-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
Originator-Key-Asymmetric:
MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen
TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
OxaG8pTUEMvgF7b3rI0StnarMHlTaUGpladIH9kP7gJjKkChIzpqzsIZkYFwtHa6
JKzg2ac0uA9KWaxeE3db2A==
<SEC-DOCUMENT>0000950123-99-003146.txt : 19990409
<SEC-HEADER>0000950123-99-003146.hdr.sgml : 19990409
ACCESSION NUMBER: 0000950123-99-003146
CONFORMED SUBMISSION TYPE: 10-K405
PUBLIC DOCUMENT COUNT: 19
CONFORMED PERIOD OF REPORT: 19990131
FILED AS OF DATE: 19990408
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: TIFFANY & CO
CENTRAL INDEX KEY: 0000098246
STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-JEWELRY STORES [5944]
IRS NUMBER: 133228013
STATE OF INCORPORATION: DE
FISCAL YEAR END: 0131
FILING VALUES:
FORM TYPE: 10-K405
SEC ACT:
SEC FILE NUMBER: 001-09494
FILM NUMBER: 99589770
BUSINESS ADDRESS:
STREET 1: 727 FIFTH AVE
CITY: NEW YORK
STATE: NY
ZIP: 10022
BUSINESS PHONE: 2127558000
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K405
<SEQUENCE>1
<DESCRIPTION>TIFFANY & CO.
<TEXT>
<PAGE> 1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-K
------------------------
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED JANUARY 31, 1999 COMMISSION FILE NUMBER: 1-9494
TIFFANY & CO.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 13-3228013
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
727 FIFTH AVENUE, NEW YORK, NY 10022
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
</TABLE>
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (212) 755-8000
------------------------
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
<TABLE>
<CAPTION>
NAME OF EACH EXCHANGE ON
TITLE OF EACH CLASS WHICH REGISTERED
------------------- ------------------------
<S> <C>
COMMON STOCK, $.01 PAR VALUE NEW YORK STOCK EXCHANGE
STOCK PURCHASE RIGHTS NEW YORK STOCK EXCHANGE
</TABLE>
------------------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
------------------------
STATE THE AGGREGATE MARKET VALUE OF THE VOTING STOCK HELD BY NON-AFFILIATES
OF THE REGISTRANT. THE AGGREGATE MARKET VALUE SHALL BE COMPUTED BY REFERENCE TO
THE PRICE AT WHICH THE STOCK WAS SOLD, OR THE AVERAGE BID AND ASKED PRICES OF
SUCH STOCK, AS OF A SPECIFIED DATE WITHIN 60 DAYS PRIOR TO THE DATE OF FILING.
As of March 25, 1999 the aggregate market value of voting stock held by
non-affiliates was $2,408,691,914.70. See Item 5. Market for Registrant's Common
Equity and Related Stockholder Matters below.
------------------------
INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE REGISTRANT'S
CLASSES OF COMMON STOCK, AS OF THE LATEST PRACTICABLE DATE: 35,115,421 shares of
Common Stock outstanding as of March 25, 1999.
------------------------
The following documents are incorporated by reference into this Annual
Report on Form 10-K: Registrant's Annual Report to Stockholders for the Fiscal
Year Ended January 31, 1999 (Parts I, II and IV) and Registrant's Proxy
Statement Dated April 8, 1999 (Part III).
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
PART I
ITEM 1. BUSINESS
(a) General development of business.
Registrant (also referred to as the "Company") is the parent
corporation of Tiffany and Company ("Tiffany"). Charles Lewis Tiffany founded
the business in 1837. He incorporated Tiffany in New York in 1868. Registrant
acquired Tiffany in 1984 and completed the initial public offering of
Registrant's Common Stock in 1987.
(b) Financial information about industry segments.
Effective January 31, 1999, the Company adopted SFAS No. 131,
"Disclosures About Segments of an Enterprise and Related Information," which
establishes revised standards for the reporting of operating segments and the
related descriptive information, as well as new standards for related
disclosures about products, services and geographic areas. Incorporated by
reference from Registrant's Annual Report to Stockholders for the Fiscal year
ended January 31, 1999 (Footnote P. "Operating Segments") is the Registrant's
operating segment information for the Fiscal years ended January 31, 1999, 1998
and 1997. Executive Officers of the Company evaluate the performance of the
Company's assets on a consolidated basis. Therefore, separate financial
information for the Company's assets on a segment basis is not available.
(c) Narrative description of business.
As used below, the terms "Fiscal 1996", "Fiscal 1997" and "Fiscal 1998"
refer to the Fiscal years ended on January 31, 1997, 1998 and 1999,
respectively.
Registrant is a holding company, and conducts all business through its
subsidiary corporations.
Products
Registrant's principal product categories are fine jewelry, timepieces,
sterling silver goods, china, crystal, stationery, writing instruments,
fragrances, and personal accessories.
Registrant offers an extensive selection of TIFFANY & CO. brand jewelry
at a wide range of prices. In Fiscal 1996, 1997 and 1998, approximately 70%, 73%
and 74%, respectively, of Registrant's net sales were attributable to jewelry.
See Merchandise Purchasing, Manufacturing and Raw Materials below. Designs are
developed by employees, suppliers, independent designers and independent "name"
designers. See Designer Licenses below.
TIFFANY & CO. REPORT ON FORM 10-K FY 1998 - PAGE 2 -
<PAGE> 3
In addition to jewelry, the Company sells TIFFANY & CO. brand
merchandise in the following categories: timepieces and clocks; sterling silver
merchandise, including flatware, hollowware (tea and coffee services, bowls,
cups and trays), trophies, key holders, picture frames and desk accessories;
crystal, glassware, china and other tableware; custom engraved stationery;
writing instruments; and fashion accessories, including handbags, wallets,
scarves and men's ties. Fragrance products are sold under the trademarks
TIFFANY, TRUESTE and TIFFANY FOR MEN. Tiffany also sells other brands of
timepieces and tableware in its U.S. stores, and FARAONE brand jewelry in its
European stores. Registrant also offers a line of commercial glassware under the
JUDEL trademark.
Distribution and Marketing
Channels of Distribution
For financial reporting purposes, Registrant categorizes its sales as
follows:
U.S. Retail consists of retail sales transacted in stores in
the United States and wholesale sales to independent retailers
in the United States. Wholesale sales of fragrance products to
independent retailers in the Americas are also included (see
U.S. Retail below);
Direct Marketing consists of sales in the United States
through a staff of specialized sales personnel who concentrate
on business clients and sales through direct mail catalogs
(see Direct Marketing below); and
International Retail consists of both retail and wholesale
sales to customers located outside the United States (see
International Retail below).
U.S. Retail
Fifth Avenue Store
The Fifth Avenue store in New York accounts for a significant portion
of the Company's sales and is the focal point for marketing and public relations
efforts. Approximately 16%, 16% and 14% of total Company net sales for Fiscal
1996, 1997 and 1998, respectively, were attributable to the New York store's
retail sales. Approximately 32,450 gross square feet in the New York building
are devoted to retail selling.
- - PAGE 3 - TIFFANY & CO. REPORT ON FORM 10-K FY 1998
<PAGE> 4
U.S. Branch Stores
At January 31, 1999, Tiffany had 33 branch stores in the United States.
The following table identifies the location and year of opening of each U.S.
branch store:
U.S. BRANCH STORE OPENINGS
STORE LOCATION YEAR OPENED
- -------------- -----------
San Francisco, California 1963
Beverly Hills, California 1964
Houston, Texas 1964
Chicago, Illinois 1966
Atlanta, Georgia 1969
Dallas, Texas 1982
Boston, Massachusetts 1984
Costa Mesa, California 1988
Philadelphia, Pennsylvania 1990
Vienna, Virginia 1990
Palm Beach, Florida 1991
Honolulu, Hawaii (Ala Moana) 1992
San Diego, California 1992
Troy, Michigan 1992
Bal Harbour, Florida 1993
Maui, Hawaii 1994
Oak Brook, Illinois 1994
King of Prussia, Pennsylvania 1995
Short Hills, New Jersey 1995
White Plains, New York 1995
Bergen County, New Jersey 1996
Chevy Chase, Maryland 1996
Charlotte, North Carolina 1997
Chestnut Hill, Massachusetts 1997
Cincinnati, Ohio 1997
Honolulu, Hawaii (Hilton) 1997
Palo Alto, California 1997
Denver, Colorado 1998
Honolulu, Hawaii (Surfrider)* 1998
Las Vegas, Nevada 1998
Manhasset, New York 1998
Seattle, Washington 1998
Scottsdale, Arizona 1998
* Operated by Mitsukoshi (U.S.A.) Inc. from April 1989 until January 31, 1998.
Each of the U.S. branch stores displays a representative selection of
merchandise but none maintains the extensive selection carried by the New York
store. Management currently contemplates the opening of new branch stores in the
United States at the rate of approximately three to five per year. Tiffany has
entered into lease agreements to open additional branches in 1999 in Los
Angeles, California and Dallas, Texas. In Fiscal 1998, the San Diego store was
relocated to the Fashion Valley Shopping Center. See Item 2. Properties below
for further information concerning U.S. Retail store leases. United States
branch stores range in size from approximately 800 to 16,000 gross square feet
and total approximately 280,000 gross square feet devoted to retail purposes.
Historically, an average of approximately 45% of the floor space in each branch
store has been devoted to retail selling. Newer stores primarily range from
approximately 4,000 to 8,000 gross square feet and are designed to devote
approximately 60% of total floor space to retail selling.
TIFFANY & CO. REPORT ON FORM 10-K FY 1998 - PAGE 4 -
<PAGE> 5
U.S. Wholesale Distribution
Tiffany sells jewelry, timepieces, tableware and other products at
wholesale to approximately 260 United States independent retail locations
(exclusive of locations which sell TIFFANY fragrance products but not other
TIFFANY & CO. products). Selected merchandise is provided to these accounts at
wholesale prices that allow traditional retail jewelry mark-ups.
Direct Marketing
Corporate Division
Corporate Division sales executives call on business clients throughout
the United States, selling products drawn from the retail product line and items
specially developed or sourced for the business market, including trophies and
items designed for the particular customer. Price allowances are given to
business customers for volume purchases. Corporate Division customers purchase
for business gift giving, employee service and achievement recognition awards,
customer incentives and other purposes. Products and services are marketed
through a sales force of approximately 164 persons, through advertising in
newspapers and business periodicals and through the publication of special
catalogs.
Catalogs
Tiffany also distributes catalogs of selected merchandise to its
proprietary list of mail and telephone customers and to mailing lists rented
from third parties. Four seasonal SELECTIONS(R) catalogs are published,
supplemented by COLLECTIONS and other catalogs. The following table sets forth
certain data with respect to mail order operations for the periods indicated:
<TABLE>
<CAPTION>
Fiscal Year
1996 1997 1998
------- ------- -------
<S> <C> <C> <C>
Number of names on catalog mailing list at year-end
(consists of customers who purchased by mail or telephone
prior to the applicable date): 733,100 817,000 964,000
Total catalog mailings during fiscal year (in millions): 20.6 21.4 24.3
Total mail or telephone orders received during fiscal year: 288,133 285,992 337,760
</TABLE>
International Retail
Stores and boutiques included in the International Retail channel of
distribution are listed below. For locations operated by Registrant's subsidiary
corporations, Registrant records as sales the retail price charged to retail
customers. For locations operated by third-party distributors, Registrant
records as sales the wholesale price charged to the third-party distributors.
- - PAGE 5 - TIFFANY & CO. REPORT ON FORM 10-K FY 1998
<PAGE> 6
International Locations
LOCATIONS OPERATED BY REGISTRANT'S SUBSIDIARIES
JAPAN
* Operated by Registrant's Subsidiaries with Mitsukoshi, Ltd.
Chiba, Mitsukoshi Department Store *
Fukuoka, Mitsukoshi *
Fukuoka, Mitsukoshi Department Store *
Ginza, Mitsukoshi Department Store *
Hamamatsu, Matsubishi Department Store
Hirakata, Mitsukoshi Department Store *
Hiroshima, Mitsukoshi Department Store *
Ikebukuro, Mitsukoshi Department Store *
Kagoshima, Mitsukoshi Department Store *
Kanazawa, Mitsukoshi *
Kawasaki , Saikaya Department Store
Kobe, Hotel Okura Kobe *
Kobe, Mitsukoshi Department Store *
Kochi, Daimaru Department Store
Kokura, Izutsuya Department Store
Kumamoto, Tsuruya Department Store
Kurashiki, Mitsukoshi Department Store *
Kyoto, Daimaru Department Store
Kyoto, Takashimaya Department Store
Matsuyama, Mitsukoshi Department Store *
Nagano, Mitsukoshi *
Nagoya Hoshigaoka, Mitsukoshi Dept. Store *
Nagoya Sakae, Mitsukoshi Department Store *
Nagoya, Hilton Hotel *
Nihonbashi, Mitsukoshi Department Store *
Niigata, Mitsukoshi Department Store *
Oita, Tokiwa Department Store
Okinawa, Mitsukoshi Department Store *
Osaka, Mitsukoshi Department Store *
Osaka, Righa Royal Hotel *
Osaka, Takashimaya Department Store
Sagamihara, Isetan Department Store
Sapporo, Mitsukoshi Department Store *
Sendai, Mitsukoshi Department Store *
Shinjuku Minamikan, Mitsukoshi Dept. Store *
Shinjuku, Mitsukoshi Department Store *
Shinsaibashi, Daimaru Department Store
Takamatsu, Mitsukoshi Department Store *
Tokyo Bay, Hotel Tokyu *
Tokyo, Ginza Flagship Store *
Tottori, Daimaru Department Store
Umeda, Daimaru Department Store
Yokohama, Landmark Plaza, Mitsukoshi *
Yokohama, Mitsukoshi Department Store *
ASIA-PACIFIC EXCLUDING JAPAN
Australia: Melbourne, Crown Casino
Australia: Melbourne, Daimaru Department Store
Australia: Sydney, Chifley Plaza
Hong Kong: Landmark Center
Hong Kong: Mitsukoshi Department Store
Hong Kong: Pacific Place
Hong Kong: Peninsula Hotel
Hong Kong: Sogo Department Store
Korea: Seoul, Grand Hyatt Hotel
Korea: Seoul, Hyundai Department Store
Korea: Seoul, Lotte Downtown Department Store
Singapore: Ngee Ann City
Singapore: Raffles Hotel
Taiwan: Kaohsiung, Hanshin Department Store
Taiwan: Tainan, Mitsukoshi Department Store
Taiwan: Taipei, Regent Hotel
Taiwan: Taipei, Sogo Department Store
EUROPE
England: London, Old Bond Street
England: London, Harrod's Department Store
Germany: Frankfurt
Germany: Munich
Italy: Florence, FARAONE Store
Italy: Milan FARAONE Store
Switzerland: Zurich
CANADA AND MEXICO
Canada: Toronto
Mexico: Mexico City, El Palacio de Hierro
TIFFANY & CO. REPORT ON FORM 10-K FY 1998 - PAGE 6 -
<PAGE> 7
LOCATIONS OPERATED BY THIRD PARTIES
CANADA
Calgary, Holt-Renfrew Department Store
Montreal, Holt-Renfrew Department Store
Ottawa, Holt-Renfrew Department Store
Quebec, Holt-Renfrew Department Store
Vancouver, Holt-Renfrew Department Store
ASIA-PACIFIC
Australia: Gold Coast, DFS Store
Guam: Tumon Sands Plaza (until 3/99) +
Hong Kong: DFS Store
India: Bombay, Group Beautiful
Indonesia: Bali, DFS Store
Japan: Tokyo (FARAONE) +
Korea: Pusan, Lotte Pusan Duty Free Shop ++
Korea: Pusan, Paradise Duty Free Shop, Paradise Duty Free
Korea: Seoul, Hotel Lotte Duty Free Shop (hotel lobby) ++
Korea: Seoul, Hotel Lotte Duty Free Shop ++
Korea: Seoul, Lotte World Duty Free Shop ++
New Zealand: Auckland, DFS Store
Philippines: Manilla, Rustan's Department Store (Edsa Plaza)
Philippines: Manilla, Rustan's Makati Department Store (Makati)
Saipan: DFS Store
Singapore: DFS Store
Taiwan: Taipei +
+ Operated by Mitsukoshi, Ltd. Tiffany assumed operation of Guam location in
March 1999.
++ Operated by Lotte Duty Free.
The preceding tables do not include international "trade accounts,"
i.e. non-U.S. retailers to which the Company sells TIFFANY & CO. or FARAONE
brand merchandise on a wholesale basis, but which do not operate a dedicated
TIFFANY & CO. boutique within their respective stores. See International
Wholesale Distribution below.
- - PAGE 7 - TIFFANY & CO. REPORT ON FORM 10-K FY 1998
<PAGE> 8
Business with Mitsukoshi
The Company has and expects to maintain an important commercial
relationship with Mitsukoshi Ltd. of Japan ("Mitsukoshi").
From 1972 until July 1993, selected TIFFANY & CO. products, principally
jewelry and timepieces, were purchased from Tiffany by Mitsukoshi for
distribution in Japan in TIFFANY & CO. boutiques located, for the most part, in
Mitsukoshi's department stores.
On June 12, 1993, Registrant, through its affiliated companies, entered
into an agreement (the "93 Agreement") to realign its business relationship with
Mitsukoshi. Under the 93 Agreement, Registrant's wholly owned subsidiary,
Tiffany & Co. Japan Inc. ("Tiffany-Japan"), assumed merchandising and marketing
responsibilities in the operation of TIFFANY & CO. boutiques previously operated
by Mitsukoshi in its stores and other locations in Japan. The changeover in
responsibilities from the Distribution Agreement to the 93 Agreement occurred
during July 1993. Under the 93 Agreement, Mitsukoshi no longer purchases TIFFANY
& CO. merchandise for sale in Japan. Instead, Mitsukoshi acts for Tiffany-Japan
in the sale of merchandise owned by Tiffany-Japan and Registrant recognizes as
revenues the retail price charged to the ultimate consumer in Japan.
Tiffany-Japan holds inventories for sale, establishes retail prices, bears the
risk of currency fluctuations, provides one or more brand managers in each
boutique, controls merchandising and display within the boutiques, manages
inventory and controls and funds all advertising and publicity programs with
respect to TIFFANY & CO. merchandise. Mitsukoshi provides and maintains boutique
facilities, staffs the boutiques with retail employees and assumes credit and
certain other risks. Tiffany-Japan pays Mitsukoshi fees aggregating 27% of net
retail sales made in such boutiques. Tiffany-Japan also pays Mitsukoshi an
incentive fee of 5% of the amount by which boutique sales increase year-to-year,
calculated on a per-boutique basis. In Tokyo, TIFFANY & CO. boutiques may be
established only in Mitsukoshi's stores and TIFFANY & CO. brand jewelry may be
sold only in such boutiques, or in a "flagship store" (see below). The mutual
obligations described in this paragraph will expire on October 15, 2001.
In Fiscal 1996, 1997 and 1998, total Japan sales represented 27% of
Registrant's net sales. In Fiscal 1996, 1997 and 1998, respectively, sales made
in TIFFANY & CO. boutiques located in Mitsukoshi's stores constituted 18%, 17%
and 16% of Registrant's net sales and Mitsukoshi's wholesale purchases from
Tiffany constituted, respectively, 2%, 1% and less than 1% of Registrant's net
sales.
Under the 93 Agreement, Tiffany-Japan reserved the right to make
TIFFANY & CO. brand jewelry available for sale in Tokyo in a single "flagship
store", i.e., a TIFFANY & CO. store not located within a larger department
store; however, Tiffany-Japan was required to offer to Mitsukoshi the
opportunity to participate in the capitalization and ownership of a corporation
which would operate the flagship store. In lieu of forming such a corporation,
Mitsukoshi, Tiffany and Tiffany-Japan entered into an Agreement dated February
23, 1996 (the "FSS Agreement") governing the operation of a 7,700 square foot
TIFFANY & CO. store in premises (the "Premises") located in Tokyo's Ginza
shopping district (the "Flagship Store"). The FSS Agreement will expire on
September 30, 2001. The Premises are leased by a third party to Tiffany-Japan
for a fixed
TIFFANY & CO. REPORT ON FORM 10-K FY 1998 - PAGE 8 -
<PAGE> 9
annual rental and subleased by Tiffany-Japan to Mitsukoshi on a
percentage-of-sales basis (the "Sublease"). Tiffany-Japan completed, at its
cost, all necessary improvements to prepare the Premises and delivered the
Premises to Mitsukoshi in May 1996. Under the FSS Agreement, Tiffany-Japan bears
all costs of operating the Premises. Tiffany-Japan selects and furnishes its own
merchandise for display in the Flagship Store, prices the merchandise for retail
sale, bears all risk of loss until the merchandise is sold to a customer and
determines all issues of display, packaging, signage and advertising. Mitsukoshi
acts for Tiffany-Japan in the sale of the merchandise, collects and holds the
sales proceeds, makes credit available to customers, bears all credit losses and
provides its point-of-sale transaction processing system (the "POS System").
Tiffany-Japan provides all necessary staff other than ten employees provided by
Mitsukoshi. After compensating Tiffany-Japan on a percentage-of-sales basis for
Sublease rent and staffing, Mitsukoshi retains 8.3% of net sales for most sales
transactions in the Flagship Store. Management of the Flagship Store, other than
with respect to the POS System, is the responsibility of Tiffany-Japan.
Under separate agreements, Mitsukoshi operates a FARAONE boutique in
its Nihombashi store in Tokyo and a TIFFANY & CO. boutique in its department
store in Taipei. On February 2, 1998, Tiffany purchased, as a going concern, the
TIFFANY & CO. business operated on the island of Oahu, Hawaii, by an affiliate
of Mitsukoshi under agreement with Tiffany. The transaction was structured as a
purchase of assets. Tiffany paid a cash price of $8.1 million and agreed to make
contingent payments equal to 3.75% of certain sales made by Tiffany on the
island of Oahu after the date of the purchase and through January 31, 2003. On
March 19, 1999, Tiffany purchased, as a going concern, the TIFFANY & CO.
business operated in Guam by an affiliate of Mitsukoshi under agreement with
Tiffany. The transaction was structured as a cash-for-stock purchase of the
affiliate, under which Tiffany assumed all of the assets and liabilities of the
affiliate. Tiffany paid a total cash price of $6.9 million.
From 1989 through January 1999, Mitsukoshi Limited of Japan and its
affiliated companies held 4,270,000 shares of the Registrant's Common Stock,
which represented 12.3% of Registrant's outstanding shares as of January 31,
1999. Mitsukoshi sold all of its holdings of Registrant's Common Stock through a
public offering in February 1999.
Mr. Yoshiaki Sakakura, formerly Chairman and Chief Executive Officer of
Mitsukoshi, was appointed a director of the Registrant on November 15, 1989. Mr.
Sakakura plans to retire from the Board effective with the Company's Annual
Meeting on May 20, 1999.
- - PAGE 9 - TIFFANY & CO. REPORT ON FORM 10-K FY 1998
<PAGE> 10
International Wholesale Distribution
Wholesale distribution of selected TIFFANY & CO. merchandise is also
made through independent distributors in the countries listed below. Multiple
doors are indicated in parentheses.
INTERNATIONAL WHOLESALE DISTRIBUTION
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
EUROPE ASIA-PACIFIC AND MIDDLE EAST
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Austria (2) * Luxembourg Bahrain (2) Lebanon (3)
Belgium Malta Egypt Oman
Czech Republic Monaco India * Qatar (2)
England (3) Russia (4) Israel (2) Saudi Arabia (5) *
Germany (31) * Spain (24) Japan (7) * Syria
Greece/Cyprus (11) Switzerland (21) * Jordan United Arab Emirates (3)*
Italy (50) * Turkey Kuwait *
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
CARIBBEAN CENTRAL/LATIN AMERICA
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Aruba Jamaica (3) Argentina (4) Mexico (4)
Bahamas (2) Puerto Rico (4) Brazil (2) Panama (2)
Bermuda St. Barthelemy Costa Rica Paraguay (2)
Dominican Republic St. Maarten Honduras (2) Uruguay
Grand Cayman (3) St. Thomas (3)
- -------------------------------------------------------------------------------------------
</TABLE>
* FARAONE merchandise also available in some locations.
Management anticipates continued expansion of international wholesale
distribution as markets are developed.
Expansion of Worldwide Retail Operations
Registrant expects to continue to open stores in locations outside the
United States. However, the timing and success of this program will depend upon
many factors, including Registrant's ability to obtain suitable retail space on
satisfactory economic terms and the extent of consumer demand for TIFFANY & CO.
products in overseas markets. Such demand varies from market to market.
The Company's commercial relationship with Mitsukoshi and Mitsukoshi's
ability to continue as a leading department store operator have been and will
continue to be substantial factors in the Company's continued success in Japan.
TIFFANY & CO. boutiques are located in 30 Mitsukoshi department stores and other
retail locations operated by Mitsukoshi in Japan. The Company also operates 13
boutiques primarily in department stores other than Mitsukoshi, in locations
within Japan but outside of Tokyo, and plans to open more.
TIFFANY & CO. REPORT ON FORM 10-K FY 1998 - PAGE 10 -
<PAGE> 11
In recent years, the Japanese department store industry has, in
general, suffered declining sales. There is a risk that such financial
difficulties will force consolidations or store closings. Should one or more
Japanese department store operators, such as Mitsukoshi, elect or be required to
close one or more stores now housing a TIFFANY & CO. boutique, the Company's
sales and earnings would be reduced while alternate premises are being secured.
Mitsukoshi has informed the Company that in 1999 it will close the
annex to one of its stores in Tokyo which currently houses a TIFFANY & CO.
boutique. The Company's operations in the annex to be closed will be
consolidated with those of the existing boutique in the adjoining store
building.
Tiffany began its ongoing program of international expansion through
proprietary retail stores in 1986 with the establishment of the London store.
Company-operated international TIFFANY & CO. stores and boutiques range in size
from approximately 400 to 14,000 gross square feet and total approximately
159,000 gross square feet devoted to retail purposes. The following chart
details the growth in the Company's stores and boutiques since Fiscal 1987 on a
worldwide basis:
Worldwide Retail Locations
<TABLE>
<CAPTION>
Registrant's Subsidiary Companies Independent
Americas and Europe Asia-Pacific, Middle East, Americas
------------------- -----------------------------------
End of Canada,
Fiscal: U.S. Mexico Europe Japan Elsewhere Mitsukoshi Others Total
- ------- ---- ------ ------ ----- --------- ---------- ------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1987 8 0 2 0 0 21 0 31
1988 9 0 3 0 1 21 0 34
1989 9 0 5 0 2 24 0 40
1990 12 0 5 0 3 27 0 47
1991 13 1 7 0 4 38 2 65
1992 16 1 7 7 4 36 4 75
1993 16 1 6 37 5 8 7 80
1994 18 1 6 37 7 8 8 85
1995 21 1 6 38 9 7 16 98
1996 23 1 6 39 12 4 19 104
1997 28 2 7 42 17 4 23 123
1998 34 2 7 44 17 3 19 126
</TABLE>
- - PAGE 11 - TIFFANY & CO. REPORT ON FORM 10-K FY 1998
<PAGE> 12
Advertising and Promotion
Tiffany regularly advertises its business, primarily in newspapers and
magazines. Prior to 1996, television advertising was used only on a limited
basis, and only in Japan. Beginning in 1996, prime-time television advertising
was tested in the New York market. Since that test, television advertising has
been used on a limited basis, including nationally, during the holiday selling
season. Cooperative advertising funds are received from certain merchandise
vendors and the Company also provides its domestic and international third-party
distributors with cooperative advertising funds. In Fiscal 1996, 1997 and 1998,
Tiffany spent approximately $43.9 million, $51.8 million and $52.5 million,
respectively, on worldwide advertising, net of amounts contributed by vendors to
Tiffany, but inclusive of cooperative advertising funds contributed by Tiffany
to third party distributors and amounts expended to print and mail catalogs and
brochures.
Public Relations (promotional) activity is also a significant aspect of
Registrant's business. Management believes that Tiffany's image is enhanced by a
program of charity sponsorships, grants and merchandise donations. The Company
also engages in an aggressive program of retail promotions and media activities
to maintain consumer awareness of the Company and its products. Each year,
Tiffany publishes its well-known Blue Book which showcases fine jewelry and
other merchandise. Tiffany's New York window displays are another important
aspect of Tiffany's promotional efforts. In its New York store, Tiffany displays
table settings created by leading interior decorators and by prominent hosts and
hostesses. John Loring, Tiffany's Design Director, is the author of several
books featuring TIFFANY & CO. products. Registrant considers these and other
promotional efforts important in maintaining Tiffany's image as an arbiter of
taste and style.
Trademarks
The designations TIFFANY(R) and TIFFANY & CO.(R) are the principal
trademarks of Tiffany, as well as serving as tradenames. Tiffany has obtained
and is the proprietor of trademark registrations for TIFFANY and TIFFANY & CO.
as well as the TIFFANY BLUE BOX and has applied for trademark registration of
the color TIFFANY BLUE for a variety of product categories in the United States
and in other countries. Over the years, Tiffany has maintained a program to
protect its trademarks and has instituted legal action where necessary to
prevent others either from registering or using marks which are considered to
create a likelihood of confusion with the Company or its products. Tiffany has
been generally successful in such actions and management considers that its
United States trademark rights in TIFFANY and TIFFANY & CO. are strong. However,
use of the designation TIFFANY by third parties (often small companies) on
unrelated goods or services, frequently transient in nature, may not come to the
attention of Tiffany or may not rise to a level of concern warranting legal
action. Despite the general fame of the TIFFANY and TIFFANY & CO. name and mark
for the Company's products and services, Tiffany is not the sole person entitled
to use the name TIFFANY in every category in every country of the world; third
parties have registered the name TIFFANY in the United States in the food
services category, and in a number of foreign countries in respect of certain
product categories (including, in a few countries, the categories of fragrance,
cosmetics, jewelry, eyeglass frames, clothing and tobacco products) under
circumstances where Tiffany's rights were not sufficiently clear under local
law, and/or where management concluded that Tiffany's foreseeable business
interests did not warrant the expense of litigation.
TIFFANY & CO. REPORT ON FORM 10-K FY 1998 - PAGE 12 -
<PAGE> 13
Designer Licenses
Tiffany has been the sole licensee for jewelry designed by Elsa
Peretti, Paloma Picasso and the late Jean Schlumberger since 1974, 1980 and
1956, respectively. In 1992, Tiffany acquired trademark and other rights
necessary to sell the designs of the late Mr. Schlumberger under the
TIFFANY-SCHLUMBERGER trademark. Ms. Peretti and Ms. Picasso retain ownership of
copyrights for their designs and of their trademarks and exercise approval
rights with respect to important aspects of the promotion, display, manufacture
and merchandising of their designs and Tiffany is required by contract to devote
a portion of its advertising budget to the promotion of their respective
products; each is paid a royalty by Tiffany for jewelry and other items designed
by them and sold under their respective names. Written agreements exist between
Ms. Peretti and Tiffany and between Ms. Picasso and Tiffany but may be
terminated by either party following six months notice to the other party.
Tiffany is the sole retail source for merchandise designed by Ms. Peretti
worldwide; however, she has reserved by contract the right to appoint other
distributors in markets outside the United States, Canada, Japan, Singapore,
Australia, Italy, the United Kingdom, Switzerland and Germany.
The designs of Ms. Peretti accounted for 14%, 14% and 15% of the
Company's net sales in Fiscal 1996, 1997 and 1998, respectively. Merchandise
designed by Ms. Picasso accounted for 4%, 4% and 3% of the Company's net sales
in Fiscal 1996, 1997 and 1998, respectively.
Registrant's operating results could be adversely affected were it to
cease to be a licensee of either of these designers or should its degree of
exclusivity in respect of their designs be diminished.
Merchandise Purchasing, Manufacturing and Raw Materials
Merchandise offered for sale by the Company is supplied from Tiffany's
workshops in New York City and Pelham, New York; Parsippany, New Jersey; Salem,
West Virginia; Paris, France; and Milan, Italy and through purchases and
consignments from others. The following table shows Tiffany's sources of
merchandise, based on cost, for the periods indicated:
<TABLE>
<CAPTION>
Fiscal Years
1996 1997 1998
---- ---- ----
<S> <C> <C> <C>
Produced by Tiffany 38% 31% 31%
Purchased from others 62 69 69
---- ---- ----
Total 100% 100% 100%
==== ==== ====
</TABLE>
The preceding figures include the cost of precious gems incorporated in such
merchandise. Included in the foregoing table is merchandise manufactured in
Fiscal 1996 for Tiffany by Howard H. Sweet & Son, Inc., a former affiliate of
the Registrant located in Attleboro, Massachusetts ("Sweet"). At the close of
Fiscal 1996, the manufacturing assets and business of Sweet were sold to a third
party. However, such third party has contracted, subject to certain conditions,
to continue
- - PAGE 13 - TIFFANY & CO. REPORT ON FORM 10-K FY 1998
<PAGE> 14
to provide the merchandise needed by Tiffany for a period of five years.
Approximately 37% of the merchandise purchased from others in Fiscal 1998 was
manufactured outside the United States.
Gems and precious metals used in making Tiffany's jewelry may be
purchased from a variety of sources. For the most part, purchases of such
materials are from suppliers with which Tiffany enjoys long-standing
relationships. Tiffany believes that there are numerous alternative sources for
gems and precious metals and that the loss of any single supplier would not have
a material adverse effect on its operations. However, Tiffany purchases cut
diamonds principally from three key vendors. Were trade relations between
Tiffany and one or more of these vendors to be disrupted, the Company's sales
would be adversely affected in the short term until alternative supply
arrangements could be established.
Diamond jewelry accounted for approximately 21% of Tiffany's net sales
in Fiscal 1996, 1997 and 1998, respectively.
The supply and price of rough (uncut and unpolished) diamonds in the
principal world markets have been and continue to be significantly influenced by
a single entity, the Central Selling Organization (the "CSO"), of De Beers
Centenary AG, a Swiss corporation. The CSO supplies approximately 70% of the
world market for rough, gem-quality diamonds, notwithstanding that its
historical ability to control supplies has been somewhat diminished due to
changing politics in diamond-producing countries and revised contractual
arrangements with independent mine operators. Through its affiliates, the CSO
continues to exert a significant influence on the demand for polished diamonds
through its advertising and marketing efforts throughout the world.
Tiffany does not purchase rough diamonds; in consequence, Tiffany does
not purchase directly from the CSO. Some, but not all, of Tiffany's suppliers do
purchase directly from the CSO. The availability and price of diamonds to the
CSO and Tiffany's suppliers may be, to some extent, dependent on the political
situation in diamond-producing countries, the opening of new mines and the
continuance of the prevailing supply and marketing arrangements for rough
diamonds. Sustained interruption in the supply of rough diamonds, an
over-abundance of supply or a substantial change in the marketing arrangements
described above could adversely affect Tiffany and the retail jewelry industry
as a whole. The CSO has announced that it will, at some time in the future,
offer to brand cut and polished diamonds with a proprietary trademark. This
service will be offered to its direct purchasers. Such a change, coupled with a
change in the marketing and advertising policies of the CSO's affiliates, could
affect consumer demand for diamonds that do not bear the CSO's trademark.
Tiffany may or may not carry such branded diamonds in the future.
Finished jewelry is purchased from approximately 150 manufacturers,
most of which have long-standing relationships with Tiffany. Tiffany believes
that there are alternative sources for most jewelry items; however, due to the
craftsmanship involved in certain designs, Tiffany would have difficulty in
finding readily available alternatives in the short term.
TIFFANY & CO. brand clocks and components for timepieces are
manufactured and assembled by third parties. Approximately 41% of net watch
sales during Fiscal 1998 were
TIFFANY & CO. REPORT ON FORM 10-K FY 1998 - PAGE 14 -
<PAGE> 15
attributable to a single manufacturer. Tiffany contracts with a single
manufacturer to produce its silver flatware patterns from Tiffany's proprietary
tools and dies by use of Tiffany's traditional manufacturing techniques.
Likewise, engraved stationery is purchased from a single manufacturer. Loss of
any of these manufacturers could result in the unavailability of timepieces,
silver flatware or engraved stationery, as the case may be, during the period
necessary for Tiffany to arrange for new production.
Competition
Registrant encounters significant competition in all of its product
lines from other third-party providers, some of which specialize in just one
area in which the Company is active. Many of the Company's competitors have
established reputations for style and expertise similar to that of the Company
and compete on the basis of value. Other jewelers and retailers compete
primarily through advertised price promotion. The Company competes on the basis
of quality and value and does not engage in price promotional advertising.
The international marketplace for the Company's products is highly
competitive. Although the Company believes that the name TIFFANY & CO. is known
internationally, and although Tiffany did operate retail stores in London and
Paris prior to World War II, the Company did not have a retail presence in
Europe in the post-war era until 1986. Accordingly, consumer awareness of
Tiffany & Co. and its products is not as strong in Europe as in the U.S. or in
Japan, where Tiffany has distributed its products for many years. The Company
expects that its overseas stores will continue to experience intense competition
from established retailers in international cities where TIFFANY & CO. stores
are or may eventually be located.
Registrant also faces increasing competition in the area of direct
marketing. A growing number of direct sellers compete for access to the same
mailing lists of known purchasers of luxury goods. In marketing service awards
and business gifts to corporations and other organizations, the Company faces
numerous competitors who sell a wide variety of products at a greater price
range than the Company, which has chosen to offer a more limited selection in
order to adhere to its established quality standards.
Employees
As of January 31, 1999, the Registrant's subsidiary corporations
employed an aggregate of approximately 4,845 full-time and part-time persons. Of
those employees, 4,084 are employed in the United States. Of Tiffany's total
employees, approximately 1,835 persons are salaried employees, 412 are engaged
in manufacturing and 2,215 are retail store personnel. None of the Company's
employees is represented by a union. Registrant believes that relations with its
employees are good.
- - PAGE 15 - TIFFANY & CO. REPORT ON FORM 10-K FY 1998
<PAGE> 16
ITEM 2. PROPERTIES
All of Tiffany's principal operating facilities are leased, although
Registrant does own a small glass manufacturing facility in Salem, West
Virginia.
New York Store
Tiffany leases the land and building at 727 Fifth Avenue in New York
City for use as its main retail store and executive offices. The building was
constructed for Tiffany in 1940. Approximately 32,450 gross square feet of this
124,000 square foot building are devoted to retail selling purposes, with the
balance devoted to executive and administrative offices, certain product
services, jewelry manufacturing and storage. The building at 727 Fifth Avenue
was designed to be a retail store for Tiffany and Tiffany believes it is well
configured and located for this function.
The initial lease term for the New York store building expired on
October 31, 1994 and has been renewed for additional five year terms expiring on
October 31, 1999, and 2004, respectively. It may, subject to the terms of the
lease, be renewed for three more successive terms of five years each. Basic rent
for the building is $7.1 million per annum. That rate will remain effective
until October 31, 1999. Effective November 1, 1999 and when Tiffany exercises
additional renewal terms, the basic rent will be increased by the greater of (i)
a proportional increase in accordance with a consumer price index or (ii) the
fair rental value of the property as determined by an appraisal proceeding.
Although Tiffany is not privy to specific lease rates for comparable store
leases in New York's Fifth Avenue shopping district near 57th Street, it has
been reported that lease rates within the district are generally rising due to
demand by other retailers. Accordingly, rent for the building may increase in
1999 by an amount in excess of the proportional increase in such consumer price
index. Tiffany must also pay all costs of operating the building, including real
property taxes, in addition to the basic rent.
Customer Service Center
In 1995, Tiffany entered into a lease of undeveloped property in
Parsippany, New Jersey, in order to construct and occupy a new distribution
facility. In April 1997, construction of the "Customer Service Center" ("CSC")
on that property was completed and Tiffany commenced operations there. The CSC
is a combined warehouse, distribution, light manufacturing, computing and office
center. It comprises approximately 269,000 square feet, of which approximately
96,000 square feet are devoted to office and computer operations use, with the
balance devoted to warehousing, shipping, receiving, light manufacturing,
merchandise processing and other distribution functions.
The basic lease term for the CSC will expire on January 31, 2000.
Subject to the conditions stated in the lease, Tiffany may thereafter extend the
term of the lease for nine separate one year periods. The rental rate will be
approximately $13.33 per square foot throughout the 12-year maximum term of the
lease and Tiffany must also pay all expenses of operating and maintaining the
CSC, including property taxes. Subject to certain conditions stated in the lease
governing the end of the lease term and Tiffany's obligation to pay specified
costs and expenses, Tiffany has the
TIFFANY & CO. REPORT ON FORM 10-K FY 1998 - PAGE 16 -
<PAGE> 17
right to purchase the CSC in each of years 1997 through 2009 for a scheduled
purchase price that ranges from $37.5 to $27.8 million. Alternatively, if the
CSC is sold to a third party for less than such scheduled purchase price,
Tiffany would become liable for an end-of-term rental adjustment up to the
amount of such deficiency (subject to a conditional maximum deficiency), and
would, if the CSC is neither purchased by Tiffany nor sold to a third party,
become liable for an end-of-term rental adjustment that would range from $37.5
to $24.6 million in years 1997 through 2009 depending on Tiffany's compliance
with certain lease conditions. Registrant has guaranteed Tiffany's obligations
under the CSC lease and provided certain financial covenants to the landlord's
lenders in support of such guaranty consistent with financial covenants provided
to Registrant's bank lenders.
Registrant believes that the CSC has been properly designed to handle
worldwide distribution functions and that it is suitable for that purpose.
- - PAGE 17 - TIFFANY & CO. REPORT ON FORM 10-K FY 1998
<PAGE> 18
Branch and Subsidiary Retail Store Leases
Set forth below is the expiration date for each of Tiffany's existing
branch and subsidiary retail store leases (and, where applicable, optional
renewal terms):
U.S. BRANCH STORE LEASES
<TABLE>
<CAPTION>
CITY STATE/TERR. LOCATION EXPIRATION DATE RENEWAL OPTIONS
- ---- ----------- -------- --------------- ---------------
<S> <C> <C> <C> <C>
Atlanta GA Phipps Plaza Shopping Center July 31, 2000 Two five-year terms
Bal Harbour FL Bal Harbour Shops May 31, 2003
Bergen County NJ Riverside Square Mall September 30, 2006
Beverly Hills CA Two Rodeo Drive October 7, 2005 Two five-year terms
Boston MA Copley Place July 31, 2009 Two five-year terms
Charlotte NC SouthPark Mall December 31, 2007 One five-year term
Chestnut Hill MA The Atrium January 31, 2008 One five-year term
Chevy Chase MD 5500 Wisconsin Avenue January 31, 2006
Chicago IL 730 North Michigan Avenue October 1, 2012 Two five-year terms
Cincinnati OH Fountain Place November 30, 2012 Two five-year terms
Costa Mesa CA South Coast Plaza January 31, 2004 One five-year term
Dallas TX The Galleria October 31, 2007
Denver CO Cherry Creek Shopping Center August 30, 2008 One five-year term
Honolulu HI Ala Moana Center January 31, 2000
Honolulu HI Hilton Hawaiian Village December 31, 2002 One five-year term
Honolulu HI Moana Surfrider January 31, 2001
Houston TX Galleria Post Oak September 30, 2001 One five-year term
Las Vegas NV Bellagio August 31, 2008 One ten-year term
King of Prussia PA King of Prussia Plaza November 30, 2005 One five-year term
Manhasset NY Americana Shopping Center August 14, 2008
Maui HI Whalers Village July 31, 1999
Oak Brook IL Oakbrook Center April 30, 2009 Two five-year terms
Palm Beach FL 259 Worth Avenue May 31, 2007 Two five-year terms
Palo Alto CA Stanford Shopping Center May 31, 2007
Philadelphia PA The Bellevue November 16, 2005 One five-year term
San Diego CA Fashion Valley Shopping Center December 31, 2007 One five-year term
San Francisco CA Union Square October 29, 2006 One ten-year term
Scottsdale AZ Fashion Square December 31, 2008 One five-year term
Seattle WA Pacific Place October 1, 2008 Two five-year terms
Short Hills NJ The Mall at Short Hills August 31, 2005 One five-year term
Troy MI The Somerset Collection September 30, 2007
Tumon Guam Tumon Sands Plaza September 30, 2001 One five-year term
Vienna VA Fairfax Square March 31, 2000 Two five-year terms
White Plains NY The Westchester April 30, 2005 One five-year term
</TABLE>
TIFFANY & CO. REPORT ON FORM 10-K FY 1998 - PAGE 18 -
<PAGE> 19
INTERNATIONAL BRANCH STORE LEASES
<TABLE>
<CAPTION>
COUNTRY CITY LOCATION EXPIRATION DATE RENEWAL OPTIONS
- ------- ---- -------- --------------- ---------------
<S> <C> <C> <C> <C>
Australia Sydney Chifley Tower October 18, 1999 Two five-year terms
Australia Melbourne Crown Casino May 7, 2000 Two three-year terms
Canada Toronto 85 Bloor Street October 15, 2006 One seven-year term
England London 25 Old Bond Street March 27, 2016
Germany Frankfurt 20 Goethestrasse January 31, 2001 One 10-year term
Germany Munich Residenzstrasse 11 January 31, 2004 One five-year term
Hong Kong The Landmark October 31, 2000
Hong Kong Kowloon The Peninsula February 28, 1999
Hong Kong Pacific Place October 31, 2000
Italy Florence Via Tornabuoni December 31, 2001 One six-year term+
Italy Milan Via Montenapoleone June 30, 1999
Japan Tokyo Ginza October 24, 2002 One three-year term
Korea Seoul Grand Hyatt Hotel April 30, 2000 One two-year term
Mexico Mexico City El Palacio de Hierro January 31, 2000
Singapore Raffles Hotel September 15, 2000
Singapore Ngee Ann City September 14, 1999 One one-year term
Switzerland Zurich Bahnhofstrasse 14 September 30, 2000
Taiwan Taipei Regent Hotel October 3, 2000 One five-year term
</TABLE>
+ Renewal subject to conditions imposed by Italian law, including right of
landlord to occupy premises for its own use.
