KATE SPADE& COMPANY (NYSE:KATE) Files An 8-K Entry into a Material Definitive Agreement

Other Terms of the Merger Agreement

The Merger Agreement contains customary representations,
warranties and covenants for a transaction of this nature,
including the obligation of the Company to (i)carry on its
business in the ordinary course during the period between the
execution of the Merger Agreement and the consummation of the
Merger and (ii)comply with certain other negative operating
covenants, as set forth more fully in the Merger Agreement.

The Merger Agreement also contains a customary no solicitation
provision that, subject to certain exceptions, restricts the
Companys ability to (i)solicit, initiate or knowingly encourage
any inquiries or submission that could lead to a takeover
proposal or (ii)enter into, engage or participate in
discussions or negotiations with, furnish any nonpublic
information relating to the Company to, or execute any
agreement with, third parties in connection with a third-party
takeover proposal. The no solicitation provision is subject to
a fiduciary out that permits the Company, under certain
circumstances and in compliance with certain obligations, to
terminate the Merger Agreement and accept a Superior Proposal
(as defined in the Merger Agreement) upon payment to Parent of
the termination fee discussed below.

Prior to the acceptance of Shares by Purchaser in the Offer,
the Companys Board of Directors (the Board) may, among other
things, change its recommendation that the Companys
stockholders accept the Offer and tender their Shares in the
Offer in connection with a material event or development that
was not known to, or reasonably anticipated by, the Board as of
the date of the Merger Agreement (provided such event or
development does not relate a third-party takeover proposal),
subject to complying the procedures in the Merger Agreement.

The Merger Agreement also contains certain customary
termination rights for both Parent and the Company, including,
among others, (i)the ability of either Parent or the Company to
terminate the Merger Agreement if the Offer is not consummated
on or before February7, 2018, (ii)the ability of the Company to
terminate the Merger Agreement, under certain circumstances and
in compliance with certain obligations, to enter into an
agreement for an alternative transaction that constitutes a
Superior Proposal or if all of the conditions to the closing of
the Offer have been satisfied and Purchaser does not consummate
the Offer in accordance with the terms of the Merger Agreement,
or (iii)the ability of Parent to terminate the Merger Agreement
due to a change in the recommendation of the Board with respect
to the Offer or a willful and material breach of the no
solicitation provisions by the Company. Upon termination of the
Merger Agreement in specified circumstances, including clause
(ii)and (iii)above, the Company is required to pay Parent a
termination fee of $83,271,000.

The foregoing description of the Merger Agreement is not
complete and is qualified in its entirety by reference to the
Merger Agreement, which is filed as Exhibit2.1 to this report
and incorporated herein by reference. The Merger Agreement and
the foregoing description of the Merger Agreement have been
included to provide investors and our stockholders with
information regarding the terms of the Merger. The assertions
embodied in the representations and warranties contained in the
Merger Agreement are qualified by information in confidential
disclosure schedules. Moreover, certain representations and
warranties in the Merger Agreement were made as of a specified
date, may be subject to a contractual standard of materiality
different from what might be viewed as material to
stockholders, or may have been used for the purpose of
allocating risk between the parties to the Merger Agreement.
Accordingly, the representations and warranties in the Merger
Agreement should not be relied on by any persons as
characterizations of the actual state of facts and
circumstances about the Company, Parent or Purchaser at the
time they were made or otherwise, and information in the Merger
Agreement should be considered in conjunction with the entirety
of the factual disclosure about the Company in the Companys
public reports filed with the SEC. Information concerning the
subject matter of the representations and warranties may change
after the date of the Merger Agreement, which subsequent
information may or may not be fully reflected in the Companys
public disclosures.

ITEM 5.02 DEPARTURES OF DIRECTORS OR
CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN
OFFICERS.

Waiver Letters

On May7, 2017, the Company entered into waiver letter
agreements with each of Craig Leavitt, Deborah Lloyd, George
Carrara, Thomas Linko, Timothy Michno, and Linda Yanussi (each,
a Waiver Letter and collectively, the Waiver Letters), to which
the Company and each executive have agreed, among other things,
to amend each executives respective executive severance
agreement (ESA), employment agreement, and equity award
agreements, as applicable, as follows:

Each executive has agreed to a limited waiver of his or her
good reason resignation rights commencing on the date of the
consummation of the Merger and ending on the date that is the
earliest of (i)a specified number months following the
consummation of the Merger (nine (9)months for Mr.Leavitt and
Ms.Lloyd, six (6)months for Mr.Carrara, and three (3)months for
Messrs.Linko and Michno and Ms.Yanussi); (ii)for Mr.Leavitt,
Ms.Lloyd, and

Mr.Carrara only, a specified outside date (March30, 2018 for
Mr.Leavitt and Ms.Lloyd and January2, 2018 for Mr.Carrara); and
(iii)such date as determined by Parent in its sole discretion
(such period, the waived good reason period). Each executive
has waived the right to terminate his or her employment due to
a material diminution in duties or responsibilities, unless the
executive is assigned duties or responsibilities that are
materially and substantially inconsistent with (in a negative
manner) his or her experience, level, and education, and
Mr.Leavitt and Ms.Lloyd each waived the right to terminate his
or her employment because of any change in duties or
responsibilities solely as a result of the consummation of the
Merger, including no longer serving as a director of the
Company or Parent.

Each executives respective ESA was amended to provide that if
the executives employment terminates due to the executives
death or disability during the waived good reason period, then
the executive will be entitled to receive severance payments
and benefits as if his or her employment was terminated by the
executive for good reason during the waived good reason period.

For each executive, to the extent that his or her employment is
terminated by the Company or Parent without cause or by the
executive for good reason (as defined under his or her
respective ESA and equity award arrangements, as amended by his
or her respective Waiver Letter) prior to the payment date of
the annual bonus to the Companys 2017 annual incentive plan,
each such executive will receive payment of his or her
respective full target bonus (without proration) within 30 days
following the date of such termination of employment.

Provided that each executive remains continuously employed by
Parent or any of its subsidiaries throughout the waived good
reason period, each executive will be deemed to have good
reason (deemed good reason) on the last day of the waived good
reason period, and each executive will be deemed to have
terminated his or her employment by virtue of such deemed good
reason as of such date (the deemed good reason date) without
giving effect to any notice requirement or cure period under
his or her respective ESA and equity award arrangements, and
will be entitled to receive severance payments and benefits to
such agreements. All such cash payments, other than the
benefits continuation, will be made to within 30 days following
such executives employment termination date, so long as such
executive has signed and not revoked a separation and release
agreement at least 8 days prior to the payment.

The definition of cause was amended to include only: (i)any
willful or intentional act or failure to act by the executive
constituting fraud, misrepresentation, theft, embezzlement,
dishonesty or moral turpitude (collectively, Fraud) which
results in demonstrable direct and material injury to the
Company, (ii)the executives conviction of (or a plea of nolo
contendere to) an offense which is a felony in the jurisdiction
involved or which is a misdemeanor in the jurisdiction involved
but which involves Fraud, or (iii)the executives material
breach of a material written policy of the Company that has
been provided to the Executive or the rulesof any governmental
or regulatory body applicable to the Company which results in
demonstrable direct and material injury to the Company.

The concept of a performance-based termination was removed from
the ESAs for each of Messrs.Linko, Michno, and Carrara and
Ms.Yanussi.

Notwithstanding anything to the contrary in the Merger
Agreement, for each executive, all of the outstanding
restricted stock unit awards, performance share unit awards and
market share unit awards, as applicable, that such executive
holds as of the Effective Time will be cancelled and converted
into cash awards that provide each executive the right to
receive an amount in cash, without interest, equal to the
Merger Consideration multiplied by the aggregate number of
shares of Common Stock applicable to such equity awards (with
performance with respect to the performance share units and
market share units to be deemed to have been achieved at 50% of
the target award), which will continue to vest on the same
schedule as the cancelled restricted stock unit award,
performance share unit award or market share unit award, as
applicable, that relates to the converted cash award. For the
avoidance of doubt, such awards shall be subject to any
continuing employment requirements set forth in the underlying
equity award agreement, but will vest in full in the event that
the executives employment is terminated without cause, or the
executive resigns for good reason, during the waived good
reason period or if the executives employment terminates on the
deemed good reason date. The cash payments for such awards
shall be made no later than 30 days following the applicable
vesting date or termination date.

Provided that each of Mr.Leavitt and Ms.Lloyd remain employed
by the Company or Parent as of January1, 2018 for Mr.Leavitt or
April1, 2018 for Ms.Lloyd, each executive will be eligible to
earn a retention bonus equal to 150% of each executives
respective then-current base salary multiplied by a fraction,
the numerator of which is equal to the number of days beginning
on January1, 2018 for Mr.Leavitt and April1, 2018 for Ms.Lloyd
and ending on his or her termination of employment and the
denominator of which is equal to 365. The retention bonus will
be paid in a lump sum no later than 30 days following each
executives respective termination date.

Deal Completion Bonus Letters

On May7, 2017, the Company entered into letter agreements with
each of George Carrara and Thomas Linko (the Deal Completion
Bonus Letters), to which the Company has agreed to pay each
executive a special one-time cash deal completion bonus
following each such executives termination of employment with
the Company in the amount of $750,000 and $500,000,
respectively, subject to each executives continued employment
through their respective waived good reason period (as defined
in each executives respective Waiver Letter) or, if earlier,
following such executives termination of employment by the
Parent or the Company without cause or the executives
resignation from employment for good reason (as each such term
is defined in the executives respective ESA, as amended by
their respective Waiver Letter). The deal completion bonus will
be paid within thirty days of each executives termination date.

