TIFFANY & CO.
1988 DIRECTOR OPTION PLAN
AS AMENDED MAY 18, 1995
PART 1. PLAN ADMINISTRATION AND ELIGIBILITY
I. Purpose
The purpose of this 1988 Director Option Plan (the "Plan")
of Tiffany & Co. (the "Company") is to encourage ownership in the
Company by outside directors of the Company whose continued
services are considered essential to the Company's continued
progress and thus to provide such directors with a further
incentive to continue as directors of the Company.
II. Administration
An administrator (the "Administrator"), who shall be the
Secretary of the Company and not eligible to participate in the
Plan, shall administer the Plan. Grants of stock options under
the Plan and the amount and nature of the awards to be granted
shall be automatic as described in Section VI. However, all
questions of interpretation of the Plan or of any options issued
under it shall be determined by the Administrator and such
determination shall be final and binding upon all persons having
an interest in the Plan.
III. Participation in the Plan
Directors of the Company who are not employees of the
Company or any subsidiary of the Company shall be eligible to
participate in the Plan.
Employees of the Company or any subsidiary of the Company shall
not be eligible to participate in the Plan.
IV. Stock Subject to the Plan
The maximum number of shares which may be optioned under the
Plan shall be One Hundred Thousand (100,000) shares of the
Company's $.01 par value Common Stock. This limitation on the
number of shares which may be optioned under the Plan shall be
subject to adjustment as provided in Section XI of the Plan.
If any outstanding option under the Plan for any reason
expires or is terminated without having been exercised in full,
the shares allocable to the unexercised portion of such option
shall again become available for grant pursuant to the Plan.
Upon the exercise of an option under the Plan, the Company
may issue shares of the Company's authorized but unissued Common
Stock or the Company may repurchase shares of its Common Stock in
the open market or otherwise.
PART 2. DESCRIPTION OF OPTIONS
V. Non-Statutory Stock Options
All options granted under the Plan shall be non-statutory
options not entitled to special tax treatment under Section 422A
of the Internal Revenue Code of 1986, as amended to date (the
"Code").
VI. Terms, Conditions and Form of Options
Each Option granted under this Plan shall be evidenced by a
written agreement in such form as the Administrator shall from
time to time approve, which agreements and the grant of options
under the Plan shall comply with and be subject to the following
terms and conditions:
A. Option Grant Dates. Options shall be granted
automatically on the date of the tenth business day in January (a
"Grant Date") of any year (except that for the year in which the
Plan is adopted the Grant Date shall be the date of the Plan's
adoption) to any eligible director who, on or prior to June 30th
of the year prior to the year in which said Grant Date occurs,
files with the Administrator an irrevocable election to receive a
stock option in lieu of all or fifty percent (50%) of retainer
fees to be earned in the calendar year in which said Grant Date
occurs (a "Plan Year").
B. Option Formula. The number of option shares granted to
any eligible director shall be equal to the nearest number of
whole shares determined in accordance with the following formula:
Deferred Retainer Number
________________________ = of
(Fair Market Value x .5) Shares
"Deferred Retainer" shall mean the amount which the optionee
would be entitled to receive for serving as a director in the
relevant Plan Year but for the election referred to in Section
VIA above. The term "Deferred Retainer" shall not include fees
associated with service on any committee of the Board of
Directors nor with any other services to be provided to the
Company and shall not include fees paid directors on a per-
meeting-attended basis. "Fair Market Value" shall mean the mean
of the highest and lowest quoted selling prices for the Company's
Common Stock on the relevant Grant Date as reported on The New
York Stock Exchange Composite Tape.
C. Options Non-Transferable. Each option granted under
the Plan by its terms shall not be transferable by the optionee
otherwise than by will or by the laws of descent and distribution
and shall be exercised during the lifetime of the optionee only
by him. No option or interest therein may be transferred,
assigned, pledged or hypothecated by the optionee during his
lifetime, whether by operation of law or otherwise, or be made
subject to execution, attachment or similar process.
