Exhibit 140c
Tiffany & Co.
Report on Form 8-K Dated January 25, 2010
PERFORMANCE-
BASED
RESTRICTED
STOCK GRANT
Terms
2010 Version
TIFFANY & CO.
a Delaware Corporation
(the "Company")
TERMS OF PERFORMANCE-BASED RESTRICTED STOCK GRANT
(Non-Transferable)
under the
2005 EMPLOYEE INCENTIVE PLAN
(the "Plan")
Terms Adopted January 20, 2010
1. Introduction and Terms of Grant. Participant has been granted (the "Grant")
Stock Units which shall be settled by the issuance and delivery of Shares of the
Company's Common Stock. The Grant has been made under the Plan by the Stock
Option Subcommittee of the Company's Board of Directors (the "Committee"). The
name of the "Participant", the "Grant Date", the number of "Stock Units"
granted, the "Performance Period", the "Earnings Threshold", the "Earnings
Target", the "Earnings Maximum" and the "ROA Target" are stated in the attached
"Notice of Grant". The other terms and conditions of the Grant are stated in
this document and in the Plan. Certain initially capitalized words and phrases
used in this document are defined in the Definitions Appendix attached and
elsewhere in this document or in the Plan. Reference to Stock Units in this
document is reference to all or part of the Stock Units which are subject to the
Grant, and not to other Stock Units that have been granted or that may be
granted in the future.
2. Grant and Adjustment. Subject to the terms and conditions stated in this
document, Participant has been granted Stock Units by the Company. As of the
Grant Date, each Stock Unit has a Settlement Value of one Share, but the number
of Shares which shall be issued and delivered pursuant to the Grant on the
settlement of each Stock Unit (the "Settlement Value") shall be subject to
adjustment as provided in Section 4.2(c) of the Plan, to adjust for, among other
corporate developments, stock splits and stock dividends. References to
Settlement Values in this document shall be deemed reference to Settlement
Values as so adjusted. As anticipated in Section 4.7 of the Plan, Shares that
have not been issued and delivered to a Participant shall be represented by
Stock Units.
3. Performance Vesting. Unless otherwise provided in sections 4 or 5 below, the
Performance Portion (as defined below) of the Stock Units will vest three
business days following the public announcement of the Company's audited,
consolidated financial results for the last fiscal year in the Performance
Period (the "Maturity Date"). A Stock Unit that has vested is herein referred to
as a "Vested Unit." Within thirty (30) days following the Maturity Date, the
Settlement Value of each Vested Unit, shall be issued and delivered to or for
the account of Participant in Shares. As provided for in Section 7 below, the
Company may make such delivery to a Service Provider. In all circumstances, a
Stock Unit which fails to vest on or before the Maturity Date shall be void and
shall not confer upon the owner of such Stock Unit any rights, including any
right to any Share. In the event that any provision of this document would
otherwise result in the issuance of a fractional Share, the Company will not be
obligated to issue such fractional Share.
The "Performance Portion" shall be a percentage of the Stock Units calculated as
hereinafter provided (provided that the Performance Portion shall never exceed
100% of the Stock Units):
(a) The Performance Portion shall be 0% of the Stock Units if the Earnings
Threshold is not attained over the Performance Period.
(b) Subject to reduction pursuant to subsection (c) below, if the Earnings
Threshold has been attained over the Performance Period, the Performance Portion
shall be 100% of the Stock Units.
(c) If the Earnings Threshold has been attained over the Performance Period the
Committee shall, in its sole discretion, have the right to reduce the
Performance Portion to 0% of the Stock Units or any percentage of the Stock
Units less than 100%. The Committee may exercise such discretion on any date
that occurs following the close of the Performance Period and prior to the
Maturity Date. The Committee has provided guidance to Participant with respect
to factors, including the Earnings Target, the Earnings Maximum and the ROA
Target, that the Committee intends to apply in effecting such a reduction, but
the Committee shall not be limited in its discretion to those factors.
"Earnings" means the Company's consolidated earnings per share on a diluted
basis, as reported in the Company's Annual Report on Form 10-K, aggregated over
the Performance Period and as adjusted by the Committee as provided for below
and in the Plan.
The "Earnings Threshold", "Earnings Target" and "Earnings Maximum" are expressed
in the Notice of Grant as functions of Earnings, as so defined.
"ROA" means the Company's 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. In each of the fiscal years average
assets will be computed by averaging total assets at the beginning and at the
end of the fiscal year; net earnings for such fiscal years shall be divided by
average assets. Both total assets and net earnings shall be as reported in the
Company's Annual Report on Form 10-K.
