UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): May 6, 2005
THE BRINK'S COMPANY
(Exact name of registrant as specified in its charter)
Virginia 1-9148 54-1317776
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
1801 Bayberry Court
P. O. Box 18100
Richmond, VA 23226-8100
(Address and zip code of
principal executive offices)
Registrant's telephone number, including area code: (804) 289-9600
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2.):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting materials pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement.
On May 6, 2005, the shareholders of The Brink's Company approved The Brink's
Company 2005 Equity Incentive Plan (the "2005 Plan").
The principal features of the 2005 Plan are summarized below. This summary is
qualified in its entirety by reference to the 2005 Plan, which was filed as
Exhibit A to the Proxy Statement for the Company's 2005 Annual Meeting of
Shareholders.
Shares Available for Awards
Under the 2005 Plan, the number of shares of common stock available for issuance
will be 5,000,000 shares, subject to adjustment by the Compensation and Benefits
Committee of the Board of Directors (the "Compensation Committee") for stock
splits and other events as set forth in the 2005 Plan. Shares covered by an
award granted under the 2005 Plan other than options and stock appreciation
rights will be counted against the 2005 Plan's authorized shares as two shares
for every one share covered by the award. In addition, each stock appreciation
right will be counted against the 2005 Plan's authorized shares, regardless of
whether a share is used to settle the stock appreciation right upon exercise. If
an award under the 2005 Plan is cancelled or forfeited without the delivery of
the full number of shares underlying such award, only the net number of shares
actually delivered to the participant will be counted against the 2005 Plan's
authorized shares. If an outstanding award under the 1988 Stock Option Plan is
cancelled or forfeited without the delivery of the number of shares underlying
such award, such undelivered shares will also be available for issuance under
the 2005 Plan in addition to all other shares authorized for issuance. Also,
shares underlying awards issued in assumption of or substitution for awards
issued by a company acquired by the Company ("Substitute Awards") will not
reduce the number of shares remaining available for issuance under the 2005
Plan.
No participant may receive options and stock appreciation rights under the 2005
Plan relating to more than 400,000 shares of common stock, subject to adjustment
as noted above, in any calendar year.
Material Features of the 2005 Plan
The 2005 Plan will be administered by the Compensation Committee, a board
committee consisting of not less than three directors. Each director on the
Compensation Committee is and will continue to be "independent" of the Company,
as required by the rules of the New York Stock Exchange. The Compensation
Committee will have, among other powers, the power to interpret and construe any
provision of the 2005 Plan, to adopt rules and regulations for administering the
2005 Plan and to perform other acts relating to the 2005 Plan. Decisions of the
Compensation Committee are final and binding on all parties.
The Compensation Committee will have the sole discretion to grant to eligible
participants one or more equity awards, including options, stock appreciation
rights, restricted stock and restricted stock units, performance units, "other
stock based awards" or any combination thereof. The Compensation Committee will
have the sole discretion to determine the number or amount of any award to be
awarded to any participant.
If the Compensation Committee determines that a dividend or other distribution,
recapitalization, stock split, or other corporate event or transaction (more
fully described in Section 5(d) of the 2005 Plan) affects the shares in such a
way that an adjustment is appropriate to prevent dilution or enlargement of the
benefits, or potential benefits, intended to be made available under the 2005
Plan, the Compensation Committee may adjust: (i) the number and type of shares
(or other securities) which may be made the subject of awards, (ii) the number
and type of shares (or other securities or property) subject to outstanding
awards, and (iii) the grant, purchase or exercise price with respect to any
award. The Compensation Committee may not take any other action to directly or
indirectly reduce, or have the effect of reducing, the exercise price of any
option as established at the time of grant.
Awards will be granted for no cash consideration, or for minimal cash
consideration if required by applicable law. Awards may provide that upon their
exercise the holder will receive cash, stock, other securities or other awards
or any combination thereof, as the Compensation Committee will determine. Any
shares of stock deliverable under the 2005 Plan may consist in whole or in part
of authorized and unissued shares or shares acquired by the Company.
Except in the case of awards made through assumption of, or in substitution for,
outstanding awards previously granted by an acquired company, the exercise price
of stock under any stock option, the grant price of any stock appreciation
right, and the purchase price of any security which may be purchased under any
other stock-based award will not be less than 100% of the fair market value of
the stock or other security on the date of the grant of the option, right or
award. The Compensation Committee will determine the times at which options and
other purchase rights may be exercised and the methods by which and the forms in
which payment of the purchase price may be made. Under the 2005 Plan,
determinations of the fair market value of shares of the Company's common stock
will be based on the average of the high and low quoted sales price on the date
in question and determinations of fair market value with respect to other
property will be made in accordance with methods or procedures established by
the Compensation Committee.
