UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM 10-K
(Mark One)
   [X]          ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                EXCHANGE ACT OF 1934 [FEE REQUIRED]
                For the fiscal year ended December 31, 1997

                                                                  OR

   [ ]          TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
                For the transition period from______________ to____________
                Commission file number 1-9148

                              THE PITTSTON COMPANY
             (Exact name of registrant as specified in its charter)

                                                                                                        
                         Virginia                                                                   54-1317776
              (State or other jurisdiction of                                                   (I. R. S. Employer
              incorporation or organization)                                                    Identification No.)

                      P.O. Box 4229,
               1000 Virginia Center Parkway
                    Richmond, Virginia                                                              23058-4229
         (Address of principal executive offices)                                                   (Zip Code)

   Registrant's telephone number, including area code                                             (804) 553-3600
   Securities registered pursuant to Section 12(b) of the Act:
                                                                                             Name of each exchange on
                     Title of each class                                                         which registered 
   Pittston Brink's Group Common Stock, Par Value $1                                           New York Stock Exchange
   Pittston Burlington Group Common Stock, Par Value $1                                        New York Stock Exchange
   Pittston Minerals Group Common Stock, Par Value $1                                          New York Stock Exchange
   Rights to Purchase Series A Participating Cumulative Preferred Stock                        New York Stock Exchange
   Rights to Purchase Series B Participating Cumulative Preferred Stock                        New York Stock Exchange
   Rights to Purchase Series D Participating Cumulative Preferred Stock                        New York Stock Exchange
   Securities registered pursuant to Section 12(g) of the Act:                                          None

     Indicate by check mark whether the registrant (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 and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
       
     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

     As of March 2, 1998, there were issued and outstanding 41,129,679 shares of
Pittston Brink's Group common stock, 20,259,468 shares of Pittston Burlington
Group common stock and 8,405,908 shares of Pittston Minerals Group common stock.
The aggregate market value of such stocks held by nonaffiliates, as of that
date, was $1,501,871,904, $427,345,374 and $69,906,338, respectively.
       
     Documents incorporated by reference: Portions of the Registrant's
definitive Proxy Statement to be filed pursuant to Regulation 14A(Part III).

PART I

ITEMS 1. AND 2. BUSINESS AND PROPERTIES

As used herein, the "Company" includes The Pittston Company and its direct and
indirect subsidiaries, except as otherwise indicated by the context. The Company
is a diversified firm with three separate groups-Pittston Brink's Group,
Pittston Burlington Group, and Pittston Minerals Group. Within these three
groups, the Company maintains five separately reportable industry segments -
Brink's, BHS, BAX Global, Coal Operations and Mineral Ventures. Financial
information on the Company's segments for the three fiscal periods ended
December 31, 1997, if included, is presented in Note 17 of the Notes to
Consolidated Financial Statements (see Item 8). The information set forth with
respect to "Business and Properties" is as of December 31, 1997 except where an
earlier or later date is expressly stated. Nothing herein should be considered
as implying that such information is correct as of any date other than December
31, 1997, except as so stated or indicated by the context.

Activities relating to the BAX Global segment are carried on by BAX Global Inc.
and its subsidiaries and certain affiliates and associated companies in foreign
countries (together, "BAX Global"). Activities relating to the Brink's segment
are carried on by Brink's, Incorporated and its subsidiaries and certain
affiliates and associated companies in foreign countries (together, "Brink's").
Activities relating to the BHS segment are carried on by Brink's Home Security,
Inc. ("BHS"). Activities relating to Coal Operations are carried on by the
Pittston Coal Company and its subsidiaries (together "Coal Operations").
Activities relating to Mineral Ventures are carried on by Pittston Mineral
Ventures Company and its subsidiaries (together "Mineral Ventures").

The Company has a total of approximately 33,000 employees.

PITTSTON BRINK'S GROUP

Pittston Brink's Group (the "Brink's Group") consists of the armored car, air
courier and related services of Brink's, and the home security business of BHS.

Brink's

General

The major activities of Brink's are contract-carrier armored car, automated
teller machine ("ATM"), air courier, coin wrapping, and currency and deposit
processing services. Brink's serves customers through 149 branches in the United
States and 39 branches in Canada. Service is also provided through subsidiaries,
affiliates and associated companies in 46 countries outside the United States
and Canada. These international operations contributed approximately 50% of
Brink's total reported 1997 operating profit. Brink's ownership interest in
subsidiaries and affiliated companies ranges from approximately 20% to 100%; in
some instances local laws limit the extent of Brink's interest.

Representative customers include banks, commercial establishments, industrial
facilities, investment banking and brokerage firms and government agencies.
Brink's provides its individualized services under separate contracts designed
to meet the distinct transportation and security requirements of its customers.
These contracts are usually for an initial term of one year or less, but
generally continue in effect thereafter until canceled by either party.

Brink's armored car services include transportation of money from industrial and
commercial establishments to banks for deposit, and transportation of money,
securities and other negotiable items and valuables between commercial banks,
Federal Reserve Banks and their branches and correspondents, and brokerage
firms. Brink's also transports new currency, coins and precious metals for the
United States Mint, the Federal Reserve System and the Bank of Canada. For
transporting money and other valuables over long distances, Brink's offers a
combined armored car and air courier service linking many cities in the United
States and abroad. Except for a subsidiary in Venezuela, Brink's does not own or
operate any aircraft, but uses regularly scheduled or chartered aircraft in
connection with its air courier services.

In addition to its armored car pickup and delivery services, Brink's provides
change services, coin wrapping services, currency and deposit processing
services, ATM services, safes and safe control services, check cashing and
pickup and

                                       1

delivery of valuable air cargo shipments. In certain geographic areas, Brink's
transports canceled checks between banks or between a clearing house and its
member banks. Brink's has developed and is marketing a product called CompuSafe
designed to streamline the handling and management of cash receipts for the
convenience store and gas station market. Pilot tests continue in several test
markets in the United States.

Brink's operates a worldwide specialized diamond and jewelry transportation
business and has offices in the major diamond and jewelry centers of the world,
including Antwerp, Tel Aviv, Hong Kong, New York, Bombay, Bangkok, Tokyo and
Arrezzo, Italy.

Brink's has a wholly owned subsidiary that develops highly flexible deposit
processing and vault management software systems for the financial services
industry as well as Brink's own locations. Brink's offers a total processing
package and the ability to tie together a full range of cash vault, ATM,
transportation, storage, processing, inventory management and reporting
services. Brink's believes that its processing and information capabilities
differentiate its currency and deposit processing services from its competitors
and enable Brink's to take advantage of the trend by banks, retail business
establishments and others to outsource vaulting and cash room operations.

Brink's non-North American operations which accounted for approximately 48% of
its revenues in 1997, are organized into three regions: Europe, Latin America
and Asia/Pacific. In Europe, wholly owned subsidiaries of Brink's operate in the
United Kingdom, Netherlands and, in the diamond and jewelry business, in
Belgium, Italy, Russia and the United Kingdom. Also, in January 1998, Brink's
purchased the remaining outstanding shares of its subsidiary in France. Brink's
has a 70% interest in a subsidiary in Israel and a majority interest in
subsidiaries in Greece and Switzerland. Brink's also has ownership interests
ranging from 24.5% to 50% in affiliates operating in Belgium, Germany, Ireland,
Italy, Jordan and Luxembourg. A wholly owned subsidiary operates in South
Africa. In Latin America, a wholly owned subsidiary operates in Brazil. Brink's
owns a 61% interest in a subsidiary in Venezuela, a 73% interest in a subsidiary
in Chile, a 95% interest in a subsidiary in Bolivia, a 51% ownership interest in
a subsidiary in Argentina, a 50.5% interest in a subsidiary in Colombia and a
20% interest in a Mexican company which operates one of the world's largest
security transportation services with over 1,700 armored vehicles. Brink's also
has 49% and 36% ownership interests in affiliates operating in Panama and Peru,
respectively. In the Asia/Pacific region, wholly owned subsidiaries of Brink's
operate in Australia, Taiwan and China, and majority owned subsidiaries operate
in Japan (51% owned) and Singapore (60% owned). Brink's also has minority
interests in affiliates in India, Pakistan and Thailand ranging from 40% to 49%.

Because the financial results of Brink's are reported in U.S. dollars, they are
affected by the changes in the value of the various foreign currencies in
relation to the U.S. dollar. Brink's international activity is not concentrated
in any single currency, which limits the risks of foreign currency rate
fluctuations. In addition, these rate fluctuations may adversely affect
transactions which are denominated in currencies other than the functional
currency. Brink's routinely enters into such transactions in the normal course
of its business. Although the diversity of its foreign operations limits the
risks associated with such transactions, the Company, on behalf of Brink's, from
time to time, uses foreign currency forward contracts to hedge the risk
associated with certain transactions. Brink's is also subject to other risks
customarily associated with doing business in foreign countries, including labor
and economic conditions, controls on repatriation of earnings and capital,
nationalization, political instability, expropriation and other forms of
restrictive action by local governments. The future effects of such risks on
Brink's cannot be predicted.

Competition

Brink's is the oldest and largest armored car service company in the United
States as well as a market leader in most of the countries in which it operates.
The foreign subsidiaries, affiliates and associates of Brink's compete with
numerous armored car and courier service companies in many areas of operation.
In the United States, Brink's presently competes nationally with two companies
and regionally and locally with many smaller companies. Brink's believes that
its service, high quality insurance coverage and company reputation (including
the name "Brink's") are important competitive advantages. However, the cost of
service is, in many instances, the controlling factor in obtaining and retaining
customers. While Brink's cost structure is generally competitive, certain
competitors of Brink's have lower costs primarily as a result of lower wage and
benefit levels.

See also "Government Regulation" below.

Service Mark, Patents and Copyrights

Brink's is a registered service mark of Brink's, Incorporated in the United
States and in certain foreign countries. The Brink's mark and name are of
material significance to Brink's business. Brink's owns patents with respect to
certain coin sorting and counting machines and armored truck design. Brink's
holds copyrights on certain software systems developed by Brink's. In addition,
Brink's has a newly patented product called CompuSafe'tm' which has been 
designed to streamline the handling and management of cash receipts.

Insurance

Brink's carries insurance coverage for losses. Insurance policies cover
liability for loss of various types of property entrusted to Brink's from any
cause except war and nuclear risk. The various layers of insurance are covered
by different groups of

                                       2

participating underwriters. Such insurance is obtained by Brink's at rates and
upon terms negotiated periodically with the underwriters. The loss experience of
Brink's and, to a limited extent, other armored carriers affects premium rates
charged to Brink's. The availability of quality and reliable insurance coverage
is an important factor in the ability of Brink's to obtain and retain customers.
Quality insurance is available to Brink's in major markets although the premiums
charged are subject to fluctuations depending on market conditions. Less
expensive armored car and air courier all-risk insurance is available, but these
policies typically contain unacceptable operating warranties and limited
customer protection.

Government Regulation

The operations of Brink's are subject to regulation by the United States
Department of Transportation with respect to safety of operation and equipment
and financial responsibility. Intrastate, in the United States, and
intraprovince and interprovince operations in Canada are subject to regulation
by state and by Canadian and provincial regulatory authorities, respectively.

Employee Relations

At December 31, 1997, Brink's and its subsidiaries had approximately 9,700
employees in North America, of whom approximately 3,300 are classified as
part-time employees. At December 31, 1997, Brink's had approximately 12,700
employees outside North America. In the United States, two locations (12
employees) are covered by collective bargaining agreements. At December 31,
1997, Brink's was a party to two United States and nine Canadian collective
bargaining agreements with various local unions covering approximately 1,430
employees, most of whom are employees in Canada and members of unions affiliated
with the International Brotherhood of Teamsters. Negotiations are continuing on
three agreements that expire in 1998. The remaining agreements will expire after
1998. Brink's believes that its employee relations are generally satisfactory.

Properties

Brink's owns 25 branch offices and holds under lease an additional 185 branch
offices, located in 38 states, the District of Columbia, the Commonwealth of
Puerto Rico and nine Canadian provinces. Such branches generally include office
space and garage or vehicle terminals, and serve not only the city in which they
are located but also nearby cities. Brink's corporate headquarters in Darien,
Connecticut, is held under a lease expiring in 2000, with an option to renew for
an additional five-year period. The leased branches include 104 facilities held
under long-term leases, while the remaining 81 branches are held under
short-term leases or month-to-month tenancies.

Brink's owns or leases, in the United States and Canada, approximately 2,100
armored vehicles, 300 panel trucks and 260 other vehicles which are primarily
service cars. In addition, approximately 3,000 Brink's-owned safes are located
on customers' premises. The armored vehicles are of bullet-resistant
construction and are specially designed and equipped to afford security for crew
and cargo. Brink's subsidiaries and affiliated and associated companies located
outside the United States and Canada operate approximately 5,000 armored
vehicles.

BHS

General

BHS is engaged in the business of installing, servicing and monitoring
electronic security systems primarily in owner-occupied, single-family
residences. At December 31, 1997, BHS was monitoring approximately 511,500
systems, including 105,600 new subscribers since December 31, 1996, and was
servicing 66 metropolitan areas in 40 states, the District of Columbia and
Canada. Seven of these areas were added during 1997.

BHS markets its alarm systems primarily through advertising, inbound
telemarketing and a direct sales force. BHS also markets its systems directly to
home builders and has entered into several contracts which extend through 1998.
BHS employees install and service the systems from local BHS branches.
Subcontractors are utilized in some service areas. BHS does not manufacture any
of the equipment used in its security systems; instead, it purchases such
equipment from a small number of suppliers. Equipment inventories are maintained
at each branch office.

BHS's security system consists of sensors and other devices which are installed
at a customer's premises. The equipment is designed to signal intrusion, fire
and medical alerts. When an alarm is triggered, a signal is sent by telephone
line to BHS's new central monitoring station near Dallas, Texas. The new
monitoring station has been designed and constructed to meet the specifications
of Underwriters' Laboratories, Inc. ("UL"). BHS is applying for a UL listing for
the new facility. A backup monitoring center in Carrollton, Texas, protects
against a catastrophic event at the primary monitoring center. In the event of
an emergency, such as fire, flood, major interruption in telephone service, or
any other calamity affecting the primary facility, monitoring operations can be
transferred to the backup facility.

BHS's alarm service contracts contain provisions limiting BHS's liability to its
customers. Courts have, from time to time, upheld such provisions, but there can
be no assurance that the limitations contained in BHS's agreements will be
enforced according to their terms in any or all cases. The nature of the service
provided by BHS potentially exposes it to greater risks of liability than may be
borne by other service businesses. However, BHS has not experienced any major
liability losses.

                                       3

BHS carries insurance of various types, including general liability and errors
and omissions insurance, to protect it from product deficiencies and negligent
acts of its employees. Certain of BHS's insurance policies and the laws of some
states limit or prohibit insurance coverage for punitive or certain other kinds
of damages arising from employees' misconduct.

Regulation

BHS and its personnel are subject to various Federal, state and local consumer
protection, licensing and other laws and regulations. BHS's business relies upon
the use of telephone lines to communicate signals, and telephone companies are
currently regulated by both the Federal and state governments. BHS's wholly
owned Canadian subsidiary, Brink's Home Security Canada Limited, is subject to
the laws of Canada, British Columbia and Alberta. The alarm service industry
continues to experience a high incidence of false alarms in some communities,
including communities in which BHS operates. This has caused some local
governments to impose assessments, fines and penalties on subscribers of alarm
companies (including BHS) based upon the number of false alarms reported. There
is a possibility that at some point some police departments may refuse to
respond to calls from alarm companies which would necessitate that private
response forces be used to respond to alarm signals. Since these false alarms
are generally not attributable to equipment failures, BHS does not anticipate
any significant capital expenditures will be required as a result thereof. BHS
believes its alarm service contracts will allow BHS to pass these charges on to
the appropriate customers. Regulation of installation and monitoring of fire
detection devices has also increased in several markets.

Competition

BHS competes in many of its markets with numerous small local companies,
regional companies and several large national firms. BHS believes that it is one
of the leading firms engaged in the business of installing, servicing and 
monitoring electronic security systems in the single-family home marketplace. 
Competitive pressure on installation fees increased in 1996 and 1997. 
Several significant competitors offer installation prices which match or
are less than BHS prices; however, many of the small local competitors in BHS
markets continue to charge significantly more for installation. In February
1996, a Federal telecommunications reform bill was enacted which contained
provisions specific to the alarm industry. The key provisions include a five
year waiting period prior to entry for the six (now four) regional Bell
operating companies ("RBOCs") not already providing alarm service, restrictions
on further purchases of alarm companies by one RBOC, Ameritech, which has
already become a significant competitor in the industry, a prohibition against
cross-subsidiarization by an RBOC of any alarm subsidiaries, a prohibition
against any RBOC's accessing lists of alarm company customers and an expedited
complaint process. Consequently, RBOC's could become significant competitors in
the home security business in the near future. However, BHS believes that the
quality of its service compares favorably with that provided by current
competitors and that the Brink's name and reputation will continue to provide an
important competitive advantage subsequent to the completion of the five year
waiting period.

Employees

BHS has approximately 2,100 employees, none of whom is covered by a collective
bargaining agreement. BHS believes that its employee relations are satisfactory.

Properties

BHS operates from 56 leased offices and warehouse facilities across the United
States and two leased offices in Canada. All premises protected by BHS alarm
systems are monitored from the new central monitoring station near Dallas which
is held by BHS under a lease expiring in 2003. The new facility is also occupied
by administrative, technical and marketing services personnel who support branch
operations. The lease for the backup monitoring center in Carrollton, Texas,
expires in 2002. BHS retains ownership of nearly all the approximately 511,500
systems currently being monitored. When a current customer cancels the
monitoring service and does not move, it is BHS's policy to temporarily disable
the system and not incur the cost of retrieving it (at which point any remaining
book value of the equipment is written off). Retaining ownership helps prevent
another alarm company from providing services using BHS security equipment. On
the other hand, when a current customer cancels the monitoring service because
of a move, the retention of ownership of the equipment facilitates the marketing
of the monitoring service to the new homeowner. BHS leases all the vehicles used
for installation and servicing of its security systems.

PITTSTON BURLINGTON GROUP

Pittston Burlington Group (the "Burlington Group") consists of the expedited
freight services, logistics management, freight forwarding and customs brokerage
services business of BAX Global.

BAX Global

General

BAX Global is primarily engaged in North American overnight and second day
freight, and international time definite air and sea transportation, freight
forwarding and logistics management services and international customs
brokerage. In conducting its forwarding business, BAX Global generally picks up
or receives freight shipments from its customers, consolidates the freight of
various customers into shipments for common destinations, arranges for the
transportation of the consolidated freight to such

                                       4

destinations (using either commercial carriers or, in the case of most of its
United States, Canadian and Mexican shipments, its own aircraft fleet and hub
sorting facility) and, at the destinations, distributes the consolidated
shipments and effects delivery to consignees. For international shipments, BAX
Global also frequently acts as customs broker facilitating the clearance of
goods through customs at international points of entry. BAX Global provides
transportation customers with logistics services and operates warehouse and
distribution facilities in several countries.

BAX Global specializes in highly customized global freight forwarding and
logistics services. It has concentrated on providing service to customers with
significant logistics needs, such as manufacturers of computer and electronics
equipment. BAX Global offers its customers a variety of service and pricing
alternatives for their shipments, such as overnight delivery, second-day
delivery or deferred service in North America . A variety of ancillary services,
such as shipment tracking, inventory control and management reports are also
provided. Internationally, BAX Global offers a similar variety of services
including ocean forwarding, door-to-door delivery and standard and expedited
freight services.

BAX Global provides freight service to all North American business communities
as well as most foreign countries through its network of company-operated
stations and agent locations in 122 countries. BAX Global markets its services
primarily through its direct sales force and also employs other marketing
methods, including print media advertising and direct mail campaigns. The pickup
and delivery of freight are accomplished principally by independent contractors.

BAX Global's computer system, ARGUS+, is a satellite-based, worldwide
communications system which, among other things, provides continuous worldwide
tracking and tracing of shipments and various data for management information
reports, enabling customers to improve efficiency and control costs. BAX Global
also utilizes an image processing system to centralize domestic airbill and
related document storage in BAX Global's computer for automated retrieval by any
BAX Global office.

BAX Global's freight business has tended to be seasonal, with a significantly
higher volume of shipments generally experienced during March, June and the
period August through November than during the other periods of the year. The
lowest volume of shipments has generally occurred in January and February.

During 1997, BAX Global began a BAX Process Innovation ("BPI") Program which was
comprised of an extensive review of all aspects of the company's operations.
Senior management from around the world, working with a major consulting firm,
reviewed all areas of the business including sales, operations, finance,
logistics and information technology. BPI detailed improvements in its worldwide
business through development of information systems that are intended to enhance
productivity and improve the company's competitive position.

In 1998, BAX Global initiated a commitment for BPI of approximately $50 million
over the next six to nine months. As more details of this plan are being
developed, BPI will be integrated with BAX Global's continuous improvement
program. BAX Global now anticipates spending approximately $120 million
(including the aforementioned $50 million) on information technology systems
during 1998 and 1999 which will include substantial improvements to its
information systems, annual recurring capital costs and spending for Year 2000
compliance issues. These expenditures are expected to occur equally between the
two years, with approximately one-third expected to be expensed as incurred
while the remainder will be capitalized.

Aircraft Operations

BAX Global utilizes a fleet of 30 leased or contracted and 6 owned aircraft
providing regularly scheduled service throughout the United States and certain
destinations in Canada and Mexico from its freight sorting hub in Toledo, Ohio.
In addition, two leased aircraft service customers in the Southwest to points
between Seattle and Dallas. BAX Global's fleet is also used for charters and to
serve other international markets from time to time. The fleet and hub are
primarily dedicated to providing reliable next-day service for domestic,
Canadian and Mexican air cargo customers. BAX Global owns 4 DC-8 and 2 B727-100
aircraft. At December 31, 1997, BAX Global utilized 12 DC8's (including 11
DC8-71 aircraft) under leases for terms expiring between 1998 and 2003. Twenty
additional 727 cargo aircraft were under contract at December 31, 1997, for
terms of less than two years. Based on the current state of the aircraft leasing
market, BAX Global believes that it should be able to renew these leases or
enter into new leases on terms reasonably comparable to those currently in
effect. Pittston has guaranteed BAX Global's obligations under one lease
covering one aircraft. The actual operation and routine maintenance of the
aircraft owned or held under long-term lease by BAX Global is contracted out,
normally for two- to three-year terms, to federally certificated operators which
supply the pilots and other flight services.

The nightly lift capacity in operation at December 31, 1997, was approximately
2.6 million pounds, calculated on an average freight density of 7.5 pounds per
cubic foot. BAX Global's nightly lift capacity varies depending upon the number
and type of planes operated by BAX Global at any particular time. Including
trucking capacity available to BAX Global, the aggregate daily cargo capacity at
December 31, 1997, was approximately 3.5 million pounds.

For aircraft owned or held under long-term lease, BAX Global is generally
responsible for all the costs of operating and

                                       5

maintaining the aircraft, including any special maintenance or modifications
which may be required by Federal Aviation Administration ("FAA") regulations or
orders (see "Government Regulation" below). In 1997, BAX Global had cash outlays
totaling approximately $29.7 million on routine heavy maintenance of its
aircraft fleet. BAX Global has made provision in its financial statements for
the expected costs associated with aircraft operations and maintenance which it
believes to be adequate; however, unanticipated maintenance costs or required
aircraft modifications could adversely affect BAX Global's profitability.

The average airframe age of the fleet leased by BAX Global under leases with
terms longer than two years is 30 years, although factors other than age, such
as cycles (numbers of takeoffs or landings) can have a significant impact on an
aircraft's serviceability. Generally, cargo aircraft tend to have fewer cycles
than passenger aircraft over comparable time periods because they have fewer
flights per day and longer flight segments.

In February 1998, BAX Global signed an agreement to acquire, subject to
regulatory and judicial approvals and other conditions to closing, the privately
held Air Transport International LLC ("ATI"). ATI is a U.S.-based freight and
passenger airline which operates a certificated fleet of DC-8 aircraft providing
services to BAX Global and other customers. The ATI acquisition is part of BAX
Global's strategy to improve the quality of its service offerings for its
customers by increasing its control over flight operations. As a result of this
agreement, BAX Global is suspending its efforts to start its own certificated
airline carrier operations.

Fuel costs are a significant element of the total costs of operating BAX
Global's aircraft fleet. For each one cent per gallon increase or decrease in
the price of jet fuel, BAX Global's airline operating costs may increase or
decrease approximately $80,000 per month. In order to protect against price
increases in jet fuel, from time to time BAX Global enters into hedging and
other agreements, including swap contracts, options and collars.

Fuel prices are subject to world, as well as local, market conditions. It is not
possible to predict the impact of future conditions on fuel prices and fuel
availability. Competition in the airfreight industry is such that no assurance
can be given that any future increases in fuel costs (including taxes relating
thereto) will be recoverable in whole or in part from customers.

BAX Global has a lease expiring in October 2013, with the Toledo-Lucas County
Port Authority covering its freight sorting hub and related facilities (the
"Hub") at Toledo Express Airport in Ohio. The Hub consists of various
facilities, including a technologically advanced material handling system which
is capable of sorting approximately one million pounds of freight per hour.

Customers

BAX Global's domestic and foreign customer base includes thousands of industrial
and commercial shippers, both large and small. BAX Global's customer base
includes major companies in the automotive, aerospace, computer, electronics,
fashion, consumer and other industries where rapid delivery of high-value
products is required. In 1997, no single customer accounted for more than 3% of
BAX Global's total worldwide revenues. BAX Global does not have long-term,
noncancellable contracts with any of its customers.

Competition

The air and sea freight forwarding and logistics industries have been and are
expected to remain highly competitive. The principal competitive factors in both
domestic and international markets are price, the ability to provide
consistently fast and reliable delivery of shipments and the ability to provide
ancillary services such as warehousing, distribution, shipment tracking and
sophisticated information systems and reports. There is aggressive price
competition in the domestic air freight market, particularly for the business of
high volume shippers. BAX Global competes with other integrated air freight
companies that operate their own aircraft, as well as with air freight
forwarders, express delivery services, passenger airlines and other
transportation companies. Domestically, BAX Global also competes with package
delivery services provided by ground transportation companies, including
trucking firms and surface freight forwarders, which offer specialized overnight
services within limited geographical areas. As a freight forwarder to, from and
within international markets, BAX Global also competes with government-owned or
subsidized passenger airlines and ocean shipping companies. In logistics
services, BAX Global competes with many third party logistics providers.

Government Regulation

The air transportation industry is subject to Federal regulation under the
Federal Aviation Act of 1958, as amended, and pursuant to that statute, the
Department of Transportation ("DOT") may exercise regulatory authority over BAX
Global. Although BAX Global itself is exempt from most DOT economic regulations
because it is an air freight forwarder, the operation of its aircraft is subject
directly or indirectly to FAA airworthiness, directives and other safety
regulations and its Toledo, Ohio, hub operations are directly affected by the
FAA.

Federal statutes authorize the FAA, with the assistance of the Environmental
Protection Agency ("EPA"), to establish aircraft noise standards. Under the
National Emissions Standards Act of 1967, as amended by the Clean Air Act
Amendments of 1970, and the Airport Noise and Capacity Act of 1990 (the "Noise
Act"), the administrator of the EPA is authorized to issue regulations

                                       6

setting forth standards for aircraft emissions. Although the Federal government
generally regulates aircraft noise, local airport operators may, under certain
circumstances, regulate airport operations based on aircraft noise
considerations. If airport operators were to restrict arrivals or departures
during certain nighttime hours to reduce or eliminate air traffic noise for
surrounding home areas at airports where BAX Global's activities are centered,
BAX Global would be required to serve those airports with Stage III equipment.

The Noise Act requires that aircraft not complying with Stage III noise limits
be phased out by December 31, 1999. The Secretary of Transportation may grant a
waiver if it is in the public interest and if the carrier has at least 85% of
its aircraft in compliance with Stage III noise levels by July 1, 1999, and has
a plan with firm orders for making all of its aircraft comply with such noise
levels no later than December 31, 2003. No waiver may permit the operation of
Stage II aircraft in the United States after December 31, 2003.

The Noise Act requires the FAA to promulgate regulations setting forth a
schedule for the gradual phase-out of Stage II aircraft. The FAA has adopted
rules requiring each "U.S. operator" to reduce the number of its Stage II
aircraft by 25% by the end of 1994, by 50% by the end of 1996, and by 75% by the
end of 1998.

The Noise Act imposes certain conditions and limitations on an airport's right
to impose new noise or access restrictions on Stage II and Stage III aircraft
but exempts present and certain proposed regulations from those requirements.

Fourteen of the 18 aircraft in BAX Global's fleet held under long-term leases or
owned now comply with the Stage III limits. Through 1999, BAX Global anticipates
hush-kitting two DC8-63 aircraft, as well as two B727-100 aircraft, which
currently do not comply with Stage III limits, leasing additional aircraft that
do not meet Stage III limits and hush-kitting such planes as required, or
acquiring aircraft that meet Stage III noise standards. BAX Global has acquired,
but not yet installed, one additional DC-8 Stage III hush-kit. In the event that
additional expenditures would be required or costs were to be incurred at a rate
faster than expected, BAX Global could be adversely affected. Eleven of the DC8
cargo aircraft leased by BAX Global have been reengined with CFM 56-2C1 engines
which comply with Stage III noise standards.

BAX Global is subject to various requirements and regulations in connection with
the operation of its motor vehicles, including certain safety regulations
promulgated by DOT and state agencies.

International Operations

BAX Global's international operations accounted for approximately 62% of its
revenues in 1997. Included in international operations are export shipments from
the United States.

BAX Global is continuing to develop import/export and logistics business between
shippers and consignees in countries other than the United States. BAX Global
currently serves most foreign countries, 118 of which are served by BAX Global's
network of company-operated stations and agent locations. BAX Global has agents
and sales representatives in many overseas locations, although such agents and
representatives are not subject to long-term, noncancellable contracts.

Because the financial results of BAX Global are reported in U.S. dollars, they
are affected by the changes in the value of the various foreign currencies in
relation to the U.S. dollar. BAX Global's international activity is not
concentrated in any single currency, which limits the risks of foreign currency
fluctuations. In addition, these rate fluctuations may adversely affect
transactions which are denominated in currencies other than the functional
currency. BAX Global routinely enters into such transactions in the normal
course of its business. Although the diversity of its foreign operations limits
the risks associated with such transactions, the Company, on behalf of BAX
Global, uses foreign currency forward contracts to hedge the risk associated
with such transactions. BAX Global is also subject to other risks associated
with doing business in foreign countries, including labor and economic
conditions, controls on repatriation of earnings and capital, nationalization,
political instability, expropriation and other forms of restrictive action by
local governments. The future effects of such risks, if any, on BAX Global
cannot be predicted.

Employee Relations

BAX Global and its subsidiaries have approximately 6,400 employees worldwide, of
whom about 1,700 are classified as part-time. Approximately 140 of these
employees (principally customer service, clerical and/or dock workers) in BAX
Global's stations at John F. Kennedy Airport, New York; Secaucus, New Jersey;
Minneapolis, Minnesota; and Toronto, Canada are represented by labor unions,
which in most cases are affiliated with the International Brotherhood of
Teamsters. The collective bargaining agreement at John F. Kennedy Airport has
expired and is currently being negotiated; the Toronto agreement was negotiated
in 1997 to run through March 1999. BAX Global did not experience any significant
strike or work stoppage in 1997 and considers its employee relations
satisfactory.

Substantially all of BAX Global's cartage operations are conducted by
independent contractors, and the flight crews for its aircraft are employees of
the independent airline companies which operate such aircraft.

                                       7

Properties

BAX Global operates 264 (113 domestic and 151 international) stations with BAX
Global personnel, and has agency agreements at an additional 234 (45 domestic
and 189 international) stations. These stations are located near primary
shipping areas, generally at or near airports. BAX Global-operated domestic
stations, which generally include office space and warehousing facilities, are
located in 46 states and Puerto Rico. BAX Global-operated international
facilities are located in 27 countries. Most stations serve not only the city in
which they are located, but also nearby cities and towns. Nearly all BAX
Global-operated stations are held under lease. The Hub in Toledo, Ohio, is held
under a lease expiring in 2013, with rights of renewal for three five-year
periods. Other facilities, including the corporate headquarters in Irvine,
California, are held under leases having terms of one to ten years.

BAX Global owns or leases, in the United States and Canada, a fleet of
approximately 34 automobiles as well as 162 vans and trucks utilized in station
work or for hauling freight between airport facilities and BAX Global's
stations.

PITTSTON MINERALS GROUP

Pittston Minerals Group (the "Minerals Group") is primarily engaged in the
mining, preparation and marketing of coal, the purchase of coal for resale and
the sale or leasing of coal lands to others through its Coal Operations. The
Minerals Group also explores for and acquires mineral assets other than coal
through its Mineral Ventures operations. Revenues from such activities currently
represent approximately 3% of Minerals Group revenues.

Coal Operations

General

Coal Operations produces coal from approximately 20 company-operated surface and
deep mines located in Virginia, West Virginia and eastern Kentucky for
consumption in the steam and metallurgical markets. Steam coal is sold primarily
to utilities and industrial customers located in the eastern United States.
Metallurgical coal is sold to steel and coke producers primarily located in
Japan, Korea, the United States, Europe, the Mediterranean basin and Brazil.
Coal Operations' strategy is to continue to develop its business as a low-cost
producer of low sulphur steam coal and high-quality metallurgical coal markets.

Coal Operations has substantial reserves of low sulphur coal, much of which can
be produced from lower cost surface mines. Moreover, it has a significant share
of the medium volatile metallurgical coal reserves in the United States, along
with other high quality feed stock seams in demand by the coke and steel-making
industry.

Steam coal is sold primarily to domestic utility customers through long-term
contracts (contracts in excess of one year) which have the effect of moderating
the impact of short-term market conditions, thereby reducing one element of risk
in new or expanded projects. Most of the steam coal consumed in the United
States is used to generate electricity. Coal fuels approximately 500 of the
nation's 3,000 electric power plants, with larger facilities consuming more than
10,000 tons of coal daily. Through September 1997, coal accounted for
approximately 56% of the electricity generated by the electric utility industry.
Coal Operations believes that it is well-positioned to take advantage of any
increased demand for low sulphur steam coal. Such increased demand could result
from factors such as regulatory requirements mandating lower emissions of
sulphur dioxide and utility deregulation which should favor coal as the lowest
cost energy source for power plants. In addition, the ongoing reduction in
governmental subsidies for coal production in Europe may provide opportunities
for Coal Operations to utilize its export infrastructure to penetrate the export
thermal coal market as well.

In contrast, the market for metallurgical coal, for most of the past fifteen
years, has been characterized by a weakening demand from primary steel
producers, a move to non-metallurgical coal and/or weak metallurgical coal in
coke and steel making, and intense competition from foreign coal producers,
especially those in Australia and Canada who benefited over this period from a
declining currency value versus the U.S. dollar (coal sales contracts are
denominated in U.S. dollars). The years 1995 and 1996 benefited from some relief
from declining currencies while 1997 suffered from a sharp weakening of the
Australian dollar. Metallurgical coal sales contracts typically are subject to
annual price renegotiation, which increases the exposure to market forces.

Production

The following table indicates the approximate tonnage of coal purchased and
produced by the Coal Operations for the years ended 1997, 1996 and 1995:

                                                         Years Ended December 31
(In thousands of tons)                                  1997      1996      1995
================================================================================
                                                                 
Produced:
Deep                                                   4,975     3,930     3,982
Surface                                               10,238    11,151    12,934
Contract                                               1,433     1,621     1,941
- --------------------------------------------------------------------------------
                                                      16,646    16,702    18,857
Purchased                                              4,075     5,762     6,047
- --------------------------------------------------------------------------------
Total                                                 20,721    22,464    24,904
================================================================================

Sales

The following table indicates the approximate tonnage of coal sold by Coal
Operations in the years ended December 31, 1997,

                                       8

1996 and 1995 in the domestic (United States and Canada) and export markets and
by categories of customers:

(In thousands,                                           Years Ended December 31
except per ton amounts)                                 1997      1996      1995
================================================================================
                                                                 
Domestic:
     Steel and coke producers                            792       139       736
     Utility, industrial and other                    12,912    14,794    15,846
- --------------------------------------------------------------------------------
                                                      13,704    14,933    16,582
Export:
     Utility, industrial and other                        --       217       102
     Steel and coke producers                          6,764     7,821     7,712
- --------------------------------------------------------------------------------
Total sold                                            20,468    22,971    24,396
================================================================================
Average selling price per ton                       $  29.52     29.17     28.81
================================================================================

For the year ended December 31, 1997, Coal Operations sold approximately 20.5
million tons of coal, of which approximately 13.5 million tons were sold under
long-term contracts. In 1996, Coal Operations sold approximately 23.0 million
tons of coal, of which approximately 14.9 million tons were sold under long-term
contracts.

The following table provides year by year estimates of the tons of coal
committed for sale under long-term contracts:

                                                 Thousands
          Year                                    of tons
- ----------------------------------------------------------
                                                 
          1998                                    11,532
          1999                                     9,200
          2000                                     7,561
          2001                                     5,881
          2002                                     4,668
          2003                                     2,826
          2004                                     2,438
          2005                                     2,363
          2006                                     1,493
          2007                                       474
- ----------------------------------------------------------
Total                                             48,436
==========================================================

Contracts relating to a certain portion of this tonnage are subject to periodic
price renegotiation, which can result in termination by the purchaser or the
seller prior to contract expiration in case the parties should fail to agree
upon price.

During 1997, the ten largest domestic customers purchased 11.2 million tons of
coal (55% of total coal sales and 82% of domestic coal sales, by tonnage). The
three largest domestic customers purchased 8.0 million tons of coal for the year
ended December 31, 1997 (39% of total coal sales and 59% of domestic coal sales,
by tonnage). The largest single customer, American Electric Power Company,
purchased 5.6 million tons of coal, accounting for 27% of total coal sales and
41% of domestic coal sales, by tonnage. In 1996, the ten largest domestic
customers purchased 12.0 million tons of coal (52% of total coal sales and 81%
of domestic coal sales, by tonnage). The three largest domestic customers
purchased 7.6 million tons of coal in 1996 (33% of total coal sales and 51% of
domestic coal sales, by tonnage). In 1996, American Electric Power Company
purchased 5.0 million tons of coal, accounting for 22% of total coal sales and
34% of domestic coal sales, by tonnage.

Of the 6.8 million tons of coal sold in the export market in 1997, the ten
largest customers accounted for 3.7 million tons (18% of total coal sales and
54% of export coal sales, by tonnage) and the three largest customers purchased
1.7 million tons (8% of total coal sales and 24% of export coal sales, by
tonnage). Of the 8.0 million tons of coal sold in the export market in 1996, the
ten largest customers accounted for 4.6 million tons (20% of total coal sales
and 57% of export coal sales, by tonnage) and the three largest customers
purchased 2.1 million tons (9% of total coal sales and 26% of export coal sales,
by tonnage). Export coal sales are made principally under annual contracts or
long-term contracts that are subject to annual price renegotiation. Under these
export contracts, the price for coal is expressed and paid in United States
dollars.

Virtually all coal sales in the domestic utility market pursuant to long-term
contracts are subject to periodic price adjustments on the basis of provisions
which permit an increase or decrease periodically in the price to reflect
increases and decreases in certain price indices. In certain cases, price
adjustments are permitted when there are changes in taxes other than income
taxes, when the coal is sold other than FOB the mine and when there are changes
in railroad and barge freight rates. The provisions, however, are not identical
in all of such contracts, and the selling price of the coal does not necessarily
reflect every change in production cost incurred by the seller.

Metallurgical contracts are generally of one-year duration. The longest-term
metallurgical contract is valid through May 31, 2001. Contracts for the sale of
metallurgical coal in the domestic and export markets are generally subject to
price renegotiations on an annual basis. Coal Operations' sales of metallurgical
coal are diversified geographically on a worldwide basis. Approximately 0.8
million tons, or 11% of metallurgical sales were domestic; 4.2 million tons, or
56%, were to the Europe/Mediterranean basin; 1.4 million tons, or 19%, were to
the Far East and 1.1 million tons, or 15%, were to Latin America. Negotiations
with Far East customers have concluded for 1998 with price reductions of
approximately 5% due in part to the strong U.S. dollar and the economic turmoil
in Asia. Fortunately, Coal Operations' sales are less exposed to this market
relative to past years and other markets are not expected to incur reductions of
the same magnitude.

Competition

The bituminous coal industry is highly competitive. Coal Operations competes
with many other large coal producers and

                                       9

with hundreds of small producers in the United States and abroad.

In the export market, many foreign competitors, particularly Australian, South
African and Canadian coal producers, benefit from certain competitive advantages
existing in the countries in which they operate, such as less difficult mining
conditions, lower transportation costs, less severe government regulation and
lower labor and health benefit costs, as well as currencies which have generally
depreciated against the United States dollar, particularly in the case of the
Australian dollar. The metallurgical coal produced by Coal Operations is
generally of higher quality, and is often used by foreign steel producers to
blend with coals from other sources to improve the quality of coke and coke oven
efficiency. However, in recent years, steel producers have developed facilities
and techniques which, to some extent, enable them to accept lower quality
metallurgical coal in their coke ovens. Moreover, new technologies for steel
production which utilize pulverized coal injection, direct reduction iron and
the electric arc furnace have reduced the demand for all types of metallurgical
coal. However, the use of lesser quality coals and less coke in the blast
furnace has increased the importance of coke strength and the importance of
medium volatile coal.

Coal Operations competes domestically on the basis of the high quality of its
coal, which is not only valuable in the making of steel but, because of low
sulphur and high heat content, is also an attractive source of fuel to the
electric utility and other coal burning industries.

Other factors which affect competition include the price, availability and
public acceptance of alternative energy sources (in particular, oil, natural
gas, hydroelectric power and nuclear power), as well as the impact of federal
energy policies. Coal Operations is not able to predict the effect, if any, on
its business (especially with respect to sales to domestic utilities) of
particular price levels for such alternative energy sources, especially oil and
natural gas. However, any sustained and marked decline in such prices could have
a material adverse effect on such business.

Environmental Matters

The Surface Mining Control and Reclamation Act of 1977 and the regulations
promulgated thereunder ("SMCRA") by the Federal Office of Surface Mining
Reclamation and Enforcement ("OSM"), and the enforcement thereof by the U.S.
Department of the Interior, establish mining and reclamation standards for all
aspects of surface mining as well as many aspects of deep mining. SMCRA also
imposes a tax of $0.35 on each ton of surface-mined coal and $0.15 on each ton
of deep-mined coal. OSM and its state counterparts monitor compliance with SMCRA
and its regulations by the routine issuance of "notices of violation" which
direct the mine operator to correct the cited conditions within a stated period
of time. Coal Operations' policy is to correct the conditions that are the
subject of these notices or to contest those believed to be without merit in
appropriate proceedings.

As previously reported, Coal Operations has reached a broad settlement with the
OSM involving SMCRA liabilities of former contractors. Coal Operations has also
entered into a number of similar agreements with the states. Under these
agreements, Coal Operations agreed to perform certain reclamation and to pay
certain fees of former contractors. In return, the agencies agreed not to deny
or "block" permits to Coal Operations on account of the contractor liabilities
being settled. Coal Operations is in the process of successfully completing all
required work under these agreements.

Coal Operations is subject to various federal environmental laws, including the
Clean Water Act, the Clean Air Act and the Safe Drinking Water Act, as well as
state laws of similar scope in Virginia, West Virginia, Kentucky and Ohio. These
laws require approval of many aspects of coal mining operations, and both
federal and state inspectors regularly visit Coal Operations' mines and other
facilities to assure compliance.

While it is not possible to quantify the costs of compliance with all applicable
federal and state laws, those costs have been and are expected to continue to be
significant. In that connection, it is estimated that Coal Operations made
capital expenditures for environmental control facilities in the amount of
approximately $1.5 million in 1997 and estimates expenditures of $2.0 million in
1998. Compliance with these laws has substantially increased the cost of coal
mining, but is, in general, a cost common to all domestic coal producers. The
Company believes that the competitive position of Coal Operations has not been
and should not be adversely affected except in the export market where Coal
Operations competes with various foreign producers not subject to regulations
prevalent in the U.S.

Federal, state and local authorities strictly monitor the sulphur dioxide and
particulate emissions from electric power plants served by Coal Operations. In
1990, Congress enacted the Clean Air Act Amendments of 1990, which, among other
things, permit utilities to use low sulphur coals in lieu of constructing
expensive sulphur dioxide removal systems. The Company believes this should have
a favorable impact on the marketability of Coal Operations' extensive reserves
of low sulphur coals. However, the Company cannot predict at this time the
timing or extent of such favorable impact.

Mine Health and Safety Laws

The coal operating companies included within Coal Operations are generally
liable under federal laws requiring payment of benefits to coal miners with
pneumoconiosis ("black lung"). The Black Lung Benefits Revenue Act of 1977 and
the Black Lung Benefits Reform Act of 1977 (the "1977 Act"), as amended by the

                                       10

Black Lung Benefits and Revenue Amendments Act of 1981 (the "1981 Act"),
expanded the benefits for black lung disease and levied a tax on coal production
of $1.10 per ton for deep-mined coal and $0.55 per ton for surface-mined coal,
but not to exceed 4.4% of the sales price. In addition, the 1981 Act provides
that certain claims for which coal operators had previously been responsible
will be obligations of the government trust funded by the tax. The 1981 Act also
tightened standards set by the 1977 Act for establishing and maintaining
eligibility for benefits. The Revenue Act of 1987 extended the termination date
of the tax from January 1, 1996 to the earlier of January 1, 2014 or the date on
which the government trust becomes solvent. The Company cannot predict whether
any future legislation effecting changes in the tax will be enacted.

Stringent safety and health standards have been imposed by federal legislation
since 1969 when the Federal Coal Mine Health and Safety Act was adopted, which
resulted in increased operating costs and reduced productivity. The Federal Mine
Safety and Health Act of 1977 significantly expanded the enforcement of health
and safety standards.

Compliance with health and safety laws is, in general, a cost common to all
domestic coal producers. The Company believes that the competitive position of
Coal Operations has not been and should not be adversely affected except in the
export market where Coal Operations competes with various foreign producers
subject to less stringent health and safety regulations.

Employee Relations

At December 31, 1997, approximately 652 of the 2,055 employees of Coal
Operations were members of the UMWA. The remainder of such employees are either
unrepresented hourly employees or supervisory personnel. Since 1990, no
significant labor disruptions involving UMWA-represented employees have
occurred. Coal Operations believes that its employee relations are satisfactory.

Health Benefit Act

In October 1992, the Coal Industry Retiree Health Benefit Act of 1992 (the
"Health Benefit Act") was enacted as part of the Energy Policy Act of 1992. The
Health Benefit Act established rules for the payment of future health care
benefits for thousands of retired union mine workers and their dependents. The
Health Benefit Act established a trust fund to which "signatory operators" and
"related persons," including the Company and certain of its subsidiaries
(collectively, the "Pittston Companies"), are jointly and severally liable to
pay annual premiums for assigned beneficiaries, together with a pro rata share
for certain beneficiaries who never worked for such employers, including, in the
Company's case, the Pittston Companies ("unassigned beneficiaries"), in amounts
determined on the basis set forth in the Health Benefit Act. In October 1993,
the Pittston Companies received notices from the Social Security Administration
(the "SSA") with regard to their assigned beneficiaries for which they are
responsible under the Health Benefit Act. For 1997 and 1996, these amounts were
approximately $9.3 million and $10.4 million, respectively. The Company believes
that the annual cash funding under the Health Benefit Act for the Pittston
Companies' assigned beneficiaries will continue at approximately a $9 million
per year range for the next several years and should begin to decline thereafter
as the number of such assigned beneficiaries decreases.

Based on the number of beneficiaries actually assigned by the SSA, the Company
estimates the aggregate pretax liability relating to the Pittston Companies'
assigned beneficiaries at December 31, 1997 at approximately $200 million, which
when discounted at 7.5% provides a present value estimate of approximately $90
million.

The ultimate obligation that will be incurred by the Company could be
significantly affected by, among other things, increased medical costs,
decreased number of beneficiaries, governmental funding arrangements, and such
federal health benefit legislation of general application as may be enacted. In
addition, the Health Benefit Act requires the Pittston Companies to fund, pro
rata according to the total number of assigned beneficiaries, a portion of the
health benefits for unassigned beneficiaries. At this time, the funding for such
health benefits is being provided from another source and for this and other
reasons the Pittston Companies' ultimate obligation for the unassigned
beneficiaries cannot be determined. The Company accounts for the obligation
under the Health Benefit Act as a participant in a multi-employer plan and
recognizes the annual cost on a pay-as-you-go basis.

Evergreen Case

In 1988, the trustees of the 1950 Benefit Trust Funds and the 1974 Pension
Benefit Trust Fund (the "Trust Funds") established under collective bargaining
agreements with the UMWA brought an action (the "Evergreen Case") against the
Company and a number of its coal subsidiaries claiming that the defendants are
obligated to contribute to such Trust Funds in accordance with the provisions of
the 1988 and subsequent National Bituminous Coal Wage Agreements, to which
neither the Company nor any of its subsidiaries is a signatory. In 1993, the
Company and the Minerals Group recognized in their financial statements the
potential liability that might have resulted from an ultimate adverse judgment
in the Evergreen Case.

In late March 1996, a settlement was reached in the Evergreen Case. Under the
terms of the settlement, the coal subsidiaries which had been signatories to
earlier National Bituminous Coal Wage Agreements agreed to make various lump sum
payments in full satisfaction of all amounts allegedly due to the Trust Funds
through January 31, 1996, to be paid over time as follows: approximately $25.8
million upon dismissal of the Evergreen Case and the remainder of $24.0 million
in installments of $7.0

                                       11

million in 1996 and $8.5 million in each of 1997 and 1998. The first payment was
entirely funded through an escrow account previously established by the Company.
The second and third payments were paid according to schedule and were funded by
cash flows from operating activities. In addition, the coal subsidiaries agreed
to future participation in the UMWA 1974 Pension Plan.

As a result of the settlement of the Evergreen Case, at an amount lower than
previously accrued, the Company and the Minerals Group recorded a pretax benefit
of $35.7 million ($23.2 million after tax) in the first quarter of 1996 in their
financial statements.

Properties

The principal properties of Coal Operations are coal reserves, coal mines and
coal preparation plants, all of which are located in Virginia, West Virginia and
eastern Kentucky. Such reserves are either owned or leased. Leases of land or
coal mining rights generally are either for a long-term period or until
exhaustion of the reserves, and require the payment of a royalty based generally
on the sales price and/or tonnage of coal mined from a particular property. Many
leases or rights provide for payment of minimum royalties. In addition, Coal
Operations has interests in the timber and oil and gas businesses.

Pittston estimates that Coal Operations' proven and probable surface mining,
deep mining and total coal reserves as of December 31, 1997 were 136 million,
384 million and 520 million tons, respectively. Such estimates represent
economically recoverable and minable tonnage and include allowances for
extraction and processing.

The increase in deep mining and total reserves over 1996 levels is primarily
attributable to a reclassification of reserves to the proven and probable
category following recent additional exploration, reserve and mine feasability
studies.

Of the 520 million tons of proved and probable coal reserves as of year-end
1997, approximately 60% has a sulphur content of less than 1% (which is
generally regarded in the industry as low sulphur coal) and approximately 40%
has a sulphur content greater than 1%. Approximately 34% of total proven and
probable reserves consist of metallurgical grade coal.

As of December 31, 1997, Coal operations controlled approximately 608 million
tons of additional coal deposits in the eastern United States, which cannot be
expected to be economically recovered without market improvement and/or the
application of new technologies. Coal Operations also owns substantial
quantities of low sulphur coal deposits in Sheridan County, Wyoming.

Most of the oil and gas rights associated with Coal Operations' properties are
managed by an indirect wholly owned subsidiary of Pittston which, in general,
receives royalty and other income from oil and gas development and operation by
third parties. Annual net working and royalty interests exceed 3.0 Bcf. Coal
Operations also receives incidental income from the sale of timber cutting
rights on certain properties as well as from the operation of a sawmill. Coal
Operations controls approximately 100 thousand acres of hardwood forests.

Coal Operations owns a 32.5% interest in Dominion Terminal Associates ("DTA"),
which leases and operates a ground storage-to-vessel coal transloading facility
in Newport News, Virginia. DTA has a throughput capacity of 22.0 million tons of
coal per year and ground storage capacity of 2.0 million tons. A portion of Coal
Operations' share of the throughput and ground storage capacity of the DTA
facility is subject to user rights of third parties which pay Coal Operations a
fee. The DTA facility serves export customers, as well as domestic coal users
located on the eastern seaboard of the United States. For information relating
to the financing arrangements for DTA, see Note 13 to Minerals Group Financial
Statements included in Part II hereof.

Mineral Ventures

Mineral Ventures' business is directed at locating and acquiring mineral assets,
advanced stage projects and operating mines. Mineral Ventures continues to
evaluate gold projects in North America and Australia. An exploration office
operates from Reno, Nevada to coordinate Mineral Ventures' expanded exploration
program in the Western United States. In 1997, Mineral Ventures expended
approximately $4.1 million on all such programs.

The Stawell gold mine, located in the Australian state of Victoria, in which
Mineral Ventures has a net equity interest of 67%, produced approximately 84,600
ounces of gold in 1997. Mineral Ventures estimates that on December 31, 1997,
the Stawell gold mine had approximately 438,000 ounces of proven and probable
gold reserves. In-mine and surface exploration at Stawell continue to generate
positive results.

Production from the Silver Swan base metals property in Western Australia, in
which Mineral Ventures has a 17% indirect interest, commenced mid-year 1997 as
planned. As of December 31, 1997, proven and probable reserves in the primary
deposit are estimated at 626,000 metric tons of ore grading 9.3% nickel, with
minor cobalt, copper and arsenic values and are anticipated to increase as the
primary ore zone remains open at depth. In addition, a satellite deposit known
as Cygnet Disseminated, is estimated to contain a probable reserve of 1,052,000
metric tons of ore grading 2.2% nickel.

                                       12

MATTERS RELATING TO FORMER OPERATIONS

In April 1990, the Company entered into a settlement agreement to resolve
certain environmental claims against the Company arising from hydrocarbon
contamination at a petroleum terminal facility ("Tankport") in Jersey City, New
Jersey, which operations were sold in 1983. Under the settlement agreement, the
Company is obligated to pay for 80% of the remediation costs.

Based on data available to the Company and its environmental consultants, the
Company estimates its portion of the cleanup costs, on an undiscounted basis,
using existing technologies to be between $6.6 million and $11.9 million over a
period of up to five years. Management is unable to determine that any amount
within that range is a better estimate due to a variety of uncertainties, which
include the extent of the contamination at the site, the permitted technologies
for remediation and the regulatory standards by which the clean-up will be
conducted. The clean-up estimates have been modified from prior years' in light
of cost inflation and certain assumptions the Company is making with respect to
the end use of the property. The estimate of costs and the timing of payments
could change as a result of changes to the remediation plan required, changes in
the technology available to treat the site, unforseen circumstances existing at
the site and additional cost inflation.

The Company commenced insurance coverage litigation in 1990, in the United
States District Court for the District of New Jersey, seeking a declaratory
judgment that all amounts payable by the Company pursuant to the Tankport
obligation were reimbursable under comprehensive general liability and pollution
liability policies maintained by the Company. In August 1995, the District Court
ruled on various Motions for Summary Judgment. In its decision, the Court found
favorably for the Company on several matters relating to the comprehensive
general liability policies but concluded that the pollution liability policies
did not contain pollution coverage for the types of claims associated with the
Tankport site. On appeal, the Third Circuit reversed the District Court and held
that the insurers could not deny coverage for the reasons stated by the District
Court, and the case was remanded to the District Court for trial. In the event
the parties are unable to settle the dispute, the case is scheduled to be tried
beginning September, 1998. Management and its outside legal counsel continue to
believe, however, that recovery of a substantial portion of the cleanup costs
ultimately will be probable of realization. Accordingly, based on estimates of
potential liability, probable realization of insurance recoveries, related
developments of New Jersey law and on the Third Circuit's decision, it is the
Company's belief that the ultimate amount that it would be liable for is
immaterial.

ITEM 3. LEGAL PROCEEDINGS
- --------------------------------------------------------------------------------

Not applicable.

ITEM 4. SUBMISSION OF MATTER TO A VOTE OF SECURITY HOLDERS
- --------------------------------------------------------------------------------

Not applicable.

                                       13

The Pittston Company and Subsidiaries
EXECUTIVE OFFICERS OF THE REGISTRANT

The following is a list as of March 15, 1998, of the names and ages of the
executive and other officers of Pittston and the names and ages of certain
officers of its subsidiaries, indicating the principal positions and offices
held by each. There is no family relationship between any of the officers named.

Name                   Age   Positions and Offices Held                                          Held Since
- -----------------------------------------------------------------------------------------------------------
                                                                                           
Executive Officers:
Michael T. Dan         48    President, Chief Executive Officer and Director                         1998
James B. Hartough      50    Vice President--Corporate Finance and Treasurer                         1988
Frank T. Lennon        56    Vice President--Human Resources and Administration                      1985
Austin F. Reed         46    Vice President, General Counsel and Secretary                           1994
Gary R. Rogliano       46    Senior Vice President and Chief Financial Officer                       1997

Other Officers:
Amanda N. Aghdami      29    Controller                                                              1997
Jonathan M. Sturman    55    Vice President--Corporate Development                                   1995
Arthur E. Wheatley     55    Vice President and Director of Risk Management                          1988

Subsidiary Officers:
Michael T. Dan         48    President and Chief Executive Officer of Brink's, Incorporated          1993
                             President and Chief Executive Officer of Brink's Holding Company        1995
                             Chairman of BAX Global Inc.                                             1998
Karl K. Kindig         46    President and Chief Executive Officer of Pittston Coal Company          1995
Peter A. Michel        55    President and Chief Executive Officer of Brink's Home Security, Inc.    1988
============================================================================================================

Executive and other officers of Pittston are elected annually and serve at the
pleasure of its Board of Directors.

Mr. Dan was elected President, Chief Executive Officer and Director of The
Pittston Company on February 6, 1998. He also serves as the President and Chief
Executive Officer of Brink's, Incorporated, a position he has held since July
1993 and as President and Chief Executive Officer of Brink's Holding Company, a
position he has held since December 31, 1995. He also serves as Chairman of BAX
Global Inc., a position he has held since February 1998. From August 1992 to
July 1993 he served as President of North American operations of Brink's,
Incorporated and as Executive Vice President of Brink's, Incorporated from 1985
to 1992.

Mr. Rogliano was elected to his present position on September 12, 1997. On March
8, 1996 he was elected as Senior Vice President. From 1991 to March 1996, he
served as Vice President-Controllership and Taxes and from 1986 to 1991, he
served as Vice President and Director of Taxes of Pittston.

Mr. Reed has served as Vice President and Secretary since September 1993 and was
elected General Counsel in March 1994. Since 1989 he has served as General
Counsel to BAX Global Inc. and from June 1989 through April 1995 he served as
General Counsel to Brink's, Incorporated.

Messrs. Hartough, Lennon and Wheatley have served in their present positions
for more than the past five years.

Mr. Sturman was elected to his present position on February 3, 1995, having
served from December 1993 as Assistant to the Chairman of Pittston. Mr. Sturman
was Chief Financial Officer of Brink's, Incorporated, from August 1992 to
December 1993, Vice President, Operations Review of Pittston from October 1991
to August 1992 and Vice President and Controller of Pittston from 1986 through
October 1991.

Ms. Aghdami was elected to her current position on November 7, 1997. She
joined The Pittston Company in September 1996 as Manager of Financial
Reporting. Prior to September 1996, she was an Audit Manager with Ernst &
Young LLP.

Mr. Kindig was elected President and Chief Executive Officer of Pittston Coal
Company on January 1, 1995. He served as Vice President Corporate Development of
Pittston from October 1991 to January 15, 1995. From 1990 to 1991 he served as
Vice President and General Counsel of Pittston Coal Management Company, and from
1986 to 1990 he served as Counsel to Coal Operations.

Mr. Michel was elected President and Chief Executive Officer of Brink's Home
Security, Inc. in April 1988. From 1985 to 1987, he served as President and
Chief Executive Officer of Penn Central Technical Security Company.

                                       14

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS
- --------------------------------------------------------------------------------

The Pittston Company and Subsidiaries
COMMON STOCK

================================================================================

                               Market Price            Declared
                            High           Low          Dividends
- --------------------------------------------------------------------------------
                                             
1996
Pittston Brink's Group
1st Quarter (a)           $ 28.13         22.38         $ .025
2nd Quarter                 30.50         25.88           .025
3rd Quarter                 32.00         27.63           .025
4th Quarter                 32.75         23.13           .025

Pittston Burlington Group
1st Quarter (b)           $ 21.00         17.00         $  .06
2nd Quarter                 21.63         18.00            .06
3rd Quarter                 21.50         17.50            .06
4th Quarter                 20.50         17.88            .06

Pittston Minerals Group
1st Quarter               $ 15.88         12.88         $.1625
2nd Quarter                 15.75         12.38          .1625
3rd Quarter                 15.00         11.13          .1625
4th Quarter                 15.50         11.25          .1625
- --------------------------------------------------------------------------------

1997
Pittston Brink's Group
1st Quarter               $ 29.75         25.25         $ .025
2nd Quarter                 32.88         25.38           .025
3rd Quarter                 41.94         29.63           .025
4th Quarter                 42.13         33.44           .025

Pittston Burlington Group
1st Quarter               $ 21.13         18.50         $  .06
2nd Quarter                 29.00         20.50            .06
3rd Quarter                 30.81         23.25            .06
4th Quarter                 31.00         24.31            .06

Pittston Minerals Group
1st Quarter               $ 16.88         12.88         $.1625
2nd Quarter                 14.63         11.00          .1625
3rd Quarter                 12.25         10.06          .1625
4th Quarter                 11.38          6.63          .1625
================================================================================

(a) First quarter market high and low prices for the Pittston Brink's Group
represent prices commencing on the first business day following the Brink's
Stock Proposal Transaction, as described in the Company's Proxy Statement dated
December 15, 1995, resulting in the modification, effective January 19, 1996, of
the capital structure of the Company to include an additional class of common
stock (Brink's Stock Proposal) through March 31, 1996.

(b) First quarter market high and low prices for the Pittston Burlington Group
represent prices commencing on the first date of when issued trading of
Burlington Stock in conjunction with the Brink's Stock Proposal Transaction
(January 3, 1996) through March 31, 1996.

During 1996 and 1997, Pittston Brink's Group Common Stock ("Brink's Stock"),
Pittston Burlington Group Common Stock ("Burlington Stock") and Pittston
Minerals Group Common Stock ("Minerals Stock") traded on the New York Stock
Exchange under the ticker symbols "PZB", "PZX" and "PZM", respectively.

As of March 2, 1998, there were approximately 5,000 shareholders of record of
Brink's Stock, approximately 4,500 shareholders of record of Burlington Stock
and approximately 4,050 shareholders of record of Minerals Stock.

                                       15

ITEM 6. SELECTED FINANCIAL DATA
- --------------------------------------------------------------------------------

The Pittston Company and Subsidiaries
SELECTED FINANCIAL DATA

Five Years in Review
(In thousands, except per share amounts)                     1997       1996         1995         1994         1993
===================================================================================================================
                                                                                                 
Sales and Income:
Net sales and operating revenues                      $ 3,394,398  3,091,195    2,914,441    2,667,275    2,256,121
Net income (a)                                            110,198    104,154       97,972       26,897       14,146
- -------------------------------------------------------------------------------------------------------------------
Financial Position:
Net property, plant and equipment                     $   647,642    540,851      486,168      445,834      369,821
Total assets                                            1,995,944    832,603    1,807,372    1,737,778    1,361,501
Long-term debt, less current maturities                   191,812    158,837      133,283      138,071       58,388
Shareholders' equity                                      685,618    606,707      521,979      447,815      353,512
- -------------------------------------------------------------------------------------------------------------------
Average Common Shares Outstanding (b), (c):
Pittston Brink's Group basic                               38,273     38,200       37,931       37,784       36,907
Pittston Brink's Group diluted                             38,791     38,682       38,367       38,192       37,115
Pittston Burlington Group basic                            19,448     19,223       18,966       18,892       18,454
Pittston Burlington Group diluted                          19,993     19,681       19,596       19,436       18,763
Pittston Minerals Group basic                               8,076      7,897        7,786        7,594        7,381
Pittston Minerals Group diluted                             8,102      9,884       10,001        7,594        7,381
- -------------------------------------------------------------------------------------------------------------------
Common Shares Outstanding (b):
Pittston Brink's Group                                     41,130     41,296       41,574       41,595       41,429
Pittston Burlington Group                                  20,378     20,711       20,787       20,798       20,715
Pittston Minerals Group                                     8,406      8,406        8,406        8,390        8,281
- -------------------------------------------------------------------------------------------------------------------
Per Pittston Brink's Group Common Share (b), (c):
Basic net income (a)                                  $      1.92       1.56         1.35         1.10          .86
Diluted net income (a)                                       1.90       1.54         1.33         1.09          .85
Cash dividends                                                .10        .10          .09          .09          .09
Book value (e)                                               9.91       8.21         6.81         5.70         4.66
- -------------------------------------------------------------------------------------------------------------------
Per Pittston Burlington Group Common Share (b), (c):
Basic net income                                      $      1.66       1.76         1.73         2.03          .84
Diluted net income                                           1.62       1.72         1.68         1.97          .82
Cash dividends                                                .24        .24          .22          .22          .21
Book value (e)                                              16.59      15.70        14.30        12.74        10.81
- -------------------------------------------------------------------------------------------------------------------
Per Pittston Minerals Group Common Share (b), (c):
Basic net income (loss) (d)                           $      0.09       1.14         1.45        (7.50)       (4.47)
Diluted net income (loss) (d)                                0.09       1.08         1.40        (7.50)       (4.47)
Cash dividends                                                .65        .65          .65          .65        .6204
Book value (e)                                              (8.94)     (8.38)       (9.46)      (10.74)       (3.31)
====================================================================================================================

(a) As of January 1, 1992, Brink's Home Security, Inc. ("BHS") elected to
capitalize categories of costs not previously capitalized for home security
installations to more accurately reflect subscriber installation costs. The
effect of this change in accounting principle was to increase income before
cumulative effect of accounting changes and net income of the Company and the
Brink's Group by $3,213, or $.08 per basic and diluted share of Brink's Stock in
1997, $2,723 in 1996, $2,720 in 1995, $2,486 in 1994 and $2,435 in 1993. The net
income per basic and diluted share impact for 1993 through 1996 was $.07.

(b) All share and per share data presented reflects the completion of the
Brink's Stock Proposal which occurred on January 18, 1996. For periods prior to
the completion of the Brink's Stock Proposal, the number of shares of Pittston
Brink's Group Common Stock ("Brink's Stock") are assumed to be the same as the
total number of shares of The Pittston Company's (the "Company") previous
Pittston Services Group Common Stock ("Services Stock") and the number of shares
of Pittston Burlington Group Common Stock ("Burlington Stock") are assumed to
equal one-half of the number of shares of the Company's previous Services Stock.

Shares outstanding at the end of the period include shares outstanding under the
Company's Employee Benefits Trust. For the Pittston Brink's Group (the "Brink's
Group"), such shares totaled 2,734 shares, 3,141 shares, 3,553 shares, 3,779 and
3,854 shares at December 31, 1997, 1996, 1995, 1994 and 1993, respectively. For
the Pittston Burlington Group (the "Burlington Group"), such shares totaled 868
shares, 1,280 shares, 1,777 shares, 1,890 shares and 1,927 shares at December
31, 1997, 1996, 1995 , 1994 and 1993, respectively. For the Pittston Minerals
Group (the "Minerals Group"), such shares totaled 232 shares, 424 shares, 594
shares, 723 shares and 770 shares at December 31, 1997, 1996, 1995, 1994 and
1993, respectively. Average shares outstanding do not include these shares.

The initial dividends on Brink's Stock and Burlington Stock were paid on March
1, 1996. Dividends paid by the Company on Services Stock have been attributed to
the Brink's Group and the Burlington Group in relation to the initial dividends
paid on the Brink's and Burlington Stocks.

(c) The net income per share amounts prior to 1997 have been restated, as
required, to comply with Statement of Financial Accounting Standards ("SFAS")
No. 128, "Earnings Per Share." For further discussion of net income per share
and the impact of SFAS No. 128 see Notes to the Consolidated Financial
Statements (Item 8).

(d) For the years ended December 31, 1994 and 1993, diluted net income per share
is considered to be the same as basic since the effect of common stock
equivalents and the assumed conversion of preferred stock was antidilutive. For
the year ended December 31, 1997, the assumed conversion of preferred stock was
antidilutive.

(e) Calculated based on the number of shares outstanding at the end of the
period excluding shares outstanding under the Company's Employee Benefits Trust.

                                       16

Pittston Brink's Group
SELECTED FINANCIAL DATA

The following Selected Financial Data reflects the results of operations and
financial position of the businesses which comprise Pittston Brink's Group
("Brink's Group") and should be read in connection with the Brink's Group's
financial statements. The financial information of the Brink's Group, Pittston
Burlington Group ("Burlington Group") and Pittston Minerals Group ("Minerals
Group") supplements the consolidated financial information of The Pittston
Company and Subsidiaries (the "Company") and, taken together, includes all
accounts which comprise the corresponding consolidated financial information of
the Company.

Five Years in Review

(In thousands, except per share amounts)                1997      1996      1995      1994      1993
====================================================================================================
                                                                                 
Sales and Income:
Operating revenues                                $1,101,434   909,813   788,395   656,993   570,953
Net income (a)                                        73,622    59,695    51,093    41,489    31,650
- ----------------------------------------------------------------------------------------------------
Financial Position:
Net property, plant and equipment                 $  346,672   256,759   214,653   180,930   156,976
Total assets                                         692,330   551,665   484,726   426,887   377,923
Long-term debt, less current maturities               38,682     5,542     5,795     7,990    12,649
Shareholder's equity                                 380,480   313,378   258,805   215,531   175,219
- ----------------------------------------------------------------------------------------------------
Average Pittston Brink's Group Common
Shares Outstanding (b), (c):
Basic                                                 38,273    38,200    37,931    37,784    36,907
Diluted                                               38,791    38,682    38,367    38,192    37,115
- ----------------------------------------------------------------------------------------------------
Pittston Brink's Group Common Shares
 Outstanding (b)                                      41,130    41,296    41,574    41,595    41,429
- ----------------------------------------------------------------------------------------------------
Per Pittston Brink's Group Common Share  (b), (c):
Net income (a):
Basic                                               $   1.92      1.56      1.35      1.10       .86
Diluted                                                 1.90      1.54      1.33      1.09       .85
Cash dividends                                           .10       .10       .09       .09       .09
Book value (d)                                          9.91      8.21      6.81      5.70      4.66
====================================================================================================

(a) As of January 1, 1992, Brink's Home Security, Inc. ("BHS") elected to
capitalize categories of costs not previously capitalized for home security
installations to more accurately reflect subscriber installation costs. The
effect of this change in accounting principle was to increase income before
cumulative effect of accounting changes and net income of the Brink's Group by
$3,213 or $.08 per basic and diluted share in 1997, $2,723 in 1996, $2,720 in
1995, $2,486 in 1994 and $2,435 in 1993. The net income per basic and diluted
share impact for 1993 through 1996 was $.07.

(b) All share and per share data presented reflects the completion of the
Brink's Stock Proposal which occurred on January 18, 1996. For periods prior to
the completion of the Brink's Stock Proposal, the number of shares of Brink's
Stock are assumed to be the same as the total number of shares of the Company's
previous Services Stock. Shares outstanding at the end of the period include
shares outstanding under the Company's Employee Benefits Trust of 2,734 shares,
3,141 shares, 3,553 shares, 3,779 and 3,854 shares at December 31, 1997, 1996,
1995, 1994 and 1993, respectively. Average shares outstanding do not include
these shares. The initial dividends on Brink's Stock were paid on March 1, 1996.
Dividends paid by the Company on Services Stock have been attributed to the
Brink's Group in relation to the initial dividends paid on the Brink's and
Burlington Stocks.

(c) The net income per share amounts prior to 1997 have been restated, as
required, to comply with SFAS No. 128. For further discussion of net income per
share and the impact of SFAS No. 128, see the Notes to Consolidated Financial
Statements (Item 8).

(d) Calculated based on the number of shares outstanding at the end of the
period excluding shares outstanding under the Company's Employee Benefits Trust.

                                       17

Pittston Burlington Group
SELECTED FINANCIAL DATA

The following Selected Financial Data reflects the results of operations and
financial position of the businesses which comprise Pittston Burlington Group
("Burlington Group") and should be read in connection with the Burlington
Group's financial statements. The financial information of the Burlington Group,
Pittston Brink's Group ("Brink's Group") and Pittston Minerals Group ("Minerals
Group") supplements the consolidated financial information of The Pittston
Company and Subsidiaries (the "Company") and, taken together, includes all
accounts which comprise the corresponding consolidated financial information of
the Company.

Five Years in Review

(In thousands, except per share amounts)      1997        1996        1995        1994      1993
================================================================================================
                                                                              
Sales and Income:
Operating revenues                      $1,662,338   1,484,869   1,403,195   1,215,284   998,079
Net income                                  32,348      33,801      32,855      38,356    15,476
- ------------------------------------------------------------------------------------------------
Financial Position:
Net property, plant and equipment       $  128,632     113,283      72,171      44,442    31,100
Total assets                               701,443     635,398     572,077     521,516   432,236
Long-term debt, less current maturities     37,016      28,723      26,697      41,906    45,460
Shareholder's equity                       323,710     304,989     271,853     240,880   203,150
- ------------------------------------------------------------------------------------------------
Average Pittston Burlington Group
Common Shares Outstanding (a), (b):
Basic                                       19,448      19,223      18,966      18,892    18,454
Diluted                                     19,993      19,681      19,596      19,436    18,763
- ------------------------------------------------------------------------------------------------
Pittston Burlington Group Common
Shares Outstanding (a)                      20,378      20,711      20,787      20,798    20,715
- ------------------------------------------------------------------------------------------------
Per Pittston Burlington Group Common
Share  (a), (b):
Net income:
Basic                                     $   1.66        1.76        1.73        2.03       .84
Diluted                                       1.62        1.72        1.68        1.97       .82
Cash dividends                                 .24         .24         .22         .22       .21
Book value (c)                               16.59       15.70       14.30       12.74     10.81
================================================================================================

(a) All share and per share data presented reflects the completion of the
Brink's Stock Proposal which occurred on January 18, 1996. For periods prior to
the completion of the Brink's Stock Proposal, the number of shares of Burlington
Stock are assumed to be equal to one-half of the number of shares of the
Company's previous Services Stock. Shares outstanding at the end of the period
include shares outstanding under the Company's Employee Benefits Trust of 868
shares, 1,280 shares, 1,777 shares , 1,890 shares and 1,927 shares at December
31, 1997, 1996, 1995,1994 and 1993, respectively. Average shares outstanding do
not include these shares. The initial dividends of Burlington Stock were paid on
March 1, 1996. Dividends paid by the Company on Services Stock have been
attributed to the Burlington Group in relation to the initial dividends paid on
the Burlington and Brink's Stocks.

(b) The net income per share amounts prior to 1997 have been restated, as
required, to comply with SFAS No. 128. For further discussion of net income per
share and the impact of SFAS No. 128, see the Notes to Consolidated Financial
Statements (Item 8).

(c) Calculated based on the number of shares outstanding at the end of the
period excluding shares outstanding under the Company's Employee Benefits Trust.

                                       18

Pittston Minerals Group
SELECTED FINANCIAL DATA

The following Selected Financial Data reflects the result of operations and
financial position of the businesses which comprise Pittston Minerals Group
("Minerals Group") and should be read in connection with the Minerals Group's
financial statements. The financial information of the Minerals Group, Pittston
Brink's Group ("Brink's Group") and Pittston Burlington Group ("Burlington
Group") supplements the consolidated financial information of The Pittston
Company and Subsidiaries (the "Company") and, taken together, includes all
accounts which comprise the corresponding consolidated financial information of
the Company.

Five Years in Review

(In thousands, except per share amounts)             1997      1996      1995      1994       1993
==================================================================================================
                                                                                
Sales and Income (Loss):
Net sales                                        $630,626   696,513   722,851   794,998    687,089
Net income (loss)                                   4,228    10,658    14,024   (52,948)   (32,980)
- --------------------------------------------------------------------------------------------------
Financial Position:
Net property, plant and equipment                $172,338   170,809   199,344   220,462    181,745
Total assets                                      654,182   706,981   798,609   867,512    606,247
Long-term debt, less current maturities           116,114   124,572   100,791    88,175        279
Shareholder's equity                              (18,572)  (11,660)   (8,679)   (8,596)   (24,857)
- --------------------------------------------------------------------------------------------------
Average Pittston Minerals Group
Common Shares Outstanding (a), (d):
Basic                                               8,076     7,897     7,786     7,594      7,381
Diluted                                             8,102     9,884    10,001     7,594      7,381
- --------------------------------------------------------------------------------------------------
Pittston Minerals Group Common
 Shares Outstanding (a)                             8,406     8,406     8,406     8,390      8,281
- --------------------------------------------------------------------------------------------------
Per Pittston Minerals Group Common Share (a), (d):
Net income (loss) (b):
Basic                                             $  0.09      1.14      1.45     (7.50)     (4.47)
Diluted                                              0.09      1.08      1.40     (7.50)     (4.47)
Cash dividends                                        .65       .65       .65       .65      .6204
Book value (c)                                      (8.94)    (8.38)    (9.46)   (10.74)     (3.31)
==================================================================================================

(a) Shares outstanding at the end of the period include shares outstanding under
the Company's Employee Benefits Trust of 232 shares, 424 shares, 594 shares, 723
shares and 770 shares at December 31, 1997, 1996, 1995 ,1994 and 1993,
respectively. Average shares outstanding do not include these shares.

(b) For the years ended December 31, 1994 and 1993, diluted net income per share
is considered to be the same as basic since the effect of common stock
equivalents and the assumed conversion of preferred stock was antidilutive. For
the year ended December 31, 1997, the assumed conversion of preferred stock was
antidulitive.

(c) Calculated based on the number of shares outstanding at the end of the
period excluding shares outstanding under the Company's Employee Benefits Trust.

(d) The net income per share amounts prior to 1997 have been restated, as
required, to comply with SFAS No. 128. For further discussion of net income per
share and the impact of SFAS No. 128, see the Notes to Consolidated Financial
Statements (Item 8).

                                       19

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITIONS

MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION

The Pittston Company and Subsidiaries
- --------------------------------------------------------------------------------

RESULTS OF OPERATIONS

                                                 Years Ended December 31
(In thousands)                              1997            1996            1995
- --------------------------------------------------------------------------------
                                                              
Net sales and operating revenues:
     Brink's                         $   921,851         754,011         659,459
     BHS                                 179,583         155,802         128,936
     BAX Global                        1,662,338       1,484,869       1,403,195
     Coal Operations                     612,907         677,393         706,251
     Mineral Ventures                     17,719          19,120          16,600
- --------------------------------------------------------------------------------
Net sales and operating revenues     $ 3,394,398       3,091,195       2,914,441
================================================================================
Operating profit (loss):
     Brink's                         $    81,591          56,823          42,738
     BHS                                  52,844          44,872          39,506
     BAX Global                           63,264          64,604          58,723
     Coal Operations                      12,217          20,034          23,131
     Mineral Ventures                     (2,070)          1,619             207
- --------------------------------------------------------------------------------
     Segment operating profit            207,846         187,952         164,305
     General corporate expense           (19,718)        (21,445)        (16,806)
- --------------------------------------------------------------------------------
Operating profit                     $   188,128         166,507         147,499
================================================================================

The Pittston Company (the "Company") reported net income of $110.2 million in
1997 compared with net income of $104.2 million in 1996. Operating profit
totaled $188.1 million in 1997, an increase of $21.6 million over the prior
year. Operating profit and net income for 1996 included three significant items
which impacted the Company's Pittston Coal Company ("Coal Operations"): a
benefit from the settlement of the Evergreen case (discussed below) at an amount
lower than previously accrued ($35.7 million or $23.2 million after-tax), a
charge related to a new accounting standard regarding the impairment of
long-lived assets ($29.9 million or $19.5 million after-tax) and the reversal of
excess restructuring liabilities ($11.7 million or $7.6 million after-tax). Net
income in 1997 benefited from increased operating profits at the Company's
Brink's Home Security, Inc. ("BHS") and Brink's, Incorporated ("Brink's")
businesses. These increases were partially offset by lower operating profits at
the Company's BAX Global Inc. ("BAX Global"), Coal Operations and Pittston
Mineral Ventures ("Mineral Ventures") businesses. Operating results in 1997 for
Coal Operations benefited from a $3.1 million or $2.0 million after-tax reversal
of excess restructuring liabilities.

Net income for the Company for 1996 was $104.2 million compared with $98.0
million for 1995. Operating profit totaled $166.5 million for 1996, compared
with $147.5 million for 1995. Net income and operating profits for 1996
benefited from increased earnings at Brink's, BHS, BAX Global, and Mineral
Ventures, partially offset by lower results at Coal Operations. Coal Operations
1996 operating profit and net income was also impacted by the aforementioned
three significant items.

Brink's

The following is a table of selected financial data for Brink's on a comparative
basis:

                                                  Years Ended December 31
(In thousands)                               1997           1996           1995
================================================================================
Operating revenues:
   North America (United States
          and Canada)                    $482,182        418,941        379,230
   Europe                                 146,464        128,848        124,151
     Latin America                        266,445        182,481        137,558
     Asia/Pacific                          26,760         23,741         18,520
- --------------------------------------------------------------------------------
Total operating revenues                 $921,851        754,011        659,459
================================================================================
Operating expenses                        725,693        605,851        533,109
Selling, general and administrative       116,378         93,770         84,507
- --------------------------------------------------------------------------------
Total costs and expenses                  842,071        699,621        617,616
- --------------------------------------------------------------------------------
Other operating income, net                 1,811          2,433            895
- --------------------------------------------------------------------------------
Operating profit:
   North America (United States
          and Canada)                    $40,612          34,387         29,159
   Europe                                 10,039           4,734          5,491
   Latin America                          28,711          15,243          6,246
   Asia/Pacific                            2,229           2,459          1,842
- --------------------------------------------------------------------------------
Total operating profit                   $81,591          56,823         42,738
================================================================================
Depreciation and amortization            $30,758          24,293         21,844
================================================================================
Cash capital expenditures                $45,234          32,149         22,415
================================================================================

Brink's worldwide consolidated revenues totaled $921.9 million in 1997 compared
to $754.0 million in 1996, a 22% increase. Brink's 1997 operating profit of
$81.6 million represented a 44% increase over the $56.8 million of operating
profit reported in 1996. Total costs and expenses in 1997 increased by $142.5
million (20%).

                                       20

Revenues from North American operations increased $63.3 million (15%), to $482.2
million in 1997 from $418.9 million in 1996. North American operating profit
increased $6.2 million (18%) to $40.6 million in the current year from $34.4
million in 1996. The revenue and operating profit improvement for 1997 primarily
resulted from improved armored car operations, which includes ATM services, and
from improved money processing operations.

Revenues and operating profit from European operations in 1997 amounted to
$146.5 million and $10.0 million, respectively. These amounts represented
increases of $17.6 million (14%) and $5.3 million (112%) from 1996. The
improvement in revenues and operating profit in 1997 was due to stronger results
in most European countries, partially offset by lower results from the 38% owned
affiliate in France. In January 1998, Brink's purchased nearly all the remaining
shares of this affiliate for payments over three years aggregating approximately
U.S. $39 million. The initial payment made at closing of U.S. $8.8 million was
funded through the revolving credit portion of the Company's credit agreement
with a syndicate of banks.

In Latin America, revenues and operating profit increased 46% to $266.4 million
and 88% to $28.7 million, respectively, from 1996 to 1997. These increases were
primarily due to the consolidation of the results of Brink's Venezuelan
subsidiary, Custodia y Traslado de Valores, C.A. ("Custravalca"), where Brink's
increased its ownership from 15% to 61% in January 1997. However, non-operating
expenses, including net interest and minority interest expense net of foreign
translation gains associated with the acquisition, offset more than half of the
operating profit generated by Custravalca.

Revenues and operating profits from Asia/Pacific operations in 1997 were $26.8
million and $2.2 million, respectively, compared to $23.7 million and $2.5
million, respectively, in 1996.

Brink's 1996 consolidated operating profit of $56.8 million amounted to a $14.1
million (33%) increase over the $42.7 million operating profit recorded in 1995.
Revenues increased by $94.6 million to $754.0 million, 14% higher than the 1995
level. Total costs and expenses in 1996 increased by $82.0 million (13%).

Revenues from North American operations totaled $418.9 million in 1996, $39.7
million (10%) higher than the 1995 level. North American operating profit
amounted to $34.4 million, an increase of $5.2 million (18%) compared to the
$29.2 million recorded in 1995. The favorable change in operating profit was
largely attributable to improved results generated by the armored car business,
which includes ATM services, as well as higher earnings from money processing
operations.

Revenues and operating profits from European operations were $128.8 million and
$4.7 million, respectively, in 1996. These amounts represented an increase of
$4.7 million (4%) and a decrease of $0.8 million (14%) from 1995. The decrease
in operating profits in 1996 was due to poor results in a few countries,
including Brink's then 38% owned affiliate in France.

In Latin America, revenues and operating profit increased $44.9 million (33%) to
$182.5 million and $9.0 million (144%) to $15.2 million, respectively, during
1996. These increases principally reflect the consolidation of Colombian
operations as a result of Brink's acquiring a majority ownership of that company
in the third quarter of 1995.

Revenues and operating profits from Asia/Pacific operations in 1996 were $23.7
million and $2.5 million, respectively, compared to $18.5 million and $1.8
million, respectively, in 1995.

BHS

The following is a table of selected financial data for BHS on a comparative
basis:

                                                   Years Ended December 31
(Dollars in thousands)                        1997          1996          1995
==============================================================================
Operating revenues                        $179,583       155,802       128,936

Operating expenses                          89,312        81,324        66,575
Selling, general and administrative         37,427        29,606        22,855
- ------------------------------------------------------------------------------
Total costs and expenses                   126,739       110,930        89,430
- ------------------------------------------------------------------------------
Operating profit                          $ 52,844        44,872        39,506
==============================================================================
Depreciation and amortization             $ 30,344        30,115        22,408
==============================================================================
Cash capital expenditures                 $ 70,927        61,522        47,256
==============================================================================
Annualized recurring revenues (a)         $154,718       128,106       107,707
==============================================================================
Number of subscribers:
     Beginning of period                   446,505       378,659       318,029
     Installations                         105,630        98,541        82,643
     Disconnects, net (b)                  (40,603)      (30,695)      (22,013)
- ------------------------------------------------------------------------------
End of period                              511,532       446,505       378,659
==============================================================================

(a) Annualized recurring revenues are calculated based on the number of
subscribers at period end multiplied by the average fee per subscriber received
in the last month of the period for monitoring, maintenance and related
services.

(b) Includes 4,281 of special limited service contracts for a large homeowners'
association that were discontinued as of December 31, 1997.

                                       21

Revenues for BHS increased by $23.8 million (15%) to $179.6 million in 1997 from
$155.8 million in 1996. The increase in revenues was predominantly the result of
higher ongoing monitoring and service revenues caused by a 15% growth of the
subscriber base for the year, combined with higher average monitoring fees. As a
result of such growth, annualized recurring revenues at the end of 1997 grew 21%
over the amount in effect at the end of 1996. The increase in monitoring and
service revenues was offset, in part, by a slight decrease in total installation
revenue. While the number of new security system installations has increased in
1997, the revenue per installation has decreased due to continuing aggressive
installation pricing and marketing by competitors.

Operating profit of $52.8 million in 1997 represents an increase of $7.9 million
(18%) compared to the $44.9 million earned in 1996. Included in this increase is
a $8.9 million reduction in depreciation expense resulting from a change in
estimate (discussed below). Operating profit was favorably impacted by the
monitoring and servicing revenue increases mentioned above, partially offset by
increased account servicing and administrative expenses which were a consequence
of the larger subscriber base. In addition, operating profit was negatively
impacted by a $6.7 million increase in net installation and marketing costs
incurred and expensed. While these costs to obtain subscribers increased during
1997, the cash margins per subscriber generated from recurring revenues showed
improvement from those of 1996.

Revenues for BHS increased by $26.9 million (21%) to $155.8 million in 1996 from
$128.9 million in 1995. The increase in revenues was primarily from ongoing
monitoring and recurring revenues caused by the 18% growth in the subscriber
base. As a result of such growth, annualized recurring revenues at the end of
1996 grew 19% over the amount in effect at the end of 1995. Total installation
revenue in 1996 grew 15% over the 1995 amount due to the increased volume of
installations partially offset by a reduction in revenue per installation.
Revenue per installation decreased due to the competitive connection fee pricing
in the marketplace.

Operating profit of $44.9 million for 1996 represented an increase of $5.4
million (14%) compared to the $39.5 million earned in 1995. The increase in
operating profit largely stemmed from the growth in the subscriber base and
higher average monitoring and service revenues, somewhat offset by higher
depreciation and increased account servicing and administrative expenses, which
were also a consequence of the larger subscriber base. In addition, installation
and marketing costs incurred and expensed during the year increased by $1.0
million from the prior year. Cash margins per subscriber generated from
recurring revenues remained consistent between 1995 and 1996.

It is BHS' policy to depreciate capitalized subscriber installation expenditures
over the estimated life of the security system based on subscriber retention
percentages. BHS initially developed its annual depreciation rate based on
information about subscriber retention which was available at the time. However,
accumulated historical data about actual subscriber retention has indicated that
approximately 50% of subscribers are still active after a period of ten years.
Therefore, in order to reflect the higher demonstrated retention of subscribers,
and to more accurately match depreciation expense with monthly recurring revenue
generated from active subscribers, beginning in the first quarter of 1997, BHS
prospectively adjusted its annual depreciation rate from 10 to 15 years for
capitalized subscriber installation costs. BHS will continue its practice of
charging the remaining net book value of all capitalized subscriber installation
expenditures to depreciation expense as soon as a system is identified for
disconnection. This change in estimate reduced depreciation expense for
capitalized installation costs in 1997 by $8.9 million.

As of January 1, 1992, BHS elected to capitalize categories of costs not
previously capitalized for home security installations to more accurately
reflect subscriber installation costs included as capitalized installation
costs, which added $4.9 million to operating profit in 1997 and $4.5 million in
both 1996 and 1995. The additional costs not previously capitalized consisted of
costs for installation labor and related benefits for supervisory, installation
scheduling, equipment testing and other support personnel (in the amount of $
2.6 million in 1997, $2.5 million in 1996 and $2.7 million in 1995) and costs
incurred in maintaining facilities and vehicles dedicated to the installation
process (in the amount of $2.3 million in 1997, $2.0 million in 1996 and $1.8
million in 1995). The increase in the amount capitalized, while adding to
current period profitability comparisons, defers recognition of expenses over
the estimated useful life of the installation. The additional subscriber
installation costs which are currently capitalized were expensed in prior years
for subscribers in those years. Because capitalized subscriber installation
costs for periods prior to January 1, 1992, were not adjusted for the change in
accounting principle, installation costs for subscribers in those years will
continue to be depreciated based on the lesser amounts capitalized in those
periods. Consequently, depreciation of capitalized subscriber installation costs
in the current year and until such capitalized costs prior to January 1, 1992,
are fully depreciated will be less than if such prior periods' capitalized costs
had been adjusted for the change in accounting. However, management believes the
effect on net income in 1997, 1996, and 1995 was immaterial. While the amounts
of the costs incurred which are capitalized vary based on current market and
operating conditions, the types of such costs which are currently capitalized
will not change. The change in the amount capitalized has no additional effect
on current or future cash flows or liquidity.

                                       22

BAX Global Inc.

The following is a table of selected financial data for BAX Global on a
comparative basis:

(Dollars in thousands - except per                   Years Ended December 31
pound/shipment amounts)                           1997        1996        1995
===============================================================================
                                                                      
Operating revenues:
     Intra-U.S.:
     Expedited freight services             $  620,839     547,647     528,174
     Other                                       7,579       6,906       6,917
- -------------------------------------------------------------------------------
Total Intra-U.S.                               628,418     554,553     535,091
International:
     Expedited freight services                784,730     713,834     698,624
     Customs clearances                        124,145     120,438     103,509
     Ocean and other                           125,045      96,044      65,971
- -------------------------------------------------------------------------------
Total International                          1,033,920     930,316     868,104
- -------------------------------------------------------------------------------
Total operating revenues                     1,662,338   1,484,869   1,403,195

Operating expenses                           1,455,336   1,301,974   1,234,095
Selling, general and administrative            146,245     119,821     113,210
- -------------------------------------------------------------------------------
Total costs and expenses                     1,601,581   1,421,795   1,347,305
- -------------------------------------------------------------------------------
Other operating income, net                      2,507       1,530       2,833
- -------------------------------------------------------------------------------
Operating profit:
     Intra-U.S.                                 36,858      36,143      30,416
     International                              38,906      28,461      28,307
     Other(a)                                  (12,500)         --          --
- -------------------------------------------------------------------------------
Total operating profit                     $    63,264      64,604      58,723
===============================================================================
Depreciation and amortization              $    29,667      23,254      19,856
===============================================================================
Cash capital expenditures                  $    30,955      59,238      32,288
===============================================================================
Expedited freight services shipment
     growth rate (b)                              12.0%        1.3%        6.2%
Expedited freight services weight
     growth rate (b):
     Intra-U.S.                                    8.7%        3.3%       (3.8%)
     International                                 9.0%        2.5%       29.1%
     Worldwide                                     8.9%        2.9%       11.3%
Expedited freight services weight
     (million pounds)                          1,556.6     1,430.0     1,390.2
===============================================================================
Expedited freight services shipments
     (thousands)                                 5,798       5,179       5,112
===============================================================================
Expedited freight services average:
     Yield (revenue per pound)              $    0.903       0.882       0.882
     Revenue per shipment                   $      242         244         240
     Weight per shipment (pounds)                  268         276         272
===============================================================================

(a) Consulting expenses related to the redesign of BAX Global's business
processes and information systems architecture of which $4.75 million and $7.75
million were attributed to Intra-U.S. and International operations,
respectively. These expenses are included in selling, general and administrative
expenses.

(b) Compared to the same period in the prior year.

BAX Global's operating profit, including the $12.5 million charge, amounted to
$63.3 million in 1997, a decrease of $1.3 million (2%) from the level achieved
in 1996. Worldwide revenues increased by 12% to $1.7 billion from $1.5 billion
in 1996. The $177.5 million growth in revenues reflects a 9% increase in
worldwide expedited freight services pounds shipped, which reached 1,556.6
million pounds in 1997, combined with a 2% increase in yield on this volume. In
addition, non-expedited freight services revenues increased $33.4 million (15%)
during 1997 as compared to 1996. Worldwide expenses in 1997 which include the
$12.5 million charge, amounted to $1.6 billion, $179.8 million (13%) higher than
1996.

In 1997, BAX Global's intra-U.S. revenues increased from $554.6 million to
$628.4 million. This $73.8 million (13%) increase was primarily due to an
increase of $73.2 million in intra-U.S. expedited freight services revenues. The
higher level of expedited freight services revenue in 1997 resulted from a 9%
increase in weight shipped coupled with a 4% increase in the average yield. The
increase in average yield was the combination of higher average pricing (both
overnight and second day freight). The higher average pricing was due, in large
part, to the effects of the UPS Strike and to an intra-U.S. shipment surcharge
which was initiated in September 1996 to offset various cost increases. In
addition, the average revenue per shipment and the average weight per shipment
decreased as a result of the UPS Strike since, the additional volume, on
average, consisted of a large number of smaller shipments. Excluding the
estimated effects of the UPS Strike, both of these averages increased over 1996.
Intra-U.S. operating profit during 1997, excluding any impact of the
aforementioned $12.5 million charge, increased $0.7 million from the $36.1
million recorded in 1996. Intra-U.S. operating profit in 1996 benefited from the
reduction in Federal excise tax liabilities while 1997 was favorably impacted by
the UPS Strike. However, the estimated $2.6 million operating profit benefit
from the UPS Strike was more than offset by higher transportation expenses
associated with additional capacity designed to improve on-time customer service
and to meet the rising demand in some of BAX Global's high growth markets.

International revenues in 1997 increased $103.6 million (11%) to $1,033.9
million from the $930.3 million recorded in 1996. International expedited
freight services revenue increased $70.9 million (10%) due to a 9% increase in
weight shipped combined with a 1% increase in the average yield. The increase in
the average yield on international expedited freight is primarily due to the
fuel surcharge implemented by BAX Global in March 1997 in reaction to a
corresponding surcharge implemented by its third party transportation providers.
International non-expedited freight services revenue increased $32.7 million
(15%) in 1997 as compared to 1996. The higher revenues relate to increases in
international logistics management services, primarily the result of the Cleton
acquisition (discussed below), and the continued expansion of ocean freight
services. International operating profit

                                       23

in 1997, excluding any impact of the aforementioned $12.5 million charge,
increased $10.4 million (37%) from the $28.5 million recorded in 1996. Operating
profit during 1997 benefited from the increased revenues combined with improved
margins on U.S. exports.

Operating results for the first quarter of 1998 are expected to be below those
of the comparable 1997 quarter. While volume to date in the 1998 quarter has
increased from that of the comparable 1997 period, transportation expenses are
continuing at higher levels over those in the comparable 1997 period. These
results for the first quarter are being impacted by a combination of factors
including service disruptions resulting from weather delays, equipment problems,
incremental information technology expenditures, including Year 2000 and a
softened export market due, in part, to the financial situation in Asia.

BAX Global operating profit in 1996 amounted to $64.6 million, an increase of
$5.9 million (10%) from the $58.7 million reported in 1995. Worldwide revenues
in 1996 increased 6% to $1.5 billion from $1.4 billion in 1995. The $81.7
million growth in revenues principally reflects a 3% increase in worldwide
expedited freight services pounds shipped, which reached 1,430.0 million pounds
in 1996. In addition, non-expedited freight services revenues increased $47.0
million (27%) during 1996 as compared to 1995. Worldwide expenses in 1996
amounted to $1.4 billion, $74.5 million (6%) higher than 1995.

In 1996, BAX Global's intra-U.S. revenues increased from $535.1 million to
$554.6 million. This $19.5 million (4%) increase was due to a corresponding
increase of $19.5 million in intra-U.S. expedited freight services revenues. The
higher level of expedited freight services revenue in 1996 primarily resulted
from a 3% increase in weight shipped. The average yield on this volume remained
essentially unchanged in 1996 as compared to 1995 due to lower average pricing
and sales mix for BAX Global's overnight service, offset by the initiation of a
surcharge in September 1996 on all domestic shipments. Intra-U.S. operating
profit in 1996 increased 19% from $30.4 million in 1995 to $36.1 million in
1996. The increase in operating profit reflects higher volume and lower average
transportation costs (primarily the benefit of reduced Federal excise tax
liabilities prior to re-instatement of such tax in August 1996), partially
offset by higher fuel costs.

International revenues in 1996 increased $62.2 million (7%) to $930.3 million
from the $868.1 million recorded in 1995. International expedited freight
services revenues increased $15.2 million (2%) due to a 3% increase in weight
shipped, offset partially by a slightly lower average yield. In addition,
international non-expedited freight services revenue increased $47.0 million
(28%) in 1996 as compared to 1995. The increase is primarily due to an increase
in customs clearance and an expansion of ocean freight services. International
operating profit in 1996 amounted to $28.5 million essentially unchanged from
the $28.3 million recorded in 1995. Operating profit during 1996, primarily
reflects improved operating margins on U.S. exports and ocean freight services.
However, these improvements were offset, in large part, by added costs related
to the expansion of ocean and logistics operations and further investments to
strengthen BAX Global's worldwide network including quality improvements in
global systems, facilities and acquisitions.

In June 1997, BAX Global completed its acquisition of Cleton & Co.
("Cleton"), a leading logistics provider in the Netherlands. BAX Global
acquired Cleton for the equivalent of U.S. $10.7 million, and the
initial assumption of the equivalent of U.S. $10.0 million of debt of
which approximately U.S. $6.0 million was outstanding at December 31,
1997. Additional contingent payments ranging from the current
equivalent of U.S. $0 to U.S. $18.0 million will be paid over the next
three years based on certain performance criteria of Cleton.

In February 1998, BAX Global signed an agreement to acquire, subject to
regulatory and judicial approvals and other conditions to closing, the privately
held Air Transport International LLC ("ATI") for a purchase price approximating
$25-28 million, subject to possible adjustments. ATI is a U.S.-based freight and
passenger airline which operates a certificated fleet of DC-8 aircraft providing
services to BAX Global and other customers. The ATI acquisition is part of BAX
Global's strategy to improve the quality of its service offerings for its
customers by increasing its control over flight operations. As a result of this
agreement, BAX Global is suspending its efforts to start up its own certificated
airline carrier operations.

During 1997, BAX Global began a BAX Process Innovation ("BPI") Program which was
comprised of an extensive review of all aspects of the company's operations.
Senior management from around the world, working with a major consulting firm,
reviewed all areas of the business including sales, operations, finance,
logistics and information technology. BPI detailed improvements in its worldwide
business through development of information systems that are intended to enhance
productivity and improve the company's competitive position.

In 1998, BAX Global initiated a commitment for BPI of approximately $50 million
over the next six to nine months. As more details of this plan are being
developed, BPI will be integrated with BAX Global's continuous improvement
program. BAX Global now anticipates spending approximately $120 million
(including the aforementioned $50 million) on information

                                       24

technology systems during 1998 and 1999 which will include substantial
improvements to its information systems, annual recurring capital costs and
spending for Year 2000 compliance issues. These expenditures are expected to
occur equally between the two years, with approximately one-third expected to be
expensed as incurred while the remainder will be capitalized.

Coal Operations

The following is a table of selected financial data for Coal Operations on a
comparative basis:

                                                     Years Ended December 31
(In thousands)                                     1997       1996        1995
===============================================================================
                                                           
Net sales                                     $ 612,907    677,393     706,251

Cost of sales                                   594,688    693,505     683,621
Selling, general and administrative              19,457     24,261      22,415
Restructuring and other credits,
     including litigation accrual                (3,104)   (47,299)         --
- -------------------------------------------------------------------------------
Total costs and expenses                        611,041    670,467     706,036
- -------------------------------------------------------------------------------
Other operating income, net                      10,351     13,108      22,916
- -------------------------------------------------------------------------------
Operating profit                              $  12,217     20,034      23,131
===============================================================================
Coal sales (tons):
     Metallurgical                                7,655      8,124       8,607
     Utility and industrial                      12,813     14,847      15,789
- -------------------------------------------------------------------------------
Total coal sales                                 20,468     22,971      24,396
===============================================================================

Production/purchased (tons):
     Deep                                         4,975      3,930       3,982
     Surface                                     10,238     11,151      12,934
     Contract                                     1,433      1,621       1,941
- -------------------------------------------------------------------------------
                                                 16,646     16,702      18,857
Purchased                                         4,075      5,762       6,047
- -------------------------------------------------------------------------------
Total                                            20,721     22,464      24,904
===============================================================================

Coal Operations generated an operating profit of $12.2 million in 1997, compared
to $20.0 million reported in 1996 and $23.1 million reported in 1995. Operating
results in 1997 included a benefit of $3.1 million from the reversal of excess
restructuring liabilities. Operating results in 1996 included a benefit of $35.7
million from the settlement of the Evergreen case at an amount lower than
previously accrued in 1993 and a benefit from excess restructuring liabilities
of $11.7 million. These 1996 benefits were offset, in part, by a $29.9 million
charge related to the adoption of a new accounting standard regarding the
impairment of long-lived assets. The charge is included in cost of sales ($26.3
million) and selling, general and administrative expenses ($3.6 million). All
three of these items are discussed in greater detail below. In addition,
operating profit in 1996 was also impacted by a $3.0 million benefit from a
litigation settlement offset by a decrease in other operating income of $9.8
million, primarily due to decreases in gains from the sale of coal assets which
generated $11.9 million in 1995.

Coal Operations' operating profit, excluding restructuring credits, the effects
of the Evergreen Settlement and the adoption of SFAS No. 121, is analyzed as
follows:

                                                       Years Ended December 31
(In thousands)                                      1997        1996        1995
================================================================================
                                                                
Net coal sales (a)                              $604,140     670,121     702,864
Current production cost of coal sold (a)         558,658     634,754     648,383
- --------------------------------------------------------------------------------
Coal margin                                       45,482      35,367      54,481
Non-coal margin                                    2,465       2,177         749
Other operating income, net                       10,351      13,108      22,916
- --------------------------------------------------------------------------------
Margin and other income                           58,298      50,652      78,146
- --------------------------------------------------------------------------------
Other costs and expenses:
     Idle equipment and closed mines               2,309       1,044       9,980
     Inactive employee cost                       27,419      26,300      22,620
     Selling, general and administrative          19,457      20,625      22,415
- --------------------------------------------------------------------------------
Total other costs and expenses                    49,185      47,969      55,015
- --------------------------------------------------------------------------------
Operating profit (before restructuring
     and other credits) (b)                     $  9,113       2,683      23,131
================================================================================
Coal margin per ton:
     Realization                                $  29.52       29.17       28.81
     Current production costs                      27.29       27.63       26.58
- --------------------------------------------------------------------------------
Coal margin                                     $   2.23        1.54        2.23
================================================================================

(a) Excludes non-coal components 

(b) Restructuring and other credits in 1997 consist of a benefit from excess
restructuring liabilities of $3,104. Restructuring and other credits in 1996
consist of an impairment loss related to the adoption of SFAS No. 121 of $29,948
($26,312 in cost of sales and $3,636 in selling, general and administrative
expenses), a gain from the settlement of the Evergreen case of $35,650 at an
amount lower than previously accrued and a benefit from excess restructuring
liabilities of $11,649. Both the gain from the Evergreen case and the benefit
from excess restructuring liabilities are included in Coal Operations' operating
profit as "Restructuring and other credits, including litigation accrual".

Sales volume of 20.5 million tons in 1997 was 2.5 million tons less than the
23.0 million tons sold in 1996. Compared to 1996, steam coal sales in 1997
decreased by 2.0 million tons (14%), to 12.8 million tons and metallurgical coal
sales declined by 0.5 million tons (6%), to 7.7 million tons. The steam sales
reduction was due to the expiration of certain long-term contracts coupled with
reduced spot sales. Steam coal sales represented 63% of total volume in 1997 and
65% in 1996.

                                       25

For 1997, coal margin was $45.5 million, an increase of $10.1 million over 1996.
Coal margin per ton increased to $2.23 per ton in 1997 from $1.54 per ton for
1996, due to a combination of a $0.35 per ton increase in realization and a
$0.34 per ton decrease in the current production cost of coal sold. The increase
in average realization per ton was due to an increase in steam realization as
the majority of steam coal production is sold under long-term contracts
containing price escalation provisions. This increase was partially offset by a
decrease in the metallurgical coal realization due to lower average price
settlements with metallurgical customers for the contract year which began on
April 1, 1997. Expectations are that 1998 realizations on metallurgical coal
sales will not significantly vary from 1997 levels.

