SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. __)
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
EMCOR GROUP, INC.
(Name of Registrant as Specified in its Charter)
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or Item
22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
[LOGO]
EMCOR GROUP, INC.
101 MERRITT SEVEN CORPORATE PARK
NORWALK, CONNECTICUT 06851
------------------------
NOTICE OF ANNUAL MEETING
------------------------
To the Stockholders of
EMCOR Group, Inc.
The Annual Meeting of Stockholders of EMCOR Group, Inc. (the 'Company')
will be held in the James Madison Room, Princeton Club, 15 West 43 Street, New
York, New York, on June 20, 1997, at 10:00 A.M. (local time) for the following
purposes:
1. To elect seven directors to serve until the next annual meeting and
until their successors are duly elected and qualify.
2. To ratify the appointment of Arthur Andersen LLP as independent
public accountants for 1997.
3. To transact such other business as may properly come before the
meeting or any adjournments thereof.
The Board of Directors has fixed the close of business on April 23, 1997 as
the record date for determination of stockholders entitled to receive notice of,
and to vote at, the Annual Meeting and any adjournment thereof.
YOUR ATTENTION IS RESPECTFULLY DIRECTED TO THE ACCOMPANYING PROXY
STATEMENT. WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING IN PERSON, PLEASE
COMPLETE AND RETURN THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED, WHICH REQUIRES
NO POSTAGE IF MAILED IN THE UNITED STATES.
BY ORDER OF THE BOARD OF DIRECTORS
JOSEPH W. BARNETT
Secretary
Norwalk, Connecticut
April 29, 1997
<PAGE>
EMCOR GROUP, INC.
------------------------
PROXY STATEMENT
1997 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD JUNE 20, 1997
------------------------
The enclosed proxy is solicited by the Board of Directors of EMCOR Group,
Inc., a Delaware corporation (the 'Company'), for use at the Annual Meeting of
Stockholders to be held at 10 A.M. (local time) on Friday, June 20, 1997 in the
James Madison Room, Princeton Club, 15 West 43 Street, New York, New York and at
any adjournment or postponement of such meeting. The enclosed proxy may be
revoked at any time before it is exercised by delivering a written notice to the
Secretary of the Company stating that the proxy is revoked, by executing a duly
exercised proxy bearing a later date and presenting it to the Secretary of the
Company, or by attending the Annual Meeting and voting in person. Unless
otherwise specified, the proxies from holders of Common Stock will be voted in
favor of each proposal set forth in the Notice of Annual Meeting.
As of April 23, 1996, the Company had outstanding 9,386,685 shares of
Common Stock, par value $.01 per share (the 'Common Stock'). Only stockholders
of record of Common Stock at the close of business on April 23, 1997 (the
'Record Date') are entitled to notice of, and to vote at, the Annual Meeting.
The mailing address of the principal executive offices of the Company is 101
Merritt Seven Corporate Park, Norwalk, Connecticut 06851, and the approximate
date on which this Proxy Statement and the accompanying proxy are being first
sent or given to stockholders is April 29, 1997. The Company's Annual Report to
Stockholders for the fiscal year ended December 31, 1996 accompanies this Proxy
Statement.
The Common Stock was the only voting security of the Company outstanding
and entitled to vote on the Record Date. The holders of record of a majority of
the outstanding shares of Common Stock entitled to vote will constitute a quorum
for the transaction of business at the Annual Meeting. Holders of Common Stock
are entitled to one vote per share on each matter to be voted upon at the Annual
Meeting. Assuming the presence of a quorum at the Annual Meeting, the
affirmative vote of the holders of a plurality of the votes cast by the holders
of shares of Common Stock present in person or represented by proxy at the
Annual Meeting is necessary for the election of directors. The affirmative vote
of the holders of a majority of the shares of Common Stock present or
represented by proxy and entitled to vote at the Annual Meeting is required for
the ratification of appointment of independent public accountants to audit the
accounts of the Company and its subsidiaries. With respect to an abstention from
voting on any matter, the shares will be considered present and entitled to vote
at the Annual Meeting. Abstentions will have the effect of a vote against
proposals brought before the meeting, but will not have an effect on the
election of the directors. If a broker indicates on the proxy that it does not
have discretionary authority as to certain shares to vote on a particular matter
(a broker non-vote), those shares will not be treated as present and entitled to
vote on that particular matter and, therefore, will be disregarded and will have
no effect on the outcome of the vote on such matter.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth as of April 23, 1997 certain information
regarding beneficial ownership of the Company's Common Stock by each person or
group known by the Company to be a beneficial owner of more than five percent of
the outstanding shares of Common Stock. Except as otherwise noted, to the
Company's
<PAGE>
knowledge, each person or group listed below has sole voting and investment
power with respect to the shares listed next to its name.
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIALLY OWNED OWNED
- ------------------------------------------------------------------ ------------------ -------
<S> <C> <C>
FMR Corp. ........................................................ 1,067,295(1)(2) 11.3%
82 Devonshire Street F7C
Boston, Massachusetts 02109
OCM Principal Opportunities Fund, L.P. .......................... 1,073,645(3) 11.4%
550 South Hope Street
Los Angeles, California 90071
Cumberland Associates ............................................ 722,703(4) 7.7%
1114 Avenue of the Americas
New York, New York 10036
</TABLE>
- ------------------
(1) As reported in a Schedule 13D dated July 26, 1996 filed with the Securities
and Exchange Commission (the 'SEC') by FMR Corp. ('FMR'), FMR, through its
wholly-owned subsidiary Fidelity Management & Research Company ('Fidelity'),
as investment advisor to funds (the 'Fidelity Funds'), beneficially owns
25,000 shares. In addition, FMR, through another wholly-owned subsidiary
Fidelity Management Trust Company ('FMTC') which is a bank as defined in
Section 3(a)(6) of the Securities Exchange Act of 1934, as amended, and
which serves as trustee or managing agent for various private investment
accounts and as investment advisor to certain other funds (the 'Accounts'),
beneficially owns 1,042,295 shares. The shares are owned directly by one of
the Fidelity Funds and one of the Accounts. The Schedule 13D states that the
1,042,295 shares include 28,272 shares and 28,272 shares issuable upon
exercise of a like number of the Company's Series X Warrants and Series Y
Warrants, respectively. Edward C. Johnson, III and members of his family may
be deemed to form a controlling group with respect to FMR. FMR, through its
control of FMTC, investment advisor to the Accounts, and the Accounts each
has sole power to dispose of and sole power to vote or direct the voting of
the 1,042,295 shares. The power to vote or direct the voting of the 25,000
shares owned directly by the Fidelity Funds resides with the Fidelity Funds'
Boards of Directors.
(2) There is a reserve of 140,618 shares of Common Stock for disputed claims
against the Company to be issued to holders of prepetition unsecured allowed
claims against the Company in its Chapter 11 proceeding concluded in
December 1994, which holders include FMR. To the extent such disputed claims
are disallowed, the number of shares beneficially owned by FMR will increase
in a presently undeterminable amount.
(3) As reported in Amendment No. 1 dated April 22, 1997 to Schedule 13D filed
with the SEC by OCM Principal Opportunities Fund, L.P. ('Fund') and Oaktree
Capital Management, LLC, General Partner of the Fund. Includes 107,645
shares held by TCW Special Credit Fund V--The Principal Fund managed by
Oaktree Capital Management, LLC.
(4) As stated in Amendment No. 3 dated February 4, 1997 to its Schedule 13D
filed with the SEC, Cumberland Associates has sole voting power and sole
power to dispose or to direct the disposition of 587,427 of these shares and
shared voting power and shared power to dispose or to direct the disposition
of 135,276 of these shares.
ELECTION OF DIRECTORS
At the Annual Meeting, seven directors are to be elected by the holders of
Common Stock to serve until the next Annual Meeting of Stockholders and until
their successors have been duly elected and qualify. To be elected as a
director, each nominee must receive the favorable vote of a plurality of the
shares present in person or represented by proxy and entitled to vote at the
meeting. Certain information concerning the nominees for election at the Annual
Meeting, each of whom is presently a director, is set forth below. While the
Board of Directors has no reason to believe that any of those named will not be
available as a candidate, should such a situation arise, the proxy may be voted
for the election of other nominees in the discretion of the persons acting
pursuant to the proxy.
2
<PAGE>
FRANK T. MACINNIS, Age 50; Chairman of the Board and Chief Executive
Officer of the Company since April 18, 1994 and President of the Company from
April 18, 1994 to April 4, 1997. From April 1990 to April 1994, Mr. MacInnis
served as President and Chief Executive Officer, and from August 1990 to April
1994 as Chairman of the Board, of Comstock Group Inc., a nationwide electrical
contracting company. In addition, from 1986 to April 1994 Mr. MacInnis was also
President of Spie Group Inc., which owned Comstock Group Inc., Spie Construction
Inc., a Canadian pipeline construction company, and Spie Horizontal Drilling
Inc., a U.S. company engaged in underwater drilling for pipelines and
communications cable. Mr. MacInnis is also a director of MAPCO Inc. and Portec,
Inc.
STEPHEN W. BERSHAD, Age 55; Chairman and Chief Executive Officer for more
than the past five years of Axsys Technologies, Inc., a manufacturer of
electronic components and controls. Director of the Company since December 15,
1994.
DAVID A.B. BROWN, Age 53; President of The Windsor Group, a management
consulting firm of which he is a co-founder, for more than the past five years.
Mr. Brown is also a director of BTU International, Inc. and Marine Drilling
Companies, Inc. Director of the Company since December 15, 1994.
THOMAS D. CUNNINGHAM, Age 48; Chairman of the Finance Committee of Swiss
Army Brands, Inc., an importer and distributor of Swiss Army knives and watches
and Sabatier and Forschner cutlery, since November 1996; from March 1994 to
November 1996 Executive Vice President and Chief Financial Officer of Swiss Army
Brands, Inc. For more than five years prior thereto, Mr. Cunningham was a
Managing Director of J.P. Morgan & Co. Incorporated, an international bank.
Director of the Company since January 17, 1995.
ALBERT FRIED, JR., Age 67; Managing Member of Albert Fried & Company, LLC,
a broker/dealer and member of the New York Stock Exchange, since 1955, and
Managing Member of Buttonwood Specialists, LLC, a New York Stock Exchange
specialist firm, since 1992. Mr. Fried is also Chairman of the Board of
Directors of Portec, Inc., a manufacturer of engineered products for the
construction equipment, material handling and railroad industries. Director of
the Company since December 15, 1994.
MALCOLM T. HOPKINS, Age 69; Private investor since 1984. Retired Vice
Chairman and Chief Financial Officer of the former St. Regis Corporation, a
forest products, oil, gas and insurance company. Mr. Hopkins is also a director
of The Columbia Gas System, Inc., MAPCO Inc., Metropolitan Series Fund Inc.,
Phar-Mor, Inc., U.S. Home Corporation, and various mutual funds of State Street
Research and Management Company. Director of the Company since December 15,
1994.
KEVIN C. TONER, Age 33; President of the Isdell 86 Foundation, a
not-for-profit organization, since December 1994 and private investor since
March 1995. Managing Director from December 1991 to February 1995 of UBS
Securities Inc., a broker/dealer and member of the New York Stock Exchange,
engaged in corporate finance, underwriting and distribution of high grade U.S.
corporate issues and Eurobonds. From March 1991 to December 1991, Mr. Toner was
a Vice President of UBS Securities, Inc. Director of the Company since December
15, 1994.
COMMITTEES OF THE BOARD
The Company has standing Audit, Compensation and Personnel, and Corporate
Governance Committees of the Board of Directors.
The Audit Committee, comprised of Messrs. Brown, Cunningham and Hopkins,
serves as the focal point for communication between the Board of Directors and
the Company's independent public accountants, chief internal auditor and
management, to the extent that their duties relate to financial or accounting
reporting and controls. The Audit Committee is responsible for engaging and
discharging the independent public accountants for the Company, reviewing their
fees, reviewing the scope and audit procedures of the independent public
accountants, reviewing annual financial statements, reviewing quarterly and
annual financial results prior to their release, and meeting with the Company's
internal auditors and independent public accountants on matters relating to,
among other things, the adequacy of the Company's internal audit controls and
accounting and auditing personnel. During 1996, the Audit Committee held three
meetings.
3
<PAGE>
The Compensation and Personnel Committee, comprised of Messrs. Cunningham,
Fried and Hopkins, reviews and advises the Board with respect to the
qualifications of individuals identified as candidates for positions as the
Company's Chief Executive Officer, Chief Operating Officer, Chief Financial
Officer and General Counsel and for the position of Chief Executive Officer of
each subsidiary of the Company whose proposed annual compensation is $200,000 or
more. It also reviews and recommends to the Board for its approval any
employment, severance or similar contracts, or modifications thereof, for the
Chairman of the Board and Chief Executive Officer of the Company and is charged
with fixing on an annual basis his compensation, subject to the approval of the
Board. The Compensation and Personnel Committee also is responsible for fixing,
based on proposals made by the Chief Executive Officer, compensation for the
Chief Operating Officer, Chief Financial Officer and General Counsel of the
Company as well as the compensation of other officers and employees of the
Company and each subsidiary whose annual compensation is $200,000 or more and
for approving any employment, severance or similar contracts for such officers
and employees, or modifications thereof. The Compensation and Personnel
Committee also recommends to the Board for its approval any incentive, benefit,
award or bonus plans and programs for employees, administers the 1994 Management
Stock Option Plan and reviews executive development plans. During 1996, the
Compensation and Personnel Committee held three meetings.
The Corporate Governance Committee, comprised of Messrs. Bershad, Brown,
Fried and Toner, is responsible to the Board for the review and recommendation
of director candidates; recommendations regarding directors' retirement age and
removal; review of all committees of the Board and recommendations regarding
their number, function and membership; recommendations with respect to
compensation of and other benefits for non-employee directors; and review of and
recommendation with respect to directors' and officers' liability insurance and
indemnification agreements between the Company and its officers and directors.
The Corporate Governance Committee will consider nominees recommended by
stockholders. The Corporate Governance Committee has not adopted formal
procedures for the submission of such recommendations. Such recommendations
should be sent to the Secretary, EMCOR Group, Inc., 101 Merritt Seven Corporate
Park, Norwalk, Connecticut 06851. The Company's by-laws specify certain time
limitations, notice requirements and other procedures applicable to the
submission of nominations to be brought before an Annual or Special Meeting of
Stockholders of the Company. During 1996, the Corporate Governance Committee
held two meetings.
MEETINGS OF THE BOARD
There were five meetings of the Board of Directors during 1996.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth as of April 23, 1997 certain information
regarding the beneficial ownership of Common Stock by each of the Company's
directors, its chief executive officer, each of the four most highly compensated
executive officers of the Company for its fiscal year ended December 31, 1996,
and all its directors and executive officers as a group. Except as otherwise
noted, to the Company's knowledge, each of the persons listed below has sole
voting power and investment power with respect to the shares listed next to his
name.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) PERCENT
- ---------------------------------------------------------------- ----------------------- -------
<S> <C> <C>
Frank T. MacInnis............................................... 136,333(2) *
Stephen W. Bershad.............................................. 23,500(3) *
David A.B. Brown................................................ 7,000(3) *
Thomas D. Cunningham............................................ 13,500(3) *
Albert Fried, Jr................................................ 127,377(3)(4) 1.4%
Malcolm T. Hopkins.............................................. 23,500(3) *
Kevin C. Toner.................................................. 8,000(3) *
Sheldon I. Cammaker............................................. 33,333(2) *
Leicle E. Chesser............................................... 33,333(2) *
Jeffrey M. Levy................................................. 34,333(2) *
R. Kevin Matz................................................... 2,000(2) *
All directors and executive officers as a group................. 448,875(5) 4.6%
</TABLE>
(Footnotes on next page)
4
<PAGE>
(Footnotes from previous page)
- ------------------
* Represents less than 1%.
(1) The information contained in the table reflects 'beneficial ownership' as
defined in Rule 13d-3 of the Securities Exchange Act of 1934. All
percentages set forth in this table have been rounded.
(2) Includes in the case of Mr. MacInnis 133,333 shares of Common Stock, in the
case of each of Messrs. Cammaker, Chesser and Levy, 33,333 shares of Common
Stock, and in the case of Mr. Matz, 2,000 shares of Common Stock, that may
be acquired upon the exercise of presently exercisable options or options
exercisable within 60 days granted pursuant to the Company's 1994 Management
Stock Option Plan.
(3) Includes in the case of Mr. Bershad 13,500 shares, in the case of Mr. Brown,
6,000 shares, in the case of Mr. Cunningham, 13,500 shares, in the case of
Mr. Fried, 3,000 shares, in the case of Mr. Hopkins 13,500 shares, and in
the case of Mr. Toner 3,000 shares, that may be acquired upon the exercise
of presently exercisable options granted to each non-employee Director
pursuant to the Company's 1995 Non-Employee Directors' Non-Qualified Stock
Option Plan.
(4) Amount includes beneficial ownership of 124,377 shares of Common Stock by
Albert Fried & Company, LLC ('AF&C'), of which Mr. Fried is the Managing
Member. AF&C was a holder of prepetition unsecured claims against the
Company in its Chapter 11 proceeding concluded in December 1994. There is a
reserve of 140,618 shares of Common Stock for disputed claims against the
Company to be issued to the holders of prepetition unsecured allowed claims,
including AF&C. To the extent such disputed claims are disallowed, the
number of shares beneficially owned by AF&C will increase in a presently
undeterminable amount.
(5) Includes 294,498 shares of Common Stock that may be acquired upon the
exercise of presently exercisable options or options exercisable within 60
days granted pursuant to the Company's 1994 Management Stock Option Plan and
1995 Non-Employee Directors' Non-Qualified Stock Option Plan.
5
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following Summary Compensation Table sets forth the compensation
awarded to, earned by or paid to each of the Chief Executive Officer and the
other four most highly compensated executive officers of the Company
(collectively, the 'named executive officers') during the fiscal years ended
December 31, 1996, 1995 and 1994 for services rendered in all capacities to the
Company and its subsidiaries. For information regarding employment agreements of
the named executive officers, see 'Employment Contracts and Termination of
Employment and Change of Control Arrangements' below.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL LONG TERM
COMPENSATION COMPENSATION AWARDS(5)
------------------- ----------------------------
NUMBER OF
RESTRICTED SECURITIES
OTHER ANNUAL STOCK UNDERLYING ALL OTHER
SALARY BONUS COMPENSATION(4) AWARD OPTIONS/SARS(6) COMPENSATION(7)
NAME AND PRINICPAL POSITION YEAR ($) ($) ($) ($) (#) ($)
- ------------------------------------- ---- -------- -------- --------------- ---------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Frank T. MacInnis(1)(2) ............. 1996 614,400 625,000 10,563 None None 6,300
Chairman of the Board, President 1995 614,400 480,000 17,732 None 200,000 6,300
and Chief Executive Officer 1994 426,923 500,000(3) 5,056 None None 6,300
Sheldon I. Cammaker ................. 1996 406,000 150,000 None None None 6,300
Executive Vice President and 1995 383,000 100,000 None None 50,000 6,300
General Counsel 1994 361,322 50,000 None None None 176,700(8)
Leicle E. Chesser(1) ................ 1996 309,000 300,000 4,885 None None 6,300
Executive Vice President and 1995 300,000 225,000 14,578 None 50,000 6,300
Chief Financial Officer 1994 168,269 150,000 None None None None
Jeffrey M. Levy(2) .................. 1996 309,000 300,000 6,627 None None 6,300
Executive Vice President and 1995 300,000 225,000 9,631 None 50,000 6,300
Chief Operating Officer 1994 247,500 175,000 None None None 6,300
R. Kevin Matz(1) .................... 1996 135,000 90,000 None None None 6,300
Vice President and Treasurer 1995 -- -- -- -- -- --
1994 -- -- -- -- -- --
</TABLE>
- ------------------
(1) As Mr. MacInnis joined the Company on April 18, 1994 and Mr. Chesser joined
the Company on May 2, 1994, amounts shown for each of them for 1994 reflect
less than a full year of compensation. Mr. Matz became a Vice President and
Treasurer in April 1996, accordingly no compensation information is reported
for him in respect of 1994 and 1995, and the compensation information for
Mr. Matz in respect of 1996 includes all compensation paid to him in 1996 by
the Company.
(2) Mr. Levy was elected President of the Company on April 4, 1997. Mr. MacInnis
continues to serve as Chairman of the Board and Chief Executive Officer.
(3) Amount includes a signing bonus of $250,000 paid to Mr. MacInnis upon his
joining the Company on April 18, 1994.
(4) The personal benefits provided to the named executive officers did not
exceed the disclosure threshold established by the SEC pursuant to
applicable rules. Figures represent amounts reimbursed for the payment of
taxes upon certain fringe benefits.
(5) The column specified by Item 402(b) of Regulation S-K to report Long-Term
Incentive Plan Payouts has been excluded because the Company has no
long-term incentive compensation plans and has not had any such plan during
any portion of fiscal years 1996, 1995 and 1994.
(6) The awards set forth in this column are of stock options only. The Company
did not award stock appreciation rights.
(Footnotes continued on next page)
6
<PAGE>
(Footnotes continued from previous page)
(7) The amounts reported in this column include matching contributions of $1,800
made by the Company under its 401(k) Plan during 1996 for the account of
each of the named executive officers. The amounts reported for 1996 also
include contributions of $4,500 to be paid during 1997 in respect of 1996 by
the Company for the account of each of the named executive officers pursuant
to the Company's Money Purchase Plan, a defined contribution pension plan.
(8) Amounts include a stay bonus of $170,400 paid to Mr. Cammaker pursuant to
the EMCOR Group, Inc. Employees' Severance Pay/Stay Bonus on September 30,
1994.
STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
During the last fiscal year no stock options or SARs were granted to any of
the named executive officers.
OPTIONS EXERCISES AND HOLDINGS
The following tables sets forth certain information concerning unexercised
options to purchase Common Stock of the Company held at the end of fiscal year
1996 by the named executive officers. None of the named executive officers
exercised any options during fiscal year 1996. No named executive officer has
any SARs.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FY-END OPTION VALUE
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY
SHARES VALUE OPTIONS AT OPTIONS AT
ACQUIRED ON REALIZED FY-END(#) FY-END($)(1)
NAME EXERCISE(#) ($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- --------------------------------------- ----------- -------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Frank T. MacInnis...................... None -- 66,667/133,333 $550,003/$1,099,297
Sheldon I. Cammaker.................... None -- 16,667/33,333 $ 131,169/$262,331
Leicle E. Chesser...................... None -- 16,667/33,333 $ 131,169/$262,331
Jeffrey M. Levy........................ None -- 16,667/33,333 $ 131,169/$262,331
R. Kevin Matz.......................... None -- 1,000/2,000 $ 7,870/$15,740
</TABLE>
- ------------------
(1) For purposes of this column, value is calculated based on the aggregate
amount of the excess of $13.00 (the closing price of the Common Stock of the
Company as reported on the Nasdaq Stock Market on December 31, 1996) over
the relevant exercise price for the shares of Common Stock with respect to
the options.
EMPLOYMENT CONTRACTS AND TERMINATION OF
EMPLOYMENT AND CHANGE OF CONTROL ARRANGEMENTS
EMPLOYMENT AGREEMENTS
The Company has entered into an Employment Agreement dated as of April 18,
1994 (the 'Agreement'), with Frank T. MacInnis providing for his employment as
Chief Executive Officer of the Company during the period April 18, 1994 through
December 31, 1997. The Agreement provides that the term of employment will
automatically be extended for successive one-year periods unless the Company or
Mr. MacInnis gives written notice not to extend at least six months prior to the
end of the term or any extended term of the Agreement. The Company is also to
use its best efforts to ensure his election as Chairman of the Board of
Directors of the Company.
Pursuant to the Agreement, in 1996 Mr. MacInnis received an annual base
salary of $614,400 which salary is to increase on the first day of each calendar
year during his employment by at least the percentage increase for the prior
year in a specified consumer price index. In addition, Mr. MacInnis is entitled
to receive an annual bonus, which is to be determined by a formula agreed upon
by Mr. MacInnis and the Compensation and Personnel Committee of the Board of
Directors of the Company. Pursuant to the terms of the Agreement, upon joining
the Company Mr. MacInnis was paid a one-time cash payment of $250,000 and was
entitled to an option
7
<PAGE>
(the 'Option') to purchase 200,000 shares of Common Stock. In accordance with
the Agreement, the Option was issued at an exercise price of $4.75 per share,
which price was equal to the market price for the Common Stock on April 5, 1995.
Under the terms of the Agreement, Mr. MacInnis has been provided with
certain benefits customarily accorded to the Company's senior executive officers
as well as supplemental benefits such that he will receive the benefits that
would have been received if he were fully vested in the Company's Money Purchase
Plan and 401(k) Plan. In addition, Mr. MacInnis is entitled to $600 per month
for leasing of an automobile (plus maintenance and insurance thereon);
reimbursement for all initiation fees and monthly dues for membership in a club
suitable for entertaining clients of the Company; all legal expenses incurred by
him in connection with the Agreement; and the cost of any increased tax
liability to him caused by the receipt of these fringe benefits.
If Mr. MacInnis' employment is terminated during the term of the Agreement
by the Company other than for Cause (as defined in the Agreement) or he
terminates his employment for Good Reason (as defined in the Agreement), Mr.
MacInnis will be entitled to receive a cash payment equal to the sum of: (i) the
greater of (A) his base salary at the highest annual rate in effect during his
employment from the date of termination through December 31, 1997 or (B) two
times his base salary at its then current annual rate and (ii) an amount equal
to the product of the highest bonus paid to him during his employment (but in no
event less than $150,000) times (A) the number of full or partial years
remaining from the date of termination through December 31, 1997 or (B) two,
whichever is greater; however, in the event of a termination for Good Reason
following a Change in Control (as defined in the Agreement), the factor of two
in clause (i)(B) and (ii)(B) above will be increased to three. In addition, Mr.
MacInnis will be entitled to receive all unpaid amounts in respect of any bonus
for any calendar year ending before the date of termination.
The Company has an employment contract with Sheldon I. Cammaker, expiring
January 31, 1999, pursuant to which Mr. Cammaker serves as a senior executive
officer of the Company. Mr. Cammaker received an annual base salary of $406,000
in 1996, which salary increases on the first day of each calendar year during
his employment by at least 6%. In addition, pursuant to the terms of his
employment contract, Mr. Cammaker is eligible to receive annual bonuses, has
been provided with certain benefits customarily accorded the Company's senior
executive officers and is provided with the use of a Company automobile. Mr.
Cammaker's employment contract provides that, in the event of a Change in
Control (as defined in the contract) of the Company and within two years
thereafter Mr. Cammaker is terminated or elects to terminate his employment, Mr.
Cammaker would be entitled to be paid an amount equal to the sum of (i)
$470,000, (ii) $320,000 multiplied by each full calendar year remaining under
his employment agreement, and (iii) $320,000 less, with respect to clause (iii),
the base salary already paid to him for the year of termination.
The Company has entered into employment agreements dated as of January 1,
1996 with Leicle E. Chesser providing for his employment as Executive Vice
President and Chief Financial Officer of the Company during the period January
1, 1996 to December 31, 1997, and with Jeffrey M. Levy providing for his
employment as Executive Vice President and Chief Operating Officer during the
period January 1, 1996 to December 31, 1997; on April 4, 1997 Mr. Levy was
elected President of the Company and continues to serve as Chief Operating
Officer. Each of those agreements provides that the term of employment will
automatically be extended for successive one-year periods unless the Company or
the executive gives written notice not to extend at least six months prior to
the end of the term or any extended term of the agreement. Pursuant to their
agreements, in 1996 Messrs. Chesser and Levy each received an annual base salary
of $309,000, which salary is to increase on the first day of each calendar year
during their respective employment by an amount determined by the Compensation
and Personnel Committee of the Board of Directors of the Company. In addition,
each is entitled to receive an annual bonus determined by the Compensation and
Personnel Committee.
