Retirement Plan for Non-Employee Directors - Pittston Co.
THE PITTSTON COMPANY
Retirement Plan for Non-Employee Directors
A resolution (the "1981 Resolution") adopted by
the Board of Directors (the "Board") of The Pittston Company
on March 31, 1981 provides for payments to certain Directors
upon their retirement from the Board after at least five
years of service and after attaining certain ages.
On November 3, 1989 the Board amended the 1981
Resolution by adopting this Retirement Plan for Non-Employee
Directors (the "Plan") which (a) incorporates the
substantive provisions of the 1981 resolution, (b) provides
for payments in case of retirement after a "Change in
Control" (as hereinafter defined) and (c) provides for
contractual arrangements between the Company and individual
Directors establishing their rights under the Plan.
The Board has determined to further amend the Plan
so as to provide additional assurance that benefits there-
under will be paid in the event of a "Change in Control" as
hereinafter defined.
Definitions.
1. As used herein:
"Pension Plan" means the Pension-Retirement
Plan of The Pittston Company and Its Subsidiaries.
"Non-Employee Director" means any Director of
the Company who does not participate in the Pension-
Retirement Plan of The Pittston Company and Its Sub-
sidiaries or in any other retirement plan for employees
of the Company or any of its subsidiaries.
A "Change in Control" shall be deemed to have
occurred if (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
outstanding (exclusive of shares held by any corpo-
ration 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 acqui-
sitions, or any combination of those transactions, or
(ii) there shall be change in the composition of the
Board 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 (A) 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
company which shall thereafter be in control of the
companies or other entities which were parties to or
otherwise involved in the first such Transaction, or
(B) the number of persons who shall be directors of
such company 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).
"Retirement" or "retires" means ceasing to be
a Director for any reason other than death or removal
for Cause.
"Cause" means an act of dishonesty
constituting a felony which results in substantial
personal enrichment at the expense of the Company.
2. Coverage. The Plan shall apply to each
person who was a Non-Employee Director on March 31, 1981 or
who became a Non-Employee Director at any time thereafter.
3. Benefits. Benefits shall be payable under
the Plan as hereinafter provided to each Non-Employee
Director who has five years of service as a Director of the
Company and who
(a) retires as a Director upon or after
attaining age 72; or
(b) retires prior to age 72 in anticipation
of attaining that age during what would otherwise
be such Non-Employee Director's next following
term of office as a Director; or
(c) retires as a Director prior to age 72
but after age 65 for reasons such as health,
relocation (whether residence or principal place
of business), or similar considerations; or
(d) retires as a Director at any time after
a Change in Control, regardless of age.
Benefits shall be payable during the lifetime of
each such Non-Employee Director at an annual rate equal to
the product obtained by multiplying the applicable
percentage (based on the number of full years of service)
specified below, by the amount of the annual retainer fee
(i.e., exclusive of attendance and other fees) payable at
the date of retirement or as of a date six months prior to a
Change in Control, whichever is greater:
Years of Percentage of
Service Annual Retainer Fee
5 50%
6 60%
7 70%
8 80%
9 90%
10 or more 100%
Such benefits shall be payable in advance in installments.
The first of such installments shall be paid on such Non-
Employee Director's date of retirement for the period ending
on the last day of the calendar quarter in which such date
falls, and each succeeding installment shall be paid on the
first day of the relevant calendar quarter. Notwithstanding
the foregoing, benefits payable to any Non-Employee Director
shall in no event commence prior to the date on which such
Director attains age 65.
The obligations of the Company under the Plan
shall not be funded in any manner for purposes of the
Internal Revenue Code or the Employee Retirement Income
Security Act of 1974. Actions taken in conformity with
Section 5 hereof shall not constitute funding for such
purposes.
4. Amendment and Termination. The Plan may at
any time be amended or terminated by the Board, provided
that no such amendment or termination of the Plan shall
adversely affect the benefits accrued or payable hereunder
on account of any present or former Non-Employee Director in
respect of service rendered prior to such amendment or
termination.
5. Change in Control. The provisions of this
Section 5 shall be controlling, anything in the other
provisions of the Plan to the contrary notwithstanding.
(a) In the event that a Change in Control
shall occur or the Board 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
Pension Plan, to be required to provide all projected
benefit obligations to Non-Employee Directors under the
Plan as of the date the Change in Control 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 establishment and operation of such trust
shall be paid by the Company.
(b) In addition to all other rights under
applicable law, any individual who shall be a Non-
Employee Director at the date on which a Change in
Control shall occur or be anticipated as provided in
paragraph (b) above shall from and after that date have
the right to bring an action, either individually or on
behalf of all Non-Employee Directors, to enforce the
provisions of this Section 5 by seeking injunctive
relief and/or damages, and the Company shall be
obligated to pay or reimburse each such Non-Employee
Director who shall prevail, in whole or in substantial
part, for all reasonable expenses, including attorney's
fees, in connection with such action.
(c) The foregoing provisions of this Section
5 shall be construed liberally to the end that accrued
benefits under the Plan shall be assured to the fullest
extent practicable; provided, however, that nothing in
the Plan shall be construed in a manner that would
subject any Non-Employee Director to current taxation
on establishment of the trust.
(d) Nothing in this Section 5 shall of
itself be deemed to increase the amount of any accrued
benefits to which any Non-Employee Director shall have
become entitled under the Plan. The establishment and
activation of the trust agreement referred to in
paragraph (a) of this Section 5 shall not be deemed to
relieve the Company of its obligations under the Plan
to Non-Employee Directors except pro tanto to the
extent that amounts in respect thereof are paid under
such trust agreement to such Non-Employee Directors.
6. Agreements with Non-Employee Directors. The
Company shall enter into an agreement with each of its Non-
Employee Directors incorporating the provisions of the Plan
and containing such other provisions, consistent with the
Plan, as may be mutually acceptable.
7. Successors. The Plan shall inure to the
benefit of and be binding upon the Company and its succes
sors (including, without limitation, each person or group
referred to in the definition of Change in Control and each
affiliate of such person or group). Each such successor
shall be obligated to enter into an agreement in form and
substance satisfactory to each Non-Employee Director by
which such successor shall expressly assume and agree to
perform this agreement in the same manner and to the same
extent as the Company would be required to perform if no
succession had taken place. The Company shall cause each
such successor to comply with its obligation to enter into
such agreement.
8. Governing Law. The Plan and all actions
taken hereunder shall be governed by and construed in
accordance with the laws of the Commonwealth of Virginia.
As amended September 16, 1994