Current Report Filing (8-k)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of

The Securities Exchange Act of 1934

Date of Report: March 24, 2015

TIFFANY & CO.

(Exact name of Registrant as specified in its charter)



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)

Registrant's telephone number, including area code: (212) 755-8000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:



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))


Item 5.02	Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

As previously announced, Michael J. Kowalski, Registrant’s Chief Executive Officer, will retire effective March 31, 2015. On March 18, 2015, as part of its ongoing review of compensation practices and arrangements and in connection with Mr. Kowalski’s retirement, the Compensation Committee of Registrant’s Board of Directors (the “Committee”) approved an amendment and restatement of the Performance-Based Restricted Stock Unit Awards made to Mr. Kowalski on each of January 16, 2013 and January 16, 2014 (the “Amended and Restated RSU Awards”) under the 2005 Tiffany & Co. Employee Incentive Plan. The sole purpose of the Amended and Restated RSU Awards is to provide for continued vesting of such awards following Mr. Kowalski’s retirement on the terms and conditions previously established by the Committee. The performance goals established by the Committee in each of 2013 and 2014 were not amended in any respect. Absent an amendment reflecting such continued vesting, these awards would have been forfeited upon Mr. Kowalski’s retirement, effective March 31, 2015. The Committee determined that continued vesting of such awards was appropriate in light of Mr. Kowalski’s contributions to the Registrant, his role in succession planning and his ongoing support of Frederic Cumenal in Mr. Cumenal’s transition to Chief Executive Officer of Registrant.

The foregoing summary is qualified by the terms of the Amended and Restated RSU Awards, which are filed as Exhibits 10.27s and 10.27t to this Current Report on Form 8-K and incorporated by reference herein.


Item 8.01	Other Events.

At a meeting of the Board of Directors of the Registrant, held on March 19, 2015, the Board adopted revised Corporate Governance Principles for Registrant. The amended and restated Corporate Governance Principles are attached hereto as Exhibit 10.35 to this Current Report on Form 8-K.


Item 9.01	Financial Statements and Exhibits.


(d)	Exhibits


10.27s	Terms of 2014 Amended and Restated Performance-Based Restricted Stock Unit Grant for Mr. Kowalski.


10.27t	Terms of 2015 Amended and Restated Performance-Based Restricted Stock Unit Grant for Mr. Kowalski.


10.35	Corporate Governance Principles, amended and restated as of March 19, 2015.

SIGNATURE

Pursuant to the requirements 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)

		By: /s/ Leigh M. Harlan
		Leigh M. Harlan
		Senior Vice President, Secretary
		and General Counsel
Date: March 24, 2015

EXHIBIT INDEX


Exhibit No.	Description


10.27s	Terms of 2014 Amended and Restated Performance-Based Restricted Stock Unit Grant for Mr. Kowalski.


10.27t	Terms of 2015 Amended and Restated Performance-Based Restricted Stock Unit Grant for Mr. Kowalski.


10.35	Corporate Governance Principles, amended and restated as of March 19, 2015.

EXHIBIT 10.27s

PERFORMANCE-

BASED

RESTRICTED

STOCK GRANT

Terms

Rev. I

TIFFANY & CO.

a Delaware Corporation

(the “Company”)

TERMS OF PERFORMANCE-BASED RESTRICTED STOCK GRANT

(Non-Transferable)

under the

2005 EMPLOYEE INCENTIVE PLAN

(the “Plan”)

Terms Adopted January 20, 2010 and Amended and Restated December 29, 2011, and further Amended and Restated March 18, 2015 solely with respect to the grant to Michael J. Kowalski on January 16, 2013

1. Introduction and Terms of Grant. Participant has been granted (the “Grant”) Stock Units which shall be settled by the issuance and delivery of Shares of the Company’s Common Stock. The Grant has been made under the Plan by the Stock Option Subcommittee of the Company’s Board of Directors (the “Committee”). The name of the “Participant”, the “Grant Date”, the number of “Stock Units” granted, the “Performance Period”, the “Earnings Threshold”, the “Earnings Target”, the “Earnings Maximum” and the “ROA Target” are stated in the attached “Notice of Grant”. The other terms and conditions of the Grant are stated in this document and in the Plan. Certain initially capitalized words and phrases used in this document are defined in the Definitions Appendix attached and elsewhere in this document or in the Plan. Reference to Stock Units in this document is reference to all or part of the Stock Units which are subject to the Grant, and not to other Stock Units that have been granted or that may be granted in the future.

2. Grant and Adjustment. Subject to the terms and conditions stated in this document, Participant has been granted Stock Units by the Company. As of the Grant Date, each Stock Unit has a Settlement Value of one Share, but the number of Shares which shall be issued and delivered pursuant to the Grant on the settlement of each Stock Unit (the “Settlement Value”) shall be subject to adjustment as provided in Section 4.2(c) of the Plan, to adjust for, among other corporate developments, stock splits and stock dividends. References to Settlement Values in this document shall be deemed reference to Settlement Values as so adjusted. As anticipated in Section 4.7 of the Plan, Shares that have not been issued and delivered to a Participant shall be represented by Stock Units.

3. Performance Vesting. Unless otherwise provided in sections 4 or 5 below, the Performance Portion (as defined below) of the Stock Units will vest three business days following the public announcement of the Company’s audited, consolidated financial results for the last fiscal year in the Performance Period (the “Maturity Date”). A Stock Unit that has vested is herein referred to as a “Vested Unit.” Within thirty (30) days following the Maturity Date, but in no event later than December 31 of the calendar year in which the last day of the Performance Period occurs, the Settlement Value of each Vested Unit shall be issued and delivered to or for the account of Participant in Shares. As provided for in Section 7 below, the Company may make such delivery to a Service Provider. In all circumstances, a Stock Unit which fails to vest on or before the Maturity Date shall be void and shall not confer upon the owner of such Stock Unit any rights, including any right to any Share. In the event that any provision of this document would otherwise result in the issuance of a fractional Share, the Company will not be obligated to issue such fractional Share.

The “Performance Portion” shall be a percentage of the Stock Units calculated as hereinafter provided (provided that the Performance Portion shall never exceed 100% of the Stock Units):

(a) The Performance Portion shall be 0% of the Stock Units if the Earnings Threshold is not attained over the Performance Period.

(b) Subject to reduction pursuant to subsection (c) below, if the Earnings Threshold has been attained over the Performance Period, the Performance Portion shall be 100% of the Stock Units.

(c) If the Earnings Threshold has been attained over the Performance Period the Committee shall, in its sole discretion, have the right to reduce the Performance Portion to 0% of the Stock Units or any percentage of the Stock Units less than 100%. The Committee may exercise such discretion on any date that occurs following the close of the Performance Period and prior to the Maturity Date. The Committee has provided guidance to Participant with respect to factors, including the Earnings Target, the Earnings Maximum and the ROA Target, that the Committee intends to apply in effecting such a reduction, but the Committee shall not be limited in its discretion to those factors.

“Earnings” means the Company’s consolidated earnings per share on a diluted basis, as reported in the Company’s Annual Report on Form 10-K, aggregated over the Performance Period and as adjusted by the Committee as provided for below and in the Plan.

The “Earnings Threshold”, “Earnings Target” and “Earnings Maximum” are expressed in the Notice of Grant as functions of Earnings, as so defined.

“ROA” means the Company’s consolidated return on average assets in each of the fiscal years in the Performance Period, expressed as a percentage, and then averaged over the entire Performance Period. In each of the fiscal years average assets will be computed by averaging total assets at the beginning and at the end of the fiscal year; net earnings for such fiscal years shall be divided by average assets. Both total assets and net earnings shall be as reported in the Company’s Annual Report on Form 10-K.

The “ROA Target” is expressed in the Notice of Grant as a function of ROA, as so defined.

Each of Earnings and ROA is a “Performance Goal”. In determining whether the Earnings Threshold has been met the Committee shall appropriately adjust any evaluation of attainment of a Performance Goal to exclude any of the following events that occurs during a Performance Period: (i) asset write-downs, (ii) litigation or claim judgments or settlements, (iii) the effect of changes in tax law, accounting principles or other such laws or provisions affecting reported results, (iv) accruals for reorganization and restructuring programs, and (v) extraordinary non-recurring items as described in Accounting Principles Board Opinion No. 30 and/or in management’s discussion and analysis of financial condition and results of operations appearing in said Annual Report for the applicable year.

4. Effect of Termination of Employment on Vesting. Except as provided in this Section 4, no Stock Units shall vest if the Participant’s Date of Termination occurs before the conclusion of the Performance Period:


(a)	if the Participant’s Date of Termination occurs by reason of death or Disability within the last fiscal year of the Performance Period, Stock Units shall vest as provided in Section 3 above as though the Participant’s Date of Termination had not occurred before the conclusion of the Performance Period;


(b)	if the Participant’s Date of Termination occurs by reason of death or Disability within the second fiscal year of the Performance Period, 60% of Stock Units shall vest on the date of such death or Disability;



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Performance-Based Stock Grant: Terms of Stock Grant Award – Rev. I		Page 2


(c)	if the Participant’s Date of Termination occurs by reason of death or Disability within the first fiscal year of the Performance Period, 30% of Stock Units shall vest on the date of such death or Disability;


(d)	if the Participant’s Date of Termination occurs by reason of Retirement at any time during 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;


(e)	if the Participant’s Date of Termination occurs by reason of Cause, no Stock Units shall vest;


(f)	if the Participant’s Date of Termination occurs by reason of Participant’s voluntary resignation, no Stock Units shall vest; and


(g)	if the Participant’s Date of Termination occurs at the initiative of the Participant’s employer (but not for Cause) the Committee reserves the right to vest up to the following percentages of the Stock Units, but may condition such vesting upon Participant’s release of the Company and its affiliates from all claims, Participant’s agreement to reasonable non-competition covenants or both:


(i)	100% of the Stock Units if the Date of Termination occurs in the last fiscal year of the Performance Period;


(ii)	70% of the Stock Units if the Date of Termination occurs in the second fiscal year of the Performance Period; and


(iii)	40% of the Stock Units if the Date of Termination occurs in the first fiscal year of the Performance Period.

In the event of vesting pursuant to this Section 4, the Settlement Value of each Vested Unit shall, within thirty (30) days after vesting, be issued and delivered to or for the account of Participant in Shares. As provided for in Section 7 below, the Company may make such delivery to a Service Provider.

5. Effect of Change in Control on Vesting.


(a)	All Stock Units shall vest upon a Change in Control Date for a Terminating Transaction unless such Change of Control Date occurs before the start of the Performance Period in which case none of the Stock Units shall vest.


(b)	In the event of a Change in Control as described in clause (i) of the definition of “Change of Control” and Participant’s Involuntary Termination following the date of such Change of Control, a portion of the Stock Units shall vest upon Participant’s Date of Termination. Such portion is described in subsection (d) below.


(c)	In the event of a Change in Control as described in clauses (ii), (iii) or (iv) of the definition of “Change of Control” a portion of the Stock Units shall vest upon the date of such Change of Control. Such portion is described in subsection (d) below.


(d)	If vesting occurs by operation of subsection 5(b) or 5(c) above, the portion of the Stock Units that shall vest shall be determined as follows:



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Performance-Based Stock Grant: Terms of Stock Grant Award – Rev. I		Page 3


(i)	if such vesting occurs within the last fiscal year of the Performance Period, 100% of the Stock Units shall vest;


(ii)	if such vesting occurs within the second fiscal year of the Performance Period 70% of the Stock Units shall vest;


(iii)	if such vesting occurs within the first fiscal year of the Performance Period 30% of the Stock Units shall vest; and


(iv)	if such vesting occurs following the conclusion of the Performance Period, vesting shall occur as provided in Section 3 above regardless of the fact that Participant’s Date of Termination has occurred prior to the Maturity Date.


(v)	For the avoidance of doubt no vesting shall occur pursuant to subsection 5(b) or 5(c) above if the Change of Control Date occurs before the start of the Performance Period.

(e) In the event of vesting pursuant to this Section 5, the Settlement Value of each Vested Unit shall, within thirty days after vesting, be issued and delivered to or for the account of Participant in Shares. As provided for in Section 7 below, the Parent may make such delivery to a Service Provider.

6. No Dividends or Interest. No dividends or interest shall accrue or be payable upon any Stock Unit. Until a Share is issued and delivered it shall not be registered in the name of the Participant.

7. Withholding for Taxes. All distributions of Shares shall be subject to withholding of all applicable taxes as computed by the Tiffany and Company finance department, and the Participant shall make arrangements satisfactory to the Company to provide the Company (or any Related Company) with funds necessary for such withholding before the Shares are delivered. Without limitation to the Company’s right to establish other arrangements, the Company may: (i) designate a single broker or other financial services provider (“Services Provider”) to establish trading accounts for Participants (each a “Participant’s Trading Account”); (ii) deliver Shares to Participant’s Trading Account; (iii) provide Services Provider with information concerning the applicable tax withholding rates for Participant; (iv) cause Services Provider to sell, on behalf of Participant, sufficient Shares to cover the Company’s tax withholding obligations with respect to any delivery of Shares to Participant (a “Covering Sale”); and (v) cause Services Provider to remit funds resulting from such Covering Sale to Company or any Related Company that is the employer of Participant. As a condition to distribution the Company may require the Participant to provide the Services Provider with such signed applications, authorizations, powers and other documents necessary to accomplish the foregoing. Participant may, by written notice to the Company addressed to the Company’s Secretary, and given no less than ten (10) business days before the Maturity Date or other applicable vesting date, elect to avoid such a Covering Sale by delivering with such notice a bank-certified check payable to the Company (or other type of check or draft payable to the Company and acceptable to the Secretary) in the estimated amount of any such withholding required, such estimate to be provided by the Tiffany and Company finance department. The Committee may approve other methods of withholding, as provided for in the Plan, before the Shares are delivered.

8. Transferability. The Stock Units are not transferable otherwise than by will or the laws of descent and distribution, and shall not be otherwise transferred, assigned, pledged, hypothecated or otherwise disposed of in any way, whether by operation of law or otherwise, nor shall it be subject to execution, attachment or similar process. Upon any attempt to transfer the Stock Units otherwise than as permitted herein or to assign, pledge, hypothecate or otherwise dispose of the Stock Units otherwise than as permitted herein, or upon the



Tiffany & Co. 2005 Employee Incentive Plan
Performance-Based Stock Grant: Terms of Stock Grant Award – Rev. I		Page 4

levy of any execution, attachment or similar process upon the Grant, the Grant shall immediately terminate and become null and void.

9. Definitions. For the purposes of the Grant, certain words and phases are defined in the Definitional Appendix attached. Except where the context clearly implies or indicates the contrary, a word, term or phrase used in the Plan shall have the same meaning in this document.

10. Heirs and Successors. The terms of the Grant shall be binding upon, and inure to the benefit of, the Company and its successors and assigns, and upon any person acquiring, whether by merger, consolidation, purchase of assets or otherwise, all or substantially all of the Company’s assets and business. Participant may designate a beneficiary of his/her rights under the Grant by filing written notice with the Secretary of the Company. In the event of the Participant’s death prior to the full maturity of the Grant, the Shares will be delivered to such Beneficiary to the extent that it was matured on the Participant’s Termination Date. If the Participant fails to designate a Beneficiary, or if the designated Beneficiary dies before the Participant, any Shares issuable hereunder will be delivered to the Participant’s estate.

11. Administration. The authority to manage and control the operation and administration of the Grant shall be vested in the Committee, and the Committee shall have all powers with respect to the Grant as it has with respect to the Plan. Any interpretation of the Grant by the Committee and any decision made by it with respect to the Grant is final and binding.

12. Plan Governs. Notwithstanding anything in this Agreement to the contrary, the terms of the Grant shall be subject to the terms of the Plan, a copy of which may be obtained by the Participant from the office of the Secretary of the Company.



