lululemon athletica inc. 10-K

ITEM 9A. CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures Under the supervision and with the participation of our management, including our principal executive officer and principal financial and accounting officer, we conducted an evaluation of the effectiveness of the design and operation of our 79 Table of Contents disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, as of the end of the period covered by this report, or the Evaluation Date. Based upon the evaluation, our principal executive officer and principal financial and accounting officer concluded that our disclosure controls and procedures were effective as of the Evaluation Date. Disclosure controls and procedures are controls and procedures designed to reasonably ensure that information required to be disclosed in our reports filed under the Exchange Act, such as this report, is recorded, processed, summarized, and reported within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include controls and procedures designed to reasonably ensure that such information is accumulated and communicated to our management, including our principal executive officer and principal financial and accounting officer, as appropriate to allow timely decisions regarding required disclosure. Inherent Limitations over Internal Controls Our internal control over financial reporting is designed to provide reasonable assurances regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements. Management, including our principal executive officer and principal financial and accounting officer, does not expect that our internal controls will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource limitations on all control systems; no evaluation of internal controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Also, any evaluation of the effectiveness of controls in future periods are subject to the risk that those internal controls may become inadequate because of changes in business conditions, or that the degree of compliance with the policies and procedures may deteriorate. Management's Annual Report on Internal Control over Financial Reporting Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended). Management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the criteria set forth in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO. Based on this evaluation, management concluded that we maintained effective internal control over financial reporting as of January 28, 2024. The effectiveness of our internal control over financial reporting as of January 28, 2024 has been audited by PricewaterhouseCoopers LLP, our independent registered public accounting firm, as stated in their report, which appears in Item 8 of Part II of this Form 10-K. Changes in Internal Control over Financial Reporting There were no changes in our internal control over financial reporting during the fourth quarter of 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. ITEM 9B. OTHER INFORMATION Trading Arrangements During the fourth quarter of 2023, no director or officer of lululemon (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (in each case, as defined in Item 408(a) of Regulation S-K). Appointment of Director On March 15, 2024, the board of directors of lululemon appointed Teri L. List as a member of the board of directors. Ms. List served as executive vice president and chief financial officer of Gap Inc, a global clothing retailer, from January 2017 80 Table of Contents until her retirement in June 2020. Prior to joining the Gap, she served as chief financial officer at DICK’s Sporting Goods and Kraft Food Group. Prior to those roles, Ms. List spent nearly 20 years with Procter & Gamble culminating in the role of SVP and Treasurer. She began her career in public accounting at Deloitte LLP, an auditing, consulting, tax and advisory services firm. She currently serves on the Boards of Visa, Microsoft and Danaher Corporation. Ms. List received her Bachelor’s degree in accounting from Northern Michigan University and is a certified public accountant. The board of directors increased the size of the board from ten to eleven members and appointed Ms. List as a Class I director to fill the newly created vacancy. Although Ms. List will serve as a member of the class of directors whose terms expire at the 2026 annual meeting of stockholders, our stockholders will have the opportunity to vote on her nomination as a continuing Class I director at the next annual meeting of stockholders. Ms. List will serve on the Audit Committee and will receive compensation for her service as a director consistent with that of our other non-employee directors. A description of our standard compensation arrangements for non-employee directors is included as an exhibit to this annual report on Form 10-K. We expect Ms. List to enter into our standard form indemnification agreement for non-employee directors, the form of which is filed with the SEC as Exhibit 10.16 to our registration statement on Form S-1, dated July 9, 2007. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS Not applicable. 