New Store Leases
In addition to the U.S. leases described above, Tiffany has entered
into the following new leases for domestic stores expected to open in 1999: a
10-year lease for a 3,900 square foot store at Century City Shopping Center, Los
Angeles, California and a 10-year lease for a 7,100 square foot store at
NorthPark Center, Dallas, Texas. The Company's affiliate has entered into a
lease for a 7,200 square foot store in Paris, France, which it anticipates
opening in November 1999.
- - PAGE 19 - TIFFANY & CO. REPORT ON FORM 10-K FY 1998
<PAGE> 20
ITEM 3. LEGAL AND ENVIRONMENTAL PROCEEDINGS
On March 24, 1999, Dallas Galleria Limited, Tiffany's landlord at the
existing Dallas Galleria branch store, commenced a lawsuit against Tiffany in
the United States District Court for the Southern District of Texas, Houston
Division. The lawsuit seeks to enforce a lease provision which, if enforceable,
would prohibit Tiffany from operating a similar or competing store within a
six-mile radius of the Galleria; the lawsuit claims that Tiffany's planned store
at Northpark Center in Dallas would violate this provision. The lawsuit seeks a
declaration that the radius provision is valid and enforceable, a court order
restraining Tiffany from operating a store in the Northpark Center, damages and
attorneys fees.
Registrant and Tiffany are from time to time involved in routine
litigation incidental to the conduct of Tiffany's business, including
proceedings to protect its trademark rights, litigation instituted by persons
alleged to have been injured upon premises within Registrant's control and
litigation with present and former employees. Although litigation with present
and former employees is routine and incidental to the conduct of Tiffany's
business as well as for any business employing significant numbers of U.S.-based
employees, such litigation can result in large monetary awards when a civil jury
is allowed to determine compensatory and/or punitive damages for actions
claiming discrimination on the basis of age, gender, race, religion, disability
or other legally protected characteristic or for termination of employment that
is wrongful or in violation of implied contracts. However, Registrant believes
that no litigation currently pending to which it or Tiffany is a party or to
which its properties are subject will have a material adverse effect on its
financial position, results of operations or cash flows.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the
fourth quarter of the Fiscal year ended January 31, 1999.
TIFFANY & CO. REPORT ON FORM 10-K FY 1998 - PAGE 20 -
<PAGE> 21
EXECUTIVE OFFICERS OF THE REGISTRANT
The executive officers of Registrant are:
<TABLE>
<CAPTION>
NAME AGE POSITION YEAR JOINED TIFFANY
- ---- --- -------- -------------------
<S> <C> <C> <C>
William R. Chaney 66 Chairman of the Board of Directors 1980
Michael J. Kowalski 47 President and Chief Executive Officer 1983
James E. Quinn 47 Vice Chairman 1986
James N. Fernandez 43 Executive Vice President 1983
and Chief Financial Officer
Beth O. Canavan 44 Senior Vice President - U.S. Retail Sales 1987
Patrick B. Dorsey 48 Senior Vice President - General Counsel and 1985
Secretary
Linda A. Hanson 38 Senior Vice President - Merchandising 1990
Fernanda M. Kellogg 52 Senior Vice President - Public Relations 1984
Caroline D. Naggiar 41 Senior Vice President - Marketing 1997
John S. Petterson 40 Senior Vice President - Corporate Sales 1988
</TABLE>
William R. Chaney. Mr. Chaney, Chairman of Tiffany since August 1984, joined
Tiffany in January 1980 as a member of its Board. From August 1984 through
January 31, 1999, he also served as Chief Executive Officer of Registrant. Prior
to 1984 he served as an executive officer of Avon Products Inc. Mr. Chaney also
serves on the board of directors of the Bank of New York and the Atlantic Mutual
Companies.
Michael J. Kowalski. Mr. Kowalski was appointed President on January 18, 1996,
Chief Operating Officer on January 16, 1997, and Chief Executive Officer on
February 1, 1999, succeeding William R. Chaney. He has served on Registrant's
Board of Directors since January 1995. He previously served as Executive Vice
President from March 19, 1992, with overall responsibility in the following
areas: merchandising, marketing, advertising, public relations and product
design. He has held a variety of merchandising management positions since
joining Tiffany in 1983 as Director of Financial Planning.
- - PAGE 21 - TIFFANY & CO. REPORT ON FORM 10-K FY 1998
<PAGE> 22
James E. Quinn. Mr. Quinn joined the Company in July 1986 as Vice President of
branch sales for the Company's corporate sales operations and has since had
various responsibilities for sales management and operations. He was promoted to
Executive Vice President on March 19, 1992 and assumed responsibility for retail
and corporate sales for the Americas in 1994. In January 1995 he became a member
of Registrant's Board of Directors. In January 1998, he was appointed Vice
Chairman. He has responsibility for worldwide sales. Mr. Quinn is a member of
the Board of Directors of the BNY Hamilton Funds, Inc. and Mutual of America
Capital Management.
James N. Fernandez. Mr. Fernandez joined Tiffany in October 1983 and has held
various positions in financial planning and management prior to his appointment
as Senior Vice President-Chief Financial Officer in April 1989. In January 1998,
he was promoted to Executive Vice President-Chief Financial Officer, at which
time his responsibilities were expanded to include distribution in addition to
his responsibilities for the accounting, treasury, investor relations,
information technology, financial planning and internal audit functions.
Beth O. Canavan. Ms. Canavan joined the Company in May 1987 as Director of New
Store Development. She assumed her current responsibilities for retail sales
throughout the United States in May 1997.
Patrick B. Dorsey. Mr. Dorsey joined the Company in July 1985 as General Counsel
and Secretary.
Linda A. Hanson Ms. Hanson joined Tiffany in April 1990 as a management
associate. She assumed her current responsibilities in July 1997.
Fernanda M. Kellogg. Ms. Kellogg joined Tiffany in October 1984 as Director of
Retail Marketing. She assumed her current responsibilities in January 1990.
Caroline D. Naggiar. Ms. Naggiar joined Tiffany in June 1997 as Vice President -
Marketing Communications. She assumed her current responsibilities in February
1998. Prior to joining Tiffany, she served as Vice President-Management
Representative of McCann-Erickson Advertising from January 1993, where she was
responsible for the Tiffany account.
John S. Petterson. Mr. Petterson joined Tiffany in 1988 as a management
associate. He assumed his current responsibilities in May 1995.
TIFFANY & CO. REPORT ON FORM 10-K FY 1998 - PAGE 22 -
<PAGE> 23
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Registrant's Common Stock is traded on the New York Stock Exchange. In
consolidated trading the high and low selling prices per share for shares of
such Common Stock for Fiscal 1997 were:
<TABLE>
<CAPTION>
Fiscal 1997 High Low
- ----------- ---- ---
<S> <C> <C>
First Fiscal Quarter $42.63 $34.25
Second Fiscal Quarter $48.63 $38.50
Third Fiscal Quarter $48.63 $36.81
Fourth Fiscal Quarter $41.50 $33.75
</TABLE>
In consolidated trading, the high and low selling prices per share for
shares of such Common Stock for Fiscal 1998 were:
<TABLE>
<CAPTION>
Fiscal 1998 High Low
- ----------- ---- ---
<S> <C> <C>
First Fiscal Quarter $52.00 $39.75
Second Fiscal Quarter $48.88 $40.19
Third Fiscal Quarter $45.50 $27.00
Fourth Fiscal Quarter $65.00 $33.50
</TABLE>
On March 25, 1999, the high and low selling prices quoted on such
exchange were $72.00 and $67.50 respectively. On March 25, 1999 there were 2,704
record holders of Registrant's Common Stock.
It is Registrant's policy to pay a quarterly dividend of $0.09 per share
of Common Stock, subject to declaration of such dividend by Registrant's Board
of Directors. In Fiscal 1997, a dividend of $0.05 per share was paid on April
10, 1997. On May 15, 1997, Registrant's Board of Directors declared an increase
in the regular quarterly dividend from $0.05 to $0.07 per share of Common Stock.
Thereafter, dividends of $0.07 per share were paid on July 10, 1997, October 10,
1997 and January 12, 1998. In Fiscal 1998, a dividend of $0.07 per share of
Common Stock was paid on April 10, 1998. On May 21, 1998, Registrant's Board of
Directors declared an increase in the regular quarterly dividend from $0.07 to
$0.09 per share of Common Stock. Thereafter, dividends of $0.09 per share of
Common Stock were paid on July 10, 1998, October 12, 1998, and January 11, 1999.
In calculating the aggregate market value of the voting stock held by
non-affiliates of the Registrant shown on the cover page of this Report on Form
10-K, 582,204 shares of Registrant's Common Stock beneficially owned by the
executive officers and directors of the Registrant (exclusive of shares which
may be acquired on exercise of employee stock options) were excluded, on the
assumption that certain of those persons could be considered "affiliates" under
the provisions of Rule 405 promulgated under the Securities Act of 1933.
- - PAGE 23 - TIFFANY & CO. REPORT ON FORM 10-K FY 1998
<PAGE> 24
ITEM 6. SELECTED FINANCIAL DATA
Incorporated by reference from Registrant's Annual Report to Stockholders for
the Fiscal year ended January 31, 1999, pages 14-15.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Incorporated by reference from Registrant's Annual Report to Stockholders for
the Fiscal year ended January 31, 1999, pages 16-22.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Incorporated by reference from Registrant's Annual Report to Stockholders for
the Fiscal year ended January 31, 1999, pages 23-42.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
NONE.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Incorporated by reference from Registrant's Proxy Statement dated April 8, 1999,
pages 7-8.
ITEM 11. EXECUTIVE COMPENSATION
Incorporated by reference from Registrant's Proxy Statement dated April 8, 1999,
pages 9-20.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Incorporated by reference from Registrant's Proxy Statement dated April 8, 1999,
pages 5-7.
TIFFANY & CO. REPORT ON FORM 10-K FY 1998 - PAGE 24 -
<PAGE> 25
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Incorporated by reference from Registrant's Proxy Statement dated April 8, 1999,
page 20.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K
(a) List of Documents Filed As Part of This Report:
1. Financial Statements:
Data incorporated by reference from
the 1998 Annual Report to Stockholders
of Tiffany & Co. and Subsidiaries:
Report of Independent Accountants
(following this Form 10-K)
Consolidated statements of earnings
for the years ended January 31, 1999, 1998 and 1997
Consolidated balance sheets
as of January 31, 1999 and 1998
Consolidated statements of stockholders' equity
for the years ended January 31, 1999, 1998 and 1997
Consolidated statements of cash flows
for the years ended January 31, 1999, 1998 and 1997
Notes to consolidated financial statements
2. Financial Statement Schedules:
The following financial statement schedule should be read in
conjunction with the consolidated financial statements incorporated by reference
herein:
II. Valuation and qualifying accounts and reserves.
All other schedules have been omitted since they are either not applicable or
not required, or because the information required is included in the
consolidated financial statements and notes thereto.
- - PAGE 25 - TIFFANY & CO. REPORT ON FORM 10-K FY 1998
<PAGE> 26
3. Exhibits:
The following exhibits have been filed with the Securities and Exchange
Commission but are not attached to copies of this Form 10-K other than complete
copies filed with said Commission and the New York Stock Exchange:
Exhibit Description
3.1 Restated Certificate of Incorporation of Registrant. Incorporated by
reference from Exhibit 3.1 to Registrant's Report on Form 8-K dated
May 16, 1996.
3.2 By-Laws of Registrant (as last amended January 21, 1999).
4.1 Amended and Restated Rights Agreement Dated as of September 22, 1998
by and between Registrant and ChaseMellon Shareholder Services
L.L.C., as Rights Agent. Incorporated by reference from Exhibit 4.1
to Registrant's Report on Form 8-A/A dated September 24, 1998.
10.5 Designer Agreement between Tiffany and Paloma Picasso dated April 4,
1985. Incorporated by reference from Exhibit 10.5 filed with
Registrant's Registration Statement on Form S-1, Registration No.
33-12818 (the "Registration Statement").
10.16 Lease dated October 15, 1984 between Avon Export Corporation and
Tiffany for 727 Fifth Avenue, New York, N.Y. Incorporated by
reference from Exhibit 10.16 to the Registration Statement.
10.101 Form of Note Purchase Agreement, including the form of 7.52% Senior
Notes due 2003 issued thereunder at par by Registrant on January 31,
1993 for an aggregate principal amount of $51,500,000. Incorporated
by reference from Exhibit 10.101 filed with Registrant's Report on
Form 10-K for the Fiscal year ended January 31, 1993 and dated April
12, 1993.
10.111 Agreement made June 12, 1993 by and between Tiffany-Japan (Delaware)
Inc., Tiffany and Mitsukoshi Limited as amended. Incorporated by
reference from Exhibit 10.111 filed with Registrant's Report on Form
8-K filed June 12, 1993 and Exhibit 10.111a filed with Registrant's
Report on Form 10-Q dated August 28, 1998.
10.116 Credit Agreement dated as of June 26, 1995 by and among Registrant,
Tiffany, Tiffany & Co. International, The Bank of New York, as
Issuing Bank and as Swing Line Lender, The Bank of New York, as
Arranging Agent and The Bank of New York as Administrative Agent,
restated through Amendment No. 5 dated as of November 20, 1997.
Incorporated by reference from Exhibit 10.116 filed with
Registrant's Report on Form 10-Q for the Fiscal quarter ended
October 31, 1997 and dated December 10, 1997.
TIFFANY & CO. REPORT ON FORM 10-K FY 1998 - PAGE 26 -
<PAGE> 27
Exhibit Description
10.116a Amendments Nos. 6-8 to Credit Agreement referred to in Exhibit
10.116 above, dated, respectively October 6, 1998, November 30, 1998
and March 8, 1999.
10.119 Amended and Restated Lease Agreement dated as of December 1, 1995,
effective as of August 1, 1995, by and between First Fidelity Bank,
National Association, not in its individual capacity, but solely as
the trustee under that certain Trust Agreement 1995-1 dated as of
July 1, 1995, as amended, as Owner-Lessor and Tiffany, as Lessee;
Amended and Restated Construction Agency Agreement dated as of
December 1, 1995, effective as of December 11, 1995, by and between
Tiffany, as Agent, and First Fidelity Bank, National Association, a
national banking association, not in its individual capacity but
solely as trustee pursuant to a Trust Agreement 1995-1 dated as of
July 1, 1995, as amended, as Owner; Agreement and Consent to
Assignment dated as of December 1, 1995 among Registrant, Tiffany
and Fleet National Bank of Connecticut, as Collateral Trustee; and
Definition Appendix to the foregoing documents listed in this
Exhibit 10.119. Incorporated by reference from Exhibit 10.119 filed
with Registrant's Report on Form 10-K for the Fiscal year ended
January 31, 1996 and dated April 8, 1996.
10.119a Amendment No. 1 to the Agreement and Consent to Assignment dated as
of December 1, 1995 among Registrant, Tiffany and Fleet National
Bank of Connecticut, as Collateral Trustee referenced in Exhibit
10.119 above, dated November 3, 1998.
10.120 Watch Supplier Agreement as of October 30, 1995 by and among Tiffany
and Tiffany & Co. Watch Center S.A. and TWF SA. Incorporated by
reference from Exhibit 10.120 filed with Registrant's Report on Form
10-K for the Fiscal year ended January 31, 1996 and dated April 8,
1996.
10.121 Agreement as of February 23, 1996 among Mitsukoshi Limited,
Tiffany-Japan Inc. and Tiffany. Incorporated by reference from
Exhibit 10.121 filed with Registrant's Report on Form 10-K for the
Fiscal year ended January 31, 1996 and dated April 8, 1996.
10.122 Agreement dated as of April 3, 1996 among American Family Life
Assurance Company of Columbus, Japan Branch, Tiffany & Co. Japan,
Inc., Japan Branch, and Registrant, as Guarantor, for yen
5,000,000,000 Loan Due 2011. Incorporated by reference from Exhibit
10.122 filed with Registrant's Report on Form 10-Q for the Fiscal
quarter ended April 30, 1996 and dated June 13, 1996.
10.122a Amendment No. 1 to the Agreement referred to in Exhibit 10.122
above, dated November 18, 1998.
10.123 Agreement made effective as of February 1, 1997 by and between
Tiffany and Elsa Peretti. Incorporated by reference from Exhibit
10.123 to Registrant's Report on Form 10-K for the Fiscal year ended
January 31, 1997 and dated April 8, 1997.
- - PAGE 27 - TIFFANY & CO. REPORT ON FORM 10-K FY 1998
<PAGE> 28
Exhibit Description
10.126 Form of Note Purchase Agreement between Registrant and various
institutional note purchasers with Schedules B, 5.14 and 5.15 and
Exhibits 1A, 1B, and 4.7 thereto, dated as of December 30, 1998 in
respect of Registrant's $60 million principal amount 6.90% Series A
Senior Notes due December 30, 2008 and $40 million principal amount
7.05% Series B Senior Notes due December 30, 2010.
13.1 Annual Report to Stockholders for Fiscal Year Ended January 31, 1999
(pages 14-42 of such Annual Report have been filed in electronic
format).
21.1 Subsidiaries of Registrant.
23.1 Consent of PricewaterhouseCoopers LLP, independent accountants.
27 Financial Data Schedule (Exhibit 27 is submitted as an exhibit only
in the electronic format of this Annual Report on Form 10-K
submitted to the Securities and Exchange Commission).
Executive Compensation Plans and Arrangements
Exhibit Description
4.3 Registrant's 1998 Employee Incentive Plan and standard terms of
stock option award (transferable and non-transferable). Incorporated
by reference from Exhibit 4.3 to Registrant's Registration Statement
on Form S-8, file number 333-67723, filed November 23, 1998.
4.3a Standard terms of stock option award (transferable and
non-transferable) under Registrant's 1998 Employee Incentive Plan,
as revised January 21, 1999.
4.4 Registrant's 1998 Directors Option Plan. Incorporated by reference
from Exhibit 4.3 to Registrant's Registration Statement on Form S-8,
file number 333-67725, filed November 23, 1998.
4.4a Standard terms of stock option award (transferable non-qualified
option) under Registrant's 1998 Directors Option Plan, as revised
January 21, 1999.
10.3 Registrant's 1986 Stock Option Plan and terms of stock option
agreement, as last amended on July 16, 1998.
10.25 Amended and Restated Deferred Compensation Agreement originally made
effective December 31, 1989 by and between William R. Chaney and
Tiffany and Company, and subsequently amended February 8, 1999.
10.49 Form of Indemnity Agreement, approved by the Board of Directors on
March 19, 1987. Incorporated by reference from Exhibit 10.49 to the
Registration Statement.
TIFFANY & CO. REPORT ON FORM 10-K FY 1998 - PAGE 28 -
<PAGE> 29
Exhibit Description
10.60 Registrant's 1988 Director Stock Option Plan and form of Stock
Option agreement, as last amended on November 21, 1996. Incorporated
by reference from Exhibit 10.60 to Registrant's Report on Form 10-K
for the Fiscal year ended January 31, 1997 and dated April 8, 1997.
10.105 Group Long Term Disability Insurance Policy issued by The Mutual
Benefit Life Insurance Company. Policy Number: G53,152. Incorporated
by reference from Exhibit 10.105 filed with Registrant's Report on
Form 10-K for the Fiscal year ended January 31, 1993 and dated April
12, 1993.
10.106 Amended and Restated Tiffany and Company Executive Deferral Plan
originally made effective October 1, 1989, as amended effective
October 1, 1998.
10.108 Registrant's Amended and Restated Retirement Plan for Non-Employee
Directors originally made effective January 1, 1989, as amended
through January 21, 1999.
10.109 Summary of informal incentive cash bonus plan for managerial
employees. Incorporated by reference from Exhibit 10.109 filed with
Registrant's Report on Form 10-K for the Fiscal year ended January
31, 1993 and dated April 12, 1993.
10.113 Tiffany and Company Pension Plan, as last amended effective December
21, 1998.
10.114 1994 Tiffany and Company Supplemental Retirement Income Plan.
Incorporated by reference from Exhibit 10.114 filed with
Registrant's Report on Form 10-K for the Fiscal year ended January
31, 1994 and dated April 7, 1994.
10.115 1994 Form of Split Dollar Life Insurance Agreement entered into by
Tiffany and Company and certain Executive Officers including form of
Assignment of Life Insurance Policy as Collateral and Rider No. 1 to
1994 Form of Split Dollar Life Insurance Agreement entered into by
Tiffany and Company and certain Executive Officers. Incorporated by
reference from Exhibit 10.115 filed with Registrant's Report on Form
10-K for the fiscal year ended January 31, 1995 and dated April 7,
1995.
10.115a Riders Nos. 2 and 3, dated October 18, 1998 and March 20, 1999,
respectively to Split Dollar Life Insurance Agreements between and
among William R. Chaney and Tiffany and Company, and respectively,
the 1994 Chaney Family Trust u/a 2/23/94 and the Babette C. Chaney
et al. Trust u/a 2/23/94.
10.127 Retention Agreements dated March 30, 1999 between and among
Registrant and Tiffany and, respectively, each of the following
executive officers: Michael J. Kowalski, James E. Quinn, James N.
Fernandez and Patrick B. Dorsey and Appendices I to III to each of
those Agreements.
REGISTRANT WILL FURNISH COPIES OF ANY OF THE FOREGOING EXHIBITS TO ANY
REGISTERED HOLDER OF THE REGISTRANT'S COMMON STOCK UPON PAYMENT OF A FEE OF $.15
PER PAGE FURNISHED, WHICH FEE REPRESENTS REGISTRANT'S EXPENSES IN FURNISHING
SUCH EXHIBIT.
- - PAGE 29 - TIFFANY & CO. REPORT ON FORM 10-K FY 1998
<PAGE> 30
(b) Reports on Form 8-K.
On March 4, 1999, Registrant filed a Report on Form 8-K reporting that
it had issued a press release announcing its sales and earnings for the
three-month period and Fiscal year ended January 31, 1999.
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
TIFFANY & CO.
(Registrant)
Date: April 8, 1999 By: /s/ Michael J. Kowalski
--------------------------------
Michael J. Kowalski
President and Chief Executive Officer
TIFFANY & CO. REPORT ON FORM 10-K FY 1998 - PAGE 30 -
<PAGE> 31
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the date indicated.
By: /s/ William R. Chaney By: /s/ Michael J. Kowalski
----------------------------- -----------------------------
William R. Chaney Michael J. Kowalski
Chairman of the Board President and Chief Executive Officer
(director) (principal executive officer) (director)
By: /s/ James N. Fernandez By: /s/ Warren S. Feld
----------------------------- -----------------------------
James N. Fernandez Warren S. Feld
Executive Vice President Vice President
(principal financial officer) (principal accounting officer)
By: /s/ Rose Marie Bravo By: /s/ James E. Quinn
----------------------------- -----------------------------
Rose Marie Bravo James E. Quinn
Director Vice Chairman
(director)
By: /s/ Samuel L. Hayes, III By: /s/ Yoshiaki Sakakura
----------------------------- -----------------------------
Samuel L. Hayes, III Yoshiaki Sakakura
Director Director
By: /s/ Charles K. Marquis By: /s/ William A. Shutzer
----------------------------- -----------------------------
Charles K. Marquis William A. Shutzer
Director Director
By: /s/ Geraldine Stutz
-----------------------------
Geraldine Stutz
Director
April 8, 1999
- - PAGE 31 - TIFFANY & CO. REPORT ON FORM 10-K FY 1998
<PAGE> 32
PRICEWATERHOUSECOOPERS LLP
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and
Board of Directors of Tiffany & Co.
Our report on the consolidated financial statements of Tiffany & Co. and
Subsidiaries has been incorporated by reference in this Form 10-K from the 1998
Annual Report to Stockholders of Tiffany & Co. and Subsidiaries. In connection
with our audits of such consolidated financial statements, we have also audited
the related financial statement schedule listed in Item 14(a)(2) of this Form
10-K.
In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic consolidated financial statements taken as a
whole, presents fairly, in all material respects, the information required to be
included therein.
/s/ PricewaterhouseCoopers LLP
New York, New York
March 2, 1999
TIFFANY & CO. REPORT ON FORM 10-K FY 1998 - PAGE 32 -
<PAGE> 33
TIFFANY & CO. AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
- ---------------------------------------------------------------------------------------------------------------------
Additions
--------------------------------
Balance at Charged to
beginning costs and Charged to Balance at end
Description of period expenses other accounts Deductions of period
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Year Ended
January 31, 1999:
Reserves deducted from
assets:
Accounts receivable
allowances principally
doubtful accounts $ 6,988,475 $ 2,579,284 $ -- $1,461,347 (a) $ 8,106,412
Allowance for inventory
liquidation and
obsolescence 16,112,265 5,727,108 -- 6,184,479 (b) 15,654,894
Allowance for inventory
shrinkage 1,726,535 4,156,366 -- 4,094,159 (c) 1,788,742
LIFO reserve 15,870,000 -- -- -- 15,870,000
</TABLE>
- ----------
(a) Uncollectible accounts written off.
(b) Liquidation of inventory previously written down to market.
(c) Physical inventory losses.
<PAGE> 34
TIFFANY & CO. AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
- ---------------------------------------------------------------------------------------------------------------------
Additions
--------------------------------
Balance at Charged to
beginning costs and Charged to Balance at end
Description of period expenses other accounts Deductions of period
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Year Ended
January 31, 1998:
Reserves deducted from
assets:
Accounts receivable
allowances principally
doubtful accounts $ 6,864,385 $ 2,104,590 $ -- $1,980,500 (a) $ 6,988,475
Allowance for inventory
liquidation and
obsolescence 13,790,944 5,885,724 -- 3,564,403 (b) 16,112,265
Allowance for inventory
shrinkage 1,743,169 2,217,964 -- 2,234,598 (c) 1,726,535
LIFO reserve 14,870,000 1,000,000 -- -- 15,870,000
</TABLE>
- ----------
(a) Uncollectible accounts written off.
(b) Liquidation of inventory previously written down to market.
(c) Physical inventory losses.
<PAGE> 35
TIFFANY & CO. AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
- ---------------------------------------------------------------------------------------------------------------------
Additions
--------------------------------
Balance at Charged to
beginning costs and Charged to Balance at end
Description of period expenses other accounts Deductions of period
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Year Ended
January 31, 1997:
Reserves deducted from
assets:
Accounts receivable
allowances principally
doubtful accounts $ 5,698,217 $ 3,128,653 $ -- $1,962,485 (a) $ 6,864,385
Allowance for inventory
liquidation and
obsolescence 10,947,815 5,219,817 -- 2,376,688 (b) 13,790,944
Allowance for inventory
shrinkage 1,674,536 2,799,295 -- 2,730,662 (c) 1,743,169
LIFO reserve 11,870,000 3,000,000 -- -- 14,870,000
</TABLE>
- ----------
(a) Uncollectible accounts written off.
(b) Liquidation of inventory previously written down to market.
(c) Physical inventory losses.
<PAGE> 36
EXHIBIT INDEX
SEE PAGES 26 THROUGH 29 FOR A COMPLETE LIST OF EXHIBITS FILED, INCLUDING
EXHIBITS INCORPORATED BY REFERENCE FROM PREVIOUSLY FILED DOCUMENTS.
EXHIBIT DESCRIPTION
3.2 By-Laws of Registrant (as last amended January 21, 1999).
4.3a Standard terms of stock option award (transferable and
non-transferable) under Registrant's 1998 Employee Incentive Plan,
as revised January 21, 1999.
4.4a Standard terms of stock option award (transferable non-qualified
option) under Registrant's 1998 Directors Option Plan , as revised
January 21, 1999.
10.3 Registrant's 1986 Stock Option Plan and terms of stock option
agreement, as last amended on July 16, 1998.
10.25 Amended and Restated Deferred Compensation Agreement originally made
effective December 31, 1989 by and between William R. Chaney and
Tiffany and Company, and subsequently amended February 8, 1999.
10.106 Amended and Restated Tiffany and Company Executive Deferral Plan
originally made effective October 1, 1989, as amended effective
October 1, 1998.
10.108 Registrant's Amended and Restated Retirement Plan for Non-Employee
Directors originally made effective January 1, 1989, as amended
through January 21, 1999.
10.113 Tiffany and Company Pension Plan, as last amended effective December
21, 1998.
10.115a Riders Nos. 2 and 3, dated October 18, 1998 and March 20, 1999,
respectively to Split Dollar Life Insurance Agreements between and
among William R. Chaney and Tiffany and Company, and respectively,
the 1994 Chaney Family Trust u/a 2/23/94 and the Babette C. Chaney
et al. Trust u/a 2/23/94.
10.116a Amendments Nos. 6-8 to Credit Agreement referred to in Exhibit
10.116 above, dated, respectively October 6, 1998, November 30, 1998
and March 8, 1999.
10.119a Amendment No. 1 to the Agreement and Consent to Assignment dated as
of December 1, 1995 among Registrant, Tiffany and Fleet National
Bank of Connecticut, as Collateral Trustee referenced in Exhibit
10.119 above, dated November 3, 1998.
- - PAGE 33 - TIFFANY & CO. REPORT ON FORM 10-K FY 1998
<PAGE> 37
EXHIBIT DESCRIPTION
10.122a Amendment No. 1 to the Agreement referred to in Exhibit 10.122
above, dated November 18, 1998.
10.126 Form of Note Purchase Agreement between Registrant and various
institutional note purchasers with Schedules B, 5.14 and 5.15 and
Exhibits 1A, 1B, and 4.7 thereto, dated as of December 30, 1998 in
respect of Registrant's $60 million principal amount 6.90% Series A
Senior Notes due December 30, 2008 and $40 million principal amount
7.05% Series B Senior Notes due December 30, 2010.
10.127 Retention Agreements dated March 30, 1999 between and among
Registrant and Tiffany and, respectively, each of the following
executive officers: Michael J. Kowalski, James E. Quinn, James N.
Fernandez and Patrick B. Dorsey and Appendices I to III to each of
those Agreements.
13.1 Annual Report to Stockholders for Fiscal Year Ended January 31, 1999
(pages 14-42 of such Annual Report have been filed in electronic
format).
21.1 Subsidiaries of Registrant.
23.1 Consent of PricewaterhouseCoopers LLP, independent accountants.
27 Financial Data Schedule (Exhibit 27 is submitted as an exhibit only
in the electronic format of this Annual Report on Form 10-K
submitted to the Securities and Exchange Commission).
NOTE: ALL OTHER EXHIBITS HAVE BEEN INCORPORATED BY REFERENCE FROM EXHIBITS TO
DOCUMENTS PREVIOUSLY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. REFER TO
THE LIST OF EXHIBITS ON PAGES 26 THROUGH 29 FOR REGISTRATION, FILE AND EXHIBIT
NUMBERS.
TIFFANY & CO. REPORT ON FORM 10-K FY 1998 - PAGE 34 -
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.2
<SEQUENCE>2
<DESCRIPTION>BY-LAWS OF THE REGISTRANT
<TEXT>
<PAGE> 1
Exhibit 3.2
Tiffany & Co.
Report on Form 10-K
Fiscal Year 1998
RESTATED BY-LAWS
AS LAST AMENDED JANUARY 21, 1999
-of-
TIFFANY & CO., a Delaware Corporation
(herein called the "Corporation")
-oo0oo-
ARTICLE I
Stockholders
SECTION 1.01. Annual Meeting. The Board of Directors by resolution shall
designate the time, place and date of the annual meeting of the stockholders for
the election of directors and the transaction of such other business as may come
before it.
SECTION 1.02. Notice of Meetings of Stockholders. Whenever stockholders are
required or permitted to take any action at a meeting, written notice of the
meeting shall be given (unless that notice shall be waived) which shall state
the place, date and hour of the meeting and, in the case of a special meeting,
the purpose or purposes for which the meeting is called. The written notice of
any meeting shall be given, personally or by mail, not less than ten nor more
than sixty days before the date of the meeting to each stockholder entitled to
vote at such meeting. If mailed, such notice is given when deposited in the
United States mail, postage prepaid, directed to the stockholder at his address
as it appears on the records of the Corporation.
When a meeting is adjourned to another time or place, notice need not be
given of the adjourned meeting if the time and place thereof are announced at
the meeting at which the adjournment is taken. At the adjourned meeting, the
Corporation may transact any business which might have been transacted at the
original meeting. If the adjournment is for more than thirty days, or if after
the adjournment a new record date is fixed for the adjourned meeting, a notice
of the adjourned meeting shall be given to each stockholder of record entitled
to vote at the meeting.
SECTION 1.03. Quorum. At all meetings of the stockholders, the holders of a
majority of the stock issued and outstanding and entitled to vote thereat,
present in person or by proxy, shall constitute a quorum for the transaction of
any business.
When a quorum is once present to organize a meeting, it is not broken by
the subsequent withdrawal of any stockholders.
<PAGE> 2
The stockholders present may adjourn the meeting despite the absence of a
quorum and at any such adjourned meeting at which the requisite amount of voting
stock shall be represented, the Corporation may transact any business which
might have been transacted at the original meeting had a quorum been there
present.
SECTION 1.04. Method of Voting. The vote upon any question before the meeting
need not be by ballot. All elections and all other questions shall be decided by
a plurality of the votes cast, at a meeting at which a quorum is present, except
as expressly provided otherwise by the General Corporation Law of the State of
Delaware or the Certificate of Incorporation.
SECTION 1.05. Voting Rights of Stockholders and Proxies. Each stockholder of
record entitled to vote in accordance with the laws of the State of Delaware,
the Certificate of Incorporation or these By-laws, shall at every meeting of the
stockholders be entitled to one vote in person or by proxy for each share of
stock entitled to vote standing in his name on the books of the Corporation, but
no proxy shall be voted on after three years from its date, unless the proxy
provides for a longer period.
SECTION 1.06. Ownership of its Own Stock. Shares of its own capital stock
belonging to the Corporation or to another corporation, if a majority of the
shares entitled to vote in the election of directors of such other corporation
is held, directly or indirectly, by the Corporation, shall neither be entitled
to vote nor be counted for quorum purposes. Nothing in this section shall be
construed as limiting the right of any corporation to vote stock, including but
not limited to its own stock, held by it in a fiduciary capacity.
SECTION 1.07. Conduct of Meetings. Each meeting of the stockholders shall be
presided over by the Chairman of the Board of Directors or such other person as
the Board of Directors may designate as chairman of such meeting. The Secretary
of the Corporation, or in his absence, an Assistant Secretary, shall act as
secretary of every meeting, but if neither the Secretary nor an Assistant
Secretary is present, the chairman of the meeting shall appoint a secretary of
the meeting. In the conduct of a meeting of the stockholders, all of the powers
and authority vested in a presiding officer by law or practice shall be vested
in the chairman of the meeting.
SECTION 1.08. Notice of Business and Nominations.
A. Nominations of persons for election to the Board of Directors and the
proposal of business to be transacted by the stockholders at an annual meeting
of stockholders may be made (1) by or at the direction of the Board of Directors
(or any duly authorized committee thereof) pursuant to a notice of meeting or by
otherwise properly bringing the matter before an annual meeting of stockholders
or (2) by any stockholder of record of the Corporation who was a stockholder of
record at the time of the giving of the notice provided for in the following
paragraph, who is entitled to vote at the meeting and who has complied with the
notice procedures set forth in this Section 1.08.
B. For nominations or other business to be properly brought before an
annual meeting by a stockholder pursuant to clause (2) of the foregoing
paragraph A., the stockholder must comply with the following provisions (1)
through (4) of this paragraph B.
Restated By-Laws: Tiffany & Co. (DE) 01/21/99 Page 2
<PAGE> 3
(1) The stockholder must have given timely notice thereof in writing to
the Secretary of the Corporation, as hereinafter provided. To be timely, a
stockholder's notice shall be delivered to the Secretary at the principal
executive offices of the Corporation not less than 90 days prior to and
not more than 120 days prior to the first anniversary of the preceding
year's annual meeting of stockholders; provided, however, that if the date
of the annual meeting is advanced more than 30 days prior to or delayed by
more than 60 days after such anniversary date, notice by the stockholder
to be timely must be so delivered not later than the close of business on
the later of the 90th day prior to such annual meeting or the 10th day
following the day on which public announcement of the date of such meeting
is first made.
(2) Such business must be a proper matter for stockholder action under the
General Corporation Law of the State of Delaware.
(3) If the stockholder, or the beneficial owner on whose behalf any such
proposal or nomination is made, solicits or participates in the
solicitation of proxies in support of such proposal or nominees, the
stockholder must have timely indicated its, or such beneficial owner's,
intention to do so as provided in provision (4)(c)(iii) below. (4) Such
stockholder's notice shall set forth the following information: (a) as to
each person whom the stockholder proposes to nominate for election or
reelection as a director, all information relating to such person as would
be required to be disclosed in solicitations of proxies for the election
of such nominees as directors pursuant to Regulation 14A under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and such
person's written consent to serving as a director if elected; (b) as to
any other business that the stockholder proposes to bring before the
meeting, a brief description of such business, the reasons for conducting
such business at the meeting and any material interest in such business of
such stockholder and the beneficial owner, if any, on whose behalf the
proposal is made; and (c) as to the stockholder giving the notice and the
beneficial owner, if any, on whose behalf the nomination or proposal is
made, (i) the name and address of such stockholder, as they appear on the
Corporation's books, and of such beneficial owner, (ii) the class and
number of shares of the Corporation that are owned beneficially and of
record by such stockholder and such beneficial owner, and (iii) whether
either such stockholder or beneficial owner intends to solicit or
participate in the solicitation of proxies in favor of such proposal or
nominee or nominees.
C. Notwithstanding anything in paragraph B.(1) of this Section 1.08 to the
contrary, in the event that the number of directors to be elected to the Board
of Directors is increased above the number in effect at the preceding year's
annual meeting of stockholders and there is no public announcement naming all of
the nominees for director or specifying the size of the increased Board of
Directors made by the Corporation at least 100 days prior to the first
anniversary of the preceding year's annual meeting, a stockholder's notice
required by this By-law shall also be considered timely, but only with respect
to nominees for any new positions created by such increase, if it shall be
delivered to the Secretary at the principal executive offices of the Corporation
not later than the close of business
Restated By-Laws: Tiffany & Co. (DE) 01/21/99 Page 3
<PAGE> 4
on the 10th day following the day on which such public announcement is first
made by the Corporation.
D. Only such business shall be conducted at a special meeting of
stockholders as shall have been brought before the meeting pursuant to a notice
of meeting issued by or at the direction of a majority vote of the Board of
Directors. Nominations of persons for election to the Board of Directors may be
made at a special meeting of stockholders at which directors are to be elected
pursuant to such a notice of meeting (1) by or at the direction of the Board or
(2) by any stockholder of record of the Corporation who is a stockholder of
record at the time of giving of notice provided for in this paragraph D., who
shall be entitled to vote at the meeting and who complies with the notice
procedures set forth in the following sentence. The stockholder's notice must
include the information required in paragraphs B.(3) and B. (4) of this Section
1.08 and must be delivered to the Secretary at the principal executive offices
of the Corporation not later than the close of business on the later of the 90th
day prior to such special meeting or the 10th day following the day on which
public announcement is first made of the date of the special meeting and of the
nominees proposed by the Board of Directors to be elected at such meeting and
not earlier than the 120th day prior to such special meeting.
E. Only persons nominated in accordance with the procedures set forth in
this Section 1.08 shall be eligible to serve as directors and only such business
shall be conducted at a meeting of stockholders as shall have been brought
before the meeting in accordance with the procedures set forth in this Section
1.08. The chairman of the meeting shall have the power and the duty to determine
whether a nomination or any business proposed to be brought before the meeting
has been made in accordance with the procedures set forth in these By-laws and,
if any proposed nomination or business is not in compliance with these By-laws,
to declare that such defective proposed business or nomination shall not be
presented for stockholder action at the meeting and shall be disregarded.
F. For purposes of this Section 1.08, "public announcement " shall mean
disclosure in a press release reported by the Dow Jones New Service, Associated
Press or a comparable national news service or in a documents publicly filed by
the Corporation with the Securities and Exchange Commission pursuant to Section
13, 14 or 15(d) of the Exchange Act.
G. Notwithstanding the foregoing provisions of this Section 1.08, a
stockholder shall also comply with all applicable requirements of the Exchange
Act and the rules and regulations thereunder with respect to matters set forth
in this Section 1.08. Nothing in this Section 1.08 shall be deemed to excuse any
stockholder from the obligation to comply with the requirements of Rule 14a-8
under the Exchange Act with respect to proposals offered for inclusion in the
Corporation's proxy statement.
H. Paragraphs A. through G. of this Section 1.08 shall not apply with
respect to the 1998 Annual Meeting of Stockholders which shall be governed by
the following special provisions:
At the 1998 annual meeting of the stockholders, only such business shall
be conducted as shall have been brought before the meeting (i) by or at
the direction of the Board of Directors or (ii) by any stockholder of the
Corporation who complies with the notice procedures set forth in this
paragraph H. For business to be properly brought before
Restated By-Laws: Tiffany & Co. (DE) 01/21/99 Page 4
<PAGE> 5
such meeting by a stockholder, the stockholder must have given notice
thereof in writing to the Secretary of the Corporation at the principal
executive offices of the Corporation, which written notice must be
received by the Secretary of the Corporation not less than 60 days in
advance of such meeting or, if later, the fifteenth day following the
first public disclosure of the date of such meeting (by mailing of notice
of the meeting or otherwise). A stockholder's notice to the Secretary
shall set forth as to each matter the stockholder proposes to bring before
the meeting (1) a brief description of the business desired to be brought
before the meeting and the reasons for conducting such business at the
meeting, (2) the name and address, as they appear on the Corporation's
books, of the stockholder proposing such business, (3) the class, series
and number of shares of the Corporation that are beneficially owned by the
stockholder, and (4) any material interest of the stockholder in such
business. In addition, the stockholder making such proposal shall promptly
provide any other information reasonably requested by the Corporation.
Notwithstanding anything in these Bylaws to the contrary, no business
shall be conducted at such meeting of the stockholders except in
accordance with the procedures set forth in this paragraph H. The Chairman
of such meeting shall direct that any business not properly brought before
the meeting shall not be considered.
ARTICLE II
Directors
SECTION 2.01. Management of Business. The business of the Corporation shall be
managed by its Board of Directors.
The Board of Directors, in addition to the powers and authority expressly
conferred upon it herein, by statute, by the Certificate of Incorporation of the
Corporation or otherwise, is hereby empowered to exercise all such powers as may
be exercised by the Corporation, except as expressly provided otherwise by the
statutes of the State of Delaware, by the Certificate of Incorporation of the
Corporation or by these By-laws.
Without prejudice to the generality of the foregoing, the Board of
Directors, by resolution or resolutions, may create and issue, whether or not in
connection with the issue and sale of any shares of stock or other securities of
the Corporation, rights or options entitling the holders thereof to purchase
from the Corporation any shares of its capital stock of any class or classes or
any other securities of the Corporation, such rights or options to be evidenced
by or in such instrument or instruments as shall be approved by the Board of
Directors. The terms upon which, including the time or times, which may be
limited or unlimited in duration, at or within which, and the price or prices at
which, any such rights or options may be issued and any such shares or other
securities may be purchased from the Corporation upon the exercise of any such
right or option shall be such as shall be fixed and stated in the resolution or
resolutions adopted by the Board of Directors providing for the creation and
issue of such rights or options, and, in every case, set forth or incorporated
by reference in the instrument or instruments evidencing such rights or options.
In the absence of actual fraud in the
Restated By-Laws: Tiffany & Co. (DE) 01/21/99 Page 5
<PAGE> 6
transaction, the judgment of the directors as to the consideration for the
issuance of such rights or options and the sufficiency thereof shall be
conclusive. In case the shares of stock of the Corporation to be issued upon the
exercise of such rights or options shall be shares having a par value, the price
or prices so to be received therefor shall not be less than the par value
thereof. In case the shares of stock to be issued shall be shares of stock
without par value, the consideration therefor shall be determined in the manner
provided in Section 153 of the General Corporation Law of the State of Delaware.
