UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] | Preliminary Proxy Statement | |||||
[ ] | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |||||
[X] | Definitive Proxy Statement | |||||
[ ] | Definitive Additional Materials | |||||
[ ] | Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-2. |
TIFFANY & CO.
Payment of Filing Fee (Check the appropriate box):
[X] | No fee required. |
[ ] | Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-12. |
(1) | Title of each class of securities to which transaction applies: |
(2) | Aggregate number of securities to which transaction applies: |
(3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined): |
(4) | Proposed maximum aggregate value of transaction: |
(5) | Total fee paid: |
[ ] | Fee paid previously with preliminary materials. | |
[ ] | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
(1) | Amount Previously Paid: |
(2) | Form, Schedule or Registration Statement No.: |
(3) | Filing Party: |
(4) | Date Filed: |
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• | The election of the Board; and | ||
• | Ratification of the selection of the independent registered public accounting firm to audit our Fiscal 2007 financial statements. |
• | Complete the enclosed form, called a “proxy card,” and mail it in the envelope provided, or | ||
• | Call the telephone number listed on the proxy card (1-866-540-5760) and follow the pre-recorded instructions, or |
PS-2
• | Use the Internet to vote by pointing your browser tohttp://www.proxyvoting.com/tif; have your proxy card in hand as you will be prompted to enter your control number and to create and submit an electronic vote. |
• | You can send an executed, later-dated proxy card to the Secretary of the Company, call in different instructions, or access the Internet voting site. | ||
• | You can notify the Secretary of the Company in writing that you wish to revoke your proxy, or | ||
• | You can attend the Annual Meeting and vote in person. |
PS-3
• | The stockholder who owns the share is present at the Annual Meeting, whether or not he or she chooses to cast a ballot on any proposal; or | ||
• | The stockholder is represented by proxy at the Annual Meeting. |
• | The stockholder withholds his or her vote or marks “abstain” for one or more proposals; or | ||
• | There is a “broker non-vote” on one or more proposals. |
voting -- in other words, you indicate “abstain” on the proxy card, by telephone or by Internet -- it will have the same effect as an “against” vote. Broker non-votes on this proposal will be treated the same as abstentions: both will have the same effect as an “against” vote.
PS-4
• | FOR the election of all nine nominees for director named in this Proxy Statement; and | ||
• | FOR the ratification of the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm to examine our Fiscal 2007 financial statements. |
PS-5
Name and Address | Amount and Nature | Percent | ||||||
of Beneficial Owner | of Beneficial Ownership (a) | of Class | ||||||
Trian Fund Management, L.P. | 7,500,000 | (b) | 5.50 | % | ||||
280 Park Avenue, 41st Floor | ||||||||
New York, NY 10017 | ||||||||
OppenheimerFunds, Inc. | 6,966,750 | (c) | 5.11 | % | ||||
Two World Financial Center | ||||||||
225 Liberty Street | ||||||||
New York, NY 10281 | ||||||||
a) | “Beneficial ownership” is a term broadly defined by the SEC and includes more than the typical form of stock ownership, that is, stock held in the person’s name. The term also includes what is referred to as “indirect ownership” such as where, for example, the person has or shares the power to vote the stock, sell it or acquire it within 60 days. Accordingly, some of the shares reported as beneficially owned in this table may actually be held by other persons or organizations. Those other persons and organizations are described in the reports filed with the SEC. | |
b) | The “Filing Persons” discussed below reported such beneficial ownership to the SEC on their form Schedule 13D as of February 21, 2007 and that they shared voting power and shared dispositive power with respect to such shares. According to said Schedule 13D, the Filing Persons are Trian Partners GP, L.P., Trian Partners General Partner, LLC, Trian Partners, L.P., Trian Partners Master Fund, L.P., a Cayman Islands limited partnership, Trian Partners Parallel Fund I., L.P., Trian Partners Parallel Fund I GP LLC, Trian Partners Parallel Fund II L.P., Trian Partners Parallel Fund II GP, L.P., Trian Partners Parallel Fund II General Partner, LLC, Trian Fund Management, L.P., Trian Fund Management GP, LLC, Nelson Peltz, Peter W. May and Edward P. Garden. | |
c) | OppenheimerFunds, Inc., reported such beneficial ownership to the SEC on its form Schedule 13G as of December 29, 2006 and that it has shared voting power and shared dispositive power over all such shares. |
PS-6
Amount and Nature of | ||||||||
Name | Beneficial Ownership | Percent Of Classa | ||||||
Directors | ||||||||
Rose Marie Bravo | 86,216 | b | * | |||||
William R. Chaney | 770,500 | c | * | |||||
Gary E. Costley | 0 | * | ||||||
Samuel L. Hayes III | 207,041 | d | * | |||||
Abby F. Kohnstamm | 47,000 | e | * | |||||
Michael J. Kowalski (CEO) | 1,687,750 | f | 1.2 | |||||
Charles K. Marquis | 245,812 | g | * | |||||
J. Thomas Presby | 31,900 | h | * | |||||
James E. Quinn (executive officer) | 986,385 | i | * | |||||
William A. Shutzer | 309,062 | j | * | |||||
Executive Officers | ||||||||
Beth O. Canavan | 346,048 | k | * | |||||
James N. Fernandez (CFO) | 566,635 | l | * | |||||
Jon M. King | 85,927 | m | * | |||||
All executive officers and directors as a group (19 persons): | 6,523,390 | n | 4.8 | |||||
a) | An asterisk (*) is used to indicate less than 1% of the class outstanding. | |
b) | Includes 82,216 shares issuable upon the exercise of “Vested Stock Options,” which are stock options that either are exercisable as of March 23, 2007 or will become exercisable within 60 days of that date. | |
c) | Includes 182,500 shares issuable upon the exercise of Vested Stock Options, and 75,000 shares held by Mr. Chaney’s wife. Also includes 13,000 shares held by The Chaney Family Foundation of which Mr. Chaney is President. Mr. Chaney disclaims beneficial ownership of Company stock held by The Chaney Family Foundation. | |
d) | Includes 136,228 shares issuable upon the exercise of Vested Stock Options, and 2,079 shares held by Prof. Hayes’s wife. Also includes 30,000 shares held in trust for the benefit of children of Prof. Hayes by Barbara L. Hayes, his wife, as trustee. | |
e) | Includes 45,000 shares issuable upon the exercise of Vested Stock Options. | |
f) | Includes 1,448,750 shares issuable upon the exercise of Vested Stock Options. | |
g) | Includes 136,228 shares issuable upon the exercise of Vested Stock Options. | |
h) | Includes 30,000 shares issuable upon the exercise of Vested Stock Options. |
PS-7
i) | Includes 940,250 shares issuable upon the exercise of Vested Stock Options; 135 shares credited to Mr. Quinn’s account under the Company’s Employee Profit Sharing and Retirement Savings Plan; 31,000 shares held by Mr. Quinn’s wife; and 8,000 shares owned by Mr. Quinn’s children under the UGMA. | |
j) | Includes 97,876 shares issuable upon the exercise of Vested Stock Options and 5,100 shares held by or for Mr. Shutzer’s minor child and 114,000 shares held by KJC Ltd. of which Mr. Shutzer is the sole general partner. Mr. Shutzer disclaims beneficial ownership of Company stock held by KJC Ltd. | |
k) | Includes 342,500 shares issuable upon the exercise of Vested Stock Options and 548 shares credited to Mrs. Canavan’s account under the Company’s Employee Profit Sharing and Retirement Savings Plan. | |
l) | Includes 554,500 shares issuable upon the exercise of Vested Stock Options and 135 shares credited to Mr. Fernandez’s account under the Company’s Employee Profit Sharing and Retirement Savings Plan. | |
m) | Includes 85,500 shares issuable upon the exercise of Vested Stock Options and 427 shares credited to Mr. King’s account under the Company’s Employee Profit Sharing and Retirement Savings Plan. | |
n) | Includes 5,205,218 shares issuable upon the exercise of Vested Stock Options and 2,785 shares held in the Company’s Employee Profit Sharing and Retirement Savings Plan. |
REGISTERED PUBLIC ACCOUNTING FIRM
PS-8
January 31, 2007 | January 31, 2006 | |||||||
Audit Fees | $ | 2,172,750 | $ | 1,882,900 | ||||
Audit-related Feesa | 73,750 | 73,700 | ||||||
Audit and Audit-related Fees | 2,246,500 | 1,956,600 | ||||||
Tax Feesb | 713,900 | 754,700 | ||||||
All Other Feesc | 15,100 | 11,500 | ||||||
Total Fees | $ | 2,975,500 | $ | 2,722,800 | ||||
a) | Audit-related fees consist principally of fees for audits of financial statements of certain employee benefit plans and other advisory services for the years ended January 31, 2007 and January 31, 2006. | ||
b) | Tax fees consist of fees for tax consultation and tax compliance services. These fees included tax filing and compliance fees of $265,600 for the year ended January 31, 2007 and $250,400 for the year ended January 31, 2006. | ||
c) | All other fees consist of costs for software used by the Finance Division and other advisory services. |
PS-9
• | Management succession; | ||
• | Review and approval of the annual operating plan prepared by management; | ||
• | Monitoring of performance in comparison to the operating plan; | ||
• | Review and approval of the Company’s five-year strategic plan prepared by management; | ||
• | Consideration of topics of relevance to the Company’s ability to carry out its strategic plan; | ||
• | Review and approval of a delegation of authority by which management carries out the day-to-day operations of the Company and its subsidiaries; | ||