The "ROA Target" is expressed in the Notice of Grant as a function of ROA, as so
defined.
Each of Earnings and ROA is a "Performance Goal". In determining whether the
Earnings Threshold has been met the Committee shall appropriately adjust any
evaluation of attainment of a Performance Goal to exclude any of the following
events that occurs during a Performance Period: (i) asset write-downs, (ii)
litigation or claim judgments or settlements, (iii) the effect of changes in tax
law, accounting principles or other such laws or provisions affecting reported
results, (iv) accruals for reorganization and restructuring programs, and (v)
extraordinary non-recurring items as described in Accounting Principles Board
Opinion No. 30 and/or in management's discussion and analysis of financial
condition and results of operations appearing in said Annual Report for the
applicable year.
4. Effect of Termination of Employment on Vesting. Except as provided in this
Section 4, no Stock Units shall vest if the Participant's Date of Termination
occurs before the conclusion of the Performance Period:
(a) if the Participant's Date of Termination occurs by reason of death or
Disability within the last fiscal year of the Performance Period, Stock
Units shall vest as provided in Section 3 above as though the Participant's
Date of Termination had not occurred before the conclusion of the
Performance Period;
(b) if the Participant's Date of Termination occurs by reason of death or
Disability within the second fiscal year of the Performance Period, 60% of
Stock Units shall vest on the date of such death or Disability;
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(c) if the Participant's Date of Termination occurs by reason of death or
Disability within the first fiscal year of the Performance Period, 30% of
Stock Units shall vest on the date of such death or Disability;
(d) if the Participant's Date of Termination occurs by reason of Cause, no
Stock Units shall vest;
(e) if the Participant's Date of Termination occurs by reason of Participant's
voluntary resignation, no Stock Units shall vest; and
(f) if the Participant's Date of Termination occurs at the initiative of the
Participant's employer (but not for Cause) the Committee reserves the right
to vest up to the following percentages of the Stock Units, but may
condition such vesting upon Participant's release of the Company and its
affiliates from all claims, Participant's agreement to reasonable
non-competition covenants or both:
(i) 100% of the Stock Units if the Date of Termination occurs in the
last fiscal year of the Performance Period;
(ii) 70% of the Stock Units if the Date of Termination occurs in the
second fiscal year of the Performance Period; and
(iii) 40% of the Stock Units if the Date of Termination occurs in the
first fiscal year of the Performance Period.
In the event of vesting pursuant to subsections (b) through (f) above, the
Settlement Value of each Vested Unit shall, promptly after vesting, be issued
and delivered to or for the account of Participant in Shares. As provided for in
Section 7 below, the Company may make such delivery to a Service Provider.
5. Effect of Change in Control on Vesting.
(a) All Stock Units shall vest upon a Change in Control Date for a Terminating
Transaction unless such Change of Control Date occurs before the start of
the Performance Period in which case none of the Stock Units shall vest.
(b) In the event of a Change in Control as described in clause (i) of the
definition of "Change of Control" and Participant's Involuntary Termination
following the date of such Change of Control, a portion of the Stock Units
shall vest upon Participant's Date of Termination. Such portion is
described in subsection (d) below.
(c) In the event of a Change in Control as described in clauses (ii), (iii) or
(iv) of the definition of "Change of Control" a portion of the Stock Units
shall vest upon the date of such Change of Control. Such portion is
described in subsection (d) below.
(d) If vesting occurs by operation of subsection 5(b) or 5(c) above, the
portion of the Stock Units that shall vest shall be determined as follows:
(i) if such vesting occurs within the last fiscal year of the Performance
Period, 100% of the Stock Units shall vest;
(ii) if such vesting occurs within the second fiscal year of the
Performance Period 70% of the Stock Units shall vest;
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(iii) if such vesting occurs within the first fiscal year of the
Performance Period 30% of the Stock Units shall vest; and
(iv) if such vesting occurs following the conclusion of the Performance
Period, vesting shall occur as provided in Section 3 above regardless
of the fact that Participant's Date of Termination has occurred prior
to the Maturity Date.
(v) For the avoidance of doubt no vesting shall occur pursuant to
subsection 5(b) or 5(c) above if the Change of Control Date occurs
before the start of the Performance Period.
(e) In the event of vesting pursuant to this Section 5, the Settlement Value of
each Vested Unit shall, within thirty days after vesting, be issued and
delivered to or for the account of Participant in Shares. As provided for in
Section 7 below, the Parent may make such delivery to a Service Provider.
