Performance Share Unit Award Overview containing the standard terms of performance share unit awards under the Amended and Restated 2010 Long-Term Stock Incentive Plan

This Overview is qualified in its entirety by reference to the On-Line Grant Agreements that were distributed to eligible participants on [DATE] (the “On-Line Grant Agreements”), the Memorandum to Participants in the Ralph Lauren Corporation 2010 Long-Term Stock Incentive Plan and to the Plan itself. Copies of the Memorandum and the Plan are available from your People and Development Department.

The Ralph Lauren Corporation (the “Company”) 2010 Long-Term Stock Incentive Plan (the “Plan”) authorizes the Compensation & Organizational Development Committee of the Board of Directors (the “Compensation Committee”) to grant equity awards to officers and other employees of the Company and its Subsidiaries and Affiliates.

As determined by the Compensation Committee, the Company may grant one or more types of stock awards. This Overview describes one type of stock award - Performance Share Units (PSU).

A PSU award provides the participant with the opportunity to receive shares of the Company’s Class A Common Stock (traded on the New York Stock Exchange under the symbol RL) at a later date contingent upon continued service with the Company.

Objectives of PSUs are to:

The Company’s People and Development Department administers the program and Merrill Lynch Wealth Management (“Merrill Lynch”) is the recordkeeper. Participants must have an open brokerage account at Merrill Lynch in order to facilitate distribution of shares of the Company’s Class A Common Stock upon the vesting of PSUs. To open a brokerage account, or for questions regarding your account and account transactions, contact Merrill Lynch at ###-###-#### or ###-###-####.

The Company’s Board of Directors reserves the right to amend, modify or terminate the Plan at any time, subject to stockholder approval, if required. No such amendment to the Plan would adversely affect any PSU awards then outstanding.

Nothing contained herein may be construed as creating a promise of future benefits or a binding contract with the Company. Further, an individual’s employment continues to be at will, subject to any applicable employment agreement.

For questions regarding the Plan and its provisions, contact People and Development.

Equity awards, including PSU awards, may be granted annually to designated, key executives who have a significant impact on the strategic direction and business results of the Company, and who are actively employed on April 1 of the year when the grant is made.

Guidelines have been established for the number and type of equity awards that eligible participants may receive. The guidelines reflect a position’s scope, accountability and impact on the organization, and may also reflect changes in the value of the Company’s Class A Common Stock.

The Company’s performance measure(s) are set by the Compensation Committee at the time of grant from a list of performance criteria set forth in the Plan. Such measure(s) may include, for example, one or more of the following:

The Company performance measures for fiscal 2020 PSU awards are Cumulative Return on Invested Capital (ROIC) for fiscal years 2020-2022 and Relative Total Shareholder Return (TSR) for fiscal years 2020-2022. Half of your PSU award value will be in the form of PSUs with the ROIC measure and half of your PSU award value will be in the form of PSUs with the Relative TSR measure. Vesting of PSUs, and the distribution of the Company’s Class A Common Stock, will occur after the end of Fiscal 2022, as soon as administratively practical following certification of achievement of the performance goals by the Compensation Committee. The vesting date typically occurs in June of each year, but may be earlier or later.

Below is the three-year cumulative ROIC target and payout range.                 

The Relative TSR comparator group and payout range are outlined below.

If Threshold or better performance is achieved, and the participant has had continuous service with the Company through the vesting date, shares of the Company’s Class A Common Stock will be distributed to participants upon the vesting of PSUs. Upon vesting, the participant will own the shares and as a shareholder of the Company’s Class A Common Stock, will have voting rights and will receive dividends, if applicable, on such shares. Prior to the vesting date, dividends are not earned on PSUs and the participant does not have voting rights. If performance is below Threshold at the end of the performance period, all PSUs granted for that award will be forfeited.

PSUs granted in fiscal 2020 are scheduled to vest after fiscal 2022, subject to the Company’s achievement of the cumulative performance goals specified, and the participant’s continuous service with the Company.