SECTION 2.02. Qualifications and Number of Directors. Directors need not be
stockholders. The number of directors which shall constitute the whole Board
shall be eight (8), but such number as determined by the Board of Directors may
be increased or decreased and subsequently again from time to time increased or
decreased by an amendment to these By-laws, provided that no decrease to such
number by action of the Board of Directors shall in itself effect the removal of
any sitting director. In order to qualify for election or appointment, directors
shall be younger than 72 years when elected or appointed, provided that the
Board of Directors may, by specific resolution, waive the provisions of this
sentence with respect to an individual director whose continued service is
deemed uniquely important to the Corporation.
SECTION 2.03. Election and Term. The directors shall be elected at the annual
meeting of the stockholders, and each director shall be elected to hold office
until his successor shall be elected and qualified, or until his earlier
resignation or removal.
SECTION 2.04. Resignations. Any director of the Corporation may resign at any
time by giving written notice to the Corporation. Such resignation shall take
effect at the time specified therein, if any, or if no time is specified
therein, then upon receipt of such notice by the Corporation; and, unless
otherwise provided therein, the acceptance of such resignation shall not be
necessary to make it effective.
SECTION 2.05. Vacancies and Newly Created Directorships. Vacancies and newly
created directorships resulting from any increase in the authorized number of
directors may be filled by a majority of the directors then in office, though
less than a quorum, or by a sole remaining director, and the directors so chosen
shall hold office until their successors shall be elected and qualified, or
until their earlier resignation or removal. When one or more directors shall
resign from the Board, effective at a future date, a majority of the directors
then in office, including those who have so resigned, shall have power to fill
such vacancy or vacancies, the vote thereon to take effect when such resignation
or resignations shall become effective, and each director so chosen shall hold
office as herein provided in the filling of other vacancies.
SECTION 2.06. Quorum of Directors. At all meetings of the Board of Directors, a
majority of the entire Board, but not less than two directors, shall constitute
a quorum for the transaction of business, except that when a board of one
director is authorized, then one director shall constitute a quorum. The act of
a majority of the directors present at any meeting at which there is a quorum
shall be the act of the Board of Directors except as provided in Section 2.05
hereof.
A majority of the directors present, whether or not a quorum is present,
may adjourn any meeting of the directors to another time and place. Notice of
any adjournment need not be given if
Restated By-Laws: Tiffany & Co. (DE) 01/21/99 Page 6
<PAGE> 7
such time and place are announced at the meeting.
SECTION 2.07. Annual Meeting. The newly elected Board of Directors shall meet
immediately following the adjournment of the annual meeting of stockholders in
each year at the same place, within or without the State of Delaware, and no
notice of such meeting shall be necessary.
SECTION 2.08. Regular Meetings. Regular meetings of the Board of Directors may
be held at such time and place, within or without the State of Delaware, as
shall from time to time be fixed by the Board and no notice thereof shall be
necessary.
SECTION 2.09. Special Meetings. Special meetings of the Board of Directors may
be called at any time by the Chairman of the Board of Directors, the Chief
Executive Officer, the President, the Vice Chairman of the Board of Directors,
any Vice-President, the Treasurer or the Secretary or by resolution of the Board
of Directors. Special meetings shall be held at such place, within or without
the State of Delaware, as shall be fixed by the person or persons calling the
meeting and stated in the notice or waiver of notice of the meeting.
Special meetings of the Board of Directors shall be held upon notice to
the directors or waiver thereof. Unless waived, notice of each special meeting
of the directors, stating the time and place of the meeting, shall be given to
each director by delivered letter, by transmitted facsimile, by electronic mail,
by telegram or by personal communication either over the telephone or otherwise,
in each such case not later than 48 hours prior to the meeting, or by mailed
letter deposited in the United States mail with postage thereon prepaid not
later than the seventh day prior to the meeting.
SECTION 2.10. Action Without a Meeting. Any action required or permitted to be
taken at any meeting of the Board of Directors or of any committee thereof may
be taken without a meeting if all members of the Board or committee, as the case
may be, consent thereto in a writing or writings and the writing or writings are
filed with the minutes of proceedings of the Board or committee.
SECTION 2.11. Compensation. Directors shall receive such fixed sums and expenses
of attendance for attendance at each meeting of the Board or of any committee
and/or such salary as may be determined from time to time by the Board of
Directors; provided that nothing herein contained shall be construed to preclude
any director from serving the Corporation in any other capacity and receiving
compensation therefor.
SECTION 2.12. Committees. Whereas by resolution adopted by a majority of the
whole Board of Directors, the Corporation has elected to be governed by
paragraph (2) of Section 141(c) of the General Corporation Law of the State of
Delaware, the Board of Directors may, by resolution or resolutions, designate
one or more committees (and may discontinue any of same at any time) each to
consist of one or more of the directors of the Corporation. The members of each
committee shall be appointed by the Board and shall hold office during the
pleasure of the Board. Subject to any limitations on the delegation of power and
authority to such committee in the Corporation's Restated Certificate of
Incorporation or under applicable law, a committee may be delegated and may
exercise such powers of the Board of Directors in the management of the business
and affairs of the Corporation (and may authorize the seal of the Corporation to
be affixed to all papers which may
Restated By-Laws: Tiffany & Co. (DE) 01/21/99 Page 7
<PAGE> 8
require it) as may be delegated to such committee by such a resolution of the
Board of Directors. Subject to a resolution of the Board of Directors to the
contrary, in the absence or disqualification of a member of a committee, the
member or members of the committee present at any meeting of the committee and
not disqualified from voting, whether or not such present member or members
constitute a quorum, may unanimously appoint another member of the Board of
Directors to act at such meeting of the committee in the place of such absent or
disqualified member. Regular meetings of any such committee may be held at such
time and place, within or without the State of Delaware, as shall from time to
time be fixed by such committee and no notice thereof shall be necessary.
Special meetings of any such committee may be called at any time by any officer
of the Corporation or any member of any such committee. Special meetings shall
be held at such place, within or without the State of Delaware, as shall be
fixed by the person calling the meeting and stated in the notice or waiver of
the meeting. A majority of the members of any such committee shall constitute a
quorum for the transaction of business and the act of a majority present at
which there is a quorum shall be the act of such committee. Notice of each
special meeting of a committee shall be given (or waived) in the same manner as
notice of a directors' meeting. Each committee shall keep written minutes of its
meetings and report such minutes to the Board of Directors at the next regular
meeting of the Board of Directors.
ARTICLE III
Officers
SECTION 3.01. Number. The officers of the Corporation shall be chosen by the
Board of Directors. The officers shall be a Chairman of the Board of Directors,
a Chief Executive Officer, a Chief Operating Officer, a President, a Vice
Chairman of the Board of Directors, a Secretary and a Treasurer, and such number
of Vice-Presidents (including Vice-Presidents designated by the Board of
Directors as Senior Vice President and Executive Vice Presidents), Assistant
Secretaries and Assistant Treasurers, and such other officers, if any, as the
Board may from time to time determine. The Board may choose such other agents as
it shall deem necessary. Any number of offices may be held by the same person.
SECTION 3.02. Terms of Office. Each officer shall hold his office until his
successor is chosen and qualified or until his earlier resignation or removal.
Any officer may resign at any time by written notice to the Corporation.
SECTION 3.03. Removal. Any officer may be removed from office at any time
by the Board of Directors with or without cause.
SECTION 3.04. Authority. The powers and duties of the officers of the
Corporation shall be determined by resolution of the Board, or by one of the
committees of the Board. The Secretary, or some other officer designated by
resolution of the Board or by one of the committees of the Board, shall record
all of the proceedings of the meetings of the stockholders and directors in a
book to be kept for that purpose.
SECTION 3.05. Voting Securities Owned by the Corporation. Powers of attorney,
proxies, waivers
Restated By-Laws: Tiffany & Co. (DE) 01/21/99 Page 8
<PAGE> 9
of notice of meeting, consents and other instruments relating to securities
owned by the Corporation may be executed in the name of and on behalf of the
Corporation by the Chairman of the Board of Directors, the Chief Executive
Officer, the President , the Vice Chairman of the Board of Directors, or any
Vice-President and any such officer may, in the name of and on behalf of the
Corporation, take all such action as any such officer may deem advisable to vote
in person or by proxy at any meeting of security holders of any corporation in
which the Corporation may own securities and at any such meeting shall possess
and may exercise any and all rights and powers incident to the ownership of such
securities and which, as the owner thereof, the Corporation might have exercised
and possessed if present. The Board of Directors may, by resolution, from time
to time confer like powers upon any other person or persons.
ARTICLE IV
Capital Stock
SECTION 4.01. Stock Certificates. Every holder of stock in the Corporation shall
be entitled to have a certificate signed by, or in the name of the Corporation
by, the Chairman of the Board of Directors, the President, the Vice Chairman of
the Board of Directors or a Vice-President, and by the Treasurer or an Assistant
Treasurer, or the Secretary or an Assistant Secretary, of the Corporation,
certifying the number of shares owned by him in the Corporation. Where such
certificate is signed (1) by a transfer agent other than the Corporation or its
employee, or (2) by a registrar other than the Corporation or its employee, the
signatures of the officers of the Corporation may be facsimiles. In case any
officer who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer before such certificate is
issued, it may be issued by the Corporation with the same effect as if he were
such officer at the date of issue.
SECTION 4.02. Transfers. Stock of the Corporation shall be transferable in
the manner prescribed by the laws of the State of Delaware.
SECTION 4.03. Registered Holders. Prior to due presentment for registration of
transfer of any security of the Corporation in registered form, the Corporation
shall treat the registered owner as the person exclusively entitled to vote, to
receive notifications and to otherwise exercise all the rights and powers of an
owner, and shall not be bound to recognize any equitable or other claim to, or
interest in, any security, whether or not the Corporation shall have notice
thereof, except as otherwise provided by the laws of the State of Delaware.
SECTION 4.04. New Certificates. The Corporation shall issue a new certificate of
stock in the place of any certificate theretofore issued by it, alleged to have
been lost, stolen or destroyed, if the owner: (1) so requests before the
Corporation as notice that the shares of stock represented by that certificate
have been acquired by a bona fide purchaser; (2) files with the Corporation a
bond sufficient (in the judgment of the directors) to indemnify the Corporation
against any claim that may be made against it on account of the alleged loss or
theft of that certificate or the issuance of a new certificate; and (3)
satisfies any other requirements imposed by the directors that are reasonable
under the circumstances. A new certificate may be issued without requiring any
bond when, in the judgment of the directors, it is
Restated By-Laws: Tiffany & Co. (DE) 01/21/99 Page 9
<PAGE> 10
proper so to do.
ARTICLE V
Miscellaneous
SECTION 5.01. Offices. The registered office of the Corporation in the State of
Delaware shall be at Corporation Trust Center, 1209 Orange Street, Wilmington,
Delaware 19801. The Corporation may also have offices at other places within
and/or without the State of Delaware.
SECTION 5.02. Seal. The corporate seal shall have inscribed thereon the name of
the Corporation, the year of its incorporation and the words "Corporate Seal
Delaware."
SECTION 5.03. Checks. All checks or demands for money shall be signed by such
person or persons as the Board of Directors may from time to time determine.
SECTION 5.04. Fiscal Year. The fiscal year shall begin the first day of February
in each year and shall end on the thirty-first day of January of the following
year.
SECTION 5.05. Waivers of Notice: Dispensing with Notice. Whenever any notice
whatever is required to be given under the provisions of the General Corporation
Law of the State of Delaware, of the Certificate of Incorporation of the
Corporation, or of these By-laws, a waiver thereof in writing, signed by the
person or persons entitled to said notice, whether before or after the time
stated therein, shall be deemed equivalent thereto. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of the
stockholders need be specified in any written waiver of notice.
Attendance of a person at a meeting of stockholders shall constitute a
waiver of notice of such meeting, except when the stockholder attends a meeting
for the express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened.
Whenever any notice whatever is required to be given under the provisions
of the General Corporation Law of the State of Delaware, of the Certificate of
Incorporation of the Corporation, or of these By-laws, to any person with whom
communication is made unlawful by any law of the United States of America, or by
any rule, regulation, proclamation or executive order issued under any such law,
then the giving of such notice to such person shall not be required and there
shall be no duty to apply to any governmental authority or agency for a license
or permit to give such notice to such person; and any action or meeting which
shall be taken or held without notice to any such person or without giving or
without applying for a license or permit to give any such notice to any such
person with whom communication is made unlawful as aforesaid, shall have the
same force and effect as if such notice had been given as provided under the
provisions of the General Corporation Law of the State of Delaware, or under the
provisions of the Certificate of Incorporation of the Corporation or of these
By-laws. In the event that the action taken by the Corporation is such as to
require the filing of a certificate under any of the other sections of this
title, the certificate shall state, if such is the fact and if notice is
required, that notice was given to all persons entitled to receive notice except
such
Restated By-Laws: Tiffany & Co. (DE) 01/21/99 Page 10
<PAGE> 11
persons with whom communication is unlawful.
SECTION 5.06. Loans to and Guarantees of Obligations of Employees and Officers.
The Corporation may lend money to or guaranty any obligation of, or otherwise
assist any officer or other employee of the Corporation or of a subsidiary,
including any officer or employee who is a director of the corporation or a
subsidiary, whenever, in the judgment of the Board of Directors, such loan,
guaranty or assistance may reasonably be expected to benefit the Corporation.
The loan, guaranty or other assistance may be with or without interest, and may
be unsecured, or secured in such manner as the Board of Directors shall approve,
including without limitation, a pledge of shares of stock of the Corporation.
Nothing in this Section contained shall be deemed to deny, limit or restrict the
powers of guaranty or warranty of the Corporation at common law or under any
other statute.
SECTION 5.07. Amendment of By-laws. These By-laws may be altered, amended or
repealed at any meeting of the Board of Directors.
SECTION 5.08. Section Headings and Statutory References. The headings of the
Articles and Sections of these By-laws, and the references in brackets to
relevant sections of the General Corporation Law of the State of Delaware, have
been inserted for convenience of reference only and shall not be deemed to be a
part of these By-laws.
ARTICLE VI
SECTION 6.01. Indemnification of Directors and Officers. The Corporation shall,
to the fullest extent permitted by law, indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (including without limitation an action by or in the right of the
Corporation) by reason of the fact that he is or was a director or officer of
the Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful,
provided, however, that in the event of any action, suit or proceeding initiated
by and in the name of (or by and in the name of a nominee or agent for) a person
who would otherwise by entitled to indemnification under this Section 6.01, such
person shall be entitled to indemnification hereunder only in the event such
action, suit or proceeding was initiated on the authorization of the Board of
Directors. The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did not act in good
faith and in a manner which he reasonably believed to be in or not opposed to
the best interests of the Corporation, and, with respect to any criminal action
or proceeding, that he had reasonable cause to believe that his conduct was
unlawful.
The right of indemnity provided herein shall not be exclusive and
the Corporation may provide indemnification to any person, by agreement or
otherwise, on such terms and conditions as the
Restated By-Laws: Tiffany & Co. (DE) 01/21/99 Page 11
<PAGE> 12
Board of Directors may approve. Any agreement for indemnification of any
director, officer, employee or other person may provide indemnification rights
which are broader or otherwise different from those set forth herein.
No repeal or modification of this Article or of relevant provisions of the
General Corporation Law of the State of Delaware or any other applicable laws
shall affect or diminish in any way the rights of any person to indemnification
under the provisions hereof with respect to any action, suit, proceeding or
investigation arising out of, or relating to, any actions, transactions or facts
occurring prior to the final adoption of such repeal or modification.
SECTION 6.02. Insurance. The Corporation may purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise against any liability asserted against him and
incurred by him in any such capacity or arising out of his status as such,
whether or not the Corporation would have the power to indemnify him against
such liability under the provisions of this Article.
Restated By-Laws: Tiffany & Co. (DE) 01/21/99 Page 12
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.3.A
<SEQUENCE>3
<DESCRIPTION>STANDARD TERMS-1998 EMPLOYEE INCENTIVE PLAN
<TEXT>
<PAGE> 1
Exhibit 4.3a
Tiffany & Co.
Report on Form 10-K
Fiscal Year 1998
TIFFANY & CO.
a Delaware Corporation
(the "Company")
TERMS OF STOCK OPTION AWARD
(Standard Non-Qualified Option )
under the
1998 EMPLOYEE INCENTIVE PLAN
(the "Plan")
Terms Adopted May 21, 1998, Revised January 21, 1999
1. Introduction and Terms of Option. Participant has been granted a
Non-Qualified Stock Option Award (the "Option") to purchase shares of the
Company's Common Stock 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 "Covered Shares" and the "Exercise Price" per
Share are stated in the attached "Notice of Grant". The other terms and
conditions of the Option are stated in this document and in the Plan. Certain
initially capitalized words and phrases used in this document are defined in
paragraph 10 below and elsewhere in this document.
2. Award and Exercise Price; Option Not An Incentive Stock Option. Subject to
the terms and conditions stated in this document, the Option gives Participant
the right to purchase the Covered Shares from the Company at the Exercise Price.
The Option is not intended to constitute an "incentive stock option" as that
term is used in the Code.
3. Earliest Dates for Exercise - Cumulative Installments. Unless otherwise
provided in paragraphs 4, 5 or 6 below, the Option shall become exercisable
("mature") in cumulative installments according to the following schedule:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
As of the following The Option shall mature with the respect to
anniversary of the Grant the following percentage ("installment") of
Date: the Covered Shares:
- --------------------------------------------------------------------------------
<S> <C>
One-year anniversary 25%
- --------------------------------------------------------------------------------
Two-year anniversary 25%
- --------------------------------------------------------------------------------
Three-year anniversary 25%
- --------------------------------------------------------------------------------
Four-year anniversary 25%
- --------------------------------------------------------------------------------
</TABLE>
Once an installment of the Option matures, as provided in the above schedule, it
shall continue to be exercisable with all prior installments on a cumulative
basis until the Option expires.
4. Effect of Termination of Employment. An installment of the Option shall not
mature if the Participant's Date of Termination occurs before the anniversary of
the Grant Date on which such installment was scheduled to mature. Installments
of the Option which mature prior to Participant's Date of Termination will
remain exercisable, subject to expiration as provided in paragraph 6 below.
<PAGE> 2
5. Effect of Change in Control. All installments of the Option shall mature upon
the date of a Change of Control unless the Participant's Date of Termination
occurs before the date of the Change of Control. The Committee reserves the
right to unilaterally amend the definition of "Change of Control" so as to
specify additional circumstances which shall be deemed to constitute a Change of
Control.
6. Expiration. The Option, including matured installments thereof, shall not be
exercisable in part or in whole on or after the Expiration Date. The "Expiration
Date" shall be the earliest to occur of:
a. the ten-year anniversary of the Grant Date;
b. if the Participant's Date of Termination occurs by reason of death,
Disability or Retirement, the two-year anniversary of such Date of
Termination;
c. if the Participant's Date of Termination occurs for reasons other than
death, Disability, Retirement or Termination for Cause, the three month
anniversary of such Date of Termination;
d. if the Participant's Date of Termination occurs by reason of Termination
for Cause, the Date of Termination.
7. Methods of Option Exercise. The Option may be exercised in whole or in part
as to any Shares that have matured by filing a written notice of exercise with
the Secretary of the Company at its corporate headquarters prior to the
Expiration Date. Such notice shall specify the number of Shares which the
Participant elects to purchase and shall be accompanied by either of the
following:
a. 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
amount of the Exercise Price for the Shares being exercised plus any tax
withholding resulting from such exercise as computed by Tiffany and
Company's payroll department; or
b. a copy of directions to, or a written acknowledgment from, an Approved
Broker that the Approved Broker has been directed to sell, for the account
of the owner of the Option, Shares (or a sufficient portion of the Shares)
acquired upon exercise of the Option, together with an undertaking by the
Approved Broker to remit to the Company a sufficient portion of the sale
proceeds to pay the Exercise Price for the Shares exercised plus any tax
withholding resulting from such exercise as computed by Tiffany and
Company's payroll department.
In the case of exercise via method (a), the exercise shall be deemed complete on
the Company's receipt of such notice and said check or draft. In the case of
exercise via method (b), the exercise shall be deemed complete on the trade date
of the sale. The Committee may approve other methods of exercise, as provided
for in the Plan, before the Option is exercised.
8. Withholding. All distributions on the exercise of the Option are subject to
withholding of all applicable taxes. The method for withholding shall be as
provided in paragraph 7 above, unless the Committee approves other methods of
withholding, as provided for in the Plan, before the Option is exercised.
Tiffany & Co. 1998 Employee Incentive Plan 01/21/99
Standard Terms of Stock Option Award: Rev. II Page 2
<PAGE> 3
9. Transferability. The Option is not transferable otherwise than by will or the
laws of descent and distribution or pursuant to a "domestic relations order", as
defined in the Code or Title I of the Employee Retirement Income Security Act or
the rules thereunder, 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 Option otherwise than as permitted herein or to
assign, pledge, hypothecate or otherwise dispose of the Option otherwise than as
permitted herein, or upon the levy of any execution, attachment or similar
process upon the Option, the Option shall immediately terminate and become null
and void.
10. Definitions. For the purposes of the Option, the words and phrases listed
below shall be defined as follows:
a. Approved Broker. Means one or more securities brokerage firms
designated by the Secretary of the Company from time to time.
b. Change of Control. A "Change of Control" shall be deemed to have
occurred if :
(i) any person (as used herein, the word "person" shall mean an
individual or an entity) or group of persons acting in concert
has acquired 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,
(ii) individuals who constituted the Board of Directors of the
Company on May 1, 1998 (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 May 1, 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 paragraph 10(a), considered as though such individual
were a member of the Incumbent Board; or
(iii) 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.
A Change of Control will also be deemed to have occurred as of fourteen
days prior to the date scheduled for a 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 Company, with appropriate adjustments as to the number and kind of
shares and prices.
c. Code. The Internal Revenue Code of 1986, as amended.
d. Date of Termination. The Participant's "Date of Termination" shall
be the first day occurring on or after the Grant Date on which
Participant's employment with the
Tiffany & Co. 1998 Employee Incentive Plan 01/21/99
Standard Terms of Stock Option Award: Rev. II Page 3
<PAGE> 4
Company and all Related Companies terminates for any reason;
provided that a termination of employment shall not be deemed to
occur by reason of a transfer of the Participant between the Company
and a Related Company or between two Related Companies; and further
provided that the Participant's employment shall not be considered
terminated while the Participant is on a leave of absence from the
Company or a Related Company approved by the Participant's employer
or required by applicable law. If, as a result of a sale or other
transaction, the Participant's employer ceases to be a Related
Company (and the Participant's employer is or becomes an entity that
is separate from the Company), the occurrence of such transaction
shall be treated as the Participant's Date of Termination caused by
the Participant being discharged by the employer.
e. Disability. Except as otherwise provided by the Committee, the
Participant shall be considered to have a "Disability" if he or she
is unable to engage in any substantial gainful activity by reason of
a medically determinable physical or mental impairment, which
impairment, in the opinion of a physician selected by the Secretary
of the Company, is expected to have a duration of not less than 120
days.
f. Plan Definitions. 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.
g. Retirement. "Retirement" of the Participant shall mean the
occurrence of the Participant's Date of Termination after age 65
(other than a Termination for Cause) or the occurrence of the
Participant's Date of Termination after age 55 pursuant to the
retirement practices of the Participant's employer.
h. Terminating Transaction. As used herein, the phrase "Terminating
Transaction" shall mean any one of the following:
(i) the dissolution or liquidation of the Company;
(ii) a reorganization, merger or consolidation of the Company; or
(iii) a reorganization, merger or consolidation of the Company with
one or more corporations as a result of which the Company goes
out of existence or becomes a subsidiary of another
corporation, or upon the acquisition of substantially all of
the property or more than eighty percent (80%) of the then
outstanding stock of the Company by another corporation.
i. Termination for Cause. "Termination for Cause" means termination of
employment pursuant to the conduct-based provisions of the
employer's policy on involuntary termination of employment by reason
of a Participant's action or willful omission, including without
limitation, the commission of a crime, fraud, willful misconduct or
the unauthorized use or disclosure of confidential information which
has resulted or is likely to result in damage to the Company or any
of its subsidiaries.
11. Heirs and Successors. The terms of the Option 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 Option by
filing written notice with the Secretary of the Company. In the event of the
Participant's death prior to the full
Tiffany & Co. 1998 Employee Incentive Plan 01/21/99
Standard Terms of Stock Option Award: Rev. II Page 4
<PAGE> 5
exercise of the Option, the Option may be exercised by such Beneficiary to the
extent that it was exercisable on the Participant's Termination Date and up
until its Expiration Date. If the Participant fails to designate a Beneficiary,
or if the designated Beneficiary dies before the Participant or before full
exercise of the Option, the Option may be exercised by Participant's estate to
the extent that it was exercisable on the Participant's Termination Date and up
until its Expiration Date.
12. Administration. The authority to manage and control the operation and
administration of the Option shall be vested in the Committee, and the Committee
shall have all powers with respect to the Option as it has with respect to the
Plan. Any interpretation of the Option by the Committee and any decision made by
it with respect to the Option is final and binding.
13. Plan Governs. Notwithstanding anything in this Agreement to the contrary,
the terms of the Option 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.
Tiffany & Co. 1998 Employee Incentive Plan 01/21/99
Standard Terms of Stock Option Award: Rev. II Page 5
<PAGE> 6
TIFFANY & CO.
A DELAWARE CORPORATION
(THE "COMPANY")
TERMS OF STOCK OPTION AWARD
(TRANSFERABLE NON-QUALIFIED OPTION)
UNDER THE
1998 EMPLOYEE INCENTIVE PLAN
(THE "PLAN")
TERMS ADOPTED MAY 21, 1998, REVISED JANUARY 21, 1999
1. Introduction and Terms of Option. Participant has been granted a
Non-Qualified Stock Option Award (the "Option") to purchase shares of the
Company's Common Stock 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 "Covered Shares" and the "Exercise Price" per
Share are stated in the attached "Notice of Grant". The other terms and
conditions of the Option are stated in this document and in the Plan. Certain
initially capitalized words and phrases used in this document are defined in
paragraph 10 below and elsewhere in this document.
2. Award and Exercise Price; Option Not An Incentive Stock Option. Subject to
the terms and conditions stated in this document, the Option gives Participant
the right to purchase the Covered Shares from the Company at the Exercise Price.
THE OPTION IS NOT INTENDED TO CONSTITUTE AN "INCENTIVE STOCK OPTION" AS THAT
TERM IS USED IN THE CODE.
3. Earliest Dates for Exercise - Cumulative Installments. Unless otherwise
provided in paragraphs 4, 5 or 6 below, the Option shall become exercisable
("mature") in cumulative installments according to the following schedule:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
AS OF THE FOLLOWING ANNIVERSARY OF THE THE OPTION SHALL MATURE WITH THE RESPECT TO THE FOLLOWING PERCENTAGE
GRANT DATE: ("INSTALLMENT") OF THE COVERED SHARES:
- ---------------------------------------------------------------------------------------------------------------
<S> <C>
One-year anniversary 25%
- ---------------------------------------------------------------------------------------------------------------
Two-year anniversary 25%
- ---------------------------------------------------------------------------------------------------------------
Three-year anniversary 25%
- ---------------------------------------------------------------------------------------------------------------
Four-year anniversary 25%
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
Once an installment of the Option matures, as provided in the above schedule, it
shall continue to be exercisable with all prior installments on a cumulative
basis until the Option expires.
4. Effect of Termination of Employment. An installment of the Option shall not
mature if the Participant's Date of Termination occurs before the anniversary of
the Grant Date on which such installment was scheduled to mature. Installments
of the Option which mature prior to Participant's Date of Termination will
remain exercisable, subject to expiration as provided in paragraph 6 below.
5. Effect of Change in Control. All installments of the Option shall mature upon
the date of a Change of Control unless the Participant's Date of Termination
occurs before the date of the Change of Control. The Committee reserves the
right to unilaterally amend the definition of a "Change of Control" so as to
specify additional circumstances which shall be deemed to constitute a Change of
Control.
<PAGE> 7
6. Expiration. The Option, including matured installments thereof, shall not be
exercisable in part or in whole on or after the Expiration Date. The "Expiration
Date" shall be the earliest to occur of:
a. the ten-year anniversary of the Grant Date;
b. if the Participant's Date of Termination occurs by reason of death,
Disability or Retirement, the two-year anniversary of such Date of
Termination;
c. if the Participant's Date of Termination occurs for reasons other than
death, Disability, Retirement or Termination for Cause, the three month
anniversary of such Date of Termination;
d. if the Participant's Date of Termination occurs by reason of
Termination for Cause, the Date of Termination.
7. Methods of Option Exercise. The Option may be exercised in whole or in part
as to any Shares that have matured by filing a written notice of exercise with
the Secretary of the Company at its corporate headquarters prior to the
Expiration Date. Such notice shall specify the number of Shares which the
Participant elects to purchase and shall be accompanied by either of the
following:
a. 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
amount of the Exercise Price for the Shares being exercised plus any
tax withholding resulting from such exercise as computed by Tiffany and
Company's payroll department; or
b. a copy of directions to, or a written acknowledgment from, an Approved
Broker that the Approved Broker has been directed to sell, for the
account of the owner of the Option, Shares (or a sufficient portion of
the Shares) acquired upon exercise of the Option, together with an
undertaking by the Approved Broker to remit to the Company a sufficient
portion of the sale proceeds to pay the Exercise Price for the Shares
exercised plus any tax withholding resulting from such exercise as
computed by Tiffany and Company's payroll department.
In the case of exercise via method (a), the exercise shall be deemed complete on
the Company's receipt of such notice and said check or draft. In the case of
exercise via method (b), the exercise shall be deemed complete on the trade date
of the sale. The Committee may approve other methods of exercise, as provided
for in the Plan, before the Option is exercised.
8. Withholding. All distributions on the exercise of the Option are subject to
withholding of all applicable taxes. The method for withholding shall be as
provided in paragraph 7 above, unless the Committee approves other methods of
withholding, as provided for in the Plan, before the Option is exercised.
9. Transferability. The Option is not transferable otherwise than by will or the
laws of descent and distribution or pursuant to a "domestic relations order", as
defined in the Code or Title I of the Employee Retirement Income Security Act or
the rules thereunder, 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.
Notwithstanding the foregoing, the Option may be transferred by the Participant
to (i) the spouse, children or grandchildren of the Participant (each an
"Immediate Family Member"), (ii) a trust or trusts for the exclusive benefit of
any or all Immediate Family Members, or (iii) a partnership in which any or all
Immediate Family Members are the only partners, provided that (x) there may be
no consideration paid or otherwise given for any such transfer, and (y)
subsequent transfer of the Option is prohibited otherwise than by will, the laws
of descent and distribution or
Tiffany & Co. 1998 Employee Incentive Plan 1/21/99
Transferable Option: Terms of Stock Option Award -- Rev. II Page 2
<PAGE> 8
pursuant to a domestic relations order. Following transfer, the Option shall
continue to be subject to the same terms and conditions as were applicable
immediately prior to transfer. The provisions of paragraph 4 above shall
continue to be applied with respect to the original Participant following
transfer and the Option shall be exercisable by the transferee only to the
extent, and for the periods specified, herein. Upon any attempt to transfer the
Option otherwise than as permitted herein or to assign, pledge, hypothecate or
otherwise dispose of the Option otherwise than as permitted herein, or upon the
levy of any execution, attachment or similar process upon the Option, the Option
shall immediately terminate and become null and void.
10. Definitions. For the purposes of the Option, the words and phrases listed
below shall be defined as follows:
a. Approved Broker. Means one or more securities brokerage firms
designated by the Secretary of the Company from time to time.
b. Change of Control. A "Change of Control" shall be deemed to have
occurred if :
(i) any person (as used herein, the word "person" shall mean an
individual or an entity) or group of persons acting in concert
has acquired 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,
(ii) individuals who constituted the Board of Directors of the
Company on May 1, 1998 (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 May 1, 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 paragraph 10(a), considered as though such individual
were a member of the Incumbent Board; or
(iii) 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.
A Change of Control will also be deemed to have occurred as of fourteen
days prior to the date scheduled for a 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 Company, with appropriate adjustments as to the number and kind of
shares and prices.
c. Code. The Internal Revenue Code of 1986, as amended.
d. Date of Termination. The Participant's "Date of Termination" shall be
the first day occurring on or after the Grant Date on which
Participant's employment with the Company and all Related Companies
terminates for any reason; provided that a termination of employment
shall not be deemed to occur by reason of a transfer of the Participant
between the Company and a Related Company or between two Related
Companies; and further provided that the Participant's employment shall
not be considered terminated while the Participant is on a leave of
absence from the Company or a Related Company approved by the
Participant's employer or required by
Tiffany & Co. 1998 Employee Incentive Plan 1/21/99
Transferable Option: Terms of Stock Option Award -- Rev. II Page 3
<PAGE> 9
applicable law. If, as a result of a sale or other transaction, the
Participant's employer ceases to be a Related Company (and the
Participant's employer is or becomes an entity that is separate from
the Company), the occurrence of such transaction shall be treated as
the Participant's Date of Termination caused by the Participant being
discharged by the employer.
e. Disability. Except as otherwise provided by the Committee, the
Participant shall be considered to have a "Disability" if he or she is
unable to engage in any substantial gainful activity by reason of a
medically determinable physical or mental impairment, which impairment,
in the opinion of a physician selected by the Secretary of the Company,
is expected to have a duration of not less than 120 days.
f. Plan Definitions. 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.
g. Retirement. "Retirement" of the Participant 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 the Participant's employer.
h. Terminating Transaction. As used herein, the phrase "Terminating
Transaction" shall mean any one of the following:
(i) the dissolution or liquidation of the Company;
(ii) a reorganization, merger or consolidation of the Company; or
(iii) a reorganization, merger or consolidation of the Company with
one or more corporations as a result of which the Company goes
out of existence or becomes a subsidiary of another
corporation, or upon the acquisition of substantially all of
the property or more than eighty percent (80%) of the then
outstanding stock of the Company by another corporation.
i. Termination for Cause. "Termination for Cause" means termination of
employment pursuant to the conduct-based provisions of the employer's
policy on involuntary termination of employment by reason of a
Participant's action or willful omission, including without limitation,
the commission of a crime, fraud, willful misconduct or the
unauthorized use or disclosure of confidential information which has
resulted or is likely to result in damage to the Company or any of its
subsidiaries.
11. Heirs and Successors. The terms of the Option 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 Option by
filing written notice with the Secretary of the Company. In the event of the
Participant's death prior to the full exercise of the Option, the Option may be
exercised by such Beneficiary to the extent that it was exercisable on the
Participant's Termination Date and up until its Expiration Date. If the
Participant fails to designate a Beneficiary, or if the designated Beneficiary
dies before the Participant or before full exercise of the Option, the Option
may be exercised by Participant's estate to the extent that it was exercisable
on the Participant's Termination Date and up until its Expiration Date.
12. Administration. The authority to manage and control the operation and
administration of the Option shall be vested in the Committee, and the Committee
shall have all powers with respect to the Option as it has with respect to the
Plan. Any interpretation of the Option by the Committee and any decision made by
it with respect to the Option is final and binding.
Tiffany & Co. 1998 Employee Incentive Plan 1/21/99
Transferable Option: Terms of Stock Option Award -- Rev. II Page 4
<PAGE> 10
13. Plan Governs. Notwithstanding anything in this Agreement to the contrary,
the terms of the Option 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.
Tiffany & Co. 1998 Employee Incentive Plan 1/21/99
Transferable Option: Terms of Stock Option Award -- Rev. II Page 5
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.4.A
<SEQUENCE>4
<DESCRIPTION>STANDARD TERMS-1998 DIRECTORS OPTION PLAN
<TEXT>
<PAGE> 1
Exhibit 4.4a
Tiffany & Co.
Report on Form 10-K
Fiscal Year 1998
TIFFANY & CO.
a Delaware Corporation
(the "Company")
TERMS OF STOCK OPTION AWARD
(Transferable Non-Qualified Option)
under the
1998 DIRECTORS OPTION PLAN
(the "Plan")
Terms Adopted January 21, 1999
1. Introduction and Terms of Option. Participant has been granted a
Non-Qualified Stock Option Award (the "Option") to purchase shares of the
Company's Common Stock under the Plan by the Compensation Subcommittee of the
Board of Directors (the "Committee"). The name of the "Participant", the "Grant
Date", the number of "Covered Shares" and the "Exercise Price" per Share are
stated in the attached "Notice of Grant". The other terms and conditions of the
Option are stated in this document and in the Plan. Certain initially
capitalized words and phrases used in this document are defined in paragraph 10
below and elsewhere in this document.
2. Award and Exercise Price. Subject to the terms and conditions stated in this
document, the Option gives Participant the right to purchase the Covered Shares
from the Company at the Exercise Price.
3. Earliest Dates for Exercise - Cumulative Installments. Unless otherwise
provided in paragraphs 4, 5 or 6 below, the Option shall become exercisable
("mature") in cumulative installments according to the following schedule:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
As of the following The Option shall mature with the respect to
anniversary of the Grant the following percentage ("installment") of
Date: the Covered Shares:
- --------------------------------------------------------------------------------
<S> <C>
One-year anniversary 50%
- --------------------------------------------------------------------------------
Two-year anniversary 50%
- --------------------------------------------------------------------------------
</TABLE>
Once an installment of the Option matures, as provided in the above schedule, it
shall continue to be exercisable with all prior installments on a cumulative
basis until the Option expires.
4. Effect of Termination of Service as a Director. An installment of the Option
shall not mature if the Participant's Date of Termination occurs before the
anniversary of the Grant Date on which such installment was scheduled to mature.
Installments of the Option which mature prior to Participant's Date of
Termination will remain exercisable, subject to expiration as provided in
paragraph 6 below.
5. Effect of Change in Control. All installments of the Option shall mature upon
the date of a Change of Control unless the Participant's Date of Termination
occurs before the date of the Change of Control. The Committee reserves the
right to unilaterally amend the definition of "Change of Control" so as to
specify additional circumstances which shall be deemed to constitute a Change of
Control.
Tiffany & Co. 1998 Directors Option Plan: 1/21/99 Page 1
<PAGE> 2
6. Expiration. The Option, including matured installments thereof, shall not be
exercisable in part or in whole on or after the Expiration Date. The "Expiration
Date" shall be the earliest to occur of:
a. the ten-year anniversary of the Grant Date;
b. if the Participant's Date of Termination occurs by reason of
death, Disability or Retirement, the two-year anniversary of such
Date of Termination;
c. if the Participant's Date of Termination occurs for reasons other
than death, Disability or Retirement, the three month anniversary of
such Date of Termination.
7. Methods of Option Exercise. The Option may be exercised in whole or in part
as to any Shares that have matured by filing a written notice of exercise with
the Secretary of the Company at its corporate headquarters prior to the
Expiration Date. Such notice shall specify the number of Shares which the
Participant elects to purchase and shall be accompanied by either of the
following:
a. 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 amount of the Exercise Price for the Shares being
exercised; or
b. a copy of directions to, or a written acknowledgment from, an
Approved Broker that the Approved Broker has been directed to sell,
for the account of the owner of the Option, Shares (or a sufficient
portion of the Shares) acquired upon exercise of the Option,
together with an undertaking by the Approved Broker to remit to the
Company a sufficient portion of the sale proceeds to pay the
Exercise Price for the Shares exercised.
In the case of exercise via method (a), the exercise shall be deemed complete on
the Company's receipt of such notice and said check or draft. In the case of
exercise via method (b), the exercise shall be deemed complete on the trade date
of the sale. The Committee may approve other methods of exercise, as provided
for in the Plan, before the Option is exercised.
8. Withholding. Distributions on the exercise of the Option by Non-Employee
Directors are not subject to withholding of applicable taxes. The Participant
shall be responsible for payment of all applicable taxes. In the event that such
distributions become subject to withholding of applicable taxes, Participant
will be required to make such payment to Company at the time of exercise, in
addition to the payment set forth in Section 7 above.
9. Transferability. The Option is not transferable otherwise than by will or the
laws of descent and distribution or pursuant to a "domestic relations order", as
defined in the Code or Title I of the Employee Retirement Income Security Act or
the rules thereunder, 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.
Notwithstanding the foregoing, the Option may be transferred by the Participant
to (i) the spouse, children or grandchildren of the Participant (each an
"Immediate Family Member"), (ii) a trust or trusts for the exclusive benefit of
any or all Immediate Family Members, or (iii) a partnership in which any or all
Immediate Family Members are the only partners, provided that (x) there may be
no consideration paid or otherwise given for any such transfer, and (y)
subsequent transfer of the Option is prohibited otherwise than by will, the laws
of descent and distribution or pursuant to a domestic relations order. Following
transfer, the Option shall continue to be subject to the same terms and
conditions as were applicable immediately prior to transfer. The provisions of
paragraph 4 above shall continue to be applied with respect to the original
Participant following transfer and the Option shall be
Tiffany & Co. 1998 Directors Option Plan: 1/21/99 Page 2
<PAGE> 3
exercisable by the transferee only to the extent, and for the periods specified,
herein. Upon any attempt to transfer the Option otherwise than as permitted
herein or to assign, pledge, hypothecate or otherwise dispose of the Option
otherwise than as permitted herein, or upon the levy of any execution,
attachment or similar process upon the Option, the Option shall immediately
terminate and become null and void.
10. Definitions. For the purposes of the Option, the words and phrases listed
below shall be defined as follows:
a. Approved Broker. Means one or more securities brokerage firms
designated by the Secretary of the Company from time to time.
b. Change of Control. A "Change of Control" shall be deemed to have
occurred if :
(i) any person (as used herein, the word "person" shall mean an
individual or an entity) or group of persons acting in concert
has acquired 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,
(ii) individuals who constituted the Board of Directors of the
Company on May 1, 1998 (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 May 1, 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 paragraph 10(a), considered as though such individual
were a member of the Incumbent Board; or
(iii) 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.
A Change of Control will also be deemed to have occurred as of fourteen
days prior to the date scheduled for a 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 Company, with appropriate adjustments as to the number and kind of
shares and prices.
c. Code. The Internal Revenue Code of 1986, as amended.
d. Date of Termination. The Participant's "Date of Termination" shall
be the first day occurring on or after the Grant Date on which
Participant's service on the Board of Directors terminates for any
reason.
e. Disability. Except as otherwise provided by the Committee, the
Participant shall be considered to have a "Disability" if he or she
is unable to engage in any substantial gainful activity by reason of
a medically determinable physical or mental impairment, which
Tiffany & Co. 1998 Directors Option Plan: 1/21/99 Page 3
<PAGE> 4
impairment, in the opinion of a physician selected by the Secretary
of the Company, is expected to have a duration of not less than 120
days.
f. Non-Employee Director. A Non-Employee Director means a member
of the Board who is not at the time also an employee of the
Company or a Related Company.
g. Plan Definitions. 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.
h. Retirement. "Retirement" of the Participant shall mean the
occurrence of the Participant's Date of Termination of service on
the Board by reason of the Participant's retirement from the Board
at or after age 72 or the age provided in any mandatory Non-Employee
Director retirement plan subsequently adopted by the Company.
i. Terminating Transaction. As used herein, the phrase "Terminating
Transaction" shall mean any one of the following:
(i) the dissolution or liquidation of the Company;
(ii) a reorganization, merger or consolidation of the Company; or
(iii) a reorganization, merger or consolidation of the Company with
one or more corporations as a result of which the Company goes
out of existence or becomes a subsidiary of another
corporation, or upon the acquisition of substantially all of
the property or more than eighty percent (80%) of the then
outstanding stock of the Company by another corporation.
11. Heirs and Successors. The terms of the Option 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 Option by
filing written notice with the Secretary of the Company. In the event of the
Participant's death prior to the full exercise of the Option, the Option may be
exercised by such Beneficiary to the extent that it was exercisable on the
Participant's Termination Date and up until its Expiration Date. If the
Participant fails to designate a Beneficiary, or if the designated Beneficiary
dies before the Participant or before full exercise of the Option, the Option
may be exercised by Participant's estate to the extent that it was exercisable
on the Participant's Termination Date and up until its Expiration Date.
12. Administration. The authority to manage and control the operation and
administration of the Option shall be vested in the Committee, and the Committee
shall have all powers with respect to the Option as it has with respect to the
Plan. Any interpretation of the Option by the Committee and any decision made by
it with respect to the Option is final and binding.
13. Plan Governs. Notwithstanding anything in this Agreement to the contrary,
the terms of the Option 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.
Tiffany & Co. 1998 Directors Option Plan: 1/21/99 Page 4
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.3
<SEQUENCE>5
<DESCRIPTION>1986 STOCK OPTION PLAN
<TEXT>
<PAGE> 1
Exhibit 10.3
Tiffany & Co.
Report on Form 10-K
Fiscal Year 1998
TIFFANY & CO.