The Compensation Committee may cancel any outstanding award under the 2005 Plan
in consideration of a cash payment or alternative award under the 2005 Plan made
to the holder of such canceled award equal in value to the fair market value of
such canceled award, but this authority may not be used to avoid the 2005 Plan's
prohibition on option repricing.
No awards may be granted under the 2005 Plan after the date of the annual
shareholders meeting in 2015.
Awards
Options. The duration of options granted under the 2005 Plan will be established
by the Compensation Committee but may not exceed six years. Subject to a minimum
vesting period of one year, the Compensation Committee may impose a vesting
schedule on options, and will determine the acceptable form(s) in which the
exercise price may be paid. In general, options are exercisable following
termination of employment for 90 days, if such options were exercisable at the
time of termination. Upon termination of employment by reason of the holder's
retirement or permanent and total disability, options held by the holder will
remain outstanding and continue in accordance with their terms. In the event of
the holder's death while employed or after retirement or permanent and total
disability, options held by the holder will fully vest at the time of the
holder's death (or, if later, on the first anniversary of the grant date) and
remain exercisable by the holder's beneficiary or estate for three years
following the holder's death or their earlier expiration in accordance with
their terms. Also, the Compensation Committee may establish provisions
applicable to options upon termination of employment that differ from those
contained in the 2005 Plan.
Options granted under the 2005 Plan may be "incentive stock options" ("ISOs"),
which afford certain favorable tax treatment for the holder, or "nonqualified
stock options" ("NQSOs"). See "Tax Matters" below.
Stock Appreciation Rights. Stock appreciation rights ("SARs") may, but need not,
relate to options. The Compensation Committee determines the terms of each SAR
at the time of the grant. Any freestanding SAR may not be granted at less than
the fair market value of the stock on the date the SAR is granted, cannot have a
term of longer than six years and must have a minimum vesting period of one
year. The employment termination provisions applicable to SARs are identical to
those described above for options.
Restricted Stock and Restricted Stock Units. The Compensation Committee may
impose restrictions on restricted stock and restricted stock units at its
discretion. These restrictions may lapse as the Compensation Committee deems
appropriate, subject to a one year minimum vesting requirement. Upon termination
of employment during the restriction period by reason of the holder's retirement
or permanent and total disability, any restricted stock and restricted stock
units held by the participant will remain outstanding and continue in accordance
with their terms. In the event of the holder's death while employed or after
retirement or permanent and total disability, restricted stock and restricted
stock units held by the holder will fully vest at the time of the holder's death
(or, if later, on the first anniversary of the grant date). Upon termination of
employment during the restriction period for any other reason, the restricted
stock and restricted stock units held by the participant will be forfeited.
Also, the Compensation Committee may establish provisions applicable to
restricted stock and restricted stock units upon termination of employment that
differ from those contained in the 2005 Plan.
Performance Units. Performance units will be granted and will vest upon the
attainment of performance goals. The Compensation Committee will establish the
performance criteria, the length of the performance period and the form and time
of payment of the award. Generally, upon termination of employment during the
restriction period, the performance units held by the participant will be
forfeited. Upon termination of employment during the restriction period by
reason of the holder's retirement or permanent and total disability, any
performance units held by the participant will remain outstanding and continue
in accordance with their terms. In the event of the holder's death, the holder's
beneficiary or estate will receive a pro-rata portion of the performance unit
upon the expiration of the applicable performance period. Also, the Compensation
Committee may establish provisions applicable to performance units upon
termination of employment that differ from those contained in the 2005 Plan.
