Exhibit 10.1
Private & Confidential
This Agreement is dated for reference as of August 1, 2008.

To:         Ms. Christine Day
2285 Clark Drive
Vancouver, BC
V5N 3G9

Dear Ms. Day:

Re:        Executive Employment Agreement

This Agreement contains the terms and conditions of our offer of employment in
the position of Chief Executive Officer with lululemon athletica inc. This
Agreement will take effect as of the Effective Date and will continue until
terminated in accordance with its terms.
If you accept our offer of employment on the terms and conditions set out below,
please execute this Agreement where indicated and return it to Mr. Dennis (Chip)
Wilson.
ARTICLE 1 — INTERPRETATION
1.01 Definitions
          In this Agreement, unless something in the subject matter or context
is inconsistent therewith:
“Affiliate” has the meaning attributed to such term in the Canada Business
Corporations Act and includes each direct and indirect subsidiary of the Company
and any other entities, including joint ventures and franchises, in which the
Company has an interest.
“Agreement” means this agreement, including its recitals and schedules, as
amended from time to time.
“Base Salary” has the meaning attributed to such term in Section 3.01(1).
“Board” means the board of directors of the Company in office from time to time.
“Bonus Plan” means Company’s 2008 Executive Bonus Plan.
“Business” means all the business and activities from time to time carried on by
the Company and its Affiliates, including, without limitation, the design,
retail and wholesale of technical athletic apparel.

 

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“Cause” means an act or failure to act which would constitute cause at common
law, and includes any of the following conduct by, or authorized or permitted
by, the Executive: violation of any contractual or common law duty to the
Company; unlawful activity; activity contrary to professional or ethical
standards; or breach of the terms and conditions of this Agreement which amount
to just cause at common law.
“Company” means lululemon athletica inc., a Delaware corporation.
“Effective Date” of this Agreement and the Executive’s employment under this
Agreement will mean August 1, 2008.
“Executive” means Ms. Christine Day of 2285 Clark Drive, Vancouver BC.
“Existing Options” has the meaning given to it in Section 3.03(2).
“Fair Market Value” has the meaning given to it in the Plan.
“Option” has the meaning given to it in Section 3.03(1).
“Permanent Disability” means the mental or physical condition of the Executive
such that the Executive has been unable, as a result of illness, disease,
disability or similar cause, to fulfill her duties with the Company on a full
time basis for more than 6 consecutive months, or for an aggregate of a 6 month
period within any consecutive 12 months.
“Plan” means the Company’s 2007 Equity Incentive Plan.
“Target Bonus” has the meaning given to it in the Bonus Plan.
“Termination Date” has the meaning given to it in Section 5.01.
ARTICLE 2 — EMPLOYMENT
2.01 Employment
     (1) Subject to the terms and conditions of this Agreement, the Company
will, commencing on the Effective Date, employ the Executive in the position of
Chief Executive Officer.
     (2) The Executive will report to the Board or such person as may be
designated by the Board, provided such designate is a Board member.
     (3) The Executive will have the powers and authority to perform the duties
and functions of the Chief Executive Officer of a corporation, subject always to
the control and direction of the Board.

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     (4) The Executive will be responsible for developing and executing
strategies, advising and reporting to the Board, and for operating the Company
within a budget set by the Board. Subject to the overall direction of the Board,
the Executive will direct and be responsible for the day-to-day management of
the operations of the Company, which responsibilities include, human resources,
information technology and office administration, financial reporting and
accounting, business development, retail operations, guest service and guest
relations.
2.02 Review
          The Executive and the Board agree that they will review the terms and
conditions of the Executive’s employment annually and recommend changes, if any,
to this Agreement to be made only upon mutual agreement.
2.03 Directorships
     (1) During the Executive’s employment with the Company, the Executive
agrees to serve as a director and/or officer of all subsidiaries of the Company.
The Executive acknowledges that, to the extent the Executive serves as a
director or officer of any such entity, the Executive will do so without any
additional remuneration but will be entitled to receive a suitable indemnity for
any liability from any such entity. The Company shall provide director and
officer insurance.
     (2) Notwithstanding any provision of this Agreement or any other agreement
or document to the contrary, the Executive will be deemed to have resigned as a
director and officer of all subsidiaries of the Company contemporaneously with
the date of termination of the Executive’s employment by the Company and will,
immediately on request by the Company, sign any and all documents necessary to
give effect to or confirm such resignation.
     (3) The Executive may serve as a director of no more than two entities
which are unrelated to the Company and which are listed in Schedule B attached,
provided the Executive receives approval of the Board in advance of accepting
any such directorships.
2.04 Term
          The term of this Agreement and the Executive’s employment under this
Agreement will commence on the Effective Date and will continue for an
indefinite period, subject to termination in accordance with the terms of this
Agreement.
2.05 Place of Employment
     (1) When not travelling, the Executive will perform her work and services
for the Company at the principal executive offices of the Company in Vancouver,
British Columbia, and the Executive will reside within a reasonable daily
commuting distance of such place of employment.
     (2) The Executive acknowledges that the performance of her duties and
functions will necessitate frequent travel to other places.

