As filed with the Securities and Exchange Commission on February 3, 1997.
REGISTRATION NO. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
TOMMY HILFIGER CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
British Virgin Islands Not Applicable
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
6/F Precious Industrial Centre
18 Cheung Yue Street
Cheung Sha Wan, Kowloon
Hong Kong
(Address of Principal Executive Offices)
TOMMY HILFIGER U.S.A.
1992 STOCK INCENTIVE PLAN
AND
TOMMY HILFIGER (EASTERN HEMISPHERE) LIMITED
1992 STOCK INCENTIVE PLAN
(Full Title of the Plans)
Mr. Joel J. Horowitz
Chief Executive Officer
Tommy Hilfiger U.S.A., Inc.
25 West 39th Street
New York, New York 10018
(212) 840-8888
(Name, Address and Telephone Number of Agent for Service)
Copy to:
Eric S. Robinson, Esq.
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
(212) 403-1000
<PAGE>
<TABLE>
CALCULATION OF REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION> PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SECURITIES AMOUNT TO OFFERING PRICE AGGREGATE AMOUNT OF
TO BE REGISTERED BE REGISTERED(1) PER SHARE(2) OFFERING PRICE(2) REGISTRATION FEE
- ------------------- ---------------- ---------------- ----------------- ----------------
<S> <C> <C> <C> <C>
Ordinary Shares, par
value $.01 per share 500,000 shares $49 $24,500,000 $7,425
(1) Plus such indeterminate number of shares as may be
issued to prevent dilution resulting from stock splits,
stock dividends or similar transactions in accordance
with Rule 416 under the Securities Act of 1933.
(2) Pursuant to Rule 457(h) and Rule 457(c) under the
Securities Act of 1933, the proposed maximum offering
price per share and the registration fee are based on
the reported average of the high and low prices for the
Registrant's Ordinary Shares on the New York Stock Ex-
change on January 27, 1997.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
This Registration Statement is being filed pursuant to General Instruction E of
Form S-8 in order to register additional securities of the same class as other
securities for which a registration statement on this form relating to the same
employee benefit plans is effective. <PAGE>
On December 14, 1995, the Registrant filed a registration
statement on Form S-8 (File No. 33-80439) to register 1,000,000
Ordinary Shares, par value $.01 per share ("Ordinary Shares"),
which were issuable under the Registrant's stock incentive
plans. The contents of that registration statement are
incorporated herein by reference. The Registrant is filing
this separate Registration Statement to register an additional
500,000 Ordinary Shares which may be issued under the stock
incentive plans.
ITEM 8. EXHIBITS.
Exhibit Number Description
4.1 Tommy Hilfiger U.S.A. 1992 Stock Incen-
tive Plan, as amended and restated
4.2 Tommy Hilfiger (Eastern Hemisphere)
Limited 1992 Stock Incentive Plan, as
amended and restated
5 Opinion of Harney, Westwood & Riegels
23.1 Consent of Price Waterhouse LLP
23.2 Consent of Harney, Westwood & Riegels
(included in their opinion filed as Ex-
hibit 5)<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act
of 1933, the Registrant certifies that it has reasonable
grounds to believe that it meets all of the requirements for
filing on Form S-8 and has duly caused this Registration State-
ment to be signed on its behalf by the undersigned, thereunto
duly authorized, in Kowloon, Hong Kong, on January 31, 1997.
TOMMY HILFIGER CORPORATION
By:/S/ JOEL J. HOROWITZ
Joel J. Horowitz
Chief Executive Officer
and President
Pursuant to the requirements of the Securities Act
of 1933, this Registration Statement has been signed by the
following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
/S/ SILAS K.F. CHOU Chairman of the Board January 31, 1997
(Silas K.F. Chou)
Director and Honorary January 31, 1997
(Thomas J. Hilfiger) Chairman of the Board
/S/ JOEL J. HOROWITZ Director, Chief January 31, 1997
(Joel J. Horowitz) Executive Officer and
President (principal
executive officer)<PAGE>
/S/ BENJAMIN M.T. NG Director, Executive January 31, 1997
(Benjamin M.T. Ng) Vice President --
Corporate Finance
and Assistant
Secretary (principal
financial officer)
Director January 31, 1997
(Lawrence S. Stroll)
/S/ RONALD K.Y. CHAO Director January 31, 1997
(Ronald K.Y. Chao)
/S/ LESTER M.Y. MA Director January 31, 1997
(Lester M.Y. Ma)
/S/ JOSEPH M. ADAMKO Director January 31, 1997
(Joseph M. Adamko)
Director January 31, 1997
(Clinton V. Silver)
/S/ STEVEN A. SORILLO Assistant Treasurer January 31, 1997
(Steven A. Sorillo) (principal accounting
officer) <PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
4.1 Tommy Hilfiger U.S.A. 1992 Stock
Incentive Plan, as amended and
restated
4.2 Tommy Hilfiger (Eastern Hemisphere) Limited
1992 Stock Incentive Plan, as
amended and restated
5 Opinion of Harney, Westwood & Riegels
23.1 Consent of Price Waterhouse LLP
23.2 Consent of Harney, Westwood & Riegels
(Included in their opinion filed as
Exhibit 5)
EXHIBIT 4.1
TOMMY HILFIGER U.S.A.
1992 STOCK INCENTIVE PLAN
(Restated to Incorporate All Amendments
through November 1, 1996 and the Effects of the
December 27, 1994 Two-for-One Stock Split)<PAGE>
SECTION 1. PURPOSE; DEFINITIONS.
The purpose of the Plan is to give the Company and
its Affiliates a significant advantage in attracting, retain-
ing and motivating officers, employees and directors and to
provide the Company and its subsidiaries with the ability to
provide incentives more directly linked to the profitability
of the Company's businesses and increases in stockholder
value.
For purposes of the Plan, the following terms are
defined as set forth below:
a. "Affiliate" means a corporation or other enti-
ty controlled by or in control of the Company and designated
by the Committee as such.
b. "Award" means a Stock Appreciation Right,
Stock Option or Restricted Stock.
c. "Board" means the Board of Directors of the
Company.
d. "Cause" has the meaning set forth in Sec-
tion 5(i).
e. "Code" means the Internal Revenue Code of
1986, as amended from time to time, and any successor there-
to.
f. "Committee" means the Committee referred to in
Section 2.
g. "Company" means Tommy Hilfiger U.S.A., Inc., a
Delaware corporation.
h. "Disability" means permanent and total dis-
ability as determined under procedures established by the
Committee for purposes of the Plan.
i. "Fair Market Value" means, as of any given
date, the mean between the highest and lowest reported sales
prices of the Stock on the New York Stock Exchange Composite
Tape or, if not listed on such exchange, on any other nation-
al securities exchange on which the Stock is listed or on
NASDAQ. If there is no regular public trading market for
such Stock, the Fair Market Value of the Stock shall be de-
termined by the Committee in good faith.
j. "Incentive Stock Option" means any Stock Op-
tion intended to be and designated as an "incentive stock
option" within the meaning of Section 422 of the Code.<PAGE>
k. "Non-Qualified Stock Option" means any Stock
Option that is not an Incentive Stock Option.
l. "Plan" means the Tommy Hilfiger U.S.A. 1992
Stock Incentive Plan, as set forth herein and as hereinafter
amended from time to time.
m. "Restricted Stock" means an award granted un-
der Section 7.
n. "Retirement" means retirement from active em-
ployment under a pension plan of the Company, any subsidiary
or Affiliate, or under an employment contract with any of
them, or termination of employment at or after age 55 under
circumstances which the Committee, in its sole discretion,
deems equivalent to retirement.
o. "Stock" means the ordinary shares, par value
$0.01 per share, of Tommy Hilfiger Corporation, a British
Virgin Islands corporation.
p. "Stock Appreciation Right" means a right
granted under Section 6.
q. "Stock Option" means an option granted under
Section 5.
r. "Termination of Employment" means the termina-
tion of the participant's employment with the Company and any
subsidiary or Affiliate. A participant employed by a subsid-
iary or an Affiliate shall also be deemed to incur a Termina-
tion of Employment if the subsidiary or Affiliate ceases to
be such a subsidiary or Affiliate, as the case may be, and
the participant does not immediately thereafter become an
employee of the Company or another subsidiary or Affiliate.
