Document:

EX-10.6

 EXHIBIT 10.6 

Best Western International, Inc. 
  

 
 Executive Bonus Plan Document 

 Best Western International, Inc. 

Executive Bonus Plan Document 
  

 
 Table of Contents 

 
  
  

					
	Topic	  	Page	 
	 Plan Intent
	  	 	2	 
	 Eligibility
	  	 	2	 
	 Performance Components
	  	 	2 - 3	 
	 Bonus Payout Percentages
	  	 	3	 
	 Bonus Multipliers
	  	 	3	 
	 Calculation Example
	  	 	3 - 4	 
	 Administration
	  	 	4	 

 Best Western International Proprietary Information  

Last Updated 1/2018 

  
 1 

 BWI Bonus Plan Document 

 
  

 

			
	Plan Intent	  	The Bonus Plan compensation is intended to motivate eligible employees to achieve above and beyond standard or historical performance. It is not deferred compensation. This Plan is effective each fiscal year from December 1st
through November 30th.
		
	Eligibility	  	Vice Presidents and Senior Vice Presidents are eligible to participate in this Plan unless covered under the Sales, Sales Operations, and North American Development, Supply Bonus Plan and/or any other approved bonus plan or
agreement.
		
		  	Employees must meet the minimum threshold for their overall individual bonus multiplier in order to be eligible for either the individual or company bonus payouts. Additionally, employees must have a performance rating of meets
expectations or above to be eligible to receive a bonus payment.
		
		  	Employees must be in a bonus eligible position for more than 90 days in order to be eligible for a bonus payment.
		
		  	Employees who are hired or transferred/promoted into or out of an eligible position during the Plan year will receive a pro-rated bonus for the time worked in the eligible position(s).
Payments will be based on their annualized base pay at the time of the transfer or promotion.
		
		  	Employees must be actively employed on the date bonus is paid in order to receive a payment. However, in the instance of an employee separation before the date bonus is paid, it will be at the sole discretion of the Chief Executive
Officer, the Chief Financial Officer, and Vice President of Human Resources to pay the forfeited bonus to the separated employee or to include the forfeited bonus in the bonus funding pool to be allocated to all actively employed bonus
participants.
		
	Performance Components	  	There are three Performance Components under this Plan.
		
		  	• Corporate Performance 
		
		  	Corporate Performance is weighted 55% of the overall bonus payment. Corporate performance results should reflect shared goals and outcomes and companywide collaboration at the Executive level. Performance Objectives,
Results Achieved and Bonus Multipliers are determined and approved by the Chief Executive Officer and Board of Directors.
		
		  	• Individual Performance
		
		  	Individual Performance is weighted 35% of the overall bonus payment. Performance Objectives, Results Achieved and Bonus Multipliers are determined and approved by the CEO. Each participant should have three (3) to
five (5) bonus eligible Performance Objectives approved for the plan year.

  
 2 

 BWI Bonus Plan Document 

 
  

 

			
		
		  	• Discretionary Performance
		
		  	Department Performance is weighted 10% of the overall bonus payment. Performance Objectives, Results Achieved and Bonus Multipliers are determined and approved by the Chief Executive Officer.
		
		  	Note: Performance Objectives should be identified and stated in terms of “Target” (meets expected performance), and “Stretch” (exceeds expected performance). All three Performance Components are independent for
purposes of calculating bonus.
		
	 Bonus
 Payout

Percentages
	  	 Bonus payouts are expressed as a percentage of a Participant’s

annualized base pay according to the table below.

  

			
	 Job Title
	  	 Bonus Payout Percentage

	 Vice Presidents
	  	30%
	 Senior Vice Presidents
	  	40%

  

			
	Bonus Multipliers	  	Bonus Multipliers are determined according to the table below and range from 0% to 120% of the total bonus opportunity.