6. No Dividends or Interest. No dividends or interest shall accrue or be payable
upon any Stock Unit. Until a Share is issued and delivered it shall not be
registered in the name of the Participant.
7. Withholding for Taxes. All distributions of Shares shall be subject to
withholding of all applicable taxes as computed by the Tiffany and Company
finance department, and the Participant shall make arrangements satisfactory to
the Company to provide the Company (or any Related Company) with funds necessary
for such withholding before the Shares are delivered. Without limitation to the
Company's right to establish other arrangements, the Company may: (i) designate
a single broker or other financial services provider ("Services Provider") to
establish trading accounts for Participants (each a "Participant's Trading
Account"); (ii) deliver Shares to Participant's Trading Account; (iii) provide
Services Provider with information concerning the applicable tax withholding
rates for Participant; (iv) cause Services Provider to sell, on behalf of
Participant, sufficient Shares to cover the Company's tax withholding
obligations with respect to any delivery of Shares to Participant (a "Covering
Sale"); and (v) cause Services Provider to remit funds resulting from such
Covering Sale to Company or any Related Company that is the employer of
Participant. As a condition to distribution the Company may require the
Participant to provide the Services Provider with such signed applications,
authorizations, powers and other documents necessary to accomplish the
foregoing. Participant may, by written notice to the Company addressed to the
Company's Secretary, and given no less than ten (10) business days before the
Maturity Date or other applicable vesting date, elect to avoid such a Covering
Sale by delivering with such notice a bank-certified check payable to the
Company (or other type of check or draft payable to the Company and acceptable
to the Secretary) in the estimated amount of any such withholding required, such
estimate to be provided by the Tiffany and Company finance department. The
Committee may approve other methods of withholding, as provided for in the Plan,
before the Shares are delivered.
8. Transferability. The Stock Units are not transferable otherwise than by will
or the laws of descent and distribution, and shall not be otherwise transferred,
assigned, pledged, hypothecated or otherwise disposed of in any way, whether by
operation of law or otherwise, nor shall it be subject to execution, attachment
or similar process. Upon any attempt to transfer the Stock Units otherwise than
as permitted herein or to assign, pledge, hypothecate or otherwise dispose of
the Stock Units otherwise than as permitted herein, or upon the levy of any
execution, attachment or similar process upon the Grant, the Grant shall
immediately terminate and become null and void.
9. Definitions. For the purposes of the Grant, certain words and phases are
defined in the Definitional Appendix attached. Except where the context clearly
implies or indicates the contrary, a word, term or phrase used in the Plan shall
have the same meaning in this document.
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10. Heirs and Successors. The terms of the Grant shall be binding upon, and
inure to the benefit of, the Company and its successors and assigns, and upon
any person acquiring, whether by merger, consolidation, purchase of assets or
otherwise, all or substantially all of the Company's assets and business.
Participant may designate a beneficiary of his/her rights under the Grant by
filing written notice with the Secretary of the Company. In the event of the
Participant's death prior to the full maturity of the Grant, the Shares will be
delivered to such Beneficiary to the extent that it was matured on the
Participant's Termination Date. If the Participant fails to designate a
Beneficiary, or if the designated Beneficiary dies before the Participant, any
Shares issuable hereunder will be delivered to the Participant's estate.
11. Administration. The authority to manage and control the operation and
administration of the Grant shall be vested in the Committee, and the Committee
shall have all powers with respect to the Grant as it has with respect to the
Plan. Any interpretation of the Grant by the Committee and any decision made by
it with respect to the Grant is final and binding.
12. Plan Governs. Notwithstanding anything in this Agreement to the contrary,
the terms of the Grant shall be subject to the terms of the Plan, a copy of
which may be obtained by the Participant from the office of the Secretary of the
Company.
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Appendix I -- Definitions
"Affiliate" shall mean any Person that controls, is controlled by or is
under common control with, any other Person, directly or indirectly.