D. Period of Option. No option may be exercised before
the first anniversary of the date upon which it was granted;
provided, however, that any option granted pursuant to the Plan
shall become exercisable in full upon the retirement of the
director because of age or total and permanent disability, upon
the death of the optionee or upon the resignation or removal of
the optionee as a director of the Company following a Change in
Control. A "Change in Control" shall mean the acquisition of
voting power in respect of thirty-five percent (35%) of the
shares of voting stock in the company by any person (or any
corporation, partnership, trust, estate or group of persons or
entities, which group was formed pursuant to any agreement,
arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of voting stock of the Company). No
option shall be exercisable after the expiration of fifteen (15)
years from the date upon which such option is granted. Each
option shall be subject to cancellation before its date of
expiration as hereinafter provided in Section XIV.
E. Exercise of Options. Options may be exercised only by
written notice to the Company at its head office accompanied by
payment in cash, certified or bank cashier's check of the full
consideration for the shares as to which such options are
exercised. Unless otherwise prohibited, such consideration may
be paid by delivery of shares of the Company's Common Stock; any
such shares shall be valued at the fair market value of such
shares on the date of exercise. Options may be exercised in full
or in part for whole shares (no fractional shares will be issued)
and any exercisable portion of an option grant not exercised may
be later exercised subject to the expiration date stated above.
F. Exercise by Representative Following Death of Director.
A director, by written notice to the Company, may designate one
or more persons (and from time to time change such designation)
including his legal representative, who, by reason of his death,
shall acquire the right to exercise all or a portion of the
option. If the person or persons so designated wish to exercise
any portion of the option, they must do so within the term of the
option as provided in Subsection VID above. Any exercise by a
representative shall be subject to the provisions of this Plan.
G. Proration. In the event an optionee ceases for any
reason to be a director of the Company prior to such time as an
option granted under this Plan becomes exercisable, such option
shall terminate in respect to the nearest whole number of
optioned shares as is the product of the total number of shares
subject to such option multiplied by a fraction, the numerator of
which is the number of months remaining in the Plan Year
following the month in which said optionee ceases to be a
director and the denominator of which is twelve (12).
VII. Option Price
The Option price per share for the shares covered by each
option shall be one-half (1/2) of the Fair Market Value on the
Grant Date for each respective option.
PART 3. GENERAL PROVISIONS
VIII. Prohibition on Assignment
The rights and benefits under this Plan may not be assigned
except for the designation of a beneficiary as provided in
Section VI.
IX. Time for Granting Options
All options for shares subject to this Plan shall be
granted, if at all, not later than ten (10) years after the
adoption of this Plan by the Company's stockholders.
X. Limitation of Rights
A. No Right to Continue as a Director. Neither the Plan,
nor the granting of an option nor any other action taken pursuant
to the Plan shall constitute or be evidence of any agreement or
understanding, express or implied, that the Company will retain a
director for any period of time, or at any particular rate of
compensation.
B. No Stockholders' Rights for Option. An optionee shall
have no rights as a stockholder with respect to the shares
covered by his options until the date of the issuance to him of a
stock certificate therefor, and no adjustment will be made for
dividends or other rights for which the record date is prior to
the date such certificate is issued.
XI. Changes in Present Stock
In the event of any merger, consolidation, reorganization,
recapitalization, stock dividend, stock split, or other change in
the corporate structure or capitalization affecting the Company's
present Common Stock, appropriate adjustment shall be made in the
number (including the aggregate numbers specified in Section IV)
and kind of shares which are or may become subject to options
granted or to be granted hereunder.
XII. Effective Date of the Plan
The Plan shall take effect on the date of adoption by the
directors of the Company subject to and conditioned upon
subsequent approval by the stockholders of the Company. Options
may be granted under the Plan at any time after such adoption and
prior to the termination of the Plan; provided, however, that if
the stockholders of the Company fail to approve the Plan by
December 31, 1988, all options granted under the Plan and
elections made pursuant to Section VIA of the Plan shall be void
ab initio and without further force or effect; and provided
further, that the Plan, all options granted under the Plan and
all elections made pursuant to Section VIA of the Plan shall be
void ab initio and without further force or effect if the staff
of the Securities and Exchange Commission fails to confirm, on or
before January 20, 1989 the following views:
A. That the Plan meets the requirements of Rule 16b-3 as
promulgated by the Securities and Exchange Commission; and
B. That participation of non-employee directors in the
Plan will not disqualify such directors from being characterized
as "disinterested persons" under Rule 16b-3(b) and (d)(3) for the
purpose of serving as administrators of the Company's 1985 Stock
Option Plan and 1986 Stock Option Plan, or of any subsequently
adopted employee stock plan in which the non-employee director is
not eligible to participate.
