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As filed with the Securities and Exchange Commission on January 16, 1998
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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EMCOR GROUP, INC.
(Exact name of Registrant as specified in its charter)
Delaware 11-2125338
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
101 Merritt Seven Corporate Park
Norwalk, Connecticut 06851
(203) 849-7800
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
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Sheldon I. Cammaker, Esq.
General Counsel
EMCOR Group, Inc.
101 Merritt Seven Corporate Park
Norwalk, Connecticut 06851
(203) 849-7800
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Copies to:
Vincent Pagano, Jr., Esq.
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017-3954
(212) 455-2000
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Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this registration statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] ___________________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] ___________________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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Title of each class of Amount to be Proposed maximum Proposed maximum Amount of
securities to be registered registered offering price per unit aggregate offering price registration fee
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<S> <C> <C> <C> <C>
Debt Securities, Common Stock, Preferred
Stock, Warrants (1)..................... $150,000,000 (2) 100% (3) $150,000,000 (2)(3) $44,250
=================================================================================================================================
</TABLE>
(1) The Debt Securities registered hereby include such additional amount as
may be necessary so that, if Debt Securities are issued with an original
issue discount, the maximum aggregate initial offering prices of all Debt
Securities will not exceed $150,000,000. The Common Stock registered
hereby includes Preferred Stock Purchase Rights (the "Rights"). The Rights
are associated with and trade with the Common Stock. The value, if any,
attributable to the Rights is reflected in the market price of the Common
Stock. Also being registered hereunder are an indeterminate number of
shares of Common Stock as shall be issuable upon conversion or redemption
of Preferred Stock or Debt Securities registered hereby.
(2) In no event will the aggregate initial offering price of all securities
issued from time to time pursuant to this Registration Statement exceed
$150,000,000. Any securities registered hereunder may be sold separately
or as units with other securities registered hereunder.
(3) Estimated solely for the purpose of calculating the registration fee.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
Subject to Completion, dated January 16, 1998
PROSPECTUS
EMCOR GROUP, INC.
Preferred Stock
Common Stock
Warrants to Purchase Preferred Stock
Warrants to Purchase Common Stock
Debt Securities
Warrants to Purchase Debt Securities
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EMCOR Group, Inc. ("EMCOR" or the "Company") may offer and sell from time
to time, in one or more series, (i) its preferred stock, par value $.10 per
share (the "Preferred Stock"), (ii) its common stock, par value $.01 per share
(the "Common Stock"), (iii) unsecured debt securities consisting of notes,
debentures or other evidences of indebtedness (the "Debt Securities") which may
be senior ("Senior Debt Securities"), senior subordinated ("Senior Subordinated
Debt Securities") or subordinated ("Subordinated Debt Securities") and (iv)
warrants to purchase Preferred Stock, Common Stock or Debt Securities (the
"Warrants"), or any combination of the foregoing.
The Preferred Stock, Common Stock, Debt Securities and Warrants are
collectively referred to as the "Securities." The Securities may be offered at
an aggregate initial offering price not to exceed $150,000,000 at prices and on
terms to be determined at or prior to the time of sale.
Specific terms of the Securities in respect of which this Prospectus is
being delivered will be set forth in an accompanying Prospectus Supplement
("Prospectus Supplement"), together with the terms of the offering of the
Securities and the initial price and the net proceeds to the Company from the
sale thereof. The Prospectus Supplement will set forth with regard to the
particular Securities, without limitation, the following: (i) in the case of
Debt Securities, the specific designation, aggregate principal amount, ranking
as senior debt, senior subordinated debt or subordinated debt, maturity, rate or
rates (or method of determining the same) and time or times for the payment of
interest, if any, any terms for optional or mandatory redemption or repurchase
or sinking fund provisions, and any conversion or exchange rights, (ii) in the
case of Preferred Stock, the designation, number of shares, liquidation
preference per share, initial public offering price, dividend rate (or method of
calculation thereof), dates on which dividends shall be payable and dates from
which dividends shall accrue, any redemption or sinking fund provisions, and any
conversion or exchange rights, (iii) in the case of Common Stock, the number of
shares of Common Stock and the terms of the offering and sale thereof and (iv)
in the case of Warrants, the number and terms thereof, the designation and the
number of securities issuable upon their exercise, the exercise price, the terms
of the offering and sale thereof and, where applicable, the duration and
detachability thereof.
The Securities may be sold directly by EMCOR to investors, through agents
designated from time to time or to or through underwriters or dealers. See "Plan
of Distribution." If any agents of EMCOR or any underwriters are involved in the
sale of any Securities in respect of which this Prospectus is being delivered,
the names of such agents or underwriters and any applicable commissions or
discounts will be set forth in the Prospectus Supplement.
For a discussion of certain risk factors that should be considered by
prospective investors, see "Risk Factors" beginning on page 4.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
---------------------------
The date of this Prospectus is , 1998.
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AVAILABLE INFORMATION
As permitted by the rules and regulations of the Securities and Exchange
Commission (the "Commission"), this Prospectus does not contain all the
information set forth in the Registration Statement on Form S-3, as amended (the
"Registration Statement"), of which this Prospectus is a part. Statements
contained in this Prospectus as to the contents of any contract or other
document referred to herein are not necessarily complete, and in each instance
reference is made to the copy of such contract or other document filed as an
exhibit to the Registration Statement, or as previously filed with the
Commission and incorporated by reference, each such statement being qualified in
all respects by such reference. A copy of the Registration Statement may be
inspected by anyone without charge at the Commission's principal office at 450
Fifth Street, N.W., Washington, D.C. 20549, and copies of all or any part
thereof may be obtained from the Commission upon payment of certain fees
prescribed by the Commission.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities of the Commission at
Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and
at its regional offices located at 500 West Madison Street, 14th Floor, Chicago,
Illinois 60661 and 7 World Trade Center, Suite 1300, New York, New York 10048.
Copies of such material also can be obtained by mail from the Public Reference
Section of the Commission, at Room 1024, Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549, at the prescribed rates. The Commission also
maintains a website that contains reports, proxy and information statements and
other information. The website address is: http://www.sec.gov. The Company's
Common Stock is listed on The Nasdaq National Market, and such reports, proxy
statements and other information also can be inspected at the offices of Nasdaq
Operations, 1735 K Street, N.W., Washington, D.C. 20006.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated herein by reference:
(a) Annual Report on Form 10-K for the fiscal year ended December 31,
1996;
(b) Quarterly Reports on Form 10-Q for the quarterly periods ended March
31, June 30 and September 30, 1997;
(c) Current report on Form 8-K filed March 5, 1997;
(d) The description of the Common Stock contained in the Company's
Registration Statement on Form 10/A filed on August 11, 1995; and
(e) The description of the Preferred Stock contained in the Company's
Registration Statement on Form 8-A filed on March 5, 1997.
All reports and other documents filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering made by this Prospectus
shall be deemed to be incorporated by reference herein. Any statement contained
in a document incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus to
the extent that a statement contained herein or in any other subsequently filed
document which also is incorporated or deemed to be incorporated by reference
herein modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Company undertakes to provide without charge to each person to whom a
Prospectus is delivered, on the written or oral request of such person, a copy
of any or all of the information incorporated by reference in this Prospectus,
other than exhibits to such information (unless such exhibits are specifically
incorporated by reference into the information that this Prospectus
incorporates). Requests for such copies should be directed to the General
Counsel, EMCOR Group, Inc., 101 Merritt Seven Corporate Park, Norwalk,
Connecticut 06851 (telephone: (203) 849-7800).
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THE COMPANY
The Company is a multinational corporation engaged, through its
subsidiaries, in mechanical and electrical construction and facilities services.
EMCOR specializes in the design, integration, installation, start-up, testing,
operation and maintenance of (i) distribution systems for electrical power
(including power cables, conduits, distribution panels, transformers,
generators, uninterruptible power supply systems and related switch gear and
control); (ii) lighting systems, including fixtures and controls; (iii)
low-voltage systems, including fire alarm, security, communications and process
control systems; (iv) heating, ventilation, air conditioning, refrigeration and
clean-room process ventilation systems; and (v) plumbing, process and high
purity piping systems. The Company provides mechanical and electrical
construction services directly to end-users (including corporations,
municipalities and other governmental entities, owners/developers, and tenants
of buildings) and, indirectly, by acting as a subcontractor to construction
managers, general contractors and other subcontractors. Mechanical and
electrical construction services principally fall into three categories: large
installation projects, with contracts generally in the multi-million dollar
range; smaller system installation projects involving fit-out, renovation and
retrofit work; and facilities services. In addition, certain EMCOR subsidiaries
provide services required to maintain the physical environment and supporting
systems of customer facilities necessary to conduct their business. These
services are frequently referred to as facilities services and range from
operation and maintenance of mechanical and electrical systems installed by the
Company and others to operation and maintenance of building systems, cleaning
and housekeeping, reprographics, catering and security, as well as related
facility planning and consulting services. These facilities services are often
associated with outsourcing and privatization programs whereby customers in both
the private and public sectors seek to contract out their non-core activities,
i.e. those supporting but not directly involved in the customer's business that
the customer has previously performed itself. The facilities services are
provided on an individual basis and in combinations on a task-order or on-call
basis and under multi-year contracts. Mechanical and electrical construction and
facilities services are provided to a broad range of commercial, industrial and
institutional customers through offices located in major markets throughout the
U.S., Canada, the U.K., the Middle East and Hong Kong.
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RISK FACTORS
In addition to the other information set forth in or incorporated by
reference in this Prospectus and any Prospectus Supplement, the following
factors should be considered carefully in evaluating an investment in the
Securities.
This Prospectus includes certain statements that may be deemed to be
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933, as amended (the "Securities Act"), and Section 21E of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). All
statements, other than statements of historical facts, included in this
Prospectus that address activities, events or developments that the Company
expects, believes or anticipates will or may occur in the future, including such
matters as future capital expenditures, dividends and acquisitions, the use of
proceeds from any offering of Securities pursuant to this Prospectus, expansion
and other development trends of the Company's industry, business strategies,
expansion and growth of the Company's operations and other such matters, are
forward-looking statements. These statements are based on certain assumptions
and analyses made by the Company in light of its experience and its perception
of historical trends, current conditions, expected future developments and other
factors it believes are appropriate. Such statements are subject to a number of
assumptions, risks and uncertainties, including the risk factors discussed
below, general economic and business conditions, the business opportunities that
may be presented to and pursued by the Company, changes in laws or regulations
and other factors, many of which are beyond the control of the Company.
Prospective investors are cautioned that any such statements are not guarantees
of future performance and that actual results or developments may differ
materially from those anticipated in the forward-looking statements.
Competition
The business in which the Company engages is competitive. Most of the
Company's revenues are derived from jobs which are awarded on the basis of
various forms of competitive bids; however, an invitation to bid is often
conditioned upon prior experience, technical capability and financial strength.
The Company competes with national, regional and local companies. The Company
believes that, at present, it is the largest provider of mechanical and
electrical construction services in the U.S. and Canada and one of the largest
in the U.K. There can be no assurance, however, that the Company will compete
successfully with its existing competitors or with any new competitors. The
highly competitive nature of the mechanical and electrical construction business
forces the Company to charge competitive market rates for its services which
results in narrow operating margins. Any degradation in operating margins could
have a material impact on the financial condition of the Company.
Risks of Fixed Price Contracts; Bid and Performance Bonds
Approximately 75% of the Company's U.S. mechanical and electrical
construction contracts are fixed price contracts. The terms of these contracts
require the Company to guarantee the price of its services and assume the risk
that the costs associated with its performance will be greater than the Company
anticipated. The Company's profitability in this market is therefore dependent
on its ability accurately to predict the costs associated with its services.
These costs may be affected by a variety of factors, some of which may be beyond
the Company's control. If the Company is unable accurately to predict the costs
of fixed price contracts, certain projects could have lower margins than
anticipated, which could have a material adverse effect on the Company's results
of operations or financial condition.
Institutional and public works projects are frequently long-term, complex
projects requiring significant technical and management skills and financial
strength to, among other things, obtain bid and performance bonds, which are
often a condition to bidding for, and awarding of, contracts for such projects.
There can be no assurance that the Company will be able to obtain bid and
performance bonds in the future and the inability to procure such bonds could
have a material adverse effect on the Company's business, operating results and
financial condition.
Net Operating Loss Carryforwards
The Company and its subsidiaries have federal net operating loss ("NOL")
carryforwards of approximately $180 million which are available to reduce future
federal income taxes. It is possible that certain changes in the Company's
ownership, including prior ownership changes and future issuances of securities
of the Company, could result in the Company's having a change of ownership under
Section 382 of the Internal Revenue Code. Generally, Section 382 limits the
amount of NOL carryforwards that can be utilized in any year to offset taxable
income following a change in control of a corporation. Were
4
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such a change of control to occur, the Company would be limited in how much of
its NOLs it could utilize annually to an amount equal to the value of the
Company immediately prior to the changes multiplied by the long-term tax exempt
rate in effect for the month during which such change of control occurs. This
limitation could delay use of the NOLs and might preclude their full
utilization. The NOLs expire, if unused, between 2007 and 2010. In addition, the
NOL carryforwards are subject to adjustment upon review by the Internal Revenue
Service. See Note H of Notes to Consolidated Financial Statements included in
the Company's Annual Report on Form 10-K incorporated by reference herein.
Cyclicality and Seasonality
The provision of mechanical and electrical construction services is
cyclical and influenced by various economic factors including interest rates and
general fluctuations of the business cycle. Although the Company provides these
services to a broad range of commercial, industrial and institutional customers
around the world, cyclicality of the construction industry and instability of
general economic conditions could have an adverse effect on the Company's
revenues and profitability. The Company is seeking to expand its facilities
services business in North America which would be less susceptible to downswings
in the economy than the more cyclical construction market. In addition, the
mechanical and electrical construction business is subject to seasonal
variations. Specifically, the demand for construction services is lower during
winter months as a result of inclement weather conditions. Accordingly, the
Company's revenues and operating results are generally lower in the first and
second quarters.
Variability of Quarterly Operating Results
Variations in the Company's revenues and operating results occur from
quarter to quarter as a result of a number of factors, including installation
projects commenced and completed during a quarter, the number of business days
in a quarter and the size and scope of projects. Because a significant portion
of the Company's expenses are fixed, a variation in the number of projects or
the timing of the initiation, progress or completion of projects can cause
significant variations in operating results from quarter to quarter.
Expansion of Facilities Services Business
Part of the Company's strategy is to expand its facilities services
business. There can be no assurance that the Company will be able to identify
attractive opportunities in this market, or obtain additional significant
contracts for its services. If the North American market for facilities services
fails to develop or develops more slowly than the Company anticipates, the
Company's facilities services operations could become financially burdensome to
maintain, which could adversely affect the Company's business, financial
condition and results of operations.
The Company also intends to pursue the acquisition of additional
facilities services businesses as part of its growth strategy. However,
competition for acquisition candidates is increasing and, therefore, fewer
acquisition opportunities may be available. In addition, prices paid for
acquisitions are increasing in certain markets. There can be no assurance that
the Company will be able to identify and acquire additional facilities services
businesses at attractive prices, profitably manage additional businesses or
successfully integrate any acquired businesses into the Company without
substantial costs, delays, or other operational or financial problems.
Absence of Dividends
The Company does not anticipate paying cash dividends on its Common Stock
in the foreseeable future. The Company's working capital credit facility limits
the payment of dividends on its Common Stock.
Certain Litigation Proceedings
The Company is currently defending a lawsuit that was commenced against
the Dynalectric Company ("Dynalectric"), a subsidiary of the Company, in
Superior Court of New Jersey, Bergen County, arising out of Dynalectric's
participation in a joint venture with the plaintiff, Computran. Dynalectric
believes that Computran's claims are without merit and intends to defend this
matter vigorously. Dynalectric has filed counterclaims against Computran. The
Superior Court of New Jersey has recently ordered that the matters in dispute be
resolved by binding arbitration in accordance with an original agreement between
the parties. The Company does not know whether the plaintiff will appeal the
Court's decision.
5
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In February 1995, as part of an investigation by the New York County
District Attorney's office into the business affairs of Herbert Construction
Company ("Herbert"), a general contractor that does business with the Company's
subsidiary, Forest Electric Corporation ("Forest"), a search warrant was
executed at Forest's executive offices. At that time, the Company was informed
that Forest and certain of its officers are targets of the continuing
investigation. Forest performs electrical contracting services primarily in the
New York City commercial market and is one of the Company's largest
subsidiaries. Neither the Company nor Forest has been advised of the precise
nature of any suspected violation of law by Forest or its officers. On April 7,
1997, Ted Kohl, a principal of Herbert, pled guilty to one count of money
laundering, one count of offering a false instrument for filing and one count of
filing a false New York State Resident Income Tax Return. DPL Interiors, Inc., a
Company allegedly owned by Mr. Kohl, also pled guilty to one count of failing to
file New York City General Income Tax Returns. Mr. Kohl and DPL Interiors, Inc.
have not yet been sentenced.
Substantial settlements or damage judgments against a subsidiary of the
Company arising out of either of these matters could have a material adverse
effect on the Company's business, operating results and financial condition.
Certain Antitakeover Effects
The Company's Amended and Restated Certificate of Incorporation, Amended
and Restated By-Laws and the Delaware General Corporation Law include provisions
that may be deemed to have antitakeover effects and may delay, defer or prevent
a takeover attempt that stockholders might consider to be in their best
interests. The Company's Restated Certificate of Incorporation provides that
stockholders may not act by written consent. The Company's Amended and Restated
By-Laws provide that annual and special stockholders meetings may be called only
by an officer of the Company instructed by the Board of Directors to call such
meetings. In addition, the Company's Board of Directors is authorized to issue
"blank-check" preferred stock which could render more difficult or discourage an
attempt to obtain control of the Company by means of a tender offer, merger,
proxy contest or otherwise and could have an adverse effect on the market price
of the Common Stock. The Company has no present plan to issue any shares of
Preferred Stock. In addition, the Company has adopted a stockholder rights plan
which is designed to discourage hostile takeover offers for the Company by
threatening significant dilution of the bidder's interest in the Company upon
the occurrence of certain triggering events. See "Description of Capital Stock."
Dependence on Senior Management
The Company's business is managed, and its business strategies formulated,
by a relatively small number of key executive officers and other personnel. The
loss of these key management persons could have a material adverse effect on the
Company.
Year 2000 Issue; Computer System Upgrade
The Company is exploring whether and to what extent its computer operating
systems will be disrupted upon the turn of the century as a result of the
widely-known dating system flaw inherent in most operating systems (the "Year
2000 Issue"). While the Company believes that new MIS software being installed
both alongside and as part of upgrades to its existing computer systems will
address the Year 2000 Issue, there can be no assurance that the new MIS software
will be installed in sufficient time to remedy the Year 2000 Issue, that the
Company's computer operating systems will not be disrupted upon the turn of the
century or that any such disruption, whether caused by the Company's systems or
those of any of its suppliers or customers, will not have a material adverse
effect on the Company's financial condition or results of operations. In
addition, there can be no assurance that the Company will not experience
significant cost overruns or delays in connection with the upgrade of its
existing computer system.
Price Volatility of Common Stock
The trading price of the Common Stock could be subject to wide
fluctuations in response to quarter-to-quarter variations in operating results,
changes in earnings estimates by analysts, announcements of acquisitions or new
strategies by the Company or its competitors, general conditions in the economy
or in the markets in which the Company operates or other developments affecting
the Company, its clients or its competitors, some of which may be unrelated to
the Company's performance. These conditions could materially adversely affect
the market price of the Common Stock.
6
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USE OF PROCEEDS
Unless otherwise provided in the applicable Prospectus Supplement, the net
proceeds from the sale of the particular Securities offered by this Prospectus
and each Prospectus Supplement (the "Offered Securities") will be used to repay
certain indebtedness, for general corporate purposes and for possible
acquisitions.
RATIOS OF EARNINGS TO FIXED CHARGES AND
EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED DIVIDENDS
For purposes of computing the ratios of earnings to fixed charges and
earnings to combined fixed charges and preferred dividends, earnings consist of
earnings (loss) from continuing operations before income taxes, minority
interest, extraordinary items and cumulative effect of accounting changes, plus
fixed charges (interest charges and preferred share dividend requirements of
subsidiaries, adjusted to a pretax basis), less interest capitalized, less
preferred share dividend requirements of subsidiaries adjusted to a pretax basis
and less undistributed earnings of affiliates whose debt is not guaranteed by
the Company.
The following table sets forth the ratios of earnings to fixed charges and
earnings to combined fixed charges and preferred dividends for the Company for
the periods indicated:
<TABLE>
<CAPTION>
Nine Months
Ended
September 30, Years Ended December 31,
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1997 1996 1996 1995 | 1994(a) 1993 1992
---------------- --------------- ----------- ----------- | ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed |
charges..................... 1.63x 1.84x 1.89x (b) | (c) (d) (e)
|
Ratio of earnings to combined |
fixed charges and preferred |
dividends.................... 1.63x 1.84x 1.89x (b) | (c) (d) (e)
</TABLE>
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(a) As of December 31, 1994, in accordance with the American Institute of
Certified Public Accountants Statement of Position 90-7, "Financial
Reporting by Entities in Reorganization under the Bankruptcy Code"
("SOP 90-7"), the Company adopted Fresh-Start Accounting. As a result
of the implementation of Fresh-Start Accounting, the consolidated
financial statements of the Company for periods subsequent to
consummation of the Company's reorganization pursuant to its Third
Amended Joint Plan of Reorganization (the "Plan of Reorganization"),
which became effective in December 1994, are not comparable to the
Company's consolidated financial statements for prior periods.
Accordingly, a black line has been used to separate the Computation of
Earnings to Fixed Charges of the Company after the consummation of the
Plan of Reorganization from those of the Company prior to the
consummation of the Plan of Reorganization.
(b) No ratio is presented for 1995 as the earnings for that year were $9.5
million less than the fixed charges.
(c) No ratio is presented for 1994 as the earnings for that year were
$119.1 million less than the fixed charges.
(d) No ratio is presented for 1993 as the earnings for that year were
$114.7 million less than the fixed charges.
(e) No ratio is presented for 1992 as the earnings for that year were
$355.9 million less than the fixed charges.
7
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DESCRIPTION OF DEBT SECURITIES
The Debt Securities will be unsecured senior, senior subordinated or
subordinated debt of EMCOR and will be issued, in the case of Senior Debt
Securities, under a Senior Indenture (the "Senior Debt Indenture") between EMCOR
and , as Trustee, in the case of Senior Subordinated Debt Securities,
under a Senior Subordinated Indenture (the "Senior Subordinated Debt Indenture")
between EMCOR and , as Trustee, and in the case of Subordinated Debt
Securities, under a Subordinated Indenture (the "Subordinated Debt Indenture")
between EMCOR and , as Trustee. The Senior Debt Indenture, the Senior
Subordinated Debt Indenture and the Subordinated Debt Indenture are sometimes
hereinafter referred to individually as an "Indenture" and collectively as the
"Indentures." None of the Indentures limits the amount of Debt Securities that
may be issued thereunder, and the Indentures provide that the Debt Securities
may be issued from time to time in one or more series. The Indentures permit the
appointment of a different trustee for each series of Debt Securities. As used
herein, the term "Trustee" means , or , as the case may be. If there
is at any time more than one trustee under any Indenture, the term "Trustee" as
used in this Prospectus will mean each such trustee and will apply to each such
trustee only with respect to those series of Debt Securities with respect to
which it is serving as trustee. The Indentures are filed as exhibits to the
Registration Statement of which this Prospectus is a part. The following
summaries of certain provisions of the Indentures and the Debt Securities do not
purport to be complete and, while EMCOR believes the descriptions of the
material provisions of the Indentures and Debt Securities contained in this
Prospectus are accurate summaries of such material provisions, such summaries
are subject to the detailed provisions of the applicable Indenture to which
reference is hereby made for a full description of such provisions, including
the definition of certain terms used herein. Section references in parentheses
below are to sections in each Indenture unless otherwise indicated. Wherever
particular sections or defined terms of the applicable Indenture are referred
to, such sections or defined terms are incorporated herein by reference as part
of the statement made, and the statement is qualified in its entirety by such
reference. The Indentures are substantially identical, except for provisions
relating to subordination.
Provisions Applicable to Senior, Senior Subordinated and Subordinated
Debt Securities
General. Debt Securities will be unsecured senior, senior subordinated or
subordinated obligations of EMCOR. Except to the extent set forth in the
applicable Prospectus Supplement, none of the Indentures limits the payment of
dividends by or the acquisition of stock of EMCOR. Except to the extent set
forth in any Prospectus Supplement, the Indentures do not, and the Debt
Securities will not, contain any covenants or other provisions that are intended
to afford holders of the Debt Securities special protection in the event of
either a change of control of EMCOR or a highly leveraged transaction by EMCOR.
Reference is made to the Prospectus Supplement for the following terms of
and information relating to the Debt Securities being offered (the "Offered Debt
Securities") (to the extent such terms are applicable to such Offered Debt
Securities): (i) the title of the Offered Debt Securities; (ii) classification
as Senior Debt Securities, Senior Subordinated Debt Securities or Subordinated
Debt Securities, aggregate principal amount, purchase price and denomination;
(iii) the date or dates on which the Offered Debt Securities will mature; (iv)
the method by which amounts payable in respect of principal, premium, if any, or
interest, if any, on or upon the redemption of such Offered Debt Securities may
be calculated; (v) the interest rate or rates (or the method by which such will
be determined), and the date or dates from which such interest, if any, will
accrue; (vi) the date or dates on which such interest, if any, will be payable;
(vii) the place or places where and the manner in which the principal of,
premium, if any, and interest, if any, on the Offered Debt Securities will be
payable and the place or places where the Offered Debt Securities may be
presented for transfer; (viii) the right, if any, or obligation, if any, of the
Company to redeem, repay or purchase the Offered Debt Securities pursuant to any
sinking fund or analogous provisions or at the option of a holder thereof, and
the period or periods within which, the price or prices (or the method by which
such price or prices will be determined, or both) at which, the form or method
of payment therefor if other than in cash and the terms and conditions upon
which the Offered Debt Securities will be redeemed, repaid or purchased pursuant
to any such obligation; (ix) the terms for conversion or exchange, if any, of
the Offered Debt Securities; (x) any provision relating to the issuance of the
Offered Debt Securities at an original issue discount; (xi) if the amounts of
payments of principal of, premium, if any, and interest, if any, on the Offered
Debt Securities are to be determined with reference to an index, the manner in
which such amounts shall be determined; (xii) any applicable United States
federal income tax consequences; (xiii) the currency or currencies for which the
Offered Debt Securities may be purchased and the currency or currencies in which
principal, premium, if any, and interest, if any, may be payable; (xiv) if a
trustee other than with respect to any series of Senior Debt Securities,
with respect to any series of Subordinated Debt Securities or with
respect to any series of
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Senior Subordinated Debt Securities is named for such series of Offered Debt
Securities, the name of such Trustee; and (xv) any other specific terms of the
Offered Debt Securities, including any deleted, modified or additional events of
default or remedies or additional covenants provided with respect to such
Offered Debt Securities, and any terms that may be required by or advisable
under applicable laws or regulations.
Unless otherwise specified in any Prospectus Supplement, the Debt
Securities will be issuable in registered form and in denominations of $1,000
and any integral multiple thereof (Section 2.7). No service charge will be made
for any transfer or exchange of any Debt Securities but the Company may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith (Section 2.8).
Debt Securities may bear interest at a fixed rate or a floating rate. Debt
Securities bearing no interest or interest at a rate that at the time of
issuance is below the prevailing market rate may be sold at a discount below
their stated principal amount. Special United States federal income tax
considerations applicable to any such discounted Debt Securities or to certain
Debt Securities issued at par that are treated as having been issued at a
discount for United States federal income tax purposes will be described in the
applicable Prospectus Supplement.
In determining whether the holders of the requisite aggregate principal
amount of outstanding Debt Securities of any series have given any request,
demand, authorization, direction, notice, consent or waiver under the
Indentures, the principal amount of any series of Debt Securities originally
issued at a discount from their stated principal amount that will be deemed to
be outstanding for such purposes will be the amount of the principal thereof
that would be due and payable as of the date of such determination upon a
declaration of acceleration of the maturity thereof.
Global Securities. The Debt Securities of a series may be issued in whole
or in part in the form of one or more global securities ("Global Securities")
that will be deposited with, or on behalf of, a depositary (the "Depositary")
identified in the Prospectus Supplement relating to such series. Global
Securities may be issued only in fully registered form and in either temporary
or permanent form. Unless and until it is exchanged in whole or in part for the
individual Debt Securities represented thereby, a Global Security (i) may not be
transferred except as a whole and (ii) may only be transferred (A) by the
Depositary for such Global Security to its nominee, (B) by a nominee of such
Depositary to such Depositary or another nominee of such Depositary or (C) by
such Depositary or any such nominee to a successor Depositary or nominee of such
successor Depositary (Section 2.8).
The specific terms of the depositary arrangement with respect to a series
of Debt Securities will be described in the Prospectus Supplement relating to
such series. The Company anticipates that the following provisions generally
will apply to all depositary arrangements.
Upon the issuance of a Global Security, the Depositary for such Global
Security or its nominee will credit, on its book-entry registration and transfer
system, the respective principal amounts of the individual Debt Securities
represented by such Global Security to the accounts of persons that have
accounts with such Depositary. Such accounts shall be designated by the dealers,
underwriters or agents with respect to such Debt Securities or by the Company if
such Debt Securities are offered and sold directly by the Company. Ownership of
beneficial interests in a Global Security will be limited to persons that have
accounts with the applicable Depositary ("participants") or persons that may
hold interests through participants. Ownership of beneficial interests in such
Global Security will be shown on, and the transfer of that ownership will be
effected only through, records maintained by the applicable Depositary or its
nominee (with respect to interests of participants) and the records of
participants (with respect to interests of persons other than participants). The
laws of some states require that certain purchasers of securities take physical
delivery of such securities in definitive form. Such limits and such laws may
impair the ability to transfer beneficial interests in a Global Security.
As long as the Depositary for a Global Security or its nominee is the
registered owner of such Global Security, such Depositary or its nominee, as the
case may be, will be considered the sole owner or holder of the Debt Securities
of the series represented by such Global Security for all purposes under the
Indenture governing such Debt Securities. Except as provided below, owners of
beneficial interests in a Global Security will not be entitled to have any of
the individual Debt Securities of the series represented by such Global Security
registered in their names, will not receive or be entitled to receive physical
delivery of any such Debt Securities in definitive form and will not be
considered the owners or holders thereof under the Indenture governing such Debt
Securities.
Payment of principal of, premium, if any, and interest, if any, on
individual Debt Securities represented by a Global Security registered in the
name of a Depositary or its nominee will be made to the Depositary or its
nominee, as the case may
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be, as the registered owner of the Global Security representing such Debt
Securities. The Company expects that the Depositary for a series of Debt
Securities or its nominee, upon receipt of any payment of principal of, premium,
if any, and interest, if any, in respect of a Global Security representing any
such Debt Securities, will immediately credit participants' accounts with
payments in amounts proportionate to their respective beneficial interests in
the principal amount of such Global Security for such Securities as shown on the
records of such Depositary or its nominee. The Company also expects that
payments by participants to owners of beneficial interests in such Global
Security held through such participants will be governed by standing
instructions and customary practices, as is now the case with securities held
for the accounts of customers in bearer form or registered in "street name."
Such payments will be the responsibility of such participants. Neither the
Company, the Trustee for such Debt Securities, any paying agent nor the
registrar for such Debt Securities will have any responsibility or liability for
any aspect of the records relating to or payments made on account of beneficial
ownership interests of the Global Security for such Debt Securities or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.
If the Depositary for a series of Debt Securities is at any time
unwilling, unable or ineligible to continue as depositary and a successor
depositary is not appointed by the Company within 90 days, the Company will
issue individual Debt Securities of such series in exchange for the Global
Security representing such series of Debt Securities. In addition, the Company
may at any time and in its sole discretion, subject to any limitations described
in the Prospectus Supplement relating to such Debt Securities, determine not to
have any Debt Securities of a series represented by a Global Security and, in
such event, will issue individual Debt Securities of such series in exchange for
the Global Security representing such series of Debt Securities. Further, if the
Company so specifies with respect to the Debt Securities of a series, an owner
of a beneficial interest in a Global Security representing Debt Securities of
such series may, on terms acceptable to the Company, the Trustee and the
Depositary for such Global Security, receive individual Debt Securities of such
series in exchange for such beneficial interests, subject to any limitations
described in the Prospectus Supplement relating to such Debt Securities. In any
such instance, an owner of a beneficial interest in a Global Security will be
entitled to physical delivery of individual Debt Securities of the series
represented by such Global Security equal in principal amount to such beneficial
interest and to have such Debt Securities registered in its name. Individual
Debt Securities of such series so issued will be issued in registered form and
in denominations, unless otherwise specified in the applicable Prospectus
Supplement relating to such series of Debt Securities, of $1,000 and integral
multiples thereof.