In addition, certain other terms used herein have
definitions given to them in the first place in which they
are used.
SECTION 2. ADMINISTRATION.
The Plan shall be administered by the Compensation
Committee of the Board. If at any time no Committee shall be
in office, the functions of the Committee specified in the
Plan shall be exercised by the Board.
The Committee shall have plenary authority to grant
Awards pursuant to the terms of the Plan to officers, employ-
ees and directors of the Company and its subsidiaries and
Affiliates.
-2-<PAGE>
Among other things, the Committee shall have the
authority, subject to the terms of the Plan:
(a) subject to Section 4, to select the officers,
employees and directors to whom Awards may from time to time
be granted;
(b) to determine whether and to what extent Incen-
tive Stock Options, Non-Qualified Stock Options, Stock Appre-
ciation Rights and Restricted Stock or any combination
thereof are to be granted hereunder;
(c) to determine the number of shares of Stock to
be covered by each Award granted hereunder;
(d) to determine the terms and conditions of any
Award granted hereunder (including, but not limited to, the
option price (subject to Section 5(a)), any vesting restric-
tion or limitation and any vesting acceleration or forfeiture
waiver regarding any Award and the shares of Stock relating
thereto, based on such factors as the Committee shall deter-
mine);
(e) to modify, amend or adjust the terms and con-
ditions of any Award, at any time or from time to time, in-
cluding, but not limited to, with respect to performance
goals and measurements applicable to performance-based Awards
pursuant to the terms of the Plan;
(f) to determine to what extent and under what
circumstances Stock and other amounts payable with respect to
an Award shall be deferred; and
(g) to determine under what circumstances a Stock
Option may be settled in cash or Stock under Section 5(j).
The Committee shall have the authority to adopt,
alter and repeal such administrative rules, guidelines and
practices governing the Plan as it shall, from time to time,
deem advisable, to interpret the terms and provisions of the
Plan and any Award issued under the Plan (and any agreement
relating thereto) and to otherwise supervise the administra-
tion of the Plan.
Any determination made by the Committee or pursuant
to delegated authority pursuant to the provisions of the Plan
with respect to any Award shall be made in the sole discre-
tion of the Committee or such delegate at the time of the
grant of the Award or, unless in contravention of any express
term of the Plan, at any time thereafter. All decisions made
by the Committee or any appropriately delegated officer pur-
suant to the provisions of the Plan shall be final and bind-
ing on all persons, including the Company and Plan partici-
pants.
-3-<PAGE>
SECTION 3. STOCK SUBJECT TO PLAN.
Subject to adjustment as provided herein, the total
number of shares of Stock available for grant under the Plan
shall be 5,470,000 shares of Stock, less the number of shares
of Stock which have been made the subject of an Award under
the Tommy Hilfiger (Eastern Hemisphere) Limited 1992 Stock
Incentive Plan, as amended and restated. Shares of Stock
subject to an Award under the Plan may be authorized and
unissued shares or may be treasury shares.
If any shares of Restricted Stock are forfeited for
which the participant did not receive any benefits of owner-
ship (as such phrase is construed by the Commission or its
Staff), or if any Stock Option (and related Stock Apprecia-
tion Right, if any) terminates without being exercised, or if
any Stock Appreciation Right is exercised for cash, shares
subject to such Awards shall again be available for distrib-
ution in connection with Awards under the Plan.
In the event of any merger, reorganization, consol-
idation, recapitalization, stock dividend, stock split, ex-
traordinary distribution with respect to the Stock or other
change in corporate structure affecting the Stock, the Com-
mittee or Board may make such substitution or adjustments in
the aggregate number and kind of shares reserved for issuance
under the Plan, in the number, kind and option price of
shares subject to outstanding Stock Options and Stock Appre-
ciation Rights, in the number and kind of shares subject to
other outstanding Awards granted under the Plan and/or such
other substitution or adjustments in the consideration re-
ceivable upon exercise as it may determine to be appropriate
in its sole discretion; provided, however, that the number of
shares subject to any Award shall always be a whole number.
Such adjusted option price shall also be used to determine
the amount payable by the Company upon the exercise of any
Stock Appreciation Right associated with any Stock Option.
SECTION 4. ELIGIBILITY.
Officers, employees and directors of the Company,
its subsidiaries and Affiliates who are responsible for or
contribute to the management, growth and profitability of the
business of the Company, its subsidiaries and Affiliates are
eligible to be granted Awards under the Plan. No grant shall
be made to Thomas J. Hilfiger, Joel J. Horowitz, Silas K.F.
Chou, Ronald K.Y. Chao, Lawrence S. Stroll or Edwin H. Lewis,
other than the grant to Edwin M. Lewis of one Stock Option to
acquire 1,520,000 shares of Stock.
-4-<PAGE>
SECTION 5. STOCK OPTIONS.
Stock Options may be granted alone or in addition
to other Awards granted under the Plan and may be of two
types: Incentive Stock Options and Non-Qualified Stock Op-
tions. Any Stock Option granted under the Plan shall be in
such form as the Committee may from time to time approve.
The Committee shall have the authority to grant any
optionee Incentive Stock Options, Non-Qualified Stock Options
or both types of Stock Options (in each case with or without
Stock Appreciation Rights). Incentive Stock Options may be
granted only to employees of the Company and its subsidiaries
(within the meaning of Section 424(f) of the Code). To the
extent that any Stock Option is not designated as an Incen-
tive Stock Option or even if so designated does not qualify
as an Incentive Stock Option, it shall constitute a Non-
Qualified Stock Option.
Stock Options shall be evidenced by option agree-
ments, the terms and provisions of which may differ. An op-
tion agreement shall indicate on its face whether it is in-
tended to be an agreement for an Incentive Stock Option or a
Non-Qualified Stock Option. The grant of a Stock Option
shall occur on the date the Committee by resolution selects
an individual to be a participant in any grant of a Stock
Option, determines the number of shares of Stock to be sub-
ject to such Stock Option to be granted to such individual
and specifies the terms and provisions of the Stock Option.
The Company shall notify a participant of any grant of a
Stock Option, and a written option agreement or agreements
shall be duly executed and delivered by the Company to the
participant. Such agreement or agreements shall become ef-
fective upon execution by the participant.
Anything in the Plan to the contrary notwithstand-
ing, no term of the Plan relating to Incentive Stock Options
shall be interpreted, amended or altered nor shall any dis-
cretion or authority granted under the Plan be exercised so
as to disqualify the Plan under Section 422 of the Code or,
without the consent of the optionee affected, to disqualify
any Incentive Stock Option under such Section 422.
Stock Options granted under the Plan shall be sub-
ject to the following terms and conditions and shall contain
such additional terms and conditions as the Committee shall
deem desirable:
(a) Option Price. The option price per share of
Stock purchasable under a Stock Option shall be determined by
the Committee and set forth in the option agreement, and
shall not be less than the Fair Market Value of the Stock
subject to the Stock Option on the date of grant.
-5-<PAGE>
(b) Option Term. The term of each Stock Option
shall be fixed by the Committee, but no Stock Option shall be
exercisable more than 15 years after the date the Stock Op-
tion is granted.
(c) Exercisability. Except as otherwise provided
herein, Stock Options shall be exercisable at such time or
times and subject to such terms and conditions as shall be
determined by the Committee. If the Committee provides that
any Stock Option is exercisable only in installments, the
Committee may at any time waive such installment exercise
provisions, in whole or in part, based on such factors as the
Committee may determine. In addition, the Committee may at
any time, in whole or in part, accelerate the exercisability
of any Stock Option.
(d) Method of Exercise. Subject to the provisions
of this Section 5, Stock Options may be exercised, in whole
or in part, at any time during the option term by giving
written notice of exercise to the Company specifying the num-
ber of shares of Stock subject to the Stock Option to be pur-
chased.
The option price of Stock to be purchased upon ex-
ercise of any Option shall be paid in full in cash (by cer-
tified or bank check or such other instrument as the Company
may accept) or, if and to the extent set forth in the option
agreement, may also be paid by one or more of the following:
(i) in the form of unrestricted Stock already owned by the
optionee (and, in the case of the exercise of a Non-Qualified
Stock Option, Restricted Stock subject to an Award hereunder)
based in any such instance on the Fair Market Value of the
Stock on the date the Stock Option is exercised; provided,
however, that, in the case of an Incentive Stock Option, the
right to make a payment in the form of already owned shares
of Stock may be authorized only at the time the Stock Option
is granted; (ii) by requesting the Company to withhold from
the number of shares of Stock otherwise issuable upon exer-
cise of the Stock Option that number of shares having an ag-
gregate fair market value on the date of exercise equal to
the exercise price for all of the shares of Stock subject to
such exercise; or (iii) by a combination thereof, in each
case in the manner provided in the option agreement.
In the discretion of the Committee, payment for any
shares subject to a Stock Option may also be made by deliver-
ing a properly executed exercise notice to the Company, to-
gether with a copy of irrevocable instructions to a broker to
deliver promptly to the Company the amount of sale or loan
proceeds to pay the purchase price. To facilitate the fore-
going, the Company may enter into agreements for coordinated
procedures with one or more brokerage firms.
-6-<PAGE>
If payment of the option exercise price of a Non-
Qualified Stock Option is made in whole or in part in the
form of Restricted Stock, the number of shares of Stock to be
received upon such exercise equal to the number of shares of
Restricted Stock used for payment of the option exercise
price shall be subject to the same forfeiture restrictions to
which such Restricted Stock was subject, unless otherwise
determined by the Committee.
No shares of Stock shall be issued until full pay-
ment therefor has been made. Subject to any forfeiture re-
strictions that may apply if a Stock Option is exercised us-
ing Restricted Stock, an optionee shall have all of the
rights of a stockholder of the Company holding the Stock that
is subject to such Stock Option (including, if applicable,
the right to vote the shares and the right to receive divi-
dends), when the optionee has given written notice of exer-
cise, has paid in full for such shares and, if requested, has
given the representation described in Section 10(a).
(e) Non-transferability of Stock Options. No
Stock Option shall be transferable by the optionee other than
(i) by will or by the laws of descent and distribution or
(ii) in the case of a Non-Qualified Stock Option, pursuant to
a qualified domestic relations order (as defined in the Code
or Title I of the Employee Retirement Income Security Act of
1974, as amended, or the rules thereunder). All Stock Op-
tions shall be exercisable, during the optionee's lifetime,
only by the optionee or by the guardian or legal representa-
tive of the optionee or, in the case of a Non-Qualified Stock
Option, its alternate payee pursuant to such qualified domes-
tic relations order, it being understood that the terms
"holder" and "optionee" include the guardian and legal repre-
sentative of the optionee named in the option agreement and
any person to whom an option is transferred by will or the
laws of descent and distribution or, in the case of a Non-
Qualified Stock Option, pursuant to a qualified domestic re-
lations order.
(f) Termination by Death. If an optionee's em-
ployment terminates by reason of death, any Stock Option held
by such optionee may thereafter be exercised, to the extent
then exercisable, or on such accelerated basis as the Commit-
tee may determine, for a period of one year (or such other
period as the Committee may specify in the option agreement)
from the date of such death or until the expiration of the
stated term of such Stock Option, whichever period is the
shorter. In the event of termination of employment due to
death, if an Incentive Stock Option is exercised after the
expiration of the exercise periods that apply for purposes of
Section 422 of the Code, such Stock Option will thereafter be
treated as a Non-Qualified Stock Option.
-7-<PAGE>
(g) Termination by Reason of Disability. If an
optionee's employment terminates by reason of Disability, any
Stock Option held by such optionee may thereafter be exer-
cised by the optionee, to the extent it was exercisable at
the time of termination, or on such accelerated basis as the
Committee may determine, for a period of one year (or such
shorter period as the Committee may specify in the option
agreement) from the date of such termination of employment or
until the expiration of the stated term of such Stock Option,
whichever period is the shorter; provided, however, that if
the optionee dies within such one-year period (or such
shorter period), any unexercised Stock Option held by such
optionee shall, notwithstanding the expiration of such three-
year (or such shorter) period, continue to be exercisable to
the extent to which it was exercisable at the time of death
for a period of 12 months from the date of such death or un-
til the expiration of the stated term of such Stock Option,
whichever period is the shorter. In the event of termination
of employment by reason of Disability, if an Incentive Stock
Option is exercised after the expiration of the exercise pe-
riods that apply for purposes of Section 422 of the Code,
such Stock Option will thereafter be treated as a Non-
Qualified Stock Option.
(h) Termination by Reason of Retirement. If an
optionee's employment terminates by reason of Retirement, any
Stock Option held by such optionee may thereafter be exer-
cised by the optionee, to the extent it was exercisable at
the time of such Retirement or on such accelerated basis as
the Committee may determine, for a period of three years (or
such shorter period as the Committee may specify in the op-
tion agreement) from the date of such termination of employ-
ment or until the expiration of the stated term of such Stock
Option, whichever period is the shorter; provided, however,
that if the optionee dies within such three-year (or such
shorter) period, any unexercised Stock Option held by such
optionee shall, notwithstanding the expiration of such three-
year (or such shorter) period, continue to be exercisable to
the extent to which it was exercisable at the time of death
for a period of 12 months from the date of such death or un-
til the expiration of the stated term of such Stock Option,
whichever period is the shorter. In the event of termination
of employment by reason of Retirement, if an Incentive Stock
Option is exercised after the expiration of the exercise pe-
riods that apply for purposes of Section 422 of the Code,
such Stock Option will thereafter be treated as a Non-
Qualified Stock Option.
(i) Other Termination. Unless otherwise deter-
mined by the Committee, if an optionee incurs a Termination
of Employment for any reason other than death, Disability or
Retirement, any Stock Option held by such Optionee shall
thereupon terminate, except that such Stock Option, to the
extent then exercisable, or on such accelerated basis as the
-8-<PAGE>
Committee may determine, may be exercised for the lesser of
three months from the date of such Termination of Employment
or the balance of such Stock Option's term if such Termina-
tion of Employment of the optionee is without Cause; pro-
vided, however, that if the optionee dies within such three-
month period, any unexercised Stock Option held by such op-
tionee shall notwithstanding the expiration of such three-
month period, continue to be exercisable to the extent to
which it was exercisable at the time of death for a period of
12 months from the date of such death or until the expiration
of the stated term of such Stock Option, whichever period is
the shorter. In the event of Termination of Employment for
any reason other than death, Disability or Retirement, if an
Incentive Stock Option is exercised after the expiration of
the exercise periods that apply for purposes of Section 422
of the Code, such Stock Option will thereafter be treated as
a Non-Qualified Stock Option. Unless otherwise determined by
the Committee, for the purposes of the Plan "Cause" shall
mean (i) the conviction of the optionee for committing a fel-
ony under Federal law or the law of the state in which such
action occurred, (ii) dishonesty in the course of fulfilling
the optionee's employment duties or (iii) willful and delib-
erate failure on the part of the optionee to perform his em-
ployment duties in any material respect.
(j) Cashing Out of Stock Option. On receipt of
written notice of exercise, the Committee may elect to cash
out all or part of the portion of the shares of Stock for
which a Stock Option is being exercised by paying the op-
tionee an amount, in cash or Stock, equal to the excess of
the Fair Market Value of the Stock over the option price
times the number of shares of Stock for which to the Option
is being exercised on the effective date of such cash out.
SECTION 6. STOCK APPRECIATION RIGHTS.
(a) Grant and Exercise. Stock Appreciation Rights
may be granted in conjunction with all or part of any Stock
Option granted under the Plan. In the case of a Non-
Qualified Stock Option, such rights may be granted either at
or after the time of grant of such Stock Option. In the case
of an Incentive Stock Option, such rights may be granted only
at the time of grant of such Stock Option. A Stock Apprecia-
tion Right shall terminate and no longer be exercisable upon
the termination or exercise of the related Stock Option.
A Stock Appreciation Right may be exercised by an
optionee in accordance with Section 6(b) by surrendering the
applicable portion of the related Stock Option in accordance
with procedures established by the Committee. Upon such ex-
ercise and surrender, the optionee shall be entitled to re-
ceive an amount determined in the manner prescribed in Sec-
tion 6(b). Stock Options which have been so surrendered
-9-<PAGE>
shall no longer be exercisable to the extent the related
Stock Appreciation Rights have been exercised.
(b) Terms and Conditions. Stock Appreciation
Rights shall be subject to such terms and conditions as shall
be determined by the Committee, including the following:
(i) Stock Appreciation Rights shall be exercisable
only at such time or times and to the extent that the
Stock Options to which they relate are exercisable in
accordance with the provisions of Section 5 and this Sec-
tion 6.
(ii) Upon the exercise of a Stock Appreciation
Right, an optionee shall be entitled to receive an amount
in cash, shares of Stock or both equal in value to the
excess of the Fair Market Value of one share of Stock
over the option price per share specified in the related
Stock Option multiplied by the number of shares in re-
spect of which the Stock Appreciation Right shall have
been exercised, with the Committee having the right to
determine the form of payment.
(iii) Stock Appreciation Rights shall be transfer-
able only to permitted transferees of the underlying
Stock Option in accordance with Section 5(e).
SECTION 7. RESTRICTED STOCK.
(a) Administration. Shares of Restricted Stock
may be awarded either alone or in addition to other Awards
granted under the Plan. The Committee shall determine the
officers and employees to whom and the time or times at which
grants of Restricted Stock will be awarded, the number of
shares to be awarded to any participant, the time or times
within which such Awards may be subject to forfeiture and any
other terms and conditions of the Awards, in addition to
those contained in Section 7(c).
The Committee may condition the grant of Restricted
Stock upon the attainment of specified performance goals of
the participant or of the Company or subsidiary, division or
department of the Company for or within which the participant
is primarily employed or upon such other factors or criteria
as the Committee shall determine. The provisions of Re-
stricted Stock Awards need not be the same with respect to
each recipient.
(b) Awards and Certificates. Shares of Restricted
Stock shall be evidenced in such manner as the Committee may
-10-<PAGE>
deem appropriate, including book-entry registration or issu-
ance of one or more stock certificates. Any certificate is-
sued in respect of shares of Restricted Stock shall be reg-
istered in the name of such participant and shall bear an
appropriate legend referring to the terms, conditions, and
restrictions applicable to such Award, substantially in the
following form:
"The transferability of this certificate
and the shares of stock represented hereby
are subject to the terms and conditions
(including forfeiture) of the Tommy Hil-
figer U.S.A. 1992 Stock Incentive Plan and
a Restricted Stock Agreement. Copies of
such Plan and Agreement are on file at the
offices of Tommy Hilfiger U.S.A., Inc., 25
West 39th Street, New York, New York
10018."
The Committee may require that the certificates evidencing
such shares be held in custody by the Company until the re-
strictions thereon shall have lapsed and that, as a condition
of any Award of Restricted Stock, the participant shall have
delivered a stock power, endorsed in blank, relating to the
Stock covered by such Award.
(c) Terms and Conditions. Shares of Restricted
Stock shall be subject to the following terms and conditions:
(i) Subject to the provisions of the Plan and
the Restricted Stock Agreement referred to in Sec-
tion 7(c)(vi), during a period set by the Committee, com-
mencing with the date of such Award (the "Restriction
Period"), the participant shall not be permitted to sell,
assign, transfer, pledge or otherwise encumber shares of
Restricted Stock. The Committee may provide for the
lapse of such restrictions in installments or otherwise
and may accelerate or waive such restrictions, in whole
or in part, in each case based on period of service, per-
formance of the participant or of the Company or the sub-
sidiary, division or department for which the participant
is employed or such other factors or criteria as the Com-
mittee may determine.
(ii) Except as provided in this paragraph (ii) and
Section 7(c)(i) and the Restricted Stock Agreement, the
participant shall have, with respect to the shares of
Restricted Stock, all of the rights of a stockholder of
the Company holding the class or series of Stock that is
the subject of the Restricted Stock, including, if appli-
cable, the right to vote the shares and the right to re-
ceive any cash dividends. If so determined by the Com-
mittee in the applicable Restricted Stock Agreement and
subject to Section 10(f) of the Plan, (1) cash dividends
-11-<PAGE>
on the shares of Stock that are the subject of the Re-
stricted Stock Award shall be automatically deferred and
reinvested in additional Restricted Stock, and (2) divi-
dends payable in Stock shall be paid in the form of Re-
stricted Stock.
(iii) Except to the extent otherwise provided in
the applicable Restricted Stock Agreement and Sec-
tions 7(c)(i) and 7(c)(iv), upon a participant's Termi-
nation of Employment for any reason during the Restric-
tion Period, all shares still subject to restriction
shall be forfeited by the participant.
(iv) In the event of Termination of Employment of a
participant for any reason (other than for Cause), the
Committee shall have the discretion to waive in whole or
in part any or all remaining restrictions with respect to
any or all of such participant's shares of Restricted
Stock.
(v) If and when the Restriction Period expires
without a prior forfeiture of the Restricted Stock sub-
ject to such Restriction Period, unlegended certificates
for such shares shall be delivered to the participant.
(vi) Each Award shall be confirmed by, and be sub-
ject to the terms of, a Restricted Stock Agreement.
SECTION 8. TERM, AMENDMENT AND TERMINATION.
The Plan will terminate on December 31, 2002. Un-
der the Plan, Awards outstanding as of December 31, 2002
shall not be affected or impaired by the termination of the
Plan.
The Board may amend, alter, or discontinue the
Plan, but no amendment, alteration or discontinuation shall
be made which would impair the rights of an optionee under a
Stock Option or a recipient of a Stock Appreciation Right or
Restricted Stock Award theretofore granted without the
optionee's or recipient's consent.
The Committee may amend the terms of any Stock Op-
tion or other Award theretofore granted, prospectively or
retroactively, but no such amendment shall impair the rights
of any holder without the holder's consent.
SECTION 9. UNFUNDED STATUS OF PLAN.
It is presently intended that the Plan constitute
an "unfunded" plan for incentive and deferred compensation.
The Committee may authorize the creation of trusts or other
-12-<PAGE>
arrangements to meet the obligations created under the Plan
to deliver Stock or make payments; provided, however, that,
unless the Committee otherwise determines, the existence of
such trusts or other arrangements is consistent with the "un-
funded" status of the Plan.
SECTION 10. GENERAL PROVISIONS.
(a) The Committee may require each person purchas-
ing or receiving shares pursuant to an Award to represent to
and agree with the Company in writing that such person is
acquiring the shares without a view to the distribution
thereof. The certificates for such shares may include any
legend which the Committee deems appropriate to reflect any
restrictions on transfer.
All certificates for shares of Stock or other secu-
rities delivered under the Plan shall be subject to such
stock transfer orders and other restrictions as the Committee
may deem advisable under the rules, regulations and other
requirements of the Commission, any stock exchange upon which
the Stock is then listed and any applicable Federal or state
securities law, and the Committee may cause a legend or leg-
ends to be put on any such certificates to make appropriate
reference to such restrictions.
(b) Nothing contained in the Plan shall prevent
the Company or any subsidiary or Affiliate from adopting
other or additional compensation arrangements for its employ-
ees.
(c) The adoption of the Plan shall not confer upon
any employee any right to continued employment nor shall it
interfere in any way with the right of the Company or any
subsidiary or Affiliate to terminate the employment of any
employee at any time.
(d) No later than the date as of which an amount
first becomes includible in the gross income of the partici-
pant for Federal income tax purposes with respect to any
Award under the Plan, the participant shall pay to the Com-
pany, or make arrangements satisfactory to the Company re-
garding the payment of, any Federal, state, local or foreign
taxes of any kind required by law to be withheld with respect
to such amount. Unless otherwise determined by the Commit-
tee, withholding obligations may be settled with Stock, in-
cluding Stock that is part of the Award that gives rise to
the withholding requirement. The obligations of the Company
under the Plan shall be conditional on such payment or ar-
rangements, and the Company, its Subsidiaries and its Affili-
ates shall, to the extent permitted by law, have the right to
deduct any such taxes from any payment otherwise due to the
participant. The Committee may establish such procedures as
-13-<PAGE>
it deems appropriate, including the making of irrevocable
elections, for the settlement of withholding obligations with
Stock.
