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<SEC-DOCUMENT>0000950117-00-000708.txt : 20000327
<SEC-HEADER>0000950117-00-000708.hdr.sgml : 20000327
ACCESSION NUMBER: 0000950117-00-000708
CONFORMED SUBMISSION TYPE: 10-K405
PUBLIC DOCUMENT COUNT: 17
CONFORMED PERIOD OF REPORT: 19991231
FILED AS OF DATE: 20000324
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: PITTSTON CO
CENTRAL INDEX KEY: 0000078890
STANDARD INDUSTRIAL CLASSIFICATION: BITUMINOUS COAL & LIGNITE MINING [1220]
IRS NUMBER: 541317776
STATE OF INCORPORATION: VA
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 10-K405
SEC ACT:
SEC FILE NUMBER: 001-09148
FILM NUMBER: 578473
BUSINESS ADDRESS:
STREET 1: P O BOX 4229
STREET 2: 1000 VIRGINIA CENTER PKWY
CITY: GLEN ALLEN
STATE: VA
ZIP: 23058-4229
BUSINESS PHONE: 8045533681
MAIL ADDRESS:
STREET 1: P O BOX 4229
STREET 2: 1000 VIRGINIA CENTER PKWY
CITY: GLEN ALLEN
STATE: VA
ZIP: 23058-4229
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K405
<SEQUENCE>1
<DESCRIPTION>THE PITTSTON COMPANY 10-K 405
<TEXT>
<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-K
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ___________ TO ___________
COMMISSION FILE NUMBER 1-9148
THE PITTSTON COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
VIRGINIA 54-1317776
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
P.O. BOX 4229,
1000 VIRGINIA CENTER PARKWAY
GLEN ALLEN, VIRGINIA 23058-4229
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (804) 553-3600
</TABLE>
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
<TABLE>
<S> <C>
NAME OF EACH EXCHANGE OF
TITLE OF EACH CLASS WHICH REGISTERED
------------------- ----------------
PITTSTON BRINK'S GROUP COMMON STOCK, PAR VALUE $1 NEW YORK STOCK EXCHANGE
RIGHTS TO PURCHASE SERIES A PARTICIPATING CUMULATIVE PREFERRED STOCK NEW YORK STOCK EXCHANGE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE
</TABLE>
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
As of March 1, 2000, there were issued and outstanding 51,777,782
shares of Pittston Brink's Group Common Stock. The aggregate market value of
such stocks held by nonaffiliates, as of that date, was $852,898,681.
Documents incorporated by reference: Part I, Part II and Part IV
incorporate information by reference from the Annual Report of the Company for
the year ended December 31, 1999. Part III incorporates information by reference
from portions of the Registrant's definitive Proxy Statement to be filed
pursuant to Regulation 14A.
<PAGE>
- -----------------------------------------------------------------------------
PART I
- -----------------------------------------------------------------------------
ITEMS 1 AND 2. BUSINESS AND PROPERTIES
As used herein, the "Company" includes The Pittston Company except as otherwise
indicated by the context. The Company is comprised of five operating segments -
Brink's, Incorporated ("Brink's"), Brink's Home Security, Inc. ("BHS"), BAX
Global Inc. ("BAX Global"), Pittston Coal Operations ("Coal Operations") and
Other Operations, which consists of Pittston Mineral Ventures ("Mineral
Ventures") and the Company's timber and gas operations (collectively, "Allied
Operations").
Prior to January 14, 2000, the Company was comprised of three groups - Pittston
Brink's Group, Pittston BAX Group, and Pittston Minerals Group. The Pittston
Brink's Group included the Brink's and BHS operations of the Company. The
Pittston BAX Group included the BAX Global operations of the Company. The
Pittston Minerals Group included the Pittston Coal Company and Mineral Ventures
operations of the Company. Also, prior to January 14, 2000, the Company had
three classes of common stock: Pittston Brink's Group Common Stock ("Brink's
Stock"), Pittston BAX Group Common Stock ("BAX Stock") and Pittston Minerals
Group Common Stock ("Minerals Stock"), which were designed to provide
shareholders with separate securities reflecting the performance of the Brink's
Group, the BAX Group and the Minerals Group, respectively.
On December 6, 1999, the Company announced that its Board of Directors (the
"Board") approved the elimination of the tracking stock capital structure by an
exchange of all outstanding shares of Minerals Stock and BAX Stock for shares of
Brink's Stock (the "Exchange"). The Exchange took place on January 14, 2000 (the
"Exchange Date"). On the Exchange Date, holders of Minerals Stock received
0.0817 shares of Brink's Stock for each share of their Minerals Stock; and
holders of BAX Stock received 0.4848 shares of Brink's Stock for each share of
their BAX Stock. See Note 10 of the Company's consolidated financial statements
for additional information concerning the Exchange on pages 48 through 49 of the
Company's 1999 Annual Report, which are incorporated herein by reference. From
and after the Exchange Date, Brink's Stock is the only outstanding class of
common stock of the Company and continues to trade on the New York Stock
Exchange under the symbol "PZB". Prior to the Exchange Date, the Brink's Stock
reflected the performance of the Brink's Group only; after the Exchange Date,
the Brink's Stock reflects the performance of the Company as a whole. Shares of
Brink's Stock after the Exchange are hereinafter referred to as "Pittston Common
Stock".
Financial information related to the Company's segments is included in Note 17
of the Company's consolidated financial statements on pages 56 through 57 of the
Company's 1999 Annual Report, which are incorporated herein by reference. The
information set forth with respect to "Business and Properties" is as of
December 31, 1999 except where an earlier or later date is expressly stated.
Nothing herein should be considered as implying that such information is correct
as of any date other than December 31, 1999, except as so stated or indicated by
the context.
Activities relating to the Brink's segment are carried on by Brink's,
Incorporated and its subsidiaries and certain affiliates and associated
companies in foreign countries (together, "Brink's"). Activities relating to the
BHS segment are carried on by Brink's Home Security, Inc. and its subsidiaries
(together, "BHS"). Activities relating to the BAX Global segment are carried on
by BAX Global Inc. and its subsidiaries and certain affiliates and associated
companies in foreign countries (together, "BAX Global"). Activities relating to
Coal Operations are carried on by coal-related subsidiaries of Pittston Coal
(together, "Coal Operations"). Activities relating to Other Operations are
carried on by Pittston Mineral Ventures Company and its subsidiaries and certain
affiliates (together, "Mineral Ventures") and Pittston Coal's timber and gas
operations (together, "Allied Operations").
The Company has a total of approximately 46,500 employees.
BUSINESS AND SECURITY SERVICES
The business and security services businesses of the Company consist of Brink's,
BHS and BAX Global.
BRINK'S
GENERAL
The major activities of Brink's are contract-carrier armored car, automated
teller machine ("ATM"), air courier (global services), coin wrapping, and
currency and deposit processing services. Brink's serves customers through 147
branches in the United States and 39 branches in Canada. Service is also
provided through subsidiaries, affiliates and associated companies in 49
countries outside the United States and Canada. These international operations
contributed approximately 53% of Brink's total reported 1999 operating profit.
Brink's ownership interest in subsidiaries and affiliated companies ranges from
20% to 100%. In some instances local laws limit the extent of Brink's interest.
Representative customers include banks, commercial establishments, industrial
facilities, investment banking and brokerage firms and government agencies.
Brink's provides its individualized services under separate contracts designed
to meet the distinct transportation and security requirements of its customers.
These contracts are usually for an initial term of one year or less, but
generally continue in effect thereafter until canceled by either party.
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<PAGE>
Brink's armored car services include transportation of money from industrial and
commercial establishments to banks for deposit, and transportation of money,
securities and other negotiable items and valuables between commercial banks,
Federal Reserve Banks and their branches and correspondents, and brokerage
firms. Brink's also transports new currency, coins and precious metals for the
United States Mint, the Federal Reserve System and the Bank of Canada. For
transporting money and other valuables over long distances, Brink's offers a
combined armored car and air courier service linking many cities in the United
States and abroad. Except for a subsidiary in Venezuela, Brink's does not own or
operate any aircraft, but uses regularly scheduled or chartered aircraft in
connection with its air courier services.
In addition to its armored car pickup and delivery services, Brink's provides
change services, coin wrapping services, currency and deposit processing
services, ATM services, safes and safe control services, check cashing and
pickup and delivery of valuable air cargo shipments. In certain geographic
areas, Brink's transports canceled checks between banks or between a clearing
house and its member banks. Brink's also offers CompuSafe'r' service, designed
to streamline the handling and management of cash receipts initially implemented
for the convenience store and gas station market.
Brink's operates a worldwide specialized diamond and jewelry transportation
business and has offices in the major diamond and jewelry centers of the world,
including London, Antwerp, Tel Aviv, Hong Kong, New York, Bombay, Bangkok, Tokyo
and Arrezzo, Italy.
Brink's has the ability, through its information systems, to integrate a full
range of cash vault, ATM, transportation, storage, processing, inventory
management and reporting services. Brink's believes that its processing and
information capabilities differentiate its currency and deposit processing
services from its competitors and enable Brink's to take advantage of the trend
by banks, retail business establishments and others to outsource vaulting and
cash room operations.
Brink's non-North American operations, which accounted for approximately 57% of
its revenues in 1999, operate in three regions: Europe, Latin America and
Asia/Pacific. In Europe, wholly owned subsidiaries of Brink's operate in France,
Germany, the United Kingdom and the Netherlands and, in the diamond and jewelry
transportation business, in Belgium, Italy and Russia. Brink's has a 70%
interest in a subsidiary in Israel, a 50.05% interest in a subsidiary in Greece
and a 51% interest in a subsidiary in Switzerland. Brink's also has ownership
interests ranging from 45% to 50% in affiliates and subsidiaries operating in
Belgium, Ireland, Jordan and Luxembourg. Wholly owned subsidiaries operate in
South Africa and Turkey. In Latin America, wholly owned subsidiaries operate in
Brazil, Puerto Rico and Bolivia. Brink's owns a 61% interest in a subsidiary in
Venezuela, a 74% interest in a subsidiary in Chile, a 51% interest in a
subsidiary in Argentina, a 58% interest in a subsidiary in Colombia and a 20%
interest in a Mexican company which operates one of the world's largest security
transportation services with over 1,400 armored vehicles. Brink's also has 49%
and 36% ownership interests in affiliates operating in Panama and Peru,
respectively. In the Asia/Pacific region, wholly owned subsidiaries of Brink's
operate in Australia and Taiwan, and majority owned subsidiaries operate in Hong
Kong (90% owned), Japan (51% owned) and Singapore (60% owned). Brink's has
minority interests in affiliates in India, Pakistan and Thailand ranging from
40% to 49%. Brink's also operates a representative office in China.
Because the financial results of Brink's are reported in US dollars, they are
affected by changes in the value of the various foreign currencies in relation
to the US dollar. Changes in exchange rates may also adversely affect
transactions that are denominated in currencies other than the functional
currency of the subsidiary performing the transaction. The diversity of foreign
operations helps to mitigate a portion of the impact that foreign currency
fluctuations in any one country may have on the translated results. Brink's,
from time to time, uses foreign currency forward contracts to hedge certain
transactional risks associated with foreign currencies. Brink's is also subject
to other risks customarily associated with doing business in foreign countries,
including labor and economic conditions, political instability, controls on
repatriation of earnings and capital, nationalization, expropriation and other
forms of restrictive action by local governments. The future effects of such
risks on Brink's cannot be predicted.
COMPETITION
Brink's is the oldest and largest armored car service company in the United
States as well as a market leader in most of the countries in which it operates.
The foreign subsidiaries, affiliates and associates of Brink's compete with
numerous armored car and courier service companies in many areas of operation.
In the United States, Brink's presently competes nationally with one company and
regionally and locally with many smaller companies. Brink's believes that its
service, high quality insurance coverage and company reputation (including the
name "Brink's") are important competitive advantages. However, the cost of
service is, in many instances, the controlling factor in obtaining and retaining
customers. While Brink's cost structure is generally competitive, certain
competitors of Brink's have lower costs primarily as a result of lower wage and
benefit levels.
See also "Government Regulation" below.
SERVICE MARK, PATENTS AND COPYRIGHTS
BRINKS is a registered service mark of Brink's Network, Inc. in the United
States and of Brink's, Incorporated in certain foreign countries. The BRINKS
mark, name and related marks are of material significance to Brink's business.
Brink's owns patents with respect to certain coin sorting and counting machines
and armored truck design. Patents related to coin sorting machines expire in
2007 and patents related to counting machines expire in 2008. In addition,
Brink's has a patented integrated service called CompuSafe'r' service that
expires in 2018. CompuSafe'r' has
2
<PAGE>
been designed to streamline the handling and management of cash receipts.
INSURANCE
Excess of prudent deductibles and/or retentions, Brink's carries insurance
coverage for its losses. Insurance policies cover liability for loss of various
types of property entrusted to Brink's from any cause except war and nuclear
risk. The various layers of insurance are covered by different groups of
participating underwriters. Such insurance is obtained by Brink's at rates and
upon terms negotiated periodically with the underwriters. The loss experience of
Brink's and, to a limited extent, other armored carriers affects premium rates
charged to Brink's. The availability of quality and reliable insurance coverage
is an important factor in the ability of Brink's to obtain and retain customers.
Quality insurance is available to Brink's in major markets although the premiums
charged are subject to fluctuations depending on market conditions. Less
expensive armored car and air courier all-risk insurance is available, but these
policies typically contain unacceptable operating warranties and limited
customer protection.
GOVERNMENT REGULATION
The operations of Brink's are subject to regulation by the United States
Department of Transportation with respect to safety of operation and equipment
and financial responsibility. Intrastate operations in the United States and
intraprovince operations in Canada are subject to regulation by state and by
Canadian and provincial regulatory authorities, respectively. Brink's non-North
American operations are regulated to varying degrees by the countries in which
it operates.
EMPLOYEE RELATIONS
At December 31, 1999, Brink's and its subsidiaries had approximately 10,900
employees in North America, of whom approximately 2,800 were classified as
part-time employees. In the United States, two locations (10 employees) are
covered by collective bargaining agreements. At December 31, 1999, Brink's was a
party to two United States and twelve Canadian collective bargaining agreements
with various local unions covering approximately 1,500 employees, most of whom
are employees in Canada and members of unions affiliated with the International
Brotherhood of Teamsters. Negotiations are continuing on three agreements that
expired in 1999 and one agreement expiring in 2000. The remaining agreements
will expire after 2000. Negotiations on the three agreements which expired in
1999 are expected to be concluded by March 2000. At December 31, 1999, Brink's
had approximately 21,800 employees outside North America. Brink's believes that
its employee relations are satisfactory.
PROPERTIES
In the United States and Canada, Brink's owns 28 branch offices and holds under
lease an additional 158 branch offices, located in 37 states, the District of
Columbia and nine Canadian provinces. Such branches generally include office
space and garage or vehicle terminals, and serve not only the city in which they
are located but also nearby cities. Brink's corporate headquarters in Darien,
Connecticut, is held under a lease expiring in 2005, with an option for an early
termination in 2003. The leased branches include 120 facilities held under
long-term leases, while the remaining 38 branches are held under short-term
leases or month-to-month tenancies.
Brink's owns or leases, in the United States and Canada, approximately 2,400
armored vehicles, 300 panel trucks and 300 other vehicles that are primarily
service cars. In addition, approximately 3,800 Brink's-owned safes are located
on customers' premises. The armored vehicles are of bullet-resistant
construction and are specially designed and equipped to afford security for crew
and cargo. Brink's subsidiaries and affiliated and associated companies located
outside the United States and Canada operate from approximately 500 owned or
leased branches with approximately 4,700 owned or leased armored vehicles.
BHS
GENERAL
BHS is engaged in the business of marketing, selling, installing, servicing and
monitoring electronic security systems primarily in owner-occupied, single-
family residences. At December 31, 1999, BHS was monitoring approximately
643,300 systems, including approximately 105,600 new subscribers added since
December 31, 1998, and was servicing 96 metropolitan areas in 42 states, the
District of Columbia and two provinces in Canada. Twenty-six of these areas were
added during 1999.
BHS markets its alarm systems primarily through advertising, inbound
telemarketing and a direct sales force. BHS also markets its systems directly to
home builders and has entered into several contracts which extend through 2000.
BHS employees install and service the systems from local BHS branches.
Subcontractors are utilized in some service areas. BHS does not manufacture any
of the equipment used in its security systems; instead, it purchases such
equipment from a small number of suppliers. Equipment inventories are maintained
at each branch office.
BHS has established an authorized dealer program to expand the company's
geographic coverage and leverage the company's national advertising. During
1999, the dealer program accounted for less than 3% of installations and, as of
December 31, 1999, approximately twelve dealers were actively participating in
the program. BHS requires that its dealers install the same line of equipment as
is installed by its own branches, and adhere to the same installation quality
standards.
3
<PAGE>
BHS's security system consists of sensors and other devices which are installed
at a customer's premises. The equipment is designed to signal intrusion, fire,
medical and other alerts. When an alarm is triggered, a signal is sent by
telephone line to BHS's central monitoring station in Irving, Texas, a suburb of
Dallas. The monitoring station holds an Underwriters' Laboratories, Inc. ("UL")
listing. A backup monitoring center in Carrollton, Texas, helps protect against
a catastrophic event at the primary monitoring center. In the event of an
emergency, such as fire, tornado, major interruption in telephone or computer
service, or any other calamity affecting the primary facility, monitoring
operations can be transferred to the backup facility.
BHS's alarm service contracts contain provisions limiting BHS's liability to its
customers. Courts have, from time to time, upheld such provisions, but there can
be no assurance that the limitations contained in BHS's agreements will be
enforced according to their terms in any or all cases. The nature of the service
provided by BHS potentially exposes it to greater risk of liability than may be
borne by other service businesses. However, BHS has not experienced any major
liability losses.
BHS carries insurance of various types, including general liability and errors
and omissions insurance, to protect it from product deficiencies and negligent
acts of its employees. Certain of BHS's insurance policies and the laws of some
states limit or prohibit insurance coverage for punitive or certain other kinds
of damages arising from employees' misconduct.
REGULATION
BHS and its personnel are subject to various Federal, state and local consumer
protection, licensing and other laws and regulations. BHS's business relies upon
the use of telephone lines to communicate signals, and telephone companies are
currently regulated by both the Federal and state governments. Regulation of
installation and monitoring of fire detection devices has also increased in
several local markets. BHS's wholly owned Canadian subsidiary, Brink's Home
Security Canada Limited, is subject to the laws of Canada, British Columbia and
Alberta.
The alarm service industry continues to experience a high incidence of false
alarms in some communities, including communities in which BHS operates. BHS
believes its false alarm rate compares favorably to other companies' rates.
However, there is a possibility that at some point some police departments may
refuse to respond to calls from alarm companies which would necessitate that
private response forces be used to respond to alarm signals. Additionally, the
high incidence of false alarms in the industry has caused some local governments
to impose assessments, fines and penalties on either subscribers of alarm
companies or the alarm companies themselves, based upon the number of false
alarms reported to the authorities. BHS believes its alarm service contracts
allow BHS to pass these charges on to the appropriate customers.
COMPETITION
BHS competes in most major metropolitan markets in the United States and several
markets in Canada through its company branch operations or its authorized dealer
program. BHS believes that its share of the North American market for monitored
single-family home security systems is between 4% and 5% of new installations.
BHS believes that it is the fourth largest provider of residential monitored
security service in North America.
The home security market has large numbers of competitors, including many local
and regional companies. The largest provider of residential monitored security
systems is estimated by BHS to have approximately 20% of the North American
market for new installations. Several of the large competitors with whom BHS
competes on a national basis rely extensively on independent dealers to sustain
the growth in their customer bases.
Competitive pressure on installation fees has increased in recent years. Several
significant competitors offer installation prices which match or are less than
BHS prices; however, many of the small local competitors in BHS markets continue
to charge significantly more for installation. Competition in every market is
based on a variety of factors including, but not limited to, price, product
quality, company reputation, service quality, and warranty terms.
In February 1996, the Federal Telecommunications Reform Act was enacted which
contained provisions specific to the alarm industry. The key provisions include
a five year waiting period prior to entry for the original six (now four)
regional Bell operating companies ("RBOCs") not already providing alarm service,
restrictions on further purchases of alarm companies by one RBOC, Ameritech (now
merged with SBC Communications), which had already become a significant
competitor in the industry, a prohibition against cross-subsidization by an RBOC
of any alarm subsidiaries, a prohibition against any RBOCs accessing lists of
alarm company customers and an expedited complaint process. Consequently, RBOCs
could become significant competitors in the home security business in the near
future. However, BHS believes that the quality of its service compares favorably
with that provided by current competitors and that the Brink's name and
reputation will continue to provide an important competitive advantage
subsequent to the expiration of the five year waiting period.
EMPLOYEES
BHS has approximately 2,300 employees, none of whom is covered by a collective
bargaining agreement. BHS believes that its employee relations are satisfactory.
4
<PAGE>
PROPERTIES
BHS operates from 59 leased offices and warehouse facilities located throughout
the United States and two leased offices in Canada. All premises protected by
BHS alarm systems are monitored from the central monitoring station in Irving,
Texas. The central monitoring station was financed using a lease structure,
which provided for a seven-year lease term ending in 2005, inclusive of
renewals. This facility is also occupied by administrative, technical and
marketing services personnel who support branch operations. The lease for the
backup monitoring center in Carrollton, Texas, expires in 2002.
BHS retains ownership of nearly all of the approximately 643,300 systems
currently being monitored. When a current customer cancels the monitoring
service and does not move, it is BHS's policy to either temporarily disable the
system or remove the equipment, in either case fully reserving any remaining
book value of the equipment; retaining ownership helps prevent another alarm
company from providing services using BHS security equipment. On the other hand,
when a current customer cancels the monitoring service because of a move, the
retention of ownership of the equipment facilitates the marketing of the
monitoring service to the new homeowner. BHS leases all of the 1,104 vehicles
used for installation and servicing of its security systems.
BHS has two patents on its Model #2000 Control Panel and Keypad which expire in
2012 and 2018.
BAX GLOBAL
GENERAL
BAX Global is a transportation and supply chain management company offering
multi-modal freight forwarding to business-to-business shippers through a global
network. In North America, BAX Global is primarily engaged in overnight and
second day freight, and internationally it is engaged in time-definite air and
sea transportation, freight forwarding, supply chain management services and
international customs brokerage. In conducting its forwarding business, BAX
Global generally picks up or receives freight shipments from its customers,
consolidates the freight of various customers into shipments for common
destinations, arranges for the transportation of the consolidated freight to
such destinations (using either commercial carriers or, in the case of most of
its United States, Canadian and Mexican shipments, its own aircraft fleet and
hub sorting facility) and, at the destinations, distributes the consolidated
shipments and effects delivery to consignees. For international shipments, BAX
Global also frequently acts as customs broker, facilitating the clearance of
goods through customs at international points of entry. BAX Global provides
transportation customers with supply chain management services and operates
logistics warehouse and distribution facilities in key world markets.
BAX Global specializes in highly customized global freight forwarding and supply
chain management services. It concentrates on providing service to customers
with significant supply chain management needs, such as manufacturers of
computer and electronics equipment. BAX Global offers its customers a variety of
service and pricing alternatives for their shipments, such as guaranteed
overnight delivery, second-day delivery or deferred service in North America. A
variety of ancillary services, such as shipment tracking, inventory control and
management reports are also provided. Internationally, BAX Global offers a
similar variety of services including ocean forwarding, door-to-door delivery
and standard and expedited freight services.
BAX Global has the ability to provide freight service to all North American
business communities as well as to virtually all foreign countries through its
network of company-operated stations and agent locations in approximately 120
countries. The pickup and delivery of freight are accomplished principally by
independent contractors. BAX Global markets its services primarily through its
direct sales force and also employs other marketing methods, including print
media advertising and direct marketing campaigns.
BAX Global's freight business has tended to be seasonal, with a significantly
higher volume of shipments generally experienced during March, June and the
period August through December than during the other periods of the year. The
lowest volume of shipments has generally occurred in January and February.
Including United States export and import revenue, BAX Global's international
operations accounted for approximately 69% of its revenues in 1999. Intra-US
revenues accounted for 31% of total revenues in 1999.
BAX Global is continuing to develop import/export and supply chain management
business between shippers and consignees, in countries other than the United
States through BAX Global's network of company-operated stations and agent
locations. BAX Global has agents and sales representatives in many overseas
locations, although such agents and representatives are not subject to long-term
noncancellable contracts.
Because the financial results of BAX Global are reported in US dollars, they are
affected by changes in the value of the various foreign currencies in relation
to the US dollar. Changes in exchange rates may also adversely affect
transactions which are denominated in currencies other than the functional
currency. The diversity of foreign operations helps to mitigate a portion of the
impact that foreign currency fluctuations in any one country may have on the
translated results. BAX Global, from time to time, uses foreign currency forward
contracts to hedge certain transactional risks associated with foreign
currencies. BAX Global is also subject to other risks associated with doing
business in foreign countries, including labor and economic conditions,
political instability, controls on repatriation of earnings and capital,
nationalization, expropriation and other forms of restrictive action
5
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by local governments. The future effects of such risks, if any, on BAX Global
cannot be predicted.
BAX Global's computer system, ARGUS+7, is a satellite-based, worldwide
communications and information system which, among other things, provides
worldwide tracking and tracing of shipments and various data for management
information reports, enabling customers to improve efficiency and control costs.
BAX Global also utilizes an image processing system to centralize domestic
airbill and related document storage in BAX Global's computers for automated
retrieval by any BAX Global office.
AIRCRAFT OPERATIONS
On April 30, 1998, BAX Global acquired the privately held Air Transport
International LLC ("ATI"). ATI is a US-based freight and passenger airline which
operates a certificated fleet of DC-8 aircraft providing services to BAX Global,
the US Government Air Mobility Command, and other customers. ATI provides North
American lift service in the BAX Global system and domestic and international
lift service for the US Government Air Mobility Command and other charter
customers.
BAX Global, inclusive of the ATI fleet, utilizes a fleet of thirty-seven leased
or contracted and seven owned aircraft primarily providing regularly scheduled
service, throughout the United States and certain destinations in Canada and
Mexico, from its freight sorting hub in Toledo, Ohio. BAX Global's fleet is also
used for charters and to serve other international markets from time to time.
The fleet and hub are primarily dedicated to providing next-day service for
domestic, Canadian and Mexican air cargo customers. The following is a summary
of the BAX Global aircraft fleet as of December 31, 1999.
<TABLE>
<CAPTION>
Commercial Cargo Combi
System Configuration Total
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Leased or Contracted:
DC-8 19 4 23
727 14 - 14
- -------------------------------------------------------------------------------
Total Leased or Contracted 33 4 37
- -------------------------------------------------------------------------------
Owned:
DC-8 5 2 7
727 - - -
- -------------------------------------------------------------------------------
Total Owned: 5 2 7
- -------------------------------------------------------------------------------
Total Planes (a) 38 6 44
===============================================================================
</TABLE>
(a) Of the 38 planes in the commercial cargo system, 34 are fully dedicated to
BAX Global as opposed to other customers serviced by ATI.
The aircraft in Combi configuration (designed to carry cargo and passengers) are
utilized for US Government Air Mobility Command missions four of which are held
under leases for terms expiring between 2000 and early 2002. At December 31,
1999, BAX Global held sixteen DC-8s (including eleven DC8-71 aircraft) under
leases for terms primarily expiring between 2000 and 2003. Twelve 727 cargo
aircraft were under contract at December 31, 1999, for terms ranging between two
and three years. Three DC-8s and two 727s are held under short-term leases with
the option to renew daily or monthly. Based on the current state of the aircraft
leasing market, BAX Global believes that it should be able to renew these leases
or enter into new leases on terms reasonably comparable to those currently in
effect. The actual operation and routine maintenance of the aircraft owned or
held under long-term lease by BAX Global are performed by ATI.
The nightly lift capacity in operation at December 31, 1999, was approximately
2.1 million pounds, calculated on an average freight density of 7.5 pounds per
cubic foot. BAX Global's nightly lift capacity varies depending upon the number
and type of planes operated by BAX Global at any particular time. Including
trucking capacity available to BAX Global, the aggregate daily cargo capacity at
December 31, 1999, was approximately 2.9 million pounds.
For aircraft owned or held under long-term lease, BAX Global is generally
responsible for all the costs of operating and maintaining the aircraft,
including any special maintenance or modifications which may be required by
Federal Aviation Administration ("FAA") regulations or orders (see "Government
Regulation" below). In 1999, BAX Global had cash outlays totaling approximately
$53 million on routine heavy maintenance of its aircraft fleet.
The average airframe age of the fleet leased by BAX Global under leases with
terms longer than two years is 30 years, however, the condition of particular
aircraft is dependent on their maintenance history. Factors other than age, such
as cycles (numbers of takeoffs or landings) can have a significant impact on an
aircraft's serviceability. Generally, cargo aircraft tend to have fewer cycles
than passenger aircraft over comparable time periods because they have fewer
flights per day and longer flight segments.
Fuel costs are a significant element of the total costs of operating BAX
Global's aircraft fleet. For each one cent per gallon increase or decrease in
the price of jet fuel, BAX Global's airline operating costs may increase or
decrease approximately $75 thousand per month. In order to protect against price
increases in jet fuel, from time to time BAX Global enters into hedging and
other agreements, including swap contracts, options and collars.
6
<PAGE>
Fuel prices are subject to world, as well as local market conditions. It is not
possible to predict the impact of future conditions on fuel prices and fuel
availability. Competition in the airfreight industry is such that no assurance
can be given that any future increases in fuel costs (including taxes relating
thereto) will be recoverable in whole or in part from customers.
BAX Global has a lease expiring in April 2019, with the Toledo-Lucas County Port
Authority covering its freight sorting hub and related facilities (the "Hub") at
Toledo Express Airport in Ohio. The Hub consists of various facilities,
including a technologically advanced material handling system which is capable
of sorting approximately one million pounds of freight per hour.
CUSTOMERS
BAX Global's customer base includes thousands of industrial and commercial
shippers, both large and small. The industries they represent include the
automotive, aerospace, computer, electronics, fashion, retail and other
industries where rapid delivery of high-value products is required. In 1999, no
single customer accounted for more than 6% of BAX Global's total worldwide
revenues. BAX Global has one long-term, noncancellable contract with a major
airline.
COMPETITION
The air and ocean freight forwarding and supply chain management industries have
been and are expected to remain highly competitive. The principal competitive
factors in the market are price, the ability to provide consistently fast and
reliable delivery of shipments and the ability to provide ancillary services
such as warehousing, distribution, shipment tracking and sophisticated
information systems and reports. There is aggressive price competition in the
air freight market, particularly for the business of high volume shippers. BAX
Global competes with other integrated air freight companies that operate their
own aircraft, as well as with air freight forwarders, express delivery services,
passenger airlines and other transportation companies. Domestically, BAX Global
also competes with package delivery services provided by ground transportation
companies, including trucking firms and surface freight forwarders, that offer
specialized time specific services within limited geographical areas. As a
freight forwarder to, from and within international markets, BAX Global also
competes with government-owned or subsidized passenger airlines and ocean
shipping companies. In supply chain management services, BAX Global competes
with many third party logistics providers.
GOVERNMENT REGULATION
The air transportation industry is subject to Federal regulation under the
Federal Aviation Act of 1958, as amended, and pursuant to that statute, the
Department of Transportation ("DOT") may exercise regulatory authority over BAX
Global. ATI operates a FAA-certificated fleet which is subject to such
regulations. In addition, ATI is subject to FAA regulations since it is an
airline. BAX Global's Toledo, Ohio, hub operations are also subject to the
direction of the FAA.
Federal statutes authorize the FAA, with the assistance of the Environmental
Protection Agency ("EPA"), to establish aircraft noise standards. Under the
National Emissions Standards Acts of 1967, as amended by the Clean Air Act
Amendments of 1970, and the Airport Noise and Capacity Act of 1990 (the "Noise
Act"), the administrator of the EPA is authorized to issue regulations setting
forth standards for aircraft emissions. Although the Federal government
generally regulates aircraft noise, local airport operators may, under certain
circumstances, regulate airport operations based on aircraft noise
considerations.
The Noise Act required that aircraft not complying with Stage III noise limits
be phased out by December 31, 1999. In order to comply with the Noise Act
requirements, all aircraft not in compliance had to be modified, parked or out
of the country by December 31, 1999.
Thirty-seven of the 38 aircraft in BAX Global's cargo system fleet primarily
held under long-term leases or owned now comply with the Stage III limits. At
December 31, 1999, the one remaining aircraft was parked in storage awaiting
disposition, and was therefore in compliance with the Noise Act requirements.
All of the six planes in Combi configuration comply with the Stage III limits.
BAX Global is subject to other various requirements and regulations in
connection with the operation of its motor vehicles, including certain safety
regulations promulgated by DOT and state agencies.
EMPLOYEE RELATIONS
BAX Global and its subsidiaries have approximately 9,900 employees worldwide, of
whom about 1,400 are classified as part-time. Approximately 130 of these
employees (principally customer service, clerical and/or dock workers) in BAX
Global's stations at John F. Kennedy Airport, New York, Secaucus, New Jersey,
and Minneapolis, Minnesota are represented by labor unions, that in most cases
are affiliated with the International Brotherhood of Teamsters. ATI crew members
(Captains, First Officers and Flight Engineers) are represented by the
International Brotherhood of Teamsters and are in the process of
7
<PAGE>
negotiating their first contract. In 1999, the Toronto, Canada dock labor union
voted for decertification. BAX Global is currently negotiating with the clerical
union at John F. Kennedy Airport, as well as the dock union at Minneapolis,
Minnesota. BAX Global did not experience any significant strike or work stoppage
in 1999 and considers that its employee relations are satisfactory.
Substantially all of BAX Global's cartage operations are conducted by
independent contractors. Certain flight crews for its aircraft are employees of
the independent airline companies that operate such aircraft and certain flight
crews are employees of ATI.
PROPERTIES
BAX Global operates 264 (101 domestic and 163 international) stations with BAX
Global personnel, and has agency agreements at an additional 231 (49 domestic
and 182 international) stations. These stations are located near primary
shipping areas, generally at or near airports. BAX Global-operated domestic
stations, which generally include office space and warehousing facilities, are
located in 44 states, the District of Columbia and Puerto Rico. BAX
Global-operated international facilities are located in 32 countries. Most
stations serve not only the city in which they are located, but also nearby
cities and towns. Nearly all BAX Global-operated stations are held under lease.
The Hub in Toledo, Ohio, is held under a lease expiring in 2019, with rights of
renewal for three five-year periods. Other facilities, including the corporate
headquarters in Irvine, California, are held under leases having terms of one to
ten years.
BAX Global owns or leases, in the United States and Canada, a fleet of 44
automobiles as well as 152 vans and trucks utilized in station work or for
hauling freight between airport facilities and BAX Global's stations.
NATURAL RESOURCES
The Company's natural resources businesses consist of Coal Operations and Other
Operations.
COAL OPERATIONS
GENERAL
Coal Operations is primarily engaged in the mining, preparation and marketing of
coal, the purchase of coal for resale, and the sale or leasing of coal lands to
others. Through Coal Operations, the Company produces coal from approximately 15
company-operated surface and deep mines located in Virginia, West Virginia and
eastern Kentucky for consumption in the steam and metallurgical markets. Steam
coal is sold primarily to utilities and industrial customers located in the
eastern United States. Metallurgical coal is sold to steel and merchant coke
producers primarily located in the United States, Europe, the Mediterranean
basin, the Far East and Brazil. Prior to December 6, 1999, Coal Operations'
strategy was to continue to develop its business as a low-cost producer of low
sulphur steam coal and high-quality metallurgical coal. On December 6, 1999,
the Company announced its decision to exit the coal business through the sale
of the Company's coal mining operations and reserves.
Coal Operations operating results in 1999 include the impact of impairment and
other charges of $82.3 million. As previously reported, the Company engaged a
mining consulting firm to perform a comprehensive study (which was substantially
completed in the fourth quarter of 1999) of its coal resources. Such study
included a thorough evaluation of the quality, recoverability and economic
feasibility of all available reserves as well as a per ton estimate of residual
values for each property's reserves. The Company used the reserve study as a
basis for evaluating the expected future cash flows of its mining operations.
Furthermore, in light of the approval by the Board in December 1999 of a plan to
exit the coal business, the term of the cash flow projections was revised to
include an assumed exit date from the coal business.
The Company, in accordance with Statement of Financial Accounting Standards
("SFAS") No. 121 "Accounting for Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of", estimated the future cash flows expected to result from the use
of the assets until an assumed disposition date, along with a residual value for
such assets as of such date. For certain long-lived assets, the sum of such
expected future cash flows (undiscounted and without interest charges) was
estimated to be less than the carrying value primarily due to the fact that the
term for expected future cash flows was significantly reduced as a result of the
Company's decision to exit the coal business. As a result, the Company
determined that certain West Virginia operations and certain other coal
reserves, as well as a joint venture interest in a coal export facility, met the
criteria for impairment under SFAS No. 121 or APB Opinion No. 18, "The Equity
Method of Accounting for Investment in Common Stock." This impairment resulted
in a pretax charge of $73.7 million primarily impacting goodwill ($42.1 million)
a joint venture interest ($15.6 million) and coal lands and other assets ($16.0
million). In addition, the Company announced the closing in late December 1999
of its Meadow River mine in West Virginia, which resulted in an additional
charge of $8.6 million, $5.3 million of which related to the impairment of
long-lived assets and $3.3 million of which related to an accrual for other
closure costs. Of the total pretax charge of $82.3 million, $42.1 million
related to goodwill and was included in selling, general and administrative
expenses. The remaining $40.2 million was included in cost of sales and
operating expenses. Substantially all of the aforementioned charges were
non-cash.
8
<PAGE>
Coal Operations has substantial reserves of low sulphur coal, much of which can
be produced from lower cost surface mines. Moreover, it has a significant share
of the premium quality metallurgical coal reserves in the United States, along
with other high quality feed stock seams in demand by the coke and steel-making
industry.
Steam coal is sold primarily to domestic utility customers through long-term
contracts (contracts in excess of one year) that have the effect of moderating
the impact of short-term market conditions, thereby reducing one element of risk
in new or expanded projects. Most of the steam coal consumed in the United
States is used to generate electricity. Through November 1999, coal accounted
for approximately 56% of the electricity generated by the electric utility
industry. Coal Operations believes that it is well-positioned to take advantage
of any increased demand for low sulphur steam coal. Such increased demand could
result from factors such as regulatory requirements mandating lower emissions of
sulphur dioxide and utility deregulation which should favor coal as the lowest
cost energy source for power plants.
In contrast, the export market for metallurgical coal, for most of the past
fifteen years, has been characterized by a declining demand from primary steel
producers as costs increase to ensure environmental compliance, a move to
non-metallurgical coal in some applications and/or lower grade metallurgical
coal in coke for steel making, and intense competition from foreign coal
producers, especially those in Australia and Canada which benefited over this
period from a declining currency value versus the US dollar (coal sales
contracts are priced in US dollars). Coal Operations' 1997, 1998 and 1999
results suffered from a sharp weakening of the Australian dollar. Overseas
metallurgical coal sales contracts typically are subject to annual price
renegotiation, which increases the exposure to market forces. In response to
declining demand and prices for export metallurgical coal, Coal Operations has
placed major emphasis on increasing market share in domestic metallurgical
markets where realizations are substantially higher than export realizations.
PRODUCTION
The following table indicates the tonnage of coal purchased and produced by Coal
Operations for the years ended 1999, 1998 and 1997.
<TABLE>
<CAPTION>
Years Ended December 31
(In thousands of tons) 1999 1998 1997
- -------------------------------------------------------------------
<S> <C> <C> <C>
Produced (a) 10,620 12,852 16,646
Purchased 2,346 3,536 4,075
- -------------------------------------------------------------------
Total 12,966 16,388 20,721
===================================================================
</TABLE>
(a) Reduction from 1997 is primarily the result of the sale of certain assets of
the Elkay mining operation in April 1998.
SALES
The following table indicates the approximate tonnage of coal sold by Coal
Operations in the years ended December 31, 1999, 1998 and 1997 in the domestic
(United States and Canada) and export markets and by categories of customers:
<TABLE>
<CAPTION>
Years Ended December 31
(In thousands) 1999 1998 1997
- ------------------------------------------------------------------
<S> <C> <C> <C>
DOMESTIC:
Steel and coke producers 1,309 1,109 792
Utility, industrial and other 8,051 9,797 12,912
- ------------------------------------------------------------------
9,360 10,906 13,704
EXPORT:
Steel and coke producers 3,488 5,831 6,764
- ------------------------------------------------------------------
Total sold 12,848 16,737 20,468
===================================================================
</TABLE>
For the year ended December 31, 1999, Coal Operations sold approximately 12.8
million tons of coal, of which approximately 6.7 million tons were sold under
long-term contracts. In 1998, Coal Operations sold approximately 16.7 million
tons of coal, of which approximately 9.8 million tons were sold under long-term
contracts.
The following table provides year by year estimates of the tons of coal
committed for sale under long-term contracts at December 31, 1999:
<TABLE>
<CAPTION>
Thousands
Year of tons
- ----------------------------------------------------
<S> <C> <C>
2000 7,275
2001 6,763
2002 3,715
2003 1,575
2004 1,525
2005 1,450
2006 1,225
2007 925
- ------------------------------------------------------
Total 24,453
======================================================
</TABLE>
Contracts relating to a portion of this tonnage are subject to periodic price
renegotiation, which can result in termination by the purchaser or the seller
prior to contract expiration in case the parties should fail to agree upon
price.
During 1999, the ten largest domestic utility and industrial customers purchased
6.8 million tons of coal (53% of total coal sales and 73% of domestic utility
and industrial coal sales, by tonnage). The three largest domestic utility and
industrial customers purchased 4.6 million tons of coal for the year ended
9
<PAGE>
December 31, 1999 (36% of total coal sales and 49% of domestic coal sales, by
tonnage). The largest single customer, American Electric Power Company,
purchased 3.0 million tons of coal, accounting for 24% of total coal sales and
32% of domestic coal sales, by tonnage. In 1998, the ten largest domestic
utility and industrial customers purchased 8.3 million tons of coal (49% of
total coal sales and 76% of domestic coal sales, by tonnage). The three largest
domestic utility and industrial customers purchased 5.9 million tons of coal in
1998 (36% of total coal sales and 54% of domestic coal sales, by tonnage). In
1998, American Electric Power Company purchased 4.3 million tons of coal,
accounting for 26% of total coal sales and 39% of domestic coal sales, by
tonnage.
During 1999, the three largest domestic steel and coke producers purchased 1.2
million tons of coal (9% of total sales and 13% of total domestic sales, by
tonnage). The three largest domestic steel and coke producers purchased 1.0
million tons of coal in 1998 (6% of total coal sales and 9% of domestic sales,
by tonnage). As a result of increased marketing emphasis on domestic
metallurgical sales, domestic metallurgical sales represent 27% of total
metallurgical sales in 1999 compared to 16% in 1998 and 10% in 1997.
Of the 3.5 million tons of coal sold in the export market in 1999, the ten
largest customers accounted for 1.9 million tons (15% of total coal sales and
56% of export coal sales, by tonnage) and the three largest customers purchased
0.8 million tons (6% of total coal sales and 22% of export coal sales, by
tonnage). Of the 5.8 million tons of coal sold in the export market in 1998, the
ten largest customers accounted for 3.4 million tons (21% of total coal sales
and 59% of export coal sales, by tonnage) and the three largest customers
purchased 1.8 million tons (11% of total coal sales and 31% of export coal
sales, by tonnage). Export coal sales are made principally under annual
contracts or long-term contracts that are subject to annual price renegotiation.
Under these export contracts, the price for coal is expressed and paid in US
dollars.
Coal Operations competes in the domestic utility market with substantial
reserves of low sulphur, low ash and high BTU coals. Coal Operations' reserves
are accessible by multiple eastern railroads as well as barge loading
facilities. Production from many of Coal Operations' mines can be trucked to
coal preparation plants and rail loading facilities on either of the two major
eastern railroads. Phase II of the Clean Air Act caps sulphur dioxide emissions
for power plants at 1.20 pounds per million BTUs beginning January 1, 2000. As
utilities adapt to these new regulations, the demand for low sulphur coals could
create opportunities for Coal Operations' compliance and super compliance
products. An additional advantage is Coal Operations' low cost reserves which do
not require mountaintop removal.
Virtually all coal sales in the domestic utility market pursuant to long-term
contracts are subject to periodic price adjustments on the basis of provisions
which permit an increase or decrease in the price to reflect increases and
decreases in certain price indices. In certain cases, price adjustments are
permitted when there are changes in taxes other than income taxes, when the coal
is sold other than FOB the mine, and when there are changes in railroad and
barge freight rates. The provisions, however, are not identical in all of such
contracts, and the selling price of the coal does not necessarily reflect every
change in production and delivery costs incurred by the seller.
Metallurgical contracts are generally of one-year duration. The longest-term
metallurgical contract is valid through December 31, 2001. Contracts for the
sale of metallurgical coal in the domestic and export markets are generally
subject to price renegotiations on an annual basis. Coal Operations' sales of
metallurgical coal are diversified geographically on a worldwide basis.
Approximately 1.3 million tons, or 27% of metallurgical sales in 1999 were
domestic; 2.2 million tons, or 47%, were to the Europe/Mediterranean basin; 0.7
million tons, or 15%, were to Asia and 0.5 million tons, or 11%, were to Latin
America. Export contract negotiations for 2000, which typically occur in April,
are expected to be negatively impacted by the continued competitiveness of
foreign metallurgical coal producers caused in part by the relative strength of
the US dollar versus the currencies of those producers' countries especially in
Australia. As a result, export metallurgical sales in 2000 are expected to be
lower than those of 1999. Although export prices have deteriorated in recent
years, Coal Operations continues to maintain a presence in export metallurgical
coal markets with customers who find value in Coal Operations' exceptional
coking coal qualities. In the event export prices continue to decline to a point
where they intersect with high quality steam coal prices in domestic steam coal
markets, Coal Operations will transition additional tonnage from exports to
those geographic areas where higher realizations will maximize value. Geographic
areas where environmental concerns are present are possible sales outlets.
Coal Operations' intent is to sell more metallurgical coal in the domestic
market. This is in response to a declining demand and price for export
metallurgical coal. Coal Operations has placed major emphasis on increasing its
market share in the domestic metallurgical markets where realizations are
substantially higher than export realizations. The bulk of the domestic
metallurgical market is comprised of approximately a dozen integrated steel
companies which operate coke-making facilities. These facilities convert coal to
coke to support blast furnace operations. In addition, there are approximately a
half-dozen major merchant coke producers which augment the steel companies'
production with additional volumes of blast furnace coke. The North American
coke making industry is very competitive and therefore very quality conscious.
Domestic coking coal customers place heavy emphasis on coke blend stability.
While long term multi-year coal contracts are not generally industry practice
within the US coke facilities, US customers tend to be loyal to their suppliers
10
<PAGE>
as long as their coal is competitively priced and quality is maintained.
COMPETITION
The bituminous coal industry is highly competitive. Coal Operations competes
with many other large coal producers and with hundreds of small producers in the
United States and abroad.
In the export market, many foreign competitors, particularly Australian, South
African and Canadian coal producers, benefit from certain competitive advantages
existing in the countries in which they operate, such as less difficult mining
conditions, lower transportation costs, less severe government regulation and
lower labor and health benefit costs, as well as currencies which have generally
depreciated against the US dollar in recent years. The metallurgical coal
produced by Coal Operations is generally of higher quality, and is often used by
foreign steel producers to blend with coals from other sources to improve the
quality of coke and coke oven efficiency. However, in recent years, steel
producers have developed facilities and techniques that, to some extent, enable
them to accept lower quality metallurgical coal in their coke ovens. Moreover,
new technologies for steel production that utilize pulverized coal injection,
direct reduction iron and the electric arc furnace have reduced the demand for
all types of metallurgical coal. However, the use of lesser quality coals and
less coke in the blast furnace has increased the importance of coke strength and
the importance of premium quality coal in coke making.
Coal Operations competes domestically on the basis of the premium quality of its
coal, which is not only valuable in the making of steel but, because of low
sulphur and high heat content, is also an attractive source of fuel to the
electric utility and other coal burning industries. Other factors that affect
competition include the price, availability and public acceptance of alternative
energy sources (in particular, oil, natural gas, hydroelectric power and nuclear
power), as well as the impact of federal energy policies. Coal Operations is not
able to predict the effect, if any, on its business (especially with respect to
sales to domestic utilities) of particular price levels for such alternative
energy sources, especially oil and natural gas. However, any sustained and
marked decline in such prices could have a material adverse effect on such
business.
ENVIRONMENTAL MATTERS
The Surface Mining Control and Reclamation Act of 1977 and the regulations
promulgated thereunder ("SMCRA") by the Federal Office of Surface Mining
Reclamation and Enforcement ("OSM"), and the enforcement thereof by the US
Department of the Interior, establish mining and reclamation standards for all
aspects of surface mining as well as many aspects of deep mining. SMCRA also
imposes a tax of $0.35 on each ton of surface-mined coal and $0.15 on each ton
of deep-mined coal. OSM and its state counterparts monitor compliance with SMCRA
and its regulations by the issuance of "notices of violation" which direct the
mine operator to correct the cited conditions within a stated period of time.
Coal Operations' policy is to correct the conditions that are the subject of
these notices or to contest those believed to be without merit in appropriate
proceedings. As previously reported, Coal Operations has reached a broad
settlement with the OSM involving SMCRA liabilities of former contractors. Coal
Operations has also entered into a number of similar agreements with the states.
Under these agreements, Coal Operations agreed to perform certain reclamation
and to pay certain fees of former contractors. In return, the agencies agreed
not to deny or "block" permits to Coal Operations on account of the contractor
liabilities being settled. Coal Operations is in the process of successfully
completing all required work under these agreements.
A controversy related to a method of mining called "mountaintop removal" that
began in mid-1998 in West Virginia involving an unrelated party resulted in a
suspension in the issuance of several mining permits for a portion of 1999.
Although the suspension has been lifted, there has been a delay in Vandalia
Resources, Inc., a wholly-owned subsidiary of Pittston Coal ("Vandalia"), being
issued in a timely fashion, a mine permit necessary for its uninterrupted
mining. Vandalia is actively pursuing the issuance of the permit, but when, or
if, the permit will be issued is currently unknown. In light of the inability to
determine when, and if a permit will be issued, the effect of the delay in
obtaining this permit cannot be predicted. Since Vandalia's permits have not
been issued, Vandalia has altered its operating plan to include the activation
of the previously permitted Big Creek #2 Surface Mine property in Fayette
County, West Virginia. Vandalia and other affected parties in West Virginia are
currently exploring all legal and legislative remedies that may be available to
resolve this matter. If the outstanding permits are not issued prior to the end
of March 2000, then additional job and marketable production losses will likely
occur.
Coal Operations is subject to various federal environmental laws, including the
Clean Water Act, the Clean Air Act and the Safe Drinking Water Act, as well as
state laws of similar scope in Virginia, West Virginia, Kentucky and Ohio. These
laws require approval of many aspects of coal mining operations, and both
federal and state inspectors regularly visit Coal Operations' mines and other
facilities to assure compliance.
While it is not possible to quantify the costs of compliance with all applicable
federal and state laws, those costs have been and are expected to continue to be
significant. In that connection, Coal Operations made capital expenditures for
environmental control facilities of approximately $1.1 million in 1999 and
estimates expenditures of $1.1 million in 2000. Compliance with these laws has
substantially increased the cost of coal mining, but is, in general, a cost
common to all domestic coal producers. The Company believes that the competitive
position of Coal Operations has not been and should not be adversely affected
except in the export market where Coal Operations competes with various foreign
producers not subject to regulations present in the US.
11
<PAGE>
Federal, state and local authorities strictly monitor the sulphur dioxide and
particulate emissions from electric power plants served by Coal Operations. In
1990, Congress enacted the Clean Air Act Amendments of 1990, that, among other
things, permit utilities to use low sulphur coals in lieu of constructing
expensive sulphur dioxide removal systems. The Company believes this should have
a favorable impact on the marketability of Coal Operations' extensive reserves
of low sulphur coals. However, the Company cannot predict at this time the
timing or extent of such favorable impact.
MINE HEALTH AND SAFETY LAWS
The coal operating companies included within Coal Operations are generally
liable under federal laws requiring payment of benefits to coal miners with
pneumoconiosis ("black lung"). Further, the Coal Operations' subsidiaries are
subject to the federal black lung excise tax ("FBLET") on domestic coal sales
imposed by the Black Lung Benefits Revenue Act of 1977 and the Black Lung
Benefits Reform Act of 1977, as amended by the Black Lung Benefits and Revenue
Amendments Act of 1981, the Consolidated Omnibus Budget Reconciliation Act of
1985 and the Omnibus Budget Reconciliation Act of 1987. The FBLET currently is
levied on domestic coal sales in an amount equal to $1.10 per ton for deep-mined
coal and $0.55 per ton for surface-mined coal, but not to exceed 4.4% of the
sales price. The Company cannot predict whether any future legislation affecting
changes in the tax will be enacted. On December 28, 1998, the US District Court
for the Eastern District of Virginia (the "Court") found the FBLET imposed under
section 4121 of the Internal Revenue Code, as assessed against export coal
sales, to be unconstitutional. On February 10, 1999, the Court entered a final
judgment in favor of certain of Coal Operations' subsidiaries, ordering a refund
to the subsidiaries of approximately $0.7 million (plus interest) for the FBLET
that those companies paid for the quarter ended March 31, 1997. The government
did not appeal the judgment. A refund of $0.8 million (including interest) was
received in July, 1999. The Company is seeking additional refunds of the FBLET
it paid on export coal sales for all open statutory periods. The ultimate
amounts and timing of such refunds, if any, cannot be determined at the present
time. As a result of the Court judgment, Coal Operations is no longer required
to pay the tax on exported coal sales.
Stringent safety and health standards have been imposed by federal legislation
since 1969 when the Federal Coal Mine Health and Safety Act was adopted, which
resulted in increased operating costs and reduced productivity. The Federal Mine
Safety and Health Act of 1977 significantly expanded the enforcement of health
and safety standards.
Compliance with health and safety laws is, in general, a cost common to all
domestic coal producers. The Company believes that the competitive position of
Coal Operations has not been and should not be adversely affected except in the
export market where Coal Operations competes with various foreign producers
subject to less stringent health and safety regulations.
EMPLOYEE RELATIONS
At December 31, 1999, approximately 360 of the approximately 1,500 employees of
Coal Operations were members of the United Mine Workers of America ("UMWA"). The
remainder of such employees are either unrepresented hourly employees or
supervisory personnel. During the fourth quarter of 1998, certain of Coal
Operations companies and the UMWA agreed to a five year wage contract. The
agreement covers approximately 250 employees and became effective January 1,
1999. Since 1990, no significant labor disruptions involving UMWA-represented
employees have occurred. Coal Operations believes that its employee relations
are satisfactory.
HEALTH BENEFIT ACT
In October 1992, the Coal Industry Retiree Health Benefit Act of 1992 (the
"Health Benefit Act") was enacted as part of the Energy Policy Act of 1992. The
Health Benefit Act established rules for the payment of future health care
benefits for thousands of retired union mine workers and their dependents. The
Health Benefit Act established a trust fund to which "signatory operators" and
"related persons," including the Company and certain of its subsidiaries
(collectively, the "Pittston Companies"), are jointly and severally liable to
pay annual premiums for assigned beneficiaries, together with a pro rata share
for certain beneficiaries who never worked for such employers ("unassigned
beneficiaries"), including, in the Company's case, the Pittston Companies, in
amounts determined on the basis set forth in the Health Benefit Act. In October
1993 and at various times in subsequent years, the Pittston Companies have
received notices from the Social Security Administration (the "SSA") with regard
to the assigned beneficiaries for which the Pittston Companies are responsible
under the Health Benefit Act. For 1999, 1998 and 1997, these amounts on a pretax
basis were approximately $10.4 million, $9.6 million and $9.3 million,
respectively. As a result of legal developments in 1998 involving the Health
Benefit Act, the Company experienced an increase in its assessments under the
Health Benefit Act for the twelve month period beginning October 1, 1998,
approximating $1.7 million, $1.1 million of which relates to retroactive
assessments for years prior to 1998. This increase consisted of charges for
death benefits which are provided for by the Health Benefit Act, but which
previously had been covered by other funding sources. As with all of the
Company's Health Benefit Act assessments, this amount was paid in 12 equal
monthly installments over the plan year that began October 1, 1998. The Company
is unable to determine at this time whether any other additional amounts will
apply in future plan years.
The Company currently estimates that the annual cash funding under the Health
Benefit Act for the Pittston Companies' assigned beneficiaries will continue at
the same annual level for the next several years and should begin to decline
thereafter as the number of such beneficiaries decreases. Based on the number of
beneficiaries actually assigned by the SSA, the Company estimates the aggregate
pretax liability relating to the Pittston Companies' beneficiaries at December
31, 1999 to be approximately $154 million, which when discounted at 7.5%
provides a present value estimate of approximately $78 million.
12
<PAGE>
The reduction in the present value estimate from approximately $99 million as of
December 31, 1998 to approximately $78 million as of December 31, 1999 reflected
a change in certain actuarial assumptions to reflect actual experience and, to a
lesser extent, a change in the discount rate. The Company accounts for the
obligations under the Health Benefit Act as a participant in a multi-employer
plan and the annual cost is recognized on a pay-as-you-go basis.
In addition, under the Health Benefit Act, the Pittston Companies are jointly
and severally liable for certain post-retirement health benefits for thousands
of retired union mine workers and their dependents. Substantially all of the
Company's accumulated postretirement benefit obligations as of December 31, 1999
for retirees of $283.2 million relates to such retired workers and their
beneficiaries.
The ultimate obligation that will be incurred by the Company could be
significantly affected by, among other things, increased medical costs,
decreased number of beneficiaries, governmental funding arrangements, and such
federal health benefit legislation of general application as may be enacted. In
addition, the Health Benefit Act requires the Pittston Companies to fund, pro
rata according to the total number of assigned beneficiaries, a portion of the
health benefits for unassigned beneficiaries. At this time, the funding for such
health benefits is being provided from another source and for this and other
reasons the Pittston Companies' ultimate obligation for the unassigned
beneficiaries cannot be determined.
The Company has established a Voluntary Employees' Beneficiary Association
("VEBA") in order to tax efficiently fund certain retiree medical liabilities
primarily for retired coal miners and their dependents. While anticipated
proceeds from the planned sales of the coal business will provide funding for
the VEBA, additional funding from operations may be required over time. The
Company contributed $15 million to the VEBA in December 1999.
PROPERTIES
The principal properties of Coal Operations are coal reserves, coal mines and
coal preparation plants, all of which are located in Virginia, West Virginia and
eastern Kentucky. Such reserves are either owned or leased. Leases of land or
coal mining rights generally are either for a long-term period or until
exhaustion of the reserves, and require the payment of a royalty based generally
on the sales price and/or tonnage of coal mined from a particular property. Many
leases or rights provide for payment of minimum royalties.
Coal Operations' estimated proven and probable surface mining, deep mining and
total coal reserves as of December 31, 1999 were 69 million, 300 million and 369
million tons, respectively. Such estimates represent economically recoverable
and minable tonnage and include allowances for extraction and processing.
As previously reported, the Company engaged a mining consulting firm to perform
a comprehensive study (which was substantially completed in the fourth quarter
of 1999) of its coal resources. Such study included a thorough evaluation of the
quality, recoverability and economic feasibility of all available reserves. The
change in total reserves over 1998 levels is primarily attributable to this
comprehensive reserve study.
Of the 369 million tons of proven and probable coal reserves as of year-end
1999, approximately 66% has a sulphur content of less than 1% (which is
generally regarded in the industry as low sulphur coal) and approximately 34%
has a sulphur content greater than 1%. Approximately 29% of total proven and
probable reserves consist of metallurgical grade coal.
As of December 31, 1999, Coal Operations controlled approximately 523 million
tons of additional coal deposits in the eastern United States, and approximately
269 million tons of low sulphur coal deposits in Sheridan County, Wyoming which
cannot be expected to be economically recovered without market improvement
and/or the application of new technologies.
Coal Operations owns a 32.5% interest in Dominion Terminal Associates ("DTA"),
which leases and operates a ground storage-to-vessel coal transloading facility
in Newport News, Virginia. DTA has a throughput capacity of 22.0 million tons of
coal per year and ground storage capacity of 2.0 million tons. A portion of Coal
Operations' share of the throughput and ground storage capacity of the DTA
facility is subject to user rights of third parties which pay Coal Operations a
fee. The DTA facility serves export customers, as well as domestic coal users
located on the eastern seaboard of the United States. For information relating
to the financing arrangements and a 1999 impairment charge for DTA, see page 50
of the 1999 Annual Report which is incorporated herein by reference.
OTHER OPERATIONS
Other Operations consists of Pittston Coal's timber and natural gas businesses
(collectively, "Allied Operations") and Mineral Ventures that mines and explores
for gold. Through its Allied Operations, the Company owns non-coal properties,
such as land, hardwood forests and natural gas reserves. The oil and gas rights
are managed by an indirect wholly owned subsidiary of Coal Operations that, in
general, invests in and receives royalty income from gas development and
operations. As of December
13
<PAGE>
31, 1999, including royalty interests, net proven developed natural gas reserves
located in Virginia and West Virginia approximated 37.5 Bcf. Allied Operation's
wood products subsidiary receives income from the sale of timber, the operation
of a high grade sawmill that produces 7 million board feet annually, and the
operation of a hardwood chip mill that produces 250 thousand tons annually of
hardwood chips for the pulp and paper industry. The Company owns approximately
225 thousand surface acres of land that includes approximately 125 thousand
acres of saw timber grade hardwood forests, mostly in Virginia, comprising
approximately 435 million board feet. In addition, a railroad tie mill is
currently under development.
Mineral Ventures' business is directed at locating and acquiring mineral assets,
advanced stage projects and operating mines. Mineral Ventures continues to
evaluate gold projects in North America and Australia. An exploration office
operates from Reno, Nevada to coordinate Mineral Ventures' continuing
exploration program in the Western United States. In 1999, Mineral Ventures
expended approximately $4.8 million on all such programs.
Mineral Ventures has a 50% direct interest in the Stawell gold mine ("Stawell")
located in Western Victoria, Australia. The remaining 50% interest in Stawell is
owned by Mining Project Investors ("MPI"). In addition, Mineral Ventures has a
45.1% undiluted (40.1% fully diluted) ownership interest in its joint venture
partner MPI. The Stawell gold mine produced approximately 94,400 ounces of gold
in 1999. Mineral Ventures estimates that on December 31, 1999, the Stawell gold
mine had approximately 420,000 ounces of proven and probable gold reserves.
A substantial portion of Mineral Ventures' financial results is derived from
activities in Australia, which has a local currency other than the US dollar.
Because the financial results of Mineral Ventures are reported in US dollars,
they are affected by the changes in the value of the foreign currency in
relation to the US dollar. Rate fluctuations may adversely affect transactions
which are denominated in the Australian dollar. Mineral Ventures, from time to
time, uses foreign currency forward contracts to hedge the currency risks
associated with these transactions. Mineral Ventures also routinely enters into
gold price hedge transactions primarily utilizing spot deferred forward sales
contracts limited in amount to potential gold production over a given period.
Mineral Ventures is also subject to other risks customarily associated with
doing business in foreign countries, including labor and economic conditions.
MATTERS RELATING TO FORMER OPERATIONS
In April 1990, the Company entered into a settlement agreement to resolve
certain environmental claims against the Company arising from hydrocarbon
contamination at a petroleum terminal facility ("Tankport") in Jersey City, New
Jersey, which operations were sold in 1983. Under the settlement agreement, the
Company is obligated to pay for 80% of the remediation costs. Based on data
available to the Company and its environmental consultants, the Company
estimates its portion of the cleanup costs, on an undiscounted basis, using
existing technologies to be between $6.6 million and $11.2 million and to be
incurred in the future. Management is unable to determine that any amount within
that range is a better estimate due to a variety of uncertainties, which include
the extent of the contamination at the site, the permitted technologies for
remediation and the regulatory standards by which the clean-up will be
conducted. The estimate of costs and the timing of payments could change as a
result of changes to the remediation plan required, changes in the technology
available to treat the site, unforeseen circumstances existing at the site and
additional cost inflation.
The Company commenced insurance coverage litigation in 1990, in the United
States District Court for the District of New Jersey, seeking a declaratory
judgment that all amounts payable by the Company pursuant to the Tankport
obligation were reimbursable under comprehensive general liability and pollution
liability policies maintained by the Company. The Company was able to conclude
settlement with all of its insurers without a trial. Taking into account the
proceeds from the settlement with its insurers, it is the Company's belief that
the ultimate amount that it would be liable for related to the remediation of
the Tankport site will not have a significant adverse impact on the Company's
results of operations or financial position.
14
<PAGE>
- -------------------------------------------------------------------------------
ITEM 3. LEGAL PROCEEDINGS
- -------------------------------------------------------------------------------
Not applicable.
ITEM 4. SUBMISSION OF MATTER TO A VOTE OF SECURITY HOLDERS
- -------------------------------------------------------------------------------
Not applicable.
15
<PAGE>
The Pittston Company and Subsidiaries
EXECUTIVE OFFICERS OF THE REGISTRANT
The following is a list as of March 15, 1999, of the names and ages of the
executive and other officers of Pittston and the names and ages of certain
officers of its subsidiaries, indicating the principal positions and offices
held by each. There is no family relationship between any of the officers named.
<TABLE>
<CAPTION>
Name Age Positions and Offices Held Held Since
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
EXECUTIVE OFFICERS:
Michael T. Dan 49 President and Chief Executive Officer 1998
Chairman of the Board 1999
James B. Hartough 52 Vice President-Corporate Finance and Treasurer 1988
Frank T. Lennon 58 Vice President-Human Resources and Administration 1985
Austin F. Reed 48 Vice President-General Counsel and Secretary 1994
Robert T. Ritter 48 Vice President and Chief Financial Officer 1998
OTHER OFFICERS:
Amanda N. Aghdami 31 Controller 1997
Jonathan M. Sturman 57 Vice President-Corporate Development 1995
Arthur E. Wheatley 57 Vice President and Director of Risk Management 1988
SUBSIDIARY OFFICERS:
C. Robert Campbell 55 President and Chief Executive Officer of BAX Global Inc. 1998
Thomas W. Garges, Jr. 60 President and Chief Executive Officer of Pittston Coal Company 1999
Mark T. Gritton 50 President and Chief Operating Officer of Brink's, Incorporated 1998
Peter A. Michel 57 President and Chief Executive Officer of Brink's Home Security, Inc. 1988
==================================================================================================================================
</TABLE>
Executive and other officers of Pittston are elected annually and serve at the
pleasure of its Board of Directors.
Mr. Dan was elected President, Chief Executive Officer and Director of The
Pittston Company on February 6, 1998 and was elected Chairman of the Board
effective January 1, 1999. He also serves as Chief Executive Officer of Brink's
Incorporated, a position he has held since July 1993 and as President and Chief
Executive Officer of Brink's Holding Company, a position he has held since
December 31, 1995. He also serves as Chairman of the Board of BAX Global Inc., a
position he has held since February 1998. He also serves as Chairman of the
Board of Pittston Mineral Ventures, a position he has held since August 31, 1998
and as Chairman of the Board of Pittston Coal Company, a position he has held
since September 1, 1998. From August 1992 to July 1993 he served as President of
North American operations of Brink's, Incorporated and as Executive Vice
President of Brink's, Incorporated from 1985 to 1992.
Mr. Ritter joined The Pittston Company as Vice President and Chief Financial
Officer in August of 1998. Prior thereto, he served as Chief Financial Officer
of WLR Foods, Inc. from June 1996 to July 1998. From April 1995 to May 1996, he
was a private investor and financial consultant and was Treasurer at American
Cyanamid Company from March 1991 to January 1994 and Controller from February
1994 to March 1995.
Messrs. Hartough, Lennon, Reed, Sturman and Wheatley have served in their
present positions for more than the past five years.
Ms. Aghdami was elected to her current position on November 7, 1997. She joined
The Pittston Company in September 1996 as Manager of Financial Reporting. Prior
to September 1996, she was Audit Manager with Ernst & Young LLP.
Mr. Campbell joined BAX Global Inc. in June 1998 as President and Chief
Executive Officer. Before joining BAX Global, he served as Executive Vice
President for Advantica Restaurant Group, Inc. from 1995 to June 1998. From 1991
to 1995 he served as Executive Vice President at Ryder System Inc.
Mr. Gritton was elected President and Chief Operating Officer in December 1998
after joining Brink's, Inc. in July 1997 as Executive Vice President of Brink's
US Operations. Before joining Brink's, he worked at Deluxe Corporation where he
served as president of its financial services group division.
Mr. Garges joined Pittston Coal Company on January 4, 1999 as President and
Chief Executive Officer. Before joining Pittston Coal, he served as President
and Chief Executive Officer of Rochester and Pittsburgh Coal Company. From 1971
to 1986, he was Executive Vice President - Operations for Pittston Coal and
President of Pittston Coal's Pyxis operations.
Mr. Michel was elected President and Chief Executive Officer of Brink's Home
Security, Inc. in April 1988. From 1985 to 1987, he served as President and
Chief Executive Officer of Penn Central Technical Security Co.
16
<PAGE>
- -------------------------------------------------------------------------------
PART II
- -------------------------------------------------------------------------------
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS
- -------------------------------------------------------------------------------
Prior to January 14, 2000, the Company was comprised of three groups - Pittston
Brink's Group, Pittston BAX Group, and Pittston Minerals Group. The Pittston
Brink's Group included the Brink's and BHS operations of the Company. The
Pittston BAX Group included the BAX Global operations of the Company. The
Pittston Minerals Group included the Pittston Coal Company and Mineral Ventures
operations of the Company. Also, prior to January 14, 2000, the Company had
three classes of common stock: Pittston Brink's Group Common Stock ("Brink's
Stock"), Pittston BAX Group Common Stock ("BAX Stock") and Pittston Minerals
Group Common Stock ("Minerals Stock"), which were designed to provide
shareholders with separate securities reflecting the performance of the Brink's
Group, the BAX Group and the Minerals Group, respectively.
On December 6, 1999, the Company announced that its Board of Directors approved
the elimination of the tracking stock capital structure by an exchange of all
outstanding shares of Minerals Stock and BAX Stock for shares of Brink's Stock
(the "Exchange"). The Exchange took place on January 14, 2000 (the "Exchange
Date"). On the Exchange Date, holders of Minerals Stock received 0.0817 shares
of Brink's Stock for each share of their Minerals Stock; and holders of BAX
Stock received 0.4848 shares of Brink's Stock for each share of their BAX Stock.
See Note 10 to the Company's consolidated financial statements for additional
information concerning the Exchange on pages 48 through 49 of the Company's 1999
Annual Report, which are incorporated herein by reference. From and after the
Exchange Date, Brink's Stock is the only outstanding class of common stock of
the Company and continues to trade on the New York Stock Exchange under the
symbol "PZB". Prior to the Exchange Date, the Brink's Stock reflected the
performance of the Brink's Group only; after the Exchange Date, the Brink's
Stock reflects the performance of the Company as a whole. Shares of Brink's
Stock after the Exchange are hereinafter referred to as "Pittston Common Stock".
Reference is made to page 59 of the Company's 1999 Annual Report which is
incorporated herein by reference, for information required by this item.
ITEM 6. SELECTED FINANCIAL DATA
- -------------------------------------------------------------------------------
Reference is made to page 2 of the Company's 1999 Annual Report which is
incorporated herein by reference, for information required by this item.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITIONS
- -------------------------------------------------------------------------------
Reference is made to pages 9 through 25 of the Company's 1999 Annual Report
which is incorporated herein by reference, for information required by this
item.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
- -------------------------------------------------------------------------------
The information regarding quantitative and qualitative disclosures about market
risk is included in this report under Item 7.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
- -------------------------------------------------------------------------------
Reference is made to pages 27 through 58 of the Company's 1999 Annual Report
which is incorporated herein by reference, for information required by this
item.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
- -------------------------------------------------------------------------------
Not applicable.
17
<PAGE>
- -------------------------------------------------------------------------------
PART III
- -------------------------------------------------------------------------------
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
- -------------------------------------------------------------------------------
The information required by this Item regarding directors is incorporated by
reference to the Company's definitive proxy statement to be filed pursuant to
Regulation 14A within 120 days after December 31, 1999. The information
regarding executive officers is included in this report following Item 4, under
the caption "Executive Officers of the Registrant."
ITEM 11. EXECUTIVE COMPENSATION
- -------------------------------------------------------------------------------
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
- -------------------------------------------------------------------------------
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- -------------------------------------------------------------------------------
The information required by Items 11 through 13 is incorporated by reference to
the Company's definitive proxy statement to be filed pursuant to Regulation 14A
within 120 days after December 31, 1999.
- -------------------------------------------------------------------------------
PART IV
- -------------------------------------------------------------------------------
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) 1. All financial statements - see index to financial
statements and schedules.
2. Financial statement schedules - see index to
financial statements and schedules.
3. Exhibits - see exhibit index.
(b) Reports on Form 8-K were filed on (i) December 6, 1999 with respect to the
Company's announcement to exit the coal business and eliminate its
tracking stock structure, and (ii) December 7, 1999 with respect to a
meeting with members of the investment community to discuss the Company's
announcement.
UNDERTAKING
For the purposes of complying with the amendments to the rules governing Form
S-8 (effective July 13, 1990) under the Securities Act of 1933, the undersigned
Registrant hereby undertakes as follows, which undertaking shall be incorporated
by reference into Registrant's Registration Statements on Form S-8 Nos. 2-64258,
33-2039, 33-21393, 33-23333, 33-69040, 33-53565, 333-02219, 333-78631 and
333-78633.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
of 1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against liabilities (other than the payment by the Registrant of
expenses incurred or paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
18
<PAGE>
The Pittston Company and Subsidiaries
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, on March 10, 2000.
The Pittston Company
-----------------------------
(Registrant)
By M. T. Dan
--------------------------
(M. T. Dan,
Chairman, President and
Chief Executive Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities indicated, on March 10, 2000.
<TABLE>
<CAPTION>
Signatures Title
-------------- -------------
<S> <C>
R. G. Ackerman* Director
Betty C. Alewine* Director
J. R. Barker* Director
Marc C. Breslawsky* Director
J. L. Broadhead* Director
W. F. Craig* Director
M. T. Dan Chairman, President and
- ----------------------- Chief Executive Officer
(M. T. Dan) (principal executive officer)
G. Grinstein* Director
R. M. Gross* Director
R. T. Ritter Vice President
- ----------------------- and Chief Financial Officer
(R. T. Ritter) (principal accounting officer)
C. S. Sloane* Director
R. H. Spilman* Director
*By M. T. Dan
-------------------------------
(M. T. Dan, Attorney-in-Fact)
</TABLE>
19
<PAGE>
The Pittston Company and Subsidiaries
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
FINANCIAL STATEMENTS:
The consolidated financial statements of The Pittston Company, listed in the
index below which are included in the Company's 1999 Annual Report for the year
ended December 31, 1999, are incorporated herein by reference. With the
exception of the pages listed in the index below and the information
incorporated by reference included in Parts I, II and IV, the 1999 Annual Report
of the Shareholders is not deemed filed as part of this report.
PITTSTON ANNUAL REPORT
<TABLE>
<S> <C>
Selected Financial Data ..............................2
Management's Discussion and Analysis of Results of
Operations and Financial Condition..............9-25
Independent Auditors' Report.........................27
Consolidated Balance Sheets..........................28
Consolidated Statements of Operations................29
Consolidated Statements of Shareholders' Equity......30
Consolidated Statements of Cash Flows................31
Notes to Consolidated Financial Statements...........32
</TABLE>
FINANCIAL STATEMENT SCHEDULES:
Schedules are omitted because they are not material, not applicable or not
required, or the information is included elsewhere in the financial statements.
20
<PAGE>
The Pittston Company and Subsidiaries
EXHIBIT INDEX
Each Exhibit listed previously filed document is hereby incorporated by
reference to such document.
EXHIBIT
NUMBER DESCRIPTION
2(i) Membership Interest Acquisition Agreement Among
Air Transport International LLC and BAX Global Inc.,
dated February 3, 1998. Exhibit 2 to the Registrant's
Current Report on Form 8K filed May 14, 1998.
2(ii) Share Purchase Agreement, dated as of January 27,
1998, between Brink's Security International, Inc.,
acting as Purchaser, and Generale de Transport et
D'Industrie, acting as Seller. Exhibit 10(v) to the 1998
Form 10-K.
2(iii) Shareholders' Agreement, dated as of January 10,
1997, between Brink's Security International, Inc., and
Valores Tamanaco, C.A. Exhibit 10(w) to the 1998
Form 10-K.
3(ii) The Registrant's Bylaws, as amended through March
9, 2000.
4(a) (i) Amended and Restated Rights Agreement dated as
of January 14, 2000 (the "Rights Agreement"),
between the Registrant and Bank Boston, N.A.,
as Rights Agent.
(ii) Form of Right Certificate for Rights.
Instruments defining the rights of holders of long-term debt of the
Registrant and its consolidated subsidiaries have been omitted because
the amount of debt under any such instrument does not exceed 10% of
the total assets of the Registrant and its consolidated subsidiaries.
The Registrant agrees to furnish a copy of any such instrument to the
Commission upon request.
10(a)* The Key Employees' Incentive Plan, as amended.
Exhibit 10(a) to the Registrant's Annual Report on
Form 10-K for the year ended December 31, 1998.
10(b)* The Key Employees' Deferred Compensation
Program, as amended and restated as of January 14,
2000.
10(c)* (i) The Registrant's Pension Equalization Plan as amended. Exhibit
10(e)(I) to the Registrant's Annual Report on Form 10-K for the
year ended December 31, 1997 (the "1997 Form 10-K").
(ii) Amended and Restated Trust Agreement, dated December 1, 1997,
between Registrant and Chase Manhattan Bank, as Trustee (the
"Trust Agreement"). Exhibit 10(e)(ii) to the 1997 Form 10-K.
(iii) Amendment No. 1 to Trust Agreement, dated
as of August 18, 1999.
(iv) Trust Agreement under the Pension Equalization Plan, Retirement
Plan for Non-Employee Directors and Certain Contractual
Arrangements of The Pittston Company made as of September 16,
1994, by and between the Registrant and Chase Manhattan Bank
(National Association), as Trustee. Exhibit 10(l) to the
Registrant's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1994 (the "Third Quarter 1994 Form 10-Q").
(v) Form of letter agreement dated as of September 16, 1994, between
the Registrant and one of its officers. Exhibit 10(e) to the
Third quarter 1994 Form 10-Q.
(vi) Form of letter agreement dated as of
September 16, 1994, between the Registrant and Participants
pursuant to the Pension Equalization Plan. Exhibit 10(f) to the
Third Quarter 1994 Form 10-Q.
10(d)* The Registrant's Executive Salary Continuation Plan. Exhibit 10(e) to
the Registrant's Annual Report on Form 10-K for the year ended
December 31, 1991.
10(e)* The Registrant's Non-Employee Directors' Stock Option Plan, as amended
and restated as of January 14, 2000.
10(f)* The Registrant's 1988 Stock Option Plan, as amended and restated as
of January 14, 2000.
10(g)* The Pittston Company Management Performance Improvement Plan.
10(h)* Form of change in control agreement replacing all prior change in
control agreements and amendments and modifications thereto, between the
Registrant (or a subsidiary) and various officers of the Registrant.
Exhibit 10(l)(ii) to the 1997 Form 10-K.
10(i)* Form of Indemnification Agreement entered into by the Registrant
with its directors and officers. Exhibit 10(l) to the 1991 Form 10-K.
21
<PAGE>
10(j)* (i) Registrant's Retirement Plan for Non-
Employee Directors, as amended. Exhibit
10(g) to the Third Quarter 1994 Form 10-Q.
(ii) Form of letter agreement dated as of
September 16, 1994, between the Registrant and its Non-Employee
Directors pursuant to Retirement Plan for Non-Employee
Directors. Exhibit 10(h) to the Third Quarter 1994 Form 10-Q.
10(k)* (i) Form of severance agreement between the
Registrant (or a subsidiary) and various of the
Registrant's officers. Exhibit 10(o)(ii) to the
1997 Form 10-K.
10(l)* Registrant's Directors' Stock Accumulation Plan, as
amended and restated as of January 14, 2000.
10(m)* Registrant's Amended and Restated Plan for Deferral
of Directors' Fees. Exhibit 10(o) to the Registrant's
Annual Report on Form 10-K for the year ended December 31, 1989.
10(n) (i) Lease dated as of April 1, 1989, between Toledo-Lucas
County Port Authority (the "Authority"), as Lessor, and
Burlington, as Lessee. Exhibit 10(i) to the Registrant's
Quarterly Report on Form 10-Q for the quarter ended
June 30, 1989 (the "Second Quarter 1989 Form 10-Q").
(ii) Lease Guaranty Agreement dated as of April
1, 1989, between Burlington (formerly
Burlington Air Express Management Inc.), as
Guarantor, and the Authority. Exhibit 10(ii) to
the Second Quarter 1989 Form 10-Q.
(iii) Trust Indenture dated as of April 1, 1989
between the Authority and Society Bank &
Trust (formerly, Trustcorp. Bank, Ohio) (the
"Trustee"), as Trustee. Exhibit 10(iii) to the
Second Quarter 1989 Form 10-Q.
(iv) Assignment of Basic Rent and Rights Under a
Lease and Lease Guaranty dated as of April 1,
1989 from the Authority to the Trustee. Exhibit
10(iv) to the Second Quarter 1989 Form 10-Q.
(v) Open-End First Leasehold Mortgage and
Security Agreement dated as of April 1, 1989
from the Authority to the Trustee. Exhibit 10(v)
to the Second Quarter 1989 Form 10-Q.
(vi) First Supplement to Lease dated as of January
1, 1990, between the authority and Burlington,
as Lessee. Exhibit 10 to the Registrant's Quarterly
Report on Form 10-Q for the quarter ended March 31,
1990.
(vii) Revised and Amended Second Supplement to
Lease dated as of September 1, 1990,
between the Authority and Burlington. Exhibit
10(i) to the Registrant's Quarterly Report on
Form 10-Q for the quarter ended September
30, 1990 (the "Third Quarter 1990 Form 10-Q").
(viii) Amendment Agreement dated as of September 1, 1990, among
City of Toledo, Ohio, the Authority, Burlington and
the Trustee. Exhibit 10(ii) to the Third Quarter 1990
Form 10-Q.
(ix) Assumption and Non-Merger Agreement dated
as of September 1, 1990, among Burlington,
the Authority and the Trustee. Exhibit 10(iii) to
the Third Quarter 1990 Form 10-Q.
(x) First Supplemental Indenture between Toledo-
Lucas County Port Authority, and Society
National Bank, as Trustee, dated as of March
1, 1994. Exhibit 10.1 to the Registrant's
Quarterly Report on Form 10-Q for the quarter
ended March 31, 1994 (the "First Quarter 1994
Form 10-Q").
(xi) Third Supplement to Lease between Toledo-
Lucas County Port Authority, as Lessor, and
Burlington Air Express Inc., as Lessee, dated
as of March 1, 1994. Exhibit 10.2 to the First
Quarter 1994 Form 10-Q.
(xii) Fourth Supplement to Lease between Toledo-Lucas County Port
Authority, as Lessor, and Burlington Air Express Inc.,
as Lessee, dated as of June 1, 1991. Exhibit 10.3 to the
First Quarter 1994 Form 10-Q.
(xiii) Fifth Supplement to Lease between Toledo-Lucas County
Port Authority, as Lessor, and Burlington Air Express
Inc., as Lessee, dated as of December 1, 1996.
Exhibit 10(r)(xiii) to the 1996 Form 10-K.
10(o)* (i) Credit Agreement dated as of March 4, 1994, among The
Pittston Company, as Borrower, Lenders Parties Thereto,
Chemical Bank, Credit Suisse and Morgan Guaranty Trust
Company of New York, as Co-agents, and Credit Suisse,
as Administrative Agent (the "Credit Agreement").
Exhibit 10.4 to the First Quarter 1994 Form 10-Q.
(ii) Amendment to the Credit Agreement dated as of
May 1, 1995. Exhibit 10(s)(ii) to the
Registrant's Annual Report on Form 10-K for
the year ended December 31, 1995.
22
<PAGE>
(iii) Amendment to Credit Agreement dated as of May 15, 1996.
Exhibit 10(t)(iii) to the Registrant's Annual Report on
Form 10-K for the year ended December 31, 1996.
10(p)* Employment Agreement dated as of May 4, 1998, between the Registrant
and M.T. Dan. Exhibit 10(a) to the Registrant's Quarterly Report on
Form 10-Q for the quarter ended Septmber 30, 1998 (the "Third Quarter
1998 Form 10-Q")
10(q)* Executive Agreement dated as of May 4, 1998,
between the Registrant and M. T. Dan. Exhibit 10(b)
to the Third Quarter 1998 Form 10-Q.
10(r)* Executive Agreement dated as of August 7, 1998,
between the Registrant and R. T. Ritter. Exhibit 10(c)
to the Third Quarter 1998 Form 10-Q.
10(s)* Severance Agreement dated as of August 7, 1998,
between the Registrant and R. T. Ritter. Exhibit 10(d)
to the Third Quarter 1998 Form 10-Q.
10(t) Trust Agreement for The Pittston Company Employee
Welfare Benefit Trust.
13 1999 Annual Report of the Registrant.
21 Subsidiaries of the Registrant.
23 Consent of independent auditors.
24 Powers of attorney.
27 Financial Data Schedule.
99* (a) Amendment to Registrant's Pension-Retirement Plan
relating to preservation of assets of the Pension-
Retirement Plan upon a change in control. Exhibit 99
to the Registrant's Annual Report on Form 10-K for
the year ended December 31, 1992.
(b) 1994 Employee Stock Purchase Plan of The Pittston
Company's Annual Report on Form 11-K for the year
ended December 31, 1999.
- ---------------------
*Management contract or compensatory plan or arrangement.
23
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24
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25
<PAGE>
Back Cover Page
26
STATEMENT OF DIFFERENCES
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The registered trademark symbol shall be expressed as...................... 'r'
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3
<SEQUENCE>2
<DESCRIPTION>EXHIBIT 3(II)
<TEXT>
<PAGE>
EXHIBIT 3(ii)
THE PITTSTON COMPANY
BYLAWS
(As amended through March 9, 2000)
ARTICLE I
NAME
The name of the corporation is The Pittston Company.
ARTICLE II
OFFICES
1. The corporation shall maintain a registered office and a registered
agent in the Commonwealth of Virginia as required by the laws of said
Commonwealth.
2. The corporation shall in addition to its registered office in the
Commonwealth of Virginia establish and maintain an office or offices at such
place or places as the Board of Directors may from time to time find necessary
or desirable.
ARTICLE III
CORPORATE SEAL
The corporate seal of the corporation shall have inscribed thereon the
name of the corporation, the fact of its establishment in the Commonwealth of
Virginia and the words "Corporate Seal". Such seal may be used by causing it or
a facsimile thereof to be impressed, affixed, printed or otherwise reproduced.
ARTICLE IV
MEETINGS OF SHAREHOLDERS
1. Meetings of the shareholders shall be held at such place, within or
without the Commonwealth of Virginia, as the Board may determine.
2. The annual meeting of the shareholders shall be held on the second
Wednesday in May at ten o'clock in the forenoon, local time, or on such other
day or at such other time as the Board may determine. At each annual meeting of
the shareholders they shall elect by plurality vote, in
<PAGE>
accordance with the Articles of Incorporation and these bylaws, directors to
hold office until the third annual meeting of the shareholders held after their
election and their successors are respectively elected and qualified or as
otherwise provided by statute, the Articles of Incorporation or these bylaws.
Any other proper business may be transacted at the annual meeting. The chairman
of the meeting shall be authorized to declare whether any business is properly
brought before the meeting, and, if he shall declare that it is not so brought,
such business shall not be transacted. Without limiting the generality of the
foregoing, the chairman of the meeting may declare that matters relating to the
conduct of the ordinary business operations of the corporation are not properly
brought before the meeting.
3. A majority of the votes entitled to be cast on a matter shall
constitute a quorum for action on that matter at all meetings of the
shareholders, except as otherwise provided by statute, the Articles of
Incorporation or these bylaws. The shareholders entitled to vote thereat,
present in person or by proxy, or the chairman of the meeting shall have power
to adjourn the meeting from time to time, without notice other than announcement
at the meeting before adjournment (except as otherwise provided by statute). At
such adjourned meeting any business may be transacted which might have been
transacted at the meeting as originally notified.
4. At all meetings of the shareholders each shareholder having the
right to vote shall be entitled to vote in person, or by proxy appointed by an
appointment form signed by such shareholder and bearing a date not more than
eleven months prior to said meeting, unless such form provides for a longer
period. All proxies shall be effective when received by the Secretary or other
officer or agent of the corporation authorized to tabulate votes.
5. Except as otherwise provided in the Articles of Incorporation, at
each meeting of the shareholders each shareholder shall have one vote for each
share having voting power, registered in his name on the share transfer books of
the corporation at the record date fixed in accordance with these bylaws, or
otherwise determined, with respect to such meeting. Except as otherwise
expressly provided by statute, the Articles of Incorporation or these bylaws,
action on a matter, other than the election of directors, by a voting group is
approved if a quorum exists and the votes cast within the voting group favoring
the action exceed the votes cast opposing the action.
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<PAGE>
6. Except as otherwise prescribed by statute, notice of each meeting of
the shareholders shall be given to each shareholder entitled to vote thereat not
less than 10 nor more than 60 days before the meeting. Such notice shall state
the date, time and place of the meeting and, in the case of a special meeting,
the purpose or purposes for which the meeting is called.
7. Except as otherwise prescribed by statute, special meetings of the
shareholders for any purpose or purposes may be called by the Chairman of the
Board and shall be called by the Chairman of the Board or the Secretary by vote
of the Board of Directors.
8. Business transacted at each special meeting shall be confined to the
purpose or purposes stated in the notice of such meeting.
9. The order of business at each meeting of the shareholders and the
voting and other procedures to be observed at such meeting shall be determined
by the chairman of such meeting.
10. Subject to the rights of holders of shares of the Preferred Stock
of the corporation, nominations for the election of directors shall be made by
the Board of Directors or by any shareholder entitled to vote in elections of
directors. However, any shareholder entitled to vote in elections of directors
may nominate one or more persons for election as directors at an annual meeting
only if written notice of such shareholder's intent to make such nomination or
nominations has been given, either by personal delivery or by United States
registered or certified mail, postage prepaid, to the Secretary of the
corporation not less than 120 and not more than 180 calendar days in advance of
the date on which the corporation's proxy statement was released to shareholders
in connection with the immediately preceding annual meeting. Each notice shall
set forth (i) the name and address of the shareholder who intends to make the
nomination and of the person or persons to be nominated, (ii) a representation
that the shareholder is entitled to vote at such meeting and intends to appear
in person or by proxy at the meeting to nominate the person or persons specified
in the notice, (iii) the class and number of shares of the corporation that are
owned by the shareholder, (iv) a description of all arrangements, understandings
or relationships between the shareholder and each nominee and any other person
or persons (naming such person or persons) pursuant to which the nomination or
nominations are to be made by the shareholder and (v) such other information
regarding each nominee proposed by such shareholder as would be required to be
included in a proxy statement filed pur-
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<PAGE>
suant to the proxy rules of the Securities and Exchange Commission, had the
nominee been nominated, or intended to be nominated, by the Board of Directors,
and shall include a consent signed by each such nominee to serve as a director
of the corporation if so elected. The chairman of the meeting may refuse to
acknowledge the nomination of any person not made in compliance with the
foregoing procedure.
11. To be properly brought before an annual meeting of shareholders,
business must be (i) specified in the notice of meeting (or any supplement
thereto) given by or at the direction of the Board of Directors, (ii) otherwise
properly brought before the meeting by or at the direction of the Board of
Directors or (iii) otherwise properly brought before the annual meeting by a
shareholder. In addition to any other applicable requirements, for business to
be properly brought before a meeting by a shareholder, the shareholder must have
given timely notice thereof in writing to the Secretary of the corporation. To
be timely, a shareholder's notice must be given, either by personal delivery or
by United States registered or certified mail, postage prepaid, to the Secretary
of the corporation not less than 120 and not more than 180 calendar days in
advance of the date on which the corporation's proxy statement was released to
shareholders in connection with the immediately preceding annual meeting. A
shareholder's notice to the Secretary shall set forth as to each matter the
shareholder proposes to bring before the annual meeting (i) a brief description
of the business desired to be brought before the annual meeting, including the
complete text of any resolutions to be presented at such meeting with respect to
such business, and the reasons for conducting such business at the annual
meeting, (ii) the name and address of record of the shareholder proposing such
business, (iii) a representation that the shareholder is entitled to vote at
such meeting and intends to appear in person or by proxy at the meeting to
propose the business specified in the notice, (iv) the class and number of
shares of the corporation that are owned by the shareholder, (v) any material
interest of the shareholder in such business and (vi) full particulars as to the
relationship, if any, of such shareholder to any other person that such
shareholder knows or has reason to believe intends to bring one or more other
items of business before the meeting. In the event that a shareholder attempts
to bring business before an annual meeting without complying with the foregoing
procedure, the chairman of the meeting may declare to the meeting that the
business was not properly brought before the meeting and, if he shall so
declare, such business shall not be transacted.
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<PAGE>
ARTICLE V
DIRECTORS
1. All corporate powers shall be exercised by or under the authority
of, and the business and affairs shall be managed under the direction of, the
Board of Directors, subject to any limitation set forth in the Articles of
Incorporation.
2. The Board shall consist of not less than nine or more than fifteen
members.
3. The Board of Directors shall consist of eleven members. The terms of
office of the directors shall be staggered and shall otherwise be determined, as
provided in these bylaws, subject to the Articles of Incorporation and
applicable laws. Such terms shall be divided into three groups, two of which
shall consist of four directors and the third of which shall consist of three
directors.
4. The number of directors may at any time be increased or decreased,
within the variable range established by the Articles of Incorporation and these
bylaws, by amendment of these bylaws. In case of any such increase the Board
shall have power to elect any additional director to hold office until the next
shareholders' meeting at which directors are elected. Any decrease in the number
of directors shall take effect at the time of such amendment only to the extent
that vacancies then exist; to the extent that such decrease exceeds the number
of such vacancies, the decrease shall not become effective, except as further
vacancies may thereafter occur by expiration of the term of directors at the
next shareholders' meeting at which directors are elected, or otherwise.
5. If the office of any director becomes vacant, by reason of death,
resignation, increase in the number of directors or otherwise, the directors
remaining in office, although less than a quorum, may fill the vacancy by the
affirmative vote of a majority of such directors.
6. The Board of Directors, at its first meeting after the annual
meeting of shareholders, shall choose a Chairman of the Board from among the
directors.
7. Any director may resign at any time by delivering written notice of
his resignation to the Board of Directors or the Chairman of the Board. Any such
resignation shall take effect upon such delivery or at such later date as may be
specified therein. Any such notice to the Board may be addressed to it in care
of the Secretary.
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<PAGE>
8. The Chairman of the Board shall preside at meetings of the Board of
Directors, and shall have the powers and duties usually and customarily
associated with the position of a non-executive Chairman of the Board.
9. In case of the absence of the Chairman of the Board, the Board
member with the longest tenure on the Board shall preside at meetings of the
shareholders and of the Board of Directors. He shall have such other powers and
duties as may be delegated to him by the Chairman of the Board.
ARTICLE VI
COMMITTEES OF DIRECTORS
There shall be an Executive Committee, an Audit and Ethics Committee, a
Compensation and Benefits Committee, a Finance Committee, a Nominating Committee
and a Pension Committee, and the Board of Directors may create one or more other
committees. Each committee of the Board of Directors shall consist of two or
more directors of the corporation who shall be appointed by, and shall serve at
the pleasure of, the Board. The Executive Committee, to the extent determined by
the Board but subject to limitations expressly prescribed by statute, shall have
and may exercise all the powers and authority of the Board in the management of
the business and affairs of the corporation. The Audit and Ethics Committee, the
Compensation and Benefits Committee, the Finance Committee, the Nominating
Committee and the Pension Committee and each such other committee shall have
such of the powers and authority of the Board as may be determined by the Board.
Each committee shall report its proceedings to the Board when required.
Provisions with respect to the Board of Directors which are applicable to
meetings, actions without meetings, notices and waivers of notice and quorum and
voting requirements shall also be applicable to each committee, except that a
quorum of the Executive Committee shall consist of one third of the number of
members of the Committee, three of whom are not employees of the Company or any
of its subsidiaries.
ARTICLE VII
COMPENSATION OF DIRECTORS
The Board of Directors may fix the compensation of the directors for
their services, which compensation may include an annual fee, a fixed sum and
expenses for attendance at regular or special meetings of the Board or any
committee
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<PAGE>
thereof, pension benefits and such other amounts as the Board may determine.
Nothing herein contained shall be construed to preclude any director from
serving the corporation in any other capacity and receiving compensation
therefor.
ARTICLE VIII
MEETINGS OF DIRECTORS;
ACTION WITHOUT A MEETING
1. Regular meetings of the Board of Directors may be held pursuant to
resolutions from time to time adopted by the Board, without further notice of
the date, time, place or purpose of the meeting.
2. Special meetings of the Board of Directors may be called by the
Chairman of the Board on at least 24 hours' notice to each director of the date,
time and place thereof, and shall be called by the Chairman of the Board or by
the Secretary on like notice on the request in writing of a majority of the
total number of directors in office at the time of such request. Except as may
be otherwise required by the Articles of Incorporation or these bylaws, the
purpose or purposes of any such special meeting need not be stated in such
notice.
3. The Board of Directors may hold its meetings, have one or more
offices and, subject to the laws of the Commonwealth of Virginia, keep the share
transfer books and other books and records of the corporation, within or without
said Commonwealth, at such place or places as it may from time to time
determine.
4. At each meeting of the Board of Directors the presence of a majority
of the total number of directors in office immediately before the meeting begins
shall be necessary and sufficient to constitute a quorum for the transaction of
business, and, except as otherwise provided by the Articles of Incorporation or
these bylaws, if a quorum shall be present the affirmative vote of a majority of
the directors present shall be the act of the Board.
5. Any action required or permitted to be taken at any meeting of the
Board of Directors may be taken without a meeting if one or more written
consents stating the action taken, signed by each director either before or
after the action is taken, are included in the minutes or filed with the
corporate records. Any or all directors may participate in any regular or
special meeting of the Board, or conduct such meeting through the use of, any
means of communication by which all directors participating may simultaneously
hear
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<PAGE>
each other, and a director participating in a meeting by this means shall be
deemed to be present in person at such meeting.
ARTICLE IX
OFFICERS
1. The officers of the corporation shall be chosen by the Board of
Directors and shall be a Chief Executive Officer, a President, one or more Vice
Presidents, a General Counsel, a Treasurer and a Secretary. The Board may also
appoint a Controller and one or more Executive Vice Presidents, Senior Vice
Presidents, Assistant Treasurers, Assistant Controllers and Assistant
Secretaries, and such other officers as it may deem necessary or advisable. Any
number of offices may be held by the same person. The Board may authorize an
officer to appoint one or more other officers or assistant officers. The
officers shall hold their offices for such terms and shall exercise such powers
and perform such duties as shall be prescribed from time to time by the Board or
by direction of an officer authorized by the Board to prescribe duties of other
officers.
2. The Board of Directors, at its first meeting after the annual
meeting of shareholders, shall choose the officers, who need not be members of
the Board.
3. The salaries of all officers of the corporation shall be fixed by
the Board of Directors, or in such manner as the Board may prescribe.
4. The officers of the corporation shall hold office until their
successors are chosen and qualified. Any officer may at any time be removed by
the Board of Directors or, in the case of an officer appointed by another
officer as provided in these bylaws, by such other officer. If the office of any
officer becomes vacant for any reason, the vacancy may be filled by the Board
or, in the case of an officer so appointed, by such other officer.
5. Any officer may resign at any time by delivering notice of his
resignation to the Board of Directors or the Chairman of the Board. Any such
resignation may be effective when the notice is delivered or at such later date
as may be specified therein if the corporation accepts such later date. Any such
notice to the Board shall be addressed to it in care of the Chairman of the
Board or the Secretary.
-8-
<PAGE>
ARTICLE X
CHIEF EXECUTIVE OFFICER
Subject to the supervision and direction of the Board of Directors, the
Chief Executive Officer shall be responsible for managing the affairs of the
corporation and shall preside at meetings of the shareholders. The Chief
Executive Officer shall have supervision and direction of all of the other
officers of the corporation.
ARTICLE XI
PRESIDENT
The President shall be the chief operating officer of the corporation
and shall perform such duties as may be prescribed by these bylaws, or by the
Chief Executive Officer. The President shall, in case of the absence or
inability of the Chief Executive Officer to act, have the powers and perform the
duties of the Chief Executive Officer.
ARTICLE XII
EXECUTIVE VICE PRESIDENTS,
SENIOR VICE PRESIDENTS
AND VICE PRESIDENTS
1. The Executive Vice Presidents, the Senior Vice Presidents and the
Vice Presidents shall have such powers and duties as may be delegated to them by
the Chief Executive Officer.
ARTICLE XIII
GENERAL COUNSEL
The General Counsel shall be the chief legal officer of the corporation
and the head of its legal department. He shall, in general, perform the duties
incident to the office of General Counsel and shall have such other powers and
duties as may be delegated to him by the Chief Executive Officer.
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<PAGE>
ARTICLE XIV
TREASURER
The Treasurer shall be responsible for the care and custody of all the
funds and securities of the corporation. The Treasurer shall render an account
of the financial condition and operations of the corporation to the Board of
Directors or the Chief Executive Officer as often as the Board or the Chief
Executive Officer shall require. He or she shall have such other powers and
duties as may be delegated to him or her by the Chief Executive Officer.
ARTICLE XV
CONTROLLER
The Controller shall maintain adequate records of all assets,
liabilities and transactions of the corporation, and shall see that adequate
audits thereof are currently and regularly made. The Controller shall disburse
the funds of the corporation in payment of the just obligations of the
corporation, or as may be ordered by the Board of Directors, taking proper
vouchers for such disbursements. The Controller shall have such other powers and
duties as may be delegated to the Controller by the Chief Executive Officer.
ARTICLE XVI
SECRETARY
The Secretary shall act as custodian of the minutes of all meetings of
the Board of Directors and of the shareholders and of the committees of the
Board of Directors. He or she shall attend to the giving and serving of all
notices of the corporation, and the Secretary or any Assistant Secretary shall
attest the seal of the corporation upon all contracts and instruments executed
under such seal. He or she shall also be custodian of such other books and
records as the Board or the Chief Executive Officer may direct. He or she shall
have such other powers and duties as may be delegated to him or her by the Chief
Executive Officer.
ARTICLE XVII
TRANSFER AGENTS AND REGISTRARS;
CERTIFICATES OF STOCK
1. The Board of Directors may appoint one or more transfer agents and
one or more registrars for shares of capital stock of the corporation and may
require all cer-
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<PAGE>
tificates for such shares, or for options, warrants or other rights in respect
thereof, to be countersigned on behalf of the corporation by any such transfer
agent or by any such registrar.
2. The certificates for shares of the corporation shall be numbered and
shall be entered on the books of the corporation as they are issued. Each share
certificate shall state on its face the name of the corporation and the fact
that it is organized under the laws of the Commonwealth of Virginia, the name of
the person to whom such certificate is issued and the number and class of shares
and the designation of the series, if any, represented by such certificate and
shall be signed by the Chief Executive Officer, the President, an Executive or
Senior Vice President or a Vice President and by the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary. Any and all signatures on
such certificates, including signatures of officers, transfer agents and
registrars may be facsimile. In case any officer who has signed or whose
facsimile signature has been placed on any such certificate shall have ceased to
be such officer before such certificate is issued, then, unless the Board of
Directors shall otherwise determine and cause notification thereof to be given
to such transfer agent and registrar, such certificate shall nevertheless be
valid and may be issued by the corporation (and by its transfer agent) and
registered by its registrar with the same effect as if he were such officer at
the date of issue.
ARTICLE XVIII
TRANSFERS OF STOCK
1. All transfers of shares of the corporation shall be made on the
books of the corporation by the registered holders of such shares in person or
by their attorneys lawfully constituted in writing, or by their legal
representatives.
2. Certificates for shares of stock shall be surrendered and canceled
at the time of transfer.
3. To the extent that any provision of the Amended and Restated Rights
Agreement dated as of January 19, 1996, between the corporation and Chemical
Bank, as Rights Agent (the "Rights Agreement"), or the Amendment thereto, dated
as of July 31, 1997, between the corporation and BankBoston, N.A., as successor
rights agent, imposes a restriction on the transfer of any securities of the
corporation, including, without limitation, the Rights, as defined in the
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<PAGE>
Amended and Restated Rights Agreement, such restriction is hereby authorized.
4. Article 14.1 of Chapter 9 of Title 13.1 of the Code of Virginia,
titled "Control Share Acquisitions," shall not apply to acquisitions of shares
of the corporation.
ARTICLE XIX
FIXING RECORD DATE
In order to make a determination of shareholders for any purpose,
including those who are entitled to notice of and to vote at any meeting of
shareholders or any adjournment thereof, or entitled to express consent in
writing to any corporate action without a meeting, or entitled to receive
payment of any dividend or other distribution or allotment of any rights, or
entitled to exercise any rights in respect of any change, conversion or exchange
of stock, the Board of Directors may fix in advance a record date which shall
not be more than 70 days before the meeting or other action requiring such
determination. Except as otherwise expressly prescribed by statute, only
shareholders of record on the date so fixed shall be entitled to such notice of,
and to vote at, such meeting and any adjournment thereof, or entitled to express
such consent, or entitled to receive payment of such dividend or other
distribution or allotment of rights, or entitled to exercise such rights in
respect of change, conversion or exchange, or to take such other action, as the
case may be, notwithstanding any transfer of shares on the share transfer books
of the corporation after any such record date fixed as aforesaid.
ARTICLE XX
REGISTERED SHAREHOLDERS
The corporation shall be entitled to treat the holder of record of any
share or shares as the holder in fact thereof and, accordingly, shall not be
bound to recognize any equitable or other claim to or interest in such share on
the part of any other person, whether or not it shall have express or other
notice thereof, save as expressly provided by the laws of the Commonwealth of
Virginia.
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<PAGE>
ARTICLE XXI
CHECKS
All checks, drafts and other orders for the payment of money and all
promissory notes and other evidences of indebtedness of the corporation shall be
signed in such manner as may be determined by the Board of Directors.
ARTICLE XXII
FISCAL YEAR
The fiscal year of the corporation shall end on December 31 of each
year.
ARTICLE XXIII
NOTICES AND WAIVER
1. Whenever by statute, the Articles of Incorporation or these bylaws
it is provided that notice shall be given to any director or shareholder, such
provision shall not be construed to require personal notice, but such notice may
be given in writing, by mail, by depositing the same in the United States mail,
postage prepaid, directed to such shareholder or director at his address as it
appears on the records of the corporation, or, in default of other address, to
such director or shareholder at the registered office of the corporation in the
Commonwealth of Virginia, and, except for any meeting of directors to be held
within 48 hours after such notice, shall be deemed to be given at the time when
the same shall be thus deposited. Notice of special meetings of the Board of
Directors may also be given to any director by telephone, by telex or telecopy,
or by telegraph or cable, and in case of notice so given otherwise than by
telephone, the notice shall be deemed to be given at the time such notice,
addressed to such director at the address hereinabove provided, shall be
acknowledged by reply telex or telecopy or shall be transmitted or delivered to
and accepted by an authorized telegraph or cable office, as the case may be.
2. Whenever by statute, the Articles of Incorporation or these bylaws a
notice is required to be given, a written waiver thereof, signed by the person
entitled to notice, whether before or after the time stated therein, and filed
with the corporate records or the minutes of the meeting, shall be equivalent to
notice. Attendance of any shareholder or director at any meeting thereof shall
constitute a waiver of notice of such meeting by such shareholder or
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<PAGE>
director, as the case may be, except as otherwise provided by statute.
ARTICLE XXIV
BYLAWS
The Board of Directors shall have the power to make, amend or repeal
bylaws of the corporation.
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4
<SEQUENCE>3
<DESCRIPTION>EXHIBIT 4(A)(I)
<TEXT>
<PAGE>
EXECUTION COPY
EXHIBIT 4(a)(i)
================================================================================
AMENDED AND RESTATED
RIGHTS AGREEMENT
Dated as of January 14, 2000
Between
THE PITTSTON COMPANY
And
BANKBOSTON, N.A.
As Rights Agent
================================================================================
<PAGE>
Table of Contents
<TABLE>
<CAPTION>
Page
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<S> <C> <C>
Section 1. Certain Definitions............................................................ 4
Section 2. Appointment of Rights Agent.................................................... 11
Section 3. Issue of Right Certificates.................................................... 11
Section 4. Forms of Right Certificates.................................................... 13
Section 5. Execution, Countersignature and Registration................................... 13
Section 6. Transfer, Split-up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen
Right Certificates.......................................................... 14
Section 7. Exercise of Rights; Expiration Date of Rights; Restriction
on Transfer of Rights....................................................... 14
Section 8. Cancelation and Destruction of Right Certificates.............................. 16
Section 9. Reservation and Availability of Preferred Shares............................... 16
Section 10. Preferred Shares Record Date................................................... 18
Section 11. Adjustment of Number and Kind of Shares and the Purchase
Price....................................................................... 18
Section 12. Certificate of Adjustment...................................................... 24
Section 13. Consolidation, Merger, Share Exchange or Sale or Transfer
of Major Part of Assets..................................................... 24
Section 14. Additional Covenants........................................................... 28
Section 15. Fractional Rights and Fractional Shares........................................ 29
Section 16. Rights of Action............................................................... 30
Section 17. Transfer and Ownership of Rights and Right Certificate......................... 30
Section 18. Right Certificate Holder Not Deemed a Shareholder.............................. 31
Section 19. Concerning the Rights Agent.................................................... 31
Section 20. Merger or Consolidation or Change of Rights Agent.............................. 31
Section 21. Duties of Rights Agent......................................................... 32
Section 22. Change of Rights Agent......................................................... 34
Section 23. Issuance of New Right Certificates............................................. 35
Section 24. Redemption and Termination..................................................... 35
Section 25. Notice of Certain Events....................................................... 36
Section 26. Notices........................................................................ 36
Section 27. Supplements and Amendments..................................................... 37
Section 28. Successors..................................................................... 38
Section 29. Benefits of this Rights Agreement; Determinations and Actions
by the Board of Directors, etc.............................................. 38
Section 30. Severability................................................................... 39
Section 31. Governing Law.................................................................. 39
Section 32. Counterparts................................................................... 39
Section 33. Descriptive Headings........................................................... 39
</TABLE>
<PAGE>
Exhibits
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Exhibit A Form of Right Certificate
<PAGE>
3
AMENDED AND RESTATED RIGHTS AGREEMENT dated as of January 14, 2000,
between THE PITTSTON COMPANY, a Virginia corporation (the "Company"), and
BANKBOSTON, N.A., as Rights Agent (the "Rights Agent").
On September 11, 1987 (the "Rights Dividend Declaration
Date"), the Board of Directors of the Company adopted a shareholder rights plan
governed by the terms of a rights agreement (as amended as of December 12, 1988,
the "Original Agreement") and distributed one right (a "Common Right") for each
share of common stock, par value $1.00 per share, of the Company (the "Common
Stock") outstanding at the close of business on September 25, 1987 (the "Record
Date"), and authorized the issuance of one Common Right for each share of Common
Stock issued between the Record Date and the date hereof.
On May 7, 1993, the Board of Directors of the Company adopted
amendments to the Original Agreement (as amended, the "Amended Agreement") and,
contingent upon and simultaneously with the distribution of Pittston Minerals
Group Common Stock ("Minerals Stock") to holders of the Common Stock on the
close of business on July 26, 1993, pursuant to such amendments (i) authorized
and declared a dividend distribution of one Pittston Minerals Group Right for
each share of Minerals Stock and (ii) redesignated each Common Right as a
Pittston Services Group Right (a "Services Right").
On September 15, 1995, the Board of Directors of the Company
adopted amendments to the Amended Agreement and contingent upon and
simultaneously with (i) the redesignation of Pittston Services Group Common
Stock, par value $1.00 per share, of the Company ("Services Stock") as Brink's
Stock (as defined herein) and (ii) the distribution of Pittston BAX Group Common
Stock ("BAX Stock") to holders of Services Stock on the close of business on
January 19, 1996, redesignated each Services Right as a Pittston Brink's Group
Right (a "Right") and authorized and declared a distribution of one Pittston
Burlington Group Right for each share of BAX Stock.
On December 4, 1999, the Board of Directors of the Company
adopted amendments to the Amended Agreement (as amended, the "Rights Agreement")
contingent upon and simultaneously with the exchange of Brink's Stock for each
outstanding share of BAX Stock and Minerals Stock effective on January 14, 2000
(the "Effective Date").
Each Right initially represents the right to purchase one
one-thousandth (1/1000th) of a Series A Preferred Share, each such Preferred
Share having the powers, rights and preferences set forth in the Company's
Restated Articles of Incorporation, upon the terms and subject to the conditions
hereinafter set forth.
<PAGE>
4
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Rights
Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which,
alone or together with all Affiliates and Associates of such Person, shall be
the Beneficial Owner of more than 15% of the total Voting Rights of all the
Common Shares then outstanding (provided however that such person shall be
deemed to be an Acquiring Person only on the Close of Business on the tenth
calendar day (or sooner if so determined by the Board) following such time as
the Board learns that such Person's Beneficial Ownership exceeds 15% of the
total Voting Rights of all the Common Shares then outstanding) but shall not
include (a) the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or of any of its Subsidiaries, or any Person holding Common
Shares for or pursuant to the terms of any such employee benefit plan or (b) any
such Person who has become and is such a Beneficial Owner solely because (i) of
a change in the aggregate number of Common Shares outstanding since the last
date on which such Person acquired Beneficial Ownership of any Common Shares or
(ii) it acquired such Beneficial Ownership in the good faith belief that such
acquisition would not cause such Beneficial Ownership to exceed 15% of the total
Voting Rights of all the Common Shares then outstanding. Notwithstanding clause
(b)(ii) of the prior sentence, if any Person that is excluded from the
definition of an Acquiring Person due to such clause (b)(ii) does not reduce its
percentage of Beneficial Ownership of Common Shares to 15% or less of the total
Voting Rights of all the Common Shares then outstanding by the Close of Business
on the fifth Business Day after notice from the Company (the date of notice
being the first day) that such Person's Beneficial Ownership of Common Shares so
exceeds 15% of such total Voting Rights, such Person shall, at the end of such
five Business Day period, become an Acquiring Person (and such clause (b)(ii)
shall no longer apply to such Person). For purposes of this definition, the
determination whether any Person acted in "good faith" shall be conclusively
determined by the Board of Directors of the Company."
(b) "Affiliate" and "Associate", when used with reference to
any Person, shall have the respective meanings ascribed to such terms in Rule
12b-2 of the General Rules and Regulations under the Securities Exchange Act of
1934, as in effect on the date of this Rights Agreement.
(c) "Affiliate Merger" shall have the meaning set forth in
clause (i) of Section 11(e) of this Rights Agreement.
<PAGE>
5
(d) A Person shall be deemed the "Beneficial Owner" of, and
shall be deemed to "beneficially own", any securities:
(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant to
any agreement, arrangement or understanding (written or oral), or upon
the exercise of conversion rights, exchange rights, rights (other than
Rights issuable under this Rights Agreement), warrants or options, or
otherwise; provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, securities tendered
pursuant to a tender or exchange offer made by or on behalf of such
Person or any of such Person's Affiliates or Associates until such
tendered securities are accepted for purchase or exchange thereunder;
or (B) the right to vote pursuant to any agreement, arrangement or
understanding (written or oral); provided, however, that a Person shall
not be deemed the Beneficial Owner of, or to beneficially own, any
security if the agreement, arrangement or understanding (written or
oral) to vote such security (1) arises solely from a revocable proxy
given to such Person in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable
rules and regulations under the Exchange Act and (2) is not also then
reportable on Schedule 13D under the Exchange Act (or any comparable or
successor report); or
(iii) which are beneficially owned, directly or indirectly, by
any other Person with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or
understanding (written or oral), for the purpose of acquiring, holding,
voting (except pursuant to a revocable proxy as described in clause (B)
of subparagraph (ii) of this paragraph (d)) or disposing of any
securities of the Company; provided, however, that, notwithstanding any
provision of this Section 1(e), any Person engaged in business as an
underwriter of securities who acquires any securities of the Company
through such Person's participation in good faith in a firm commitment
underwriting registered under the Securities Act shall not be deemed
the "Beneficial Owner" of, or to "beneficially own", such securities
until the expiration of 40 days after the date of acquisition.
(e) "Book Value" when used with reference to Common Shares
issued by any Person shall mean the amount of equity of such Person applicable
to each Common Share, determined (i) in accordance with generally accepted
accounting principles in effect on the date as of which such Book Value is to be
determined, (ii) using all the
<PAGE>
6
consolidated assets and all the consolidated liabilities of such Person on the
date as of which such Book Value is to be determined, except that no value shall
be included in such assets for goodwill arising from consummation of a Business
Combination, and (iii) after giving effect to (A) the exercise of all rights,
options and warrants to purchase such Common Shares (other than the Rights), and
the conversion of all securities convertible into such Common Shares, at an
exercise or conversion price, per Common Share, which is less than such Book
Value before giving effect to such exercise or conversion, (B) all dividends and
other distributions on the capital stock of such Person declared prior to the
date as of which such Book Value is to be determined and to be paid or made
after such date, and (C) any other agreement, arrangement or understanding
(written or oral), or transaction or other action prior to the date as of which
such Book Value is to be determined which would have the effect of thereafter
reducing such Book Value.
(f) "Brink's Stock" shall mean the Pittston Brink's Group
Common Stock, par value $1.00 per share, of the Company.
(g) "Business Combination" shall have the meaning set forth in
Section 13(a) of this Rights Agreement.
(h) "Business Day" shall mean each Monday, Tuesday, Wednesday,
Thursday and Friday which is not a day on which banking institutions in the
Borough of Manhattan, The City of New York, are authorized or obligated by law
or executive order to close.
(i) "Close of Business" on any given date shall mean 5 p.m.,
New York City time, on such date; provided, however, that if such date is not a
Business Day, "Close of Business" shall mean 5 p.m., New York City time, on the
next succeeding Business Day.
(j) "Common Shares" when used with reference to the Company
prior to a Business Combination shall mean shares of Brink's Stock or any other
shares of capital stock of the Company into which Brink's Stock shall be
reclassified or changed; provided, however, that "Common Shares" shall mean
shares of Brink's Stock (or any other shares of capital stock into which Brink's
Stock shall be reclassified or changed) whenever a determination of whether a
Person shall have become the Beneficial Owner of, or shall have made a tender or
exchange offer for, Common Shares representing a specified percentage of the
total Voting Rights of all the Common Shares then outstanding is required to be
made herein. "Common Shares" when used with reference to any Person (other than
the Company prior to a Business Combination) shall mean shares of capital stock
of such Person (if such Person is a corporation) of any class or series, or
units of equity interests in such Person (if such Person is not a corporation)
of any class or series, the terms of which do not limit (as a fixed amount
<PAGE>
7
and not merely in proportional terms) the amount of dividends or income payable
or distributable on such class or series or the amount of assets distributable
on such class or series upon any voluntary or involuntary liquidation,
dissolution or winding up of such Person and do not provide that such class or
series is subject to redemption at the option of such Person, or any shares of
capital stock or units of equity interests into which the foregoing shall be
reclassified or changed; provided, however, that if at any time there shall be
more than one such class or series of capital stock or equity interests of such
Person, "Common Shares" of such Person shall include all such classes and series
substantially in the proportion of the total number of shares or other units of
each such class or series outstanding at such time.
(k) "Common Stock" shall have the meaning set forth in the
first introductory paragraph of this Rights Agreement.
(l) "Company" shall have the meaning set forth in the heading
of this Rights Agreement; provided, however, that if there is a Business
Combination, "Company" shall have the meaning set forth in Section 13(b) of this
Rights Agreement.
(m) The term "control", with respect to any Person, shall mean
the power to direct the management and policies of such Person, directly or
indirectly, by or through stock ownership, agency or otherwise, or pursuant to
or in connection with an agreement, arrangement or understanding (written or
oral) with one or more other Persons by or through stock ownership, agency or
otherwise; and the terms "controlling" and "controlled" shall have meanings
correlative to the foregoing.
(n) "Disinterested Director" shall mean (i) any member of the
Board of Directors of the Company who was a member of the Board of Directors of
the Company prior to the Share Acquisition Date, and (ii) any member of the
Board of Directors of the Company who was recommended for election by, or was
elected to fill a vacancy and received the affirmative vote of, a majority of
the Disinterested Directors at the time on the Board of Directors of the
Company.
(o) "Distribution Date" shall have the meaning set forth in
Section 3(a) of this Rights Agreement.
(p) "Effective Date" shall have the meaning set forth in the
fourth introductory paragraph of this Rights Agreement.
(q) "Equivalent Shares" shall mean any Preferred Shares and
any other class or series of capital stock of the Company which is entitled to
participate in dividends and other distributions, including distributions upon
the liquidation, dissolution or winding up of the Company, on a proportional
basis with Brink's Stock. In calculating the number of any class or series of
Equivalent Shares for purposes of
<PAGE>
8
Section 11 of this Rights Agreement, the number of shares, or fractions of a
share, of such class or series of capital stock that is entitled to the same
dividend or distribution as a whole share of Brink's Stock shall be deemed to be
one share.
(r) "Exchange Act" shall mean the Securities Exchange Act of
1934, as in effect on the date in question, unless otherwise specifically
provided in this Rights Agreement.
(s) "Expiration Date" shall have the meaning set forth in
Section 7(a) of this Rights Agreement.
(t) "Major Part" when used with reference to the assets of the
Company and its Subsidiaries as of any date shall mean assets (i) having a fair
market value aggregating 50% or more of the total fair market value of all the
assets of the Company and its Subsidiaries (taken as a whole) as of the date in
question, (ii) accounting for 50% or more of the total value (net of
depreciation and amortization) of all the assets of the Company and its
Subsidiaries (taken as a whole), as would be shown on a consolidated or combined
balance sheet of the Company and its Subsidiaries as of the date in question,
prepared in accordance with generally accepted accounting principles then in
effect, or (iii) accounting for 50% or more of the total amount of net income of
the Company and its Subsidiaries (taken as a whole), as would be shown on a
consolidated or combined statement of income of the Company and its Subsidiaries
for the period of 12 months ending on the last day of the Company's monthly
accounting period next preceding the date in question, prepared in accordance
with generally accepted accounting principles then in effect.
(u) "Market Value" when used with reference to Common Shares
or Equivalent Shares on any date shall be deemed to be the average of the daily
closing prices, per share, of such Common Shares or Equivalent Shares for the
period which is the shorter of (1) 30 consecutive Trading Days immediately prior
to the date in question or (2) the consecutive Trading Days beginning on the
date of the first public announcement of the event requiring a determination of
the Market Value and ending on the Trading Day immediately prior to the record
date of such event; provided, however, that in the event that the Market Value
of such Common Shares or Equivalent Shares is to be determined in whole or in
part during a period following the announcement by the issuer of such Common
Shares or Equivalent Shares of any dividend, distribution or other action of the
type described in paragraph (a), (b), (c) or (d) of Section 11 of this Rights
Agreement that would require an adjustment thereunder, then, and in each such
case, the Market Value of such Common Shares or Equivalent Shares shall be
appropriately adjusted to reflect the effect of such action on the market price
of such Common Shares or Equivalent Shares. The closing price for each Trading
Day shall be the last sale price, regular way, or, in case no such sale takes
place on such Trading Day, the average of the closing bid and asked prices,
regular
<PAGE>
9
way, in either case as reported in the principal consolidated transaction
reporting system with respect to a security listed or admitted to trading on a
national securities exchange or, if such security is not listed or admitted to
trading on any national securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the over-the-counter
market, as reported by the National Association of Securities Dealers, Inc.
Automated Quotations System ("NASDAQ") or such other system then in use, or, if
on any such Trading Day the applicable securities are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the shares of such securities
selected by the Board of Directors of the Company. If on any such Trading Day no
market maker is making a market in such securities, the fair value of such
securities on such Trading Day shall mean the fair value of such securities as
determined in good faith by the Board of Directors of the Company (whose
determination shall be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent, the holders of Rights and all other
Persons).
(v) "Person" shall mean an individual, corporation,
partnership, joint venture, association, trust, unincorporated organization or
other entity.
(w) "Preferred Shares" shall mean the Series A Preferred
Shares. Any reference in this Rights Agreement to Preferred Shares shall be
deemed to include any authorized fraction of a Preferred Share, unless the
context otherwise requires.
(x) "Principal Party" shall mean the Surviving Person in a
Business Combination; provided, however, that if such Surviving Person is a
direct or indirect Subsidiary of any other Person, "Principal Party" shall mean
the Person which is the ultimate parent of such Surviving Person and which is
not itself a Subsidiary of another Person. In the event ultimate control of such
Surviving Person is shared by two or more Persons, "Principal Party" shall mean
that Person that is immediately controlled by such two or more Persons.
(y) "Purchase Price" with respect to each Brink's Right shall
mean $60.00, as such amount may from time to time be adjusted as provided
herein, and shall be payable in lawful money of the United States of America.
All references herein to the Purchase Price shall mean the Purchase Price as in
effect at the time in question.
(z) "Record Date" shall have the meaning set forth in the
first introductory paragraph of this Rights Agreement.
(aa) "Redemption Date" shall mean the time when the Rights are
ordered to be redeemed by the Board of Directors of the Company as provided in
Section 24(a) of this Rights Agreement.
<PAGE>
10
(bb) "Redemption Price" shall mean the price required to be
paid upon the redemption of the Rights as provided in Section 24 of this Rights
Agreement.
(cc) "Registered Common Shares" shall mean Common Shares which
are, as of the date of consummation of a Business Combination, and have been
continuously registered under Section 12 of the Exchange Act during the
preceding 12 months.
(dd) "Right Certificates" shall have the meaning set forth in
Section 3(a) of this Rights Agreement.
(ee) "Rights" shall have the meaning set forth in the third
introductory paragraph of this Rights Agreement.
(ff) "Securities Act" shall mean the Securities Act of 1933,
as in effect on the date in question, unless otherwise specifically provided in
this Rights Agreement.
(gg) "Series A Preferred Shares" shall mean the Series A
Participating Cumulative Preferred Stock, par value $10 per share, of the
Company which the Board of Directors of the Company has heretofore established.
(hh) "Share Acquisition Date" shall mean the first date of
public disclosure by the Company or an Acquiring Person that an Acquiring Person
has become an Acquiring Person.
(ii) "Subsidiary" shall mean a Person, a majority of the total
outstanding Voting Rights of which is owned, directly or indirectly, by another
Person or by such other Person and one or more other Subsidiaries of such other
Person.
(jj) "Surviving Person" shall mean (1) the Person which is the
continuing or surviving Person in a consolidation or merger specified in clause
(i) or (ii) of Section 13(a) of this Rights Agreement or (2) the Person to which
the Major Part of the assets of the Company and its Subsidiaries are sold,
leased, exchanged or otherwise transferred or disposed of in a transaction
specified in clause (iii) of Section 13(a) of this Rights Agreement; provided,
however, that if the Major Part of the assets of the Company and its
Subsidiaries are sold, leased, exchanged or otherwise transferred or disposed of
in one or more related transactions specified in clause (iii) of Section 13(a)
of this Rights Agreement to more than one Person, the "Surviving Person" in such
case shall mean the Person that acquired assets of the Company and/or its
Subsidiaries with the greatest fair market value in such transaction or
transactions.
<PAGE>
11
(kk) "Trading Day" shall mean a day on which the principal
national securities exchange (or principal recognized foreign stock exchange, as
the case may be) on which any shares or Rights, as the case may be, are listed
or admitted to trading is open for the transaction of business or, if the shares
or Rights in question are not listed or admitted to trading on any national
securities exchange (or recognized foreign stock exchange, as the case may be),
a Business Day.
(ll) "Triggering Event" shall have the meaning set forth in
clause (ii) of Section 11(e) of this Rights Agreement.
(mm) "Voting Rights" when used with reference to the capital
stock of, or units of equity interests in, any Person shall mean the right under
ordinary circumstances (and not merely upon the happening of a contingency) to
vote in the election of directors of such Person (if such Person is a
corporation) or to participate in the management and control of such Person (if
such Person is not a corporation).
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company in accordance with the
terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint one or more co-Rights
Agents as it may deem necessary or desirable (the term "Rights Agent" being used
herein to refer, collectively, to the Rights Agent together with any such
co-Rights Agents), upon ten (10) days prior written notice to the Rights Agent.
Failure to give the notice provided for in this Section 2, however, or any
defect therein shall not affect the legality or validity of the appointment of
any one or more co-Rights Agents. In the event the Company appoints one or more
co-Rights Agents, the respective duties of the Rights Agent and any co-Rights
Agents shall be as the Company shall determine, however, the Rights Agent shall
have no duty to supervise, and shall in no event be liable for, the acts or
omissions of any such co-Rights Agent.
Section 3. Issue of Right Certificates. (a) Until the earlier
of (i) such time that a Person has become an Acquiring Person or (ii) on such
date, if any, as may be designated by the Board of Directors of the Company
following the commencement of, or first public disclosure of an intent to
commence, a tender or exchange offer by any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or of any of
its Subsidiaries, or any Person holding Common Shares for or pursuant to the
terms of any such employee benefit plan) for outstanding Common Shares, if upon
consummation of such tender or exchange offer such Person could be the
Beneficial Owner of more than 15% of the total Voting Rights of all the
outstanding Common Shares (including any such date which is after the date of
this Rights Agreement and prior to the issuance of the Rights) (the Close of
Business on the earlier of such dates being herein referred to as the
"Distribution Date"), (x) the Rights will be evidenced by the certificates for
Brink's Stock registered in the names of
<PAGE>
12
the holders thereof (which certificates for Brink's Stock shall also be deemed
to be certificates for the Rights) and not by separate certificates, and (y) the
Rights, including the right to receive certificates as herein provided, will be
transferable only in connection with the transfer of Common Shares. As soon as
practicable after the Distribution Date, the Rights Agent will send, by
first-class, insured, postage prepaid mail, to each record holder of Brink's
Stock as of the close of business on the Distribution Date, at the address of
such holder shown on the records of the Company, one or more right certificates
in substantially the form of Exhibit A hereto (the "Right Certificates"),
evidencing one Right for each share of Brink's Stock so held. As of and after
the Distribution Date, the Rights will be evidenced solely by such Right
Certificates.
(b) Until the earliest of the Distribution Date, the
Redemption Date or the Expiration Date, the surrender for transfer of any of the
certificates for the Common Shares in respect of which Rights have been issued
shall also constitute the transfer of the Rights associated with the Common
Shares represented by such certificate.
(c) Rights shall be issued in respect of all Common Shares
which are issued after the Effective Date but prior to the earliest of the
Distribution Date, the Redemption Date or the Expiration Date. Certificates
representing Common Shares shall also be deemed to be certificates for the
Rights, and shall bear the following legend:
This certificate also evidences and entitles the holder hereof
to certain Rights as set forth in an Amended and Restated Rights
Agreement dated as of January 14, 2000 (the "Rights Agreement"),
between The Pittston Company and BankBoston, N.A., as Rights Agent, the
terms of which are hereby incorporated herein by reference and a copy
of which is on file at the principal executive offices of The Pittston
Company. The term "Rights Agreement" as used herein includes each
amendment thereto or supplement thereof made from time to time, the
terms of each of which are incorporated herein by reference and a copy
of each of which is on file as hereinabove stated. Under certain
circumstances, as set forth in the Rights Agreement, such Rights will
be evidenced by separate certificates and will no longer be evidenced
by this certificate. The Pittston Company will mail to the holder of
this certificate a copy of the Rights Agreement without charge after
receipt of a written request therefor. Under no circumstances shall
Rights evidenced by this certificate be transferred to any Person who
is or becomes an Acquiring Person or an Affiliate or Associate thereof
(as such terms are defined in the Rights Agreement) and any such
purported transfer shall be, and shall render such Rights, null and
void.
<PAGE>
13
Until the Distribution Date the Rights associated with the
Common Shares represented by such certificates shall be evidenced by such
certificates alone, and the surrender for transfer of any such certificate shall
also constitute the transfer of the Rights associated with the Common Shares
represented thereby.
Section 4. Forms of Right Certificates. The Right Certificates
(and the forms of assignment and the forms of election to purchase to be printed
on the reverse thereof) shall be in substantially the forms set forth as Exhibit
A hereto and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Rights
Agreement, or as may be required to comply with any applicable law or with any
rule or regulation made pursuant thereto or with any rule or regulation of any
stock exchange on which the Rights may from time to time be listed, or to
conform to usage. Subject to the provisions of Sections 11 and 23 hereof, the
Right Certificates, whenever issued, shall be dated as of the Record Date, and
on their face shall entitle the holders thereof to purchase such number of
Preferred Shares as shall be set forth therein for the Purchase Price set forth
therein.
Section 5. Execution, Countersignature and Registration. (a)
The Right Certificates shall be executed on behalf of the Company by the
Chairman of the Board, the President or any Vice President of the Company,
either manually or by facsimile signature, and have affixed thereto the
Company's seal or a facsimile thereof which shall be attested by the Secretary
or an Assistant Secretary of the Company, either manually or by facsimile
signature. The Right Certificate shall be manually countersigned by the Rights
Agent and shall not be valid or obligatory for any purpose unless so
countersigned. In case any officer of the Company who shall have signed any of
the Right Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates may nevertheless be countersigned by the Rights Agent,
and issued and delivered by the Company, with the same force and effect as
though the person who signed such Right Certificates had not ceased to be such
officer of the Company; and any Right Certificate may be signed on behalf of the
Company by any person who, at the actual date of the execution of such Right
Certificate, shall be a proper officer of the Company to sign such Right
Certificate, although at the date of the execution of this Rights Agreement any
such person was not such an officer of the Company.
(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at its office in New York, New York, books for
registration and transfer of the Right Certificates issued hereunder. Such books
shall show the names and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced by each of the Right Certificates,
the certificate number of each of the Right Certificates and the date of each of
the Right Certificates.
<PAGE>
14
Section 6. Transfer, Split-up, Combination and Exchange of
Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. (a)
Subject to the provisions of Section 7(e) and Section 15 hereof, at any time
after the Distribution Date, and at or prior to the Close of Business on the
earlier of the Redemption Date or the Expiration Date, any Right Certificate or
Certificates may be transferred, split-up, combined or exchanged for another
Right Certificate or Certificates, entitling the registered holder to purchase a
like number of Preferred Shares as the Right Certificate or Certificates
surrendered then entitled such holder to purchase. Any registered holder
desiring to transfer, split-up, combine or exchange any Right Certificate shall
make such request in writing delivered to the Rights Agent, and shall surrender
the Right Certificate or Certificates to be transferred, split-up, combined or
exchanged at the principal office of the Rights Agent. Thereupon the Rights
Agent shall, subject to Section 7(e) and Section 15 hereof, countersign and
deliver to the Person entitled thereto a Right Certificate or Certificates, as
the case may be, as so requested. The Company may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split-up, combination or exchange of Right
Certificates.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a valid Right Certificate, and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to them, and, at
the Company's request, reimbursement to the Company and the Rights Agent of all
reasonable expenses incidental thereto, and upon surrender to the Rights Agent
and cancelation of the Right Certificate if mutilated, the Company will make a
new Right Certificate of like tenor and deliver such new Right Certificate to
the Rights Agents for delivery to the registered owner in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Expiration Date of Rights;
Restriction on Transfer of Rights. (a) Each Right shall entitle the registered
holder thereof, upon the exercise thereof as provided herein, to purchase, for
the Purchase Price, at any time after the earlier of the Distribution Date or
the occurrence of a Triggering Event and at or prior to the earlier of (i) the
Close of Business on September 25, 2007 (the Close of Business on such date
being herein referred to as the "Expiration Date") or (ii) the Redemption Date,
one one-thousandth (1/1000th) of a Preferred Share, subject to adjustment from
time to time as provided in Sections 11 and 13 of this Rights Agreement.
(b) The registered holder of any Right Certificate may
exercise the Rights evidenced thereby (except as otherwise provided herein) in
whole or in part at any time after the Distribution Date upon surrender of the
Right Certificate, with the form of election to purchase on the reverse side
thereof duly executed, to the Rights Agent at the office of the Rights Agent in
New York, New York, together with
<PAGE>
15
payment of the Purchase Price for such one one-thousandth (1/1000th) of a
Preferred Share as to which the Rights are exercised, at or prior to the earlier
of (i) the Expiration Date or (ii) the Redemption Date.
(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase duly executed,
accompanied by payment of the Purchase Price for the Preferred Shares to be
purchased together with an amount equal to any applicable transfer tax, in
lawful money of the United States of America, in cash or by certified check or
money order payable to the order of the Company, the Rights Agent shall
thereupon promptly (i) requisition from any transfer agent of the Preferred
Shares (or make available, if the Rights Agent is the transfer agent)
certificates for the number of Preferred Shares to be purchased and the Company
hereby irrevocably authorizes its transfer agent to comply with all such
requests, (ii) when appropriate, requisition from the Company the amount of cash
to be paid in lieu of issuance of fractional shares in accordance with Section
15 hereof, (iii) promptly after receipt of such certificates, cause the same to
be delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by such
holder, and (iv) when appropriate, after receipt promptly deliver such cash to
or upon the order of the registered holder of such Right Certificate.
(d) In case the registered holder of any Right Certificate
shall exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights Agent and delivered to the registered holder of
such Right Certificate or to his duly authorized assigns, subject to the
provisions of Section 15 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, Rights, including Rights evidenced by certificates for Common Shares,
shall not at any time be transferable to an Acquiring Person or any Affiliate or
Associate of an Acquiring Person or to any Person who subsequently becomes an
Acquiring Person or Affiliate or Associate of an Acquiring Person, although at
the time of the purported transfer such Person was not an Acquiring Person or an
Affiliate or Associate thereof. Any attempt to transfer Rights to any such
Person shall be null and void as of the date of the purported transfer. Any
Right which has been the subject of any such purported transfer shall be null
and void, and thereafter may not be exercised by any Person (including any
subsequent transferee) for Preferred Shares or capital stock of the Company
pursuant to any provision hereof. The Company may require (or cause the Rights
Agent or any transfer agent of the Company to require) any Person who submits a
Right Certificate (or a certificate representing Common Shares which evidences,
or but for the provisions of this Section 7(e) would evidence, Rights) for
transfer on the registry books or to exercise the Rights represented thereby to
establish to the reasonable satisfaction of the Company that such Rights have
not been the subject of any purported transfer in violation of the provision of
this Section 7(e). The Company
<PAGE>
16
shall use all reasonable efforts to ensure that the provisions of this Section
7(e) are complied with, but shall have no liability to any holder of Right
Certificates or any other Person as a result of its failure to make any
determinations with respect to an Acquiring Person or its Affiliates or
Associates hereunder.
(f) Notwithstanding anything in this Rights Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder of any Right
Certificates upon the occurrence of any purported exercise as set forth in this
Section 7 unless such registered holder shall have (i) completed and signed the
certificate contained in the form of election to purchase set forth on the
reverse side of the Right Certificate surrendered for such exercise, and (ii)
provided such additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Affiliates or Associates thereof as the Company
shall reasonably request.
Section 8. Cancelation and Destruction of Right Certificates.
All Right Certificates surrendered for the purposes of exercise, transfer,
split-up, combination or exchange shall, if surrendered to the Company or to any
of its agents, be delivered to the Rights Agent for cancelation or in canceled
form, or, if surrendered to the Rights Agent, shall be canceled by it, and no
Right Certificates shall be issued in lieu thereof except as expressly permitted
by any of the provisions of this Rights Agreement. The Company shall deliver to
the Rights Agent for cancelation and retirement, and the Rights Agent shall so
cancel and retire, any Right Certificate purchased or acquired by the Company.
The Rights Agent shall deliver all canceled Right Certificates to the Company,
or shall, at the written request of the Company, destroy such canceled Right
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.
Section 9. Reservation and Availability of Preferred Shares.
(a) The Company covenants and agrees that it will cause to be reserved and kept
available out of its authorized and unissued Preferred Shares, free from
preemptive rights or any right of first refusal, a number of Preferred Shares
sufficient to permit the exercise in full of all outstanding Rights.
(b) The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all Preferred Shares delivered
upon exercise of Rights shall, at the time of delivery of the certificates for
such Preferred Shares (subject to payment of the Purchase Price), be duly and
validly authorized and issued and fully paid and non-assessable shares.
(c) So long as the Preferred Shares issuable upon the exercise
of Rights are to be listed on any national securities exchange, the Company
covenants and agrees to use its best efforts to cause, from and after such time
as the Rights become
<PAGE>
17
exercisable, all Preferred Shares reserved for such issuance to be listed on
such exchange upon official notice of issuance upon such exercise.
(d) The Company further covenants and agrees that it will pay
when due and payable any and all Federal and state transfer taxes and charges
which may be payable in respect of the issuance or delivery of Right
Certificates or of any Preferred Shares upon the exercise of the Rights. The
Company shall not, however, be required to pay any transfer tax which may be
payable in respect of any transfer or delivery of Right Certificates to a Person
other than, or in respect of the issuance or delivery of certificates for the
Preferred Shares in a name other than that of, the registered holder of the
Right Certificate evidencing Rights surrendered for exercise or to issue or
deliver any certificates for Preferred Shares upon the exercise of any Rights
until any such tax shall have been paid (any such tax being payable by the
holder of such Right Certificate at the time of surrender) or until it has been
established to the Company's satisfaction that no such tax is due.
(e) In the event that there shall not be sufficient authorized
but unissued Preferred Shares to permit the exercise or exchange of Rights in
accordance with Section 11, the Company covenants and agrees that it will take
all such action as may be necessary to authorize additional Preferred Shares for
issuance upon the exercise or exchange of Rights pursuant to Section 11;
provided, however, that if the Company is unable to cause the authorization of
additional Preferred Shares, then the Company shall, or in lieu of seeking any
such authorization, the Company may, to the extent necessary and permitted by
applicable law and any agreements or instruments in effect prior to the
Distribution Date to which it is a party, (i) upon surrender of a Right, pay
cash equal to the Purchase Price in lieu of issuing Preferred Shares and
requiring payment therefor, (ii) upon due exercise of a Right and payment of the
Purchase Price for each Preferred Share as to which such Right is exercised,
issue equity securities having a value equal to the value of the Preferred
Shares which otherwise would have been issuable pursuant to Section 11, which
value shall be determined by a nationally recognized investment banking firm
selected by the Board of Directors of the Company or (iii) upon due exercise of
a Right and payment of the Purchase Price for each Preferred Share as to which
such Right is exercised, distribute a combination of Preferred Shares, cash
and/or other equity and/or debt securities having an aggregate value equal to
the value of the Preferred Shares which otherwise would have been issuable
pursuant to Section 11, which value shall be determined by a nationally
recognized investment banking firm selected by the Board of Directors of the
Company. To the extent that any legal or contractual restrictions (pursuant to
agreements or instruments in effect prior to the Distribution Date to which it
is party) prevent the Company from paying the full amount payable in accordance
with the foregoing sentence, the Company shall pay to holders of the Rights as
to which such payments are being made all amounts which are not then restricted
on a pro rata basis
<PAGE>
18
as such payments become permissible under such legal or contractual restrictions
until such payments have been paid in full.
Section 10. Preferred Shares Record Date. Each Person in whose
name any certificate for Preferred Shares is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record of the
Preferred Shares represented thereby on, and such certificate shall be dated,
the date upon which the Right Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and any applicable transfer
taxes) was made; provided, however, that if the date of such surrender and
payment is a date upon which the Preferred Shares transfer books of the Company
are closed, such person shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated, the next succeeding Business Day
on which the Preferred Shares transfer books of the Company are open.
Section 11. Adjustment of Number and Kind of Shares and the
Purchase Price. The number and kind of shares subject to purchase upon the
exercise of each Right and the Purchase Price are subject to adjustment from
time to time as provided in this Section 11.
(a) In the event at any time after the date of this Rights
Agreement the Company shall (i) declare a dividend, or make a distribution, on
any class of its Common Shares payable in Common Shares, (ii) subdivide (by
stock split or otherwise) or split any class of its outstanding Common Shares
into a larger number of Common Shares or (iii) combine (by reverse stock split
or otherwise) or consolidate any class of its outstanding Common Shares into a
smaller number of Common Shares, then, in each such event, (1) the number of
Preferred Shares issuable upon exercise of each Right at the time of the record
date for such dividend or distribution or the effective date of such subdivision
or combination, shall be adjusted so that the number of Preferred Shares
thereafter issuable upon exercise of such Right shall equal the result obtained
by multiplying the number of Preferred Shares issuable upon exercise of each
Right at such time by a fraction, the numerator of which shall be the total
number of Rights outstanding immediately prior to such time and the denominator
of which shall be the total number of Rights outstanding immediately following
such time, and (2) the Purchase Price in effect at such time shall be adjusted
so that the Purchase Price thereafter shall equal the result obtained by
multiplying the Purchase Price in effect immediately prior to such time by the
fraction referred to in the preceding clause (1).
(b) In the event at any time after the date of this Rights
Agreement the Company shall (i) declare a dividend, or make a distribution, on
any series of its outstanding Preferred Shares payable in Preferred Shares, (ii)
subdivide (by stock split or otherwise) or split any series of its outstanding
Preferred Shares into a larger number of Preferred Shares, (iii) combine (by a
reverse stock split or otherwise) or consolidate
<PAGE>
19
any series of its outstanding Preferred Shares into a smaller number of
Preferred Shares or (iv) issue any shares of its capital stock in a
reclassification or change of any series of its outstanding Preferred Shares
(including any such reclassification or change in connection with a merger in
which the Company is the continuing or surviving corporation), then in each such
event, the number and kind of shares of capital stock issuable upon the exercise
of each Right at the time of the record date for such dividend or distribution
or the effective date of such subdivision, combination or reclassification shall
be adjusted so that the holder of any Right exercised after such time shall be
entitled to receive, for the Purchase Price, the aggregate number and kind of
shares of capital stock which such holder would have owned and been entitled to
receive by virtue of such dividend, subdivision, combination or reclassification
if such holder had exercised such Right immediately prior to such time.
(c) If at any time after the date of this Rights Agreement the
Company shall fix a record date for the issuance of rights, options or warrants
to all holders of any class of Common Shares or of any class or series of
Equivalent Shares entitling such holders (for a period expiring within 45
calendar days after such record date) to subscribe for or purchase Common Shares
or Equivalent Shares (or securities convertible into Common Shares or Equivalent
Shares) at a price per share (or having a conversion price per share, if a
security convertible into Common Shares or Equivalent Shares) less than the
Market Value of such Common Shares or Equivalent Shares on such record date,
then, in each such case, each Right outstanding immediately prior to such record
date shall thereafter evidence the right to purchase, for the Purchase Price,
that number of one one-thousandths (1/1000ths) of a Preferred Share obtained by
multiplying the number of one one-thousandths (1/1000ths) of a Preferred Share
issuable upon exercise of a Right immediately prior to such record date by a
fraction, the numerator of which shall be the number of Common Shares and
Equivalent Shares (if any) outstanding on such record date plus the number of
additional Common Shares or Equivalent Shares, as the case may be, to be offered
for subscription or purchase (or into which the convertible securities so to be
offered are initially convertible) and the denominator of which shall be the
total number of Common Shares and Equivalent Shares (if any) outstanding on such
record date plus the number of Common Shares or Equivalent Shares, as the case
may be, which the aggregate offering price of the total number of Common Shares
or Equivalent Shares, as the case may be, so to be offered (and/or the aggregate
initial conversion price of the convertible securities so to be offered) would
purchase at such Market Value. In case such subscription price may be paid in a
consideration, part or all of which shall be in a form other than cash, the
value of such consideration shall be as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent. Common Shares and Equivalent Shares owned by or
held for the account of the Company or any Subsidiary of the Company shall not
be deemed outstanding for the purpose of any such computation. Such adjustment
shall be made successively whenever such a record date is fixed; and in the
event that such rights,
<PAGE>
20
options or warrants are not so issued, each Right shall be adjusted to evidence
the right to receive that number of one one-thousandths (1/1000ths) of a
Preferred Share which such Right would have entitled the holder to receive, for
the Purchase Price, if such record date had not been fixed.
(d) If at any time after the date of this Rights Agreement the
Company shall fix a record date for the making of a distribution to all holders
of any class of Common Shares or of any class or series of Equivalent Shares
(including any such distribution made in connection with a merger in which the
Company is the continuing or surviving corporation or in connection with a
statutory share exchange with the Company after which the Company is not a
Subsidiary of any Acquiring Person or any Associate or Affiliate of any
Acquiring Person) of cash (other than a regular periodic cash dividend at a rate
not in excess of 125% of the rate of the last regular cash dividend theretofore
paid on the class of Common Shares, evidences of indebtedness, assets,
securities (other than Common Shares or Preferred Shares) or subscription
rights, options or warrants (excluding those referred to in Section 11(c)),
then, in each such case, each Right outstanding immediately prior to such record
date shall thereafter evidence the right to purchase, for the Purchase Price,
that number of one one-thousandths (1/1000ths) of a Preferred Share obtained by
multiplying the number of one one-thousandths (1/1000ths) of a Preferred Share
issuable upon exercise of such Right immediately prior to such record date by a
fraction, the numerator of which shall be the Market Value of such Common Shares
or Equivalent Shares on the record date and the denominator of which shall be
the Market Value of such Common Shares or Equivalent Shares on such record date
less the fair market value (as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent) of the portion of the cash, evidences of
indebtedness, assets or securities so to be distributed or of such subscription
rights, options or warrants applicable to one Common Share or Equivalent Share,
as the case may be. Such adjustments shall be made successively whenever such a
record date is fixed; and in the event that such distribution is not so made,
each Right shall be adjusted to evidence the right to receive that number of one
one-thousandths (1/1000ths) of a Preferred Share which such Right would have
entitled the holder to receive, for the Purchase Price, if such record date had
not been fixed.
(e) (i) If any Acquiring Person or any Affiliate or Associate
of any Acquiring Person, at any time after the date of this Rights Agreement,
directly or indirectly, shall merge into the Company or otherwise combine with
the Company and the Company shall be the continuing or surviving corporation of
such merger or combination and all the Common Shares shall remain outstanding
and unchanged, or shall effect a statutory share exchange with the Company after
which the Company is not a Subsidiary of any Acquiring Person or any Affiliate
or Associate of any Acquiring Person (such merger, share exchange or combination
being herein referred to as an "Affiliate Merger") then, in each such case,
proper provision shall be made so that each
<PAGE>
21
holder of a Right, except as provided in Section 7(e) hereof and below, shall
thereafter have a right to receive, upon exercise thereof for the Purchase Price
in accordance with the terms of this Rights Agreement, such number of Common
Shares as shall equal the result obtained by multiplying the Purchase Price by a
fraction, the numerator of which is the number of one one-thousandths
(1/1000ths) of a Preferred Share for which such Right is then exercisable and
the denominator of which is 50% of the Market Value of the Common Shares on the
date of the occurrence of such merger or combination. The Company shall not
consummate any Affiliate Merger unless upon such consummation it shall have
sufficient authorized Common Shares that have not been issued or reserved for
issuance to permit the exercise in full of the Rights in accordance with this
Section 11(e)(i) and unless prior thereto a registration statement under the
Securities Act on an appropriate form, with respect to the Common Shares
purchasable upon exercise of the Rights, shall be effective under the Securities
Act. The Company covenants and agrees to use its best efforts to:
(A) cause a registration statement under the Securities Act on
an appropriate form with respect to the Common Shares purchasable upon
exercise of the Rights, to remain effective (with a prospectus at all
times meeting the requirements of the Securities Act) until the
Expiration Date;
(B) qualify or register the Common Shares purchasable upon
exercise of the Rights under the blue sky laws of such jurisdictions as
may be necessary or appropriate; and
(C) list the Common Shares purchasable upon the exercise of
the Rights on each national securities exchange on which the Common
Shares were listed prior to the consummation of such Affiliate Merger.
(ii) Upon a Person becoming an Acquiring Person (such event
being herein referred to as a "Triggering Event"), proper provision shall be
made so that each holder of a Right, except as provided in Section 7(e), shall
thereafter have a right to receive, upon exercise thereof for the Purchase Price
in accordance with the terms of this Rights Agreement, such number of
thousandths (1/1,000s) of a Preferred Share as shall equal the result obtained
by multiplying the Purchase Price by a fraction, the numerator of which is the
number of thousandths (1/1,000s) of a Preferred Share for which a Right is then
exercisable and the denominator of which is 50% of the Market Value of the
Common Shares on the date on which a Person becomes an Acquiring Person. As soon
as practicable after a Person becomes an Acquiring Person (provided the Company
shall not have elected to make the exchange permitted by Section 11(e)(iii)(A)
for all outstanding Rights), the Company covenants and agrees to use its best
efforts to:
<PAGE>
22
(1) prepare and file a registration statement under the
Securities Act, on an appropriate form, with respect to the Preferred
Shares purchasable upon exercise of the Rights;
(2) cause such registration statement to become effective as
soon as practicable after such filing;
(3) cause such registration statement to remain effective
(with a prospectus at all times meeting the requirements of the
Securities Act) until the Expiration Date; and
(4) qualify or register the Preferred Shares purchasable upon
exercise of the Rights under the blue sky or securities laws of such
jurisdictions as may be necessary or appropriate.
The Company may temporarily suspend, for a period of time not
to exceed 90 calendar days after the date set forth in the immediately preceding
sentence, the exercisability of the Rights in order to prepare and file such
registration statement and permit it to become effective. Upon any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect.
(iii)(A) The Board of Directors of the Company may, at its
option, at any time after a Person becomes an Acquiring Person, mandatorily
exchange all or part of the then outstanding and exercisable Rights (which shall
not include Rights that shall have become null and void and nontransferable
pursuant to the provisions of Section 7(e)) for consideration per Right
consisting of either (x) one-half of the securities that would be issuable at
such time upon the exercise of one Right in accordance with Section 11(a),
11(b), 11(c), 11(e)(ii) or, if applicable, Section 9(e)(ii) or (iii) or, (y) if
applicable, the cash consideration specified in Section 9(e)(i) (the
consideration issuable per Right pursuant to this Section 11(e)(iii)(A) being
the "Exchange Consideration"). The Board of Directors of the Company may, at its
option, issue, in substitution for Preferred Shares, Common Shares in an amount
per Preferred Share equal to the Brink's Formula Number (each as defined in the
Company's Restated Articles of Incorporation) if there are sufficient authorized
but unissued Common Shares. If the Board of Directors of the Company elects to
exchange all or part of the Rights for the Exchange Consideration pursuant to
this Section 11(e)(iii)(A) prior to the physical distribution of the Right
Certificates, the Corporation may distribute the Exchange Consideration in lieu
of distributing Right Certificates, in which case for purposes of this Rights
Agreement holders of Rights shall be deemed to have simultaneously received and
surrendered for exchange Right Certificates on the date of such distribution.
<PAGE>
23
(B) Any action of the Board of Directors of the Company
ordering the exchange of any Rights pursuant to Section 11(e)(iii)(A) shall be
irrevocable and, immediately upon the taking of such action and without any
further action and without any notice, the right to exercise any such Right
pursuant to Section 11(e)(ii) shall terminate and the only right thereafter of a
holder of such Right shall be to receive the Exchange Consideration in exchange
for each such Right held by such holder or, if the Exchange Consideration shall
not have been paid or issued, to exercise any such Right pursuant to Section 13.
The Company shall promptly give public notice of any such exchange; provided,
however, that the failure to give, or any defect in, such notice shall not
affect the validity of such exchange. The Company promptly shall mail a notice
of any such exchange to all holders of such Rights at their last addresses as
they appear upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent for the Common
Shares. Any notice which is mailed in the manner herein provided shall be deemed
given, whether or not the holder receives the notice. Each such notice of
exchange will state the method by which the exchange of the Rights for the
Exchange Consideration will be effected and, in the event of any partial
exchange, the number of Rights which will be exchanged. Any partial exchange
shall be effected pro rata based on the number of Rights (other than Rights
which shall have become null and void and nontransferable pursuant to the
provisions of Section 7(e)) held by each holder of Rights.
(iv) If an event occurs which would require an adjustment
under both subparagraph (e)(i) or (e)(ii) of this Section 11 and paragraph (a),
(b), (c) or (d) of this Section 11, the adjustment provided for in paragraph
(a), (b), (c) or (d) of this Section 11 shall be in addition to, and shall be
made prior to, any adjustment required pursuant to subparagraph (e)(i) or
(e)(ii) of this Section 11; provided, however, that if a single event occurs
that represents both an Affiliate Merger or Triggering Event and a Business
Combination, the Rights exercisable upon such event shall be exercisable only in
a manner set forth in Section 13(a) of this Rights Agreement and no adjustment
shall be made pursuant to any paragraph of this Section 11.
(f) All calculations under this Section 11 shall be made to
the nearest hundred-thousandth of a share.
(g) If as a result of an adjustment made pursuant to Section
11(b) hereof, the holder of any Right thereafter exercised shall become entitled
to receive any shares of any class of capital stock of the Company other than
Preferred Shares, thereafter the number of such other shares so receivable upon
exercise of any Right shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the Preferred Shares contained in paragraphs (a) through (e),
inclusive, of this Section 11 and the provisions of Sections 7, 9, 10 and 13
hereof with respect to the Preferred Shares shall apply on like terms to any
such other shares.
<PAGE>
24
(h) All Rights originally issued by the Company subsequent to
any adjustment made to the amount of Preferred Shares or other capital stock
relating to a Right shall evidence the right to purchase, for the Purchase
Price, the adjusted number and kind of shares of capital stock purchasable from
time to time hereunder upon exercise of the Rights, all subject to further
adjustment as provided herein.
(i) Irrespective of any adjustment or change in the Purchase
Price or the number of Preferred Shares or number or kind of other shares of
capital stock issuable upon the exercise of the Rights, the Right Certificates
theretofore and thereafter issued may continue to express the terms which were
expressed in the initial Right Certificates issued hereunder.
(j) In any case in which this Section 11 shall require that an
adjustment be made effective as of a record date for a specified event, the
Company may elect to defer until the occurrence of such event the issuing to the
holder of any Right exercised after such record date the Preferred Shares and/or
other shares of capital stock or securities of the Company, if any, issuable
upon such exercise over and above the Preferred Shares and/or other shares of
capital stock or securities of the Company, if any, issuable before giving
effect to such adjustment; provided, however, that the Company shall deliver to
such holder a due bill or other appropriate instrument evidencing such holder's
right to receive such additional shares upon the occurrence of the event
requiring such adjustment.
(k) After the occurrence of an Affiliate Merger, the number of
Common Shares thereafter receivable upon exercise of any Right shall be subject
to adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Preferred Shares contained in
Sections 7, 9, 10, 11 and 13 hereof.
Section 12. Certificate of Adjustment. Whenever an adjustment
is made as provided in Section 11 or Section 13 hereof, the Company shall (a)
promptly prepare a certificate setting forth such adjustment and a brief
statement of the facts accounting for such adjustment, (b) promptly file with
the Rights Agent and with each transfer agent for the Preferred Shares a copy of
such certificate and (c) mail a brief summary thereof to each holder of a Right
Certificate in accordance with Section 26 hereof. The Rights Agent shall be
fully protected in relying on any such certificate and on any adjustment therein
contained.
Section 13. Consolidation, Merger, Share Exchange or Sale or
Transfer of Major Part of Assets. (a) In the event that, following the
Distribution Date, directly or indirectly, any transactions specified in the
following clauses (i), (ii) or (iii) hereof (each such transaction being herein
referred to as a "Business Combination") shall be consummated:
<PAGE>
25
(i) the Company shall consolidate with, or merge with and
into, any other Person;
(ii) any Person shall merge with and into the Company and in
connection with such merger, all or part of the Common Shares shall be
changed into or exchanged for capital stock or other securities of any
other Person or cash or any other property or the Company shall enter
into a statutory share exchange with any Person after which the Company
is a Subsidiary of such Person or any Affiliate or Associate of such
Person; or
(iii) the Company shall sell, lease, exchange or otherwise
transfer or dispose of (or one or more of its Subsidiaries shall sell,
lease, exchange or otherwise transfer or dispose of), in one or more
transactions, the Major Part of the assets of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons,
then, in each such case, proper provision shall be made so that each holder of a
valid Right shall thereafter have the right to receive, upon the exercise
thereof for the Purchase Price in accordance with the terms of this Rights
Agreement, the securities specified below:
(A) If the Principal Party in such Business Combination has
Registered Common Shares outstanding, each Right shall thereafter
represent the right to receive, upon the exercise thereof at the
Purchase Price in accordance with the terms of this Rights Agreement,
such number of Registered Common Shares of such Principal Party, free
and clear of all liens, encumbrances or other adverse claims, as shall
be equal to the result obtained by multiplying the Purchase Price by a
fraction, the numerator of which shall be the number of one
one-thousandths (1/1000ths) of a Preferred Share for which a Right was
exercisable immediately prior to consummation of such Business
Combination and the denominator of which shall be 50% of the Market
Value of each Registered Common Share of such Principal Party on the
date of such Business Combination.
(B) If the Principal Party in such Business Combination does
not have Registered Common Shares outstanding, each Right shall
thereafter represent the right to receive, upon the exercise thereof at
the Purchase Price in accordance with the terms of this Rights
Agreement, at the election of the holder of such Right at the time of
the exercise thereof:
<PAGE>
26
(1) such number of Common Shares of the Surviving
Person in such Business Combination as shall be equal to the
result obtained by multiplying the Purchase Price by a
fraction, the numerator of which shall be the number of one
one-thousandths (1/1000ths) of a Preferred Share for which a
Right was exercisable immediately prior to the consummation of
such Business Combination and the denominator of which shall
be 50% of the Book Value of each Common Share of such
Surviving Person immediately after giving effect to such
Business Combination; or
(2) such number of Common Shares of the Principal
Party in such Business Combination (if the Principal Party is
not also the Surviving Person in such Business Combination) as
shall be equal to the result obtained by multiplying the
Purchase Price by a fraction, the numerator of which shall be
the number of one one-thousandths (1/1000ths) of a Preferred
Share for which a Right was exercisable immediately prior to
the consummation of such Business Combination and the
denominator of which shall be 50% of the Book Value of each
Common Share of the Principal Party immediately after giving
effect to such Business Combination; or
(3) if the Principal Party in such Business
Combination is an Affiliate of one or more Persons which has
Registered Common Shares outstanding, such number of
Registered Common Shares of whichever of such Affiliates of
the Principal Party has Registered Common Shares with the
greatest aggregate Market Value on the date of consummation of
such Business Combination as shall be equal to the result
obtained by multiplying the Purchase Price by a fraction, the
numerator of which shall be the number of one one-thousandths
(1/1000ths) of a Preferred Share for which a Right was
exercisable immediately prior to the consummation of such
Business Combination and the denominator of which shall be 50%
of the Market Value of each Registered Common Share of such
Affiliate on the date of such Business Combination.
All Common Shares of any Person for which any Right may be exercised after
consummation of a Business Combination as provided in this Section 13(a) shall,
when issued upon exercise thereof in accordance with this Rights Agreement, be
validly issued, fully paid and nonassessable and free of preemptive rights,
rights of first refusal or any other restrictions or limitations on the transfer
or ownership thereof.
(b) After consummation of any Business Combination (i) each
issuer of Common Shares for which Rights may be exercised as set forth in
paragraph (a) of this Section 13 shall be liable for, and shall assume, by
virtue of such Business
<PAGE>
27
Combination, all the obligations and duties of the Company pursuant to this
Rights Agreement, (ii) the term "Company" shall thereafter be deemed to refer to
such issuer, (iii) each such issuer shall take such steps in connection with
such consummation as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to its
Common Shares thereafter deliverable upon the exercise of the Rights, and (iv)
the number of Common Shares of each such issuer thereafter receivable upon
exercise of any Right shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the Preferred Shares contained in Sections 7, 9, 10, 11 and 13
hereof.
(c) The Company shall not consummate any Business Combination
unless each issuer of Common Shares for which Rights may be exercised, as set
forth in paragraph (a) of this Section 13, shall have sufficient authorized
Common Shares that have not been issued or reserved for issuance to permit the
exercise in full of the Rights in accordance with this Section 13 and unless
prior thereto:
(i) a registration statement under the Securities Act on an
appropriate form, with respect to the Rights and the Common Shares of
such issuer purchasable upon exercise of the Rights, shall be effective
under the Securities Act; and
(ii) the Company and each such issuer shall have:
(A) executed and delivered to the Rights Agent a
supplemental agreement providing for the obligation of such
issuer to issue Common Shares upon the exercise of Rights in
accordance with the terms set forth in paragraphs (a) and (b)
of this Section 13 and further providing that such issuer, at
its own expense, will:
(I) use its best efforts to cause a
registration statement under the Securities Act on an
appropriate form, with respect to the Rights and the
Common Shares of such issuer purchasable upon
exercise of the Rights, to remain effective (with a
prospectus at all times meeting the requirements of
the Securities Act) until the Expiration Date;
(II) use its best efforts to qualify or
register the Rights and the Common Shares of such
issuer purchasable upon exercise of the Rights under
the blue sky or securities laws of such jurisdictions
as may be necessary or appropriate; and
<PAGE>
28
(III) use its best efforts to list the
Rights and the Common Shares purchasable upon
exercise of the Rights on each national securities
exchange on which the Common Shares were listed prior
to the consummation of the Business Combination or,
if the Common Shares were not listed on a national
securities exchange prior to the consummation of the
Business Combination, on a national securities
exchange;
(B) furnished to the Rights Agent an opinion of
independent counsel stating that such supplemental agreement
is a valid, binding and enforceable agreement of such issuer;
and
(C) filed with the Rights Agent a certificate of a
nationally recognized firm of independent accountants setting
forth the number of Common Shares of such issuer which may be
purchased upon the exercise of each Right after the
consummation of such Business Combination.
(d) In the event a Business Combination shall be consummated
at any time after the occurrence of an Affiliate Merger or a Triggering Event,
the Rights that have not been exercised prior to such time shall thereafter
become exercisable in the manner set forth in paragraph (a) of this Section 13.
Section 14. Additional Covenants. (a) Notwithstanding any
other provision of this Rights Agreement, no adjustment to the number of
Preferred Shares (or fractions of a share) or other shares of capital stock for
which a Right is exercisable or the number of Rights outstanding or associated
with each Common Share or any similar or other adjustment shall be made or be
effective if such adjustment would have the effect of reducing or limiting the
benefits the holders of the Rights would have had absent such adjustment,
including, without limitation, the benefits under Section 11 and Section 13
hereof, unless the terms of this Rights Agreement are amended so as to preserve
such benefits.
(b) The Company covenants and agrees that it shall not effect
any Business Combination or Affiliate Merger if at the time of, or immediately
after such Business Combination or Affiliate Merger, there are any rights,
options, warrants or other instruments of any Person which is a party to such
Business Combination or Affiliate Merger outstanding which would eliminate or
diminish the benefits intended to be afforded by the Rights.
(c) In the event the nature of the organization of any Person
shall preclude or limit the acquisition of Common Shares of such Person upon
exercise of the Rights as required by Section 13(a) hereof as a result of a
Business Combination, it
<PAGE>
29
shall be a condition to such Business Combination that such Person shall take
such steps (including, but not limited to, a reorganization) as may be necessary
to assure that the benefits intended to be derived under Section 13 hereof upon
the exercise of the Rights are assured to the holders thereof.
Section 15. Fractional Rights and Fractional Shares. (a) The
Company shall not be required to issue fractions of Rights or to distribute
Right Certificates which evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the registered holders of the Right Certificates
with regard to which such fractional Rights would otherwise be issuable, an
amount in cash equal to the same fraction of the current market value of a whole
Right. For the purposes of this Section 15(a), the current market value of a
whole Right shall be the closing price of the Rights for the Trading Day
immediately prior to the date on which such fractional Rights would have been
otherwise issuable. The closing price for any day shall be the last sale price,
regular way, or, in case no such sale takes place on such day, the average of
the closing bid and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to Rights
listed or admitted to trading on a national securities exchange or, if the
Rights are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by NASDAQ
or such other system then in use or, if on any such date the Rights are not
quoted by any such organization, the average of the closing bid and asked prices
as furnished by a professional market maker making a market in the Rights
selected by the Board of Directors of the Company. If on any such date no such
market maker is making a market in the Rights, the fair value of the Rights on
such date as determined in good faith by the Board of Directors of the Company
shall be used.
(b) The Company may, but shall not be required to, issue
fractions of shares upon exercise of the Rights or to distribute certificates
which evidence fractional shares. In lieu of fractional shares, the Company may
elect to (i) utilize a depositary arrangement as provided by the terms of the
Preferred Shares or (ii) in the case of a fraction of a share other than one
one-thousandth (1/1000th) of a share or any integral multiple thereof, pay to
the registered holders of Right Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction of the
current market value of one Preferred Share, if any are outstanding and publicly
traded (or the current market value of one Common Share in the event that the
Preferred Shares are not outstanding and publicly traded). For purposes of this
Section 15(b), the current market value of a Preferred Share (or Common Share)
shall be the closing price of a Preferred Share (or Common Share) (as determined
pursuant to the second sentence of Section 1(u) of this Rights Agreement) for
the Trading Day immediately prior to the date of such exercise.
<PAGE>
30
(c) The holder of a Right by the acceptance of the Rights
expressly waives his right to receive any fractional Rights or any fractional
shares upon exercise of a Right.
Section 16. Rights of Action. (a) All rights of action in
respect of this Rights Agreement are vested in the respective registered holders
of the Right Certificates (and, prior to the Distribution Date, the registered
holders of the Common Shares); and any registered holder of any Right
Certificate (or, prior to the Distribution Date, of the Common Shares), without
the consent of the Rights Agent or of the holder of any other Right Certificate
(or, prior to the Distribution Date, of the Common Shares), may, in his own
behalf and for his own benefit, enforce, and may institute and maintain any
suit, action or proceeding against the Company to enforce, or otherwise act in
respect of, his right to exercise the Rights evidenced by such Right Certificate
in the manner provided in such Right Certificate and in this Rights Agreement.
Without limiting the foregoing or any remedies available to the holders of
Rights, it is specifically acknowledged that the holders of Rights would not
have an adequate remedy at law for any breach of this Rights Agreement and shall
be entitled to specific performance of the obligations of any Person under, and
injunctive relief against actual or threatened violations of the obligations of
any Person subject to, this Rights Agreement.
(b) Any holder of Rights who prevails in an action to enforce
the provisions of this Rights Agreement shall be entitled to recover the
reasonable costs and expenses, including attorneys' fees, incurred in such
action.
Section 17. Transfer and Ownership of Rights and Right
Certificates. (a) Prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Shares.
(b) After the Distribution Date, the Right Certificates will
be transferable, subject to Section 7(e) hereof, only on the registry books of
the Rights Agent if surrendered at the principal office of the Rights Agent,
duly endorsed or accompanied by a proper instrument of transfer.
(c) The Company and the Rights Agent may deem and treat the
Person in whose name a Right Certificate (or, prior to the Distribution Date,
the associated Common Shares certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificates or the associated certificate for
Common Shares made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary.
<PAGE>
31
Section 18. Right Certificate Holder Not Deemed a Shareholder.
No holder, as such, of any Right Certificate shall be entitled to vote or
receive dividends or be deemed, for any purpose, the holder of the Preferred
Shares or of any other securities of the Company which may at any time be
issuable on the exercise of the Rights represented thereby, nor shall anything
contained herein or in any Right Certificate be construed to confer upon the
holder of any Right Certificate, as such, any of the rights of a shareholder of
the Company, including, without limitation, any right to vote for the election
of directors or upon any matter submitted to shareholders at any meeting
thereof, or to give or withhold consent to any corporate action, or to receive
notice of meetings or other actions affecting shareholders (except as provided
in Section 25 hereof), or to receive dividends or other distributions or
subscription rights, or otherwise, until the Right or Rights evidenced by such
Right Certificate shall have been exercised in accordance with the provisions
hereof.
Section 19. Concerning the Rights Agent. (a) The Company
agrees to pay to the Rights Agent reasonable compensation for all services
rendered by it hereunder and from time to time, on demand of the Rights Agent,
its reasonable expenses and counsel fees and other disbursements incurred in the
administration and execution of this Rights Agreement and the exercise and
performance of its duties hereunder. The Company also agrees to indemnify the
Rights Agent for, and to hold it harmless against, any loss, liability, or
expense, incurred without gross negligence, bad faith or wilful misconduct on
the part of the Rights Agent, for anything done or omitted by the Rights Agent
in connection with the acceptance and administration of this Rights Agreement,
including the costs and expenses of defending against any claim of liability
arising therefrom, directly or indirectly.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Rights Agreement in reliance upon any
Right Certificate or certificate for Common Shares or for other securities of
the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
Person or Persons.
Section 20. Merger or Consolidation or Change of Rights Agent.
(a) Any corporation into which the Rights Agent or any successor Rights Agent
may be merged or with which it may be consolidated, or any corporation resulting
from any merger or consolidation to which the Rights Agent or any successor
Rights Agent shall be a party, or any corporation succeeding to the stock
transfer or corporate trust business of the Rights Agent or any successor Rights
Agent, shall be the successor to the Rights Agent under this Rights Agreement
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, provided that such
<PAGE>
32
corporation would be eligible for appointment as a successor Rights Agent under
the provisions of Section 22 hereof. In case, at the time such successor Rights
Agent shall succeed to the agency created by this Rights Agreement, any of the
Right Certificates shall have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of the predecessor Rights
Agent and deliver such Right Certificates so countersigned; and in case at that
time any of the Right Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Right Certificates either in the
name of the predecessor Rights Agent or in the name of the successor Rights
Agent; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Rights Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Right Certificates so countersigned; and in
case at that time any of the Right Certificates shall not have been
countersigned, the Rights Agent may countersign such Right Certificates either
in its prior name or in its changed name; and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates and in
this Rights Agreement.
Section 21. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this Rights Agreement upon the
following terms and conditions, by all of which the Company and the holders of
Right Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Company), and the opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Rights Agreement the Rights Agent shall deem it necessary or desirable that any
fact or matter (including, without limitation, the identity of any Acquiring
Person) be proved or established by the Company prior to taking or suffering any
action hereunder, such fact or matter (unless other evidence in respect thereof
be herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board, the
President, the Chief Financial Officer, a Vice President, the Treasurer or the
Secretary of the Company and delivered to the Rights Agent; and such certificate
shall be full authorization to the Rights Agent for any action taken or suffered
in good faith by it under the provisions of this Rights Agreement in reliance
upon such certificate.
<PAGE>
33
(c) The Rights Agent shall be liable hereunder only for its
own gross negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Rights Agreement or
in the Right Certificates (except as to its countersignature thereof) or be
required to verify the same, but all such statements and recitals are and shall
be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Rights Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in respect of
the validity or execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Rights Agreement or in any Right
Certificate; nor shall it be responsible for any adjustment required under the
provisions of Section 11 or 13 hereof or responsible for the manner, method or
amount of any such adjustment or the ascertaining of the existence of facts that
would require any such adjustment (except with respect to the exercise of Rights
evidenced by Right Certificates after actual notice of any such adjustment); nor
shall it by any act hereunder be deemed to make any representation or warranty
as to the authorization or reservation of any Preferred Shares or Common Shares
to be issued pursuant to this Rights Agreement or any Right Certificate or as to
whether any Preferred Shares or Common Shares will, when so issued, be validly
authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing by
the Rights Agent of the provisions of this Rights Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder from
any one of the Chairman of the Board, the President, any Vice President, the
Secretary or the Treasurer of the Company, and to apply to such officers for
advice or instructions in connection with its duties and it shall not be liable
for any action taken or suffered to be taken by it in good faith in accordance
with instructions of any such officer.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not the Rights
Agent under this Rights Agreement.
<PAGE>
34
Nothing herein shall preclude the Rights Agent from acting in any other capacity
for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct provided reasonable care was exercised in
the selection and continued employment thereof.
(j) ANYTHING IN THIS AGREEMENT TO THE CONTRARY
NOTWITHSTANDING, IN NO EVENT SHALL THE RIGHTS AGENT BE LIABLE FOR SPECIAL,
INDIRECT OR CONSEQUENTIAL LOSS OR DAMAGE OF ANY KIND WHATSOEVER (INCLUDING, BUT
NOT LIMITED TO, LOST PROFITS), EVEN IF THE RIGHTS AGENT HAS BEEN ADVISED OF THE
LIKELIHOOD OF SUCH LOSS OR DAMAGE AND REGARDLESS OF THE FORM OF ACTION.
Section 22. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Rights Agreement upon 30 days' notice in writing mailed to the Company and to
each transfer agent of the Common Shares and the Preferred Shares by registered
or certified mail, and to the holders of the Right Certificates by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent upon
30 days' notice in writing, mailed to the Rights Agent or successor Rights
Agent, as the case may be, and to each transfer agent of the Common Shares and
the Preferred Shares by registered or certified mail, and to the holders of the
Right Certificates by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall appoint
a successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after giving notice of such removal or
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Right Certificate
(who shall, with such notice, submit his Right Certificate for inspection by the
Company), then the registered holder of any Right Certificate may apply to any
court of competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a court,
shall be a corporation organized and doing business under the laws of the United
States or of any state of the United States, in good standing, having an office
in the State of New York, which is authorized under the laws of the State of New
York and the rules of the New York Stock Exchange to exercise stock transfer or
corporate trust powers and is subject to supervision or examination by Federal
or state authority and which has at the time of its appointment as Rights Agent
a combined capital and surplus of at least $50,000,000. After appointment, the
successor Rights Agent shall be vested with the same powers,
<PAGE>
35
rights, duties and responsibilities as if it had been originally named as Rights
Agent without further act or deed; but the predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any property at the time held
by it hereunder, and execute and deliver any further assurance, conveyance, act
or deed necessary for the purpose. Not later than the effective date of any such
appointment, the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Shares and the
Preferred Shares, and mail a notice thereof in writing to the registered holders
of the Right Certificates. Failure to give any notice provided for in this
Section 22, however, or any defect therein shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the appointment of
the successor Rights Agent, as the case may be.
Section 23. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Rights Agreement or of the Rights
to the contrary, the Company may, at its option, issue new Right Certificates
evidencing Rights in such form as may be approved by its Board of Directors to
reflect any adjustment or change made in accordance with the provisions of this
Rights Agreement. In addition, in connection with the issuance or sale of Common
Shares following the Distribution Date and prior to the earlier of the
Redemption Date or the Expiration Date, the Company (a) shall, with respect to
Common Shares so issued or sold pursuant to the exercise of stock options or
under any employee plan or arrangement, or upon the exercise, conversion or
exchange of securities, notes or debentures issued by the Company, and (b) may,
in any other case, if deemed necessary or appropriate by the Board of Directors
of the Company, issue Right Certificates representing the appropriate number of
Rights in connection with such issuance or sale; provided, however, that (i) no
such Right Certificate shall be issued if, and to the extent that, the Company
shall be advised by counsel that such issuance would create a significant risk
of material adverse tax consequences to the Company or the Person to whom such
Right Certificate would be issued, and (ii) no such Right Certificate shall be
issued if, and to the extent that, appropriate adjustment shall otherwise have
been made in lieu of the issuance thereof.
