EXHIBIT 10.1
 
TAPESTRY, INC.
2018 PERFORMANCE-BASED ANNUAL INCENTIVE PLAN
 
1.            Purpose
 
The purpose of this 2018 Performance-Based Annual Incentive Plan (the “Bonus
Plan”) is to advance the interests of Tapestry, Inc. (the “Company”) and its
stockholders by providing eligible employees with annual incentive compensation
opportunities that are tied to the achievement of performance goals.  The Bonus
Plan is for the benefit of eligible employees who are designated as Participants
(as defined below).  The effective date of the Bonus Plan is August 9, 2018 (the
“Effective Date”) and shall commence with respect to the Company’s fiscal year
beginning July 1, 2018.
 
2.            Administration
 
The Human Resources Committee of the Board of Directors of the Company (the
“Board”) or another committee or subcommittee of the Board, in any such case
consisting of not less than two directors, each of whom shall qualify as
“independent” under the rules of the New York Stock Exchange (the “Committee”),
shall administer the Bonus Plan.  The Committee shall have the right, power and
authority, in its sole discretion, to administer, apply and interpret the Bonus
Plan, and to decide all matters arising in connection with the operation and
administration of the Bonus Plan.  All decisions and determinations by the
Committee with respect to the Bonus Plan shall be final, binding, and conclusive
on all parties for all purposes.  Solely with respect to Participants other than
executive officers of the Company and such other executives of the Company and
Participating Affiliates as may be designated from time to time by the
Committee, the Committee shall have the authority to delegate administration of
the Bonus Plan to one or more employees of the Company.
 
3.            Eligibility and Participation
 
All Employees (as defined below) of the Company and each Participating Affiliate
(as defined below) are eligible to participate in the Bonus Plan.  The Committee
or its delegate shall designate the Employees who shall be eligible to receive
awards under the Bonus Plan.  Each Employee who is designated to receive an
award under the Bonus Plan for a Performance Period (as defined below) shall be
a “Participant” hereunder.  As of the Effective Date, entities listed on Exhibit
A shall be Participating Affiliates whose Employees may be eligible to
participate in the Bonus Plan as determined by the Committee or its designate.
 
“Employee” means any officer or other employee (as determined in accordance with
Section 3401(c) of the Internal Revenue Code of 1986, as amended (the “Code”),
and the Treasury Regulations thereunder) of the Company or Participating
Affiliate, but shall not include any person whose services with the Company are
performed pursuant to a contract or arrangement that purports to treat the
individual as an independent contractor even if such individual is later
determined (by judicial action or otherwise) to have been a common law employee
of the Company rather than an independent contractor.

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“Participating Affiliate” means a subsidiary or affiliate of the Company listed
on Exhibit A or that has, with the consent of the Committee or its delegate,
adopted the Bonus Plan.  The Committee or its delegate may add or remove
Participating Affiliates to the Bonus Plan at any time it determines in its
discretion.
 
4.            Performance Bonus Determinations and Payments
 
(a)            A Participant may receive an award (a “Performance Bonus”) under
the Bonus Plan based upon the attainment of performance goals which are
established by the Committee and relate to one or more financial, operational or
other metrics deemed appropriate by the Committee in its sole discretion with
respect to the Company or any of its subsidiaries or affiliates (the
“Performance Goals”), including but not limited to the following:
 
i.
  net earnings (either before or after one or more of the following: (A)
interest, (B) taxes, (C) depreciation and (D) amortization);

ii.
  economic value added;

iii.
  gross or net sales or revenue;

iv.
  net income (either before or after taxes);

v.
  adjusted net income;

vi.
  operating earnings, income or profit;

vii.
  cash flow (including, but not limited to, operating cash flow and free cash
flow);

viii.
  return measures (including, but not limited to, return on investment, assets,
capital, employed capital, invested capital, equity, or sales);

ix.
  total stockholder return;

x.
  gross or net profit or operating margin;

xi.
  costs;

xii.
  productivity;

xiii.
  expense targets or cost reduction goals;

xiv.
  general and administrative expense savings;

xv.
  operating efficiency;

xvi.
  customer satisfaction and brand perception/brand health;

xvii.
  working capital, or any component thereof;

xviii.
  earnings or diluted earnings per share;

xix.
  adjusted earnings or diluted earnings per share;

xx.
  price per share of the Company’s common stock,

xxi.
  amount of debt or debt reduction;

xxii.
  strategic objectives, development of new product lines and related revenue,
sales and margin targets, market development and acquisitions;

xxiii.
  market share; and

xxiv.
  economic value.

