<PAGE> 1
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:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to
sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
Rochester & Pittsburgh Coal Company
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Rochester & Pittsburgh Coal Company
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $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 transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / 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 registration 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:
------------------------------------------------------------------------
<PAGE> 2
ROCHESTER & PITTSBURGH COAL COMPANY
INDIANA, PENNSYLVANIA 15701
------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON TUESDAY, MAY 2, 1995
------------------------------------
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 2, 1995, at 2:00 o'clock in the
afternoon, local time, for the following purposes:
1. To elect four Class B 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 LLP,
independent public accountants, as the Company's auditors for the year
ending December 31, 1995.
3. To transact such other business as may properly come before the
Annual Meeting and any adjournment, postponement or continuation thereof.
Shareholders of record at the close of business on March 3, 1995, 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, 1994, 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 3, 1995
<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 2, 1995,
and at any adjournment, postponement or continuation 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 3, 1995.
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 LLP, independent public accountants, as the Company's auditors for the
year ending December 31, 1995. 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. A proxy may also be revoked by furnishing a duly executed proxy
bearing a later date to the Secretary of the Company or by attending the Annual
Meeting and voting in person.
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 personally or by telephone or telegram by the Company's
regular officers and employees, none of whom will receive special compensation
for such services. 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
3, 1995, 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 3, 1995, 3,439,275 shares of Common Stock of the Company were outstanding.
<PAGE> 4
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth, as of March 3, 1995, 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>
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. ................ 4,231
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)............... 1,796,472 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, individually 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 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) reports received by it, and
written representations from the Company's officers, directors, and greater than
10% shareholders, the Company believes that during 1994 all filing requirements
applicable to its officers, directors, and greater than 10% shareholders were
met.
DIRECTORS AND NOMINEES FOR ELECTION AS DIRECTOR
Four Class B 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 voting shall be elected.
3
<PAGE> 6
The names of the nominees for Class B Directors, all of whom are presently
Directors, 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).................... 63 Independent Consultant -- Aerospace and 1967 1998*
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)........... 83 Coal Consultant; Retired Division 1976 1998*
President (1962-1971), Corporate Vice
President (1964-1975), Consolidation Coal
Company
John L. Schroder, Jr.(1)....... 76 Retired; Dean, College of Mineral and 1983 1998*
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)....... 55 President and Chief Executive Officer of 1988 1998*
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>
---------------
* If elected at the meeting
The names of the Class A 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 A DIRECTORS
<TABLE>
<CAPTION>
YEAR
TERM
DIRECTOR WILL
NAME AGE PRINCIPAL OCCUPATION SINCE EXPIRE
------------------------------- --- ------------------------------------------ -------- ------
<S> <C> <C> <C> <C>
L. Blaine Grube(3)(4).......... 78 Retired; Vice President and Treasurer of 1986 1997
the Company (1976-1986)
Peter Iselin(1)(2)............. 74 Vice President-Finance and Secretary of 1954 1997
the Company since 1965
William G. Kegel(1)(3)......... 73 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).................... 41 Project Manager since 1986 -- Louis E. Lee 1987 1997
Co. Builders, Commercial and Residential
Contractors; Independent Consultant -- Oil
and Gas (1985-1986)
</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)................. 70 Of Counsel since 1993, Partner 1972 1996
(1957-1992), Duane, Morris & Heckscher,
Attorneys at Law(5)
Norman S. Smith(4)............. 63 Professor Emeritus of Mining Engineering, 1979 1996
Professor of Mining Engineering
(1992-1994), Associate Professor of Mining
Engineering (1979-1992), University of
Missouri-Rolla
O'Donnell Iselin II(1)(2)(4)... 41 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 "Compensation
Committee Interlocks and Insider Participation". During 1994, the Compensation
Committee met three times.
(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 1994, the Audit Committee met twice.
(5) The law firm to which Mr. Hyndman is Of Counsel rendered legal services
to the Company during 1994.
There is no nominating committee of the Board of Directors. During 1994,
the Board of Directors held ten meetings. During 1994, 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 served.
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 1994, 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 1994, under terms of the Agreement, as amended, Mr. Kegel was paid, as
deferred compensation, an aggregate of $59,801. The Agreement, as amended,
provides for aggregate payments of $538,211 in 108 equal consecutive monthly
installments which commenced in January 1990, and will continue through December
1998.
EXECUTIVE COMPENSATION
The following table sets forth the compensation for the past three years of
each of the Company's five most highly compensated executive officers, including
the Chief Executive Officer, (collectively the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
OTHER
ANNUAL COMPENSATION ANNUAL ALL OTHER
----------------------------- COMPENSA- COMPENSA-
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) TION($) TION($)
---------------------------------------- ----- --------- -------- --------- ---------
<S> <C> <C> <C> <C> <C>
Thomas W. Garges, Jr.................... 1994 314,521 54,500 (2) 7,805(6)
President and Chief Executive 1993 301,600 94,000 (3) 6,780(5) 7,828(6)
Officer(1)
1992 295,800 155,000 (4) 6,829(6)
A. W. Petzold........................... 1994 172,137 5,000 (2) 750(7)
Vice President-Operations 1993 165,150 20,000 (3) 3,390(5) 750(7)
1992 161,975 50,000 (4) 750(7)
George M. Evans......................... 1994 156,773 15,000 (2) 2,750(8)
Vice President and Treasurer 1993 150,280 25,000 (3) 3,390(5) 2,750(8)
1992 147,390 50,000 (4) 1,750(8)
W. Joseph Engler, Jr. .................. 1994 143,708 12,000 (2) 2,750(8)
Vice President and General Counsel 1993 137,800 20,000 (3) 3,390(5) 2,750(8)
1992 135,150 50,000 (4) 1,750(8)
Thomas M. Majcher....................... 1994 142,358 10,000 (2) 750(7)
Vice President-Corporate Development 1993 136,500 20,000 (3) 3,390(5) 750(7)
1992 133,875 50,000 (4) 750(7)
</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 $37,500 and 500 shares of the
Company's Common Stock having a value of $17,000 on the date of issue to Mr.
Garges. Mr. Garges will be responsible for payment of taxes on the value of the
stock award. The figure represents cash bonuses of $15,000 paid to Mr. Evans,
$5,000 paid to Mr. Petzold, $12,000 paid to Mr. Engler, and $10,000 paid to Mr.
Majcher.
(3) 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. Mr. Garges will be responsible for payment of taxes on the value of the
stock award. The figure represents cash bonuses of $25,000 paid to Mr. Evans and
$20,000 paid to each of Messrs. Petzold, Engler, and Majcher.
(4) 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
6
<PAGE> 9
250 shares of the Company's Common Stock having a value of $10,000 on the date
of issue to each of Messrs. Petzold, Evans, Engler, and Majcher. Amounts
reimbursed by the Company 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.
(5) The figure represents payment of taxes by the Company in 1993 on the
value of stock awards issued as 1992 bonuses. See Note (4) above.
(6) The 1994 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 $6,491 in
Directors' fees paid by the Company and certain of its subsidiaries. The 1993
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 $6,514 in Directors' fees paid by the
Company and 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 and certain of
its subsidiaries.
(7) The figure represents the Company's contribution to the 401(k) Plan.
(8) The 1994 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 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 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.
7
<PAGE> 10
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 (the "Code"), 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 becomes 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 1995:
<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
OF MANAGEMENT SERVICE YEARS 20 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
</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, 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.
8
<PAGE> 11
The information in the foregoing table does not reflect certain limitations
imposed on qualified plans by 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 $120,000,
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 positions 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.
Effective July 1, 1994, the Compensation Committee, on the recommendation
of the Chief Executive Officer, approved salary increases of 3% for the Named
Executive Officers of the Company, other than the Chief Executive Officer. At
the same time, the Committee also approved a salary increase for the Chief
Executive Officer of the Company of 3%. The percentage of increase approximated
the increase in the cost of living over the previous twelve months and is
consistent with the increases granted to other officers and salaried employees
in 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
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<PAGE> 12
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
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
the 1992 Agreement. See "Employment Agreements". Under the terms of the 1992
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 base salaries of the other Named
Executive Officers, except that it does not have the recommendation of the Chief
Executive Officer. As stated above, the Committee approved a 3% increase in the
Chief Executive Officer's salary effective July 1, 1994.
The Company's practice is also to pay an annual bonus to the Chief
Executive Officer which is determined in the discretion of the Committee. The
Committee takes into account all considerations which it deems appropriate,
including the criteria used in determining the other Named Executive Officers'
bonuses.
The Company's net income declined substantially in 1994. In particular, the
Company's coal mining subsidiary corporations did not perform well for a variety
of reasons. The extreme cold and heavy snowfall experienced in the winter of
1994 affected adversely both the Keystone Coal Mining Corporation and the
Helvetia Coal Company. The effects of the lengthy UMWA strike in 1993 delayed
the timely start-up of two new mines, the development of new areas in existing
mines and the installation of a new portal facility in an existing mine. The
tonnage delivered to the Keystone Generating Station also was affected adversely
by difficulties with modifications to the cleaning plant, three major roof
collapses over the main underground conveyor belts, a storage bin failure and
unexpected mechanical design problems with three new continuous haulage systems.
In addition, Helvetia Coal Company was unable to achieve anticipated
improvements in mining productivity thereby reducing its anticipated operating
profits.
On the more positive side, the Company's management under the leadership of
the Chief Executive Officer concluded a new coal supply agreement during 1994
with the owners of the Homer City Generating Station under which the Company's
subsidiary, Helvetia Coal Company, will provide an aggregate of 14,000,000 tons
of coal to the Homer City Generating Station through the year 2003 and to reach
agreement with Helvetia's UMWA employees for an alternate work schedule which
should improve efficiency and reduce costs and without which the new Homer City
coal supply agreement would not have been possible.
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<PAGE> 13
Work on Mine No. 84 in Washington County, Pennsylvania, which was acquired
from Bethlehem Steel Corporation in December 1992, is progressing
satisfactorily. The mine is now producing and shipping coal from development
sections.
Each of these factors, as well as the performance during the year of each
of the Named Executive Officers and the recommendations of the Chief Executive
Officer (for all Named Executive Officers other than himself) were taken into
consideration in fixing the amounts of the bonuses paid to the Chief Executive
Officer and the other Named Executive Officers. It was the opinion of the
Committee that, under the circumstances, the Named Executive Officers, including
the Chief Executive Officer, had performed well during 1994. However, in every
case, primarily because of the reduced operating profit of the Company, the
bonuses paid were significantly less than those paid in 1993. For example, the
bonus paid the Chief Executive Officer was reduced from $94,000 (consisting of
$75,000 cash and 500 shares of the Company's Common Stock) in 1993 to $54,000
(consisting of $37,000 cash and 500 shares of the Company's Common Stock) for
1994.
The 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 provisions of Section 162(m) of the Code given their current
compensation levels. The 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 would be 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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<PAGE> 14
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>
1989 100.00 100.00 100.00
1990 111.00 97.00 115.00
1991 106.00 126.00 153.00
1992 95.00 136.00 105.00
1993 101.00 150.00 108.00
1994 94.00 152.00 107.00
</TABLE>
Assumes $100 invested on December 31, 1989 in the Company's Common Stock, the
S&P 500 Index and a Peer Group Index.
* Calendar year ended December 31
The Peer Group Index consists of 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, 1989,
the beginning of the measurement period.
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<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. 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 Chairman of the Board and as a
consultant to the Company, no member of the 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 1994. 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 LLP, independent
public accountants, as the Company's auditors for the year ending December 31,
1995. Ernst & Young LLP 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 LLP 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 LLP, 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 LLP 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 1996 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 4, 1995.
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, postponement or continuation 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 3, 1995
--------------------------------------------------------------------------------
SINGLE COPIES OF THE COMPANY'S 1994 ANNUAL REPORT ON SECURITIES AND EXCHANGE
COMMISSION FORM 10-K (WITHOUT EXHIBITS) WILL BE PROVIDED WITHOUT CHARGE TO
SHAREHOLDERS AFTER MARCH 31, 1995, 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
ROCHESTER & PITTSBURGH COAL COMPANY
P PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE COMPANY FOR ANNUAL MEETING OF SHAREHOLDERS TO BE HELD
R
O TUESDAY, MAY 2, 1995
X The undersigned hereby appoints L. Blaine Grube, Peter Iselin, William G.
Kegel, and Gordon B. Whelpley, Jr., or any of them, proxies of the
Y 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 2, 1995, at 2:00 p.m., local time, and at any adjournment,
postponement or continuation 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
/X/ Please mark your votes as in this example.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ITEMS PROPOSED BY ROCHESTER &
PITTSBURGH 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 nominees (except as marked to the contrary below) / /
WITHHOLD AUTHORITY to vote for all nominees / /
TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE(S), STRIKE A LINE
THROUGH THE NOMINEE(S) NAME IN THE LIST BELOW:
Nominees: Columbus O'D. Iselin, Jr. John L. Schroder, Jr.
David H. Davis Thomas W. Garges, Jr.
2. Selection of Ernst & Young LLP as Independent Auditors of Rochester &
Pittsburgh Coal Company for 1995
FOR AGAINST ABSTAIN
/ / / / / /
3. In their discretion, open such other matters as may properly come before
the meeting and any adjournment, postponement or continuation 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 _____________________________________________________