• | Review of the Company’s investor relations program; | ||
• | Review of the Company’s schedule of insurance coverage; and | ||
• | Review and approval of significant actions by the Company. |
PS-10
Nominating/ | Percent of | |||||||||||||||||||||||
Stock | Corporate | Meetings | ||||||||||||||||||||||
Board | Audit | Compensation | Option | Governance | Attended | |||||||||||||||||||
Meetings Held | 6 | 9 | 6 | 6 | 5 | |||||||||||||||||||
Meetings Attended: | ||||||||||||||||||||||||
Rose Marie Bravo | 6 | n/a | 6 | 6 | 5 | 100% | ||||||||||||||||||
William R. Chaney | 6 | n/a | n/a | n/a | n/a | 100% | ||||||||||||||||||
Samuel L. Hayes III | 6 | 8 | 6 | 6 | 5 | 97% | ||||||||||||||||||
Abby F. Kohnstamm | 6 | n/a | 6 | 6 | 5 | 100% | ||||||||||||||||||
Charles K. Marquis | 6 | 7 | 6 | 6 | 5 | 94% | ||||||||||||||||||
J. Thomas Presby | 6 | 9 | n/a | n/a | 5 | 100% | ||||||||||||||||||
William A. Shutzer | 6 | n/a | n/a | n/a | n/a | 100% | ||||||||||||||||||
Michael J. Kowalski | 6 | n/a | n/a | n/a | n/a | 100% | ||||||||||||||||||
James E. Quinn | 6 | n/a | n/a | n/a | n/a | 100% | ||||||||||||||||||
PS-11
Audit | Nominating/Corporate Governance | ||||||||
J. Thomas Presby, Chair | Charles K. Marquis, Chair | ||||||||
Samuel L. Hayes III | Rose Marie Bravo | ||||||||
Charles K. Marquis | Samuel L. Hayes III Abby F. Kohnstamm | ||||||||
J. Thomas Presby | |||||||||
Compensation | Stock Option Subcommittee | ||||||||
Samuel L. Hayes III, Chair | Samuel L. Hayes III, Chair | ||||||||
Rose Marie Bravo | Rose Marie Bravo | ||||||||
Abby F. Kohnstamm | Abby F. Kohnstamm | ||||||||
Charles K. Marquis | Charles K. Marquis | ||||||||
• | Policies on the composition of the Board, | ||
• | Criteria for the selection of nominees for election to the Board, | ||
• | Nominees to fill vacancies on the Board, and | ||
• | Nominees for election to the Board. |
PS-12
• | Approval of remuneration arrangements for executive officers, and | ||
• | Approval of compensation plans in which officers and employees of Tiffany are eligible to participate. |
• | Retaining and terminating the Company’s independent registered public accounting firm, reviewing the quality-control procedures and independence of such firm and evaluating their proposed audit scope, performance and fee arrangements; | ||
• | Approving in advance all audit and non-audit services to be rendered by the independent registered public accounting firm; | ||
• | Reviewing the adequacy of our system of internal financial controls; | ||
• | Establishing procedures for complaints regarding accounting, internal accounting controls or auditing matters; and | ||
• | Conducting a post-audit review of our financial statements and audit findings in advance of filing, and reviewing in advance proposed changes in our accounting principles. |
PS-13
PS-14
PS-15
Charles K. Marquis
J. Thomas Presby, Chair
PS-16
Year Joined | ||||||
Name | Age | Position | Tiffany | |||
Michael J. Kowalski | 55 | Chairman of the Board and Chief Executive Officer | 1983 | |||
James E. Quinn | 55 | President | 1986 | |||
Beth O. Canavan | 52 | Executive Vice President | 1987 | |||
James N. Fernandez | 51 | Executive Vice President and Chief Financial Officer | 1983 | |||
Jon M. King | 50 | Executive Vice President - Merchandising | 1990 | |||
Victoria Berger-Gross | 51 | Senior Vice President - Human Resources | 2001 | |||
Pamela H. Cloud | 37 | Senior Vice President - Merchandising | 1994 | |||
Patrick B. Dorsey | 56 | Senior Vice President - General Counsel and Secretary | 1985 | |||
Fernanda M. Kellogg | 60 | Senior Vice President - Public Relations | 1984 | |||
Patrick F. McGuiness | 41 | Senior Vice President - Finance | 1990 | |||
Caroline D. Naggiar | 49 | Senior Vice President - Marketing | 1997 | |||
John S. Petterson | 48 | Senior Vice President - Operations | 1988 | |||
PS-17
PS-18
Compensation Discussion and Analysis | Page PS-19 | |||
Report of the Compensation Committee | Page PS-28 | |||
Summary Compensation Table – Fiscal 2006 | Page PS-29 | |||
Grants of Plan-Based Awards Table – Fiscal 2006 | Page PS-31 | |||
Equity Compensation Plan Information | Page PS-32 | |||
Discussion of Summary Compensation Table and Grants of Plan-Based Awards | Page PS-33 | |||
Outstanding Equity Awards at Fiscal Year-end Table | Page PS-36 | |||
Option Exercises and Stock Vested Table – Fiscal 2006 | Page PS-39 | |||
Pension Benefits Table | Page PS-40 | |||
Nonqualified Deferred Compensation Table | Page PS-44 | |||
Potential Payments on Termination or Change in control | Page PS-46 | |||
Director Compensation Table – Fiscal 2006 | Page PS-49 |
PS-19
• | to attract, motivate and retain the management talent necessary to develop and execute both short-term and strategic plans; | ||
• | to reward achievement of both short-term and long-term financial goals; and | ||
• | to link management’s interests with those of the stockholders. |
PS-20
• | Like most companies, the Company’s stock price over the long term is primarily driven by growth in EPS. EPS performance is the primary determiner of vesting and no shares will vest unless a threshold level of EPS performance is achieved. | ||
• | The Company’s ROA is also likely to significantly affect its stock price over the long term. This is due, in part, to the significance of inventory and store fitting-out expenses in its business. Thus the Committee uses ROA as a supplemental indicator of management’s success in achieving sustainable earnings growth. | ||
• | At any given level of achievement of the cumulative three-year EPS goal, an additional number of performance-based restricted stock units, equal to 15% of the number that would otherwise vest, will vest if the ROA goal is also met over the same three-year period. | ||
• | If the ROA goal is not met, the number that would otherwise have vested is reduced by 15%. |
PS-21
• | The following elements of compensation were reviewed for each executive officer: |
¡ | base salary; | ||
¡ | target annual incentive as a percentage of salary; | ||
¡ | target total cash compensation; | ||
¡ | actual total cash compensation; | ||
¡ | expected value of long-term incentives as a percentage of salary; | ||
¡ | target total direct compensation; | ||
¡ | actual total direct compensation; and | ||
¡ | pay mix. |
PS-22
• | The analysis included data concerning compensation for senior positions provided by: |
¡ | a survey of 13 companies in the specialty retail industry with median revenues of $2.1 billion; | ||
¡ | a survey of 16 companies in the retail industry with median revenues of $3.1 billion, including all the companies in the Peer Group referred to under “PERFORMANCE OF COMPANY STOCK” other than Movado Group Inc.; | ||
¡ | a general survey of 49 companies in the retail/wholesale industry; and | ||
¡ | a survey of 825 companies in general industry. |
• | that the chief executive officer is being compensated at the 50th percentile in terms of salary, target total cash compensation (base salary plus target annual incentive) and target total direct compensation (total target cash compensation plus expected value of long-term incentives); | ||
• | that the other named executive officers are generally compensated above market median levels on all four indices; and | ||
• | that no increase in executive compensation was required for Fiscal 2007. |
Target Incentive as a Percent of | Maximum Incentive as a Percent | |||||||
Executive | Base Salary | of Base Salary | ||||||
Michael J. Kowalski | 95% | 190% | ||||||
James E. Quinn | 70% | 140% | ||||||
Beth O. Canavan | 65% | 130% | ||||||
James N. Fernandez | 65% | 130% | ||||||
Jon M. King1 | 65% | 130% | ||||||
1 In the case of Jon M. King, the Committee awards discretionary bonuses, rather than the formula-based annual incentive awards such that are awarded to the other four named executive officers, but tends to align the bonuses with the annual incentive awards. Of the five most-highly compensated executive officers, Mr. King is the most recently promoted to the executive officer group. |
PS-23
Executive | Long-term Incentive Value as a Percent of Salary | |||
Michael J. Kowalski | 300% | |||
James E. Quinn | 250% | |||
Beth O. Canavan | 200% | |||
James N. Fernandez | 225% | |||
Jon M. King | 200% | |||
Market Value of Company Stock Holdings as a | ||||
Multiple of Base Salary (Minimum Annual Retainer | ||||
Position/Level | in the case of Non-Executive Directors | ) | ||
Chief Executive Officer | Five Times | |||
Non-Executive Directors | Five Times | |||
President | Four Times | |||
Executive Vice President | Three Times | |||
Senior Vice President | Two Times | |||
• | satisfy required withholding for income taxes due upon exercise of stock options or vesting of performance-based restricted stock units; | ||
• | pay the exercise price upon exercise of stock options; and | ||
• | dispose of no more than 50% of the remaining shares issued upon exercise of stock options or vesting of performance-based restricted share units (after paying the exercise price and tax withholding). |
PS-24
• | will increase the value of the Company to a potential acquirer that requires delivery of an intact management team; | ||
• | will help to keep management in place and focused should any situation arise in which a change of control looms but is not welcome or agreement has not yet been reached; | ||
• | are a prudent defense to the possibility that one or more senior executive officers might retire or take a competing job offer during a time of transition; and | ||
• | are not overly generous. |
• | the excise tax imposes discriminatory results between executives with varying compensation and stock option exercise histories; | ||
• | the gross-up provisions assure that the financial incentives provided by the retention agreements will have the desired effect upon each individual executive officer without such discriminatory results; and | ||
• | given the size of the Company’s business and its assets, the cost of the retention payments, including the gross-up payments, is unlikely to impede an acquisition offer from an acquirer with the necessary wherewithal to accomplish it. |
PS-25
• | that each executive should control the disposition of his or her equity interest in the Company, and receive the full value of such interest, should a change of control situation ever arise; and | ||
• | that the independent directors are fully capable of weighing the merits of any proposed transaction and reaching a proper conclusion in the interests of the stockholders, even in the face of management’s advocacy of a transaction that would provide change in control payments to the executive officers. |
• | loss of benefits under the Excess Plan and the Supplemental Plan; | ||
• | loss of all rights under stock options and performance-based restricted stock units; and | ||
• | mandatory repayment of all proceeds from stock options exercised or restricted stock units vested during a period beginning six months before termination and throughout the duration of the non-competition covenant. |
PS-26
• | salary and annual incentive award or bonus grants in prior years; | ||
• | potential threshold, target and maximum returns on unvested performance-based restricted stock unit awards and unrealized potential gains from outstanding stock options holdings, both under current conditions and under various hypothetical stock price and termination or change-in-control scenarios; | ||
• | realized gains on stock options previously exercised; | ||
• | shareholdings and progress towards compliance with stock ownership requirements; | ||
• | retirement and life insurance benefits and perquisites; | ||
• | total cash compensation (salary plus annual incentive award or bonus grant, based on potential threshold, target and maximum annual incentive or bonus awards for the current year); and | ||
• | estimated value of salary, annual incentive or bonus, unvested restricted stock unit and stock option, and retirement and health benefits upon a hypothetical change in control scenario. |
PS-27
Rose Marie Bravo
Abby F. Kohnstamm
Charles K. Marquis
PS-28
Fiscal 2006
Change in | ||||||||||||||||||||||||||||||||||||
Pension | ||||||||||||||||||||||||||||||||||||
Value and | ||||||||||||||||||||||||||||||||||||
Non- | Nonquali- | |||||||||||||||||||||||||||||||||||
Equity | fied | |||||||||||||||||||||||||||||||||||
Incentive | Deferred | All | ||||||||||||||||||||||||||||||||||
Plan | Compensa- | Other | ||||||||||||||||||||||||||||||||||
Stock | Option | Compen- | tion | Compen- | ||||||||||||||||||||||||||||||||
Name and | Salary | Bonus | Awards | Awards | sation | Earnings | sation | Total | ||||||||||||||||||||||||||||
Principal Position | Year | ($) (a) | ($) (b) | ($) (c) | ($) (d) | ($) (e) | ($) (f) | ($) | ($) | |||||||||||||||||||||||||||
Michael J. Kowalski Chairman and CEO | 2006 | $ | 972,382 | — | $ | 1,699,300 | $ | 1,869,000 | $ | 1,123,541 | $ | 1,219,355 | $ | 153,367 | (g) | $ | 7,036,945 | |||||||||||||||||||
James E. Quinn President | 2006 | $ | 738,013 | — | $ | 1,058,611 | $ | 1,211,307 | $ | 628,334 | $ | 1,452,588 | $ | 119,235 | (h) | $ | 5,208,088 | |||||||||||||||||||
Beth O. Canavan Executive Vice President | 2006 | $ | 526,275 | — | $ | 587,714 | $ | 656,997 | $ | 417,878 | $ | 249,113 | $ | 91,659 | (i) | $ | 2,529,636 | |||||||||||||||||||
James N. Fernandez Executive Vice President and CFO | 2006 | $ | 655,543 | — | $ | 821,349 | $ | 946,829 | $ | 520,377 | $ | 448,086 | $ | 118,495 | (j) | $ | 3,510,679 | |||||||||||||||||||
Jon M. King Executive Vice President | 2006 | $ | 483,698 | $ | 394,225 | $ | 446,083 | $ | 449,315 | — | $ | 223,538 | $ | 87,120 | (k) | $ | 2,083,979 | |||||||||||||||||||
(a) | Salary amounts include amounts deferred at the election of the executive under the Tiffany and Company Executive Deferral Plan (the “Deferral Plan”) and under the 401(k) feature of the Company’s Employee Profit Sharing and Retirement Savings Plan (the “401(k)”). Amounts deferred to the Deferral Plan are also shown in the Nonqualified Deferred Compensation Table. | ||
(b) | Bonus amounts include amounts deferred at the election of the executive under the Deferral Plan and under the 401(k). Bonus amounts are earned in the fiscal year ended January 31, and paid in April. | ||
(c) | Amounts shown represent the dollar amount of compensation cost recognized in Fiscal 2006 for performance-based restricted stock unit awards for Fiscal 2006 and previous fiscal years in accordance with SFAS No. 123R. In valuing such awards, the Company made certain assumptions. For a discussion of those assumptions, please refer to Part II of the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2007. See Note O. “STOCK COMPENSATION PLANS”, in Notes to Consolidated Financial Statements, under Item 8. Financial Statements and Supplementary Data. | ||
(d) | Amounts shown represent the dollar amount of compensation cost recognized in Fiscal 2006 for stock options granted for Fiscal 2006 and previous fiscal years in accordance with SFAS No. 123R. In valuing option awards, the Company made certain assumptions. For a discussion of those assumptions, please refer to note (c) above. | ||
(e) | This column reflects cash annual incentive awards under the 2005 Employee Incentive Plan. These awards are earned in the fiscal year ended January 31 and are paid on the basis of achieved Performance Goals after the release of the Company’s financial statements for the fiscal year. This column includes amounts deferred at the election of the executive under the Deferral Plan. Amounts so deferred are also shown in the Nonqualified Deferred Compensation Table. |
PS-29
(f) | This column represents the aggregate change, over Fiscal 2006, in the actuarial present value of the executive’s accumulated benefit under all defined benefit and actuarial plans. This column does not include earnings under the Deferral Plan because the Deferral Plan does not pay above-market or preferential earnings on compensation that is deferred. | ||
(g) | Mr. Kowalski’s Fiscal 2006 compensation included the following elements whose total incremental cost to the Company is shown in the column titled “All Other Compensation”: life insurance premium ($66,542); tax gross-up paid on the life insurance premium ($54,073); disability insurance premium ($16,627); 401(k) matching contribution ($7,500); medical exam ($2,375); and tax accounting fees ($6,250). | ||
(h) | Mr. Quinn’s Fiscal 2006 compensation included the following elements whose total incremental cost to the Company is shown in the column titled “All Other Compensation”: life insurance premium ($47,325); tax gross-up paid on the life insurance premium ($37,258); disability insurance premium ($17,386); 401(k) matching contribution ($7,500); medical exam ($2,375); tax accounting fees ($3,815); health club membership ($3,576). | ||
(i) | Mrs. Canavan’s Fiscal 2006 compensation included the following elements whose total incremental cost to the Company is shown in the column titled “All Other Compensation”: life insurance premium ($35,484); tax gross-up paid on the life insurance premium ($29,017); disability insurance premium ($16,579); 401(k) matching contribution ($7,500); medical exam ($2,375); and health club membership ($704). | ||
(j) | Mr. Fernandez’s Fiscal 2006 compensation included the following elements whose total incremental cost to the Company is shown in the column titled “All Other Compensation”: life insurance premium ($52,029); tax gross-up paid on the life insurance premium ($41,322); disability insurance premium ($13,829); 401(k) matching contribution ($7,500); and tax accounting fees ($3,815). | ||
(k) | Mr. King’s Fiscal 2006 compensation included the following elements whose total incremental cost to the Company is shown in the column titled “All Other Compensation”: life insurance premium ($35,285); tax gross-up paid on the life insurance premium ($26,013); disability insurance premium ($13,010); 401(k) matching contribution ($7,500); medical exam ($2,625); and health club membership ($2,687). |
PS-30
Fiscal 2006
2005 Employee Incentive Plan
All Other | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Option | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Awards: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Number | Exercise | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
of | or Base | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Securities | Price of | Grant Date | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Under- | Option | Fair Value | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Estimated Future Payouts | Estimated Future Payouts | lying | Awards | of Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Grant | Under Non-Equity | Under Equity Incentive | Options | ($/Sh) | Awards | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Name | Award Type | Date | Incentive Plan Awards | Plan Awards | (#) | (d) | (e) (f) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Target | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Number | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Threshold | of | Maximum | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Threshold | Target | Maximum | Number of | Shares | Number of | ||||||||||||||||||||||||||||||||||||||||||||||||||||
($) | ($) | ($) | Shares (a) | (b) | Shares (c) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Annual | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Michael J. | Incentive | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Kowalski | Award | $ | 0 | $ | 926,250 | $ | 1,852,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Performance- | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Based RSU | 1/18/07 | 18,870 | 42,550 | 74,000 | $ | 1,708,383 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Option | 1/18/07 | 77,000 | $ | 40.15 | $ | 1,452,466 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Annual | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
James E. | Incentive | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quinn | Award | $ | 0 | $ | 518,000 | $ | 1,036,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Performance- | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Based RSU | 1/18/07 | 11,858 | 26,738 | 46,500 | $ | 1,073,531 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Option | 1/18/07 | 49,000 | $ | 40.15 | $ | 924,297 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Annual | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Beth O. | Incentive | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Canavan | Award | $ | 0 | $ | 344,000 | $ | 689,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Performance- | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Based RSU | 1/18/07 | 6,758 | 15,238 | 26,500 | $ | 611,806 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Option | 1/18/07 | 28,000 | $ | 40.15 | $ | 528,170 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Annual | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
James N. | Incentive | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fernandez | Award | $ | 0 | $ | 429,000 | $ | 858,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Performance- | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Based RSU | 1/18/07 | 9,563 | 21,563 | 37,500 | $ | 865,754 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Option | 1/18/07 | 39,000 | $ | 40.15 | $ | 735,665 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Jon M. | Performance- | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
King | Based RSU | 1/18/07 | 6,375 | 14,375 | 25,000 | $ | 577,156 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Option | 6/7/06 | 10,000 | $ | 33.785 | $ | 145,107 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Option | 1/18/07 | 26,000 | $ | 40.15 | $ | 490,443 | |||||||||||||||||||||||||||||||||||||||||||||||||||
(a) | Assumes that the EPS minimum is met and the ROA goal is not met (see discussion below). |
PS-31
(b) | Assumes that the EPS target is met and the ROA goal is met. | |
(c) | Assumes that the EPS maximum is met and the ROA goal is met. | |
(d) | The exercise price of all options was equal to or greater than the closing price of the underlying shares on the New York Stock Exchange on the grant date. The Committee adopted the following pricing convention on January 18, 2007: the higher of (i) the simple arithmetic mean of the high and low sales price of such stock on the New York Stock Exchange on the grant date or (ii) the closing price on such Exchange on the grant date. Options granted before that date were priced at the simple arithmetic mean of the high and low sales price of such stock on the New York Stock Exchange on the grant date. | |
(e) | The grant date fair value of each option award was computed in accordance with SFAS NO. 123R. | |
(f) | The grant date fair value of each performance-based award was computed assuming target payout and in accordance with SFAS NO. 123R. For additional information regarding performance-based compensation, see the table titled “OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END” beginning on page PS-36. |
(AS OF FISCAL YEAR END)
Column A | Column B | Column C | ||||||||||
Number of securities | ||||||||||||
remaining available for | ||||||||||||
Number of securities | future issuance under | |||||||||||
to be issued upon | Weighted average | equity compensation | ||||||||||
exercise of | exercise price of | plans (excluding | ||||||||||
outstanding options, | outstanding options, | securities reflected in | ||||||||||
Plan category | warrants and rights | warrants and rights | column A) | |||||||||
Equity compensation plans approved by security holders | 11,153,201 | a | $ | 30.26 | 7,938,073 | b | ||||||
Equity compensation plans not approved by security holders | 0 | 0 | 0 | |||||||||
Total | 11,153,201 | a | $ | 30.26 | 7,938,073 | b | ||||||
(a) | Shares indicated do not include 2,211,517 shares issuable under awards of stock units already made. See Note (b) below. |
(b) | Shares indicated are the aggregate of those available for grant under the Company’s 2005 Employee Incentive Plan (the “Employee Plan”) and the Company’s 1998 Directors Option Plan (the “Directors Plan”). All plans provide for the issuance of options and stock awards. However, under the 2005 Employee Plan the maximum number of shares that may be issued, 11,000,000, is subject to reduction by 1.58 shares for each share that is delivered on vesting of a stock award. See Note (a) above. Column C reflects this reduction assuming that all shares granted as stock awards will vest. Under the Directors Plan all shares of the 477,500 remaining for issuance could be issued as stock awards. |
PS-32
AND GRANTS OF PLAN-BASED AWARDS
• | For fiscal year 2006, earnings were required to exceed reference earnings: |
¡ | in order for any annual incentive awards to pay out; | ||
¡ | by 12.3% in order to pay out at target; and | ||
¡ | by 16.3% in order to pay out at maximum. |
• | For fiscal year 2007, earnings must exceed reference earnings: |
¡ | in order for any annual incentive awards to pay out; | ||
¡ | by 12% in order to pay out at target; and | ||
¡ | by 16% in order to pay out at maximum. |
• | In Fiscal 2006, the Company exceeded its net earnings objectives and annual incentive awards and bonuses were paid out at 121.3 % of the target amount. | ||
• | In Fiscal 2005, the Company exceeded its net earnings objectives and annual incentive awards and bonuses were paid out at 200% of target. | ||
• | In Fiscal 2004, the Company exceeded its net earning objectives, but the Committee acted pursuant to its authority under the 2005 Employee Incentive Plan to eliminate from consideration earnings attributable to the sale of an investment in a diamond mining company because of the nature of the event. For that reason no annual incentive awards or bonuses were paid out to executive officers. |
• | Annual incentive awards are paid under the terms of the 2005 Employee Incentive Plan and will be paid only if the Company meets objective performance goals. This promise is set out in written agreements. | ||
• | Bonuses are not subject to written agreements. The Compensation Committee has the discretion to increase, decrease or withhold such bonuses. It has been the Committee’s practice to pay bonuses on the basis of the same performance goals as annual incentive awards. | ||
• | Annual incentive awards are designed so that the amounts paid out will be deductible to the Company. Annual incentive awards, if properly designed, do not count against the one million dollar limitation under Section 162(m) of the Internal Revenue Code. Each of the named executive officers is subject to that limitation. |
PS-33
• | If a bonus is paid to an executive officer, and the total annual cash compensation paid to that executive in the year of bonus was to exceed the one million dollar limitation, the excess would not be deductible to the Company for federal income tax purposes. |
• | Units will be exchanged on a one-to-one basis for shares of the Company’s common stock when and if the Units vest; | ||
• | Vesting is determined at the end of a three-year performance period; | ||
• | No Units will vest if the executive voluntarily resigns, retires or is terminated for cause during the three-year performance period, although partial vesting is provided for in cases of termination for death or disability; | ||
• | No Units will vest (other than for reasons of death, disability or on a change in control as defined in the Retention Agreements) if the Company fails to meet a three-year cumulative EPS performance threshold set by the Compensation Committee at the time the Units are granted; | ||
• | Units will tentatively vest based on the following EPS performance hurdles: |
¡ | 30% at threshold; | ||
¡ | 50% at target; and | ||
¡ | 87.5% at maximum; |
• | EPS performance above threshold and below target or above target and below maximum are prorated. No Units will vest if threshold earnings performance is not achieved. After tentative vesting has been determined, a ROA test will be applied. If met, the tentatively vested number of Units will be increased by 15% (but not to over 100%); if not met, the tentatively vested number of Units will be reduced by 15%; | ||
• | 100% vesting will occur only if the Company meets both the EPS maximum and ROA goal; | ||
• | No dividends are paid, accrued or credited to Units until vesting. |
• | Threshold: cumulative net EPS of $4.59; | ||
• | Target: cumulative net EPS of $5.22; | ||
• | Maximum: cumulative net EPS of $5.45; | ||
• | Return on assets: 8.7%. |
• | Threshold: cumulative net EPS of $5.54; | ||
• | Target: cumulative net EPS of $6.39; | ||
• | Maximum: cumulative net EPS of $6.85; | ||
• | Return on assets: 9.7%. |
PS-34
• | Threshold: cumulative net EPS of $6.42; | ||
• | Target: cumulative net EPS of $7.46; | ||
• | Maximum: cumulative net EPS of $8.01; | ||
• | Return on assets: 10.4%. |
• | Vesting of each installment is contingent on continued employment. | ||
