-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Vte6nlWm8muO3dBMfNA8TI2DvjRYe3ZIH5I3lU1D0v39pKjlZrjz5Lh1twGwERIH dGbkfx2bhK+F4kJcsOfRxQ== 0000950152-04-008864.txt : 20041209 0000950152-04-008864.hdr.sgml : 20041209 20041209163938 ACCESSION NUMBER: 0000950152-04-008864 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 17 CONFORMED PERIOD OF REPORT: 20041030 FILED AS OF DATE: 20041209 DATE AS OF CHANGE: 20041209 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ABERCROMBIE & FITCH CO /DE/ CENTRAL INDEX KEY: 0001018840 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-FAMILY CLOTHING STORES [5651] IRS NUMBER: 311469076 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-12107 FILM NUMBER: 041193750 BUSINESS ADDRESS: STREET 1: 6301 FITCH PATH CITY: NEW ALBANY STATE: OH ZIP: 43054 BUSINESS PHONE: 6145776500 MAIL ADDRESS: STREET 1: 6301 FITCH PATH CITY: NEW ALBANY STATE: OH ZIP: 43054 10-Q 1 l10858ae10vq.txt ABERCROMBIE & FITCH CO. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------------------------- FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended October 30, 2004 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ----------------------- ---------------------- Commission file number 1-12107 ABERCROMBIE & FITCH CO. ------------------------------------------------------ (Exact name of registrant as specified in its charter) Delaware 31-1469076 - ------------------------------- -------------------------------------- (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 6301 Fitch Path, New Albany, OH 43054 -------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (614) 283-6500 ------------------------- Not Applicable ---------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report.) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes [X] No [ ] Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class A Common Stock Outstanding at December 3, 2004 - ----------------------------- ------------------------------------- $.01 Par Value 87,149,083 Shares ABERCROMBIE & FITCH CO. TABLE OF CONTENTS
Page No. -------- Part I. Financial Information Item 1. Financial Statements Condensed Consolidated Statements of Income Thirteen and Thirty-Nine Weeks Ended October 30, 2004 and November 1, 2003.....................................................3 Condensed Consolidated Balance Sheets October 30, 2004 and January 31, 2004......................................................4 Condensed Consolidated Statements of Cash Flows Thirty-Nine Weeks Ended October 30, 2004 and November 1, 2003......................................................5 Notes to Condensed Consolidated Financial Statements................................................6 Report of Independent Registered Public Accounting Firm............................................14 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.............................................15 Item 3. Quantitative and Qualitative Disclosures About Market Risk...................................29 Item 4. Controls and Procedures......................................................................30 Part II. Other Information Item 1. Legal Proceedings............................................................................31 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds .................................34 Item 5. Other Information ...........................................................................35 Item 6. Exhibits ....................................................................................38
2 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS ABERCROMBIE & FITCH CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Thousands except per share amounts) (Unaudited)
Thirteen Weeks Ended Thirty-Nine Weeks Ended ------------------------------ ------------------------------ October 30, November 1, October 30, November 1, 2004 2003 2004 2003 ----------- ----------- ----------- ----------- NET SALES $ 520,724 $ 444,979 $ 1,333,999 $ 1,147,421 Cost of Goods Sold, Occupancy and Buying Costs 293,888 261,114 759,987 691,035 ----------- ----------- ----------- ----------- GROSS INCOME 226,836 183,865 574,012 456,386 General, Administrative and Store Operating Expenses 164,559 102,415 395,709 279,030 ----------- ----------- ----------- ----------- OPERATING INCOME 62,277 81,450 178,303 177,356 Interest Income, Net (1,574) (757) (3,919) (2,610) ----------- ----------- ----------- ----------- INCOME BEFORE INCOME TAXES 63,851 82,207 182,222 179,966 Provision for Income Taxes 23,760 31,750 69,600 69,140 ----------- ----------- ----------- ----------- NET INCOME $ 40,091 $ 50,457 $ 112,622 $ 110,826 =========== =========== =========== =========== NET INCOME PER SHARE: BASIC $ 0.43 $ 0.52 $ 1.19 $ 1.14 =========== =========== =========== =========== DILUTED $ 0.42 $ 0.51 $ 1.17 $ 1.11 =========== =========== =========== =========== WEIGHTED-AVERAGE SHARES OUTSTANDING: BASIC 93,449 96,407 94,490 97,076 =========== =========== =========== =========== DILUTED 95,351 99,102 96,522 100,095 =========== =========== =========== =========== DIVIDENDS PER SHARE $ 0.13 $ 0.00 $ 0.50 $ 0.00 =========== =========== =========== ===========
The accompanying notes are an integral part of these condensed consolidated financial statements. 3 ABERCROMBIE & FITCH CONDENSED CONSOLIDATED BALANCE SHEETS (Thousands) (Unaudited)
October 30, January 31, 2004 2004 ----------- ----------- ASSETS - ------ CURRENT ASSETS: Cash and Equivalents $ 443,406 $ 511,073 Marketable Securities -- 10,000 Receivables 20,027 7,197 Inventories 209,002 170,703 Store Supplies 35,432 29,993 Other 28,531 23,689 ----------- ----------- TOTAL CURRENT ASSETS 736,398 752,655 PROPERTY AND EQUIPMENT, NET 484,163 445,956 OTHER ASSETS 7,840 552 ----------- ----------- TOTAL ASSETS $ 1,228,401 $ 1,199,163 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY - ------------------------------------ CURRENT LIABILITIES: Accounts Payable & Outstanding Checks $ 138,740 $ 91,364 Accrued Expenses 200,337 138,232 Income Taxes Payable 37,086 50,406 ----------- ----------- TOTAL CURRENT LIABILITIES 376,163 280,002 DEFERRED INCOME TAXES 28,640 19,516 OTHER LONG-TERM LIABILITIES 32,135 28,388 SHAREHOLDERS' EQUITY: Class A Common Stock - $.01 par value: 150,000,000 shares authorized and 103,300,000 shares issued at October 30, 2004 and January 31, 2004, respectively 1,033 1,033 Paid-In Capital 141,656 139,139 Retained Earnings 985,333 919,577 ----------- ----------- 1,128,022 1,059,749 Less: Treasury Stock, at Average Cost, 12,744,016 and 8,692,501 shares at October 30, 2004 and January 31, 2004, respectively (336,559) (188,492) ----------- ----------- TOTAL SHAREHOLDERS' EQUITY 791,463 871,257 ----------- ----------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,228,401 $ 1,199,163 =========== ===========
The accompanying notes are an integral part of these condensed consolidated financial statements. 4 ABERCROMBIE & FITCH CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Thousands) (Unaudited)
Thirty-Nine Weeks Ended ---------------------------- October 30, November 1, 2004 2003 ----------- ----------- OPERATING ACTIVITIES: Net Income $ 112,622 $ 110,826 Impact of Other Operating Activities on Cash Flows: Depreciation and Amortization 55,828 47,894 Loss on Retirement of Property and Equipment 2,553 -- Non-cash Charge for Deferred Compensation 7,670 4,083 Deferred Taxes (9,646) 12,116 Changes in Assets and Liabilities: Inventories (31,147) (49,875) Accounts Payable and Accrued Expenses 89,461 19,570 Income Taxes 17,285 (7,340) Other Assets and Liabilities (24,492) 167 --------- --------- NET CASH PROVIDED BY OPERATING ACTIVITIES 220,134 137,441 --------- --------- INVESTING ACTIVITIES: Capital Expenditures Including Capital Lease Obligations (106,043) (83,631) Proceeds from Maturities of Marketable Securities 10,000 10,000 --------- --------- NET CASH USED FOR INVESTING ACTIVITIES (96,043) (73,631) --------- --------- FINANCING ACTIVITIES: Change in Cash Overdraft 8,518 (1,686) Stock Option Exercises and Other 33,162 18,162 Purchases of Treasury Stock (197,892) (68,746) Dividends Paid (35,546) -- --------- --------- NET CASH USED FOR FINANCING ACTIVITIES (191,758) (52,270) --------- --------- NET (DECREASE) INCREASE IN CASH AND EQUIVALENTS (67,667) 11,540 Cash and Equivalents, Beginning of Year 511,073 420,063 --------- --------- CASH AND EQUIVALENTS, END OF PERIOD $ 443,406 $ 431,603 ========= ========= SIGNIFICANT NON-CASH INVESTING ACTIVITIES: Change in Accrual for Construction in Progress $( 7,295) $ 24,921 ========= ========= Change in Construction Allowance Receivables $( 2,688) $ 5,591 ========= ========= SIGNIFICANT NON-CASH FINANCING ACTIVITIES: Declaration of Cash Dividend to be Paid $ 11,319 -- ========= =========
The accompanying notes are an integral part of these condensed consolidated financial statements. 5 ABERCROMBIE & FITCH NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. BASIS OF PRESENTATION Abercrombie & Fitch Co. ("A&F"), through its subsidiaries (collectively, A&F and its subsidiaries are referred to as "Abercrombie & Fitch" or the "Company"), is a specialty retailer of high quality, casual apparel for men, women, guys, girls and kids with an active, youthful lifestyle. The condensed consolidated financial statements include the accounts of A&F and all significant subsidiaries that are more than 50 percent owned and controlled. All significant intercompany balances and transactions have been eliminated in consolidation. Certain amounts have been reclassified to conform with the current year presentation. The amounts reclassified did not have an effect on the Company's results of operations or shareholders' equity. The condensed consolidated financial statements as of October 30, 2004 and for the thirteen and thirty-nine week periods ended October 30, 2004 and November 1, 2003 are unaudited and are presented pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in A&F's Annual Report on Form 10-K for the fiscal year ended January 31, 2004 (the "2003 fiscal year"). In the opinion of management, the accompanying condensed consolidated financial statements reflect all adjustments (which are of a normal recurring nature) necessary to present fairly the financial position and results of operations and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for the fiscal year ending January 29, 2005 (the "2004 fiscal year"). The condensed consolidated financial statements as of October 30, 2004 and for the thirteen and thirty-nine week periods ended October 30, 2004 and November 1, 2003 included herein have been reviewed by the independent registered public accounting firm of PricewaterhouseCoopers LLP and the report of such firm follows the notes to the condensed consolidated financial statements. PricewaterhouseCoopers LLP is not subject to the liability provisions of Section 11 of the Securities Act of 1933 (the "Act") for its report on the condensed consolidated financial statements because that report is not a "report" within the meaning of Sections 7 and 11 of the Act. 6 2. STOCK-BASED COMPENSATION The Company reports stock-based compensation through the disclosure-only requirements of Statement of Financial Accounting Standards ("SFAS") No. 123, "Accounting for Stock-Based Compensation," as amended by SFAS No. 148, "Accounting for Stock-Based Compensation - Transition and Disclosure - an Amendment of FASB Statement No. 123," but elects to measure compensation expense using the intrinsic value method in accordance with Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees." Accordingly, no compensation expense for options has been recognized as all options are granted at fair market value at the grant date. The Company recognizes compensation expense related to restricted share and stock unit awards. If compensation expense related to options for the thirteen and thirty-nine week periods ended October 30, 2004, and November 1, 2003, respectively, had been determined based on the estimated fair value of options granted, consistent with the methodology in SFAS No. 123, the pro forma effect on net income and net income per basic and diluted share would have been as follows: (Thousands except per share amounts)
Thirteen Weeks Ended Thirty-Nine Weeks Ended ----------------------------- ------------------------------ October 30, November 1, October 30, November 1, 2004 2003 2004 2003 ---------- ----------- ----------- ----------- Net income: As reported $ 40,091 $ 50,457 $ 112,622 $ 110,826 Stock-based compensation expense included in reported net income, net of tax 1,424 868 4,361 2,524 Stock-based compensation expense determined under fair value based method, net of tax(1) (6,564) (6,918) (19,481) (20,575) ---------- ---------- ----------- ----------- Pro forma $ 34,951 $ 44,407 $ 97,502 $ 92,775 ========== ========== =========== =========== Basic net income per share: As reported $ 0.43 $ 0.52 $ 1.19 $ 1.14 Pro forma $ 0.37 $ 0.46 $ 1.03 $ 0.96 Diluted net income per share: As reported $ 0.42 $ 0.51 $ 1.17 $ 1.11 Pro forma $ 0.37 $ 0.45 $ 1.01 $ 0.93
(1) Includes stock-based compensation expense related to restricted share and stock unit awards actually recognized in net income in each period presented. The weighted-average fair value of options granted during the third quarter of the 2004 fiscal year and the 2003 fiscal year was $13.93 and $14.35, respectively. The fair value of each option, which is included in the pro forma results above, was estimated using the Black-Scholes option-pricing model. For purposes of the valuation, the following weighted-average assumptions were used: a 1.28% dividend yield in 2004 and no dividends in 2003; price volatility of 55.3% in 2004 and 61.7% in 2003; risk-free interest rates of 3.1% in 2004 and 3.2% in 2003; assumed forfeiture rates of 26.4% in 2004 and 23.0% in 2003 and expected lives of four years in 2004 and 2003, respectively. 7 3. NET INCOME PER SHARE Weighted-Average Shares Outstanding (in thousands):
Thirteen Weeks Ended -------------------------------------- October 30, 2004 November 1, 2003 ---------------- ---------------- Shares of Class A Common Stock issued 103,300 103,300 Treasury shares (9,851) (6,893) -------- -------- Basic shares 93,449 96,407 Dilutive effect of options and restricted shares 1,902 2,695 -------- -------- Diluted shares 95,351 99,102 ======== ========
Thirty-Nine Weeks Ended -------------------------------------- October 30, 2004 November 1, 2003 ---------------- ---------------- Shares of Class A Common Stock issued 103,300 103,300 Treasury shares (8,810) (6,224) -------- -------- Basic shares 94,490 97,076 Dilutive effect of options and restricted shares 2,032 3,019 -------- -------- Diluted shares 96,522 100,095 ======== ========
Options to purchase 5,639,984 shares of Class A Common Stock during both the thirteen and thirty-nine week periods ended October 30, 2004 and 6,019,000 and 6,005,000 shares of Class A Common Stock during the thirteen and thirty-nine week periods ended November 1, 2003, respectively, were outstanding but were not included in the computation of net income per diluted share because the options' exercise prices were greater than the average market price of the underlying shares. 4. INVENTORIES Inventories are principally valued at the lower of average cost or market, on a first-in-first-out basis, utilizing the retail method. An initial markup is applied to inventory at cost in order to establish a cost-to-retail ratio. Permanent markdowns, when taken, reduce both the retail and cost components of inventory on hand so as to maintain the already established cost-to-retail relationship. The fiscal year is comprised of two principal selling seasons: spring (the first and second quarters) and fall (the third and fourth quarters). The Company further reduces inventory at season end by recording an additional markdown reserve using the retail carrying value of inventory from the season just passed. Markdowns on this carryover inventory represent estimated future anticipated selling price declines. Additionally, inventory valuation at the end of the first and third quarters reflects adjustments for inventory markdowns for the total season. Further, as part of inventory valuation, inventory shrinkage estimates are made based on historical trends, which reduce the inventory value for lost or stolen items. 8 The inventory reserve for markdowns and valuations was $25.5 million, $5.5 million and $17.2 million at October 30 2004, January 31, 2004 and November 1, 2003, respectively. The shrink reserve was $3.6 million, $3.3 million and $4.3 million at October 30, 2004, January 31, 2004, and November 1, 2003, respectively. The inventory valuations at January 31, 2004, reflect adjustments for inventory markdowns for the end of the season. 5. PROPERTY AND EQUIPMENT, NET Property and equipment, net, consisted of (in thousands):
October 30, 2004 January 31, 2004 ---------------- ---------------- Property and equipment, at cost $ 750,591 $ 676,172 Accumulated depreciation and amortization (266,428) (230,216) --------- --------- Property and equipment, net $ 484,163 $ 445,956 ========= =========
6. INCOME TAXES The provision for income taxes is based on the current estimate of the annual effective tax rate. Income taxes paid during the thirty-nine weeks ended October 30, 2004 and November 1, 2003, approximated $62.3 million and $64.7 million, respectively. 7. LONG-TERM DEBT The Company entered into a $250 million syndicated unsecured credit agreement (the "Credit Agreement") on November 14, 2002. The primary purposes of the Credit Agreement are for trade and stand-by letters of credit and working capital. The Credit Agreement is due to expire on November 14, 2005. The Credit Agreement has several borrowing options, including interest rates that are based on the agent bank's "Alternate Base Rate," or a LIBO Rate. Facility fees payable under the Credit Agreement are based on the Company's ratio (the "leverage ratio") of the sum of total debt plus 800% of forward minimum rent commitments to consolidated EBITDAR for the trailing four-fiscal-quarter period and currently accrues at .225% of the committed amounts per annum. The Credit Agreement contains limitations on indebtedness, liens, sale-leaseback transactions, significant corporate changes including mergers and acquisitions with third parties, investments, restricted payments (including dividends and stock repurchases), hedging transactions and transactions with affiliates. The Credit Agreement also contains financial covenants requiring a minimum ratio, on a consolidated basis, of EBITDAR for the trailing four-fiscal-quarter period to the sum of interest expense and minimum rent for such period, as well as a maximum leverage ratio. 9 On September 15, 2004, the Company entered into a Second Amendment in respect of the Credit Agreement in order to permit additional share repurchases. The Second Amendment allows the Company to repurchase shares of A&F Class A Common Stock for cash in any amount so long as no loans (as defined in the Credit Agreement) have been made pursuant to the Credit Agreement. If loans have at any time been made, the Company may repurchase shares of A&F Class A Common Stock (i) in any fiscal year, in an aggregate amount not in excess of 40% of "consolidated net income" (as defined in the Credit Agreement) for the immediately preceding fiscal year less the aggregate amount of any repurchases made in such fiscal year pursuant to clause (ii) below, plus (ii) an aggregate cumulative amount of $250,000,000 less the aggregate cumulative amount of any repurchases made pursuant to clause (i) above and any repurchases made after September 15, 2004 and prior to the making of loans pursuant to the Credit Agreement. Letters of credit are not considered to be "loans" for purposes of the Credit Agreement. On November 8, 2004, the Company executed a letter of intent to enter into an amended credit agreement that will replace the Credit Agreement (see Note 10). Letters of credit totaling approximately $66.8 million and $62.3 million were outstanding under the Credit Agreement at October 30, 2004 and at November 1, 2003, respectively. No loans were outstanding under the Credit Agreement at October 30, 2004 or at November 1, 2003. 8. RELATED PARTY TRANSACTIONS Shahid & Company, Inc. has provided advertising and design services for the Company since 1995. Sam N. Shahid, Jr., who serves on A&F's Board of Directors, has been President and Creative Director of Shahid & Company, Inc. since 1993. Fees paid to Shahid & Company, Inc. for services provided during the thirteen and thirty-nine week periods ended October 30, 2004, were approximately $700 thousand and $1.9 million, respectively. For services provided during the thirteen and thirty-nine week periods ended November 1, 2003, the fees paid to Shahid & Company, Inc. were approximately $500 thousand and $1.5 million, respectively. The amounts do not include reimbursements to Shahid & Company, Inc. for expenses incurred while performing these services. 9. CONTINGENCIES The Company is involved in a number of legal proceedings that arise out of, and are incidental to, the conduct of its business. In 2003, five actions were filed under various states' laws on behalf of purported classes of employees and former employees of the Company alleging that the Company required its associates to wear and pay for a "uniform" in violation of applicable law. Two of the actions have been ordered coordinated. In each case, the plaintiff, on behalf of his or her purported class, seeks injunctive relief and unspecified amounts of economic and liquidated damages. For certain of the cases, the parties are in the process of discovery. In one case, the Company has filed a motion to dismiss; while in all other cases, answers have been filed. Two of those cases have been stayed, and the plaintiffs in those cases have been joined in the action described immediately below. 10 In 2003, an action was filed in the U.S. District Court for the Western District of Pennsylvania, in which the plaintiff alleges that the "uniform," when purchased, drove associates' wages below the federal minimum wage. The complaint purports to state a collective action on behalf of part-time associates under the Fair Labor Standards Act. Recently, the plaintiff amended the complaint and added new named plaintiffs, asserting claims under the laws of six states as well as the Fair Labor Standards Act. The parties are in the process of settling this case and two of the five state court cases described in the immediately preceding paragraph (see Note 10). As previously mentioned, three of the above-described cases are in the process of being settled. The Company does not believe it is feasible to predict the outcome of the other legal proceedings described above and intends to vigorously defend against each of them. The timing of the final resolution of each of these proceedings is also uncertain. Accordingly, the Company cannot estimate a range of potential loss, if any, for any of these legal proceedings. In each of 2003 and 2002, one action was filed against the Company involving overtime compensation. In each action, the plaintiffs, on behalf of their respective purported class, seek injunctive relief and unspecified amounts of economic and liquidated damages. The Company has filed a motion to dismiss in one of the cases. In the other case, the parties are in the process of discovery, and the trial court has ordered a class of store managers in California certified for limited purposes. In 2003, one lawsuit was filed in the U.S. District Court for the Northern District of California on behalf of a purported class alleged to be discriminated against in hiring or employment decisions due to race and/or national origin. The plaintiffs in this lawsuit sought, on behalf of their purported class, injunctive relief and unspecified amounts of economic, compensatory and punitive damages. On November 8, 2004, the Company signed a consent decree settling this lawsuit and two related class action employment discrimination lawsuits (see Note 10). The Company accrues amounts related to legal matters if reasonably estimable and reviews these amounts at least quarterly. During the first quarter of fiscal 2004, the Company recorded an $8.0 million charge (net of expected proceeds of $10 million from insurance) resulting from an increase in expected defense costs related to the purported class action employment discrimination lawsuit described in the preceding paragraph. The monetary terms of the consent decree are described in Note 10. 