A participant is awarded a target number of PSUs on grant date. Applicable Threshold, Target and Maximum levels of Company financial performance are established at the beginning of the performance period for each PSU award.

Once a PSU award is granted, the performance measure(s), performance goals, vesting and payout schedule will not be modified during the term for that particular award. However, in determining performance against the goals, the Company’s results may be adjusted to exclude the effects of certain events and transactions as specified by the Compensation Committee at the time of grant. For any future awards, the Compensation Committee may change the performance measure(s), goals, vesting, and payout schedule(s).

In the U.S. and in many other jurisdictions, vesting of PSUs and the delivery of shares of Class A Common Stock is a taxable event. When shares are distributed, a portion of the shares are withheld to satisfy withholding requirements, and the net shares are delivered to participants in their Merrill Lynch account.

If Threshold or better performance against the applicable goal is achieved, PSUs can provide participants with ownership of the Company’s Class A Common Stock and offer the opportunity to recognize value in several ways:

Shares received from the vesting of a PSU award may be sold subject to the Company’s trading restrictions as set forth in the Company’s Securities Trading policy beginning on page 9. In certain circumstances, certain Executive Officers may sell shares pursuant to Rule 144 or another applicable exemption under the U.S. Securities Act of 1933, as amended.

In the U.S. and in many other jurisdictions, the sale of such shares after vesting has tax implications. Contact your financial advisor for important information about how a subsequent sale of shares impacts you. Once PSUs have vested and you receive shares of the Company’s Class A Common Stock from the vesting of a particular PSU award, you retain all rights to those shares, regardless of employment status with the Company.

All recipients are required to accept their grants on-line by electronically signing the On-Line Grant Agreements to ensure recipients understand the terms of their grants. Recipients must electronically accept the terms of the On-Line Grant Agreements for each PSU award by [DATE]. Awards not accepted by [DATE] will be forfeited. The stock agreements include post-employment obligation terms, including confidentiality, non-compete and non-solicitation provisions.

As provided in the Company Employee Handbook, employees are prohibited by law from buying or selling securities if an employee has or is aware of any material, non-public information about the Company and its subsidiaries. This is commonly referred to as “insider information.” Material, non-public information is any information that has not been disclosed to the public that could affect the price of Company Common Stock -- either positively or negatively -- or affect a person’s decision to buy, hold or sell securities.

Examples of what might be considered “insider information” include, but are not limited to, the following:

These insider-trading rules are applicable to employees of Ralph Lauren and its Subsidiaries and Affiliates, worldwide.

To avoid even the appearance of “insider trading,” our Company’s Securities Trading policy prohibits members of the Board of Directors, all employees and their “Related Parties” (as such term is defined in the Company’s Securities Trading Policy) from making trades involving stock of the Company during certain “blackout periods.” This prohibition covers all transactions in the Company’s securities, including buying or selling shares, including shares of Class A Common Stock received upon the vesting of PSUs. These blackout periods generally begin two weeks before the end of each of our fiscal quarters and continue through one trading day after the Company issues its earnings release for the fiscal quarter or year just ended. If the earnings release is issued before the opening of the market on a trading day, trading may begin the next day. The blackout periods are announced at the start of each year. The Company may prohibit trading of the Company’s stock at any time it deems such trading to be inappropriate, even outside the regular blackout periods. Individuals who receive a specific notification prohibiting them from trading the Company’s stock should note that such notification takes precedence over pre-announced blackout periods. In addition, members of the Board of Directors, any employee who is at the Senior Vice President level or above, and all employees in the Finance, Legal and People and Development departments must clear all trades with the Corporate and Securities Counsel, or their designee, at all times.

Because we believe it is inappropriate for any Company personnel to engage in short-term or speculative transactions involving the Company’s Common Stock, it is Company policy that employees do not engage in any of the following activities with respect to the securities of the Company: