SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ____________ to _______________
Commission file number 1-9148
1994 EMPLOYEE STOCK PURCHASE PLAN OF THE PITTSTON COMPANY
(Full title of the Plan)
THE PITTSTON COMPANY
(Name of the issuer of securities held pursuant to the Plan)
P.O. BOX 4229,
1000 VIRGINIA CENTER PKWY.,
RICHMOND, VIRGINIA 23058-4229
(Address of issuer's principal (Zip Code)
executive offices)
Independent Auditors' Report
The Participants of the 1994 Employee Stock
Purchase Plan of The Pittston Company:
We have audited the accompanying statements of financial condition of the 1994
Employee Stock Purchase Plan of The Pittston Company (the "Plan") as of December
31, 1996 and 1995, and the related statements of income and changes in plan
equity for the years ended December 31, 1996 and 1995 and the six month period
ended December 31, 1994. These financial statements are the responsibility of
the Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial condition of the Plan as of December 31,
1996 and 1995, and the income and changes in plan equity for the years ended
December 31, 1996 and 1995 and the six month period ended December 31, 1994, in
conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
Stamford, Connecticut
April 18, 1997
1994 EMPLOYEE STOCK PURCHASE PLAN OF THE PITTSTON COMPANY
STATEMENT OF FINANCIAL CONDITION
December 31, 1996
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Pittston Pittston Pittston
Brink's Group Burlington Group Minerals Group
Common Stock Common Stock Common Stock Total
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Assets:
Cash $ 1,951 751 1,942 4,644
Common stock, at
market value (Note 2) 2,033,505 886,100 847,378 3,766,983
Contributions receivable
from The Pittston Company 472,567 265,760 167,275 905,602
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Total assets $ 2,508,023 1,152,611 1,016,595 4,677,229
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Liabilities and Plan Equity:
Payable to plan participants $ 160,921 73,500 88,639 323,060
Plan equity 2,347,102 1,079,111 927,956 4,354,169
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Total liabilities and plan equity $ 2,508,023 1,152,611 1,016,595 4,677,229
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See accompanying notes to financial statements.
1994 EMPLOYEE STOCK PURCHASE PLAN OF THE PITTSTON COMPANY
STATEMENT OF FINANCIAL CONDITION
December 31, 1995
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Pittston Pittston
Services Group Minerals Group
Common Stock Common Stock Total
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Assets:
Cash $ 2,561 5,055 7,616
Common stock, at market value (Note 2) 1,541,422 418,095 1,959,517
Contributions receivable from
The Pittston Company 562,472 196,905 759,377
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Total assets $ 2,106,455 620,055 2,726,510
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Liabilities and Plan Equity:
Payable to plan participants $ 46,937 11,058 57,995
Plan equity 2,059,518 608,997 2,668,515
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Total liabilities and plan equity $ 2,106,455 620,055 2,726,510
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See accompanying notes to financial statements.
1994 EMPLOYEE STOCK PURCHASE PLAN OF THE PITTSTON COMPANY
STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY
Year Ended December 31, 1996
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Pittston Pittston Pittston Pittston
Services Group Brink's Group Burlington Group Minerals Group
Common Stock Common Stock Common Stock Common Stock Total
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Income:
Participant contributions -- 954,941 531,992 330,132 1,817,065
Dividend income -- 4,621 8,270 28,221 41,112
Unrealized appreciation
on common stock (Note 3) $ 12,282 449,708 142,412 189,400 793,802
Realized gain on distributions
(Note 4) -- 293,950 70,208 59,418 423,576
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$ 12,282 1,703,220 752,882 607,171 3,075,555
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Withdrawals and Other:
Distribution to Plan participants,
at market value -- 813,836 287,853 288,212 1,389,901
Effect of Brink's Stock Proposal
(Note 1) 2,071,800 (1,457,718) (614,082) -- --
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2,071,800 (643,882) (326,229) 288,212 1,389,901
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Increase (decrease) in Plan equity (2,059,518) 2,347,102 1,079,111 318,959 1,685,654
Plan equity--beginning of year 2,059,518 -- -- 608,997 2,668,515
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Plan equity--end of year $ -- 2,347,102 1,079,111 927,956 4,354,169
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See accompanying notes to financial statements.
1994 EMPLOYEE STOCK PURCHASE PLAN OF THE PITTSTON COMPANY
STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY
Year Ended December 31, 1995
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Pittston Pittston
Services Group Minerals Group
Common Stock Common Stock Total
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Income:
Participant contributions $1,154,431 374,180 1,528,611
Dividend income 7,887 14,131 22,018
Unrealized appreciation on
common stock (Note 3) 501,254 86,717 587,971
Realized gain (loss) on
distributions (Note 4) 39,618 (4,641) 34,977
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$1,703,190 470,387 2,173,577
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Withdrawals:
Distribution to Plan participants,
at market value 233,704 48,882 282,586
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233,704 48,882 282,586
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Increase in Plan equity 1,469,486 421,505 1,890,991
Plan equity--beginning of year 590,032 187,492 777,524
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Plan equity--end of year $2,059,518 608,997 2,668,515
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See accompanying notes to financial statements.
1994 EMPLOYEE STOCK PURCHASE PLAN OF THE PITTSTON COMPANY
STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY
Six Months Ended December 31, 1994
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Pittston Pittston
Services Group Minerals Group
Common Stock Common Stock Total
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Income:
Participant contributions $590,032 187,492 777,524
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$590,032 187,492 777,524
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Increase in Plan equity 590,032 187,492 777,524
Plan equity--beginning of period -- -- --
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Plan equity--end of year $590,032 187,492 777,524
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See accompanying notes to financial statements.
--
7
1994 EMPLOYEE STOCK PURCHASE PLAN OF THE PITTSTON COMPANY
NOTES TO FINANCIAL STATEMENTS
December 31, 1996 and 1995
1. SUMMARY OF PLAN:
The 1994 Employee Stock Purchase Plan of The Pittston Company (the "Plan") is
"an employee stock purchase plan" within the meaning of Section 423 of the
Internal Revenue Code of 1986 (the "Code"), as amended, covering all eligible
employees of The Pittston Company and its subsidiaries (the "Company"). The Plan
years begin on January 1 and end on December 31. The 1994 Plan year is for the
period beginning July 1, 1994 through December 31, 1994.
During 1995 and 1994, the Plan provided that participant contributions be used
to buy either Pittston Services Group Common Stock ("Services Stock") or
Pittston Minerals Group Common Stock ("Minerals Stock") or both. On January 18,
1996, the shareholders of the Company approved the Brink's Stock Proposal,
resulting in the modification, effective as of January 19, 1996, of the capital
structure of the Company to include an additional class of common stock. The
outstanding shares of Services Stock were redesignated as Brink's Group Common
Stock ("Brink's Stock") on a share-for-share basis, and a new class of common
stock, designated as Burlington Group Common Stock ("Burlington Stock"), was
distributed on the basis of one-half share of Burlington Stock for each share of
Services Stock held by shareholders of record on January 19, 1996. Accordingly,
on the effective date, 48,702 shares of Services Stock were converted to 48,702
shares of Brink's Stock and 24,351 shares of Burlington Stock and a fair value
for these shares of $1,457,718 and $614,082 was allocated from Services Stock to
Brink's Stock and Burlington Stock, respectively.
Upon approval of the Brink's Stock Proposal, the Plan was amended to provide
that participant contributions can be used to purchase Brink's Stock, Burlington
Stock, Minerals Stock, or a combination, as elected by the participant. For each
of the Plan years, the purchase price for each share of common stock to be
purchased under the Plan is the lesser of 85% of the Fair Market Value (as
defined) of such share on either (a) the first date of each six-month period
commencing on each July 1 or January 1 (the "Offering Date") or (b) the last day
of each six-month period from an Offering Date (the "Purchase Date"). The Fair
Market Value with respect to shares of any class of common stock is generally
defined as the average of the high and low quoted sales price of a share of such
stock on the applicable date as reported on the New York Stock Exchange
Composite Transaction Tape.
The maximum number of shares of common stock which may be issued or allocated
pursuant to the Plan is 750,000 shares of Brink's Stock, 375,000 shares of
Burlington Stock and 250,000 shares of Minerals Stock.