• | All installments immediately vest if there is a change in control (as defined in the Retention Agreements), death or disability. |
• | termination of employment (three months after termination); or | ||
• | death, disability or retirement (two years after the event). |
• | executive officers own whole life policies on their own lives; | ||
• | the death benefit is three times annual salary and target annual incentive award or bonus, as the case may be; | ||
• | the Company pays the premium on such policies in an amount sufficient to accumulate cash value; | ||
• | premiums are calculated to accumulate a target cash value at age 65; | ||
• | the target cash value will allow the policy to remain in force without payment of further premiums with a death benefit equivalent to twice the executive officer’s average annual salary and target annual incentive or bonus amount; | ||
• | the amount of the premiums paid by the Company is taxable income to the executive officer; and | ||
• | the Company pays the additional amounts necessary in order to prevent the executive officer from being subjected to increased income taxes as a result of the taxable premium income. |
PS-35
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||
Equity | ||||||||||||||||||||||||||||||||
Incentive | ||||||||||||||||||||||||||||||||
Equity | Plan Awards | |||||||||||||||||||||||||||||||
Incentive | Market or | |||||||||||||||||||||||||||||||
Plan Awards | Payout Value | |||||||||||||||||||||||||||||||
Number | Number | Number | Of | |||||||||||||||||||||||||||||
of | of | Of | Unearned | |||||||||||||||||||||||||||||
Securities | Securities | Unearned | Shares, Units | |||||||||||||||||||||||||||||
Underlying | Underlying | Shares, Units or | or | |||||||||||||||||||||||||||||
Unexercised | Unexercised | Option | Other Rights | Other Rights | ||||||||||||||||||||||||||||
Options | Options | Exercise | Option | That Have | That Have | |||||||||||||||||||||||||||
Exercisable | Unexercisable | Price | Expiration | Not Vested (b) | Not Vested | |||||||||||||||||||||||||||
Name | (#) | (#) | ($) | Date (a) | (#) | ($) | ||||||||||||||||||||||||||
Michael J. | 100,000 | $ | 9.4532 | 1/15/08 | ||||||||||||||||||||||||||||
Kowalski | 140,000 | $ | 9.4844 | 1/14/09 | ||||||||||||||||||||||||||||
400,000 | $ | 14.9766 | 1/21/09 | |||||||||||||||||||||||||||||
150,000 | $ | 42.0782 | 1/20/10 | |||||||||||||||||||||||||||||
100,000 | $ | 32.4700 | 1/18/11 | |||||||||||||||||||||||||||||
150,000 | $ | 34.0200 | 1/16/12 | |||||||||||||||||||||||||||||
195,000 | $ | 25.8450 | 1/16/13 | |||||||||||||||||||||||||||||
135,000 | 45,000 | $ | 39.7500 | 1/15/14 | ||||||||||||||||||||||||||||
57,500 | 57,500 | $ | 31.4900 | 1/31/15 | ||||||||||||||||||||||||||||
21,250 | 63,750 | $ | 37.8350 | 1/31/16 | ||||||||||||||||||||||||||||
0 | 77,000 | $ | 40.1500 | 1/18/17 | ||||||||||||||||||||||||||||
92,000 / 92,000 | (c) | $3,611,920 | (f) | |||||||||||||||||||||||||||||
44,240 / 79,000 | (d) | $1,736,862 | (g) | |||||||||||||||||||||||||||||
37,000 / 74,000 | (e) | $1,452,620 | (h) | |||||||||||||||||||||||||||||
James E. Quinn | 100,000 | $ | 9.4844 | 1/14/09 | ||||||||||||||||||||||||||||
300,000 | $ | 14.9766 | 1/21/09 | |||||||||||||||||||||||||||||
100,000 | $ | 42.0782 | 1/20/10 | |||||||||||||||||||||||||||||
75,000 | $ | 32.4700 | 1/18/11 | |||||||||||||||||||||||||||||
110,000 | $ | 34.0200 | 1/16/12 | |||||||||||||||||||||||||||||
140,000 | $ | 25.8450 | 1/16/13 | |||||||||||||||||||||||||||||
86,250 | 28,750 | $ | 39.7500 | 1/15/14 | ||||||||||||||||||||||||||||
36,250 | 36,250 | $ | 31.4900 | 1/31/15 | ||||||||||||||||||||||||||||
12,750 | 38,250 | $ | 37.8350 | 1/31/16 | ||||||||||||||||||||||||||||
0 | 49,000 | $ | 40.1500 | 1/18/17 | ||||||||||||||||||||||||||||
58,000 / 58,000 | (c) | $2,277,080 | (f) | |||||||||||||||||||||||||||||
26,880 / 48,000 | (d) | $1,055,309 | (g) | |||||||||||||||||||||||||||||
23,250 / 46,500 | (e) | $912,795 | (h) | |||||||||||||||||||||||||||||
Beth O. Canavan | 14,000 | $ | 14.9766 | 1/21/09 | ||||||||||||||||||||||||||||
50,000 | $ | 42.0782 | 1/20/10 | |||||||||||||||||||||||||||||
50,000 | $ | 32.4700 | 1/18/11 | |||||||||||||||||||||||||||||
75,000 | $ | 34.0200 | 1/16/12 | |||||||||||||||||||||||||||||
85,000 | $ | 25.8450 | 1/16/13 | |||||||||||||||||||||||||||||
41,250 | 13,750 | $ | 39.7500 | 1/15/14 | ||||||||||||||||||||||||||||
20,000 | 20,000 | $ | 31.4900 | 1/31/15 | ||||||||||||||||||||||||||||
7,250 | 21,750 | $ | 37.8350 | 1/31/16 | ||||||||||||||||||||||||||||
0 | 28,000 | $ | 40.1500 | 1/18/17 | ||||||||||||||||||||||||||||
32,000 / 32,000 | (c) | $1,256,320 | (f) | |||||||||||||||||||||||||||||
15,120 / 27,000 | (d) | $593,611 | (g) | |||||||||||||||||||||||||||||
13,250 / 26,500 | (e) | $520,195 | (h) | |||||||||||||||||||||||||||||
PS-36
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||
Equity | ||||||||||||||||||||||||||||||||
Incentive | ||||||||||||||||||||||||||||||||
Equity | Plan Awards | |||||||||||||||||||||||||||||||
Incentive | Market or | |||||||||||||||||||||||||||||||
Plan Awards | Payout Value | |||||||||||||||||||||||||||||||
Number | Number | Number | Of | |||||||||||||||||||||||||||||
Of | Of | Of | Unearned | |||||||||||||||||||||||||||||
Securities | Securities | Unearned | Shares, Units | |||||||||||||||||||||||||||||
Underlying | Underlying | Shares, Units or | or | |||||||||||||||||||||||||||||
Unexercised | Unexercised | Option | Other Rights | Other Rights | ||||||||||||||||||||||||||||
Options | Options | Exercise | Option | That Have | That Have | |||||||||||||||||||||||||||
Exercisable | Unexercisable | Price | Expiration | Not Vested (b) | Not Vested | |||||||||||||||||||||||||||
Name | (#) | (#) | ($) | Date (a) | (#) | ($) | ||||||||||||||||||||||||||
James N. | 100,000 | $ | 14.9766 | 1/21/09 | ||||||||||||||||||||||||||||
Fernandez | 70,000 | $ | 42.0782 | 1/20/10 | ||||||||||||||||||||||||||||
65,000 | $ | 32.4700 | 1/18/11 | |||||||||||||||||||||||||||||
100,000 | $ | 34.0200 | 1/16/12 | |||||||||||||||||||||||||||||
118,000 | $ | 25.8450 | 1/16/13 | |||||||||||||||||||||||||||||
63,750 | 21,250 | $ | 39.7500 | 1/15/14 | ||||||||||||||||||||||||||||
27,500 | 27,500 | $ | 31.4900 | 1/31/15 | ||||||||||||||||||||||||||||
10,250 | 30,750 | $ | 37.8350 | 1/31/16 | ||||||||||||||||||||||||||||
0 | 39,000 | $ | 40.1500 | 1/18/17 | ||||||||||||||||||||||||||||
44,000 / 44,000 | (c) | $1,727,440 | (f) | |||||||||||||||||||||||||||||
21,840 / 39,000 | (d) | $857,438 | (g) | |||||||||||||||||||||||||||||
18,750 / 37,500 | (e) | $736,125 | (h) | |||||||||||||||||||||||||||||
Jon M. | 6,000 | $ | 42.0782 | 1/20/10 | ||||||||||||||||||||||||||||
King | 5,000 | $ | 32.4700 | 1/18/11 | ||||||||||||||||||||||||||||
7,000 | $ | 34.0200 | 1/16/12 | |||||||||||||||||||||||||||||
3,000 | $ | 35.9550 | 3/21/12 | |||||||||||||||||||||||||||||
2,500 | $ | 25.8450 | 1/16/13 | |||||||||||||||||||||||||||||
7,500 | 7,500 | $ | 25.9400 | 3/20/13 | ||||||||||||||||||||||||||||
26,250 | 8,750 | $ | 39.7500 | 1/15/14 | ||||||||||||||||||||||||||||
15,000 | 15,000 | $ | 31.4900 | 1/31/15 | ||||||||||||||||||||||||||||
5,750 | 17,250 | $ | 37.8350 | 1/31/16 | ||||||||||||||||||||||||||||
0 | 10,000 | $ | 33.7850 | 6/07/16 | ||||||||||||||||||||||||||||
0 | 26,000 | $ | 40.1500 | 1/18/17 | ||||||||||||||||||||||||||||
24,000 / 24,000 | (c) | $942,240 | (f) | |||||||||||||||||||||||||||||
11,760 / 21,000 | (d) | $461,698 | (g) | |||||||||||||||||||||||||||||
12,500 / 25,000 | (e) | $490,750 | (h) | |||||||||||||||||||||||||||||
PS-37
(a) | For any option reported, the grant date was ten (10) years prior to the expiration date shown except for the options expiring on 1/15/08 and 1/14/09, in which the grant date was eleven (11) years prior to the expiration. Because all options vest 25% per year over the four-year period following a grant date, the option expiring on 1/21/2009 would have been fully vested on 1/21/03, 75% vested on 1/21/02, 50% vested on 1/21/01 and 25% vested on 1/21/00. | |
(b) | In this column, the number to the left of the slash mark indicates the number of shares on which the payout value shown in the column to the right was computed. See Notes (f), (g) and (h) below. The number to the right of the slash mark indicates the total number of shares that would vest upon attainment of all performance objectives over the three-year performance period. | |
(c) | This grant will vest on 1/31/08. | |
(d) | This grant will vest on 1/31/09. | |
(e) | This grant will vest on 1/31/10. | |
(f) | This value has been computed at maximum based upon Company EPS and ROA performance in fiscal years 2005 and 2006. The computation assumes that 85% percent of the units will vest based on EPS performance; the resulting number of shares was then increased by 15% for ROA performance. The resulting value was computed on the basis of the stock closing price on January 31, 2007, $39.26. | |
(g) | This value has been computed based upon Company EPS and ROA performance in fiscal year 2006. The computation assumes that 48.7% of the units will vest based on EPS performance; the resulting number of shares was then increased by 15% for ROA performance. The resulting value was computed on the basis of the stock closing price on January 31, 2007, $39.26. | |
(h) | This value has been computed at EPS threshold and on the assumption that the ROA performance goal will have been achieved. |
PS-38
Option Awards | Stock Awards | |||||||||||||||
Number of | Value | Number of | Value | |||||||||||||
Shares | Realized | Shares | Realized | |||||||||||||
Acquired on | on | Acquired on | on | |||||||||||||
Exercise | Exercise | Vesting | Vesting | |||||||||||||
Name | (#) | ($) | (#) | ($) | ||||||||||||