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ARTICLE 3 — REMUNERATION AND BENEFITS
3.01 Base Salary
     (1) The Company will pay the Executive a base salary (the “Base Salary”) in
the amount of CAD$550,000 per annum effective July 1, 2008. Such Base Salary
will be payable in 26 equal instalments during each year of employment, in
accordance with the Company’s usual payroll practices and dates, in arrears by
direct deposit, and subject to deductions required by law or authorized by the
Executive.
     (2) The Board or a committee thereof will review the Base Salary annually.
The Board will not be under any obligation to increase Base Salary, but in no
case will it decrease.
3.02 Bonus
          The Executive will be eligible to receive an annual bonus pursuant to
the terms and conditions of the Bonus Plan and this Agreement. The Executive’s
Target Bonus shall be 75% of Base Salary. The Executive acknowledges that she
has been provided with a copy of the Bonus Plan and that she understands and
accepts each of the terms and conditions thereof.
3.03 Stock Options
     (1) In connection with, and within a reasonable time following, the
execution of this Agreement and the Effective Date, the Executive will be
granted a nonqualified stock option to purchase up to 250,000 shares of the
Company’s common stock (the “Option”) pursuant to the terms and conditions of
the Plan and standard form of stock option agreement to be granted 83,333 on
August 1, 2008; 83,333 on September 2, 2008; and 83,334 on October 1, 2008. The
Option will vest in equal annual instalments over four (4) years, will have an
exercise price equal to the Fair Market Value on the date of grant, as
determined in accordance with the Plan, and will be subject to all of the
provisions of the Plan, except as specifically modified by this Agreement.
     (2) The Executive will retain the right to the following stock options (the
“Existing Options”) as previously agreed with the Executive, on the following
terms:

  (a)   options to purchase up to 250,000 shares of the Company’s common stock
pursuant to the terms and conditions of the Plan, except as specifically
modified by this Agreement, and standard form of stock option agreement, of
which:

  (i)   125,000 options have been granted effective January 18, 2008, and will
vest in equal annual instalments over four (4) years on January 7 of each year,
commencing January 7, 2009;

  (ii)   41,667 options will be granted effective January 7, 2009, and will vest
in equal annual instalments over four (4) years, commencing January 7, 2010;

  (iii)   41,667 options will be granted effective January 7, 2010; and will
vest in equal annual instalments over four (4) years, commencing January 7,
2011; and

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  (iv)   41,666 options will be granted effective January 7, 2011, and will vest
in equal annual instalments over four (4) years, commencing January 7, 2012.

     (3) The Existing Options will have an exercise price equal to the Fair
Market Value on the date of grant, as determined in accordance with the Plan,
and will be subject to all of the provisions of the Plan.
     (4) The Executive acknowledges that she has been provided with a copy of
the Plan and that she understands and accepts each of the terms and conditions
thereof.
     (5) The granting and vesting of all options, including without limitation
the Option and the Existing Options, are conditional upon the Executive
remaining actively employed by the Company on the granting and vesting dates.
     (6) The Board may on its sole discretion consider further grants on an
annual basis based on performance.
3.04 Benefits
          The Executive will be entitled to participate in all of the Company’s
benefit plans, subject to the terms and conditions of such plans, generally
available to its senior executives from time to time, including and without
limitation, health, disability and death, subject to and in accordance with the
terms and conditions of the applicable plans, subject to any express limitations
by this Agreement or unless a greater benefit is expressly provided to the
Executive under this Agreement. The Executive acknowledges that she has been
provided with a summary of the current benefit plans and that she understands
and accepts each of the terms and conditions thereof. The Executive further
acknowledges that the Company may amend or terminate the benefit plans from time
to time, as provided in the applicable plan, fund or arrangement. The Company
will provide coverage for benefit coverage for the Executive’s dependents in the
U.S. to a maximum cost of US $12,000.
          Upon submission of proper invoices, the Company will reimburse the
Executive up to US $17,500 annually for premiums payable with respect to
supplement term life insurance and/or long-term disability insurance.
3.05 Vacation
          The Executive will be entitled to four (4) weeks paid vacation each
year. Such vacation entitlement will be pro-rated for any part of a year. The
Executive will take such vacation at times having regard to the best interests
of the Company. The Executive may not carry forward unused vacation time, except
two (2) weeks per year, but no more than a total entitlement of six (6) weeks in
each year, with the prior written approval of the Board and, except as may be
required by applicable employment standards legislation, will lose the
entitlement to unused vacation.

