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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]
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[ ] | 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.
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for the Stockholder Meeting to be Held on May 20, 2010.
are available athttp://bnymellon.mobular.net/bnymellon/tif
• | The election of the Board; and | ||
• | Ratification of the selection of the independent registered public accounting firm to audit our Fiscal 2010 financial statements. |
• | Complete the enclosed form, called a “proxy card,” and mail it in the envelope provided; or | ||
• | Call the telephone number listed on your proxy card or notice and follow the pre-recorded instructions; or | ||
• | Use the Internet to vote by going to the Internet address listed on your proxy card or notice; have your proxy card or notice in hand as you will be prompted to enter your control number and to create and submit an electronic vote. |
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• | 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. |
• | 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. |
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• | 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 2010 financial statements. |
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Name and Address | Amount and Nature | Percent | ||||||||
of Beneficial Owner | of Beneficial Ownership (a) | of Class | ||||||||
Trian Fund Management, L.P. | 7,828,984 | (b) (c) | 6.19 | % | ||||||
280 Park Avenue, 41st Floor | ||||||||||
New York, NY 10017 | ||||||||||
BlackRock, Inc. | 7,053,871 | (d) | 5.58 | % | ||||||
55 East 52nd Street | ||||||||||
New York, NY 10055 |
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 Schedule 13D as of March 27, 2009 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 General Partner, LLC, Trian Partners Parallel Fund II, L.P., Trian Partners Parallel Fund II GP, L.P., Trian Partners Parallel Fund II General Partner, |
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LLC, Trian Fund Management, L.P., Trian Fund Management GP, LLC, Nelson Peltz, Peter W. May and Edward P. Garden. This information was updated on the basis of a Form 4 filed January 21, 2010 by Peter W. May and Trian Fund Management, L.P. |
c) | Peter W. May, referred to in Note (b) above, is a nominee of the Board for election as a director. See Item 1 — Election of Directors below. | |
d) | BlackRock, Inc. (“Blackrock”) reported such beneficial ownership to the SEC on its Amendment to Schedule 13G as of December 31, 2009 and stated that, as a parent holding company or control person, it beneficially owned the number of shares referred to above. That Amendment stated that it amended the most recent Schedule 13G filings, if any, by Blackrock or Barclays Global Investors, NA (“Barclays”) and certain of the affiliates of Barclays. The Amendment stated that on December 1, 2009 Blackrock completed its acquisition of Barclays and that substantially all of the Barclays affiliates were, as a result of that acquisition, subsidiaries of Blackrock for purposes of Schedule 13G filings. |
Amount and Nature of | ||||||||
Name | Beneficial Ownership | Percent of Classa | ||||||
Directors | ||||||||
Rose Marie Bravo | 58,023 | b | * | |||||
Gary E. Costley | 27,523 | c | * | |||||
Lawrence K. Fish | 26,523 | d | * | |||||
Abby F. Kohnstamm | 78,523 | e | * | |||||
Michael J. Kowalski (CEO) | 1,336,045 | f | 1.1 | |||||
Charles K. Marquis | 234,143 | g | * | |||||
Peter W. May | 7,855,507 | h | 6.2 | |||||
J. Thomas Presby | 53,423 | i | * | |||||
William A. Shutzer | 334,085 | j | * | |||||
Executive Officers | ||||||||
James E. Quinn | 597,748 | k | * | |||||
Beth O. Canavan | 163,284 | l | * | |||||
James N. Fernandez (CFO) | 249,680 | m | * | |||||
Jon M. King | 200,248 | n | * | |||||
All executive officers and directors as a group (19 persons): | 12,036,962 | o | 9.5 | |||||
a) | An asterisk (*) is used to indicate less than 1% of the class outstanding. |
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b) | Includes 52,217 shares issuable upon the exercise of “Vested Stock Options,” which are stock options that either are exercisable as of March 23, 2010 or will become exercisable within 60 days of that date. Includes 1,806 shares issuable upon the maturity of restricted stock grants made to directors on May 21, 2009. | |
c) | Includes 24,717 shares issuable upon the exercise of Vested Stock Options. Includes 1,806 shares issuable upon the maturity of restricted stock grants made to directors on May 21, 2009. | |
d) | Includes 24,717 shares issuable upon the exercise of Vested Stock Options. Includes 1,806 shares issuable upon the maturity of restricted stock grants made to directors on May 21, 2009. | |
e) | Includes 74,717 shares issuable upon the exercise of Vested Stock Options. Includes 1,806 shares issuable upon the maturity of restricted stock grants made to directors on May 21, 2009. | |
f) | Includes 972,000 shares issuable upon the exercise of Vested Stock Options. | |
g) | Includes 97,593 shares issuable upon the exercise of Vested Stock Options. Includes 1,806 shares issuable upon the maturity of restricted stock grants made to directors on May 21, 2009. | |
h) | Includes 7,828,984 shares reported to SEC as under Mr. May’s beneficial ownership on his Form 4 as of January 21, 2010. Includes 24,717 shares issuable upon the exercise of Vested Stock Options. Includes 1,806 shares issuable upon the maturity of restricted stock grants made to directors on May 21, 2009. | |
i) | Includes 49,717 shares issuable upon the exercise of Vested Stock Options. Includes 1,806 shares issuable upon the maturity of restricted stock grants made to directors on May 21, 2009. | |
j) | Includes 74,717 shares issuable upon the exercise of Vested Stock Options, 5,100 shares held by or for Mr. Shutzer’s child, 114,000 shares held by KJC Ltd. of which Mr. Shutzer is the sole general partner and 60,000 shares held in a trust for Mr. Shutzer’s child. Mr. Shutzer disclaims beneficial ownership of Company stock held by KJC Ltd. Includes 1,806 shares issuable upon the maturity of restricted stock grants made to directors on May 21, 2009. | |
k) | Includes 511,250 shares issuable upon the exercise of Vested Stock Options; 143 shares credited to Mr. Quinn’s account under the Company’s Employee Profit Sharing and Retirement Savings Plan; 57,883 shares held by Mr. Quinn’s wife; and 4,000 shares owned by Mr. Quinn’s child under the UGMA. | |
l) | Includes 141,000 shares issuable upon the exercise of Vested Stock Options, and 567 shares credited to Mrs. Canavan’s account under the Company’s Employee Profit Sharing and Retirement Savings Plan. | |
m) | Includes 205,250 shares issuable upon the exercise of Vested Stock Options and 142 shares credited to Mr. Fernandez’s account under the Company’s Employee Profit Sharing and Retirement Savings Plan. | |
n) | Includes 183,500 shares issuable upon the exercise of Vested Stock Options and 450 shares credited to Mr. King’s account under the Company’s Employee Profit Sharing and Retirement Savings Plan. | |
o) | Includes 3,183,650 shares issuable upon the exercise of Vested Stock Options and restricted stock grants that will mature on May 21, 2010 and 2,782 shares held in the Company’s Employee Profit Sharing and Retirement Savings Plan. |
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REGISTERED PUBLIC ACCOUNTING FIRM
January 31, 2010 | January 31, 2009 | |||||||
Audit Fees | $ | 2,273,000 | $ | 2,436,500 | ||||
Audit-related Feesa | 9,000 | 22,300 | ||||||
Audit and Audit-related Fees | 2,282,000 | 2,458,800 | ||||||
Tax Feesb | 1,877,350 | 1,544,350 | ||||||
All Other Feesc | 13,300 | 12,600 | ||||||
Total Fees | $ | 4,172,350 | $ | 4,015,750 | ||||
a) | In 2008, the Company discontinued the engagement of PwC to audit the financial statements of certain employee benefit plans. | ||
b) | Tax fees consist of fees for tax consultation and tax compliance services. These fees included tax filing and compliance fees of $1,750,350 for the year ended January 31, 2010 and $1,337,150 for the year ended January 31, 2009. | ||
c) | All other fees consist of costs for research software and other advisory services for the years ended January 31, 2010 and January 31, 2009. |
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• | 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 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. |
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• | The full Board held six meetings. Attendance averaged 98% amongst all members. | ||
• | The Audit Committee held eight meetings. Attendance averaged 95% amongst all members. | ||
• | The Compensation Committee and its Stock Option Subcommittee held seven meetings. Attendance averaged 94% amongst all members. | ||
• | The Nominating/Corporate Governance Committee met seven times. Attendance averaged 94% amongst all members. On each of these occasions the Chief Executive absented himself from the meeting so as to allow the outside directors to meet alone. | ||
• | The Finance Committee held seven meetings. Attendance averaged 95% amongst all members. | ||
• | The Corporate Social Responsibility Committee met three times. Attendance averaged 89% amongst all members. |
Audit | Nominating/Corporate Governance | ||||
J. Thomas Presby, Chair | Charles K. Marquis, Chair | ||||
Gary E. Costley | Rose Marie Bravo | ||||
Lawrence K. Fish | Gary E. Costley | ||||
Abby F. Kohnstamm | Abby F. Kohnstamm | ||||
Charles K. Marquis | J. Thomas Presby | ||||
Compensation | Stock Option Subcommittee | ||||
Gary E. Costley, Chair | Gary E. Costley, Chair | ||||
Rose Marie Bravo | Rose Marie Bravo | ||||
Abby F. Kohnstamm | Abby F. Kohnstamm | ||||
Charles K. Marquis | Charles K. Marquis | ||||
Peter W. May | Peter W. May | ||||
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Finance | Corporate Social Responsibility | ||||
William A. Shutzer, Chair | Lawrence K. Fish, Chair | ||||
Lawrence K. Fish | Abby F. Kohnstamm | ||||
Peter W. May | Michael J. Kowalski | ||||
Dividend | |||||
Michael J. Kowalski | |||||
• | 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. |
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• | Approval of remuneration arrangements for executive officers; and | ||
• | Approval of compensation plans in which officers and employees of Tiffany are eligible to participate. |
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• | Review recommendations from management and Towers Watson and provide an additional layer of peer review to analyses and recommendations provided to the Committee; | ||
• | Join other consultants in explaining relevant information and provide additional feedback to the Committee; | ||
• | Help the Committee to identify key issues and ask probing questions; and | ||
• | Review and comment upon all plans, agreements or other documents or actions the Committee is asked to adopt or approve. |
• | 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; |
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• | Reviewing the adequacy of our system of internal control over financial reporting; | ||
• | Establishing procedures for complaints regarding accounting, internal accounting controls or auditing matters; and | ||
• | Conducting a review of our financial statements and audit findings in advance of filing, and reviewing in advance proposed changes in our accounting principles. |