Michael J. Kowalski | 100,000 | (a) | $ | 2,721,000 | 0 | $ | 0 | |||||||||
James E. Quinn | 60,000 | (b) | $ | 1,757,808 | 0 | $ | 0 | |||||||||
Beth O. Canavan | 0 | $ | 0 | 0 | $ | 0 | ||||||||||
James N. Fernandez | 0 | $ | 0 | 0 | $ | 0 | ||||||||||
Jon M. King | 0 | $ | 0 | 0 | $ | 0 | ||||||||||
(a) | Weighted-average holding period for options exercised: 10.8 years. | |
(b) | Weighted-average holding period for options exercised: 9 years. |
PS-39
Actuarial | Payments | |||||||||||||||
Present Value | During | |||||||||||||||
Number | of | Last | ||||||||||||||
of Years | Accumulated | Fiscal | ||||||||||||||
Credited | Benefits | Year | ||||||||||||||
Name | Plan Name (a) | Service | ($) | ($) | ||||||||||||
Pension Plan | 28 | (b) | (d) | $ | 449,694 | $ | 0 | |||||||||
Excess Plan | 28 | (b) | (d) | $ | 4,215,041 | $ | 0 | |||||||||
Michael J. Kowalski | Supplemental Plan | 28 | (b) | (d) | $ | 1,693,182 | $ | 0 | ||||||||
Pension Plan | 20 | (d) | $ | 323,522 | $ | 0 | ||||||||||
Excess Plan | 20 | (d) | $ | 1,782,764 | $ | 0 | ||||||||||
James E. Quinn | Supplemental Plan | 20 | (d) | $ | 1,157,452 | $ | 0 | |||||||||
Pension Plan | 19 | $ | 293,964 | $ | 0 | |||||||||||
Excess Plan | 19 | $ | 835,163 | $ | 0 | |||||||||||
Beth O. Canavan | Supplemental Plan | 19 | $ | 26,413 | $ | 0 | ||||||||||
Pension Plan | 28 | (c) | $ | 359,575 | $ | 0 | ||||||||||
Excess Plan | 28 | (c) | $ | 1,557,525 | $ | 0 | ||||||||||
James N. Fernandez | Supplemental Plan | 28 | (c) | $ | 633,704 | $ | 0 | |||||||||
Pension Plan | 16 | $ | 200,499 | $ | 0 | |||||||||||
Excess Plan | 16 | $ | 334,713 | $ | 0 | |||||||||||
Jon M. King | Supplemental Plan | 16 | $ | 61,501 | $ | 0 | ||||||||||
(a) | The formal names of the plans are: the Tiffany and Company Employee Pension Plan (“Pension Plan”), the Tiffany and Company Un-funded Retirement Plan to Recognize Compensation in Excess of Internal Revenue Code Limits (“Excess Plan”) and the Tiffany and Company Supplemental Retirement Income Plan (“Supplemental Plan”). | |
(b) | Mr. Kowalski has been credited with 6.4 years of service for his period of employment prior to October 15, 1984 with the corporation that was, immediately before that date, Tiffany’s parent corporation. The effect of this credit has been to augment the present value of his accumulated benefit under the retirement plans as follows (these amounts are included in the Pension Benefits table above): |
Pension Plan: | $ | 100,366 | ||
Excess Plan: | $ | 940,748 | ||
Supplemental Plan: | $ | 54,952 |
(c) | Mr. Fernandez has been credited with 6.3 years of service for his period of employment prior to October 15, 1984 with the corporation that was, immediately before that date, Tiffany’s parent corporation. The effect of this credit has been to augment the present value of his accumulated benefit under the retirement plans as follows (these amounts are included in the Pension Benefits table above): |
Pension Plan: | $ | 79,441 | ||
Excess Plan: | $ | 344,104 | ||
Supplemental Plan: | $ | 34,974 |
PS-40
(d) | Mr. Kowalski and Mr. Quinn are currently eligible for early retirement under each of the Pension, Excess and Supplemental Plan. They are each eligible for early retirement because they have reached age 55 and have accumulated at least ten years of credited service. The normal retirement age under each of the plans is 65. However those eligible for early retirement may retire with a reduced benefit. For retirement at age 55, the reduction in benefit would be 40%, as compared to the benefit at age 65. The benefit reduction for early retirement is computed as follows: |
• | For retirement between age 60 and age 65, the executive’s age at early retirement is subtracted from 65; for each year in the remainder the benefit is reduced by five percent; | ||
• | Thus, for retirement at age 60 the reduction is 25%; | ||
• | For retirement between age 55 and age 60, the reduction is 25% plus an additional three percent for each year by which retirement precedes age 60. |
• | it is a “tax-qualified plan,” that is, it is designed to comply with those provisions of the Internal Revenue Code applicable to retirement plans; | ||
• | it is a “funded” plan (money has been deposited into a trust that is insulated from the claims of the Company’s creditors); | ||
• | it is available at no cost to regular full-time employees of Tiffany hired on or before December 31, 2005; | ||
• | all executive officers are participants; | ||
• | benefits vest after five years of service; |
PS-41
• | benefits are based on the participant’s average final compensation and years of service; | ||
• | benefits are subject to Internal Revenue Code limitations on the total benefit and the amount that may be included in average final compensation; and | ||
• | benefits are not offset by Social Security. |
• | it is not a qualified plan and is not subject to Internal Revenue Code limitations; | ||
• | it is not funded (benefits are paid out of the Company’s general assets, which are subject to the claims of the Company’s creditors); | ||
• | it is available only to employees whose benefits under the Pension Plan are affected by Internal Revenue Code limitations, including all executive officers; | ||
• | it uses the same retirement benefit formula as is set forth in the Pension Plan, but includes in average final compensation earnings that are excluded under the Pension Plan due to Internal Revenue Code Limitations; | ||
• | benefits are offset by benefits payable under the Pension Plan; | ||
• | benefits are not offset by benefits payable under Social Security; | ||
• | benefits vest after five years of service; | ||
• | benefits are subject to forfeiture if employment is terminated for cause; and | ||
• | for those who leave Tiffany prior to age 65, benefits are subject to forfeiture for failure to execute and adhere to non-competition and confidentiality covenants. |
• | it is not a qualified plan and is not subject to Internal Revenue Code limitations; | ||
• | it is not funded (benefits are are paid out of the Company’s general assets, which are subject to the claims of the Company’s creditors); | ||
• | it is available only to executive officers; | ||
• | it uses a different benefit formula than that used by the Pension Plan and the Excess Plan; |
PS-42
• | benefits are offset by benefits payable under the Pension Plan and the Excess Plan; | ||
• | benefits are offset by benefits payable under Social Security; | ||
• | benefits do not vest until executive attains age 55 while employed by Tiffany and until he or she has provided 10 years of service (benefits will vest earlier on a change in control as defined in the Retention Agreements); | ||
• | benefits are subject to forfeiture if employment is terminated for cause; and | ||
• | for those who leave Tiffany prior to age 65, benefits are subject to forfeiture for failure to execute and adhere to non-competition and confidentiality covenants. |
Combined Annual Benefit As a Percentage of Average Final | ||||
Years of Service | Compensation | |||
less than 10 | (a | ) | ||
10-14 | 20% | |||
15-19 | 35% | |||
20-24 | 50% | |||
25 or more | 60% | |||
(a) | The formula for benefits under the Pension and Excess Plans is a function of years of service and covered compensation (subject to Internal Revenue Code limitations in the case of the Pension Plan) and not any specific percentage of the participant’s average final compensation (see above). A retiree with less than ten years of service would not receive any benefit under the Supplemental Plan but could expect to receive a benefit of approximately 13% of average final compensation under the Pension and Excess Plans. |
PS-43
(Fiscal 2006)
Executive | Aggregate | |||||||||||||||||||
Contribution | Registrant | Aggregate | Balance | |||||||||||||||||
In | Contribution | Earnings | Aggregate | At | ||||||||||||||||
Last Fiscal Year | In | In | Withdrawals/ | Last Fiscal Year | ||||||||||||||||
(a) | Last Fiscal Year | Last Fiscal Year | Distributions | End | ||||||||||||||||
Name | ($) | ($) | ($) | ($) | ($) | |||||||||||||||
Michael J. Kowalski | $ | 48,619 | $ | 0 | $ | 15,737 | $ | 50,782 | $ | 309,259 | ||||||||||
James E. Quinn | $ | 40,875 | $ | 0 | $ | 112,509 | $ | 0 | $ | 1,152,830 | ||||||||||
Beth O. Canavan | $ | 78,941 | $ | 0 | $ | 33,424 | $ | 47,119 | $ | 445,833 | ||||||||||
James N. Fernandez | $ | 182,777 | $ | 0 | $ | 79,179 | $ | 26,890 | $ | 796,959 | ||||||||||
Jon M. King | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||
(a) | This column includes amounts that are also included in the amounts shown in the columns headed “Salary” or “Non-Equity Incentive Plan Compensation” in the Summary Compensation Table. |
• | Participation is open to directors and executive officers of the Company as well as other vice presidents and “director-level” employees of Tiffany; | ||
• | Directors of the Company may defer all of their cash compensation; | ||
• | Employees may defer up to 50% of their salary and up to 90% of their cash annual incentive or bonus compensation; | ||
• | The Company makes no contribution and guarantees no specific return on money deferred; | ||
• | Deferrals are placed in a trust that is subject to the claims of Tiffany’s creditors; | ||
• | Deferred compensation is invested by the trustee in various mutual funds as directed by Tiffany, which follows the directions of participants; | ||
• | The value in the participant’s account (and Tiffany’s responsibility for payment) is measured by the return on the investments selected by the participant; | ||
• | Deferrals may be made to a Retirement Account and to accounts which will pay out on specified “in-service” dates; | ||
