SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
--------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Tiffany & Co.
(Exact Name of Registrant as Specified in Its Charter)
Delaware
(State or Other Jurisdiction of Incorporation or Organization)
13-3228013
(I.R.S. Employer Identification No.)
727 Fifth Avenue
New York, New York 10022
(Address of Principal Executive Offices)
1998 Employee Incentive Plan
(Full Title of the Plan)
Patrick B. Dorsey, Esq.
Senior Vice President - General Counsel
Tiffany & Co.
727 Fifth Avenue
New York, New York 10022
(Name and Address of Agent For Service)
(212) 755-8000
(Telephone Number, Including Area Code, of Agent For Service)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
=============== =============== ================ ================= ================
<S> <C> <C> <C> <C>
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Per Offering Registration
Registered Registered Share (1) Price (1) Fee
=============== =============== ================= ================== ===============
Common Stock 1,750,000 $39.34375 $68,851,562.00 $20,311.21
=============== =============== ================= ================== ===============
</TABLE>
(1) These amounts have been estimated solely for the purpose of calculating the
registration fee. Pursuant to Rule 457(c), these amounts have been computed on
the basis of the average of the high and low prices for the Registrant's Common
Stock reported on the New York Exchange Composite Tape for November 16, 1998, a
date within five days prior to the date of filing of this Registration
Statement.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
Item 1. Plan Information*
Item 2. Registrant Information and Employee Plan Annual Information*
* Information required by Part I to be contained in the Section 10(a)
prospectus is omitted from this Registration Statement in accordance
with Rule 428 under the Securities Act of 1933 and the Note to Part I
of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference
The following documents which have heretofore been filed by the Registrant with
the Securities and Exchange Commission (the "Commission") pursuant to the
Securities Act of 1933, as amended (the "1933 Act"), and pursuant to the
Securities Exchange Act of 1934, as amended (the "1934 Act"), are incorporated
by reference herein and shall be deemed to be a part hereof:
1. The Registrant's Annual Report, dated April 9, 1998, filed with the
Commission on Form 10-K for the fiscal year ended January 31, 1998;
2. The Registrant's Quarterly Report, dated August 28, 1998, filed with
the Commission on Form 10-Q for the fiscal quarter ended July 31, 1998;
and
3. Description of the Registrant's Common Stock contained in the
Registration Statement filed with the Commission on Form S-1
(Registration No. 33-12818), as most recently amended on May 5, 1987,
including the Prospectus for the Registrant's Common Stock dated May 5,
1987, as supplemented by the Registration Statement dated November 18,
1988, filed with the Commission on Form 8-A and the Registrant's Report
on Form 8-A/A dated September 25, 1998.
All documents filed by the Registrant pursuant to Sections 13(a), 13(c), 14 or
15(d) of the 1934 Act, prior to the filing of a post-effective amendment to this
Registration Statement which indicates that all securities offered hereby have
been sold or which deregisters all such securities then remaining unsold, shall
be deemed to be incorporated by reference in this Registration Statement and
made part hereof from their respective dates of filing (such documents, and the
documents listed above, being hereinafter referred to as "Incorporated
Documents"); provided, however, that the documents enumerated above or
subsequently filed by the Registrant pursuant to Sections 13(a), 13(c), 14 and
15(d) of the 1934 Act in each year during which the offering made by this
Registration Statement is in effect prior to the filing with the Commission of
the Registrant's Annual Report on Form 10-K covering such year shall not be
Incorporated Documents or be incorporated by reference in this Registration
Statement or be a part hereof from and after the filing of such Annual Report on
Form 10-K.
<PAGE>
Any statement contained herein or in an Incorporated Document shall be deemed to
be modified or superseded for purposes of this Registration Statement to the
extent that a statement contained herein or in any other subsequently filed
Incorporated Document modifies or supersedes such statement. Any such statement
so modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Registration Statement.
The Registrant will provide without charge to each person to whom a copy of the
Prospectus is delivered, upon written or oral request of such person, a copy of
any or all of the documents referred to in this Item 3 of Part II which have
been or may be incorporated by reference in this Registration Statement, other
than exhibits thereto (unless such exhibits are specifically incorporated by
reference in such documents). Requests for such copies should be directed to
Tarz F. Palomba, Assistant Secretary, Tiffany & Co., 727 Fifth Avenue, New York,
New York 10022; telephone (212) 605-4195. Additional updating information with
respect to the securities and plan covered herein may be provided in the future
by means of supplements to the Prospectus.
Item 4. Description of Securities.
Not required.
Item 5. Interests of Named Experts and Counsel
The legality of the shares of Common Stock being offered hereby has been passed
upon by Patrick B. Dorsey, Senior Vice President, General Counsel and Secretary
of the Registrant. As of the date of this Registration Statement, Mr. Dorsey
owned 7,600 shares of Common Stock and options to purchase up to 66,000
additional shares, of which options to acquire 43,500 shares are presently
exercisable.
Item 6. Indemnification of Directors and Officers
The Delaware Corporation Law (Section 145 of Title 8) permits indemnification of
directors, officers and employees in certain circumstances and subject to
certain limitations. The Registrant's Restated Certificate of Incorporation,
By-Laws and the Indemnity Agreement adopted by the Board of Directors on March
19, 1987, provide for indemnification of its directors, officers, employees and
other agents. In addition, the Registrant has purchased insurance policies that
provide coverage for its directors and officers in certain situations.
Insofar as indemnification for liabilities arising under the 1933 Act may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the 1933 Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the 1933 Act and will be governed by the final
adjudication of such issue.
<PAGE>
Item 7. Exemption from Registration Claimed
Not applicable.
Item 8. Exhibits
See Index to Exhibits on page 7.
Item 9. Undertakings
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement to include any
material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the Registration Statement;
(2) That, for the purpose of determining liability under the 1933 Act,
each such post-effective amendment shall be deemed to be a new Registration
Statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof; and
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
The undersigned Registrant hereby further undertakes that, for the purposes of
determining any liability under the 1933 Act, each filing of the Registrant's
annual report pursuant to Section 13(a) or 15(d) of the 1934 Act (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the 1934 Act) that is incorporated by reference in the
registration statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
The undersigned Registrant hereby further undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the 1934 Act; and, where interim
financial information required to be presented by Article 3 of Regulation S-X is
not set forth in the prospectus, to deliver, or cause to be delivered, to each
person to whom the prospectus is sent or given, the latest quarterly report that
is specifically incorporated by reference in the prospectus to provide such
interim financial information.
<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
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York and State of New York, on the 18th day of
November, 1998.
TIFFANY & CO.
(Registrant)
/s/ William R. Chaney
By:_____________________________
(William R. Chaney, Chairman of the
Board and Chief Executive Officer)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints WILLIAM R. CHANEY, JAMES N. FERNANDEZ and
PATRICK B. DORSEY his true and lawful attorneys-in-fact and agents, each acting
alone, with full powers of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign this Registration
Statement and any or all amendments to the Registration Statement, including
pre-effective and post-effective amendments, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto such attorneys-in-fact and
agents, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do, and hereby ratifies and confirms
all his said attorneys-in-fact and agents, each acting alone, or his substitute
or substitutes, may lawfully do or cause to be done by virtue hereof.
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/ William R. Chaney
________________________ Chairman of the Board and September 17,1998
William R. Chaney Chief Executive Officer
(principal executive officer)
(director)
/S/ James N. Fernandez
________________________ Executive Vice President and September 17,1998
James N. Fernandez Chief Financial Officer
(principal financial officer)
<PAGE>
/S/ Warren S. Feld
________________________ Vice President - Controller September 17,1998
Warren S. Feld (principal accounting officer
/s/ Rose Marie Bravo
________________________ Director September 17, 1998
Rose Marie Bravo
/s/ Samuel L Hayes, III
________________________ Director September 17, 1998
Samuel L Hayes, III
/s/ Michael J. Kowalski
________________________ President
Michael J. Kowalski (director) September 17, 1998
/s/ Charles K. Marquis
________________________ Director September 17, 1998
Charles K. Marquis
/s/ James E. Quinn
________________________ Vice Chairman September 17, 1998
James E. Quinn (director)
_______________________ Director September 17, 1998
Yoshiaka Sakakura
/s/ William A. Shutzer Director September 17, 1998
_______________________
William A. Shutzer
/s/ Geraldine Stutz
_______________________ Director September 17, 1998
Geraldine Stutz
<PAGE>
EXHIBIT INDEX
Each exhibit is listed according to the number assigned to it in the
Exhibit Table of Item 601 of Regulation S-K. The exhibit numbers preceded by an
asterisk (*) indicate exhibits physically filed with this Registration
Statement. All other exhibit numbers indicate exhibits filed by incorporation by
reference herein.
Exhibit Number Description
4.1 Restated Certificate of Incorporation of the
Registrant (incorporated by reference to
Exhibit 3.1 to Registrant's Report on Form
8-K dated May 16, 1996)
4.2 By-Laws of the Registrant (incorporated by
reference to Exhibit 3.2 to Registrant's
Report on Form 10-K for the fiscal year
ended January 31, 1998)
*4.3 Registrant's 1998 Employee Incentive Plan and
standard terms of stock option award (transferable
and non-transferable)
4.4 Amended and Restated Rights
Agreement dated as of September 22,
1998, by and between Registrant and
Chase Mellon Shareholder Services, L.L.C.,
as Rights Agent, (incorporated by reference
to Exhibit 4.1.1 to Registrant's Report on
Form 8-A/A dated September 25, 1998)
*5.1 Opinion of counsel, including consent
*23.1 Consent of Independent Accountants
*23.2 Consent of counsel (included in Exhibit 5.1)
*24.1 Power of Attorney (included at page 5)
EXHIBIT 4.3
TIFFANY & CO.
1998 EMPLOYEE INCENTIVE PLAN
Section 1
General
1.1 Purpose. The Tiffany & Co. Employee Incentive Plan (the "Plan") has
been established by Tiffany & Co., a Delaware corporation, (the "Company") to
(i) attract and retain employees; (ii) motivate Participants to achieve the
Company's operating and strategic goals by means of appropriate incentives;
(iii) provide incentive compensation opportunities that are competitive with
those of other companies competing with the Company and its Related Companies
for employees; and (iv) further link Participants' interests with those of the
Company's other stockholders through compensation that is based on the Company's
Common Stock, thereby promoting the long-term financial interests of the Company
and its Related Companies, including the growth in value of the Company's
stockholders' equity and the enhancement of long-term returns to the Company's
stockholders.
1.2 Participation. Subject to the terms and conditions of the Plan, the
Committee shall, from time to time, determine and designate from among Eligible
Individuals those persons who will be granted one or more Awards under the Plan.
Eligible Individuals who are granted Awards become "Participants" in the Plan.
In the discretion of the Committee, a Participant may be granted any Award
permitted under the provisions of the Plan, and more than one Award may be
granted to a Participant. Awards need not be identical but shall be subject to
the terms and conditions specified in the Plan. Subject to the last two
sentences of subsection 2.2 of the Plan, Awards may be granted as alternatives
to or in replacement for awards outstanding under the Plan, or any other plan or
arrangement of the Company or a Related Company (including a plan or arrangement
of a business or entity, all or a portion of which is acquired by the Company or
a Related Company).
1.3 Operation, Administration, and Definitions. The operation and
administration of the Plan, including the Awards made under the Plan, shall be
subject to the provisions of Section 4 (relating to operation and
administration). Initially capitalized terms used in the Plan shall be defined
as set forth in the Plan (including in the definitional provisions of Section 7
of the Plan).
Section 2
Options and SARs
2.1 Definitions.
(a) The grant of an "Option" entitles the Participant to purchase
Shares at an Exercise Price established by the Committee. Options
granted under this Section 2 may be either Incentive Stock
Options or Non-Qualified Stock Options, as determined in the
discretion of the Committee. An "Incentive
1998 EMPLOYEE INCENTIVE PLAN Page 1
May 21, 1998
<PAGE>
Stock Option" is an Option that is intended to satisfy the
requirements applicable to an "incentive stock option" described
in section 422(b) of the Code. A "Non-Qualified Option" is an
Option that is not intended to be an "incentive stock option" as
that term is described in section 422(b) of the Code.
(b) The grant of a stock appreciation right (an "SAR") entitles the
Participant to receive, in cash or Shares, value equal to all or
a portion of the excess of: (a) Fair Market Value of a specified
number of Shares at the time of exercise, over (b) an Exercise
Price established by the Committee.
2.2 Exercise Price. The per-Share "Exercise Price" of each Option and
SAR granted under this Section 2 shall be established by the Committee or shall
be determined by a formula established by the Committee at the time the Option
or SAR is granted; except that the Exercise Price shall not be less than 100% of
the Fair Market Value of a Share as of the Pricing Date. For purposes of the
preceding sentence, the "Pricing Date" shall be the date on which the Option or
SAR is granted unless the Option or SAR is granted on a date on which the
principal exchange on which the Shares are then listed or admitted to trading is
closed for trading, in which case the "Pricing Date" shall be the most recent
date on which such exchange was open for trading prior to such grant date;
except that the Committee may provide that: (i) the Pricing Date is the date on
which the recipient is hired or promoted (or similar event), if the grant of the
Option or SAR occurs not more than 90 days after the date of such hiring,
promotion or other event; and (ii) if an Option or SAR is granted in tandem
with, or in substitution for, an outstanding Award, the Pricing Date is the date
of grant of such outstanding Award. Except as provided in subsection 4.2(c), the
Exercise Price of any Option or SAR may not be decreased after the grant of the
Award. Neither an Option nor an SAR may be surrendered as consideration in
exchange for a new Award with a lower Exercise Price.
2.3 Exercise. Options and SARs shall be exercisable in accordance with
such terms and conditions and during such periods as may be established by the
Committee provided that no Option or SAR shall be exercisable after, and each
Option and SAR shall become void no later than, the tenth (10th) anniversary
date of the date of grant of such Option or SAR.
2.4 Payment of Option Exercise Price. The payment of the Exercise Price
of an Option granted under this Section 2 shall be subject to the following:
(a) The Exercise Price may be paid by ordinary check or such other
form of tender as the Committee may specify.
(b) If permitted by the Committee, the Exercise Price for Shares
purchased upon the exercise of an Option may be paid in part or
in full by tendering Shares (by either actual delivery of Shares
or by attestation, with such Shares valued at Fair Market Value
as of the date of exercise). The
1998 EMPLOYEE INCENTIVE PLAN Page 2
May 21, 1998
<PAGE>
Committee may refuse to accept payment in Shares if such payment
would result in an accounting charge to the Company.
(c) The Committee may permit a Participant to elect to pay the
Exercise Price upon the exercise of an Option by irrevocably
authorizing a third party to sell Shares acquired upon exercise
of the Option (or a sufficient portion of such Shares) and remit
to the Company a sufficient portion of the sale proceeds to pay
the entire Exercise Price and any tax withholding resulting from
such exercise.
Section 3
Other Stock Awards
3.1 Definition. A "Stock Award" is a grant of Shares or of a right to
receive Shares (or their cash equivalent or a combination of both).
3.2 Restrictions on Stock Awards. Each Stock Award shall be subject to
such conditions, restrictions and contingencies as the Committee shall
determine. These may include continuous service and/or the achievement of
Performance Goals.
Section 4
Operation and Administration
4.1 Effective Date and Duration. Subject to approval of the
stockholders of the Company at the Company's 1998 annual meeting, the Plan shall
be effective as of May 1, 1998 (the "Effective Date") and shall remain in effect
as long as any Awards under the Plan are outstanding; provided, however, that,
no Award may be granted or otherwise made under the Plan on a date that is more
than ten (10) years from the date the Plan is adopted or, if earlier, the date
the Plan is approved by the Company's stockholders.
4.2 Shares Subject to Plan.
(a) (i) Subject to the following provisions of this subsection
4.2, the maximum number of Shares that may be delivered to
Participants and their beneficiaries under the Plan shall be
equal to the sum of: (I) One Million (1,000,000) Shares; (II)
any Shares available for future awards under the Company's
1986 Stock Option Plan, as amended (the "1986 Plan") as of
May 1, 1998; (III) any Shares that are represented by awards
granted under the 1986 Plan which are forfeited, expire or are
canceled without delivery of Shares or which result in the
forfeiture of Shares back to the Company; and (IV) up to Two
Hundred and Fifty Thousand (250,000) Shares, to the extent
authorized by the Board, which are reacquired in the open
market or in a private transaction after the Effective Date,
provided, however that the aggregate number of shares
available
1998 EMPLOYEE INCENTIVE PLAN Page 3
May 21, 1998
<PAGE>
under categories (II), (III), and (IV), shall not exceed Seven
Hundred and Fifty Thousand (750,000) Shares.
(ii) Any Shares granted under the Plan that are forfeited
because of the failure to meet an Award contingency or
condition shall again be available for delivery pursuant to
new Awards granted under the Plan. To the extent any Shares
covered by an Award are not delivered to a Participant or a
Participant's beneficiary because the Award is forfeited or
canceled, or the Shares are not delivered because the Award is
settled in cash, such Shares shall not be deemed to have been
delivered for purposes of determining the maximum number of
Shares available for delivery under the Plan.
(iii) If the Exercise Price of any Option granted under the
Plan or the 1986 Plan is satisfied by tendering Shares to the
Company (by either actual delivery or attestation) or by the
Company withholding shares, only the number of Shares issued
net of the Shares tendered or withheld shall be deemed
delivered for purposes of determining the maximum number of
Shares available for delivery under the Plan.
(iv) Shares delivered under the Plan in settlement, assumption
or substitution of outstanding awards (or obligations to grant
future awards) under the plans or arrangements of another
entity shall not reduce the maximum number of Shares available
for delivery under the Plan, to extent that such settlement,
assumption or substitution occurs as a result of the Company
or a Related Company acquiring another entity (or an interest
in another entity).
(b) Subject to adjustment under paragraph 4.2(c), the following
additional maximum limitations are imposed under the Plan:
(i) The aggregate maximum number of Shares that may be issued
under Options intended to be Incentive Stock Options shall be
Two Hundred and Fifty Thousand (250,000) shares.
(ii) The aggregate maximum number of Shares that may be issued
in conjunction with Awards granted pursuant to Section 3
(relating to Stock Awards) and Section 8 (relating to Other
Incentive Awards to the extent such Awards are settled with
Shares) shall be Two Hundred and Fifty Thousand (250,000)
Shares.
(iii) Unless the Committee determines that an Award to a Named
Executive Officer shall not be designed to comply with the
Performance-Based Exception, the following limitations shall
apply:
(A) In any fiscal year of the Company, the aggregate
number of Shares that may be granted to any
Participant pursuant to any
1998 EMPLOYEE INCENTIVE PLAN Page 4
May 21, 1998
<PAGE>
and all Award (including Options, SARs and
Stock Awards)shall not exceed One Hundred Thousand
(100,000); and
(B) In any fiscal year of the Company, the maximum
aggregate cash payout with respect to Other Incentive
Awards granted in any fiscal year of the Company
pursuant to Section 8 of the Plan which may be made
to any Named Executive Officer shall be Two Million
Dollars ($2,000,000).
(c) If the outstanding Shares are increased or decreased, or are
changed into or exchanged for cash, property or a different
number or kind of shares or securities, or if cash, property,
Shares or other securities are distributed in respect of such
outstanding Shares, in either case as a result of one or more
mergers, reorganizations, reclassifications, recapitalizations,
stock splits, reverse stock splits, stock dividends, dividends
(other than regular, quarterly dividends), or other
distributions, spin-offs or the like, or if substantially all of
the property and assets of the Company are sold, then, unless the
terms of the transaction shall provide otherwise, appropriate
adjustments shall be made in the number and/or type of Shares or
securities for which Awards may thereafter be granted under the
Plan and for which Awards then outstanding under the Plan may
thereafter be exercised. Any such adjustments in outstanding
Awards shall be made without changing the aggregate Exercise
Price applicable to the unexercised portions of outstanding
Options or SARs. The Committee shall make such adjustments to
preserve the benefits or potential benefits of the Plan and the
Awards; such adjustments may include, but shall not be limited
to, adjustment of: (i) the number and kind of shares which may be
delivered under the Plan; (ii) the number and kind of shares
subject to outstanding Awards; (iii) the Exercise Price of
outstanding Options and SARs; (iv) the limits specified in
subsections 4.2(a)(i) and 4.2(b) above: and (v) any other
adjustments that the Committee determines to be equitable. No
right to purchase or receive fractional shares shall result from
any adjustment in Options, SARs or Stock Awards pursuant to this
paragraph 4.2(c). In case of any such adjustment, Shares subject
to the Option, SAR or Stock Award shall be rounded up to the
nearest whole Share.
4.3 Limit on Distribution. Distribution of Shares or other amounts
under the Plan shall be subject to the following:
(a) Notwithstanding any other provision of the Plan, the Company
shall have no obligation to deliver any Shares under the Plan or
make any other distribution of benefits under the Plan unless
such delivery or distribution would comply with all applicable
laws (including, without limitation, the requirements of the
Securities Act of 1933) and the applicable requirements of any
securities exchange or similar entity, and the
1998 EMPLOYEE INCENTIVE PLAN Page 5
May 21, 1998
<PAGE>
Committee may impose such restrictions on any Shares acquired
pursuant to the Plan as the Committee may deem advisable,
including, without limitation, restrictions under applicable
federal securities laws, under the requirements of any Stock
exchange or market upon which such Shares are then listed and/or
traded, and under any blue sky or state securities laws
applicable to such Shares. In the event that the Committee
determines in its discretion that the registration, listing or
qualification of the Shares issuable under the Plan on any
securities exchange or under any applicable law or governmental
regulation is necessary as a condition to the issuance of such
Shares under an Option or Stock Award, such Option or Stock Award
shall not be exercisable or exercised in whole or in part unless
such registration, listing and qualification, and any necessary
consents or approvals have been unconditionally obtained.
(b) Distribution of Shares under the Plan may be effected on a
non-certificated basis, to the extent not prohibited by
applicable law or the applicable rule of any stock exchange.
4.4 Tax Withholding. Before distribution of Shares under the Plan, the
Company may require the recipient to remit to the Company an amount
sufficient to satisfy any federal, state or local tax withholding
requirements or, in the discretion of the Committee, the Company may
withhold from the Shares to be delivered and/or otherwise issued Shares
sufficient to satisfy all or a portion of such tax withholding
requirements. Whenever under the Plan payments are to be made in cash,
such payments may be net of an amount sufficient to satisfy any
federal, state or local tax withholding requirements. Neither the
Company nor any Related Company shall be liable to a Participant or any
other person as to any tax consequence expected, but not realized, by
any Participant or other person due to the receipt or exercise of any
Award hereunder.
4.5 Payment for Shares. Subject to the limitations of subsection 4.2 on
the number of Shares that may be delivered under the Plan, the
Committee may use available Shares as the form of payment for
compensation, grants or rights earned or due under any other
compensation plans or arrangements of the Company or a Related Company,
including the plans and arrangements of the Company or a Related
Company acquiring another entity (or an interest in another entity).
The Committee may provide in the Award Agreement that the Shares to be
issued upon exercise of an Option or an SAR or receipt of a Stock Award
shall be subject to such further conditions, restrictions or agreements
as the Committee in its discretion may specify, including without
limitation, conditions on vesting or transferability, and forfeiture
and repurchase provisions.
4.6 Dividends and Dividend Equivalents. An Award may provide the
Participant with the right to receive dividends or dividend equivalent
payments with respect to Shares which may be either paid currently or
credited to an account for the Participant, and which may be settled in
cash or Shares as
1998 EMPLOYEE INCENTIVE PLAN Page 6
May 21, 1998
<PAGE>
determined by the Committee. Any such settlements, and any such
crediting of dividends or dividend equivalents or reinvestment in
Shares may be subject to such conditions, restrictions and
contingencies as the Committee shall establish, including reinvestment
of such credited amounts in Share equivalents.
4.7 Settlements; Deferred Delivery. Awards may be settled through cash
payments, the delivery of Shares, the granting of replacement Awards,
or combinations thereof, all subject to such conditions, restrictions
and contingencies as the Committee shall determine. The Committee may
establish provisions for the deferred delivery of Shares upon the
exercise of an Option or SAR or receipt of a Stock Award with the
deferral evidenced by use of "Stock Units" equal in number to the
number of Shares whose delivery is so deferred. A "Stock Unit" is a
bookkeeping entry representing an amount equivalent to the Fair Market
Value of one Share. Stock Units represent an unfunded and unsecured
obligation of the Company except as otherwise provided by the
Committee. Settlement of Stock Units upon expiration of the deferral
period shall be made in Shares or otherwise as determined by the
Committee. The amount of Shares, or other settlement medium, to be so
distributed may be increased by an interest factor or by dividend
equivalents. Until a Stock Unit is settled, the number of Shares
represented by a Stock Unit shall be subject to adjustment pursuant to
paragraph 4.2(c). Unless otherwise specified by the Committee, any
deferred delivery of Shares pursuant to an Award shall be settled by
the delivery of Shares no later than the 60th day following the date
the person to whom such deferred delivery must be made ceases to be an
employee of the Company or a Related Company.