Eligibility
Generally, any employee of the Company or a designated subsidiary (a
"Subsidiary") (a) whose date of hire was at least six months prior to the
commencement of the six-month period from an Offering Date to and including the
next following Purchase Date (the "Offering Period") and (b) who is customarily
employed for at least 20 hours per week and at least five months in a calendar
year is eligible to participate in the Plan; provided, however, that in the case
of an employee who is covered by a collective bargaining agreement, he or she
shall not be considered an eligible employee unless and until the labor
organization representing such individual has accepted the Plan on behalf of the
employees in the collective bargaining unit. Any such employee shall continue to
be an eligible employee during an 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 a policy of the Company or a Subsidiary.
Contributions
Participants can elect to contribute any whole percentage from 1% up to and
including 10% of their annual base rate of pay, including commissions, but
generally excluding overtime or premium pay. A participant may reduce (but not
increase) the rate of payroll withholding during an Offering Period at any time
prior to the end of such Offering Period for which such reduction is to be
effective. Not more than one reduction may be made in any Offering Period unless
otherwise determined by nondiscriminatory rules. Each participant designates a
percentage in multiples of 10% of the amounts withheld during an Offering Period
that is to be used to purchase Brink's Stock, Burlington Stock or Minerals
Stock; provided, however, that 100% of the amount withheld is allocated between
the three classes of common stock. In the event a participant elects to reduce
the rate of payroll withholding during an Offering Period, such reduction shall
be applied ratably to the allocation of his or her withheld amounts among the
three classes of common stock. During an Offering Period, a participant may not
change the allocation of his or her withholdings for such Offering Period
although such allocation may be changed for any subsequent Offering Period. A
participant who elects to cease participation in the Plan may not resume
participation in the Plan until after the expiration of one full Offering Period
(following cessation of participation).
No participant shall have a right to purchase shares of any class of common
stock if (a) immediately after electing to purchase such shares, such
participant would own common stock possessing 5% or more of the total combined
voting power or value of all classes of stock of the Company or of any
Subsidiary, or (b) the rights of such participant to purchase common stock under
the Plan would accrue at a rate that exceeds $15,000 of Fair Market Value of
such common stock (determined at the time or times such rights are granted) for
each calendar year for which such rights are outstanding at any time.
Distribution
Should a participant elect to cease active participation in the Plan with
respect to any or all of the three classes of common stock at any time up to the
end of an Offering Period, all payroll deductions credited to such participant's
plan account and allocated to the purchase of the class of common stock with
respect to which the participant is ceasing participation shall be returned to
such participant in cash, without interest, as promptly as practicable.
In the event of the termination of a participant's employment for any reason,
including retirement or death, or the failure of a participant to remain
eligible under the terms of the Plan, all full shares of each class of common
stock then held for his or her benefit shall be registered in such individual's
name and an amount equal to the Fair Market Value (on the date of registration
of full shares of common stock in the name of the participant) of any fractional
share then held for the benefit of such participant shall be paid to such
individual, in cash, as soon as administratively practicable, and such
individual shall thereupon cease to own the right to any such fractional share.
Any amounts credited to such individual, prior to the last day of each six-month
Offering Period, shall be refunded, without interest, to such individual or, in
the event of his or her death, to his or her legal representative.
Termination
The Plan shall terminate on June 30, 1997, unless the shareholders shall
theretofore have approved an extension of such termination date. A proposed
amendment to the Plan has been submitted to the shareholders of the Company. If
approved, the amendment will extend the termination date to June 30, 2002.
The Board of Directors of The Pittston Company may, at any time and from time to
time, amend, modify or terminate the Plan, but no such amendment or modification
without the approval of the shareholders shall: (a) increase the maximum number
(determined as provided in the Plan) of shares of any class of common stock
which may be issued pursuant to the Plan; (b) permit the issuance of any shares
of any class of common stock at a purchase price less than that provided in the
Plan as approved by the shareholders; (c) extend the term of the Plan; or (d)
cause the Plan to fail to meet the requirements of an "employee stock purchase
plan" under the Code.
Basis of Accounting
The accompanying financial statements are prepared on the accrual basis of
accounting.
Income Taxes
The Plan and the rights of participants to make purchases thereunder, is
intended to qualify as an "employee stock purchase plan" under Section 423 of
the Code. The Plan is not qualified under Section 401(a) of the Code. Pursuant
to Section 423 of the Code, no income (other than dividends) will be taxable to
a participant until disposition of the shares purchased under the Plan. Upon the
disposition of the shares, the participant will generally be subject to tax and
the amount and character of the tax will depend upon the holding period.