(e) At the time of grant, the Committee may pro-
vide in connection with any grant made under the Plan that
the shares of Stock received as a result of such grant shall
be subject to a right of first refusal pursuant to which the
participant shall be required to offer to the Company any
shares that the participant wishes to sell at the then Fair
Market Value of the Stock, subject to such other terms and
conditions as the Committee may specify at the time of grant.
(f) The reinvestment of dividends in additional
Restricted Stock at the time of any dividend payment shall
only be permissible if sufficient shares of Stock are avail-
able under Section 3 for such reinvestment (taking into ac-
count then outstanding Stock Options and other Awards).
(g) The Committee shall establish such procedures
as it deems appropriate for a participant to designate a ben-
eficiary to whom any amounts payable in the event of the par-
ticipant's death are to be paid.
(h) The Plan and all Awards made and actions taken
thereunder shall be governed by and construed in accordance
with the laws of Delaware.
SECTION 11. EFFECTIVE DATE OF PLAN.
The Plan shall be effective on the date it is ap-
proved by the shareholders of the Company.
-14-
EXHIBIT 4.2
TOMMY HILFIGER (EASTERN HEMISPHERE) LIMITED
1992 STOCK INCENTIVE PLAN
(Restated to Incorporate All Amendments
through November 1, 1996 and the Effects of the
December 27, 1994 Two-for-One Stock Split)<PAGE>
SECTION 1. PURPOSE; DEFINITIONS.
The purpose of the Plan is to give the Company and
its Affiliates a significant advantage in attracting, retain-
ing and motivating officers, employees and directors and to
provide the Company and its subsidiaries with the ability to
provide incentives more directly linked to the profitability
of the Company's businesses and increases in stockholder
value.
For purposes of the Plan, the following terms are
defined as set forth below:
a. "Affiliate" means a corporation or other enti-
ty controlled by or in control of the Company and designated
by the Committee as such.
b. "Award" means a Stock Appreciation Right,
Stock Option or Restricted Stock.
c. "Board" means the Board of Directors of the
Company.
d. "Cause" has the meaning set forth in Sec-
tion 5(i).
e. "Code" means the Internal Revenue Code of
1986, as amended from time to time, and any successor there-
to.
f. "Committee" means the Committee referred to in
Section 2.
g. "Company" means Tommy Hilfiger (Eastern Hemi-
sphere) Limited, a British Virgin Islands corporation.
h. "Disability" means permanent and total dis-
ability as determined under procedures established by the
Committee for purposes of the Plan.
i. "Fair Market Value" means, as of any given
date, the mean between the highest and lowest reported sales
prices of the Stock on the New York Stock Exchange Composite
Tape or, if not listed on such exchange, on any other na-
tional securities exchange on which the Stock is listed or on
NASDAQ. If there is no regular public trading market for
such Stock, the Fair Market Value of the Stock shall be de-
termined by the Committee in good faith.
j. "Incentive Stock Option" means any Stock Op-
tion intended to be and designated as an "incentive stock
option" within the meaning of Section 422 of the Code.<PAGE>
k. "Non-Qualified Stock Option" means any Stock
Option that is not an Incentive Stock Option.
l. "Plan" means the Tommy Hilfiger (Eastern Hemi-
sphere) Limited 1992 Stock Incentive Plan, as set forth
herein and as hereinafter amended from time to time.
m. "Restricted Stock" means an award granted un-
der Section 7.
n. "Retirement" means retirement from active em-
ployment under a pension plan of the Company, any subsidiary
or Affiliate, or under an employment contract with any of
them, or termination of employment at or after age 55 under
circumstances which the Committee, in its sole discretion,
deems equivalent to retirement.
o. "Stock" means the ordinary shares, par value
$0.01 per share, of Tommy Hilfiger Corporation, a British
Virgin Islands corporation.
p. "Stock Appreciation Right" means a right
granted under Section 6.
q. "Stock Option" means an option granted under
Section 5.
r. "Termination of Employment" means the termina-
tion of the participant's employment with the Company and any
subsidiary or Affiliate. A participant employed by a subsid-
iary or an Affiliate shall also be deemed to incur a Termina-
tion of Employment if the subsidiary or Affiliate ceases to
be such a subsidiary or Affiliate, as the case may be, and
the participant does not immediately thereafter become an
employee of the Company or another subsidiary or Affiliate.
In addition, certain other terms used herein have
definitions given to them in the first place in which they
are used.
SECTION 2. ADMINISTRATION.
The Plan shall be administered by the Compensation
Committee of the Board. If at any time no Committee shall be
in office, the functions of the Committee specified in the
Plan shall be exercised by the Board.
The Committee shall have plenary authority to grant
Awards pursuant to the terms of the Plan to officers, employ-
ees and directors of the Company and its subsidiaries and
Affiliates.
-2-<PAGE>
Among other things, the Committee shall have the
authority, subject to the terms of the Plan:
(a) subject to Section 4, to select the officers,
employees and directors to whom Awards may from time to time
be granted;
(b) to determine whether and to what extent Incen-
tive Stock Options, Non-Qualified Stock Options, Stock Appre-
ciation Rights and Restricted Stock or any combination
thereof are to be granted hereunder;
(c) to determine the number of shares of Stock to
be covered by each Award granted hereunder;
(d) to determine the terms and conditions of any
Award granted hereunder (including, but not limited to, the
option price (subject to Section 5(a)), any vesting restric-
tion or limitation and any vesting acceleration or forfeiture
waiver regarding any Award and the shares of Stock relating
thereto, based on such factors as the Committee shall deter-
mine);
(e) to modify, amend or adjust the terms and con-
ditions of any Award, at any time or from time to time, in-
cluding, but not limited to, with respect to performance
goals and measurements applicable to performance-based Awards
pursuant to the terms of the Plan;
(f) to determine to what extent and under what
circumstances Stock and other amounts payable with respect to
an Award shall be deferred; and
(g) to determine under what circumstances a Stock
Option may be settled in cash or Stock under Section 5(j).
The Committee shall have the authority to adopt,
alter and repeal such administrative rules, guidelines and
practices governing the Plan as it shall, from time to time,
deem advisable, to interpret the terms and provisions of the
Plan and any Award issued under the Plan (and any agreement
relating thereto) and to otherwise supervise the administra-
tion of the Plan.
Any determination made by the Committee or pursuant
to delegated authority pursuant to the provisions of the Plan
with respect to any Award shall be made in the sole discre-
tion of the Committee or such delegate at the time of the
grant of the Award or, unless in contravention of any express
term of the Plan, at any time thereafter. All decisions made
by the Committee or any appropriately delegated officer pur-
suant to the provisions of the Plan shall be final and bind-
ing on all persons, including the Company and Plan partici-
pants.
-3-<PAGE>
SECTION 3. STOCK SUBJECT TO PLAN.
Subject to adjustment as provided herein, the total
number of shares of Stock available for grant under the Plan
shall be 5,470,000 shares of Stock, less the number of shares
of Stock which have been made subject to an Award under the
Tommy Hilfiger U.S.A. 1992 Stock Incentive Plan, as amended
and restated. Shares of Stock subject to an Award under the
Plan may be authorized and unissued shares or may be treasury
shares.
If any shares of Restricted Stock are forfeited for
which the participant did not receive any benefits of owner-
ship (as such phrase is construed by the Commission or its
Staff), or if any Stock Option (and related Stock Apprecia-
tion Right, if any) terminates without being exercised, or if
any Stock Appreciation Right is exercised for cash, shares
subject to such Awards shall again be available for distribu-
tion in connection with Awards under the Plan.
In the event of any merger, reorganization, consol-
idation, recapitalization, stock dividend, stock split, ex-
traordinary distribution with respect to the Stock or other
change in corporate structure affecting the Stock, the Com-
mittee or Board may make such substitution or adjustments in
the aggregate number and kind of shares reserved for issuance
under the Plan, in the number, kind and option price of
shares subject to outstanding Stock Options and Stock Appre-
ciation Rights, in the number and kind of shares subject to
other outstanding Awards granted under the Plan and/or such
other substitution or adjustments in the consideration re-
ceivable upon exercise as it may determine to be appropriate
in its sole discretion; provided, however, that the number of
shares subject to any Award shall always be a whole number.