1986 STOCK OPTION PLAN
(As Amended through July 16, 1998)
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 six million four hundred eighteen thousand
(6,418,000) 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. Exercise and Payment. An option granted hereunder may be exercised, and
payment for the Common Stock purchased upon such exercise shall be made, as
follows. The option may be exercised in whole or in part as to any shares of
Common Stock that have become exercisable under such option by filing a written
notice of exercise with the Secretary of the Company at its corporate
headquarters prior to the date such option expires. Such notice shall specify
the number of shares which the option holder elects to purchase and shall be
accompanied by either of the following: (a) 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 amount of the exercise price for the shares
of Common Stock being exercised, plus any tax resulting from such exercise that
the Company, its parent or subsidiary is required to withhold, as computed by
Tiffany and Company's payroll department; or (b) a copy of directions to, or a
written acknowledgment from, an "Approved Broker" that the Approved Broker has
been directed to sell, for the account of the option holder, shares of Common
Stock (or a sufficient portion of such shares) acquired upon exercise of the
option, together with an undertaking by the Approved Broker to remit to the
Company a sufficient portion of the sale proceeds to pay the exercise price for
the shares exercised plus any tax resulting from such exercise that the Company,
its parent or subsidiary is required to withhold, as computed by Tiffany and
Tiffany & Co. 1986 Stock Option Plan - Amend 07/16/98 Page 1
<PAGE> 2
Company's payroll department. In the case of exercise via method (a), the
exercise shall be deemed complete on the Company's receipt of such notice and
said check or draft. In the case of exercise via method (b), the exercise shall
be deemed complete on the trade date of the sale. The term "Approved Broker"
means any one or more securities brokerage firms designated by the Secretary of
the Company from time to time. 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 such exercise, the optionee shall pay any tax resulting
from such exercise that the Company, its parent or subsidiary is required to
withhold, as computed by Tiffany and Company's payroll department, by check or
cash concurrently with 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. Except as hereinafter provided in this Section 6, any
option granted under this Plan shall by its terms be nontransferable by the
opionee otherwise than by will, the laws of descent and distribution or pursuant
to a "domestic relations order", as defined in the Internal Revenue Code or
Title I of the Employee Retirement Income Security Act or the rules thereunder,
and shall be exercisable, during the optionee's lifetime, only by the optionee.
The Committee (as defined below) may, in its discretion, authorize all or a
portion of the options to be granted to an optionee to be on terms which permit
transfer by such optionee to (i) the spouse, children or grandchildren of the
optionee (each an "Immediate Family Member"), (ii) a trust or trusts for the
exclusive benefit of any or all Immediate Family Members, or (iii) a partnership
in which any or all Immediate Family Members are the only partners, provided
that (x) there may be no consideration paid or otherwise given for any such
transfer (y) the stock option agreement pursuant to which such options are
granted must be approved by the Committee, and must expressly provide for
transferability in manner consistent with this Section 6, and (z) subsequent
transfer of transferred options shall be prohibited otherwise than by will, the
laws of descent and distribution or pursuant to a domestic relations order.
Following transfer, any such transferred options shall continue to be subject to
the same terms and conditions as were applicable immediately prior to transfer,
provided that for purposes of Section 11 hereof the term "optionee" shall be
deemed to refer to the transferee. Any period or state of continued employment
imposed as a condition to option exercise by the Committee in any stock option
agreement shall continue to be applied with respect to the original optionee
following transfer and each transferred option shall be exercisable by the
transferee only to the extent, and for the periods specified, in such stock
option agreement.
Tiffany & Co. 1986 Stock Option Plan - Amend 07/16/98 Page 2
<PAGE> 3
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 of 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 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;
Tiffany & Co. 1986 Stock Option Plan - Amend 07/16/98 Page 3
<PAGE> 4
(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.
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 (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
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
Tiffany & Co. 1986 Stock Option Plan - Amend 07/16/98 Page 4
<PAGE> 5
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 fiscal year of the Company to any
one eligible person hereunder shall be fifty thousand (50,000) shares.
Tiffany & Co. 1986 Stock Option Plan - Amend 07/16/98 Page 5
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.25
<SEQUENCE>6
<DESCRIPTION>AMENDED/RESTATED DEFERRED COMPENSATION AGREEMENT
<TEXT>
<PAGE> 1
Exhibit 10.25
Tiffany & Co.
Report on Form 10-K
Fiscal 1998
AMENDED AND RESTATED
DEFERRED COMPENSATION AGREEMENT
This Agreement was originally made effective the 31st day of December 1989
by and between Tiffany and Company, a New York corporation with its executive
offices and principal place of business at 727 Fifth Avenue, New York, New York
10022 ("Tiffany") and William R. Chaney who resides at 51 Shore Road, Clinton,
Connecticut ("Executive") and subsequently amended the 8th day of February 1999.
Whereas, Executive is employed by Tiffany in the capacity of Chairman of
the Board;
Whereas, Tiffany and Executive were parties to a Employment Agreement
dated as of the 1st of October, 1984 (the "Prior Agreement") the term of which
Prior Agreement has expired;
Whereas, under Section 3 of the Prior Agreement Executive was entitled,
upon termination of his employment with Tiffany, to distribution of certain
amounts maintained on the books of Tiffany as a liability to Executive (the
"Deferral Account");
Whereas, as of the last business day of the calendar quarter ended
September 30, 1989 the Deferral Account consisted of a liability to Executive of
$610,225.13 inclusive of accrued interest to that date computed in accordance
with the terms of the Prior Agreement; and
Whereas, Executive is not entitled to participate in the Tiffany and
Company Pension Plan.
NOW THEREFORE, in consideration of the foregoing premises and the
continued service of Executive to Tiffany, the parties hereby agree as follows:
1. Principal Credit to Deferral Account. While this Agreement remains in
effect, as of the last day of each calendar quarter Tiffany shall credit to the
Deferral Account $25,000, provided that no further amounts shall be credited to
the Deferral Account after December 31, 1998.
2. Interest Credit to Deferral Account. Through December 31, 1998, as of
the last day of each calendar quarter Tiffany shall credit to the Deferral
Account an amount determined by multiplying twenty-five (25%) percent of the
Interest Rate by the amount credited, or, if greater, the amount required to
have been credited, to the Deferral Account as of the first day of such calendar
quarter. In the event that the entire balance credited to the Deferral Account
is paid on a date other than the last day of a calendar quarter, interest
prorated on the basis of the Interest Rate, shall be credited to the Deferral
Account through the date of such payment. For the purposes of this Paragraph 2.,
the "Interest Rate" shall be the annual interest rate announced by The Bank of
New York as
<PAGE> 2
the interest rate at which it will lend on an unsecured basis to its
prime commercial borrowers and in effect as of the first business day of the
calendar quarter with respect to which interest is then being credited.
3. Nature of the Deferral Account. Amounts credited to the Deferral
Account shall be unfunded and unsecured liabilities of Tiffany to Executive,
payable only as provided in this Agreement, shall remain part of Tiffany's
general assets and shall be subject to claims of creditors of Tiffany in any
proceeding under the federal Bankruptcy Code to which Tiffany is subject as a
debtor and in any other proceeding before a court of competent jurisdiction in
which Tiffany is adjudicated or determined to be insolvent. Nothing contained in
this Agreement and no action taken pursuant to its provisions shall create or be
construed to create a trust of any kind or fiduciary relationship between
Tiffany and Executive. To the extent Executive or any person acquires a right to
receive payments from Tiffany under this Agreement, such right shall be no
greater than the right of any unsecured general creditor of Tiffany. Amounts
credited to the Deferral Account shall be payable as they become due under the
terms of this Agreement irrespective of any actual investments Tiffany may make
to meet its obligations or to accumulate funds. Neither Tiffany, nor any trustee
(in the event Tiffany elects to use a grantor trust to accumulate funds) shall
be obligated to purchase or maintain any asset or investment for the purpose of
meeting its obligations hereunder.
4. Designation of Beneficiary. Executive may, by an instrument in writing
delivered to Tiffany, designate one or more beneficiaries to receive the amounts
payable after his death under the terms of this Agreement and may change or
revoke such a designation by like notice; failing an effective designation of
such a beneficiary or beneficiaries, such amounts shall be payable on
Executive's death to the legal representative of Executive's estate.
5. Spendthrift Provision. The interest of Executive or any beneficiary
receiving payments hereunder shall not be subject to anticipation, nor to
voluntary or involuntary alienation until distribution is actually made. Neither
Executive nor any beneficiary shall have any right to commute, sell, transfer,
assign or otherwise convey the right to receive any payment under the terms of
this Agreement. Any such attempted assignment shall be considered null and void.
6. Distribution.
(a) In the event Executive dies before February 1, 1999,
distribution of amounts credited or required to have been credited
to the Deferral Account shall, as soon after Executive's death as
practicable, be made in a lump sum to Executive's beneficiary as
designated or otherwise determined pursuant to Paragraph 4. above.
(b) If Executive is living on February 1, 1999, distribution of
amounts credited to the Deferral Account shall be made as follows:
2
<PAGE> 3
(i) using an interest rate of 8% per annum, compounded monthly
(the "Discount Rate"), and Executive's life expectancy as of
February 1, 1999 expressed in integral years as derived from
the table entitled "Table V-Ordinary Life Annuities-One
Life-Expected Return Multiples," promulgated under section
1.72-9 of the Federal Income Tax Regulations, as in effect on
the date of such determination (the "Life Expectancy"), an
annuity payable monthly to Executive shall be calculated as
the monthly payment necessary to amortize the balance credited
to the Deferral Account (or required to have been credited to
such account) as of the date of such termination (the "Lump
Sum Value") by application of the Discount Rate to the Lump
Sum Value over the Life Expectance (the "Annuity Payment");
(ii) the Annuity Payment shall be paid by Tiffany to Executive
on the first day of each month if Executive is living on that
date commencing with March 1, 1999;
(iii) if, on the death of Executive, the aggregate of Annuity
Payments actually made to Executive is less than the Lump Sum
Value, any difference between the Lump Sum Value and such
aggregate of Annuity Payment shall be paid to Executive
beneficiary as designated or otherwise determined pursuant to
Paragraph 4. above.
7. Term and Termination Agreement. This Agreement shall remain in effect
until Tiffany has completed its payment obligations under Paragraph 6. above.
8. Adverse Determination. Notwithstanding anything stated to the contrary
in this Agreement, if at any time, as a result of a Final Determination, a tax
is payable by Executive, his beneficiary or his estate in respect of any amount
credited to the Deferral Account prior to payment under the terms of this
Agreement, then Tiffany shall pay to Executive the amount of such tax and the
Deferral Account balance, or, in the event Annuity Payments are then being paid,
future Annuity Payment, shall be reduced by the amount of such tax. For the
purposes of this Section 9., the term "Final Determination" means (i) an
assessment of tax by the United States Internal Revenue Service addressed to the
Executive or his beneficiary which is not timely appealed to the courts; (ii) a
final determination by the United States Tax Court or any other Federal Court,
the time for an appeal thereof having expired or been waived; or (iii) an
opinion by Tiffany's counsel, addressed to Tiffany and in form and substance
satisfactory to Tiffany, to the effect that amounts credited to the Deferral
Account are subject to Federal income tax to the Executive or his beneficiary
prior to payment under the terms of this Agreement. No Final Determination shall
be deemed to have occurred until Tiffany has actually received
3
<PAGE> 4
a copy of the assessment, court order or opinion which forms the basis thereof
and such other documents as it may reasonably request.
9. Prior Agreement Merged. All provisions in the Prior Agreement in
respect of the Deferral Account are hereby superceded and merged into this
Agreement. Executive and Tiffany agree that the amount credited to the Deferral
Account stated in the fourth Whereas clause above is correctly stated as of the
date therein stated.
10. Obligations to Survive Termination. The obligation of Tiffany to pay
amounts credited or required to be credited to the Deferral Account pursuant to
this Agreement and the provisions of Paragraph 3. through 6. and 8. through 12.
shall survive the termination of this Agreement.
11. Miscellaneous Provisions. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors, assigns,
heirs, estates, beneficiaries and personal representatives. Notices hereunder
shall be deemed effectively given: (a) when mailed, by registered mail, return
receipt requested, from a post office in the United States to the following
addresses:
If to Executive:
William R. Chaney
51 Shore Road
Clinton, Connecticut 06413
If to Tiffany:
Tiffany and Company
727 Fifth Avenue
New York, New York 10022
Attn: Legal Department
or (b) when hand delivered, in the case of notices to Executive, to Executive,
or, in the case of notices to Tiffany, to the Corporate Secretary of Tiffany.
This Agreement shall be governed by and construed, enforced and administered in
accordance with the laws of the State of New York. In the event either party
shall be required to resort to judicial process in order to successfully enforce
this agreement in accordance with its terms or otherwise to remedy a default
under this Agreement, the defaulting party shall pay to the non-defaulting party
the latter's attorneys' fees and other costs of enforcement. In the event that
any sums required to be paid hereunder are not paid within ten (10) days of
written demand for payment, Executive shall be entitled to be paid interest at
the Interest Rate by Tiffany upon such unpaid amount until such amount is paid
in full.
12. Continuance of Employment. This Agreement shall not confer upon Executive
any right with respect to continuance of employment with Tiffany, nor shall it
interfere in
4
<PAGE> 5
any way with the right of Tiffany to terminate his employment at any time with
our without cause.
IN WITNESS WHEREOF, this amended and restated Agreement has been duly executed
by the parties hereto effective as of January 31, 1999.
Tiffany and Company
("Tiffany")
BY:
-------------------------------------
James N. Fernandez
Executive Vice President - Chief
Financial Officer
-------------------------------------
William R. Chaney
("Executive")
5
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.106
<SEQUENCE>7
<DESCRIPTION>AMENDED/RESTATED EXECUTIVE DEFERRAL PLAN
<TEXT>
<PAGE> 1
Exhibit 10.106
Tiffany & Co.
Report on Form 10-K
Fiscal 1998
TIFFANY AND COMPANY
AMENDED AND RESTATED
EXECUTIVE DEFERRAL PLAN
WHEREAS, effective October 1, 1989, Tiffany and Company, a New York corporation,
established an unfunded executive deferral plan for the benefit of a select
group of management or highly compensated employees;
WHEREAS, effective October 1, 1998, Tiffany and Company amended such plan to
permit additional executives and the directors of its parent corporation,
Tiffany & Co., a Delaware corporation, to participate and to provide certain
additional alternatives with respect to compensation deferred in accordance with
such plan; and
WHEREAS, the purpose of the plan is to provide selected executives and directors
an opportunity to defer a portion of their compensation in a manner best suited
to each participant's individual needs.
NOW, THEREFORE, to carry the above intentions into effect, Tiffany and Company
does enter into this Amended and Restated Plan effective October 1, 1998.
This Plan shall be known as the
TIFFANY AND COMPANY
EXECUTIVE DEFERRAL PLAN
10/1/98
<PAGE> 2
TABLE OF CONTENTS
Article Section Page
I DEFINITIONS
.................................................. 1
II MEMBERSHIP IN THE PLAN
2.1 Commencement of Participation ............................. 6
2.2 Procedure For and Effect of Admission...................... 6
2.3 Cessation of Participation................................. 6
III PLAN CONTRIBUTIONS
3.1 Executive Deferral Contribution ........................... 7
3.2 Rules Governing Executive Deferral Contributions........... 7
IV PARTICIPANT'S ACCOUNTS
4.1 Establishment of Accounts.................................. 9
4.2 Deferred Benefit Allocation................................ 9
4.3 Suballocation within the Deferred Benefit Accounts....... 9
4.4 Irrevocable Benefit Allocation............................. 11
4.5 Directed Valuation of Deferred Benefit Accounts............ 11
4.6 Administration of Investments.............................. 12
4.7 Valuation of Deferred Benefit Accounts..................... 12
4.8 Investment Obligation of the Employer...................... 12
4.9 Change of Funds . . . ..................................... 13
V VESTING
5.1 Vesting Schedule........................................... 13
VI BENEFITS/DISTRIBUTIONS
6.1 Termination of Service..................................... 13
6.2 Retirement Account - Form of Payment....................... 14
- Page i -
10/1/98
<PAGE> 3
TABLE OF CONTENTS
Article Section Page
6.3 Education Account.......................................... 17
6.4 Fixed Period Benefit Account............................... 18
6.5 Disability Hardship Distribution........................... 18
6.6 Tax Withholding............................................ 19
6.7 Withdrawal Option.......................................... 19
VII ADMINISTRATION
7.1 Appointment of Administrator............................... 20
7.2 Administrator's Responsibilities........................... 20
7.3 Records and Accounts....................................... 20
7.4 Administrator's Specific Powers and Duties................. 20
7.5 Employer's Responsibility to Administrator................. 21
7.6 Liability.................................................. 21
7.7 Procedure to Claim Benefits................................ 22
VIII AMENDMENT AND TERMINATION
8.1 Plan Amendment............................................. 23
8.2 No Premature Distribution.................................. 23
8.3 Termination of the Plan.................................... 23
8.4 Effect of Termination . ................................... 23
8.5 Adverse Determination ..................................... 23
IX MISCELLANEOUS
9.1 Supplemental Benefits...................................... 24
9.2 Governing Law.............................................. 24
9.3 Jurisdiction............................................... 24
9.4 Binding Terms.............................................. 25
9.5 Spendthrift Provision...................................... 25
9.6 No Assignment Permitted.................................... 25
9.7 Construction............................................... 25
9.8 No Employment Agreement.................................... 25
- Page ii -
10/1/98
<PAGE> 4
ARTICLE I
DEFINITIONS
1.1 "Administrator" means the individual appointed to administer the Plan
pursuant to Article VII.
1.2 "Base Compensation" means a Participant's salary and wages, including
Executive Deferral Contributions made hereunder and any pretax elective
deferrals to any Employer sponsored retirement savings plan or cafeteria
plan, qualified pursuant to Section 401(k) or Section 125 of the Code, but
excluding bonuses and overtime, all other Employer contributions to
benefit plans, remuneration attributable to Employer sponsored stock
option plans and all other forms of remuneration or reimbursement.
1.3 "Beneficiary" means the person, persons, trust or other entity, designated
by written revocable designation filed with the Administrator by the
Participant to receive payments in the event of the Participant's death.
If a designated Beneficiary does not survive the Participant or if no
Beneficiary is designated as provided above, the Beneficiary shall be the
legal representative of the Participant's estate. If a designated
Beneficiary survives the Participant but dies before payment in full of
benefits under this Plan has been made, the legal representative of such
Beneficiary's estate shall become the Beneficiary. References to a
Participant in this Plan in connection with payments hereunder shall also
refer to such Participant's Beneficiary unless the context clearly
requires otherwise.
1.4 "Benefit Distribution Date" means a future date selected by a Participant
during the applicable Enrollment Period within guidelines established by
the Administrator, as adjusted as permitted in this Plan, on which the
Participant shall be entitled to a benefit pursuant to this Plan equal to
all or a designated portion of the balance of his Fixed Period Benefit
Account.
1.5 "Bonus Compensation" means cash compensation paid to a Participant,
excluding Base Compensation, under the Employer's bonus program or
programs, as such may exist and be modified from time to time, and payable
to a Participant following the conclusion of the Employer's fiscal year in
respect of service performed at any time during such prior fiscal year.
- Page 1 -
10/1/98
<PAGE> 5
1.6 "Committee" means the Board of Directors of Tiffany, which shall have
authority over this Plan.
1.7 "Compensation" means Base Compensation, Bonus Compensation and Directors
Compensation in the aggregate.
1.8 "Code" means the Internal Revenue Code of 1986, as amended from time to
time.
1.9 "Deferral Agreement" means a written agreement between a Participant and
the Employer, whereby a Participant agrees to defer a portion of his
Compensation and the Employer agrees to provide benefits pursuant to the
provisions of this Plan.
1.10 "Deferred Benefit Accounts" mean the Retirement Account, Education Account
and the Fixed Period Benefit Account.
1.11 "Determination Date" shall mean December 31, March 31, June 30 and
September 30 of each calendar year and, for each Participant, his date of
death, Retirement, or other termination of employment with Employer and,
with respect to Independent Directors only, termination of service as a
Director.
1.12 "Director" means a member of Parent's Board of Directors.
1.13 "Directors Compensation" means a Director's annual retainer and any
incremental annual retainer paid or payable by Parent to Director for
service as a Director, including any per-meeting-attended compensation,
but excluding Parent's contributions to benefit and retirement plans,
remuneration attributable to Parent-sponsored stock option plans and all
other forms of remuneration or reimbursement.
- Page 2 -
10/1/98
<PAGE> 6
1.14 "Disability" means an illness or injury which prevents a Participant from
performing the Participant's occupation. Disability shall be determined in
a uniform manner by the Administrator.
1.15 "Education Account" means a Deferred Benefit Account established pursuant
to Section 4.1.
1.16 "Effective Date" means October 1, 1989.
1.17 "Eligible Student" means an individual who is a relative of a Participant
and who is younger than the age of 14 when a subaccount is initially
established, pursuant to Section 4.7.
1.18 "Eligible Employees" means Directors, all officers of the Employer,
"director"-level employees of Employer, and such other management and
other highly compensated employees of the Employer as identified and
approved by the Committee.
1.19 "Employer" means Tiffany, Parent and any successor organization, or any
other business entity which adopts this Plan with consent of the Board of
Directors of Parent.
1.20 "Enrollment Period" means the 15 day period ending on October 15, 1989 for
the first Plan Year, and thereafter the month of November prior to each
subsequent Plan Year (except for the Plan Year ending December 31, 1999,
for which the Enrollment period shall be the period commencing November 1,
1998 and ending December 15, 1998) or, with respect to a person who
becomes an Eligible Employee during the course of a Plan Year in respect
of such Plan Year, the thirty day period following the date he becomes an
Eligible Employee.
1.21 "Executive Deferral Contribution" means the Plan contribution described in
Section 3.2.
1.22 "Fixed Period Benefit Account" means a Deferred Benefit Account
established pursuant to Section 4.1(C).
- Page 3 -
10/1/98
<PAGE> 7
1.23 "Independent Director" means a Director who is not an employee of Employer
at the time Participation in this Plan commences.
1.24 "Investment Fund" or "Fund" means any one of the investment funds
described in Schedule 4.5 which shall serve as means to measure value
increases or decreases with respect to a Participant's Deferred Benefit
Accounts.
1.25 "Parent" means Tiffany & Co., a Delaware corporation, and any successor
organization.
1.26 "Participant" means any Eligible Employee who has met the conditions for
participation as set forth in Article II.
1.27 "Permitted Retirement Age" means that date on which the Participant has
attained age 55, provided that if the Participant is an Independent
Director the Permitted Retirement Age for such Participant shall be his
age on the date his participation in the Plan commenced.
1.28 "Plan" means Tiffany and Company Executive Deferral Plan as described in
this instrument, as amended from time to time.
1.29 "Plan Year" means the period from the November 1, 1989 through December
31, 1989 and thereafter, the twelve (12) consecutive month period
beginning on each January 1 and ending on each December 31.
1.30 "Retirement" means any severance from full-time employment by a
Participant after attaining his Permitted Retirement Age, provided that if
the Participant is an Independent Director, Retirement shall mean any
cessation of service as a Director after attaining his Permitted
Retirement Age. Employment shall be deemed to be "full-time" provided that
the Participant is employed by Employer on a salaried basis.
- Page 4 -
10/1/98
<PAGE> 8
1.31 "Termination of Service" means, with respect to a Participant who is not
an Independent Director, a termination of employment with Employer. For
purposes of this definition, a Participant on a leave of absence
authorized by Employer or required by applicable law shall be deemed to
remain employed. With respect to a Participant who is an Independent
Director, a "Termination of Service" shall occur when such Independent
Director ceases to be a Director.
1.32 "Tiffany" means Tiffany and Company, a New York corporation.
1.33 "Retirement Account" means a Deferred Benefit Account established pursuant
to Section 4.1.
1.34 "Vested" means that portion of a Participant's Deferred Benefit Accounts
to which the Participant has a nonforfeitable right as defined in Section
5.1.
- Page 5 -
10/1/98
<PAGE> 9
ARTICLE II
MEMBERSHIP IN THE PLAN
2.1 Commencement of Participation. Each Eligible Employee who is an Eligible
Employee at any time during the Enrollment Period for any Plan Year shall
be eligible to become a Participant in the Plan as of the first day of
such Plan Year. Notwithstanding the foregoing, but subject to the
limitation expressed in Subsection 3.2 F below, each employee or Director
who first becomes an Eligible Employee throughout the course of the Plan
Year shall be eligible to become a Participant with respect to said Plan
Year as of the first day of the month that is at least thirty (30) days
after he is designated as an Eligible Employee.
2.2 Procedure For and Effect of Admission. Each individual who becomes
eligible for admission to participate in this Plan shall complete such
forms and provide such data as are reasonably required by the Employer as
a condition of such admission. By becoming a Participant, each individual
shall for all purposes be deemed conclusively to have assented to the
provisions of this Plan and all amendments hereto.
2.3 Cessation of Participation. A Participant shall cease to be a Participant
the earlier of:
A. The date on which the Plan terminates, or
B. The date on which he incurs a Termination of Service.
Notwithstanding the foregoing, a former active Participant will be deemed
a Participant, for all purposes of this Plan except with respect to
contributions as described in Article III, as long as such former active
Participant retains a benefit pursuant to the terms of Article VI.
- Page 6-
10/1/98
<PAGE> 10
ARTICLE III
PLAN CONTRIBUTIONS
3.1 Executive Deferral Contribution. For each Plan Year, each Eligible
Employee may, by timely filing a Deferral Agreement with the
Administrator, authorize the Employer to reduce his Base Compensation, his
Bonus Compensation, his Directors Compensation or any combination of the
foregoing, by fixed percentages, and to have corresponding fixed dollar
amounts credited to his Deferred Benefit Accounts in accordance with
Section 4.2. Credit to Deferred Benefit Accounts shall be made in equal
installments for each pay period in respect of Base Compensation
reductions and in a lump sum for each payment in respect of Bonus
Compensation and Directors Compensation reductions. Subject to the rules
set forth in Section 3.2 below, each Eligible Employee shall file a
Deferral Agreement with the Administrator during the applicable Enrollment
Period for each Plan Year.
3.2 Rules Governing Executive Deferral Contributions.
A. Throughout any one Plan Year, a Participant may defer all or any
portion of his Compensation, except that a Participant may not defer
less than $2,000 (except the first Plan Year of November 1, 1989 to
December 31, 1989 in which a Participant may defer no less than
$500, or except Plan Years in which the Participant elects not to
defer any portion of his Compensation) or more than 50% of Base
Compensation.
B. The amount of Compensation that a Participant elects to defer shall
be credited to the Participant's Deferred Benefit Accounts during
each Plan Year on or about that date on which the Participant would
have, but for his deferral election, have been paid such
Compensation.
C. An election to defer Compensation pursuant to this Plan is
irrevocable and shall continue until the earlier of: (i) the
Participant's Termination of Service, or (ii) the end of the Plan
Year for which the deferral is effective.
- Page 7 -
10/1/98
<PAGE> 11
D. In respect of Bonus Compensation or Directors Compensation, an
election to defer must be made in the Enrollment Period last
occurring prior to the start of Employer's fiscal year for which
such Bonus Compensation is paid; provided, however, that in respect
of Bonus Compensation which may become payable in respect of
Employer's fiscal year ending January 31, 1990, such election must
be made, if at all, during the Enrollment period ending on October
15, 1989, and, if made, such election may only be made with respect
to that portion of Bonus Compensation which may exceed the bonus
target or base bonus amount communicated to the Eligible Employee
making such election prior to the making of such election. In the
event such an election is made in respect of Bonus Compensation for
Employer's fiscal year ending January 31, 1990, up to 100% of such
excess Bonus Compensation may be deferred, provided that the amount
so elected shall not exceed 25% of Bonus Compensation payable in
respect of such Fiscal Year.
E. Except as expressly provided in subsection D. above, each Eligible
Employee shall file a Deferral Agreement with the Administrator
prior to the date on which the Participant commences the performance
of services to earn the Compensation deferred hereunder.
F. No person who becomes an Eligible Employee during the course of
Employer's Fiscal Year may file a Deferral Agreement with respect to
Bonus Compensation or Directors Compensation earned in respect of
such fiscal year except as expressly provided in subsection D.
above.
- Page 8 -
10/1/98
<PAGE> 12
ARTICLE IV
PARTICIPANT'S ACCOUNTS
4.1 Establishment of Accounts. The following Deferred Benefit Accounts shall
be established with respect to each Participant:
A. Retirement Account,
B. Education Account, and
C. Fixed Period Benefit Account.
All contributions on behalf of a Participant shall be deposited to the
appropriate Deferred Benefit Account, in accordance with Section 4.2.
4.2 Deferred Benefit Allocation. Each Eligible Employee shall submit to the
Administrator, before the close of the Enrollment Period for each Plan
Year, a written statement specifying the Eligible Employee's allocation of
anticipated contributions with respect to his Deferred Benefit Accounts.
4.3 Suballocation Within the Deferred Benefit Accounts.
A. In the event a Participant shall allocate a portion of his
anticipated contributions to his Retirement Account, he may, during
each applicable Enrollment Period, direct that portion of his -
contributions to (i) a lump sum subaccount or to (ii) one of three
installment subaccounts. Each Participant may have only one such
Retirement subaccount at any one time. Participant may direct the
transfer of the balance in one such subaccount to another such
subaccount at any time prior to the Participant's Retirement,
provided that no such transfer may be made during the 12-month
period immediately prior to the Participant's Retirement, and, if
such transfer is
- Page 9 -
10/1/98
<PAGE> 13
subsequently determined to have been made during such 12-month
period, such transfer shall be void and without force or effect and
the last prior valid selection of a Retirement subaccount shall
govern. The lump sum subaccount will be paid out in a lump sum
within ninety (90) days of Retirement, and the installment
subaccount will be paid in five (5), ten (10) or fifteen (15) annual
installments, all pursuant to Section 6.1. In the absence of such
designation, contributions for that Plan Year will be paid out in a
lump sum.
B. In the event a Participant shall allocate a portion of his
anticipated contributions to his Education Account, the Participant
may further allocate amongst subaccounts on behalf of Eligible
Students. Said allocation shall be made in writing prior to the
beginning of the Plan Year on Participant's Deferral Agreement, or
such other forms as are required by the Administrator. In the
absence of such suballocation, all contributions to the
Participant's Education Account shall be equally allocated among the
Participant's Education subaccounts. A Participant's election
pursuant to Section 4.5 shall apply uniformly to each subaccount. A
Participant, in any one Plan Year, may not allocate less than $1,000
(except the first Plan Year of October 1, 1989 to December 31, 1989
in which a Participant may allocate no less than $250, or except
Plan Years in which the Participant elects not to defer any portion
of his Compensation) to any one Education subaccount.
C. In the event a Participant shall allocate a portion of his
anticipated contributions to his Fixed Period Benefit Account, the
Participant may further allocate amongst subaccounts differentiated
by Benefit Distribution Dates. Said allocation shall be made in
writing prior to the beginning of the Plan Year on Participant's
Deferral Agreement, or such other forms as are required by the
Administrator, provided that each Participant shall have a one-time
option in respect of each of his Benefit Distribution Dates to
change such Benefit Distribution Date to a date subsequent to such
original Benefit Distribution Date, such option to be exercised, if
at all, at least one year prior to the original Benefit Distribution
Date by written notice to the Administrator. In the absence of such
suballocation, all contributions to the Participant's Fixed Period
Benefit Account
- Page 10 -
10/1/98
<PAGE> 14
shall be equally allocated among Participant's subaccounts.
Notwithstanding, at any point in reference, a Participant may not
have more than two (2) such subaccounts. A Participant's election
pursuant to Section 4.5 shall apply uniformly to each subaccount. A
Participant, in any one Plan Year, may not allocate less than $1,000
(except the first Plan Year of October 1, 1989 to December 31, 1989
in which a Participant may allocate no less than $250, or except
Plan Years in which the Participant elects not to defer any portion
of his Compensation) to any one Fixed Period subaccount. A
Participant shall not elect a Benefit Distribution Date with respect
to the Fixed Period Benefit Account which occurs prior to
twenty-four (24) months from the date on which the first
contribution to such subaccount is first credited.
4.4 Irrevocable Benefit Allocation. Once an Eligible Employee has allocated
anticipated contributions under the Plan and the Plan Year has begun, he
may not modify, alter, amend or revoke said allocations. Notwithstanding,
a Participant may, prior to the commencement of a new Plan Year, elect to
modify, alter, amend or revoke his future allocations to his Deferred
Benefit Accounts to the extent the Administrator shall provide, effective
the first day of such new Plan Year.
4.5 Directed Valuation of Deferred Benefit Accounts. As provided herein, a
participant may direct that his Deferred Benefit Accounts be valued, in
accordance with Section 4.7, as if the account were invested in one or
more of the Investment Funds listed in Schedule 4.5 attached. The
Committee may, from time to time, add additional Investment Funds to
Schedule 4.5. A Participant shall submit to the Plan Administrator in
writing his investment selection for evaluation purposes. The Participant
may select one or more investment funds in multiples of 5%. A Participant
may make a separate selection with respect to each Deferred Benefit
Account. Investment Fund elections may be made four (4) times in a Plan
Year at any time.
- Page 11 -
10/1/98
<PAGE> 15
4.6 Administration of Investments. The investment gain or loss with respect to
contributions made to the Deferred Benefit Accounts on behalf of a
Participant shall continue to be determined in the manner selected by the
Participant, pursuant to Section 4.5, until a new designation is filed
with the Plan Administrator. If any Participant fails to file a
designation, he shall be deemed to have designated the first Investment
Fund listed in Schedule 4.5 attached. A designation filed by a Participant
changing his Investment Funds shall apply to future contributions and/or
amounts already accumulated in his Deferred Benefit Accounts. A
Participant may change his investment selection four (4) times, at any
time, throughout the course of each Plan Year.
4.7 Valuation of Deferred Benefit Accounts. The Deferred Benefit Accounts of
each Participant shall be valued, on any date prior to complete
distribution of all benefits due Participant under this Plan, based upon
the performance of the Investment Fund(s) selected by the Participant.
Such valuation shall reflect the net asset value expressed per share of
the designated Investment Fund(s). The fair market value of an Investment
Fund shall be determined by the Administrator. It shall represent the fair
market value of all securities or other property held for the respective
fund, plus cash and accrued earnings, less accrued expenses and proper
charges against the fund. Each Deferred Benefit Account shall be valued
separately. A valuation summary shall be prepared on each Determination
Date.
4.8 Investment Obligation of the Employer. Benefits are payable as they become
due irrespective of any actual investments the Employer may make to meet
its obligations. Neither the Employer, nor any trustee (in the event the
Employer elects to use a grantor trust to accumulate funds) shall be
obligated to purchase or maintain any asset, and any reference to
investments or Investment Funds is solely for the purpose of computing the
value of benefits. To the extent a Participant or any person acquires a
right to receive payments from the Employer under this Plan, such right
shall be no greater than the right of any unsecured creditor of the
Employer.
- Page 12 -
10/1/98
<PAGE> 16
4.9 Change of Funds. In the event that any of the Investment Funds designated
in Schedule 4.5 attached materially changes its investment objectives,
adopts a plan of liquidation, ceases to report its net asset values or
otherwise ceases to exist, the Employer may amend this Plan by designating
new or additional funds for the purposes of Section 4.7 and each
Participant shall redirect the valuation of his or her Deferred Benefit
Accounts effective with the date of such amendment.
ARTICLE V
VESTING
5.1 Vesting Schedule. A Participant shall have a fully Vested interest with
respect to Executive Deferral Contributions and Investment Fund
performance credited to his Deferred Benefit Accounts, in all instances.
ARTICLE VI
BENEFITS/DISTRIBUTIONS
6.1 Termination of Service.
A. If a Participant incurs a Termination of Service for any reason, the
Employer shall pay to the Participant, or to the Participant's
Beneficiary if applicable, a benefit equal to the value of
Participant's Deferred Benefit Accounts, determined pursuant to
Section 4.7 and Section 5.1.
B. With the exception of funds allocated to the Participant's
Retirement Account, if the Participant incurs a Termination of
Service for any reason, the benefit hereunder, including funds
allocated to the Participant's Education Account and Fixed Period
Benefit Account, shall be paid to the Participant or the
Participant's beneficiary, as applicable, as a lump sum within
ninety (90) days of the date of such Termination of Service.
- Page 13 -
10/1/98
<PAGE> 17
C. With respect to funds allocated to the Participant's Retirement
Account, if the Participant incurs a Termination of Service for any
reason other than his Retirement or Disability, the benefit
hereunder allocated to such Retirement Account, shall be paid to the
Participant or the Participant's beneficiary, as applicable, as a
lump sum within ninety (90) days of the date of such Termination of
Service.
D. With respect to funds allocated to the Participant's Retirement
Account, if the Participant incurs a Termination of Service by
reason of his Retirement, the benefit hereunder allocated to such
Retirement Account, shall be paid to the Participant or the
Participant's beneficiary, as provided in Section 6.2 below.
E. With respect to funds allocated to the Participant's Retirement
Account, if the Participant incurs a Termination of Service by
reason of his Disability, the Participant shall remain as a
Participant in the Plan but shall be ineligible for further
contributions to his Deferred Benefit Accounts as described in
Article III. In that circumstance, funds allocated to the
Participant's Retirement Account shall be paid to him commencing on
his 65th birthday in the form he elected pursuant to Section 4.A
6.2 Retirement Account - Form of Payment:
A. If the Participant's Termination of Service shall occur as a result
of Participant's Retirement or Disability, and the Participant has
elected deferrals to a lump sum subaccount under Section 4.3A, the
value of such subaccount is to be paid to the Participant as soon as
administratively possible following his Retirement, or, in the case
of Disability, following his 65th birthday. If the Participant's
Termination of Service shall occur as a result of Participant's
Retirement or Disability, and the Participant has elected deferrals
to an installment subaccount under Section 4.3A, the benefit in
respect of such subaccount shall
- Page 14 -
10/1/98
<PAGE> 18
be paid by Employer to Participant in five, ten or 15 annual
installments beginning as soon as administratively possible after
his Retirement, or in the case of Disability, after his 65th
birthday, and with each subsequent annual installment to be paid on
or before February 1 of each subsequent year, determined as follows:
Five Annual Installments
<TABLE>
<CAPTION>
Benefit Year Percentage of Installment Retirement Account
<S> <C>
1 (Year of Retirement or 65th birthday) 20%
2 25%
3 33%
4 50%
5 100%
</TABLE>
Ten Annual Installments
<TABLE>
<CAPTION>
Benefit Year Percentage of Installment Retirement Account
<S> <C>
1 (Year of Retirement or 65th birthday) 10%
2 11%
3 13%
4 14%
5 17%
6 20%
7 25%
8 33%
9 50%
10 100%
</TABLE>
- Page 15 -
10/1/98
<PAGE> 19
Fifteen Annual Installments
<TABLE>
<CAPTION>
Benefit Year Percentage of Installment Retirement Account
<S> <C>
1 (Year of Retirement or 65th birthday) 7%
2 7%
3 8%
4 8%
5 9%
6 10%
7 11%
8 12%
9 12%
10 17%
11 20%
12 25%
13 33%
14 50%
15 100%
</TABLE>
In the event a Participant receiving such installments dies before
all installments are paid, Beneficiary shall receive the balance
remaining in such subaccount in a lump sum.
B. Notwithstanding any provision to the contrary, if at the time
benefits are to commence, the Participant's Retirement Account has a
value less than $50,000, the Participant's benefit hereunder shall
be paid to the Participant as a lump sum within ninety (90) days of
termination.
- Page 16 -
10/1/98
<PAGE> 20
6.3 Education Account.
A. If a Participant does not incur a Termination of Service prior to
January 1 of the calendar year in which an Eligible Student of the
Participant attains a Determination Age, the Employer shall pay to
the Participant a benefit, as soon as administratively possible,
determined as follows:
<TABLE>
<CAPTION>
Eligible Student's Percentage of Eligible
Determination Age Student's Subaccount
<S> <C>
18 25%
19 33%
20 50%
21 100%
</TABLE>
B. If a Participant should incur a Termination of Service for any
reason while having a balance in his Education Account, the Vested
portion of the balance shall be distributed to the Participant, or
Beneficiary if applicable, in accordance with Section 6.1.
C. Notwithstanding any provision to the contrary, if, on the January 1
of the calendar year in which an Eligible Student of Participant
attains age 18, the Eligible Student's subaccount has a balance of
less than $20,000, then said balance shall be paid to the
Participant as soon as administratively possible.
D. Each Participant shall have a one-time option in respect of each of
such Participant's Eligible Students, to increase each of the
Determination Ages for such Eligible Student by one or more full
years, such option to be exercised, if at all, by written notice
given to the Administrator no less than one year earlier than the
earliest original Determination Age for such Eligible Student.
- Page 17 -
10/1/98
<PAGE> 21
6.4 Fixed Period Benefit Account.
A. If a Participant does not incur a Termination of Service prior to a
designated Benefit Distribution Date, the Employer shall pay to the
Participant a benefit equal to the balance of the Participant's
subaccount which has been earmarked with respect to said Benefit
Distribution Date.
B. If a Participant should incur a Termination of Service for any
reason while having a balance in his Fixed Period Benefit Account,
the balance shall be distributed to the Participant, or Beneficiary,
if applicable, in accordance with Section 6.1
6.5 Disability Hardship Distribution.
A. In the event of a Participant's Disability, a Participant may apply
in writing to the Administrator for withdrawal against his Deferred
Benefit Accounts at any time. The withdrawal shall only be allowed
at the discretion of the Administrator and for purposes which
constitute an "Unforeseen Emergency". As used herein, an Unforeseen
Emergency means a severe financial hardship to the Participant
resulting from the Disability. The Administrator will assess if
circumstances constitute an Unforeseen Emergency based upon the
facts of each case. However, the withdrawal shall not be allowed to
the extent that such hardship is or may be relieved:
1. Through reimbursement or compensation by insurance or
otherwise, or
2. By liquidation of the Participant's assets, to the extent that
liquidation of such assets would not itself constitute a
severe financial hardship.
If approved, the withdrawal shall be equal to the lesser of (i) the
amount required to be distributed to meet the need caused by the
Unforeseen Emergency, or (ii) the aggregate balance of the
Participant's Deferred Benefit Accounts.
- Page 18 -
10/1/98
<PAGE> 22
B. To the extent a withdrawal shall be permitted pursuant to this
Section 6.5, the Participant's Deferred Benefit Accounts shall be
correspondingly reduced in the following order:
1. The Fixed Period Benefit Account,
2. The Education Account,
3. The Retirement Account.
6.6 Tax Withholding. To the extent required by the law in effect at the time
benefits are distributed pursuant to this Article VI, the Employer or its
agents shall withhold any taxes required by the federal or any state or
local government from payments made hereunder.
6.7 Withdrawal Option. Notwithstanding anything stated to the contrary in this
Plan, each Participant shall have the option to withdraw and receive a
distribution of all, but not less than all, of his entire balance in all
Deferred Benefit Accounts subject to the following conditions:
A. as consideration for the withdrawal, Employer shall reduce the balance
in each of Participant's Deferred Benefit accounts by ten percent (10%)
immediately prior to permitting such withdrawal and distribution, the
benefit of such reduction to accrue to Participant's Employer except in
the case of an Independent Director, in which case such reduction shall
accrue to the benefit of Parent;
B. as further consideration for the withdrawal, Participant shall not be
entitled to make further deferrals into the Plan until the start of the
second Plan Year to commence following the Plan Year of such withdrawal.
- Page 19 -
10/1/98
<PAGE> 23
ARTICLE VII
ADMINISTRATION
7.1 Appointment of Administrator. Tiffany shall appoint, on behalf of all
Participants, an Administrator. The Administrator may be removed by
Tiffany at any time and he may resign at any time by submitting his
resignation in writing to Tiffany. A new Administrator shall be appointed
as soon as possible in the event that the Administrator is removed or
resigns from his position. Any person so appointed shall signify his
acceptance by filing a written acceptance with Tiffany.
7.2 Administrator's Responsibilities. The Administrator is responsible for the
day to day administration of the Plan. He may appoint other persons or
entities to perform any of his fiduciary functions. Such appointment shall
be made and accepted by the appointee in writing and shall be effective
upon the written approval of Tiffany. The Administrator and any such
appointee may employ advisors and other persons necessary or convenient to
help him carry out his duties including his fiduciary duties. The
Administrator shall have the right to remove any such appointee from his
position. Any person, group of persons or entity may serve in more than
one fiduciary capacity.
7.3 Records and Accounts. The Administrator shall maintain or shall cause to
be maintained accurate and detailed records and accounts of Participants
and of their rights under the Plan and of all investments, receipts,
disbursements and other transactions. Such accounts, books and records
relating thereto shall be open at all reasonable times to inspection and
audit by the Employer and by persons designated thereby.