11 The Company has standby letters of credit in the amount of $4.7 million that are set to expire during the fourth quarter of the fiscal year ending January 28, 2006 (the "2005 fiscal year"). The beneficiary, a merchandise supplier, has the right to draw upon the standby letters of credit if the Company has authorized or filed a voluntary petition in bankruptcy. To date, the beneficiary has not drawn upon the standby letters of credit. The Company enters into agreements with professional services firms, in the ordinary course of business and, in most agreements, indemnifies these firms from any harm. There is no financial impact on the Company related to these indemnification agreements. 10. SUBSEQUENT EVENTS On November 8, 2004, the Company executed a commitment letter in respect of a contemplated amended and restated credit agreement, (the "Amended Credit Agreement"). The Amended Credit Agreement will mature five years from the date of executing the definitive Amended Credit Agreement. The commitment letter contemplates that the facility fees payable under the Amended Credit Agreement will be based on the Company's ratio (the "leverage ratio") of the sum of total debt plus 600% of forward minimum rent commitments to consolidated EBITDAR for the trailing four-fiscal-quarter period and the facility fees are projected to accrue at .175% of the committed amounts per annum. The remaining terms are expected to be largely similar to the current Credit Agreement (see Note 7). In addition to the class action employment discrimination lawsuit described in Note 9, two other class action employment discrimination lawsuits have been filed in the U.S. District Court for the Northern District of California, both on November 8, 2004. One alleges gender (female) discrimination in hiring or employment decisions and seeks, on behalf of the purported class, injunctive relief and unspecified amounts of economic, compensatory and punitive damages. The other was brought by the Equal Employment Opportunity Commission (the "EEOC") alleging race, ethnicity, and gender (female) discrimination in hiring or employment decisions. The EEOC complaint seeks injunctive relief and, on behalf of the purported class, unspecified amounts of economic, compensatory and punitive damages. On November 8, 2004, the Company signed a consent decree settling these three related class action discrimination lawsuits, subject to judicial review and approval. The monetary terms of the consent decree provide that the Company will set aside $40.0 million to pay to the class, approximately $7.5 million for attorneys' fees, and approximately $2.5 million for monitoring and administrative costs to carry out the settlement. As a result, the Company accrued a non-recurring charge of $32.9 million, which was included in general, administrative and store operating expenses for the thirteen weeks ended October 30, 2004. This is in addition to amounts accrued during the first quarter of fiscal 2004 when the Company recorded an $8.0 million charge (net of expected proceeds of $10 million from insurance) resulting from an increase in expected defense costs related to the Gonzalez case. The preliminary approval order was signed by Judge Susan Illston of the U.S. District Court for the Northern District of California on November 16, 2004, and that order scheduled a final fairness and approval hearing for April 14, 2005. 12 Also on November 9, 2004, A&F announced that the Board of Directors had authorized the extension of A&F's stock repurchase program to permit the repurchase of an additional 6 million shares of A&F Class A Common Stock. On November 17, 2004, the court hearing the action filed in the U.S. District Court for the Western District of Pennsylvania gave final approval of the settlement. The settlement resolves all claims of hourly employees in the states of Colorado, Connecticut, Illinois, Minnesota, New Jersey and Pennsylvania under their respective state laws and their claims under the Fair Labor Standards Act. The settlement did not have a material impact to the consolidated financial statements. 13 Report of Independent Registered Public Accounting Firm To the Board of Directors and Shareholders of Abercrombie & Fitch Co.: We have reviewed the accompanying condensed consolidated balance sheet of Abercrombie & Fitch Co. and its subsidiaries as of October 30, 2004, and the related condensed consolidated statements of income for each of the thirteen and thirty-nine week periods ended October 30, 2004 and November 1, 2003 and the condensed consolidated statements of cash flows for the thirty-nine week periods ended October 30, 2004 and November 1, 2003. These interim financial statements are the responsibility of the Company's management. We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the accompanying condensed consolidated interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America. We previously audited in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet as of January 31, 2004, and the related consolidated statements of income, of shareholders' equity, and of cash flows for the year then ended (not presented herein), and in our report dated February 17, 2004 we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of January 31, 2004, is fairly stated in all material respects in relation to the consolidated balance sheet from which it has been derived. /s/ PricewaterhouseCoopers LLP Columbus, Ohio December 2, 2004 14 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OVERVIEW The Company operates four brands: Abercrombie & Fitch, a fashion-oriented casual apparel business directed at men and women with a youthful lifestyle, targeted at 18 to 22 year-old college students; abercrombie, a fashion-oriented casual apparel brand in the tradition of Abercrombie & Fitch style and quality, targeted at 7 to 14 year-old boys and girls; Hollister, a West Coast oriented lifestyle brand targeted at 14 to 17 year-old high school guys and girls, at lower price points than Abercrombie & Fitch; and RUEHL, a fashion-oriented mix of business casual and trend fashion displaying high quality clothing, leather goods, and lifestyle accessories, targeted at 22 to 30 year-old modern-minded, post-college consumers. In addition to predominantly mall-based store locations, Abercrombie & Fitch, abercrombie and Hollister also offer Web sites, where products comparable to those carried at the corresponding stores can be purchased. RESULTS OF OPERATIONS During the third quarter of the 2004 fiscal year, net sales increased 17% to $520.7 million from $445.0 million in the third quarter of the 2003 fiscal year. Operating income decreased to $62.3 million in the third quarter of 2004 from $81.5 million in the third quarter of 2003. Operating income included a one-time accrual of $32.9 million for the settlement of three related class action employment discrimination lawsuits, which was included in general, administrative and store operating expenses. Net income decreased to $40.1 million in the third quarter of 2004 compared to $50.5 million in the third quarter of 2003. Net income per diluted share was $.42 in the third quarter of 2004 compared to $.51 in the third quarter of 2003. The settlement accrual, net of the related tax effect, reduced reported net income per fully diluted share in the third quarter of the 2004 fiscal year by $.22. The following data represent the amounts shown in the Company's condensed consolidated statements of income for the thirteen and thirty-nine week periods ended October 30, 2004 and November 1, 2003, expressed as a percentage of net sales:
Thirteen Weeks Ended Thirty-Nine Weeks Ended ------------------------------ ------------------------------- October 30, November 1, October 30, November 1, 2004 2003 2004 2003 ----------- ----------- ----------- ----------- NET SALES 100.0% 100.0% 100.0% 100.0% Cost of Goods Sold, Occupancy and Buying Costs 56.4 58.7 57.0 60.2 ----- ----- ----- ----- GROSS INCOME 43.6 41.3 43.0 39.8 General, Administrative and Store Operating Expenses 31.6 23.0 29.7 24.3 ----- ----- ----- ----- OPERATING INCOME 12.0 18.3 13.3 15.5 Interest Income, Net (0.3) (0.2) (0.3) (0.2) ----- ----- ----- ----- INCOME BEFORE INCOME TAXES 12.3 18.5 13.6 15.7 Provision for Income Taxes 4.6 7.1 5.2 6.0 ----- ----- ----- ----- NET INCOME 7.7% 11.4% 8.4% 9.7% ===== ===== ===== =====
15 Financial Summary The following summarized financial and statistical data compare the thirteen and thirty-nine week periods ended October 30, 2004, to the comparable periods of the 2003 fiscal year:
Thirteen Weeks Ended Thirty-Nine Weeks Ended --------------------------- ---------------------------- October 30, November 1, % October 30, November 1, % 2004 2003 Change 2004 2003 Change ----------- ----------- ------ ----------- ----------- ------- Net sales (millions) $ 521 $ 445 17% $ 1,334 $ 1,147 16% Increase (decrease) in comparable store sales 1% (9)% (1)% (8)% Retail sales increase attributable to new and remodeled stores, catalogue and Web sites 16% 15% 17% 16% Retail sales per average gross square foot $ 92 $ 91 1% $ 240 $ 241 nm Retail sales per average store (thousands) $ 655 $ 659 (1)% $ 1,712 $ 1,749 (2)% Average store size at period-end (gross square feet) 7,118 7,233 (2)% n/a n/a Gross square feet at period-end (thousands) 5,438 4,709 15% n/a n/a Sales statistics per average store Number of transactions - ---------------------- Abercrombie & Fitch 10,516 11,997 -12% 32,175 35,644 -10% abercrombie 5,262 5,563 -5% 14,735 15,223 -3% Hollister 13,597 14,008 -3% 39,679 40,660 -2% RUEHL 4,171 n/a 4,171 n/a Average transaction value - ------------------------- Abercrombie & Fitch $ 74.09 $ 67.50 10% $ 65.31 $ 61.88 6% abercrombie $ 63.49 $ 60.51 5% $ 55.42 $ 54.91 1% Hollister $ 52.39 $ 48.68 8% $ 46.98 $ 44.70 5% RUEHL $ 107.98 n/a $ 107.98 n/a Units per transaction - --------------------- Abercrombie & Fitch 2.17 2.21 -2% 2.26 2.25 nm abercrombie 2.78 2.63 6% 2.75 2.74 nm Hollister 2.23 2.19 2% 2.23 2.13 5% RUEHL 2.33 n/a 2.33 n/a Average unit value - ------------------ Abercrombie & Fitch $ 34.14 $ 30.54 12% $ 28.90 $ 27.50 5% abercrombie $ 22.84 $ 23.01 -1% $ 20.15 $ 20.04 1% Hollister $ 23.49 $ 22.23 8% $ 21.07 $ 20.99 nm RUEHL $ 46.34 n/a $ 46.34 n/a
16 Current Trends and Outlook While the Company is pleased with the recent trend improvement in sales and comparable store sales, defined as sales in stores that have been open for at least one year, the Company remains cautious about its outlook for the remainder of the year. The Company's decision not to anniversary holiday promotions this year may impact holiday sales levels. The Company's focus is on building, maintaining and controlling its brands because they express a lifestyle to which their customer aspires. Management believes that this strategy allows the Company to maintain high margins over the long term while driving the Company's growth in sales and profits through the development of new brands. As a result, comparable store sales may decline in the Company's more mature business as the Company strives to maintain its brands' aspirational qualities and high margins. In order to achieve and maintain the aspirational quality of the brands, the Company is increasing expenditures to maintain and enhance the current store base. Additionally, the Company is increasing its store-based personnel to provide better customer service and reduce levels of inventory shrink. Depending on the sales performance of the Company during the remainder of the fall season, the initiatives may have a short-term impact on the operating margin. Finally, the Company is hoping to capitalize on its success in international sales through its Web sites by investigating opportunities to enter international markets in the near future. The Company is currently evaluating opportunities to enter both the Canadian and European markets by the end of the 2005 fiscal year. THIRD QUARTER RESULTS Net Sales Net sales for the third quarter of 2004 were $520.7 million, an increase of 17% over last year's third quarter net sales of $445.0 million. The net sales increase was attributable to the net addition of 113 stores and a 1% comparable store sales increase. By brand, comparable store sales for the quarter versus the same quarter last year were as follows: Abercrombie & Fitch declined 2% with mens comparable store sales increasing by a high-single digit percentage and womens declining by a high-single digit percentage. In abercrombie, comparable store sales decreased 3% with both girls and boys comparable store sales declining by the same low-single digit percentage. In Hollister, comparable store sales increased by 13% with both guys and girls achieving similar mid-teen digit increases for the quarter. On a regional basis, comparable store sales results were strongest in the West and Northeast and weakest in the Midwest and South. Stores located in the New York metropolitan area and Southern California had the best comparable store sales performance for the third quarter. In Abercrombie & Fitch, mens achieved positive comparable store sales during the quarter driven by strong results in denim, woven shirts and polos. Womens had comparable store sales decreases in polos, pants and graphic tees that were not offset by increases in denim and fleece when compared to third quarter 2003. 17 In the kids' business, girls comparable store sales increased during the third quarter of 2004 compared to the same quarter last year in knits and denim but these results could not offset decreases in graphic tees and pants. Boys had comparable store sales decreases in conversation tees, pants and fleece. Increases in knits and denim were not sufficient to offset the weaker performing boys categories. In Hollister, guys achieved stronger comparable store sales than girls. In guys, increases in conversation tees, denim, woven shirts and fleece during the quarter more than offset decreases in knits. In girls, knits, denim, fleece and sweaters had comparable store sales increases; however, graphic tees and pants declined. The impact of opening three RUEHL stores was immaterial to the Company's total results for the third quarter of the 2004 fiscal year. Direct to consumer merchandise net sales through the Company's Web sites and catalogue for the third quarter of the 2004 fiscal year were $27.6 million, an increase of 28.4% over last year's third quarter net sales of $21.5 million. Shipping and handling revenue for the corresponding periods was $4.0 million in 2004 and $2.8 million in 2003. The direct to consumer business accounted for 6.1% of net sales in the third quarter of the 2004 fiscal year compared to 5.5% in the third quarter of fiscal 2003. Gross Income The Company's gross income may not be comparable to that of other retailers since all significant costs related to the Company's distribution network, excluding direct shipping costs related to the e-commerce and catalogue sales, are included in general, administrative and store operating expenses (see "General, Administrative and Store Operating Expenses" section below). Gross income for the third quarter of the 2004 fiscal year was $226.8 million compared to $183.9 million in the comparable period during the 2003 fiscal year. The gross income rate (gross income divided by net sales) for the third quarter of the 2004 fiscal year was 43.6%, up 230 basis points from last year's rate of 41.3%. The increase in gross income rate resulted largely from an increase in initial markup (IMU). The improvement in IMU during the third quarter was as a result of higher unit retail pricing in Abercrombie & Fitch and Hollister. All three brands had IMU improvements compared to the third quarter of 2003 and are operating at similar margins. The Company ended the third quarter of the 2004 fiscal year with inventories, at cost, down 15% per gross square foot versus the third quarter of the 2003 fiscal year. The inventory decrease reflects a shift in the timing of deliveries during the quarter coupled with stronger sales this year compared to weaker sales last year. 18 General, Administrative and Store Operating Expenses General, administrative and store operating expenses during the third quarter of the 2004 fiscal year were $164.6 million compared to $102.4 million during the same period in the 2003 fiscal year. For the third quarter of the 2004 fiscal year, the general, administrative and store operating expense rate (general, administrative and store operating expenses divided by net sales) was 31.6% compared to 23.0% in the third quarter of the 2003 fiscal year. The increase in rate versus the 2003 comparable period was primarily due to the following: a one-time accrual for the settlement of three related class action employment discrimination lawsuits which represented 630 basis points of the increase and higher store expenses due to an increase in aggregate payroll which represented 160 basis points of the increase. Wage levels, in all three brands, decreased compared to the third quarter of 2003. The decrease in wage levels was due to an increase in part-time hours in order to provide better customer service at the stores. The distribution center continued to achieve record levels of productivity during the third quarter of the 2004 fiscal year. Productivity, as measured in units processed per labor hour, was 2% higher than the third quarter of the 2003 fiscal year. Costs related to the distribution center, excluding direct shipping costs related to the e-commerce and catalogue sales, included in general, administrative and store operating expenses were $5.3 million for the third quarter of the 2004 fiscal year compared to $4.9 million for the third quarter of the 2003 fiscal year. Operating Income Operating income for the third quarter of the 2004 fiscal year decreased to $62.3 million from $81.5 million in the 2003 fiscal year third quarter, a decrease of 23.6%. The operating income rate (operating income divided by net sales) was 12.0% for the third quarter of the 2004 fiscal year compared to 18.3% for the third quarter of the 2003 fiscal year. The decrease in the operating income during the third quarter of fiscal 2004 was a result of higher general, administrative and store operating expenses during the quarter, partially offset by higher IMU resulting from higher unit retail pricing in Abercrombie & Fitch and Hollister. Interest Income and Income Tax Expense Third quarter net interest income was $1.6 million in 2004 compared to $757 thousand last year. The increase in net interest income was due to higher rates during the third quarter of the 2004 fiscal year when compared to the same period in the prior year. The Company continued to invest in tax-free securities. The effective tax rate for the third quarter was 37.2% compared to 38.6% for the 2003 comparable period. The reduction in rate was primarily due to the favorable settlement of state tax matters during the third quarter. Off-Balance Sheet Arrangements and Contractual Obligations The Company does not have off-balance sheet arrangements or debt obligations. The contractual obligations of the Company as of October 30, 2004, have not significantly changed from the ones disclosed in A&F's Annual Report on Form 10-K for the fiscal year ended January 31, 2004. There have been changes in the ordinary course of the Company's business during the quarterly period ended October 30, 2004 in the Company's contractual obligations included within both the "operating leases" category and the "purchase obligations and other" category. 19 YEAR-TO-DATE RESULTS Net Sales Year-to-date net sales in 2004 were $1.334 billion, an increase of 16.3% over last year's net sales of $1.147 billion for the same period. The net sales increase was attributable to the net addition of 113 stores, offset by a 1% comparable store sales decrease. Year-to-date comparable store sales by merchandise concept were as follows: Abercrombie & Fitch comparable store sales declined 3%, abercrombie comparable stores sales declined 4% and Hollister achieved a 9% comparable store sales increase. The women's business in each brand continued to be more significant than mens. Year-to-date, womens and girls represented over 60% of the net sales for each of the brands. In Abercrombie & Fitch, womens had a mid-single digit decline in comparable store sales year-to-date, while in abercrombie, girls had a low-single digit decline. Hollister girls achieved a high-single digit comparable store sales increase on a year-to-date basis. For the 2004 year-to-date period, sales per square foot in Hollister stores were approximately 137% of the sales per square foot of Abercrombie & Fitch stores in the same malls compared to 116% for the 2003 year-to-date period. Direct to consumer merchandise net sales through the Company's Web sites and catalogue for the 2004 year-to-date period were $70.5 million, an increase of 42.4% over last year's net sales of $49.5 million for the comparable period. Shipping and handling revenue for the corresponding periods was $10.1 million in 2004 and $6.7 million in 2003. The direct to consumer business accounted for 6.0% of net sales compared to 4.9% for the year-to-date periods ended October 30, 2004 and November 1, 2003, respectively. The impact of opening three RUEHL stores was immaterial to the Company's total results for the year-to-date period of the 2004 fiscal year. Gross Income The Company's gross income may not be comparable to that of other retailers since all significant costs related to the Company's distribution network, excluding direct shipping costs related to the e-commerce and catalogue sales, are included in general, administrative and store operating expenses (see "General, Administrative and Store Operating Expenses" section below). Year-to-date gross income increased to $574.0 million for the 2004 fiscal year from $456.4 million in the comparable period during the 2003 fiscal year. The gross income rate (gross income divided by net sales) for the period was 43.0%, up 320 basis points from last year's rate of 39.8%. The increase was driven by improvements in IMU across all three brands due to higher average unit retail pricing, especially in Abercrombie & Fitch, which was partially offset by increased markdowns, as a percentage of net sales. As previously mentioned, improved sourcing has been an important factor in improving IMU in all three concepts. The markdown rate was higher for the 2004 year-to-date period than the comparable period in 2003 due to the Company's strategy of clearing merchandise quickly in order to add more items to the selling floor. 20 General, Administrative and Store Operating Expenses Year-to-date general, administrative and store operating expenses at the end of the third quarter of the 2004 fiscal year were $395.7 million versus $279.0 million for the same time period the previous year. The general, administrative and store operating expense rate in 2004 was 29.7% versus 24.3% in 2003. The increased rate in the 2004 year-to-date period was primarily due to higher home office and store expenses. Home office expenses increased largely due to the accrual for the settlement of three related class action employment discrimination lawsuits which represented 310 basis points, higher payroll, higher bonus accruals resulting from improved financial performance during the spring season, and expenses related to the retirement of an executive officer. Store expenses increased due to an increase in aggregate payroll. Wage levels, in all three brands, decreased compared to the comparable period last year. The decrease in wage levels was due to an increase in part-time hours in order to provide better customer service at the stores. Costs related to the distribution center, excluding direct shipping costs related to the e-commerce and catalogue sales, included in general, administrative and store operating expenses were $14.2 million and $13.7 million for the year-to-date periods ended October 30, 2004 and November 1, 2003, respectively. Operating Income Year-to-date operating income for the 2004 fiscal year increased to $178.3 million from $177.4 million in the 2003 fiscal year comparable period, an increase of 1%. The operating income rate (operating income divided by net sales) was 13.3% for the 2004 year-to-date period compared to 15.5% for the comparable period in the 2003 fiscal year. The decrease was primarily due to the accrual for the settlement of three related class action employment discrimination lawsuits, partially offset by sales increases due to new stores, higher gross margin and increases in average unit retail pricing in all three brands. Interest Income and Income Tax Expense Year-to-date net interest income for the 2004 fiscal year was $3.9 million compared to $2.6 million for the comparable period in 2003. The increase in net interest income was due to higher rates and higher average cash balances for the year-to-date period of the 2004 fiscal year when compared to the same period of the prior year. The Company continued to invest in tax-free securities. The effective tax rate for the 2004 year-to-date period was 38.2% compared to 38.4% for the 2003 comparable period. 21 FINANCIAL CONDITION Liquidity and Capital Resources Cash provided by operating activities provides the resources to support operations, including projected growth, seasonal requirements and capital expenditures. A summary of the Company's working capital position and capitalization follows (in thousands):