Such adjusted option price shall also be used to determine
the amount payable by the Company upon the exercise of any
Stock Appreciation Right associated with any Stock Option.
SECTION 4. ELIGIBILITY.
Officers, employees and directors of the Company,
its subsidiaries and Affiliates who are responsible for or
contribute to the management, growth and profitability of the
business of the Company, its subsidiaries and Affiliates are
eligible to be granted Awards under the Plan. No grant shall
be made to Thomas J. Hilfiger, Joel J. Horowitz, Silas K.F.
Chou, Ronald K.Y. Chao, Lawrence S. Stroll or Edwin H. Lewis
pursuant to this Plan.
-4-<PAGE>
SECTION 5. STOCK OPTIONS.
Stock Options may be granted alone or in addition
to other Awards granted under the Plan and may be of two
types: Incentive Stock Options and Non-Qualified Stock Op-
tions. Any Stock Option granted under the Plan shall be in
such form as the Committee may from time to time approve.
The Committee shall have the authority to grant any
optionee Incentive Stock Options, Non-Qualified Stock Options
or both types of Stock Options (in each case with or without
Stock Appreciation Rights). Incentive Stock Options may be
granted only to employees of the Company and its subsidiaries
(within the meaning of Section 424(f) of the Code). To the
extent that any Stock Option is not designated as an Incen-
tive Stock Option or even if so designated does not qualify
as an Incentive Stock Option, it shall constitute a Non-
Qualified Stock Option.
Stock Options shall be evidenced by option agree-
ments, the terms and provisions of which may differ. An op-
tion agreement shall indicate on its face whether it is in-
tended to be an agreement for an Incentive Stock Option or a
Non-Qualified Stock Option. The grant of a Stock Option
shall occur on the date the Committee by resolution selects
an individual to be a participant in any grant of a Stock
Option, determines the number of shares of Stock to be sub-
ject to such Stock Option to be granted to such individual
and specifies the terms and provisions of the Stock Option.
The Company shall notify a participant of any grant of a
Stock Option, and a written option agreement or agreements
shall be duly executed and delivered by the Company to the
participant. Such agreement or agreements shall become ef-
fective upon execution by the participant.
Anything in the Plan to the contrary notwithstand-
ing, no term of the Plan relating to Incentive Stock Options
shall be interpreted, amended or altered nor shall any dis-
cretion or authority granted under the Plan be exercised so
as to disqualify the Plan under Section 422 of the Code or,
without the consent of the optionee affected, to disqualify
any Incentive Stock Option under such Section 422.
Stock Options granted under the Plan shall be sub-
ject to the following terms and conditions and shall contain
such additional terms and conditions as the Committee shall
deem desirable:
(a) Option Price. The option price per share of
Stock purchasable under a Stock Option shall be determined by
the Committee and set forth in the option agreement, and
shall not be less than the Fair Market Value of the Stock
subject to the Stock Option on the date of grant.
-5-<PAGE>
(b) Option Term. The term of each Stock Option
shall be fixed by the Committee, but no Stock Option shall be
exercisable more than 15 years after the date the Stock Op-
tion is granted.
(c) Exercisability. Except as otherwise provided
herein, Stock Options shall be exercisable at such time or
times and subject to such terms and conditions as shall be
determined by the Committee. If the Committee provides that
any Stock Option is exercisable only in installments, the
Committee may at any time waive such installment exercise
provisions, in whole or in part, based on such factors as the
Committee may determine. In addition, the Committee may at
any time, in whole or in part, accelerate the exercisability
of any Stock Option.
(d) Method of Exercise. Subject to the provisions
of this Section 5, Stock Options may be exercised, in whole
or in part, at any time during the option term by giving
written notice of exercise to the Company specifying the num-
ber of shares of Stock subject to the Stock Option to be pur-
chased.
The option price of Stock to be purchased upon ex-
ercise of any Option shall be paid in full in cash (by certi-
fied or bank check or such other instrument as the Company
may accept) or, if and to the extent set forth in the option
agreement, may also be paid by one or more of the following:
(i) in the form of unrestricted Stock already owned by the
optionee (and, in the case of the exercise of a Non-Qualified
Stock Option, Restricted Stock subject to an Award hereunder)
based in any such instance on the Fair Market Value of the
Stock on the date the Stock Option is exercised; provided,
however, that, in the case of an Incentive Stock Option, the
right to make a payment in the form of already owned shares
of Stock may be authorized only at the time the Stock Option
is granted; (ii) by requesting the Company to withhold from
the number of shares of Stock otherwise issuable upon exer-
cise of the Stock Option that number of shares having an ag-
gregate fair market value on the date of exercise equal to
the exercise price for all of the shares of Stock subject to
such exercise; or (iii) by a combination thereof, in each
case in the manner provided in the option agreement.
In the discretion of the Committee, payment for any
shares subject to a Stock Option may also be made by deliver-
ing a properly executed exercise notice to the Company, to-
gether with a copy of irrevocable instructions to a broker to
deliver promptly to the Company the amount of sale or loan
proceeds to pay the purchase price. To facilitate the fore-
going, the Company may enter into agreements for coordinated
procedures with one or more brokerage firms.
-6-<PAGE>
If payment of the option exercise price of a Non-
Qualified Stock Option is made in whole or in part in the
form of Restricted Stock, the number of shares of Stock to be
received upon such exercise equal to the number of shares of
Restricted Stock used for payment of the option exercise
price shall be subject to the same forfeiture restrictions to
which such Restricted Stock was subject, unless otherwise
determined by the Committee.
No shares of Stock shall be issued until full pay-
ment therefor has been made. Subject to any forfeiture re-
strictions that may apply if a Stock Option is exercised us-
ing Restricted Stock, an optionee shall have all of the
rights of a stockholder of the Company holding the Stock that
is subject to such Stock Option (including, if applicable,
the right to vote the shares and the right to receive divi-
dends), when the optionee has given written notice of exer-
cise, has paid in full for such shares and, if requested, has
given the representation described in Section 10(a).
(e) Non-transferability of Stock Options. No
Stock Option shall be transferable by the optionee other than
(i) by will or by the laws of descent and distribution or
(ii) in the case of a Non-Qualified Stock Option, pursuant to
a qualified domestic relations order (as defined in the Code
or Title I of the Employee Retirement Income Security Act of
1974, as amended, or the rules thereunder). All Stock Op-
tions shall be exercisable, during the optionee's lifetime,
only by the optionee or by the guardian or legal representa-
tive of the optionee or, in the case of a Non-Qualified Stock
Option, its alternate payee pursuant to such qualified domes-
tic relations order, it being understood that the terms
"holder" and "optionee" include the guardian and legal repre-
sentative of the optionee named in the option agreement and
any person to whom an option is transferred by will or the
laws of descent and distribution or, in the case of a Non-
Qualified Stock Option, pursuant to a qualified domestic re-
lations order.
(f) Termination by Death. If an optionee's em-
ployment terminates by reason of death, any Stock Option held
by such optionee may thereafter be exercised, to the extent
then exercisable, or on such accelerated basis as the Commit-
tee may determine, for a period of one year (or such other
period as the Committee may specify in the option agreement)
from the date of such death or until the expiration of the
stated term of such Stock Option, whichever period is the
shorter. In the event of termination of employment due to
death, if an Incentive Stock Option is exercised after the
expiration of the exercise periods that apply for purposes of
Section 422 of the Code, such Stock Option will thereafter be
treated as a Non-Qualified Stock Option.