7.4 Administrator's Specific Powers and Duties. In addition to any powers,
rights and duties set forth elsewhere in the Plan, the Administrator shall
have the following discretionary powers and duties:
A. To adopt such rules and regulations consistent with the provisions
of the Plan;
- Page 20 -
10/1/98
<PAGE> 24
B. To enforce the Plan in accordance with its terms and any rules and
regulations he establishes;
C. To maintain records concerning the Plan sufficient to prepare
reports, returns and other information required by the Plan or by
law;
D. To construe and interpret the Plan and to resolve all questions
arising under the Plan;
E. To direct the Employer to pay benefits under the Plan, and to give
such other directions and instructions as may be necessary for the
proper administration of the Plan;
F. To be responsible for the preparation, filing and disclosure on
behalf of the Plan of such documents and reports as are required by
any applicable federal or state law.
7.5 Employer's Responsibility to Administrator. The Employer shall furnish the
Administrator such data and information as he may require. The records of
the Employer shall be determinative of each Participant's period of
employment, termination of employment and the reason therefor, leave of
absence, reemployment, years of service, personal data, and compensation
reductions. Participants and their Beneficiaries shall furnish to the
Administrator such evidence, data, or information, and execute such
documents as the Administrator requests.
7.6 Liability. Neither the Administrator nor the Employer shall be liable to
any person for any action taken or omitted in connection with the
administration of this Plan unless attributable to his own fraud or
willful misconduct; nor shall the Employer be liable to any person for
such action unless attributable to fraud or willful misconduct on the part
of the director, officer or employee of the Employer.
- Page 21 -
10/1/98
<PAGE> 25
7.7 Procedure to Claim Benefits. Each Participant or Beneficiary must claim any
benefit to which he is entitled under this Plan by a written notification to the
Administrator. If a claim is denied, it must be denied within a reasonable
period of time, and be contained in a written notice stating the following:
A. The specific reason for the denial,
B. Specific reference to the Plan Provision on which the denial is
based,
C. Description of additional information necessary for the claimant to
present his claim, if any, and an explanation of why such material
is necessary, and
D. An explanation of the Plan's claim procedure.
The claimant will have sixty (60) days to request a review of the denial
by the Administrator, who will provide a full and fair review. The request
for review must be written and submitted to the same person who handles
initial claims. The claimant may review pertinent documents, and he may
submit issues and comments in writing. The decision by the Administrator
with respect to the review must be given within sixty (60) days after
receipt of the request, unless special circumstances require an extension
(such as for a hearing). In no event shall the decision be delayed beyond
one hundred twenty (120) days after receipt of the request for review. The
decision shall be written in a manner calculated to be understood by the
claimant, and it shall include specific reasons and refer to specific Plan
provisions as to its effect.
- Page 22 -
10/1/98
<PAGE> 26
ARTICLE VIII
AMENDMENT AND TERMINATION
8.1 Plan Amendment. The Plan may be amended in whole or in part by Tiffany and
Parent at any time; provided that no such amendment shall reduce any
Participant's Vested Deferred Benefits. Notice of any such amendment shall
be given in writing to each Participant and each Beneficiary of a deceased
Participant.
8.2 No Premature Distribution. Subject to Sections 8.3 and 8.4, no amendment
hereto shall permit amounts accumulated pursuant to the Plan prior to the
amendment to be paid to a Participant or Beneficiary prior to the time he
would otherwise be entitled thereto.
8.3 Termination of the Plan. Tiffany reserves the right to terminate the Plan
and/or the Deferral Agreements pertaining to Participants at any time in
the event that Tiffany, in its sole discretion, shall determine that the
economics of the Plan have been adversely and materially affected by a
change in the tax laws, other governmental action or other event beyond
the control of the Participant and Tiffany or that the termination of the
Plan is otherwise in the best interest of the Tiffany.
8.4 Effect of Termination. In the event of Plan termination pursuant to
Section 8.3, the Employer shall pay a benefit to the Participant or the
Beneficiary of any deceased Participant, in lieu of other benefits under
this Plan, equal to the full value of Participant's Deferred Benefit
Accounts determined pursuant to Section 4.7, provided, however, that in
the event that installment payments pursuant to Section 6.1C.1 have
commenced in respect to a Participant, such installments payments will
continue to made to such Participant and no premature distribution will be
made in respect of such installment payments to such Participant.
8.5 Adverse Determination. Notwithstanding anything stated to the contrary in
this Plan, if at any time, as a result of a Final Determination, a tax is
payable by a Participant in respect of any benefit under this
- Page 23 -
10/1/98
<PAGE> 27
Plan prior to payment under the terms of this Plan of such benefit, then
Employer shall pay to the Participant who is required to pay such tax the
amount of such tax and such Participant's Deferred Benefits shall be
reduced by the amount of such tax. Employer reserves the right, in its
sole discretion, to allocate the amount of such tax among the various
Deferred Benefit Accounts of any Participant who is required to pay such
tax. For the purposes of this Section 8.5 the term "Final Determination"
means (i) an assessment of tax by the United States Internal Revenue
Service addressed to the Participant or his Beneficiary which is not
timely appealed to the courts; (ii) a final determination by the United
States Tax Court or any other Federal Court, the time for an appeal
thereof having expired or been waived; or (iii) an opinion by Employer's
counsel, addressed to Employer and in form and substance satisfactory to
Employer, to the effect that amounts payable under the Plan are subject to
Federal income tax to the Participant or his Beneficiary prior to payment
under the terms of the Plan. No Final Determination shall be deemed to
have occurred until the Employer has actually received a copy of the
assessment, court order or opinion which forms the basis thereof and such
other documents as it may reasonably request.
ARTICLE IX
MISCELLANEOUS
9.1 Supplemental Benefits. The benefits provided for the Participants under
this Plan are in addition to benefits provided by any other plan or
program of the Employer and, except as otherwise expressly provided for
herein, the benefits of this Plan shall supplement and shall not supersede
any plan or agreement between the Employer and any Participant.
9.2 Governing Law. The Plan shall be governed and construed under the laws of
the State of New York as in effect at the time of its adoption.
9.3 Jurisdiction. The courts of the State of New York shall have exclusive
jurisdiction in any or all actions arising under this Plan.
- Page 24 -
10/1/98
<PAGE> 28
9.4 Binding Terms. The terms of this Plan shall be binding upon and inure to
the benefit of the parties hereto, their respective heirs, executors,
administrators and successors.
9.5 Spendthrift Provision. The interest of any Participant or any beneficiary
receiving payments hereunder shall not be subject to anticipation, nor to
voluntary or involuntary alienation until distribution is actually made.
9.6 No Assignment Permitted. No Participant, Beneficiary or heir shall have
any right to commute, sell, transfer, assign or otherwise convey the right
to receive any payment under the terms of this Plan. Any such attempted
assignment shall be considered null and void.
9.7 Construction. All headings preceding the text of the several Articles
hereof are inserted solely for reference and shall not constitute a part
of this Plan, nor affect its meaning, construction or effect. Where the
context admits, words in the masculine gender shall include the feminine
and neuter genders, and the singular shall mean the plural.
9.8 No Employment Agreement. Nothing in this Plan or in any Deferral Agreement
entered into under this Plan shall confer on any Participant the right to
continued employment with any Employer and, except as expressly set forth
in a written agreement entered into with the express authorization of the
Board of Directors of Employer, both the Participant and the Employer
shall be free to terminate Participant's employment for any cause or
without cause.
- Page 25 -
10/1/98
<PAGE> 29
Tiffany and Company
("Tiffany")
By:________________________
Name: Patrick B. Dorsey
Title: Senior Vice President - Secretary
Attest:__________________________
Name: Scott Klion
Title: Assistant Secretary
Tiffany & Co.
("Parent")
By:________________________
Name: Patrick B. Dorsey
Title: Senior Vice President - Secretary
Attest:_________________________
Name: Scott Klion
Title: Assistant Secretary
- Page 26 -
10/1/98
<PAGE> 30
Schedule 4.5 to Tiffany and Company Executive Deferral Plan
Investment Funds
1. Fidelity Cash Reserves, 82 Devonshire Street, Boston Massachusetts.
Investment Objective: as high a level of current income as is
consistent with the preservation of capital and liquidity through
investment in money market instruments.
2. Fidelity Magellan Funds, 82 Devonshire Street, Boston Massachusetts.
Investment Objective: capital appreciation by investment primarily
in common stock and securities convertible into common stock.
3. Fidelity Capital Appreciation Fund, 82 Devonshire Street, Boston
Massachusetts. Investment Objective: capital appreciation.
Effective January 1, 1999 the Following Investment Funds Will Replace Those
Indicated Above
1. Nationwide Separate Account Trust Money Market Fund (Nationwide Advisory
Services, Inc.). Investment Objective: to provide as high a level of
current income as is considered consistent with the preservation of
capital and liquidity by investing primarily money market
instruments.
2. Nationwide Separate Account Trust Nationwide Multi Sector Bond Fund (Saloman
Brothers Asset Management). Investment Objective: to obtain a high
level of current income. Capital appreciation is a secondary
objective.
3. Dreyfus Corporation Stock Index Fund (Dreyfus Mellon Equity Associates).
Investment Objective: to provide investment result that correspond
to the price and yield performance of publicly traded common stocks
in the aggregate, as represented by the Standard & Poor's 500
Composite Index. In anticipation of taking a market position, the
Fund is permitted to purchase and sell stock index futures. The Fund
is neither affiliated with nor sponsored by Standard & Poor's.
4. Fidelity VIP: Growth Opportunities Portfolio - Service Class (Fidelity
Management & Research Corporation). Investment Objective: seeks
capital growth and does not pursue income.
5. Fidelity VIP II: Contrafund Portfolio - Service Class (Fidelity Management &
Research Corporation). Investment Objective: seeks long-term capital
appreciation by investing primarily in a broad variety of common
stocks, using both growth-oriented and contrarian principles.
- Page 27 -
10/1/98
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.108
<SEQUENCE>8
<DESCRIPTION>AMENDED/RESTATED RETIREMENT PLAN
<TEXT>
<PAGE> 1
Exhibit 10.108
Tiffany & Co.
Report on Form 10-K
Fiscal 1998
AMENDED AND RESTATED
TIFFANY & CO. RETIREMENT PLAN
FOR NON-EMPLOYEE DIRECTORS
By resolution of its Board of Directors taken January 19, 1989, Tiffany & Co.
established this Retirement Plan for Non-Employee Directors as a non-qualified
deferred compensation plan for the exclusive benefit of its non-employee
directors. This plan has been subsequently amended by resolutions of the Board
of Directors taken March 16, 1989 and January 21, 1999.
ARTICLE I
INTRODUCTION
Section 1.1 Name of Plan. The name of the plan is the "Tiffany & Co.
Retirement Plan for Non-Employee Directors." It is also
referred to as the "Plan."
Section 1.2 Effective Date. The effective date of the Plan is January 1,
1989.
ARTICLE II
DEFINITIONS
Section 2.1 "Administrator" shall mean the Secretary of the Company.
Section 2.2 "Board" shall mean the Board of Directors of the Company.
Section 2.3 "Company" shall mean Tiffany & Co., a Delaware corporation.
Section 2.4 "Compensation Committee" shall mean the Compensation Committee
appointed by the Board, or its delegate.
Section 2.5 "Director" shall mean a member of the Board.
Section 2.6 "Non-Employee Director" shall mean a Director who, at the time
he or she ceases to serve on the Board, is not an employee of
the Company or any of its subsidiaries or affiliated business
entities.
Section 2.7 "Participant" shall mean a Non-Employee Director.
Section 2.8 "Payment Date" shall mean the first business day of each
calendar quarter.
Section 2.9 "Retainer" shall mean the lesser of (i) the annual retainer
fee in effect at the time a Participant's service on the Board
ceases, exclusive of additional fees,
1
<PAGE> 2
if any, paid with respect to service on Board committees and
any fees paid on a per-meeting-attended basis and (ii)
$38,000.
Section 2.10 "Retirement Account Balance" shall mean, with respect to a
Participant, an amount equal to (i) such Participant's full
and fractional Years of Service (with partial months of
service counted as full months) multiplied by (ii) such
Participant's Retainer, minus (a) the pro-rata portion of the
Retainer received by such Participant for any period during
which such Participant did not serve in the capacity of
Director except to the extent such portion has been forfeited
(including forfeitures under the Company's 1988 Director
Option Plan) or repaid by such Participant prior to the first
Payment Date and (b) the sum of all payments made to such
Participant pursuant to Section 3.3 below.
Section 2.11 "Retirement Age" shall mean, with respect to a Participant,
the later of (i) such Participant's 65th birthday or (ii) the
date such Participant ceases to serve on the Board.
Section 2.12 "Year of Service" shall mean each 12 month period subsequent
to October 15, 1984 during which a Participant serves as a
Director inclusive of any time served as a Director while an
employee of the Company or any of its subsidiaries or
affiliated business entities.
ARTICLE III
BENEFITS UNDER THE PLAN
Section 3.1 Eligibility to Receive Benefits Under the Plan. A Participant
under this Plan shall be eligible to receive benefits under
this Plan only if, at the time he or she ceases to serve on
the Board, such Participant (i) is vested pursuant to Section
3.2 below, and (ii) has not earned an accrued benefit under
any retirement plan which is (a) sponsored by the Company or
any of its subsidiaries or affiliated businesses and (b)
qualified under Section 401 (a) of the Internal Revenue Code
of 1986, as amended.
Section 3.2 Vesting of Benefits Under the Plan. No Participant shall be
vested in any benefits until the Participant completes 5 years
of Service on the Board. After a Participant completes 5 years
of Service on the Board, the Participant's benefits under the
Plan shall be fully vested. In the case of any break in
service, all Years of Service shall be aggregated to measure
the total Years of Service.
Section 3.3 Amount of Annual Benefit Payable Under The Plan. A Participant
who is eligible to receive benefits under Section 3.1 shall be
entitled to receive a quarterly benefit equal to the lesser of
(i) twenty-five percent (25%) of his or her Retainer or (ii)
his or her Retirement Account Balance.
2
<PAGE> 3
Section 3.4 Time and Duration of Payments Under the Plan. Benefits under
the Plan shall be paid on each Payment Date, provided the
Participant is alive on such Payment Date, beginning with the
Payment Date immediately following the date a Participant
reaches Retirement Age and shall continue until the
Participant's Retirement Account Balance equals zero (0).
In no event shall any benefits be paid under the Plan after
the death of a Participant other than benefits due and payable
under the Plan at the time of the death of the Participant.
Notwithstanding any other provision of this Plan to the
contrary, the Compensation Committee may, in its sole
discretion by majority approval of its members, direct that
payments be made before such payments are otherwise due if,
for any reason (including, but not limited to, a change in the
tax or revenue laws of the United States of America, a
published ruling or similar announcement issued by the
Internal Revenue Service, a regulation issued by the Secretary
of the Treasury or his delegate, or a decision by a court of
competent jurisdiction involving a Participant or beneficiary)
it believes that a Participant or beneficiary has recognized
or will recognize and will be required to pay federal income
taxes in respect of amounts that are or will be payable to him
or her under the Plan before they are paid. In making this
determination, the Compensation Committee shall take into
account the hardship that would be imposed on the Participant
or beneficiary by the payment of federal income taxes under
such circumstances.
Section 3.5 Non-Assignability of Interests. The interests herein and the
right to receive benefits hereunder may not be anticipated,
alienated, sold, transferred, assigned, pledged, encumbered,
or subjected to any charge or legal process, and if any
attempt is made to do so, or a Participant becomes bankrupt,
the interests under the Plan of the person affected may be
terminated by the Compensation Committee, which, in its sole
discretion, may cause the same to be held or applied for the
benefit of one or more of the dependents of such person or
make any other disposition of such interests as it deems
appropriate.
ARTICLE IV
PLAN ADMINISTRATION
Section 4.1 Administration. The Plan shall be administered by the
Administrator. However, the Compensation Committee shall have
the authority to interpret the Plan and any such
interpretation shall be final and binding on all parties. The
Board, or if specifically delegated, its delegate, may amend
or terminate the Plan at any time, provided that no such
amendment or termination shall adversely affect the amounts
payable or accrued under the Plan before the time of such
amendment or termination
3
<PAGE> 4
unless the Participant becomes entitled to a benefit equal in
value to such amount under another plan or practice adopted by
the Company. The Company will pay for all distributions made
pursuant to the Plan and for all costs, charges and expenses
relating to the administration of the Plan.
Section 4.2 Applicable Law. All questions pertaining to the construction,
validity and effect of the Plan shall be determined in
accordance with the laws of the United States and the internal
laws of the State of New York.
Certified as correct:
- --------------------------
Patrick B. Dorsey
Secretary of Tiffany & Co.
4
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.113
<SEQUENCE>9
<DESCRIPTION>TIFFANY AND COMPANY PENSION PLAN
<TEXT>
<PAGE> 1
Exhibit 10.113
Tiffany & Co.
Report on Form 10-K
Fiscal 1998
<PAGE> 2
TIFFANY AND COMPANY
PENSION PLAN
================================================================================
SECTION 1 - DEFINITIONS
================================================================================
The following words and phrases as used herein shall have the following
meanings unless a different meaning is plainly required by the context:
(1) "Plan" Tiffany and Company Pension Plan, as described herein or
as from time to time hereafter amended or restated.
(2) "Company" Tiffany and Company, Howard H. Sweet & Son, Inc.
(formerly, Tiffco Jewelry and Chain Crafts, Inc.), or
Judel Products Corp. (formerly, Glassware Acquisition
Inc.), provided, however, that, in the case of a person
who is an Employee of Tiffany and Company on his
Employment Commencement Date, the term "Company" as used
herein with respect to such person shall refer to
Tiffany and Company, in the case of a person who is an
Employee of Howard H. Sweet & Son, Inc. on his
Employment Commencement Date, the term "Company" as used
herein with respect to such person shall refer to Howard
H. Sweet & Son, Inc., and in the case of a person who is
an Employee of Judel Products Corp. on his Employment
Commencement Date, the term "Company" as used herein
with respect to such person shall refer to Judel
Products Corp.
(3) "Board of
Directors" Board of Directors of Tiffany and Company.
(4) "Pre-ERISA
Plan" Tiffany and Company Pension Plan and Trust as in effect
through January 31, 1976, incorporating an informal
pension plan maintained by the Company prior to February
1, 1968.
1
<PAGE> 3
(5) "Affiliate" Any member of the controlled group of companies of which
the Company is a member within the meaning of Section
414(b), (c) and (m) of the Code.
(6) "Committee" The Pension Committee as described in Section 7.
(7) "Plan Year" Each twelve (12) month period commencing February 1 and
ending on or before January 31, 1981, the eleven (11)
month period ending December 31, 1981 and each calendar
year thereafter.
(8) "Employee" Any person employed by the Company who receives regular
stated compensation from the Company, but excluding
employees (a) whose principal place of work is outside
the United States and (b) who are paid their
Compensation from a foreign bank or bank branch or who
are eligible to receive retirement, severance or similar
benefits under foreign law or as a result of foreign
custom. Notwithstanding any other provision of the Plan,
in the case of an Employee who shall transfer from a
foreign location to a U.S. location or vice versa, the
Committee may, by regulation or otherwise and to the
extent it considers advisable, treat service and/or
compensation during the period of such transfer,
including compensation from and service with an
Affiliate, as service and/or compensation with the
Company for the purposes of vesting and/or for
determining the amount of pension or other benefits
which may be payable under the Plan.
Based on his stated work schedule an Employee shall be
classified as a Regular Employee or a Part-time
Employee. A change in status between Part-time Employee
and Regular Employee shall be deemed effective for
purposes of Subsections (3) and (4) of Section 4 as of
the first of the month coincident with or next following
the date of such change or, in the case of an Employee
who terminates employment and is reemployed in a
different status prior to incurring a Break in Service,
as of the intervening first day of a Plan Year or, if
none, as of the first of the month coincident with or
next following the date of termination.
2
<PAGE> 4
If a change in status between Part-time Employee and
Regular Employee is deemed effective on other than the
first day of a Plan Year and clause (ii) (A) of
Subsection 4(3) is applicable to the Employee, he shall
not incur a Break in Service with respect to the Plan
Year in which the change is deemed effective, and shall
for purposes of determining Compensation, Average Final
Compensation and Creditable Service be considered to
have been a Regular Employee for the entirety of such
Plan Year; if such a change in status is deemed
effective on other than the first day of a Plan Year and
clause (ii) (B) of Subsection 4(3) or Subsection 4(4) is
applicable to the Employee, he shall for purposes of
determining Compensation, Average Final Compensation and
Creditable Service be considered to have been a
Part-time Employee for the entirety of the Plan Year in
which the change is deemed effective.
(9) "Participant" Any person included as a Participant as provided in
Section 2, except an Employee covered by a collective
bargaining agreement which expressly excludes members of
the collective bargaining unit from the Plan.
(10) "Compensation" (i) In the case of an Employee who is not paid on a
piecework basis, the actual base salary paid to him for
services rendered to the Company (exclusive of amounts
attributable to the exercise of employee stock options),
including straight time for all hours worked,
commissions, bonuses, premiums and incentives; and (ii)
in the case of an Employee who is paid on a piecework
basis, the actual remuneration paid to him; and (iii) in
the case of any Employee shown in the attached Appendix
I, the reference to Company for purposes of this
Subsection 1(10) only shall also refer to Affiliates of
the Company prior to October 15, 1984.
[Rule: For the purposes of determining a Participant's
Compensation under the Plan, such calculation shall be
made without regard to any deductions from a
Participant's earnings for (i) contributions to the
Tiffany & Co. Employee Profit Sharing and Retirement
Savings Plan, (ii) premium payments under any of the
Company's health care plan(s), (iii) allocations to a
Dependent Care Spending Account, or (iv) deferrals under
the Company's Executive
3
<PAGE> 5
Deferral Plan, which are not includable in the gross
income of the Participant for the taxable year in which
such contributions, payments, allocations and/or
deferrals are made.]
(11) "Average Final
Compensation" With respect to an Employee his average annual
Compensation during those five years of his last ten
years of Creditable Service in which his compensation
was highest. If an Employee has less than five years of
Creditable Service or less than five Plan Years in which
he accrued Creditable Service, as the case may be, his
"Average Final Compensation" shall be computed over all
such years.
Except in respect of subdivision (b) of Subsection 5(1),
"Average Final Compensation" shall reflect those five
years of his last ten years of creditable service prior
to July 31, 1985 or December 31, 1984, as required by
Section 5, in which his compensation was highest.
Compensation earned subsequent to July 31, 1985 or
December 31, 1984, as required by Section 5, shall not
be reflected in this calculation.
[Rule: With respect to the change in the definition of
Average Final Compensation under Subsection 1(11) of the
Plan effective for Plan Years beginning after December
31, 1994, such change shall not apply to any
Compensation earned prior to the effective date of such
change. Accordingly, if Compensation for any Plan Year
beginning prior to January 1, 1995 is taken into account
in calculating Average Final Compensation or for any
other purpose under the Plan, Compensation for such Plan
Year shall be determined in accordance with the previous
definition of Average Final Compensation. In addition,
the Accrued Benefit determined in accordance with the
new definition of Average Final Compensation shall not
be less than the Accrued Benefit determined as of
December 31, 1994 under the previous definition.]
4
<PAGE> 6
(12) "Creditable
Service" The period including fractions of a year rounded up to
the next whole month of an Employee's service which is
counted as a period of service for vesting purposes
under Section 4; provided, however, that in the case of
an Employee who accrued Creditable Service hereunder
both as a Part-time Employee and also as a Regular
Employee, any Plan Year during which he completes at
least 1,000 hours of service but less than the standard
number of hours of service in the regularly scheduled
work weeks for the location at which he is employed
shall be counted as the corresponding fraction of a year
of Creditable Service; and provided, further, that in
the event of a change in status to which clause (ii)(B)
of Subsection 4(3) applies, there shall be taken into
account for purposes of the preceding clause, with
respect to the Plan Year in which the change in status
is effective, forty-five hours of service for each week
or partial week of service performed subsequent to the
change in status and before the end of such Plan Year.
If an Employee becomes re-employed after February 1,
1976, and again becomes a Participant pursuant to
Section 2, subject to Subsection 4(5), his service shall
be credited as of his Reemployment Commencement Date.
For an Employee shown in the attached Appendix I, any
period during which the Employee was an employee of an
Affiliate of the Company prior to October 15, 1984.
(13) "Actuarial
Equivalent" A benefit of equivalent value, when computed on the
basis of the factors shown in Appendix II.
(14) "Social
Security
Benefit" The amount of the Participant's anticipated unreduced
primary insurance benefit under Title II of the Federal
Social Security Act. The benefit shall be computed on
the basis of such Act in effect at the earlier of July
31, 1985, or the time he last ceases to be a
Participant, and shall consist of that annual amount to
which he would upon proper application be entitled at
the date of retirement or termination, or at age 65 if
later, on the basis of his
5
<PAGE> 7
Compensation as determined under the Plan irrespective
of earnings he may be receiving in excess of any limit
on earnings for full entitlement to such benefit.
When used in connection with the computation of any
retirement allowance other than a retirement allowance
payable to a Participant who terminates employment at or
after age 65, it shall mean the said Social Security
Benefit computed on the assumption that the Participant
will continue to receive Compensation until age 65 for
purposes of Social Security in the same amount as in
effect on the date of his retirement or termination.
With respect to periods for which the Participant's
actual compensation for Social Security purposes is not
available, the Social Security Benefit shall be
calculated on the assumption that the Participant had
compensation for Social Security purposes after 1951, or
age 22 if later and prior to his last date of hire or
rehire which increased 6 percent each year to his
Compensation on such date of hire or rehire.
Each Participant shall have the right to have his Social
Security Benefit computed on the basis of the
Participant's actual salary history as of the earlier of
July 31, 1985, or the time he last ceases to be a
Participant, instead of estimated compensation. Each
Employee shall be provided with written notice of the
Employee's right to supply actual salary history and of
the financial consequences of failing to supply such
history. The notice must be given each time the summary
plan description is provided to the Employee and must
also be given upon separation from service. The notice
must state that the Employee can obtain the actual
salary history from the Social Security Administration.
If the Participant supplies documentation of his or her
actual salary history, the Participant's benefit will be
adjusted to the offset based on actual salary history
for years previously estimated before separation from
service (assuming no post-separation or post-retirement
compensation). Such documentation must be supplied
within a reasonable period following the later of the
date of separation from service (by retirement or
otherwise) or the time when the Participant is notified
of the benefit to which he is entitled.
(15) "Hour of
6
<PAGE> 8
Service" (1) Any hour for which a Regular Employee or a Part-time
Employee is directly or indirectly paid or entitled to
payment by the Company for the performance of duties,
which such hours shall be credited, in the case of a
Part-time Employee, for the computation period or
periods in which the duties are performed;
(2) Any hour for which a Part-time Employee is directly
or indirectly paid or entitled to payment by the Company
for reasons (such as vacation, sickness or disability)
other than for the performance of duties, which such
hours shall be credited to the Part-time Employee in
accordance with Department of Labor Regulations section
2530.200b-2; and
(3) Any hour for which back pay, irrespective of
mitigation of damages, has been either awarded or agreed
to by the Company in the case of a Part-time Employee,
which such hours shall be credited to the Part-time
Employee for the computation period or periods to which
the award or agreement pertains.
Any Employee who is paid on a piecework basis shall be
credited with ten Hours of Service for each day on which
he would be entitled to credit for one Hour of Service
under the foregoing definition.
(16) "Employment
Commencement
Date" In the case of a Regular Employee, the date on which he
first performs an Hour of Service. In the case of a
Part-time Employee, "Employment Commencement Date" shall
mean the first day for which he is entitled to be
credited with an Hour of Service under subdivision (1)
of Subsection 1(15) above.
(17) "Discontinuance
of Active
Employment Date" In the case of a Regular Employee, the earlier of (i)
his retirement or other termination of employment with
the Company, or (ii) the first anniversary of the first
day of any continuing period of absence from service
with the Company, with or without pay, which is neither
(A) a leave
7
<PAGE> 9
of absence described in Subsection (1), (2) or (3) of
Section 3, nor (B) the result of his retirement or
termination.
(18) "Break in
Service" (1) In the case of a Part-time Employee, a Plan Year in
which he fails to complete an Hour of Service, other
than a Plan Year during any part of which he is on a
leave of absence described in Section 3. In the case of
a Regular Employee, a Break in Service shall occur when
he fails to perform an Hour of Service within a one-year
period beginning on any Discontinuance of Active
Employment Date.
(2) In addition, and notwithstanding the rules described
under subdivision (1) of Subsection 1(18) above, any
individual who is absent from the service of the Company
on account of pregnancy, birth of a child of such
individual, or for purposes of caring for such a child
during the period immediately following childbirth or
placement for adoption shall be credited, for purposes
of this Section, with the Hours of Service for which he
would normally have received credit had he not been
absent from the service of the Company for one of the
reasons described above, up to a maximum of five hundred
and one (501) Hours of Service, which hours shall be
credited in accordance with Section 202(b)(5) of ERISA,
as amended by the Retirement Equity Act of 1984, and
related regulations.
(19) "Reemployment
Commencement
Date" In the case of a Regular Employee, the date on which he
first performs an Hour of Service following a Break in
Service. In the case of a Part-time Employee,
"Reemployment Commencement Date" shall mean the first
day for which he is entitled to be credited with an Hour
of Service under subdivision (1) of Subsection 1(15)
following (i) a Break in Service which follows either
(A) a Plan Year or other eligibility computation period
described in Section 2 in which he is credited with at
least an Hour of Service, or (B) a Plan Year during any
part of which he is on a leave of absence described in
Section 3, or (ii) a Plan Year in which he is credited
with no Hours of Service which follows a Reemployment
Commencement Date established
8
<PAGE> 10
under clause (i).
(20) The masculine pronoun wherever used shall include the
feminine.
(21) "Code" Internal Revenue Code of 1986, as amended.
(22) "Taxable Wage
Base" The contribution and benefit base under section 230 of
the Federal Social Security Act as in effect in the year
in question.
(23) "Covered
Compensation" The average (without indexing) of the Taxable Wage Bases
in effect for each calendar year during the 35-year
period ending with the year in which the Participant
attains (or will attain) social security retirement age,
calculated as provided in Treasury Regulation
ss.1.401(1)-1(c)(7).
(24) "Accrued Benefit" The amount on a given date of the benefits provided
under Subsection 5(1) of the Plan using Average Final
Compensation, Covered Compensation and Creditable
Service determined as of such date. The Accrued Benefit
may be expressed in a form which is the actuarial
equivalent.
9
<PAGE> 11
SECTION 2 - PARTICIPATION
================================================================================
(1) Any person who is a Participant as of December 31, 1981 shall remain a
Participant in the Plan on January 1, 1982. After December 31, 1981, a Regular
Employee shall become a Participant on the first anniversary of his Employment
Commencement Date, provided that he is an Employee on such first anniversary. A
Part-time Employee shall become a Participant after December 31, 1981 on January
1 or July 1 coincident with or next following the first anniversary of his
Employment Commencement Date, provided (i) that he is an Employee on such
January 1 or July 1, and (ii) that he completes 1,000 Hours of Service during
the one-year period commencing on his Employment Commencement Date. If a person
would have become a Participant but for the fact that he was not an Employee on
the applicable entry date, he shall nevertheless become a Participant
immediately upon his again becoming an Employee, provided he again becomes an
Employee prior to incurring a Break in Service.
(2) If a Part-time Employee does not complete 1,000 Hours of Service during the
one-year period commencing on his Employment Commencement Date, he shall become
a Participant immediately following the close of the first Plan Year commencing
after his Employment Commencement Date in which he does complete 1,000 Hours of
Service, other than a Plan Year in which he has a Reemployment Commencement
Date, in which case he shall become a Participant immediately following the
close of (i) the one-year period commencing on such Reemployment Commencement
Date or (ii) the first Plan Year commencing after such Reemployment Commencement
Date, in which he completes 1,000 Hours of Service.
(3) A Regular Employee who has become a Participant shall cease to be a
Participant on his Discontinuance of Active Employment Date, and a Part-time
Employee who has become a Participant shall cease to be a Participant on the
date he ceases to be an Employee or, if earlier, on the date on which he incurs
a Break in Service. Such a former Participant, unless he ceased to be a
Participant as a result of incurring a Break in Service, shall immediately again
become a Participant if, prior to incurring a Break in Service, he either (i)
performs an Hour of Service as a Regular Employee, or (ii) is entitled to be
credited with an Hour of Service under subdivision (1) of Subsection 1(15) as a
Part-time Employee.
(4) If an Employee who is vested ceases to be a Participant and has a subsequent
Reemployment Commencement Date on which he is a Regular Employee, he shall again
become a Participant as of his Reemployment Commencement Date if (i) he is an
Employee on the first anniversary of such date or, (ii) he is not an Employee on
such first anniversary but again becomes an Employee prior to incurring a Break
in Service which is subsequent to his Reemployment Commencement Date. If an
Employee who is vested ceases to be a Participant and has a subsequent
Reemployment Commencement Date on which he is a Part-time Employee, he shall
again become a Participant as of his Reemployment Commencement Date if he
completes 1,000 Hours of Service during the one-year period commencing on his
Reemployment
10
<PAGE> 12
Commencement Date or, if he does not, as of the first day of the first Plan Year
commencing after his Reemployment Commencement Date in which he completes 1,000
Hours of Service, other than a Plan Year in which he has another Reemployment
Commencement Date.
(5) If any Employee who is not vested ceases to be a Participant and has a
subsequent Reemployment Commencement Date, he shall again become a Participant
in accordance with the appropriate rule of Subsection (4) for vested Employees,
provided that the number of consecutive one-year Breaks in Service did not equal
or exceed the greater of 5 or the aggregate number of years of service before
such Break in Service. If his prior service does not satisfy the applicable
condition of the preceding sentence, his Reemployment Commencement Date will be
deemed his Employment Commencement Date for purposes of this Section, and rules
of Subsections (1) and (2) hereof will apply.
(6) For purposes of this Section 2, in determining whether an Employee shall
become a Participant, service with any Affiliate of the Company shall be taken
into account, in accordance with the foregoing rules, as if such service had
been rendered to the Company and such service shall include service as a leased
employee within the meaning of Code Section 414(n) of the Company or an
Affiliate.
(7) For purposes of this Section 2, William R. Chaney will not be considered a
Participant at any time under the provisions of this Plan.
(8) Notwithstanding anything herein to the contrary, for purposes of this
Section 2, any person who was an employee of Howard H. Sweet & Son, Inc.
(formerly Tiffco Jewelry and Chain Crafts, Inc.) on January 27, 1997, shall
become a Participant in the Plan as of his or her Employment Commencement Date.
11
<PAGE> 13
SECTION 3 - LEAVES OF ABSENCE
================================================================================
(1) The Company may authorize an unpaid or paid leave of absence under its
standard personnel practices as applied in a uniform and non-discriminatory
manner to all Employees similarly situated, provided that the Employee must
return to service with the Company within the period of time specified in the
authorization.
(2) Any Employee who shall be granted a leave of absence for service in the
armed forces of the United States or in emergency government service, or
pursuant to a leave granted by the Company, shall be deemed to be an Employee
during such leave and his Compensation in the last full calendar year of his
employment immediately preceding the beginning of such leave shall be deemed to
be his annual Compensation for the purposes of the Plan during such leave,
provided that such Employee returns to the employ of the Company within the
period provided by law for the protection of his reemployment rights following
his discharge or release from active duty in such armed forces.
(3) The Committee may, under rules uniformly applicable to all Employees
similarly situated, include as service and compensation, respectively, for any
Participant retiring hereunder, any period or periods of service and the
compensation earned during such period or periods, not otherwise creditable or
recognized hereunder, rendered or earned in the employment of any Affiliate;
provided that the retirement allowance payable on account of such additional
period of service shall be reduced by any employer-provided retirement benefit
which is payable on account of the same period of service under any retirement
plan of such Affiliate.
(4) Anything herein contained to the contrary notwithstanding, the Committee
may, under rules uniformly applicable to all Employees similarly situated,
include as service such other periods of excused absence from employment as it
deems appropriate and consistent with Plan objectives.
[Rule: Except as otherwise specifically provided in this Section 3, where
the Company authorizes a paid leave of absence which does not require the
Employee to return to service with the Company, such Employee shall be
deemed to be an Employee during such leave for all purposes under the
Plan.]
12
<PAGE> 14
SECTION 4 - VESTING
================================================================================
(1) A person shall be vested if the period of his service equals or exceeds five
years computed in accordance with the rules set forth in this section or when he
attains normal retirement age as specified in subdivision (a) of Subsection 5(2)
hereof. A person shall also be vested if he was (i) an employee of Howard H.
Sweet & Son, Inc. (formerly Tiffco Jewelry and Chain Crafts, Inc.) on January
27, 1997, and (ii) a Participant in the Plan as of such date.
(2) There shall be counted as periods of service for vesting purposes the sum of
the following periods:
(a) any period prior to February 1, 1976 during which a person was an
Employee, unless such period would have been disregarded in computing service
under the rules of the Plan regarding Breaks in Service then applicable, but
including any period which was disregarded solely because of the Participant's
age;
(b) with respect to a Part-time Employee, each Plan Year beginning on or
after February 1, 1976 during which such Employee completes 1,000 Hours of
Service;
(c) with respect to a Regular Employee, each period of his employment with
the Employer, beginning on both (i) the later of February 1, 1976 or his
Employment Commencement Date and (ii) any Reemployment Commencement Date after
February 1, 1976, and ending on his Discontinuance of Active Employment Date
next following;
(d) with respect to a Regular Employee, the period between any
Discontinuance of Active Employment Date and the date on which he next performs
an Hour of Service if such date is within one year of such Discontinuance of
Active Employment Date; provided, however, that if a Regular Employee's
employment is terminated during any absence from service which would not
otherwise result in a Discontinuance of Active Employment Date until the first
anniversary of the first day thereof, vesting service shall include the period
from his discontinuance of Active Employment Date to the date on which he next
performs such an Hour of Service only if he next performs such an Hour of
Service within one year of the first day of such absence.
(e) with respect to an Employee shown in the attached Appendix I, the
period during which the Employee was an employee of an Affiliate of the Company
prior to October 15, 1984.
Notwithstanding the foregoing, in no event shall the number of years of
service credited to an Employee under the Plan as in effect on January 1, 1982
be less than the number of such years credited to him under the Plan as in
effect on December 31, 1981.
13
<PAGE> 15
(3) For purposes of Subsection (2) above, if a person's status is changed from
Part-time Employee to Regular Employee, he shall receive credit, as of the date
such change in status is effective, for a period of service consisting of (i)
service credited to him under Subsection (2)(a) and (b) for Plan Years prior to
the Plan Year in which the change in status is effective, and (ii) the greater
of (A) the period beginning on the first day of the Plan Year in which the
change in status is effective (or, if later, the first day he was an Employee
during such Plan Year) and ending on the date such change in status is
effective, or (B) the service which would be taken into account for such period
under Subsection (2)(b) on the basis of Hours of Service completed to the date
of change. If clause (ii)(A) of the preceding sentence applies, the Employee
shall receive credit for service subsequent to the change in status commencing
on the first day thereafter on which he is an Employee; if clause (ii)(B) of
such sentence applies, he shall only receive credit for service subsequent to
the change in status commencing on the day after the last day of the Plan Year
in which the change in status is effective.
(4) For purposes of Subsection (2) above, if a person's status is changed from
Regular Employee to Part-time Employee, he shall receive credit, as of the date
such change in status is effective, for (i) a number of years of service equal
to the number of 1-year periods of service credited to him under Subsections
(2)(a), (c) and (d) as of the date the change in status is effective, and (ii)
forty-five Hours of Service for each week or partial week of any fractional part
of a year credited to him under such Subsections (2)(a), (c) and (d) as of the
date the change in status is effective, such hours to be credited to him for
purposes of Subsection 2(b) in the Plan Year in which the change is effective.
(5) Notwithstanding anything to the contrary above, if a former Participant
again becomes a Participant after incurring a Break in Service, service credited
for vesting purposes prior to the date his participation ceased shall be
disregarded if (A) his service for vesting purposes on such date is less than
five years and (B) if the number of his consecutive one-year Breaks in Service
equals or exceeds 5. However, for purposes of this Subsection (5), there shall
be no forfeiture of vesting service prior to the date participation ceased if he
remains a Participant at all times during those four consecutive Plan Years next
following the Plan year in which he again becomes a Participant.
(6) Solely for the purposes of calculating vesting service under this Section 4
and not for the purpose of calculating Creditable Service under Subsection 1(12)
hereof (except to the extent provided in Section 3 hereof), service with any
Affiliate of the Company shall be taken into account as if the term "Company" in
the foregoing rules included such Affiliate and service as a leased employee
within the meaning of Section 414(n) on the Company or an Affiliate shall also
be taken into account, provided that no period of service shall be taken into
account hereunder more than once.
14
<PAGE> 16
SECTION 5 - BENEFITS
================================================================================
(1) (a) Subject to Subsection 5(3), any person who, subsequent to December 31,
1984, ceases to be a Participant after he is vested and whose Month of
Retirement occurs prior to December 1, 1988, shall be entitled to an annual
retirement allowance, payable in monthly installments commencing at the end of
the calendar month immediately following his Month of Retirement and continuing
to and including the earlier of the December 1988 monthly payment or the last
monthly payment in the month of his death, equal to the annual retirement
allowance computed in subdivision (c) of this Subsection, plus, for each year or
fraction of a year of Creditable Service beginning January 1, 1985, the sum of
1-1/2 percent of Compensation not in excess of the Taxable Wage Base and 2
percent of Compensation in excess of the Taxable Wage Base. For this subdivision
(a) of Subsection 5(1) only, Compensation earned after January 1, 1985, for any
Participant who works less than a full Plan Year, will equal the Compensation he
would have earned if he had worked the full Plan Year. In addition, a
Participant's "Month of Retirement" for the purposes of this Subsection 5(1)
only is the month in which he attains the normal retirement age specified in
subdivision (a) of Subsection 5(2) or, if later, in which he ceases to be a
Participant.
(b) Subject to Subsection 5(3), any person who, subsequent to December 31,
1984, ceases to be a Participant after he is vested shall be entitled to an
annual retirement allowance, payable in monthly installments commencing at the
end of the later of January 1989 or the calendar month immediately following his
Month of Retirement, and continuing to and including the last monthly payment in
the month of his death, equal to 1 percent of the Participant's Average Final
Compensation not in excess of Covered Compensation multiplied by the number of
his years, including fractions thereof, of Creditable Service, plus 1-1/2
percent of his Average Final Compensation in excess of Covered Compensation
multiplied by the number of his years, including fractions thereof, of
Creditable Service. For this subdivision (b) of Subsection 5(1) only,
Compensation earned after January 1, 1985, for any Participant or former
Participant who works less than a full Plan Year, will equal the Compensation he
would have earned if he had worked the full Plan Year.
(c) The annual retirement allowance accrued as of December 31, 1984, shall
be equal to the excess of (i) 1-3/4 percent of the Participant's Average Final
Compensation (determined as of December 31, 1984) multiplied by the number of
his years of Creditable Service (determined as of December 31, 1984) up to ten
plus 1-1/2 percent of the Participant's Average Final Compensation (determined
as of December 31, 1984) multiplied by his remaining years of Creditable Service
(determined as of December 31, 1984) over (ii) 1-1/4 percent of the
Participant's Social Security Benefit (determined as if the Participant had
terminated as of December 31, 1984) multiplied by the number of his years of
Creditable Service (determined as of December 31, 1984) completed by him
subsequent to the end of the calendar month in which he attained age 25 (for
purposes of this clause (ii) of this Subsection 5(1)(b), prorating Creditable
15
<PAGE> 17
Service accrued for the Plan Year in which he attained age 25 if he was then
considered a Part-time Employee), up to a maximum of 50 years.
(d) In no event shall the annual retirement allowance computed in
subdivisions (a), (b) and (c) of this Subsection (5)(1) be less than the annual
retirement allowance computed as the excess of (i) 1-3/4 percent of the
Participant's Average Final Compensation (determined as of July 31, 1985)
multiplied by the number of his years of Creditable Service (determined as of
July 31, 1985) up to ten plus 1-1/2 percent of the Participant's Average Final
Compensation (determined as of July 31, 1985), multiplied by his remaining years
of Creditable Service (determined as of July 31, 1985) over (ii) 1-1/4 percent
of the Participant's Social Security Benefit (determined as if the Participant
had terminated as of July 31, 1985) multiplied by the number of his years of
Creditable Service (determined as of July 31, 1985) completed by him subsequent
to the end of the calendar month in which he attained age 25 (for purposes of
this clause (ii) of this Subsection 5(1)(c), prorating Creditable Service
accrued for the Plan Year in which he attained age 25 if he was then considered
a Part-time Employee), up to a maximum of 50 years.
(e) In no event shall the annual retirement allowance computed in
subdivisions (a), (b) and (c), and subject to a minimum benefit as computed in
subdivision (d) of this Subsection (5)(1) be less than $100 multiplied by the
number of his years of Creditable Service. In addition, no Participant's Accrued
Benefit shall be less than what such Participant had accrued as of the last day
of the last Plan Year beginning before January 1, 1989.
(2) (a) Normal Retirement - A Participant who has reached the later of (i) his
65th birthday or (ii) the 5th anniversary of his date of hire (normal retirement
age hereunder) may retire on a retirement allowance computed in accordance with
Subsection 5(1); except that any Participant shall, at his election, be
continued in service after age 65. At normal retirement age, all benefits
payable under the Plan shall be nonforfeitable.
(b) Early Retirement - Any Participant who has attained age 60 and has
rendered 15 or more years of Creditable Service shall be retired by the
Committee on a retirement allowance on the first day of the calendar month next
following receipt by the Committee of a written application therefor by the
Participant. At the Participant's election, he shall receive a retirement
allowance commencing on his retirement which shall be equal to the retirement
allowance computed in accordance with 5(1) he would otherwise receive upon
attaining age 65, reduced by 1/12th of 5 percent for each month by which the
date of his retirement allowance would otherwise have commenced under Subsection
5(1).
At the time of retirement pursuant to this subsection (b) on a
retirement allowance commencing on his retirement, the Participant may elect to
convert the retirement allowance otherwise payable to him into an Actuarial
Equivalent of such amount so that, with his Social Security Benefit which, for
this purpose, shall be assumed to commence as of either his sixty-second or
sixty-fifth birthday, as the Participant elects, the Participant will receive,
so far as
16
<PAGE> 18
possible, the same amount each year before and after he commences to receive
such Social Security Benefit.
(c) Vested Retirement - Payments to any person who ceases to be a
Participant on or after February 1, 1976, and is entitled to a retirement
allowance pursuant to Subsection 5(1) and to whom subdivisions (a) and (b) of
Subsection 5(2) do not apply shall commence on the last day of the calendar
month next following the later of (i) the occurrence of his 65th birthday or
(ii) receipt by the Committee of a written application therefor; provided that
if the proper amount of such payment cannot for any reason be ascertained by
such date, a payment retroactive to such date shall be made within sixty days of
the earliest date on which it can be ascertained. Such a person may, by written
notice to the Committee, elect to have his retirement allowance commence at any
time after he has attained age 60 and completed 15 years of Creditable Service
and after receipt by the Committee of his application for benefits; provided,
however, that payment of such allowance prior to the attainment of age 65 shall
be in a reduced amount and shall be the Actuarial Equivalent as of the date
payments commence of the retirement allowance computed in accordance with
Subsection 5(1) which he would otherwise receive after attaining age 65.
(3) Optional Benefits in Lieu of Regular Benefits. (a) Prior to commencement of
the payment of a retirement allowance to a Participant, he shall be given a
written explanation of the benefits and the options under subdivision (b) hereof
pursuant to which he may provide a benefit for his spouse in the event of his
death after his retirement. Unless an optional form of benefit is selected
pursuant to an election meeting the same requirements as prescribed in Section
5(3)(c), or with respect to former Participants in Section 5(4)(f), within the
ninety (90) day period ending on the date benefit payments would commence, a
married Participant shall be deemed to have elected to convert his retirement
allowance into an Actuarial Equivalent in the form of an annuity for his life
with a survivor annuity for the life of his spouse equal to one-half of the
amount of the annuity payable during their joint lives.
(b) Any Participant may, by written notice made in accordance with the
same requirements for former Participants as prescribed in Section 5(4)(f) and
filed with the Committee prior to the date of the commencement of his retirement
allowance, elect to convert his retirement allowance into the Actuarial
Equivalent thereof paying a proportionately reduced retirement allowance during
his life, with the provision that after his death an allowance of 50%,
66-2/3%,75% or 100% of the rate of his reduced allowance, at his designation,
shall continue during the life of, and shall be paid to, the beneficiary
designated by him at the time of electing the option. The election of an
optional benefit may be revoked or changed by the Participant at any time prior
to the benefit commencement date; provided, however, that if the Participant or
the beneficiary designated under the option dies prior to the date the election
of the option becomes effective, the option shall thereby be automatically
revoked; and provided, further, that if the designated beneficiary is other than
the Participant's spouse, the present value of the payments to be made to such
Participant shall be more than 50 percent of the present value of the total
payments to be made to the Participant and his beneficiaries. A Participant's
designation of
17
<PAGE> 19
a beneficiary other than the Participant's spouse shall not be effective unless
(i) the Participant and his spouse have waived the spouse's allowance defined in
Subsection 5(4)(d) and the spouse has waived his or her right to be the
Participant's beneficiary, (ii) the Participant has no spouse, or (iii) the
spouse cannot be located.
(c) Effective on or after August 23, 1984, in the event that a married
Participant elects to receive his Plan benefit in a form other than an annuity
for his life with a survivor annuity for the life of his spouse, such election
shall not take effect unless written consent of the spouse to such election,
witnessed by a notary public or a member of the Committee, is on file with the
Committee. Such consent shall be irrevocable as to any specific waiver or
designation of any beneficiary. (The requirement of spousal consent may be
waived by the Committee under certain limited circumstances in accordance with
Section 417(a)(2) of the Internal Revenue code of 1954, as amended, and related
regulations.) A spousal consent filed with the Committee shall be applicable
only with respect to the spouse who has signed such form.
(4) Survivorship Benefits. (a) Upon (i) the death of a Participant who has
become vested in his Accrued Benefit, as provided in Section 4 of the Plan, (ii)
the death of a Participant who has attained normal retirement age as specified
in Subdivision (a) of Subsection 5(2), or (iii) the death of a former
Participant who had attained age 60 and rendered 15 or more years of Creditable
Service prior to the date he ceased to be a Participant (but who was not
receiving at the time of his death any retirement allowance), there shall be
payable to the Participant's or former Participant's spouse, if any, a spouse's
allowance defined in Subsection 5(4)(d) below.
(b) Unless an optional form of benefit is selected within the election
period pursuant to a qualified election, upon the death of a former Participant
who had become vested in his Accrued Benefit, as provided in Section 4 of the
Plan, there shall be payable to the former Participant's spouse, if any, a
spouse's allowance as prescribed in Subsection 5(4)(e) below.
(c) The spouse's allowance shall commence as the first day of the calendar
month following the month in which the Participant or former Participant died or
would have been age 60, whichever is the later, except that the Committee may,
under rules uniformly applicable to all Participants and former Participants
similarly situated, direct payment commencing on the first day of any earlier
calendar month after the Participant's or former Participant's death.
(d) If the Committee does not direct early commencement of payment, the
spouse's allowance shall be the greater of (i) an allowance for the life of the
spouse, payable monthly, which is equal to 20 percent of the Participant's or
former Participant's annual rate of compensation at the time of his death or
earlier termination of employment, or (ii) an allowance equal to the allowance
the spouse would have received if the Participant or former Participant had
retired or terminated his service on the date of his death and elected to
receive, based on his Average Final Compensation, years of Creditable Service
and age at such date, the maximum retirement allowance payable to him under
Subsections 5(1) and 5(2), commencing at the earliest possible date and
continuing after his death in the same monthly amount during the life of his
18
<PAGE> 20
spouse. If the Committee does direct early commencement of payment, the spouse's
allowance shall be a monthly allowance for the life of the spouse which is the
Actuarial Equivalent of the allowance the spouse would otherwise have received
pursuant to the preceding sentences. Notwithstanding the foregoing, in no event
shall the spouse's allowance be less than the amount the spouse would have
received under the terms of the Plan as in effect on December 31, 1984, had the
Participant died on that date.
(e) If the Committee does not direct early commencement of payment, and
unless an optional form of benefit is selected within the election periods
pursuant to a qualified election, the former Participant's spouse allowance
shall equal the allowance the spouse would have received if the former
Participant had retired or terminated his service on the date of his death and
elected to receive, based on his Average Final Compensation, years of Creditable
Service at the date of termination of service with the Company, a retirement
allowance payable to him under Subsection 5(1) and 5(2), commencing at the
earliest possible date and continuing after his death in a amount equal to 50%
of the amount that would have been payable to the Participant during his life.
If the Committee does not direct early commencement of payment, the spouse's
allowance shall be a monthly allowance for the life of the spouse which is the
Actuarial Equivalent of the allowance the spouse would otherwise receive
pursuant to the preceding sentences. Notwithstanding the foregoing, in no event
shall the spouse's allowance be less than the amount the spouse would have
received under the terms of the plan as in effect on December 31, 1984 had the
former Participant died on that date.
(f) (i) Definitions. Election Period for Former Participants - The
election period shall begin on the date that participation ceases.
Qualified Election for Former Participants - A waiver of the
preretirement survivor annuity as described in Subsection 5(4)(e). The waiver
must be in writing and must be consented to by the Participant's spouse. The
spouse's consent to a waiver must be witnessed by a plan representative or
notary public. Notwithstanding this consent requirement, if the Participant
establishes to the satisfaction of a plan representative that such written
consent may not be obtained because there is no spouse or the spouse cannot be
located, a waiver will be deemed a qualified election. Any consent necessary
under this provision will be valid only with respect to the spouse who signs the
consent, or in the event of a deemed qualified election, the designated spouse.
Additionally, a revocation of a prior waiver may be made by a Participant
without the consent of the spouse at any time before the commencement of
benefits. The number of revocations shall not be limited.
(ii) Notice Requirements. In the case of a qualified preretirement
survivor annuity as described in Subsection 5(4)(e), the plan administrator
shall provide each former Participant a written explanation of: (i) the terms
and conditions of a qualified preretirement survivor annuity; (ii) the former
Participant's right to make and the effect of an election to waive the qualified
preretirement survivor annuity form of benefit; (iii) the rights of a former
Participant's spouse; and (iv) the right to make, and the effect of, a
revocation of a previous
19
<PAGE> 21
election to waive the qualified preretirement survivor annuity. The Plan
administrator shall provide such notice within the period beginning with the
first day of the Plan Year in which the Participant attains age 32 and ending
with the close of the Plan Year preceding the Plan Year in which the Participant
attains age 35. If the Participant enters the Plan after the first day of the
Plan Year in which the Participant attained age 32, the Plan administrator shall
provide such notice no later than the close of the second Plan Year following
the entry of the Participant into the Plan.
(5) Restoration to Participation. Anything herein contained to the contrary
notwithstanding, if a former Participant who has received or is receiving
benefits under this Section 5 again becomes an Employee, (i) any benefits he is
receiving shall cease upon his reemployment if he is reemployed as a Regular
Employee, or upon his satisfying the participation requirements of Section 2 if
he is reemployed as a Part-time Employee, provided that benefits will not be
suspended in any calendar month unless the Employee has completed at least 40
hours of service with the company in service recognized under Section
203(a)(3)(B) of ERISA or received payment for any such hours of service
performed on each of 8 or more days in such month, (ii) he shall then again
become a Participant, and (iii) the Creditable Service which he had when he last
ceased to be an Employee shall be restored to him. On his subsequent retirement
the benefit payable shall be based on his Compensation and Creditable Service
before and after the period of prior retirement, reduced by an amount which is
the Actuarial Equivalent of the benefits he received prior to his restoration to
participation; provided, however, that such benefit shall not be less than the
benefit he was receiving during his prior retirement. If benefit payments have
been suspended, payments shall resume no later than the first day of the third
calendar month after the calendar month in which the Employee ceases to be
employed in ERISA Section 203(a)(3)(B) service. No payment shall be withheld by
the Plan pursuant to this section unless the Plan notifies the Employee by
personal delivery or first class mail during the first calendar month or payroll
period in which the Plan withholds payments that his benefits are suspended.
Such notifications shall contain a description of the specific reasons why
benefit payments are being suspended, a description of the Plan provision
relating to the suspension of payments, a copy of such provisions, and a
statement to the effect that applicable Department of Labor regulations may be
found in Section 2530.203-3 of the Code of Federal Regulations. In addition, the
notice shall inform the Employee of the Plan's procedures for affording a review
of the suspension of benefits. Requests for such reviews may be considered in
accordance with the claims procedure adopted by the Plan pursuant to Section 503
of ERISA and applicable regulations.
(6) Termination of Benefit Payments. Payment of benefits under this Section 5 to
a former Participant, his spouse or other beneficiary shall cease with the
monthly payment for the month in which such former Participant, spouse or
beneficiary dies.
(7) Disabled Participants. Anything herein contained to the contrary
notwithstanding, any Participant while in receipt of payments under the
Company's Short Term Illness Plan, Extended Illness Plan, Short Term Disability
Plan or Long Term Disability Plan (collectively, the
20
<PAGE> 22
"Program"), shall be treated as a Participant and shall continue to accrue
Creditable Service until he dies, retires, or becomes ineligible for further
payments under such Program, and his Compensation in the last full year of his
employment shall be deemed to be his annual Compensation for purposes of the
Plan during such period. In the event such a Participant dies, retires or
becomes ineligible for further payments under such Program and is not restored
to active service, any retirement allowance payable on his account under the
Plan shall be made on the basis of his age, Average Final Compensation and
Creditable Service at the time he died, retired or became ineligible.
(8) Maximum Trust Benefits. (a) Basic Limitation - Subject to the adjustments
provided under Subsection (8)(b) of this Section, and in accordance with Section
415(b) of the Code, the maximum annual benefit payable to a Participant in a
form described in this Section, commencing on or after the Participant's
sixty-second (62nd) birthday and prior to his sixty-fifth (65th) birthday under
this Plan and any other defined benefit plan maintained by the Company for any
Plan year shall, in no event, exceed the lesser of: (1) $90,000 (as adjusted in
accordance with Code Section 415(b)(2)(B) and regulations issued thereunder), or
(2) one hundred percent (100%) of the Participant's average total Compensation
for the three consecutive Plan Years during which he was a Participant and had
the greatest aggregate total compensation from the Company.
(b) Adjustments in the Limitation - (1) The maximum annual retirement
allowance permitted under Subsection (8)(a) to any Participant who has completed
less than ten (10) Years of Service with the Company shall be the amount
determined under Subsection (8)(a), multiplied by a fraction, the numerator of
which is the number of the Participant's Years of Service (including fractions
of a year) and the denominator of which is ten (10). (2) The maximum annual
retirement allowance permitted under Subsection (8)(a)(1) above shall be
adjusted annually (or when allowable) for increases in the cost of living, in
accordance with regulations issued by the Secretary of the Treasury pursuant to
the provisions of Section 415(d) of the Code, as amended. Each adjustment (when
allowable) shall be limited to the scheduled annual increase determined by the
commissioner of the Internal Revenue Service. Such cost of living adjustment
(when allowable) shall be effective not earlier than January 1 of the year in
which it is made. (3) The maximum annual retirement allowance payable under
Subsection (8)(a)(1) to any Participant who attains an early retirement age as
specified in Section 5(2)(b) that occurs prior to his attainment of age
sixty-two (62) shall be the Actuarial Equivalent of such maximum benefit under
Subsection (8)(a)(1) commencing at age sixty-two (62) but based on the greater
of the rate specified in Section 1(13) or a five percent (5.0%) interest rate,
but not less than $75,000. (4) The maximum annual retirement allowance payable
under Subsection (8)(a)(1) to any Participant whose actual retirement occurs
after he attains the normal retirement age specified in Section 5(2)(a) shall be
the Actuarial Equivalent of such maximum benefit under Subsection (8)(a)(1),
commencing at his Normal Retirement Date but based on the lesser of the rate
specified in Section 1(13) or a five percent (5.0%) interest rate.
21
<PAGE> 23
(c) Limitation for Multiple Plans - In any case in which an Employee is a
participant in both a tax-qualified defined benefit plan and a tax-qualified
defined contribution plan maintained by the Company, the sum of the defined
benefit plan fraction and the defined contribution plan fraction for any Plan
Year shall not exceed 1.0. In the event such sum would otherwise exceed 1.0, the
benefit projected under the defined benefit plan will be reduced as necessary so
that such sum shall equal 1.0.
(1) The defined benefit plan fraction for any Plan Year is a fraction: (a)
the numerator of which is the projected annual benefit of the Participant
under the Plan (determined as of the close of the Plan Year), and (b) the
denominator of which is the lesser of (i) or (ii), as follows: (i) 1.25
multiplied by the defined benefit plan dollar limitation under Subsection
(8)(a)(1) in effect for such year, or (ii) 1.4 multiplied by the amount
specified under Subsection (8)(a)(2) for such year, (determined as of the
close of the Plan Year).
(2) The defined contribution plan fraction for any calendar year is a
fraction: (a) the numerator of which is the sum of the "annual additions",
as defined in Section 415(c) of the Code, to the Participant's account as
of the close of the Plan Year, and (b) the denominator of which is the sum
of the lesser of (i) or (ii) for such year and each prior Year of Service
with the Company: (i) 1.25 multiplied by the defined contribution plan
dollar limitation in effect for such year, or (ii) 1.4 multiplied by
twenty-five percent (25%) of the Participant's Compensation for such year.
(9) Prior Plan Provisions. Anything to the contrary herein notwithstanding, the
Accrued Benefit and service credited for vesting purposes of any person who is a
Participant on December 31, 1984 and January 1, 1985 for any period of service
ending on or before December 31, 1984 shall be no less than the benefit he would
have accrued at December 31, 1984 or the vesting service he would have completed
at December 31, 1984 under the terms of the Plan as in effect on such date,
assuming his credited service and Average Final Compensation were computed on
such date.
(10) Limitation on Timing of Commencement of Benefit Payments. As required under
Sections 401(a)(14) and 401(a)(9) of the Code, the timing of the commencement of
payment of benefits under the Plan shall be subject to the following rules:
(a) General Rule - Unless the Participant otherwise elects, the payment of
benefits under the Plan to a Participant may not be delayed beyond the later of
the sixtieth (60th) day after the close of the Plan Year in which the latest of
the following events occurs:
(1) the Participant's 65th birthday,
(2) the tenth (10th) anniversary of the year in which the Participant
commenced participation in the Plan, or
22
<PAGE> 24
(3) the Participant's termination of service with the Company.
(b) In general, distribution of benefits shall not be made or commence
later than April 1 of the calendar year following the calendar year in which the
employee attains age 70-1/2. For the purposes of this Section, Participants who
are age 70-1/2 or older as of January 1, 1989, and who have not retired shall be
deemed to have attained age 70-1/2 on such date. Notwithstanding the foregoing,
a Participant who has attained age 70-1/2 either (i) before January 1, 1988, or
(ii) after December 31, 1998, and who is not a 5-percent owner (as defined in
Section 416(i) of the Code) will not commence payments until his retirement.
In the event a distribution of benefits to a Participant is required
to begin under this Subsection before a Participant's actual retirement, such
Participant's Accrued Benefit shall be determined as of the December 31
immediately preceding the date such distribution is required to begin. As of
each succeeding December 31 prior to the Participant's actual retirement and as
of his actual retirement, the Participant's Accrued Benefit shall be recomputed
as if each such date were his actual retirement date.However, the amount of any
additional Accrued Benefit resulting from such recomputation shall be reduced by
the Actuarial Equivalent of the total benefits received by the Participant under
the Plan prior to such recomputation. In no event, however, shall the
Participant's Accrued Benefit, upon any recomputation hereunder, be less than
the greater of (i) such Participant's Accrued Benefit as of December 31, 1994,
and (ii) such Participant's Accrued Benefit as of the immediately preceding
recomputation.
In the event a distribution of benefits to a Participant is not
required to begin under this Subsection before the Participant's actual
retirement, such Participant's Accrued Benefit shall be determined as of April 1
of the calendar year following the calendar year in which the Participant
attains age 70-1/2. As of each succeeding December 31 prior to the Participant's
actual retirement and as of his actual retirement, the Participant's Accrued
Benefit shall be recomputed as if each such date were his actual retirement
date. The amount of Accrued Benefit resulting from such recomputation shall be
the greater of (a) the Accrued Benefit computed in accordance with Section 5
(without regard to this Subsection) based on his Average Final Compensation and
Creditable Service as of the recomputation date or (b) the Actuarial Equivalent
of the Accrued Benefit determined at the immediately preceding recomputation
date. In no event, however, shall the Participant's Accrued Benefit, upon any
recomputation hereunder, be less than the greater of (i) such Participant's
Accrued Benefit as of December 31, 1998, and (ii) such Participant's Accrued
Benefit as of the immediately preceding recomputation.
(11) Compensation Limit. In addition to other applicable limitations which may
be set forth in the Plan and notwithstanding any other contrary provision of the
Plan, for Plan Years beginning on or after January 1, 1994, the annual
compensation of each employee taken into account under the Plan shall not exceed
the annual compensation limit established by the Omnibus Budget Reconciliation
Act of 1993 ("OBRA '93"). The annual compensation limit is $150,000, as adjusted
by the Commissioner of Internal Revenue for increases in the cost of living in
accordance with Section 401(a)(17) of the Code. The cost-of-living adjustment in
effect for a
23
<PAGE> 25
calendar year applies to any period, not exceeding 12 months, over which
compensation is determined (a "Determination Period") beginning in such calendar
year. If a Determination Period consists of fewer than 12 months, the OBRA '93
annual compensation limit will be multiplied by a fraction, the numerator of
which is the number of months in the Determination Period, and the denominator
of which is 12. For Plan Years beginning on or after January 1, 1994, any
reference in this Plan to the limitation under Section 401(a)(17) of the Code
shall mean the OBRA '93 annual compensation limit set forth in the provision.
If compensation for any prior Determination Period is taken into
account in determining a Participant's benefits accruing in the current Plan
Year, the compensation for that prior Determination Period is subject to the
OBRA '93 annual compensation limit in effect for that prior Determination
Period. For this purpose, for Determination Periods beginning before the first
day of the first Plan Year beginning on or after January 1, 1994, the OBRA '93
annual compensation limit is $150,000.
Notwithstanding any other provision in the Plan, each Section
401(a)(17) Participant's Accrued Benefit under this Plan will be the greater of:
(a) such Participant's Accrued Benefit as of the last day of the Plan Year
beginning before January 1, 1994, frozen in accordance with Section
1.401(a)(4)-13 of the Code regulations; or
(b) such Participant's Accrued Benefit determined with respect to the benefit
formula applicable for the Plan Year beginning on or after January 1,
1994, as applied to the Participant's total years of Creditable Service
taken into account under the Plan for purposes of benefit accruals.
For purposes of this Subsection, a Section 401(a)(17) Participant means a
Participant whose current Accrued Benefit as of a date on or after January 1,
1994, is based on Compensation for a year beginning prior to the first day of
the first Plan Year beginning on or after January 1, 1994, that exceeded
$150,000.
(12) Intentionally omitted.
(13) Required Cash-outs of Certain Accrued Benefits. If a Participant terminates
service and the present value of the vested accrued pension or survivor benefit
provided under Subsection 5(2), 5(3), or 5(4) in respect of such Participant is
equal to or less than $5,000, the person to whom such benefits would otherwise
be paid in monthly installments shall receive a lump-sum distribution of the
present value of the entire vested portion of such Accrued Benefit, except that,
in the case of a qualified joint and survivor annuity or qualified
pre-retirement survivor annuity, as such terms are defined under Code Sections
417(b) and 417(c), respectively, no such lump-sum distribution shall be made
after the annuity starting date, as defined under Section 417(f)(2) of the Code.
24
<PAGE> 26
For the purposes of determining the present value of a vested Accrued
Benefit under this Subsection in respect of (i) current and future Participants
who terminate service with the Company on and after January 1, 1997, and (ii)
former Participants who, as of January 1, 1997, have not previously received a
mandatory lump-sum distribution and are not currently receiving an annual
retirement allowance under the Plan, the interest rate assumption shall be the
annual rate of interest on 30-year U.S. Treasury securities in the third month
prior to the date of distribution; and the mortality rate assumption shall be
based on the GAM 1983 Mortality Table (with mortality rates composed of 50% of
the male rates and 50% of the female rates), as such may be amended from time to
time.
Notwithstanding Subsections 1(12) and 4(5) and any other provision herein
to the contrary, if a former Employee who has received a lump-sum distribution
of his entire non-forfeitable benefit under the Plan pursuant to this Subsection
is re-employed by the Company, he shall be treated as a new Employee and prior
service performed by the Employee in respect of such distribution shall be
disregarded for purposes of determining his Accrued Benefit under the Plan.
(14) Rollover of Eligible Distributions. This Section shall apply to
distributions made on or after January 1, 1993. Notwithstanding any provision in
the Plan to the contrary that would otherwise limit a distributee's election
under this Section, a distributee may elect, at the time and in the manner
prescribed by the Pension Committee, to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan specified by the
distributee in a direct rollover.
For purposes of this Section:
(a) "eligible rollover distribution" shall mean any distribution of all or any
portion of the balance to the credit of the distributee, except that an
eligible rollover distribution does not include (i) any distribution that
is one of a series of substantially equal payments (not less frequently
than annually) made for the life (or life expectancy) of the distributee
or the joint lives (or joint life expectancies) of the distributee and the
distributee's designated beneficiary, or for a period of ten years or
more, (ii) any distribution to the extent such distribution is required
under Section 401(a)(9) of the Code, and (iii) the portion of any
distribution that is not includible in gross income (determined without
regard to the exclusion for net unrealized appreciation with respect to
employer securities).
(b) "eligible retirement plan" shall mean an individual retirement account
described in Section 408(a) of the Code, an individual retirement annuity
described in Section 408(b) of the Code, an annuity plan described in
Section 403(a) of the Code, or an qualified trust described in Section
401(a) of the Code, that accepts the distributee's eligible rollover
distribution. However, in the case of an eligible rollover distribution to
a surviving spouse, an eligible retirement plan is an individual
retirement account or individual retirement annuity.
25
<PAGE> 27
(c) "distributee" shall mean a Participant or former Participant. In addition,
the Participant's or former Participant's surviving spouse and the
Participant's or former Participant's spouse or former spouse who is the
alternate payee under a qualified domestic relations order, as defined in
Section 414(p) of the Code, are distributees with regard to the interest
of the spouse or former spouse.
(d) "direct rollover" shall mean a payment by the Plan to the eligible
retirement plan specified by the distributee.
"(15) Additional Benefit Amounts for Certain Retirees. With respect to each
former Participant in the Plan, or surviving spouse or other designated
beneficiary of such former Participant, who in either case is listed by name or
social security number in the attached Appendix III, such person shall be paid
on a monthly basis, in addition to any monthly benefit such person is otherwise
entitled to receive under the terms of the Plan, the amount set opposite such
person's name in Appendix III, beginning May 1, 1998, and continuing until such
person's death. Thereafter, if such person is a former Participant and shall
have made one of the elections described in and in accordance with Section 3(b)
hereof and such election is then in effect and has not been revoked, such
payments shall continue during the life of, and shall be paid to, such person's
surviving spouse or other beneficiary designated in such election until his or
her death, provided, however, that, if such election provides for less than 100%
of the former Participant's retirement allowance be paid to his or her surviving
spouse or other beneficiary after the former Participant's death, the
supplemental payments provided for in this Section 5(15) to such surviving
spouse or other beneficiary shall be reduced in the same proportion as the
former Participant's retirement allowance is adjusted pursuant to such
election."
26
<PAGE> 28
SECTION 6 - CONTRIBUTIONS
================================================================================
(1) All contributions under the Plan shall be made by the Company, and no
contributions shall be required of Participants. The contributions shall be
payable at such intervals as may be agreed upon by the Company and the
Committee, but at least annually, and shall consist of such contributions as the
Board of Directors may deem advisable, but at least an amount sufficient to
maintain the Plan on a sound actuarial basis. All contributions shall be
transferred by the Company to the Trustee or Trustees to be used in accordance
with the Plan, except that such contributions are to revert to the Company,
without earnings thereon but reduced by any losses thereon, under the following
conditions:
(a) In the case of a contribution which is made by the Company by reason of a
mistake in fact, such contribution shall be returned to the Company within
one (1) year following its payment to the Plan; and
(b) If all or a portion of any contribution is determined to be non-deductible
under Section 404 of the Code, such contribution, to the extent that it is
determined to be non-deductible, shall be returned to the Company within
one (1) year following such determination.
(2) Forfeitures arising from termination of service, death, or for any other
reason shall not be applied to increase the benefits which any person would
otherwise receive under the Plan but shall be used to reduce Plan contributions.
27
<PAGE> 29
SECTION 7 - ADMINISTRATION OF THE PLAN
================================================================================
(1) The general administration of the Plan shall be the responsibility of a
Pension Committee of no less than three members appointed from time to time by
the Board of Directors to serve at the pleasure of the Board of Directors. The
Committee is designated as the named fiduciary within the meaning of Section
402(a) of the Employee Retirement Income Security Act of 1974.
(2) Any Employee appointed a member of the Committee shall serve without
compensation with respect to his services on the Committee. Any member of the
Committee may resign by delivering his written resignation to the Board of
Directors.
(3) The Board of Directors shall appoint one of the members of the Committee as
Chairman. The Secretary, who need not be one of the members of the Committee,
shall be designated by the Committee.
(4) The administrative expenses of the Plan shall be paid by the Company.
(5) The Committee shall designate bank depositories and shall delegate authority
in connection therewith. It may delegate any portion of its authority to
designated individuals or committees, and may retain legal counsel, auditors,
actuaries and consultants and obtain clerical, accounting and other services,
all as it deems necessary in carrying out the provisions of the Plan.
(6) The Committee may act at a meeting or in writing without a meeting. Meetings
shall be held upon such notice, at such places and at such times as the
Committee may from time to time determine. A majority of the member of the
Committee shall constitute a quorum for the transaction of business. All actions
taken by the Committee shall be by the vote of a majority of the members of the
Committee, including actions in writing taken without a meeting.
(7) The Committee from time to time may establish rules for the administration
of the Plan and the transaction of its business. All rules and decisions of the
Committee shall be uniformly and consistently applied to all Participants who
are similarly situated. When making a determination or calculation, the
Committee shall be entitled to rely upon information furnished to it by a
Participant, the Company, the legal counsel of the Company or the Trustee of the
Plan trust. The interpretation and construction of any provision of the Plan by
a majority of the members of the Committee shall be final and conclusive.
(8) The Committee shall adopt from time to time interest assumptions, service
tables, mortality tables and such other data, procedures and methods as may be
necessary or desirable for use in all actuarial calculations required in
connection with the Plan. As an aid to the Committee, the actuary designated by
the Committee shall make annual actuarial valuations of
28
<PAGE> 30
the assets and liabilities, actual and contingent, of the Plan, and shall
certify to the Committee the tables which he would recommend for use by the
Committee.
(9) The Committee shall establish and cause to be maintained a funding standard
account and such other and additional accounts as it deems necessary for the
proper administration of the Plan. It shall keep or cause to be kept in
convenient form such data as may be necessary for actuarial valuations of the
assets and liabilities of the Plan. The Committee shall prepare or cause to be
prepared annually a report showing in reasonable detail the assets and
liabilities of the Plan and giving a brief account of the operation of the Plan
for the past year, and recommending the amount of the Company's contribution to
the Plan for the ensuing year. Such report shall be submitted to the Board of
Directors and shall be filed in the office of the Secretary of the Committee.
(10) In addition to the foregoing, the Committee shall have such duties and
powers as may be necessary to discharge its duties hereunder, including, but not
by way of limitation, the following:
(a) to construe and interpret the Plan, decide all questions of
eligibility and determine the amount, manner and time of payment of any benefits
hereunder;
(b) to prescribe procedures to be followed by Participants or other
beneficiaries filing applications for benefits;
(c) to prepare and distribute in such manner as the Committee determines
to be appropriate, information explaining the Plan;
(d) to receive from the Company and from Participants such information as
shall be necessary for the proper administration of the Plan;
(e) to furnish the Company, upon request, such annual reports with respect
to the administration of the Plan as are reasonable and appropriate;
(f) to receive, review and keep on file (as it deems convenient or proper)
reports of the financial condition, and of the receipts and disbursements, of
the Plan trust from the Trustee; and
(g) to appoint or employ individuals to assist in the administration of
the Plan and any other agents it deems advisable, including legal and actuarial
counsel.
The Committee shall have no power to add to, subtract from or modify any
of the terms of the Plan, or to change or add to any benefits provided by the
Plan, or to waive or fail to apply any requirements for eligibility for a
benefit under the Plan.
29
<PAGE> 31
(11) The Committee shall issue directions to the Trustee concerning all benefits
which are to be paid from the Plan trust pursuant to the provisions of the Plan.
(12) The Committee may require a Participant or other beneficiary to complete
and file with the Committee an application for a benefit and all other forms
approved by the Committee, and to furnish all pertinent information requested by
the Committee. The Committee may rely upon all such information so furnished it,
including the Participant's or other beneficiary's current mailing address.
(13) The Committee and the individual members thereof shall be indemnified by
the Company and not from the Plan trust against any and all liabilities arising
by reason of any act or failure to act made in good faith pursuant to the
provisions of the Plan, including expenses reasonably incurred in the defense of
any claim relating thereto.
(14) In the event of an error in administering the Plan, including, without
limitation, as to eligibility, participation or Creditable Service of any
Participant, or as to the amount of payments made or to be made to a Participant
or other beneficiary, the Committee may take any action, including making such
contributions or payments or demanding such refunds or repayments it deems
appropriate, to place the Participant or other beneficiary as nearly as possible
in the position he would have been in had there been no error.
30
<PAGE> 32
SECTION 8 - MANAGEMENT OF ASSETS
================================================================================
(1) All assets of the Plan shall be held as a special trust for use in
connection with the Plan and providing the benefits and paying the expenses of
the Plan, and no part of the corpus or income shall be used for or diverted to
purposes other than for the exclusive benefit of Participants, retired
Participants and their beneficiaries under the Plan prior to the satisfaction of
all liabilities with respect to such Participants, retired Participants and
their beneficiaries under the Plan. No person shall have any interest in or
right to any part of the earnings of the trust, or any right in, or to, or under
the trust or any part of the assets thereof, except as and to the extent
expressly provided in the Plan and trust agreement.
(2) The Trustee or Trustees shall be appointed from time to time by the
Committee by appropriate instrument with such powers, duties, rights and
obligations as the Committee shall approve. The Committee may remove any Trustee
at any time, upon reasonable notice, and upon such removal or upon the
resignation of any Trustee the Committee shall designate a successor Trustee or
Trustees.
(3) The Committee shall determine the manner in which the funds of the Plan
shall be disbursed but subject to the provisions of the trust instrument under
which the assets of the Plan are held.
(4) The Committee shall have the power to appoint one or more investment
managers, within the meaning of Section 3(38) of the Employee Retirement Income
Security Act of 1974, to manage (including the power to acquire and dispose of)
any assets of the Plan which have been transferred to any Trustee or a specified
portion thereof. In the event that the Committee shall appoint such investment
managers, each such investment manager shall be solely responsible for the
management and control of the assets to which he or it is appointed.
31
<PAGE> 33
SECTION 9 - CERTAIN RIGHTS AND OBLIGATIONS
================================================================================
(1) It is the intention of the Company to continue the Plan and make its
contributions regularly each year, but the Company, by action of its Board of
Directors, may for any reason terminate or partially terminate the Plan. If all
liabilities to or on account of the Participants, retired Participants and their
beneficiaries have been satisfied or provided for in full and there is an amount
remaining due to erroneous actuarial computations during the previous life of
the Plan (within the meaning of the regulations under the Internal Revenue
Code), then and not otherwise the Company shall be entitled to receive such
remaining amount.
(2) The establishment of the Plan shall not be construed as conferring any legal
rights upon any Employee or any person for a continuation of employment nor
shall it interfere with the right of the Company to discharge any Employee and
to treat him without regard to the effect which such treatment might have upon
him as a Participant in the Plan.
(3) Any rulings made or acts taken under the Plan by the Board of Directors or
by the Committee with respect to classification of Employees, contributions, or
benefits shall be uniform in their nature and applicable to all those persons
similarly situated. No ruling shall be made or act taken which shall be
discriminatory under the provisions of the Internal Revenue Code.
(4) The provisions of this Subsection (4) shall apply to any one of the 25
highest paid Employees of the Company on any "Commencement Date" whose
anticipated retirement allowance provided under the Plan at normal retirement
date exceeds $1,500 per annum. "Commencement Date" shall mean the effective date
of any amendment to the Plan which increases the benefits. In the event that
during the first 10 years following a "Commencement Date" the Plan is
terminated, the amount of the retirement allowance provided under the Plan for
any one of the aforesaid Employees shall not be greater than the amount of
allowance that can be provided by the largest of the following amounts: (a)
$20,000, or (b) 20% of the first $50,000 of the Participant's "Annual
Compensation", multiplied by the number of years and fractions thereof since the
"Commencement Date" in which the full current costs have been met. As used in
this paragraph, "Annual Compensation" means average compensation during the five
calendar years (or the Participant's period of employment if less than five
years) immediately preceding the date of termination of the Plan or immediately
preceding the date of commencement of retirement benefits under the Plan, if
earlier. The foregoing conditions shall not restrict the current payment of full
retirement benefits called for by the Plan for any Participant or beneficiary
who has retired while the Plan is in full effect and its full current costs have
been met.
In the event that the present value of Plan assets as of the date of
termination of the Plan, calculated utilizing Pension Benefit Guaranty
Corporation assumptions as of the date of termination, equals or exceeds the
present value of the total Accrued Benefits for all Participants
32
<PAGE> 34
(whether or not nonforfeitable), Subsection (4) shall not be applicable to
restrict the Accrued Benefits payable to the twenty-five (25) highest paid
Employees.
This Subsection (4) is included in this Plan to conform to the
requirements of Treasury Regulations Section 1.401-4(c) and shall cease to be
effective at such time as the provisions of Treasury Regulations Section
1.401-4(c) or any substitute therefor are no longer effective or applicable.
(5) If any company is now or hereafter becomes an Affiliate of the Company, the
Board of Directors may include the employees of such Affiliate in the
participation in the Plan upon appropriate action by such company necessary to
adopt the Plan. In such event, or if any persons become Employees of the Company
as the result of merger or consolidation or as the result of acquisition of all
or part of the assets or business of another company, the Board of Directors
shall determine to what extent, if any, credit and benefits shall be granted for
previous service with such Affiliate, but subject to the continued qualification
of the trust for the Plan as tax exempt under the Internal Revenue Code. Any
such Affiliate may terminate its participation in the Plan upon appropriate
action by it, in which event the funds of the Plan held on account of
Participants in the employ of such company not yet retired, after provision in
full for all Participants who have retired from the employ of such company,
shall be determined by the Committee on the basis of actuarial valuation, and
shall be applied as provided in Section 9(1), in the manner there provided if
the Plan should be terminated, or shall be segregated by the Trustee as a
separate trust, pursuant to certification to the Trustee by the Committee
continuing the Plan as a separate Plan for the employees of such company under
which the Board of Directors of such company shall succeed to all the powers and
duties of the Board of Directors, including the appointment of members of the
Committee.
(6) The Plan shall not be merged no consolidated with, nor shall there be a
transfer of any of its assets or liabilities to, any other plan, unless each
Participant, former Participant or beneficiary shall (if the resulting plan were
then terminated) be entitled to receive a benefit immediately after the merger,
consolidation or transfer which is equal to or greater than the benefit he would
have been entitled to receive immediately before the merger, consolidation or
transfer (if the Plan had then been terminated).
(7) Upon the Plan's termination or partial termination, the rights of all
affected Employees to benefits accrued to the date of such termination or
discontinuance, to the extent then funded, shall be nonforfeitable.
(8) Where a Participant or beneficiary is receiving benefits under the Plan, or
where a Participant has been separated from service and has nonforfeitable
rights to benefits under the Plan, such benefits will not be decreased because
of an increase in the benefit levels or wage payments under Title II of the
Social Security Act, if such increase takes place after the later of (a) the
last day of the Participant's service with Company or (b) September 2, 1974.
(9) Unless otherwise specifically provided herein, the terms of the Plan in
effect at the date
33
<PAGE> 35
an Employee's service terminates shall determine his rights and benefits
thereafter.
34
<PAGE> 36
SECTION 10 - CLAIM PROCEDURES
================================================================================
(1) Every claim for benefits under the Plan shall be in writing directed to the
Committee or its designee.
(2) Each claim filed shall be passed upon by the Committee within a reasonable
time from its receipt. If a claim is denied in whole or in part the claimant
shall be given written notice of the denial in language calculated to be
understood by the claimant, which notice shall: (i) specify the reason or
reasons for the denial; (ii) specify the Plan provisions giving rise to the
denial; and (iii) describe any further information or documentation necessary
for the claim to be honored and explain why such documentation or information is
necessary, and explain the Plan's review procedure.
(3) Upon the written request of any claimant whose claim has been denied in
whole or in part, the Committee shall make a full and fair review of the claim
and furnish the claimant with a written decision concerning it.
35
<PAGE> 37
SECTION 11 - NON-ALIENATION OF BENEFITS
================================================================================
(1) No benefit under the Plan shall be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance or charge. Any
attempt so to anticipate, alienate, sell, transfer, assign, pledge, encumber or
charge the same shall be void; nor shall any such benefit be in any manner
liable for or subject to the debts, contracts, liabilities, engagements or torts
of the person entitled to such benefit, unless the assignment of such benefit or
right is pursuant to a "qualified domestic relations order" as defined at
Section 206(d)(3)(B)(i) of ERISA, as amended by the Retirement Equity Act of
1984, and related regulations.
(2) If any person entitled to a benefit under the Plan becomes bankrupt or
attempts to anticipate, alienate, sell, transfer, assign, pledge, encumber or
charge any benefit under the Plan except as specifically provided herein, then
such benefit shall, in the discretion of the Committee, cease and determine. In
that event the Committee shall hold or apply the same for the benefit of such
person, his spouse, children, or other dependents, or any of them in such manner
and in such proportion as the Committee may deem proper.
36
<PAGE> 38
SECTION 12 - TOP HEAVY PLAN
================================================================================
(1) Precedence of Section. Anything in this Plan to the contrary
notwithstanding, the provisions of this Section 12 shall supercede and take
precedence over any other provisions of the Plan for any Plan Year in which the
Plan is determined to be a Top Heavy Plan as determined under Section 12(3).
(2) Definitions. For purposes of determining whether the Plan is a Top Heavy
Plan, as determined under Section 12(3) below, for any Plan Year commencing on
or after January 1, 1984, the following terms, wherever capitalized, shall have
the meanings set forth below:
(a) Accrued Benefit - "Accrued Benefit" means the benefit accrued by a
Participant under Section 5 of the Plan.
(b) Determination Date - "Determination Date" means the date on which the
Plan is tested to determine if it is a Top Heavy Plan, which date shall be the
last day of the Plan Year preceding the Plan Year for which the determination is
being made.
(c) Key Employee - "Key Employee" means an Employee who, at any time
during the current Plan Year or any of the four (4) preceding Plan Years, is or
was:
(1) Officer - An officer of the Company (but not more than the lesser of:
(a) fifty (50) Employees, or (b) the greater of three (3) or ten percent
of the Employees of the Company shall be considered officers for this
purposes) whose annual Compensation is at least $45,000 or such greater
amount as may be recognized for increase in the cost of living in
accordance with Code Section 416(i)(1)(A)(i), or
(2) Employee Owner - One (1) of the ten (10) Employees owning the largest
interests in the Company provided that his annual Compensation is at least
$30,000 or such greater amount as may be recognized for increases in the
cost of living in accordance with Code Section 416(i)(1)(A)(ii) (for
purposes of this Section 12(2)(c)(2), if two (2) Employees have the same
interest in the Company, the Employee with the greater annual Compensation
shall be treated as having a larger interest), or
(3) Five Percent Shareholder - An Employee who is an owner of five percent
(5%) or more of the Company, or
(4) Highly Compensated Shareholder - An Employee who is an owner of one
percent (1%) or more of the Company and who has annual Compensation from
the Company in excess of $150,000.
37
<PAGE> 39
(d) Former Key Employee - "Former Key Employee" means a Participant in the
Plan who, at any time during the four (4) preceding Plan Years, was a Key
Employee but who is not a Key Employee in the current Plan Year or who
terminated his service with the Company in one of the four (4) preceding Plan
Years and was not a Key Employee in the Plan Year in which he terminated.
(e) Non-Key Employee - "Non-Key Employee" means a Participant in the Plan
who, at any time during the current Plan Year, is neither a Key Employee nor a
Former Key Employee.
(f) Top Heavy Plan - "Top Heavy Plan" means a Plan which is determined to
be a Top Heavy Plan for a Plan Year, as described in Section 12(3).
(3) Determination of Top Heavy Plan Status. With respect to each Plan Year
commencing on or after January 1, 1984, a calculation shall be made as of the
applicable Determination Date to determine if the Plan is a Top Heavy Plan for
such Plan Year. A Plan shall be considered to be a Top Heavy Plan for a Plan
Year if the aggregate present value of the Accrued Benefit of Key Employees
(excluding Former Key Employees) under the Plan exceeds sixty percent (60%) of
the aggregate present value of the Accrued Benefit of all Key Employees
(excluding Former Key Employees) and all Non-Key Employees under the Plan,
determined as of the Determination Date. In making such determination, the
Accrued Benefit of all individuals who were not employed by the Company during
the five (5) year period ending on the Determination Date shall be excluded. In
determining if the Plan is a Top Heavy Plan, it shall be aggregated with each
other plan of the Company and/or a related organization in the required
aggregation group as defined at Section 416(g)(2)(A)(i) of the Code and may be
aggregated with any other plans of the Company and/or a related organization in
the permissive aggregation group as defined at Section 416(g)(2)(A)(ii) of the
Code.
