Directors' Stock Accumulation Plan - Pittston Co.
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THE PITTSTON COMPANY DIRECTORS' STOCK ACCUMULATION PLAN
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As Amended and Restated
as of January 14, 2000
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TABLE OF CONTENTS
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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
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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
SCHEDULE A
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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.
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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
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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.
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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.
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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
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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.
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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
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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
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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
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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
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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
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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
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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
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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.
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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
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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.
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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.