The current production cost of coal sold for 1997 was $27.29 per ton as compared
with $27.63 per ton for 1996. Production costs in 1997 were favorably impacted
by lower surface mine costs per ton partially offset by higher per ton deep mine
costs. In addition, 1997 production costs benefited from decreases in employee
benefit and reclamation liabilities. Production for 1997 totaled 16.6 million
tons, consistent with 1996 production of 16.7 million tons. Surface production
accounted for 63% and 68% of the total volume in 1997 and 1996, respectively.
Productivity of 37.6 tons per man day in 1997 was equal to that of 1996.

Non-coal margin was $2.5 million for 1997, an increase of $0.3 million, which
largely reflects the impact of changes in natural gas prices over 1996. Other
operating income was $10.4 million for 1997, a decrease of $2.8 million from
1996. Included in 1996 was a one-time benefit of $3.0 million from a litigation
settlement.

Idle equipment and closed mine costs increased by $1.3 million in 1997 versus
1996. Inactive employee costs, which primarily represent long-term employee
liabilities for pension and retiree medical costs were higher in 1997 as
compared to 1996, increasing by $1.1 million. Selling, general and
administrative expenses declined by $1.2 million (6%) in 1997 as compared to
1996 as a result of Coal Operations cost control efforts.

Sales volume of 23.0 million tons in 1996 was 1.4 million tons less than the
24.4 million tons sold in 1995. Metallurgical coal sales decreased by 0.5
million tons (6%) in 1996 to 8.1 million tons compared to the prior year period.
Steam coal sales decreased by 0.9 million tons (6%) in 1996 to 14.9 million tons
compared to the prior year period. Steam coal sales represented 65% of the total
sales volume for both 1996 and 1995.

Total coal margin of $35.4 million for 1996 represented a decrease of $19.1
million (35%) from the 1995 coal margin of $54.5 million. The decline in coal
margin primarily reflects a $1.05 per ton (4%) increase in the current
production cost of coal sold which was partially offset by a $0.36 per ton (1%)
increase in realization. Coal margin was also negatively impacted by a decrease
in 1996 in tons of coal sold from 24.4 million to 23.0 million. The increase in
average realization per ton was mainly due to export metallurgical coal pricing.
For the contract year that began April 1, 1996, export metallurgical coal prices
only increased slightly over those in effect at April 1, 1995, which were
significantly improved over the April 1, 1994 prices. As a result, the export
metallurgical realization for 1996 as compared to 1995 benefited from higher
first quarter realization (1995 contract prices versus 1994 contract prices) and
from additional export tonnage shipped. Domestic steam coal pricing, mostly
priced according to long-term contracts, improved modestly as contract
escalations were mostly offset by lower priced spot sales.

The increase in the current production cost per ton of coal sold for 1996 was
due to higher company surface mine and purchased coal costs which were only
partially offset by lower company deep mine and contract coal costs as well as a
state tax credit for coal produced in Virginia. Current production costs in 1996
were also negatively impacted by higher fuel prices and increases in employee
benefits, reclamation and environmental liabilities. Production for 1996 totaled
16.7 million tons, a decrease of 11% from 1995, principally reflecting
reductions in production due to mine sales and closures in 1995. Surface mine
production accounted for 68% and 70% of the total production volume in 1996 and
1995, respectively. Productivity of 37.6 tons per man day represented a slight
increase from 1995.

Non-coal margin for 1996 increased by $1.4 million from 1995, reflecting higher
gas prices. Other operating income, including sales of properties and equipment
and third party royalties, amounted to $13.1 million in 1996, $9.8 million less
than 1995. The higher level of income recorded in 1995 reflected gains of $11.9
million from the sale of coal assets.

Idle equipment and closed mine costs decreased by $8.9 million in 1996. Idle
equipment expenses were reduced from the prior period level as a result of Coal
Operations' improved equipment management program. Additionally, costs for 1995
were adversely impacted by the idling of two surface mines. Inactive employee
costs, which primarily represent long-term employee liabilities for pension and
retiree medical cost, increased by $3.7 million to $26.3 million in 1996. The
unfavorable variance was due to the use of lower long-term interest rates to
calculate the present value of the long-term liabilities in 1996. In addition,
inactive employee costs in 1995 include a benefit of $2.5 million from a
favorable litigation decision. Selling, general and administrative expenses
continued to decline in 1996 as a result of cost control efforts implemented in
1995. These costs decreased $1.8 million (8%) in 1996 over the 1995 year.

                                       26

At December 31, 1997, Coal Operations had a liability of $30.8 million for
various restructuring costs which was recorded as restructuring and other
charges in the Statement of Operations in years prior to 1995. Although coal
production has ceased at the mines remaining in the accrual, Coal Operations
will incur reclamation and environmental costs for several years to bring these
properties into compliance with federal and state environmental laws. However,
management believes that the reserve, as adjusted, at December 31, 1997, should
be sufficient to provide for these future costs. Management does not anticipate
material additional future charges to operating earnings for these facilities,
although continual cash funding will be required over the next several years.

The initiation, in 1996, of a state tax credit for coal produced in Virginia,
along with favorable labor negotiations and improved metallurgical market
conditions for medium volatile coal, led management to continue operating an
underground mine and a related coal preparation and loading facility previously
included in the restructuring reserve. As a result of these decisions and
favorable workers' compensation claim developments, Coal Operations reversed
$3.1 million and $11.7 million of the reserve in 1997 and 1996, respectively.
The 1996 reversal included $4.8 million related to estimated mine and plant
closures, primarily reclamation, and $6.9 million in employee severance and
other benefit costs. The entire 1997 reversal related to workers' compensation
claim reserves.

The following table analyzes the changes in liabilities during the last three
years for facility closure costs recorded as restructuring and other charges:

                                                             Employee
                                                   Mine   Termination,
                                       Leased       and       Medical
                                    Machinery     Plant           and
                                          and   Closure     Severance
(In thousands)                      Equipment     Costs         Costs     Total
===============================================================================
                                                            
Balance December 31, 1994              $3,787    38,256        43,372    85,415
Payments (a)                            1,993     7,765         7,295    17,053
Other reductions (c)                      576     1,508                   2,084
- -------------------------------------------------------------------------------
Balance December 31, 1995               1,218    28,983        36,077    66,278
Reversals                                         4,778         6,871    11,649
Payments (b)                              842     5,499         3,921    10,262
Other reductions (c)                       --     6,267            --     6,267
- -------------------------------------------------------------------------------
Balance December 31, 1996                 376    12,439        25,285    38,100
Reversals                                                       3,104     3,104
Payments (d)                              376     1,764         2,010     4,150
Other                                               468          (468)       --
- -------------------------------------------------------------------------------
Balance December 31, 1997              $   --    11,143        19,703    30,846
===============================================================================

(a) Of the total payments made in 1995, $6,424 was for liabilities recorded in
years prior to 1993, $2,486 was for liabilities recorded in 1993 and $8,143 was
for liabilities recorded in 1994.

(b) Of the total payments made in 1996, $5,119 was for liabilities recorded in
years prior to 1993, $485 was for liabilities recorded in 1993 and $4,658 was
for liabilities recorded in 1994.

(c) These amounts represent the assumption of liabilities by third parties as a
result of sales transactions.

(d) Of the total payments made in 1997, $3,053 was for liabilities recorded in
years prior to 1993, $125 was for liabilities recorded in 1993 and $972 was for
liabilities recorded in 1994.

During the next twelve months, expected cash funding of these charges will be
approximately $4 to $6 million. The liability for mine and plant closure costs
is expected to be satisfied over the next nine years, of which approximately 40%
is expected to be paid over the next two years. The liability for workers'
compensation is estimated to be 42% settled over the next four years with the
balance paid during the following five to nine years.

In October 1992, the Coal Industry Retiree Health Benefit Act of 1992 (the
"Health Benefit Act") was enacted as part of the Energy Policy Act of 1992. The
Health Benefit Act established rules for the payment of future health care
benefits for thousands of retired union mine workers and their dependents. The
Health Benefit Act established a trust fund to which "signatory operators" and
"related persons", including the Company and certain of its subsidiaries (the
"Pittston Companies"), are jointly and severally liable for annual premiums for
assigned beneficiaries, together with a pro rata share for certain beneficiaries
who never worked for such employers ("unassigned beneficiaries"), in amounts
determined on the basis set forth in the Health Benefit Act. For 1997, 1996 and
1995, these amounts, on a pretax basis, were approximately $9.3 million, $10.4
million and $10.8 million, respectively. The Company believes that the annual
cash funding under the Health Benefit Act for the Pittston Companies' assigned
beneficiaries will continue at approximately $9 million per year for the next
several years and should begin to decline thereafter as the number of such
assigned beneficiaries decreases.

Based on the number of beneficiaries actually assigned by the Social Security
Administration, the Company estimates the aggregate pretax liability relating to
the Pittston Companies' assigned beneficiaries remaining at December 31, 1997 at
approximately $200 million, which when discounted at 7.5% provides a present
value estimate of approximately $90 million.

The ultimate obligation that will be incurred by the Company could be
significantly affected by, among other things, increased medical costs,
decreased number of beneficiaries, governmental funding arrangements and such
federal health benefit legislation of general application as may be enacted. In
addition, the Health Benefit Act requires the Pittston Companies to fund, pro
rata according to the total number of assigned beneficiaries, a portion of the
health benefits for unassigned beneficiaries. At this time, the funding for such
health benefits is being provided from another source and for this and other
reasons the Pittston Companies' ultimate obligation for the unassigned
beneficiaries cannot be determined. The Company accounts for its
obligations under the Health Benefit Act as a participant in a multi-employer
plan and recognizes the annual cost on a pay-as-you-go basis.

                                       27

In 1988, the trustees of the 1950 Benefit Trust Fund and the 1974 Pension
Benefit Trust Funds (the "Trust Funds") established under collective bargaining
agreements with the UMWA brought an action (the "Evergreen Case") against the
Company and a number of its coal subsidiaries in the United States District
Court for the District of Columbia, claiming that the defendants are obligated
to contribute to such Trust Funds in accordance with the provisions of the 1988
and subsequent National Bituminous Coal Wage Agreements, to which neither the
Company nor any of its subsidiaries is a signatory. In 1993, the Minerals Group
recognized in its financial statements the potential liability that might have
resulted from an ultimate adverse judgment in the Evergreen Case.

In late March 1996, a settlement was reached in the Evergreen Case. Under the
terms of the settlement, the coal subsidiaries which had been signatories to
earlier National Bituminous Coal Wage Agreements agreed to make various lump sum
payments in full satisfaction of all amounts allegedly due to the Trust Funds
through January 31, 1996, to be paid over time as follows: approximately $25.8
million upon dismissal of the Evergreen Case and the remainder of $24.0 million
in installments of $7.0 million in 1996 and $8.5 million in each of 1997 and
1998. The first payment was entirely funded through an escrow account previously
established by the Company. The second and third payments were paid according to
schedule, and were funded through cash provided by operating activities. In
addition, the coal subsidiaries agreed to future participation in the UMWA 1974
Pension Plan.

As a result of the settlement of the Evergreen Case at an amount lower than
those previously accrued, the Minerals Group recorded a benefit of approximately
$35.7 million ($23.2 million after-tax) in the first quarter of 1996 in its
financial statements.

In 1996, the Minerals Group adopted Statement of Financial Accounting Standards
("SFAS") No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of". SFAS No. 121 requires companies to review
assets for impairment whenever circumstances indicate that the carrying amount
for an asset may not be recoverable. SFAS No. 121 resulted in a pre-tax charge
to 1996 earnings for Coal Operations of $29.9 million ($19.5 million after-tax),
of which $26.3 million was included in cost of sales and $3.6 million was
included in selling, general and administrative expenses. Assets for which the
impairment loss was recognized consisted of property, plant and equipment,
advanced royalties and goodwill. These assets primarily related to mines
scheduled for closure in the near term and idled facilities and related
equipment. No such charge was incurred in 1997.

Mineral Ventures

The following is a table of selected financial data for Mineral Ventures on a
comparative basis:

(Dollars in thousands, except                      Years Ended December 31
per ounce data)                                1997         1996         1995
===============================================================================
                                                              
Stawell Gold Mine
     Gold sales                             $17,714       19,071       16,449
     Other revenue                                5           49          151
- -------------------------------------------------------------------------------
Net sales                                    17,719       19,120       16,600
Cost of sales(a)                             14,242       13,898       12,554
Selling, general and administrative(a)        1,242        1,124        1,025
- -------------------------------------------------------------------------------
Total costs and expenses                     15,484       15,022       13,579
- -------------------------------------------------------------------------------
Operating profit-Stawell Gold Mine            2,235        4,098        3,021
Other operating expense, net                 (4,305)      (2,479)      (2,814)
- -------------------------------------------------------------------------------
Operating (loss) profit                     $(2,070)       1,619          207
===============================================================================
Stawell Gold Mine:
Mineral Ventures' 50% direct share:
     Ounces sold                             42,024       45,957       40,302
     Ounces produced                         42,301       45,443       40,606
Average per ounce sold (US$):
     Realization(b)                         $   422          415          408
     Cash cost                                  302          287          297
===============================================================================

(a) Excludes $93 and $3,543 of non-Stawell related cost of sales and selling,
general and administrative expenses, respectively, for 1997. Excludes $94 and
$2,691 of non-Stawell related cost of sales and selling, general and
administrative expenses, respectively, for 1996. Excludes $120 and $2,545 of
non-Stawell related cost of sales and selling, general and administrative
expenses, respectively, for 1995. Such costs are reclassified to cost of sales
and selling, general and administrative expenses in the Minerals Group statement
of operations.

(b) 1997 includes proceeds from the liquidation of a gold forward sale hedge
position in July 1997. The proceeds from this liquidation were fully recognized
by December 31, 1997.

Mineral Ventures, which primarily consists of a 50% direct and a 17% indirect
interest in the Stawell gold mine ("Stawell") in western Victoria, Australia,
generated an operating loss of $2.1 million in 1997 as compared to an operating
profit of $1.6 million in 1996. Mineral Ventures' 50% direct interest in
Stawell's operations generated net sales of $17.7 million in 1997 compared to
$19.1 million in 1996 as the ounces of gold sold decreased 9% from 46.0 thousand
ounces to 42.0 thousand

                                       28

ounces. The operating profit at Stawell of $2.2 million was $1.9 million lower
than the operating profit of $4.1 million in 1996, reflecting a $15 per ounce
increase (5%) in the cash cost of gold sold offset by a $7 per ounce increase
(2%) in average realization. Stawell's operating costs in 1997 were negatively
impacted by the collapse during construction of a new ventilation shaft that
resulted in a write-off of $1.0 million, approximately $0.75 million, of which,
is attributed to Mineral Ventures' 50% direct interest in Stawell with the
remainder attributed to Mineral Ventures' 17% indirect interest in Stawell.
Stawell's results were also negatively impacted by unfavorable ground conditions
through the first half of 1997, and lower production and higher costs during the
year resulting from the collapse of the aforementioned ventilation shaft.

Mineral Ventures generated an operating profit of $1.6 million in 1996 as
compared to the $0.2 million reported in 1995. Mineral Ventures' 50% direct
interest in Stawell's operations generated $19.1 million in gold sales in 1996
as compared with $16.4 million in 1995 as the ounces of gold sold increased 14%
from 40.3 thousand ounces to 46.0 thousand ounces. The operating profit at
Stawell increased from $3.0 million in 1995 to $4.1 million in 1996 reflecting a
combination of a $7 per ounce increase in realization and a $10 per ounce
decrease in the cash cost per ounce of gold sold. Operating costs in 1996 were
lower than 1995, where operating costs were impacted by adverse geological
conditions at the mine.

In July 1997, in reaction to the continued decline in the market price of gold,
Mineral Ventures closed a gold forward sale hedge position relating to 16,397
ounces and realized proceeds of $2.6 million. These proceeds, which equate to
approximately $160 per ounce were recognized for accounting purposes as ounces
of gold were sold in the market. The full amount of these proceeds was
recognized by December 31, 1997. As of December 31, 1997, approximately 19% of
Mineral Ventures' proven and probable reserves had been sold forward under
forward sales contracts that mature periodically through mid-1999. These
contracts should result in an average realization of between $325 and $330 per
ounce of gold sold through the end of 1998. At that time, realization will be
dependent on the spot market or new contract hedge positions.

At December 31, 1997, remaining proven and probable gold reserves at the Stawell
mine were estimated at 438,000 ounces. The joint venture also has exploration
rights in the highly prospective district around the mine.

Other operating expense, net, includes equity earnings from joint ventures,
primarily consisting of Mineral Ventures' 17% indirect interest in Stawell's
operations and gold exploration costs for all operations excluding Stawell.
Other operating expenses increased by $1.8 million and decreased by $0.3 million
in 1997 and 1996, respectively, primarily due to joint venture losses. In
addition, gold exploration costs increased from 1996 and are being incurred by
Mineral Ventures in Nevada and Australia with its joint venture partners.

In addition to its interest in Stawell, Mineral Ventures has 17% indirect
interest in the Silver Swan base metals property in Western Australia. The
initial mining and commissioning of nickel at Silver Swan has proceeded
according to plan and, after some customer delays, production and shipping
schedules are also on plan.

Foreign Operations

A portion of the Company's financial results is derived from activities in
several foreign countries, each with a local currency other than the U.S.
dollar. Because the financial results of the Company are reported in U.S.
dollars, they are affected by the changes in the value of the various foreign
currencies in relation to the U.S. dollar. The Company's international activity
is not concentrated in any single currency, which limits the risks of foreign
currency rate fluctuation. In addition, these rate fluctuations may adversely
affect transactions which are denominated in currencies other than the
functional currency. The Company routinely enters into such transactions in the
normal course of its business. Although the diversity of its foreign operations
limits the risks associated with such transactions, the Company uses foreign
currency forward contracts to hedge the risks associated with such transactions.
Realized and unrealized gains and losses on these contracts are deferred and
recognized as part of the specific transaction hedged. In addition, translation
adjustments relating to operations in countries with highly inflationary
economies are included in net income, along with all transaction gains or losses
for the period. A subsidiary in Venezuela and affiliates in Mexico operate in
such highly inflationary economies. Prior to January 1, 1998, the economy in
Brazil, in which the Company has subsidiaries, was considered highly
inflationary.

The Company is also subject to other risks customarily associated with doing
business in foreign countries, including labor and economic conditions, controls
on repatriation of earnings and capital, nationalization, political instability,
expropriation and other forms of restrictive action by local governments. The
future effects, if any, of such risks on the Company cannot be predicted.

                                       29

Corporate Expenses

In 1997, general corporate expenses totaled $19.7 million compared with $21.4
million and $16.8 million in 1996 and 1995, respectively. Corporate expenses in
1996 reflect the costs associated with the relocation of the Company's corporate
headquarters to Richmond, Virginia, which approximated $2.9 million.

Corporate expenses for the first quarter of 1998 will reflect approximately $6
million related to payments or accruals being made pursuant to the retirement
agreement between the Company and Joseph C. Farrell, former Chairman, President
and Chief Executive Officer of the Company.

Other Operating Income, Net

Other net operating income for 1997 decreased $3.4 million to $14.0 million and
decreased $9.1 million in 1996 from the $26.5 million recorded in 1995. Other
net operating income principally includes the Company's share of net income of
unconsolidated foreign affiliates, primarily Brink's equity affiliates, royalty
income from Coal Operations and gains and losses from sales of coal assets. The
lower level of other net operating income in 1997 was primarily due to a $3.0
million one-time benefit related to a Coal Operations litigation settlement in
1996. The decrease in 1996 over 1995 was primarily due to decreases in sales of
Coal assets which generated $11.9 million of gains in 1995. Equity earnings of
foreign affiliates included in other net operating income totaled $0.5 million,
$2.1 million and $0.2 million in 1997, 1996 and 1995, respectively.

Interest Expense

Interest expense totaled $27.1 million in 1997 compared with $14.1 million in
1996 and $14.3 million in 1995. The increase is predominantly due to higher
average borrowings resulting from acquisitions by both Brink's and BAX Global to
expand their operations. Although total debt increased slightly in 1996,
interest expense remained essentially unchanged as compared to 1995 due to a
lower average rate of interest charged during the year.

Other Expense, Net

Other net expense for 1997 decreased $2.1 million to $7.1 million from $9.2
million in 1996 and increased by $2.9 million in 1996 from $6.3 million in 1995.
The higher level of other net operating expense in 1996 was due primarily to an
increase in minority interest expense for Brink's consolidated affiliates,
offset in part by lower foreign translation losses.

Income Taxes

In 1997, 1996 and 1995, the provision for income taxes was less than the
statutory federal income tax rate of 35% due to the tax benefits of percentage
depletion and lower taxes on foreign income.

Based on the Company's historical and expected taxable earnings, management
believes it is more likely than not that the Company will realize the benefit of
the existing deferred tax asset at December 31, 1997.

FINANCIAL CONDITION

Cash Flow Requirements

Cash provided by operating activities during 1997 totaled $268.1 million
compared with $196.7 million in 1996. Net income, noncash charges and changes in
operating assets and liabilities in 1996 were significantly affected by three
items, a benefit from the settlement of the Evergreen case at an amount less
than originally accrued, a charge related to the adoption of SFAS No. 121, and a
benefit from the reversal of excess restructuring liabilities. These items had
no effect on cash generated by operations except that the second and third
Evergreen Case settlement payments of $7.0 million and $8.5 million were paid
from operating cash in 1996 and 1997, respectively. During 1997, cash flow from
operating activities was favorably impacted by higher levels of net income and
non-cash charges combined with lower funding requirements for operating assets
and liabilities. Net cash provided by operating activities did not fully fund
investing activities (primarily capital expenditures, acquisitions and aircraft
heavy maintenance) and share activities, resulting in a net increase in debt of
$42.0 million and an increase in cash and cash equivalents of $28.7 million as
of December 31, 1997.

Capital Expenditures

Cash capital expenditures for 1997 totaled $173.8 million, and an additional
$4.9 million in expenditures were funded by capital leases. Of the amount of
cash capital expenditures, $70.9 million (41%) was spent by BHS, $31.0 million
(18%) was spent by BAX Global, $45.2 million (26%) was spent by Brink's, $22.4
million (13%) was spent by Coal Operations and $3.9 million (2%) was spent by
Mineral Ventures. Expenditures incurred by BHS in 1997 were primarily for
customer installations, reflecting the expansion of the subscriber base. Capital
expenditures made by Brink's, BAX Global, Mineral Ventures and Coal Operations
in 1997 were primarily for replacement and maintenance of current ongoing
business operations. In addition, a portion of BAX Global's capital expenditures
related to the development of new information systems.

Cash capital expenditures totaled $180.7 million in 1996. An additional $3.9
million of expenditures were made through capital leases. Of the amount of cash
capital expenditures, $61.5 million (34%) was spent by BHS, $59.2 million (33%)
was spent by BAX Global, $32.2 million (18%) was spent by Brink's, $19.1 million
(11%) was spent by Coal Operations and $2.7 million (1%) was spent by Mineral
Ventures. In addition, corporate expenditures totaled $6.0 million (3%)
primarily as a result of the purchase of the new corporate headquarters. Capital
expenditures for BAX Global in 1996 included the purchase of three aircraft and
the acquisition of new support facilities.

                                       30

Cash capital expenditures in 1998 are currently expected to approximate $221
million, excluding any potential expenditures related to the BPI Program and BAX
Global's information technology systems. The 1998 estimated expenditures are
approximately $58 million higher than the 1997 level of expenditures. The
increase is expected to result largely from expenditures at BAX Global in the
support of new facilities, expenditures at BHS resulting from continued
expansion of the subscriber base, and at Brink's for expansion of North America
and international operations. The Company's Burlington Group anticipates
spending $24.0 million on aircraft heavy maintenance in 1998.

Financing

The Company intends to fund capital expenditures through cash flow from
operating activities or through operating leases if the latter are financially
attractive. Shortfalls, if any, will be financed through the Company's revolving
credit agreements or other borrowing arrangements.

Total debt outstanding at December 31, 1997 was $243.3 million, an increase of
$47.3 million from the $196.0 million outstanding at December 31, 1996. The net
increase in debt primarily relates to acquisitions by Brink's and BAX Global
during the year.

The Company has a $350.0 million credit agreement with a syndicate of banks (the
"Facility"). The Facility includes a $100.0 million term loan and also permits
additional borrowings, repayments and reborrowings of up to an aggregate of
$250.0 million. The maturity date of both the term loan and revolving credit
portion of the Facility is May 2001. Interest on borrowings under the Facility
is payable at rates based on prime, certificate of deposit, Eurodollar or money
market rates. At December 31, 1997 and 1996, borrowings of $100.0 million were
outstanding under the term loan portion of the Facility and $25.9 million and
$23.2 million, respectively, of additional borrowings were outstanding under the
remainder of the Facility.

In connection with its acquisition of Custravalca, the Company entered into a
borrowing arrangement with a syndicate of local Venezuelan banks. The borrowings
consisted of a long-term loan denominated in the local currency equivalent to
U.S. $40.0 million and a $10.0 million short-term loan denominated in U.S.
dollars which was repaid during 1997. The long-term loan bears interest based on
the Venezuelan prime rate and is payable in installments through the year 2000.
As of December 31, 1997, total borrowings under this arrangement were equivalent
to U.S. $35.9 million.

In July 1997, the Company repaid the $14.3 million 4% subordinated debentures
which were outstanding at December 31, 1996. Borrowings under the Facility were
used to make this payment.

Under the terms of the Facility, the Company has agreed to maintain at least
$400.0 million of Consolidated Net Worth, as defined, and can incur additional
indebtedness of approximately $610 million at December 31, 1997.

Off-balance Sheet Instruments

The Company enters into various off-balance sheet financial instruments, as
discussed below, to hedge its foreign currency and other market exposures. The
risk that counterparties to such instruments may be unable to perform is
minimized by limiting the counterparties to major financial institutions. The
Company does not expect any losses due to such counterparty default.

Foreign currency forward contracts The Company enters into foreign currency
forward contracts, from time to time, with a duration of up to two years as a
hedge against liabilities denominated in various currencies. These contracts
minimize the Company's exposure to exchange rate movements related to cash
requirements of foreign operations denominated in various currencies. At
December 31, 1997, the total notional value of foreign currency forward
contracts outstanding was $21.8 million. As of such date, the fair value of
foreign currency forward contracts approximated notional value.

Gold contracts In order to protect itself against downward movements in gold
prices, the Company hedges a portion of its share of gold sales from the Stawell
gold mine primarily through forward sales contracts. At December 31, 1997,
41,500 ounces of gold, representing approximately 19% of the Company's share of
Stawell's proven and probable reserves, were sold forward under forward sales
contracts that mature periodically through mid-1999. Because only a portion of
its future production is currently sold forward, the Company can take advantage
of increases and is exposed to decreases in the spot price of gold. At December
31, 1997, the fair value of the Company's forward sales contracts was not
significant.

Fuel contracts The Company has hedged a portion of its jet fuel and diesel fuel
requirements through several commodity option transactions that are intended to
protect against significant increases in jet fuel and diesel fuel prices. At
December 31, 1997, these transactions aggregated 33.3 million gallons for jet
fuel and 8.7 million gallons for diesel fuel and mature periodically throughout
1998. The fair value of these fuel hedge transactions may fluctuate over the
course of the contract period due to changes in the supply and demand for oil
and refined products. Thus, the economic gain or loss, if any, upon settlement
of the contracts may differ from the fair value of the contracts at an interim
date. At December 31, 1997, the fair value of these contracts was not
significant.

                                       31

Interest rate contracts--In connection with the aircraft leasing by BAX Global,
the Company has entered into an interest rate swap agreement. This variable to
fixed interest rate swap agreement has a notional value of $30.0 million which
fixes the Company's variable interest rate at 7.05% through January 2, 1998. At
December 31, 1997, the fair value of the contract was not significant.

The Company has two interest rate swap agreements which effectively convert a
portion of the interest on its $100 million variable rate term loan to fixed
rates. During 1995, the Company entered into an agreement, maturing in July
1998, which fixes the Company's interest rate at 5.80% on $20.0 million in face
amount of debt. During 1996, the Company entered into another variable to fixed
interest rate swap agreement, maturing in February 1998, which fixes the
Company's interest rate at 4.9% on an initial face amount of debt of $5.0
million. The notional amount increased by $5.0 million each quarter through the
first quarter of 1997. The notional amount outstanding at December 31, 1997 was
$20.0 million.

Readiness for Year 2000

The Company has taken actions to understand the nature and extent of work
required to make its systems, products, services and infrastructure Year 2000
compliant. The Company is currently preparing its financial, information and
other computer-based systems for the Year 2000, including replacing and/or
updating existing systems. The Company continues to evaluate the additional
estimated costs associated with these efforts, which it currently estimates to
be between $40-$45 million over the next two years. Based on actual experience
and available information, the Company believes that it will be able to manage
its Year 2000 transition without any material adverse effect on its business
operations, services or financial condition. However, if the applicable
modifications and conversions are not made, or are not completed on a timely
basis, the Year 2000 issue could have a material adverse impact on the
operations of the Company. Further, management is currently evaluating the
extent to which the Company's interface systems are vulnerable to its suppliers'
and consumers' failure to remediate their own Year 2000 issues as there is no
guarantee that the systems of other companies on which the Company's systems
rely will be timely and adequately converted.

Contingent Liabilities

Under the Coal Industry Retiree Health Benefit Act of 1992 (the "Health Benefit
Act"), the Company and its majority-owned subsidiaries at July 20, 1992,
including certain companies of the Brink's Group are jointly and severally
liable with certain companies of the Minerals Group and of the Burlington Group
for the costs of health care coverage provided for by that Act. For a
description of the Health Benefit Act and a calculation of certain of such
costs, see Note 14 to the Company's consolidated financial statements. At this
time, the Company expects the Minerals Group to generate sufficient cash flow to
discharge its obligations under the Act.

In April 1990, the Company entered into a settlement agreement to resolve
certain environmental claims against the Company arising from hydrocarbon
contamination at a petroleum terminal facility ("Tankport") in Jersey City, New
Jersey, which operations were sold in 1983. Under the settlement agreement, the
Company is obligated to pay 80% of the remediation costs. Based on data
available to the Company and its environmental consultants, the Company
estimates its portion of the cleanup costs on an undiscounted basis using
existing technologies to be between $6.6 million and $11.9 million over a period
of up to five years. Management is unable to determine that any amount within
that range is a better estimate due to a variety of uncertainties, which include
the extent of the contamination at the site, the permitted technologies for
remediation and the regulatory standards by which the cleanup will be conducted.
The clean-up estimates have been modified from prior years' in light of cost
inflation and certain assumptions the Company is making with respect to the end
use of the property. The estimate of costs and the timing of payments could
change as a result of changes to the remediation plan required, changes in the
technology available to treat the site, unforseen circumstances existing at the
site and additional cost inflation.

The Company commenced insurance coverage litigation in 1990, in the United
States District Court for the District of New Jersey, seeking a declaratory
judgment that all amounts payable by the Company pursuant to the Tankport
obligation were reimbursable under comprehensive general liability and pollution
liability policies maintained by the Company. In August 1995, the District Court
ruled on various Motions for Summary Judgment. In its decision, the Court found
favorably for the Company on several matters relating to the comprehensive
general liability policies but concluded that the pollution liability policies
did not contain pollution coverage for the types of claims associated with the
Tankport site. On appeal, the Third Circuit reversed the District Court and held
that the insurers could not deny coverage for the reasons stated by the District
Court, and the case was remanded to the District Court for trial. In the event
the parties are unable to settle the dispute, the case is scheduled to be tried
beginning September, 1998. Management and its outside legal counsel continue to
believe that recovery of a substantial portion of the cleanup costs will
ultimately be probable of realization. Accordingly, based on estimates of
potential liability, probable realization of insurance recoveries, related
developments of New Jersey law and the Third Circuit's decision, it is the
Company's belief that the ultimate amount that it would be liable for is
immaterial.

                                       32

Capitalization

The Company has three classes of common stock: Pittston Brink's Group Common
Stock ("Brink's Stock"), Pittston Burlington Group Common Stock ("Burlington
Stock") and Pittston Minerals Group Common Stock ("Minerals Stock") which were
designed to provide shareholders with separate securities reflecting the
performance of the Brink's Group, Burlington Group and Minerals Group,
respectively, without diminishing the benefits of remaining a single corporation
or precluding future transactions affecting any of the Groups. The Brink's Group
consists of the Brink's and BHS operations of the Company. The Burlington Group
consists of the BAX Global Inc. ("BAX Global") operations of the Company. The
Minerals Group consists of the Pittston Coal Company ("Coal Operations") and
Pittston Mineral Ventures ("Mineral Ventures") operations of the Company. The
Company prepares separate financial statements for the Brink's, Burlington and
Minerals Groups, in addition to consolidated financial information of the
Company.

The Company has the authority to issue up to 2,000,000 shares of preferred
stock, par value $10 per share. In January 1994 the Company issued $80.5 million
(161,000 shares) of Series C Cumulative Convertible Preferred Stock (the
"Convertible Preferred Stock"), convertible into Minerals Stock. The Convertible
Preferred Stock pays an annual cumulative dividend of $31.25 per share payable
quarterly, in cash, in arrears, out of all funds of the Company legally
available; therefore, when, as and if declared by the Board and bears a
liquidation preference of $500 per share, plus an attributed amount equal to
accrued and unpaid dividends thereon.

Under the share repurchase programs authorized by the Board of Directors (the
"Board"), the Company purchased shares in the periods presented as follows:

                                                        Years Ended December 31
(Dollars in millions)                                  1997                1996
- --------------------------------------------------------------------------------
                                                                  
Brink's Stock:
     Shares                                         166,000             278,000
     Cost                                          $    4.3                 6.9

Burlington Stock:
     Shares                                         332,300              75,600
     Cost                                          $    7.4                 1.4

Convertible Preferred Stock:
     Shares                                           1,515              20,920
     Cost                                          $    0.6                 7.9
     Excess carrying amount (a)                    $    0.1                 2.1
================================================================================

(a) The excess of the carrying amount of the Convertible Preferred Stock over
the cash paid to holders for repurchases made during the years. This amount is
deducted from preferred dividends in the Company's Statement of Operations.

In May 1997, the Board authorized an increase in the remaining repurchase
authority with respect to the Convertible Preferred Stock to $25.0 million,
leaving the Company the remaining authority to repurchase an additional $24.4
million of such stock. As of December 31, 1997, the Company had remaining
authority to purchase over time 1 million shares of Pittston Minerals Group
Common Stock; 1.1 million shares of Pittston Brink's Common Stock; 1.1 million
shares of Pittston Burlington Group Common Stock. The aggregate purchase price
limitation for all common stock was $24.9 million at December 31, 1997. The
authority to repurchase shares remains in effect in 1998.

As of December 31, 1997, debt as a percent of capitalization (total debt and
shareholders' equity) was 26%, compared with 24% at December 31, 1996. The
increase in the debt ratio since December 1996 was due to the 13% increase in
shareholders' equity compared to the 24% increase in total debt.

Dividends

The Board intends to declare and pay dividends, if any, on Brink's Stock,
Burlington Stock and Minerals Stock based on the earnings, financial condition,
cash flow and business requirements of the Brink's Group, Burlington Group and
the Minerals Group, respectively. Since the Company remains subject to Virginia
law limitations on dividends, losses by one Group could affect the Company's
ability to pay dividends in respect of stock relating to the other Group.
Dividends on Minerals Stock are also limited by the Available Minerals Dividend
Amount as defined in the Company's Articles of Incorporation. The Available
Minerals Dividend Amount may be reduced by activity that reduces shareholder's
equity or the fair value of net assets of the Minerals Group. Such activity
includes net losses by the Minerals Group, dividends paid on the Minerals Stock
and the Convertible Preferred Stock, repurchases of Minerals Stock and the
Convertible Preferred Stock, and foreign currency translation losses. At
December 31, 1997, the Available Minerals Dividend Amount was at least $15.2
million.

Since its distribution of Minerals Stock in 1993, the Company has paid a cash
dividend to its Minerals Stock shareholders at an annual rate of $0.65 per
share, despite a mixed record of earnings and cash flows for the Minerals Group.
The Company continues its focus on the financial and capital needs of the
Minerals Group companies and, as always, is considering all strategic uses of
available cash, including the dividend rate, with a view towards maximizing
long-term shareholder value.

During 1997 and 1996, the Board declared and the Company paid dividends of 10
cents per share, 65 cents per share and 24 cents per share of Brink's Stock,
Minerals Stock and Burlington Stock, respectively. At present, the annual
dividend rate for Brink's Stock is 10 cents per share, for Minerals Stock is 65
cents per share and for Burlington Stock is 24 cents per share.

                                       33

In 1997 and 1996, dividends paid on the Convertible Preferred Stock amounted to
$3.6 million and $3.8 million, respectively.

Accounting Changes

In 1997, the Company adopted Statement of Financial Accounting Standards
("SFAS") No. 128 "Earnings Per Share." SFAS No. 128 replaced the calculation of
primary and fully diluted net income per share with basic and diluted net income
per share (Note 8). Unlike primary net income per share, basic net income per
share excludes any dilutive effects of options, warrants and convertible
securities. Diluted net income per share is very similar to the previous fully
diluted net income per share. All prior-period net income per share data has
been restated to conform with the provisions of SFAS No. 128.

Pending Accounting Changes

The Company will implement the following new accounting standards.

Statement of Financial Accounting Standards ("SFAS") No. 130, "Reporting
Comprehensive Income", will be implemented in the first quarter of 1998. SFAS
No. 130 establishes standards for the reporting and display of comprehensive
income and its components in financial statements. Comprehensive income
generally represents all changes in shareholders' equity except those resulting
from investments by or distributions to shareholders. With the exception of
foreign currency translation adjustments, such changes are not significant to
the Company.

SFAS No. 131, "Disclosures about Segments of an Enterprise and Related
Information", will be implemented in the financial statements for the year ended
December 31, 1998. SFAS No. 131 requires publicly-held companies to report
financial and descriptive information about operating segments in financial
statements issued to shareholders for interim and annual periods. The SFAS also
requires additional disclosures with respect to products and services,
geographic areas of operation and major customers. The adoption of this SFAS is
not expected to have a material impact on the financial statements of the
Company.

Forward Looking Information

Certain of the matters discussed herein, including statements regarding the
expected outcome of 1998 first quarter results, BPI and information technology,
capital investment projections, the expected benefits from the ATI acquisition
and from BAX Global's continuous improvement program on financial results,
expectations with regard to future realizations on metallurgical coal and gold
sales and the readiness for Year 2000, involve forward looking information which
is subject to known and unknown risks, uncertainties, and contingencies which
could cause actual results, performance or achievements, to differ materially
from those which are anticipated. Such risks, uncertainties and contingencies,
many of which are beyond the control of the Company, include, but are not
limited to, overall economic and business conditions, the demand for the
Company's products, services, pricing and other competitive factors in the
industry, new government regulations, variations in costs or expenses, the
consummation and successful integration of the ATI acquisition, changes in the
scope of BPI and Year 2000 initiatives, delays or problems in the implementation
of Year 2000 initiatives by the Company and/or its suppliers and customers and
delays or problems in the design and implementation of BPI.

                                       34

Pittston Brink's Group

MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION

The financial statements of the Pittston Brink's Group (the "Brink's Group")
include the balance sheets, results of operations and cash flows of the Brink's,
Incorporated ("Brink's") and Brink's Home Security, Inc. ("BHS") operations of
The Pittston Company (the "Company"), and a portion of the Company's corporate
assets and liabilities and related transactions which are not separately
identified with operations of a specific segment. The Brink's Group's financial
statements are prepared using the amounts included in the Company's consolidated
financial statements. Corporate amounts reflected in these financial statements
are determined based upon methods which management believes to be a reasonable
and an equitable estimate of the cost attributable to the Brink's Group.

The Company provides holders of the Pittston Brink's Group Common Stock
("Brink's Stock") separate financial statements, financial reviews, descriptions
of business and other relevant information for the Brink's Group in addition to
consolidated financial information of the Company. Holders of Brink's Stock are
shareholders of the Company, which is responsible for all liabilities.
Therefore, financial developments affecting the Brink's Group, the Pittston
Burlington Group (the "Burlington Group") or the Pittston Minerals Group (the
"Minerals Group") that affect the Company's financial condition could affect the
results of operations and financial condition of each of the Groups.
Accordingly, the Company's consolidated financial statements must be read in
connection with the Brink's Group's financial statements.

The following discussion is a summary of the key factors management considers
necessary in reviewing the Brink's Group's results of operations, liquidity and
capital resources. This discussion must be read in conjunction with the
financial statements and related notes of the Brink's Group and the Company.

RESULTS OF OPERATIONS

                                                         Years Ended December 31
(In thousands)                              1997            1996            1995
- --------------------------------------------------------------------------------
                                                                
Operating revenues:
     Brink's                          $  921,851         754,011         659,459
     BHS                                 179,583         155,802         128,936
- --------------------------------------------------------------------------------
Total operating revenues              $1,101,434         909,813         788,395
================================================================================
Operating profit:
     Brink's                          $   81,591          56,823          42,738
     BHS                                  52,844          44,872          39,506
- --------------------------------------------------------------------------------
Segment operating profit                 134,435         101,695          82,244
General corporate expense                 (6,871)         (7,457)         (4,770)
- --------------------------------------------------------------------------------
Total operating profit                $  127,564          94,238          77,474
================================================================================

The Brink's Group's net income amounted to $73.6 million in 1997, compared with
the $59.7 million earned in 1996. Operating profit totaled $127.6 million, $33.3
million (35%) higher than the amount reported in 1996. Net income and operating
profit were favorably impacted by increased operating results generated by the
Brink's and BHS businesses, combined with lower general corporate expenses.
Total revenues of $1.1 billion amounted to a $191.6 million (21%) increase
compared to 1996, with Brink's accounting for $167.8 million of the increase and
BHS accounting for $23.8 million of the increase. Operating expenses and
selling, general and administrative expenses increased by $157.7 million (19%),
of which $142.5 million was attributable to Brink's and $15.8 million was
attributable to BHS. Net interest expense in 1997 of $8.7 million represented a
$9.6 million increase over the $0.9 million of net interest income in 1996. This
increase was due primarily to additional debt used to fund the acquisition of
Brink's Venezuelan subsidiary during the first quarter of 1997.

                                       35

The Brink's Group's net income amounted to $59.7 million in 1996, compared with
the $51.1 million earned in 1995. Operating profit totaled $94.2 million, $16.8
million (22%) higher than the amount reported in 1995. Net income and operating
profit were favorably impacted by improved operating results generated by the
Brink's and BHS businesses, partially offset by higher general corporate
expenses, of which approximately $1 million (pretax) related to the relocation
of the Company's headquarters to Richmond, Virginia. Total revenues of $909.8
million amounted to a $121.4 million (15%) increase compared to the 1995 total,
with Brink's increase accounting for $94.5 million and BHS's increase accounting
for $26.9 million. Operating expenses and selling, general and administrative
expenses increased by $106.2 million (15%) over the 1995 level, of which $82.0
million was incurred by Brink's and $21.5 million was incurred by BHS. Other net
expense increased $1.9 million to $5.4 million in 1996 primarily due to minority
interest related to the increase in ownership interest (from 46.5% to 50.5%) in
Brink's Colombian subsidiary.

Brink's

The following is a table of selected financial data for Brink's on a comparative
basis:

                                                         Years Ended December 31
(In thousands)                                      1997        1996        1995
================================================================================
                                                                
Operating revenues:
     North America (United States
          and Canada)                           $482,182     418,941     379,230
     Europe                                      146,464     128,848     124,151
     Latin America                               266,445     182,481     137,558
     Asia/Pacific                                 26,760      23,741      18,520
- --------------------------------------------------------------------------------
Total operating revenues                        $921,851     754,011     659,459
================================================================================
Operating expenses                               725,693     605,851     533,109
Selling, general and administrative              116,378      93,770      84,507
- --------------------------------------------------------------------------------
Total costs and expenses                         842,071     699,621     617,616
- --------------------------------------------------------------------------------
Other operating income, net                        1,811       2,433         895
- --------------------------------------------------------------------------------
Operating profit:
     North America (United States
          and Canada)                           $ 40,612      34,387      29,159
     Europe                                       10,039       4,734       5,491
     Latin America                                28,711      15,243       6,246
     Asia/Pacific                                  2,229       2,459       1,842
- --------------------------------------------------------------------------------
Total operating profit                          $ 81,591      56,823      42,738
================================================================================
Depreciation and amortization                   $ 30,758      24,293      21,844
================================================================================
Cash capital expenditures                       $ 45,234      32,149      22,415
================================================================================

Brink's worldwide consolidated revenues totaled $921.9 million in 1997 compared
to $754.0 million in 1996, a 22% increase. Brink's 1997 operating profit of
$81.6 million represented a 44% increase over the $56.8 million of operating
profit reported in 1996. Total costs and expenses in 1997 increased by $142.5
million (20%).

Revenues from North American operations increased $63.3 million (15%), to $482.2
million in 1997 from $418.9 million in 1996. North American operating profit
increased $6.2 million (18%) to $40.6 million in the current year from $34.4
million in 1996. The revenue and operating profit improvement for 1997 primarily
resulted from improved armored car operations, which includes ATM services, and
from improved money processing operations.

Revenues and operating profit from European operations in 1997 amounted to
$146.5 million and $10.0 million, respectively. These amounts represented
increases of $17.6 million (14%) and $5.3 million (112%) from 1996. The
improvement in revenues and operating profit in 1997 was due to stronger results
in most European countries, partially offset by lower results from the 38% owned
affiliate in France. In January 1998, Brink's purchased nearly all the remaining
shares of this affiliate for payments over three years aggregating approximately
U.S. $39 million. The initial payment made at closing of U.S. $8.8 million was
funded through the revolving credit portion of the Company's credit agreement
with a syndicate of banks.

In Latin America, revenues and operating profit increased 46% to $266.4 million
and 88% to $28.7 million, respectively, from 1996 to 1997. These increases were
primarily due to the consolidation of the results of Brink's Venezuelan
subsidiary, Custodia y Traslado de Valores, C.A. ("Custravalca"), where Brink's
increased its ownership from 15% to 61% in January 1997. However, non-operating
expenses, including net interest and minority interest expense net of foreign
translation gains associated with the acquisition, offset more than half of the
operating profit generated by Custravalca.

Revenues and operating profits from Asia/Pacific operations in 1997 were $26.8
million and $2.2 million, respectively, compared to $23.7 million and $2.5
million, respectively, in 1996.

Brink's 1996 consolidated operating profit of $56.8 million amounted to a $14.1
million (33%) increase over the $42.7 million operating profit recorded in 1995.
Revenues increased by $94.6 million to $754.0 million, 14% higher than the 1995
level. Total costs and expenses in 1996 increased by $82.0 million (13%).

Revenues from North American operations totaled $418.9 million in 1996, $39.7
million (10%) higher than the 1995 level. North American operating profit
amounted to $34.4 million, an increase of $5.2 million (18%) compared to the
$29.2 million recorded in 1995. The favorable change in operating profit was
largely attributable to improved results generated by the armored car business,
which includes ATM services, as well as higher earnings from money processing
operations.

                                       36

Revenues and operating profits from European operations were $128.8 million and
$4.7 million, respectively, in 1996. These amounts represented an increase of
$4.7 million (4%) and a decrease of $0.8 million (14%) from 1995. The decrease
in operating profits in 1996 was due to poor results in a few countries,
including Brink's then 38% owned affiliate in France.

In Latin America, revenues and operating profit increased $44.9 million (33%) to
$182.5 million and $9.0 million (144%) to $15.2 million, respectively, during
1996. These increases principally reflect the consolidation of Colombian
operations as a result of Brink's acquiring a majority ownership of that company
in the third quarter of 1995.

Revenues and operating profits from Asia/Pacific operations in 1996 were $23.7
million and $2.5 million, respectively, compared to $18.5 million and $1.8
million, respectively, in 1995.

BHS

The following is a table of selected financial data for BHS on a comparative
basis:

                                                        Years Ended December 31
(Dollars in thousands)                         1997          1996          1995
===============================================================================
                                                              
Operating revenues                        $ 179,583       155,802       128,936

Operating expenses                           89,312        81,324        66,575
Selling, general and administrative          37,427        29,606        22,855
- -------------------------------------------------------------------------------
Total costs and expenses                    126,739       110,930        89,430
- -------------------------------------------------------------------------------
Operating profit                          $  52,844        44,872        39,506
===============================================================================
Depreciation and amortization             $  30,344        30,115        22,408
===============================================================================
Cash capital expenditures                 $  70,927        61,522        47,256
===============================================================================
Annualized recurring revenues (a)         $ 154,718       128,106       107,707
===============================================================================
Number of subscribers:

     Beginning of period                    446,505       378,659       318,029
     Installations                          105,630        98,541        82,643
     Disconnects, net (b)                   (40,603)      (30,695)      (22,013)
- -------------------------------------------------------------------------------
End of period                               511,532       446,505       378,659
===============================================================================

(a) Annualized recurring revenues are calculated based on the number of
subscribers at period end multiplied by the average fee per subscriber received
in the last month of the period for monitoring, maintenance and related
services.

(b) Includes 4,281 of special limited service contracts for a large homeowners'
association that were discontinued as of December 31, 1997.

Revenues for BHS increased by $23.8 million (15%) to $179.6 million in 1997 from
$155.8 million in 1996. The increase in revenues was predominantly the result of
higher ongoing monitoring and service revenues caused by a 15% growth of the
subscriber base for the year, combined with higher average monitoring fees. As a
result of such growth, annualized recurring revenues at the end of 1997 grew 21%
over the amount in effect at the end of 1996. The increase in monitoring and
service revenues was offset, in part, by a slight decrease in total installation
revenue. While the number of new security system installations has increased in
1997, the revenue per installation has decreased due to continuing aggressive
installation pricing and marketing by competitors.

Operating profit of $52.8 million in 1997 represents an increase of $7.9 million
(18%) compared to the $44.9 million earned in 1996. Included in this increase is
a $8.9 million reduction in depreciation expense resulting from a change in
estimate (discussed below). Operating profit was favorably impacted by the
monitoring and servicing revenue increases mentioned above, partially offset by
increased account servicing and administrative expenses which were a consequence
of the larger subscriber base. In addition, operating profit was negatively
impacted by a $6.7 million increase in net installation and marketing costs
incurred and expensed. While these costs to obtain subscribers increased during
1997, the cash margins per subscriber generated from recurring revenues showed
improvement from those of 1996.

Revenues for BHS increased by $26.9 million (21%) to $155.8 million in 1996 from
$128.9 million in 1995. The increase in revenues was primarily from ongoing
monitoring and recurring revenues caused by the 18% growth in the subscriber
base. As a result of such growth, annualized recurring revenues at the end of
1996 grew 19% over the amount in effect at the end of 1995. Total installation
revenue in 1996 grew 15% over the 1995 amount due to the increased volume of
installations partially offset by a reduction in revenue per installation.
Revenue per installation decreased due to the competitive connection fee pricing
in the marketplace.

Operating profit of $44.9 million for 1996 represented an increase of $5.4
million (14%) compared to the $39.5 million earned in 1995. The increase in
operating profit largely stemmed from the growth in the subscriber base and
higher average monitoring and service revenues, somewhat offset by higher
depreciation and increased account servicing and administrative expenses, which
were also a consequence of the larger subscriber base. In addition, installation
and marketing costs incurred and expensed during the year increased by $1.0
million from the prior year. Cash margins per subscriber generated from
recurring revenues remained consistent between 1995 and 1996.

                                       37

It is BHS' policy to depreciate capitalized subscriber installation expenditures
over the estimated life of the security system based on subscriber retention
percentages. BHS initially developed its annual depreciation rate based on
information about subscriber retention which was available at the time. However,
accumulated historical data about actual subscriber retention has indicated that
approximately 50% of subscribers are still active after a period of ten years.
Therefore, in order to reflect the higher demonstrated retention of subscribers,
and to more accurately match depreciation expense with monthly recurring revenue
generated from active subscribers, beginning in the first quarter of 1997, BHS
prospectively adjusted its annual depreciation rate from 10 to 15 years for
capitalized subscriber installation costs. BHS will continue its practice of
charging the remaining net book value of all capitalized subscriber installation
expenditures to depreciation expense as soon as a system is identified for
disconnection. This change in estimate reduced depreciation expense for
capitalized installation costs in 1997 by $8.9 million.

As of January 1, 1992, BHS elected to capitalize categories of costs not
previously capitalized for home security installations to more accurately
reflect subscriber installation costs included as capitalized installation
costs, which added $4.9 million to operating profit in 1997 and $4.5 million in
both 1996 and 1995. The additional costs not previously capitalized consisted of
costs for installation labor and related benefits for supervisory, installation
scheduling, equipment testing and other support personnel (in the amount of $
2.6 million in 1997, $2.5 million in 1996 and $2.7 million in 1995) and costs
incurred in maintaining facilities and vehicles dedicated to the installation
process (in the amount of $2.3 million in 1997, $2.0 million in 1996 and $1.8
million in 1995). The increase in the amount capitalized, while adding to
current period profitability comparisons, defers recognition of expenses over
the estimated useful life of the installation. The additional subscriber
installation costs which are currently capitalized were expensed in prior years
for subscribers in those years. Because capitalized subscriber installation
costs for periods prior to January 1, 1992, were not adjusted for the change in
accounting principle, installation costs for subscribers in those years will
continue to be depreciated based on the lesser amounts capitalized in those
periods. Consequently, depreciation of capitalized subscriber installation costs
in the current year and until such capitalized costs prior to January 1, 1992,
are fully depreciated will be less than if such prior periods' capitalized costs
had been adjusted for the change in accounting. However, management believes the
effect on net income in 1997, 1996, and 1995 was immaterial. While the amounts
of the costs incurred which are capitalized vary based on current market and
operating conditions, the types of such costs which are currently capitalized
will not change. The change in the amount capitalized has no additional effect
on current or future cash flows or liquidity.

Foreign Operations

A portion of the Brink's Group financial results is derived from activities in
several foreign countries, each with a local currency other than the U.S.
dollar. Because the financial results of the Brink's Group are reported in U.S.
dollars, they are affected by the changes in the value of the various foreign
currencies in relation to the U.S. dollar. The Brink's Group's international
activity is not concentrated in any single currency, which limits the risks of
foreign currency rate fluctuations. In addition, these rate fluctuations may
adversely affect transactions which are denominated in currencies other than the
functional currency. The Brink's Group routinely enters into such transactions
in the normal course of its business. Although the diversity of its foreign
operations limits the risks associated with such transactions, the Company, on
behalf of the Brink's Group, from time to time, uses foreign currency forward
contracts to hedge the risks associated with such transactions. Realized and
unrealized gains and losses on these contracts are deferred and recognized as
part of the specific transaction hedged. In addition, translation adjustments
relating to operations in countries with highly inflationary economies are
included in net income, along with all transaction gains or losses for the
period. A subsidiary in Venezuela and an affiliate in Mexico operate in such
highly inflationary economies. Prior to January 1, 1998, the economy in Brazil,
in which the Brink's Group has a subsidiary, was considered highly inflationary.

The Brink's Group is also subject to other risks customarily associated with
doing business in foreign countries, including labor and economic conditions,
controls on repatriation of earnings and capital, nationalization, political
instability, expropriation and other forms of restrictive action by local
governments. The future effects, if any, of such risks on the Brink's Group
cannot be predicted.

Corporate Expenses

A portion of the Company's corporate general and administrative expenses and
other shared services has been allocated to the Brink's Group based upon
utilization and other methods and criteria which management believes to be an
equitable and a reasonable estimate of the cost attributable to the Brink's
Group. These attributions were $6.9 million in 1997, $7.5 million in 1996 and
$4.8 million in 1995.

Higher 1996 corporate expenses were primarily due to the relocation of the
Company's corporate headquarters to Richmond, Virginia, during September 1996.
The costs of this move, including moving expenses, employee relocation,
severance pay and temporary employee costs, amounted to $2.9 million.
Approximately $1 million of these costs were attributed to the Brink's Group.
The increase in the corporate expense allocation in 1996 and 1997 excluding the
1996 relocation costs is primarily due to a higher proportion of services
attributable to the Brink's Group as well as higher general corporate expenses.

                                       38

Corporate expenses for the first quarter of 1998 will reflect approximately $6
million related to payments or accruals being made pursuant to the retirement
agreement between the Company and Joseph C. Farrell, former Chairman, President
and Chief Executive Officer of the Company. Approximately $2.1 million of those
expenses will be attributed to the Brink's Group.

Other Operating Income, Net

Other net operating income decreased $0.6 million to $1.8 million in 1997 and
increased $1.5 million to $2.4 million in 1996. Other operating income
principally includes the equity earnings of Brink's foreign affiliates which
amounted to $1.5 million in 1997, $1.9 million in 1996 and $0.1 million in 1995.
The lower level of other operating income in 1995 as compared to 1997 and 1996
is primarily attributable to lower earnings from Brink's 20% owned affiliate in
Mexico during 1995.

Interest Income

Interest income was consistent between 1997 and 1996, but increased $0.9 million
to $2.7 million in 1996 from $1.8 million in 1995. That increase was primarily
attributable to increases in interest income earned on amounts owed by the
Minerals Group.

Interest Expense

Interest expense increased $9.7 million to $11.5 million in 1997 and decreased
$0.3 million to $1.8 million in 1996. The increase in 1997 was due to additional
debt, as well as higher average interest rates, related to the acquisition of
Custravalca in 1997.

Other Expense, Net

Other net expense, which principally includes foreign translation gains and
losses and minority interest expense or income, increased by $0.2 million to
$5.6 million in 1997 and increased by $1.9 million to $5.4 million in 1996. The
higher level of expense in 1997 and 1996 reflects an increase in minority
interest expense, resulting from the consolidation of the now 51% owned Brink's
Colombia (in the third quarter of 1995) and of the now 61% owned Custravalca
(early 1997). These increases were partially offset by minority interest income,
the result of losses incurred by international start-up operations.

Income Taxes

The provision for income taxes was 35% in 1997, 33% in 1996 and 31% in 1995. The
rates in 1996 and 1995 were lower than the statutory federal income tax rate of
35% due to lower taxes on foreign income partially offset by additional
provisions for state income taxes.

FINANCIAL CONDITION

A portion of the Company's corporate assets and liabilities has been attributed
to the Brink's Group based upon utilization of the shared services from which
assets and liabilities are generated. Management believes this attribution to be
an equitable and a reasonable estimate of the cost attributable to the Brink's
Group.

Corporate assets which were allocated to the Brink's Group consisted primarily
of pension assets and deferred income taxes and amounted to $58.2 million and
$60.8 million at December 31, 1997 and 1996, respectively.

Cash Flow Requirements

Cash provided by operating activities totaled $147.0 million in 1997, an
increase of $33.3 million over 1996. The increase in cash flow primarily
reflects the Group's higher net income, which included higher amounts for
depreciation and amortization and other non-cash charges, partially attributable
to the acquisition of Custravalca in January 1997. Cash generated from operating
activities was not sufficient to fund investing activities, which primarily
consisted of capital expenditures and the acquisition of Custravalca. As a
result of these items and funds used for share activities, the Group increased
net cash borrowings (net of repayments made to the Minerals Group) by $41.4
million. The combination of these activities increased cash and cash equivalents
by $17.7 million.

Capital Expenditures

Cash capital expenditures for 1997 totaled $116.3 million, of which $70.9
million was spent by BHS and $45.2 million was spent by Brink's. Cash capital
expenditures totaled $95.8 million in 1996. Additional expenditures financed
through capital leases amounted to $3.9 million and $1.9 million in 1997 and
1996, respectively. In 1997, $65 million (56%) of the Brink's Group's total cash
capital expenditures was attributable to BHS customer installations, principally
reflecting expansion of the subscriber base. Capital expenditures made by
Brink's during 1997 were primarily for expansion, replacement or maintenance of
ongoing business operations.

Cash capital expenditures in 1998 are currently expected to approximate $140
million, approximately $24 million higher than the 1997 level of expenditures.
The increase is expected to result largely from expenditures at BHS, reflecting
continued growth of the subscriber base and at Brink's for expansion of North
America and international operations.

Financing

The Brink's Group intends to fund cash capital expenditures through cash flow
from operating activities. Shortfalls, if any, will be financed through the
Company's revolving credit agreements, other borrowing arrangements or
repayments from the Minerals Group.

Total debt outstanding at December 31, 1997 was $55.3 million, $45.9 million
higher than the $9.4 million at December 31, 1996. The increase in debt is
largely attributable to additional borrowings associated with the acquisition of
Custravalca.

The Company has a $350.0 million credit agreement with a syndicate of banks (the
"Facility"). The Facility includes a $100.0 million term loan and permits
additional borrowings, repayments and reborrowings of up to an aggregate of
$250.0 million. The

                                       39

maturity date of both the term loan and the revolving credit portion of the
Facility is May 2001. Interest on borrowings under the Facility is payable at
rates based on prime, certificate of deposit, Eurodollar or money market rates.
As of December 31, 1997 and 1996, borrowings of $100.0 million were outstanding
under the term loan and $25.9 million and $23.2 million, respectively, of
additional borrowings were outstanding under the remainder of the Facility. No
portion of the total amount outstanding under the Facility at December 31, 1997
or at December 31, 1996 was attributed to the Brink's Group.

Under the terms of the Facility, the Company has agreed to maintain at least
$400.0 million of Consolidated Net Worth, as defined, and can incur additional
indebtedness of approximately $610 million at December 31, 1997.

In connection with its acquisition of Custravalca, Brink's entered into a
borrowing arrangement with a syndicate of local Venezuelan banks. The borrowings
consisted of a long-term loan denominated in the local currency equivalent to
U.S. $40.0 million and a $10.0 million short-term loan denominated in
U.S. dollars which was repaid during 1997. The long-term loan bears interest
based on the Venezuelan prime rate and is payable in installments through
the year 2000. As of December 31, 1997, total borrowings under this
arrangement were equivalent to U.S. $35.9 million.

Related Party Transactions

At December 31, 1997, under an interest bearing borrowing arrangement, the
Minerals Group owed the Brink's Group $27.0 million, an increase of $3.0 million
from the $24.0 million owed at December 31, 1996.

At December 31, 1997 and 1996, the Brink's Group owed the Minerals Group $19.4
million and $18.8 million, respectively, for tax payments representing the
Minerals Group's tax benefits utilized by Brink's Group in accordance with the
Company's tax sharing policy, of which $19.0 million is expected to be paid
within one year. The Brink's Group paid the Minerals Group $15.8 million for the
utilization of such tax benefits during 1997.

Readiness for Year 2000

The Brink's Group has taken actions to understand the nature and extent of work
required to make its systems, services and infrastructure Year 2000 compliant.
The Brink's Group is currently preparing its financial, information and other
computer-based systems for the Year 2000, including replacing and/or updating
existing systems. As these efforts progress, the Brink's Group continues to
evaluate the associated costs. Based upon its most recent estimates and its
anticipated capital spending, the Brink's Group does not anticipate that it will
incur any material costs in preparing for the Year 2000. The Brink's Group
believes, based on available information, that it will be able to manage its
Year 2000 transition without material adverse effect on its business operations,
services or financial condition. However, if the applicable modifications and
conversions are not made, or are not completed on a timely basis, the Year 2000
issue could have a material adverse impact on the operations of the Brink's
Group. Further, management is currently evaluating the extent to which the
Brink's Group's interface systems are vulnerable to its suppliers' and
customers' failure to remediate their own Year 2000 issues as there is no
guarantee that the systems of other companies on which the Brink's Group's
systems rely will be timely and adequately converted.

Contingent Liabilities

Under the Coal Industry Retiree Health Benefit Act of 1992 (the "Health Benefit
Act"), the Company and its majority-owned subsidiaries at July 20, 1992,
including certain companies of the Brink's Group are jointly and severally
liable with certain companies of the Minerals Group and of the Burlington Group
for the costs of health care coverage provided for by that Act. For a
description of the Health Benefit Act and a calculation of certain of such
costs, see Note 14 to the Company's consolidated financial statements. At this
time, the Company expects the Minerals Group to generate sufficient cash flow to
discharge its obligations under the Act.

In April 1990, the Company entered into a settlement agreement to resolve
certain environmental claims against the Company arising from hydrocarbon
contamination at a petroleum terminal facility ("Tankport") in Jersey City, New
Jersey, which operations were sold in 1983. Under the settlement agreement, the
Company is obligated to pay 80% of the remediation costs. Based on data
available to the Company and its environmental consultants, the Company
estimates its portion of the cleanup costs on an undiscounted basis using
existing technologies to be between $6.6 million and $11.9 million over a period
of up to five years. Management is unable to determine that any amount within
that range is a better estimate due to a variety of uncertainties, which include
the extent of the contamination at the site, the permitted technologies for
remediation and the regulatory standards by which the cleanup will be conducted.
The clean-up estimates have been modified from prior years' in light of cost
inflation and certain assumptions the Company is making with respect to the end
use of the property. The estimate of costs and the timing of payments could
change as a result of changes to the remediation plan required, changes in the
technology available to treat the site, unforseen circumstances existing at the
site and additional cost inflation.

                                       40

The Company commenced insurance coverage litigation in 1990, in the United
States District Court for the District of New Jersey, seeking a declaratory
judgment that all amounts payable by the Company pursuant to the Tankport
obligation were reimbursable under comprehensive general liability and pollution
liability policies maintained by the Company. In August 1995, the District Court
ruled on various Motions for Summary Judgment. In its decision, the Court found
favorably for the Company on several matters relating to the comprehensive
general liability policies but concluded that the pollution liability policies
did not contain pollution coverage for the types of claims associated with the
Tankport site. On appeal, the Third Circuit reversed the District Court and held
that the insurers could not deny coverage for the reasons stated by the District
Court, and the case was remanded to the District Court for trial. In the event
the parties are unable to settle the dispute, the case is scheduled to be tried
beginning September, 1998. Management and its outside legal counsel continue to
believe that recovery of a substantial portion of the cleanup costs will
ultimately be probable of realization. Accordingly, based on estimates of
potential liability, probable realization of insurance recoveries, related
developments of New Jersey law and the Third Circuit's decision, it is the
Company's belief that the ultimate amount that it would be liable for is
immaterial.

Capitalization

The Company has three classes of common stock: Brink's Stock, Pittston
Burlington Group Common Stock ("Burlington Stock") and Pittston Minerals Group
Common Stock ("Minerals Stock") which were designed to provide shareholders with
separate securities reflecting the performance of the Brink's Group, Burlington
Group and Minerals Group, respectively, without diminishing the benefits of
remaining a single corporation or precluding future transactions affecting any
of the Groups. The Brink's Group consists of the Brink's and BHS operations of
the Company. The Burlington Group consists of the BAX Global Inc. ("BAX Global")
operations of the Company. The Minerals Group consists of the Pittston Coal
Company ("Coal Operations") and Pittston Mineral Ventures ("Mineral Ventures")
operations of the Company. The Company prepares separate financial statements
for the Brink's, Burlington and Minerals Groups, in addition to consolidated
financial information of the Company.

The Company has the authority to issue up to 2,000,000 shares of preferred
stock, par value $10 per share. In January 1994, the Company issued $80.5
million (161,000 shares) of Series C Cumulative Convertible Preferred Stock (the
"Convertible Preferred Stock"), convertible into Minerals Stock. The Convertible
Preferred Stock, which is attributable to the Minerals Group, pays an annual
cumulative dividend of $31.25 per share payable quarterly, in cash, in arrears,
out of all funds of the Company legally available; therefore, when, as and if
declared by the Board and bears a liquidation preference of $500 per share, plus
an attributed amount equal to accrued and unpaid dividends thereon.

Under the share repurchase programs authorized by the Board of Directors of the
Company (the "Board"), the Company purchased shares in the periods presented as
follows:

                                                        Years Ended December 31
(Dollars in millions)                                  1997                1996
- -------------------------------------------------------------------------------
                                                                 
Brink's Stock:
     Shares                                         166,000             278,000
     Cost                                          $    4.3                 6.9

Convertible Preferred Stock:
     Shares                                           1,515              20,920
     Cost                                          $    0.6                 7.9
     Excess carrying amount (a)                    $    0.1                 2.1
===============================================================================

(a) The excess of the carrying amount of the Convertible Preferred Stock over
the cash paid to holders for repurchases made during the years which is deducted
from preferred dividends in the Company's Statement of Operations.

In May 1997, the Board authorized an increase in the remaining repurchasing
authority with respect to the Convertible Preferred Stock to $25.0 million,
leaving the Company the remaining authority to repurchase an additional $24.4
million of such stock at December 31, 1997. As of December 31, 1997, the Company
had remaining authority to purchase over time 1.1 million shares of Pittston
Brink's Common Stock. The aggregate purchase price limitation for all common
stock was $24.9 million at December 31, 1997. The authority to repurchase shares
remains in effect in 1998.

Dividends

The Board intends to declare and pay dividends, if any, on Brink's Stock based
on the earnings, financial condition, cash flow and business requirements of the
Brink's Group. Since the Company remains subject to Virginia law limitations on
dividends, losses by the Minerals Group or the Burlington Group could affect the
Company's ability to pay dividends in respect of stock relating to the Brink's
Group.

During 1997 and 1996, the Board declared and the Company paid dividends on
Brink's Stock of 10 cents per share.

In 1997 and 1996, dividends paid on the Convertible Preferred Stock were $3.6
million and $3.8 million, respectively.

                                       41

Accounting Changes

In 1997, the Company adopted Statement of Financial Accounting Standards
("SFAS") No. 128 "Earnings Per Share." SFAS No. 128 replaced the calculation of
primary and fully diluted net income per share with basic and diluted net income
per share (Note 10). Unlike primary net income per share, basic net income per
share excludes any dilutive effects of options, warrants and convertible
securities. Diluted net income per share is very similar to the previous fully
diluted net income per share. All prior-period net income per share data has
been restated to conform with the provisions of SFAS No. 128.

Pending Accounting Changes

The Brink's Group will implement the following new accounting standards.

Statement of Financial Accounting Standards ("SFAS") No. 130, "Reporting
Comprehensive Income", will be implemented in the first quarter of 1998. SFAS
No. 130 establishes standards for the reporting and display of comprehensive
income and its components in financial statements. Comprehensive income
generally represents all changes in shareholders' equity except those resulting
from investments by or distributions to shareholders. With the exception of
foreign currency translation adjustments, such changes are not significant to
the Brink's Group.

SFAS No. 131, "Disclosures about Segments of an Enterprise and Related
Information", will be implemented in the financial statements for the year ended
December 31, 1998. SFAS No. 131 requires publicly-held companies to report
financial and descriptive information about operating segments in financial
statements issued to shareholders for interim and annual periods. The SFAS also
requires additional disclosures with respect to products and services,
geographic areas of operation and major customers. The adoption of this SFAS is
not expected to have a material impact on the financial statements of the
Brink's Group.

Forward Looking Information

Certain of the matters discussed herein, including statements regarding the
readiness for Year 2000, involve forward looking information which is subject to
known and unknown risks, uncertainties, and contingencies which could cause
actual results, performance or achievements to differ materially from those
which are anticipated. Such risks, uncertainties and contingencies, many of
which are beyond the control of the Brink's Group and the Company, include, but
are not limited to, overall economic and business conditions, the demand for the
Brink's Group's services, pricing and other competitive factors in the industry,
new government regulations, changes in the scope of Year 2000 initiatives and
delays or problems in the implementation of Year 2000 initiatives by the Brink's
Group and/or its suppliers and customers.

                                       42

Pittston Burlington Group

MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION

The financial statements of the Pittston Burlington Group (the "Burlington
Group") include the balance sheets, results of operations and cash flows of BAX
Global Inc. ("BAX Global" ) operations of The Pittston Company (the "Company")
and a portion of the Company's corporate assets and liabilities and related
transactions which are not separately identified with operations of a specific
segment. The Burlington Group's financial statements are prepared using the
amounts included in the Company's consolidated financial statements. Corporate
amounts reflected in these financial statements are determined based upon
methods which management believes to be a reasonable and an equitable estimate
of cost attributable to the Burlington Group.

The Company provides holders of the Pittston Burlington Group Common Stock
("Burlington Stock") separate financial statements, financial reviews,
descriptions of business and other relevant information for the Burlington Group
in addition to consolidated financial information of the Company. Holders of
Burlington Stock are shareholders of the Company, which continues to be
responsible for all liabilities. Therefore, financial developments affecting the
Burlington Group, the Pittston Brink's Group (the "Brink's Group") or the
Pittston Minerals Group (the "Minerals Group") that affect the Company's
financial condition could affect the results of operations and financial
condition of each of the Groups. Accordingly, the Company's consolidated
financial statements must be read in connection with the Burlington Group's
financial statements.

The following discussion is a summary of the key factors management considers
necessary in reviewing the Burlington Group's results of operations, liquidity
and capital resources. This discussion must be read in conjunction with the
financial statements and related notes of the Burlington Group and the Company.

RESULTS OF OPERATIONS

                                                        Years Ended December 31
(In thousands)                             1997            1996            1995
- -------------------------------------------------------------------------------
                                                            
Operating revenues:
     BAX Global                      $1,662,338       1,484,869       1,403,195
===============================================================================
Operating profit:
     BAX Global                      $   63,264          64,604          58,723
     General corporate expense           (6,859)         (7,433)         (4,770)
- -------------------------------------------------------------------------------
Operating profit                     $   56,405          57,171          53,953
===============================================================================

Net income for the Burlington Group for 1997 was $32.3 million, including a
$12.5 million pre-tax charge ($7.9 million after-tax) related to consulting
expenses for the redesign of BAX Global's business processes and new information
systems architecture, compared with $33.8 million for 1996. Operating profit for
1997, after the $12.5 million charge, totaled $56.4 million compared with $57.2
million in 1996. Net income and operating profit in 1997 benefited from
substantial additional volumes of freight directed to BAX Global during a
Teamsters' strike against United Parcel Service (the "UPS Strike") in the third
quarter of 1997, which added an estimated $2.6 million to operating profit and
$1.6 million to net income. Revenues for 1997 increased $177.5 million to $1.7
billion as compared with 1996. Operating expenses and selling, general and
administrative expenses for 1997 increased $179.2 million to $1.6 billion.

Net income for the Burlington Group for 1996 was $33.8 million, compared with
$32.9 million in 1995. Operating profit totaled $57.2 million in 1996, compared
with $54.0 million in 1995. Results for 1996 were impacted by higher general
corporate expenses, of which approximately $1 million (pretax) related to the
relocation of the Company's corporate headquarters to Richmond, Virginia.
Revenues increased $81.7 million or 6% during 1996 as compared with the prior
year. Operating expenses and selling, general and administrative expenses for
1996 increased $77.2 million or 6% over the 1995 level.

                                       43

BAX Global Inc.

The following is a table of selected financial data for BAX Global on a
comparative basis:

(Dollars in thousands - except per                     Years Ended December 31
pound/shipment amounts)                        1997         1996          1995
==============================================================================
                                                             
Operating revenues:
     Intra-U.S.:
     Expedited freight services          $  620,839      547,647       528,174
     Other                                    7,579        6,906         6,917
- ------------------------------------------------------------------------------
Total Intra-U.S                             628,418      554,553       535,091
International:
     Expedited freight services             784,730      713,834       698,624
     Customs clearances                     124,145      120,438       103,509
     Ocean and other                        125,045       96,044        65,971
- ------------------------------------------------------------------------------
Total International                       1,033,920      930,316       868,104
- ------------------------------------------------------------------------------
Total operating revenues                  1,662,338    1,484,869     1,403,195
Operating expenses                        1,455,336    1,301,974     1,234,095
Selling, general and administrative         146,245      119,821       113,210
- ------------------------------------------------------------------------------
Total costs and expenses                  1,601,581    1,421,795     1,347,305
- ------------------------------------------------------------------------------
Other operating income, net                   2,507        1,530         2,833
- ------------------------------------------------------------------------------
Operating profit:
     Intra-U.S                               36,858       36,143        30,416
     International                           38,906       28,461        28,307
     Other(a)                               (12,500)

Total operating profit                   $   63,264       64,604        58,723
==============================================================================
Depreciation and amortization            $   29,667       23,254        19,856
==============================================================================
Cash capital expenditures                $   30,955       59,238        32,288
==============================================================================
Expedited freight services shipment
     growth rate (b)                           12.0%         1.3%          6.2%
Expedited freight services weight
     growth rate (b):
     Intra-U.S                                  8.7%         3.3%         (3.8%)
     International                              9.0%         2.5%         29.1%
     Worldwide                                  8.9%         2.9%         11.3%
Expedited freight services weight
     (million pounds)                       1,556.6      1,430.0       1,390.2
==============================================================================
Expedited freight services shipments
     (thousands)                              5,798        5,179         5,112
==============================================================================
Expedited freight services average:
     Yield (revenue per pound)           $    0.903        0.882         0.882
     Revenue per shipment                $      242          244           240
     Weight per shipment (pounds)               268          276           272
==============================================================================

(a) Consulting expenses related to the redesign of BAX Global's business
processes and information systems architecture of which $4.75 million and $7.75
million were attributed to Intra-U.S. and International operations,
respectively. These expenses are included in selling, general and administrative
expenses.

(b) Compared to the same period in the prior year.

BAX Global's operating profit, including the $12.5 million charge, amounted to
$63.3 million in 1997, a decrease of $1.3 million (2%) from the level achieved
in 1996. Worldwide revenues increased by 12% to $1.7 billion from $1.5 billion
in 1996. The $177.5 million growth in revenues reflects a 9% increase in
worldwide expedited freight services pounds shipped, which reached 1,556.6
million pounds in 1997, combined with a 2% increase in yield on this volume. In
addition, non-expedited freight services revenues increased $33.4 million (15%)
during 1997 as compared to 1996. Worldwide expenses in 1997 which include the
$12.5 million charge, amounted to $1.6 billion, $179.8 million (13%) higher than
1996.

In 1997, BAX Global's intra-U.S. revenues increased from $554.6 million to
$628.4 million. This $73.8 million (13%) increase was primarily due to an
increase of $73.2 million in intra-U.S. expedited freight services revenues. The
higher level of expedited freight services revenue in 1997 resulted from a 9%
increase in weight shipped coupled with a 4% increase in the average yield. The
increase in average yield was the combination of higher average pricing (both
overnight and second day freight). The higher average pricing was due, in large
part, to the effects of the UPS Strike and to an intra-U.S. shipment surcharge
which was initiated in September 1996 to offset various cost increases. In
addition, the average revenue per shipment and the average weight per shipment
decreased as a result of the UPS Strike since, the additional volume, on
average, consisted of a large number of smaller shipments. Excluding the
estimated effects of the UPS Strike, both of these averages increased over 1996.
Intra-U.S. operating profit during 1997, excluding any impact of the
aforementioned $12.5 million charge, increased $0.7 million from the $36.1
million recorded in 1996. Intra-U.S. operating profit in 1996 benefited from the
reduction in Federal excise tax liabilities while 1997 was favorably impacted by
the UPS Strike. However, the estimated $2.6 million operating profit benefit
from the UPS Strike was more than offset by higher transportation expenses
associated with additional capacity designed to improve on-time customer service
and to meet the rising demand in some of BAX Global's high growth markets.

International revenues in 1997 increased $103.6 million (11%) to $1,033.9
million from the $930.3 million recorded in 1996. International expedited
freight services revenue increased $70.9 million (10%) due to a 9% increase in
weight shipped combined with a 1% increase in the average yield. The increase in
the average yield on international expedited freight is primarily due to the
fuel surcharge implemented by BAX Global in March 1997 in reaction to a
corresponding surcharge implemented by its third party transportation providers.
International non-expedited freight services revenue increased $32.7 million
(15%) in 1997 as compared to 1996. The higher revenues relate to increases in
international logistics management services, primarily the result

                                       44

of the Cleton acquisition (discussed below), and the continued expansion of
ocean freight services. International operating profit in 1997, excluding any
impact of the aforementioned $12.5 million charge, increased $10.4 million (37%)
from the $28.5 million recorded in 1996. Operating profit during 1997 benefited
from the increased revenues combined with improved margins on U.S. exports.

Operating results for the first quarter of 1998 are expected to be below those
of the comparable 1997 quarter. While volume to date in the 1998 quarter has
increased from that of the comparable 1997 period, transportation expenses are
continuing at higher levels over those in the comparable 1997 period. These
results for the first quarter are being impacted by a combination of factors
including service disruptions resulting from weather delays, equipment problems,
incremental information technology expenditures, including Year 2000 and a
softened export market due, in part, to the financial situation in Asia.

BAX Global operating profit in 1996 amounted to $64.6 million, an increase of
$5.9 million (10%) from the $58.7 million reported in 1995. Worldwide revenues
in 1996 increased 6% to $1.5 billion from $1.4 billion in 1995. The $81.7
million growth in revenues principally reflects a 3% increase in worldwide
expedited freight services pounds shipped, which reached 1,430.0 million pounds
in 1996. In addition, non-expedited freight services revenues increased $47.0
million (27%) during 1996 as compared to 1995. Worldwide expenses in 1996
amounted to $1.4 billion, $74.5 million (6%) higher than 1995.

In 1996, BAX Global's intra-U.S. revenues increased from $535.1 million to
$554.6 million. This $19.5 million (4%) increase was due to a corresponding
increase of $19.5 million in intra-U.S. expedited freight services revenues. The
higher level of expedited freight services revenue in 1996 primarily resulted
from a 3% increase in weight shipped. The average yield on this volume remained
essentially unchanged in 1996 as compared to 1995 due to lower average pricing
and sales mix for BAX Global's overnight service, offset by the initiation of a
surcharge in September 1996 on all domestic shipments. Intra-U.S. operating
profit in 1996 increased 19% from $30.4 million in 1995 to $36.1 million in
1996. The increase in operating profit reflects higher volume and lower average
transportation costs (primarily the benefit of reduced Federal excise tax
liabilities prior to re-instatement of such tax in August 1996), partially
offset by higher fuel costs.

International revenues in 1996 increased $62.2 million (7%) to $930.3 million
from the $868.1 million recorded in 1995. International expedited freight
services revenues increased $15.2 million (2%) due to a 3% increase in weight
shipped, offset partially by a slightly lower average yield. In addition,
international non-expedited freight services revenue increased $47.0 million
(28%) in 1996 as compared to 1995. The increase is primarily due to an increase
in customs clearance and an expansion of ocean freight services. International
operating profit in 1996 amounted to $28.5 million essentially unchanged from
the $28.3 million recorded in 1995. Operating profit during 1996, primarily
reflects improved operating margins on U.S. exports and ocean freight services.
However, these improvements were offset, in large part, by added costs related
to the expansion of ocean and logistics operations and further investments to
strengthen BAX Global's worldwide network including quality improvements in
global systems, facilities and acquisitions.

In June 1997, BAX Global completed its acquisition of Cleton & Co.
("Cleton"), a leading logistics provider in the Netherlands. BAX Global
acquired Cleton for the equivalent of U.S. $10.7 million, and the
initial assumption of the equivalent of U.S. $10.0 million of debt of
which approximately U.S. $6.0 million was outstanding at December 31,
1997. Additional contingent payments ranging from the current
equivalent of U.S. $0 to U.S. $18.0 million will be paid over the next
three years based on certain performance criteria of Cleton.

In February 1998, BAX Global signed an agreement to acquire, subject to
regulatory and judicial approvals and other conditions to closing, the privately
held Air Transport International LLC ("ATI") for a purchase price approximating
$25-28 million, subject to possible adjustments. ATI is a U.S.-based freight and
passenger airline which operates a certificated fleet of DC-8 aircraft providing
services to BAX Global and other customers. The ATI acquisition is part of BAX
Global's strategy to improve the quality of its service offerings for its
customers by increasing its control over flight operations. As a result of this
agreement, BAX Global is suspending its efforts to start up its own certificated
airline carrier operations.

During 1997, BAX Global began a BAX Process Innovation ("BPI") Program which was
comprised of an extensive review of all aspects of the company's operations.
Senior management from around the world, working with a major consulting firm,
reviewed all areas of the business including sales, operations, finance,
logistics and information technology. BPI detailed improvements in its worldwide
business through development of information systems that are intended to enhance
productivity and improve the company's competitive position.

In 1998, BAX Global initiated a commitment for BPI of approximately $50 million
over the next six to nine months. As more details of this plan are being
developed, BPI will be integrated with BAX Global's continuous improvement
program. BAX Global now anticipates spending approximately $120 million

                                       45

(including the aforementioned $50 million) on information technology systems
during 1998 and 1999 which will include substantial improvements to its
information systems, annual recurring capital costs and spending for Year 2000
compliance issues. These expenditures are expected to occur equally between the
two years, with approximately one-third expected to be expensed as incurred
while the remainder will be capitalized.

Foreign Operations

A portion of the Burlington Group's financial results is derived from activities
in several foreign countries, each with a local currency other than the U.S.
dollar. Because the financial results of the Burlington Group are reported in
U.S. dollars, they are affected by the changes in the value of the various
foreign currencies in relation to the U.S. dollar. The Burlington Group's
international activity is not concentrated in any single currency, which limits
the risks of foreign currency rate fluctuations. In addition, these rate
fluctuations may adversely affect transactions which are denominated in
currencies other than the functional currency. The Burlington Group routinely
enters into such transactions in the normal course of its business. Although the
diversity of its foreign operations limits the risks associated with such
transactions, the Company, on behalf of the Burlington Group, uses foreign
currency forward contracts to hedge the risks associated with such transactions.
Realized and unrealized gains and losses on these contracts are deferred and
recognized as part of the specific transaction hedged. In addition, translation
adjustments relating to operations in countries with highly inflationary
economies are included in net income, along with all transaction gains or losses
for the period. A subsidiary in Mexico operates in such a highly inflationary
economy. Prior to January 1, 1998, the economy in Brazil, in which the
Burlington Group has a subsidiary, was considered highly inflationary.

The Burlington Group is also subject to other risks customarily associated with
doing business in foreign countries, including labor and economic conditions,
controls on repatriation of earnings and capital, nationalization, political
instability, expropriation and other forms of restrictive action by local
governments. The future effects, if any, of such risks on the Burlington Group
cannot be predicted.

Corporate Expenses

A portion of the Company's corporate general and administrative expenses and
other shared services has been allocated to the Burlington Group based upon
utilization and other methods and criteria which management believes to be an
equitable and a reasonable estimate of the costs attributable to the Burlington
Group. These attributions were $6.9 million, $7.4 million and $4.8 million in
1997, 1996 and 1995, respectively.

Higher 1996 corporate expenses were primarily due to the relocation of the
Company's corporate headquarters to Richmond, Virginia, during September 1996.
The costs of this move, including moving expenses, employee relocation,
severance pay and temporary employee costs, amounted to $2.9 million.
Approximately $1 million of these costs were attributed to the Burlington Group.
The increase in the corporate expense allocation in 1996 and 1997 excluding the
1996 relocation costs is primarily due to a higher proportion of services
attributable to the Burlington Group as well as higher general corporate
expenses.

Corporate expenses for the first quarter of 1998 will reflect approximately $6
million related to payments or accruals being made pursuant to the retirement
agreement between the Company and Joseph C. Farrell, former Chairman, President
and Chief Executive Officer of the Company. Approximately $2.1 million of those
expenses will be attributed to the Burlington Group.

Other Operating Income, Net

Other net operating income increased $1.0 million in 1997 to $2.5 million and
decreased $1.3 million to $1.5 million in 1996 from $2.8 million in 1995. Other
operating income principally includes foreign exchange transaction gains and
losses, and the changes for the comparable periods are due to normal
fluctuations in such gains and losses.

Interest Income

Interest income decreased $1.7 million to $0.8 million in 1997 from $2.5 million
in 1996, which was $1.9 million lower than the $4.4 million level in 1995. The
decreases in both years are primarily attributed to decreased interest income
earned on lower average amounts owed by the Minerals Group.

Interest Expense

Interest expense for 1997 increased $1.1 million to $5.2 million and decreased
$1.0 million in 1996 to $4.1 million from $5.1 million in 1995. The fluctuation
in the level of interest in 1997, 1996 and 1995 is primarily due to fluctuations
in the average borrowings, a significant portion of which resulted from the
Burlington Group's expansion of international operations.

Other Expense, Net

In 1997, other net expense decreased by $1.3 million to $0.7 million. In 1996,
other net expense increased $0.3 million to $2.0 million as compared to 1995.
Other net expense in 1996 includes a loss for the termination of an overseas
sublease agreement by BAX Global.

                                       46

Income Taxes

The provision for income taxes was 37% in 1997 and 1996 and 36% in 1995. These
rates exceeded the statutory federal income tax rate of 35% primarily due to
provisions for state income taxes and goodwill amortization, partially offset by
lower taxes on foreign income.

FINANCIAL CONDITION

A portion of the Company's corporate assets and liabilities has been attributed
to the Burlington Group based upon utilization of the shared services from which
assets and liabilities are generated. Management believes this attribution to be
an equitable and a reasonable estimate of the cost attributable to the
Burlington Group.

Corporate assets, which were allocated to the Burlington Group consisted
primarily of pension assets and deferred income taxes and amounted to $11.3
million at December 31, 1997 and $17.6 million at December 31, 1996.

Cash Flow Requirements

Cash provided by operating activities totaled $71.5 million in 1997, an increase
of $8.4 million from $63.1 million in 1996. Although net income decreased $1.5
million, higher non-cash charges included in net income led to an additional
$12.2 million in operating cash flow during the year. Cash generated from
operating activities was not sufficient to fund investing (primarily aircraft
heavy maintenance and capital expenditures) and share activities. As a result,
net cash borrowings (including repayments from the Minerals Group) approximated
$14.0 million. The combination of these activities resulted in an increase in
cash and cash equivalents of $11.0 million during 1997.

Capital Expenditures

Cash capital expenditures for 1997 totaled $31.0 million and an additional $0.4
million of expenditures were made through capital leases. This compares to cash
capital expenditures in 1996 of $61.3 million, with an additional $1.0 million
of expenditures made through capital leases. Capital expenditures made during
1997 included expenditures related to the maintenance of ongoing operations and
the development of new information systems. Capital expenditures in 1996
included the purchase of three aircraft and the acquisition of new support
facilities.

Cash capital expenditures in 1998 are currently expected to approximate $56.0
million, excluding any potential expenditures related to the aforementioned BPI
program and other information technology systems. The 1998 estimated
expenditures exceed the 1997 level by approximately $36 million due primarily to
the planned expansion of new facilities. In addition to these capital
expenditures, BAX Global anticipates spending approximately $24 million on
aircraft heavy maintenance in 1998.

Financing

The Burlington Group intends to fund capital expenditures through cash flow from
operating activities or through operating leases if the latter are financially
attractive. Shortfalls, if any, will be financed through the Company's revolving
credit agreements and other borrowing arrangements.

Total debt outstanding at December 31, 1997 was $71.3 million an increase of
$9.7 million from the $61.6 million reported at December 31, 1996. The net
increase in debt primarily reflects additional borrowings related to the Cleton
acquisition in mid-1997.

The Company has a $350.0 million credit agreement with a syndicate of banks (the
"Facility"). The Facility includes a $100.0 million term loan and permits
additional borrowings, repayments and reborrowings of up to an aggregate of
$250.0 million. The maturity date of both the term loan and the revolving credit
portion of the Facility is May 2001. Interest on borrowings under the Facility
is payable at rates based on prime, certificate of deposit, Eurodollar or money
market rates. At December 31, 1997 and 1996, borrowings of $100.0 million were
outstanding under the term loan portion of the Facility and $25.9 million and
$23.2 million, respectively, of additional borrowings were outstanding under the
remainder of the Facility. Of the total outstanding amount under the Facility at
December 31, 1997, $10.9 million was attributed to the Burlington Group. No
portion of the total amount outstanding under the Facility at December 31, 1996
was attributed to the Burlington Group.

In July 1997, the Company repaid the $14.3 million 4% subordinated debentures
attributed to the Burlington Group, which were outstanding at December 31, 1996.
Borrowings under the Facility were used to make this payment.

Under the terms of the Facility, the Company has agreed to maintain at least
$400.0 million of Consolidated Net Worth, as defined, and can incur additional
indebtedness of approximately $610 million at December 31, 1997.

Related Party Transactions

At December 31, 1997, under an interest bearing borrowing arrangement, the
Minerals Group had no borrowings from the Burlington Group at December 31, 1997
and owed the Burlington Group $7.7 million at December 31, 1996.

At December 31, 1997 and 1996, the Burlington Group owed the Minerals Group
$18.2 million and $24.3 million, respectively, for tax payments representing
Minerals Group's tax benefits utilized by the Burlington Group in accordance
with the Company's tax sharing policy. Approximately $5 million of the amount
owed at December 31, 1997 is expected to be paid within one year. The Burlington
Group paid the Minerals Group $10.3 million for the utilization of such tax
benefits during 1997.

                                       47

Off-balance Sheet Instruments

The Burlington Group utilizes various off-balance sheet financial instruments,
as discussed below, to hedge foreign currency and other market exposures. The
risk that counterparties to such instruments may be unable to perform is
minimized by limiting the counterparties to major financial institutions. The
Burlington Group does not expect any losses due to such counterparty default.

Foreign currency forward contracts--The Company, on behalf of the Burlington
Group, enters into foreign currency forward contracts with a duration of up to
one year as a hedge against liabilities denominated in various currencies. These
contracts minimize the Burlington Group's exposure to exchange rate movements
related to cash requirements of foreign operations denominated in various
currencies. At December 31, 1997, the total notional value of foreign currency
forward contracts outstanding was $2.2 million. As of such date, the fair value
of the foreign currency forward contracts approximated notional value.

Fuel contracts--The Company, on behalf of the Burlington Group, has hedged a
portion of its jet fuel requirements through several commodity option
transactions that are intended to protect against significant increases in jet
fuel prices. At December 31, 1997, these transactions aggregated 33.3 million
gallons and mature periodically throughout the first three quarters of 1998. The
fair value of these fuel hedge transactions may fluctuate over the course of the
contract period due to changes in the supply and demand for oil and refined
products. Thus, the economic gain or loss, if any, upon settlement of the
contracts may differ from the fair value of the contracts at an interim date. At
December 31, 1997, the fair value of these contracts was not significant.

Interest rate contracts--In connection with the aircraft leasing transactions by
BAX Global, the Company has entered into an interest rate swap agreement. This
variable to fixed interest rate swap agreement has a notional value of $30.0
million and fixes the Company's interest rate at 7.05% through January 2, 1998.
At December 31, 1997, the fair value of the contract was not significant.

Readiness for Year 2000

The Burlington Group has taken actions to understand the nature and extent of
the work required to make its systems, services and infrastructure Year 2000
compliant. The Burlington Group is currently preparing its financial,
information and other computer-based systems for the Year 2000, including
replacing and/or updating existing systems. The Burlington Group continues to
evaluate the additional estimated costs associated with these efforts, which it
currently estimates to be between $30-$35 million over the next two years. Based
on actual experience and available information, the Burlington Group believes
that it will be able to manage its Year 2000 transition without any material
adverse effect on its business operations, services or financial condition.
However, if the applicable modifications and conversions are not made, or are
not completed on a timely basis, the Year 2000 issue could have a material
adverse impact on the operations of the Burlington Group. Further, management is
currently evaluating the extent to which the Burlington Group's interface
systems are vulnerable to its suppliers' and customers' failure to remediate
their own Year 2000 issues as there is no guarantee that the systems of other
companies on which the Burlington Group's systems rely will be timely and
adequately converted.

Contingent Liabilities

Under the Coal Industry Retiree Health Benefit Act of 1992 (the "Health Benefit
Act"), the Company and its majority-owned subsidiaries at July 20, 1992,
including certain companies of the Burlington Group are jointly and severally
liable with certain companies of the Minerals Group and of the Brink's Group for
the costs of health care coverage provided for by that Act. For a description of
the Health Benefit Act and a calculation of certain of such costs, see Note 14
to the Company's consolidated financial statements. At this time, the Company
expects the Minerals Group to generate sufficient cash flow to discharge its
obligations under the Act.

In April 1990, the Company entered into a settlement agreement to resolve
certain environmental claims against the Company arising from hydrocarbon
contamination at a petroleum terminal facility ("Tankport") in Jersey City, New
Jersey, which operations were sold in 1983. Under the settlement agreement, the
Company is obligated to pay 80% of the remediation costs. Based on data
available to the Company and its environmental consultants, the Company
estimates its portion of the cleanup costs on an undiscounted basis using
existing technologies to be between $6.6 million and $11.9 million over a period
of up to five years. Management is unable to determine that any amount within
that range is a better estimate due to a variety of uncertainties, which include
the extent of the contamination at the site, the permitted technologies for
remediation and the regulatory standards by which the cleanup will be conducted.
The clean-up estimates have been modified from prior years' in light of cost
inflation and certain assumptions the Company is making with respect to the end
use of the property. The estimate of costs and the timing of payments could
change as a result of changes to the remediation plan required, changes in the
technology available to treat the site, unforseen circumstances existing at the
site and additional cost inflation.

The Company commenced insurance coverage litigation in 1990, in the United
States District Court for the District of New Jersey, seeking a declaratory
judgment that all amounts payable by the Company pursuant to the Tankport
obligation were reimbursable

                                       48

under comprehensive general liability and pollution liability policies
maintained by the Company. In August 1995, the District Court ruled on various
Motions for Summary Judgment. In its decision, the Court found favorably for the
Company on several matters relating to the comprehensive general liability
policies but concluded that the pollution liability policies did not contain
pollution coverage for the types of claims associated with the Tankport site. On
appeal, the Third Circuit reversed the District Court and held that the insurers
could not deny coverage for the reasons stated by the District Court, and the
case was remanded to the District Court for trial. In the event the parties are
unable to settle the dispute, the case is scheduled to be tried beginning
September, 1998. Management and its outside legal counsel continue to believe
that recovery of a substantial portion of the cleanup costs will ultimately be
probable of realization. Accordingly, based on estimates of potential liability,
probable realization of insurance recoveries, related developments of New Jersey
law and the Third Circuit's decision, it is the Company's belief that the
ultimate amount that it would be liable for is immaterial.

Capitalization

The Company has three classes of common stock: Burlington Stock, Pittston
Brink's Group Common Stock ("Brink's Stock") and Pittston Minerals Group Common
Stock ("Minerals Stock") which were designed to provide shareholders with
separate securities reflecting the performance of the Burlington Group, Brink's
Group and Minerals Group, respectively, without diminishing the benefits of
remaining a single corporation or precluding future transactions affecting any
of the Groups. The Burlington Group consists of the BAX Global operations of the
Company. The Brink's Group consists of the Brink's, Incorporated ("Brink's") and
Brink's Home Security, Inc. ("BHS") operations of the Company. The Minerals
Group consists of the Pittston Coal Company ("Coal Operations") and Pittston
Mineral Ventures ("Mineral Ventures") operations of the Company. The Company
prepares separate financial statements for the Burlington, Brink's and Minerals
Groups in addition to consolidated financial information of the Company.

The Company has the authority to issue up to 2,000,000 shares of preferred
stock, par value $10 per share. In January 1994, the Company issued $80.5
million (161,000 shares) of Series C Cumulative Convertible Preferred Stock (the
"Convertible Preferred Stock"), convertible into Minerals Stock. The Convertible
Preferred Stock, which is attributable to the Minerals Group, pays an annual
cumulative dividend of $31.25 per share payable quarterly, in cash, in arrears,
out of all funds of the Company legally available; therefore, when, as and if
declared by the Board and bears a liquidation preference of $500 per share, plus
an attributed amount equal to accrued and unpaid dividends thereon.

Under the share repurchase programs authorized by the Board of Directors of the
Company (the "Board"), the Company purchased shares in the periods presented as
follows:

                                                        Years Ended December 31
(Dollars in millions)                                  1997                1996
- -------------------------------------------------------------------------------
                                                            
Burlington Stock:

     Shares                                         332,300              75,600
     Cost                                          $    7.4                 1.4

Convertible Preferred Stock:
     Shares                                           1,515              20,920
     Cost                                          $    0.6                 7.9
     Excess carrying amount (a)                    $    0.1                 2.1
===============================================================================

(a) The excess of the carrying amount of the Convertible Preferred Stock over
the cash paid to holders for repurchases made during the years which is deducted
from preferred dividends in the Company's Statement of Operations.

In May 1997, the Board authorized an increase in the remaining repurchase
authority with respect to the Convertible Preferred Stock to $25.0 million,
leaving the Company the remaining authority to repurchase an additional $24.4
million of such stock. As of December 31, 1997 the Company had remaining
authority to purchase over time 1.1 million shares of Pittston Burlington Group
Common Stock. The aggregate purchase price limitation for all common stock was
$24.9 million at December 31, 1997. The authority to repurchase shares remains
in effect in 1998.

Dividends

The Board intends to declare and pay dividends, if any, on Burlington Stock
based on the earnings, financial condition, cash flow and business requirements
of the Burlington Group. Since the Company remains subject to Virginia law
limitations on dividends, losses by the Minerals Group or the Brink's Group
could affect the Company's ability to pay dividends in respect of stock relating
to the Burlington Group.

During 1997 and 1996, the Board declared and the Company paid dividends on
Burlington Stock of 24 cents per share.

In 1997 and 1996, dividends paid on the Convertible Preferred Stock were $3.6
million and $3.8 million, respectively.

                                       49

Accounting Changes

In 1997, the Burlington Group implemented Statement of Financial Accounting
Standards ("SFAS") No. 128 "Earnings Per Share." SFAS No. 128 replaced the
calculation of primary and fully diluted net income per share with basic and
diluted net income per share (Note 10). Unlike primary net income per share,
basic net income per share excludes any dilutive effects of options, warrants
and convertible securities. Diluted net income per share is very similar to the
previous fully diluted net income per share. All prior-period net income per
share data has been restated to conform with the provisions of SFAS No. 128.

Pending Accounting Changes

The Burlington Group will implement the following new accounting standards.

Statement of Financial Accounting Standards ("SFAS") No. 130, "Reporting
Comprehensive Income", will be implemented in the first quarter of 1998. SFAS
No. 130 establishes standards for the reporting and display of comprehensive
income and its components in financial statements. Comprehensive income
generally represents all changes in shareholders' equity except those resulting
from investments by or distributions to shareholders. With the exception of
foreign currency translation adjustments, such changes are not significant to
the Burlington Group.

SFAS No. 131, "Disclosures about Segments of an Enterprise and Related
Information", will be implemented in the financial statements for the year ended
December 31, 1998. SFAS No. 131 requires publicly-held companies to report
financial and descriptive information about operating segments in financial
statements issued to shareholders for interim and annual periods. The SFAS also
requires additional disclosures with respect to products and services,
geographic areas of operation and major customers. The adoption of this SFAS is
not expected to have a material impact on the financial statements of the
Burlington Group.

Forward Looking Information

Certain of the matters discussed herein, including statements regarding the
expected outcome of 1998 first quarter results, BPI and information technology
capital investment projections, the expected benefits from the ATI acquisition
and from BAX Global's continuous improvement program on financial results and
the readiness for Year 2000, involve forward looking information which is
subject to known and unknown risks, uncertainties and contingencies, which could
cause actual results, performance or achievements to differ materially from
those which are anticipated. Such risks, uncertainties and contingencies, many
of which are beyond the control of the Burlington Group and the Company,
include, but are not limited to, overall economic and business conditions, the
demand for the BAX Global's services, pricing and other competitive factors in
the industry, new government regulations, variations in costs or expenses, the
consummation and successful integration of the ATI acquisition, changes in the
scope of BPI and Year 2000 initiatives, delays or problems in the implementation
of Year 2000 initiatives by the Burlington Group and/or its suppliers and
customers and delays or problems in the design and implementation of BPI.

                                       50

Pittston Minerals Group

MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION

The financial statements of the Pittston Minerals Group (the "Minerals Group")
include the balance sheets, results of operations and cash flows of the Pittston
Coal Company ("Coal Operations") and Pittston Mineral Ventures ("Mineral
Ventures") operations of The Pittston Company (the "Company"), and a portion of
the Company's corporate assets and liabilities and related transactions which
are not separately identified with operations of a specific segment. The
Minerals Group's financial statements are prepared using the amounts included in
the Company's consolidated financial statements. Corporate amounts reflected in
these financial statements are determined based upon methods which management
believes to be a reasonable and an equitable estimate of cost attributable to
the Minerals Group.

The Company provides to holders of the Pittston Minerals Group Common Stock
("Minerals Stock") separate financial statements, financial reviews,
descriptions of business and other relevant information for the Minerals Group
in addition to consolidated financial information of the Company. Holders of
Minerals Stock are shareholders of the Company, which is responsible for all
liabilities. Therefore, financial developments affecting the Minerals Group, the
Pittston Brink's Group (the "Brink's Group") or the Pittston Burlington Group
(the "Burlington Group") that affect the Company's financial condition could
affect the results of operations and financial condition of each of the Groups.
Accordingly, the Company's consolidated financial statements must be read in
connection with the Minerals Group's financial statements.

The following discussion is a summary of the key factors management considers
necessary in reviewing the Minerals Group's results of operations, liquidity and
capital resources. This discussion must be read in conjunction with the
financial statements and related notes of the Minerals Group and the Company.

RESULTS OF OPERATIONS

                                                       Years Ended December 31
(In thousands)                                1997          1996          1995
- ------------------------------------------------------------------------------
                                                            
Net sales:
     Coal Operations                      $612,907       677,393       706,251
     Mineral Ventures                       17,719        19,120        16,600
- ------------------------------------------------------------------------------
Net sales                                 $630,626       696,513       722,851
==============================================================================
Operating profit (loss):
     Coal Operations                      $ 12,217        20,034        23,131
     Mineral Ventures                       (2,070)        1,619           207
- ------------------------------------------------------------------------------
     Segment operating profit               10,147        21,653        23,338
     General corporate expense              (5,988)       (6,555)       (7,266)
- ------------------------------------------------------------------------------
Operating profit                          $  4,159        15,098        16,072
==============================================================================

In 1997, the Minerals Group reported net income of $4.2 million, compared to net
income of $10.7 million in 1996. Operating profit totaled $4.2 million in 1997
as compared to $15.1 million in 1996. Net sales during 1997 decreased $65.9
million (9%) compared to 1996. In 1997, the Minerals Group's operating profit
benefited from a $3.1 million reversal of restructuring liabilities. In 1996,
the Minerals Group's operating profit and net income included three significant
items (related to Coal Operations): a $35.7 million benefit from the settlement
of the Evergreen lawsuit at an amount lower than previously accrued ($23.2
million after-tax); a $29.9 million charge related to the adoption of a new
accounting standard regarding the impairment of long-lived assets ($19.5 million
after-tax); and an $11.7 million benefit from the reversal of excess
restructuring liabilities ($7.6 million after-tax). Excluding the three items
mentioned above, Coal Operations would have recorded operating profit of $2.7
million for 1996 and the Minerals Group would have had a net loss of $0.6
million for 1996.

In 1996, the Minerals Group reported net income of $10.7 million, compared to
net income of $14.0 million in 1995. Operating profit totaled $15.1 million in
1996 compared with $16.1 million in the prior year. Net sales during 1996
decreased $26.3 million (4%) compared to the corresponding period in 1995.
Operating profit and net income during 1996 included the three significant items
discussed above.

                                       51

Coal Operations

The following is a table of selected financial data for Coal Operations on a
comparative basis:

                 Years Ended December 31
(In thousands)                                 1997          1996          1995
===============================================================================
                                                               
Net sales                                 $ 612,907       677,393       706,251

Cost of sales                               594,688       693,505       683,621
Selling, general and administrative          19,457        24,261        22,415
Restructuring and other credits,
     including litigation accrual            (3,104)      (47,299)           --
- -------------------------------------------------------------------------------
Total costs and expenses                    611,041       670,467       706,036
- -------------------------------------------------------------------------------
Other operating income, net                  10,351        13,108        22,916
- -------------------------------------------------------------------------------
Operating profit                          $  12,217        20,034        23,131
===============================================================================
Coal sales (tons):
     Metallurgical                            7,655         8,124         8,607
     Utility and industrial                  12,813        14,847        15,789
- -------------------------------------------------------------------------------
Total coal sales                             20,468        22,971        24,396
===============================================================================
Production/purchased (tons):
     Deep                                     4,975         3,930         3,982
     Surface                                 10,238        11,151        12,934
     Contract                                 1,433         1,621         1,941
- -------------------------------------------------------------------------------
                                             16,646        16,702        18,857
Purchased                                     4,075         5,762         6,047
- -------------------------------------------------------------------------------
Total                                        20,721        22,464        24,904
===============================================================================

Coal Operations generated an operating profit of $12.2 million in 1997, compared
to $20.0 million reported in 1996 and $23.1 million reported in 1995. Operating
results in 1997 included a benefit of $3.1 million from the reversal of excess
restructuring liabilities. Operating results in 1996 included a benefit of $35.7
million from the settlement of the Evergreen case at an amount lower than
previously accrued in 1993 and a benefit from excess restructuring liabilities
of $11.7 million. These 1996 benefits were offset, in part, by a $29.9 million
charge related to the adoption of a new accounting standard regarding the
impairment of long-lived assets. The charge is included in cost of sales ($26.3
million) and selling, general and administrative expenses ($3.6 million). All
three of these items are discussed in greater detail below. In addition,
operating profit in 1996 was also impacted by a $3.0 million benefit from a
litigation settlement offset by a decrease in other operating income of $9.8
million, primarily due to decreases in gains from the sale of coal assets which
generated $11.9 million in 1995.

Coal Operations' operating profit, excluding restructuring credits, the effects
of the Evergreen Settlement and the adoption of SFAS No. 121, is analyzed as
follows:

                                                         Years Ended December 31
(In thousands)                                      1997        1996        1995
================================================================================
                                                                
Net coal sales (a)                              $604,140     670,121     702,864
Current production cost of coal sold (a)         558,658     634,754     648,383
- --------------------------------------------------------------------------------
Coal margin                                       45,482      35,367      54,481
Non-coal margin                                    2,465       2,177         749
Other operating income, net                       10,351      13,108      22,916
- --------------------------------------------------------------------------------
Margin and other income                           58,298      50,652      78,146
- --------------------------------------------------------------------------------
Other costs and expenses:
     Idle equipment and closed mines               2,309       1,044       9,980
     Inactive employee cost                       27,419      26,300      22,620
     Selling, general and administrative          19,457      20,625      22,415
- --------------------------------------------------------------------------------
Total other costs and expenses                    49,185      47,969      55,015
- --------------------------------------------------------------------------------
Operating profit (before restructuring
     and other credits) (b)                     $  9,113       2,683      23,131
================================================================================
Coal margin per ton:
     Realization                                $  29.52       29.17       28.81
     Current production costs                      27.29       27.63       26.58
- --------------------------------------------------------------------------------
Coal margin                                     $   2.23        1.54        2.23
================================================================================

(a) Excludes non-coal components 

(b) Restructuring and other credits in 1997 consist of a benefit from excess
restructuring liabilities of $3,104. Restructuring and other credits in 1996
consist of an impairment loss related to the adoption of SFAS No. 121 of $29,948
($26,312 in cost of sales and $3,636 in selling, general and administrative
expenses), a gain from the settlement of the Evergreen case of $35,650 at an
amount lower than previously accrued and a benefit from excess restructuring
liabilities of $11,649. Both the gain from the Evergreen case and the benefit
from excess restructuring liabilities are included in Coal Operations' operating
profit as "Restructuring and other credits, including litigation accrual".

Sales volume of 20.5 million tons in 1997 was 2.5 million tons less than the
23.0 million tons sold in 1996. Compared to 1996, steam coal sales in 1997
decreased by 2.0 million tons (14%), to 12.8 million tons and metallurgical coal
sales declined by 0.5 million tons (6%), to 7.7 million tons. The steam sales
reduction was due to the expiration of certain long-term contracts coupled with
reduced spot sales. Steam coal sales represented 63% of total volume in 1997 and
65% in 1996.

                                       52

For 1997, coal margin was $45.5 million, an increase of $10.1 million over 1996.
Coal margin per ton increased to $2.23 per ton in 1997 from $1.54 per ton for
1996, due to a combination of a $0.35 per ton increase in realization and a
$0.34 per ton decrease in the current production cost of coal sold. The increase
in average realization per ton was due to an increase in steam realization as
the majority of steam coal production is sold under long-term contracts
containing price escalation provisions. This increase was partially offset by a
decrease in the metallurgical coal realization due to lower average price
settlements with metallurgical customers for the contract year which began on
April 1, 1997. Expectations are that 1998 realizations on metallurgical coal
sales will not significantly vary from 1997 levels.

The current production cost of coal sold for 1997 was $27.29 per ton as compared
with $27.63 per ton for 1996. Production costs in 1997 were favorably impacted
by lower surface mine costs per ton partially offset by higher per ton deep mine
costs. In addition, 1997 production costs benefited from decreases in employee
benefit and reclamation liabilities. Production for 1997 totaled 16.6 million
tons, consistent with 1996 production of 16.7 million tons. Surface production
accounted for 63% and 68% of the total volume in 1997 and 1996, respectively.
Productivity of 37.6 tons per man day in 1997 was equal to that of 1996.

Non-coal margin was $2.5 million for 1997, an increase of $0.3 million, which
largely reflects the impact of changes in natural gas prices over 1996. Other
operating income was $10.4 million for 1997, a decrease of $2.8 million from
1996. Included in 1996 was a one-time benefit of $3.0 million from a litigation
settlement.

Idle equipment and closed mine costs increased by $1.3 million in 1997 versus
1996. Inactive employee costs, which primarily represent long-term employee
liabilities for pension and retiree medical costs were higher in 1997 as
compared to 1996, increasing by $1.1 million. Selling, general and
administrative expenses declined by $1.2 million (6%) in 1997 as compared to
1996 as a result of Coal Operations cost control efforts.

Sales volume of 23.0 million tons in 1996 was 1.4 million tons less than the
24.4 million tons sold in 1995. Metallurgical coal sales decreased by 0.5
million tons (6%) in 1996 to 8.1 million tons compared to the prior year period.
Steam coal sales decreased by 0.9 million tons (6%) in 1996 to 14.9 million tons
compared to the prior year period. Steam coal sales represented 65% of the total
sales volume for both 1996 and 1995.

Total coal margin of $35.4 million for 1996 represented a decrease of $19.1
million (35%) from the 1995 coal margin of $54.5 million. The decline in coal
margin primarily reflects a $1.05 per ton (4%) increase in the current
production cost of coal sold which was partially offset by a $0.36 per ton (1%)
increase in realization. Coal margin was also negatively impacted by a decrease
in 1996 in tons of coal sold from 24.4 million to 23.0 million. The increase in
average realization per ton was mainly due to export metallurgical coal pricing.
For the contract year that began April 1, 1996, export metallurgical coal prices
only increased slightly over those in effect at April 1, 1995, which were
significantly improved over the April 1, 1994 prices. As a result, the export
metallurgical realization for 1996 as compared to 1995 benefited from higher
first quarter realization (1995 contract prices versus 1994 contract prices) and
from additional export tonnage shipped. Domestic steam coal pricing, mostly
priced according to long-term contracts, improved modestly as contract
escalations were mostly offset by lower priced spot sales.

The increase in the current production cost per ton of coal sold for 1996 was
due to higher company surface mine and purchased coal costs which were only
partially offset by lower company deep mine and contract coal costs as well as a
state tax credit for coal produced in Virginia. Current production costs in 1996
were also negatively impacted by higher fuel prices and increases in employee
benefits, reclamation and environmental liabilities. Production for 1996 totaled
16.7 million tons, a decrease of 11% from 1995, principally reflecting
reductions in production due to mine sales and closures in 1995. Surface mine
production accounted for 68% and 70% of the total production volume in 1996 and
1995, respectively. Productivity of 37.6 tons per man day represented a slight
increase from 1995.

Non-coal margin for 1996 increased by $1.4 million from 1995, reflecting higher
gas prices. Other operating income, including sales of properties and equipment
and third party royalties, amounted to $13.1 million in 1996, $9.8 million less
than 1995. The higher level of income recorded in 1995 reflected gains of $11.9
million from the sale of coal assets.

Idle equipment and closed mine costs decreased by $8.9 million in 1996. Idle
equipment expenses were reduced from the prior period level as a result of Coal
Operations' improved equipment management program. Additionally, costs for 1995
were adversely impacted by the idling of two surface mines. Inactive employee
costs, which primarily represent long-term employee liabilities for pension and
retiree medical cost, increased by $3.7 million to $26.3 million in 1996. The
unfavorable variance was due to the use of lower long-term interest rates to
calculate the present value of the long-term liabilities in 1996. In addition,
inactive employee costs in 1995 include a benefit of $2.5 million from a
favorable litigation decision. Selling, general and administrative expenses
continued to decline in 1996 as a result of cost control efforts implemented in
1995. These costs decreased $1.8 million (8%) in 1996 over the 1995 year.

At December 31, 1997, Coal Operations had a liability of $30.8 million for
various restructuring costs which was recorded as restructuring and other
charges in the Statement of Operations in years prior to 1995. Although coal
production has ceased at the mines remaining in the accrual, Coal Operations
will incur reclamation and environmental costs for several years to bring these
properties into compliance with federal and state environmental laws. However,
management believes that the reserve, as adjusted, at December 31, 1997, should
be sufficient to provide for these future costs. Management does not

                                       53

anticipate material additional future charges to operating earnings for these
facilities, although continual cash funding will be required over the next
several years.

The initiation, in 1996, of a state tax credit for coal produced in Virginia,
along with favorable labor negotiations and improved metallurgical market
conditions for medium volatile coal, led management to continue operating an
underground mine and a related coal preparation and loading facility previously
included in the restructuring reserve. As a result of these decisions and
favorable workers' compensation claim developments, Coal Operations reversed
$3.1 million and $11.7 million of the reserve in 1997 and 1996, respectively.
The 1996 reversal included $4.8 million related to estimated mine and plant
closures, primarily reclamation, and $6.9 million in employee severance and
other benefit costs. The entire 1997 reversal related to workers' compensation
claim reserves.

The following table analyzes the changes in liabilities during the last three
years for facility closure costs recorded as restructuring and other charges:

                                                            Employee
                                                   Mine  Termination,
                                       Leased       and      Medical
                                    Machinery     Plant          and
                                          and   Closure    Severance
(In thousands)                      Equipment     Costs        Costs      Total
===============================================================================
                                                            
Balance December 31, 1994              $3,787    38,256       43,372     85,415
Payments (a)                            1,993     7,765        7,295     17,053
Other reductions (c)                      576     1,508           --      2,084
- -------------------------------------------------------------------------------
Balance December 31, 1995               1,218    28,983       36,077     66,278
Reversals                                         4,778        6,871     11,649
Payments (b)                              842     5,499        3,921     10,262
Other reductions (c)                       --     6,267           --      6,267
- -------------------------------------------------------------------------------
Balance December 31, 1996                 376    12,439       25,285     38,100
Reversals                                                      3,104      3,104
Payments (d)                              376     1,764        2,010      4,150
Other                                      --       468         (468)        --
- -------------------------------------------------------------------------------
Balance December 31, 1997              $   --    11,143       19,703     30,846
===============================================================================

(a) Of the total payments made in 1995, $6,424 was for liabilities recorded in
years prior to 1993, $2,486 was for liabilities recorded in 1993 and $8,143 was
for liabilities recorded in 1994.

(b) Of the total payments made in 1996, $5,119 was for liabilities recorded in
years prior to 1993, $485 was for liabilities recorded in 1993 and $4,658 was
for liabilities recorded in 1994.

(c) These amounts represent the assumption of liabilities by third parties as a
result of sales transactions.

(d) Of the total payments made in 1997, $3,053 was for liabilities recorded in
years prior to 1993, $125 was for liabilities recorded in 1993 and $972 was for
liabilities recorded in 1994.

During the next twelve months, expected cash funding of these charges will be
approximately $4 to $6 million. The liability for mine and plant closure costs
is expected to be satisfied over the next nine years, of which approximately 40%
is expected to be paid over the next two years. The liability for workers'
compensation is estimated to be 42% settled over the next four years with the
balance paid during the following five to nine years.

In October 1992, the Coal Industry Retiree Health Benefit Act of 1992 (the
"Health Benefit Act") was enacted as part of the Energy Policy Act of 1992. The
Health Benefit Act established rules for the payment of future health care
benefits for thousands of retired union mine workers and their dependents. The
Health Benefit Act established a trust fund to which "signatory operators" and
"related persons", including the Company and certain of its subsidiaries (the
"Pittston Companies"), are jointly and severally liable for annual premiums for
assigned beneficiaries, together with a pro rata share for certain beneficiaries
who never worked for such employers ("unassigned beneficiaries"), in amounts
determined on the basis set forth in the Health Benefit Act. For 1997, 1996 and
1995, these amounts, on a pretax basis, were approximately $9.3 million, $10.4
million and $10.8 million, respectively. The Company believes that the annual
cash funding under the Health Benefit Act for the Pittston Companies' assigned
beneficiaries will continue at approximately $9 million per year for the next
several years and should begin to decline thereafter as the number of such
assigned beneficiaries decreases.

Based on the number of beneficiaries actually assigned by the Social Security
Administration, the Company estimates the aggregate pretax liability relating to
the Pittston Companies' assigned beneficiaries remaining at December 31, 1997 at
approximately $200 million, which when discounted at 7.5% provides a present
value estimate of approximately $90 million.

The ultimate obligation that will be incurred by the Company could be
significantly affected by, among other things, increased medical costs,
decreased number of beneficiaries, governmental funding arrangements and such
federal health benefit legislation of general application as may be enacted. In
addition, the Health Benefit Act requires the Pittston Companies to fund, pro
rata according to the total number of assigned beneficiaries, a portion of the
health benefits for unassigned beneficiaries. At this time, the funding for such
health benefits is being provided from another source and for this and other
reasons the Pittston Companies' ultimate obligation for the unassigned
beneficiaries cannot be determined. The Company accounts for its obligations
under the Health Benefit Act as a participant in a multi-employer plan and
recognizes the annual cost on a pay-as-you-go basis.

In 1988, the trustees of the 1950 Benefit Trust Fund and the 1974 Pension
Benefit Trust Funds (the "Trust Funds") established under collective bargaining
agreements with the UMWA brought an action (the "Evergreen Case") against the
Company and a number of its coal subsidiaries in the United States District
Court for the District of Columbia, claiming that the defendants are obligated
to contribute to such Trust Funds in accordance with the provisions of the 1988
and subsequent National Bituminous Coal Wage Agreements, to which neither the
Company nor any of its subsidiaries is a signatory. In 1993, the Minerals Group
recognized in its financial statements the potential liability that might have
resulted from an ultimate adverse judgment in the Evergreen Case.

                                       54

In late March 1996, a settlement was reached in the Evergreen Case. Under the
terms of the settlement, the coal subsidiaries which had been signatories to
earlier National Bituminous Coal Wage Agreements agreed to make various lump sum
payments in full satisfaction of all amounts allegedly due to the Trust Funds
through January 31, 1996, to be paid over time as follows: approximately $25.8
million upon dismissal of the Evergreen Case and the remainder of $24.0 million
in installments of $7.0 million in 1996 and $8.5 million in each of 1997 and
1998. The first payment was entirely funded through an escrow account previously
established by the Company. The second and third payments were paid according to
schedule, and were funded through cash provided by operating activities. In
addition, the coal subsidiaries agreed to future participation in the UMWA 1974
Pension Plan.

As a result of the settlement of the Evergreen Case at an amount lower than
those previously accrued, the Minerals Group recorded a benefit of approximately
$35.7 million ($23.2 million after-tax) in the first quarter of 1996 in its
financial statements.

In 1996, the Minerals Group adopted Statement of Financial Accounting Standards
("SFAS") No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of". SFAS No. 121 requires companies to review
assets for impairment whenever circumstances indicate that the carrying amount
for an asset may not be recoverable. SFAS No. 121 resulted in a pre-tax charge
to 1996 earnings for Coal Operations of $29.9 million ($19.5 million after-tax),
of which $26.3 million was included in cost of sales and $3.6 million was
included in selling, general and administrative expenses. Assets for which the
impairment loss was recognized consisted of property, plant and equipment,
advanced royalties and goodwill. These assets primarily related to mines
scheduled for closure in the near term and idled facilities and related
equipment. No such charge was incurred in 1997.

Mineral Ventures

The following is a table of selected financial data for Mineral Ventures on a
comparative basis:

(Dollars in thousands, except                           Years Ended December 31
per ounce data)                                  1997         1996         1995
===============================================================================
                                                                
Stawell Gold Mine
     Gold sales                               $17,714       19,071       16,449
     Other revenue                                  5           49          151
- -------------------------------------------------------------------------------
Net sales                                      17,719       19,120       16,600
Cost of sales(a)                               14,242       13,898       12,554
Selling, general and administrative(a)          1,242        1,124        1,025
- -------------------------------------------------------------------------------
Total costs and expenses                       15,484       15,022       13,579
- -------------------------------------------------------------------------------
Operating profit-Stawell Gold Mine              2,235        4,098        3,021
Other operating expense, net                   (4,305)      (2,479)      (2,814)
- -------------------------------------------------------------------------------
Operating (loss) profit                       $(2,070)       1,619          207
===============================================================================

(Dollars in thousands, except                           Years Ended December 31
per ounce data)                                      1997       1996       1995
===============================================================================
Stawell Gold Mine:
Mineral Ventures' 50% direct share:
     Ounces sold                                   42,024     45,957     40,302
     Ounces produced                               42,301     45,443     40,606
Average per ounce sold (US$):
     Realization(b)                               $   422        415        408
     Cash cost                                        302        287        297
===============================================================================

(a) Excludes $93 and $3,543 of non-Stawell related cost of sales and selling,
general and administrative expenses, respectively, for 1997. Excludes $94 and
$2,691 of non-Stawell related cost of sales and selling, general and
administrative expenses, respectively, for 1996. Excludes $120 and $2,545 of
non-Stawell related cost of sales and selling, general and administrative
expenses, respectively, for 1995. Such costs are reclassified to cost of sales
and selling, general and administrative expenses in the Minerals Group statement
of operations.

(b) 1997 includes proceeds from the liquidation of a gold forward sale hedge
position in July 1997. The proceeds from this liquidation were fully recognized
by December 31, 1997.

Mineral Ventures, which primarily consists of a 50% direct and a 17% indirect
interest in the Stawell gold mine ("Stawell") in western Victoria, Australia,
generated an operating loss of $2.1 million in 1997 as compared to an operating
profit of $1.6 million in 1996. Mineral Ventures' 50% direct interest in
Stawell's operations generated net sales of $17.7 million in 1997 compared to
$19.1 million in 1996 as the ounces of gold sold decreased 9% from 46.0 thousand
ounces to 42.0 thousand ounces. The operating profit at Stawell of $2.2 million
was $1.9 million lower than the operating profit of $4.1 million in 1996,
reflecting a $15 per ounce increase (5%) in the cash cost of gold sold offset by
a $7 per ounce increase (2%) in average realization. Stawell's operating costs
in 1997 were negatively impacted by the collapse during construction of a new
ventilation shaft that resulted in a write-off of $1.0 million, approximately
$0.75 million, of which, is attributed to Mineral Ventures' 50% direct interest
in Stawell with the remainder attributed to Mineral Ventures' 17% indirect
interest in Stawell. Stawell's results were also negatively impacted by
unfavorable ground conditions through the first half of 1997, and lower
production and higher costs during the year resulting from the collapse of the
aforementioned ventilation shaft.

Mineral Ventures generated an operating profit of $1.6 million in 1996 as
compared to the $0.2 million reported in 1995. Mineral Ventures' 50% direct
interest in Stawell's operations generated $19.1 million in gold sales in 1996
as compared with $16.4 million in 1995 as the ounces of gold sold increased 14%
from 40.3 thousand ounces to 46.0 thousand ounces. The operating profit at
Stawell increased from $3.0 million in 1995 to $4.1 million in 1996 reflecting a
combination of a $7 per ounce increase in realization and a $10 per ounce
decrease in the cash cost per ounce of gold sold. Operating costs in 1996 were
lower than 1995, where operating costs were impacted by adverse geological
conditions at the mine.

                                       55

In July 1997, in reaction to the continued decline in the market price of gold,
Mineral Ventures closed a gold forward sale hedge position relating to 16,397
ounces and realized proceeds of $2.6 million. These proceeds, which equate to
approximately $160 per ounce were recognized for accounting purposes as ounces
of gold were sold in the market. The full amount of these proceeds was
recognized by December 31, 1997. As of December 31, 1997, approximately 19% of
Mineral Ventures' proven and probable reserves had been sold forward under
forward sales contracts that mature periodically through mid-1999. These
contracts should result in an average realization of between $325 and $330 per
ounce of gold sold through the end of 1998. At that time, realization will be
dependent on the spot market or new contract hedge positions.

At December 31, 1997, remaining proven and probable gold reserves at the Stawell
mine were estimated at 438,000 ounces. The joint venture also has exploration
rights in the highly prospective district around the mine.

Other operating expense, net, includes equity earnings from joint ventures,
primarily consisting of Mineral Ventures' 17% indirect interest in Stawell's
operations and gold exploration costs for all operations excluding Stawell.
Other operating expenses increased by $1.8 million and decreased by $0.3 million
in 1997 and 1996, respectively, primarily due to joint venture losses. In
addition, gold exploration costs increased from 1996 and are being incurred by
Mineral Ventures in Nevada and Australia with its joint venture partners.

In addition to its interest in Stawell, Mineral Ventures has 17% indirect
interest in the Silver Swan base metals property in Western Australia. The
initial mining and commissioning of nickel at Silver Swan has proceeded
according to plan and, after some customer delays, production and shipping
schedules are also on plan.

Foreign Operations

A portion of the Minerals Group's financial results is derived from activities
in Australia, which has a local currency other than the U.S. dollar. Because the
financial results of the Minerals Group are reported in U.S. dollars, they are
affected by the changes in the value of the foreign currency in relation to the
U.S. dollar. Rate fluctuations may adversely affect transactions which are
denominated in the Australian dollar. The Minerals Group routinely enters into
such transactions in the normal course of its business. The Company, on behalf
of the Minerals Group, from time to time, uses foreign currency exchange forward
contracts to hedge the risks associated with certain transactions denominated in
the Australian dollar. Realized and unrealized gains and losses on these
contracts are deferred and recognized as part of the specific transaction
hedged.

The Minerals Group is also subject to other risks customarily associated with
doing business in foreign countries, including labor and economic conditions.

Corporate Expenses

A portion of the Company's corporate general and administrative expenses and
other shared services has been allocated to the Minerals Group based upon
utilization and other methods and criteria which management believes to be an
equitable and a reasonable estimate of the cost attributable to the Minerals
Group. These attributions were $6.0 million, $6.6 million and $7.3 million in
1997, 1996 and 1995, respectively.

The higher 1996 corporate expenses were primarily due to the relocation of the
Company's corporate headquarters to Richmond, Virginia, during September 1996.
The costs of this move in 1996, including moving expenses, employee relocation,
severance pay and temporary employee costs, amounted to $2.9 million.
Approximately $0.9 million of these costs were attributed to the Minerals Group.
In addition, such expenses excluding the relocation costs, decreased in 1997 and
1996 over 1995 due to a lower proportion of services attributable to the
Minerals Group somewhat offset by higher general corporate expenses.

Corporate expenses for the first quarter of 1998 will reflect approximately $6
million related to payments or accruals being made pursuant to the retirement
agreement between the Company and Joseph C. Farrell, former Chairman, President
and Chief Executive Officer of the Company. Approximately $1.8 million of those
expenses will be attributed to the Minerals Group.

Other Operating Income, Net

Other net operating income decreased $3.7 million and $9.4 million, in 1997 and
1996, respectively. Other operating income for the Minerals Group principally
includes royalty income and gains and losses from sales of coal assets. The
decrease in 1997 versus 1996 is due to a $3.0 million one-time benefit related
to a litigation settlement. The decrease in 1996 compared to 1995 was largely
due to decreased income from sales of coal assets in 1996.

Interest Expense

Interest expense in 1997 increased $0.2 million to $10.9 million from $10.7
million in 1996 and increased $0.2 million in 1996 from $10.5 million in 1995.
Interest expense increased in both years due to slight fluctuations in interest
rates on borrowings under revolving credit facilities.

Income Taxes

In 1997, 1996 and 1995, a credit for income taxes was recorded due to the tax
benefits of percentage depletion which can be used by the Company. Also a factor
in the credit for income taxes recorded in 1997 was the generation of a pretax
loss.

FINANCIAL CONDITION

A portion of the Company's corporate assets and liabilities has been attributed
to the Minerals Group based upon utilization of the shared services from which
assets and liabilities are generated. Management believes this attribution to be
an

                                       56

equitable and a reasonable estimate of the costs attributable to the Minerals
Group.

Corporate assets which were attributed to the Minerals Group consisted primarily
of pension assets and deferred income taxes and amounted to $84.2 million and
$89.4 million at December 31, 1997 and 1996, respectively.

Cash Flow Requirements

Cash provided by operating activities amounted to $49.6 million in 1997 compared
to $19.8 million in 1996. The increase in cash provided by operating activities
in 1997 is due, in part, to an increase in accounts receivable collections over
1996, as well as to the increased sale of extended term receivables. Net income,
noncash charges and changes in operating assets and liabilities in 1996 were
significantly affected by three items, a benefit from the settlement of the
Evergreen case at an amount less than originally accrued, a charge related to
SFAS No.121, and a benefit from the reversal of excess restructuring
liabilities. These items had no effect on cash generated by operations except
that the second and third Evergreen Case settlement payments of $7.0 million and
$8.5 million were paid from operating cash in 1996 and 1997, respectively.

Cash flow from operating activities in 1997 and 1996 was also positively
impacted for tax payments received from the Burlington and Brink's Groups, in
the amounts of $10.3 million and $15.8 million, respectively. Such payments
represent Minerals Group's tax benefits utilized by the Burlington and Brink's
Groups and are settled in accordance with the Company's tax sharing policy.
Funding requirements for long-term inactive employee liabilities amounted to
approximately $40 million in 1997, compared to $45 million in 1996.

Cash flow provided by operating activities was sufficient to fund capital
expenditures, net repayments to the Brink's and Burlington Groups and share
activity. These activities, combined with a net reduction of external debt of
$8.7 million, resulted in an essentially unchanged position in cash and cash
equivalents.

Capital Expenditures

Cash capital expenditures for 1997 and 1996 totaled $26.4 million and $23.6
million, respectively. In 1997, Mineral Ventures and Coal Operations spent $3.9
million and $22.4 million, respectively. Additional expenditures financed
through capital leases amounted to $0.6 million and $1.0 million in 1997 and
1996, respectively. The majority of expenditures by Coal Operations were for
replacement and maintenance of current ongoing mining operations. The majority
of Mineral Ventures expenditures related to project development.

In 1998, cash capital expenditures are expected to approximate $25 million. The
1998 estimated expenditures essentially equal those of 1997 and also relate to
the maintenance of current ongoing mining operations.

Financing

The Minerals Group intends to fund capital expenditures through cash flow from
operating activities or through operating leases if the latter are financially
attractive. Shortfalls, if any, will be financed through the Company's revolving
credit agreements, other borrowings arrangements or borrowings from the Brink's
and Burlington Groups.

Total debt outstanding at December 31, 1997 was $116.7 million, a decrease of
$8.3 million from the $125.0 million outstanding at December 31, 1996. The
decrease in borrowings is due to increases in available cash flow used for
repayment of outstanding amounts.

The Company has a $350.0 million credit agreement with a syndicate of banks (the
"Facility"). The Facility includes a $100.0 million term loan and permits
additional borrowings, repayments and reborrowings of up to an aggregate of
$250.0 million. The maturity date of both the term loan and the revolving credit
portion of the Facility is May 31, 2001. Interest on borrowings under the
Facility is payable at rates based on prime, certificate of deposit, Eurodollar
or money market rates. At December 31, 1997 and 1996, borrowings of $100.0
million were outstanding under the term loan portion of the Facility and $25.9
million and $23.2 million, respectively, of additional borrowings were
outstanding under the remainder of the Facility. Of the total outstanding amount
under the Facility at December 31, 1997, $115.0 million was attributed to the
Minerals Group. At December 31, 1996, all borrowings under the Facility were
attributed to the Minerals Group.

Under the terms of the Facility, the Company has agreed to maintain at least
$400.0 million of Consolidated Net Worth, as defined, and can incur additional
indebtedness of approximately $610 million at December 31, 1997.

Related Party Transactions

At December 31, 1997, under interest bearing borrowing arrangements, the
Minerals Group owed the Brink's Group $27.0 million, an increase of $3.0 million
from the $24.0 million owed at December 31, 1996. The Minerals Group also owed
the Burlington Group $7.7 million at December 31, 1996 all of which was repaid
during 1997.

At year-end 1997 and 1996, the Brink's Group owed the Minerals Group $19.4
million and $18.8 million, respectively, for tax benefits. Approximately $19.0
million of the amounts owed at December 31, 1997 is expected to be paid within
one year. Also at December 31, 1997 and 1996, the Burlington Group owed the
Minerals Group $18.2 million and $24.3 million, respectively, for tax benefits,
of which $5.0 million of the amounts owed at December 31, 1997 is expected to be
paid in one year.

                                       57

Off-balance Sheet Instruments

The Minerals Group utilizes off-balance sheet financial instruments, as
discussed below, to hedge foreign currency and other market exposures. The risk
that counterparties to such instruments may be unable to perform is minimized by
limiting the counterparties to major financial institutions. The Company does
not expect any losses due to such counterparty default.

Foreign currency forward contracts--The Company, on behalf of the Minerals
Group, enters into foreign currency forward contracts, from time to time, with a
duration of up to two years as a hedge against liabilities denominated in the
Australian dollar. These contracts minimize the Minerals Group's exposure to
exchange rate movements related to cash requirements of Australian operations
denominated in Australian dollars. At December 31, 1997, the notional value of
foreign currency forward contracts outstanding was $19.6 million and the fair
value approximated notional value.

Gold contracts--In order to protect itself against downward movements in gold
prices, the Company, on behalf of the Minerals Group, hedges a portion of its
share of gold sales from the Stawell gold mine primarily through forward sales
contracts. At December 31, 1997, 41,500 ounces of gold, representing
approximately 19% of the Minerals Group's share of Stawell's proven and probable
reserves, were sold forward under forward sales contracts that mature
periodically through mid-1999. Because only a portion of its future production
is currently sold forward, the Minerals Group can take advantage of increases
and is exposed to decreases in the spot price of gold. At December 31, 1997, the
fair value of the Minerals Group's forward sales contracts was not significant.

Interest rate contracts--The Company has two interest rate swap agreements which
effectively convert a portion of its $100.0 million variable rate term loan to
fixed rates. During 1995, the Company entered into an agreement maturing in July
1998, which fixes the Company's interest rate at 5.80% on $20.0 million in face
amount of debt. During 1996, the Company entered into another variable to fixed
interest rate swap agreement, maturing in February 1998, which fixes the
Company's interest rate at 4.9% on an initial face amount of debt of $5.0
million. The notional amount increased by $5.0 million each quarter through the
first quarter of 1997. The notional amount outstanding at December 31, 1997 was
$20.0 million.

Fuel contracts--The Company, on behalf of the Minerals Group, has hedged a
portion of its diesel fuel requirements through several commodity option
transactions that are intended to protect against significant increases in
diesel fuel prices. At December 31, 1997, these transactions aggregated 8.7
million gallons and mature periodically throughout 1998. The fair value of these
fuel hedge transactions may fluctuate over the course of the contract period due
to changes in the supply and demand for oil and refined products. Thus, the
economic gain or loss, if any, upon settlement of the contracts may differ from
the fair value of the contracts at an interim date. At December 31, 1997 the
fair value of these contracts was not significant.

Readiness For Year 2000

The Minerals Group has taken actions to understand the nature and extent of the
work required to make its systems, products and infrastructures Year 2000
compliant. As these efforts progress, the Minerals Group continues to evaluate
the estimated costs associated with these efforts. Based upon its most recent
estimates and its anticipated capital spending, the Minerals Group does not
anticipate that it will incur any material costs in preparing for the Year 2000.
The Minerals Group believes, based on available information, that it will be
able to manage its total Year 2000 transition without any material adverse
effect on its business operations, products or financial condition. However, if
the applicable modifications and conversions are not made, or are not completed
on a timely basis, the Year 2000 issue could have a material adverse impact on
the operations of the Minerals Group. Further, management is currently
evaluating the extent to which the Minerals Group's interface systems are
vulnerable to its suppliers' and customers' failure to remediate their own Year
2000 issues as there is no guarantee that the systems of other companies on
which the Minerals Group's systems rely will be timely and adequately converted.

Contingent Liabilities

In April 1990, the Company entered into a settlement agreement to resolve
certain environmental claims against the Company arising from hydrocarbon
contamination at a petroleum terminal facility ("Tankport") in Jersey City, New
Jersey, which operations were sold in 1983. Under the settlement agreement, the
Company is obligated to pay 80% of the remediation costs. Based on data
available to the Company and its environmental consultants, the Company
estimates its portion of the cleanup costs on an undiscounted basis using
existing technologies to be between $6.6 million and $11.9 million over a period
of up to five years. Management is unable to determine that any amount within
that range is a better estimate due to a variety of uncertainties, which include
the extent of the contamination at the site, the permitted technologies for
remediation and the regulatory standards by which the cleanup will be conducted.
The clean-up estimates have been modified from prior years' in light of cost
inflation and certain assumptions the Company is making with respect to the end
use of the property. The estimate of costs and the timing of payments could
change as a result of changes to the remediation plan required, changes in the
technology available to treat the site, unforseen circumstances existing at the
site and additional cost inflation.

                                       58

The Company commenced insurance coverage litigation in 1990, in the United
States District Court for the District of New Jersey, seeking a declaratory
judgment that all amounts payable by the Company pursuant to the Tankport
obligation were reimbursable under comprehensive general liability and pollution
liability policies maintained by the Company. In August 1995, the District Court
ruled on various Motions for Summary Judgment. In its decision, the Court found
favorably for the Company on several matters relating to the comprehensive
general liability policies but concluded that the pollution liability policies
did not contain pollution coverage for the types of claims associated with the
Tankport site. On appeal, the Third Circuit reversed the District Court and held
that the insurers could not deny coverage for the reasons stated by the District
Court, and the case was remanded to the District Court for trial. In the event
the parties are unable to settle the dispute, the case is scheduled to be tried
beginning September, 1998. Management and its outside legal counsel continue to
believe that recovery of a substantial portion of the cleanup costs will
ultimately be probable of realization. Accordingly, based on estimates of
potential liability, probable realization of insurance recoveries, related
developments of New Jersey law, and the Third Circuit's decision, it is the
Company's belief that the ultimate amount that it would be liable for is
immaterial.

Capitalization

The Company has three classes of common stock: Minerals Stock; Pittston Brink's
Group Common Stock ("Brink's Stock") and Pittston Burlington Group Common Stock
("Burlington Stock") which were designed to provide shareholders with separate
securities reflecting the performance of the Minerals Group, Brink's Group and
Burlington Group, respectively, without diminishing the benefits of remaining a
single corporation or precluding future transactions affecting any of the
Groups. The Minerals Group consists of the Coal Operations and Mineral Ventures
operations of the Company. The Brink's Group consists of the Brink's,
Incorporated ("Brink's") and the Brink's Home Security, Inc. ("BHS") operations
of the Company. The Burlington Group consists of BAX Global Inc. ("BAX Global")
operations of the Company. The Company prepares separate financial statements
for the Minerals, Brink's and Burlington Groups in addition to consolidated
financial information of the Company.

The Company has the authority to issue up to 2,000,000 shares of preferred
stock, par value $10 per share. In January 1994, the Company issued $80.5
million (161,000 shares) of Series C Cumulative Convertible Preferred Stock (the
"Convertible Preferred Stock"), convertible into Minerals Stock. The Convertible
Preferred Stock, which is attributable to the Minerals Group, pays an annual
cumulative dividend of $31.25 per share payable quarterly, in cash, in arrears,
out of all funds of the Company legally available; therefore, when, as and if
declared by the Board and bears a liquidation preference of $500 per share, plus
an attributed amount equal to accrued and unpaid dividends thereon.

Under the share repurchase programs authorized by the Board of Directors of the
Company (the "Board"), the Company purchased shares in the periods presented as
follows:

                                                        Years Ended December 31
(Dollars in millions)                                1997                  1996
- -------------------------------------------------------------------------------
                                                                   
Convertible Preferred Stock:
     Shares                                         1,515                20,920
     Cost                                          $  0.6                   7.9
     Excess carrying amount (a)                    $  0.1                   2.1
===============================================================================

(a) The excess of the carrying amount of the Convertible Preferred Stock over
the cash paid to holders for repurchases made during the years which is deducted
from preferred dividends in the Minerals Group and Company's Statements of
Operations.

In May 1997, the Board authorized an increase in the remaining repurchasing
authority with respect to Convertible Preferred Stock to $25.0 million, leaving
the Company the remaining authority to repurchase an additional $24.4 million of
such stock at December 31, 1997. As of December 31, 1997, the Company had
remaining authority to purchase over time 1 million shares of Pittston Minerals
Group Common Stock. The aggregate purchase price for all common stock was $24.9
million at December 31, 1997. The authority to repurchase shares remains in
effect in 1998.

Dividends

The Board intends to declare and pay dividends, if any, on Minerals Stock based
on the earnings, financial condition, cash flow and business requirements of the
Minerals Group. Since the Company remains subject to Virginia law limitations on
dividends, losses incurred by the Brink's and Burlington Groups could affect the
Company's ability to pay dividends in respect of stock relating to the Minerals
Group. Dividends on Minerals Stock are also limited by the Available Minerals
Dividend Amount as defined in the Company's Articles of Incorporation. The
Available Minerals Dividend Amount may be reduced by activity that reduces
shareholder's equity or the fair value of net assets of the Minerals Group. Such
activity includes net losses by the Minerals Group, dividends paid on the
Minerals Stock and the Convertible Preferred Stock, repurchases of Minerals
Stock and the Convertible Preferred Stock, and foreign currency translation
losses. At December 31, 1997, the Available Minerals Dividend Amount was at
least $15.2 million.

Since its distribution of Minerals Stock in 1993, the Company has paid a cash
dividend to its Minerals Stock shareholders at an annual rate of $0.65 per
share, despite a mixed record of earnings and cash flows for the Minerals Group.
The Company continues its focus on the financial and capital needs of the
Minerals Group companies and, as always, is considering all strategic uses of
available cash, including the dividend rate, with a view towards maximizing
long-term shareholder value.

                                       59

During 1997 and 1996, the Board declared and the Company paid dividends of 65
cents per share of Minerals Stock. In 1997 and 1996, dividends paid on the
cumulative convertible preferred stock were $3.6 million and $3.8 million,
respectively.

Accounting Changes

In 1997, the Minerals Group implemented Statement of Financial Accounting
Standards ("SFAS") No. 128 "Earnings Per Share." SFAS No. 128 replaced the
calculation of primary and fully diluted net income per share with basic and
diluted net income per share (Note 10). Unlike primary net income per share,
basic net income per share excludes any dilutive effects of options, warrants
and convertible securities. Diluted net income per share is very similar to the
previous fully diluted net income per share. All prior-period net income per
share data has been restated to conform with the provisions of SFAS No. 128.

Pending Accounting Changes

The Minerals Group will implement the following new accounting standards.

Statement of Financial Accounting Standards ("SFAS") No. 130, "Reporting
Comprehensive Income", will be implemented in the first quarter of 1998. SFAS
No. 130 establishes standards for the reporting and display of comprehensive
income and its components in financial statements. Comprehensive income
generally represents all changes in shareholders' equity except those resulting
from investments by or distributions to shareholders. With the exception of
foreign currency translation adjustments, such changes are not significant to
the Minerals Group.

SFAS No. 131, "Disclosures about Segments of an Enterprise and Related
Information", will be implemented in the financial statements for the year ended
December 31, 1998. SFAS No. 131 requires publicly-held companies to report
financial and descriptive information about operating segments in financial
statements issued to shareholders for interim and annual periods. The SFAS also
requires additional disclosures with respect to products and services,
geographic areas of operation and major customers. The adoption of this SFAS is
not expected to have a material impact on the financial statements of the
Minerals Group.

Forward Looking Information

Certain of the matters discussed herein, including statements regarding the
Company's readiness for Year 2000, and expectations with regard to future
realizations on metallurgical coal and gold sales involve forward looking
information which is subject to known and unknown risks, uncertainties and
contingencies which could cause actual results, performance and achievements, to
differ materially from those which are anticipated. Such risks, uncertainties
and contingencies, many of which are beyond the control of the Minerals Group
and the Company, include, but are not limited to, overall economic and business
conditions, the demand for the Minerals Group's products, geological conditions,
pricing, the ability of counterparties to perform and other competitive factors
in the industry, new government regulations, changes in the scope of Year 2000
initiatives and delays or problems in the implementation of Year 2000
initiatives by the Minerals Group and/or its suppliers and customers.

                                       60

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
- --------------------------------------------------------------------------------

The Pittston Company and Subsidiaries

STATEMENT OF MANAGEMENT RESPONSIBILITY

The management of The Pittston Company (the "Company") is responsible for
preparing the accompanying consolidated financial statements and for their
integrity and objectivity. The statements were prepared in accordance with
generally accepted accounting principles. Management has also prepared the other
information in the annual report and is responsible for its accuracy.

In meeting our responsibility for the integrity of the consolidated financial
statements, we maintain a system of internal controls designed to provide
reasonable assurance that assets are safeguarded, that transactions are executed
in accordance with management's authorization and that the accounting records
provide a reliable basis for the preparation of the financial statements.
Qualified personnel throughout the organization maintain and monitor these
internal controls on an ongoing basis. In addition, the Company maintains an
internal audit department that systematically reviews and reports on the
adequacy and effectiveness of the controls, with management follow-up as
appropriate.

Management has also established a formal Business Code of Ethics which is
distributed throughout the Company. We acknowledge our responsibility to
establish and preserve an environment in which all employees properly understand
the fundamental importance of high ethical standards in the conduct of our
business.

The Company's consolidated financial statements have been audited by KPMG Peat
Marwick LLP, independent auditors. During the audit they review and make
appropriate tests of accounting records and internal controls to the extent they
consider necessary to express an opinion on the Company's consolidated financial
statements.

The Company's Board of Directors pursues its oversight role with respect to the
Company's consolidated financial statements through the Audit and Ethics
Committee, which is composed solely of outside directors. The Committee meets
periodically with the independent auditors, internal auditors and management to
review the Company's control system and to ensure compliance with applicable
laws and the Company's Business Code of Ethics.

We believe that the policies and procedures described above are appropriate and
effective and do enable us to meet our responsibility for the integrity of the
Company's consolidated financial statements.

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Shareholders
The Pittston Company

We have audited the accompanying consolidated balance sheets of The Pittston
Company and subsidiaries as of December 31, 1997 and 1996, and the related
consolidated statements of operations, shareholders' equity and cash flows for
each of the years in the three-year period ended December 31, 1997. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of The Pittston Company
and subsidiaries as of December 31, 1997 and 1996, and the results of their
operations and their cash flows for each of the years in the three-year period
ended December 31, 1997, in conformity with generally accepted accounting
principles.

As more fully discussed in Note 1 to the consolidated financial statements, the
Company changed its method of accounting for impairment of long-lived assets in
1996.

KPMG Peat Marwick LLP
Stamford, Connecticut

January 28, 1998

                                       61

The Pittston Company and Subsidiaries

CONSOLIDATED BALANCE SHEETS

                                                                               December 31
(Dollars in thousands, except per share amounts)                           1997            1996
===============================================================================================
                                                                                      
ASSETS
Current assets:
Cash and cash equivalents                                           $    69,878          41,217
Short-term investments                                                    2,227           1,856
Accounts receivable:
 Trade (Note 3)                                                         520,817         459,366
 Other                                                                   32,485          32,609
- -----------------------------------------------------------------------------------------------
                                                                        553,302         491,975
 Less estimated amount uncollectible                                     21,985          16,116
- -----------------------------------------------------------------------------------------------
                                                                        531,317         475,859
Coal inventory                                                           31,644          26,495
Other inventory                                                           8,530          10,632
- -----------------------------------------------------------------------------------------------
                                                                         40,174          37,127
Prepaid expenses                                                         32,767          32,798
Deferred income taxes (Note 6)                                           50,442          49,557
- -----------------------------------------------------------------------------------------------
Total current assets                                                    726,805         638,414
Property, plant and equipment, at cost (Notes 1 and 4)                1,167,300         998,607
 Less accumulated depreciation, depletion and amortization              519,658         457,756
- -----------------------------------------------------------------------------------------------
                                                                        647,642         540,851
Intangibles, net of accumulated amortization (Notes 1, 5 and 11)        301,395         317,062
Deferred pension assets (Note 14)                                       123,138         124,241
Deferred income taxes (Note 6)                                           47,826          58,690
Other assets                                                            149,138         153,345
- -----------------------------------------------------------------------------------------------
Total assets                                                        $ 1,995,944       1,832,603
===============================================================================================

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term borrowings                                               $    40,144          31,669
Current maturities of long-term debt (Note 7)                            11,299           5,450
Accounts payable                                                        281,411         271,296
Accrued liabilities:
 Taxes                                                                   45,785          37,774
 Workers' compensation and other claims                                  32,048          33,557
 Payroll and vacation                                                    62,029          39,160
 Miscellaneous (Note 14)                                                170,957         169,785
- -----------------------------------------------------------------------------------------------
                                                                        310,819         280,276
- -----------------------------------------------------------------------------------------------
Total current liabilities                                               643,673         588,691

Long-term debt, less current maturities (Note 7)                        191,812         158,837
Postretirement benefits other than pensions (Note 14)                   231,451         226,697
Workers' compensation and other claims                                  106,378         116,893
Deferred income taxes (Note 6)                                           17,157          15,075
Other liabilities                                                       119,855         119,703
Commitments and contingent liabilities
(Notes 7, 12, 13, 14, 18 and 19)
Shareholders' equity (Notes 9 and 10):
 Preferred stock, par value $10 per share,
 Authorized: 2,000,000 shares $31.25
Series C Cumulative Convertible Preferred Stock,
 Issued: 1997--113,845 shares; 1996 115,360 shares                        1,138           1,154
Pittston Brink's Group common stock, par value $1 per share:
 Authorized: 100,000,000 shares
 Issued: 1997--41,129,679 shares; 1996 41,295,743 shares                 41,130          41,296
Pittston Burlington Group common stock, par value $1 per share:
 Authorized: 50,000,000 shares
 Issued: 1997--20,378,000 shares; 1996 20,711,272 shares                 20,378          20,711
Pittston Minerals Group common stock, par value $1 per share:
 Authorized:  20,000,000 shares
 Issued: 1997--8,405,908 shares; 1996 8,405,908 shares                    8,406           8,406
 Capital in excess of par value                                         430,970         400,135
 Retained earnings                                                      359,940         273,118
 Equity adjustment from foreign currency translation                    (41,762)        (21,188)
 Employee benefits trust, at market value (Note 10)                    (134,582)       (116,925)
- -----------------------------------------------------------------------------------------------
Total shareholders' equity                                              685,618         606,707
- -----------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity                          $ 1,995,944       1,832,603
===============================================================================================

See accompanying notes to consolidated financial statements. 

                                       62

The Pittston Company and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS

                                                                  Years Ended December 31
(In thousands, except per share amounts)                    1997            1996            1995
================================================================================================
                                                                                    
Net sales                                            $   630,626         696,513         722,851
Operating revenues                                     2,763,772       2,394,682       2,191,590
- ------------------------------------------------------------------------------------------------
Net sales and operating revenues                       3,394,398       3,091,195       2,914,441
- ------------------------------------------------------------------------------------------------
Costs and expenses:
Cost of sales                                            609,025         707,497         696,295
Operating expenses                                     2,270,341       1,989,149       1,833,778
Selling, general and administrative expenses             344,008         292,718         263,365
Restructuring and other credits, including
litigation accrual (Notes 15 and 18)                      (3,104)        (47,299)             --
- ------------------------------------------------------------------------------------------------
Total costs and expenses                               3,220,270       2,942,065       2,793,438
- ------------------------------------------------------------------------------------------------
Other operating income, net (Note 16)                     14,000          17,377          26,496
- ------------------------------------------------------------------------------------------------
Operating profit                                         188,128         166,507         147,499
Interest income                                            4,394           3,487           3,395
Interest expense                                         (27,119)        (14,074)        (14,253)
Other expense, net                                        (7,148)         (9,224)         (6,305)
- ------------------------------------------------------------------------------------------------
Income before income taxes                               158,255         146,696         130,336
Provision for income taxes (Note 6)                       48,057          42,542          32,364
- ------------------------------------------------------------------------------------------------
Net income                                               110,198         104,154          97,972
Preferred stock dividends, net (Notes 8 and 10)           (3,481)         (1,675)         (2,762)
- ------------------------------------------------------------------------------------------------
Net income attributed to common shares               $   106,717         102,479          95,210
================================================================================================
Pittston Brink's Group (Note 1):
Net income                                           $    73,622          59,695          51,093
- ------------------------------------------------------------------------------------------------
Net income per common share (Note 8):
  Basic                                              $      1.92            1.56            1.35
  Diluted                                                   1.90            1.54            1.33
- ------------------------------------------------------------------------------------------------
Average common shares outstanding (Note 8):
  Basic                                                   38,273          38,200          37,931
  Diluted                                                 38,791          38,682          38,367
- ------------------------------------------------------------------------------------------------
Pittston Burlington Group (Note 1):
Net income                                           $    32,348          33,801          32,855
- ------------------------------------------------------------------------------------------------
Net income per common share (Note 8):
  Basic                                              $      1.66            1.76            1.73
  Diluted                                                   1.62            1.72            1.68
- ------------------------------------------------------------------------------------------------
Average common shares outstanding (Note 8) :
   Basic                                                  19,448          19,223          18,966
   Diluted                                                19,993          19,681          19,596
================================================================================================
Pittston Minerals Group (Note 1):
Net income attributed to common shares               $       747           8,983          11,262
- ------------------------------------------------------------------------------------------------
Net income per common share (Note 8):
   Basic                                             $      0.09            1.14            1.45
   Diluted                                                  0.09            1.08            1.40
- ------------------------------------------------------------------------------------------------
Average common shares outstanding (Note 8):
   Basic                                                   8,076           7,897           7,786
   Diluted                                                 8,102           9,884          10,001
================================================================================================

See accompanying notes to consolidated financial statements 

                                       63

The Pittston Company and Subsidiaries

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

Years Ended December 31, 1997, 1996 and 1995

                                                          Pittston   Pittston Pittston
                                                   $31.25  Brink's Burlington Minerals                            Equity
                                                 Series C    Group      Group    Group  Capital in             Adjustment
                                               Cumulative   Common     Common   Common   Excess of           from Foreign  Employee
                                                Preferred    Stock      Stock    Stock   Par Value  Retained     Currency  Benefits
(In thousands, except per share amounts)            Stock (Note 1)   (Note 1) (Note 1)    (Note 1)  Earnings  Translation     Trust
===================================================================================================================================
                                                                                                         
Balance at December 31, 1994                    $   1,526   41,595     20,798    8,390     399,672   107,739      (14,276) (117,629)
Net income                                             --       --         --       --          --    97,972           --        --
Stock options exercised (Note 9)                       --      125         62       95       2,581        --           --        --
Tax benefit of stock options exercised (Note 6)        --       --         --       --         720        --           --        --
Foreign currency translation adjustment                --       --         --       --          --        --       (6,429)       --
Remeasurement of employee benefits trust               --       --         --       --       9,947        --           --    (9,947)
Shares released from employee benefits
 trust to employee benefit plan (Note 10)              --       --         --       --        (993)       --           --     7,770
Retirement of stock under share
 repurchase programs (Note 10)                       (164)    (146)       (73)     (79)    (10,294)      148           --        --
Cash dividends declared--Pittston Brink's
 Group $.09 per share, Pittston Burlington
 Group $.22 per share and Pittston
 Minerals Group $.65 per share and Series C
 Preferred Stock $31.25 per share (Note 10)            --       --         --       --          --   (17,131)          --        --
- ------------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1995                        1,362   41,574     20,787    8,406     401,633   188,728      (20,705) (119,806)
Net income                                             --       --         --       --          --   104,154           --        --
Tax benefit of stock options exercised (Note 6)        --       --         --       --       1,734        --           --        --
Cost of Brink's Stock Proposal (Note 10)               --       --         --       --      (2,475)       --           --        --
Foreign currency translation adjustment                --       --         --       --          --        --         (483)       --
Remeasurement of employee benefits trust               --       --         --       --      20,481        --           --   (20,481)
Shares released from employee benefits
 trust (Notes 9 and 10)                                --       --         --       --      (7,659)       --           --    23,362
Retirement of stock under share
 repurchase programs (Note 10)                       (208)    (278)       (76)      --     (13,579)   (2,096)          --        --
Cash dividends declared--Pittston Brink's
 Group $.10 per share, Pittston Burlington
 Group $.24 per share, Pittston
 Minerals Group $.65 per share and Series C
 Preferred Stock $31.25 per share (Note 10)            --       --         --       --          --   (17,668)          --        --
- ------------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1996                        1,154   41,296     20,711    8,406     400,135   273,118      (21,188) (116,925)
Net income                                             --       --         --       --          --   110,198           --        --
Tax benefit of stock options exercised (Note 6)        --       --         --       --       2,045        --           --        --
Foreign currency translation adjustment                --       --         --       --          --        --       (20,574)      --
Remeasurement of employee benefits trust               --       --         --       --      42,118        --            --  (42,118)
Shares released from employee benefits
 trust (Notes 9 and 10)                                --       --         --       --      (7,522)       --            --   24,461
Retirement of stock under share
 repurchase programs (Note 10)                        (16)    (166)      (333)      --      (5,806)   (6,052)           --       --
Cash dividends declared--Pittston Brink's
 Group $.10 per share, Pittston Burlington
 Group $.24 per share, Pittston Minerals
 Group $.65 per share and Series C
 Preferred Stock $31.25 per share (Note 10)            --       --         --       --          --   (17,324)           --       --
- ------------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1997                       $1,138   41,130     20,378    8,406     430,970   359,940       (41,762)(134,582)
====================================================================================================================================

See accompanying notes to consolidated financial statements 

                                      64

The Pittston Company and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                                          Years Ended December 31
(In thousands)                                                       1997          1996           1995
======================================================================================================
                                                                                          
Cash flows from operating activities:
Net income                                                      $ 110,198       104,154         97,972
Adjustments to reconcile net income to net cash
  provided by operating activities:
 Noncash charges and other write-offs                                  --        29,948             --
 Depreciation, depletion and amortization                         128,751       114,618        106,369
 Provision for aircraft heavy maintenance                          34,057        32,057         26,317
 Provision for deferred income taxes                               10,611        19,320         11,115
 Provision (credit) for pensions, noncurrent                          243           935         (3,762)
 Provision for uncollectible accounts receivable                   10,664         7,687          5,762
 Equity in losses (earnings) of unconsolidated
   affiliates, net of dividends received                            2,927        (2,183)         2,306
 Minority interest expense                                          5,467         3,896          1,710
 Gain on sale of property, plant and equipment                     (2,432)        2,835         (6,542)
 Other operating, net                                               8,646         6,105          3,206
 Change in operating assets and liabilities,
   net of effects of acquisitions and dispositions:
  Increase in accounts receivable                                 (39,697)      (53,885)       (38,628)
  (Increase) decrease in inventories                               (2,963)        9,271        (12,026)
  Decrease (increase) in prepaid expenses                             325        (1,869)        (2,157)
  Increase in accounts payable and accrued liabilities             32,562           382          4,491
  (Increase) decrease in other assets                             (11,084)       (7,907)           326
  Decrease in workers' compensation and
    other claims, noncurrent                                      (11,109)       (9,002)       (15,212)
  Decrease in other liabilities                                    (5,859)      (53,522)       (22,458)
  Other, net                                                       (3,198)         (499)        (2,254)
- -------------------------------------------------------------------------------------------------------
Net cash provided by operating activities                         268,109       196,671        156,535
- -------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Additions to property, plant and equipment                       (173,768)     (180,651)      (126,465)     
Proceeds from disposal of property, plant and equipment             4,064        11,310         22,539
Aircraft heavy maintenance expenditures                           (29,748)      (23,373)       (22,356)
Acquisitions, net of cash acquired,
  and related contingency payments                                (65,494)       (4,078)        (3,372)
Other, net                                                          7,589         5,181          1,182
- -------------------------------------------------------------------------------------------------------
Net cash used by investing activities                            (257,357)     (191,611)      (126,472)
- -------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Additions to debt                                                 158,021        28,642         29,866
Reductions of debt                                               (116,030)      (14,642)       (25,891)
Repurchase of stock of the Company                                (12,373)      (16,237)       (10,608)
Proceeds from exercise of stock options
  and employee stock purchase plan                                  4,708         5,487          4,261
Dividends paid                                                    (16,417)      (17,441)       (17,186)
Cost of stock proposal                                                 --        (2,475)            --
- -------------------------------------------------------------------------------------------------------
Net cash provided (used) by financing activities                   17,909       (16,666)       (19,558)
- -------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents               28,661       (11,606)        10,505
Cash and cash equivalents at beginning of year                     41,217        52,823         42,318
- -------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of year                        $  69,878        41,217         52,823
=======================================================================================================

See accompanying notes to consolidated financial statements 

                                       65

The Pittston Company and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share amounts)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

As used herein, the "Company" includes The Pittston Company and its direct and
indirect subsidiaries, except as otherwise indicated by the context. The Company
is comprised of three separate groups - Pittston Brink's Group, Pittston
Burlington Group, and Pittston Minerals Group. The Pittston Brink's Group
consists of the Brink's, Incorporated ("Brink's") and Brink's Home Security,
Inc. ("BHS") operations of the Company. The Pittston Burlington Group consists
of the BAX Global Inc. ("BAX Global") operations of the Company. The Pittston
Minerals Group consists of the Pittston Coal Company ("Coal Operations") and
Pittston Mineral Ventures ("Mineral Ventures") operations of the Company. The
Company prepares separate financial statements for the Minerals, Brink's and
Burlington Groups in addition to consolidated financial information of the
Company.

Principles of Consolidation

The accompanying consolidated financial statements reflect the accounts of the
Company and its majority-owned subsidiaries. The Company's interests in 20% to
50% owned companies are carried on the equity method unless control exists, in
which case, consolidation occurs. All material intercompany items and
transactions have been eliminated in consolidation. Certain prior year amounts
have been reclassified to conform to the current year's financial statement
presentation.

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, demand deposits and investments
with original maturities of three months or less.

Short-term Investments

Short-term investments are those with original maturities in excess of three
months, but not exceeding one year, and are carried at cost which approximates
market.

Inventories

Inventories are stated at cost (determined under the first-in, first-out or
average cost method) or market, whichever is lower.

Property, Plant and Equipment

Expenditures for maintenance and repairs are charged to expense, and the costs
of renewals and betterments are capitalized. Depreciation is provided
principally on the straight-line method at varying rates depending upon
estimated useful lives. Depletion of bituminous coal lands is provided on the
basis of tonnage mined in relation to the estimated total of recoverable tonnage
in the ground.

Mine development costs, primarily included in bituminous coal lands, are
capitalized and amortized over the estimated useful life of the mine. These
costs include expenses incurred for site preparation and development as well as
operating deficits incurred at the mines during a development stage. A mine is
considered under development until all planned production units have been placed
in operation.

Valuation of coal properties is based primarily on mining plans and conditions
assumed at the time of the evaluation. These valuations could be impacted by
actual economic conditions which differ from those assumed at the time of the
evaluation.

Subscriber installation costs for home security systems provided by BHS are
capitalized and depreciated over the estimated life of the assets and are
included in machinery and equipment. The security system that is installed
remains the property of BHS and is capitalized at the cost to bring the revenue
producing asset to its intended use. When an installation is identified for
disconnection, the remaining net book value of the installation is fully written
off and charged to depreciation expense.

Intangibles

The excess of cost over fair value of net assets of businesses acquired is
amortized on a straight-line basis over the estimated periods benefited.

The Company evaluates the carrying value of intangibles and the periods of
amortization to determine whether events and circumstances warrant revised
estimates of asset value or useful lives. The Company annually assesses the
recoverability of the excess of cost over net assets acquired by determining
whether the amortization of the asset balance over its remaining life can be
recovered through projected undiscounted future operating cash flows. Evaluation
of asset value as well as periods of amortization are performed on a
disaggregated basis at each of the Company's operating units.

Goodwill allocated to a potentially impaired asset will be identified with that
asset in performing an impairment test in accordance with Statement of Financial
Accounting Standards ("SFAS") No. 121. If such tests indicate that an impairment
exists, the carrying amount of the identified goodwill would be eliminated
before making any reduction of the carrying amounts of impaired long-lived
assets.

                                       66

Coal Supply Contracts

Coal supply contracts consist of contracts to supply coal to customers at
certain negotiated prices over a period of time, which have been acquired from
other coal companies, and are stated at cost at the time of acquisition, which
approximates fair market value. The capitalized cost of such contracts is
amortized over the term of the contract on the basis of tons of coal sold under
the contract.

Income Taxes

Income taxes are accounted for in accordance with SFAS No. 109, "Accounting for
Income Taxes", which requires recognition of deferred tax liabilities and assets
for the expected future tax consequences of events that have been included in
the financial statements or tax returns. Under this method, deferred tax
liabilities and assets are determined based on the difference between the
financial statement and tax bases of assets and liabilities using enacted tax
rates in effect for the year in which these items are expected to reverse.

Pneumoconiosis (Black Lung) Expense

The Company acts as self-insurer with respect to almost all black lung benefits.
Provision is made for estimated benefits based on annual actuarial reports
prepared by outside actuaries. The excess of the present value of expected
future benefits over the accumulated book reserves is recognized over the
amortization period as a level percentage of payroll. Cumulative actuarial gains
or losses are calculated periodically and amortized on a straight-line basis.
Assumptions used in the calculation of the actuarial present value of black lung
benefits are based on actual retirement experience of the Company's coal
employees, black lung claims incidence for active miners, actual dependent
information, industry turnover rates, actual medical and legal cost experience
and projected inflation rates. As of December 31, 1997 and 1996, the actuarially
determined value of estimated future black lung benefits discounted at 6% was
approximately $55,000 and $57,000, respectively, and is included in workers'
compensation and other claims. Based on actuarial data, the amount credited to
operations was $2,451 in 1997, $2,216 in 1996 and $1,402 in 1995. In addition,
the Company accrued additional expenses for black lung benefits related to
federal and state assessments, legal and administration expenses and other self
insurance costs. These costs and expenses amounted to $1,936 in 1997, $1,849 in
1996 and $2,569 in 1995.

Reclamation Costs

Expenditures relating to environmental regulatory requirements and reclamation
costs undertaken during mine operations are charged against earnings as
incurred. Estimated site restoration and post closure reclamation costs are
charged against earnings using the units of production method over the expected
economic life of each mine. Accrued reclamation costs are subject to review by
management on a regular basis and are revised when appropriate for changes in
future estimated costs and/or regulatory requirements.

Postretirement Benefits Other Than Pensions

Postretirement benefits other than pensions are accounted for in accordance with
SFAS No. 106, "Employers' Accounting for Postretirement Benefits Other Than
Pensions", which requires employers to accrue the cost of such retirement
benefits during the employees' service with the Company.

Accounting for Stock Based Compensation

The Company has implemented the disclosure-only provisions of SFAS No.
123  "Accounting for Stock Based Compensation" (Note 9). The Company
continues to measure compensation expense for its stock-based
compensation plans using the intrinsic value based methods of
accounting prescribed by Accounting Principles Board Opinion ("APB")
No. 25, "Accounting for Stock Issued to Employees."

Foreign Currency Translation

Assets and liabilities of foreign subsidiaries have been translated at current
exchange rates, and related revenues and expenses have been translated at
average rates of exchange in effect during the year. Resulting cumulative
translation adjustments have been recorded as a separate component of
shareholders' equity. Translation adjustments relating to subsidiaries in
countries with highly inflationary economies are included in net income, along
with all transaction gains and losses for the period.

A portion of the Company's financial results is derived from activities in
several foreign countries, each with a local currency other than the U.S.
dollar. Because the financial results of the Company are reported in U.S.
dollars, they are affected by the changes in the value of various foreign
currencies in relation to the U.S. dollar. However, the Company's international
activity is not concentrated in any single currency, which reduces the risks of
foreign currency rate fluctuations.

Financial Instruments

The Company uses foreign currency forward contracts to hedge the risk of changes
in foreign currency rates associated with certain transactions denominated in
various currencies. The Company also utilizes other financial instruments to
protect against adverse price movements in gold, which the Company produces, and
jet fuel and diesel fuel which the Company consumes as well as interest rate
changes in certain variable rate obligations.

Gains and losses on these contracts, designated as effective hedges, are
deferred and recognized as part of the specific transaction hedged. Since they
are accounted for as hedges, the fair value of these contracts is not recognized
in the Company's Financial Statements. Gains or losses resulting from the early
termination of such contracts are deferred and amortized as an adjustment to the
currency transaction hedged, the realization on gold sales, the yield of
variable rate obligations, or the cost of diesel and jet fuel over the remaining
period originally covered by

                                       67

the terminated contracts. In addition, if the underlying items being hedged were
retired prior to maturity, the unamortized gain or loss resulting from the early
termination of the related interest rate swap would be included in the gain or
loss on the extinguishment of the obligation.

Revenue Recognition

Coal Operations--Coal sales are generally recognized when coal is loaded onto
transportation vehicles for shipment to customers. For domestic sales, this
generally occurs when coal is loaded onto railcars at mine locations. For export
sales, this generally occurs when coal is loaded onto marine vessels at terminal
facilities.

Mineral Ventures--Gold sales are recognized when products are shipped to a
refinery. Settlement adjustments arising from final determination of weights and
assays are reflected in sales when received.

BAX Global--Revenues related to transportation services are recognized, together
with related transportation costs, on the date shipments physically depart from
facilities en route to destination locations. Financial statements resulting
from existing recognition policies do not materially differ from the allocation
of revenue between reporting periods based on relative transit times in each
reporting period with expenses recognized as incurred.

Brink's--Revenues are recognized when services are performed.

BHS--Monitoring revenues are recognized when earned and amounts paid in advance
are deferred and recognized as income over the applicable monitoring period,
which is generally one year or less.

Net Income Per Share

Basic and diluted net income per share for the Brink's Group and the Burlington
Group are computed by dividing net income for each Group by the basic
weighted-average common shares outstanding and the diluted weighted-average
common shares outstanding, respectively. Diluted weighted-average common shares
outstanding includes additional shares assuming the exercise of stock options.
However, when the exercise of stock options is antidilutive, they are excluded
from the calculation.

Basic net income per share for the Minerals Group is computed by dividing net
income attributed to common shares (net income less preferred stock dividends)
by the basic weighted-average common shares outstanding. Diluted net income per
share for the Minerals Group is computed by dividing net income by the diluted
weighted-average common shares outstanding. Diluted weighted-average common
shares outstanding includes additional shares assuming the exercise of stock
options and the conversion of the Company's $31.25 Series C Cumulative
Convertible Preferred Stock (the "Convertible Preferred Stock"). However, when
the exercise of stock options or the conversion of Convertible Preferred Stock
is antidilutive, they are excluded from the calculation.

The shares of Brink's Stock, Burlington Stock and Minerals Stock held in the
Pittston Company Employee Benefits Trust ("the Trust" - See Note 10) are subject
to the treasury stock method and effectively are not included in the basic and
diluted net income per share calculations.

Use of Estimates

In accordance with generally accepted accounting principles, management of the
Company has made a number of estimates and assumptions relating to the reporting
of assets and liabilities and the disclosure of contingent assets and
liabilities to prepare these financial statements. Actual results could differ
from those estimates.

Accounting Changes

In 1997, the Company adopted SFAS No. 128 "Earnings Per Share." SFAS No. 128
replaced the calculation of primary and fully diluted net income per share with
basic and diluted net income per share (Note 8). Unlike primary net income per
share, basic net income per share excludes any dilutive effects of options,
warrants and convertible securities. Diluted net income per share is very
similar to the previous fully diluted net income per share. All prior-period net
income per share data has been restated to conform with the provisions of SFAS
No. 128.

In 1996, the Company adopted SFAS No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of". SFAS No. 121
requires companies to review assets for impairment whenever circumstances
indicate that the carrying amount of an asset may not be recoverable. SFAS No.
121 resulted in a pretax charge to earnings in 1996 for the Company's Coal
Operations of $29,948 ($19,466 after-tax), of which $26,312 was included in cost
of sales and $3,636 was included in selling, general and administrative
expenses. Assets for which the impairment loss was recognized consisted of
property, plant and equipment, advanced royalties and goodwill. These assets
primarily related to mines scheduled for closure in the near term and idled
facilities and related equipment.

Pending Accounting Changes

The Company will implement SFAS No. 130, "Reporting Comprehensive
Income" in the first quarter of 1998. SFAS No. 130 establishes standards
for the reporting and display of comprehensive income and its components
in financial statements. Comprehensive income generally represents all

                                       68

changes in shareholders' equity except those resulting from investments by or
distributions to shareholders. With the exception of foreign currency
translation adjustments, such changes are not significant to the Company.

SFAS No. 131, "Disclosures about Segments of an Enterprise and Related
Information", will be implemented in the financial statements for the year ended
December 31, 1998. SFAS No. 131 requires publicly-held companies to report
financial and descriptive information about operating segments in financial
statements issued to shareholders for interim and annual periods. The SFAS also
requires additional disclosures with respect to products and services,
geographic areas of operation and major customers. The adoption of this SFAS is
not expected to have a material impact on the financial statements of the
Company.

2. FINANCIAL INSTRUMENTS

Financial instruments which potentially subject the Company to concentrations of
credit risk consist principally of cash and cash equivalents, short-term
investments and trade receivables. The Company places its cash and cash
equivalents and short-term investments with high credit quality financial
institutions. Also, by policy, the Company limits the amount of credit exposure
to any one financial institution. Concentrations of credit risk with respect to
trade receivables are limited due to the large number of customers comprising
the Company's customer base, and their dispersion across many different
industries and geographic areas. Credit limits, ongoing credit evaluation and
account monitoring procedures are utilized to minimize the risk of loss from
nonperformance on trade receivables.

The following details the fair values of financial instruments for which it is
practicable to estimate the value:

Cash and cash equivalents and short-term investments
The carrying amounts approximate fair value because of the short maturity of
these instruments.

Accounts receivable, accounts payable and accrued liabilities
The carrying amounts approximate fair value because of the short-term nature of
these instruments.

Debt

The aggregate fair value of the Company's long-term debt obligations, which is
based upon quoted market prices and rates currently available to the Company for
debt with similar terms and maturities, approximates the carrying amount.

Off-balance sheet instruments

The Company enters into various off-balance sheet financial instruments, as
discussed below, to hedge its foreign currency and other market exposures. The
risk that counterparties to such instruments may be unable to perform is
minimized by limiting the counterparties to major financial institutions. The
Company does not expect any losses due to such counterparty default.

Foreign currency forward contracts--The Company enters into foreign currency
forward contracts, from time to time, with a duration of up to two years as a
hedge against liabilities denominated in various currencies. These contracts
minimize the Company's exposure to exchange rate movements related to cash
requirements of foreign operations denominated in various currencies. At
December 31, 1997, the total notional value of foreign currency forward
contracts outstanding was $21,794 and the fair value of the forward contracts
approximated notional value.

Gold contracts--In order to protect itself against downward movements in gold
prices, the Company hedges a portion of its share of gold sales from the Stawell
gold mine primarily through forward sales contracts. At December 31, 1997,
41,500 ounces of gold, representing approximately 19% of the Company's share of
Stawell's proven and probable reserves, were sold forward under forward sales
contracts that mature periodically through mid-1999. Because only a portion of
its future production is currently sold forward, the Company can take advantage
of increases and is exposed to decreases in the spot price of gold. At December
31, 1997, the fair value of the Company's forward sales contracts was not
significant.

Fuel contracts--The Company has hedged a portion of its jet fuel and diesel fuel
requirements through several commodity option transactions that are intended to
protect against significant increases in jet fuel and diesel fuel prices. At
December 31, 1997, these transactions aggregated 33.3 million gallons for jet
fuel and 8.7 million gallons for diesel fuel. The contracts mature periodically
throughout 1998. The fair value of these fuel hedge transactions may fluctuate
over the course of the contract period due to changes in the supply and demand
for oil and refined products. Thus, the economic gain or loss, if any, upon
settlement of the contracts may differ from the fair value of the contracts at
an interim date. At December 31, 1997, the fair value of these contracts was not
significant.

Interest rate contracts--In connection with the aircraft leasing by BAX Global,
the Company has entered into an interest rate swap agreement. This variable to
fixed interest rate swap agreement has a notional value of $30,000 which fixes
the Company's variable interest rate on these leases at 7.05% through January 2,
1998. At December 31, 1997, the fair value of the contract was not significant.

                                       69

As further discussed in Note 7, in 1996 and 1995, the Company entered into two
variable to fixed interest rate swap agreements related to the $100,000 term
loan outstanding under the Facility. At December 31, 1997, the fair value of
these contracts was not significant.

3. ACCOUNTS RECEIVABLE--TRADE

For each of the years in the three-year period ended December 31, 1997, the
Company maintained agreements with financial institutions whereby it had the
right to sell certain coal receivables to those institutions. Certain agreements
contained provisions for sales with recourse. In 1997 and 1996, total coal
receivables of $23,844 and $15,390, respectively, were sold under such
agreements. As of December 31, 1997 and 1996, receivables sold which remained to
be collected totaled $23,844 and $5,183, respectively.

4. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment, at cost, consists of the following:

                                                              As of December 31
                                                      1997                 1996
- -------------------------------------------------------------------------------
                                                                  
Bituminous coal lands                             $107,212              101,988
Land, other than coal lands                         37,908               31,190
Buildings                                          159,726              120,318
Machinery and equipment                            862,454              745,111
- -------------------------------------------------------------------------------
Total                                           $1,167,300              998,607
===============================================================================

The estimated useful lives for property, plant and equipment are as follows:

                                                                         Years
- -------------------------------------------------------------------------------
                                                                                               
Buildings                                                             10 to 40
Machinery and equipment                                                2 to 30
==============================================================================

Depreciation and depletion of property, plant and equipment aggregated $106,584
in 1997, $92,805 in 1996 and $81,465 in 1995.

Capitalized mine development costs totaled $9,756 in 1997,  $8,144 in 1996
and $10,118 in 1995.

Changes in capitalized subscriber installation costs for home security systems
included in machinery and equipment were as follows:

                                                        Years Ended December 31
                                                      1997       1996      1995
- -------------------------------------------------------------------------------
                                                                
Capitalized subscriber installation costs
     beginning of year                            $134,850    105,336    81,445
Capitalized cost of security system
     installations                                  64,993     57,194    44,488
Depreciation, including amounts recognized
     to fully depreciate capitalized costs for
     installations disconnected during the
     year                                          (27,051)   (27,680)  (20,597)
- -------------------------------------------------------------------------------
Capitalized subscriber installation costs
     end of year                                  $172,792    134,850   105,336
===============================================================================

Based on demonstrated retention of customers, beginning in the first quarter of
1997, BHS prospectively adjusted its annual depreciation rate from 10 to 15
years for capitalized subscribers' installation costs. This change more
accurately matches depreciation expense with monthly recurring revenue generated
from customers. This change in accounting estimate reduced depreciation expense
for capitalized installation costs in 1997 for the Brink's Group and the BHS
segment by $8,915. The effect of this change increased net income of the Brink's
Group in 1997 by $5,794 ($0.15 per basic and diluted common share of Brink's
stock).

New subscribers were approximately 105,600 in 1997, 98,500 in 1996 and 82,600 in
1995.

As of January 1, 1992, BHS elected to capitalize categories of costs not
previously capitalized for home security system installations. This change in
accounting principle is preferable because it more accurately reflects
subscriber installation costs. The additional costs not previously capitalized
consisted of costs for installation labor and related benefits for supervisory,
installation scheduling, equipment testing and other support personnel (in the
amount of $2,600 in 1997, $2,517 in 1996 and $2,712 in 1995) and costs incurred
for maintaining facilities and vehicles dedicated to the installation process
(in the amount of $2,343 in 1997, $2,022 in 1996 and $1,813 in 1995). The effect
of this change in accounting principle was to increase operating profit of the
Brink's Group in 1997, 1996 and 1995 by $4,943, $4,539 and $4,525, respectively,
and net income of the Brink's Group in 1997, 1996 and 1995 by $3,213, $2,723 and
$2,720, respectively, or by $0.08 per basic and diluted common share in 1997 and
$0.07 per basic and diluted common share in 1996 and 1995. Prior to January 1,
1992, the records needed to identify such costs were not available. Thus, it was
impossible to accurately calculate the effect on retained earnings as of January
1, 1992. However, the Company believes the effect on retained earnings as of
January 1, 1992, was immaterial.

                                       70

Because capitalized subscriber installation costs for prior periods were not
adjusted for the change in accounting principle, installation costs for
subscribers in those years will continue to be depreciated based on the lesser
amounts capitalized in prior periods. Consequently, depreciation of capitalized
subscriber installation costs in the current year and until such capitalized
costs prior to January 1, 1992 are fully depreciated will be less than if such
prior periods' capitalized costs had been adjusted for the change in accounting.
However, the Company believes the effect on net income in 1997, 1996 and 1995
was immaterial.

5. INTANGIBLES

Intangibles consist entirely of the excess of cost over fair value of net assets
of businesses acquired and are net of accumulated amortization of $106,174 at
December 31, 1997 and $96,994 at December 31, 1996. The estimated useful life of
intangibles is generally forty years. Amortization of intangibles aggregated
$10,518 in 1997, $10,560 in 1996 and $10,352 in 1995.

In 1997, the Company acquired the remaining 35% interest in Brink's subsidiary
in the Netherlands ("Nedlloyd") for approximately $2,000 with additional
contingent payments of up to $2,000 to be paid over the next two years based on
certain performance criteria of Brink's-Nedlloyd. The original 65% acquisition
in the Nedlloyd partnership resulted in goodwill of approximately $13,200. The
acquisition of the remaining 35% interest resulted in a credit to goodwill of
approximately $7,400, as the remaining interest was purchased for less than the
book value.

6. INCOME TAXES

The provision (credit) for income taxes consists of the following:

                             U.S.
                          Federal        Foreign           State           Total
- --------------------------------------------------------------------------------
                                                              
1997:
Current                   $18,707         14,390           4,349          37,446
Deferred                   13,506         (3,172)            277          10,611
- --------------------------------------------------------------------------------
Total                     $32,213         11,218           4,626          48,057
================================================================================
1996:
Current                   $ 7,721         11,201           4,300          23,222
Deferred                   22,878         (3,731)            173          19,320
- --------------------------------------------------------------------------------
Total                     $30,599          7,470           4,473          42,542
================================================================================
1995:
Current                   $10,717          6,039           4,493          21,249
Deferred                   13,797         (1,866)           (816)         11,115
- --------------------------------------------------------------------------------
Total                     $24,514          4,173           3,677          32,364
================================================================================

The significant components of the deferred tax expense were as follows:

                                                        Years Ended December 31
                                                 1997         1996         1995
- -------------------------------------------------------------------------------
                                                                
Deferred tax expense,exclusive
     of the components listed below           $ 6,950       19,171       16,376
Net operating loss carryforwards               (4,345)      (5,065)      (2,911)
Alternative minimum tax credits                 7,613        4,200       (2,603)
Change in the valuation allowance for
     deferred tax assets                          393        1,014          253
- -------------------------------------------------------------------------------
Total                                         $10,611       19,320       11,115
===============================================================================

The tax benefit for compensation expense related to the exercise of certain
employee stock options for tax purposes in excess of compensation expense for
financial reporting purposes is recognized as an adjustment to shareholders'
equity.

The components of the net deferred tax asset as of December 31, 1997 and
December 31, 1996 were as follows:

                                                             1997          1996
- -------------------------------------------------------------------------------
                                                                 
Deferred tax assets:
Accounts receivable                                      $  6,448         5,305
Postretirement benefits other than pensions               101,617       100,444
Workers' compensation and other claims                     50,139        53,760
Other liabilities and reserves                             81,084        81,413
Miscellaneous                                              16,062        11,358
Net operating loss carryforwards                           21,013        16,668
Alternative minimum tax credits                            23,631        30,325
Valuation allowance                                        (9,853)       (9,460)
- -------------------------------------------------------------------------------
Total deferred tax assets                                 290,141       289,813
- -------------------------------------------------------------------------------
Deferred tax liabilities:
Property, plant and equipment                              59,787        50,968
Pension assets                                             49,431        49,273
Other assets                                               15,538        14,679
Investments in foreign affiliates                           9,331        10,090
Miscellaneous                                              74,943        71,631
- -------------------------------------------------------------------------------
Total deferred tax liabilities                            209,030       196,641
- -------------------------------------------------------------------------------
Net deferred tax asset                                   $ 81,111        93,172
===============================================================================

The valuation allowance relates to deferred tax assets in certain foreign and
state jurisdictions.

Based on the Company's historical and expected future taxable earnings,
management believes it is more likely than not that the Company will realize the
benefit of the existing deferred tax asset at December 31, 1997.

                                       71

The following table accounts for the difference between the actual tax provision
and the amounts obtained by applying the statutory U.S. federal income tax rate
of 35% in 1997, 1996 and 1995 to the income before income taxes.

                                                        Years Ended December 31
                                                   1997       1996         1995
- -------------------------------------------------------------------------------
                                                               
Income before income taxes:
United States                                 $ 110,070    101,463       97,989
Foreign                                          48,185     45,233       32,347
- -------------------------------------------------------------------------------
Total                                         $ 158,255    146,696      130,336
===============================================================================
Tax provision computed at statutory
     rate                                     $  55,389     51,344       45,618
Increases (reductions) in taxes due to:
Percentage depletion                             (7,407)    (7,644)      (9,861)
State income taxes (net of federal
     tax benefit)                                 2,614      1,894        1,664
Goodwill amortization                             2,289      2,404        2,825
Difference between total taxes on
     foreign income and the U.S. 
     federal statutory rate                      (4,642)    (6,384)      (6,261)
Change in the valuation allowance for
     deferred tax assets                            393      1,014          253
Miscellaneous                                      (579)       (86)      (1,874)
- -------------------------------------------------------------------------------
Actual tax provision                          $  48,057     42,542       32,364
===============================================================================

It is the policy of the Company to accrue deferred income taxes on temporary
differences related to the financial statement carrying amounts and tax bases of
investments in foreign subsidiaries and affiliates which are expected to reverse
in the foreseeable future. As of December 31, 1997 and December 31, 1996 the
unrecognized deferred tax liability for temporary differences of approximately
$29,986 and $40,417, respectively, related to investments in foreign
subsidiaries and affiliates that are essentially permanent in nature and not
expected to reverse in the foreseeable future was approximately $10,495 and
$14,146, respectively.

The Company and its domestic subsidiaries file a consolidated U.S.
federal income tax return.

As of December 31, 1997, the Company had $23,631 of alternative minimum tax
credits available to offset future U.S. federal income taxes and, under current
tax law, the carryforward period for such credits is unlimited.

The tax benefit of net operating loss carryforwards as of December 31, 1997 was
$21,013 and related to various state and foreign taxing jurisdictions. The
expiration periods primarily range from 5 to 15 years.

7. LONG-TERM DEBT

Total long-term debt consists of the following:

                                                              As of December 31
                                                               1997        1996
- --------------------------------------------------------------------------------
                                                                 
Senior obligations:
U.S. dollar term loan due 2001 (year-end
     rate 6.24% in 1997 and 5.97% in 1996)                 $100,000     100,000
Revolving credit notes due 2001 (year-end
     rate 5.92% in 1997 and 7.01% in 1996)                   25,900      23,200
Venezuelan bolivar term loan due 2000
 (1997 year-end rate 26.40%)                                 31,072          --
Netherlands guilder term loan due 1998 (1997
 year-end rate 4.29%)                                        10,700          --
All other                                                    18,859      16,111
- --------------------------------------------------------------------------------
                                                            186,531     139,311
- --------------------------------------------------------------------------------
Subordinated obligations:
     4% subordinated debentures due 1997                         --      14,348
- --------------------------------------------------------------------------------
Obligations under capital  leases (average rate
     10.43% in 1997 and 11.43% in 1996)                       5,281       5,178
- --------------------------------------------------------------------------------
Total long-term debt, less current maturities               191,812     158,837

Current maturities of long-term debt:
     Senior obligations                                       8,617       3,324
     Capital leases                                           2,682       2,126
- --------------------------------------------------------------------------------
Total current maturities of long-term debt                   11,299       5,450
- --------------------------------------------------------------------------------
Total long-term debt including current maturities          $203,111     164,287
================================================================================

For the four years through December 31, 2002, minimum repayments of long-term
debt outstanding are as follows:

                         
                   1999     $  14,555
                   2000        25,269
                   2001       140,710
                   2002         2,839

The Company has a $350,000 credit agreement with a syndicate of banks (the
"Facility"). The Facility includes a $100,000 term loan and permits additional
borrowings, repayments and reborrowings of up to an aggregate of $250,000. The
maturity date of both the term loan and the revolving credit portion of the
Facility is May 2001. Interest on borrowings under the Facility is payable at
rates based on prime, certificate of deposit, Eurodollar or money market rates.
A term loan of $100,000 was outstanding at December 31, 1997 and 1996.
Additional borrowings of $25,900 and $23,200 were outstanding at December 31,
1997 and 1996, respectively. The Company pays commitment fees (.125% per annum
at December 3 1, 1997) on the unused portions of the Facility.

                                       72

The Company has two interest rate swap agreements which effectively convert a
portion of its $100,000 variable rate term loan to fixed rates. During 1995, the
Company entered into a variable to fixed interest rate swap agreement, maturing
in July 1998, which fixes the Company's interest rate at 5.80% on $20,000 in
face amount of debt. During 1996, the Company entered into another variable to
fixed interest rate swap agreement, maturing in February 1998, which fixes the
Company's interest rate at 4.9% on an initial $5,000 in face amount of debt. The
notional amount increased by $5,000 each quarter through the first quarter of
1997. The notional amount outstanding at December 31, 1997 was $20,000.

In 1997, the Company entered into a borrowing arrangement in connection
with its acquisition of Cleton & Co. ("Cleton"). The loan, denominated in
Netherland guilders equivalent to U.S. $10,700, matured in January 1998
and was extended to March 1998. This debt is classified as long-term in
accordance with the Company's intention and ability to refinance the
obligation on a long-term basis.

In 1997, the Company entered into a borrowing arrangement with a syndicate of
local Venezuelan banks in connection with the acquisition of Custodia y Traslado
de Valores, C.A. ("Custravalca"). The borrowings consisted of a long-term loan
denominated in Venezuelan bolivars equivalent to U.S. $40,000 and a $10,000
short-term loan denominated in U.S. dollars which was repaid during 1997. The
long-term loan bears interest based on the Venezuelan prime rate and is payable
in installments through the year 2000. At December 31, 1997, the long-term
portion of the Venezuelan debt was the equivalent of U.S. $31,072. Approximately
$4,800 is payable in 1998 and is included in current maturities of long-term
debt.

The 4% subordinated debentures became due July 1,1997. The Company repaid the
debentures from borrowings under the Facility.

Under the terms of the Facility, the Company has agreed to maintain at least
$400,000 of Consolidated Net Worth, as defined, and can incur additional
indebtedness of approximately $610,000 at December 31, 1997.

Various international subsidiaries maintain lines of credit and overdraft
facilities aggregating approximately $131,000 with a number of banks on either a
secured or unsecured basis. At December 31, 1997, $38,766 was outstanding under
such agreements and was included in short-term borrowings. Average interest
rates on the lines of credit and overdraft facilities at December 31, 1997
approximated 7.1%. Commitment fees paid on the lines of credit and overdraft
facilities are not significant.

At December 31, 1997, the Company had outstanding unsecured letters of credit
totaling $76,362 primarily supporting the Company's obligations under its
various self-insurance programs and aircraft lease obligations.

8. NET INCOME PER SHARE

The following is a reconciliation between the calculation of basic and diluted
net income per share:

                                                        Years Ended December 31
Brink's Group                                          1997      1996      1995
================================================================================
                                                               
Numerator:
Net income - Basic and diluted net
   income per share numerator                       $73,622    59,695    51,093

Denominator:
Basic weighted average common
  shares outstanding                                 38,273    38,200    37,931
Effect of dilutive securities:
   Employee stock options                               518       482       436
- --------------------------------------------------------------------------------
Diluted weighted average common
  shares outstanding                                 38,791    38,682    38,367
================================================================================

Options to purchase 19 and 23 shares of common stock, at prices between $37.06
and $38.16, and between $28.63 and $29.50 per share were outstanding in 1997 and
1996, respectively, but were not included in the computation of diluted net
income per share because the options' exercise price was greater than the
average market price of the common shares and, therefore, the effect would be
antidilutive. No options were excluded from the computation of diluted net
income per share in 1995.

                                                        Years Ended December 31
Burlington Group                                       1997      1996      1995
================================================================================
                                                                
Numerator:
Net income - Basic and diluted net
   income per share numerator                       $32,348    33,801    32,855

Denominator:
Basic weighted average common
   shares outstanding                                19,448    19,223    18,966
Effect of dilutive securities:
    Employee stock options                              545       458       630
- --------------------------------------------------------------------------------
Diluted weighted average common shares
    outstanding                                      19,993    19,681    19,596
================================================================================

                                       73

Options to purchase 7 and 30 shares of common stock at $27.91 and at prices
between $20.19 and $21.13 per share, were outstanding in 1997 and 1996,
respectively, but were not included in the computation of diluted net income per
share because the options' exercise price was greater than the average market
price of the common shares and, therefore, the effect would be antidilutive. No
options were excluded from the computation of diluted net income per share in
1995.

                                                        Years Ended December 31
Minerals Group                                         1997      1996      1995
================================================================================
                                                               
Numerator:
Net income                                         $  4,228    10,658    14,024
Convertible Preferred Stock dividends                (3,481)   (1,675)   (2,762)
- --------------------------------------------------------------------------------
Basic net income per share numerator                    747     8,983    11,262
Effect of dilutive securities:
  Convertible Preferred Stock dividends                  --     1,675     2,762
- --------------------------------------------------------------------------------
Diluted net income per share
 numerator                                           $  747    10,658    14,024

Denominator:
Basic weighted average common
   shares outstanding                                 8,076     7,897     7,786
Effect of dilutive securities:
  Convertible Preferred Stock                            --     1,945     2,186
  Employee stock options                                 26        42        29
- --------------------------------------------------------------------------------
Diluted weighted average common shares
  outstanding                                         8,102     9,884    10,001
================================================================================

Options to purchase 446, 300 and 338 shares of common stock, at prices between
$12.18 and $25.74, $13.43 and $25.74 and $14.01 and $25.74 per share, were
outstanding in 1997, 1996 and 1995, respectively, but were not included in the
computation of diluted net income per share because the options' exercise price
was greater than the average market price of the common shares and, therefore,
the effect would be antidilutive.

The conversion of preferred stock to 1,785 shares of common stock has been
excluded in the computation of diluted net income per share in 1997 because the
effect of the assumed conversion would be antidilutive.

9. STOCK OPTIONS

The Company has various stock-based compensation plans as described below.

Stock Option Plans

The Company grants options under its 1988 Stock Option Plan (the "1988 Plan") to
executives and key employees and under its Non-Employee Directors' Stock Option
Plan (the "Non-Employee Plan") to outside directors, to purchase common stock at
a price not less than 100% of quoted market value at the date of grant. The 1988
Plan options can be granted with a maximum term of ten years and can vest within
six months from the date of grant. The majority of grants made in 1997, 1996 and
1995 have a maximum term of six years and vest 100% at the end of the third
year. The Non-Employee Plan options can be granted with a maximum term of ten
years and can vest within six months from the date of grant. The majority of
grants made in 1997, 1996 and 1995 have a maximum term of six years and vest
ratably over the first three years. The total number of shares underlying
options authorized for grant, but not yet granted, under the 1988 Plan is 2,614,
2,690, and 789 in Brink's Stock, Burlington Stock and Minerals Stock,
respectively. Under the Non-Employee Plan, the total number of shares underlying
options authorized for grant, but not yet granted, in Brink's Stock, Burlington
Stock and Minerals Stock is 181, 140 and 47, respectively.

The Company's 1979 Stock Option Plan (the "1979 Plan") and the 1985 Stock Option
Plan (the "1985 Plan") terminated in 1985 and 1988, respectively, except as to
options still outstanding.

As part of the Brink's Stock Proposal (described in the Company's Proxy
Statement dated December 31, 1995 resulting in the modification of the capital
structure of the Company to include an additional class of common stock), the
1988 and Non-Employee Plans were amended to permit option grants to be made to
optionees with respect to Brink's Stock or Burlington Stock, in addition to
Minerals Stock. At the time of the approval of the Brink's Stock Proposal, a
total of 2,383 shares of Services Stock were subject to options outstanding
under the 1988 Plan, the Non-Employee Plan, the 1979 Plan and the 1985 Plan.
Pursuant to antidilution provisions in the option agreements covering such
plans, the Company converted these options into options for shares of Brink's
Stock or Burlington Stock, or both, depending on the employment status and
responsibilities of the particular optionee. In the case of optionees having
Company-wide responsibilities, each outstanding Services Stock option was
converted into options for both Brink's Stock and Burlington Stock. In the case
of other optionees, each outstanding option was converted into a new option only
for Brink's Stock or Burlington Stock, as the case may be. As a result, upon
approval of the Brink's Stock Proposal, 1,750 shares of Brink's Stock and 1,989
shares of Burlington Stock were subject to options.

                                       74

The table below summarizes the activity in all plans from December 31, 1994 to
December 31, 1997.

                                                                      Aggregate
                                                                       Exercise
                                                           Shares         Price
- --------------------------------------------------------------------------------
                                                                 
Pittston Services Group Common Stock Options:
Outstanding at December 31, 1994                            1,990      $ 38,401
Granted                                                       587        14,595
Exercised                                                    (171)       (2,289)
Forfeited or expired                                           (7)         (179)
- --------------------------------------------------------------------------------
Outstanding at December 31, 1995                            2,399      $ 50,528
Exercised                                                     (15)         (206)
Converted in Brink's Stock Proposal                        (2,384)      (50,322)
- --------------------------------------------------------------------------------
Outstanding at December 31, 1996                               --      $     --
================================================================================

Pittston Brink's Group Common Stock Options:
Outstanding at December 31, 1995                               --      $     --
Converted in Brink's Stock Proposal                         1,750        26,865
Granted                                                       369         9,527
Exercised                                                    (166)       (1,800)
Forfeited or expired                                          (37)         (734)
- --------------------------------------------------------------------------------
Outstanding at December 31, 1996                            1,916      $ 33,858
Granted                                                       428        13,618
Exercised                                                    (190)       (2,296)
Forfeited or expired                                         (104)       (2,497)
- --------------------------------------------------------------------------------
Outstanding at December 31, 1997                            2,050      $ 42,683
================================================================================

Pittston Burlington Group Common Stock Options:
Outstanding at December 31, 1995                               --      $     --
Converted in Brink's Stock Proposal                         1,989        23,474
Granted                                                       440         7,972
Exercised                                                    (318)       (2,905)
Forfeited or expired                                          (64)         (952)
- --------------------------------------------------------------------------------
Outstanding at December 31, 1996                            2,047      $ 27,589
Granted                                                       526        12,693
Exercised                                                    (246)       (2,389)
Forfeited or expired                                          (71)       (1,223)
- --------------------------------------------------------------------------------
Outstanding at December 31, 1997                            2,256      $ 36,670
================================================================================

Pittston Minerals Group Common Stock Options:
Outstanding at December 31, 1994                              507      $  9,571
Granted                                                       259         2,665
Exercised                                                     (95)       (1,203)
Forfeited or expired                                          (73)       (1,674)
- --------------------------------------------------------------------------------
Outstanding at December 31, 1995                              598      $  9,359
Granted                                                         4            47
Exercised                                                      (3)          (45)
Forfeited or expired                                          (16)         (229)
- --------------------------------------------------------------------------------
Outstanding at December 31, 1996                              583      $  9,132
Granted                                                       138         1,746
Exercised                                                      (2)          (22)
Forfeited or expired                                          (67)         (921)
- --------------------------------------------------------------------------------
Outstanding at December 31, 1997                              652      $  9,935
================================================================================

Options exercisable at the end of 1997, 1996 and 1995, respectively, on an
equivalent basis, for Brink's Stock were 905, 1,099 and 957; for Burlington
Stock were 827, 1,034 and 1,030; and, for Minerals Stock were 253, 292 and 214.

The following table summarizes information about stock options outstanding as of
December 31, 1997.

                       -------------------------------    ----------------------
                                         Stock Options            Stock Options
                                           Outstanding              Exercisable
- --------------------------------------------------------------------------------
                                Weighted
                                 Average
                               Remaining      Weighted                 Weighted
                             Contractual       Average                  Average
Range of                            Life      Exercise                 Exercise
Exercise Prices        Shares    (Years)         Price    Shares          Price
- --------------------------------------------------------------------------------
                                                         
Brink's Stock
$ 6.26  to  13.79         420      1.80         $ 9.93       421         $ 9.93
 16.77  to  21.34         901      3.03          19.18       476          19.83
 25.57  to  29.81         334      4.44          25.92         8          29.50
 31.56  to  38.16         395      5.36          31.86        --             --
- --------------------------------------------------------------------------------
Total                   2,050                                905
- --------------------------------------------------------------------------------

Burlington Stock

$ 5.00  to  11.70         475      1.57         $8.49        475         $ 8.49
 13.41  to  16.32         782      3.25         14.75        282          15.45
 17.06  to  21.13         498      4.04         18.00         70          17.29
 23.88  to  27.91         501      5.38         24.24         --             --
- --------------------------------------------------------------------------------
Total                    2,256                               827
- --------------------------------------------------------------------------------
Minerals Stock
$ 8.74  to  12.18          262     3.37        $10.41         24         $11.08
 12.69  to  16.63          203     4.05         13.29         79          14.22
 18.63  to  25.74          187     2.69         24.12        150          24.00
- --------------------------------------------------------------------------------
Total                      652                               253
================================================================================

Employee Stock Purchase Plan

Under the 1994 Employee Stock Purchase Plan (the "Plan"), the Company is
authorized to issue up to 750 shares of Brink's Stock, 375 shares of Burlington
Stock and 250 shares of Minerals Stock, to its employees who have six months of
service and who complete minimum annual work requirements. Under the terms of
the Plan, employees may elect each six-month period (beginning January 1 and
July 1), to have up to 10 percent of their annual earnings withheld to purchase
the Company's stock. Employees may purchase shares of any or all of the three
classes of Company common stocks. The purchase price of the stock is 85% of the
lower of its beginning-of-the-period or end-of-the-period market price. Under
the Plan, the Company sold 43, 45, and 57 shares of Brink's Stock; 29, 32, and
29 shares of Burlington Stock; and 46, 30 and 44 shares of Minerals Stock, to
employees during 1997, 1996 and 1995, respectively. The share amounts for
Brink's Stock and Burlington Stock include the restatement for the Services
Stock conversion under the Brink's Stock Proposal.

                                       75

Accounting for Plans

The Company has adopted the disclosure - only provisions of SFAS No. 123,
"Accounting for Stock-Based Compensation", but applies APB Opinion No. 25 and
related Interpretations in accounting for its plans. Accordingly, no
compensation cost has been recognized in the accompanying financial statements.
Had compensation costs for the Company's plans been determined based on the fair
value of awards at the grant dates, consistent with SFAS No. 123, the Company's
net income and net income per share would approximate the pro forma amounts
indicated below:

                                              1997           1996           1995
- --------------------------------------------------------------------------------
                                                                 
Net Income attributed to common shares
Pittston Company and Subsidiaries
     As Reported                          $106,717        102,479         95,210
     Pro Forma                             101,746         99,628         93,455
Brink's Group
     As Reported                            73,622         59,695         51,093
     Pro Forma                              71,240         58,389         50,432
Burlington Group
     As Reported                            32,348         33,801         32,855
     Pro Forma                              30,170         32,528         32,098
Minerals Group
     As Reported                               747          8,983         11,262
     Pro Forma                                 336          8,711         10,925
Net Income per common share
Brink's Group
     Basic, As Reported                       1.92           1.56           1.35
     Basic, Pro Forma                         1.86           1.53           1.33
     Diluted, As Reported                     1.90           1.54           1.33
     Diluted, Pro Forma                       1.84           1.51           1.31
Burlington Group
     Basic, As Reported                       1.66           1.76           1.73
     Basic, Pro Forma                         1.55           1.69           1.69
     Diluted, As Reported                     1.62           1.72           1.68
     Diluted, Pro Forma                       1.51           1.65           1.64
Minerals Group
     Basic, As Reported                       0.09           1.14           1.45
     Basic, Pro Forma                         0.04           1.10           1.40
     Diluted, As Reported                     0.09           1.08           1.40
     Diluted, Pro Forma                       0.04           1.05           1.37
================================================================================

Note: The pro forma disclosures shown may not be representative of the effects
on reported net income in future years.

The fair value of each stock option grant used to compute pro forma net income
and net income per share disclosures is estimated at the time of the grant using
the Black-Scholes option-pricing model.

The weighted-average assumptions used in the model are as follows:

                                                      1997       1996      1995
- --------------------------------------------------------------------------------
                                                                  
Expected dividend yield:
     Brink's Stock                                    0.3%       0.4%      0.4%
     Burlington Stock                                 1.0%       1.2%      1.2%
     Minerals Stock                                   5.4%       4.8%      4.8%
Expected volatility:
     Brink's Stock                                     32%        30%       30%
     Burlington Stock                                  29%        32%       32%
     Minerals Stock                                    43%        37%       38%
Risk-Free interest rate:
     Brink's Stock                                    6.2%       6.3%      5.8%
     Burlington Stock                                 6.2%       6.3%      5.8%
     Minerals Stock                                   6.2%       6.1%      5.7%
Expected term (in years):
     Brink's Stock                                     4.9        4.7       4.7
     Burlington Stock                                  4.8        4.7       4.7
     Minerals Stock                                    4.2        3.7       4.2
================================================================================

Using these assumptions in the Black-Scholes model, the weighted-average fair
value of options granted during 1997, 1996 and 1995 for the Brink's Stock is
$5,155, $3,341 and $2,317, for the Burlington Stock is $4,182, $2,679 and $2,549
and for the Minerals Stock is $487, $10 and $687, respectively.

Under SFAS No.123, compensation cost is also recognized for the fair value of
employee stock purchase rights. Because the Company settles its employee stock
purchase rights under the Plan at the end of each six-month offering period, the
fair value of these purchase rights was calculated using actual market
settlement data. The weighted-average fair value of the stock purchase rights
granted in 1997, 1996 and 1995 was $455, $365 and $330 for Brink's Stock, $222,
$138 and $163 for Burlington Stock, and $247, $95 and $479 for Minerals Stock,
respectively.

10. CAPITAL STOCK

The Company, at any time, has the right to exchange each outstanding share of
Burlington Stock for shares of Brink's Stock (or, if no Brink's Stock is then
outstanding, Minerals Stock) having a fair market value equal to 115% of the
fair market value of one share of Burlington Stock. In addition, upon the
disposition of all or substantially all of the properties and assets of the
Burlington Group to any person (with certain exceptions), the Company is
required to exchange each outstanding share of Burlington Stock for shares of
Brink's Stock (or, if no Brink's Stock is then outstanding, Minerals Stock)
having a fair market value equal to 115% of the fair market value of one share
of Burlington Stock.

                                       76

The Company, at any time, has the right to exchange each outstanding share of
Minerals Stock, for shares of Brink's Stock (or, if no Brink's Stock is then
outstanding, Burlington Stock) having a fair market value equal to 115% of the
fair market value of one share of Minerals Stock. In addition, upon the
disposition of all or substantially all of the properties and assets of the
Minerals Group to any person (with certain exceptions), the Company is required
to exchange each outstanding share of Minerals Stock for shares of Brink's Stock
(or, if no Brink's Stock is then outstanding, Burlington Stock) having a fair
market value equal to 115% of the fair market value of one share of Minerals
Stock. If any shares of the Company's Preferred Stock are converted after an
exchange of Minerals Stock for Brink's Stock (or Burlington Stock), the holder
of such Preferred Stock would, upon conversion, receive shares of Brink's Stock
(or Burlington Stock) in lieu of shares of Minerals Stock otherwise issuable
upon such conversion.

Holders of Brink's Stock at all times have one vote per share. Holders of
Burlington Stock and Minerals Stock have .739 and .244 vote per share,
respectively, subject to adjustment on January 1, 2000, and on January 1 every
two years thereafter in such a manner so that each class' share of the aggregate
voting power at such time will be equal to that class' share of the aggregate
market capitalization of the Company's common stock at such time. Accordingly,
on each adjustment date, each share of Burlington Stock and Minerals Stock may
have more than, less than or continue to have the number of votes per share as
they have. Holders of Brink's Stock, Burlington Stock and Minerals Stock vote
together as a single voting group on all matters as to which all common
shareholders are entitled to vote. In addition, as prescribed by Virginia law,
certain amendments to the Articles of Incorporation affecting, among other
things, the designation, rights, preferences or limitations of one class of
common stock, or certain mergers or statutory share exchanges, must be approved
by the holders of such class of common stock, voting as a group, and, in certain
circumstances, may also have to be approved by the holders of the other classes
of common stock, voting as separate voting groups.

In the event of a dissolution, liquidation or winding up of the Company, the
holders of Brink's Stock, Burlington Stock and Minerals Stock, effective January
1, 1998, share on a per share basis an aggregate amount equal to 55%, 28% and
17%, respectively, of the funds, if any, remaining for distribution to the
common shareholders. In the case of Minerals Stock, such percentage has been
set, using a nominal number of shares of Minerals Stock of 4,203 (the "Nominal
Shares") in excess of the actual number of shares of Minerals Stock outstanding.
These liquidation percentages are subject to adjustment in proportion to the
relative change in the total number of shares of Brink's Stock, Burlington Stock
and Minerals Stock, as the case may be, then outstanding to the total number of
shares of all other classes of common stock then outstanding (which totals, in
the case of Minerals Stock, shall include the Nominal Shares).

The Company has authority to issue up to 2,000 shares of preferred stock, par
value $10 per share. In January 1994, the Company issued $80,500 or 161 shares
of its $31.25 Series C Cumulative Convertible Preferred Stock (the "Convertible
Preferred Stock"). The Convertible Preferred Stock pays an annual cumulative
dividend of $31.25 per share payable quarterly, in cash, in arrears, out of all
funds of the Company legally available; therefore, when, as and if declared by
the Board, and bears a liquidation preference of $500 per share, plus an amount
equal to accrued and unpaid dividends thereon. Each share of the Convertible
Preferred Stock is convertible at the option of the holder at any time, unless
previously redeemed or, under certain circumstances, called for redemption, into
shares of Minerals Stock at a conversion price of $32.175 per share of Minerals
Stock, subject to adjustment in certain circumstances. The Company may at its
option, redeem the Convertible Preferred Stock, in whole or in part, for cash at
a price of $518.750 per share, effective February 1, 1998, and thereafter at
prices declining ratably annually on each February 1 to an amount equal to
$500.00 per share on and after February 1, 2004, plus in each case an amount
equal to accrued and unpaid dividends on the date of redemption. Except under
certain circumstances or as prescribed by Virginia law, shares of the
Convertible Preferred Stock are nonvoting. Other than the Convertible Preferred
Stock, no shares of preferred stock are presently issued or outstanding.

In November 1995, the Company's Board of Directors (the "Board") authorized a
revised share repurchase program which allowed for the purchase, from time to
time, of up to 1,000 shares of Minerals Stock, up to 1,500 shares of Brink's
Stock and up to 1,500 shares of Burlington Stock, not to exceed an aggregate
purchase price of $45,000; such shares to be purchased from time to time in the
open market or in private transactions, as conditions warrant.

In 1994, the Board authorized the repurchase, from time to time, of up to
$15,000 of Convertible Preferred Stock. In November 1995, and February 1997, the
Board authorized an increase in the remaining authority to $15,000 and, in May
1997, the Board authorized an increase to $25,000.

                                       77

Under the share repurchase programs, the Company purchased shares in the periods
presented as follows:

                                                        Years Ended December 31
(In thousands)                                       1997                  1996
- --------------------------------------------------------------------------------
                                                                   
Brink's Stock:
     Shares                                           166                   278
     Cost                                          $4,349                 6,937

Burlington Stock:
     Shares                                           332                    76
     Cost                                          $7,405                 1,407

Convertible Preferred Stock:
     Shares                                             2                    21
     Cost                                          $  617                 7,897
     Excess carrying amount (a)                    $  108                 2,120
================================================================================

(a) The excess of the carrying amount of the Convertible Preferred Stock over
the cash paid to holders for repurchases made during the years which is deducted
from preferred dividends in the Company's Statement of Operations.

At December 31, 1997 the Company had remaining authority to purchase over time
1,000 shares of Pittston Minerals Group Common Stock; 1,056 shares of Pittston
Brink's Common Stock; 1,092 shares of Pittston Burlington Group Common Stock and
an additional $24,383 of its Convertible Preferred Stock. The aggregate purchase
price limitation for all common stock was $24,903 at December 31, 1997. The
authority to acquire shares remains in effect in 1998.

In 1997, 1996 and 1995 dividends paid on the Convertible Preferred Stock
amounted to $3,589, $3,795, and $4,341 respectively. During 1997 and 1996, the
Board declared and the Company paid dividends of 10 cents per share, 65 cents
per share and 24 cents per share of Brink's Stock, Minerals Stock and Burlington
Stock, respectively.

Under a Shareholder Rights Plan adopted by the Board in 1987 and as amended,
rights to purchase a new Series A Participating Cumulative Preferred Stock (the
"Series A Preferred Stock") of the Company were distributed as a dividend at the
rate of one right for each share of the Company's common stock. Each Brink's
Right, if and when it becomes exercisable, will entitle the holder to purchase
one-thousandth of a share of Series A Preferred Stock at a purchase price of
$26.67, subject to adjustment. Each Burlington Right, if and when it becomes
exercisable, will entitle the holder to purchase one-thousandth of a share of
Series D Preferred Stock at a purchase price of $26.67, subject to adjustment.
Each Minerals Right, if and when it becomes exercisable, will entitle the holder
to purchase one-thousandth of a share of Series B Participating Cumulative
Preferred Stock (the "Series B Preferred Stock") at a purchase price of $40,
subject to adjustment.

Each fractional share of Series A Preferred Stock and Series B Preferred Stock
will be entitled to participate in dividends and to vote on an equivalent basis
with one whole share of Brink's Stock, Burlington Stock and Minerals Stock,
respectively. Each right will not be exercisable until after a third party
acquires 15% or more of the total voting rights of all outstanding Brink's
Stock, Burlington Stock and Minerals Stock or on such date as may be designated
by the Board after commencement of a tender offer or exchange offer by a third
party for 15% or more of the total voting rights of all outstanding Brink's
Stock, Burlington Stock and Minerals Stock.

If after the rights become exercisable, the Company is acquired in a merger or
other business combination, each right will entitle the holder to purchase, for
the purchase price, common stock of the surviving or acquiring company having a
market value of twice the purchase price. In the event a third party acquires
15% or more of all outstanding Brink's Stock, Burlington Stock and Minerals
Stock, the rights will entitle each holder to purchase, at the purchase price,
that number of fractional shares of Series A Preferred Stock, Series D Preferred
Stock and Series B Preferred Stock equivalent to the number of shares of common
stock which at the time of the triggering event would have a market value of
twice the purchase price. As an alternative to the purchase described in the
previous sentence, the Board may elect to exchange the rights for other forms of
consideration, including that number of shares of common stock obtained by
dividing the purchase price by the market price of the common stock at the time
of the exchange or for cash equal to the purchase price. The rights may be
redeemed by the Company at a price of $0.01 per right and expire on September
25, 2007.

The Company's Articles of Incorporation limits dividends on Minerals Stock to
the lesser of (i) all funds of the Company legally available therefore (as
prescribed by Virginia law) and (ii) the Available Minerals Dividend Amount (as
defined in the Articles of Incorporation). The Available Minerals Dividend
Amount may be reduced by activity that reduces shareholder's equity or the fair
value of net assets of the Minerals Group. Such activity includes net losses by
the Minerals Group, dividends paid on the Minerals Stock and the Convertible
Preferred Stock, repurchases of Minerals Stock and the Convertible Preferred
Stock, and foreign currency translation losses. At December 31, 1997, the
Available Minerals Dividend Amount was at least $15,199.

In December 1992, the Company formed The Pittston Company Employee Benefits
Trust (the "Trust") to hold shares of its common stock to fund obligations under
certain employee benefit programs not including stock option plans. The trust
first began funding obligations under the Company's various stock option plans
in September 1995. Upon formation of the Trust, the Company sold for a
promissory note of the Trust, 4,000 new shares of its common stock to the Trust
at a price equal to the fair value of the stock on

                                       78

the date of sale. At December 31, 1997, 2,734 shares of Brink's Stock (3,141 in
1996), 868 shares of Burlington (1,280 in 1996) and 232 shares of Minerals Stock
(424 in 1996) remained in the Trust, valued at market. These shares will be
voted by the trustee in the same proportion as those voted by the Company's
employees participating in the Company's Savings Investment Plan. The fair
market value of the shares is included in each issue of common stock and capital
in excess of par and, in total, as a reduction to common shareholders' equity in
the Company's consolidated balance sheet.

11. ACQUISITIONS

In 1997, the Company increased its ownership position in its Venezuelan
affiliate, Custravalca, from 15% to 61%. The acquisition was financed through a
syndicate of local Venezuelan banks. The borrowings consisted of a long-term
loan denominated in the local currency equivalent to U.S. $40,000 and a $10,000
short-term loan denominated in U.S. dollars of which approximately $36,000 was
outstanding at December 31, 1997. In conjunction with this transaction, Brink's
acquired an additional 31% interest in Brink's Peru S.A. bringing its interest
to 36%.

In June 1997, the Company acquired Cleton & Co. ("Cleton"), a leading
logistics provider in the Netherlands. The Company acquired Cleton for
the equivalent of U.S. $10,700 and the initial assumption of the
equivalent of U.S. $10,000 of debt of which approximately U.S. $6,000 was
outstanding at December 31, 1997.  Additional contingent payments ranging
from the current equivalent of U.S. $0 to U.S. $18,000 will be paid over
the next three years based on certain performance criteria of Cleton.
Approximately $3,000 of goodwill is being amortized on a straight-line
basis over 40 years.

In addition, throughout 1997, the Company acquired additional interests in
several subsidiaries and affiliates. Remaining interests were acquired in the
Netherlands, Hong Kong, Taiwan and South Africa while ownership positions were
increased in Bolivia and Chile.

All acquisitions were accounted for under the purchase method, and, accordingly,
the costs of the acquisitions were allocated to the assets acquired and
liabilities assumed based on their respective fair values. The results of the
operations of each of the acquired companies have been included in the Company's
consolidated results of operations since each respective date of acquisition.

The 1997 acquisitions were not material to the Company's consolidated financial
statements taken as a whole. There were no material acquisitions in 1996 or
1995.

In January 1998, the Company purchased nearly all the remaining shares of its
affiliate in France for payments over three years aggregating approximately U.S.
$39,000. The initial payment made at closing of U.S. $8,789 was funded through
the revolving credit portion of the Facility.

12. COAL JOINT VENTURE

The Company, through a wholly owned indirect subsidiary, has a partnership
agreement, Dominion Terminal Associates ("DTA"), with three other coal companies
to operate coal port facilities in Newport News, Virginia, in the Port of
Hampton Roads (the "Facilities"). The Facilities, in which the Company's wholly
owned indirect subsidiary has a 32.5% interest, have an annual throughput
capacity of 22 million tons, with a ground storage capacity of approximately 2
million tons. The Facilities are financed by a series of coal terminal revenue
refunding bonds issued by the Peninsula Ports Authority of Virginia (the
"Authority"), a political subdivision of the Commonwealth of Virginia, in the
aggregate principal amount of $132,800, of which $43,160 are attributable to the
Company. These bonds bear a fixed interest rate of 7.375%. The Authority owns
the Facilities and leases them to DTA for the life of the bonds, which mature on
June 1, 2020. DTA may purchase the Facilities for one dollar at the end of the
lease term. The obligations of the partners are several, and not joint.

Under loan agreements with the Authority, DTA is obligated to make payments
sufficient to provide for the timely payment of the principal and interest on
the bonds. Under a throughput and handling agreement, the Company has agreed to
make payments to DTA that in the aggregate will provide DTA with sufficient
funds to make the payments due under the loan agreements and to pay the
Company's share of the operating costs of the Facilities. The Company has also
unconditionally guaranteed the payment of the principal of and premium, if any,
and the interest on the bonds. Payments for operating costs aggregated $4,691 in
1997, $5,208 in 1996 and $6,841 in 1995. The Company has the right to use 32.5%
of the throughput and storage capacity of the Facilities subject to user rights
of third parties which pay the Company a fee. The Company pays throughput and
storage charges based on actual usage at per ton rates determined by DTA.

13. LEASES

The Company and its subsidiaries lease aircraft, facilities, vehicles, computers
and coal mining and other equipment under long-term operating leases with
varying terms, and most of the leases contain renewal and/or purchase options.

                                       79

As of December 31, 1997, aggregate future minimum lease payments under
noncancellable operating leases were as follows:

                                                      Equipment
                     Aircraft       Facilities          & Other            Total
- --------------------------------------------------------------------------------
                                                              
1998                  $22,479           42,841           30,391           95,711
1999                   20,157           37,726           21,512           79,395
2000                   13,488           28,320           15,261           57,069
2001                   10,402           23,942           10,079           44,423
2002                    5,184           20,467            5,849           31,500
2003                    1,152           16,482              647           18,281
2004                       --           14,552              502           15,054
2005                       --           13,265              418           13,683
2006                       --           11,871              418           12,289
Later Years                --           69,533            2,883           72,416
- --------------------------------------------------------------------------------
Total                 $72,862          278,999           87,960          439,821
================================================================================

These amounts are net of aggregate future minimum noncancellable sublease
rentals of $3,811.

Net rent expense amounted to $109,976 in 1997, $111,562 in 1996 and $120,583 in
1995.

The Company incurred capital lease obligations of $4,874 in 1997, $3,185 in 1996
and $2,948 in 1995. As of December 31, 1997, the Company's obligations under
capital leases were not significant (Note 7).

The Company is in the process of renewing certain aircraft leasing agreements
with terms of 4 to 5 years. Aggregate future minimum lease payments under these
agreements will approximate $42,000.

14. EMPLOYEE BENEFIT PLANS

The Company and its subsidiaries maintain several noncontributory defined
benefit pension plans covering substantially all nonunion employees who meet
certain minimum requirements, in addition to sponsoring certain other defined
benefit plans. Benefits under most of the plans are based on salary (including
commissions, bonuses, overtime and premium pay) and years of service. The
Company's policy is to fund the actuarially determined amounts necessary to
provide assets sufficient to meet the benefits to be paid to plan participants
in accordance with applicable regulations.

The net pension expense (credit) for 1997, 1996 and 1995 for all plans is as
follows:

                                                        Years Ended December 31
                                                    1997        1996       1995
- --------------------------------------------------------------------------------
                                                               
Service cost--benefits earned during year       $ 15,283      14,753     11,193
Interest cost on projected benefit obligation     26,978      23,719     21,429
Return on assets--actual                         (82,051)    (57,109)   (77,368)
Return on assets--deferred                        41,157      19,461     43,139
Other amortization, net                              564       1,741       (803)
- --------------------------------------------------------------------------------
Net pension expense (credit)                    $  1,931       2,565     (2,410)
================================================================================

The assumptions used in determining the net pension expense (credit) for the
Company's primary pension plan were as follows:

                                                       1997      1996      1995
- --------------------------------------------------------------------------------
                                                                 
Interest cost on projected benefit obligation          8.0%      7.5%     8.75%
Expected long-term rate of return on assets           10.0%     10.0%     10.0%
Rate of increase in compensation levels                4.0%      4.0%      4.0%
================================================================================

The funded status and prepaid pension expense at December 31, 1997 and 1996 for
all plans are as follows:

                                                           1997            1996
- --------------------------------------------------------------------------------
                                                                 
Actuarial present value of accumulated benefit
     obligation:
     Vested                                            $326,783         276,335
     Nonvested                                           20,573          15,694
- --------------------------------------------------------------------------------
                                                        347,356         292,029
Benefits attributable to projected salaries              54,896          47,231
- --------------------------------------------------------------------------------
Projected benefit obligation                            402,252         339,260
Plan assets at fair value                               511,245         450,430
- --------------------------------------------------------------------------------
Excess of plan assets over projected
     benefit obligation                                 108,993         111,170
Unamortized initial net asset                            (1,450)         (2,719)
Unrecognized experience loss                             10,548          11,179
Unrecognized prior service cost                           1,209           1,540
- --------------------------------------------------------------------------------
Net pension assets                                      119,300         121,170
Current pension liabilities                               3,838           3,071
- --------------------------------------------------------------------------------
Deferred pension assets per balance sheet              $123,138         124,241
================================================================================

For the valuation of the Company's primary pension obligations and the
calculation of the funded status, the discount rate was 7.5% in 1997, and 8% in
1996. The expected long-term rate of return on assets was 10% in both years. The
rate of increase in compensation levels used was 4% in 1997 and 1996.

                                       80

The unrecognized initial net asset at January 1, 1986 (January 1, 1989 for
certain foreign pension plans), the date of adoption of Statement of Financial
Accounting Standards No. 87, has been amortized over the estimated remaining
average service life of the employees. As of December 31, 1997, approximately
69% of plan assets were invested in equity securities and 31% in fixed income
securities.

Under the 1990 collective bargaining agreement with the United Mine Workers of
America ("UMWA"), the Company agreed to make payments at specified contribution
rates for the benefit of the UMWA employees. The trustees of the UMWA pension
fund contested the agreement and brought action against the Company. While the
case was in litigation, Minerals Group's benefit payments were made into an
escrow account for the benefit of union employees. During 1996, the case was
settled and the escrow funds were released (Note 18). As a result of the
settlement, the Coal subsidiaries agreed to continue their participation in the
UMWA 1974 pension plan at defined contribution rates.

The Company and its subsidiaries also provide certain postretirement health care
and life insurance benefits for eligible active and retired employees in the
United States and Canada.

For the years 1997, 1996 and 1995, the components of periodic expense for these
postretirement benefits were as follows:

                                                        Years Ended December 31
                                                   1997        1996        1995
- --------------------------------------------------------------------------------
                                                                 
Service cost benefits earned during the year    $ 1,610       2,069       1,720
Interest cost on accumulated postretirement
     benefit obligation                          22,112      20,213      19,957
Amortization of losses (gains)                    1,389       1,128         (15)
- --------------------------------------------------------------------------------
Total expense                                   $25,111      23,410      21,662
================================================================================

At December 31, 1997 and 1996, the actuarially determined and recorded
liabilities for these postretirement benefits, none of which have been funded,
were as follows:

                                                        Years Ended December 31
                                                         1997              1996
- --------------------------------------------------------------------------------
                                                                  
Accumulated postretirement benefit obligation:
Retirees                                             $255,190           237,677
Fully eligible active plan participants                37,519            25,267
Other active plan participants                         21,212            24,578
- --------------------------------------------------------------------------------
                                                      313,921           287,522
Unrecognized experience loss                          (63,247)          (42,850)
- --------------------------------------------------------------------------------
Liability included on the balance sheet               250,674           244,672
Less current portion                                   19,222            17,975
- --------------------------------------------------------------------------------
Noncurrent liability for postretirement health
     care and life insurance benefits                $231,452           226,697
================================================================================

The accumulated postretirement benefit obligation was determined using the unit
credit method and an assumed discount rate of 7.5% in 1997, and 8% in 1996. The
assumed health care cost trend rate used in 1997 was 7.43% for pre-65 retirees,
grading down to 5% in the year 2001. For post-65 retirees, the assumed trend
rate in 1997 was 6.43%, grading down to 5% in the year 2001. The assumed
Medicare cost trend rate used in 1997 was 6.10%, grading down to 5% in the year
2001.

A percentage point increase each year in the assumed health care cost trend rate
used would have resulted in an increase of approximately $3,100 in the aggregate
service and interest components of expense for the year 1997, and an increase of
approximately $41,300 in the accumulated postretirement benefit obligation at
December 31, 1997.

The Company also sponsors a Savings-Investment Plan to assist eligible employees
in providing for retirement or other future financial needs. Employee
contributions are matched at rates of 50% to 125% up to 5% of compensation
(subject to certain limitations imposed by the Internal Revenue Code of 1986, as
amended). Contribution expense under the plan aggregated $7,362 in 1997, $6,875
in 1996 and $6,324 in 1995.

The Company sponsors other defined contribution benefit plans based on hours
worked, tons produced or other measurable factors. Contributions under all of
these plans aggregated $206 in 1997, $643 in 1996 and $1,030 in 1995.

In October 1992, the Coal Industry Retiree Health Benefit Act of 1992 (the
"Health Benefit Act") was enacted as part of the Energy Policy Act of 1992. The
Health Benefit Act established rules for the payment of future health care
benefits for thousands of retired union mine workers and their dependents. The
Health Benefit Act established a trust fund to which the Company and certain of
its subsidiaries (the "Pittston Companies") are jointly and severally liable for
annual premiums for assigned beneficiaries, together with a pro rata share or
certain beneficiaries who never worked for such employers ("unassigned
beneficiaries"), in amounts determined on the basis set forth in the Health
Benefit Act. For 1997, 1996 and 1995, these amounts, on a pretax basis, were
approximately $9,300, $10,400 and $10,800, respectively. The Company believes
that the annual liability under the Health Benefit Act for the Pittston
Companies' assigned beneficiaries will continue at approximately $9,000 per year
for the next several years and should begin to decline thereafter as the number
of such assigned beneficiaries decreases.

Based on the number of beneficiaries actually assigned by the Social Security
Administration, the Company estimates the aggregate pretax liability relating to
the Pittston Companies' remaining assigned beneficiaries at approximately
$200,000, which when discounted at 7.5% provides a present value estimate of
approximately $90,000.

                                       81

The ultimate obligation that will be incurred by the Company could be
significantly affected by, among other things, increased medical costs,
decreased number of beneficiaries, governmental funding arrangements and such
federal health benefit legislation of general application as may be enacted. In
addition, the Health Benefit Act requires the Pittston Companies to fund, pro
rata according to the total number of assigned beneficiaries, a portion of the
health benefits for unassigned beneficiaries. At this time, the funding for such
health benefits is being provided from another source and for this and other
reasons the Pittston Companies' ultimate obligation for the unassigned
beneficiaries cannot be determined. The Company accounts for its obligations
under the Health Benefit Act as a participant in a multi-employer plan and
recognizes the annual cost on a pay-as-you-go basis.

15. RESTRUCTURING AND OTHER (CREDITS) CHARGES, INCLUDING LITIGATION
ACCRUAL

Refer to Note 18 for a discussion of the benefit of the reversal of a litigation
accrual related to the Evergreen case of $35,650.

At December 31, 1997, Coal Operations had a liability of $30,846 for various
restructuring costs which was recorded as restructuring and other charges in the
Statement of Operations in years prior to 1995. Although coal production has
ceased at the mines remaining in the accrual, Coal Operations will incur
reclamation and environmental costs for several years to bring these properties
into compliance with federal and state environmental laws. However, management
believes that the reserve, as adjusted at December 31, 1997 should be sufficient
to provide for these future costs. Management does not anticipate material
additional future charges to operating earnings for these facilities, although
continual cash funding will be required over the next several years.

The initiation, in 1996, of a state tax credit for coal produced in Virginia,
along with favorable labor negotiations and improved metallurgical market
conditions for medium volatile coal, led management to continue operating an
underground mine and a related coal preparation and loading facility previously
included in the restructuring reserve. As a result of these decisions and
favorable workers' compensation claim developments, Coal Operations reversed
$3,104 and $11,649 of the reserve in 1997 and 1996, respectively. The 1996
reversal included $4,778 related to estimated mine and plant closures, primarily
reclamation, and $6,871 in employee severance and other benefit costs. The
entire 1997 reversal related to workers' compensation claim reserves.

The following table analyzes the changes in liabilities during the last three
years for facility closure costs recorded as restructuring and other charges:

                                                             Employee
                                                   Mine   Termination,
                                       Leased       and       Medical
                                    Machinery     Plant           and
                                          and   Closure     Severance
(In thousands)                      Equipment     Costs         Costs     Total
================================================================================
                                                             
Balance December 31, 1994              $3,787    38,256        43,372    85,415
Payments (a)                            1,993     7,765         7,295    17,053
Other reductions (c)                      576     1,508            --     2,084
- --------------------------------------------------------------------------------
Balance December 31, 1995               1,218    28,983        36,077    66,278
Reversals                                  --     4,778         6,871    11,649
Payments (b)                              842     5,499         3,921    10,262
Other reductions (c)                       --     6,267            --     6,267
- --------------------------------------------------------------------------------
Balance December 31, 1996                 376    12,439        25,285    38,100
Reversals                                  --        --         3,104     3,104
Payments (d)                              376     1,764         2,010     4,150
Other                                      --       468          (468)       --
- --------------------------------------------------------------------------------
Balance December 31, 1997              $   --    11,143        19,703    30,846
================================================================================

(a) Of the total payments made in 1995, $6,424 was for liabilities recorded in
years prior to 1993, $2,486 was for liabilities recorded in 1993 and $8,143 was
for liabilities recorded in 1994.

(b) Of the total payments made in 1996, $5,119 was for liabilities recorded in
years prior to 1993, $485 was for liabilities recorded in 1993 and $4,658 was
for liabilities recorded in 1994.

(c) These amounts represent the assumption of liabilities by third parties as a
result of sales transactions.

(d) Of the total payments made in 1997, $3,053 was for liabilities recorded in
years prior to 1993, $125 was for liabilities recorded in 1993 and $972 was for
liabilities recorded in 1994.

During the next twelve months, expected cash funding of these charges will be
approximately $4,000 to $6,000. The liability for mine and plant closure costs
is expected to be satisfied over the next nine years, of which approximately 40%
is expected to be paid over the next two years. The liability for workers'
compensation is estimated to be 42% settled over the next four years with the
balance paid during the following five to nine years.

16. OTHER OPERATING INCOME

Other operating income primarily includes royalty income, gains on sales of
assets and foreign exchange transactions gains and losses. Other operating
income also includes the Company's share of net income of unconsolidated
affiliated companies carried on the equity method of $539, $2,103 and $182 for
1997, 1996 and 1995, respectively.

                                       82

Summarized financial information presented includes the accounts of the
following equity affiliates (a):

                                                                      Ownership
                                                           At December 31, 1997
- --------------------------------------------------------------------------------
                                                        
Servicio Pan Americano De Protecion, S.A. (Mexico)                          20%
Brink's Panama, S.A.                                                        49%
Brink's Peru, S.A.                                                          36%
Brink's S.A. (France)                                                       38%
Brink's Schenker, GmbH (Germany)                                            50%
Security Services (Brink's Jordan), W.L.L.                                  45%
Brink's-Allied Limited (Ireland)                                            50%
Brink's Arya India Private Limited                                          40%
Brink's Pakistan (Pvt.) Limited                                             49%
Brink's (Thailand) Ltd.                                                     40%
Burlington International Forwarding Ltd. (Taiwan)                         33.3%
Mining Project Investors Limited (Australia)                              34.1%
MPI Gold (USA)                                                            34.1%
================================================================================

                                               1997          1996          1995
- --------------------------------------------------------------------------------
                                                               
Revenues                                   $638,624       728,815       762,250
Gross profit                                 97,976        78,900        60,712
Net income (loss)                             4,427        11,160        (5,873)
Current assets                              131,160       209,089       186,039
Noncurrent assets                           215,531       217,445       227,229
Current liabilities                         153,247       192,679       219,253
Noncurrent liabilities                       84,170       117,952        85,057
Net equity                                  109,274       115,903       108,958
================================================================================

(a) Also includes amounts related to equity affiliates who were either sold
prior to December 31, 1997, became consolidated affiliates through increased
ownership prior to December 31, 1997 or converted to cost investment. All
amounts for such affiliates are presented pro-rata, where applicable.

Undistributed earnings of such companies included in consolidated retained
earnings approximated $29,300 at December 31, 1997.

17. SEGMENT INFORMATION

Net sales and operating revenues by geographic area are as follows:

                                                       Years Ended December 31
                                                1997         1996         1995
- -------------------------------------------------------------------------------
                                                            
United States:
Domestic customers                        $1,618,929    1,487,145    1,449,684
Export customers                             236,813      273,162      256,396
- -------------------------------------------------------------------------------
                                           1,855,742    1,760,307    1,706,080
International operations                   1,538,656    1,330,888    1,208,361
- -------------------------------------------------------------------------------
Consolidated net sales and operating
     revenues                             $3,394,398    3,091,195    2,914,441
===============================================================================

Segment operating profit by geographic area is as follows:

                                                        Years Ended December 31
                                               1997          1996          1995
- --------------------------------------------------------------------------------
                                                               
United States                              $124,165       125,050       115,530
International operations (a)                 83,681        62,902        48,775
- --------------------------------------------------------------------------------
Total segment operating profit             $207,846       187,952       164,305
================================================================================

Identifiable assets by geographic area are as follows:

                                                        Years Ended December 31
                                               1997          1996          1995
- --------------------------------------------------------------------------------
                                                            
United States                            $1,293,128     1,221,093     1,245,122
International operations                    601,189       505,203       453,451
- --------------------------------------------------------------------------------
Total                                    $1,894,317     1,726,296     1,698,573
================================================================================

Industry segment information is as follows:

                                                        Years Ended December 31
                                               1997          1996          1995
- --------------------------------------------------------------------------------
                                                            
Net Sales and Operating Revenues:
BAX Global                               $1,662,338     1,484,869     1,403,195
Brink's                                     921,851       754,011       659,459
BHS                                         179,583       155,802       128,936
Coal Operations                             612,907       677,393       706,251
Mineral Ventures                             17,719        19,120        16,600
- --------------------------------------------------------------------------------
Consolidated net sales and
     operating revenues                  $3,394,398     3,091,195     2,914,441
================================================================================
Operating Profit (Loss)(a)
BAX Global (e)                           $   63,264        64,604        58,723
Brink's                                      81,591        56,823        42,738
BHS (b) (d)                                  52,844        44,872        39,506
Coal Operations (c)                          12,217        20,034        23,131
Mineral Ventures                             (2,070)        1,619           207
- --------------------------------------------------------------------------------
Segment operating profit                    207,846       187,952       164,305
General Corporate expense                   (19,718)      (21,445)      (16,806)
- --------------------------------------------------------------------------------
Consolidated operating profit            $  188,128       166,507       147,499
================================================================================

(a) Includes equity in net income of unconsolidated foreign affiliates of $539
in 1997, $2,103 in 1996 and $182 in 1995 (Note 16).

(b) As of January 1, 1992, BHS elected to capitalize categories of costs not
previously capitalized for home security installations to more accurately
reflect subscriber installation costs. The effect of this change in accounting
principle was to increase operating profit by $4,943 in 1997, $4,539 in 1996 and
$4,525 in 1995 (Note 4).

(c) Operating profit of the Coal segment included a benefit from restructuring
and other credits, including litigation accrual of $3,104 in 1997 and $47,299 in
1996. (Note 15).

(d) BHS changed its annual depreciation rate in 1997 resulting in a reduction of
depreciation expense for capitalized installation costs of $8,915 (Note 4).

(e) The 1997 amounts include the allocation of $12,500 of consulting expenses
related to the redesign of BAX Global's business processes and information
systems architecture. The $12,500 was allocated $4,750 to the U.S. operations
and $7,750 to International operations.

                                       83

                                                         Years Ended December 31
                                                    1997        1996        1995
- --------------------------------------------------------------------------------
                                                                
Capital Expenditures:
BAX Global                                      $ 31,307      59,470      34,576
Brink's                                           49,132      34,072      23,063
BHS                                               70,927      61,522      47,256
Coal Operations                                   22,285      18,881      17,811
Mineral Ventures                                   4,544       3,714       2,332
General Corporate                                    613       5,950         391
- --------------------------------------------------------------------------------
Consolidated capital expenditures               $178,808     183,609     125,429
================================================================================
Depreciation, Depletion and Amortization:
BAX Global                                      $ 29,667      23,254      19,856
Brink's                                           30,758      24,293      21,844
BHS                                               30,344      30,115      22,408
Coal Operations                                   35,351      34,632      40,285
Mineral Ventures                                   1,968       1,856       1,597
General Corporate                                    663         468         379
- --------------------------------------------------------------------------------
Consolidated depreciation, depletion
     and amortization                           $128,751     114,618     106,369
================================================================================

                                                               As of December 31
                                                1997          1996          1995
- --------------------------------------------------------------------------------
                                                                
Assets:
BAX Global                                $  690,144       617,784       539,719
Brink's                                      441,138       340,922       321,022
BHS                                          193,027       149,992       116,701
Coal Operations                              549,576       594,772       699,049
Mineral Ventures                              20,432        22,826        22,082
- --------------------------------------------------------------------------------
Identifiable assets                        1,894,317     1,726,296     1,698,573
General Corporate (primarily cash,
     investments, advances and
     deferred pension assets)                101,627       106,307       108,799
- --------------------------------------------------------------------------------
Consolidated assets                       $1,995,944     1,832,603     1,807,372
================================================================================

18. LITIGATION

In April 1990, the Company entered into a settlement agreement to resolve
certain environmental claims against the Company arising from hydrocarbon
contamination at a petroleum terminal facility ("Tankport") in Jersey City, New
Jersey, which operations were sold in 1983. Under the settlement agreement, the
Company is obligated to pay 80% of the remediation costs. Based on data
available to the Company and its environmental consultants, the Company
estimates its portion of the cleanup costs on an undiscounted basis using
existing technologies to be between $6,600 and $11,900 over a period of up to
five years. Management is unable to determine that any amount within that range
is a better estimate due to a variety of uncertainties, which include the extent
of the contamination at the site, the permitted technologies for remediation and
the regulatory standards by which the clean-up will be conducted. The clean-up
estimates have been modified from prior years' in light of cost inflation and
certain assumptions the Company is making with respect to the end use of the
property. The estimate of costs and the timing of payments could change as a
result of changes to the remediation plan required, changes in the technology
available to treat the site, unforseen circumstances existing at the site and
additional cost inflation.

The Company commenced insurance coverage litigation in 1990, in the United
States District Court for the District of New Jersey, seeking a declaratory
judgment that all amounts payable by the Company pursuant to the Tankport
obligation were reimbursable under comprehensive general liability and pollution
liability policies maintained by the Company. In August 1995, the District Court
ruled on various Motions for Summary Judgement. In its decision, the Court found
favorably for the Company on several matters relating to the comprehensive
general liability policies but concluded that the pollution liability policies
did not contain pollution coverage for the types of claims associated with the
Tankport site. On appeal, the Third Circuit reversed the District Court and held
that the insurers could not deny coverage for the reasons stated by the District
Court, and the case was remanded to the District Court for trial. In the event
the parties are unable to settle the dispute, the case is scheduled to be tried
beginning September, 1998. Management and its outside legal counsel continue to
believe that recovery of a substantial portion of the cleanup costs will
ultimately be probable of realization. Accordingly, based on estimates of
potential liability, probable realization of insurance recoveries, related
developments of New Jersey law, and the Third Circuit's decision, it is the
Company's belief that the ultimate amount that it would be liable for is
immaterial.

In 1988, the trustees of the 1950 Benefit Trust Fund and the 1974 Pension
Benefit Trust Funds (the "Trust Funds") established under collective bargaining
agreements with the UMWA brought an action (the "Evergreen Case") against the
Company and a number of its coal subsidiaries claiming that the defendants are
obligated to contribute to such Trust Funds in accordance with the provisions of
the 1988 and subsequent National Bituminous Coal Wage Agreements, to which
neither the Company nor any of its subsidiaries is a signatory. In 1993, the
Company recognized in its consolidated financial statements the potential
liability that might have resulted from an ultimate adverse judgment in the
Evergreen Case (Notes 14 and 15).

                                       84

In late March 1996, a settlement was reached in the Evergreen Case. Under the
terms of the settlement, the coal subsidiaries which had been signatories to
earlier National Bituminous Coal Wage Agreements agreed to make various lump sum
payments in full satisfaction of all amounts allegedly due to the Trust Funds
through January 31, 1996, to be paid over time as follows: approximately $25,800
upon dismissal of the Evergreen Case and the remainder of $24,000 in
installments of $7,000 in 1996 and $8,500 in each of 1997 and 1998. The first
payment was entirely funded through an escrow account previously established by
the Company. The second and third payments were paid according to schedule and
were funded from cash provided by operating activities. In addition, the coal
subsidiaries agreed to future participation in the UMWA 1974 Pension Plan.

As a result of the settlement of the Evergreen Case at an amount lower than
those previously accrued, the Company recorded a pretax gain of $35,650 ($23,173
after-tax) in the first quarter of 1996 in its consolidated financial
statements.

19. COMMITMENTS

At December 31, 1997, the Company had contractual commitments for third parties
to contract mine or provide coal to the Company. Based on the contract
provisions these commitments are currently estimated to aggregate approximately
$195,740 and expire from 1998 through 2005 as follows:

                                  
                       1998          $53,889
                       1999           40,546
                       2000           40,546
                       2001           29,109
                       2002           10,596
                       2003            7,656
                       2004            7,656
                       2005            5,742

Spending under the contracts was $70,691 in 1997, $99,161 in 1996, and $83,532
in 1995.

20. SUPPLEMENTAL CASH FLOW INFORMATION

For the years ended December 31, 1997, 1996 and 1995, cash payments for income
taxes, net of refunds received, were $30,677, $26,412 and $21,967, respectively.

For the years ended December 31, 1997, 1996 and 1995, cash payments for interest
were $26,808, $14,659 and $13,575, respectively.

In connection with the June 1997 acquisition of Cleton & Co. ("Cleton"),
the Company assumed the equivalent of U.S. $10,000 of Cleton debt, of
which the equivalent of approximately U.S. $6,000 was outstanding at
December 31, 1997.

In 1995, the Company sold mining operations in Ohio together with a related coal
supply contract for notes and royalties receivable totaling $6,949.

21. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

Tabulated below are certain data for each quarter of 1997 and 1996. The 1996 and
first three quarters of 1997 net income per share amounts have been restated to
comply with SFAS No. 128, "Earnings Per Share" (Note 1). Third quarter 1997
amounts have been reclassified to include $3,948 of revenues and transportation
expenses from Cleton, which was acquired in June 1997.

                                      1st           2nd        3rd         4th
- --------------------------------------------------------------------------------
                                                          
1997 Quarters:
Net sales and operating
     revenues                    $781,676       826,154    874,449     912,119
Gross profit                      109,445       118,884    143,136     143,567
Net income (a)                     21,341        14,663     36,337      37,857

Net  income per Pittston Brink's Group
  common share:
Basic                            $    .40           .46        .51         .55
Diluted                               .40           .46        .50         .54

Net income (loss) per Pittston Burlington Group
  common share:
Basic                            $    .26          (.10)       .82         .68
Diluted                               .26          (.10)       .80         .66

Net income (loss) per Pittston Minerals Group
  common share:
Basic (a)                        $    .01          (.26)       .02         .32
Diluted                               .01          (.26)       .02         .32
- --------------------------------------------------------------------------------
1996 Quarters:
Net sales and operating
     revenues                    $730,907       757,387    782,394     820,507
Gross profit                       61,956       104,693    116,745     111,155
Net income (a)                     18,620        25,426     29,044      31,064

Net income per Pittston Brink's Group
  common share:
Basic                            $    .31           .37        .41         .47
Diluted                               .31           .36        .41         .46

Net income per Pittston Burlington Group
  common share:
Basic                            $    .20           .46        .56         .55
Diluted                               .19           .44        .54         .53

Net income per Pittston Minerals Group
  common share:
Basic (a)                        $    .25           .35        .33         .20
Diluted                               .25           .27        .25         .20
================================================================================

(a) The fourth quarters of 1997 and 1996 include the reversal of excess
restructuring liabilities of $3,104 ($2,018 after-tax; $0.25 per basic share)
and $9,541 ($6,202 after-tax; $0.78 per basic share) , respectively.

                                       85

Pittston Brink's Group
STATEMENT OF MANAGEMENT RESPONSIBILITY

The management of The Pittston Company (the "Company") is responsible for
preparing the accompanying Pittston Brink's Group (the "Brink's Group")
financial statements and for their integrity and objectivity. The statements
were prepared in accordance with generally accepted accounting principles.
Management has also prepared the other information in the annual report and is
responsible for its accuracy.

In meeting our responsibility for the integrity of the financial statements, we
maintain a system of internal controls designed to provide reasonable assurance
that assets are safeguarded, that transactions are executed in accordance with
management's authorization and that the accounting records provide a reliable
basis for the preparation of the financial statements. Qualified personnel
throughout the organization maintain and monitor these internal controls on an
ongoing basis. In addition, the Company maintains an internal audit department
that systematically reviews and reports on the adequacy and effectiveness of the
controls, with management follow-up as appropriate.

Management has also established a formal Business Code of Ethics which is
distributed throughout the Company. We acknowledge our responsibility to
establish and preserve an environment in which all employees properly understand
the fundamental importance of high ethical standards in the conduct of our
business.

The accompanying financial statements have been audited by KPMG Peat Marwick
LLP, independent auditors. During the audit they review and make appropriate
tests of accounting records and internal controls to the extent they consider
necessary to express an opinion on the Brink's Group's financial statements.

The Company's Board of Directors pursues its oversight role with respect to the
Brink's Group's financial statements through the Audit and Ethics Committee,
which is composed solely of outside directors. The Committee meets periodically
with the independent auditors, internal auditors and management to review the
Company's control system and to ensure compliance with applicable laws and the
Company's Business Code of Ethics.

We believe that the policies and procedures described above are appropriate and
effective and do enable us to meet our responsibility for the integrity of the
Brink's Group's financial statements.

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Shareholders
The Pittston Company

We have audited the accompanying balance sheets of Pittston Brink's Group
(as described in Note 1) as of December 31, 1997 and 1996, and the related
statements of operations and cash flows for each of the years in the three-year
period ended December 31, 1997. These financial statements are the
responsibility of The Pittston Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements of Pittston Brink's Group present
fairly, in all material respects, the financial position of Pittston Brink's
Group as of December 31, 1997 and 1996, and the results of its operations and
its cash flows for each of the years in the three-year period ended December 31,
1997, in conformity with generally accepted accounting principles.

As more fully discussed in Note 1, the financial statements of Pittston Brink's
Group should be read in connection with the audited consolidated financial
statements of The Pittston Company and subsidiaries.

KPMG Peat Marwick LLP
Stamford, Connecticut

January 28, 1998

                                       86

Pittston Brink's Group

BALANCE SHEETS

                                                                     December 31
(In thousands)                                                  1997        1996
================================================================================
                                                                    
ASSETS
Current assets:
Cash and cash equivalents                                   $ 37,694      20,012
Short-term investments                                         2,227       1,856
Accounts receivable:
 Trade                                                       164,527     124,371
 Other                                                         6,045       5,527
- --------------------------------------------------------------------------------
                                                             170,572     129,898
 Less estimated amount uncollectible                           9,660       4,970
- --------------------------------------------------------------------------------
                                                             160,912     124,928
Receivable Pittston Minerals Group (Note 2)                    8,003      14,027
Inventories                                                    3,469       3,073
Prepaid expenses                                              16,672      11,680
Deferred income taxes (Note 8)                                18,147      14,481
- --------------------------------------------------------------------------------
Total current assets                                         247,124     190,057
Property, plant and equipment, at cost (Note 5)              623,129     497,500
 Less accumulated depreciation and amortization              276,457     240,741
- --------------------------------------------------------------------------------
                                                             346,672     256,759
Intangibles, net of accumulated amortization (Note 6)         18,510      28,162
Investments in and advances to unconsolidated affiliates      28,169      29,081
Deferred pension assets (Note 14)                             31,713      33,670
Deferred income taxes (Note 8)                                 3,612       2,120
Other assets                                                  16,530      11,816
- --------------------------------------------------------------------------------
Total assets                                                $692,330     551,665
================================================================================

LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities:
Short-term borrowings                                       $  9,073       1,751
Current maturities of long-term debt (Note 9)                  7,576       2,139
Accounts payable                                              36,337      36,995
Accrued liabilities:
 Taxes                                                        14,350      14,051
 Workers' compensation and other claims                       17,487      16,667
 Payroll and vacation                                         38,388      21,993
 Deferred monitoring revenues                                 15,351      13,415
 Miscellaneous (Note 14)                                      39,786      32,381
- --------------------------------------------------------------------------------
                                                             125,362      98,507
- --------------------------------------------------------------------------------
Total current liabilities                                    178,348     139,392

Long-term debt, less current maturities (Note 9)              38,682       5,542
Postretirement benefits other than pensions (Note 14)          4,097       3,835
Workers' compensation and other claims                        11,277      11,056
Deferred income taxes (Note 8)                                45,324      38,539
Payable Pittston Minerals Group (Note 2)                         391       8,760
Other liabilities                                              8,929       8,234
Minority interests                                            24,802      22,929
Commitments and contingent liabilities
  (Notes 9, 13 and 17)
Shareholder's equity (Notes 3, 11 and 12)                    380,480     313,378
- --------------------------------------------------------------------------------
Total liabilities and shareholder's equity                  $692,330     551,665
================================================================================

See accompanying notes to financial statements 

                                       87

Pittston Brink's Group

STATEMENTS OF OPERATIONS

                                                        Years Ended December 31
(In thousands, except per share amounts)             1997       1996       1995
================================================================================
                                                               
Operating revenues                             $1,101,434    909,813    788,395
- --------------------------------------------------------------------------------
Costs and expenses:
Operating expenses                                815,005    687,175    599,683
Selling, general and administrative expenses      160,676    130,833    112,133
- --------------------------------------------------------------------------------
Total costs and expenses                          975,681    818,008    711,816
- --------------------------------------------------------------------------------
Other operating income, net (Note 15)               1,811      2,433        895
- --------------------------------------------------------------------------------
Operating profit                                  127,564     94,238     77,474
Interest income (Note 2)                            2,760      2,745      1,840
Interest expense (Note 2)                         (11,478)    (1,810)    (2,050)
Other expense, net                                 (5,571)    (5,407)    (3,505)
- --------------------------------------------------------------------------------
Income before income taxes                        113,275     89,766     73,759
Provision for income taxes (Note 8)                39,653     30,071     22,666
- --------------------------------------------------------------------------------
Net income                                     $   73,622     59,695     51,093
================================================================================

Net income per common share (Note 10):
   Basic                                       $    1.92        1.56       1.35
   Diluted                                          1.90        1.54       1.33
================================================================================
Average common shares outstanding (Note 10):
   Basic                                          38,273      38,200     37,931
   Diluted                                        38,791      38,682     38,367
================================================================================

See accompanying notes to financial statements.

                                       88

Pittston Brink's Group

STATEMENTS OF CASH FLOWS

                                                                  Years Ended December 31
(In thousands)                                                 1997       1996         1995
===========================================================================================
                                                                               
Cash flows from operating activities:
Net income                                                $  73,622     59,695       51,093
Adjustments to reconcile net income to net cash
   provided by operating activities:
 Depreciation and amortization                               61,331     54,566       44,357
 Provision (credit) for deferred income taxes                   990         62         (952)
 Provision (credit) for pensions, noncurrent                  1,398      1,149         (466)
 Provision for uncollectible accounts receivable              6,094      4,416        3,265
 Equity in losses (earnings) of unconsolidated
   affiliates, net of dividends received                      1,996     (1,755)       2,352
 Minority interest expense                                    5,432      3,902        1,715
 Gain on sale of property, plant and equipment                 (712)    (1,567)      (1,757)
 Other operating, net                                         4,596      3,304        1,389
 Change in operating assets and liabilities,
   net of effects of acquisitions and dispositions:
  Increase in accounts receivable                           (25,259)   (15,556)     (22,352)
 Increase in inventories                                       (398)      (276)        (812)
 Decrease (increase) in prepaid expenses                         82     (1,300)      (1,858)
 Increase in accounts payable and accrued liabilities        19,341     12,989       15,822
 Increase in other assets                                    (2,398)    (4,742)      (1,597)
 Increase (decrease) in other liabilities                     3,025       (949)         337
 Other, net                                                  (2,100)      (155)         244
- --------------------------------------------------------------------------------------------
Net cash provided by operating activities                   147,040    113,783       90,780
- --------------------------------------------------------------------------------------------
Cash flows from investing activities:

Additions to property, plant and equipment                 (116,270)   (95,754)     (69,783)
Proceeds from disposal of property, plant and equipment       1,007      2,798        3,178

Acquisitions, net of cash acquired,
   and related contingency payments                         (55,349)        --         (956)
Other, net                                                    5,455        843       (1,313)
- --------------------------------------------------------------------------------------------
Net cash used by investing activities                      (165,157)   (92,113)     (68,874)
- --------------------------------------------------------------------------------------------
Cash flows from financing activities:
Additions to debt                                            59,936      1,842        1,782
Reductions of debt                                          (15,542)    (9,375)      (5,893)
Payments to Minerals Group                                   (2,977)    (6,082)     (12,240)
Repurchase of common stock                                   (4,349)    (6,936)      (2,303)
Proceeds from exercise of stock options and
   employee stock purchase plan                               2,297      2,072        1,931
Dividends paid                                               (3,566)    (3,918)      (3,432)
Cost of stock proposal                                           --     (1,238)          --
- --------------------------------------------------------------------------------------------
Net cash provided (used) by financing activities             35,799    (23,635)     (20,155)
- --------------------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents         17,682     (1,965)       1,751
Cash and cash equivalents at beginning of period             20,012     21,977       20,226
- --------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period                $  37,694     20,012       21,977
============================================================================================

See accompanying notes to financial statements.

                                       89

Pittston Brink's Group

NOTES TO FINANCIAL STATEMENTS

(In thousands, except per share amounts)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

As used herein, the "Company" includes The Pittston Company and its direct and
indirect subsidiaries, except as otherwise indicated by the context. The Company
is comprised of three separate groups - Pittston Brink's Group, Pittston
Burlington Group, and Pittston Minerals Group. The financial statements of the
Brink's Group include the balance sheets, the results of operations and cash
flows of the Brink's, Incorporated ("Brink's") and Brink's Home Security, Inc.
("BHS") operations of the Company, and a portion of the Company's corporate
assets and liabilities and related transactions which are not separately
identified with operations of a specific segment. The Brink's Group's financial
statements are prepared using the amounts included in the Company's consolidated
financial statements. Corporate allocations reflected in these financial
statements are determined based upon methods which management believes to be a
reasonable and equitable allocation of such items (Note 2).

The Company provides to holders of Pittston Brink's Group Common Stock ("Brink's
Stock") separate financial statements, financial review, descriptions of
business and other relevant information for the Brink's Group in addition to the
consolidated financial information of the Company. Notwithstanding the
attribution of assets and liabilities (including contingent liabilities) among
the Minerals Group, the Brink's Group and the Burlington Group for the purpose
of preparing their respective financial statements, this attribution and the
change in the capital structure of the Company as a result of the approval of
the Brink's Stock Proposal did not affect legal title to such assets or
responsibility for such liabilities for the Company or any of its subsidiaries.
Holders of Brink's Stock are common shareholders of the Company, which continues
to be responsible for all liabilities. Financial impacts arising from one group
that affect the Company's financial condition could affect the results of
operations and financial condition of each of the groups. Since financial
developments within one group could affect other groups, all shareholders of the
Company could be adversely affected by an event directly impacting only one
group. Accordingly, the Company's consolidated financial statements must be read
in connection with the Brink's Group's financial statements.

Principles of Combination

The accompanying financial statements reflect the combined accounts of the
businesses comprising the Brink's Group and their majority-owned subsidiaries.
The Brink's Group's interests in 20% to 50% owned companies are carried on the
equity method unless control exists, in which case, consolidation occurs. All
material intercompany items and transactions have been eliminated in
combination. Certain prior year amounts have been reclassified to conform to the
current year's financial statement presentation.

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, demand deposits and investments
with original maturities of three months or less.

Short-term Investments

Short-term investments are those with original maturities in excess of three
months, but not exceeding one year, and are carried at cost which approximates
market.

Inventories

Inventories are stated at cost (determined under the first-in, first-out or
average cost method) or market, whichever is lower.

Property, Plant and Equipment

Expenditures for maintenance and repairs are charged to expense, and the costs
of renewals and betterments are capitalized. Depreciation is provided
principally on the straight-line method at varying rates depending upon
estimated useful lives.

Subscriber installation costs for home security systems provided by BHS are
capitalized and depreciated over the estimated life of the assets and are
included in machinery and equipment. The security system that is installed
remains the property of BHS and is capitalized at the cost to bring the revenue
producing asset to its intended use. When an installation is identified for
disconnection, the remaining net book value of the installation is fully written
off and charged to depreciation expense.

Intangibles

The excess of cost over fair value of net assets of businesses acquired is
amortized on a straight-line basis over the estimated periods benefited.

The Brink's Group evaluates the carrying value of intangibles and the periods of
amortization to determine whether events and circumstances warrant revised
estimates of asset value or useful lives. The Brink's Group annually assesses
the recoverability of the excess of cost over net assets acquired by determining
whether the amortization of the asset balance over its remaining life can be
recovered through projected undiscounted future operating cash flows. Evaluation
of asset value as well as periods of amortization are performed on a
disaggregated basis at each of the Brink's Group's operating units.

                                       90

Income Taxes

Income taxes are accounted for in accordance with Statement of Financial
Accounting Standards ("SFAS") No. 109, "Accounting for Income Taxes", which
requires recognition of deferred tax liabilities and assets for the expected
future tax consequences of events that have been included in the financial
statements or tax returns. Under this method, deferred tax liabilities and
assets are determined based on the difference between the financial statement
and tax bases of assets and liabilities using enacted tax rates in effect for
the year in which these items are expected to reverse.

See Note 2 for allocation of the Company's  U.S. federal income taxes to
the Brink's Group.

Postretirement Benefits Other Than Pensions

Postretirement benefits other than pensions are accounted for in accordance with
SFAS No. 106, "Employers' Accounting for Postretirement Benefits Other Than
Pensions", which requires employers to accrue the cost of such retirement
benefits during the employees' service with the Company.

Accounting for Stock Based Compensation

The Brink's Group has implemented the disclosure-only provisions of SFAS
No. 123 "Accounting for Stock Based Compensation" (Note 11). The Brink's
Group continues to measure compensation expense for its stock-based
compensation plans using the intrinsic value based method of accounting
prescribed by Accounting Principles Board Opinion ("APB") No. 25,
"Accounting for Stock Issued to Employees."

Foreign Currency Translation

Assets and liabilities of foreign operations have been translated at current
exchange rates, and related revenues and expenses have been translated at
average rates of exchange in effect during the year. Resulting cumulative
translation adjustments have been included in shareholder's equity. Translation
adjustments relating to operations in countries with highly inflationary
economies are included in net income, along with all transaction gains and
losses for the period.

A portion of the Brink's Group's financial results is derived from activities in
several foreign countries, each with a local currency other than the U.S.
dollar. Because the financial results of the Brink's Group are reported in U.S.
dollars, they are affected by the changes in the value of various foreign
currencies in relation to the U.S. dollar. However, the Brink's Group's
international activity is not concentrated in any single currency, which reduces
the risks of foreign currency rate fluctuations.

Revenue Recognition

Brink's--Revenues are recognized when services are performed.

BHS--Monitoring revenues are recognized when earned and amounts paid in advance
are deferred and recognized as income over the applicable monitoring period,
which is generally one year or less.

Net Income Per Share

Basic and diluted net income per share for the Brink's Group are computed by
dividing net income by the basic weighted-average common shares outstanding and
the diluted weighted-average common shares outstanding, respectively. Diluted
weighted-average common shares outstanding includes additional shares assuming
the exercise of stock options. However, when the exercise of stock options is
antidilutive, they are excluded from the calculation. The shares of Brink's
Stock held in The Pittston Company Employee Benefits Trust (the "Trust" - See
Note 12) are subject to the treasury stock method and effectively are not
included in the basic and diluted net income per share calculations.

Use of Estimates

In accordance with generally accepted accounting principles, management of the
Company has made a number of estimates and assumptions relating to the reporting
of assets and liabilities and the disclosure of contingent assets and
liabilities to prepare these financial statements. Actual results could differ
from those estimates.

Accounting Changes

In 1997, the Brink's Group implemented SFAS No. 128 "Earnings Per Share." SFAS
No. 128 replaced the calculation of primary and diluted net income per share
with basic and diluted net income per share (Note 10). Unlike primary net income
per share, basic net income per share excludes any dilutive effects of options,
warrants and convertible securities. Diluted net income per share is very
similar to the previous fully diluted net income per share. All prior-period net
income per share data has been reinstated to conform with the provisions of SFAS
No. 128.

Pending Accounting Changes

The Brink's Group will implement SFAS No. 130, "Reporting Comprehensive Income"
in the first quarter of 1998. SFAS No. 130 establishes standards for the
reporting and display of comprehensive income and its components in financial
statements. Comprehensive income generally represents all changes in
shareholders' equity except those resulting from investments by or distributions
to shareholders. With the exception of foreign currency translation adjustments,
such changes are not significant to the Brink's Group.

                                       91

SFAS No. 131, "Disclosures about Segments of an Enterprise and Related
Information", will be implemented in the financial statements for the year ended
December 31, 1998. SFAS No. 131 requires publicly-held companies to report
financial and descriptive information about operating segments in financial
statements issued to shareholders for interim and annual periods. The SFAS also
requires additional disclosures with respect to products and services,
geographic areas of operation and major customers. The adoption of this SFAS is
not expected to have a material impact on the financial statements of the
Brink's Group.

2. RELATED PARTY TRANSACTIONS

The following policies may be modified or rescinded by action of the Company's
Board of Directors (the "Board"), or the Board may adopt additional policies,
without approval of the shareholders of the Company, although the Board has no
present intention to do so. The Company allocated certain corporate general and
administrative expenses, net interest expense and related assets and liabilities
in accordance with the policies described below. Corporate assets and
liabilities are primarily deferred pension assets, income taxes and accrued
liabilities.

Financial

As a matter of policy, the Company manages most financial activities of the
Brink's Group, Burlington Group and Minerals Group on a centralized,
consolidated basis. Such financial activities include the investment of surplus
cash; the issuance, repayment and repurchase of short-term and long-term debt;
the issuance and repurchase of common stock and the payment of dividends. In
preparing these financial statements, transactions primarily related to
invested cash, short-term and long-term debt (including convertible debt),
related net interest and other financial costs have been attributed to the
Brink's Group based upon its cash flows for the periods presented after giving
consideration to the debt and equity structure of the Company. The Company
attributes long-term debt to the Brink's Group based upon the purpose for the
debt in addition to the cash requirements of the Brink's Group. At
December 31, 1997 and 1996 none of the long-term debt of the Company was
attributed to the Brink's Group. The portion of the Company's interest expense
allocated to the Brink's Group for 1997, 1996 and 1995 was $123, $106, and
$120, respectively. Management believes such method of allocation to be
equitable and a reasonable estimate of the cost attributable to
the Brink's Group.

To the extent borrowings are deemed to occur between the Brink's Group, the
Burlington Group and the Minerals Group, intergroup accounts are established
bearing interest at the rate in effect from time to time under the Company's
unsecured credit lines or, if no such credit lines exist, at the prime rate
charged by Chase Manhattan Bank from time to time. At December 31, 1997 and
1996, the Minerals Group owed the Brink's Group $27,004 and $24,027,
respectively, as the result of such borrowings.

Income Taxes

The Brink's Group and its domestic subsidiaries are included in the
consolidated U.S. federal income tax return filed by the Company.

The Company's consolidated provision and actual cash payments for U.S. federal
income taxes are allocated between the Brink's Group, Burlington Group and
Minerals Group in accordance with the Company's tax allocation policy and
reflected in the financial statements for each Group. In general, the
consolidated tax provision and related tax payments or refunds are allocated
among the Groups, for financial statement purposes, based principally upon the
financial income, taxable income, credits and other amounts directly related to
the respective Group. Tax benefits that cannot be used by the Group generating
such attributes, but can be utilized on a consolidated basis, are allocated to
the Group that generated such benefits and an intergroup account is established
for the benefit of the Group generating the attributes. As a result, the
allocated Group amounts of taxes payable or refundable are not necessarily
comparable to those that would have resulted if the Groups had filed separate
tax returns. At December 31, 1997 and 1996, the Brink's Group owed the Minerals
Group $19,391 and $18,760, respectively, for such tax benefits, of which $391
and $8,760, respectively, were not expected to be paid within one year from such
dates in accordance with the policy. The Brink's Group paid the Minerals Group
$15,794 in 1997 and $14,470 in 1996 for the utilization of such tax benefits.

Shared Services

A portion of the Company's corporate general and administrative expenses and
other shared services has been allocated to the Brink's Group based upon
utilization and other methods and criteria which management believes to be
equitable and a reasonable estimate of the cost attributable to the Brink's
Group. These allocations were $6,871, $7,457, and $4,770 in 1997, 1996 and 1995,
respectively.

Pension

The Brink's Group's pension cost related to its participation in the Company's
noncontributory defined benefit pension plan is actuarially determined based on
its respective employees and an allocable share of the pension plan assets and
calculated in accordance with Statement of Financial Accounting Standards No.
87, "Employers' Accounting for Pensions" Pension plan assets have been allocated
to the Brink's Group based on the percentage of its projected benefit obligation
to the plan's total projected benefit obligation. Management believes such
method of allocation to be equitable and a reasonable estimate of the cost
attributable to the Brink's Group.

                                       92

3. SHAREHOLDER'S EQUITY

The following presents shareholder's equity of the Brink's Group:

                                                            As of December 31
                                               1997         1996         1995
- --------------------------------------------------------------------------------
                                                                 
Balance at beginning of period ........   $ 313,378      258,805      215,531
Net income ............................      73,622       59,695       51,093
Foreign currency translation adjustment      (8,237)      (1,423)      (6,808)
Stock options exercised ...............       2,296        1,940        1,114
Stock released from employee benefits
     trust to employee benefits plan ..       6,369        5,633        3,371
Stock repurchases .....................      (4,349)      (6,937)      (2,303)
Dividends declared ....................      (3,755)      (3,902)      (3,437)
Cost of stock proposal ................          --       (1,238)          --
Tax benefit of options exercised ......       1,156          805          244
- --------------------------------------------------------------------------------
Balance at end of period ..............   $ 380,480      313,378      258,805
================================================================================

The cumulative foreign currency translation adjustment deducted from
shareholder's equity is $29,704, $21,467, and $20,044 at December 31, 1997, 1996
and 1995, respectively.

4. ACQUISITIONS

In 1997, the Brink's Group increased its ownership position in its Venezuelan
affiliate, Custodia y Traslado de Valores, C.A. ("Custravalca"), from 15% to
61%. The acquisition was financed through a syndicate of local Venezuelan banks.
The borrowings consisted of a long-term loan denominated in the local currency
equivalent to U.S. $40,000 and a $10,000 short-term loan denominated in U.S.
dollars of which approximately $36,000 was outstanding at December 31, 1997. In
conjunction with this transaction, Brink's acquired an additional 31% interest
in Brink's Peru S.A. bringing its interest to 36%.

In addition, throughout 1997, the Brink's Group acquired additional interests in
several subsidiaries and affiliates. Remaining interests were acquired in the
Netherlands, Hong Kong and Taiwan while ownership positions were increased in
Bolivia and Chile.

All acquisitions were accounted for under the purchase method, and, accordingly,
the costs of the acquisitions were allocated to the assets acquired and
liabilities assumed based on their respective fair values. The results of the
operations of each of the acquired companies have been included in the Brinks'
Group combined results of operations since each respective date of acquisition.

The 1997 acquisitions were not material to the Brink's Group's combined
financial statements taken as a whole. There were no material acquisitions in
1996 or 1995.

In January 1998, the Brink's Group purchased nearly all the remaining shares of
its French affiliate for payments over three years aggregating approximately
U.S. $39,000. The initial payment made at closing of U.S. $8,789 was funded
through the revolving credit portion of the Facility.

5. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment, at cost, consists of the following:

                                                               As of December 31
                                                          1997              1996
- --------------------------------------------------------------------------------
                                                                       
Land .......................................          $ 11,928             5,463
Buildings ..................................           103,482            78,999
Machinery and equipment ....................           507,719           413,038
- --------------------------------------------------------------------------------
Total ......................................          $623,129           497,500
================================================================================

The estimated useful lives for property, plant and equipment are as follows:

                                                                           Years
- --------------------------------------------------------------------------------
                                                                       
Buildings                                                               10 to 40
Machinery and equipment                                                  2 to 20
================================================================================

Depreciation of property, plant and equipment aggregated $60,119 in 1997,
$53,285 in 1996, and $42,853 in 1995.

Changes in capitalized subscriber installation costs for home security systems
included in machinery and equipment were as follows:

                                                              Years Ended December 31
                                                       1997         1996         1995
- -------------------------------------------------------------------------------------
                                                                         
Capitalized subscriber installation
     costs--beginning of year ..................   $ 134,850      105,336       81,445
Capitalized cost of security system
     installations ............................      64,993       57,194       44,488
Depreciation, including amounts recognized
     to fully depreciate capitalized costs for
     installations disconnected during the year     (27,051)     (27,680)     (20,597)
- -------------------------------------------------------------------------------------
Capitalized subscriber installation
     costs--end of year ........................   $ 172,792      134,850      105,336
=====================================================================================

                                       93

Based on demonstrated retention of customers, beginning in the first quarter of
1997, BHS prospectively adjusted its annual depreciation rate from 10 to 15
years for capitalized subscribers' installation costs. This change more
accurately matches depreciation expense with monthly recurring revenue generated
from customers. This change in accounting estimate reduced depreciation expense
for capitalized installation costs in 1997 for the Brink's Group and the BHS
segment by $8,915. The effect of this change increased net income of the Brink's
Group in 1997 by $5,794 ($0.15 per basic and diluted common share).

New subscribers were approximately 105,600 in 1997, 98,500 in 1996, and 82,600
in 1995.

As of January 1, 1992, BHS elected to capitalize categories of costs not
previously capitalized for home security system installations. This change in
accounting principle is preferable because it more accurately reflects
subscriber installation costs. The additional costs not previously capitalized
consisted of costs for installation labor and related benefits for supervisory,
installation scheduling, equipment testing and other support personnel (in the
amount of $2,600 in 1997, $2,517 in 1996, and $2,712 in 1995) and costs incurred
for maintaining facilities and vehicles dedicated to the installation process
(in the amount of $2,343 in 1997, $2,022 in 1996, and $1,813 in 1995). The
effect of this change in accounting principle was to increase operating profit
of the Brink's Group in 1997, 1996 and 1995 by $4,943, $4,539, and $4,525,
respectively, and net income of the Brink's Group in 1997, 1996 and 1995 by
$3,213, $2,723, and $2,720, respectively, or by $0.08 per basic and diluted
common share in 1997 and $0.07 per basic and diluted common share in 1996 and
1995. Prior to January 1, 1992, the records needed to identify such costs were
not available. Thus, it was impossible to accurately calculate the effect on
retained earnings as of January 1, 1992. However, the Brink's Group believes the
effect on retained earnings as of January 1, 1992, was immaterial.

Because capitalized subscriber installation costs for prior periods were not
adjusted for the change in accounting principle, installation costs for
subscribers in those years will continue to be depreciated based on the lesser
amounts capitalized in prior periods. Consequently, depreciation of capitalized
subscriber installation costs in the current year and until such capitalized
costs prior to January 1, 1992 are fully depreciated will be less than if such
prior periods' capitalized costs had been adjusted for the change in accounting.
However, the Brink's Group believes the effect on net income in 1997, 1996 and
1995 was immaterial.

6. INTANGIBLES

Intangibles consist entirely of the excess of cost over fair value of net assets
of businesses acquired and are net of accumulated amortization of $9,101 at
December 31, 1997, and $8,778 at December 31, 1996. The estimated useful life of
intangibles is generally forty years. Amortization of intangibles aggregated
$982 in 1997, $967 in 1996, and $958 in 1995.

In 1997, the Brink's Group acquired the remaining 35% interest in Brink's
subsidiary in the Netherlands ("Nedlloyd") for approximately $2,000 with
additional contingent payments of up to $2,000 to be paid over the next two
years based on certain performance criteria of Brink's-Nedlloyd. The original
65% acquisition in the Nedlloyd partnership resulted in goodwill of
approximately $13,200. The acquisition of the remaining 35% interest resulted in
a credit to goodwill of approximately $7,400, as the remaining interest was
purchased for less than the book value.

7. FINANCIAL INSTRUMENTS

Financial instruments which potentially subject the Brink's Group to
concentrations of credit risk consist principally of cash and cash equivalents,
short-term investments and trade receivables. The Brink's Group places its cash
and cash equivalents and short-term investments with high credit quality
financial institutions. Also, by policy, the amount of credit exposure to any
one financial institution is limited. Concentrations of credit risk with respect
to trade receivables are limited due to the large number of customers comprising
the Brink's Group's customer base, and their dispersion across many different
geographic areas.

The following details the fair values of financial instruments for which it is
practicable to estimate the value:

Cash and cash equivalents and short-term investments

The carrying amounts approximate fair value because of the short maturity of
these instruments.

Accounts receivable, accounts payable and accrued liabilities

The carrying amounts approximate fair value because of the short-term nature
of these instruments.

Debt

The aggregate fair value of the Brink's Group's long-term debt obligations,
which is based upon quoted market prices and rates currently available to the
Brink's Group for debt with similar terms and maturities, approximates the
carrying amount.

                                       94

Off-balance sheet instruments

The Brink's Group utilizes off-balance sheet financial instruments, from time to
time, to hedge its foreign currency and other market exposures. The risk that
counterparties to such instruments may be unable to perform is minimized by
limiting the counterparties to major financial institutions. The Brink's Group
does not expect any losses due to such counterparty default. No such financial
instruments are in use by the Brink's Group at December 31, 1997.

8. INCOME TAXES

The provision (credit) for income taxes consists of the following:

                            U.S.
                         Federal             Foreign         State         Total
- --------------------------------------------------------------------------------
                                                                 
1997:

Current ...........      $23,694              11,820         3,149        38,663
Deferred ..........        1,013                 (42)           19           990
- --------------------------------------------------------------------------------
Total .............      $24,707              11,778         3,168        39,653
================================================================================
1996:

Current ...........      $18,079               8,830         3,100        30,009
Deferred ..........        1,634              (1,760)          188            62
- --------------------------------------------------------------------------------
Total .............      $19,713               7,070         3,288        30,071
================================================================================

1995:

Current ...........      $16,010               4,615         2,993        23,618
Deferred ..........          972              (1,550)         (374)         (952)
- --------------------------------------------------------------------------------
Total .............      $16,982               3,065         2,619        22,666
================================================================================

The significant components of the deferred tax expense (benefit) were as
follows:

                                                        Years Ended December 31
                                                     1997       1996       1995
                                                                   
- --------------------------------------------------------------------------------
Deferred tax (benefit) expense, exclusive
     of the components listed below ...........   $(2,073)     1,479      1,550
Net operating loss carryforwards ..............      (405)    (1,851)      (790)
Alternative minimum tax credits ...............     3,468        434     (1,712)
- --------------------------------------------------------------------------------
Total .........................................   $   990         62       (952)
================================================================================

The tax benefit for compensation expense related to the exercise of certain
employee stock options for tax purposes in excess of compensation expense for
financial reporting purposes is recognized as an adjustment to shareholder's
equity.

The components of the net deferred tax liability as of December 31, 1997 and
December 31, 1996 were as follows:

                                                               1997         1996
- --------------------------------------------------------------------------------
                                                                       
Deferred tax assets:
Accounts receivable ..................................      $ 2,953        1,815
Postretirement benefits other than pensions ..........        2,433        2,191
Workers' compensation and other claims ...............        7,014        6,208
Other liabilities and reserves .......................       16,935       14,718
Miscellaneous ........................................        3,026        1,113
Net operating loss carryforwards .....................        5,611        5,206
Alternative minimum tax credits ......................        8,176       11,149
- --------------------------------------------------------------------------------
Total deferred tax assets ............................       46,148       42,400
- --------------------------------------------------------------------------------
Deferred tax liabilities:
Property, plant and equipment ........................       31,234       25,857
Pension assets .......................................       16,037       15,287
Other assets .........................................        2,792        2,791
Investments in foreign affiliates ....................        9,331       10,090
Miscellaneous ........................................       10,319       10,313
- --------------------------------------------------------------------------------
Total deferred tax liabilities .......................       69,713       64,338
- --------------------------------------------------------------------------------
Net deferred tax liability ...........................      $23,565       21,938
================================================================================

The recording of deferred federal tax assets is based upon their expected
utilization in the Company's consolidated federal income tax return and the
benefit that would accrue to the Brink's Group under the Company's tax
allocation policy.

The following table accounts for the difference between the actual tax provision
and the amounts obtained by applying the statutory U.S. federal income tax rate
of 35% in 1997, 1996 and 1995 to the income before income taxes.

                                                              Years Ended December 31
                                                       1997         1996         1995
- -------------------------------------------------------------------------------------
                                                                         
Income before income taxes:
United States .................................   $  83,179       63,569       59,507
Foreign .......................................      30,096       26,197       14,252
- -------------------------------------------------------------------------------------
Total .........................................   $ 113,275       89,766       73,759
=====================================================================================
Tax provision computed at statutory rate ......   $  39,646       31,418       25,816

Increases (reductions) in taxes due to:
State income taxes (net of federal tax
     benefit) .................................       2,059        2,137        1,702

Difference between total taxes on foreign
     income and the U.S. federal statutory rate      (2,449)      (4,149)      (5,528)
Miscellaneous .................................         397          665          676
- -------------------------------------------------------------------------------------
Actual tax provision ..........................   $  39,653       30,071       22,666
=====================================================================================

                                       95

It is the policy of the Brink's Group to accrue deferred income taxes on
temporary differences related to the financial statement carrying amounts and
tax bases of investments in foreign subsidiaries and affiliates which are
expected to reverse in the foreseeable future. As of December 31, 1997 and
December 31, 1996, the unrecognized deferred tax liability for temporary
differences of approximately $17,780 and $26,963, respectively, related to
investments in foreign subsidiaries and affiliates that are essentially
permanent in nature and not expected to reverse in the foreseeable future was
approximately $6,223 and $9,437, respectively.

The Brink's Group and its domestic subsidiaries are included in the
Company's consolidated U.S. federal income tax return.

As of December 31, 1997, the Brink's Group had $8,176 of alternative minimum tax
credits allocated to it under the Company's tax allocation policy. Such credits
are available to offset future U.S. federal income taxes and, under current tax
law, the carryforward period for such credits is unlimited.

The tax benefits of net operating loss carryforwards of the Brink's Group as of
December 31, 1997 were $5,611 and related to various state and foreign taxing
jurisdictions. The expiration periods primarily range from 5 to 15 years.

9. LONG-TERM DEBT

Total long-term debt of the Brink's Group consists of the following:

                                                               As of December 31
                                                                1997        1996
- --------------------------------------------------------------------------------
                                                                    
Senior obligations :

     Venezuelan bolivar term loan due in 2000
     (1997 year-end rate 26.40%) .......................     $31,072        --
     All other .........................................       3,799       2,566
- --------------------------------------------------------------------------------
                                                              34,871       2,566
- --------------------------------------------------------------------------------
Obligations under capital leases (average rates
     8.60% in 1997 and 15.24% in 1996) .................       3,811       2,976
- --------------------------------------------------------------------------------

Total long-term debt, less current maturities ..........      38,682       5,542

Current maturities of long-term debt:

Senior obligations .....................................       5,384         331
Capital leases .........................................       2,192       1,808
- --------------------------------------------------------------------------------
Total current maturities of long-term debt .............       7,576       2,139
- --------------------------------------------------------------------------------
Total long-term debt including current maturities ......     $46,258       7,681
================================================================================

For the four years through December 31, 2002, minimum repayments of long-term
debt outstanding are as follows:

                                                       
     1999                                           $  11,648
     2000                                              22,921
     2001                                               1,137
     2002                                               2,301

The Company has a $350,000 credit agreement with a syndicate of banks (the
"Facility"). The Facility includes a $100,000 term loan and permits additional
borrowings, repayments and reborrowings of up to an aggregate of $250,000. The
maturity date of both the term loan and the revolving credit portion of the
Facility is May 2001. Interest on borrowings under the Facility is payable at
rates based on prime, certificate of deposit, Eurodollar or money market rates.
A term loan of $100,000 was outstanding at December 31, 1997 and 1996.
Additional borrowings of $25,900 and $23,200 were outstanding at December 31,
1997 and 1996, respectively. The Company pays commitment fees (.125% per annum
at December 31, 1997) on the unused portion of the Facility. No portion of the
total amount outstanding under the Facility at December 31, 1997 or December 31,
1996 was attributed to the Brink's Group.

In 1997, Brink's entered into a borrowing arrangement with a syndicate of local
Venezuelan banks in connection with the acquisition of Custravalca. The
borrowings consisted of a long-term loan denominated in Venezuelan bolivars
equivalent to U.S. $40,000 and a $10,000 short-term loan denominated in
U.S. dollars which was repaid during 1997. The long-term loan bears interest
based on the Venezuelan prime rate and is payable in installments through the
year 2000. At December 31, 1997, the long-term portion of the Venezuelan debt
was the equivalent of U.S. $31,072. Approximately $4,800 is payable in 1998
and is included in current maturities of long-term debt.

Under the terms of the Facility, the Company has agreed to maintain at least
$400,000 of Consolidated Net Worth, as defined, and can incur additional
indebtedness of approximately $610,000 at December 31, 1997.

Various international operations maintain lines of credit and overdraft
facilities aggregating approximately $31,900 with a number of banks on either a
secured or unsecured basis. At December 31, 1997, $7,967 was outstanding under
such agreements and was included in short-term borrowings. Average interest
rates on these lines of credit and overdraft facilities at December 31, 1997
approximated 10.2%. Commitment fees paid on the lines of credit and overdraft
facilities are not significant.

                                       96

At December 31, 1997, the Company's portion of outstanding unsecured letters of
credit allocated to the Brink's Group was $9,152, primarily supporting the
Brink's Group's obligations under its various self-insurance programs.

10. NET INCOME PER SHARE

The following is a reconcilation between the calculation of basic and diluted
net income per share:

                                                         Years Ended December 31
                                                  1997         1996         1995

- --------------------------------------------------------------------------------
Numerator:
Net income - Basic and diluted net
   income per share numerator ...........      $73,622       59,695       51,093

Denominator:
Basic weighted average common
  shares outstanding ....................       38,273       38,200       37,931
Effect of dilutive securities:
     Employee stock options .............          518          482          436
- --------------------------------------------------------------------------------
Diluted weighted average common
     shares outstanding .................       38,791       38,682       38,367
================================================================================

Options to purchase 19 and 23 shares of common stock, at prices between $37.06
and $38.16, and between $28.63 and $29.50 per share were outstanding in 1997 and
1996, respectively, but were not included in the computation of diluted net
income per share because the options' exercise price was greater than the
average market price of the common shares and, therefore, the effect would be
antidilutive. No options were excluded from the computation of diluted net
income per share in 1995.

11. STOCK OPTIONS

The Company has various stock-based compensation plans as described below.

Stock Option Plans

The Company grants options under its 1988 Stock Option Plan (the "1988 Plan") to
executives and key employees and under its Non-Employee Directors' Stock Option
Plan (the "Non-Employee Plan") to outside directors, to purchase common stock at
a price not less than 100% of quoted market value at date of grant. The 1988
Plan options can be granted with a maximum term of ten years and can vest within
six months from the date of grant. The majority of grants made in 1997, 1996 and
1995 have a maximum term of six years and vest 100% at the end of the third
year. The Non-Employee Plan options can be granted with a maximum term of ten
years and can vest within six months from the date of grant. The majority of
grants made in 1997, 1996 and 1995 have a maximum term of six years and vest
ratably over the first three years. The total number of Brink's shares
underlying options authorized for grant, but not yet granted, under the 1988
Plan is 2,614. Under the Non-Employee Plan, the total number of shares
underlying options authorized for grant, but not yet granted, is 181.

The Company's 1979 Stock Option Plan (the "1979 Plan") and the 1985 Stock Option
Plan (the "1985 Plan") terminated in 1985 and 1988, respectively, except as to
options still outstanding.

As part of the Brink's Stock Proposal (described in the Company's Proxy
Statement dated December 31, 1995 resulting in the modification of the capital
structure of the Company to include an additional class of common stock), the
1988 and Non-Employee Plans were amended to permit option grants to be made to
optionees with respect to Brink's Stock or Burlington Stock in addition to
Minerals Stock. At the time of the approval of the Brink's Stock Proposal, a
total of 2,383 shares of Services Stock were subject to options outstanding
under the 1988 Plan, the Non-Employee Plan, the 1979 Plan and the 1985 Plan.
Pursuant to antidilution provisions in the option agreements covering such
plans, the Company converted these options into options for shares of Brink's
Stock or Burlington Stock, or both, depending on the employment status and
responsibilities of the particular optionee. In the case of optionees having
Company-wide responsibilities, each outstanding Services Stock option was
converted into options for both Brink's Stock and Burlington Stock. In the case
of other optionees, each outstanding option was converted into a new option only
for Brink's Stock or Burlington Stock, as the case may be. As a result, upon
approval of the Brink's Stock Proposal, 1,750 shares of Brink's Stock and 1,989
shares of Burlington Stock were subject to options.

The table below summarizes the related plan activity.

                                                                       Aggregate
                                                                        Exercise
                                                          Shares           Price
- --------------------------------------------------------------------------------
                                                                    
Outstanding at December 31, 1995 ...............           --          $   --
Converted in Brink's Stock Proposal ............          1,750          26,865
Granted ........................................            369           9,527
Exercised ......................................           (166)         (1,800)
Forfeited or expired ...........................            (37)           (734)
- --------------------------------------------------------------------------------
Outstanding at December 31, 1996 ...............          1,916        $ 33,858
Granted ........................................            428          13,618
Exercised ......................................           (190)         (2,296)
Forfeited or expired ...........................           (104)         (2,497)
- --------------------------------------------------------------------------------
Outstanding at December 31, 1997 ...............          2,050        $ 42,683
================================================================================

                                       97

Options exercisable at the end of 1997, 1996 and 1995, respectively, for Brink's
Stock, on an equivalent basis, were 905, 1,099 and 957.

The following table summarizes information about stock options outstanding as of
December 31, 1997.

                          -----------------------      ----------------
                                    Stock Options         Stock Options
                                      Outstanding           Exercisable
- --------------------------------------------------------------------------------
                               Weighted
                                Average
                              Remaining  Weighted             Weighted
                            Contractual   Average              Average
Range of                           Life  Exercise             Exercise
Exercise Prices       Shares     (Years)    Price    Shares      Price
- --------------------------------------------------------------------------------
                                                    
 $  6.26 to 13.79        420       1.80    $ 9.93       421     $ 9.93
   16.77 to 21.34        901       3.03     19.18       476      19.83
   25.57 to 29.81        334       4.44     25.92         8      29.50
   31.56 to 38.16        395       5.36     31.86        --         --
- --------------------------------------------------------------------------------
Total                  2,050                           905
================================================================================

Employee Stock Purchase Plan

Under the 1994 Employee Stock Purchase Plan (the "Plan"), the Company is
authorized to issue up to 750 shares of Brink's Stock to its employees who have
six months of service and who complete minimum annual work requirements. Under
the terms of the Plan, employees may elect each six-month period (beginning
January 1 and July 1), to have up to 10 percent of their annual earnings
withheld to purchase the Company's stock. Employees may purchase shares of
any or all of the three classes of Company common stocks. The purchase price
of the stock is 85% of the lower of its beginning-of-the-period or
end-of-the-period market price. Under the Plan, the Company sold 43, 45
and 57 shares of Brink's Stock to employees during 1997, 1996 and 1995,
respectively. The share amounts for Brink's Stock include the restatement
for the Services Stock conversion under the Brink's Stock Proposal.

Accounting For Plans

The Company has adopted the disclosure - only provisions of SFAS No. 123,
"Accounting for Stock-Based Compensation", but applies APB Opinion No. 25 and
related Interpretations in accounting for its plans. Accordingly, no
compensation cost has been recognized in the accompanying financial statements.
Had compensation costs for the Company's plans been determined based on the fair
value of awards at the grant dates, consistent with SFAS No. 123, the Brink's
Group's net income and net income per share would approximate the pro forma
amounts indicated below:

                                                    1997        1996        1995
                                                                    
- --------------------------------------------------------------------------------
Net Income attributed to common shares
Brink's Group
     As Reported ..........................   $   73,622      59,695      51,093
     Pro Forma ............................       71,240      58,389      50,432

Net Income per common share
Brink's Group

     Basic, As Reported ...................         1.92        1.56        1.35
     Basic, Pro Forma .....................         1.86        1.53        1.33
     Diluted, As Reported .................         1.90        1.54        1.33
     Diluted, Pro Forma ...................         1.84        1.51        1.31
================================================================================

Note: The pro forma disclosures shown may not be representative of the effects
on reported net income in future years.

The fair value of each stock option grant used to compute pro forma net income
and earnings per share disclosures is estimated at the time of the grant using
the Black-Scholes option-pricing model. The weighted-average assumptions used
in the model are as follows:

                                     1997           1996      1995
- --------------------------------------------------------------------------------
                                                       
Expected dividend yield              0.3%            0.4%      0.4%
Expected volatility                   32%             30%       30%
Risk-Free interest rate              6.2%            6.3%      5.8%
Expected term (in years)             4.9             4.7       4.7
================================================================================

Using these assumptions in the Black-Scholes model, the weighted-average fair
value of options granted during 1997, 1996 and 1995 is $5,155, $3,341 and
$2,317, respectively.

Under SFAS 123, compensation cost is also recognized for the fair value of
employee stock purchase rights. Because the Company settles its employee stock
purchase rights under the Plan at the end of each six-month offering period, the
fair value of these purchase rights was calculated using actual market
settlement data. The weighted-average fair value of the stock purchase rights
granted in 1997, 1996 and 1995 was $366, $224 and $330, respectively, for the
Brink's Group.

                                       98

12. CAPITAL STOCK

The Company, at any time, has the right to exchange each outstanding share of
Burlington Stock for shares of Brink's Stock (or, if no Brink's Stock is then
outstanding, Minerals Stock) having a fair market value equal to 115% of the
fair market value of one share of Burlington Stock. In addition, upon the
disposition of all or substantially all of the properties and assets of the
Burlington Group to any person (with certain exceptions), the Company is
required to exchange each outstanding share of Burlington Stock for shares of
Brink's Stock (or, if no Brink's Stock is then outstanding, Minerals Stock)
having a fair market value equal to 115% of the fair market value of one share
of Burlington Stock.

The Company, at any time has the right, to exchange each outstanding share of
Minerals Stock for shares of Brink's Stock (or, if no Brink's Stock is then
outstanding, Burlington Stock) having a fair market value equal to 115% of the
fair market value of one share of Minerals Stock. In addition, upon the
disposition of all or substantially all of the properties and assets of the
Minerals Group to any person (with certain exceptions), the Company is required
to exchange each outstanding share of Minerals Stock for shares of Brink's Stock
(or, if no Brink's Stock is then outstanding, Burlington Stock) having a fair
market value equal to 115% of the fair market value of one share of Minerals
Stock. If any shares of the Company's Preferred Stock are converted after an
exchange of Minerals Stock for Brink's Stock (or Burlington Stock), the holder
of such Preferred Stock would, upon conversion, receive shares of Brink's Stock
(or Burlington Stock) in lieu of shares of Minerals Stock otherwise issuable
upon such conversion.

Shares of Brink's Stock are not subject to either optional or mandatory
exchange. The net proceeds of any disposition of properties and assets of the
Brink's Group will be attributed to the Brink's Group. In the case of a
disposition of all or substantially all the properties and assets of any other
group, the net proceeds will be attributed to the group the shares of which have
been issued in exchange for shares of the selling group.

Holders of Brink's Stock at all times have one vote per share. Holders of
Burlington Stock and Minerals Stock have .739 and .244 vote per share,
respectively, subject to adjustment on January 1, 2000, and on January 1 every
two years thereafter in such a manner that each class' share of the aggregate
voting power at such time will be equal to that class' share of the aggregate
market capitalization of the Company's common stock at such time. Accordingly,
on each adjustment date, each share of Burlington Stock and Minerals Stock may
have more than, less than or continue to have the number of votes per share as
they have. Holders of Brink's Stock, Burlington Stock and Minerals Stock vote
together as a single voting group on all matters as to which all common
shareholders are entitled to vote. In addition, as prescribed by Virginia law,
certain amendments to the Articles of Incorporation affecting, among other
things, the designation, rights, preferences or limitations of one class of
common stock, or certain mergers or statutory share exchanges, must be
approved by the holders of such class of common stock, voting as a group,
and, in certain circumstances, may also have to be approved by the holders
of the other classes of common stock, voting as separate voting groups.

In the event of a dissolution, liquidation or winding up of the Company, the
holders of Brink's Stock, Burlington Stock and Minerals Stock, effective January
1, 1998, share on a per share basis an aggregate amount equal to 55%, 28% and
17%, respectively, of the funds, if any, remaining for distribution to the
common shareholders. In the case of Minerals Stock, such percentage has been
set, using a nominal number of shares of Minerals Stock of 4,203 (the "Nominal
Shares") in excess of the actual number of shares of Minerals Stock outstanding,
to ensure that the holders of Minerals Stock are entitled to the same share of
any such funds immediately following the consummation of the transactions as
they were prior thereto. These liquidation percentages are subject to adjustment
in proportion to the relative change in the total number of shares of Brink's
Stock, Burlington Stock and Minerals Stock, as the case may be, then outstanding
to the total number of shares of all other classes of common stock then
outstanding (which totals, in the case of Minerals Stock, shall include the
Nominal Shares).

Dividends paid to holders of Brink's Stock are limited to funds of the Company
legally available for the payment of dividends. See the Company's consolidated
financial statements and related footnotes. Subject to these limitations, the
Company's Board, although there is no requirement to do so, intends to declare
and pay dividends on the Brink's Stock based primarily on the earnings,
financial condition, cash flow and business requirements of the Brink's Group.

The Company has the authority to issue up to 2,000 shares of preferred stock,
par value $10 per share. In January 1994, the Company issued $80,500 or 161
shares of Series C Cumulative Convertible Preferred Stock (the "Convertible
Preferred Stock"). The Convertible Preferred Stock, which is convertible into
Minerals Stock and which has been attributed to the Minerals Group, pays an
annual dividend of $31.25 per share payable quarterly, in cash, in arrears, out
of all funds of the Company legally available therefore, when as and if,
declared by the Board. Such stock also bears a liquidation preference of $500
per share, plus an amount equal to accrued and unpaid dividends thereon.

In November 1995, the Company's Board of Directors (the "Board") authorized a
revised share repurchase program which allowed for the purchase , from time to
time, of up to 1,500 shares of Brink's Stock not to exceed an aggregate purchase
price of $45,000 for all common stock of the Company; such shares to be
purchased from time to time in the open market or in private transactions, as
conditions warrant.

                                       99

In 1994, the Board authorized the repurchase, from time to time, of up to
$15,000 of Convertible Preferred Stock. In November 1995 and February 1997, the
Board authorized an increase in the remaining authority to $15,000 and, in May
1997, the Board authorized an increase to $25,000.

Under the share repurchase programs, the Company purchased shares in the periods
presented as follows:

                                                         Years Ended December 31
(In thousands)                                               1997           1996
- --------------------------------------------------------------------------------
                                                                       
Brink's Stock:
     Shares ......................................            166            278
     Cost ........................................         $4,349          6,937

Convertible Preferred Stock:
     Shares ......................................              2             21
     Cost ........................................         $  617          7,897
     Excess carrying amount (a) ..................         $  108          2,120
================================================================================

(a) The excess of the carrying amount of the Convertible Preferred Stock over
the cash paid to holders for repurchases made during the years which is deducted
from preferred dividends in the Company's Statement of Operations.

As of December 31, 1997, the Company had remaining authority to purchase over
time 1,056 shares of Pittston Brink's Common Stock and an additional $24,383 of
its Convertible Preferred Stock. The aggregate purchase price limitation for all
common stock was $24,903 at December 31, 1997. The authority to acquire shares
remains in effect in 1998.

In 1997, 1996, and 1995 dividends paid on the Convertible Preferred Stock
amounted to $3,589, $3,795, and $4,341, respectively. During 1996 and 1997, the
Board declared and the Company paid dividends of 10 cents per share on Brink's
stock.

In December 1992, the Company formed the Pittston Company Employee Benefits
Trust (the "Trust") to hold shares of its common stock to fund obligations under
certain employee benefits programs not including stock option plans. The trust
first began funding obligations under the Company's various stock option plans
in September 1995. Upon formation of the Trust, the Company sold for a
promissory note of the Trust, 4,000 shares of its common stock to the Trust at a
price equal to the fair value of the stock on the date of sale. At December 31,
1997, 2,734 shares of Brink's Stock (3,141 in 1996) remained in the Trust,
valued at market. The value of these shares has no impact on shareholder's
equity.

13. LEASES

The Brink's Group's businesses lease facilities, vehicles, computers and other
equipment under long-term operating leases with varying terms, and most of the
leases contain renewal and/or purchase options. As of December 31, 1997,
aggregate future minimum lease payments under noncancellable operating leases
were as follows:

                              Equipment
                Facilities      & Other     Total
- --------------------------------------------------------------------------------
                                      
1998               $18,842        8,005    26,847
1999                17,489        6,908    24,397
2000                12,765        4,396    17,161
2001                11,553        3,720    15,273
2002                 9,921        3,452    13,373
2003                 7,504          230     7,734
2004                 7,054           85     7,139
2005                 6,834            1     6,835
2006                 6,181            1     6,182
Later Years         12,547            1    12,548
- --------------------------------------------------------------------------------
Total             $110,690       26,799   137,489
================================================================================

These amounts are net of aggregate future minimum non-cancelable sublease
rentals of $1,414.

Net rent expense amounted to $26,414 in 1997,  $25,499 in 1996 and  $23,469
in 1995 .

The Brink's Group incurred capital lease obligations of $3,898 in 1997, $1,923
in 1996, and $648 in 1995. As of December 31, 1997, the Brink's Group's
obligations under capital leases were not significant (Note 9).

14. EMPLOYEE BENEFIT PLANS

The Brink's Group's businesses participate in the Company's noncontributory
defined benefit pension plan covering substantially all nonunion employees who
meet certain minimum requirements in addition to sponsoring certain other
defined benefit plans. Benefits under most of the plans are based on salary
(including commissions, bonuses, overtime and premium pay) and years of service.
The Brink's Group's pension cost relating to its participation in the Company's
defined benefit pension plan is actuarially determined based on its respective
employees and an

                                      100

allocable share of the pension plan assets. The Company's policy is to fund the
actuarially determined amounts necessary to provide assets sufficient to meet
the benefits to be paid to plan participants in accordance with applicable
regulations. The net pension expense (credit) for 1997, 1996 and 1995 for all
plans is as follows:

                                                         Years Ended December 31
                                                    1997        1996        1995
- --------------------------------------------------------------------------------
                                                                    
Service cost benefits earned during year ....   $  7,547       7,125       5,031
Interest cost on projected benefit obligation     10,985       9,788       8,719
Return on assets actual .....................    (30,047)    (23,485)    (28,019)
Return on assets deferred ...................     14,043       8,643      14,717
Other amortization, net .....................       (398)       (243)       (505)
- --------------------------------------------------------------------------------
Net pension expense (credit) ................   $  2,130       1,828         (57)
================================================================================

The assumptions used in determining the net pension expense (credit) for the
Company's primary pension plan were as follows:

                                                   Years Ended December 31
                                                  1997      1996      1995
                                                               
- --------------------------------------------------------------------------------
Interest cost on projected benefit obligation      8.0%      7.5%     8.75%
Expected long-term rate of return on assets       10.0%     10.0%     10.0%
Rate of increase in compensation levels            4.0%      4.0%      4.0%
================================================================================

The funded status and prepaid pension expense at December 31, 1997 and 1996 are
as follows:

                                                                  1997      1996
- --------------------------------------------------------------------------------
                                                                       
Actuarial present value of accumulated benefit obligation:
     Vested                                                   $131,444   112,224
     Nonvested                                                  10,908     8,978
- --------------------------------------------------------------------------------
                                                               142,352   121,202
Benefits attributable to projected salaries                     24,691    21,714
- --------------------------------------------------------------------------------
Projected benefit obligation                                   167,043   142,916
Plan assets at fair value                                      197,518   177,837
- --------------------------------------------------------------------------------
Excess of plan assets over projected
     benefit obligation                                         30,475    34,921
Unamortized initial net asset                                   (1,428)   (2,318)
Unrecognized experience loss (gain)                                468    (1,122)
Unrecognized prior service cost                                    805     1,158
- --------------------------------------------------------------------------------
Net pension assets                                              30,320    32,639
Current pension liabilities                                      1,393     1,031
- --------------------------------------------------------------------------------
Deferred pension assets per balance sheet                     $ 31,713    33,670
================================================================================

For the valuation of the Company's primary pension obligations and the
calculation of the funded status, the discount rate was 7.5% in 1997 and 8% in
1996. The expected long-term rate of return on assets was 10% in both years. The
rate of increase in compensation levels used was 4% in 1997 and 1996.

The unrecognized initial net asset at January 1, 1986 (January 1, 1989, for
certain foreign pension plans), the date of adoption of SFAS 87, has been
amortized over the estimated remaining average service life of the employees. As
of December 31, 1997, approximately 64% of plan assets were invested in equity
securities and 36% in fixed income securities.

The Brink's Group also provides certain postretirement health care and life
insurance benefits for eligible active and retired employees in the United
States and Canada.

For the years 1997, 1996 and 1995, the components of periodic expense for these
postretirement benefits were as follows:

                                                    Years Ended December 31
                                                     1997    1996      1995
- --------------------------------------------------------------------------------
                                                                
Service cost benefits earned during the year         $ 95      92        68
Interest cost on accumulated postretirement
     benefit obligation                               238     248       240
Amortization of gains                                  (4)     --        --
- --------------------------------------------------------------------------------
Total expense                                        $329     340       308
================================================================================

At December 31, 1997 and 1996, the actuarially determined and recorded
liabilities for these postretirement benefits, none of which have been funded,
were as follows:

                                                Years Ended December 31
                                                         1997      1996
- --------------------------------------------------------------------------------
                                                              
Accumulated postretirement benefit obligation:
Retirees                                               $1,291     1,566

Fully eligible active plan participants                   931       791
Other active plan participants                          1,181     1,155
- --------------------------------------------------------------------------------
                                                        3,403     3,512
Unrecognized experience gain                              953       605
- --------------------------------------------------------------------------------
Liability included on the balance sheet                 4,356     4,117
Less current portion                                      259       282
- --------------------------------------------------------------------------------
Noncurrent liability for postretirement health
     care and life insurance benefits                  $4,097    3,835
================================================================================

                                      101

The accumulated postretirement benefit obligation was determined using the unit
credit method and an assumed discount rate of 7.5% in 1997, and 8% in 1996. The
postretirement benefit obligation for U.S. salaried employees does not provide
for changes in health care costs since the employer's contribution to the plan
is a fixed amount. The assumed health care cost trend rate used in 1997 for
employees under a foreign plan was 7.43% grading down to 5% in the year 2001.

The Brink's Group also participates in the Company's Savings-Investment Plan to
assist eligible employees in providing for retirement or other future financial
needs. Employee contributions are matched at rates of 75% to 125% up to 5% of
compensation (subject to certain limitations imposed by the Internal Revenue
Code of 1986, as amended). Contribution expense under the plan aggregated $4,130
in 1997, $3,612 in 1996, and $2,794 in 1995.

15. OTHER OPERATING INCOME

Other operating income includes the Brink's Group's share of net income of
unconsolidated affiliated companies carried on the equity method of $1,471,
$1,941, and $136 for 1997, 1996 and 1995, respectively.

Summarized financial information presented includes the accounts of the
following equity affiliates(a):

                                                Ownership
                                     At December 31, 1997
- --------------------------------------------------------------------------------
                                                   
Servicio Pan Americano De Protecion, S.A. (Mexico)    20%
Brink's Panama, S.A.                                  49%
Brink's Peru, S.A.                                    36%
Brink's S.A. (France)                                 38%
Brink's Schenker, GmbH (Germany)                      50%
Security Services (Brink's Jordan), W.L.L.            45%
Brink's-Allied Limited (Ireland)                      50%
Brink's Arya India Private Limited                    40%
Brink's Pakistan (Pvt.) Limited                       49%
Brink's (Thailand) Ltd.                               40%
================================================================================

                                             1997           1996           1995
- --------------------------------------------------------------------------------
                                                                   
Revenues .........................       $564,560        660,916        715,423
Gross profit .....................         92,635         73,632         58,661
Net income (loss) ................          6,914         10,427         (6,048)
Current assets ...................        111,912        171,336        155,687
Noncurrent assets ................        188,358        197,642        218,019
Current liabilities ..............        132,758        168,986        209,016
Noncurrent liabilities ...........         79,208        109,972         80,860
Net equity .......................         88,304         90,020         83,830
================================================================================

(a) Also includes amounts related to equity affiliates who were either sold
prior to December 31, 1997, became consolidated affiliates through increased
ownership prior to December 31, 1997 or converted to a cost investment. All
amounts for such affiliates are presented pro-rata, where applicable.

Undistributed earnings of such companies approximated $29,100 at December 31,
1997.

16. SEGMENT INFORMATION

Operating revenues by geographic area are as follows:

                                                         Years Ended December 31
                                              1997           1996           1995
- --------------------------------------------------------------------------------
                                                                    
North America (United States
 and Canada) ......................     $  661,765        574,743        508,166
Europe ............................        146,464        128,848        124,151
Latin America .....................        266,445        182,481        137,558
Asia/Pacific ......................         26,760         23,741         18,520
- --------------------------------------------------------------------------------
Total operating revenues ..........     $1,101,434        909,813        788,395
================================================================================

The following is derived from the business segment information in the Company's
consolidated financial statements as it relates to the Brink's Group. See Note 2
for a description of the Company's policy for corporate allocations.

The Brink's Group's portion of the Company's operating profit is as follows:

                                                         Years Ended December 31
                                                 1997         1996          1995
- --------------------------------------------------------------------------------
                                                                   
North America (United States
 and Canada) ............................   $  93,456       79,259       68,665
Europe ..................................      10,039        4,734        5,491
Latin America ...........................      28,711       15,243        6,246
Asia/Pacific ............................       2,229        2,459        1,842
- --------------------------------------------------------------------------------
Brink's Group's portion of the
     Company's segment operating profit .     134,435      101,695       82,244
Allocated general corporate
     expense ............................      (6,871)      (7,457)      (4,770)
- --------------------------------------------------------------------------------
Total operating profit ..................   $ 127,564       94,238       77,474
================================================================================

The Brink's Group's portion of the Company's assets at year end is as follows:

                                                               As of December 31
                                                1997          1996          1995
- --------------------------------------------------------------------------------
                                                                    
North America (United States
 and Canada) .........................      $379,363       307,949       268,911
Europe ...............................        83,779        95,176        99,533
Latin America ........................       156,278        76,450        61,862
Asia/Pacific .........................        14,745        11,339         7,417
- --------------------------------------------------------------------------------
Brink's Group's portion of the
     Company's assets ................       634,165       490,914       437,723
Brink's Group's portion of
     corporate assets ................        27,786        35,409        24,697
Deferred tax reclass .................        30,379        25,342        22,306
- --------------------------------------------------------------------------------
Total assets .........................      $692,330       551,665       484,726
================================================================================

                                      102

Industry segment information is as follows:

                                                    Years Ended December 31
                                               1997       1996         1995
                                                               
Revenues:
Brink's                                    $921,851    754,011      659,459
BHS                                         179,583    155,802      128,936
- --------------------------------------------------------------------------------
Total revenues                           $1,101,434    909,813      788,395
================================================================================
Operating Profit:
Brink's (a)                                 $81,591     56,823      42,738
BHS (b) (c)                                  52,844     44,872      39,506
- --------------------------------------------------------------------------------
Segment operating profit                    134,435    101,695      82,244
Allocated general corporate expense          (6,871)    (7,457)     (4,770)
- --------------------------------------------------------------------------------
Total operating profit                      $127,564     94,238      77,474
================================================================================

(a) Includes equity in net income of unconsolidated foreign affiliates of $1,471
in 1997, $1,941 in 1996 and $136 in 1995 (Note 15).

(b) As of January 1, 1992, BHS elected to capitalize categories of costs not
previously capitalized for home security installations to more accurately
reflect subscriber installation costs. The effect of this change in accounting
principle was to increase operating profit $4,943 in 1997, $4,539 in 1996 and
$4,525 in 1995 (Note 5).

(c) BHS changed its annual depreciation rate in 1997 resulting in a reduction of
depreciation expense for capitalized installation costs of $8,915 (Note 5).

                                                               As of December 31
                                                  1997         1996         1995
- --------------------------------------------------------------------------------
                                                                    
Capital Expenditures:
Brink's .................................     $ 49,132       34,072       23,063
BHS .....................................       70,927       61,522       47,256
Allocated general corporate .............          214        2,083          111
- --------------------------------------------------------------------------------
Total capital expenditures ..............     $120,273       97,677       70,430
================================================================================

Depreciation and Amortization:
Brink's .................................     $ 30,758       24,293       21,844
BHS .....................................       30,344       30,115       22,408
Allocated general corporate expense .....          229          158          105
- --------------------------------------------------------------------------------
Total depreciation and amortization .....     $ 61,331       54,566       44,357
================================================================================

Assets at December 31:
Brink's .................................      441,138      340,922      321,022
BHS .....................................      193,027      149,992      116,701
- --------------------------------------------------------------------------------
Identifiable assets .....................      634,165      490,914      437,723
Allocated portion of the Company's
     corporate assets ...................       27,786       35,409       24,697
Deferred tax reclass ....................       30,379       25,342       22,306
- --------------------------------------------------------------------------------
Total assets ............................     $692,330      551,665      484,726
================================================================================

17. CONTINGENT LIABILITIES

In April 1990, the Company entered into a settlement agreement to resolve
certain environmental claims against the Company arising from hydrocarbon
contamination at a petroleum terminal facility ("Tankport") in Jersey City, New
Jersey, which operations were sold in 1983. Under the settlement agreement, the
Company is obligated to pay 80% of the remediation costs. Based on data
available to the Company and its environmental consultants, the Company
estimates its portion of the cleanup costs on an undiscounted basis using
existing technologies to be between $6,600 and $11,900 over a period of up to
five years. Management is unable to determine that any amount within that range
is a better estimate due to a variety of uncertainties, which include the extent
of the contamination at the site, the permitted technologies for remediation and
the regulatory standards by which the clean-up will be conducted. The clean-up
estimates have been modified from prior years' in light of cost inflation and
certain assumptions the Company is making with respect to the end use of the
property. The estimate of costs and the timing of payments could change as a
result of changes to the remediation plan required, changes in the technology
available to treat the site, unforseen circumstances existing at the site and
additional cost inflation.

The Company commenced insurance coverage litigation in 1990, in the United
States District Court for the District of New Jersey, seeking a declaratory
judgment that all amounts payable by the Company pursuant to the Tankport
obligation were reimbursable under comprehensive general liability and pollution
liability policies maintained by the Company. In August 1995, the District Court
ruled on various Motions for Summary Judgement. In its decision, the Court found
favorably for the Company on several matters relating to the comprehensive
general liability policies but concluded that the pollution liability policies
did not contain pollution coverage for the types of claims associated with the
Tankport site. On appeal, the Third Circuit reversed the District Court and held
that the insurers could not deny coverage for the reasons stated by the District
Court, and the case was remanded to the District Court for trial. In the event
the parties are unable to settle the dispute, the case is scheduled to be tried
beginning September, 1998. Management and its outside legal counsel continue to
believe that recovery of a substantial portion of the cleanup costs will
ultimately be probable of realization. Accordingly, based on estimates of
potential liability, probable realization of insurance recoveries, related
developments of New Jersey law, and the Third Circuit's decision, it is the
Company's belief that the ultimate amount that it would be liable for is
immaterial.