The foregoing descriptions of the terms applicable to the
Waiver Letters and the Deal Completion Bonus Letters are not
complete and are qualified in their entirety by reference to
the applicable Waiver Letters and Deal Completion Bonus
Letters, copies of which will be filed as exhibits to the
Companys Quarterly Report on Form10-Q for the quarter ended
July1, 2017.

ITEM 8.01 OTHER EVENTS.

On May8, 2017, the Company issued a joint press release with
Parent announcing the transaction and execution ofthe Merger
Agreement. A copy of the joint press release is attached hereto
as Exhibit99.1 and is incorporated herein by reference.

Additional Information

The tender offer described in this document and the exhibits
filed herewith has not yet commenced. This document is provided
for informational purposes only and does not constitute an
offer to purchase or the solicitation of an offer to sell any
securities. At the time the tender offer is commenced,
Coach,Inc. and its wholly owned subsidiary, Chelsea Merger Sub
Inc., intend to file with the Securities and Exchange
Commission (the SEC) a Tender Offer Statement on Schedule TO
containing an offer to purchase, a form of letter of
transmittal and other documents relating to the tender offer,
and Kate Spade Company intends to file with the SEC a
Solicitation/Recommendation Statement on Schedule 14D-9 with
respect to the tender offer. Coach,Inc., Chelsea Merger Sub
Inc. and Kate Spade Company intend to mail these documents to
the Kate Spade Company stockholders. INVESTORS AND SHAREHOLDERS
SHOULD READ THOSE FILINGS CAREFULLY WHEN THEY BECOME AVAILABLE
AS THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED
TRANSACTION. Those documents may be obtained without charge at
the SECs website at www.sec.gov. The offer to purchase and
related materials may also be obtained (when available) for
free by contacting the information agent for the tender offer.

Cautionary Statement Regarding Forward-Looking
Statements

This document and the exhibits filed herewith contain
forward-looking information related to Coach,Inc., Kate Spade
Company and the proposed acquisition of Kate Spade Company by
Coach,Inc. that involves substantial risks and uncertainties
that could cause actual results to differ materially from those
expressed or implied by such statements. Forward-looking
statements in this document include, among other things,
statements about the potential benefits of the proposed
acquisition, anticipated earnings accretion and growth rates,
Coach,Inc.s and Kate Spade Companys plans, objectives,
expectations and intentions, the financial condition, results
of operations and business of Coach,Inc. and Kate Spade
Company, and the anticipated timing of closing of the
acquisition. Risks and uncertainties include, among other
things, risks related to the satisfaction of the conditions to
closing the acquisition (including the failure to obtain
necessary regulatory approvals) in the anticipated timeframe or
at all, including uncertainties as to how many of Kate Spade
Companys stockholders will tender their shares in the tender
offer and the possibility that the acquisition does not close;
risks related to the ability to realize the anticipated
benefits of the acquisition, including the possibility that the
expected benefits from the proposed acquisition will not be
realized or will not be realized within the expected time
period; the risk that the businesses will not be integrated
successfully; disruption from the transaction making it more
difficult to maintain business and operational relationships;
negative effects of this announcement or the consummation of
the proposed acquisition on the market price of Coach,Inc.s
common stock and on Coach,Inc.s operating results; significant
transaction costs; unknown liabilities; the risk of litigation
and/or regulatory actions related to the proposed acquisition;
other business effects, including the effects of industry,
market, economic, political or regulatory conditions; future
exchange and interest rates; changes in tax and other laws,
regulations, rates and policies; and future business
combinations or disposals. In addition, actual results are
subject to other risks and uncertainties that relate more
broadly to Coach,Inc.s overall business, including those more
fully described in Coach,Inc.s filings with the U.S. Securities
and Exchange Commission (SEC) including its annual report on
Form10-K for the fiscal year ended December31, 2016, and its
quarterly reports filed on Form10-Q for the current fiscal
year, and Kate Spade Companys overall business and financial
condition, including those more fully described in Kate Spade
Companys filings

with the SEC including its annual report on Form10-K for the
fiscal year ended December31, 2016, and its quarterly reports
filed on Form10-Q for the current fiscal year. The
forward-looking statements in this document and the documents
filed herewith speak only as of this date and the date of such
documents, respectively. We expressly disclaim any current
intention to update or revise any forward-looking statements
contained in this document to reflect any change of
expectations with regard thereto or to reflect any change in
events, conditions, or circumstances on which any such
forward-looking statement is based, in whole or in part.

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.

(d)Exhibits: