<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)
- --------------------------------------------------------------------------------
(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 7, 1996
------------------------------------
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 7, 1996, at 2:00 o'clock in the
afternoon, local time, for the following purposes:
1. To elect two Class C 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, 1996.
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 8, 1996, 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, 1995, 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 12, 1996
<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 7, 1996,
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 12, 1996.
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. Unless otherwise indicated, a proxy 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, 1996. 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 in person 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
8, 1996, 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 such votes, in any manner, 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 8, 1996, 3,440,984 shares of Common Stock of
the Company were outstanding.
As of March 8, 1996, Peter Iselin, Emile I. Wiggin and O'Donnell Iselin II
were collectively the beneficial owners of 1,749,665 shares of the Company's
Common Stock, or approximately 50.8% of the Company's outstanding Common Stock.
Such persons have advised the Company that they will vote their shares for the
election of Thomas M. Hyndman, Jr., and O'Donnell Iselin II as Directors, and
for the selection of Ernst & Young LLP as auditors for the Company for 1996.
Accordingly, Thomas M. Hyndman, Jr., and O'Donnell Iselin II are virtually
certain of being elected as Directors and Ernst & Young will be selected as
auditors for the Company for 1996, regardless of the votes of the Company's
shareholders other than Peter Iselin, Emile I. Wiggin and O'Donnell Iselin II.
<PAGE> 4
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth, as of March 8, 1996, 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:(5)
David H. Davis........................ 2,863
Thomas W. Garges, Jr. ................ 5,940
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
Gordon B. Whelpley, Jr. .............. 21,796
EXECUTIVE OFFICERS:(6)
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 (14 persons)............... 1,798,113 52.3%
</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 Stock
of the Company over which Peter Iselin, Emilie I. Wiggin, and O'Donnell Iselin
II, individually or together, exercise voting power or investment power,
adjusted, however, to eliminate repeated reporting of shares so as not to
overstate the aggregate beneficial ownership of such persons.
2
<PAGE> 5
(4) Under the rules of the SEC, the maximum number of shares of the
Company's Common Stock that Peter Iselin, Emilie I. Wiggin, and O'Donnell Iselin
II, individually could be deemed to beneficially own is 1,713,161 shares
(49.8%), 1,646,633 shares (47.8%), and 909,050 shares (26.4%), respectively.
(5) Excludes Directors listed under 5% Holders.
(6) Excludes Executive Officers listed under Directors.
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 1995 all filing requirements
applicable to its officers, directors, and greater than 10% shareholders were
met.
DIRECTORS AND NOMINEES FOR ELECTION AS DIRECTOR
Two Class C 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 two nominees named
below, both 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 insofar as
they will not represent votes cast for the purpose of electing Directors. The
two nominees for Director receiving the highest number of votes from the
shareholders voting shall be elected.
The names of the nominees for Class C Directors, both of whom are presently
Directors, and certain information regarding them are:
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)................. 71 Of Counsel since 1993, Partner 1972 1999*
(1957-1992), Duane, Morris & Heckscher,
Attorneys at Law(5)
O'Donnell Iselin II(1)(2)(4)... 42 Manager, Finance Staff, Hughes Electronics 1983 1999*
Corporation since 1989
</TABLE>
- ---------------
* If elected at the meeting
3
<PAGE> 6
The names of the Class A and Class B 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).......... 79 Retired Vice President and Treasurer of 1986 1997
the Company
Peter Iselin(1)(2)............. 75 Vice President -- Finance and Secretary of 1954 1997
the Company since 1965
William G. Kegel(1)(3)......... 74 Chairman of the Board of the Company; 1973 1997
Retired President and Chief Executive
Officer of the Company
Gordon B. Whelpley,
Jr.(2)(4).................... 42 Project Manager since 1986 -- Louis E. Lee 1987 1997
Co. Builders, Commercial and Residential
Contractors
</TABLE>
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).................... 64 Independent Consultant -- Aerospace and 1967 1998
Defense
David H. Davis(1)(4)........... 84 Coal Consultant 1976 1998
John L. Schroder, Jr.(1)....... 77 Retired Dean, College of Mineral and 1983 1998
Energy Resources, West Virginia University
Thomas W. Garges, Jr.(3)....... 56 President and Chief Executive Officer of 1988 1998
the Company since October 1988
</TABLE>
- ---------------
(1) Member, Compensation Committee. The Compensation Committee, composed of
seven Directors, administers the Company's Key Executives Incentive Compensation
Plan (the "Incentive Plan"), recommends certain executives for participation in
such plan and bonuses to be paid pursuant thereto, and considers and recommends
compensation arrangements for executive personnel. See "Compensation Committee
Interlocks and Insider Participation". During 1995, 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 six
Directors, recommends the selection of independent auditors, reviews the regular
annual audits, and performs such other functions related to accounting and
auditing as determined by the Audit Committee or the Board of Directors. During
1995, the Audit Committee met twice.
4
<PAGE> 7
(5) The law firm to which Mr. Hyndman is Of Counsel rendered legal services
to the Company during 1995.
There is no nominating committee of the Board of Directors. During 1995,
the Board of Directors held ten meetings. During 1995, 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, except Messrs. Davis and
O'Donnell Iselin II because of health reasons and scheduling conflicts,
respectively. Both Messrs. Davis and O'Donnell Iselin II attended 66% of the
aggregate number of Board and committee meetings.
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 serve as a Director, Chairman of the
Board, and as an independent consultant to the Company. In 1995, 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 1995, 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 $538,211 in 108 equal consecutive monthly installments which commenced in
January 1990, and will continue through December 1998.
5
<PAGE> 8
EXECUTIVE COMPENSATION
The following table sets forth the compensation for the past three years of
each of the Company's five most highly compensated executive officers, including
the Chief Executive Officer, (collectively the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
OTHER
ANNUAL COMPENSATION ANNUAL ALL OTHER
------------------------------- COMPENSA- COMPENSA-
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) TION($) TION($)
- ----------------------------------------- ----- --------- -------- --------- ---------
<S> <C> <C> <C> <C> <C>
Thomas W. Garges, Jr..................... 1995 319,900 50,000(2) 7,805(6)
President and Chief Executive 1994 314,521 54,500(3) 7,805(6)
Officer(1) 1993 301,600 94,000(4) 6,780(5) 7,828(6)
A. W. Petzold............................ 1995 175,000 5,000(2) 750(7)
Vice President-Operations 1994 172,137 5,000(3) 750(7)
1993 165,150 20,000(4) 3,390(5) 750(7)
George M. Evans.......................... 1995 159,500 15,000(2) 2,750(8)
Vice President and Treasurer 1994 156,773 15,000(3) 2,750(8)
1993 150,280 25,000(4) 3,390(5) 2,750(8)
W. Joseph Engler, Jr..................... 1995 146,200 15,000(2) 2,750(8)
Vice President and General Counsel 1994 143,708 12,000(3) 2,750(8)
1993 137,800 20,000(4) 3,390(5) 2,750(8)
Thomas M. Majcher........................ 1995 144,800 15,000(2) 750(7)
Vice President-Corporate Development 1994 142,358 10,000(3) 750(7)
1993 136,500 20,000(4) 3,390(5) 750(7)
</TABLE>
- ---------------
(1) Mr. Garges is employed pursuant to the terms of an Employment
Agreement. See "Employment Agreements".
(2) The figure includes a bonus of 1,709 shares of the Company's Common
Stock having a value of $50,000 on the date of issue to Mr. Garges. In February
1996, Mr. Garges received a cash payment of $40,710 to cover income taxes. Such
amount will be reported in the Company's Proxy Statement in connection with its
1997 Annual Meeting of Shareholders under the caption "Other Annual
Compensation". The figure represents cash bonuses of $5,000 paid to Mr. Petzold
and $15,000 paid to each of Messrs. Evans, Engler, and Majcher.
(3) 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.
(4) 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.
(5) The figure represents payment of taxes by the Company in 1993 on the
value of stock awards issued as 1992 bonuses.
6
<PAGE> 9
(6) The 1995 and 1994 figures include 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.
(7) The figure represents the Company's contribution to the 401(k) Plan.
(8) The figures include the Company's $750 contribution to the 401(k) Plan
and $2,000 in Directors' fees paid by two of the Company's subsidiaries.
-------------------
EMPLOYMENT AGREEMENTS
In 1993, the Company entered into an Employment Agreement with Mr. Garges,
effective as of May 1, 1992 (the "1992 Agreement"). Under the 1992 Agreement,
Mr. Garges's term of employment is for a period of three years and, until notice
of termination is given by either party, the period of 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 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 (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.
7
<PAGE> 10
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 1996:
<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.
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.
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 11 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 Chief Executive Officer and the
other Named Executive Officers. The Committee has furnished the following report
in fulfillment of the SEC's requirement:
8
<PAGE> 11
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 the executive officers, including
the Named Executive Officers. The Committee's normal practice has been to adjust
these salaries annually as of July 1st of each year. In fixing the compensation
of the Company's executive officers, 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, (f) the general
rates of compensation increases granted to other employees within the Company,
and (g) any other particular considerations which may be deemed appropriate by
the Committee.
Because of the poor operating results achieved by the Company during the
first six months of 1995 which resulted in a loss for the year ended December
31, 1995, the Committee determined that any salary adjustments for the Company's
executive officers, including the Chief Executive Officer, should be deferred
until January 1996, and that salary adjustments, if any, for these executive
officers should be considered in January (not July) of each subsequent year.
Salary adjustments for the Company's executive officers, including the Named
Executive Officers, were postponed until January, 1996. Therefore, no changes
were made in the salaries paid to the Named Executive Officers of the Company
during 1995. The salaries shown in the "Summary Compensation Table" for 1995
exceed slightly the salaries shown for 1994 because of increases granted in July
1994. As of January 1, 1996, the salaries of the Named Executive Officers were
increased by amounts ranging from 3% to 5%, and in the case of the Chief
Executive Officer, 3%. For the most part, the percentage increase approximated
the increase in the cost of living since July 1, 1994 and are consistent with
the increases granted to the Company's other officers and salaried employees in
1995.
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. Bonuses paid pursuant to the Incentive Plan are based upon the achievement
of the goals established for the year. These bonuses 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
bonuses award under the Incentive Plan annually. In 1995, the total of all
bonuses paid under the Incentive Plan was $48,000.
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 the Company's 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
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<PAGE> 12
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
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 has discretionary authority to set the annual base
salary for the Chief Executive Officer above a contractual minimum ($300,000).
In fixing the Chief Executive Officer's annual base salary, the Committee takes
into account all of the considerations referred to above in fixing salaries of
the other Named Executive Officers, except that it does not have the
recommendation of the Chief Executive Officer. Because of the Company's
operating losses during 1995, no salary increase was granted to the Chief
Executive Officer in 1995. However, as indicated earlier, effective January 1,
1996, the Chief Executive Officer was granted a salary increase of 3%.
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 bonuses of other Named Executive
Officers.
The Company suffered a loss for 1995 for a variety of reasons which
included continuing operating problems and lagging productivity at the Keystone
and Helvetia mines. However, significant steps were taken during 1995 to improve
performance at these mines including the closing of three high-cost Keystone
mines. The coal which had been produced at these mines is being replaced with
raw coal purchased from third-party suppliers for processing at the Keystone
Cleaning Plant. In addition, two continuous haulage units used in the mines now
closed have been moved into other operating Keystone mines, and one new haulage
system has been installed at another Keystone mine. One additional continuous
haulage unit has been installed in the Helvetia mines. These changes should
result in improved operations in both the Keystone and Helvetia mines in 1996.
Furthermore, Mine 84 installed its first longwall unit which became operational
in September 1995. In fact, during the last five months of 1995, the Company
operated at a profit, reducing significantly losses incurred during the first
seven months of 1995.
As a result, the Committee concluded it was appropriate to pay bonuses to
each of the Named Executive Officers, including the Chief Executive Officer, for
1995. In fixing the amount of the bonuses, the recommendations of the Chief
Executive Officer (for all Named Executive Officers other than the Chief
Executive Officer) were considered. In the case of the Chief Executive Officer,
the bonus paid to him was limited to 1,709 shares of the Company's stock plus a
cash amount required to cover income taxes. The 1,709 shares distributed to the
Chief Executive Officer were valued at $29.25 per share or approximately
$50,000. The Chief Executive Officer was also paid $40,710 to cover income taxes
on receipt of such shares.
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 WILLIAM G. KEGEL
COLUMBUS O'D. ISELIN, JR. THOMAS M. HYNDMAN, JR.
JOHN L. SCHRODER, JR. O'DONNELL ISELIN II
PETER ISELIN
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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 INDEX PEER GROUP
(FISCAL YEAR COVERED) COAL COMPANY INDEX
<S> <C> <C> <C>
1990 100 100 100
1991 96 130 133
1992 85 140 91
1993 91 155 93
1994 85 157 93
1995 73 215 66
</TABLE>
Assumes $100 invested on December 31, 1990 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, 1990,
the beginning of the measurement period.
11
<PAGE> 14
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 1995. Furthermore, no executive
officer of the Company serves as a member of a compensation committee of another
entity, an executive officer of which 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, an executive officer of which
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,
1996. 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 1997 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 10, 1996.
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<PAGE> 15
OTHER MATTERS
The Board of Directors does not intend to present at 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 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 12, 1996
- --------------------------------------------------------------------------------
SINGLE COPIES OF THE COMPANY'S 1995 ANNUAL REPORT ON SECURITIES AND EXCHANGE
COMMISSION FORM 10-K (WITHOUT EXHIBITS) WILL BE PROVIDED WITHOUT CHARGE TO
SHAREHOLDERS AFTER APRIL 15, 1996, UPON WRITTEN REQUEST DIRECTED TO THE VICE
PRESIDENT & GENERAL COUNSEL, ROCHESTER & PITTSBURGH COAL COMPANY, 655 CHURCH
STREET, INDIANA, PENNSYLVANIA, 15701.
13
<PAGE> 16
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 7, 1996
The undersigned hereby appoints Columbus O'D. Iselin, Jr., David H. Davis, John
L. Schroder, Jr., and Thomas W. Garges, Jr., 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 7, 1996, 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> 17
/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 the election of the nominees named
below and FOR Item 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: Thomas M. Hyndman, Jr.
O'Donnell Iselin II
2. Selection of Ernst & Young LLP as Independent Auditors of Rochester &
Pittsburgh Coal Company for 1996
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.
SIGNATURE(S) _________________________________________ DATE __________________
NOTE: Please sign 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.