                                      103

Under the Coal Industry Retiree Health Benefit Act of 1992 (the "Act"), the
Company and its majority-owned subsidiaries at July 20, 1992, including certain
companies of the Brink's Group included in these financial statements, are
jointly and severally liable with the Burlington and of the Minerals Group for
the costs of certain companies of health care coverage provided for by that Act.
For a description of the Act and an estimate of certain of such costs, see Note
14 to the Company's consolidated financial statements. At this time, the Company
expects the Minerals Group to generate sufficient cash flow to discharge its
obligations under the Act.

18. SUPPLEMENTAL CASH FLOW INFORMATION

For the years ended December 31, 1997, 1996 and 1995, cash payments for income
taxes, net of refunds received, were $39,476, $33,718, and $22,352,
respectively.

For the years ended December 31, 1997, 1996 and 1995, cash payments for interest
were $11,402, $1,825, and $1,663, respectively.

19. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

Tabulated below are certain data for each quarter of 1997 and 1996. The 1996 and
first three quarters of 1997 net income per share amounts have been restated to
comply with SFAS No. 128, "Earnings Per Share" (Note 1).

                                             1st        2nd        3rd        4th
- ---------------------------------------------------------------------------------
                                                                  
1997 Quarters:
Operating revenues ..................   $251,384    268,775    280,075    301,200
Gross profit ........................     63,476     71,034     72,193     79,726
Net income ..........................     15,306     17,739     19,372     21,205

Net income per Pittston Brink's Group
  common share:
  Basic .............................   $    .40        .46        .51        .55
  Diluted ...........................        .40        .46        .50        .54
- ---------------------------------------------------------------------------------
1996 Quarters:
Operating revenues ..................   $212,560    222,055    232,022    243,176
Gross profit ........................     49,994     52,613     57,043     62,988
Net income ..........................     11,839     14,034     15,841     17,981

Net income per Pittston Brink's Group
  common share:
  Basic .............................   $    .31        .37        .41        .47
  Diluted ...........................        .31        .36        .41        .46
=================================================================================

                                      104

Pittston Burlington Group

STATEMENT OF MANAGEMENT RESPONSIBILITY

The management of The Pittston Company (the "Company") is responsible for
preparing the accompanying Pittston Burlington Group (the "Burlington Group")
financial statements and for their integrity and objectivity. The statements
were prepared in accordance with generally accepted accounting principles.
Management has also prepared the other information in the annual report and is
responsible for its accuracy.

In meeting our responsibility for the integrity of the financial statements, we
maintain a system of internal controls designed to provide reasonable assurance
that assets are safeguarded, that transactions are executed in accordance with
management's authorization and that the accounting records provide a reliable
basis for the preparation of the financial statements. Qualified personnel
throughout the organization maintain and monitor these internal controls on an
ongoing basis. In addition, the Company maintains an internal audit department
that systematically reviews and reports on the adequacy and effectiveness of the
controls, with management follow-up as appropriate.

Management has also established a formal Business Code of Ethics which is
distributed throughout the Company. We acknowledge our responsibility to
establish and preserve an environment in which all employees properly understand
the fundamental importance of high ethical standards in the conduct of our
business.

The accompanying financial statements have been audited by KPMG Peat Marwick
LLP, independent auditors. During the audit they review and make appropriate
tests of accounting records and internal controls to the extent they consider
necessary to express an opinion on the Burlington Group's financial statements.

The Company's Board of Directors pursues its oversight role with respect to the
Burlington Group's financial statements through the Audit and Ethics Committee,
which is composed solely of outside directors. The Committee meets periodically
with the independent auditors, internal auditors and management to review the
Company's control system and to ensure compliance with applicable laws and the
Company's Business Code of Ethics.

We believe that the policies and procedures described above are appropriate and
effective and do enable us to meet our responsibility for the integrity of the
Burlington Group's financial statements.

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Shareholders
The Pittston Company

We have audited the accompanying balance sheets of Pittston Burlington Group (as
described in Note 1) as of December 31, 1997 and 1996, and the related
statements of operations and cash flows for each of the years in the three-year
period ended December 31, 1997. These financial statements are the
responsibility of The Pittston Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements of Pittston Burlington Group present
fairly, in all material respects, the financial position of Pittston Burlington
Group as of December 31, 1997 and 1996, and the results of its operations and
its cash flows for each of the years in the three-year period ended December 31,
1997, in conformity with generally accepted accounting principles.

As more fully discussed in Note 1, the financial statements of Pittston
Burlington Group should be read in connection with the audited consolidated
financial statements of The Pittston Company and subsidiaries.

KPMG Peat Marwick LLP
Stamford, Connecticut

January 28, 1998

                                      105

Pittston Burlington Group
BALANCE SHEETS

                                                                   December 31
(In thousands)                                                   1997       1996
================================================================================
                                                                       
ASSETS
Current assets:
Cash and cash equivalents                                    $ 28,790     17,818
Accounts receivable:
 Trade                                                        302,860    260,629
 Other                                                         14,056     11,277
- --------------------------------------------------------------------------------
                                                              316,916    271,906
 Less estimated amount uncollectible                           10,110      9,528
- --------------------------------------------------------------------------------
                                                              306,806    262,378
Inventories                                                     1,359      2,251
Prepaid expenses                                               11,050     12,459
Deferred income taxes (Note 8)                                  7,159      7,847
- --------------------------------------------------------------------------------
Total current assets                                          355,164    302,753
Property, plant and equipment, at cost (Note 5)               207,447    176,183
 Less accumulated depreciation and amortization                78,815     62,900
- --------------------------------------------------------------------------------
                                                              128,632    113,283
Intangibles, net of accumulated amortization (Note 6)         174,791    177,797
Deferred pension assets (Note 14)                               7,600      9,504
Deferred income taxes (Note 8)                                 19,814     19,015
Other assets                                                   15,442     13,046
- --------------------------------------------------------------------------------
Total assets                                                 $701,443    635,398
================================================================================

LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities:
Short-term borrowings                                        $ 31,071     29,918
Current maturities of long-term debt (Note 9)                   3,176      2,916
Accounts payable                                              194,489    175,198
Payable--Pittston Minerals Group (Note 2)                        4,966      3,270
Accrued liabilities:
 Taxes                                                         14,958      6,343
 Workers' compensation and other claims                           732      2,614
 Payroll and vacation                                          18,380     10,207
 Miscellaneous (Note 14)                                       44,293     48,135
- --------------------------------------------------------------------------------
                                                               78,363     67,299
- --------------------------------------------------------------------------------
Total current liabilities                                     312,065    278,601

Long-term debt, less current maturities (Note 9)               37,016     28,723
Postretirement benefits other than pensions (Note 14)           3,518      3,145
Deferred income taxes (Note 8)                                  1,447      1,880
Payable--Pittston Minerals Group (Note 2)                       13,239     13,310
Other liabilities                                              10,448      4,750
Commitments and contingent liabilities (Notes 9, 13 and 17)

Shareholder's equity (Notes 3, 11 and 12)                     323,710    304,989
- --------------------------------------------------------------------------------
Total liabilities and shareholder's equity                   $701,443    635,398
================================================================================

See accompanying notes to financial statements.

                                      106

Pittston Burlington Group

STATEMENTS OF OPERATIONS

                                                        Years Ended December 31
- --------------------------------------------------------------------------------
(In thousands, except per share amounts)            1997       1996        1995
================================================================================
                                                                   
Operating revenues                           $ 1,662,338  1,484,869   1,403,195
- --------------------------------------------------------------------------------
Costs and expenses:
Operating expenses                             1,455,336  1,301,974   1,234,095
Selling, general and administrative expenses     153,104    127,254     117,980
- --------------------------------------------------------------------------------
Total costs and expenses                       1,608,440  1,429,228   1,352,075
- --------------------------------------------------------------------------------
Other operating income, net                        2,507      1,530       2,833
- --------------------------------------------------------------------------------
Operating profit                                  56,405     57,171      53,953
Interest income (Note 2)                             820      2,463       4,430
Interest expense (Note 2)                         (5,211)    (4,097)     (5,108)
Other expense, net                                  (679)    (2,028)     (1,702)
- --------------------------------------------------------------------------------
Income before income taxes                        51,335     53,509      51,573
Provision for income taxes (Note 8)               18,987     19,708      18,718
- --------------------------------------------------------------------------------
Net income                                   $    32,348     33,801      32,855
================================================================================

Net income per common share (Note 10):
   Basic                                     $      1.66       1.76        1.73
   Diluted                                          1.62       1.72        1.68
================================================================================
Average common shares outstanding (Note 10):
   Basic                                          19,448     19,223      18,966
   Diluted                                        19,993     19,681      19,596
================================================================================

See accompanying notes to financial statements.

                                      107

Pittston Burlington Group

STATEMENTS OF CASH FLOWS

                                                                 Years Ended December 31
(In thousands)                                                1997        1996        1995
===========================================================================================
                                                                              
Cash flows from operating activities:
Net income                                                $ 32,348      33,801      32,855
Adjustments to reconcile net income to net cash
  provided by operating activities:
 Depreciation and amortization                              29,905      23,427      19,972
 Provision for aircraft heavy maintenance                   34,057      32,057      26,317
 Credit for deferred income taxes                           (1,429)     (2,830)     (4,345)
 Provision for pensions, noncurrent                          1,606       1,461         218
 Provision for uncollectible accounts receivable             4,461       3,009       2,336
 Other operating, net                                        2,591       1,916         843
 Change in operating assets and liabilities,
  net of effects of acquisitions and dispositions:
  Increase in accounts receivable                          (43,012)    (33,875)    (38,946)
  Decrease (increase) in inventories                           893        (569)        351
  Decrease (increase) in prepaid expenses                    1,638       1,249      (4,127)
  Increase in accounts payable and accrued liabilities      13,534       5,300       5,193
  Increase in other assets                                  (9,479)       (272)       (551)
  Increase (decrease) in other liabilities                   2,819        (824)        642
  Other, net                                                 1,576        (761)     (1,270)
- -------------------------------------------------------------------------------------------
Net cash provided by operating activities                   71,508      63,089      39,488
- -------------------------------------------------------------------------------------------
Cash flows from investing activities:
Additions to property, plant and equipment                 (31,064)    (61,321)    (32,399)
Proceeds from disposal of property, plant and equipment         75       3,898         422
Aircraft heavy maintenance expenditures                    (29,748)    (23,373)    (22,356)
Acquisitions, net of cash acquired,
  and related contingency payments                          (9,131)     (2,944)     (1,338)
Other, net                                                   4,857       4,757       3,683
- -------------------------------------------------------------------------------------------
Net cash used by investing activities                      (65,011)    (78,983)    (51,988)
- -------------------------------------------------------------------------------------------
Cash flows from financing activities:
Additions to debt                                           39,009       3,584      28,060
Reductions of debt                                         (32,663)     (3,948)     (2,834)
Payments from (to) Minerals Group, net                       7,696      12,179        (878)
Repurchase of common stock                                  (7,407)     (1,406)     (1,132)
Proceeds from exercise of stock options
  and employee stock purchase plan                           2,389       3,207         951
Dividends paid                                              (4,549)     (4,514)     (4,204)
Cost of stock proposal                                          --      (1,237)         --
- -------------------------------------------------------------------------------------------
Net cash provided by financing activities                    4,475       7,865      19,963
- -------------------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents        10,972      (8,029)      7,463
Cash and cash equivalents at beginning of period            17,818      25,847      18,384
- -------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period                $ 28,790      17,818      25,847
===========================================================================================

See accompanying notes to financial statements.

                                      108

Pittston Burlington Group

NOTES TO FINANCIAL STATEMENTS

(In thousands, except per share amounts)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

As used herein, the "Company" includes The Pittston Company and its direct and
indirect subsidiaries, except as otherwise indicated by the context. The Company
is comprised of three separate groups - Pittston Brink's Group, Pittston
Burlington Group, and Pittston Minerals Group. The financial statements of the
Burlington Group include the balance sheets, the results of operations and cash
flows of the Burlington Inc. ("Burlington") operations of the Company, and a
portion of the Company's corporate assets and liabilities and related
transactions which are not separately identified with operations of a specific
segment. The Burlington Group's financial statements are prepared using the
amounts included in the Company's consolidated financial statements. Corporate
allocations reflected in these financial statements are determined based upon
methods which management believes to be a reasonable and equitable allocation of
such items (Note 2).

The Company provides to holders of Pittston Burlington Group Common Stock
("Burlington Stock") separate financial statements, financial review,
descriptions of business and other relevant information for the Burlington Group
in addition to the consolidated financial information of the Company.
Notwithstanding the attribution of assets and liabilities (including contingent
liabilities) among the Minerals Group, the Brink's Group and the Burlington
Group for the purpose of preparing their respective financial statements, this
attribution and the change in the capital structure of the Company as a result
of the approval of the Brink's Stock Proposal did not affect legal title to such
assets or responsibility for such liabilities for the Company or any of its
subsidiaries. Holders of Burlington Stock are common shareholders of the
Company, which continues to be responsible for all liabilities. Financial
impacts arising from one group that affect the Company's financial condition
could affect the results of operations and financial condition of each of the
groups. Since financial developments within one group could affect other groups,
all shareholders of the Company could be adversely affected by an event directly
impacting only one group. Accordingly, the Company's consolidated financial
statements must be read in connection with the Burlington Group's financial
statements.

Principles of Combination

The accompanying financial statements reflect the combined accounts of the
businesses comprising the Burlington Group and their majority-owned
subsidiaries. The Burlington Group's interests in 20% to 50% owned companies are
carried on the equity method unless control exists, in which case, consolidation
occurs. All material intercompany items and transactions have been eliminated in
combination. Certain prior year amounts have been reclassified to conform to the
current year's financial statement presentation.

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, demand deposits and investments
with original maturities of three months or less.

Inventories

Inventories are stated at cost (determined under the first-in, first-out or
average cost method) or market, whichever is lower.

Property, Plant and Equipment

Expenditures for maintenance and repairs are charged to expense, and the costs
of renewals and betterments are capitalized. Depreciation is provided
principally on the straight-line method at varying rates depending upon
estimated useful lives.

Intangibles

The excess of cost over fair value of net assets of businesses acquired is
amortized on a straight-line basis over the estimated periods benefited.

The Burlington Group evaluates the carrying value of intangibles and the periods
of amortization to determine whether events and circumstances warrant revised
estimates of asset value or useful lives. The Burlington Group annually assesses
the recoverability of the excess of cost over net assets acquired by determining
whether the amortization of the asset balance over its remaining life can be
recovered through projected undiscounted future operating cash flows. Evaluation
of asset value as well as periods of amortization are performed on a
disaggregated basis at each of the Burlington Group's operating units.

                                      109

Income Taxes

Income taxes are accounted for in accordance with Statement of Financial
Accounting Standards ("SFAS") No. 109, "Accounting for Income Taxes", which
requires recognition of deferred tax liabilities and assets for the expected
future tax consequences of events that have been included in the financial
statements or tax returns. Under this method, deferred tax liabilities and
assets are determined based on the difference between the financial statement
and tax bases of assets and liabilities using enacted tax rates in effect for
the year in which these items are expected to reverse.

See Note 2 for allocation of the Company's U.S. federal income taxes to
the Burlington Group.

Postretirement Benefits Other Than Pensions

Postretirement benefits other than pensions are accounted for in accordance with
SFAS No. 106, "Employers' Accounting for Postretirement Benefits Other Than
Pensions", which requires employers to accrue the cost of such retirement
benefits during the employees' service with the Company.

Accounting for Stock Based Compensation

The Burlington Group has implemented the disclosure-only provisions of
SFAS No. 123 "Accounting for Stock Based Compensation" (Note 11). The
Burlington Group continues to measure compensation expense for its
stock-based compensation plans using the intrinsic value based method
of accounting prescribed by Accounting Principles Board Opinion ("APB")
No. 25, "Accounting for Stock Issued to Employees."

Foreign Currency Translation

Assets and liabilities of foreign operations have been translated at current
exchange rates, and related revenues and expenses have been translated at
average rates of exchange in effect during the year. Resulting cumulative
translation adjustments have been included in shareholder's equity. Translation
adjustments relating to operations in countries with highly inflationary
economies are included in net income, along with all transaction gains and
losses for the period.

A portion of the Burlington Group's financial results is derived from activities
in several foreign countries, each with a local currency other than the U.S.
dollar. Because the financial results of the Burlington Group are reported in
U.S. dollars, they are affected by the changes in the value of various foreign
currencies in relation to the U.S. dollar. However, the Burlington Group's
international activity is not concentrated in any single currency, which reduces
the risks of foreign currency rate fluctuations.

Financial Instruments

The Burlington Group uses foreign currency forward contracts to hedge the risk
of changes in foreign currency rates associated with certain transactions
denominated in various currencies. The Burlington Group also utilizes other
financial instruments to protect against adverse price movements in jet fuel
which it consumes as well as interest rate changes in certain variable rate
obligations.

Gains and losses on these contracts, designated as effective hedges, are
deferred and recognized as part of the specific transaction hedged. Since they
are accounted for as hedges, the fair value of these contracts is not recognized
in the Burlington Group's Financial Statements. Gains or losses resulting from
the early termination of such contracts are deferred and amortized as an
adjustment to the currency transaction hedged, the yield of variable rate
obligations, or the cost of jet fuel over the remaining period originally
covered by the terminated contracts. In addition, if the underlying items being
hedged were retired prior to maturity, the unamortized gain or loss resulting
from the early termination of the related interest rate swap would be included
in the gain or loss on the extinguishment of the obligation.

Revenue Recognition

Revenues related to transportation services are recognized, together with
related transportation costs, on the date shipments physically depart from
facilities en route to destination locations. Financial statements resulting
from existing recognition policies do not materially differ from the allocation
between reporting periods based on relative transit times in each reporting
period with expenses recognized as incurred.

Net Income Per Share

Basic and diluted net income per share for the Burlington Group are computed by
dividing net income by the basic weighted-average common shares outstanding and
the diluted weighted-average common shares outstanding, respectively. Diluted
weighted-average common shares outstanding includes additional shares assuming
the exercise of stock options. However, when the exercise of stock options is
antidilutive, they are excluded from the calculation. The shares of Burlington
Stock held in The Pittston Company Employee Benefits Trust ("the Trust" - see
Note 12) are subject to the treasury stock method and effectively are not
included in the basic and diluted net income per share calculations.

Use of Estimates

In accordance with generally accepted accounting principles, management of the
Company has made a number of estimates and assumptions relating to the reporting
of assets and liabilities and the disclosure of contingent assets and
liabilities to prepare these financial statements. Actual results could differ
from those estimates.

                                      110

Accounting Changes

In 1997, the Burlington Group implemented SFAS No. 128 "Earnings Per Share."
SFAS No. 128 replaced the calculation of primary and fully diluted net income
per share with basic and diluted net income per share (Note 10). Unlike primary
net income per share, basic net income per share excludes any dilutive effects
of options, warrants and convertible securities. Diluted net income per share is
very similar to the previous fully diluted net income per share. All
prior-period net income per share data has been restated to conform with the
provisions of SFAS No. 128.

Pending Accounting Changes

The Burlington Group will implement SFAS No. 130, "Reporting Comprehensive
Income" in the first quarter of 1998. SFAS No. 130 establishes standards for the
reporting and display of comprehensive income and its components in financial
statements. Comprehensive income generally represents all changes in
shareholders' equity except those resulting from investments by or distributions
to shareholders. With the exception of foreign currency translation adjustments,
such changes are not significant to the Burlington Group.

SFAS No. 131, "Disclosures about Segments of an Enterprise and Related
Information", will be implemented in the financial statements for the year ended
December 31, 1998. SFAS No. 131 requires publicly-held companies to report
financial and descriptive information about operating segments in financial
statements issued to shareholders for interim and annual periods. The SFAS also
requires additional disclosures with respect to products and services,
geographic areas of operation and major customers. The adoption of this SFAS is
not expected to have a material impact on the financial statements of the
Burlington Group.

2. RELATED PARTY TRANSACTIONS

The following policies may be modified or rescinded by action of the Company's
Board of Directors (the "Board"), or the Board may adopt additional policies,
without approval of the shareholders of the Company, although the Board has no
present intention to do so. The Company allocated certain corporate general and
administrative expenses, net interest expense and related assets and liabilities
in accordance with the policies described below. Corporate assets and
liabilities are primarily deferred pension assets, income taxes and accrued
liabilities.

Financial

As a matter of policy, the Company manages most financial activities of the
Burlington Group, Brink's Group and Minerals Group on a centralized,
consolidated basis. Such financial activities include the investment of surplus
cash; the issuance, repayment and repurchase of short-term and long-term debt;
the issuance and repurchase of common stock and the payment of dividends. In
preparing these financial statements, transactions primarily related to invested
cash, short-term and long-term debt (including convertible debt), related net
interest and other financial costs have been attributed to the Burlington Group
based upon its cash flows for the periods presented after giving consideration
to the debt and equity structure of the Company. The Company attributes
long-term debt to the Burlington Group based upon the purpose for the debt in
addition to the cash requirements of the Burlington Group. See Note 9 for
details and amounts of long-term debt. The portion of the Company's interest
expense allocated to the Burlington Group for 1997, 1996 and 1995 was $924,
$663, and $2,327, respectively. Management believes such method of allocation to
be equitable and a reasonable estimate of the cost attributable to the
Burlington Group.

To the extent borrowings are deemed to occur between the Burlington Group, the
Brink's Group and the Minerals Group, intergroup accounts are established
bearing interest at the rate in effect from time to time under the Company's
unsecured credit lines or, if no such credit lines exist, at the prime rate
charged by Chase Manhattan Bank from time to time. At December 31, 1997 and
1996, the Minerals Group owed the Burlington Group $0 and $7,730, respectively,
as the result of such borrowings.

Income Taxes

The Burlington Group and its domestic subsidiaries are included in the
consolidated U.S. federal income tax return filed by the Company.

The Company's consolidated provision and actual cash payments for U.S. federal
income taxes are allocated between the Burlington Group, Brink's Group and
Minerals Group in accordance with the Company's tax allocation policy and
reflected in the financial statements for each Group. In general, the
consolidated tax provision and related tax payments or refunds are allocated
among the Groups, for financial statement purposes, based principally upon the
financial income, taxable income, credits and other amounts directly related to
the respective Group. Tax benefits that cannot be used by the Group generating
such attributes, but can be utilized on a consolidated basis, are allocated to
the Group that generated such benefits and an intergroup account is established
for the benefit of the Group generating the attributes. As a result, the
allocated Group amounts of taxes payable or refundable are not necessarily
comparable to those that would have resulted if the Groups had filed separate
tax returns. At December 31, 1997 and 1996, the Burlington Group owed the
Minerals Group $18,239 and $24,310, respectively, for such tax benefits, of
which $13,239 and $13,310, respectively, were not expected to be paid within one
year from such dates in accordance with the policy. The Burlington Group paid
the Minerals Group $10,278 in 1997 and $14,949 in 1996 for the utilization of
such tax benefits.

                                      111

Shared Services

A portion of the Company's corporate general and administrative expenses and
other shared services has been allocated to the Burlington Group based upon
utilization and other methods and criteria which management believes to be
equitable and a reasonable estimate of the cost attributable to the Burlington
Group. These allocations were $6,859, $7,433, and $4,770 in 1997, 1996 and 1995,
respectively.

Pension

The Burlington Group's pension cost related to its participation in the
Company's noncontributory defined benefit pension plan is actuarially determined
based on its respective employees and an allocable share of the pension plan
assets and calculated in accordance with SFAS No. 87, "Employers' Accounting for
Pensions". Pension plan assets have been allocated to the Burlington Group based
on the percentage of its projected benefit obligation to the plan's total
projected benefit obligation. Management believes such method of allocation to
be equitable and a reasonable estimate of the cost attributable to the
Burlington Group.

3. SHAREHOLDER'S EQUITY

The following presents shareholder's equity of the Burlington Group:

                                                              As of December 31
                                                 1997         1996         1995
- --------------------------------------------------------------------------------
                                                                   
Balance at beginning of period               $304,989      271,853      240,880
Net income                                     32,348       33,801       32,855
Foreign currency translation
     adjustment                                (8,315)        (171)         945
Stock options exercised                         2,389        2,970          548
Stock released from employee benefits
     trust to employee benefits plan            3,604        3,017        1,661
Stock repurchases                              (7,405)      (1,407)      (1,134)
Dividends declared                             (4,805)      (4,707)      (4,201)
Cost of stock proposal                            --        (1,237)         --
Tax benefit of options exercised                  905          870          299
- --------------------------------------------------------------------------------
Balance at end of period                     $323,710      304,989      271,853
================================================================================

The cumulative foreign currency translation adjustment deducted from
shareholder's equity is $9,207, $892, and $721 at December 31, 1997, 1996 and
1995, respectively.

4. ACQUISITIONS

In June 1997, the Burlington Group acquired Cleton & Co. ("Cleton"), a
leading logistics provider in the Netherlands. The Burlington Group
acquired Cleton for the equivalent of U.S. $10,700 and the initial
assumption of the equivalent of U.S. $10,000 of debt, of which
approximately U.S. $6,000 was outstanding at December 31, 1997.
Additional contingent payments ranging from the current equivalent of
U.S. $0 to U.S. $18,000 will be paid over the next three years based on
certain performance criteria of Cleton. Approximately $3,000 of
goodwill is being amortized on a straight-line basis over 40 years.

In addition, in 1997, the Burlington Group acquired the remaining interests in
South Africa.

These acquisitions were accounted for under the purchase method, and,
accordingly, the costs of the acquisitions were allocated to the assets acquired
and liabilities assumed based on their respective fair values. The results of
the operations of each of the acquired companies have been included in the
Burlington Group's combined results of operations since each respective date of
acquisition.

These 1997 acquisitions were not material to the Burlington Group's combined
financial statements taken as a whole. There were no material acquisitions in
1996 or 1995.

5. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment, at cost, consists of the following:

                                                              As of December 31
                                                            1997           1996
- --------------------------------------------------------------------------------
                                                                      
Land                                                    $  1,777          3,266
Buildings                                                 47,248         32,466
Machinery and equipment                                  158,422        140,451
- --------------------------------------------------------------------------------
Total                                                   $207,447        176,183
================================================================================

The estimated useful lives for property, plant and equipment are as follows:

                                                                          Years
- --------------------------------------------------------------------------------
                                                                      
Buildings                                                               15 to 40
Machinery and equipment                                                  3 to 15
================================================================================

Depreciation of property, plant and equipment aggregated $23,285 in 1997,
$16,887 in 1996, and $13,448 in 1995.

                                      112

6. INTANGIBLES

Intangibles consist entirely of the excess of cost over fair value of net assets
of businesses acquired and are net of accumulated amortization of $85,150 at
December 31, 1997 and $79,302 at December 31, 1996. The estimated useful life of
intangibles is generally forty years. Amortization of intangibles aggregated
$6,528 in 1997, $6,465 in 1996, and $6,295 in 1995.

7. FINANCIAL INSTRUMENTS

Financial instruments which potentially subject the Burlington Group to
concentrations of credit risk consist principally of cash and cash equivalents,
and trade receivables. The Burlington Group places its cash and cash equivalents
with high credit quality financial institutions. Also, by policy, the amount of
credit exposure to any one financial institution is limited. Concentrations of
credit risk with respect to trade receivables are limited due to the large
number of customers comprising the Burlington Group's customer base and their
dispersion across many different geographic areas.

The following details the fair values of financial instruments for which it is
practicable to estimate the value:

Cash and cash equivalents

The carrying amounts approximate fair value because of the short maturity of
these instruments.

Accounts receivable, accounts payable and accrued liabilities

The carrying amounts approximate fair value because of the short-term nature
of these instruments.

Debt

The aggregate fair value of the Burlington Group's long-term debt obligations,
which is based upon quoted market prices and rates currently available to the
Burlington Group for debt with similar terms and maturities, approximates the
carrying amount.

Off-balance sheet instruments

The Burlington Group utilizes various off-balance sheet financial instruments,
as discussed below, to hedge its foreign currency and other market exposures.
The risk that counterparties to such instruments may be unable to perform is
minimized by limiting the counterparties to major financial institutions. The
Burlington Group does not expect any losses due to such counterparty default.

Foreign currency forward contracts--The Company, on behalf of the Burlington
Group, enters into foreign currency forward contracts with a duration of up to
one year as a hedge against liabilities denominated in various currencies. These
contracts minimize the Burlington Group's exposure to exchange rate movements
related to cash requirements of foreign operations denominated in various
currencies. At December 31, 1997, the total notional value of foreign currency
forward contracts outstanding was $2,216 and the fair value approximated
notional value.

Fuel contracts--The Company, on behalf of the Burlington Group, has hedged a
portion of its jet fuel requirements through several commodity option
transactions that are intended to protect against significant increases in jet
fuel prices. At December 31, 1997, these transactions aggregated 33.3 million
gallons and mature periodically throughout the first three quarters of 1998. The
fair value of these fuel hedge transactions may fluctuate over the course of the
contract period due to changes in the supply and demand for oil and refined
products. Thus, the economic gain or loss, if any, upon settlement of the
contracts may differ from the fair value of the contracts at an interim date. At
December 31, 1997, the fair value of these contracts was not significant.

Interest rate contracts--In connection with the aircraft leasing by BAX Global,
the Company has entered into an interest rate swap agreement. This variable to
fixed interest rate swap agreement has a notional value of $30,000 and fixes the
Company's variable interest rate on these leases at 7.05% through January 2,
1998. At December 31, 1997, the fair value of the contract was not significant.

8. INCOME TAXES

The provision (credit) for income taxes consists of the following:

                                       U.S.
                                    Federal     Foreign       State       Total
- --------------------------------------------------------------------------------
                                                                
1997:
Current                            $ 16,646       2,570       1,200      20,416
Deferred                              1,774      (3,461)        258      (1,429)
- --------------------------------------------------------------------------------
Total                              $ 18,420        (891)      1,458      18,987
================================================================================
1996:
Current                            $ 18,967       2,371       1,200      22,538
Deferred                                351      (3,166)        (15)     (2,830)
- --------------------------------------------------------------------------------
Total                              $ 19,318        (795)      1,185      19,708
================================================================================
1995:
Current                            $ 20,139       1,424       1,500      23,063
Deferred                             (2,839)     (1,064)       (442)     (4,345)
- --------------------------------------------------------------------------------
Total                              $ 17,300         360       1,058      18,718
================================================================================

                                      113

The significant components of the deferred tax benefit were as follows:

                                                       Years Ended December 31
                                               1997         1996          1995
- --------------------------------------------------------------------------------
                                                                   
Deferred tax benefit, exclusive
     of the components listed below         $(1,528)        (372)       (2,212)
Net operating loss carryforwards             (3,382)      (2,887)       (1,490)
Alternative minimum tax credits               3,481          429          (565)
Change in the valuation allowance for
     deferred tax assets                         --           --           (78)
- --------------------------------------------------------------------------------
Total                                       $(1,429)      (2,830)       (4,345)
================================================================================

The tax benefit for compensation expense related to the exercise of certain
employee stock options for tax purposes in excess of compensation expense for
financial reporting purposes is recognized as an adjustment to shareholder's
equity.

The components of the net deferred tax asset as of December 31, 1997 and
December 31, 1996 were as follows:

                                                            1997          1996
- --------------------------------------------------------------------------------
                                                                     
Deferred tax assets:
Accounts receivable                                      $ 2,679         2,517
Postretirement benefits other than pensions                1,493         1,302
Workers' compensation and other claims                       869           761
Other liabilities and reserves                            14,436        13,358
Miscellaneous                                              1,716         1,840
Net operating loss carryforwards                          11,609         8,227
Alternative minimum tax credits                            8,505        11,597
- --------------------------------------------------------------------------------
Total deferred tax assets                                 41,307        39,602
- --------------------------------------------------------------------------------
Deferred tax liabilities:
Property, plant and equipment                              3,254           625
Pension assets                                              (726)          807
Other assets                                                 636           496
Miscellaneous                                             12,617        12,692
- --------------------------------------------------------------------------------
Total deferred tax liabilities                            15,781        14,620
- --------------------------------------------------------------------------------
Net deferred tax asset                                   $25,526        24,982
================================================================================

The recording of deferred federal tax assets is based upon their expected
utilization in the Company's consolidated federal income tax return and the
benefit that would accrue to the Burlington Group under the Company's tax
allocation policy.

The following table accounts for the difference between the actual tax provision
and the amounts obtained by applying the statutory U.S. federal income tax rate
of 35% in 1997, 1996 and 1995 to the income before income taxes.

                                                        Years Ended December 31
                                                    1997        1996       1995
- --------------------------------------------------------------------------------
                                                                   
Income before income taxes:
United States                                    $34,164      37,794     34,943
Foreign                                           17,171      15,715     16,630
- --------------------------------------------------------------------------------
Total                                            $51,335      53,509     51,573
================================================================================
Tax provision computed at statutory rate         $17,967      18,730     18,051
Increases (reductions) in taxes due to:
State income taxes (net of federal tax
     benefit)                                        948         771        688
Goodwill amortization                              2,067       2,086      2,079
Difference between total taxes on foreign
     income and the U.S. federal statutory rate   (2,291)     (2,392)    (1,430)
Miscellaneous                                        296         513       (670)
- --------------------------------------------------------------------------------
Actual tax provision                             $18,987      19,708     18,718
================================================================================

It is the policy of the Burlington Group to accrue deferred income taxes on
temporary differences related to the financial statement carrying amounts and
tax bases of investments in foreign subsidiaries and affiliates which are
expected to reverse in the foreseeable future. As of December 31, 1997 and
December 31, 1996, the unrecognized deferred tax liability for temporary
differences of approximately $12,206 and $13,454, respectively, related to
investments in foreign subsidiaries and affiliates that are essentially
permanent in nature and not expected to reverse in the foreseeable future was
approximately $4,272 and $4,709, respectively.

The Burlington Group and its domestic subsidiares are included in the
Company's consolidated U.S. federal income tax return.

As of December 31, 1997, the Burlington Group had $8,505 of alternative minimum
tax credits allocated to it under the Company's tax allocation policy. Such
credits are available to offset future U.S. federal income taxes and, under
current tax law, the carryforward period for such credits is unlimited.

The tax benefits of net operating loss carryforwards of the Burlington Group as
of December 31, 1997 were $11,609 and related to various state and foreign
taxing jurisdictions. The expiration periods primarily range from 5 to 15 years.

                                      114

9. LONG-TERM DEBT

A portion of the outstanding debt under the Company's credit agreement and the
Company's subordinated obligations have been attributed to the Burlington Group.
Total long-term debt of the Burlington Group consists of the following:

                                                              As of December 31
                                                           1997            1996
- --------------------------------------------------------------------------------
                                                                  
Senior obligations:
     Netherlands guilder term loan due 1998 (1997
     year-end rate 4.29%)                               $10,700              --
     All other                                           14,767          13,195
- --------------------------------------------------------------------------------
                                                         25,467          13,195
- --------------------------------------------------------------------------------
Obligations under capital leases (average
     rates 15.51% in 1997 and 11.31% in 1996)               671           1,180
- --------------------------------------------------------------------------------
                                                         26,138          14,375
Attributed portion of the Company's debt:
     Revolving credit notes due 2001 (1997
     year-end rate 5.92%)                                10,878              --
     4% subordinated debentures due 1997                     --          14,348
- --------------------------------------------------------------------------------
Total long-term debt, less current maturities            37,016          28,723

Current maturities of long-term debt:
Senior obligations                                        3,176           2,916
- --------------------------------------------------------------------------------
Total current maturities of long-term debt                3,176           2,916
- --------------------------------------------------------------------------------
Total long-term debt including current maturities       $40,192          31,639
================================================================================

For the four years through December 31, 2002, minimum repayments of long-term
debt outstanding are as follows:

                                                
          1999                                 $ 2,556
          2000                                   1,844
          2001                                  24,482
          2002                                     518

In 1997, BAX Global entered into a borrowing agreement in connection with its
acquisition of Cleton. The loan, denominated in Netherlands guilders equivalent
to U.S. $10,700, matured in January 1998 and was extended to March 1998. This
debt is classified as long-term in accordance with the Company's intention and
ability to refinance the obligation on a long-term basis.

The Company has a $350,000 credit agreement with a syndicate of banks (the
"Facility"). The Facility includes a $100,000 term loan and permits additional
borrowings, repayments and reborrowings of up to an aggregate of $250,000. The
maturity date of both the term loan and the revolving credit portion of the
Facility is May 2001. Interest on borrowings under the Facility is payable at
rates based on prime, certificate of deposit, Eurodollar or money market rates.
A term loan of $100,000 was outstanding at December 31, 1997 and 1996.
Additional borrowings of $25,900 and $23,200 were outstanding at December 31,
1997 and 1996, respectively. The Company pays commitment fees (.125% per annum
at December 31, 1997) on the unused portion of the Facility. At December 31,
1997 and 1996, $10,878 and $0, respectively, of these additional borrowings were
attributed to the Burlington Group.

The 4% subordinated debentures became due July 1, 1997. The Company repaid the
debentures from borrowings under the Facility.

Under the terms of the Facility, the Company has agreed to maintain at least
$400,000 of Consolidated Net Worth, as defined, and can incur additional
indebtedness of approximately $610,000 at December 31, 1997.

Various international operations maintain lines of credit and overdraft
facilities aggregating approximately $99,100 with a number of banks on either a
secured or unsecured basis. At December 31, 1997, $30,799 was outstanding under
such agreements and was included in short-term borrowings. Average interest
rates on the lines of credit and overdraft facilities at December 31, 1997
approximated 6.3%. Commitment fees paid on the lines of credit and overdraft
facilities are not significant.

At December 31, 1997, the Company's portion of outstanding unsecured letters of
credit allocated to the Burlington Group was $40,006, primarily supporting the
Burlington Group's obligations under aircraft lease obligations and its various
self-insurance programs.

10. NET INCOME PER SHARE

The following is a reconciliation between the calculation of basic and diluted
net income per share:

                                                        Years Ended December 31
                                                       1997      1996      1995
- --------------------------------------------------------------------------------
                                                                   
Numerator:
Net income-Basic and diluted
  net income per share numerator                    $32,348    33,801    32,855

Denominator:
Basic weighted average common
  shares outstanding                                 19,448    19,223    18,966
Effect of dilutive securities:
  Employee stock options                                545       458       630
- --------------------------------------------------------------------------------
Diluted weighted average common shares
  outstanding                                        19,993    19,681    19,596
================================================================================

                                      115

Options to purchase 7 and 30 shares of common stock at $27.91 and at prices
between $20.19 and $21.13 per share, were outstanding in 1997 and 1996,
respectively, but were not included in the computation of diluted net income per
share because the options' exercise price was greater than the average market
price of the common shares and, therefore, the effect would be antidilutive. No
options were excluded from the computation of diluted net income per share in
1995.

11. STOCK OPTIONS

The Company has various stock-based compensation plans as described below.

Stock Option Plans

The Company grants options under its 1988 Stock Option Plan (the "1988 Plan") to
executives and key employees and under its Non-Employee Directors' Stock Option
Plan (the "Non-Employee Plan") to outside directors, to purchase common stock at
a price not less than 100% of quoted market value at the date of grant. The 1988
Plan options can be granted with a maximum term of ten years and can vest within
six months from the date of grant. The majority of grants made in 1997, 1996 and
1995 have a maximum term of six years and vest 100% at the end of the third
year. The Non-Employee Plan options can be granted with a maximum term of ten
years and can vest within six months from the date of grant. The majority of
grants made in 1997, 1996 and 1995 have a maximum term of six years and vest
ratably over the first three years. The total number of shares underlying
options authorized for grant, but not yet granted, under the 1988 Plan is 2,690.
Under the Non-Employee Plan, the total number of shares underlying options for
grant, but not yet granted, is 140.

The Company's 1979 Stock Option Plan (the "1979 Plan") and the 1985 Stock Option
Plan (the "1985 Plan") terminated in 1985 and 1988, respectively, except as to
options still outstanding.

As part of the Brink's Stock Proposal (described in the Company's Proxy
Statement dated December 31, 1995 resulting in the modification of the capital
structure of the Company to include an additional class of common stock), the
1988 and Non-Employee Plans were amended to permit option grants to be made to
optionees with respect to Brink's Stock or Burlington Stock, in addition to
Minerals Stock. At the time of the approval of the Brink's Stock Proposal, a
total of 2,383 shares of Services Stock were subject to options outstanding
under the 1988 Plan, the Non-Employee Plan, the 1979 Plan and the 1985 Plan.
Pursuant to antidilution provisions in the option agreements covering such
plans, the Company converted these options into options for shares of Brink's
Stock or Burlington Stock, or both, depending on the employment status and
responsibilities of the particular optionee. In the case of optionees having
Company-wide responsibilities, each outstanding Services Stock option was
converted into options for both Brink's Stock and Burlington Stock. In the case
of other optionees, each outstanding option was converted into a new option only
for Brink's Stock or Burlington Stock, as the case may be. As a result, upon
approval of the Brink's Stock Proposal, 1,750 shares of Brink's Stock and 1,989
shares of Burlington Stock were subject to options.

The table below summarizes the related plan activity.

                                                                      Aggregate
                                                                       Exercise
                                                         Shares           Price
- --------------------------------------------------------------------------------
                                                                  
Outstanding at December 31, 1995 ...............           --          $   --
Converted in Brink's Stock Proposal ............          1,989          23,474
Granted ........................................            440           7,972
Exercised ......................................           (318)         (2,905)
Forfeited or expired ...........................            (64)           (952)
- --------------------------------------------------------------------------------
Outstanding at December 31, 1996 ...............          2,047        $ 27,589
Granted ........................................            526          12,693
Exercised ......................................           (246)         (2,389)
Forfeited or expired ...........................            (71)         (1,223)
- --------------------------------------------------------------------------------
Outstanding at December 31, 1997 ...............          2,256        $ 36,670
================================================================================

Options exercisable at the end of 1997, 1996 and 1995, respectively, on an
equivalent basis, for Burlington Stock were 827, 1,034 and 1,030.

The following table summarizes information about stock options outstanding as of
December 31, 1997.

             ---------------------------------    ---------------------
                                 Stock Options            Stock Options
                                   Outstanding              Exercisable
- --------------------------------------------------------------------------------
                          Weighted
                           Average
                         Remaining    Weighted                Weighted
                       Contractual     Average                 Average
Range of                      Life    Exercise                Exercise
Exercise Prices  Shares     (Years)      Price    Shares         Price
- --------------------------------------------------------------------------------
                                                    
$ 5.00 to 11.70     475       1.57      $ 8.49       475        $ 8.49
 13.41 to 16.32     782       3.25       14.75       282         15.45
 17.06 to 21.13     498       4.04       18.00        70         17.29
 23.88 to 27.91     501       5.38       24.24        --            --
- --------------------------------------------------------------------------------
Total             2,256                              827
================================================================================

                                      116

Employee Stock Purchase Plan

Under the 1994 Employee Stock Purchase Plan (the "Plan"), the Company is
authorized to issue up to 375 shares of Burlington Stock to its employees who
have six months of service and who complete minimum annual work requirements.
Under the terms of the Plan, employees may elect each six-month period
(beginning January 1 and July 1), to have up to 10 percent of their annual
earnings withheld to purchase the Company's stock. Employees may purchase shares
of any or all of the three classes of Company common stocks. The purchase price
of the stock is 85% of the lower of its beginning-of-the-period or
end-of-the-period market price. Under the Plan, the Company sold 29, 32 and 29
shares of Burlington Stock to employees during 1997, 1996 and 1995,
respectively. The share amounts for Burlington Stock include the restatement for
the Services Stock conversion under the Brink's Stock Proposal.

Accounting For Plans

The Company has adopted the disclosure - only provisions of SFAS No. 123,
"Accounting for Stock-Based Compensation", but applies APB Opinion No. 25 and
related Interpretations in accounting for its plans. Accordingly, no
compensation cost has been recognized in the accompanying financial statements.
Had compensation costs for the Company's plans been determined based on the fair
value of awards at the grant dates, consistent with SFAS No. 123, the Burlington
Group's net income and net income per share would approximate the pro forma
amounts indicated below:

                                         1997          1996      1995
                                                         
- --------------------------------------------------------------------------
Net Income attributed to common shares
Burlington Group
     As Reported                        32,348        33,801    32,855
     Pro Forma                          30,170        32,528    32,098
Net Income per common share
Burlington Group

     Basic, As Reported                   1.66          1.76      1.73
     Basic, Pro Forma                     1.55          1.69      1.69
     Diluted, As Reported                 1.62          1.72      1.68
     Diluted, Pro Forma                   1.51          1.65      1.64
==========================================================================

Note: The pro forma disclosures shown may not be representative of the effects
on reported net income in future years.

The fair value of each stock option grant used to compute pro forma net income
and net income per share disclosures is estimated at the time of the grant using
the Black-Scholes option-pricing model. The weighted-average assumptions used in
the model are as follows:

                                                 1997           1996        1995
                                                                    
- --------------------------------------------------------------------------------
Expected dividend yield                           1.0%          1.2%         1.2%
Expected volatility                                29%           32%          32%
Risk-Free interest rate                           6.2%          6.3%         5.8%
Expected term (in years)                          4.8           4.7          4.7
================================================================================

Using these assumptions in the Black-Scholes model, the weighted-average fair
value of options granted during 1997, 1996 and 1995 is $4,182, $2,679 and
$2,549, respectively.

Under SFAS No. 123, compensation cost is also recognized for the fair value of
employee stock purchase rights. Because the Company settles its employee stock
purchase rights under the Plan at the end of each six-month offering period, the
fair value of these purchase rights was calculated using actual market
settlement data. The weighted-average fair value of the stock purchase rights
granted in 1997, 1996 and 1995 was $321, $231 and $352, respectively, for the
Burlington Group.

12. CAPITAL STOCK

The Company, at any time, has the right to exchange each outstanding share of
Burlington Stock for shares of Brink's Stock (or, if no Brink's Stock is then
outstanding, Minerals Stock) having a fair market value equal to 115% of the
fair market value of one share of Burlington Stock. In addition, upon the
disposition of all or substantially all of the properties and assets of the
Burlington Group to any person (with certain exceptions), the Company is
required to exchange each outstanding share of Burlington Stock for shares of
Brink's Stock (or, if no Brink's Stock is then outstanding, Minerals Stock)
having a fair market value equal to 115% of the fair market value of one share
of Burlington Stock.

The Company, at any time, has the right to exchange each outstanding share of
Minerals Stock for shares of Brink's Stock (or, if no Brink's Stock is then
outstanding, Burlington Stock) having a fair market value equal to 115% of the
fair market value of one share of Minerals Stock. In addition, upon the
disposition of all or substantially all of the properties and assets of the
Minerals Group to any person (with certain exceptions), the Company is required
to exchange each outstanding share of Minerals Stock for shares of Brink's Stock
(or, if no Brink's Stock is then outstanding, Burlington Stock) having a fair
market value

                                      117

equal to 115% of the fair market value of one share of Minerals Stock. If any
shares of the Company's Preferred Stock are converted after an exchange of
Minerals Stock for Brink's Stock (or Burlington Stock), the holder of such
Preferred Stock would, upon conversion, receive shares of Brink's Stock (or
Burlington Stock) in lieu of shares of Minerals Stock otherwise issuable upon
such conversion.

Shares of Brink's Stock are not subject to either optional or mandatory
exchange. The net proceeds of any disposition of properties and assets of the
Brink's Group will be attributed to the Brink's Group. In the case of a
disposition of all or substantially all the properties and assets of any other
group, the net proceeds will be attributed to the group the shares of which have
been issued in exchange for shares of the selling group.

Holders of Brink's Stock at all times have one vote per share. Holders of
Burlington Stock and Minerals Stock have .739 and .244 vote per share,
respectively, subject to adjustment on January 1, 2000, and on January 1 every
two years thereafter in such a manner so that each class' share of the aggregate
voting power at such time will be equal to that class' share of the aggregate
market capitalization of the Company's common stock at such time. Accordingly,
on each adjustment date, each share of Burlington Stock and Minerals Stock may
have more than, less than or continue to have the number of votes per share as
they have. Holders of Brink's Stock, Burlington Stock and Minerals Stock vote
together as a single voting group on all matters as to which all common
shareholders are entitled to vote. In addition, as prescribed by Virginia law,
certain amendments to the Articles of Incorporation affecting, among other
things, the designation, rights, preferences or limitations of one class of
common stock, or certain mergers or statutory share exchanges, must be approved
by the holders of such class of common stock, voting as a group, and, in certain
circumstances, may also have to be approved by the holders of the other classes
of common stock, voting as separate voting groups.

In the event of a dissolution, liquidation or winding up of the Company, the
holders of Brink's Stock, Burlington Stock and Minerals Stock, effective as of
January 1, 1998, share on a per share basis an aggregate amount equal to 55%,
28% and 17%, respectively, of the funds, if any, remaining for distribution to
the common shareholders. In the case of Minerals Stock, such percentage has been
set, using a nominal number of shares of Minerals Stock of 4,203 (the "Nominal
Shares") in excess of the actual number of shares of Minerals Stock outstanding.
These liquidation percentages are subject to adjustment in proportion to the
relative change in the total number of shares of Brink's Stock, Burlington Stock
and Minerals Stock, as the case may be, then outstanding to the total number of
shares of all other classes of common stock then outstanding (which totals, in
the case of Minerals Stock, shall include the Nominal Shares).

Dividends paid to holders of Burlington Stock are limited to funds of the
Company legally available for the payment of dividends. See the Company's
consolidated financial statements and related footnotes. Subject to these
limitations, the Company's Board, although there is no requirement to do so,
intends to declare and pay dividends on the Burlington Stock based primarily on
the earnings, financial condition, cash flow and business requirements of the
Burlington Group.

The Company has the authority to issue up to 2,000 shares of preferred stock,
par value $10 per share. In January, 1994, the Company issued $80,500 or 161,000
shares of Series C Cumulative Convertible Preferred Stock (the "Convertible
Preferred Stock"). The Convertible Preferred Stock, which is convertible into
Minerals Stock and which has been attributed to the Minerals Group, pays an
annual dividend of $31.25 per share payable quarterly, in cash, in arrears, out
of all funds of the Company legally available therefore, when as and if,
declared by the Board. Such stock also bears a liquidation preference of $500
per share, plus an amount equal to accrued and unpaid dividends thereon.

In November 1995, the Board of Directors (the "Board"), authorized a revised
share repurchase program which allowed for the purchase, from time to time, of
up to 1,500 shares of Burlington Stock, not to exceed an aggregate purchase
price of $45,000 for all common stock of the Company; such shares to be
purchased from time to time in the open market or in private transactions, as
conditions warrant.

In 1994, the Board authorized the repurchase from time to time of up to $15,000
of Convertible Preferred Stock. In November 1995 and February 1997, the Board
authorized an increase in the remaining authority to $15,000 and in May 1997,
the Board authorized an increase in the remaining repurchase authority to
$25,000.

                                      118

Under the share repurchase programs, the Company purchased shares in the periods
presented as follows:

                                                         Years Ended December 31
(In thousands)                                              1997            1996
- --------------------------------------------------------------------------------
                                                                        
Burlington Stock:
     Shares                                                   332             76
     Cost                                                  $7,405          1,407

Convertible Preferred Stock:
     Shares                                                     2             21
     Cost                                                  $  617          7,897

     Excess carrying amount (a)                            $  108          2,120
================================================================================

(a) The excess of the carrying amount of the Convertible Preferred Stock over
the cash paid to holders for repurchases made during the years which is deducted
from preferred dividends in the Company's Statement of Operations.

As of December 31, 1997 the Company had remaining authority to purchase over
time 1,092 shares of Pittston Burlington Group Common Stock and an additional
$24,383 of its Convertible Preferred Stock. The aggregate purchase price
limitation for all common stock was $24,903 at December 31, 1997. The authority
to acquire shares remains in effect in 1998.

In 1997, 1996 and 1995, dividends paid on the Convertible Preferred Stock
amounted to $3,589, $3,795 and $4,341, respectively. During 1996 and 1997, the
Board declared and the Company paid dividends of 24 cents on Burlington stock.

In December 1992, the Company formed the Pittston Company Employee Benefits
Trust (the "Trust") to hold shares of its common stock to fund obligations under
certain employee benefits programs not including stock option plans. The trust
first began funding obligations under the Company's various stock option plans
in September 1995. Upon formation of the Trust, the Company sold for a
promissory note of the Trust, 4,000 shares of its common stock to the Trust at a
price equal to the fair value of the stock on the date of sale. At December 31,
1997, 868 shares of Burlington Stock (1,280 in 1996) remained in the Trust,
valued at market. The value of these shares has no impact on shareholder's
equity.

13. LEASES

The Burlington Group leases aircraft, facilities, vehicles, computers and other
equipment under long-term operating leases with varying terms, and most of the
leases contain renewal and/or purchase options. As of December 31, 1997,
aggregate future minimum lease payments under noncancellable operating leases
were as follows:

                                        Equipment
           Aircraft     Facilities        & Other           Total
- --------------------------------------------------------------------------------
                                                 
1998        $22,479         23,337          4,870         50,686
1999         20,157         19,580          3,699         43,436
2000         13,488         15,062          2,809         31,359
2001         10,402         11,961          1,598         23,961
2002          5,184         10,374            803         16,361
2003          1,152          8,976            417         10,545
2004             --          7,496            417          7,913
2005             --          6,429            417          6,846
2006             --          5,689            417          6,106
Later Years      --         56,983          2,882         59,865
- --------------------------------------------------------------------------------
Total       $72,862        165,887         18,329        257,078
================================================================================

These amounts are net of aggregate future minimum noncancellable sublease
rentals of $1,410.

Net rent expense amounted to $61,650 in 1997, $61,827 in 1996, and $62,751 in
1995.

The Burlington Group incurred capital lease obligations of $352 in 1997, $231 in
1996, and $2,288 in 1995. As of December 31, 1997, the Burlington Group's
obligations under capital leases were not significant (Note 9).

The Burlington Group is in the process of renewing certain aircraft leasing
agreements with terms of 4 to 5 years. Aggregate future minimum lease payments
under these agreements will approximate $42,000.

14. EMPLOYEE BENEFIT PLANS

The Burlington Group's businesses participate in the Company's noncontributory
defined benefit pension plan covering substantially all nonunion employees who
meet certain minimum requirements, in addition to sponsoring certain other
defined benefit plans. Benefits under most of the plans are based on salary
(including commissions, bonuses, overtime and premium pay) and years of service.
The Burlington Group's pension cost is actuarially determined based on its
employees and an allocable share of the pension plan assets. The Company's

                                      119

policy is to fund the actuarially determined amounts necessary to provide assets
sufficient to meet the benefits to be paid to plan participants in accordance
with applicable regulations. The net pension expense for 1997, 1996 and 1995 for
all plans is as follows:

                                                         Years Ended December 31
                                                    1997        1996        1995
- --------------------------------------------------------------------------------
                                                                    
Service cost--benefits earned during year       $  4,110       4,067       2,856
Interest cost on projected benefit obligation      4,653       4,010       3,162
Return on assets--actual                         (12,710)     (8,053)    (11,344)
Return on assets deferred                          6,257       2,177       6,223
Other amortization, net                             (372)       (339)       (305)
- --------------------------------------------------------------------------------
Net pension expense                             $  1,938       1,862         592
================================================================================

The assumptions used in determining the net pension expense for the Company's
primary pension plan were as follows:

                                                 1997      1996      1995
- ------------------------------------------------------------------------------
                                                              
Interest cost on projected benefit obligation     8.0%      7.5%     8.75%
Expected long-term rate of return on assets      10.0%     10.0%     10.0%
Rate of increase in compensation levels           4.0%      4.0%      4.0%
==============================================================================

The funded status and prepaid pension expense at December 31, 1997 and 1996 are
as follows:

                                                                 1997        1996
- ---------------------------------------------------------------------------------
                                                                    
Actuarial present value of accumulated benefit obligation:
     Vested                                                  $ 54,967      43,018
     Nonvested                                                  3,674       2,846
- ---------------------------------------------------------------------------------
                                                               58,641      45,864
Benefits attributable to projected salaries                    14,918      12,454
- ---------------------------------------------------------------------------------
Projected benefit obligation                                   73,559      58,318
Plan assets at fair value                                      79,111      68,016
- ---------------------------------------------------------------------------------
Excess of plan assets over projected
     benefit obligation                                         5,552       9,698
Unamortized initial net asset                                     (22)       (401)
Unrecognized experience loss (gain)                             1,495        (321)
Unrecognized prior service cost                                   172         146
- ---------------------------------------------------------------------------------
Net pension assets                                              7,197       9,122
Current pension liabilities                                       403         382
- ---------------------------------------------------------------------------------
Deferred pension assets per balance sheet                    $  7,600       9,504
=================================================================================

For the valuation of the Company's primary pension obligations and the
calculation of the funded status, the discount rate was 7.5% in 1997 and 8% in
1996. The expected long-term rate of return on assets was 10% in both years. The
rate of increase in compensation levels used was 4% in 1997 and 1996.

The unrecognized initial net asset at January 1, 1986 (January 1, 1989, for
certain foreign pension plans), the date of adoption of SFAS 87, has been
amortized over the estimated remaining average service life of the employees. As
of December 31, 1997, approximately 77% of plan assets were invested in equity
securities and 23% in fixed income securities.

The Burlington Group also provides certain postretirement health care and life
insurance benefits for eligible active and retired employees in the United
States and Canada.

For the years 1997, 1996 and 1995, the components of periodic expense for these
postretirement benefits were as follows:

                                                           Years Ended December 31
                                                                1997   1996   1995
- -----------------------------------------------------------------------------------
                                                                      
Service cost--benefits earned during year                       $166    167    129
Interest cost on accumulated postretirement
     benefit obligation                                          226    213    192
- ----------------------------------------------------------------------------------
Total expense                                                   $392    380    321
==================================================================================

At December 31, 1997 and 1996, the actuarially determined and recorded
liabilities for these postretirement benefits, none of which have been funded,
were as follows:

                                                         Years Ended December 31
                                                                1997        1996
                                                                       
- --------------------------------------------------------------------------------
Accumulated postretirement benefit obligation:
Retirees                                                      $  465         546
Fully eligible active plan participants                          799         517
Other active plan participants                                 2,127       2,007
- --------------------------------------------------------------------------------
                                                               3,391       3,070
Unrecognized experience gain                                     178          75
- --------------------------------------------------------------------------------
Liability included on the balance sheet                        3,569       3,145
Less current portion                                              51        --
- --------------------------------------------------------------------------------
Noncurrent liability for postretirement health
     care and life insurance benefits                         $3,518       3,145
================================================================================

The accumulated postretirement benefit obligation was determined using the unit
credit method and an assumed discount rate of 7.5% in 1997 and 8% in 1996. The
postretirement benefit obligation for U.S. salaried employees does not provide
for changes in health care costs since the employer's contribution to the plan
is a fixed amount.

                                      120

The Burlington Group also participates in the Company's Savings-Investment Plan
to assist eligible employees in providing for retirement or other future
financial needs. Employee contributions are matched at rates of 75% up to 5% of
compensation (subject to certain limitations imposed by the Internal Revenue
Code of 1986, as amended). Contribution expense under the plan aggregated $2,239
in 1997, $2,259 in 1996 and $2,326 in 1995.

The Burlington Group sponsors several other defined contribution benefit plans
based on hours worked or other measurable factors. Contributions under all of
these plans aggregated $206 in 1997, $643 in 1996 and $662 in 1995.

15. OTHER OPERATING INCOME

Other operating income primarily includes foreign exchange transaction gains and
losses.

16. SEGMENT INFORMATION

Operating revenues by geographic area are as follows:

                                                         Years Ended December 31
                                            1997            1996            1995
- --------------------------------------------------------------------------------
                                                                    
United States                         $  628,418         554,553         535,091
International operations               1,033,920         930,316         868,104
- --------------------------------------------------------------------------------
Total operating revenues              $1,662,338       1,484,869       1,403,195
================================================================================

The following is derived from the business segment information in the Company's
consolidated financial statements as it relates to the Burlington Group. See
Note 2, for a description of the Company's policy for corporate allocations.

The Burlington Group's portion of the Company's operating profit is as follows:

                                                         Years Ended December 31
                                                   1997        1996        1995
- --------------------------------------------------------------------------------
                                                                   
United States(a)                               $ 32,108      36,143      30,416
International operations(a)                      31,156      28,461      28,307
- --------------------------------------------------------------------------------
Burlington Group's portion of the
     Company's segment operating profit          63,264      64,604      58,723
Corporate expenses allocated to the
     Burlington Group                            (6,859)     (7,433)     (4,770)
- --------------------------------------------------------------------------------
Total operating profit                         $ 56,405      57,171      53,953
================================================================================

(a) The 1997 amounts include the allocation of $12,500 of consulting expenses
related to the redesign of BAX Global's business processes and information
systems architecture. The $12,500 was allocated $4,750 to the U.S. operations
and $7,750 to International operations.

The Burlington Group's portion of the Company's assets at year end is as
follows:

                                                               As of December 31
                                                 1997         1996         1995
                                                                    
- --------------------------------------------------------------------------------
United States                                 $399,761      344,048      302,593
International operations                       290,383      273,736      237,126
- --------------------------------------------------------------------------------
Burlington Group's portion of the
     Company's assets                          690,144      617,784      539,719
Burlington Group's portion of
     corporate assets                           11,299       17,614       32,358
- --------------------------------------------------------------------------------
Total assets                                  $701,443      635,398      572,077
================================================================================

17. CONTINGENT LIABILITIES

Under the Coal Industry Retiree Health Benefit Act of 1992 (the "Act"), the
Company and its majority-owned subsidiaries at July 20, 1992, including certain
companies of the Burlington Group included in these financial statements, are
jointly and severally liable with certain companies of the Brink's Group and of
the Minerals Group for the costs of health care coverage provided for by that
Act. For a description of the Act and an estimate of certain of such costs, see
Note 14 to the Company's consolidated financial statements. At this time, the
Company expects the Minerals Group to generate sufficient cash flow to discharge
its obligations under the Act.

In April 1990, the Company entered into a settlement agreement to resolve
certain environmental claims against the Company arising from hydrocarbon
contamination at a petroleum terminal facility ("Tankport") in Jersey City, New
Jersey, which operations were sold in 1983. Under the settlement agreement, the
Company is obligated to pay 80% of the remediation costs. Based on data
available to the Company and its environmental consultants, the Company
estimates its portion of the cleanup costs on an undiscounted basis using
existing technologies to be between $6,600 and $11,900 over a period of up to
five years. Management is unable to determine that any amount within that range
is a better estimate due to a variety of uncertainties, which include the extent
of the contamination at the site, the permitted technologies for remediation and
the regulatory standards by which the clean-up will be conducted. The clean-up
estimates have been modified from prior years' in light of cost inflation and
certain assumptions the Company is making with respect to the end use of the
property. The estimate of costs and the timing of payments could change as a
result of changes to the remediation plan required, changes in the technology
available to treat the site, unforseen circumstances existing at the site and
additional cost inflation.

                                      121

The Company commenced insurance coverage litigation in 1990, in the United
States District Court for the District of New Jersey, seeking a declaratory
judgment that all amounts payable by the Company pursuant to the Tankport
obligation were reimbursable under comprehensive general liability and pollution
liability policies maintained by the Company. In August 1995, the District court
ruled on various Motions for Summary Judgment. In its decision, the Court found
favorably for the Company on several matters relating to the comprehensive
general liability policies but concluded that the pollution liability policies
did not contain pollution coverage for the types of claims associated with the
Tankport site. On appeal, the Third Circuit reversed the District Court and held
that the insurers could not deny coverage for the reasons stated by the District
Court, and the case was remanded to the District Court for trial. In the event
the parties are unable to settle the dispute, the case is scheduled to be tried
beginning September, 1998. Management and its outside legal counsel continue to
believe that recovery of a substantial portion of the cleanup costs will
ultimately be probable of realization. Accordingly, based on estimates of
potential liability, probable realization of insurance recoveries, related
developments of New Jersey law, and the Third Circuit's decision, it is the
Company's belief that the ultimate amount that it would be liable for is
immaterial.

18. SUPPLEMENTAL CASH FLOW INFORMATION

For the years ended December 31, 1997, 1996 and 1995, cash payments for income
taxes, net of refunds received, were $17,092, $22,018, and $20,346,
respectively.

For the years ended December 31, 1997, 1996 and 1995, cash payments for interest
were $5,347, $4,646 and $5,055, respectively.

In connection with the June 1997 acquisition of Cleton & Co. ("Cleton"),
the Burlington Group assumed the equivalent of U.S. $10,000 of Cleton
debt, of which the equivalent of approximately U.S. $6,000 was
outstanding at December 31, 1997.

19. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

Tabulated below are certain data for each quarter of 1997 and 1996. The 1996 and
the first three quarters of 1997 net income per share amounts have been restated
to comply with SFAS No. 128, "Earnings Per Share" (Note 1). Third quarter 1997
amounts have been reclassified to include $3,948 of revenues and transportation
expenses from Cleton, which was acquired in June 1997.

                                                       1st        2nd         3rd        4th
- --------------------------------------------------------------------------------------------
                                                                             
1997 Quarters:

Operating revenues                                $371,409    399,567     443,376    447,986
Gross profit                                        40,498     43,874      64,283     58,347
Net income (loss)                                     5,08     (1,913)     15,993     13,180

Net income (loss) per Pittston Burlington Group
 common share:
 Basic                                            $    .26       (.10)        .82        .68
 Diluted                                               .26       (.10)        .80        .66
- --------------------------------------------------------------------------------------------
1996 Quarters:

Operating revenues                                $348,095    360,064     373,177    403,533
Gross profit                                        37,595     46,256      50,414     48,630
Net income                                           3,763      8,746      10,705     10,587

Net income per Pittston Burlington Group
 common share:
 Basic                                            $    .20        .46         .56        .55
 Diluted                                               .19        .44         .54        .53
============================================================================================

                                      122

Pittston Minerals Group
STATEMENT OF MANAGEMENT RESPONSIBILITY

The management of The Pittston Company (the "Company") is responsible for
preparing the accompanying Pittston Minerals Group (the "Mineral's Group")
financial statements and for their integrity and objectivity. The statements
were prepared in accordance with generally accepted accounting principles.
Management has also prepared the other information in the annual report and is
responsible for its accuracy.

In meeting our responsibility for the integrity of the financial statements, we
maintain a system of internal controls designed to provide reasonable assurance
that assets are safeguarded, that transactions are executed in accordance with
management's authorization and that the accounting records provide a reliable
basis for the preparation of the financial statements. Qualified personnel
throughout the organization maintain and monitor these internal controls on an
ongoing basis. In addition, the Company maintains an internal audit department
that systematically reviews and reports on the adequacy and effectiveness of the
controls, with management follow-up as appropriate.

Management has also established a formal Business Code of Ethics which is
distributed throughout the Company. We acknowledge our responsibility to
establish and preserve an environment in which all employees properly understand
the fundamental importance of high ethical standards in the conduct of our
business.

The accompanying financial statements have been audited by KPMG Peat Marwick
LLP, independent auditors. During the audit they review and make appropriate
tests of accounting records and internal controls to the extent they consider
necessary to express an opinion on the Minerals Group's financial statements.

The Company's Board of Directors pursues its oversight role with respect to the
Minerals Group's financial statements through the Audit and Ethics Committee,
which is composed solely of outside directors. The Committee meets periodically
with the independent auditors, internal auditors and management to review the
Company's control system and to ensure compliance with applicable laws and the
Company's Business Code of Ethics.

We believe that the policies and procedures described above are appropriate and
effective and do enable us to meet our responsibility for the integrity of the
Minerals Group's financial statements.

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Shareholders
The Pittston Company

We have audited the accompanying balance sheets of Pittston Minerals Group (as
described in Note 1) as of December 31, 1997 and 1996, and the related
statements of operations and cash flows for each of the years in the three-year
period ended December 31, 1997. These financial statements are the
responsibility of The Pittston Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements of Pittston Minerals Group present
fairly, in all material respects, the financial position of Pittston Minerals
Group as of December 31, 1997 and 1996, and the results of its operations and
its cash flows for each of the years in the three-year period ended December 31,
1997, in conformity with generally accepted accounting principles.

As more fully discussed in Note 1, the financial statements of Pittston Minerals
Group should be read in connection with the audited consolidated financial
statements of The Pittston Company and subsidiaries.

As more fully discussed in Note 1 to the financial statements, Pittston
Minerals Group changed its method of accounting for impairment of long-lived
assets in 1996.

KPMG Peat Marwick LLP
Stamford, Connecticut

January 28, 1998

                                      123

Pittston Minerals Group

BALANCE SHEETS

                                                                            December 31
(In thousands)                                                            1997      1996
==========================================================================================
                                                                                
ASSETS
Current assets:
Cash and cash equivalents                                               $  3,394     3,387
Accounts receivable:
 Trade (Note 5)                                                           53,430    74,366
 Other                                                                    12,384    15,804
- ------------------------------------------------------------------------------------------
                                                                          65,814    90,170
 Less estimated amount uncollectible                                       2,215     1,618
                                                                          63,599    88,552
Coal inventory                                                            31,644    26,495
Other inventory                                                            3,702     5,308
- ------------------------------------------------------------------------------------------
                                                                          35,346    31,803
Prepaid expenses                                                           5,045     8,659
Deferred income taxes (Note 8)                                            25,136    27,229
- ------------------------------------------------------------------------------------------
Total current assets                                                     132,520   159,630
Property, plant and equipment, at cost (Notes 1 and 4)                   336,724   324,924
 Less accumulated depreciation, depletion and amortization               164,386   154,115
- ------------------------------------------------------------------------------------------
                                                                         172,338   170,809
Deferred pension assets (Note 15)                                         83,825    81,067
Deferred income taxes (Note 8)                                            54,778    62,899
Intangibles, net of accumulated amortization (Notes 1 and 6)             108,094   111,103
Coal supply contracts                                                     41,703    52,696
Receivable--Pittston Brink's Group/Burlington Group (Note 2)              13,630    22,071
Other assets                                                              47,294    46,706
- ------------------------------------------------------------------------------------------
Total assets                                                            $654,182   706,981
==========================================================================================

LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities:
Current maturities of long-term debt (Note 9)                           $    547       395
Accounts payable                                                          50,585    59,103
Payable--Pittston Brink's Group/Burlington Group, net (Note 2)             3,038    10,757
Accrued liabilities:
 Taxes                                                                    16,477    17,380
 Workers' compensation and other claims                                   13,829    14,276
 Postretirement benefits other than pensions (Note 15)                    19,265    17,693
 Reclamation                                                              15,588    17,205
 Payroll and vacation                                                      5,261     6,960
 Miscellaneous (Note 15)                                                  36,674    40,956
- ------------------------------------------------------------------------------------------
                                                                         107,094   114,470
- ------------------------------------------------------------------------------------------
Total current liabilities                                                161,264   184,725

Long-term debt, less current maturities (Note 9)                         116,114   124,572
Postretirement benefits other than pensions (Note 15)                    223,836   219,717
Workers' compensation and other claims                                    92,857   105,837
Reclamation                                                               47,546    36,716
Other liabilities                                                         31,137    47,074
Commitments and contingent liabilities (Notes 9, 13, 14, 15, 19 and 20)
Shareholder's equity (Notes 3, 11 and 12)                                (18,572)  (11,660)
- -------------------------------------------------------------------------------------------
Total liabilities and shareholder's equity                              $654,182   706,981
==========================================================================================

See accompanying notes to financial statements.

                                      124

Pittston Minerals Group

STATEMENT OF OPERATIONS

                                                        Years Ended December 31
(In thousands, except per share amounts)                 1997   1996      1995
================================================================================
                                                               
Net sales                                           $630,626   696,513   722,851
- --------------------------------------------------------------------------------
Costs and expenses:
Cost of sales                                        609,025   707,497   696,295
Selling, general and administrative expenses          30,228    34,631    33,252
Restructuring and other credits, including
 litigation accrual (Notes 16 and 19)                 (3,104)  (47,299)
- --------------------------------------------------------------------------------
Total costs and expenses                             636,149   694,829   729,547
- --------------------------------------------------------------------------------
Other operating income, net (Note 17)                  9,682    13,414    22,768
- --------------------------------------------------------------------------------
Operating profit                                       4,159    15,098    16,072
Interest income (Note 2)                               1,330       835       564
Interest expense (Note 2)                            (10,946)  (10,723)  (10,534)
Other expense, net                                      (898)   (1,789)   (1,098)
- --------------------------------------------------------------------------------
(Loss) income before income taxes                     (6,355)    3,421     5,004
Credit for income taxes (Note 8)                     (10,583)   (7,237)   (9,020)
- --------------------------------------------------------------------------------
Net income                                             4,228    10,658    14,024
Preferred stock dividends, net (Note 12)              (3,481)   (1,675)   (2,762)
- --------------------------------------------------------------------------------
Net income attributed to common shares              $    747     8,983    11,262
================================================================================
Net income per common share (Note 10):
 Basic                                              $    .09      1.14      1.45
 Diluted                                                 .09      1.08      1.40
================================================================================
Average common shares outstanding (Note 10):
 Basic                                                 8,076     7,897     7,786
 Diluted                                               8,102     9,884    10,001
================================================================================

See accompanying notes to financial statements.

                                      125

Pittston Minerals Group

STATEMENTS OF CASH FLOWS

                                                                 Years Ended December 31
(In thousands)                                                   1997      1996      1995
==========================================================================================
                                                                              
Cash flows from operating activities:

Net income                                                    $  4,228    10,658    14,024
Adjustments to reconcile net income to net cash provided by
 operating activities:

 Noncash charges and other write-offs                              --     29,948        --
 Depreciation, depletion and amortization                       37,515    36,624    42,040
 Provision for deferred income taxes                            11,050    22,088    16,412
 Credit for pensions, noncurrent                                (2,761)   (1,676)   (3,514)
 Provision for uncollectible accounts receivable                   109       262       161
 Equity in losses (earnings) of unconsolidated affiliates,
  net of dividends received                                        671      (302)      148
Gain on sale of property, plant and equipment                   (1,789)   (1,398)   (4,994)
 Other operating, net                                            1,823       885       984
 Change in operating assets and liabilities,
  net of effects of acquisitions and dispositions:
  Decrease (increase) in accounts receivable                    28,574    (4,454)   22,670
  (Increase) decrease in inventories                            (3,458)   10,116   (11,565)
  (Increase) decrease in prepaid expenses                       (1,395)   (1,818)    3,828
  Decrease in accounts payable and accrued liabilities            (313)  (17,907)  (16,524)
  Decrease (increase) in other assets                              793    (2,893)    2,474
  Decrease in workers' compensation and other claims,
   noncurrent                                                  (13,574)   (8,766)  (16,575)
  Decrease in other liabilities                                (11,703)  (51,749)  (23,437)
  Other, net                                                      (209)      181       135
- ------------------------------------------------------------------------------------------
Net cash provided by operating activities                       49,561    19,799    26,267
- ------------------------------------------------------------------------------------------
Cash flows from investing activities:
Additions to property, plant and equipment                     (26,434)  (23,575)  (22,283)
Proceeds from disposal of property, plant and equipment          2,982     4,613    18,939
Acquisitions, net of cash acquired, and related
 contingency payments                                           (1,014)   (1,134)   (1,078)
Other, net                                                      (2,723)     (419)   (1,188)
- ------------------------------------------------------------------------------------------
Net cash used by investing activities                          (27,189)  (20,515)   (5,610)
- ------------------------------------------------------------------------------------------
Cash flows from financing activities:
Additions to debt                                               59,076    23,216        24
Reductions of debt                                             (67,825)   (1,319)  (17,164)
Payments from Brink's Group                                      2,977     6,082    12,240
Payments (to) from Burlington Group                             (7,696)  (12,179)      878
Repurchase of stock                                               (617)   (7,895)   (7,173)
Proceeds from exercise of stock options and from employee
 stock purchase plan                                                22       208     1,379
Dividends paid                                                  (8,302)   (9,009)   (9,550)
- ------------------------------------------------------------------------------------------
Net cash used by financing activities                          (22,365)     (896)  (19,366)
- ------------------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents                 7    (1,612)    1,291
Cash and cash equivalents at beginning of year                   3,387     4,999     3,708
- ------------------------------------------------------------------------------------------
Cash and cash equivalents at end of year                      $  3,394     3,387     4,999
==========================================================================================

See accompanying notes to financial statements.

                                      126

Pittston Minerals Group

NOTES TO FINANCIAL STATEMENTS
(In thousands, except per share amounts)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

As used herein, the "Company" includes The Pittston Company and its direct and
indirect subsidiaries, except as otherwise indicated by the context. The Company
is comprised of three separate groups - Pittston Brink's Group, Pittston
Burlington Group, and Pittston Minerals Group. The financial statements of the
Minerals Group include the balance sheets, the results of operations and cash
flows of the Pittston Coal Company ("Coal Operations") and Pittston Mineral
Ventures ("Mineral Ventures") operations of the Company, and a portion of the
Company's corporate assets and liabilities and related transactions which are
not separately identified with operations of a specific segment. The Minerals
Group's financial statements are prepared using the amounts included in the
Company's consolidated financial statements. Corporate allocations reflected in
these financial statements are determined based upon methods which management
believes to be a reasonable and equitable allocation of such items (Note 2).

The Company provides to holders of Pittston Minerals Group Common Stock
("Minerals Stock") separate financial statements, financial review, descriptions
of business and other relevant information for the Minerals Group in addition to
consolidated financial information of the Company. Notwithstanding the
attribution of assets and liabilities (including contingent liabilities) among
the Minerals Group, the Brink's Group and the Burlington Group for the purpose
of preparing their respective financial statements, this attribution and the
change in the capital structure of the Company as a result of the approval of
the Brink's Stock Proposal did not affect legal title to such assets or
responsibility for such liabilities for the Company or any of its subsidiaries.
Holders of Minerals Stock are shareholders of the Company, which continues to be
responsible for all its liabilities. Financial impacts arising from one group
that affect the Company's financial condition could affect the results of
operations and financial condition of each of the groups. Since financial
developments within one group could affect other groups, all shareholders of the
Company could be adversely affected by an event directly impacting only one
group. Accordingly, the Company's consolidated financial statements must be read
in connection with the Minerals Group's financial statements.

Principles of Combination

The accompanying financial statements reflect the combined accounts of the
businesses comprising the Minerals Group. The Minerals Group's interests in 20%
to 50% owned companies are carried on the equity method unless control exists,
in which case, consolidation occurs. All material intercompany items and
transactions have been eliminated in combination. Certain prior year amounts
have been reclassified to conform to the current year's financial statement
presentation.

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, demand deposits and investments
with original maturities of three months or less.

Inventories

Inventories are stated at cost (determined under the average cost method) or
market, whichever is lower.

Property, Plant and Equipment

Expenditures for maintenance and repairs are charged to expense, and the costs
of renewals and betterments are capitalized. Depreciation is provided
principally on the straight-line method at varying rates depending upon
estimated useful lives. Depletion of bituminous coal lands is provided on the
basis of tonnage mined in relation to the estimated total of recoverable tonnage
in the ground.

Mine development costs, primarily included in bituminous coal lands, are
capitalized and amortized over the estimated useful life of the mine. These
costs include expenses incurred for site preparation and development as well as
operating deficits incurred at the mines during a development stage. A mine is
considered under development until all planned production units have been placed
in operation. Valuation of coal properties is based primarily on mining plans
and conditions assumed at the time of the evaluation. These valuations could be
impacted by actual economic conditions which differ from those assumed at the
time of the evaluation.

Intangibles

The excess of cost over fair value of net assets of businesses acquired is
amortized on a straight-line basis over the estimated periods benefited.

                                      127

The Minerals Group evaluates the carrying value of intangibles and the periods
of amortization to determine whether events and circumstances warrant revised
estimates of assets value or useful lives. The Minerals Group annually assesses
the recoverability of the excess of cost over net assets acquired by determining
whether the amortization of the asset balance over its remaining life can be
recovered through projected undiscounted future operating cash flows. Evaluation
of asset value as well as periods of amortization are performed on a
disaggregated basis.

Goodwill allocated to a potentially impaired asset will be identified with that
asset in performing an impairment test in accordance with Statement of Financial
Accounting Standards ("SFAS") No. 121. If such tests indicate that an impairment
exists, the carrying amount of the identified goodwill would be eliminated
before making any reduction of the carrying amounts of impaired long-lived
assets.

Coal Supply Contracts

Coal supply contracts consist of contracts to supply coal to customers at
certain negotiated prices over a period of time, which have been acquired from
other coal companies, and are stated at cost at the time of acquisition, which
approximates fair market value. The capitalized cost of such contracts is
amortized over the term of the contract on the basis of tons of coal sold under
the contract.

Accounting for Stock Based Compensation

The Minerals Group has implemented the disclosure-only provisions of SFAS
No. 123 "Accounting for Stock Based Compensation" (Note 11). The Minerals
Group continues to measure compensation expense for its stock-based
compensation plans using the intrinsic value based method of accounting
prescribed by Accounting Principles Board Opinion ("APB") No. 25,
"Accounting for Stock Issued to Employees."

Foreign Currency Translation

Assets and liabilities of foreign subsidiaries have been translated at current
exchange rates, and related revenues and expenses have been translated at
average rates of exchange in effect during the year. Resulting cumulative
translation adjustments have been included in shareholder's equity.

Postretirement Benefits Other Than Pensions

Postretirement benefits other than pensions are accounted for in accordance with
SFAS No. 106, "Employers' Accounting for Postretirement Benefits Other Than
Pensions", which requires employers to accrue the cost of such retirement
benefits during the employees' service with the Company.

Income Taxes

Income taxes are accounted for in accordance with SFAS No. 109, "Accounting for
Income Taxes", which requires recognition of deferred tax liabilities and assets
for the expected future tax consequences of events that have been included in
the financial statements or tax returns. Under this method, deferred tax
liabilities and assets are determined based on the difference between the
financial statement and tax bases of assets and liabilities using enacted tax
rates in effect for the year in which these items are expected to reverse.

See Note 2 for allocation of the Company's U.S. federal income taxes to the
Minerals Group.

Pneumoconiosis (Black Lung) Expense

The Minerals Group acts as self-insurer with respect to almost all black lung
benefits. Provision is made for estimated benefits based on annual actuarial
reports prepared by outside actuaries. The excess of the present value of
expected future benefits over the accumulated book reserves is recognized over
the amortization period as a level percentage of payroll. Cumulative actuarial
gains or losses are calculated periodically and amortized on a straight-line
basis. Assumptions used in the calculation of the actuarial present value of
black lung benefits are based on actual retirement experience of the Company's
coal employees, black lung claims incidence for active miners, actual dependent
information, industry turnover rates, actual medical and legal cost experience
and projected inflation rates. As of December 31, 1997 and 1996, the actuarially
determined value of estimated future black lung benefits discounted at 6% was
approximately $55,000 and $57,000, respectively, and is included in workers'
compensation and other claims. Based on actuarial data, the amount credited to
operations was $2,451 in 1997, $2,216 in 1996, and $1,402 in 1995 . In addition,
the Company accrued additional expenses for black lung benefits related to
federal and state assessments, legal and administrative expenses and other self
insurance costs. These costs amounted to $1,936 in 1997, $1,849 in 1996, and
$2,569 in 1995.

Reclamation Costs

Expenditures relating to environmental regulatory requirements and reclamation
costs undertaken during mine operations are charged against earnings as
incurred. Estimated site restoration and post closure reclamation costs are
charged against earnings using the units of production method over the expected
economic life of each mine. Accrued reclamation costs are subject to review by
management on a regular basis and are revised when appropriate for changes in
future estimated costs and/or regulatory requirements.

                                      128

Financial Instruments

The Minerals Group uses foreign currency forward contracts to hedge the risk of
changes in foreign currency rates associated with certain transactions
denominated in Australian dollars. The Company also utilizes other financial
instruments to protect against adverse price movements in gold, which it
produces, and diesel fuel which it consumes as well as interest rate changes in
certain variable rate obligations.

Gains and losses on these contracts, designated as effective hedges, are
deferred and recognized as part of the specific transaction hedged. Since they
are accounted for as hedges, the fair value of these contracts is not recognized
in the Mineral Group's Financial Statements. Gains or losses resulting from the
early termination of such contracts are deferred and amortized as an adjustment
to the currency transaction hedged, the realization on gold sales, the yield of
variable rate obligations, or the cost of diesel fuel over the remaining period
originally covered by the terminated contracts. In addition, if the underlying
items being hedged were retired prior to maturity, the unamortized gain or loss
resulting from the early termination of the related interest rate swap would be
included in the gain or loss on the extinguishment of the obligation.

Revenue Recognition

Coal sales are generally recognized when coal is loaded onto transportation
vehicles for shipment to customers. For domestic sales, this generally occurs
when coal is loaded onto railcars at mine locations. For export sales, this
generally occurs when coal is loaded onto marine vessels at terminal facilities.

Gold sales are recognized when products are shipped to a refinery. Settlement
adjustments arising from final determination of weights and assays are reflected
in sales when received.

Net Income Per Share

Basic net income per share for the Minerals Group is computed by dividing net
income attributed to common shares (net income less preferred stock dividends)
by the basic weighted-average common shares outstanding. Diluted net income per
share for the Minerals Group is computed by dividing net income by the diluted
weighted-average common shares outstanding. Diluted weighted-average common
shares outstanding includes additional shares assuming the exercise of stock
options and the conversion of the Company's $31.25 Series C Cumulative
Convertible Preferred Stock (the "Convertible Preferred Stock"). However, when
the exercise of stock options or the conversion of Convertible Preferred Stock
is antidilutive, they are excluded from the calculation. The shares of Minerals
Stock held in The Pittston Company Employee Benefits Trust ("the Trust" - see
Note 12) are subject to the treasury stock method and effectively are not
included in the basic and diluted net income per share calculations.

Use of Estimates

In accordance with generally accepted accounting principles, management of the
Company has made a number of estimates and assumptions relating to the reporting
of assets and liabilities and the disclosure of contingent assets and
liabilities to prepare these financial statements. Actual results could differ
from those estimates.

Accounting Changes

In 1997, the Minerals Group implemented SFAS No. 128 "Earnings Per Share." SFAS
No. 128 replaced the calculation of primary and fully diluted net income per
share with basic and diluted net income per share (Note 10). Unlike primary net
income per share, basic net income per share excludes any dilutive effects of
options, warrants and convertible securities. Diluted net income per share is
very similar to the previous fully diluted net income per share. All
prior-period net income per share data has been restated to conform with the
provisions of SFAS No. 128.

In 1996, the Minerals Group adopted SFAS No. 121, "Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of". SFAS No. 121
requires companies to review assets for impairment whenever circumstances
indicate that the carrying amount of an asset may not be recoverable. SFAS No.
121 resulted in a pretax charge to earnings in 1996 for the Minerals Group's
Coal Operations of $29,948 ($19,466 after-tax), of which $26,312 was included in
cost of sales and $3,636 was included in selling, general and administrative
expenses. Assets for which the impairment loss was recognized consisted of
property, plant and equipment, advanced royalties and goodwill. These assets
primarily related to mines scheduled for closure in the near term and idled
facilities and related equipment.

Pending Accounting Changes

The Minerals Group will implement SFAS No. 130, "Reporting Comprehensive Income"
in the first quarter of 1998. SFAS No. 130 establishes standards for the
reporting and display of comprehensive income and its components in financial
statements. Comprehensive income generally represents all changes in
shareholders' equity except those resulting from investments by or distributions
to shareholders. With the exception of foreign currency translation adjustments,
such changes are not significant to the Minerals Group.

SFAS No. 131, "Disclosures about Segments of an Enterprise and Related
Information", will be implemented in the financial statements for the year ended
December 31, 1998. SFAS No. 131 requires publicly-held companies to report
financial and descriptive information about operating segments in financial
statements issued to shareholders for interim and annual periods. The SFAS also
requires additional disclosures with respect to products and services,
geographic areas of operation and major customers. The adoption of this SFAS is
not expected to have a material impact on the financial statements of the
Minerals Group.

                                      129

2. RELATED PARTY TRANSACTIONS

The following policies may be modified or rescinded by action of the Company's
Board of Directors (the "Board"), or the Board may adopt additional policies,
without approval of the shareholders of the Company, although the Board has no
present intention to do so. The Company allocated certain corporate general and
administrative expenses, net interest expense and related assets and liabilities
in accordance with the policies described below. Corporate assets and
liabilities are primarily deferred pension assets, income taxes and accrued
liabilities.

Financial

As a matter of policy, the Company manages most financial activities of the
Minerals Group, the Brink's Group and the Burlington Group on a centralized,
consolidated basis. Such financial activities include the investment of surplus
cash; the issuance, repayment and repurchase of short-term and long-term debt;
the issuance and repurchase of common stock and the payment of dividends. In
preparing these financial statements, transactions primarily related to invested
cash, short-term and long-term debt (including convertible debt), related net
interest and other financial costs have been attributed to the Minerals Group
based upon its cash flows for the periods presented after giving consideration
to the debt and equity structure of the Company. At December 31, 1997 and 1996,
the Company attributed long-term debt to the Minerals Group based upon the
purpose for the debt in addition to the cash flow requirements of the Minerals
Group. See Note 9 for details and amounts of long-term debt. The portion of the
Company's interest expense allocated to the Minerals Group for 1997, 1996 and
1995 was $10,193, $7,475 and $6,335, respectively. Management believes such
method of allocation to be equitable and a reasonable estimate of the cost
attributable to the Minerals Group.

To the extent borrowings are deemed to occur between the Brink's Group, the
Burlington Group and the Minerals Group, intergroup accounts have been
established bearing interest at the rate in effect from time to time under the
Company's unsecured credit lines or, if no such credit lines exist, at the prime
rate charged by Chase Manhattan Bank from time to time. At December 31, 1997,
the Minerals Group owed the Brink's Group and Burlington Group $27,004 and $0;
respectively, and at December 31, 1996, the Minerals Group owed the Brink's
Group and the Burlington Group $24,027 and $7,730; respectively, as a result of
borrowings.

Income Taxes

The Minerals Group and its domestic subsidiaries are included in the
consolidated U.S. federal income tax return filed by the Company.

The Company's consolidated provision and actual cash payments for U.S. federal
income taxes are allocated between the Minerals Group, the Brink's Group and the
Burlington Group in accordance with the Company's tax allocation policy and
reflected in the financial statements for each Group. In general, the
consolidated tax provision and related tax payments or refunds are allocated
among the Groups, for financial statement purposes, based principally upon the
financial income, taxable income, credits and other amounts directly related to
the respective Group. Tax benefits that cannot be used by the Group generating
such attributes, but can be utilized on a consolidated basis, are allocated to
the Group that generated such benefits and an intergroup account is established
for the benefit of the Group generating the attributes. As a result, the
allocated Group amounts of taxes payable or refundable are not necessarily
comparable to those that would have resulted if the Groups had filed separate
tax returns. At December 31, 1997, the Minerals Group was owed $19,391 and
$18,239 from the Brink's Group and the Burlington Group, respectively for such
tax benefits, of which $391 and $13,239, respectively, were not expected to be
received within one year from such dates in accordance with the policy. At
December 31, 1996, the Minerals Group was owed $18,760 and $24,310 from the
Brink's Group and the Burlington Group, respectively, for such tax benefits, of
which $8,760 and $13,310, respectively, were not expected to be received within
one year from such date. The Brink's and Burlington Groups paid the Minerals
Group $15,794 and $10,278, respectively in 1997 and $14,470 and $14,949,
respectively, in 1996 for the utilization of such tax benefits.

Shared Services

A portion of the Company's corporate general and administrative expenses and
other shared services has been allocated to the Minerals Group based upon
utilization and other methods and criteria which management believes to be
equitable and a reasonable estimate of the cost attributable to the Minerals
Group. These allocations were $5,988, $6,555 and $7,266 in 1997, 1996 and 1995,
respectively.

Pension

The Minerals Group's pension cost related to its participation in the Company's
noncontributory defined benefit pension plan is actuarially determined based on
its respective employees and an allocable share of the pension plan assets and
calculated in accordance with SFAS No. 87, "Employers' Accounting for Pensions".
Pension plan assets have been allocated to the Minerals Group based on the
percentage of its projected benefit obligation to the plan's total projected
benefit obligation. Management believes such method of allocation to be
equitable and a reasonable estimate of the cost attributable to the Minerals
Group.

                                      130

3. SHAREHOLDER'S EQUITY

The following analyzes shareholder's equity of the Minerals Group for the
periods presented:

                                                               As of December 31
                                                            1997     1996     1995
- -------------------------------------------------------------------------------------
                                                                         
Balance at beginning of period                          $ (11,660)  (8,679)   (8,596)
Net income                                                  4,228   10,658     14,024
Stock options exercised                                        22       43      1,203
Stock released from employee benefits
     trust to employee benefits plan                        2,259    2,100      1,745
Stock repurchases                                            (617)  (7,897)    (7,173)
Dividends declared                                         (8,765)  (9,059)    (9,493)
Foreign currency translation adjustment                    (4,022)   1,111       (566)
Tax benefit of options exercised                              (17)      63        177
- -------------------------------------------------------------------------------------
Balance at end of period                                $ (18,572) (11,660)    (8,679)
======================================================================================

The cumulative foreign currency translation adjustment deducted from
shareholder's equity is $2,851 at December 31, 1997. The cumulative foreign
currency translation adjustment included in shareholder's equity is $1,171 and
$60 at December 31, 1996 and 1995, respectively.

4. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment, at cost, consist of the following:

                                                As of December 31
                                              1997         1996
- ------------------------------------------------------------------
Bituminous coal lands                    $   107,212      101,988
Land, other than coal lands                   24,203       22,461
Buildings                                      8,996        8,853
Machinery and equipment                      196,313      191,622
- ------------------------------------------------------------------
Total                                    $   336,724      324,924
==================================================================

The estimated useful lives for property, plant and equipment are as follows:

                                  Years
- -----------------------------------------
                                
Buildings                       10 to 40
Machinery and equipment          3 to 30
=========================================

Depreciation and depletion of property, plant and equipment aggregated $23,180
in 1997, $22,633 in 1996 and $25,164 in 1995.

Mine development costs which were capitalized totaled $9,756 in 1997, $8,144 in
1996 and $10,118 in 1995.

5. ACCOUNTS RECEIVABLE TRADE

For each of the years in the three-year period ended December 31, 1997, the
Company, on behalf of the Minerals Group, maintained agreements with financial
institutions whereby it had the right to sell certain coal receivables to those
institutions. Certain agreements contained provisions for sales with recourse.
In 1997 and 1996, total coal receivables of $23,844 and $15,390, respectively,
were sold under such agreements. As of December 31, 1997 and 1996, receivables
sold which remained to be collected totaled $23,844 and $5,183, respectively.

6. INTANGIBLES

Intangibles consist entirely of the excess of cost over fair value of net assets
of businesses acquired and are net of accumulated amortization of $11,923 at
December 31, 1997 and $8,914 at December 31, 1996. The estimated useful life of
intangibles is generally forty years. Amortization of intangibles aggregated
$3,008 in 1997, $3,128 in 1996 and $3,099 in 1995.

7. FINANCIAL INSTRUMENTS

Financial instruments which potentially subject the Minerals Group to
concentrations of credit risk consist principally of cash and cash equivalents
and trade receivables. The Minerals Group places its cash and cash equivalents
with high credit quality financial institutions. Also, by policy, the amount of
credit exposure to any one financial institution is limited. The Minerals Group
makes substantial sales to a few relatively large customers. Credit limits,
ongoing credit evaluation and account monitoring procedures are utilized to
minimize the risk of loss from nonperformance on trade receivables.

The following details the fair values of financial instruments for which it is
practicable to estimate the value:

Cash and cash equivalents

The carrying amounts approximate fair value because of the short maturity of
these instruments.

Accounts receivable, accounts payable and accrued liabilities 

The carrying amounts approximate fair value because of the short-term nature of
these instruments.

Debt

The aggregate fair value of the Minerals Group's long-term debt obligations,
which is based upon quoted market prices and rates currently available to the
Company for debt with similar terms and maturities, approximates the carrying
amount.

                                      131

Off-balance sheet instruments

The Minerals Group utilizes off-balance sheet financial instruments, as
discussed below, to hedge foreign currency and other market exposures. The risk
that counterparties to such instruments may be unable to perform is minimized by
limiting the counterparties to major financial institutions. The Minerals Group
does not expect any losses due to such counterparty default.

Foreign currency forward contracts -- The Company, on behalf of the Minerals
Group, enters into foreign currency forward contracts, from time to time, with a
duration of up to two years as a hedge against liabilities denominated in the
Australian dollar. These contracts minimize the Minerals Group's exposure to
exchange rate movements related to cash requirements of Australian operations
denominated in Australian dollars. At December 31, 1997, the notional value of
foreign currency forward contracts outstanding was $19,578 and the fair value
approximated notional value.

Gold contracts -- In order to protect itself against downward movements in gold
prices, the Company, on behalf of the Minerals Group, hedges a portion of its
share of gold sales from the Stawell gold mine primarily through forward sales
contracts. At December 31, 1997, 41,500 ounces of gold, representing
approximately 19% of the Mineral Group's share of Stawell's proven and probable
reserves, were sold forward under forward sales contracts that mature
periodically through mid-1999. Because only a portion of its future production
is currently sold forward, the Company can take advantage of increases and is
exposed to decreases in the spot price of gold. At December 31, 1997, the fair
value of the Company's forward sales contracts was not significant.

Fuel contracts -- The Company, on behalf of the Minerals Group, has hedged a
portion of its diesel fuel requirements through several commodity option
transactions that are intended to protect against significant increases in
diesel fuel prices. At December 31, 1997, these transactions aggregated 8.7
million gallons and mature periodically throughout 1998. The fair value of these
fuel hedge transactions may fluctuate over the course of the contract period due
to changes in the supply and demand for oil and refined products. Thus, the
economic gain or loss, if any, upon settlement of the contracts may differ from
the fair value of the contracts at an interim date. At December 31, 1997, the
fair value of these contracts was not significant.

Interest rate contracts -- As discussed further in Note 9, in 1996 and 1995, the
Company entered into two variable to fixed interest rate swap agreements related
to the $100,000 term loan outstanding under the Facility. The fair value of
those agreements at December 31, 1997 was not significant.

8. INCOME TAXES

The provision (credit) for income taxes consists of the following:

                U.S.
              Federal      Foreign      State      Total
- ------------------------------------------------------------
                                      
1997:
Current    $(21,633)            --       --       (21,633)
Deferred     10,719            331       --        11,050
- ------------------------------------------------------------
Total ..   $(10,914)           331       --       (10,583)
1996:
============================================================
Current    $(29,325)            --       --       (29,325)
Deferred     20,893          1,195       --        22,088
- ------------------------------------------------------------
Total      $ (8,432)         1,195       --        (7,237)
============================================================
1995:
Current    $(25,432)           --        --       (25,432)
Deferred     15,664           748        --        16,412
- ------------------------------------------------------------
Total ..   $ (9,768)          748        --        (9,020)
============================================================

The significant components of the deferred tax expense were as follows:

                                                    Years Ended December 31
                                                      1997    1996      1995
- ------------------------------------------------------------------------------
                                                             
Deferred tax expense exclusive
  of the components listed below                  $ 10,551  18,064    17,038
Net operating loss carryforwards                      (558)   (327)     (631)
Alternative minimum tax credit                         664   3,337      (326)
Change in the valuation allowance for
     deferred tax assets                               393   1,014      331
- ------------------------------------------------------------------------------
Total                                             $ 11,050  22,088    16,412
==============================================================================

The tax benefit for compensation expense related to the exercise of certain
employee stock options for tax purposes in excess of compensation expense for
financial reporting purposes is recognized as an adjustment to shareholder's
equity.

                                      132

The components of the net deferred tax asset as of December 31, 1997, and
December 31, 1996, were as follows:

                                                                 1997      1996
- -------------------------------------------------------------------------------
                                                                   
Deferred tax assets:
Accounts receivable                                         $     816       973
Postretirement benefits other than pensions                    97,691    96,951
Workers' compensation and other claims                         42,256    46,791
Other liabilities and reserves                                 49,713    53,337
Miscellaneous                                                  11,320     8,405
Net operating loss carryforwards                                3,793     3,235
Alternative minimum tax credits                                 6,950     7,579
Valuation allowance                                            (9,853)   (9,460)
- -------------------------------------------------------------------------------
Total deferred tax assets                                     202,686   207,811
- -------------------------------------------------------------------------------
Deferred tax liabilities:
Property, plant and equipment                                  25,299    24,486
Pension assets                                                 34,120    33,179
Other assets                                                   12,110    11,392
Miscellaneous                                                  52,007    48,626
- -------------------------------------------------------------------------------
Total deferred tax liabilities                                123,536   117,683
- -------------------------------------------------------------------------------
Net deferred tax asset                                      $  79,150    90,128
- -------------------------------------------------------------------------------

The recording of deferred federal tax assets is based upon their expected
utilization in the Company's consolidated federal income tax return and the
benefit that would accrue to the Minerals Group under the Company's tax
allocation policy.

The valuation allowance relates to deferred tax assets in certain foreign and
state jurisdictions.

The following table accounts for the difference between the actual tax provision
and the amounts obtained by applying the statutory U.S. federal income tax rate
of 35% in 1997, 1996 and 1995 to the income (loss) before income taxes.

                                                Years Ended December 31
                                                1997      1996      1995
- --------------------------------------------------------------------------
                                                         
(Loss) income before income taxes:
United States                                $(7,273)      100     3,539
Foreign                                          918     3,321     1,465
- --------------------------------------------------------------------------
Total                                        $(6,355)    3,421     5,004
==========================================================================
Tax provision computed at statutory rate     $(2,224)    1,197     1,751
Increases (reductions) in taxes due to:
Percentage depletion                          (7,407)   (7,644)   (9,861)
State income taxes (net of federal tax
     benefit)                                   (393)   (1,014)     (726)
Change in the valuation allowance for
     deferred tax assets                         393     1,014       331
Miscellaneous                                   (952)     (790)     (515)
- --------------------------------------------------------------------------
Actual tax credit                           $(10,583)   (7,237)   (9,020)
==========================================================================

It is the policy of the Minerals Group to accrue deferred income taxes on
temporary differences related to the financial statement carrying amounts and
tax bases of investments in foreign subsidiaries and affiliates which are
expected to reverse in the foreseeable future. As of December 31, 1997 and
December 31, 1996, there was no unrecognized deferred tax liability for
temporary differences related to investments in foreign subsidiaries and
affiliates.

The Minerals Group and its domestic subsidiaries are included in the
Company's consolidated U.S. federal income tax return.

As of December 31, 1997, the Minerals Group had $6,950 of alternative minimum
tax credits allocated to it under the Company's tax allocation policy. Such
credits are available to offset future U.S. federal income taxes and, under
current tax law, the carryforward period for such credits is unlimited.

The tax benefit of net operating loss carryforwards for the Minerals Group as of
December 31, 1997 was $3,793 and related to various state and foreign taxing
jurisdictions. The expiration periods primarily range from 5 to 15 years.

9. LONG-TERM DEBT

A portion of the outstanding debt under the Company's credit agreement has been
attributed to the Minerals Group. Total long-term debt of the Minerals Group
consists of the following:

                                                           As of December 31
                                                          1997           1996
- --------------------------------------------------------------------------------
                                                                 
Senior obligations                                    $    293            350
Obligations under capital leases (average
     rate 9.24% in 1997 and 7.74% in 1996)                 799          1,022
- --------------------------------------------------------------------------------
                                                         1,092          1,372
- --------------------------------------------------------------------------------
Attributed portion of Company's debt:
     U.S. dollar term loan due 2001 (1997 year end
     rate 6.24% and 5.97% in 1996)                     100,000        100,000
     Revolving credit notes due 2001 (1997 year end
     rate 5.92% and 7.01% in 1996)                      15,022         23,200
- --------------------------------------------------------------------------------
Total long term debt, less current maturities          116,114        124,572

Current maturities of long-term debt:
Senior obligations                                          57             77
Capital leases                                             490            318
- --------------------------------------------------------------------------------
Total current maturities of long-term debt                 547            395
- --------------------------------------------------------------------------------
Total long-term debt including current maturities     $116,661        124,967
================================================================================

                                      133

For the four years through December 31, 2002, minimum repayments of long-term
debt outstanding are as follows:

              
     1999        $    351
     2000             504
     2001         115,091
     2002              20

The Company has a $350,000 credit agreement with a syndicate of banks (the
"Facility"). The Facility includes a $100,000 term loan and permits additional
borrowings, repayments and reborrowings of up to an aggregate of $250,000. The
maturity date of both the term loan and revolving credit portion of the Facility
is May 2001. Interest on borrowings under the Facility is payable at rates based
on prime, certificate of deposit, Eurodollar or money market rates. A term loan
of $100,000 was outstanding at December 31, 1997 and 1996. Additional borrowings
of $25,900 and $23,200 were outstanding at December 31, 1997 and 1996,
respectively. The Company pays commitment fees (.125% per annum at December 31,
1997) on the unused portion of the Facility. At December 31, 1997 and 1996,
$115,022 and $123,200, respectively, of these borrowings were attributed to the
Minerals Group.

The Company has two interest rate swap agreements which effectively convert a
portion of its $100,000 variable rate term loan to fixed rates. During 1995, the
Company entered into an agreement, maturing in July 1998, which fixes the
Company's interest rate at 5.80% on $20,000 in face amount of debt. During 1996,
the Company entered into another variable to fixed interest rate swap agreement,
maturing in February 1998, which fixes the Company's interest rate at 4.9% on an
initial $5,000 in face amount of debt. The notional amount increased by $5,000
each quarter through the first quarter of 1997. The notional amount outstanding
at December 31, 1997 was $20,000.

Under the terms of the Facility, the Company has agreed to maintain at least
$400,000 of Consolidated Net Worth, as defined, and can incur additional
indebtedness of approximately $610,000 at December 31, 1997.

At December 31, 1997, the Company's portion of outstanding unsecured letters of
credit allocated to the Minerals Group was $27,204, primarily supporting its
obligations under its various self-insurance programs.

10. NET INCOME PER SHARE

The following is a reconciliation between the calculation of basic and diluted
net income per share:

                                                     Years Ended December 31
                                                     1997     1996         1995
- -------------------------------------------------------------------------------
                                                               
Numerator:
Net income                                     $    4,228    10,658      14,024
Convertible Preferred Stock dividends              (3,481)   (1,675)     (2,762)
- -------------------------------------------------------------------------------
Basic net income per share numerator                  747     8,983     11,262
Effect of dilutive securities:
     Convertible Preferred Stock dividends             --     1,675       2,762
- -------------------------------------------------------------------------------
Diluted net income per share numerator                747    10,658      14,024

Denominator:
Basic weighted average common shares
     outstanding                                    8,076     7,897       7,786
Effect of dilutive securities:
     Convertible Preferred Stock                       --     1,945       2,186
     Employee stock options                            26        42          29
- -------------------------------------------------------------------------------
Diluted weighted average common shares
     outstanding                                    8,102     9,884      10,001
===============================================================================

Options to purchase 446, 300 and 338 shares of common stock, at prices between
$12.18 and $25.74, $13.43 and $25.74 and $14.01 and $25.74 per share, were
outstanding in 1997, 1996 and 1995, respectively, but were not included in the
computation of diluted net income per share because the options' exercise price
was greater than the average market price of the common shares and, therefore,
the effect would be antidilutive.