(4) Intentionally omitted.
(5) Vesting in Top Heavy Plan Year. With respect to any Plan Year for which the
Plan is determined to be a Top Heavy Plan, each Participant's accrued retirement
allowance benefit shall vest in accordance with the following vesting schedule,
in lieu of the vesting provisions described in Section 4:
<TABLE>
<CAPTION>
Years of Service Vesting Percentage
---------------- ------------------
<S> <C>
Less than 2 0%
2 but less than 3 20%
3 but less than 4 40%
4 but less than 5 60%
5 but less than 6 80%
6 or more 100%
</TABLE>
38
<PAGE> 40
(6) Minimum Benefit Under Top Heavy Plan. Anything in Section 5 to the contrary
notwithstanding, if the Plan is determined to be a Top Heavy Plan for any Plan
Year commencing on or after January 1, 1984, in no event shall the annual
retirement allowance payable to a Participant in the form and manner and at the
time specified in Section 5 be less than: (a) 2.0% of the Participant's average
Compensation for the five (5) consecutive year period in which his Compensation
from the Company was the highest, multiplied by; (b) the number of Plan Years
for which the Plan is determined to be a Top Heavy Plan, but in no event more
than ten (10) such Plan Years.
(7) Maximum Limitation Under Top Heavy Plan. With respect to any Plan Year for
which the Plan is determined to be a Top Heavy Plan, a 1.0 limitation shall be
substituted for the 1.25 limitations at Subsection (8)(c)(1)(b)(i) and
(8)(c)(2)(b)(i) of Section 5.
39
<PAGE> 41
SECTION 13 - AMENDMENTS
================================================================================
The Board of Directors may, at any time and from time to time, modify or amend
in whole or in part any or all of the provisions of the Plan; provided that no
such modification or amendment shall make it possible for any part of the assets
of the Plan to be used for, or diverted to, purposes other than for the
exclusive benefit of Participants, former Participants and their beneficiaries
under the Plan prior to the satisfaction of all Plan liabilities to them.
40
<PAGE> 42
SECTION 14 - CONSTRUCTION
================================================================================
The Plan shall be construed, regulated and administered under the laws of the
State of New York and the United States.
41
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.115.A
<SEQUENCE>10
<DESCRIPTION>RIDERS TO PLIT DOLLAR LIFE INSURANCE AGREEMENT
<TEXT>
<PAGE> 1
Exhibit 10.115a
Tiffany & Co.
Report on Form 10-K
Fiscal 1998
Tiffany and Company
Split-Dollar Life Insurance Agreement
================================================================================
RIDER NO. 2 TO SPLIT-DOLLAR LIFE INSURANCE AGREEMENT
Employee: William R. Chaney
Owner: 1994 Chaney Family Trust u/a 2/23/94
THIS RIDER amends that certain Split-Dollar Life Insurance Agreement made
as of the 23rd day of February, 1994 by and between Tiffany and Company
("Tiffany") and the Employee and Owner named above (the "Agreement") and Rider
No.1 to the Agreement. This Rider shall become part of the Agreement and any
term or phrase defined in the Agreement shall have the same meaning in this
Rider except as herein provided. To the extent that any term or provision of
this Rider conflicts with any term or provision of the Agreement, this Rider
shall supersede and control the Agreement and Rider No. 1.
Defined Term. The following initially capitalized term shall have the meaning
ascribed to it below in lieu of that provided in Rider No. 1:
"Reduced Employee Death Benefit" means a reduced death benefit payable to
Owner from the Policy pursuant to this Agreement equal to Two Hundred
Percent (200%) of Ending Compensation less Five Hundred Thousand Dollars
($500,000).
IN WITNESS WHEREOF, the parties have signed and sealed this Rider as of the ___
day of October, 1998.
WITNESS:
- ------------------------------ ----------------------------------------
William R. Chaney (Employee)
ATTEST: Tiffany and Company
("Tiffany")
By
- ------------------------------ --------------------------------------
Patrick B. Dorsey James N. Fernandez
Secretary Executive Vice President
WITNESS: 1994 Chaney Famjily Trust u/a 2/23/94
(owner)
By
- ----------------------------- --------------------------------------
Carole C. Prosser, Trustee
1
<PAGE> 2
Tiffany and Company
Split-Dollar Life Insurance Agreement
================================================================================
RIDER NO. 3 TO SPLIT-DOLLAR LIFE INSURANCE AGREEMENT
Employee: William R. Chaney
Owner: 1994 Chaney Family Trust u/a 2/23/94
THIS RIDER amends that certain Split-Dollar Life Insurance Agreement made
as of the 23rd day of February, 1994 by and between Tiffany and Company
("Tiffany") and the Employee and Owner named above (the "Agreement") and Riders
Nos. 1 and 2 to the Agreement. This Rider shall become part of the Agreement and
any term or phrase defined in the Agreement shall have the same meaning in this
Rider except as herein provided. To the extent that any term or provision of
this Rider conflicts with any term or provision of the Agreement, this Rider
shall supersede and control the Agreement and Rider Nos. 1 and 2.
Defined Terms. The following initially capitalized term shall have the meaning
ascribed to it below in lieu of that provided in Rider No. 1:
"Retirement" means January 31, 1999, whether or not Employee continues to
be employed by Tiffany.
IN WITNESS WHEREOF, the parties have signed and sealed this Rider as of the ___
day of March, 1999.
WITNESS:
- ------------------------------ ----------------------------------------
William R. Chaney (Employee)
ATTEST: Tiffany and Company
("Tiffany")
By
- ------------------------------ --------------------------------------
Patrick B. Dorsey James N. Fernandez
Secretary Executive Vice President
WITNESS: 1994 Chaney Family Trust u/a 2/23/94
(owner)
By
- ----------------------------- --------------------------------------
Carole C. Prosser, Trustee
1
<PAGE> 3
Tiffany and Company
Split-Dollar Life Insurance Agreement
================================================================================
RIDER NO. 2 TO SPLIT-DOLLAR LIFE INSURANCE AGREEMENT
Employee: William R. Chaney
Owner: Babette C. Chaney et al Trust u/a 2/23/94
THIS RIDER supplements and amends that certain Split-Dollar Life Insurance
Agreement made as of the 23rd day of February, 1994 by and between Tiffany and
Company ("Tiffany") and the Employee and Owner named above (the "Agreement") and
Rider No. 1 to the Agreement. This Rider shall become part of the Agreement and
any term or phrase defined in the Agreement shall have the same meaning in this
Rider except as herein provided. To the extent that any term or provision of
this Rider conflicts with any term or provision of the Agreement, this Rider
shall supersede and control the Agreement and Rider No. 1 thereto.
Defined Terms. The following initially capitalized terms and phrases are hereby
deleted from the list of Defined Terms provided in Rider No. 1: "Ending
Compensation" and "Reduced Employee Death Benefit." The following initially
defined term is hereby added to the list of Defined Terms set forth in Paragraph
A. in Rider No. 1 and shall be used in substitution for the term "Reduced
Employee Death Benefit" wherever such deleted term is used throughout Rider No.
1:
"Post-Retirement Employee Death Benefit" means a death benefit payable to
Owner from the Policy pursuant to this Agreement equal to Five Hundred
Thousand Dollars ($500,000).
IN WITNESS WHEREOF, the parties have signed and sealed this Rider as of
the _____ day of October, 1998.
WITNESS:
- ------------------------------ ----------------------------------------
William R. Chaney (Employee)
ATTEST: Tiffany and Company
("Tiffany")
By
- ------------------------------ --------------------------------------
Patrick B. Dorsey James N. Fernandez
Secretary Senior Vice President
WITNESS: Babette C. Chaney et al Trust
u/a 2/23/94 (owner)
By
- ----------------------------- --------------------------------------
Carole C. Prosser, Trustee
1
<PAGE> 4
Tiffany and Company
Split-Dollar Life Insurance Agreement
================================================================================
RIDER NO. 3 TO SPLIT-DOLLAR LIFE INSURANCE AGREEMENT
Employee: William R. Chaney
Owner: Babette C. Chaney Trust u/a 2/23/94
THIS RIDER supplements and amends that certain Split-Dollar Life Insurance
Agreement made as of the 23rd day of February, 1994 by and between Tiffany and
Company ("Tiffany") and the Employee and Owner named above (the "Agreement") and
Riders Nos.1 and 2 to the Agreement. This Rider shall become part of the
Agreement and any term or phrase defined in the Agreement shall have the same
meaning in this Rider except as herein provided. To the extent that any term or
provision of this Rider conflicts with any term or provision of the Agreement,
this Rider shall supersede and control the Agreement and Rider Nos. 1 and 2
thereto.
Defined Terms. The following initially capitalized term shall have the meaning
ascribed to it below in lieu of that provided in Rider No. 1:
"Retirement" means January 31, 1999, whether or not Employee continues to
be employed by Tiffany.
IN WITNESS WHEREOF, the parties have signed and sealed this Rider as of the ___
day of March, 1999.
WITNESS:
- ------------------------------ ----------------------------------------
William R. Chaney (Employee)
ATTEST: Tiffany and Company
("Tiffany")
By
- ------------------------------ --------------------------------------
Patrick B. Dorsey James N. Fernandez
Secretary Senior Vice President
WITNESS: Babette C. Chaney et al Trust u/a
2/23/94 (owner)
By
- ----------------------------- --------------------------------------
Carole C. Prosser, Trustee
1
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.116.A
<SEQUENCE>11
<DESCRIPTION>AMENDMENTS NOS. 6-8 TO CREDIT AGREEMENT
<TEXT>
<PAGE> 1
Exhibit 10.116a
Tiffany & Co.
Report on Form 10-K
Fiscal 1998
TIFFANY & CO.
AMENDMENT NO. 6
AMENDMENT NO. 6 (this "Amendment"), dated as of October 1, 1998, to the
Credit Agreement, dated as of June 26, 1995, by and among Tiffany & Co., Tiffany
and Company, Tiffany & Co. International, the Subsidiary Borrowers thereto, the
Lenders party thereto, The Bank of New York, as Issuing Bank and as Swing Line
Lender, The Bank of New York, as Arranging Agent, and The Bank of New York, as
Administrative Agent, as amended by Amendment No. 1, dated as of November 9,
1995, Amendment No. 2, dated as of August 15, 1996, Amendment No. 3, dated as of
January 22, 1997, Amendment No. 4, dated as of August 4, 1997, and Amendment No.
5, dated as of November 20, 1997 (as amended, the "Credit Agreement").
Except as otherwise provided herein, capitalized terms used herein which
are not defined herein shall have the meanings set forth in the Credit
Agreement.
In consideration of the covenants, conditions and agreements hereinafter
set forth, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, and pursuant to Section 11.1 of the
Credit Agreement, the Parent, the Borrowers and the Administrative Agent hereby
agree as follows:
1. Section 8.8(c) of the Credit Agreement is hereby amended and restated
in its entirety to read as follows:
and (c) the Parent may from time to time purchase up to $150,000,000
in aggregate amount of its Stock, provided that immediately before
and after giving effect thereto no Default or Event of Default shall
or would exist.
2. This Amendment shall become effective immediately upon the receipt by
the Administrative Agent of this Amendment executed by a duly authorized officer
or officers of the Parent, the Borrowers, the Administrative Agent, the
Arranging Agent, the Issuing Bank and Swing Line Lender, and the Required
Lenders. In all other respects the Credit Agreement and the other Loan Documents
shall remain in full force and effect.
3. In order to induce the Administrative Agent to execute this Amendment
and the Arranging Agent, the Issuing Bank and Swing Line Lender, and the Lenders
to consent thereto, the Parent and the Borrowers each hereby (a) certifies that,
on the date hereof and
<PAGE> 2
immediately before and after giving effect to this Amendment, all
representations and warranties contained in the Credit Agreement are and will be
true and correct in all respects, (b) certifies that, immediately before and
after giving effect to this Amendment, no Default or Event of Default exists or
will exist under the Loan Documents, and (c) agrees to pay the reasonable fees
and disbursements of counsel to the Administrative Agent incurred in connection
with the preparation, negotiation and closing of this Amendment.
4. Each of the Parent and the Borrowers hereby (a) reaffirms and admits
the validity, enforceability and continuation of all the Loan Documents to which
it is a party, and its obligations thereunder, and (b) agrees and admits that as
of the date hereof it has no valid defenses to or offsets against any of its
obligations to the Administrative Agent, the Arranging Agent, the Issuing Bank
and Swing Line Lender, or the Lenders under the Loan Documents to which it is a
party.
5. This Amendment may be executed in any number of counterparts, each of
which shall be an original and all of which shall constitute one agreement. It
shall not be necessary in making proof of this Amendment to produce or account
for more than one counterpart signed by the party to be charged.
6. This Amendment is being delivered in and is intended to be performed in
the State of New York and shall be construed and enforceable in accordance with,
and be governed by, the internal laws of the State of New York without regard to
principles of conflict of laws.
The parties have caused this Amendment to be duly executed as of the date
first written above.
TIFFANY & CO., a Delaware corporation
By:_______________________________________
Name:_____________________________________
Title:____________________________________
TIFFANY AND COMPANY, a New York
corporation
By:_______________________________________
Name:_____________________________________
Title:____________________________________
2
<PAGE> 3
TIFFANY & CO. INTERNATIONAL, a
Delaware corporation
By:_______________________________________
Name:_____________________________________
Title:____________________________________
SOCIETE FRANCAISE POUR LE DEVELOPPMENT DE
LA PORCELAINE D'ART (S.A.R.L.), a French
corporation
By:_______________________________________
Name:_____________________________________
Title:____________________________________
TIFFANY & CO. OF NEW YORK LIMITED, a Hong
Kong corporation
By:_______________________________________
Name:_____________________________________
Title:____________________________________
TIFFANY-FARAONE S.P.A., an Italian
corporation
By:_______________________________________
Name:_____________________________________
Title:____________________________________
TIFFANY & CO. JAPAN INC., a Delaware
corporation
By:_______________________________________
Name:_____________________________________
Title:____________________________________
3
<PAGE> 4
TIFFANY & CO. PTE, LTD., a Singapore
corporation
By:_______________________________________
Name:_____________________________________
Title:____________________________________
TIFFANY & CO, a United Kingdom corporation
By:_______________________________________
Name:_____________________________________
Title:____________________________________
TIFFANY & CO. WATCH CENTER S.A., a Swiss
corporation
By:_______________________________________
Name:_____________________________________
Title:____________________________________
TIFFCO KOREA LTD., a Korean corporation
By:_______________________________________
Name:_____________________________________
Title:____________________________________
THE BANK OF NEW YORK, as Administrative
Agent
By:_______________________________________
Name:_____________________________________
Title:____________________________________
4
<PAGE> 5
AGREED AND CONSENTED TO:
THE BANK OF NEW YORK, as
Arranging Agent, as the Issuing
Bank and Swing Line Lender, and
as a Lender
By:_______________________________________
Name:_____________________________________
Title:____________________________________
THE CHASE MANHATTAN BANK
By:_______________________________________
Name:_____________________________________
Title:____________________________________
THE DAI-ICHI KANGYO BANK
LIMITED (NEW YORK BRANCH)
By:_______________________________________
Name:_____________________________________
Title:____________________________________
THE FUJI BANK, LTD.
By:_______________________________________
Name:_____________________________________
Title:____________________________________
5
<PAGE> 6
FLEET NATIONAL BANK
By:_______________________________________
Name:_____________________________________
Title:____________________________________
By:_______________________________________
Name:_____________________________________
Title:____________________________________
FLEET PRECIOUS METALS INC.
By:_______________________________________
Name:_____________________________________
Title:____________________________________
By:_______________________________________
Name:_____________________________________
Title:____________________________________
6
<PAGE> 7
TIFFANY & CO.
AMENDMENT NO. 7
AMENDMENT NO. 7 (this "Amendment"), dated as of November 30, 1998, to the
Credit Agreement, dated as of June 26, 1995, by and among Tiffany & Co., Tiffany
and Company, Tiffany & Co. International, the Subsidiary Borrowers thereto, the
Lenders party thereto, The Bank of New York, as Issuing Bank and as Swing Line
Lender, The Bank of New York, as Arranging Agent, and The Bank of New York, as
Administrative Agent, as amended by Amendment No. 1, dated as of November 9,
1995, Amendment No. 2, dated as of August 15, 1996, Amendment No. 3, dated as of
January 22, 1997, Amendment No. 4, dated as of August 4, 1997, Amendment No. 5,
dated as of November 20, 1997, and Amendment No. 6, dated as of October 1, 1998
(as amended, the "Credit Agreement").
Except as otherwise provided herein, capitalized terms used herein which
are not defined herein shall have the meanings set forth in the Credit
Agreement.
In consideration of the covenants, conditions and agreements hereinafter
set forth, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, and pursuant to Section 11.1 of the
Credit Agreement, the Parent, the Borrowers and the Administrative Agent hereby
agree as follows:
1. Section 1.1 of the Credit Agreement is hereby amended to amend and
restate in its entirety clause (g) of the definition of "Indebtedness" to read
as follows:
and (g) Contingent Obligations of such Person of Indebtedness of
others.
2. Section 2.1(e)(iii) of the Credit Agreement is hereby amended to delete
the amount "$5,000,000" appearing at the end thereof and to replace it with the
amount "$6,000,000".
3. Section 8.1 of the Credit Agreement is hereby amended and restated in
its entirety to read as follows:
8.1. Indebtedness
Create, incur, assume or suffer to exist any Indebtedness, or permit
any of its Subsidiaries so to do, except any one or more of the following
types of Indebtedness: (a) Indebtedness under the Loan Documents, (b)
Indebtedness of the Subsidiaries of the Parent in an aggregate principal
amount determined on a Consolidated basis not in excess of $35,000,000 at
any one time outstanding, provided that (i) immediately before and after
giving effect to the creation, incurrence or assumption of such
Indebtedness no Default or Event of Default
7
<PAGE> 8
shall or would exist and (ii) if such Indebtedness is secured, the Lien
securing such Indebtedness is permitted by Section 8.3, (c) Indebtedness
set forth on Schedule 8.1 and any refinancings, extensions and renewals
thereof, (d) Intercompany Debt and (e) Indebtedness of the Parent (which,
in the case of the Parent's proposed Indebtedness in the form of senior
notes up to a maximum aggregate principal amount of $100,000,000 to be
issued in or around December, 1998, may be guaranteed by Tiffany, Tiffany
International and/or Tiffany Japan), provided that immediately before and
after giving effect to the creation, incurrence or assumption of such
Indebtedness no Default or Event of Default shall or would exist.
4. Section 8.2(ii) of the Credit Agreement is hereby amended and restated
in its entirety to read as follows:
(ii) Interest Rate Protection Arrangements and Other Hedging
Arrangements entered into in the ordinary course of business in
respect of Indebtedness permitted under Section 8.1.
5. Section 8.7(i) of the Credit Agreement is hereby amended and restated
in its entirety to read as follows:
(i) Acquisitions permitted by Section 8.6 and Restricted Payments
permitted by Section 8.8.
6. Schedule 8.1 to the Credit Agreement is hereby amended and restated in
its entirety in the form attached hereto.
7. Exhibit A-2 to the Credit Agreement is hereby amended and restated in
its entirety in the form attached hereto.
8. This Amendment shall become effective immediately upon the receipt by
the Administrative Agent of this Amendment executed by a duly authorized officer
or officers of the Parent, the Borrowers, the Administrative Agent, the
Arranging Agent, the Issuing Bank and Swing Line Lender, and the Required
Lenders. In all other respects the Credit Agreement and the other Loan Documents
shall remain in full force and effect.
9. In order to induce the Administrative Agent to execute this Amendment
and the Arranging Agent, the Issuing Bank and Swing Line Lender, and the Lenders
to consent thereto, the Parent and the Borrowers each hereby (a) certifies that,
on the date hereof and immediately before and after giving effect to this
Amendment, all representations and warranties contained in the Credit Agreement
are and will be true and correct in all respects, (b) certifies that,
immediately before and after giving effect to this Amendment, no Default or
Event of Default exists or will exist under the Loan Documents, and (c) agrees
to pay the reasonable fees and disbursements of counsel to the
8
<PAGE> 9
Administrative Agent incurred in connection with the preparation, negotiation
and closing of this Amendment.
10. Each of the Parent and the Borrowers hereby (a) reaffirms and admits
the validity, enforceability and continuation of all the Loan Documents to which
it is a party, and its obligations thereunder, and (b) agrees and admits that as
of the date hereof it has no valid defenses to or offsets against any of its
obligations to the Administrative Agent, the Arranging Agent, the Issuing Bank
and Swing Line Lender, or the Lenders under the Loan Documents to which it is a
party.
11. This Amendment may be executed in any number of counterparts, each of
which shall be an original and all of which shall constitute one agreement. It
shall not be necessary in making proof of this Amendment to produce or account
for more than one counterpart signed by the party to be charged.
12. This Amendment is being delivered in and is intended to be performed
in the State of New York and shall be construed and enforceable in accordance
with, and be governed by, the internal laws of the State of New York without
regard to principles of conflict of laws.
9
<PAGE> 10
The parties have caused this Amendment to be duly executed as of the date
first written above.
TIFFANY & CO., a Delaware corporation
By:_______________________________________
Name:_____________________________________
Title:____________________________________
TIFFANY AND COMPANY, a New York
corporation
By:_______________________________________
Name:_____________________________________
Title:____________________________________
TIFFANY & CO. INTERNATIONAL, a Delaware
corporation
By:_______________________________________
Name:_____________________________________
Title:____________________________________
SOCIETE FRANCAISE POUR LE DEVELOPPMENT DE
LA PORCELAINE D'ART (S.A.R.L.), a French
corporation
By:_______________________________________
Name:_____________________________________
Title:____________________________________
10
<PAGE> 11
TIFFANY-FARAONE S.P.A., an Italian
corporation
By:_______________________________________
Name:_____________________________________
Title:____________________________________
TIFFANY & CO. JAPAN INC., a Delaware
corporation
By:_______________________________________
Name:_____________________________________
Title:____________________________________
TIFFANY & CO. PTE, LTD., a Singapore
corporation
By:_______________________________________
Name:_____________________________________
Title:____________________________________
TIFFANY & CO, a United Kingdom corporation
By:_______________________________________
Name:_____________________________________
Title:____________________________________
11
<PAGE> 12
TIFFANY & CO. WATCH CENTER S.A., a Swiss
corporation
By:_______________________________________
Name:_____________________________________
Title:____________________________________
TIFFCO KOREA LTD., a Korean corporation
By:_______________________________________
Name:_____________________________________
Title:____________________________________
TIFFANY & CO. MEXICO, S.A. de C.V., a
Mexican corporation
By:_______________________________________
Name:_____________________________________
Title:____________________________________
THE BANK OF NEW YORK, as Administrative
Agent
By:_______________________________________
Name:_____________________________________
Title:____________________________________
12
<PAGE> 13
AGREED AND CONSENTED TO:
THE BANK OF NEW YORK, as
Arranging Agent, as the Issuing
Bank and Swing Line Lender, and
as a Lender
By:_______________________________________
Name:_____________________________________
Title:____________________________________
THE CHASE MANHATTAN BANK
By:_______________________________________
Name:_____________________________________
Title:____________________________________
THE DAI-ICHI KANGYO BANK
LIMITED (NEW YORK BRANCH)
By:_______________________________________
Name:_____________________________________
Title:____________________________________
THE FUJI BANK, LTD.
By:_______________________________________
Name:_____________________________________
Title:____________________________________
13
<PAGE> 14
FLEET NATIONAL BANK
By:_______________________________________
Name:_____________________________________
Title:____________________________________
By:_______________________________________
Name:_____________________________________
Title:____________________________________
FLEET PRECIOUS METALS INC.
By:_______________________________________
Name:_____________________________________
Title:____________________________________
By:_______________________________________
Name:_____________________________________
Title:____________________________________
14
<PAGE> 15
Schedule 8.1
List of Existing Indebtedness
1. $51,500,000 7.52% Senior Notes due January 31, 2003 of Parent (as
guaranteed by Tiffany, Tiffany International and Tiffany Japan).
2. $10,000,000 unsecured uncommited line of credit provided by The Bank of
New York to Tiffany.
3. (Y) 5,000,000,000 4.50% Term Notes due 2011 of Tiffany Japan (as
guaranteed by Parent).
15
<PAGE> 16
TIFFANY EXHIBIT A2
LIST OF INDIVIDUAL CURRENCY COMMITMENTS
Australian Dollars
Lender Individual Currency Commitment
DaiIchi Kangyo $3,500,000.00
Fuji Bank $3,000,000.00
Canadian Dollars
Lender Individual Currency Commitment
- -
Hong Kong Dollars
Lender Individual Currency Commitment
BNY $3,000,000.00
Italian Lira
Lender Individual Currency Commitment
The Chase Manhattan Bank $6,000,000.00
Korean Won
Lender Individual Currency Commitment
BNY $4,000,000.00
Malaysian Ringgit
Lender Individual Currency Commitment
- -
Mexican Pesos
Lender Individual Currency Commitment
- -
New Taiwan Dollars
Lender Individual Currency Commitment
BNY $5,000,000.00
Philippine Pesos
Lender Individual Currency Commitment
- -
Singapore Dollars
Lender Individual Currency Commitment
BNY $3,000,000.00
16
<PAGE> 17
Swiss Francs
Lender Individual Currency Commitment
The Chase Manhattan Bank $5,000,000.00
Thai Baht
Lender Individual Currency Commitment
- -
17
<PAGE> 18
TIFFANY & CO.
AMENDMENT NO. 8
AMENDMENT NO. 8 (this "Amendment"), dated as of March 8, 1999, to the
Credit Agreement, dated as of June 26, 1995, by and among Tiffany & Co., Tiffany
and Company, Tiffany & Co. International, the Subsidiary Borrowers thereto, the
Lenders party thereto, The Bank of New York, as Issuing Bank and as Swing Line
Lender, The Bank of New York, as Arranging Agent, and The Bank of New York, as
Administrative Agent, as amended by Amendment No. 1, dated as of November 9,
1995, Amendment No. 2, dated as of August 15, 1996, Amendment No. 3, dated as of
January 22, 1997, Amendment No. 4, dated as of August 4, 1997, Amendment No. 5,
dated as of November 20, 1997, Amendment No. 6, dated as of October 1, 1998, and
Amendment No. 7, dated as of November 30, 1998 (as amended, the "Credit
Agreement").
Except as otherwise provided herein, capitalized terms used herein which
are not defined herein shall have the meanings set forth in the Credit
Agreement.
In consideration of the covenants, conditions and agreements hereinafter
set forth, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, and pursuant to Section 11.1 of the
Credit Agreement, the Parent, the Borrowers and the Administrative Agent hereby
agree as follows:
1. The Credit Agreement is hereby amended to add a new Section 2.26 to
read as follows:
2.26 European Economic and Monetary Union.
(a) Definitions. In this Section 2.26 and in each other provision of this
Agreement to which reference is made in this Section 2.26 expressly or
impliedly, the following terms have the meanings given to them in this
Section 2.26:
"EMU": economic and monetary union as contemplated in the Treaty
on European Union.
"EMU legislation": legislative measures of the European Counsel for
the introduction of, changeover to or operation of a single or unified
European currency (whether known as the euro or otherwise), being in part
the implementation of the third stage of EMU.
"euro": the single currency of participating member states of the
European Union.
18
<PAGE> 19
"national currency unit": the unit of currency (other than the
euro) of a participating member state.
"participating member state": each state so described in any EMU
legislation.
"Treaty on European Union": the Treaty of Rome of March 25, 1957, as
amended by the Single European Act 1986 and the Maastricht Treaty (which
was signed at Maastricht on February 7, 1992, and came into force on
November 1, 1993), as amended from time to time.
(b) Loans. Any Loan in the currency of a participating member state
shall be made, at the request of the applicable Borrower, either in the
euro or the national currency unit of such participating member state.
(c) Business Days. With respect to any amount denominated or to be
denominated in the euro, any reference to a "Business Day" shall be
construed as a reference to a day (other than a Saturday or Sunday) on
which banks are generally open for business in London and New York City.
(d) Euro Screen Rate. If the Administrative Agent determines that
there is no Core Currency Euro Rate or Individual Currency Rate, as
applicable, displayed on the applicable screen for determining such rate
for deposits denominated in the national currency unit in which any Loans
are denominated, the Core Currency Euro Rate or Individual Currency Rate,
as applicable, for such Loans shall be based upon the rate displayed on
the applicable page of the applicable screen for the offering of deposits
denominated in the euro as determined by the Administrative Agent.
(e) Payments to the Administrative Agent or Lenders. Sections 2.4,
2.5 and 2.20(b) shall be construed so that, in relation to the payment of
any amount of euros or national currency units, such amount shall be made
available to the Administrative Agent or the applicable Lender in
immediately available, freely transferable, cleared funds to its
Applicable Payment Office.
(f) Payments by the Administrative Agent to the Lenders. Any amount
payable by the Administrative Agent to the Lenders under this Agreement in
the currency of a participating member state shall be paid in the euro.
(g) Payments by the Administrative Agent Generally. With respect to
the payment of any amount denominated in the euro or in a national
currency unit, the Administrative Agent shall not be liable to any Credit
Party or any of the Lenders in any way whatsoever for any delay, or the
consequences of any delay, in the crediting to any account of any amount
required by this Agreement to be paid
19
<PAGE> 20
by the Administrative Agent if the Administrative Agent shall have taken
all relevant steps to achieve, on the date required by this Agreement, the
payment of such amount in immediately available, freely transferable,
cleared funds (in the euro or, as the case may be, in a national currency
unit) to the account with the bank in the principal financial center in
the participating member state which the applicable Credit Party or, as
the case may be, any Lender shall have specified for such purpose. In this
paragraph (g), "all relevant steps" means all such steps as may be
prescribed from time to time by the regulations or operating procedures of
such clearing or settlement system as the Administrative Agent may from
time determine for the purpose of clearing or settling payments of the
euro.
(h) Basis of Accrual. If the basis of accrual of interest or fees
expressed in this Agreement with respect to the currency of any state that
becomes a participating state shall be inconsistent with any convention or
practice in the London Interbank Market or other applicable interbank
market, as determined by the Administrative Agent, for the basis of
accrual of interest or fees in respect of the euro, such convention or
practice shall replace such expressed basis effective as of and from the
date on which such state becomes a participating member state; provided
that if any Loan in the currency of such state is outstanding immediately
prior to such date, such replacement shall take effect, with respect to
such Loan, at the end of the then current Interest Period.
(i) Rounding and Other Consequential Changes. Without prejudice and
in addition to any method of conversion or rounding prescribed by any EMU
legislation and without prejudice to the respective liabilities for
indebtedness of any Credit Party to the Lenders and the Lenders to any
Credit Party under or pursuant to this Agreement:
(i) each reference in this Agreement to a minimum amount (or an
integral multiple thereof) in a national currency unit to be paid to
or by the Administrative Agent shall be replaced by a reference to
such reasonably comparable and convenient amount (or an integral
multiple thereof) in the euro as the Administrative Agent may from
time to time specify; and
(ii) except as expressly provided in this Section 2.26, each
provision of this Agreement shall be subject to such reasonable
changes of construction as the Administrative Agent may from time to
time specify to be necessary or appropriate to reflect the
introduction of or changeover to the euro in participating member
states.
(j) Continuity of Contract. The Credit Parties, the Administrative
Agent, the Issuing Bank, the Swing Line Lender and the Lenders agree that
the occurrence or non-occurrence of EMU, any event or events associated
with EMU
20
<PAGE> 21
and/or the introduction of the euro in all or any part of the European
Union will not result in the discharge, cancellation, recision or
termination in whole or in part of any agreement between the Credit
Parties, the Administrative Agent, the Issuing Bank, the Swing Line Lender
and the Lenders, or give the Credit Parties, the Administrative Agent, the
Issuing Bank, the Swing Line Lender or the Lenders the right to cancel,
rescind, terminate or vary any agreement, other than as expressly set
forth in the Loan Documents.
2. SECTION 4 OF THE AGREEMENT IS AMENDED TO ADD A NEW SECTION 4.18
TO READ AS FOLLOWS:
1.1 SECTION 4.18 YEAR 2000.
Any reprogramming required to permit the
proper functioning, in and following the
year 2000, of (i) the Parent's and its
Subsidiaries' computer systems and (ii)
equipment containing embedded microchips
(including systems and equipment supplied by
others or with which the Parent's or its
Subsidiaries' systems interact) and the
testing of all such systems and equipment,
as so reprogrammed, will be completed by
June 30, 1999. The cost to the Parent and
its Subsidiaries of such reprogramming and
testing and of the reasonably foreseeable
consequences of year 2000 to the Parent and
its Subsidiaries (including reprogramming
errors and the failure of others' systems or
equipment) will not result in a Default or a
Material Adverse effect. Except for such of
the reprogramming referred to in the
preceding sentence as may be necessary, the
computer and management information systems
of the Parent and its Subsidiaries are and,
with ordinary course upgrading and
maintenance, will continue for the term of
this Agreement to be, sufficient to permit
the Parent and its Subsidiaries to conduct
their business without Material Adverse
effect.
3. EXHIBIT Q TO THE CREDIT AGREEMENT IS HEREBY AMENDED AND RESTATED
IN ITS ENTIRETY IN THE FORM ATTACHED HERETO AS EXHIBIT Q.
21
<PAGE> 22
4. FOR PURPOSES OF SUPPLEMENTING EXHIBIT R TO THE CREDIT AGREEMENT,
EACH LENDER AGREES TO SUPPLY TO THE ADMINISTRATIVE AGENT ITS
APPLICABLE LENDING OFFICES AND APPLICABLE PAYMENT OFFICES WITH
RESPECT TO LOANS DENOMINATED IN THE EURO.
5. This Amendment shall become effective immediately upon the receipt by
the Administrative Agent of (i) this Amendment executed by a duly authorized
officer or officers of the Parent, the Borrowers, the Administrative Agent, the
Arranging Agent, the Issuing Bank, the Swing Line Lender and all of the Lenders
and (ii) all fees payable in connection with this Amendment. In all other
respects the Credit Agreement and the other Loan Documents shall remain in full
force and effect.
6. In order to induce the Administrative Agent to execute this Amendment
and the Arranging Agent, the Issuing Bank, the Swing Line Lender and the Lenders
to consent thereto, the Parent and the Borrowers each hereby agrees to pay the
reasonable fees and disbursements of counsel to the Administrative Agent
incurred in connection with the preparation, negotiation and closing of this
Amendment.
7. Each of the Parent and the Borrowers hereby (a) reaffirms and admits
the validity, enforceability and continuation of all the Loan Documents to which
it is a party, and its obligations thereunder, and (b) agrees and admits that as
of the date hereof it has no valid defenses to or offsets against any of its
obligations to the Administrative Agent, the Arranging Agent, the Issuing Bank,
the Swing Line Lender or the Lenders under the Loan Documents to which it is a
party.
8. This Amendment may be executed in any number of counterparts, each of
which shall be an original and all of which shall constitute one agreement. It
shall not be necessary in making proof of this Amendment to produce or account
for more than one counterpart signed by the party to be charged.
9. This Amendment is being delivered in and is intended to be performed in
the State of New York and shall be construed and enforceable in accordance with,
and be governed by, the internal laws of the State of New York without regard to
principles of conflict of laws.
22
<PAGE> 23
The parties have caused this Amendment to be duly executed as of the date
first written above.
TIFFANY & CO., a Delaware corporation
By:_______________________________________
Name:_____________________________________
Title:____________________________________
TIFFANY AND COMPANY, a New York
corporation
By:_______________________________________
Name:_____________________________________
Title:____________________________________
TIFFANY & CO. INTERNATIONAL, a Delaware
corporation
By:_______________________________________
Name:_____________________________________
Title:____________________________________
SOCIETE FRANCAISE POUR LE DEVELOPPMENT DE
LA PORCELAINE D'ART (S.A.R.L.), a French
corporation
By:_______________________________________
Name:_____________________________________
Title:____________________________________
23
<PAGE> 24
TIFFANY-FARAONE S.P.A., an Italian
corporation
By:_______________________________________
Name:_____________________________________
Title:____________________________________
TIFFANY & CO. JAPAN INC., a Delaware
corporation
By:_______________________________________
Name:_____________________________________
Title:____________________________________
TIFFANY & CO. PTE, LTD., a Singapore
corporation
By:_______________________________________
Name:_____________________________________
Title:____________________________________
TIFFANY & CO, a United Kingdom
corporation
By:_______________________________________
Name:_____________________________________
Title:____________________________________
TIFFANY & CO. WATCH CENTER S.A., a Swiss
corporation
By:_______________________________________
Name:_____________________________________
Title:____________________________________
24
<PAGE> 25
TIFFCO KOREA LTD., a Korean corporation
By:_______________________________________
Name:_____________________________________
Title:____________________________________
TIFFANY & CO. MEXICO, S.A. de C.V., a
Mexican corporation
By:_______________________________________
Name:_____________________________________
Title:____________________________________
THE BANK OF NEW YORK, as Administrative
Agent
By:_______________________________________
Name:_____________________________________
Title:____________________________________
25
<PAGE> 26
AGREED AND CONSENTED TO:
THE BANK OF NEW YORK, as
Arranging Agent, as the Issuing
Bank and Swing Line Lender, and
as a Lender
By:_______________________________________
Name:_____________________________________
Title:____________________________________
THE CHASE MANHATTAN BANK
By:_______________________________________
Name:_____________________________________
Title:____________________________________
THE DAI-ICHI KANGYO BANK
LIMITED (NEW YORK BRANCH)
By:_______________________________________
Name:_____________________________________
Title:____________________________________
THE FUJI BANK, LTD.
By:_______________________________________
Name:_____________________________________
Title:____________________________________
26
<PAGE> 27
FLEET NATIONAL BANK
By:_______________________________________
Name:_____________________________________
Title:____________________________________
By:_______________________________________
Name:_____________________________________
Title:____________________________________
FLEET PRECIOUS METALS INC.
By:_______________________________________
Name:_____________________________________
Title:____________________________________
By:_______________________________________
Name:_____________________________________
Title:____________________________________
27
<PAGE> 28
TIFFANY EXHIBIT Q
LIST OF ADMINISTRATIVE AGENT'S
DOMESTIC PAYMENT OFFICE,
ADDRESS FOR NOTICES AND
APPLICABLE PAYMENT OFFICES
DOMESTIC PAYMENT OFFICE ADDRESS FOR NOTICES
The Bank of New York The Bank of New York
One Wall Street One Wall Street
Agency Function Administration Agency Function
18th Floor Administration
New York, New York 10286 18th Floor
Attention: Genoveso Caviness New York, New York 10286
Telephone: (212) 635-4693 Attention: Genoveso Caviness
Facsimile: (212) 635-6365 Telephone: (212) 635-4693
6366 or 6367 Facsmile: (212) 635-6365
6366 or 6367
with a copy to: with a copy to:
The Bank of New York The Bank of New York
One Wall Street One Wall Street
New York, New York 10286 New York, New York 10286
Attn: Howard F. Bascom, Attn: Howard F. Bascom,
Vice President Vice President
Telephone: (212) 635-1308 Telephone: (212) 635-1308
Facsimile: (212) 635-1481 Facsimile: (212) 635-1481
Applicable Payment Offices
For Core Currency Loans
1. Dollar Loans - ABR Advances
The Bank of New York
New York
ABA No.: 021000018
Acct No.: 890-0065-737
IFO: Agency Function Admin.
Reference: Tiffany
Attn: Genoveso Caviness
28
<PAGE> 29
Telephone: (212) 635-4693
Facsimile: (212) 635-6365
2. Dollar Loans - Eurodollar Advances
The Bank of New York
New York
ABA No.: 021000018
Acct No.: 890-0065-737
IFO: Agency Function Admin.
Reference: Tiffany
Attn: Genoveso Caviness
Telephone: (212) 635-4693
Facsimile: (212) 635-6365
3. French Franc/Euro Loans
Societe Generale
Fontenay
Acct No.: 001014422680
IFO: The Bank of New York, NY
IBF
Off Shore Support
Reference: Tiffany
Attn: Yves Legrand
Head of Operations
Telephone: 33 1 41141224
4. German Mark/Euro Loans
Bank of New York
Frankfurt
Acct No.: 0820468800400
IFO: The Bank of New York, NY
IBF
Off Shore Support
Reference: Tiffany
Attn: Klavs Rueckert
Telephone: 49-69-97151230
Facsimile: 49-69-97151272
29
<PAGE> 30
5. Japanese Yen Loans
Bank of New York
Tokyo
Acct No.: 0856480002500
IFO: The Bank of New York, NY
IBF
Off Shore Support
Reference: Tiffany
Attn: S. Katsuhara
Telephone: 81-33-595-1135
Facsimile: 81-33-595-0738
6. Sterling Pound Loans
Bank of New York
London
Acct No.: 0845464600401
IFO: The Bank of New York, NY
IBF
Off Shore Support
Reference: Tiffany
Attn: Graham Mason
Telephone: 44-171-255-2323
Facsimile: 44-171-322-6034
30
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.119.A
<SEQUENCE>12
<DESCRIPTION>AMENDMENT NO. 1 TO AGREEMENT/CONSENT TO ASSIGNMENT
<TEXT>
<PAGE> 1
Exhibit 10.119a
Tiffany & Co.
Report on Form 10-K
Fiscal 1998
AMENDMENT NO. 1
This Amendment No. 1 to that certain Agreement and Consent to Assignment
dated as of December 1, 1995, among Tiffany & Co., Tiffany and Company and State
Street Bank and Trust Company (successor in interest to Fleet National Bank of
Connecticut), as Collateral Trustee under the Indenture (the "Agreement and
Consent").
Except as otherwise provided herein, capitalized terms used herein which
are not defined herein shall have the meanings assigned to them in the Agreement
and Consent.
In consideration of the covenants, conditions and agreements hereinafter
set forth, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parent, Lessee and Bank hereby
agree as follows:
1. Effective November 3, 1998, Section 2.12(c) of the Agreement and
Consent shall be deleted in its entirety and the following inserted in its
place:
(c) Intercompany Debt - Debt of the Lessee or another Restricted
Subsidiary owing to, or, in the case of a Guaranty, incurred on behalf of,
the Parent or another Restricted Subsidiary.
2. Each of the Lessee and Parent hereby (a) reaffirms and admits the
validity, enforceability and continuation of the Agreement and Consent, and (b)
agrees and admits that as of the date hereof it has no valid defenses to or
offsets against any of their respective obligations thereunder.
3. This Amendment No. 1 may be executed in any number of counterparts,
each of which shall be an original and all of which shall together constitute
one agreement. It shall not be necessary in making proof of this Amendment No. 1
to produce or account for more than one counterpart signed by the party to be
charged.
4. This Amendment shall be governed by and construed in accordance with
Section 6.5 of the Agreement and Consent.
The parties have caused this Amendment No. 1 to be duly executed as of the
date first above written.
TIFFANY & CO.
By:_____________________________________
Name:___________________________________
Title:__________________________________
Page 1 of 3
<PAGE> 2
TIFFANY AND COMPANY
By:_____________________________________
Name:___________________________________
Title:__________________________________
STATE STREET BANK AND TRUST COMPANY, not
in its individual capacity, but solely
as Owner Collateral Trustee under the
Owner Collateral Trust Indenture
By:_____________________________________
Name:___________________________________
Title:__________________________________
STATE STREET BANK AND TRUST COMPANY, not
in its individual capacity, but solely
as Beneficiary Collateral Trustee under
the Beneficiary Collateral Trust
Indenture
By:_____________________________________
Name:___________________________________
Title:__________________________________
Page 2 of 3
<PAGE> 3
The undersigned First Union National Bank (formerly, First Fidelity Bank,
National Association), not in its individual capacity, but solely as the trustee
under that certain Trust Agreement 1995-1, dated as of July 1, 1995, as Owner,
hereby consents to the foregoing Amendment No. 1 and confirms that it has
received the written approval of the Required Holders to provide this consent
and enter into this Amendment No. 1.
FIRST UNION NATIONAL BANK, a national
banking association, not in its
individual capacity, but solely as
trustee pursuant to an agreement
captioned "Trust Agreement 1995-1" dated
as of July 1, 1995, as amended
By:_____________________________________
Name:___________________________________
Title:__________________________________
Page 3 of 3
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.122.A
<SEQUENCE>13
<DESCRIPTION>AMENDMENT NO. 1 DATED NOVEMBER 18, 1998
<TEXT>
<PAGE> 1
Exhibit 10.122a
Tiffany & Co.
Report on Form 10-K
Fiscal 1998
AMENDMENT NO. 1
This Amendment No. 1 to that certain Guarantee dated April 3, 1996 (the
"Guarantee"), from Tiffany & Co. ("Guarantor") in respect of certain obligations
of Tiffany & Co. Japan Inc., Japan Branch ("Borrower") to American Family Life
Assurance Company of Columbus, Japan Branch ("Lender") is made as of the 18th
day of November, 1998.