Under the terms of the employment agreements, Messrs. Chesser and Levy each
has been provided with certain benefits customarily accorded to the Company's
senior executive officers. In addition, Mr. Chesser is entitled to $700 per
month, and Mr. Levy is entitled to $655 per month, for leasing of an automobile
(plus maintenance and insurance thereon) plus the cost of a lease capital
reduction payment; reimbursement for all initiation fees and monthly dues for
membership in a club suitable for entertaining clients of the Company; all legal
expenses incurred by him in connection with his respective agreement; and the
cost of any increased tax liability to him caused by the receipt of these fringe
benefits.
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If Mr. Chesser's or Mr. Levy's employment is terminated during the term of
his respective employment agreement by the Company other than for Cause (as
defined in the agreement) or he terminates his employment for Good Reason (as
defined in the agreement), he will be entitled to receive a cash payment equal
to the sum of: (i) the greater of (A) his base salary at the highest annual rate
in effect during his employment from the date of termination through December
31, 1997 or (B) one times his base salary at its then current annual rate and
(ii) an amount equal to the product of the highest bonus paid to him during his
employment times (A) the number of full or partial years remaining from the date
of termination through December 31, 1997 or (B) one, whichever is greater;
however, in the event of a termination for Good Reason following a Change in
Control (as defined in the agreement), the factor of one in clause (i)(B) and
(ii)(B) above will be increased to 1.5. In addition, each executive will be
entitled to receive all unpaid amounts in respect of any bonus for any calendar
year ending before the date of termination.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION
DECISIONS
During 1996, the Compensation and Personnel Committee of the Board of
Directors of the Company was responsible for matters concerning executive
compensation. Mr. MacInnis has served as Chairman of the Board and Chief
Executive Officer since April 18, 1994; he also served as President of the
Company from April 18, 1994 to April 4, 1997.
Messrs. Cunningham, Fried and Hopkins, all of whom are non-employee
directors, constitute the Compensation and Personnel Committee of the Company's
Board of Directors. Mr. Fried is Managing Member of Albert Fried & Company, LLC,
which agreed in December 1994 to loan to the Company and certain of its
subsidiaries up to $7.0 million as one of several lenders under revolving credit
agreements (the 'Credit Agreement') providing a working capital facility of up
to an aggregate of $45.0 million. The loans bore interest on the principal
amount thereof at the rate of 15% per annum. The Credit Agreement terminated,
and the loans outstanding thereunder were repaid, on June 19, 1996.
Mr. Fried is Chairman of the Board of Directors of Portec, Inc., and on
April 23, 1996, Mr. MacInnis was elected a director of Portec, Inc.
DIRECTOR COMPENSATION
Each director who is not an officer of the Company ('non-employee
director') receives an annual retainer of $30,000 and $1,000 for each meeting of
the Board he attends, other than telephonic meetings of the Board in which case
each non-employee director who participates receives $500. Each non-employee
director also receives $500 for each meeting of a committee of the Board of
Directors attended by the director, and each non-employee director who chairs a
committee of the Board receives an additional $2,000 per annum. In addition,
pursuant to the 1995 Non-Employee Directors' Non-Qualified Stock Option Plan,
each non-employee director on June 17, 1996 was granted an option on that date,
to purchase 3,000 shares of Common Stock at an exercise price of $17.125 per
share. Each person who is hereafter elected or re-elected to serve as a
non-employee director (including current non-employee directors) will be granted
an option, promptly following his election, to purchase 3,000 shares of Common
Stock at an exercise price equal to the fair market value of the shares on the
date on which the option is granted. Non-employee directors' options are fully
exercisable as of the date of grant. Directors who also serve as officers of the
Company do not receive compensation for services rendered as directors.
COMPENSATION COMMITTEE REPORT
The Compensation and Personnel Committee of the Board of Directors (the
'Compensation Committee') reviews and determines, based on proposals made by the
Chief Executive Officer, the compensation of the Company's Chief Operating
Officer, Chief Financial Officer and General Counsel as well as the compensation
of other officers and employees of the Company and each subsidiary whose annual
compensation is $200,000 or more. It also reviews and approves any employment,
severance or similar agreements for those individuals. The Compensation
Committee is charged with fixing on an annual basis, the compensation of the
Chairman of the Board and the Chief Executive Officer, subject to the approval
of the Board, and reviewing and recommending to the Board
9
<PAGE>
any employment, severance or similar agreement for him. The Compensation
Committee also administers the Company's 1994 Management Stock Option Plan and
is charged with recommending to the Board for its approval any incentive,
benefit, award or bonus plans or programs. The entire Board determines the
amount, if any, of the Company's contributions pursuant to its 401(k) Plan.
While other compensation decisions generally are not submitted to the Board, the
Board has the ultimate power and authority with respect to compensation matters.
The members of the Compensation Committee reviewed salaries paid to the
named executive officers for 1996 and approved salary increases for 1997 to the
named executive officers of the Company as well as bonuses payable in 1997 to
them in respect of 1996.
The Compensation Committee seeks to compensate executive officers at levels
competitive with other companies comparable in size in the same industry and to
provide short-term rewards and long-term incentives for superior individual and
corporate performance. In making compensation decisions, the Compensation
Committee periodically reviews information about the compensation paid or
payable to officers of comparably sized public companies (there being no public
companies of comparable size to the Company that are in businesses similar to
those of the Company), the compensation recommendations of Mr. MacInnis, the
Chairman of the Board and Chief Executive Officer of the Company, and reports
from outside consultants. The Compensation Committee does not have target
amounts of stock ownership for its executive officers.
The key components of executive officer compensation are base salary,
bonuses and stock options. The Compensation Committee attempts to combine these
components in such a way as to attract, motivate and retain key executives
critical to the long-term success of the Company. A discussion of the various
components of the executives' compensation for 1996 follows.
Base Salary. Each executive officer received a base salary and has the
potential for annual salary increases largely determined by reference to the
salaries of executive officers holding comparable positions in companies of
comparable size.
Bonuses. Each executive officer was eligible for an annual bonus based
upon both his individual performance and the Company's performance. Bonuses were
awarded to executive officers in respect of 1996 which took into account their
performance and contractual obligations.
Stock Options. The Company's 1994 Management Stock Option Plan is intended
to provide executives with the promise of longer term rewards which appreciate
in value with the favorable future performance of the Company.
Other Compensation. The executive officers also participate in the Money
Purchase Plan and the 401(k) Plan as well as the medical, life and disability
insurance plans available to all employees of the Company.
CHIEF EXECUTIVE OFFICER COMPENSATION
The minimum compensation of Mr. MacInnis, Chairman of the Board and Chief
Executive Officer of the Company, is provided for in his employment agreement
described above. Proposals for additional compensation to him are based on the
policies described above. As part of its evaluation, the Compensation Committee
considered a report by Mr. MacInnis on his activities, the Company's
performance, the accomplishment of goals for the Company set by the Board of
Directors at the beginning of 1996, and the compensation earned by other chief
executive officers of companies of comparable size during the previous year.
SECTION 162(M)
Section 162(m) of the Internal Revenue Code provides that the deduction by
a publicly-held corporation for compensation paid in a taxable year to the Chief
Executive Officer and any of the other four most highly compensated executive
officers whose compensation is required to be reported in the Summary
Compensation Table is limited to $1 million per officer, subject to certain
exceptions. The Compensation Committee has taken, and intends to continue to
take, such actions as are necessary to reduce, if not eliminate, the Company's
non-deductible compensation expense, while maintaining, to the extent possible,
the flexibility which the Compensation Committee believes to be an important
element of the Company's executive compensation program.
By the Compensation and Personnel Committee: Malcolm T. Hopkins,
Chairperson, Thomas D. Cunningham and Albert Fried, Jr.
10
<PAGE>
PERFORMANCE GRAPH
Proxy disclosure rules promulgated by the Securities and Exchange
Commission require inclusion of a graph presentation comparing cumulative
five-year stockholder returns on an indexed basis with the S&P 500 Index and
either a nationally recognized industry standard or an index of peer companies
selected by the Company. Since the common stock of the Company outstanding prior
to its reorganization was extinguished pursuant to its Plan of Reorganization
and the Common Stock of the Company as reorganized has been traded only since
the effective date of its Plan of Reorganization, such five-year presentation is
not possible. Under such circumstances, the Company is required instead to
present such information for the period since such shares were issued. The
following performance graph compares the Company's total stockholder return on
its Common Stock as compared to the S&P 500 Index and a peer group index
consisting of The Turner Corporation and Perini Corporation since January 6,
1995. Prior to that date, prices for the Company's Common Stock were not readily
available. The following performance graph assumes $100 was invested on January
6, 1995 in Common Stock of the Company and in each of the indices and assumes
reinvestment of all dividends.
None of the Company's peers in its mechanical and electrical contracting
and its facilities services business is publicly traded. Accordingly, the
Company selected two general contractors that serve similar marketplaces and are
impacted by similar market conditions to the Company.
COMPARATIVE TWENTY-SEVEN MONTH TOTAL RETURNS
[PERFORMANCE GRAPH]
Emcor S&P 500 Peer Group
----- ------- ----------
Jan 6, 1995 100 100 100
Mar 31, 1995 112.5 109.02 101.15
Jun 30, 1995 175 118.61 115.27
Sep 30, 1995 186.11 127.25 126.61
Dec 31, 1995 213.89 134.11 94.76
Mar 31, 1996 269.44 140.55 103.61
Jun 30, 1996 336.11 146.02 133.7
Sep 30, 1996 336.11 171.43 115.42
Dec 31, 1996 305.56 161.29 103.79
Mar 31, 1997 327.78 164.85 110.06
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Albert Fried, Jr. and Kevin C. Toner are directors of the Company and both
had a material interest in revolving credit agreements, dated December 14, 1994,
which provided the Company and certain of its subsidiaries with working capital
facilities of up to an aggregate of $45.0 million which revolving credit
agreements terminated June 19, 1996. Albert Fried, Jr. is Managing Member of
Albert Fried & Company, LLC, which had agreed to loan up to $7.0 million as one
of the lenders under the revolving credit agreements. Kevin C. Toner had agreed
to loan up to $1.0 million as one of the lenders under the revolving credit
agreements. In addition, UBS Mortgage Finance Inc., an affiliate of UBS
Securities Inc., Mr. Toner's former employer, had agreed to loan up to $2.0
million as one of the lenders under the revolving credit agreements. All the
loans bore interest on the principal amount thereof at the rate of 15% per
annum.
