Delaware | 1-9494 | 13-3228013 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||
200 Fifth Avenue, New York, New York | 10010 | |||
(Address of principal executive offices) | (Zip Code) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
3.2 | Restated By-laws of Registrant, as last amended March 20, 2014. |
10.28p | Terms of Time-Vesting Restricted Stock Unit Grant to Executive Officers as adopted on November 20, 2013 under Registrant's 2005 Employee Incentive Plan. |
10.28q | Terms of 2014 Performance-Based Restricted Stock Unit Grants to Executive Officers as adopted on January 16, 2014 for use with grants made that same date under Registrant's 2005 Employee Incentive Plan. |
10.28r | Form of Non-Competition and Confidentiality Covenants for use in connection with Performance-Based Restricted Stock Unit Grants to Registrant’s Executive Officers, and Time-Vesting Restricted Unit Awards and Certain Non-Qualified Retirement Contributions made to other officers of Registrant’s affiliated companies pursuant to the Registrant’s 2005 Employee Incentive Plan and Pursuant to the Tiffany and Company Deferral Plan. |
10.139d | Form of Fiscal 2014 Cash Incentive Award Agreement for certain executive officers as adopted on March 19, 2014 under Registrant's 2005 Employee Incentive Plan. |
10.152 | Share Ownership Policy for Executive Officers and Directors, Amended and Restated as of March 20, 2014. |
10.153 | Corporate Governance Principles, amended and restated as of March 20, 2014. |
99.1 | News Release dated March 21, 2014. |
99.2 | News Release dated March 21, 2014. |
TIFFANY & CO. | ||
(Registrant) | ||
By: /s/ Patrick B. Dorsey | ||
Patrick B. Dorsey | ||
Senior Vice President, Secretary | ||
and General Counsel | ||
Date: March 21, 2014 |
Exhibit No. | Description |
3.2 | Restated By-laws of Registrant, as last amended March 20, 2014. |
10.28p | Terms of Time-Vesting Restricted Stock Unit Grant to Executive Officers as adopted on November 20, 2013 under Registrant's 2005 Employee Incentive Plan. |
10.28q | Terms of 2014 Performance-Based Restricted Stock Unit Grants to Executive Officers as adopted on January 16, 2014 for use with grants made that same date under Registrant's 2005 Employee Incentive Plan. |
10.28r | Form of Non-Competition and Confidentiality Covenants for use in connection with Performance-Based Restricted Stock Unit Grants to Registrant’s Executive Officers, and Time-Vesting Restricted Unit Awards and Certain Non-Qualified Retirement Contributions made to other officers of Registrant’s affiliated companies pursuant to the Registrant’s 2005 Employee Incentive Plan and Pursuant to the Tiffany and Company Deferral Plan. |
10.139d | Form of Fiscal 2014 Cash Incentive Award Agreement for certain executive officers as adopted on March 19, 2014 under Registrant's 2005 Employee Incentive Plan. |
10.152 | Share Ownership Policy for Executive Officers and Directors, Amended and Restated as of March 20, 2014. |
10.153 | Corporate Governance Principles, amended and restated as of March 20, 2014. |
99.1 | News Release dated March 21, 2014. |
99.2 | News Release dated March 21, 2014. |
Restated By-Laws: Tiffany & Co. (DE) 03/20/14 | Page 2 |
Restated By-Laws: Tiffany & Co. (DE) 03/20/14 | Page 3 |
Restated By-Laws: Tiffany & Co. (DE) 03/20/14 | Page 4 |
Restated By-Laws: Tiffany & Co. (DE) 03/20/14 | Page 5 |
Restated By-Laws: Tiffany & Co. (DE) 03/20/14 | Page 6 |
Restated By-Laws: Tiffany & Co. (DE) 03/20/14 | Page 7 |
Restated By-Laws: Tiffany & Co. (DE) 03/20/14 | Page 8 |
Restated By-Laws: Tiffany & Co. (DE) 03/20/14 | Page 9 |
Restated By-Laws: Tiffany & Co. (DE) 03/20/14 | Page 10 |
Restated By-Laws: Tiffany & Co. (DE) 03/20/14 | Page 11 |
Restated By-Laws: Tiffany & Co. (DE) 03/20/14 | Page 12 |
Exhibit 10.28p |
RESTRICTED |
STOCK GRANT |
TERMS |
Cliff-Vesting |
Tiffany & Co. 2005 Employee Incentive Plan | Page 2 | |
Restricted Stock Grant: Terms of Stock Grant Award |
Tiffany & Co. 2005 Employee Incentive Plan | Page 3 | |
Restricted Stock Grant: Terms of Stock Grant Award |
• | Participant’s conviction or plea of nolo contendere to a felony or any other crime involving moral turpitude which would tend to subject Employer, Parent or any Tiffany Affiliate to public criticism or to materially interfere with Participant’s continued service to Employer or Parent; |
• | Participant’s willful and material violation of Employer’s Business Conduct Policy - Worldwide, as it may be amended from time to time; |
• | Participant’s willful failure, or willful refusal to attempt, to perform substantially all such proper and achievable directives issued by the CEO or the Parent Board (other than any such failure resulting from incapacity due to physical or mental illness, or any such refusal made in good faith because Participant believes such directives to be illegal, unethical or immoral) after a written demand for substantial performance is delivered to Participant on behalf of Employer, which demand specifically identifies the manner in which Participant has not substantially performed his duties, and which performance is not substantially corrected by Participant within ten (10) business days of receipt of such demand; |
• | Participant’s fraud or theft with regard to Parent or any Tiffany Affiliate; |