The conversion of preferred stock to 1,785 shares of common stock has been
excluded in the computation of diluted net income per share in 1997 because the
effect of the assumed conversion would be antidilutive.

                                      134

11. STOCK OPTIONS

The Company has various stock-based compensation plans as described below.

Stock Option Plans

The Company grants options under its 1988 Stock Option Plan (the "1988 Plan") to
executives and key employees and under its Non-Employee Directors' Stock Option
Plan (the "Non-Employee Plan") to outside directors, to purchase common stock at
a price not less than 100% of quoted market value at the date of grant. The 1988
Plan options can be granted with a maximum term of ten years and can vest within
six months from the date of grant. The majority of grants made in 1997, 1996 and
1995 have a maximum term of six years and vest 100% at the end of the third
year. The Non-Employee Plan options can be granted with a maximum term of ten
years and can vest within six months from the date of grant. The majority of
grants made in 1997, 1996 and 1995 have a maximum term of six years and vest
ratably over the first three years. The total number of shares underlying
options authorized for grant, but not yet granted, under the 1988 Plan is 789.

Under the Non-Employee Plan, the total number of shares underlying options
authorized for grant, not yet granted, is 47.

The Company's 1979 Stock Option Plan (the "1979 Plan") and 1985 Stock Option
Plan (the "1985 Plan") terminated in 1985 and 1988, respectively, except as to
options still outstanding.

As part of the Brink's Stock Proposal (described in the Company's Proxy
Statement dated December 31, 1995 resulting in the modification of the capital
structure of the Company to include an additional class of common stock), the
1988 and the Non-Employee Plans were amended to permit option grants to be made
to optionees with respect to Brink's Stock or Burlington Stock, in addition to
Minerals Stock. The approval of the Brink's Stock Proposal had no effect on
options for Minerals Stock.

The table below summarizes the related plan activity.

                                                       Aggregate
                                                        Exercise
                                        Shares             Price
- ----------------------------------------------------------------
                                                 
Outstanding at December 31, 1994           507           $ 9,571
Granted                                    259             2,665
Exercised                                  (95)           (1,203
Forfeited or expired                       (73)           (1,674
- ----------------------------------------------------------------
Outstanding at December 31, 1995           598             9,359
Granted                                      4                47
Exercised                                   (3)              (45)
Forfeited or expired                       (16)             (229)
- ----------------------------------------------------------------
Outstanding at December 31, 1996           583             9,132
Granted                                    138             1,746
Exercised                                   (2)              (22)
Forfeited or expired                       (67)             (921)
- ----------------------------------------------------------------
Outstanding at December 31, 1997           652           $ 9,935
=================================================================

Options exercisable at the end of 1997, 1996 and 1995, respectively, for
Minerals Stock were 253, 292 and 214.

The following table summarizes information about stock options outstanding as of
December 31, 1997.

                        ------------------------------    ------------------------
                                          Stock Option               Stock Options
                                           Outstanding                 Exercisable
- ----------------------------------------------------------------------------------
                                Weighted
                                Average
                              Remaining      Weighted                     Weighted
                            Contractual       Average                      Average
Range of                           Life      Exercise                     Exercise
Exercise Prices    Shares       (Years)         Price      Shares            Price
- ----------------------------------------------------------------------------------
                                                        
$   8.74 to 12.18   262          3.37         $10.41          24           $11.08
   12.69 to 16.63   203          4.05          13.29          79            14.22
   18.63 to 25.74   187          2.69          24.12         150            24.00
- ----------------------------------------------------------------------------------
Total               652                                      253
==================================================================================

                                      135

Employee Stock Purchase Plan

Under the 1994 Employee Stock Purchase Plan (the "Plan"), the Company is
authorized to issue up to 250 shares of Minerals Stock, to its employees who
have six months of service and who complete minimum annual work
requirements. Under the terms of the Plan, employees may elect each six-month
period (beginning January 1 and July 1), to have up to 10 percent of
their annual earnings withheld to purchase the Company's stock. Employees
may purchase shares of any or all of the three classes of Company common
stocks. The purchase price of the stock is 85% of the lower of its
beginning-of-the-period or end-of-the-period market price. Under the Plan, the
Company sold 46, 30 and 44 shares of Minerals Stock to employees during 1997,
1996 and 1995, respectively.

Accounting For Plans

The Company has adopted the disclosure-only provisions of SFAS No. 123,
"Accounting for Stock-Based Compensation", but applies APB Opinion No. 25 and
related Interpretations in accounting for its plans. Accordingly, no
compensation cost has been recognized in the accompanying financial statements.
Had compensation costs for the Company's plans been determined based on the fair
value of awards at the grant dates, consistent with SFAS No. 123, the Minerals
Group's net income and earnings per share would approximate the pro forma
amounts indicated below:

                                                  1997        1996         1995
- --------------------------------------------------------------------------------
                                                                
Net Income attributed to common shares
Minerals Group
     As Reported                                 $ 747        8,983      11,262
     Pro Forma                                     336        8,711      10,925
Net Income per common share
Minerals Group
     Basic, As Reported                           0.09         1.14        1.45
     Basic, Pro Forma                             0.04         1.10        1.40
     Diluted, As Reported                         0.09         1.08        1.40
     Diluted, Pro Forma                           0.04         1.05        1.37
================================================================================

Note: The pro forma disclosures shown may not be representative of the
effects on reported net income in future years.

The fair value of each stock option grant used to compute pro forma net income
and net income per share disclosures is estimated at the time of the grant using
the Black-Scholes option-pricing model. The weighted-average assumptions used in
the model are as follows:

                                     1997      1996       1995
- --------------------------------------------------------------
                                                 
Expected dividend yield              5.4%       4.8%      4.8%
Expected volatility                   43%        37%       38%
Risk-free interest rate              6.2%       6.1%      5.7%
Expected term (in years)              4.2        3.7       4.2
==============================================================

Using these assumptions in the Black-Scholes model, the weighted-average fair
value of options granted during 1997, 1996 and 1995, is $487, $10 and $687,
respectively.

Under SFAS No. 123, compensation cost is also recognized for the fair value of
employee stock purchase rights. Because the Company settles its employee stock
purchase rights under the Plan at the end of each six-month offering period, the
fair value of these purchase rights was calculated using actual market
settlement data. The weighted-average fair value of the stock purchase rights
granted in 1997, 1996 and 1995 was $237, $143 and $290 for the Minerals Group,
respectively.

12. CAPITAL STOCK

The Company, at any time, has the right to exchange each outstanding share of
Minerals Stock, which was previously subject to exchange for shares of Services
Stock, for shares of Brink's Stock (or, if no Brink's Stock is then outstanding,
Burlington Stock) having a fair market value equal to 115% of the fair market
value of one share of Minerals Stock. In addition, upon the disposition of all
or substantially all of the properties and assets of the Minerals Group to any
person (with certain exceptions), the Company is required to exchange each
outstanding share of Minerals Stock for shares of Brink's Stock (or, if no
Brink's Stock is then outstanding, Burlington) having a fair market value equal
to 115% of the fair market value of one share of Minerals Stock. If any shares
of the Company's Preferred Stock are converted after an exchange of Minerals
Stock for Brink's Stock (or Burlington Stock), the holder of such Preferred
Stock would, upon conversion, receive shares of Brink's Stock (or Burlington
Stock) in lieu of shares of Minerals Stock otherwise issuable upon such
conversion.

The Company, at any time, has the right to exchange each outstanding share of
Burlington Stock for shares of Brink's Stock (or, if no Brink's Stock is then
outstanding, Minerals Stock) having a fair market value equal to 115% of the
fair market value of one share of Burlington Stock. In addition, upon the
disposition of all or substantially all of the properties and assets of the
Burlington Group to any person (with certain exceptions), the Company is
required to exchange each outstanding share of Burlington Stock for shares of
Brink's Stock (or, if no Brink's Stock is then outstanding, Minerals Stock)
having a fair market value equal to 115% of the fair market value of one share
of Burlington Stock.

Holders of Brink's Stock at all times have one vote per share. Holders of
Burlington Stock and Minerals Stock have .739 and .244 votes per share,
respectively, subject to adjustment on January 1, 2000, and on January 1 every
two years thereafter in such a manner so that each class' share of the aggregate
voting power at such time will be equal to that class' share of the

                                      136

aggregate market capitalization of the Company's common stock at such time.
Accordingly, on each adjustment date, each share of Burlington Stock and
Minerals Stock may have more than, less than or continue to have the number of
votes per share as they have. Holders of Brink's Stock, Burlington Stock and
Minerals Stock vote together as a single voting group on all matters as to which
all common shareholders are entitled to vote. In addition, as prescribed by
Virginia law, certain amendments to the Articles of Incorporation affecting,
among other things, the designation, rights, preferences or limitations of one
class of common stock, or certain mergers or statutory share exchanges, must be
approved by the holders of such class of common stock, voting as a group, and,
in certain circumstances, may also have to be approved by the holders of the
other classes of common stock, voting as separate voting groups.

In the event of a dissolution, liquidation or winding up of the Company, the
holders of Brink's Stock, Burlington Stock and Minerals Stock, effective January
1, 1998, share on a per share basis an aggregate amount equal to 55%, 28% and
17%, respectively, of the funds, if any, remaining for distribution to the
common shareholders. In the case of Minerals Stock, such percentage has been
set, using a nominal number of shares of Minerals Stock of 4,203 (the "Nominal
Shares") in excess of the actual number of shares of Minerals Stock outstanding.
These liquidation percentages are subject to adjustment in proportion to the
relative change in the total number of shares of Brink's Stock, Burlington Stock
and Minerals Stock, as the case may be, then outstanding to the total number of
shares of all other classes of common stock then outstanding (which totals, in
the case of Minerals Stock, shall include the Nominal Shares).

The Company has the authority to issue up to 2,000 shares of preferred stock,
par value $10 per share. In January, 1994, the Company issued $80,500 or 161
shares of Series C Cumulative Convertible Preferred Stock (the "Convertible
Preferred Stock"). The proceeds of the Convertible Preferred Stock offering have
been attributed to the Minerals Group. The Convertible Preferred Stock pays an
annual cumulative dividend of $31.25 per share payable quarterly, in cash, in
arrears, out of all funds of the Company legally available therefore; when as
and if declared by the Board, and bears a liquidation preference of $500 per
share, plus an amount equal to accrued and unpaid dividends thereon. Each share
of the Convertible Preferred Stock is convertible at the option of the holder
unless previously redeemed or, under certain circumstances, called for
redemption, into shares of Minerals Stock at a conversion price of $32.175 per
share of Minerals Stock, subject to adjustment in certain circumstances. The
Company may, at its option, redeem the Convertible Preferred Stock, in whole or
in part, for cash at a price of $518.750 per share, effective February 1, 1998,
and thereafter at prices declining ratably annually on each February 1 to an
amount equal to $500 per share on and after February 1, 2004, plus in each case
an amount equal to accrued and unpaid dividends on the date of redemption.
Except under certain circumstances or as prescribed by Virginia law, shares of
the Convertible Preferred Stock are nonvoting.

In November 1995, the Company's Board of Directors (the "Board") authorized a
revised share repurchase program which allows for the repurchase of up to 1,000
shares of Minerals Stock, not to exceed an aggregate purchase price of $45,000
for all common shares of the Company; such shares to be purchased from time to
time in the open market or in private transactions, as conditions warrant.

In 1994, the Board authorized the repurchase, from time to time, of up to
$15,000 of Convertible Preferred Stock. In November 1995 and February 1997, the
Board authorized an increase in the remaining authority to $15,000 and in May
1997, the Board authorized an increase in the remaining repurchase authority to
$25,000.

Under the share repurchase programs, the Company purchased shares in the periods
presented as follows:

                                                         Years Ended December 31
(In thousands)                                       1997                  1996
- -------------------------------------------------------------------------------
                                                                   
Convertible Preferred Stock:
     Shares                                             2                    21
     Cost                                          $  617                 7,897
     Excess carrying amount (a)                    $  108                 2,120
===============================================================================

(a) The excess of the carrying amount of the Convertible Preferred Stock over
the cash paid to holders for repurchases made during the years which is deducted
from preferred dividends in the Company's Statement of Operations.

As of December 31, 1997 the Company had remaining authority to purchase over
time 1,000 shares of Pittston Minerals Group Common Stock and an additional
$24,383 of its Convertible Preferred Stock. The aggregate purchase price
limitation for all common stock was $24,903 at December 31, 1997. The authority
to acquire shares remains in effect in 1998.

In 1997, 1996 and 1995, dividends paid on the Convertible Preferred Stock
amounted to $3,589, $3,795 and $4,341, respectively. During 1996 and 1997, the
Board declared and the Company paid dividends of 65 cents on Minerals Stock.

                                      137

 

The Company's Articles of Incorporation limits dividends on Minerals Stock to
the lesser of (i) all funds of the Company legally available therefore (as
prescribed by Virginia law) and (ii) the Available Minerals Dividend Amount (as
defined in the Articles of Incorporation). The Available Minerals Dividend
Amount may be reduced by activity that reduces shareholder's equity or the fair
value of net assets of the Minerals Group. Such activity includes net losses by
the Minerals Group, dividends paid on the Minerals Stock and the Convertible
Preferred Stock, repurchases of Minerals Stock and the Convertible Preferred
Stock, and foreign currency translation losses. At December 31, 1997, the
Available Minerals Dividend Amount was at least $15,199. See the Company's
consolidated financial statements and related footnotes. Subject to these
limitations, the Company's Board, although there is no requirement to do so,
intends to declare and pay dividends on the Minerals Stock based primarily on
the earnings, financial condition, cash flow and business requirements of the
Minerals Group.

In December 1992, the Company formed The Pittston Company Employee Benefits
Trust (the "Trust") to hold shares of its common stock to fund obligations under
certain employee benefits programs not including stock option plans. The trust
first began funding obligations under the Company's various stock option plans
in September 1995. Upon formation of the Trust, the Company sold for a
promissory note of the Trust, 4,000 new shares of its common stock to the Trust
at a price equal to the fair value of the stock on the date of sale. At December
31, 1997, 232 shares of Minerals Stock (424 in 1996) remained in the Trust,
valued at market. The value of these shares has no impact on shareholder's
equity.

13. COAL JOINT VENTURE

The Minerals Group, through a wholly owned indirect subsidiary of the Company,
has a partnership agreement, Dominion Terminal Associates ("DTA"), with three
other coal companies to operate coal port facilities in Newport News, Virginia,
in the Port of Hampton Roads (the "Facilities"). The Facilities, in which the
Minerals Group has a 32.5% interest, have an annual throughput capacity of 22
million tons, with a ground storage capacity of approximately 2 million tons.
The Facilities financing is provided by a series of coal terminal revenue
refunding bonds issued by the Peninsula Ports Authority of Virginia (the
"Authority"), a political subdivision of the Commonwealth of Virginia, in the
aggregate principal amount of $132,800, of which $43,160 are attributable to the
Company. These bonds bear a fixed interest rate of 7.375%. The Authority owns
the Facilities and leases them to DTA for the life of the bonds, which mature on
June 1, 2020. DTA may purchase the facilities for one dollar at the end of the
lease term. The obligations of the partners are several, and not joint.

Under loan agreements with the Authority, DTA is obligated to make payments
sufficient to provide for the timely payment of principal and interest on the
bonds. Under a throughput and handling agreement, the Minerals Group has agreed
to make payments to DTA that in the aggregate will provide DTA with sufficient
funds to make the payments due under the loan agreements and to pay the Minerals
Group's share of the operating costs of the Facilities. The Company has also
unconditionally guaranteed the payment of the principal and premium, if any, and
the interest on the bonds. Payments for operating costs aggregated $4,691 in
1997, $5,208 in 1996 and $6,841 in 1995. The Minerals Group has the right to use
32.5% of the throughput and storage capacity of the Facilities subject to user
rights of third parties which pay the Minerals Group a fee. The Minerals Group
pays throughput and storage charges based on actual usage at per ton rates
determined by DTA.

14. LEASES

The Minerals Group's businesses lease coal mining and other equipment under
long-term operating leases with varying terms, and most of the leases contain
renewal and/or purchase options. As of December 31, 1997, aggregate future
minimum lease payments under noncancellable operating leases were as follows:

                                           Equipment
                          Facilities       Other             Total
- -------------------------------------------------------------------
                                                   
1998                      $  662          17,516            18,178
1999                         657          10,905            11,562
2000                         493           8,056             8,549
2001                         428           4,761             5,189
2002                         172           1,594             1,766
2003                           2              --                 2
2004                           2              --                 2
2005                           2              --                 2
2006                           1              --                 1
Later Years                    3              --                 3
- -------------------------------------------------------------------
Total                     $2,422          42,832            45,254
===================================================================

These amounts are net of aggregate future minimum noncancellable sublease
rentals of $987. Almost all of the above amounts related to equipment are
guaranteed by the Company.

Net rent expense amounted to $21,912 in 1997, $24,236 in 1996 and $34,363 in
1995.

The Minerals Group incurred capital lease obligations of $624 in 1997, $1,031 in
1996, and $12 in 1995. As of December 31, 1997, the Minerals Group's obligations
under capital leases were not significant (Note 9).

                                      138

 

15. EMPLOYEE BENEFIT PLANS

The Minerals Group's businesses participate in the Company's noncontributory
defined benefit pension plan covering substantially all nonunion employees who
meet certain minimum requirements. Benefits under most of the plans are based on
salary (including commissions, bonuses, overtime and premium pay) and years of
service. The Minerals Group's pension cost is actuarially determined based on
its employees and an allocable share of the pension plan assets. The Company's
policy is to fund the actuarially determined amounts necessary to provide assets
sufficient to meet the benefits to be paid to plan participants in accordance
with applicable regulations.

The net pension credit for 1997, 1996 and 1995  for the Minerals Group is as
follows:

                                                                Years Ended December 31
                                                          1997            1996          1995
- ---------------------------------------------------------------------------------------------
                                                                                 
Service cost--benefits earned during year               $ 3,626           3,561         3,306
Interest cost on projected benefit obligation           11,340           9,921         9,548
Return on assets--actual                                (39,294)        (25,571)      (38,005)
Return on assets--deferred                               20,857           8,641        22,199
Other amortization, net                                  1,334           2,323             7
- ---------------------------------------------------------------------------------------------
Net pension credit                                  $   (2,137)         (1,125)       (2,945)
=============================================================================================

The assumptions used in determining the net pension credit for the Company's
primary pension plan were as follows:

                                                                  1997      1996      1995
- ------------------------------------------------------------------------------------------
                                                                              
Interest cost on projected benefit obligation                     8.0%      7.5%     8.75%
Expected long-term rate of return on assets                      10.0%     10.0%     10.0%
Rate of increase in compensation levels                           4.0%      4.0%      4.0%
===========================================================================================

The Minerals Group's allocated funded status and deferred pension assets at
December 31, 1997 and 1996 are as follows:

                                                            1997           1996
- --------------------------------------------------------------------------------
                                                                
Actuarial present value of  accumulated benefit
     obligation:
     Vested                                          $   140,372        121,093
     Nonvested                                             5,991          3,870
- --------------------------------------------------------------------------------
                                                         146,363        124,963
Benefits attributable to projected salaries               15,287         13,063
- --------------------------------------------------------------------------------
Projected benefit obligation                             161,650        138,026
Plan assets at fair value                                234,616        204,577
- --------------------------------------------------------------------------------
Excess of plan assets over projected
     benefit obligation                                   72,966         66,551
Unrecognized experience loss                               8,585         12,622
Unrecognized prior service cost                              232            236
- --------------------------------------------------------------------------------
Net pension assets                                        81,783         79,409
Current pension liabilities                                2,042          1,658
- --------------------------------------------------------------------------------
Deferred pension assets per balance sheet            $    83,825         81,067
================================================================================

For the valuation of the Company's primary pension obligations and the
calculation of the funded status, the discount rate was 7.5% in 1997 and 8% in
1996. The expected long-term rate of return on assets was 10% in both years. The
rate of increase in compensation levels used was 4% in 1997 and 1996.

The unrecognized initial net asset at January 1, 1986, the date of adoption of
SFAS 87, has been amortized over the estimated remaining average service life of
the employees. As of December 31, 1997, approximately 72% of plan assets were
invested in equity securities and 28% in fixed income securities.

Under the 1990 collective bargaining agreement with the United Mine Workers of
America ("UMWA"), the Minerals Group agreed to make payments at specified
contribution rates for the benefit of the UMWA employees. The trustees of the
UMWA pension fund contested the agreement and brought action against the
Company. While the case was in litigation, the Minerals Group's benefit payments
were made into an escrow account for the benefit of union employees. During
1996, the case was settled and the escrow funds were released (Note 19). As a
result of the settlement, the Coal subsidiaries agreed to continue their
participation in the UMWA 1974 pension plan at defined contribution rates.

                                      139

 

The Minerals Group also provides certain postretirement health care and life
insurance benefits for eligible active and retired employees in the United
States.

For the years 1997, 1996 and 1995, the components of periodic expense for these
postretirement benefits were as follows:

                                                   Years Ended December 31
                                                   1997      1996      1995
- --------------------------------------------------------------------------------
                                                             
Service cost benefits earned during year        $  1,349    1,810     1,523
Interest cost on accumulated post-
  retirement benefit obligation                   21,648   19,752    19,510
Amortization of losses                             1,393    1,128        --
- --------------------------------------------------------------------------------
Total expense                                   $ 24,390   22,690    21,033
================================================================================

At December 31, 1997 and 1996, the actuarially determined and recorded
liabilities for these postretirement benefits, none of which have been funded,
were as follows:

                                                         Years Ended December 31
                                                             1997      1996
- --------------------------------------------------------------------------------
                                                               
Accumulated postretirement benefit obligation:
Retirees                                                  $ 253,434   235,565
Fully eligible active plan participants                      35,789    23,959
Other active plan participants                               17,904    21,416
- --------------------------------------------------------------------------------
                                                            307,127   280,940
Unrecognized experience loss                                (64,378)  (43,530)
- --------------------------------------------------------------------------------
Liability included on the balance sheet                     242,749   237,410
Less current portion                                         18,913    17,693
- --------------------------------------------------------------------------------
Noncurrent liability for postretirement health
     care and life insurance benefits                     $ 223,836   219,717
================================================================================

The accumulated postretirement benefit obligation was determined using the unit
credit method and an assumed discount rate of 7.5% in 1997 and 8% in 1996. The
assumed health care cost trend rate used in 1997 was 7.43% for pre-65 retirees,
grading down to 5% in the year 2001. For post-65 retirees, the assumed trend
rate in 1997 was 6.43%, grading down to 5% in the year 2001. The assumed
medicare cost trend rate used in 1997 was 6.10%, grading down to 5% in the year
2001.

A percentage point increase each year in the assumed health care cost trend rate
used would have resulted in an increase of approximately $3,100 in the aggregate
service and interest components of expense for the year 1997, and an increase of
approximately $41,300 in the accumulated postretirement benefit obligation at
December 31, 1997.

The Minerals Group also participates in the Company's Savings-Investment Plan to
assist eligible employees in providing for retirement or other future financial
needs. Employee contributions are matched at rates of 50% to 100% up to 5% of
compensation (subject to certain limitations imposed by the Internal Revenue
Code of 1986, as amended). Contribution expense under the plan aggregated $993
in 1997, $1,004 in 1996 and $1,204 in 1995.

The Minerals Group sponsors other defined contribution plans and contributions
under these plans aggregated $368 in 1995. There was no expense during 1996 and
1997 as these plans were terminated.

In October 1992, the Coal Industry Retiree Health Benefit Act of 1992 (the
"Health Benefit Act") was enacted as part of the Energy Policy Act of 1992. The
Health Benefit Act established rules for the payment of future health care
benefits for thousands of retired union mine workers and their dependents. The
Health Benefit Act established a trust fund to which "signatory operators" and
"related persons", the Company and certain of its subsidiaries (the "Pittston
Companies") are jointly and severally liable for annual premiums for assigned
beneficiaries, together with a pro rata share for certain beneficiaries who
never worked for such employers ("unassigned beneficiaries"), in amounts
determined on the basis set forth in the Health Benefit Act. For 1997, 1996 and
1995, these amounts, on a pretax basis, were approximately $9,300, $10,400 and
$10,800 , respectively. The Company believes that the annual liability under the
Health Benefit Act for the Pittston Companies' assigned beneficiaries will
continue at approximately $9,000 per year for the next several years and should
begin to decline thereafter as the number of such assigned beneficiaries
decreases.

Based on the number of beneficiaries actually assigned by the Social Security
Administration, the Company estimates the aggregate pretax liability relating to
the Pittston Companies' remaining assigned beneficiaries at approximately
$200,000, which when discounted at 7.5% provides a present value estimate of
approximately $90,000.

The ultimate obligation that will be incurred by the Company could be
significantly affected by, among other things, increased medical costs,
decreased number of beneficiaries, governmental funding arrangements and such
federal health benefit legislation of general application as may be enacted. In
addition, the Health Benefit Act requires the Pittston Companies to fund, pro
rata according to the total number of assigned beneficiaries, a portion of the
health

                                      140

 

benefits for unassigned beneficiaries. At this time, the funding for such health
benefits is being provided from another source and for this and other reasons
the Pittston Companies' ultimate obligation for the unassigned beneficiaries
cannot be determined. The Company accounts for its obligations under the Health
Benefit Act as a participant in a multi-employer plan and recognizes the annual
cost on a pay-as-you-go basis.

16. RESTRUCTURING AND OTHER (CREDITS) CHARGES, INCLUDING LITIGATION ACCRUAL

Refer to Note 19 for a discussion of the benefit ($35,650) of the reversal of a
litigation accrual related to the Evergreen Case.

At December 31, 1997, Coal Operations had a liability of $30,846 for various
restructuring costs which was recorded as restructuring and other charges in the
Statement of Operations in years prior to 1995. Although coal production has
ceased at the mines remaining in the accrual, Coal Operations will incur
reclamation and environmental costs for several years to bring these properties
into compliance with federal and state environmental laws. However, management
believes that the reserve, as adjusted, at December 31, 1997, should be
sufficient to provide for these future costs. Management does not anticipate
material additional future charges to operating earnings for these facilities,
although continual cash funding will be required over the next several years.

The initiation, in 1996, of a state tax credit for coal produced in Virginia,
along with favorable labor negotiations and improved metallurgical market
conditions for medium volatile coal, led management to continue operating an
underground mine and a related coal preparation and loading facility previously
included in the restructuring reserve. As a result of these decisions and
favorable workers' compensation claim developments, Coal Operations reversed
$3,104 and $11,649 of this reserve in 1997 and 1996, respectively. The 1996
reversal included $4,778 related to estimated mine and plant closures, primarily
reclamation, and $6,871 in employee severance and other benefit costs. The
entire 1997 reversal related to workers' compensation claim reserves.

The following table analyzes the changes in liabilities during the last three
years for facility closure costs recorded as restructuring and other charges:

                                                           Employee
                                               Mine    Termination,
                                  Leased        and         Medical
                               Machinery       Plant            and
                                     and     Closure      Severance
(In thousands)                 Equipment       Costs          Costs        Total
================================================================================
                                                              
Balance December 31, 1994        $ 3,787      38,256          43,372      85,415
Payments (a)                       1,993       7,765           7,295      17,053
Other reductions(c)                  576       1,508              --       2,084
- --------------------------------------------------------------------------------
Balance December 31, 1995          1,218      28,983          36,077      66,278
Reversals                             --       4,778           6,871      11,649
Payments (b)                         842       5,499           3,921      10,262
Other reductions (c)                  --       6,267              --       6,267
- --------------------------------------------------------------------------------
Balance December 31, 1996            376      12,439          25,285      38,100
Reversals                             --          --           3,104       3,104
Payments (d)                         376       1,764           2,010       4,150
Other                                 --         468            (468)         --
- --------------------------------------------------------------------------------
Balance December 31, 1997        $    --      11,143          19,703      30,846
================================================================================

(a) Of the total payments made in 1995, $6,424 was for liabilities recorded in
years prior to 1993, $2,486 was for liabilities recorded in 1993 and $8,143 was
for liabilities recorded in 1994.

(b) Of the total payments made in 1996, $5,119 was for liabilities recorded in
years prior to 1993, $485 was for liabilities recorded in 1993 and $4,658 was
for liabilities recorded in 1994.

(c) These amounts represent the assumption of liabilities by third parties as a
result of sales transactions.

(d) Of the total payments made in 1997, $3,053 was for liabilities recorded in
years prior to 1993, $125 was for liabilities recorded in 1993 and $972 was for
liabilities recorded in 1994.

During the next twelve months, expected cash funding of these charges will be
approximately $4,000 to $6,000. The liability for mine and plant closure costs
is expected to be satisfied over the next nine years, of which approximately 40%
is expected to be paid over the next two years. The liability for workers'
compensation is estimated to be 42% settled over the next four years with the
balance paid during the following five to nine years.

                                      141

 

17. OTHER OPERATING INCOME

Other operating income primarily includes royalty income and gains on sales of
assets.

18. SEGMENT INFORMATION

Net sales by geographic area are as follows:

                                                     Years Ended December 31
                                              1997        1996          1995
- --------------------------------------------------------------------------------
                                                           
United States:
Domestic customers                      $   398,509     421,645      467,479
Export customers in Europe                  110,368     112,738      108,111
Other export customers                      104,030     143,010      130,661
- --------------------------------------------------------------------------------
                                            612,907     677,393      706,251
Australia                                    17,719      19,120       16,600
- --------------------------------------------------------------------------------
Total net sales                         $   630,626     696,513      722,851
================================================================================

The following is derived from the business segment information in the Company's
consolidated financial statements as it relates to the Minerals Group. See Note
2, Related Party Transactions, for a description of the Company's policy for
corporate allocations.

The Minerals Group's portion of the Company's operating profit is as follows:

                                                     Years Ended December 31
                                              1997        1996          1995
- --------------------------------------------------------------------------------
                                                            
United States (a)                       $    9,129      18,206        21,752
Australia                                    1,018       3,447         1,586
- --------------------------------------------------------------------------------
Minerals Group's portion of the
  Company's segment operating
  profit                                    10,147      21,653        23,338
Corporate expenses allocated to the
     Minerals Group                         (5,988)     (6,555)       (7,266)
- --------------------------------------------------------------------------------
Total operating profit                  $    4,159      15,098        16,072
================================================================================

(a) Operating profit includes a benefit from restructuring and other credits,
including litigation accrual aggregating $3,104 and $47,299 in 1997 and 1996,
respectively, all of which is included in the United States (Note 16).

The Minerals Group's portion of the Company's assets at year end is as follows:

                                                       As of December 31
                                           1997        1996         1995
- ---------------------------------------------------------------------------
                                                        
United States                       $   550,450      596,358     702,132
Australia                                19,558       21,240      18,999
- ---------------------------------------------------------------------------
Minerals Group's portion of the
  Company's assets                      570,008      617,598      721,131
Minerals Group's portion of
  corporate assets                       84,174       89,383       77,478
- ---------------------------------------------------------------------------
Total assets                        $   654,182      706,981      798,609
===========================================================================

Industry segment information is as follows:

                                                     Years Ended December 31
                                              1997        1996          1995
- --------------------------------------------------------------------------------
                                                           
Net Sales:
Coal Operations                         $  612,907     677,393       706,251
Mineral Ventures                            17,719      19,120        16,600
- --------------------------------------------------------------------------------
Total revenues                          $  630,626     696,513       722,851
================================================================================
Operating Profit (Loss):
Coal Operations (a)                     $   12,217      20,034        23,131
Mineral Ventures                            (2,070)      1,619           207
- --------------------------------------------------------------------------------
Segment operating profit                    10,147      21,653        23,338
Allocated general corporate expense         (5,988)     (6,555)       (7,266)
- --------------------------------------------------------------------------------
Total operating profit                  $    4,159      15,098        16,072
================================================================================

(a) Operating profit of the Coal Operations segment included a benefit from
restructuring and other charges, including litigation accrual of $3,104 in 1997
and $47,299 in 1996 (Note 16).

                                      142

 

                                                     Years Ended December 31
                                              1997        1996          1995
- --------------------------------------------------------------------------------
                                                           
Capital Expenditures:
Coal Operations                        $    22,285      18,881        17,811
Mineral Ventures                             4,544       3,714         2,332
Allocated general corporate                    184       1,785           168
- --------------------------------------------------------------------------------
Total capital expenditures             $    27,013      24,380        20,311
================================================================================
Depreciation, Depletion and Amortization:
Coal Operations                        $    35,351      34,632        40,285
Mineral Ventures                             1,968       1,856         1,597
Allocated general corporate                    196         136           158
================================================================================
Total depreciation, depletion and
  amortization                         $    37,515      36,624        42,040
================================================================================
Assets at December 31:
Coal Operations                        $   549,576     594,772       699,049
Mineral Ventures                            20,432      22,826        22,082
- --------------------------------------------------------------------------------
Identifiable assets                        570,008     617,598       721,131
Allocated portion of the Company's
  corporate assets                          84,174      89,383        77,478
- --------------------------------------------------------------------------------
Total assets                           $   654,182     706,981       798,609
================================================================================

In 1997, 1996 and 1995, net sales to one customer of the Coal segment amounted
to approximately $178,000, $150,000, and $126,000, respectively.

19. LITIGATION

In April 1990, the Company entered into a settlement agreement to resolve
certain environmental claims against the Company arising from hydrocarbon
contamination at a petroleum terminal facility ("Tankport") in Jersey City, New
Jersey, which operations were sold in 1983. Under the settlement agreement, the
Company is obligated to pay 80% of the remediation costs. Based on data
available to the Company and its environmental consultants, the Company
estimates its portion of the cleanup costs on an undiscounted basis using
existing technologies to be between $6,600 and $11,900 over a period of up to
five years. Management is unable to determine that any amount within that range
is a better estimate due to a variety of uncertainties, which include the extent
of the contamination at the site, the permitted technologies for remediation and
the regulatory standards by which the clean-up will be conducted. The clean-up
estimates have been modified from prior years' in light of cost inflation and
certain assumptions the Company is making with respect to the end use of the
property. The estimate of costs and the timing of payments could change as a
result of changes to the remediation plan required, changes in the technology
available to treat the site, unforseen circumstances existing at the site and
additional cost inflation.

The Company commenced insurance coverage litigation in 1990, in the United
States District Court for the District of New Jersey, seeking a declaratory
judgment that all amounts payable by the Company pursuant to the Tankport
obligation were reimbursable under comprehensive general liability and pollution
liability policies maintained by the Company. In August 1995, the District Court
ruled on various Motions for Summary Judgement. In its decision, the Court found
favorably for the Company on several matters relating to the comprehensive
general liability policies but concluded that the pollution liability policies
did not contain pollution coverage for the types of claims associated with the
Tankport site. On appeal, the Third Circuit reversed the District Court and held
that the insurers could not deny coverage for the reasons stated by the District
Court, and the case was remanded to the District Court for trial. In the event
the parties are unable to settle the dispute, the case is scheduled to be tried
beginning September, 1998. Management and its outside legal counsel continue to
believe that recovery of a substantial portion of the cleanup costs will
ultimately be probable of realization. Accordingly, based on estimates of
potential liability, probable realization of insurance recoveries, related
developments of New Jersey law and the Third Circuit's decision, it is the
Company's belief that the ultimate amount that it would be liable for is
immaterial.

In 1988, the trustees of the 1950 Benefit Trust Fund and the 1974 Pension
Benefit Trust Funds (the "Trust Funds") established under collective bargaining
agreements with the UMWA brought an action (the "Evergreen Case") against the
Company and a number of its coal subsidiaries in the United States District
Court for the District of Columbia, claiming that the defendants are obligated
to contribute to such Trust Funds in accordance with the provisions of the 1988
and subsequent National Bituminous Coal Wage Agreements, to which neither the
Company nor any of its subsidiaries is a signatory. The Company recognized in
1993 in its financial statements for the Minerals Group the potential liability
that might have resulted from an ultimate adverse judgment in the Evergreen Case
(Notes 15 and 16).

                                      143

 

In late March 1996 a settlement was reached in the Evergreen Case. Under the
terms of the settlement, the coal subsidiaries which had been signatories to
earlier National Bituminous Coal Wage Agreements agreed to make various lump sum
payments in full satisfaction of all amounts allegedly due to the Trust Funds
through January 31, 1996, to be paid over time as follows: approximately $25,800
upon dismissal of the Evergreen Case and the remainder of $24,000 in
installments of $7,000 in 1996 and $8,500 in each of 1997 and 1998. The first
payment was entirely funded through an escrow account previously established by
the Company. The second and third payments of $7,000 and $8,500 were paid
according to schedule and were funded from cash by operating activities. In
addition, the coal subsidiaries agreed to future participation in the UMWA 1974
Pension Plan.

As a result of the settlement of these cases at an amount lower than those
previously accrued, the Minerals Group recorded a pretax gain of $35,650
($23,173 after-tax) in the first quarter of 1996 in its financial statements.

20. COMMITMENTS

At December 31, 1997, the Minerals Group had contractual commitments for third
parties to contract mine or provide coal to the Minerals Group. Based on the
contract provisions these commitments are currently estimated to aggregate
approximately $195,740 and expire from 1998 through 2005 as follows:

                                              
     1998                                        $       53,889
     1999                                                40,546
     2000                                                40,546
     2001                                                29,109
     2002                                                10,596
     2003                                                 7,656
     2004                                                 7,656
     2005                                                 5,742

Spending under the contracts was $70,691 in 1997, $99,161 in 1996 and $83,532 in
1995.

21. SUPPLEMENTAL CASH FLOW INFORMATION

For the years ended December 31, 1997, 1996 and1995, there were net cash tax
refunds of $25,891, $29,324 and $20,731, respectively.

For the years ended December 31, 1997, 1996 and 1995, cash payments for interest
were $10,575, $10,746 and $10,296, respectively.

In 1995, the Minerals Group sold mining operations in Ohio together with a
related coal supply contract for notes and royalties receivable totaling $6,949.

22. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

Tabulated below are certain data for each quarter of 1997 and 1996. The 1996 and
the first three quarters of 1997 net income per share amounts have been restated
to comply with SFAS No. 128, "Earnings Per Share" (Note 1).

                                   1st          2nd        3rd            4th
- --------------------------------------------------------------------------------
                                                          
1997 Quarters:
Net sales                    $ 158,883      157,812    150,998        162,933
Gross profit                     5,471        3,976      6,660          5,494
Net income (loss) (a)        $     947       (1,163)       972          3,472

Net income (loss) per Pittston Minerals Group
 common share:
 Basic (a)                   $     .01         (.26)       .02            .32
 Diluted                           .01         (.26)       .02            .32
- --------------------------------------------------------------------------------
1996 Quarters:
Net sales                    $ 170,252      175,268    177,195        173,798
Gross (loss) profit            (25,633)       5,824      9,288           (463)
Net income (a)               $   3,020        2,644      2,498          2,496

Net income per Pittston Minerals Group
  common share:
  Basic (a)                  $     .25          .35        .33            .20
  Diluted                          .25          .27        .25            .20
================================================================================

(a) The fourth quarters of 1997 and 1996 include the reversal of excess
restructuring liabilities of $3,104 ($2,018 after-tax; $0.25 per basic share)
and $9,541 ($6,202 after-tax; $0.78 per basic share), respectively.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

Not applicable.

                                      144

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
- --------------------------------------------------------------------------------

The information required by this Item regarding directors is incorporated by
reference to Pittston's definitive proxy statement to be filed pursuant to
Regulation 14A within 120 days after December 31, 1997. The information
regarding executive officers is included in this report following Item 4, under
the caption "Executive Officers of the Registrant.

ITEM 11. EXECUTIVE COMPENSATION
- --------------------------------------------------------------------------------

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
- --------------------------------------------------------------------------------

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- --------------------------------------------------------------------------------
The information required by Items 11 through 13 is incorporated by reference to
Pittston's definitive proxy statement to be filed pursuant to Regulation 14A
within 120 days after December 31, 1997.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)  1.   All financial statements--see index to financial statements
          and schedules.

     2.   Financial statement schedules--see index to financial
          statements and schedules.

     3.   Exhibits--see exhibit index.

(b)  A report on Form 8-K was filed on October 23, 1997, with respect
     to third quarter 1997 earnings for each of Pittston Brink's Group
     Common Stock, Pittston Burlington Group Common Stock and
     Pittston Minerals Group Common Stock and a report on Form 8-K was
     filed on December 19, 1997, with respect to BAX Global Inc.'s
     announcement that it had signed an agreement to acquire, subject
     to certain conditions and termination rights, Distribution
     Services Limited and an affiliated company.

Undertaking

For the purposes of complying with the amendments to the rules governing Form
S-8 (effective July 13, 1990) under the Securities Act of 1933, the undersigned
Registrant hereby undertakes as follows, which undertaking shall be incorporated
by reference into Registrant's Registration Statements on Form S-8 Nos. 2-64258,
33-2039, 33-21393, 33-23333, 33-69040, 33-53565 and 333-02219:

Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
of 1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.

                                      145

The Pittston Company and Subsidiaries

Signatures

Pursuant to the requirements of Section 13 or 15(d) 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, on March 27, 1998.

                                                  The Pittston Company
                                                 ----------------------
                                                      (Registrant)

                                       By                M.T. Dan
                                          -----------------------------------
                                                        (M.T. Dan,
                                                       President and
                                                  Chief Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities indicated, on March 27, 1998.

        Signatures                                        Title
     ----------------                                   ---------
     R. G. Ackerman*                                    Director
     J. R. Barker*                         Director and Chairman of the Board
     J. L. Broadhead*                                    Director
     W. F. Craig*                                        Director

     M.T. Dan 
     ----------------------                     Director, President and
    (M.T. Dan)                                  Chief Executive Officer
                                              (principal executive officer)

     R. M. Gross*                                        Director
     C. F. Haywood*                                      Director
     D. L. Marshall*                                     Director

     G.R. Rogliano
     ----------------------                      Senior Vice President
    (G. R. Rogliano)                          and Chief Financial Officer
                                              (principal accounting officer)

     R. H. Spilman*                                      Director
     A. H. Zimmerman*                                    Director

     *By  M.T. Dan
         ---------------------------
         (M.T. Dan, Attorney-in-Fact)

                                      146

 

The Pittston Company and Subsidiaries
Index to Financial Statements and Schedules

Financial Statements:

THE PITTSTON COMPANY AND SUBSIDIARIES

Statement of Management Responsibility...............61

Independent Auditors' Report.........................61

Consolidated Balance Sheets .........................62

Consolidated Statements of Operations................63

Consolidated Statements of Shareholders' Equity......64

Consolidated Statements of Cash Flows ...............65

Notes to Consolidated Financial Statements...........66

PITTSTON BRINK'S GROUP

Statement of Management Responsibility...............86

Independent Auditors' Report.........................86

Balance Sheets.......................................87

Statements of Operations.............................88

Statements of Cash Flows.............................89

Notes to Financial Statements .......................90

PITTSTON BURLINGTON GROUP

Statement of Management Responsibility..............105

Independent Auditors' Report........................105

Balance Sheets......................................106

Statements of Operations............................107

Statements of Cash Flows............................108

Notes to Financial Statements ......................109

PITTSTON MINERALS GROUP

Statement of Management Responsibility .............123

Independent Auditors' Report .......................123

Balance Sheets......................................124

Statements of Operations............................125

Statements of Cash Flows............................126

Notes to Financial Statements.......................127

Financial Statement Schedules:

Schedules are omitted because they are not material, not applicable or not
required, or the information is included elsewhere in the financial statements.

                                      147

 

The Pittston Company and Subsidiaries
Exhibit Index

Each Exhibit listed below that is followed by a reference to a previously filed
document is hereby incorporated by reference to such document.

Exhibit
Number          Description

 3(i)     The Registrant's Restated Articles of Incorporation. Exhibit
          3(i) to the Registrant's Quarterly Report on Form 10-Q for the
          quarter ended June 30, 1996.

 3(ii)    The Registrant's Bylaws, as amended through February 6, 1998.

 4(a)    (i)  Amendment dated as of July 1, 1997, to the Rights Agreement
              between Registrant and BankBoston, N.A., as successor Rights
              Agent. Exhibit 4 to the Registrant's Quarterly Report on Form 10-Q
              for the quarter ended June 30, 1997 (the "Second Quarter 1997 Form
              10-Q").

 4(a)    (ii) Amended and Restated Rights Agreement dated as of January 19, 1996
              (the "Rights Agreement"), between the Registrant and Chemical
              Mellon Shareholder Services, L.L.C., as Rights Agent. Exhibit 2 to
              the Registrant's Registration Statement on Form 8-A dated February
              26, 1996 (the "Form 8-A").

        (iii) Form of Right Certificate for Brink's Rights. Exhibit B-1 to
              Exhibit 2 to the Form 8-A.

        (iv)  Form of Right Certificate for Minerals Rights. Exhibit B-2 to
              Exhibit 2 to the Form 8-A.

        (v)   Form of Right Certificate for Burlington Rights. Exhibit B-3 to
              Exhibit 2 to the Form 8-A.

        Instruments defining the rights of holders of long-term debt of the
        Registrant and its consolidated subsidiaries have been omitted because
        the amount of debt under any such instrument does not exceed 10% of the
        total assets of the Registrant and its consolidated subsidiaries. The
        Registrant agrees to furnish a copy of any such instrument to the
        Commission upon request.

10(a)*  The Registrant's 1979 Stock Option Plan, as amended. Exhibit 10(a) to
        the Registrant's Annual Report on Form 10-K for the year ended December
        31, 1992 (the "1992 Form 10-K").

10(b)*  The Registrant's 1985 Stock Option Plan, as amended. Exhibit 10(b) to
        the 1992 Form 10-K.

10(c)*  The Registrant's Key Employees Incentive Plan, as amended. Exhibit 10(c)
        to the Registrant's Annual Report on Form 10-K for the year ended
        December 31, 1991 (the "1991 Form 10-K").

10(d)*  The Company's Key Employees' Deferred Compensation Program as amended.
        Exhibit 10(d) to the Registrant's Annual Report on Form 10-K for the
        year ended December 31, 1995 (the "1995 Form 10-K").

10(e)*  (i)   The Registrant's Pension Equalization Plan, as amended.

        (ii)  Amended and Restated Trust Agreement, dated December 1, 1997,
              between Registrant and Chase Manhattan Bank, as Trustee.

        (iii) Trust Agreement under the Pension Equalization Plan, Retirement
              Plan for Non-Employee Directors and Certain Contractual
              Arrangements of The Pittston Company made as of September 16,
              1994, by and between the Registrant and Chase Manhattan Bank
              (National Association), as Trustee. Exhibit 10(i) to the
              Registrant's Quarterly Report on Form 10-Q for the quarter ended
              September 30, 1994 (the "Third Quarter 1994 Form 10-Q").

        (iv)  Form of letter agreement dated as of September 16, 1994, between
              the Registrant and one of its officers. Exhibit 10(e) to the Third
              Quarter 1994 Form 10-Q.

        (v)   Form of letter agreement dated as of September 16, 1994, between
              the Registrant and Participants pursuant to the Pension
              Equalization Plan. Exhibit 10(f) to the Third Quarter 1994 Form
              10-Q.

10(f)*  The Registrant's Executive Salary Continuation Plan. Exhibit 10(e) to
        the 1991 Form 10-K.

10(g)*  The Registrant's Non-Employee Directors' Stock Option Plan, as amended.

10(h)*  The Registrant's 1988 Stock Option Plan, as amended.

10(i)*  (i)   Employment Agreement dated as of May 1, 1993, between the
              Registrant and J. C. Farrell. Exhibit 10 to the Registrant's
              Quarterly Report on Form 10-Q for the quarter ended March 31,
              1993.

        (ii)  Amendment No. 1 to Employment Agreement dated as of May 1, 1993,
              between the Registrant and J. C. Farrell. Exhibit 10(h) to the
              1993 Form 10-K.

                                      148

 

        (iii) Form of Amendment No. 2 dated as of September 16, 1994, to
              Employment Agreement dated as of May 1, 1993, as amended by
              Amendment No. 1 thereto dated March 18, 1994, between the
              Registrant and Joseph C. Farrell. Exhibit 10(b) to the Third
              Quarter 1994 Form 10-Q.

        (iv)  Amendment No. 3 to Employment Agreement dated as of May 1, 1996,
              between the Registrant and J. C. Farrell. Exhibit 10(i)(iv) to the
              1995 Form 10-K.

        (v)   Amendment No. 4 to Employment Agreement, dated as of April 23,
              1997, between the Registrant and J.C. Farrell.

10(j)*  (i)   Employment Agreement dated as of June 1, 1994, between the
              Registrant and D. L. Marshall. Exhibit 10 to the Second Quarter
              1994 Form 10-Q.

        (ii)  Form of Letter Agreement dated as of September 16, 1994, amending
              Employment Agreement dated as of June 1, 1994, between the
              Registrant and D. L. Marshall. Exhibit 10(c) to the Third Quarter
              1994 Form 10-Q.

        (iii) Form of Letter Agreement dated as of June 1, 1995, replacing all
              prior Employment Agreements and amendments or modifications
              thereto, between the Registrant and D. L. Marshall (the "Marshall
              Employment Agreement"). Exhibit 10 to the Registrant's quarterly
              report on Form 10-Q for the Quarter ended June 30, 1995.

        (iv)  Letter Agreement dated as of April 1, 1996, amending the Marshall
              Employment Agreement. Exhibit 10(j)(iv) to the 1995 Form 10-K.

        (v)   Form of Letter Agreement dated as of June 1, 1997, replacing all
              prior Employment Agreements and amendments or modifications
              thereto, between the Registrant and D.L. Marshall. Exhibit
              10(j)(v) to the Registrant's Annual Report on Form 10-K for the
              year ended December 31, 1996 (the 1996 Form 10-K").

        (vi)  Form of Letter Agreement dated as of October 1, 1997, replacing
              all prior Employment Agreements and amendments or modifications
              thereto, between the Registrant and D.L. Marshall. Exhibit 10(b)
              to the Registrant's Quarterly Report on Form 10-Q for the quarter
              ended September 30, 1997 (the "Third Quarter 1997 Form 10-Q").

10(k)*  The Company's 1994 Employee Stock Purchase Plan, as amended.

10(l)*  (i)   Form of change in control agreement replacing all prior change in
              control agreements and amendments and modifications thereto,
              between the Registrant and Joseph C. Farrell.

        (ii)  Form of change in control agreement replacing all prior change in
              control agreements and amendments and modifications thereto,
              between the Registrant (or a subsidiary) and ten of the
              Registrant's officers.

10(m)*  Form of Indemnification Agreement entered into by the Registrant with
        its directors and officers. Exhibit 10(l) to the 1991 Form 10-K.

10(n)*  (i)   Registrant's Retirement Plan for Non-Employee Directors, as
              amended. Exhibit 10(g) to the Third Quarter 1994 Form 10-Q.

        (ii)  Form of letter agreement dated as of September 16, 1994, between
              the Registrant and its Non-Employee Directors pursuant to
              Retirement Plan for Non-Employee Directors. Exhibit 10(h) to the
              Third Quarter 1994 Form 10-Q.

10(o)   (i)   Form of severance agreement between the Registrant and Joseph C.
              Farrell.

        (ii)  Form of severance agreement between the Registrant (or a
              subsidiary) and six of the Registrant's officers.

10(p)*  Registrant's Directors' Stock Accumulation Plan. Exhibit A to the
        Registrant's Proxy Statement filed March 29, 1996.

10(q)*  Registrant's Amended and Restated Plan for Deferral of Directors' Fees.
        Exhibit 10(o) to the 1989 Form 10-K.

10(r)   (i)   Participation Agreement (the "Participation Agreement") dated as
              of December 19, 1985, among Burlington Air Express Inc. (formerly,
              Burlington Global Northern Air Freight Inc. and Burlington Air
              Express USA Inc.) ("Burlington"), the loan participants named
              therein (the "Loan Participants"), Manufacturers Hanover Leasing
              Corporation, as Owner Participant (the "Owner Participant"), The
              Connecticut National Bank, as

                                      149

 

              Indenture Trustee (the "Indenture Trustee") and Meridian Trust
              Company, as Owner Trustee (the "Owner Trustee"). Exhibit 10(p)(i)
              to the Registrant's Annual Report on Form 10-K for the year ended
              December 31, 1988 (the "1988 Form 10-K").

        (ii)  Trust Agreement (the "Trust Agreement") dated as of December 19,
              1985, between the Owner Participant and the Owner Trustee. Exhibit
              10(p)(ii) to the 1988 Form 10-K.

        (iii) Trust Indenture and Mortgage (the "Trust Indenture and Mortgage")
              dated December 19, 1985, between the Owner Trustee, as Mortgagor,
              and the Indenture Trustee, as Mortgagee (the "Mortgagee"). Exhibit
              10(p)(iii) to the 1988 Form 10-K.

        (iv)  Lease Agreement (the "Lease Agreement") dated as of December 19,
              1985, between the Owner Trustee, as Lessor, and Burlington, as
              Lessee. Exhibit 10(p)(iv) to the 1988 Form 10-K.

        (v)   Tax Indemnity Agreement (the "Tax Indemnity Agreement") dated as
              of December 19, 1985, between the Owner Participant and
              Burlington, including Amendment No. 1 dated March 10, 1986.
              Exhibit 10(p)(v) to the 1988 Form 10-K.

        (vi)  Guaranty (the "Guaranty") dated as of December 19, 1985, by the
              Registrant. Exhibit 10(p)(vi) to the 1988 Form 10-K.

        (vii) Trust Agreement and Mortgage Supplement Nos. 1 through 4, dated
              December 23 and 30, 1985 and March 10 and May 8, 1986, between the
              Owner Trustee, as Mortgagor, and the Indenture Trustee, as
              Mortgagee, including Amendment No. 1 dated as of October 1, 1986
              to Trust Agreement and Mortgage Supplement Nos. 3 and 4. Exhibit
              10(p)(vii) to the 1988 Form 10-K.

       (viii) Lease Supplements Nos. 1 through 4 dated December 23 and 30, 1985
              and March 10 and May 8, 1986, between the Owner Trustee, as
              Lessor, and Burlington, as Lessee, including Amendment No. 1 dated
              as of October 1, 1986 to Lease Supplements Nos. 3 and 4. Exhibit
              10(p)(viii) to the 1988 Form 10-K.

       (ix)   Letter agreement dated March 10, 1986, among the Owner
              Participant, the Mortgagee, the Owner Trustee, the Loan
              Participants, Burlington and the Registrant, amending the Lease
              Agreement, the Trust Indenture and Mortgage and the Participation
              Agreement. Exhibit 10(p)(ix) to the 1988 Form 10-K.

       (x)    Letter agreement dated as of May 8, 1986, among the Owner
              Participant, the Mortgagee, the Owner Trustee, the Loan
              Participants, Burlington and the Registrant, amending the
              Participation Agreement. Exhibit 10(p)(x) to the 1988 Form 10-K.

       (xi)   Letter agreement dated as of May 25, 1988, between the Owner
              Trustee, as Lessor, and Burlington, as Lessee, amending the Lease
              Agreement. Exhibit 10(p)(xi) to the 1988 Form 10-K.

       (xii)  Partial Termination of Lease, dated September 18, 1992, between
              the Owner Trustee, as Lessor, and Burlington, as Lessee, amending
              the Lease Agreement. Exhibit 10(o)(xii) to the 1992 Form 10-K.

       (xiii) Partial Termination of Trust Indenture and Mortgage, dated
              September 18, 1992, between the Indenture Trustee, as Mortgagee,
              and the Owner Trustee, as Mortgagor, amending the Trust Indenture
              and Mortgage. Exhibit 10(o)(xiii) to the 1992 Form 10-K.

       (xiv)  Trust Agreement and Mortgage Supplement No. 5, dated September 18,
              1992, between the Owner Trustee, as Mortgagor, and the Indenture
              Trustee, as Mortgagee. Exhibit 10(o)(xiv) to the 1992 Form 10-K.

       (xv)   Lease Supplement No. 5, dated September 18, 1992, between the
              Owner Trustee, as Lessor, and Burlington, as Lessee. Exhibit
              10(o)(xv) to the 1992 Form 10-K.

       (xvi)  Lease Supplement No. 6, dated January 20, 1993, between the Owner
              Trustee, as Lessor, and Burlington, as Lessor, amending the Lease
              Agreement. Exhibit 10(o)(xvi) to the 1992 Form 10-K.

10(s)  (i)    Lease dated as of April 1, 1989 between Toledo-Lucas County Port
              Authority (the "Authority"), as Lessor, and Burlington, as Lessee.
              Exhibit 10(i) to the Registrant's quarterly report on Form 10-Q
              for the quarter ended June 30, 1989 (the "Second Quarter 1989 Form
              10-Q").

                                      150

 

       (ii)   Lease Guaranty Agreement dated as of April 1, 1989 between
              Burlington (formerly, Burlington Air Express Management Inc.), as
              Guarantor, and the Authority. Exhibit 10(ii) to the Second Quarter
              1989 Form 10-Q.

       (iii)  Trust Indenture dated as of April 1, 1989 between the Authority
              and Society Bank & Trust (formerly, Trustcorp Bank, Ohio) (the
              "Trustee"), as Trustee. Exhibit 10(iii) to the Second Quarter 1989
              Form 10-Q.

       (iv)   Assignment of Basic Rent and Rights Under a Lease and Lease
              Guaranty dated as of April 1, 1989 from the Authority to the
              Trustee. Exhibit 10(iv) to the Second Quarter 1989 Form 10-Q.

       (v)    Open-End First Leasehold Mortgage and Security Agreement dated as
              of April 1, 1989 from the Authority to the Trustee. Exhibit 10(v)
              to the Second Quarter 1989 Form 10-Q.

       (vi)   First Supplement to Lease dated as of January 1, 1990, between the
              Authority and Burlington, as Lessee. Exhibit 10 to the
              Registrant's quarterly report on Form 10-Q for the quarter ended
              March 31, 1990.

       (vii)  Revised and Amended Second Supplement to Lease dated as of
              September 1, 1990, between the Authority and Burlington. Exhibit
              10(i) to the Registrant's quarterly report on Form 10-Q for the
              quarter ended September 30, 1990 (the "Third Quarter 1990 Form
              10-Q").

       (viii) Amendment Agreement dated as of September 1, 1990, among City of
              Toledo, Ohio, the Authority, Burlington and the Trustee. Exhibit
              10(ii) to the Third Quarter 1990 Form 10-Q.

       (ix)   Assumption and Non-Merger Agreement dated as of September 1, 1990,
              among Burlington, the Authority and the Trustee. Exhibit 10(iii)
              to the Third Quarter 1990 Form 10-Q.

       (x)    First Supplemental Indenture between Toledo-Lucas County Port
              Authority, and Society National Bank, as Trustee, dated as of
              March 1, 1994. Exhibit 10.1 to the First Quarter 1994 Form 10-Q.

       (xi)   Third Supplement to Lease between Toledo-Lucas County Port
              Authority, as Lessor, and Burlington Air Express Inc., as Lessee,
              dated as of March 1, 1994. Exhibit 10.2 to the First Quarter 1994
              Form 10-Q.

       (xii)  Fourth Supplement to Lease between Toledo-Lucas County Port
              Authority, as Lessor, and Burlington Air Express Inc., as Lessee,
              dated as of June 1, 1991. Exhibit 10.3 to the First Quarter 1994
              Form 10-Q.

       (xiii) Fifth Supplement to Lease between Toledo-Lucas County Port
              Authority, as Lessor, and Burlington Air Express Inc., as Lessee,
              dated as of December 1, 1996. Exhibit 10(r)(xiii) to the 1996 Form
              10-K.

10(t)   Stock Purchase Agreement dated as of September 24, 1993, between the
        Pittston Acquisition Company and Addington Holding Company, Inc. Exhibit
        10 to the Registrant's Quarterly Report on Form 10-Q for the quarter
        ended September 30, 1993.

10(u)   (i)   Credit Agreement dated as of March 4, 1994, among The Pittston
              Company, as Borrower, Lenders Parties Thereto, Chemical Bank,
              Credit Suisse and Morgan Guaranty Trust Company of New York, as
              Co-agents, and Credit Suisse, as Administrative Agent (the "Credit
              Agreement"). Exhibit 10.4 to the First Quarter 1994 Form 10-Q.

        (ii)  Amendment to the Credit Agreement dated as of May 1, 1995. Exhibit
              10(s)(ii) to the 1995 Form 10-K.

        (iii) Amendment to Credit Agreement dated as of May 15, 1996. Exhibit
              10(t)(iii) to the 1996 Form 10-K.

10(v)*  Retirement agreement dated March 11, 1998 between the Registrant and
        Joseph C. Farrell.

21      Subsidiaries of the Registrant.

23      Consent of independent auditors.

24      Powers of attorney.

27      Financial Data Schedules.

99*     (a)   Amendment to the Registrant's Pension-Retirement Plan relating to
              preservation of assets of the Pension-Retirement Plan upon a
              change in control. Exhibit 99 to the 1992 Form 10-K.

99*     (b)   1994 Employee Stock Purchase Plan of the Pittston Company's Annual
              Report on Form 11-K for the year ended December 31, 1997.

- ------------------------
  *Management contract or compensatory plan or arrangement.

                                      151

 

                                                                  Exhibit 3(ii)

                              THE PITTSTON COMPANY
                                     BYLAWS

                      (As amended through February 6, 1998)

                                    ARTICLE I

NAME

         The name of the corporation is The Pittston Company.

                                   ARTICLE II

OFFICES

         1. The corporation shall maintain a registered office and a registered
agent in the Commonwealth of Virginia as required by the laws of said
Commonwealth.

         2. The corporation shall in addition to its registered office in the
Commonwealth of Virginia establish and main tain an office or offices at such
place or places as the Board of Directors may from time to time find necessary
or desirable.

                                   ARTICLE III

CORPORATE SEAL

         The corporate seal of the corporation shall have inscribed thereon the
name of the corporation, the fact of its establishment in the Commonwealth of
Virginia and the words "Corporate Seal". Such seal may be used by causing it or
a facsimile thereof to be impressed, affixed, printed or otherwise reproduced.

                                   ARTICLE IV

MEETINGS OF SHAREHOLDERS

         1.  Meetings of the shareholders shall be held at such place, within
or without the Commonwealth of Virginia, as the Board may determine.

         2. The annual meeting of the shareholders shall be held on the second
Wednesday in May at ten o'clock in the forenoon, local time, or on such other
day or at such other time as the Board may determine. At each annual meeting of
the shareholders they shall elect by plurality vote, in accordance with the
Articles of Incorporation and these bylaws, directors to hold office until the
third annual meeting of the shareholders held after their election and their
successors are respectively elected and qualified or as otherwise provided by
statute, the Articles of Incorpora tion or these bylaws. Any other proper
business may be transacted at the annual meeting. The chairman of the meeting
shall be authorized to declare whether any business is properly brought before
the meeting, and, if he shall declare that it is not so brought, such business
shall not be transacted. Without limiting the generality of the foregoing, the
chairman of the meeting may declare that matters relating to the conduct of the
ordinary business operations of the corporation are not properly brought before
the meeting.

         3. A majority of the votes entitled to be cast on a matter shall
constitute a quorum for action on that matter at all meetings of the
shareholders, except as otherwise provided by statute, the Articles of
Incorporation or these bylaws. The shareholders entitled to vote thereat,
present in person or by proxy, or the chairman of the meeting shall have power
to adjourn the meeting from time to time, without notice other than announcement
at the meeting before adjournment (except as otherwise provided by statute). At
such adjourned meeting any business may be transacted which might have been
transacted at the meeting as originally notified.

         4. At all meetings of the shareholders each shareholder having the
right to vote shall be entitled to vote in person, or by proxy appointed by an
appointment form signed by such shareholder and bearing a date not more than
eleven months prior to said meeting, unless such form pro vides for a longer
period. All proxies shall be effective when received by the Secretary or other
officer or agent of the corporation authorized to tabulate votes.

         5. Except as otherwise provided in the Articles of Incorporation, at
each meeting of the shareholders each shareholder shall have one vote for each
share having voting power, registered in his name on the share transfer books of
the corporation at the record date fixed in accordance with these bylaws, or
otherwise determined, with respect to such meeting. Except as otherwise
expressly provided by statute, the Articles of Incorporation or these bylaws,
action on a matter, other than the election of directors, by a voting group is
approved if a quorum exists and the votes cast

                                               - 2 -

within the voting group favoring the action exceed the votes cast opposing the
action.

         6. Except as otherwise prescribed by statute, notice of each meeting of
the shareholders shall be given to each shareholder entitled to vote thereat not
less than 10 nor more than 60 days before the meeting. Such notice shall state
the date, time and place of the meeting and, in the case of a special meeting,
the purpose or purposes for which the meeting is called.

         7. Except as otherwise prescribed by statute, special meetings of the
shareholders for any purpose or purposes may be called by the Chairman of the
Board and shall be called by the Chairman of the Board or the Secretary by vote
of the Board of Directors.

         8. Business transacted at each special meeting shall be confined to the
purpose or purposes stated in the notice of such meeting.

         9. The order of business at each meeting of the shareholders and the
voting and other procedures to be observed at such meeting shall be determined
by the chairman of such meeting.

    10. Subject to the rights of holders of shares of the Preferred Stock of the
corporation, nominations for the election of directors shall be made by the
Board of Direc tors or by any shareholder entitled to vote in elections of
directors. However, any shareholder entitled to vote in elections of directors
may nominate one or more persons for election as directors at an annual meeting
only if written notice of such shareholder's intent to make such nomination or
nominations has been given, either by personal delivery or by United States
registered or certified mail, postage prepaid, to the Secretary of the
corporation not less than 120 and not more than 180 calendar days in advance of
the date on which the corporation's proxy statement was released to shareholders
in connection with the immediately preceding annual meeting. Each notice shall
set forth (i) the name and address of the shareholder who intends to make the
nomination and of the person or persons to be nominated, (ii) a representation
that the shareholder is entitled to vote at such meeting and intends to appear
in person or by proxy at the meeting to nominate the person or persons specified
in the notice, (iii) the class and number of shares of the corporation that are
owned by the shareholder, (iv) a description of all arrangements, understandings
or relationships between the shareholder and each nominee and any other person
or persons (naming such person or persons) pursuant to which the nomination or
nominations are to be made by the shareholder and (v) such other information
regarding each nominee proposed by such shareholder as would

                                               - 3 -

be required to be included in a proxy statement filed pur suant to the proxy
rules of the Securities and Exchange Commission, had the nominee been nominated,
or intended to be nominated, by the Board of Directors, and shall include a
consent signed by each such nominee to serve as a director of the corporation if
so elected. The chairman of the meeting may refuse to acknowledge the nomination
of any person not made in compliance with the foregoing procedure.

    11. To be properly brought before an annual meeting of shareholders,
business must be (i) specified in the notice of meeting (or any supplement
thereto) given by or at the direction of the Board of Directors, (ii) otherwise
properly brought before the meeting by or at the direction of the Board of
Directors or (iii) otherwise properly brought before the annual meeting by a
shareholder. In addition to any other applicable requirements, for business to
be properly brought before a meeting by a shareholder, the shareholder must have
given timely notice thereof in writing to the Secretary of the corporation. To
be timely, a share holder's notice must be given, either by personal delivery or
by United States registered or certified mail, postage prepaid, to the Secretary
of the corporation not less than 120 and not more than 180 calendar days in
advance of the date on which the corporation's proxy statement was released to
shareholders in connection with the immediately preceding annual meeting. A
shareholder's notice to the Secretary shall set forth as to each matter the
shareholder proposes to bring before the annual meeting (i) a brief description
of the business desired to be brought before the annual meeting, including the
complete text of any resolutions to be presented at such meeting with respect to
such business, and the reasons for conducting such business at the annual
meeting, (ii) the name and address of record of the share holder proposing such
business, (iii) a representation that the shareholder is entitled to vote at
such meeting and intends to appear in person or by proxy at the meeting to
propose the business specified in the notice, (iv) the class and number of
shares of the corporation that are owned by the shareholder, (v) any material
interest of the share holder in such business and (vi) full particulars as to
the relationship, if any, of such shareholder to any other person that such
shareholder knows or has reason to believe intends to bring one or more other
items of business before the meeting. In the event that a shareholder attempts
to bring business before an annual meeting without complying with the foregoing
procedure, the chairman of the meeting may declare to the meeting that the
business was not properly brought before the meeting and, if he shall so
declare, such business shall not be transacted.

                                               - 4 -

                                    ARTICLE V

DIRECTORS

         1. All corporate powers shall be exercised by or under the authority
of, and the business and affairs shall be managed under the direction of, the
Board of Directors, subject to any limitation set forth in the Articles of
Incorporation.

         2.  The Board shall consist of not less than nine or
more than fifteen members.

         3. The Board of Directors shall consist of ten mem bers. The terms of
office of the directors shall be stag gered and shall otherwise be determined,
as provided in these bylaws, subject to the Articles of Incorporation and
applicable laws. Such terms shall be divided into three groups, two of which
shall consist of three directors and the third of which shall consist of four
directors.

         4. The number of directors may at any time be increased or decreased,
within the variable range estab lished by the Articles of Incorporation and
these bylaws, by amendment of these bylaws. In case of any such increase the
Board shall have power to elect any additional director to hold office until the
next shareholders' meeting at which directors are elected. Any decrease in the
number of direc tors shall take effect at the time of such amendment only to the
extent that vacancies then exist; to the extent that such decrease exceeds the
number of such vacancies, the decrease shall not become effective, except as
further vacancies may thereafter occur by expiration of the term of directors at
the next shareholders' meeting at which direc tors are elected, or otherwise.

         5. If the office of any director becomes vacant, by reason of death,
resignation, increase in the number of directors or otherwise, the directors
remaining in office, although less than a quorum, may fill the vacancy by the
affirmative vote of a majority of such directors.

         6. The Board of Directors, at its first meeting after the annual
meeting of shareholders, shall choose a Chairman of the Board from among the
directors.

         7. Any director may resign at any time by delivering written notice of
his resignation to the Board of Directors or the Chairman of the Board. Any such
resignation shall take effect upon such delivery or at such later date as may be
specified therein. Any such notice to the Board may be addressed to it in care
of the Secretary.

                                      - 5 -

         8. The Chairman of the Board shall preside at meet ings of the Board of
Directors, and shall have the powers and duties usually and customarily
associated with the position of a non-executive Chairman of the Board.

         9. In case of the absence of the Chairman of the Board, the Chief
Executive Officer shall preside at meetings of the shareholders and of the Board
of Directors. He shall have such other powers and duties as may be delegated to
him by the Chairman of the Board.

                                  ARTICLE VI

COMMITTEES OF DIRECTORS

         There shall be an Executive Committee, an Audit and Ethics Committee, a
Compensation and Benefits Committee, a Finance Committee, a Nominating Committee
and a Pension Committee, and the Board of Directors may create one or more other
committees. Each committee of the Board of Directors shall consist of two or
more directors of the corporation who shall be appointed by, and shall serve at
the pleasure of, the Board. The Executive Committee, to the extent determined by
the Board but subject to limitations expressly prescribed by statute, shall have
and may exercise all the powers and authority of the Board in the management of
the business and affairs of the corporation. The Audit and Ethics Committee, the
Compensation and Benefits Committee, the Finance Committee, the Nominating
Committee and the Pension Committee and each such other committee shall have
such of the powers and authority of the Board as may be determined by the Board.
Each committee shall report its proceedings to the Board when required.
Provisions with respect to the Board of Directors which are applicable to
meetings, actions without meetings, notices and waivers of notice and quorum and
voting requirements shall also be applicable to each committee, except that a
quorum of the Executive Committee shall consist of one third of the number of
members of the Committee, three of whom are not employees of the Company or any
of its subsidiaries.

                                   ARTICLE VII

COMPENSATION OF DIRECTORS

         The Board of Directors may fix the compensation of the directors for
their services, which compensation may include an annual fee, a fixed sum and
expenses for attendance at regular or special meetings of the Board or any
committee thereof, pension benefits and such other amounts as the Board may
determine. Nothing herein contained shall be construed to preclude any director
from serving the

                                      - 6 -

corporation in any other capacity and receiving compensation
therefor.

                                  ARTICLE VIII

MEETINGS OF DIRECTORS;
  ACTION WITHOUT A MEETING

         1. Regular meetings of the Board of Directors may be held pursuant to
resolutions from time to time adopted by the Board, without further notice of
the date, time, place or purpose of the meeting.

         2. Special meetings of the Board of Directors may be called by the
Chairman of the Board on at least 24 hours' notice to each director of the date,
time and place thereof, and shall be called by the Chairman of the Board or by
the Secretary on like notice on the request in writing of a majority of the
total number of directors in office at the time of such request. Except as may
be otherwise required by the Articles of Incorporation or these bylaws, the pur
pose or purposes of any such special meeting need not be stated in such notice.

         3. The Board of Directors may hold its meetings, have one or more
offices and, subject to the laws of the Common wealth of Virginia, keep the
share transfer books and other books and records of the corporation, within or
without said Commonwealth, at such place or places as it may from time to time
determine.

         4. At each meeting of the Board of Directors the presence of a majority
of the total number of directors in office immediately before the meeting begins
shall be necessary and sufficient to constitute a quorum for the transaction of
business, and, except as otherwise provided by the Articles of Incorporation or
these bylaws, if a quorum shall be present the affirmative vote of a majority of
the directors present shall be the act of the Board.

         5. Any action required or permitted to be taken at any meeting of the
Board of Directors may be taken without a meeting if one or more written
consents stating the action taken, signed by each director either before or
after the action is taken, are included in the minutes or filed with the
corporate records. Any or all directors may participate in any regular or
special meeting of the Board, or conduct such meeting through the use of, any
means of communication by which all directors participating may simultaneously
hear each other, and a director participating in a meeting by this means shall
be deemed to be present in person at such meeting.

                                      - 7 -

                                   ARTICLE IX

OFFICERS

         1. The officers of the corporation shall be chosen by the Board of
Directors and shall be a Chief Executive Offi cer, a President, one or more Vice
Presidents, a General Counsel, a Treasurer and a Secretary. The Board may also
appoint a Controller and one or more Executive Vice Presi dents, Senior Vice
Presidents, Assistant Treasurers, Assis tant Controllers and Assistant
Secretaries, and such other officers as it may deem necessary or advisable. Any
number of offices may be held by the same person. The Board may authorize an
officer to appoint one or more other officers or assistant officers. The
officers shall hold their offices for such terms and shall exercise such powers
and perform such duties as shall be prescribed from time to time by the Board or
by direction of an officer authorized by the Board to prescribe duties of other
officers.

         2. The Board of Directors, at its first meeting after the annual
meeting of shareholders, shall choose the offi cers, who need not be members of
the Board.

         3.  The salaries of all officers of the corporation shall be fixed by
the Board of Directors, or in such manner as the Board may prescribe.

         4. The officers of the corporation shall hold office until their
successors are chosen and qualified. Any offi cer may at any time be removed by
the Board of Directors or, in the case of an officer appointed by another
officer as provided in these bylaws, by such other officer. If the office of any
officer becomes vacant for any reason, the vacancy may be filled by the Board
or, in the case of an officer so appointed, by such other officer.

         5. Any officer may resign at any time by delivering notice of his
resignation to the Board of Directors or the Chairman of the Board. Any such
resignation may be effec tive when the notice is delivered or at such later date
as may be specified therein if the corporation accepts such later date. Any such
notice to the Board shall be addressed to it in care of the Chairman of the
Board or the Secretary.

                                      - 8 -

                                    ARTICLE X

CHIEF EXECUTIVE OFFICER

         Subject to the supervision and direction of the Board of Directors, the
Chief Executive Officer shall be responsi ble for managing the affairs of the
corporation and shall preside at meetings of the shareholders. The Chief
Executive Officer shall have supervision and direction of all of the other
officers of the corporation.

                                   ARTICLE XI

PRESIDENT

         The President shall be the chief operating officer of the corporation
and shall perform such duties as may be prescribed by these bylaws, or by the
Chief Executive Offi cer. The President shall, in case of the absence or
inability of the Chief Executive Officer to act, have the powers and perform
the duties of the Chief Executive Officer.

                                   ARTICLE XII

EXECUTIVE VICE PRESIDENTS,
  SENIOR VICE PRESIDENTS
  AND VICE PRESIDENTS

         1. The Executive Vice Presidents, the Senior Vice Presidents and the
Vice Presidents shall have such powers and duties as may be delegated to them by
the Chief Execu tive Officer.

                                  ARTICLE XIII

GENERAL COUNSEL

         The General Counsel shall be the chief legal officer of the corporation
and the head of its legal department. He shall, in general, perform the duties
incident to the office of General Counsel and shall have such other powers and
duties as may be delegated to him by the Chief Executive Officer.

                                      - 9 -

                                   ARTICLE XIV

TREASURER

         The Treasurer shall be responsible for the care and custody of all the
funds and securities of the corporation. The Treasurer shall render an account
of the financial condition and operations of the corporation to the Board of
Directors or the Chief Executive Officer as often as the Board or the Chief
Executive Officer shall require. He or she shall have such other powers and
duties as may be dele gated to him or her by the Chief Executive Officer.

                                   ARTICLE XV

CONTROLLER

         The Controller shall maintain adequate records of all assets,
liabilities and transactions of the corporation, and shall see that adequate
audits thereof are currently and regularly made. The Controller shall disburse
the funds of the corporation in payment of the just obligations of the
corporation, or as may be ordered by the Board of Directors, taking proper
vouchers for such disbursements. The Control ler shall have such other powers
and duties as may be dele gated to the Controller by the Chief Executive
Officer.

                                   ARTICLE XVI

SECRETARY

         The Secretary shall act as custodian of the minutes of all meetings of
the Board of Directors and of the share holders and of the committees of the
Board of Directors. He or she shall attend to the giving and serving of all
notices of the corporation, and the Secretary or any Assistant Secretary shall
attest the seal of the corporation upon all contracts and instruments executed
under such seal. He or she shall also be custodian of such other books and
records as the Board or the Chief Executive Officer may direct. He or she shall
have such other powers and duties as may be delegated to him or her by the Chief
Executive Officer.

                                  ARTICLE XVII

TRANSFER AGENTS AND REGISTRARS;
  CERTIFICATES OF STOCK

         1. The Board of Directors may appoint one or more transfer agents and
one or more registrars for shares of capital stock of the corporation and may
require all cer-

                                    -10-

tificates for such shares, or for options, warrants or other rights in respect
thereof, to be countersigned on behalf of the corporation by any such transfer
agent or by any such registrar.

         2. The certificates for shares of the corporation shall be numbered and
shall be entered on the books of the corporation as they are issued. Each share
certificate shall state on its face the name of the corporation and the fact
that it is organized under the laws of the Commonwealth of Virginia, the name of
the person to whom such certificate is issued and the number and class of shares
and the designation of the series, if any, represented by such certificate and
shall be signed by the Chief Executive Officer, the President, an Executive or
Senior Vice Presi dent or a Vice President and by the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary. Any and all signatures on
such certificates, including signatures of officers, transfer agents and
registrars may be facsimile. In case any officer who has signed or whose
facsimile signa ture has been placed on any such certificate shall have ceased
to be such officer before such certificate is issued, then, unless the Board of
Directors shall otherwise deter mine and cause notification thereof to be given
to such transfer agent and registrar, such certificate shall never theless be
valid and may be issued by the corporation (and by its transfer agent) and
registered by its registrar with the same effect as if he were such officer at
the date of issue.

                                  ARTICLE XVIII

TRANSFERS OF STOCK

         1. All transfers of shares of the corporation shall be made on the
books of the corporation by the registered holders of such shares in person or
by their attorneys lawfully constituted in writing, or by their legal
representatives.

         2.  Certificates for shares of stock shall be surrendered and canceled
at the time of transfer.

         3. To the extent that any provision of the Amended and Restated Rights
Agreement dated as of January 19, 1996, between the corporation and Chemical
Bank, as Rights Agent (the "Rights Agreement"), or the Amendment thereto, dated
as of July 31, 1997, between the corporation and BankBoston, N.A., as successor
rights agent, imposes a restriction on the transfer of any securities of the
corporation, includ ing, without limitation, the Rights, as defined in the
Amended and Restated Rights Agreement, such restriction is hereby authorized.

                                   - 11 -

         4. Article 14.1 of Chapter 9 of Title 13.1 of the Code of Virginia,
titled "Control Share Acquisitions," shall not apply to acquisitions of shares
of the corporation.

                                   ARTICLE XIX

FIXING RECORD DATE

         In order to make a determination of shareholders for any purpose,
including those who are entitled to notice of and to vote at any meeting of
shareholders or any adjourn ment thereof, or entitled to express consent in
writing to any corporate action without a meeting, or entitled to receive
payment of any dividend or other distribution or allotment of any rights, or
entitled to exercise any rights in respect of any change, conversion or exchange
of stock, the Board of Directors may fix in advance a record date which shall
not be more than 70 days before the meeting or other action requiring such
determination. Except as otherwise expressly prescribed by statute, only
shareholders of record on the date so fixed shall be entitled to such notice of,
and to vote at, such meeting and any adjournment thereof, or entitled to express
such consent, or entitled to receive payment of such dividend or other
distribution or allotment of rights, or entitled to exercise such rights in
respect of change, conversion or exchange, or to take such other action, as the
case may be, notwithstanding any trans fer of shares on the share transfer books
of the corporation after any such record date fixed as aforesaid.

                                   ARTICLE XX

REGISTERED SHAREHOLDERS

         The corporation shall be entitled to treat the holder of record of any
share or shares as the holder in fact thereof and, accordingly, shall not be
bound to recognize any equitable or other claim to or interest in such share on
the part of any other person, whether or not it shall have express or other
notice thereof, save as expressly provided by the laws of the Commonwealth of
Virginia.

                                   ARTICLE XXI

CHECKS

         All checks, drafts and other orders for the payment of money and all
promissory notes and other evidences of indebtedness of the corporation shall be
signed in such manner as may be determined by the Board of Directors.

                                     - 12 -

                                  ARTICLE XXII

FISCAL YEAR

         The fiscal year of the corporation shall end on December 31 of each
year.

                                  ARTICLE XXIII

NOTICES AND WAIVER

         1. Whenever by statute, the Articles of Incorporation or these bylaws
it is provided that notice shall be given to any director or shareholder, such
provision shall not be construed to require personal notice, but such notice may
be given in writing, by mail, by depositing the same in the United States mail,
postage prepaid, directed to such shareholder or director at his address as it
appears on the records of the corporation, or, in default of other address, to
such director or shareholder at the registered office of the corporation in the
Commonwealth of Virginia, and, except for any meeting of directors to be held
within 48 hours after such notice, shall be deemed to be given at the time when
the same shall be thus deposited. Notice of special meetings of the Board of
Directors may also be given to any director by telephone, by telex or telecopy,
or by telegraph or cable, and in case of notice so given otherwise than by
telephone, the notice shall be deemed to be given at the time such notice,
addressed to such director at the address hereinabove provided, shall be
acknowledged by reply telex or telecopy or shall be transmitted or delivered to
and accepted by an authorized telegraph or cable office, as the case may be.

         2. Whenever by statute, the Articles of Incorporation or these bylaws a
notice is required to be given, a written waiver thereof, signed by the person
entitled to notice, whether before or after the time stated therein, and filed
with the corporate records or the minutes of the meeting, shall be equivalent to
notice. Attendance of any share holder or director at any meeting thereof shall
constitute a waiver of notice of such meeting by such shareholder or director,
as the case may be, except as otherwise provided by statute.

                                  ARTICLE XXIV

BYLAWS

         The Board of Directors shall have the power to make, amend or repeal
bylaws of the corporation.

                                     - 13 -

 

                                                                              1

                                                                Exhibit 10(e)(i)

                              THE PITTSTON COMPANY
                            PENSION EQUALIZATION PLAN
                             AS AMENDED AND RESTATED

                        EFFECTIVE AS OF DECEMBER 1, 1997

                                  Introduction

                  In August 1985 the Board of Directors of The Pittston Company
(the "Company") adopted a Pension Equalization Plan (the "Equalization Plan") to
assure that the aggregate pension benefits provided to employees covered by the
Pension-Retirement Plan of The Pittston Company and Its Subsidiaries (which
Plan, as now in effect and as hereafter amended, is hereinafter referred to as
the "Pension Plan") would not be reduced as a result of limitations imposed
under Section 415 of the Internal Revenue Code of 1986, as amended (the "Code").
At its meeting in July 1989, the Board determined that the Equalization Plan
should be amended so as to provide, among other things, for the payment
thereunder of additional amounts equal to the benefits that would have been
payable under the Pension Plan in the absence of the then applicable annual
limit on compensation under Section 401(a)(17) of the Code. Pursuant to the
authority under the Equalization Plan, on July 7, 1994, the Pension Committee
further amended

                                                                      2

the Equalization Plan (i) to reflect the lower annual limit imposed by the 1993
amendment of such Section 401(a)(17), and (ii) to assure that such aggregate
pension benefits will not be adversely affected by deferrals made pursuant to
the Key Employees' Deferred Compensation Program of The Pittston Company as
originally approved by the shareholders of the Company on May 1, 1992, or as
subsequently amended (the "Deferral Program"). On September 16, 1994, the
Equalization Plan was further amended so as to provide additional assurance to
Participants and their beneficiaries that benefits under the Equalization Plan
will be paid to them in the event of a Change in Control (as defined in the
trust agreement dated as of December 1, 1997 between the Company and The Chase
Manhattan Bank (National Association) as trustee (the "Trust Agreement")). On
December 1, 1997, the Pension Committee further amended the Equalization Plan to
add a lump-sum benefit payment option and to reflect the fact that benefits
under such plan will be paid from the trust established and made irrevocable
pursuant to the Trust Agreement. As a result of such amendment, the Equalization
Plan will read in its entirety as follows:

                         1. Definitions. As used herein:

                  "Benefit Limitations" means the limitations, if any, on
benefits payable to or in respect of an

                                                                          3

         employee under the Pension Plan (i) pursuant to Section 415 or Section
         401(a)(17) of the Code and any regulations promulgated with respect
         thereto or (ii) resulting from any exclusion from Basic Earnings (as
         defined in the Pension Plan) attributable to the deferral, pursuant to
         the Deferral Program, by such employee of Cash Incentive Payments,
         Salary or Compensation (as each such term is defined in the Deferral
         Program) otherwise payable currently.

                  "Participant" means any employee referred to in
         Section 2 hereof.

                  "Participating Company" means the Company and any subsidiary
         of the Company which is a "participating company" under the Pension
         Plan, unless the Board shall determine that such subsidiary shall not
         be a Participating Company hereunder.

                  Except as herein otherwise provided, terms defined in the
Pension Plan are used herein with the meanings ascribed to them in said Plan.

                  2.  Coverage.  The Equalization Plan shall apply to or in
respect of each employee of any Participating Company whose benefits under
the Pension Plan are limited BY the Benefit Limitations.

                                                                              4

                  3. Benefits. Supplementing the benefits provided by the
Pension Plan and subject to all terms and conditions thereof not inconsistent
herewith, each Participant and his beneficiary or beneficiaries shall be paid
under the Equalization Plan such additional amounts as are equal to the benefits
that would have been payable under the Pension Plan in the absence of the
Benefit Limitations applicable to such Participant.

                  Benefits payable to any person under this Section 3 shall be
payable at the same time and in the same manner as the benefits payable to such
person under the Pension Plan; provided, however that, in accordance with the
following sentence, any Participant (employed by the Company on either a
full-time or part-time basis as of December 1, 1997) or, in the event of the
Participant's death, his or her beneficiary, entitled to benefits hereunder may
elect to receive the Actuarial Equivalent of the benefits due under this
Equalization Plan in a lump sum. In order to be effective, such election must be
filed with the Administrative Committee at least one year prior to the later of
(i) the effective date of retirement under the Pension Plan or (ii) September 1,
1999. In determining the amount of the lump-sum benefit to be paid, Actuarial
Equivalent shall have the same meaning as under the Pension

                                                                          5

Plan; provided, however, the interest rate used shall be the annual rate on
30-year Treasury Securities as published by the Commissioner of the Treasury for
the month prior to the month in which the distribution is made and the mortality
table shall be the 1983 Group Annuity Mortality Table with a 50% blending of
male and female rates.

                  Unless the Administrative Committee otherwise determines upon
request of a Participant, the beneficiary or beneficiaries of such Participant
under the Pension Plan shall also be his beneficiary or beneficiaries under the
Equalization Plan.

                  4. Administration. The Equalization Plan shall be administered
by the Administrative Committee (subject to such directions as the Pension
Committee may determine to be appropriate) substantially in accordance with the
comparable procedures and rules applicable to the Administrative Committee which
administers the Pension Plan, including establishing and maintaining a claims
procedure (similar to the claims procedure under the Pension Plan) pursuant to
which any Participant or beneficiary under the Equalization Plan whose claim for
benefits under the Equalization Plan has been denied shall be given (i) notice
in writing of such denial, including the reasons therefor, and (ii) a reasonable
opportunity to have a full review of such denial.

                                                                            6

Notwithstanding any other provision of the Equalization Plan the Administrative
Committee shall have full authority (i) in its sole discretion to determine the
amounts payable under the Equalization Plan and the time of any such payments so
as to conform with the intent as well as the terms of the Equalization Plan,
(ii) to construe any of the provisions of the Equalization Plan and (iii) to
adopt rules and regulations for the implementation of such provisions.

           5. Amendment and Termination. The Equalization Plan may at any time
be amended or terminated by the Board or the Pension Committee, provided that no
such amendment or termination of the Equalization Plan shall adversely affect
the benefits accrued or payable hereunder or under the Trust Agreement on
account of any Participant (or any beneficiary) in respect of service rendered
prior to such amendment or termination.

                  6.  Assignability.  No right to payment or any other interest
under the Equalization Plan shall be assignable or subject to attachment,
execution or levy of any kind.

                  7.  No Employment Rights.  Nothing in the Equalization Plan
shall be construed as giving any Participant the right to be retained in-the
service of any Participating Company or as interfering with the right of

                                                                              7

any such Company to discharge any Participant at any time without regard to the
effect which such discharge shall have upon his rights or potential rights, if
any, under the Equalization Plan.

                  8. Funding. The obligations of any Participating Company under
the Equalization Plan shall not be funded in any manner for purposes of the Code
or ERISA. However, it is intended that benefits will be paid from the trust
established pursuant to the Trust Agreement. The establishment and funding of
the trust established under the Trust Agreement shall not be deemed to relieve
the Company of its obligations under the Equalization Plan to Participants and
beneficiaries except pro tanto to the extent that amounts in respect thereof are
paid under such Trust Agreement to such Participants and beneficiaries. The
establishment and funding of such trust shall not of itself be deemed to
increase the amount of benefits to which any Participant or beneficiary shall
have become entitled under the Equalization Plan.

                  9.  Enforceability.  In addition to all other rights under
applicable law, any individual who shall be a Participant or beneficiary or
the trustee under the Trust Agreement shall have the right to bring an action,
either individually or on behalf of all Participants and

                                                                          8

beneficiaries, to enforce the provisions of this Equalization Plan and/or the
Trust Agreement (including, but not limited to, enforcement of the funding
required under the Trust Agreement) by seeking injunctive relief and/or damages,
and the Company shall be obligated to pay or reimburse each such Participant or
beneficiary who shall prevail, or the Trustee under the Trust Agreement, whether
or not it prevails, in whole or in substantial part, for all reasonable
expenses, including attorney's fees, in connection with such action.

                  10. Agreements with Participants. The Company shall enter into
an agreement with each Participant incorporating the provisions of the
Equalization Plan and containing such other provisions, consistent with the
Equalization Plan, as may be mutually acceptable.

                  11. Successors. The Equalization Plan shall inure to the
benefit of and be binding upon the Company and its successors (including,
without limitation, each person or group referred to in the definition of Change
in Control (in the Trust Agreement) and each affiliate of such person or group).
Each such successor shall be obligated to enter into an agreement with each
Participant, in form and substance satisfactory to such Participant, by which
such successor shall expressly assume and agree to perform its

                                                                    9

obligations under the Equalization Plan in the same manner and to the same
extent as the Company would be required to perform if no succession had taken
place. The Company shall cause each such successor to comply with its
obligations to enter into such agreement.

                  12.  Governing Law.  This Equalization Plan and
all actions taken hereunder shall be governed by and construed in accordance
with the laws of the Commonwealth of Virginia.

As amended December 1, 1997
Effective as of May 1, 1992

 

                                                              Exhibit 10(e)(ii)

                           Amended and Restated Trust
                       under the Pension Equalization Plan
                      and Certain Contractual Arrangements
                             of The Pittston Company

                   AMENDED AND RESTATED TRUST AGREEMENT ("Trust Agreement") made
as of this 1st day of December, 1997, by and between THE PITTSTON COMPANY (the
"Company") and THE CHASE MANHATTAN BANK, as Trustee (the "Trustee").

                  WHEREAS, the Company (i) has entered into, and from time to
time may enter into, contractual arrangements with certain individuals that have
been designated by the Company to receive supplemental pension payments funded
through the trust established pursuant to this Trust Agreement (collectively,
the "Contracts") and (ii) adopted The Pittston Company Pension Equalization Plan
(the "Plan"); and

                  WHEREAS, the Company has incurred or expects to incur
liability under the terms of the Plan and the Contracts with respect to the
individuals participating in the Plan or covered by the Contracts; and

                  WHEREAS, the Company has previously entered into a Trust
Agreement dated September 16, 1994, with the Trustee for the purpose of
establishing a trust (the "Trust") and

 

                                                                          2

contributing to the Trust assets that shall be held therein, subject to the
claims of the Company's creditors in the event of the Company's Insolvency (as
hereinafter defined) until paid to Participants and their Beneficiaries (as
hereinafter defined) in such manner and at such times as specified in the Plan
and/or Contracts; and

                  WHEREAS, the Company and the Trustee wish to amend and restate
said Trust Agreement to accelerate the level of contributions thereto and to
make certain other changes therein; and

                  WHEREAS, it is the intention of the parties that the Trust
shall constitute an unfunded arrangement and shall not affect the status of the
Plan as an unfunded plan maintained for the purpose of providing deferred
compensation for a select group of management or highly compensated employees
for purposes of Title I of the Employee Retirement Income Security Act of 1974;
and

                  WHEREAS, it is the intention of the Company to make
contributions to the Trust to provide itself with a source of funds to assist it
in the meeting of its liabilities under the Contracts and/or the Plan.

                  NOW, THEREFORE, the parties do hereby agree that the Trust
shall be comprised, held and disposed of as follows:

 

                                                                          3

                  Section 1.  Definitions.  As used in this Trust
Agreement, the following words and terms shall have the
meanings specified below:

                  "Beneficiary" means the beneficiary or beneficiaries last
         designated by the Participant in writing under the Plan or Contracts.
         In the absence of an effective designation or if the final surviving
         designated beneficiary has predeceased the Participant, the Beneficiary
         shall be the Participant's estate. In the event the Participant is
         survived by a Beneficiary who dies after payments to the Beneficiary
         have commenced but before receiving all amounts due him or her under
         the Plan or Contract, any remaining amounts shall be paid to an
         alternate beneficiary designated by the Participant or, in the absence
         of an alternative surviving Beneficiary, to the estate of the last
         surviving Beneficiary.

                  "Change in Control" shall be deemed to occur (a) upon the
         approval of the shareholders of the Company (or if such approval is not
         required, the approval of the board of directors of the Company (the
         "Board") of (i) any consolidation or merger of the Company in which the
         Company is not the continuing or surviving corporation or pursuant to
         which the shares

 

                                                                        4

         of all classes of the Company's common stock ("Common Stock") would be
         converted into cash, securities or other property other than a
         consolidation or merger in which holders of the total voting power in
         the election of directors of the Company of all classes of Common Stock
         outstanding (exclusive of shares held by the Company's affiliates) (the
         "Total Voting Power") immediately prior to the consolidation or merger
         will have the same proportionate ownership of the total voting power in
         the election of directors of the surviving corporation immediately
         after the consolidation or merger, or (ii) any sale, lease, exchange or
         other transfer (in one transaction or a series of transactions) of all
         or substantially all the assets of the Company, (b) when any "person"
         (as defined in Section 13(d) of the Securities Exchange Act of 1934, as
         amended (the "Act")) other than the Company, its affiliates or an
         employee benefit plan or trust maintained by the Company or its
         affiliates, shall become the "beneficial owner" (as defined in Rule
         13d-3 under the Act), directly or indirectly, of more than 20% of the
         Total Voting Power, or (c) if at any time during a period of two
         consecutive years, individuals who at the beginning of such period

 

                                                                               5

         constituted the Board shall cease for any reason to constitute at least
         a majority thereof, unless the election by the Company's shareholders
         of each new director during such two-year period was approved by a vote
         of at least two-thirds of the directors then still in office who were
         directors at the beginning of such two-year period. A Change in Control
         shall be deemed to take place upon the first to occur of the events
         specified in the foregoing clauses (a), (b) and (c) but in no event
         shall the occurrence of any Change in Control effect the
         responsibilities of the Trustee under this Agreement until personnel of
         the Trustee with responsibility for the administration of the Trust
         have actual knowledge of a current report or statement to the effect
         that a Change in Control has occurred.

                  "Insolvent" means (a) the inability of the Company to pay its
         debts as they become due or (b) the Company being subject to a pending
         proceeding as a debtor under the United States Bankruptcy Code.

                  "Participant" means an individual who is entitled
         to a benefit under the Plan or who is a party to one of
         the Contracts.

 

                                                                           6

                  Section 2.  Establishment Of Trust.

                  (a)  The Company has deposited with the Trustee in
trust the sum of $1,000.00 which became the principal of the Trust to be held,
administered and disposed of by the Trustee as provided in this Trust Agreement,
as amended and restated.

                  (b)  The Trust hereby established shall be
irrevocable on and after December 1, 1997.

                  (c) The Trust is intended to be a grantor trust, of which the
Company is the grantor, within the meaning of subpart E, part I, subchapter J,
chapter 1, subtitle A of the Internal Revenue Code of 1986, as amended, and
shall be construed accordingly.

                  (d) The principal of the Trust and any earnings thereon shall
be held separate and apart from other funds of Company and shall be used
exclusively for the uses and purposes of Participants and general creditors as
herein set forth. Participants and their Beneficiaries shall have no preferred
claim on, or any beneficial ownership interest in, any assets of the Trust. Any
rights created under the Plan, Contracts and this Trust Agreement shall be
unsecured contractual rights of Participants and their Beneficiaries against the
Company. Any assets held by the Trust will be subject to the claims of the
Company's general creditors

 

                                                                        7

under federal and state law in the event the Company becomes
Insolvent.

                  (e) The Company, in its sole discretion, may at any time, or
from time to time, make additional deposits of cash or other property, which
property shall be acceptable to the Trustee, in trust with the Trustee to
augment the principal to be held, administered and disposed of by the Trustee as
provided in this Trust Agreement. Except as provided in paragraph (f) below,
neither the Trustee nor any Participant or Beneficiary under the Plan or
Contracts shall have any right hereunder to compel such additional deposits.

                  (f) Anything in this Agreement notwithstanding, by September
1, 1999, or if earlier, upon a Change in Control, the Company shall make
irrevocable contributions to the Trust in amounts so that the Trust will have
sufficient assets to pay each Participant or Beneficiary the benefits to which
they would be entitled pursuant to the terms of the Contracts and Plan as in
effect on December 31, 1998, or the date on which the Change in Control
occurred, as applicable. The amount of any such contributions shall be
determined by William M. Mercer, Incorporated (or another nationally recognized
firm of actuaries selected by the Company) as the amount needed to provide all
"Projected Benefit Obligations" (as defined herein) under the Plan and
Contracts. Projected

 

                                                                          8

Benefit Obligations shall be the actuarial present value as of a specified date
of all benefits under the Plan and Contracts based on (a) service to the date of
determination, (b) estimated future compensation levels and (c) the actuarial
assumptions used under the Pension-Retirement Plan of The Pittston Company and
Its Subsidiaries for funding purposes (including the interest rate, mortality
table and projected salary increases used therein). Projected Benefit Obligation
shall reflect the lump-sum benefit option available under the Plan. Thereafter,
within 180 days after the end of each Plan Year or within 90 days following a
Change in Control, whichever occurs first, the Company shall make an irrevocable
contribution to the Trust in an amount so that the Trust will have sufficient
assets to provide all Projected Benefit Obligations determined as in effect at
the end of such Plan Year or on the date the Change in Control occurred, as
applicable; provided, however, that in the absence of a Change in Control, no
such contributions shall be made without the prior approval of the Company's
Pension Committee.

 

                                                                            9

                  Section 3.  Payments to Participants and Their
Beneficiaries.

                  (a) The Company shall deliver periodically to the Trustee a
schedule (the "Payment Schedule") that indicates the amounts payable in respect
of each Participant (and his or her Beneficiaries) and provides a formula or
other instructions acceptable to the Trustee for determining the amounts so
payable, the form in which such amount is to be paid (as provided for or
available under the Contracts or Plan) and the time of commencement of payment
of such amounts. In the event the Company fails to provide a Payment Schedule to
the Trustee, the Trustee may demand such Payment Schedule and the Company shall
promptly provide such Payment Schedule to the Trustee. Except as otherwise
provided herein, the Trustee shall make payments to the Participants and their
Beneficiaries in accordance with such Payment Schedule. The Payment Schedule may
periodically be amended by the Company to reflect additional retirements of
Participants, changes in their marital status, terminations as a result of
disability and such other matters as may result in a change in the form or
amount of benefits payable to Participants. The Trustee shall make provision for
reporting and withholding of any federal, state or local taxes that may be
required to be withheld with respect to

 

                                                                            10

the payment of benefits pursuant to the terms of the Plan and/or Contracts and
shall pay amounts withheld to the appropriate taxing authorities or determine
that such amounts have been reported, withheld and paid by the Company.

                  (b) The entitlement of a Participant or Beneficiary to
benefits under the Plan or Contracts shall be determined by the Company or such
party as it shall designate under the Plan or Contracts, and any claim for such
benefits shall be considered and reviewed under the procedures set out in the
Plan or Contracts.

                  (c) The Company may make payment of benefits directly to
Participants or their Beneficiaries under the Plan or Contracts as they become
due under the terms of the Plan or Contracts. The Company shall notify the
Trustee of its decision to make payment of benefits directly prior to the time
amounts are payable to Participants or their Beneficiaries, and a revised
Payment Schedule reflecting such direct payments shall promptly be delivered by
the Company to the Trustee. In addition, if the principal of the Trust, and any
earnings thereon, are not sufficient to make payments of benefits in accordance
with the terms of the Plan and Contracts, the Company shall make the balance of
each such payment as it falls due. The Trustee shall

 

                                                                             11

notify the Company when principal and earnings are not sufficient. The
establishment and funding of the Trust shall not relieve the Company from its
obligations to provide the benefits under the Plan or the Contracts except pro
tanto to the extent that amounts are paid to Participants and Beneficiaries from
the Trust.

                  Section 4.  Trustee Responsibility Regarding
Payments to Trust Beneficiary When Company Is Insolvent.

                  (a) The Trustee shall cease payment of benefits to
Participants and their Beneficiaries if the Company is Insolvent.

                  (b) At all times during the continuance of the Trust, the
principal and income of the Trust shall be subject to claims of general
creditors of the Company under federal and state law as set forth below:

                  (1) The Board of Directors and the Chief Executive Officer of
the Company shall have the duty to inform the Trustee in writing of the
Company's Insolvency. If a person claiming to be a creditor of the Company
alleges in writing to the Trustee that the Company has become Insolvent, the
Trustee shall determine whether the Company is Insolvent and, pending such
determination, the Trustee shall discontinue payment of benefits to Participants
or their Beneficiaries.

 

                                                                           12

                  (2) Unless the Trustee has actual knowledge of the Company's
Insolvency, or has received notice from the Company or a person claiming to be a
creditor alleging that the Company is Insolvent, the Trustee shall have no duty
to inquire whether the Company is Insolvent. The Trustee may in all events rely
on such evidence concerning the Company's solvency as may be furnished to the
Trustee and that provides the Trustee with a reasonable basis for making a
determination concerning the Company's solvency.

                  (3) If at any time the Trustee has determined that the Company
is Insolvent, the Trustee shall discontinue payments to Participants or their
Beneficiaries and shall hold the assets of the Trust for the benefit of the
Company's general creditors. Nothing in this Trust Agreement shall in any way
diminish any rights of Participants or their Beneficiaries to pursue their
rights as general creditors of the Company with respect to benefits due under
the Plan, Contracts or otherwise.

                  (4) The Trustee shall resume the payment of benefits to
Participants or their Beneficiaries in accordance with Section 3 of this Trust
Agreement only after the Trustee has determined that the Company is not
Insolvent (or is no longer Insolvent).

 

                                                                             13

                  (c) Provided that there are sufficient assets, if the Trustee
discontinues the payment of benefits from the Trust pursuant to paragraph (b) of
Section 4 hereof and subsequently resumes such payments, the first payment
following such discontinuance shall include the aggregate amount of all payments
due to Participants or their Beneficiaries under the terms of the Plan and
Contracts for the period of such discontinuance, less the aggregate amount of
any payments made to such Participants or their Beneficiaries by the Company in
lieu of the payments provided for hereunder during any such period of
discontinuance, plus interest at the rate provided by the Trustee to its most
favored customers.

                  Section 5.  Payments to Company.

                  The Company shall have no right or power to direct
the Trustee to return to the Company or to divert to others any of the Trust
assets before all payment of benefits have been made to Participants and their
Beneficiaries pursuant to the terms of the Plan and Contracts. Upon termination
of the Trust in accordance with Section 13, all assets remaining in the Trust
shall be returned to the Company.

                  Section 6.  Investment Authority.

                  (a)  The Trustee shall invest the assets of the
Trust in the manner directed by the Company which directions

 

                                                                            14

shall be in strict conformity with the standards set forth in paragraph (a) of
Section 9. The Company agrees to indemnify the Trustee for, and to hold it
harmless against, any and all liabilities, losses, costs or expenses (including
reasonable legal fees and expenses) of whatsoever kind and nature which may be
imposed on, incurred by, or asserted against the Trustee at any time by reason
of actions taken in accordance with such directions by the Company or omitted
because no such directions are given, including, without limitation, any
acquisition, retention or disposition of any stock or other securities of the
Company.

                  (b) To the extent directed by the Company, the Trustee shall
have the following investment powers:

                  (i) To purchase or subscribe for any property whatsoever
         (including stock or rights to acquire stock) and to retain in trust
         such securities or other property. The Trustee may not invest in
         securities (including stock or rights to acquire stock) or obligations
         issued by the Company.

                  (ii) To sell for cash or on credit, to grant options, convert,
         redeem, exchange for other securities or other property, or otherwise
         to dispose of any securities or other property at any time held.

 

                                                                        15

                  (iii) To exercise any conversion privilege and/or subscription
         right available in connection with any securities or other property at
         any time held; to oppose or to consent to the reorganization,
         consolidation, merger or readjustment of the finances of any
         corporation, company or association or to the sale, mortgage, pledge or
         lease of the property of any corporation, company or association any of
         the securities of which may at any time be held and to do any act with
         reference thereto, including the exercise of options, the making of
         agreements or subscriptions, which may be deemed necessary or advisable
         in connection therewith; and to hold and retain any securities or other
         property so acquired.

