-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, NKbiJlW3VbskJhpqmwmv3UPOjqQCZMo+pBDEYgiTt5dk7bjV4YHABZNUUk7KY9P+ E0COxyXZoQF/qQ2EtfYGNA== 0000927356-95-000129.txt : 19950516 0000927356-95-000129.hdr.sgml : 19950516 ACCESSION NUMBER: 0000927356-95-000129 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950515 SROS: AMEX SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ATLAS CORP CENTRAL INDEX KEY: 0000008302 STANDARD INDUSTRIAL CLASSIFICATION: GOLD & SILVER ORES [1040] IRS NUMBER: 135503312 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-02714 FILM NUMBER: 95538653 BUSINESS ADDRESS: STREET 1: 370 SEVENTEENTH ST STREET 2: SUITE 3150 CITY: DENVER STATE: CO ZIP: 80202 BUSINESS PHONE: 3038251200 MAIL ADDRESS: STREET 1: 370 SEVENTEENTH STREET STREET 2: STE 3150 CITY: DENVER STATE: CO ZIP: 80202 10-Q 1 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q COMMISSION FILE NO. 1-2714 (Mark One) ( X ) Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 1995 -------------- or ( ) Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from ______________________ to ______________________ ATLAS CORPORATION ----------------------------------------------- (Exact name of registrant as specified in its charter) DELAWARE 13-5503312 - ------------------------------- ------------------- (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) 370 SEVENTEENTH STREET, SUITE 3150, DENVER, CO 80202 ----------------------------------------------------- (Address of principal executive offices) (Zip Code) (303) 825-1200 -------------------------------- (Registrant's telephone number) (including area code) Indicate by check mark whether the Company (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Company was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- As of May 10, 1995, 18,577,500 shares of Common Stock, par value $1 per share, were issued and outstanding. Page 1 of 41 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS. -------------------- ATLAS CORPORATION AND ITS SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In Thousands) (Unaudited)
March 31, June 30, 1995 1994 ---------- --------- ASSETS - -------------------------------------------- CURRENT ASSETS: Cash and short-term investments $ 6,485 $ 3,767 Trade accounts and other receivables 137 970 Inventories (Note 5) 250 1,367 Prepaid expenses and other current assets 260 212 -------- -------- Total current assets 7,132 6,316 Property, plant and equipment 47,557 50,476 Less, accumulated depreciation, depletion, amortization and impairment (44,652) (47,637) -------- -------- 2,905 2,839 Investment in unconsolidated subsidiary (Note 12) 36,203 - Other assets (Note 7) 9,433 10,692 -------- -------- $ 55,673 $ 19,847 ======== ======== LIABILITIES - ----------- CURRENT LIABILITIES: Trade accounts payable $ 290 $ 2,109 Accrued liabilities (Note 7) 2,513 4,446 -------- -------- Total current liabilities 2,803 6,555 Convertible debenture (Note 8) 3,500 3,500 Other long-term liabilities (Note 7) 11,995 12,267 STOCKHOLDERS' EQUITY (DEFICIT) - ------------------------------ Common stock 18,578 9,410 Capital in excess of par value 68,941 31,555 Retained deficit (49,875) (43,440) Currency translation adjustment (Note 12) (268) - -------- -------- Total stockholders' equity (deficit) 37,375 (2,475) -------- -------- $ 55,673 $ 19,847 ======== ========
See notes to consolidated financial statements. Page 2 of 41 ATLAS CORPORATION AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In Thousands, Except Per Share Data) (Unaudited)
Three Months Ended Nine Months Ended March 31, March 31, ---------------------------- -------------------- 1995 1994 1995 1994 ------------- ------------- -------- ---------- Mining revenue $ - $ 3,252 $ 2,328 $17,423 Production costs - 5,177 3,031 17,920 Shutdown and standby costs - - 1,275 - Exploration costs 324 313 1,429 1,586 General and administrative 567 644 1,939 2,479 ------- ------- ------- ------- Loss from operations (891) (2,882) (5,346) (4,562) ------- ------- ------- ------- Interest income 155 108 491 235 Interest expense (94) (92) (312) (324) Equity in loss of unconsolidated subsidiary (Note 12) (648) - (1,012) - Forfeiture of deposit (Note 11) - - (1,144) - Other income 1 110 42 173 ------- ------- ------- ------- Loss from continuing operations (1,477) (2,756) (7,281) (4,478) Income from discontinued operations (Note 10) - 279 846 1,681 ------- ------- ------- ------- Net loss $(1,477) $(2,477) $(6,435) $(2,797) ======= ======= ======= ======= PER SHARE OF COMMON STOCK AND COMMON STOCK EQUIVALENTS: Loss from continuing operations $ (.08) $ (.30) $ (.46) $ (.57) Income from discontinued operations - .03 .05 .22 ------- ------- ------- ------- Net loss $ (.08) $ (.27) $ (.41) $ (.35) ======= ======= ======= ======= Average number of common and common equivalent shares outstanding during each period 18,574 9,031 15,873 7,901 ======= ======= ======= =======
See notes to consolidated financial statements. Page 3 or 41 ATLAS CORPORATION AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands) (Unaudited)
Nine Months Ended March 31, ------------------- 1995 1994 --------- -------- OPERATING ACTIVITIES: Net loss $ (6,435) $(2,797) Gain from discontinued operations (846) (1,681) Add (deduct) non-cash items: Depreciation, depletion, amortization 386 4,061 Equity in loss of unconsolidated subsidiary 1,012 - Shutdown and standby costs (net) 508 - Forfeiture of deposit 525 - Issuance of stock for 401k plan 90 - Issuance of stock in lieu of interest payment 90 - Net change in non-cash items related to operations (Note 6) (952) (827) -------- ------- Cash used in continuing operations (5,621) (1,244) -------- ------- From discontinued operations: Income from discontinued operations 846 1,681 Change in accounts receivables 875 (800) Change in long-term liabilities - (102) Change in estimated uranium reclamation costs (1,110) (433) -------- ------- Cash provided by discontinued operations 611 346 -------- ------- Cash used in operating activities (5,011) (898) -------- ------- INVESTING ACTIVITIES: Additions to property, plant and equipment (496) (4,303) Investment in unconsolidated subsidiary (35,640) - Investment in common stock of mining company (3,000) Proceeds from the sale of equipment 491 434 -------- ------- Cash used in investing activities (38,645) (3,869) -------- ------- FINANCING ACTIVITIES: Borrowings from short-term note 3,550 - Repayment of short-term note (3,550) (3,524) Proceeds from the issuance of common stock 50,054 12,421 Proceeds from the issuance of convertible debt - 3,500 Costs associated with the issuance of debenture and stock (3,680) (1,300) -------- ------- Cash provided by financing activities 46,374 11,097 -------- ------- Increase in cash and cash equivalents 2,718 6,330 CASH AND CASH EQUIVALENTS: Beginning of period 3,767 1,734 -------- ------- End of period $ 6,485 $ 8,064 ======== =======
See notes to consolidated financial statements. Page 4 of 41 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. On August 15, 1994, the Company acquired approximately 37.2% of the common stock of Granges Inc. ("Granges"), a Canadian precious metals mining company. Through an amalgamation of Granges and Hycroft Resources and Development Corporation, effective May 1, 1995, the Company's ownership of the amalgamated company became 27.7% (see Note 11). The Company follows the equity method of accounting for investments in common stock of operating companies 20% to 50% owned. The Company follows the principles of Statement of Financial Accounting Standards No. 52, "Foreign Currency Translation," using the U.S. dollars as the functional currency for the operations of its unconsolidated Canadian subsidiary. Accordingly, all assets and liabilities of the foreign subsidiary are translated into U.S. dollars using the exchange rate prevailing at the balance sheet date, while income and expense items are translated at the weighted average exchange rate prevailing for the period. Exchange gains and losses are deferred and shown as a currency translation adjustment in shareholders' equity. 2. The financial information contained in this report reflects all adjustments which are of a normal recurring nature that the Company considers necessary for a fair presentation of the financial position and of the results of operations for the periods indicated. 3. There would be no dilution of earnings per share as a result of the exercise of outstanding warrants or stock options during the periods presented. 4. The Company regularly assesses its ability to recover the carrying value of its assets and recognizes an impairment when it is determined that the remaining unamortized costs cannot be recovered from undiscounted cash flows over the remaining mine life. 5. Inventories consisted of the following:
March 31, June 30, 1995 1994 --------- ----------- Raw materials $ - $ 360,000 Work in process - 593,000 Finished goods - 64,000 Other 250,000 350,000 -------- ---------- $250,000 $1,367,000 ======== ==========
6. The components of the net change in items other than cash related to operating activities as reflected in the Consolidated Statements of Cash Flows are as follows:
Nine Months Ended March 31, -------------------------- Add (deduct) items other than cash: 1995 1994 ------------ ------------ Trade accounts and other receivables $ (42,000) $ (6,000) Inventories 754,000 383,000 Prepaid expenses and other current assets (124,000) 367,000 Other assets 1,891,000 133,000 Trade accounts payable (1,819,000) (17,000) Accrued liabilities (1,927,000) (1,224,000) Other long-term liabilities 315,000 (463,000) ----------- ----------- $ (952,000) $ (827,000) =========== ===========
Page 5 of 41 7. OTHER ASSETS CONSIST OF THE FOLLOWING:
March 31, June 30, 1995 1994 ----------- ----------- Restricted cash: Collateral for a $6,500,000 letter of credit (a) $ 3,763,000 $ 6,500,000 Collateral for Bureau of Land Management reclamation bonds (b) 1,877,000 1,493,000 Deposit paid for Granges Inc. shares - 1,843,000 Deposit paid for Dakota Mining Corporation shares (Note 11) - 525,000 Investment in Dakota Mining Corporation shares (Note 11) 3,000,000 - Other 793,000 331,000 ----------- ----------- $ 9,433,000 $10,692,000 =========== ===========
(a) Securing the performance of the Company's uranium reclamation obligation. (b) Securing the performance of the Company's Gold Bar reclamation obligation. ACCRUED LIABILITIES CONSISTED OF THE FOLLOWING:
March 31, June 30, 1995 1994 ----------- ----------- Accrued compensation $ 383,000 $ 596,000 Mine reclamation accrual 100,000 300,000 Reclamation and uranium shut down cost, short-term 1,000,000 1,300,000 Accrued asbestos reclamation costs (Note 9) 655,000 1,400,000 Mine shutdown and standby costs 101,000 - Other 274,000 850,000 ----------- ----------- $ 2,513,000 $ 4,446,000 =========== ===========
OTHER LIABILITIES, LONG-TERM CONSISTED OF THE FOLLOWING:
March 31, June 30, 1995 1994 ----------- ----------- Reclamation and uranium shut down cost, long-term $ 5,089,000 $ 5,899,000 Pension and deferred compensation arrangements 1,380,000 1,335,000 Mine reclamation accrual 3,252,000 3,100,000 Accrued postretirement benefit obligation 1,225,000 1,203,000 Other 1,049,000 730,000 ----------- ----------- $11,995,000 $12,267,000 =========== ===========