• | Participant’s willful failure to reasonably cooperate in any investigation of alleged misconduct by Participant or by any other Participant of Parent, Employer or any Tiffany Affiliate; |
• | Participant’s willful and material breach of any non-competition or confidentiality covenants that Participant has entered into with Employer; |
• | Participant’s alcoholism or illicit drug use that materially interferes with Participant’s job performance or his ability to perform his services hereunder or that has a material adverse effect on the reputation of Employer, Parent or any Tiffany Affiliate or their respective products, trademarks or goodwill. |
Tiffany & Co. 2005 Employee Incentive Plan | Page 4 | |
Restricted Stock Grant: Terms of Stock Grant Award |
(i) | any Person, or any syndicate or group deemed to be a person under Section 14(d)(2) of the Exchange Act, excluding Parent or any of its Affiliates, a trustee or any fiduciary holding securities under an employee benefit plan of Parent or any of its Affiliates, an underwriter temporarily holding securities pursuant to an offering of such securities or a corporation owned, directly or indirectly by stockholders of Parent in substantially the same proportion as their ownership of Parent, is or becomes the “beneficial owner” (as defined in Rule 13d-3 of the General Rules and Regulations under the Exchange Act), directly or indirectly, of securities of Parent representing Thirty-five percent (35%) or more of the combined voting power of Parent’s then outstanding securities entitled to vote in the election of directors of Parent; |
(ii) | if the Incumbent Directors cease to constitute a majority of the Parent Board; provided, however, that no person shall be deemed an Incumbent Director if he or she was appointed or elected to the Parent Board after having been designated to serve on the Parent Board by a Person who has entered into an agreement with Parent to effect a transaction described in clauses (i) through (iv) of this definition; |
(iii) | there occurs a reorganization, merger, consolidation or other corporate transaction involving Parent, in each case with respect to which the stockholders of Parent immediately prior to such transaction do not, immediately after such transaction, own more than Fifty percent (50%) of the combined voting power of the Parent or other corporation resulting from such transaction, as the case may be; |
(iv) | all or substantially all of the assets of Parent or Employer are sold, liquidated or distributed, except to an Affiliate of Parent. |
Tiffany & Co. 2005 Employee Incentive Plan | Page 5 | |
Restricted Stock Grant: Terms of Stock Grant Award |
• | a material adverse change in Participant’s duties, authority or responsibilities; |
• | a material adverse change in Participant’s reporting responsibility; |
• | a failure of any successor to Employer or Parent (whether direct or indirect and whether by merger, acquisition, consolidation, asset sale or otherwise) to assume in writing any obligations arising out of these Terms or any other agreement between Employer or Parent and Participant; |
• | any other action or inaction that constitutes a material breach by Employer or Parent of these Terms or any other agreement between Participant and Employer (for this purpose, a “material breach” by Employer or Parent shall include any reduction in Participant’s Base Salary or in his Target Incentive Award (but, for the avoidance of doubt, any actual pay-out of an Incentive Award for a given Fiscal Year which is less than the Target Incentive Award shall not constitute Good Reason, provided that such lower pay-out is based upon the failure to meet Performance Goals or a good faith determination by the Compensation Committee that Parent’s financial performance or Participant’s personal |
Tiffany & Co. 2005 Employee Incentive Plan | Page 6 | |
Restricted Stock Grant: Terms of Stock Grant Award |
• | Parent’s failure to comply with the terms of any equity award granted to or required by contract to be granted to Participant; and |
• | Employer requires Participant to be based at an office or location other than one located in New York, New York. |
(i) | a reorganization, merger or consolidation of the Parent with one or more Persons as a result of which the Parent goes out of existence or becomes a subsidiary of another Person; or |
Tiffany & Co. 2005 Employee Incentive Plan | Page 7 | |
Restricted Stock Grant: Terms of Stock Grant Award |
(ii) | upon the acquisition of substantially all of the property or more than eighty percent (80%) of the then outstanding stock of the Parent by another Person; |
Tiffany & Co. 2005 Employee Incentive Plan | Page 8 | |
Restricted Stock Grant: Terms of Stock Grant Award |
Exhibit 10.28q |
2014 |
PERFORMANCE- |
BASED RESTRICTED |
STOCK GRANT |
TERMS |
(a) | The Performance Portion shall be 0% of the Stock Units if the Earnings Threshold is not attained over the Performance Period. |
(b) | Subject to reduction pursuant to subsection (c) below, if the Earnings Threshold has been attained over the Performance Period, the Performance Portion shall be 100% of the Stock Units. |