4.8 Transferability. Unless otherwise provided by the Committee, any
Option and SAR granted under the Plan, and, until vested, any Stock
Award or other Shares-based Award granted under the Plan, shall by its
terms be nontransferable by the Participant otherwise than by will,
the laws of descent and distribution or pursuant to a "domestic
relations order", as defined in the Code or Title I of the Employee
Retirement Income Security Act or the rules thereunder, and shall be
exercisable by, or become vested in, during the Participant's
lifetime, only the Participant.
4.9 Form and Time of Elections. Unless otherwise specified herein,
each election required or permitted to made by any Participant or
other person entitled to benefits under the Plan, and any permitted
modification, or revocation thereof, shall be in writing filed with
the secretary of the Company at such times, in such form, and subject
to such restrictions and limitations, not inconsistent with the terms
of the Plan, as the Committee shall require.
4.10 Award Agreements with Company; Vesting and Acceleration of
Vesting of Awards. At the time of an Award to a participant under the
Plan, the Committee may require a Participant to enter into an
agreement with the Company (an "Award Agreement") in a form specified
by the Committee, agreeing to the terms and conditions of the Plan and
to such additional terms and conditions, not
1998 EMPLOYEE INCENTIVE PLAN Page 7
May 21, 1998
<PAGE>
inconsistent with the Plan, as the Committee may, in its sole
discretion, prescribe, including, but not limited to, conditions to
the vesting or exercisability of an Award, such as continued service
to the Company or a Related Company for a specified period of time.
The Committee may waive such conditions to and/or accelerate
exerciability or vesting of an Option, SAR or Stock Award, either
automatically upon the occurrence of specified events (including in
connection with a change of control of the Company) or otherwise in
its discretion.
4.11 Limitation of Implied Rights.
(a) Neither a Participant nor any other person shall, by reason of
the Plan or any Award Agreement, acquire any right in or title to
any assets, funds or property of the Company or any Related
Company whatsoever, including, without limitation, any specific
funds, assets, or other property which the Company or any Related
Company, in their sole discretion, may set aside in anticipation
of a liability under the Plan. A Participant shall have only a
contractual right to the Shares or amounts, if any, payable under
the Plan, unsecured by the assets of the Company or of any
Related Company. Nothing contained in the Plan or any Award
Agreement shall constitute a guarantee that the assets of such
companies shall be sufficient to pay any benefits to any person.
(b) Neither the Plan nor any Award Agreement shall constitute a
contract of employment, and selection as a Participant will not
give any employee the right to be retained in the employ of the
Company or any Related Company, nor any right or claim to any
benefit under the Plan, unless such right or claim has
specifically accrued under the terms of the Plan or an Award.
Except as otherwise provided in the Plan, no Award under the Plan
shall confer upon the holder thereof any right as a stockholder
of the Company prior to the date on which the individual fulfills
all conditions for receipt of such rights.
4.12 Evidence. Evidence required of anyone under the Plan may be by
certificate, affidavit, document or other information which an officer
of the Company acting on it considers pertinent and reliable, and
signed, made or presented by the proper party or parties.
4.13 Action by Company or Related Company. Any action required or
permitted to be taken by the Company or any Related Company shall be by
resolution of its board of directors, or by action of one or more
members of such board (including a committee of such board) who are
duly authorized to act for such board, or (except to the extent
prohibited by applicable law or applicable rules of any Stock exchange)
by a duly authorized officer of the Company or such Related Company.
1998 EMPLOYEE INCENTIVE PLAN Page 8
May 21, 1998
<PAGE>
4.14 Gender and Number. Where the context admits, words in any gender
shall include any other gender, words in the singular shall include the
plural and the plural shall include the singular.
4.15 Liability for Cash Payments. Each Related Company shall be liable
for payment of cash due under the Plan with respect to any Participant
to the extent that such benefits are attributable to the services
rendered for that Related Company by such Participant. Any disputes
relating to liability of a Related Company for cash payments shall be
resolved by the Committee.
4.16 Non-exclusivity of the Plan. Neither the adoption of the Plan by
the Board of Directors of the Company nor the submission of the Plan to
the stockholders of the Company for approval shall be construed as
creating any limitations on the power of such Board of Directors or a
committee of such Board to adopt such other incentive arrangements as
it or they may deem desirable, including without limitation, the
granting of restricted stock, stock options or cash bonuses otherwise
than under the Plan, and such arrangements may be generally applicable
or applicable only in specific cases.
Section 5
Committee
5.1 Administration. The authority to control and manage the
operation and administration of the Plan shall be vested in a
committee (the "Committee") in accordance with this Section 5.
5.2 Selection of Committee. The Committee shall be selected by
the Board and shall consist of two or more members of the Board.
5.3 Powers of Committee. The authority to manage and control the
operation and administration of the Plan shall be vested in the
Committee, subject to the following:
(a) Subject to the provisions of the Plan, the Committee will
have the authority and discretion to select from amongst
Eligible Individuals those persons who shall receive Awards,
to determine who is an Eligible Individual, to determine the
time or time of receipt, to determine the types of Awards
and the number of Shares covered by the Awards, to establish
the terms, conditions, Performance Goals, restrictions, and
other provisions of such Awards and Award Agreements, and
(subject to the restrictions imposed by Section 6) to
cancel, amend or suspend Awards. In making such Award
determinations, the Committee may take into account the
nature of services rendered by the Eligible Individual, the
Eligible Individual's present and potential contribution to
the
1998 EMPLOYEE INCENTIVE PLAN Page 9
May 21, 1998
<PAGE>
Company's or a Related Company's success and such other
factors as the Committee deems relevant.
(b) Subject to the provisions of the Plan, the Committee will
have the authority and discretion to determine the extent to
which Awards under the Plan will be structured to conform to
the requirements of the Performance-Based Exception and to
take such action, establish such procedures, and impose such
restrictions at the time Awards are granted as the Committee
determines to be necessary or appropriate to conform to such
requirements.
(c) The Committee will have the authority and discretion to
establish terms and conditions of Awards as the Committee
determines to be necessary or appropriate to conform to
applicable requirements or practices of jurisdictions
outside the United States.
(d) The Committee will have the authority and discretion to
interpret the Plan, to establish, amend and rescind any
rules and regulations relating to the Plan, to determine the
terms and provisions of any Award Agreements, and to make
all other determinations that may be necessary or advisable
for the administration of the Plan.
(e) Any interpretation of the Plan by the Committee and any
decision made by the Committee under the Plan is final and
binding.
(f) In controlling and managing the operation and administration
of the Plan, the Committee shall act by a majority of its
then members, by meeting or by writing filed without a
meeting. The Committee shall maintain adequate records
concerning the Plan and concerning its proceedings and acts
in such form and detail as the Committee may decide.
5.4 Delegation by Committee. Except to the extent prohibited by
applicable law or the applicable rules of a Stock exchange, the Committee may
allocate all or any portion of its powers and responsibilities to any one or
more of its members and may delegate all or part of its responsibilities and
powers to any person or persons selected by it. Any such allocation or
delegation may be revoked by the Committee at any time.
5.5 Information to be Furnished to Committee. The Company and Related
Companies shall furnish the Committee with such data and information as may be
requested by the Committee in order to discharge its duties. The records of the
Company and Related Companies as to an Eligible Individual's or a Participant's
employment, consulting services, termination of employment or services, leave of
absence, reemployment and compensation shall be conclusive on all persons unless
determined to be incorrect by the Committee. Participants and other persons
entitled to benefits under
1998 EMPLOYEE INCENTIVE PLAN Page 10
May 21, 1998
<PAGE>
the Plan must furnish the Committee such evidence, data or information as the
Committee considers necessary or desirable to carry out the terms of the Plan.
Section 6
Amendment and Termination
6.1 Board's Right to Amend or Terminate. Subject to the limitations set
forth in this Section 6, the Board may, at any time, amend or terminate the
Plan.