Section 24. Redemption and Termination. (a) The Board of
Directors of the Company may, at its option, at any time prior to the earliest
of (i) such time as a Person becomes an Acquiring Person or (ii) the Expiration
Date, order the redemption of all, but not less than all, the then outstanding
Rights at a Redemption Price of $.01 per Right (which may, in the discretion of
the Board of Directors of the Company, in lieu of cash be paid with securities
deemed by the Board of Directors, in the exercise of its sole discretion, to be
equivalent in value thereto); provided, however, that immediately upon and after
the date that an Acquiring Person becomes an Acquiring Person, the Rights may be
redeemed only if the Board of Directors of the Company, with the concurrence of
a majority of the Disinterested Directors then in office, determines that such
redemption is, in their judgment, in the best interests of the Company and its
shareholders.
<PAGE>
36
(b) Immediately upon the action of the Board of Directors of
the Company ordering the redemption of the Rights, and without any further
action and without any notice, the right to exercise the Rights will terminate
and the only right thereafter of the holders of Rights shall be to receive the
Redemption Price. Within ten calendar days after the action of the Board of
Directors of the Company ordering the redemption of the Rights, the Company
shall give notice of such redemption to the holders of the then outstanding
Rights by mailing such notice to all such holders at their last addresses as
they appear upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent for the Common
Shares. Each such notice of redemption will state the method by which the
payment of the Redemption Price will be made. The notice, if mailed in the
manner herein provided, shall be conclusively presumed to have been duly given,
whether or not the holder of Rights receives such notice. In any case, failure
to give such notice by mail, or any defect in the notice, to any particular
holder of Rights shall not affect the sufficiency of the notice to other holders
of Rights.
Section 25. Notice of Certain Events. (a) In case the Company
shall propose (i) to take any action of the type described in paragraph (a),
(b), (c) or (d) of Section 11 hereof that would require an adjustment
thereunder, (ii) to effect any Business Combination or (iii) to effect the
liquidation, dissolution or winding up of the Company, then, in such case, the
Company shall give to each holder of a Right Certificate, in accordance with
Section 26 hereof, a notice of such proposed action, which shall specify any
record date for the purposes of determining any participation therein by the
holders of the Preferred Shares, or the date on which such action is to take
place and the date of any participation therein by the holders of the Preferred
Shares, if any such date is to be fixed, and such notice shall be so given at
least 20 days prior to any such record date, the taking of such action or the
date of participation therein by the holders of the Preferred Shares, whichever
shall be the earliest.
(b) In case an Affiliate Merger or Triggering Event shall
occur, then, in any such case, the Company shall as soon as practicable
thereafter give to each holder of a Right Certificate, in accordance with
Section 26 hereof, a notice of the occurrence of such Affiliate Merger or
Triggering Event, which shall specify the Affiliate Merger and the Triggering
Event and the consequences of such Affiliate Merger or Triggering Event to
holders of Rights under Section 11(e) hereof.
Section 26. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any Right
Certificate to or on the Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
<PAGE>
37
The Pittston Company
P.O. Box 4229
1000 Virginia Center Parkway
Glen Allen, VA 23058-4229
Attention: Secretary
Subject to the provisions of Section 22 hereof, any notice or demand authorized
by this Rights Agreement to be given or made by the Company or by the holder of
any Right Certificate to or on the Rights Agent shall be sufficiently given or
made if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Company) as follows:
BankBoston, N.A.
c/o Equiserve Limited Partnership
150 Royall Street
Canton, MA 02021
Attention: Client Administrations
Notices or demands authorized by this Rights Agreement to be given or made by
the Company or the Rights Agent to any holder of a Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Rights Agent or, prior to the Distribution Date, on the registry
books of the transfer agent for the Common Shares.
Section 27. Supplements and Amendments. At any time prior to
the Distribution Date and subject to the last sentence of this Section 27, the
Company and the Rights Agent shall, if the Company so directs, supplement or
amend any provision of this Rights Agreement (including, without limitation, the
date on which the Distribution Date shall occur) without the approval of any
holder of the Rights. From and after the Distribution Date and subject to
applicable law, the Company and the Rights Agent shall, if the Company so
directs, amend this Rights Agreement without the approval of any holders of
Right Certificates (i) to cure any ambiguity or to correct or supplement any
provision contained herein which may be defective or inconsistent with any other
provision of this Rights Agreement, or (ii) to make any other provisions in
regard to matters or questions arising hereunder which the Company may deem
necessary or desirable and which shall not adversely affect the interests of the
holders of Right Certificates (other than an Acquiring Person or an Affiliate or
Associate of an Acquiring Person). Upon the delivery of a certificate from an
appropriate officer of the Company which states that a proposed supplement or
amendment to this Rights Agreement is in compliance with the provisions of this
Section 27, the Rights Agent
<PAGE>
38
shall execute such supplement or amendment. Notwithstanding anything contained
in this Rights Agreement to the contrary, (1) at any time when there shall be an
Acquiring Person, this Rights Agreement may be supplemented or amended only if
the Board of Directors of the Company, with the concurrence of a majority of the
Disinterested Directors then in office, determines that such supplement or
amendment is in their judgment in the best interests of the Company and its
shareholders and (2) no supplement or amendment to this Rights Agreement shall
be made which reduces the Redemption Price or provides for an earlier Expiration
Date.
Section 28. Successors. All the covenants and provisions of
this Rights Agreement by or for the benefit of the Company or the Rights Agent
shall bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 29. Benefits of this Rights Agreement; Determinations
and Actions by the Board of Directors, etc. (a) Nothing in this Rights Agreement
shall be construed to give to any persons or corporation other than the Company,
the Rights Agent and the registered holders of the Right Certificates (and,
prior to the Distribution Date, the Common Shares) any legal or equitable right,
remedy or claim under this Rights Agreement; but this Rights Agreement shall be
for the sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Right Certificates (and, prior to the Distribution
Date, the Common Shares).
(b) The Board of Directors of the Company (with, where
specifically provided for herein, the concurrence of a majority of the
Disinterested Directors then in office) shall have the exclusive power and
authority to administer this Rights Agreement and to exercise all rights and
power specifically granted to the Board of Directors of the Company (with, where
specifically provided for herein, the concurrence of a majority of the
Disinterested Directors then in office) or to the Company, or as may be
necessary or advisable in the administration of this Rights Agreement,
including, without limitation, the right and power to (i) interpret the
provisions of this Rights Agreement, and (ii) make all determinations deemed
necessary or advisable for the administration of this Rights Agreement
(including, without limitation, a determination to redeem or not redeem the
Rights or to amend this Rights Agreement and a determination of whether a
Triggering Event has occurred). All such actions, calculations, interpretations,
and determinations (including, for purposes of clause (y) below, all omissions
with respect to the foregoing) which are done or made by the Board of Directors
of the Company (with, where specifically provided for herein, the concurrence of
a majority of the Disinterested Directors then in office) in good faith, shall
(x) be final, conclusive and binding on the Company, the Rights Agent, the
holders of the Rights and all other parties, and (y) not subject the Board of
Directors of the Company or the Disinterested Directors to any liability to the
holders of the Rights.
<PAGE>
39
Section 30. Severability. If any term, provision, covenant or
restriction of this Rights Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this Rights
Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated.
Section 31. Governing Law. This Rights Agreement and each
Right Certificate issued hereunder shall be deemed to be a contract made under
the laws of the Commonwealth of Virginia and for all purposes shall be governed
by and construed in accordance with the laws of such Commonwealth applicable to
contracts to be made and performed entirely within such Commonwealth; provided,
however, that the provisions of Sections 19, 20, 21 and 22 of this Rights
Agreement shall be governed by and construed in accordance with the laws of the
State of New York.
Section 32. Counterparts. This Rights Agreement may be
executed in any number of counterparts and each of such counterparts shall for
all purposes be deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument.
Section 33. Descriptive Headings. Descriptive headings of the
several Sections of this Rights Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the provisions
of this Rights Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
40
IN WITNESS WHEREOF, the parties hereto have caused this Rights
Agreement to be duly executed and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
THE PITTSTON COMPANY,
by
-------------------------------
Name:
Title:
Attest:
by
----------------------------
Name:
Title:
BANKBOSTON, N.A., as Rights Agent,
by
-------------------------------
Name:
Title:
Attest:
by
----------------------------
Name:
Title:
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4
<SEQUENCE>4
<DESCRIPTION>EXHIBIT 4(A)(II)
<TEXT>
<PAGE>
EXHIBIT A
TO THE RIGHTS AGREEMENT
[Form of Right Certificate]
Certificate No. BRR- ___________________ Rights
NOT EXERCISABLE AFTER SEPTEMBER 25, 2007, OR EARLIER IF REDEEMED. THE RIGHTS
ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.01 PER RIGHT, ON
THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER NO CIRCUMSTANCES MAY THIS
RIGHT CERTIFICATE OR THE RIGHTS EVIDENCED BY THIS RIGHT CERTIFICATE BE
TRANSFERRED TO AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN
ACQUIRING PERSON (AS EACH SUCH TERM IS DEFINED IN THE RIGHTS AGREEMENT) OR TO
ANY PERSON WHO SUBSEQUENTLY BECOMES SUCH A PERSON AND ANY PURPORTED TRANSFER
OF RIGHTS TO ANY SUCH PERSON SHALL BE, AND SHALL RENDER THE RIGHTS PURPORTED
TO BE TRANSFERRED, NULL AND VOID.
Pittston Brink's Group Rights Certificate
THE PITTSTON COMPANY
This certifies that
, or registered assigns, is the registered owner of the number of Pittston
Brink's Group Rights (the "Rights") set forth above, each of which entitles the
owner thereof, subject to the terms, provisions and conditions of the Amended
and Restated Rights Agreement dated as of January 14, 2000 (the "Rights
Agreement"), between the Pittston Company, a Virginia corporation (the
"Company"), and BankBoston, N.A., as Rights Agent (the "Rights Agent"), unless
the Rights evidenced hereby shall have been previously redeemed, to purchase
from the Company at any time after the Distribution Date (as defined in the
Rights Agreement) and prior to 5:00 p.m., New York City time, on September 25,
2007 (the "Expiration Date"), at the principal office of the Rights Agent, or
its successors as Rights Agent, in New York, New York, one one-thousandth
(1/1000th) of a fully paid, nonassessable share of Series A Participating
Cumulative Preferred Stock, par value $10 per share, of the Company (the
"Preferred Shares"), at a purchase price of $60.00 per one one-thousandth
(1/1000th) of a share (the "Purchase Price"), upon presentation and surrender of
this Right Certificate with the Form of Election to Purchase duly executed.
The Purchase Price and the number and kind of shares which may be
purchased upon exercise of each Right evidenced by this Right Certificate, as
set forth above, are the Purchase Price and the number and kind of shares which
may be so purchased as of January 14, 2000. As provided in the Rights Agreement,
the Purchase Price and the number and kind of shares which may be purchased
upon the exercise of each Right
<PAGE>
2
evidenced by this Right Certificate are subject to modification and adjustment
upon the happening of certain events.
Under no circumstances may this Right Certificate or the Rights evidenced
by this Right Certificate be transferred to an Acquiring Person or an Affiliate
or Associate of an Acquiring Person (as each such term is defined in the Rights
Agreement) or to any Person who subsequently becomes such a Person and any
purported transfer of Rights to any such Person shall be, and shall render the
Rights purported to be transferred, null and void.
This Right Certificate is subject to all the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
reference to the Rights Agreement is hereby made for a full description of the
rights, limitations of rights, obligations, duties and immunities hereunder of
the Rights Agent, the Company and the holders of the Right Certificates. Copies
of the Rights Agreement are on file at the above-mentioned office of the Rights
Agent and are also available from the Company upon written request.
This Right Certificate, with or without other Right Certificates, upon
surrender at the principal stock transfer or corporate trust office of the
Rights Agent, may be exchanged for another Right Certificate or Right
Certificates of like tenor and date evidencing Rights entitling the holder to
purchase a like aggregate number and kind of shares as the Rights evidenced by
the Right Certificate or Right Certificates surrendered shall have entitled such
holder to purchase. If this Right Certificate shall be exercised in part, the
holder shall be entitled to receive upon surrender hereof another Right
Certificate or Right Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Right Certificate may be redeemed by the Company at its option at a
redemption price (in cash or securities deemed by the Board of Directors to be
equivalent in value) of $.01 per Right at any time prior to the earliest of (i)
such time as a Person becomes an Acquiring Person or (ii) the Expiration Date;
provided, however, that after there shall be an Acquiring Person the Rights may
be redeemed only if a majority of the Disinterested Directors determines that
such redemption is in the best interests of the Company (all terms as defined in
the Rights Agreement).
The Company may, but shall not be required to, issue fractions of
Preferred Shares or distribute certificates which evidence fractions of
Preferred Shares upon the exercise of any Right or Rights evidenced hereby. In
lieu of issuing fractional shares, the Company may elect to make a cash payment
as provided in the Rights Agreement or to issue certificates or utilize a
depository arrangement as provided in the terms of the Preferred Shares.
No holder of this Right Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of the Preferred Shares or of
any other securities of the Company which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the
<PAGE>
3
holder hereof, as such, any of the rights of a shareholder of the Company,
including, without limitation, any right to vote for the election of directors
or upon any matter submitted to shareholders at any meeting thereof, or to give
or withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting shareholders (except as provided in the Rights
Agreement), or to receive dividends or other distributions or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
certificate shall have been exercised as provided in accordance with the
provisions of the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal.
Dated as of:
THE PITTSTON COMPANY,
by
-------------------------------
Name:
Title:
Attest:
by
------------------------------
Name:
Title:
Countersigned:
BANKBOSTON, N.A., as Rights Agent,
by
------------------------------
Authorized Signature
<PAGE>
[On Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if
such holder desires to transfer the Rights
represented by this Right Certificate.)
FOR VALUE RECEIVED _____________________________________
hereby sells, assigns and transfers unto_______________________________________
- --------------------------------------------------------------------------------
(Please print name and address of transferee)
- --------------------------------------------------------------------------------
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint ____________________ Attorney, to
transfer the within Right Certificate on the books of the within-named Company,
with full power of substitution.
Dated: ___________________, 200_
-------------------------------------------------
Signature
Signature Guaranteed:
<PAGE>
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Right Certificate [ ] is [ ] is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of any such Acquiring Person (as such terms are
defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it [ ]
did [ ] did not acquire the Rights evidenced by this Right Certificate from
any Person who is or was an Acquiring Person or an Affiliate or Associate of
an Acquiring Person.
Dated: , 200_
-------------------------------------------------
Signature
Signature Guaranteed:
NOTICE
The signature on the foregoing Form of Assignment and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>5
<DESCRIPTION>EXHIBIT 10(B)
<TEXT>
<PAGE>
EXHIBIT 10(b)
-----------------------------------------------------
KEY EMPLOYEES' DEFERRED
COMPENSATION PROGRAM
OF
THE PITTSTON COMPANY
-----------------------
As Amended and Restated
as of January 14, 2000
-----------------------
-----------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
PREAMBLE ............................................................................... 1
ARTICLE I DEFINITIONS.................................................................... 2
ARTICLE II ADMINISTRATION................................................................. 7
ARTICLE III DEFERRAL OF CASH INCENTIVE PAYMENTS............................................ 7
SECTION 1 Definitions................................................................. 8
SECTION 2 Eligibility................................................................. 8
SECTION 3 Deferral of Cash Incentive Payments ....................................... 9
SECTION 4 Matching Incentive Contributions........................................... 10
SECTION 5 Irrevocability of Election................................................. 10
SECTION 6 Conversion of New Deferrals and
Matching Incentive Contributions
to Brink's Units.............................................................10
SECTION 7 Conversion of Existing Incentive Accounts
to Brink's Units........................................................... 11
SECTION 8 Adjustments ............................................................... 11
SECTION 9 Dividends and Distributions................................................ 12
SECTION 10 Allocation of Units as of July 1, 1994..................................... 12
SECTION 11 Minimum Distribution....................................................... 12
ARTICLE IV DEFERRAL OF SALARY............................................................. 13
SECTION 1 Definitions................................................................. 13
SECTION 2 Eligibility................................................................. 13
SECTION 3 Deferral of Salary.......................................................... 14
SECTION 4 Matching Salary Contributions............................................... 15
SECTION 5 Irrevocability of Election.................................................. 16
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Page
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<S> <C>
SECTION 6 Conversion of New Deferrals, Matching
Salary Contributions and Dividends to
to Brink's Units............................................................ 16
SECTION 7 Conversion of Existing Incentive Accounts
to Brink's Units.............................................................18
SECTION 8 Adjustments................................................................. 19
SECTION 9 Dividends and Distributions................................................. 19
SECTION 10 Minimum Distribution........................................................ 20
ARTICLE V SUPPLEMENTAL SAVINGS PLAN...................................................... 20
SECTION 1 Definitions................................................................. 20
SECTION 2 Eligibility................................................................. 21
SECTION 3 Deferral of Compensation.................................................... 22
SECTION 4 Matching Contributions...................................................... 24
SECTION 5 Irrevocability of Election.................................................. 25
SECTION 6 Conversion of New Deferrals, Matching
Contributions and Dividends to Brink's
Units....................................................................... 25
SECTION 7 Conversion of Existing Incentive
Accounts to Brink's Units................................................... 28
SECTION 8 Adjustments................................................................. 29
SECTION 9 Dividends and Distributions................................................. 29
ARTICLE VI DEFERRAL OF PERFORMANCE AWARDS..................................................30
SECTION 1 Definitions..................................................................30
SECTION 2 Eligibility..................................................................30
SECTION 3 Deferral of Cash Performance Payments........................................31
SECTION 4 Irrevocability of Election...................................................31
SECTION 5 Conversion to Units..........................................................31
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 6 Adjustments..................................................................32
SECTION 7 Dividends and Distributions..................................................32
SECTION 8 Minimum Distribution.........................................................33
SECTION 9 Effective Date...............................................................33
ARTICLE VII DISTRIBUTIONS.................................................................. 34
SECTION 1 Certain Payments on Termination of
Employment...................................................................34
SECTION 2 Payments Attributable to Matching
Incentive Contributions and Matching
Salary Contributions on Termination of
Employment...................................................................35
SECTION 3 In-Service Distributions.....................................................37
ARTICLE VIII DESIGNATION OF BENEFICIARY..................................................... 37
ARTICLE IX MISCELLANEOUS.................................................................. 39
SECTION 1 Nontransferability of Benefits...............................................39
SECTION 2 Notices......................................................................39
SECTION 3 Limitation on Rights of Employee.............................................40
SECTION 4 No Contract of Employment....................................................40
SECTION 5 Withholding..................................................................40
SECTION 6 Amendment and Termination....................................................41
</TABLE>
<PAGE>
Key Employees' Deferred Compensation Program of
The Pittston Company
As Amended and Restated
As of January 14, 2000
PREAMBLE
The Key Employees' Deferred Compensation Program of The Pittston
Company (the "Program"), as amended and restated as of January 14, 2000, is a
continuation and improvement of the Program as in effect immediately prior to
such date. Effective January 14, 2000, the Program is amended and restated to
reflect the exchange of .4848 of a share of Pittston Brink's Group Common Stock
for each outstanding share of Pittston BAX Group Common Stock and .0817 of a
share of Pittston Brink's Group Common stock for each outstanding share of
Pittston Minerals Group Common Stock. In addition, effective as of January 14,
2000, participants may defer amounts payable under The Pittston Company
Management Performance Improvement Plan.
The Program continues to provide an opportunity to certain employees to
defer receipt of (a) all or part of their cash incentive payments awarded under
the Key Employees Incentive Plan of The Pittston Company; (b) up to 50% of their
base salary; and (c) any or all amounts that are prevented from being deferred
as a matched contribution (and the related matching contribution) under the
Savings-Investment Plan of The Pittston Company and Its Subsidiaries ("Savings
Plan")) as a result of limitations imposed
<PAGE>
2
by Sections 401(a)(17), 401(k)(3), 402(g) and 415 of the Internal Revenue Code
of 1986, as amended (the "Code").
In order to align the interests of participants more closely to the
long-term interests of The Pittston Company (the "Company") and its
shareholders, effective June 1, 1995, the Program was amended to provide
matching contributions with respect to certain cash incentive awards and salary
deferrals and to provide that an amount equivalent to matching contributions
that are not eligible to be made under the Savings Plan as a result of
limitations imposed by Code Section 401(m)(2) shall be allocated under this
Program.
The Program was again amended and restated effective as of January 19,
1996, to reflect the redesignation of the Pittston Services Group Common Stock
as Brink's Group Common Stock and the creation of a new class of common stock
designated as Pittston BAX Group Common Stock.
The Program is an unfunded plan maintained primarily for the purpose of
providing deferred compensation for a select group of management or highly
compensated employees, within the meaning of Section 201(2) of the Employee
Retirement Income Security Act of 1974, as amended.
ARTICLE I
Definitions
Wherever used in the Program, the following terms shall have the
meanings indicated:
<PAGE>
3
BAX Exchange Ratio: The ratio whereby .4848 of a share of Brink's Stock
will be exchanged for each outstanding share of BAX Stock on the Exchange Date.
BAX Stock: Pittston BAX Group Common Stock, par value $1.00 per share.
BAX Unit: The equivalent of one share of BAX Stock credited to an
Employee's Incentive Account.
Board: The Board of Directors of the Company.
Brink's Stock: Pittston Brink's Group Common Stock, par value $1.00 per
share.
Brink's Unit: The equivalent of one share of Brink's Stock credited to
an Employee's Incentive Account.
Change in Control: A Change in Control shall be deemed to occur (a)
upon the approval of the shareholders of the Company (or if such approval is not
required, the approval of the Board) of (i) any consolidation or merger of the
Company in which the Company is not the continuing or surviving corporation or
pursuant to which the shares of Brink's Stock would be converted into cash,
securities or other property other than a consolidation or merger in which
holders of the total voting power in the election of directors of the Company of
Brink's Stock outstanding (exclusive of shares held by the Company's affiliates)
(the "Total Voting Power") immediately prior to the consolidation or merger will
have the same proportionate ownership of the total voting power in the election
of directors of the surviving
<PAGE>
4
corporation immediately after the consolidation or merger, or (ii) any sale,
leases, exchange or other transfer (in one transaction or a series of
transactions) of all or substantially all the assets of the Company, (b) when
any "person" (as defined in Section 13(d) of the Securities Exchange Act of
1934, as amended (the "Act") other than the Company, its affiliates or an
employee benefit plan or trust maintained by the Company or its affiliates,
shall become the "beneficial owner" (as defined in Rule 13d-3 under the Act),
directly or indirectly, of more than 20% of the Total Voting Power, or (c) it at
any time during a period of two consecutive years, individuals who at the
beginning of such period constituted the Board shall cease for any reason to
constitute at least a majority thereof, unless the election by the Company's
shareholders of each new director during such two-year period was approved by a
vote of at least two-thirds of the directors then still in office who were
directors at the beginning of such two-year period.
Code: The Internal Revenue Code of 1986, as amended from time to time.
Committee: The Compensation and Benefits Committee of the Board, which
shall consist of members of the Board of Directors who qualify as "nonemployee
directors" as described in Rule 16b-3(b)(3)(i) promulgated under the Securities
Exchange Act of 1934, as amended.
Company: The Pittston Company.
<PAGE>
5
Employee: Any resident of the United States of America who is in the
employ of the Company or a Subsidiary whose principal place of business is
located in the United States of America or any other individual designated by
the Committee.
Exchange: The exchange of Brink's Stock for outstanding shares of BAX
Stock and Minerals Stock as of the Exchange Date.
Exchange Date: January 14, 2000, the date as of which the Exchange
occurred.
Foreign Subsidiary: Any corporation that is not incorporated in the
United States of America more than 80% of the outstanding voting stock of which
is owned by the Company, by the Company and one or more Subsidiaries and/or
Foreign Subsidiaries or by one or more Subsidiaries and/or Foreign Subsidiaries.
Incentive Account: The account maintained by the Company for an
Employee to document the amounts deferred under the Program by such Employee and
any other amounts credited hereunder and the Units into which such amounts shall
be converted.
Minerals Exchange Ratio: The ratio whereby .0817 of a share of Brink's
Stock will be exchanged for each outstanding share of Minerals Stock on the
Exchange Date.
Minerals Stock: Pittston Minerals Group Common Stock, par value $1.00
per share.
Minerals Unit: The equivalent of one share of Minerals Stock credited
to an Employee's Incentive Account.
<PAGE>
6
Program: This Key Employees' Deferred Compensation Program of The
Pittston Company, as in effect from time to time.
Redesignation: The redesignation of Services Stock as Brink's Stock and
the creation and distribution of BAX Stock as of January 19, 1996.
Salary: The base salary paid to an Employee by the Company, a
Subsidiary or a Foreign Subsidiary for personal services determined prior to
reduction for any contribution made on a salary reduction basis.
Shares: On and after January 19, 1996, and prior to the Exchange Date,
Brink's Stock, BAX Stock or Minerals Stock, as the case may be and on and after
the Exchange Date, Brink's Stock.
Services Stock: Pittston Services Group Common Stock, par value $1.00
per share.
Subsidiary: Any corporation incorporated in the United States of
America more than 80% of the outstanding voting stock of which is owned by the
Company, by the Company and one or more Subsidiaries or by one or more
Subsidiaries.
Unit: On and after January 19, 1996, and prior to the Exchange Date, a
Brink's Unit, BAX Unit or Minerals Unit, as the case may be and on and after the
Exchange Date, a Brink's Unit.
Year: (a) With respect to the benefits provided pursuant to Articles
III and VI, the calendar year, and (b) with respect to the benefits provided
pursuant to Articles IV and V, the six-month period from July 1, 1994, through
December 31, 1994, and
<PAGE>
7
thereafter, the calendar year; provided, however that if a newly-hired Employee
becomes eligible to participate in the benefits provided pursuant to Articles IV
and/or V, on a day other than the first day of the Year, the Year for purposes
of Articles IV and V shall be the portion of the calendar year during which the
Employee is first eligible to participate in the benefits provided thereunder.
ARTICLE II
Administration
The Committee is authorized to construe the provisions of the Program
and to make all determinations in connection with the administration of the
Program including, but not limited to, the Employees who are eligible to
participate in the benefits provided under Articles III or IV. All such
determinations made by the Committee shall be final, conclusive and binding on
all parties, including Employees participating in the Program. All authority of
the Committee provided for in, or pursuant to, this Program may also be
exercised by the Board. In the event of any conflict or inconsistency between
determinations, orders, resolutions or other actions of the Committee and the
Board taken in connection with this Program, the actions of the Board shall
control.
ARTICLE III
Deferral of Cash Incentive Payments
<PAGE>
8
SECTION 1. Definitions. Whenever used in this Article III, the
following terms shall have the meanings indicated:
Cash Incentive Payment: A cash incentive payment awarded to
an Employee for any Year under the Incentive Plan.
Incentive Plan: The Key Employees Incentive Plan of The
Pittston Company, as in effect from time to time or any successor
thereto.
Matching Incentive Contributions: Matching contributions
allocated to an Employee's Incentive Account pursuant to Section
4 of this Article III.
SECTION 2. Eligibility. The Committee shall designate the key
management, professional or technical Employees who may defer all or part of
their Cash Incentive Payments for any Year pursuant to this Article III.
An Employee designated to participate in this portion of the Program
pursuant to the preceding paragraph shall be eligible to receive a Matching
Incentive Contribution for a Year if (a) his or her Salary (on an annualized
basis) as of the preceding December 31 is at least equal to $160,000 (as
adjusted for Years after 1999 to reflect the limitation in effect under Code
Section 401(a)(17) for the Year in which the Employee's election to participate
is filed) or (b) he or she is so designated by the Committee. Notwithstanding
the foregoing, a newly hired Employee will be eligible to receive a Matching
Incentive Contribution for
<PAGE>
9
his or her initial Year of employment if his or her Salary (on an annualized
basis) in effect on his or her first day of employment with the Company or a
Subsidiary will exceed the threshold amount determined pursuant to Code Section
401(a)(17) for his or her initial calendar year of employment.
SECTION 3. Deferral of Cash Incentive Payments. Each Employee whom the
Committee has selected to be eligible to defer a Cash Incentive Payment for any
Year pursuant to this Article III may make an election to defer all or part (in
multiples of 10%) of any Cash Incentive Payment which may be made to him or her
for such Year. Such Employee's election for any Year shall be made prior to
January 1 of such Year; provided, however, that with respect to the 1995 Year,
an Employee who is eligible to receive a Matching Incentive Contribution
pursuant to Section 2 of this Article III may make such election at any time
prior to June 1, 1995, for Cash Incentive Payments paid for 1995 if he or she
(a) has not previously made a deferral election for 1995 or (b) wishes to
increase the percentage of his Cash Incentive Payment to be deferred. An
Incentive Account (which may be the same Incentive Account established pursuant
to Articles IV, V and/or VI) shall be established for each Employee making such
election and Units in respect of such deferred payment shall be credited to such
Incentive Account as provided in Section 6 below.
<PAGE>
10
SECTION 4. Matching Incentive Contributions. Effective for the 1995
Year, each Employee who is eligible to receive Matching Incentive Contributions
pursuant to Section 2 of this Article III shall have a Matching Incentive
Contribution allocated to his or her Incentive Account. Such Matching Incentive
Contribution shall be equal to the amount of his or her Cash Incentive Payment
that he or she has elected to defer but not in excess of 10% of his or her Cash
Incentive Payment. The dollar amount of each Employee's Matching Incentive
Contributions shall be credited to his or her Incentive Account as of the
January 1 next following the Year in respect of which the Cash Incentive Payment
was made. Units in respect of such amounts shall be credited to such Incentive
Account as provided in Section 7 below.
SECTION 5. Irrevocability of Election. Except as provided in Section 3
of this Article III, an election to defer Cash Incentive Payments under the
Program for any Year shall be irrevocable after the first day of such Year.
SECTION 6. Conversion of New Deferrals and Matching Incentive
Contributions to Brink's Units. For Years after 1999, the amount of an
Employee's deferred Cash Incentive Payment (and related Matching Incentive
Contributions) for any Year shall be converted to Brink's Units and shall be
credited to such Employee's Incentive Account as of the January 1 next following
the Year in respect of which the Cash Incentive Payment was made. The number
(computed to the second decimal place) of Units so
<PAGE>
11
credited shall be determined by dividing the aggregate amount of the deferred
Cash Incentive Payment and related Matching Incentive Contributions credited to
the Employee's Incentive Account for such Year by the average of the high and
low per share quoted sale prices of Brink's Stock as reported on the New York
Stock Exchange Composite Transaction Tape on each trading day during the month
of December of the Year immediately prior to the crediting of Units.
SECTION 7. Conversion of Existing Incentive Accounts to Brink's Units.
As of the Exchange Date, all BAX Units and Minerals Units in an Employee's
Incentive Account attributable to Cash Incentive Payments (and related Matching
Incentive Contributions) shall be converted into Brink's Units by multiplying
the number of BAX Units and Minerals Units in the Employee's Incentive Account
by the BAX Exchange Ratio or the Minerals Exchange Ratio, respectively.
SECTION 8. Adjustments. The Committee shall determine such equitable
adjustments in the Units credited to each Incentive Account as may be
appropriate to reflect any stock split, stock dividend, recapitalization,
merger, consolidation, reorganization, combination, or exchange of shares,
split-up, split-off, spin-off, liquidation or other similar change in
capitalization or any distribution to common shareholders other than cash
dividends.
<PAGE>
12
SECTION 9. Dividends and Distributions. Whenever a cash dividend or any
other distribution is paid with respect to shares of Brink's Stock, the
Incentive Account of each Employee will be credited with an additional number of
Brink's Units, equal to the number of shares of Brink's Stock including
fractional shares (computed to the second decimal place), that could have been
purchased had such dividend or other distribution been paid to the Incentive
Account on the payment date for such dividend or distribution based on the
number of shares represented by Units in such Incentive Account as of such date
and assuming the amount of such dividend or value of such distribution had been
used to acquire additional Brink's Units. Such additional Brink's Units shall be
deemed to be purchased at the average of the high and low per share quoted sale
prices of Brink's Stock, as reported on the New York Stock Exchange Composite
Transaction Tape on the payment date for the dividend or other distribution. The
value of any distribution in property will be determined by the Committee.
SECTION 10. Allocation of Units as of July 1, 1994. As of July 1, 1994,
the number of Units credited to an Employee's Incentive Account shall be equal
to the number of Units credited to his Incentive Account as of June 30, 1994,
under the Key Employees Deferred Payment Program of The Pittston Company.
SECTION 11. Minimum Distribution. Distributions shall be made in
accordance with Article VII; provided, however, that the
<PAGE>
13
aggregate value of the Brink's Stock and cash distributed to an Employee (and
his or her beneficiaries) in respect of all Units standing to his or her credit
in his or her Incentive Account attributable to deferrals of Cash Incentive
Payments (including related dividends but not Matching Incentive Contributions)
shall not be less than the aggregate amount of Cash Incentive Payments and
dividends (credited to his or her Incentive Account pursuant to Section 9) in
respect of which such Units were initially so credited. The value of the Brink's
Stock, so distributed shall be considered equal to the average of the high and
low per share quoted sale prices of Brink's Stock, as reported on the New York
Stock Exchange Composite Transaction Tape for the last trading day of the month
preceding the month of distribution.
ARTICLE IV
Deferral of Salary
SECTION 1. Definitions. Wherever used in this Article IV, the following
term shall have the meaning indicated:
Matching Salary Contributions: Matching contributions
allocated to an Employee's Incentive Account pursuant to Section 4
of this Article IV.
SECTION 2. Eligibility. An Employee may participate in the benefits
provided pursuant to this Article IV for any Year if (a) his or her Salary (on
an annualized basis) as of the
<PAGE>
14
preceding December 31 is at least equal to $160,000 (as adjusted for Years after
1999 to reflect the limitation in effect under Code Section 401(a)(17) for the
Year in which the Employee's election to participate is filed) or (b) he or she
is designated by the Committee as eligible to participate. Notwithstanding the
foregoing, a newly hired Employee will be eligible to defer a portion of his or
her Salary during his or her initial Year of employment if his or her Salary (on
an annualized basis) in effect on his or her first day of employment with the
Company or a Subsidiary will exceed the threshold amount determined pursuant to
Code Section 401(a)(17) for his or her initial calendar year of employment.
Except as otherwise provided by the Committee, an Employee who is
eligible to defer a portion of his or her Salary shall continue to be so
eligible unless his or her Salary for any Year (on an annualized basis) is less
than $150,000, in which case he or she shall be ineligible to participate in the
benefits provided under this Article IV until his or her Salary again exceeds
the threshold amount determined pursuant to Code Section 401(a)(17) for the Year
prior to the Year of participation.
SECTION 3. Deferral of Salary. Each Employee who is eligible to defer
Salary for any Year pursuant to this Article IV may elect to defer up to 50% (in
multiples of 5%) of his or her Salary for such Year; provided, however, that in
the case of a
<PAGE>
15
newly hired Employee who is eligible to participate for his or her initial Year
of employment, only up to 50% of Salary earned after he or she files a deferral
election with the Committee may be deferred. Such Employee's initial election
for any Year shall be made prior to the first day of such Year or within 30 days
after his or her initial date of employment, if later; provided, however, that
with respect to the 1995 Year, an eligible Employee may make such election at
any time prior to June 1, 1995, if he (a) has not previously made a deferral
election under this Article IV for 1995 or (b) wishes to increase the percentage
of his Salary to be deferred for 1995. Such election under (a) or (b) shall
apply only to Salary earned after June 1, 1995. An election to defer Salary
shall remain in effect for subsequent Years unless and until a new election is
filed with the Committee by the December 31 preceding the Year for which the new
election is to be effective. An Incentive Account (which may be the same
Incentive Account established pursuant to Articles III, V and/or VI) shall be
established for each Employee making such election and such Incentive Account
shall be credited as of the last day of each month with the dollar amount of
deferred Salary for such month pursuant to such election. Units in respect of
such amounts shall be credited to such Incentive Account as provided in Section
6 below.
SECTION 4. Matching Salary Contributions. Effective June 1, 1995, each
Employee who has deferred a percentage of his
<PAGE>
16
Salary for a Year pursuant to Section 2 of this Article IV shall have Matching
Salary Contributions allocated to his or her Incentive Account. Such Matching
Salary Contributions shall be equal to 100% of the first 10% of his Salary that
he or she has elected to defer for the Year (earned after June 1, 1995, for the
1995 Year). The dollar amount of each Employee's Matching Salary Contributions
shall be credited to his or her Incentive Account as of the last day of each
month. Units in respect of such amounts shall be credited to such Incentive
Account as provided in Section 6 below.
SECTION 5. Irrevocability of Election. Except as provided in Section 3
of this Article IV, an election to defer Salary under the Program for any Year
shall be irrevocable after the first day of such Year or after 30 days after his
or her initial date of employment, if later.
SECTION 6. Conversion of New Deferrals, Matching Salary Contributions
and Dividends to Brink's Units. For Years after 1999, the amount of an
Employee's deferred Salary (and related Matching Salary Contributions) for any
Year shall be converted to Brink's Units and shall be credited to such
Employee's Incentive Account as of the January 1 next following the Year in
which such Salary was earned. The number (computed to the second decimal place)
of Units so credited shall be determined by dividing the aggregate amount of all
such deferred Salary (and related Matching Salary Contributions) credited to his
or her Incentive
<PAGE>
17
Account for such Year by the average of the high and low per share quoted sale
prices of Brink's Stock as reported on the New York Stock Exchange Composite
Transaction Tape for each trading day during the Year immediately prior to the
crediting of Units.
In addition, an additional number of Units shall be credited to an
Employee's Incentive Account as of the January 1 next following such Year in the
event a dividend or other distribution is paid with respect to shares of Brink's
Stock during the Year. The number of additional Units shall be equal to the
number of shares of Brink's Stock including fractional shares (computed to the
second decimal place), that could have been purchased if (a) the number of
Brink's Units credited to the Employee's Incentive Account for the Year pursuant
to the preceding paragraph had been credited ratably throughout the Year, (b)
the dividend or other distribution had been paid to the Incentive Account on the
payment date based on the number of Shares represented by the Units credited
pursuant to (a) above had a ratable number of Units been credited on the record
date for the dividend or distribution, and (c) such dividend or the value of
such distribution had been used to acquire additional Units. Such additional
Units shall be deemed to be purchased at the average of the high and low per
share quoted sale prices of Brink's Stock as reported on the New York Stock
Exchange Composite Transaction Tape on the payment date for the dividend
<PAGE>
18
or other distribution. The value of any distribution in property will be
determined by the Committee.
Upon the Employee's termination of employment, any cash amounts not
converted into Units credited to his or her Incentive Account in dollars shall
be converted into Brink's Units in the manner described in this Section 6 based
on the quoted sale prices (including any sale prices determined on a when issued
basis) of Brink's Stock as reported on the New York Stock Exchange Composite
Transaction Tape for each trading day during the portion of the Year preceding
the month of termination. Such Employee's Incentive Account shall also be
credited with an additional number of Units in the event a dividend or other
distribution is paid with respect to shares of Brink's Stock during the Year
prior to his or her termination of employment. The additional number of Units
shall be determined in accordance with this Section 6 assuming that the number
of Brink's Units credited to his or her Incentive Account during the Year as a
result of his or her termination of employment had been credited ratably during
the portion of the Year preceding his or her termination.
SECTION 7. Conversion of Existing Incentive Accounts to Brink's Units.
As of the Exchange Date, all BAX Units and Minerals Units in an Employee's
Incentive Account attributable to deferred salary (and related Matching Salary
Contributions) shall be converted into Brink's Units by multiplying the number
of BAX
<PAGE>
19
Units and Minerals Units in the Employee's Incentive Account by the BAX Exchange
Ratio or the Minerals Exchange Ratio, respectively.
SECTION 8. Adjustments. The Committee shall determine such equitable
adjustments in the Units credited to each Incentive Account as may be
appropriate to reflect any stock split, stock dividend, recapitalization,
merger, consolidation, reorganization, combination, or exchange of shares,
split-up, split-off, spin-off, liquidation or other similar change in
capitalization or any distribution to common shareholders other than cash
dividends.
SECTION 9. Dividends and Distributions. Whenever a cash dividend or any
other distribution is paid with respect to shares of Brink's Stock, the
Incentive Account of each Employee will be credited with an additional number of
Brink's Units equal to the number of shares of Brink's Stock, including
fractional shares (computed to the second decimal place), that could have been
purchased had such dividend or other distribution been paid to the Incentive
Account on the payment date for such dividend or distribution based on the
number of shares represented by the Units in such Incentive Account as of such
date and assuming the amount of such dividend or value of such distribution had
been used to acquire additional Brink's Units. Such additional Brink's Units
shall be deemed to be purchased at the average of the high and low per share
quoted sale prices of Brink's Stock,
<PAGE>
20
as the case may be, as reported on the New York Stock Exchange Composite
Transaction Tape on the payment date for the dividend or other distribution. The
value of any distribution in property will be determined by the Committee.
SECTION 10. Minimum Distribution. Distributions shall be made in
accordance with Article VII; provided, however, the aggregate value of the
Brink's Stock and cash distributed to an Employee (and his or her beneficiaries)
in respect of all Units standing to his or her credit in his or her Incentive
Account attributable to the deferral of Salary (including related dividends but
not Matching Salary Contributions) shall not be less than the aggregate amount
of Salary and dividends in respect of which Units were initially so credited.
The value of the Brink's Stock so distributed shall be considered equal to the
average of the high and low per share quoted sale prices of Brink's Stock, as
reported on the New York Stock Exchange Composite Transaction Tape for the last
trading day of the month preceding the month of distribution.
ARTICLE V
Supplemental Savings Plan
SECTION 1. Definitions. Whenever used in this Article V, the following
terms shall have the meanings indicated:
<PAGE>
21
Compensation: The regular wages received during any pay
period by an Employee while a participant in the Savings Plan for
services rendered to the Company or any Subsidiary that
participates in the Savings Plan, including any commissions or
bonuses, but excluding any overtime or premium pay, living or
other expense allowances, or contributions by the Company or such
Subsidiaries to any plan of deferred compensation, and determined
without regard to the application of any salary reduction
election under the Savings Plan. Bonuses paid pursuant to the
Incentive Plan shall be considered received in the Year in which
they are payable whether or not such bonus is deferred pursuant
to Article III hereof.
Incentive Plan: The Key Employees Incentive Plan of The
Pittston Company, as in effect from time to time or any successor
thereto.
Matching Contributions: Amounts allocated to an Employee's
Incentive Account pursuant to Section 4 of this Article V.
Savings Plan: The Savings-Investment Plan of The Pittston
Company and Its Subsidiaries, as in effect from time to time.
SECTION 2. Eligibility. An Employee may participate in the benefits
provided pursuant to this Article V for any Year if his or her Salary (on an
annualized basis) as of the preceding
<PAGE>
22
December 31 is at least equal to $160,000 (as adjusted for Years after 1999 to
reflect the limitation in effect under Code Section 401(a)(17) for the Year in
which the Employee's election to participate is filed). Notwithstanding the
foregoing, a newly hired Employee is eligible to participate in the benefits
provided pursuant to this Article V if his or her Salary (on an annualized
basis) in effect on his or her first day of employment with the Company or a
Subsidiary will exceed the threshold amount determined pursuant to Code Section
401(a)(17) for his or her initial calendar year of employment.
Except as otherwise provided by the Committee, an Employee who is
eligible to participate in the benefits provided pursuant to this Article V
shall continue to be so eligible unless his or her Salary for any Year is less
than $150,000, in which case he or she shall be ineligible to participate in the
benefits provided under this Article V until his or her Salary again exceeds the
threshold amount determined pursuant to Code Section 401(a)(17) for the Year
prior to the Year of participation.
SECTION 3. Deferral of Compensation. Effective July 1, 1994, each
Employee who is not permitted to defer the maximum percentage of his or her
Compensation that may be contributed as a matched contribution under the Savings
Plan for any Year as a result of limitations imposed by Sections 401(a)(17),
401(k)(3), 402(g) and/or 415 of the Code may elect to defer all or part of
<PAGE>
23
the excess of (a) such maximum percentage (five percent for 1994) of his or her
Compensation for the calendar year (without regard to any limitation on such
amount imposed by Code Section 401(a)(17)) over (b) the amount actually
contributed on his or her behalf under the Savings Plan for such calendar year
as a matched contribution; provided, however, that with respect to the 1994
Year, only Compensation paid after July 1, 1994, may be deferred. In order to be
permitted to defer any portion of his or her Compensation pursuant to this
Section 3 of Article V, the Employee must elect to defer the maximum amount
permitted as a matched contribution for the calendar year under the Savings
Plan. Such Employee's initial election hereunder for any Year shall be made
prior to the first day of such Year or prior to the date on which he or she is
first eligible to participate in the Savings Plan, if later. Such election shall
remain in effect for subsequent Years unless and until a new election is filed
with the Committee by the December 31 preceding the Year for which the new
election is to be effective. An Incentive Account (which may be the same
Incentive Account established pursuant to Article III, IV and/or VI) shall be
established for each Employee making such election and such Incentive Account
shall be credited as of the last day of each month with the dollar amount of the
Compensation deferred for such month pursuant to such election; provided,
however, that in the event an Employee is not permitted to defer the maximum
percentage of his or her Compensation that
<PAGE>
24
may be contributed as a matched contribution under the Savings Plan for any year
as a result of the limitation imposed by Code Section 401(k)(3), such excess
contribution shall be distributed to the Employee, his Compensation paid after
the date of the distribution shall be reduced by that amount and such amount
shall be allocated to his Incentive Account as of the January 1 next following
the Year for which the excess contribution was made under the Savings Plan.
Units in respect of such amounts shall be credited to such Incentive Account as
provided in Section 6 below.
SECTION 4. Matching Contributions. Each Employee who elects to defer a
portion of his or her Compensation for a Year pursuant to Section 3 of this
Article V shall have a Matching Contribution allocated to his or her Incentive
Account equal to the rate of matching contributions in effect for such Employee
under the Savings Plan for such Year multiplied by the amount elected to be
deferred pursuant to Section 3 above for each month in such Year. The dollar
amount of each Employee's Matching Contributions for each month shall be
credited to his or her Incentive Account as of the last day of each month.
Subject to the approval of the shareholders of the Company at the 1995
annual meeting, if an Employee is participating in this portion of the Program
pursuant to Section 2 of this Article V and his or her matching contribution
under the Savings Plan for 1994 or any later year will be reduced as a result of
the
<PAGE>
25
nondiscrimination test contained in Code Section 401(m)(2), (a) to the extent
such matching contribution is forfeitable, it shall be forfeited and that amount
shall be allocated to his or her Incentive Account as a Matching Contribution or
(b) to the extent such matching contribution is not forfeitable, it shall be
distributed to the Employee, his Compensation paid after the date of the
distribution shall be reduced by that amount and such amount shall be allocated
to his or her Incentive Account as a Matching Contribution. The dollar amount of
such Matching Contribution shall be allocated to each Employee's Incentive
Account as of the January 1 next following the Year for which the matching
contribution was made under the Savings Plan. Units in respect of such
contribution shall be credited to the Employee's Incentive Account as provided
in Section 7 below.
SECTION 5. Irrevocability of Election. An election to defer amounts
under the Program for any Year shall be irrevocable after the first day of such
Year or after the date on which he or she is first eligible to participate in
the Savings Plan, if later.
SECTION 6. Conversion of New Deferrals, Matching Contributions and
Dividends to Brink's Units. The amount of an Employee's deferred Compensation
and Matching Contributions for any Year shall be converted to Brink's Units and
shall be credited to such Employee's Incentive Account as of the January 1 next
following the Year in which such Compensation was earned or
<PAGE>
26
for which the Matching Contribution was made. The number (computed to the second
decimal place) of Units so credited shall be determined by dividing the
aggregate amount of all such amounts credited to the Employee's Incentive
Account for such Year attributable to (a) the deferral of amounts awarded under
the Incentive Plan (including related Matching Contributions) by the average of
the high and low per share quoted sale prices of Brink's Stock, as reported on
the New York Stock Exchange Composite Transaction Tape on each trading day
during the month of December of the Year immediately prior to the crediting of
such Units, (b) Compensation and Matching Contributions allocated to an
Incentive Account as a result of failing to satisfy the tests included in Code
Sections 401(k)(3) or 401(m)(2) under the Savings Plan, by the average of the
high and low per share quoted sales prices of Brink's Stock, as reported on the
New York Stock Exchange Composite Transaction Tape on each trading day during
the month of April of the Year in which such Units are credited to the
Employee's Incentive Account and (c) the deferral of all other Compensation
(including related Matching Contributions) by the average of the high and low
per share quoted sale prices of Brink's Stock as reported on the New York Stock
Exchange Composite Transaction Tape (i) on each trading day during the period
commencing on the first day of the month after the Employee's salary (as such
term is defined in the Savings Plan) equals the maximum amount of considered
compensation for such
<PAGE>
27
Year pursuant to Code Section 401(a)(17) and ending on December 31 or (ii) in
the event the Employee's salary equals the maximum amount of considered
compensation in December, on the first trading day in the following January. In
addition, an additional number of Units shall be credited to an Employee's
Incentive Account as of the January 1 of the following Year in the event a
dividend or other distribution is paid with respect to shares of Brink's Stock
during the Year. The number of additional Units shall be equal to the number of
shares of Brink's Stock, including fractional shares (computed to the second
decimal place), that could have been purchased if (a) the number of Brink's
Units credited to the Employee's Incentive Account, for the Year pursuant to the
preceding paragraph had been credited ratably throughout the portion of the Year
commencing on the first day of the month after the Employee's salary (as defined
in the Savings Plan) equals the maximum amount of considered compensation for
such Year pursuant to Code Section 401(a)(17), (b) the dividend or other
distribution had been paid to the Incentive Account on the payment date based on
the number of shares represented by the Units credited pursuant to (a) above had
a ratable number of Units been credited on the record date for the dividend or
distribution, and (c) such dividend or the value of such distribution had been
used to acquire additional Units. Such additional Units shall be deemed to be
purchased at the average of the high and low per share
<PAGE>
28
quoted sale prices of Brink's Stock, as reported on the New York Stock Exchange
Composite Transaction Tape on the payment date for the dividend or other
distribution. The value of any distribution in property will be determined by
the Committee.
Upon the Employee's termination of employment, any cash amounts not
converted into Units credited to his or her Incentive Account in dollars shall
be converted into Brink's Units in the manner described in this Section 6 based
on the quoted sale prices (including any sale prices determined on a when issued
basis) of Brink's Stock, as reported on the New York Stock Exchange Composite
Transaction Tape for each trading day during the portion of the Year preceding
the month of termination. Such Employee's Incentive Account shall also be
credited with an additional number of Units in the event a dividend or other
distribution is paid with respect to shares of Brink's Stock during the Year
prior to his or her termination of employment. The additional number of Units
shall be determined in accordance with this Section 6 assuming that the number
of Brink's Units credited to his or her Incentive Account during the Year as a
result of his or her termination of employment had been credited ratably during
the portion of the Year preceding his or her termination.
SECTION 7. Conversion of Existing Incentive Accounts to Brink's Units.
As of the Exchange Date, all BAX Units and Minerals Units in an Employee's
Incentive Account attributable to
<PAGE>
29
Compensation deferred pursuant to this Article V (and related Matching
Contributions) shall be converted into Brink's Units by multiplying the number
of such BAX Units and Minerals Units in the Employee's Incentive Account by the
BAX Exchange Ratio or the Minerals Exchange Ratio, respectively.
SECTION 8. Adjustments. The Committee shall determine such equitable
adjustments in the Units credited to each Incentive Account as may be
appropriate to reflect any stock split, stock dividend, recapitalization,
merger, consolidation, reorganization, combination, or exchange of shares,
split-up, split-off, spin-off, liquidation or other similar change in
capitalization or any distribution to common shareholders other than cash
dividends.
SECTION 9. Dividends and Distributions. Whenever a cash dividend or any
other distribution is paid with respect to shares of Brink's Stock, the
Incentive Account of each Employee will be credited with an additional number of
Brink's Units equal to the number of shares of Brink's Stock, including
fractional shares (computed to the second decimal place), that could have been
purchased had such dividend or other distribution been paid to the Incentive
Account on the payment date for such dividend or distribution based on the
number of shares represented by the Units in such Incentive Account as of such
date and assuming that the amount of such dividend or value of such distribution
had been used to acquire additional Brink's Units of the class giving
<PAGE>
30
rise to the dividend or other distribution. Such additional Brink's Units shall
be deemed to be purchased at the average of the high and low per share quoted
sale prices of Brink's Stock, as reported on the New York Stock Exchange
Composite Transaction Tape on the payment date for the dividend or other
distribution. The value of any distribution in property will be determined by
the Committee.
ARTICLE VI
Deferral of Performance Awards
SECTION 1. Definitions. Whenever used in this Article VI, the following
terms shall have the meanings indicated:
Cash Performance Payment: A cash incentive payment due to an
Employee in any Year under the Management Performance Improvement
Plan.
Management Performance Improvement Plan: The Pittston
Company Management Performance Improvement Plan, as in effect
from time to time or any successor thereto.
Performance Measurement Period: A performance cycle of one
or more fiscal Years of the Company under the Management
Performance Improvement Plan.
SECTION 2. Eligibility. Any Employee who is a participant in the
Management Performance Improvement Plan may elect to defer all or part of his or
her Cash Performance Payment payable under such plan pursuant to this Article
VI.
<PAGE>
31
SECTION 3. Deferral of Cash Performance Payments. Each Employee who is
eligible to defer his or her Cash Performance Payment for any Performance
Measurement Period pursuant to this Article VI may make an election to defer all
or part (in multiples of 10%) of any Cash Performance Payment which may be made
to him or her for such Performance Measurement Period. Such Employee's election
shall be made prior to January 1 of the last Year in the Performance Measurement
Period. An Incentive Account (which may be the same Incentive Account
established pursuant to Articles III, IV and/or V) shall be established for each
Employee making such election and Units in respect of such deferred payment
shall be credited to such Incentive Account as provided in Section 5 below.
SECTION 4. Irrevocability of Election. An election to defer Cash
Performance Payments under the Program for any Performance Measurement Period
shall be irrevocable after the first day of the last Year in such Performance
Measurement Period.
SECTION 5. Conversion to Units. The amount of an Employee's deferred
Cash Performance Payment for any Performance Measurement Period shall be
converted to Brink's Units and shall be credited to such Employee's Incentive
Account as of the first day of the month next following the date on which the
Cash Performance Payment would be paid if it was not deferred pursuant to this
Program. The number (computed to the second decimal
<PAGE>
32
place) of Brink's Units so credited shall be determined by dividing the
aggregate amount of the deferred Cash Performance Payment credited to the
Employee's Incentive Account for such Performance Measurement Period by the
average of the high and low per share quoted sale prices of Brink's Stock, as
reported on the New York Stock Exchange Composite Transaction Tape on each
trading day during the month preceding the crediting of Units.
SECTION 6. Adjustments. The Committee shall determine such equitable
adjustments in the Units credited to each Incentive Account as may be
appropriate to reflect any stock split, stock dividend, recapitalization,
merger, consolidation, reorganization, combination, or exchange of shares,
split-up, split-off, spin-off, liquidation or other similar change in
capitalization or any distribution to common shareholders other than cash
dividends.
SECTION 7. Dividends and Distributions. Whenever a cash dividend or any
other distribution is paid with respect to shares of Brink's Stock, the
Incentive Account of each Employee will be credited with an additional number of
Brink's Units equal to the number of shares of Brink's Stock, including
fractional shares (computed to the second decimal place), that could have been
purchased had such dividend or other distribution been paid to the Incentive
Account on the payment date for such dividend or distribution based on the
number of shares represented by Units in such Incentive Account as of such date
and assuming the amount
<PAGE>
33
of such dividend or value of such distribution had been used to acquire
additional Brink's Units. Such additional Brink's Units shall be deemed to be
purchased at the average of the high and low per share quoted sale prices of
Brink's Stock, as reported on the New York Stock Exchange Composite Transaction
Tape on the payment date for the dividend or other distribution. The value of
any distribution in property will be determined by the Committee.
SECTION 8. Minimum Distribution. Distributions shall be made in
accordance with Article VII; provided, however, that the aggregate value of the
Brink's Stock and cash distributed to an Employee (and his or her beneficiaries)
in respect of all Units standing to his or her credit in his or her Incentive
Account attributable to deferrals of Cash Performance Payments (including
related dividends) shall not be less than the aggregate amount of Cash
Performance Payments and dividends (credited to his or her Incentive Account
pursuant to Section 7) in respect of which such Units were initially so
credited. The value of the Brink's Stock, so distributed shall be considered
equal to the average of the high and low per share quoted sale prices of Brink's
Stock, as reported on the New York Stock Exchange Composite Transaction Tape for
the last trading day of the month preceding the month of distribution.
SECTION 9. Effective Date. Notwithstanding anything herein to the
contrary, the provisions of this Article VI providing for
<PAGE>
34
the deferral of Cash Performance Payments shall not become effective until May
5, 2000, and only upon approval of the Management Performance Improvement Plan
by the Company's shareholders.
ARTICLE VII
Distributions
SECTION 1. Certain Payments on Termination of Employment. Each Employee
who has an Incentive Account shall receive a distribution in Brink's Stock in
respect of all Brink's Units standing to the credit of such Employee's Incentive
Account (other than Units attributable to Matching Incentive Contributions,
Matching Salary Contributions and dividends related thereto), in a single
lump-sum distribution as soon as practicable following his or her termination of
employment; provided, however, that an Employee may elect, at least 12 months
prior to his or her termination of employment to receive distribution of the
Shares represented by the Units credited to his or her Incentive Account in
equal annual installments (not more than ten) commencing on the first day of the
month next following the date of his or her termination of employment (whether
by death, disability, retirement or otherwise) or as promptly as practicable
thereafter. Such Employee may at any time elect to change the manner of such
payment, provided that any such election is made at least 12 months in advance
of his or her termination of employment.
<PAGE>
35
The number of shares of Brink's Stock to be included in each
installment payment shall be determined by multiplying the number of Brink's
Units in the Employee's Incentive Account as of the lst day of the month
preceding the initial installment payment and as of each succeeding anniversary
of such date by a fraction, the numerator or which is one and the denominator of
which is the number of remaining installments (including the current
installment).
Any fractional Units shall be converted to cash based on the average of
the high and low per share quoted sale prices of the Brink's Stock, as reported
on the New York Stock Exchange Composite Transaction Tape, on the last trading
day of the month preceding the month of distribution and shall be paid in cash.
SECTION 2. Payments Attributable to Matching Incentive Contributions
and Matching Salary Contributions on Termination of Employment. In the event of
the termination of employment of an Employee as a result of (a) death, (b)
retirement after satisfying the requirements for early or normal retirement
under a pension plan sponsored by the Company or a Subsidiary in which the
Employee participated, (c) total and permanent disability (as defined in the
Company's long-term disability plan) or (d) termination of employment for any
reason within three years following a Change in Control, the Employee shall
receive a distribution of Brink's Stock in respect of all Brink's Units standing
to the credit of such Employee's Incentive Account
<PAGE>
36
attributable to Matching Incentive Contributions, Matching Salary Contributions
and dividends related thereto in the same manner as provided in Section 1 of
this Article VII for the distribution of other Units standing to the credit of
such Employee's Incentive Account.
In the event of a termination of employment for a reason not described
in the preceding paragraph, the Employee shall forfeit the Units in his or her
Incentive Account attributable to Matching Incentive Contributions, Matching
Salary Contributions and dividends related thereto for the Year in which the
termination occurs. Such Employee shall be vested in the remaining Units
standing to the credit of such Employee in his or her Incentive Account
attributable to Matching Incentive Contributions, Matching Salary Contributions
and dividends related thereto in accordance with the following schedule:
<TABLE>
<CAPTION>
Months of Participation Vested Percentage
----------------------- -----------------
<S> <C>
less than 36 0
at least 36 but less than 48 50%
at least 48 but less than 60 75%
60 or more 100%
</TABLE>
An Employee shall receive credit for one "month of participation" for each
calendar month during which a deferral election is in effect pursuant to Section
3 of Articles III or IV. Brink's Stock, in respect of the vested Units standing
to the credit of such Employee attributable to Matching Incentive Contributions,
Matching Salary Contributions and dividends related thereto, shall be
distributed in a single lump sum as soon as practicable
<PAGE>
37
following the third anniversary of his or her termination of employment.
SECTION 3. In-Service Distributions. Any Employee may make an election,
on or before December 31 of any Year, to receive a distribution in Brink's Stock
in a lump sum or in not more than ten equal annual installments, on or
commencing as of January 1 of the second following Year (or as promptly as
practicable thereafter), in respect of all Brink's Units (other than Units
attributable to Matching Incentive Contributions, Matching Salary Contributions
and dividends related thereto) standing to his or her credit in such Incentive
Account as of such January 1; provided, however, that no such election shall be
effective if (a) such Employee has outstanding at such December 31 an election
pursuant to Articles III, IV, V or VI to defer any amounts hereunder or (b) such
Employee's employment shall terminate for any reason prior to such January 1.
Such election to receive a distribution or distributions shall be irrevocable,
except that it may be revoked, and a new election may be made, at any time prior
to such December 31. The number of shares of Brink's Stock (and the amount of
cash representing fractional Units) to be distributed shall be determined in the
same manner as provided in Section 1 of this Article VII.
ARTICLE VIII
Designation of Beneficiary
<PAGE>
38
An Employee may designate in a written election filed with the
Committee a beneficiary or beneficiaries (which may be an entity other than a
natural person) to receive all distributions and payments under the Program
after the Employee's death. Any such designation may be revoked, and a new
election may be made, at any time and from time to time, by the Employee without
the consent of any beneficiary. If the Employee designates more than one
beneficiary, any distributions and payments to such beneficiaries shall be made
in equal percentages unless the Employee has designated otherwise, in which case
the distributions and payments shall be made in the percentages designated by
the Employee. If no beneficiary has been named by the Employee or no beneficiary
survives the Employee, the remaining Shares (including fractional Shares) in the
Employee's Incentive Account shall be distributed or paid in a single sum to the
Employee's estate. In the event of a beneficiary's death after installment
payments to the beneficiary have commenced, the remaining installments will be
paid to a contingent beneficiary, if any, designated by the Employee or, in the
absence of a surviving contingent beneficiary, the remaining Shares (including
fractional Shares) shall be distributed or paid to the primary beneficiary's
estate in a single distribution. All distributions shall be made in Shares
except that fractional shares shall be paid in cash.
<PAGE>
39
ARTICLE IX
Miscellaneous
SECTION 1. Nontransferability of Benefits. Except as provided in
Article VIII, Units credited to an Incentive Account shall not be transferable
by an Employee or former Employee (or his or her beneficiaries) other than by
will or the laws of descent and distribution or pursuant to a domestic relations
order. No Employee, no person claiming through such Employee, nor any other
person shall have any right or interest under the Program, or in its
continuance, in the payment of any amount or distribution of any Shares under
the Program, unless and until all the provisions of the Program, any
determination made by the Committee thereunder, and any restrictions and
limitations on the payment itself have been fully complied with. Except as
provided in this Section 1, no rights under the Program, contingent or
otherwise, shall be transferable, assignable or subject to any pledge or
encumbrance of any nature, nor shall the Company or any of its Subsidiaries be
obligated, except as otherwise required by law, to recognize or give effect to
any such transfer, assignment, pledge or encumbrance.
SECTION 2. Notices. The Company may require all elections contemplated
by the Program to be made on forms provided by it. All notices, elections and
other communications pursuant to the
<PAGE>
40
Program shall be in writing and shall be effective when received by the Company
at the following address:
The Pittston Company
1000 Virginia Center Parkway
P. O. Box 120070
Glen Allen, VA 23058-4229
Attention of Vice President -- Human Resources
SECTION 3. Limitation on Rights of Employee. Nothing in this Program
shall be deemed to create, on the part of any Employee, beneficiary or other
person, (a) any interest of any kind in the assets of the Company or (b) any
trust or fiduciary relationship in relation to the Company. The right of an
Employee to receive any Shares shall be no greater than the right of any
unsecured general creditor of the Company.
SECTION 4. No Contract of Employment. The benefits provided under the
Program for an Employee shall be in addition to, and in no way preclude, other
forms of compensation to or in respect of such Employee. However, the selection
of any Employee for participation in the Program shall not give such Employee
any right to be retained in the employ of the Company or any of its Subsidiaries
for any period. The right of the Company and of each such Subsidiary to
terminate the employment of any Employee for any reason or at any time is
specifically reserved.
SECTION 5. Withholding. All distributions pursuant to the Program shall
be subject to withholding in respect of income and other taxes required by law
to be withheld. The Company shall establish appropriate procedures to ensure
payment or withholding
<PAGE>
41
of such taxes. Such procedures may include arrangements for payment or
withholding of taxes by retaining Shares otherwise issuable in accordance with
the provisions of this Program or by accepting already owned Shares, and by
applying the fair market value of such Shares to the withholding taxes payable.
SECTION 6. Amendment and Termination. The Committee may from time to
time amend any of the provisions of the Program, or may at any time terminate
the Program. No amendment or termination shall adversely affect any Units (or
distributions in respect thereof) which shall theretofore have been credited to
any Employee's Incentive Account. In conjunction with the termination of the
Program, the Committee may in its discretion determine whether the value of all
Units credited to any or all of the Incentive Accounts under the Program shall
be distributed in Shares as promptly as practicable after such termination.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>6
<DESCRIPTION>EXHIBIT 10(C)(III)
<TEXT>
<PAGE>
AMENDMENT NO. 1 TO THE
AMENDED AND RESTATED TRUST AGREEMENT
DATED DECEMBER 1, 1997
AMENDMENT NO. 1 TO THE AMENDED AND RESTATED TRUST AGREEMENT,
dated as of December 1, 1997 ("Trust Agreement"), made as of the 18th day of
August, 1999, by and between THE PITTSTON COMPANY (the "Company") and THE CHASE
MANHATTAN BANK, as Trustee (the "Trustee").
Pursuant to Section 13(a) of the Trust Agreement, the Company
and the Trustee agree to amend the Trust Agreement as follows:
1. The introductory sentence of Section 2(f) of the Trust
Agreement is hereby amended by substituting the date "September 1, 2001" for the
date "September 1, 1999."
2. The Trust Agreement, as hereby amended, shall remain in
full force and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment
No. 1 as of August 18, 1999.
THE PITTSTON COMPANY
By: /s/ James B. Hartough
----------------------------------------
James B. Hartough
Vice President -- Corporate Finance and
Treasurer
THE CHASE MANHATTAN BANK, Trustee
By: /s/ Peter Coghill
----------------------------------------
Peter Coghill
Vice President
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>7
<DESCRIPTION>EXHIBIT 10(E)
<TEXT>
<PAGE>
EXHIBIT 10(e)
THE PITTSTON COMPANY
NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
(As Amended and Restated as of January 14, 2000)
ARTICLE I
Purpose of the Plan
The Pittston Company Non-Employee Directors' Stock Option Plan (the
"Plan") is amended and restated as of January 14, 2000 to reflect the exchange
of .4848 of a share of Pittston Brink's Group Common Stock for each outstanding
share of Pittston BAX Group Common Stock and .0817 of a share of Pittston
Brink's Group Common Stock for each outstanding share of Pittston Minerals Group
Common Stock (the "Exchange").
The purpose of the Plan continues to be to attract and retain the
services of experienced independent directors for The Pittston Company (the
"Company") by encouraging them to acquire a proprietary interest in the Company
in the form of shares of Pittston Brink's Group Common Stock (the "Common
Stock"). The Company intends this Plan to provide those directors with
additional incentive to further the best interests of the Company and its
shareholders.
ARTICLE II
Administration of the Plan
This Plan shall be administered by the Board of Directors of the
Company (the "Board"). The Board is authorized to interpret this Plan and may
from time to time adopt such rules and regulations for carrying out this Plan as
it deems best. All determinations by the Board pursuant to the provisions of
this Plan shall be made in accordance with and subject to applicable provisions
of the Company's by-laws, and all such determinations and related orders or
resolutions of the Board shall be final, conclusive and binding on all persons.
All authority of the Board provided for in or pursuant to this Plan, including,
without limitation, the authority set forth in Articles III and IX may also be
exercised by the Compensation and Benefits Committee of the Board or by such
other committee of the Board as the Board may designate for the purpose.
ARTICLE III
<PAGE>
2
Eligibility; Number and Price of Option Shares
SECTION 3.01. Options shall be granted only to directors ("Non-Employee
Directors") who are not also employees of the Company or any of its
subsidiaries.
SECTION 3.02. Subject to the provisions of Section 3.04, the maximum
number of shares of Common Stock which may be issued pursuant to options granted
under this Plan on and after January 14, 2000, shall be (i) 125,874 plus (ii)
the number of shares of each class of Common Stock issuable pursuant to options
outstanding under this Plan on March 17, 1997, reduced by (iii) the number of
shares of each class of Common Stock issued after March 17, 1997 pursuant to
options granted under this Plan, but prior to January 14, 2000. The number of
shares in (ii) and (iii) shall be adjusted to reflect the Exchange.
SECTION 3.03. The purchase price per share of Common Stock under each
option shall be 100% of the Fair Market Value of a share of Common Stock covered
by such option at the time such option is granted.
SECTION 3.04. In the event of any dividend payable in Common Stock or
any split or combination of Common Stock, (a) the number of shares of Common
Stock which may be issued under this Plan shall be proportionately increased or
decreased, as the case may be, (b) the number of shares of Common Stock
(including shares subject to options not then exercisable) deliverable pursuant
to grants theretofore made shall be proportionately increased or decreased, as
the case may be, and (c) the aggregate purchase price of shares subject to any
such grant shall not be changed. Any option subsequently granted pursuant to
Sections 4.02 and 4.03 shall be for a number of shares reflecting such increase
or decrease. In the event of any other recapitalization, reorganization,
extraordinary dividend or distribution or restructuring transaction (including
any distribution of shares of stock of any Subsidiary or other property to
holders of shares of any Common Stock) affecting the shares of Common Stock, the
number of shares of Common Stock issuable pursuant to any option theretofore
granted (whether or not then exercisable), and/or the option price per share of
such option, shall be subject to appropriate adjustment; provided, however, that
such option shall be subject to only such adjustment as shall be necessary to
maintain the proportionate interest of the optionee and preserve, without
exceeding, the
<PAGE>
3
value of such option. In the event of a merger or share exchange in which the
Company will not survive as an independent, publicly owned corporation, or in
the event of a consolidation or of a sale of all or substantially all of the
Company's assets, provision shall be made for the protection and continuation of
any outstanding options by the substitution, on an equitable basis, of such
shares of stock, other securities, cash, or any combination thereof, as shall be
appropriate; provided, however, that such options shall be subject to only such
adjustment as shall be necessary to maintain the proportionate interest of the
optionee and preserve, without exceeding, the value of such options.
ARTICLE IV
Grant of Options
SECTION 4.01. Grants under this Plan shall relate to the Company's
Common Stock. Each option shall constitute a nonqualified stock option not
intended to qualify under Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code").
SECTION 4.02. On July 1, 2000, and on July 1 of each subsequent year,
each Non-Employee Director who is a member of the Board as of each such date
shall automatically be granted an option to purchase 1,258 shares of Common
Stock (or, in the case of an adjustment pursuant to Section 4 of Article III,
the number of shares of Common Stock determined as provided in said Section 4);
provided, however, that the annual automatic grant shall be an option to
purchase 2,517 shares of Common Stock if approved by the Company's shareholders
at the Company's 2000 annual meeting of shareholders. Each such option shall be
exercisable in full six months after the date of grant.
SECTION 4.03. All instruments evidencing options granted under this
Plan shall be in such form, consistent with this Plan, as the Board shall
determine.
ARTICLE V
Non-Transferability of Options
No option granted under this Plan shall be transferable by the optionee
otherwise than by will or by the laws of descent and
<PAGE>
4
distribution, and any such option shall be exercised during the lifetime of the
optionee only by the optionee or the optionee's duly appointed legal
representative; provided, however, that, in the sole discretion of the Board, an
option may be transferable to immediate family members (or to trusts therefor)
of an optionee granted such option on such terms and conditions as the Board
shall determine. For the purposes of this provision, an optionee's immediate
family shall mean the optionee's spouse, children and grandchildren (including
stepchildren).
ARTICLE VI
Exercise of Options
SECTION 6.01. Each option granted under this Plan shall terminate on
the tenth anniversary of the date of grant, unless sooner terminated as provided
in this Plan. Except in cases provided for in Article VII, each option may be
exercised only while the optionee is a Non-Employee Director.
SECTION 6.02. A person electing to exercise an option shall give
written notice to the Company of such election and of the number of shares of
Common Stock such person has elected to purchase, and shall tender the full
purchase price of such shares, which tender shall be made in cash or cash
equivalent (which may be such person's personal check) at the time of purchase
or in shares of Common Stock already owned by such person (which shares shall be
valued for such purpose on the basis of their Fair Market Value on the date of
exercise), or in any combination thereof. The Company shall have no obligation
to deliver shares of Common Stock pursuant to the exercise of any option, in
whole or in part, until the Company receives payment in full of the purchase
price thereof. No optionee or legal representative, legatee or distributee of
such optionee shall be or be deemed to be a holder of any shares of Common Stock
subject to such option or entitled to any rights as a shareholder of the Company
in respect of any shares of Common Stock covered by such option until such
shares have been paid for in full and issued by the Company.
ARTICLE VII
Termination of Options
<PAGE>
5
SECTION 7.01. In the case of a Non-Employee Director who ceases to
serve as such for any reason other than voluntary resignation (excluding
retirement) or failure to stand for reelection notwithstanding an invitation to
continue to serve as a Non-Employee Director and is entitled to receive a
distribution from The Pittston Company Directors' Stock Accumulation Plan, (a)
any option to the extent exercisable at the date of ceasing so to serve may be
exercised, and (b) any option that is not yet exercisable at the date of such
cessation may be exercised on or after the date on which it would become
exercisable had the optionee continued to serve as a Non-Employee Director until
such date; provided, however, that no option may be exercised after the earlier
of (i) three years after the optionee's cessation of service as a Non-Employee
Director or (ii) the termination date of the option.
SECTION 7.02. In the case of a Non-Employee Director who dies while
serving as such or within six months of his or her cessation of service as a
Non-Employee Director (under the circumstances described in Section 7.01), all
the Non-Employee Director's outstanding options shall be fully vested and may be
exercised within one year after the date of such death, but not later than the
termination date of the option, by the person designated in the optionee's last
will and testament or, if none, by the legal representative of the optionee's
estate.
SECTION 7.03. In the case of a Non-Employee Director (other than one to
whom Section 7.02 applies) who dies after ceasing to serve as such, all the
Non-Employee Director's options shall be terminated except that any option to
the extent exercisable by the Non-Employee Director at the date of ceasing so to
serve may be exercised within one year after the date of death, but not later
than the termination date of the option, by the Non-Employee Director's estate
or by the person designated in the Non-Employee Director's estate or by the
person designated in the Non-Employee Director's last will and testament.
SECTION 7.04. In the case of a Non-Employee Director (other than one to
whom Section 7.01, 7.02 or 7.03 is applicable) who ceases to serve as such for
any reason, all the Non-Employee Director's options shall be terminated except
that any option to the extent exercisable at the date of ceasing so to serve may
be exercised within one year after such date, but not later than the termination
date of the option.
ARTICLE VIII
<PAGE>
6
Miscellaneous Provisions
SECTION 8.01. Each option shall be subject to the requirement that, if
at any time the Board shall determine that the listing, registration or
qualification of the shares of Common Stock subject to such option upon any
securities exchange or under any state or Federal law, or the consent or
approval of any governmental regulatory body, is necessary or desirable as a
condition of, or in connection with, the granting of such option or the issue of
Common Stock pursuant thereto, no option may be exercised, in whole or in part,
unless such listing, registration, qualification, consent or approval shall have
been effected or obtained free from any conditions not reasonably acceptable to
the Board.
SECTION 8.02. The Company may establish appropriate procedures to
ensure payment or withholding of such income or other taxes, if any, as may be
provided by law to be paid or withheld in connection with the issue of shares of
Common Stock under this Plan.
SECTION 8.03. Nothing in this Plan shall be construed either to give
any Non-Employee Director any right to be retained in the service of the Company
or to limit the power of the Board to adopt additional compensation arrangements
(either generally or in specific instances) for directors of the Company or to
change such arrangements as in effect at any time.
ARTICLE IX
Plan Termination and Amendments
SECTION 9.01. The Board may terminate this Plan at any time, but this
Plan shall in any event terminate on May 11, 2008, and no options may thereafter
be granted, unless the shareholders shall have approved its extension. Options
granted in accordance with this Plan prior to the date of its termination may
extend beyond that date.
SECTION 9.02. The Board may from time to time amend, modify or suspend
this Plan, but no such amendment or modification without the approval of the
shareholders shall:
(a) increase the maximum number (determined as provided in
this Plan) of shares of Common Stock which may be issued
<PAGE>
7
(i) to any one Non-Employee Director or (ii) pursuant to all options
granted under this Plan;
(b) permit the grant of any option at a purchase price less
than 100% of the Fair Market Value of the Common Stock covered by such
option at the time such option is granted;
(c) permit the exercise of an option unless arrangements are
made to ensure that the full purchase price of the shares as to which
the option is exercised is paid at the time of exercise; or
(d) extend beyond May 11, 2008, the period during which
options may be granted.
ARTICLE X
Definitions
Wherever used in this Plan, the following terms shall have the meanings
indicated:
Fair Market Value: With respect to shares of Common Stock, the average
of the high and low quoted sale prices of a share of such stock on the date in
question (or, if there is no reported sale on such date, on the last preceding
date on which any reported sale occurred) on the New York Stock Exchange
Composite Transactions Tape.
Subsidiary: Any corporation of which stock representing at least 50% of
the ordinary voting power is owned, directly or indirectly, by the Company.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>8
<DESCRIPTION>EXHIBIT 10(F)
<TEXT>
<PAGE>
EXHIBIT 10(f)
THE PITTSTON COMPANY
1988 STOCK OPTION PLAN
(As Amended and Restated as of January 14, 2000)
ARTICLE I
Purpose of the Plan
The Pittston Company 1988 Stock Option Plan (the "Plan") is amended and
restated as of January 14, 2000, to reflect the exchange of .4848 of a share of
Pittston Brink's Group Common Stock for each outstanding share of Pittston BAX
Group Common Stock and .0817 of a share of Pittston Brink's Group Common Stock
for each outstanding share of Pittston Minerals Group Common Stock (the
"Exchange").
The purpose of the Plan continues to be to enable key employees of The
Pittston Company (the "Company") and its Subsidiaries to acquire a proprietary
interest in the Company in the form of shares of its common stock. The Company
intends this Plan to encourage those individuals who are expected to contribute
significantly to the Company's success to accept employment or continue in the
employ of the Company and its Subsidiaries, to enhance their incentive to
perform at the highest level, and, in general, to further the best interests of
the Company and its shareholders.
ARTICLE II
Administration of the Plan
SECTION 2.01. Subject to the authority as described herein of the Board
of Directors of the Company (the "Board"), this Plan shall be administered by a
committee (the "Committee") designated by the Board, which shall be composed of
at least three members of the Board, all of whom are non-employee directors
within the meaning of Rule 16b-3(b)(3) issued under the Securities Exchange Act
of 1934, as amended (the "Act") and satisfy the requirements for an outside
director pursuant to Section 162(m) of the Internal Revenue Code of 1986, as
amended (the "Code"), and any regulations issued thereunder. Until otherwise
determined by the Board, the Compensation and Benefits Committee designated by
the Board shall be the Committee under this Plan. The Committee is authorized to
interpret this Plan as it deems best. All determinations by the Committee shall
be made by the affirmative vote of a majority of its members, but any
determination reduced
<PAGE>
2
to writing and signed by a majority of its members shall be fully as effective
as if it had been made by a majority vote at a meeting duly called and held.
Subject to any applicable provisions of the Company's by-laws or of this Plan,
all determinations by the Committee or by the Board pursuant to the provisions
of this Plan, and all related orders or resolutions of the Committee or the
Board, shall be final, conclusive and binding on all persons, including the
Company and its shareholders and those receiving options under this Plan.
SECTION 2.02. All authority of the Committee provided for in or
pursuant to this Plan, including that referred to in Section 2.01, may also be
exercised by the Board. In the event of any conflict or inconsistency between
determinations, orders, resolutions or other actions of the Committee and the
Board taken in connection with this Plan, the actions of the Board shall
control.
ARTICLE III
Eligibility
Only persons who are Employees, including individuals who have agreed
to become Employees as provided in Article XII, shall be eligible to receive
option grants under this Plan. Neither the members of the Committee nor any
member of the Board who is not an Employee shall be eligible to receive any such
grant.
ARTICLE IV
Stock Subject to Grants under this Plan
SECTION 4.01. Grants under this Plan shall relate to Common Stock
("Common Stock") of the Company and may be made in the form of incentive stock
options or nonqualified stock options.
SECTION 4.02. Subject to Section 4.03, the maximum number of shares of
Common Stock which may be issued pursuant to options exercised under this Plan
on and after January 14, 2000, shall be (i) 1,505,225 shares plus (ii) the
number of shares of each class of Common Stock issuable pursuant to options
outstanding under this Plan on March 17, 1997, reduced by (iii) the number of
shares of each class of Common Stock issued after March 17, 1997 pursuant to
options granted under this Plan, but prior to January 14, 2000. The number of
shares in (ii) and (iii) shall be adjusted to reflect the Exchange. Such number
of shares of Common Stock shall be reduced by the aggregate number of shares of
such
<PAGE>
3
Common Stock covered by rights exercised pursuant to Section 6.03 or Section
6.04. Notwithstanding the foregoing, in no event will any Employee be granted
options to purchase more than 223,578 shares of Common Stock in any calendar
year.
SECTION 4.03. In the event of any dividend payable in Common Stock or
any split or combination of Common Stock, (a) the number of shares which may be
issued under this Plan shall be proportionately increased or decreased, as the
case may be, (b) the number of shares (including shares subject to options not
then exercisable) deliverable pursuant to grants theretofore made shall be
proportionately increased or decreased, as the case may be, and (c) the
aggregate purchase price of shares subject to any such grant shall not be
changed. In the event of any other recapitalization, reorganization,
extraordinary dividend or distribution or restructuring transaction (including
any distribution of shares of stock of any Subsidiary or other property to
holders of shares of Common Stock) the number of shares issuable under this Plan
shall be subject to such adjustment as the Committee or the Board may deem
appropriate, and the number of shares issuable pursuant to any option
theretofore granted (whether or not then exercisable) and/or the option price
per share of such option, shall be subject to such adjustment as the Committee
or the Board may deem appropriate with a view toward preserving the value of
such option. In the event of a merger or share exchange in which the Company
will not survive as an independent, publicly owned corporation, or in the event
of a consolidation or of a sale of all or substantially all of the Company's
assets, provision shall be made for the protection and continuation of any
outstanding options by the substitution, on an equitable basis, of such shares
of stock, other securities, cash, or any combination thereof, as shall be
appropriate.
ARTICLE V
Purchase Price of Optioned Shares
Unless the Committee shall fix a greater purchase price, the purchase
price per share of Common Stock under any option shall be 100% of the Fair
Market Value of a share of Common Stock covered by such option at the time such
option is granted.
ARTICLE VI
Grant of Options
<PAGE>
4
SECTION 6.01. Each option granted under this Plan shall constitute
either an incentive stock option, intended to qualify under Section 422 of the
Code, or a nonqualified stock option, not intended to qualify under said Section
422, as determined in each case by the Committee.
SECTION 6.02. The Committee shall from time to time determine the
Employees to be granted options, it being understood that options may be granted
at different times to the same Employees. In addition, the Committee shall
determine (a) the number of shares of Common Stock subject to each option, (b)
the time or times when the options will be granted, (c) the purchase price of
the shares subject to each option, which price shall be not less than that
specified in Article V, and (d) the time or times when each option may be
exercised within the limits stated in this Plan, which except as provided in the
following sentence shall in no event be less than six months after the date of
grant. All options granted under this Plan shall become exercisable in their
entirety at the time of any Change in Control of the Company.
SECTION 6.03. In connection with any option granted under this Plan the
Committee in its discretion may grant a stock appreciation right (a "Stock
Appreciation Right"), providing that at the election of the holder of a Stock
Appreciation Right, the Company shall purchase all or a part of the related
option to the extent that such option is exercisable at the date of such
election for an amount (payable in the form of cash, shares of Common Stock or
any combination thereof, all as the Committee shall in its discretion determine)
equal to the excess of the Fair Market Value of the shares of Common Stock
covered by such option or part thereof so purchased on the date such election
shall be made over the purchase price of such shares so covered. A Stock
Appreciation Right may also provide that the Committee or the Board reserves the
right to determine, in its discretion, the date (which shall be subsequent to
six months after the date of grant of such option) on which such Right shall
first become exercisable in whole or in part.
SECTION 6.04. In connection with any option granted under this Plan,
the Committee in its discretion may grant a limited right (a "Limited Right")
providing that the Company shall, at the election of the holder of a Limited
Right (which election may be made only during the period beginning on the first
day following the date of expiration of any offer and ending on the 45th day
following such date), purchase all or any part of such option, for an amount
(payable entirely in cash) equal to the
<PAGE>
5
excess of the Offer Price of the shares of Common Stock covered by such
purchase on the date such election shall be made over the purchase price of such
shares so purchased. Notwithstanding any other provision of this Plan, no
Limited Right may be exercised within six months of the date of its grant.
SECTION 6.05. The authority with respect to the grant of options and
the determination of their provisions contained in Sections 6.01 through 6.04
may be delegated by the Board to one or more officers of the Company, on such
conditions and limitations as the Board shall approve; provided, however, that
no such authority shall be delegated with respect to the grant of options to any
officer or director of the Company or with respect to the determination of any
of the provisions of any of such options.
<PAGE>
6
ARTICLE VII
Non-Transferability of Options
No option or Stock Appreciation Right (including any Limited Rights)
granted under this Plan shall be transferable by the optionee otherwise than by
will or by the laws of descent and distribution, and any such option or Stock
Appreciation Right (including any Limited Rights) shall be exercised during the
lifetime of the optionee only by the optionee or the optionee's duly appointed
legal representative.
ARTICLE VIII
Exercise of Options
SECTION 8.01. Each incentive stock option granted under this Plan shall
terminate not later than 10 years from the date of grant. Each nonqualified
stock option granted under this Plan shall terminate not later than 10 years and
two days from the date of grant.
SECTION 8.02. Except in cases provided for in Article IX, each option
granted under this Plan may be exercised only while the optionee is an Employee.
An Employee's right to exercise any incentive stock option shall be subject to
the provisions of Section 422 of the Code restricting the exercisability of such
option during any calendar year.
SECTION 8.03. A person electing to exercise an option shall give
written notice to the Company of such election and of the number of shares of
Common Stock such person has elected to purchase, and shall tender the full
purchase price of such shares, which tender shall be made in cash or cash
equivalent (which may be such person's personal check) at the time of purchase
or in accordance with cash payment arrangements acceptable to the Company for
payment prior to delivery of such shares or, if the Committee so determines
either generally or with respect to a specified option or group of options, in
shares of Common Stock already owned by such person (which shares shall be
valued for such purpose on the basis of their Fair Market Value on the date of
exercise), or in any combination thereof. The Company shall have no obligation
to deliver shares of Common Stock pursuant to the exercise of any option, in
whole or in part, until the Company receives payment in full of the purchase
price thereof. No optionee or legal representative, legatee or distributee of
such optionee shall be or be deemed to be a holder
<PAGE>
7
of any shares of Common Stock subject to such option or entitled to any rights
as a shareholder of the Company in respect of any shares of Common Stock covered
by such option until such shares have been paid for in full and issued by the
Company. A person electing to exercise a Stock Appreciation Right or Limited
Right then exercisable shall give written notice to the Company of such election
and of the option or part thereof which is to be purchased by the Company.
ARTICLE IX
Termination of Options
SECTION 9.01. If an optionee shall cease to be an Employee for any
reason other than death or retirement under the Company's Pension-Retirement
Plan or any other pension plan sponsored by the Company or a Subsidiary, all of
the optionee's options shall be terminated except that any option, Stock
Appreciation Right or Limited Right to the extent then exercisable may be
exercised within three months after cessation of employment, but not later than
the termination date of the option or in the case of a Limited Right not later
than the expiration date of such Right.
SECTION 9.02. If and when an optionee shall cease to be an Employee by
reason of the optionee's early, normal or late retirement under the Company's
Pension-Retirement Plan or any pension plan sponsored by the Company or a
Subsidiary, all of the optionee's options shall be terminated except that (a)
any Stock Appreciation Right or Limited Right to the extent then exercisable may
be exercised within three months after such retirement, but not later than the
termination date of the option or in the case of a Limited Right not later than
the expiration date of such Right, (b) any option to the extent than exercisable
may, unless it otherwise provides, be exercised within three years after such
retirement, but not later than the termination date of the option, unless within
45 days after such retirement the Committee determines, in its discretion, that
such option may be exercised only within a period of shorter duration (not less
than three months following notice of such determination to the optionee) to be
specified by the Committee and (c) any unvested installment of any such option
which is scheduled to become exercisable within three years of the retiree's
date of retirement (unless within 45 days after such retirement the Committee
determines, in its discretion, that such period shall be of shorter duration
(not less than three months following notice of such determination to the
optionee) to be specified by the Committee), may be exercised after the date on
which such
<PAGE>
8
installment would become exercisable if the retiree had continued to be an
employee until such date; provided, however, that no option may be exercised
after the earlier of (i) three years and three months after the Employee's
retirement or (ii) the termination date of the option.