(c) | If the Earnings Threshold has been attained over the Performance Period the Committee shall, in its sole discretion, have the right to reduce the Performance Portion to 0% of the Stock Units or any percentage of the Stock Units less than 100%. The Committee may exercise such discretion on any date that occurs following the close of the Performance Period and prior to the Maturity Date. The Committee has provided guidance to Participant with respect to factors, including the Earnings Target, the Earnings Maximum and the ROA Target, that the Committee intends to apply in effecting such a reduction, but the Committee shall not be limited in its discretion to those factors. |
(a) | if the Participant’s Date of Termination occurs by reason of death or Disability within the last fiscal year of the Performance Period, Stock Units shall vest as provided in Section 3 above as though the Participant’s Date of Termination had not occurred before the conclusion of the Performance Period; |
(b) | if the Participant’s Date of Termination occurs by reason of death or Disability within the second fiscal year of the Performance Period, 34% of Stock Units shall vest on the date of such death or Disability; |
Tiffany & Co. 2005 Employee Incentive Plan | Page 2 | |
2014 Performance-Based Stock Grant: Terms of Stock Grant Award - 2010 Grant |
(c) | if the Participant’s Date of Termination occurs by reason of death or Disability within the first fiscal year of the Performance Period, 17% of Stock Units shall vest on the date of such death or Disability; |
(d) | if the Participant’s Date of Termination occurs by reason of Cause, no Stock Units shall vest; |
(e) | if the Participant’s Date of Termination occurs by reason of Participant’s voluntary resignation, no Stock Units shall vest; and |
(f) | if the Participant’s Date of Termination occurs at the initiative of the Participant’s employer (but not for Cause) the Committee reserves the right to vest the Stock Units as follows, but may condition such vesting upon Participant’s release of the Parent and its affiliates from all claims, Participant’s agreement to reasonable non-competition covenants or both: |
(i) | If the Date of Termination occurs in the last fiscal year of the Performance Period, the percentage of the Stock Units the Committee may elect to vest will be based on the Company’s cumulative performance during the first and second fiscal year of the Performance Period, as compared to the Earnings Threshold, Earnings Target, and Earnings Maximum expressed in the Notice of Grant. For purposes of this Section 4(f)(i), the Earnings Threshold, Earnings Target, and Earnings Maximum shall be pro-rated for the cumulative two-year period (66.67%), and applied in a manner consistent with the guidance provided by the Committee as referenced in Section 3(c) above. Achievement of the ROA Target shall not be considered as a factor in determining the number of units to vest. |
(ii) | If the Date of Termination occurs in the second fiscal year of the Performance Period, the percentage of the Stock Units the Committee may elect to vest will be based on the Company’s cumulative performance during the first fiscal year of the Performance Period, as compared to the Earnings Threshold, Earnings Target, and Earnings Maximum expressed in the Notice of Grant. For purposes of this Section 4(f)(i), the Earnings Threshold, Earnings Target, and Earnings Maximum shall be pro-rated for the cumulative two-year period (33.33%), and applied in a manner consistent with the guidance provided by the Committee as referenced in Section 3(c) above. Achievement of the ROA Target shall not be considered as a factor in determining the number of units to vest. |
(iii) | For the avoidance of doubt no vesting shall occur pursuant to Sections 4(f)(i) and (ii) above if the Date of Termination occurs before the start of the Performance Period, or during the first fiscal year of the Performance Period. |
(a) | In the event of a Change in Control, Stock Units will convert to Time-Based Restricted Stock Units as follows: |
(i) | If the Change in Control occurs in the first or second fiscal year of the Performance Period, then 55% Stock Units shall convert to Time-Based Restricted Stock Units; |
Tiffany & Co. 2005 Employee Incentive Plan | Page 3 | |
2014 Performance-Based Stock Grant: Terms of Stock Grant Award - 2010 Grant |
(ii) | If the Change in Control occurs in the last fiscal year of the Performance Period, the percentage of the Target award number of Stock Units to convert to Time-Based Restricted Stock Units will be based on the Company’s cumulative performance during the first and second fiscal year of the Performance Period, as compared to the Earnings Threshold, Earnings Target, and Earnings Maximum expressed in the Notice of Grant. For purposes of this Section 5(a)(ii), the Earnings Threshold, Earnings Target, and Earnings Maximum shall be pro-rated for the cumulative two-year period (66.67%), and applied in a manner consistent with the guidance provided by the Committee as referenced in Section 3(c) above. Achievement of the ROA Target shall not be considered as a factor in determining the number of units converted to Time-Based Restricted Stock Units. |
(b) | The vesting of the Time-Based Restricted Stock Units converted as described in Section 5(a): |
(i) | Will be accelerated to the Date of Termination if the Participant is subject to Involuntary Termination prior to the Maturity Date. |