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“This Board shall submit the adoption or extension of any poison pill to a stockholder vote before it acts to adopt such poison pill; provided, however, that this Board may act on its own to adopt a poison pill without first submitting such matter to a stockholder vote if, under the circumstance then existing, this Board in the exercise of its fiduciary responsibilities deems it to be in the best interests of the Company and its stockholders to adopt a poison pill without the delay in adoption that is attendant upon the time reasonably anticipated to seek a stockholder vote. If a poison pill is adopted without first submitting such matter to a stockholder vote, the poison pill must be submitted to a stockholder vote within one year after the effective date of the poison pill. Absent such submission to a stockholder vote, and favorable action thereupon, the poison pill will expire on the first anniversary of its effective date.” |
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• | Boston Symphony Orchestra: cash grant of $5,000 in Fiscal 2008 (Mr. Fish is an Overseer). | ||
• | University of Chicago Cancer Research Foundation (Women’s Board): merchandise grants totaling $30,300 and $62,500, in Fiscal 2009 and 2008, respectively (Mr. May is a Trustee of The University of Chicago, a member of its Executive Committee, and a member of the Advisory Council on the Graduate School of Business at The University of Chicago). | ||
• | Carnegie Hall: subscription for a $6,500 advertisement for the opening night gala program in 2009 (Mr. May is a Trustee). | ||
• | The New York Philharmonic: a combination of merchandise grants and ticket subscriptions for fund-raising events of $25,000, $10,225 and $2,100 in Fiscal 2009, 2008 and 2007, respectively (Mr. May is a Trustee ). | ||
• | Partnership for New York City: $15,000 annual dues contributions in each of Fiscal 2009, 2008 and 2007 (Mr. May and Tiffany are each partners). | ||
• | Mt. Sinai Medical Center: combination of cash and merchandise grants totaling approximately $5,600, $3,340, $10,675, $87,905, and $13,580 in Fiscal 2009, 2008, 2007, 2006, and 2005, respectively (Mr. May is Chairman of the Board of Trustees). | ||
• | Paul Taylor Dance Company: merchandise grants of $895 and $2,975 in Fiscal 2009 and 2007, respectively (Mr. Shutzer is a Trustee). | ||
• | Prep for Prep: merchandise grants totaling $5,205, $3,165, and $370 for Fiscal 2009, 2008, and 2007, respectively (Mr. Shutzer is a Trustee). | ||
• | Tufts Medical Center and Floating Hospital for Children: merchandise grants totaling $150, $575, and $395 for Fiscal 2009, 2008, and 2007, respectively (Ms. Kohnstamm is a Trustee of Tufts University). |
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Gary E. Costley
Lawrence K. Fish
Abby F. Kohnstamm
Charles K. Marquis
Members of the Audit Committee
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Year Joined | ||||||
Name | Age | Position | Tiffany | |||
Michael J. Kowalski | 58 | Chairman of the Board and Chief Executive Officer | 1983 | |||
James E. Quinn | 58 | President | 1986 | |||
Beth O. Canavan | 55 | Executive Vice President | 1987 | |||
James N. Fernandez | 54 | Executive Vice President and Chief Financial Officer | 1983 | |||
Jon M. King | 53 | Executive Vice President | 1990 | |||
Victoria Berger-Gross | 54 | Senior Vice President – Global Human Resources | 2001 | |||
Pamela H. Cloud | 40 | Senior Vice President – Merchandising | 1994 | |||
Patrick B. Dorsey | 59 | Senior Vice President – General Counsel and Secretary | 1985 | |||
Patrick F. McGuiness | 44 | Senior Vice President – Finance | 1990 | |||
Caroline D. Naggiar | 52 | Senior Vice President – Chief Marketing Officer | 1997 | |||
John S. Petterson | 51 | Senior Vice President – Operations | 1988 | |||
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Page PS-26 | ||
Page PS-43 | ||
Page PS-44 | ||
Page PS-48 | ||
Page PS-50 | ||
Page PS-51 | ||
Page PS-56 | ||
Page PS-59 | ||
Page PS-60 | ||
Page PS-64 | ||
Page PS-66 | ||
Page PS-70 |
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Compensation Component | Objectives | Key Features | ||||||
Salary | Provide cash compensation that is not at risk. | Designed to retain key executives by being competitive; not the primary means of recognizing performance. | ||||||
Annual incentive (annual incentive award or bonus) | Motivate and reward achievement of the annual financial results. | Cash payments dependent on the degree of achievement of the annual profit plan – Committee retains discretion to reduce awards. | ||||||
Long-term incentives (performance-based restricted stock units and stock options) | Align management interests with those of stockholders; retain executives; motivate and reward achievement of sustainable earnings growth. | Stock unit awards vest upon achievement of Company financial goals over a three- year performance period and require continued employment. Committee retains discretion to reduce awards. Stock option awards vest ratably over four years of continued employment. | ||||||
Benefits | Retain executives over the course of their careers. | A comprehensive program of benefits that includes (i) a defined benefit retirement program that provides a special stay-incentive for experienced executives; and (ii) life insurance benefits that build cash value. | ||||||
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![]() | ![]() | |
CEO | OTHER EXECUTIVE OFFICERS (average) |
• | A four-year or five-year strategic plan that balances earnings with “brand stewardship” (see below); and |
• | A profit plan for the fiscal year. |
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• | To attract, motivate and retain the management talent necessary to develop and execute both the annual and strategic plans; | ||
• | To reward achievement of annual and long-term financial goals; and | ||
• | To link management’s interests with those of the stockholders. |
January 2010 Action: | The Committee determined to maintain 2010 salaries at 2008 levels in all but two instances. The Committee increased the 2010 base salary of those two executive officers because theCompetitive Compensation Analysisdiscussed below indicated that these executives were being paid significantly below the market value for a comparable position. The executive officers who received these increases are not named executive officers in this Proxy Statement. |
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Target Incentive as a | Maximum Incentive as a Percent | |||||||||
Executive | Position | Percent of Base Salary | of Base Salary | |||||||
Michael J. Kowalski | Chairman & CEO | 100% | 200% | |||||||
James E. Quinn | President | 70% | 140% | |||||||
Beth O. Canavan | Executive Vice President | 70% | 140% | |||||||
James N. Fernandez | Executive Vice President & CFO | 70% | 140% | |||||||
Jon M. King | Executive Vice President | 70% | 140% | |||||||
January 2010 Action: | In January 2010, the Committee determined to maintain target and maximum incentives for Fiscal 2010 at the same levels set for Fiscal 2008.See above. |
• | To reduce the award to zero if Fiscal 2009 net earnings from continuing operations do not equal or exceed $135,111,200; | ||
• | To pay 80% of the target incentive award if Fiscal 2009 net earnings from continuing operations equal $173,714,400; | ||
• | To pay the target incentive award if Fiscal 2009 net earnings from continuing operations equal $193,016,000; | ||
• | To pay 120% of the target incentive award if Fiscal 2009 net earnings from continuing operations equal $212,317,600; | ||
• | To pay the maximum award if Fiscal 2009 net earnings from continuing operations equal or exceed $250,920,800; and | ||
• | To vary the incentive award payable if Fiscal 2009 net earnings from continuing operations fall between the amounts set forth above. |
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March 2010 Action: | After reviewing and concurring with the recommendation of the chief executive officer, the Committee, in the exercise of its retained discretion, determined to pay incentive awards on the basis of Fiscal 2009 net earnings from continuing operations ($265.7 million) as follows: |
Michael J. Kowalski | $ | 2,000,000 | ||
James E. Quinn | $ | 1,036,000 | ||
Beth O. Canavan | $ | 840,000 | ||
James N. Fernandez | $ | 1,036,000 | ||
Jon M. King | $ | 840,000 |
March 2010 Action: | The Committee established, as a condition to awarding the maximum incentive awards, that the Company attain Fiscal 2010 net earnings of $189 million. At the same time the Committee also advised the executive officers that, in the absence of other factors, the Committee will exercise its discretion as follows: |
▪ | To reduce the award to zero if Fiscal 2010 net earnings as publicly reported do not exceed $220,500,000; | ||
▪ | To pay the target incentive award if Fiscal 2010 net earnings as publicly reported equal $315,000,000; | ||
▪ | To pay the maximum award if Fiscal 2010 net earnings as publicly reported equal or exceed $410,000,000; and | ||
▪ | To vary the incentive award payable if Fiscal 2010 net earnings as publicly reported fall between the amounts set forth above. |
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• | for options, on the basis of the Black-Scholes model; and | ||
• | for performance-based restricted stock units, using the per share market value immediately prior to the grant on the assumption that units would vest at the earnings target (attainment of the ROA target was not considered in making this allocation). |
• | Like most companies, the Company’s stock price over the long term is primarily driven by growth in EPS. The Committee considers EPS performance to be 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. | ||
• | The EPS and ROA goals were set by the Committee in conformance to, and as part of the process of approving, the Company’s strategic plan. |
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Earnings | Percent of | ROA Adjustment | Percent of | Percent of | ||||||||||||||
Performance | Target Shares | to Shares Vesting | Target Shares | Maximum | ||||||||||||||
Vesting for | for Earnings | Vesting After | Number of | |||||||||||||||
Earnings | Performance | ROA | Shares | |||||||||||||||
Performance | (percent of Target) | Adjustment | Vesting | |||||||||||||||
Earnings Threshold Not Reached | 0 | % | None | 0 | % | None | ||||||||||||
Earnings Threshold Reached | 25 | % | 10% increase if ROA Target achieved | 25% to 35% | 12.5% to 17.5% | |||||||||||||
Earnings Target Reached | 100 | % | 10% increase if ROA Target achieved/10% decrease if ROA Target not achieved | 90% to 110% | 45% to 55% | |||||||||||||
Earnings Target Exceeded by 34.2% | 190 | % | 10% increase if ROA Target achieved/10% decrease if ROA Target not achieved | 180% to 200% | 90% to 100% | |||||||||||||
January 2010 Action: | The Committee granted performance-based restricted stock units as described above in the per-share amounts shown in the table titled GRANTS OF PLAN-BASED AWARDS, Fiscal 2009, 2005 Employee Incentive Plan on PS-48. | |
March 2010 Action: | The Committee established the following in respect of the above-referenced stock units, subject to adjustments as permitted under the Plan: |
• | Earnings Target: $9.10 per share (aggregate consolidated net earnings per share on a diluted basis over the three-year period); | ||
• | ROA Target: 10.6% (consolidated return on average assets in each of the fiscal years in the performance period, expressed as a percentage and then averaged over the entire performance period); | ||