  

					
	 Performance Achieved
	  	 Description
	  	 Multiplier

			
	Threshold	  	Historic or minimum acceptable level of performance	  	80%1
			
	Target	  	Targeted level of performance	  	100%
			
	Stretch/Maximum	  	Excellence level of performance	  	120%

 1 Multiplier is 0% for below Threshold
performance. 
  

			
	 Calculation
	 	 How bonus payments are calculated.

	 Example
	 	
		 	Assumptions:
		
		 	Performance Achieved
		
		 	 •  Corporate Component - Target with a 100% Bonus
Multiplier.

		
		 	 •  Individual Component - Target with a 100% Bonus
Multiplier.

		
		 	 •  Discretionary Component - above Target with a 105% Bonus
Multiplier.

		
		 	 Job Title and Bonus Payout Percentage

		
		 	 •  Eligible Vice President with a 30% Bonus Payout Percentage and $155,000
annualized base pay at the end of the performance period.

  
 3 

 BWI Bonus Plan Document 

 
  

 

 Example Calculation: $155,000 Annualized Base Pay x 30% Bonus Payout Percentage = $46,500 

 

																																					
	 Performance Component
	  	 	 	  	 	 	  	Weight	 	 	 	 	  	 	 	  	 	 	  	Bonus
Multiplier	 	 	 	 	  	Actual
Payment	 
	 Corporate
	  	$	46,500	 	  	 	X	 	  	 	55	% 	 	 	=	 	  	$	25,575	 	  	 	X	 	  	 	100	% 	 	 	=	 	  	$	26,575	 
	 Individual
	  	$	46,500	 	  	 	X	 	  	 	35	% 	 	 	=	 	  	$	16,275	 	  	 	X	 	  	 	100	% 	 	 	=	 	  	$	16,275	 
	 Discretionary
	  	$	46,500	 	  	 	X	 	  	 	10	% 	 	 	=	 	  	$	4,650	 	  	 	X	 	  	 	105	% 	 	 	=	 	  	$	4,882.50	 
	 	 	  	TOTAL	 	 	 	 	  	$47,732.50	 

  

			
	Administration	  	Each fiscal year Corporate Performance Objectives will be announced to all eligible Bonus Plan Participants after the Objectives are approved by the Board of Directors in conjunction with approval of the annual Business Plan.
Individual Performance Objectives should be established, approved and communicated thereafter and as soon as practical after the beginning of the fiscal year. Annual Performance Objectives may be revised during the plan year if circumstances
dictate, for example, unforeseen economic downturn, increased job responsibilities, etc.
		
		  	The Board of Directors must approve Plan funding annually.
		
		  	Bonus payments will normally be made on the first pay period in January; however, the payment date is subject to change.
		
		  	Annualized base pay is defined as the Participant’s annualized base salary as of November 30.
		
		  	Prorated bonus payments are calculated when a Participant’s bonus level or status (hours per week) changes during the plan year. In this event, bonus levels are prorated based on the participant’s annualized base pay prior
to the change, and when applicable, the fiscal year annualized base pay.
		
		  	The Chief Executive Officer, the Chief Financial Officer, and the Vice President of Human Resources have the authority to interpret, administer and implement this Plan. This Plan is subject to modification at any time at the sole
discretion of the Chief Executive Officer provided that such modification does not compromise the fixed and determinable nature of the bonus payment as estimated as of November 30.
		
		  	This Plan does not constitute an employment contract between the Company and the Participant. The right to dismiss any Participant is specifically reserved by Best Western International, Inc.

  
 4EXHIBIT 10.1

 

TAPESTRY, INC.

2018 PERFORMANCE-BASED ANNUAL INCENTIVE PLAN

 

1.            Purpose

 

The purpose of this 2018 Performance-Based Annual Incentive Plan (the “Bonus Plan”) is to advance the interests of Tapestry, Inc. (the “Company”) and its stockholders by providing eligible employees with annual incentive compensation opportunities that are tied to the achievement of performance goals.  The Bonus Plan is for the benefit of eligible employees who are designated as Participants (as defined below).  The effective date of the Bonus Plan is August 9, 2018 (the “Effective Date”) and shall commence with respect to the Company’s fiscal year beginning July 1, 2018.