(ii) | Will occur on the Maturity Date, if Vesting has not otherwise been accelerated as provided above. |
(d) | In the event of vesting pursuant to this Section 5, the Settlement Value of each Vested Unit shall, within thirty days after vesting, be issued and delivered to or for the account of Participant in Shares. As provided for in Section 7 below, the Parent may make such delivery to a Service Provider. |
Tiffany & Co. 2005 Employee Incentive Plan | Page 4 | |
2014 Performance-Based Stock Grant: Terms of Stock Grant Award - 2010 Grant |
Tiffany & Co. 2005 Employee Incentive Plan | Page 5 | |
2014 Performance-Based Stock Grant: Terms of Stock Grant Award - 2010 Grant |
(i) | Participant’s conviction or plea of nolo contendere to a felony or any other crime involving financial impropriety or which would tend to subject Employer or any of its Affiliates to public criticism or materially interfere with Participant’s continued service to Employer; |
(ii) | Participant’s willful violation of the Code of Conduct; |
(iii) | Participant’s willful failure or refusal to perform substantially all such proper and achievable directives issued by Participant’s superior (other than any such failure resulting from Participant’s incapacity due to physical or mental illness, any such actual or anticipated failure resulting from a resignation by Participant for Good Reason, or any such refusal made by Participant in good faith because Participant believes such directives to be illegal, unethical or immoral) after a written demand for substantial performance is delivered to Participant on behalf of Employer, which demand specifically identifies the manner in which Participant has not substantially performed Participant’s duties, and which performance is not substantially corrected by Participant within ten (10) days of receipt of such demand; |
(iv) | Participant’s gross negligence in the performance of Participant’s duties and responsibilities materially injurious to the Employer; |
(v) | Participant’s willful breach of any material obligation that Participant has to Parent or Employer under any written agreement that Participant has with either Parent or Employer; |
(vi) | Participant’s fraud or dishonesty with regard to Employer or any of its Affiliates; |
(vii) | Participant’s failure to reasonably cooperate in any investigation of alleged misconduct by Participant or by any other employee of Parent, Employer or any Affiliate of Parent or Employer; |
Tiffany & Co. 2005 Employee Incentive Plan | Page 6 | |
2014 Performance-Based Stock Grant: Terms of Stock Grant Award - 2010 Grant |
(i) | any Person, or any syndicate or group deemed to be a person under Section 14(d)(2) of the Exchange Act, excluding Parent or any of its Affiliates, a trustee or any fiduciary holding securities under an employee benefit plan of Parent or any of its Affiliates, an underwriter temporarily holding securities pursuant to an offering of such securities or a corporation owned, directly or indirectly by stockholders of Parent in substantially the same proportion as their ownership of Parent, is or becomes the “beneficial owner” (as defined in Rule 13d-3 of the General Rules and Regulations under the Exchange Act), directly or indirectly, of securities of Parent representing Thirty-five percent (35%) or more of the combined voting power of Parent’s then outstanding securities entitled to vote in the election of directors of Parent; |
(ii) | if the Incumbent Directors cease to constitute a majority of the Parent Board; provided, however, that no person shall be deemed an Incumbent Director if he or she was appointed or elected to the Parent Board after having been designated to serve on the Parent Board by a Person who has entered into an agreement with Parent to effect a transaction described in clauses (i) through (iv) of this definition; |
(iii) | there occurs a reorganization, merger, consolidation or other corporate transaction involving Parent, in each case with respect to which the stockholders of Parent immediately prior to such transaction do not, immediately after such transaction, own more than Fifty percent (50%) of the combined voting power of the Parent or other corporation resulting from such transaction, as the case may be; |
(iv) | all or substantially all of the assets of Parent or Employer are sold, liquidated or distributed, except to an Affiliate of Parent. |
Tiffany & Co. 2005 Employee Incentive Plan | Page 7 | |
2014 Performance-Based Stock Grant: Terms of Stock Grant Award - 2010 Grant |
(i) | a meaningful and detrimental alteration in Participant’s position or the nature or status of Participant’s responsibilities (including reporting responsibilities) from those in effect immediately before the Change in Control Date; |
(ii) | a material failure by Employer to pay Participant a bonus or incentive award commensurate with the bonus paid others at Participant’s job level (expressed as a percentage of target bonus) unless such failure is justified by clear and objective deficiencies of the business units for which Participant is responsible; |
Tiffany & Co. 2005 Employee Incentive Plan | Page 8 | |
2014 Performance-Based Stock Grant: Terms of Stock Grant Award - 2010 Grant |
