EMPLOYEE SHARE PURCHASE PLAN



 





Exhibit 10.3




lululemon athletica inc.




EMPLOYEE SHARE PURCHASE PLAN





 









 








lululemon athletica inc.




EMPLOYEE SHARE PURCHASE PLAN




Article 1 — Definitions




1.1 Definitions




In this Plan, unless the context otherwise requires:



Administration Agreement




means the administration, trust, administrative services, plan services or other agreement entered
into by lululemon with the Administrator pursuant to section 9.1 or 9.2 then in effect, as the same
may be amended pursuant to section 9.3.



Administrator




means the party appointed as Administrator and service provider in connection with the
administration of this Plan pursuant to section 9.1 or 9.2 then acting as such.



Applicable Tax Legislation




means the Income Tax Act (Canada) and the regulations made thereunder and applicable provincial
income tax legislation and regulations made thereunder or, as applicable, the Internal Revenue Code
of 1986, as amended.



Board of Directors




means the board of directors of lululemon.



Canadian Employee




means an Employee who is resident in Canada within the meaning of that expression as used in the
Income Tax Act (Canada) and is employed by a Canadian Employer.



Canadian Employer




means an Employer that is organized under the laws of Canada or a province thereof which carries on
business in Canada and deals at non-arm’s length with lululemon.



Committee




means the Compensation Committee of the Board of Directors and shall include (i) any successor to
such committee, and (ii) any committee of the Board of Directors which may, subsequent to the
implementation of this Plan, be established by the Board of Directors and to which the Board of
Directors has delegated responsibility for administration of this Plan (any successor or other
committee being herein referred to as a “Successor Committee”), provided
that if the Compensation Committee of the Board of Directors shall cease to exist without any
Successor Committee coming into existence “Committee” shall mean the Board of Directors.



Common Shares




means common shares, par value U.S. $0.01 per share, in the capital of lululemon.



 









 





Declaration of Trust




in respect of any Member, means the separate application and declaration of trust (including any
addenda in respect of “locked-in funds”) entered into by the Trustee and such Member pursuant to
the Sponsor Agreement in the form approved by the Trustee, as amended by the Trustee from time to
time, which creates, governs and sets out the terms of the registered retirement savings plan under
the Applicable Tax Legislation under which such Member is the annuitant within the meaning of
Applicable Tax Legislation.



Earnings




means, with respect to any Member, the total base earnings of such Member from such Member’s
Employer, but excluding overtime pay, commissions, bonus payments, on-call pay, gratuities and
other special compensation.



Employee




means a person who is an employee of an Employer.



Employer




means:



     (a) lululemon; or



     (b) a Participating Subsidiary.



Full-Time Employee




means:




	 	(a)	 	an Employee who:






	 	(i)	 	is in a full-time year round position and works 24 or more
hours per week;
	 
	 	(ii)	 	is in a position of store manager or assistant store manager
and works year round with no break in service and works 24 or more hours per
week; or
	 
	 	(iii)	 	is in a position of “Educator” and works year round with no
break in service and works 24 or more hours per week; or






	 	(b)	 	an Employee or class of Employees whose participation in the Plan is approved
in writing by the Chief Executive Officer of lululemon.





lululemon




means lululemon athletica inc., a Delaware corporation.



Market Value




on any date, means the average of the closing prices per share of at least a board lot of Common
Shares on The Toronto Stock Exchange for the five trading days immediately preceding such date on
which at least a board lot of Common Shares traded.



 









 





Member




means a Full-Time Employee who is enrolled in this Plan pursuant to the provisions hereof.



Non-Registered ESPP




means a Non-Registered ESPP Account established and maintained by the Administrator with respect to
a Member under this Plan that is not a Registered ESPP.



Non-Registered ESPP Account




means, with respect to any Member, an account of such Member established and maintained by the
Administrator pursuant to section 10.1.



Participating Subsidiary




means any Subsidiary of lululemon that has been designated by the Board of Directors, the Committee
or the Chief Executive Officer of lululemon as participating in this Plan unless such designation
has been revoked by the Board of Directors, the Committee or the Chief Executive Officer as the
case may be.



Plan




means this Employee Share Purchase Plan (“ESPP”) which will consist of the Non-Registered ESPPs and
the Registered ESPPs.



Registered ESPP




means a Registered ESPP Account established and maintained by the Trustee with respect to a Member
under this Plan pursuant to a Declaration of Trust that is a “registered retirement savings plan”
under the Applicable Tax Legislation.



Registered ESPP Account




means with respect to any Member, an account of such Member established and maintained by the
Trustee pursuant to section 10.2.



Sponsor Agreement




means the RSP Sponsor Agreement entered into by lululemon with the Trustee pursuant to section 9.4
or 9.5 then in effect, as the same may be amended pursuant to section 9.6.



Subsidiary




means a “subsidiary” as that term is defined in the Securities Act (British Columbia).



Trustee




means (i) in respect of Non-Registered ESPPs, the Administrator, and (ii) in respect of Registered
ESPPs, the party appointed as Trustee under this Plan pursuant to section 9.4 or 9.5 then acting as
such.



Year




means a year ending December 31.



 









 





Article 2 — Eligibility




2.1 Eligibility




Except to the extent that an Employee’s ability to re-enrol in this Plan is restricted as provided
in section 7.5, all Full-Time Employees are eligible to enrol and participate in this Plan and may
enrol and participate in this Plan at any time after:




	 	(a)	 	in the case of a Full-Time Employee who is part of the “Senior Management
Team”, as designated by the Chief Executive Officer of lululemon, commencing employment
with such Full-Time Employee’s Employer;
	 
	 	(b)	 	in the case of all other Full-Time Employees, the commencement of the first
calendar month following the end of the Employee’s three-month initial probation
period.





2.2 Re-enrolment




If the employment of a Member is terminated as described in section 7.9 and the Employee thereafter
becomes a Full-Time Employee, for the purposes of this Plan, except to the extent that an
Employee’s ability to re-enrol or recommence participation in this Plan is restricted as provided
in section 7.5, the Employee will be considered to be a new Employee.



2.3 No Right to Employment




Participation in this Plan is entirely voluntary and any decision by a Full-Time Employee not to
participate will not affect such Employee’s employment with such Employee’s Employer. Nothing
contained in this Plan gives any Full-Time Employee who participates in this Plan the right to be
employed or to continue to be employed by an Employer.



Article 3 — Enrolment




3.1 Enrolment by Canadian Employees




A Full-Time Employee who is a Canadian Employee who wishes to participate in a Non-Registered ESPP
or a Registered ESPP must:




	 	(a)	 	submit to lululemon or the Administrator an enrolment form authorizing the
Employee’s Employer to deduct from the Earnings of such Employee such contributions to
this Plan as such Employee may designate in such enrolment form (subject to changes
which the Employee may thereafter make pursuant to section 4.1);
	 
	 	(b)	 	open an account with the Administrator;
	 
	 	(c)	 	if the Employee wishes to enrol and participate in a Registered ESPP, complete
and submit to the Administrator a group application form;




 









 






	 	(d)	 	if the Employee wishes to enrol and participate in both a Non-Registered ESPP
and a Registered ESPP, designate a percentage of the Member’s contributions to this
Plan that the Employee wishes to contribute to (i) the Non-Registered ESPP and (ii) the
Registered ESPP;
	 
	 	(e)	 	submit to the Administrator or lululemon a beneficiary designation form; and
	 
	 	(f)	 	express the agreement of such Employee to be bound by the terms and conditions
of this Plan;





in each case in the form and manner from time to time required by lululemon, the Administrator or
the Trustee.



3.2 Employee Solely Responsible re Contribution Limits to Registered ESPP




For greater certainty, the Employers and Administrator and Trustee assume no responsibility in
relation to whether any Employee is or continues to be eligible under applicable laws to
participate in a Registered ESPP or contribution limits applicable to any Employee to any
Registered ESPP, which matters shall be the sole responsibility of the Employee.



3.3 Enrolment by Non-Canadian Employees




A Full-Time Employee who is not a Canadian Employee who wishes to participate in the Plan may
participate through a Non-Registered ESPP and such Employee must:




	 	(a)	 	submit to lululemon or the Administrator an enrolment form authorizing the
Employee’s Employer to deduct from the Earnings of such Employee such contributions to
this Plan as such Employee may designate in such enrolment form (subject to changes
which the Employee may thereafter make pursuant to section 4.1);
	 
	 	(b)	 	open an account with the Administrator (and, in connection therewith, if
required by the Administrator or lululemon, submit to the Administrator or lululemon a
Substitute Form W-9 or other form that the Administrator or lululemon may require); and
	 
	 	(c)	 	express the agreement of such Employee to be bound by the terms and conditions
of this Plan;





in each case in the form and manner from time to time required by lululemon and the Administrator.



Article 4 — Contributions




4.1 Member Contributions and Allocation




A Member may, no less frequently than monthly, contribute an amount to this Plan equal to what ever
portion of his or her Earnings equates, after deduction of applicable taxes, to either 3%, 6%



 









 







or 9%
of such Member’s Earnings for such period, as designated by such Member from time to time in the
form and manner contemplated pursuant to sections 3.1 or 3.3 or in a written notice given pursuant
to this section. The contributions to this Plan made by a Member who is a Canadian Employee who is
participating in both a Non-Registered ESPP and a Registered ESPP shall be allocated between a
Non-Registered ESPP and a Registered ESPP as designated by such Member from time to time in the
form and manner contemplated pursuant to sections 3.1(d) or 4.2(b) or in a written notice given
pursuant to this section. A Member may change any designation or allocation referred to in this
section to be applicable to future regularly scheduled payroll payments by giving notice of such
change to the Administrator and the Trustee (and, if the Administrator or lululemon so advises the
Member, to lululemon and the Member’s Employer), in the form and manner and subject to such
restrictions or conditions (which may include conditions regarding when changes will become
effective subsequent to notice being given or limitations on the number of times a Member may make
changes in a specified time period) from time to time required by lululemon and the Administrator.
Subject to the mandatory change of allocation contemplated pursuant to section 4.2, any such
designation will remain in effect until changed by the Member.



4.2 Change of Status of Canadian Employee




If a Member participating in a Registered ESPP ceases to be a Canadian Employee:




	 	(a)	 	the Member must, not less than 10 days prior to the date on which the status of
the Member changes, give notice of such change to the Administrator and the Member’s
Employer specifying the date on which the Member will cease to be a Canadian Employee,
in the form and manner required by lululemon and the Administrator or Trustee; and
	 
	 	(b)	 	effective upon the date that the Member so ceases to be a Canadian Employee,
all contributions made after such time to this Plan by the Member shall be allocated to
the Member’s Non-Registered ESPP unless and until the Member again becomes a Canadian
Employee, in which event the Member may give a notice
pursuant to this section designating an allocation of such Member’s contributions
between such Member’s Non-Registered ESPP and Registered ESPP in the form and manner
required by lululemon and the Administrator or Trustee.