Events of Default. Unless otherwise specified in the applicable Prospectus
Supplement, an Event of Default is defined under each Indenture with respect to
the Debt Securities of any series issued under such Indenture as being: (a)
default in the payment of principal of or premium, if any, with respect to Debt
Securities of such series when due; (b) default in the payment of any
installment of interest upon any of the Debt Securities of such series when due,
continued for 30 days; (c) default in the payment or satisfaction of any sinking
fund or other purchase obligation with respect to Debt Securities of such series
when due; (d) default in the performance of any other covenant of the Company
applicable to Debt Securities of such series, continued for 60 days after
written notice to the Company by the Trustee or to the Company and the Trustee,
by the holders of at least 25% in aggregate principal amount of the Debt
Securities of such series then outstanding requiring the same to be remedied;
(e) certain events of bankruptcy, insolvency or reorganization of the Company;
and (f) default under any bond, debenture, note or other evidence of
indebtedness for money borrowed by the Company or under any mortgage, indenture
or instrument under which there may be issued or by which there may be secured
or evidenced any indebtedness for money borrowed of the Company resulting in the
acceleration of such indebtedness, or any default in payment of such
indebtedness (after expiration of any applicable grace periods and presentation
of any debt instruments, if required), if the aggregate amount of all such
indebtedness that has been so accelerated and with respect to which there has
been such a default in payment shall exceed $25,000,000 and there has been a
failure to obtain rescission or annulment of all such accelerations or to
discharge all such defaulted indebtedness within 20 days after written notice of
the type specified in the foregoing clause (d) (Section 5.1).
If any Event of Default shall occur and be continuing, the Trustee or the
holders of not less than 25% in aggregate principal amount of the Debt
Securities of such series then outstanding, by notice in writing to the Company
(and to the Trustee, if given by the holders), may declare the principal (or, in
the case of any series of Debt Securities originally issued at a discount from
their stated principal amount, such portion of the principal amount as may be
specified in the terms of such series) of all of the Debt Securities of such
series and the interest, if any, accrued thereon to be due and payable
immediately; provided, however, that the holders of a majority in aggregate
principal amount of the Debt Securities of such series then outstanding, by
notice in writing to the Company and the Trustee, may rescind and annul such
declaration and its consequences if all defaults under such Indenture are cured
or waived (Section 5.1).
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Each Indenture provides that no holder of any series of Debt Securities
then outstanding may institute any suit, action or proceeding with respect to,
or otherwise attempt to enforce, such Indenture, unless (i) such holder
previously shall have given to the Trustee written notice of default and of the
continuance thereof, (ii) the holders of not less than 25% in aggregate
principal amount of such series of Debt Securities then outstanding shall have
made written request to the Trustee to institute such suit, action or proceeding
and shall have offered to the Trustee such reasonable indemnity as it may
require with respect thereto and (iii) the Trustee for 60 days after its receipt
of such notice, request and offer of indemnity, shall have neglected or refused
to institute any such action, suit or proceeding; provided that, subject to the
subordination provisions applicable to the Senior Subordinated Debt Securities
and the Subordinated Debt Securities, the right of any holder of any Debt
Security to receive payment of the principal of, premium, if any, or interest,
if any, on such Debt Security, on or after the respective due dates, or to
institute suit for the enforcement of any such payment shall not be impaired or
affected without the consent of such holder (Section 5.4). The holders of a
majority in aggregate principal amount of the Debt Securities of such series
then outstanding may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee with respect to the Debt Securities of such
series, provided that the Trustee may decline to follow such direction if the
Trustee determines that such action or proceeding is unlawful or would involve
the Trustee in personal liability (Section 5.7).
The Company is required to furnish to the Trustee annually a certificate
as to compliance by the Company with all conditions and covenants under each
Indenture (Section 4.3).
Discharge and Defeasance. Unless otherwise specified in the applicable
Prospectus Supplement, the Company can discharge or defease its obligations with
respect to any series of Debt Securities as set forth below (Article Ten).
The Company may discharge all of its obligations (except those set forth
below) to holders of any series of Debt Securities issued under any Indenture
that have not already been delivered to the Trustee for cancellation and that
have either become due and payable, or are by their terms due and payable within
one year (or scheduled for redemption within one year), by irrevocably
depositing with the Trustee cash or U.S. Government Obligations (as defined in
such Indenture), or a combination thereof, as trust funds in an amount certified
to be sufficient to pay when due the principal of, premium, if any, and
interest, if any, on all outstanding Debt Securities of such series and to make
any mandatory sinking fund payments, if any, thereon when due.
Unless otherwise provided in the applicable Prospectus Supplement, the
Company may also elect at any time to (a) defease and be discharged from all of
its obligations (except those set forth below) to holders of any series of Debt
Securities issued under each Indenture ("defeasance") or (b) be released from
all of their obligations with respect to certain covenants applicable to any
series of Debt Securities issued under each Indenture ("covenant defeasance"),
if, among other things: (i) the Company irrevocably deposits with the Trustee
cash or U.S. Government Obligations, or a combination thereof, as trust funds in
an amount certified to be sufficient to pay when due the principal of, premium,
if any, and interest, if any, on all outstanding Debt Securities of such series
and to make any mandatory sinking fund payments, if any, thereon when due and
such funds have been so deposited for 91 days; (ii) such deposit will not result
in a breach or violation of, or cause a default under, any agreement or
instrument to which the Company is a party or by which it is bound; and (iii)
the Company delivers to the Trustee an opinion of counsel to the effect that the
holders of such series of Debt Securities will not recognize income, gain or
loss for United States federal income tax purposes as a result of such
defeasance or covenant defeasance and that defeasance or covenant defeasance
will not otherwise alter the United States federal income tax treatment of such
holders' principal and interest payments, if any, on such series of Debt
Securities. Such opinion in the case of defeasance under clause (a) above must
be based on a ruling of the Internal Revenue Service or a change in United
States federal income tax law occurring after the date of the Indenture relating
to the Debt Securities of such series, since such a result would not occur under
current tax law (Section 10.1).
Notwithstanding the foregoing, no discharge, defeasance or covenant
defeasance described above shall affect the following obligations to or rights
of the holders of any series of Debt Securities: (i) rights of registration of
transfer and exchange of Debt Securities of such series, (ii) rights of
substitution of mutilated, defaced, destroyed, lost or stolen Debt Securities of
such series, (iii) rights of holders of Debt Securities of such series to
receive payments of principal thereof and premium, if any, and interest, if any,
thereon, upon the original due dates therefor (but not upon acceleration), and
to receive mandatory sinking fund payments thereon when due, if any, (iv)
rights, obligations, duties and immunities of the Trustee, (v) rights of holders
of Debt Securities of such series as beneficiaries with respect to property so
deposited with the Trustee payable to all or any of them and (vi) obligations of
the Company to maintain an office or agency in respect of Debt Securities of
such series (Section 10.1).
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The Company may exercise the defeasance option with respect to any series
of Debt Securities notwithstanding the prior exercise of the covenant defeasance
option with respect to any series of Debt Securities. If the Company exercises
the defeasance option with respect to any series of Debt Securities, payment of
such series of Debt Securities may not be accelerated because of an Event of
Default with respect to such series of Debt Securities. If the Company exercises
the covenant defeasance option with respect to any series of Debt Securities,
payment of such series of Debt Securities may not be accelerated by reason of an
Event of Default with respect to the covenants to which such covenant defeasance
is applicable. However, if such acceleration were to occur by reason of another
Event of Default, the realizable value at the acceleration date of the cash and
U.S. Government Obligations in the defeasance trust could be less than the
principal of, premium, if any, and interest, if any, and any mandatory sinking
fund payments, if any, then due on such series of Debt Securities, in that the
required deposit in the defeasance trust is based upon scheduled cash flow
rather than market value, which will vary depending upon interest rates and
other factors.
Modification of the Indenture. Each Indenture provides that the Company
and the Trustee may enter into supplemental indentures without the consent of
the holders of the Debt Securities to (a) evidence the assumption by a successor
entity of the obligations of the Company under such Indenture, (b) add covenants
or new events of default for the protection of the holders of such Debt
Securities, (c) cure any ambiguity or correct any inconsistency in the
Indenture, (d) establish the form and terms of Debt Securities of any series,
(e) evidence the acceptance of appointment by a successor Trustee, (f) secure
such Debt Securities, (g) designate a bank or trust company other than to
act as Trustee for a series of Senior Debt Securities, to act as Trustee
for a series of Subordinated Debt Securities and to act as Trustee for a
series of Senior Subordinated Debt Securities, (h) modify the existing covenants
and events of default solely in respect of, or add new covenants and events of
default that apply solely to, Debt Securities not yet issued and outstanding on
the date of such supplemental indenture, (i) provide for the issuance of Debt
Securities of any series in coupon form and exchangeability of such Debt
Securities for fully registered Debt Securities, (j) modify, eliminate or add to
the provisions of such Indenture as necessary to effect the qualification of
such Indenture under the Trust Indenture Act of 1939 and to add certain
provisions expressly permitted by such Act, and (k) modify the provisions to
provide for the denomination of Debt Securities in foreign currencies which
shall not adversely affect the interests of the holders of such Debt Securities
in any material respect. (Section 8.1).
Each Indenture also contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of Debt Securities of each series then outstanding
and affected, to add any provisions to, or change in any manner or eliminate any
of the provisions of, such Indenture or any supplemental indenture or modify in
any manner the rights of the holders of the Debt Securities of such series;
provided that the Company and the Trustee may not, without the consent of the
holder of each outstanding Debt Security affected thereby, (a) extend the stated
final maturity of any Debt Security, reduce the principal amount thereof, reduce
the rate or extend the time of payment of interest, if any, thereon, reduce or
alter the method of computation of any amount payable on redemption, repayment
or purchase by the Company, change the coin or currency in which principal,
premium, if any, and interest, if any, are payable, reduce the amount of the
principal of any original issue discount security payable upon acceleration or
provable in bankruptcy, impair or affect the right to institute suit for the
enforcement of any payment or repayment thereof or, if applicable, adversely
affect any right of prepayment at the option of the holder or (b) reduce the
aforesaid percentage in aggregate principal amount of Debt Securities of any
series issued under such Indenture (Section 8.2).
Consolidation, Merger, Sale or Conveyance. Except as otherwise provided in
the applicable Prospectus Supplement, the Indentures provide that EMCOR may,
without the consent of the holders of Debt Securities, consolidate with, merge
into or transfer, exchange or dispose of all of its properties to, any other
corporation or partnership organized under the laws of the United States,
provided that (i) the successor corporation assumes all obligations of EMCOR by
supplemental indenture satisfactory in form to the applicable Trustee executed
and delivered to such Trustee, under the Indentures and the Debt Securities,
(ii) immediately after giving effect to such consolidation, merger, exchange or
other disposition, no Event of Default, and no event which, after notice or
lapse of time or both, would become an Event of Default, shall have occurred and
be continuing and (iii) certain other conditions are met. (Section 9.1).
Certain Definitions. Except as otherwise provided in the applicable
Prospectus Supplement, the following definitions are applicable to the
discussions of the Indentures (Article One).
"Consolidated Net Tangible Assets" means the aggregate amount of assets
included on the most recent consolidated balance sheet of EMCOR and its
Restricted Subsidiaries, less applicable reserves and other properly
deductible items and after deducting therefrom (a) all current liabilities
and (b) all goodwill, trade names, trademarks, patents,
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unamortized debt discount and expense and other like intangibles, all in
accordance with generally accepted accounting principles consistently
applied.
"Indebtedness," with respect to any person, means, without duplication:
(a)(i) the principal of, premium, if any, and interest, if any, on
indebtedness for money borrowed of such person, indebtedness of such
person evidenced by bonds, notes, debentures or similar obligations,
and any guaranty by such person of any indebtedness for money borrowed
or indebtedness evidenced by bonds, notes, debentures or similar
obligations of any other person, whether any such indebtedness or
guaranty is outstanding on the date of the Indenture or is thereafter
created, assumed or incurred, (ii) obligations of such person for the
reimbursement of any obligor on any letter of credit, banker's
acceptance or similar credit transaction, (iii) the principal of and
premium, if any, and interest, if any, on indebtedness incurred,
assumed or guaranteed by such person in connection with the acquisition
by it or any of its subsidiaries of any other businesses, properties or
other assets, (iv) lease obligations that such person capitalized in
accordance with Statement of Financial Accounting Standards No. 13
promulgated by the Financial Accounting Standards Board or such other
generally accepted accounting principles as may be from time to time in
effect, (v) any indebtedness of such person representing the balance
deferred and unpaid of the purchase price of any property or interest
therein (except any such balance that constitutes an accrued expense or
trade payable) and any guaranty, endorsement or other contingent
obligation of such person in respect of any indebtedness of another
that is outstanding on the date of the Indenture or is thereafter
created, assumed or incurred by such person and (vi) obligations of
such person under interest rate, commodity or currency swaps, caps,
collars, options and similar arrangements if and to the extent that any
of the foregoing indebtedness in (i) through (vi) would appear as a
liability on the balance sheet of such person in accordance with
generally accepted accounting principles; and
(b) any amendments, modifications, refundings, renewals or extensions
of any indebtedness or obligation described as Indebtedness in clause
(a) above.
"Restricted Subsidiary" means (a) any Subsidiary of EMCOR other than an
Unrestricted Subsidiary, and (b) any Subsidiary of EMCOR which was an
Unrestricted Subsidiary but which, subsequent to the date of the
Indentures, is designated by the Board of Directors of EMCOR to be a
Restricted Subsidiary; provided, however, that EMCOR may not designate any
such Subsidiary to be a Restricted Subsidiary if EMCOR would thereby
breach any covenant or agreement contained in the Indentures (on the
assumptions that any outstanding Indebtedness of such Subsidiary was
incurred at the time of such designation).
"Subsidiary" of any specified Person means any corporation of which
such Person, or such Person and one or more Subsidiaries of such Person,
or any one or more Subsidiaries of such Person, directly or indirectly own
voting securities entitling any one or more of such Person and its
Subsidiaries to elect a majority of the directors, either at all times, or
so long as there is no default or contingency which permits the holders of
any other class or classes of securities to vote for the election of one
or more directors.
"Unrestricted Subsidiary" means (a) any Subsidiary of EMCOR acquired or
organized after the date of the Indentures, provided, however, that such
Subsidiary shall not be a successor, directly or indirectly, to any
Restricted Subsidiary and (b) any Subsidiary of EMCOR substantially all
the assets of which consist of stock or other securities of a Subsidiary
or Subsidiaries of the character described in clause (a) above, unless and
until such Subsidiary shall have been designated to be a Restricted
Subsidiary.
Provisions Applicable Solely to Senior Subordinated Debt Securities and
Subordinated Debt Securities
Subordination. The Subordinated Debt Securities will be subordinate and
junior in right of payment, to the extent set forth in the Subordinated Debt
Indenture, to all Senior Indebtedness. The Senior Subordinated Debt Securities
will be subordinate and junior in right of payment, to the extent set forth in
the Senior Subordinated Debt Indenture, to all Senior Indebtedness of the
Company. The Senior Subordinated Debt Securities will rank senior to all
existing and future Indebtedness of the Company that is neither Senior
Indebtedness nor Senior Subordinated Indebtedness, and only Indebtedness of the
Company that is Senior Indebtedness will rank senior to the Senior Subordinated
Debt Securities in accordance with the subordination provisions of the Senior
Subordinated Debt Indenture.
"Senior Indebtedness" is defined in the Subordinated Debt Indenture and
the Senior Subordinated Debt Indenture with respect to the Company as
Indebtedness of the Company outstanding at any time (other than the Indebtedness
evidenced by
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the Debt Securities of any series) except (a) any Indebtedness as to which, by
the terms of the instrument creating or evidencing the same, it is provided that
such Indebtedness is not senior or prior in right of payment to the Debt
Securities or is pari passu or subordinate by its terms in right of payment to
the Debt Securities, (b) renewals, extensions and modifications of any such
Indebtedness, (c) any Indebtedness of the Company to a wholly-owned Subsidiary
of the Company, (d) interest accruing after the filing of a petition initiating
certain events of bankruptcy or insolvency unless such interest is an allowed
claim enforceable against the Company in a proceeding under federal or state
bankruptcy laws and (e) trade payables.
"Senior Subordinated Indebtedness" of the Company means the Senior
Subordinated Debt Securities and any other Indebtedness of the Company that
ranks pari passu with the Senior Subordinated Debt Securities. Any Indebtedness
of the Company that is subordinate or junior by its terms in right of payment to
any other Indebtedness of the Company shall be subordinate to Senior
Subordinated Indebtedness of the Company unless the instrument creating or
evidencing the same or pursuant to which the same is outstanding specifically
provides that such Indebtedness (i) is to rank pari passu with other Senior
Subordinated Indebtedness of the Company and (ii) is not subordinated by its
terms to any Indebtedness of the Company which is not Senior Indebtedness of the
Company.
"Subordinated Indebtedness" of the Company means the Senior Subordinated
Debt Securities, any other Senior Subordinated Indebtedness of the Company and
any other Indebtedness that is subordinate or junior in right of payment to
Senior Indebtedness of the Company.
If (i) the Company should default in the payment of any principal of,
premium, if any, or interest, if any, on any Senior Indebtedness of the Company
when the same becomes due and payable, whether at maturity or at a date fixed
for prepayment or by declaration of acceleration or otherwise or (ii) any other
default with respect to Senior Indebtedness of the Company shall occur and the
maturity of the Senior Indebtedness has been accelerated in accordance with its
terms, then, upon written notice of such default to the Company by the holders
of such Senior Indebtedness or any trustee therefor, unless and until such
default shall have been cured or waived or shall have ceased to exist or such
acceleration shall have been rescinded, no direct or indirect payment (in cash,
property, securities, by set-off or otherwise) will be made or agreed to be made
for principal of, premium, if any, or interest, if any, on any of the Senior
Subordinated Debt Securities or the Subordinated Debt Securities, or in respect
of any redemption, retirement, purchase or other acquisition of the Senior
Subordinated Debt Securities or the Subordinated Debt Securities other than
those made in capital stock of EMCOR (or cash in lieu of fractional shares
thereof) (Sections 13.1 and 13.4 of the Senior Subordinated Debt Indenture and
Sections 13.1 and 13.4 of the Subordinated Debt Indenture).
If any default (other than a default described in the preceding paragraph)
occurs under the Senior Indebtedness of the Company, pursuant to which the
maturity thereof may be accelerated immediately or the expiration of any
applicable grace periods occurs (a "Senior Nonmonetary Default"), then, upon the
receipt by the Company and the Trustee of written notice thereof (a "Payment
Notice") from or on behalf of holders of 25% or more of the aggregate principal
amount of Senior Indebtedness specifying an election to prohibit such payment
and other action by the Company in accordance with the following provisions of
this paragraph, the Company may not make any payment or take any other action
that would be prohibited by the immediately preceding paragraph during the
period (the "Payment Blockage Period") commencing on the date of receipt of such
Payment Notice and ending on the earlier of (i) the date, if any, on which the
holders of such Senior Indebtedness or their representative notify the Trustee
that such Senior Nonmonetary Default is cured or waived or ceases to exist or
the Senior Indebtedness to which such Senior Nonmonetary Default relates is
discharged or (ii) the 179th day after the date of receipt of such Payment
Notice. Notwithstanding the provisions described in the immediately preceding
sentence, the Company may resume payments on the Senior Subordinated Debt
Securities and the Subordinated Debt Securities after such Payment Blockage
Period.
If (i) (A) without the consent of the Company, a receiver, conservator,
liquidator or trustee of the Company or of any of its property is appointed by
the order or decree of any court or agency or supervisory authority having
jurisdiction, and such decree or order remains in effect for more than 60 days
or (B) the Company is adjudicated bankrupt or insolvent or (C) any of its
property is sequestered by court order and such order remains in effect for more
than 60 days or (D) a petition is filed against the Company under any state or
federal bankruptcy, reorganization, arrangement, insolvency, readjustment of
debt, dissolution, liquidation or receivership law of any jurisdiction whether
now or hereafter in effect, and is not dismissed within 60 days after such
filing; (ii) the Company (A) commences a voluntary case or other proceeding
seeking liquidation, reorganization, arrangement, insolvency, readjustment of
debt, dissolution, liquidation or other relief with respect to itself or its
debt or other liabilities under any bankruptcy, insolvency or other similar law
now or hereafter in effect or seeking the
14
<PAGE>
appointment of a trustee, receiver, liquidator, custodian or other similar
official of it or any substantial part of its property, or (B) consents to any
such relief or to the appointment of or taking possession by any such official
in an involuntary case or other proceeding commenced against it, or (C) fails
generally to, or cannot, pay its debts generally as they become due or (D) takes
any corporate action to authorize or effect any of the foregoing; or (iii) any
Subsidiary of the Company takes, suffers or permits to exist any of the events
or conditions referred to in the foregoing clause (i) or (ii), then all Senior
Indebtedness of the Company (including any interest thereon accruing after the
commencement of any such proceedings) will first be paid in full before any
payment or distribution, whether in cash, securities or other property, is made
by the Company to any holder of Senior Subordinated Debt Securities or
Subordinated Debt Securities on account of the principal of, premium, if any, or
interest, if any, on such Senior Subordinated Debt Securities or Subordinated
Debt Securities, as the case may be. Any payment or distribution, whether in
cash, securities or other property (other than securities of the Company or any
other corporation provided for by a plan of reorganization or readjustment the
payment of which is subordinate, at least to the extent provided in the
subordination provisions with respect to the indebtedness evidenced by the
Senior Subordinated Debt Securities or the Subordinated Debt Securities, to the
payment of all Senior Indebtedness of the Company then outstanding and to any
securities issued in respect thereof under any such plan of reorganization or
readjustment) that would otherwise (but for the subordination provisions) be
payable or deliverable in respect of the Senior Subordinated Debt Securities or
the Subordinated Debt Securities of any series will be paid or delivered
directly to the holders of Senior Indebtedness of the Company in accordance with
the priorities then existing among such holders until all Senior Indebtedness of
the Company (including any interest thereon accruing after the commencement of
any such proceedings) has been paid in full. In the event of any such
proceeding, after payment in full of all sums owing with respect to Senior
Indebtedness of the Company, the holders of Senior Subordinated Debt Securities,
together with the holders of any obligations of the Company ranking on a parity
with the Senior Subordinated Debt Securities, will be entitled to be repaid from
the remaining assets of the Company the amounts at that time due and owing on
account of unpaid principal of, premium, if any, or interest, if any, on the
Senior Subordinated Debt Securities and such other obligations before any
payment or other distribution, whether in cash, property or otherwise, shall be
made on account of any capital stock or obligations of the Company ranking
junior to the Senior Subordinated Debt Securities (including the Subordinated
Debt Securities) and such other obligations (Section 13.1 of the Senior
Subordinated Debt Indenture and Section 13.1 of the Subordinated Debt
Indenture).
If any payment or distribution of any character, whether in cash,
securities or other property (other than securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment the payment
of which is subordinate, at least to the extent provided in the subordination
provisions with respect to the Senior Subordinated Debt Securities or the
Subordinated Debt Securities, to the payment of all Senior Indebtedness of the
Company then outstanding and to any securities issued in respect thereof under
any such plan of reorganization or readjustment), shall be received by the
Trustee, or any holder of any Senior Subordinated Debt Securities or
Subordinated Debt Securities in contravention of any of the terms of the Senior
Subordinated Debt Indenture or the Subordinated Debt Indenture, as the case may
be, such payment or distribution of securities will be received in trust for the
benefit of, and will be paid over or delivered and transferred to, the holders
of the Senior Indebtedness of the Company then outstanding in accordance with
the priorities then existing among such holders for application to the payment
of all Senior Indebtedness of the Company remaining unpaid to the extent
necessary to pay all such Senior Indebtedness in full (Section 13.1 of the
Senior Subordinated Debt Indenture and Section 13.1 of the Subordinated Debt
Indenture).
By reason of such subordination, in the event of the insolvency of the
Company, holders of Senior Indebtedness of the Company may receive more,
ratably, than holders of the Senior Subordinated Debt Securities or Subordinated
Debt Securities. Such subordination will not prevent the occurrence of any Event
of Default (as defined in the Indentures) or limit the right of acceleration in
respect of the Senior Subordinated Debt Securities or Subordinated Debt
Securities.
Concerning the Trustee
Any of the Trustees under the Indentures may make loans to EMCOR in the
normal course of business. If a bank or trust company other than ,
or is to act as Trustee for a series of Debt Securities,
information concerning such other Trustee will be set forth in the Prospectus
Supplement relating to such series of Debt Securities.
15
<PAGE>
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company is 14,700,000 shares
consisting of 13,700,000 shares of Common Stock, par value $0.01 per share (the
"Common Stock") and 1,000,000 shares of Preferred Stock, par value $.10 per
share (the "Preferred Stock") in such series and with such voting powers,
designations, preferences and relative, participating, optional or other special
rights, and qualifications, limitations or restrictions thereof, as may be fixed
from time to time by the Board of Directors for each series. The Board of
Directors has approved an amendment to the Company's Restated Certificate of
Incorporation, which if approved by shareholders, will increase the Company's
authorized capital stock to 31,000,000 shares consisting of 30,000,000 shares of
Common Stock and 1,000,000 shares of Preferred Stock. The following summary
description of certain provisions of the Company's Restated Certificate of
Incorporation (the "Certificate of Incorporation") and the By-laws does not
purport to be complete and is qualified in its entirety by reference to said
provisions.
Common Stock
As of December 31, 1997, 9,476,044 shares of Common Stock were issued and
outstanding. The outstanding Common Stock is, and any Common Stock offered
pursuant to this Prospectus and any Prospectus Supplement when issued and paid
for will be, fully paid and non-assessable.
Dividends. Dividends on the Common Stock will be paid if, when and as
determined by the Board of Directors of the Company out of funds legally
available for this purpose. The Company's working capital credit facility limits
the payment of dividends on its Common Stock.
Voting Rights. Holders of Common Stock are entitled to one vote for each
share held by them on all matters presented to shareholders.
Liquidation Rights. After satisfaction of the preferential liquidation
rights of any Preferred Stock, the holders of the Common Stock are entitled to
share, ratably, in the distribution of all remaining net assets.
Preemptive and Other Rights. The holders of Common Stock do not have
preemptive rights as to additional issues of Common Stock or conversion rights.
The shares of Common Stock are not subject to redemption or to any further calls
or assessments and are not entitled to the benefit of any sinking fund
provisions. The rights, preferences and privileges of holders of Common Stock
are subject to, and may be adversely affected by, the rights of the holder of
shares of any series of Preferred Stock which the Company may designate and
issue in the future.
Preferred Stock
The Certificate of Incorporation authorizes the Board of Directors to
issue from time to time up to 1,000,000 shares of Preferred Stock, in one or
more series, and with such voting powers, designations, preferences and
relative, participating, optional or other special rights, and qualifications,
limitations or restrictions thereof, as may be fixed from time to time by the
Board of Directors for each series. No shares of Preferred Stock have been
issued.
Stockholders Rights Plan
The Company's Board of Directors enacted a stockholder rights plan (the
"Rights Plan") designed to protect the interests of the Company's stockholders
in the event of a potential takeover the terms of which are not approved by the
Board of Directors as being in the best interests of the Company and its
stockholders. Pursuant to the Rights Plan, on March 3, 1997 the Board declared a
dividend of one preferred share purchase right (a "Right") for each outstanding
share of Common Stock. The dividend was paid on March 14, 1997 to the
stockholders of record on that date. Each Right entitles the registered holder
to purchase from the Company one one-thousandth of a share of Series A Junior
Participating Preferred Stock, par value $.10 per share (the "Preferred Stock")
of the Company at a price of $70 per one one-thousandth of a share of Preferred
Stock, subject to adjustment. The description and terms of the Rights are set
forth in a Rights Agreement dated as of March 3, 1997, as the same may be
amended from time to time, between the Company and The Bank of New York, as
Rights Agent.
Shares of Preferred Stock purchasable upon exercise of the Rights will not
be redeemable. Each share of Preferred Stock will be entitled, when, as and if
declared, to a minimum preferential quarterly dividend payment of $1 per share
but will be entitled to an aggregate dividend of 1000 times the dividend
declared per share of Common Stock. In the event of liquidation,
16
<PAGE>
the holders of the Preferred Stock will be entitled to a minimum preferential
liquidation payment of $100 per share (plus any accrued but unpaid dividends)
but will be entitled to an aggregate payment of 1000 times the payment made per
share of Common Stock. Each share of Preferred Stock will have 1000 votes,
voting together with the Common Stock. Finally, in the event of any merger,
consolidation or other transaction in which shares of Common Stock are converted
or exchanged, each share of Preferred Stock will be entitled to received 1000
times the amount received per share of Common Stock. These rights are protected
by customary antidilution provisions.
In the event that any person or group of affiliated persons acquires
beneficial ownership of 15% or more of the Company's outstanding Common Stock
(an "Acquiring Person"), each holder of a Right, other than Rights beneficially
owned by the Acquiring Person (which will thereupon become void), will
thereafter have the right to receive upon exercise of a Right at the then
current exercise price of the Right, that number of shares of Common Stock
having a market value of two times the exercise price of the Right.
In the event that, after a person or group has become an Acquiring Person,
the Company is acquired in a merger or other business combination transaction or
50% or more of its consolidated assets or earning power are sold, proper
provision will be made so that each holder of a Right (other than Rights
beneficially owned by an Acquiring Person which will have become void) will
thereafter have the right to receive, upon the exercise thereof at the then
current exercise price of the Right, that number of shares of common stock of
the person with whom the Company has engaged in the foregoing transaction (or
its parent), which number of shares at the time of such transaction will have a
market value of two times the exercise price of the Right.
At any time after any person or group becomes an Acquiring Person and
prior to the acquisition by such person or group of 50% or more of the
outstanding shares of Common Stock or the occurrence of an event described in
the prior paragraph, the Board of Directors of the Company may exchange the
Rights (other than Rights owned by such person or group which will have become
void), in whole or in part, at an exchange ratio of one share of Common Stock,
or one one-thousandth of a share of Preferred Stock (or of a share of a class or
series of the Company's preferred stock having equivalent rights, preferences
and privileges), per Right (subject to adjustment).
At any time prior to the time an Acquiring Person becomes such, the Board
of Directors of the Company may redeem the Rights in whole, but not in part, at
a price of $.01 per Right (the "Redemption Price"). The redemption of the Rights
may be made effective at such time, on such basis and with such conditions as
the Board of Directors in its sole discretion may establish. Immediately upon
any redemption of the Rights, the right to exercise the Rights will terminate
and the only right of the holders of Rights will be to receive the Redemption
Price.
For so long as the Rights are then redeemable, the Company may, except
with respect to the Redemption Price, amend the Rights in any manner. After the
Rights are no longer redeemable, the Company may, except with respect to the
Redemption Price, amend the Rights in any manner that does not adversely affect
the interests of holders of the Rights.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends.
DESCRIPTION OF WARRANTS
EMCOR may issue Warrants, including Warrants to purchase Common Stock or
Preferred Stock and Warrants to purchase Debt Securities. Warrants may be issued
independently of or together with any other Securities and may be attached to or
separate from such Securities. Each series of Warrants will be issued under a
separate Warrant Agreement (each a "Warrant Agreement") to be entered into
between EMCOR and a Warrant Agent ("Warrant Agent"). The Warrant Agent will act
solely as an agent of EMCOR in connection with the Warrants of such series and
will not assume any obligation or relationship of agency or trust for or with
holders or beneficial owners of Warrants. The following sets forth certain
general terms and provisions of the Warrants offered hereby. Further terms of
the Warrants and the applicable Warrant Agreement will be set forth in the
applicable Prospectus Supplement.
The applicable Prospectus Supplement will describe the following terms,
where applicable, of the Warrants in respect of which this Prospectus is being
delivered: (i) the title of such Warrants; (ii) the aggregate number of such
Warrants; (iii) the price or prices at which such Warrants will be issued; (iv)
the designation, aggregate principal amount and terms of the securities
purchasable upon exercise of such Warrants; (v) the designation and terms of the
Securities with which such Warrants are issued and the number of such Warrants
issued with each such security; (vi) if applicable, the date on and after
17
<PAGE>
which such Warrants and the related securities will be separately transferable;
(vii) the price at which the securities purchasable upon exercise of such
Warrants may be purchased; (viii) the date on which the right to exercise such
Warrants shall commence and the date on which such right shall expire; (ix) the
minimum or maximum amount of such Warrants which may be exercised at any one
time; (x) information with respect to book-entry procedures, if any; (xi) a
discussion of certain Federal income tax considerations; and (xii) any other
terms of such Warrants, including terms, procedures and limitations relating to
the exchange and exercise of such Warrants.
18
<PAGE>
PLAN OF DISTRIBUTION
EMCOR may sell the Securities to or through underwriters or dealers, and
also may sell the Securities directly to one or more other purchasers or through
agents. The applicable Prospectus Supplement will set forth the names of any
underwriters or agents involved in the sale of the Offered Securities and any
applicable commissions or discounts.
