Exhibit 10.1
ABERCROMBIE & FITCH
October 20, 2004
Tom Mendenhall
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Dear Tom:
We are thrilled that you are considering joining us here at Abercrombie & Fitch,
and we are excited to extend the following offer of employment:
POSITION Sr. Vice President & General Manager -
Abercrombie & Fitch and abercrombie
BASE SALARY $700,000 annually
You will be reviewed in March, 2006 and
at least annually thereafter, with annual
salary adjustments based on:
(1) Your performance
(2) Economic factors (i.e. business
conditions, inflation, job
market, etc.)
SIGN-ON BONUS Upon hire, Abercrombie & Fitch will
pay you a one-time bonus payment of
$50,000. This bonus payment will be made
along with your first regular paycheck.
If you voluntarily resign from A&F during
your first 12 months of employment, or
are terminated for gross misconduct, you
will be required to reimburse the Company
for the full amount of the bonus.
INCENTIVE BONUS COMPENSATION You will be eligible to participate in
our Incentive Compensation (cash bonus)
Program at a target payout level of 50%
of your annual base earnings, with a
maximum payout of 100% of your annual
base earnings. At the income level quoted
in this offer, your target annual payout
is $350,000, and your maximum annual
payout is $700,000.
- Incentive Compensation is paid in
two installments during the year
(40% in August and 60% in February).
Your first Incentive Compensation
payout will occur in February, 2005
and will be pro rated based on your
date of hire.
- All Incentive Compensation (IC)
payouts are based on Abercrombie and
Fitch's profit results and can vary
from zero (0) to a maximum of double
your target level.
STOCK OPTIONS Upon hire you will receive stock options
covering 75,000 Abercrombie & Fitch
shares of Class A common stock. The
options will be valued according to the
closing price of A&F Class A common stock
on the New York Stock Exchange (NYSE) on
your date of hire as a regular, full-time
employee.
Stock Options are exercisable on each
anniversary date of the grant in
accordance with the following vesting
schedule:
Year 1 Year 2 Year 3 Year 4
------ ------ ------ ------
25% 25% 25% 25%
P.O. BOX 182168, COLUMBUS, OH 43218 - TEL (614) 283-6500 - FAX (614) 283-6565
RESTRICTED STOCK GRANT Upon your date of hire you will receive
15,000 Abercrombie & Fitch shares of
restricted stocks. These shares are also
exercisable on each anniversary date of
the grant in accordance with the
following 4 year vesting schedule:
Year 1 Year 2 Year 3 Year 4
------ ------ ------ ------
10% 20% 30% 40%
SEVERANCE IN THE EVENT OF If Abercrombie & Fitch terminates your
TERMINATION employment for any reason (excluding
resignation or termination for cause)
within 12 months of your start date, the
Company agrees to provide salary
continuance for a period of 12 months
from the termination date.
401(k) QUALIFIED SAVINGS PLAN After 1 year of employment, you will be
eligible to participate in the
Abercrombie & Fitch Qualified 401(k)
Savings Plan. As a participant in this
plan, you will be eligible to defer up to
50% of your base salary and bonus, or up
to the IRS maximum annual deferral limit
of $13,000, whichever is less. The first
3% of your base salary and bonus that you
defer into this plan (up to the IRS
maximum considered compensation of
$205,000) will be matched by A&F at 100%.
The next 2% of your base salary and bonus
that you defer into this plan will be
matched at 50%. At the base salary and
target bonus quoted in this offer, and
assuming at least a 5% base salary and
target bonus deferral into the plan, this
would result in an annual company match
of $8,200.
A&F QUALIFIED RETIREMENT PLAN Also after 1 year of employment, you will
eligible to participate in the
Abercrombie & Fitch Qualified Retirement
Plan. As a participant in this plan, you
will be eligible to receive an annual
retirement plan contribution from the
company equal to 5% of your annual base
pay below the Social Security wage base
of $87,900, and 8% of the remainder of
your base pay which is above the social
security wage base, but below $205,000.
