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TIFFANY & CO.
1986 STOCK OPTION PLAN
(AS AMENDED AND RESTATED)
1. Purpose of the Plan. Under this Stock Option Plan (the "Plan") of
Tiffany & Co., a Delaware corporation (the "Company"), options may be granted
to eligible employees to purchase shares of the Company's common stock, $.01
par value per share ("Common Stock"). The Plan is designed to enable the
Company to attract, retain and motivate such persons by providing for or
increasing their proprietary interest in the Company.
2. Stock Subject to Plan. The maximum number of shares that may be
subject to options granted hereunder shall be two million seven hundred nine
thousand (2,709,000) shares of Common Stock, subject to adjustments under
Section 7 below. Shares of Common Stock subject to the unexercised portions of
any options granted under this Plan which expire, terminate or are cancelled
may again be subject to options under the Plan.
3. Eligible Persons. The persons eligible to be considered for the grant
of options hereunder are key employees of the Company or its parent or
subsidiaries.
4. Payment. Payment for Common Stock purchased upon any exercise of an
option granted hereunder shall be made in full in cash concurrently with such
exercise, except that, if the Committee, as defined in Section 10 herein, shall
have authorized such payment and if the Company is not then prohibited from
purchasing or acquiring shares of stock, payment may be made in whole or in
part with shares of stock of the Company delivered in lieu of cash concurrently
with such exercise, the shares so delivered to be valued on the basis of their
fair market value on the date of exercise. If the Company is required to
withhold an amount on account of any federal or state income tax imposed as a
result of any exercise of an option, the optionee shall pay such amount to the
Company by check or in cash concurrently with the exercise of the option.
5. Exercise Price. The exercise price for each option granted hereunder
shall not be less than 100% of the fair market value of the Common Stock at the
date of the grant of such option.
6. Nontransferability. Any option granted under this Plan shall by its
terms be nontransferable by the optionee otherwise than by will or the laws of
descent and distribution, and shall be exercisable, during the optionee's
lifetime, only by the optionee.
7. Adjustments. If the outstanding shares of stock of the class then
subject to this Plan 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, reverse stock
splits, stock dividends and the like, appropriate adjustments shall be made in
the number and/or type of shares or securities for which options may thereafter
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be granted under this Plan and for which options then outstanding under this
Plan may thereafter be exercised. Any such adjustments in outstanding options
shall be made without changing the aggregate exercise price applicable to the
unexercised portions of such options.
8. Maximum Option Term. No option granted under this Plan may be
exercised in whole or in part more than eleven years after the date of grant.
9. Plan Duration. Options may not be granted under this Plan after
January 31, 2001.
10. Administration. The Plan shall be administered by a Committee (the
"Committee") of the Board of Directors of the Company (the "Board") which shall
consist of not less than two Directors of the Company each of whom shall be an
"outside director" for purposes of Section 162(m) of the Internal Revenue Code
of 1986, as amended, and regulations promulgated thereunder. The Board may
from time to time add to or remove members from the Committee, and shall have
the sole authority to fill vacancies on the Committee. Subject to the express
terms and conditions of the Plan and the terms of any option outstanding under
the Plan, the Committee shall have full power to construe the Plan and the
terms of any option granted under the Plan, to prescribe, amend and rescind
rules and regulations relating to the Plan or such options and to make all
other determinations necessary or advisable for the administration of the Plan,
including, without limitation, the power to determine which persons meet the
requirements of Section 3 hereof for selection as participants in the Plan, and
to which of the eligible persons, if any, options shall be granted under the
Plan and, subject to the provisions of this Plan, to establish the terms and
conditions required or permitted to be included in option agreements. Each
member of the Committee shall not, at the time he exercises discretion in
administering the Plan, be eligible or at any time within one year prior
thereto have been eligible for selection as a person to whom stock options may
be granted pursuant to the Plan or any other plan of the issuer or any of its
affiliates entitling the participants therein to acquire stock, stock options
or stock appreciation rights of the issuer or any of its Affiliates, provided,
however, that members of the Committee shall be entitled to elect participation
in the Company's 1988 Director Option Plan.
11. Amendment and Termination. The Board may at any time alter, amend,
suspend or terminate this Plan. However, unless taken with the approval of the
stockholders of the Company, no such action of the Board may:
(A) materially increase the benefits accruing to participants in the Plan;
(B) materially increase the number of securities which may be issued under
the Plan; or
(C) materially modify the requirements as to eligibility for participation
in the Plan.
In addition, no such action shall deprive any optionee, without his consent, of
any option granted to the optionee pursuant to the Plan or of any of his rights
under such option.
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12. Exercise in Installments. Subject to Section 13 below options granted
under the Plan shall become exercisable in four equal installments as follows:
on or after the first anniversary of the grant date twenty-five (25%) percent;
and twenty-five (25%) percent on or after the second, third and fourth
anniversary of the grant date, respectively.
13. Change of Control. On the occurrence of a Change in Control of the
Company, any time periods relating to the exercise of any stock option granted
under the Plan shall be accelerated so that such options (including any
unmatured installments thereof) may be immediately exercised in full. A
"Change in Control of the Company" shall be deemed to have occurred if: (A)
any person or group of persons acting in concert acquires thirty-five percent
(35%) in voting power or amount of the equity securities of the Company
(including the acquisition of any right, option, warrant or other right to
obtain such voting power or amount, whether or not presently exercisable)
unless such acquisition is authorized or approved of by the Board of Directors
of the Company; (B) individuals who constitute the Board of Directors of the
Company on January 21, 1988 (the "Incumbent Board") cease for any reason to
constitute at least a majority of such Board of Directors, provided that any
individual becoming a director subsequent to the date January 21, 1988 whose
election, or nomination for election by the Company's stockholders, was
approved by a vote of at least three-quarters of the directors comprising the
Incumbent Board (either by a specific vote or by approval of the proxy
statement of the Company in which such individual is named as a nominee for
director) shall be, for the purposes of this subsection (B), considered as
though such individual were a member of the Incumbent Board; or (C) any other
circumstance with respect to a change in control of the Company occurs which
the Committee deems to be a Change in Control of the Company. As used herein,
the word "person" shall mean an individual or an entity.
14. Termination of Employment for the Convenience of the Company. The
Committee, in the case of an employee's termination of employment for the
convenience of the Company, shall have the authority, exercisable in the
discretion of the Committee on a case by case basis, to (i) extend the date by
which option installments must be exercised following an employee's termination
of employment (the "Reference Date"), but in no event to a date later than the
earlier of the third anniversary of the date of such employee's termination of
employment (the "Third Anniversary Date") or the Expiration Date, (ii) extend
the Exercise Date, but in no event to a date later than the earlier of the
Third Anniversary Date or the Expiration Date, and/or (iii) accelerate the
vesting of option installments which have not become exercisable as of the
Reference Date, but in no event to a date earlier than six months following the
date of grant of the option; provided, however, that, in each such case, the
Committee shall have the authority to extend the Reference Date and/or the
Exercise Date to a date no later than the Expiration Date.
15. Maximum Option Grants to an Eligible Person. The maximum number of
shares of Common Stock subject to option grants made in any fiscal year of the
Company to any one eligible person hereunder shall be fifty thousand (50,000)
shares.
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