4.3 Deduction of Contributions – Registered ESPP




Contributions to this Plan made by a Member who is a Canadian Employee participating in a
Registered ESPP which are, pursuant to section 4.1, allocated to the Member’s Registered ESPP will
be deducted and withheld by the Member’s Employer by payroll deductions from such Member’s Earnings
which will be made no more frequently than the regularly scheduled payroll payments as may be
designated by the Member’s Employer from time to time and all such amounts so deducted or withheld
will promptly (and, in any event, within ten days after the deduction or withholding thereof) be
deposited by the Employer with the Trustee (or with the Administrator, as agent for the Trustee).



 









 





4.4 Deduction of Contributions – Non-Registered ESPP




Contributions made by a Member to this Plan which are not, pursuant to section 4.1, allocated to a
Member’s Registered ESPP will be deducted and withheld by the Member’s Employer by payroll
deductions from such Member’s Earnings which will be made no more frequently than the regularly
scheduled payroll payments as may be designated by the Member’s Employer from time to time and will
be allocated to the Member’s Non-Registered ESPP and all such amounts so deducted or withheld will
promptly (and in any event, within ten days after the deduction or withholding thereof) be
deposited by the Employer with the Administrator.



4.5 Employer Contributions – Registered ESPP




Subject to section 4.9, the Employer, on behalf of each Member who is a Canadian Employee who is
participating in a Registered ESPP, will make a contribution to the Member’s Registered ESPP on
behalf of the Member equal to one-third of the amount contributed by such Member to the Member’s
Registered ESPP. The contribution of lululemon will be deposited by lululemon with the Trustee (or
with the Administrator, as agent for the Trustee) at the time of or promptly (and in any event,
within ten days) after the end of each month in which contributions to this Plan made by such
Member are deducted and withheld by the Member’s Employer.



4.6 Employer Contributions – Non-Registered ESPP




Subject to section 4.9, the Employer, on behalf of each Member who is participating in a
Non-Registered ESPP, will make a contribution to the Member’s Non-Registered ESPP on behalf of the
Member equal to one-third of the amount contributed by such Member to the Member’s Non-Registered
ESPP. The contribution by lululemon will be deposited by lululemon with the Administrator at the
time of or promptly (and in any event, within ten days) after the end of each month in which
contributions to this Plan made by such Member are deducted and withheld by the Member’s Employer.
The Employer’s contributions will be additional compensation to the Member and the Employer will be
entitled to make such withholdings as may be required by Applicable Tax Legislation from cash
remuneration payable to the Member.



4.7 Contributions Credited to Accounts




The Trustee (or the Administrator as agent for the Trustee) will, on receipt of any contribution to
a Registered ESPP by or on behalf of a Member, credit such contribution to such Member’s Registered
ESPP Account. The Administrator will, on receipt of any contribution to a Non-Registered ESPP by
or on behalf of a Member, credit such contribution to such Member’s Non-Registered ESPP Account.
All contributions by lululemon on behalf of a Member will vest irrevocably in such Member as and
when they are received by the Trustee or Administrator.



4.8 Holding of Amounts Pending Investment




The Trustee will hold all cash amounts credited to each Member’s Registered ESPP Account from time
to time, pending the application thereof to the purchase of Common Shares pursuant to section 5.1,
in a non-interest bearing account of the Trustee or the Administrator or of any Canadian chartered
bank, including, without limitation, any bank expressly permitted in the Sponsor Agreement, or any
trust corporation existing under the laws of Canada or any province



 









 







thereof, and will credit all
cash dividends or other earnings arising therefrom to such Member’s Registered ESPP Account. The
Administrator will hold all cash amounts credited to each Member’s Non-Registered ESPP Account from
time to time, pending the application thereof to the purchase of Common Shares pursuant to
section 5.4, in a non interest bearing account of the Administrator or of any Canadian chartered
bank, including, without limitation, any bank expressly permitted in the Administration Agreement,
or any trust corporation existing under the laws of Canada or any province thereof, and will credit
all cash dividends or other earnings arising therefrom to such Member’s Non-Registered ESPP
Account.



4.9 Insolvency




Notwithstanding anything to the contrary herein, the Employer will not make any contribution to
this Plan pursuant to section 4.5 or 4.6 in circumstances where the Employer is insolvent or such
contribution would render the Employer insolvent.



Article 5 — Purchase of Common Shares




5.1 Purchase by Trustee of Common Shares – Registered ESPPs




The contributions by or on behalf of each Member to a Member’s Registered ESPP, together with all
cash dividends, interest and other earnings credited to such Member’s Registered ESPP Account, will
be applied by the Trustee (or the Administrator as agent for the Trustee) to the purchase of Common
Shares to be held in trust for the benefit of such Member. Such purchases will be made by the
Trustee (or the Administrator as agent for the Trustee) on or before the 15th day of the month
following the month in which contributions by or on behalf of a Member are made, through the
facilities of the Toronto Stock Exchange (or such other stock exchange as lululemon may designate
from time to time) and at the prevailing market price of our Common Stock on the Toronto Stock
Exchange (or such other stock exchange as lululemon may designate from time to time) on the date of
purchase.



5.2 Holding of Common Shares – Registered ESPPs




All Common Shares purchased by the Trustee (or the Administrator as agent for the Trustee) pursuant
to section 5.1 on behalf of a Member will be held by the Trustee in trust for the benefit of such
Member, and the Trustee (or the Administrator as agent for the Trustee) will record in such
Member’s Registered ESPP Account the number of Common Shares (including any fraction thereof) so
held by the Trustee for the benefit of such Member. The certificates representing such Common
Shares will, prior to the withdrawal of such Common Shares from the Member’s Registered ESPP, be
registered in the name of the Trustee or its nominee.