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Performance-Based Stock Grant: Terms of Stock Grant Award – Rev. I		Page 5

Appendix I -- Definitions

“Affiliate” shall mean any Person that controls, is controlled by or is under common control with, any other Person, directly or indirectly.

“Cause” shall mean a termination of Participant’s employment which is the result of:


(i)	Participant’s conviction or plea of nolo contendere to a felony or any other crime involving financial impropriety or which would tend to subject Employer or any of its Affiliates to public criticism or materially interfere with Participant’s continued service to Employer;


(ii)	Participant’s willful violation of the Code of Conduct;

(iii)

Participant’s willful failure or refusal to perform substantially all such proper and achievable directives issued by Participant’s superior (other than any such failure resulting from Participant’s incapacity due to physical or mental illness, any such actual or anticipated failure resulting from a resignation by Participant for Good Reason, or any such refusal made by Participant in good faith because Participant believes such directives to be illegal, unethical or immoral) after a written demand for substantial performance is delivered to Participant on behalf of Employer, which demand specifically identifies the manner in which Participant has not substantially performed Participant’s duties, and which performance is not substantially corrected by Participant within ten (10) days of receipt of such demand;


(iv)	Participant’s gross negligence in the performance of Participant’s duties and responsibilities materially injurious to the Employer;


(v)	Participant’s willful breach of any material obligation that Participant has to Parent or Employer under any written agreement that Participant has with either Parent or Employer;


(vi)	Participant’s fraud or dishonesty with regard to Employer or any of its Affiliates;


(vii)	Participant’s failure to reasonably cooperate in any investigation of alleged misconduct by Participant or by any other employee of Parent, Employer or any Affiliate of Parent or Employer;


(viii)	Participant’s death; or


(ix)	Participant’s Disability.



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Performance-Based Stock Grant: Terms of Stock Grant Award – Rev. I		Page 6

For purposes of the previous sentence, no act or failure to act on Participant’s part shall be deemed “willful” unless done, or omitted to be done, by Participant in bad faith toward, or without reasonable belief that Participant’s action or omission was in the best interests of, Parent, Employer or an Affiliate of Parent or Employer. Notwithstanding the foregoing, Participant shall not be deemed to have been terminated for Cause with respect to items (i) through (vii) unless and until there shall have been delivered to Participant a copy of a resolution duly adopted by the affirmative vote of not less than three-fourths (3/4^th) of the entire membership of the Employer Board at a meeting called and held for such purpose (after reasonable notice to Participant and an opportunity for Participant, together with Participant’s counsel, to be heard before such Board), finding that, in the good faith opinion of such Board, Cause exists as set forth in any of items (i) through (vii) above.

“Change in Control.” A Change in Control shall be deemed to have occurred if:

(i)

any Person, or any syndicate or group deemed to be a person under Section 14(d)(2) of the Exchange Act, excluding Parent or any of its Affiliates, a trustee or any fiduciary holding securities under an employee benefit plan of Parent or any of its Affiliates, an underwriter temporarily holding securities pursuant to an offering of such securities or a corporation owned, directly or indirectly by stockholders of Parent in substantially the same proportion as their ownership of Parent, is or becomes the “beneficial owner” (as defined in Rule 13d-3 of the General Rules and Regulations under the Exchange Act), directly or indirectly, of securities of Parent representing Thirty-five percent (35%) or more of the combined voting power of Parent’s then outstanding securities entitled to vote in the election of directors of Parent;

(ii)

if the Incumbent Directors cease to constitute a majority of the Parent Board; provided, however, that no person shall be deemed an Incumbent Director if he or she was appointed or elected to the Parent Board after having been designated to serve on the Parent Board by a Person who has entered into an agreement with Parent to effect a transaction described in clauses (i) through (iv) of this definition;


(iii)	there occurs a reorganization, merger, consolidation or other corporate transaction involving Parent, in each case with respect to which the stockholders of Parent immediately prior to such transaction do not, immediately after such transaction, own more than Fifty percent (50%) of the combined voting power of the Parent or other corporation resulting from such transaction, as the case may be;


(iv)	all or substantially all of the assets of Parent or Employer are sold, liquidated or distributed, except to an Affiliate of Parent.

“Change in Control Date” shall mean the date on which a Change of Control occurs except that a Change of Control which constitutes a Terminating Transaction will be deemed to



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Performance-Based Stock Grant: Terms of Stock Grant Award – Rev. I		Page 7

have occurred as of fourteen days prior to the date scheduled for the Terminating Transaction if provisions shall not have been made in writing in connection with such Terminating Transaction for the assumption of the Option or the substitution for the Option of a new option covering the stock of a successor employer corporation, or a parent or subsidiary thereof or of the Parent, with appropriate adjustments as to the number and kind of shares and prices.

“Code” shall mean the Internal Revenue Code of 1986, as amended, and any successor provisions thereto.

“Code of Conduct” shall mean Parent’s (i) Code of Business and Ethical Conduct for Directors, the Chief Executive Officer, the Chief Financial Officer and All Other Officers of the Parent and (ii) Business Conduct Policy – Worldwide, as amended from time to time prior to the Change of Control Date and as in effect as of the Change of Control Date.

“Common Stock” shall mean the common stock of Parent.

“Date of Termination” shall mean, with respect to any Participant, the first day occurring on or after the Grant Date on which Participant’s employment with Employer terminates for any reason; provided that a termination of employment shall not be deemed to occur by reason of a transfer of the employment of Participant between Employers; and further provided that the Participant’s employment shall not be considered terminated while the Participant is on a leave of absence from the Employer approved by Employer or required by applicable law. If, as a result of a sale or other transaction, Employer ceases to be an Affiliate of Parent, the occurrence of such transaction shall be treated as the Participant’s Date of Termination caused by the Participant being discharged by Employer.

“Disability” shall mean Participant’s incapacity due to physical or mental illness which causes Participant to be absent from the full-time performance of Participant’s duties with Employer for six (6) consecutive months provided, however, that Participant shall not be determined to be subject to a Disability for purposes of this Award unless Participant fails to return to full-time performance of Participant’s duties with Employer within thirty (30) days after written Notice of Termination due to Disability is given to Participant.

“Employer” shall mean the Affiliate of Parent that employs Participant from time to time, and any successor to its business and/or assets by operation of law or otherwise.

“Employer Board” shall mean the board of directors (or other highest governing authority other than the shareholders) of Employer.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and any successor provisions thereto.

“Good Reason” means Participant’s resignation from employment with Employer as a result of any of the following:



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Performance-Based Stock Grant: Terms of Stock Grant Award – Rev. I		Page 8


(i)	a meaningful and detrimental alteration in Participant’s position or the nature or status of Participant’s responsibilities (including reporting responsibilities) from those in effect immediately before the Change in Control Date;


(ii)	a material failure by Employer to pay Participant a bonus or incentive award commensurate with the bonus paid others at Participant’s job level (expressed as a percentage of target bonus) unless such failure is justified by clear and objective deficiencies of the business units for which Participant is responsible;

(iii)

the relocation of the office of Employer where Participant was employed immediately prior to the Change in Control Date to a location which is more than 50 miles away or should Employer require Participant to be based more than 50 miles away from such office (except for required travel on the Employer’s business to an extent substantially consistent with Participant’s customary business travel obligations in the ordinary course of business prior to the Change in Control Date); or


(iv)	a Substantial Change.

“Incumbent Directors” shall mean those individuals who were members of the Parent Board as of January 15, 2009 and those individuals whose later appointment to such Board, or whose later nomination for election to such Board by the stockholders of Parent, was approved by a vote of at least a majority of those members of such Board who either were members of such Board as of January 15, 2009, or whose election or nomination for election was previously so approved.

“Involuntary Termination” means (i) Participant’s termination of employment by Employer without Cause or (ii) Participant’s resignation of employment with the Employer within one (1) year of the Change of Control Date for Good Reason.

“Notice of Termination” shall mean a written notice indicating the specific termination provision in this Agreement relied upon and setting forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Participant’s employment under the provision so indicated.