"Cause" shall mean a termination of Participant's employment which is the
result of:
(i) Participant's conviction or plea of nolo contendere to a felony
or any other crime involving financial impropriety or which would
tend to subject Employer or any of its Affiliates to public
criticism or materially interfere with Participant's continued
service to Employer;
(ii) Participant's willful violation of the Code of Conduct;
(iii) Participant's willful failure or refusal to perform
substantially all such proper and achievable directives issued by
Participant's superior (other than any such failure resulting
from Participant's incapacity due to physical or mental illness,
any such actual or anticipated failure resulting from a
resignation by Participant for Good Reason, or any such refusal
made by Participant in good faith because Participant believes
such directives to be illegal, unethical or immoral) after a
written demand for substantial performance is delivered to
Participant on behalf of Employer, which demand specifically
identifies the manner in which Participant has not substantially
performed Participant's duties, and which performance is not
substantially corrected by Participant within ten (10) days of
receipt of such demand;
(iv) Participant's gross negligence in the performance of
Participant's duties and responsibilities materially injurious to
the Employer;
(v) Participant's willful breach of any material obligation that
Participant has to Parent or Employer under any written agreement
that Participant has with either Parent or Employer;
(vi) Participant's fraud or dishonesty with regard to Employer or any
of its Affiliates;
(vii) Participant's failure to reasonably cooperate in any
investigation of alleged misconduct by Participant or by any
other employee of Parent, Employer or any Affiliate of Parent or
Employer;
(viii) Participant's death; or
(ix) Participant's Disability.
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For purposes of the previous sentence, no act or failure to act on Participant's
part shall be deemed "willful" unless done, or omitted to be done, by
Participant in bad faith toward, or without reasonable belief that Participant's
action or omission was in the best interests of, Parent, Employer or an
Affiliate of Parent or Employer. Notwithstanding the foregoing, Participant
shall not be deemed to have been terminated for Cause with respect to items (i)
through (vii) unless and until there shall have been delivered to Participant a
copy of a resolution duly adopted by the affirmative vote of not less than
three-fourths (3/4th) of the entire membership of the Employer Board at a
meeting called and held for such purpose (after reasonable notice to Participant
and an opportunity for Participant, together with Participant's counsel, to be
heard before such Board), finding that, in the good faith opinion of such Board,
Cause exists as set forth in any of items (i) through (vii) above.
"Change in Control." A Change in Control shall be deemed to have occurred
if:
(i) any Person, or any syndicate or group deemed to be a person under
Section 14(d)(2) of the Exchange Act, excluding Parent or any of
its Affiliates, a trustee or any fiduciary holding securities
under an employee benefit plan of Parent or any of its
Affiliates, an underwriter temporarily holding securities
pursuant to an offering of such securities or a corporation
owned, directly or indirectly by stockholders of Parent in
substantially the same proportion as their ownership of Parent,
is or becomes the "beneficial owner" (as defined in Rule 13d-3 of
the General Rules and Regulations under the Exchange Act),
directly or indirectly, of securities of Parent representing
Thirty-five percent (35%) or more of the combined voting power of
Parent's then outstanding securities entitled to vote in the
election of directors of Parent;
(ii) if the Incumbent Directors cease to constitute a majority of the
Parent Board; provided, however, that no person shall be deemed
an Incumbent Director if he or she was appointed or elected to
the Parent Board after having been designated to serve on the
Parent Board by a Person who has entered into an agreement with
Parent to effect a transaction described in clauses (i) through
(iv) of this definition;
(iii) there occurs a reorganization, merger, consolidation or other
corporate transaction involving Parent, in each case with respect
to which the stockholders of Parent immediately prior to such
transaction do not, immediately after such transaction, own more
than Fifty percent (50%) of the combined voting power of the
Parent or other corporation resulting from such transaction, as
the case may be;
(iv) all or substantially all of the assets of Parent or Employer are
sold, liquidated or distributed, except to an Affiliate of
Parent.
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"Change in Control Date" shall mean the date on which a Change of Control
occurs except that a Change of Control which constitutes a Terminating
Transaction will be deemed to have occurred as of fourteen days prior to the
date scheduled for the Terminating Transaction if provisions shall not have been
made in writing in connection with such Terminating Transaction for the
assumption of the Option or the substitution for the Option of a new option
covering the stock of a successor employer corporation, or a parent or
subsidiary thereof or of the Parent, with appropriate adjustments as to the
number and kind of shares and prices.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and any
successor provisions thereto.
"Code of Conduct" shall mean Parent's (i) Code of Business and Ethical
Conduct for Directors, the Chief Executive Officer, the Chief Financial
Officer and All Other Officers of the Parent and (ii) Business Conduct
Policy - Worldwide, as amended from time to time prior to the Change of
Control Date and as in effect as of the Change of Control Date.
"Common Stock" shall mean the common stock of Parent.
