<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
COMMISSION FILE NO. 1-2714
(Mark One)
( X ) Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended March 31, 1995
--------------
or
( ) Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from ______________________
to ______________________
ATLAS CORPORATION
-----------------------------------------------
(Exact name of registrant as specified
in its charter)
DELAWARE 13-5503312
- ------------------------------- -------------------
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
370 SEVENTEENTH STREET, SUITE 3150, DENVER, CO 80202
-----------------------------------------------------
(Address of principal executive offices)
(Zip Code)
(303) 825-1200
--------------------------------
(Registrant's telephone number)
(including area code)
Indicate by check mark whether the Company (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Company was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--- ---
As of May 10, 1995, 18,577,500 shares of Common Stock, par value $1 per share,
were issued and outstanding.
Page 1 of 41
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
--------------------
ATLAS CORPORATION AND ITS SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands)
(Unaudited)
<TABLE>
<CAPTION>
March 31, June 30,
1995 1994
---------- ---------
<S> <C> <C>
ASSETS
- --------------------------------------------
CURRENT ASSETS:
Cash and short-term investments $ 6,485 $ 3,767
Trade accounts and other receivables 137 970
Inventories (Note 5) 250 1,367
Prepaid expenses and other current assets 260 212
-------- --------
Total current assets 7,132 6,316
Property, plant and equipment 47,557 50,476
Less, accumulated depreciation,
depletion, amortization and impairment (44,652) (47,637)
-------- --------
2,905 2,839
Investment in unconsolidated
subsidiary (Note 12) 36,203 -
Other assets (Note 7) 9,433 10,692
-------- --------
$ 55,673 $ 19,847
======== ========
LIABILITIES
- -----------
CURRENT LIABILITIES:
Trade accounts payable $ 290 $ 2,109
Accrued liabilities (Note 7) 2,513 4,446
-------- --------
Total current liabilities 2,803 6,555
Convertible debenture (Note 8) 3,500 3,500
Other long-term liabilities (Note 7) 11,995 12,267
STOCKHOLDERS' EQUITY (DEFICIT)
- ------------------------------
Common stock 18,578 9,410
Capital in excess of par value 68,941 31,555
Retained deficit (49,875) (43,440)
Currency translation adjustment (Note 12) (268) -
-------- --------
Total stockholders' equity
(deficit) 37,375 (2,475)
-------- --------
$ 55,673 $ 19,847
======== ========
</TABLE>
See notes to consolidated financial statements.
Page 2 of 41
<PAGE>
ATLAS CORPORATION AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Data)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
March 31, March 31,
---------------------------- --------------------
1995 1994 1995 1994
------------- ------------- -------- ----------
<S> <C> <C> <C> <C>
Mining revenue $ - $ 3,252 $ 2,328 $17,423
Production costs - 5,177 3,031 17,920
Shutdown and standby costs - - 1,275 -
Exploration costs 324 313 1,429 1,586
General and administrative 567 644 1,939 2,479
------- ------- ------- -------
Loss from operations (891) (2,882) (5,346) (4,562)
------- ------- ------- -------
Interest income 155 108 491 235
Interest expense (94) (92) (312) (324)
Equity in loss of
unconsolidated
subsidiary (Note 12) (648) - (1,012) -
Forfeiture of deposit
(Note 11) - - (1,144) -
Other income 1 110 42 173
------- ------- ------- -------
Loss from continuing
operations (1,477) (2,756) (7,281) (4,478)
Income from discontinued
operations (Note 10) - 279 846 1,681
------- ------- ------- -------
Net loss $(1,477) $(2,477) $(6,435) $(2,797)
======= ======= ======= =======
PER SHARE OF COMMON STOCK
AND COMMON STOCK EQUIVALENTS:
Loss from continuing
operations $ (.08) $ (.30) $ (.46) $ (.57)
Income from discontinued
operations - .03 .05 .22
------- ------- ------- -------
Net loss $ (.08) $ (.27) $ (.41) $ (.35)
======= ======= ======= =======
Average number of common
and common equivalent
shares outstanding
during each period 18,574 9,031 15,873 7,901
======= ======= ======= =======
</TABLE>
See notes to consolidated financial statements.
Page 3 or 41
<PAGE>
ATLAS CORPORATION AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
March 31,
-------------------
1995 1994
--------- --------
<S> <C> <C>
OPERATING ACTIVITIES:
Net loss $ (6,435) $(2,797)
Gain from discontinued operations (846) (1,681)
Add (deduct) non-cash items:
Depreciation, depletion, amortization 386 4,061
Equity in loss of unconsolidated subsidiary 1,012 -
Shutdown and standby costs (net) 508 -
Forfeiture of deposit 525 -
Issuance of stock for 401k plan 90 -
Issuance of stock in lieu of interest payment 90 -
Net change in non-cash items related
to operations (Note 6) (952) (827)
-------- -------
Cash used in continuing operations (5,621) (1,244)
-------- -------
From discontinued operations:
Income from discontinued operations 846 1,681
Change in accounts receivables 875 (800)
Change in long-term liabilities - (102)
Change in estimated uranium reclamation costs (1,110) (433)
-------- -------
Cash provided by discontinued operations 611 346
-------- -------
Cash used in operating activities (5,011) (898)
-------- -------
INVESTING ACTIVITIES:
Additions to property, plant and equipment (496) (4,303)
Investment in unconsolidated subsidiary (35,640) -
Investment in common stock of mining company (3,000)
Proceeds from the sale of equipment 491 434
-------- -------
Cash used in investing activities (38,645) (3,869)
-------- -------
FINANCING ACTIVITIES:
Borrowings from short-term note 3,550 -
Repayment of short-term note (3,550) (3,524)
Proceeds from the issuance of common stock 50,054 12,421
Proceeds from the issuance of convertible debt - 3,500
Costs associated with the issuance of
debenture and stock (3,680) (1,300)
-------- -------
Cash provided by financing activities 46,374 11,097
-------- -------
Increase in cash and cash equivalents 2,718 6,330
CASH AND CASH EQUIVALENTS:
Beginning of period 3,767 1,734
-------- -------
End of period $ 6,485 $ 8,064
======== =======
</TABLE>
See notes to consolidated financial statements.
Page 4 of 41
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. On August 15, 1994, the Company acquired approximately 37.2% of the common
stock of Granges Inc. ("Granges"), a Canadian precious metals mining
company. Through an amalgamation of Granges and Hycroft Resources and
Development Corporation, effective May 1, 1995, the Company's ownership of
the amalgamated company became 27.7% (see Note 11). The Company follows the
equity method of accounting for investments in common stock of operating
companies 20% to 50% owned.
The Company follows the principles of Statement of Financial Accounting
Standards No. 52, "Foreign Currency Translation," using the U.S. dollars as
the functional currency for the operations of its unconsolidated Canadian
subsidiary. Accordingly, all assets and liabilities of the foreign
subsidiary are translated into U.S. dollars using the exchange rate
prevailing at the balance sheet date, while income and expense items are
translated at the weighted average exchange rate prevailing for the period.
Exchange gains and losses are deferred and shown as a currency translation
adjustment in shareholders' equity.
2. The financial information contained in this report reflects all adjustments
which are of a normal recurring nature that the Company considers necessary
for a fair presentation of the financial position and of the results of
operations for the periods indicated.
3. There would be no dilution of earnings per share as a result of the exercise
of outstanding warrants or stock options during the periods presented.
4. The Company regularly assesses its ability to recover the carrying value of
its assets and recognizes an impairment when it is determined that the
remaining unamortized costs cannot be recovered from undiscounted cash flows
over the remaining mine life.
5. Inventories consisted of the following:
<TABLE>
<CAPTION>
March 31, June 30,
1995 1994
--------- -----------
<S> <C> <C>
Raw materials $ - $ 360,000
Work in process - 593,000
Finished goods - 64,000
Other 250,000 350,000
-------- ----------
$250,000 $1,367,000
======== ==========
</TABLE>
6. The components of the net change in items other than cash related to
operating activities as reflected in the Consolidated Statements of Cash
Flows are as follows:
<TABLE>
<CAPTION>
Nine Months Ended
March 31,
--------------------------
Add (deduct) items other than cash: 1995 1994
------------ ------------
<S> <C> <C>
Trade accounts and other receivables $ (42,000) $ (6,000)
Inventories 754,000 383,000
Prepaid expenses and other current
assets (124,000) 367,000
Other assets 1,891,000 133,000
Trade accounts payable (1,819,000) (17,000)
Accrued liabilities (1,927,000) (1,224,000)
Other long-term liabilities 315,000 (463,000)
----------- -----------
$ (952,000) $ (827,000)
=========== ===========
</TABLE>
Page 5 of 41
<PAGE>
7. OTHER ASSETS CONSIST OF THE FOLLOWING:
<TABLE>
<CAPTION>
March 31, June 30,
1995 1994
----------- -----------
<S> <C> <C>
Restricted cash:
Collateral for a $6,500,000 letter
of credit (a) $ 3,763,000 $ 6,500,000
Collateral for Bureau of Land Management
reclamation bonds (b) 1,877,000 1,493,000
Deposit paid for Granges Inc. shares - 1,843,000
Deposit paid for Dakota Mining
Corporation shares (Note 11) - 525,000
Investment in Dakota Mining Corporation
shares (Note 11) 3,000,000 -
Other 793,000 331,000
----------- -----------
$ 9,433,000 $10,692,000
=========== ===========
</TABLE>
(a) Securing the performance of the Company's
uranium reclamation obligation.
(b) Securing the performance of the Company's Gold
Bar reclamation obligation.
ACCRUED LIABILITIES CONSISTED OF THE FOLLOWING:
<TABLE>
<CAPTION>
March 31, June 30,
1995 1994
----------- -----------
<S> <C> <C>
Accrued compensation $ 383,000 $ 596,000
Mine reclamation accrual 100,000 300,000
Reclamation and uranium shut down
cost, short-term 1,000,000 1,300,000
Accrued asbestos reclamation costs (Note 9) 655,000 1,400,000
Mine shutdown and standby costs 101,000 -
Other 274,000 850,000
----------- -----------
$ 2,513,000 $ 4,446,000
=========== ===========
</TABLE>
OTHER LIABILITIES, LONG-TERM CONSISTED OF THE FOLLOWING:
<TABLE>
<CAPTION>
March 31, June 30,
1995 1994
----------- -----------
<S> <C> <C>
Reclamation and uranium shut down
cost, long-term $ 5,089,000 $ 5,899,000
Pension and deferred compensation
arrangements 1,380,000 1,335,000
Mine reclamation accrual 3,252,000 3,100,000
Accrued postretirement benefit obligation 1,225,000 1,203,000
Other 1,049,000 730,000
----------- -----------
$11,995,000 $12,267,000
=========== ===========
</TABLE>
The Company believes that all accruals related to estimated shutdown
expenses, reclamation and litigation obligations are adequate, but are
subject to adjustment to reflect actual costs incurred.