 
The foregoing list of Performance Goals is not exhaustive and the Committee
shall have the discretion to establish such other Performance Goals as the
Committee deems appropriate from time to time.  Each Performance Goal
established by the Committee may be measured either in absolute terms or as
compared to any incremental increase or decrease, or as compared, in a ratio, to
any other listed metric, or as compared to results of a peer group or to market
performance indicators or indices.

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(b)            With respect to each Performance Period, when the outcome of the
Performance Goal(s) remains substantially uncertain, the Committee shall
establish the Performance Goals for the Performance Bonuses for such Performance
Period.  The Performance Goals for the Performance Bonuses shall be based upon
formulas that tie such Performance Bonuses to one or more performance objectives
relating to the Performance Goals.  With respect to each Performance Period, the
Committee shall determine the method by which a Participant’s Performance Bonus
under the Bonus Plan shall be calculated for such Performance Period, based on
the attainment of the applicable Performance Goals, or such other factors or
criteria the Committee deems appropriate in its sole discretion, including,
without limitation, service-related criteria.  Except as may otherwise be
determined in the discretion of the Committee or its delegate, a Participant
must be actively employed by the Company or a Participating Affiliate on the
date a Performance Bonus is paid in order to receive a Performance Bonus.  For
purposes of the Bonus Plan, “Performance Period” shall mean any fiscal year of
the Company (beginning with the Company’s fiscal year ending June 29, 2019) or
such other period as shall be designated by the Committee in its sole
discretion.
 
(c)            After the end of the applicable Performance Period and prior to
the payment of any Performance Bonuses to Participants, the Committee shall
determine or certify in writing with respect to the attainment of the
performance objectives.  Payment of any Performance Bonus shall be made in cash
following the date of such certification and in any event on or prior to the
last day of the “short-term deferral” period under Section 409A of the Code.
 
(d)            Prior to making any Performance Bonus payment, the Committee
shall have the discretion to increase (but not above the limit set forth below)
or decrease the Performance Bonus payment otherwise calculated pursuant to
Section 4(a).  In no event shall the payment to any one Participant under the
Bonus Plan with respect to any Performance Period exceed six million dollars
($6,000,000).
 
(e)            The Committee may, in its sole discretion, provide that one or
more adjustments shall be made to one or more of the Performance Goals, which
adjustments may increase or decrease a Performance Bonus.  Such adjustments may
include, among others, one or more of the following:
 
i.
  items related to a change in accounting principle;

ii.
  items relating to financing activities;

iii.
  expenses for restructuring or productivity initiatives;

iv.
  other non-operating items;

v.
  items related to acquisitions;

vi.
  items attributable to the business operations of any entity acquired by the
Company during the applicable Performance Period;

vii.
  items related to the disposal of a business or segment of a business;

viii.
  items related to discontinued operations that do not qualify as a segment of a
business under United States generally accepted accounting principles (“GAAP”);

ix.
  items attributable to any stock dividend, stock split, combination or exchange
of shares occurring during the applicable Performance Period;

x.
  any other items of significant income or expense which are determined to be
appropriate adjustments;

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xi.
  items relating to unusual or extraordinary corporate transactions, events or
developments;

xii.
  items related to amortization of acquired intangible assets;

xiii.
  items that are outside the scope of the Company’s core, on-going business
activities;

xiv.
  items related to acquired in-process research and development;

xv.
  items relating to changes in applicable laws, regulation or accounting
principles;

xvi.
  items relating to major licensing or partnership arrangements;

xvii.
  items relating to asset impairment charges;

xviii.
  items relating to gains or losses for litigation, arbitration and contractual
settlements,

xix.
  items attributable to expenses incurred in connection with a reduction in
force or early retirement initiative;

xx.
  items relating to any other unusual or nonrecurring events or changes in
applicable laws, accounting principles or business conditions; or

xxi.
  such other adjustments the Committee determines appropriate, in its sole
discretion, taking into account such factors that the Committee deems relevant.

 
The Committee shall have the discretion to determine whether, when and to what
extent an adjustment is necessary or advisable based upon consideration of such
factors the Committee deems appropriate in light of the facts and circumstances.
 
5.            Forfeiture and Claw-Back Provisions
 
The Committee may provide that any Performance Bonuses paid under the Bonus Plan
shall be subject to the provisions of any claw-back policy implemented by the
Company from time to time, including, without limitation, any claw-back policy
adopted to comply with the requirements of the Dodd-Frank Wall Street Reform and
Consumer Protection Act and any rules or regulations promulgated thereunder, to
the extent set forth in such claw-back policy.
 
6.            Other Provisions
 
(a)            Neither the establishment of the Bonus Plan nor the selection of
any individual as a Participant shall give any individual any right to be
retained in the employ of the Company or any subsidiary thereof, or any right
whatsoever under the Bonus Plan other than to receive Performance Bonus payments
if awarded by the Committee.
 