"Date of Termination" shall mean, with respect to any Participant, the
first day occurring on or after the Grant Date on which Participant's employment
with Employer terminates for any reason; provided that a termination of
employment shall not be deemed to occur by reason of a transfer of the
employment of Participant between Employers; and further provided that the
Participant's employment shall not be considered terminated while the
Participant is on a leave of absence from the Employer approved by Employer or
required by applicable law. If, as a result of a sale or other transaction,
Employer ceases to be an Affiliate of Parent, the occurrence of such transaction
shall be treated as the Participant's Date of Termination caused by the
Participant being discharged by Employer.
"Disability" shall mean Participant's incapacity due to physical or mental
illness which causes Participant to be absent from the full-time performance of
Participant's duties with Employer for six (6) consecutive months provided,
however, that Participant shall not be determined to be subject to a Disability
for purposes of this Award unless Participant fails to return to full-time
performance of Participant's duties with Employer within thirty (30) days after
written Notice of Termination due to Disability is given to Participant.
"Employer" shall mean the Affiliate of Parent that employs Participant from
time to time, and any successor to its business and/or assets by operation of
law or otherwise.
"Employer Board" shall mean the board of directors (or other highest
governing authority other than the shareholders) of Employer.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
and any successor provisions thereto.
"Good Reason" means Participant's resignation from employment with Employer
as a result of any of the following:
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(i) a meaningful and detrimental alteration in Participant's position
or the nature or status of Participant's responsibilities
(including reporting responsibilities) from those in effect
immediately before the Change in Control Date;
(ii) a material failure by Employer to pay Participant a bonus or
incentive award commensurate with the bonus paid others at
Participant's job level (expressed as a percentage of target
bonus) unless such failure is justified by clear and objective
deficiencies of the business units for which Participant is
responsible;
(iii) the relocation of the office of Employer where Participant was
employed immediately prior to the Change in Control Date to a
location which is more than 50 miles away or should Employer
require Participant to be based more than 50 miles away from such
office (except for required travel on the Employer's business to
an extent substantially consistent with Participant's customary
business travel obligations in the ordinary course of business
prior to the Change in Control Date); or
(iv) a Substantial Change.
"Incumbent Directors" shall mean those individuals who were members of the
Parent Board as of January 15, 2009 and those individuals whose later
appointment to such Board, or whose later nomination for election to such Board
by the stockholders of Parent, was approved by a vote of at least a majority of
those members of such Board who either were members of such Board as of January
15, 2009, or whose election or nomination for election was previously so
approved.
"Involuntary Termination" means (i) Participant's termination of employment
by Employer without Cause or (ii) Participant's resignation of employment with
the Employer within one (1) year of the Change of Control Date for Good Reason.
"Notice of Termination" shall mean a written notice indicating the specific
termination provision in this Agreement relied upon and setting forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of Participant's employment under the provision so indicated.
"Parent" shall mean Tiffany & Co., a Delaware corporation, and any
successor to its business and/or assets by operation of law or otherwise.
"Parent Board" shall mean the Board of Directors of Parent.
"Person" shall mean any individual, firm, corporation, partnership, limited
partnership, limited liability partnership, business trust, limited liability
company, unincorporated association or other entity, and shall include any
successor (by merger or otherwise) of such entity.
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"Retirement" shall mean the occurrence of the Participant's Date of
Termination after age 65 or the occurrence of the Participant's Date of
Termination after age 55 pursuant to the retirement practices of Employer.
"Substantial Change" means any material change in the terms or conditions
of Participant's employment (including in salary or target bonus) following a
Change of Control Date that is less favorable to Participant than those in
effect previous to the Change of Control Date other than (i) a change that has
been made on an across-the-board basis for substantially all of Employer's
employees or (ii) a change in equity-based compensation (including the reduction
or elimination thereof) resulting from the Change in Control.
"Terminating Transaction" shall mean any one of the following:
(i) the dissolution or liquidation of the Parent;
(ii) a reorganization, merger or consolidation of the Parent with one
or more Persons as a result of which the Parent goes out of
existence or becomes a subsidiary of another Person; or
(iii) upon the acquisition of substantially all of the property or
more than eighty percent (80%) of the then outstanding stock of
the Parent by another Person;
provided that none of the foregoing transactions (i) through (iii) will be
deemed to be a Terminating Transaction, if as of a date at least fourteen (14)
days prior to the date scheduled for such transaction provisions have been made
in writing in connection with such transaction for the assumption of the Option
or the substitution for the Option of a new option covering the publicly-traded
stock of a successor Person, with appropriate adjustments as to the number and
kind of shares and prices.
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