• | Participants must elect to make deferrals in advance of the period during which the deferred compensation is earned; | ||
• | Retirement Accounts pay out in 5, 10, 15 or 20 annual installments after retirement as elected in advance by the participant; | ||
• | Except in the case of previously elected “in-service” payout dates, participants are not allowed to withdraw funds while they remain employed other than for unforeseeable emergencies and then only with the permission of Tiffany’s Board; |
PS-44
• | Termination of employment generally triggers a distribution of all account balances other than, in the case of retirement or disability, retirement balances; and | ||
• | Most participants, including all executive officers, will not receive any distribution from the plan until six months following termination of employment; this six-month limitation does not apply to pre-2005 balances. |
PS-45
Vesting On Change in Control | Payable or Vesting On Termination of Employment | ||||||||||||||||||||||||||||||||||||
With or Without Termination of Employment | Following Change in Control | ||||||||||||||||||||||||||||||||||||
Early | |||||||||||||||||||||||||||||||||||||
Early Vesting | Vesting | Early Vesting | Cash Value | ||||||||||||||||||||||||||||||||||
of | of | of | Cash | of | |||||||||||||||||||||||||||||||||
Supplemental | Stock | Restricted | Severance | Increased | Health | Excise Tax | |||||||||||||||||||||||||||||||
Plan | Options | Stock Units | Payment | Service | Benefits | Gross Up | |||||||||||||||||||||||||||||||
Name | (a) | (b) | (c) | (d) | Credit | (g) | (h) | ||||||||||||||||||||||||||||||
Michael J. Kowalski | $ | 1,693,182 | $ | 537,619 | $ | 9,618,700 | $ | 8,250,000 | $ | 3,960,049 | (e) | $ | 53,988 | $ | 8,524,510 | ||||||||||||||||||||||
James E. Quinn | $ | 0 | $ | 336,169 | $ | 5,987,150 | $ | 5,106,000 | $ | 2,286,064 | (e) | $ | 53,988 | $ | 5,329,844 | ||||||||||||||||||||||
Beth O. Canavan | $ | 26,413 | $ | 186,394 | $ | 3,356,730 | $ | 2,260,000 | $ | 1,267,917 | (f) | $ | 35,992 | $ | 2,793,361 | ||||||||||||||||||||||
�� | |||||||||||||||||||||||||||||||||||||
James N. Fernandez | $ | 633,704 | $ | 257,494 | $ | 4,730,830 | $ | 2,820,000 | $ | 1,321,682 | (e) | $ | 35,992 | $ | 3,561,241 | ||||||||||||||||||||||
Jon M. King | $ | 61,501 | $ | 295,781 | $ | 2,748,200 | $ | 1,860,000 | $ | 450,502 | (e) | $ | 12,581 | $ | 2,019,892 | ||||||||||||||||||||||
(a) | Absent a change in control the Supplemental Plan will vest only when the participant attains the in-service age of 55 years with ten years of service. | |
(b) | The value of early vesting of stock options was determined using $39.26, the closing value of the Company’s common stock on January 31, 2007. | |
(c) | The value of early vesting of performance-based restricted stock units was determined using $39.26, the closing value of the Company’s common stock on January 31, 2007. In the event of a change in control such units vest at the maximum number of shares. | |
(d) | Cash severance payments were determined by multiplying the sum of (i) actual salary and (ii) the highest annual incentive award or bonus paid in Fiscal 2006, 2005 and 2004 by three, in the case of Mr. Kowalski and Mr. Quinn, or by two, in the case of the other executive officers. | |
(e) | The addition of two or three years of service credit, as applicable, would not have entitled any of these executives to a higher percentage pension benefit under the Supplemental Plan. The cash value of the increased service credit has been calculated based on the change in average final compensation that would result from two or three years of additional employment at the salary and incentive award/bonus referred to in note (d) above. | |
(f) | The addition of two years of service credit would have entitled this executive to 50% of average final compensation, as opposed to 35%, under the Supplemental Plan. For this reason, the cash value of her increased service credit has been calculated based upon this increase in percentage |
PS-46
entitlement as well as the change in average final compensation that would result from two years of additional employment at the salary and incentive award/bonus referred to in note (c) above. | ||
(g) | The amounts shown in this column represent two or three years of health-care coverage determined on the basis of the Company’s “COBRA” rates for post-employment continuation coverage. Such rates are available to all participating employees who terminate from employment and were determined on the basis of the coverage elections made by the executive officer. | |
(h) | The excise tax gross-up was determined with reference to the excise tax under Section 4999 of the Internal Revenue Code, a review of W-2 for the individuals in question for the necessary historical period. |
• | Two (for executives with two year terms of employment) or three (for executives with three year terms of employment) times the sum of salary and the highest annual incentive award or bonus paid for the preceding three fiscal years, as severance; | ||
• | A payment equal to the present value of two or three years of additional years of service credit at the salary and annual incentive award or bonus referred to above under the Supplemental Plan; and | ||
• | Two or three years of benefits continuation under Tiffany’s health and welfare plans. |
TIFFANY & CO.
PS-47
• | Any person or group of persons acting in concert (and by person we mean an individual or organization) acquires thirty-five percent or more in voting power or stock of the Company, including the acquisition of any right, option, warrant or other right to obtain such voting power or stock, whether or not presently exercisable; | ||
• | A majority of the Board is, for any reason, not made up of individuals who were either on the Board on January 21, 1988, or, if they became members of the Board after that date, were approved by the directors; or | ||
• | Any other circumstance which the Board deems to be a “change in control.” |
TIFFANY & CO.
PS-48
Fiscal 2006
Change in Pension Value | ||||||||||||||||||||
Fees Earned or | and Nonqualified | All Other | ||||||||||||||||||
Paid in Cash | Option Awards | Deferred Compensation | Compensation | Total | ||||||||||||||||
Name | ($)(a) | ($) (b) (c) | Earnings (d) | ($) | ($) | |||||||||||||||
Rose Marie Bravo | $ | 62,000 | $ | 182,566 | $ | 15,459 | $ | 0 | $ | 260,025 | ||||||||||
William R. Chaney | $ | 62,000 | $ | 293,313 | $ | 0 | $ | 0 | $ | 355,313 | ||||||||||
Samuel L. Hayes III | $ | 82,000 | $ | 182,566 | $ | 0 | $ | 0 | $ | 264,566 | ||||||||||
Abby F. Kohnstamm | $ | 62,000 | $ | 182,566 | N/A | $ | 0 | $ | 244,566 | |||||||||||
Charles K. Marquis | $ | 76,000 | $ | 182,566 | $ | 20,011 | $ | 0 | $ | 278,577 | ||||||||||
J. Thomas Presby | $ | 93,000 | $ | 201,148 | N/A | $ | 0 | $ | 294,148 | |||||||||||
William A. Shutzer | $ | 62,000 | $ | 182,566 | $ | 11,692 | $ | 0 | $ | 256,258 | ||||||||||
(a) | Includes amounts deferred under the Executive Deferral Plan. | |
(b) | Amounts shown represent the dollar amount of compensation cost recognized in Fiscal 2006 for stock options granted for Fiscal 2006 and previous fiscal years in accordance with SFAS No. 123R. In valuing option awards the Company made certain assumptions. For a discussion of those assumptions, please refer to Part II of the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2007. See Note O. “STOCK COMPENSATION PLANS”, in Notes to Consolidated Financial Statements, under Item 8. Financial Statements and Supplementary Data. | |
(c) | Supplementary Table:Outstanding Director Option Awards at Fiscal Year End |
Aggregate Number of Option | ||||
Awards Outstanding at Fiscal Year | ||||
End | ||||
Name | (number of underlying shares) | |||
Rose Marie Bravo | 97,216 | |||
William R. Chaney | 197,500 | |||
Samuel L. Hayes III | 151,228 | |||
Abby F. Kohnstamm | 60,000 | |||
Charles K. Marquis | 151,228 | |||
J. Thomas Presby | 45,000 | |||
William A. Shutzer | 112,876 | |||
(d) | The actuarial valuation shown takes into account the current age of the director and is based on the following assumptions consistent with those used in preparing the financial statements: 1994 Group Mortality Table, Male & Female; discount rate of 6.00% and retirement age of 65 (if the director is over age 65, the director is assumed to retire on January 31, 2007. Where a “0” appears in this column it is because there was a decline in value. In the case of Mr. Chaney, the decline was approximately $9,643. In the case of Professor Hayes, the decline was approximately $10,649. |
TIFFANY & CO.
PS-49
• | An annual retainer of $50,000; | ||
• | An additional annual retainer of $20,000, $10,000 or $5,000 to the chairperson of the Audit, Compensation, or Nominating/Corporate Governance Committee, respectively; | ||
• | A per-meeting-attended fee of $2,000 for meetings attended in person (no fee is paid for attendance at any committee or subcommittee meetings which occur on the same day as a meeting of the full Board); | ||
• | A fee of $1,000 for each telephonic meeting in which the director participates; | ||
• | Stock options, as discussed below; and | ||
• | A retirement benefit, also discussed below. |
Director | Registrant | Aggregate Balance | ||||||||||||||||||
Contribution | Contribution | Aggregate Earnings | Aggregate | At | ||||||||||||||||
In | In | In | Withdrawals/ | Last Fiscal Year | ||||||||||||||||
Last Fiscal Year | Last Fiscal Year | Last Fiscal Year | Distributions | End | ||||||||||||||||
Name | ($) | ($) | ($) | ($) | ($) | |||||||||||||||
Charles K. Marquis | $ | 0 | $ | 0 | $ | 43,123 | $ | 0 | $ | 468,762 | ||||||||||
William A. Shutzer | $ | 62,000 | $ | 0 | $ | 80,619 | $ | 0 | $ | 627,468 | ||||||||||
TIFFANY & CO.
