<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
ROCHESTER & PITTSBURGH COAL COMPANY
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
ROCHESTER & PITTSBURGH COAL COMPANY
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transactions applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:1
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registrations statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
- ---------------
(1)Set forth the amount on which the filing fee is calculated and state
how it was determined.
<PAGE> 2
ROCHESTER & PITTSBURGH COAL COMPANY
INDIANA, PENNSYLVANIA 15701
------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON TUESDAY, MAY 3, 1994
------------------------------------
To the Shareholders of
ROCHESTER & PITTSBURGH COAL COMPANY:
The Annual Meeting of Shareholders of Rochester & Pittsburgh Coal Company
(the "Company") will be held at the principal office of the Company, 655 Church
Street, Indiana, Pennsylvania, on Tuesday, May 3, 1994, at 2:00 o'clock in the
afternoon, local time, for the following purposes:
1. To elect four Class A Directors of the Company to hold office for a
three-year term and until their respective successors shall have been duly
elected.
2. To consider and act upon the selection of Ernst & Young,
independent public accountants, as the Company's auditors for the year
ending December 31, 1994.
3. To transact such other business as may properly come before the
Annual Meeting and any adjournment thereof.
Shareholders of record at the close of business on March 4, 1994, are
entitled to notice of and to vote at the Annual Meeting.
A copy of the Company's Annual Report for its fiscal year ended December
31, 1993, is being mailed to shareholders with this Notice.
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING IN PERSON, YOU ARE
URGED TO FILL IN, SIGN, DATE, AND PROMPTLY RETURN THE ENCLOSED FORM OF PROXY IN
THE ENVELOPE PROVIDED.
By Order of the Board of Directors,
PETER ISELIN, Secretary
April 4, 1994
<PAGE> 3
ROCHESTER & PITTSBURGH COAL COMPANY
INDIANA, PENNSYLVANIA 15701
PROXY STATEMENT
This Proxy Statement and the form of Proxy enclosed herewith are furnished
in connection with the solicitation of proxies by the Board of Directors of
Rochester & Pittsburgh Coal Company (hereinafter called the "Company") to be
voted at the Annual Meeting of Shareholders to be held on Tuesday, May 3, 1994,
and at any adjournment thereof, at the Company's principal executive office at
655 Church Street, Indiana, Pennsylvania 15701.
The approximate date on which this Proxy Statement and the accompanying
form of proxy are first being sent to holders of Common Stock is April 4, 1994.
Shares represented by proxies in the accompanying form, if properly signed
and returned, will be voted in accordance with the directions made thereon by
the shareholders. Any proxy not directing to the contrary will be voted FOR the
election of the nominees for Director named below, and FOR selection of Ernst &
Young, independent public accountants, as the Company's auditors for the year
ending December 31, 1994. Any proxy given pursuant to this solicitation may be
revoked at any time prior to the voting thereof, but such revocation shall not
be effective until written notice thereof has been given to the Secretary of the
Company.
The cost of solicitation of proxies in the accompanying form will be borne
by the Company, including expenses in connection with preparing and mailing this
Proxy Statement. Such solicitation will be made by mail and may also be made on
behalf of the Company by the Company's officers and employees personally or by
telephone or telegram. The Company, upon request therefor, will also reimburse
brokers or persons holding shares in their names or in the names of nominees for
their reasonable expenses in sending proxies and proxy material to beneficial
owners.
Only holders of Common Stock of record as of the close of business on March
4, 1994, are entitled to notice of and to vote at the Annual Meeting. Cumulative
voting rights exist with respect to the election of directors. Thus, each
shareholder has the right, in person or by proxy, to multiply the number of
votes to which he is entitled by the number of directors in the class to be
elected, and to cast the whole number of such votes for one candidate or to
distribute them among two or more candidates in such class. The persons named in
the proxy will have the right to vote cumulatively and to distribute their votes
among nominees as they consider advisable. On all other matters to come before
the Annual Meeting, each share of Common Stock is entitled to one vote. As of
March 4, 1994, 3,438,775 shares of Common Stock of the Company were outstanding.
<PAGE> 4
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth, as of March 4, 1994, the amount and
percentage of the Company's outstanding Common Stock beneficially owned by (i)
each person who is known by the Company to own beneficially more than 5% of its
Common Stock, (ii) each director and nominee for director, (iii) each executive
officer named in the Summary Compensation Table and (iv) all directors and
executive officers as a group.
<TABLE>
<CAPTION>
PERCENT OF
NAME OF INDIVIDUAL SHARES OUTSTANDING
OR IDENTITY OF GROUP BENEFICIALLY OWNED(1) COMMON STOCK(2)
------------------------------ ----------------------- ---------------
<S> <C> <C> <C>
5% HOLDERS:
Peter Iselin
40 Wall Street
New York, New York 10005
Emilie I. Wiggin
106 Pear Tree Point Road ...... 1,749,665 shares(3)(4) 50.8%
Darien, Connecticut 06820
O'Donnell Iselin II
40 Wall Street
New York, New York 10005
DIRECTORS:
David H. Davis........................ 2,863
Thomas W. Garges, Jr. ................ 3,731
L. Blaine Grube....................... 8,142
Thomas M. Hyndman, Jr. ............... 1,260
Columbus O'D. Iselin, Jr. ............ 14,908
William G. Kegel...................... 3,482
John L. Schroder, Jr. ................ 1,497
Norman S. Smith....................... 68
Gordon B. Whelpley, Jr. .............. 21,796
EXECUTIVE OFFICERS:
W. Joseph Engler, Jr. ................ 3,200
George M. Evans....................... 812
A. W. Petzold......................... 250
Thomas M. Majcher..................... 250
All Directors and
executive officers
as a group (15 persons)............... 1,795,972 52.2%
</TABLE>
- ---------------
(1) Information furnished by each individual. Includes shares that are
owned jointly, in whole or in part, with the individual's spouse, or
individually by his or her spouse.
(2) Less than 1% unless otherwise indicated.
(3) Under the rules of the Securities and Exchange Commission (the "SEC"),
a person is deemed to be the beneficial owner of securities if he has, or
shares, "voting power" (which includes the power to vote, or to direct the
voting of, such securities) or "investment power" (which includes the power to
dispose, or to direct the disposition, of such securities). Under these rules,
more than one person may be deemed the beneficial owner of the same securities.
The information set forth in the above table includes all shares of Common
2
<PAGE> 5
Stock of the Company over which Peter Iselin, Emilie I. Wiggin, and O'Donnell
Iselin II, individually or together share voting power or investment power,
adjusted, however, to eliminate reporting of shares more than once in order not
to overstate the aggregate beneficial ownership of such persons.
(4) Under the rules of the SEC, the maximum beneficial ownership of the
Company's Common Stock which Peter Iselin, Emilie I. Wiggin, and O'Donnell
Iselin II, could be deemed to have is 1,713,161 shares (49.8%), 1,646,633 shares
(47.8%), and 909,050 shares (26.4%), respectively.
SECTION 16 COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires the Company's executive officers, directors, and persons who own more
than 10% of a class of the Company's equity securities registered under the
Exchange Act, to file reports of their ownership of such securities as well as
monthly statements of any changes in such ownership with the SEC and the
Company. Based solely on its review of the copies of the Section 16(a) forms
received by it, and written representations from the Company's executive
officers and directors, the Company believes that during 1993 all filing
requirements applicable to its executive officers, directors, and greater than
10% shareholders were met, except that Mr. Kegel inadvertently failed to report
on a timely basis his transfer of 3,482 shares of Common Stock from direct to
indirect ownership.
DIRECTORS AND NOMINEES FOR ELECTION AS DIRECTOR
Four Class A Directors of the Company are to be elected at the Annual
Meeting, each to serve for a term of three years and until his or her respective
successor has been duly elected. Unless otherwise instructed, the proxies
solicited by the Board of Directors will be voted for the four nominees named
below, all of whom are currently Directors of the Company. If events not now
known or anticipated make any of the nominees unwilling or unable to serve, the
proxies will be voted for a substitute nominee or nominees designated by the
Board of Directors. Any vacancy occurring on the Board of Directors for any
reason may be filled for the remainder of the unexpired term by a majority of
the Directors then in office. Shares held by brokers or nominees as to which
instructions have not been received from the beneficial owner or person
otherwise entitled to vote and as to which the broker or nominee does not have
discretionary voting power, i.e., broker non-votes, will be treated as not
present and not entitled to vote for nominees for election as Director.
Abstentions from voting on election of Directors will have no effect since they
will not represent votes cast for the purpose of electing directors. The four
nominees for Director receiving the highest number of votes from the
shareholders shall be elected.
3
<PAGE> 6
The names of the nominees for Class A Directors, all of whom are presently
Directors, and certain information regarding them are:
CLASS A DIRECTORS
<TABLE>
<CAPTION>
YEAR
TERM
DIRECTOR WILL
NAME AGE PRINCIPAL OCCUPATION SINCE EXPIRE
- ------------------------------- --- ------------------------------------------ -------- ------
<S> <C> <C> <C> <C>
L. Blaine Grube(3)(4).......... 77 Retired; Vice President and Treasurer of 1986 1997*
the Company (1976-1986)
Peter Iselin(1)(2)............. 73 Vice President-Finance and Secretary of 1954 1997*
the Company since 1965
William G. Kegel(1)(3)......... 72 Chairman of the Board of the Company; 1973 1997*
Retired President and Chief Executive
Officer of the Company (1979-1988)
Gordon B. Whelpley,
Jr.(2)(4).................... 40 Project Manager since 1986 -- Louis E. Lee 1987 1997*
Co. Builders, Commercial and Residential
Contractors; Independent Consultant -- Oil
and Gas (1985-1986)
</TABLE>
- ---------------
* If elected at the meeting
The names of the Class B and Class C Directors who will continue in office
after the Annual Meeting until the expiration of their respective terms and
certain information regarding them are:
CLASS B DIRECTORS
<TABLE>
<CAPTION>
YEAR
TERM
DIRECTOR WILL
NAME AGE PRINCIPAL OCCUPATION SINCE EXPIRE
- ------------------------------- --- ------------------------------------------ -------- ------
<S> <C> <C> <C> <C>
Columbus O'D. Iselin,
Jr.(1)(4).................... 62 Independent Consultant -- Aerospace and 1967 1995
Defense since 1987; Vice President --
International Market Development, Sikorsky
Aircraft (1986-1987), Vice President --
Europe/Mid East, Sikorsky Division, United
Technologies Corporation (1983-1986)
David H. Davis(1)(4)........... 82 Coal Consultant; Retired Division 1976 1995
President (1962-1971), Corporate Vice
President (1964-1975), Consolidation Coal
Company
John L. Schroder, Jr.(1)....... 75 Retired; Dean, College of Mineral and 1983 1995
Energy Resources, West Virginia University
(1984-1991); Assistant to Group Vice
President -- Resource Development, U.S.
Steel Corporation (1983);
President -- U.S. Steel Mining Co., Inc.
(1981-1983)
Thomas W. Garges, Jr.(3)....... 54 President and Chief Executive Officer of 1988 1995
the Company since October 1988; Executive
Vice President and Chief Operating Officer
of the Company (May-October 1988); Senior
Vice President -- Operations, Elk River
Resources, Inc., (1986-1988)
</TABLE>
4
<PAGE> 7
CLASS C DIRECTORS
<TABLE>
<CAPTION>
YEAR
TERM
DIRECTOR WILL
NAME AGE PRINCIPAL OCCUPATION SINCE EXPIRE
- ------------------------------- --- ------------------------------------------ -------- ------
<S> <C> <C> <C> <C>
Thomas M. Hyndman, Jr.
(1)(3)(4).................... 69 Of Counsel since 1993, Partner 1972 1996
(1957-1992),
Duane, Morris & Heckscher, Attorneys at
Law(5)
Norman S. Smith(4)............. 62 Professor of Mining Engineering since 1979 1996
1992, Associate Professor of Mining
Engineering (1979-1992), University of
Missouri-Rolla
O'Donnell Iselin II(1)(2)(4)... 40 Manager, Finance Staff, Hughes Aircraft 1983 1996
Company since 1989; Financial Consultant
(1988), Vice President -- Finance and
Administration (1986-1988), Dynamic Disk,
Inc.
</TABLE>
- ---------------
(1) Member, Compensation Committee. The Compensation Committee, composed of
seven directors, administers the Company's Key Executives Incentive Compensation
Plan (the "Incentive Plan"), recommending certain executives for participation
in such plan and bonuses to be paid pursuant thereto, and considers and
recommends compensation arrangements with executive personnel. See Note 4 under
"Executive Compensation" and "Compensation Committee Interlocks and Insider
Participation". During 1993, the Compensation Committee met twice.
(2) Mr. Peter Iselin is the father of Mr. O'Donnell Iselin II, and the
uncle of Mr. Gordon B. Whelpley, Jr., Mr. O'Donnell Iselin II and Mr. Gordon B.
Whelpley, Jr. are cousins.
(3) Mr. Garges is a Director and Messrs. Grube and Kegel are Directors
Emeriti of S&T Bancorp, Inc., Indiana, Pa. Mr. Hyndman is a Director of Penn
Engineering & Manufacturing Corp., Danboro, Pa.
(4) Member, Audit Committee. The Audit Committee, composed of seven
directors, recommends the selection of independent auditors, reviews the regular
annual audits with them, and performs such other functions related to accounting
and auditing as the Audit Committee or the Board of Directors may determine.
During 1993, the Audit Committee met twice.
(5) The law firm to which Mr. Hyndman is Of Counsel rendered legal services
to the Company during 1993.
There is no nominating committee of the Board of Directors. During 1993,
the Board of Directors held ten meetings. During 1993, each Director attended
not less than 75% of the aggregate number of meetings of the Board of Directors
and meetings of all committees on which he or she served, except O'Donnell
Iselin II.
DIRECTOR COMPENSATION
The Company's non-employee Directors receive a fee of $1,200 per month. In
addition, all of the Company's Directors receive a fee of $500 for each meeting
of the Board of Directors and each committee meeting attended.
Pursuant to the terms of an Employment and Deferred Compensation Agreement,
as amended, with Mr. Kegel, effective December 31, 1988, Mr. Kegel retired as an
employee of the Company. He continues to
5
<PAGE> 8
serve as a Director, Chairman of the Board, and as an independent consultant to
the Company. In 1993, he received remuneration of $25,000 for services to the
Company in addition to fees received as a Director of the Company. In addition,
in 1993, under terms of the Agreement, as amended, Mr. Kegel was paid, as
deferred compensation, an aggregate of $59,801 in 12 equal consecutive monthly
installments. The Agreement, as amended, provides for aggregate payments of
$538,211 in 108 equal consecutive monthly installments commencing in January
1990, and continuing through December 1998.
EXECUTIVE COMPENSATION
The following table sets forth the compensation for the past three years of
each of the Company's five most highly compensated executive officers, including
the Chief Executive Officer, (the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
OTHER
ANNUAL COMPENSATION ANNUAL ALL OTHER
----------------------------- COMPENSA- COMPENSA-
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) TION($) TION($)
- ---------------------------------------- ----- --------- -------- --------- ---------
<S> <C> <C> <C> <C> <C>
Thomas W. Garges, Jr.................... 1993 301,600 94,000 (2) 6,780(5) 7,828(6)
President and CEO(1) 1992 295,800 155,000 (3) 6,829(6)
1991 282,500 135,000
A. W. Petzold........................... 1993 165,150 20,000 (2) 3,390(5) 750(7)
Vice President-Operations 1992 161,975 50,000 (3) 750(7)
1991 155,025 40,000 (4)
George M. Evans......................... 1993 150,280 25,000 (2) 3,390(5) 2,750(8)
Vice President and Treasurer 1992 147,390 50,000 (3) 1,750(8)
1991 141,000 40,000 (4)
W. Joseph Engler, Jr. .................. 1993 137,800 20,000 (2) 3,390(5) 2,750(8)
Vice President and General Counsel 1992 135,150 50,000 (3) 1,750(8)
1991 128,750 40,000 (4)
Thomas M. Majcher....................... 1993 136,500 20,000 (2) 3,390(5) 750(7)
Vice President-Corporate Development 1992 133,875 50,000 (3) 750(7)
1991 128,125 30,000 (4)
</TABLE>
- ---------------
(1) Mr. Garges is employed pursuant to the terms of an Employment
Agreement. See "Employment Agreements".
(2) The figure includes a cash bonus of $75,000 and 500 shares of the
Company's Common Stock having a value of $19,000 on the date of issue to Mr.
Garges. The figure represents cash bonuses of $25,000 paid to Mr. Evans and
$20,000 paid to Messrs. Petzold, Engler, and Majcher. Mr. Garges will be
responsible for payment of taxes on the value of the stock award.
(3) The figure includes a cash bonus of $135,000 and 500 shares of the
Company's Common Stock having a value of $20,000 on the date of issue to Mr.
Garges. The figure includes cash bonuses of $40,000 and 250 shares of the
Company's Common Stock having a value of $10,000 on the date of issue to Messrs.
Petzold, Evans, Engler, and Majcher. Amounts reimbursed during 1993 for payment
of taxes on the value of the stock awards are reported in the column "Other
Annual Compensation" in the above table.
6
<PAGE> 9
(4) Includes payments made in 1991 for services performed in that year
under the Company's Incentive Plan. The Compensation Committee of the Board of
Directors administers the Incentive Plan, approves participants in and
performance objectives of the Incentive Plan, and fixes individual awards under
the Incentive Plan. Two plans were utilized during 1991. Under provisions of the
Incentive Plan which was effective through June 30, 1991, payments under the
Incentive Plan could not exceed certain specified percentages of the
participant's base salary. Under provisions of the Incentive Plan effective on
and after July 1, 1991, corporate profit and individual performance goals are
established for the plan year and are the criteria for awards of incentive
compensation. These awards are based on percentages of the base compensation for
different participants. Vice Presidents, elected officers and the Assistant
Treasurer are not participants in the Incentive Plan and receive incentive
compensation at the discretion of the Compensation Committee. Calculations under
the plans were made on a pro rata basis, with the prior plan applying to the
first six months of 1991.
(5) The figure represents payment of taxes in 1993 on the value of stock
awards issued as 1992 bonuses. See Note (3) above.
(6) The 1993 figure includes the Company's $750 contribution to the
Rochester & Pittsburgh Coal Company 401(k) Savings and Retirement Plan (the
"401(k) Plan"), $564 in insurance premiums paid by the Company for additional
insurance on Mr. Garges's life (See "Employment Agreements"), and $6,514 in
Directors' fees paid by the Company or certain of its subsidiaries. The 1992
figure includes the Company's $750 contribution to the 401(k) Plan, $564 in
insurance premiums paid by the Company for additional insurance on Mr. Garges's
life (See "Employment Agreements"), and $5,515 in Directors' fees paid by the
Company or certain of its subsidiaries.
(7) The figure represents the Company's contribution to the 401(k) Plan.
(8) The 1993 figure includes the Company's $750 contribution to the 401(k)
Plan and $2,000 in Directors' fees paid by two of the Company's subsidiaries.
The 1992 figure includes the Company's $750 contribution to the 401(k) Plan and
$1,000 in Directors' fees paid by one of the Company's subsidiaries.
------------------
EMPLOYMENT AGREEMENTS
In 1988, the Company entered into an Employment Agreement with Mr. Garges
pursuant to which the Company agreed to employ him commencing May 2, 1988, for a
term of four years. Under said Agreement, he was paid an annual base salary of
not less than $225,000, plus such additional compensation as was determined from
time to time by the Board of Directors. In the event that Mr. Garges's
employment continued for such period of time as would have entitled him to
receive a pension under the Company's pension plan (the "Pension Plan"), the
Company was to pay to Mr. Garges, or his spouse, in addition to any amount due
under the Pension Plan, an amount equal to the monthly benefit received by Mr.
Garges or his spouse pursuant to the Pension Plan. In addition to life insurance
under the Company's existing benefit program, under said Agreement the Company
paid the premium cost of life insurance on Mr. Garges's life (payable to such
beneficiaries as he may have designated) in such amount as was necessary to
bring the total face amount of insurance on Mr. Garges's life paid for by the
Company to $500,000.
A new Employment Agreement (the "1992 Agreement") was entered into by the
Company and Mr. Garges effective as of May 1, 1992. Under the 1992 Agreement,
Mr. Garges is employed for a period of three years and, until notice of
termination is given by either party, Mr. Garges's employment is extended each
day for one additional day so that at all times his term of employment is for a
period of three years. Under the
7
<PAGE> 10
1992 Agreement, Mr. Garges is to be paid an annual base salary of not less than
$300,000, plus such additional compensation as may be determined from time to
time by the Board of Directors, in its sole discretion.
Under the 1992 Agreement, in the event that Mr. Garges's employment
continues for such period of time as will entitle him to receive a pension under
the Company's Pension Plan, the Company will pay to Mr. Garges or his spouse,
upon the commencement of the payment of the pension benefits under the Pension
Plan, a monthly supplement consisting of the sum of (i) an amount equal to the
monthly pension benefit Mr. Garges or his spouse would have received pursuant to
the Pension Plan, without regard to certain limitations imposed by the Internal
Revenue Code of 1986, and (ii) the difference between the monthly pension
benefits actually paid to Mr. Garges or his spouse under the Pension Plan and
the monthly pension benefit which would have been payable to Mr. Garges or his
spouse under the Pension Plan without application of said limitations. The
supplemental pension payments will terminate at the earlier of (i) the
expiration of ten years from the date of the first monthly supplemental pension
payment or (ii) the termination of pension payments under the Pension Plan to
Mr. Garges, his spouse or the survivor of them, if applicable. Should Mr. Garges
die prior to July 22, 2001, and his spouse become eligible to receive pension
benefits under the Pension Plan, no monthly supplement shall be paid to her. In
addition to life insurance under the Company's existing benefit program, under
the 1992 Agreement, the Company has agreed to pay the premium cost of life
insurance on Mr. Garges's life (payable to such beneficiaries as he may
designate) in such amount as is necessary to bring the total face amount of
insurance on Mr. Garges's life paid for by the Company to $1,200,000. Upon Mr.
Garges reaching age 62, the face amount of life insurance shall be reduced to
$500,000.
PENSION PLAN
Under the Company's Pension Plan covering officers and other management
employees, annual benefits are payable monthly upon retirement. Such benefits
are, in general, based upon an employee's (i) average monthly earnings during
the five highest four calendar quarter periods out of the last ten four calendar
quarter periods of management service prior to retirement and (ii) length of
management service, with a maximum of 35 years. Pension benefits are subject to
a deduction for 50% of Social Security benefits. The full cost of such pension
program is paid by the Company. There is no requirement that employees retire at
a designated age. With some exceptions, benefits are payable on a reduced basis
upon retirement between the ages of 55 and 62.
The amounts shown in the following table, before a deduction for 50% of
Social Security benefits, are those payable in the event of retirement at age 65
in 1994:
<TABLE>
<CAPTION>
AVERAGE ANNUAL EARNINGS ANNUAL BENEFITS UPON RETIREMENT
DURING THE HIGHEST FIVE WITH YEARS OF SERVICE INDICATED
OF THE FINAL TEN ----------------------------------------------------------
FOUR CALENDAR QUARTER PERIODS 10 20
OF MANAGEMENT SERVICE YEARS YEARS 25,YEARS 30 YEARS 35 YEARS
- ----------------------------- ------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$ 150,000 $26,250 $52,500 $ 65,625 $ 78,750 $ 91,875
200,000 35,000 70,000 87,500 105,000 122,500
250,000 43,750 87,500 109,375 131,250 153,125
300,000 52,500 105,000 131,250 157,500 183,750
350,000 61,250 122,500 153,125 183,750 214,375
400,000 70,000 140,000 175,000 210,000 245,000
450,000 78,750 157,500 196,875 236,250 275,625
500,000 87,500 175,000 218,750 262,500 306,250
550,000 96,250 192,500 240,625 288,750 336,875
</TABLE>
The compensation utilized for determination of benefits under the Pension
Plan as summarized in the table above is salary and bonus. Of the individual
officers named in the Summary Compensation Table,
8
<PAGE> 11
assuming retirement at age 65, Mr. Garges, Mr. Petzold, Mr. Evans, Mr. Engler,
and Mr. Majcher, will have 17, 16, 36, 35 and 28 years of service, respectively.
The information in the foregoing table does not reflect certain limitations
imposed by the Internal Revenue Code of 1986, as amended (the "Code"). Beginning
in 1994, the Code prohibits the inclusion of earnings in excess of $150,000 per
year (adjusted periodically for cost-of-living increases) in the average
earnings used to calculate benefits. The Code also limits the maximum annual
pension (currently $118,800, but adjusted annually for cost-of-living increases)
that can be payable to each eligible employee. Also, the table of pension
amounts does not reflect the effects of operating the pension plan under
Alternative II D of Internal Revenue Service Notice 88-131 after June 30, 1989,
which limits the pension payable to certain highly compensated employees until
the Pension Plan is amended to meet the requirements of the Code.
NOTE: Notwithstanding anything to the contrary set forth in any of the
Company's previous filings under the Exchange Act that might incorporate future
filings, including this Proxy Statement, in whole or in part, the following
report of the Compensation Committee and the Performance Graph on page 12 shall
not be incorporated by reference into any such filings, shall not be deemed
proxy solicitation material, shall not be deemed filed with the SEC under the
Exchange Act and shall not otherwise be subject to the liabilities of Section 18
of the Exchange Act.
COMPENSATION COMMITTEE
Under the rules established by the SEC, the Compensation Committee (the
"Committee") of the Board of Directors of the Company is required to provide
certain information about the Committee's compensation policies applicable to
the Company's executive officers, including the Named Executive Officers. The
Committee has furnished the following report in fulfillment of the SEC's
requirement:
REPORT OF THE COMPENSATION COMMITTEE
In general, the policies followed by the Committee in fixing the
compensation of the Company's executive officers are designed to:
-- Attract and retain executive officers who contribute to the long term
success of the Company;
-- Motivate executive officers to achieve strategic business objectives and
reward them for their achievement; and
-- Compensate executive officers fairly based on their corporate and
individual performance and responsibilities.
The Committee fixes the base salaries of executive officers, including the
Named Executive Officers, annually as of July 1. In doing so, the Committee
considers: (a) salary survey data for comparable jobs secured from independent
outside sources, (b) the recommendations of the Chief Executive Officer (except
in the case of the Chief Executive Officer's salary), (c) changes in the cost of
living indices, (d) length of service, (e) the performance of the executive
officer, and (f) any other particular considerations which may be deemed
appropriate by the Committee.
Inasmuch as certain of the Company's mines were closed from May to December
1993 by a strike against the mining industry called by the United Mine Workers
of America, the Compensation Committee determined, on the recommendation of the
Company's Chief Executive Officer, a 3% salary increase approved for all
executive officers, including the Chief Executive Officer, by the Compensation
Committee at its meeting on June 24, 1993 not become effective with respect to
the Company's executive officers until the expiration of one full month after
the agreement with the United Mine Workers of America had been reached
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<PAGE> 12
and the Company's mines resumed normal operations. Consequently, the 3% salary
increase did not take effect until February 1, 1994.
Bonuses are paid annually to the Company's executive officers (other than
the Named Executive Officers and certain other officers), pursuant to the
provisions of the Incentive Plan, which was adopted by the Committee and the
Company's Board of Directors effective July 1, 1991. Under the provisions of the
Incentive Plan, the Committee adopts appropriate profit and individual
performance goals and objectives in December of each year for the following
year. Awards (bonuses) paid pursuant to the Incentive Plan are based upon the
achievement of the goals established for the year. These awards may range from
0% to 22% of the base salary of the participant. The Committee administers the
Incentive Plan, approves the participants in the Incentive Plan and determines
the awards under the Incentive Plan annually.
The Named Executive Officers are not participants in the Incentive Plan.
However, the Named Executive Officers are eligible to receive incentive
compensation bonuses for each calendar year. The bonuses for the Named Executive
Officers, other than the Chief Executive Officer, are determined in the
discretion of the Committee, acting with the advice of the Chief Executive
Officer. The determination of the amount of the bonuses for these officers is
based upon the following considerations: (a) achievement of corporate
profitability objectives as established for the calendar year, (b) the actual
amount of the Company's operating profit for the year, (c) achievement of
specified objectives related to each executive's area of responsibility, (d) the
Chief Executive Officer's subjective evaluation of the executive's performance
during the calendar year, (e) the contribution of the officer to the overall
success of the Company for the year, (f) the nature and difficulty of any
particular matters with which the officer dealt during the year and the success
achieved in dealing with such matters, and (g) an analysis of competitive bonus
practices based upon data received from independent outside sources. These
factors are applied by the Compensation Committee in a discretionary and
subjective manner with respect to each Named Executive Officer.
The compensation of the Chief Executive Officer is governed by the terms of
an employment agreement (the "Agreement"). See "Employment Agreements". Under
the terms of the Agreement, the Committee, which has discretionary authority to
set base salary for the Chief Executive Officer above a contractual minimum
amount ($300,000), fixes the Chief Executive Officer's base salary annually
effective July 1 of each year. In fixing the base salary the Committee takes
into account all of the considerations referred to above in fixing the base
salaries of other executive officers, except that it does not have the
recommendation of the Chief Executive Officer. As stated above, although a 3%
increase in the base salary of the Chief Executive Officer was approved by the
Compensation Committee at its June 1993 meeting, this increase did not become
effective until February 1, 1994 because of the United Mine Workers of America
strike.
The Company's practice is also to pay a bonus to the Chief Executive
Officer each calendar year. The amount of the bonus paid annually to the Chief
Executive Officer is determined in the discretion of the Compensation Committee,
which takes into account all considerations which it deems appropriate,
including the criteria used in determining the other Named Executive Officers'
bonuses.
Primarily because of the United Mine Workers of America strike, which
extended from May to December 1993, during which most of the Company's mining
operations were closed, 1993 was a difficult year for the Company, and the
Company's profitability declined significantly. As a result, the bonus paid to
the Chief Executive Officer, as well as the bonuses paid to the other Named
Executive Officers, were significantly lower than those paid in 1992. During
1993, however, rehabilitation and development of the Company's mining property
acquired at the end of 1992 proceeded in a successful manner. Also, management
made the necessary, although difficult, decisions to reduce costs during the
strike while still preserving the organizational integrity of the Company. These
considerations were significant factors in the Compensation Committee's
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<PAGE> 13
decision to pay bonuses to the Chief Executive Officer and the other Named
Executive Officers with respect to 1993 and the amounts thereof.
The Compensation Committee did not consider the deductibility for federal
tax purposes of the compensation paid to the Named Executive Officers and the
Chief Executive Officer under the new provisions of Section 162(m) of the Code
given their current compensation levels. The Compensation Committee intends to
take the necessary steps to conform the Company's policies with respect to
executive compensation in order to comply with the provisions of Section 162(m)
if and at such time as the deductibility thereof becomes affected by such
provisions.
Compensation Committee:
DAVID H. DAVIS, Chairman
COLUMBUS O'D. ISELIN, JR.
JOHN L. SCHRODER, JR.
PETER ISELIN
WILLIAM G. KEGEL
THOMAS M. HYNDMAN, JR.
O'DONNELL ISELIN II
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PERFORMANCE GRAPH
Set forth below is a line graph comparing the cumulative total shareholder
return on the Company's Common Stock, based on the market price of the Common
Stock and assuming reinvestment of dividends, including stock dividends, with
the cumulative total return of companies on the Standard & Poor's 500 Stock
Index and a Peer Group Index.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG ROCHESTER & PITTSBURGH COAL COMPANY, S&P 500 INDEX
AND PEER GROUP
<TABLE>
<CAPTION>
ROCHESTER &
MEASUREMENT PERIOD PITTSBURGH S&P 500 IN- PEER GROUP
(FISCAL YEAR COVERED) COAL COMPANY DEX INDEX
<S> <C> <C> <C>
1988 100 100 100
1989 120 132 151
1990 132 128 175
1991 127 166 232
1992 113 179 159
1993 121 198 164
</TABLE>
Assumes $100 invested on December 31, 1988 in R&P Common Stock, S&P 500 Index
and Peer Group Index.
* Calendar year ended December 31
In 1993, the Company utilized the S&P Coal Index rather than a Peer Group
Index. During 1993, Standard & Poor's stopped publishing the S&P Coal Index
which had been composed of Eastern Enterprises ("Eastern"), Pittston Company
("Pittston"), and Westmoreland Coal Company. Eastern is no longer in the coal
business. In July 1993, Pittston's stock was reclassified into two classes of
common stock -- Pittston Minerals and Pittston Services. Because Pittston
Minerals has been publicly traded only since July 1993, a comparison to prior
years is not appropriate.
The Peer Group Index includes Ashland Coal Company and Westmoreland Coal
Company. The cumulative total returns of each company have been weighted
according to each company's stock market capitalization as of December 31, 1988,
the beginning of the measurement period.
12
<PAGE> 15
COMPENSATION COMMITTEE INTERLOCKS AND
INSIDER PARTICIPATION
The following non-employee directors serve on the Compensation Committee of
the Company's Board of Directors: Thomas M. Hyndman, Jr., Columbus O'D. Iselin,
Jr., David H. Davis, O'Donnell Iselin II, and John L. Schroder, Jr. Compensation
Committee members, Peter Iselin and O'Donnell Iselin II are beneficial owners of
5% or more of the Company's outstanding Common Stock. Except for Peter Iselin,
who has served as Vice President-Finance and Secretary of the Company since
1965, and William G. Kegel, who was President and Chief Executive Officer of the
Company from 1979 until 1988 and currently serves as a consultant to the
Company, no member of the Compensation Committee is a former or current officer
or employee of the Company. Mr. Hyndman is Of Counsel to a law firm which
provided legal services to the Company in 1993. Furthermore, no executive
officer of the Company serves as a member of a compensation committee of another
entity, one of whose executive officers serves on the Compensation Committee of
the Company or as a director of the Company, nor does any executive officer of
the Company serve as a director of another entity, one of whose executive
officers serves on the Compensation Committee of the Company.