(iii) | the relocation of the office of Employer where Participant was employed immediately prior to the Change in Control Date to a location which is more than 50 miles away or should Employer require Participant to be based more than 50 miles away from such office (except for required travel on the Employer’s business to an extent substantially consistent with Participant’s customary business travel obligations in the ordinary course of business prior to the Change in Control Date); or |
(iv) | a Substantial Change. |
Tiffany & Co. 2005 Employee Incentive Plan | Page 9 | |
2014 Performance-Based Stock Grant: Terms of Stock Grant Award - 2010 Grant |
Tiffany & Co. 2005 Employee Incentive Plan | Page 10 | |
2014 Performance-Based Stock Grant: Terms of Stock Grant Award - 2010 Grant |
A. | Participant wishes to receive Equity Awards which might be granted to Participant in the future or which have been granted to Participant on the condition that Participant executes and delivers this instrument; |
B. | Participant wishes to have Excess DCRB Contributions made on his behalf by Tiffany pursuant to the terms of the Deferral Plan; |
C. | Participant is willing to make the promises set forth in this instrument, and to execute and deliver this instrument, in order to be eligible to (i) receive Equity Awards in the future and to have the benefit of Equity Awards which have been granted to Participant on the condition that Participant executes and delivers this instrument and (ii) to have the benefit of Excess DCRB Contributions; |
D. | Participant understands that Equity Awards and any Excess DCRB Contributions and Investment Fund performance credited to such contributions in a Participant’s Deferred Benefit Accounts may be forfeited if Participant breaches the covenants contained in this instrument; |
E. | Participant understands that the Proceeds of Equity Awards may become due and payable by Participant to Tiffany and Company if Participant breaches the covenants contained in this instrument; |
F. | Participant agrees that the receipt of one or more Equity Awards is full and fair and consideration for the covenants made in this instrument. |
(i) | Participant’s conviction or plea of no contest to a felony involving financial impropriety or a felony which would tend to subject the Company or any of its Affiliates to public criticism or materially interfere with Participant’s continued service to the Company or its Affiliate; |
(ii) | Participant’s willful and unauthorized disclosure of material Confidential Information which disclosure actually results in substantive harm to the Company’s or its Affiliate’s business or puts such business at an actual competitive disadvantage; |
(iii) | Participant’s willful failure or refusal to perform substantially all such proper and achievable directives issued by Participant’s superior (other than: (A) any such failure resulting from Participant’s incapacity due to physical or mental illness, or (B) any such refusal made by Participant in good faith because Participant believes such directives to be illegal, unethical or immoral) after a written demand for substantial performance is delivered to Participant on behalf of Company, which demand specifically identifies the manner in which Participant has not substantially performed Participant’s duties, and which performance is not substantially corrected by Participant within ten (10) days of receipt of such demand; |
(iv) | Participant’s commission of any willful act which is intended by Participant to result in his personal enrichment at the expense of the Company or any of its Affiliates, or which could reasonably be expected by him to materially injure the reputation, business or business relationships of the Company or any of its Affiliates; |
(v) | A theft, fraud or embezzlement perpetrated by Participant upon Company or any of its Affiliates. |
(i) | any Person, or any syndicate or group deemed to be a person under Section 14(d)(2) of the Exchange Act, excluding Parent or any of its Affiliates, a trustee or any fiduciary holding securities under an employee benefit plan of Parent or any of its Affiliates, an underwriter temporarily holding securities pursuant to an offering of such securities or a |
(ii) | ten (10) days following the “Shares Acquisition Date” if any Person has in fact become and then remains an “Acquiring Person” under the Rights Plan; |
(iii) | if the Parent Board should resolve to redeem the “Rights” under the Rights Plan in response to a proposal by any Person to acquire, directly or indirectly, securities of Parent representing Fifteen percent (15%) or more of the combined voting power of Parent’s then outstanding securities entitled to vote in the election of directors of Parent; |
(iv) | if the Incumbent Directors cease to constitute a majority of the Parent Board; provided, however, that no person shall be deemed an Incumbent Director if he or she was appointed or elected to the Parent Board after having been designated to serve on the Parent Board by a Person who has entered into an agreement with Parent to effect a transaction described in clauses (i), (iii), (v), (vi), (vii), (viii) or (ix) of this definition; |
(v) | there occurs a reorganization, merger, consolidation or other corporate transaction involving Parent, in each case with respect to which the stockholders of Parent immediately prior to such transaction do not, immediately after such transaction, own more than Fifty percent (50%) of the combined voting power of the Parent or other corporation resulting from such transaction, as the case may be; |
(vi) | all or substantially all of the assets of Parent are sold, liquidated or distributed, except to an Affiliate of Parent; |
(vii) | all or substantially all of the assets of Tiffany and Company are sold, liquidated or distributed, except to an Affiliate of Parent; |
(viii) | any Person, or any syndicate or group deemed to be a person under Section 14(d)(2) of the Exchange Act, excluding Parent or any of its Affiliates, a trustee or any fiduciary holding securities under an employee benefit plan of Parent or any of its Affiliates, an underwriter temporally holding securities pursuant to an offering of such securities or a corporation owned, directly or indirectly by stockholders of Parent in substantially the same proportion as their ownership of Parent, is or becomes the “beneficial owner” (as defined in Rule 13d-3 of the General |
(ix) | there is a “change of control” or a “change in the effective control” of Parent within the meaning of Section 280G of the Code and the Regulations. |
(ii) | use one of the following methods of delivery, each of which for purposes of this Agreement is a writing: |
(A) | Personal delivery. |
(B) | Registered or Certified Mail, in each case, return receipt requested and postage prepaid. |
(C) | Nationally recognized overnight courier, with all fees prepaid. |
Tiffany & Co. | ||
(the “Company”) | ||
[Name of Executive] | ||
Tiffany and Company | ||
(“Tiffany”) | ||
(i) | a Disposition of Gross Incentive Stock, but not in excess of seventy-five percent (75%) of the Gross Incentive Stock deemed issued as a consequence of any vesting or exercise, such percentage to include shares sold or withheld to cover Acquisition Costs; |
(ii) | a Disposition made under circumstances constituting a Financial Hardship; or |
(iii) | a Disposition made pursuant to a Qualified Domestic Relations Order. |
Example 1: | A Covered Person who is not a Significant Portfolio Owner exercises a stock option for 1,000 shares. He may sell up to 750 of the shares issued on exercise. If the proceeds of such sale are not sufficient to cover Acquisition Costs, he must pay any shortfall in Acquisition Costs out of pocket. He must retain 250 shares in his account to build a Significant Portfolio. |
Example 2: | A Covered Person who is not a Significant Portfolio Owner is granted 2,000 Performance-based Restricted Stock Units. 1,000 of these units vest at the end of the performance period; 500 of these units are withheld by the Corporation to cover Acquisition Costs and 500 are transferred to the account of the Covered Person. Covered Person may sell up to 250 shares (.75 x 1000 = 750-500= 250). He must retain 250 shares in his account to build a Significant Portfolio. |
Fifth Avenue & 57th Street | Contact: | |||
New York, N.Y. 10022 | Mark L. Aaron | |||
212-230-5301 | ||||
mark.aaron@tiffany.com |
▪ | Worldwide net sales increased 5% to $1.3 billion. On a constant-exchange-rate basis that excludes the effect of translating foreign-currency-denominated sales into U.S. dollars (see “Non-GAAP Measures”), worldwide net sales increased 9%, and comparable store sales rose 6% as a result of increased sales in all regions. |
▪ | In the quarter, the Company recorded a net pretax charge of $473 million ($293 million after tax, or $2.27 per diluted share) related to an adverse arbitration ruling (see the Company’s news release issued on December 22, 2013: “Award Issued in Arbitration |
▪ | Worldwide net sales increased 6% to $4.0 billion. On a constant-exchange-rate basis, worldwide net sales rose 10% and comparable store sales rose 6% due to growth in all regions. |
▪ | Net earnings were $181 million, or $1.41 per diluted share. Excluding the aforementioned charge in the fourth quarter, as well as expenses of $9 million, or $0.04 per diluted share, that had been recorded in this year’s first quarter for specific staff and occupancy reductions (see “Non-GAAP Measures”), net earnings increased 15% to $481 million, or $3.73 per diluted share, from $416 million, or $3.25 per diluted share, in the prior year. |
▪ | In the Americas region, total sales rose 6% to $659 million in the fourth quarter and 5% to $1.9 billion in the full year. On a constant-exchange-rate basis, total sales rose 7% in the quarter and 5% in the full year; comparable store sales increased 7% in the quarter due to growth in most markets, and rose 3% in the full year led by growth in New York flagship store sales as well as modest growth in branch store sales. |
▪ | Total sales in the Asia-Pacific region increased 8% to $275 million in the fourth quarter and 17% to $945 million in the full year. On a constant-exchange-rate basis, total sales rose 11% in the quarter and 18% in the full year; comparable store sales increased 4% in the quarter due to growth in Greater China and most other markets, and increased 11% in the year due to broad-based sales growth across the region. |