PS-50
![(PERFORMANCE GRAPH)](https://capedge.com/proxy/DEF 14A/0000950123-07-005332/y33025y3302501.gif)
ANNUAL RETURN PERCENTAGE | ||||||||||||||||||||
Years Ending | ||||||||||||||||||||
Company / Index | 1/31/03 | 1/31/04 | 1/31/05 | 1/31/06 | 1/31/07 | |||||||||||||||
Tiffany & Co. | -34.50 | 71.45 | -20.17 | 20.95 | 5.26 | |||||||||||||||
S&P 500 Index | -23.02 | 34.57 | 6.23 | 10.38 | 14.51 | |||||||||||||||
S&P 500 Consumer Discretionary Index | -25.66 | 40.94 | 9.39 | -0.59 | 19.85 | |||||||||||||||
Peer Company Group | -9.74 | 86.00 | 27.45 | 36.90 | 29.75 |
INDEXED RETURNS | ||||||||||||||||||||||||
Base | Years Ending | |||||||||||||||||||||||
Period | ||||||||||||||||||||||||
Company / Index | 1/31/02 | 1/31/03 | 1/31/04 | 1/31/05 | 1/31/06 | 1/31/07 | ||||||||||||||||||
Tiffany & Co. | 100 | 65.50 | 112.31 | 89.65 | 108.43 | 114.13 | ||||||||||||||||||
S&P 500 Index | 100 | 76.98 | 103.60 | 110.05 | 121.47 | 139.10 | ||||||||||||||||||
S&P 500 Consumer Discretionary Index | 100 | 74.34 | 104.77 | 114.61 | 113.94 | 136.55 | ||||||||||||||||||
Peer Company Group | 100 | 90.26 | 167.88 | 213.97 | 292.92 | 380.07 | ||||||||||||||||||
TIFFANY & CO.
PS-51
TIFFANY & CO.
PS-52
Michael J. Kowalski | Mr. Kowalski, 55, is Chairman of the Board and Chief Executive Officer of Tiffany & Co. He succeeded William R. Chaney as Chairman at the end of fiscal year 2002 and as Chief Executive Officer in February 1999. Prior to his appointment as President in January 1996, he was an Executive Vice President of Tiffany & Co., a position he had held since March 1992. Mr. Kowalski also served as Tiffany & Co.’s Chief Operating Officer from January 1997 until his appointment as Chief Executive Officer. He became a director of Tiffany & Co. in January 1995. Mr. Kowalski also serves on the board of The Bank of New York. The Bank of New York is Tiffany’s principal banking relationship, serving as Administrative Agent and a lender under a Revolving Credit Facility and as trustee of Tiffany’s Employee Pension Plan. | |
Rose Marie Bravo | Ms. Bravo, 56, is Vice Chairman of Burberry Limited and is a member of its board of directors. Ms. Bravo previously served as Chief Executive of Burberry Limited from 1997 until 2006 and as President of Saks Fifth Avenue from 1992 to 1997. Ms. Bravo became a director of Tiffany & Co. in October 1997 when she was selected by the Board to fill a newly created directorship. She also serves on the Board of Directors of Estee Lauder Companies Inc. | |
William R. Chaney | Mr. Chaney, 74, is the former Chairman of the Board. He resigned that office effective January 31, 2003. Mr. Chaney joined Tiffany in January 1980 as a member of the Board and was named Chairman and Chief Executive Officer of Tiffany & Co. in August 1984. He resigned as Chief Executive Officer effective February 1, 1999. Prior to joining Tiffany, he served as an executive officer of Avon Products, Inc. | |
Gary E. Costley | Dr. Costley, 63, has been nominated to replace Prof. Samuel Hayes who is retiring as a director. SeeRetiring Directorbelow. Dr. Costley is a co-founder and managing director of C&G Capital and Management, LLC, which provides capital and management to health, medical and nutritional products and services companies. He was Chairman and Chief Executive Officer of International Multifoods Corporation, a manufacturer and marketer of branded consumer food and food service products from November 2001 until June 2004, and Chairman, President and Chief Executive Officer from 1997 through 2001. He is a director of four public companies: The Principal Financial Group, |
TIFFANY & CO.
PS-53
Pharmacopeia Drug Discovery, Inc., Accelrys, Inc. and Prestige Brand Holdings, Inc. | ||
Abby F. Kohnstamm | Ms. Kohnstamm, 53, is the President and founder of Abby F. Kohnstamm & Associates, Inc. a marketing and consulting firm. Prior to establishing her company, Ms. Kohnstamm served as Senior Vice President, Marketing of IBM Corporation from 1993 through 2005. In that capacity, she had overall responsibility for all aspects of marketing across IBM. Ms. Kohnstamm remains an executive consultant to IBM. In addition, Ms. Kohnstamm held a number of senior marketing positions at American Express from 1979 through 1993. Ms. Kohnstamm also serves on the Board of Directors of the Progressive Corporation, the Board of Trustees of Tufts University and the Board of Overseers at New York University’s Stern School of Business. She became a director of Tiffany & Co. in July 2001, when she was selected by the Board to replace a retiring director. IBM Corporation and its affiliated companies provide data-processing and communication hardware, software and services to Tiffany and purchase business gifts from Tiffany. | |
Charles K. Marquis | Mr. Marquis, 64, is a Senior Advisor to Investcorp International, Inc. From 1974 through 1998, he was a partner in the law firm of Gibson, Dunn & Crutcher L.L.P. He was elected a director of Tiffany & Co. in 1984. Mr. Marquis also serves as a director and nominating/corporate governance chair of CSK Auto Corporation. | |
J. Thomas Presby | Mr. Presby, 67, has used his business experience and professional qualifications to forge a second career of board service since he retired in 2002 as a partner in Deloitte Touche Tohmatsu. At Deloitte he held numerous positions in the United States and abroad, including the posts of Deputy Chairman and Chief Operating Officer. He was selected to be a director of the Company in November 2003 by the Board to fill a newly created position. He now serves as a director and audit committee chair for the Company and American Eagle Outfitters, AMVESCAP, PLC, First Solar, Inc., TurboChef Technologies, Inc. and World Fuel Services, Inc. and finds that he is able to leverage the experience of managing audit committees to the benefit of each board on which he serves and the efficient use of his own time and that of his colleagues. He is a certified public accountant and a holder of the NACD Certificate of Director Education. | |
James E. Quinn | Mr. Quinn, 55, is President of Tiffany & Co., responsible for Tiffany & Co. sales outside the U.S. and Canada, worldwide real estate operations and Little Switzerland, Inc. Prior to his appointment as Vice Chairman in January 1998, Mr. Quinn was an Executive Vice President of Tiffany & Co., a position he had held since March 1992. He became a director of Tiffany & Co. in January 1995. He also serves as a member of the Board of Directors and nominating committee chair of BNY Hamilton Funds, Inc. He is also a member of the Board of Directors of Mutual of America Capital Management, Inc. | |
William A. Shutzer | Mr. Shutzer, 60, is a Senior Managing Director of Evercore Partners, a financial advisory and private equity firm. He previously served as a Managing Director of Lehman Brothers from 2000 through 2003, a Partner in Thomas Weisel Partners LLC, a merchant banking firm, from 1999 through 2000, as Executive Vice President of ING Baring Furman Selz LLC from 1998 through 1999, President of Furman Selz Inc. from 1995 through 1997 and as a Managing |
TIFFANY & CO.
PS-54
Director of Lehman Brothers and its predecessors from 1978 through 1994. He was elected a director of the Company in 1984. Mr. Shutzer is also a member of the Boards of Directors of Jupiter Media Corp., CSK Auto Corporation. He also serves as a director and compensation committee chair of TurboChef Technologies, Inc. | ||
Retiring Director. | Samuel L. Hayes, III, 72, will retire as a director when he is succeeded by his replacement. Prof. Hayes was the Jacob H. Schiff Professor of Investment Banking at the Harvard Business School from 1975 to 1998, when he became the Jacob H. Schiff Professor Emeritus. He was elected a director of Tiffany & Co. in 1984. He also serves as independent chair of the Board of Directors of the Eaton Vance Group of Funds and on the board of Telect, Inc. and Yakima, Inc. |
TIFFANY & CO.
PS-55
TIFFANY & CO.
PS-56
Secretary
April 12, 2007
TIFFANY & CO.
PS-57
Please Mark Here for Address Change or Comments | o | |
SEE REVERSE SIDE |
FOR | AGAINST | ABSTAIN | ||||
01 Michael J. Kowalski | o | o | o | |||
FOR | AGAINST | ABSTAIN | ||||
02 Rose Marie Bravo | o | o | o | |||
FOR | AGAINST | ABSTAIN | ||||
03 William R. Chaney | o | o | o | |||
FOR | AGAINST | ABSTAIN | ||||
04 Gary E. Costley | o | o | o |
FOR | AGAINST | ABSTAIN | ||||
05 Abby F. Kohnstamm | o | o | o | |||
FOR | AGAINST | ABSTAIN | ||||
06 Charles K. Marquis | o | o | o | |||
FOR | AGAINST | ABSTAIN | ||||
07 J. Thomas Presby | o | o | o | |||
FOR | AGAINST | ABSTAIN | ||||
08 James E. Quinn | o | o | o |
FOR | AGAINST | ABSTAIN | ||||||||||
09 William A. Shutzer | o | o | o | |||||||||
FOR | AGAINST | ABSTAIN | ||||||||||
Item 2: | Ratification of the selection of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for fiscal year 2007. | o | o | o | ||||||||
I PLAN TO ATTEND THE ANNUAL MEETING | o |
Signature | Signature | Date | ||||||||
BOTH ARE AVAILABLE 24 HOURS A DAY, 7 DAYS A WEEK.
the day prior to annual meeting day.
as if you marked, signed and returned your proxy card.
INTERNET | TELEPHONE | |||||||
http://www.proxyvoting.com/tif | 1-866-540-5760 | |||||||
Use the internet to vote your proxy. Have your proxy card in hand when you access the web site. | OR | Use any touch-tone telephone to vote your proxy. Have your proxy card in hand when you call. | ||||||
To vote by mail, mark, sign and date your proxy card and return it in the enclosed postage-paid envelope.
THIS PROXY IS CONTINUED ON THE REVERSE SIDE
727 Fifth Avenue
New York, N.Y. 10022
THURSDAY, MAY 17, 2007
1. | Election of nine (9) directors to hold office until the next annual meeting of stockholders and until their respective successors have been elected and qualified; |
2. | Ratification of the selection of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for fiscal year 2007. |
Secretary
New York, New York
April 12, 2007