UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
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[ ] Soliciting Material Pursuant to Section 240.14a-12
The Brink's Company
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(Name of Registrant as Specified In Its Charter)
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[THE BRINK'S COMPANY LOGO] The Brink's Company
1801 Bayberry Court
P.O. Box 18100
Richmond, VA 23226-8100
MICHAEL T. DAN
Chairman,
President and Chief Executive Officer
March 25, 2005
To Our Shareholders:
You are cordially invited to attend the annual meeting of shareholders of
The Brink's Company to be held at the InterContinental The Barclay New York, 111
East 48th Street, New York, New York, on Friday, May 6, 2005, at 1:00 p.m.,
local time.
You will be asked to: (i) elect one director for a term of one year and
three directors for a term of three years; (ii) approve independent public
accountants for 2005; (iii) approve the material terms of the performance goals
under The Brink's Company Management Performance Improvement Plan; and
(iv) approve The Brink's Company 2005 Equity Incentive Plan.
It is important that you vote, and we urge you to complete, sign, date and
return the enclosed proxy in the envelope provided.
We appreciate your prompt response and cooperation.
Sincerely,
/s/ Michael Dan
[THE BRINK'S COMPANY LOGO]
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 6, 2005
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Notice Is Hereby Given that the annual meeting of shareholders of THE
BRINK'S COMPANY will be held on May 6, 2005, at 1:00 p.m., local time, at the
InterContinental The Barclay New York, 111 East 48th Street, New York, New York,
for the following purposes:
1. To elect one director for a term expiring in 2006 and three directors
for a term expiring in 2008.
2. To approve the selection of KPMG LLP as independent public
accountants to audit the accounts of the Company and its subsidiaries for
the year 2005.
3. To approve the material terms of the performance goals under The
Brink's Company Management Performance Improvement Plan.
4. To approve The Brink's Company 2005 Equity Incentive Plan set forth
as Exhibit A.
5. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The close of business on March 15, 2005 has been fixed as the record date
for determining the shareholders entitled to notice of and to vote at the annual
meeting.
Whether or not you expect to attend the annual meeting in person, please
complete, date and sign the enclosed proxy and return it in the enclosed
envelope, which requires no additional postage if mailed in the United States.
We appreciate your prompt response.
Austin F. Reed
Secretary
March 25, 2005
The Annual Report to Shareholders, including financial statements, is being
mailed to shareholders, together with these proxy materials, commencing on or
about March 25, 2005.
YOUR VOTE IS IMPORTANT. PLEASE MARK, SIGN, DATE AND MAIL THE ENCLOSED PROXY CARD
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING. A RETURN ENVELOPE IS
ENCLOSED FOR YOUR CONVENIENCE.
THE BRINK'S COMPANY
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of The Brink's Company (the "Company") of proxies from
holders of the Company's common stock (hereinafter "Brink's Common Stock"), to
be voted at the annual meeting of shareholders to be held on May 6, 2005, at
1:00 p.m., local time, at the InterContinental The Barclay New York, 111 East
48th Street, New York, New York (and at any adjournment thereof), for the
purposes set forth in the accompanying notice of such meeting.
The close of business on March 15, 2005, has been fixed as the record date
for determining the shareholders entitled to notice of and to vote at the annual
meeting, and only shareholders of record at the close of business on that date
will be entitled to vote at the meeting and any adjournment thereof. On March
15, 2005, the Company had outstanding 56,734,041 shares of Brink's Common Stock,
the holders thereof being entitled to one vote per share on all matters that the
Board of Directors knows will be presented for consideration at the annual
meeting.
This Proxy Statement and the accompanying form of proxy and Annual Report to
Shareholders are being mailed to shareholders commencing on or about March 25,
2005. The mailing address of the principal executive office of the Company is
1801 Bayberry Court, P.O. Box 18100, Richmond, VA 23226-8100.
The election of directors, the selection of independent public accountants,
the approval of the material terms of the performance goals under The Brink's
Company Management Performance Improvement Plan and the approval of The Brink's
Company 2005 Equity Incentive Plan are the only matters that the Board of
Directors knows will be presented for consideration at the annual meeting. The
shares of Brink's Common Stock represented by proxies solicited by the Board of
Directors will be voted in accordance with the recommendations of the Board of
Directors on these matters unless otherwise specified in the proxy, and where
the person solicited specifies a choice with respect to any matter to be acted
upon, the shares of Brink's Common Stock will be voted in accordance with the
specification so made. As to any other business that may properly come before
the annual meeting, it is intended that proxies in the enclosed form will be
voted in respect thereof in accordance with the judgment of the person voting
the proxies.
The Company's bylaws provide that the chairman of the annual meeting will
determine the order of business at the annual meeting and the voting and other
procedures to be observed. The chairman is authorized to declare whether any
business is properly brought before the annual meeting, and business not
properly brought before the annual meeting will not be transacted.
The enclosed proxy is revocable at any time prior to its being voted by
filing an instrument of revocation or a duly executed proxy bearing a later
time. A proxy may also be revoked by attendance at the annual meeting and voting
in person. Attendance at the annual meeting will not by itself constitute a
revocation.
Votes cast by shareholders will be treated as confidential in accordance
with a policy approved by the Board of Directors. Shareholder votes at the
annual meeting will be tabulated by the Company's transfer agent, EquiServe
Trust Company, N.A.
CORPORATE GOVERNANCE
BOARD OF DIRECTORS
The Board of Directors has the responsibility for establishing broad
corporate policies and for the overall performance of the Company, exercising
their good faith business judgment of the best interests of the Company. Members
of the Board are kept informed of the Company's business by various reports sent
to them regularly, as well as by operating and financial reports made at Board
and Committee meetings by the President and Chief Executive Officer and other
officers and members of management. During 2004, the Board met six times.
AUDIT AND ETHICS COMMITTEE
The Audit and Ethics Committee (the "Audit Committee"), established in
accordance with section 3(a)(58)(A) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), oversees the integrity of regular financial
reports and other financial information provided by the Company to the
Securities and Exchange Commission (the "SEC") or the public, recommends the
selection by shareholders at their annual meeting of a firm of independent
public accountants, confers with the Company's independent public accountants to
review the plan and scope of their proposed audit as well as their findings and
recommendations upon the completion of the audit, and meets with the independent
public accountants and with appropriate Company financial personnel and internal
auditors regarding the Company's internal controls, practices and procedures.
The Audit Committee also oversees the Company's legal and business ethics
compliance programs. The Audit Committee currently consists of Mr. Sloane, as
Chairman, and Messrs. Barker, Breslawsky, Brinzo and Gross, none of whom is an
officer or employee of the Company or any of its subsidiaries. The Board has
examined the composition of the Audit Committee and found the members to meet
the independence requirements set forth in the listing standards of the New York
Stock Exchange. The Board of Directors has identified James R. Barker, Marc C.
Breslawsky, John S. Brinzo, Ronald M. Gross and Carl S. Sloane as "Audit
Committee financial experts" as that term is defined in the rules promulgated by
the SEC pursuant to the Sarbanes-Oxley Act of 2002. None of the Company's Audit
Committee members simultaneously serve on more than one other public company
audit committee. The Audit Committee met eleven times during 2004.
The Audit Committee has adopted procedures for pre-approving certain
specific audit and non-audit services provided by the independent auditor. The
pre-approved services are described in detail under three categories: audit and
audit-related, tax services and agreed upon procedures. Requests for services
are reviewed by the Company's Legal Department and Finance Department to ensure
that they satisfy the requirements of the pre-approval policy. The Audit
Committee is provided a detailed update at each regular meeting as to
independent auditor engagements.
COMPENSATION AND BENEFITS COMMITTEE
The Compensation and Benefits Committee (the "Compensation Committee") is
responsible for establishing and reviewing policies governing salaries,
incentive compensation and the terms and conditions of employment of senior
executives and other key employees of the Company, in addition to oversight of
the Company's stock option plans for employees and similar plans which may be
maintained from time to time by the Company. The Compensation Committee
currently consists of Mr. Barker, as Chairman, and Messrs. Ackerman, Broadhead
and Grinstein, none of whom is an officer or employee of the Company or any of
its subsidiaries. The Board has examined the composition of the Compensation
Committee and found the members to meet the independence requirements set forth
in the listing standards of the New York Stock Exchange. The Compensation
Committee met four times during 2004.
CORPORATE GOVERNANCE AND NOMINATING COMMITTEE
The Corporate Governance and Nominating Committee (the "Corporate Governance
Committee") oversees the governance of the Company and recommends to the Board
nominees for election as
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directors and as senior executive officers of the Company, as well as reviewing
the performance of incumbent directors in determining whether to recommend them
to the Board for renomination. The Corporate Governance Committee currently
consists of Mr. Gross, as Chairman, Mrs. Alewine and Messrs. Grinstein and
Turner, none of whom is an officer or employee of the Company or any of its
subsidiaries. The Board has examined the composition of the Corporate Governance
Committee and found the members to meet the independence requirements set forth
in the listing standards of the New York Stock Exchange. The Corporate
Governance Committee met six times during 2004.
FINANCE COMMITTEE
The Finance Committee recommends to the Board dividend and other actions and
policies regarding the financial affairs of the Company, including those
relating to matters that may affect the financial strength of the Company. The
Finance Committee currently consists of Mr. Ackerman, as Chairman, and Messrs.
Breslawsky, Brinzo and Turner, none of whom is an officer or employee of the
Company or any of its subsidiaries. The Finance Committee met four times during
2004.
PENSION COMMITTEE
The Pension Committee is responsible for the oversight of the Company's
Pension-Retirement Plan and 401(k) Plan and any similar plans that may be
maintained from time to time by the Company. The Pension Committee also has
general oversight responsibility for pension plans maintained by foreign and
other subsidiaries of the Company. The Pension Committee has authority to adopt
amendments to the Company's Pension-Retirement Plan, Pension Equalization Plan
and 401(k) Plan. In carrying out these responsibilities, the Pension Committee
coordinates with the appropriate financial, legal and administrative personnel
of the Company, including the Company's Administrative Committee, as well as
outside experts retained in connection with the administration of those plans.
The Pension Committee currently consists of Mr. Broadhead, as Chairman, Mrs.
Alewine and Mr. Sloane, none of whom is an officer or employee of the Company or
any of its subsidiaries. The Pension Committee met four times during 2004.
EXECUTIVE COMMITTEE
The Executive Committee of the Board may exercise substantially all the
authority of the Board during the intervals between the meetings of the Board.
The Executive Committee currently consists of Mr. Dan, as Chairman, and all
other directors, except that a quorum of the Executive Committee consists of
one-third of the number of members of the Executive Committee, three of whom
must not be employees of the Company or any of its subsidiaries. The Executive
Committee met once during 2004.
EXECUTIVE SESSIONS OF THE BOARD OF DIRECTORS
The non-management members of the Board of Directors meet regularly without
management present. The Board of Directors has determined, as provided in the
Company's Corporate Governance Policies, that there is no need to designate a
lead outside director to chair their executive sessions. Each executive session,
or portion thereof, is chaired by the chairman of the Board committee that has
primary responsibility over the matter under discussion during the executive
session or portion thereof.
DIRECTOR ATTENDANCE AT MEETINGS
During 2004, all incumbent directors attended at least 75% of the total
number of meetings of the Board of Directors and of the committees of the Board
on which they served.
Director Attendance at Annual Meeting
The Company has no formal policy with regard to Board members' attendance at
annual meetings. Seven of the ten directors then in office attended the 2004
annual meeting of shareholders.
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BOARD INDEPENDENCE
For a director to be deemed "independent," the Board of Directors of the
Company must affirmatively determine that the director has no material
relationship with the Company either directly or as a partner, shareholder or
officer of an organization that has a relationship with the Company. In making
this determination, the Board of Directors applies the following standards:
1. A director who is, or has been within the last three years, an
employee of the Company, or whose immediate family member is, or has been
within the last three years, an executive officer, of the Company, is not
independent. Employment as an interim Chairman, Chief Executive Officer or
other executive officer will not disqualify a director from being considered
independent following such employment.
2. A director who has received, or who has an immediate family member
serving as an executive officer who has received, during any twelve-month
period within the last three years, more than $100,000 in direct
compensation from the Company (excluding director and committee fees and
pensions or other forms of deferred compensation for prior service, provided
such compensation is not contingent in any way on continued service), is not
independent. Compensation received by a director for former service as an
interim Chairman, Chief Executive Officer or other executive officer will
not count toward the $100,000 limitation.
3. (A) A director who is, or whose immediate family member is, a current
partner of a firm that is the Company's internal or external auditor; (B) a
director who is a current employee of such a firm; (C) a director who has an
immediate family member who is a current employee of such a firm and who
participates in the firm's audit, assurance or tax compliance (but not tax
planning) practice; or (D) a director who was, or whose immediate family
member was, within the last three years (but is no longer) a partner or
employee of such a firm and personally worked on the Company's audit within
that time, in any such instance ((A)-(D)) is not independent.
4. A director who is, or has been within the last three years, or whose
immediate family member is, or has been within the last three years,
employed as an executive officer of another company where any of the
Company's present executive officers at the same time serves or served on
that company's compensation committee, is not independent.
5. A director who is a current employee, or whose immediate family
member is a current executive officer, of a company that has made payments
to, or received payments from, the Company for property or services in an
amount which, in any of the last three fiscal years, exceeds the greater of
$1 million, or 2% of such other company's consolidated gross revenues, is
not independent.
DIRECTOR NOMINATING PROCESS
The Company's Corporate Governance Policies contain information concerning
the responsibilities of the Corporate Governance Committee with respect to
identifying and evaluating the director candidates. Both the Corporate
Governance Committee Charter and the Corporate Governance Policies are published
on the Company's Internet website at www.brinkscompany.com. All members of the
Corporate Governance Committee are independent as defined under the general
independence standards of the listing standards of the New York Stock Exchange.
The Corporate Governance Committee's charter provides that the Corporate
Governance Committee will consider director candidate recommendations by
shareholders. Shareholders should submit any such recommendations for the
Corporate Governance Committee through the method described under
"Communications with Non-Management Members of the Board of Directors" below. In
addition, in accordance with the Company's bylaws, any shareholder of record
entitled to vote for the election of directors at the applicable meeting of
shareholders may nominate persons for election to the Board of Directors, if
such shareholder complies with the notice procedures set forth in the bylaws and
summarized in the section of this proxy statement entitled "Other Information --
Shareholder Proposals."
4
The Corporate Governance Committee evaluates all director candidates in
accordance with the director membership criteria described in the Corporate
Governance Policies. The Corporate Governance Committee evaluates any
candidate's qualifications to serve as a member of the Board based on the skills
and characteristics of individual Board members as well as the composition of
the Board as a whole. In addition, the Corporate Governance Committee will
evaluate a candidate's business experience, diversity, international background,
the number of other directorships held and leadership capabilities, along with
any other skills or experience which would be of assistance to management in
operating the Company's business. The Company did not receive notice of a
director candidate recommended by a shareholder or group owning more than 5% of
the Company's voting common stock for at least one year as of the date of
recommendation on or prior to November 26, 2004, the date that is 120 days
before the anniversary of the prior year's release of the proxy statement.
The Corporate Governance Committee utilizes several methods for identifying
and evaluating director nominees. The Corporate Governance Committee
periodically assesses whether any vacancies on the Board are expected due to
retirement or otherwise and, in the event that vacancies are anticipated, the
Committee considers possible director candidates. The Corporate Governance
Committee has utilized professional search firms to identify candidates based
upon the director membership criteria described in the Corporate Governance
Policies.
Mr. John S. Brinzo, who was elected as a director by the Board on December
6, 2004, was included in a list of candidates being evaluated by a professional
search firm at the suggestion of one of the non-management directors. Based on
the evaluations performed by the search firm and its own review of possible
candidates, the Corporate Governance Committee recommended Mr. Brinzo's election
as a director and his inclusion on the proxy card.
COMMUNICATIONS WITH NON-MANAGEMENT MEMBERS OF THE BOARD OF DIRECTORS
The Company's Corporate Governance Policies set forth a process by which
shareholders can send communications to the non-management members of the Board
of Directors. When interested third parties have concerns, they may make them
known to the non-management directors by communicating via written
correspondence sent U.S. mail c/o "Executive Session Chairman" at the Company's
Richmond, Virginia address. All such correspondence is provided to the presiding
chairman at, or prior to, the next executive session held at a regular Board
meeting.
COMPENSATION OF DIRECTORS
Each non-employee director is paid an annual retainer fee of $32,500, an
attendance fee of $1,750 for each meeting of the Board and of each committee of
the Board, and a fee of $1,750 per day for rendering any special services to the
Company at the request of the Chairman of the Board. Each Committee chairman
receives an additional annual fee of $3,300. A director may elect to defer
receipt of his or her fees to future years and to receive interest thereon,
compounded quarterly, at the prime commercial lending rate of JPMorgan Chase, as
of the end of the previous calendar quarter.
Under the terms of the Company's Directors' Stock Accumulation Plan, each
non-employee director receives, as of June 1 of each year, an allocation of
units representing shares of Brink's Common Stock (the "DSAP Units") equal to
(a) 50% of the annual retainer in effect on such June 1 if he or she has accrued
less than eight years of service or (b) 25% of such annual retainer if he or she
has accrued eight or more years of service, divided by the average of the high
and low per share quoted sale prices of Brink's Common Stock on the first
trading date in June. In addition, under the Directors' Stock Accumulation Plan,
additional DSAP Units are credited to participants' accounts in respect of cash
dividends paid on Brink's Common Stock based upon the Directors' Stock
Accumulation Plan's formula for accrual. Upon a participant's termination of
service and provided that the criteria set forth in the plan have been met, the
distribution of shares of Brink's Common Stock equal to the number of DSAP Units
allocated to such director's account will be made in a single lump sum
distribution. The participant may elect, in accordance with the plan, to receive
a distribution in equal annual installments (not more than 10).
5
The following table sets forth information concerning the number of DSAP
Units credited during 2004 to each non-employee director:
2004 DSAP UNITS
CREDITED
--------
Roger G. Ackerman........................................... 262.86
Betty C. Alewine............................................ 525.72
James R. Barker............................................. 262.86
Marc C. Breslawsky.......................................... 525.72
John S. Brinzo.............................................. 0.00
James L. Broadhead.......................................... 262.86
Gerald Grinstein............................................ 525.72
Ronald M. Gross............................................. 262.86
Carl S. Sloane.............................................. 525.72
Ronald L. Turner............................................ 525.72
All Non-Employee Directors as a Group (10 persons).......... 3,680.04
Under the Non-Employee Directors' Stock Option Plan, automatic annual grants
of options are made for 2,517 shares of Brink's Common Stock at 100% of fair
market value on the date of grant to each non-employee director on each July 1
so long as the Non-Employee Directors' Stock Option Plan remains in effect. Each
option granted annually will become exercisable six months from the date of
grant. Each option granted under the Non-Employee Directors' Stock Option Plan
constitutes a nonqualified stock option under the Internal Revenue Code of 1986,
as amended (the "Internal Revenue Code"), and terminates no later than ten years
from the date of grant. The Non-Employee Directors' Stock Option Plan terminates
on May 11, 2008. The options are nontransferable otherwise than by will or the
laws of descent and distribution except that options may be transferable to
immediate family members (or trusts therefor) of an optionee.
Under the Directors' Charitable Award Program, the Company will contribute
$1,100,000 on behalf of each participating director after such director's death.
Of that amount, $100,000 will be donated to one or more tax-exempt organizations
designated by the Company, and $1,000,000 will be donated in accordance with the
director's recommendations to eligible educational institutions and charitable
organizations. On February 7, 2003, the Board closed the Directors' Charitable
Award Program to new participants. Each of the Company's directors, except Mr.
Brinzo, who joined the Board in December of 2004, currently participates in the
Directors' Charitable Award Program. The Company is the owner and beneficiary of
life insurance policies insuring the lives of the participating directors.
Premiums paid in 2004 in respect of such policies totaled in aggregate
approximately $423,145.
6
ADDITIONAL INFORMATION
EXECUTIVE COMPENSATION
The following table sets forth information with respect to the compensation
of the Chief Executive Officer and the other four highest paid executive
officers of the Company:
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
ANNUAL ----------------------------
COMPENSATION AWARDS PAYOUTS
----------------------- ----------- -------------
SECURITIES
NAME AND UNDERLYING LTIP ALL OTHER
PRINCIPAL POSITION YEAR SALARY(a) BONUS(b) OPTIONS PAYOUTS(b)(c) COMPENSATION(d)
------------------ ---- --------- -------- ------- ------------- ---------------
M. T. Dan 2004 $992,308 $1,320,000 160,000 $907,800 $18,541
Chairman, President and 2003 915,846 750,000 115,000 0 21,762
Chief Executive Officer 2002 880,077 663,000 172,000 0 18,624
R. T. Ritter 2004 $407,692 $ 325,000 40,000 $249,645 $12,395
Vice President and 2003 371,923 250,000 25,000 0 15,388
Chief Financial Officer 2002 346,154 200,000 40,000 0 14,791
F. T. Lennon 2004 $353,654 $ 225,000 30,000 $189,125 $14,164
Vice President -- Human 2003 325,200 175,000 20,000 0 17,216
Resources and Administration 2002 310,900 150,000 30,000 0 14,944
A. F. Reed 2004 $353,654 $ 225,000 30,000 $189,125 $11,802
Vice President, General Counsel 2003 325,200 170,000 20,000 0 14,441
and Secretary 2002 311,169 140,000 30,000 0 12,926
J. B. Hartough 2004 $253,385 $ 110,000 20,000 $105,910 $11,030
Vice President -- 2003 240,677 105,000 18,000 0 13,530
Corporate Finance 2002 236,800 163,000 20,000 0 19,013
and Treasurer
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(a) Salaries before compensation reduction payments under the 401(k) Plan and
the Deferral of Salary and Supplemental Savings Plan portions of the
Company's Key Employees' Deferred Compensation Program (the "Deferred
Compensation Program"). Because of the leap year, salaries reported above in
2004 reflect an additional payday, which applied to all employees.
In addition, as of January 1, 2005, each participant's account was credited
with additional units representing shares of Brink's Common Stock (the
"Common Stock Units") in respect of cash dividends paid on Brink's Common
Stock during 2004 based upon the formula for accrual in the Deferred
Compensation Program. The following table sets forth the amount of 2004
salary deferred under the Deferred Compensation Program, including matching
contributions of approximately 15% of salary for 2004, by each of the
executive officers named above and the number of Common Stock Units credited
to his account, including Common Stock Units in respect of matching
contributions and cash dividends, in respect of salary paid in 2004:
2004 COMPENSATION COMMON STOCK
DEFERRED UNITS
-------- -----
Mr. Dan $382,591 13,367.98
Mr. Ritter 121,149 4,107.49
Mr. Lennon 134,416 4,461.82
Mr. Reed 98,613 3,269.85
Mr. Hartough 87,249 2,861.69
Under the Deferred Compensation Program, distributions with respect to the
Common Stock Units are to be made in shares of Brink's Common Stock on the
basis of one share for each Common Stock Unit (with cash paid for fractional
Common Stock Units), but the aggregate value of the shares so distributed
attributable pursuant to the Deferral of Salary portion of the Deferred
Compensation Program (including related dividends, but not matching
contributions) may not be less than the aggregate amount of the salary
deferred pursuant to the Deferral of Salary portion of the Deferred
Compensation Program and the related dividends in respect of which such Common
Stock Units were initially credited. Unless otherwise elected, such
distributions will be made upon termination of employment or, for deferrals
made after December 31, 2004, six months following such termination.
(b) Under the Deferred Compensation Program, participants are permitted to defer
up to 100% of the cash incentive payment for 2004 made to them pursuant to
the Key Employees Incentive Plan and the Management Performance Improvement
Plan and, with respect to payments made to them pursuant to the Key
Employees Incentive Plan, receive a Company-matching contribution with
respect to the amount so deferred but not in excess of 10% of the cash
incentive payment made pursuant to that plan, which amounts were converted
into Common Stock Units in accordance with the formula for conversion in the
Deferred Compensation Program. In addition, dividend credits of Common Stock
Units were made to each participant's account in respect of cash dividends
paid on Brink's Common Stock during 2004. The following table sets forth the
aggregate amount of incentive compensation for 2004 deferred under the
Deferred Compensation Program, including Company-matching contributions, by
each of the executive officers named above and an estimate of the number of
Common Stock
(footnotes continued on next page)
7
(footnotes continued from previous page)
Units credited to his account (the number of Common Stock Units is an
estimate because the final calculation of Common Stock Units requires share
price data for the month of March):
ESTIMATED
2004 BONUS COMMON STOCK
DEFERRED UNITS
-------- -----
Mr. Dan $981,900 26,242.07
Mr. Ritter 89,965 2,365.37
Mr. Lennon 135,000 3,461.54
Mr. Reed 45,000 1,153.85
Mr. Hartough 96,955 2,610.29
Under the Deferred Compensation Program, distributions with respect to the
Common Stock Units are to be made in shares of Brink's Common Stock on the
basis of one share for each Common Stock Unit (with cash paid for fractional
Common Stock Units), but the aggregate value of the shares so distributed
attributable to the deferral of cash incentive payments (including related
dividends, but not matching contributions) may not be less than the aggregate
amount of the cash incentive payment deferred and the related dividends in
respect of which such Common Stock Units were initially credited. Unless
otherwise elected, such distributions will be made upon termination of
employment or, for deferrals made after December 31, 2004, six months
following such termination.
(c) These awards were granted pursuant to the shareholder approved Management
Performance Improvement Plan based upon the achievement of financial goals
established over a three year period.
(d) The Company made matching contributions under the 401(k) Plan in 2004 in the
amount of $7,687.50 for each of Messrs. Dan, Ritter, Lennon, Reed and
Hartough.
In 2004, the Company paid life insurance premiums under the Executive Salary
Continuation Plan in the amount of $10,853 for Mr. Dan; $4,707 for Mr.
Ritter; $6,476 for Mr. Lennon; $4,114 for Mr. Reed; and $3,342 for Mr.
Hartough. The Company, not the individual, is the beneficiary under the
insurance policies. The Executive Salary Continuation Plan provides a death
benefit equal to three times a covered employee's annual salary payable in
ten equal annual installments to the employee's spouse or other designated
beneficiary.
Although the dollar amounts of perquisites provided to the executive
officers do not meet the threshold for inclusion in the Summary Compensation
Table, the following table identifies executive perquisites for the
preceding three years:
MR. DAN MR. RITTER MR. LENNON MR. REED MR. HARTOUGH
------- ---------- ---------- -------- ------------
Personal Use of Company
Aircraft.......................... 2004 $ 2,064 $ 0 $ 0 $ 0 $ 0
2003 2,810 0 0 0 0
2002 0 0 0 0 0
Club Dues......................... 2004 4,700 0 2,136 3,936 0
2003 4,800 0 1,620 2,980 0
2002 4,650 0 1,801 3,621 0
Tax Preparation and Financial
Planning........................ 2004 5,071 3,252 9,475 795 1,000
2003 10,920 750 475 818 2,000
2002 3,168 750 713 1,050 7,000
Executive Physical Examinations... 2004 1,850 1,850 2,543 1,850 0
2003 0 0 0 0 1,850
2002 0 0 0 0 4,636
Executive Life Insurance
Premiums........................ 2004 15,647 14,304 21,902 5,073 5,203
2003 14,225 11,540 19,910 4,612 4,730
2002 0 8,284 9,914 0 3,845
Security Systems.................. 2004 287 378 1,006 970 347
2003 287 756 0 1,754 347
2002 575 0 0 545 347
Total......................... 2004 $29,619 $19,784 $37,062 $12,624 $ 6,550
2003 33,042 13,046 22,005 10,164 8,927
2002 8,393 9,034 12,428 5,216 15,828
8
STOCK OPTIONS
The following table sets forth information concerning nonqualified stock
options granted under the Company's 1988 Stock Option Plan on July 8, 2004, to
the Chief Executive Officer and the other officers named in the Summary
Compensation Table. Such options will (i) become exercisable as to one-third of
the total number of shares covered by such option on each of the first, second
and third anniversary of the date of grant; (ii) have purchase prices per share
equal to 100% of the fair market value of Brink's Common Stock on the date of
grant, rounded up to the next higher cent; and (iii) expire on July 8, 2010. No
Stock Appreciation Rights were granted in 2004 to the named executive officers.
OPTION GRANTS IN 2004
INDIVIDUAL GRANTS
NUMBER OF PERCENT OF
SECURITIES TOTAL OPTIONS EXERCISE
UNDERLYING GRANTED TO PRICE GRANT DATE
OPTIONS EMPLOYEES IN PER EXPIRATION PRESENT
NAME GRANTED 2004 SHARE DATE VALUE(a)
- ---- ------- ---- ----- ---- --------
M. T. Dan............................ 160,000 17.51% $32.68 07/08/2010 $1,804,114
R. T. Ritter......................... 40,000 4.38 32.68 07/08/2010 451,029
F. T. Lennon......................... 30,000 3.28 32.68 07/08/2010 338,271
A. F. Reed........................... 30,000 3.28 32.68 07/08/2010 338,271
J. B. Hartough....................... 20,000 2.19 32.68 07/08/2010 225,515
- ---------
(a) Based on the Black-Scholes option-pricing model and the following
assumptions: (i) projected annual dividend yield of 0.50% for Brink's Common
Stock; (ii) expected volatility of 31.77%; (iii) a risk-free rate of return
of 4.06%; and (iv) all options are exercised on the expiration date. All
values vest at 33% per annum until fully vested, and were also discounted by
3% per year to reflect the risk of forfeiture before vesting. The actual
value an executive officer may receive depends on market prices and there
can be no assurance that the amounts reflected in the Grant Date Present
Value column will actually be realized. No gain to an executive officer is
possible without an appreciation in stock value.
The following table sets forth information concerning the exercise of
options during 2004 and unexercised options held at the end of such year.
AGGREGATED OPTION EXERCISES IN 2004
AND YEAR-END OPTION VALUES
STOCK OPTIONS
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
SHARES DECEMBER 31, 2004 DECEMBER 31, 2004
ACQUIRED ON VALUE --------------------------- ------------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- -------- -------- ----------- ------------- ----------- -------------
M. T. Dan............ 13,089 $205,628.19 652,600 293,999 $12,737,555.67 $3,967,257.89
R. T. Ritter......... 3,636 4,508.64 135,309 69,999 2,619,184.83 913,377.89
F. T. Lennon......... 37,732 472,390.44 71,667 53,333 1,243,758.06 705,191.94
A. F. Reed........... 35,308 473,576.76 71,667 53,333 1,243,758.06 705,191.94
J. B. Hartough....... 15,011 75,483.03 51,834 38,666 1,064,066.98 545,348.02
LONG-TERM INCENTIVE PLAN AWARDS IN 2004
ESTIMATED FUTURE PAYOUTS UNDER
NUMBER OF PERFORMANCE OR OTHER NON-STOCK PRICE-BASED PLANS
SHARES, UNITS PERIOD UNTIL -----------------------------------
NAME OR OTHER RIGHTS MATURATION OR PAYOUT THRESHOLD TARGET MAXIMUM
- ---- --------------- -------------------- --------- ------ -------
M. T. Dan................... * 01/01/2005 - 12/31/2007 $0 $1,000,000 $2,000,000
R. T. Ritter................ * 01/01/2005 - 12/31/2007 0 250,000 500,000
F. T. Lennon................ * 01/01/2005 - 12/31/2007 0 200,000 400,000
A. F. Reed.................. * 01/01/2005 - 12/31/2007 0 200,000 400,000
J. B. Hartough.............. * 01/01/2005 - 12/31/2007 0 150,000 300,000
- ---------
* All payments made under the Management Performance Improvement Plan are made
in cash unless payment is deferred at the recipient's election. Payments will
be made under the Management Performance Improvement Plan to the named
executive officers with respect to the measurement period set forth above only
if the Company meets specific performance thresholds for revenue, operating
profit, earnings per share and the addition of economic value during the
applicable measurement period.
9
PENSION-RETIREMENT PLAN
The Company maintains a noncontributory defined benefit Pension-Retirement
Plan (the "Pension Plan") covering, generally, full-time employees of the
Company and participating subsidiaries who are not covered by a collective
bargaining agreement. Accrued benefits under the Pension Plan are vested upon
employees' completion of five years of Vesting Service (as defined in the
Pension Plan). The Internal Revenue Code limits the amount of pensions which may
be paid under federal income tax qualified plans. The Board of Directors adopted
a Pension Equalization Plan (the "Equalization Plan") under which the Company
will make additional payments so that the total amount received by each such
person affected by the Internal Revenue Code limitations is the same as would
have otherwise been received under the Pension Plan. The Company has reserved
the right to terminate or amend the Pension Plan and the Equalization Plan at
any time.
Effective December 1, 1997, the Equalization Plan was amended to permit
participants to receive the actuarial equivalent of their benefit under such
plan in a lump sum. By August 1, 2006, or earlier, upon a Change in Control (as
defined in the Equalization Plan), the Company is required to contribute amounts
in cash to a trust established between the Company and JPMorgan Chase. Such
amounts are designed to be sufficient to provide the benefits to which
(a) participants under the Equalization Plan and (b) retirees covered under
certain employment contracts, are entitled pursuant to the terms of the
Equalization Plan and such employment contracts. The assets of the trust will be
subject to the claims of the Company's general creditors in the event of the
Company's insolvency.
Effective June 1, 2003, the Pension Plan was amended to provide a lower
accrual rate for Benefit Accrual Service earned after June 1, 2003. In addition,
the Pension Plan's Average Annual Salary definition was changed from 36 to 60
consecutive months. At June 1, 2003, the executive officers named in the Summary
Compensation Table had been credited under the Pension Plan with the following
years of Benefit Accrual Service: Mr. Dan, 21 years; Mr. Lennon, 26 years; Mr.
Hartough, 16 years; Mr. Reed, 16 years; and Mr. Ritter, 5 years.
The table below illustrates the estimated annual benefits payable upon
retirement at age 65 under the Pension Plan and Equalization Plan to officers
and other eligible employees in various classifications as to Average Salary and
years of Benefit Accrual Service (as defined in the Pension Plan) for service
prior to June 1, 2003. The table below does not reflect reductions on account of
the applicable Social Security taxable wage base.
PENSION PLAN TABLE
ESTIMATED ANNUAL PENSION
AVERAGE ANNUAL SALARY PAYABLE BASED ON BENEFIT ACCRUAL SERVICE OF:
DURING 36 CONSECUTIVE --------------------------------------------------------
MONTHS OF HIGHEST PAY 10 YEARS 15 YEARS 20 YEARS 25 YEARS 30 YEARS
- --------------------- -------- -------- -------- -------- --------
$ 300,000 $ 63,000 $ 94,500 $126,000 $ 157,500 $ 172,500
500,000 105,000 157,500 210,000 262,500 287,500
700,000 147,000 220,500 294,000 367,500 402,500
900,000 189,000 283,500 378,000 472,500 517,500
1,100,000 231,000 346,500 462,000 577,500 632,500
1,300,000 273,000 409,500 546,000 682,500 747,500
1,500,000 315,000 472,500 630,000 787,500 862,500
1,700,000 357,000 535,500 714,000 892,500 977,500
1,900,000 399,000 598,500 798,000 997,500 1,092,500
2,100,000 441,000 661,500 882,000 1,102,500 1,207,500
2,300,000 483,000 724,500 966,000 1,207,500 1,322,500
10
The table below illustrates the estimated annual benefits payable upon
retirement at age 65 under the Pension Plan and Equalization Plan to officers
and other eligible employees in various classifications as to Average Salary and
years of Benefit Accrual Service as defined in the Pension Plan (as amended
June 1, 2003).
PENSION PLAN TABLE
ESTIMATED ANNUAL PENSION
AVERAGE ANNUAL SALARY PAYABLE BASED ON BENEFIT ACCRUAL SERVICE OF:
DURING 60 CONSECUTIVE --------------------------------------------------------
MONTHS OF HIGHEST PAY 10 YEARS 15 YEARS 20 YEARS 25 YEARS 30 YEARS
- --------------------- -------- -------- -------- -------- --------
$ 300,000 $ 52,500 $ 78,750 $105,000 $ 131,250 $ 146,250
500,000 87,500 131,250 175,000 218,750 243,750
700,000 122,500 183,750 245,000 306,250 341,250
900,000 157,500 236,250 315,000 393,750 438,750
1,100,000 192,500 288,750 385,000 481,250 536,250
1,300,000 227,500 341,250 455,000 568,750 633,750
1,500,000 262,500 393,750 525,000 656,250 731,250
1,700,000 297,500 446,250 595,000 743,750 828,750
1,900,000 332,500 498,750 665,000 831,250 926,250
2,100,000 367,500 551,250 735,000 918,750 1,023,750
2,300,000 402,500 603,750 805,000 1,006,250 1,121,250
Such amounts are based on the assumption that the employee will be in the
Company's employ until normal retirement date (age 65), that the Pension Plan
and Equalization Plan will continue in effect without change and that payments
will be made on a straight life annuity basis. The Pension Plan and Equalization
Plan give effect to the full amount of earnings shown under the salary and bonus
columns of the Summary Compensation Table. At December 31, 2004, the executive
officers named in the Summary Compensation Table had been credited under the
Pension Plan, as amended June 1, 2003, with two years each of Benefit Accrual
Service. The table does not reflect reductions on account of the applicable
Social Security taxable wage base.
EMPLOYMENT AGREEMENTS
As of May 4, 1998, the Company entered into an employment agreement with
Mr. Dan which, as amended as of March 8, 2002, provides him with, among other
things, a minimum annual salary of $884,000 for a period ending March 31, 2007,
in exchange for his services as President and Chief Executive Officer of the
Company. The agreement also provides certain benefits and obligations in the
event of a termination of his services during the contract term other than for
Due Cause (as defined in the agreement), including a lump-sum cash payment equal
to (i) his annual salary, as in effect immediately prior to such termination,
multiplied by three plus (ii) the bonus, if any, paid to him in respect of the
immediately preceding fiscal year multiplied by three, plus (iii) a sum
reflecting the economic equivalent of certain employee benefit programs.
CHANGE IN CONTROL ARRANGEMENTS
In 1997 and 1998, the Company entered into change in control agreements (the
"Change in Control Agreements") with Messrs. Dan, Hartough, Lennon, Reed and
Ritter. Pursuant to these agreements, in the event Messrs. Dan, Hartough,
Lennon, Reed or Ritter are terminated by the Company without Cause (as defined
in their respective agreements) or quit for Good Reason (as defined in their
respective agreements) within three years following a Change in Control (as
defined in their respective agreements), the terminated executive will be
entitled, in addition to other benefits, to a cash lump-sum payment equal to
(i) his accrued pay (including a prorated portion of his annual bonus based on
the number of days worked in the year of his termination) plus (ii) three times
the sum of his Annual Base Salary and Annual Bonus (as defined in their
respective agreements). Any payments made to the executives pursuant to the
Change in Control Agreements will be grossed up to address excise-related taxes.
11
SEVERANCE AGREEMENTS
In 1997 and 1998, the Company entered into severance agreements with Messrs.
Hartough, Lennon, Reed and Ritter (the "Severance Agreements"), which provide
that if the executive is terminated by the Company other than for Cause (as
defined in such agreements) or he quits for Good Reason (as defined in such
agreements), the terminated executive shall be entitled to receive, in addition
to other benefits, but not in duplication of the benefits under the Change in
Control Agreements (i) his accrued pay (including a prorated portion of his
annual bonus based on the number of days worked in the year of his termination),
(ii) three times the sum of his annual base salary and Annual Bonus (as defined
in such agreements) and (iii) previously deferred compensation and related
matching contributions (whether or not vested). Any payments made to the
executives pursuant to the Severance Agreements will be grossed up to address
excise-related taxes.
EQUITY COMPENSATION PLAN INFORMATION
NUMBER OF SECURITIES
REMAINING AVAILABLE FOR
NUMBER OF SECURITIES WEIGHTED AVERAGE FUTURE ISSUANCE UNDER
TO BE ISSUED UPON EXERCISE EXERCISE PRICE OF EQUITY COMPENSATION PLANS
OF OUTSTANDING OPTIONS, OUTSTANDING OPTIONS, (EXCLUDING SECURITIES
PLAN CATEGORY WARRANTS AND RIGHTS WARRANTS AND RIGHTS REFLECTED IN COLUMN (a))
------------- -------------------------- -------------------- -------------------------
(a) (b) (c)(1)
Equity compensation plans approved by
security holders....................... 3,321,562 $23.33 1,289,260
Equity compensation plans not approved
by security holders.................... -- -- --
--------- ------ ---------
Total............................... 3,321,562 $23.33 1,289,260
--------- ------ ---------
--------- ------ ---------
- ---------
(1) The Deferred Compensation Program, as approved by shareholders, has no limit
as to the number of securities available for issuance. The Directors' Stock
Accumulation Plan, as approved by shareholders, had 105,870 shares available
for issuance as of December 31, 2004.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers, and any persons who own more than 10% of a registered class
of the Company's equity securities, to file with the SEC and the New York Stock
Exchange reports of ownership and changes in ownership of Brink's Common Stock
and other equity securities of the Company. Officers, directors and greater than
10% shareholders are required by SEC regulation to furnish the Company with
copies of all Section 16(a) forms they file. Based solely on a review of the
copies of such reports furnished to the Company or written representations that
no other reports were required, the Company believes that, during 2004, its
officers, directors and greater than 10% beneficial owners were in compliance
with all applicable filing requirements, with the exception of the following:
(i) each of the executive officers filed a Form 5 as of February 14, 2005,
reporting eight transactions (with Mr. Dan reporting one additional transaction
on an earlier Form 4) related to deferred compensation units that were issued to
such individuals as a result of deferrals of cash compensation and dividends
under the Deferred Compensation Program that had not previously been reported
and to correct certain arithmetic errors in previously filed Section 16 reports
and (ii) each of the non-management directors, other than the Company's recently
elected director, Mr. Brinzo, filed a Form 5 as of February 14, 2005, reporting
nine transactions (except that Mr. Turner, who was elected in 2003, reported
only four transactions) related to deferred compensation units issued as a
result of the deferral of compensation and dividends by such individuals under
the Directors' Stock Accumulation Plan that had not been reported in previously
filed Section 16 reports.
REPORT OF COMPENSATION AND BENEFITS COMMITTEE
The Composition and Purpose of the Compensation and Benefits Committee. The
Compensation and Benefits Committee (the "Compensation Committee") consists of
four directors, each of whom has been determined by the Board of Directors to
satisfy the requirements for independence established by the New York Stock
Exchange listing standards and the Company's Corporate Governance Policies and
are "non-employee directors" (within the meaning of Rule 16b-3 of the Securities
Exchange Act of
12
1934, as amended) and "outside directors" (within the meaning of Section 162(m)
of the Internal Revenue Code). Pursuant to the charter of the Compensation
Committee (a copy of which is available on the Company's website at
www.brinkscompany.com) the purpose of the Compensation Committee is to establish
and review policies governing salaries, incentive compensation and the terms and
conditions of employment of senior executive officers and other key employees of
the Company.
Independent Compensation Committee Consultants. In 2004, the Compensation
Committee retained recognized independent consultants in the field of executive
compensation to advise the Compensation Committee on the Company's compensation
programs for executive officers and other key employees. With the assistance of
the independent consultants, the Compensation Committee made a comprehensive
review of all aspects of the Company's compensation programs, including for 2004
salary, annual cash incentive payments under the Key Employees Incentive Plan
(the "KEIP"), long-term incentive awards under the Management Performance
Improvement Plan (the "MPIP"), stock option grants under the 1988 Stock Option
Plan, as well as compensation deferral opportunities, perquisites, retirement
programs, executive stock ownership, change in control and severance
arrangements.
The Philosophy of the Compensation Committee. The Compensation Committee has
established a compensation program to attract, retain and motivate executive
officers and to enhance their incentive to perform at the highest level and
contribute significantly to the Company's success. Recognizing the desirability
of tying the compensation of executive officers to performance and of aligning
their interests closely to the long-term interests of the Company and its
shareholders, the Compensation Committee believes that a significant part of
executive officers' compensation should be paid in the form of incentive
payments under the KEIP and the MPIP, as well as grants of stock options under
the 1988 Stock Option Plan.
The Compensation Committee believes further that the salaries of the Chief
Executive Officer (the "CEO") and the other executive officers should be at or
near the 50th percentile for comparable positions in companies of similar size
across all industries from which the Company seeks to attract executive
officers, while the aggregate of salary and annual incentive compensation
opportunity to the CEO and the other executive officers should be reflective of
individual and Company performance.
The Compensation Committee believes that long-term incentive compensation
aligns the interests of management and the Company's shareholders and that the
long-term incentive compensation of the CEO and the other executive officers
should be competitive but also indicative of individual and Company performance.
Long-term incentive compensation is provided under three major plans: (i) the
1988 Stock Option Plan, (ii) the MPIP, a long-term cash compensation plan
payable based upon performance targets established by the Compensation Committee
pursuant to a plan approved by shareholders and (iii) the Key Employees'
Deferred Compensation Program, which permits deferrals of cash compensation by
the CEO and other executive officers into a Company stock fund, matched in part
by the Company with additional Company stock.
Any stock options granted have exercise prices equal to 100% of market value
on the date of grant. Executive officers benefit from stock option grants only
to the extent the stock price of Brink's Common Stock appreciates above the
exercise price. In addition, because these options generally vest only after
periods ranging from one to three years from the date of grant, they enhance the
ability of the Company to retain executive officers while encouraging them to
take a longer-term view in their decisions impacting the Company.
The Compensation Committee believes that reasonable severance and
post-takeover employment arrangements are an essential aspect of the terms of
employment of executive officers. The Compensation Committee also recognizes the
importance to the Company of retaining its executive officers during and after
the disruption typically provoked by a takeover offer (whether or not ultimately
successful). The Company is party to a "change in control" agreement and a
severance agreement or employment agreement with each of its executive officers,
and the Compensation Committee is firmly of the view that the Company and its
shareholders have benefited from the protection that these agreements afford the
executive officers. The Compensation Committee believes that these agreements
provide reasonable compensation arrangements and give the Company a high degree
of management stability.
13
Executive Officer Compensation. The Compensation Committee annually reviews
the salaries of the executive officers and approves any adjustments based on the
CEO's and the Compensation Committee's evaluation of their individual
performance and the competitive salary market, in light of the Compensation
Committee's philosophy regarding executive salaries set forth above.
Each year the Compensation Committee sets target cash incentive awards for
executive officers under the KEIP. For purposes of determining actual awards
under these guidelines in 2004, the Compensation Committee gave individual
performance a weight factor of 50%, and each of unit and Company performance
weight factors of 25%. In evaluating each factor, the Compensation Committee
considers individual, unit and Company performance with respect to financial
plans, strategy, cost containment and productivity objectives and corporate
governance, process and compliance results.
In 2004, the Compensation Committee made stock option grants to the
executive officers of the Company totaling 280,000 shares of Brink's Common
Stock, including a grant to the CEO of options totaling 160,000 shares of
Brink's Common Stock.
The Compensation Committee determined the number of stock options to be
granted to the executive officers based on competitive practices and individual
performance, considered in the context of the overall long-term incentive
compensation philosophy described above.
The Compensation Committee sets performance and award targets for the
executive officers under the MPIP annually. The measurement period for these
targets is three years. For the three year measurement period beginning in 2005,
the Compensation Committee established specific performance measures for the
Company with respect to revenue, operating profit, earnings per share and
increases in economic value. Awards to the executives at the end of the
measurement period may range from 0% to 200% of the target award, depending upon
the performance of the Company against the pre-established criteria.
CEO Compensation. In 2004, the Compensation Committee increased the CEO's
salary by 4.35%, reflecting his individual performance and the competitive
salary market in light of the Compensation Committee's compensation philosophy
set forth above. For 2004, the CEO had a target cash incentive award under the
KEIP of 100% of salary. Based on the KEIP guidelines, the CEO's actual award
could have ranged from 0% to 200% of salary, depending on the evaluation of his
performance and that of the Company as determined by the Compensation Committee
and approved by the Board. The Compensation Committee recommended and the Board
approved an annual incentive payment of $1,320,000 for the CEO and annual
incentive payments for the other executive officers for 2004 after considering
numerous quantitative and qualitative measures of the Company's performance in
2004, including, among others: (i) revenues, earnings and cash flow on a
consolidated basis; (ii) revenues, operating earnings and cash flow of each
business unit; (iii) the employee safety performance of each unit;
(iv) shareholder value as measured by the market capitalization of the Company;
and (v) increases in economic value. In so doing, the Compensation Committee
considered improvements in all areas noted, including an increase of
approximately 75% in the Company's share price. The Compensation Committee also
took into account as additional factors and criteria: pricing and market
conditions affecting each business unit; the effect of the economy on such
businesses; comparative performance of the Company's competitors; productivity
and cost containment measures successfully carried out; progress of management
development and employee relations efforts; the quality of strategic planning;
and communications with external constituencies. In connection with the three
year measurement period that ended in 2004 with respect to the MPIP, the Company
exceeded the performance thresholds with respect to revenues, operating profit,
earnings per share and increases in economic value previously established for
the executive officers. For this measurement period, the CEO had a target award
of $600,000. Given the Company's performance over the measurement period ended
in 2004, the Compensation Committee approved an MPIP payment to the CEO of
$907,800, together with payments to the other executive officers for the period
ended in 2004.
Additional Factors and Criteria. In 2004, the Compensation Committee based
its evaluation of the CEO's and the other executive officers' performance not
only on the measures of the Company's financial performance and the other
factors and criteria described above, but also on its good faith business
judgment of their performance as it related both as to results in 2004 and the
long-term positioning of the Company for increased revenue and profits and value
added growth. The
14
Compensation Committee did not attach specific weights to the foregoing factors.
In making these determinations, the Compensation Committee reviewed all
components of the CEO's and each executive officer's compensation, including
base salary, annual incentive award, equity and long-term incentive
compensation, accumulated realized and unrealized stock option gains and the
dollar value to the CEO and the cost to the Company of all perquisites and other
personal benefits received.
Section 162(m) of the Internal Revenue Code. Internal Revenue Code
Section 162(m) disallows a tax deduction for any publicly held corporation for
paid remuneration exceeding $1 million in any taxable year for chief executive
officers and certain other executive officers, except for performance-based
remuneration. Historically, as reflected by the design and implementation of the
Company's compensation programs, the Compensation Committee has sought, and
continues to seek, the availability of tax deductibility. This policy, however,
is subject to the reservation by the Compensation Committee of the flexibility
to award non-deductible compensation in circumstances wherein the Compensation
Committee believes, in its good faith business judgment, that such an award is
in the best interest of the Company in attracting or retaining capable
management.
James R. Barker, Chairman
Roger G. Ackerman
James L. Broadhead
Gerald Grinstein
REPORT OF AUDIT AND ETHICS COMMITTEE
In compliance with the requirements of the New York Stock Exchange, the
Audit Committee has a charter (the "Audit Committee Charter") outlining the
functions and responsibilities of the Audit Committee. A copy of the Audit
Committee Charter is available on the Company's website at
www.brinkscompany.com. In connection with those responsibilities, the Audit
Committee has:
Reviewed and discussed the audited financial statements for the fiscal
year ended December 31, 2004 with management and KPMG LLP ("KPMG"), the
Company's independent auditors;
Discussed with KPMG the matters required to be discussed by Statement on
Auditing Standards No. 61 regarding required communication by external
auditors with audit committees; and
Received written disclosures and a letter from KPMG regarding KPMG's
independence as required by Independence Standards Board Standard No. 1
and has discussed with KPMG its independence.
The Audit Committee also considered, as it determined appropriate, tax
matters and other areas of financial reporting and the audit process over which
the Audit Committee has oversight.
Based on the Audit Committee's review and discussions described above, the
Audit Committee recommended to the Board of Directors that the audited financial
statements be included in the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 2004 for filing with the SEC.
Carl S. Sloane, Chairman
James R. Barker
Marc C. Breslawsky
John S. Brinzo
Ronald M. Gross
15
PERFORMANCE GRAPH
The following graph shows a five-year comparison of cumulative total returns
for Brink's Common Stock (formerly Pittston Brink's Group Common Stock)
outstanding since December 31, 1999, through December 31, 2004, the S&P MidCap
400 Index and the S&P MidCap Diversified Commercial Services Index. The S&P
MidCap Diversified Commercial Services Index will replace the composite index of
peer companies (the "Old Custom Composite Index") selected by the Company
because many of the companies in the Old Custom Composite Index are no longer
publicly traded. For ease of comparison both are included in the performance
graph below.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN AMONG BRINK'S COMMON STOCK,
THE S&P MIDCAP 400 INDEX, THE S&P MIDCAP DIVERSIFIED COMMERCIAL SERVICES INDEX
AND THE OLD CUSTOM COMPOSITE INDEX(1)
[PERFORMANCE GRAPH]
- ---------------------------------------------------------------------------------------------------------------
31-DEC-99 14-JAN-00 31-DEC-00 31-DEC-01 31-DEC-02 31-DEC-03 31-DEC-04
- ---------------------------------------------------------------------------------------------------------------
The Brink's Company $100 $ 99 $ 91 $102 $ 85 $105 $184
- ---------------------------------------------------------------------------------------------------------------
S&P MidCap 400 Index $100 $101 $118 $117 $100 $135 $158
- ---------------------------------------------------------------------------------------------------------------
S&P MidCap Diversified
Commercial Services Index $100 $ 94 $132 $126 $110 $157 $175
- ---------------------------------------------------------------------------------------------------------------
Old Custom Composite
Index $100 $110 $ 98 $126 $133 $166 $240
- ---------------------------------------------------------------------------------------------------------------
- ---------
(1) As of December 31, 1999, the Company's common stock consisted of three
tracking stocks: Pittston Brink's Group Common Stock ("Brink's Stock"),
Pittston BAX Group Common Stock ("BAX Stock") and Pittston Minerals Group
Common Stock ("Minerals Stock"). On January 14, 2000, the Company completed
an exchange (the "Exchange") of BAX Stock and Minerals Stock into Brink's
Stock, at exchange ratios of .4848 share of Brink's Stock for each share of
BAX Stock and .0817 share of Brink's Stock for each share of Minerals Stock.
As a result of the Exchange, the Company now has one class of common stock,
Brink's Common Stock, instead of three separate classes of common stock,
each of which was intended to track the performance of certain of the
Company's business units. For the line designated as "The Brink's Company"
the graph depicts the cumulative return on $100 invested in Brink's Stock
until January 14, 2000 and, after such date, in Brink's Common Stock. For
the Old Custom Composite Index, the S&P MidCap 400 Index and the S&P MidCap
Diversified Commercial Services Index, cumulative returns are measured on an
annual basis for the periods from December 31, 1999 through December 31,
2004, with the value of each index set to $100 on December 31, 1999. Total
return assumes reinvestment of dividends. The returns of the component
companies included in the Old Custom Composite Index are weighted according
to each company's market capitalization at the beginning of each period.
Companies in the Old Custom Composite Index are as follows: Airborne Inc.
(through second quarter of 2003), Air Express International Corporation
(through first quarter of 2000), Arch Coal Inc., Burns International
Services Corp. (through second quarter of 2000), Circle International Group
Inc. (through third quarter of 2000), Expeditors International of Washington
Inc., FedEx Corp., Protection One Inc., Wackenhut Corporation (Class A)
(through first quarter of 2002) and Westmoreland Coal Co. The Company chose
the S&P MidCap 400 Index and the S&P MidCap Diversified Commercial Services
Index because the Company is included in these indices, which broadly
measure the performance of mid-size companies in the United States market.
16
PROPOSALS OF THE BOARD
The following proposals are expected to be presented to the meeting. Holders
of Brink's Common Stock will have one vote per share.
PROPOSAL NO. 1 -- ELECTION OF DIRECTORS: in order to be elected, nominees
for director must receive a plurality of the votes cast by those present in
person or represented by proxy at the meeting and entitled to vote thereon.
Abstentions and shares held by a broker in "street name" ("Brokers' Shares")
that are not voted in the election of directors will not be included in
determining the number of votes cast.
PROPOSAL NO. 2 -- APPROVAL OF THE SELECTION OF INDEPENDENT PUBLIC
ACCOUNTANTS: must receive more votes cast in favor of such proposal by holders
of the shares present in person or represented by proxy at the meeting and
entitled to vote thereon than votes cast in opposition to such proposal by such
holders. Abstentions and Brokers' Shares that are not voted on Proposal No. 2
will not be counted in determining the number of votes cast.
PROPOSAL NO. 3 -- APPROVAL OF THE MATERIAL TERMS OF THE PERFORMANCE GOALS
UNDER THE MANAGEMENT PERFORMANCE IMPROVEMENT PLAN: must receive the affirmative
vote of the holders of a majority of the shares cast with respect to such
proposal, provided that the total vote cast on the proposal represents over 50%
of the outstanding shares. Abstentions will have the same effect as a vote
against the proposal.
Absent voting instructions from a shareholder, a broker may or may not vote
Brokers' Shares in its discretion depending on the proposals before the meeting.
Under the rules of the New York Stock Exchange, a broker may vote Brokers'
Shares in its discretion on "routine matters." The Company believes that the
election of directors and the approval of the selection of independent public
accountants are routine matters on which brokers will be permitted to vote on
behalf of their clients if no voting instructions are furnished. Under the rules
of the New York Stock Exchange, however, a broker may not be able to vote on
proposals that are not considered "routine." When a proposal is not a routine
matter and the broker has not received voting instructions with respect to that
proposal, the broker cannot vote on that proposal. The Company believes that
this proposal is a non-routine matter. As such, Brokers' Shares that are not
voted on Proposal No. 3 will have no effect on the proposal, provided that the
total vote cast represents over 50% of the outstanding shares.
PROPOSAL NO. 4 -- APPROVAL OF THE BRINK'S COMPANY 2005 EQUITY INCENTIVE
PLAN: must receive the affirmative vote of the holders of a majority of the
shares cast with respect to such proposal, provided that the total vote cast on
the proposal represents over 50% of the outstanding shares. Abstentions will
have the same effect as a vote against the proposal. The Company believes that
this proposal is a non-routine matter. Brokers' Shares that are not voted on
Proposal No. 4 will have no effect on the proposal, provided that the total vote
cast represents over 50% of the outstanding shares.
17
PROPOSAL NO. 1 -- ELECTION OF DIRECTORS
In accordance with the Company's charter and bylaws, the Board of Directors
is divided into three classes, with the term of office of one of the three
classes of directors expiring each year and with each class being elected for a
three-year term.
The nominees for election as directors are: Mr. Gross for a one-year term
expiring in 2006 and Messrs. Breslawsky, Brinzo, and Dan, each for a three-year
term expiring in 2008. Notwithstanding the Company's corporate governance policy
regarding director retirement age, Mr. Gross has been nominated by the Board, in
its good faith business judgment, to serve until 2006.
The Board of Directors has no reason to believe that any of the nominees are
not available or will not serve if elected. If any of them should become
unavailable to serve as a director, full discretion is reserved to the persons
named as proxies to vote for such other persons as may be properly nominated.
Set forth below is information concerning the age, principal occupation and
employment during the past five years, other directorships and positions with
the Company of each nominee and director, and the year in which he or she first
became a director of the Company.
NOMINEE FOR ELECTION AS DIRECTOR FOR
A ONE-YEAR TERM EXPIRING IN 2006
[Ronald M. Gross photo] RONALD M. GROSS, 71, is Chairman Emeritus of Rayonier Inc., a
global supplier of specialty pulps, timber and wood
(1), (3), (4) products, after retiring as Chairman and Chief Executive
Officer at the end of 1998. Mr. Gross was President and
Chief Operating Officer from 1978, when he joined Rayonier,
until 1981; President and Chief Executive Officer from 1981
to 1984; Chairman, President and Chief Executive Officer
from 1984 to 1996; and Chairman and Chief Executive Officer
from 1996 to 1998. He is a director of Rayonier Inc. and
Corn Products International, Inc. Mr. Gross has been a
director of the Company since 1995.
NOMINEES FOR ELECTION AS DIRECTORS FOR A THREE-YEAR TERM
EXPIRING IN 2008
[Marc C. Breslawsky photo] MARC C. BRESLAWSKY, 62, is Chairman and Chief Executive
Officer of Imagistics International Inc., a company engaged
(1), (4), (5) in direct sales, service and marketing of enterprise office
imaging and document solutions, and has held that position
since 2001. From 1996 to 2001, he was President and Chief
Operating Officer of Pitney Bowes Inc., and Vice Chairman
from 1994 to 1996. Mr. Breslawsky is a director of
Imagistics International Inc., The United Illuminating
Company and C.R. Bard, Inc. Mr. Breslawsky has been a
director of the Company since 1999.
18
[John S. Brinzo photo] JOHN S. BRINZO, 63, has been Chairman, President and Chief
Executive Officer of Cleveland-Cliffs Inc, a supplier of
(1), (4), (5) iron ore products to the steel industry in North America,
China and Europe, since July 2003. Prior to his current
position, Mr. Brinzo served as Chairman and Chief Executive
Officer of Cleveland-Cliffs Inc from January 2000 through
June 2003 and President and Chief Executive Officer from
November 1997 through December 1999. Mr. Brinzo is also a
director of Cleveland-Cliffs Inc and Chairman of the
National Mining Association, the trade association of the
North American mining industry. Mr. Brinzo has been a
director of the Company since 2004.
[Michael T. Dan Photo] MICHAEL T. DAN, 54, is Chairman of the Board, President and
Chief Executive Officer of the Company. Prior to his
(4) election as President and Chief Executive Officer in
February 1998, he served as President and Chief Executive
Officer of Brink's, Incorporated beginning in 1993. Mr. Dan
has been a director of the Company since 1998.
CONTINUING DIRECTORS
[Roger G. Ackerman Photo] ROGER G. ACKERMAN, 66, is the retired Chairman and Chief
Executive Officer of Corning Incorporated, a company engaged
(2), (4), (5) in specialty glass, ceramics and communications. He retired
as Chairman of the Board of Corning Incorporated in June
2001. From 1996 through 2000, Mr. Ackerman served as Chief
Executive Officer of Corning Incorporated, prior to which he
served as President and Chief Operating Officer from 1992 to
1996. He is a director of Massachusetts Mutual Life
Insurance Company. Mr. Ackerman has been a director of the
Company since 1991. His current term as a director of the
Company expires in 2006.
[Betty C. Alewine Photo] BETTY C. ALEWINE, 56, is the retired President and Chief
Executive Officer of COMSAT Corporation, a provider of
(3), (4), (6) global satellite services and digital networking services
and technology. Mrs. Alewine served as President and Chief
Executive Officer of COMSAT from 1996 until August 2000,
when the company was acquired by Lockheed Martin
Corporation. She served as President of COMSAT's largest
operating unit from 1994 to 1996. She is a director of New
York Life Insurance Company and Rockwell Automation, Inc.
Mrs. Alewine has been a director of the Company since 2000.
Her current term as a director of the Company expires in
2006.
19
[James R. Barker Photo] JAMES R. BARKER, 69, is Chairman of The Interlake Steamship
Co., vessel owners and operators of self unloaders, a
(1), (2), (4) position he has held since 1987. He is also Vice Chairman of
Mormac Marine Group, Inc., a vessel operating company, and
Moran Towing Corporation, tug and barge owners and
operators. He is a director of Verizon Communications Inc.
Mr. Barker has been a director of the Company since 1993.
His current term as a director of the Company expires in
2007.
[James L. Broadhead Photo] JAMES L. BROADHEAD, 69, is the retired Chairman and Chief
Executive Officer of FPL Group, Inc., a public utility
(2), (4), (6) holding company. He served as Chief Executive Officer and
Chairman of FPL Group, Inc. from 1989 and 1990,
respectively, until his retirement in December 2001. He is a
director of New York Life Insurance Company. Mr. Broadhead
has been a director of the Company since 1983. His current
term as a director of the Company expires in 2007.
[Carl S. Sloane Photo] CARL S. SLOANE, 68, is a private consultant and the Ernest L.
Arbuckle Professor of Business Administration, Emeritus at
(1), (4), (6) Harvard University, Graduate School of Business
Administration. From 1991 to 2000, he served as the Ernest
L. Arbuckle Professor of Business Administration at Harvard
University, Graduate School of Business Administration. He
is a director of Rayonier Inc. Mr. Sloane has been a
director of the Company since 1998. His current term as a
director of the Company expires in 2006.
[Ronald L. Turner Photo] RONALD L. TURNER, 58, has been Chairman, President and Chief
Executive Officer of Ceridian Corporation since January
(3), (4), (5) 2000. Ceridian Corporation is an information services
company providing outsourcing services to the human
resources, transportation and retail markets, and operates
in the U.S., Canada and Europe. Mr. Turner served as Chief
Operating Officer of Ceridian from April 1998 to January
2000; Executive Vice President of Operations from March 1997
to April 1998; and has been a director of Ceridian since
July 1998. He is also a director of FLIR Systems, Inc. and
Imagistics International Inc. Mr. Turner was elected a
director of the Company in 2002. His current term as a
director of the Company expires in 2007.
- ---------
(1) Audit and Ethics Committee
(2) Compensation and Benefits Committee
(3) Corporate Governance and Nominating Committee
(4) Executive Committee
(5) Finance Committee
(6) Pension Committee
RECOMMENDATION OF THE BOARD
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE
FOR ALL NOMINEES FOR ELECTION AS DIRECTORS.
20
STOCK OWNERSHIP
Based in part on information furnished by each nominee, director and
executive officer named in the Summary Compensation Table, the number of shares
of Brink's Common Stock beneficially owned by them at January 31, 2005, was as
follows:
NAME OF INDIVIDUAL NUMBER OF SHARES
OR IDENTITY OF GROUP BENEFICIALLY OWNED(a) PERCENT OF CLASS*
- -------------------- --------------------- -----------------
R. G. Ackerman.................................. 28,992(b) *
B. C. Alewine................................... 16,506(b) *
J. R. Barker.................................... 25,985(b) *
M. C. Breslawsky................................ 31,054(b) *
J. S. Brinzo.................................... 0 *
J. L. Broadhead................................. 26,972(b) *
M. T. Dan....................................... 865,058(c) 1.52%
G. Grinstein.................................... 31,054(b) *
R. M. Gross..................................... 38,128(b) *
J. B. Hartough.................................. 108,233(c) *
F. T. Lennon.................................... 153,085(c) *
A. F. Reed...................................... 123,991(c)(d) *
R. T. Ritter.................................... 196,553(c) *
C. S. Sloane.................................... 34,041(b) *
R. L. Turner.................................... 6,582(b) *
15 nominees, directors and executive officers as
a group....................................... 1,686,234 2.97%
- ---------
* Except as otherwise noted, the named individuals have sole voting and
investment power with respect to such shares of Brink's Common Stock. None
of such individuals beneficially owns more than 1% of the outstanding
Brink's Common Stock, unless otherwise noted above.
(a) Includes shares of Brink's Common Stock which could be acquired within 60
days after January 31, 2005, upon the exercise of options granted pursuant
to the Company's stock option plans, as follows:
Mrs. Alewine............................................ 12,585
Mr. Barker.............................................. 18,057
Mr. Brinzo.............................................. 0
Mr. Dan................................................. 652,600
Mr. Gross............................................... 30,175
Mr. Hartough............................................ 51,834
Mr. Ritter.............................................. 135,309
Mr. Turner.............................................. 5,034
Each of Messrs. Ackerman and Broadhead.................. 18,758
Each of Messrs. Breslawksy, Grinstein and Sloane........ 26,430
Each of Messrs. Lennon and Reed......................... 71,667
All nominees, directors and executive officers as a
group (15 persons)..................................... 1,165,734
(b) Includes units representing shares of Brink's Common Stock, rounded to the
nearest whole unit, credited to each director's account under the
Directors' Stock Accumulation Plan on or prior to January 31, 2005, as
follows:
Mr. Ackerman............................................ 5,569
Mrs. Alewine............................................ 3,921
Mr. Barker.............................................. 6,670
Mr. Brinzo.............................................. 0
Mr. Broadhead........................................... 6,255
Mr. Gross............................................... 7,324
Mr. Sloane.............................................. 5,028
Mr. Turner.............................................. 1,548
Each of Messrs. Breslawsky and Grinstein................ 4,624
(footnotes continued on next page)
21
(footnotes continued from previous page)
(c) Includes units representing shares of Brink's Common Stock, rounded to the
nearest whole unit, credited to respective accounts under the Deferred
Compensation Program on or prior to January 31, 2005, as follows:
Mr. Dan................................................. 179,994
Mr. Hartough............................................ 37,651
Mr. Lennon.............................................. 66,681
Mr. Reed................................................ 42,737
Mr. Ritter.............................................. 49,307
Non-employee directors do not participate in the Deferred Compensation
Program.
(d) Includes 102 shares of Brink's Common Stock held jointly by Mr. Reed with
his son, 222 shares of Brink's Common Stock held jointly by Mr. Reed with
his daughter, and 4,441 shares of Brink's Common Stock held jointly by Mr.
Reed with his wife.
The following table sets forth the only persons known to the Company to be
deemed beneficial owners of more than five percent of the outstanding Brink's
Common Stock as of the dates set forth in the footnotes to the table:
NAME AND ADDRESS OF NUMBER OF SHARES PERCENT
BENEFICIAL OWNER BENEFICIALLY OWNED OF CLASS
---------------- ------------------ --------
Barclays Global Investors, NA
Barclays Global Fund Advisors
45 Fremont Street
San Francisco, CA 94105................................. 3,220,670(a) 6.57%(a)
MMI Investments, L.P.
MCM Management, LLC
152 West 57th Street
New York, NY 10019........................................ 2,906,500(b) 5.4% (b)
- ---------
(a) According to a report on Schedule 13G dated February 13, 2004, filed with
the SEC by Barclays Global Investors, NA, ("Barclays"), a bank as defined
in the Securities Exchange Act of 1934, on behalf of itself and Barclays
Global Fund Advisors, an investment advisor registered under the Investment
Advisers Act of 1940 ("Barclays Advisors"), Barclays and Barclays Advisors
had sole voting power over 3,220,670 shares of Brink's Common Stock, shared
voting power over no shares of Brink's Common Stock, sole dispositive power
over 3,220,670 shares of Brink's Common Stock and shared dispositive power
over no shares of Brink's Common Stock, all of such shares being held in
trust accounts for the economic benefit of the beneficiaries of those
accounts.
(b) According to a report on Schedule 13D dated February 2, 2004, filed with
the SEC by MMI Investments, L.P. ("MMI"), a Delaware limited partnership
engaged primarily in the business of investing in publicly traded
securities, on behalf of itself and MCM Management, LLC, a Delaware limited
liability company that is the sole general partner of MMI and whose
principal business is investing in publicly traded securities ("MCM"), MMI
and MCM had sole voting power over 2,906,500 shares of Brink's Common
Stock, shared voting power over no shares of Brink's Common Stock, sole
dispositive power over 2,906,500 shares of Brink's Common Stock and shared
dispositive power over no shares of Brink's Common Stock.
22
PROPOSAL NO. 2 -- APPROVAL OF THE SELECTION OF
INDEPENDENT PUBLIC ACCOUNTANTS
The Audit Committee has, subject to shareholder approval, selected KPMG as
the Company's independent public accountants for the year 2005 and recommends
approval of such selection by the shareholders. KPMG served in this capacity for
the year 2004. One or more representatives of KPMG are expected to attend the
annual meeting and will have the opportunity to make a statement if they desire
to do so and are expected to be available to respond to appropriate questions.
FEES PAID TO KPMG
The following table lists fees billed by KPMG for services rendered in
fiscal years 2003 and 2004.
2004 2003
---- ----
(IN THOUSANDS)
Audit Fees.................................................. $11,058 $4,335
Audit-Related Fees.......................................... 386 500
Tax Fees.................................................... 960 472
All Other Fees.............................................. 6 --
------- ------
Total Fees.............................................. $12,410 $5,307
------- ------
------- ------
AUDIT FEES are primarily for professional services provided in connection
with the audit of the Company's financial statements and review of quarterly
consolidated financial statements (including the audit of management's
assessment of internal controls required by Section 404 of the Sarbanes-Oxley
Act of 2002, the fees for which were approximately $5.9 million) and audit
services provided in connection with other statutory or regulatory filings.
AUDIT-RELATED FEES primarily include fees for assurance services that are
reasonably related to the audit of the Company's consolidated financial
statements and for services in connection with audits of the Company's pension
and other employee benefit plans.
TAX FEES primarily include fees associated with tax compliance and tax
advice, as well as domestic and international tax planning. This category also
includes tax planning on mergers and acquisitions and restructurings, as well as
other services related to tax disclosure and filing requirements.
ALL OTHER FEES are for services provided to the Company not otherwise
included in the categories above.
CONSIDERATION OF AUDITOR INDEPENDENCE
The Audit Committee has concluded that the provision of the non-audit
services by KPMG is compatible with maintaining their independence.
RECOMMENDATION
THE AUDIT AND ETHICS COMMITTEE OF THE BOARD OF DIRECTORS RECOMMENDS THAT THE
SHAREHOLDERS VOTE FOR THE APPROVAL OF THE INDEPENDENT PUBLIC ACCOUNTANTS.
-------------------
PROPOSAL NO. 3 -- APPROVAL OF THE MATERIAL TERMS OF THE
PERFORMANCE GOALS UNDER THE BRINK'S COMPANY
MANAGEMENT PERFORMANCE IMPROVEMENT PLAN
The Brink's Company Management Performance Improvement Plan (the "MPIP") was
approved by the Company's shareholders at the 2000 annual meeting and became
effective as of January 1, 2000. The purpose of the MPIP is to promote the
interests of the Company and its subsidiaries by linking financial incentives
provided to participants with improvements in the Company's financial results.
Shareholders are being asked to approve the material terms of the
performance goals under the MPIP, as amended. This approval is necessary to
preserve the Company's federal income tax deduction
23
for performance-based compensation paid to certain executive officers under
Section 162(m) of the Internal Revenue Code.
Section 162(m) imposes an annual deduction limit of $1 million on the amount
of compensation paid to each of the chief executive officer and the four other
highest compensated officers of the Company. The deduction limit does not apply
to performance-based compensation that satisfies the requirements of Section
162(m). The requirements of Section 162(m) for performance-based compensation
include shareholder approval of the material terms of the performance goals
under which the compensation is paid and the re-approval of such performance
goals every five years.
MATERIAL TERMS OF THE PERFORMANCE GOALS
The Compensation Committee administers the MPIP and is authorized to select
key employees of the Company and its subsidiaries to participate in the MPIP.
All members of the Compensation Committee must qualify as non-employee directors
within the meaning of Rule 16b-3(b)(3) issued under the Exchange Act, and as an
outside director under Section 162(m) of the Internal Revenue Code. Individuals
who, in the opinion of the Compensation Committee, have the capacity to
contribute significantly to the successful performance of the Company and its
subsidiaries are eligible to participate in the MPIP.
Each participant will be periodically granted awards ("Performance Awards")
that will entitle him or her to receive cash payments following the completion
of a three-year performance cycle ("Performance Measurement Period"), provided
that specified performance measures and certain conditions described in the MPIP
relating to continuation of employment are satisfied. The Compensation Committee
will establish performance measures for each Performance Award which will be
based on performance measures that include, but are not limited to, (a) net
income, (b) operating income, (c) earnings per share, (d) return on equity,
(e) return on capital and/or economic value added (or equivalent metric),
(f) cash flow and/or free cash flow (before or after dividends), (g) revenue
growth, (h) subscriber growth on a gross or net basis, (i) total shareholder
return, (j) net revenue per employee, (k) market share, and/or (l) return on net
assets, each as determined by the Compensation Committee with respect to the
Company, any subsidiary and/or any business unit of the Company or any
subsidiary and in accordance with generally accepted accounting principles,
where applicable, as consistently applied by the Company and, if so determined
by the Compensation Committee prior to the expiration of the Performance
Measurement Period, adjusted, to the extent permitted under Section 162(m) of
the Internal Revenue Code, to omit the effects of extraordinary items, the gain
or loss on the disposal of a business segment, unusual or infrequently occurring
events and transactions, accruals for awards under the MPIP and cumulative
effects of changes in accounting principles. Performance measures may vary from
Performance Measurement Period to Performance Measurement Period and from
participant to participant and may be established on a stand-alone basis, in
tandem or in the alternative. The maximum incentive payment any one participant
may be entitled to receive for any one Performance Measurement Period is
$3,000,000. Notwithstanding the foregoing, with respect to Performance
Measurement Periods beginning on or after January 1, 2005 and provided that no
change of control (as defined in the MPIP) shall have occurred, the Compensation
Committee may, in its discretion, reduce any payment to which a participant who
is an employee of the Company would otherwise be entitled by such amount or
percentage as the Compensation Committee deems appropriate.
OTHER MATERIAL TERMS OF THE MPIP
A Performance Award shall terminate unless the participant remains
continuously employed by the Company or a subsidiary until the date established
by the Committee for payment of the Performance Award unless the termination is
(i) due to retirement (determined under the Pension-Retirement Plan of Company
or other similar plan sponsored by the Company or a subsidiary in which the
participant participates) ("Retirement"), disability (physical or mental
incapacity which would entitle the participant to benefits under the Company's
long-term disability plan) ("Disability") or death; (ii) approved by the
Compensation Committee; or (iii) subsequent to a change in control (as defined
in the MPIP). In the event a participant's employment is terminated due to
Retirement, Disability or
24
death, he or she (or, in the event of the participant's death, his or her
beneficiary) will be entitled to a prorated portion of the Performance Award to
which he or she would otherwise be entitled based on the portion of the
Performance Measurement Period (determined in completed months) during which he
or she was continuously employed by the Company or a subsidiary and based on the
extent to which the performance goals were achieved as determined at the end of
the Performance Measurement Period. In the event of a participant's termination
of employment for reasons other than Retirement, Disability or death, the
Compensation Committee may, but is not obligated to, authorize payment of an
amount up to the prorated amount that would be payable under the preceding
sentence. In the event of a change in control, Performance Awards will be deemed
to be earned at 150% of the specified target dollar amount applicable to the
Performance Award and will be paid as soon as practicable following the earlier
of the participant's termination of employment after the change in control or
the end of the Performance Measurement Period during which the change in control
occurred.
Participants entitled to receive a Performance Award for a Performance
Measurement Period will be entitled to receive a lump-sum cash payment on a date
selected by the Compensation Committee following the end of the Performance
Measurement Period provided that the performance measures are met. Participants
may elect to defer the receipt of payment of a Performance Award under the
Deferred Compensation Program in accordance with the terms of such plan. Any
payments made under the MPIP shall be subject to all applicable Federal, state
or local taxes required by law to be withheld.
The Board of Directors may amend or terminate the MPIP at any time without
the approval of the Company's shareholders.
BENEFITS
The following table sets forth the benefits payable under the MPIP to the 28
employee participants for the 2002-2004 Performance Measurement Period which
ended on December 31, 2004.
NAME AND PRINCIPAL POSITION COMPENSATION
--------------------------- ------------
M. T. Dan
Chairman, President and Chief Executive Officer........... $ 907,800
R.T. Ritter
Vice President and Chief Financial Officer................ $ 249,645
F. T. Lennon
Vice President -- Human Resources and Administration...... $ 189,125
A. F. Reed
Vice President, General Counsel and Secretary............. $ 189,125
J. B. Hartough
Vice President -- Corporate Finance and Treasurer......... $ 105,910
Section 16 Group (as a whole)............................... $1,641,605
Non-Section 16 Group (as a whole)........................... $2,302,365
RECOMMENDATION OF THE BOARD
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS
VOTE FOR THE APPROVAL OF THE MATERIAL TERMS OF THE PERFORMANCE GOALS UNDER THE
BRINK'S COMPANY MANAGEMENT PERFORMANCE IMPROVEMENT PLAN.
-------------------
PROPOSAL NO. 4 -- APPROVAL OF THE BRINK'S COMPANY
2005 EQUITY INCENTIVE PLAN
The Company currently maintains equity-based compensation arrangements
designed to provide an additional incentive for the officers and employees who
are key to the Company's success. The Board of Directors believes that these
plans have been effective in providing such an incentive. The Board also
25
believes that, for the Company to continue to attract and retain outstanding
individuals at all levels of the Company's organization, it must continue to
have incentive plans of these types in place.
The Brink's Company 1988 Stock Option Plan (the "1988 Stock Option Plan")
was approved by the Company's shareholders and has served as an important part
of the Company's overall compensation program through its enabling of stock
option grants to employees. With The Brink's Company 2005 Equity Incentive Plan
(the "2005 Plan"), the Company has broadened the types of equity awards that can
be granted, and updated the plan by including other provisions that are
consistent with similar plans currently being adopted by public companies.
As of December 31, 2004, there were 461,660 shares of the common stock of
the Company available for grant under the 1988 Stock Option Plan. If approved,
the 2005 Plan will become effective May 6, 2005 and will replace the 1988 Stock
Option Plan for new grants. The 2005 Plan is being presented for shareholder
approval to comply with certain regulatory requirements. If shareholders do not
approve the 2005 Plan, it will not be adopted and no grants will be made under
it. In such a case, the Company's existing plan will remain in effect.
2005 EQUITY INCENTIVE PLAN
The proposed 2005 Plan is attached as Exhibit A to this proxy statement. The
principal features of the 2005 Plan are summarized below.
Shares Available for Awards
Under the 2005 Plan, the number of shares of common stock available for
issuance will be 5,000,000 shares, subject to adjustment by the Compensation
Committee (defined below) for stock splits and other events as set forth in the
2005 Plan. Shares covered by an award granted under the 2005 Plan other than
options and stock appreciation rights will be counted against the 2005 Plan's
authorized shares as two shares for every one share covered by the award. In
addition, each stock appreciation right will be counted against the 2005 Plan's
authorized shares, regardless of whether a share is used to settle the stock
appreciation right upon exercise. If an award under the 2005 Plan is cancelled
or forfeited without the delivery of the full number of shares underlying such
award, only the net number of shares actually delivered to the participant will
be counted against the 2005 Plan's authorized shares. If an outstanding award
under 1988 Stock Option Plan is cancelled or forfeited without the delivery of
the number of shares underlying such award, such undelivered shares will also be
available for issuance under the 2005 Plan in addition to all other shares
authorized for issuance. Also, shares underlying awards issued in assumption of
or substitution for awards issued by a company acquired by the Company
("Substitute Awards") will not reduce the number of shares remaining available
for issuance under the 2005 Plan.
No Participant may receive options and stock appreciation rights under the
2005 Plan relating to more than 400,000 shares of common stock, subject to
adjustment as noted above, in any calendar year.
Material Features of the 2005 Plan
The 2005 Plan will be administered by the Compensation and Benefits
Committee (the "Compensation Committee"), a board committee consisting of not
less than three directors. Each director on the Compensation Committee is and
will continue to be "independent" of the Company, as required by the rules of
the New York Stock Exchange. The Compensation Committee will have, among other
powers, the power to interpret and construe any provision of the 2005 Plan, to
adopt rules and regulations for administering the 2005 Plan and to perform other
acts relating to the 2005 Plan. Decisions of the Compensation Committee are
final and binding on all parties.
The Compensation Committee will have the sole discretion to grant to
eligible participants one or more equity awards, including options, stock
appreciation rights, restricted stock and restricted stock units, performance
units, "other stock based awards" or any combination thereof. The Compensation
Committee will have the sole discretion to determine the number or amount of any
award to be awarded to any participant.
26
If the Compensation Committee determines that a dividend or other
distribution, recapitalization, stock split, or other corporate event or
transaction (more fully described in Section 5(d) of the 2005 Plan) affects the
shares in such a way that an adjustment is appropriate to prevent dilution or
enlargement of the benefits, or potential benefits, intended to be made
available under the 2005 Plan, the Compensation Committee may adjust: (i) the
number and type of shares (or other securities) which may be made the subject of
awards, (ii) the number and type of shares (or other securities or property)
subject to outstanding awards, and (iii) the grant, purchase or exercise price
with respect to any award. The Compensation Committee may not take any other
action to directly or indirectly reduce, or have the effect of reducing, the
exercise price of any option as established at the time of grant.
Awards will be granted for no cash consideration, or for minimal cash
consideration if required by applicable law. Awards may provide that upon their
exercise the holder will receive cash, stock, other securities or other awards
or any combination thereof, as the Compensation Committee will determine. Any
shares of stock deliverable under the 2005 Plan may consist in whole or in part
of authorized and unissued shares or shares acquired by the Company.
Except in the case of awards made through assumption of, or in substitution
for, outstanding awards previously granted by an acquired company, the exercise
price of stock under any stock option, the grant price of any stock appreciation
right, and the purchase price of any security which may be purchased under any
other stock-based award will not be less than 100% of the fair market value of
the stock or other security on the date of the grant of the option, right or
award. The Compensation Committee will determine the times at which options and
other purchase rights may be exercised and the methods by which and the forms in
which payment of the purchase price may be made. Under the 2005 Plan,
determinations of the fair market value of shares of the Company's common stock
will be based on the average of the high and low quoted sales price on the date
in question and determinations of fair market value with respect to other
property will be made in accordance with methods or procedures established by
the Compensation Committee.
The Compensation Committee may cancel any outstanding award under the 2005
Plan in consideration of a cash payment or alternative award under the 2005 Plan
made to the holder of such canceled award equal in value to the fair market
value of such canceled award, but this authority may not be used to avoid the
2005 Plan's prohibition on option repricing.
No awards may be granted under the 2005 Plan after the date of the annual
shareholders meeting in 2015.
Awards
Options. The duration of options granted under the 2005 Plan will be
established by the Compensation Committee but may not exceed six years. Subject
to a minimum vesting period of one year, the Compensation Committee may impose a
vesting schedule on options, and will determine the acceptable form(s) in which
the exercise price may be paid. In general, options are exercisable following
termination of employment for 90 days, if such options were exercisable at the
time of termination. Upon termination of employment by reason of the holder's
retirement or permanent and total disability, options held by the holder will
remain outstanding and continue in accordance with their terms. In the event of
the holder's death while employed or after retirement or permanent and total
disability, options held by the holder will fully vest at the time of the
holder's death (or, if later, on the first anniversary of the grant date) and
remain exercisable by the holder's beneficiary or estate for three years
following the holder's death or their earlier expiration in accordance with
their terms. Also, the Compensation Committee may establish provisions
applicable to options upon termination of employment that differ from those
contained in the 2005 Plan.
Options granted under the 2005 Plan may be "incentive stock options"
("ISOs"), which afford certain favorable tax treatment for the holder, or
"nonqualified stock options" ("NQSOs"). See "Tax Matters" below.
27
Stock Appreciation Rights. Stock appreciation rights ("SARs") may, but need
not, relate to options. The Compensation Committee determines the terms of each
SAR at the time of the grant. Any freestanding SAR may not be granted at less
than the fair market value of the stock on the date the SAR is granted, cannot
have a term of longer than six years and must have a minimum vesting period of
one year. The employment termination provisions applicable to SARs are identical
to those described above for options.
Restricted Stock and Restricted Stock Units. The Compensation Committee may
impose restrictions on restricted stock and restricted stock units at its
discretion. These restrictions may lapse as the Compensation Committee deems
appropriate, subject to a one year minimum vesting requirement. Upon termination
of employment during the restriction period by reason of the holder's retirement
or permanent and total disability, any restricted stock and restricted stock
units held by the participant will remain outstanding and continue in accordance
with their terms. In the event of the holder's death while employed or after
retirement or permanent and total disability, restricted stock and restricted
stock units held by the holder will fully vest at the time of the holder's death
(or, if later, on the first anniversary of the grant date). Upon termination of
employment during the restriction period for any other reason, the restricted
stock and restricted stock units held by the participant will be forfeited.
Also, the Compensation Committee may establish provisions applicable to
restricted stock and restricted stock units upon termination of employment that
differ from those contained in the 2005 Plan.
Performance Units. Performance units will be granted and will vest upon the
attainment of performance goals. The Compensation Committee will establish the
performance criteria, the length of the performance period and the form and time
of payment of the award. Generally, upon termination of employment during the
restriction period, the performance units held by the participant will be
forfeited. Upon termination of employment during the restriction period by
reason of the holder's retirement or permanent and total disability, any
performance units held by the participant will remain outstanding and continue
in accordance with their terms. In the event of the holder's death, the holder's
beneficiary or estate will receive a pro-rata portion of the performance unit
upon the expiration of the applicable performance period. Also, the Compensation
Committee may establish provisions applicable to performance units upon
termination of employment that differ from those contained in the 2005 Plan.
Awards (other than options and stock appreciation rights) to certain senior
executives will, if the Compensation Committee intends any such award to qualify
as "qualified performance based compensation" under Section 162(m) of the
Internal Revenue Code, become earned and payable only if pre-established targets
relating to one or more of the following performance measures are achieved
during a performance period or periods, as determined by the Compensation
Committee: (i) net income, (ii) operating income, (iii) return on net assets,
(iv) revenue growth, (v) total shareholder return, (vi) earnings per share,
(vii) return on equity, (viii) net revenue per employee, (ix) market share,
(x) return on capital and/or economic value added (or equivalent metric),
(xi) cash flow and/or free cash flow (before or after dividends), or
(xii) subscriber growth (on a gross or net basis); each as determined in
accordance with generally accepted accounting principles, where applicable, as
consistently applied by the Company and, if so determined by the Compensation
Committee prior to the expiration of such award, adjusted, to the extent
permitted under Section 162(m) of the Internal Revenue Code if the Compensation
Committee intends the performance unit award to continue to constitute
"qualified performance-based compensation" under Section 162(m) of the Internal
Revenue Code, to omit the effects of extraordinary items, the gain or loss on
the disposal of a business segment, unusual or infrequently occurring events and
transactions, accruals for awards under the 2005 Plan and cumulative effects of
changes in accounting principles. Such targets may relate to the Company as a
whole, or to one or more units thereof, and may be measured over such periods,
as the Compensation Committee shall determine. The maximum number of shares
which may be subject to any such performance unit award denominated in shares
granted in any year is 400,000 shares and the maximum amount earned with respect
to any such performance unit award denominated in cash or value other than cash
on an annualized basis will be $5,000,000.
28
Other Stock-Based Awards. The Compensation Committee may establish the terms
and conditions of other stock-based awards such as dividend equivalents.
Transferability
The 2005 Plan provides that no award granted under the 2005 Plan may be
transferred or otherwise encumbered by the individual to whom it is granted,
other than by will or by designation of a beneficiary and that, during the
individual's lifetime, each award will be exercisable only by the individual or
by the individual's guardian or legal representative.
Change in Control
Unless specifically provided to the contrary in any applicable award
agreement under the 2005 Plan, upon a Change in Control (as defined in the 2005
Plan), all outstanding awards will become fully exercisable, will vest and will
be settled, as applicable, and any restrictions applicable to any award shall
automatically lapse.
Eligibility and Participation
Any employee of the Company or its affiliates, including any officer or
employee-director, will be eligible to receive awards under the 2005 Plan.
Additionally, any holder of an outstanding equity based award issued by a
company acquired by the Company may be granted a Substitute Award under the 2005
Plan. The Company and its affiliates had approximately 54,000 employees as of
December 31, 2004. Directors who are not full-time or part-time officers or
employees of the Company will not be eligible to participate in the 2005 Plan.
Amendment and Termination
The Board of Directors may amend, alter, discontinue or terminate the 2005
Plan or any portion of the 2005 Plan any time. However, shareholder approval
must be obtained for any change that would increase the number of shares
available for awards and may be required by New York Stock Exchange requirements
for certain other amendments.
New Plan Benefits
Any awards under the 2005 Plan will be at the discretion of the Compensation
Committee. Therefore, it is not possible at present to determine the amount or
form of any award that will be available for grant to any individual during the
term of the 2005 Plan or that would have been granted during the last fiscal
year had the 2005 Plan been in effect.
Tax Matters
The following discussion is a brief summary of the principal United States
Federal income tax consequences under current Federal income tax laws relating
to awards under the 2005 Plan. This summary is not intended to be exhaustive
and, among other things, does not describe state, local or foreign income and
other tax consequences.
Non-Qualified Stock Options. An optionee will not recognize any taxable
income upon the grant of an NQSO and the Company will not be entitled to a tax
deduction with respect to the grant of an NQSO. Upon exercise of an NQSO, the
excess of the fair market value of the underlying shares of common stock on the
exercise date over the option exercise price will be taxable as compensation
income to the optionee and will be subject to applicable withholding taxes. The
Company will generally be entitled to a tax deduction at such time in the amount
of such compensation income. The optionee's tax basis for the shares received
pursuant to the exercise of an NQSO will equal the sum of the compensation
income recognized and the exercise price.
29
In the event of a sale of shares received upon the exercise of an NQSO, any
appreciation or depreciation after the exercise date generally will be taxed as
capital gain or loss and will be long-term capital gain or loss if the holding
period for such shares is more than one year.
Incentive Stock Options. An optionee will not recognize any taxable income
at the time of grant or timely exercise of an ISO and the Company will not be
entitled to a tax deduction with respect to such grant or exercise. Exercise of
an ISO may, however, give rise to taxable compensation income subject to
applicable withholding taxes, and a tax deduction to the Company, if the ISO is
not exercised on a timely basis (generally, while the optionee is employed by
the Company or within 90 days after termination of employment) or if the
optionee subsequently engages in a "disqualifying disposition," as described
below. Also, the excess of the fair market value of the underlying shares on the
date of exercise over the exercise price will be an item of income for purposes
of the optionee's alternative minimum tax.
A sale or exchange by an optionee of shares acquired upon the exercise of an
ISO more than one year after the transfer of the shares to such optionee and
more than two years after the date of grant of the ISO will result in any
difference between the net sale proceeds and the exercise price being treated as
long-term capital gain (or loss) to the optionee. If such sale or exchange takes
place within two years after the date of grant of the ISO or within one year
from the date of transfer of the ISO shares to the optionee, such sale or
exchange will generally constitute a "disqualifying disposition" of such shares
that will have the following results: any excess of (i) the lesser of (a) the
fair market value of the shares at the time of exercise of the ISO and (b) the
amount realized on such disqualifying disposition of the shares over (ii) the
option exercise price of such shares, will be ordinary income to the optionee,
subject to applicable withholding taxes, and the Company will be entitled to a
tax deduction in the amount of such income. Any further gain or loss after the
date of exercise generally will qualify as capital gain or loss and will not
result in any deduction by the Company.
Stock Appreciation Rights. Generally, the recipient of a stand-alone SAR
will not recognize taxable income at the time the stand-alone SAR is granted. If
an employee receives the appreciation inherent in the SARs in stock, the spread
between the then current market value and the grant price will be taxed as
ordinary income to the employee at the time it is received. An SAR settled in
cash would be subject to additional taxes under Section 409A of the Internal
Revenue Code and, as such, the Company currently does not intend to grant such
instruments. In general, there will be no federal income tax deduction allowed
to the Company upon the grant or termination of SARs. However, upon the exercise
of a SAR, the Company will be entitled to a deduction equal to the amount of
ordinary income the recipient is required to recognize as a result of the
exercise.
Restricted Stock. A grantee will not recognize any income upon the receipt
of restricted stock unless the holder elects under Section 83(b) of the Internal
Revenue Code, within thirty days of such receipt, to recognize ordinary income
in an amount equal to the fair market value of the restricted stock at the time
of receipt, less any amount paid for the shares. If the election is made, the
holder will not be allowed a deduction for amounts subsequently required to be
returned to the Company. If the election is not made, the holder will generally
recognize ordinary income, on the date that the restrictions to which the
restricted stock is subject are removed, in an amount equal to the fair market
value of such shares on such date, less any amount paid for the shares. At the
time the holder recognizes ordinary income, the Company generally will be
entitled to a deduction in the same amount.
Generally, upon a sale or other disposition of restricted stock with respect
to which the holder has recognized ordinary income (i.e., a Section 83(b)
election was previously made or the restrictions were previously removed), the
holder will recognize capital gain or loss in an amount equal to the difference
between the amount realized on such sale or other disposition and the holder's
basis in such shares. Such gain or loss will be long-term capital gain or loss
if the holding period for such shares is more than one year.
Restricted Stock Units and Performance Units. The grant of an award of
restricted stock units or a performance units will not result in income for the
grantee or in a tax deduction for the Company. Upon the settlement of such an
award, the grantee will recognize ordinary income equal to the aggregate
30
value of the payment received, and the Company generally will be entitled to a
tax deduction in the same amount.
RECOMMENDATION OF THE BOARD
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS
VOTE FOR THE APPROVAL OF THE
BRINK'S COMPANY 2005 EQUITY INCENTIVE PLAN.
-------------------
OTHER INFORMATION
SHAREHOLDER PROPOSALS
To nominate a director at the annual meeting, a shareholder must satisfy
conditions specified in the Company's bylaws. A shareholder who wishes to
suggest potential nominees to the Board of Directors for consideration should
write to the Corporate Governance and Nominating Committee through the method
described under "Communicating with Non-Management Members of the Board of
Directors" above, stating in detail the qualifications of such nominees for
consideration by the Corporate Governance Committee of the Board. The Company's
bylaws also prescribe the procedures a shareholder must follow to bring other
business before annual meetings. For a shareholder to nominate a director or
directors at the 2006 annual meeting or bring other business (including any
proposal intended for inclusion in the Company's proxy materials) before the
2006 annual meeting, notice must be given to the Secretary of the Company
between November 7, 2005, and January 6, 2006, inclusive. The notice must
include a description of the proposed business, the reason for it, the complete
text of any resolution and other matters specified in the bylaws.
Any shareholder desiring a copy of the Company's bylaws will be furnished
one without charge upon written request to the Secretary.
The Company's internet address is www.brinkscompany.com. The Company makes
available, free of charge, through its website, its Annual Report on Form 10-K,
quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to
those reports filed or furnished pursuant to Section 13(a) or 15(d) of the
Exchange Act as soon as reasonably practicable after the Company electronically
files such information with or furnishes it to the Securities and Exchange
Commission. In addition, the Corporate Governance Policies, Business Code of
Ethics and the charters of the Audit and Ethics, Compensation and Benefits and
Corporate Governance and Nominating Committees also are available on the
Company's website. All of the documents described above are available in print,
without charge, to any shareholder upon request by contacting the Corporate
Secretary at 1801 Bayberry Court, P. O. Box 18100, Richmond, Virginia
23226-8100.
OTHER MATTERS
The cost of this solicitation of proxies will be borne by the Company. In
addition to soliciting proxies by mail, directors, officers and employees of the
Company, without receiving additional compensation therefor, may solicit proxies
by telephone, facsimile, electronic mail, telegram, in person or by other means.
Arrangements also will be made with brokerage firms and other custodians,
nominees and fiduciaries to forward proxy solicitation material to the
beneficial owners of Brink's Common Stock held of record by such persons and the
Company will reimburse such brokerage firms, custodians, nominees and
fiduciaries for reasonable out-of-pocket expenses incurred by them in connection
therewith. The Company has retained Georgeson Shareholder Communications Inc. to
perform various proxy advisory and solicitation services. The fee of Georgeson
Shareholder Communications Inc. in connection with the 2005 annual meeting is
currently estimated to be approximately $17,500, plus reimbursement of
out-of-pocket expenses.
AUSTIN F. REED
Secretary
March 25, 2005
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EXHIBIT A
THE BRINK'S COMPANY
2005 EQUITY INCENTIVE PLAN
SECTION 1. Purpose.
The purpose of The Brink's Company 2005 Equity Incentive Plan is to act as
the successor plan to The Brink's Company 1988 Stock Option Plan and to
encourage those individuals who are expected to contribute significantly to the
Company's success to accept employment or continue in the employ of the Company
and its Subsidiaries, to enhance their incentive to perform at the highest
level, and, in general, to further the best interests of the Company and its
shareholders.
SECTION 2. Definition.
As used in the Plan, the following terms shall have the meanings set forth
below:
(a) "ACT" shall mean the Securities Exchange Act of 1934, as amended.
(b) "AFFILIATE" shall mean (i) any entity that, directly or indirectly, is
controlled by the Company and (ii) any entity in which the Company has a
significant equity interest, in either case as determined by the Committee.
(c) "AWARD" shall mean any Option, Stock Appreciation Right, award of
Restricted Stock, Restricted Stock Unit, Performance Unit or Other Stock-Based
Award granted under the Plan.
(d) "AWARD AGREEMENT" shall mean any written agreement, contract or other
instrument or document evidencing any Award granted under the Plan, which may,
but need not, be executed or acknowledged by a Participant.
(e) "BENEFICIARY" shall mean a person or persons entitled to receive
payments or other benefits or exercise rights that are available under the Plan
in the event of the Participant's death.
(f) "BOARD" shall mean the board of directors of the Company.
(g) "CHANGE IN CONTROL" shall mean the occurrence of:
(i) the approval of the shareholders of the Company (or if such approval
is not required, the approval of the Board) of (A) any consolidation or
merger of the Company in which the Company is not the continuing or
surviving corporation or pursuant to which the Shares would be converted
into cash, securities or other property other than a consolidation or merger
in which holders of the total voting power in the election of directors of
the Company of Shares outstanding (exclusive of shares held by the Company's
Affiliates) (the "TOTAL VOTING POWER") immediately prior to the
consolidation or merger will have the same proportionate ownership of the
total voting power in the election of directors of the surviving corporation
immediately after the consolidation or merger, or (B) any sale, leases,
exchange or other transfer (in one transaction or a series of transactions)
of all or substantially all the assets of the Company;
(ii) any "person" (as defined in Section 13(d) of the Act) other than
the Company, its Affiliates or an employee benefit plan or trust maintained
by the Company or its affiliates, becoming the "beneficial owner" (as
defined in Rule 13d-3 under the Act), directly or indirectly, of more than
20% of the Total Voting Power; or
(iii) at any time during a period of two consecutive years, individuals
who at the beginning of such period constituted the Board ceasing for any
reason to constitute at least a majority thereof, unless the election by the
Company's shareholders of each new director during such two-year period was
approved by a vote of at least two-thirds of the directors then still in
office who were directors at the beginning of such two-year period.
(h) "CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
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(i) "COMMITTEE" shall mean the Compensation and Benefits Committee of the
Board or such other committee as may be designated by the Board.
(j) "COMPANY" shall mean The Brink's Company.
(k) "EXECUTIVE GROUP" shall mean every person who is expected by the
Committee to be both (i) a "covered employee" as defined in Section 162(m) of
the Code as of the end of the taxable year in which payment of the Award may be
deducted by the Company, and (ii) the recipient of compensation of more than
$1,000,000 (as such number appearing in Section 162(m) of the Code may be
adjusted by any subsequent legislation) for that taxable year.
(l) "FAIR MARKET VALUE" shall mean with respect to Shares, the average of
the high and low quoted sale prices of a share of such common stock on the date
in question (or, if there is no reported sale on such date, on the last
preceding date on which any reported sale occurred) on the New York Stock
Exchange Composite Transactions Tape or with respect to any property other than
Shares, the fair market value of such property determined by such methods or
procedures as shall be established from time to time by the Committee.
(m) "INCENTIVE STOCK OPTION" shall mean an option representing the right to
purchase Shares from the Company, granted under and in accordance with the terms
of Section 6, that meets the requirements of Section 422 of the Code, or any
successor provision thereto.
(n) "NON-QUALIFIED STOCK OPTION" shall mean an option representing the right
to purchase Shares from the Company, granted under and in accordance with the
terms of Section 6, that is not an Incentive Stock Option.
(o) "OPTION" shall mean an Incentive Stock Option or a Non-Qualified Stock
Option.
(p) "OTHER STOCK-BASED AWARD" shall mean any right granted under Section 10.
(q) "PARTICIPANT" shall mean an individual granted an Award under the Plan.
(r) "PERFORMANCE UNIT" shall mean any right granted under Section 9.
(s) "PLAN" shall mean The Brink's Company 2005 Equity Incentive Plan.
(t) "PREDECESSOR PLAN" shall mean The Brink's Company 1988 Stock Option
Plan.
(u) "RESTRICTED STOCK" shall mean any Share granted under Section 8.
(v) "RESTRICTED STOCK UNIT" shall mean a contractual right granted under
Section 8 that is denominated in Shares. Each Unit represents a right to receive
the value of one Share (or a percentage of such value) upon the terms and
conditions set forth in the Plan and the applicable Award Agreement. Awards of
Restricted Stock Units may include, without limitation, the right to receive
dividend equivalents.
(w) "SAR" or "STOCK APPRECIATION RIGHT" shall mean any right granted to a
Participant pursuant to Section 7 to receive, upon exercise by the Participant,
the excess of (i) the Fair Market Value of one Share on the date of exercise or
at any time during a specified period before the date of exercise over (ii) the
grant price of the right on the date of grant, or if granted in connection with
an outstanding Option on the date of grant of the related Option, as specified
by the Committee in its sole discretion, which, except in the case of Substitute
Awards or in connection with an adjustment provided in Section 5(d), shall not
be less than the Fair Market Value of one Share on such date of grant of the
right or the related Option, as the case may be.
(x) "SHARES" shall mean shares of the common stock of the Company.
(y) "SUBSIDIARY" shall mean any corporation of which stock representing at
least 50% of the ordinary voting power is owned, directly or indirectly, by the
Company.
(z) "SUBSTITUTE AWARDS" shall mean Awards granted in assumption of, or in
substitution for, outstanding awards previously granted by a company acquired by
the Company or with which the Company combines.
A-2
SECTION 3. Eligibility.
(a) Any individual who is employed by the Company or any Affiliate,
including any officer-director, shall be eligible to be selected to receive an
Award under the Plan.
(b) An individual who has agreed to accept employment by the Company or an
Affiliate shall be deemed to be eligible for Awards hereunder as of the date of
such agreement.
(c) Directors who are not full-time or part-time officers are not eligible
to receive Awards hereunder.
(d) Holders of options and other types of Awards granted by a company
acquired by the Company or with which the Company combines are eligible for
grant of Substitute Awards hereunder.
SECTION 4. Administration.
(a) The Plan shall be administered by the Committee. The Committee shall be
appointed by the Board and shall consist of not less than three directors, each
of whom shall be independent, within the meaning of and to the extent required
by applicable rulings and interpretations of the New York Stock Exchange and the
Securities and Exchange Commission, and each of whom shall be a "Non-Employee
Director", as defined from time to time for purposes of Section 16 of the Act
and the rules promulgated thereunder and shall satisfy the requirements for an
outside director pursuant to Section 162(m) of the Code, and any regulations
issued thereunder. The Board may designate one or more directors as alternate
members of the Committee who may replace any absent or disqualified member at
any meeting of the Committee. No member or alternate member of the Committee
shall be eligible, while a member or alternate member, for participation in the
Plan. The Committee may issue rules and regulations for administration of the
Plan. It shall meet at such times and places as it may determine.
(b) Subject to the terms of the Plan and applicable law, the Committee shall
have full power and authority to: (i) designate Participants; (ii) determine the
type or types of Awards (including Substitute Awards) to be granted to each
Participant under the Plan; (iii) determine the number of Shares to be covered
by (or with respect to which payments, rights, or other matters are to be
calculated in connection with) Awards; (iv) determine the terms and conditions
of any Award; (v) determine whether, to what extent, and under what
circumstances Awards may be settled or exercised in cash, Shares, other
securities, or other Awards, or canceled, forfeited or suspended, and the method
or methods by which Awards may be settled, exercised, canceled, forfeited or
suspended; (vi) determine whether, to what extent, and under what circumstances
cash, Shares, other securities, other Awards, and other amounts payable with
respect to an Award under the Plan shall be deferred either automatically or at
the election of the holder thereof or of the Committee; (vii) interpret and
administer the Plan and any instrument or agreement relating to, or Award made
under, the Plan; (viii) establish, amend, suspend or waive such rules and
regulations and appoint such agents as it shall deem appropriate for the proper
administration of the Plan; and (ix) make any other determination and take any
other action that the Committee deems necessary or desirable for the
administration of the Plan.
(c) All decisions of the Committee shall be final, conclusive and binding
upon all parties, including the Company, the shareholders and the Participants.
SECTION 5. Shares Available for Awards.
(a) Subject to adjustment as provided below, the number of Shares available
for issuance under the Plan shall be 5,000,000 Shares. Any Shares covered by an
Award other than Options and SARs shall be counted against this limit as 2
Shares for every one Share covered by the Award. In addition, each SAR shall be
counted against this limit as one Share, regardless of whether a Share is used
to settle the SAR upon exercise. Notwithstanding the foregoing and subject to
adjustment as provided in Section 5(d), no Participant may receive Options and
SARs under the Plan in any calendar year that relate to more than 400,000
Shares.
(b) If, after the effective date of the Plan, any Shares covered by an Award
other than a Substitute Award, or to which such an Award relates, are forfeited,
or if such an Award otherwise terminates without the delivery of Shares or of
other consideration, then the Shares covered by such Award, or to
A-3
which such Award relates, to the extent of any such forfeiture or termination,
shall again be, or shall become, available for issuance under the Plan. For
purposes of this Section 5(b), awards under the Predecessor Plan shall be
considered Awards.
(c) Any Shares delivered pursuant to an Award may consist, in whole or in
part, of authorized and unissued Shares or Shares acquired by the Company.
(d) In the event that the Committee shall determine that any dividend or
other distribution (whether in the form of cash, Shares or other securities),
recapitalization, stock split, reverse stock split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase or exchange of Shares
or other securities of the Company, issuance of warrants or other rights to
purchase Shares or other securities of the Company, or other similar corporate
transaction or event affects the Shares such that an adjustment is determined by
the Committee to be appropriate in order to prevent dilution or enlargement of
the benefits or potential benefits intended to be made available under the Plan,
then the Committee shall, in such manner as it may deem equitable, adjust any or
all of (i) the number and type of Shares (or other securities) which thereafter
may be made the subject of Awards, including the aggregate and individual limits
specified in Section 5(a) and Section 9(c), (ii) the number and type of Shares
(or other securities) subject to outstanding Awards, and (iii) the grant,
purchase, or exercise price with respect to any Award or, if deemed appropriate,
make provision for a cash payment to the holder of an outstanding Award;
provided, however, that the number of Shares subject to any Award denominated in
Shares shall always be a whole number.
(e) Shares underlying Substitute Awards shall not reduce the number of
Shares remaining available for issuance under the Plan.
SECTION 6. Options.
The Committee is hereby authorized to grant Options to Participants with the
following terms and conditions and with such additional terms and conditions, in
either case not inconsistent with the provisions of the Plan, as the Committee
shall determine:
(a) The purchase price per Share under an Option shall be determined by
the Committee; provided, however, that, except in the case of Substitute
Awards, such purchase price shall not be less than the Fair Market Value of
a Share on the date of grant of such Option.
(b) The term of each Option shall be fixed by the Committee but shall
not exceed 6 years from the date of grant thereof.
(c) The Committee shall determine the time or times at which an Option
may be exercised in whole or in part; provided, however, that, except in the
event of a Change in Control, an Option shall not be exercisable before the
expiration of one year from the date the Option is granted.
(d) The Committee shall determine the method or methods by which, and
the form or forms, including, without limitation, cash, Shares, other
Awards, or any combination thereof, having a Fair Market Value on the
exercise date equal to the relevant exercise price, in which, payment of the
exercise price with respect thereto may be made or deemed to have been made.
(e) The terms of any Incentive Stock Option granted under the Plan shall
comply in all respects with the provisions of Section 422 of the Code, or
any successor provision thereto, and any regulations promulgated thereunder.
(f) Options shall not be granted under the Plan in consideration for and
shall not be conditioned upon the delivery of Shares to the Company in
payment of the exercise price and/or tax withholding obligation under any
other employee stock option.
(g) Section 11 sets forth certain additional provisions that shall apply
to Options.
SECTION 7. Stock Appreciation Rights.
(a) The Committee is hereby authorized to grant Stock Appreciation Rights
("SARS") to Participants with terms and conditions as the Committee shall
determine not inconsistent with the provisions of the Plan.
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(b) SARs may be granted hereunder to Participants either alone
("FREESTANDING") or in addition to other Awards granted under the Plan
("TANDEM") and may, but need not, relate to a specific Option granted under
Section 6.
(c) Any tandem SAR related to an Option may be granted at the same time such
Option is granted or at any time thereafter before exercise or expiration of
such Option. In the case of any tandem SAR related to any Option, the SAR or
applicable portion thereof shall not be exercisable until the related Option or
applicable portion thereof is exercisable and shall terminate and no longer be
exercisable upon the termination or exercise of the related Option, except that
a SAR granted with respect to less than the full number of Shares covered by a
related Option shall not be reduced until the exercise or termination of the
related Option exceeds the number of Shares not covered by the SAR. Any Option
related to any tandem SAR shall no longer be exercisable to the extent the
related SAR has been exercised.
(d) A freestanding SAR shall not have a term of greater than 6 years or,
unless it is a Substitute Award, an exercise price less than 100% of Fair Market
Value of the Share on the date of grant and, except in the event of a Change in
Control, shall not be exercisable before the expiration of one year from the
date the SAR is granted.
(e) Section 11 sets forth certain additional provisions that shall apply to
SARs.
SECTION 8. Restricted Stock and Restricted Stock Units.
(a) The Committee is hereby authorized to grant Awards of Restricted Stock
and Restricted Stock Units to Participants.
(b) Shares of Restricted Stock and Restricted Stock Units shall be subject
to such restrictions as the Committee may impose (including, without limitation,
any limitation on the right to vote a Share of Restricted Stock or the right to
receive any dividend or other right), which restrictions may lapse separately or
in combination at such time or times, in such installments or otherwise, as the
Committee may deem appropriate; provided, however, that subject to Section
12(g), Restricted Stock and Restricted Stock Units shall have a vesting period
of not less than one year.
(c) Any share of Restricted Stock granted under the Plan may be evidenced in
such manner as the Committee may deem appropriate including, without limitation,
book-entry registration or issuance of a stock certificate or certificates. In
the event any stock certificate is issued in respect of shares of Restricted
Stock granted under the Plan, such certificate shall be registered in the name
of the Participant and shall bear an appropriate legend referring to the terms,
conditions, and restrictions applicable to such Restricted Stock.
(d) The Committee may in its discretion, when it finds that a waiver would
be in the best interests of the Company, waive in whole or in part any or all
restrictions with respect to Shares of Restricted Stock or Restricted Stock
Units; provided, that the Committee may not waive the restriction in the proviso
of Section 8(b).
(e) If the Committee intends that an Award under this Section 8 shall
constitute or give rise to "qualified performance based compensation" under
Section 162(m) of the Code, such Award may be structured in accordance with the
requirements of Section 9(c), including without limitation, the performance
criteria and the Award limitation set forth therein, and any such Award shall be
considered a Performance Unit Award for purposes of the Plan.
(f) Section 11 sets forth certain additional provisions that shall apply to
Restricted Stock and Restricted Stock Units.
SECTION 9. Performance Units.
(a) The Committee is hereby authorized to grant Performance Units to
Participants.
(b) Subject to the terms of the Plan, a Performance Unit granted under the
Plan (i) may be denominated or payable in cash, Shares (including, without
limitation, Restricted Stock), other securities or other Awards and (ii) shall
confer on the holder thereof rights valued as determined by the
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Committee and payable to, or exercisable by, the holder of the Performance Unit,
in whole or in part, upon the achievement of such performance goals during such
performance periods as the Committee shall establish. Subject to the terms of
the Plan, the performance goals to be achieved during any performance period,
the length of any performance period, the amount of any Performance Unit granted
and the amount of any payment or transfer to be made pursuant to any Performance
Unit shall be determined by the Committee; provided, however, that subject to
Section 12(g), the performance period relating to any Award of Performance Units
shall be at least one year.
(c) Every Performance Unit Award to a member of the Executive Group shall,
if the Committee intends that such Award should constitute "qualified
performance-based compensation" for purposes of Section 162(m) of the Code,
include a pre-established formula, such that payment, retention or vesting of
the Award is subject to the achievement during a performance period or periods,
as determined by the Committee, of a level or levels, as determined by the
Committee, of one or more performance measures with respect to the Company, any
Subsidiary and/or any business unit of the Company or any Subsidiary, including
without limitation the following: (i) net income, (ii) operating income,
(iii) return on net assets, (iv) revenue growth, (v) total shareholder return,
(vi) earnings per share, (vii) return on equity, (viii) net revenue per
employee, (ix) market share, (x) return on capital and/or economic value added
(or equivalent metric), (xi) cash flow and/or free cash flow (before or after
dividends), or (xii) subscriber growth (on a gross or net basis); each as
determined in accordance with generally accepted accounting principles, where
applicable, as consistently applied by the Company and, if so determined by the
Committee prior to the expiration of the Performance Unit Award, adjusted, to
the extent permitted under Section 162(m) of the Code if the Committee intends
the Performance Unit Award to continue to constitute "qualified
performance-based compensation" under Section 162(m) of the Code, to omit the
effects of extraordinary items, the gain or loss on the disposal of a business
segment, unusual or infrequently occurring events and transactions, accruals for
awards under the Plan and cumulative effects of changes in accounting
principles. Performance measures may vary from Performance Unit Award to
Performance Unit Award and from Participant to Participant and may be
established on a stand-alone basis, in tandem or in the alternative. For any
Award subject to any such pre-established formula, the maximum number of shares
subject to any such Award denominated in Shares granted in any year shall be
400,000, subject to adjustment as provided in Section 5(d), and the maximum
amount earned in respect of a Performance Unit Award denominated in cash or
value other than Shares on an annualized basis shall be $5,000,000.
Notwithstanding any provision of the Plan to the contrary, the Committee shall
not be authorized to increase the amount payable under any Award to which this
Section 9(c) applies upon attainment of such pre-established formula.
(d) Section 11 sets forth certain additional provisions that shall apply to
Performance Units.
SECTION 10. OTHER STOCK-BASED AWARDS.
The Committee is hereby authorized to grant to Participants such other
Awards (including, without limitation, rights to dividends and dividend
equivalents) that are denominated or payable in, valued in whole or in part by
reference to, or otherwise based on or related to, Shares (including, without
limitation, securities convertible into Shares) as are deemed by the Committee
to be consistent with the purposes of the Plan. Subject to the terms of the
Plan, the Committee shall determine the terms and conditions of such Awards.
Shares or other securities delivered pursuant to a purchase right granted under
this Section 10 shall be purchased for such consideration, which may be paid by
such method or methods and in such form or forms, including, without limitation,
cash, Shares, other securities, other Awards, or any combination thereof, as the
Committee shall determine, the value of which consideration, as established by
the Committee, shall, except in the case of Substitute Awards, not be less than
the Fair Market Value of such Shares or other securities as of the date such
purchase right is granted.
SECTION 11. Effect of Termination of Employment on Awards.
Except as otherwise provided by the Committee at the time an Option, SAR,
Restricted Stock, Restricted Stock Unit or Performance Unit is granted or in any
amendment thereto, if a Participant ceases to be employed by the Company or any
Affiliate, then:
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(a) with respect to an Option or SAR:
(i) subject to Section 11(a)(ii), if termination is by reason of the
Participant's early, normal or late retirement under the Company's
Pension-Retirement Plan or any pension plan sponsored by the Company or a
Subsidiary or by reason of the Participant's permanent and total
disability, each Option or SAR held by the Participant shall continue to
vest and remain exercisable and in full force and effect in accordance
with its terms until the expiration date of the Award;
(ii) if termination is by reason of the death of the Participant, or
if the Participant dies after retirement or permanent and total
disability as referred to in Section 11(a)(i), each Option or SAR held by
the Participant shall fully vest at the time of the Participant's death
(or, if later, at the time of the one year anniversary of the Option or
SAR grant date) and may be exercised by the Participant's Beneficiary at
any time within a period of three years after death (but not after the
expiration date of the Award);
(iii) if termination of employment is for reason other than as
provided in Section 11(a)(i) or (ii), the Participant may exercise each
Option or SAR held by the Participant within 90 days after such
termination (but not after the expiration date of such Award) to the
extent such Award was exercisable pursuant to its terms at the date of
termination; provided, however, if the Participant should die within 90
days after such termination, each Option or SAR held by the Participant
may be exercised by the Participant's Beneficiary at any time within a
period of one year after death (but not after the expiration date of the
Award) to the extent such Award was exercisable pursuant to its terms at
the date of termination;
(b) with respect to Restricted Stock or a Restricted Stock Unit:
(i) subject to Section 11(b)(ii), if termination is by reason of the
Participant's early, normal or late retirement under the Company's
Pension-Retirement Plan or any pension plan sponsored by the Company or a
Subsidiary or permanent and total disability, each Restricted Stock or
Restricted Stock Unit Award held by the Participant shall continue to
vest and remain in full force and effect in accordance with its terms;
(ii) if termination is by reason of the Participant's death, or if
the Participant dies after retirement or permanent and total disability
as referred to in Section 11(b)(i), any and all restrictions with respect
to each Restricted Stock or Restricted Stock Unit Award held by the
Participant shall lapse at the time of the Participant's death (or, if
later, at the time of the one year anniversary of the Restricted Stock or
Restricted Stock Unit Award);
(iii) if termination of employment is by reason other than as
provided in Section 11(b)(i) or (b)(ii), any Restricted Stock or
Restricted Unit Award held by the Participant that remains subject to
restrictions shall be canceled as of such termination of employment and
shall have no further force or effect;
(c) with respect to a Performance Unit:
(i) if termination is by reason of the Participant's early, normal or
late retirement under the Company's Pension-Retirement Plan or any
pension plan sponsored by the Company or a Subsidiary or permanent and
total disability, each Performance Unit Award held by the Participant
shall continue to vest and remain in full force and effect in accordance
with its terms regardless of whether the Participant dies during such
period;
(ii) if termination of employment occurs prior to the expiration of
any performance period applicable to a Performance Unit and such
termination is by reason of the Participant's death, the Participant's
Beneficiary shall be entitled to receive following the expiration of such
performance period, a pro-rata portion of any amounts otherwise payable
with respect to, or a pro-rata right to exercise, the Performance Unit,
in each case determined based on the number of days in the performance
period that shall have elapsed prior to such termination and the
remainder of such Performance Unit shall be canceled; and
(iii) if termination of employment occurs prior to the expiration of
any performance period applicable to a Performance Unit and such
termination is by reason other than as
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provided in Section 11(c)(i) or (ii), any Performance Unit Award held by
the Participant shall be canceled as of such termination of employment
and shall have no further force or effect.
SECTION 12. General Provisions Applicable to Awards.
(a) Awards shall be granted for no cash consideration or for such minimal
cash consideration as may be required by applicable law.
(b) Awards may, in the discretion of the Committee, be granted either alone
or in addition to or in tandem with any other Award or any award granted under
any other plan of the Company. Awards granted in addition to or in tandem with
other Awards, or in addition to or in tandem with awards granted under any other
plan of the Company, may be granted either at the same time as or at a different
time from the grant of such other Awards or awards.
(c) Subject to the terms of the Plan, payments or transfers to be made by
the Company upon the grant, exercise or payment of an Award may be made in the
form of cash, Shares, other securities or other Awards, or any combination
thereof, as determined by the Committee in its discretion at the time of grant,
and may be made in a single payment or transfer, in installments, or on a
deferred basis, in each case in accordance with rules and procedures established
by the Committee. Such rules and procedures may include, without limitation,
provisions for the payment or crediting of reasonable interest on installment or
deferred payments or the grant or crediting of dividend equivalents in respect
of installment or deferred payments.
(d) No Award and no right under any Award shall be assignable, alienable,
saleable or transferable by a Participant otherwise than by will or pursuant to
Section 12(e). Each Award, and each right under any Award, shall be exercisable
during the Participant's lifetime only by the Participant or, if permissible
under applicable law, by the Participant's guardian or legal representative. The
provisions of this paragraph shall not apply to any Award which has been fully
exercised, earned or paid, as the case may be, and shall not preclude forfeiture
of an Award in accordance with the terms thereof.
(e) A Participant may designate a Beneficiary or change a previous
beneficiary designation at such times prescribed by the Committee by using forms
and following procedures approved or accepted by the Committee for that purpose.
If no Beneficiary designated by the Participant is eligible to receive payments
or other benefits or exercise rights that are available under the Plan at the
Participant's death, the Beneficiary shall be the Participant's estate.
(f) All certificates for Shares or other securities delivered under the Plan
pursuant to any Award or the exercise thereof shall be subject to such stop
transfer orders and other restrictions as the Committee may deem advisable under
the Plan or the rules, regulations, and other requirements of the Securities and
Exchange Commission, any stock exchange upon which such Shares or other
securities are then listed, and any applicable Federal or state securities laws,
and the Committee may cause a legend or legends to be put on any such
certificates to make appropriate reference to such restrictions.
(g) Unless specifically provided to the contrary in any Award Agreement,
upon a Change in Control, all Awards shall become fully exercisable, shall vest
and shall be settled, as applicable, and any restrictions applicable to any
Award shall automatically lapse. Upon a Change in Control, Performance Unit
Awards shall be considered to be earned and payable in full at the target level
and any deferral or other restriction shall lapse and such Performance Unit
Awards shall be immediately settled or distributed.
SECTION 13. Amendments and Termination.
(a) Except to the extent prohibited by applicable law and unless otherwise
expressly provided in an Award Agreement or in the Plan, the Board may amend,
alter, suspend, discontinue, or terminate the Plan or any portion thereof at any
time; provided, however, that no such amendment, alteration, suspension,
discontinuation or termination shall be made without (i) shareholder approval if
such approval is required by the listing company rules of the New York Stock
Exchange or (ii) the consent of the affected Participant, if such action would
adversely affect the rights of such Participant under any outstanding Award,
except to the extent any such amendment, alteration, suspension, discontinuance
or
A-8
termination is made to cause the Plan to comply with applicable law, stock
exchange rules and regulations or accounting or tax rules and regulations.
Notwithstanding anything to the contrary herein, the Committee may amend the
Plan in such manner as may be necessary to enable the Plan to achieve its stated
purposes in any jurisdiction in a tax-efficient manner and in compliance with
local rules and regulations.
(b) The Committee may waive any conditions or rights under, amend any terms
of, or amend, alter, suspend, discontinue or terminate, any Award theretofore
granted, prospectively or retroactively, without the consent of any relevant
Participant or holder or beneficiary of an Award, provided, however, that no
such action shall impair the rights of any affected Participant or holder or
beneficiary under any Award theretofore granted under the Plan, except to the
extent any such action is made to cause the Plan to comply with applicable law,
stock exchange rules and regulations or accounting or tax rules and regulations;
and provided further that, except as provided in Section 5(d), no such action
shall directly or indirectly, through cancellation and regrant or any other
method, reduce, or have the effect of reducing, the exercise price of any Award
established at the time of grant thereof and provided further, that the
Committee's authority under this Section 13(b) is limited in the case of Awards
subject to Section 9(c), as set forth in Section 9(c).
(c) Except as noted in Section 9(c), the Committee shall be authorized to
make adjustments in the terms and conditions of, and the criteria included in,
Awards in recognition of events (including, without limitation, the events
described in Section 5(d)) affecting the Company, or the financial statements of
the Company, or of changes in applicable laws, regulations or accounting
principles, whenever the Committee determines that such adjustments are
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan.
(d) Any provision of the Plan or any Award Agreement to the contrary
notwithstanding, the Committee may cause any Award granted hereunder to be
canceled in consideration of a cash payment or alternative Award made to the
holder of such canceled Award equal in value to the Fair Market Value of such
canceled Award, except that this Section 13(d) shall not be interpreted to
permit any transaction that is prohibited by the second proviso of Section 13(b)
relating to the direct or indirect repricing of Awards.
(e) The Committee may correct any defect, supply any omission, or reconcile
any inconsistency in the Plan or any Award in the manner and to the extent it
shall deem desirable to carry the Plan into effect.
SECTION 14. Miscellaneous.
(a) No employee, Participant or other person shall have any claim to be
granted any Award under the Plan, and there is no obligation for uniformity of
treatment of employees, Participants, or holders or beneficiaries of Awards
under the Plan. The terms and conditions of Awards need not be the same with
respect to each recipient.
(b) The Company shall be authorized to withhold from any Award granted or
any payment due or transfer made under any Award or under the Plan or from any
compensation or other amount owing to a Participant the amount (in cash, Shares,
other securities or other Awards) of withholding taxes due in respect of an
Award, its exercise, or any payment or transfer under such Award or under the
Plan and to take such other action (including, without limitation, providing for
elective payment of such amounts in cash or Shares by the Participant) as may be
necessary in the opinion of the Company to satisfy all obligations for the
payment of such taxes.
(c) Nothing contained in the Plan shall prevent the Company from adopting or
continuing in effect other or additional compensation arrangements, and such
arrangements may be either generally applicable or applicable only in specific
cases.
(d) The grant of an Award shall not be construed as giving a Participant the
right to be retained in the employ of the Company or any Affiliate. Further, the
Company or the applicable Affiliate may at any time dismiss a Participant from
employment, free from any liability, or any claim under the Plan, unless
otherwise expressly provided in the Plan or in any Award Agreement or in any
other agreement
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binding the parties. The receipt of any Award under the Plan is not intended to
confer any rights on the receiving Participant except as set forth in such
Award.
(e) If any provision of the Plan or any Award is or becomes or is deemed to
be invalid, illegal, or unenforceable in any jurisdiction, or as to any person
or Award, or would disqualify the Plan or any Award under any law deemed
applicable by the Committee, such provision shall be construed or deemed amended
to conform to applicable laws, or if it cannot be so construed or deemed amended
without, in the determination of the Committee, materially altering the intent
of the Plan or the Award, such provision shall be stricken as to such
jurisdiction, person or Award, and the remainder of the Plan and any such Award
shall remain in full force and effect.
(f) Neither the Plan nor any Award shall create or be construed to create a
trust or separate fund of any kind or a fiduciary relationship between the
Company and a Participant or any other person. To the extent that any person
acquires a right to receive payments from the Company pursuant to an Award, such
right shall be no greater than the right of any unsecured general creditor of
the Company.
(g) No fractional Shares shall be issued or delivered pursuant to the Plan
or any Award, and the Committee shall determine whether cash or other securities
shall be paid or transferred in lieu of any fractional Shares, or whether such
fractional Shares or any rights thereto shall be canceled, terminated or
otherwise eliminated.
SECTION 15. Effective Date of the Plan.
The Plan shall be effective as of the date of its approval by the
shareholders of the Company.
SECTION 16. Term of the Plan.
No Award shall be granted under the Plan after the date of the annual
shareholders meeting in the tenth year after the effective date of the Plan.
However, unless otherwise expressly provided in the Plan or in an applicable
Award Agreement, any Award theretofore granted may extend beyond such date, and
the authority of the Committee to amend, alter, adjust, suspend, discontinue, or
terminate any such Award, or to waive any conditions or rights under any such
Award, and the authority of the Board to amend the Plan, shall extend beyond
such date.
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Appendix 1
DETACH HERE ZBRK62
PROXY
THE BRINK'S COMPANY
Proxy/Voting Direction Card Solicited on Behalf of the Board of Directors
for Annual Meeting of Shareholders, May 6, 2005
PROXY
The undersigned hereby appoints Michael T. Dan, Austin F. Reed and Robert T.
Ritter and each of them as proxy, with full power of substitution, to vote all
shares of common stock of the undersigned in The Brink's Company at the Annual
Meeting of Shareholders to be held on May 6, 2005, at 1:00 p.m., Eastern
Daylight Time, and at any adjournment thereof, on all matters coming before the
meeting. The proxies will vote: (1) as the undersigned specifies on the back of
this card; (2) as the Board of Directors recommends where the undersigned does
not specify a vote on a matter listed on the back of this card; and (3) as the
proxies decide on any other matter.
This Proxy/Voting Direction Card also will serve as a direction to the Funding
Agent of the Company's 401(k) Plan to vote all shares in The Brink's Company
credited to the account of the undersigned. The Funding Agent will vote: (1) as
the undersigned specifies on the back of this card; (2) as the Board of
Directors recommends where the undersigned does not specify a vote on a matter
listed on the back of this card; and (3) as the Funding Agent decides on any
other matter.
If registrations are not identical, you may receive more than one set of proxy
materials. Please complete and return all cards you receive. If you wish to vote
or direct a vote on all matters as the Board of Directors recommends, please
sign, date and return this card. If you wish to vote or direct a vote on items
individually, please also mark the appropriate boxes on the back of this card.
- ----------- -----------
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
- ----------- -----------
THE BRINK'S COMPANY
C/O EQUISERVE TRUST COMPANY, N.A.
P.O. BOX 8694
EDISON, NJ 08818-8694
DETACH HERE IF YOU ARE RETURNING YOUR PROXY CARD BY MAIL ZBRK61
Please mark
[X] votes as in #PIT
this example.
The Board of Directors Recommends a vote "FOR ALL NOMINEES" in Item 1 and "FOR"
Items 2 through 4.
1. To elect one director for a term expiring in 2006 and FOR AGAINST ABSTAIN
three directors for a term expiring in 2008. 2. To approve the selection of KPMG [_] [_] [_]
For one year term expiring in 2006: (01) Ronald M. Gross LLP as independent public
For three year term expiring in 2008: (02) Marc C. Breslawsky accountants to audit the
(03) John S. Brinzo accounts of the Company and its
(04) Michael T. Dan subsidiaries for the year 2005.
FOR AGAINST ABSTAIN
FOR WITHHELD 3. To approve the material terms of [_] [_] [_]
ALL [_] [_] FROM ALL the performance goals under The
NOMINEES NOMINEES Brink's Company Management
Performance Improvement Plan.
[_]
------------------------------------------- FOR AGAINST ABSTAIN
For all nominees, except for those nominees 4. To approve The Brink's Company [_] [_] [_]
written on the line above 2005 Equity Incentive Plan.
NOTE: Please sign as name appears hereon. Joint owners should
each sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such.
Signature: Date: Signature: Date:
--------------------- --------------------- --------------------- ---------------------