At the base salary quoted in this offer,
this would result in a total annual
qualified retirement plan contribution of
$13,763.
A&F NON-QUALIFIED SAVINGS PLAN After 30 days of employment, you will be
eligible to participate in the
Abercrombie & Fitch Non-Qualified Savings
Plan. This Plan will allow you to defer
up to 75% of your base salary each year,
and up to 100% of your bonus. The company
will match the first 3% that you defer on
a dollar for dollar basis. At the base
salary quoted in this offer, this would
result in a company match of $31,500 on a
3% base and target bonus deferral.
A&F NON-QUALIFIED RETIREMENT PLAN After 1 year of employment, you will be
eligible to participate in the
Abercrombie & Fitch Non-Qualified
Retirement Plan. As a participant in this
plan, you will be eligible to receive an
annual retirement plan contribution from
the company equal to 8% of your annual
base pay which exceeds the IRS Qualified
Plan compensation limit of $205,000. You
will also receive a "make-up" match in
this plan equal to the company match that
you forfeit in the 401(k) Qualified
Savings Plan due to the IRS Qualified
Plan compensation limit of $205,000. At
the base salary quoted in this offer,
this would result in an annual
Non-Qualified Retirement Plan
contribution of $73,400.
MEDICAL, DENTAL, LIFE & On your 31st calendar day of employment,
DISABILITY INSURANCE you will be eligible to participate in
our Medical, Dental, Life & Disability
Insurance plans. The current employee
contribution required for all of these
benefits combined is as follows:
Single Coverage $10 per week
Single (+) One $20 per week
Family Coverage $30 per week
FLEXIBLE SPENDING ACCOUNT (FSA) On your 31st day of employment, you will
be eligible to participate in A&F's
Flexible Spending Account (FSA) plan.
FSA's allow you to save money by paying
for certain healthcare and childcare
expenses with pre-tax dollars via
automatic payroll deductions.
EMPLOYEE ASSISTANCE PROGRAM On your 31st calendar day of employment,
you will automatically be enrolled in our
Employee Assistance Program. The EAP
gives you or any covered dependents
access to free, confidential
psychological, financial, or legal
counseling through our EAP provider,
Matrix Psychological Services. Up to 6
free visits, per specific issue, are
available through the EAP.
A&F GYM Effective upon hire, you will be eligible
to join The A&F Gym, our state of the art
8,000 square foot on-site fitness
facility. The cost of membership is only
$10 per month, which is paid via
automatic payroll deduction after you
enroll.
EXECUTIVE LIFE INSURANCE You will be eligible to receive group
INSURANCE term life insurance equal to 4 times
your base annual salary (maximum of
$2,000,000 coverage).
MERCHANDISE DISCOUNT You will receive a discount of 40% on
qualified purchases at all Abercrombie &
Fitch, abercrombie, & Ruehl stores. You
will also receive a discount of 30% on
qualifying purchases at all Hollister Co.
stores.
VACATION/PERSONAL HOLIDAYS Beginning 1/1/2005, you will be eligible
for 20 vacation days (four weeks) and
three personal days annually. Additional
vacation time accrues based on your
length of service with the company. At
the beginning of your 6th calendar year
of employment with the company, you will
receive an additional week of vacation.
Total vacation eligibility at Abercrombie
& Fitch is capped at 25 days (five
weeks). Abercrombie & Fitch also grants 8
paid holidays to all home office
associates annually.
Tom, as you review this information, please call me to clarify any issues. We
look forward to welcoming you to the A&F team.
Sincerely,
/s/ Mike Jeffries
Mike Jeffries
Chairman and CEO
I accept Abercrombie & Fitch's offer of employment as outlined in this letter,
and I am returning a signed copy to Human Resources.
/s/ Tom Mendenhall 10/22/2004
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Tom Mendenhall Date