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3.06 Expenses
          The Company will reimburse the Executive for all reasonable
out-of-pocket expenses properly incurred by her in the course of the Executive’s
employment with the Company, in accordance with the Company’s expense
reimbursement policy in effect as at the date the Executive incurs any such
expenses. The Executive will provide the Company with appropriate statements and
receipts verifying such expenses as the Company may require.
3.07 Executive Perquisites
          The Executive will be eligible to participate in any fringe benefit or
perquisite that the Company provides to other senior executives of the Company,
to the same extent that other senior executives are eligible to participate and
subject to the terms and conditions of such fringe benefits or perquisites.
ARTICLE 4 — EXECUTIVE’S COVENANTS
4.01 Full Time Service
          The Executive will devote all of her time, attention and effort to the
business and affairs of the Company, and will well and faithfully serve the
Company and will use her best efforts to promote the interests of the Company
and its Affiliates.
4.02 Duties and Responsibilities
          The Executive will duly and diligently perform all of the duties
assigned to her while in the employ of the Company.
4.03 Policies, Rules and Regulations
          The Executive will be bound by and will faithfully observe and abide
by all of the policies, rules and regulations of the Company from time to time
in force which are applicable to senior executives of the Company and which are
brought to her notice or of which she should reasonably be aware.
4.04 Conflict of Interest
          The Executive will refrain from any situation in which the Executive’s
personal interest conflicts, or may appear to conflict, with the Executive’s
duties with the Company. The Executive acknowledges that if there is any doubt
in this respect, the Executive will inform the Board and obtain written
authorization.

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4.05 Restrictive Covenants
          The Executive agrees to be bound by the terms and conditions of the
Non-Compete, Non-Solicitation and Non-Disparagement Agreement between the
Company and the Executive, a copy of which is attached to this Agreement as
Schedule A and is incorporated by reference and deemed to be part of this
Agreement.
ARTICLE 5 — TERMINATION
5.01 Termination by the Company
          The Company may terminate the Executive’s employment with the Company
at any time by giving notice in writing to the Executive and stipulating the
last day of employment (the “Termination Date”).
5.02 Termination by the Executive
          The Executive may terminate her employment with the Company at any
time by giving the Company thirty (30) days notice in writing (the “Notice of
Resignation Period”). The Company may waive such notice, in whole or in part, in
which case the Executive shall only be entitled to (i) payment of the
Executive’s Base Salary for the period from the effective date of the waiver of
the Notice of Resignation Period to the end of the Notice of Resignation Period;
(ii) continued group benefit coverage under Section 3.04, subject to and in
accordance with the terms and conditions of the applicable plans, for the period
ending the last day of the Notice of Resignation Period; (iii) the value of the
pro-rated vacation leave with pay for that portion of the calendar year up to
the end of the Notice of Resignation Period, and (iv) any payments or
entitlements under the Plan or the Bonus Plan that the Executive would otherwise
receive during the Notice of Resignation Period.
5.03 Payments on Termination Without Cause or due to the Executive’s Permanent
Disability
          If the Executive’s employment with the Company is terminated by the
Company without Cause, or by reason of Permanent Disability, and subject to and
conditional upon the Executive’s ongoing compliance with the provisions of the
Non-Compete, Non-Solicitation and Non-Disparagement Agreement attached as
Schedule A hereto, the Executive will only be entitled to the following payments
and benefits:

  (a)   Accrued Compensation. The Company will pay the Executive her Base Salary
accrued and unpaid up to and including the Termination Date, including accrued
vacation pay, at the rate in effect at the time notice of termination is given
by the Company.

  (b)   Severance Payment. The Company will pay to the Executive an amount equal
to her Base Salary for a twelve (12) month period following the Termination Date
by way of 26 equal payments on the Company’s regular paydays,. This amount shall
increase at a rate of two (2) months per year of service to a maximum of
eighteen

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      (18) months. These payments shall be inclusive of and in full and final
satisfaction of any entitlement to compensation pursuant to the Employment
Standards Act of British Columbia.

  (c)   Bonus Compensation. The Executive shall not receive any bonus payment
whatsoever pursuant to Section 3.02 or the Bonus Plan which is not already
earned and due to be paid up to and including the Termination Date.

  (d)   Stock Options. The Executive’s rights regarding any stock options,
including the Options or Existing Options, will be governed by the terms of the
Plan as modified by this Agreement. For clarity, the date of “termination of
employment” and “termination of service” under the Plan, and the date on which
employment or service terminates within the meaning of the Plan, shall mean the
Termination Date, notwithstanding any period following the Termination Date
during which the Executive may receive any payments or other benefits under the
terms of this Agreement.

  (e)   Deductions. The Company may deduct from the amounts payable by it to the
Executive or for her benefit pursuant to Section 5.03(a), (b), or (c), any
amounts owing to the Company by the Executive. Any deduction of an amount
payable pursuant to Section 5.03(b) shall not occur until the amount is
otherwise payable to the Executive.

  (f)   Mitigation. The Executive shall not be required to mitigate the amount
of any payments provided for under Section 5.03(b) of this Agreement by seeking
other employment nor shall any payment provided for in such Section be reduced
by any compensation or remuneration and/or benefits earned by the Executive as a
result of employment by another employer or the rendering of services after the
date of termination.

  (g)   Fair and Reasonable. The parties agree that the provisions of Section
5.03 are fair and reasonable and that the amounts payable by the Company to the
Executive or for her benefit pursuant to Section 5.03 are reasonable estimates
of the damages which will be suffered by the Executive in the event of the
termination of her employment with the Company in the circumstances set out in
Section 5.03 and will not be construed as a penalty.

  (h)   No Other Payments or Benefits. The terms and conditions of this Section
5.03 and the amounts paid and the benefits provided to the Executive hereunder
are in full satisfaction of any payments or benefits which the Executive may
otherwise have been entitled to receive in relation to the termination of this
Agreement and her employment hereunder pursuant to the common law and any
applicable laws, including, without limitation, the British Columbia Employment
Standards Act, the British Columbia Human Rights Code, or any of the Bonus Plan,
the Plan or the Company’s programs, policies, plans, contracts or agreements,
whether written or verbal. Upon receipt of the payments and benefits described
herein, the Executive will have no action, cause of action, claim or demand
against the Company, the

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      Company’s Affiliates or any other person arising out of or in relation to
the Executive’s employment with the Company under this Agreement or the
termination of this Agreement and the Executive’s employment hereunder, other
than to enforce the terms of this Agreement and remedy any breach thereof by the
Company. For clarity there shall be no payments for severance in the event of
the Executive’s death and the stock options will be governed by the terms of the
plan.     (i)   Application of Section 409A.

  (i)   Notwithstanding anything set forth in this Agreement to the contrary, no
amount payable pursuant to this Agreement which constitutes a “deferral of
compensation” within the meaning of the Treasury Regulations issued pursuant to
Section 409A of the Code (the “Section 409A Regulations”) shall be paid unless
and until the Executive has incurred a “separation from service” within the
meaning of the Section 409A Regulations. To the extent payments made pursuant
Section 5.03(b) constitute deferred compensation within the meaning of the
Section 409A Regulations, each payment shall be treated as a separate payment.
Further, to the extent that the Executive is a “specified employee” within the
meaning of the Section 409A Regulations as of the date of the Executive’s
separation from service, no amount that constitutes a deferral of compensation
which is payable on account of the Executive’s separation from service shall be
paid to the Executive before the date (the “Delayed Payment Date”) which is the
first day of the seventh month after the date of the Executive’s separation from
service or, if earlier, the date of the Executive’s death following such
separation from service. All such amounts that would, but for this
Section 5.03(i), become payable prior to the Delayed Payment Date will be
accumulated and paid on the Delayed Payment Date.