81 Table of Contents PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE The information required by this item concerning our directors, director nominees and Section 16 beneficial ownership reporting compliance is incorporated by reference to our definitive Proxy Statement for our 2024 Annual Meeting of Stockholders under the captions "Election of Directors," "Executive Officers," and "Corporate Governance," and, to the extent necessary, under the caption "Delinquent Section 16(a) Reports." We have adopted a written code of business conduct and ethics, which applies to all of our directors, officers, and employees, including our principal executive officer and our principal financial and accounting officer. Our Global Code of Business Conduct and Ethics is available on our website, www.lululemon.com, and can be obtained by writing to Investor Relations, lululemon athletica inc., 1818 Cornwall Avenue, Vancouver, British Columbia, Canada V6J 1C7 or by sending an email to investors@lululemon.com. Information contained on or accessible through our websites is not incorporated into, and does not form a part of, this Annual Report or any other report or document we file with the SEC, and any references to our websites are intended to be inactive textual references only. Any amendments, other than technical, administrative, or other non-substantive amendments, to our Global Code of Business Conduct and Ethics or waivers from the provisions of the Global Code of Business Conduct and Ethics for our principal executive officer and our principal financial and accounting officer will be promptly disclosed on our website following the effective date of such amendment or waiver. ITEM 11. EXECUTIVE COMPENSATION The information required by this item is incorporated by reference to our 2024 Proxy Statement under the captions "Executive Compensation" and "Executive Compensation Tables." ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The information required by this item is incorporated by reference to our 2024 Proxy Statement under the caption "Principal Shareholders and Share Ownership by Management." Equity Compensation Plan Information (as of January 28, 2024) Plan Category Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (1) (A) Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (2) (B) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (A)) (3) (C) Equity compensation plans approved by stockholders 1,181,031 $ 285.69 8,428,503 Equity compensation plans not approved by stockholders — — — Total 1,181,031 $ 285.69 8,428,503 __________ (1) This amount represents the following: (a) 783,036 shares subject to outstanding options, (b) 175,365 shares subject to outstanding performance-based restricted stock units, and (c) 222,630 shares subject to outstanding restricted stock units. The options, performance-based restricted stock units, and restricted stock units are all under our 2023 Equity Incentive Plan. Restricted shares outstanding under our 2023 Equity Incentive Plan have already been reflected in our total outstanding common stock balance. (2) The weighted-average exercise price is calculated solely on the exercise prices of the outstanding options and does not reflect the shares that will be issued upon the vesting of outstanding awards of performance-based restricted stock units and restricted stock units, which have no exercise price. (3) This includes (a) 4,025,805 shares of our common stock available for future issuance under our 2023 Equity Incentive Plan and (b) 4,402,698 shares of our common stock available for future issuance under our Employee Share Purchase Plan. The number of shares remaining available for future issuance under our 2023 Equity Incentive Plan is reduced by 1.7 shares for each award other than stock options granted and by one share for each stock option award granted. Outstanding awards that expire or are canceled without having been exercised or settled in full are available for issuance again under our 2023 Equity Incentive Plan but shares that are withheld in satisfaction of tax withholding obligations for full value awards are not again available for issuance. No further awards may be issued under the predecessor plan, our 2014 Equity Incentive Plan. 82 Table of Contents ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE The information required by this item is incorporated by reference to our 2024 Proxy Statement under the captions "Certain Relationships and Related Party Transactions" and "Corporate Governance." ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES The information required by this item is incorporated by reference to our 2024 Proxy Statement under the caption "Fees for Professional Services." 83 Table of Contents PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULE (a) Documents filed as part of this report: 1. Financial Statements. The financial statements as set forth under Item 8 of this Annual Report on Form 10-K are incorporated herein. 2. Financial Statement Schedule. Separate financial statement schedules have been omitted either because they are not applicable or because the required information is included in the consolidated financial statements or notes described in Item 15(a)(1) above. 84 Table of Contents 3. Exhibits Exhibit Index Incorporated by Reference Exhibit No. Exhibit Title Filed Herewith Form Exhibit No. File No. Filing Date 3.1 Restated Certificate of Incorporation of lululemon athletica inc. X 3.2 Bylaws of lululemon athletica inc. 10-K 3.5 001-33608 3/28/2023 4.1 Form of Specimen Stock Certificate of lululemon athletica inc. S-3 4.1 333-185899 1/7/2013 4.2 Description of Securities Registered Under Section 12 of the Securities Exchange Act of 1934 10-K 4.2 001-33608 3/26/2020 10.1* lululemon athletica inc. 2023 Equity Incentive Plan X 10.2* Form of Non-Qualified Stock Option Agreement 8-K 10.2 001-33608 6/13/2023 10.3* Form of Notice of Grant of Performance Shares and Performance Shares Agreement 8-K 10.3 001-33608 6/13/2023 10.4* Form of Notice of Grant of Restricted Stock Units and Restricted Stock Units Agreement 8-K 10.4 001-33608 6/13/2023 10.5* Form of Restricted Stock Award Agreement 8-K 10.5 001-33608 6/13/2023 10.6* Amended and Restated LIPO Investments (USA), Inc. Option Plan and form of Award Agreement S-1 10.3 333-142477 5/1/2007 10.7 Exchange Trust Agreement dated July 26, 