Except as otherwise provided herein, capitalized terms used herein which
are not defined herein shall have the meanings assigned to them in the
Guarantee.
In consideration of the covenants, conditions and agreements hereinafter
set forth, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Guarantor, Lender and Borrower
hereby agree as follows:
1. Effective April 3, 1996, clauses (ii) through (v), inclusive, of
Section 13(m) of the Guarantee are hereby deleted in their entirety and the
following inserted in their place:
(ii) Indebtedness owed:
(A) from a Subsidiary of the Guarantor to the Guarantor:
(B) from the Guarantor to a Subsidiary of the Guarantor;
(C) from one Subsidiary of the Guarantor to another;
(D) by a Subsidiary of the Guarantor under a guarantee
incurred by such Subsidiary on behalf of another Subsidiary of the
Guarantor or the Guarantor;
(iii) Any Indebtedness of the Guarantor;
(iv) Indebtedness of the Borrower (other than Indebtedness permitted
under clause (ii) above or clause (v) below), up to the maximum aggregate
principal amount of JP(Y)10,450,000,000;
(v) Indebtedness of up to the maximum aggregate principal amount of
US$160,000,000 arising under that certain Credit Agreement dated as of
June 26, 1995, by and among Tiffany & Co., Tiffany and Company, Tiffany &
Co. International, the Subsidiary Borrowers thereto, the Lenders party
thereto, The Bank of New York, as
Page 1 of 3
<PAGE> 2
Issuing Bank and Swing Line Lender, The Bank of New York, as Arranging
Agent, and The Bank of New York, as Administrative Agent, as such may be
amended and supplemented from time to time; and
(vi) Any other Indebtedness of Subsidiaries of the Guarantor
not otherwise permitted under sub-sections (i) through (v) above up to the
maximum aggregate principal amount outstanding at any one time of
US$10,000,000.
2. From and after the date hereof, when the Guarantor shall deliver to the
Lender its financial statements pursuant to Section 13(a)(i) or (ii) of the
Guarantee, the Guarantor shall also provide the Lender with a certificate signed
by an officer of and on behalf of the Guarantor certifying that it complied with
the covenants set forth in the Guarantee as of the date of the relevant
financial statements, or if it failed to comply with any of the covenants set
forth in Section 13 as of such date, describing such non-compliance in
reasonable detail, in each case accompanied by calculations in reasonable detail
of its performance under Sections 13(i), (j) and (m) of the Guarantee.
3. Each of the Borrower and Guarantor hereby (a) reaffirms and admits the
validity, enforceability and continuation of the Agreement and the Guarantee,
and (b) agrees and admits that as of the date hereof it has no valid defenses to
or offsets against any of its obligations thereunder.
4. This Amendment may be executed in any number of counterparts, each of
which shall be an original and all of which shall together constitute one
agreement. It shall not be necessary in making proof of this Amendment to
produce or account for more than one counterpart signed by the party to be
charged.
5. This Amendment shall be governed by and interpreted in accordance with
the laws of Japan and hereby incorporates the provisions of Sections 16(a) and
16(b) of the Guarantee.
The parties have caused this Amendment No. 1 to be duly executed as of the
date first above written.
TIFFANY & CO.
By:_____________________________________
Name:___________________________________
Title:__________________________________
Page 2 of 3
<PAGE> 3
TIFFANY & CO. JAPAN INC., JAPAN BRANCH
By:_____________________________________
Name:___________________________________
Title:__________________________________
AMERICAN FAMILY LIFE ASSURANCE OF
COLUMBUS, JAPAN BRANCH
By:_____________________________________
Name:___________________________________
Title:__________________________________
Page 3 of 3
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.126
<SEQUENCE>14
<DESCRIPTION>FORM OF NOTER PURCHASE AGREEMENT
<TEXT>
<PAGE> 1
- --------------------------------------------------------------------------------
Exhibit 10.126
Tiffany & CO.
Report on Form 10-K
Fiscal 1998
================================================================================
Note Purchase Agreement
----------
TIFFANY & CO
DATED AS OF DECEMBER 30, 1998
$60,000,000 6.90% SERIES A SENIOR NOTES DUE DECEMBER 30, 2008
$40,000,000 7.05% SERIES B SENIOR NOTES DUE DECEMBER 30, 2010
GUARANTIED BY
TIFFANY AND COMPANY
TIFFANY & CO. INTERNATIONAL
TIFFANY & CO. JAPAN INC.
- --------------------------------------------------------------------------------
TIFFANY & CO. i NOTE PURCHASE AGREEMENT
================================================================================
<PAGE> 2
TABLE OF CONTENTS
PAGE
----
1. AUTHORIZATION OF NOTES............................................... 1
2. SALE AND PURCHASE OF NOTES........................................... 1
3. CLOSING.............................................................. 2
4. CONDITIONS TO CLOSING................................................ 2
4.1 Representations and Warranties................................. 2
4.2 Performance; No Default........................................ 2
4.3 Compliance Certificates........................................ 2
4.4 Opinions of Counsel............................................ 3
4.5 Purchase Permitted By Applicable Law, etc...................... 3
4.6 Sale of Other Notes............................................ 3
4.7 Guaranty Agreement............................................. 4
4.8 Credit Agreement............................................... 4
4.9 Payment of Special Counsel Fees................................ 4
4.10 Private Placement Numbers...................................... 4
4.11 Changes in Corporate Structure................................. 4
4.12 Proceedings and Documents...................................... 4
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY........................ 5
5.1 Organization; Power and Authority.............................. 5
5.2 Authorization, etc............................................. 5
5.3 Disclosure..................................................... 5
5.4 Organization and Ownership of Shares of Subsidiaries;
Affiliates..................................................... 6
5.5 Financial Statements........................................... 6
5.6 Compliance with Laws, Other Instruments, etc................... 7
5.7 Governmental Authorizations, etc............................... 7
5.8 Litigation; Observance of Agreements, Statutes and Orders...... 7
5.9 Taxes.......................................................... 7
5.10 Title to Property; Leases...................................... 8
5.11 Licenses, Permits, etc......................................... 8
5.12 Compliance with ERISA.......................................... 8
5.13 Private Offering by the Company................................ 10
5.14 Use of Proceeds; Margin Regulations............................ 10
5.15 Existing Indebtedness; Future Liens............................ 10
5.16 Foreign Assets Control Regulations, etc........................ 11
5.17 Status under Certain Statutes.................................. 11
5.18 Environmental Matters.......................................... 11
5.19 Year 2000 Problem.............................................. 12
6. REPRESENTATIONS OF THE PURCHASER..................................... 12
6.1 Purchase for Investment........................................ 12
6.2 Source of Funds................................................ 12
7. INFORMATION AS TO COMPANY............................................ 14
7.1 Financial and Business Information............................. 14
7.2 Officer's Certificate.......................................... 16
TIFFANY & CO. NOTE PURCHASE AGREEMENT
i
<PAGE> 3
TABLE OF CONTENTS(cont.)
PAGE
----
7.3 Inspection..................................................... 17
8. PAYMENT OF THE NOTES................................................. 17
8.1 No Required Prepayments; Payment at Maturity................... 17
8.2 Optional Prepayments with Make-Whole Amount.................... 18
8.3 Allocation of Partial Prepayments.............................. 18
8.4 Maturity; Surrender, etc....................................... 18
8.5 No Other Optional Prepayments or Purchase of Notes............. 18
8.6 Make-Whole Amount.............................................. 19
9. AFFIRMATIVE COVENANTS................................................ 20
9.1 Compliance with Law............................................ 20
9.2 Insurance...................................................... 20
9.3 Maintenance of Properties...................................... 20
9.4 Payment of Taxes and Claims.................................... 21
9.5 Corporate Existence, etc....................................... 21
9.6 Compliance Regarding Year 2000................................. 21
9.7 Credit Agreement............................................... 21
10. NEGATIVE COVENANTS................................................... 22
10.1 Transactions with Affiliates................................... 22
10.2 Line of Business............................................... 22
10.3 Maintenance of Consolidated Net Worth.......................... 22
10.4 Fixed Charge Coverage.......................................... 22
10.5 Limitation on Debt............................................. 23
10.6 Liens.......................................................... 23
10.7 Merger, Consolidation, etc..................................... 27
10.8 Sale of Assets................................................. 28
11. EVENTS OF DEFAULT.................................................... 31
12. REMEDIES ON DEFAULT, ETC............................................. 34
12.1 Acceleration................................................... 34
12.2 Other Remedies................................................. 34
12.3 Rescission..................................................... 35
12.4 No Waivers or Election of Remedies, Expenses, etc.............. 35
13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES........................ 35
13.1 Registration of Notes.......................................... 35
13.2 Transfer and Exchange of Notes................................. 36
13.3 Replacement of Notes........................................... 36
14. PAYMENTS ON NOTES.................................................... 36
14.1 Place of Payment............................................... 36
14.2 Home Office Payment............................................ 37
15. EXPENSES, ETC........................................................ 37
15.1 Transaction Expenses........................................... 37
15.2 Survival....................................................... 37
TIFFANY & CO. NOTE PURCHASE AGREEMENT
ii
<PAGE> 4
TABLE OF CONTENTS(cont.)
PAGE
----
16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT......... 38
17. AMENDMENT AND WAIVER................................................. 38
17.1 Requirements................................................... 38
17.2 Solicitation of Holders of Notes............................... 38
17.3 Binding Effect, etc............................................ 39
17.4 Notes held by Company, etc..................................... 39
18. NOTICES.............................................................. 39
19. REPRODUCTION OF DOCUMENTS............................................ 40
20. CONFIDENTIAL INFORMATION............................................. 40
21. SUBSTITUTION OF PURCHASER............................................ 42
22. MISCELLANEOUS........................................................ 42
22.1 Successors and Assigns......................................... 42
22.2 Payments Due on Non-Business Days ............................. 42
22.3 Severability .................................................. 42
22.4 Construction................................................... 42
22.5 Counterparts................................................... 43
22.6 Governing Law.................................................. 43
TIFFANY & CO NOTE PURCHASE AGREEMENT
iii
<PAGE> 5
SCHEDULES & EXHIBITS
SCHEDULE A -- Information Relating to Purchasers
SCHEDULE B -- Defined Terms
SCHEDULE 3 -- Payment Instructions
SCHEDULE 4.11 -- Changes in Corporate Structure
SCHEDULE 5.3 -- Disclosure Materials
SCHEDULE 5.4 -- Subsidiaries of the Company and Ownership of Subsidiary
Stock
SCHEDULE 5.5 -- Financial Statements
SCHEDULE 5.11 -- Patents, etc.
SCHEDULE 5.12 -- ERISA Affiliates
SCHEDULE 5.14 -- Use of Proceeds
SCHEDULE 5.15 -- Existing Indebtedness and Liens
EXHIBIT 1A -- Form of 6.90% Series A Senior Note due December 30, 2008
EXHIBIT 1B -- Form of 7.05% Series B Senior Note Due December 30, 2010
EXHIBIT 4.4(a) -- Form of Opinion of Special Counsel for the Company and
the Guarantors
EXHIBIT 4.4(b) -- Form of Opinion of General Counsel for the Company and
the Guarantors
EXHIBIT 4.4(c) -- Form of Opinion of Special Counsel for the Purchasers
EXHIBIT 4.7 -- Form of Guaranty Agreement
TIFFANY & CO. NOTE PURCHASE AGREEMENT
iv
<PAGE> 6
TIFFANY & CO.
727 Fifth Avenue
New York, New York 10022
$60,000,000 6.90% SERIES A SENIOR NOTES DUE DECEMBER 30, 2008
$40,000,000 7.05% SERIES B SENIOR NOTES DUE DECEMBER 30, 2010
Dated as of December 30, 1998
To the Purchaser Named on
the Signature Page Hereto
Ladies and Gentlemen:
TIFFANY & CO., a Delaware corporation (together with its successors and
assigns, the "Company"), agrees with you as follows:
1. AUTHORIZATION OF NOTES.
The Company will authorize the issue and sale of
(a) $60,000,000 aggregate principal amount of its 6.90% Series A
Senior Notes due December 30, 2008 (the "Series A Notes," such term to
include any such notes issued in substitution therefor pursuant to Section
13 of this Agreement or the Other Agreements (as hereinafter defined)),
and
(b) $40,000,000 aggregate principal amount of its 7.05% Series B
Senior Notes due December 30, 2010 (the "Series B Notes," such term to
include any such notes issued in substitution therefor pursuant to Section
13 of this Agreement or the Other Agreements.
The Series A Notes shall be substantially in the form set out in Exhibit 1A and
the Series B Notes shall be substantially in the form set out in Exhibit 1B, in
each case, with such changes therefrom, if any, as may be approved by you and
the Company. The Series A Notes and the Series B Notes are herein referred to
collectively as the "Notes," and individually as a "Note." Certain capitalized
terms used in this Agreement are defined in Schedule B; references to a
"Schedule" or an "Exhibit" are, unless otherwise specified, to a Schedule or an
Exhibit attached to this Agreement; and references to a "Section" are, unless
otherwise specified, references to a Section of this Agreement.
2. SALE AND PURCHASE OF NOTES.
Subject to the terms and conditions of this Agreement, the Company will
issue and sell to you and you will purchase from the Company, at the Closing
provided for in Section 3, Notes of the Series and in the principal amounts
specified below your name in Schedule A at the purchase price of 100% of the
principal amount thereof. Contemporaneously with entering into this Agreement,
the Company is entering into separate Note Purchase Agreements (the "Other
Agreements") identical with this Agreement with each of the other purchasers
named in Schedule A (the "Other Purchasers"), providing for the sale at such
Closing to each of the Other Purchasers of Notes of the Series and in the
principal amounts specified below its name in Schedule A. Your obligation
hereunder and the obligations of the Other Purchasers under the Other Agreements
are several and not joint obligations and you shall have no obligation under any
Other Agreement and no liability to any Person for the performance or
non-performance by any Other Purchaser thereunder.
TIFFANY & CO NOTE PURCHASE AGREEMENT
<PAGE> 7
3. CLOSING.
The sale and purchase of the Notes to be purchased by you and the Other
Purchasers shall occur at the offices of Hebb & Gitlin, One State Street,
Hartford, Connecticut 06103, at 10:00 a.m., local time, at a closing (the
"Closing") on December 30, 1998. At the Closing the Company will deliver to you
the Notes to be purchased by you in the form of a single Note (or such greater
number of Notes in denominations of at least $100,000 as you may request), dated
the date of the Closing and registered in your name (or in the name of your
nominee), as indicated in Schedule A, against payment by federal funds wire
transfer in immediately available funds of the amount of the purchase price
therefor as directed by the Company in Schedule 3. If at the Closing the Company
shall fail to tender such Notes to you as provided above in this Section 3, or
any of the conditions specified in Section 4 shall not have been fulfilled to
your satisfaction, you shall, at your election, be relieved of all further
obligations under this Agreement, without thereby waiving any rights you may
have by reason of such failure or such nonfulfillment.
4. CONDITIONS TO CLOSING.
Your obligation to purchase and pay for the Notes to be sold to you at the
Closing is subject to the fulfillment to your satisfaction, prior to or at the
Closing, of the following conditions:
4.1 Representations and Warranties.
The representations and warranties of the Company in this Agreement shall
be correct when made and at the time of the Closing.
4.2 Performance; No Default.
The Company and each of the Guarantors shall have performed and complied
with all agreements and conditions contained in the Financing Documents required
to be performed or complied with by the Company or such Guarantors prior to or
at the Closing and after giving effect to the issue and sale of the Notes (and
the application of the proceeds thereof as contemplated by Schedule 5.14) no
Default or Event of Default shall have occurred and be continuing. Neither the
Company nor any Subsidiary shall have entered into any transaction since the
date of the Memorandum that would have been prohibited by any of Sections 10.1,
10.5, 10.6 or 10.8 had such Sections applied since such date.
4.3 Compliance Certificates.
(a) Officer's Certificate. The Company shall have delivered to you
an Officer's Certificate, dated the date of the Closing, certifying that
the conditions specified in Sections 4.1, 4.2 and 4.11 have been
fulfilled.
(b) Company Secretary's Certificate. The Company shall have
delivered to you a certificate, signed on its behalf by its Secretary or
one of its Assistant Secretaries, dated the date of the Closing,
certifying as to the resolutions attached thereto and other corporate
proceedings relating to the authorization, execution and delivery of the
Notes, this Agreement and the Other Agreements.
(c) Guarantor Secretary's Certificates. Each of the Guarantors shall
have delivered to you a certificate, signed on its behalf by its Secretary
or one of its Assistant Secretaries, dated the date of the Closing,
certifying as to the resolutions attached thereto and
TIFFANY & CO. NOTE PURCHASE AGREEMENT
2
<PAGE> 8
other corporate proceedings relating to the authorization, execution and
delivery of the Guaranty Agreement.
4.4 Opinions of Counsel.
You shall have received opinions in form and substance reasonably
satisfactory to you, dated the date of the Closing, from
(a) Gibson, Dunn & Crutcher, counsel for the Company and the
Guarantors, substantially in the form set out in Exhibit 4.4(a) and
covering such other matters incident to the transactions contemplated
hereby as you or your counsel may reasonably request (and the Company
hereby instructs such counsel to deliver such opinion to you), and
(b) Patrick B. Dorsey, Esq., Senior Vice President and General
Counsel of the Company and the Guarantors, substantially in the form set
out in Exhibit 4.4(b) and covering such other matters incident to the
transactions contemplated hereby as you or your counsel may reasonably
request (and the Company hereby instructs such counsel to deliver such
opinion to you), and
(c) Hebb & Gitlin, your special counsel, substantially in the form
set out in Exhibit 4.4(c) and covering such other matters incident to the
transactions contemplated hereby as you may reasonably request.
4.5 Purchase Permitted By Applicable Law, etc.
On the date of the Closing your purchase of Notes shall (a) be permitted
by the laws and regulations of each jurisdiction to which you are subject,
without recourse to provisions (such as section 1405(a)(8) of the New York
Insurance Law) permitting limited investments by insurance companies without
restriction as to the character of the particular investment, (b) not violate
any applicable law or regulation (including, without limitation, Regulation T, U
or X of the Board of Governors of the Federal Reserve System) and (c) not
subject you to any tax, penalty or liability under or pursuant to any applicable
law or regulation. If requested by you, you shall have received an Officer's
Certificate certifying as to such matters of fact as you may reasonably specify
to enable you to determine whether such purchase is so permitted.
4.6 Sale of Other Notes.
Contemporaneously with the Closing the Company shall sell to the Other
Purchasers and the Other Purchasers shall purchase the Notes to be purchased by
them at the Closing as specified in Schedule A.
4.7 Guaranty Agreement.
You shall have received a counterpart of the Guaranty Agreement, duly
executed and delivered by each of the Guarantors, substantially in the form of
Exhibit 4.7 (as amended or supplemented from time to time, the "Guaranty
Agreement"), and the Guaranty Agreement shall be in full force and effect.
4.8 Credit Agreement.
The Credit Agreement shall have been amended to permit, or the lenders
under the Credit Agreement shall have validly waived any provision of the Credit
Agreement that would prohibit, the
TIFFANY & CO. NOTE PURCHASE AGREEMENT
3
<PAGE> 9
execution and delivery of this Agreement by the Company and the Guaranty
Agreement by all of the Guarantors, and a copy of such amendment or waiver,
certified as true and correct by a Responsible Officer on behalf of the Company,
shall have been delivered to you.
4.9 Payment of Special Counsel Fees.
Without limiting the provisions of Section 15.1, the Company shall have
paid on or before the Closing the reasonable fees, charges and disbursements of
your special counsel referred to in Section 4.4(c) to the extent reflected in a
statement of such counsel rendered to the Company at least one Business Day
prior to the date of the Closing.
4.10 Private Placement Numbers.
A Private Placement Number issued by Standard & Poor's CUSIP Service
Bureau (in cooperation with the Securities Valuation Office of the National
Association of Insurance Commissioners) shall have been obtained for each Series
of Notes.
4.11 Changes in Corporate Structure.
Except as specified in Schedule 4.11, the Company shall not have changed
its jurisdiction of incorporation or been a party to any merger or consolidation
and shall not have succeeded to all or any substantial part of the liabilities
of any other entity, at any time following the date of the most recent financial
statements referred to in Schedule 5.5.
4.12 Proceedings and Documents.
All corporate and other proceedings in connection with the transactions
contemplated by this Agreement and all documents and instruments incident to
such transactions shall be satisfactory to you and your special counsel, and you
and your special counsel shall have received all such counterpart originals or
certified or other copies of such documents as you or they may reasonably
request.
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to you that:
5.1 Organization; Power and Authority.
The Company is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation, and is duly
qualified as a foreign corporation and is in good standing in each jurisdiction
in which such qualification is required by law, other than those jurisdictions
as to which the failure to be so qualified or in good standing could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. The Company has the corporate power and authority to own or hold
under lease the properties it purports to own or hold under lease, to transact
the business it transacts and proposes to transact, to execute and deliver this
Agreement and the Other Agreements and the Notes and to perform the provisions
hereof and thereof.
5.2 Authorization, etc.
The Financing Documents have been duly authorized by all necessary
corporate action on the part of the Company and each of the Guarantors, and each
of this Agreement and the Other Agreements constitutes, and upon execution and
delivery thereof each Note and the Guaranty Agreement will
TIFFANY & CO. NOTE PURCHASE AGREEMENT
4
<PAGE> 10
constitute, a legal, valid and binding obligation of each Obligor party thereto,
enforceable against each such Obligor in accordance with its terms, except as
may be limited by (a) applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally and (b) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
5.3 Disclosure.
The Company, through its agents, ING Baring Furman Selz LLC and Chase
Securities Inc., has delivered to you and each Other Purchaser a copy of a
Private Placement Memorandum, dated November 1998 (the "Memorandum"), relating
to the transactions contemplated hereby. The Memorandum and the Company's Annual
Report to Stockholders for the Fiscal Year ended January 31, 1998, Proxy
Statement dated April 9, 1998, Annual Report on Form 10-K for the Fiscal Year
ended January 31, 1998 and Quarterly Report on Form 10-Q for the fiscal quarter
ended July 31, 1998 attached as exhibits to the Memorandum (collectively with
the Memorandum and referred to as the "Disclosure Documents"), taken as a whole,
fairly describe, in all material respects, the general nature of the business
and principal properties of the Company and its Subsidiaries. Except as
disclosed in Schedule 5.3, the Financing Documents, the Disclosure Documents,
the documents, certificates or other writings delivered to you by or on behalf
of the Company in connection with the transactions contemplated by the Financing
Documents and the financial statements listed in Schedule 5.5, taken as a whole,
do not contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements herein or therein not misleading
in light of the circumstances under which they were made. Except as disclosed in
the Memorandum or as expressly described in Schedule 5.3, or in one of the
documents, certificates or other writings identified herein or therein, or in
the financial statements listed in Schedule 5.5, since January 31, 1998, there
has been no change in the financial condition, operations, business, properties
or prospects of the Company or any Subsidiary except changes that individually
or in the aggregate could not reasonably be expected to have a Material Adverse
Effect. There is no fact known to the Company that could reasonably be expected
to have a Material Adverse Effect that has not been set forth herein or in the
Memorandum or in the other documents, certificates and other writings delivered
to you by or on behalf of the Company specifically for use in connection with
the transactions contemplated hereby.
5.4 Organization and Ownership of Shares of Subsidiaries; Affiliates.
(a) Schedule 5.4 contains (except as noted therein) complete and
correct lists of (i) the Company's Subsidiaries, showing, as to each
Subsidiary, the correct name thereof, the jurisdiction of its
organization, and the percentage of shares of each class of its Capital
Stock outstanding owned by the Company and each other Subsidiary and (ii)
the Company's Affiliates, other than Subsidiaries.
(b) All of the outstanding shares of Capital Stock of each
Subsidiary shown in Schedule 5.4 as being owned by the Company or its
Subsidiaries have been validly issued, are fully paid and nonassessable
and are owned by the Company or another Subsidiary free and clear of any
Lien (except as otherwise disclosed in Schedule 5.4).
(c) Each Subsidiary identified in Schedule 5.4 is a corporation or
other legal entity duly organized, validly existing and in good standing
under the laws of its jurisdiction of organization, and is duly qualified
as a foreign corporation or other legal entity and is in good standing in
each jurisdiction in which such qualification is required by law, other
than those jurisdictions as to which the failure to be so qualified or in
good standing could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. Each such
TIFFANY & CO. NOTE PURCHASE AGREEMENT
5
<PAGE> 11
Subsidiary has the corporate or other power and authority to own or hold
under lease the properties it purports to own or hold under lease, to
transact the business it transacts and proposes to transact, to execute
and deliver the Financing Documents to which it is a party and to perform
its obligations thereunder.
(d) No Subsidiary is a party to, or otherwise subject to any legal
restriction or any agreement (other than this Agreement, the Other
Agreements, the agreements listed in Schedule 5.4 and customary
limitations imposed by corporate law statutes) restricting the ability of
such Subsidiary to pay dividends out of profits or make any other similar
distributions of profits to the Company or any of its Subsidiaries that
owns outstanding shares of Capital Stock of such Subsidiary.
5.5 Financial Statements.
The Company has delivered to you and each Other Purchaser copies of the
consolidated financial statements of the Company and its Subsidiaries listed in
Schedule 5.5. All of said consolidated financial statements and the consolidated
financial statements set forth in its Quarterly Report on Form 10-Q for the
fiscal quarter ended October 31, 1998 (including in each case the related
schedules and notes) fairly present in all material respects the consolidated
financial position of the Company and its Subsidiaries as of the respective
dates specified in such Schedule and the consolidated results of their
operations and cash flows for the respective periods so specified and have been
prepared in accordance with GAAP consistently applied throughout the periods
involved except as set forth in the notes thereto (subject, in the case of any
interim financial statements, to normal year-end adjustments).
5.6 Compliance with Laws, Other Instruments, etc.
The execution, delivery and performance (i) by the Company of this
Agreement and the Notes, and (ii) by each of the Guarantors of the Guaranty
Agreement, will not
(a) contravene, result in any breach of, or constitute a default
under, or result in the creation of any Lien in respect of any property of
the Company or any Subsidiary under, any indenture, mortgage, deed of
trust, loan, purchase or credit agreement, lease, corporate charter or
by-laws, or any other agreement or instrument to which the Company or any
Subsidiary is bound or by which the Company or any Subsidiary or any of
their respective properties may be bound or affected,
(b) conflict with or result in a breach of any of the terms,
conditions or provisions of any order, judgment, decree, or ruling of any
court, arbitrator or Governmental Authority applicable to the Company or
any Subsidiary, or
(c) violate any provision of any statute or other rule or regulation
of any Governmental Authority applicable to the Company or any Subsidiary.
5.7 Governmental Authorizations, etc.
No consent, approval or authorization of, or registration, filing or
declaration with, any Governmental Authority is required to be obtained by the
Company or any of the Guarantors in connection with the execution, delivery or
performance (a) by the Company of this Agreement or the Notes, or (b) by each of
the Guarantors of the Guaranty Agreement.
TIFFANY & CO. NOTE PURCHASE AGREEMENT
6
<PAGE> 12
5.8 Litigation; Observance of Agreements, Statutes and Orders.
(a) There are no actions, suits or proceedings pending or, to the
knowledge of the Company, threatened against or affecting the Company or
any Subsidiary or any property of the Company or any Subsidiary in any
court or before any arbitrator of any kind or before or by any
Governmental Authority that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
(b) Neither the Company nor any Subsidiary is in default under any
term of any agreement or instrument to which it is a party or by which it
is bound, or any order, judgment, decree or ruling of any court,
arbitrator or Governmental Authority or is in violation of any applicable
law, ordinance, rule or regulation (including, without limitation,
Environmental Laws) of any Governmental Authority, which default or
violation, individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect.
5.9 Taxes.
The Company and its Subsidiaries have filed all tax returns that are
required to have been filed in any jurisdiction, and have paid all taxes shown
to be due and payable on such returns and all other taxes and assessments levied
upon them or their properties, assets, income or franchises, to the extent such
taxes and assessments have become due and payable and before they have become
delinquent, except for any taxes and assessments (a) the amount of which is not
individually or in the aggregate Material or (b) the amount, applicability or
validity of which is currently being contested in good faith by appropriate
proceedings and with respect to which the Company or a Subsidiary, as the case
may be, has established adequate reserves in accordance with GAAP. The Company
knows of no basis for any other tax or assessment that could reasonably be
expected to have a Material Adverse Effect. The charges, accruals and reserves
on the books of the Company and its Subsidiaries in respect of Federal, state or
other taxes for all fiscal periods are adequate. The Federal income tax
liabilities of the Company and its Subsidiaries subject to United States income
taxes have been determined by the Internal Revenue Service and paid for all
fiscal years up to and including the fiscal year ended January 31, 1993.
5.10 Title to Property; Leases.
The Company and its Subsidiaries have good and sufficient title to their
respective properties that individually or in the aggregate are Material,
including all such properties reflected in the most recent audited balance sheet
referred to in Section 5.5 or purported to have been acquired by the Company or
any Subsidiary after said date (except as sold or otherwise disposed of in the
ordinary course of business), in each case free and clear of Liens prohibited by
this Agreement. All leases that individually or in the aggregate are Material
are valid and subsisting and are in full force and effect in all material
respects.
5.11 Licenses, Permits, etc.
Except as disclosed in Schedule 5.11,
(a) the Company and its Subsidiaries own or possess all licenses,
permits, franchises, authorizations, patents, copyrights, service marks,
trademarks and trade names, or rights thereto, that individually or in the
aggregate are Material, without known conflict with the rights of others;
TIFFANY & CO. NOTE PURCHASE AGREEMENT
7
<PAGE> 13
(b) to the best knowledge of the Company, no product or practice of
the Company or any Subsidiary infringes in any material respect any
license, permit, franchise, authorization, patent, copyright, service
mark, trademark, trade name or other right owned by any other Person; and
(c) to the best knowledge of the Company, there is no Material
violation by any Person of any right of the Company or any of its
Subsidiaries with respect to any patent, copyright, service mark,
trademark, trade name or other right owned or used by the Company or any
of its Subsidiaries.
5.12 Compliance with ERISA.
(a) The Company and each ERISA Affiliate have operated and
administered each Plan in compliance with all applicable laws except for
such instances of noncompliance as have not resulted in and could not
reasonably be expected to result in a Material Adverse Effect. Neither the
Company nor any ERISA Affiliate has incurred any liability pursuant to
Title I or IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans (as defined in section 3 of ERISA), and
no event, transaction or condition has occurred or exists that could
reasonably be expected to result in the incurrence of any such liability
by the Company or any ERISA Affiliate, or in the imposition of any Lien on
any of the rights, properties or assets of the Company or any ERISA
Affiliate, in either case pursuant to Title I or IV of ERISA or to such
penalty or excise tax provisions or to section 401(a)(29) or 412 of the
Code, other than such liabilities or Liens as would not be individually or
in the aggregate Material.
(b) The present value of the aggregate benefit liabilities under
each of the Plans (other than Multiemployer Plans), determined as of the
end of such Plan's most recently ended plan year on the basis of the
actuarial assumptions specified for funding purposes in such Plan's most
recent actuarial valuation report, did not exceed the aggregate current
value of the assets of such Plan allocable to such benefit liabilities by
more than $2,000,000. The term "benefit liabilities" has the meaning
specified in section 4001 of ERISA and the terms "current value" and
"present value" have the meaning specified in section 3 of ERISA.
(c) The Company and the ERISA Affiliates have not incurred
withdrawal liabilities (and are not subject to contingent withdrawal
liabilities) under section 4201 or 4204 of ERISA in respect of
Multiemployer Plans that individually or in the aggregate are Material.
(d) The expected postretirement benefit obligation (determined as of
the last day of the Company's most recently ended fiscal year in
accordance with Financial Accounting Standards Board Statement No. 106,
without regard to liabilities attributable to continuation coverage
mandated by section 4980B of the Code) of the Company and its Subsidiaries
is not Material.
(e) The execution and delivery of the Financing Documents and the
issuance and sale of the Notes hereunder will not involve any transaction
that is subject to the prohibitions of section 406 of ERISA or in
connection with which a tax could be imposed pursuant to section
4975(c)(1)(A)-(D) of the Code. The representation by the Company in the
first sentence of this Section 5.12(e) is made in reliance upon and
subject to the accuracy of your representation in Section 6.2 as to the
Sources used to pay the purchase price of the Notes to be purchased by
you.
(f) Schedule 5.12 sets forth all ERISA Affiliates and all "employee
benefit plans"
TIFFANY & CO. NOTE PURCHASE AGREEMENT
8
<PAGE> 14
maintained by the Company (or any "affiliate" thereof) or in respect of
which the Notes could constitute an "employer security" ("employee benefit
plan" has the meaning specified in section 3 of ERISA, "affiliate" has the
meaning specified in section 407(d) of ERISA and section V of the
Department of Labor Prohibited Transaction Exemption 95-60 (60 FR 35925,
July 12, 1995) and "employer security" has the meaning specified in
section 407(d) of ERISA).
(g) All Foreign Pension Plans have been established, operated,
administered and maintained in compliance with all laws, regulations and
orders applicable thereto except for such failures to comply, in the
aggregate for all such failures, that could not reasonably be expected to
have a Material Adverse Effect. All premiums, contributions and any other
amounts required by applicable Foreign Pension Plan documents or
applicable laws have been paid or accrued as required, except for
premiums, contributions and amounts that, in the aggregate for all such
obligations, could not reasonably be expected to have a Material Adverse
Effect.
5.13 Private Offering by the Company.
Neither the Company nor anyone acting on its behalf has offered the Notes
or any similar securities for sale to, or solicited any offer to buy any of the
same from, or otherwise approached or negotiated in respect thereof with, any
Person other than you, the Other Purchasers and not more than 51 other
Institutional Investors, each of which has been offered the Notes at a private
sale for investment. Neither the Company nor anyone acting on its behalf has
taken, or will take, any action that would subject the issuance or sale of the
Notes to the registration requirements of section 5 of the Securities Act. For
purposes of this Section 5.13 only, each reference to the Notes shall be deemed
to include a reference to the Guaranty Agreement. The Company's representations
and warranties in this Section 5.13 are made in reliance upon similar
representations and warranties made to the Company by ING Baring Furman Selz LLC
and Chase Securities Inc. The Company believes that its reliance upon such
representations and warranties is reasonable under the circumstances and that it
is justified in relying thereon.
5.14 Use of Proceeds; Margin Regulations.
The Company will apply the proceeds of the sale of the Notes as set forth
in Schedule 5.14. No part of the proceeds from the sale of the Notes hereunder
will be used, directly or indirectly, for the purpose of buying or carrying any
margin stock within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System (12 CFR 221), or for the purpose of buying or carrying or
trading in any securities under such circumstances as to involve the Company in
a violation of Regulation X of said Board (12 CFR 224) or to involve any broker
or dealer in a violation of Regulation T of said Board (12 CFR 220). Margin
stock does not constitute more than 25% of the value of the consolidated assets
of the Company and its Subsidiaries and the Company does not have any present
intention that margin stock will constitute more than 25% of the value of such
assets. As used in this Section, the terms "margin stock" and "purpose of buying
or carrying" shall have the meanings assigned to them in said Regulation U.
TIFFANY & CO. NOTE PURCHASE AGREEMENT
9
<PAGE> 15
5.15 Existing Indebtedness; Future Liens.
(a) Except as described therein, Schedule 5.15 sets forth a complete
and correct list of all outstanding Indebtedness of the Company and its
Subsidiaries as of the dates specified in such Schedule (and specifying,
as to each such Indebtedness, the collateral, if any, securing such
Indebtedness), since which date there has been no Material change in the
amounts, interest rates, sinking funds, instalment payments or maturities
of the Indebtedness of the Company or its Subsidiaries. Neither the
Company nor any Subsidiary is in default and no waiver of default is
currently in effect, in the payment of any principal or interest on any
Indebtedness of the Company or such Subsidiary and no event or condition
exists with respect to any Indebtedness of the Company or any Subsidiary
that would permit (or that with notice or the lapse of time, or both,
would permit) one or more Persons to cause such Indebtedness to become due
and payable before its stated maturity or before its regularly scheduled
dates of payment.
(b) Except as disclosed in Schedule 5.15, neither the Company nor
any Subsidiary has agreed or consented to cause or permit in the future
(upon the happening of a contingency or otherwise) any of its property,
whether now owned or hereafter acquired, to be subject to a Lien not
permitted by Section 10.6.
5.16 Foreign Assets Control Regulations, etc.
Neither the sale of the Notes by the Company hereunder nor its use of the
proceeds thereof will violate the Trading with the Enemy Act, as amended, or any
of the foreign assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling
legislation or executive order relating thereto.
5.17 Status under Certain Statutes.
Neither the Company nor any Subsidiary is subject to regulation under the
Investment Company Act of 1940, as amended, the Public Utility Holding Company
Act of 1935, as amended, the Transportation Acts (49 U.S.C.), as amended, or the
Federal Power Act, as amended.
5.18 Environmental Matters.
Neither the Company nor any Subsidiary has knowledge of any claim or has
received any notice of any claim, and no proceeding has been instituted raising
any claim against the Company or any of its Subsidiaries or any of their
respective real properties now or formerly owned, leased or operated by any of
them or other assets, alleging any damage to the environment or violation of any
Environmental Laws, except, in each case, such as could not reasonably be
expected to result in a Material Adverse Effect. Except as otherwise disclosed
to you in writing,
(a) neither the Company nor any Subsidiary has knowledge of any
facts which would give rise to any claim, public or private, of violation
of Environmental Laws or damage to the environment emanating from,
occurring on or in any way related to real properties now or formerly
owned, leased or operated by any of them or to other assets or their use,
except, in each case, such as could not reasonably be expected to result
in a Material Adverse Effect;
(b) neither the Company nor any of its Subsidiaries has stored any
Hazardous Materials on real properties now or formerly owned, leased or
operated by any of them or disposed of any Hazardous Materials in a manner
contrary to any Environmental Laws in each
TIFFANY & CO. NOTE PURCHASE AGREEMENT
10
<PAGE> 16
case in any manner that could reasonably be expected to result in a
Material Adverse Effect; and
(c) all buildings on all real properties now owned, leased or
operated by the Company or any of its Subsidiaries are in compliance with
applicable Environmental Laws, except where failure to comply could not
reasonably be expected to result in a Material Adverse Effect.
5.19 Year 2000 Problem.
The Company has reviewed the areas within the business and operations of
the Company and its Subsidiaries which could be adversely affected by the risk
(such risk herein referred to as the "Year 2000 Problem") that computer
applications, as well as embedded microchips in non-computing devices, used by
the Company and its Subsidiaries may be unable to recognize and perform properly
date-sensitive functions involving certain dates prior to and any date after
December 31, 1999. Since July 31, 1998, there have been no changes or
developments with respect to the matters set forth in either the disclosures
made in the Company's Annual Report on Form 10-Q for the fiscal quarter ended
July 31, 1998, or in the NAIC Questionnaire-based Disclosure, in each case in
respect of the Year 2000 Problem, which would cause the Company to reasonably
believe, based upon current information, that its Year 2000 Problem will result
in a Material Adverse Effect. As used herein, "NAIC Questionnaire-based
Disclosure" means the Company's written disclosure delivered to the Purchasers
relating to the Year 2000 Problem responsive to questions promulgated by the
Securities Valuation Office of the National Association of Insurance
Commissioners as part of its credit assessment procedures for not-rated
securities.
6. REPRESENTATIONS OF THE PURCHASER
6.1 Purchase for Investment
You represent that you are purchasing the Notes for your own account or
for one or more separate accounts maintained by you or for the account of one or
more pension or trust funds and not with a view to the distribution thereof,
provided that the disposition of your or their property shall at all times be
within your or their control. You understand that the Notes have not been
registered under the Securities Act and may be resold only if registered
pursuant to the provisions of the Securities Act or if an exemption from
registration is available, except under circumstances where neither such
registration nor such an exemption is required by law, and that the Company is
not required to register the Notes.
6.2 Source of Funds
You represent that at least one of the following statements is an accurate
representation as to each source of funds (a "Source") to be used by you to pay
the purchase price of the Notes to be purchased by you hereunder:
(a) the Source is an "insurance company general account" as defined
in United States Department of Labor Prohibited Transaction Exemption
("PTE") 95-60 (60 FR 35925, July 12, 1995) and in respect thereof you
represent that there is no "employee benefit plan" (as defined in section
3(3) of ERISA and section 4975(e)(1) of the Code, treating as a single
plan all plans maintained by the same employer or employee organization or
affiliate thereof) with respect to which the amount of the general account
reserves and liabilities of all contracts held by or on behalf of such
plan exceeds 10% of the total reserves and liabilities of such general
account (exclusive of separate account liabilities) plus surplus, as set
forth in the National Association of Insurance Commissioners' Annual
Statement filed with your state of domicile; or
TIFFANY & CO. NOTE PURCHASE AGREEMENT
11
<PAGE> 17
(b) if you are an insurance company, the Source does not include
assets allocated to any separate account maintained by you in which any
employee benefit plan (or its related trust) has any interest, other than
a separate account that is maintained solely in connection with your fixed
contractual obligations under which the amounts payable, or credited, to
such plan and to any participant or beneficiary of such plan (including
any annuitant) are not affected in any manner by the investment
performance of the separate account; or
(c) the Source is either (i) an insurance company pooled separate
account, within the meaning of PTE 90-1 (issued January 29, 1990), or (ii)
a bank collective investment fund, within the meaning of the PTE 91-38
(issued July 12, 1991) and, except as you have disclosed to the Company in
writing pursuant to this paragraph (c), no employee benefit plan or group
of plans maintained by the same employer or employee organization
beneficially owns more than 10% of all assets allocated to such pooled
separate account or collective investment fund; or
(d) the Source constitutes assets of an "investment fund" (within
the meaning of part V of PTE 84-14 (the "QPAM Exemption")) managed by a
"qualified professional asset manager" or "QPAM" (within the meaning of
part V of the QPAM Exemption), no employee benefit plan's assets that are
included in such investment fund, when combined with the assets of all
other employee benefit plans established or maintained by the same
employer or by an affiliate (within the meaning of section V(c)(1) of the
QPAM Exemption) of such employer or by the same employee organization and
managed by such QPAM, exceed 20% of the total client assets managed by
such QPAM, the conditions of part I(c) and (g) of the QPAM Exemption are
satisfied, neither the QPAM nor a person controlling or controlled by the
QPAM (applying the definition of "control" in section V(e) of the QPAM
Exemption) owns a 5% or more interest in the Company and
(i) the identity of such QPAM and
(ii) the names of all employee benefit plans whose assets are
included in such investment fund
have been disclosed to the Company in writing pursuant to this
paragraph (d); or
(e) the Source is a governmental plan; or
(f) the Source is one or more employee benefit plans, or a separate
account or trust fund comprised of one or more employee benefit plans,
each of which has been identified to the Company in writing pursuant to
this paragraph (f); or
(g) the Source does not include assets of any employee benefit plan,
other than a plan exempt from the coverage of ERISA.
As used in this Section 6.2, the terms "employee benefit plan", "governmental
plan" and "separate account" shall have the respective meanings assigned to such
terms in section 3 of ERISA.
TIFFANY & CO. NOTE PURCHASE AGREEMENT
12
<PAGE> 18
7. INFORMATION AS TO COMPANY
7.1 Financial and Business Information
The Company shall deliver to each holder of Notes that is an Institutional
Investor:
(a) Quarterly Statements -- within 60 days after the end of each
quarterly fiscal period in each fiscal year of the Company (other than the
last quarterly fiscal period of each such fiscal year), duplicate copies
of,
(i) a consolidated balance sheet of the Company and its
Subsidiaries as at the end of such quarter, and
(ii) consolidated statements of earnings, stockholders' equity
and cash flows of the Company and its Subsidiaries, for such quarter
and (in the case of the second and third quarters) for the portion
of the fiscal year ending with such quarter,
setting forth in each case in comparative form the figures for the
corresponding periods in the previous fiscal year, all in reasonable
detail, prepared in accordance with GAAP applicable to quarterly financial
statements generally, and certified on behalf of the Company by a Senior
Financial Officer as fairly presenting, in all material respects, the
consolidated financial position of the companies being reported on and
their consolidated results of operations and cash flows, subject to
changes resulting from year-end adjustments, provided that delivery within
the time period specified above of copies of the Company's Quarterly
Report on Form 10-Q (including copies of each exhibit filed therewith)
prepared in compliance with the requirements therefor and filed with the
Securities and Exchange Commission shall be deemed to satisfy the
requirements of this Section 7.1(a) so long as such Report includes each
of the financial statements (and the comparative historical figures)
referred to above;
(b) Annual Statements -- within 105 days after the end of each
fiscal year of the Company, duplicate copies of,
(i) a consolidated balance sheet of the Company and its
Subsidia