(b)            No member of the Board or the Committee, or any officer or
employee of the Company to whom the Committee may delegate administration of the
Bonus Plan, shall be liable to any individual in respect of the Bonus Plan for
any act or omission of such member or of any other member or of any officer,
agent or employee of the Company.
 
(c)            In the event that any provision of the Bonus Plan shall be held
to be illegal, invalid or unenforceable for any reason, such illegality,
invalidity or unenforceability shall not affect the remaining parts of the Bonus
Plan, and the Bonus Plan shall be construed and enforced as if such illegal,
invalid or unenforceable provisions had never been contained in the Bonus Plan.

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(d)            Any interests of Participants under the Bonus Plan may not be
voluntarily sold, transferred, pledged, alienated, assigned or encumbered, other
than by will or pursuant to the laws of descent and distribution.
 
(e)            The Company shall withhold such amounts as may be required by
federal, state, local, foreign or provincial law from all Performance Bonus
payments under the Bonus Plan.
 
(f)            To the extent not preempted by federal law, the Bonus Plan shall
be governed and construed in accordance with the internal laws of the State of
New York, without regard to the principles of conflicts of law thereof.
 
(g)            The Bonus Plan is an “unfunded” plan providing incentive
compensation and nothing contained herein shall give any Participant any rights
that are greater than those of a general unsecured creditor of the Company.
 
(h)            No Performance Bonus payment under the Bonus Plan shall be deemed
compensation for purposes of computing benefits under any retirement plan of the
Company or its subsidiaries nor affect any benefits under any other benefit plan
now or subsequently in effect under which the availability or amount of benefits
is related to the level of compensation, except to the extent set forth in any
such retirement or other benefit plan.
 
(i)            The provisions of Performance Bonuses need not be the same with
respect to each Participant, and Performance Bonuses to individual Participants
need not be the same in subsequent years.
 
7.            Amendment and Termination
 
The Company reserves the right to amend, suspend or terminate the Bonus Plan at
any time in its sole discretion.

I hereby certify that the Bonus Plan was duly adopted by the Board of Directors
of Tapestry, Inc. as of August 9, 2018.
 
 
TAPESTRY, INC.
 
 
 
 
By:
[signature.jpg]
 
 
Todd Kahn, Secretary

 

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EXHIBIT A

Participating Affiliates
(As of July 1, 2018)
 
LEGAL ENTITY
JURISDICTION
B.B. SAS
Coach Consulting Dongguan, Co. Ltd.
Coach Hong Kong Limited
Coach Hong Kong Limited - Macau Branch
Coach International Limited
Coach International Limited - Korea Branch
Coach Italy Srl
Coach Japan LLC
Coach Korea Limited
Coach Leatherware India Pvt.Ltd.
Coach Malaysia Sdn. Bhd.
Coach Management (Shanghai) Co., Ltd.
Coach Netherlands BV
Coach Netherlands BV - Philippines Branch
Coach Netherlands BV - Taiwan Branch
Coach New Zealand
Coach Operations Singapore Pte. Ltd.
Coach Shanghai Limited
Coach Singapore Pte. Ltd.
Coach Spain SL
Coach Stores Australia Pty Ltd.
Coach Stores Austria GmbH
Coach Stores Belgium BVBA
Coach Stores Canada Corporation
Coach Stores France SARL
 Coach Stores Germany GmbH
Coach Stores Ireland Ltd.
Coach Stores Limited
Coach Stores Puerto Rico, Inc.
Coach Stores Switzerland GmbH
Coach Stores Unipessoal Ltda.
Coach Vietnam Co., Ltd.
Kate Spade & Company International
Limited Kate Spade Canada Corporation
Kate Spade Japan Co., Ltd.
Kate Spade LLC
Kate Spade New York - France SARL
Kate Spade Puerto Rico, LLC
Kate Spade U.K. Limited
Kate Spade U.K. Ltd. (French Branch)
Kate Spade U.K. Ltd. (Ireland Branch)
Shoe Heaven, SL
Shoes by Stuart, SLU
Stuart Weitzman (Monaco) SARL
Tapestry, Inc.
France
China
Hong Kong
Macau
Hong Kong
Korea
Italy
Japan
Korea
India
Malaysia
China
Netherlands
Philippines
Taiwan
New Zealand
Singapore
China
Singapore
Spain
Australia
Austria
Belgium
Canada
France
Germany
Ireland
UK
Puerto Rico
Switzerland
Portugal
Vietnam
Hong Kong
Canada
Japan
US
France
US
UK
France
Ireland
Spain
Spain
Monaco
US