SECTION 9.03. If an optionee shall die while an Employee or within
three years of his or her retirement (as defined in Section 9.02) (a) all of the
optionee's Stock Appreciation Rights or Limited Rights shall be terminated and
(b) any outstanding option that would have become exercisable within three years
of his or her retirement shall become fully vested and may be exercised within
one year after the date of such death, but not later than the termination date
of the option, by the person designated in the optionee's last will and
testament or, if none, by the legal representative of the optionee's estate.
SECTION 9.04. If an optionee shall die after ceasing to be an Employee,
all of the optionee's options shall be terminated except that any option (but
not any Stock Appreciation Right or Limited Right) to the extent exercisable by
the optionee at the time of death may be exercised within one year after the
date of death, but not later than the termination date of the option, by the
optionee's estate or by the person designated in the optionee's last will and
testament.
ARTICLE X
Miscellaneous Provisions
SECTION 10.01. Each option grant under this Plan shall be subject to
the requirement that if at any time the Committee shall determine that the
listing, registration or qualification of the shares of Common Stock subject to
such grant upon any securities exchange or under any state or federal law, or
the consent or approval of any governmental regulatory body, is necessary or
desirable as a condition of, or in connection with, the making of such grant or
the issue of Common Stock pursuant thereto, then, anything in this Plan to the
contrary notwithstanding, no option may be exercised in whole or in part, and no
shares of Common Stock shall be issued, unless such listing, registration,
qualification, consent or approval shall have been effected or obtained free
from any conditions not reasonably acceptable to the Committee.
SECTION 10.02. The Company may establish appropriate procedures to
ensure payment or withholding of such income or
<PAGE>
9
other taxes as may be provided by law to be paid or withheld in connection with
the issue of shares of Common Stock under this Plan or the making of any
payments pursuant to Section 6.03 or 6.04, and to ensure that the Company
receives prompt advice concerning the occurrence of an Income Recognition Date
or any other event which may create, or affect the timing or amount of, any
obligation to pay or withhold any such taxes or which may make available to the
Company any tax deduction resulting from the occurrence of such event. Such
procedures may include arrangements for payment or withholding of taxes by
retaining shares of Common Stock otherwise issuable to the optionee in
accordance with the provisions of this Plan or by accepting already owned
shares, and by applying the Fair Market Value of such shares to the withholding
taxes payable or to the amount of tax liability in excess of withholding taxes
which arises from the delivery of such shares.
SECTION 10.03. Any question as to whether and when there has been a
retirement under the Company's Pension-Retirement Plan or any other pension plan
sponsored by the Company or a Subsidiary or a cessation of employment for any
other reason shall be determined by the Committee, and any such reasonable
determination shall be final.
SECTION 10.04. All instruments evidencing options granted shall be in
such form, consistent with this Plan and any applicable determinations or other
actions of the Committee and the Board, as the officers of the Company shall
determine.
SECTION 10.05. The grant of an option to an Employee shall not be
construed to give such Employee any right to be retained in the employ of the
Company or any of its Subsidiaries.
ARTICLE XI
Plan Termination and Amendments
SECTION 11.01. The Board may terminate this Plan at any time, but this
Plan shall in any event terminate on May 11, 2008, and no options may thereafter
be granted, unless the shareholders shall have approved its extension. Options
granted in accordance with this Plan prior to the date of its termination may
extend beyond that date.
SECTION 11.02. The Board or the Committee may from time to time amend,
modify or suspend this Plan, but no such amendment or modification without the
approval of the shareholders shall:
<PAGE>
10
(a) increase the maximum number (determined as provided in
this Plan) of shares of Common Stock which may be issued pursuant to
options granted under this Plan;
(b) permit the grant of any option at a purchase price less
than 100% of the Fair Market Value of the Common Stock covered by such
option at the time such option is granted;
(c) permit the exercise of an option unless arrangements are
made to ensure that the full purchase price of the shares as to which
the option is exercised is paid prior to delivery of such shares; or
(d) extend beyond May 11, 2008, the period during which option
grants may be made.
<PAGE>
11
ARTICLE XII
Definitions
SECTION 12.01. Wherever used in this Plan, the following term shall
have the meanings indicated:
Change in Control: A "Change in Control" shall be deemed to occur (1)
upon the approval of the shareholders of the Company (or if such approval is not
required, the approval of the Board) of (A) any consolidation or merger of the
Company in which the Company is not the continuing or surviving corporation or
pursuant to which the shares of the Company's Common Stock would be converted
into cash, securities or other property other than a consolidation or merger in
which holders of the total voting power in the election of directors of the
Company of Common Stock outstanding (exclusive of shares held by the Company's
affiliates) (the "Total Voting Power") immediately prior to the consolidation or
merger will have the same proportionate ownership of the total voting power in
the election of directors of the surviving corporation immediately after the
consolidation or merger, or (B) any sale, leases, exchange or other transfer (in
one transaction or a series of transactions) of all or substantially all the
assets of the Company, (2) when any "person" (as defined in Section 13(d) of the
Act) other than the Company, its affiliates or an employee benefit plan or trust
maintained by the Company or its affiliates, shall become the "beneficial owner"
(as defined in Rule 13d-3 under the Act), directly or indirectly, of more than
20% of the Total Voting Power, or (3) it at any time during a period of two
consecutive years, individuals who at the beginning of such period constituted
the Board shall cease for any reason to constitute at least a majority thereof,
unless the election by the Company's shareholders of each new director during
such two-year period was approved by a vote of at least two-thirds of the
directors then still in office who were directors at the beginning of such
two-year period.
Employee: Any officer and any other salaried employee of the Company or
a Subsidiary, including (a) any director who is also an employee of the Company
or a Subsidiary and (b) an officer or salaried employee on approved leave of
absence provided such employee's right to continue employment with the Company
or a Subsidiary upon expiration of such employee's leave of absence is
guaranteed either by statute or by contract with or by a policy of the Company
or a Subsidiary. For purposes of
<PAGE>
12
eligibility for the grant of a nonqualified stock option, such term shall
include any individual who has agreed in writing to become an officer or other
salaried employee of the Company or a Subsidiary within 30 days following the
date on which an option is granted to such individual.
Fair Market Value: With respect to shares of Common Stock, the average
of the high and low quoted sale prices of a share of such Stock on the date in
question (or, if there is no reported sale on such date, on the last preceding
date on which any reported sale occurred) on the New York Stock Exchange
Composite Transactions Tape.
Income Recognition Date: (a) With respect to a nonqualified option or
Stock Appreciation Right or Limited Right, the date of exercise thereof and (b)
with respect to an incentive stock option, the date or which a disqualifying
disposition (within the meaning of Code Section 421) occurs.
Offer: Any tender offer, exchange offer or series of purchases or other
acquisitions, or any combination of those transactions, as a result of which any
person or any two or more persons acting as a group, and all affiliates of such
person or persons, shall own beneficially more than 30% of the total voting
power in the election of directors of the Company of Common Stock outstanding
(exclusive of shares held by the Company's Subsidiaries).
Offer Price: The highest price per share of Common Stock paid in any
Offer which is in effect at any time beginning on the 19th day prior to the date
on which a Limited Right is exercised. Any securities or property which are part
or all of the consideration paid for shares of Common Stock in the Offer shall
be valued in determining the Offer Price at the higher of (a) the valuation
placed on such securities or property by the person or persons making such Offer
or (b) the valuation of such securities or property as may be determined by the
Committee.
Subsidiary: Any corporation of which stock representing at least 50% of
the ordinary voting power is owned, directly or indirectly, by the Company.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>9
<DESCRIPTION>EXHIBIT 10(G)
<TEXT>
<PAGE>
EXHIBIT 10(g)
THE PITTSTON COMPANY
MANAGEMENT PERFORMANCE
IMPROVEMENT PLAN
1. Purpose. The purpose of the Plan, which provides for Performance
Awards to be awarded to a select group of management and highly compensated
employees of the Company and its Subsidiaries, is to promote the interests of
the Company and its Subsidiaries by linking financial incentives provided to
such employees with improvement in the Company's financial results.
2. Administration. The Plan will be administered by a Committee
composed of at least three members of the Company's Board of Directors each of
whom shall qualify as (a) an "outside director" within the meaning of Section
162(m) of the Code and (b) a "nonemployee director" within the meaning of Rule
16b-3(b)(3)(i) promulgated under the Securities Exchange Act of 1934, as
amended. Until determined otherwise by the Board, the Compensation and Benefits
Committee designated by the Board shall be the Committee under this Plan.
Subject to the express provisions of the Plan, the Committee shall have
plenary authority, in its discretion, to administer the Plan and to exercise all
powers and authority either specifically granted to it under the Plan or
necessary and advisable in the administration of the Plan, including without
limitation the authority to interpret the Plan; to prescribe, amend and rescind
rules and regulations relating to the Plan; to grant Performance Awards; to
determine the terms, provisions and conditions of all Performance Awards granted
under the Plan (which need not be identical), the individuals to whom and the
time or times when Awards shall be granted, and the performance measures used to
determine any payments of Performance Awards; and to make all other necessary or
advisable determinations with respect to the Plan. The determination of the
Committee on such matters shall be conclusive.
3. Participation. The Committee may select from time to time key
employees of the Company and its Subsidiaries to participate in the Plan who, in
the opinion of the Committee, have the capacity to contribute significantly to
the successful performance of the Company and its Subsidiaries. An employee who
is selected to be a Participant for one Performance Measurement Period shall not
have any rights to be included as a Participant for subsequent Performance
Measurement Periods.
<PAGE>
2
4. Performance Awards. (a) Performance Awards may be, but are not
required to be, granted annually. Each Performance Award shall provide that a
Participant will be entitled to a cash payment following the completion of a
designated Performance Measurement Period (which shall be three fiscal years of
the Company), subject to the satisfaction of conditions set forth in the Plan,
and the achievement of certain goals established by the Committee in connection
with each Performance Award. Cash payments to which a Participant may be
entitled following the conclusion of each Performance Measurement Period shall
be determined based on the satisfaction of various performance measures, as the
Committee shall determine in the case of each Performance Award, including, but
not limited to, net income, operating income, earnings per share, return on
equity, return on capital and/or economic value added with respect to the
Company, any Subsidiary and/or business unit of the Company or any Subsidiary.
The Committee shall determine and establish in writing, with respect to each
Performance Award, the performance measures for each year of the Performance
Measurement Period (including the levels of performance measures that must be
achieved to receive corresponding levels of cash payments); provided, however,
that minimum performance measures for the full Performance Measurement Period
(which performance measures may be raised in subsequent years) shall be
established in writing no later than 90 days after the commencement of the
Performance Measurement Period. Each Performance Award shall include a (i)
target level of performance measures which if satisfied will entitle a
Participant to 100% of a specified target dollar amount and (ii) maximum payment
(specified in dollars) which may not be greater than 200% of the target dollar
amount described in subparagraph (i). The maximum incentive payment any one
Participant may be entitled to receive (whether or not deferred as described in
Section 4(c) below) for any one Performance Measurement Period is $2,000,000.
Performance Award shall terminate for all purposes unless the
Participant remains continuously employed by the Company or a Subsidiary until
the date established by the Committee for payment of the Performance Award
unless the termination is (i) due to Retirement, Disability or death; (ii)
approved by the Committee; or (iii) subsequent to a Change in Control. In the
event a Participant's employment is terminated due to Retirement, Disability or
death, he or she (or, in the event of the Participant's death, his or her
beneficiary) will be entitled to a prorated portion of the Performance Award to
which he or she would otherwise be entitled based on the portion of the
Performance Measurement Period (determined in completed months) during which he
or she was continuously employed by the Company or a Subsidiary and based on the
extent to which the performance goals were achieved as determined at the end of
the Performance Measurement Period. In the event of a Participant's termination
of employment for reasons other than Retirement, Disability or death, the
Committee may, but is not obligated to, authorize payment of an amount up to the
prorated
<PAGE>
3
amount that would be payable under the preceding sentence. In the event of a
Change in Control, Performance Awards shall be deemed to be earned at 150% of
the specified target dollar amount described in Section 4(a)(i) and shall be
paid as soon as practicable following the earlier of the Participant's
termination of employment after the Change in Control or the end of the
Performance Measurement Period during which the Change in Control occurred.
(c) Participants entitled to receive a Performance Award for a
Performance Measurement Period will be entitled to receive a lump-sum cash
payment on a date selected by the Committee following the end of the Performance
Measurement Period provided that the performance measures are met.
Notwithstanding the preceding sentence, Participants may elect to defer the
receipt of payment of a Performance Award under the Key Employees' Deferred
Compensation Program of The Pittston Company in accordance with the terms of
such plan. Any payments made under this Plan shall be subject to all applicable
Federal, state or local taxes required by law to be withheld.
5. Designation of Beneficiary. A Participant may designate, in a
written election filed with the Committee, a beneficiary or beneficiaries (which
may be an entity other than a natural person) to receive all distributions and
payments under the Plan after the Participant's death. Any such designation may
be revoked, and a new election may be made, at any time and from to time, by the
Participant without the consent of any beneficiary (unless otherwise required by
law). If the Participant designates more than one beneficiary, any distributions
and payments to such beneficiaries shall be made in equal percentages unless the
Participant has designated otherwise in writing, in which case the distributions
and payments shall be made in the percentages designated by the Participant. If
no beneficiary has been named by the Participant or no beneficiary survives the
Participant, any amounts due to the Participant shall be distributed or paid in
a single sum to the Participant's estate.
6. Nonexclusive Plan. The adoption of the Plan shall not be construed
as creating any limitations on the power of the Company to adopt such other
incentive arrangements as it may deem desirable and such arrangements may be
either generally applicable or applicable only in specific cases.
7. Nonassignability. No Performance Awards may be transferred,
alienated or assigned other than by will or by the laws of descent and
distribution.
8. Amendment and Termination. The Board of Directors may amend or
terminate this Plan at any time without the approval of the Company's
shareholders.
<PAGE>
4
9. Effectiveness of the Plan. The Plan shall become effective on
January 1, 2000, provided that the Plan is approved by the Company's
shareholders at the annual meeting of shareholders occurring in calendar year
2000.
10. No Right to Continued Employment. Neither the adoption of the Plan
nor any action of the Board or Committee shall be deemed to give any officer or
employee any right to continued employment or any other rights other than to
payments under a Performance Award granted hereunder in accordance with the
terms of such award.
11. Governing Law. The Plan shall be construed and interpreted under
the laws of the state of New York.
12. Definitions. For the purpose of this Plan, unless the context
requires otherwise, the following terms shall have the meanings indicated:
(a) "Board of Directors" means the board of directors of the Company.
(b) "Change in Control" shall have the same meaning as under The
Pittston Company 1988 Stock Option Plan, as amended from time to time, or any
successor to such plan.
(c) "Code" means the Internal Revenue Code of 1986, as amended.
(d) "Committee" means the Compensation and Benefits Committee of the
Company or any successor thereto unless determined otherwise by the Board of
Directors.
(e) "Company" means The Pittston Company, a Virginia corporation.
(f) "Disability" means a physical or mental incapacity which would
entitle the Participant to benefits under the Company's long-term disability
plan.
(g) "Participant" means an employee who has been selected by the
Committee to participate in the Plan.
(h) "Performance Award" means an incentive award made pursuant to the
Plan.
(i) "Performance Measurement Period" means a performance cycle of one
or more fiscal years of the Company. The initial Performance Measurement Period
shall be 2000-2002 (inclusive).
(j) "Plan" means The Pittston Company Management Performance
Improvement Plan as amended from time to time.
<PAGE>
5
(k) "Retirement" means, with respect to any Participant, the
Participant's retirement as an employee of the Company or a Subsidiary under the
Pension-Retirement Plan of The Pittston Company and Subsidiaries or other
retirement plan sponsored by the Company or a Subsidiary.
(l) "Subsidiary" means any corporation more than 80% of the outstanding
voting stock of which is owned by the Company, by the Company and one or more
Subsidiaries or by one or more Subsidiaries. "Subsidiaries" means more than one
of any such corporation.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>10
<DESCRIPTION>EXHIBIT 10(L)
<TEXT>
<PAGE>
EXHIBIT 10(l)
================================================================================
THE PITTSTON COMPANY DIRECTORS' STOCK ACCUMULATION PLAN
-----------------------
As Amended and Restated
as of January 14, 2000
-----------------------
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
PREAMBLE .............................................................................................. 1
ARTICLE I DEFINITIONS.................................................................... 2
ARTICLE II ADMINISTRATION................................................................. 5
SECTION 1 Authorized Shares........................................................... 5
SECTION 2 Administration.............................................................. 6
ARTICLE III PARTICIPATION.................................................................. 7
ARTICLE IV ALLOCATIONS.................................................................... 7
SECTION 1 Initial Allocation.......................................................... 7
SECTION 2 Additional Allocations...................................................... 7
SECTION 3 Supplemental Allocations.................................................... 8
SECTION 4 Conversion of Existing Incentive Accounts to
Pittston Brink's Units...................................................... 9
SECTION 5 Adjustments................................................................. 9
SECTION 6 Dividends and Distributions................................................. 9
ARTICLE V DISTRIBUTIONS.................................................................. 10
SECTION 1 Entitlement to Benefits..................................................... 10
SECTION 2 Distribution of Shares...................................................... 11
ARTICLE VI DESIGNATION OF BENEFICIARY..................................................... 13
ARTICLE VII MISCELLANEOUS.................................................................. 15
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
SECTION 1 Nontransferability of Benefits ............................................ 15
SECTION 2 Limitation of Rights of Non-Employee Director.............................. 15
SECTION 3 Amendment and Termination ................................................. 16
SECTION 4 Funding.................................................................... 16
SECTION 5 Governing Law.............................................................. 17
</TABLE>
SCHEDULE A
<PAGE>
The Pittston Company Directors' Stock Accumulation Plan
As Amended and Restated as of January 14, 2000
PREAMBLE
The Pittston Company Directors' Stock Accumulation Plan,
effective June 1, 1996, is designed to more closely align the interests of
non-employee directors to the long-term interests of The Pittston Company and
its shareholders. The Plan is intended to replace the Pittston Retirement Plan
for Non-Employee Directors which was terminated as of May 31, 1996, with the
consent of the participants therein, and the benefits accrued thereunder as of
May 31, 1996, were transferred to the Plan.
Effective January 14, 2000, the Plan is amended and restated
to reflect the exchange of .4848 of a share of Pittston Brink's Group Common
Stock for each outstanding share of Pittston BAX Group Common Stock and .0817 of
a share of Pittston Brink's Group Common Stock for each outstanding share of
Pittston Minerals Group Common Stock.
The Plan continues to provide a portion of the overall
compensation package of participating directors in the form of deferred stock
equivalent units which will be distributed in the form of Pittston Brink's Group
Common Stock upon the occurrence of certain events.
<PAGE>
2
ARTICLE I
Definitions
Wherever used in the Plan, the following terms shall have the
meanings indicated:
Account: The account maintained by the Company for a
Non-Employee Director to document the amounts credited under the Plan and the
Units into which such amounts shall be converted.
BAX Exchange Ratio: The ratio whereby .4848 of a share of
Pittston Brink's Stock will be exchanged for each outstanding share of BAX Stock
on the Exchange Date.
BAX Stock: Pittston BAX Group Common Stock, par value $1.00
per share.
BAX Unit: The equivalent of one share of BAX Stock credited to
a Non-Employee Director's Account.
Board of Directors: The board of directors of the Company.
Change in Control: A Change in Control shall be deemed to
occur (a) upon the approval of the shareholders of the Company (or if such
approval is not required, the approval of the Board of Directors) of (i) any
consolidation or merger of the Company in which the Company is not the
continuing or surviving corporation or pursuant to which the shares of Pittston
Brink's Stock would be converted into cash, securities or other property other
than a consolidation or merger in which holders of the total voting power in the
election of directors of the Company of Pittston Brink's Stock outstanding
(exclusive of shares held by
<PAGE>
3
the Company's affiliates) (the "Total Voting Power") immediately prior to the
consolidation or merger will have the same proportionate ownership of the total
voting power in the election of directors of the surviving corporation
immediately after the consolidation or merger, or (ii) any sale, leases,
exchange or other transfer (in one transaction or a series of transactions) of
all or substantially all the assets of the Company, (b) when any "person" (as
defined in Section 13(d) of the Securities Exchange Act of 1934, as amended (the
"Act") other than the Company, its affiliates or an employee benefit plan or
trust maintained by the Company or its affiliates, shall become the "beneficial
owner" (as defined in Rule 13d-3 under the Act), directly or indirectly, of more
than 20% of the Total Voting Power, or (c) it at any time during a period of two
consecutive years, individuals who at the beginning of such period constituted
the Board of Directors shall cease for any reason to constitute at least a
majority thereof, unless the election by the Company's shareholders of each new
director during such two-year period was approved by a vote of at least
two-thirds of the directors then still in office who were directors at the
beginning of such two-year period.
Committee: The Administrative Committee of the Company.
Company: The Pittston Company.
Effective Date: June 1, 1996.
<PAGE>
4
Exchange: The exchange of Pittston Brink's Stock for
outstanding shares of BAX Stock and Minerals Stock as of the Exchange Date.
Exchange Date: January 14, 2000, the date as of which the
Exchange occurred.
Initial Allocation: The amount set forth in Schedule A.
Minerals Exchange Ratio: The ratio whereby .0817 of a share of
Pittston Brink's Stock will be exchanged for each outstanding share of Minerals
Stock on the Exchange Date.
Minerals Stock: Pittston Minerals Group Common Stock, par
value $1.00 per share.
Minerals Unit: The equivalent of one share of Minerals Stock
credited to a Non-Employee Director's Account.
Non-Employee Director: Any member of the Board of Directors
who is not an employee of the Company or a Subsidiary.
Pittston Brink's Stock: Pittston Brink's Group Common Stock,
par value $1.00 per share.
Pittston Brink's Unit: The equivalent of one share of Pittston
Brink's Stock credited to a Non-Employee Director's Account.
Plan: The Pittston Company Directors' Stock Accumulation Plan
as set forth herein and as amended from time to time.
<PAGE>
5
Shares: On and after January 19, 1996, and prior to the
Exchange Date, Pittston Brink's Stock, BAX Stock or Minerals Stock, as the case
may be and on and after the Exchange Date, Pittston Brink's Stock.
Subsidiary: Any corporation, whether or not incorporated in
the United States of America, more than 80% of the outstanding voting stock of
which is owned by the Company, by the Company and one or more subsidiaries or by
one or more subsidiaries.
Unit: On and after January 19, 1996, and prior to the Exchange
Date, a Pittston Brink's Unit, BAX Unit or Minerals Unit, as the case may be,
and on and after the Exchange Date, a Pittston Brink's Unit.
Year of Service: Each consecutive 12-month period of service
as a Non-Employee Director, commencing on the date that a Non-Employee Director
commences service on the Board of Directors, including periods prior to the
Effective Date. Years of Service prior to the Effective Date shall be rounded to
the nearest year.
ARTICLE II
Administration
SECTION 1. Authorized Shares. The maximum number of Units that
may be credited hereunder after the Exchange Date is 37,291 Pittston Brink's
Units. The number of Shares that may be
<PAGE>
6
issued or otherwise distributed hereunder will be equal to the number of Units
that may be credited hereunder.
In the event of any change in the number of shares of Pittston
Brink's Stock outstanding by reason of any stock split, stock dividend,
recapitalization, merger, consolidation, reorganization, combination, or
exchange of shares, split-up, split-off, spin-off, liquidation or other similar
change in capitalization, any distribution to common shareholders other than
cash dividends, a corresponding adjustment shall be made to the number of shares
that may be deemed issued under the Plan by the Committee. Such adjustment shall
be conclusive and binding for all purposes of the Plan.
SECTION 2. Administration. The Committee is authorized to
construe the provisions of the Plan and to make all determinations in connection
with the administration of the Plan. All such determinations made by the
Committee shall be final, conclusive and binding on all parties, including
Non-Employee Directors participating in the Plan.
All authority of the Committee provided for in, or pursuant
to, this Plan, may also be exercised by the Board of Directors. In the event of
any conflict or inconsistency between determinations, orders, resolutions or
other actions of the Committee and the Board of Directors taken in connection
with this Plan, the actions of the Board of Directors shall control.
<PAGE>
7
ARTICLE III
Participation
Each Non-Employee Director on the Effective Date shall be
eligible to participate in the Plan on such date. Thereafter, each Non-Employee
Director shall be eligible to participate as of the date on which he becomes a
Non-Employee Director.
ARTICLE IV
Allocations
SECTION 1. Initial Allocation. As of the Effective Date, an
amount equal to the Initial Allocation was credited to his or her Account. The
amount of each Non-Employee Director's Initial Allocation was converted into
Units in the following proportions: 50% shall be converted into Pittston Brink's
Units, 30% was converted into BAX Units and 20% was converted into Minerals
Units. The Units were credited to each Non-Employee Director's Account as of
June 3, 1996. The number (computed to the second decimal place) of Units so
credited was determined by dividing the portion of the Initial Allocation for
each Non-Employee Director to be allocated to each class of Units by the average
of the high and low per share quoted sale prices of Pittston Brink's Stock, BAX
Stock or Minerals Stock, as the case may be, as reported on the New York Stock
Exchange Composite Transaction Tape on June 3, 1996.
SECTION 2. Additional Allocations. As of June 1, 1997, and as
of each subsequent June 1, each Non-Employee Director (including Non-Employee
Directors elected to the Board
<PAGE>
8
of Directors after the Effective Date) shall be entitled to an additional
allocation to his or her Account (which allocation shall be in addition to any
retainer fees paid in cash) equal to (a) for each Non-Employee Director who, as
of such June 1 has accrued less than eight Years of Service, 50% of the annual
retainer in effect for such Non-Employee Director on such June 1 and (b) for
each Non-Employee Director who, as of such June 1, has accrued eight or more
Years of Service, 25% of the annual retainer in effect for such Non-Employee
Director on such June 1. For each calendar year after 1999, such additional
allocations shall be converted on the first trading day in June into Pittston
Brink's Units. The number (computed to the second decimal place) of Pittston
Brink's Units so credited shall be determined by dividing the amount of the
additional allocation for each Non-Employee Director for the year by the average
of the high and low per share quoted sale prices of Pittston Brink's Stock, as
reported on the New York Stock Exchange Composite Transaction Tape on the first
trading date in June.
SECTION 3. Supplemental Allocations. As of the effective date
of any increase in a Non-Employee Director's annual retainer after the Effective
Date, the number of Units to be allocated to each Non-Employee Director's
Account shall be multiplied by a fraction, the numerator of which is the amount
of the annual retainer after the increase and the denominator of
<PAGE>
9
which is the amount of such retainer immediately prior to such increase.
SECTION 4. Conversion of Existing Incentive Accounts to
Pittston Brink's Units. As of the Exchange Date, all BAX Units and Minerals
Units in a Non-Employee Director's Account shall be converted into Pittston
Brink's Units by multiplying the number of BAX Units and Minerals Units in the
Non-Employee Director's Account by the BAX Exchange Ratio or the Minerals
Exchange Ratio, respectively.
SECTION 5. Adjustments. The Committee shall determine such
equitable adjustments in the Units credited to each Account as may be
appropriate to reflect any stock split, stock dividend, recapitalization,
merger, consolidation, reorganization, combination, or exchange of shares,
split-up, split-off, spin-off, liquidation or other similar change in
capitalization, or any distribution to common shareholders other than cash
dividends.
SECTION 6. Dividends and Distributions. Whenever a cash
dividend or any other distribution is paid with respect to shares of Pittston
Brink's Stock, the Account of each Non-Employee Director will be credited with
an additional number of Pittston Brink's Units, equal to the number of shares of
Pittston Brink's Stock including fractional shares (computed to the second
decimal place), that could have been purchased had such dividend or other
distribution been paid to the Account on
<PAGE>
10
the payment date for such dividend or distribution based on the number of Shares
giving rise to the dividend or distribution represented by Units in such Account
as of such date and assuming the amount of such dividend or value of such
distribution had been used to acquire additional Pittston Brink's Units. Such
additional Units shall be deemed to be purchased at the average of the high and
low per share quoted sale prices of Pittston Brink's Stock, as reported on the
New York Stock Exchange Composite Transaction Tape on the payment date for the
dividend or other distribution. The value of any distribution will be determined
by the Committee.
ARTICLE V
Distributions
SECTION 1. Entitlement to Benefits. Each Non-Employee Director
who completes at least five Years of Service as a Non-Employee Director shall be
entitled to receive a distribution in Pittston Brink's Stock in respect of all
Units in his or her Account if, after completion of such five Years of Service,
he or she:
(a) retires from the Board of Directors on or after attaining
age 70;
(b) retires from the Board of Directors prior to age 72 at the
end of a full term of office in anticipation of
<PAGE>
11
attaining such age during what would otherwise be such individual's
next full term of office as a director;
(c) retires from the Board of Directors prior to age 70 but
after attaining age 65, as a result of ill health, relocation
(residence or principal place of business) or entering into any
governmental, diplomatic or other service or employment if, in the
opinion of outside legal counsel, his or her continued service on the
Board of Directors might create a conflict of interest;
(d) retires from the Board of Directors at any time following
a Change in Control; or
(e) dies while serving as a Non-Employee Director.
In the event a Non-Employee Director terminates service on the
Board of Directors for any reason not described above, all Units shall be
forfeited and all rights of the Non-Employee Director to the related Shares
shall terminate without further obligation on the part of the Company.
Section 2. Distribution of Shares. Each Non-Employee Director
who is entitled to a distribution of Shares pursuant to Section 1 of this
Article V shall receive a distribution in Pittston Brink's Stock, in respect of
all Units standing to the credit of such Non-Employee Director's Account, in a
single lump-sum distribution as soon as practicable following his or her
termination of service as a Non-Employee Director; provided, however, that a
Non-Employee Director may elect, at least 12
<PAGE>
12
months prior to his or her termination of service, to receive distribution of
the Shares represented by the Units credited to his or her Account in
substantially equal annual installments (not more than 10) commencing on the
first day of the month next following the date of his or her termination of
service (whether by death, disability, retirement or otherwise) or as promptly
as practicable thereafter. Such Non-Employee Director may at any time elect to
change the manner of such payment, provided that any such election is made at
least 12 months in advance of his or her termination of service as a
Non-Employee Director.
The number of shares of Pittston Brink's Stock to be included
in each installment payment shall be determined by multiplying the number of
Pittston Brink's Units in the Non-Employee Director's Account (including any
dividends or distributions credited to such Account pursuant to Section 6 of
Article IV whether before or after the initial installment payment date) as of
the lst day of the month preceding the initial installment payment and as of
each succeeding anniversary of such date by a fraction, the numerator or which
is one and the denominator of which is the number of remaining installments
(including the current installment).
Any fractional Units shall be converted to cash based on the
average of the high and low per share quoted sale prices of the Pittston Brink's
Stock as reported on the New York Stock Exchange Composite Transaction Tape, on
the last trading day of
<PAGE>
13
the month preceding the month of distribution and shall be paid in cash.
ARTICLE VI
Designation of Beneficiary
A Non-Employee Director may designate in a written election
filed with the Committee a beneficiary or beneficiaries (which may be an entity
other than a natural person) to receive all distributions and payments under the
Plan after the Non-Employee Director's death. Any such designation may be
revoked, and a new election may be made, at any time and from time to time, by
the Non-Employee Director without the consent of any beneficiary. If the
Non-Employee Director designates more than one beneficiary, any distributions
and payments to such beneficiaries shall be made in equal percentages unless the
Non-Employee Director has designated otherwise, in which case the distributions
and payments shall be made in the percentages designated by the Non-Employee
Director. If no beneficiary has been named by the Non-Employee Director or no
beneficiary survives the Non-Employee Director, the remaining Shares (including
fractional Shares) in the Non-Employee Director's Account shall be distributed
or paid in a single sum to the Non-Employee Director's estate. In the event of a
beneficiary's death, the remaining installments will be paid to a contingent
beneficiary, if any, designated by the Non-Employee Director or, in the absence
of a surviving contingent beneficiary, the
<PAGE>
14
remaining Shares (including fractional Shares) shall be distributed or paid to
the primary beneficiary's estate in a single distribution. All distributions
shall be made in Shares except that fractional shares shall be paid in cash.
<PAGE>
15
ARTICLE VII
Miscellaneous
SECTION 1. Nontransferability of Benefits. Except as provided
in Article VI, Units credited to an Account shall not be transferable by a
Non-Employee Director or former Non-Employee Director (or his or her
beneficiaries) other than by will or the laws of descent and distribution or
pursuant to a domestic relations order. No Non-Employee Director, no person
claiming through a Non-Employee Director, nor any other person shall have any
right or interest under the Plan, or in its continuance, in the payment of any
amount or distribution of any Shares under the Plan, unless and until all the
provisions of the Plan, any determination made by the Committee thereunder, and
any restrictions and limitations on the payment itself have been fully complied
with. Except as provided in this Section 1, no rights under the Plan, contingent
or otherwise, shall be transferable, assignable or subject to any pledge or
encumbrance of any nature, nor shall the Company or any of its Subsidiaries be
obligated, except as otherwise required by law, to recognize or give effect to
any such transfer, assignment, pledge or encumbrance.
SECTION 2. Limitation on Rights of Non-Employee Director.
Nothing in this Plan shall confer upon any Non-Employee Director the right to be
nominated for reelection to the
<PAGE>
16
Board of Directors. The right of a Non-Employee Director to receive any Shares
shall be no greater than the right of any unsecured general creditor of the
Company.
SECTION 3. Amendment and Termination. The Corporate Governance
and Nominating Committee of the Board of Directors may from time to time amend
any of the provisions of the Plan, or may at any time terminate the Plan;
provided, however, that the allocation formulas included in Article IV may not
be amended more than once in any six-month period. No amendment or termination
shall adversely affect any Units (or distributions in respect thereof) which
shall theretofore have been credited to any Non-Employee Director's Account
without the prior written consent of the Non-Employee Director.
SECTION 4. Funding. The Plan shall be unfunded. Shares shall
be acquired (a) from the trustee under the Employee Benefits Trust Agreement
made December 7, 1992, as amended from time to time, (b) by purchases on the New
York Stock Exchange or (c) in such other manner, including acquisition of
Pittston Brink's Stock, otherwise than on said Exchange, at such prices, in such
amounts and at such times as the Company in its sole discretion may determine.
SECTION 5. Governing Law. The Plan and all provisions thereof
shall be construed and administered according to the laws of the Commonwealth of
Virginia.
<PAGE>
17
Schedule A
The Initial Allocation for each Non-Employee Director shall be
the amount set forth in a report prepared by Foster Higgins dated February 7,
1996.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>11
<DESCRIPTION>EXHIBIT 10(T)
<TEXT>
<PAGE>
EXHIBIT 10(t)
THE PITTSTON COMPANY
EMPLOYEE WELFARE BENEFIT TRUST
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I Definitions.......................... 2
ARTICLE II Purpose.............................. 5
ARTICLE III Contributions........................ 5
ARTICLE IV Trustee Powers, Rights and Duties.... 6
ARTICLE V Administrative Committee............. 19
ARTICLE VI Accounting and Recordkeeping......... 26
ARTICLE VII Benefits............................. 30
ARTICLE VIII Amendment ........................... 31
ARTICLE IX Termination ......................... 32
ARTICLE X Miscellaneous ....................... 33
ARTICLE XI Instructions ........................ 39
EXHIBIT A ..................................... 42
EXHIBIT B ..................................... 43
</TABLE>
<PAGE>
THE PITTSTON COMPANY
EMPLOYEE WELFARE BENEFIT TRUST
THIS AGREEMENT is entered into by and between THE PITTSTON COMPANY, a
Virginia corporation (hereinafter referred to as the "Sponsor"), and THE CHASE
MANHATTAN BANK as trustee (hereinafter referred to as the "Trustee");
W I T N E S S E T H:
WHEREAS, the Sponsor and its affiliates have provided certain welfare
benefits to eligible employee and retirees pursuant to or by reference to
collective bargaining agreements which are or have been in effect; and
WHEREAS, the Sponsor desires to establish a voluntary employees'
beneficiary association employee welfare benefits trust to be known as THE
PITTSTON COMPANY EMPLOYEE WELFARE BENEFIT TRUST (hereinafter referred to as the
"Trust"), through which it will provide certain welfare benefits for the
exclusive benefit of eligible employees and retirees and their dependents,
pursuant to or by reference to certain designated collective bargaining
agreements which are or have been in effect between the Sponsor and its
affiliates and collective bargaining units; and
WHEREAS, the Trust is intended to be exempt from Federal income tax
under Section 501 (c) (9) of the Internal Revenue Code of 1986 (as such section
may be amended or renumbered from time to time) and to comply with the
provisions of the Employee Retirement Income Security Act of 1974 and any other
applicable law; and
WHEREAS, the Administrative Committee will serve as Administrator for
the Plan with respect to the administration of the Trust.
NOW, THEREFORE, the Sponsor hereby establishes the Trust as of the
Effective Date, and the Trustee agrees to serve as Trustee of the Trust, to
hold, administer and distribute the assets of the Trust, in trust, for the uses
and purposes and in accordance with the terms and conditions of this Agreement,
and as it may hereafter be amended.
-1-
<PAGE>
ARTICLE I
Definitions
The following definitions apply for purposes of this Trust:
Section 1.1. "Act" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations thereunder.
Section 1.2. "Administrative Committee" means (i) the persons or
entities designated by the Board who from time to time serve as the
Administrative Committee, or (ii) the Chief Financial Officer of the Sponsor in
the event that no persons or entities are then serving as the Administrative
Committee under this Agreement.
Section 1.3. "Administrator" means, within the terms of the Act and
solely for purposes of this Trust, the Administrative Committee.
Section 1.4. "Agent for Service of Process" means, with respect to this
Trust, the Trustee.
Section 1.5. "Agreement" means this Trust instrument.
Section 1.6. "Applicable Law" means the provisions of any law, or any
administrative guideline, ruling, exemption, or determination of a judicial,
semi-judicial, regulatory, self-regulatory or statutory authority, in each case,
applicable to the Trustee, the Sponsor, or the Plan after taking into account
any preemptive effect of the Act.
Section 1.7. "Beneficiary" means any person or persons (including, but
not limited to, an individual, trust, estate, executor, administrator or
fiduciary, whether corporate or otherwise) designated as such in accordance with
the provisions of the Plan or the Trust to receive any distribution from the
Trust.
Section 1.8. "Board" means the Board of Directors of the Sponsor or the
person or persons to whom such Board of Directors may delegate any of its
rights, duties or powers hereunder.
Section 1.9. "Code" means the Internal Revenue Code of 1986, as amended
from time to time, and the regulations thereunder.
-2-
<PAGE>
Section 1.10. "Collective Bargaining Agreement" means a contract between
the Employer and a labor organization governing wages, hours and other terms and
conditions of employment as provided in the National Labor Relations Act, as
amended, which is or has been in effect.
Section 1.11. "Corporate Action" means any subscription right, bonus
issue, stock repurchase plan, redemption, exchange, tender offer, or similar
matters with respect to any property that requires discretionary action by the
Trust Fund, but does not include proxy voting.
Section 1.12. "Dependent" means an individual who qualifies as a
dependent under the terms of the Plan.
Section 1.13. "Effective Date" means August 2, 1999.
Section 1.14. "Employee" means any person who is considered an employee
of the Employer under the Plan.
Section 1.15. "Employer" means, individually and collectively, The
Pittston Company, any Successor Company, and any other company or business
entity sufficiently affiliated with the Sponsor for purposes of Section 501 (c)
(9) of the Code and which adopts the Trust in accordance with Section 10.6 and
is indicated as a participating employer in the Trust in Exhibit A attached
hereto, as may be updated from time to time.
Section 1.16. "Instruction" shall have the meaning ascribed to it in
Section 11.2 (a).
Section 1.17. "Liability" means any liability, loss, cost, damage,
penalty, fine, obligation or expense of any kind whatsoever (including, without
limitation, reasonable attorneys', accountants', consultants' or experts' fees
and disbursements).
Section 1.18. "Participant" means any eligible Employee, Retiree or
other individual who has commenced participation under the Plan, for so long as
such individual is eligible under the Plan, except to the extent that the
individuals benefits under the Plan are funded by the Employer through a means
other than this Trust.
Section 1.19. "Person" means a natural person, trust, estate,
corporation of any kind or purpose, mutual company, joint-stock
-3-
<PAGE>
company, unincorporated organization, association, partnership, joint venture,
employee organization, administrator, board, participant, beneficiary, trustee,
partner or venturer acting in an individual, fiduciary, or representative
capacity, as the context may require.
Section 1.20. "Plan" means, individually and collectively, the employee
welfare benefit plan(s) or arrangement(s) sponsored or maintained or
contributed to by the Employer pursuant to or by reference to a Collective
Bargaining Agreement and funded in whole or in part through this Trust, each one
of which is listed in Exhibit B (which may be amended from time to time by the
Sponsor), and as such plan or plans (or Collective Bargaining Agreements) may be
amended, modified, deleted, supplemented or terminated from time to time, for so
long as such plan or plans may be funded through the Trust, in whole or in part.
Section 1.21. "Qualified Investment Manager" means an investment adviser
as defined in Section 3(38) of the Act.
Section 1.22. "Retiree" means an individual who is eligible for coverage
under the Plan as a retiree.
Section 1.23. "Sponsor" means The Pittston Company or its Successor
Company.
Section 1.24. "Sponsor-Directed Account" means any Investment Account
managed by the Administrative Committee, whether because the Administrative
Committee or the Sponsor so directs or because a Qualified Investment Manager
has resigned or been discharged.
Section 1.25. "Successor Company" means any entity which acquires the
right, title and interest in and to the Employer whether pursuant to sale,
gift, assignment, final and unappealed order of a court with competent
jurisdiction, or otherwise.
Section 1.26. "Trust" means the legal entity which is created by this
Agreement.
Section 1.27. "Trust Fund" means the corpus or res of the Trust together
with all earnings, appreciation or additions thereto.
-4-
<PAGE>
Section 1.28. "Trust Fund Earnings means the net of the Trust Fund's
earnings, gains, losses and expenses during the Trust Year.
Section 1.29. "Trust Year" means the period from the Effective Date to
December 31, 1999, and each succeeding twelve month period ending December 31
thereafter.
Section 1.30. "Trustee" means The Chase Manhattan Bank and any duly
appointed successor Trustee.
ARTICLE II
Purpose
Section 2.1. Purpose. The Trust has been established to provide
Participants and their Dependents and Beneficiaries with welfare benefits as set
forth in the Plan, and to provide such other permissible payments as may be
determined from time to time, and it is intended that the benefits and payments
provided by the Plan and funded through the Trust be "life, sick, accident, or
other benefits" as that phrase is defined in Section 501 (c) (9) of the Code.
Section 2.2. Exclusive Benefit. No part of the Trust Fund shall be used
for purposes other than for (1) the exclusive benefit of Participants, their
Dependents and Beneficiaries in accordance with the provisions of the Plan and
the Trust, and (2) defraying reasonable expenses of administering the Plan and
the Trust.
ARTICLE III
Contributions
Section 3.1. Employer Contributions. The Employer shall contribute to
the Trust such amount or amounts, if any, as the Sponsor may determine from time
to time. The Trustee shall receive, hold and be accountable for all
contributions paid to it which are reasonably acceptable to the Trustee from an
administrative standpoint; provided, however, that the Trustee shall have no
duty with respect to any contribution until it is actually received by the
Trustee and provided further that the Trustee shall have no duty to require any
contributions to be paid
-5-
<PAGE>
to it, or to determine that the contributions received by it comply with the
Plan or with any resolution or determination of the Administrative Committee
providing therefor, and further provided that the Trustee shall have no
responsibility with respect to the operation or administration of the Plan. The
Trustee need not inquire into the source of any currency or other property
transferred to it nor into the authority or right of the transferor of such
currency or property to transfer the same to the Trustee.
Section 3.2. Irrevocability of Contributions.
(a) In General. Except as may otherwise be permitted by Section 501 (c)
(9) of the Code or Subsection (b) of this Section 3.2, all contributions made to
the Trust shall be irrevocable.
(b) Return of Contributions. In the event that the Administrative
Committee shall certify that (i) any contribution, has been made to the Trust by
a mistake of fact, or (ii) that a contribution to the Trust has been conditioned
on qualification of the Trust under Section 501(c)(9) of the Code and that such
qualification has been denied, or (iii) that a contribution to the Trust has
been conditioned upon the deductibility thereof under Section 162 or 419 of the
Code and that such deduction has been disallowed, and shall direct the return of
any such contribution, and such return of contribution does not constitute a
disqualified benefit under Section 4976 of the Code, the Trustee shall return
such contribution (or the value thereof, if less) to the Employer in accordance
with such direction, but in no event shall any such return be made other than
prior to the expiration of one year following the payment thereof in the case of
a direction under (i) or (ii) above, or one year following the disallowance of
the deduction in the case of a direction under (iii) above. The amounts of any
contribution(s) to be returned to the Employer in accordance with this Section
shall be limited to Trust Fund assets.
ARTICLE IV
Trustee Powers, Rights and Duties
Section 4.1. Authority and Control. In no event shall Trust assets be
invested in stocks or obligations of the Employer and any of its affiliates,
unless such investment is permissible under the Act and other applicable law.