 

2.            Administration

 

The Human Resources Committee of the Board of Directors of the Company (the “Board”) or another committee or subcommittee of the Board, in any such case consisting of not less than two directors, each of whom shall qualify as “independent” under the rules of the New York Stock Exchange (the “Committee”), shall administer the Bonus Plan.  The Committee shall have the right, power and authority, in its sole discretion, to administer, apply and interpret the Bonus Plan, and to decide all matters arising in connection with the operation and administration of the Bonus Plan.  All decisions and determinations by the Committee with respect to the Bonus Plan shall be final, binding, and conclusive on all parties for all purposes.  Solely with respect to Participants other than executive officers of the Company and such other executives of the Company and Participating Affiliates as may be designated from time to time by the Committee, the Committee shall have the authority to delegate administration of the Bonus Plan to one or more employees of the Company.

 

3.            Eligibility and Participation

 

All Employees (as defined below) of the Company and each Participating Affiliate (as defined below) are eligible to participate in the Bonus Plan.  The Committee or its delegate shall designate the Employees who shall be eligible to receive awards under the Bonus Plan.  Each Employee who is designated to receive an award under the Bonus Plan for a Performance Period (as defined below) shall be a “Participant” hereunder.  As of the Effective Date, entities listed on Exhibit A shall be Participating Affiliates whose Employees may be eligible to participate in the Bonus Plan as determined by the Committee or its designate.

 

“Employee” means any officer or other employee (as determined in accordance with Section 3401(c) of the Internal Revenue Code of 1986, as amended (the “Code”), and the Treasury Regulations thereunder) of the Company or Participating Affiliate, but shall not include any person whose services with the Company are performed pursuant to a contract or arrangement that purports to treat the individual as an independent contractor even if such individual is later determined (by judicial action or otherwise) to have been a common law employee of the Company rather than an independent contractor.

“Participating Affiliate” means a subsidiary or affiliate of the Company listed on Exhibit A or that has, with the consent of the Committee or its delegate, adopted the Bonus Plan.  The Committee or its delegate may add or remove Participating Affiliates to the Bonus Plan at any time it determines in its discretion.

 

4.            Performance Bonus Determinations and Payments

 

(a)            A Participant may receive an award (a “Performance Bonus”) under the Bonus Plan based upon the attainment of performance goals which are established by the Committee and relate to one or more financial, operational or other metrics deemed appropriate by the Committee in its sole discretion with respect to the Company or any of its subsidiaries or affiliates (the “Performance Goals”), including but not limited to the following:

 

	
i.

	
  net earnings (either before or after one or more of the following: (A) interest, (B) taxes, (C) depreciation and (D) amortization);

	
ii.

	
  economic value added;

	
iii.

	
  gross or net sales or revenue;

	
iv.

	
  net income (either before or after taxes);

	
v.

	
  adjusted net income;

	
vi.

	
  operating earnings, income or profit;

	
vii.

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

	
viii.

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

	
ix.

	
  total stockholder return;

	
x.

	
  gross or net profit or operating margin;

	
xi.

	
  costs;

	
xii.

	
  productivity;

	
xiii.

	
  expense targets or cost reduction goals;

	
xiv.

	
  general and administrative expense savings;

	
xv.

	
  operating efficiency;

	
xvi.

	
  customer satisfaction and brand perception/brand health;

	
xvii.

	
  working capital, or any component thereof;

	
xviii.

	
  earnings or diluted earnings per share;

	
xix.

	
  adjusted earnings or diluted earnings per share;

	
xx.

	
  price per share of the Company’s common stock,

	
xxi.

	
  amount of debt or debt reduction;

	
xxii.

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

	
xxiii.

	
  market share; and

	
xxiv.

	
  economic value.