6.2 Amendments Requiring Stockholder Approval. Other than as provided
in subsection 4.2 (c) (relating to certain adjustments to shares), the approval
of the Company's stockholders shall be required for any amendment which: (i)
materially increases the maximum number of Shares that may be delivered to
Participants under the Plan set forth in subsection 4.2(a); (ii) increases the
maximum limitations contained in Section 4.2(b); (iii) decreases the exercise
price of any Option or SAR below the minimum provided in subsection 2.2; (iv)
modifies or eliminates the provisions stated in the final two sentences of
subsection 2.2; or (v) increases the maximum term of any Option or SAR set forth
in Section 2.3. Whenever the approval of the Company's stockholders is required
pursuant to this subsection 6.2, such approval shall be sufficient if obtained
by a majority vote of those stockholders present or represented and actually
voting on the matter at a meeting of stockholders duly called, at which meeting
a majority of the outstanding shares actually vote on such matter.
Section 7
Defined Terms
For the purposes of the Plan, the terms listed below shall be defined as
follows:
Award. The term "Award" shall mean, individually and collectively, any award or
benefit granted to any Participant under the Plan, including, without
limitation, the grant of Options, SARs, Stock Awards and Other Incentive Awards.
Award Agreement. The term "Award Agreement" is defined in subsection 4.10.
Board. The term "Board" shall mean the Board of Directors of the Company.
Code. The term "Code" shall mean the Internal Revenue Code of 1986, as amended.
A reference to any provision of the Code shall include reference to any
successor provision of the Code or of any law that is enacted to replace the
Code.
Eligible Individual. The term "Eligible Individual" shall mean any employee of
the Company or a Related Company. For purposes of the Plan, the status of the
Chairman of the Board of Directors as an employee shall be determined by the
Committee.
1998 EMPLOYEE INCENTIVE PLAN Page 11
May 21, 1998
<PAGE>
Fair Market Value. For purposes of determining the "Fair Market Value" of a
Share, the following rules shall apply:
(i) If the Shares are at the time listed or admitted to trading on any
stock exchange, then the Fair Market Value shall be the mean between
the lowest and the highest reported sales prices of the Shares on the
date in question on the principal exchange on which the Shares are then
listed or admitted to trading. If no reported sale of Shares take place
on the date in question on the principal exchange, then the reported
closing asked price of the Shares on such date on the principal
exchange shall be determinative of Fair Market Value.
(ii) If the Shares are not at the time listed or admitted to trading on
a stock exchange, the Fair Market Value shall be the mean between the
lowest reported bid price and the highest reported asked price of the
Shares on the date in question in the over-the-counter market, as such
prices are reported in a publication of general circulation selected by
the Committee and regularly reporting the market price of the Shares in
such market.
(iii) If the Shares are not listed or admitted to trading on any stock
exchange or traded in the over-the-counter market, the Fair Market
Value shall be as determined by the Committee, acting in good faith.
Named Executive Employee. The term "Named Executive Employee" means a
Participant who, as of the date of vesting and/or payout of an Award, as
applicable, is one of the group of covered employees, as defined in the
regulations promulgated under Code section 162(m), or any successor statute.
Participant. The term "Participant" means an Eligible Individual who has been
granted an Award under the Plan. For purposes of the administration of Awards,
the term Participant shall also include a former employee or any person
(including an estate) who is a beneficiary of a former employee and any person
(including any estate) to whom an Award has been assigned or transferred as
permitted by the Committee.
Performance-Based Exception. The term "Performance-Based Exception" means the
performance-based exception from the tax deductibility limitations of Code
section 162(m).
Performance Goals. The term "Performance Goals" means one or more objective
targets measured by the Performance Measure, the attainment of which may
determine the degree of payout and/or vesting with respect to Awards.
Performance Period. The term "Performance Period" means the time period during
which Performance Goals must be achieved with respect to an Award, as determined
by the Committee, but which period shall not be shorter than one of the
Company's fiscal years.
1998 EMPLOYEE INCENTIVE PLAN Page 12
May 21, 1998
<PAGE>
Performance Measure. The term "Performance Measure" refers to the performance
measures discussed in Section 9 of the Plan.
Related Companies. The term "Related Company" means
(i) any corporation, partnership, joint venture or other entity during
any period in which such corporation, partnership, joint venture or
other entity owns, directly or indirectly, at least fifty percent (50%)
of the voting power of all classes of voting shares of the Company (or
any corporation, partnership, joint venture or other entity which is a
successor to the Company);
(ii) any corporation, partnership, joint venture or other entity during
any period in which the Company (or any corporation, partnership, joint
venture or other entity which is a successor to the Company or any
entity that is a Related Company by reason of clause (i) next above)
owns, directly or indirectly, at least a fifty percent (50%) voting or
profits interest; or
(iii) any business venture in which the Company has a significant
interest, as determined in the discretion of the Committee.
Shares. The term "Shares" shall mean shares of the Common Stock of the Company,
$.01 par value, as presently constituted, subject to adjustment as provided in
paragraph 4.2(c) above.
Section 8
Other Incentive Awards
8.1 Grant of Other Incentive Awards. Subject to the terms and
provisions of the Plan, Other Incentive Awards may be granted Eligible
Individuals, in such amount, upon such terms, and at any time and from time to
time as shall be determined by the Committee.
8.2 Other Incentive Award Agreement. Each Other Incentive Award shall
be evidenced by an Award Agreement that shall specify the amount of the Other
Incentive Award or the means by which it will be calculated, the terms and
conditions applicable to such Award, the applicable Performance Period and
Performance Goals, if any, and such other provisions as the Committee shall
determine, in all cases subject to the terms and provisions of the Plan.
8.3 Nontransferability. Except as otherwise provided in the applicable
Award Agreement, Other Incentive Awards may not be sold, transferred, pledged,
assigned or otherwise alienated or hypothecated, other than by will or the laws
of descent and distribution.
1998 EMPLOYEE INCENTIVE PLAN Page 13
May 21, 1998
<PAGE>
8.4 Form and Timing of Payment of Other Incentive Awards. Payment of
Other Incentive Awards shall be made in cash and at such times as established by
the Committee subject to the terms of the Plan.
Section 9
Performance-Based Exception
9.1 Performance Measures. Unless and until the Board proposes for
stockholder vote and the stockholders of the Company approve a change thereto,
the Performance Measures used to determine the attainment of Performance Goals
with respect to Other Incentive Awards and Stock Awards to Named Executive
Employees which are designed to qualify for the Performance-Based Exception
shall be any one or more of the following, as reported in the Company's Annual
Report to Stockholders which is included in the Company's Annual Report on Form
10-K: the Company's consolidated net earnings and the Company's consolidated
earnings per share on a diluted basis. The Committee may appropriately adjust
any evaluation of performance under a Performance Goal to exclude any of the
following events that occurs during a Performance Period: (i) asset write-downs,
(ii) litigation or claim judgment or settlements, (iii) the effect of changes in
tax law, accounting principles or other such laws or provisions affecting
reported results, (iv) accruals for reorganization and restructuring programs,
and (v) extraordinary non-recurring items as described in Accounting Principles
Board Opinion No. 30 and/or in management's discussion and analysis of financial
condition and results of operations appearing in said Annual Report for the
applicable year.
9.2 Discretion to Adjust Awards/Performance Goals. The Committee may
retain the discretion to adjust the determination of the degree of attainment of
the pre-established Performance Goals for Awards; provided, however, that Awards
which are designed to qualify for the Performance-Based Exception, and which are
held by Named Executive Officers, may not be subjected to an adjustment which
would yield an increased payout, although the Committee may retain the
discretion to make an adjustment which would yield a decreased payout. In the
event that applicable tax and/or securities laws change to permit the Committee
discretion to alter the governing Performance Measure for Awards designed to
quality for the Performance-Based Exception and held by Named Executive Officers
without obtaining stockholder approval of such change, the Committee shall have
sole discretion to make such change without obtaining stockholder approval. In
addition, in the event that the Committee determines that it is advisable to
grant Awards which will not qualify for the Performance-Based Exception, the
Committee may make such grants without satisfying the requirements of Code
Section 162(m).
Section 10
Successors
All obligations of the Company under the Plan with respect to Awards
shall be binding on any successor to the Company, whether the existence of such
successor is the
1998 EMPLOYEE INCENTIVE PLAN Page 14
May 21, 1998
<PAGE>
result of a direct or indirect purchase, merger, consolidation or otherwise, of
all or substantially all of the business and/or assets of the Company.