• | Earnings Threshold: $4.25 per share (aggregate consolidated net earnings per share on a diluted basis over the three-year period); and |
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• | Earnings Maximum: $12.21 per share (aggregate consolidated net earnings per share on a diluted basis over the three-year period). |
• | The Company’s projected financial performance for Fiscal 2008; | ||
• | The economic circumstances and uncertainty then confronting retailers of luxury goods and jewelry retailers in particular; | ||
• | The difficulty of planning for Fiscal 2009 in the face of such uncertainty; | ||
• | The diminished realizable and retentive value of equity awards made to the executive officers in prior fiscal years due to the effect of significant declines in the market value for the Company’s stock and the Company’s financial performance in Fiscal 2008; and | ||
• | Whether the vesting provisions of performance-based restricted stock unit grants to be made in respect of the three-year performance period ending on January 31, 2012 should be changed, relative to those made for prior performance periods (see below), to recognize the economic uncertainty and to provide the Company with a better opportunity to retain the executives. |
1 For performance-based restricted stock units granted in January 2007 and 2008, goals are respectively as follows: Threshold cumulative net EPS of $6.72 and $8.54; Target cumulative net EPS of $7.76 and $9.87; Maximum cumulative net EPS of $8.31 and $10.62; and ROA goal of 10.6% and 11.5%. |
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January 2010 Action: | As has been its practice, the Committee granted stock options to the executive officers on January 20, 2010. To see the number of stock options granted to each of the named executive officers on January 20, 2010 refer to GRANTS OF PLAN-BASED AWARDS Fiscal 2009, 2005 Employee Incentive Plan. |
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• | Has not set a “benchmark” to such data for any executive officer, although it does look to see if the Company’s total executive program falls between the 25th and 75th percentile of market data; | ||
• | Does not rely exclusively on compensation surveys or publicly available compensation information when it determines the compensation of individual executive officers; and | ||
• | Also considers: |
๐ | The comparability of compensation as between executive officers of comparable experience and responsibility; | ||
๐ | Job comparability with market positions; | ||
๐ | The recommendations of the chief executive officer; and | ||
๐ | The Committee’s own business judgment as to an individual’s maturity, experience and tenure, capacity for growth, demonstrated success and desirability to the Company’s competitors. |
• | base salary; | ||
• | target annual incentive or bonus as a percentage of salary; | ||
• | target total cash compensation (salary plus target incentive/bonus award); | ||
• | actual total cash compensation (salary plus actual incentive/bonus granted in the prior year); | ||
• | expected value of long-term incentives as a percentage of salary; | ||
• | target total direct compensation (target total cash compensation, life insurance cash value increases and the expected value of long-term incentives granted in the prior year); |
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• | actual total direct compensation (actual total cash compensation plus life insurance cash value increases and the expected value of long-term incentives granted in the prior year); and | ||
• | pay mix. |
• | a survey of 16 public companies in the specialty retail industry with median revenues of $3.1 billion (see A below); | ||
• | a survey of 9 public and private companies in the retail industry with median revenues of $3.4 billion (see B below); and | ||
• | a survey of 244 companies in general industry with median revenues of $2.6 billion. |
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• | the chief executive officer’s target total compensation approximates the 50th percentile; | ||
• | the target total compensation for the named executive officers in retail-specific positions (Mrs. Canavan, and Messrs. Quinn and King) approximates the 50th percentile; | ||
• | the chief financial officer has significant operating responsibilities beyond those typically assigned to those with this title in the surveyed companies and, for that reason, Towers Watson compared his compensation to those in a chief financial officer position and to those in a chief operating officer position: |
๐ | when compared to the chief financial officer position, his target total compensation is above the 75th percentile; | ||
๐ | when compared to the chief operational officer data, his target total compensation approximates the 50th percentile. |
Maximum Short- | ||||||||||||||||||||
Target Short-term | term Incentive as | Long-term | ||||||||||||||||||
Incentive as a | a Percent of | Incentive as a | ||||||||||||||||||
Executive | Position | Percent of Salary | Salary | Percent of Salary | ||||||||||||||||
Michael J. Kowalski | Chairman & CEO | 100 | % | 200 | % | 300 | % | |||||||||||||
James E. Quinn | President | 70 | % | 140 | % | 162 | % | |||||||||||||
Beth O. Canavan | Executive Vice President | 70 | % | 140 | % | 200 | % | |||||||||||||
James N. Fernandez | Executive Vice President & CFO | 70 | % | 140 | % | 225 | % | |||||||||||||
Jon M. King | Executive Vice President | 70 | % | 140 | % | 200 | % | |||||||||||||
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Market Value of Company Stock Holdings as a | ||
Multiple of Base Salary (Minimum Annual | ||
Position/Level | Retainer 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). |
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• | 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. |
• | a 35% share acquisition; | ||
• | incumbent directors (including those nominated by incumbent directors) cease to be a majority; | ||
• | a corporate transaction, such as a merger, in which the shareholders prior to the transaction do not own 51% of the Company’s assets; and | ||
• | a sale of all or substantially all of the assets of the Company or Tiffany. |
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• | is not party to any employment agreement with any executive officer that provides for severance benefits on termination of employment; | ||
• | does not maintain any severance payment policy for executive officers; and | ||
• | has the right to terminate the employment of any executive for any reason or no reason prior to the occurrence of a change of control. |
• | where practicable, executives should be required to meet the service vesting provisions of equity grants following a change in control; | ||
• | the definition of “Change in Control” (see above) includes circumstances where it is sensible to require the executive to remain employed in order to vest in his/her equity grant and other circumstances where it is not sensible; | ||
• | following a change in control, an executive should have the benefit of his/her equity grants if terminated without cause or if he/she resigns with good reason; | ||
• | performance-based equity grants should be treated separately from grants that are purely time-vested because a change in control may result in a change in business strategy making it difficult, if not impossible, for the Company to achieve the performance criteria; and | ||
• | 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. |
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• | 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. |
• | current salary and potential threshold, target and maximum annual incentive awards; | ||
• | salary and annual incentive award grants in prior years; | ||
• | total cash compensation (salary plus annual incentive award for the previous year); | ||
• | potential threshold, target and maximum returns on performance-based restricted stock unit awards and estimated value of stock option awards; | ||
• | performance-based restricted stock unit and stock option awards made 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; | ||
• | comparison of one-year increase or decrease in total compensation and wealth accumulation to one-year total shareholder return; and | ||
• | estimated value of salary, annual incentive or bonus, unvested restricted stock units and stock options, and retirement and health benefits upon a hypothetical change in control scenario. |
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Rose Marie Bravo
Abby F. Kohnstamm
Charles K. Marquis
Peter W. May
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Fiscal 2009, Fiscal 2008 and Fiscal 2007
Change in | ||||||||||||||||||||||||||||||||||||
Pension | ||||||||||||||||||||||||||||||||||||
Value and | ||||||||||||||||||||||||||||||||||||
Non- | Nonquali- | |||||||||||||||||||||||||||||||||||
Equity | fied | |||||||||||||||||||||||||||||||||||
Incentive | Deferred | All | ||||||||||||||||||||||||||||||||||
Plan | Compen- | Other | ||||||||||||||||||||||||||||||||||
Name and | Stock | Option | Compen- | sation | Compen- | |||||||||||||||||||||||||||||||
Principal | Salary | Bonus | Awards | Awards | sation | Earnings | sation | Total | ||||||||||||||||||||||||||||
Position | Year | ($) (a) | ($) (b) | ($) (c) | ($) (d) | ($) (e) | ($) (f) | ($) | ($) | |||||||||||||||||||||||||||
Michael J. Kowalski Chairman and CEO | 2009 | $ | 997,315 | --- | $ | 1,593,130 | $ | 1,499,400 | $ | 2,000,000 | $ | 1,615,020 | $ | 168,270 (g) | $ | 7,873,135 | ||||||||||||||||||||
2008 | $ | 1,037,975 | --- | $ | 1,369,200 | $ | 1,492,340 | --- | $ | 453,947 | $ | 322,342 (h) | $ | 4,675,804 | ||||||||||||||||||||||
2007 | $ | 972,382 | --- | $ | 1,653,010 | $ | 1,477,751 | $ | 1,852,500 | $ | 370,793 | $ | 340,293 (i) | $ | 6,666,729 | |||||||||||||||||||||
James E. Quinn President | 2009 | $ | 738,013 | --- | $ | 637,252 | $ | 599,760 | $ | 1,036,000 | $ | 828,884 | $ | 107,713 (j) | $ | 3,947,622 | ||||||||||||||||||||
2008 | $ | 766,398 | --- | $ | 548,100 | $ | 596,936 | --- | $ | 231,007 | $ | 197,357 (k) | $ | 2,339,798 | ||||||||||||||||||||||
2007 | $ | 738,013 | --- | $ | 681,867 | $ | 599,879 | $ | 1,036,000 | $ | 190,821 | $ | 241,440 (l) | $ | 3,488,020 | |||||||||||||||||||||
Beth O. Canavan Executive Vice President | 2009 | $ | 598,389 | --- | $ | 637,252 | $ | 599,760 | $ | 840,000 | $ | 421,295 | $ | 102,870 (m) | $ | 3,199,566 | ||||||||||||||||||||
2008 | $ | 625,163 | --- | $ | 548,100 | $ | 599,936 | --- | $ | 235,562 | $ | 173,370 (n) | $ | 2,182,131 | ||||||||||||||||||||||
2007 | $ | 528,577 | --- | $ | 681,867 | $ | 599,879 | $ | 689,000 | $ | 743,079 | $ | 160,339 (o) | $ | 3,402,741 | |||||||||||||||||||||
James N. Fernandez Executive Vice President and CFO | 2009 | $ | 738,013 | --- | $ | 864,842 | $ | 833,000 | $ | 1,036,000 | $ | 738,655 | $ | 125,313 (p) | $ | 4,335,823 | ||||||||||||||||||||
2008 | $ | 770,694 | --- | $ | 760,200 | $ | 828,008 | --- | $ | 185,802 | $ | 222,348 (q) | $ | 2,767,052 | ||||||||||||||||||||||
2007 | $ | 658,228 | --- | $ | 929,818 | $ | 833,978 | $ | 858,000 | $ | 136,439 | $ | 214,437 (r) | $ | 3,630,900 | |||||||||||||||||||||
Jon M. King Executive Vice President | 2009 | $ | 598,389 | --- | $ | 637,252 | $ | 599,760 | $ | 840,000 | $ | 321,836 | $ | 98,300 (s) | $ | 3,095,537 | ||||||||||||||||||||