8. On September 20, 1993, the Company, pursuant to a Securities Purchase
Agreement with Phoenix Financial Holdings, Inc., sold, an aggregate of
$8,375,000, (i) 1,500,000 shares of the Company's Common Stock, (ii) a
Redeemable Convertible Debenture due in 1998 of the Company in the principal
amount of $3,500,000, which is convertible as to principal into Common Stock
at the rate of $4.00 per share and bears interest at the rate of 9% per
annum payable in cash or Common Stock at the rate of $4.00 per share, and
(iii) Warrants to purchase for three years 2,000,000 shares of Common Stock
at $3.625 per share. As of May 10,
Page 6 of 41
<PAGE>
1995, to the best of the Company's knowledge and belief, Phoenix has
disposed of all its direct and indirect interests in the Company other than
1,150,000 of the Warrants to purchase Common Stock.
9. During fiscal year 1988, the United States Environmental Protection Agency
(the "EPA") notified the Company that it was one of several potentially
responsible parties ("PRPs") for cleanup costs incident to the presence of
asbestos and other materials ("Contaminants") at the Company's former
asbestos mine and mill site (the "Mine and Mill Site") near Coalinga,
California and in the City of Coalinga (the "City of Coalinga Site"). A
prolonged period of inquiry and administrative process concerning this
matter followed.
In fiscal years 1993 and 1991, the Company established a reserve of, and
recorded as an expense, $600,000 and $3,000,000, respectively, to cover the
Company's share of costs that may be incurred in connection with the
foregoing matters. This accrual reflects participation by the Bureau of Land
Management which has also been identified as a PRP with respect to the Mine
and Mill Site. In fiscal year 1992, the Company instituted legal action
against thirteen insurance carriers which had issued insurance policies over
a period of more than 25 years, with respect to the Mine and Mill Site and
the City of Coalinga Site. During the second, third and fourth quarters of
fiscal year 1994, the Company reached settlement with a number of the
carriers and recorded respectively, a gain from discontinued operations of
$1,300,000, $222,000 and $475,000. During May 1995, the Company settled with
the remaining insurance carriers. The proceeds were negligible. The Company
believes that the remaining reserve is adequate, but the reserve is still
subject to further adjustment to reflect the actual costs incurred. The
remedial action plan, which has been approved by the EPA, commenced October
1994 and is scheduled to be completed within the next six months.
10. The Company is obligated to decommission and reclaim its uranium mill site
located near Moab, Utah. Since the Company has discontinued its uranium
operations and permanently shut down its uranium mill and mines, estimated
shut-down expenses, including reclamation costs, of $17,406,000 were accrued
at June 30, 1987. The balance in this accrual at March 31, 1995 was
$6,089,000 and the reclamation plan extends over the next six to eight
years. Title X of "The Comprehensive National Energy Policy Act" ("Title
X"), which was enacted in October 1992, provides for the reimbursement of
past and future reclamation expenses related to uranium sites with tailings
generated by Atomic Energy Commission contracts. With respect to the
Company's discontinued uranium operations, 56% of the tailings were
generated under such contracts and the Company's liability for discontinued
uranium operations will be reduced by this Government cost sharing program.
The Company believes the accrual, when combined with anticipated
reimbursements of future reclamation costs under the Title X program, is
sufficient to cover future reclamation costs.
The Company has submitted a claim to the Department of Energy under Title X
of approximately $5 million for reclamation costs incurred from fiscal year
1987 through fiscal year 1994. If such claim is approved in full, the
Company would receive reimbursement of approximately $2.8 million. The
Company has received notification that the Department of Energy has given
interim approval on approximately $4.5 million of the claim and $2.5 million
in reimbursement. The Company is currently
Page 7 of 41
<PAGE>
providing supplemental information to the original claim in order to obtain
approval on the remaining $0.5 million in costs disallowed under the interim
approval. On December 29, 1994, the Company received $846,000 as a partial
payment of the approved interim reimbursement which was recorded as income
from discontinued operations. The timing on the repayment of the remaining
approved reimbursements can not be forecast as the annual funding to the
Title X program is a function of Congressional approval.
11. On August 15, 1994, the Company completed the purchase from M.I.M. (Canada)
Inc. ("M.I.M.") of 12,694,200 common shares of Granges which constituted
approximately 37.2% of the issued and outstanding shares of Granges. The
purchase price was Cdn. $4.00 per share, or an aggregate purchase price of
Cdn. $50,776,800.
Granges shares are traded on the Toronto Stock Exchange and the American
Stock Exchange. At December 31, 1994, Granges had a reported cash position
of approximately Cdn. $45 million, a large portfolio of exploration
properties and a 50.5% ownership in Hycroft Resources and Development
Corporation ("Hycroft"), which operates the Crofoot/Lewis mine located in
Nevada.
Effective May 1, 1995, Granges amalgamated with Hycroft, with the resultant
amalgamated company being named Granges Inc. The terms of the amalgamation
called for each common share of Hycroft to be exchanged for 0.88 of a common
share of "new" Granges Inc. and for each common share of Granges outstanding
prior to the amalgamation, to be exchanged for one common share of "new"
Granges Inc. After giving effect to the amalgamation, the Company continued
to hold 12,694,200 shares of "new" Granges Inc., representing 27.7% of the
outstanding common shares of Granges.
On February 24, 1995, the Company and Granges entered into an agreement
pursuant to which Atlas agreed to vote its shares in favor of the
amalgamation of Granges and Hycroft discussed above. Pursuant to such
agreement, the initial Board of Directors of "new" Granges Inc. was composed
of eleven members, including David Birkenshaw, the Chairman and Chief
Executive Officer of the Company, who was elected Vice-Chairman of the
Board; James Dunnett, a partner of Endeavor Financial Corporation, which
serves as a financial advisor to the Company; and John Walton, a partner and
Chairman of Endeavor Financial Corporation. Such agreement further provides
that, on October 1, 1995, the Board will be reduced to nine members
(including Messrs. Birkenshaw, Richings and Walton) and that on such date
Mr. Richings would be elected President and Chief Executive Officer of "new"
Granges Inc. subject to approval of the revised Board. See Note 13 below.
In addition, pursuant to the aforesaid agreement, the Company agreed to
cause its nominees on the Board of Directors of "new" Granges Inc. to vote
in favor of a shareholder rights plan to become effective immediately
following the amalgamation of Granges and Hycroft and to be made subject to
shareholder ratification at an extraordinary general meeting of "new"
Granges Inc. to be held on or before September 30, 1995, at which meeting
the Company will vote its shares in "new" Granges Inc. in favor of such
shareholder rights plan, subject to the plan containing a "grandfathering"
provision excluding the Company from the application of such shareholder
rights plan under the same terms and conditions as the "grandfathering"
provision set out in a draft shareholder' rights plan of Granges dated
December 1, 1993, which provided for the
Page 8 of 41
<PAGE>
"grandfathering" of M.I.M. from the application of the shareholder rights
plan as long as such shareholder's beneficial ownership of Granges' voting
shares did not exceed 40% of Granges' outstanding voting shares. Until
shareholder ratification of such rights plan, the Company may not increase
its position in "new" Granges Inc. to more than 40% without making an
offer on the same terms to all "new" Granges Inc. shareholders.
On May 31, 1994, the Company, Dakota Mining Corporation ("Dakota") and
VenturesTrident, L.P. and VenturesTrident II, L.P. (collectively, the
"VenturesTrident Partnerships") entered into an agreement in principle
providing for (i) the purchase of 1,500,000 common shares of Dakota (the
"VenturesTrident Shares") from the VenturesTrident Partnerships, for an
aggregate purchase price of $6,000,000 and, subject to the completion of the
purchase of the VenturesTrident Shares, (ii) the subscription by Atlas to
3,100,000 newly-to-be issued convertible preferred shares of Dakota.
In order to finance the above transactions, the Company conducted a private
placement of 9,090,909 Units of Atlas securities during the summer of 1994
for a purchase price of $5.50 per Unit, each Unit consisting of one share of
the Company's common stock and one-half of a warrant (exercisable for five
years) to purchase a share of the Company's common stock at an exercise
price of $7.00 per share. The first portion of such private placement,
consisting of the sale of 6,486,809 Units for an aggregate purchase price of
$35,677,450, was completed on August 15, 1994, and the proceeds thereof were
applied primarily to the payment of the Cdn. $48,237,960 balance of the
purchase price for the Granges Shares. In connection with closing the first
portion of the private placement, the Company entered into a $3.5 million
secured, short-term credit agreement with Gerald Metals, Inc. to cover,
among other things, certain expenses of the private placement. The Company
pledged to Gerald Metals, Inc. the Granges Shares as part of the security
for such loan.
On October 28, 1994, the Company determined that it was in the best
interests of its shareholders not to proceed with the Dakota acquisition and
forfeited its $1,000,000 in nonrefundable deposits to the VenturesTrident
Partnerships. Costs of $144,000 incurred in conjunction with the Dakota
transaction were also expensed.
The second portion of the private placement, consisting of the sale of an
additional 2,604,100 Units for an aggregate purchase price of $14,322,550,
was completed on December 15, 1994 following the approval at a Special
Meeting of the Shareholders of a proposal to increase the authorized share
capital of the Company. The Special Meeting was required due to the
Company, after completing the first portion of the offering, not having
sufficient authorized common stock to be issued and reserved for issuance in
connection with the second portion of the offering. Upon closing of the
second portion of the private placement, the Company used a portion of the
proceeds to repay the remaining balance of $800,000 due on the Gerald
Metals, Inc. short-term security agreement. Accordingly, Gerald Metals,
Inc. released all encumbrances and liens on the assets of the Company,
including the Granges Shares.
Of the Units sold in the aforesaid private placement, Mackenzie Financial
Corporation ("Mackenzie Financial") acquired 1,820,000 Units, consisting of
1,820,000 shares of Common Stock and 910,000 warrants to
Page 9 of 41
<PAGE>
purchase shares of Common Stock, and M.I.M. acquired 2,000,000 Units,
consisting of 2,000,000 shares of Common Stock and 1,000,000 warrants to
purchase shares of Common Stock. Since such date, Mackenzie Financial has
acquired an additional 591,000 shares of Common Stock. Following such
purchases, to the best of the Company's knowledge and belief, Mackenzie
Financial and M.I.M. have beneficial ownership of, respectively, 18.8% and
15.3% of the shares of Common Stock of the Company outstanding as of May 10,
1995.
On March 9, 1995, Atlas and Dakota entered into a Subscription Agreement,
under which Atlas purchased 2,419,355 Special Warrants of Dakota at a price
of $1.24 per Special Warrant. Each Special Warrant may be exercised,
without the payment of any additional consideration, into one Common Share
of the Dakota, and is automatically deemed exercised if not exercised by the
relevant expiry date set forth in the Subscription Agreement. Upon exercise,
the Company will hold less than 10% of the outstanding Common Stock of
Dakota.
In connection with consummating the aforesaid purchase by the Company of
Special Warrants, the Company and Dakota executed a mutual limited release,
whereby each party released the other from any liability, direct or
indirect, arising out of the May 31, 1994 agreement in principle related to
the purchase by the Company of certain securities of Dakota.
12. For the quarter ended September 30, 1994, the Company reported the results
of Granges under the equity method, on a current basis. Due to a difference
in fiscal year ends and the inability to obtain timely financial information
from Granges for its quarter ended December 31, 1994 and subsequent
quarters, the Company implemented a three month lag period in reporting the
results of operations of Granges for the quarter ended December 31, 1994.
As a result, the Company's equity in loss of unconsolidated subsidiary for
the three and nine month period ended March 31, 1995 and the foreign
currency translation adjustment, recorded in the Shareholder's Equity
section of the Balance Sheet as of March 31, 1995, reflects Granges' results
of operations and currency translation adjustments as of December 31, 1994
and for the six months then ended. A summarized Statement of Operations
(Unaudited, Canadian Dollars) of Granges for the three and six month periods
ended December 31, 1994 is presented below:
<TABLE>
<CAPTION>
Three Months Six Months
Ended Ended
Dec. 31, 1994 Dec. 31, 1994
-------------- --------------
<S> <C> <C>
Sales $13,867,000 $29,211,000
Cost of sales 10,719,000 22,588,000
Depreciation, depletion & amort. 2,209,000 4,100,000
----------- -----------
Gross margin 939,000 2,523,000
Net income (loss) $(1,593,000) $(2,741,000)
=========== ===========
</TABLE>
Under the equity method, the Company reported losses of $648,000 and
$1,012,000 for the three month period ended December 31, 1994 and the period
from August 15, 1994 (date of acquisition) to December 31, 1994,
respectively. The excess of cost of investment over the net assets acquired
was amortized on a unit of production (gold ounces) basis and is included in
the reported loss.
13. Atlas announced on May 15, 1995, that Michael B. Richings, the Company's
President and
Page 10 of 41
<PAGE>
Chief Operating Officer, will become the President and Chief Executive
Officer of Granges Inc., effective June 1, 1995. In connection with his
appointment, Mr. Richings will resign his executive positions with the
Company but will continue to serve on the Company's Board of Directors.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
-----------------------------------------------------------------------
OF OPERATIONS
-------------
Gold production during the nine months ended March 31, 1995 decreased to
7,520 ounces from 46,200 ounces produced during the nine months ended March
31, 1994, as a result of the temporary suspension of milling in September of
1994 and the processing of lower grade stockpiled material in the prior
months. Due to the suspension of milling, no gold was produced for the three
months ended March 31, 1995 compared to 8,500 ounces of gold production for
the three months ended March 31, 1994. Mining revenue reflected the
decrease in production by declining to $0 and $2,328,000 for the three and
nine months ended March 31, 1995 from $3,252,000 and $17,423,000 for the
three and nine months ended March 31, 1994. The net proceeds from the sale
of the in-process mill inventory during the second quarter of fiscal year
1995 (1,500 ounces) was recorded as a reduction of the shutdown and standby
costs of $1,275,000 recorded in the first quarter of fiscal year 1995.
Production costs of $5,177,000 and $17,920,000 for the three and nine
months ended March 31, 1994, decreased to $0 and $3,031,000 for the three
and nine months ended March 31, 1995. The decrease is a result of the
suspension of milling in late September 1994. Costs associated with placing
the Gold Bar Mine on temporary shutdown and standby through the end of the
fiscal year were estimated at $1,275,000 and were accrued in September 1994.
General and administrative costs for the three and nine months ended March
31, 1995, decreased $77,000 and $540,000, respectively, compared to the
comparable periods in fiscal year 1994. General and administrative costs
for the nine month period ended March 31, 1994 includes $490,000 in payments
to former officers that were made in satisfaction of employment agreements
and severance packages in September 1993 arising out of the change of
control discussed in Note 8 of Part 1 above.
The Company's revenue and income for the periods set forth above are not
necessarily indicative of the results in any future period due to the
suspension of both mining and milling at the Gold Bar Mine. Management is
continuing its ongoing economic evaluations and optimization studies and is
pursuing various financing arrangements in an effort to recommence mining
activities at the Gold Bar property.
Working capital was $4,329,000 at March 31, 1995 and $4,303,000 at March 31,
1994. The Company's current ratio is 2.54 to 1 at March 31, 1995, compared
to 2.90 at March 31, 1994. Management will utilize the $4.3 million in
working capital and the Company's equity investments to address the lack of
cashflow from current operations. The Company will address this problem by
pursuing: 1) business combination strategies with Granges Inc. (the Company
currently owns 27.7% of the outstanding stock), 2) alternatives for
resumption of mining at the Gold Bar Mine, 3) development of the Tucker Hill
perlite deposit and 4) acquisitions.
Page 11 of 41
<PAGE>
The Company's capital expenditures in the quarter ended March 31, 1995, were
$168,000 with the majority directed at the development of the Company's
Tucker Hill perlite property. Funds required for the further development of
the Gold Bar Mine and the Tucker Hill perlite property will, to the extent
possible, be obtained from current working capital, joint ventures, and
project borrowings.
The Company believes that it can meet the estimated reclamation and closing
costs of its uranium and gold mining operations from the aggregate of
$5,640,000 cash collateral for letters of credit and reclamation bonds
related to these costs, from the proceeds of reimbursements made under the
government cost sharing program discussed in Note 10 of the financial
statements, from current working capital, and from the sale of non-core
assets.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
-----------------
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
---------------------------------------------------
The Annual Meeting of Stockholders of the Company was held on February
17, 1995. At the meeting:
a. James D. Beatty and David P. Hall were nominated and elected to
hold office as Class I Directors for a term of three years.
Holders of 12,302,560 shares voting in favor of the nominations
while holders of 105,037 shares had authority withheld.
b. A proposal to ratify the selection by the Board of Directors of
Ernst & Young LLP as auditors for the fiscal year ending June
30, 1995 was adopted. Holders of 12,297,068 shares voted in
favor of the proposal, holders of 59,548 shares voted against
and holders of 50,225 shares abstained.
c. A proposal was adopted that recommended an amendment to the
Company's Long Term Incentive Plan (i) to increase by 850,000
the number of shares of the Common Stock of the Corporation
authorized for issuance under the Long Term Incentive Plan,
(ii) to allow non-employee directors of the Corporation to
receive awards of stock options under the Long Term Incentive
Plan and (iii) with regard to options granted on or after
January 6, 1995, to reduce the minimum period of time between
the award of an option and the date the option first becomes
exercisable from one year to six months. Holders of 11,761,850
shares voted in favor of the proposal, holders of 515,654
shares voted against and holders of 130,092 shares abstained.
ITEM 5. OTHER INFORMATION
-----------------
None
Page 12 of 41
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
a. Exhibits
10.1 Second Amendment dated as of August 15, 1994 to the Amended and
Restated Rights Agreement dated August 2, 1989 between the
Company and Chemical Bank, as successor by merger with
Manufacturers Hanover Trust Company.
10.2 The Company's Long Term Incentive Plan, as amended dated
February 17, 1995.
10.3 Employment Agreement made as of January 16, 1995 between the
Company and Michael B. Richings.
10.4 Employment Agreement made as of February 17, 1995 between the
Company and Richard E. Blubaugh.
b. Reports filed on Form 8-K
On January 11, 1995, a Form 8-K was filed reporting the appointment
of Michael B. Richings as President and Chief Operating Officer.
On January 17, 1995, a Form 8-K was filed reporting the
registration of common shares of the Company issued privately
during 1993 and 1994.
On March 6, 1995, a Form 8-K was filed reporting that the Company
had reached an agreement with Granges Inc. on terms under which it
would vote its shares in favor of a proposed amalgamation between
Granges Inc and Hycroft Resources and Development Corporation.
Page 13 of 41
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ATLAS CORPORATION
-----------------------------------
(Registrant)
Date May 12, 1995 /s/ JAMES R. JENSEN
------------ ----------------------------------
James R. Jensen
Controller/Chief Accounting Officer
Page 14 of 41
<PAGE>
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
Exhibit
Number Exhibit Page
- --------- ------------------------------------------------- ----
<S> <C> <C>
10.1 Second Amendment dated as of August 15, 1994 to 16
the Amended and Restated Rights Agreement dated
August 2, 1989 between the Company and Chemical
Bank, as successor by merger with Manufacturers
Hanover Trust Company.
10.2 The Company's Long Term Incentive Plan, 19
as amended, dated February 17, 1995.
10.3 Employment Agreement made as of January 16, 1995 30
between the Company and Michael B. Richings.
10.4 Employment Agreement made as of February 17, 1995 36
between the Company and Richard E. Blubaugh.
</TABLE>
Page 15 of 41
<PAGE>
Exhibit 10.1
SECOND AMENDMENT dated as of August 15, 1994 (this "Second Amendment")
to the Amended and Restated Rights Agreement dated as of August 2, 1989 between
Atlas Corporation, a Delaware corporation (the "Company") and Chemical Bank, a
New York banking corporation, as successor by merger to Manufacturers Hanover
Trust Company, as rights agent (the "Rights Agent").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, the Company and the Rights Agent are parties to the Amended
and Restated Rights Agreement dated as of August 2, 1989 (as the same may be
amended, supplemented or otherwise modified from time to time, the "Agreement");
WHEREAS, in a private placement (the "1994 Private Placement") the
Company is selling 9,090,909 "Units" of the Company, each Unit comprised of one
share of Common Stock and one-half of a warrant to purchase one share of Common
Stock, to certain investors, including Mackenzie and M.I.M. Holdings (in each
case as hereinafter defined); and
WHEREAS, the Company and the Rights Agent desire to amend the
Agreement as provided in this Second Amendment, effective concurrently with the
closing of the first tranche of the 1994 Private Placement on August 15, 1994.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the Company and the Rights Agent agree as follows:
1. Definitions. Capitalized terms defined in the Agreement shall
-----------
have their defined meanings when used herein unless otherwise defined herein.
2. Amendment.
---------
(a) Subsection 1(p) of the Agreement is amended by:
(i) deleting from subsection 1(p)(iii) the following:
"provided that if Phoenix at any time ceases to own beneficially, or
have the right to acquire beneficial ownership of, 15% or more of the
outstanding Common Stock, then in any such case Phoenix shall
thereupon immediately cease to be an Exempt Person";
(ii) deleting the period at the end of subsection 1(p)(iii) and
substituting therefor a semicolon; and
Page 16 of 41
<PAGE>
(iii) adding the following new subsections (iv) and (v):
"(iv) effective as of August 15, 1994, Mackenzie Financial
Corporation and its Affiliates and Associates (collectively
"Mackenzie"), provided that if Mackenzie at any time ceases to
own beneficially, or have the right to acquire beneficial
ownership of, 15% or more of the outstanding Common Stock, or
if Mackenzie acquires, or obtains the right to acquire,
beneficial ownership of more than 25% of the outstanding Common
Stock, then in each such case Mackenzie shall thereupon
immediately cease to be an Exempt Person; and (v) effective as
of August 15, 1994, M.I.M. Holdings Limited and its Affiliates
and Associates (collectively "M.I.M. Holdings"), provided that
if M.I.M. Holdings at any time ceases to own beneficially, or
have the right to acquire beneficial ownership of, 15% or more
of the outstanding Common Stock, or if M.I.M. Holdings
acquires, or obtains the right to acquire, beneficial ownership
of more than 25% of the outstanding Common Stock, then in each
such case M.I.M. Holdings shall thereupon immediately cease to
be an Exempt Person."
(b) Section 21 of the Agreement is amended by deleting the
sixth sentence thereof and substituting therefor the following sentence:
"Any successor Rights Agent, whether appointed by the Company
or by such a court, shall be (a) a corporation organized and
doing business under the laws of the United States or any State
thereof, in good standing, which is authorized under such laws
to exercise corporate trust or stock transfer powers and is
subject to supervision or examination by federal or state
authority and which has at the time of its appointment as
Rights Agent a combined capital and surplus of at least
$10,000,000 or (b) an Affiliate controlled by a corporation
described in clause (a) of this sentence."
3. Conditions Precedent. This Second Amendment shall
--------------------
Page 17 of 41
<PAGE>
become effective as of August 15, 1994.
4. Limited Effect. This Second Amendment shall not constitute an
--------------
amendment of or consent to any provision of the Agreement not expressly referred
to herein and shall not be construed as a waiver or consent to any action on the
part of the Company that would require a waiver or consent of the Rights Agent
except as expressly stated herein. Except as amended, modified or waived
herein, the Agreement shall continue to be, and shall remain, in full force and
effect in accordance with its terms.
5. Counterparts. This Second Amendment may be signed in any number
------------
of counterparts, each of which shall constitute a single agreement with the same
effect as if the signature thereto and hereto were upon the same instrument.
6. Governing Law. This Second Amendment shall be governed by, and
-------------
construed and interpreted in accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the Rights Agent and the Company have caused this
Second Amendment to be executed and delivered by their duly authorized officers
as of the date first written above.
CHEMICAL BANK, as Rights Agent
By:______________________________
Name:
Title:
ATLAS CORPORATION
By:______________________________
Name:
Title:
Page 18 of 41
<PAGE>
Exhibit 10.2
LONG TERM INCENTIVE PLAN
OF
ATLAS CORPORATION
SECTION 1 - PURPOSE AND TERM OF PLAN
- ------------------------------------
The Long Term Incentive Plan of Atlas Corporation is designed to attract and
retain the services of selected key employees of the Corporation and its
Subsidiaries who are in a position to make a material contribution to the
successful operation of the business of the Corporation and its Subsidiaries.
Awards under the Plan shall be made to selected key employees in the form of
Options, Restricted Stock, Restricted Stock Units and Stock Appreciation Rights.
The Plan is also intended to provide Options to Nonemployee Directors of the
Corporation. The Plan shall be effective August 2, 1989. No awards may be made
under the Plan after July 31, 1999.
SECTION 2 - DEFINITIONS
- -----------------------
For purposes of the Plan, the following terms shall have the indicated
meanings:
(a) "Board" means the Board of Directors of the Corporation.
(b) "Change of Control Event" means, with respect to any event occurring
on or after August 1, 1994, any one of the following: (i) Continuing Directors
no longer constitute at least two-thirds of the Directors constituting the
Board; (ii) any person or group (as defined in Rule 13d-5 under the Exchange
Act), together with its affiliates, other than Phoenix Financial Holdings Inc.,
Mackenzie Financial Corporation or M.I.M. Holdings Limited (in each case,
together with its affiliates), becomes the beneficial owner, directly or
indirectly, of 15% or more of the Corporation's then outstanding Common Stock or
the voting power of the Corporation's then outstanding securities entitled
generally to vote for the election of Directors, provided that the foregoing
circumstances shall not constitute a Change of Control Event if such beneficial
owner is the Corporation, any Subsidiary of the Corporation or any employee
benefit plan or employee stock plan of the Corporation or of any Subsidiary of
the Corporation, and provided further that, notwithstanding the foregoing, a
Change of Control Event shall be deemed to occur if Mackenzie Financial
Corporation, and its affiliates, or M.I.M. Holdings Limited, and its affiliates,
shall acquire 25% or more of the Corporation's then outstanding Common Stock or
the voting power of the Corporation's then outstanding securities entitled
generally to vote for the election of Directors; (iii) the approval by the
Corporation's stockholders of the merger or consolidation of the Corporation
with any other corporation, the sale of substantially all of the Corporation's
assets or the liquidation or dissolution of the Corporation, unless, in the case
of a merger or consolidation, the Continuing Directors in office immediately
prior to such merger or consolidation constitute at least two-thirds of the
directors constituting the board of directors of the surviving corporation of
such merger or consolidation and any parent (as defined in Rule 12b-2 under the
Exchange Act) of such corporation; or (iv) at
Page 19 of 41
<PAGE>
least two-thirds of the Continuing Directors in office immediately prior to any
other action taken or proposed to be taken by the Corporation's stockholders or
by the Board determines that such action constitutes, or that such proposed
action, if taken, would constitute, a change of control of the Corporation and
such action is taken.
(c) "Committee" means the Compensation Committee of the Board or such
other committee as may be designated by the Board.
(d) "Common Stock" means the Common Stock of the Corporation, par value $1
per share.
(e) "Continuing Director" means a person who either (i) was a Director on
August 1, 1994 or (ii) was designated before such person's initial election as a
Director as a Continuing Director by a majority of the Continuing Directors.
(f) "Corporation" means Atlas Corporation, a Delaware corporation.
(g) "Director" means a member of the Board.
(h) "Disability" means a physical or mental impairment sufficient to make
the individual eligible for benefits under the long term disability plan of the
Corporation as long as that impairment also constitutes a disability within the
meaning of Section 22(e)(3) of the Internal Revenue Code of 1986, as amended.
(i) "Disinterested Person" means an administrator of the Plan who at the
time he or she exercises discretion in administering the Plan is not eligible
and has not been eligible at any time within one year prior thereto for
selection as a person to whom stock may be allocated or to whom stock options or
stock appreciation rights may be granted pursuant to the Plan or any other plan
of the Company or any of its affiliates entitling the participants therein to
acquire stock, stock options or stock appreciation rights of the Company or any
affiliates, except for any plan under which the allocation of stock or grant of
stock options or stock appreciation rights is not subject to the discretion of
any person or persons.
(j) "Exchange Act" means the Securities Exchange Act of 1934, as amended.
(k) "Fair Market Value" of the Common Stock on a specified day, other than
for purposes of Section 6.10, means the closing price on that day as reported on
the New York Stock Exchange - Composite Tape or, if no sale of the Common Stock
shall have occurred on the New York Stock Exchange on that day, on the next
preceding day on which there was a sale. If the Common Stock is not traded on
the New York Stock Exchange, the Fair Market Value shall be the amount that is
reasonably determined by the Committee.
(l) "Nonemployee Director" means any Director who is not an employee of
the Corporation.
(m) "Option" means an Option to purchase Common Stock awarded to a
Participant as provided in Section 6.
(n) "Option Period" means the period from the date of the grant of an
Option to the date of its expiration as provided in Section 6.4.
(o) "Optionee" means a Participant or Nonemployee Director who has been
granted an Option under the Plan.
(p) "Participant" means a key employee of the Corporation or any of its
Subsidiaries who has been selected by the Committee to receive an award under
the Plan.
Page 20 of 41
<PAGE>
(q) "Plan" means the Long Term Incentive Plan of Atlas Corporation.
(r) "Restricted Period" means the period of up to 10 years specified by
the Committee pursuant to Sections 4.2 or 5.1.
(s) "Restricted Stock" means Common Stock awarded to a Participant subject
to restrictions as provided in Section 4 as long as those restrictions are in
effect.
(t) "Restricted Stock Unit" means the right awarded to a Participant to
receive a payment on or about the last day of a Restricted Period in the form of
cash or Common Stock as provided in Section 5.
(u) "Retirement" means normal or early retirement under the terms of a
pension plan of the Corporation or voluntary termination of employment, provided
that in each case the Corporation must have given its prior consent to treat the
person's termination of employment as a retirement.
(v) "Stock Appreciation Right" means a right awarded to a Participant as
provided in Section 6 to receive in the form of Common Stock or cash, as
specified by the Committee, an amount equal to the excess of the Fair Market
Value of a share of Common Stock on the day the right is exercised over the
price at which the Participant could exercise an Option to purchase that share.
(w) "Subsidiary" means any corporation or other legal entity, domestic or
foreign, more than 50% of the voting power of which is owned or controlled,
directly or indirectly, by the Corporation.
SECTION 3 - GENERAL PROVISIONS
- ------------------------------
3.1 The Committee in its sole discretion shall select those key employees
to whom awards are made under the Plan and, with regard to awards made to key
employees, shall specify the type of awards made, the number of Options, shares
of Restricted Stock, Restricted Stock Units, and Stock Appreciation Rights which
in each case are awarded, the Restricted Period or Option Period applicable to
the awards and any other conditions relating to the awards that are consistent
with the Plan and that the Committee deems appropriate. Participants shall be
selected from among the key employees of the Corporation and its Subsidiaries
who are in a position to have a material impact on the future results of
operations of the Corporation and its Subsidiaries. Participants may be
selected and awards may be made at any time during the period that awards may be
granted under the Plan. Participants do not have to be selected and awards do
not have to be made at the same time by the Committee. Any award made to a
Participant shall not obligate the Committee to make any subsequent awards to
that Participant.
3.2 Shares of Common Stock acquired under the Plan may be authorized and
unissued shares of Common Stock or authorized and issued shares of Common Stock
held in the Corporation's treasury. Subject to Section 10.7, the maximum
aggregate number of shares of Common Stock reserved for issuance under the Plan
shall not exceed 1,745,000. The number of shares of Common Stock available at
any time for awards under the Plan shall be determined in a manner which
reflects the number of shares of Common Stock then subject to outstanding awards
and the number of shares of Common Stock previously acquired under the Plan.
For purposes of such
Page 21 of 41
<PAGE>
determinations, (a) awards of Restricted Stock Units shall be treated as if they
are awards of that number of shares of Common Stock which equals the number of
such Restricted Stock Units, and (b) shares of Common Stock returned to the
Corporation as a result of the forfeiture of Restricted Stock and shares of
Common Stock attributable to Restricted Stock Units which are canceled or
forfeited or Options which are cancelled, expire or terminate, other than by
reason of the exercise of Stock Appreciation Rights, shall again be available
for awards under the Plan, and the same shall not be deemed an increase in the
number of shares reserved for issuance under the Plan.
SECTION 4 - RESTRICTED STOCK
- ----------------------------
4.1 An award of Restricted Stock to a Participant shall entitle the
Participant to receive, on the date or dates specified by the Committee, the
number of shares of Common Stock specified by the Committee in accordance with
the terms and conditions of this Section 4.
4.2 During the Restricted Period specified by the Committee, Restricted
Stock awarded to a Participant may not be sold, assigned, transferred, pledged
or otherwise encumbered, except as hereinafter provided. Except for those
restrictions, a Participant, as the owner of Restricted Stock, shall have all
the rights of a holder of Common Stock, including but not limited to the right,
subject to the provisions of Sections 10.7 and 10.9, to receive all dividends
paid on and the right to vote such Restricted Stock. Notwithstanding anything
to the contrary in the Plan, upon the occurrence of a Change of Control Event
the Restricted Period applicable to Restricted Stock shall end, and all
restrictions on Restricted Stock shall expire.
4.3 If a Participant holding Restricted Stock ceases to be an employee of
the Corporation or any of its Subsidiaries during the Restricted Period for any
reason other than death, Disability or Retirement, all Restricted Stock held by
that Participant which is still subject to the restrictions imposed by Section
4.2 shall be forfeited forthwith and returned to the Corporation upon such
cessation of employment.
4.4 If a Participant holding Restricted Stock ceases to be an employee of
the Corporation or any of its Subsidiaries during the Restricted Period by
reason of death, Disability or Retirement, Restricted Stock held by the
Participant shall become free of the restrictions set forth in Section 4.2 to
the extent determined by the Committee, and, pursuant to Section 4.7, the
Corporation shall deliver the Restricted Stock to the Participant or the
Participant's beneficiary, as the case may be, within 60 days. If the Committee
does not determine to free the Restricted Stock of such restrictions under those
circumstances, the Restricted Stock shall be forfeited and returned to the
Corporation.
4.5 Each Participant awarded Restricted Stock shall enter into an
agreement with the Corporation in a form specified by the Committee in which the
Participant agrees to the terms and conditions of the award and such other
matters as the Committee in its sole discretion shall specify.
4.6 Each certificate for Common Stock issued in connection with a
Restricted Stock award under the Plan shall be registered in
Page 22 of 41
<PAGE>
the name of the Participant to whom the Restricted Stock was awarded, deposited
by the Participant with the Corporation together with a stock power endorsed in
blank and bear the following, or a substantially similar, legend:
The transferability of this Certificate and the Common Stock
represented hereby is subject to the terms and conditions, including
forfeiture, contained in Section 4 of the Long Term Incentive Plan of
Atlas Corporation and an Agreement entered into between the registered
owner and Atlas Corporation. Copies of the Plan and Agreement are on
file in the executive office of Atlas Corporation, 370 17th Street,
Denver, Colorado 80202.
4.7 When the restrictions imposed by Section 4.2 and any related
restrictions on Restricted Stock have expired or have otherwise been satisfied,
the Corporation shall deliver to the Participant holding the Restricted Stock,
or the Participant's legal representative, beneficiary or heir, a certificate or
certificates, without the legend referred to in Section 4.6, for the number of
shares of Restricted Stock deposited with the Corporation by the Participant
pursuant to Section 4.6 with respect to which all restrictions have expired or
been satisfied. At that time, the Agreement referred to in Section 4.5 shall
terminate forthwith as to those shares.
SECTION 5 - RESTRICTED STOCK UNITS
- ----------------------------------
5.1 Subject to the provisions of this Section 5 and any other conditions
that the Committee shall prescribe, each Restricted Stock Unit awarded to a
Participant shall entitle the Participant to receive, on or about the last day
of the Restricted Period specified by the Committee, a payment in the form of
(a) one share of Common Stock or (b) cash in an amount equal to the Fair Market
Value of one share of Common Stock on the last day of the Restricted Period,
whichever shall be elected by the Participant in a notice of election delivered
to the Corporation prior to the last day of the Restricted Period, provided
that, if, as provided in Section 5.2, a Restricted Period ends because of a
Change of Control Event, the Participant shall be deemed to have elected to
receive such payment in cash.
5.2 During the Restricted Period applicable to Restricted Stock Units
awarded to a Participant, the Corporation shall pay to the Participant in cash,
at the same time that dividends are paid to holders of Common Stock, the
aggregate amount which the Participant would have received as dividends if the
Participant had held a number of shares of Common Stock equal to the number of
Restricted Stock Units credited to the Participant (hereinafter referred to as
"dividend equivalents"), provided that, within 30 days after the commencement of
the Restricted Period or prior to the beginning of any fiscal year of the
Corporation, the Participant may irrevocably elect, except as provided in the
next sentence, to defer payment of then unpaid dividend equivalents to the end
of the Restricted Period or, if earlier, the termination of
Page 23 of 41
<PAGE>
the Participant's employment with the Corporation or any of its Subsidiaries. An
election to defer payment of dividend equivalents which may become payable
during any fiscal year of the Corporation may be revoked at any time prior to
the beginning of that fiscal year. Except as set forth in Section 5.3, payments
so deferred shall be credited with interest at a rate determined periodically by
the Committee. Notwithstanding anything to the contrary in the Plan, the
Restricted Period shall end upon the occurrence of a Change of Control Event.
5.3 If a Participant ceases to be an employee of the Corporation or any of
its Subsidiaries during the Restricted Period for any reason other than death,
Disability or Retirement, all Restricted Stock Units previously awarded to the
Participant shall be forfeited and cease to be credited to the Participant upon
such termination of employment, and the Participant shall be paid any dividend
equivalents deferred pursuant to Section 5.2 without interest.
5.4 If a Participant ceases to be an employee of the Corporation or any of
its Subsidiaries during the Restricted Period by reason of death, Disability or
Retirement, within 60 days thereafter the Corporation shall pay, to the extent
determined by the Committee, to the Participant or the Participant's
beneficiary, as the case may be, with respect to each Restricted Stock Unit, one
share of Common Stock or an amount in cash equal to the Fair Market Value of one
share of Common Stock on the date the event described in this Section 5.4
occurred. Restricted Stock Units with respect to which no payment is made shall
be forfeited. Whether or not a payment is made with respect to Restricted Stock
Units, the Participant shall receive any dividend equivalents deferred pursuant
to Section 5.2 plus interest at a rate determined periodically by the Committee.
SECTION 6 - OPTIONS AND STOCK APPRECIATION RIGHTS
- -------------------------------------------------
6.1 Subject to the provisions of this Section 6, the Committee may grant
incentive and non-qualified Options and Stock Appreciation Rights to selected
key employees of the Corporation and its Subsidiaries. Each Option shall be
evidenced by a Stock Option Agreement between the Corporation and the Optionee
which contains the terms and conditions specified by this Section 6 and, with
regard to Options granted to key employees, such other terms and conditions as
the Committee in its sole discretion shall specify.
6.2 Each Stock Option Agreement shall state the number of shares of Common
Stock to which it pertains and whether such Option is intended to constitute an
incentive Option or a nonqualified Option. The maximum number of shares with
regard to which Options may be awarded under the Plan during any calendar year
to any Participant shall be 350,000 shares.
6.3 The exercise price per share of Common Stock with respect to each
Option shall not be less than 100% of the Fair Market Value of a share of Common
Stock on the day the Option is granted.
6.4 Options granted under the Plan shall expire no later than the day
preceding the tenth anniversary of the date the Option was granted. Except as
provided in the next sentence, (i) no Option granted before January 1, 1995
shall be exercisable within one year
Page 24 of 41
<PAGE>
after the date of grant, (ii) no Option granted on or after January 1, 1995
shall be exercisable within six (6) months after the date of grant and (iii)
except with regard to Options granted to a Nonemployee Director, which shall be
exercisable solely in accordance with Section 7, the Committee may prescribe the
date or dates thereafter upon which all or a portion of the Option becomes
exercisable. Notwithstanding anything to the contrary in the Plan, upon the
occurrence of a Change of Control Event, all outstanding Options which are not
then exercisable shall become exercisable in full immediately.
6.5 At the time any Option is exercised in whole or in part, the Optionee
or other person exercising the Option shall pay to the Corporation, in cash,
Common Stock or other property, including Restricted Stock, as acceptable to the
Corporation, the full exercise price of the shares purchased, and the purchased
shares shall be delivered to the Optionee promptly. No Optionee or his or her
legal representatives, legatees or distributee, as the case may be, shall be
deemed to be a holder of any shares upon the exercise of an Option until the
date of issuance of a stock certificate to the Optionee for those shares. The
proceeds from the sale of shares upon the exercise of Options shall be added to
the general funds of the Corporation and used for general corporate purposes.
6.6 If an Optionee other than a Nonemployee Director shall cease to be
employed by the Corporation or any of its Subsidiaries prior to the end of the
Option Period, other than by reason of the death, Disability or Retirement of
the Optionee, each Option then held by the Optionee shall remain exercisable, to
the extent that it was exercisable at the time of such cessation, for a period
of three months from the date of such cessation, but not later than the end of
the Option Period, and thereafter any such Option shall terminate. If an
Optionee other than a Nonemployee Director shall cease to be employed by the
Corporation or any of its Subsidiaries prior to the end of the Option Period by
reason of Retirement, each Option then held by the Optionee shall remain
exercisable, to the extent that it was exercisable at the time of Retirement,
for a period of five years from the date of Retirement, but not later than the
end of the Option Period, and thereafter any such Option shall terminate. If an
Optionee other than a Nonemployee Director shall cease to be employed by the
Corporation or any of its Subsidiaries prior to the end of the Option Period by
reason of death or Disability, each Option then held by the Optionee shall
remain exercisable, to the extent that it was exercisable at the time of
cessation of employment, for a period of one year from the date of cessation of
employment, but not later than the end of the Option Period, and thereafter any
such Option shall terminate. Notwithstanding the provisions of this Section
6.6, if an Optionee other than a Nonemployee Director is discharged for cause,
which shall mean participation in conduct during his or her association with the
Corporation consisting of fraud, felony, willful misconduct or commission of an
act which causes or may reasonably be expected to cause substantial damage to
the Corporation or any of its Subsidiaries, each Option then held by the
Optionee shall terminate forthwith.
6.7 If an Optionee ceases to serve as a Nonemployee Director for any
reason, he or she may exercise any of his or her Options,
Page 25 of 41
<PAGE>
but only within three months following the date that he or she ceases to serve
on the Board, to the extent any such Option is exercisable at the date of such
termination. To the extent that he or she does not exercise an exercisable
Option within such time, any such Option shall terminate.
6.8 The Committee may grant Stock Appreciation Rights to Optionees other
than Nonemployee Directors in tandem with Options, so that exercise of a Stock
Appreciation Right will have the effect of terminating the Option, or portion
thereof, to which it relates, and exercise of an Option, or portion thereof, to
which a Stock Appreciation Right relates will have the effect of terminating the
Stock Appreciation Right. Stock Appreciation Rights shall be exercisable in the
same installments and be subject to the same terms and conditions as the Options
to which they relate and to such other terms and conditions as the Committee in
its sole discretion shall specify.
6.9 The aggregate Fair Market Value, determined as of the date an Option
is granted, of the Common Stock with regard to which any Participant may be
awarded incentive Options which are first exercisable by the Participant during
any calendar year, under the Plan or any other stock option plan maintained by
the Corporation or its Subsidiaries, shall not exceed $100,000.
6.10 Each Option granted under the Plan shall have, to the extent
exercisable after giving effect to the last sentence of Section 6.4, a limited
right of surrender allowing the Optionee to surrender the Option within the 30-
day period following a Change of Control Event and to receive cash, in lieu of
exercising the Option, in the amount by which the highest fair market value of
the number of shares of Common Stock covered by the Option during the 60 days
preceding the date on which the Change of Control Event occurs exceeds the
exercise price for the shares of Common Stock covered by the Option. For this
purpose, the fair market value of a share of Common Stock means the closing
price of a share of Common Stock as reported on the New York Stock Exchange -
Composite Tape. If the Common Stock is not listed or admitted to trading on the
New York Stock Exchange, the fair market value of a share of Common Stock shall
be the closing price of a share of Common Stock on the principal national
securities exchange on which the Common Stock is listed or admitted to trading,
or, if the Common Stock is not listed or admitted to trading on any national
securities exchange, the last quoted sale price or, if not so quoted, the
average of the high bid and low asked prices in the over-the-counter market of
the Common Stock, as reported by the National Association of Securities Dealers,
Inc. Automated Quotations System ("NASDAQ") or such other system then in use,
or, if on any such date the Common Stock is not quoted by any such organization,
the average of the closing bid and asked prices of the Common Stock as furnished
by a professional market maker making a market in the Common Stock, as selected
by the Board. If on any such date no market maker is making a market in the
Common Stock, the fair market value of the Common Stock shall be determined in
good faith by the Continuing Directors.
SECTION 7 - NONEMPLOYEE DIRECTORS
- ---------------------------------
7.1 Notwithstanding the powers set forth in Section 3.1 or
Page 26 of 41
<PAGE>
any other provision of the Plan, the Committee shall have no power to determine
eligibility for grants of non-qualified Options or the number of shares of
Common stock for which non-qualified Options may be granted or the timing or
exercise price of non-qualified Options granted to any Nonemployee Director.
Grants of non-qualified Options to Nonemployee Directors shall be automatic as
set forth in Section 7.2.
7.2 All Nonemployee Directors who are Directors on January 6, 1995 or who
become Directors after such date, shall be granted automatically, as of January
6, 1995 or, if such person becomes a Director after January 6, 1995, as of the
date such person becomes a Director, a non-qualified Option to purchase 20,000
shares of Common Stock, at an exercise price per share of the Fair Market Value
per share on the date of grant, which Option shall vest in three cumulative
annual installments, as follows: 6,667 shares on the first anniversary of the
date of grant, 6,667 shares on the second anniversary of the date of grant and
6,666 shares on the third anniversary of the date of grant.
SECTION 8 - ADMINISTRATION
- --------------------------
8.1 The Plan shall be administered by the Committee, which shall be
composed of three or more Directors, appointed from time to time by the Board,
each of whom shall be a Disinterested Person within the meaning of Rule 16b-3 of
the Exchange Act and shall be an "outside director" as defined in the Treasury
regulations issued pursuant to Section 162(m) of the Internal Revenue Code of
1986, as amended (the "Code"). Any member of the Committee may resign at any
time, and the Board may remove any member of the Committee at any time and fill
any vacancy on the Committee.
8.2 Subject to the provisions of the Plan, the Committee shall have
exclusive power to select the key employees who shall be Participants and to
determine the amount of, or method of determining, the awards to be made to
Participants.
8.3 The Committee's interpretation of the Plan and of any award granted
under the Plan shall be final and binding on all Participants.
8.4 The Committee shall have the authority to establish, adopt or revise
such rules and regulations relating to the Plan as it deems necessary or
advisable for the administration of the Plan.
SECTION 9 - AMENDMENT OR TERMINATION
- ------------------------------------
9.1 The Board may amend any provision of the Plan and any agreement under
the Plan at any time, except as set forth in Section 9.3, provided that no
amendment may be made that would (a) increase the maximum number of shares of
Common Stock which may be acquired under the Plan, (b) extend the term during
which Options may be granted under the Plan or (c) reduce the exercise price per
share to less than the Fair Market Value of the Common Stock on the date an
Option was granted unless the amendment has been approved by the stockholders of
the Corporation as provided in Rule 16b-3(a) under the Exchange Act, if
continuation of the exemption granted by Rule 16b-3 under the Exchange Act
requires such approval. The Board shall also have the right to terminate the
Plan at any time. If the Plan is terminated, payment of dividend equivalents
which have been deferred shall be made in accordance with the provisions
Page 27 of 41
<PAGE>
of the Plan as in effect prior to its termination, including the provisions
relating to the authority of the Committee to administer and interpret the Plan.
Except with a Participant's consent, no amendment, suspension or termination
shall impair the rights of the Participant in any Options, Restricted Stock,
Restricted Stock Units or Stock Appreciation Rights awarded to the Participant
under the Plan.
9.2 The Committee may refrain from designating Participants and from
making any awards, but such shall not be deemed a termination of the Plan. No
employee or Nonemployee Director of the Corporation or any of its Subsidiaries
shall have any claim or right to be granted awards under the Plan.
9.3 The formula provisions set forth in Section 7 of the Plan governing
grants of non-qualified Options to Nonemployee Directors shall not be amended
more than once every twelve (12) months, other than to comport with changes to
the Code or the Employee Retirement Income Security Act of 1974, as amended.
SECTION 10 - MISCELLANEOUS
- --------------------------
10.1 The fact that a key employee of the Corporation or any of its
Subsidiaries or a Nonemployee Director has been designated a Participant shall
not confer on that employee or Nonemployee Director any right to be retained by
the Corporation or any of its Subsidiaries or to subsequent awards under the
Plan.
10.2 No award under the Plan shall be taken into account in determining a
Participant's compensation for purposes of any group life insurance or other
employee benefit or pension plan of the Corporation, including the Atlas
Corporation 1978 Retirement Plan and the Investment and Savings Plan for
Employees of Atlas Corporation.
10.3 The Plan shall not be deemed an exclusive method of providing
incentive compensation for the officers and employees of the Corporation and its
Subsidiaries, and it shall not preclude the Board from authorizing or approving
other forms of incentive compensation.
10.4 All expenses and costs in connection with the operation of the Plan
shall be borne by the Corporation.
10.5 Options, Restricted Stock, Restricted Stock Units and Stock
Appreciation Rights awarded under the Plan shall not be transferable by a
Participant other than by will or the laws of descent and distribution, and
Options and Stock Appreciation rights awarded under the Plan shall be
exercisable during an Optionee's lifetime only by the Optionee.
10.6 A Participant or a Nonemployee Director may appoint a beneficiary, on
a form supplied by the Committee, to receive Restricted Stock Unit payments and
to exercise Options and Stock Appreciation Rights, as the case may be, in the
event of the death of the Participant or Nonemployee Director and may change
that beneficiary at any time prior to the date of the death of the Participant
or Nonemployee Director.
10.7 In the event of any change in the outstanding shares of Common Stock
by reason of any stock dividend or split, recapitalization, merger,
consolidation, combination or exchange of shares or other similar corporate
change, the maximum aggregate number and class of shares in which awards may be
granted under the
Page 28 of 41
<PAGE>
Plan, the number of Restricted Stock Units outstanding and the number of shares
subject to outstanding Options and Stock Appreciation rights shall be
appropriately adjusted by the Committee, whose determination shall be
conclusive. Any shares of stock or other securities distributed to a Participant
with respect to a Restricted Stock shall be subject to the restrictions and
requirements imposed by Section 4, including depositing the certificates
therefor with the Corporation together with a stock power and bearing a legend
as provided in Section 4.6.
10.8 If the Corporation shall be consolidated or merged with another
corporation, each Participant who has received Restricted Stock that is still
subject to restrictions imposed by Section 4.2 may be required to deposit with
the successor corporation the certificates for the stock or securities or the
other property that the Participant is entitled to receive by reason of
ownership of Restricted Stock in a manner consistent with Section 4.6, and such
stock, securities or other property shall become subject to the restrictions and
requirements imposed by Section 4, and the certificates therefor or other
evidence thereof shall bear a legend similar in form and substance to the legend
set forth in Section 4.6.
10.9 The Corporation shall be entitled to withhold from any award payable
under the Plan the amount of taxes the Corporation deems necessary to satisfy
any applicable Federal, state and local income tax withholding obligations
arising from the payment of the award or to make other appropriate arrangements
with Participants to satisfy such obligations.
10.10 Notwithstanding anything to the contrary in the Plan, nothing in the
Plan shall be construed to prevent the transfer of funds to a grantor trust for
the purpose of paying benefits under the Plan.
(Text as amended through January 7, 1995)
IN WITNESS WHEREOF, the undersigned has caused the Plan to be adopted by
and on behalf of the Corporation on this ___ day of ____________, 1995.
Attest: ATLAS CORPORATION
________________________ By: ____________________________
Secretary Name:
Title:
Page 29 of 41
<PAGE>
Exhibit 10.3
EMPLOYMENT AGREEMENT
--------------------
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made as of January 16, 1995
between ATLAS CORPORATION, a Delaware corporation ("Employer"), and MICHAEL B.
RICHINGS, President and Chief Operating Officer of Employer ("Executive").
Employer and Executive agree as follows:
1. EMPLOYMENT. In accordance with the terms and conditions of this
----------
Agreement, Employer agrees to employ Executive as an officer of Employer
commencing January 16, 1995, and continuing until that employment is terminated
(a) by either Employer or Executive or (b) by reason of Executive's normal
retirement in accordance with Employer's retirement programs applicable to
Executive at the time of his retirement ("Executive's Retirement"). Executive
accepts that employment and agrees to perform the duties associated therewith.
Subject to the terms and conditions of this Agreement, Executive's employment by
Employer may be terminated at any time by either Executive or Employer by 10
days prior written notice to that effect.
2. DUTIES. As long as Executive is employed by Employer hereunder,
------
Executive shall be subject to the direction of and be responsible to the Chief
Executive Officer of Employer with respect to the performance of his duties
hereunder, shall report to the Chief Executive Officer of Employer in that
connection at such times and in such detail as the Chief Executive Officer of
Employer may require and shall devote his full business time, attention, skill
and efforts to the business and affairs of Employer.
3. SALARY. As compensation for the services to be furnished by Executive
------
to Employer hereunder, as long as Executive is employed by Employer hereunder,
Employer shall pay Executive a salary at a minimum annual rate of $200,000
payable in accordance with Employer's standard payroll policies applicable to
officers.
4. BASIC EMPLOYEE BENEFIT PLANS AND PROGRAMS. As long as Executive is
-----------------------------------------
employed by employer hereunder, Executive shall be entitled to participate in
all regular and key employee benefit plans and programs which are or may be made
available by Employer for its officers.
5. EXPENSES. Employer shall provide for the payment of, or reimbursement
--------
of Executive for, all travel and other out-of-pocket expenses reasonably
incurred by Executive in the performance of his duties hereunder.
6. TERMINATION.
-----------
6.1 Certain Definitions. As used in this Section 6:
-------------------
Page 30 of 41
<PAGE>
(a) "Board" means the Board of Directors of Employer.
-----
(b) "Cause" means, and is limited to, (i) action by Executive
-----
involving willful malfeasance, (ii) failure to act by Executive involving
material nonfeasance or (iii) Executive being convicted of a felony.
(c) "Change of Control Event" means any one of the following: (i)
-----------------------
Continuing Directors no longer constitute at least two thirds of the Directors
constituting the Board; (ii) any person or group (as defined in Rule 13d-5 under
the Securities Exchange Act of 1934), together with its affiliates, becomes the
beneficial owner, directly or indirectly, of 15% or more of Employer's then
outstanding Common Stock or 15% or more of the voting power of Employer's then
outstanding securities entitled generally to vote for the election of Directors,
provided that the foregoing circumstances shall not constitute a Change of
Control Event if such beneficial owner is Employer, any subsidiary of Employer,
any employee benefit plan or employee stock plan of Employer or of any
subsidiary of Employer; (iii) the approval by Employer's stockholders of the
merger or consolidation of Employer with any other corporation, the sale of
substantially all of Employer's assets or the liquidation or dissolution of
Employer, unless, in the case of a merger or consolidation, the Continuing
Directors in office immediately prior to such merger or consolidation constitute
at least two thirds of the directors constituting the board of directors of the
surviving corporation of such merger or consolidation and any parent (as such
term is defined in Rule 12b-2 under the Securities Exchange Act of 1934) of such
corporation; or (iv) at least two thirds of the Continuing Directors in office
immediately prior to any other action taken or proposed to be taken by
Employer's stockholders or by the Board determines that such action constitutes,
or that such proposed action, if taken, would constitute, a change of control of
employer and such action is taken.
(d) "Continuing Director" means any person who (i) is a Director on
-------------------
the date of this Agreement; (ii) was designated before such person's initial
election as a Director as a Continuing Director by a majority of the Continuing
Directors; or (iii) has been a Director for at least two years after the
occurrence of one or more Change of Control Events.
(e) "Director" means a member of the Board.
--------
(f) "Disability" means, as applied to Executive, that (i) he has
----------
been so incapacitated by bodily injury or disease as to be unable to perform the
duties contemplated to be performed by him hereunder, (ii) the incapacity shall
have continued for a period of three consecutive months and (iii) the incapacity
will, in the opinion of a qualified physician acceptable to Employer, be
permanent and continuous for a period of at least one year.
(g) "Good Reason" means (i) without Executive's written consent (A)
-----------
(1) the assignment to Executive of any duties
Page 31 of 41
<PAGE>
and responsibilities, or any limitation of Executive's duties and
responsibilities, if such assignment or limitation is materially inconsistent
with Executive's positions, duties, responsibilities and status as an executive
of Employer or (2) any removal of Executive from, or any failure to reelect
Executive to, any of Executive's positions with Employer for Cause or as a
result of the death or Disability of Executive, and (B) the continuance thereof
for a period of 20 days after written notice thereof to Employer from Executive;
(ii) any failure by Employer to pay, or any reduction by Employer of, the salary
payable to Executive under Section 3 of this Agreement; (iii) any failure by
Employer (A) to continue to provide Executive with the opportunity to
participate, on terms no less favorable than those in effect immediately prior
to a Change of Control Event, in any benefit plan or program in which Executive
was participating immediately prior to the Change of Control Event, or their
equivalent, or (B) to provide Executive with all other fringe benefits, or their
equivalent, from time to time in effect for the benefit of any of Employer's
salaried employees; (iv) the failure by Employer to obtain the specific
assumption of this Agreement by a successor or assign of Employer or by any
person acquiring substantially all of Employer's assets; or (v) any material
breach by Employer of any provision of this Agreement.
6.2 Compensation of Executive in the Event of Termination of
--------------------------------------------------------
Executive's Employment Hereunder.
- --------------------------------
(a) In the event of Executive's Disability, Executive's employment by
Employer hereunder may be terminated by Employer upon written notice from
Employer to Executive which shall specify a date not less than 30 days from the
date of such notice as the date on which such termination shall become
effective. If Executive's employment by Employer hereunder is terminated
because of executive's Disability or death, Executive, or his heirs, executors
or administrators if termination is because of Executive's death, shall be
entitled to receive the salary payable to Executive under Section 3 until the
date on which the termination occurs.
(b) (i) Executive shall be entitled to compensation as specified in
Section 6.2(b)(ii) and (iii) if (A) Employer terminates Executive's employment
hereunder without Cause either before a Change of Control Event or more than two
years after the last Change of Control Event, or (B) Executive voluntarily
terminates his employment hereunder with Good Reason either before a Change of
Control Event or more than two years after the last Change of Control Event.
(ii) Prior to the 30th day following the date of such termination Employer shall
pay Executive (A) the amount which equals Executive's annual rate of base salary
that is in effect on the date of termination, and (B) all amounts which had
accrued but were not paid prior to such termination for personal services
actually rendered before the termination. (iii) As soon as practicable
following the date of such termination, or at such later date as Executive may
validly elect, Employer shall pay Executive all amounts payable under then
existing employee benefit
Page 32 of 41
<PAGE>
plans and programs. Notwithstanding the foregoing, if the sum of all of the
payments to Executive whether under this Agreement or otherwise (but excluding
any payments which need not be included in determining if a "parachute payment"
has been made within the meaning of Internal Revenue Code (the "Code") (S)
280G(b)(2) exceeds the product of multiplying the Base Amount times 2.99, then
such payments hereunder shall be reduced by the amount of such excess. For
purposes of this Agreement, the term Base Amount is defined in Code (S)
280G(b)(3) and the Treasury Regulations promulgated thereunder, calculated as of
the date required under the Code.
(c) (i) Executive shall be entitled to compensation as specified in
Section 6.2(c)(ii) and (iii) if (A) Employer terminates Executive's employment
hereunder without Cause upon or after a Change of Control Event but within two
years after the date of that Change of Control Event, or (B) Executive
voluntarily terminates his employment hereunder with Good Reason upon or after a
Change of Control Event but within two years after the date of that Change of
Control Event. (ii) Prior to the 30th day following the date of such
termination Employer shall pay Executive (A) the amount which equals the product
of multiplying Executive's annual rate of base salary that is in effect on the
date of termination times two, and (B) all amounts which had accrued but were
not paid prior to such termination for personal services actually rendered
before the termination. (iii) As soon as practicable following the date of such
termination, or at such later date as Executive may validly elect, Employer
shall pay Executive all amounts payable under then existing employee benefit
plans and programs. Notwithstanding the foregoing, if the sum of all of the
payments to Executive whether under this Agreement or otherwise (but excluding
any payments which need not be included in determining if a "parachute payment"
has been made within the meaning of Code (S) 280G(b)(2)) exceeds the Base Amount
times 2.99, then such payments hereunder shall be reduced by the amount of such
excess.
(b) If Executive's employment hereunder is terminated by Employer or
by Executive under any circumstances other than as set forth in Section 6.2(a),
6.2(b), or 6.2(c), all payments required by this Agreement shall cease and the
termination shall relive Employer of its obligations to make any further
payments under this Agreement except payments under the employee benefit plans
and programs and payments of amounts which had accrued but were not yet paid
prior to the termination.
7. CONFIDENTIAL INFORMATION AND TRADE SECRETS. Executive acknowledges that
------------------------------------------
all information possessed by him relating to activities of Employer that is of a
secret or confidential nature, including without limitation financial
information, exploration, mining and milling information, lists of customers,
technical and production know-how, developments, inventions, processes and
administrative procedures, is the property of Employer, and as long as Executive
is employed by Employer hereunder, and for a period of two years thereafter,
Executive shall not use any such information for the benefit of anyone other
than Employer or disclose any such
Page 33 of 41
<PAGE>
information to others except in the course of Employer's business.
8. PAYMENT TO ESTATE OR BENEFICIARY. If Executive dies before any payments
--------------------------------
required to be paid by Employer to Executive hereunder have been paid, Employer
shall make all such payments to the beneficiary or beneficiaries designated by
Executive in a written notice previously delivered by Executive or Employer or,
in the absence of such a notice, to Executive's estate.
9. ARBITRATION. Any and all disputes arising under or relating to this
-----------
Agreement shall be subject to mandatory binding arbitration in Denver, Colorado,
before the American Arbitration Association in accordance with its Commercial
Arbitration Rules. Discovery shall be allowed but subject to the limits and
procedures set forth in Rule 26.1 of the Colorado Rules of Civil Procedure. The
prevailing party in any such arbitration proceeding shall be entitled to an
award of his or its reasonable costs and attorney fees.
10. BINDING EFFECT; SUCCESSORS, ASSIGNMENT. Subject to the provisions of
--------------------------------------
this Section 10, this Agreement shall be binding upon, inure to the benefit of
and be enforceable by Employer and Executive and their respective heirs, legal
representatives, successors and assigns. If Employer shall be merged into or
consolidated with another entity, the provisions of this Agreement shall be
binding upon and inure to the benefit of the entity surviving such merger or
resulting from such consolidation.
11. GOVERNING LAW. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of Colorado applicable to contracts made
and to be performed therein.
12. NOTICE. Any notice required to be given hereunder shall be in writing
------
and delivered by certified mail, return receipt requested, addressed:
To Employer at:
Republic Plaza
370 Seventeenth Street
Suite 3150
Denver, Colorado 80202
To Executive at:
Republic Plaza
370 Seventeenth Street
Suite 3150
Denver, Colorado 80202
Page 34 of 41
<PAGE>
or in either case to such other address as may be specified in a written notice
given as provided above.
13. ENTIRE AGREEMENT; AMENDMENT. This Agreement represents the entire
---------------------------
agreement of Employer and Executive with respect to the subject matter hereof
and shall supersede any and all previous agreements, arrangements and
understandings between Employer and Executive in that regard. This Agreement
may be amended only by the written agreement of Employer and Executive.
ATLAS CORPORATION
By______________________________
Chief Executive Officer
EXECUTIVE
________________________________
Michael B. Richings
Page 35 of 41
<PAGE>
Exhibit 10.4
EMPLOYMENT AGREEMENT
--------------------
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made as of February 17, 1995
between ATLAS CORPORATION, a Delaware corporation ("Employer"), and RICHARD E.
BLUBAUGH, Vice President, Environmental and Governmental Affairs ("Executive").
Employer and Executive agree as follows:
1. EMPLOYMENT. In accordance with the terms and conditions of this
----------
Agreement, Employer agrees to employ Executive as an officer of Employer
commencing February 17, 1995, and continuing until that employment is terminated
(a) by either Employer or Executive or (b) by reason of Executive's normal
retirement in accordance with Employer's retirement programs applicable to
Executive at the time of his retirement ("Executive's Retirement"). Executive
accepts that employment and agrees to perform the duties associated therewith.
Subject to the terms and conditions of this Agreement, Executive's employment by
Employer may be terminated at any time by either Executive or Employer by 10
days prior written notice to that effect.
2. DUTIES. As long as Executive is employed by Employer hereunder,
------
Executive shall be subject to the direction of and be responsible to the Chief
Executive Officer of Employer with respect to the performance of his duties
hereunder, shall report to the Chief Executive Officer of Employer in that
connection at such times and in such detail as the Chief Executive Officer of
Employer may require and shall devote his full business time, attention, skill
and efforts to the business and affairs of Employer.
3. SALARY. As compensation for the services to be furnished by Executive
------
to Employer hereunder, as long as Executive is employed by Employer hereunder,
Employer shall pay Executive a salary at a minimum annual rate of $86,500
payable in accordance with Employer's standard payroll policies applicable to
officers.
4. BASIC EMPLOYEE BENEFIT PLANS AND PROGRAMS. As long as Executive is
-----------------------------------------
employed by employer hereunder, Executive shall be entitled to participate in
all regular and key employee benefit plans and programs which are or may be made
available by Employer for its officers.
5. EXPENSES. Employer shall provide for the payment of, or reimbursement
--------
of Executive for, all travel and other out-of-pocket expenses reasonably
incurred by Executive in the performance of his duties hereunder.
Page 36 of 41
<PAGE>
6. TERMINATION.
-----------
6.1 Certain Definitions. As used in this Section 6:
-------------------
(a) "Board" means the Board of Directors of Employer.