Underwriters, dealers or agents may offer and sell the Offered Securities
at a fixed price or prices, which may be changed, or from time to time at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices or at negotiated prices. In connection with the sale of the
Securities, underwriters or agents may be deemed to have received compensation
from EMCOR in the form of underwriting discounts or commissions and may also
receive commissions from purchasers of the Securities for whom they may act as
agent. Underwriters or agents may sell the Securities to or through dealers, and
such dealers may receive compensation in the form of discounts, concessions or
commissions from the underwriters or commissions from the purchasers for whom
they may act as agent.
The Securities (other than the Common Stock), when first issued, will have
no established trading market. Any underwriters or agents to or through whom
Securities are sold by EMCOR for public offering and sale may make a market in
such Securities, but such underwriters or agents will not be obligated to do so
and may discontinue any market making at any time without notice. No assurance
can be given as to the liquidity of the trading market for any Securities.
Any underwriters, dealers or agents participating in the distribution of
the Securities may be deemed to be underwriters, and any discounts and
commissions received by them and any profit realized by them on resale of the
Securities may be deemed to be underwriting discounts and commissions under the
Securities Act. Underwriters, dealers or agents may be entitled, under
agreements entered into with EMCOR, to indemnification against or contribution
toward certain civil liabilities, including liabilities under the Securities
Act.
If so indicated in the Prospectus Supplement, EMCOR will authorize
underwriters or other persons acting as its agents to solicit offers by certain
institutions to purchase Securities from it pursuant to contracts providing for
payment and delivery on a future date. Institutions with which such contracts
may be made include commercial and savings banks, insurance companies, pension
funds, investment companies, educational and charitable institutions and others,
but in all cases will be subject to the condition that the purchase of the
Securities shall not at the time of delivery be prohibited under the laws of the
jurisdiction to which such purchaser is subject. The underwriters and such
agents will not have any responsibility in respect of the validity or
performance of such contracts.
LEGAL MATTERS
Certain legal matters with respect to the validity of the Securities will
be passed upon for EMCOR by Simpson Thacher & Bartlett (a partnership which
includes professional corporations), New York, New York.
EXPERTS
The consolidated financial statements and schedules incorporated by
reference in this prospectus and elsewhere in the registration statement, to the
extent and for the periods indicated in their reports, have been audited by
Arthur Andersen LLP and Deloitte & Touche LLP, independent public accountants,
and are included herein in reliance upon the authority of said firms as experts
in giving said reports.
19
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The estimated expenses payable by the Company in connection with the
offering described in this Registration Statement are as follows:
Registration Fee................................................ 44,250
Legal fees and expenses......................................... *
Blue Sky fees and expenses...................................... *
Accounting fees and expenses.................................... *
Printing and duplicating expenses............................... *
Miscellaneous expenses.......................................... *
Total......................................................... $ *
========
* To be filed by amendment.
Item 15. Indemnification of Directors and Officers.
The Certificate of Incorporation provides, as do the charters of many
other publicly held companies, that the personal liability of directors of the
Company to the Company is eliminated to the maximum extent permitted by Delaware
law. The Certificate of Incorporation and By-Laws provide for the
indemnification of the directors, officers, employees, and agents of the Company
and its subsidiaries to the full extent that may be permitted by Delaware law
from time to time, and the ByLaws provide for various procedures relating
thereto. Certain provisions of the Certificate of Incorporation protect the
Company's directors against personal liability for monetary damages resulting
from breaches of their fiduciary duty of care, except as set forth below. Under
Delaware law, absent these provisions, directors could be held liable for gross
negligence in the performance of their duty of care, but not for simple
negligence. The Certificate of Incorporation absolves directors of liability for
negligence in the performance of their duties, including gross negligence.
However, the Company's directors remain liable for breaches of their duty of
loyalty to the Company and its stockholders, as well as for acts or omissions
not in good faith or which involve intentional misconduct or a knowing violation
of law and transactions from which a director derives improper personal benefit.
The Certificate of Incorporation also does not absolve directors of liability
under section 174 of the Delaware General Corporation Law, which makes directors
personally liable for unlawful dividends or unlawful stock repurchases or
redemptions in certain circumstances and expressly sets forth a negligence
standard with respect to such liability.
Under Delaware law, directors, officers, employees, and other individuals
may be indemnified against expenses (including attorneys' fees), judgments,
fines, and amounts paid in settlement in connection with specified actions,
suits, or proceedings, whether civil, criminal, administrative, or investigative
(other than an action by or in the right of the corporation -- a "derivative
action") if they acted in good faith and in a manner they reasonably believed to
be in or not opposed to the best interests of the Company and, with respect to
any criminal action or proceeding, had no reasonable cause to believe their
conduct was unlawful. A similar standard of care is applicable in the case of a
derivative action, except that indemnification only extends to expenses
(including attorneys' fees) incurred in connection with defense or settlement of
such an action and Delaware law requires court approval before there can be any
indemnification of expenses where the person seeking indemnification has been
found liable to the Company.
The Certificate of Incorporation provides, among other things, that each
person who was or is made a party to, or is threatened to be made a party to, or
is involved in, any action, suit, or proceeding by reason of the fact that he or
she is or was a director or officer of the Company (or was serving at the
request of the Company as a director, officer, employee, or agent for another
entity), will be indemnified and held harmless by the Company to the full extent
authorized by Delaware law against all expense, liability, or loss (including
attorneys' fees, judgments, fines, ERISA excise taxes or penalties, and amounts
to be paid in settlement) reasonably incurred by such person in connection
therewith. The rights conferred thereby will be deemed to be contract rights and
will include the right to be paid by the Company for the expenses incurred in
defending the proceedings specified above in advance of their final disposition.
II-1
<PAGE>
The Company is party to an indemnification agreement with each of its
directors and officers. These indemnification agreements provide for, among
other things, the indemnification by the Company of its directors and officers
to the fullest extent permitted by law and the advancement of attorney's fees
and expenses. The agreements also state that in the event of a potential change
in control, the Company shall establish trusts, which are irrevocable except
upon the indemnitees' written consent, to fund its indemnification obligations
thereunder.
Item 16. Exhibits.
See Exhibit Index.
Item 17. Undertakings.
The undersigned registrants hereby undertake:
(1) To file, during any period in which offers or sales are being made, a
post effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the from of prospectus filed with the Commission
pursuant to Rule 462(b) if, in the aggregate, the changes in volume and
price represent no more than 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective Registration Statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
The undersigned registrants hereby undertake that, for purposes of
determining any liability under the Securities Act, each filing of the EMCOR
annual report pursuant to section 13(a) or section 15(d) of the Exchange Act
(and, where applicable, each filing of an employee benefit plan's annual report
pursuant to section 15(d) of the Exchange Act) that is incorporated by reference
in the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrants pursuant to the provisions set forth in response to Item 15, or
otherwise, the registrants have been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act 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 registrants will, unless
in the opinion of their 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
Securities Act and will be governed by the final adjudication of such issue.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Norwalk, State of Connecticut on January 16, 1998.
EMCOR GROUP, INC.
By /s/ Frank T. MacInnis
-----------------------------------------------------
Frank T. MacInnis, Chairman of the Board of Directors
and Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
Frank T. MacInnis, Sheldon I. Cammaker, Leicle E. Chesser and Thomas D.
Cunningham, and each of them, the true and lawful attorneys-in-fact and agents
of the undersigned, with full power of substitution and resubstitution, for and
in the name, place and stead of the undersigned, in any and all capacities, to
sign any and all amendments (including post-effective amendments) to this
Registration Statement, including any filings pursuant to rule 462(b) under the
Securities Act of 1933, as amended, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, or their or his
substitute, or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
(1) Principal Executive Officer:
/s/ Frank T. MacInnis Chairman of the Board of Directors and Chief January 16, 1998
- ----------------------------------------------------- Executive Officer
Frank T. MacInnis
(2) Principal Financial Officer:
/s/ Leicle E. Chesser Executive Vice President and Chief Financial January 16, 1998
- ----------------------------------------------------- Officer
Leicle E. Chesser
(3) Principal Accounting Officer:
/s/ Mark A. Pompa Vice President and Controller January 16, 1998
- -----------------------------------------------------
Mark A. Pompa
(4) Directors:
/s/ Stephen W. Bershad Director January 16, 1998
- -----------------------------------------------------
Stephen W. Bershad
/s/ David A.B. Brown Director January 16, 1998
- -----------------------------------------------------
David A.B. Brown
</TABLE>
II-3
<PAGE>
<TABLE>
<S> <C> <C>
/s/ Albert Fried, Jr.
- -----------------------------------------------------
Albert Fried, Jr. Director January, 16, 1998
/s/ Malcolm T. Hopkins
- -----------------------------------------------------
Malcolm T. Hopkins Director January 16, 1998
/s/ Kevin C. Toner
- -----------------------------------------------------
Kevin C. Toner Director January 16, 1998
</TABLE>
II-4
<PAGE>
INDEX TO EXHIBITS
<TABLE>
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Exhibit
Number Description of Exhibits
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*1.1 - Form of Underwriting Agreement (Debt Securities and Warrants to Purchase Debt Securities).
*1.2 - Form of Underwriting Agreement (Equity Securities and Warrants to Purchase Equity Securities).
*4.1 - Form of Debt Securities.
*4.2 - Form of Senior Debt Indenture between EMCOR and , as Trustee.
*4.3 - Form of Senior Subordinated Debt Indenture between EMCOR and , as Trustee.
*4.4 - Form of Subordinated Debt Indenture between EMCOR and , as Trustee.
*4.5 - Form of Warrant Agreement for Preferred Stock and Common Stock (including form of Warrant
Certificate).
*4.6 - Form of Warrant Agreement for Debt Securities (including form of Warrant Certificate).
**5.1 - Opinion of Simpson Thacher & Bartlett.
**12.1 - Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Dividends.
**23.1 - Consent of Arthur Andersen LLP.
**23.2 - Consent of Deloitte & Touche LLP.
**23.3 - Consent of Simpson Thacher & Bartlett (included in Exhibit 5.1).
**24.1 - Powers of Attorney of Board of Directors of EMCOR (included on signature page).
*25.1 - Statement of eligibility of as Trustee under the Senior Debt Indenture.
*25.2 - Statement of eligibility of as Trustee under the Subordinated Debt Indenture.
*25.3 - Statement of eligibility of as Trustee under the Senior Subordinated Debt Indenture.
</TABLE>
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* To be filed by amendment.
** Filed herewith.
<PAGE>
Exhibit 5.1
January 16, 1998
EMCOR Group, Inc.
101 Merritt Seven Corporate Park
Norwalk, Connecticut 06851
Ladies and Gentlemen:
This opinion is delivered in connection with the Registration Statement
on Form S-3 (the "Registration Statement") filed with the Securities and
Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended (the "Act"), by EMCOR Group, Inc., a Delaware corporation ("EMCOR"),
which Registration Statement relates to preferred stock, par value $.10 per
share ("Preferred Stock"), common stock, par value $.01 per share ("Common
Stock"), unsecured debt securities consisting of notes, debentures or other
evidences of indebtedness ("Debt Securities") which may be senior, senior
subordinated or subordinated and warrants to purchase Preferred Stock, Common
Stock or Debt Securities ("Warrants"), to be issued and sold by EMCOR from time
to time pursuant to Rule 415 under the Act for an aggregate initial offering
price not to exceed $150 million together with any additional such securities
that may be sold pursuant to a Registration Statement filed under Rule 462 of
the Act.