▪ | Tiffany’s business in Japan performed well throughout the year. A negative translation effect from a substantially weaker yen versus the U.S. dollar resulted in total sales declining 12% to $169 million in the fourth quarter and 9% to $579 million in the full year. However, on a constant-exchange-rate basis, total sales increased 8% in the fourth quarter and 11% in the full year, with 8% and 10% growth in comparable store sales. |
▪ | In Europe, total sales increased 10% to $161 million in the fourth quarter and rose 9% to $470 million in the full year. On a constant-exchange-rate basis, total sales rose 7% in both the quarter and full year; comparable store sales rose 2% in the quarter and 4% in the year due to growth in most countries. |
▪ | Other sales increased 47% to $35 million in the fourth quarter and 53% to $111 million in the full year. On a constant-exchange-rate basis, total Other sales also increased 47% and |
▪ | Tiffany added 14 stores (net) in 2013. At January 31, 2014, the Company operated 289 stores (121 in the Americas, 72 in Asia-Pacific, 54 in Japan, 37 in Europe and five in the U.A.E.), versus 275 stores (115 in the Americas, 66 in Asia-Pacific, 55 in Japan, 34 in Europe and five in the U.A.E.) a year ago. |
▪ | Gross margin (gross profit as a percentage of net sales) increased 1.4 points to 60.5% in the fourth quarter and rose 1.1 points to 58.1% in the full year. Gross margin in both periods largely benefited from reduced product cost pressures, as well as price increases taken earlier in the year. In addition, a sales mix shift in the full year toward higher-priced, lower gross margin products offset some of those benefits. |
▪ | SG&A (selling, general and administrative) expenses rose 7% in the fourth quarter and 6% in the full year, with the increases in both periods largely reflecting incremental fixed and variable labor costs and higher store-related expenses. The translation effect from a stronger U.S. dollar reduced SG&A expense growth by 3% in both the quarter and full year. |
▪ | Interest and other expenses, net were $8 million in the fourth quarter and $49 million in the full year, versus $14 million and $54 million in the respective periods last year. Interest and other expenses, net in the quarter and full year included $7 million associated with a foreign currency transaction gain related to the payment of the arbitration award (see “Non-GAAP Measures”). |
▪ | The Company had an income tax benefit in the fourth quarter due to the effect of the arbitration award. The effective income tax rate was 28.8% in the full year. Excluding the above-mentioned charges, the effective income tax rates were 36.1% in the fourth quarter and 34.8% in the full year, versus 35.0% and 35.3% in the prior year. |
▪ | Cash and cash equivalents and short-term investments were $367 million at January 31, 2014, compared with $506 million a year ago reflecting the Company’s $473 million cash payment tied to the aforementioned adverse arbitration ruling. Short-term and long-term debt totaled $1.0 billion at January 31, 2014 versus $959 million a year ago. As a percentage of stockholders' equity, total debt was 37% at both January 31, 2014 and January 31, 2013. |
▪ | Net inventories increased 4% in the full year to $2.3 billion at January 31, 2014. Finished goods inventories and combined raw material and work-in-process inventories increased at similar rates. On a constant-exchange-rate basis, net inventories rose 6% over last year. |
▪ | Capital expenditures were $221 million in 2013, versus $220 million in the prior year. |
▪ | The Company incurred a “free cash outflow” (net cash provided by operating activities less capital expenditures) in the full year (see “Non-GAAP Measures”), which was entirely due to the $473 million arbitration award payment. |
a) | Worldwide net sales increasing by a high-single-digit percentage in U.S. dollars and on a constant-exchange-rate basis, with all regions expected to achieve growth in their total sales and comparable store sales. |
b) | Adding 13 Company-operated stores and closing four existing stores: opening four in the Americas, five in Asia-Pacific, two in Japan, and one each in Europe and Russia, while closing one each in the Americas, Asia-Pacific, Japan and the U.A.E. |
c) | Earnings from operations as a percentage of net sales ("operating margin") increasing due to a higher gross margin and SG&A expense growth less than sales growth. |
d) | Interest and other expenses, net of $65 - $70 million with the increase over 2013 reflecting the interest cost on higher average levels of net-debt. |
e) | An effective income tax rate of 35%. |
f) | A 6% increase in net inventories. |
g) | Capital expenditures increasing to $270 million, with the increase over 2013 largely reflecting incremental investments in certain information technology systems. |
h) | Free cash flow (cash flow from operating activities less capital expenditures) of at least $400 million. |
Fourth Quarter 2013 vs. 2012 | Full Year 2013 vs. 2012 | ||||||||||
GAAP Reported | Translation Effect | Constant- Exchange- Rate Basis | GAAP Reported | Translation Effect | Constant- Exchange- Rate Basis | ||||||
Net Sales: | |||||||||||
Worldwide | 5% | (4)% | 9% | 6% | (4)% | 10% | |||||
Americas | 6% | (1)% | 7% | 5% | —% | 5% | |||||
Asia-Pacific | 8% | (3)% | 11% | 17% | (1)% | 18% | |||||
Japan | (12)% | (20)% | 8% | (9)% | (20)% | 11% | |||||
Europe | 10% | 3% | 7% | 9% | 2% | 7% | |||||