-----
(b) "Cause" means, and is limited to, (i) action by Executive
-----
involving willful malfeasance, (ii) failure to act by Executive involving
material nonfeasance or (iii) Executive being convicted of a felony.
(c) "Change of Control Event" means any one of the following: (i)
-----------------------
Continuing Directors no longer constitute at least two thirds of the Directors
constituting the Board; (ii) any person or group (as defined in Rule 13d-5 under
the Securities Exchange Act of 1934), together with its affiliates, becomes the
beneficial owner, directly or indirectly, of 15% or more of Employer's then
outstanding Common Stock or 15% or more of the voting power of Employer's then
outstanding securities entitled generally to vote for the election of Directors,
provided that the foregoing circumstances shall not constitute a Change of
Control Event if such beneficial owner is Employer, any subsidiary of Employer,
any employee benefit plan or employee stock plan of Employer or of any
subsidiary of Employer; (iii) the approval by Employer's stockholders of the
merger or consolidation of Employer with any other corporation, the sale of
substantially all of Employer's assets or the liquidation or dissolution of
Employer, unless, in the case of a merger or consolidation, the Continuing
Directors in office immediately prior to such merger or consolidation constitute
at least two thirds of the directors constituting the board of directors of the
surviving corporation of such merger or consolidation and any parent (as such
term is defined in Rule 12b-2 under the Securities Exchange Act of 1934) of such
corporation; or (iv) at least two thirds of the Continuing Directors in office
immediately prior to any other action taken or proposed to be taken by
Employer's stockholders or by the Board determines that such action constitutes,
or that such proposed action, if taken, would constitute, a change of control of
Employer and such action is taken.
(d) "Continuing Director" means any person who (i) is a Director on
-------------------
the date of this Agreement; (ii) was designated before such person's initial
election as a Director as a Continuing Director by a majority of the Continuing
Directors; or (iii) has been a Director for at least two years after the
occurrence of one or more Change of Control Events.
(e) "Director" means a member of the Board.
--------
(f) "Disability" means, as applied to Executive, that (i) he has
----------
been so incapacitated by bodily injury or disease as to be unable to perform the
duties contemplated to be performed by him hereunder, (ii) the incapacity shall
have continued for a period of three consecutive months and (iii) the incapacity
will, in the opinion of a qualified physician acceptable to Employer, be
Page 37 of 41
<PAGE>
permanent and continuous for a period of at least one year.
(g) "Good Reason" means (i) without Executive's written consent (A)
-----------
(1) the assignment to Executive of any duties and responsibilities, or any
limitation of Executive's duties and responsibilities, if such assignment or
limitation is materially inconsistent with Executive's positions, duties,
responsibilities and status as an executive of Employer or (2) any removal of
Executive from, or any failure to reelect Executive to, any of Executive's
positions with Employer for Cause or as a result of the death or Disability of
Executive, and (B) the continuance thereof for a period of 20 days after written
notice thereof to Employer from Executive; (ii) any failure by Employer to pay,
or any reduction by Employer of, the salary payable to Executive under Section 3
of this Agreement; (iii) any failure by Employer (A) to continue to provide
Executive with the opportunity to participate, on terms no less favorable than
those in effect immediately prior to a Change of Control Event, in any benefit
plan or program in which Executive was participating immediately prior to the
Change of Control Event, or their equivalent, or (B) to provide Executive with
all other fringe benefits, or their equivalent, from time to time in effect for
the benefit of any of Employer's salaried employees; (iv) the failure by
Employer to obtain the specific assumption of this Agreement by a successor or
assign of Employer or by any person acquiring substantially all of Employer's
assets; or (v) any material breach by Employer of any provision of this
Agreement.
6.2 Compensation of Executive in the Event of Termination of
--------------------------------------------------------
Executive's Employment Hereunder.
- --------------------------------
(a) In the event of Executive's Disability, Executive's employment by
Employer hereunder may be terminated by Employer upon written notice from
Employer to Executive which shall specify a date not less than 30 days from the
date of such notice as the date on which such termination shall become
effective. If Executive's employment by Employer hereunder is terminated
because of Executive's Disability or death, Executive, or his heirs, executors
or administrators if termination is because of Executive's death, shall be
entitled to receive the salary payable to Executive under Section 3 until the
date on which the termination occurs.
(b) (i) Executive shall be entitled to compensation as specified in
Section 6.2(b)(ii) and (iii) if (A) Employer terminates Executive's employment
hereunder without Cause either before a Change of Control Event or more than two
years after the last Change of Control Event, or (B) Executive voluntarily
terminates his employment hereunder with Good Reason either before a Change of
Control Event or more than two years after the last Change of Control Event.
(ii) Prior to the 30th day following the date of such termination Employer shall
pay Executive (A) the amount which equals Executive's annual rate of base salary
that is in effect on the date of termination, and (B) all amounts which had
accrued but were not paid prior to such termination for personal
Page 38 of 41
<PAGE>
services actually rendered before the termination. (iii) As soon as practicable
following the date of such termination, or at such later date as Executive may
validly elect, Employer shall pay Executive all amounts payable under then
existing employee benefit plans and programs. Notwithstanding the foregoing, if
the sum of all of the payments to Executive whether under this Agreement or
otherwise (but excluding any payments which need not be included in determining
if a "parachute payment" has been made within the meaning of Internal Revenue
Code (the "Code") (S) 280G(b)(2)) exceeds the product of multiplying the Base
Amount times 2.99, then such payments hereunder shall be reduced by the amount
of such excess. For purposes of this Agreement, the term Base Amount is defined
in Code (S) 280G(b)(3) and the Treasury Regulations promulgated thereunder,
calculated as of the date required under the Code.
(c) (i) Executive shall be entitled to compensation as specified in
Section 6.2(c)(ii) and (iii) if (A) Employer terminates Executive's employment
hereunder without Cause upon or after a Change of Control Event but within two
years after the date of that Change of Control Event, or (B) Executive
voluntarily terminates his employment hereunder with Good Reason upon or after a
Change of Control Event but within two years after the date of that Change of
Control Event. (ii) Prior to the 30th day following the date of such
termination Employer shall pay Executive (A) the amount which equals the
Executive's annual rate of base salary that is in effect on the date of
termination, and (B) all amounts which had accrued but were not paid prior to
such termination for personal services actually rendered before the termination.
(iii) As soon as practicable following the date of such termination, or at such
later date as Executive may validly elect, Employer shall pay Executive all
amounts payable under then existing employee benefit plans and programs.
Notwithstanding the foregoing, if the sum of all of the payments to Executive
whether under this Agreement or otherwise (but excluding any payments which need
not be included in determining if a "parachute payment" has been made within the
meaning of Code (S) 280G(b)(2)) exceeds the Base Amount times 2.99, then such
payments hereunder shall be reduced by the amount of such excess.
(d) If Executive's employment hereunder is terminated by Employer or
by Executive under any circumstances other than as set forth in Section 6.2(a),
6.2(b), or 6.2(c), all payments required by this Agreement shall cease and the
termination shall relieve Employer of its obligations to make any further
payments under this Agreement except payments under the employee benefit plans
and programs and payments of amounts which had accrued but were not yet paid
prior to the termination.
7. CONFIDENTIAL INFORMATION AND TRADE SECRETS. Executive acknowledges
------------------------------------------
that all information possessed by him relating to activities of Employer that is
of a secret or confidential nature, including without limitation financial
information, exploration, mining and milling information, lists of customers,
technical and production know-how, developments, inventions, processes and
Page 39 of 41
<PAGE>
administrative procedures, is the property of Employer, and as long as Executive
is employed by Employer hereunder, and for a period of two years thereafter,
Executive shall not use any such information for the benefit of anyone other
than Employer or disclose any such information to others except in the course of
Employer's business.
8. PAYMENT TO ESTATE OR BENEFICIARY. If Executive dies before any
--------------------------------
payments required to be paid by Employer to Executive hereunder have been paid,
Employer shall make all such payments to the beneficiary or beneficiaries
designated by Executive in a written notice previously delivered by Executive or
Employer or, in the absence of such a notice, to Executive's estate.
9. ARBITRATION. Any and all disputes arising under or relating to
-----------
this Agreement shall be subject to mandatory binding arbitration in Denver,
Colorado, before the American Arbitration Association in accordance with its
Commercial Arbitration Rules. Discovery shall be allowed but subject to the
limits and procedures set forth in Rule 26.1 of the Colorado Rules of Civil
Procedure. The prevailing party in any such arbitration proceeding shall be
entitled to an award of his or its reasonable costs and attorney fees.
10. BINDING EFFECT; SUCCESSORS, ASSIGNMENT. Subject to the provisions
--------------------------------------
of this Section 10, this Agreement shall be binding upon, inure to the benefit
of and be enforceable by Employer and Executive and their respective heirs,
legal representatives, successors and assigns. If Employer shall be merged into
or consolidated with another entity, the provisions of this Agreement shall be
binding upon and inure to the benefit of the entity surviving such merger or
resulting from such consolidation.
11. GOVERNING LAW. This Agreement shall be governed by and construed
-------------
in accordance with the laws of the State of Colorado applicable to contracts
made and to be performed therein.
12. NOTICE. Any notice required to be given hereunder shall be in
------
writing and delivered by certified mail, return receipt requested, addressed:
To Employer at:
Republic Plaza
370 Seventeenth Street
Suite 3150
Denver, Colorado 80202
To Executive at:
Republic Plaza
370 Seventeenth Street
Suite 3150
Denver, Colorado 80202
or in either case to such other address as may be specified in a
Page 40 of 41
<PAGE>
written notice given as provided above.
13. ENTIRE AGREEMENT; AMENDMENT. This Agreement represents the entire
---------------------------
agreement of Employer and Executive with respect to the subject matter hereof
and shall supersede any and all previous agreements, arrangements and
understandings between Employer and Executive in that regard. This Agreement
may be amended only by the written agreement of Employer and Executive.
ATLAS CORPORATION
By_________________________________
President
EXECUTIVE
___________________________________
Richard E. Blubaugh
Page 41 of 41
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
ATLAS CORPORATION MARCH 31, 1995 CONSOLIDATED FINANCIAL STATEMENTS AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1994
<PERIOD-START> JUL-01-1994
<PERIOD-END> MAR-31-1995
<CASH> 11
<SECURITIES> 6,474
<RECEIVABLES> 137
<ALLOWANCES> 0
<INVENTORY> 250
<CURRENT-ASSETS> 7,132
<PP&E> 47,557
<DEPRECIATION> 44,652
<TOTAL-ASSETS> 55,673
<CURRENT-LIABILITIES> 2,803
<BONDS> 3,500
<COMMON> 18,578
0
0
<OTHER-SE> 18,797
<TOTAL-LIABILITY-AND-EQUITY> 55,673
<SALES> 2,328
<TOTAL-REVENUES> 2,328
<CGS> 3,031
<TOTAL-COSTS> 3,031
<OTHER-EXPENSES> 2,704
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 312
<INCOME-PRETAX> (7,281)
<INCOME-TAX> 0
<INCOME-CONTINUING> (7,281)
<DISCONTINUED> 846
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (6,435)
<EPS-PRIMARY> (.41)
<EPS-DILUTED> (.41)
</TABLE>
