Exhibit 10(c)
EXECUTIVE AGREEMENT
dated as of August 7, 1998,
between The Pittston Company,
a Virginia corporation ("the Company"),
and Xxxxxx X. Xxxxxx (the "Executive").
The Company and the Executive agree as follows:
SECTION 1. Definitions. As used in this
Agreement:
(a) "Affiliate" has the meaning ascribed thereto
in Rule 12b-2 pursuant to the Securities Exchange Act of
1934, as amended (the "Act").
(b) "Board" means the Board of Directors of the
Company.
(c) "Cause" means (i) an act or acts of
dishonesty on the Executive's part which are intended to
result in the Executive's substantial personal enrichment at
the expense of the Company or (ii) repeated material
violations by the Executive of the Executive's obligations
under Section 3 or Section 11 which are demonstrably willful
and deliberate on the Executive's part and which have not
been cured by the Executive within a reasonable time after
written notice to the Executive specifying the nature of
such violations. Notwithstanding the foregoing, the
Executive shall not be deemed to have been terminated for
Cause without (1) reasonable notice to the Executive setting
forth the reasons for the Company's intention to terminate
for Cause, (2) an opportunity for the Executive, together
with his counsel, to be heard before the Board, and
(3) delivery to the Executive of a Notice of Termination, as
defined in Section 4(d) hereof, from the Board finding that
in the good faith opinion of three-quarters (3/4) of the
Board the Executive was guilty of conduct set forth above in
clause (i) or (ii) hereof, and specifying the particulars
thereof in detail.
(d) 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 all
classes 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 all
classes 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, lease, 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) if 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.
(e) "Good Reason" means:
(i) without the Executive's express written con-
sent and excluding for this purpose an isolated, insub-
stantial and inadvertent action not taken in bad faith
and which is remedied by the Company or its Affiliates
promptly after receipt of notice thereof given by the
Executive, (A) the assignment to the Executive of any
duties inconsistent in any respect with the Executive's
position (including status, offices, titles and
reporting requirements), authority, duties or
responsibilities as contemplated by Section 3(a)
hereof, (B) any other action by the Company or its
Affiliates which results in a diminution in such
position, authority, duties or responsibilities, or (C)
any failure by the Company to comply with any of the
provisions of Section 3(b) hereof;
(ii) without the Executive's express written con-
sent, the Company's requiring the Executive's work
location to be other than as set forth in
Section 3(a)(i);
(iii) any failure by the Company to comply with and
satisfy Section 10(a); or
(iv) any breach by the Company of any other
material provision of this Agreement.
(f) "Incapacity" means any physical or mental
illness or disability of the Executive which continues for a
period of six consecutive months or more and which at any
time after such six-month period the Board shall reasonably
determine renders the Executive incapable of performing his
or her duties during the remainder of the Employment Period.
(g) "Operative Date" means the date on which a
Change in Control shall have occurred.
SECTION 2. Employment Period. The Company hereby
agrees to continue the Executive in its employ, and the
Executive hereby agrees to remain in the employ of the
Company subject to the terms and conditions of this Agree-
ment, for the period commencing on the Operative Date and
ending on the third anniversary of such date (the "Employ-
ment Period").
SECTION 3. Terms of Employment. (a) Position
and Duties. (i) During the Employment Period: (A) the
Executive's position (including status, offices, titles and
reporting requirements), authority, duties and responsibil-
ities shall be at least commensurate in all material
respects with the most significant of those held, exercised
and assigned immediately prior to the Operative Date, and
(B) the Executive's services shall be performed at the loca-
tion at which the Executive was based on the Operative Date
and the Company shall not require the Executive to travel on
Company business to a substantially greater extent than
required immediately before the Operative Date, except for
travel and temporary assignments which are reasonably
required for the full discharge of the Executive's
responsibilities and which are consistent with the
Executive's being so based.
(ii) During the Employment Period, and excluding
any periods of vacation and sick leave to which the
Executive is entitled, the Executive agrees to devote
reasonable attention and time during normal business hours
to the business and affairs of the Company and, to the
extent necessary to discharge the responsibilities assigned
to the Executive hereunder, to use the Executive's reason-
able best efforts to perform faithfully and efficiently such
responsibilities. All such services as an employee or
officer will be subject to the direction and control of the
Chief Executive Officer of the Company or of an appropriate
senior official designated by such Chief Executive Officer.
(b) Compensation. (i) Salary and Bonus.
During the first year of the Executive's Employment Period
the Executive will receive compensation at an annual rate
equal to the sum of (A) a salary ("Annual Base Salary") not
less than the Executive's annualized salary in effect
immediately prior to the Operative Date, plus (B) a bonus
("Annual Bonus") not less than the aggregate amount of the
Executive's highest bonus award under the Key Employees
Incentive Plan or any substitute or successor plan for the
last three calendar years preceding the Operative Date.
During the Employment Period, on each anniversary of the
Operative Date the Executive's compensation in effect on
such anniversary date shall be increased for the remaining
Employment Period by not less than the higher of (A) 5% or
(B) 80% of the percentage change in the Consumer Price Index
(All Urban Consumers) for the twelve month period ended
immediately prior to the month in which such anniversary
date occurs.
(ii) Incentive, Savings and Retirement Plans.
During the Employment Period, the Executive will be entitled
to (A) continue to participate in all incentive, savings
and retirement plans and programs generally applicable to
full-time officers or employees of the Company, including,
without limitation, the Company's Pension-Retirement Plan,
Pension Equalization Plan, Savings-Investment Plan, Employee
Stock Purchase Plan and Key Employees Deferred Compensation
Program, or (B) participate in incentive, savings and
retirement plans and programs of a successor to the Company
which have benefits that are not less favorable to the
Executive.
(iii) Welfare Benefit Plans. During the
Employment Period, the Executive and/or the Executive's
family or beneficiary, as the case may be, shall be eligible
to (A) participate in and shall receive all benefits under
welfare benefit plans and programs generally applicable to
full-time officers or employees of the Company, including,
without limitation, medical, disability, group life,
accidental death and travel accident insurance plans and
programs, or (B) participate in welfare benefit plans and
programs of a successor to the Company which have benefits
that are not less favorable to the Executive.
(iv) Business Expenses. During the Employment
Period the Company shall, in accordance with policies then
in effect with respect to the payment of expenses, pay or
reimburse the Executive for all reasonable out-of-pocket
travel and other expenses (other than ordinary commuting
expenses) incurred by the Executive in performing services
hereunder. All such expenses shall be accounted for in such
reasonable detail as the Company may require.
(v) Vacations. The Executive shall be entitled
to periods of vacation not less than those to which the
Executive was entitled immediately prior to the Operative
Date.
SECTION 4. Termination of Employment.
(a) Death or Incapacity. The Executive's
employment shall terminate automatically upon the
Executive's death during the Employment Period. The
Executive's employment shall cease and terminate on the date
of determination by the Board that the Incapacity of the
Executive has occurred during the Employment Period
("Incapacity Effective Date").
(b) Cause. The Company may terminate the
Executive's employment for Cause, as defined herein, pursu-
ant to the Board passing a resolution that such Cause
exists.
(c) Good Reason. The Executive may terminate his
or her employment for Good Reason, as defined herein.
(d) Notice of Termination. Any termination by
the Company for Cause or Incapacity, or by the Executive for
Good Reason, shall be communicated by Notice of Termination
to the other party hereto given in accordance with
Section 12 of this Agreement. For purposes of this Agree-
ment, a "Notice of Termination" means a written notice which
(i) indicates the specific termination provision in this
Agreement relied upon, (ii) to the extent applicable, sets
forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the
Executive's employment under the provision so indicated,
(iii) in the case of termination by the Company for Cause or
for Incapacity, confirms that such termination is pursuant
to a resolution of the Board, and (iv) if the Date of
Termination (as defined below) is other than the date of
receipt of such notice, specifies the termination date
(which date shall be not more than 30 days after the giving
of such notice). The failure by the Executive or the
Company to set forth in the Notice of Termination any fact
or circumstance which contributes to a showing of Good
Reason, Incapacity or Cause shall not serve to waive any
right of the Executive or the Company, respectively, here-
under or preclude the Executive or the Company,
respectively, from asserting such fact or circumstance in
enforcing the Executive's or the Company's rights hereunder.
(e) Date of Termination. "Date of Termination"
means (i) if the Executive's employment is terminated by the
Company for Cause or by the Executive for Good Reason, the
date of receipt of the Notice of Termination or any later
date specified therein, as the case may be, (ii) if the
Executive's employment is terminated by the Company other
than for Cause or Incapacity, the Date of Termination shall
be the date on which the Company notifies the Executive of
such termination, and (iii) if the Executive's employment is
terminated by reason of death or Incapacity, the Date of
Termination shall be the date of death of the Executive or
the Incapacity Effective Date, as the case may be.
SECTION 5. Obligations of the Company Upon
Termination. (a) Termination for Good Reason or for
Reasons Other Than for Cause, Death or Incapacity. If,
during the Employment Period, the Company shall terminate
the Executive's employment other than for Cause or
Incapacity or the Executive shall terminate his or her
employment for Good Reason:
(i) the Company shall pay to the Executive in a
lump sum in cash within 30 days after the Date of
Termination the aggregate of the following amounts:
(A) the sum of (1) the Executive's currently
effective Annual Base Salary through the Date of
Termination to the extent not theretofore paid,
(2) the product of (x) the currently effective
Annual Bonus and (y) a fraction, the numerator of
which is the number of days in the current fiscal
year through the Date of Termination, and the
denominator of which is 365 and (3) any
compensation previously deferred by the Executive
(together with any accrued interest or earnings
thereon) and any accrued vacation pay, in each
case to the extent not theretofore paid (the sum
of the amounts described in clauses (1), (2), and
(3) shall be hereinafter referred to as the
"Accrued Obligations"); and
(B) the amount equal to the product of
(1) three and (2) the sum of (x) the Executive's
Annual Base Salary and (y) his or her Annual
Bonus;
(ii) in addition to the retirement benefits to
which the Executive is entitled under the Company's
Pension-Retirement Plan and Pension Equalization Plan
or any successor plans thereto (collectively, the
"Pension Plans"), the Company shall pay the Executive
the excess of (x) the retirement pension which the
Executive would have accrued under the terms of the
Pension Plans (without regard to any amendment to the
Pension Plans made subsequent to a Change in Control
and on or prior to the Date of Termination, which
amendment adversely affects in any manner the
computation of retirement benefits thereunder),
determined as if the Executive were fully vested
thereunder and had accumulated (after the Date of
Termination) thirty-six additional months of Benefit
Accrual Service credit (as such term is defined in the
Pension Plans) thereunder and treating the amounts paid
under clause (i)(B) of this Section 5(a) as
compensation paid during a thirty-six month period for
purposes of calculating Average Salary and benefits
under the Pension Plans, over (y) the retirement
pension which the Executive had then accrued pursuant
to the provisions of the Pension Plans, such pension
benefits to thereafter be paid and funded in accordance
with the terms of the Pension Plans and the Trust
Agreement dated as of September 16, 1994, by and
between the Company and The Chase Manhattan Bank
(N.A.), as Trustee;
(iii) for three years after the Executive's Date of
Termination, or such longer period as may be provided
by the terms of the appropriate plan, program, practice
or policy, the Company shall continue benefits to the
Executive and/or the Executive's family at least equal
to those which would have been provided to them in
accordance with benefit plans, programs, practices and
policies, including, without limitation, those
described in Section 3(b)(iii) of this Agreement if the
Executive's employment had not been terminated or, if
more favorable to the Executive, as in effect generally
at any time thereafter, provided, however, that if the
Executive becomes reemployed with another employer and
is eligible to receive medical benefits under another
employer-provided plan, the medical benefits shall be
secondary to those provided under such other plan
during such applicable period of eligibility and
further provided, however, that the rights of the
Executive and/or the Executive's family under
Section 4980B(f) of the Code shall commence at the end
of such three-year period;
(iv) the Company shall, at its sole expense as
incurred, provide the Executive with reasonable out-
placement services for a period of up to one year from
the Date of Termination, the provider of which shall be
selected by the Executive in his or her sole discre-
tion;
(v) the Company shall pay in cash, at the request
of the Executive, the spread between the option price
and market value with respect to all unexercised stock
options granted before the Date of Termination, whether
or not such options are exercisable on the date of such
request. Market value shall be deemed to be the last
closing price for the stock subject to such option on
the New York Stock Exchange on the Date of Termination
or, should the stock cease to be listed on such
Exchange prior to the Date of Termination, on the last
date on which such stock was traded; and
(vi) to the extent not theretofore paid or pro-
vided, the Company shall timely pay or provide to the
Executive any other amounts or benefits required to be
paid or provided or which the Executive is eligible to
receive under any plan, program, policy or practice or
contract or agreement of the Company and its
Affiliates, including earned but unpaid stock and
similar compensation (such other amounts and benefits
shall be hereinafter referred to as the "Other
Benefits").
(b) Death or Incapacity. If the Executive's
employment is terminated by reason of the Executive's death
or Incapacity during the Employment Period, this Agreement
shall terminate without further obligations to the
Executive's legal representatives under this Agreement,
other than for (i) timely payment of Accrued Obligations and
(ii) provision by the Company of death benefits or dis-
ability benefits for termination due to death or Incapacity,
respectively, in accordance with Section 3(b)(iii) as in
effect at the Operative Date or, if more favorable to the
Executive, at the Executive's Date of Termination.
(c) Cause; Other than for Good Reason. If the
Executive's employment shall be terminated for Cause during
the Employment Period, this Agreement shall terminate with-
out further obligations to the Executive other than timely
payment to the Executive of (x) the Executive's currently
effective Annual Base Salary through the Date of
Termination, (y) the amount of any compensation previously
deferred by the Executive and any and all amounts matched by
the Company or any of the Affiliates, including, without
limitation, all proceeds thereof and all amounts
attributable thereto, and (z) Other Benefits, in each case
to the extent theretofore unpaid. If the Executive
voluntarily terminates employment during the Employment
Period, excluding a termination for Good Reason, this
Agreement shall terminate without further obligations to the
Executive, other than for the timely payment of Accrued
Obligations and Other Benefits.
SECTION 6. Non-exclusivity of Rights. Nothing in
this Agreement shall prevent or limit the Executive's con-
tinuing or future participation in any plan, program, policy
or practice provided by the Company or any of its Affiliates
and for which the Executive may qualify, nor, subject to
Section 15(c), shall anything herein limit or otherwise
affect such rights as the Executive may have under any
contract or agreement with the Company or any of its
Affiliates. Amounts which are vested benefits or which the
Executive is otherwise entitled to receive under any plan,
policy, practice or program of or any contract or agreement
with the Company or any of its Affiliates at or subsequent
to the Date of Termination shall be payable in accordance
with such plan, policy, practice or program or contract or
agreement except as explicitly modified by this Agreement.
SECTION 7. No Mitigation. The Company agrees
that, if the Executive's employment is terminated during the
term of this Agreement for any reason, the Executive is not
required to seek other employment or to attempt in any way
to reduce any amounts payable to the Executive hereunder.
Further, except as provided in Section 5(a)(iii) hereof, the
amount of any payment or benefit provided hereunder shall
not be reduced by any compensation earned by the Executive
as the result of employment by another employer, by
retirement benefits, by offset against any amount claimed to
be owed by the Executive to the Company, or otherwise.
SECTION 8. 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 the Executive might other-
wise be entitled to assert against the Company by reason of
the termination of the Executive's employment for any reason
during the Employment Period. The Company's obligation to
make the payments provided for in this Agreement and other-
wise to perform its obligations hereunder shall not be
affected by any set-off, counterclaim, recoupment, defense
or other claim, right or action which the Company may have
against the Executive or others. In no event shall the
Executive be obligated to seek other employment or take any
other action by way of mitigation of the amounts payable to
the Executive under any of the provisions of this Agreement
and such amounts shall not be reduced, except as explicitly
provided in Section 5(a)(iii), whether or not the Executive
obtains other employment. The Company agrees to pay as
incurred, to the full extent permitted by law, all legal
fees and expenses which the Executive may reasonably incur
as a result of any contest (regardless of the outcome
thereof) by the Company, the Executive or others of the
validity or enforceability of, or liability under, any pro-
vision of this Agreement or any guarantee of performance
thereof.
SECTION 9. Certain Additional Payments by the
Company. Anything in this Agreement to the contrary
notwithstanding, in the event that it shall be determined
that any payment or distribution by the Company to or for
the benefit of the Executive (whether paid or payable or
distributed or distributable) pursuant to the terms of this
Agreement or otherwise (collectively, the "Payments") but
determined without regard to any additional payments
required under this Section 9, would be subject to the
excise tax imposed by Section 4999 of the Internal Revenue
Code of 1986, as amended, the Executive shall be entitled to
receive an additional payment (the "Gross-Up Payment") in an
amount equal to (i) the amount of the excise tax imposed on
the Executive in respect of the Payments (the "Excise Tax")
plus (ii) all federal, state and local income, employment
and excise taxes (including any interest or penalties
imposed with respect to such taxes) imposed on the Executive
in respect of the Gross-Up Payment, such that after payments
of all such taxes (including any applicable interest or
penalties) on the Gross-Up Payment, the Executive retains a
portion of the Gross-Up Payment equal to the Excise Tax.
SECTION 10. Successors; Binding Agreement.
(a) The Company will require any successor
(whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of
the business or assets of the Company, by agreement, in form
and substance satisfactory to the Executive, expressly to
assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be
required to perform if no such succession had taken place.
Failure of the Company to obtain such assumption and
agreement prior to the effectiveness of any such succession
will be a breach of this Agreement and entitle the Executive
to compensation from the Company in the same amount and on
the same terms as the Executive would be entitled to
hereunder had the Company terminated the Executive for
reason other than Cause or Incapacity on the succession
date. As used in this Agreement, "the Company" means the
Company as defined in the preamble to this Agreement and any
successor to its business or assets which executes and
delivers the agreement provided for in this Section 10 or
which otherwise becomes bound by all the terms and
provisions of this Agreement by operation of law or other-
wise.
(b) This Agreement shall be enforceable by the
Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees
and legatees.
SECTION 11. Non-assignability. This Agreement is
personal in nature and neither of the parties hereto shall,
without the consent of the other, assign or transfer this
Agreement or any rights or obligations hereunder, except as
provided in Section 10 hereof. Without limiting the fore-
going, the Executive's right to receive payments hereunder
shall not be assignable or transferable, whether by pledge,
creation of a security interest or otherwise, other than a
transfer by his or her will or by the laws of descent or
distribution, and, in the event of any attempted assignment
or transfer by the Executive contrary to this Section, the
Company shall have no liability to pay any amount so
attempted to be assigned or transferred.
SECTION 12. Notices. For the purpose of this
Agreement, notices and all other communications provided for
herein shall be in writing and shall be deemed to have been
duly given when delivered or mailed by United States regis-
tered or certified mail, return receipt requested, postage
prepaid, addressed as follows:
If to the Executive: Xx. Xxxxxx X. Xxxxxx
0000 Xxxxxxxxxx Xxxxx
Xxxxxxxxxxxx, XX 00000
If to the Company: The Pittston Company
0000 Xxxxxxxx Xxxxxx Xxxxxxx
X.X. Xxx 0000
Xxxx Xxxxx, XX 00000-0000
Attention of Corporate
Secretary
or to such other address as either party may have furnished
to the other in writing in accordance herewith, except that
notices of change of address shall be effective only upon
receipt.
SECTION 13. Operation of Agreement. (a) This
Agreement shall be effective immediately upon its execution
and continue to be effective so long as the Executive is
employed by the Company or any of its Affiliates. The
provisions of this Agreement do not take effect until the
Operative Date.
(b) Notwithstanding anything in Section 13(a) to
the contrary, this Agreement shall, unless extended by
written agreement of the parties hereto, terminate, without
further action by the parties hereto, on the tenth
anniversary of the date of this Agreement if a Change in
Control shall not have occurred prior to such tenth
anniversary date.
SECTION 14. Governing Law. The validity, inter-
pretation, construction and performance of this Agreement
shall be governed by the laws of the Commonwealth of
Virginia without reference to principles of conflict of
laws.
SECTION 15. Miscellaneous. (a) This Agreement
contains the entire understanding with the Executive with
respect to the subject matter hereof and supersedes any and
all prior agreements or understandings, written or oral,
relating to such subject matter. No provisions of this
Agreement may be modified, waived or discharged unless such
modification, waiver or discharge is agreed to in writing
signed by the Executive and the Company.
(b) The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement.
(c) Except as provided herein, this Agreement
shall not be construed to affect in any way any rights or
obligations in relation to the Executive's employment by the
Company or any of its Affiliates prior to the Operative Date
or subsequent to the end of the Employment Period.
(d) This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an origi-
nal but all of which together will constitute one and the
same Agreement.
(e) The Company may withhold from any benefits
payable under this Agreement all Federal, state, city or
other taxes as shall be required pursuant to any law or
governmental regulation or ruling.
(f) The captions of this Agreement are not part
of the provisions hereof and shall have no force or effect.
IN WITNESS WHEREOF, the parties have caused this
Agreement to be executed and delivered as of the day and
year first above set forth.
THE PITTSTON COMPANY,
By /s/ Xxxxxxx X. Xxx
Xxxxxxx X. Xxx
President and Chief
Executive Officer
/s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