1998 EMPLOYEE INCENTIVE PLAN Page 15
May 21, 1998
<PAGE>
TIFFANY & CO.
a Delaware Corporation
(the "Company")
TERMS OF STOCK OPTION AWARD
(Standard Non-Qualified Option )
under the
1998 EMPLOYEE INCENTIVE PLAN
(the "Plan")
Adopted May 21, 1998
1. Introduction and Terms of Option. Participant has been granted a
Non-Qualified Stock Option Award (the "Option") to purchase shares of the
Company's Common Stock under the Plan by a committee of the Company's Board of
Directors (the "Committee"). The name of the "Participant", the "Grant Date",
the number of "Covered Shares" and the "Exercise Price" per Share are stated in
the attached "Notice of Grant". The other terms and conditions of the Option are
stated in this document and in the Plan. Certain initially capitalized words and
phrases used in this document are defined in paragraph 10 below and elsewhere in
this document.
2. Award and Exercise Price; Option Not An Incentive Stock Option. Subject to
the terms and conditions stated in this document, the Option gives Participant
the right to purchase the Covered Shares from the Company at the Exercise Price.
The Option is not intended to constitute an "incentive stock option" as that
term is used in the Code.
3. Earliest Dates for Exercise - Cumulative Installments. Unless otherwise
provided in paragraphs 4, 5 or 6 below, the Option shall become exercisable
("mature") in cumulative installments according to the following schedule:
<TABLE>
<CAPTION>
- --------------------------------------- ----------------------------------------
<S> <C>
As of the following anniversary of The Option shall mature with the
the Grant Date: respect to the following percentage
("installment") of the Covered Shares:
- --------------------------------------- ----------------------------------------
- --------------------------------------- ----------------------------------------
One-year anniversary 25%
- --------------------------------------- ----------------------------------------
Two-year anniversary 25%
- --------------------------------------- ----------------------------------------
- --------------------------------------- ----------------------------------------
Three-year anniversary 25%
- --------------------------------------- ----------------------------------------
- --------------------------------------- ----------------------------------------
Four-year anniversary 25%
- --------------------------------------- ----------------------------------------
</TABLE>
Once an installment of the Option matures, as provided in the above schedule, it
shall continue to be exercisable with all prior installments on a cumulative
basis until the Option expires.
4. Effect of Termination of Employment. An installment of the Option shall not
mature if the Participant's Date of Termination occurs before the anniversary of
the Grant Date on which such installment was scheduled to mature. Installments
of the Option which mature prior to Participant's Date of Termination will
remain exercisable, subject to expiration as provided in paragraph 6 below.
5. Effect of Change in Control. All installments of the Option shall mature upon
the date of a Change of Control unless the Participant's Date of Termination
occurs before the date of the Change of Control.
<PAGE>
6. Expiration. The Option shall not be exercisable in part or in whole on or
after the Expiration Date. The "Expiration Date" shall be the earliest to occur
of:
a. the ten-year anniversary of the Grant Date;
b. if the Participant's Date of Termination occurs by reason of death,
Disability or Retirement, the one-year anniversary of such Date of
Termination;
c. if the Participant's Date of Termination occurs for reasons other than
death, Disability or Retirement, the three month anniversary of such
Date of Termination.
7. Methods of Option Exercise. The Option may be exercised in whole or in part
as to any Shares that have matured by filing a written notice of exercise with
the Secretary of the Company at its corporate headquarters prior to the
Expiration Date. Such notice shall specify the number of Shares which the
Participant elects to purchase and shall be accompanied by either of the
following:
a. a bank-certified check payable to the Company (or other type of check
or draft payable to the Company and acceptable to the Secretary) in the
amount of the Exercise Price for the Shares being exercised plus any
tax withholding resulting from such exercise as computed by Tiffany and
Company's payroll department; or
b. a copy of directions to, or a written acknowledgment from, an Approved
Broker that the Approved Broker has been directed to sell, for the
account of the owner of the Option, Shares (or a sufficient portion of
the Shares) acquired upon exercise of the Option, together with an
undertaking by the Approved Broker to remit to the Company a sufficient
portion of the sale proceeds to pay the Exercise Price for the Shares
exercised plus any tax withholding resulting from such exercise as
computed by Tiffany and Company's payroll department.
In the case of exercise via method (a), the exercise shall be deemed complete on
the Company's receipt of such notice and said check or draft. In the case of
exercise via method (b), the exercise shall be deemed complete on the trade date
of the sale. The Committee may approve other methods of exercise, as provided
for in the Plan, before the Option is exercised.
8. Withholding. All distributions on the exercise of the Option are subject to
withholding of all applicable taxes. The method for withholding shall be as
provided in paragraph 7 above, unless the Committee approves other methods of
withholding, as provided for in the Plan, before the Option is exercised.
9. Transferability. The Option is not transferable otherwise than by will or the
laws of descent and distribution or pursuant to a "domestic relations order", as
defined in the Code or Title I of the Employee Retirement Income Security Act or
the rules thereunder, and shall not be otherwise transferred, assigned, pledged,
hypothecated or otherwise disposed of in any way, whether by operation of law or
otherwise, nor shall it be subject to execution, attachment or similar process.
Upon any attempt to transfer the Option otherwise than as permitted herein or to
assign, pledge, hypothecate or otherwise dispose of the Option otherwise than as
permitted herein, or upon the levy of any execution, attachment or similar
process upon the Option, the Option shall immediately terminate and become null
and void.
Tiffany & Co. 1998 Employee Incentive Plan 5/21/98
Standard Terms of Stock Option Award: Rev. I Page 2
<PAGE>
10. Definitions. For the purposes of the Option, the words and phrases listed
below shall be defined as follows:
a. Approved Broker. Means one or more securities brokerage firms
designated by the Secretary of the Company from time to time.
b. Change of Control. A "Change of Control" shall be deemed to have
occurred if :
(i) any person (as used herein, the word "person" shall mean an
individual or an entity) or group of persons acting in
concert has acquired thirty-five percent (35%) in voting
power or amount of the equity securities of the Company
(including the acquisition of any right, option warrant or
other right to obtain such voting power or amount, whether
or not presently exercisable) unless such acquisition is
authorized or approved of by the Board of Directors of the
Company,
(ii) individuals who constituted the Board of Directors of the
Company on May 1, 1998 (the "Incumbent Board") cease for any
reason to constitute at least a majority of such Board of
Directors, provided that any individual becoming a director
subsequent to May 1, 1988 whose election, or nomination for
election by the Company's stockholders, was approved by a
vote of at least three-quarters of the directors comprising
the Incumbent Board (either by a specific vote or by
approval of the proxy statement of the Company in which such
individual is named as a nominee for director) shall be, for
the purposes of this paragraph 10(a), considered as though
such individual were a member of the Incumbent Board; or
(iii)any other circumstance with respect to a change in control
of the Company occurs which the Committee deems to be a
Change in Control of the Company.
A Change of Control will also be deemed to have occurred as of fourteen
days prior to the date scheduled for a Terminating Transaction if
provisions shall not have been made in writing in connection with such
Terminating Transaction for the assumption of the Option or the
substitution for the Option of a new option covering the stock of a
successor employer corporation, or a parent or subsidiary thereof or of
the Company, with appropriate adjustments as to the number and kind of
shares and prices.
c. Code. The Internal Revenue Code of 1986, as amended.
d. Date of Termination. The Participant's "Date of Termination"
shall be the first day occurring on or after the Grant Date on
which Participant's employment with the Company and all Related
Companies terminates for any reason; provided that a termination
of employment shall not be deemed to occur by reason of a
transfer of the Participant between the Company and a Related
Company or between two Related Companies; and further provided
that the Participant's employment shall not be considered
terminated while the Participant is on a leave of absence from
the Company or a Related Company approved by the Participant's
employer or required by applicable law. If, as a result of a sale
or other transaction, the Participant's employer ceases to be a
Related Company (and the Participant's employer is or becomes an
entity that is separate from the Company), the occurrence of such
transaction shall be treated as the
Tiffany & Co. 1998 Employee Incentive Plan 5/21/98
Standard Terms of Stock Option Award: Rev. I Page3
<PAGE>
Participant's Date of Termination caused by the Participant being
discharged by the employer.
e. Disability. Except as otherwise provided by the Committee, the
Participant shall be considered to have a "Disability" if he or
she is unable to engage in any substantial gainful activity by
reason of a medically determinable physical or mental impairment,
which impairment, in the opinion of a physician selected by the
Secretary of the Company, is expected to have a duration of not
less than 120 days.
f. Plan Definitions. Except where the context clearly implies or
indicates the contrary, a word, term, or phrase used in the Plan
shall have the same meaning in this document.
g. Retirement. "Retirement" of the Participant shall mean the
occurrence of the Participant's Date of Termination after age 65
or the occurrence of the Participant's Date of Termination after
age 55 pursuant to the retirement practices of the Participant's
employer.
h. Terminating Transaction. As used herein, the phrase "Terminating
Transaction" shall mean any one of the following:
(i) the dissolution or liquidation of the Company;
(ii) a reorganization, merger or consolidation of the Company; or
(iii) a reorganization, merger or consolidation of the Company
with one or more corporations as a result of which the
Company goes out of existence or becomes a subsidiary of
another corporation, or upon the acquisition of
substantially all of the property or more than eighty
percent (80%) of the then outstanding stock of the Company
by another corporation.