 

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

(b)            With respect to each Performance Period, when the outcome of the Performance Goal(s) remains substantially uncertain, the Committee shall establish the Performance Goals for the Performance Bonuses for such Performance Period.  The Performance Goals for the Performance Bonuses shall be based upon formulas that tie such Performance Bonuses to one or more performance objectives relating to the Performance Goals.  With respect to each Performance Period, the Committee shall determine the method by which a Participant’s Performance Bonus under the Bonus Plan shall be calculated for such Performance Period, based on the attainment of the applicable Performance Goals, or such other factors or criteria the Committee deems appropriate in its sole discretion, including, without limitation, service-related criteria.  Except as may otherwise be determined in the discretion of the Committee or its delegate, a Participant must be actively employed by the Company or a Participating Affiliate on the date a Performance Bonus is paid in order to receive a Performance Bonus.  For purposes of the Bonus Plan, “Performance Period” shall mean any fiscal year of the Company (beginning with the Company’s fiscal year ending June 29, 2019) or such other period as shall be designated by the Committee in its sole discretion.

 

(c)            After the end of the applicable Performance Period and prior to the payment of any Performance Bonuses to Participants, the Committee shall determine or certify in writing with respect to the attainment of the performance objectives.  Payment of any Performance Bonus shall be made in cash following the date of such certification and in any event on or prior to the last day of the “short-term deferral” period under Section 409A of the Code.

 

(d)            Prior to making any Performance Bonus payment, the Committee shall have the discretion to increase (but not above the limit set forth below) or decrease the Performance Bonus payment otherwise calculated pursuant to Section 4(a).  In no event shall the payment to any one Participant under the Bonus Plan with respect to any Performance Period exceed six million dollars ($6,000,000).

 

(e)            The Committee may, in its sole discretion, provide that one or more adjustments shall be made to one or more of the Performance Goals, which adjustments may increase or decrease a Performance Bonus.  Such adjustments may include, among others, one or more of the following:

 

	
i.

	
  items related to a change in accounting principle;

	
ii.

	
  items relating to financing activities;

	
iii.

	
  expenses for restructuring or productivity initiatives;

	
iv.

	
  other non-operating items;

	
v.

	
  items related to acquisitions;

	
vi.

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

	
vii.

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

	
viii.

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

	
ix.

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

	
x.

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

	
xi.

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

	
xii.

	
  items related to amortization of acquired intangible assets;

	
xiii.

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

	
xiv.

	
  items related to acquired in-process research and development;

	
xv.

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

	
xvi.

	
  items relating to major licensing or partnership arrangements;

	
xvii.

	
  items relating to asset impairment charges;

	
xviii.

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

	
xix.

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

	
xx.

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

	
xxi.

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

 

The Committee shall have the discretion to determine whether, when and to what extent an adjustment is necessary or advisable based upon consideration of such factors the Committee deems appropriate in light of the facts and circumstances.

 

5.            Forfeiture and Claw-Back Provisions

 

The Committee may provide that any Performance Bonuses paid under the Bonus Plan shall be subject to the provisions of any claw-back policy implemented by the Company from time to time, including, without limitation, any claw-back policy adopted to comply with the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act and any rules or regulations promulgated thereunder, to the extent set forth in such claw-back policy.

 

6.            Other Provisions

 

(a)            Neither the establishment of the Bonus Plan nor the selection of any individual as a Participant shall give any individual any right to be retained in the employ of the Company or any subsidiary thereof, or any right whatsoever under the Bonus Plan other than to receive Performance Bonus payments if awarded by the Committee.

 

(b)            No member of the Board or the Committee, or any officer or employee of the Company to whom the Committee may delegate administration of the Bonus Plan, shall be liable to any individual in respect of the Bonus Plan for any act or omission of such member or of any other member or of any officer, agent or employee of the Company.

 

(c)            In the event that any provision of the Bonus Plan shall be held to be illegal, invalid or unenforceable for any reason, such illegality, invalidity or unenforceability shall not affect the remaining parts of the Bonus Plan, and the Bonus Plan shall be construed and enforced as if such illegal, invalid or unenforceable provisions had never been contained in the Bonus Plan.