XIII. Amendment of the Plan
The Board of Directors may suspend or discontinue the Plan
or amend it in any respect whatsoever; provided, however, that
without approval of the stockholders no revision or amendment
shall change the number of shares subject to the Plan (except as
provided in Section XI), change the designation of the class of
directors eligible to receive options, or materially increase the
benefits accruing to participants under the Plan.
XIV. Notice
Any written notice to the Company required by any of the
provisions of this Plan shall be addressed to the Secretary of
the Company and shall become effective when it is received.
XV. Governing Law
This Plan and all determinations made and actions taken
pursuant hereto shall be governed by Law of the State of New York
and construed accordingly.
<PAGE.
TIFFANY & CO.
Stock Option Agreement
Under the 1988 Director Option Plan
Grant No. 000000
THIS AGREEMENT is made as of January __, 199_ (the "Grant
Date"), between TIFFANY & CO., a Delaware corporation (the
"Company"), and ______________, (the "Optionee").
RECITALS
Optionee, being a director of the Company and not an
employee of the Company or any subsidiary of the Company and
eligible to participate in the Tiffany & Co. 1988 Director Option
Plan (the "Plan") has elected to receive this stock option to
purchase shares of the common stock of the Company $.01 par value
("Common Stock") in lieu of all or fifty percent of certain fees
to be earned for serving as a Director of the Company in calendar
year 199_ (the "Plan Year").
AGREEMENT
In consideration of the foregoing and of the mutual
covenants set forth herein and other good and valuable
consideration, the parties hereto agree as follows:
1. SHARES GRANTED; OPTION PRICE. The Optionee may purchase
all or any part of an aggregate of _____ shares of Common Stock,
at the price of $_______ per share (the "Option Price") on the
terms and conditions set forth herein.
2. OPTION TERM; TIMES OF EXERCISE. The option term
shall end on ________, which in no case shall be greater than
fifteen (15) years from the date of grant of this option; at the
conclusion of such option term this option shall not be
exercisable in whole or in part.
(a) Subject to the foregoing option term, to Paragraph 14
below and as further limited by Paragraph 3 below, this
option shall become exercisable on or after the first
anniversary of the Grant Date.
(b) Prior to the first anniversary of the Grant Date this
option shall not be exercisable, except as permitted by
Paragraph 4 below.
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(c) No fractional shares of the Common Stock shall be
issued on exercise of this option, in whole or in part.
3. CESSATION OF DIRECTORSHIP. In the event Optionee
ceases for any reason to be a director of the Company prior to
such time as the option hereby granted becomes exercisable, such
option shall terminate in respect to the nearest whole number of
optioned shares as is the product of the total number of shares
subject to such option multiplied by a fraction, the numerator of
which is the number of months remaining in the Plan Year
following the month in which said optionee ceases to be a
director and the denominator of which is twelve (12).
4. EARLY EXERCISE. Notwithstanding Paragraph 2 (a)
above, this option shall become exercisable in full upon the
retirement of Optionee as a director of the Company because of
age or total and permanent disability, upon the death of Optionee
or upon the resignation or removal of Optionee as a director of
the Company following a Change in Control. A "Change in Control"
shall mean the acquisition of voting power in respect of thirty-
five percent (35%) of the shares of voting stock in the Company
by any person (or any corporation, partnership, trust, estate or
group of persons or entities, which group was formed pursuant to
any agreement, arrangement or understanding for the purpose of
acquiring, holding, voting or disposing of voting stock of the
Company).
5. EXERCISE; PAYMENT FOR AND DELIVERY OF STOCK. This
option may be exercised only by the Optionee or Optionee's
transferees by will or the laws of descent and distribution.