11. Heirs and Successors. The terms of the Option shall be binding upon, and
inure to the benefit of, the Company and its successors and assigns, and upon
any person acquiring, whether by merger, consolidation, purchase of assets or
otherwise, all or substantially all of the Company's assets and business.
Participant may designate a beneficiary of his/her rights under the Option by
filing written notice with the Secretary of the Company. In the event of the
Participant's death prior to the full exercise of the Option, the Option may be
exercised by such Beneficiary to the extent that it was exercisable on the
Participant's Termination Date and up until its Expiration Date. If the
Participant fails to designate a Beneficiary, or if the designated Beneficiary
dies before the Participant or before full exercise of the Option, the Option
may be exercised by Participant's estate to the extent that it was exercisable
on the Participant's Termination Date and up until its Expiration Date.
12. Administration. The authority to manage and control the operation and
administration of the Option shall be vested in the Committee, and the Committee
shall have all powers with respect to the Option as it has with respect to the
Plan. Any interpretation of the Option by the Committee and any decision made by
it with respect to the Option is final and binding.
13. Plan Governs. Notwithstanding anything in this Agreement to the contrary,
the terms of the Option shall be subject to the terms of the Plan, a copy of
which may be obtained by the Participant from the office of the Secretary of the
Company.
Tiffany & Co. 1998 Employee Incentive Plan 5/21/98
Standard Terms of Stock Option Award: Rev. I Page4
<PAGE>
TIFFANY & CO.
a Delaware Corporation
(the "Company")
TERMS OF STOCK OPTION AWARD
(Transferable Non-Qualified Option )
under the
1998 EMPLOYEE INCENTIVE PLAN
(the "Plan")
Adopted May 21, 1998
1. Introduction and Terms of Option. Participant has been granted a
Non-Qualified Stock Option Award (the "Option") to purchase shares of the
Company's Common Stock under the Plan by a committee of the Company's Board of
Directors (the "Committee"). The name of the "Participant", the "Grant Date",
the number of "Covered Shares" and the "Exercise Price" per Share are stated in
the attached "Notice of Grant". The other terms and conditions of the Option are
stated in this document and in the Plan. Certain initially capitalized words and
phrases used in this document are defined in paragraph 10 below and elsewhere in
this document.
2. Award and Exercise Price; Option Not An Incentive Stock Option. Subject to
the terms and conditions stated in this document, the Option gives Participant
the right to purchase the Covered Shares from the Company at the Exercise Price.
The Option is not intended to constitute an "incentive stock option" as that
term is used in the Code.
3. Earliest Dates for Exercise - Cumulative Installments. Unless otherwise
provided in paragraphs 4, 5 or 6 below, the Option shall become exercisable
("mature") in cumulative installments according to the following schedule:
<TABLE>
<CAPTION>
- ------------------------------------------ --------------------------------------
<S> <C>
As of the following anniversary of The Option shall mature with the
the Grant Date: respect to the following percentage
("installment") of the Covered Shares:
- ------------------------------------------ --------------------------------------
- ------------------------------------------ --------------------------------------
One-year anniversary 25%
- ------------------------------------------ --------------------------------------
- ------------------------------------------ --------------------------------------
Two-year anniversary 25%
- ------------------------------------------ --------------------------------------
- ------------------------------------------ --------------------------------------
Three-year anniversary 25%
- ------------------------------------------ --------------------------------------
- ------------------------------------------ --------------------------------------
Four-year anniversary 25%
- ------------------------------------------ --------------------------------------
</TABLE>
Once an installment of the Option matures, as provided in the above schedule, it
shall continue to be exercisable with all prior installments on a cumulative
basis until the Option expires.
4. Effect of Termination of Employment. An installment of the Option shall not
mature if the Participant's Date of Termination occurs before the anniversary of
the Grant Date on which such installment was scheduled to mature. Installments
of the Option which mature prior to Participant's Date of Termination will
remain exercisable, subject to expiration as provided in paragraph 6 below.
5. Effect of Change in Control. All installments of the Option shall mature upon
the date of a Change of Control unless the Participant's Date of Termination
occurs before the date of the Change of Control.
<PAGE>
6. Expiration. The Option shall not be exercisable in part or in whole on or
after the Expiration Date. The "Expiration Date" shall be the earliest to occur
of:
a. the ten-year anniversary of the Grant Date;
b. if the Participant's Date of Termination occurs by reason of death,
Disability or Retirement, the one-year anniversary of such Date of
Termination;
c. if the Participant's Date of Termination occurs for reasons other than
death, Disability or Retirement, the three month anniversary of such
Date of Termination.
7. Methods of Option Exercise. The Option may be exercised in whole or in part
as to any Shares that have matured by filing a written notice of exercise with
the Secretary of the Company at its corporate headquarters prior to the
Expiration Date. Such notice shall specify the number of Shares which the
Participant elects to purchase and shall be accompanied by either of the
following:
a. a bank-certified check payable to the Company (or other type of check
or draft payable to the Company and acceptable to the Secretary) in
the amount of the Exercise Price for the Shares being exercised plus
any tax withholding resulting from such exercise as computed by
Tiffany and Company's payroll department; or
b. a copy of directions to, or a written acknowledgment from, an Approved
Broker that the Approved Broker has been directed to sell, for the
account of the owner of the Option, Shares (or a sufficient portion of
the Shares) acquired upon exercise of the Option, together with an
undertaking by the Approved Broker to remit to the Company a
sufficient portion of the sale proceeds to pay the Exercise Price for
the Shares exercised plus any tax withholding resulting from such
exercise as computed by Tiffany and Company's payroll department.
In the case of exercise via method (a), the exercise shall be deemed complete on
the Company's receipt of such notice and said check or draft. In the case of
exercise via method (b), the exercise shall be deemed complete on the trade date
of the sale. The Committee may approve other methods of exercise, as provided
for in the Plan, before the Option is exercised.
8. Withholding. All distributions on the exercise of the Option are subject to
withholding of all applicable taxes. The method for withholding shall be as
provided in paragraph 7 above, unless the Committee approves other methods of
withholding, as provided for in the Plan, before the Option is exercised.
9. Transferability. The Option is not transferable otherwise than by will or the
laws of descent and distribution or pursuant to a "domestic relations order", as
defined in the Code or Title I of the Employee Retirement Income Security Act or
the rules thereunder, and shall not be otherwise transferred, assigned, pledged,
hypothecated or otherwise disposed of in any way, whether by operation of law or
otherwise, nor shall it be subject to execution, attachment or similar process.
Notwithstanding the foregoing, the Option may be transferred by the Participant
to (i) the spouse, children or grandchildren of the Participant (each an
"Immediate Family Member"), (ii) a trust or trusts for the exclusive benefit of
any or all Immediate Family Members, or (iii) a partnership in which any or all
Immediate Family Members are the only partners, provided that (x) there may be
no consideration paid or otherwise given for any such transfer, and (y)
subsequent transfer of the Option is prohibited otherwise than by will, the laws
of descent and distribution or pursuant to a domestic relations order. Following
transfer, the Option shall continue to be subject to the same terms and
conditions as were applicable immediately prior to transfer. The provisions of
paragraph 4 above shall continue to be applied with respect to the original
Participant following transfer and the Option shall be
Tiffany & Co. 1998 Employee Incentive Plan 5/21/98
Transferable Option: Terms of Stock Option Award - Rev.I Page 2
<PAGE>
exercisable by the transferee only to the extent, and for the periods specified,
herein. Upon any attempt to transfer the Option otherwise than as permitted
herein or to assign, pledge, hypothecate or otherwise dispose of the Option
otherwise than as permitted herein, or upon the levy of any execution,
attachment or similar process upon the Option, the Option shall immediately
terminate and become null and void.