                  (iv) To exercise, personally or by general or by limited power
         of attorney, any right, including the right to vote, appurtenant to any
         securities or other property held at any time.

                  (v)  To hold part or all of the Trust uninvested.

                  (vi)  To register any securities held hereunder in
         the name of the Trustee or in the name of a nominee with or without the
         addition of words indicating that such securities are held in a
         fiduciary capacity, and to hold any securities in bearer form.

 

                                                                        16

All rights associated with assets of the Trust shall be exercised by the Trustee
or the person designated by the Trustee. The Company shall have the right in its
sole discretion at any time, and from time to time, to substitute assets of
equal fair market value for any asset held by the Trust. This right is
exercisable by the Company in a nonfiduciary capacity without the approval or
consent of any person in a fiduciary capacity.

                  Section 7.  Disposition of Income.

                  During the term of the Trust, all income received
by the Trust, net of expenses and taxes, shall be
accumulated and reinvested.

                  Section 8.  Accounting by Trustee.

                  The Trustee shall keep accurate and detailed
records of all investments, receipts, disbursements and other transactions
required to be made, including such specific records as shall be agreed upon in
writing between the Company and the Trustee. Within 90 days following the close
of each calendar year and within 90 days after the removal or resignation of the
Trustee, the Trustee shall deliver to the Company a written account of its
administration of the Trust during such year or during the period from the close
of the last preceding year to the date of such removal or resignation, setting
forth all

 

                                                                     17

investments, receipts, disbursements and other transactions effected by it,
including a description of all securities and investments purchased and sold
with the cost or net proceeds of such purchases or sales (accrued interest paid
or receivable being shown separately), and showing all cash, securities and
other property held in the Trust at the end of such year or as of the date of
such removal or resignation, as the case may be. Unless protested by written
notice to the Trustee within 120 days of receipt thereof by the Company, any
such written account shall be deemed accepted and approved by the Company, and
the Trustee shall be relieved and discharged, as if such account had been
settled and allowed by a judgment or decree of a court of competent
jurisdiction, in an action or proceeding in which the Company and all persons
having a beneficial interest in the Trust were parties.

                  Nothing contained in this Agreement shall deprive the Trustee
or the Company of the right to have a judicial settlement of its accounts. In
any proceeding for a judicial settlement of the Trustee's accounts, or for
instructions in connection with the Trust, the only necessary party thereto in
addition to the Trustee shall be the Company. If the Trustee or the Company so
elects, it

 

                                                                       18

may bring in as a defendant party or parties any other
person or persons.

                      Section 9. Responsibility of Trustee.

                 (a) The Trustee shall act with the care, skill,
prudence and diligence under the circumstances then prevailing that a prudent
person acting in like capacity and familiar with such matters would use in the
conduct of an enterprise of a like character and with like aims. In the event of
a dispute between the Company and a party (including a participant or
beneficiary under the Plan or the Trustee), the Trustee may apply to a court of
competent jurisdiction to resolve the dispute. The Trustee (or a Participant or
beneficiary) may also apply to a court of competent jurisdiction to enforce any
provision of this Trust Agreement, provided that notice is provided to the
Trustee in the case of an action brought by a Participant or beneficiary. Under
no circumstances shall the Trustee incur liability to any person for any
indirect, consequential or special damages (including, without limitation, lost
profits) of any form, whether or not foreseeable and regardless of the form of
the action in which such claim may be brought, with respect to the Trust or its
role as Trustee.

 

                                                                        19

                  (b) Whenever in the administration of the Trust a
certification is required to be given to the Trustee, or the Trustee shall deem
it necessary that a matter be proved prior to taking, suffering or omitting any
action hereunder, such certification shall be duly made and said matter may be
deemed to be conclusively proved by an instrument, signed in the name of the
Company, by its President, a Vice President or by any other person specified in
writing by the Company. The Company shall file with the Trustee a certified list
of the names and specimen signatures of the persons authorized to act for the
Company. The Trustee may rely on any such certification purporting to have been
signed by or on behalf of such person or persons that the Trustee believes in
good faith to have been signed thereby. The Trustee shall have no responsibility
for reasonably relying upon any certification believed by the Trustee in good
faith to have been so signed by a duly authorized officer or agent of the
Company.

                  (c) The Trustee may make any payment required to be made by it
hereunder by mailing its check in the amount hereof by first class mail in a
sealed envelope addressed to the person to whom such payment is to be made. The
Trustee shall not be required to make any investigation to determine the
identity or mailing address of any person entitled to

 

                                                                         20

benefits under this Agreement and shall be entitled to withhold making payments
until the identity and mailing addresses of persons entitled to benefits are
certified to it. In the event that any dispute shall arise as to the identity or
rights of persons entitled to benefits hereunder, the Trustee may withhold
payment of benefits until such dispute shall have been determined by arbitration
or by a court of competent jurisdiction or shall have been settled by written
stipulation of the parties concerned.

                  (d) If the Trustee undertakes or defends any litigation
arising in connection with the Trust, the Company agrees to indemnify the
Trustee against the Trustee's costs, expenses and liabilities (including,
without limitation, reasonable attorneys' fees and expenses) relating thereto
and to be primarily liable for such payments. If the Company does not pay such
costs, expenses and liabilities in a reasonably timely manner, the Trustee may
obtain payment from the Trust.

                  (e) The Trustee may consult with legal counsel (who may also
be counsel for the Company generally) with respect to any of its duties or
obligations hereunder.

                  (f) The Trustee may hire agents, accountants, actuaries, legal
counsel, investment advisors, financial consultants or other professionals to
assist it in

 

                                                                   21

performing any of its duties or obligations hereunder. To the extent such
expenses arise in the context of a dispute between the Company and the Trustee
concerning the funding of the Trust, the enforcement of any provision of this
Trust Agreement or the providing of the Payment Schedule described in Section 3,
the Company shall be responsible for payment of these expenses.

                  (g) The Trustee shall have, without exclusion, all powers
conferred on trustees by applicable law, unless expressly provided otherwise
herein, provided, however, that if an insurance policy is held as an asset of
the Trust, the Trustee shall have no power to name a Beneficiary of the policy
other than the Trust, to assign the policy (as distinct from conversion of the
policy to a different form) other than to a successor Trustee or to loan to any
person the proceeds of any borrowing against such policy.

                  (h) A third party dealing with the Trustee shall not be
required to make any inquiry whether the Company or a Participant has instructed
the Trustee, or the Trustee is otherwise authorized to take or omit any action;
or to follow the application by the Trustee of any money or property which may
be paid or delivered to the Trustee.

                  (i)      The liability of the Trustee to make the
payments specified by the Plan shall be limited to the funds

 

                                                                       22

which have come into its hands as Trustee hereunder, including all income
therefrom and increment thereof.

                  (j) The Company shall indemnify and hold harmless the Trustee
for any liability or expenses, including without limitation, reasonable
attorneys' fees reasonably incurred by the Trustee with respect to any action
undertaken with the consent of the Company in good faith hereunder or pursuant
to the Plan other than on account of the Trustee's negligence or willful
misconduct.

                  (k) Notwithstanding any powers granted to the Trustee pursuant
to this Trust Agreement or applicable law, the Trustee shall not have any power
that could give the Trust the objective of carrying on a business and deriving
the gains therefrom, within the meaning of section 301.7701- 2 of the Procedure
and Administrative Regulations promulgated pursuant to the Internal Revenue
Code.

 

                                                                          23

                  Section 10.  Compensation and Expenses of

Trustees.

                  The Trustee shall receive for its services compensation in
accordance with Schedule A, which can be amended upon the agreement of the
Company and Trustee. After a Change in Control of the Company, the Trustee may
increase its rate of compensation as reasonably necessary.

                  The Company shall pay all administrative and Trustee's fees
and expenses. If not so paid, the fees and expenses shall be paid from the
Trust.

             Section 11.  Resignation and Removal of Trustee.

                  (a)  The Trustee may resign at any time by written
notice to the Company, which shall be effective 90 days after receipt of such
notice unless the Company and the Trustee agree otherwise.

                  (b) Except as provided in paragraph (c) of this Section 11,
the Trustee may be removed by the Company on 90 days' notice or upon shorter
notice accepted by the Trustee.

                  (c) Upon a Change in Control, the Trustee may not be removed
by the Company for five years except with the consent of at least 75% of the
individuals participating in the Plan or covered by the Contracts.

 

                                                                             24

                  (d) If the Trustee resigns or is removed within ten years of a
Change in Control, the Trustee shall select a successor Trustee in accordance
with the provisions of paragraph (b) of Section 12 hereof whose appointment
shall be effective at the effective time of the Trustee's resignation or
removal. The Trustee shall be compensated for the reasonable costs of selecting
a successor as provided in Sections 10 and 12.

                  (e) Upon resignation or removal of the Trustee and appointment
of a successor Trustee, all assets shall subsequently be transferred to the
successor Trustee. The transfer shall be completed within 90 days after receipt
of notice of resignation, removal or transfer, unless the Company extends the
time limit.

                  (f) If the Trustee resigns or is removed, a successor shall be
appointed, in accordance with Section 12 hereof, by the effective date of
resignation or removal under paragraph (a) or (b) of this Section 11. If no such
appointment has been made, the Trustee may apply to a court of competent
jurisdiction for appointment of a successor or for instructions. All expenses of
the Trustee in connection with the proceeding shall be allowed as administrative
expenses of the Trust.

 

                                                                             25

             Section 12. Appointment of Successor. (a) Subject to the provisions
of paragraph (b) of this Section 12, if the Trustee resigns or is removed in
accordance with paragraph (a) or (b) of Section 11 hereof, the Company shall
appoint any third party, such as a bank trust department or other party that may
be granted corporate trustee powers under state law, as a successor to replace
the trustee upon resignation or removal. The appointment shall be effective when
accepted in writing by the new trustee, who shall have all of the rights and
powers of the former Trustee, including ownership rights in the Trust assets.
The former Trustee shall execute any instrument necessary or reasonably
requested by the Company or the successor trustee to evidence the transfer.

                  (b) If the Trustee resigns or is removed pursuant to the
provisions of paragraph (d) of Section 11 hereof, the Trustee shall appoint a
bank trust department or other party that may be granted corporate trustee
powers under state law, as successor trustee. The new trustee shall have all the
rights and powers of the former Trustee, including ownership rights in Trust
assets. The former Trustee shall execute any instrument necessary or reasonably
requested by the successor trustee to evidence the transfer.

 

                                                                             26

                  (c) The successor trustee need not examine the records and
acts of any prior Trustee and may retain or dispose of existing Trust assets,
subject to Sections 8 and 9 hereof. The successor trustee shall not be
responsible for and the Company shall indemnify and defend the successor trustee
from any claim or liability resulting from any action or inaction of any prior
Trustee or from any other past event, or any condition existing at the time it
becomes trustee.

                      Section 13. Amendment or Termination.

                  (a) This Trust Agreement may be amended by a
written instrument executed by the Trustee and the Company. Notwithstanding the
foregoing, no such amendment shall conflict or be inconsistent with the terms of
the Plan or Contracts or shall make the Trust revocable.

                  (b) The Trust shall not terminate until the date on which
Participants and their Beneficiaries are no longer entitled to benefits pursuant
to the terms of the Plan and Contracts. Upon termination of the Trust, any
assets remaining in the Trust shall be returned to the Company.

                  (c) Upon written approval of Participants or Beneficiaries
entitled to payment of benefits pursuant to the terms of the Plan and Contracts,
the Company may terminate the Trust prior to the time all benefit payments

 

                                                                             27

under the Plan and Contracts have been made.  All assets in
the Trust at termination shall be returned to the Company.

                  (d) Paragraph (f) of Section 2, Section 3, paragraph (c) or
(d) of Section 11 and paragraph (b) of Section 12 of this Trust Agreement may
not be amended by Company for ten years following a Change in Control.

             Section 14.  Miscellaneous.

                  (a) Any provision of this Trust Agreement prohibited by law
shall be ineffective to the extent of any such prohibition, without invalidating
the remaining provisions hereof.

                  (b) Benefits payable to Participants and their Beneficiaries
under this Trust Agreement may not be anticipated, assigned (either at law or in
equity), alienated, pledged, encumbered or subjected to attachment, garnishment,
levy, execution or other legal or equitable process.

                  (c) This Trust Agreement shall be governed by and construed in
accordance with the laws of the State of New York without regard to its
conflicts law principles. The United States District Court for the Southern
District of New York shall have the sole and exclusive jurisdiction over any
lawsuit or other judicial proceeding relating to or arising from this Agreement.
If that court lacks federal

 

                                                                             28

subject matter jurisdiction, the Supreme Court of the State of New York, New
York County shall have sole and exclusive jurisdiction. Either of these courts
shall have proper venue for any such lawsuit or judicial proceeding, and the
parties waive any objection to venue or their convenience as a forum. The
parties agree to submit to the jurisdiction of any of the courts specified and
to accept service of process to vest personal jurisdiction over them in any of
these courts. The parties further hereby knowingly, voluntarily and
intentionally waive, to the fullest extent permitted by law, any right to a
trial by jury with respect to any such lawsuit or judicial proceeding arising or
relating to this Agreement or the transactions contemplated hereby.

                  Section 15.  Effective Date.

                  The effective date of this Trust Agreement shall
be the 1st day of December, 1997.

                                  THE PITTSTON COMPANY,

                                  by

                                  /s/Frank T. Lennon
                                  _____________________________
                                  Frank T. Lennon
                                  Vice President

                                  THE CHASE MANHATTAN BANK,
                                  Trustee

                                   by
                                 
                                  /s/ Jay H. Berkowitz
                                  ______________________________
                                  Name: Jay Berkowitz

                                  Title: Vice President

 

                                                                   Exhibit 10(g)

                              THE PITTSTON COMPANY

                    NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN

                           (AMENDED AS OF MAY 2, 1997)

                                    ARTICLE I

                               PURPOSE OF THE PLAN

         The purpose of this Non-Employee Directors' Stock Option Plan (this
"Plan") is to attract and retain the services of experienced independent
directors for The Pittston Company (the "Company") by encouraging them to
acquire a proprietary interest in the Company in the form of shares of all three
classes of the Company's Common Stock (the "Common Stock"), viz., Pittston
Brink's Group Common Stock, Pittston Burlington Group Common Stock and Pittston
Minerals Group Common Stock. Unless otherwise indicated, references in this Plan
to Common Stock shall be construed to refer to the class of Common Stock covered
by the particular option. The Company intends this Plan to provide those
directors with additional incentive to further the best interests of the Company
and its shareholders.

                                   ARTICLE II

                           ADMINISTRATION OF THE PLAN

         This Plan shall be administered by the Board of Directors of the
Company (the "Board"). The Board is authorized to interpret this Plan and may
from time to time adopt such rules and regulations for carrying out this Plan as
it deems best. All determinations by the Board pursuant to the provisions of
this Plan shall be made in accordance with and subject to applicable provisions
of the Company's bylaws, and all such determinations and related orders or
resolutions of the Board shall be final, conclusive and binding on all persons.
All authority of the Board provided for in or pursuant to this Plan, including,
without limitation, the authority set forth in Articles III and IX may also be
exercised by the Compensation and Benefits Committee of the Board or by such
other committee of the Board as the Board may designate for the purpose.

                                   ARTICLE III

                 ELIGIBILITY; NUMBER AND PRICE OF OPTION SHARES

         Section 1. Options shall be granted only to directors ("Non-Employee
Directors") who are not also employees of the Company or any of its
Subsidiaries.

         Section 2. Subject to the provisions of Section 4 of this Article III,
the maximum number of shares of Common Stock which may be issued pursuant to
options granted under this Plan shall be (a) in the case of Pittston Brink's
Group Common Stock, 100,000 shares, (b) in the case of Pittston Burlington Group
Common Stock, 50,000 shares, and (c) in the case of Pittston Minerals Group
Common Stock, 20,000 shares, plus in each case the number of shares of each
class of Common Stock issuable pursuant to options outstanding under this Plan
on March 17, 1997.

         Section 3. The purchase price per share of Common Stock under each
option shall be 100% of the Fair Market Value of a share of Common Stock covered
by such option at the time such option is granted.

         Section 4. In the event of any dividend payable in any class of Common
Stock or any split or combination of any class of Common Stock, (a) the number
of shares of such class which may be issued under this Plan shall be
proportionately increased or decreased, as the case may be, (b) the number of
shares of such class (including shares subject to options not then exercisable)
deliverable pursuant to grants theretofore made shall be proportionately
increased or decreased, as the case may be, and (c) the aggregate purchase price
of shares subject to any such grant shall not be changed. Any option
subsequently granted pursuant to Sections 2 and 3 of Article IV shall be for a
number of shares reflecting such increase or decrease. In the event of any other
recapitalization, reorganization, extraordinary dividend or distribution or
restructuring transaction (including any distribution of shares of stock of any
Subsidiary or other property to holders of shares of any class of Common Stock)
affecting any class of Common Stock, the number of shares of such class issuable
pursuant to any option theretofore granted (whether or not then exercisable),
and/or the option price per share of such option, shall be subject to
appropriate adjustment; provided, however, that such option shall be subject to
only such adjustment as shall be necessary to maintain the proportionate
interest of the optionee and preserve, without exceeding, the value of such
option. In the event of a merger or share exchange in which the Company will not
survive as an independent, publicly owned corporation, or in the event of a
consolidation or of a sale of all or substantially all of the Company's assets,
provision shall be made for the protection and continuation of any outstanding
options by the substitution, on an equitable basis, of such shares of stock,
other securities, cash, or any combination thereof, as shall be appropriate;
provided, however, that such options shall be subject to only such adjustment as
shall be necessary to maintain the proportionate interest of the optionee and
preserve, without exceeding, the value of such options.

                                   ARTICLE IV

                                GRANT OF OPTIONS

         Section 1. Grants under this Plan shall relate to all three classes of
the Company's Common Stock. Each option shall constitute a nonqualified stock
option not intended to qualify under Section 422 of the Internal Revenue Code of
1986, as amended (the "Code").

         Section 2. Each Non-Employee Director elected as a member of the Board
shall automatically be granted (a) an option for 10,000 shares of Pittston
Brink's Group Common Stock, (b) an option for 5,000 shares of Pittston
Burlington Group Common Stock and (c) an option for 2,000 shares of Pittston
Minerals Group Common Stock (or, in case of an adjustment pursuant to Section 4
of Article III, the number of shares of each respective class of Common Stock
determined as provided in said Section 4) on the first business day after the
meeting of shareholders or of the Board, as the case may be, at which such
Director shall have first been elected. Each such option shall be exercisable
immediately as to one-third of the shares covered thereby, as to an additional
one-third on and after the first anniversary of the date of grant and as to the
remaining shares on and after the second anniversary of such date.

         Section 3. On August 1, 1993, and on July 1 of each subsequent year,
each Non-Employee Director who is a member of the Board as of each such date
shall automatically be granted an option to purchase 1,000 shares of Pittston
Brink's Group Common Stock, an option to purchase 500 shares of Pittston
Burlington Group Common Stock and an option to purchase

                                      - 2 -

200 shares of Pittston Minerals Group Common Stock (or, in the case of an
adjustment pursuant to Section 4 of Article III, the number of shares of each
respective class of Common Stock determined as provided in said Section 4). Each
such option shall become exercisable in full six months after the date of grant.

         Section 4. All instruments evidencing options granted under this Plan
shall be in such form, consistent with this Plan, as the Board shall determine.

                                    ARTICLE V

                         NON-TRANSFERABILITY OF OPTIONS

         No option granted under this Plan shall be transferable by the optionee
otherwise than by will or by the laws of descent and distribution, and any such
option shall be exercised during the lifetime of the optionee only by the
optionee or the optionee's duly appointed legal representative; provided,
however, that, in the sole discretion of the Board, an option may be
transferable to immediate family members (or to trusts therefor) of an optionee
granted such option on such terms and conditions as the Board shall determine.
For the purposes of this provision, an optionee's "immediate family" shall mean
the optionee's spouse, children and grandchildren (including stepchildren).

                                   ARTICLE VI

                               EXERCISE OF OPTIONS

         Section 1. Each option granted under this Plan shall terminate on the
tenth anniversary of the date of grant, unless sooner terminated as provided in
this Plan. Except in cases provided for in Article VII, each option may be
exercised only while the optionee is a Non-Employee Director.

         Section 2. A person electing to exercise an option shall give written
notice to the Company of such election and of the number of shares of Common
Stock such person has elected to purchase, and shall tender the full purchase
price of such shares, which tender shall be made in cash or cash equivalent
(which may be such person's personal check) at the time of purchase or in shares
of the same class of Common Stock already owned by such person (which shares
shall be valued for such purpose on the basis of their Fair Market Value on the
date of exercise), or in any combination thereof. The Company shall have no
obligation to deliver shares of Common Stock pursuant to the exercise of any
option, in whole or in part, until the Company receives payment in full of the
purchase price thereof. No optionee or legal representative, legatee or
distributee of such optionee shall be or be deemed to be a holder of any shares
of Common Stock subject to such option or entitled to any rights as a
shareholder of the Company in respect of any shares of Common Stock covered by
such option until such shares have been paid for in full and issued by the
Company.

                                      - 3 -

                                   ARTICLE VII

                             TERMINATION OF OPTIONS

         Section 1. In the case of a Non-Employee Director who ceases to serve
as such for any reason other than voluntary resignation (excluding retirement)
or failure to stand for reelection notwithstanding an invitation to continue to
serve as a Non-Employee Director and is entitled to receive a distribution from
The Pittston Company Directors' Stock Accumulation Plan, (a) any option to the
extent exercisable at the date of ceasing so to serve may be exercised, and (b)
any option that is not yet exercisable at the date of such cessation may be
exercised on or after the date on which it would become exercisable had the
optionee continued to serve as a Non-Employee Director until such date;
provided, however, that no option may be exercised after the earlier of (i)
three years after the optionee's cessation of service as a Non-Employee Director
or (ii) the termination date of the option.

         Section 2. In the case of a Non-Employee Director who dies while
serving as such or within six months of his or her cessation of service as a
Non-Employee Director (under the circumstances described in Section 1 of this
Article VII), all the Non-Employee Director's outstanding options shall be fully
vested and may be exercised within one year after the date of such death, but
not later than the termination date of the option, by the person designated in
the optionee's last will and testament or, if none, by the legal representative
of the optionee's estate.

         Section 3. In the case of a Non-Employee Director (other than one to
whom Section 2 of this Article VII applies) who dies after ceasing to serve as
such, all the Non-Employee Director's options shall be terminated except that
any option to the extent exercisable by the Non-Employee Director at the date of
ceasing so to serve may be exercised within one year after the date of death,
but not later than the termination date of the option, by the Non-Employee
Director's estate or by the person designated in the Non-Employee Director's
estate or by the person designated in the Non-Employee Director's last will and
testament.

         Section 4. In the case of a Non-Employee Director (other than one to
whom Section 1, 2 or 3 of this Article VII is applicable) who ceases to serve as
such for any reason, all the Non-Employee Director's options shall be terminated
except that any option to the extent exercisable at the date of ceasing so to
serve may be exercised within one year after such date, but not later than the
termination date of the option.

                                  ARTICLE VIII

                            MISCELLANEOUS PROVISIONS

         Section 1. Each option shall be subject to the requirement that, if at
any time the Board shall determine that the listing, registration or
qualification of the shares of Common Stock subject to such option upon any
securities exchange or under any state or federal law, or the consent or
approval of any governmental regulatory body, is necessary or desirable as a
condition of, or in connection with, the granting of such option or the issue of
Common Stock pursuant thereto, no option may be exercised, in whole or in part,
unless such listing, registration, qualification, consent or approval shall have
been effected or obtained free from any conditions not reasonably acceptable to
the Board.

                                      - 4 -

         Section 2. The Company may establish appropriate procedures to ensure
payment or withholding of such income or other taxes, if any, as may be provided
by law to be paid or withheld in connection with the issue of shares of Common
Stock under this Plan.

         Section 3. Nothing in this Plan shall be construed either to give any
Non-Employee Director any right to be retained in the service of the Company or
to limit the power of the Board to adopt additional compensation arrangements
(either generally or in specific instances) for directors of the Company or to
change such arrangements as in effect at any time.

                                   ARTICLE IX

                         PLAN TERMINATION AND AMENDMENTS

         Section 1. The Board may terminate this plan at any time, but this Plan
shall in any event terminate on May 11, 2008, and no options may thereafter be
granted, unless the shareholders shall have approved its extension. Options
granted in accordance with this Plan prior to the date of its termination may
extend beyond that date.

         Section 2. The Board may from time to time amend, modify or suspend
this Plan, but no such amendment or modification without the approval of the
shareholders shall

                  (a) increase the maximum number (determined as provided in
         this Plan) of shares of any class of Common Stock which may be issued
         (i) to any one Non-Employee Director or (ii) pursuant to all options
         granted under this Plan;

                  (b) permit the grant of any option at a purchase price less
         than 100% of the Fair Market Value of the Common Stock covered by such
         option at the time such option is granted;

                  (c) permit the exercise of an option unless arrangements are
         made to ensure that the full purchase price of the shares as to which
         the option is exercised is paid at the time of exercise; or

                  (d) extend beyond May 11, 2008, the period during which
         options may be granted.

                                    ARTICLE X

                                   DEFINITIONS

         Wherever used in this Plan, the following terms shall have the meanings
indicated:

         Fair Market Value: With respect to shares of any class of Common Stock,
the average of the high and low quoted sale prices of a share of such Stock on
the date in question (or, if there is no reported sale on such date, on the last
preceding date on which any reported sale occurred) on the New York Stock
Exchange Composite Transactions Tape.

         Subsidiary:  Any corporation of which stock representing at least
50% of the ordinary voting power is owned, directly or indirectly, by the
Company.

                                      - 5 -

 

                                                                  Exhibit 10(h)

                              THE PITTSTON COMPANY

                             1988 STOCK OPTION PLAN
                           (AMENDED AS OF MAY 2, 1997)

                                    ARTICLE I

                               PURPOSE OF THE PLAN

         This 1988 Stock Option Plan (this "Plan") contains provisions designed
to enable key employees of The Pittston Company (the "Company") and its
Subsidiaries to acquire a proprietary interest in the Company in the form of
shares of any of the classes of its Common Stock, viz., Pittston Brink's Group
Common Stock, Pittston Burlington Group Common Stock and Pittston Minerals Group
Common Stock. The Company intends this Plan to encourage those individuals who
are expected to contribute significantly to the Company's success to accept
employment or continue in the employ of the Company and its Subsidiaries, to
enhance their incentive to perform at the highest level, and, in general, to
further the best interests of the Company and its shareholders.

                                   ARTICLE II

                           ADMINISTRATION OF THE PLAN

         Section 1. Subject to the authority as described herein of the Board of
Directors of the Company (the "Board"), this Plan shall be administered by a
committee (the "Committee") designated by the Board, which shall be composed of
at least three members of the Board, all of whom are non-employee directors
within the meaning of Rule 16b-3(b)(3) issued under the Securities Exchange Act
of 1934, as amended (the "Act") and satisfy the requirements for an outside
director pursuant to Section 162(m) of the Internal Revenue Code of 1986, as
amended (the "Code"), and any regulations issued thereunder. Until otherwise
determined by the Board, the Compensation and Benefits Committee designated by
the Board shall be the Committee under this Plan. The Committee is authorized to
interpret this Plan as it deems best. All determinations by the Committee shall
be made by the affirmative vote of a majority of its members, but any
determination reduced to writing and signed by a majority of its members shall
be fully as effective as if it had been made by a majority vote at a meeting
duly called and held. Subject to any applicable provisions of the Company's
bylaws or of this Plan, all determinations by the Committee or by the Board
pursuant to the provisions of this Plan, and all related orders or resolutions
of the Committee or the Board, shall be final, conclusive and binding on all
persons, including the Company and its shareholders and those receiving options
under this Plan.

         Section 2. All authority of the Committee provided for in or pursuant
to this Plan, including that referred to in Section 1 of this Article II, may
also be exercised by the Board. In the event of any conflict or inconsistency
between determinations, orders, resolutions or other actions of the Committee
and the Board taken in connection with this Plan, the actions of the Board shall
control.

                                   ARTICLE III

                                   ELIGIBILITY

         Only persons who are Employees, including individuals who have agreed
to become Employees as provided in Article XII, shall be eligible to receive
option grants under this Plan. Neither the members of the Committee nor any
member of the Board who is not an Employee shall be eligible to receive any such
grant.

                                   ARTICLE IV

                     STOCK SUBJECT TO GRANTS UNDER THIS PLAN

         Section 1. Grants under this Plan shall relate to any of the classes of
Common Stock ("Common Stock") of the Company and may be made in the form of
incentive stock options or nonqualified stock options. Unless otherwise
indicated, references in this Plan to Common Stock shall be construed to refer
to the class of Common Stock covered by the particular option.

         Section 2. Subject to Section 3 of this Article IV, the maximum number
of shares of Common Stock which may be issued pursuant to options exercised
under this Plan shall be (a) in the case of Pittston Brink's Group Common Stock,
1,000,000 shares, (b) in the case of Pittston Burlington Group Common Stock,
1,000,000 shares, and (c) in the case of Pittston Minerals Group Common Stock,
250,000 shares, plus in each case the number of shares of each class of Common
Stock issuable pursuant to options outstanding under this Plan on March 17,
1997. Such number of shares of Common Stock referred to in clause (a), (b) or
(c) shall be reduced by the aggregate number of shares of such Common Stock
covered by options purchased pursuant to Section 3 or Section 4 of Article VI.
Notwithstanding the foregoing, in no event will any Employee be granted options
to purchase more than 167,000 shares of Pittston Brink's Group Common Stock,
83,000 shares of Pittston Burlington Group Common Stock or 200,000 shares of
Pittston Minerals Group Common Stock in any calendar year.

         Section 3. In the event of any dividend payable in any class of Common
Stock or any split or combination of any class of Common Stock, (a) the number
of shares of such class which may be issued under this Plan shall be proportions
ately increased or decreased, as the case may be, (b) the number of shares of
such class (including shares subject to options not then exercisable)
deliverable pursuant to grants theretofore made shall be proportionately
increased or decreased, as the case may be, and (c) the aggregate purchase price
of shares of such class subject to any such grant shall not be changed. In the
event of any other recapitalization, reorganization, extraordinary dividend or
distribution or restructuring transaction (including any distribution of shares
of stock of any Subsidiary or other property to holders of shares of any class
of Common Stock) affecting any class of Common Stock, the number of shares of
such class issuable under this Plan shall be subject to such adjustment as the
Committee or the Board may deem appropriate, and the number of shares of such
class issuable pursuant to any option theretofore granted (whether or not then
exercisable) and/or the option price per share of such option, shall be subject
to such adjustment as the Committee or the Board may deem appropriate with a
view toward preserving the value of such option. In the event of a merger or
share exchange in which the Company will not survive as an independent, publicly
owned corporation, or in the event of a consolidation or of a sale of all or
substantially all of the Company's assets, provision shall be made for the
protection and continuation of any outstanding options by the substitution, on
an equitable basis, of such shares of stock, other securities, cash, or any
combination thereof, as shall be appropriate.

                                    ARTICLE V

                        PURCHASE PRICE OF OPTIONED SHARES

         Unless the Committee shall fix a greater purchase price, the purchase
price per share of Common Stock under any option shall be 100% of the Fair
Market Value of a share of Common Stock covered by such option at the time such
option is granted.

                                        2

                                   ARTICLE VI

                                GRANT OF OPTIONS

         Section 1. Each option granted under this Plan shall constitute either
an incentive stock option, intended to qualify under Section 422 of the Code, or
a nonqualified stock option, not intended to qualify under said Section 422, as
determined in each case by the Committee.

         Section 2. The Committee shall from time to time determine the
Employees to be granted options, it being understood that options may be granted
at different times to the same Employees. In addition, the Committee shall
determine (a) the number and class of shares of Common Stock subject to each
option, (b) the time or times when the options will be granted, (c) the purchase
price of the shares subject to each option, which price shall be not less than
that specified in Article V, and (d) the time or times when each option may be
exercised within the limits stated in this Plan, which except as provided in the
following sentence shall in no event be less than six months after the date of
grant. All options granted under this Plan shall become exercisable in their
entirety at the time of any Change in Control of the Company.

         Section 3. In connection with any option granted under this Plan the
Committee in its discretion may grant a stock appreciation right (a "Stock
Appreciation Right"), providing that at the election of the holder of a Stock
Appreciation Right (which election shall, unless the Committee otherwise
consents, be made only during an Election Period), the Company shall purchase
all or any part of the related option to the extent that such option is
exercisable at the date of such election for an amount (payable in the form of
cash, shares of Common Stock or any combination thereof, all as the Committee
shall in its discretion determine) equal to the excess of the Fair Market Value
of the shares of Common Stock covered by such option or part thereof so
purchased on the date such election shall be made over the purchase price of
such shares so covered. A Stock Appreciation Right may also provide that the
Committee or the Board reserves the right to determine, in its discretion, the
date (which shall be subsequent to six months after the date of grant of such
option) on which such Right shall first become exercisable in whole or in part.

         Section 4. In connection with any option granted under this Plan the
Committee in its discretion may grant a limited right (a "Limited Right")
providing that the Company shall, at the election of the holder of a Limited
Right (which election may be made only during the period beginning on the first
day following the date of expiration of any Offer and ending on the forty-fifth
day following such date), purchase all or any part of such option, for an amount
(payable entirely in cash) equal to the excess of the Offer Price of the shares
of Common Stock covered by such purchase on the date such election shall be made
over the purchase price of such shares so purchased. Notwithstanding any other
provision of this Plan, no Limited Right may be exercised within six months of
the date of its grant.

         Section 5. The authority with respect to the grant of options and the
determination of their provisions contained in Sections 1 through 4 of this
Article VI may be delegated by the Board to one or more officers of the Company,
on such conditions and limitations as the Board shall approve; provided,
however, that no such authority shall be delegated with respect to the grant of
options to any officer or director of the Company or with respect to the
determination of any of the provisions of any of such options.

                                   ARTICLE VII

                         NON-TRANSFERABILITY OF OPTIONS

         No option or Stock Appreciation Right (including any Limited Rights)
granted under this Plan shall be transferable by the optionee otherwise than by

                                        3

will or by the laws of descent and distribution, and any such option or Stock
Appreciation Right (including any Limited Rights) shall be exercised during the
lifetime of the optionee only by the optionee or the optionee's duly appointed
legal representative.

                                  ARTICLE VIII

                               EXERCISE OF OPTIONS

         Section 1. Each incentive stock option granted under this Plan shall
terminate not later than ten years from the date of grant. Each nonqualified
stock option granted under this Plan shall terminate not later than ten years
and two days from the date of grant.

         Section 2. Except in cases provided for in Article IX, each option
granted under this Plan may be exercised only while the optionee is an Employee.
An Employee's right to exercise any incentive stock option shall be subject to
the provisions of Section 422 of the Code restricting the exercisability of such
option during any calendar year.

         Section 3. A person electing to exercise an option shall give written
notice to the Company of such election and of the number and class of shares of
Common Stock such person has elected to purchase, and shall tender the full
purchase price of such shares, which tender shall be made in cash or cash
equivalent (which may be such person's personal check) at the time of purchase
or in accordance with cash payment arrangements acceptable to the Company for
payment prior to delivery of such shares or, if the Committee so determines
either generally or with respect to a specified option or group of options, in
shares of Common Stock already owned by such person (which shares shall be
valued for such purpose on the basis of their Fair Market Value on the date of
exercise), or in any combination thereof. The Company shall have no obligation
to deliver shares of Common Stock pursuant to the exercise of any option, in
whole or in part, until the Company receives payment in full of the purchase
price thereof. No optionee or legal representative, legatee or distributee of
such optionee shall be or be deemed to be a holder of any shares of Common Stock
subject to such option or entitled to any rights as a shareholder of the Company
in respect of any shares of Common Stock covered by such option until such
shares have been paid for in full and issued by the Company. A person electing
to exercise a Stock Appreciation Right or Limited Right then exercisable shall
give written notice to the Company of such election and of the option or part
thereof which is to be purchased by the Company.

                                   ARTICLE IX

                             TERMINATION OF OPTIONS

         Section 1. If an optionee shall cease to be an Employee for any reason
other than death or retirement under the Company's Pension-Retirement Plan or
any other pension plan sponsored by the Company or a Subsidiary, all of the
optionee's options shall be terminated except that any option, Stock
Appreciation Right or Limited Right to the extent then exercisable may be
exercised within three months after cessation of employment, but not later than
the termination date of the option or in the case of a Limited Right not later
than the expiration date of such Right.

         Section 2. If and when an optionee shall cease to be an Employee by
reason of the optionee's early, normal or late retirement under the Company's
Pension-Retirement Plan or any pension plan sponsored by the Company or a
Subsidiary, all of the optionee's options shall be terminated except that (a)
any Stock Appreciation Right or Limited Right to the extent then exercisable may
be exercised within three months after such retirement, but not later than the
termination date of the option or in the case of a Limited Right not later than

                                        4

the expiration date of such Right, (b) any option to the extent then exercisable
may, unless it otherwise provides, be exercised within three years after such
retirement, but not later than the termination date of the option, unless within
45 days after such retirement the Committee determines, in its discretion, that
such option may be exercised only within a period of shorter duration (not less
than three months following notice of such determination to the optionee) to be
specified by the Committee and (c) any unvested installment of any such option
which is scheduled to become exercisable within three years of the retiree's
date of retirement (unless within 45 days after such retirement the Committee
determines, in its discretion, that such period shall be of shorter duration
(not less than three months following notice of such determination to the
optionee) to be specified by the Committee), may be exercised after the date on
which such installment would become exercisable if the retiree had continued to
be an Employee until such date, provided, however, that no option may be
exercised after the earlier of (i) three years and three months after the
Employee's retirement or (ii) the termination date of the option.

         Section 3. If an optionee shall die while an Employee or within three
years of his or her retirement (as defined in Section 2 of this Article IX) (a)
all of the optionee's Stock Appreciation Rights or Limited Rights shall be
terminated and (b) any outstanding option that would have become exercisable
within three years of his or her retirement shall become fully vested and may be
exercised within one year after the date of such death, but not later than the
termination date of the option, by the person designated in the optionee's last
will and testament or, if none, by the legal representative of the optionee's
estate.

         Section 4. If an optionee shall die after ceasing to be an Employee,
all of the optionee's options shall be terminated except that any option (but
not any Stock Appreciation Right or Limited Right) to the extent exercisable by
the optionee at the time of death may be exercised within one year after the
date of death, but not later than the termination date of the option, by the
optionee's estate or by the person designated in the optionee's last will and
testament.

                                    ARTICLE X

                            MISCELLANEOUS PROVISIONS

         Section 1. Each option grant under this Plan shall be subject to the
requirement that if at any time the Committee shall determine that the listing,
registration or qualification of the shares of Common Stock subject to such
grant upon any securities exchange or under any state or federal law, or the
consent or approval of any governmental regulatory body, is necessary or
desirable as a condition of, or in connection with, the making of such grant or
the issue of Common Stock pursuant thereto, then, anything in this Plan to the
contrary notwithstanding, no option may be exercised in whole or in part, and no
shares of Common Stock shall be issued, unless such listing, registration,
qualification, consent or approval shall have been effected or obtained free
from any conditions not reasonably acceptable to the Committee.

         Section 2. The Company may establish appropriate procedures to ensure
payment or withholding of such income or other taxes as may be provided by law
to be paid or withheld in connection with the issue of shares of Common Stock
under this Plan or the making of any payments pursuant to Section 3 or 4 of
Article VI, and to ensure that the Company receives prompt advice concerning the
occurrence of an Income Recognition Date or any other event which may create, or
affect the timing or amount of, any obligation to pay or withhold any such taxes
or which may make available to the Company any tax deduction resulting from the
occurrence of such event. Such procedures may include arrangements for payment
or withholding of taxes by retaining shares of Common Stock otherwise issuable
to the optionee in accordance with the provisions of this Plan or by accepting
already owned shares, and by applying the Fair Market Value of such shares to
the withholding taxes payable or to the amount of tax liability in excess of

                                        5

withholding taxes which arises from the delivery of such shares.

         Section 3. Any question as to whether and when there has been a
retirement under the Company's Pension-Retirement Plan or any other pension plan
sponsored by the Company or a Subsidiary or a cessation of employment for any
other reason shall be determined by the Committee, and any such reasonable
determination shall be final.

         Section 4. All instruments evidencing options granted shall be in such
form, consistent with this Plan and any applicable determinations or other
actions of the Committee and the Board, as the officers of the Company shall
determine.

         Section 5. The grant of an option to an Employee shall not be construed
to give such Employee any right to be retained in the employ of the Company or
any of its Subsidiaries.

                                   ARTICLE XI

                         PLAN TERMINATION AND AMENDMENTS

         Section 1. The Board may terminate this Plan at any time, but this Plan
shall in any event terminate on May 11, 2008, and no options may thereafter be
granted, unless the shareholders shall have approved its extension. Options
granted in accordance with this Plan prior to the date of its termination may
extend beyond that date.

         Section 2. The Board or the Committee may from time to time amend,
modify or suspend this Plan, but no such amendment or modification without the
approval of the shareholders shall

                  (a) increase the maximum number (determined as provided in
         this Plan) of shares of any class of Common Stock which may be issued
         pursuant to options granted under this Plan;

                  (b) permit the grant of any option at a purchase price less
         than 100% of the Fair Market Value of the Common Stock covered by such
         option at the time such option is granted;

                  (c) permit the exercise of an option unless arrangements are
         made to ensure that the full purchase price of the shares as to which
         the option is exercised is paid prior to delivery of such shares; or

                  (d) extend beyond May 11, 2008, the period during which option
         grants may be made.

                                   ARTICLE XII

                                   DEFINITIONS

         Wherever used in this Plan, the following terms shall have the meanings
indicated:

         Change in Control: A "Change in Control" shall be deemed to occur (i)
upon the approval of the shareholders of the Company (or if such approval is not
required, the approval of the Board) of (A) any consolidation or merger of the
Company in which the Company is not the continuing or surviving corporation or
pursuant to which the shares of all classes of the Company's Common Stock would
be converted into cash, securities or other property other than a consolidation
or merger in which holders of the total voting power in the election of
directors of the Company of all classes of Common Stock outstanding (exclusive
of shares held by the Company's affiliates) (the "Total Voting Power")
immediately prior

                                        6

to the consolidation or merger will have the same proportionate ownership of the
total voting power in the election of directors of the surviving corporation
immediately after the consolidation or merger, or (B) any sale, lease, exchange
or other transfer (in one transaction or a series of transactions) of all or
substantially all the assets of the Company, (2) when any "person" (as defined
in Section 13(d) of the Act) other than the Company, its affiliates or an
employee benefit plan or trust maintained by the Company or its affiliates,
shall become the "beneficial owner" (as defined in Rule 13d-3 under the Act),
directly or indirectly, of more than 20% of the Total Voting Power, or (3) if at
any time during a period of two consecutive years, individuals who at the
beginning of such period constituted the Board shall cease for any reason to
constitute at least a majority thereof, unless the election by the Company's
shareholders of each new director during such two-year period was approved by a
vote of at least two-thirds of the directors then still in office who were
directors at the beginning of such two-year period.

         Election Period: The period beginning on the third business day
following a date on which the Company releases for publication its quarterly or
annual summary statements of sales and earnings, and ending on the twelfth
business day following such date.

         Employee: Any officer and any other salaried employee of the Company or
a Subsidiary, including (a) any director who is also an employee of the Company
or a Subsidiary and (b) an officer or salaried employee on approved leave of
absence provided such employee's right to continue employment with the Company
or a Subsidiary upon expiration of such employee's leave of absence is
guaranteed either by statute or by contract with or by a policy of the Company
or a Subsidiary. For purposes of eligibility for the grant of a nonqualified
stock option, such term shall include any individual who has agreed in writing
to become an officer or other salaried employee of the Company or a Subsidiary
within 30 days following the date on which an option is granted to such
individual.

         Fair Market Value: With respect to shares of any class of Common Stock,
the average of the high and low quoted sale prices of a share of such Stock on
the date in question (or, if there is no reported sale on such date, on the last
preceding date on which any reported sale occurred) on the New York Stock
Exchange Composite Transactions Tape.

         Income Recognition Date: With respect to the exercise of any option,
the later of (a) the date of such exercise or (b) the date on which the rights
of the holder of such option in the shares of Common Stock covered by such
exercise become transferable and not subject to a substantial risk of forfeiture
(within the meaning of Section 83 of the Code); provided, however, that, if such
holder shall make an election pursuant to Section 83(b) of the Code with respect
to such exercise, the Income Recognition Date with respect thereto shall be the
date of such exercise.

         Offer: Any tender offer, exchange offer or series of purchases or other
acquisitions, or any combination of those transactions, as a result of which any
person, or any two or more persons acting as a group, and all affiliates of such
person or persons, shall own beneficially more than 30% of the total voting
power in the election of directors of the Company of all classes of Common Stock
outstanding (exclusive of shares held by the Company's Subsidiaries).

         Offer Price: The highest price per share of Common Stock paid in any
Offer which is in effect at any time beginning on the ninetieth day prior to the
date on which a Limited Right is exercised. Any securities or property which are
part or all of the consideration paid for shares of Common Stock in the Offer
shall be valued in determining the Offer Price at the higher of (a) the
valuation placed on such securities or property by the person or persons making
such Offer or (b) the valuation of such securities or property as may be
determined by the Committee.

                                        7

         Subsidiary: Any corporation of which stock representing at least 50% of
the ordinary voting power is owned, directly or indirectly, by the Company.

                                        8

 

                                                                Exhibit 10(i)(v)

                     AMENDMENT NO. 4 TO EMPLOYMENT AGREEMENT

                  AMENDMENT No. 4 to Employment Agreement dated as of
May 1, 1993, as amended by Amendment No. 1 thereto dated March 18, 1994, as
amended by Amendment No. 2 thereto dated as of September 16, 1994, and as
amended by Amendment No. 3 thereto dated as of May 1, 1996 (said Employment
Agreement as so amended being hereinafter called the "Employment Agreement"),
between The Pittston Company, a Virginia corporation (the "Company"), and Joseph
C. Farrell, residing at 4917 Lockgreen Circle, Richmond, Virginia 23226 (the
"Employee").

                  The Company and the Employee agree to amend the Employment
Agreement as follows:

                  1. The last sentence of the second paragraph of Section 1 of
the Employment Agreement is hereby amended by substituting the phrase "Executive
Agreement dated as of April 23, 1997" for the phrase "Employment Agreement dated
as of March 1, 1984".

                  IN WITNESS WHEREOF, the parties have executed this
Amendment No. 4 as of April 23, 1997.

                                       THE PITTSTON COMPANY

                                        By /s/ Frank T. Lennon
                                       -----------------------
                                            Frank T. Lennon
                                          Vice President -
                                         Human Resources and
                                           Administration

APPROVED:

 /s/ Roger G. Ackerman
- -----------------------
     Roger G. Ackerman
Chairman, Compensation and
Benefits Committee of the
  Board of Directors                             /s/ Joseph C. Farrell
                                                 ---------------------
                                                     Joseph C. Farrell

                                                     

                                                                   Exhibit 10(k)

                        1994 EMPLOYEE STOCK PURCHASE PLAN

                                       OF

                              THE PITTSTON COMPANY

                   (As Amended and Restated as of May 2, 1997)

                                            

                                TABLE OF CONTENTS

                                                                         Page
                                                                    
ARTICLE I      -   Purpose of the Plan....................................1
ARTICLE II     -   Definitions............................................2
ARTICLE III    -   Administration.........................................6
ARTICLE IV     -   Number of Shares to be Offered........................ 7
ARTICLE V      -   Eligibility and Participation......................... 9
ARTICLE VI     -   Effect of Termination of Employment...................17
ARTICLE VII    -   Rights Not Transferable...............................18
ARTICLE VIII   -   Limitation on Stock Ownership.........................19
ARTICLE IX     -   Miscellaneous Provisions..............................20
ARTICLE X      -   Amendment or Termination of the Plan..................21

                                                                     

                        1994 EMPLOYEE STOCK PURCHASE PLAN

                                       OF

                              THE PITTSTON COMPANY

                   (As Amended and Restated As of May 2, 1997)

                                    ARTICLE I

                               Purpose of the Plan

                  This 1994 Employee Stock Purchase Plan of The Pittston Company
(the "Plan"), as effective July 1, 1994, contained provisions designed to enable
eligible employees to purchase through regular payroll deductions shares of
either or both classes of Common Stock of The Pittston Company, viz., Pittston
Services Group Common Stock and Pittston Minerals Group Common Stock. The
Company intends this Plan to encourage such employees to acquire a proprietary
interest in the Company with a view toward further identifying their interests
with those of other shareholders of the Company. The Plan is intended to qualify
as an "employee stock purchase plan" under Section 423 of the Internal Revenue
Code.

                  Effective January 19, 1996, the Plan is amended and restated
to reflect the redesignation (the "Redesignation") of the Pittston Services
Group Common Stock as Pittston Brink's Group Common Stock and the creation of a

                                                                               2

new class of Common Stock designated Pittston Burlington
Group Common Stock.

                                   ARTICLE II

                                   Definitions

                  Section 1. Wherever used in the Plan, the following terms
shall have the meanings indicated:

                  Board:  The Board of Directors of the Company.

                  Code:  The Internal Revenue Code of 1986, as
         amended.

                  Committee: The committee designated by the Board to administer
         the Plan in accordance with Section 1 of Article III. Until otherwise
         determined by the Board, the Administrative Committee designated by the
         Board shall be the Committee under the Plan.

                  Common Stock: Any one or more classes of common stock of the
         Company, viz., Pittston Brink's Group Common Stock, Pittston Burlington
         Group Common Stock, Pittston Minerals Group Common Stock prior to
         January 1, 1996, Pittston Services Group Common Stock. Unless otherwise
         indicated, references in the Plan to Common Stock shall be construed to
         refer to the class of common stock covered by the particular
         designation on a Participant's enrollment form. Such shares of

                                                                               3

         Common Stock of the Company shall be subject to such terms, conditions
         and restrictions, including without limitations, restrictions on resale
         of such shares for a specified period of time, as shall be determined
         by the Committee.

                  Company:  The Pittston Company.

                  Compensation:  The annual base rate of pay of a
         Participant as of each Offering Date applicable to such Participant,
         including commissions but excluding, unless otherwise determined by the
         Committee in accordance with nondiscriminatory rules adopted by it,
         overtime or premium pay.

                  Dividend Date:  The date on which a cash dividend
         on Common Stock held by the Nominee is paid.

                  Eligible Employee: Any employee of the Company or a Subsidiary
         (a) whose date of hire was at least six months prior to the
         commencement of an Offering Period and (b) who is customarily employed
         for at least 20 hours per week and five months in a calendar year;
         provided, however, that in the case of an employee who is covered by a
         collective bargaining agreement, he or she shall not be considered an
         Eligible Employee unless and until the labor organization representing
         such individual has accepted the Plan on behalf of the

                                                                               4

         employees in the collective bargaining unit. Any such employee shall
         continue to be an Eligible Employee during an approved leave of absence
         provided such employee's right to continue employment with the Company
         or a Subsidiary upon expiration of such employee's leave of absence is
         guaranteed either by statute or by contract with, or a policy of, the
         Company or a Subsidiary.

                  Fair Market Value: With respect to shares of any class of
         Common Stock, the average of the high and low quoted sale prices
         (including any sale prices determined on a when issued basis) of a
         share of such stock on the applicable Offering Date, Purchase Date,
         Dividend Date or other date specified herein, as the case may be, as
         reported on the New York Stock Exchange Composite Transactions Tape;
         provided that (a) if on such Offering Date, Dividend Date or any other
         date other than the Purchase Date, there is no reported sale
         transaction on the New York Stock Exchange Composite Transactions Tape,
         Fair Market Value shall be determined on the first subsequent date on
         which such a transaction shall have occurred, and (b) if on such
         Purchase Date there is no such transaction, Fair Market

                                                                               5

         Value shall be determined on the last preceding date on which such a
         transaction shall have occurred.

                  Nominee:  The custodian designated by the Company
         for the Plan Accounts held hereunder.

                  Offering Date:  The first day of each six-month
         period commencing on July 1 or January 1 on and after
         July 1, 1994.

                  Offering Period:  With respect to each Participant,
         the six-month period from an Offering Date to and
         including the next following Purchase Date.

                  Participant: An Eligible Employee who elects to participate in
         the Plan on an Offering Date in accordance with the provisions of the
         Plan. All Participants shall have the same rights and privileges except
         as otherwise permitted by Section 423 of the Code and the Plan.

                  Plan Account:  The account established for each
         Participant pursuant to the Plan.

                  Purchase Date:  The last day of each six-month
         Offering Period.

                  Purchase Price:  The price at which Participants
         may purchase shares of each class of Common Stock in
         accordance with the Plan.

                                                                               6

                  Subsidiary:  A subsidiary corporation, as defined
         in Section 424 of the Code, which is designated by the
         Committee as a Subsidiary for purposes of the Plan.

                                   ARTICLE III

                                 Administration

                  Section 1. Subject to the authority of the Board as described
herein, the Plan shall be administered by a committee designated by the Board,
which shall be composed of at least three members. The Committee is authorized
to interpret the Plan and may from time to time adopt such rules and regulations
for carrying out the Plan as it deems best. All determinations by the Committee
shall be made by the affirmative vote of a majority of its members, but any
determination reduced to writing and signed by a majority of its members shall
be fully as effective as if it had been made by a majority vote at a meeting
duly called and held. Subject to any applicable provisions of the Company's
bylaws or of the Plan, all determinations by the Committee or the Board pursuant
to the provisions of the Plan, and all related orders or resolutions of the
Committee or the Board, shall be final, conclusive and binding on all persons,
including the Company and its shareholders and Eligible Employees and
Participants under the Plan.

                                                                               7

                  Section 2. All authority of the Committee provided for in, or
pursuant to, this Plan, including that referred to in Section 1 of this Article
III, may also be exercised by the Board. In the event of any conflict or
inconsistency between determinations, orders, resolutions or other actions of
the Committee and the Board taken in connection with this Plan, the actions of
the Board shall control.

                                   ARTICLE IV

                         Number of Shares to be Offered

                  Section 1. Subject to the provisions of Section 2 of this
Article IV, the maximum number of shares of Common Stock which may be issued or
allocated pursuant to the Plan shall be (a) in the case of Pittston Brink's
Group Common Stock, 750,000 shares, (b) in the case of Pittston Burlington Group
Common Stock, 375,000 shares and (c) in the case of Pittston Minerals Group
Common Stock, 250,000 shares.

                  Section 2. In the event of any dividend payable in any class
of Common Stock or any split or combination of any class of Common Stock, (a)
the number of shares of such class which may be issued under this Plan shall be
proportionately increased or decreased, as the case may be,

                                                                               8

(b) the number of shares of such class (including shares subject to rights to
purchase which have not been exercised) thereafter deliverable shall be
proportionately increased or decreased, as the case may be, and (c) the
aggregate Purchase Price of shares of such class shall not be changed. In the
event of any other recapitalization, reorganization, extraordinary dividend or
distribution or restructuring transaction (including any distribution of shares
of stock of any Subsidiary or other property to holders of shares of any class
of Common Stock) affecting any class of Common Stock, the number of shares of
such class issuable under this Plan shall be subject to such adjustment as the
Committee or the Board may deem appropriate, and the number of shares of such
class thereafter deliverable (including shares subject to rights to purchase
which have not been exercised) and/or the Purchase Price shall be subject to
such adjustment as the Committee or the Board may deem appropriate. In the event
of a merger or share exchange in which the Company will not survive as an
independent, publicly owned corporation, or in the event of a consolidation or
of a sale of all or substantially all of the Company's assets, provision shall
be made for the protection and continuation of any outstanding rights to
purchase by the substitution, on an equitable basis, of such shares of

                                                                               9

stock, other securities, cash, or any combination thereof,
as shall be appropriate.

                                    ARTICLE V

                          Eligibility and Participation

                  Section 1. An Eligible Employee who shall have satisfied all
eligibility requirements on or before any Offering Date may become a Participant
for the Offering Period commencing on such Offering Date by filing with the
office or offices designated by the Committee an enrollment form prescribed by
the Committee authorizing payroll deductions not less than ten business days
prior to such Offering Date. By enrolling in the Plan, a Participant shall be
deemed to elect to purchase the maximum number of shares (including the right to
fractional shares calculated to the fourth decimal place) of the class of Common
Stock that can be purchased with the amount of the Participant's Compensation
which is withheld and designated for such class during the Offering Period.

                  Section 2. A Participant shall automatically participate in
each successive Offering Period until the time of such Participant's withdrawal
from the Plan as hereinafter provided. A Participant shall not be required to
file any additional enrollment forms for any such successive

                                                                              10

Offering Period in order to continue participation in the Plan.

                  Section 3. Each Participant shall designate on the enrollment
form the percentage of Compensation which he or she elects to have withheld for
the purchase of Common Stock, which may be any whole percentage from 1% up to
and including 10% of such Participant's Compensation. A Participant may reduce
(but not increase) the rate of payroll withholding during an Offering Period by
filing with the Committee a form to be prescribed by it, at any time prior to
the end of such Offering Period for which such reduction is to be effective. Not
more than one reduction may be made in any Offering Period unless otherwise
determined by nondiscriminatory rules adopted by the Committee. Each
Participant shall also designate on the enrollment form a percentage (in
multiples of 10%) of the Compensation withheld during an Offering Period that
is to be used to purchase Pittston Brink's Group Common Stock, a percentage (in
multiples of 10%) of such Compensation that is to be used to purchase Pittston
Burlington Group Common Stock and/or a percentage (in multiples of 10%) of such
Compensation that is to be used to purchase Pittston Minerals Group Common
Stock; provided, however, that 100% of withheld Compensation shall be allocated
among the three classes of Common Stock.

                                                                              11

In the event a Participant elects to reduce the rate of payroll withholding
during an Offering Period, such reduction shall be applied ratably to the
allocation of his or her withheld Compensation among the three classes of Common
Stock. During an Offering Period, a Participant may not change the allocation of
his or her Compensation to be withheld during such Offering Period although such
allocation may be changed for any subsequent Offering Period by filing an
appropriate form not less than ten business days prior to the Offering Date for
such subsequent Offering Period. A Participant may increase or decrease the rate
of payroll deduction for any subsequent Offering Period by filing, at the
appropriate office provided for in Section 1 of this Article V, a new
authorization for payroll deductions not less than ten business days prior to
the Offering Date for such subsequent Offering Period.

                  Section 4. The Purchase Price for each share of Common Stock
to be purchased under the Plan in respect of any Offering Period shall be 85% of
the Fair Market Value of such share on either (a) the Offering Date in respect
thereof or (b) the Purchase Date in respect thereof, whichever is less.

                  Section 5.  The aggregate Purchase Price shall be
accumulated throughout the Offering Period solely by payroll

                                                                              12

deductions which shall be applied automatically to purchase shares of the
appropriate class of Common Stock on the Purchase Date for such Offering Period.
Payroll deductions shall commence on the first payday following the applicable
Offering Date and shall continue to the end of the Offering Period subject to
prior decrease, withdrawal or termination as provided in the Plan.

                  Section 6. The Company will maintain a Plan Account on its
books in the name of each Participant. On each payday the amount deducted from
each Participant's Compensation will be credited to such Participant's Plan
Account and such aggregate amount will be allocated among amounts to be used to
purchase Pittston Brink's Group Common Stock, amounts to be used to purchase
Pittston Burlington Group Common Stock and amounts to be used to purchase
Pittston Minerals Group Common Stock. No interest shall accrue on any such
payroll deductions. As of the Purchase Date with respect to each Offering
Period, the amount then in such Plan Account and allocated to each class of
Common Stock shall be applied to the purchase of the number of shares (including
the right to fractional shares computed to the fourth decimal place) of the
appropriate class of Common Stock determined by dividing such amount by the
applicable Purchase Price of each class of Common Stock.

                                                                              13

                  Section 7. The shares of Common Stock (including the right to
fractional shares) purchased on behalf of a Participant shall initially be
registered in the name of a Nominee. Stock certificates shall not be issued to
Participants for the Common Stock held on their behalf in the name of the
Nominee, but all rights accruing to an owner of record of such Common Stock,
including, without limitation, voting and tendering rights, shall belong to the
Participant for whose account such Common Stock is held.

                  Notwithstanding the foregoing, a Participant may elect, as of
the first day of any calendar quarter, to have some or all of the full shares of
either class of Common Stock previously purchased and registered in the name of
the Nominee on his or her behalf registered in the name of such Participant by
giving written notification of such election to the Company, specifying the
number of full shares (if fewer than all) to be registered in the name of such
Participant. In such case, the number of full shares of each class of Common
Stock held by the Nominee on behalf of such Participant and so specified in the
Participant's notice shall be transferred to and registered in the name of such
Participant as soon as administratively practicable.

                  Upon the termination of the Plan pursuant to
Article X, any full shares of any class of Common Stock

                                                                              14

purchased for the benefit of any Participant under the Plan which are registered
in the name of the Nominee shall be transferred to and registered in the name of
each such Participant as soon as administratively practicable. In addition, each
such Participant shall receive a cash payment in lieu of fractional shares equal
to the Fair Market Value of any fractional shares of Common Stock held by the
Nominee on the date of the termination of the Plan for the benefit of such
Participant.

                  Section 8. A Participant may elect to cease active
participation in the Plan with respect to all classes of Common Stock at any
time up to the end of an Offering Period by filing with the Committee a form to
be prescribed by it. As promptly as practicable after such filing, all payroll
deductions credited to such Participant's Plan Account and allocated for the
purchase of the class of Common Stock with respect to which the Participant is
ceasing participation shall be returned to such Participant in cash, without
interest. A Participant who elects to cease participation in the Plan may not
resume participation in the Plan until after the expiration of one full Offering
Period (following cessation of participation). Thereafter, any such Participant
may enroll in the Plan by filing an enrollment form as provided in Section 1 of
this Article V.

                                                                              15

                  Section 9. In the event that the aggregate number of shares of
any class of Common Stock which all Participants elect to purchase during an
Offering Period shall exceed the number of shares of such class remaining
available for issuance under the Plan, the number of shares which each
Participant shall become entitled to purchase during such Offering Period
shall be determined by multiplying the number of such shares available for
issuance by a fraction whose numerator shall be the number of such shares such
Participant has elected to purchase and whose denominator shall be the sum of
the number of such shares which all Participants have elected to purchase.
Any amounts deducted from a Participant's Compensation in excess of the amount
that may be used to acquire shares of Common Stock shall be refunded to the
Participant as soon as practicable.

                  Section 10. By executing an enrollment form, a Participant
shall have authorized the Nominee to receive and collect all cash dividends or
other distributions paid with respect to shares of Common Stock held on the
Participant's behalf and to use such funds to purchase all additional shares of
Pittston Brink's Group Common Stock, Pittston Burlington Group Common Stock and
Pittston Minerals Group Common Stock, including the right to fractional shares,
on behalf of the Participant, that could be purchased by divid-

                                                                              16

ing the amount of such dividend or other distribution by the Fair Market Value
of the class of Common Stock giving rise to the distribution on the Dividend
Date. The cash value of any distribution in property shall be determined by the
Committee. Any stock dividend on shares of Common Stock shall be held by the
Nominee for the benefit of the Participant on whose behalf the shares of Common
Stock giving rise to the dividend are held. The Nominee shall distribute to any
Participant, as soon as practical, any dividends received on shares of Common
Stock, if the maximum share limitations set forth in Section 1 of Article IV
prevent further issuances of such shares. A Participant who elects to hold
shares of Common Stock previously registered in the name of the Nominee in his
or her own name will cease to have the benefit of this Section 10 with respect
to such shares when they are registered in his or her own name.

                  Section 11. Each Participant is entitled to direct the Nominee
as to the manner in which any Common Stock held by the Nominee on behalf of such
Participant is to be voted. Participants may vote fractional shares credited to
their Plan Accounts. The combined fractional shares shall be voted to the extent
possible to reflect the directions of the Participants holding fractional
shares. Shares of Common Stock (including fractional shares) as to

                                                                              17
which the Nominee shall not have received timely written voting directions by a
Participant shall be voted proportionately with Common Stock of the same class
as to which directions by Participants were so received.

                  Each Participant (or, in the event of his or her death, his or
her beneficiary) is entitled to direct the Nominee in writing as to the manner
in which the Nominee shall respond to a tender or exchange offer with respect to
full shares of such Common Stock, and the Nominee shall respond in accordance
with such directions. If the Nominee shall not have received timely written
directions as to the response to such offer, the Nominee shall not tender or
exchange any Common Stock allocated to such Plan Accounts.

                                   ARTICLE VI

                       Effect of Termination of Employment

                  In the event of the termination of a Participant's employment
for any reason, including retirement or death, or the failure of a Participant
to remain an Eligible Employee, all full shares of each class of Common Stock
then held for his or her benefit by the Nominee shall be registered in such
individual's name and an amount equal to the Fair Market Value (on the date of
registration of full shares of Common Stock in the name of the Participant) of
any frac-

                                                                              18

tional share then held by the Nominee for the benefit of such
Participant shall be paid to such individual, in cash, as soon as
administratively practicable, and such individual shall thereupon cease to own
the right to any such fractional share. Any amounts credited to such
individual's Plan Account shall be refunded, without interest, to such
individual, or, in the event of his or her death, to his or her legal
representative. A transfer by a Participant from the Company to a Subsidiary,
from one Subsidiary to another, or from a Subsidiary to the Company shall not be
considered to be a termination of employment.

                                   ARTICLE VII

                             Rights Not Transferable

                  The rights and interests of any Participant in the Plan,
including any right to purchase shares of Common Stock, or in any Common Stock
or moneys to which he or she may be entitled under the Plan shall not be
transferable otherwise than by will or the applicable laws of descent and
distribution and any such right to purchase shall be exercisable, only during
the lifetime of such Participant, and then only by such Participant. If a
Participant shall in any manner attempt to transfer, assign or otherwise
encumber his or her rights or interests under the Plan, other than by

                                                                              19

will, such attempt shall be deemed to constitute a cessation of participation in
the Plan and the provisions included in Section 8 of Article V shall apply.

                                  ARTICLE VIII

                          Limitation on Stock Ownership

                  Notwithstanding any provision herein to the contrary, no
Participant shall have a right to purchase shares of any class of Common Stock
pursuant to Article V if (a) such Participant, immediately after electing to
purchase such shares, would own Common Stock possessing 5% or more of the total
combined voting power or value of all classes of stock of the Company or of any
Subsidiary, or (b) the rights of such Participant to purchase Common Stock under
the Plan would accrue at a rate that exceeds $15,000 of Fair Market Value of
such Common Stock (determined at the time or times such rights are granted) for
each calendar year for which such rights are outstanding at any time. For
purposes of the foregoing clause (a), ownership of Common Stock shall be
determined by the attribution rules of Section 424(d) of the Code and
Participants shall be considered to own any Common Stock which they have a right
to purchase under the Plan or any other stock option or purchase plan.

                                                                              20

                                   ARTICLE IX

                            Miscellaneous Provisions

                  Section 1. Nothing in the Plan shall be construed to give any
Eligible Employee or Participant the right to be retained in the employ of the
Company or a Subsidiary or to affect the right of the Company or any Subsidiary
or a Participant to terminate such employment at any time with or without cause.

                  Section 2. A Participant shall have no rights as a shareholder
with respect to any shares of any class of Common Stock which he or she may have
a right to purchase under the Plan until the date such shares are registered in
the name of a Nominee on behalf of such Participant.

                  Section 3. Each right to purchase shares of any class of
Common Stock under the Plan shall be subject to the requirement that if at any
time the Committee shall determine that the listing, registration or
qualification of such right to purchase or the shares of any class of Common
Stock subject thereto upon any securities exchange or under any state or federal
law, or the consent or approval of any governmental regulatory body, is
necessary or desirable as a condition of, or in connection with, such right to
purchase or the issue of any class of Common Stock pursuant thereto, then,
anything in the Plan to the contrary notwithstanding,

                                                                              21

no such right to purchase may be exercised in whole or in part, and no shares of
such class of Common Stock shall be issued, unless such listing, registration,
qualification, consent or approval shall have been effected or obtained free
from any conditions not reasonably acceptable to the Committee.

                  Section 4. All instruments evidencing participation in the
Plan shall be in such form, consistent with the Plan and any applicable
determinations or other actions of the Committee and the Board, as the Company
shall determine.

                  Section 5. The Committee may establish appropriate procedures
with a view toward obtaining information regarding any disqualifying disposition
by any person of shares of any class of Common Stock which may make available to
the Company a tax deduction in respect of such disposition.

                                    ARTICLE X

                      Amendment or Termination of the Plan

                  Section 1. The Plan became effective as of July 1, 1995, and
shall terminate on June 30, 2002, unless the shareholders theretofore shall have
approved an extension of such termination date.

                                                                              22

                  Section 2. The Board may, at any time and from time to time,
amend (including, but not limited to, amendments to the Plan to increase the
Purchase Price described in Section 4 of Article V), modify or terminate the
Plan, but no such amendment or modification without the approval of the
shareholders shall:

                  (a) increase the maximum number (determined as provided in the
         Plan) of shares of any class of Common Stock which may be issued
         pursuant to the Plan;

                  (b) permit the issuance of any shares of any class of Common
         Stock at a Purchase Price less than that provided in the Plan as
         approved by the shareholders;

                  (c) extend the term of the Plan; or

                  (d) cause the Plan to fail to meet the requirements
         of an "employee stock purchase plan" under
         Section 423 of the Code.

 

                                                                Exhibit 10(l)(i)

                               EXECUTIVE AGREEMENT
                           dated as of April 23, 1997,
                          between The Pittston Company,
                     a Virginia corporation ("the Company"),
                    and Joseph C. Farrell (the "Executive").

                  The Company and the Executive agree to terminate as of the
date hereof the letter agreement between the Executive and the Company dated as
of March 1, 1984, regarding the Executive's employment in the event of a "Change
in Control," and to substitute therefor this Agreement, and the Company and the
Executive further agree as follows:

                  SECTION 1.  Definitions.  As used in this
Agreement:

                  (a) "Affiliate" has the meaning ascribed thereto in Rule 12b-2
pursuant to the Securities Exchange Act of 1934, as amended (the "Act").

                  (b)  "Board" means the Board of Directors of the
Company.

                  (c) "Cause" means (i) an act or acts of dishonesty on the
Executive's part which are intended to result in the Executive's substantial
personal enrichment at the expense of the Company or (ii) repeated material
violations by the Executive of the Executive's obligations under Section 3 or
Section 11 which are demonstrably willful and deliberate on the Executive's part
and which have not been cured by the Executive within a reasonable time after
written notice to the Executive specifying the nature of such violations.
Notwithstanding the foregoing, the Executive shall not be deemed to have been
terminated for Cause without (1) reasonable notice to the Executive setting
forth the reasons for the Company's intention to terminate for Cause, (2) an
opportunity for the Executive, together with his counsel, to be heard before the
Board, and (3) delivery to the Executive of a Notice of Termination, as defined
in Section 4(d) hereof, from the Board finding that in the good faith opinion of
three-quarters (3/4) of the Board the Executive was guilty of conduct set forth
above in clause (i) or (ii) hereof, and specifying the particulars thereof in
detail.

                                                                               2

                  (d) A "Change in Control" shall be deemed to occur (1) upon
the approval of the shareholders of the Company (or if such approval is not
required, the approval of the Board) of (A) any consolidation or merger of the
Company in which the Company is not the continuing or surviving corporation or
pursuant to which the shares of all classes of the Company's Common Stock would
be converted into cash, securities or other property other than a consolidation
or merger in which holders of the total voting power in the election of
directors of the Company of all classes of Common Stock outstanding (exclusive
of shares held by the Company's Affiliates) (the "Total Voting Power")
immediately prior to the consolidation or merger will have the same
proportionate ownership of the total voting power in the election of directors
of the surviving corporation immediately after the consolidation or merger, or
(B) any sale, lease, exchange or other transfer (in one transaction or a series
of transactions) of all or substantially all the assets of the Company, (2) when
any "person" (as defined in Section 13(d) of the Act), other than the Company,
its Affiliates or an employee benefit plan or trust maintained by the Company or
its Affiliates, shall become the "beneficial owner" (as defined in Rule 13d-3
under the Act), directly or indirectly, of more than 20% of the Total Voting
Power or (3) if at any time during a period of two consecutive years,
individuals who at the beginning of such period constituted the Board shall
cease for any reason to constitute at least a majority thereof, unless the
election by the Company's shareholders of each new director during such two-year
period was approved by a vote of at least two-thirds of the directors then still
in office who were directors at the beginning of such two-year period.

                  (e)  "Good Reason" means:

                  (i) without the Executive's express written consent and
         excluding for this purpose an isolated, insubstantial and inadvertent
         action not taken in bad faith and which is remedied by the Company or
         its Affiliates promptly after receipt of notice thereof given by the
         Executive, (A) the assignment to the Executive of any duties
         inconsistent in any respect with the Executive's position (including
         status, offices, titles and reporting requirements), authority, duties
         or responsibilities as contemplated by Section 3(a) hereof, (B) any
         other action by the Company or its Affiliates which results in a
         diminution in such position, authority, duties or responsibilities, or
         (C) any failure by the Company to comply with any of the provisions of
         Section 3(b) hereof;

                                                                               3

                  (ii) without the Executive's express written con sent, the
         Company's requiring the Executive's work location to be other than as
         set forth in Section 3(a)(i);

                  (iii) any failure by the Company to comply with and
         satisfy Section 10(a); or

                  (iv) any breach by the Company of any other
         material provision of this Agreement.

                  (f) "Incapacity" means any physical or mental illness or
disability of the Executive which continues for a period of six consecutive
months or more and which at any time after such six-month period the Board shall
reasonably determine renders the Executive incapable of performing his or her
duties during the remainder of the Employment Period.

                  (g) "Operative Date" means the date on which a Change in
         Control shall have occurred.

                  SECTION 2. Employment Period. The Company hereby agrees to
continue the Executive in its employ, and the Executive hereby agrees to remain
in the employ of the Company subject to the terms and conditions of this Agree-
ment, for the period commencing on the Operative Date and ending on the later of
(i) September 30, 2000 and (ii) the third anniversary of the Operative Date (the
"Employment Period").

                  SECTION 3.  Terms of Employment.  (a)  Position and Duties.
(i)  During the Employment Period:  (A) the Executive's position (including
status, offices, titles, reporting requirements, authority, duties and
responsibilities shall be at least commensurate in all material respects with
the most significant of those held, exercised and assigned immediately prior
to the Operative Date, and (B) the Executive's services shall be performed at
the location at which the Executive was based on the Operative Date and the
Company shall not require the Executive to travel on Company business to a
substantially greater extent than required immediately before the Operative
Date, except for travel and temporary assignments which are reasonably required
for the full discharge of the Executive's responsibilities and which are
consistent with the Executive's being so based.

                  (ii) During the Employment Period, and excluding any periods
of vacation and sick leave to which the Executive is entitled, the Executive
agrees to devote

                                                                               4

reasonable attention and time during normal business hours to the business and
affairs of the Company and, to the extent necessary to discharge the
responsibilities assigned to the Executive hereunder, to use the Executive's
reasonable best efforts to perform faithfully and efficiently such
responsibilities. All such services as an employee or officer will be subject to
the direction and control of the Chief Executive Officer of the Company or of an
appropriate senior official designated by such Chief Executive Officer.

                  (b)  Compensation.  (i)  Salary and Bonus.  During the first
year of the Executive's Employment Period the Executive will receive
compensation at an annual rate equal to the sum of (A) a salary ("Annual Base
Salary") not less than the Executive's annualized salary in effect immediately
prior to the Operative Date, plus (B) a bonus ("Annual Bonus") not less than
the aggregate amount of the Executive's highest bonus award under the Key
Employees Incentive Plan or any substitute or successor plan for the last three
calendar years preceding the Operative Date. During the Employment Period, on
each anniversary of the Operative Date the Executive's compensation in effect
on such anniversary date shall be increased for the remaining Employment Period
by not less than the higher of (A) 5% or (B) 80% of the percentage change in
the Consumer Price Index (All Urban Consumers) for the twelve month period
ended immediately prior to the month in which such anniversary date occurs.

                  (ii) Incentive, Savings and Retirement Plans. During the
Employment Period, the Executive will be entitled to (A) continue to participate
in all incentive, savings and retirement plans and programs generally applicable
to full-time officers or employees of the Company, including, with out
limitation, the Company's Pension-Retirement Plan, Pension Equalization Plan,
Savings-Investment Plan, Employee Stock Purchase Plan and Key Employees Deferred
Compensation Program, or (B) participate in incentive, savings and retirement
plans and programs of a successor to the Company which have benefits that are
not less favorable to the Executive.

                  (iii) Welfare Benefit Plans. During the Employment Period, the
Executive and/or the Executive's family or beneficiary, as the case may be,
shall be eligible to (A) participate in and shall receive all benefits under
welfare benefit plans and programs generally applicable to full-time officers or
employees of the Company, including, without limitation, medical, disability,
group life, accidental death and travel accident insurance plans and

                                                                               5

programs, or (B) participate in welfare benefit plans and programs of a
successor to the Company which have benefits that are not less favorable to the
Executive.

                  (iv) Business Expenses. During the Employment Period the
Company shall, in accordance with policies then in effect with respect to the
payment of expenses, pay or reimburse the Executive for all reasonable
out-of-pocket travel and other expenses (other than ordinary commuting expenses)
incurred by the Executive in performing services hereunder. All such expenses
shall be accounted for in such reasonable detail as the Company may require.

                  (v) Vacations. The Executive shall be entitled to periods of
vacation not less than those to which the Executive was entitled immediately
prior to the Operative Date.

                  SECTION 4.   Termination of Employment.

                  (a) Death or Incapacity. The Executive's employment shall
terminate automatically upon the Executive's death during the Employment Period.
The Executive's employment shall cease and terminate on the date of
determination by the Board that the Incapacity of the Executive has occurred
during the Employment Period ("Incapacity Effective Date").

                  (b) Cause. The Company may terminate the Executive's
employment for Cause, as defined herein, pursuant to the Board passing a
resolution that such Cause exists.

                  (c)  Good Reason.  The Executive may terminate his
or her employment for Good Reason, as defined herein.

                  (d) Notice of Termination. Any termination by the Company for
Cause or Incapacity, or by the Executive for Good Reason, shall be communicated
by Notice of Termination to the other party hereto given in accordance with
Section 12 of this Agreement. For purposes of this Agreement, a "Notice of
Termination" means a written notice which (i) indicates the specific termination
provision in this Agreement relied upon, (ii) to the extent applicable, sets
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Executive's employment under the provision so
indicated, (iii) in the case of termination by the Company for Cause or for
Incapacity, confirms that such termination is pursuant to a resolution of the
Board, and (iv) if the Date of

                                                                               6

Termination (as defined below) is other than the date of receipt of such notice,
specifies the termination date (which date shall be not more than 30 days after
the giving of such notice). The failure by the Executive or the Company to set
forth in the Notice of Termination any fact or circumstance which contributes to
a showing of Good Reason, Incapacity or Cause shall not serve to waive any right
of the Executive or the Company, respectively, hereunder or preclude the
Executive or the Company, respectively, from asserting such fact or circumstance
in enforcing the Executive's or the Company's rights hereunder.

                  (e) Date of Termination. "Date of Termination" means (i) if
the Executive's employment is terminated by the Company for Cause or by the
Executive for Good Reason, the date of receipt of the Notice of Termination or
any later date specified therein, as the case may be, (ii) if the Executive's
employment is terminated by the Company other than for Cause or Incapacity, the
Date of Termination shall be the date on which the Company notifies the
Executive of such termination, and (iii) if the Executive's employment is
terminated by reason of death or Incapacity, the Date of Termination shall be
the date of death of the Executive or the Incapacity Effective Date, as the case
may be.

                  SECTION 5.  Obligations of the Company Upon Termination. (a)
Termination for Good Reason or for Reasons Other Than for Cause, Death or
Incapacity.  If, during the Employment Period, the Company shall terminate
the Executive's employment other than for Cause or Incapacity or the Executive
shall terminate his or her employment for Good Reason:

                  (i) the Company shall pay to the Executive in a lump sum in
         cash within 30 days after the Date of Termination the aggregate of the
         following amounts:

                           (A) the sum of (1) the Executive's currently
                  effective Annual Base Salary through the Date of Termination
                  to the extent not theretofore paid, (2) the product of (x) the
                  currently effective Annual Bonus and (y) a fraction, the
                  numerator of which is the number of days in the current fiscal
                  year through the Date of Termination, and the denominator of
                  which is 365 and (3) any compensation previously deferred by
                  the Executive (together with any accrued interest or earnings
                  thereon) and any accrued vacation pay, in each case to the
                  extent not theretofore paid (the sum of the amounts described
                  in clauses (1), (2), and

                                                                               7

                  (3) shall be hereinafter referred to as the

                  "Accrued Obligations"); and

                           (B) the amount equal to the product of (1) three
                  (plus a fraction, the numerator of which is the number of days
                  from the Date of Termination through September 30, 1997, if
                  any, and the denominator of which is 365) and (2) the sum of
                  (x) the Executive's Annual Base Salary and (y) his or her
                  Annual Bonus;

                  (ii) in addition to the retirement benefits to which the
         Executive is entitled under the Company's Pension-Retirement Plan and
         Pension Equalization Plan or any successor plans thereto (collectively,
         the "Pension Plans"), the Company shall pay the Executive the excess of
         (x) the retirement pension which the Executive would have accrued under
         the terms of the Pension Plans (without regard to any amendment to the
         Pension Plans made subsequent to a Change in Control and on or prior to
         the Date of Termination, which amendment adversely affects in any
         manner the computation of retirement benefits thereunder), determined
         as if the Executive were fully vested thereunder and had accumulated
         (after the Date of Termination) thirty-six additional months of Benefit
         Accrual Service credit (as such term is defined in the Pension Plans)
         thereunder and treating the amounts paid under clause (i)(B) of this
         Section 5(a) as compensation paid during a thirty-six month period for
         purposes of calculating Annual Salary and benefits under the Pension
         Plans, over (y) the retirement pension which the Executive had then
         accrued pursuant to the provisions of the Pension Plans, such pension
         benefits to thereafter be paid and funded in accordance with the terms
         of the Pension Plans and the Trust Agreement dated as of September 16,
         1994, by and between the Company and The Chase Manhattan Bank (N.A.),
         as Trustee;

                  (iii) for three years after the Executive's Date of
         Termination, or such longer period as may be provided by the terms of
         the appropriate plan, program, practice or policy, the Company shall
         continue benefits to the Executive and/or the Executive's family at
         least equal to those which would have been provided to them in
         accordance with benefit plans, programs, practices and policies,
         including, without limitation, those described in Section 3(b)(iii) of
         this Agreement if the Executive's employment had not been terminated
         or, if

                                                                               8

         more favorable to the Executive, as in effect generally at any time
         thereafter, provided, however, that if the Executive becomes reemployed
         with another employer and is eligible to receive medical benefits under
         another employer-provided plan, the medical benefits shall be secondary
         to those provided under such other plan during such applicable period
         of eligibility and further provided, however, that the rights of the
         Executive and/or the Executive's family under Section 4980B(f) of the
         Code shall commence at the end of such three-year period;

                  (iv) the Company shall, at its sole expense as incurred,
         provide the Executive with reasonable out-placement services for a
         period of up to one year from the Date of Termination, the provider of
         which shall be selected by the Executive in his or her sole discretion;

                  (v) the Company shall pay in cash, at the request of the
         Executive, the spread between the option price and market value with
         respect to all unexercised stock options granted before the Date of
         Termination, whether or not such options are exercisable on the date of
         such request. Market value shall be deemed to be the last closing price
         for the stock subject to such option on the New York Stock Exchange on
         the Date of Termination or, should the stock cease to be listed on such
         Exchange prior to the Date of Termination, on the last date on which
         such stock was traded; and

                  (vi) to the extent not theretofore paid or provided, the
         Company shall timely pay or provide to the Executive any other amounts
         or benefits required to be paid or provided or which the Executive is
         eligible to receive under any plan, program, policy or practice or
         contract or agreement of the Company and its Affiliates, including
         earned but unpaid stock and similar compensation (such other amounts
         and benefits shall be hereinafter referred to as the "Other Benefits").

                  (b) Death or Incapacity. If the Executive's employment is
terminated by reason of the Executive's death or Incapacity during the
Employment Period, this Agreement shall terminate without further obligations to
the Executive's legal representatives under this Agreement, other than for (i)
timely payment of Accrued Obligations and (ii) provision by the Company of death
benefits or disability benefits for termination due to death or Incapacity,

                                                                               9

respectively, in accordance with Section 3(b)(iii) as in effect at the Operative
Date or, if more favorable to the Executive, at the Executive's Date of
Termination.

                  (c) Cause; Other than for Good Reason. If the Executive's
employment shall be terminated for Cause during the Employment Period, this
Agreement shall terminate without further obligations to the Executive other
than timely payment to the Executive of (x) the Executive's currently effective
Annual Base Salary through the Date of Termination, (y) the amount of any
compensation previously deferred by the Executive and any and all amounts
matched by the Company or any of the Affiliates, including, without limitation,
all proceeds thereof and all amounts attributable thereto, and (z) Other
Benefits, in each case to the extent theretofore unpaid. If the Executive
voluntarily terminates employment during the Employment Period, excluding a
termination for Good Reason, this Agreement shall terminate without further
obligations to the Executive, other than for the timely payment of Accrued
Obligations and Other Benefits.

                  SECTION 6. Non-exclusivity of Rights. Nothing in this
Agreement shall prevent or limit the Executive's continuing or future
participation in any plan, program, policy or practice provided by the Company
or any of its Affiliates and for which the Executive may qualify, nor, subject
to Section 15(c), shall anything herein limit or otherwise affect such rights as
the Executive may have under any contract or agreement with the Company or any
of its Affiliates. Amounts which are vested benefits or which the Executive is
otherwise entitled to receive under any plan, policy, practice or program of or
any contract or agreement with the Company or any of its Affiliates at or
subsequent to the Date of Termination shall be payable in accordance with such
plan, policy, practice or program or contract or agreement except as explicitly
modified by this Agreement.

                  SECTION 7. No Mitigation. The Company agrees that, if the
Executive's employment is terminated during the term of this Agreement for any
reason, the Executive is not required to seek other employment or to attempt in
any way to reduce any amounts payable to the Executive hereunder. Further,
except as provided in Section 5(a)(iii) hereof, the amount of any payment or
benefit provided hereunder shall not be reduced by any compensation earned by
the Executive as the result of employment by another employer, by retirement
benefits, by offset against any amount claimed to be owed by the Executive to
the Company, or otherwise.

                                                                              10

                  SECTION 8. Full Settlement. Subject to full compliance by the
Company with all of its obligations under this Agreement, this Agreement shall
be deemed to constitute the settlement of such claims as the Executive might
otherwise be entitled to assert against the Company by reason of the
termination of the Executive's employment for any reason during the Employment
Period. The Company's obligation to make the payments provided for in this
Agreement and otherwise to perform its obligations hereunder shall not be
affected by any set-off, counterclaim, recoupment, defense or other claim, right
or action which the Company may have against the Executive or others. In no
event shall the Executive be obligated to seek other employment or take any
other action by way of mitigation of the amounts payable to the Executive under
any of the provisions of this Agreement and such amounts shall not be reduced,
except as explicitly provided in Section 5(a)(iii), whether or not the Executive
obtains other employment. The Company agrees to pay as incurred, to the full
extent permitted by law, all legal fees and expenses which the Executive may
reasonably incur as a result of any contest (regardless of the outcome thereof)
by the Company, the Executive or others of the validity or enforceability of, or
liability under, any provision of this Agreement or any guarantee of
performance thereof.

                           SECTION 9.  Certain Additional Payments by
the Company. Anything in this Agreement to the contrary notwithstanding, in the
event that it shall be determined that any payment or distribution by the
Company to or for the benefit of the Executive (whether paid or payable or
distributed or distributable) pursuant to the terms of this Agreement or
otherwise (collectively, the "Payments") but determined without regard to any
additional payments required under this Section 9, would be subject to the
excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as
amended, the Executive shall be entitled to receive an additional payment (the
"Gross-Up Payment") in an amount equal to (i) the amount of the excise tax
imposed on the Executive in respect of the Payments (the "Excise Tax") plus (ii)
all federal, state and local income, employment and excise taxes (including any
interest or penalties imposed with respect to such taxes) imposed on the
Executive in respect of the Gross-Up Payment, such that after payments of all
such taxes (including any applicable interest or penalties) on the Gross-Up
Payment, the Executive retains a portion of the Gross-Up Payment equal to the
Excise Tax.

                                                                              11

                  SECTION 10.  Successors; Binding Agreement.

                  (a) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Company, by agreement, in
form and substance satisfactory to the Executive, expressly to assume and agree
to perform this Agreement in the same manner and to the same extent that the
Company would be required to perform if no such succession had taken place.
Failure of the Company to obtain such assumption and agreement prior to the
effectiveness of any such succession will be a breach of this Agreement and
entitle the Executive to compensation from the Company in the same amount and on
the same terms as the Executive would be entitled to hereunder had the Company
terminated the Executive for reason other than Cause or Incapacity on the
succession date. As used in this Agreement, "the Company" means the Company as
defined in the preamble to this Agreement and any successor to its business or
assets which executes and delivers the agreement provided for in this Section 10
or which otherwise becomes bound by all the terms and provisions of this
Agreement by operation of law or otherwise.

                  (b) This Agreement shall be enforceable by the Executive's
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.

                  SECTION 11. Non-assignability. This Agreement is personal in
nature and neither of the parties hereto shall, without the consent of the
other, assign or transfer this Agreement or any rights or obligations hereunder,
except as provided in Section 10 hereof. Without limiting the foregoing, the
Executive's right to receive payments hereunder shall not be assignable or
transferable, whether by pledge, creation of a security interest or otherwise,
other than a transfer by his or her will or by the laws of descent or
distribution, and, in the event of any attempted assignment or transfer by the
Executive contrary to this Section, the Company shall have no liability to pay
any amount so attempted to be assigned or transferred.

                  SECTION 12.  Notices.  For the purpose of this Agreement,
notices and all other communications provided for herein shall be in writing
and shall be deemed to have been duly given when delivered or mailed by United
States

                                                                              12

registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:

         If to the Executive:                       Mr. Joseph C. Farrell
                                                    4917 Lockgreen Circle
                                                    Richmond, VA 23226

         If to the Company:                         The Pittston Company
                                                    1000 Virginia Center Parkway
                                                    P.O. Box 4229
                                                    Glen Allen, VA 23058-4229
                                                    Attention of Corporate
                                                     Secretary

or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.

                  SECTION 13.  Operation of Agreement.  (a) This Agreemen
shall be effective immediately upon its execution and continue to be effective
so long as the Executive is employed by the Company or any of its Affiliates.
The provisions of this Agreement do not take effect until the Operative Date.

                  (b) Notwithstanding anything in Section 13(a) to the contrary,
this Agreement shall, unless extended by written agreement of the parties
hereto, terminate, without further action by the parties hereto, on the tenth
anniversary of the date of this Agreement if a Change in Control shall not have
occurred prior to such tenth anniversary date.

                  SECTION 14.  Governing Law.  The validity, interpretation,
construction and performance of this Agreement shall be governed by the laws
of the Commonwealth of Virginia without reference to principles of conflict of
laws.

                  SECTION 15. Miscellaneous. (a) This Agreement contains the
entire understanding with the Executive with respect to the subject matter
hereof and supersedes any and all prior agreements or understandings, written or
oral, relating to such subject matter. No provisions of this Agreement may be
modified, waived or discharged unless such modification, waiver or discharge is
agreed to in writing signed by the Executive and the Company.

                  (b) The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.

                                                                              13

                  (c) Except as provided herein, this Agreement shall not be
construed to affect in any way any rights or obligations in relation to the
Executive's employment by the Company or any of its Affiliates prior to the
Operative Date or subsequent to the end of the Employment Period.

                  (d) This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same Agreement.

                  (e) The Company may withhold from any benefits payable under
this Agreement all Federal, state, city or other taxes as shall be required
pursuant to any law or governmental regulation or ruling.

                  (f) The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect.

                  IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed and delivered as of the day and year first above set forth.

                                  THE PITTSTON COMPANY,

                                  by /s/ Frank T. Lennon
                                  -----------------------
                                  Frank T. Lennon
                                  Vice President -
                                  Human Resources and
                                  Administration

                                  /s/ Joseph C. Farrell
                                  ------------------------
                                  Joseph C. Farrell

 

                                                               Exhibit 10(l)(ii)

                               EXECUTIVE AGREEMENT
                           dated as of April 23, 1997,
                          between The Pittston Company,
                     a Virginia corporation ("the Company"),
                        and Executive (the "Executive").

                  The Company and the Executive agree to terminate as of the
date hereof the letter agreement between the Executive and the Company dated
____________, regarding the Executive's employment in the event of a "Change in
Control," and to substitute therefor this Agreement, and the Company and the
Executive further agree as follows:

                  SECTION 1.  Definitions.  As used in this
Agreement:

                  (a) "Affiliate" has the meaning ascribed thereto in Rule 12b-2
pursuant to the Securities Exchange Act of 1934, as amended (the "Act").

                  (b)  "Board" means the Board of Directors of the
Company.

                  (c) "Cause" means (i) an act or acts of dishonesty on the
Executive's part which are intended to result in the Executive's substantial
personal enrichment at the expense of the Company or (ii) repeated material
violations by the Executive of the Executive's obligations under Section 3 or
Section 11 which are demonstrably willful and deliberate on the Executive's part
and which have not been cured by the Executive within a reasonable time after
written notice to the Executive specifying the nature of such violations.
Notwithstanding the foregoing, the Executive shall not be deemed to have been
terminated for Cause without (1) reasonable notice to the Executive setting
forth the reasons for the Company's intention to terminate for Cause, (2) an
opportunity for the Executive, together with his counsel, to be heard before the
Board, and (3) delivery to the Executive of a Notice of Termination, as defined
in Section 4(d) hereof, from the Board finding that in the good faith opinion of
three-quarters (3/4) of the Board the Executive was guilty of conduct set forth
above in clause (i) or (ii) hereof, and specifying the particulars thereof in
detail.

                  (d)  A "Change in Control" shall be deemed to
occur (1) upon the approval of the shareholders of the

                                                                               2

Company (or if such approval is not required, the approval of the Board) of (A)
any consolidation or merger of the Company in which the Company is not the
continuing or surviving corporation or pursuant to which the shares of all
classes of the Company's Common Stock would be converted into cash, securities
or other property other than a consolidation or merger in which holders of the
total voting power in the election of directors of the Company of all classes of
Common Stock outstanding (exclusive of shares held by the Company's Affiliates)
(the "Total Voting Power") immediately prior to the consolidation or merger will
have the same proportionate ownership of the total voting power in the election
of directors of the surviving corporation immediately after the consolidation or
merger, or (B) any sale, lease, exchange or other transfer (in one transaction
or a series of transactions) of all or substantially all the assets of the
Company, (2) when any "person" (as defined in Section 13(d) of the Act), other
than the Company, its Affiliates or an employee benefit plan or trust maintained
by the Company or its Affiliates, shall become the "beneficial owner" (as
defined in Rule 13d-3 under the Act), directly or indirectly, of more than 20%
of the Total Voting Power or (3) if at any time during a period of two
consecutive years, individuals who at the beginning of such period constituted
the Board shall cease for any reason to constitute at least a majority thereof,
unless the election by the Company's shareholders of each new director during
such two-year period was approved by a vote of at least two-thirds of the
directors then still in office who were directors at the beginning of such
two-year period.

                  (e)  "Good Reason" means:

                  (i) without the Executive's express written consent and
         excluding for this purpose an isolated, insubstantial and inadvertent
         action not taken in bad faith and which is remedied by the Company or
         its Affiliates promptly after receipt of notice thereof given by the
         Executive, (A) the assignment to the Executive of any duties
         inconsistent in any respect with the Executive's position (including
         status, offices, titles and reporting requirements), authority, duties
         or responsibilities as contemplated by Section 3(a) hereof, (B) any
         other action by the Company or its Affiliates which results in a
         diminution in such position, authority, duties or responsibilities, or
         (C) any failure by the Company to comply with any of the provisions of
         Section 3(b) hereof;

                  (ii) without the Executive's express written consent, the
         Company's requiring the Executive's work

                                                                               3

         location to be other than as set forth in Section 3(a)(i);

                  (iii) any failure by the Company to comply with and
         satisfy Section 10(a); or

                  (iv) any breach by the Company of any other
         material provision of this Agreement.

                  (f) "Incapacity" means any physical or mental illness or
disability of the Executive which continues for a period of six consecutive
months or more and which at any time after such six-month period the Board shall
reasonably determine renders the Executive incapable of performing his or her
duties during the remainder of the Employment Period.

                  (g) "Operative Date" means the date on which a Change in
         Control shall have occurred.

                  SECTION 2. Employment Period. The Company hereby agrees to
continue the Executive in its employ, and the Executive hereby agrees to remain
in the employ of the Company subject to the terms and conditions of this
Agreement, for the period commencing on the Operative Date and ending on the
third anniversary of such date (the "Employment Period").

                  SECTION 3.  Terms of Employment.  (a)  Position and Duties.
(i)  During the Employment Period:  (A) the Executive's position (including
status, offices, titles, reporting requirements, authority, duties and
responsibilities shall be at least commensurate in all material respects
with the most significant of those held, exercised and assigned immediately
prior to the Operative Date, and (B) the Executive's services shall be
performed at the location at which the Executive was based on the Operative
Date and the Company shall not require the Executive to travel on Company
business to a substantially greater extent than required immediately before
the Operative Date, except for travel and temporary assignments which are
reasonably required for the full discharge of the Executive's responsibilities
and which are consistent with the Executive's being so based.

                  (ii) During the Employment Period, and excluding any periods
of vacation and sick leave to which the Executive is entitled, the Executive
agrees to devote reasonable attention and time during normal business hours to
the business and affairs of the Company and, to the extent necessary to
discharge the responsibilities assigned to the Executive hereunder, to use the
Executive's reason-

                                                                               4

able best efforts to perform faithfully and efficiently such responsibilities.
All such services as an employee or officer will be subject to the direction
and control of the Chief Executive Officer of the Company or of an appropriate
senior official designated by such Chief Executive Officer.

                  (b)  Compensation.  (i)  Salary and Bonus. During the first
year of the Executive's Employment Period the Executive will receive
compensation at an annual rate equal to the sum of (A) a salary ("Annual Base
Salary") not less than the Executive's annualized salary in effect immediately
prior to the Operative Date, plus (B) a bonus ("Annual Bonus") not less than
the aggregate amount of the Executive's highest bonus award under the Key
Employees Incentive Plan or any substitute or successor plan for the last
three calendar years preceding the Operative Date. During the Employment Period,
on each anniversary of the Operative Date the Executive's compensation in effect
on such anniversary date shall be increased for the remaining Employment Period
by not less than the higher of (A) 5% or (B) 80% of the percentage change in
the Consumer Price Index (All Urban Consumers) for the twelve month period
ended immediately prior to the month in which such anniversary date occurs.

                  (ii) Incentive, Savings and Retirement Plans. During the
Employment Period, the Executive will be entitled to (A) continue to participate
in all incentive, savings and retirement plans and programs generally applicable
to full-time officers or employees of the Company, including, without
limitation, the Company's Pension-Retirement Plan, Pension Equalization Plan,
Savings-Investment Plan, Employee Stock Purchase Plan and Key Employees Deferred
Compensation Program, or (B) participate in incentive, savings and retirement
plans and programs of a successor to the Company which have benefits that are
not less favorable to the Executive.

                  (iii) Welfare Benefit Plans. During the Employment Period, the
Executive and/or the Executive's family or beneficiary, as the case may be,
shall be eligible to (A) participate in and shall receive all benefits under
welfare benefit plans and programs generally applicable to full-time officers or
employees of the Company, including, without limitation, medical, disability,
group life, accidental death and travel accident insurance plans and programs,
or (B) participate in welfare benefit plans and programs of a successor to the
Company which have benefits that are not less favorable to the Executive.

                                                                               5

                  (iv) Business Expenses. During the Employment Period the
Company shall, in accordance with policies then in effect with respect to the
payment of expenses, pay or reimburse the Executive for all reasonable
out-of-pocket travel and other expenses (other than ordinary commuting expenses)
incurred by the Executive in performing services hereunder. All such expenses
shall be accounted for in such reasonable detail as the Company may require.

                  (v) Vacations. The Executive shall be entitled to periods of
vacation not less than those to which the Executive was entitled immediately
prior to the Operative Date.

                  SECTION 4.   Termination of Employment.

                  (a) Death or Incapacity. The Executive's employment shall
terminate automatically upon the Executive's death during the Employment Period.
The Executive's employment shall cease and terminate on the date of
determination by the Board that the Incapacity of the Executive has occurred
during the Employment Period ("Incapacity Effective Date").

                  (b) Cause. The Company may terminate the Executive's
employment for Cause, as defined herein, pursuant to the Board passing a
resolution that such Cause exists.

                  (c)      Good Reason.  The Executive may terminate his
or her employment for Good Reason, as defined herein.

                  (d) Notice of Termination. Any termination by the Company for
Cause or Incapacity, or by the Executive for Good Reason, shall be communicated
by Notice of Termination to the other party hereto given in accordance with
Section 12 of this Agreement. For purposes of this Agreement, a "Notice of
Termination" means a written notice which (i) indicates the specific termination
provision in this Agreement relied upon, (ii) to the extent applicable, sets
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Executive's employment under the provision so
indicated, (iii) in the case of termination by the Company for Cause or for
Incapacity, confirms that such termination is pursuant to a resolution of the
Board, and (iv) if the Date of Termination (as defined below) is other than the
date of receipt of such notice, specifies the termination date (which date shall
be not more than 30 days after the giving of such notice). The failure by the
Executive or the

                                                                               6

Company to set forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason, Incapacity or Cause shall not serve to
waive any right of the Executive or the Company, respectively, here under or
preclude the Executive or the Company, respectively, from asserting such fact or
circumstance in enforcing the Executive's or the Company's rights hereunder.

                  (e) Date of Termination. "Date of Termination" means (i) if
the Executive's employment is terminated by the Company for Cause or by the
Executive for Good Reason, the date of receipt of the Notice of Termination or
any later date specified therein, as the case may be, (ii) if the Executive's
employment is terminated by the Company other than for Cause or Incapacity, the
Date of Termination shall be the date on which the Company notifies the
Executive of such termination, and (iii) if the Executive's employment is
terminated by reason of death or Incapacity, the Date of Termination shall be
the date of death of the Executive or the Incapacity Effective Date, as the case
may be.

                  SECTION 5.  Obligations of the Company Upon Termination. (a)
Termination for Good Reason or for Reasons Other Than for Cause, Death or
Incapacity.  If, during the Employment Period, the Company shall terminate
the Executive's employment other than for Cause or Incapacity or the Executive
shall terminate his or her employment for Good Reason:

                  (i) the Company shall pay to the Executive in a lump sum in
         cash within 30 days after the Date of Termination the aggregate of the
         following amounts:

                           (A) the sum of (1) the Executive's currently
                  effective Annual Base Salary through the Date of Termination
                  to the extent not theretofore paid, (2) the product of (x) the
                  currently effective Annual Bonus and (y) a fraction, the
                  numerator of which is the number of days in the current fiscal
                  year through the Date of Termination, and the denominator of
                  which is 365 and (3) any compensation previously deferred by
                  the Executive (together with any accrued interest or earnings
                  thereon) and any accrued vacation pay, in each case to the
                  extent not theretofore paid (the sum of the amounts described
                  in clauses (1), (2), and (3) shall be hereinafter referred to
                  as the "Accrued Obligations"); and

                                                                               7

                           (B) the amount equal to the product of (1) three and
                  (2) the sum of (x) the Executive's Annual Base Salary and (y)
                  his or her Annual Bonus;

                  (ii) in addition to the retirement benefits to which the
         Executive is entitled under the Company's Pension-Retirement Plan and
         Pension Equalization Plan or any successor plans thereto (collectively,
         the "Pension Plans"), the Company shall pay the Executive the excess of
         (x) the retirement pension which the Executive would have accrued under
         the terms of the Pension Plans (without regard to any amendment to the
         Pension Plans made subsequent to a Change in Control and on or prior to
         the Date of Termination, which amendment adversely affects in any
         manner the computation of retirement benefits thereunder), determined
         as if the Executive were fully vested thereunder and had accumulated
         (after the Date of Termination) thirty-six additional months of Benefit
         Accrual Service credit (as such term is defined in the Pension Plans)
         thereunder and treating the amounts paid under clause (i)(B) of this
         Section 5(a) as compensation paid during a thirty-six month period for
         purposes of calculating Average Salary and benefits under the Pension
         Plans, over (y) the retirement pension which the Executive had then
         accrued pursuant to the provisions of the Pension Plans, such pension
         benefits to thereafter be paid and funded in accordance with the terms
         of the Pension Plans and the Trust Agreement dated as of September 16,
         1994, by and between the Company and The Chase Manhattan Bank (N.A.),
         as Trustee;

                  (iii) for three years after the Executive's Date of
         Termination, or such longer period as may be provided by the terms of
         the appropriate plan, program, practice or policy, the Company shall
         continue benefits to the Executive and/or the Executive's family at
         least equal to those which would have been provided to them in
         accordance with benefit plans, programs, practices and policies,
         including, without limitation, those described in Section 3(b)(iii) of
         this Agreement if the Executive's employment had not been terminated
         or, if more favorable to the Executive, as in effect generally at any
         time thereafter, provided, however, that if the Executive becomes
         reemployed with another employer and is eligible to receive medical
         benefits under another employer-provided plan, the medical benefits
         shall be secondary to those provided under such other plan

                                                                               8

         during such applicable period of eligibility and further provided,
         however, that the rights of the Executive and/or the Executive's family
         under Section 4980B(f) of the Code shall commence at the end of such
         three-year period;

                  (iv) the Company shall, at its sole expense as incurred,
         provide the Executive with reasonable outplacement services for a
         period of up to one year from the Date of Termination, the provider of
         which shall be selected by the Executive in his or her sole discretion;

                  (v) the Company shall pay in cash, at the request of the
         Executive, the spread between the option price and market value with
         respect to all unexercised stock options granted before the Date of
         Termination, whether or not such options are exercisable on the date of
         such request. Market value shall be deemed to be the last closing price
         for the stock subject to such option on the New York Stock Exchange on
         the Date of Termination or, should the stock cease to be listed on such
         Exchange prior to the Date of Termination, on the last date on which
         such stock was traded; and

                  (vi) to the extent not theretofore paid or provided, the
         Company shall timely pay or provide to the Executive any other amounts
         or benefits required to be paid or provided or which the Executive is
         eligible to receive under any plan, program, policy or practice or
         contract or agreement of the Company and its Affiliates, including
         earned but unpaid stock and similar compensation (such other amounts
         and benefits shall be hereinafter referred to as the "Other Benefits").