  (ii)   The Company intends that income provided to the Executive pursuant to
this Agreement will not be subject to taxation under Section 409A of the Code.
The provisions of this Agreement shall be interpreted and construed in favor of
satisfying any applicable requirements of Section 409A of the Code. However, the
Company does not guarantee any particular tax effect for income provided to the
Executive pursuant to this Agreement. In any event, except for the Company’s
responsibility to withhold applicable income and employment taxes from
compensation paid or provided to the Executive, the Company shall not be
responsible for the payment of any applicable taxes on compensation paid or
provided to the Executive pursuant to this Agreement.

5.04 Payments on Termination by Company for Cause
          If the Executive’s employment with the Company is terminated by the
Company for Cause, the Executive will only be entitled to receive the following
compensation:

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  (a)   Accrued Base Salary. The Company will pay the Executive her Base Salary
accrued but unpaid up to and including the Termination Date, including accrued
vacation pay, at the rate in effect at the time the notice of termination is
given.

  (b)   Accrued Expenses. The Company will reimburse the Executive for any
business expenses reasonably incurred by the Executive up to and including the
Termination Date in accordance with the Company’s normal expenses policy
applicable to the Executive at that time.

  (c)   Bonus Compensation. The Executive shall not receive any bonus payment
whatsoever pursuant to Section 3.02 or the Bonus Plan which is not already
earned and due to be paid up to and including the Termination Date.

  (d)   Stock Options. The Executive’s rights regarding any stock options,
including the Options or Existing Options, will be governed by the terms of
section 7(c) of the Plan. For clarity, the date the Executive’s employment or
service is terminated under section 7(c) of the Plan shall mean the Termination
Date.

5.05 Fair and Reasonable
            The Executive acknowledges and agrees that the payments and/or
benefits pursuant to this Article 5 will be in full satisfaction of all terms or
requirements regarding termination of the Executive’s employment, including
termination pay and any other entitlement pursuant to the British Columbia
Employment Standards Act as amended from time to time. Except as expressly
provided in this Article 5, the Executive will not be entitled to any
termination payments, damages, or compensation whatsoever. As a condition
precedent to any payment pursuant to this Article, the Executive agrees to
deliver to the Company prior to any such payment, a full and final release of
all actions or claims in connection with the Executive’s employment or
termination of such employment in favour of the Company, its Affiliates,
subsidiaries, directors, officers, employees and agents, in a form satisfactory
to the Company.
5.06 Return of Property
          Upon termination of her employment with the Company, the Executive
will deliver or cause to be delivered to the Company promptly all books,
documents, money, securities or other property of the Company that are in the
possession, charge, control or custody of the Executive.
5.07 No Termination Claims
          Upon any termination of the Executive’s employment by the Company in
compliance with this Agreement or upon any termination of the Executive’s
employment by the Executive, the Executive will have no action, cause of action,
claim or demand against the Company, its Affiliates, any related or associated
corporations or any other person as a consequence of such termination.
5.08 Resignation as Director and Officer
          Upon any termination of the Executive’s employment under this
Agreement, the Executive will sign forms of resignation indicating her
resignation as a director and officer of the

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Company and any subsidiaries or Affiliates of the Company and of any other
entities of which the Executive occupies similar positions as part of or in
connection with the performance by the Executive of her duties under this
Agreement, if applicable.
5.09 Provisions which Operate Following Termination
          Notwithstanding any termination of the Executive’s employment under
this Agreement for any reason whatsoever and with or without cause, all
provisions of this Agreement necessary to give efficacy thereto, including
without limitation the Non-Compete, Non-Solicitation and Non-Disparagement
Agreement attached as Schedule A, will continue in full force and effect
following such termination.
ARTICLE 6 — ARBITRATION
6.01 Arbitration
          Except as otherwise specifically provided by this Agreement, all
disputes or differences between the Executive and the Company, statutory or
otherwise, will be resolved by arbitration in the City of Vancouver or any other
mutually agreeable location in accordance with the rules of arbitration of the
British Columbia International Commercial Arbitration Center’s Shorter Rules for
Domestic Arbitrations, including but not limited to disputes or differences
relating to the terms or termination of the Executive’s employment. The
Arbitrator shall have the power to order costs in favour of the successful
party. The Company or the Executive may, without waiving its right to compel
arbitration, seek injunctive or other provisional relief from a court of
competent jurisdiction in aid of arbitration, to prevent any arbitration award
from being rendered ineffectual, to enforce the restrictive covenants of the
Executive under this Agreement, and for any other purposes in the interests of
the Company or the Executive.
ARTICLE 7 — MISCELLANEOUS
7.01 Deductions
          The Company will deduct all statutory deductions and any amounts
authorized by the Executive from any amounts to be paid to the Executive under
this Agreement.
7.02 Entire Agreement
          This Agreement, including the Schedules to this Agreement, the Bonus
Plan and the Plan, constitutes the entire agreement between the parties with
respect to the subject matter of this Agreement and cancels and supersedes any
prior understandings and agreements between the parties to this Agreement with
respect to the subject matter of this Agreement [including but without
limitation, the letter of employment between the Executive and the Company dated
December 24, 2007,] and any rights which the Executive may have by reason of any
such prior agreements. There are no representations, warranties, forms,
conditions, undertakings or collateral agreements, express, implied or statutory
between the parties other than as expressly set forth in this Agreement.
Notwithstanding the foregoing, the Non-Compete, Non-Solicitation and
Non-Disparagement