10. Definitions. For the purposes of the Option, the words and phrases listed
below shall be defined as follows:
a. Approved Broker. Means one or more securities brokerage firms
designated by the Secretary of the Company from time to time.
b. Change of Control. A "Change of Control" shall be deemed to have
occurred if :
(i) any person (as used herein, the word "person" shall mean an
individual or an entity) or group of persons acting in concert
has acquired thirty-five percent (35%) in voting power or amount
of the equity securities of the Company (including the
acquisition of any right, option warrant or other right to obtain
such voting power or amount, whether or not presently
exercisable) unless such acquisition is authorized or approved of
by the Board of Directors of the Company,
(ii) individuals who constituted the Board of Directors of the Company
on May 1, 1998 (the "Incumbent Board") cease for any reason to
constitute at least a majority of such Board of Directors,
provided that any individual becoming a director subsequent to
May 1, 1988 whose election, or nomination for election by the
Company's stockholders, was approved by a vote of at least
three-quarters of the directors comprising the Incumbent Board
(either by a specific vote or by approval of the proxy statement
of the Company in which such individual is named as a nominee for
director) shall be, for the purposes of this paragraph 10(a),
considered as though such individual were a member of the
Incumbent Board; or
(iii) any other circumstance with respect to a change in control of
the Company occurs which the Committee deems to be a Change in
Control of the Company.
A Change of Control will also be deemed to have occurred as of fourteen
days prior to the date scheduled for a Terminating Transaction if
provisions shall not have been made in writing in connection with such
Terminating Transaction for the assumption of the Option or the
substitution for the Option of a new option covering the stock of a
successor employer corporation, or a parent or subsidiary thereof or of the
Company, with appropriate adjustments as to the number and kind of shares
and prices.
c. Code. The Internal Revenue Code of 1986, as amended.
d. Date of Termination. The Participant's "Date of Termination" shall be
the first day occurring on or after the Grant Date on which
Participant's employment with the Company and all Related Companies
terminates for any reason; provided that a termination of employment
shall not be deemed to occur by reason of a transfer of the
Participant between the Company and a Related Company or between two
Related Companies; and further provided that the Participant's
employment shall not be considered terminated while the Participant is
on a leave of absence from the Company or a Related Company approved
by the Participant's employer or required by applicable law. If, as a
result of a sale or other transaction, the Participant's employer
ceases to be a Related Company (and the Participant's employer is or
becomes an entity that is separate
Tiffany & Co. 1998 Employee Incentive Plan 5/21/98
Transferable Option: Terms of Stock Option Award - Rev.I Page 3
<PAGE>
from the Company), the occurrence of such transaction shall be treated
as the Participant's Date of Termination caused by the Participant
being discharged by the employer.
e. Disability. Except as otherwise provided by the Committee, the
Participant shall be considered to have a "Disability" if he or she is
unable to engage in any substantial gainful activity by reason of a
medically determinable physical or mental impairment, which
impairment, in the opinion of a physician selected by the Secretary of
the Company, is expected to have a duration of not less than 120 days.
f. Plan Definitions. Except where the context clearly implies or
indicates the contrary, a word, term, or phrase used in the Plan shall
have the same meaning in this document.
g. Retirement. "Retirement" of the Participant shall mean the occurrence
of the Participant's Date of Termination after age 65 or the
occurrence of the Participant's Date of Termination after age 55
pursuant to the retirement practices of the Participant's employer.
h. Terminating Transaction. As used herein, the phrase "Terminating
Transaction" shall mean any one of the following:
(i) the dissolution or liquidation of the Company;
(ii) a reorganization, merger or consolidation of the Company; or
(iii) a reorganization, merger or consolidation of the Company with one
or more corporations as a result of which the Company goes out of
existence or becomes a subsidiary of another corporation, or upon
the acquisition of substantially all of the property or more than
eighty percent (80%) of the then outstanding stock of the Company
by another corporation.
11. Heirs and Successors. The terms of the Option shall be binding upon, and
inure to the benefit of, the Company and its successors and assigns, and upon
any person acquiring, whether by merger, consolidation, purchase of assets or
otherwise, all or substantially all of the Company's assets and business.
Participant may designate a beneficiary of his/her rights under the Option by
filing written notice with the Secretary of the Company. In the event of the
Participant's death prior to the full exercise of the Option, the Option may be
exercised by such Beneficiary to the extent that it was exercisable on the
Participant's Termination Date and up until its Expiration Date. If the
Participant fails to designate a Beneficiary, or if the designated Beneficiary
dies before the Participant or before full exercise of the Option, the Option
may be exercised by Participant's estate to the extent that it was exercisable
on the Participant's Termination Date and up until its Expiration Date.
12. Administration. The authority to manage and control the operation and
administration of the Option shall be vested in the Committee, and the Committee
shall have all powers with respect to the Option as it has with respect to the
Plan. Any interpretation of the Option by the Committee and any decision made by
it with respect to the Option is final and binding.
13. Plan Governs. Notwithstanding anything in this Agreement to the contrary,
the terms of the Option shall be subject to the terms of the Plan, a copy of
which may be obtained by the Participant from the office of the Secretary of the
Company.
Tiffany & Co. 1998 Employee Incentive Plan 5/21/98
Transferable Option: Terms of Stock Option Award - Rev.I Page 4
EXHIBIT 5.1
[TIFFANY & CO. LETTERHEAD]
November 18, 1998
Tiffany & Co.
727 Fifth Avenue
New York, New York 10022
Gentlemen:
As Senior Vice President, General Counsel and Secretary of Tiffany &
Co., a Delaware corporation (the "Company"), I am familiar with the Company's
Registration Statement on Form S-8 dated November 18, 1998 (the "Registration
Statement") to be filed with the Securities and Exchange Commission. The
Registration Statement relates to the registration under the Securities Act of
1933, as amended (the "Act"), of 1,750,000 additional shares (the "Shares") of
the Company's common stock, $0.01 par value per share, issuable pursuant to the
Company's 1998 Employee Incentive Plan (the "Employee Plan").
In that connection, I have examined originals, or copies certified or
otherwise identified to my satisfaction, of such documents, corporate records
and other instruments as I have deemed necessary for the purposes of this
opinion, including the following: (a) the Certificate of Incorporation and
By-Laws of the Company, as amended, (b) resolutions adopted by the Board of
Directors of the Company at meetings held on March 19, 1998, and September 17,
1998, (c) resolutions adopted by the shareholders of the Company on May 21,
1998, and (e) the Employee Plan. For purposes of this opinion, I have assumed
the genuineness of the signatures and authority of persons signing documents on
behalf of parties other than the Company, and the due authorization, execution
and delivery of all documents by the parties thereto other than the Company.
This opinion is delivered pursuant to the requirements of Item
601(b)(5) of Regulation S-K under the Act.
<PAGE>
Tiffany & Co.
November 18, 1998
Page Two
Based upon the foregoing, I am of the opinion that the Shares will be,
upon issuance and delivery and payment therefor in the manner described in the
Employee Plan and the option agreements issued thereunder, duly and validly
authorized, issued and outstanding, fully paid and nonassessable with no
personal liability attaching to the ownership thereof.
I hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement.
Sincerely,
/s/ Patrick B. Dorsey
Patrick B. Dorsey
Senior Vice President,
General Counsel and Secretary
EXHIBIT 23.1
[PricewaterhouseCoopers LLP Letterhead]
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement of
Tiffany & Co. (the "Company") on Form S-8 of our report, dated March 3, 1998, on
our audits of the consolidated financial statements and financial statement
schedule of the Company as of January 31, 1998 and 1997 and for each of the
three years in the period ended January 31, 1998, which report is incorporated
by reference in the Company's Annual Report on Form 10-K.
PricewaterhouseCoopers LLP
/S/ PricewaterhouseCoopers LLP
New York, New York
November 18, 1998