October 30, January 31, 2004 2004 ----------- ----------- Working capital $360,235 $472,653 =========== =========== Capitalization: Shareholders' equity $791,463 $871,257 =========== ===========
Net cash provided by operating activities, the Company's primary source of liquidity, totaled $220.1 million for the thirty-nine weeks ended October 30, 2004 versus $137.4 million in the comparable period of 2003. Cash was provided primarily by current year net income adjusted for depreciation and amortization and by increases in accounts payable and accrued expenses. Uses of cash primarily consisted of increases in inventories and other assets and liabilities. Accounts payable increased to support the cost of growth in the number of new stores, the declaration of the third quarter dividend payment and the timing of payments. Accrued expenses also increased for items such as higher legal accruals related to the settlement of three related class action employment discrimination lawsuits, higher payroll, accruals related to the retirement of an executive officer and accruals related to store repairs and maintenance in preparation for the holiday season. Inventories increased as a result of preparation for the holiday season as well as growth in the store base during the first three quarters of 2004. Other assets and liabilities increased primarily as a result of an increase in accounts receivables related to expected proceeds from an insurance claim pertaining to legal expenses and an increase in supplies as a result of the growth in the store base. The Company's operations are seasonal in nature and typically peak during the back-to-school and Christmas selling periods. Accordingly, cash requirements for inventory expenditures are highest during these periods. Cash outflows for investing activities were for capital expenditures (see the discussion in the "Capital Expenditures" section below) related primarily to new stores and construction in process in 2004. Cash inflows from investing activities consisted of maturities of marketable securities. Financing activities for the thirty-nine week period ended October 30, 2004, consisted of $33.2 million received in connection with stock option exercises, $35.5 million for the payment of the quarterly $0.125 dividends on March 30, 2004, June 22, 2004 and September 21, 2004, respectively, $197.9 million for the repurchase of A&F's Class A Common Stock and $8.5 million for cash overdrafts which are outstanding checks reclassified from cash to accounts payable. 22 During the third quarter of 2004, the Company repurchased 5.4 million shares of A&F's Class A Common Stock at an average cost of $33.47 per share for a total of $179.3 million pursuant to the July 29, 2004 A&F Board of Directors' authorization to repurchase 6 million shares of A&F's Class A Common Stock. On November 8, 2004, A&F's Board of Directors authorized the repurchase of 6 million shares of A&F's Class A Common Stock in addition to the remaining balance of the July 29, 2004 authorization. The Company expects that substantially all future capital expenditures will be funded with cash from operations. In addition, the Company has $250 million available (less outstanding letters of credit) under its current Credit Agreement to support operations. Letters of credit totaling approximately $66.8 million and $62.3 million were outstanding under the current Credit Agreement at October 30, 2004 and November 1, 2003, respectively. No loans were outstanding under the current Credit Agreement on October 30, 2004 or November 1, 2003. The Company has standby letters of credit in the amount of $4.7 million that are set to expire during the fourth quarter of the 2005 fiscal year. The beneficiary, a merchandise supplier, has the right to draw upon the standby letters of credit if the Company authorizes or files a voluntary petition in bankruptcy. To date, the beneficiary has not drawn upon the standby letters of credit. 23 Store Count and Gross Square Feet Store count and gross square footage by brand were as follows:
Thirteen Weeks Ended Thirty-Nine Weeks Ended ---------------------------- ---------------------------- October 30, November 1, October 30, November 1, 2004 2003 2004 2003 ----------- ----------- ----------- ----------- Number of stores and gross square feet by brand Abercrombie & Fitch: Stores at beginning of period 359 346 357 340 Opened 6 6 11 14 Closed (2) -- (5) (2) ------ ------ ------ ------ Stores at end of period 363 352 363 352 ====== ====== ====== ====== Gross square feet (thousands) 3,191 3,128 ====== ====== abercrombie: Stores at beginning of period 171 167 171 164 Opened 3 3 5 6 Closed -- -- (2) -- ------ ------ ------ ------ Stores at end of period 174 170 174 170 ====== ====== ====== ====== Gross square feet (thousands) 767 753 ====== ====== Hollister: Stores at beginning of period 197 112 172 93 Opened 27 17 52 36 Closed -- -- -- -- ------ ------ ------ ------ Stores at end of period 224 129 224 129 ====== ====== ====== ====== Gross square feet (thousands) 1,452 828 ====== ====== RUEHL Stores at beginning of period -- -- -- -- Opened 3 -- 3 -- Closed -- -- -- -- ------ ------ ------ ------ Stores at end of period 3 -- 3 -- ====== ====== ====== ====== Gross square feet (thousands) 28 -- ====== ======
24 Capital Expenditures Capital expenditures, net of construction allowances, totaled $106.0 million and $83.6 million for the thirty-nine weeks ended October 30, 2004 and November 1, 2003, respectively. Additionally, the non-cash accrual for construction in progress decreased $7.3 million and increased $24.9 million for the thirty-nine week periods ended October 30, 2004, and November 1, 2003, respectively. Capital expenditures related primarily to new store construction, including the non-cash accrual for construction in progress. The balance of capital expenditures related primarily to miscellaneous store remodeling projects. The Company anticipates spending $125.0 million to $135.0 million in the 2004 fiscal year for capital expenditures, of which $85.0 million to $95.0 million will be for new/remodel store construction. The balance of the capital expenditures will primarily relate to home office and distribution center projects and other miscellaneous projects. The Company intends to have added approximately 700,000 gross square feet of store space in the 2004 fiscal year, which will represent a 14% increase over year-end 2003. It is anticipated that the increase will result from the addition of approximately 12 new Abercrombie & Fitch stores, 9 new abercrombie stores, 85 new Hollister stores and four RUEHL stores by the end of the 2004 fiscal year versus last year. The Company will also have remodeled approximately 15 Abercrombie & Fitch stores by the end of the 2004 fiscal year. The Company estimates that the average cost for leasehold improvements and furniture and fixtures for Abercrombie & Fitch stores opened during the 2004 fiscal year will approximate $625,000 per store, net of landlord allowances. In addition, initial inventory purchases are expected to average approximately $270,000 per store. The Company estimates that the average cost for leasehold improvements and furniture and fixtures for abercrombie stores opened during the 2004 fiscal year will approximate $541,000 per store, net of landlord allowances. In addition, initial inventory purchases are expected to average approximately $130,000 per store. The Company estimates that the average cost for leasehold improvements and furniture and fixtures for Hollister stores opened during the 2004 fiscal year will approximate $597,000 per store, net of landlord allowances. In addition, initial inventory purchases are expected to average approximately $190,000 per store. Although the Company opened three RUEHL stores during the third quarter, it believes that the costs it has incurred to-date for the stores is not representative of the future average cost of opening a store. The Company expects that substantially all future capital expenditures will be funded with cash from operations. In addition, the Company has $250 million available (less outstanding letters of credit) under its current Credit Agreement to support operations. 25 Critical Accounting Policies and Estimates The Company's significant and critical accounting policies and estimates can be found in the Notes to Consolidated Financial Statements contained in Item 8 of A&F's Annual Report on Form 10-K for the fiscal year ended January 31, 2004 (see Note 2). Additionally, the Company believes that the following policies are critical to the portrayal of the Company's financial condition and results of operations for interim periods. Revenue Recognition - The Company recognizes retail sales at the time the customer takes possession of the merchandise and purchases are paid for, primarily with either cash or credit card. Catalogue and e-commerce sales are recorded upon customer receipt of merchandise. Amounts relating to shipping and handling billed to customers in a sale transaction are classified as revenue and the direct shipping costs are classified as cost of goods sold. Employee discounts are classified as a reduction of revenue. The Company reserves for sales returns through estimates based on historical experience and various other assumptions that management believes to be reasonable. Inventory Valuation - Inventories are principally valued at the lower of average cost or market, on a first-in first-out basis, utilizing the retail method. The retail method of inventory valuation is an averaging technique applied to different categories of inventory. At the Company, the averaging is determined at the stock keeping unit ("SKU") level by averaging all costs for each SKU. An initial markup ("IMU") is applied to inventory at cost in order to establish a cost-to-retail ratio. Permanent markdowns, when taken, reduce both the retail and cost components of inventory on hand so as to maintain the already established cost-to-retail relationship. The use of the retail method and the recording of markdowns effectively values inventory at the lower of cost or market. The Company further reduces inventory at season end by recording an additional markdown reserve using the retail carrying value of inventory from the season just passed. Markdowns on this carryover inventory represent estimated future anticipated selling price declines. Additionally, inventory valuation at the end of the first and third quarters reflects adjustments for inventory markdowns for the total season. Further, as part of inventory valuation, an inventory shrinkage estimate is made each period that reduces the value of inventory for lost or stolen items. Inherent in the retail method calculation are certain significant judgments and estimates including, among others, initial markup, markdowns and shrinkage, which could significantly impact the ending inventory valuation at cost as well as the resulting gross margins. Management believes that this inventory valuation method is appropriate since it preserves the cost-to-retail relationship in ending inventory. 26 Income Taxes - Income taxes are calculated in accordance with SFAS No. 109, "Accounting for Income Taxes," which requires the use of the liability method. Deferred tax assets and liabilities are recognized based on the difference between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Inherent in the measurement of deferred balances are certain judgments and interpretations of enacted tax law and published guidance with respect to applicability to the Company's operations. Significant examples of this concept include capitalization policies for various tangible and intangible costs, income and expense recognition and inventory valuation methods. No valuation allowance has been provided for deferred tax assets because management believes the full amount of the net deferred tax assets will be realized in the future. The effective tax rate utilized by the Company reflects management's judgment of the expected tax liabilities within the various taxing jurisdictions. Contingencies - In the normal course of business, the Company must make continuing estimates of potential future legal obligations and liabilities, which requires the use of management's judgment on the outcome of various issues. Management may also use outside legal advice to assist in the estimating process. However, the ultimate outcome of various legal issues could be different than management estimates, and adjustments may be required. 27 Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995 A&F cautions that any forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995) contained in this Quarterly Report on Form 10-Q or made by management of A&F involve risks and uncertainties and are subject to change based on various important factors, many of which may be beyond the Company's control. Words such as "estimate," "project," "plan," "believe," "expect," "anticipate," "intend," and similar expressions may identify forward-looking statements. The following factors, in addition to those included in the disclosure under the heading "RISK FACTORS" in "ITEM 1. BUSINESS" of A&F's Annual Report on Form 10-K for the fiscal year ended January 31, 2004, in some cases have affected and in the future could affect the Company's financial performance and could cause actual results for the 2004 fiscal year and beyond to differ materially from those expressed or implied in any of the forward-looking statements included in this Quarterly Report on Form 10-Q or otherwise made by management: - changes in consumer spending patterns and consumer preferences; - the effects of political and economic events and conditions domestically and in foreign jurisdictions in which the Company operates, including, but not limited to, acts of terrorism or war; - the impact of competition and pricing; - changes in weather patterns; - postal rate increases and changes; - paper and printing costs; - market price of key raw materials; - ability to source product from its global supplier base; - political stability; - currency and exchange risks and changes in existing or potential duties, tariffs or quotas; - availability of suitable store locations at appropriate terms; - ability to develop new merchandise; and - ability to hire, train and retain associates. Future economic and industry trends that could potentially impact revenue and profitability are difficult to predict. Therefore, there can be no assurance that the forward-looking statements included in this Quarterly Report on Form 10-Q will prove to be accurate. In light of the significant uncertainties in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company, or any other person, that the objectives of the Company will be achieved. The forward-looking statements herein are based on information presently available to the management of the Company. Except as may be required by applicable law, the Company assumes no obligation to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized. 28 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The market risk of the Company's financial instruments as of October 30, 2004 has not significantly changed since January 31, 2004. The Company's market risk profile as of January 31, 2004 is disclosed in "Item 7A - Quantitative and Qualitative Disclosures about Market Risk" of A&F's Annual Report on Form 10-K for the fiscal year ended January 31, 2004. 29 ITEM 4. CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures With the participation of the Chairman and Chief Executive Officer (the principal executive officer) and the Senior Vice President - Chief Financial Officer (the principal financial officer) of Abercrombie & Fitch Co. ("A&F"), A&F's management has evaluated the effectiveness of A&F's disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the end of the quarterly period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, A&F's Chairman and Chief Executive Officer and A&F's Senior Vice President - Chief Financial Officer have concluded that: - information required to be disclosed by A&F in this Quarterly Report on Form 10-Q and other reports which A&F files or submits under the Exchange Act would be accumulated and communicated to A&F's management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure; - information required to be disclosed by A&F in this Quarterly Report on Form 10-Q and other reports which A&F files or submits under the Exchange Act would be recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms; and - A&F's disclosure controls and procedures are effective as of the end of the quarterly period covered by this Quarterly Report on Form 10-Q to ensure that material information relating to A&F and its consolidated subsidiaries is made known to them, particularly during the period for which the periodic reports of A&F, including this Quarterly Report on Form 10-Q, are being prepared. Changes in Internal Control over Financial Reporting There were no changes in A&F's internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during A&F's fiscal quarter ended October 30, 2004, that have materially affected, or are reasonably likely to materially affect, A&F's internal control over financial reporting. 30 PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS The Company is a defendant in lawsuits arising in the ordinary course of business. A&F is aware of 20 actions that have been filed against A&F and certain of its officers and directors on behalf of a purported, but as yet uncertified, class of shareholders who purchased A&F's Class A Common Stock between October 8, 1999 and October 13, 1999. These 20 actions have been filed in the United States District Courts for the Southern District of New York and the Southern District of Ohio, Eastern Division, alleging violations of the federal securities laws and seeking unspecified damages. On April 12, 2000, the Judicial Panel on Multidistrict Litigation issued a Transfer Order transferring the 20 pending actions to the Southern District of New York for consolidated pretrial proceedings under the caption In re Abercrombie & Fitch Securities Litigation. On November 16, 2000, the Court signed an Order appointing the Hicks Group, a group of seven unrelated investors in A&F's securities, as lead plaintiff, and appointing lead counsel in the consolidated action. On December 14, 2000, plaintiffs filed a Consolidated Amended Class Action Complaint (the "Amended Complaint") in which they did not name as defendants Lazard Freres & Co. and Todd Slater, who had formerly been named as defendants in certain of the 20 complaints. A&F and other defendants filed motions to dismiss the Amended Complaint on February 14, 2001. On November 14, 2003, the motions to dismiss the Amended Complaint were denied. On December 2, 2003, A&F moved for reconsideration or reargument of the November 14, 2003 order denying the motions to dismiss. The motions for reconsideration or reargument were fully briefed and submitted to the Court on January 9, 2004. The motions were denied on February 23, 2004. A&F is aware of six actions that have been filed on behalf of purported classes of employees and former employees of the Company alleging that the Company required its associates to wear and pay for a "uniform" in violation of applicable law. In each case, the plaintiff, on behalf of his or her purported class, seeks injunctive relief and unspecified amounts of economic and liquidated damages. Two of these cases, Jennifer M. Solis v. Abercrombie & Fitch Stores, Inc. and A&F California, LLC and Sarah Stevenson v. Abercrombie & Fitch Co., allege violations of California law and were filed on February 10, 2003 and February 4, 2003 in the California Superior Courts for Los Angeles County and San Francisco County, respectively. An answer was filed in the Solis case on March 26, 2003. Pursuant to a Petition for Coordination, the Solis and the Stevenson cases were coordinated by order issued November 17, 2003. Shelby Port v. Abercrombie & Fitch Stores, Inc., which alleges violations of Washington law, was filed on or about July 18, 2003 in the Washington Superior Court of King County. The defendant filed a motion to dismiss the complaint in the Port case on September 5, 2003. The plaintiff filed an amended complaint on or about August 9, 2004, adding three new named plaintiffs and subsequently filed a second amended complaint on or about October 20, 2004. The defendant filed its answer to the second amended complaint on or about November 19, 2004. The plaintiffs filed a motion to certify a class of employees in the state of Washington on or about November 10, 2004. The defendant intends to oppose that motion. The Company does not believe it is feasible to predict the outcome of the legal proceedings identified in this paragraph and intends to defend vigorously against them. The timing of the final resolution of each of these proceedings is also uncertain. Accordingly, the Company cannot estimate a range of potential loss, if any, for any of these legal proceedings. 31 Jadii Mohme v. Abercrombie & Fitch, which alleges violations of Illinois law, was filed on July 18, 2003 in the Illinois Circuit Court of St. Clair County. A first amended complaint was filed in the Mohme case on September 10, 2003 to change the defendant to "Abercrombie & Fitch Stores, Inc." from "Abercrombie & Fitch." An answer to the first amended complaint was filed in the Mohme case on September 26, 2003. Holly Zemany v. Abercrombie & Fitch, which alleges violations of Pennsylvania law, was filed on July 18, 2003 in the Pennsylvania Court of Common Pleas of Allegheny County. A first amended complaint was filed in the Zemany case on September 9, 2003 to change the defendant to "Abercrombie & Fitch Stores, Inc." from "Abercrombie & Fitch." A second amended complaint was filed on November 10, 2003, adding some factual allegations. The defendant filed an answer to the second amended complaint on January 22, 2004. In Michael Gualano v. Abercrombie & Fitch, which was filed in the United States District Court for the Western District of Pennsylvania on March 14, 2003, the plaintiff alleges that the "uniform," when purchased, drove associates' wages below the federal minimum wage. The complaint purports to state a collective action on behalf of part-time associates under the Fair Labor Standards Act. A first amended complaint was filed in the Gualano case on September 9, 2003, to change the defendant to "Abercrombie & Fitch Stores, Inc." from "Abercrombie & Fitch." An answer to the first amended complaint was filed in the Gualano case on or about September 24, 2003. Jadii Mohme and Holly Zemany have stayed their claims in state court and joined their claims with Michael Gualano along with four other named plaintiffs in four other states in a second amended complaint, which the defendant has answered. The parties are in the process of settling these claims. On November 17, 2004, the United States District Court for the Western District of Pennsylvania gave final approval of the settlement, and dismissal of the case with prejudice was entered. The Mohme and Zemany cases are in the process of being dismissed with prejudice pursuant to the terms of the settlement. The settlement resolves all claims of hourly employees in the states of Colorado, Connecticut, Illinois, Minnesota, New Jersey and Pennsylvania under their respective state laws and their claims under the Fair Labor Standards Act. The Company does not expect the settlement to be material to the consolidated financial statements. A&F is aware of two actions that have been filed against the Company involving overtime compensation. In each action, the plaintiffs, on behalf of their respective purported class, seek injunctive relief and unspecified amounts of economic and liquidated damages. In Bryan T. Kimbell, Individually and on Behalf of All Others Similarly Situated and on Behalf of the Public v. Abercrombie & Fitch Stores, Inc., which was filed on July 10, 2002 in the California Superior Court for Los Angeles County, the plaintiffs allege that California general and store managers were entitled to receive overtime pay as "non-exempt" employees under California wage and hour laws. An answer was filed in the Kimbell case on September 4, 2002 and the parties are in the process of discovery. The trial court has ordered a class of store managers in California certified for limited purposes. In Melissa Mitchell, et al. v. Abercrombie & Fitch Co. and Abercrombie & Fitch Stores, Inc., which was filed on June 13, 2003 in the United States District Court for the Southern District of Ohio, the plaintiffs allege that assistant managers and store managers were not paid overtime compensation in violation of the Fair Labor Standards Act and Ohio law. The defendants filed a motion to dismiss the Mitchell case on July 28, 2003. The case was transferred from the Western Division to the Eastern Division of the Southern District of Ohio on April 21, 2004. The plaintiffs filed an amended complaint to add Scott Oros as a named plaintiff on October 28, 2004. The defendants subsequently renewed their motion to dismiss, which is pending. 32 The Company does not believe it is feasible to predict the outcome of the legal proceedings described in the immediately preceding paragraph and intends to defend vigorously against them. The timing of the final resolution of each of these proceedings is also uncertain. Accordingly, the Company cannot estimate a range of potential loss, if any, for any of these legal proceedings. A&F is aware of three actions that have been filed on behalf of a purported class alleged to be discriminated against in hiring or employment decisions due to race, national origin and/or gender. Eduardo Gonzalez, et al. v. Abercrombie & Fitch Co. was filed on June 16, 2003 in the United States District Court for the Northern District of California. The plaintiffs subsequently amended their complaint to add A&F California, LLC, Abercrombie & Fitch Stores, Inc. and A&F Ohio, Inc. as defendants. The plaintiffs allege, on behalf of their purported class, that they were discriminated against in hiring and employment decisions due to their race and/or national origin. The plaintiffs seek, on behalf of their purported class, injunctive relief and unspecified amounts of economic, compensatory and punitive damages. A second amended complaint, which added two additional plaintiffs, was filed on or about January 9, 2004. The defendants filed an answer to the second amended complaint on or about January 26, 2004. A third amended complaint was filed June on 10, 2004, restating the original claims and adding two individual, but not class, claims of gender discrimination. The defendants filed an answer on or about June 21, 2004. On November 8, 2004, the plaintiffs filed a fourth amended complaint, adding an additional plaintiff and claims on behalf of those who asserted they were discriminated against in hiring and employment decisions as managers due to their race and/or national origin. On November 11, 2004, the defendants answered the fourth amended complaint. Two other class action employment discrimination lawsuits have been filed in the United States District Court for the Northern District of California, both on November 8, 2004. In Elizabeth West, et al. v. Abercrombie & Fitch Stores, Inc., et al., the plaintiffs allege gender (female) discrimination in hiring or employment decisions and seek, on behalf of their purported class, injunctive relief and unspecified amounts of economic, compensatory and punitive damages. The other was brought by the Equal Employment Opportunity Commission (the "EEOC") and alleges race, ethnicity and gender (female) discrimination in hiring or employment decisions. The EEOC complaint seeks injunctive relief and, on behalf of the purported class, unspecified amounts of economic, compensatory and punitive damages. On November 8, 2004, the Company signed a consent decree settling these three related class action discrimination lawsuits, subject to judicial review and approval. The monetary terms of the consent decree provide that the Company will set aside $40.0 million to pay to the class, approximately $7.5 million for attorneys' fees, and approximately $2.5 million for monitoring and administrative costs to carry out the settlement. As a result, the Company accrued a non-recurring charge of $32.9 million, which was included in general, administrative and store operating expenses for the thirteen weeks ended October 30, 2004. This is in addition to amounts accrued during the first quarter of fiscal 2004 when the Company recorded an $8.0 million charge (net of expected proceeds of $10 million from insurance) resulting from an increase in expected defense costs related to the Gonzalez case. As part of the consent decree, the Company also agreed to implement a series of programs and initiatives that are designed to achieve greater diversity throughout its stores. The preliminary approval order was signed by Judge Susan Illston of the United States District Court for the Northern District of California on November 16, 2004, and that order scheduled a final fairness and approval hearing for April 14, 2005. 33 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS (a) Not applicable (b) Not applicable (c) The following table provides information regarding A&F's purchase of its Class A Common Stock during each fiscal month of the quarterly period ended October 30, 2004:
Total Number of Maximum Number of Average Shares Purchased as Shares that May Yet Total Number Price Paid Part of Publicly be Purchased under the of Shares per Announced Plans or Plans or Programs Period Purchased Share Programs (1), (2) ------------ ----------- ------------------- ---------------------- August 1 through 1,220,000 $ 29.17 1,220,000 4,385,000 August 28, 2004 August 29 through October 2, 2004 1,766,500 $ 32.27 1,766,500 2,618,500 October 3 through October 30, 2004 2,370,000 $ 36.56 2,370,000 643,500 --------- --------- --------- --------- Total 5,356,500 $ 33.47 5,356,500 643,500 ========= ========= ========= =========
(1) The number shown represents, as of the end of each period, the maximum number of shares of Class A Common Stock that may yet be purchased under A&F's publicly announced stock purchase authorizations. On July 29, 2004, A&F announced the authorization of the repurchase of 6,000,000 shares of Class A Common Stock. The shares may be purchased from time-to-time, depending on market conditions. (2) On November 9, 2004, A&F announced that the Board of Directors had authorized the extension of A&F's stock repurchase program to permit the repurchase of an additional 6,000,000 shares of A&F Class A Common Stock. This authorization in not reflected in the numbers in this column. 34 Part II Item 5. Other Information. 1. Form of Restricted Shares Award Agreement under the 1998 Restatement of the Abercrombie & Fitch Co. 1996 Stock Option and Performance Incentive Plan prior to November 28, 2004 -- Attached as Exhibit 10.11 is the form of award agreement that A&F has previously entered into and delivered to grantees of restricted shares under the 1998 Restatement of the Abercrombie & Fitch Co. 1996 Stock Option and Performance Incentive Plan. Grantees have included executive officers of A&F. 2. Form of Restricted Shares Award Agreement (No Performance-Based Goals) under the 1998 Restatement of the Abercrombie & Fitch Co. 1996 Stock Option and Performance Incentive Plan after November 28, 2004 -- Attached as Exhibit 10.12 is the new form of award agreement to be entered into by A&F in respect of restricted shares to be granted under the 1998 Restatement of the Abercrombie & Fitch Co. 1996 Stock Option and Performance Incentive Plan which do not require the satisfaction of performance goals to be earned. The purpose of the new form of award agreement is to provide further information in respect of the grant consistent with the terms of the Plan. As of the date of this Quarterly Report on Form 10-Q, no grants have been evidenced by this new form. Grantees may include executive officers of A&F other than Michael S. Jeffries. 3. Form of Restricted Shares Award Agreement (Performance-Based Goals) under the 1998 Restatement of the Abercrombie & Fitch Co. 1996 Stock Option and Performance Incentive Plan after November 28, 2004 - Attached as Exhibit 10.13 is the new form of award agreement to be entered into by A&F in respect of restricted shares to be granted under the 1998 Restatement of the Abercrombie & Fitch Co. 1996 Stock Option and Performance Incentive Plan which require the satisfaction of performance goals to be earned. The purpose of the new form of award agreement is to provide further information in respect of the grant consistent with the terms of the Plan. As of the date of this Quarterly Report on Form 10-Q, no grants have been evidenced by this new form. Grantees may include executive officers of A&F other than Michael S. Jeffries. 4. Form of Stock Option Agreement (Nonstatutory Stock Options) under the 1998 Restatement of the Abercrombie & Fitch Co. 1996 Stock Option and Performance Incentive Plan prior to November 28, 2004 -- Attached as Exhibit 10.14 is the form of stock option agreement that A&F has previously entered into and delivered to grantees of nonstatutory stock options under the 1998 Restatement of the Abercrombie & Fitch Co. 1996 Stock Option and Performance Incentive Plan. Grantees have included executive officers of A&F. 5. Form of Stock Option Agreement (Nonstatutory Stock Options) under the 1998 Restatement of the Abercrombie & Fitch Co. 1996 Stock Option and Performance Incentive Plan after November 28, 2004 -- Attached as Exhibit 10.15 is the new form of stock option agreement to be entered into by A&F in respect of nonstatutory stock options granted and to be granted under the 1998 Restatement of the Abercrombie & Fitch Co. 1996 Stock Option and 35 Performance Incentive Plan. The purpose of the new form of stock option agreement is to provide further information in respect of the grant consistent with the terms of the Plan. As of the date of this Quarterly Report on Form 10-Q, no grants have been evidenced by this new form other than the one made to Thomas D. Mendenhall, an executive officer of A&F, on November 29, 2004. Future grantees will include executive officers of A&F. 6. Form of Stock Option Agreement under the 1998 Restatement of the Abercrombie & Fitch Co. 1996 Stock Plan for Non-Associate Directors -- Attached as Exhibit 10.16 is the form of stock option agreement that A&F has previously entered into and delivered to grantees of nonstatutory stock options under the 1998 Restatement of the Abercrombie & Fitch Co. 1996 Stock Plan for Non-Associate Directors. Grantees have included non-employee directors of A&F. No further grants of nonstatutory stock options may be made under this Plan. 7. Form of Restricted Shares Award Agreement under the Abercrombie & Fitch Co. 2002 Stock Plan for Associates prior to November 28, 2004 -- Attached as Exhibit 10.17 is the form of award agreement that A&F has previously entered into and delivered to grantees of restricted shares under the Abercrombie & Fitch Co. 2002 Stock Plan for Associates. Grantees have included executive officers of A&F. 8. Form of Restricted Shares Award Agreement under the Abercrombie & Fitch Co. 2002 Stock Plan for Associates after November 28, 2004 -- Attached as Exhibit 10.18 is the new form of award agreement to be entered into by A&F in respect of restricted shares granted and to be granted under the Abercrombie & Fitch Co. 2002 Stock Plan for Associates. The purpose of the new form of award agreement is to provide further information in respect of the grant consistent with the terms of the Plan. As of the date of this Quarterly Report on Form 10-Q, no grants have been evidenced by this new form other than the one made to Thomas D. Mendenhall, an executive officer of A&F, on November 29, 2004. Future grantees may include executive officers of A&F other than Michael S. Jeffries. 9. Form of Stock Option Agreement (Nonstatutory Stock Options) under the Abercrombie & Fitch Co. 2002 Stock Plan for Associates prior to November 28, 2004 -- Attached as Exhibit 10.19 is the form of stock option agreement that A&F has previously entered into and delivered to grantees of nonstatutory stock options under the Abercrombie & Fitch Co. 2002 Stock Plan for Associates. Grantees have included executive officers of A&F. 10. Form of Stock Option Agreement (Nonstatutory Stock Options) under the Abercrombie & Fitch Co. 2002 Stock Plan for Associates after November 28, 2004 -- Attached as Exhibit 10.20 is the new form of award agreement for nonstatutory stock options to be granted under the Abercrombie & Fitch Co. 2002 Stock Plan for Associates. The purpose of the new form of stock option agreement is to provide further information in respect of the grant consistent with the terms of the Plan. As of the date of this Quarterly Report on Form 10-Q, no grants have been evidenced by this new form. Grantees will include executive officers of A&F. 36 11. Form of Stock Option Agreement under the Abercrombie & Fitch Co. 2003 Stock Plan for Non-Associate Directors prior to November 28, 2004 -- Attached as Exhibit 10.21 is the form of stock option agreement that A&F has previously entered into and delivered to grantees of nonstatutory stock options under the Abercrombie & Fitch Co. 2003 Stock Plan for Non-Associate Directors. Grantees have included non-employee directors of A&F. 12. Form of Stock Option Agreement under the Abercrombie & Fitch Co. 2003 Stock Plan for Non-Associate Directors after November 28, 2004 -- Attached as Exhibit 10.22 is the new form of stock option agreement for nonstatutory stock options to be granted under the Abercrombie & Fitch Co. 2003 Stock Plan for Non-Associate Directors. The purpose of the new form of stock option agreement is to provide further information in respect of the grant consistent with the terms of the Plan. As of the date of this Quarterly Report on Form 10-Q, no grants have been evidenced by this new form. Grantees will include non-employee directors of A&F. 37 Item 6. EXHIBITS (a) Exhibits 3. Certificate of Incorporation and Bylaws. 3.1 Amended and Restated Certificate of Incorporation of A&F as filed with the Delaware Secretary of State on August 27, 1996, incorporated herein by reference to Exhibit 3.1 to A&F's Quarterly Report on Form 10-Q for the quarterly period ended November 2, 1996. (File No. 1-12107) 3.2 Certificate of Designation of Series A Participating Cumulative Preferred Stock of A&F as filed with the Delaware Secretary of State on July 21, 1998, incorporated herein by reference to Exhibit 3.2 to A&F's Annual Report on Form 10-K for the fiscal year ended January 30, 1999. (File No. 1-12107) 3.3 Certificate of Decrease of Shares Designated as Class B Common Stock of A&F as filed with the Delaware Secretary of State on July 30, 1999, incorporated herein by reference to Exhibit 3.3 to A&F's Quarterly Report on Form 10-Q for the quarterly period ended July 31, 1999. (File No. 1-12107) 3.4 Amended and Restated Bylaws of A&F, effective January 31, 2002, incorporated herein by reference to Exhibit 3.4 to A&F's Annual Report on Form 10-K for the fiscal year ended February 2, 2002. (File No. 1-12107) 3.5 Certificate regarding adoption of amendment to Section 2.02 of Amended and Restated Bylaws of A&F by Board of Directors on July 10, 2003, incorporated herein by reference to Exhibit 3.5 to A&F's Quarterly Report on Form 10-Q for the quarterly period ended November 1, 2003 (File No. 1-12107) 3.6 Certificate regarding adoption of amendments to Sections 1.02, 1.06, 3.01, 3.05, 4.02, 4.03, 4.04, 4.05, 4.06, 6.01 and 6.02 of Amended and Restated Bylaws of A&F by Board of Directors on May 20, 2004, incorporated herein by reference to Exhibit 3.6 to A&F's Quarterly Report on Form 10-Q for the quarterly period ended May 1, 2004 (File No. 1-12107) 3.7 Amended and Restated Bylaws of A&F (reflecting amendments through May 20, 2004) [for SEC reporting compliance purposes only], incorporated herein by reference to Exhibit 3.7 to A&F's Quarterly Report on Form 10-Q for the quarterly period ended May 1, 2004 (File No. 1-12107) 4. Instruments Defining the Rights of Security Holders. 4.1 Credit Agreement, dated as of November 14, 2002, among Abercrombie & Fitch Management Co., as Borrower, A&F, as Guarantor, the Lenders party thereto, and National City Bank, as Administrative Agent and Lead Arranger (the "Credit Agreement"), incorporated herein by reference to Exhibit 4.1 to A&F's Current Report on Form 8-K dated November 26, 2002. (File No. 1-12107) 4.2 Guarantee Agreement, dated as of November 14, 2002, among A&F, each direct and indirect domestic subsidiary of A&F other than Abercrombie & Fitch Management Co., and National City Bank, as Administrative Agent for the Lenders party to the Credit Agreement, incorporated herein by 38 reference to Exhibit 4.2 to A&F's Current Report on Form 8-K dated November 26, 2002. (File No. 1-12107) 4.3 First Amendment and Waiver, dated as of January 26, 2004, to the Credit Agreement, dated as of November 14, 2002, among Abercrombie & Fitch Management Co., A&F, the Lenders party thereto and National City Bank, as Administrative Agent, incorporated herein by reference to Exhibit 4.3 to A&F's Annual Report on Form 10-K for the fiscal year ended January 31, 2004 (File No. 1-12107) 4.4 Rights Agreement, dated as of July 16, 1998, between A&F and First Chicago Trust Company of New York, as Rights Agent, incorporated herein by reference to Exhibit 1 to A&F's Registration Statement on Form 8-A dated July 21, 1998. (File No. 1-12107) 4.5 Amendment No. 1 to Rights Agreement, dated as of April 21, 1999, between A&F and First Chicago Trust Company of New York, as Rights Agent, incorporated herein by reference to Exhibit 2 to A&F's Amendment No. 1 to Form 8-A dated April 23, 1999. (File No. 1-12107) 4.6 Certificate of adjustment of number of Rights associated with each share of Class A Common Stock, dated May 27, 1999, incorporated herein by reference to Exhibit 4.6 to A&F's Quarterly Report on Form 10-Q for the quarterly period ended July 31, 1999. (File No. 1-12107) 4.7 Appointment and Acceptance of Successor Rights Agent, effective as of the opening of business on October 8, 2001, between A&F and National City Bank, incorporated herein by reference to Exhibit 4.6 to A&F's Quarterly Report on Form 10-Q for the quarterly period ended August 4, 2001. (File No. 1-12107) 10. Material Contracts. 10.1 Abercrombie & Fitch Co. Incentive Compensation Performance Plan, incorporated herein by reference to Exhibit 10.1 to A&F's Quarterly Report on Form 10-Q for the quarterly period ended May 4, 2002. (File No. 1-12107) 10.2 1998 Restatement of the Abercrombie & Fitch Co. 1996 Stock Option and Performance Incentive Plan (reflects amendments through December 7, 1999 and the two-for-one stock split distributed June 15, 1999 to stockholders of record on May 25, 1999), incorporated herein by reference to Exhibit 10.2 to A&F's Annual Report on Form 10-K for the fiscal year ended January 29, 2000. (File No. 1-12107) 10.3 1998 Restatement of the Abercrombie & Fitch Co. 1996 Stock Plan for Non-Associate Directors (reflects amendments through January 30, 2003 and the two-for-one stock split distributed June 15, 1999 to stockholders of record on May 25, 1999), incorporated herein by reference to Exhibit 10.3 to A&F's Annual Report on Form 10-K for the fiscal year ended February 1, 2003. (File No. 1-12107) 10.4 Abercrombie & Fitch Co. 2002 Stock Plan for Associates (as amended and restated May 22, 2003), incorporated herein by reference to Exhibit 10.4 to A&F's Quarterly Report on Form 10-Q for the quarterly period ended May 3, 2003. (File No. 1-12107) 39 10.5 Amended and Restated Employment Agreement, dated as of January 30, 2003, by and between A&F and Michael S. Jeffries, including as Exhibit A thereto the Supplemental Executive Retirement Plan (Michael S. Jeffries), effective February 2, 2003, incorporated herein by reference to Exhibit 10.1 to A&F's Current Report on Form 8-K dated February 11, 2003. (File No. 1-12107) 10.6 Abercrombie & Fitch Co. Directors' Deferred Compensation Plan (as amended and restated May 22, 2003), incorporated herein by reference to Exhibit 10.7 to A&F's Quarterly Report on Form 10-Q for the quarterly period ended May 3, 2003. (File No. 1-12107) 10.7 Abercrombie & Fitch Nonqualified Savings and Supplemental Retirement Plan (formerly known as the Abercrombie & Fitch Co. Supplemental Retirement Plan), as amended and restated effective January 1, 2001, incorporated herein by reference to Exhibit 10.9 to A&F's Annual Report on Form 10-K for the fiscal year ended February 1, 2003. (File No. 1-12107) 10.8 Abercrombie & Fitch Co. 2003 Stock Plan for Non-Associate Directors, incorporated herein by reference to Exhibit 10.9 to A&F's Quarterly Report on Form 10-Q for the quarterly period ended May 3, 2003. (File No. 1-12107) 10.9 Retirement Agreement, executed on May 20, 2004, by and between Seth R. Johnson and A&F, incorporated herein by reference to Exhibit 10.9 to A&F's Quarterly Report on Form 10-Q for the quarterly period ended May 1, 2004 (File No. 1-12107) 10.10 Employment Agreement, entered into as of May 17, 2004, by and between A&F and Robert S. Singer, including as Exhibit A thereto the Supplemental Executive Retirement Plan II (Robert S. Singer), effective May 17, 2004, incorporated herein by reference to Exhibit 10.10 to A&F's Quarterly Report on Form 10-Q for the quarterly period ended May 1, 2004 (File No. 1-12107) 10.11 Form of Restricted Shares Award Agreement under the 1998 Restatement of the Abercrombie & Fitch Co. 1996 Stock Option and Performance Incentive Plan prior to November 28, 2004 10.12 Form of Restricted Shares Award Agreement (No Performance-Based Goals) under the 1998 Restatement of the Abercrombie & Fitch Co. 1996 Stock Option and Performance Incentive Plan after November 28, 2004 10.13 Form of Restricted Shares Award Agreement (Performance-Based Goals) under the 1998 Restatement of the Abercrombie & Fitch Co. 1996 Stock Option and Performance Incentive Plan after November 28, 2004 10.14 Form of Stock Option Agreement (Nonstatutory Stock Options) under the 1998 Restatement of the Abercrombie & Fitch Co. 1996 Stock Option and Performance Incentive Plan prior to November 28, 2004 10.15 Form of Stock Option Agreement (Nonstatutory Stock Options) under the 1998 Restatement of the Abercrombie & Fitch Co. 1996 Stock Option and Performance Incentive Plan November 28, 2004 10.16 Form of Stock Option Agreement under the 1998 Restatement of the Abercrombie & Fitch Co. 1996 Stock Plan for Non-Associate Directors 10.17 Form of Restricted Shares Award Agreement under the Abercrombie & Fitch Co. 2002 Stock Plan for Associates prior to November 28, 2004 10.18 Form of Restricted Shares Award Agreement under the Abercrombie & Fitch Co. 2002 Stock Plan for Associates after November 28, 2004 10.19 Form of Stock Option Agreement (Nonstatutory Stock Options) under the Abercrombie & Fitch Co. 2002 Stock Plan for Associates prior to November 28, 2004 10.20 Form of Stock Option Agreement (Nonstatutory Stock Options) under the Abercrombie & Fitch Co. 2002 Stock Plan for Associates after November 28, 2004 10.21 Form of Stock Option Agreement under the Abercrombie & Fitch Co. 2003 Stock Plan for Non-Associate Directors prior to November 28, 2004 10.22 Form of Stock Option Agreement under the Abercrombie & Fitch Co. 2003 Stock Plan for Non-Associate Directors after November 28, 2004 15. Letter re: Unaudited Interim Financial Information to Securities and Exchange Commission re: Inclusion of Report of Independent Registered Public Accounting Firm. 31.1 Rule 13a-14(a)/15d-14(a) Certification (Principal Executive Officer) 31.2 Rule 13a-14(a)/15d-14(a) Certification (Principal Financial Officer) 32 Section 1350 Certifications (Principal Executive Officer and Principal Financial Officer) 40 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. ABERCROMBIE & FITCH CO. Date: December 9, 2004 By /s/ Susan J. Riley ------------------------------------------- Susan J. Riley, Senior Vice President - Chief Financial Officer * Ms. Riley has been duly authorized to sign on behalf of the Registrant as its principal financial officer. 41 EXHIBIT INDEX
Exhibit No. Document - ----------- ------------------------------------------------- 10.11 Form of Restricted Shares Award Agreement under the 1998 Restatement of the Abercrombie & Fitch Co. 1996 Stock Option and Performance Incentive Plan prior to November 28, 2004 10.12 Form of Restricted Shares Award Agreement (No Performance-Based Goals) under the 1998 Restatement of the Abercrombie & Fitch Co. 1996 Stock Option and Performance Incentive Plan after November 28, 2004 10.13 Form of Restricted Shares Award Agreement (Performance-Based Goals) under the 1998 Restatement of the Abercrombie & Fitch Co. 1996 Stock Option and Performance Incentive Plan after November 28, 2004 10.14 Form of Stock Option Agreement (Nonstatutory Stock Options) under the 1998 Restatement of the Abercrombie & Fitch Co. 1996 Stock Option and Performance Incentive Plan prior to November 28, 2004 10.15 Form of Stock Option Agreement (Nonstatutory Stock Options) under the 1998 Restatement of the Abercrombie & Fitch Co. 1996 Stock Option and Performance Incentive Plan November 28, 2004 10.16 Form of Stock Option Agreement under the 1998 Restatement of the Abercrombie & Fitch Co. 1996 Stock Plan for Non-Associate Directors 10.17 Form of Restricted Shares Award Agreement under the Abercrombie & Fitch Co. 2002 Stock Plan for Associates prior to November 28, 2004 10.18 Form of Restricted Shares Award Agreement under the Abercrombie & Fitch Co. 2002 Stock Plan for Associates after November 28, 2004 10.19 Form of Stock Option Agreement (Nonstatutory Stock Options) under the Abercrombie & Fitch Co. 2002 Stock Plan for Associates prior to November 28, 2004 10.20 Form of Stock Option Agreement (Nonstatutory Stock Options) under the Abercrombie & Fitch Co. 2002 Stock Plan for Associates after November 28, 2004 10.21 Form of Stock Option Agreement under the Abercrombie & Fitch Co. 2003 Stock Plan for Non-Associate Directors prior to November 28, 2004 10.22 Form of Stock Option Agreement under the Abercrombie & Fitch Co. 2003 Stock Plan for Non-Associate Directors after November 28, 2004 15 Letter re: Unaudited Interim Financial Information to Securities and Exchange Commission re: Inclusion of Report of Independent Registered Public Accounting Firm 31.1 Rule 13a-14(a)/15d-14(a) Certification (Principal Executive Officer) 31.2 Rule 13a-14(a)/15d-14(a) Certification (Principal Financial Officer) 32 Section 1350 Certifications (Principal Executive Officer and Principal Financial Officer)
42 EX-10.11 2 l10858aexv10w11.txt EXHIBIT 10.11 EXHIBIT 10.11 ABERCROMBIE & FITCH AWARD STOCK UNIT GRANT ACKNOWLEDGEMENT OF RECEIPT This Stock Unit Agreement is entered into by and between Abercrombie & Fitch Co. (the "Company"), and the Associate of the Company whose name appears below (the "Associate") in order to set forth the terms and conditions of grant of stock units, each representing the right to receive one share of Class A Common Stock, $0.01 par value, of the Company (the "Stock Units"), to the Associate under the Abercrombie & Fitch 1996 Stock Option and Performance Incentive Plan (1998 Restatement, as amended) (The "Plan"). ASSOCIATE'S NAME: SOCIAL SECURITY #: # OF STOCK UNITS: DATE OF GRANT: VESTING: Stock Units vest on the anniversary of Date of Grant in accordance with the schedule listed below: Year 1 # 25% Year 2 25% Year 3 25% Year 4 25% Subject to the terms and conditions of the attached Plan, which are incorporated herein by reference, the Company hereby grants to the Associate the Stock Units as outlined above. The Company and the Associate executed this Stock Unit Agreement as of the Date of Grant set forth above. ABERCROMBIE & FITCH ASSOCIATE _____________________________________ ____________________________________ Michael Jeffries, Chairman and Chief Executive Officer EX-10.12 3 l10858aexv10w12.txt EXHIBIT 10.12 EXHIBIT 10.12 RESTRICTED SHARES AWARD AGREEMENT (1998 Restatement of 1996 Stock Option and Performance Incentive Plan -- No Performance-Based Goals) This RESTRICTED SHARES AWARD AGREEMENT (this "AGREEMENT") is made to be effective as of _______________, 200__ (the "GRANT DATE"), by and between Abercrombie & Fitch Co., a Delaware corporation (the "COMPANY"), and ________________________ (the "PARTICIPANT"). WITNESSETH: WHEREAS, pursuant to the provisions of the 1998 Restatement of the 1996 Stock Option and Performance Incentive Plan of the COMPANY (the "PLAN"), the Compensation Committee (the "COMMITTEE") of the Board of Directors of the COMPANY administers the PLAN; and WHEREAS, the COMMITTEE has determined that _____ (____) shares of Class A Common Stock, $0.01 par value, of the COMPANY (the "RESTRICTED SHARES") should be granted to the PARTICIPANT subject to the restrictions, conditions and other terms set forth in this AGREEMENT; NOW, THEREFORE, in consideration of the premises, the parties hereto make the following agreement, intending to be legally bound thereby: 1. Grant of RESTRICTED SHARES. The COMPANY hereby grants to the PARTICIPANT ___________________ (________) RESTRICTED SHARES of the COMPANY (subject to adjustment as provided in Section 3 of this AGREEMENT). Each RESTRICTED SHARE shall represent one issued and outstanding share of Class A Common Stock, $0.01 par value (the "COMMON SHARES"), of the COMPANY, but shall be subject to the restrictions, conditions and other terms set forth in this AGREEMENT. 2. Terms and Conditions of the RESTRICTED SHARES. (A) RESTRICTED PERIOD. Except as provided under Sections 4 and 5 of this AGREEMENT, the period of restriction (the "RESTRICTED PERIOD"), after which the RESTRICTED SHARES shall become vested and no longer be subject to forfeiture to the COMPANY, shall lapse according to the following schedule: (i) the RESTRICTED PERIOD shall lapse as to _____% of the RESTRICTED SHARES (subject to adjustment as provided in Section 3 of this AGREEMENT), and such RESTRICTED SHARES shall become vested, on the ______ anniversary of the GRANT DATE, provided the PARTICIPANT is employed by the COMPANY or a subsidiary of the COMPANY on such date; (ii) the RESTRICTED PERIOD shall lapse as to an additional _____% of the RESTRICTED SHARES (subject to adjustment as provided in Section 3 of this AGREEMENT), and such RESTRICTED SHARES shall become vested, on the ______ anniversary of the GRANT DATE, provided the PARTICIPANT is employed by the COMPANY or a subsidiary of the COMPANY on such date; (iii) the RESTRICTED PERIOD shall lapse as to an additional _____% of the RESTRICTED SHARES (subject to adjustment as provided in Section 3 of this AGREEMENT), and such RESTRICTED SHARES shall become vested, on the ______ anniversary of the GRANT DATE, provided the PARTICIPANT is employed by the COMPANY or a subsidiary of the COMPANY on such date; and (iv) the RESTRICTED PERIOD shall lapse as to an additional _____% of the RESTRICTED SHARES (subject to adjustment as provided in Section 3 of this AGREEMENT), and such RESTRICTED SHARES shall become vested, on the ______ anniversary of the GRANT DATE, provided the PARTICIPANT is employed by the COMPANY or a subsidiary of the COMPANY on such date. (B) Restrictions on Transfer. The RESTRICTED SHARES may not be sold, transferred, assigned, pledged or otherwise encumbered or disposed of until the applicable RESTRICTED PERIOD has lapsed and the RESTRICTED SHARES have become vested. Any stock certificate issued in respect of the RESTRICTED SHARES shall bear an appropriate legend evidencing the restrictions on transfer contemplated by this AGREEMENT and prohibiting the transfer thereof except in accordance with the terms of this AGREEMENT. (C) Lapse of RESTRICTED PERIOD. Upon the lapse of the RESTRICTED PERIOD applicable to the RESTRICTED SHARES, the COMPANY shall deliver a stock certificate for or other appropriate documentation evidencing the number of COMMON SHARES of the COMPANY with respect to which restrictions have lapsed, free of all such restrictions, to the PARTICIPANT. (D) Tax Withholding. The COMPANY shall have the right to require the PARTICIPANT to remit to the COMPANY an amount sufficient to satisfy any applicable federal, state and local tax withholding requirements in respect of the vesting of the RESTRICTED SHARES. These tax withholding requirements may be satisfied in one of several ways, including: (i) The PARTICIPANT may give the COMPANY cash equal to the amount required to be withheld or tender COMMON SHARES of the COMPANY already owned by the PARTICIPANT for at least six months by actual delivery of the already-owned COMMON SHARES and having a fair market value (based on the closing sale price of the COMMON SHARES as reported on the New York Stock Exchange or, if the COMMON SHARES are not traded on the New York Stock Exchange, "fair market value" as defined in the PLAN) on the exercise date equal to the amount required to be withheld; or (ii) The COMPANY may withhold COMMON SHARES otherwise deliverable upon vesting of the RESTRICTED SHARES having a fair market value (based on the closing sale price of the COMMON SHARES as reported on the New York Stock Exchange or, if the COMMON SHARES are not traded on the New York Stock Exchange, "fair market value" as defined in the PLAN) on the exercise date equal to the amount required to be withheld (but only to -2- the extent of the minimum amount that must be withheld to comply with applicable state, federal and local income, employment and wage tax laws). (E) Rights as Holder of RESTRICTED SHARES. The PARTICIPANT shall not have the right to vote the RESTRICTED SHARES (or the underlying COMMON SHARES) or the right to receive any dividends with respect to the RESTRICTED SHARES (or the underlying COMMON SHARES) until the applicable RESTRICTED PERIOD has lapsed and the RESTRICTED SHARES have vested. 3. Adjustments and Changes in the COMMON SHARES. (A) If there is a change in the outstanding COMMON SHARES of the COMPANY by reason of a stock dividend, extraordinary cash dividend, split-up, recapitalization, merger, consolidation, combination or exchange of shares, separation, reorganization, liquidation or other similar corporate change, the COMMITTEE shall appropriately adjust the number of RESTRICTED SHARES subject to this AGREEMENT and any other limits or terms of the RESTRICTED SHARES as may be necessary to reflect such event. Fractional RESTRICTED SHARES resulting from any adjustment in the RESTRICTED SHARES pursuant to this Section 3(A) shall be rounded down to the nearest whole number of RESTRICTED SHARES. (B) Notice of any adjustment pursuant to this Section 3 shall be given by the COMPANY to the PARTICIPANT. 4. Acceleration of Vesting of RESTRICTED SHARES. Upon the occurrence of a "Change of Control" (as such term is defined in the PLAN), the RESTRICTED PERIOD applicable to the RESTRICTED SHARES shall immediately lapse and the RESTRICTED SHARES shall become fully vested. 5. Effect of Termination of Employment. (A) The grant of the RESTRICTED SHARES shall not confer upon the PARTICIPANT any right to continue in the employment of the COMPANY or any of its subsidiaries or interfere with or limit in any way the right of the COMPANY or any of its subsidiaries to modify the terms of or terminate the employment of the PARTICIPANT at any time in accordance with applicable law and the COMPANY's or the subsidiary's governing corporate documents. (B) Except as the COMMITTEE may at any time provide, and subject to Section 5(E) below, if the employment of the PARTICIPANT with the COMPANY and its subsidiaries is terminated for any reason other than death or total disability prior to the lapsing of the RESTRICTED PERIOD applicable to the RESTRICTED SHARES, the RESTRICTED SHARES shall be forfeited to the COMPANY. (C) If the PARTICIPANT becomes "totally disabled" as defined in the PLAN, the RESTRICTED PERIOD applicable to the RESTRICTED SHARES shall immediately lapse and the RESTRICTED SHARES shall become fully vested. -3- (D) If the PARTICIPANT dies while employed by the COMPANY or one of its subsidiaries, the RESTRICTED PERIOD applicable to the RESTRICTED SHARES shall immediately lapse and the RESTRICTED SHARES shall become fully vested. (E) Upon the retirement of the PARTICIPANT, the COMMITTEE may, but shall not be required to, shorten or terminate the RESTRICTED PERIOD applicable to the RESTRICTED SHARES. 6. PLAN as Controlling. All terms and conditions of the PLAN applicable to the RESTRICTED SHARES which are not set forth in this AGREEMENT shall be deemed incorporated herein by reference. In the event that any term or condition of this AGREEMENT is inconsistent with the terms and conditions of the PLAN, the PLAN shall be deemed controlling. The PARTICIPANT acknowledges receipt of a copy of the PLAN and of the Prospectus related to the PLAN. 7. Governing Law. To the extent not preempted by federal law, this AGREEMENT shall be governed by and construed in accordance with the laws of the State of Delaware. 8. Rights and Remedies Cumulative. All rights and remedies of the COMPANY and of the PARTICIPANT enumerated in this AGREEMENT shall be cumulative and, except as expressly provided otherwise in this AGREEMENT, none shall exclude any other rights or remedies allowed by law or in equity, and each of said rights or remedies may be exercised and enforced concurrently. 9. Captions. The captions contained in this AGREEMENT are included only for convenience of reference and do not define, limit, explain or modify this AGREEMENT or its interpretation, construction or meaning and are in no way to be construed as a part of this AGREEMENT. 10. Severability. If any provision of this AGREEMENT or the application of any provision hereof to any person or any circumstance shall be determined to be invalid or unenforceable, then such determination shall not affect any other provision of this AGREEMENT or the application of said provision to any other person or circumstance, all of which other provisions shall remain in full force and effect, and it is the intention of each party to this AGREEMENT that if any provision of this AGREEMENT is susceptible of two or more constructions, one of which would render the provision enforceable and the other or others of which would render the provision unenforceable, then the provision shall have the meaning which renders it enforceable. 11. Number and Gender. When used in this AGREEMENT, the number and gender of each pronoun shall be construed to be such number and gender as the context, circumstances or its antecedent may required. 12. Entire Agreement. This AGREEMENT, including the PLAN incorporated herein by reference, constitutes the entire agreement between the COMPANY and the PARTICIPANT in respect of the subject matter of this AGREEMENT, and this AGREEMENT supersedes all prior and contemporaneous agreements between the parties hereto in connection with the subject matter of this AGREEMENT. No officer, employee or other servant or agent of the COMPANY, and no -4- servant or agent of the PARTICIPANT, is authorized to make any representation, warranty or other promise not contained in this AGREEMENT. No change, termination or attempted waiver of any of the provisions of this AGREEMENT shall be binding upon either party hereto unless contained in a writing signed by the party to be charged. 13. Successors of the COMPANY. The obligations of the COMPANY under this AGREEMENT shall be binding upon any successor corporation or organization resulting from the merger, consolidation or other reorganization of the COMPANY, or upon any successor corporation or organization succeeding to substantially all of the assets and businesses of the COMPANY. In the event of any of the foregoing, the COMMITTEE may, at its discretion prior to the consummation of the transaction, cancel, offer to purchase, exchange, adjust or modify the RESTRICTED SHARES, at such time and in such manner as the COMMITTEE deems appropriate and in accordance with applicable laws, rules and regulations. IN WITNESS WHEREOF, the COMPANY has caused this AGREEMENT to be executed by its duly authorized officer, and the PARTICIPANT has executed this AGREEMENT, in each case effective as of the GRANT DATE. COMPANY: ABERCROMBIE & FITCH CO. By: _____________________________________________ Its: ____________________________________________ Title: __________________________________________ PARTICIPANT: __________________________________________________ Printed Name: ____________________________________ Address: __________________________________________________ __________________________________________________ __________________________________________________ Social Security Number: __________________________ -5- EX-10.13 4 l10858aexv10w13.txt EXHIBIT 10.13 EXHIBIT 10.13 RESTRICTED SHARES AWARD AGREEMENT (1998 Restatement of 1996 Stock Option and Performance Incentive Plan -- Performance-Based Goals) This RESTRICTED SHARES AWARD AGREEMENT (this "AGREEMENT") is made to be effective as of _______________, 200__ (the "EFFECTIVE DATE"), by and between Abercrombie & Fitch Co., a Delaware corporation (the "COMPANY"), and ________________________ (the "PARTICIPANT"). WITNESSETH: WHEREAS, pursuant to the provisions of the 1998 Restatement of the 1996 Stock Option and Performance Incentive Plan of the COMPANY (the "PLAN"), the Compensation Committee (the "COMMITTEE") of the Board of Directors of the COMPANY administers the PLAN; and WHEREAS, the COMMITTEE has determined that shares of Class A Common Stock, $0.01 par value, of the COMPANY (the "RESTRICTED SHARES") should be granted to the PARTICIPANT subject to the restrictions, conditions and other terms set forth in this AGREEMENT; NOW, THEREFORE, in consideration of the premises, the parties hereto make the following agreement, intending to be legally bound thereby: 1. Opportunity to Earn RESTRICTED SHARES. (A) The PARTICIPANT shall have the opportunity to earn RESTRICTED SHARES of the COMPANY based upon the achievement of the performance-based financial goals specified on Annex 1 to this AGREEMENT (the "PERFORMANCE-BASED GOALS") in respect of the fiscal year of the COMPANY ending ___________, 200__ (the "200__ FISCAL YEAR"). The PARTICIPANT shall have the opportunity to earn from zero to double the targeted number of __________ RESTRICTED SHARES (subject to adjustment as provided in Section 3 of this AGREEMENT) based upon the extent to which the PERFORMANCE-BASED GOALS are met or exceeded. (B) Within _______ (___) days following the end of the 200__ FISCAL YEAR (the "CERTIFICATION DATE"), the COMPENSATION COMMITTEE shall certify the extent to which the PERFORMANCE-BASED GOALS have been met or exceeded and notify the PARTICIPANT of the number of RESTRICTED SHARES which have been earned in respect of the 200__ FISCAL YEAR (the "EARNED RESTRICTED SHARES"). Each RESTRICTED SHARE earned shall represent one issued and outstanding share of Class A Common Stock, $0.01 par value (the "COMMON SHARES"), of the COMPANY, and shall be subject to the restrictions, conditions and other terms set forth in this AGREEMENT. 2. Terms and Conditions of the RESTRICTED SHARES. (A) RESTRICTED PERIOD. Except as provided under Sections 4 and 5 of this AGREEMENT, the period of restriction (the "RESTRICTED PERIOD"), after which the EARNED RESTRICTED SHARES shall become vested and no longer be subject to forfeiture to the COMPANY, shall lapse according to the following schedule: (i) the RESTRICTED PERIOD shall lapse as to _____% of the EARNED RESTRICTED SHARES (subject to adjustment as provided in Section 3 of this AGREEMENT), and such EARNED RESTRICTED SHARES shall become vested, on the ______ anniversary of the CERTIFICATION DATE, provided the PARTICIPANT is employed by the COMPANY or a subsidiary of the COMPANY on such date; (ii) the RESTRICTED PERIOD shall lapse as to an additional _____% of the EARNED RESTRICTED SHARES (subject to adjustment as provided in Section 3 of this AGREEMENT), and such EARNED RESTRICTED SHARES shall become vested, on the _______ anniversary of the CERTIFICATION DATE, provided the PARTICIPANT is employed by the COMPANY or a subsidiary of the COMPANY on such date; (iii) the RESTRICTED PERIOD shall lapse as to an additional _____% of the EARNED RESTRICTED SHARES (subject to adjustment as provided in Section 3 of this AGREEMENT), and such EARNED RESTRICTED SHARES shall become vested, on the ______ anniversary of the CERTIFICATION DATE, provided the PARTICIPANT is employed by the COMPANY or a subsidiary of the COMPANY on such date; and (iv) the RESTRICTED PERIOD shall lapse as to an additional _____% of the EARNED RESTRICTED SHARES (subject to adjustment as provided in Section 3 of this AGREEMENT), and such EARNED RESTRICTED SHARES shall become vested, on the _______ anniversary of the CERTIFICATION DATE, provided the PARTICIPANT is employed by the COMPANY or a subsidiary of the COMPANY on such date. (B) Restrictions on Transfer. The EARNED RESTRICTED SHARES may not be sold, transferred, assigned, pledged or otherwise encumbered or disposed of until the applicable RESTRICTED PERIOD has lapsed and the EARNED RESTRICTED SHARES have become vested. Any stock certificate issued in respect of the EARNED RESTRICTED SHARES shall bear an appropriate legend evidencing the restrictions on transfer contemplated by this AGREEMENT and prohibiting the transfer thereof except in accordance with the terms of this AGREEMENT. (C) Lapse of RESTRICTED PERIOD. Upon the lapse of the RESTRICTED PERIOD applicable to the EARNED RESTRICTED SHARES, the COMPANY shall deliver a stock certificate for or other appropriate documentation evidencing the number of COMMON SHARES of the COMPANY with respect to which restrictions have lapsed, free of all such restrictions, to the PARTICIPANT. (D) Tax Withholding. The COMPANY shall have the right to require the PARTICIPANT to remit to the COMPANY an amount sufficient to satisfy any applicable federal, state and local tax withholding requirements in respect of the vesting of the EARNED RESTRICTED SHARES. These tax withholding requirements may be satisfied in one of several ways, including: -2- (i) The PARTICIPANT may give the COMPANY cash equal to the amount required to be withheld or tender COMMON SHARES of the COMPANY already owned by the PARTICIPANT for at least six months by actual delivery of the already-owned COMMON SHARES and having a fair market value (based on the closing sale price of the COMMON SHARES as reported on the New York Stock Exchange or, if the COMMON SHARES are not traded on the New York Stock Exchange, "fair market value" as defined in the PLAN) on the exercise date equal to the amount required to be withheld; or (ii) The COMPANY may withhold COMMON SHARES otherwise deliverable upon vesting of the EARNED RESTRICTED SHARES having a fair market value (based on the closing sale price of the COMMON SHARES as reported on the New York Stock Exchange or, if the COMMON SHARES are not traded on the New York Stock Exchange, "fair market value" as defined in the PLAN) on the exercise date equal to the amount required to be withheld (but only to the extent of the minimum amount that must be withheld to comply with applicable state, federal and local income, employment and wage tax laws). (E) Rights as Holder of EARNED RESTRICTED SHARES. The PARTICIPANT shall not have the right to vote the EARNED RESTRICTED SHARES (or the underlying COMMON SHARES) or the right to receive any dividends with respect to the EARNED RESTRICTED SHARES (or the underlying COMMON SHARES) until the applicable RESTRICTED PERIOD has lapsed and the EARNED RESTRICTED SHARES have vested. 3. Adjustments and Changes in the COMMON SHARES. (A) If there is a change in the outstanding COMMON SHARES of the COMPANY by reason of a stock dividend, extraordinary cash dividend, split-up, recapitalization, merger, consolidation, combination or exchange of shares, separation, reorganization, liquidation or other similar corporate change, the COMMITTEE shall appropriately adjust the number of RESTRICTED SHARES which may be earned subject to this AGREEMENT and any other limits or terms of such RESTRICTED SHARES as may be necessary to reflect such event. Fractional RESTRICTED SHARES resulting from any adjustment pursuant to this Section 3(A) shall be rounded down to the nearest whole number of RESTRICTED SHARES. (B) Notice of any adjustment pursuant to this Section 3 shall be given by the COMPANY to the PARTICIPANT. 4. Acceleration of Vesting Upon Change of Control of the COMPANY. Upon the occurrence of a "Change of Control" (as such term is defined in the PLAN), the RESTRICTED PERIOD applicable to the EARNED RESTRICTED SHARES shall immediately lapse and the EARNED RESTRICTED SHARES shall become fully vested. The COMMITTEE shall have no discretion to shorten or terminate the period over which it will be determined if the PERFORMANCE-BASED GOALS in respect of the 200__ FISCAL YEAR have been met or exceeded. 5. Effect of Termination of Employment. (A) The opportunity to earn RESTRICTED SHARES as contemplated by this AGREEMENT shall not confer upon the PARTICIPANT any right to continue in the employment -3- of the COMPANY or any of its subsidiaries or interfere with or limit in any way the right of the COMPANY or any of its subsidiaries to modify the terms of or terminate the employment of the PARTICIPANT at any time in accordance with applicable law and the COMPANY's or the subsidiary's governing corporate documents. (B) If the employment of the PARTICIPANT with the COMPANY and its subsidiaries is terminated for any reason other than death or total disability prior to the lapsing of the RESTRICTED PERIOD applicable to the EARNED RESTRICTED SHARES, the EARNED RESTRICTED SHARES shall be forfeited to the COMPANY. The COMMITTEE shall have no discretion to shorten or terminate the period over which it will be determined if the PERFORMANCE-BASED GOALS in respect of the 200__ FISCAL YEAR have been met or exceeded. (C) If the PARTICIPANT becomes "totally disabled" as defined in the PLAN, the RESTRICTED PERIOD applicable to the EARNED RESTRICTED SHARES shall immediately lapse and the EARNED RESTRICTED SHARES shall become fully vested. The COMMITTEE shall have no discretion to shorten or terminate the period over which it will be determined if the PERFORMANCE-BASED GOALS in respect of the 200__ FISCAL YEAR have been met or exceeded. (D) If the PARTICIPANT dies while employed by the COMPANY or one of its subsidiaries, the RESTRICTED PERIOD applicable to the EARNED RESTRICTED SHARES shall immediately lapse and the EARNED RESTRICTED SHARES shall become fully vested. The COMMITTEE shall have no discretion to shorten or terminate the period over which it will be determined if the PERFORMANCE-BASED GOALS in respect of the 200__ FISCAL YEAR have been met or exceeded. 6. PLAN as Controlling. All terms and conditions of the PLAN applicable to the RESTRICTED SHARES which may be earned as contemplated by this AGREEMENT, which are not set forth in this AGREEMENT, shall be deemed incorporated herein by reference. In the event that any term or condition of this AGREEMENT is inconsistent with the terms and conditions of the PLAN, the PLAN shall be deemed controlling. The PARTICIPANT acknowledges receipt of a copy of the PLAN and of the Prospectus related to the PLAN. 7. Governing Law. To the extent not preempted by federal law, this AGREEMENT shall be governed by and construed in accordance with the laws of the State of Delaware. 8. Rights and Remedies Cumulative. All rights and remedies of the COMPANY and of the PARTICIPANT enumerated in this AGREEMENT shall be cumulative and, except as expressly provided otherwise in this AGREEMENT, none shall exclude any other rights or remedies allowed by law or in equity, and each of said rights or remedies may be exercised and enforced concurrently. 9. Captions. The captions contained in this AGREEMENT are included only for convenience of reference and do not define, limit, explain or modify this AGREEMENT or its interpretation, construction or meaning and are in no way to be construed as a part of this AGREEMENT. -4- 10. Severability. If any provision of this AGREEMENT or the application of any provision hereof to any person or any circumstance shall be determined to be invalid or unenforceable, then such determination shall not affect any other provision of this AGREEMENT or the application of said provision to any other person or circumstance, all of which other provisions shall remain in full force and effect, and it is the intention of each party to this AGREEMENT that if any provision of this AGREEMENT is susceptible of two or more constructions, one of which would render the provision enforceable and the other or others of which would render the provision unenforceable, then the provision shall have the meaning which renders it enforceable. 11. Number and Gender. When used in this AGREEMENT, the number and gender of each pronoun shall be construed to be such number and gender as the context, circumstances or its antecedent may required. 12. Entire Agreement. This AGREEMENT, including the PLAN incorporated herein by reference, constitutes the entire agreement between the COMPANY and the PARTICIPANT in respect of the subject matter of this AGREEMENT, and this AGREEMENT supersedes all prior and contemporaneous agreements between the parties hereto in connection with the subject matter of this AGREEMENT. No officer, employee or other servant or agent of the COMPANY, and no servant or agent of the PARTICIPANT, is authorized to make any representation, warranty or other promise not contained in this AGREEMENT. No change, termination or attempted waiver of any of the provisions of this AGREEMENT shall be binding upon either party hereto unless contained in a writing signed by the party to be charged. 13. Successors of the COMPANY. The obligations of the COMPANY under this AGREEMENT shall be binding upon any successor corporation or organization resulting from the merger, consolidation or other reorganization of the COMPANY, or upon any successor corporation or organization succeeding to substantially all of the assets and businesses of the COMPANY. In the event of any of the foregoing, the COMMITTEE may, at its discretion prior to the consummation of the transaction, cancel, offer to purchase, exchange, adjust or modify the EARNED RESTRICTED SHARES, at such time and in such manner as the COMMITTEE deems appropriate and in accordance with applicable laws, rules and regulations. [Remainder of page intentionally left blank; signatures on following page.] -5- IN WITNESS WHEREOF, the COMPANY has caused this AGREEMENT to be executed by its duly authorized officer, and the PARTICIPANT has executed this AGREEMENT, in each case effective as of the GRANT DATE. COMPANY: ABERCROMBIE & FITCH CO. By: _____________________________ Its: ____________________________ Title: __________________________ PARTICIPANT: _________________________________ Printed Name: ___________________ Address: _________________________________ _________________________________ _________________________________ Social Security Number: _________ -6- Annex 1 Performance-Based Financial Goals For Fiscal Year Ending __________, 200__ EX-10.14 5 l10858aexv10w14.txt EXHIBIT 10.14 EXHIBIT 10.14 ABERCROMBIE & FITCH STOCK AWARD STOCK OPTION AGREEMENT ACKNOWLEDGEMENT OF RECEIPT This Stock Option Agreement is entered into by and between Abercrombie & Fitch (the "Company"), and the associate of the Company whose name appears below (the "Associate") in order to set forth the terms and conditions of Options granted to the Associate under The Abercrombie & Fitch 1996 Stock Option and Performance Incentive Plan (1998 Restatement, as amended) (The "Plan"). ASSOCIATE'S NAME: SOCIAL SECURITY #: ADDRESS: # OPTIONS: DATE OF GRANT: GRANT PRICE: OPTION TYPE: VESTING: Shares vest over four years 25% / 25% / 25% / 25% Subject to the attached Terms and Conditions and the terms of the Plan, which are incorporated herein by reference, the Company hereby grants to the Associate Options to purchase shares of Common Stock of the Company, as outlined above. The Company and the Associate have executed this Agreement as of the Date of Grant set forth above. ABERCROMBIE & FITCH ASSOCIATE ____________________________________ ____________________________________ Michael Jeffries, Chairman and Chief Executive Officer EX-10.15 6 l10858aexv10w15.txt EXHIBIT 10.15 EXHIBIT 10.15 STOCK OPTION AGREEMENT (Nonstatutory Stock Option - 1998 Restatement of 1996 Stock Option and Performance Incentive Plan) This STOCK OPTION AGREEMENT (this "AGREEMENT") is made to be effective as of ___________, 200__ (the "GRANT DATE"), by and between Abercrombie & Fitch Co., a Delaware corporation (the "COMPANY"), and ___________________ (the "OPTIONEE"). WITNESSETH: WHEREAS, pursuant to the provisions of the 1998 Restatement of the 1996 Stock Option and Performance Incentive Plan of the COMPANY (the "PLAN"), the Compensation Committee (the "COMMITTEE") of the Board of Directors of the COMPANY administers the PLAN; and WHEREAS, the COMMITTEE has determined that an option to purchase___(____) shares of Class A Common Stock, $0.01 par value (the "SHARES"), of the COMPANY should be granted to the OPTIONEE upon the terms and conditions set forth in this AGREEMENT; NOW, THEREFORE, in consideration of the premises, the parties hereto make the following agreement, intending to be legally bound thereby: 1. Grant of OPTION. The COMPANY hereby grants to the OPTIONEE an option (the "OPTION") to purchase ______________ (______) SHARES of the COMPANY (subject to adjustment as provided in Section 3 of this AGREEMENT). The OPTION is not intended to qualify as an incentive stock option under Section 422 of the Internal Revenue Code of 1986, as amended (the "CODE"). 2. Terms and Conditions of the OPTION. (A) OPTION Price. The purchase price (the "OPTION PRICE") to be paid by the OPTIONEE to the COMPANY upon the exercise of the OPTION shall be $_____ per share, which is the per share closing price of the SHARES of the COMPANY as reported on the New York Stock Exchange on the GRANT DATE, subject to adjustment as provided in Section 3 of this AGREEMENT. (B) Exercise of the OPTION. Except as provided under Sections 4 and 6 of this AGREEMENT, the OPTION may not be exercised until the first anniversary of the GRANT DATE, provided that the OPTIONEE is employed by the COMPANY or a subsidiary of the COMPANY on such date. Thereafter, except as otherwise provided in this AGREEMENT, the OPTION may be exercised as follows: (i) at any time after the first anniversary of the GRANT DATE, as to ______% of the SHARES subject to the OPTION (subject to adjustment as provided in Section 3 of this AGREEMENT), provided that the OPTIONEE is employed by the COMPANY or a subsidiary of the COMPANY on such date; (ii) at any time after the second anniversary of the GRANT DATE, as to an additional _____% of the SHARES subject to the OPTION (subject to adjustment as provided in Section 3 of this AGREEMENT), provided that the OPTIONEE is employed by the COMPANY or a subsidiary of the COMPANY on such date; (iii) at any time after the third anniversary of the GRANT DATE, as to an additional _____% of the SHARES subject to the OPTION (subject to adjustment as provided in Section 3 of this AGREEMENT), provided that the OPTIONEE is employed by the COMPANY or a subsidiary of the COMPANY on such date; and (iv) at any time after the fourth anniversary of the GRANT DATE, as to an additional _____% of the SHARES subject to the OPTION (subject to adjustment as provided in Section 3 of this AGREEMENT), provided that the OPTIONEE is employed by the COMPANY or a subsidiary of the COMPANY on such date. Subject to the other provisions of this AGREEMENT, if the OPTION becomes vested and exercisable as to certain SHARES, it shall remain exercisable as to those SHARES until the date of expiration of the OPTION term. The COMMITTEE may, but shall not be required to (unless otherwise provided in this AGREEMENT), accelerate the vesting and exercisability of the OPTION. The grant of the OPTION shall not confer upon the OPTIONEE any right to continue in the employment of the COMPANY or any of its subsidiaries or interfere with or limit in any way the right of the COMPANY or any of its subsidiaries to modify the terms of or terminate the employment of the OPTIONEE at any time in accordance with applicable law and the COMPANY's or the subsidiary's governing corporate documents. (C) OPTION Term. The OPTION shall in no event be exercisable after the expiration of ten years from the GRANT DATE. (D) Method of Exercise. The OPTION may be exercised by giving written notice of exercise to the COMMITTEE, in care of the Human Resources Department of the COMPANY, stating the number of SHARES subject to the OPTION in respect of which the OPTION is being exercised. Payment for all such SHARES shall be made to the COMPANY at the time the OPTION is exercised in United States dollars in cash (including certified check). Payment for such SHARES may also be made (i) by tender of SHARES of the COMPANY already owned by the OPTIONEE for at least six months (either by actual delivery of the already-owned SHARES or by attestation) and having a fair market value (based on the closing sale price of the SHARES as reported on the New York Stock Exchange or, if the SHARES are not traded on the New York Stock Exchange, "fair market value" as defined in the PLAN) on the date of tender equal to the OPTION PRICE or (ii) by a combination of the delivery of cash and the tender of already-owned SHARES. After payment in full for the SHARES purchased under the OPTION has been made, the COMPANY shall take all such actions as are necessary to deliver an appropriate certificate or other evidence of ownership representing the SHARES purchased upon the exercise of the OPTION as promptly thereafter as is reasonably practicable. -2- (E) Tax Withholding. The COMPANY shall have the right to require the OPTIONEE to remit to the COMPANY an amount sufficient to satisfy any applicable federal, state and local tax withholding requirements in respect of the exercise of the OPTION. These tax withholding requirements may be satisfied in one of several ways, including: (i) The OPTIONEE may give the COMPANY cash equal to the amount required to be withheld or tender SHARES of the COMPANY already owned by the OPTIONEE for at least six months by actual delivery of the already-owned SHARES and having a fair market value (based on the closing sale price of the SHARES as reported on the New York Stock Exchange or, if the SHARES are not traded on the New York Stock Exchange, "fair market value" as defined in the PLAN) on the exercise date equal to the amount required to be withheld; or (ii) The COMPANY may withhold SHARES otherwise issuable upon exercise of the OPTION having a fair market value (based on the closing sale price of the SHARES as reported on the New York Stock Exchange or, if the SHARES are not traded on the New York Stock Exchange, "fair market value" as defined in the PLAN) on the exercise date equal to the amount required to be withheld (but only to the extent of the minimum amount that must be withheld to comply with applicable state, federal and local income, employment and wage tax laws). 3. Adjustments and Changes in the SHARES. (A) If there is a change in the outstanding SHARES of the COMPANY by reason of a stock dividend, extraordinary cash dividend, split-up, recapitalization, merger, consolidation, combination or exchange of shares, separation, reorganization, liquidation or other similar corporate change, the COMMITTEE shall appropriately adjust the number of SHARES subject to the OPTION as well as the OPTION PRICE and any other limitations or terms of the OPTION as may be necessary to reflect such event. Fractional SHARES resulting from any adjustment in the OPTION pursuant to this Section 3(A) shall be rounded down to the nearest whole number of SHARES. (B) Notice of any adjustment pursuant to this Section 3 shall be given by the COMPANY to the OPTIONEE. 4. Acceleration of OPTION. Upon the occurrence of a "Change of Control" (as such term is defined in the PLAN), the unexercised portion of the OPTION (whether or not then exercisable by its terms) shall become immediately vested and exercisable in full. 5. Non-Transferability of OPTION. The OPTION may not be transferred, assigned, pledged or hypothecated (whether by operation or law or otherwise) by the OPTIONEE, except as provided by will or by the applicable laws of descent and distribution, and the OPTION shall not be subject to execution, attachment or similar process. 6. Exercise After Termination of Employment. (A) Except as the COMMITTEE may at any time provide, if the employment of the OPTIONEE with the COMPANY and its subsidiaries is terminated for any reason other than death or total disability, the OPTION may be exercised (to the extent that the OPTIONEE was -3- entitled to do so on the date of the termination of the OPTIONEE's employment) at any time within three months after such termination of employment, subject to the provisions of Section 2(C) of this AGREEMENT. (B) If the OPTIONEE becomes "totally disabled" as defined in the PLAN, the OPTION shall become immediately vested and exercisable in full, and the OPTION may be exercised at any time during the first nine months that the OPTIONEE receives benefits under the Abercrombie & Fitch Co. Long-Term Disability Program, or any successor program, subject to the provisions of Section 2(C) of this AGREEMENT. (C) If the OPTIONEE dies while employed by the COMPANY or one of its subsidiaries or within three months after the termination of such employment, the OPTION shall become immediately vested and exercisable in full by the OPTIONEE's estate or by the person who acquires the right to exercise the OPTION upon the OPTIONEE's death by bequest or inheritance. The OPTION may be exercised at any time within one year after the date of the OPTIONEE's death, or such other period as the COMMITTEE may at any time provide, subject to the provisions of Section 2(C) of this AGREEMENT. 7. Restrictions on Transfers of SHARES. Anything contained in this Agreement or elsewhere to the contrary notwithstanding, the COMPANY may postpone the issuance and delivery of SHARES upon any exercise of the OPTION until completion of any stock exchange listing or registration or other qualification of such SHARES under any state or federal law, rule or regulation as the COMPANY may consider appropriate; and may require the OPTIONEE when exercising the OPTION to make such representations and furnish such information as the COMPANY may consider appropriate in connection with the issuance of the SHARES in compliance with applicable laws, rules and regulations. SHARES issued and delivered upon exercise of the OPTION shall be subject to such restrictions on trading, including appropriate legending of certificates to that effect, as the COMPANY, in its discretion, shall determine are necessary to satisfy applicable laws, rules and regulations. 8. Rights of the OPTIONEE as a Stockholder. The OPTIONEE shall have no rights as a stockholder of the COMPANY with respect to any SHARES of the COMPANY covered by the OPTION until the date of issuance to the OPTIONEE of a certificate or other evidence of ownership representing such SHARES. 9. PLAN as Controlling. All terms and conditions of the PLAN applicable to the OPTION which are not set forth in this AGREEMENT shall be deemed incorporated herein by reference. In the event that any term or condition of this AGREEMENT is inconsistent with the terms and conditions of the PLAN, the PLAN shall be deemed controlling. The OPTIONEE acknowledges receipt of a copy of the PLAN and of the Prospectus related to the PLAN. 10. Governing Law. To the extent not preempted by federal law, this AGREEMENT shall be governed by and construed in accordance with the laws of the State of Delaware. 11. Rights and Remedies Cumulative. All rights and remedies of the COMPANY and of the OPTIONEE enumerated in this AGREEMENT shall be cumulative and, except as expressly -4- provided otherwise in this AGREEMENT, none shall exclude any other rights or remedies allowed by law or in equity, and each of said rights or remedies may be exercised and enforced concurrently. 12. Captions. The captions contained in this AGREEMENT are included only for convenience of reference and do not define, limit, explain or modify this AGREEMENT or its interpretation, construction or meaning and are in no way to be construed as a part of this AGREEMENT. 13. Severability. If any provision of this AGREEMENT or the application of any provision hereof to any person or any circumstance shall be determined to be invalid or unenforceable, then such determination shall not affect any other provision of this AGREEMENT or the application of said provision to any other person or circumstance, all of which other provisions shall remain in full force and effect, and it is the intention of each party to this AGREEMENT that if any provision of this AGREEMENT is susceptible of two or more constructions, one of which would render the provision enforceable and the other or others of which would render the provision unenforceable, then the provision shall have the meaning which renders it enforceable. 14. Number and Gender. When used in this AGREEMENT, the number and gender of each pronoun shall be construed to be such number and gender as the context, circumstances or its antecedent may required. 15. Entire Agreement. This AGREEMENT, including the PLAN incorporated herein by reference, constitutes the entire agreement between the COMPANY and the OPTIONEE in respect of the subject matter of this AGREEMENT, and this AGREEMENT supersedes all prior and contemporaneous agreements between the parties hereto in connection with the subject matter of this AGREEMENT. No officer, employee or other servant or agent of the COMPANY, and no servant or agent of the OPTIONEE, is authorized to make any representation, warranty or other promise not contained in this AGREEMENT. No change, termination or attempted waiver of any of the provisions of this AGREEMENT shall be binding upon either party hereto unless contained in a writing signed by the party to be charged. 