-7-<PAGE>
(g) Termination by Reason of Disability. If an
optionee's employment terminates by reason of Disability, any
Stock Option held by such optionee may thereafter be exer-
cised by the optionee, to the extent it was exercisable at
the time of termination, or on such accelerated basis as the
Committee may determine, for a period of one year (or such
shorter period as the Committee may specify in the option
agreement) from the date of such termination of employment or
until the expiration of the stated term of such Stock Option,
whichever period is the shorter; provided, however, that if
the optionee dies within such one-year period (or such
shorter period), any unexercised Stock Option held by such
optionee shall, notwithstanding the expiration of such three-
year (or such shorter) period, continue to be exercisable to
the extent to which it was exercisable at the time of death
for a period of 12 months from the date of such death or un-
til the expiration of the stated term of such Stock Option,
whichever period is the shorter. In the event of termination
of employment by reason of Disability, if an Incentive Stock
Option is exercised after the expiration of the exercise pe-
riods that apply for purposes of Section 422 of the Code,
such Stock Option will thereafter be treated as a Non-
Qualified Stock Option.
(h) Termination by Reason of Retirement. If an
optionee's employment terminates by reason of Retirement, any
Stock Option held by such optionee may thereafter be exer-
cised by the optionee, to the extent it was exercisable at
the time of such Retirement or on such accelerated basis as
the Committee may determine, for a period of three years (or
such shorter period as the Committee may specify in the op-
tion agreement) from the date of such termination of employ-
ment or until the expiration of the stated term of such Stock
Option, whichever period is the shorter; provided, however,
that if the optionee dies within such three-year (or such
shorter) period, any unexercised Stock Option held by such
optionee shall, notwithstanding the expiration of such three-
year (or such shorter) period, continue to be exercisable to
the extent to which it was exercisable at the time of death
for a period of 12 months from the date of such death or un-
til the expiration of the stated term of such Stock Option,
whichever period is the shorter. In the event of termination
of employment by reason of Retirement, if an Incentive Stock
Option is exercised after the expiration of the exercise pe-
riods that apply for purposes of Section 422 of the Code,
such Stock Option will thereafter be treated as a Non-
Qualified Stock Option.
(i) Other Termination. Unless otherwise deter-
mined by the Committee, if an optionee incurs a Termination
of Employment for any reason other than death, Disability or
Retirement, any Stock Option held by such Optionee shall
thereupon terminate, except that such Stock Option, to the
extent then exercisable, or on such accelerated basis as the
-8-<PAGE>
Committee may determine, may be exercised for the lesser of
three months from the date of such Termination of Employment
or the balance of such Stock Option's term if such Termina-
tion of Employment of the optionee is without Cause; pro-
vided, however, that if the optionee dies within such three-
month period, any unexercised Stock Option held by such op-
tionee shall notwithstanding the expiration of such three-
month period, continue to be exercisable to the extent to
which it was exercisable at the time of death for a period of
12 months from the date of such death or until the expiration
of the stated term of such Stock Option, whichever period is
the shorter. In the event of Termination of Employment for
any reason other than death, Disability or Retirement, if an
Incentive Stock Option is exercised after the expiration of
the exercise periods that apply for purposes of Section 422
of the Code, such Stock Option will thereafter be treated as
a Non-Qualified Stock Option. Unless otherwise determined by
the Committee, for the purposes of the Plan "Cause" shall
mean (i) the conviction of the optionee for committing a fel-
ony under Federal law or the law of the state in which such
action occurred, (ii) dishonesty in the course of fulfilling
the optionee's employment duties or (iii) willful and delib-
erate failure on the part of the optionee to perform his em-
ployment duties in any material respect.
(j) Cashing Out of Stock Option. On receipt of
written notice of exercise, the Committee may elect to cash
out all or part of the portion of the shares of Stock for
which a Stock Option is being exercised by paying the op-
tionee an amount, in cash or Stock, equal to the excess of
the Fair Market Value of the Stock over the option price
times the number of shares of Stock for which to the Option
is being exercised on the effective date of such cash out.
SECTION 6. STOCK APPRECIATION RIGHTS.
(a) Grant and Exercise. Stock Appreciation Rights
may be granted in conjunction with all or part of any Stock
Option granted under the Plan. In the case of a Non-
Qualified Stock Option, such rights may be granted either at
or after the time of grant of such Stock Option. In the case
of an Incentive Stock Option, such rights may be granted only
at the time of grant of such Stock Option. A Stock Apprecia-
tion Right shall terminate and no longer be exercisable upon
the termination or exercise of the related Stock Option.
A Stock Appreciation Right may be exercised by an
optionee in accordance with Section 6(b) by surrendering the
applicable portion of the related Stock Option in accordance
with procedures established by the Committee. Upon such ex-
ercise and surrender, the optionee shall be entitled to re-
ceive an amount determined in the manner prescribed in Sec-
tion 6(b). Stock Options which have been so surrendered
-9-<PAGE>
shall no longer be exercisable to the extent the related
Stock Appreciation Rights have been exercised.
(b) Terms and Conditions. Stock Appreciation
Rights shall be subject to such terms and conditions as shall
be determined by the Committee, including the following:
(i) Stock Appreciation Rights shall be exercisable
only at such time or times and to the extent that the
Stock Options to which they relate are exercisable in
accordance with the provisions of Section 5 and this Sec-
tion 6.
(ii) Upon the exercise of a Stock Appreciation
Right, an optionee shall be entitled to receive an amount
in cash, shares of Stock or both equal in value to the
excess of the Fair Market Value of one share of Stock
over the option price per share specified in the related
Stock Option multiplied by the number of shares in re-
spect of which the Stock Appreciation Right shall have
been exercised, with the Committee having the right to
determine the form of payment.
(iii) Stock Appreciation Rights shall be transfer-
able only to permitted transferees of the underlying
Stock Option in accordance with Section 5(e).
SECTION 7. RESTRICTED STOCK.
(a) Administration. Shares of Restricted Stock
may be awarded either alone or in addition to other Awards
granted under the Plan. The Committee shall determine the
officers and employees to whom and the time or times at which
grants of Restricted Stock will be awarded, the number of
shares to be awarded to any participant, the time or times
within which such Awards may be subject to forfeiture and any
other terms and conditions of the Awards, in addition to
those contained in Section 7(c).
The Committee may condition the grant of Restricted
Stock upon the attainment of specified performance goals of
the participant or of the Company or subsidiary, division or
department of the Company for or within which the participant
is primarily employed or upon such other factors or criteria
as the Committee shall determine. The provisions of Re-
stricted Stock Awards need not be the same with respect to
each recipient.
(b) Awards and Certificates. Shares of Restricted
Stock shall be evidenced in such manner as the Committee may
-10-<PAGE>
deem appropriate, including book-entry registration or issu-
ance of one or more stock certificates. Any certificate is-
sued in respect of shares of Restricted Stock shall be regis-
tered in the name of such participant and shall bear an ap-
propriate legend referring to the terms, conditions, and re-
strictions applicable to such Award, substantially in the
following form:
"The transferability of this certificate
and the shares of stock represented hereby
are subject to the terms and conditions
(including forfeiture) of the Tommy Hil-
figer (Eastern Hemisphere) Limited 1992
Stock Incentive Plan and a Restricted
Stock Agreement. Copies of such Plan and
Agreement are on file at the offices of
Tommy Hilfiger (Eastern Hemisphere) Lim-
ited, 6/F, Precious Industrial Centre, 18
Cheung Yue Street, Cheung Sha Wan,
Kowloon, Hong Kong."
The Committee may require that the certificates evidencing
such shares be held in custody by the Company until the re-
strictions thereon shall have lapsed and that, as a condition
of any Award of Restricted Stock, the participant shall have
delivered a stock power, endorsed in blank, relating to the
Stock covered by such Award.
(c) Terms and Conditions. Shares of Restricted
Stock shall be subject to the following terms and conditions:
(i) Subject to the provisions of the Plan and
the Restricted Stock Agreement referred to in Sec-
tion 7(c)(vi), during a period set by the Committee, com-
mencing with the date of such Award (the "Restriction
Period"), the participant shall not be permitted to sell,
assign, transfer, pledge or otherwise encumber shares of
Restricted Stock. The Committee may provide for the
lapse of such restrictions in installments or otherwise
and may accelerate or waive such restrictions, in whole
or in part, in each case based on period of service, per-
formance of the participant or of the Company or the sub-
sidiary, division or department for which the participant
is employed or such other factors or criteria as the Com-
mittee may determine.
