notice

 

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or severance period.  The Company is not responsible for any changes in the
value of this Award due to foreign exchange rate fluctuations.

 

11.          Administration.  By accepting the grant of this Award, the
Participant agrees that no member of the Committee shall be liable for any
action or determination made in good faith with respect to the Equity Plan or
any award thereunder or the Grant Certificate.  Any action taken or decision
made by the Company, the Board or the Committee or its delegates arising out of
or in connection with the construction, administration, interpretation or effect
of the Award or the Grant Certificate shall lie within its sole and absolute
discretion, shall not require the Participant’s consent and shall be final,
conclusive and binding upon the Participant and all persons claiming under or
through the Participant.  Any certifications by the Committee pursuant to the
Award shall be determined in writing and may be in any form determined by the
Committee (including as part of applicable meeting minutes).  By accepting this
Award, the Participant and each person claiming under or through the Participant
shall be conclusively deemed to have indicated acceptance and ratification of,
and consent to, any action taken or decision made under the Award or the Grant
Certificate by the Company, the Board or the Committee or its delegates.

 

12.          Notices.  Any notice to be given to the Company hereunder shall be
in writing and shall be addressed to the Corporate Secretary, Kate Spade &
Company, 5901 Westside Avenue, North Bergen, NJ 07047, or at such other address
as the Company may hereafter designate to the Participant by notice as provided
in this Section 12.  Any notice to be given to the Participant hereunder shall
be addressed to the Participant’s home address of record, or at such other
address as the Participant may hereafter designate to the Company by notice as
provided herein.  A notice shall be deemed to have been duly given when
personally delivered or mailed by registered or certified mail to the party
entitled to receive it.

 

13.          Right of Discharge Preserved.  The grant of the Award and the terms
set forth in the Grant Certificate shall not confer upon the Participant the
right to continue in the employ or other service of the Company, and shall not
affect any right which the Company may have to terminate such employment or
service.

 

14.          Successors and Assigns.  The terms of the Grant Certificate shall
be binding upon and inure to the benefit of the Company and the successors and
assigns of the Company.  Except as otherwise determined by the Committee in its
sole discretion, the Participant’s rights and interests under the Award and the
Grant Certificate may not be sold, assigned, transferred, or otherwise disposed
of, or made subject to any encumbrance, pledge, hypothecation or charge of any
nature.  If the Participant (or those claiming under or through the Participant)
attempts to violate this Section 14, such attempted violation shall be null and
void and without effect, and the Company’s obligation to make any payment to the
Participant (or those claiming under or through the Participant) hereunder shall
terminate.

 

15.          No Right to Future Awards.  The Award is a discretionary award. 
Neither the Grant Certificate or the Equity Plan, nor the grant of the Award
confers on the Participant any right or entitlement to receive another award
under the Equity Plan or any other plan at any time in the future or with
respect to any future period.

 

16.          Governing Law.  The Award and the Grant Certificate shall be
interpreted, construed and administered in accordance with the laws of the State
of Delaware.

 

17.          Entire Agreement.  The Grant Certificate and the Equity Plan
constitute the entire agreement between the parties hereto with regard to the
subject matter hereof.  They supersede all other agreements, representations or
understandings (whether oral or written and whether express or implied) that
relate to the Award.  By accepting the Award, the Participant shall be deemed to
accept all of the terms and conditions of the Grant Certificate and the Equity
Plan.

 

18.          Amendments.  Notwithstanding any provision set forth in the Grant
Certificate or the Equity Plan and subject to all applicable laws, rules and
regulations, the Committee shall have the power to:  (1) alter or amend the
terms and conditions of the Award in any manner consistent with the provisions
of Section

 

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3.1 of the Equity Plan; (2) without the Participant’s consent, alter or amend
the terms and conditions of the Award in any manner that the Committee considers
necessary or advisable, in its sole discretion, to comply with, or take into
account changes in, or interpretations or rescissions of, applicable tax laws,
securities laws, employment laws, accounting rules or standards and other
applicable laws, rules, regulations, guidance, ruling, judicial decision or
legal requirement; (3) ensure that the Awards are not subject to federal, state,
local or foreign taxes prior to settlement or payment, as applicable; or
(4) without the Participant’s consent, waive any terms and conditions that
operate in favor of the Company.  Any alteration or amendment of the terms of
the Awards by the Committee shall, upon adoption, become and be binding on all
persons affected thereby without requirement for consent or other action with
respect thereto by any such person.  The Committee shall give notice to the
Participant of any such alteration or amendment as promptly as practicable after
the adoption thereof.

 

19.          Transferability.  Before the issuance of shares of Common Stock in
settlement of this Award, the Award shall not be subject in any manner to
anticipation, alienation, sale, exchange, transfer, assignment, pledge,
encumbrance, or garnishment by the Participant’s creditors or by the
Participant’s beneficiary, except (1) transfer by will or by the laws of descent
and distribution or (2) transfer by written designation of a beneficiary, in a
form acceptable to the Company, with such designation taking effect upon the
Participant’s death.  All rights with respect to this Award shall be exercisable
during the Participant’s lifetime only by the Participant or the Participant’s
guardian or legal representative.

 

20.          Clawback Policy; Right of Recapture.

 

(a)           Notwithstanding anything to the contrary in this Grant
Certificate, all MSUs or shares of Common Stock issued in settlement of this
Award shall be subject to any clawback policy adopted by the Company from time
to time (including, but not limited to, any policy adopted in accordance with
the Dodd-Frank Wall Street Reform and Consumer Protection Act or other
applicable law), regardless of whether the policy is adopted after the date on
which the MSUs are granted, vest, or are settled by the issuance of shares of
Common Stock.

 

(b)           Notwithstanding anything to the contrary in this Grant
Certificate, all MSUs payable or shares of Common Stock issued in settlement of
this Award shall be subject to the right of recapture as set forth in
Section 2.11 of the Equity Plan.

 

21.          Securities Law Compliance.  Notwithstanding anything to the
contrary contained herein, no shares of Common Stock shall be issued to the
Participant upon vesting of this Award unless the Common Stock is then
registered under the Securities Act of 1933 or, if such Common Stock is not then
so registered, the Company has determined that such vesting and issuance would
be exempt from the registration requirements of the Securities Act.  By
accepting this Award, the Participant agrees not to sell any of the shares of
Common Stock received under this Award at a time when applicable laws or Company
policies prohibit a sale.

 

22.          Section 409A.

 

(a)           This Award is intended to comply with the requirements of
Section 409A of the Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder (the “Code”) so as not to be subject to
taxes, interest or penalties under Section 409A of the Code.  This Grant
Certificate shall be interpreted and administered to give effect to such
intention and understanding and to avoid the imposition on the Participant of
any tax, interest or penalty under Section 409A of the Code in respect of the
Award.

 

(b)           Notwithstanding anything else herein to the contrary, any payment
scheduled to be made to the Participant after the Participant’s separation from
service shall not be made until the date six months after the date of the
Participant’s separation from service to the extent necessary to comply with
Section 409A(a)(B)(i) and applicable Treasury Regulations.  Following any such
six-month delay, all such delayed

 

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payments shall be paid in a single lump sum on the date six months after the
Participant’s separation from service.  For purposes of the Award, “separation
from service” with the Company means a separation from service as defined in
Section 409A of the Code determined using the default provisions set forth in
Treasury Regulation §1.409A-1(h) or any successor regulation thereto.  The
provisions of this paragraph shall only apply if, and to the extent, required to
avoid the imputation of any tax, penalty or interest pursuant to Section 409A of
the Code.

 

(c)           If any provision of the Grant Certificate or the Equity Plan
would, in the reasonable, good faith judgment of the Committee, result or likely
result in the imposition on the Participant, a beneficiary or any other person
of any additional tax, accelerated taxation, interest or penalties under
Section 409A of the Code, the Company may modify the terms of the Grant
Certificate, or may take any other such action, without the Participant’s
consent, a beneficiary or such other person, in the manner that the Company may
reasonably and in good faith determine to be necessary or advisable to avoid the
imposition of such additional tax, accelerated taxation, interest, or penalties
or otherwise comply with Section 409A of the Code.  This Section 22 does not
create an obligation on the part of the Company to modify the Grant Certificate
and does not guarantee that the Award shall not be subject to additional taxes,
accelerated taxation, interest or penalties under Section 409A of the Code.

 

[Remainder of Page Intentionally Left Blank]

 

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KATE SPADE & COMPANY

 

 

By the Compensation Committee
of the Board of Directors:

 

 

 

 

 

 

 

 

By:

 

 

 

 

Authorized Signature

 

 

 

 

 

 

 

 

 

 

Name:

[Name]

 

 

 

 

 

 

 

 

 

 

 

Consented and Agreed to:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[by physical signature]

 

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