16. Successors of the COMPANY. The obligations of the COMPANY under this AGREEMENT shall be binding upon any successor corporation or organization resulting from the merger, consolidation or other reorganization of the COMPANY, or upon any successor corporation or organization succeeding to substantially all of the assets and businesses of the COMPANY. In the event of any of the foregoing, the COMMITTEE may, at its discretion prior to the consummation of the transaction, cancel, offer to purchase, exchange, adjust or modify the OPTION, at such time and in such manner as the COMMITTEE deems appropriate and in accordance with applicable laws, rules and regulations. -5- IN WITNESS WHEREOF, the COMPANY has caused this AGREEMENT to be executed by its duly authorized officer, and the OPTIONEE has executed this AGREEMENT, in each case effective as of the GRANT DATE. COMPANY: ABERCROMBIE & FITCH CO. By: _________________________________________ Its: ________________________________________ Title: ______________________________________ OPTIONEE: _____________________________________________ Printed Name: _______________________________ Address: _____________________________________________ _____________________________________________ _____________________________________________ Social Security Number: _____________________ -6- EX-10.16 7 l10858aexv10w16.txt EXHIBIT 10.16 EXHIBIT 10.16 ABERCROMBIE & FITCH STOCK AWARD STOCK OPTION AGREEMENT ACKNOWLEDGEMENT OF RECEIPT This Stock Option Agreement is entered into by and between Abercrombie & Fitch (the "Company"), and the Director of the Company whose name appears below (the "Director") in order to set forth the terms and conditions of Options granted to the Director under The Abercrombie & Fitch 1996 Stock Plan for Non-Associate Directors (1998 Restatement, as amended) (The "Plan"). DIRECTOR'S NAME: SOCIAL SECURITY #: ADDRESS: # OPTIONS: DATE OF GRANT: GRANT PRICE: OPTION TYPE: NON-QUALIFIED VESTING: Shares vest over four years 25% / 25% / 25% / 25% Subject to the attached Terms and Conditions and the terms of the Plan, which are incorporated herein by reference, the Company hereby grants to the Director Options to purchase shares of Common Stock of the Company, as outlined above. The Company and the Director have executed this Agreement as of the Date of Grant set forth above. ABERCROMBIE & FITCH DIRECTOR _____________________________________ _____________________________________ Michael Jeffries, Chairman and Chief Executive Officer EX-10.17 8 l10858aexv10w17.txt EXHIBIT 10.17 EXHIBIT 10.17 ABERCROMBIE & FITCH CO. AWARD STOCK UNIT GRANT ACKNOWLEDGEMENT OF RECEIPT This Stock Unit Agreement is entered into by and between Abercrombie & Fitch Co. (the "Company"), and the Associate of the Company whose name appears below (the "Associate") in order to set forth the terms and conditions of grant of stock units, each representing the right to receive one share of Class A Common Stock, $0.01 par value, of the Company (the "Stock Units"), to the Associate under the Abercrombie & Fitch Co. 2002 Stock Plan for Associates (The "Plan"). ASSOCIATE'S NAME: SOCIAL SECURITY #: # OF STOCK UNITS: DATE OF GRANT: VESTING: Stock Units vest on the anniversary of Date of Grant in accordance with the schedule listed below: Year 1 # 25% Year 2 25% Year 3 25% Year 4 25% Subject to the terms and conditions of the attached Plan, which are incorporated herein by reference, the Company hereby grants to the Associate the Stock Units as outlined above. The Company and the Associate executed this Stock Unit Agreement as of the Date of Grant set forth above. ABERCROMBIE & FITCH CO. ASSOCIATE _____________________________________ _____________________________________ Michael Jeffries, Chairman and Chief Executive Officer EX-10.18 9 l10858aexv10w18.txt EXHIBIT 10.18 EXHIBIT 10.18 RESTRICTED SHARES AWARD AGREEMENT (2002 Stock Plan for Associates) This RESTRICTED SHARES AWARD AGREEMENT (this "AGREEMENT") is made to be effective as of _______________, 200__ (the "GRANT DATE"), by and between Abercrombie & Fitch Co., a Delaware corporation (the "COMPANY"), and ________________________ (the "PARTICIPANT"). WITNESSETH: WHEREAS, pursuant to the provisions of the 2002 Stock Plan for Associates of the COMPANY (the "PLAN"), the Compensation Committee (the "COMMITTEE") of the Board of Directors of the COMPANY administers the PLAN; and WHEREAS, the COMMITTEE has determined that _____ (___) shares of Class A Common Stock, $0.01 par value, of the COMPANY (the "RESTRICTED SHARES") should be granted to the PARTICIPANT subject to the restrictions, conditions and other terms set forth in this AGREEMENT; NOW, THEREFORE, in consideration of the premises, the parties hereto make the following agreement, intending to be legally bound thereby: 1. Grant of RESTRICTED SHARES. The COMPANY hereby grants to the PARTICIPANT ___________________ (________) RESTRICTED SHARES of the COMPANY (subject to adjustment as provided in Section 3 of this AGREEMENT). Each RESTRICTED SHARE shall represent one issued and outstanding share of Class A Common Stock, $0.01 par value (the "COMMON SHARES"), of the COMPANY, but shall be subject to the restrictions, conditions and other terms set forth in this AGREEMENT. 2. Terms and Conditions of the RESTRICTED SHARES. (A) RESTRICTED PERIOD. Except as provided under Sections 4 and 5 of this AGREEMENT, the period of restriction (the "RESTRICTED PERIOD"), after which the RESTRICTED SHARES shall become vested and no longer be subject to forfeiture to the COMPANY, shall lapse according to the following schedule: (i) the RESTRICTED PERIOD shall lapse as to _____% of the RESTRICTED SHARES (subject to adjustment as provided in Section 3 of this AGREEMENT), and such RESTRICTED SHARES shall become vested, on the ______ anniversary of the GRANT DATE, provided the PARTICIPANT is employed by the COMPANY or a subsidiary of the COMPANY on such date; (ii) the RESTRICTED PERIOD shall lapse as to an additional _____% of the RESTRICTED SHARES (subject to adjustment as provided in Section 3 of this AGREEMENT), and such RESTRICTED SHARES shall become vested, on the ______ anniversary of the GRANT DATE, provided the PARTICIPANT is employed by the COMPANY or a subsidiary of the COMPANY on such date; (iii) the RESTRICTED PERIOD shall lapse as to an additional ______% of the RESTRICTED SHARES (subject to adjustment as provided in Section 3 of this AGREEMENT), and such RESTRICTED SHARES shall become vested, on the ______ anniversary of the GRANT DATE, provided the PARTICIPANT is employed by the COMPANY or a subsidiary of the COMPANY on such date; and (iv) the RESTRICTED PERIOD shall lapse as to an additional _____% of the RESTRICTED SHARES (subject to adjustment as provided in Section 3 of this AGREEMENT), and such RESTRICTED SHARES shall become vested, on the ______ anniversary of the GRANT DATE, provided the PARTICIPANT is employed by the COMPANY or a subsidiary of the COMPANY on such date. (B) Restrictions on Transfer. The RESTRICTED SHARES may not be assigned, alienated, pledged, attached, sold or otherwise transferred, encumbered or disposed of until the applicable RESTRICTED PERIOD has lapsed and the RESTRICTED SHARES have become vested. Notwithstanding the foregoing, the RESTRICTED SHARES may be transferred pursuant to a qualified domestic relations order, as defined in Section 414(p) of the Internal Revenue Code of 1986, as amended, or any successor provision. Any stock certificate issued in respect of the RESTRICTED SHARES shall bear an appropriate legend evidencing the restrictions on transfer contemplated by this AGREEMENT and prohibiting the transfer thereof except in accordance with the terms of this AGREEMENT. (C) Lapse of RESTRICTED PERIOD. Upon the lapse of the RESTRICTED PERIOD applicable to the RESTRICTED SHARES, the COMPANY shall deliver a stock certificate for or other appropriate documentation evidencing the number of COMMON SHARES of the COMPANY with respect to which restrictions have lapsed, free of all such restrictions, to the PARTICIPANT. (D) Tax Withholding. The COMPANY shall have the right to require the PARTICIPANT to remit to the COMPANY an amount sufficient to satisfy any applicable federal, state and local tax withholding requirements in respect of the vesting of the RESTRICTED SHARES. These tax withholding requirements may be satisfied in one of several ways, including: (i) The PARTICIPANT may give the COMPANY cash equal to the amount required to be withheld or tender COMMON SHARES of the COMPANY already owned by the PARTICIPANT for at least six months by actual delivery of the already-owned COMMON SHARES and having a fair market value (based on the closing sale price of the COMMON SHARES as reported on the New York Stock Exchange or, if the COMMON SHARES are not traded on the New York Stock Exchange, "fair market value" as defined in the PLAN) on the exercise date equal to the amount required to be withheld; or (ii) The COMPANY may withhold COMMON SHARES otherwise deliverable upon vesting of the RESTRICTED SHARES having a fair market value (based on the closing sale price of the COMMON SHARES as reported on the New York Stock Exchange or, if the COMMON SHARES are not traded on the New York Stock Exchange, "fair market value" as defined in the PLAN) on the exercise date equal to the amount required to be withheld (but only to -2- the extent of the minimum amount that must be withheld to comply with applicable state, federal and local income, employment and wage tax laws). (E) Rights as Holder of RESTRICTED SHARES. The PARTICIPANT shall not have the right to vote the RESTRICTED SHARES (or the underlying COMMON SHARES) or the right to receive any dividends with respect to the RESTRICTED SHARES (or the underlying COMMON SHARES) until the applicable RESTRICTED PERIOD has lapsed and the RESTRICTED SHARES have vested. 3. Adjustments and Changes in the COMMON SHARES. (A) If there is a change in the outstanding COMMON SHARES of the COMPANY by reason of a stock dividend, stock split, recapitalization, extraordinary dividend, merger, consolidation, combination, spin-off, distribution of assets to stockholders, exchange of shares, or other similar corporate change, the COMMITTEE shall appropriately adjust the number of RESTRICTED SHARES subject to this AGREEMENT and any other factors, limits or terms of the RESTRICTED SHARES as may be necessary to reflect such event. Fractional RESTRICTED SHARES resulting from any adjustment in the RESTRICTED SHARES pursuant to this Section 3(A) shall be rounded down to the nearest whole number of RESTRICTED SHARES. (B) Notice of any adjustment pursuant to this Section 3 shall be given by the COMPANY to the PARTICIPANT. 4. Acceleration of Vesting of RESTRICTED SHARES. Upon the occurrence of a "Change of Control" (as such term is defined in the PLAN), the RESTRICTED PERIOD applicable to the RESTRICTED SHARES shall immediately lapse and the RESTRICTED SHARES shall become fully vested. 5. Effect of Termination of Employment. (A) The grant of the RESTRICTED SHARES shall not confer upon the PARTICIPANT any right to continue in the employment of the COMPANY or any of its subsidiaries or interfere with or limit in any way the right of the COMPANY or any of its subsidiaries to modify the terms of or terminate the employment of the PARTICIPANT at any time in accordance with applicable law and the COMPANY's or the subsidiary's governing corporate documents. (B) Except as the COMMITTEE may at any time provide, and subject to Section 5(E) below, if the employment of the PARTICIPANT with the COMPANY and its subsidiaries is terminated for any reason other than death or total disability prior to the lapsing of the RESTRICTED PERIOD applicable to the RESTRICTED SHARES, the RESTRICTED SHARES shall be forfeited to the COMPANY. (C) If the PARTICIPANT becomes "totally disabled" as defined in the PLAN, the RESTRICTED PERIOD applicable to the RESTRICTED SHARES shall immediately lapse and the RESTRICTED SHARES shall become fully vested. -3- (D) If the PARTICIPANT dies while employed by the COMPANY or one of its subsidiaries, the RESTRICTED PERIOD applicable to the RESTRICTED SHARES shall immediately lapse and the RESTRICTED SHARES shall become fully vested. (E) Upon the retirement of the PARTICIPANT, the COMMITTEE may, but shall not be required to, shorten or terminate the RESTRICTED PERIOD applicable to the RESTRICTED SHARES. 6. PLAN as Controlling. All terms and conditions of the PLAN applicable to the RESTRICTED SHARES which are not set forth in this AGREEMENT shall be deemed incorporated herein by reference. In the event that any term or condition of this AGREEMENT is inconsistent with the terms and conditions of the PLAN, the PLAN shall be deemed controlling. The PARTICIPANT acknowledges receipt of a copy of the PLAN and of the Prospectus related to the PLAN. 7. Governing Law. To the extent not preempted by federal law, this AGREEMENT shall be governed by and construed in accordance with the laws of the State of Delaware. 8. Rights and Remedies Cumulative. All rights and remedies of the COMPANY and of the PARTICIPANT enumerated in this AGREEMENT shall be cumulative and, except as expressly provided otherwise in this AGREEMENT, none shall exclude any other rights or remedies allowed by law or in equity, and each of said rights or remedies may be exercised and enforced concurrently. 9. Captions. The captions contained in this AGREEMENT are included only for convenience of reference and do not define, limit, explain or modify this AGREEMENT or its interpretation, construction or meaning and are in no way to be construed as a part of this AGREEMENT. 10. Severability. If any provision of this AGREEMENT or the application of any provision hereof to any person or any circumstance shall be determined to be invalid or unenforceable, then such determination shall not affect any other provision of this AGREEMENT or the application of said provision to any other person or circumstance, all of which other provisions shall remain in full force and effect, and it is the intention of each party to this AGREEMENT that if any provision of this AGREEMENT is susceptible of two or more constructions, one of which would render the provision enforceable and the other or others of which would render the provision unenforceable, then the provision shall have the meaning which renders it enforceable. 11. Number and Gender. When used in this AGREEMENT, the number and gender of each pronoun shall be construed to be such number and gender as the context, circumstances or its antecedent may required. 12. Entire Agreement. This AGREEMENT, including the PLAN incorporated herein by reference, constitutes the entire agreement between the COMPANY and the PARTICIPANT in respect of the subject matter of this AGREEMENT, and this AGREEMENT supersedes all prior and contemporaneous agreements between the parties hereto in connection with the subject matter of this AGREEMENT. No officer, employee or other servant or agent of the COMPANY, and no -4- servant or agent of the PARTICIPANT, is authorized to make any representation, warranty or other promise not contained in this AGREEMENT. No change, termination or attempted waiver of any of the provisions of this AGREEMENT shall be binding upon either party hereto unless contained in a writing signed by the party to be charged. 13. Successors and Assigns of the COMPANY. This AGREEMENT shall inure to the benefit of and be binding upon the successors and assigns (including successive, as well as immediate, successors and assigns) of the COMPANY. IN WITNESS WHEREOF, the COMPANY has caused this AGREEMENT to be executed by its duly authorized officer, and the PARTICIPANT has executed this AGREEMENT, in each case effective as of the GRANT DATE. COMPANY: ABERCROMBIE & FITCH CO. By: _______________________________________________ Its: ______________________________________________ Title: ____________________________________________ PARTICIPANT: ___________________________________________________ Printed Name: _____________________________________ Address: ___________________________________________________ ___________________________________________________ ___________________________________________________ Social Security Number: ___________________________ -5- EX-10.19 10 l10858aexv10w19.txt EXHIBIT 10.19 EXHIBIT 10.19 ABERCROMBIE & FITCH STOCK AWARD STOCK OPTION AGREEMENT ACKNOWLEDGEMENT OF RECEIPT This Stock Option Agreement is entered into by and between Abercrombie & Fitch (the "Company"), and the associate of the Company whose name appears below (the "Associate") in order to set forth the terms and conditions of Options granted to the Associate under The Abercrombie & Fitch Co. 2002 Stock Option Plan for Associates (The "Plan"). ASSOCIATE'S NAME: SOCIAL SECURITY #: ADDRESS: # OPTIONS: DATE OF GRANT: GRANT PRICE: OPTION TYPE: VESTING: Shares vest over four years 25% / 25% / 25% / 25% Subject to the attached Terms and Conditions and the terms of the Plan, which are incorporated herein by reference, the Company hereby grants to the Associate Options to purchase shares of Common Stock of the Company, as outlined above. The Company and the Associate have executed this Agreement as of the Date of Grant set forth above. ABERCROMBIE & FITCH ASSOCIATE _____________________________________ _____________________________________ Michael Jeffries, Chairman and Chief Executive Officer EX-10.20 11 l10858aexv10w20.txt EXHIBIT 10.20 EXHIBIT 10.20 STOCK OPTION AGREEMENT (Nonstatutory Stock Option - 2002 Stock Plan for Associates) This STOCK OPTION AGREEMENT (this "AGREEMENT") is made to be effective as of _______________, 200__ (the "GRANT DATE"), by and between Abercrombie & Fitch Co., a Delaware corporation (the "COMPANY"), and ________________________ (the "OPTIONEE"). WITNESSETH: WHEREAS, pursuant to the provisions of the 2002 Stock Plan for Associates of the COMPANY (the "PLAN"), the Compensation Committee (the "COMMITTEE") of the Board of Directors of the COMPANY administers the PLAN; and WHEREAS, the COMMITTEE has determined that an option to purchase _______ (___) shares of Class A Common Stock, $0.01 par value (the "SHARES"), of the COMPANY should be granted to the OPTIONEE upon the terms and conditions set forth in this AGREEMENT; NOW, THEREFORE, in consideration of the premises, the parties hereto make the following agreement, intending to be legally bound thereby: 1. Grant of OPTION. The COMPANY hereby grants to the OPTIONEE an option (the "OPTION") to purchase ________________ (_________) SHARES of the COMPANY (subject to adjustment as provided in Section 3 of this AGREEMENT). The OPTION is not intended to qualify as an incentive stock option under Section 422 of the Internal Revenue Code of 1986, as amended (the "CODE"). 2. Terms and Conditions of the OPTION. (A) OPTION Price. The purchase price (the "OPTION PRICE") to be paid by the OPTIONEE to the COMPANY upon the exercise of the OPTION shall be $_______ per share, which is the per share closing price of the SHARES of the COMPANY as reported on the New York Stock Exchange on the GRANT DATE, subject to adjustment as provided in Section 3 of this AGREEMENT. (B) Exercise of the OPTION. Except as provided under Sections 4 and 6 of this AGREEMENT, the OPTION may not be exercised until the first anniversary of the GRANT DATE, provided that the OPTIONEE is employed by the COMPANY or a subsidiary of the COMPANY on such date. Thereafter, except as otherwise provided in this AGREEMENT, the OPTION may be exercised as follows: (i) at any time after the first anniversary of the GRANT DATE, as to _____% of the SHARES subject to the OPTION (subject to adjustment as provided in Section 3 of this AGREEMENT), provided that the OPTIONEE is employed by the COMPANY or a subsidiary of the COMPANY on such date; (ii) at any time after the second anniversary of the GRANT DATE, as to an additional _____% of the SHARES subject to the OPTION (subject to adjustment as provided in Section 3 of this AGREEMENT), provided that the OPTIONEE is employed by the COMPANY or a subsidiary of the COMPANY on such date; (iii) at any time after the third anniversary of the GRANT DATE, as to an additional ____% of the SHARES subject to the OPTION (subject to adjustment as provided in Section 3 of this AGREEMENT), provided that the OPTIONEE is employed by the COMPANY or a subsidiary of the COMPANY on such date; and (iv) at any time after the fourth anniversary of the GRANT DATE, as to an additional ____% of the SHARES subject to the OPTION (subject to adjustment as provided in Section 3 of this AGREEMENT), provided that the OPTIONEE is employed by the COMPANY or a subsidiary of the COMPANY on such date. Subject to the other provisions of this AGREEMENT, if the OPTION becomes vested and exercisable as to certain SHARES, it shall remain exercisable as to those SHARES until the date of expiration of the OPTION term. The COMMITTEE may, but shall not be required to (unless otherwise provided in this AGREEMENT), accelerate the vesting and exercisability of the OPTION. The grant of the OPTION shall not confer upon the OPTIONEE any right to continue in the employment of the COMPANY or any of its subsidiaries or interfere with or limit in any way the right of the COMPANY or any of its subsidiaries to modify the terms of or terminate the employment of the OPTIONEE at any time in accordance with applicable law and the COMPANY's or the subsidiary's governing corporate documents. (C) OPTION Term. The OPTION shall in no event be exercisable after the expiration of ten years from the GRANT DATE. (D) Method of Exercise. The OPTION may be exercised by giving written notice of exercise to the COMMITTEE, in care of the Human Resources Department of the COMPANY, stating the number of SHARES subject to the OPTION in respect of which the OPTION is being exercised. Payment for all such SHARES shall be made to the COMPANY at the time the OPTION is exercised in United States dollars in cash (including certified check). Payment for such SHARES may also be made (i) by tender of SHARES of the COMPANY already owned by the OPTIONEE for at least six months (either by actual delivery of the already-owned SHARES or by attestation) and having a fair market value (based on the closing sale price of the SHARES as reported on the New York Stock Exchange or, if the SHARES are not traded on the New York Stock Exchange, "fair market value" as defined in the PLAN) on the date of tender equal to the OPTION PRICE or (ii) by a combination of the delivery of cash and the tender of already-owned SHARES. After payment in full for the SHARES purchased under the OPTION has been made, the COMPANY shall take all such actions as are necessary to deliver an appropriate certificate or other evidence of ownership representing the SHARES purchased upon the exercise of the OPTION as promptly thereafter as is reasonably practicable. (E) Tax Withholding. The COMPANY shall have the right to require the OPTIONEE to remit to the COMPANY an amount sufficient to satisfy any applicable federal, state -2- and local tax withholding requirements in respect of the exercise of the OPTION. These tax withholding requirements may be satisfied in one of several ways, including: (i) The OPTIONEE may give the COMPANY cash equal to the amount required to be withheld or tender SHARES of the COMPANY already owned by the OPTIONEE for at least six months by actual delivery of the already-owned SHARES and having a fair market value (based on the closing sale price of the SHARES as reported on the New York Stock Exchange or, if the SHARES are not traded on the New York Stock Exchange, "fair market value" as defined in the PLAN) on the exercise date equal to the amount required to be withheld; or (ii) The COMPANY may withhold SHARES otherwise issuable upon exercise of the OPTION having a fair market value (based on the closing sale price of the SHARES as reported on the New York Stock Exchange or, if the SHARES are not traded on the New York Stock Exchange, "fair market value" as defined in the PLAN) on the exercise date equal to the amount required to be withheld (but only to the extent of the minimum amount that must be withheld to comply with applicable state, federal and local income, employment and wage tax laws). 3. Adjustments and Changes in the SHARES. (A) If there is a change in the outstanding SHARES of the COMPANY by reason of a stock dividend, stock split, recapitalization, extraordinary dividend, merger, consolidation, combination, spin-off, distribution of assets to stockholders, exchange of shares, or other similar corporate change, the COMMITTEE shall appropriately adjust the number of SHARES subject to the OPTION as well as the OPTION PRICE and any other factors, limits or terms of the OPTION as may be necessary to reflect such event. Fractional SHARES resulting from any adjustment in the OPTION pursuant to this Section 3(A) shall be rounded down to the nearest whole number of SHARES. (B) Notice of any adjustment pursuant to this Section 3 shall be given by the COMPANY to the OPTIONEE. 4. Acceleration of OPTION. Upon the occurrence of a "Change of Control" (as such term is defined in the PLAN), the unexercised portion of the OPTION (whether or not then exercisable by its terms) shall become immediately vested and exercisable in full. 5. Non-Transferability of OPTION. The OPTION may not be assigned, alienated, pledged, attached, sold or otherwise transferred, encumbered or disposed of by the OPTIONEE otherwise than by will or the laws of descent and distribution, and during the OPTIONEE's lifetime, the OPTION may be exercised only by the OPTIONEE or by the OPTIONEE's guardian or legal representative. Notwithstanding the foregoing, the OPTION may be transferred pursuant to a qualified domestic relations order, as defined in Section 414(p) of the CODE or any successor provision. 6. Exercise After Termination of Employment. (A) Except as the COMMITTEE may at any time provide, if the employment of the OPTIONEE with the COMPANY and its subsidiaries is terminated for any reason other than -3- death or total disability, the OPTION may be exercised (to the extent that the OPTIONEE was entitled to do so on the date of the termination of the OPTIONEE's employment) at any time within three months after such termination of employment, subject to the provisions of Section 2(C) of this AGREEMENT. (B) If the OPTIONEE becomes "totally disabled" as defined in the PLAN, the OPTION shall become immediately vested and exercisable in full, and the OPTION may be exercised at any time during the first nine months that the OPTIONEE receives benefits under the Abercrombie & Fitch Co. Long-Term Disability Program, or any successor program, subject to the provisions of Section 2(C) of this AGREEMENT. (C) If the OPTIONEE dies while employed by the COMPANY or one of its subsidiaries or within three months after the termination of such employment, the OPTION shall become immediately vested and exercisable in full by the OPTIONEE's estate or by the person who acquires the right to exercise the OPTION upon the OPTIONEE's death by bequest or inheritance. The OPTION may be exercised at any time within one year after the date of the OPTIONEE's death, or such other period as the COMMITTEE may at any time provide, subject to the provisions of Section 2(C) of this AGREEMENT. 7. Restrictions on Transfers of SHARES. Anything contained in this AGREEMENT or elsewhere to the contrary notwithstanding, the COMPANY may postpone the issuance and delivery of SHARES upon any exercise of the OPTION until completion of any stock exchange listing or registration or other qualification of such SHARES under any state or federal law, rule or regulation as the COMPANY may consider appropriate; and may require the OPTIONEE when exercising the OPTION to make such representations and furnish such information as the COMPANY may consider appropriate in connection with the issuance of the SHARES in compliance with applicable laws, rules and regulations. SHARES issued and delivered upon exercise of the OPTION shall be subject to such restrictions on trading, including appropriate legending of certificates to that effect, as the COMPANY, in its discretion, shall determine are necessary to satisfy applicable laws, rules and regulations. 8. Rights of the OPTIONEE as a Stockholder. The OPTIONEE shall have no rights as a stockholder of the COMPANY with respect to any SHARES of the COMPANY covered by the OPTION until the date of issuance to the OPTIONEE of a certificate or other evidence of ownership representing such SHARES. 9. PLAN as Controlling. All terms and conditions of the PLAN applicable to the OPTION which are not set forth in this AGREEMENT shall be deemed incorporated herein by reference. In the event that any term or condition of this AGREEMENT is inconsistent with the terms and conditions of the PLAN, the PLAN shall be deemed controlling. The OPTIONEE acknowledges receipt of a copy of the PLAN and of the Prospectus related to the PLAN. 10. Governing Law. To the extent not preempted by federal law, this AGREEMENT shall be governed by and construed in accordance with the laws of the State of Delaware. 11. Rights and Remedies Cumulative. All rights and remedies of the COMPANY and of the OPTIONEE enumerated in this AGREEMENT shall be cumulative and, except as expressly -4- provided otherwise in this AGREEMENT, none shall exclude any other rights or remedies allowed by law or in equity, and each of said rights or remedies may be exercised and enforced concurrently. 12. Captions. The captions contained in this AGREEMENT are included only for convenience of reference and do not define, limit, explain or modify this AGREEMENT or its interpretation, construction or meaning and are in no way to be construed as a part of this AGREEMENT. 13. Severability. If any provision of this AGREEMENT or the application of any provision hereof to any person or any circumstance shall be determined to be invalid or unenforceable, then such determination shall not affect any other provision of this AGREEMENT or the application of said provision to any other person or circumstance, all of which other provisions shall remain in full force and effect, and it is the intention of each party to this AGREEMENT that if any provision of this AGREEMENT is susceptible of two or more constructions, one of which would render the provision enforceable and the other or others of which would render the provision unenforceable, then the provision shall have the meaning which renders it enforceable. 14. Number and Gender. When used in this AGREEMENT, the number and gender of each pronoun shall be construed to be such number and gender as the context, circumstances or its antecedent may required. 15. Entire Agreement. This AGREEMENT, including the PLAN incorporated herein by reference, constitutes the entire agreement between the COMPANY and the OPTIONEE in respect of the subject matter of this AGREEMENT, and this AGREEMENT supersedes all prior and contemporaneous agreements between the parties hereto in connection with the subject matter of this AGREEMENT. No officer, employee or other servant or agent of the COMPANY, and no servant or agent of the OPTIONEE, is authorized to make any representation, warranty or other promise not contained in this AGREEMENT. No change, termination or attempted waiver of any of the provisions of this AGREEMENT shall be binding upon either party hereto unless contained in a writing signed by the party to be charged. 16. Successors and Assigns of the COMPANY. This AGREEMENT shall inure to the benefit of and be binding upon the successors and assigns (including successive, as well as immediate, successors and assigns) of the COMPANY. -5- IN WITNESS WHEREOF, the COMPANY has caused this AGREEMENT to be executed by its duly authorized officer, and the OPTIONEE has executed this AGREEMENT, in each case effective as of the GRANT DATE. COMPANY: ABERCROMBIE & FITCH CO. By: _____________________________ Its: ____________________________ Title: __________________________ OPTIONEE: _________________________________ Printed Name: ___________________ Address: _________________________________ _________________________________ _________________________________ Social Security Number: _________ -6- EX-10.21 12 l10858aexv10w21.txt EXHIBIT 10.21 EXHIBIT 10.21 ABERCROMBIE & FITCH STOCK AWARD STOCK OPTION AGREEMENT ACKNOWLEDGEMENT OF RECEIPT This Stock Option Agreement is entered into by and between Abercrombie & Fitch (the "Company"), and the Director of the Company whose name appears below (the "Director") in order to set forth the terms and conditions of Options granted to the Director under The Abercrombie & Fitch Co. 2003 Stock Plan for Non-Associate Directors (the "2003 Directors' Stock Plan") (The "Plan"). DIRECTOR'S NAME: SOCIAL SECURITY #: ADDRESS: # OPTIONS: DATE OF GRANT: GRANT PRICE: OPTION TYPE: NON-QUALIFIED VESTING: Shares vest in one year Subject to the attached Terms and Conditions and the terms of the Plan, which are incorporated herein by reference, the Company hereby grants to the Director Options to purchase shares of Common Stock of the Company, as outlined above. The Company and the Director have executed this Agreement as of the Date of Grant set forth above. ABERCROMBIE & FITCH DIRECTOR _____________________________________ _____________________________________ Michael Jeffries, Chairman and Chief Executive Officer EX-10.22 13 l10858aexv10w22.txt EXHIBIT 10.22 EXHIBIT 10.22 STOCK OPTION AGREEMENT (Nonstatutory Stock Option - 2003 Stock Plan for Non-Associate Directors) This STOCK OPTION AGREEMENT (this "AGREEMENT") is made to be effective as of _______________, 200__ (the "GRANT DATE"), by and between Abercrombie & Fitch Co., a Delaware corporation (the "COMPANY"), and ________________________ (the "OPTIONEE"). WITNESSETH: WHEREAS, pursuant to the provisions of the 2003 Stock Plan for Non-Associate Directors of the COMPANY (the "PLAN"), on the first business day of each of the second fiscal quarter and the fourth fiscal quarter of each fiscal year of the COMPANY, the COMPANY is to automatically grant to each individual then serving as a director of the COMPANY who is not an employee of the COMPANY or any of its affiliates (an "ELIGIBLE DIRECTOR"), an option to purchase Two Thousand Five Hundred (2,500) shares of Class A Common Stock, $0.01 par value (the "SHARES"), of the COMPANY; and WHEREAS, the OPTIONEE is an ELIGIBLE DIRECTOR of the COMPANY on the GRANT DATE; NOW, THEREFORE, in consideration of the premises, the parties hereto make the following agreement, intending to be legally bound thereby: 1. Grant of OPTION. The COMPANY hereby grants to the OPTIONEE an option (the "OPTION") to purchase Two Thousand Five Hundred (2,500) SHARES of the COMPANY (subject to adjustment as provided in Section 3 of this AGREEMENT). The OPTION is not intended to qualify as an incentive stock option under Section 422 of the Internal Revenue Code of 1986, as amended (the "CODE"). 2. Terms and Conditions of the OPTION. (A) OPTION Price. The purchase price (the "OPTION PRICE") to be paid by the OPTIONEE to the COMPANY upon the exercise of the OPTION shall be $_______ per share, which is the per share closing price of the SHARES of the COMPANY as reported on the New York Stock Exchange on the GRANT DATE, subject to adjustment as provided in Section 3 of this AGREEMENT. (B) Exercise of the OPTION. Except as provided under Sections 4 and 6 of this AGREEMENT, the OPTION may not be exercised until the first anniversary of the GRANT DATE, provided the OPTIONEE is an ELIGIBLE DIRECTOR of the COMPANY on such date. Thereafter, except as otherwise provided in this AGREEMENT, the OPTION may be exercised in full or in part at any time prior to the date of expiration of the OPTION term. The grant of the OPTION shall not confer upon the OPTIONEE any right to continue to serve as a director of the COMPANY. (C) OPTION Term. The OPTION shall in no event be exercisable after the expiration of ten years from the GRANT DATE. (D) Method of Exercise. The OPTION may be exercised by giving written notice of exercise to the Board of Directors of the COMPANY (the "BOARD"), in care of the __________________________ of the COMPANY, stating the number of SHARES subject to the OPTION in respect of which the OPTION is being exercised. Payment for all such SHARES shall be made to the COMPANY at the time the OPTION is exercised in United States dollars in cash (including certified check). Payment for such SHARES may also be made (i) by tender of SHARES of the COMPANY already owned by the OPTIONEE for at least six months (either by actual delivery of the already-owned SHARES or by attestation) and having a fair market value (based on the closing sale price of the SHARES as reported on the New York Stock Exchange or, if the SHARES are not traded on the New York Stock Exchange, "fair market value" as defined in the PLAN) on the date of tender equal to the OPTION PRICE or (ii) by a combination of the delivery of cash and the tender of already-owned SHARES. After payment in full for the SHARES purchased under the OPTION has been made, the COMPANY shall take all such actions as are necessary to deliver an appropriate certificate or other evidence of ownership representing the SHARES purchased upon the exercise of the OPTION as promptly thereafter as is reasonably practicable. (E) Tax Withholding. The COMPANY shall have the right to require the OPTIONEE to remit to the COMPANY an amount sufficient to satisfy any applicable federal, state and local tax withholding requirements in respect of the exercise of the OPTION. These tax withholding requirements may be satisfied in one of several ways, including: (i) The OPTIONEE may give the COMPANY cash equal to the amount required to be withheld or tender SHARES of the COMPANY already owned by the OPTIONEE for at least six months by actual delivery of the already-owned SHARES and having a fair market value (based on the closing sale price of the SHARES as reported on the New York Stock Exchange or, if the SHARES are not traded on the New York Stock Exchange, "fair market value" as defined in the PLAN) on the exercise date equal to the amount required to be withheld; or (ii) The COMPANY may withhold SHARES otherwise issuable upon exercise of the OPTION having a fair market value (based on the closing sale price of the SHARES as reported on the New York Stock Exchange or, if the SHARES are not traded on the New York Stock Exchange, "fair market value" as defined in the PLAN) on the exercise date equal to the amount required to be withheld (but only to the extent of the minimum amount that must be withheld to comply with applicable state, federal and local income, employment and wage tax laws). 3. Adjustments and Changes in the SHARES. (A) If there is a change in the outstanding SHARES of the COMPANY by reason of a stock dividend, stock split, recapitalization, extraordinary dividend, merger, consolidation, combination, spin-off, distribution of assets to stockholders, exchange of shares, or other similar corporate change, the BOARD shall appropriately adjust the number of SHARES subject to the OPTION as well as the OPTION PRICE and any other factors, limits or terms of the -2- OPTION as may be necessary to reflect such event. Fractional SHARES resulting from any adjustment in the OPTION pursuant to this Section 3(A) shall be rounded down to the nearest whole number of SHARES. (B) Notice of any adjustment pursuant to this Section 3 shall be given by the COMPANY to the OPTIONEE. 4. Acceleration of OPTION. Upon the occurrence of a "Change of Control" (as such term is defined in the PLAN), the unexercised portion of the OPTION (whether or not then exercisable by its terms) shall become immediately vested and exercisable in full. 5. Non-Transferability of OPTION. The OPTION may not be assigned, alienated, pledged, attached, sold or otherwise transferred, encumbered or disposed of by the OPTIONEE otherwise than by will or the laws of descent and distribution, and during the OPTIONEE's lifetime, the OPTION may be exercised only by the OPTIONEE or by the OPTIONEE's guardian or legal representative. Notwithstanding the foregoing, the OPTION may be transferred pursuant to a qualified domestic relations order, as defined in Section 414(p) of the CODE or any successor provision. 6. Exercise After Termination of Service as Director of the COMPANY. (A) Upon termination of the OPTIONEE's service as a director of the COMPANY for any reason other than death or total disability, the OPTION may be exercised (to the extent that the OPTION was then vested and exercisable) at any time within one year after the date upon which the OPTIONEE ceases to be a director of the COMPANY, subject to the provisions of Section 2(C) of this AGREEMENT. (B) If the OPTIONEE becomes "totally disabled" as defined in the PLAN, the OPTION shall become immediately vested and exercisable in full, and the OPTION may be exercised at any time within one year after the OPTIONEE has been determined to be totally disabled, subject to the provisions of Section 2(C) of this AGREEMENT. (C) If the OPTIONEE dies while serving as a director of the COMPANY, the OPTION shall become immediately vested and exercisable in full by the OPTIONEE's estate or by the person who acquires the right to exercise the OPTION upon the OPTIONEE's death by bequest or inheritance. The OPTION may be exercised at any time within one year after the date of the OPTIONEE's death, subject to the provisions of Section 2(C) of this AGREEMENT. 7. Restrictions on Transfers of SHARES. Anything contained in this AGREEMENT or elsewhere to the contrary notwithstanding, the COMPANY may postpone the issuance and delivery of SHARES upon any exercise of the OPTION until completion of any stock exchange listing or registration or other qualification of such SHARES under any state or federal law, rule or regulation as the COMPANY may consider appropriate; and may require the OPTIONEE when exercising the OPTION to make such representations and furnish such information as the COMPANY may consider appropriate in connection with the issuance of the SHARES in compliance with applicable laws, rules and regulations. SHARES issued and delivered upon exercise of the OPTION shall be subject to such restrictions on trading, including appropriate -3- legending of certificates to that effect, as the COMPANY, in its discretion, shall determine are necessary to satisfy applicable laws, rules and regulations. 8. Rights of the OPTIONEE as a Stockholder. The OPTIONEE shall have no rights as a stockholder of the COMPANY with respect to any SHARES of the COMPANY covered by the OPTION until the date of issuance to the OPTIONEE of a certificate or other evidence of ownership representing such SHARES. 9. PLAN as Controlling. All terms and conditions of the PLAN applicable to the OPTION which are not set forth in this AGREEMENT shall be deemed incorporated herein by reference. In the event that any term or condition of this AGREEMENT is inconsistent with the terms and conditions of the PLAN, the PLAN shall be deemed controlling. The OPTIONEE acknowledges receipt of a copy of the PLAN and of the Prospectus related to the PLAN. 10. Governing Law. To the extent not preempted by federal law, this AGREEMENT shall be governed by and construed in accordance with the laws of the State of Delaware. 11. Rights and Remedies Cumulative. All rights and remedies of the COMPANY and of the OPTIONEE enumerated in this AGREEMENT shall be cumulative and, except as expressly provided otherwise in this AGREEMENT, none shall exclude any other rights or remedies allowed by law or in equity, and each of said rights or remedies may be exercised and enforced concurrently. 12. Captions. The captions contained in this AGREEMENT are included only for convenience of reference and do not define, limit, explain or modify this AGREEMENT or its interpretation, construction or meaning and are in no way to be construed as a part of this AGREEMENT. 13. Severability. If any provision of this AGREEMENT or the application of any provision hereof to any person or any circumstance shall be determined to be invalid or unenforceable, then such determination shall not affect any other provision of this AGREEMENT or the application of said provision to any other person or circumstance, all of which other provisions shall remain in full force and effect, and it is the intention of each party to this AGREEMENT that if any provision of this AGREEMENT is susceptible of two or more constructions, one of which would render the provision enforceable and the other or others of which would render the provision unenforceable, then the provision shall have the meaning which renders it enforceable. 14. Number and Gender. When used in this AGREEMENT, the number and gender of each pronoun shall be construed to be such number and gender as the context, circumstances or its antecedent may required. 15. Entire Agreement. This AGREEMENT, including the PLAN incorporated herein by reference, constitutes the entire agreement between the COMPANY and the OPTIONEE in respect of the subject matter of this AGREEMENT, and this AGREEMENT supersedes all prior and contemporaneous agreements between the parties hereto in connection with the subject matter of this AGREEMENT. No officer, employee or other servant or agent of the COMPANY, and no servant or agent of the OPTIONEE, is authorized to make any representation, warranty or other promise not contained in this AGREEMENT. No change, termination or attempted waiver of any -4- of the provisions of this AGREEMENT shall be binding upon either party hereto unless contained in a writing signed by the party to be charged. 16. Successors and Assigns of the COMPANY. This AGREEMENT shall inure to the benefit of and be binding upon the successors and assigns (including successive, as well as immediate, successors and assigns) of the COMPANY. [Remainder of page intentionally left blank; signatures on following page.] -5- IN WITNESS WHEREOF, the COMPANY has caused this AGREEMENT to be executed by its duly authorized officer, and the OPTIONEE has executed this AGREEMENT, in each case effective as of the GRANT DATE. COMPANY: ABERCROMBIE & FITCH CO. By: ____________________________ Its: ___________________________ Title: _________________________ OPTIONEE: ________________________________ Printed Name: __________________ Address: ________________________________ ________________________________ ________________________________ Social Security Number: ________ -6- EX-15 14 l10858aexv15.txt EXHIBIT 15 EXHIBIT 15 December 9, 2004 Securities and Exchange Commission 450 Fifth Street, N.W. Washington, D.C. 20549 Commissioners: We are aware that our report dated December 2, 2004 on our review of interim financial information of Abercrombie & Fitch Co. (the "Company") for the thirteen and thirty-nine week periods ended October 30, 2004 and November 1, 2003 and included in the Company's quarterly report on Form 10-Q for the quarter ended October 30, 2004 is incorporated by reference in its Registration Statements on Form S-8 (Registration Nos. 333-15941, 333-15945, 333-60189, 333-81373, 333-60203, 333-100079, 333-107646 and 333-107648). Very truly yours, PricewaterhouseCoopers LLP EX-31.1 15 l10858aexv31w1.txt EXHIBIT 31.1 EXHIBIT 31.1 RULE 13a-14(a)/15d-14(a) CERTIFICATION (PRINCIPAL EXECUTIVE OFFICER) I, Michael S. Jeffries, certify that: 1. I have reviewed this Quarterly Report on Form 10-Q of Abercrombie & Fitch Co. for the quarterly period ended October 30, 2004; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and c. Disclosed in this report any change in the registrant's internal control over financial reporting that has occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Dated: December 9, 2004 By: /s/ Michael S. Jeffries ------------------------------------------ Michael S. Jeffries Chairman and Chief Executive Officer (Principal Executive Officer) EX-31.2 16 l10858aexv31w2.txt EXHIBIT 31.2 EXHIBIT 31.2 RULE 13a-14(a)/15d-14(a) CERTIFICATION (PRINCIPAL FINANCIAL OFFICER) I, Susan J. Riley, certify that: 1. I have reviewed this Quarterly Report on Form 10-Q of Abercrombie & Fitch Co. for the quarterly period ended October 30, 2004; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and c. Disclosed in this report any change in the registrant's internal control over financial reporting that has occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Dated: December 9, 2004 By: /s/ Susan J. Riley ------------------------------------------------- Susan J. Riley Senior Vice President - Chief Financial Officer (Principal Financial Officer) EX-32 17 l10858aexv32.txt EXHIBIT 32 EXHIBIT 32 SECTION 1350 CERTIFICATION* In connection with the Quarterly Report of Abercrombie & Fitch Co. (the "Corporation") on Form 10-Q for the quarterly period ended October 30, 2004, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned Michael S. Jeffries, Chairman and Chief Executive Officer of the Corporation, and Susan J. Riley, Senior Vice President - Chief Financial Officer of the Corporation, certify, pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of their knowledge: (1) The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation. /s/ Michael S. Jeffries /s/ Susan J. Riley - ------------------------------------ --------------------------------- Michael S. Jeffries Susan J. Riley Chairman and Chief Executive Officer Senior Vice President - Chief Financial Officer Dated: December 9, 2004 Dated: December 9, 2004 * This certification is being furnished as required by Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Section 1350 of Chapter 63 of Title 18 of the United States Code, and shall not be deemed "filed" for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that Section. This certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except as otherwise stated in such filing. -----END PRIVACY-ENHANCED MESSAGE-----