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Agreement attached to this Agreement as Schedule A, continues in full force and
effect to the extent that such Agreement is not inconsistent with the revisions
of this Agreement, in which case the provisions of this Agreement will take
precedence.
7.03 Severability
          If any provision of this Agreement is determined to be invalid or
unenforceable in whole or in part, such invalidity or unenforceability will
attach only to such provision or part of such provision and the remaining part
of such provision and all other provisions of this Agreement will continue in
full force and effect.
7.04 Amendments and Waivers
          No amendment to this Agreement will be valid or binding unless set
forth in writing and duly executed by both of the parties. No waiver of any
breach of any provision of this Agreement will be effective or binding unless
made in writing and signed by the party purporting to give the same and, unless
otherwise provided in the written waiver, will be limited to the specific breach
waived.
7.05 Notices
          Any demand, notice or other communication to be given in connection
with this Agreement must be given in writing and will be given by personal
delivery, by registered mail, or by electronic means of communication addressed
to the recipient as follows:
To the Company:
lululemon athletica
2285 Clark Drive
Vancouver, BC
V5N 3G9

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To the Executive:
Ms Christine Day
2285 Clark Drive
Vancouver, BC
V5N 3G9
          or such other address, individual or electronic communication number
as may be designated by notice given by either party to the other.
7.06 Governing Law
          This Agreement will be governed by and construed in accordance with
the laws of the Province of British Columbia and the laws of Canada applicable
therein.

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7.07 Attornment
          For the purpose of all legal proceedings this Agreement will be deemed
to have been performed in the Province of British Columbia and the courts of the
Province of British Columbia will have jurisdiction to entertain any action
arising under this Agreement. The Company and the Executive each hereby attorns
to the jurisdiction of the courts of the Province of British Columbia.

          Yours truly,    
 
        lululemon athletica inc.    
 
       
By:
  /s/ Dennis J. Wilson               Mr. Dennis (Chip) Wilson     Chairman of
the Board    
 
        SIGNED, SEALED AND DELIVERED
in the presence of:    
/s/ David V. Negus
  /s/ Christine M. Day       Witness Signature   Christine Day
 
             

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SCHEDULE A
Non-Compete, Non-Solicitation and Non-Disparagement Agreement
     This agreement (the “Agreement”) is made and entered into as of August 1,
2008 between lululemon athletica inc. (the “Company”) and Christine Day (the
“Executive”).
     IN ACCORDANCE WITH the letter of employment between the Company and the
Executive dated August 1, 2008 (the “Employment Agreement”) and the terms and
conditions of employment set out therein;
     AND IN CONSIDERATION OF the payment of good and valuable consideration by
the Company to the Executive as set out in Employment Agreement, the receipt and
sufficiency of which is hereby acknowledged, the Executive covenants, warrants
and agrees as follows:
CONFIDENTIALITY

1.   For the purposes of this Agreement, “Confidential Information” means
information disclosed to or known by the Executive as a consequence of or
through her employment with the Company and not otherwise known in the industry
in which the Company is engaged, about the Company’s or any of its subsidiaries’
products, operations, research, processes or services, including but not limited
to information relating to research, development, inventions, copyrights,
patents, licences, manufacture, production, distribution, purchasing,
accounting, financing, engineering, marketing, merchandising, selling, or other
technical or business information or trade secrets of the Company or its
subsidiaries, or about any of the Company’s or its subsidiaries’ customers,
suppliers, vendors or business affiliates. The term “Confidential Information”
also includes any information that the Company has received from others that the
Company is obligated to treat as confidential or proprietary. All information
described above in this section shall be considered Confidential Information and
shall be the sole property of the Company and the Company’s assigns.