2008 | $ | 626,774 | --- | $ | 548,100 | $ | 596,936 | --- | $ | 181,745 | $ | 168,060 (t) | $ | 2,121,615 | ||||||||||||||||||||||
2007 | $ | 498,657 | $ | 650,000 | $ | 681,867 | $ | 599,879 | --- | $ | 175,006 | $ | 149,904 (u) | $ | 2,755,313 | |||||||||||||||||||||
(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. Salary amounts paid during Fiscal 2008 reflected 27 pay periods instead of the typical 26 pay periods. | |
(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. |
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(c) | Amounts shown represent the dollar amount of the grant date fair value of the stock unit award calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation - Stock Compensation for the fiscal year in which the award was granted. The amounts shown are based on the assumption that the earnings target and return on assets target for the three-year performance period identified by the Committee for each respective grant will be met. The maximum value of each award, assuming the highest level of performance conditions are met for the applicable period, calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, are as follows: |
Executive | Position | 2009 | 2008 | 2007 | ||||||||||||||||
Michael J. Kowalski | Chairman & CEO | $ | 2,896,600 | $ | 1,369,200 | $ | 2,874,800 | |||||||||||||
James E. Quinn | President | $ | 1,158,640 | $ | 548,100 | $ | 1,185,855 | |||||||||||||
Beth O. Canavan | Executive Vice President | $ | 1,158,640 | $ | 548,100 | $ | 1,185,855 | |||||||||||||
James N. Fernandez | Executive Vice President & CFO | $ | 1,572,440 | $ | 760,200 | $ | 1,617,075 | |||||||||||||
Jon M. King | Executive Vice President | $ | 1,158,640 | $ | 548,100 | $ | 1,185,855 | |||||||||||||
(d) | Amounts shown represent the dollar amount of the grant date fair value of the stock option award calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation - Stock Compensation for the fiscal year in which the award was granted. | ||
(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. (For a description of the Performance Goals, see DISCUSSION OF SUMMARY COMPENSATION TABLE AND GRANTS OF PLAN-BASED AWARDS - Non-Equity Incentive Plan Awards). 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. | ||
(f) | This column represents the aggregate change, over the course of the fiscal year, 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 2009 compensation included the following elements whose total incremental cost to the Company is shown in the column titled “All Other Compensation”: life insurance premium ($147,072); disability insurance premium ($14,298); and 401(k) matching contribution ($6,900). | ||
(h) | Mr. Kowalski’s Fiscal 2008 compensation included the following elements whose total incremental cost to the Company is shown in the column titled “All Other Compensation”: life |
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insurance premium ($162,175); tax gross-up paid on the life insurance premium ($136,560); disability insurance premium ($14,207); 401(k) matching contribution ($6,750); and medical exam ($2,650). | |||
(i) | Mr. Kowalski’s Fiscal 2007 compensation included the following elements whose total incremental cost to the Company is shown in the column titled “All Other Compensation”: life insurance premium ($171,055); tax gross-up paid on the life insurance premium ($144,286); disability insurance premium ($15,952); 401(k) matching contribution ($6,500); and medical exam ($2,500). | ||
(j) | Mr. Quinn’s Fiscal 2009 compensation included the following elements whose total incremental cost to the Company is shown in the column titled “All Other Compensation”: life insurance premium ($84,756); disability insurance premium ($16,057); and 401(k) matching contribution ($6,900). | ||
(k) | Mr. Quinn’s Fiscal 2008 compensation included the following elements whose total incremental cost to the Company is shown in the column titled “All Other Compensation”: life insurance premium ($94,340); tax gross-up paid on the life insurance premium ($77,925); disability insurance premium ($15,967); medical exam ($2,650); and 401(k) matching contribution ($6,750). | ||
(l) | Mr. Quinn’s Fiscal 2007 compensation included the following elements whose total incremental cost to the Company is shown in the column titled “All Other Compensation”: life insurance premium ($108,311); tax gross-up paid on the life insurance premium ($90,043); disability insurance premium ($17,711); 401(k) matching contribution ($6,500); tax accounting fees ($14,680); and health club membership ($4,195). | ||
(m) | Mrs. Canavan’s Fiscal 2009 compensation included the following elements whose total incremental cost to the Company is shown in the column titled “All Other Compensation”: life insurance premium ($82,180); disability insurance premium ($13,790); and 401(k) matching contribution ($6,900). | ||
(n) | Mrs. Canavan’s Fiscal 2008 compensation included the following elements whose total incremental cost to the Company is shown in the column titled “All Other Compensation”: life insurance premium ($79,048); tax gross-up paid on the life insurance premium ($69,497); disability insurance premium ($15,425); 401(k) matching contribution ($6,750); and medical exam ($2,650). | ||
(o) | Mrs. Canavan’s Fiscal 2007 compensation included the following elements whose total incremental cost to the Company is shown in the column titled “All Other Compensation”: life insurance premium ($71,796); tax gross-up paid on the life insurance premium ($62,918); disability insurance premium ($15,750); 401(k) matching contribution ($6,500); medical exam ($2,500); and health club membership ($875). | ||
(p) | Mr. Fernandez’s Fiscal 2009 compensation included the following elements whose total incremental cost to the Company is shown in the column titled “All Other Compensation”: life insurance premium ($102,003); disability insurance premium ($16,410); and 401(k) matching contribution ($6,900). | ||
(q) | Mr. Fernandez’s Fiscal 2008 compensation included the following elements whose total incremental cost to the Company is shown in the column titled “All Other Compensation”: life insurance premium ($111,161); tax gross-up paid on the life insurance premium ($88,105); disability insurance premium ($16,332); and 401(k) matching contribution ($6,750). |
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(r) | Mr. Fernandez’s Fiscal 2007 compensation included the following elements whose total incremental cost to the Company is shown in the column titled “All Other Compensation”: life insurance premium ($101,927); tax gross-up paid on the life insurance premium ($84,520); disability insurance premium ($17,740); 401(k) matching contribution ($6,500); and tax accounting fees ($3,750). | |
(s) | Mr. King’s Fiscal 2009 compensation included the following elements whose total incremental cost to the Company is shown in the column titled “All Other Compensation”: life insurance premium ($78,050); disability insurance premium ($13,350); and 401(k) matching contribution ($6,900). | |
(t) | Mr. King’s Fiscal 2008 compensation included the following elements whose total incremental cost to the Company is shown in the column titled “All Other Compensation”: life insurance premium ($84,188); tax gross-up paid on the life insurance premium ($64,037); disability insurance premium ($13,085); 401(k) matching contribution ($6,750), and medical exam ($2,650). | |
(u) | Mr. King’s Fiscal 2007 compensation included the following elements whose total incremental cost to the Company is shown in the column titled “All Other Compensation”: life insurance premium ($71,602); tax gross-up paid on the life insurance premium ($54,261); disability insurance premium ($13,410); 401(k) matching contribution ($6,500); medical exam ($2,500); and health club membership ($1,631). |
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Fiscal 2009
2005 Employee Incentive Plan
All Other | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Option | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Awards: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Number of | Exercise or Base | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Securities | Price of | Grant Date | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Under- | Option | Fair Value of | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Estimated Future Payouts | Estimated Future Payouts | lying | Awards | Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Grant | Under Non-Equity | Under Equity Incentive | Options | ($/Sh) | Awards | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Name | Award Type | Date | Incentive Plan Awards | Plan Awards (a) | (#) | (b) | (c) (d) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Target | Maximum | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Threshold | Number | Number | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Number | of Shares | of Shares | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
of Shares | (assuming | (assuming | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
(assuming | Earnings | Earnings | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings | Target is | Target is | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Threshold | reached, | exceeded | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
is met, and | with no | by $3.11 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Return on | adjustment | and Return | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets | for Return | on Assets | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Threshold | Target | Maximum | Target is | on Assets | Target is | ||||||||||||||||||||||||||||||||||||||||||||||||||||
($) | ($) | ($) | not met) | Target) | met) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Michael J. | Annual Incentive | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Kowalski | Award | $ | 0 | $ | 1,000,000 | $ | 2,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Performance- | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Based RSU | 1/20/10 | 8,750 | 35,000 | 70,000 | $ | 1,593,130 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Option | 1/20/10 | 90,000 | $ | 43.37 | $ | 1,499,400 | |||||||||||||||||||||||||||||||||||||||||||||||||||
James E. | Annual Incentive | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quinn | Award | $ | 0 | $ | 518,000 | $ | 1,036,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Performance- | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Based RSU | 1/20/10 | 3,500 | 14,000 | 28,000 | $ | 637,252 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Option | 1/20/10 | 36,000 | $ | 43.37 | $ | 599,760 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Beth O. | Annual Incentive | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Canavan | Award | $ | 0 | $ | 420,000 | $ | 840,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Performance- | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Based RSU | 1/20/10 | 3,500 | 14,000 | 28,000 | $ | 637,252 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Option | 1/20/10 | 36,000 | $ | 43.37 | $ | 599,760 | |||||||||||||||||||||||||||||||||||||||||||||||||||
James N. | Annual Incentive | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fernandez | Award | $ | 0 | $ | 518,000 | $ | 1,036,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Performance-Based | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RSU | 1/20/10 | 4,750 | 19,000 | 38,000 | $ | 864,842 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Option | 1/20/10 | 50,000 | $ | 43.37 | $ | 833,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Annual Incentive | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Award | $ | 0 | $ | 420,000 | $ | 840,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Jon M. | Performance- | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