<PAGE>
EMCOR Group, Inc. -2- January 16, 1998
We have examined (i) the Registration Statement, (ii) the form of
Senior Indenture to be executed by EMCOR and the Trustee (the "Senior Debt
Indenture"), (iii) the form of Senior Subordinated Indenture to be executed by
EMCOR and the Trustee (the "Senior Subordinated Debt Indenture"), (iv) the form
of Subordinated Indenture to be executed by EMCOR and the Trustee (the
"Subordinated Debt Indenture") and (v) the form of Warrant Agreement to be
executed by EMCOR and the Warrant Agent (the "Warrant Agreement"). In addition,
we have examined, and have relied as to matters of fact upon originals or
copies, certified or otherwise identified to our satisfaction, of such corporate
records, agreements, documents and other instruments and such certificates or
comparable documents of public officials and of officers and representatives of
EMCOR, and have made such other and further investigations as we have deemed
relevant and necessary as a basis for the opinions hereinafter set forth.
In such examination, we have assumed the genuineness of all signatures,
the legal capacity of natural persons, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such latter documents.
We have also assumed that (i) the Registration Statement, and any
amendments thereto (including post-effective amendments) and any additional
Registration Statement filed under Rule 462, will have become effective under
the Act, (ii) a prospectus supplement (a "Prospectus Supplement") will have been
prepared and
<PAGE>
EMCOR Group, Inc. -3- January 16, 1998
filed with the Commission describing the Preferred Stock, Common Stock, Debt
Securities and/or Warrants offered thereby, (iii) all Preferred Stock, Common
Stock, Debt Securities and Warrants issued will be issued and sold in compliance
with applicable federal and state securities laws and solely in the manner
stated in the Registration Statement and the appropriate Prospectus Supplement
and (iv) a definitive purchase, underwriting or similar agreement with respect
to any Preferred Stock, Common Stock, Debt Securities or Warrants offered will
have been duly authorized and validly executed and delivered by EMCOR and the
other parties thereto.
Based upon the foregoing, and subject to the qualifications and
limitations stated herein, we are of the opinion that:
1. With respect to Preferred Stock, when (i) the shares of
Preferred Stock to be issued have been duly authorized by the
shareholders of EMCOR, (ii) the Board of Directors of EMCOR (the "EMCOR
Board") has taken all necessary corporate action to approve the
issuance and terms of such Preferred Stock, the terms of the offering
thereof and related matters and (iii) such shares of Preferred Stock
have been issued and delivered in accordance with the provisions of the
applicable definitive purchase, underwriting or similar agreement
approved by the EMCOR Board, upon payment of the consideration therefor
provided for therein, such shares of Preferred Stock will be legally
issued, fully paid and nonassessable.
2. With respect to Common Stock, when (i) the shares of Common
Stock to be issued have been duly authorized by the shareholders of
EMCOR, (ii) the EMCOR Board has taken all necessary corporate action to
approve the issuance and terms of such Common Stock, the terms of the
offering thereof and related matters and (iii) such shares of Common
Stock have been issued and delivered in accordance with the provisions
of the applicable definitive purchase, underwriting or similar
agreement approved by the EMCOR Board, upon payment of the
consideration therefor provided for therein, such shares of Common
Stock will be legally issued, fully paid and nonassessable.
<PAGE>
EMCOR Group, Inc. -4- January 16, 1998
3. With respect to Debt Securities to be issued under the
Senior Debt Indenture, when (i) the Senior Debt Indenture has been duly
authorized and validly executed and delivered by EMCOR to the trustee,
(ii) the Senior Debt Indenture has been duly qualified under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), (iii)
the EMCOR Board has taken all necessary corporate action to approve the
issuance and terms of such Debt Securities, the terms of the offering
thereof and related matters and (iv) such Debt Securities have been
duly executed, authenticated, issued and delivered in accordance with
the provisions of the Senior Debt Indenture and the applicable
definitive purchase, underwriting or similar agreement approved by the
EMCOR Board, upon payment of the consideration therefor provided for
therein, such Debt Securities will be legally issued by EMCOR and will
constitute valid and legally binding obligations of EMCOR, enforceable
against EMCOR in accordance with their terms.
4. With respect to Debt Securities to be issued under the
Senior Subordinated Debt Indenture, when (i) the Senior Subordinated
Debt Indenture has been duly authorized and validly executed and
delivered by EMCOR to the trustee, (ii) the Senior Subordinated Debt
Indenture has been duly qualified under the Trust Indenture Act, (iii)
the EMCOR Board has taken all necessary corporate action to approve the
issuance and terms of such Debt Securities, the terms of the offering
thereof and related matters and (iv) such Debt Securities have been
duly executed, authenticated, issued and delivered in accordance with
the provisions of the Senior Subordinated Debt Indenture and the
applicable definitive purchase, underwriting or similar agreement
approved by the EMCOR Board, upon payment of the consideration therefor
provided for therein, such Debt Securities will be legally issued by
EMCOR and will constitute valid and legally binding obligations of
EMCOR, enforceable against EMCOR in accordance with their terms.
5. With respect to Debt Securities to be issued under the
Subordinated Debt Indenture, when (i) the Subordinated Debt Indenture
has been duly authorized and validly executed and delivered by EMCOR to
the trustee, (ii) the Subordinated Debt Indenture has been duly
qualified under the Trust Indenture Act, (iii) the EMCOR Board has
taken all necessary corporate action to approve the issuance and terms
of such Debt Securities, the terms of the offering thereof and related
matters and (iv) such Debt Securities have been duly executed,
authenticated, issued and delivered in accordance with the provisions
of the Subordinated Debt Indenture and the applicable definitive
purchase, underwriting or similar agreement approved by the EMCOR
Board, upon payment of the consideration therefor provided for therein,
such Debt Securities will constitute valid and legally binding
obligations of EMCOR, enforceable against EMCOR in accordance with
their terms.
<PAGE>
EMCOR Group, Inc. -5- January 16, 1998
6. With respect to the Warrants, when (i) the EMCOR Board has
taken all necessary corporate action to approve the creation of and
issuance and terms of the Warrants, the terms of the offering thereof
and related matters, (ii) the Warrant Agreement relating to the
Warrants (the "Warrant Agreement") has been duly authorized and validly
executed and delivered by EMCOR and the Warrant Agent appointed by
EMCOR and (iii) the Warrants or certificates representing the Warrants
have been duly executed, countersigned, registered and delivered in
accordance with the Warrant Agreement and the applicable definitive
purchase, underwriting or similar agreement approved by the EMCOR
Board, upon payment of the consideration therefor provided for therein,
the Warrants will be duly authorized and validly issued by EMCOR.
Our opinions set forth in paragraphs 3, 4 and 5 above are subject to
the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing.
We are members of the Bar of the State of New York and we do not
express any opinion herein concerning any law other than the law of the State of
New York and the Delaware General Corporation Law.
We hereby consent to the filing of this opinion of counsel as Exhibit
5.1 to the Registration Statement and to the use of our name under the caption
"Legal Matters" in the Prospectus forming a part of the Registration Statement.
Very truly yours,
/s/ Simpson Thacher & Bartlett
SIMPSON THACHER & BARTLETT
<PAGE>
Exhibit 12.1
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EMCOR GROUP, INC.
Computation of Ratio of Earnings to Fixed Charges
(Amounts in Thousands)
Nine Months
Ended
September 30, Years Ended December 31,
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1997 1996 1996 1995 | 1994(a) 1993 1992
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<S> <C> <C> <C> <C> <C> <C> <C>
Earnings: |
Income (loss) from continuing |
operations before income taxes, |
extraordinary items and |
cumulative effect of accounting |
changes....................... $9,134 $13,121 $16,968 $(9,853) | $(119,266) $(114,691) $(355,871)
|
Adjustments: |
Fixed charges, as below....... 13,019 15,106 18,346 21,089 | 8,221 55,724 50,945
Equity in income of less-than- |
50-percent-owned entities, |
adjusted to a pre-tax |
equivalent basis....... (1,236) (676) (1,067) (12) | -- (40) (54)
Losses of less-than-50-percent- |
owned entities......... 337 239 392 398 | 123 -- --
|
|
------- ------- ------- ------- | --------- -------- ---------
Earnings as Adjusted $21,254 $27,790 $34,639 $11,622 | $(110,923) $(59,007) $(304,980)
======= ======= ======= ======= | ========= ======== =========
|
Fixed Charges: |
Interest on indebtedness, |
expensed or capitalized 9,005 11,520 13,724 16,646 | 3,837 51,075 45,894
Amortization of debt discount |
and expense and premium on |
indebtedness, expensed or |
capitalized............ 989 857 1,166 807 | 30 -- --
Portion of rent expense |
representative of the |
interest factor........ 3,025 2,729 3,456 3,636 | 4,354 4,649 5,051
------- ------- ------- ------- | ------- ------- -------
|
Total Fixed Charges $13,019 $15,106 $18,346 $21,082 | $8,221 $55,724 $50,945
======= ======= ======= ======= | ======= ======= =======
|
Ratio of Earnings to Fixed Charges 1.63 1.84 1.89 (b) | (c) (d) (e)
======= ======= ======= ======= | ======= ======= =======
</TABLE>
(a) As of December 31, 1994, in accordance with the American Institute of
Certified Public Accountants Statement of Position 90-7, "Financial
Reporting by Entities in Reorganization under the Bankruptcy Code" ("SOP
90-7"), the Company adopted Fresh-Start Accounting. As a result of the
implementation of Fresh-Start Accounting, the consolidated financial
statements of the Company for periods subsequent to consummation of the
Company's reorganization pursuant to its Third Amended Joint Plan of
Reorganization (the "Plan of Reorganization"), which became effective in
December 1994, are not comparable to the Company's consolidated financial
statements for prior periods. Accordingly, a black line has been used to
separate the Computation of Earnings to Fixed Charges of the Company after
the consummation of the Plan of Reorganization from those of the Company
prior to the consummation of the Plan of Reorganization.
(b) No ratio is presented for 1995 as the earnings for that year were $9.5
million less than the fixed charges.
(c) No ratio is presented for 1994 as the earnings for that year were $119.1
million less than the fixed charges.
(d) No ratio is presented for 1993 as the earnings for that year were $114.7
million less than the fixed charges.
(e) No ratio is presented for 1992 as the earnings for that year were $355.9
million less than the fixed charges.
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated February 28, 1997
included in EMCOR Group, Inc.'s Form 10-K for the year ended December 31, 1996
and to all references to our Firm included in this registration statement.
/s/ Arthur Andersen LLP
Stamford, Connecticut
January 12, 1998
<PAGE>
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
EMCOR Group, Inc. on Form S-3 of our report dated March 17, 1995, appearing in
the Annual Report on Form 10-K of EMCOR Group, Inc. for the year ended December
31, 1996 and to the reference to us under the heading "Experts" in the
Prospectus, which is part of this Registration Statement.
/s/ DELOITTE & TOUCHE LLP
New York, New York
January 12, 1998