The Company believes that all accruals related to estimated shutdown expenses, reclamation and litigation obligations are adequate, but are subject to adjustment to reflect actual costs incurred. 8. On September 20, 1993, the Company, pursuant to a Securities Purchase Agreement with Phoenix Financial Holdings, Inc., sold, an aggregate of $8,375,000, (i) 1,500,000 shares of the Company's Common Stock, (ii) a Redeemable Convertible Debenture due in 1998 of the Company in the principal amount of $3,500,000, which is convertible as to principal into Common Stock at the rate of $4.00 per share and bears interest at the rate of 9% per annum payable in cash or Common Stock at the rate of $4.00 per share, and (iii) Warrants to purchase for three years 2,000,000 shares of Common Stock at $3.625 per share. As of May 10, Page 6 of 41 1995, to the best of the Company's knowledge and belief, Phoenix has disposed of all its direct and indirect interests in the Company other than 1,150,000 of the Warrants to purchase Common Stock. 9. During fiscal year 1988, the United States Environmental Protection Agency (the "EPA") notified the Company that it was one of several potentially responsible parties ("PRPs") for cleanup costs incident to the presence of asbestos and other materials ("Contaminants") at the Company's former asbestos mine and mill site (the "Mine and Mill Site") near Coalinga, California and in the City of Coalinga (the "City of Coalinga Site"). A prolonged period of inquiry and administrative process concerning this matter followed. In fiscal years 1993 and 1991, the Company established a reserve of, and recorded as an expense, $600,000 and $3,000,000, respectively, to cover the Company's share of costs that may be incurred in connection with the foregoing matters. This accrual reflects participation by the Bureau of Land Management which has also been identified as a PRP with respect to the Mine and Mill Site. In fiscal year 1992, the Company instituted legal action against thirteen insurance carriers which had issued insurance policies over a period of more than 25 years, with respect to the Mine and Mill Site and the City of Coalinga Site. During the second, third and fourth quarters of fiscal year 1994, the Company reached settlement with a number of the carriers and recorded respectively, a gain from discontinued operations of $1,300,000, $222,000 and $475,000. During May 1995, the Company settled with the remaining insurance carriers. The proceeds were negligible. The Company believes that the remaining reserve is adequate, but the reserve is still subject to further adjustment to reflect the actual costs incurred. The remedial action plan, which has been approved by the EPA, commenced October 1994 and is scheduled to be completed within the next six months. 10. The Company is obligated to decommission and reclaim its uranium mill site located near Moab, Utah. Since the Company has discontinued its uranium operations and permanently shut down its uranium mill and mines, estimated shut-down expenses, including reclamation costs, of $17,406,000 were accrued at June 30, 1987. The balance in this accrual at March 31, 1995 was $6,089,000 and the reclamation plan extends over the next six to eight years. Title X of "The Comprehensive National Energy Policy Act" ("Title X"), which was enacted in October 1992, provides for the reimbursement of past and future reclamation expenses related to uranium sites with tailings generated by Atomic Energy Commission contracts. With respect to the Company's discontinued uranium operations, 56% of the tailings were generated under such contracts and the Company's liability for discontinued uranium operations will be reduced by this Government cost sharing program. The Company believes the accrual, when combined with anticipated reimbursements of future reclamation costs under the Title X program, is sufficient to cover future reclamation costs. The Company has submitted a claim to the Department of Energy under Title X of approximately $5 million for reclamation costs incurred from fiscal year 1987 through fiscal year 1994. If such claim is approved in full, the Company would receive reimbursement of approximately $2.8 million. The Company has received notification that the Department of Energy has given interim approval on approximately $4.5 million of the claim and $2.5 million in reimbursement. The Company is currently Page 7 of 41 providing supplemental information to the original claim in order to obtain approval on the remaining $0.5 million in costs disallowed under the interim approval. On December 29, 1994, the Company received $846,000 as a partial payment of the approved interim reimbursement which was recorded as income from discontinued operations. The timing on the repayment of the remaining approved reimbursements can not be forecast as the annual funding to the Title X program is a function of Congressional approval. 11. On August 15, 1994, the Company completed the purchase from M.I.M. (Canada) Inc. ("M.I.M.") of 12,694,200 common shares of Granges which constituted approximately 37.2% of the issued and outstanding shares of Granges. The purchase price was Cdn. $4.00 per share, or an aggregate purchase price of Cdn. $50,776,800. Granges shares are traded on the Toronto Stock Exchange and the American Stock Exchange. At December 31, 1994, Granges had a reported cash position of approximately Cdn. $45 million, a large portfolio of exploration properties and a 50.5% ownership in Hycroft Resources and Development Corporation ("Hycroft"), which operates the Crofoot/Lewis mine located in Nevada. Effective May 1, 1995, Granges amalgamated with Hycroft, with the resultant amalgamated company being named Granges Inc. The terms of the amalgamation called for each common share of Hycroft to be exchanged for 0.88 of a common share of "new" Granges Inc. and for each common share of Granges outstanding prior to the amalgamation, to be exchanged for one common share of "new" Granges Inc. After giving effect to the amalgamation, the Company continued to hold 12,694,200 shares of "new" Granges Inc., representing 27.7% of the outstanding common shares of Granges. On February 24, 1995, the Company and Granges entered into an agreement pursuant to which Atlas agreed to vote its shares in favor of the amalgamation of Granges and Hycroft discussed above. Pursuant to such agreement, the initial Board of Directors of "new" Granges Inc. was composed of eleven members, including David Birkenshaw, the Chairman and Chief Executive Officer of the Company, who was elected Vice-Chairman of the Board; James Dunnett, a partner of Endeavor Financial Corporation, which serves as a financial advisor to the Company; and John Walton, a partner and Chairman of Endeavor Financial Corporation. Such agreement further provides that, on October 1, 1995, the Board will be reduced to nine members (including Messrs. Birkenshaw, Richings and Walton) and that on such date Mr. Richings would be elected President and Chief Executive Officer of "new" Granges Inc. subject to approval of the revised Board. See Note 13 below. In addition, pursuant to the aforesaid agreement, the Company agreed to cause its nominees on the Board of Directors of "new" Granges Inc. to vote in favor of a shareholder rights plan to become effective immediately following the amalgamation of Granges and Hycroft and to be made subject to shareholder ratification at an extraordinary general meeting of "new" Granges Inc. to be held on or before September 30, 1995, at which meeting the Company will vote its shares in "new" Granges Inc. in favor of such shareholder rights plan, subject to the plan containing a "grandfathering" provision excluding the Company from the application of such shareholder rights plan under the same terms and conditions as the "grandfathering" provision set out in a draft shareholder' rights plan of Granges dated December 1, 1993, which provided for the Page 8 of 41 "grandfathering" of M.I.M. from the application of the shareholder rights plan as long as such shareholder's beneficial ownership of Granges' voting shares did not exceed 40% of Granges' outstanding voting shares. Until shareholder ratification of such rights plan, the Company may not increase its position in "new" Granges Inc. to more than 40% without making an offer on the same terms to all "new" Granges Inc. shareholders. On May 31, 1994, the Company, Dakota Mining Corporation ("Dakota") and VenturesTrident, L.P. and VenturesTrident II, L.P. (collectively, the "VenturesTrident Partnerships") entered into an agreement in principle providing for (i) the purchase of 1,500,000 common shares of Dakota (the "VenturesTrident Shares") from the VenturesTrident Partnerships, for an aggregate purchase price of $6,000,000 and, subject to the completion of the purchase of the VenturesTrident Shares, (ii) the subscription by Atlas to 3,100,000 newly-to-be issued convertible preferred shares of Dakota. In order to finance the above transactions, the Company conducted a private placement of 9,090,909 Units of Atlas securities during the summer of 1994 for a purchase price of $5.50 per Unit, each Unit consisting of one share of the Company's common stock and one-half of a warrant (exercisable for five years) to purchase a share of the Company's common stock at an exercise price of $7.00 per share. The first portion of such private placement, consisting of the sale of 6,486,809 Units for an aggregate purchase price of $35,677,450, was completed on August 15, 1994, and the proceeds thereof were applied primarily to the payment of the Cdn. $48,237,960 balance of the purchase price for the Granges Shares. In connection with closing the first portion of the private placement, the Company entered into a $3.5 million secured, short-term credit agreement with Gerald Metals, Inc. to cover, among other things, certain expenses of the private placement. The Company pledged to Gerald Metals, Inc. the Granges Shares as part of the security for such loan. On October 28, 1994, the Company determined that it was in the best interests of its shareholders not to proceed with the Dakota acquisition and forfeited its $1,000,000 in nonrefundable deposits to the VenturesTrident Partnerships. Costs of $144,000 incurred in conjunction with the Dakota transaction were also expensed. The second portion of the private placement, consisting of the sale of an additional 2,604,100 Units for an aggregate purchase price of $14,322,550, was completed on December 15, 1994 following the approval at a Special Meeting of the Shareholders of a proposal to increase the authorized share capital of the Company. The Special Meeting was required due to the Company, after completing the first portion of the offering, not having sufficient authorized common stock to be issued and reserved for issuance in connection with the second portion of the offering. Upon closing of the second portion of the private placement, the Company used a portion of the proceeds to repay the remaining balance of $800,000 due on the Gerald Metals, Inc. short-term security agreement. Accordingly, Gerald Metals, Inc. released all encumbrances and liens on the assets of the Company, including the Granges Shares. Of the Units sold in the aforesaid private placement, Mackenzie Financial Corporation ("Mackenzie Financial") acquired 1,820,000 Units, consisting of 1,820,000 shares of Common Stock and 910,000 warrants to Page 9 of 41 purchase shares of Common Stock, and M.I.M. acquired 2,000,000 Units, consisting of 2,000,000 shares of Common Stock and 1,000,000 warrants to purchase shares of Common Stock. Since such date, Mackenzie Financial has acquired an additional 591,000 shares of Common Stock. Following such purchases, to the best of the Company's knowledge and belief, Mackenzie Financial and M.I.M. have beneficial ownership of, respectively, 18.8% and 15.3% of the shares of Common Stock of the Company outstanding as of May 10, 1995. On March 9, 1995, Atlas and Dakota entered into a Subscription Agreement, under which Atlas purchased 2,419,355 Special Warrants of Dakota at a price of $1.24 per Special Warrant. Each Special Warrant may be exercised, without the payment of any additional consideration, into one Common Share of the Dakota, and is automatically deemed exercised if not exercised by the relevant expiry date set forth in the Subscription Agreement. Upon exercise, the Company will hold less than 10% of the outstanding Common Stock of Dakota. In connection with consummating the aforesaid purchase by the Company of Special Warrants, the Company and Dakota executed a mutual limited release, whereby each party released the other from any liability, direct or indirect, arising out of the May 31, 1994 agreement in principle related to the purchase by the Company of certain securities of Dakota. 12. For the quarter ended September 30, 1994, the Company reported the results of Granges under the equity method, on a current basis. Due to a difference in fiscal year ends and the inability to obtain timely financial information from Granges for its quarter ended December 31, 1994 and subsequent quarters, the Company implemented a three month lag period in reporting the results of operations of Granges for the quarter ended December 31, 1994. As a result, the Company's equity in loss of unconsolidated subsidiary for the three and nine month period ended March 31, 1995 and the foreign currency translation adjustment, recorded in the Shareholder's Equity section of the Balance Sheet as of March 31, 1995, reflects Granges' results of operations and currency translation adjustments as of December 31, 1994 and for the six months then ended. A summarized Statement of Operations (Unaudited, Canadian Dollars) of Granges for the three and six month periods ended December 31, 1994 is presented below:
Three Months Six Months Ended Ended Dec. 31, 1994 Dec. 31, 1994 -------------- -------------- Sales $13,867,000 $29,211,000 Cost of sales 10,719,000 22,588,000 Depreciation, depletion & amort. 2,209,000 4,100,000 ----------- ----------- Gross margin 939,000 2,523,000 Net income (loss) $(1,593,000) $(2,741,000) =========== ===========
Under the equity method, the Company reported losses of $648,000 and $1,012,000 for the three month period ended December 31, 1994 and the period from August 15, 1994 (date of acquisition) to December 31, 1994, respectively. The excess of cost of investment over the net assets acquired was amortized on a unit of production (gold ounces) basis and is included in the reported loss. 13. Atlas announced on May 15, 1995, that Michael B. Richings, the Company's President and Page 10 of 41 Chief Operating Officer, will become the President and Chief Executive Officer of Granges Inc., effective June 1, 1995. In connection with his appointment, Mr. Richings will resign his executive positions with the Company but will continue to serve on the Company's Board of Directors. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS ----------------------------------------------------------------------- OF OPERATIONS ------------- Gold production during the nine months ended March 31, 1995 decreased to 7,520 ounces from 46,200 ounces produced during the nine months ended March 31, 1994, as a result of the temporary suspension of milling in September of 1994 and the processing of lower grade stockpiled material in the prior months. Due to the suspension of milling, no gold was produced for the three months ended March 31, 1995 compared to 8,500 ounces of gold production for the three months ended March 31, 1994. Mining revenue reflected the decrease in production by declining to $0 and $2,328,000 for the three and nine months ended March 31, 1995 from $3,252,000 and $17,423,000 for the three and nine months ended March 31, 1994. The net proceeds from the sale of the in-process mill inventory during the second quarter of fiscal year 1995 (1,500 ounces) was recorded as a reduction of the shutdown and standby costs of $1,275,000 recorded in the first quarter of fiscal year 1995. Production costs of $5,177,000 and $17,920,000 for the three and nine months ended March 31, 1994, decreased to $0 and $3,031,000 for the three and nine months ended March 31, 1995. The decrease is a result of the suspension of milling in late September 1994. Costs associated with placing the Gold Bar Mine on temporary shutdown and standby through the end of the fiscal year were estimated at $1,275,000 and were accrued in September 1994. General and administrative costs for the three and nine months ended March 31, 1995, decreased $77,000 and $540,000, respectively, compared to the comparable periods in fiscal year 1994. General and administrative costs for the nine month period ended March 31, 1994 includes $490,000 in payments to former officers that were made in satisfaction of employment agreements and severance packages in September 1993 arising out of the change of control discussed in Note 8 of Part 1 above. The Company's revenue and income for the periods set forth above are not necessarily indicative of the results in any future period due to the suspension of both mining and milling at the Gold Bar Mine. Management is continuing its ongoing economic evaluations and optimization studies and is pursuing various financing arrangements in an effort to recommence mining activities at the Gold Bar property. Working capital was $4,329,000 at March 31, 1995 and $4,303,000 at March 31, 1994. The Company's current ratio is 2.54 to 1 at March 31, 1995, compared to 2.90 at March 31, 1994. Management will utilize the $4.3 million in working capital and the Company's equity investments to address the lack of cashflow from current operations. The Company will address this problem by pursuing: 1) business combination strategies with Granges Inc. (the Company currently owns 27.7% of the outstanding stock), 2) alternatives for resumption of mining at the Gold Bar Mine, 3) development of the Tucker Hill perlite deposit and 4) acquisitions. Page 11 of 41 The Company's capital expenditures in the quarter ended March 31, 1995, were $168,000 with the majority directed at the development of the Company's Tucker Hill perlite property. Funds required for the further development of the Gold Bar Mine and the Tucker Hill perlite property will, to the extent possible, be obtained from current working capital, joint ventures, and project borrowings. The Company believes that it can meet the estimated reclamation and closing costs of its uranium and gold mining operations from the aggregate of $5,640,000 cash collateral for letters of credit and reclamation bonds related to these costs, from the proceeds of reimbursements made under the government cost sharing program discussed in Note 10 of the financial statements, from current working capital, and from the sale of non-core assets. PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS ----------------- None ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS --------------------------------------------------- The Annual Meeting of Stockholders of the Company was held on February 17, 1995. At the meeting: a. James D. Beatty and David P. Hall were nominated and elected to hold office as Class I Directors for a term of three years. Holders of 12,302,560 shares voting in favor of the nominations while holders of 105,037 shares had authority withheld. b. A proposal to ratify the selection by the Board of Directors of Ernst & Young LLP as auditors for the fiscal year ending June 30, 1995 was adopted. Holders of 12,297,068 shares voted in favor of the proposal, holders of 59,548 shares voted against and holders of 50,225 shares abstained. c. A proposal was adopted that recommended an amendment to the Company's Long Term Incentive Plan (i) to increase by 850,000 the number of shares of the Common Stock of the Corporation authorized for issuance under the Long Term Incentive Plan, (ii) to allow non-employee directors of the Corporation to receive awards of stock options under the Long Term Incentive Plan and (iii) with regard to options granted on or after January 6, 1995, to reduce the minimum period of time between the award of an option and the date the option first becomes exercisable from one year to six months. Holders of 11,761,850 shares voted in favor of the proposal, holders of 515,654 shares voted against and holders of 130,092 shares abstained. ITEM 5. OTHER INFORMATION ----------------- None Page 12 of 41 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K -------------------------------- a. Exhibits 10.1 Second Amendment dated as of August 15, 1994 to the Amended and Restated Rights Agreement dated August 2, 1989 between the Company and Chemical Bank, as successor by merger with Manufacturers Hanover Trust Company. 10.2 The Company's Long Term Incentive Plan, as amended dated February 17, 1995. 10.3 Employment Agreement made as of January 16, 1995 between the Company and Michael B. Richings. 10.4 Employment Agreement made as of February 17, 1995 between the Company and Richard E. Blubaugh. b. Reports filed on Form 8-K On January 11, 1995, a Form 8-K was filed reporting the appointment of Michael B. Richings as President and Chief Operating Officer. On January 17, 1995, a Form 8-K was filed reporting the registration of common shares of the Company issued privately during 1993 and 1994. On March 6, 1995, a Form 8-K was filed reporting that the Company had reached an agreement with Granges Inc. on terms under which it would vote its shares in favor of a proposed amalgamation between Granges Inc and Hycroft Resources and Development Corporation. Page 13 of 41 SIGNATURES ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. ATLAS CORPORATION ----------------------------------- (Registrant) Date May 12, 1995 /s/ JAMES R. JENSEN ------------ ---------------------------------- James R. Jensen Controller/Chief Accounting Officer Page 14 of 41 EXHIBIT INDEX -------------
Exhibit Number Exhibit Page - --------- ------------------------------------------------- ---- 10.1 Second Amendment dated as of August 15, 1994 to 16 the Amended and Restated Rights Agreement dated August 2, 1989 between the Company and Chemical Bank, as successor by merger with Manufacturers Hanover Trust Company. 10.2 The Company's Long Term Incentive Plan, 19 as amended, dated February 17, 1995. 10.3 Employment Agreement made as of January 16, 1995 30 between the Company and Michael B. Richings. 10.4 Employment Agreement made as of February 17, 1995 36 between the Company and Richard E. Blubaugh.
Page 15 of 41 EX-10.1 2 2ND AMENDMENT ATLAS & CHEMICAL BANK Exhibit 10.1 SECOND AMENDMENT dated as of August 15, 1994 (this "Second Amendment") to the Amended and Restated Rights Agreement dated as of August 2, 1989 between Atlas Corporation, a Delaware corporation (the "Company") and Chemical Bank, a New York banking corporation, as successor by merger to Manufacturers Hanover Trust Company, as rights agent (the "Rights Agent"). W I T N E S S E T H - - - - - - - - - - WHEREAS, the Company and the Rights Agent are parties to the Amended and Restated Rights Agreement dated as of August 2, 1989 (as the same may be amended, supplemented or otherwise modified from time to time, the "Agreement"); WHEREAS, in a private placement (the "1994 Private Placement") the Company is selling 9,090,909 "Units" of the Company, each Unit comprised of one share of Common Stock and one-half of a warrant to purchase one share of Common Stock, to certain investors, including Mackenzie and M.I.M. Holdings (in each case as hereinafter defined); and WHEREAS, the Company and the Rights Agent desire to amend the Agreement as provided in this Second Amendment, effective concurrently with the closing of the first tranche of the 1994 Private Placement on August 15, 1994. NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, the Company and the Rights Agent agree as follows: 1. Definitions. Capitalized terms defined in the Agreement shall ----------- have their defined meanings when used herein unless otherwise defined herein. 2. Amendment. --------- (a) Subsection 1(p) of the Agreement is amended by: (i) deleting from subsection 1(p)(iii) the following: "provided that if Phoenix at any time ceases to own beneficially, or have the right to acquire beneficial ownership of, 15% or more of the outstanding Common Stock, then in any such case Phoenix shall thereupon immediately cease to be an Exempt Person"; (ii) deleting the period at the end of subsection 1(p)(iii) and substituting therefor a semicolon; and Page 16 of 41 (iii) adding the following new subsections (iv) and (v): "(iv) effective as of August 15, 1994, Mackenzie Financial Corporation and its Affiliates and Associates (collectively "Mackenzie"), provided that if Mackenzie at any time ceases to own beneficially, or have the right to acquire beneficial ownership of, 15% or more of the outstanding Common Stock, or if Mackenzie acquires, or obtains the right to acquire, beneficial ownership of more than 25% of the outstanding Common Stock, then in each such case Mackenzie shall thereupon immediately cease to be an Exempt Person; and (v) effective as of August 15, 1994, M.I.M. Holdings Limited and its Affiliates and Associates (collectively "M.I.M. Holdings"), provided that if M.I.M. Holdings at any time ceases to own beneficially, or have the right to acquire beneficial ownership of, 15% or more of the outstanding Common Stock, or if M.I.M. Holdings acquires, or obtains the right to acquire, beneficial ownership of more than 25% of the outstanding Common Stock, then in each such case M.I.M. Holdings shall thereupon immediately cease to be an Exempt Person." (b) Section 21 of the Agreement is amended by deleting the sixth sentence thereof and substituting therefor the following sentence: "Any successor Rights Agent, whether appointed by the Company or by such a court, shall be (a) a corporation organized and doing business under the laws of the United States or any State thereof, in good standing, which is authorized under such laws to exercise corporate trust or stock transfer powers and is subject to supervision or examination by federal or state authority and which has at the time of its appointment as Rights Agent a combined capital and surplus of at least $10,000,000 or (b) an Affiliate controlled by a corporation described in clause (a) of this sentence." 3. Conditions Precedent. This Second Amendment shall -------------------- Page 17 of 41 become effective as of August 15, 1994. 4. Limited Effect. This Second Amendment shall not constitute an -------------- amendment of or consent to any provision of the Agreement not expressly referred to herein and shall not be construed as a waiver or consent to any action on the part of the Company that would require a waiver or consent of the Rights Agent except as expressly stated herein. Except as amended, modified or waived herein, the Agreement shall continue to be, and shall remain, in full force and effect in accordance with its terms. 5. Counterparts. This Second Amendment may be signed in any number ------------ of counterparts, each of which shall constitute a single agreement with the same effect as if the signature thereto and hereto were upon the same instrument. 6. Governing Law. This Second Amendment shall be governed by, and ------------- construed and interpreted in accordance with, the laws of the State of New York. IN WITNESS WHEREOF, the Rights Agent and the Company have caused this Second Amendment to be executed and delivered by their duly authorized officers as of the date first written above. CHEMICAL BANK, as Rights Agent By:______________________________ Name: Title: ATLAS CORPORATION By:______________________________ Name: Title: Page 18 of 41 EX-10.2 3 LONG TERM INCENTIVE PLAN Exhibit 10.2 LONG TERM INCENTIVE PLAN OF ATLAS CORPORATION SECTION 1 - PURPOSE AND TERM OF PLAN - ------------------------------------ The Long Term Incentive Plan of Atlas Corporation is designed to attract and retain the services of selected key employees of the Corporation and its Subsidiaries who are in a position to make a material contribution to the successful operation of the business of the Corporation and its Subsidiaries. Awards under the Plan shall be made to selected key employees in the form of Options, Restricted Stock, Restricted Stock Units and Stock Appreciation Rights. The Plan is also intended to provide Options to Nonemployee Directors of the Corporation. The Plan shall be effective August 2, 1989. No awards may be made under the Plan after July 31, 1999. SECTION 2 - DEFINITIONS - ----------------------- For purposes of the Plan, the following terms shall have the indicated meanings: (a) "Board" means the Board of Directors of the Corporation. (b) "Change of Control Event" means, with respect to any event occurring on or after August 1, 1994, any one of the following: (i) Continuing Directors no longer constitute at least two-thirds of the Directors constituting the Board; (ii) any person or group (as defined in Rule 13d-5 under the Exchange Act), together with its affiliates, other than Phoenix Financial Holdings Inc., Mackenzie Financial Corporation or M.I.M. Holdings Limited (in each case, together with its affiliates), becomes the beneficial owner, directly or indirectly, of 15% or more of the Corporation's then outstanding Common Stock or the voting power of the Corporation's then outstanding securities entitled generally to vote for the election of Directors, provided that the foregoing circumstances shall not constitute a Change of Control Event if such beneficial owner is the Corporation, any Subsidiary of the Corporation or any employee benefit plan or employee stock plan of the Corporation or of any Subsidiary of the Corporation, and provided further that, notwithstanding the foregoing, a Change of Control Event shall be deemed to occur if Mackenzie Financial Corporation, and its affiliates, or M.I.M. Holdings Limited, and its affiliates, shall acquire 25% or more of the Corporation's then outstanding Common Stock or the voting power of the Corporation's then outstanding securities entitled generally to vote for the election of Directors; (iii) the approval by the Corporation's stockholders of the merger or consolidation of the Corporation with any other corporation, the sale of substantially all of the Corporation's assets or the liquidation or dissolution of the Corporation, unless, in the case of a merger or consolidation, the Continuing Directors in office immediately prior to such merger or consolidation constitute at least two-thirds of the directors constituting the board of directors of the surviving corporation of such merger or consolidation and any parent (as defined in Rule 12b-2 under the Exchange Act) of such corporation; or (iv) at Page 19 of 41 least two-thirds of the Continuing Directors in office immediately prior to any other action taken or proposed to be taken by the Corporation's stockholders or by the Board determines that such action constitutes, or that such proposed action, if taken, would constitute, a change of control of the Corporation and such action is taken. (c) "Committee" means the Compensation Committee of the Board or such other committee as may be designated by the Board. (d) "Common Stock" means the Common Stock of the Corporation, par value $1 per share. (e) "Continuing Director" means a person who either (i) was a Director on August 1, 1994 or (ii) was designated before such person's initial election as a Director as a Continuing Director by a majority of the Continuing Directors. (f) "Corporation" means Atlas Corporation, a Delaware corporation. (g) "Director" means a member of the Board. (h) "Disability" means a physical or mental impairment sufficient to make the individual eligible for benefits under the long term disability plan of the Corporation as long as that impairment also constitutes a disability within the meaning of Section 22(e)(3) of the Internal Revenue Code of 1986, as amended. (i) "Disinterested Person" means an administrator of the Plan who at the time he or she exercises discretion in administering the Plan is not eligible and has not been eligible at any time within one year prior thereto for selection as a person to whom stock may be allocated or to whom stock options or stock appreciation rights may be granted pursuant to the Plan or any other plan of the Company or any of its affiliates entitling the participants therein to acquire stock, stock options or stock appreciation rights of the Company or any affiliates, except for any plan under which the allocation of stock or grant of stock options or stock appreciation rights is not subject to the discretion of any person or persons. (j) "Exchange Act" means the Securities Exchange Act of 1934, as amended. (k) "Fair Market Value" of the Common Stock on a specified day, other than for purposes of Section 6.10, means the closing price on that day as reported on the New York Stock Exchange - Composite Tape or, if no sale of the Common Stock shall have occurred on the New York Stock Exchange on that day, on the next preceding day on which there was a sale. If the Common Stock is not traded on the New York Stock Exchange, the Fair Market Value shall be the amount that is reasonably determined by the Committee. (l) "Nonemployee Director" means any Director who is not an employee of the Corporation. (m) "Option" means an Option to purchase Common Stock awarded to a Participant as provided in Section 6. (n) "Option Period" means the period from the date of the grant of an Option to the date of its expiration as provided in Section 6.4. (o) "Optionee" means a Participant or Nonemployee Director who has been granted an Option under the Plan. (p) "Participant" means a key employee of the Corporation or any of its Subsidiaries who has been selected by the Committee to receive an award under the Plan. Page 20 of 41 (q) "Plan" means the Long Term Incentive Plan of Atlas Corporation. (r) "Restricted Period" means the period of up to 10 years specified by the Committee pursuant to Sections 4.2 or 5.1. (s) "Restricted Stock" means Common Stock awarded to a Participant subject to restrictions as provided in Section 4 as long as those restrictions are in effect. (t) "Restricted Stock Unit" means the right awarded to a Participant to receive a payment on or about the last day of a Restricted Period in the form of cash or Common Stock as provided in Section 5. (u) "Retirement" means normal or early retirement under the terms of a pension plan of the Corporation or voluntary termination of employment, provided that in each case the Corporation must have given its prior consent to treat the person's termination of employment as a retirement. (v) "Stock Appreciation Right" means a right awarded to a Participant as provided in Section 6 to receive in the form of Common Stock or cash, as specified by the Committee, an amount equal to the excess of the Fair Market Value of a share of Common Stock on the day the right is exercised over the price at which the Participant could exercise an Option to purchase that share. (w) "Subsidiary" means any corporation or other legal entity, domestic or foreign, more than 50% of the voting power of which is owned or controlled, directly or indirectly, by the Corporation. SECTION 3 - GENERAL PROVISIONS - ------------------------------ 3.1 The Committee in its sole discretion shall select those key employees to whom awards are made under the Plan and, with regard to awards made to key employees, shall specify the type of awards made, the number of Options, shares of Restricted Stock, Restricted Stock Units, and Stock Appreciation Rights which in each case are awarded, the Restricted Period or Option Period applicable to the awards and any other conditions relating to the awards that are consistent with the Plan and that the Committee deems appropriate. Participants shall be selected from among the key employees of the Corporation and its Subsidiaries who are in a position to have a material impact on the future results of operations of the Corporation and its Subsidiaries. Participants may be selected and awards may be made at any time during the period that awards may be granted under the Plan. Participants do not have to be selected and awards do not have to be made at the same time by the Committee. Any award made to a Participant shall not obligate the Committee to make any subsequent awards to that Participant. 