King | Based RSU | 1/20/10 | 3,500 | 14,000 | 28,000 | $ | 637,252 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Option | 1/20/10 | 36,000 | $ | 43.37 | $ | 599,760 | |||||||||||||||||||||||||||||||||||||||||||||||||||
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(a) | No portion of these awards will pay out unless an Earnings Threshold is attained over the three-year Performance Period ending January 31, 2013. If the Earnings Threshold is attained, the Committee may vest the Maximum Number of Shares, but has the discretion to reduce the vested number of shares by any amount down to zero shares. | |
The Committee has communicated to the executive officers that it intends to exercise its discretion as indicated in the following chart (subject to interpolation): |
ROA Adjustment | ||||||||||||||||||
to Shares | ||||||||||||||||||
Percent of | Vesting for | Percent of | ||||||||||||||||
Target Shares | Earnings | Percent of | Maximum | |||||||||||||||
Vesting for | Performance | Target Shares | Number of | |||||||||||||||
Earnings | Earnings | (percent of | Vesting After | Shares | ||||||||||||||
Performance | Performance | Target) | ROA Adjustment | Vesting | ||||||||||||||
Earnings Threshold Not Reached | 0 | % | None | 0 | % | None | ||||||||||||
Earnings Threshold Reached | 25 | % | 10% increase if ROA Target achieved | 25% to 35% | 12.5% to 17.5% | |||||||||||||
Earnings Target Reached | 100 | % | 10% increase if ROA Target achieved/10% decrease if ROA Target not achieved | 90% to 110% | 45% to 55% | |||||||||||||
Earnings Target Exceeded by 34.2% | 190 | % | 10% increase if ROA Target achieved/10% decrease if ROA Target not achieved | 180% to 200% | 90% to 100% | |||||||||||||
• | The Earnings Threshold is $4.25 per diluted share. | ||
• | The Earnings Target is $9.10 per diluted share. | ||
• | The Earnings Maximum is $12.21 per diluted share. |
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• | The ROA Target is 10.6%. |
Amounts listed in the sub-column labeled “Target Number of Shares” reflect the Target Number of Shares, assuming Earnings Target is reached, with no adjustment for Return on Assets Target. If both the Earnings Target and Return on Assets Target are met, the Board intends to exercise its discretion to vest the following increased number of shares for each executive officer: Michael J. Kowalski, 38,500; James E. Quinn, 15,400; Beth O. Canavan, 15,400; James N. Fernandez, 20,900; and Jon M. King, 15,400. | ||
(b) | 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. | |
(c) | The grant date fair value of each option award was computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718. | |
(d) | The grant date fair value of each performance-based award was computed assuming that the Target Number of Shares would vest due to earnings performance and would be increased by ten percent due to return-on-asset performance. For additional information regarding performance-based compensation, see the table titled “OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END” beginning on page PS-56. |
(As of Fiscal Year 2009)
Column A | Column B | Column C | ||||||||||
Number of securities | ||||||||||||
remaining available | ||||||||||||
Number of securities | for future issuance | |||||||||||
to be issued upon | Weighted average | under equity | ||||||||||
exercise of | exercise price of | compensation plans | ||||||||||
outstanding options, | outstanding options, | (excluding securities | ||||||||||
Plan category | warrants and rights | warrants and rights | reflected in column A) | |||||||||
Equity compensation plans approved by security holders | 6,199,436 | a | $ | 34.09 | 4,229,847 | b | ||||||
Equity compensation plans not approved by security holders | 0 | 0 | 0 | |||||||||
Total | 6,199,436 | a | $ | 34.09 | 4,229,847 | b | ||||||
(a) | Shares indicated do not include 2,213,580 shares issuable under awards of stock units already made. |
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(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 2008 Directors Equity Plan (the “Directors Plan”). All plans provide for the issuance of options and stock awards. However, under both plans the maximum number of shares that may be issued (13,500,000 under the Employee Plan and 1,000,000 under the Directors Plan) is subject to reduction by 1.58 shares for each share that is delivered on vesting of a stock award. Column C reflects this reduction assuming that all shares granted as stock awards will vest. |
AND GRANTS OF PLAN-BASED AWARDS
• | The performance goal established for Fiscal 2009 was consolidated net earnings (subject to adjustment as permitted in the Plan) of $116 million. Because that goal was reached, each of the named executive officers was tentatively eligible to receive a maximum incentive award of 200% of target, subject to the Committee’s discretion to reduce the award. | ||
• | When the Committee established the performance goal it also communicated to the named executive officers that it would reduce the maximum incentive award: |
• | to zero, if Fiscal 2009 net earnings from continuing operations did not equal or exceed $135,111,200; | ||
• | to 80% of the “target amount” (100% of base salary for the chief executive officer and 70% of base salary for each of the other named executive officers), if net earnings from continuing operations equaled $173,714,400; | ||
• | to the target amount, if net earnings from continuing operations equal $193,016,000; and | ||
• | to 120% of the target amount if net earnings from continuing operations equal $212,317,600. |
• | The Committee has also communicated that the maximum award would only be made if net earnings from continuing operations equaled or exceeded $250,920,800. If earnings fall between the markers indicated, the award will be interpolated accordingly. |
• | annual progress towards strategic plan objectives; | ||
• | business unit growth and/or profitability (where the executive officer has responsibility for such growth and/or profitability); | ||
• | organizational development; |
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• | contributions to the working environment of his/her team and/or development of a positive working environment for employees; | ||
• | business process improvement; and | ||
• | cost containment and/or cost reduction efforts. |
• | In Fiscal 2008, the Company did not meet its net earnings objectives and annual incentive awards and bonuses were not paid out. | ||
• | In Fiscal 2007, the Company exceeded its net earnings objectives and annual incentive awards and bonuses were paid out at 200% of the target amount. | ||
• | 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. |
• | 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 align bonuses with annual incentive awards. | ||
• | Annual incentive awards are designed so that the amounts paid out will be deductible to the Company and 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. | ||
• | If a bonus is paid to an executive officer other than a named 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; |
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• | No Units will vest (other than for reasons of death, disability or on a change in control) 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. |
• | In the event of EPS performance above threshold and below target or above target and below maximum the number of Units that tentatively vest will be 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; and | ||
• | No dividends are paid, accrued or credited to Units until vesting. |
• | 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) if the Company fails to achieve consolidated earnings from continuing operations of $300 million in any one of the three years within the performance period; | ||
• | Units will vest 100% or not at all; and | ||
• | No dividends are paid, accrued or credited to Units until vesting. |
• | Threshold: cumulative net EPS of $5.67; | ||
• | Target: cumulative net EPS of $6.52; | ||
• | Maximum: cumulative net EPS of $6.98; and | ||
• | Return on assets: 9.8%. |
• | Threshold: cumulative net EPS of $6.72; | ||
• | Target: cumulative net EPS of $7.76; | ||
• | Maximum: cumulative net EPS of $8.31; and | ||
• | Return on assets: 10.6%. |
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†Note: The performance tests for Units granted in January 2006 and January 2007 have been appropriately restated to reflect the adoption of the average cost method for inventory accounting in the first quarter of Fiscal 2008. |
• | Threshold: cumulative net EPS of $8.54; | ||
• | Target: cumulative net EPS of $9.87; | ||
• | Maximum: cumulative net EPS of $10.62; and | ||
• | Return on assets: 11.5%. |
• | Vesting of each installment is contingent on continued employment, except in the event of death, disability or change in control (see Explanation of Potential Payments on Termination or Change in Control). |
• | 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; |
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• | 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 after age 65 without payment of further premiums with a death benefit equivalent to twice the executive officer’s ending 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; | ||
• | in 2008 and years prior thereto, the Company paid 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; and | ||
• | in 2009 and years thereafter, the Company will not pay any additional amounts to offset the income tax attributable to the premiums paid on behalf of the executives. |
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Option Awards | Stock Awards | |||||||||||||||||||||||||||||||
Equity | ||||||||||||||||||||||||||||||||
Equity | Incentive | |||||||||||||||||||||||||||||||
Incentive | Plan Awards | |||||||||||||||||||||||||||||||
Plan Awards | Market or | |||||||||||||||||||||||||||||||
Number | Number | Number | Payout Value | |||||||||||||||||||||||||||||
Of | of | Of | Of | |||||||||||||||||||||||||||||
Securities | Securities | Unearned | Unearned | |||||||||||||||||||||||||||||
Underlying | Underlying | Shares, Units or | Shares, Units or | |||||||||||||||||||||||||||||
Unexercised | Unexercised | Option | Other Rights | Other Rights | ||||||||||||||||||||||||||||
Options | Options | Exercise | Option | That Have | That Have | |||||||||||||||||||||||||||
Exercisable | Unexercisabe | Price | Expiration | Not Vested (b) | Not Vested | |||||||||||||||||||||||||||
Name | (#) | (#) | ($) | Date (a) | (#) | ($) | ||||||||||||||||||||||||||
Michael J. | 100,000 | $ | 32.4700 | 1/18/11 | ||||||||||||||||||||||||||||
Kowalski | 150,000 | $ | 34.0200 | 1/16/12 | ||||||||||||||||||||||||||||
195,000 | $ | 25.8450 | 1/16/13 | |||||||||||||||||||||||||||||
180,000 | $ | 39.7500 | 1/15/14 | |||||||||||||||||||||||||||||
115,000 | $ | 31.4900 | 1/31/15 | |||||||||||||||||||||||||||||
85,000 | $ | 37.8350 | 1/31/16 | |||||||||||||||||||||||||||||
57,750 | 19,250 | $ | 40.1500 | 1/18/17 | ||||||||||||||||||||||||||||
50,500 | 50,500 | $ | 37.6450 | 1/17/18 | ||||||||||||||||||||||||||||
38,750 | 116,250 | $ | 23.0000 | 1/28/19 | ||||||||||||||||||||||||||||
0 | 90,000 | $ | 43.3700 | 1/20/20 | ||||||||||||||||||||||||||||