5.3 Dividends in Registered ESPPs




The Trustee will, on receipt of any dividends paid on any Common Shares held by the Trustee in
trust for the benefit of a Member pursuant to section 5.2, credit such dividends to such Member’s
Registered ESPP Account.



 









 





5.4 Purchase by Administrator of Common Shares – Non-Registered ESPPs




The contributions by or on behalf of each Member to a Member’s Non-Registered ESPP, together with
all cash dividends, interest and other earnings credited to such Member’s Non-Registered ESPP
Account, will be applied by the Administrator to the purchase of Common Shares on behalf of such
Member. Such purchases will be made by the Administrator on or before the 15th day of
the month following the month in which contributions by or on behalf of a Member are made, through
the facilities of the Toronto Stock Exchange (or such other stock exchange as lululemon may
designate from time to time) and at the prevailing market price of our Common Stock on the Toronto
Stock Exchange (or such other stock exchange as lululemon may designate from time to time) on the
date of purchase.



5.5 Holding of Common Shares – Non-Registered ESPPs




All Common Shares purchased by the Administrator pursuant to section 5.4 on behalf of a Member will
be held by the Administrator for the benefit of such Member, and the Administrator will record in
such Member’s Non-Registered ESPP the number of Common Shares (including any fraction thereof) so
held by the Administrator for the benefit of such Member. The certificates representing such
Common Shares will, prior to the withdrawal of such Common Shares from this Plan, be registered in
the name of the Administrator or its nominee.



5.6 Dividends in Non-Registered ESPPs




The Administrator will, on receipt of any dividends paid on any Common Shares held by the
Administrator for the benefit of a Member pursuant to this Plan, credit such dividends to such
Member’s Non-Registered ESPP Account.



Article 6 — Transfers to Registered ESPP




6.1 Transfer to Registered ESPP




A Member who is a Canadian Employee participating in a Registered ESPP may transfer all or some of
the Common Shares, money or other property held in such Member’s Non-Registered ESPP Account to
such Member’s Registered ESPP Account, subject to such restrictions and limitations and conditions
as may be imposed from time to time by lululemon or the Trustee or Administrator. If the Canadian
Employee Member is not already participating in a Registered ESPP the Member will be required to
first enrol in a Registered ESPP pursuant to section 3.1(c) prior to effecting any transfer
referred to in this section. A Member wishing to effect such a transfer must execute and submit to
the Administrator an ESPP Transfer form in the form and manner required by lululemon and the
Administrator. Such a transfer will not constitute a withdrawal from the Member’s Non-Registered
ESPP for the purpose of Article 7.



6.2 Transfer Process




In the event of a transfer pursuant to section 6.1, the Administrator will transfer the Common
Shares, money or other property held for the benefit of the Member in the transferring Member’s
Non-Registered Account to the Trustee, on behalf of the Member, as directed by the Member, to be
held by the Trustee in trust for the benefit of the Member. The Trustee (or the Administrator



 









 







as
agent for the Trustee) will record in such Member’s Registered ESPP Account the number of Common
Shares (including any fraction thereof) so held by the Trustee for the benefit of such Member. The
certificate representing any Common Shares so transferred will, prior to the withdrawal of such
Common Shares from the Member’s Registered ESPP Account, be registered in the name of the Trustee
or its nominee. The Member will provide the Administrator or Trustee with such information, and
comply with such requirements as the Administrator or Trustee may require in relation to any
capital gains which may be realized by the Member as a result of any such transfer. The Member
effecting such transfer will have sole liability for determining and discharging any tax liability
of the Member in respect of or arising as a result of such transfer.



Article 7 — Withdrawals




7.1 Annual Withdrawals Permitted




No more than twice in each Year a Member may withdraw all or some of the Common Shares, money or
other property held in such Member’s Non-Registered ESPP Account or Registered ESPP Account, or, if
the Member has both a Non-Registered ESPP Account and Registered ESPP Account, may separately
withdraw all or some of the Common Shares, money or other property held in both such Non-Registered
ESPP Account and Registered ESPP Account, without in any way affecting the right of such Member to
continue to participate in this Plan. If a Member wishes to withdraw some or all of the Common
Shares, money or other property held in such Member’s Non-Registered ESPP Account or Registered
ESPP Account, the Member must complete and submit to the Administrator a withdrawal form in the
form and manner from time to time required by lululemon and the Administrator.



7.2 Suspension of Contributions Following Third Withdrawal




If a Member withdraws all or some of the Common Shares, money or other property held in such
Member’s Non-Registered ESPP Account or Registered ESPP Account more than twice in any Year, the
right of the Member to make contributions under this Plan will be suspended for a period of 12
months following the date of the third withdrawal. During this period of suspension any Common
Shares, money and other property held in such Member’s Non-Registered ESPP Account or Registered
ESPP Account following such third withdrawal will continue to be held in such Member’s
Non-Registered ESPP Account and Registered ESPP Account pursuant to the terms of this Plan, and
dividends, if any, paid on any Common Shares held by the Trustee for the benefit of such Member in
such Member’s Registered ESPP Account will be applied by the Trustee (or the Administrator as agent
for the Trustee) to the purchase of Common Shares on behalf of such Member pursuant to section 5.1
and dividends, if any, paid on any Common Shares held by the Trustee for the benefit of such Member
in such Member’s Non-Registered ESPP Account will be applied by the Administrator to the purchase
of Common Shares on behalf of such Member pursuant to section 5.4, but no contributions will be
made by or on behalf of the Member under this Plan (either in the form of contributions deducted
and withheld from payroll deductions or contributions by an Employer pursuant to section 4.5 or
4.6) during such period of suspension.