(ii) Except as provided in this paragraph (ii) and
Section 7(c)(i) and the Restricted Stock Agreement, the
participant shall have, with respect to the shares of
Restricted Stock, all of the rights of a stockholder of
the Company holding the class or series of Stock that is
-11-<PAGE>
the subject of the Restricted Stock, including, if appli-
cable, the right to vote the shares and the right to re-
ceive any cash dividends. If so determined by the Com-
mittee in the applicable Restricted Stock Agreement and
subject to Section 10(f) of the Plan, (1) cash dividends
on the shares of Stock that are the subject of the Re-
stricted Stock Award shall be automatically deferred and
reinvested in additional Restricted Stock, and (2) divi-
dends payable in Stock shall be paid in the form of Re-
stricted Stock.
(iii) Except to the extent otherwise provided in
the applicable Restricted Stock Agreement and Sec-
tions 7(c)(i) and 7(c)(iv), upon a participant's Ter-
mination of Employment for any reason during the Restric-
tion Period, all shares still subject to restriction
shall be forfeited by the participant.
(iv) In the event of Termination of Employment of a
participant for any reason (other than for Cause), the
Committee shall have the discretion to waive in whole or
in part any or all remaining restrictions with respect to
any or all of such participant's shares of Restricted
Stock.
(v) If and when the Restriction Period expires
without a prior forfeiture of the Restricted Stock sub-
ject to such Restriction Period, unlegended certificates
for such shares shall be delivered to the participant.
(vi) Each Award shall be confirmed by, and be sub-
ject to the terms of, a Restricted Stock Agreement.
SECTION 8. TERM, AMENDMENT AND TERMINATION.
The Plan will terminate on December 31, 2002. Un-
der the Plan, Awards outstanding as of December 31, 2002
shall not be affected or impaired by the termination of the
Plan.
The Board may amend, alter, or discontinue the
Plan, but no amendment, alteration or discontinuation shall
be made which would impair the rights of an optionee under a
Stock Option or a recipient of a Stock Appreciation Right or
Restricted Stock Award theretofore granted without the
optionee's or recipient's consent.
The Committee may amend the terms of any Stock Op-
tion or other Award theretofore granted, prospectively or
retroactively, but no such amendment shall impair the rights
of any holder without the holder's consent.
-12-<PAGE>
SECTION 9. UNFUNDED STATUS OF PLAN.
It is presently intended that the Plan constitute
an "unfunded" plan for incentive and deferred compensation.
The Committee may authorize the creation of trusts or other
arrangements to meet the obligations created under the Plan
to deliver Stock or make payments; provided, however, that,
unless the Committee otherwise determines, the existence of
such trusts or other arrangements is consistent with the "un-
funded" status of the Plan.
SECTION 10. GENERAL PROVISIONS.
(a) The Committee may require each person purchas-
ing or receiving shares pursuant to an Award to represent to
and agree with the Company in writing that such person is
acquiring the shares without a view to the distribution
thereof. The certificates for such shares may include any
legend which the Committee deems appropriate to reflect any
restrictions on transfer.
All certificates for shares of Stock or other secu-
rities delivered under the Plan shall be subject to such
stock transfer orders and other restrictions as the Committee
may deem advisable under the rules, regulations and other
requirements of the Commission, any stock exchange upon which
the Stock is then listed and any applicable Federal or state
securities law, and the Committee may cause a legend or leg-
ends to be put on any such certificates to make appropriate
reference to such restrictions.
(b) Nothing contained in the Plan shall prevent
the Company or any subsidiary or Affiliate from adopting
other or additional compensation arrangements for its employ-
ees.
(c) The adoption of the Plan shall not confer upon
any employee any right to continued employment nor shall it
interfere in any way with the right of the Company or any
subsidiary or Affiliate to terminate the employment of any
employee at any time.
(d) No later than the date as of which an amount
first becomes includible in the gross income of the partici-
pant for Federal income tax purposes with respect to any
Award under the Plan, the participant shall pay to the Com-
pany, or make arrangements satisfactory to the Company re-
garding the payment of, any Federal, state, local or foreign
taxes of any kind required by law to be withheld with respect
to such amount. Unless otherwise determined by the Commit-
tee, withholding obligations may be settled with Stock, in-
cluding Stock that is part of the Award that gives rise to
the withholding requirement. The obligations of the Company
-13-<PAGE>
under the Plan shall be conditional on such payment or ar-
rangements, and the Company, its Subsidiaries and its Affili-
ates shall, to the extent permitted by law, have the right to
deduct any such taxes from any payment otherwise due to the
participant. The Committee may establish such procedures as
it deems appropriate, including the making of irrevocable
elections, for the settlement of withholding obligations with
Stock.
(e) At the time of grant, the Committee may pro-
vide in connection with any grant made under the Plan that
the shares of Stock received as a result of such grant shall
be subject to a right of first refusal pursuant to which the
participant shall be required to offer to the Company any
shares that the participant wishes to sell at the then Fair
Market Value of the Stock, subject to such other terms and
conditions as the Committee may specify at the time of grant.
(f) The reinvestment of dividends in additional
Restricted Stock at the time of any dividend payment shall
only be permissible if sufficient shares of Stock are avail-
able under Section 3 for such reinvestment (taking into ac-
count then outstanding Stock Options and other Awards).
(g) The Committee shall establish such procedures
as it deems appropriate for a participant to designate a ben-
eficiary to whom any amounts payable in the event of the par-
ticipant's death are to be paid.
(h) The Plan and all Awards made and actions taken
thereunder shall be governed by and construed in accordance
with the laws of the British Virgin Islands.
SECTION 11. EFFECTIVE DATE OF PLAN.
The Plan shall be effective on the date it is ap-
proved by the shareholders of the Company.
-14-
EXHIBIT 5
[Letterhead of Harney, Westwood & Riegels]
Your Ref:
Our Ref: HDH/as/005-5590.002 31st January, 1997
Securities Exchange Commission
Division of Corporation Finance
Washington, D.C. 20549
U.S.A.
Dear Sirs,
Re: REGISTRATION STATEMENT ON FORM S-8 FILED BY
TOMMY HILFIGER CORPORATION RELATING TO THE
TOMMY HILFIGER U.S.A. AND TOMMY HILFIGER
(EASTERN HEMISPHERE) LIMITED 1992 STOCK INCENTIVE PLANS
We are British Virgin Islands counsel to Tommy Hilfiger Corpo-
ration, a company incorporated under the laws of the British
Virgin Islands (hereinafter called the "Company"), in connec-
tion with the registration under the Securities Act of 1933, as
amended (the "Act"), of the Ordinary Shares, par value $.01 per
share (the "Ordinary Shares"), of the Company issuable under
the Tommy Hilfiger U.S.A. 1992 Stock Incentive Plan, as amended
and restated, and the Tommy Hilfiger (Eastern Hemisphere) Lim-
ited 1992 Stock Incentive Plan, as amended and restated (to-
gether the "Plans").
For the purpose of this opinion, we have examined originals or
copies of the Plans, the Memorandum and Articles of Association
of the Company, and such other corporate documents and records
of the Company as we have deemed relevant and necessary as a
basis for this opinion.
For purposes of this opinion we have assumed the genuineness of
all signatures on all documents and the completeness, and the
conformity to original documents, of all copies submitted to us
and that all representations of fact (other than those opined
on below) expressed in or implied by the documents are accu-
rate.
On the basis of the foregoing, we are of the opinion that the
5,470,000 Ordinary Shares of the Company when issued pursuant<PAGE>
Securities Exchange Commission
Division of Corporation Finance
Page 2
31st January, 1997
to the terms of the Plans will be validly issued, fully paid
and non assessable.
We hereby consent to the filing of this opinion as an exhibit
to Registration Statement on Form S-8 relating to the Plans.
Yours faithfully,
HARNEY, WESTWOOD & RIEGELS
/s/ Hazel-Dawn Hewlett
Hazel-Dawn Hewlett
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-8 of our report dated May 20,
1996, appearing on page F-2 of the Tommy Hilfiger Corporation
Annual Report on Form 10-K for the fiscal year ended March 31,
1996.
/s/ Price Waterhouse LLP
PRICE WATERHOUSE LLP
New York, New York
January 31, 1997