2.   The Executive will not directly or indirectly use, disseminate or disclose
any Confidential Information for her own benefit or the benefit of any other
person or entity. The Executive will take all necessary precautions against
unauthorized disclosure of the Confidential Information.

3.   If the Executive is requested or ordered by law to disclose any
Confidential Information, she will advise the Company forthwith of such request
or order and provide to the Company all information concerning such request or
order and the opportunity for the Company to object or intervene, prior to
making any disclosure of Confidential Information.

ASSIGNMENT OF INNOVATIONS

4.   The Executive will make prompt and full disclosure to the Company, will
hold in trust for the sole benefit of Company, and will assign exclusively to
the Company, all her right, title and interest in and to any and all
innovations, discoveries, designs, developments,

A-1

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    improvements, copyrightable material and trade secrets (collectively
“Innovations”) that she, solely or jointly, may conceive, develop or reduce to
practice during the period of time she is employed by the Company (a “Company
Innovation”). To the extent any of the rights, title and interest in any Company
Innovation cannot be assigned by her to the Company, the Executive hereby grants
to the Company an exclusive, royalty-free, transferable, irrevocable, worldwide
license (with rights to sublicense through multiple tiers of sublicensees) to
practice such rights, title and interest. Finally, to the extent any of the
rights, title and interest can be neither assigned nor licensed, the Executive
hereby irrevocably waives and agrees never to assert such rights, title and
interest against the Company or any of the Company’s successors in interest to
such rights. This Section 4 (Assignment of Innovations) shall be construed to
apply to all Company Innovations with which the Executive is involved from this
date forward, as well as all Company Innovations with which the Executive has
been involved since her employment with the Company began.

5.   Exhibit A (“Prior Innovations”), which is attached hereto and incorporated
by this reference, is a list describing all Innovations belonging to the
Executive and made by her prior to her employment with the Company that she
wishes to have excluded from this Agreement (“Prior Innovations”). If there is
no list on Exhibit A, the Executive represents that there are no Prior
Innovations. If in the course of her employment at the Company, the Executive
uses or incorporates into a Company product, process, or machine an Innovation
owned by her or in which she has an interest, the Company is hereby granted and
shall have an exclusive, royalty free, irrevocable, worldwide license to make,
have made, use, and sell that Innovation without restriction as to the extent of
the Executive’s ownership or interest. Notwithstanding the foregoing, the
Executive agrees that she will not incorporate, or permit to be incorporated,
any Innovation owned by her into any Company Innovation without the Company’s
prior written consent.

6.   Cooperation. The Executive will execute any proper oath or verify any
proper document in connection with carrying out the terms of this Agreement. If,
because of her mental or physical incapacity or for any other reason whatsoever,
the Company is unable to secure the Executive’s signature to apply for or to
pursue any application process concerning Innovations assigned to the Company as
stated above, the Executive hereby irrevocably designates and appoints the
Company and its duly authorized officers and agents as her agent and attorney in
fact, to act for her and on her behalf to execute and file any such applications
and to do all other lawfully permitted acts to further the prosecution and
issuance of all appropriate procedures thereon with the same legal force and
effect as if executed by her. The Executive will testify at the Company’s
request and expense in any interference, litigation, or other legal proceeding
that may arise during or after her employment.

NON-DISPARAGEMENT

7.   The Executive undertakes and covenants that she will permanently refrain
from directly or indirectly disclosing, expressing, publishing or broadcasting,
or causing to be disclosed, expressed, published or broadcast, or otherwise
disseminated or distributed in any manner, in her own name, anonymously, by
pseudonym or by a third party, to any person whatsoever, any comments,
statements or other communications (the “Statements”), which a reasonable person
would regard as reflecting adversely on the character, reputation or goodwill of
the

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    Company or any of its subsidiaries or any of its or their employees,
officers, directors, investors, shareholders or agents, or which a reasonable
person would regard as reflecting adversely on their publications, products, or
services, and without limiting the generality of the foregoing, such Statements
shall not be made by means of oral communications, press releases, articles,
letters, telephone calls, telephone messages, e-mail messages, or in postings on
the Internet on websites, or to newsgroups or to listservers.