 









 





7.3 No Further Withdrawals




If a Member’s right to make contributions under this Plan is suspended pursuant to section 7.2, the
Member will not have the right to make further withdrawals of any of the Common Shares, money or
other property held in such Member’s Non-Registered ESPP Account or Registered ESPP Account during
the period of suspension unless the Member terminates such Member’s participation in this Plan.



7.4 Termination of Participation




If a Member’s right to make contributions under this Plan is suspended pursuant to section 7.2 and
the Member makes a withdrawal of any of the Common Shares, money or other property held in such
Member’s Non-Registered ESPP Account or Registered ESPP Account during the period of suspension,
the Member will cease to be entitled to participate in this Plan, or make contributions to this
Plan from and after the date of such withdrawal unless such Employee, if the Employee continues to
be a Full-Time Employee eligible to do so, thereafter, subject to section 7.5, again enrols in this
Plan pursuant to section 3.1 or section 3.3.



7.5 Withdrawal Following Termination




In the event:




	 	(a)	 	any Member ceases to be entitled to participate in this Plan as provided in
section 7.4; and
	 
	 	(b)	 	upon the conclusion of the 12-month suspension period contemplated in section
7.2, such Member continues to be a Full-Time Employee eligible to participate in
the Plan but does not again enrol in this Plan pursuant to section 3.1 or section
3.3,





all of the Common Shares, money and other property held in such Member’s Non-Registered ESPP
Account and, if applicable, Registered ESPP Account will be deemed to have been withdrawn by the
Member within 60 days of the conclusion of the 12-month suspension period contemplated in section
7.2. In addition, in such event the Employee will not be entitled to re-enrol or recommence
participation in this Plan prior to the first anniversary of the first day of the month following
the month in which such Member’s Common Shares, money and other property were deemed to have been
withdrawn.



7.6 Transfers to Registered ESPP During Suspension Period




Notwithstanding that a Member’s right to make contributions under this Plan is suspended pursuant
to section 7.2, a Member who is a Canadian Employee participating in a Registered ESPP will have
the right to transfer all or some of the Common Shares, money or property held in such Member’s
Non-Registered ESPP Account pursuant to Article 6 during the period of such suspension.



 









 





7.7 Authorization by Chief Financial Officer or the Vice President People Resources – No Suspension




Either the Chief Financial Officer or the Vice President People Resources of lululemon may, in his
or her discretion, authorize a Member, on such terms and conditions, if any, as such authorization
may specify, to withdraw Common Shares, money or other property held in such Member’s
Non-Registered ESPP Account or, if applicable, Registered ESPP Account more than twice in a Year
without such Member’s right to make contributions being suspended pursuant to section 7.2 where, in
the opinion of either the Chief Financial Officer or the Vice President People Resources, such
action is necessary or desirable as a result of financial hardship being suffered by such Member.
If either the Chief Financial Officer or the Vice President People Resources makes an authorization
pursuant to this section 7.7, section 7.2 will not apply to any withdrawal made in accordance with
such authorization.



7.8 Authorization by Chief Financial Officer or the Vice President People Resources During Suspension Period




Either the Chief Financial Officer or the Vice President People Resources of lululemon, in his or
her discretion, may authorize a Member, on such terms and conditions, if any, as such authorization
may specify, to withdraw Common Shares, money or other property held in such Member’s
Non-Registered ESPP Account or, if applicable, Registered ESPP Account during any period of
suspension referred to in section 7.2 without such Member ceasing to be entitled to participate in
this Plan or to make contributions to this Plan where, in the opinion of either the Chief Financial
Officer or the Vice President People Resources, such action is necessary or desirable as a result
of financial hardship being suffered by such Member. If either the Chief Financial Officer or the
Vice President People Resources makes an authorization pursuant to this section 7.8, sections 7.3
and 7.4 will not apply to any withdrawal made in accordance with such authorization.



7.9 Withdrawal Following Termination of Employment




In the event of the termination of the employment of a Member with an Employer for any reason
whatsoever (including death or disability), the Member will cease to be entitled to participate in
this Plan as of the last day of active employment for the Member and all of the Common Shares,
money and other property held in such Member’s Non-Registered ESPP Account and Registered ESPP
Account, as applicable, will be deemed to have been withdrawn by the Member within 60 days after
the date on which such Member’s employment is so terminated.



7.10 Withdrawal Following Change of Employment




In the event any Member participating in this Plan ceases to be a Full-Time Employee for any reason
whatsoever (including disability), the Member will cease to be entitled to participate in this Plan
and all of the Common Shares, money and other property held in such Member’s Non-Registered ESPP
Account and Registered ESPP Account, as applicable, will be deemed to have been withdrawn by the
Member within 60 days after the date on which such Member ceases to be a Full-Time Employee.



 









 





7.11 Withdrawal Following Termination of Plan




In the event of the termination of this Plan, all of the Common Shares, money and other property
held in each Member’s Non-Registered ESPP Account and Registered ESPP Account, as applicable, will
be deemed to have been withdrawn by the Member within 60 days after the date on which this Plan is
terminated.



7.12 Fractional Share Interest on Withdrawal




All rights of a Member to a fraction of a Common Share upon any withdrawal of Common Shares from a
Member’s Registered ESPP will be satisfied by a cash payment in an amount equal to the value
thereof as determined by the Trustee on the basis of the Market Value on the day on which such
withdrawal is made. All rights of a Member to a fraction of a Common Share upon any withdrawal of
Common Shares from a Member’s Non-Registered ESPP will be satisfied by a cash payment in an amount
equal to the value thereof as determined by the Administrator on the basis of the Market Value on
the day on which such withdrawal is made.