Awards (other than options and stock appreciation rights) to certain senior
executives will, if the Compensation Committee intends any such award to qualify
as "qualified performance based compensation" under Section 162(m) of the
Internal Revenue Code, become earned and payable only if pre-established targets
relating to one or more of the following performance measures are achieved
during a performance period or periods, as determined by the Compensation
Committee: (i) net income, (ii) operating income, (iii) return on net assets,
(iv) revenue growth, (v) total shareholder return, (vi) earnings per share,
(vii) return on equity, (viii) net revenue per employee, (ix) market share, (x)
return on capital and/or economic value added (or equivalent metric), (xi) cash
flow and/or free cash flow (before or after dividends), or (xii) subscriber
growth (on a gross or net basis); each as determined in accordance with
generally accepted accounting principles, where applicable, as consistently
applied by the Company and, if so determined by the Compensation Committee prior
to the expiration of such award, adjusted, to the extent permitted under Section
162(m) of the Internal Revenue Code if the Compensation Committee intends the
performance unit award to continue to constitute "qualified performance-based
compensation" under Section 162(m) of the Internal Revenue Code, to omit the
effects of extraordinary items, the gain or loss on the disposal of a business
segment, unusual or infrequently occurring events and transactions, accruals for
awards under the 2005 Plan and cumulative effects of changes in accounting
principles. Such targets may relate to the Company as a whole, or to one or more
units thereof, and may be measured over such periods, as the Compensation
Committee shall determine. The maximum number of shares which may be subject to
any such performance unit award denominated in shares granted in any year is
400,000 shares and the maximum amount earned with respect to any such
performance unit award denominated in cash or value other than cash on an
annualized basis will be $5,000,000.
Other Stock-Based Awards. The Compensation Committee may establish the terms and
conditions of other stock-based awards such as dividend equivalents.
Transferability
The 2005 Plan provides that no award granted under the 2005 Plan may be
transferred or otherwise encumbered by the individual to whom it is granted,
other than by will or by designation of a beneficiary and that, during the
individual's lifetime, each award will be exercisable only by the individual or
by the individual's guardian or legal representative.
Change in Control
Unless specifically provided to the contrary in any applicable award agreement
under the 2005 Plan, upon a Change in Control (as defined in the 2005 Plan), all
outstanding awards will become fully exercisable, will vest and will be settled,
as applicable, and any restrictions applicable to any award shall automatically
lapse.
Eligibility and Participation
Any employee of the Company or its affiliates, including any officer or
employee-director, will be eligible to receive awards under the 2005 Plan.
Additionally, any holder of an outstanding equity based award issued by a
company acquired by the Company may be granted a Substitute Award under the 2005
Plan. The Company and its affiliates had approximately 54,000 employees as of
December 31, 2004. Directors who are not full-time or part-time officers or
employees of the Company will not be eligible to participate in the 2005 Plan.
Amendment and Termination
The Board of Directors may amend, alter, discontinue or terminate the 2005 Plan
or any portion of the 2005 Plan any time. However, shareholder approval must be
obtained for any change that would increase the number of shares available for
awards and may be required by New York Stock Exchange requirements for certain
other amendments.
New Plan Benefits
Any awards under the 2005 Plan will be at the discretion of the Compensation
Committee. Therefore, it is not possible at present to determine the amount or
form of any award that will be available for grant to any individual during the
term of the 2005 Plan or that would have been granted during the last fiscal
year had the 2005 Plan been in effect.
Tax Matters
The following discussion is a brief summary of the principal United States
Federal income tax consequences under current Federal income tax laws relating
to awards under the 2005 Plan. This summary is not intended to be exhaustive
and, among other things, does not describe state, local or foreign income and
other tax consequences.
Non-Qualified Stock Options. An optionee will not recognize any taxable income
upon the grant of an NQSO and the Company will not be entitled to a tax
deduction with respect to the grant of an NQSO. Upon exercise of an NQSO, the
excess of the fair market value of the underlying shares of common stock on the
exercise date over the option exercise price will be taxable as compensation
income to the optionee and will be subject to applicable withholding taxes. The
Company will generally be entitled to a tax deduction at such time in the amount
of such compensation income. The optionee's tax basis for the shares received
pursuant to the exercise of an NQSO will equal the sum of the compensation
income recognized and the exercise price.
In the event of a sale of shares received upon the exercise of an NQSO, any
appreciation or depreciation after the exercise date generally will be taxed as
capital gain or loss and will be long-term capital gain or loss if the holding
period for such shares is more than one year.
Incentive Stock Options. An optionee will not recognize any taxable income at
the time of grant or timely exercise of an ISO and the Company will not be
entitled to a tax deduction with respect to such grant or exercise. Exercise of
an ISO may, however, give rise to taxable compensation income subject to
applicable withholding taxes, and a tax deduction to the Company, if the ISO is
not exercised on a timely basis (generally, while the optionee is employed by
the Company or within 90 days after termination of employment) or if the
optionee subsequently engages in a "disqualifying disposition," as described
below. Also, the excess of the fair market value of the underlying shares on the
date of exercise over the exercise price will be an item of income for purposes
of the optionee's alternative minimum tax.