NON-COMPETITION AND NON-SOLICITATION

8.   For the purposes of this Release, “Competing Business” means:

  (a)   the design, manufacture or distribution of active lifestyle apparel and
accessories (including, without limitation, yoga and other athletic apparel and
accessories); and     (b)   any other business activity the same as or in direct
competition with business activities carried on or being definitively planned by
the Company or its affiliates as of the date of the Executive’s termination of
employment with the Company.

9.   The Executive covenants that for a period of the greater of twelve
(12) months following the termination of her employment for any reason,
including her resignation or the period of payment under section 5.03 of the
Employment Agreement, the Executive will not do any of the following, directly
or indirectly, whether individually or in conjunction with any other person or
entity:

  (a)   engage or participate in any Competing Business in the United States or
Canada;     (b)   become interested in (as owner, stockholder, lender, partner,
co-venturer, director, officer, employee, agent or consultant) any person, firm,
corporation, association or other entity engaged in a Competing Business.
Notwithstanding the foregoing, the Executive may hold the outstanding securities
of any class of any publicly-traded securities of any company;     (c)  
influence or attempt to influence, or solicit, any employee, consultant,
supplier, licensor, licensee, contractor, agent, strategic partner, distributor,
customer or other person to terminate or modify any written or oral agreement,
arrangement or course of dealing with the Company or its affiliates; or     (d)
  solicit for employment, employ or retain (or arrange to have any other person
or entity employ or retain) any person who is at such time employed or retained
by the Company or its affiliates or has been employed or retained by the Company
or its affiliates within the preceding twelve (12) months.

REASONABLENESS OF OBLIGATIONS

10.   The Executive acknowledges that the Company competes on a worldwide basis
and that the geographical scope of the limitations in paragraphs 8 and 9 above
are reasonable and necessary for the protection of the Company’s trade secrets,
business interests, and other Confidential Information. The Executive confirms
that the obligations in paragraphs 8 and 9

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    above are reasonably necessary for the protection of the Company and its
stockholders and, given the Executive’s knowledge and experience, will not
prevent the Executive from being gainfully employed.

MISCELLANEOUS

11.   Upon termination of her employment, or at any time at the Company’s
request before termination, the Executive will promptly (but no later than five
(5) days after the earlier of the termination of her employment or the Company’s
request) return to the Company all papers, drawings, notes, memoranda, manuals,
specifications, designs, devices, documents, diskettes and tapes, and any other
material on any media containing or disclosing any confidential or proprietary,
technical or business information, as well as any keys, pass cards,
identification cards or other property belonging to the Company. The Executive
will submit a written certification of her compliance with her obligations under
this Section 11 at the same time.

12.   It is the intent of this Agreement that if any provision of this Agreement
is found to be overly broad or otherwise unreasonable to any extent by any
court, arbitration board or tribunal of competent jurisdiction adjudicating upon
the validity of the provision, such provision shall be reduced to that which is
in fact declared reasonable by such court, arbitration board or tribunal, or a
subsequent court, arbitration board or tribunal of competent jurisdiction,
requested to make such a declaration.

13.   The Executive has read and understood this Agreement and has had a
reasonable opportunity to obtain independent legal advice prior to signing it.

14.   This Agreement will be governed by and construed in accordance with the
laws of the Province of British Columbia and the laws of Canada applicable in
British Columbia.

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15.   The Executive acknowledges and agrees that a breach of her obligations
under this Agreement would result in damages to the Company that could not be
adequately compensated for by monetary award. Accordingly, in the event of any
such breach by the Executive, in addition to all other remedies available to the
Company at law or in equity, the Company will be entitled as a matter of right
to apply to a court of competent jurisdiction for such relief by way of
restraining order, injunction, decree or otherwise, as may be appropriate to
ensure compliance with the provisions of this Agreement.

IN WITNESS WHEREOF the parties have executed this Agreement.
SIGNED, SEALED AND DELIVERED

         
 
   /s/ Christine M. Day           Christine Day
 
            lululemon athletica inc.
 
       
 
  By:    /s/ Dennis J. Wilson
 
       

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EXHIBIT A
PRIOR INNOVATIONS
None.

 

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EXHIBIT B
LIST OF BOARD OF DIRECTORS