(d)            Any interests of Participants under the Bonus Plan may not be voluntarily sold, transferred, pledged, alienated, assigned or encumbered, other than by will or pursuant to the laws of descent and distribution.

 

(e)            The Company shall withhold such amounts as may be required by federal, state, local, foreign or provincial law from all Performance Bonus payments under the Bonus Plan.

 

(f)            To the extent not preempted by federal law, the Bonus Plan shall be governed and construed in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof.

 

(g)            The Bonus Plan is an “unfunded” plan providing incentive compensation and nothing contained herein shall give any Participant any rights that are greater than those of a general unsecured creditor of the Company.

 

(h)            No Performance Bonus payment under the Bonus Plan shall be deemed compensation for purposes of computing benefits under any retirement plan of the Company or its subsidiaries nor affect any benefits under any other benefit plan now or subsequently in effect under which the availability or amount of benefits is related to the level of compensation, except to the extent set forth in any such retirement or other benefit plan.

 

(i)            The provisions of Performance Bonuses need not be the same with respect to each Participant, and Performance Bonuses to individual Participants need not be the same in subsequent years.

 

7.            Amendment and Termination

 

The Company reserves the right to amend, suspend or terminate the Bonus Plan at any time in its sole discretion.

I hereby certify that the Bonus Plan was duly adopted by the Board of Directors of Tapestry, Inc. as of August 9, 2018.

 

	
 

	
TAPESTRY, INC.

	
 

	
 

	
 

	
 

	
By:

	

	
 

	
 

	
Todd Kahn, Secretary

 

EXHIBIT A

Participating Affiliates

(As of July 1, 2018)

 

	
LEGAL ENTITY

	
JURISDICTION

	
B.B. SAS

Coach Consulting Dongguan, Co. Ltd. 

Coach Hong Kong Limited

Coach Hong Kong Limited - Macau Branch

Coach International Limited

Coach International Limited - Korea Branch 

Coach Italy Srl

Coach Japan LLC 

Coach Korea Limited

Coach Leatherware India Pvt.Ltd. 

Coach Malaysia Sdn. Bhd.

Coach Management (Shanghai) Co., Ltd. 

Coach Netherlands BV

Coach Netherlands BV - Philippines Branch 

Coach Netherlands BV - Taiwan Branch 

Coach New Zealand

Coach Operations Singapore Pte. Ltd. 

Coach Shanghai Limited

Coach Singapore Pte. Ltd. 

Coach Spain SL

Coach Stores Australia Pty Ltd. 

Coach Stores Austria GmbH 

Coach Stores Belgium BVBA 

Coach Stores Canada Corporation 

Coach Stores France SARL

 Coach Stores Germany GmbH 

Coach Stores Ireland Ltd.

Coach Stores Limited

Coach Stores Puerto Rico, Inc. 

Coach Stores Switzerland GmbH 

Coach Stores Unipessoal Ltda.

Coach Vietnam Co., Ltd.

Kate Spade & Company International 

Limited Kate Spade Canada Corporation

Kate Spade Japan Co., Ltd. 

Kate Spade LLC

Kate Spade New York - France SARL

Kate Spade Puerto Rico, LLC 

Kate Spade U.K. Limited

Kate Spade U.K. Ltd. (French Branch) 

Kate Spade U.K. Ltd. (Ireland Branch) 

Shoe Heaven, SL

Shoes by Stuart, SLU

Stuart Weitzman (Monaco) SARL 

Tapestry, Inc.

	
France

China

Hong Kong

Macau

Hong Kong

Korea

Italy

Japan

Korea

India

Malaysia

China

Netherlands

Philippines

Taiwan

New Zealand

Singapore

China

Singapore

Spain

Australia

Austria

Belgium

Canada

France

Germany

Ireland

UK

Puerto Rico

Switzerland

Portugal

Vietnam

Hong Kong

Canada

Japan

US

France

US

UK

France

Ireland

Spain

Spain

Monaco

US

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