“Parent” shall mean Tiffany & Co., a Delaware corporation, and any successor to its business and/or assets by operation of law or otherwise.

“Parent Board” shall mean the Board of Directors of Parent.

“Person” shall mean any individual, firm, corporation, partnership, limited partnership, limited liability partnership, business trust, limited liability company, unincorporated association or other entity, and shall include any successor (by merger or otherwise) of such entity.



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Performance-Based Stock Grant: Terms of Stock Grant Award – Rev. I		Page 9

“Retirement” shall mean the occurrence of the Participant’s Date of Termination after age 65 or the occurrence of the Participant’s Date of Termination after age 55 pursuant to the retirement practices of Employer.

“Substantial Change” means any material change in the terms or conditions of Participant’s employment (including in salary or target bonus) following a Change of Control Date that is less favorable to Participant than those in effect previous to the Change of Control Date other than (i) a change that has been made on an across-the-board basis for substantially all of Employer’s employees or (ii) a change in equity-based compensation (including the reduction or elimination thereof) resulting from the Change in Control.

“Terminating Transaction” shall mean any one of the following:


(i)	the dissolution or liquidation of the Parent;


(ii)	a reorganization, merger or consolidation of the Parent with one or more Persons as a result of which the Parent goes out of existence or becomes a subsidiary of another Person; or


(iii)	upon the acquisition of substantially all of the property or more than eighty percent (80%) of the then outstanding stock of the Parent by another Person;

provided that none of the foregoing transactions (i) through (iii) will be deemed to be a Terminating Transaction, if as of a date at least fourteen (14) days prior to the date scheduled for such transaction provisions have been made in writing in connection with such transaction for the assumption of the Option or the substitution for the Option of a new option covering the publicly-traded stock of a successor Person, with appropriate adjustments as to the number and kind of shares and prices.



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Performance-Based Stock Grant: Terms of Stock Grant Award – Rev. I		Page 10

EXHIBIT 10.27t

PERFORMANCE-

BASED RESTRICTED

STOCK GRANT

Terms

TIFFANY & CO.

a Delaware Corporation

(the “Parent”)

AMENDED AND RESTATED

TERMS OF PERFORMANCE-BASED RESTRICTED STOCK GRANT

(Non-Transferable)

under the

2005 EMPLOYEE INCENTIVE PLAN

(the “Plan”)

Terms Effective January 15, 2014 and Amended and Restated Effective March 18, 2015 solely with respect to the grant to Michael J. Kowalski on January 16, 2014

1. Introduction and Terms of Grant. Participant has been granted (the “Grant”) Stock Units which shall be settled by the issuance and delivery of Shares of the Parent’s Common Stock. The Grant has been made under the Plan by the Stock Option Subcommittee of the Parent Board (the “Committee”). The name of the “Participant”, the “Grant Date”, the number of “Stock Units” granted, the “Performance Period”, the “Earnings Threshold”, the “Earnings Target”, the “Earnings Maximum” and the “ROA Target” are stated in the attached “Notice of Grant”. The other terms and conditions of the Grant are stated in this document and in the Plan. Certain initially capitalized words and phrases used in this document are defined in the Definitions Appendix attached and elsewhere in this document or in the Plan. Reference to Stock Units in this document is reference to all or part of the Stock Units which are subject to the Grant, and not to other Stock Units that have been granted or that may be granted in the future.

2. Grant and Adjustment. Subject to the terms and conditions stated in this document, Participant has been granted Stock Units by the Parent. As of the Grant Date, each Stock Unit has a Settlement Value of one Share, but the number of Shares which shall be issued and delivered pursuant to the Grant on the settlement of each Stock Unit (the “Settlement Value”) shall be subject to adjustment as provided in Section 4.2(c) of the Plan, to adjust for, among other corporate developments, stock splits and stock dividends. References to Settlement Values in this document shall be deemed reference to Settlement Values as so adjusted. As anticipated in Section 4.7 of the Plan, Shares that have not been issued and delivered to a Participant shall be represented by Stock Units.

3. Performance Vesting. Unless otherwise provided in sections 4 or 5 below, the Performance Portion (as defined below) of the Stock Units will vest three business days following the public announcement of the Parent’s audited, consolidated financial results for the last fiscal year in the Performance Period (the “Maturity Date”). A Stock Unit that has vested is herein referred to as a “Vested Unit.” Within thirty (30) days following the Maturity Date, but in no event later than December 31 of the calendar year in which the last day of the Performance Period occurs, the Settlement Value of each Vested Unit shall be issued and delivered to or for the account of Participant in Shares. As provided for in Section 7 below, the Parent may make such delivery to a Service Provider. In all circumstances, a Stock Unit which fails to vest on or before the Maturity Date shall be void and shall not confer upon the owner of such Stock Unit any rights, including any right to any Share. In the event that any provision of this document would otherwise result in the issuance of a fractional Share, the Parent will not be obligated to issue such fractional Share.

The “Performance Portion” shall be a percentage of the Stock Units calculated as hereinafter provided (provided that the Performance Portion shall never exceed 100% of the Stock Units):


(a)	The Performance Portion shall be 0% of the Stock Units if the Earnings Threshold is not attained over the Performance Period.


(b)	Subject to reduction pursuant to subsection (c) below, if the Earnings Threshold has been attained over the Performance Period, the Performance Portion shall be 100% of the Stock Units.

(c)

If the Earnings Threshold has been attained over the Performance Period the Committee shall, in its sole discretion, have the right to reduce the Performance Portion to 0% of the Stock Units or any percentage of the Stock Units less than 100%. The Committee may exercise such discretion on any date that occurs following the close of the Performance Period and prior to the Maturity Date. The Committee has provided guidance to Participant with respect to factors, including the Earnings Target, the Earnings Maximum and the ROA Target, that the Committee intends to apply in effecting such a reduction, but the Committee shall not be limited in its discretion to those factors.

The “Earnings Threshold”, “Earnings Target” and “Earnings Maximum” are expressed in the Notice of Grant as functions of Earnings, as so defined.

The “ROA Target” is expressed in the Notice of Grant as a function of ROA, as so defined.


(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;


(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 Retirement at any time during 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;


(e)	if the Participant’s Date of Termination occurs by reason of Cause, no Stock Units shall vest;


(f)	if the Participant’s Date of Termination occurs by reason of Participant’s voluntary resignation, no Stock Units shall vest; and


(g)	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(g)(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(g)(ii), 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.

In the event of vesting pursuant to subsections (b) through (g) above, the Settlement Value of each Vested Unit shall, within 30 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. For the avoidance of doubt, no Stock Units shall vest if the Participant’s

Date of Termination occurs before the start of the Performance Period, or, with respect to 4(g), during the first fiscal year of the Performance Period.

5. Effect of Change in Control on Vesting.


(a)	All Stock Units shall vest upon a Change in Control Date for a Terminating Transaction unless such Change of Control Date occurs before the start of the Performance Period in which case none of the Stock Units shall vest.


(b)	In the event of a Change in Control that is not a Terminating Transaction, 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;

(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(b)(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.


(c)	The vesting of the Time-Based Restricted Stock Units converted as described in Section 5(b):


(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)	For the avoidance of doubt no conversion or vesting shall occur pursuant to Sections 5(b) or 5(c) above if the Change of Control Date occurs before the start of the Performance Period.


(e)	In the event of vesting pursuant to this Section 5, the Settlement Value of each Vested Unit shall, within thirty days after vesting, be issued and delivered to or for the account of Participant in Shares. As provided for in Section 7 below, the Parent may make such delivery to a Service Provider.

6. No Dividends or Interest. No dividends or interest shall accrue or be payable upon any Stock Unit. Until a Share is issued and delivered it shall not be registered in the name of the Participant.

7. Withholding for Taxes. All distributions of Shares shall be subject to withholding of all applicable taxes as computed by the finance department, and the Participant shall make arrangements satisfactory to the Parent to provide the Parent (or any Related Company) with funds necessary for such withholding before the Shares are delivered. Without limitation to the Parent’s right to establish other arrangements, the Parent may: (i) designate a single broker or other financial services provider (“Services Provider”) to establish trading accounts for Participants (each a “Participant’s Trading Account”); (ii) deliver Shares to Participant’s Trading Account; (iii) provide Services Provider with information concerning the applicable tax withholding rates for Participant; (iv) cause Services Provider to sell, on behalf of Participant, sufficient Shares to cover the Parent’s tax withholding obligations with respect to any delivery of Shares to Participant (a “Covering Sale”); and (v) cause Services Provider to remit funds resulting from such Covering Sale to Parent or any Related Company that is the employer of Participant. As a condition to distribution the Parent may require the Participant to provide the Services Provider with such signed applications, authorizations, powers and other documents necessary to accomplish the foregoing. Participant may, by written notice to the Parent addressed to the Parent’s Secretary, and given no less than ten (10) business days before the Maturity Date or other applicable vesting date, elect to avoid such a Covering Sale by delivering with such notice a bank-certified check payable to the Parent (or other type of check or draft payable to the Parent and acceptable to the Secretary) in the estimated amount of any such withholding required, such estimate to be provided by the Tiffany and Company finance department. The Committee may approve other methods of withholding, as provided for in the Plan, before the Shares are delivered.

9. Definitions. For the purposes of the Grant, certain words and phrases are defined in the Definitional Appendix attached. Except where the context clearly implies or indicates the contrary, a word, term or phrase used in the Plan shall have the same meaning in this document.

10. Heirs and Successors. The terms of the Grant shall be binding upon, and inure to the benefit of, the Parent 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 Parent’s assets and business. Participant may designate a beneficiary of his/her rights under the Grant by filing written notice with the Secretary of the Parent. In the event of the Participant’s death prior to the full maturity of the Grant, the Shares will be delivered to such Beneficiary to the extent that it was matured on the Participant’s Termination Date. If the Participant fails to designate a Beneficiary, or if the designated Beneficiary dies before the Participant, any Shares issuable hereunder will be delivered to the Participant’s estate.

12. Clawback Provisions .Notwithstanding any other provisions in these terms to the contrary, each Vested Unit hereunder, which has been issued and delivered to or for the account of Participant, shall be subject to deductions and clawback as may be required under any applicable law, government regulation or stock exchange listing requirement, or any policy adopted by the Company, including but not limited to the Policy for Recovery of Incentive-based Compensation Erroneously Awarded to Executive Officers, adopted by the Parent Board on September 18, 2013.

13. Plan Governs. Notwithstanding anything in this Agreement to the contrary, the terms of the Grant shall be subject to the terms of the Plan, a copy of which may be obtained by the Participant from the office of the Secretary of the Parent.

14. Section 409A. Notwithstanding anything herein to the contrary, any benefits and payments provided hereunder that are payable or provided to Participant in connection with a termination of employment that constitute deferred compensation within the meaning of Code Section 409A shall not commence in connection with Participant’s termination of employment unless and until Participant has also incurred a Separation from Service, and unless Employer reasonably determines that such amounts may be provided to Participant without causing Participant to incur additional tax obligations under Code Section 409A. For the avoidance of doubt, it is intended that payments hereunder comply with or satisfy, to the greatest extent possible, the exemptions from the application of Code Section 409A. However, if Employer determines that these payments constitute deferred compensation and Participant is, on the termination of his service, a “specified employee” of Employer, as such term is defined in Code Section 409A(a)(2)(B)(i), then, solely to the extent necessary to avoid the incurrence of the adverse personal tax consequences under Code Section 409A, the timing of the payments shall be delayed until the earlier to occur of: (i) the date that is six months and one day after Participant’s Separation from Service or (ii) the date of Participant’s death that occurs after Participant’s Separation from Service. This Section 14 shall be administered, construed and interpreted in a manner consistent with the requirements of Code Section 409A. In no event shall Employer have any liability or obligation with respect to taxes for which Participant may become liable as a result of the application of Code Section 409A.

In addition to the provisions regarding Code Section 409A set forth above, the following shall apply:

If Participant notifies Employer that Participant believes that any provision of this Agreement (or of any award of compensation or benefit, including equity compensation or benefits provided herein or at any time during his employment with Employer) would cause Participant to incur any additional tax or interest under Code Section 409A or Employer independently makes such determination, Employer shall, after consulting with Participant, reform such provision (or award of compensation or benefit) to attempt to comply with or be exempt from Code Section 409A through good faith modifications to the minimum extent reasonably appropriate. To the extent that any provision hereof (or award of compensation or benefit) is modified in order to comply with Code Section 409A, such modification shall be made in good faith and shall, to the maximum extent reasonably possible, maintain the original intent and economic benefit to Participant and Employer without violating the provisions of Code Section 409A.

Appendix I -- Definitions

“Affiliate” shall mean any Person that controls, is controlled by or is under common control with, any other Person, directly or indirectly.

“Cause” shall mean a termination of Participant’s employment which is the result of:


(i)	Participant’s conviction or plea of nolo contendere to a felony or any other crime involving financial impropriety or which would tend to subject Employer or any of its Affiliates to public criticism or materially interfere with Participant’s continued service to Employer;


(ii)	Participant’s willful violation of the Code of Conduct;

(iii)


(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; or


(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.

unless and until there shall have been delivered to Participant a copy of a resolution duly adopted by the affirmative vote of not less than three-fourths (3/4^th) of the entire membership of the Employer Board at a meeting called and held for such purpose (after reasonable notice to Participant and an opportunity for Participant, together with Participant’s counsel, to be heard before such Board), finding that, in the good faith opinion of such Board, Cause exists as set forth in any of items (i) through (vii) above.

“Change in Control.” A Change in Control shall be deemed to have occurred if:

(i)

(ii)


(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; or


(iv)	all or substantially all of the assets of Parent or Employer are sold, liquidated or distributed, except to an Affiliate of Parent;

Provided, that an event shall not constitute a Change in Control unless such event also constitutes a “change in control event” under Treasury Regulation Section 1.409A-3(i)(5).

“Change in Control Date” shall mean the date on which a Change in Control occurs.

“Code” shall mean the Internal Revenue Code of 1986, as amended, and any successor provisions thereto.

“Code Section 409A” shall mean Section 409A of the Code, and the regulations and guidance promulgated thereunder.

“Common Stock” shall mean the common stock of Parent.

“Date of Termination” shall mean, with respect to any Participant, the first day occurring on or after the Grant Date on which Participant’s employment with Employer terminates for any reason; provided that a termination of employment shall not be deemed to occur by reason of a transfer of the employment of Participant between Employers; and further provided that the Participant’s employment shall not be considered terminated while the Participant is on a leave of absence from the Employer approved by Employer or required by applicable law; and further provided that a termination of employment shall not be deemed to occur unless such termination of employment is also a Separation from Service. If, as a result of a sale or other transaction, Employer ceases to be an Affiliate of Parent, the occurrence of such transaction shall be treated as the Participant’s Date of Termination caused by the Participant being discharged by Employer.

“Employer” shall mean the Affiliate of Parent that employs Participant from time to time, and any successor to its business and/or assets by operation of law or otherwise.

“Employer Board” shall mean the board of directors (or other highest governing authority other than the shareholders) of Employer.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and any successor provisions thereto.

“Good Reason” means Participant’s resignation from employment with Employer as a result of any of the following:


(i)	a meaningful and detrimental alteration in Participant’s position or the nature or status of Participant’s responsibilities (including reporting

responsibilities) from those in effect immediately before the Change in Control Date;


(ii)	a material failure by Employer to pay Participant a bonus or incentive award commensurate with the bonus paid others at Participant’s job level (expressed as a percentage of target bonus) unless such failure is justified by clear and objective deficiencies of the business units for which Participant is responsible;

(iii)


(iv)	a Substantial Change.

“Involuntary Termination” means (i) Participant’s termination of employment by Employer without Cause or (ii) Participant’s resignation of employment with the Employer for Good Reason.

“Parent” shall mean Tiffany & Co., a Delaware corporation, and any successor to its business and/or assets by operation of law or otherwise.

“Parent Board” shall mean the Board of Directors of Parent.

“Separation from Service” shall have the meaning defined in Treasury Regulation Section 1.409A-1(h).

“Terminating Transaction” shall mean a Change in Control in which any one of the following occurs:


(i)	the dissolution or liquidation of the Parent;


(ii)	a reorganization, merger or consolidation of the Parent with one or more Persons as a result of which the Parent goes out of existence or becomes a subsidiary of another Person; or


(iii)	upon the acquisition of substantially all of the property or more than eighty percent (80%) of the then outstanding stock of the Parent by another Person;

provided that none of the foregoing transactions (i) through (iii) will be deemed to be a Terminating Transaction, if as of a date at least fourteen (14) days prior to the date scheduled for such transaction provisions have been made in writing in connection with such transaction for the assumption of the Stock Unit or the substitution for the Stock Unit of a new stock unit covering the publicly-traded stock of a successor Person, with appropriate adjustments as to the number and kind of shares.

“Time-Based Restricted Stock Unit” means a stock unit that shall not mature, and which shall be deemed to have “expired,” upon the Participant’s Date of Termination, if the Participant’s Date of Termination occurs before the Maturity Date, provided, however, that if such Date of Termination occurs pursuant to an Involuntary Termination or by reason of death or Disability, in which case the Time-Based Restricted Stock Units will “mature” and vest on the Date of Termination, and the Settlement Value of the Time-Based Restricted Stock Unit in Shares shall be issued and delivered within thirty (30) days of the Date of Termination to or for the account of Participant.

EXHIBIT 10.35

Tiffany & Co.

(a Delaware corporation)

Corporate Governance Principles

(as adopted by the full Board of Directors on January 15, 2004,

amended March 15, 2007, further amended and restated September 16, 2010, further amended and restated on March 17, 2011, further amended and restated on March 20, 2014 and further amended and restated on March 19, 2015)


1.	Director Qualification Standards; Size of the Board; Audit Committee Service; Director Nominations and Resignations.

a. At least a majority of the directors shall meet the independence requirements set forth in Section 303A.02 of the New York Stock Exchange Corporate Governance Rules. A director shall not be deemed to have met such independence requirements unless the Board has affirmatively determined that it be so. In making its determination of independence, the Board shall broadly consider all relevant facts and circumstances and assess the materiality of each director’s relationship(s) with the Corporation and/or its subsidiaries (directly or as a partner, shareholder or officer of any organization that has a relationship with the Corporation). Further, in making its determination of independence for any director who will serve on the Compensation Committee, the Board shall also consider all factors specifically relevant to determining whether each such director has a relationship to the Corporation that is material to his or her ability to be independent from management in connection with the duties of a Compensation Committee member, including, but not limited to, the requirements set forth in Section 303A.02(a)(ii) of the New York Stock Exchange Corporate Governance Rules. If a director is determined by the Board to be independent, all relationships, if any, that such director has with the Corporation and/or its subsidiaries which were determined by the Board to be immaterial to independence shall be disclosed in the Corporation’s annual proxy statement.

b. A director shall be younger than age 74 when elected or appointed and a director shall not be recommended for re-election by the stockholders if such director will be age 74 or older on the date of the annual meeting or other election in question, 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.

c. A director need not be a stockholder to qualify as a director, but shall be encouraged to hold stock in the Corporation by virtue of its policies with respect to stock ownership by directors.

d. Consistent with 1.a. above, candidates for director shall be selected on the basis of their business experience, expertise and skills, with a view to supplementing the business experience, expertise and skills of management and adding further substance and insight into board discussions and oversight of management. The Nominating/Corporate Governance Committee is responsible for developing, and recommending to the Board, criteria for the selection of new directors, for identifying individuals qualified to become

directors, and for recommending to the Board director nominees for the next annual meeting of the stockholders.

e. From time to time, the Nominating/Corporate Governance Committee will recommend to the Board the optimal number of directors constituting the entire Board. Based upon that recommendation, the current nature and scope of the Corporation’s business, and the experience, expertise and skills of the existing roster of directors, the Board believes that ten directors is an appropriate number at this time.

f. The Board shall be responsible for determining whether each member of the Audit Committee is financially literate and confirming that at least one member of the Audit Committee has accounting or related financial management expertise, in each case as set forth in Section 303A.07 of the New York Stock Exchange Corporate Governance Rules. The Board shall further have responsibility for determining the qualification of an individual to serve on the Audit Committee as a designated “audit committee financial expert,” as required by the applicable rules of the SEC under Section 407 of the Sarbanes-Oxley Act. In addition, to serve on the Audit Committee, a director must meet the standards for independence set forth in Section 301 of the Sarbanes-Oxley Act. To those ends, the Nominating/Corporate Governance Committee will coordinate with the Board in screening any new candidate to serve on the Audit Committee and in evaluating whether to re-nominate any existing director who may serve on the Audit Committee. If an Audit Committee member simultaneously serves on the audit committees of more than three public companies, then, in the case of each such Audit Committee member, the Board shall determine that such simultaneous service would not impair the ability of such member to effectively serve on the Corporation’s Audit Committee and disclose such determination in the Corporation’s annual proxy statement.

g. Any director who, since the time such director was most recently elected to the Board, changes his or her employer or otherwise has a significant change in job responsibilities, or who accepts or intends to accept a directorship with another public company (or with any other organization that would require a significant time commitment) shall (1) advise the secretary of the Corporation of such change or directorship and (2) submit to the Nominating/Corporate Governance Committee, in care of the secretary, a signed letter, addressed to such Committee, resigning as a director of the Corporation effective upon the acceptance of such resignation by such Committee, but void ab initio if not accepted by such Committee within ten (10) days of receipt by the secretary. The secretary of the Corporation shall promptly advise the members of the Nominating/Corporate Governance Committee of the change or directorship and the receipt of such a letter. The Nominating/Corporate Governance Committee shall promptly convene and consider, in light of the circumstances, the continued appropriateness of such director’s membership on the Board and each committee of the Board on which such director participates. In some instances, taking into account all relevant factors and circumstances, it may be appropriate for the Nominating/Corporate Governance Committee to accept such resignation, to recommend to the Board that the director cease participation on one or more committees, or to decline such resignation, but recommend to the Board that such director not be re-nominated to the Board.

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h. Subject to 1.b above, directors of the Corporation are not subject to term limits. However, the Nominating/Corporate Governance Committee will consider each director’s continued service on the Board each year and recommend whether each director should be re-nominated to the Board. Each director will be given an opportunity to confirm his or her desire to continue as a member of the Board.

i. The Corporation has amended its By-Laws to provide for majority voting in the election of directors. In uncontested elections, directors are elected by a majority of the votes cast, which means that the number of shares voted “for” a director must exceed the number of shares voted “against” that director. The Nominating/Corporate Governance Committee (or comparable committee of the Board) shall establish procedures for any director who is not elected to tender his or her resignation. The Nominating/Corporate Governance Committee will make a recommendation to the Board on whether to accept or reject the resignation, or whether other action should be taken. The Board will act on the Nominating/Corporate Governance Committee's recommendation within 90 days following certification of the election results. In determining whether or not to recommend that the Board of Directors accept any resignation, the Nominating/Corporate Governance Committee shall be entitled to consider all factors believed relevant by such Committee’s members. Unless applicable to all directors, the director(s) whose resignation is under consideration is expected to recuse himself or herself from the Board vote to accept or reject the resignation. Thereafter, the Board will promptly disclose its decision regarding the director's resignation (including the reason(s) for rejecting the resignation, if applicable) in a Form 8-K furnished to the Securities and Exchange Commission. If the Board accepts a director's resignation pursuant to this process, the Nominating/Corporate Governance Committee shall recommend to the Board whether to fill such vacancy or reduce the size of the Board. If, for any reason, the Board of Directors is not elected at an annual meeting, they may be elected thereafter at a special meeting of the stockholders called for that purpose in the manner provided in the By-laws.

j. Including service on the Board of Directors of the Corporation, no director shall serve on the board of directors (or any similar governing body) of more than six public companies.

2. Attendance and Participation at Board and Committee Meetings.

a. Directors are expected to attend the six regularly scheduled board meetings in person, if practicable, or by telephone, if attendance in person is impractical. Directors should attempt to organize their schedules in advance so that attendance at all regularly scheduled board meetings will be practicable.

b. For committees on which they serve, directors are expected to attend regularly scheduled meetings in person, if practicable, or by telephone, if attendance in person is impractical or if telephone participation is the expected means of participation. For committees on which they serve, directors should attempt to organize their schedules in advance so that attendance at all regularly scheduled committee meetings will be practicable.

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c. Directors shall make all reasonable efforts to attend, in person or by telephone, specially scheduled meetings of the Board or those committees on which they serve.

d. Directors shall, to the fullest extent practicable, review in advance all meeting materials provided by management, the other directors and consultants or advisors to the Board.

e. Directors are expected to comply with the policies and procedures of the Corporation with respect to business conduct, ethics, confidential information and ownership of, and trading in, the Corporation’s securities.

f. Nothing stated herein shall be deemed to limit the duties of directors under applicable law.

3. Director Access to Management and Independent Advisors.

a. Executive officers of the Corporation and its subsidiaries shall make themselves available, and shall arrange for the availability of other members of management, employees and consultants, so that each director shall have full and complete access with respect to the business, finances and accounting of the Corporation and its subsidiaries.

b. The chief financial officer and the chief legal officer of the Corporation shall regularly attend Board meetings (other than those portions of Board meetings that are reserved for independent or non-management directors or those portions in which the independent or non-management directors meet privately with the chief executive officer, other members of management or the Corporation’s independent accountants). The Board encourages the chief executive officer to invite other executive and non-executive officers to Board meetings from time to time in order to provide additional insight into items being discussed and so that the Board may meet and evaluate persons with potential for advancement.

c. If the charter of any Board committee on which a director serves provides for access to independent advisors, any executive officer of the Corporation will be authorized to arrange for the payment of the reasonable fees of such advisors at the request of such a committee acting by resolution or unanimous written consent.

4. Director Compensation.

a. Directors shall be compensated in a manner and at a level sufficient to encourage exceptionally well qualified candidates to accept service on the Board and to retain existing directors. The Board believes that a meaningful portion of a director’s compensation should be provided in, or otherwise based upon appreciation in the market value of, the Corporation’s Common Stock. Compensation of the Directors shall be determined by the Nominating/Corporate Governance Committee.

b. In determining the form and amount of director compensation, the Nominating/Corporate Governance Committee shall retain an independent advisor to

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provide such Committee with advice, which shall include reference to data drawn from public company filings with respect to the fees and emoluments paid to outside directors by comparable public companies.

c. Contributions to charities with which an independent or non-management director is affiliated will not be used as compensation to such a director, and management will make efforts to avoid any appearance of impropriety in connection with such contributions, if any. Contributions made during any fiscal year to charitable organizations with which directors are affiliated, through membership on the governing board of such charitable organizations, shall be disclosed in the Corporation’s annual proxy statement for such year.

d. Management will advise the Board should the Corporation or any subsidiary wish to enter into any direct financial arrangement with any director for consulting or advisory services, or into any financial arrangement with any entity affiliated with such director by which the director may be indirectly benefited, and no such arrangement shall be consummated without specific authorization from the Board.

5. Director Orientation and Continuing Education.

a. Each executive officer of the Corporation shall be available to and meet with any new director and provide an orientation into the business, finance and accounting of the Corporation.

b. Each director shall be reimbursed, at such director’s request, for reasonable expenses incurred in pursuing continuing education with respect to his/her role and responsibilities to the stockholders and under law as a director.

6. Management Succession.

a. The Board, assisted by the Nominating/Corporate Governance Committee, shall select, evaluate the performance of, and make determinations to retain or replace, the chief executive officer. Such evaluations and determinations will be made with (i) a view to the effectiveness and execution of strategies propounded by, and decisions made by, the chief executive officer with respect to the Corporation’s long-term strategic plan and long-term financial returns and (ii) applicable legal and ethical considerations.

b. In furtherance of the foregoing responsibilities, and in contemplation of the retirement, or an exigency that requires the replacement, of the chief executive officer, the Board shall, in conjunction with the chief executive officer, evaluate the performance and potential of the other executive officers. More generally, the Board, assisted by the Nominating/Corporate Governance Committee, shall participate in the planning for the succession of the other executive officers.

7. Annual Performance Evaluation of the Board.

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a. The Nominating/Corporate Governance Committee is responsible for assisting the Board in the Board’s oversight of the Board’s own performance in the area of corporate governance.

b. Annually, each independent director will participate in an assessment and evaluation of the Board’s performance. The results of such self-assessment will be provided to or discussed with each director.

8. Matters for Board Review, Evaluation and/or Approval.

a. The Board is responsible under the law of the State of Delaware to review and approve significant actions by the Corporation, including major transactions (such as material acquisitions and financings), declaration of dividends, issuance of securities and appointment of officers of the Corporation. The Board, with the assistance of the Audit Committee, shall annually review, and, if acceptable, approve, a delegation of authority policy that delineates the matters that shall be reserved for Board approval from those matters that may be delegated to management.

b. The Board is responsible for reviewing and approving or ratifying any transaction, arrangement or relationship in which: (i) the aggregate amount involved will, or may be expected to, exceed $120,000 in any fiscal year, (ii) the Corporation or any of its subsidiaries is a participant, and (iii) any Related Person has or will have a direct or indirect material interest (other than solely as a result of being a director or trustee or in any similar position, or a less than 10% beneficial owner, of another entity) (each, a “Related Person Transaction”). For purposes of this item 8.b, a “Related Person” shall be any person who at any time since the beginning of the last fiscal year of the Corporation was a director or executive officer of the Corporation, a nominee for director, a stockholder owning of record or beneficially more than 5% of any class of the Corporation’s voting securities and an immediate family member (as defined in Item 404(a) of Regulation S-K promulgated under the Securities Exchange Act of 1934, as amended (the “Act”)) of any such person. The Corporation’s chief legal officer, having been informed of any potential or planned Related Person Transaction in accordance with the Corporation’s applicable policies and procedures, shall promptly advise the Nominating/Corporate Governance Committee. The Committee shall then review such transaction and, where the Committee determines in its business judgment that it is in the best interest of the Corporation, recommend such transaction for approval or ratification to the Board. In making such determination, the Committee and the Board shall broadly consider all relevant facts and circumstances, including the identity and position of the Related Person, the extent of the Related Person’s interest in the transaction, the business purpose for and reasonableness of the transaction (particularly in light of alternatives), the terms of the transaction and the materiality of the transaction to the Related Person and the Corporation. The Board, directly or through its Nominating/Corporate Governance Committee, may adopt additional policies and procedures with respect to Related Party Transactions, which may provide for certain exceptions to the review and approval requirements set forth above. The provisions of this item 8.b are in addition to, and not intended to modify, item 4.d above. The Corporation’s policies and procedures for the review, approval or ratification of Related Person Transactions shall be disclosed in the Corporation’s annual proxy statement.

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c. The Board is responsible, either through its committees, or as guided by its committees, for those matters which are set forth in the respective charters of the Audit, Nominating/Corporate Governance, Compensation and Corporate Social Responsibility Committees or as otherwise set forth in the applicable laws of the state of Delaware, the applicable Federal laws of the United States and in the corporate governance rules of the New York Stock Exchange.

d. The following matters, among others, will be the subject of Board deliberation on such occasions as the Board may determine necessary or desirable, but as least as often as required by applicable law or by the corporate governance rules of the New York Stock Exchange:

i. the Board will review and, if acceptable, approve the Corporation’s operating plan for each fiscal year, as developed and recommended by management;

ii. the Board will review actual performance against the operating plan;

iii. the Board will review and, if acceptable, approve the Corporation’s multi-year strategic plan, as developed and recommended by management;

iv. at least annually, the Board will review and discuss management’s enterprise risk assessment;

v. the charters of all Board Committees will be reviewed and, if appropriate, modified, by the Board;

vi. the delegation of authority to officers and employees for day-to-day operating matters of the Corporation and its subsidiaries will be reviewed and, if acceptable, approved by the Board; and

vii. the Corporation’s policies with respect to the payment of dividends and the repurchase of the Corporation’s securities will be reviewed and, if acceptable, approved by the Board.

9. Management’s Responsibilities.

Management is responsible for operating the Corporation with the objective of achieving the Corporation’s operating and strategic plans and building value for stockholders on a long-term basis. In executing those responsibilities, management is expected to act in accordance with the policies and standards established by the Board (including these principles), as well as in accordance with applicable law and for the purpose of maintaining the value of the trademarks and business reputation of the Corporation’s subsidiaries. Specifically, the chief executive officer and the other executive officers are responsible for:

a. producing, under the oversight of the Board and the Audit Committee, financial statements for the Corporation and its consolidated subsidiaries that fairly present the financial condition, results of operation, cash flows and related risks in accordance with generally accepted accounting principles, for making timely and complete disclosure to

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investors in accordance with applicable laws, and for keeping the Board and the appropriate committees of the Board informed on a timely basis as to all matters of significance;

b. developing and presenting the strategic plan, proposing amendments to the plan as conditions and opportunities dictate and implementing the plan as approved by the Board;

c. developing and presenting the annual operating plan and budget and for implementing that plan and budget as approved by the Board;

d. identifying, assessing and managing risks that may arise in the Corporation’s operations and ensuring that the Board is appropriately aware of any such material risks;

e. creating an organizational structure appropriate to the achievement of the strategic and operating plans of the Corporation and recruiting, selecting and developing the necessary managerial talent to execute on such plans;

f. creating a working environment conducive to integrity, business ethics and compliance with applicable laws and the requirements of the Corporation’s policies;

g developing, implementing and monitoring an effective system of internal controls and procedures to provide reasonable assurance that: the Corporation’s transactions are properly authorized; the Corporation’s assets are safeguarded against unauthorized or improper use; and the Corporation’s transactions are properly recorded and reported. Such internal controls and procedures also shall be designed to permit preparation of financial statements for the Corporation and its consolidated subsidiaries in conformity with generally accepted accounting principles and any other legally required criteria applicable to such statements; and

h. establishing, maintaining and evaluating the Corporation’s disclosure controls and procedures. The term “disclosure controls and procedures” means controls and other procedures of the Corporation that are designed to ensure that information required to be disclosed by the Corporation in the reports filed or submitted by it under the Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Corporation in the reports it files or submits under the Act is accumulated and communicated to the Corporation’s management, including its principal executive and financial officers, as appropriate to allow timely decisions regarding required disclosure. To assist in carrying out this responsibility, management has established a Disclosure Control Committee, whose membership is responsible to the Audit Committee, to the chief executive officer and to the chief financial officer, and includes the following officers or employees of the Corporation: the executive officers primarily responsible for global retail sales, merchandising and manufacturing; the chief legal officer, the chief information officer, the controller, the heads of internal audit & financial planning and analysis, the investor relations officer and the treasurer.

10. Leadership Structure and Meeting Procedures.

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a. The Board shall determine whether the offices of chairman of the board and chief executive officer shall be held by one person or by separate persons, and whether the person holding the office of chairman of the board shall be “independent”. An “independent” director meets the requirements for “independence” as referenced in item 1.a above. “Non-management” directors include those who are independent and those who, while not independent, are not currently employees of the Corporation or one of its subsidiaries. In determining which director shall serve as chairman of the Board, the Board shall broadly consider all relevant facts and circumstances as well as the director’s business experience, specific areas of expertise and skill set, including his or her ability to effectively moderate discussions during Board meetings and his or her responsiveness to the Board’s suggestions for agenda items and information to be provided by management to the Board.

b. The chairman of the board will establish the agenda for each Board meeting, but the chairman of the board will include in such agenda any item submitted by the presiding independent director (see item 11.e below). Each Board member may suggest the inclusion of items on the agenda for any meeting, and the chairman of the board will consider them for inclusion.

c. Management shall be responsible for distributing information and data that is necessary for the Board to understand the matters to be considered and acted upon by the Board; such materials shall be, to the fullest extent practicable, distributed in written form to the Board sufficiently in advance of Board meetings so as to provide reasonable time for review and evaluation. To that end, management has provided each director with access to a secure website where confidential and sensitive materials may be viewed. In circumstances where practical considerations do not permit advance circulation of written materials, reasonable steps shall be taken to allow more time for discussion and consideration, such as extending the duration of a meeting or circulating unanimous written consent forms, which may be considered and returned at a later time.

d. The chairman of the board shall preside over meetings of the Board; in his or her absence, the presiding independent director or another director identified by the presiding independent director shall preside.

e. If the chairman of the board is not independent, the independent directors shall select from among themselves a “presiding independent director”; failing such selection, the chairman of the Nominating/Corporate Governance Committee shall be the presiding independent director. The presiding independent director shall be identified as such in the Corporation’s annual proxy statement. The presiding independent director shall approve meeting agendas and schedules for the Board, chair meetings of the independent and non-management directors, serve as a liaison between the chairman of the Board and the independent directors, and serve to facilitate communications by stockholders and employees with the non-management directors. The presiding independent director shall also have the authority to call meetings of the independent directors.

f. The non-management directors shall meet separately from the other directors in regularly scheduled executive session, without the presence of management

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directors and executive officers of the Corporation. As set forth in item 10.e above, the presiding independent director shall preside over such meetings.

g. At least once per year the independent directors shall meet separately from the other directors in a scheduled executive session, without the presence of management directors, non-management directors who are not independent and executive officers of the Corporation. As set forth in item 10.e above, the presiding independent director shall preside over such meetings.

h. The Board, with the assistance of the Nominating/Corporate Governance Committee, shall reassess the appropriateness of the Board leadership structure as warranted, including following changes in management, board composition or in the nature, scope or complexity of the Corporation’s operations.

11. Committees.

a. The Board shall have an Audit Committee, a Compensation Committee and a Nominating/Corporate Governance Committee, which shall have the respective responsibilities described in the charters of each committee. The membership of each such committee shall consist only of independent directors.

b. The Board may, from time to time, appoint one or more additional committees, such as a Dividend Committee and a Corporate Social Responsibility Committee.

c. The chairman of each Board committee, in consultation with the appropriate members of management, will develop the committee’s agenda. Management will assure that, as a general rule, information and data necessary to the committee’s understanding of the matters within the committee’s authority and the matters to be considered and acted upon by a committee are distributed to each member of such committee sufficiently in advance of each such meeting or action taken by written consent to provide a reasonable time for review and evaluation.

d. At each regularly scheduled Board meeting, the chairman of each committee or his or her delegate shall report the matters considered and acted upon by such committee at each meeting or by written consent since the preceding regularly scheduled Board meeting.

e. The secretary of the Corporation, or any assistant secretary of the Corporation, shall be available to act as secretary of any committee and shall, if invited, attend meetings of the committee and prepare minutes of the meeting for approval and adoption by the committee.

12. Reliance.

Any director of the Corporation shall, in the performance of such person’s duties as a member of the Board or any committee of the Board, be fully protected in relying in good faith upon the records of the Corporation or upon such information, opinions, reports or statements presented by any of the Corporation’s officers or employees, or committees of the

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Board, or by any other person as to matters the director reasonably believes are within such other person’s professional or expert competence.

13. Reference to Corporation’s Subsidiaries.

Where the context so requires, reference herein to the Corporation includes reference to the Corporation and/or any direct or indirect subsidiary of the Corporation whose financial results are consolidated with those of the Corporation for financial reporting purposes, and reference to a subsidiary of the Corporation shall be reference to such a subsidiary.

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