Employment Agreement - Pittston Co. and David L. Marshall
As of June 1, 1997
Mr. David L. Marshall
20 Dolphin Point Lane
Hilton Head Island
South Carolina 29926
Dear David:
This will set forth the terms and conditions of your employment by The
Pittston Company (the "Company") from and after the date of this agreement.
1. Employment. The Company agrees to employ you, and you agree to serve
in the Company's employ, on and subject to the terms and conditions hereinafter
set forth, for the period commencing on the date of this agreement and ending on
May 31, 1999 (the "Employment Period"). This agreement shall replace all prior
and/or existing employment agreements between the Company and you, including,
without limitation, the Agreement dated as of September 1, 1992, the
Supplemental Agreement dated February 27, 1984, including any amendments or
modifications to such agreements, the Agreement dated as of June 1, 1994, the
Amendment to the June 1, 1994 Agreement dated as of September 16, 1994, the
letter agreement dated as of June 1, 1995 and a letter agreement dated as of
April 1, 1996 (together, the "Prior or Existing Agreements"). As of the
effective date of the Employment Period, all such Prior or Existing Agreements
shall terminate to the extent they have not already been terminated. It is
understood that your employment pursuant to the terms and conditions of this
Agreement shall continue notwithstanding your election as of June 1, 1997 to
retire, an Early Retirement Date under the Pittston Pension Plan, which election
you hereby confirm.
2. Duties. Subject to the further provisions of this Section 2, during
the Employment Period you will, as and to the extent hereinafter provided,
render services to the Company and, at its request, to one or more of its
affiliates ("Affiliates"). All such services will be rendered at the request of
and subject to the direction and control of the Chairman of the Board of the
Company. Such services may include, among other things, representation of the
Company and its Affiliates in the negotiation and completion of mergers and
acquisitions and the provision of advice to and consultation with members of
management of the Company and its Affiliates with respect to various matters. In
addition, you agree, if nominated and elected, to serve as a director of the
Company.
During the Employment Period you will use your best efforts to perform
faithfully and efficiently the responsibilities assigned to you hereunder,
except for temporary periods of illness or incapacity.
It is understood and agreed, with respect to the services to the
Company which you shall render pursuant to this Section 2, that
(i) the Chairman of the Board will, insofar as reasonably
practicable, consider your convenience in the timing of requests, and your
failure or inability, by reason of temporary illness or other cause beyond
your control, to respond to such requests during any such temporary period
shall not be deemed to constitute a default on your part in the performance
hereunder of such services; provided, however, that after June 1, 1997, the
number of hours that you will be required to devote to fulfilling your
obligations under this Agreement will be fewer than forty hours per calendar
month; and
(ii) except as and to the extent that the Chairman of the Board or his
designee may otherwise prescribe in writing, you shall not have any
authority to negotiate or conclude any contracts on behalf of, or otherwise
to bind, the Company or any of its Affiliates.
3. Compensation. (a) During the Employment Period you will receive for
all services to be rendered by you pursuant to Section 2 above a salary at the
rate of $50,000 per year, payable in equal installments no less frequently than
monthly.
(b) Eligibility for Certain Benefit Plans. In addition to your salary,
during the period ending May 31, 1997 you will be entitled to participate in the
Company's Pension-Retirement Plan, Savings-Investment Plan and all other
employee benefit plans in which you participate as of the day prior to the
Employment Period, in accordance with the terms and conditions of each such
plan. On and after June 1, 1997, you will
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participate in all employee benefit plans in which you will be eligible, but
only in accordance with the terms and conditions of each such plan, subject to
the provisions of Section 3(d) below. On and after June 1, 1997, the Company
will provide you with $300,000 of group term life insurance during the term of
this Agreement.
(c) Supplemental Retirement Benefit. You have been provided with a
Supplemental Retirement Benefit pursuant to which you shall be entitled to
receive a pension calculated in accordance with the provisions of the
Pension-Retirement Plan of The Pittston Company and Its Subsidiaries (the
"Pittston Pension Plan") (except that the limitations set forth in Section
13.01(a) thereof and in the second paragraph of Section 13.07 thereof shall be
disregarded) with full credit for determining your benefit accrual for the
period of your employment with Freeport-McMoRan Inc., the Company or any of
their respective Affiliates (as hereinafter defined) or predecessor companies.
The amount of such Supplemental Retirement Benefit will be offset by the
following:
-- the amount of any benefit payable to you in respect to the
Freeport-McMoRan Retirement Plan;
-- the amount of any benefit payable to you under the Pittston Pension
Plan and any other pension plan of the Company; and
-- the amount of any general offset specifically set forth in the Pittston
Pension Plan (it being understood and agreed that any such offset shall
be applied without duplication of any offset (whether in respect of the
Social Security taxable wage base or otherwise) taken into account in
calculating benefits under such Plan).
For purposes of determining the net Supplemental Retirement Benefit under this
Section 3(c), the Supplemental Retirement Benefit before offset and the amount
of the benefits which offset the Supplemental Retirement Benefit shall be
calculated on an actuarially equivalent basis (i.e., assuming the same frequency
of payments (e.g., monthly), the same commencement date for payments, and to the
extent feasible the same form of annuity (e.g., single life annuity)).
It is the intention of the parties that payments under this Section
3(c) shall be made to you (or your beneficiary) at such time and in such manner
as provided for under the Pittston Pension Plan and that the procedures, terms
and provisions of that Plan, generally, shall be applicable hereunder. The
obligation of the Company under this Section 3(c) to provide a pension and the
obligations of the Company under Section 4 below shall continue in effect
notwithstanding the termination (for any reason) of your employment with the
Company and its Affiliates.
As used in this Agreement, the term "affiliate" shall have the meaning
ascribed thereto 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 Agreement.
(d) Eligibility for Retiree Medical Benefits. In the event that your
employment shall terminate for any reason, or if you shall, at any time, elect
to retire on an Early Retirement Date under the Pittston Pension Plan, you shall
be deemed to be eligible for early retiree medical coverage under the Company's
Comprehensive Medical Expense Benefits Plan (the "Medical Plan"), anything in
this Agreement or the Medical Plan to the contrary notwithstanding. The
obligation of the Company under this Section 3(d) to provide such coverage shall
continue in effect notwithstanding the termination of your employment with the
Company and its Affiliates; provided, however, that nothing herein shall affect
in any way the Company's right to make future changes in the Medical Plan or to
terminate the Plan entirely; and provided, further, that any such change which
relates to your eligibility for such coverage under the Plan (including the
so-called "rule of 75") or which has the purpose or effect of discriminating
against you or your beneficiaries as to benefits under such Plan shall not
adversely affect such eligibility or benefits as applicable immediately prior to
such change.
(e) Business Expenses. During the Employment Period the Company shall,
in accordance with policies then in effect with respect to payments of expenses,
pay or reimburse you for all reasonable out-of-pocket travel and other expenses
(other than ordinary commuting expenses) incurred by you in performing services
hereunder. All such expenses shall be accounted for in such reasonable detail as
the Company may require.
4. Supplemental Retirement Benefits; Change in Control. The provisions
of this Section 4 shall be controlling, anything in the other provisions of this
Agreement to the contrary notwithstanding.
(a) In the event that a Change in Control (as hereinafter defined in
subparagraph (b) of this Section 4 shall occur or the Company's Board of
Directors shall in its discretion determine that a Change in Control is
anticipated within 90 days from the date of such determination, the Company
shall forthwith take such action as shall be necessary or appropriate to
activate the trust agreement dated as of September 16, 1994 between the Company
and The Chase Manhattan Bank (National Association), as trustee, by the payment
in cash to the trustee under such trust agreement of the aggregate amount which
A. Foster Higgins & Co. Inc. (or another nationally recognized firm of actuaries
selected by the Board) shall determine, on the basis of mortality and other
assumptions at the time applicable under the Pittston Pension Plan, to be
required to provide all projected benefit obligations to you (or your
beneficiary) under Section 3(c) of this Agreement, as of the date the Change in
Control
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occurs or as of the date of such determination, as the case may be. All expenses
and income and other taxes in connection with the establish ment and operation
of such trust shall be paid by the Company.
(b) For purposes of this Section 4, a Change in Control shall be deemed
to occur if either (i) 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
20% of the total voting power in the election of directors of the Company of
shares of all classes of Common Stock of the Company outstanding (exclusive of
shares held by any corporation of which shares representing at least 50% of the
ordinary voting power are owned, directly or indirectly by the Company) pursuant
to a tender offer, exchange offer or series of purchases or other acquisitions,
or any combination of those transactions, or (ii) there shall be a change in the
composition of the Company's Board of Directors at any time within two years
after any tender offer, exchange offer, merger, consolidation, share exchange,
sale of assets or contested election, or any combination of those transactions
(a "Transaction"), so that (i) the persons who were directors of the Company
immediately before the first such Transaction cease to constitute a majority of
the board of directors of the corporation which shall thereafter be in control
of the companies or other entities that were parties to or otherwise involved in
such first Transaction, or (ii) the number of persons who shall thereafter be
directors of such corporation shall be fewer than two-thirds of the number of
directors of the Company immediately prior to such first Transaction. A Change
in Control shall be deemed to take place upon the first to occur of the events
specified in the foregoing clauses (i) and (ii).
(c) In addition to all other rights under applicable law, you shall,
from and after the date on which a Change in Control shall occur or be
anticipated as provided in subparagraph (b) above, have the right to bring an
action to enforce the provisions of this Section 4 by seeking injunctive relief
and/or damages, and the Company shall be obligated to pay or reimburse you to
the extent that you prevail, in whole or in substantial part, for all reasonable
expenses, including attorney's fees, in connection with such action.
(d) The foregoing provisions of this Section 4 shall be construed
liberally to the end that accrued benefits under this Section 4 shall be assured
to the fullest extent practicable; provided, however, that nothing in this
Section 4 shall be construed in a manner that would subject you to current
taxation on establishment of the trust.
(e) Nothing in this Section 4 shall of itself be deemed to increase the
amount of any accrued benefits to which you shall have become entitled under
Section 3(c) of this Agreement. The establishment and activation of the trust
agreement referred to in subparagraph (a) of this Section 4 shall not be deemed
to relieve the Company of its obligations to you under such Section 3(c) except
pro tanto to the extent that amounts in respect thereof are paid under such
trust agreement to you.
5. Termination. (a) Death. This agreement shall terminate automatically
upon your death.
(b) Cause. The Company may terminate your employment for Cause. For
purposes of this agreement, "Cause" means (i) an act or acts of dishonesty or
disloyalty on your part which are intended to result in your substantial
personal enrichment at the expense of the Company or any of its Affiliates or to
adversely affect the business of any of them or (ii) a violation or violations
by you of your obligations under Section 8 or Section 9 other than any
insubstantial and inadvertent violation remedied by you promptly after receipt
of notice thereof given by the Company.
6. Obligations of the Company upon Termination.
(a) Death. If your employment is terminated by reason of your death,
this agreement shall terminate without further obligations to your legal
representatives under this agreement other than those obligations accrued
hereunder at the date of your death.
(b) Cause. If your employment is terminated for Cause, the Company
shall pay you your full salary through the date of such termination at the rate
in effect at such date., and the Company shall have no further obligations to
you under Sections 3(a), (b) or (e) of this agreement; provided, however, that
the Company's obligations under Sections 3(c) and (d) shall continue
notwithstanding termination under either Section 6(a) or (b).
7. Full Settlement. Subject to full compliance by the Company with all
of its obligations under this agreement, this agreement shall be deemed to
constitute the settlement of such claims as you might otherwise be entitled to
assert against the Company by reason of the termination of your employment for
any reason during or after the Employment Period, including, without limitation,
all claims for discrimination on the basis of age, sex or race or for any other
alleged violation of public policy arising out of such termination. The Company
agrees to pay, to the fullest extent permitted by law, all expenses (including,
without limitation, counsel fees) which you may reasonably incur as a result of
your successful contest, by judicial proceedings or otherwise, of the validity
or enforceability of, or liability under, any provision of this agreement. The
parties acknowledge and agree that the foregoing constitutes a complete release
of all such claims.
8. Covenant Not to Compete. You agree that during the Employment Period
and during the period ending two years thereafter (the
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"Non-Compete Period"), you shall not compete with any business then conducted by
the Company or any Affiliate (the "Business"). For purposes of this Agreement,
the term "compete" shall mean engaging in a business as a more than ten percent
(10%) stockholder, an officer, a director, an employee, a partner, an agent, a
consultant, or any other individual or representative capacity if it involves:
(i) engaging in the Business in competition with the Company or an
Affiliate within the Pittston Services Group in any state of the United
States in which the Company or any of such Affiliates (which shall mean for
purposes of this Section 8 any such Affiliate in which the Company owns,
directly or indirectly, an equity interest of twenty percent (20%) or more)
operates at anytime during the Non-Compete Period; or
(ii) rendering services or advice pertaining to the Business to or on
behalf of any person, firm or corporation which is in competition with the
Company or any Affiliate within the Pittston Services Group at any time
during the Non-Compete Period in any state of the United States.
In the event the restrictions against engaging in a competitive
activity contained in this Section 8 shall be determined by any court of
competent jurisdiction to be unenforceable by reason of its extending for too
great a period of time or over too great a geographic area or by reason of its
being too extensive in any other respect, it shall be interpreted to extend only
over the maximum period of time for which it may be enforceable, and over the
maximum geographic area as to which it may be enforceable and to the maximum
extent in all other respects as to which it may be enforceable, all as
determined by such court in such action.