3.2 Shares of Common Stock acquired under the Plan may be authorized and unissued shares of Common Stock or authorized and issued shares of Common Stock held in the Corporation's treasury. Subject to Section 10.7, the maximum aggregate number of shares of Common Stock reserved for issuance under the Plan shall not exceed 1,745,000. The number of shares of Common Stock available at any time for awards under the Plan shall be determined in a manner which reflects the number of shares of Common Stock then subject to outstanding awards and the number of shares of Common Stock previously acquired under the Plan. For purposes of such Page 21 of 41 determinations, (a) awards of Restricted Stock Units shall be treated as if they are awards of that number of shares of Common Stock which equals the number of such Restricted Stock Units, and (b) shares of Common Stock returned to the Corporation as a result of the forfeiture of Restricted Stock and shares of Common Stock attributable to Restricted Stock Units which are canceled or forfeited or Options which are cancelled, expire or terminate, other than by reason of the exercise of Stock Appreciation Rights, shall again be available for awards under the Plan, and the same shall not be deemed an increase in the number of shares reserved for issuance under the Plan. SECTION 4 - RESTRICTED STOCK - ---------------------------- 4.1 An award of Restricted Stock to a Participant shall entitle the Participant to receive, on the date or dates specified by the Committee, the number of shares of Common Stock specified by the Committee in accordance with the terms and conditions of this Section 4. 4.2 During the Restricted Period specified by the Committee, Restricted Stock awarded to a Participant may not be sold, assigned, transferred, pledged or otherwise encumbered, except as hereinafter provided. Except for those restrictions, a Participant, as the owner of Restricted Stock, shall have all the rights of a holder of Common Stock, including but not limited to the right, subject to the provisions of Sections 10.7 and 10.9, to receive all dividends paid on and the right to vote such Restricted Stock. Notwithstanding anything to the contrary in the Plan, upon the occurrence of a Change of Control Event the Restricted Period applicable to Restricted Stock shall end, and all restrictions on Restricted Stock shall expire. 4.3 If a Participant holding Restricted Stock ceases to be an employee of the Corporation or any of its Subsidiaries during the Restricted Period for any reason other than death, Disability or Retirement, all Restricted Stock held by that Participant which is still subject to the restrictions imposed by Section 4.2 shall be forfeited forthwith and returned to the Corporation upon such cessation of employment. 4.4 If a Participant holding Restricted Stock ceases to be an employee of the Corporation or any of its Subsidiaries during the Restricted Period by reason of death, Disability or Retirement, Restricted Stock held by the Participant shall become free of the restrictions set forth in Section 4.2 to the extent determined by the Committee, and, pursuant to Section 4.7, the Corporation shall deliver the Restricted Stock to the Participant or the Participant's beneficiary, as the case may be, within 60 days. If the Committee does not determine to free the Restricted Stock of such restrictions under those circumstances, the Restricted Stock shall be forfeited and returned to the Corporation. 4.5 Each Participant awarded Restricted Stock shall enter into an agreement with the Corporation in a form specified by the Committee in which the Participant agrees to the terms and conditions of the award and such other matters as the Committee in its sole discretion shall specify. 4.6 Each certificate for Common Stock issued in connection with a Restricted Stock award under the Plan shall be registered in Page 22 of 41 the name of the Participant to whom the Restricted Stock was awarded, deposited by the Participant with the Corporation together with a stock power endorsed in blank and bear the following, or a substantially similar, legend: The transferability of this Certificate and the Common Stock represented hereby is subject to the terms and conditions, including forfeiture, contained in Section 4 of the Long Term Incentive Plan of Atlas Corporation and an Agreement entered into between the registered owner and Atlas Corporation. Copies of the Plan and Agreement are on file in the executive office of Atlas Corporation, 370 17th Street, Denver, Colorado 80202. 4.7 When the restrictions imposed by Section 4.2 and any related restrictions on Restricted Stock have expired or have otherwise been satisfied, the Corporation shall deliver to the Participant holding the Restricted Stock, or the Participant's legal representative, beneficiary or heir, a certificate or certificates, without the legend referred to in Section 4.6, for the number of shares of Restricted Stock deposited with the Corporation by the Participant pursuant to Section 4.6 with respect to which all restrictions have expired or been satisfied. At that time, the Agreement referred to in Section 4.5 shall terminate forthwith as to those shares. SECTION 5 - RESTRICTED STOCK UNITS - ---------------------------------- 5.1 Subject to the provisions of this Section 5 and any other conditions that the Committee shall prescribe, each Restricted Stock Unit awarded to a Participant shall entitle the Participant to receive, on or about the last day of the Restricted Period specified by the Committee, a payment in the form of (a) one share of Common Stock or (b) cash in an amount equal to the Fair Market Value of one share of Common Stock on the last day of the Restricted Period, whichever shall be elected by the Participant in a notice of election delivered to the Corporation prior to the last day of the Restricted Period, provided that, if, as provided in Section 5.2, a Restricted Period ends because of a Change of Control Event, the Participant shall be deemed to have elected to receive such payment in cash. 5.2 During the Restricted Period applicable to Restricted Stock Units awarded to a Participant, the Corporation shall pay to the Participant in cash, at the same time that dividends are paid to holders of Common Stock, the aggregate amount which the Participant would have received as dividends if the Participant had held a number of shares of Common Stock equal to the number of Restricted Stock Units credited to the Participant (hereinafter referred to as "dividend equivalents"), provided that, within 30 days after the commencement of the Restricted Period or prior to the beginning of any fiscal year of the Corporation, the Participant may irrevocably elect, except as provided in the next sentence, to defer payment of then unpaid dividend equivalents to the end of the Restricted Period or, if earlier, the termination of Page 23 of 41 the Participant's employment with the Corporation or any of its Subsidiaries. An election to defer payment of dividend equivalents which may become payable during any fiscal year of the Corporation may be revoked at any time prior to the beginning of that fiscal year. Except as set forth in Section 5.3, payments so deferred shall be credited with interest at a rate determined periodically by the Committee. Notwithstanding anything to the contrary in the Plan, the Restricted Period shall end upon the occurrence of a Change of Control Event. 5.3 If a Participant ceases to be an employee of the Corporation or any of its Subsidiaries during the Restricted Period for any reason other than death, Disability or Retirement, all Restricted Stock Units previously awarded to the Participant shall be forfeited and cease to be credited to the Participant upon such termination of employment, and the Participant shall be paid any dividend equivalents deferred pursuant to Section 5.2 without interest. 5.4 If a Participant ceases to be an employee of the Corporation or any of its Subsidiaries during the Restricted Period by reason of death, Disability or Retirement, within 60 days thereafter the Corporation shall pay, to the extent determined by the Committee, to the Participant or the Participant's beneficiary, as the case may be, with respect to each Restricted Stock Unit, one share of Common Stock or an amount in cash equal to the Fair Market Value of one share of Common Stock on the date the event described in this Section 5.4 occurred. Restricted Stock Units with respect to which no payment is made shall be forfeited. Whether or not a payment is made with respect to Restricted Stock Units, the Participant shall receive any dividend equivalents deferred pursuant to Section 5.2 plus interest at a rate determined periodically by the Committee. SECTION 6 - OPTIONS AND STOCK APPRECIATION RIGHTS - ------------------------------------------------- 6.1 Subject to the provisions of this Section 6, the Committee may grant incentive and non-qualified Options and Stock Appreciation Rights to selected key employees of the Corporation and its Subsidiaries. Each Option shall be evidenced by a Stock Option Agreement between the Corporation and the Optionee which contains the terms and conditions specified by this Section 6 and, with regard to Options granted to key employees, such other terms and conditions as the Committee in its sole discretion shall specify. 6.2 Each Stock Option Agreement shall state the number of shares of Common Stock to which it pertains and whether such Option is intended to constitute an incentive Option or a nonqualified Option. The maximum number of shares with regard to which Options may be awarded under the Plan during any calendar year to any Participant shall be 350,000 shares. 6.3 The exercise price per share of Common Stock with respect to each Option shall not be less than 100% of the Fair Market Value of a share of Common Stock on the day the Option is granted. 6.4 Options granted under the Plan shall expire no later than the day preceding the tenth anniversary of the date the Option was granted. Except as provided in the next sentence, (i) no Option granted before January 1, 1995 shall be exercisable within one year Page 24 of 41 after the date of grant, (ii) no Option granted on or after January 1, 1995 shall be exercisable within six (6) months after the date of grant and (iii) except with regard to Options granted to a Nonemployee Director, which shall be exercisable solely in accordance with Section 7, the Committee may prescribe the date or dates thereafter upon which all or a portion of the Option becomes exercisable. Notwithstanding anything to the contrary in the Plan, upon the occurrence of a Change of Control Event, all outstanding Options which are not then exercisable shall become exercisable in full immediately. 6.5 At the time any Option is exercised in whole or in part, the Optionee or other person exercising the Option shall pay to the Corporation, in cash, Common Stock or other property, including Restricted Stock, as acceptable to the Corporation, the full exercise price of the shares purchased, and the purchased shares shall be delivered to the Optionee promptly. No Optionee or his or her legal representatives, legatees or distributee, as the case may be, shall be deemed to be a holder of any shares upon the exercise of an Option until the date of issuance of a stock certificate to the Optionee for those shares. The proceeds from the sale of shares upon the exercise of Options shall be added to the general funds of the Corporation and used for general corporate purposes. 6.6 If an Optionee other than a Nonemployee Director shall cease to be employed by the Corporation or any of its Subsidiaries prior to the end of the Option Period, other than by reason of the death, Disability or Retirement of the Optionee, each Option then held by the Optionee shall remain exercisable, to the extent that it was exercisable at the time of such cessation, for a period of three months from the date of such cessation, but not later than the end of the Option Period, and thereafter any such Option shall terminate. If an Optionee other than a Nonemployee Director shall cease to be employed by the Corporation or any of its Subsidiaries prior to the end of the Option Period by reason of Retirement, each Option then held by the Optionee shall remain exercisable, to the extent that it was exercisable at the time of Retirement, for a period of five years from the date of Retirement, but not later than the end of the Option Period, and thereafter any such Option shall terminate. If an Optionee other than a Nonemployee Director shall cease to be employed by the Corporation or any of its Subsidiaries prior to the end of the Option Period by reason of death or Disability, each Option then held by the Optionee shall remain exercisable, to the extent that it was exercisable at the time of cessation of employment, for a period of one year from the date of cessation of employment, but not later than the end of the Option Period, and thereafter any such Option shall terminate. Notwithstanding the provisions of this Section 6.6, if an Optionee other than a Nonemployee Director is discharged for cause, which shall mean participation in conduct during his or her association with the Corporation consisting of fraud, felony, willful misconduct or commission of an act which causes or may reasonably be expected to cause substantial damage to the Corporation or any of its Subsidiaries, each Option then held by the Optionee shall terminate forthwith. 6.7 If an Optionee ceases to serve as a Nonemployee Director for any reason, he or she may exercise any of his or her Options, Page 25 of 41 but only within three months following the date that he or she ceases to serve on the Board, to the extent any such Option is exercisable at the date of such termination. To the extent that he or she does not exercise an exercisable Option within such time, any such Option shall terminate. 6.8 The Committee may grant Stock Appreciation Rights to Optionees other than Nonemployee Directors in tandem with Options, so that exercise of a Stock Appreciation Right will have the effect of terminating the Option, or portion thereof, to which it relates, and exercise of an Option, or portion thereof, to which a Stock Appreciation Right relates will have the effect of terminating the Stock Appreciation Right. Stock Appreciation Rights shall be exercisable in the same installments and be subject to the same terms and conditions as the Options to which they relate and to such other terms and conditions as the Committee in its sole discretion shall specify. 6.9 The aggregate Fair Market Value, determined as of the date an Option is granted, of the Common Stock with regard to which any Participant may be awarded incentive Options which are first exercisable by the Participant during any calendar year, under the Plan or any other stock option plan maintained by the Corporation or its Subsidiaries, shall not exceed $100,000. 6.10 Each Option granted under the Plan shall have, to the extent exercisable after giving effect to the last sentence of Section 6.4, a limited right of surrender allowing the Optionee to surrender the Option within the 30- day period following a Change of Control Event and to receive cash, in lieu of exercising the Option, in the amount by which the highest fair market value of the number of shares of Common Stock covered by the Option during the 60 days preceding the date on which the Change of Control Event occurs exceeds the exercise price for the shares of Common Stock covered by the Option. For this purpose, the fair market value of a share of Common Stock means the closing price of a share of Common Stock as reported on the New York Stock Exchange - Composite Tape. If the Common Stock is not listed or admitted to trading on the New York Stock Exchange, the fair market value of a share of Common Stock shall be the closing price of a share of Common Stock on the principal national securities exchange on which the Common Stock is listed or admitted to trading, or, if the Common Stock is not listed or admitted to trading on any national securities exchange, the last quoted sale price or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market of the Common Stock, as reported by the National Association of Securities Dealers, Inc. Automated Quotations System ("NASDAQ") or such other system then in use, or, if on any such date the Common Stock is not quoted by any such organization, the average of the closing bid and asked prices of the Common Stock as furnished by a professional market maker making a market in the Common Stock, as selected by the Board. If on any such date no market maker is making a market in the Common Stock, the fair market value of the Common Stock shall be determined in good faith by the Continuing Directors. SECTION 7 - NONEMPLOYEE DIRECTORS - --------------------------------- 7.1 Notwithstanding the powers set forth in Section 3.1 or Page 26 of 41 any other provision of the Plan, the Committee shall have no power to determine eligibility for grants of non-qualified Options or the number of shares of Common stock for which non-qualified Options may be granted or the timing or exercise price of non-qualified Options granted to any Nonemployee Director. Grants of non-qualified Options to Nonemployee Directors shall be automatic as set forth in Section 7.2. 7.2 All Nonemployee Directors who are Directors on January 6, 1995 or who become Directors after such date, shall be granted automatically, as of January 6, 1995 or, if such person becomes a Director after January 6, 1995, as of the date such person becomes a Director, a non-qualified Option to purchase 20,000 shares of Common Stock, at an exercise price per share of the Fair Market Value per share on the date of grant, which Option shall vest in three cumulative annual installments, as follows: 6,667 shares on the first anniversary of the date of grant, 6,667 shares on the second anniversary of the date of grant and 6,666 shares on the third anniversary of the date of grant. SECTION 8 - ADMINISTRATION - -------------------------- 8.1 The Plan shall be administered by the Committee, which shall be composed of three or more Directors, appointed from time to time by the Board, each of whom shall be a Disinterested Person within the meaning of Rule 16b-3 of the Exchange Act and shall be an "outside director" as defined in the Treasury regulations issued pursuant to Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"). Any member of the Committee may resign at any time, and the Board may remove any member of the Committee at any time and fill any vacancy on the Committee. 8.2 Subject to the provisions of the Plan, the Committee shall have exclusive power to select the key employees who shall be Participants and to determine the amount of, or method of determining, the awards to be made to Participants. 8.3 The Committee's interpretation of the Plan and of any award granted under the Plan shall be final and binding on all Participants. 8.4 The Committee shall have the authority to establish, adopt or revise such rules and regulations relating to the Plan as it deems necessary or advisable for the administration of the Plan. SECTION 9 - AMENDMENT OR TERMINATION - ------------------------------------ 9.1 The Board may amend any provision of the Plan and any agreement under the Plan at any time, except as set forth in Section 9.3, provided that no amendment may be made that would (a) increase the maximum number of shares of Common Stock which may be acquired under the Plan, (b) extend the term during which Options may be granted under the Plan or (c) reduce the exercise price per share to less than the Fair Market Value of the Common Stock on the date an Option was granted unless the amendment has been approved by the stockholders of the Corporation as provided in Rule 16b-3(a) under the Exchange Act, if continuation of the exemption granted by Rule 16b-3 under the Exchange Act requires such approval. The Board shall also have the right to terminate the Plan at any time. If the Plan is terminated, payment of dividend equivalents which have been deferred shall be made in accordance with the provisions Page 27 of 41 of the Plan as in effect prior to its termination, including the provisions relating to the authority of the Committee to administer and interpret the Plan. Except with a Participant's consent, no amendment, suspension or termination shall impair the rights of the Participant in any Options, Restricted Stock, Restricted Stock Units or Stock Appreciation Rights awarded to the Participant under the Plan. 9.2 The Committee may refrain from designating Participants and from making any awards, but such shall not be deemed a termination of the Plan. No employee or Nonemployee Director of the Corporation or any of its Subsidiaries shall have any claim or right to be granted awards under the Plan. 9.3 The formula provisions set forth in Section 7 of the Plan governing grants of non-qualified Options to Nonemployee Directors shall not be amended more than once every twelve (12) months, other than to comport with changes to the Code or the Employee Retirement Income Security Act of 1974, as amended. SECTION 10 - MISCELLANEOUS - -------------------------- 10.1 The fact that a key employee of the Corporation or any of its Subsidiaries or a Nonemployee Director has been designated a Participant shall not confer on that employee or Nonemployee Director any right to be retained by the Corporation or any of its Subsidiaries or to subsequent awards under the Plan. 10.2 No award under the Plan shall be taken into account in determining a Participant's compensation for purposes of any group life insurance or other employee benefit or pension plan of the Corporation, including the Atlas Corporation 1978 Retirement Plan and the Investment and Savings Plan for Employees of Atlas Corporation. 10.3 The Plan shall not be deemed an exclusive method of providing incentive compensation for the officers and employees of the Corporation and its Subsidiaries, and it shall not preclude the Board from authorizing or approving other forms of incentive compensation. 10.4 All expenses and costs in connection with the operation of the Plan shall be borne by the Corporation. 10.5 Options, Restricted Stock, Restricted Stock Units and Stock Appreciation Rights awarded under the Plan shall not be transferable by a Participant other than by will or the laws of descent and distribution, and Options and Stock Appreciation rights awarded under the Plan shall be exercisable during an Optionee's lifetime only by the Optionee. 10.6 A Participant or a Nonemployee Director may appoint a beneficiary, on a form supplied by the Committee, to receive Restricted Stock Unit payments and to exercise Options and Stock Appreciation Rights, as the case may be, in the event of the death of the Participant or Nonemployee Director and may change that beneficiary at any time prior to the date of the death of the Participant or Nonemployee Director. 10.7 In the event of any change in the outstanding shares of Common Stock by reason of any stock dividend or split, recapitalization, merger, consolidation, combination or exchange of shares or other similar corporate change, the maximum aggregate number and class of shares in which awards may be granted under the Page 28 of 41 Plan, the number of Restricted Stock Units outstanding and the number of shares subject to outstanding Options and Stock Appreciation rights shall be appropriately adjusted by the Committee, whose determination shall be conclusive. Any shares of stock or other securities distributed to a Participant with respect to a Restricted Stock shall be subject to the restrictions and requirements imposed by Section 4, including depositing the certificates therefor with the Corporation together with a stock power and bearing a legend as provided in Section 4.6. 10.8 If the Corporation shall be consolidated or merged with another corporation, each Participant who has received Restricted Stock that is still subject to restrictions imposed by Section 4.2 may be required to deposit with the successor corporation the certificates for the stock or securities or the other property that the Participant is entitled to receive by reason of ownership of Restricted Stock in a manner consistent with Section 4.6, and such stock, securities or other property shall become subject to the restrictions and requirements imposed by Section 4, and the certificates therefor or other evidence thereof shall bear a legend similar in form and substance to the legend set forth in Section 4.6. 10.9 The Corporation shall be entitled to withhold from any award payable under the Plan the amount of taxes the Corporation deems necessary to satisfy any applicable Federal, state and local income tax withholding obligations arising from the payment of the award or to make other appropriate arrangements with Participants to satisfy such obligations. 10.10 Notwithstanding anything to the contrary in the Plan, nothing in the Plan shall be construed to prevent the transfer of funds to a grantor trust for the purpose of paying benefits under the Plan. (Text as amended through January 7, 1995) IN WITNESS WHEREOF, the undersigned has caused the Plan to be adopted by and on behalf of the Corporation on this ___ day of ____________, 1995. Attest: ATLAS CORPORATION ________________________ By: ____________________________ Secretary Name: Title: Page 29 of 41 EX-10.3 4 EMPLOYMENT AGREEMENT RICHINGS Exhibit 10.3 EMPLOYMENT AGREEMENT -------------------- THIS EMPLOYMENT AGREEMENT (the "Agreement") is made as of January 16, 1995 between ATLAS CORPORATION, a Delaware corporation ("Employer"), and MICHAEL B. RICHINGS, President and Chief Operating Officer of Employer ("Executive"). Employer and Executive agree as follows: 1. EMPLOYMENT. In accordance with the terms and conditions of this ---------- Agreement, Employer agrees to employ Executive as an officer of Employer commencing January 16, 1995, and continuing until that employment is terminated (a) by either Employer or Executive or (b) by reason of Executive's normal retirement in accordance with Employer's retirement programs applicable to Executive at the time of his retirement ("Executive's Retirement"). Executive accepts that employment and agrees to perform the duties associated therewith. Subject to the terms and conditions of this Agreement, Executive's employment by Employer may be terminated at any time by either Executive or Employer by 10 days prior written notice to that effect. 2. DUTIES. As long as Executive is employed by Employer hereunder, ------ Executive shall be subject to the direction of and be responsible to the Chief Executive Officer of Employer with respect to the performance of his duties hereunder, shall report to the Chief Executive Officer of Employer in that connection at such times and in such detail as the Chief Executive Officer of Employer may require and shall devote his full business time, attention, skill and efforts to the business and affairs of Employer. 3. SALARY. As compensation for the services to be furnished by Executive ------ to Employer hereunder, as long as Executive is employed by Employer hereunder, Employer shall pay Executive a salary at a minimum annual rate of $200,000 payable in accordance with Employer's standard payroll policies applicable to officers. 4. BASIC EMPLOYEE BENEFIT PLANS AND PROGRAMS. As long as Executive is ----------------------------------------- employed by employer hereunder, Executive shall be entitled to participate in all regular and key employee benefit plans and programs which are or may be made available by Employer for its officers. 5. EXPENSES. Employer shall provide for the payment of, or reimbursement -------- of Executive for, all travel and other out-of-pocket expenses reasonably incurred by Executive in the performance of his duties hereunder. 6. TERMINATION. ----------- 6.1 Certain Definitions. As used in this Section 6: ------------------- Page 30 of 41 (a) "Board" means the Board of Directors of Employer. ----- (b) "Cause" means, and is limited to, (i) action by Executive ----- involving willful malfeasance, (ii) failure to act by Executive involving material nonfeasance or (iii) Executive being convicted of a felony. (c) "Change of Control Event" means any one of the following: (i) ----------------------- Continuing Directors no longer constitute at least two thirds of the Directors constituting the Board; (ii) any person or group (as defined in Rule 13d-5 under the Securities Exchange Act of 1934), together with its affiliates, becomes the beneficial owner, directly or indirectly, of 15% or more of Employer's then outstanding Common Stock or 15% or more of the voting power of Employer's then outstanding securities entitled generally to vote for the election of Directors, provided that the foregoing circumstances shall not constitute a Change of Control Event if such beneficial owner is Employer, any subsidiary of Employer, any employee benefit plan or employee stock plan of Employer or of any subsidiary of Employer; (iii) the approval by Employer's stockholders of the merger or consolidation of Employer with any other corporation, the sale of substantially all of Employer's assets or the liquidation or dissolution of Employer, unless, in the case of a merger or consolidation, the Continuing Directors in office immediately prior to such merger or consolidation constitute at least two thirds of the directors constituting the board of directors of the surviving corporation of such merger or consolidation and any parent (as such term is defined in Rule 12b-2 under the Securities Exchange Act of 1934) of such corporation; or (iv) at least two thirds of the Continuing Directors in office immediately prior to any other action taken or proposed to be taken by Employer's stockholders or by the Board determines that such action constitutes, or that such proposed action, if taken, would constitute, a change of control of employer and such action is taken. (d) "Continuing Director" means any person who (i) is a Director on ------------------- the date of this Agreement; (ii) was designated before such person's initial election as a Director as a Continuing Director by a majority of the Continuing Directors; or (iii) has been a Director for at least two years after the occurrence of one or more Change of Control Events. (e) "Director" means a member of the Board. -------- (f) "Disability" means, as applied to Executive, that (i) he has ---------- been so incapacitated by bodily injury or disease as to be unable to perform the duties contemplated to be performed by him hereunder, (ii) the incapacity shall have continued for a period of three consecutive months and (iii) the incapacity will, in the opinion of a qualified physician acceptable to Employer, be permanent and continuous for a period of at least one year. (g) "Good Reason" means (i) without Executive's written consent (A) ----------- (1) the assignment to Executive of any duties Page 31 of 41 and responsibilities, or any limitation of Executive's duties and responsibilities, if such assignment or limitation is materially inconsistent with Executive's positions, duties, responsibilities and status as an executive of Employer or (2) any removal of Executive from, or any failure to reelect Executive to, any of Executive's positions with Employer for Cause or as a result of the death or Disability of Executive, and (B) the continuance thereof for a period of 20 days after written notice thereof to Employer from Executive; (ii) any failure by Employer to pay, or any reduction by Employer of, the salary payable to Executive under Section 3 of this Agreement; (iii) any failure by Employer (A) to continue to provide Executive with the opportunity to participate, on terms no less favorable than those in effect immediately prior to a Change of Control Event, in any benefit plan or program in which Executive was participating immediately prior to the Change of Control Event, or their equivalent, or (B) to provide Executive with all other fringe benefits, or their equivalent, from time to time in effect for the benefit of any of Employer's salaried employees; (iv) the failure by Employer to obtain the specific assumption of this Agreement by a successor or assign of Employer or by any person acquiring substantially all of Employer's assets; or (v) any material breach by Employer of any provision of this Agreement. 6.2 Compensation of Executive in the Event of Termination of -------------------------------------------------------- Executive's Employment Hereunder. - -------------------------------- (a) In the event of Executive's Disability, Executive's employment by Employer hereunder may be terminated by Employer upon written notice from Employer to Executive which shall specify a date not less than 30 days from the date of such notice as the date on which such termination shall become effective. If Executive's employment by Employer hereunder is terminated because of executive's Disability or death, Executive, or his heirs, executors or administrators if termination is because of Executive's death, shall be entitled to receive the salary payable to Executive under Section 3 until the date on which the termination occurs. (b) (i) Executive shall be entitled to compensation as specified in Section 6.2(b)(ii) and (iii) if (A) Employer terminates Executive's employment hereunder without Cause either before a Change of Control Event or more than two years after the last Change of Control Event, or (B) Executive voluntarily terminates his employment hereunder with Good Reason either before a Change of Control Event or more than two years after the last Change of Control Event. (ii) Prior to the 30th day following the date of such termination Employer shall pay Executive (A) the amount which equals Executive's annual rate of base salary that is in effect on the date of termination, and (B) all amounts which had accrued but were not paid prior to such termination for personal services actually rendered before the termination. (iii) As soon as practicable following the date of such termination, or at such later date as Executive may validly elect, Employer shall pay Executive all amounts payable under then existing employee benefit Page 32 of 41 plans and programs. Notwithstanding the foregoing, if the sum of all of the payments to Executive whether under this Agreement or otherwise (but excluding any payments which need not be included in determining if a "parachute payment" has been made within the meaning of Internal Revenue Code (the "Code") (S) 280G(b)(2) exceeds the product of multiplying the Base Amount times 2.99, then such payments hereunder shall be reduced by the amount of such excess. For purposes of this Agreement, the term Base Amount is defined in Code (S) 280G(b)(3) and the Treasury Regulations promulgated thereunder, calculated as of the date required under the Code. (c) (i) Executive shall be entitled to compensation as specified in Section 6.2(c)(ii) and (iii) if (A) Employer terminates Executive's employment hereunder without Cause upon or after a Change of Control Event but within two years after the date of that Change of Control Event, or (B) Executive voluntarily terminates his employment hereunder with Good Reason upon or after a Change of Control Event but within two years after the date of that Change of Control Event. (ii) Prior to the 30th day following the date of such termination Employer shall pay Executive (A) the amount which equals the product of multiplying Executive's annual rate of base salary that is in effect on the date of termination times two, and (B) all amounts which had accrued but were not paid prior to such termination for personal services actually rendered before the termination. (iii) As soon as practicable following the date of such termination, or at such later date as Executive may validly elect, Employer shall pay Executive all amounts payable under then existing employee benefit plans and programs. Notwithstanding the foregoing, if the sum of all of the payments to Executive whether under this Agreement or otherwise (but excluding any payments which need not be included in determining if a "parachute payment" has been made within the meaning of Code (S) 280G(b)(2)) exceeds the Base Amount times 2.99, then such payments hereunder shall be reduced by the amount of such excess. (b) If Executive's employment hereunder is terminated by Employer or by Executive under any circumstances other than as set forth in Section 6.2(a), 6.2(b), or 6.2(c), all payments required by this Agreement shall cease and the termination shall relive Employer of its obligations to make any further payments under this Agreement except payments under the employee benefit plans and programs and payments of amounts which had accrued but were not yet paid prior to the termination. 7. CONFIDENTIAL INFORMATION AND TRADE SECRETS. Executive acknowledges that ------------------------------------------ all information possessed by him relating to activities of Employer that is of a secret or confidential nature, including without limitation financial information, exploration, mining and milling information, lists of customers, technical and production know-how, developments, inventions, processes and administrative procedures, is the property of Employer, and as long as Executive is employed by Employer hereunder, and for a period of two years thereafter, Executive shall not use any such information for the benefit of anyone other than Employer or disclose any such Page 33 of 41 information to others except in the course of Employer's business. 8. PAYMENT TO ESTATE OR BENEFICIARY. If Executive dies before any payments -------------------------------- required to be paid by Employer to Executive hereunder have been paid, Employer shall make all such payments to the beneficiary or beneficiaries designated by Executive in a written notice previously delivered by Executive or Employer or, in the absence of such a notice, to Executive's estate. 9. ARBITRATION. Any and all disputes arising under or relating to this ----------- Agreement shall be subject to mandatory binding arbitration in Denver, Colorado, before the American Arbitration Association in accordance with its Commercial Arbitration Rules. Discovery shall be allowed but subject to the limits and procedures set forth in Rule 26.1 of the Colorado Rules of Civil Procedure. The prevailing party in any such arbitration proceeding shall be entitled to an award of his or its reasonable costs and attorney fees. 10. BINDING EFFECT; SUCCESSORS, ASSIGNMENT. Subject to the provisions of -------------------------------------- this Section 10, this Agreement shall be binding upon, inure to the benefit of and be enforceable by Employer and Executive and their respective heirs, legal representatives, successors and assigns. If Employer shall be merged into or consolidated with another entity, the provisions of this Agreement shall be binding upon and inure to the benefit of the entity surviving such merger or resulting from such consolidation. 11. GOVERNING LAW. This Agreement shall be governed by and construed in ------------- accordance with the laws of the State of Colorado applicable to contracts made and to be performed therein. 12. NOTICE. Any notice required to be given hereunder shall be in writing ------ and delivered by certified mail, return receipt requested, addressed: To Employer at: Republic Plaza 370 Seventeenth Street Suite 3150 Denver, Colorado 80202 To Executive at: Republic Plaza 370 Seventeenth Street Suite 3150 Denver, Colorado 80202 Page 34 of 41 or in either case to such other address as may be specified in a written notice given as provided above. 13. ENTIRE AGREEMENT; AMENDMENT. This Agreement represents the entire --------------------------- agreement of Employer and Executive with respect to the subject matter hereof and shall supersede any and all previous agreements, arrangements and understandings between Employer and Executive in that regard. This Agreement may be amended only by the written agreement of Employer and Executive. ATLAS CORPORATION By______________________________ Chief Executive Officer EXECUTIVE ________________________________ Michael B. Richings Page 35 of 41 EX-10.4 5 EMPLOYMENT AGREEMENT BLUMBAUGH Exhibit 10.4 EMPLOYMENT AGREEMENT -------------------- THIS EMPLOYMENT AGREEMENT (the "Agreement") is made as of February 17, 1995 between ATLAS CORPORATION, a Delaware corporation ("Employer"), and RICHARD E. BLUBAUGH, Vice President, Environmental and Governmental Affairs ("Executive"). Employer and Executive agree as follows: 1. EMPLOYMENT. In accordance with the terms and conditions of this ---------- Agreement, Employer agrees to employ Executive as an officer of Employer commencing February 17, 1995, and continuing until that employment is terminated (a) by either Employer or Executive or (b) by reason of Executive's normal retirement in accordance with Employer's retirement programs applicable to Executive at the time of his retirement ("Executive's Retirement"). Executive accepts that employment and agrees to perform the duties associated therewith. Subject to the terms and conditions of this Agreement, Executive's employment by Employer may be terminated at any time by either Executive or Employer by 10 days prior written notice to that effect. 2. DUTIES. As long as Executive is employed by Employer hereunder, ------ Executive shall be subject to the direction of and be responsible to the Chief Executive Officer of Employer with respect to the performance of his duties hereunder, shall report to the Chief Executive Officer of Employer in that connection at such times and in such detail as the Chief Executive Officer of Employer may require and shall devote his full business time, attention, skill and efforts to the business and affairs of Employer. 3. SALARY. As compensation for the services to be furnished by Executive ------ to Employer hereunder, as long as Executive is employed by Employer hereunder, Employer shall pay Executive a salary at a minimum annual rate of $86,500 payable in accordance with Employer's standard payroll policies applicable to officers. 4. BASIC EMPLOYEE BENEFIT PLANS AND PROGRAMS. As long as Executive is ----------------------------------------- employed by employer hereunder, Executive shall be entitled to participate in all regular and key employee benefit plans and programs which are or may be made available by Employer for its officers. 5. EXPENSES. Employer shall provide for the payment of, or reimbursement -------- of Executive for, all travel and other out-of-pocket expenses reasonably incurred by Executive in the performance of his duties hereunder. Page 36 of 41 6. TERMINATION. ----------- 6.1 Certain Definitions. As used in this Section 6: ------------------- (a) "Board" means the Board of Directors of Employer. ----- (b) "Cause" means, and is limited to, (i) action by Executive ----- involving willful malfeasance, (ii) failure to act by Executive involving material nonfeasance or (iii) Executive being convicted of a felony. (c) "Change of Control Event" means any one of the following: (i) ----------------------- Continuing Directors no longer constitute at least two thirds of the Directors constituting the Board; (ii) any person or group (as defined in Rule 13d-5 under the Securities Exchange Act of 1934), together with its affiliates, becomes the beneficial owner, directly or indirectly, of 15% or more of Employer's then outstanding Common Stock or 15% or more of the voting power of Employer's then outstanding securities entitled generally to vote for the election of Directors, provided that the foregoing circumstances shall not constitute a Change of Control Event if such beneficial owner is Employer, any subsidiary of Employer, any employee benefit plan or employee stock plan of Employer or of any subsidiary of Employer; (iii) the approval by Employer's stockholders of the merger or consolidation of Employer with any other corporation, the sale of substantially all of Employer's assets or the liquidation or dissolution of Employer, unless, in the case of a merger or consolidation, the Continuing Directors in office immediately prior to such merger or consolidation constitute at least two thirds of the directors constituting the board of directors of the surviving corporation of such merger or consolidation and any parent (as such term is defined in Rule 12b-2 under the Securities Exchange Act of 1934) of such corporation; or (iv) at least two thirds of the Continuing Directors in office immediately prior to any other action taken or proposed to be taken by Employer's stockholders or by the Board determines that such action constitutes, or that such proposed action, if taken, would constitute, a change of control of Employer and such action is taken. (d) "Continuing Director" means any person who (i) is a Director on ------------------- the date of this Agreement; (ii) was designated before such person's initial election as a Director as a Continuing Director by a majority of the Continuing Directors; or (iii) has been a Director for at least two years after the occurrence of one or more Change of Control Events. (e) "Director" means a member of the Board. -------- (f) "Disability" means, as applied to Executive, that (i) he has ---------- been so incapacitated by bodily injury or disease as to be unable to perform the duties contemplated to be performed by him hereunder, (ii) the incapacity shall have continued for a period of three consecutive months and (iii) the incapacity will, in the opinion of a qualified physician acceptable to Employer, be Page 37 of 41 permanent and continuous for a period of at least one year. (g) "Good Reason" means (i) without Executive's written consent (A) ----------- (1) the assignment to Executive of any duties and responsibilities, or any limitation of Executive's duties and responsibilities, if such assignment or limitation is materially inconsistent with Executive's positions, duties, responsibilities and status as an executive of Employer or (2) any removal of Executive from, or any failure to reelect Executive to, any of Executive's positions with Employer for Cause or as a result of the death or Disability of Executive, and (B) the continuance thereof for a period of 20 days after written notice thereof to Employer from Executive; (ii) any failure by Employer to pay, or any reduction by Employer of, the salary payable to Executive under Section 3 of this Agreement; (iii) any failure by Employer (A) to continue to provide Executive with the opportunity to participate, on terms no less favorable than those in effect immediately prior to a Change of Control Event, in any benefit plan or program in which Executive was participating immediately prior to the Change of Control Event, or their equivalent, or (B) to provide Executive with all other fringe benefits, or their equivalent, from time to time in effect for the benefit of any of Employer's salaried employees; (iv) the failure by Employer to obtain the specific assumption of this Agreement by a successor or assign of Employer or by any person acquiring substantially all of Employer's assets; or (v) any material breach by Employer of any provision of this Agreement. 6.2 Compensation of Executive in the Event of Termination of -------------------------------------------------------- Executive's Employment Hereunder. - -------------------------------- (a) In the event of Executive's Disability, Executive's employment by Employer hereunder may be terminated by Employer upon written notice from Employer to Executive which shall specify a date not less than 30 days from the date of such notice as the date on which such termination shall become effective. If Executive's employment by Employer hereunder is terminated because of Executive's Disability or death, Executive, or his heirs, executors or administrators if termination is because of Executive's death, shall be entitled to receive the salary payable to Executive under Section 3 until the date on which the termination occurs. (b) (i) Executive shall be entitled to compensation as specified in Section 6.2(b)(ii) and (iii) if (A) Employer terminates Executive's employment hereunder without Cause either before a Change of Control Event or more than two years after the last Change of Control Event, or (B) Executive voluntarily terminates his employment hereunder with Good Reason either before a Change of Control Event or more than two years after the last Change of Control Event. (ii) Prior to the 30th day following the date of such termination Employer shall pay Executive (A) the amount which equals Executive's annual rate of base salary that is in effect on the date of termination, and (B) all amounts which had accrued but were not paid prior to such termination for personal Page 38 of 41 services actually rendered before the termination. (iii) As soon as practicable following the date of such termination, or at such later date as Executive may validly elect, Employer shall pay Executive all amounts payable under then existing employee benefit plans and programs. Notwithstanding the foregoing, if the sum of all of the payments to Executive whether under this Agreement or otherwise (but excluding any payments which need not be included in determining if a "parachute payment" has been made within the meaning of Internal Revenue Code (the "Code") (S) 280G(b)(2)) exceeds the product of multiplying the Base Amount times 2.99, then such payments hereunder shall be reduced by the amount of such excess. For purposes of this Agreement, the term Base Amount is defined in Code (S) 280G(b)(3) and the Treasury Regulations promulgated thereunder, calculated as of the date required under the Code. (c) (i) Executive shall be entitled to compensation as specified in Section 6.2(c)(ii) and (iii) if (A) Employer terminates Executive's employment hereunder without Cause upon or after a Change of Control Event but within two years after the date of that Change of Control Event, or (B) Executive voluntarily terminates his employment hereunder with Good Reason upon or after a Change of Control Event but within two years after the date of that Change of Control Event. (ii) Prior to the 30th day following the date of such termination Employer shall pay Executive (A) the amount which equals the Executive's annual rate of base salary that is in effect on the date of termination, and (B) all amounts which had accrued but were not paid prior to such termination for personal services actually rendered before the termination. (iii) As soon as practicable following the date of such termination, or at such later date as Executive may validly elect, Employer shall pay Executive all amounts payable under then existing employee benefit plans and programs. Notwithstanding the foregoing, if the sum of all of the payments to Executive whether under this Agreement or otherwise (but excluding any payments which need not be included in determining if a "parachute payment" has been made within the meaning of Code (S) 280G(b)(2)) exceeds the Base Amount times 2.99, then such payments hereunder shall be reduced by the amount of such excess. (d) If Executive's employment hereunder is terminated by Employer or by Executive under any circumstances other than as set forth in Section 6.2(a), 6.2(b), or 6.2(c), all payments required by this Agreement shall cease and the termination shall relieve Employer of its obligations to make any further payments under this Agreement except payments under the employee benefit plans and programs and payments of amounts which had accrued but were not yet paid prior to the termination. 7. CONFIDENTIAL INFORMATION AND TRADE SECRETS. Executive acknowledges ------------------------------------------ that all information possessed by him relating to activities of Employer that is of a secret or confidential nature, including without limitation financial information, exploration, mining and milling information, lists of customers, technical and production know-how, developments, inventions, processes and Page 39 of 41 administrative procedures, is the property of Employer, and as long as Executive is employed by Employer hereunder, and for a period of two years thereafter, Executive shall not use any such information for the benefit of anyone other than Employer or disclose any such information to others except in the course of Employer's business. 8. PAYMENT TO ESTATE OR BENEFICIARY. If Executive dies before any -------------------------------- payments required to be paid by Employer to Executive hereunder have been paid, Employer shall make all such payments to the beneficiary or beneficiaries designated by Executive in a written notice previously delivered by Executive or Employer or, in the absence of such a notice, to Executive's estate. 9. ARBITRATION. Any and all disputes arising under or relating to ----------- this Agreement shall be subject to mandatory binding arbitration in Denver, Colorado, before the American Arbitration Association in accordance with its Commercial Arbitration Rules. Discovery shall be allowed but subject to the limits and procedures set forth in Rule 26.1 of the Colorado Rules of Civil Procedure. The prevailing party in any such arbitration proceeding shall be entitled to an award of his or its reasonable costs and attorney fees. 10. BINDING EFFECT; SUCCESSORS, ASSIGNMENT. Subject to the provisions -------------------------------------- of this Section 10, this Agreement shall be binding upon, inure to the benefit of and be enforceable by Employer and Executive and their respective heirs, legal representatives, successors and assigns. If Employer shall be merged into or consolidated with another entity, the provisions of this Agreement shall be binding upon and inure to the benefit of the entity surviving such merger or resulting from such consolidation. 11. GOVERNING LAW. This Agreement shall be governed by and construed ------------- in accordance with the laws of the State of Colorado applicable to contracts made and to be performed therein. 12. NOTICE. Any notice required to be given hereunder shall be in ------ writing and delivered by certified mail, return receipt requested, addressed: To Employer at: Republic Plaza 370 Seventeenth Street Suite 3150 Denver, Colorado 80202 To Executive at: Republic Plaza 370 Seventeenth Street Suite 3150 Denver, Colorado 80202 or in either case to such other address as may be specified in a Page 40 of 41 written notice given as provided above. 13. ENTIRE AGREEMENT; AMENDMENT. This Agreement represents the entire --------------------------- agreement of Employer and Executive with respect to the subject matter hereof and shall supersede any and all previous agreements, arrangements and understandings between Employer and Executive in that regard. This Agreement may be amended only by the written agreement of Employer and Executive. ATLAS CORPORATION By_________________________________ President EXECUTIVE ___________________________________ Richard E. Blubaugh Page 41 of 41 EX-27 6 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ATLAS CORPORATION MARCH 31, 1995 CONSOLIDATED FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 9-MOS JUN-30-1994 JUL-01-1994 MAR-31-1995 11 6,474 137 0 250 7,132 47,557 44,652 55,673 2,803 3,500 18,578 0 0 18,797 55,673 2,328 2,328 3,031 3,031 2,704 0 312 (7,281) 0 (7,281) 846 0 0 (6,435) (.41) (.41)
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