0 / 74,000 (c | ) | $ | 0 (g | ) | ||||||||||||||||||||||||||||
0 / 80,000 (d | ) | $ | 0 (h | ) | ||||||||||||||||||||||||||||
65,200 / 65,200 (e | ) | $ | 2,647,772 (i | ) | ||||||||||||||||||||||||||||
38,500 / 70,000 (f | ) | $ | 1,563,485 (j | ) | ||||||||||||||||||||||||||||
James E. Quinn | 75,000 | $ | 32.4700 | 1/18/11 | ||||||||||||||||||||||||||||
110,000 | $ | 34.0200 | 1/16/12 | |||||||||||||||||||||||||||||
140,000 | $ | 25.8450 | 1/16/13 | |||||||||||||||||||||||||||||
115,000 | $ | 39.7500 | 1/15/14 | |||||||||||||||||||||||||||||
72,500 | $ | 31.4900 | 1/31/15 | |||||||||||||||||||||||||||||
51,000 | $ | 37.8350 | 1/31/16 | |||||||||||||||||||||||||||||
36,750 | 12,250 | $ | 40.1500 | 1/18/17 | ||||||||||||||||||||||||||||
20,500 | 20,500 | $ | 37.6450 | 1/17/18 | ||||||||||||||||||||||||||||
15,500 | 46,500 | $ | 23.0000 | 1/28/19 | ||||||||||||||||||||||||||||
0 | 36,000 | $ | 43.3700 | 1/20/20 | ||||||||||||||||||||||||||||
0 / 46,500 (c | ) | $ | 0 (g | ) | ||||||||||||||||||||||||||||
0 / 33,000 (d | ) | $ | 0 (h | ) | ||||||||||||||||||||||||||||
26,100 / 26,100 (e | ) | $ | 1,059,921 (i | ) | ||||||||||||||||||||||||||||
15,400 / 28,000 (f | ) | $ | 625,394 (j | ) | ||||||||||||||||||||||||||||
Beth O. Canavan | 55,000 | $ | 39.7500 | 1/15/14 | ||||||||||||||||||||||||||||
29,000 | $ | 37.8350 | 1/31/16 | |||||||||||||||||||||||||||||
21,000 | 7,000 | $ | 40.1500 | 1/18/17 | ||||||||||||||||||||||||||||
20,500 | 20,500 | $ | 37.6450 | 1/17/18 | ||||||||||||||||||||||||||||
15,500 | 46,500 | $ | 23.0000 | 1/28/19 | ||||||||||||||||||||||||||||
0 | 36,000 | $ | 43.3700 | 1/20/20 | ||||||||||||||||||||||||||||
0 / 26,500 (c | ) | $ | 0 (g | ) | ||||||||||||||||||||||||||||
0 / 33,000 (d | ) | $ | 0 (h | ) | ||||||||||||||||||||||||||||
26,100 / 26,100 (e | ) | $ | 1,059,921 (i | ) | ||||||||||||||||||||||||||||
15,400 / 28,000 (f | ) | $ | 625,394 (j | ) | ||||||||||||||||||||||||||||
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Option Awards | Stock Awards | ||||||||||||||||||||||||||||||||
Equity | |||||||||||||||||||||||||||||||||
Equity | Incentive | ||||||||||||||||||||||||||||||||
Incentive | Plan Awards | ||||||||||||||||||||||||||||||||
Plan Awards | Market or | ||||||||||||||||||||||||||||||||
Number | Number | Number | Payout Value | ||||||||||||||||||||||||||||||
Of | Of | Of | Of | ||||||||||||||||||||||||||||||
Securities | Securities | Unearned | Unearned | ||||||||||||||||||||||||||||||
Underlying | Underlying | Shares, Units or | Shares, Units 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. | 85,000 | $ | 39.7500 | 1/15/14 | |||||||||||||||||||||||||||||
Fernandez | 41,000 | $ | 37.8350 | 1/31/16 | |||||||||||||||||||||||||||||
29,250 | 9,750 | $ | 40.1500 | 1/18/17 | |||||||||||||||||||||||||||||
28,500 | 28,500 | $ | 37.6450 | 1/17/18 | |||||||||||||||||||||||||||||
21,500 | 64,500 | $ | 23.0000 | 1/28/19 | |||||||||||||||||||||||||||||
0 | 50,000 | $ | 43.3700 | 1/20/20 | |||||||||||||||||||||||||||||
0 / 37,500 (c | ) | $ | 0 (g | ) | |||||||||||||||||||||||||||||
0 / 45,000 (d | ) | $ | 0 (h | ) | |||||||||||||||||||||||||||||
36,200 / 36,200 (e | ) | $ | 1,470,082 (i | ) | |||||||||||||||||||||||||||||
20,900 / 38,000 (f | ) | $ | 848,749 (j | ) | |||||||||||||||||||||||||||||
Jon M. | 5,000 | $ | 32.4700 | 1/18/11 | |||||||||||||||||||||||||||||
King | 7,000 | $ | 34.0200 | 1/16/12 | |||||||||||||||||||||||||||||
3,000 | $ | 35.9550 | 3/21/12 | ||||||||||||||||||||||||||||||
2,500 | $ | 25.8450 | 1/16/13 | ||||||||||||||||||||||||||||||
15,000 | $ | 25.9400 | 3/20/13 | ||||||||||||||||||||||||||||||
35,000 | $ | 39.7500 | 1/15/14 | ||||||||||||||||||||||||||||||
30,000 | $ | 31.4900 | 1/31/15 | ||||||||||||||||||||||||||||||
23,000 | $ | 37.8350 | 1/31/16 | ||||||||||||||||||||||||||||||
7,500 | 2,500 | $ | 33.7850 | 6/07/16 | |||||||||||||||||||||||||||||
19,500 | 6,500 | $ | 40.1500 | 1/18/17 | |||||||||||||||||||||||||||||
20,500 | 20,500 | $ | 37.6450 | 1/17/18 | |||||||||||||||||||||||||||||
15,500 | 46,500 | $ | 23.0000 | 1/28/19 | |||||||||||||||||||||||||||||
0 | 36,000 | $ | 43.3700 | 1/20/20 | |||||||||||||||||||||||||||||
0 / 25,000 (c | ) | $ | 0 (g | ) | |||||||||||||||||||||||||||||
0 / 33,000 (d | ) | $ | 0 (h | ) | |||||||||||||||||||||||||||||
26,100 / 26,100 (e | ) | $ | 1,059,921 (i | ) | |||||||||||||||||||||||||||||
15,400 / 28,000 (f | ) | $ | 625,394 (j | ) | |||||||||||||||||||||||||||||
(a) | For any option reported, the grant date was ten (10) years prior to the expiration date shown. All options vest 25% per year over the four-year period following a grant date. | ||
(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 (g), (h), (i) and (j) 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. |
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(c) | This grant will have vested three business days following the date on which the Company’s financial results for Fiscal 2009 were publicly reported. | ||
(d) | This grant will vest three business days following the date on which the Company’s financial results for Fiscal 2010 are publicly reported. | ||
(e) | This grant will vest three business days following the date on which the Company’s financial results for Fiscal 2011 are publicly reported. | ||
(f) | This grant will vest three business days following the date on which the Company’s financial results for Fiscal 2012 are publicly reported. | ||
(g) | This value has been computed based upon Company EPS and ROA performance in Fiscal 2009, 2008, and 2007. The earnings threshold was not met and, therefore, no units vested. | ||
(h) | This value has been computed based upon Company EPS and ROA performance in Fiscal 2009 and 2008. The computation assumes that 0% of the units will vest based on EPS performance. The resulting value was computed on the basis of the stock closing price on January 29, 2010, $40.61. | ||
(i) | This value has been computed on the assumption that Earnings from Continuing Operations Target will be met in any of Fiscal 2009, 2010, or 2011. The performance test was met in the period ending January 31, 2010 and, therefore, the Units will vest at 100%.The resulting value was computed on the basis of the stock closing price on January 29, 2010, $40.61. | ||
(j) | This value has been computed at Earnings Per Share target and on the assumption that the Return on Asset performance goal will have been achieved. The resulting value was computed on the basis of the stock closing price on January 29, 2010, $40.61. |
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Fiscal 2009
Option Awards | Stock Awards | |||||||||||||||
Number of | Value | Number of | Value | |||||||||||||
Shares | Realized | Shares | Realized | |||||||||||||
Acquired on | on | Acquired on | on | |||||||||||||
Exercise | Exercise | Vesting | Vesting | |||||||||||||
Name | (#) | ($) | (#) | ($) | ||||||||||||
Michael J. Kowalski | 150,000 | (a) | $ | 539,295 | 28,756 | $ | 651,898 | |||||||||
James E. Quinn | 100,000 | (b) | $ | 167,180 | 17,472 | $ | 396,090 | |||||||||
Beth O. Canavan | 215,000 | (c) | $ | 1,911,668 | 9,828 | $ | 222,800 | |||||||||
James N. Fernandez | 340,000 | (d) | $ | 3,987,528 | 14,196 | $ | 321,823 | |||||||||
Jon M. King | 6,000 | (e) | $ | 16,271 | 7,644 | $ | 173,289 | |||||||||
(a) | Weighted-average holding period for options exercised: 10.0 years. | |
(b) | Weighted-average holding period for options exercised: 9.9 years. | |
(c) | Weighted-average holding period for options exercised: 8.1 years. | |
(d) | Weighted-average holding period for options exercised: 8.0 years. | |
(e) | Weighted-average holding period for options exercised: 10.0 years. |
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Payments | ||||||||||||||||
Actuarial | During | |||||||||||||||
Number | Present Value of | Last | ||||||||||||||
of Years | Accumulated | Fiscal | ||||||||||||||
Credited | Benefits | Year | ||||||||||||||
Name | Plan Name (a) | Service | ($) | ($) | ||||||||||||
Pension Plan | 31(b)( | d) | $ 623,378 | $ 0 | ||||||||||||
Michael J. Kowalski | Excess Plan | 31(b)( | d) | $ 6,472,351 | $ 0 | |||||||||||
Supplemental Plan | 31(b)( | d) | $ 1,701,948 | $ 0 | ||||||||||||
Pension Plan | 23 ( | d) | $ 465,471 | $ 0 | ||||||||||||
James E. Quinn | Excess Plan | 23 ( | d) | $ 2,841,488 | $ 0 | |||||||||||
Supplemental Plan | 23 ( | d) | $ 1,207,491 | $ 0 | ||||||||||||
Pension Plan | 22 | $ 398,424 | $ 0 | |||||||||||||
Beth O. Canavan | Excess Plan | 22 | $ 1,454,388 | $ 0 | ||||||||||||
Supplemental Plan | 22 | $ 702,663 | $ 0 | |||||||||||||
Pension Plan | 31 ( | c) | $ 489,911 | $ 0 | ||||||||||||
James N. Fernandez | Excess Plan | 31 ( | c) | $ 2,472,564 | $ 0 | |||||||||||
Supplemental Plan | 31 ( | c) | $ 649,225 | $ 0 | ||||||||||||
Pension Plan | 19 | $ 291,174 | $ 0 | |||||||||||||
Jon M. King | Excess Plan | 19 | $ 919,753 | $ 0 | ||||||||||||
Supplemental Plan | 19 | $ 64,373 | $ 0 | |||||||||||||
(a) | The formal names of the plans are: the Tiffany and Company 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. Under the Supplemental Plan, the combined benefit available under the retirement plans and Social Security is 60% of average final compensation for a participant with 25 or more years of service (seeSupplemental Plan). Because Mr. Kowalski attained 25 years of service with Tiffany as of October 14, 2009, the total retirement benefit available to him will not increase as a result of the credited 6.4 years of service described above. Rather, the effect of this credited service has been to augment the present value of his accumulated benefit under the Pension Plan and Excess Plan only as follows, resulting in a reduced obligation under the Supplemental Plan: |
Pension Plan | $ | 125,985 | ||
Excess Plan | $ | 1,308,060 | ||
Supplemental Plan | $ | (1,434,045 | ) |
(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. Under the Supplemental Plan, the combined benefit available under the retirement plans and Social Security is 60% of average final compensation for a participant with 25 or more years of service (seeSupplemental Plan). Because Mr. Fernandez attained 25 years of service with Tiffany as of October 14, 2009, the total |
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retirement benefit available to him will not increase as a result of the credited 6.3 years of service described above. Rather, the effect of this credited service has been to augment the present value of his accumulated benefit under the Pension Plan and Excess Plan only as follows, resulting in a reduced obligation under the Supplemental Plan: |
Pension Plan | $ | 97,982 | ||
Excess Plan | $ | 494,513 | ||
Supplemental Plan | $ | (592,495 | ) |
(d) | Mr. Kowalski, Mr. Quinn and Mrs. Canavan are currently eligible for early retirement under each of the Pension, Excess and Supplemental Plan. seeEarly Retirementon PS-69. 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 age precedes age 60. |
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• | 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; | ||
• | 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 officers and other select management 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; |
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• | benefits are subject to forfeiture if employment is terminated for cause; | ||
• | 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; | ||
• | benefits are payable upon the later of the participant’s separation from service, as defined under the plan, or attainment of age 55; and | ||