SELECTION OF AUDITORS
Unless instructed to the contrary, the proxies solicited by the Board of
Directors will be cast for the selection of Ernst & Young, independent public
accountants, as the Company's auditors for the year ending December 31, 1994.
Ernst & Young has been regularly engaged by the Company for many years for audit
of accounts and other purposes for which its customary fees are paid. The
Company has been advised by Ernst & Young that none of its members has any
financial interest in the Company or its subsidiaries, nor has any of its
members had any connection during the past three years with the Company or any
of its parents or subsidiaries in the capacity of promoter, underwriter, voting
trustee, director, officer or employee. Selection of Ernst & Young, which is
recommended by the Board of Directors on the advice of its Audit Committee, will
require the affirmative vote of the holders of a majority of the shares
represented in person or by proxy at the Annual Meeting. It is not expected that
representatives of Ernst & Young will attend the Annual Meeting.
SHAREHOLDER PROPOSALS
Any shareholder who, in accordance with and subject to the provisions of
the proxy solicitation rules of the SEC, wishes to submit a proposal for
inclusion in the Company's proxy statement for the 1995 Annual Meeting of
Shareholders must deliver such proposal in writing to the Secretary of the
Company at the Company's office at 655 Church Street, Indiana, Pennsylvania,
15701 not later than December 5, 1994.
OTHER MATTERS
The Board of Directors does not intend to present to the Annual Meeting any
matters other than the matters referred to in the Notice of Annual Meeting and
at this date the Board of Directors does not know of any matter that will be
presented by other parties. However, if any other matter shall properly come
before the
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<PAGE> 16
Annual Meeting or any adjournment thereof, it is the intention of the persons
named in the enclosed form of proxy to vote on such matters in accordance with
their judgment.
By Order of the Board of
Directors,
PETER ISELIN, Secretary
April 4, 1994
- --------------------------------------------------------------------------------
SINGLE COPIES OF THE COMPANY'S 1993 ANNUAL REPORT ON SECURITIES AND EXCHANGE
COMMISSION FORM 10-K (WITHOUT EXHIBITS) WILL BE PROVIDED WITHOUT CHARGE TO
SHAREHOLDERS AFTER MARCH 31, 1994, UPON WRITTEN REQUEST DIRECTED TO THE VICE
PRESIDENT & GENERAL COUNSEL, ROCHESTER & PITTSBURGH COAL COMPANY, 655 CHURCH
STREET, INDIANA, PENNSYLVANIA, 15701.
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<PAGE> 17
PROXY
ROCHESTER & PITTSBURGH COAL COMPANY
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY FOR ANNUAL
MEETING OF SHAREHOLDERS TO BE HELD TUESDAY, MAY 3, 1994
The undersigned hereby appoints Thomas M. Hyndman, Jr., Norman S. Smith, and
O'Donnell Iselin II, or any of them, proxies of the undersigned with full power
of substitution, to vote all shares of Rochester & Pittsburgh Coal Company
which the undersigned is entitled to vote at the Annual Meeting of Shareholders
to be held at the principal office of the Company, 655 Church Street, Indiana,
Pennsylvania, on Tuesday, May 3, 1994, at 2:00 p.m., local time, and at any
adjournment thereof, as follows:
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES,
SEE REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN
ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE PROXIES CANNOT
VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
SEE REVERSE SIDE
<PAGE> 18
0511
/X/ PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE.
THE BOARD OF DIRECTORS RECOMMMENDS A VOTE FOR THE ITEMS PROPOSED BY ROCHESTER &
PITTSURGH COAL COMPANY LISTED BELOW. UNLESS OTHERWISE SPECIFIED THE VOTE
REPRESENTED BY THIS PROXY WILL BE CAST FOR ITEMS 1 AND 2.
1. Election of Directors
FOR all nominess (except as marked to the contrary below) / /
WITHHOLD AUTHORITY to vote for all nominees / /
NOMINEES:
L. Blaine Grube
Peter Iselin
William G. Kegel
Gordon B. Whelpley, Jr.
To withhold authority to vote for any indivdual nominee(s), write name(s) of
such nominee(s) in the space provided below:
________________________________________________
2. Selection of Ernst & Young as Independent Auditors of Rochester & Pittsburgh
Coal Company for 1994
FOR AGAINST ABSTAIN
/ / / / / /
3. In their discretion, upon such other matters as may properly come before the
meeting and any adjournment thereof.
PLEASE SIGN HERE exactly as your name appears on this Proxy. For joint
accounts, each joint owner should sign. When signing as attorney, executor,
administrator, trustee, guardian or other fiduciary, please give full title. If
the signer is a corporation, please sign full corporate name by duly authorized
officer.
____________________________________
____________________________________
SIGNATURE(S)____________________DATE