                  (b) Death or Incapacity. If the Executive's employment is
terminated by reason of the Executive's death or Incapacity during the
Employment Period, this Agreement shall terminate without further obligations to
the Executive's legal representatives under this Agreement, other than for (i)
timely payment of Accrued Obligations and (ii) provision by the Company of death
benefits or disability benefits for termination due to death or Incapacity,
respectively, in accordance with Section 3(b)(iii) as in effect at the Operative
Date or, if more favorable to the Executive, at the Executive's Date of
Termination.

                  (c)      Cause; Other than for Good Reason.  If the
Executive's employment shall be terminated for Cause during

                                                                               9

the Employment Period, this Agreement shall terminate without further
obligations to the Executive other than timely payment to the Executive of (x)
the Executive's currently effective Annual Base Salary through the Date of
Termination, (y) the amount of any compensation previously deferred by the
Executive and any and all amounts matched by the Company or any of the
Affiliates, including, without limitation, all proceeds thereof and all amounts
attributable thereto, and (z) Other Benefits, in each case to the extent
theretofore unpaid. If the Executive voluntarily terminates employment during
the Employment Period, excluding a termination for Good Reason, this Agreement
shall terminate without further obligations to the Executive, other than for the
timely payment of Accrued Obligations and Other Benefits.

                  SECTION 6. Non-exclusivity of Rights. Nothing in this
Agreement shall prevent or limit the Executive's continuing or future
participation in any plan, program, policy or practice provided by the Company
or any of its Affiliates and for which the Executive may qualify, nor, subject
to Section 15(c), shall anything herein limit or otherwise affect such rights as
the Executive may have under any contract or agreement with the Company or any
of its Affiliates. Amounts which are vested benefits or which the Executive is
otherwise entitled to receive under any plan, policy, practice or program of or
any contract or agreement with the Company or any of its Affiliates at or
subsequent to the Date of Termination shall be payable in accordance with such
plan, policy, practice or program or contract or agreement except as explicitly
modified by this Agreement.

                  SECTION 7. No Mitigation. The Company agrees that, if the
Executive's employment is terminated during the term of this Agreement for any
reason, the Executive is not required to seek other employment or to attempt in
any way to reduce any amounts payable to the Executive hereunder. Further,
except as provided in Section 5(a)(iii) hereof, the amount of any payment or
benefit provided hereunder shall not be reduced by any compensation earned by
the Executive as the result of employment by another employer, by retirement
benefits, by offset against any amount claimed to be owed by the Executive to
the Company, or otherwise.

                  SECTION 8. Full Settlement. Subject to full compliance by the
Company with all of its obligations under this Agreement, this Agreement shall
be deemed to constitute the settlement of such claims as the Executive might
otherwise be entitled to assert against the Company by reason of the
termination of the Executive's employment for any reason

                                                                              10

during the Employment Period. The Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against the
Executive or others. In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to the Executive under any of the provisions of this Agreement and such amounts
shall not be reduced, except as explicitly provided in Section 5(a)(iii),
whether or not the Executive obtains other employment. The Company agrees to pay
as incurred, to the full extent permitted by law, all legal fees and expenses
which the Executive may reasonably incur as a result of any contest (regardless
of the outcome thereof) by the Company, the Executive or others of the validity
or enforceability of, or liability under, any provision of this Agreement or
any guarantee of performance thereof.

                  SECTION 9. Certain Additional Payments by the Company.
Anything in this Agreement to the contrary notwithstanding, in the event that it
shall be determined that any payment or distribution by the Company to or for
the benefit of the Executive (whether paid or payable or distributed or
distributable) pursuant to the terms of this Agreement or otherwise
(collectively, the "Payments") but determined without regard to any additional
payments required under this Section 9, would be subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code of 1986, as amended, the
Executive shall be entitled to receive an additional payment (the "Gross-Up
Payment") in an amount equal to (i) the amount of the excise tax imposed on the
Executive in respect of the Payments (the "Excise Tax") plus (ii) all federal,
state and local income, employment and excise taxes (including any interest or
penalties imposed with respect to such taxes) imposed on the Executive in
respect of the Gross-Up Payment, such that after payments of all such taxes
(including any applicable interest or penalties) on the Gross-Up Payment, the
Executive retains a portion of the Gross-Up Payment equal to the Excise Tax.

                  SECTION 10.  Successors; Binding Agreement.

                  (a) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Company, by agreement, in
form and substance satisfactory to the Executive, expressly to assume and agree
to perform this Agreement in the same

                                                                              11

manner and to the same extent that the Company would be required to perform if
no such succession had taken place. Failure of the Company to obtain such
assumption and agreement prior to the effectiveness of any such succession will
be a breach of this Agreement and entitle the Executive to compensation from the
Company in the same amount and on the same terms as the Executive would be
entitled to hereunder had the Company terminated the Executive for reason other
than Cause or Incapacity on the succession date. As used in this Agreement, "the
Company" means the Company as defined in the preamble to this Agreement and any
successor to its business or assets which executes and delivers the agreement
provided for in this Section 10 or which otherwise becomes bound by all the
terms and provisions of this Agreement by operation of law or otherwise.

                  (b) This Agreement shall be enforceable by the Executive's
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.

                  SECTION 11. Non-assignability. This Agreement is personal in
nature and neither of the parties hereto shall, without the consent of the
other, assign or transfer this Agreement or any rights or obligations hereunder,
except as provided in Section 10 hereof. Without limiting the foregoing, the
Executive's right to receive payments hereunder shall not be assignable or
transferable, whether by pledge, creation of a security interest or otherwise,
other than a transfer by his or her will or by the laws of descent or
distribution, and, in the event of any attempted assignment or transfer by the
Executive contrary to this Section, the Company shall have no liability to pay
any amount so attempted to be assigned or transferred.

                  SECTION 12. Notices. For the purpose of this Agreement,
notices and all other communications provided for herein shall be in writing and
shall be deemed to have been duly given when delivered or mailed by United
States regis-

                                                                              12

 tered or certified mail, return receipt requested, postage prepaid,
addressed as follows:

         If to the Executive:       Executive

                                                    -----------------------
                                                    ------------------------

         If to the Company:                 The Pittston Company
                                                    1000 Virginia Center Parkway
                                                    P.O. Box 4229
                                                    Glen Allen, VA 23058-4229
                                                    Attention of Corporate
                                                      Secretary

or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.

                  SECTION 13.  Operation of Agreement.  (a) This Agreement
shall be effective immediately upon its execution and continue to be effective
so long as the Executive is employed by the Company or any of its Affiliates.
The provisions of this Agreement do not take effect until the Operative Date.

                  (b) Notwithstanding anything in Section 13(a) to the contrary,
this Agreement shall, unless extended by written agreement of the parties
hereto, terminate, without further action by the parties hereto, on the tenth
anniversary of the date of this Agreement if a Change in Control shall not have
occurred prior to such tenth anniversary date.

                  SECTION 14.  Governing Law.  The validity, interpretation,
construction and performance of this Agreement shall be governed by the laws
of the Commonwealth of Virginia without reference to principles of conflict of
laws.

                  SECTION 15. Miscellaneous. (a) This Agreement contains the
entire understanding with the Executive with respect to the subject matter
hereof and supersedes any and all prior agreements or understandings, written or
oral, relating to such subject matter. No provisions of this Agreement may be
modified, waived or discharged unless such modification, waiver or discharge is
agreed to in writing signed by the Executive and the Company.

                  (b) The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.

                                                                              13

                  (c) Except as provided herein, this Agreement shall not be
construed to affect in any way any rights or obligations in relation to the
Executive's employment by the Company or any of its Affiliates prior to the
Operative Date or subsequent to the end of the Employment Period.

                  (d) This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same Agreement.

                  (e) The Company may withhold from any benefits payable under
this Agreement all Federal, state, city or other taxes as shall be required
pursuant to any law or governmental regulation or ruling.

                  (f) The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect.

                  IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed and delivered as of the day and year first above set forth.

                                            THE PITTSTON COMPANY,

                                            by
                                            Joseph C. Farrell
                                            Chairman of the Board,
                                            President and Chief
                                            Executive Officer
 
                                            -------------------------
                                            Executive

 

                                                                Exhibit 10(o)(i)

                                                       NONE

 

                                                               Exhibit 10(o)(ii)

                               SEVERANCE AGREEMENT

SEVERANCE AGREEMENT dated as                  of between THE PITTSTON COMPANY, a
Virginia corporation ("the Company"), and                 (the "Executive").

                  The Executive is currently employed by the Company in a senior
executive capacity. The Company and the Board recognize that the Executive's
contribution to the growth and success of the Company has been substantial. The
Board desires to reinforce and encourage the continued attention and dedication
by the Executive to the Company's affairs as a member of the Company's senior
management. The Company believes it to be in the best interests of the Company
and its shareholders to identify and agree upon certain benefits and obligations
of the Executive in the event of the termination of his services and to record
those matters in this severance agreement (the "Agreement").

                  SECTION 1.  Definitions.  As used in this
Agreement:

                  (a)  "Board" means the Board of Directors of the
Company.

                  (b) "Cause" means (i) an act or acts of dishonesty on the
Executive's part which are intended to result in the Executive's substantial
personal enrichment at the expense of the Company or (ii) repeated material
violations by the Executive of the Executive's obligations hereunder which are
demonstrably willful and deliberate on the Executive's part and which have not
been cured by the Executive within a reasonable time after written notice to the
Executive specifying the nature of such violations. Notwithstanding the
foregoing, the Executive shall not be deemed to have been terminated for Cause
without (1) reasonable notice to the Executive setting forth the reasons for the
Company's intention to terminate for Cause, (2) an opportunity for the
Executive, together with his counsel, to be heard before the Board, and (3)
delivery to the Executive of a Notice of Termination from the Board finding that
in the good faith opinion of three-quarters (3/4) of the Board the Executive was
guilty of conduct set forth above in clause (i) or (ii) hereof, and specifying
the particulars thereof in detail.

                  (c) "Date of Termination" means (i) if the Executive's
employment is terminated by the Company for Cause or by the Executive for Good
Reason, the date of receipt of the Notice of Termination or any later date
specified therein, as the case may be, (ii) if the Executive's employment is
terminated by the Company other than for Cause or Incapacity, the Date of
Termination shall be the date on which the Company notifies the Executive of
such termination, and (iii) if the Executive's employment is terminated by
reason of death or Incapacity, the Date of Termination shall be the date of
death of the Executive or the effective date of the Incapacity, as the case may
be.

                  (d) "Disposition Date" means the earlier of (i) the date of
sale, lease, exchange or other transfer to a person previously unaffiliated with
the Company of greater than fifty (50%) percent of the assets or shares of
Brink's, Incorporated, Brink's Home Security, Inc., Pittston Coal Company,
Burlington Air Express Inc. or Pittston Mineral Ventures Company or their
respective successors and (ii) the date of the first public announcement of any
such sale, lease, exchange or other transfer which is subsequently completed.

                  (e)  "Good Reason" means:

                  (i) without the Executive's express written con sent and
         excluding for this purpose an isolated, insub stantial and inadvertent
         action not taken in bad faith and which is remedied by the Company or
         its affiliates promptly after receipt of notice thereof given by the
         Executive, (A) the assignment to the Executive of any duties
         inconsistent in any respect with the Executive's position (including
         status, offices, titles and reporting requirements), authority, duties
         or responsibilities as contemplated by Section 3(i) hereof, or (B) any
         other action or inaction by the Company or its affiliates which results
         in a diminution in such position, authority, duties or
         responsibilities;

                  (ii) without the Executive's express written consent, the
         Company's requiring the Executive's work location to be other than as
         set forth in Section 3(i);

                  (iii) any failure by the Company to comply with and
         satisfy Section 10(a); or

                  (iv) any breach by the Company of any other
         material provision of this Agreement.

                  (f)  "Incapacity" means any physical or mental
illness or disability of the Executive which continues for a

period of six consecutive months or more and which at any time after such
six-month period the Board shall reasonably determine renders the Executive
incapable of performing his or her duties during the remainder of the Employment
Period.

                  SECTION 2. Term of Employment Period. This Agreement shall
commence on the date hereof and shall continue in effect for so long as the
Executive shall be employed by the Company or any of its affiliates(the
"Employment Period"). In the event a Change in Control (as defined in the
Executive Agreement dated as of April 23, 1997, between the Company and the
Executive, as the same may from time to time be amended) shall occur during the
Employment Period, this Agreement shall be unaffected thereby, it being the
intention of the parties hereto that their rights and obligations shall be
governed by the terms of both such agreements such that, in the event of a
conflict in terms, the benefits most favorable to the Executive shall apply;
provided that there shall be no duplication of benefits as a result of the
operation of both agreements.

                  SECTION 3.  Terms of Employment.  Position and Duties. (i)
During the Employment Period:  (A) the Executive's position (including status
(for example, base salary and target bonus), offices, titles, reporting
requirements, authority, duties and responsibilities) shall be at least
commensurate in all material respects with the most significant of those held,
exercised and assigned immediately prior to any change thereof, and (B) the
Executive's services shall be performed at the location at which the Executive
was based on the date hereof and the Company shall not require the Executive
to travel on Company business to a substantially greater extent than required
immediately before the date hereof, except for travel and temporary assignments
which are reasonably required for the full discharge of the Executive's
responsibilities and which are consistent with the Executive's being so based.

                  (ii) During the Employment Period, and excluding any periods
of vacation and sick leave to which the Executive is entitled, the Executive
agrees to devote reasonable attention and time during normal business hours to
the business and affairs of the Company and, to the extent necessary to
discharge the responsibilities assigned to the Executive hereunder, to use the
Executive's reason able best efforts to perform faithfully and efficiently such
responsibilities. All such services as an employee or officer will be subject to
the direction and control of the Chief Executive Officer of the Company or of an
appropriate senior official designated by such Chief Executive Officer.

                  SECTION 4.  Obligations of the Company Upon Termination of
Employment.  (a)  Termination for Good Reason or for Reasons Other Than for
Cause, Death or Incapacity. If the Company shall terminate the Executive's
employment other than for Cause or Incapacity or the Executive shall terminate
his or her employment for Good Reason:

                  (i) the Company shall pay to the Executive in a lump sum in
         cash (or in stock if provided by a relevant plan), by the later of (I)
         30 days after the Date of Termination and (II) 10 business days after
         execution (without subsequent revocation) by the Executive of the
         Release required by Section 8(b) of this Agreement, as defined
         herebelow, the aggregate of the following amounts:

                           (A) the sum of (1) the Executive's currently
                  effective annual base salary through the Date of Termination
                  to the extent not theretofore paid, (2) the product of (x) a
                  bonus ("Annual Bonus") not less than the aggregate amount of
                  the Executive's highest bonus award under the Key Employees
                  Incentive Plan or any substitute or successor plan for the
                  last three calendar years preceding the Date of Termination
                  and (y) a fraction, the numerator of which is the number of
                  days in the current fiscal year through the Date of
                  Termination, and the denominator of which is 365, (3) any
                  compensation previously deferred by the Executive and any
                  amounts matched by the Company, whether vested or unvested
                  (together with any accrued interest or earnings thereon and
                  all amounts attributable thereto, (4) an amount equal to the
                  value of those unvested benefits payable in stock or cash
                  which unvested benefits cannot be the subject of accelerated
                  vesting by reason of the terms of the relevant plans) and (5)
                  any accrued vacation pay, in each case to the extent not
                  theretofore paid (the sum of the amounts described in clauses
                  (1) through (5) shall be hereinafter referred to as the
                  "Accrued Obligations"); and

                           (B) the amount equal to the product of (1) two and
                  (2) the sum of (x) the Executive's annual base salary and (y)
                  his or her Annual Bonus; provided, however that the multiplier
                  in clause (i)(B)(1) of this Section 4(a) shall be "three" if
                  any such termination of the Executive by the Company for other
                  than Cause or Incapacity or the Executive for Good Reason were
                  to occur subsequent to a Disposition Date;

                  (ii) in addition to the retirement benefits to which the
         Executive is entitled under the Company's Pension-Retirement Plan and
         Pension Equalization Plan or any successor plans thereto (collectively,
         the "Pension Plans"), the Company shall pay the Executive the excess of
         (x) the retirement pension which the Executive would have accrued under
         the terms of the Pension Plans (without regard to any amendment to the
         Pension Plans made subsequent to the date hereof, which amendment
         adversely affects in any manner the computation of retirement benefits
         thereunder), determined as if the Executive were fully vested
         thereunder and had accumulated (after the Date of Termination)
         twenty-four additional months (or thirty-six if such Date of
         Termination occurs on or after a Disposition Date) of Benefit Accrual
         Service credit (as such term is defined in the Pension Plans)
         thereunder and treating the amounts paid under clause (i)(B) of this
         Section 4(a) as compensation paid during a twenty-four (or thirty-six,
         as the case may be) month period for purposes of calculating Average
         Salary and benefits under the Pension Plans, over (y) the retirement
         pension which the Executive had then accrued pursuant to the provisions
         of the Pension Plans;

                  (iii) for two years after the Executive's Date of Termination
         (or three years if such Date of Termination occurs on or after a
         Disposition Date), or such longer period as may be provided by the
         terms of the appropriate plan, program, practice or policy, the Company
         shall continue benefits to the Executive and/or the Executive's family
         at least equal to those which would have been provided to them in
         accordance with benefit plans, programs, practices and policies,
         including, without limitation, medical, disability, group life,
         accidental death and travel accident insurance plans and programs, if
         the Executive's employment had not been terminated or, if more favor-
         able to the Executive, as in effect generally at any time thereafter,
         provided, however, that if the Executive becomes reemployed with
         another employer and is eligible to receive medical benefits under
         another employer-provided plan, the medical benefits shall be secondary
         to those provided under such other plan during such applicable period
         of eligibility and further provided, however, that the rights of the
         Executive and/or the Executive's family under Section 4980B(f) of the
         Code shall commence at the end of such two-year (or three-year, as the
         case may be) period;

                  (iv) the Company shall, at its sole expense as incurred,
         provide the Executive with reasonable out-

         placement services for a period of up to two years from the Date of
         Termination, the provider of which shall be selected by the Executive
         in his or her sole discretion;

                  (v) the Company shall cause to be accelerated and immediately
         vested and exercisable all unexercised stock options granted before the
         Date of Termination, whether or not such options are exercisable on the
         Date of Termination, including, without limitation, the equity
         retention options granted in 1993, regardless of whether the retention
         or non-sale conditions thereto have been satisfied;

                  ((vi) the Company, if requested within three years of the Date
         of Termination, shall arrange for the purchase of the principal
         residence of the Executive and the provision of relocation benefits to
         the Executive substantially equal to all those provided under the
         Company's Senior Executive Relocation Program dated April, 1996 under
         the captions "Selling Your Current Home," "Moving Your Family and
         Household," and "Tax Allowance";

                  (vii) to the extent not theretofore paid or provided, the
         Company shall timely pay or provide to the Executive any other vested
         amounts or benefits required to be paid or provided or which the
         Executive is eligible to receive under any plan, program, policy or
         practice or contract or agreement of the Company and its affiliates,
         including earned but unpaid stock and similar compensation (such other
         amounts and benefits shall be hereinafter referred to as the "Other
         Benefits").

                  (b) Death or Incapacity. If the Executive's employment is
terminated by reason of the Executive's death or Incapacity during the
Employment Period, this Agreement shall terminate without further obligations to
the Executive's legal representatives under this Agreement, other than for (i)
timely payment of Accrued Obligations and (ii) provision by the Company of death
benefits or disability benefits for termination due to death or Incapacity,
respectively, as in effect at the date hereof or, if more favorable to the
Executive, at the Executive's Date of Termination.

                  (c) Cause; Other than for Good Reason. If the Executive's
employment shall be terminated for Cause during the Employment Period, this
Agreement shall terminate without further obligation of the Company to the
Executive other than timely payment to the Executive of (x) the Executive's
currently effective annual base salary through the Date of

Termination, (y) the amount of any compensation previously deferred by the
Executive and any and all amounts matched by the Company or any of its
affiliates, including, without limitation, all proceeds thereof and all amounts
attributable thereto, and (z) Other Benefits, in each case to the extent
theretofore unpaid. If the Executive voluntarily terminates employment during
the Employment Period, excluding a termination for Good Reason, this Agreement
shall terminate without further obligations to the Executive, other than for the
timely payment of Accrued Obligations and Other Benefits.

                  SECTION 5.

                  (a) Non-exclusivity of Rights. Nothing in this Agreement shall
prevent or limit the Executive's continuing or future participation in any plan,
program, policy or practice provided by the Company or any of its affiliates and
for which the Executive may qualify, nor shall anything herein limit or
otherwise affect such rights as the Executive may have under any contract or
agreement with the Company or any of its affiliates. Amounts which are vested
benefits or which the Executive is otherwise entitled to receive under any plan,
policy, practice or program of or any contract or agreement with the Company or
any of its Affiliates at or subsequent to the Date of Termination shall be
payable in accordance with such plan, policy, practice or program or contract or
agreement except as explicitly modified by this Agreement.

                  (b) Additional Compensation. Nothing in this Agreement shall
prevent or limit the Company's ability to augment the benefits payable pursuant
to this Agreement in the event that in the judgment of the Chairman of the
Company or the Board of Directors it is deemed appropriate to provide additional
compensation and/or benefits to the Executive as a result of facts and
circumstances deemed relevant by the Chairman or the Board of Directors.

                  SECTION 6. No Mitigation. The Company agrees that, if the
Executive's employment is terminated during the term of this Agreement for any
reason, the Executive is not required to seek other employment or to attempt in
any way to reduce any amounts payable to the Executive hereunder. Further,
except as provided in Section 4(iii) hereof, the amount of any payment or
benefit provided hereunder shall not be reduced by any compensation earned by
the Executive as the result of employment by another employer, by retirement
benefits, by offset against any amount claimed to be owed by the Executive to
the Company, or otherwise.

                  SECTION 7.  Confidential Information. The Executive will not,
during the Employment Period or for a

period of three years following a Termination of Employment, disclose or reveal
to any person, firm or corporation (other than to employees of the Company and
its agents and then only as required on a need-to-know basis in the performance
of such employee's or agent's duties) or use (except as required in the
performance of his duties hereunder) any trade secrets (such as, without
limitation, processes, formulae, programs or data) or other confidential
information relating to the business, techniques, products, operations,
customers, know-how and affairs of the Company or any of its affiliates. All
business records, notes, magnetic or electronic media, papers and documents
(including, without limitation, customer lists, estimates, market surveys,
computer programs and correspondence) kept or made by the Executive relating to
the business or products of the Company or any of its affiliates shall be and
remain the property of the Company or the affiliate and shall be promptly
delivered to the Company upon termination of the Employment Period.

                  SECTION 8.  Full Settlement and Form of Release.

                  (a) Subject to full compliance by the Company with all of its
obligations under this Agreement, this Agreement shall be deemed to constitute
the settlement of such claims as the Executive might otherwise be entitled to
assert against the Company by reason of the termination of the Executive's
employment for any reason during the Employment Period. The Company's obligation
to make the payments provided for in this Agreement and otherwise to perform its
obligations hereunder shall not be affected by any set-off, counterclaim,
recoupment, defense or other claim, right or action which the Company may have
against the Executive or others. The Company agrees to pay as incurred, to the
full extent permitted by law, all legal fees and expenses which the Executive
may reasonably incur as a result of any contest (regardless of the outcome
thereof) by the Company, the Executive or others of the validity or
enforceability of, or liability under, any provision of this Agreement or any
guarantee of performance thereof.

                  (b) It is expressly agreed by the parties that the benefits
provided for under this Agreement are substantial, and would not be provided
without a prior release (without subsequent revocation) by the Executive of
other claims against the Company and its affiliates. To record that release,
upon any termination of employment pursuant to Section 4(a) of this Agreement,
the Executive and the Company agree to deliver to each other a written release
in the form attached to this Agreement as Exhibit A (the "Release").

                  SECTION 9. Certain Additional Payments by the Company.
Anything in this Agreement to the contrary notwithstanding, in the event that it
shall be determined that any payment or distribution by the Company to or for
the benefit of the Executive (whether paid or payable or distributed or
distributable) pursuant to the terms of this Agreement or otherwise
(collectively, the "Payments") but determined without regard to any additional
payments required under this Section 9, would be subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code of 1986, as amended, the
Executive shall be entitled to receive an additional payment (the "Gross-Up
Payment") in an amount equal to (i) the amount of the excise tax imposed on the
Executive in respect of the Payments (the "Excise Tax") plus (ii) all federal,
state and local income, employment and excise taxes (including any interest or
penalties imposed with respect to such taxes) imposed on the Executive in
respect of the Gross-Up Payment, such that after payments of all such taxes
(including any applicable interest or penalties) on the Gross-Up Payment, the
Executive retains a portion of the Gross-Up Payment equal to the Excise Tax.

                  SECTION 10.  Successors; Binding Agreement.

                  (a) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Company, by agreement, in
form and substance satisfactory to the Executive, expressly to assume and agree
to perform this Agreement in the same manner and to the same extent that the
Company would be required to perform if no such succession had taken place.
Failure of the Company to obtain such assumption and agreement prior to the
effectiveness of any such succession will be a breach of this Agreement and
entitle the Executive to compensation from the Company in the same amount and on
the same terms as the Executive would be entitled to hereunder had the Company
terminated the Executive for reason other than Cause or Incapacity on the
succession date. As used in this Agreement, "the Company" means the Company as
defined in the preamble to this Agreement and any successor to its business or
assets which executes and delivers the agreement provided for in this Section 10
or which otherwise becomes bound by all the terms and provisions of this
Agreement by operation of law or otherwise.

                  (b) This Agreement shall be enforceable by the Executive's
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.

                  SECTION 11. Non-assignability. This Agreement is personal in
nature and neither of the parties hereto shall, without the consent of the
other, assign or transfer this Agreement or any rights or obligations hereunder,
except as provided in Section 10 hereof. Without limiting the foregoing, the
Executive's right to receive payments hereunder shall not be assignable or
transferable, whether by pledge, creation of a security interest or otherwise,
other than a transfer by his or her will or by the laws of descent or
distribution, and, in the event of any attempted assignment or transfer by the
Executive contrary to this Section, the Company shall have no liability to pay
any amount so attempted to be assigned or transferred.

                  SECTION 12. Notices. For the purpose of this Agreement,
notices and all other communications provided for herein shall be in writing and
shall be deemed to have been duly given when delivered or mailed by United
States regis tered or certified mail, return receipt requested, postage prepaid,
addressed as follows:

         If to the Executive:

         If to the Company:                        The Pittston Company
                                                   1000 Virginia Center Parkway
                                                   P.O. Box 4229
                                                   Glen Allen, VA 23058-4229
                                                   Attention of Corporate

                                                      Secretary

or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.

                  SECTION 13. Operation of Agreement; Survival of Obligations.
This Agreement shall be effective immediately upon its execution and continue to
be effective so long as the Executive is employed by the Company or any of its
affiliates; provided, however, that the parties' respective obligations
hereunder shall survive the termination of the Executive's employment for any
reason.

                  SECTION 14.  Governing Law.  The validity, interpretation,
construction and performance of this Agreement shall be governed by the laws
of the Commonwealth of Virginia without reference to principles of conflict of
laws.

                  SECTION 15.  Miscellaneous.  (a)  This Agreement
contains the entire understanding with the Executive with

respect to the subject matter hereof and supersedes any and all prior agreements
or understandings, written or oral, relating to such subject matter. No
provisions of this Agreement may be modified, waived or discharged unless such
modification, waiver or discharge is agreed to in writing signed by the
Executive and the Company.

                  (b) The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.

                  (c) Except as provided herein, this Agreement shall not be
construed to affect in any way any rights or obligations in relation to the
Executive's employment by the Company or any of its affiliates prior to the date
hereof or subsequent to the end of the Employment Period. It is expressly
understood that subject to the terms of the Executive Agreement referred to in
Section 2 hereof, the Executive remains an employee at the will of the Company.

                  (d) This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same Agreement.

                  (e) The Company may withhold from any benefits payable under
this Agreement all Federal, state, city or other taxes as shall be required
pursuant to any law or governmental regulation or ruling.

                  (f) The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect.

                  IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed and delivered as of the day and year first above set forth.

                                         THE PITTSTON COMPANY,

                                         by__________________________
                                         Joseph C. Farrell
                                         Chairman of the Board,
                                         President and Chief
                                         Executive Officer

                                         ------------------------------
                                        (the Executive)

                                                                       EXHIBIT A

MUTUAL RELEASE dated as of _____________, between _______________, residing in
the Commonwealth of Virginia (the "Executive") and THE PITTSTON COMPANY, a
Virginia corporation (the "Company").

                  For and in consideration of the promises set forth in the
Severance Agreement dated as of ________, 1997, between the Executive and the
Company (the "Agreement"), the Company hereby releases and forever discharges
the Executive from any claims, acts, damages, demands, benefits, accounts,
liabilities, obligations, liens, costs, rights of action, claims for relief, and
causes of action, in law and in equity, both known and unknown, which the
Company ever had, now has, or might in the future have against the Executive,
except such as may arise from any malfeasance on the part of the Executive.

                  Subject to the provisions of the penultimate paragraph of this
Mutual Release, for good and valuable consideration, receipt of which is hereby
acknowledged, the Executive hereby releases and forever discharges the Company
and its affiliates, absolutely and forever, of and from any and all claims,
acts, damages, demands, benefits, accounts, liabilities, obligations, liens,
costs, rights of action, claims for relief and causes of action of every nature
and kind whatsoever, in law and in equity, both known and unknown, which the
Executive ever had, now has or might in the future have against the Company
and/or its affiliates, including, but not limited to any and all claims, acts,
damages, demands, benefits, accounts, liabilities, obligations, liens, costs,
rights of actions, claims for relief and causes of action in any way connected
with, related to and/or resulting from the Executive's employment with the
Company and its affiliates, the termination of such employment, possible rights
or claims arising under the Age Discrimination in Employment Act of 1967, and
the compensation, calculation, determination and payment under any and all stock
and benefit plans and termination agreements operative between the Executive and
the Company, including but not limited to claims for bonus or other incentive
compensation, salary, severance, "fringe" benefits, vacation, stock benefits,
retirement benefits, worker's compensation benefits, and unemployment benefits.
In addition, the Executive agrees not to support or participate in the
commencement of any suit or proceeding of any kind against the Company and its
affiliates or against their directors, officers, agents or employees with
respect to any act, event or occurrence or any alleged failure to

act, occurring up to and including the date of the execution
of this Mutual Release.

                  As used herein, the Executive refers to and includes [name of
Executive] and his heirs, executors, administrators, representatives, legatees,
devisees, agents, family predecessors, attorneys, and the successors and assigns
of each of them. As used herein, references to the Company and to the Company
and its affiliates refer to and include The Pittston Company, a Virginia
corporation, and all past and present subsidiaries, divisions, parent companies,
affiliated and/or commonly controlled corporations, companies, and enterprises,
ventures, and projects, and all past and present officers, directors, trustees,
employees, representatives, agents and attorneys thereof, and the successors and
assigns of each of them.

                  The Company and the Executive hereby warrant and represent to
each other that there has been no assignment, conveyance, encumbrance,
hypothecation, pledge or other transfer of any interest in any matter covered by
this Mutual Release, and hereby agree to indemnify, defend, and hold each other
harmless of and from any and all claims, liabilities, damages, costs, expenses,
and attorneys' fees incurred as a result of anyone asserting any such
assignment, conveyance, encumbrance, hypothecation, pledge or transfer.

                  There is expressly reserved from the effect of this Mutual
Release any claim which the Executive may now or hereafter have regarding (a)
the Severance Agreement to which this Mutual Release was an Exhibit and the
benefits provided for thereunder including, without limitation, those benefits
contemplated by Section 5 of such Agreement and (b) the provisions of Article
VIII of the Restated Certificate of Incorporation of the Company, as in effect
on the date hereof, which indemnification obligation will continue in full force
and effect for the Executive's actions prior to the date hereof. Without
limiting the generality of the foregoing, also reserved from this Release are
the Executive's entitlement to pension, retirement and other benefits under the
terms of the Company's Pension-Retirement Plan, Pension Equalization Plan,
Savings-Investment Plan, Employee Stock Purchase Plan, Key Employees Deferred
Compensation Program and 1988 Stock Option Plan, as amended. In addition, there
is reserved from this Release the Executive's entitlement to such medical and
life insurance coverage as may be provided from time to time under employee
benefit plans available to retired employees of the Company.

                  The Executive acknowledges that he has had at least twenty-one
(21) days to consider the meaning of this Mutual Release and that he should seek
advice from an

attorney. Furthermore, once the Executive has signed this Mutual Release, he may
revoke this Mutual Release during the period of seven (7) business days
immediately following his signing hereof (the "Revocation Period"). This Mutual
Release will not be effective or enforceable until the Revocation Period has
expired without revocation by the Executive. Any revocation within this period
must be submitted in writing to the Company and signed by the Executive.

The Executive agrees that he has entered into this Mutual Release after having
had the opportunity to consult the advisor of his choice, including an attorney,
with such consultation as he deemed appropriate and has a full understanding of
his rights and of the effect of executing this Mutual Release, namely, that he
waives any and all non-excluded claims or causes of action against the Company
regarding his employment or termination of employment, including the waiver of
claims set forth above. The Executive further acknowledges that his execution of
this Mutual Release is made voluntarily and with full understanding of its
consequences and has not been coerced in any way. This Mutual Release may not be
changed orally. Capitalized terms not defined herein shall be as defined in the
Agreement.

                                                  THE PITTSTON COMPANY

                                                  By:___________________________

                                                  ------------------------------
                                                                 (the Executive)

COMMONWEALTH OF VIRGINIA,)
                         ) ss.:

COUNTY OF HENRICO,       )

                  On this ____ day of _____________, 19__ before me personally
came ______________, to me known and known to me to be the individual described
in and who executed the foregoing Mutual Release, and duly acknowledged to me
that he executed the same.

                                                  ------------------------------
                                                              Notary Public

COMMONWEALTH OF VIRGINIA,)
                         ) ss.:

COUNTY OF HENRICO,       )

                  On this _____________ day of ____, 19__ before me personally
came ______________, to me known and known to me to be the officer who executed
the foregoing Mutual Release on behalf of THE PITTSTON COMPANY, and he duly
acknowledged to me that he executed the same.

                                                  ------------------------------
                                                              Notary Public

 

                                                                   Exhibit 10(v)

                                                                  March 11, 1998

Mr. Joseph C. Farrell
117-1/2 South 2 Street
Fernandina Beach, FL 32034

                              Retirement Agreement

Dear Mr. Farrell:

                  This letter is intended to set forth the terms and conditions
of your retirement as Chairman and Chief Executive Officer of The Pittston
Company (the "Company"). Accordingly, the Company hereby agrees with you as
follows:

                  1. Resignation. This will confirm your resignation, effective
February 6, 1998, as Chairman of the Board, Chief Executive Officer and a
director of, and from all other offices and positions (including directorships)
you may hold in, the Company and its subsidiaries and affiliates. You agree that
you will execute any formal letter of resignation reasonably requested by the
Company to further evidence your retirement hereunder.

                  2. Salary Continuation. You shall remain as a non-executive
employee of the Company, and the Company shall continue to pay your salary in
regular installments at your current annual level, through February 28, 1998.
For the purposes of all benefit plans in which you currently participate, your
employment will be deemed to have continued through February 28, 1998, which
date will also be deemed to be your retirement date ("Retirement Date").

                  3. Incentive Compensation Award. You shall receive an award of
$550,000 under the Company's Key Employee Incentive Plan in respect of the
Company's 1997 calendar year (reduced by the amount which you have previously
elected to defer under the Company's Deferred

 

                                                                               2

Compensation Program) to be paid in a lump sum on or before April 1, 1998.

                  4. Termination Payment. In lieu of any severance and other
termination payments and benefits under your Employment Agreement with the
Company dated as of May 1, 1993, as amended from time to time (the "Employment
Agreement"), and under any other agreement with the Company or its affiliates
providing severance or termination payments or benefits, you shall receive
$3,575,731.84 (the "Termination Payment") in a lump sum to be paid on or before
April 1, 1998. The method by which the Termination Payment has been calculated
is attached hereto as Exhibit A.

                  5. Unexercised Stock Options. All unexercised stock options
issued to you under the Company's stock option plan ("Option Plan") and
presently outstanding are identified on Exhibit B to this Agreement. Those
options shall continue to become vested and remain exercisable until the third
anniversary of your Retirement Date in accordance with the terms of the Option
Plan and the option agreements evidencing your outstanding grants, and the
Company agrees that it shall take no action otherwise reserved to it to prevent
such options from becoming so vested and exercisable provided the terms of this
Retirement Agreement are not breached by you.

                  6. Retirement Benefits. a. Pension. Your retirement benefits
under the Company's Pension-Retirement Plan and Pension Equalization Plan will
commence effective March 1, 1998, and will be based upon the Plans' present
pension formulae. Nothing in this Agreement is intended to affect your right to
receive a lump-sum payment of your benefits under such Plans to the extent a
lump-sum payment option would otherwise be available. In addition, payments to
you under the Supplemental Retirement Benefit provided by Section 3(c) of your
Employment Agreement will also commence on March 1, 1998. All such benefits have
been calculated taking into account the incentive compensation award referred to
in Section 3 hereof, and have been calculated by projecting your salary on
February 6, 1998 and bonus of $550,000 to age 65 in the determination of Average
Salary under the pension plans; the total of such benefits on a single life
annuity basis commencing March 1, 1998 shall be $47,666.67 per month during your
lifetime.

                      b.  Health Benefits.  You and your eligible family members
shall be entitled to participate in the

 

                                                                               3

Retiree Health Care Program of the Company on the same basis presently made
available to other eligible retirees of the Company subject to the Company's
right to modify such program from time to time, but subject to the protections
and rights provided to you under the last "provided, further" clause of Section
3(d) and under the sentence of Section 4(d) beginning with the clause "Anything
in this Agreement or the Medical Plan to the contrary notwithstanding..." of the
Employment Agreement, both provisions of which are hereby incorporated herein by
reference. You will be responsible for the normal retiree contribution to the
cost of maintaining your participation in those plans.

                      c. Deferred Compensation Program. A statement of the
current value of your deferred compensation balances is attached hereto as
Exhibit D. Since you will retire under the Company's Pension-Retirement Plan
and, effective March 1, 1998, will be in payment status thereunder you shall be
entitled to receive the full value of your account balance (including Company
matching contributions) in accordance with the terms of the Key Employees'
Deferred Compensation Program of the Company.

                  7. Additional Benefits. In consideration of your many years of
service to the Company and your continued cooperation and further services in
assuring an orderly transition of management responsibilities, the Company
further agrees:

                  (a) The Company will provide group medical benefits to your
former wife for her lifetime under the Retiree Health Care Program of the
Company, subject to normal retiree contributions to the cost of maintaining her
participation in such plan, on the same basis presently made available to other
eligible retirees of the Company (or their spouses) subject to the Company's
right to modify such program from time to time.

                  (b) You may retain for your personal use the personal computer
you currently have at your home.

                  (c) To provide, or reimburse you for the cost of, reasonable
office space in the metropolitan Richmond area, and administrative assistance
consistent with your reasonable needs, for the period March 1, 1998 to the
earlier of (i) February 28, 2001 or (ii) the date on which you become a full
time employee of another organization.

 

                                                                               4

                  (d) To reimburse you for reasonable legal fees, not to exceed
$15,000, and reasonable out-of-pocket expenses in connection therewith, for
services related to this Retirement Agreement and other ancillary matters.

                  (e) To pay or reimburse you for, your monthly dues at the
Country Club of Virginia and the Commonwealth Club until the earlier of (i)
February 28, 2001 or (ii) the date on which you become a full time employee of
another organization.

                  (f) To pay or reimburse you for up to ten hours of executive
jet service, similar to the Company's present jet aircraft, until February 28,
2001, less the first-class passenger fares on major commercial air carriers for
comparable travel.

                  (g) To reimburse you, until February 28, 2001, for not more
than two trips per year from Richmond to New York City and return, plus one
night's hotel and related expenses per trip, in connection with your required
continuing medical consultation and check-ups of a nature consistent with those
you were incurring semi-annually immediately prior to your retirement.

                  (h) You will continue to be eligible to participate in the
Company's charitable matching program, if any, until your death on the same
basis as an eligible employee provided that the Company's matching contribution
will not exceed $5,000 per calendar year.

                  (i) The Company agrees to pay you $125,000 per year payable in
equal monthly installments for the period commencing on March 1, 1998, and
ending on the earlier of (i) February 28, 2002 or (ii) the date on which you no
longer have an option under The Pittston Company 1988 Stock Option Plan to buy
(in the aggregate) at least 50,000 shares of any class (or one or more classes)
of common stock of the Company. In the event of any split or combination of any
class of common stock of the Company, the 50,000 shares shall be adjusted
appropriately as determined by the Company.

                  (j) You will provide consulting services for the period
commencing on March 1, 1998, and ending on the earlier of (i) February 28, 2002
or (ii) the date on which you no longer have an option under The Pittston
Company 1988

 

                                                                               5

Stock Option Plan to buy (in the aggregate) at least 50,000 shares of any class
(or one or more classes) of common stock of the Company. In the event of any
split or combination of any class of common stock of the Company, the 50,000
shares shall be adjusted appropriately as determined by the Company. It is
anticipated that you will not be requested to provide consulting services for
more than 8 hours per calendar year and, in the event you do perform consulting
services pursuant to the prior written request of the chief executive officer of
the Company for more than such specified number of hours, you will be paid
$3,000/day for any part of any extra day.

                  8. Confidentiality. You shall not use for your own or any
other person's benefit, or disclose, divulge or communicate to any other person,
any trade or business secret or other information disclosed to or known by you
as a consequence of or through your employment with the Company (including
information conceived, originated or developed by you), which is of a
confidential or proprietary nature and not generally known to the public, about
the Company's business, prospects, patents or other intellectual property,
personnel, shareholders, operations, processes, budgets, plans and development
programs (collectively the "Confidential Information") without the prior written
consent of the Company, except (a) in connection with (i) the implementation or
enforcement of this Agreement, (ii) any claim for indemnification as a director,
officer, employee or agent of the Company or (iii) your defense of any civil or
criminal action or proceeding, or (b) as appropriate for the performance of your
obligations under this Agreement, or (c) if such use or disclosure is required
by law. Such Confidential Information includes, but is not limited to, (a)
business methods and information of the Company, including prices charged,
discounts given to customers or obtained from suppliers, transport rates,
marketing and advertising programs, costings, budgets, turnover, sales targets
or other unpublished financial information; and (b) lists and particulars of the
Company's suppliers, customers and potential customers and the individual
contacts or negotiations with such suppliers and customers; and (c)
manufacturing or production processes and know-how developed or employed by the
Company or its suppliers; and (d) details as to the design or specifications of
the Company's or their suppliers' products and inventions or developments
relating to future products. You will, upon termination of your employment,
return all documents or other carriers of information in your

 

                                                                               6

possession, custody or control which contain records of such information and all
property in your possession, custody or control belonging to the Company or its
customers or suppliers or relating to the Company's business and business
relationships. This restriction shall apply without limit in point of time but
shall cease to apply to information or knowledge which shall come (otherwise
than by breach of this clause) into the public domain or which is generally
disclosed to third parties by the Company without restriction on such third
parties or which is disclosed to you by a third party not in breach of any
obligation of confidentiality to the Company. For purposes solely of this
Section 8, the term "Company" shall be deemed to include the Company's
subsidiaries and affiliates.

                  9. Release by You. In consideration of the fulfillment of the
payments and benefits described above, you release, remise and forever discharge
the Company from and against any and all claims, cross-claims, third-party
claims, counterclaims, contribution claims, debts, demands, actions, promises,
judgments, trespasses, extents, executions, causes of action, suits, accounts,
covenants, sums of money, dues, reckonings, bonds, bills, liens, attachments,
trustee process, specialties, contracts, controversies, agreements, promises,
damages, and all other claims of every kind and nature in law, equity,
arbitration, or other forum which you now have or ever had up to and including
the date hereof, whether absolute or contingent, direct or indirect, known or
unknown. Additionally, you hereby waive and release the Company from any and all
claims which you have, your successors or assigns have or may have against the
Company for, upon or by reason of any matter, cause or thing whatsoever,
including, but not limited to (a) those that might arise in your capacity as a
shareholder of the Company (both individually and derivatively), or (b) in any
way related to your employment or termination of your employment by the Company,
whether or not you know them to exist at the present time, including, but not
limited to, rights under federal, state or local laws prohibiting age or other
forms of discrimination, including Title VII of the Civil Rights Act of 1964, as
amended; Section 1981 through 1988 of Title 42 of the United States Code; the
Age Discrimination in Employment Act of 1967, as amended; the Employee
Retirement Income Security Act of 1974, as amended; the Fair Labor Standards
Act, the Americans with Disabilities Act, as amended; the Family and Medical
Leave Act; the National Labor Relations Act, as amended; the Immigration Reform
Control Act, as amended; the Occupational

 

                                                                               7

Safety and Health Act, as amended; any public policy, contract or common law;
and any alleged entitlement to costs, fees or expenses, including attorneys'
fees, claims for compensation or benefits earned by your past service, claims
involving willful misconduct, and claims arising after the date of this
Agreement. Notwithstanding the foregoing, nothing herein shall be deemed to
release, remise or discharge the Company from any claims arising out of,
relating to or asserted (x) under this Agreement, (y) with respect to any right
of indemnification as a director, officer or employee of the Company, whether
arising under the Company's charter or by-laws, by operation of law, or
otherwise or (z) with respect to your capacity as a shareholder of the Company
as described in (a) above, to the extent your claim is brought as a member (but
not as a class representative) of a class in a class action suit in which you
take no active part and is based solely upon actions (or alleged actions) of the
Company, its employees or directors occurring after February 6, 1998. For
purposes solely of this Section 9, the term "Company" shall be deemed to include
the Company's subsidiaries and affiliates and the respective legal
representatives, successors and assigns, past, present and future directors,
officers, employees, trustees and shareholders of the Company and the Company's
subsidiaries and affiliates.

                  10. Non-Competition. You are released from all obligations
included in the covenant not to compete set forth in Section 5 of the Employment
Agreement; provided, however, that you shall in all respects remain subject to
the restrictions of Section 8 of this Agreement.

                  11. Non-Solicitation. Except with the prior written consent of
the Company, you shall not, during the period covered by the covenant not to
compete referenced in Section 5 of the Employment Agreement, solicit or entice
away or endeavor to employ, solicit or entice away any person who is at the date
of this Agreement or was at any time during the period of twelve (12) months
prior to the date of this Agreement an employee of the Company or any of its
subsidiaries or affiliates.

                  12. Designs and Inventions. All designs, inventions, programs,
discoveries or improvements conceived, apprehended or learned by you during the
course of or arising out of your employment with the Company and which concern
or are applicable to products or articles

 

                                                                               8

manufactured or sold by or to services provided by the Company shall be the
exclusive property of the Company.

                  13. Revocation. You acknowledge that you have been offered at
least twenty-one (21) days to consider the meaning of this Agreement, that you
have sought the advice of an attorney and that you have voluntarily elected to
sign this Agreement prior to the expiration of such twenty-one (21)-day period.
Furthermore, once you have signed this Agreement, you may revoke this Agreement
during the period of seven (7) business days immediately following the signing
(the "Revocation Period"). This Agreement will not be effective or enforceable
until the Revocation Period has expired without any revocation from you. Any
revocation within this period must be submitted in writing to the Company and
signed by you.

                  14. Attorney Consultation. You agree that you have entered
into this Agreement after having had the opportunity to consult with the
advisors of your choice, including an attorney, with such consultation as deemed
appropriate and have a full understanding of your rights and of the effect of
executing this Agreement, namely, that you waive any and all non-excluded claims
or causes of action against the Company regarding your employment or termination
of employment, including the waiver of claims set forth above. You further
acknowledge that your execution of the Agreement is made voluntarily and with
full understanding of its consequences and has not been coerced in any way.

                  15. Withholding. All amounts and benefits to be paid or
provided hereunder shall be reduced by all applicable taxes required by law to
be withheld by the Company, including, without limitation, all hospital
insurance taxes relating to compensation and benefits provided after 1995 with
respect to which withholding is or was required and which has not heretofore
been so withheld.

                  16. Full Integration. This Agreement constitutes the entire
understanding between you and the Company with respect to the subject matter
hereof. There are no representations, understandings or agreements of any nature
or kind whatsoever, oral or written, regarding the subject matter hereof which
is not included herein. This Agreement supersedes the Employment Agreement
between you and the Company which, except as provided in Section 9 or as
otherwise specifically provided herein, shall be null and void upon the
execution of this Agreement.

 

                                                                               9

                  17. Publicity. Except as may be required by applicable law,
you and the Company each covenant that you and the Company (and in the case of
the Company, the Company's officers, directors and controlled affiliates),
respectively, shall not make statements to third parties, the public, the press
or the media concerning the subject matter of this Agreement or that would
portray the other party in an adverse light, or cause injury to the other
party's business and/or professional reputation. Any statements that you or the
Company makes to third parties, the public, the press or the media shall be of a
non-hostile manner and of a neutral tone.

                  18. Modification and Waiver. No supplement, modification,
change or waiver of this Agreement or any provision hereof shall be binding
unless executed in writing by you and the Company evidencing the parties'
respective intent to be bound thereby. No waiver of any of the provisions of
this Agreement shall constitute a waiver of any other provision (whether or not
similar), nor shall such waiver constitute a continuing waiver unless otherwise
expressly provided.

                  19. Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns.

                  20. Virginia Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the Commonwealth of Virginia, without
regard to its principles of conflicts of laws. Any litigation arising out of
this Agreement shall be conducted in a forum located within the Commonwealth of
Virginia.

                  21. Notice. For the purposes of this Agreement, notices and
all other communications provided in this Agreement shall be in writing and
shall be deemed to have been duly given when delivered or mailed by United
States registered mail, return receipt requested, postage prepaid, addressed as
follows:

         If to You:                           Joseph C. Farrell
                                              117-1/2 South 2 Street
                                              Fernandina Beach, FL 32034

 

                                                                              10

         If to the Company:                   The Pittston Company
                                              1000 Virginia Center Parkway
                                              Glen Allen, Virginia 23058-4229
                                              Attention:  Vice President-Human
                                                          Resources and
                                                          Administration

or to such other address as any of the parties hereto may have furnished to the
other in writing in accordance herewith, except that notices of change of
address shall be effective only upon receipt.

                  22. Validity. Any provision of this Agreement which is
prohibited or unenforceable shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof or affecting the validity or enforceability of such provision in any
other jurisdiction.

                  23. Captions. The section captions herein are for convenience
or reference only, do not constitute part of the Agreement and shall not be
deemed to limit or otherwise affect any of the provisions hereof.

                  24. Further Assurances. Each of the parties hereto shall
execute such documents and other papers and take such further actions as may be
reasonably required to carry out the provisions hereof and the transactions
contemplated hereby.

                  25. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.

                  IN WITNESS WHEREOF, the parties hereto have executed this
Agreement under seal personally or through

 

                                                                              11

their duly authorized representative on the dates written by each of their
signatures.

                                        THE PITTSTON COMPANY,

                                          by
                                            /s/ Frank T. Lennon
                                            --------------------------------
                                            Frank T. Lennon,
                                            Vice President-Human Resources
                                            and Administration

                                            /s/ Joseph C. Farrell
                                            --------------------------------
                                                JOSEPH C. FARRELL

 

                                                                     Exhibit 21

                      SUBSIDIARIES OF THE PITTSTON COMPANY
          (PERCENTAGE OF VOTING SECURITIES 100% UNLESS OTHERWISE NOTED)

                                                                                                    Jurisdiction
            Company                                                                               of Incorporation
            -------                                                                               -----------------
                                                                                                
The Pittston Company [Delaware]                                                                    Delaware
Glen Allen Development, Inc.                                                                       Delaware
Pittston Services Group, Inc.                                                                      Virginia
      Brink's Holding Company                                                                      Virginia
            Brink's Home Security, Inc.                                                            Delaware
                  Brink's Guarding Services, Inc.                                                  Delaware
                  Brink's Home Security Canada Limited                                             Canada
            Brink's, Incorporated                                                                  Delaware
                  Brellis Partners, L.P. (50% Partnership)                                         Virginia
                  Brink's Antigua Limited (47%)                                                    Antigua
                  Brink's Express Company                                                          Illinois
                  Brink's (Liberia) Inc.                                                           Liberia
                  Brink's Redevelopment Corporation                                                Missouri
                  Brink's St. Lucia Limited (26%)                                                  B.W. Indies
                  Brink's Security International, Inc.                                             Delaware
                        Brink's Brokerage Company                                                  Delaware
                        Brink's Asia Pacific Pty Ltd.                                              Australia
                        Brink's Allied Limited  (50%)                                              Ireland
                             Allied Couriers Limited                                               Ireland
                             Brinks Ireland Limited                                                Ireland
                        Brink's Argentina S.A.(51%)                                                Argentina
                        Brink's Ayra India Private Limited (40%)                                   India
                        Brink's Australia Pty. Limited                                             Australia
                        Brink's Bolivia S.A. (93.76% & BI .27%)                                    Bolivia
                        Brink's Canada Limited                                                     Canada
                             Brink's Security Company Limited                                      Canada
                             Brink's SFB Solutions, Ltd.                                           Canada
                        Brink's C.I.S., Inc.                                                       Delaware
                        Brink's de Colombia S.A. (50.5%)                                           Colombia
                             Domesa de Colombia, S.A. (77%, C. Brinks 18%)                         Colombia
                        Brink's Diamond and Jewelry Services, Inc.                                 Delaware
                        Brink's Diamond & Jewellery Services (International) (1993) Ltd.
                          (99.9% BI .1%)                                                           Israel
                        Brink's Diamond & Jewelry Services S.R.L.(99.9% BI .1%)                    Italy
                        Brink's Far East Limited  (99.9% BI .1%)                                   Hong Kong
                        Brink's-Hong Kong Limited (99.9% BI .1%)                                   Hong Kong
                        Brink's International Air Courier, Inc.                                    Delaware
                        Brink's International Management Group, Inc.                               Delaware
                        Brink's (Israel) Limited (70%)                                             Israel
                        Brink's Japan Limited (51%)                                                Japan
                        Brink's Nederland B.V.                                                     Netherlands
                        Brink's Network, Incorporated                                              Delaware
                        Brink's Pakistan (Pvt) Limited (49%)                                       Pakistan
                        Brink's Panama, S.A. (49%)                                                 Panama
                             Immobiliaria Brink's Panama, S.A.                                     Panama
                        Brink's Puerto Rico, Inc.                                                  Puerto Rico
                        Brink's S.A.                                                               France
                        Brink's-Schenker GmbH (50%)                                                Germany
                             Brink's Sicherheit                                                    Germany
                                    Security Consulting & Services GmbH                            Germany

                                        2

            
                                                                                                   Jurisdiction
            Company                                                                              of Incorporation
            -------                                                                              -----------------
                                                                                                
            Brink's Singapore Pte. Ltd. (60%)                                                      Singapore
            Brink's Securmark S.p.A. (24.5%)                                                       Italy
            Brink's (Southern Africa) (Proprietary) Ltd.                                           South Africa
            Brink's Taiwan Limited (94%)                                                           Taiwan
            Brink's (Thailand) Limited (40%)                                                       Thailand
            Brink's (UK) Limited                                                                   U.K.
                   Brink's Commercial Services Limited (BUK-99%, BSI-1sh)                          U.K.
                   Brink's Diamond & Jewellery Services Limited
                    (BUK-99%, BSI-1sh)                                                             U.K.
                   Brink's Limited (BUK-99%, BSI-1sh)                                              U.K.
                          Brink's (Gibraltar) Limited (99%)                                        Gibraltar
                          Brink's Limited (Bahrain) EC                                             Bahrain
                          Brink's Security Limited (15% Legal Title Bks-Zieg.)
                           (BL-99%, BUK 1%)                                                        U.K.
                          Quarrycast Commercial Limited
                           (15% Leg.Ttle Bks-Zieg.) (BL-50%, BUK 1%)                               U.K.
                   Brink's-Ziegler S.A. (50%)                                                      Belgium
                   Brink's Zurcher Freilager A.G. (51%)                                            Switzerland
                   Cavalier Insurance Company, Ltd.                                                Bermuda
                   Centro Americana de Inversiones Balboa C.A.(BSI 100%)                           Panama
                   S.A. Brink's Diamond & Jewelry Services, N.V. (99%) (BDJS, Inc. 1%)             Belgium
                   S.A. Brink's Europe N.V. (99%) (BDJS, Inc.-1%)                                  Belgium
                   S.A. Brink's-Ziegler Luxemborg (50%)                                            Luxemborg
                   Servicios Brink's S.A. (60.45%)                                                 Chile
                   Societe Anonyme of Provision of Services in Transportation
                          and Protection of Valuables (50.05%)                                     Greece
                   Transpar Participacoes Ltda. (99.9%) [.1% by Bks Inc.]                          Brazil
                         Alarm-Curso de Formacao de Vigilantes, Ltda. (99%)                        Brazil
                         Brinks Seguranca e Transporte de Valores  (99%)                           Brazil
                         Brinks Viaturas e Equipamentos Ltda. (99%)                                Brazil
                   Transporte de Valores Brink's Chile S.A. (60.45%)                               Chile
            Brink's SFB Solutions, Inc.                                                            Delaware
            Hermes Transportes Blindados S.A. (BI-4.96%; Balboa 31.038%)                           Greece
            Security Services (Brink's Jordan) Company Ltd. (45%)                                  Jordan
            Custravalca Brink's, C.A. (61%)                                                        Venezuela
            Servicio Pan Americano de Proteccion, S.A.  (20%)                                      Mexico
                   Canamex (51%)                                                                   Mexico
                   Inmobiliaria, A.J. (99.9%)                                                      Mexico
                   Productos Pan Americanos de Proteccion (99.9%)                                  Mexico
                   Servicio Salvadoreno de Proteccion (14%)                                        Mexico
                   VIGYA (99.9%)                                                                   Mexico
            Pittston Finance Company Inc.                                                          Delaware
      BAX Holding Company                                                                          Virginia
            BAX Finance Inc.                                                                       Delaware
            BAX Global Inc.                                                                        Delaware
                 BAX Global International Inc.                                                     Delaware
                      BAX Holdings, Inc. (18.35%)                                                  Philippines
                           BAX Global (Philippines), Inc. (BHI-48.9%/BAI-50.9%)                    Philippines
                      BAX Global (Malaysia) Sdn. Bhd.                                              Malaysia
                           BAX Global Imports (Malaysia) Sdn. Bhd.
                            (40%, Bumpautra-60%)                                                   Malaysia
                      BAX-Transitarios, Limitada                                                   Portugal
                      Burlington Air Express Aktiebolag                                            Sweden
                      Burlington Air Express AG                                                    Switzerland

                                       3

                                                                                                    Jurisdiction
            Company                                                                               of Incorporation
            -------                                                                               -----------------
                                                                                                
                 BAX Global A/S                                                                    Denmark
                 Burlington Air Express (Brazil) Inc.                                              Delaware
                 BAX Global (Canada) Ltd.                                                          Canada
                      797726 Ontario Limited                                                       Canada
                 Burlington Air Express Chile LLC                                                  Chile
                 Burlington Air Express do Brazil Ltda.                                            Brazil
                 Burlington Air Express (Dubai) Inc.                                               Delaware
                 BAX Global (France) SARL                                                          France
                      BAX Global S.A.                                                              France
                 Burlington Air Express GmbH                                                       Germany
                 BAX Global Holding Pty. Limited                                                   Australia
                      Burlington Air Express (Aust) Pty. Limited                                   Australia
                             AFCAB Pty. Limited (11.53%)                                           Australia
                             Brisbane Air Freight Forwarders Terminal Pty Ltd. (20%)               Australia
                      BAX Global Cartage Pty. Limited                                              Australia
                 BAX Global Japan K.K.                                                             Japan
                 Burlington Air Express (Korea) Co. Ltd. (51%)                                     South Korea
                 Burlington Air Express Limited                                                    Hong Kong
                 BAX Global, S.A. de C.V.                                                          Mexico
                 BAX Global (N.Z.) Ltd.                                                            New Zealand
                      Colebrook Bros. Ltd.                                                         New Zealand
                      Walsh and Anderson (1991) Limited                                            New Zealand
                 Burlington Air Express S.A. (Spain)                                               Spain
                 Burlington Air Express Services Inc.                                              Delaware
                 BAX Global S.r.l. [Italy]                                                         Italy
                      CSC Customs and Management Services S.r.L.                                   Italy
                 Burlington Air Express (U.K.) Limited                                             U.K.
                        Alltransport Holdings Limited                                              U.K.
                                Alltransport International Group Limited                           U.K.
                                Alltransport Warehousing Limited                                   U.K.
                                BAX Global (UK) Limited                                            U.K.
                                Pittston Administrative Services (U.K.) Limited                    U.K.
                                BAX Global Ocean Services Limited                                  U.K.
                        WTC Air Freight (U.K.) Limited                                             U.K.
                  BAX Express Limited (Ireland)                                                    Ireland
                  BAX International Forwarding Ltd. (33%)                                          Taiwan
                        Burlington Air Express (Taiwan) Ltd.                                       Taiwan
                  Burlington Networks B.V.                                                         Netherlands
                        Burlington Air Express B.V.                                                Netherlands
                               Burlington Air Express N.V./S.A.(Belgium) (97%, BNI-3%)             Belgium
                               BAX Global Pte Ltd.(Singapore)                                      Singapore
                        J. Cleton & Co. Holding B.V.                                               Netherlands
                               J. Cleton & Co. B.V.                                                Netherlands
                               Logicenter, B.V.                                                    Netherlands
                               Chip Electronic Services B.V. (50%)                                 Netherlands
                  Burlington Networks Inc.                                                         Delaware
                  Burlington-Transmaso Air Express Lda. (50%)                                      Portugal
                  BAX Global (Proprietary) Limited                                                 Australia
                         Traco Freight (Proprietary) Limited                                       Australia
                         Transkip (Proprietary) Limited                                            Australia
                  Indian Enterprises Inc.                                                          Delaware
                         Indian Associates Inc. (40%)                                              Delaware
                                Burlington Air Express Private Limited  (65%, BAXI-35%)            India
            Burlington Air Imports Inc.                                                            Delaware

                                       4

            
                                                                                                    Jurisdiction
            Company                                                                               of Incorporation
            -------                                                                               -----------------
                                                                                                
                  Burlington Airline Express Inc.                                                  Delaware
                  Burlington Land Trading Inc.                                                     Delaware
                  Highway Merchandise Express, Inc.                                                California
                  WTC Airlines, Inc.                                                               California
                  WTC SUB                                                                          California
           Pittston Administrative Services Inc.                                                   Delaware
   Pittston Minerals Group Inc.                                                                    Virginia
           Pittston Coal Company                                                                   Delaware
                  American Eagle Coal Company                                                      Virginia
                  Appalachian Equipment Rental Corp.                                               Delaware
                  Heartland Coal Company                                                           Delaware
                  Maxim Management Company                                                         Virginia
                  Mountain Forest Products, Inc.                                                   Virginia
                  Pine Mountain Oil and Gas, Inc.                                                  Virginia
                        Cenestia Energy, Inc.                                                      West Virginia
                  Pittston Acquisition Company                                                     Virginia
                        Addington, Inc.                                                            Kentucky
                             Huff Creek Energy Company                                             West Virginia
                             Ironton Coal Company                                                  Ohio
                        Appalachian Land Company                                                   West Virginia
                        Appalachian Mining, Inc.                                                   West Virginia
                             Molloy Mining, Inc.                                                   West Virginia
                             Wilderness Mining Company, Inc.                                       West Virginia
                        Kanawha Development Corporation                                            West Virginia
                        Vandalia Resources, Inc.                                                   West Virginia
                             Ansted Coal Company (Oregon)                                          Oregon
                             Vandalia Mining Corporation (WV)                                      West Virginia
                  Pittston Coal Management Company                                                 Virginia
                  Pittston Coal Sales Corp.                                                        Virginia
                  Pittston Coal Terminal Corporation                                               Virginia
                  Pyxis Resources Company                                                          Virginia
                        HICA Corporation                                                           Kentucky
                        Heartland Resources Inc.                                                   West Virginia
                        Holston Mining, Inc.                                                       West Virginia
                        Motivation Coal Company                                                    Virginia
                        Paramont Coal Corporation                                                  Delaware
                        Pyxis Coal Sales Company                                                   Virginia
                  Sheridan-Wyoming Coal Company, Incorporated                                      Delaware
                  Thames Development, Ltd.                                                         Virginia
                        Buffalo Mining Company                                                     West Virginia
                        Clinchfield Coal Company                                                   Virginia
                        Dante Coal Company                                                         Virginia
                        Eastern Coal Corporation                                                   West Virginia
                        Elkay Mining Company                                                       West Virginia
                        Jewell Ridge Coal Corporation                                              Virginia
                        Kentland-Elkhorn Coal Corporation                                          Kentucky
                        Little Buck Coal Company                                                   Virginia
                        Meadow River Coal Company                                                  Kentucky
                        Pittston Coal Group, Inc.                                                  Virginia
                        Ranger Fuel Corporation                                                    West Virginia
                        Sea "B" Mining Company                                                     Virginia
           Pittston Mineral Ventures Company                                                       Delaware
                  PMV Gold Company                                                                 Delaware
                        Pittston Nevada Gold Company (50%) [50% by MPI Gold (USA) Ltd.]            Delaware

                                       5

                                                                                                    Jurisdiction
            Company                                                                               of Incorporation
            -------                                                                               -----------------
                                                                                                     
                   MPI Gold (USA) Ltd. (34.1%)                                                     Nevada
              Pittston Mineral Ventures International Ltd.                                         Delaware
              Pittston Mineral Ventures of Australia Pty Ltd.                                      Australia
                   Carbon Ventures Pty. Limited                                                    Australia
                        International Carbon (Aust.) Pty. Limited                                  Australia
                   Mining Project Investors Pty. Ltd. (34.2%)                                      Australia
                        Fodina Minerals Pty. Limited                                               Australia
                        MPI Gold Pty. Limited                                                      Australia
                              Stawell Gold Mines Pty. Limited                                      Australia
                        MPI Gold (USA), Inc.                                                       Delaware
                   Pittston Australasian Mineral Exploration Pty Limited                           Australia
                   Pittston Black Sands of Western Australia Pty Limited                           Australia

 

                                                                      EXHIBIT 23

Consent of Independent Auditors

The Board of Directors
The Pittston Company

We consent to incorporation by reference in the Registration Statements (Nos.
2-64258, 33-2039, 33-21393, 33-23333, 33-69040, 33-53565 and 333-02219) on Form
S-8 of The Pittston Company of our reports dated January 28, 1998, as listed in
the accompanying Index to Financial Statements in Item 14(a)1 included in the
1997 Annual Report on Form 10-K of The Pittston Company which reports appear
herein.

Our reports for Pittston Brink's Group, Pittston Burlington Group and Pittston
Minerals Group contain an explanatory paragraph that states that the financial
statements of Pittston Brink's Group, Pittston Burlington Group and Pittston
Minerals Group should be read in connection with the audited consolidated
financial statements of The Pittston Company and subsidiaries.

KPMG Peat Marwick LLP
Stamford, Connecticut

March 27, 1998

 

                                                                      Exhibit 24

                                POWER OF ATTORNEY

         KNOW ALL MEN BY THESE PRESENTS that the undersigned does hereby
constitute and appoint Michael T. Dan, Austin F. Reed and Gary R. Rogliano, and
each of them (with full power of substitution), his true and lawful
attorney-in-fact and agent to do any and all acts and things and to execute any
and all instruments which, with the advice of counsel, any of said attorneys and
agents may deem necessary or advisable to enable The Pittston Company, a
Virginia corporation (the "Company"), to comply with the Securities Act of 1933,
as amended, and the Securities Exchange Act of 1934, as amended, and any rules,
regulations and requirements of the Securities and Exchange Commission in
respect thereof, in connection with the preparation and filing of the Company's
annual report on Form 10-K for the fiscal year ended December 31, 1997 (the
"Form 10-K"), including specifically, but without limitation, power and
authority to sign his name as an officer and/or director of the Company, as the
case may be, to the Form 10-K or any amendments thereto; and the undersigned
does hereby ratify and confirm all that said attorneys shall do or cause to be
done by virtue hereof.

         IN WITNESS WHEREOF, I have hereunto set my hand this 19th day of March,
1998.

                                                  /s/ Roger G. Ackerman
                                           ------------------------------------
                                                      Roger G. Ackerman

 

                                POWER OF ATTORNEY

         KNOW ALL MEN BY THESE PRESENTS that the undersigned does hereby
constitute and appoint Michael T. Dan, Austin F. Reed and Gary R. Rogliano, and
each of them (with full power of substitution), his true and lawful
attorney-in-fact and agent to do any and all acts and things and to execute any
and all instruments which, with the advice of counsel, any of said attorneys and
agents may deem necessary or advisable to enable The Pittston Company, a
Virginia corporation (the "Company"), to comply with the Securities Act of 1933,
as amended, and the Securities Exchange Act of 1934, as amended, and any rules,
regulations and requirements of the Securities and Exchange Commission in
respect thereof, in connection with the preparation and filing of the Company's
annual report on Form 10-K for the fiscal year ended December 31, 1997 (the
"Form 10-K"), including specifically, but without limitation, power and
authority to sign his name as an officer and/or director of the Company, as the
case may be, to the Form 10-K or any amendments thereto; and the undersigned
does hereby ratify and confirm all that said attorneys shall do or cause to be
done by virtue hereof.

         IN WITNESS WHEREOF, I have hereunto set my hand this 12th day of March,
1998.

                                                   /s/ James R. Barker
                                           ------------------------------------
                                                       James R. Barker

 

                                POWER OF ATTORNEY

         KNOW ALL MEN BY THESE PRESENTS that the undersigned does hereby
constitute and appoint Michael T. Dan, Austin F. Reed and Gary R. Rogliano, and
each of them (with full power of substitution), his true and lawful
attorney-in-fact and agent to do any and all acts and things and to execute any
and all instruments which, with the advice of counsel, any of said attorneys and
agents may deem necessary or advisable to enable The Pittston Company, a
Virginia corporation (the "Company"), to comply with the Securities Act of 1933,
as amended, and the Securities Exchange Act of 1934, as amended, and any rules,
regulations and requirements of the Securities and Exchange Commission in
respect thereof, in connection with the preparation and filing of the Company's
annual report on Form 10-K for the fiscal year ended December 31, 1997 (the
"Form 10-K"), including specifically, but without limitation, power and
authority to sign his name as an officer and/or director of the Company, as the
case may be, to the Form 10-K or any amendments thereto; and the undersigned
does hereby ratify and confirm all that said attorneys shall do or cause to be
done by virtue hereof.

         IN WITNESS WHEREOF, I have hereunto set my hand this 9th day of March,
1998.

                                                  /s/ James L. Broadhead
                                           ------------------------------------
                                                      James L. Broadhead

 

                                POWER OF ATTORNEY

         KNOW ALL MEN BY THESE PRESENTS that the undersigned does hereby
constitute and appoint Michael T. Dan, Austin F. Reed and Gary R. Rogliano, and
each of them (with full power of substitution), his true and lawful
attorney-in-fact and agent to do any and all acts and things and to execute any
and all instruments which, with the advice of counsel, any of said attorneys and
agents may deem necessary or advisable to enable The Pittston Company, a
Virginia corporation (the "Company"), to comply with the Securities Act of 1933,
as amended, and the Securities Exchange Act of 1934, as amended, and any rules,
regulations and requirements of the Securities and Exchange Commission in
respect thereof, in connection with the preparation and filing of the Company's
annual report on Form 10-K for the fiscal year ended December 31, 1997 (the
"Form 10-K"), including specifically, but without limitation, power and
authority to sign his name as an officer and/or director of the Company, as the
case may be, to the Form 10-K or any amendments thereto; and the undersigned
does hereby ratify and confirm all that said attorneys shall do or cause to be
done by virtue hereof.

         IN WITNESS WHEREOF, I have hereunto set my hand this 11th day of March,
1998.

                                                   /s/ William F. Craig
                                           ------------------------------------
                                                       William F. Craig

 

                                POWER OF ATTORNEY

         KNOW ALL MEN BY THESE PRESENTS that the undersigned does hereby
constitute and appoint Michael T. Dan, Austin F. Reed and Gary R. Rogliano, and
each of them (with full power of substitution), his true and lawful
attorney-in-fact and agent to do any and all acts and things and to execute any
and all instruments which, with the advice of counsel, any of said attorneys and
agents may deem necessary or advisable to enable The Pittston Company, a
Virginia corporation (the "Company"), to comply with the Securities Act of 1933,
as amended, and the Securities Exchange Act of 1934, as amended, and any rules,
regulations and requirements of the Securities and Exchange Commission in
respect thereof, in connection with the preparation and filing of the Company's
annual report on Form 10-K for the fiscal year ended December 31, 1997 (the
"Form 10-K"), including specifically, but without limitation, power and
authority to sign his name as an officer and/or director of the Company, as the
case may be, to the Form 10-K or any amendments thereto; and the undersigned
does hereby ratify and confirm all that said attorneys shall do or cause to be
done by virtue hereof.

         IN WITNESS WHEREOF, I have hereunto set my hand this 13th day of March,
1998.

                                                 /s/ Charles F. Haywood
                                           ------------------------------------
                                                     Charles F. Haywood

 

                                POWER OF ATTORNEY

         KNOW ALL MEN BY THESE PRESENTS that the undersigned does hereby
constitute and appoint Michael T. Dan, Austin F. Reed and Gary R. Rogliano, and
each of them (with full power of substitution), his true and lawful
attorney-in-fact and agent to do any and all acts and things and to execute any
and all instruments which, with the advice of counsel, any of said attorneys and
agents may deem necessary or advisable to enable The Pittston Company, a
Virginia corporation (the "Company"), to comply with the Securities Act of 1933,
as amended, and the Securities Exchange Act of 1934, as amended, and any rules,
regulations and requirements of the Securities and Exchange Commission in
respect thereof, in connection with the preparation and filing of the Company's
annual report on Form 10-K for the fiscal year ended December 31, 1997 (the
"Form 10-K"), including specifically, but without limitation, power and
authority to sign his name as an officer and/or director of the Company, as the
case may be, to the Form 10-K or any amendments thereto; and the undersigned
does hereby ratify and confirm all that said attorneys shall do or cause to be
done by virtue hereof.

         IN WITNESS WHEREOF, I have hereunto set my hand this 13th day of March,
1998.

                                                   /s/ Ronald M. Gross
                                           ------------------------------------
                                                       Ronald M. Gross

 

                                POWER OF ATTORNEY

         KNOW ALL MEN BY THESE PRESENTS that the undersigned does hereby
constitute and appoint Michael T. Dan, Austin F. Reed and Gary R. Rogliano, and
each of them (with full power of substitution), his true and lawful
attorney-in-fact and agent to do any and all acts and things and to execute any
and all instruments which, with the advice of counsel, any of said attorneys and
agents may deem necessary or advisable to enable The Pittston Company, a
Virginia corporation (the "Company"), to comply with the Securities Act of 1933,
as amended, and the Securities Exchange Act of 1934, as amended, and any rules,
regulations and requirements of the Securities and Exchange Commission in
respect thereof, in connection with the preparation and filing of the Company's
annual report on Form 10-K for the fiscal year ended December 31, 1997 (the
"Form 10-K"), including specifically, but without limitation, power and
authority to sign his name as an officer and/or director of the Company, as the
case may be, to the Form 10-K or any amendments thereto; and the undersigned
does hereby ratify and confirm all that said attorneys shall do or cause to be
done by virtue hereof.

         IN WITNESS WHEREOF, I have hereunto set my hand this 13th day of March,
1998.

                                                  /s/ David L. Marshall
                                           ------------------------------------
                                                      David L. Marshall

 

                                POWER OF ATTORNEY

         KNOW ALL MEN BY THESE PRESENTS that the undersigned does hereby
constitute and appoint Michael T. Dan, Austin F. Reed and Gary R. Rogliano, and
each of them (with full power of substitution), his true and lawful
attorney-in-fact and agent to do any and all acts and things and to execute any
and all instruments which, with the advice of counsel, any of said attorneys and
agents may deem necessary or advisable to enable The Pittston Company, a
Virginia corporation (the "Company"), to comply with the Securities Act of 1933,
as amended, and the Securities Exchange Act of 1934, as amended, and any rules,
regulations and requirements of the Securities and Exchange Commission in
respect thereof, in connection with the preparation and filing of the Company's
annual report on Form 10-K for the fiscal year ended December 31, 1997 (the
"Form 10-K"), including specifically, but without limitation, power and
authority to sign his name as an officer and/or director of the Company, as the
case may be, to the Form 10-K or any amendments thereto; and the undersigned
does hereby ratify and confirm all that said attorneys shall do or cause to be
done by virtue hereof.

         IN WITNESS WHEREOF, I have hereunto set my hand this 13th day of March,
1998.

                                                  /s/ Robert H. Spilman
                                           ------------------------------------
                                                      Robert H. Spilman

 

                                POWER OF ATTORNEY

         KNOW ALL MEN BY THESE PRESENTS that the undersigned does hereby
constitute and appoint Michael T. Dan, Austin F. Reed and Gary R. Rogliano, and
each of them (with full power of substitution), his true and lawful
attorney-in-fact and agent to do any and all acts and things and to execute any
and all instruments which, with the advice of counsel, any of said attorneys and
agents may deem necessary or advisable to enable The Pittston Company, a
Virginia corporation (the "Company"), to comply with the Securities Act of 1933,
as amended, and the Securities Exchange Act of 1934, as amended, and any rules,
regulations and requirements of the Securities and Exchange Commission in
respect thereof, in connection with the preparation and filing of the Company's
annual report on Form 10-K for the fiscal year ended December 31, 1997 (the
"Form 10-K"), including specifically, but without limitation, power and
authority to sign his name as an officer and/or director of the Company, as the
case may be, to the Form 10-K or any amendments thereto; and the undersigned
does hereby ratify and confirm all that said attorneys shall do or cause to be
done by virtue hereof.

         IN WITNESS WHEREOF, I have hereunto set my hand this 18th day of March,
1998.

                                                  /s/ Adam H. Zimmerman
                                           ------------------------------------
                                                      Adam H. Zimmerman

 

                                POWER OF ATTORNEY

         KNOW ALL MEN BY THESE PRESENTS that the undersigned does hereby
constitute and appoint Austin F. Reed and Gary R. Rogliano, and each of them
(with full power of substitution), his true and lawful attorney-in-fact and
agent to do any and all acts and things and to execute any and all instruments
which, with the advice of counsel, any of said attorneys and agents may deem
necessary or advisable to enable The Pittston Company, a Virginia corporation
(the "Company"), to comply with the Securities Act of 1933, as amended, and the
Securities Exchange Act of 1934, as amended, and any rules, regulations and
requirements of the Securities and Exchange Commission in respect thereof, in
connection with the preparation and filing of the Company's annual report on
Form 10-K for the fiscal year ended December 31, 1997 (the "Form 10-K"),
including specifically, but without limitation, power and authority to sign his
name as an officer and/or director of the Company, as the case may be, to the
Form 10-K or any amendments thereto; and the undersigned does hereby ratify and
confirm all that said attorneys shall do or cause to be done by virtue hereof.

         IN WITNESS WHEREOF, I have hereunto set my hand this 24th day of March,
1998.

                                                   /s/ Michael T. Dan
                                           ------------------------------------
                                                       Michael T. Dan

 

                                POWER OF ATTORNEY

         KNOW ALL MEN BY THESE PRESENTS that the undersigned does hereby
constitute and appoint Michael T. Dan, Austin F. Reed and James B. Hartough, and
each of them (with full power of substitution), his true and lawful
attorney-in-fact and agent to do any and all acts and things and to execute any
and all instruments which, with the advice of counsel, any of said attorneys and
agents may deem necessary or advisable to enable The Pittston Company, a
Virginia corporation (the "Company"), to comply with the Securities Act of 1933,
as amended, and the Securities Exchange Act of 1934, as amended, and any rules,
regulations and requirements of the Securities and Exchange Commission in
respect thereof, in connection with the preparation and filing of the Company's
annual report on Form 10-K for the fiscal year ended December 31, 1997 (the
"Form 10-K"), including specifically, but without limitation, power and
authority to sign his name as an officer and/or director of the Company, as the
case may be, to the Form 10-K or any amendments thereto; and the undersigned
does hereby ratify and confirm all that said attorneys shall do or cause to be
done by virtue hereof.

         IN WITNESS WHEREOF, I have hereunto set my hand this 24th day of March,
1998.

                                                  /s/ Gary R. Rogliano
                                           ------------------------------------
                                                      Gary R. Rogliano

 

                                                                 EXHIBIT 99(b)

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 11-K

               [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                      FOR THE YEAR ENDED DECEMBER 31, 1997

                                       OR

             [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE

                         SECURITIES EXCHANGE ACT OF 1934

         FOR THE TRANSITION PERIOD FROM ____________ TO _______________

                          COMMISSION FILE NUMBER 1-9148

            1994 EMPLOYEE STOCK PURCHASE PLAN OF THE PITTSTON COMPANY
                            (FULL TITLE OF THE PLAN)

                              THE PITTSTON COMPANY
          (NAME OF THE ISSUER OF SECURITIES HELD PURSUANT TO THE PLAN)

        P.O. BOX 4229
   1000 VIRGINIA CENTER PKWY.
      RICHMOND, VIRGINIA                               23058-4229
(ADDRESS OF ISSUER'S PRINCIPAL                         (ZIP CODE)
        EXECUTIVE OFFICES)

                          INDEPENDENT AUDITORS' REPORT

The Participants of the 1994 Employee Stock
  Purchase Plan of The Pittston Company:

We have audited the accompanying statements of financial condition of the 1994
Employee Stock Purchase Plan of The Pittston Company (the "Plan") as of December
31, 1997 and 1996, and the related statements of income and changes in plan
equity for each of the years in the three-year period ended December 31, 1997.
These financial statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial condition of the 1994 Employee Stock
Purchase Plan as of December 31, 1997 and 1996, and the income and changes in
plan equity for each of the years in the three-year period ended December 31,
1997, in conformity with generally accepted accounting principles.

KPMG Peat Marwick LLP
Richmond, Virginia

March 17, 1998

            1994 EMPLOYEE STOCK PURCHASE PLAN OF THE PITTSTON COMPANY

                        STATEMENT OF FINANCIAL CONDITION

                                DECEMBER 31, 1997

- ------------------------------------------------------------------------------------------------------------------------------------

                                                                    Pittston           Pittston           Pittston
                                                               Brink's Group   Burlington Group     Minerals Group
                                                                Common Stock       Common Stock       Common Stock             Total

- ------------------------------------------------------------------------------------------------------------------------------------

ASSETS:

Common stock, at
  market value (Note 2)                                          $3,222,294          1,404,716            475,118          5,102,128
Contributions receivable
  from The Pittston Company (Note 5)                                526,738            275,556            174,146            976,440
- ------------------------------------------------------------------------------------------------------------------------------------

Total assets                                                     $3,749,032          1,680,272            649,264          6,078,568
====================================================================================================================================

LIABILITIES AND PLAN EQUITY:

Payable to plan participants                                     $   78,639             43,074             10,893            132,606
Plan equity                                                       3,670,393          1,637,198            638,371          5,945,962
- ------------------------------------------------------------------------------------------------------------------------------------

Total liabilities and plan equity                                $3,749,032          1,680,272            649,264          6,078,568
====================================================================================================================================

See accompanying notes to financial statements.

                                       --
                                        3

            1994 EMPLOYEE STOCK PURCHASE PLAN OF THE PITTSTON COMPANY

                        STATEMENT OF FINANCIAL CONDITION

                                DECEMBER 31, 1996

- ------------------------------------------------------------------------------------------------------------------------------------

                                                       Pittston                Pittston              Pittston
                                                  Brink's Group        Burlington Group        Minerals Group
                                                   Common Stock            Common Stock          Common Stock               Total

- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                   
ASSETS:

Cash                                               $     1,951                      751                 1,942               4,644
Common stock, at
  market value (Note 2)                              2,033,505                  886,100               847,378           3,766,983
Contributions receivable
  from The Pittston Company                            472,567                  265,760               167,275             905,602
- ---------------------------------------------------------------------------------------------------------------------------------

Total assets                                       $ 2,508,023                1,152,611             1,016,595           4,677,229
=================================================================================================================================

LIABILITIES AND PLAN EQUITY:

Payable to plan participants                       $   160,921                   73,500                88,639             323,060
Plan equity                                          2,347,102                1,079,111               927,956           4,354,169
- ------------------------------------------------------------------------------------------------------------------------------------

Total liabilities and plan equity                  $ 2,508,023                1,152,611             1,016,595           4,677,229
==================================================================================================================================

See accompanying notes to financial statements.

                                       --
                                        4

            1994 EMPLOYEE STOCK PURCHASE PLAN OF THE PITTSTON COMPANY

                 STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY

                          YEAR ENDED DECEMBER 31, 1997

- ------------------------------------------------------------------------------------------------------------------------------------

                                                                      Pittston            Pittston          Pittston
                                                                   Brink's Group Burlington Group    Minerals Group
                                                                    Common Stock     Common Stock      Common Stock            Total

- ------------------------------------------------------------------------------------------------------------------------------------

INCOME:
Participant contributions                                            $1,074,916          559,881           349,927         1,984,724
Dividend income                                                           8,715           12,777            42,071            63,563
Unrealized appreciation (depreciation)
  on common stock (Note 3)                                              887,903          305,630          (462,445)          731,088
Realized gain (loss) on distributions (Note 4)                          798,646          286,224           (60,371)        1,024,499
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                      2,770,180        1,164,512          (130,818)        3,803,874
====================================================================================================================================

WITHDRAWALS:
Distribution to Plan participants,
  at market value                                                     1,446,889          606,425           158,767         2,212,081
- ------------------------------------------------------------------------------------------------------------------------------------

Increase (decrease) in Plan equity                                    1,323,291          558,087          (289,585)        1,591,793
Plan equity--beginning of year                                        2,347,102        1,079,111           927,956         4,354,169
- ------------------------------------------------------------------------------------------------------------------------------------

Plan equity--end of year                                             $3,670,393        1,637,198           638,371         5,945,962
====================================================================================================================================

See accompanying notes to financial statements.

                                       --
                                        5

            1994 EMPLOYEE STOCK PURCHASE PLAN OF THE PITTSTON COMPANY

                 STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY

                          YEAR ENDED DECEMBER 31, 1996

- ------------------------------------------------------------------------------------------------------------------------------------

                                                Pittston         Pittston         Pittston          Pittston
                                          Services Group    Brink's Group  Burlington Group    Minerals Group
                                            Common Stock     Common Stock      Common Stock      Common Stock           Total

- ------------------------------------------------------------------------------------------------------------------------------------

INCOME:

Participant contributions                     $      --           954,941           531,992           330,132       1,817,065
Dividend income                                      --             4,621             8,270            28,221          41,112
Unrealized appreciation
  on common stock (Note 3)                         12,282         449,708           142,412           189,400         793,802
Realized gain on distributions (Note 4)              --           293,950            70,208            59,418         423,576
- -----------------------------------------------------------------------------------------------------------------------------

                                                   12,282       1,703,220           752,882           607,171       3,075,555
=============================================================================================================================

WITHDRAWALS AND OTHER:
Distribution to Plan participants,
  at market value                                    --           813,836           287,853           288,212       1,389,901
Effect of Brink's Stock Proposal (Note 1)       2,071,800      (1,457,718)         (614,082)             --
- -----------------------------------------------------------------------------------------------------------------------------

                                                2,071,800        (643,882)         (326,229)          288,212       1,389,901
=============================================================================================================================

(Decrease) increase in Plan equity             (2,059,518)      2,347,102         1,079,111           318,959       1,685,654
Plan equity--beginning of year                  2,059,518            --                --             608,997       2,668,515
- -----------------------------------------------------------------------------------------------------------------------------

Plan equity--end of year                      $      --         2,347,102         1,079,111           927,956       4,354,169
=============================================================================================================================

See accompanying notes to financial statements.

                                       --
                                        6

            1994 EMPLOYEE STOCK PURCHASE PLAN OF THE PITTSTON COMPANY

                 STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY

                          YEAR ENDED DECEMBER 31, 1995

- ------------------------------------------------------------------------------------------------------------------------------------

                                                                                  Pittston             Pittston
                                                                            Services Group       Minerals Group
                                                                              Common Stock         Common Stock                Total

- ------------------------------------------------------------------------------------------------------------------------------------

INCOME:

Participant contributions                                                       $1,154,431              374,180            1,528,611
Dividend income                                                                      7,887               14,131               22,018
Unrealized appreciation on
  common stock (Note 3)                                                            501,254               86,717              587,971
Realized gain (loss) on distributions (Note 4)                                      39,618               (4,641)              34,977
- ------------------------------------------------------------------------------------------------------------------------------------

                                                                                 1,703,190              470,387            2,173,577
- ------------------------------------------------------------------------------------------------------------------------------------

WITHDRAWALS:

Distribution to Plan participants,
  at market value                                                                  233,704               48,882              282,586
- ------------------------------------------------------------------------------------------------------------------------------------

Increase in Plan equity                                                          1,469,486              421,505            1,890,991
Plan equity--beginning of year                                                     590,032              187,492              777,524
- ------------------------------------------------------------------------------------------------------------------------------------

Plan equity--end of year                                                        $2,059,518              608,997            2,668,515
====================================================================================================================================

See accompanying notes to financial statements.

                                       --
                                        7

            1994 EMPLOYEE STOCK PURCHASE PLAN OF THE PITTSTON COMPANY

                          NOTES TO FINANCIAL STATEMENTS

                           DECEMBER 31, 1997 AND 1996

1.    SUMMARY OF PLAN

The 1994 Employee Stock Purchase Plan of The Pittston Company (the "Plan") is an
"employee stock purchase plan" within the meaning of Section 423 of the Internal
Revenue Code of 1986 (the "Code"), as amended, covering all eligible employees
of The Pittston Company and its subsidiaries (the "Company"). The Plan years
begin on January 1 and end on December 31.

During 1995, the Plan provided that participant contributions be used to buy
either Pittston Services Group Common Stock ("Services Stock") or Pittston
Minerals Group Common Stock ("Minerals Stock") or both. On January 18, 1996, the
shareholders of the Company approved the Brink's Stock Proposal, resulting in
the modification, effective as of January 19, 1996, of the capital structure of
the Company to include an additional class of common stock. The outstanding
shares of Services Stock were redesignated as Brink's Group Common Stock
("Brink's Stock") on a share-for-share basis, and a new class of common stock,
designated as Burlington Group Common Stock ("Burlington Stock"), was
distributed on the basis of one-half share of Burlington Stock for each share of
Services Stock held by shareholders of record on January 19, 1996. Accordingly,
on the effective date, 48,702 shares of Services Stock held by the Plan were
converted to 48,702 shares of Brink's Stock and 24,351 shares of Burlington
Stock and a fair value for these shares of $1,457,718 and $614,082,
respectively, was allocated from Services Stock to Brink's Stock and Burlington
Stock.

Upon approval of the Brink's Stock Proposal, the Plan was amended to provide
that participant contributions can be used to purchase Brink's Stock, Burlington
Stock, Minerals Stock, or a combination, as elected by the participant. For each
of the Plan years, the purchase price for each share of common stock to be
purchased under the Plan is the lesser of 85% of the Fair Market Value (as
defined) of such share on either (a) the first date of each six-month period
commencing on each July 1 or January 1 (the "Offering Date") or (b) the last day
of each six-month period from an Offering Date (the "Purchase Date"). The Fair
Market Value with respect to shares of any class of common stock is generally
defined as the average of the high and low quoted sales price of a share of such
stock on the applicable date as reported on the New York Stock Exchange
Composite Transaction Tape.

The maximum number of shares of common stock which may be issued or allocated
pursuant to the Plan is 750,000 shares of Brink's Stock, 375,000 shares of
Burlington Stock and 250,000 shares of Minerals Stock.

ELIGIBILITY

Generally, any employee of The Pittston Company or a designated subsidiary (a
"Subsidiary") (a) whose date of hire was at least six months prior to the
commencement of the six-month period from an Offering Date to and including the
next following Purchase Date (the "Offering Period") and (b) who is customarily
employed for at least 20 hours per week and at least five months in a calendar
year is eligible to participate in the Plan; provided, however, that in the case
of an employee who is covered by a collective bargaining agreement, he or she
shall not be considered an eligible employee unless and until the labor
organization representing such individual has

                                       --
                                        8

accepted the Plan on behalf of the employees in the collective bargaining unit.
Any such employee shall continue to be an eligible employee during an approved
leave of absence provided such employee's right to continue employment with The
Pittston Company or a Subsidiary upon expiration of such employee's leave of
absence is guaranteed either by statute or by contract with or a policy of The
Pittston Company or a Subsidiary.

CONTRIBUTIONS

Participants can elect to contribute any whole percentage from 1% up to and
including 10% of their annual base rate of pay, including commissions, but
generally excluding overtime or premium pay. A participant may reduce (but not
increase) the rate of payroll withholding during an Offering Period at any time
prior to the end of such Offering Period for which such reduction is to be
effective. Not more than one reduction may be made in any Offering Period unless
otherwise determined by nondiscriminatory rules. Each participant designates a
percentage in multiples of 10% of the amounts withheld during an Offering Period
that is to be used to purchase Brink's Stock, Burlington Stock or Minerals
Stock; provided, however, that 100% of the amount withheld is allocated between
the three classes of common stock. In the event a participant elects to reduce
the rate of payroll withholding during an Offering Period, such reduction shall
be applied ratably to the allocation of his or her withheld amounts among the
three classes of common stock. During an Offering Period, a participant may not
change the allocation of his or her withholdings for such Offering Period
although such allocation may be changed for any subsequent Offering Period. A
participant who elects to cease participation in the Plan may not resume
participation in the Plan until after the expiration of one full Offering Period
(following cessation of participation).

No participant shall have a right to purchase shares of any class of common
stock if (a) immediately after electing to purchase such shares, such
participant would own common stock possessing 5% or more of the total combined
voting power or value of all classes of stock of The Pittston Company or of any
Subsidiary, or (b) the rights of such participant to purchase common stock under
the Plan would accrue at a rate that exceeds $15,000 of Fair Market Value of
such common stock (determined at the time or times such rights are granted) for
each calendar year for which such rights are outstanding at any time.

DISTRIBUTION

A participant may elect, as of the first day of any calendar quarter, to have
some or all of the full shares of any class of common stock purchased by the
Plan on his or her behalf, registered in such individual's name. Shares of
common stock purchased on behalf of a participant generally must be held by the
Plan or participant for a period of at least six months from the date such
shares of common stock are purchased. Shares registered in the name of a
participant may not be conveyed, sold, transferred, encumbered or otherwise
disposed of until the expiration of this six-month period without the prior
written consent of the Company.

Should a participant elect to cease active participation in the Plan with
respect to any or all of the three classes of common stock at any time up to the
end of an Offering Period, all payroll deductions credited to such participant's
plan account and allocated to the purchase of the class of common stock with
respect to which the participant is ceasing participation shall be returned to
such participant in cash, without interest, as promptly as practicable.

In the event of the termination of a participant's employment for any reason,
including retirement or death, or the failure of a participant to remain
eligible under the terms of the Plan, all full shares of each class of common
stock then held for his or her benefit shall be registered in such individual's
name and an amount equal to the Fair Market Value (on the date of registration
of full shares of common stock in the name of the participant) of any fractional
share then held for the benefit of such participant shall be paid to such
individual, in cash, as soon as administratively

                                       --
                                        9

practicable, and such individual shall thereupon cease to own the right to any
such fractional share. Any amounts credited to such individual, prior to the
last day of each six-month Offering Period, shall be refunded, without interest,
to such individual or, in the event of his or her death, to his or her legal
representative.

TERMINATION

The Plan will remain in effect until June 30, 2002, unless extended pursuant to
shareholder approval.

The Board of Directors of The Pittston Company may, at any time and from time to
time, amend, modify or terminate the Plan, but no such amendment or modification
without the approval of the shareholders shall: (a) increase the maximum number
(determined as provided in the Plan) of shares of any class of common stock
which may be issued pursuant to the Plan; (b) permit the issuance of any shares
of any class of common stock at a purchase price less than that provided in the
Plan as approved by the shareholders; (c) extend the term of the Plan; or (d)
cause the Plan to fail to meet the requirements of an "employee stock purchase
plan" under the Code.

BASIS OF ACCOUNTING

The accompanying financial statements are prepared on the accrual basis of
accounting.

INCOME TAXES

The Plan, and the rights of participants to make purchases thereunder, is
intended to qualify as an "employee stock purchase plan" under Section 423 of
the Code. The Plan is not qualified under Section 401(a) of the Code. Pursuant
to Section 423 of the Code, no income (other than dividends) will be taxable to
a participant until disposition of the shares purchased under the Plan. Upon the
disposition of the shares, the participant will generally be subject to tax and
the amount and character of the tax will depend upon the holding period.
Dividends received on shares held by the Plan on behalf of a participant are
taxable to the participant as ordinary income. Therefore, the Plan does not
provide for income taxes.

ADMINISTRATIVE COSTS

All administrative costs incurred by the Plan are paid by the Company.

                                       --
                                       10

2.    INVESTMENTS

At December 31, 1997, investments in the Plan consisted of 80,057 shares of
Brink's Stock with a total cost of $1,523,359, 53,513 shares of Burlington stock
with a total cost of $804,462 and 63,349 shares of Minerals Stock with a total
cost of $661,446.

At December 31, 1996, investments in the Plan consisted of 75,124 shares of
Brink's Stock with a total cost of $1,222,473, 43,575 shares of Burlington stock
with a total cost of $591,476 and 55,114 shares of Minerals Stock with a total
cost of $571,261.

At December 31, 1997 and 1996, the Plan had a total of 1,361 and 1,402
participants, respectively. The cost values of investments under the Plan are
calculated using an average cost methodology.

3.    UNREALIZED APPRECIATION (DEPRECIATION) ON COMMON STOCK

Changes in unrealized appreciation and depreciation on common stock of the Plan
are as follows:

                                                                             1997

- -------------------------------------------------------------------------------------------------------------------------------

                                             Pittston Brink's   Pittston Burlington          Pittston Minerals
                                                 Group Common          Group Common               Group Common
                                                        Stock                 Stock                      Stock           Total

- -------------------------------------------------------------------------------------------------------------------------------

Unrealized appreciation (depreciation):

     Beginning of year                            $   811,032               294,624                     276,117     1,381,773
     End of year                                    1,698,935               600,254                    (186,328)    2,112,861
- -------------------------------------------------------------------------------------------------------------------------------

Change in unrealized
  appreciation (depreciation)                     $   887,903               305,630                    (462,445)      731,088
===============================================================================================================================

                                                                            1996

- --------------------------------------------------------------------------------------------------------------------------------

                                 Pittston Services   Pittston Brink's   Pittston Burlington        Pittston Minerals
                                      Group Common       Group Common          Group Common             Group Common
                                             Stock              Stock                 Stock                    Stock       Total

- --------------------------------------------------------------------------------------------------------------------------------
                                                                                                             
Unrealized appreciation:

     Beginning of year                   $ 501,254            --                   --                         86,717     587,971
     Effect of Brink's Stock
       Proposal                           (513,536)          361,324                152,212                       --          --
     End of year                                --           811,032                294,624                  276,117    1,381,773
- ---------------------------------------------------------------------------------------------------------------------------------

Change in unrealized
  appreciation                           $  12,282           449,708                142,412                  189,400      793,802
=================================================================================================================================

                                                                             1995
- ---------------------------------------------------------------------------------------------------------------------------------

                                                                  Pittston Services            Pittston Minerals
                                                                       Group Common                 Group Common
                                                                              Stock                        Stock            Total

- ---------------------------------------------------------------------------------------------------------------------------------

Unrealized appreciation:
     Beginning of year                                                        --                              --               --
     End of year                                                   $        501,254                       86,717          587,971
- ---------------------------------------------------------------------------------------------------------------------------------

Change in unrealized
  appreciation                                                     $        501,254                       86,717          587,971
=================================================================================================================================

                                       --
                                       11

4.    REALIZED GAIN (LOSS) ON DISTRIBUTIONS

The realized gain (loss) on distribution of common stock as a result of
participant withdrawals is as follows:

                                                                          1997

- -------------------------------------------------------------------------------------------------------------------

                                      Pittston Brink's     Pittston Burlington     Pittston Minerals
                                          Group Common            Group Common          Group Common
                                                 Stock                   Stock                 Stock           Total

- -------------------------------------------------------------------------------------------------------------------

Value of shares distributed:
  Market value                            $  1,526,632                 635,403               236,022       2,398,057
  Cost basis                                   727,986                 349,179               296,393       1,373,558
- -------------------------------------------------------------------------------------------------------------------

Realized gain (loss) on distribution
  of shares to participants               $    798,646                 286,224               (60,371)      1,024,499
====================================================================================================================

                                                                          1996

- -------------------------------------------------------------------------------------------------------------------

                                      Pittston Brink's     Pittston Burlington     Pittston Minerals
                                          Group Common            Group Common          Group Common
                                                 Stock                   Stock                 Stock           Total

- -------------------------------------------------------------------------------------------------------------------

Value of shares distributed:
  Market value                            $    699,852                 214,353               210,631       1,124,836
  Cost basis                                   405,902                 144,145               151,213         701,260
- -------------------------------------------------------------------------------------------------------------------

Realized gain on distribution
  of shares to participants               $    293,950                  70,208                59,418         423,576
====================================================================================================================

                                                                        1995

- -------------------------------------------------------------------------------------------------------------------

                                                                  Pittston Services  Pittston Minerals
                                                                       Group Common       Group Common
                                                                              Stock              Stock         Total

- -------------------------------------------------------------------------------------------------------------------

Value of shares distributed:
     Market value                                                 $         186,767             37,824       224,591
     Cost basis                                                             147,149             42,465       189,614
- -------------------------------------------------------------------------------------------------------------------

Realized gain (loss) on distribution
  of shares to participants                                       $          39,618             (4,641)       34,977
====================================================================================================================

Participant withdrawals for the year ended December 31, 1997 consisted of 39,340
shares of Brink's Stock, 23,684 shares of Burlington Stock and 28,266 shares of
Minerals Stock.

Participant withdrawals for the year ended December 31, 1996 consisted of 25,795
shares of Brink's Stock, 11,658 shares of Burlington Stock and 14,967 shares of
Minerals Stock.

Participant withdrawals for the year ended December 31, 1995 consisted of 6,840
shares of Services Stock and 3,401 shares of Minerals Stock.

5.    SUBSEQUENT EVENT

In January 1998, the Plan purchased from The Pittston Company Employee Benefits
Trust, 20,786 shares of Brink's Stock at $25.341 per share, 12,379 shares of
Burlington Stock at $22.26 per share and 28,381 shares of Minerals Stock at
$6.136 per share for a total purchase price of $976,440 to satisfy contributions
made for the last six months of the Plan year ended December 31, 1997.

                                       --
                                       12

                                    SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the trustee
(or other persons who administer the employee benefit plan) have duly caused
this annual report to be signed on its behalf by the undersigned hereunto duly
authorized.

                                               1994 Employee Stock Purchase Plan
                                                   of The Pittston Company
                                               ---------------------------------
                                                        (Name of Plan)

                                                        Frank T. Lennon
                                                -------------------------------
                                                       (Frank T. Lennon
                                                Vice President - Human Resources
                                                      and Administration)

March 27, 1998

                                       --
                                       13

                         CONSENT OF INDEPENDENT AUDITORS

We consent to incorporation by reference in the registration statement (No.
33-53565) on Form S-8 of The Pittston Company of our report dated March 17,
1998, relating to the statements of financial condition of the 1994 Employee
Stock Purchase Plan of The Pittston Company as of December 31, 1997 and 1996,
and the related statements of income and changes in plan equity for each of the
years in the three-year period ended December 31, 1997, which report appears in
the 1997 Annual Report on Form 11-K of the 1994 Employee Stock Purchase Plan of
The Pittston Company.

KPMG Peat Marwick LLP
Richmond, Virginia

March 27, 1998

                                       --
                                       14

 

  

                           5

This schedule contains summary  financial  information from The Pittston Company
Form 10K for the calendar year ended  December 31, 1997, and is qualified in its
entirety by reference to such financial statements.

                    1,000

                       12-MOS
              DEC-31-1997
                   DEC-31-1997
                              69,878
                         2,227
                      520,817
                        21,985
                         40,174
                   726,805
                           1,167,300
                     519,658
                   1,995,944
              643,673
                            191,812
                            69,914
                    0
                          1,138
                         614,566
     1,995,944
                            630,626
                 3,394,398
                              609,025
                    3,220,270
                   (3,104)
                    10,664
                  27,119
                    158,255
                        48,057
                110,198
                           0
                          0
                                0
                       110,198
                            0
                            0

Pittston Brink's Group - Basic - 1.92
Pittston Burlington Group - Basic - 1.66
Pittston Minerals Group - Basic - .09
Pittston Brink's Group - Diluted - 1.90
Pittston Burlington Group - Diluted - 1.62
Pittston Minerals Group -Diluted - .09

  

                           5

This schedule contains summary  financial  information from The Pittston Company
Form 10K for the calendar year ended  December 31, 1996, and is qualified in its
entirety by reference to such financial statements.

                       1,000

                                 12-MOS
                        DEC-31-1996
                             DEC-31-1996
                                        41,217
                                   1,856
                                459,366
                                  16,116
                                   37,127
                             638,414
                                       998,607
                               457,756
                             1,832,603
                        588,691
                                      158,837
                                      70,413
                              0
                                    1,154
                                   535,140
               1,832,603
                                      696,513
                           3,091,195
                                        707,497
                              2,942,065
                             (47,299)
                               7,688
                            14,074
                              146,696
                                  42,542
                          104,154
                                     0
                                    0
                                          0
                                 104,154
                                      0
                                      0

Pittston Brink's Group - Basic - 1.56
Pittston Burlington Group - Basic - 1.76
Pittston Minerals Group - Basic - 1.14
Pittston Brink's Group - Diluted - 1.54
Pittston Burlington Group - Diluted - 1.72
Pittston Minerals Group - Diluted - 1.08

  

                           5

This schedule contains summary  financial  information from The Pittston Company
Form 10K for the calendar year ended  December 31, 1995, and is qualified in its
entirety by reference to such financial statements.

                        1,000

                       12-MOS
              DEC-31-1995
                   DEC-31-1995
                                 52,823
                           29,334
                         397,043
                           16,075
                            46,399
                      636,693
                                923,514
                        437,346
                      1,807,372
                 594,488
                               133,283
                               70,767
                       0
                             1,362
                            449,850
        1,807,372
                               722,851
                    2,914,441
                                 696,295
                       2,793,438
                            0
                        5,762
                     14,253
                       130,336
                           32,364
                    97,972
                              0
                             0
                                   0
                           97,972
                               0
                               0

Pittston Brink's Group - Basic - 1.35
Pittston Burlington Group - Basic - 1.73
Pittston Minerals Group - Basic - 1.45
Pittston Brink's Group - Diluted - 1.33
Pittston Burlington Group - Diluted - 1.68
Pittston Minerals Group - Diluted - 1.40