The rights, powers and authorities and the duties and responsibilities of the
Trustee and Qualified
-6-
<PAGE>
Investment Manager shall be as provided in this Agreement and the Trustee and
Qualified Investment Manager shall not be a party to the Plan and shall have
only such duties with respect to the Plan as are specified in this Agreement,
and all representations and recitals in this Agreement with respect to the Plan
shall be deemed to be solely those of the Company.
Section 4.2. Establishment of Investment Accounts.
(a) The Administrative Committee, may provide Instructions directing the
Trustee to establish one or more separate investment accounts within the Trust
Fund, each separate account being hereinafter referred to as an "Investment
Account." The Trustee shall transfer to each Investment Account those assets of
the Trust Fund in accordance with such Instructions. The Administrative
Committee also may provide Instructions directing the Trustee to eliminate one
or more Investment Accounts, and the Trustee shall thereupon dispose of the
assets of any such Investment Account and reinvest the proceeds in accordance
with the Instructions of the Administrative Committee. The Trustee shall be
under no duty to question, and shall not incur any liability on account of
following, any Instruction of the Administrative Committee with respect to the
establishment or elimination of any Investment Account or the allocation or
transfer of property between or among any Investment Accounts. The Trustee shall
be under no duty to review the investment guidelines, objectives and
restrictions established, or the specific investment Instructions given, by the
Administrative Committee for any Investment Account, or to make suggestions to
the Administrative Committee in connection therewith.
(b) All interest, dividends and other income received with respect to,
and any proceeds received from the sale, exchange, or other disposition of,
property held in an investment Account shall be credited to and reinvested in
that Investment Account. All expenses of the Trust Fund which are allocable to a
particular Investment Account shall be so allocated and charged.
Section 4.3. Sponsor-Directed Investment Accounts. The Trustee shall, if
so directed by the Administrative Committee in written Instructions, segregate
all or a portion of the Trust Fund held by it into one or more separate
Investment Accounts to be known as Sponsor Directed Accounts, with respect to
which the Administrative Committee shall have the powers and duties granted to a
Qualified Investment Manager under this Agreement. The
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Administrative Committee, by written Instructions to the Trustee, may at any
time relinquish its powers under this Section 4.3 and direct that a
Sponsor-Directed Account shall no longer be maintained. In addition, during any
time when there is no Qualified Investment Manager with respect to an Investment
Account (such as before an investment management agreement takes effect or after
it terminates), the Administrative Committee shall direct the investment and
reinvestment of such Investment Account. Whenever the Administrative Committee
is directing the investment and reinvestment of an Investment Account or a
Sponsor-Directed Account, the Administrative Committee shall have the powers and
duties which a Qualified Investment Manager would have under this Agreement if a
Qualified Investment Manager were then serving and the Trustee shall be
protected in relying on the Administrative Committee's Instructions without
reviewing investments or making suggestions to the same extent as it would be
protected under this Agreement if it had relied on the Instructions of a
Qualified Investment Manager.
Section 4.4. Trustee Directed Investment Accounts. If the Administrative
Committee or a Qualified Investment Manager wish the Trustee to invest cash held
in the Trust Fund or an Investment Account on a short-term basis, the
Administrative Committee or the Qualified Investment Manager (as the case may
be) may select one of the common trust funds maintained by the Trustee from time
to time for this purpose and give the Trustee instructions (including standing
instructions) to transfer cash to that common trust fund pending investment or
disbursement. Otherwise, the Trustee shall have no duty or responsibility to
direct the investment and reinvestment of the Trust Fund of any Investment
Account unless expressly agreed to in writing between the Trustee and the
Administrative Committee. In the event that the Trustee enters into such an
agreement, it shall have the powers and duties of a Qualified Investment Manager
under this Agreement with regard to that Investment Account.
Section 4.5. Certain Orders to Brokers. Except as otherwise provided in
this Agreement, the Qualified Investment Manager of an Investment Account (or
the Administrative Committee in the case of a Sponsor-Directed Account) shall
have the power and authority to be exercised in its sole discretion at any time
and from time to time, to issue orders for the purchase or sale of property
directly to a broker. Written Instructions with respect to the issuance of each
such order shall be given promptly to the Trustee by the Qualified Investment
Manager or the Administrative Committee and
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the confirmation of each such order shall be confirmed to the Trustee by the
broker. Unless otherwise directed by the Administrative Committee or Qualified
Investment Manager, such Instructions shall be authority for the Trustee to pay
for property purchased or to deliver property sold as the case may be. Upon
Instructions from the Qualified Investment Manager or the Administrative
Committee, the Trustee will execute and deliver appropriate trading
authorizations, but no such authorization shall be deemed to increase the
liability or responsibility of the Trustee under this Agreement.
Section 4.6. Corporate Actions.
(a) The Trustee will follow Corporate Actions and advise the applicable
Qualified Investment Manager (or the Administrative Committee in the case of a
Sponsor-Directed Account) of those Corporate Actions of which the Trustee
receives notice at its central corporate actions department from the issuer or
from the depository in which the applicable property is maintained or notice
published in publications and reported in reporting services routinely used by
the Trustee for this purpose.
(b) If the Administrative Committee or Qualified Investment Manager fail
to provide the Trustee with timely Instructions with respect to any Corporate
Action, the Trustee will not take any action in relation to that Corporate
Action, except as otherwise agreed in writing by the Trustee and the applicable
Qualified Investment Manager (or the Administrative Committee, as the case may
be) or as may be set forth by the Trustee as a default action in the advice it
provides under Section 4.6(a) with respect to that Corporate Action.
Section 4.7. Authorized Trust Insurance Investment Powers. The Trustee,
at the direction of the Administrative Committee, is authorized to invest in,
modify, amend or replace one or more group or individual policies or contracts
issued by insurance companies to provide for all or any portion of the benefits
of the Plan or to no longer purchase such policies or contracts.
Section 4.8. Investment Powers. Except to the extent otherwise limited
by this Agreement, the Act and other applicable law, and subject to the
direction of the Administrative Committee, the Trustee shall have the following
powers and rights (i) in its direction of Investment Accounts where it has
express investment management discretion as provided in Section 4.4, and (ii)
upon
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Instructions from a Qualified Investment Manager or the Administrative
Committee, as the case may be, for all other Investment Accounts:
(a) To invest and reinvest the Trust Fund assets in notes, bonds,
mortgages, commercial paper, preferred or common stocks, mutual funds (including
mutual funds which pay the Trustee reasonable service fees), securities of the
United States or any State government, or other securities, rights, obligations
or other property, real or personal, and in savings, money markets and time
deposit accounts, including time deposit open accounts.
(b) To retain in cash or cash equivalents either all or a portion of the
Trust Fund either awaiting investment, reinvestment or to meet contemplated
payments of benefits hereunder and to deposit such funds (in savings accounts
or checking accounts) in any financial institution supervised by the United
States or a State.
(c) To invest and reinvest all or any part of the Trust Fund through the
medium of any common, collective or commingled trust fund, and during such
period of time as an investment through any such medium shall exist, the
declaration of trust of such fund shall constitute a part of this Agreement.
(d) To make payments (including transfers) from the Trust Fund to such
persons, trusts or other entities, including the Employer, in such manner, at
such times and in such amounts as the Administrative Committee shall direct
without inquiring as to whether a payee is entitled to the payment or as to
whether the payment is proper, to the extent such payment is made in good faith
without actual notice or knowledge of the impropriety of such payment. Payments
during any Trust Year shall be deemed to be made first from income earned during
such year to the extent thereof, then from prior accumulated income to the
extent thereof, then from Participant contributions to the extent thereof, and
lastly from Employer contributions. The Trustee shall have no duty or
responsibility to see to the application of distributions made from the Trust
Fund or to ascertain whether any such directions comply with the Plan, or to
ascertain that the disposition of distributions by the Employer or any agent of
the Employer complies with the Plan.
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(e) Except with respect to any claim or demand arising under a Plan, to
compromise, contest, arbitrate, settle or abandon claims and demands.
(f) To begin, maintain or defend any litigation necessary or appropriate
in connection with the investment, reinvestment and administration of the Trust,
in addition to the right to a judicial settlement of accounts.
(g) To make, execute, acknowledge and deliver any and all instruments
that may be necessary or appropriate to carry out the powers herein granted.
(h) To have all rights of an individual owner, including the power to
give proxies to vote stocks and other voting securities, to join in or oppose
(alone or jointly with others) voting trusts, mergers, consolidations,
foreclosures, reorganizations, recapitalizations or liquidations, and to
exercise or sell stock subscription or conversion rights.
(i) To purchase and otherwise deal with insurance policies pursuant to
the provisions of Section 4.7.
(j) To make remittances of premiums, contributions or other payments to
insurers, trust funds, governmental funds or other accounts with respect to
insurance policies or other welfare benefit arrangements and to receive premium
refunds, experience-rated refunds, dividends or other adjustments related
thereto.
(k) To acquire and hold qualifying employer securities and qualifying
employer real property, as such investments are defined in Section 407(d) of
the Act.
(l) To sell for cash or on credit, to grant options, convert, redeem,
exchange for other property, to enter into standby agreements for future
investment, either with or without a standby fee, or otherwise to dispose of any
property at any time held by it.
(m) To trade in financial options and futures, (including index options
and options on futures); to enter into repurchase agreements, reverse repurchase
agreements, swaps, caps, floors, straddles, collars and other derivative
arrangements; and to execute in connection therewith such account agreements and
other
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agreements in such form and upon such terms as the Qualified Investment Manager
or the Administrative Committee shall direct.
(n) To loan pursuant to separate agreement as may be agreed upon any
securities to brokers or dealers and to secure the same in any manner, and
during the term of any such loan to permit the loaned securities to be
transferred into the name of and voted by the borrower or others.
(o) To purchase, enter, sell, hold, and generally deal in any manner in
and with contracts for the immediate or future delivery of financial instruments
of any issuer or of any other property; to grant, purchase, sell, exercise,
permit to expire, permit to be held in escrow, and otherwise to acquire, dispose
of, hold and generally deal in any manner with and in all forms of options in
any combination; and, in connection with its exercise of the powers granted in
this Agreement, to deposit any currency or property as collateral with any
broker-dealer or other Person, to permit property to be held by or in the name
of others or in transferable form, to retain any form of property received as a
result of the exercise of any of the foregoing powers whether or not investment
in such property is otherwise authorized under this Agreement and to hold and
administer any currency or property with respect to which the foregoing powers
have or may be exercised, including any securities or collateral acquired by it
or in any property received as a result of its exercise of such powers, as a
part of the account subject to the foregoing powers, or in any sub-account,
which property may be invested in property of different types than the property
otherwise held in the account.
(p) To borrow money on a secured or unsecured basis and to enter into,
execute, and deliver notes, agreements, mortgages, and other instruments in that
regard.
(q) To employ suitable agents and counsel and to pay their reasonable
and proper expenses and compensation.
(r) To form corporations and to create trusts to hold title to any
currency or property, all upon such terms and conditions as may be deemed
advisable by the Qualified Investment Manager or Administrative Committee.
(s) To invest with the Trustee (i) in any type of interest bearing
investments (including but not limited to savings accounts, money market
accounts, certificates of deposit and repurchase
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agreements) and (ii) in non-interest bearing accounts (including, but not
limited to checking accounts).
(t) To appoint ancillary trustees to hold any portion of the assets of
the trust and to pay their reasonable expenses and compensation.
(u) To do and perform all acts with respect to the Trust Fund which the
Trustee could do or perform if it, as an individual, were the owner thereof; the
enumeration of particular powers herein shall not be construed as limiting the
general powers intended to be granted to the Trustee.
Section 4.9. Administrative Powers of the Trustee.
(a) Notwithstanding the appointment of a Qualified Investment Manager,
the Trustee shall have the following powers and authority, to be exercised with
respect to the Trust Fund:
(i) To deposit securities with a corporate depository. The
certificates representing, securities, including those in bearer form,
may be held in bulk form with, and may be merged into, certificates of
the same class of the same issuer which constitute assets of other
accounts or owners, without certification as to the ownership
attached. Utilization of a book-entry system may be made for the
transfer or pledge of securities held by the Trustee or by a corporate
depository. The Trustee shall at all times, however, maintain a
separate and distinct record of any securities owned by the Trust
Fund.
(ii) To participate in and use the Federal Book-Entry Account System,
a service provided by the Federal Reserve Bank for its member banks
for deposit of Treasury securities.
(iii) To hold securities or other property in.its name as Trustee or
in the name of its nominee or nominees, or in such other form as it
determines best, with or without disclosing the Trust relationship and
to execute such documents as are necessary to accomplish the
foregoing; provided, however, that (i) the records of the Trustee
shall indicate the actual ownership of such securities or other
property, and (ii) except as authorized by regulations promulgated by
the Secretary of the United States Department of Labor, the Trustee
shall not maintain the indicia of ownership of any
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assets of the Trust Fund outside the jurisdiction of the District
Courts of the United States.
(iv) To retain any funds or property subject to any dispute or to
decline to make payment or delivery thereof until final adjudication
is made by a court of competent jurisdiction or decision by the
National Labor Relations Board or arbiter acting under a Collective
Bargaining Agreement except in the event the Administrative Committee
directs otherwise.
(v) To employ suitable agents and counsel, and subject to the approval
of the Administrative Committee which approval shall not be
unreasonably withheld to pay their reasonable expenses and
compensation out of the Trust Fund.
(vi) To permit overdrafts in any Investment Account in connection with
the settlement of investment transactions relating to, or the
distribution of funds from, the Trust Fund, (and the Qualified
Investment Manager, if any, of such Investment Account shall be deemed
to have requested the Trustee to permit such overdraft under the terms
and conditions announced by the Trustee from time to time for
overdrafts); to repay any such overdraft out of the Trust Fund; to
permit the party extending any such overdraft (including the Trustee
in its corporate capacity) to set the overdraft off against any cash
balances in the Trust Fund; and to pay reasonable interest to the
party extending the overdraft to the extent permitted under Applicable
Law.
(vii) To reverse any erroneous or provisional credit entries to the
Trust Fund with respect to any income or security transaction
settlement proceeds, retroactively to the date upon which the correct
entry or no entry should have been made.
(viii) To perform any and all acts which in its judgment are necessary
and appropriate for the proper and advantageous management, investment
and distribution of the Trust Fund in accordance with the Plan and the
Trust.
(ix) Generally to do all ministerial acts, whether or not expressly
authorized, which the Trustee may deem necessary or desirable in
carrying out its duties under this Agreement.
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(b) Except as otherwise required by the Act, the Trustee shall not be
responsible for the acts or omissions of any agent other than an affiliate of
the Trustee selected by it to provide pricing services that the Trustee does not
customarily provide itself, provided that the Trustee satisfies its standard of
care under Section 4.10 of this Agreement with respect to selecting the agent
and maintaining the agency relationship.
Section 4.10. Fiduciary Obligations.
(a) Subject to the provisions of Article III, the Trustee shall
discharge its duties hereunder in good faith and solely in the interest of the
Participants, Dependents and their Beneficiaries and --
(i) for the exclusive purposes of:
(A) providing benefits to Participants, Dependents and their
Beneficiaries; and
(B) defraying reasonable expenses of administering the Trust;
(ii) with the care, skill, prudence and diligence under the
circumstances then prevailing that a prudent man acting in a like
capacity and familiar with such matters would use in the conduct of an
enterprise of like character and with like aims.
(b) Except as otherwise provided by the Act, under no circumstances
shall the Trustee incur liability to any Person for any indirect, consequential
or special damages (including, without limitation, lost profits) of any form,
whether or not foreseeable and regardless of the form of the action in which
such a claim may be brought, with respect to the Trust or its role as Trustee.
Section 4.11. Indemnification of the Sponsor; Contribution.
(a) Subject to Section 4.10(b), the Trustee shall indemnify and save
harmless the Sponsor, Administrative Committee, Employers, their affiliates, and
their officers and employees for and from any Liability to the extent arising
(i) out of the Trustee's failure to perform its duties under the Agreement in a
manner free of negligence, recklessness or intentional disregard of its
responsibilities hereunder, or (ii) by reason of any breach of any statutory or
other duty owed to the Sponsor, Administrative
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Committee or the Employers by the Trustee under this Agreement except to the
extent the Sponsor, Administrative Committee or the Employers may otherwise be
considered liable under Section 405(a) of the Act for the Trustee's breach,
provided that the Trustee's compliance in good faith with any Instruction on
which it is entitled to rely under this Agreement shall not be considered to be
negligent or reckless conduct under clause (i).
(b) The Sponsor, Administrative Committee, Employers, their affiliates,
and their officers and employees may bring action against the Trustee to
contribute to the satisfaction of any liability to the extent that the liability
(i) is not subject to indemnification under any of Subsection (a), Section
5.12, or Section 5.13 and (ii) is caused by the culpable conduct of the Trustee
or its agents.
(c) The foregoing rights of indemnification and contribution shall not
limit any rights or remedies that may be available to the Sponsor,
Administrative Committee, Employers or their affiliates under Applicable Law.
Section 4.12. Compensation and Expenses. The Trustee shall be entitled
to reasonable compensation for its services hereunder as may be agreed upon
between the Trustee and the Sponsor from time to time, plus reimbursement of
reasonable expenses actually incurred. Such compensation and all reasonable and
proper expenses of administration of the Trust, including counsel fees, shall be
withdrawn by the Trustee out of the Trust Fund unless paid by the Sponsor, but
such compensation and expenses shall be paid by the Sponsor if the same cannot
by operation of law be withdrawn from the Trust Fund. All payments under this
Article 4 may be made from the Trust Fund in the event that the Sponsor has not
paid same or notified Trustee in writing of intent to pay by the billing period
subsequent to the charge without approval of or Instructions from the
Administrative Committee. The Trustee shall be entitled, as an additional part
of its compensation under this Agreement, to the use of funds which may be held
in demand deposit or other noninterest bearing accounts established for the
payment of benefits or Plan disbursements or which are otherwise maintained for
purposes of administering the Trust Fund which relates solely to outstanding
checks and drafts.
Section 4.13. Commingled Trust Fund. The fact that separate records may
be maintained by the Administrative Committee or any
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other person for each Participant, Dependent or Beneficiary, or group thereof,
shall not be deemed to segregate for or give to such Participant, Dependent or
Beneficiary, or group thereof, any direct interest in any specific assets of the
Trust Fund.
Section 4.14. Diversification; other Funding Media. In the event that
assets of the Plan are held in any funding medium other than the Trust Fund or
are under the control or direction of a Qualified Investment Manager pursuant to
Section 5.11 or are otherwise funds as to which the Trustee does not retain sole
investment authority, the Administrative Committee shall be solely responsible
for the manner in which the investments held in all of the funds and funding
media of the Plan, including those under the control or direction of a Qualified
Investment Manager, any trust other than the Trust, or any insurance contract or
policy, considered collectively, shall be diversified. The Administrative
Committee shall evidence its acceptance of such responsibility for
diversification and shall specify such rules or guidelines for the manner of
investment of any portion of the Trust Fund as to which the Trustee assumes
investment authority as the Administrative Committee shall determine to be
necessary or appropriate in order to meet the diversification standards of the
Act, as the same shall affect such portion of the Trust Fund, in a written
instrument filed with the Trustee. The Trustee shall retain such duty of
diversification within any particular classification of property or other
guidelines specified by the Administrative Committee with respect to such
portion of the Trust Fund as shall be set forth in said instrument. The
acceptance of said rules and guidelines specified by the Administrative
Committee referred to in this section shall be subject to the approval of the
Trustee but such approval shall not increase the responsibility or liability of
the Trustee under this Agreement or otherwise. Without limiting the generality
of the foregoing, it is agreed that the Trustee shall have no liability or
responsibility for the diversification of the investments of the Plan (i) held
in any such portion of the Trust Fund as to which the Trustee retains investment
authority, except to the extent provided in said instrument filed with the
Trustee, (ii) held in any portion of the Trust Fund under the control or
direction of a Qualified Investment Manager or any funding medium of the Plan
other than the Trust Fund, or (iii) held in all funding media of the Plan,
considered collectively, if any portion of the Plan is held in any funding
medium other than the Trust Fund or is under the control or direction of a
Qualified Investment Manager.
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Section 4.15. Change of Trustee.
(a) Resignation. A Trustee may resign at any time by giving thirty (30)
days advance written notice, by registered or certified mail, to the
Administrative Committee which may, in writing, waive the thirty (30) day notice
requirement.
(b) Removal of Trustee. The Administrative Committee may remove a
Trustee by giving thirty (30) days advance written notice by registered or
certified mail to the Trustee and also notifying it of the identity of the
successor Trustee and of the successor Trustee's acceptance of the trusteeship.
The Trustee may, in writing, waive the thirty (30) day notice requirement.
(c) Duties of Resigning or Removed Trustee and of Successor Trustee. If
a Trustee resigns or is removed, it shall promptly transfer and deliver the
assets of the Trust Fund to the successor Trustee (in the event such successor
Trustee is a bank or trust company) or, in the event the successor Trustee is
not a bank or trust company, to a custodian such as a bank, trust company,
brokerage company or other financial institution acceptable to the Trustee
(which acceptability shall not be unreasonably withheld) designated by the
successor Trustee. Within ninety (90) days, the resigned or removed Trustee
shall furnish to the Sponsor and the Administrative Committee an accounting of
its administration of the Trust from the date of its last accounting. Each
successor Trustee shall succeed to the title to the Trust Fund vested in its
predecessor without the signing or filing of any further instrument, but any
resigning or removed Trustee shall execute all documents and do all acts
necessary to vest such title of record in any successor Trustee. Each successor
shall have all the powers, rights and duties conferred by this Trust as if
originally named Trustee. No successor Trustee shall be personally liable for
any act or failure to act of a predecessor Trustee.
(d) Vacancy. If at any time there is no person or entity serving as
Trustee, then the Administrative Committee shall serve as Trustee. The
Administrative Committee may appoint a successor trustee in its discretion.
(e) Notification of Parties. Copies of all instruments involving the
resignation, removal, appointment or addition of a Trustee shall be delivered to
the Administrative Committee and to every other person serving as Trustee.
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Section 4.16. Settlement of Securities Transactions. Settlement of
purchases and sales of property may be conducted in accordance with prevailing
standards of the market in which the transaction occurs. The risk of
non-receipt of payment or other consideration shall be the Trust's and the
Trustee shall have no liability for the failure of the Trust Fund to receive
the same. All credits to the Trust Fund of the anticipated proceeds of sales
and redemptions of property and of anticipated income from property shall be
conditional upon receipt by the Trustee of final payment and may be reversed to
the extent final payment is not received.
Section 4.17. Taxes. The Trustee shall assume, until advised to the
contrary, that the Trust is described under Section 501 (c) (9) of the Code, is
exempt from Federal income tax under Section 501 (a) thereof, and is exempt from
state and local income tax. Upon the direction of the Sponsor or the
Administrative Committee, to pay any estate, inheritance, income or other tax,
or estimated tax, charge or assessment attributable to any benefit, transaction,
investment or event which, in the Sponsor's or the Administrative Committee's
opinion, shall or may be required to be paid by the Trustee as a result of such
benefit, transaction, investment or event; and to require, before making any
payment, such release or other document from any taxing authority or such
indemnity from the intended payee as it deems necessary for its protection.
Further, to pay any tax, charge or assessment made upon the Trust subsequent to
giving the Sponsor notice of such tax, charge or assessment unless (i) the
Sponsor (A) directs the Trustee not to pay such tax, charge or assessment, and
(B) agrees to indemnify the Trustee for legal expenses incurred by the Trustee
as a result of such nonpayment; or (ii) an unappealable final determination has
been issued with respect to the tax, charge or assessment. The Administrative
Committee shall timely file all Federal, state and local tax and information
returns relating to the Plan and the Trust.
ARTICLE V
Administrative Committee
Section 5.1. General Rights, Powers and Duties of the Administrative
Committee. The Administrative Committee shall be responsible for the management,
operation and administration of the Plan with respect to the Trust. In addition
to any powers, rights and duties set forth elsewhere in the Trust, it shall:
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(a) adopt, such rules, regulations and conditions, consistent with the
provisions of the Trust and obligations of applicable law, as necessary or
advisable to effectuate its duties, rights or responsibilities under the Plan or
the Trust;
(b) maintain records adequate to prepare reports, returns and other
information required by law;
(c) construe and interpret provisions of the Plan to resolve all
questions arising with regard to its duties, rights or responsibilities under
the Plan and such construction and interpretation shall be binding on all
parties with respect to matters arising under the Plan;
(d) direct the Trustee as to payments from the Trust and the making of
any other payments (including transfers) from the Trust Fund which it may deem
necessary or appropriate for the proper administration of the Plan;
(e) employ or retain agents, attorneys, actuaries, accountants,
consultants or other persons (who also may be employed by or represent the
Employer or the Trustee) necessary to effectuate its duties, rights or
responsibilities under the Plan or the Trust; and
(f) apply to the Internal Revenue Service for recognition of
qualification or requalification under Code Section 501(c)(9) for the Trust.
Section 5.2. Information to be Furnished to Administrative Committee.
The Employer shall furnish the Administrative Committee, to the extent permitted
by law and requested by the Administrative Committee, such payroll information
and data with respect to its employees that the Administrative Committee may
require in connection with the administration of the Plan. Such information
shall be limited in nature to such matters as name, classification, social
security number, amount of compensation, number of hours of service and years
of service and any other information necessary to establish eligibility to
participate or entitlement to benefits. Participants, Dependents, Beneficiaries
and other recipients shall, as a pre-condition to receipt of a payment from the
Trust, furnish to the Administrative Committee (or to the Employer acting as the
agent of the Administrative Committee) such evidence, data or information and
execute such documents or provide such receipts as the Administrative Committee
reasonably requests in order to carry out its duties.
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Section 5.3. Fiduciary Obligations. Subject to the provisions of Article
III, the Administrative Committee shall discharge their duties hereunder solely
in the interest of the Participants, Dependents and their Beneficiaries and --
(a) for the exclusive purposes of
(i) providing benefits to Participants, Dependents and their
Beneficiaries; and
(ii) defraying reasonable expenses of administering the Plan and
the Trust; and
(b) With the care, skill, prudence and diligence under the circumstances
then prevailing that a prudent man acting in a like capacity and familiar with
such matters would use in the conduct of an enterprise of like character and
with like aims.
(c) The Administrative Committee shall be responsible for ensuring that
any payment directed under this Article by Instructions conforms to the
provisions of the Plan, this Agreement, and the provisions of the Act. Subject
to Article XI, each Instruction of the Administrative Committee shall be in
writing and shall be deemed to include a certification that any payment or other
distribution directed thereby is one which the Administrative Committee is
authorized to direct, and the Trustee may conclusively rely on such
certification without further investigation unless the Trustee has actual
knowledge to the contrary. The Trustee shall not incur any liability or other
damage on account of any payments or other distributions made by it in
accordance with the written Instructions of the Administrative Committee. The
Sponsor may elect to appoint a third party agent for benefit payments upon
notice to the Trustee, in which event, the Trustee's sole duty shall be to make
payments to, or receive amounts back from, such agent as may be directed by the
Administrative Committee or its delegate in Instructions.
Section 5.4. Uniform Application. The Administrative Committee shall
apply the provisions and any rules, regulations and conditions adopted by it in
a uniform and nondiscriminatory manner in accordance with Sections 505 and 501
(c) (9) of the Code, so that all persons similarly situated shall be similarly
treated. In addition, all rules, regulations and conditions adopted by it must
be reasonably related to the type or amount of benefit or other
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payment provided under the Trust and must be objectively selected and
administered so as not to provide disproportionate benefits in favor of
officers, shareholders or highly compensated employees of the Employer or highly
compensated individuals (in accordance with Sections 501 (c) (9) and 505 of the
Code).
Section 5.5. Allocation and Delegation of Certain Fiduciary Duties.
(a) The Board may allocate any of its rights, powers and duties
hereunder to the Administrative Committee. Any such allocation shall be in
writing and shall set forth the particular rights, powers and duties being
allocated. The Board may revoke any allocation made pursuant to this Subsection
by written notification to the Administrative Committee.
(b) The Board and the Administrative Committee shall have the authority
to delegate any of their rights, powers and duties hereunder and may revoke any
delegation made pursuant to this Subsection by written notification to the
person(s) or entity(ies) to whom the delegation has been made.
Section 5.6. Committee Action. All actions of the Administrative
Committee shall be taken pursuant to the decision of a majority of the members
then serving on such Committee. Any person serving on a Committee may execute
any document in the name of and on behalf of such Committee and otherwise has
the full power and authority to act on behalf of a majority of the members
serving on the Committee.
Section 5.7. Compensation and Expenses. Persons serving on the
Administrative Committee shall be entitled to reasonable compensation for their
services hereunder and reimbursement of reasonable expenses; provided, however,
that a person serving on the Administrative Committee who is an Employee or a
party-in-interest (as defined in the Act) with respect to the Employer shall not
be entitled to any compensation for his services on the Administrative Committee
from the Trust Fund, except for the reimbursement of reasonable expenses
actually incurred. Such compensation and expenses shall be paid from the Trust
Fund, subject to prior payment or reimbursement by the Employer in its
discretion, and provided that, to the extent Trust Fund assets are inadequate,
the Employer shall pay such compensation and expenses.
Section 5.8. Indemnification of the Administrative Committee
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by the Employer. To the extent permitted by law and the Sponsor's Articles of
Incorporation and By-laws, the Sponsor hereby agrees to indemnify any person
serving on the Administrative Committee who is also an Employee of the Employer
for, and hold him harmless against, any and all liabilities, losses, costs or
expenses (including legal fees and expenses) of whatever nature which may be
imposed on, incurred by, or against him at any time by reason of his service
under the Plan or the Trust except to the extent it is a result of action or
inaction by the person which is determined to be criminal or grossly negligent.
Payments of any indemnity, expenses or fees under this Section shall be made
solely from assets of the Employer and shall not be made directly or indirectly
from Trust Fund assets.
Section 5.9. Limitation of Responsibilities and of Liabilities. The
functions of any attorney, actuary or accountant engaged pursuant to Section 5.1
(e) or otherwise with respect to the Plan or the Trust shall be limited to the
specific services and duties for which they are engaged, and such persons shall
have no other duties or obligations under the Trust. Such persons shall exercise
no discretionary authority or discretionary control respecting management of the
Plan or the Trust and shall exercise no authority or control respecting
management or disposition of the assets of the Trust. Any person serving on the
Administrative Committee who is an Employee shall be free from all liability for
his acts and conduct in the administration of the Trust or management of Trust
Fund assets except for acts of willful misconduct; provided, however, that the
foregoing shall not relieve him from any responsibility or liability for any
responsibility, obligation or duty he may have pursuant to the Act or other
applicable law.
Section 5.10. Rebates and Adjustments. Notwithstanding any provisions of
this Trust to the contrary, the Administrative Committee may, in its discretion
and to the extent permitted by the Act and Section 501 (c) (9) of the Code and
as would not result in the imposition of tax under Section 4976 of the Code,
direct the Trustee to return excess insurance premiums or payments to the person
(including the Employer) whose contribution was applied to such premium or
payments and to make administrative adjustments strictly incidental to the
providing of benefits to Participants. In addition, in the event a benefit is
provided or a disbursement is made from the Trust Fund as a result of a
directive from the Administrative Committee and it is determined by the Sponsor
that such benefit should not have been provided or disbursement made, the
Sponsor shall make a contribution to reimburse the Trust to the
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extent such contribution is deductible for income tax purposes.
Section 5.11. Appointment of Qualified Investment Manager. The
Administrative committee may appoint a Qualified Investment Manager to manage,
invest and reinvest any part or all of the assets of the Trust Fund in the same
manner and to the same extent as the Trustee is empowered pursuant to Article
IV. Such appointment shall be in writing, signed by the Administrative Committee
and the Qualified Investment Manager and shall set forth the rights, powers and
duties of the Qualified Investment Manager, including acknowledging that the
Qualified Investment Manager is a fiduciary with respect to the Trust. Assets of
the Trust Fund managed or invested by a Qualified Investment Manager shall be
segregated into one or more "Investment Accounts." The appointment of a
Qualified Investment Manager may be revoked by the Administrative Committee or
resigned by the Qualified Investment Manager at any time, by written
notification to the other party to the appointment. Written notice of the
appointment, removal or resignation of a Qualified Investment Manager shall be
given to the Trustee. As long as such Qualified Investment Manager is acting,
such Qualified Investment Manager shall have, to the extent set forth in the
written appointment, full authority to direct the Trustee with respect to the
acquisition, retention, management and disposition of the assets from time to
time comprising the Investment Accounts being managed by such Qualified
Investment Manager and the voting of the proxies thereon, and the Trustee shall
have no duty or obligation to review the assets from time to time comprising
such Investment Accounts, to make any recommendations with respect to the
investment, reinvestment or retention thereof, nor with respect to the voting of
proxies thereon, nor to determine whether any direction from such Qualified
Investment Manager is proper or within the terms of this Agreement. The
Administrative Committee shall be responsible for ascertaining that, while each
Qualified Investment Manager is acting in that capacity, that Qualified
Investment Manager satisfies the requirements of Section 3(38) of the Act, or
any successor thereto. The Administrative Committee shall furnish the Trustee
with written notice of the appointment of each Qualified Investment Manager
hereunder, and of the termination of any such appointment. Such notice shall
specify the assets which shall constitute the Investment Account. The Trustee
shall be fully protected in relying upon the effectiveness of such appointment
and the Qualified Investment Manager's continuing satisfaction of the
requirements set forth above until it receives written notice from the
Administrative Committee to the contrary. The Trustee shall
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conclusively presume that each Qualified Investment Manager, under its
investment management agreement, is entitled to act, in directing the investment
and reinvestment of the Investment Account for which it is responsible, in its
sole and independent discretion and without limitation. The Trustee shall have
no responsibility with respect to the formulation of or compliance with any
investment or diversification policies established with respect to any
Investment Account unless the Trustee or an affiliate of the Trustee is the
Qualified Investment Manager of the Investment Account.
Section 5.12. Indemnification of Trustee and Limitation of Trustee
Responsibility Regarding Qualified Investment Manager. The Trustee shall have no
liability or responsibility to the Employer or any Participant or Beneficiary of
the Trust for acting without question on the direction of, or for failure to
act in the absence of directions from, a Qualified Investment Manager for any
Investment Manager Account. The Trustee may assume that any Investment Manager
Account previously established and the appointment of any Qualified Investment
Manager for that account continues in force until receipt of written notice to
the contrary. Pending receipt of directions from the Qualified Investment
Manager, any cash received by the Trustee from time to time for any Investment
Manager Account may be retained by the Trustee, in its discretion, in cash,
without any liability for interest. In addition, the Employer agrees to
indemnify the Trustee for, and hold it harmless against, any liability or
expense in connection with or arising out of (a) any action taken or omitted or
any investment or disbursement of any part of the Trust Fund made by the Trustee
at the direction of the Qualified Investment Manager or any inaction with
respect to the Trust Fund in the absence of directions from the Qualified
Investment Manger, or (b) any action taken by the Trustee pursuant to a
notification of an order to purchase or sell securities issued by a Qualified
Investment Manager directly to a broker or dealer under a power of attorney.
Section 5.13. Further Indemnification of the Trustee; Contribution.
(a) The Sponsor shall indemnify and save harmless the Trustee, its
affiliates, and their officers and employees for and from any Liability
arising (i) out of any matter as to which the Trustee is directed, or this
Agreement provides that the Trustee is protected, not liable, or not
responsible, or as to which the Trustee has acted in accordance with this
Agreement and the Act, or
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(ii) by reason of any breach of any statutory or other duty owed to the Plan by
the Sponsor, the Administrative Committee, any Qualified Investment Manager or
any delegate of any of them, except to the extent the Trustee may otherwise be
considered liable under Section 405 (a) of the Act for that other person's
breach in the case where (i) the Trustee actively participated in or concealed
the other person's breach, or (ii) appropriate personnel of the Trustee knew of
the other person's breach and failed to notify the Administrative Committee of
such breach (except in the case where such breach is alleged to have been
committed by the Administrative Committee, in which case such notification must
have been to the Board).
(b) The Trustee, its affiliates, and their officers, agents and
employees may bring action against the Sponsor to contribute to the satisfaction
of any liability to the extent that the liability (i) is not subject to
indemnification under Subsection (a) and (ii) is caused by the culpable conduct
of the Sponsor, the Administrative Committee, or their respective agents.
(c) The foregoing rights of indemnification and contribution shall not
limit any rights or remedies that may be available to the Trustee under
Applicable Law.
ARTICLE VI
Accounting and Recordkeeping
Section 6.1. Accounting Records. The Administrative Committee and the
Trustee shall each maintain or cause to be maintained such accounting records as
they each may deem appropriate for purposes of carrying out their
responsibilities under the Trust.
Section 6.2. Separate Funds. The Trust Fund may be subdivided into
separate funds, in accordance with written directions of the Administrative
Committee.
Section 6.3. Valuation of Trust Fund.
(a) The Trustee shall value the Trust Fund as of the close of business
on the last day of each calendar quarter or such other date as may be agreed
between the Trustee and the Sponsor (such date hereafter referred to as the
"Valuation Date").
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(b) The Trustee shall determine the fair market value or fair value of
property held in the Trust Fund based upon one or more of the following:
information and financial publications of general circulation, statistical and
valuation services, records of security exchanges, appraisals by qualified
Persons, transactions and bona fide offers in assets of the type in question,
valuations provided by the Qualified Investment Manager, and other information
customarily used in the valuation of property. Units or shares in registered
investment companies, limited partnerships, limited liability companies, or
other funds (each a "Fund") shall be their net asset value or other unit or
share value as announced by the Fund or its operator. A Qualified Investment
Manager shall certify, at the request of the Trustee, the value of any property
held in any Investment Account managed by such Qualified Investment Manager, and
such certification shall be regarded as an Instruction with regard to such
valuation. The Trustee shall be entitled to rely upon such valuation for all
purposes under this Agreement.
(c) Valuations of property reasonably deemed by the Trustee to be
commodity interests or over-the-counter options or derivative instruments shall
be valued at their last prior sales prices on the principal board of trade or
the contracts market in which dealings are made or by quotations from the
contraparty bank or party. The Sponsor acknowledges that values of derivative
instruments are indicative values only based on market levels on the date, or
upon change in rates, so indicated. These valuations do not indicate the actual
terms at which derivatives could be liquidated or unwound or the calculation or
estimate of an amount that would be payable following the designation of an
early termination date under any applicable agreement. Valuations of derivatives
may be derived from proprietary models (including proprietary models developed
by the dealer from which a given derivative was purchased) based upon estimates
about relevant future market conditions. Valuations based on other models or
different assumptions may yield different results. The Trustee expressly
disclaims any responsibility for the accuracy of the models or estimates used in
deriving the valuations.
Section 6.4. Specific Accounts. At no time shall any segregated account
or separate fund be considered a savings account or investment or asset of any
particular Participant, Dependent or Beneficiary or group thereof, and no
Participant, Dependent or Beneficiary or group thereof shall have any right to
any particular asset which the Investment Committee or the Trustee may have
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allocated to any segregated account or separate fund for accounting purposes.
Section 6.5. Audit of Accounts. If required by the Act or other
applicable law or deemed appropriate by the Administrative Committee, the
Sponsor shall cause an audit of the Trust to be made at least once each year by
an independent qualified public accountant who shall be formally appointed by
and responsible only to the Sponsor. A copy of the accountant's audit report of
each such audit of the Trust shall be available at the office of the Sponsor
during all regular business hours for inspection. The Sponsor may make a
reasonable charge for the cost of duplication of such report. All accounts,
books and records of the Trustee shall be open for inspection and audit at all
reasonable times by any person designated by the Sponsor.
Section 6.6. Regulatory Reporting. The Sponsor shall have authority over
all reports and accountings which governmental regulatory bodies may require to
be filed, and it shall have ultimate responsibility for such filings. This shall
include, but not be limited to, all reports required by the Act. It shall be the
Administrative Committee's and Trustee's duty and responsibility to provide the
Sponsor with information within the scope of their respective duties which is
necessary to prepare such required reports and accountings.
Section 6.7. Retention of Records. The Trustee must maintain
correspondence or other files, including but not limited to, correspondence of
transmittal for checks, statements and account analyses, and correspondence
dealing with terminated or deceased participants for a period of six (6) years;
after which the Trustee must transfer such records to the Sponsor as shall be
agreed upon in writing signed by the Trustee and Sponsor. During this six-year
period, the Sponsor shall have the right to request that copies of any such
correspondence or files be delivered to it.
Section 6.8. Computerized Access to Trust Fund Records. The Sponsor, the
Administrative Committee, or a Qualified Investment Manager may request the
Trustee to provide them with on-line access to certain current records and
reports relating to the Trust Fund or certain Investment Accounts. If the
Trustee agrees to do so, the records and unaudited reports accessible on-line
will be unaudited and may not be accurate due to inaccurate pricing of property,
delays in updating the accounting records of the Trust Fund and other causes.
The Trustee will not be liable for any loss
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or damage arising out of the inaccuracy of any such records or unaudited reports
accessed on-line.
Section 6.9. Trust Accountings.
(a) Within sixty days after the close of each month and at more frequent
intervals if agreed to by the parties hereto, the Trustee shall render to the
Sponsor a written statement and account showing in reasonable summary the
investments, receipts, disbursements, and other transactions engaged in during
the preceding month or period, and setting forth the assets and liabilities of
the Trust. Within sixty days after the close of each fiscal year, and within
sixty days after the removal or resignation of the Trustee as provided
hereunder, the Trustee shall render to the Administrative Committee a similar
statement and account for that fiscal year. The Administrative Committee shall
promptly review each statement and account and advise the Trustee in writing of
any errors or omissions reflected therein. Unless the Administrative Committee
shall have filed with the Trustee written exceptions or objections to the annual
statement and account within the later of one hundred eighty (180) days after
receipt thereof or the filing of the Form 5500 Plan report for a Plan Year to
which the annual statement and account may relate, the Sponsor shall be deemed
to have approved such statement and account, and in such case or upon written
approval by the Administrative Committee of the annual statement and account,
the Trustee shall be released and discharged with respect to all matters and
things reflected in the annual statement and account to the full extent
permissible under Applicable Law as though it had been settled by a decree of a
court of competent jurisdiction in an action or proceeding in which the
Administrative Committee, the Sponsor, all other necessary parties and all
Persons having any beneficial interest in the Trust Fund were parties.
(b) Nothing contained in this Agreement or in the Plan shall deprive the
Trustee of the right to have a judicial settlement of its account at its own
expense. In any proceeding for a judicial settlement of the Trustee's accounts
or for instructions in connection with the Trust, the only necessary parties
thereto in addition to the Trustee shall be the Administrative Committee and the
Sponsor, and no Participant or other Person having or claiming any interest in
the Trust Fund shall be entitled to any notice or service of process (except as
required by Applicable Law). Any judgment, decision or award entered in any such
proceeding or action shall be conclusive upon all interested Persons.
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ARTICLE VII
Benefits
Section 7.1. Benefits in General. The Trust shall be applied to provide
Participants, Dependents or Beneficiaries with "life, sick, accident, or other
benefits," as that phrase is defined in Section 501(c)(9) of the Code. The Trust
shall provide such benefits directly or indirectly, such as by payment or
reimbursement to any other party, including the Employer, or make payments to
any third party, such as an insurance company, HMO, Taft-Hartley Trust,
governmental fund, trust or other account that provides such benefits pursuant
to or by reference to the Collective Bargaining Agreements or with respect to
persons who are or were covered by Collective Bargaining Agreements. For
purposes of directing payments from the Trust, the Employer shall have sole
responsibility for determining the life, sick, accident or other benefits that
are provided under or by reference to the Collective Bargaining Agreements or
with respect to persons who are or were covered by Collective Bargaining
Agreements. The Trustee shall have no responsibility or duty to interpret the
Collective Bargaining Agreements or otherwise determine the benefits payable
pursuant to or by reference to the Collective Bargaining Agreements.
Section 7.2. Particular Benefit Programs. The Employer may utilize the
Trust to provide payments with respect to different benefit programs which
provide different types or amounts of benefits to different groups of
Participants (or their Dependents or designated Beneficiaries); provided,
however, that such benefit programs shall not violate, either in design or
operation, Section 5.5 of this Agreement or Sections 501 (c) (9), 505 or 4976
of the Code. In addition, the Employer may utilize the Trust to provide payments
with respect to benefit plans or programs which provide benefits to employees
who have terminated participation; such programs may, for example, provide
benefits to (1) Employees who have gone on leave of absence or have terminated
employment by reason of disability, layoff or otherwise, (2) Dependents of
Employees; or (3) Dependents of deceased Employees. In the event a particular
benefit plan(s) or program(s) clearly provides, in writing, for benefits to
persons who are not Participants, those persons shall be provided with a benefit
only pursuant to the terms of and under that particular benefit plan(s) or
program(s).
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Section 7.3. Insurance Policies, Contracts and Providers. Nothing
contained in nor promulgated or applied under the authority of the Trust shall
be interpreted as relieving any insurer, health service provider, administrator,
Taft-Hartley Trust, governmental fund, trust, account or other obligor of its
obligation