Clauses (i) and (ii), above, are intended by the Company as separate
and divisible provisions, and if for any reason any one is held to be invalid or
unenforceable, neither the validity nor the enforceability of the other shall
thereby be affected.
9. Confidential Information. (a) You acknowledge that in the course of
your employment you may receive, have access to, or develop confidential or
proprietary information or trade secrets relating to the business of the Company
or its Affiliates. You will hold in a fiduciary capacity for the benefit of the
Company and such Affiliates all such confidential or proprietary information,
secrets, knowledge or data relating to their respective businesses, including,
without limitation, information relating to strategic plans, public and
shareholder relations, marketing, pricing, purchasing of transportation (ground
or air) arrangements, plans or programs, computer programs, communication
systems, cost data, or customer lists, obtained by you prior to, during or after
the Employment Period, and you will not, during the Employment Period or
thereafter, communicate or divulge any such information, secrets, knowledge or
data to any other person, firm or corporation without the prior written consent
of the Chairman of the Board of the Company. All records, files, drawings,
documents, notes, equipment and the like relating to the business or activities
of the Company or any of such Affiliates which you shall prepare or use or come
into contact with shall be and remain the sole property of the Company or such
Affiliates, as the case may be, and upon termination of your employment with the
Company all of such property shall be returned to the Company in accordance with
the directions given by it.
(b) Equitable Relief. You acknowledge that the foregoing provisions of
Sections 8 and 9 are essential to the Company and are reasonable and necessary
to protect the legitimate interests of the Company and its Affiliates and that
damages sustained by the breach of such provisions would cause irreparable harm
to the Company because of the special services that have been performed by you
and that recovery of damages at law would not be an adequate remedy. You further
agree that the Company and its Affiliates, in addition to any other remedy which
any of them may have under this agreement or at law, shall be entitled to
injunctive and other equitable relief to prevent to curtail any breach of any
such provision. If any provision of Sections 8 or 9 shall be deemed to be
invalid, illegal or unenforceable as written by reason of the extent or duration
thereof, or otherwise, the determining body or authority making such
determination shall be empowered to reduce such provision so as to be
enforceable to the greatest extent possible and, as so reduced, such provision
shall then be deemed to be rewritten and enforced as reduced.
(c) The provisions of this Section 9 shall survive the termination of
this agreement.
10. Successors. (a) This agreement is personal to you and without the
prior written consent of the Company shall not be assignable by you or otherwise
than by will or the laws of descent and distribution. This agreement shall inure
to the benefit of and be enforceable by your legal representatives.
(b) This agreement shall inure to the benefit of and be binding upon
the Company and its successors.
11. Governing Law. This agreement shall be governed by and construed in
accordance with the substantive and procedural law of New York without reference
to principles of conflict of laws. The parties hereto agree that any dispute
hereunder may be submitted to any court of competent jurisdiction in New York
and for purposes thereof each party hereto submits to such jurisdiction.
12. Miscellaneous. (a) This agreement contains the entire understanding
with you with respect to the subject matter hereof and
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supersedes any and all prior agreements or understandings, written or oral,
relating to such subject matter. This agreement may not be amended or modified
otherwise than by a written agreement executed by the parties hereto or their
respective successors and legal representatives. The captions of this agreement
are not part of the provisions hereof and shall have no force or effect.
(b) All notices and other communications hereunder shall be in writing
and shall be given by hand delivery to the other party or by registered or
certified mail, return receipt requested, postage prepared, addressed as
follows:
If to you:
20 Dolphin Point Lane
Hilton Head Island
South Carolina 29926
If to the Company:
1000 Virginia Center Parkway
P. O. Box 4229
Glen Allen, VA 23058-4229
Attention: Chairman of the Board
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notices and communications shall be deemed to be
given when mailed by certified or registered mail, return receipt requested.
(c) The invalidity or unenforceability of any provision of this
agreement shall not affect the validity or enforceability of any other provision
of this agreement.
(d) The Company may withhold from any amounts payable under this
agreement such federal, state or local taxes for which withholding is provided
pursuant to any applicable law or regulation.
Please confirm that the foregoing is in accordance with our agreement.
Very truly yours,
THE PITTSTON COMPANY
By___________________________
Chairman of the Board
I hereby confirm that the foregoing is in accordance with our
agreement.
_____________________________
David L. Marshall
Dated as of June 1, 1997
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