Dividends received on shares held by the Plan on behalf of a participant are
taxable to the participant as ordinary income. Therefore, the Plan does not
provide for income taxes.
Administrative Costs
All administrative costs incurred by the Plan are paid by the Company.
2. INVESTMENTS:
At December 31, 1996, investments in the Plan consisted of 75,124 shares of
Brink's Stock with a total cost of $1,222,473, 43,575 shares of Burlington stock
with a total cost of $591,476 and 55,114 shares of Minerals Stock with a total
cost of $571,261.
At December 31, 1995, investments in the Plan consisted of 49,129 shares of
Services Stock with a total cost of $1,040,168 and 30,133 shares of Minerals
Stock with a total cost of $331,378.
At December 31, 1996 and 1995, the Plan had a total of 1,402 and 1,147
participants, respectively. The cost values of investments under the Plan are
calculated using an average cost methodology.
3. UNREALIZED APPRECIATION:
Changes in unrealized appreciation in common stocks of the Plan are as follows:
1996
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Pittston Services Pittston Brink's Pittston Burlington Pittston Minerals
Group Common Group Common Group Common Group Common
Stock Stock Stock Stock Total
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Unrealized appreciation:
Beginning of year $ 501,254 -- -- 86,717 587,971
Effect of Brink's Stock
Proposal (513,536) 361,324 152,212 -- --
End of year -- 811,032 294,624 276,117 1,381,773
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Change in unrealized
appreciation $ 12,282 449,708 142,412 189,400 793,802
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1995
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Pittston Services Pittston Minerals
Group Common Group Common
Stock Stock Total
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Unrealized appreciation:
Beginning of year -- -- --
End of year $ 501,254 86,717 587,971
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Change in unrealized appreciation $ 501,254 86,717 587,971
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4. REALIZED GAIN (LOSS) ON DISTRIBUTIONS:
The gain (loss) on distribution of common stock as a result of participant
withdrawals is as follows:
1996
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Pittston Brink's Pittston Burlington Pittston Minerals
Group Common Group Common Group Common
Stock Stock Stock Total
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Value of shares distributed:
Market value $ 699,852 214,353 210,631 1,124,836
Cost basis 405,902 144,145 151,213 701,260
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Gain on distribution
of shares to participants $ 293,950 70,208 59,418 423,576
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1995
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Pittston Services Pittston Minerals
Group Common Group Common
Stock Stock Total
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Value of shares distributed:
Market value $ 186,767 37,824 224,591
Cost basis 147,149 42,465 189,614
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Gain (loss) on distribution of shares to participants $ 39,618 (4,641) 34,977
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Participant withdrawals for the year ended December 31, 1996 consisted of 25,795
shares of Brink's Stock, 11,658 shares of Burlington Stock and 14,967 shares of
Minerals Stock.
Participant withdrawals for the year ended December 31, 1995 consisted of 6,840
shares of Services Stock and 3,401 shares of Minerals Stock.
5. SUBSEQUENT EVENT
In February 1997, the Plan purchased from The Pittston Company Employee Benefits
Trust, 20,835 shares of Brink's Stock at $22.69 per share, 15,684 shares of
Burlington Stock at $16.95 per share and 15,140 shares of Minerals Stock at
$11.05 per share for a total purchase price of $905,602 to satisfy contributions
made for the last six months of the plan year ended December 31, 1996.
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the trustee
(or other persons who administer the employee benefit plan) have duly caused
this annual report to be signed on its behalf by the undersigned hereunto duly
authorized.
1994 Employee Stock Purchase Plan
of The Pittston Company
(Name of Plan)
---------------------------------
Frank T. Lennon
---------------------------------
(Frank T. Lennon
Vice President - Human Resources
and Administration)
Date April 25, 1997
Consent of Independent Auditors
We consent to incorporation by reference in the registration statement (No.
33-53565) on Form S-8 of The Pittston Company of our report dated April 18,
1997, relating to the statements of financial condition of the 1994 Employee
Stock Purchase Plan of The Pittston Company as of December 31, 1996 and 1995,
and the related statements of income and changes in plan equity for the years
ended December 31, 1996 and 1995 and the six month period ended December 31,
1994, which report appears in the 1996 Annual Report on Form 11-K of the 1994
Employee Stock Purchase Plan of The Pittston Company.
KPMG Peat Marwick LLP
Stamford, Connecticut
April 18, 1997