2007 between lululemon athletica inc., Lulu Canadian Holding, Inc. and Computershare Trust Company of Canada 10-Q 10.5 001-33608 9/10/2007 10.8 Exchangeable Share Support Agreement dated July 26, 2007 between lululemon athletica inc., Lululemon Callco ULC and Lulu Canadian Holding, Inc. 10-Q 10.6 001-33608 9/10/2007 10.9 Amended and Restated Declaration of Trust for Forfeitable Exchangeable Shares dated July 26, 2007, by and among the parties named therein 10-Q 10.7 001-33608 9/10/2007 10.10 Amended and Restated Arrangement Agreement dated as of June 18, 2007, by and among the parties named therein (including Plan of Arrangement and Exchangeable Share Provisions) S-1/A 10.14 333-142477 7/9/2007 10.11 Form of Indemnification Agreement between lululemon athletica inc. and its directors and certain officers S-1/A 10.16 333-142477 7/9/2007 10.12* Outside Director Compensation Plan X 10.13* Executive Bonus Plan 8-K 10.1 001-33608 3/29/2022 10.14* lululemon athletica inc. Employee Share Purchase Plan 10-Q 10.3 001-33608 11/29/2007 10.15* Executive Employment Agreement, effective as of December 5, 2016, between lululemon athletica canada inc. and Celeste Burgoyne 10-K 10.23 001-33608 3/29/2017 10.16* Amendment to Executive Employment Agreement, effective October 27, 2020, between lululemon athletica canada inc. and Celeste Burgoyne 10-Q 10.1 001-33608 12/10/2020 10.17* Executive Employment Agreement, effective as of August 20, 2018, between lululemon athletica canada inc. and Calvin McDonald 8-K 10.1 001-33608 7/24/2018 10.18* Executive Employment Agreement, effective as of November 23, 2020, between lululemon athletica inc. and Meghan Frank 10-Q 10.2 001-33608 12/10/2020 85 Table of Contents Incorporated by Reference Exhibit No. Exhibit Title Filed Herewith Form Exhibit No. File No. Filing Date 10.19* Executive Employment Agreement, effective as of September 20, 2018, between lululemon athletica inc. and Michelle Choe 10-Q 10.1 001-33608 12/06/2018 10.20* Executive Employment Agreement, effective September 20, 2021, between lululemon athletica inc. and Nicole Neuburger 10-Q 10.1 001-33608 12/09/2021 10.21* Executive Employment Agreement, effective as of January 4, 2021, between lululemon athletica UK ltd. and Andre Maestrini 10-K 10.22 001-33608 3/30/2021 10.22 Credit Agreement, dated December 14, 2021, among lululemon athletica inc., lululemon athletica canada inc., Lulu Canadian Holding, Inc. and lululemon usa inc., as borrowers, Bank of America, N.A., as administrative agent, swing line lender and letter of credit issuer, HSBC Bank Canada, as syndication agent and letter of credit issuer, BOFA Securities, Inc., as sustainability coordinator, and the other lenders party thereto. 8-K 10.1 001-33608 12/17/2021 21.1 Significant subsidiaries of lululemon athletica inc. 10-K 21.1 001-33608 3/28/2023 23.1 Consent of PricewaterhouseCoopers LLP X 31.1 Certification of principal executive officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 X 31.2 Certification of principal financial and accounting officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 X 32.1** Certification of principal executive officer and principal financial and accounting officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 X 97 Policy for Recovery of Erroneously Awarded Incentive-Based Compensation 8-K 10.1 001-33608 6/13/2023 101 The following financial statements from the Company's 10-K for the fiscal year ended January 28, 2024, formatted in iXBRL: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations and Comprehensive Income, (iii) Consolidated Statements of Stockholders' Equity, (iv) Consolidated Statements of Cash Flows (v) Notes to the Consolidated Financial Statements X 104 Cover Page Interactive Data File (formatted in iXBRL and contained in Exhibit 101) X * Denotes a compensatory plan, contract or arrangement, in which our directors or executive officers may participate. ** Furnished herewith. ITEM 16. FORM 10-K SUMMARY None. 86 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. LULULEMON ATHLETICA INC. By: /s/ CALVIN MCDONALD Calvin McDonald Chief Executive Officer (principal executive officer) Date: March 21, 2024 KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Calvin McDonald and Meghan Frank and each of them, with full power of substitution and resubstitution and full power to act without the other, as his or her true and lawful attorney-in-fact and agent to act in his or her name, place and stead and to execute in the name and on behalf of each person, individually and in each capacity stated below, and to file, any and all documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing, ratifying and confirming all that said attorneys-in-fact and agents or any of them or their and his or her substitute or substitutes, may lawfully do or cause to be done by virtue thereof. 87 Table of Contents Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated: Signature Title Date /s/ CALVIN MCDONALD Chief Executive Officer and Director March 21, 2024 Calvin McDonald (principal executive officer) /s/ MEGHAN FRANK Chief Financial Officer March 21, 2024 Meghan Frank (principal financial and accounting officer) /s/ MARTHA A.M. MORFITT Director, Board Chair March 21, 2024 Martha A.M. Morfitt /s/ MICHAEL CASEY Director March 21, 2024 Michael Casey /s/ SHANE GRANT Director March 21, 2024 Shane Grant /s/ KATHRYN HENRY Director March 21, 2024 Kathryn Henry /s/ TERI LIST Director March 21, 2024 Teri List /s/ ALISON LOEHNIS Director March 21, 2024 Alison Loehnis /s/ ISABEL MAHE Director March 21, 2024 Isabel Mahe /s/ JON MCNEILL Director March 21, 2024 Jon McNeill /s/ DAVID M. MUSSAFER Director March 21, 2024 David M. Mussafer /s/ EMILY WHITE Director March 21, 2024 Emily White 88