11
<PAGE>
RATIFICATION OF APPOINTMENT OF ARTHUR ANDERSEN LLP
AS INDEPENDENT PUBLIC ACCOUNTANTS
The Audit Committee of the Board of Directors has appointed Arthur Andersen
LLP, certified public accountants, as independent public accountants to audit
the accounts of the Company and its subsidiaries for 1997. Arthur Andersen LLP
acted as the Company's independent public accountants for 1996 and 1995 pursuant
to appointment by the Audit Committee. Arthur Andersen LLP was first appointed
the Company's independent public accountants for 1995 by the Audit Committee on
September 19, 1995 succeeding Deloitte & Touche LLP which acted as the Company's
independent public accountants for 1994.
Representatives of Arthur Andersen LLP will be present at the annual
meeting to respond to appropriate questions, and will have an opportunity to
make a statement if they desire to do so.
The report of the Company's independent public accountants on the Company's
financial statements for its two most recent fiscal years ended December 31,
1996 did not contain an adverse opinion, disclaimer of opinion or qualification
as to uncertainty, audit scope, or accounting principles.
During the Company's two most recent fiscal years ended December 31, 1996,
there were no disagreements with Arthur Andersen LLP on any matters of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedures, which disagreements, if not resolved to the satisfaction of
Arthur Andersen LLP, would have caused that firm to make reference to the
subject matter of such disagreements in connection with its reports.
During the Company's two most recent fiscal years ended December 31, 1996,
there were no reportable events of the type described in paragraphs (A) through
(D) of Item 304(a)(1)(v) of Regulation S-K under the Securities Act of 1933, as
amended, and the Securities Exchange Act of 1934, as amended.
The affirmative vote of a majority of the shares of Common Stock present in
person or represented by proxy at the meeting and entitled to vote thereon is
required for approval of the appointment of independent public accountants.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR
RATIFICATION OF THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS INDEPENDENT PUBLIC
ACCOUNTANTS FOR 1997.
STOCKHOLDERS' PROPOSALS
Stockholders' proposals must be received by the Company at its headquarters
in Norwalk, Connecticut on or before February 20, 1998 in order to be considered
for inclusion in next year's Proxy Statement.
OTHER INFORMATION
The cost of soliciting proxies will be borne by the Company. The Company
expects to solicit proxies primarily by mail. Proxies also may be solicited
personally and by telephone by certain officers and regular employees of the
Company. Morrow & Co., Inc. has been retained for solicitation of all brokers
and nominees for a fee of $3,000 plus customary out-of-pocket expenses. The
Company may reimburse brokers and other nominees for their expenses in
communicating with the persons for whom they hold Common Stock of the Company.
The Board of Directors is aware of no other matters that are to be
presented to the stockholders for formal action at the Annual Meeting. If,
however, any other matters properly come before the meeting or any adjournments
thereof, it is the intention of the persons named in the enclosed proxy to vote
in accordance with their judgment in such matters.
UPON THE WRITTEN REQUEST OF ANY STOCKHOLDER OF RECORD ON APRIL 23, 1997, A
COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED
DECEMBER 31, 1996 (EXCLUDING EXHIBITS) AS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION WILL BE SUPPLIED WITHOUT CHARGE. REQUESTS SHOULD BE DIRECTED TO
JOSEPH W. BARNETT, SECRETARY, EMCOR GROUP, INC., 101 MERRITT SEVEN CORPORATE
PARK, NORWALK, CONNECTICUT 06851.
BY ORDER OF THE BOARD OF DIRECTORS
JOSEPH W. BARNETT
Secretary
April 29, 1997
12
EMCOR GROUP, INC.
ANNUAL MEETING OF STOCKHOLDERS
JUNE 20, 1997
The undersigned hereby appoints Frank T. MacInnis, Sheldon I. Cammaker and
Leicle E. Chesser, and each of them, with full power to act without the other
and with full power of substitution, as proxies to represent and to vote, as
directed herein, all shares the undersigned is entitled to vote at the annual
meeting of the stockholders of EMCOR Group, Inc. to be held in the James Madison
Room, Princeton Club, New York, New York on Friday, June 20, 1997 at 10:00 a.m.,
and all adjournments thereof, as follows:
PLEASE MARK, DATE AND SIGN THIS PROXY ON THE REVERSE SIDE AND RETURN
IT PROMPTLY USING THE ENCLOSED POSTAGE PREPAID ENVELOPE.
Unless otherwise marked, the proxies are appointed with authority to
vote "FOR" all nominees for election and "FOR" the appointment of
independent public accountants.
(Continued and to be signed on the reverse side.)
EMCOR GROUP, INC.
P.O. BOX 11079
NEW YORK, N.Y. 10203-0079
The Board of Directors recommends a vote "FOR" all nominees in Item 1
and "FOR" Item 2.
1. Election of Directors
FOR all nominees listed below
WITHHOLD AUTHORITY to vote for all nominees listed below.
*EXCEPTIONS
Nominees: F. MacInnis, S. Bershad, D. Brown, T. Cunningham, A. Fried, M.
Hopkins, K. Toner
(INSTRUCTIONS: To withhold authority to vote for any individual nominee,
mark the "Exceptions" box and write that nominee's name in the space
provided below.)
*Exceptions ____________________________________________________________________
2. Appointment of Independent Public Accountants.
FOR
AGAINST
ABSTAIN
Change of Address and/or Comments Mark Here
[INDICIA]
In their discretion to vote upon other
matters that may properly come
before the meeting
Please sign exactly as your name
appears to the left.
When signing as attorney, executor,
administrator, trustee or guardian,
please give your full title. If
shares are held jointly, each holder
should sign.
Dated: ____________________________, 1997
_________________________________________
Signature
_________________________________________
Signature
Voters must be indicated (x)
in Black or Blue ink. X
Sign, Date and Return the Proxy Card Promptly Using the Enclosed Envelope.