• | participants will not receive any distribution from the plan until six months following separation from service. |
• | 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 executive officers; | ||
• | it uses a different benefit formula than that used by the Pension Plan and the Excess Plan; | ||
• | 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 the executive attains, while employed by Tiffany, age 65, or age 55 if he or she has provided 10 years of service (benefits will vest earlier on a termination from employment following a change in control (See “Definition of a Change in Control” below)); | ||
• | benefits are subject to forfeiture if employment is terminated for cause; | ||
• | 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; and | ||
• | participants will not receive any distribution from the plan until six months following separation from service as defined under the plan. |
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 |
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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. |
(Fiscal 2009)
Aggregate | Aggregate | |||||||||||||||||||
Executive | Registrant | Earnings | Balance | |||||||||||||||||
Contribution | Contribution | In | At | |||||||||||||||||
In | In | Last Fiscal | Aggregate | Last Fiscal | ||||||||||||||||
Last Fiscal | Last Fiscal | Year | Withdrawals/ | Year End | ||||||||||||||||
Year (a) | Year | (b) | Distributions | (c) | ||||||||||||||||
Name | ($) | ($) | ($) | ($) | ($) | |||||||||||||||
Michael J. Kowalski | $ | 95,896 | $ 0 | $ | 63,554 | $ | 53,144 | $ | 406,446 | |||||||||||
James E. Quinn | $ | 0 | $ 0 | $ | 304,820 | $ | 0 | $ | 1,126,511 | |||||||||||
Beth O. Canavan | $ | 115,075 | $ 0 | $ | 142,688 | $ | 58,928 | $ | 543,634 | |||||||||||
James N. Fernandez | $ | 35,482 | $ 0 | $ | 270,761 | $ | 0 | $ | 1,067,819 | |||||||||||
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. | |
(b) | Amounts shown in this column are not reported as compensation in the Summary Compensation Table because the Company’s Executive Deferral Plan does not pay above-market or preferential earnings on compensation that is deferred. | |
(c) | Amounts shown in this column include amounts that were reported as compensation in the Summary Compensation Table for Fiscal 2009 and for prior fiscal years to the extent that such amounts were contributed by the executive but not to the extent that such amounts represent earnings. See Note (b) above. |
• | Participation is open to directors and executive officers of the Company as well as other vice presidents and “director-level” employees of Tiffany; |
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• | 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; | |
• | Termination of services 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 services. |
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Total Potential | ||||||||||||||||||||||||||||||||||||||||||
Payments | ||||||||||||||||||||||||||||||||||||||||||
Assuming | ||||||||||||||||||||||||||||||||||||||||||
Both a | ||||||||||||||||||||||||||||||||||||||||||
Change in | ||||||||||||||||||||||||||||||||||||||||||
Control and a | ||||||||||||||||||||||||||||||||||||||||||
Vesting On Change in Control | Subsequent | |||||||||||||||||||||||||||||||||||||||||
With or Without Termination | Payable or Vesting On Termination of Employment Following | Termination of | ||||||||||||||||||||||||||||||||||||||||
of Employment | Change in Control | Employment | ||||||||||||||||||||||||||||||||||||||||
Early | Early Vesting of | Early | Cash | Welfare | Early | Early | ||||||||||||||||||||||||||||||||||||
Vesting | Restricted Stock | Vesting of | Severance | Benefits | Vesting | Vesting | ||||||||||||||||||||||||||||||||||||
of Stock | Units Granted | Supplemen | Payment (d) | (e) | of Stock | Restrtd | ||||||||||||||||||||||||||||||||||||
Options | Prior to January | tal Plan (c) | Options | Stock | ||||||||||||||||||||||||||||||||||||||
Granted | 2009 (b) | Granted | Units | |||||||||||||||||||||||||||||||||||||||
Prior to | January | Granted | ||||||||||||||||||||||||||||||||||||||||
January | 2009 or | January | ||||||||||||||||||||||||||||||||||||||||
2009 (a) | Later (f) | 2009 or | ||||||||||||||||||||||||||||||||||||||||
Name | Later (g) | Total (h) | ||||||||||||||||||||||||||||||||||||||||
Michael J. Kowalski | $ | 158,840 | $ | 6,253,940 | $ | 0 | $ | 4,000,000 | $ | 35,852 | $ | 2,047,163 | $ | 794,332 | $ | 13,290,127 | ||||||||||||||||||||||||||
James E. Quinn | $ | 66,520 | $ | 3,228,495 | $ | 0 | $ | 2,516,000 | $ | 35,852 | $ | 818,865 | $ | 317,976 | $ | 6,983,708 | ||||||||||||||||||||||||||
Beth O. Canavan | $ | 64,105 | $ | 2,416,295 | $ | 0 | $ | 2,040,000 | $ | 35,852 | $ | 818,865 | $ | 317,976 | $ | 5,693,093 | ||||||||||||||||||||||||||
James N. Fernandez | $ | 89,130 | $ | 3,350,325 | $ | 889,140 | $ | 2,516,000 | $ | 35,852 | $ | 1,135,845 | $ | 441,025 | $ | 8,457,317 | ||||||||||||||||||||||||||
Jon M. King | $ | 80,950 | $ | 2,355,380 | $ | 88,161 | $ | 2,040,000 | $ | 12,820 | $ | 818,865 | $ | 317,976 | $ | 5,714,152 | ||||||||||||||||||||||||||
(a) | The value of early vesting of stock options granted prior to January 2009 was determined using $40.61, the closing value of the Company’s common stock on January 29, 2010. In the event of a change in control the unvested portion of such options vests in full. | |
(b) | The value of early vesting of performance-based restricted stock units granted in January 2008 and January 2007 was determined using $40.61, the closing value of the Company’s common stock on January 29, 2010. In the event of a change in control such units vest at the maximum number of shares. | |
(c) | Absent a change in control followed by termination of employment, the Supplemental Plan will vest only when the participant attains the in-service age of 55 years with ten years of service, or in-service age of 65 years. | |
(d) | Cash severance payments were determined by multiplying the sum of (i) actual salary and (ii) the target annual incentive award or bonus, by two. | |
(e) | The amounts shown in this column represent two 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 |
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terminate from employment and were determined on the basis of the coverage elections made by the executive officer. | ||
(f) | The value of early vesting of stock options granted in January 2009 and January 2010 was determined using $40.61, the closing value of the Company’s common stock on January 29, 2010. In the event of a change in control that is not a Terminating Transaction the unvested portion of such options will vest only upon the executive’s involuntary termination from employment. For the purposes of this table it is assumed that the change in control was a 35% share acquisition and not a Terminating Transaction. | |
(g) | The value of early vesting of performance-based restricted stock units granted in January 2009 was determined using $40.61, the closing value of the Company’s common stock on January 29, 2010. In the event of a change in control that is not a Terminating Transaction, only a portion of unvested performance-based restricted stock units will vest, pursuant to a schedule based on the applicable three-year performance period. For the purposes of this table it is assumed that the change in control was a 35% share acquisition and not a Terminating Transaction. Accordingly this column assumes a 30% early vesting of the restricted stock units. In the event of a Terminating Transaction, all unvested performance-based restricted stock units granted in January 2009 will vest, and the value to each of the executives would have been as follows: |
Michael J. Kowalski | $ | 2,647,772 | ||
James E. Quinn | $ | 1,059,921 | ||
Beth O. Canavan | $ | 1,059,921 | ||
James N. Fernandez | $ | 1,470,082 | ||
Jon M. King | $ | 1,059,921 |
(h) | This column is the total of columns (a) through (g) in the table above. It assumes that two events have occurred: a change in control and a termination of employment following such change in control. |
• | Two times the sum of the executive’s salary and target annual incentive award or bonus, as severance; and | ||
• | Two years of benefits continuation under Tiffany’s health and welfare plans. |
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• | Any person or group of persons acting in concert (a “person” being an individual or organization) acquires 35% or more in voting power or stock of the Company, or the right to obtain such voting power; | ||
• | A majority of the Board is, for any reason, not made up of individuals who were either on the Board on January 15, 2009, or, if they became members of the Board after that date, were approved by the directors; | ||
• | As a result of a corporate transaction such as a merger, the stockholders of Tiffany immediately prior to such transaction do not own 51% of Tiffany’s outstanding shares; or | ||
• | All or substantially all assets of the Company or Tiffany are sold or disposed of to an unrelated party. |
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Fiscal 2009
Change in | ||||||||||||
Pension Value and | ||||||||||||
Nonqualified | ||||||||||||
Fees Earned | Option | Stock | Deferred | All Other | ||||||||
or Paid in | Awards | Awards | Compensation | Compensation | Total | |||||||
Name | Cash ($)(a) | ($) (b) (c) | ($) | Earnings (d) | ($) | ($) | ||||||
Rose Marie Bravo | $ 72,583 | $ 47,133 | $ 44,139 | $ 34,781 | $ 0 | $ 198,636 | ||||||
Gary E. Costley | $ 88,583 | $ 47,133 | $ 44,139 | N/A | $ 0 | $ 179,855 | ||||||
Lawrence K. Fish | $ 103,833 | $ 47,133 | $ 44,139 | N/A | $ 0 | $ 195,105 | ||||||
Abby F. Kohnstamm | $ 75,583 | $ 47,133 | $ 44,139 | N/A | $ 0 | $ 166,855 | ||||||
Charles K. Marquis | $ 90,583 | $ 47,133 | $ 44,139 | $ 21,550 | $ 0 | $ 203,405 | ||||||
Peter W. May | $ 72,583 | $ 47,133 | $ 44,139 | N/A | $ 0 | $ 163,855 | ||||||
J. Thomas Presby | $ 92,583 | $ 47,133 | $ 44,139 | N/A | $ 0 | $ 183,855 | ||||||
William A. Shutzer | $ 84,583 | $ 47,133 | $ 44,139 | $ 56,796 | $ 0 | $ 232,651 | ||||||
(a) | Includes amounts deferred under the Executive Deferral Plan. | |
(b) | Amounts shown represent the grant-date fair value for stock options granted for Fiscal 2009. 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, 2010. 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 | 52,217 | |||
Gary E. Costley | 24,717 | |||
Lawrence K. Fish | 24,717 | |||
Abby F. Kohnstamm | 74,717 | |||
Charles K. Marquis | 97,593 | |||
Peter W. May | 24,717 | |||
J. Thomas Presby | 49,717 | |||
William A. Shutzer | 74,717 | |||
(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: RP 2000 Male/Female Mortality Table Projected to 2010; discount rate of 6.5% and retirement age of 65 (if the director is over age 65, the director is assumed to retire on January 31, 2010). This column does not include earnings under the Deferral Plan |
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because the Deferral Plan does not pay above-market or preferential earnings on compensation that is deferred. Where an N/A appears, the director is not eligible for this benefit. |
• | An annual retainer of $75,000 (this was increased from $50,000 effective June 1, 2009, at which time per-meeting-attended fees were eliminated. Under the prior practice a $2,000 per meeting fee was paid); | ||
• | An additional annual retainer of $20,000 to the chairperson of the Audit Committee, and or $15,000 to the chairperson of the Compensation, Finance, and Nominating/Corporate Governance Committee each; | ||