This option may be exercised by giving written notice of exercise
to the Company specifying the number of shares to be purchased
and the total Option Price, accompanied by payment in full by
cash, a cashier's or certified bank check to the order of the
Company or, unless otherwise prohibited, by delivery of shares of
Common Stock in payment of such price. Any such shares shall be
valued at the fair market value of such shares on the date of
exercise.
6. LEGALITY. No shares of Common Stock may be issued or
transferred unless and until all legal requirements applicable to
such issuance or transfer have, in the opinion of the Company,
been complied with. The Optionee shall, if requested by the
Company, give assurances satisfactory to the Company with respect
to such matters as the Company may deem desirable to assure
compliance with all applicable legal requirements, including,
without limitation, such assurances as the Company may deem
advisable to ensure the availability of an exemption from
registration under the Securities Act of 1933, as amended, for
the Common Stock purchased on exercise of this option.
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7. ADJUSTMENTS IN STOCK. Subject to the provisions of
the Plan, if the outstanding shares of the Common Stock are
increased or decreased, or are changed into or exchanged for a
different number or kind of shares or securities as a result of
one or more reorganizations, recapitalizations, stock splits,
stock dividends or other change in corporate structure or
capitalization affecting the Common Stock, appropriate adjustment
shall be made in the number and/or type of shares or securities
subject to this option and the Option Price, so that the total
purchase price of the shares then subject to this option shall
remain unchanged.
8. NONTRANSFERABILITY OF OPTION. This option is not
transferable otherwise than by will or the laws of descent and
distribution. This option shall not be otherwise transferred,
assigned, pledged, hypothecated or otherwise disposed of in any
way, whether by operation of law or otherwise, and shall not be
subject to execution, attachment or similar process. Upon any
attempt to transfer this option otherwise than by will or the
laws of descent and distribution or to assign, pledge,
hypothecate or otherwise dispose of this option, or upon the levy
of any execution, attachment or similar process upon this option,
this option shall immediately terminate and become null and void.
Optionee, by written notice to Company, may designate one or more
persons (and from time to time change such designation) including
his legal representative, who, by reason of his death, shall
acquire the right to exercise all or a portion of this option.
If the person or persons so designated wish to exercise any
portion of the option, they must do within the term of the option
as provided in Paragraph 2 above. Any exercise by a
representative shall be subject to the provisions of the Plan.
9. NOTICES. Any notice to be given to the Company shall
be personally delivered to or addressed to the Secretary of the
Company, at its principal office, and any notice to be given to
the Optionee shall be addressed to him at the address given
beneath his signature hereto, or at such other address as the
Optionee may hereafter designate in writing to the Company. Any
notice to the Company is deemed given when received by the
Company. Any notice to the Optionee is deemed given when
enclosed in a properly sealed envelope addressed as aforesaid,
registered or certified, and deposited, postage and registration
or certification fee prepaid, in a post office or branch post
office regularly maintained by the United States.
10. WITHHOLDING. The Company may make such provisions as
it may deem appropriate for the withholding of any taxes which
the Company determines it is required to withhold in order to be
entitled to a deduction for federal income taxes in connection
with this Agreement and the transactions contemplated hereby.
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11. STOCK OPTION PLAN. This option is subject to all of
the terms and conditions of the Plan as previously amended and as
the same shall be amended from time to time in accordance with
the terms thereof, but no such amendment shall adversely affect
the Optionee's rights under this option.
12. NO RIGHT TO CONTINUE AS DIRECTOR. Nothing in the Plan
or in this Agreement shall confer upon the Optionee any right to
continue as a director of the Company or a subsidiary.
13. NO STOCKHOLDERS' RIGHTS FOR OPTION. An optionee
shall not have rights as a stockholder with respect to the shares
covered by this Option until the date of the issuance to him of a
stock certificate therefor, and no adjustment will be made for
dividends or other rights for which the record date is prior to
the date such certificate is issued.
14. LAWS APPLICABLE TO CONSTRUCTION. This Agreement shall
be construed and enforced in accordance with the laws of the
State of New York.
TIFFANY & CO. OPTIONEE
By: ________________________ By: __________________________
William R. Chaney
Chairman
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