7.13 Distribution Following Withdrawal – Non-Registered ESPP




Upon any withdrawal of Common Shares, money and other property by any Member from such Member’s
Non-Registered ESPP, the Member (or the Member’s legal representatives) will be entitled to
instruct the Administrator, in the manner required by the Administrator, to (i) sell any Common
Shares so withdrawn in the open market, through the facilities of the Toronto Stock Exchange (or
such other stock exchange as lululemon may designate from time to time) and remit the proceeds from
such sale, net of related transaction expenses, to such Member; (ii) transfer any Common Shares so
withdrawn to a self-directed investment account of the Member designated by the Member; or
(iii) cause a share certificate registered in the name of such Member (or the Member’s legal
representatives) representing any such Common Shares so withdrawn to be sent to the Member. If the
Member (or the Member’s legal representatives) does not provide instructions to the Administrator
within 60 days after the withdrawal, the
Administrator will sell all Common Shares so withdrawn and remit the proceeds from such sale, net
of related transaction expenses, together with all money and other property so withdrawn from such
Member’s Non-Registered ESPP, (i) by first class registered mail to such Member to the address
specified by such Member by written notice delivered to the Administrator (or, failing such written
notice, to the address of such Member as it appears on such Member’s Non-Registered ESPP Account)
or (ii) by direct deposit with such bank or financial institution, or utilizing such other
alternate payment mechanism, as may have been authorized by the Member. In the event the
Administrator receives evidence satisfactory to the Administrator of the appointment of one or more
legal representatives of such Member or of the estate of such Member, the share certificate (if
applicable), money and other property will be forwarded to the address specified by such personal
representatives by written notice delivered to the Administrator (or, failing such written notice,
to the address of such Member as it appears on such Member’s Non-Registered ESPP Account).



 









 





7.14 Distribution Following Withdrawal – Registered ESPP




Upon any withdrawal of Common Shares, money and other property by any Member from such Member’s
Registered ESPP, the Member (or the Member’s legal representatives) will be entitled to instruct
the Trustee (or the Administrator, as agent for the Trustee), in the manner required by the Trustee
or the Administrator, to (i) sell any Common Shares so withdrawn in the open market, through the
facilities of the Toronto Stock Exchange (or such other stock exchange as lululemon may designate
from time to time) and remit the proceeds from such sale, net of related transaction expenses, to
such Member, or (ii) transfer any Common Shares so withdrawn to a self-directed investment account
or registered retirement savings plan of the Member designated by the Member. If the Member (or
the Member’s legal representatives) does not provide instructions to the Trustee (or the
Administrator as agent for the Trustee) within 60 days after the withdrawal, the Trustee will sell
all Common Shares so withdrawn and remit the proceeds from such sale, net of related transaction
expenses, to the Member, together with all money and other property withdrawn from such Member’s
Registered ESPP, (i) by first class registered mail to such Member to the address specified by such
Member by written notice delivered to the Trustee (or, failing such written notice, to the address
of such Member as it appears on such Member’s Registered ESPP Account), or (ii) by direct deposit
with such bank or financial institution, or utilizing such other alternate payment mechanism, as
may have been authorized by the Member, all subject to the right of the Trustee to withhold and
deduct taxes or other amounts, or sell Common Shares held on behalf of a Member, pursuant to
section 7.16 and in accordance with the terms, conditions, rules and restrictions of the
Declaration of Trust applicable in respect of such Member’s Registered ESPP.



7.15 Compliance with Laws




lululemon may from time to time take such steps and require such documentation from Members that in
its opinion are necessary or desirable to ensure compliance with all applicable laws, including
(i) the applicable securities laws and regulations of Canada (including the provinces and
territories thereof) and of the United States, and any political subdivision of either, and the
bylaws, rules and regulations of any stock exchange or other organized market on which the Common
Shares may from time to time be listed or traded and (ii) the withholding provisions of Applicable
Tax Legislation. lululemon may also from time to time take such steps that in its
opinion are necessary or desirable to restrict the transferability of any Common Shares withdrawn
from this Plan in order to ensure such compliance.



7.16 Tax Withholding




The Trustee shall have the right to:




	 	(a)	 	withhold and deduct from any payment to be made by the Trustee under this Plan
any federal, provincial, local or other taxes and other amounts required by law to be
withheld in respect of such payments; and
	 
	 	(b)	 	sell any Common Shares held on behalf of any Member and use the proceeds from
such sale to pay any federal, provincial, local or other taxes and other amounts
required by law to be withheld in respect of any distribution to such Member under this
Plan.




 









 





Article 8 — Temporary Suspension and Termination




8.1 Temporary Suspension




A Member may elect to suspend making contributions to this Plan effective as of the commencement of
any month and for a period of not less than 3 months and not more than 12 months by giving written
notice of such election to the Member’s Employer not less than 10 days prior to the commencement of
such month in the manner from time to time required by lululemon.



8.2 Restriction




No Member may elect to suspend making contributions to this Plan pursuant to section 8.1 more than
once in any Year.



8.3 Short Term Leaves




A Member who ceases to perform the duties of the Member’s position by virtue of being absent
pursuant to a medical disability (short term disability, long term disability or Worker’s
Compensation leave), maternity or parental leave or pursuant to such other leave of absence as may
be approved by the Member’s Employer or required by law, may elect to suspend making contributions
to this Plan effective as of the commencement of any month during such absence by giving written
notice of such election to the Member’s Employer not less than 10 days prior to the commencement of
such month in the manner required by lululemon. In such case the Member must begin contributing to
this Plan as soon as the Member returns to active employment.



8.4 Termination of Participation




A Member may elect to terminate the Member’s participation in this Plan effective as of the
commencement of any month by giving written notice of such election to the Member’s Employer not
less than 10 days prior to the commencement of such month in the manner from
time to time required by lululemon. If a Member makes such election, the Member will cease to be
entitled to participate in this Plan, or make contributions to this Plan, effective from and after
the commencement of the month indicated in the notice, unless such Employee, if the Employee
continues to be a Full-Time Employee eligible to do so, thereafter, subject to section 8.5, again
enrols in this Plan pursuant to section 3.1 or section 3.3.



8.5 Effect of Termination of Participation




In the event any Member ceases to participate in this Plan as provided in section 8.4, all of the
Common Shares, money and other property held in such Member’s Non-Registered ESPP Account and, if
applicable, Registered ESPP Account, will be deemed to have been withdrawn by the Member within 60
days after the date such Member ceases to participate. In addition, in such event, the Employee
will not be entitled to re-enrol or recommence participating in this Plan



 









 







prior to the first
anniversary of the first day of the month following the month in which such Member ceased to be
entitled to participate in this Plan.



8.6 Required Form




If a Member wishes to temporarily suspend making contributions to this Plan as contemplated in
section 8.1 or to terminate the Member’s participation in this Plan as contemplated by section 8.4,
the Member must complete and submit to lululemon a suspension/termination form in the form and
manner from time to time required by lululemon.



8.7 No Contributions




For greater certainty,





	 	(a)	 	so long as a Member’s contributions to this Plan are suspended, or
	 
	 	(b)	 	from and after the time a Member ceases to participate in this Plan,





contributions on behalf of such Member pursuant to sections 4.5 and 4.6 will also be suspended.



Article 9 — Administrator and Trustee




9.1 Administrator




Each of the Chief Financial Officer and the Vice President People Resources of lululemon shall have
the authority to appoint an Administrator and service provider in connection with the
administration of this Plan pursuant to the terms of an administration, trust, administrative
services, plan services or other agreement in form and on terms and conditions approved by either
the Chief Financial Officer or the Vice President People Resources.



9.2 Successor Administrator




lululemon will have the right at any time and from time to time to appoint any trust company or
life insurance company authorized to carry on trust or deposit business or insurance business
within British Columbia as a replacement Administrator and service provider in connection with
the administration of this Plan pursuant to the terms of an administration, trust, administrative
services, plan services or other agreement between lululemon and such trust company or insurance
company in form and on terms and conditions approved by either the Chief Financial Officer or the
Vice President People Resources of lululemon.



9.3 Amendment of Administration Agreement




lululemon will have the right at any time and from time to time to agree to any modification or
amendment to the administration, trust, administrative services, plan services or other agreement
referred to in sections 9.1 or 9.2 which is approved by either the Chief Financial Officer or the
Vice President People Resources of lululemon.



 









 





9.4 Trustee




Each of the Chief Financial Officer and the Vice President People Resources of lululemon shall have
the authority to appoint a Trustee, pursuant to the terms of a Sponsor Agreement between lululemon
and the Trustee, in form and on terms and conditions approved by either the Chief Financial Officer
or the Vice President People Resources.



9.5 Successor Trustee




lululemon will have the right at any time and from time to time to appoint any trust company
authorized to carry on a trust business within the Province of British Columbia as a replacement
Trustee to serve as trustee under this Plan in respect of the Registered ESPPs pursuant to the
terms of an agreement between lululemon and such trust company in form and on terms and conditions
approved by either the Chief Financial Officer or the Vice President People Resources of lululemon.



9.6 Amendment of Sponsor Agreement




lululemon will have the right at any time and from time to time to agree to any modification or
amendment to the Sponsor Agreement or a trust agreement referred to in section 9.5 which is
approved by either the Chief Financial Officer or the Vice President People Resources of lululemon.



Article 10 — Accounts and Records




10.1 Non-Registered ESPP Accounts




The Administrator will establish and maintain a separate account for each Member who is
participating in a Non-Registered ESPP in which the Administrator will record:




	 	(a)	 	contributions made by such Member pursuant to section 4.1 allocated to the
Member’s Non-Registered ESPP;
	 
	 	(b)	 	contributions to such Member’s Non-Registered ESPP made on behalf of such
Member pursuant to section 4.6;
	 
	 	(c)	 	interest or other earnings credited to such account;
	 
	 	(d)	 	Common Shares purchased by the Administrator on behalf of such Member pursuant
to section 5.4;
	 
	 	(e)	 	dividends paid on any Common Shares held by the Administrator for the benefit
of such Member;
	 
	 	(f)	 	Common Shares, money or other property transferred from such account pursuant
to Article 6; and




 









 






	 	(g)	 	Common Shares, money and other property withdrawn from such account pursuant to
Article 7.





10.2 Registered ESPP Accounts




The Trustee will establish and maintain a separate account for each Member who is a Canadian
Employee who is participating in a Registered ESPP in which the Trustee will record:




	 	(a)	 	contributions made by such Member pursuant to section 4.1 which are allocated
to the Member’s Registered ESPP;
	 
	 	(b)	 	contributions to such Member’s Registered ESPP made on behalf of such Member
pursuant to section 4.5;
	 
	 	(c)	 	interest or other earnings credited to such account;
	 
	 	(d)	 	Common Shares purchased by the Trustee in trust for the benefit of such Member
pursuant to section 5.1;
	 
	 	(e)	 	dividends paid on any Common Shares held by the Trustee in trust for the
benefit of such Member;
	 
	 	(f)	 	Common Shares, money and other property transferred to such account pursuant to
Article 6; and
	 
	 	(g)	 	Common Shares, money and other property withdrawn from such account pursuant to
Article 7.





10.3 Reporting – Non-Registered ESPP Accounts




Promptly after December 31 in each Year the Administrator will deliver to each Member who is
participating in a Non-Registered ESPP a statement of the Common Shares, money and other property
recorded in such Member’s Non-Registered ESPP Account as of the last day of the immediately
preceding month and such information concerning dividends, interest or other earnings credited to
such Member’s Non-Registered ESPP Account, Common Shares purchased by the Administrator on behalf
of such Member pursuant to section 5.4, Common Shares transferred from such account pursuant to
Article 6 and Common Shares withdrawn from such
account pursuant to Article 7 (including proceeds from the sale of any Common Shares pursuant to
section 7.13 and cash payments made in lieu of a fraction of a Common Share pursuant to
section 7.12) and other matters as may be necessary to enable such Member to file returns in
respect of such Year under Applicable Tax Legislation. The Administrator will complete any
information slips or similar reporting as may be required under Applicable Tax Legislation.



10.4 Reporting – Registered ESPP Accounts




Promptly after December 31 in each Year the Trustee (or the Administrator as agent for the Trustee)
will deliver to each Member who is a Canadian Employee who is participating in a Registered ESPP a
statement of the Common Shares, money and other property recorded in such



 









 







Member’s Registered ESPP
Account as of the last day of the immediately preceding month and such information concerning
dividends, interest or other earnings credited to such Member’s Registered ESPP Account, Common
Shares purchased by the Trustee in trust for the benefit of such Member pursuant to section 5.1,
Common Shares transferred to such account pursuant to Article 6 and Common Shares withdrawn
pursuant to Article 7 (including proceeds from the sale of any Common Shares pursuant to
section 7.14 and cash payments made in lieu of a fraction of a Common Share pursuant to
section 7.12) and other matters as may be necessary to enable such Member to file returns in
respect of such Year under Applicable Tax Legislation.



Article 11 — Common Shares Subject to the Plan




11.1 Authorized Shares




The aggregate number of Common Shares available for purchase under the Plan will be 3,000,000,
subject to adjustment pursuant to this Article 11.



11.2 Adjustments




The number of Common Shares available for purchase under the Plan will be automatically and
proportionately adjusted for share dividends, share splits, share combinations, reorganizations and
other similar events or transactions in a manner that reflects equitably the effects of such events
or transactions.



Article 12 — Shareholder Materials




12.1 Shareholder Meeting Materials and Voting




So long as the Administrator or Trustee is holding Common Shares on behalf of a Member, the
Administrator and Trustee (or the Administrator as agent for the Trustee) will cause the Member to
be provided with a copy of the notice, information circular and proxy for each meeting of the
shareholders of lululemon received by the Administrator and Trustee (or their nominees) as the
registered holder of Common Shares together with an appropriate form on which the Member may
indicate voting instructions to the Administrator or Trustee. Provided that the Member provides
clear and timely instructions to the Administrator, or Trustee, as applicable, the Common Shares
held by the Administrator and Trustee on behalf of a Member pursuant to this Plan will be voted by
the Administrator and Trustee at each meeting of the shareholders of lululemon in accordance with
such instructions of such Member.



12.2 Take-Over Bids, etc.




The Administrator and Trustee (or the Administrator as agent for the Trustee) will promptly advise
all Members of take-over bids, issuer bids, rights offerings and other events notice of which is
delivered to the Administrator and Trustee or their nominee as the registered holder of Common
Shares and cause all Members to be provided with copies of all materials delivered by the offeror
or lululemon to the Administrator or Trustee or their nominee in connection therewith.



 









 





Article 13 — Amendments and Termination




13.1 Amendments, Suspensions and Terminations of Plan




lululemon may at any time and from time to time amend, suspend or terminate this Plan in whole or
in part as approved by resolution of the Board of Directors, provided that no such amendment,
suspension or termination shall deprive any Member of any benefits that have accrued on or prior to
the date thereof without the consent of the affected Member.



Article 14 — General




14.1 Agents




lululemon may from time to time appoint or engage accountants, lawyers and such other personnel as
it deems necessary or advisable for the proper administration of this Plan.



14.2 Administrative Rules




lululemon may make administrative rules for the proper functioning of this Plan.



14.3 Interpretation




Save as expressly provided herein, the rights and obligations of a Member with respect to Common
Shares, money and other property held by the Trustee pursuant to such Member’s Registered ESPP will
be as provided in the Declaration of Trust in respect of such Member. All questions arising as to
the interpretation of this Plan (including any disputes or disagreements which may arise under, as
a result of or in any way related to the application of this Plan) will be determined by the Chief
Executive Officer, Chief Financial Officer or the Vice President People Resources of lululemon or
such other officer of lululemon as the Chief Executive Officer may designate in writing to the
Administrator and Trustee from time to time, and any such determination will be final, binding and
conclusive for all purposes.



14.4 Governing Law




This Plan and the rights of the parties hereto will be construed and governed according to the laws
of British Columbia.



14.5 Expenses




Except as otherwise provided herein, lululemon will pay all administrative expenses of this Plan,
including fees of the Administrator and the Trustee and brokerage fees and commissions in respect
of the purchase of Common Shares purchased by the Trustee or Administrator under this Plan.
Members will be responsible for (i) brokerage fees and commissions and other transaction fees and
expenses payable upon a sale by the Administrator or Trustee of Common Shares held under this Plan;
(ii) transaction fees (including fees charged by the Administrator) payable upon a transfer of
Common Shares held under this Plan to a self-directed investment account of a Member; and
(iii) share certificate fees (including fees charged by the Administrator) payable in respect of
share certificates delivered to a Member.