• | Telephonic meeting fees were eliminated effective June 1, 2009. Under the prior practice a $1,000 per telephonic meeting was paid; | ||
• | Equity compensation, as discussed below; and | ||
• | A retirement benefit, also discussed below. |
Director | Registrant | Aggregate | ||||||||||||||||||
Contribution | Contribution | Aggregate | Balance | |||||||||||||||||
In | In | Earnings | Aggregate | At | ||||||||||||||||
Last Fiscal | Last Fiscal | In | Withdrawals/ | Last Fiscal Year | ||||||||||||||||
Year | Year | Last Fiscal Year | Distributions | End | ||||||||||||||||
Name | ($) | ($) | ($) | ($) | ($) | |||||||||||||||
Gary E. Costley | $ | 0 | $ | 0 | $ | 31,431 | $ | 0 | $ | 124,932 | ||||||||||
Charles K. Marquis | $ | 0 | $ | 0 | $ | 99,451 | $ | 0 | $ | 384,628 | ||||||||||
William A. Shutzer | $ | 84,583 | $ | 0 | $ | 191,216 | $ | 0 | $ | 723,467 | ||||||||||
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Michael J. Kowalski | Mr. Kowalski, 58, is Chairman of the Board and Chief Executive Officer of Tiffany & Co. He succeeded William R. Chaney as Chairman at the end of Fiscal 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 Mellon. The Bank of New York Mellon is Tiffany’s principal banking relationship, serving as Administrative Agent and a lender under a Revolving Credit Facility, and as the trustee and an investment manager for Tiffany’s employee pension plan; and BNY Mellon Shareowner Services serves as the Company’s transfer agent and registrar. Mr. Kowalski holds a B.S. from the University of Pennsylvania’s Wharton School and an M.B.A. from the Harvard Business School. He has been a director of the following public companies during the past five years: Fairmont Hotels. Key Skills: merchandising, management, strategic planning, and motivation. | |
Rose Marie Bravo | Rose Marie Bravo, CBE, 59, became a director of Tiffany & Co. in October 1997 when she was selected by the Board to fill a newly created directorship. Ms. Bravo previously served as Chief Executive Officer of Burberry Limited from 1997 until 2006 and as President of Saks Fifth Avenue from 1992 to 1997. Prior to Saks, Ms. Bravo held a series of merchandising jobs at Macy’s culminating in the Chairman & Chief Executive Officer role at I. Magnin which was a division of R. H. Macy & Co. Ms. Bravo serves on the Board of Directors of Estee Lauder Companies Inc. and on the Compensation Committee of that Board. She has been a director of the following public |
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companies during the past five years: Burberry Limited. Key Skills: brand management, merchandising, and product development. | ||
Gary E. Costley | Dr. Costley, 66, was first elected to the Board in May 2007. He 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 1997 until June 2004. Dr. Costley was Dean of the Graduate School of Management at Wake Forest University from 1995 until 1997. Dr. Costley held numerous positions at the Kellogg Company from 1970 until June 1994. His most recent position was President of Kellogg North America. He is a director of three other public companies: The Principal Financial Group, Covance Inc. and Prestige Brands Holdings, Inc. He has been a director of the following public companies during the past five years: Pharmacopeia and Accelysis. Key Skills: multi-divisional operations, global management, and manufacturing. | |
Lawrence K. Fish | Mr. Fish, 65, retired as Chairman and Chief Executive Officer of Citizens Financial Group, Inc. (“Citizens”) in 2007. He served in that role since 2005, and before that as Chairman, President and Chief Executive Officer, from 1992, of Citizens. Mr. Fish is a member of the Board of Trustees of Massachusetts Institute of Technology and an Overseer of the Boston Symphony Orchestra. He serves on the board of Textron and as Chairman of its Nominating and Corporate Governance Committee. He also serves as a director of The Brookings Institution. Mr. Fish was first elected a director of the Company in May 2008. In early 2010 Mr. Fish agreed to serve, on an interim basis, as Chief Executive Officer and on the board of NBH Holdings Corp., a Boston-based company that invests in bank acquisitions and recapitalizations. He has been a director of the following public companies during the past five years: Royal Bank of Scotland. Key Skills: risk analysis, finance, brand management, and community banking. | |
Abby F. Kohnstamm | Ms. Kohnstamm, 56, is the President and founder of Abby F. Kohnstamm & Associates, Inc., a marketing and consulting firm. Prior to establishing her company in January 2006, Ms. Kohnstamm served as Senior Vice President, Marketing (Chief Marketing Officer) of IBM Corporation from 1993 through 2005. In that capacity, she had overall responsibility for all aspects of marketing across IBM on a global basis. She was also a member of the Corporate Executive Committee, which advised the Chairman and CEO on policy issues and the management of IBM and a member of the Strategy Team, which focused on IBM’s strategic direction and emerging business opportunities. A few of Ms. Kohnstamm’s major accomplishments at IBM included developing IBM’s first professional marketing function and key marketing processes, as well as repositioning and relaunching the IBM brand from a weakened position to one of today’s top global brands. Before joining IBM, 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 and is a member of the Board of Directors of the Roundabout Theatre Company. She served on the Board of Trustees of Tufts University for ten years and is currently a Trustee Emeritus. She became a director of Tiffany & Co. in July 2001, when she was selected by the Board to replace a retiring director. She holds a B.A. from |
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Tufts University, an M.A. in Education from New York University and an M.B.A. from New York University. Key Skills: brand management, global management, media management, and strategic planning. | ||
Charles K. Marquis | Mr. Marquis, 67, 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. where he practiced securities and mergers and acquisitions law. He was elected a director of Tiffany & Co. in 1984. He has been a director of the following public companies during the past five years: CSK Auto. Key Skills: finance, risk analysis, crisis management, and investor relations. | |
Peter W. May | Mr. May, 67, is President and founding partner of Trian Fund Management, L.P., a New York-based asset management firm launched in November 2005. Mr. May also serves as non-executive Vice Chairman and a director of Wendy’s/Arby’s Group, Inc. (formerly Triarc Companies, Inc. (“Triarc”)) (WEN), which is the third largest quick service restaurant company in the United States and is the franchisor of the Wendy’s®and Arby’s®restaurant systems. In addition, Mr. May serves as a director, and chairman of the compensation committee, of Deerfield Capitol Corp. (NASDAQ:DFR). Mr. May served as President and Chief Operating Officer of Triarc from April 1993 through June 2007. Prior to joining Triarc, Mr. May was President and Chief Operating Officer of Trian Group, Limited Partnership, which provided investment banking and management services for entities controlled by him and Nelson Peltz. From 1983 to December 1988, Mr. May served as President and Chief Operating Officer and a director of Triangle Industries, Inc., which, through wholly-owned subsidiaries, was, at the time, a manufacturer of packaging products (through American National Can Company), copper electrical wire and cable and steel conduit and currency and coin handling products. Mr. May is the Chairman of the Board of Trustees of The Mount Sinai Medical Center in New York, where he led the turnaround of this major academic health center from serious financial difficulties to what is today one of the most profitable and fastest growing academic medical centers in the United States. In addition, Mr. May is a Trustee of the University of Chicago, a member of its Executive Committee, and a member of the Advisory Council on the Graduate School of Business at The University of Chicago. Mr. May is also a Trustee of Carnegie Hall and a Trustee of the New York Philharmonic and a partner of the Partnership for New York City, as well as the past Chairman of the UJA Federation’s “Operation Exodus” campaign and an honorary member of the Board of Trustees of The 92nd Street Y. He is Chairman of the Board of The Leni and Peter May Family Foundation. He was first elected a director of the Company in May 2008. Key Skills: multi-divisional operations, brand management, investor relations, and finance. | |
J. Thomas Presby | Mr. Presby, 70, 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, Invesco Ltd, First Solar, Inc., and World Fuel Services, Inc. As Mr. Presby has no significant business activities other than board service, he is available full time to fulfill his board responsibilities. He is a Certified Public Accountant and a holder of the NACD Certificate of Director Education. He has been a director of the following |
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public companies during the past five years: Turbochef Technologies (2003 –2009). Key Skills: accounting, risk analysis, management processes, and global management. | ||
William A. Shutzer | Mr. Shutzer, 63, 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 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 Board of Directors of WebMedia Brands Inc. (formerly known as Jupiter Media Corp.). He has been a director of the following public companies during the past five years: American Financial Group (2003-2006); CSK Auto (2002-2008); and Turbochef Technologies (2003-2009). Key Skills: finance, investor relations, and strategic development. |
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Patrick B. Dorsey
Secretary
April 9, 2010
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(a Delaware corporation)
and amended and restated March 15, 2007)
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Both are available 24 hours a day, 7 days a week.
Please mark your votes as indicated in this example | x |
FOR | AGAINST | ABSTAIN | FOR | AGAINST | ABSTAIN | |||||||||||
1.1 Michael J. Kowalski | c | c | c | 1.6 Charles K. Marquis | c | c | c | |||||||||
1.2 Rose Marie Bravo | c | c | c | 1.7 Peter W. May | c | c | c | |||||||||
1.3 Gary E. Costley | c | c | c | 1.8 J. Thomas Presby | c | c | c | |||||||||
1.4 Lawrence K. Fish | c | c | c | 1.9 William A. Shutzer | c | c | c | |||||||||
1.5 Abby F. Kohnstamm | c | c | c |
FOR | AGAINST | ABSTAIN | ||||||
Item 2: | Ratification of the selection of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for fiscal year 2010. | c | c | c | ||||
I PLAN TO ATTEND THE ANNUAL MEETING | c |
Mark Here for Address Change or Comments SEE REVERSE | c |
Signature | Signature | Date |
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727 Fifth Avenue
New York, N.Y. 10022
THURSDAY, MAY 20, 2010
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; and | |
2. | Ratification of the selection of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for fiscal year 2010. |
Secretary
New York, New York
April 9, 2010
THIS PROXY IS CONTINUED ON THE REVERSE SIDE
Address Change/Comments (Mark the corresponding box on the reverse side) | BNY MELLON SHAREOWNER SERVICES P.O. BOX 3550 SOUTH HACKENSACK, NJ 07606-9250 | ||
WO# Fulfillment# 71073 71079 |