Other | 47% | —% | 47% | 53% | —% | 53% | |||||
Comparable Store Sales: | |||||||||||
Worldwide | 2% | (4)% | 6% | 3% | (3)% | 6% | |||||
Americas | 6% | (1)% | 7% | 3% | —% | 3% | |||||
Asia-Pacific | 1% | (3)% | 4% | 10% | (1)% | 11% | |||||
Japan | (11)% | (19)% | 8% | (10)% | (20)% | 10% | |||||
Europe | 5% | 3% | 2% | 6% | 2% | 4% | |||||
Other * | 23% | —% | 23% | 14% | —% | 14% |
(in thousands, except per share amounts) | GAAP | Arbitration award a | Non-GAAP | |||||||||
Quarter Ended January 31, 2014 | ||||||||||||
(Loss) earnings from operations | $ | (167,333 | ) | $ | 480,211 | $ | 312,878 | |||||
As a % of sales | (12.9 | )% | 24.1 | % | ||||||||
Interest and other expenses, net | 8,135 | 7,489 | 15,624 | |||||||||
(Benefit) provision for income taxes | (71,869 | ) | 179,319 | 107,450 | ||||||||
Effective tax rate | 41.0 | % | 36.1 | % | ||||||||
Net (loss) earnings | (103,599 | ) | 293,403 | 189,804 | ||||||||
As a % of sales | (8.0 | )% | 14.6 | % | ||||||||
Diluted (loss) earnings per share | (0.81 | ) | 2.27 | b | 1.47 | b |
(in thousands, except per share amounts) | GAAP | Arbitration award a | Specific cost-reduction initiatives c (decrease)/increase | Non-GAAP | |||||||||||
Year Ended January 31, 2014 | |||||||||||||||
SG&A expenses | $ | 1,555,903 | $ | — | $ | (9,379 | ) | $ | 1,546,524 | ||||||
Earnings from operations | 304,329 | 480,211 | 9,379 | 793,919 | |||||||||||
As a % of sales | 7.5 | % | 19.7 | % | |||||||||||
Interest and other expenses, net | 49,463 | 7,489 | — | 56,952 | |||||||||||
Provision for income taxes | 73,497 | 179,319 | 3,594 | 256,410 | |||||||||||
Effective tax rate | 28.8 | % | 34.8 | % | |||||||||||
Net earnings | 181,369 | 293,403 | 5,785 | 480,557 | |||||||||||
As a % of sales | 4.5 | % | 11.9 | % | |||||||||||
Diluted earnings per share | 1.41 | 2.28 | 0.04 | 3.73 |
a | Amounts associated with the award issued in arbitration between the Swatch Group Ltd. and the Company. |
b | Calculated using weighted-average diluted shares of 129,283,000 which includes 1,091,000 of incremental shares based upon the assumed exercise of stock options and unvested restricted stock units. |
c | Expenses associated with specific cost reduction initiatives which included severance related to staffing reductions and subleasing of certain office space for which only a portion of the Company's future rent obligations will be recovered. |
Years Ended January 31, | ||||||
(in thousands) | 2014 | 2013 | ||||
Net cash provided by operating activities | $ | 154,652 | $ | 328,290 | ||
Less: Capital expenditures | (221,452 | ) | (219,530 | ) | ||
Free cash (outflow) inflow | $ | (66,800 | ) | $ | 108,760 |
Three Months Ended January 31, | Years Ended January 31, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Net sales | $ | 1,298,284 | $ | 1,235,769 | $ | 4,031,130 | $ | 3,794,249 | |||||||
Cost of sales | 512,675 | 504,954 | 1,690,687 | 1,630,965 | |||||||||||
Gross profit | 785,609 | 730,815 | 2,340,443 | 2,163,284 | |||||||||||
Selling, general and administrative expenses | 472,731 | 440,458 | 1,555,903 | 1,466,067 | |||||||||||
Arbitration award expense | 480,211 | — | 480,211 | — | |||||||||||
(Loss) earnings from operations | (167,333 | ) | 290,357 | 304,329 | 697,217 | ||||||||||
Interest and other expenses, net | 8,135 | 14,054 | 49,463 | 53,641 | |||||||||||
(Loss) earnings from operations before income taxes | (175,468 | ) | 276,303 | 254,866 | 643,576 | ||||||||||
(Benefit) provision for income taxes | (71,869 | ) | 96,660 | 73,497 | 227,419 | ||||||||||
Net (loss) earnings | $ | (103,599 | ) | $ | 179,643 | $ | 181,369 | $ | 416,157 | ||||||
Net (loss) earnings per share: | |||||||||||||||
Basic | $ | (0.81 | ) | $ | 1.42 | $ | 1.42 | $ | 3.28 | ||||||
Diluted | $ | (0.81 | ) | $ | 1.40 | $ | 1.41 | $ | 3.25 | ||||||
Weighted-average number of common shares: | |||||||||||||||
Basic | 128,192 | 126,857 | 127,835 | 126,737 | |||||||||||
Diluted | 128,192 | 127,992 | 128,867 | 127,934 |
January 31, 2014 | January 31, 2013 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents and short-term investments | $ | 367,035 | $ | 506,201 | |||
Accounts receivable, net | 188,814 | 173,998 | |||||
Inventories, net | 2,326,580 | 2,234,334 | |||||
Deferred income taxes | 101,012 | 79,508 | |||||
Prepaid expenses and other current assets | 244,947 | 157,548 | |||||
Total current assets | 3,228,388 | 3,151,589 | |||||
Property, plant and equipment, net | 855,095 | 818,838 | |||||
Other assets, net | 668,868 | 660,423 | |||||
$ | 4,752,351 | $ | 4,630,850 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Short-term borrowings | $ | 252,365 | $ | 194,034 | |||
Accounts payable and accrued liabilities | 342,090 | 295,424 | |||||
Income taxes payable | 31,976 | 30,487 | |||||
Merchandise and other customer credits | 70,309 | 66,647 | |||||
Total current liabilities | 696,740 | 586,592 | |||||
Long-term debt | 751,154 | 765,238 | |||||
Pension/postretirement benefit obligations | 268,112 | 361,246 | |||||
Other long-term liabilities | 220,512 | 209,732 | |||||
Deferred gains on sale-leasebacks | 81,865 | 96,724 | |||||
Stockholders’ equity | 2,733,968 | 2,611,318 | |||||
$ | 4,752,351 | $ | 4,630,850 |
Fifth Avenue & 57th Street | Contact: | |||
New York, N.Y. 10022 | Mark L. Aaron | |||
212-230-5301 | ||||
mark.aaron@tiffany.com |