A sale or exchange by an optionee of shares acquired upon the exercise of an ISO
more than one year after the transfer of the shares to such optionee and more
than two years after the date of grant of the ISO will result in any difference
between the net sale proceeds and the exercise price being treated as long-term
capital gain (or loss) to the optionee. If such sale or exchange takes place
within two years after the date of grant of the ISO or within one year from the
date of transfer of the ISO shares to the optionee, such sale or exchange will
generally constitute a "disqualifying disposition" of such shares that will have
the following results: any excess of (i) the lesser of (a) the fair market value
of the shares at the time of exercise of the ISO and (b) the amount realized on
such disqualifying disposition of the shares over (ii) the option exercise price
of such shares, will be ordinary income to the optionee, subject to applicable
withholding taxes, and the Company will be entitled to a tax deduction in the
amount of such income. Any further gain or loss after the date of exercise
generally will qualify as capital gain or loss and will not result in any
deduction by the Company.
Stock Appreciation Rights. Generally, the recipient of a stand-alone SAR will
not recognize taxable income at the time the stand-alone SAR is granted. If an
employee receives the appreciation inherent in the SARs in stock, the spread
between the then current market value and the grant price will be taxed as
ordinary income to the employee at the time it is received. A SAR settled in
cash would be subject to additional taxes under Section 409A of the Internal
Revenue Code and, as such, the Company currently does not intend to grant such
instruments. In general, there will be no Federal income tax deduction allowed
to the Company upon the grant or termination of SARs. However, upon the exercise
of a SAR, the Company will be entitled to a deduction equal to the amount of
ordinary income the recipient is required to recognize as a result of the
exercise.
Restricted Stock. A grantee will not recognize any income upon the receipt of
restricted stock unless the holder elects under Section 83(b) of the Internal
Revenue Code, within thirty days of such receipt, to recognize ordinary income
in an amount equal to the fair market value of the restricted stock at the time
of receipt, less any amount paid for the shares. If the election is made, the
holder will not be allowed a deduction for amounts subsequently required to be
returned to the Company. If the election is not made, the holder will generally
recognize ordinary income, on the date that the restrictions to which the
restricted stock is subject are removed, in an amount equal to the fair market
value of such shares on such date, less any amount paid for the shares. At the
time the holder recognizes ordinary income, the Company generally will be
entitled to a deduction in the same amount.
Generally, upon a sale or other disposition of restricted stock with respect to
which the holder has recognized ordinary income (i.e., a Section 83(b) election
was previously made or the restrictions were previously removed), the holder
will recognize capital gain or loss in an amount equal to the difference between
the amount realized on such sale or other disposition and the holder's basis in
such shares. Such gain or loss will be long-term capital gain or loss if the
holding period for such shares is more than one year.
Restricted Stock Units and Performance Units. The grant of an award of
restricted stock units or performance units will not result in income for the
grantee or in a tax deduction for the Company. Upon the settlement of such an
award, the grantee will recognize ordinary income equal to the aggregate value
of the payment received, and the Company generally will be entitled to a tax
deduction in the same amount.
Item 5.02. Departure of Directors or Principal Officers; Election of Directors;
Appointment of Principal Officers.
(b) On May 6, 2005, Mr. Gerald Grinstein retired from the Board of Directors
of The Brink's Company at the expiration of his term. Mr. Grinstein has
served with distinction on the Board of Directors since 1998.
Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal
Year.
(a) On May 6, 2005, the Board of Directors amended and restated the Bylaws
of The Brink's Company to make the number of persons serving on the
Board of Directors ten.
Item 9.01. Financial Statements and Exhibits.
(c) Exhibits
3(ii) Bylaws of The Brink's Company, as amended and restated through May 6,
2005.
99 The Brink's Company 2005 Equity Incentive Plan (incorporated by reference
to Exhibit A to the Proxy Statement for The Brink's Company's 2005
Annual Meeting of Shareholders).
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE BRINK'S COMPANY
(Registrant)
Date: May 10, 2005 By: /s/ Austin F. Reed
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Austin F. Reed
Vice President
EXHIBIT INDEX
EXHIBIT DESCRIPTION
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3(ii) Bylaws of The Brink's Company, as amended and restated through May 6,
2005.
99 The Brink's Company 2005 Equity Incentive Plan (incorporated by reference
to Exhibit A to the Proxy Statement for The Brink's Company's 2005 Annual
Meeting of Shareholders).