FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Quarterly Report Under Section 13 or
15(d) of the Securities Exchange Act of 1934
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[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
AND EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND
EXCHANGE ACT OF 1934
For the transition period from __________ to __________
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Commission file number 0-2315
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 06851-1060
----------------------
Norwalk, Connecticut (Zip Code)
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(Address of principal executive
offices)
(203) 849-7800
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(Registrant's telephone number)
N/A
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(Former name,former address and former fiscal year,if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities and Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
filing requirements for the past 90 days. Yes X No __
Applicable Only To Issuers Involved In Bankruptcy Proceedings During
The Previous Five Years
--------------------------------------------------------------------
Indicate by check mark whether the registrant has filed all documents
required to be filed by Section 12, 13 or 15(d) of the Securities and Exchange
Act of 1934, subsequent to the distribution of securities under a plan confirmed
by a court. Yes X No __
Applicable Only To Corporate Issuers
------------------------------------
Number of shares of Common Stock outstanding as of the close of business on
May 1, 1998: 10,722,829 shares.
<PAGE>
EMCOR GROUP, INC.
INDEX
Page No.
PART I - Financial Information
Item 1 Financial Statements
Condensed consolidated balance sheets -
as of March 31, 1998 and December 31, 1997 1
Condensed consolidated statements of operations -
three months ended March 31, 1998 and 1997 3
Condensed consolidated statements of cash flows -
three months ended March 31, 1998 and 1997 4
Condensed consolidated statement of stockholders'
equity and comprehensive income (loss) -
three months ended March 31, 1998 and 1997 5
Notes to condensed consolidated financial statements 6
Item 2 Management's discussion and analysis of financial condition and
results of operations 11
PART II - Other Information
Item 1 Legal Proceedings 13
Item 4 Submission of Matters to a Vote of Security Holders 13
Item 6 Exhibits and Reports on Form 8-K 13
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1 FINANCIAL STATEMENTS
EMCOR Group, Inc. and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
- ------------------------------------------------------------
March 31, December 31,
1998 1997
(Unaudited)
- ------------------------------------------------------------
ASSETS
Current Assets:
Cash and cash equivalents $123,888 $49,376
Accounts receivable, net 494,628 480,997
Costs and estimated earnings in
excess of billings on
uncompletedcontracts 75,825 73,974
Inventories 6,735 7,363
Prepaid expenses and other 9,999 10,951
-----------------------------
Total Current Assets 711,075 622,661
-----------------------------
Investments, Notes and Other
Long-Term Receivables 6,726 5,901
Property, Plant and Equipment, Net 27,568 27,164
Other Assets 7,248 4,928
-----------------------------
Total Assets $752,617 $660,654
=============================
See notes to condensed consolidated financial statements.
<PAGE>
EMCOR Group, Inc. and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share Amounts)
- ------------------------------------------------------------
March 31, December
1998 31,
(Unaudited) 1997
- ------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Borrowings under working capital $-- $9,497
credit lines
Current maturities of long-term
debt 6,339 927
Accounts payable 237,257 239,117
Billings in excess of costs and
estimated earnings on
uncompleted contracts 127,352 112,833
Accrued payroll and benefits 58,809 49,058
Other accrued expenses and
liabilities 47,069 45,163
-----------------------
Total Current Liabilities 476,826 456,595
-----------------------
Long-Term Debt 117,091 63,212
Other Long-Term Obligations 46,733 45,524
Stockholders' Equity:
Common stock, $.01 par value,
30,000,000 shares authorized,
10,700,493 shares and 9,590,827
shares issued and outstanding
or issuable at March 31, 1998
and December 31, 1997,
respectively 107 96
Warrants 2,154 2,154
Capital surplus 107,473 87,107
Accumulated Other Comprehensive
Income 47 (195)
Retained earnings 2,186 6,161
-----------------------
Total Stockholders' Equity 111,967 95,323
-----------------------
Total Liabilities and Stockholders'
Equity $752,617 $660,654
=======================
See notes to condensed consolidated financial statements.
<PAGE>
EMCOR Group, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Amounts) (Unaudited)
- ------------------------------------------------------------
Three months ended March 31, 1998 1997
- ------------------------------------------------------------
Revenues $493,923 $433,770
Costs and Expenses:
Cost of sales 449,683 394,705
Selling, general and
administrative 40,305 35,623
-------------------------
489,988 430,328
-------------------------
Operating Income 3,935 3,442
Interest Expense, Net 2,406 3,008
-------------------------
Income Before Income Taxes 1,529 434
Provision For Income Taxes 727 178
-------------------------
Income Before Extraordinary Item 802 256
Extraordinary Item - Loss on
Early Extinguishment of Debt,
Net of Income Taxes (4,777) --
-------------------------
Net (Loss) Income $(3,975) $256
=========================
Per Share Information:
Basic Earnings (Loss) Per Share:
Income Before Extraordinary Item $0.08 $0.03
Extraordinary Item - Loss on
Early Extinguishment of Debt,
Net of Income Taxes (0.49) --
-------------------------
Basic (Loss) Earnings Per Share $(0.41) $0.03
=========================
Diluted Earnings (Loss) Per Share:
Income Before Extraordinary Item $0.08 $0.03
Extraordinary Item - Loss on
Early Extinguishment of Debt,
Net of Income Taxes (0.49) --
-------------------------
Diluted (Loss) Earnings Per Share $(0.41) $0.03
=========================
See notes to condensed consolidated financial statements.
<PAGE>
EMCOR Group, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands) (Unaudited)
- ---------------------------------------------------------------
Three months ended March 31, 1998 1997
- ---------------------------------------------------------------
CASH FLOWS FROM OPERATIONS:
Net income $(3,975) $256
Extraordinary Item - Loss on Early
Extinguishment of Debt,
Net of Income Taxes 4,777 --
Non-cash expenses 3,322 2,363
Changes in operating assets and
liabilities 15,430 4,216
--------------------
NET CASH PROVIDED BY OPERATIONS 19,554 6,835
--------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of Convertible Subordinated
Notes 115,000 --
Net proceeds from sale of common stock 22,485 --
Debt issuance costs (4,074) --
Payment of Series C Notes (61,854) --
Premiums paid on early extinguishment
of debt (2,437) --
Payment of working capital credit
lines (9,497) --
Borrowings under working capital
credit lines -- 5,100
Payments of long-term debt and
capital lease obligation (150) (62)
Exercise of stock options 56 --
--------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 59,529 5,038
--------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and
equipment, net (2,348) (2,317)
Proceeds from sale of businesses and
other assets -- 14
Acquisition of businesses (1,398) --
Decrease in investments, notes and
other long-term receivables (825) 797
--------------------
NET CASH USED IN INVESTING ACTIVITIES (4,571) (1,506)
--------------------
INCREASE IN CASH AND CASH EQUIVALENTS 74,512 10,367
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD 49,376 50,705
--------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $123,888 $61,072
====================
SUPPLEMENTAL CASH FLOW INFORMATION
Cash Paid For:
Interest $1,697 $2,074
Income Taxes $159 $15
See notes to condensed consolidated financial statements.
<PAGE>
EMCOR Group, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY AND COMPREHENSIVE
INCOME (LOSS)
(In Thousands) (Unaudited)
<TABLE>
- ------------------------------------------------------------------------------------------------------------
Accumulated Retained
Other Earnings/
Common Capital Comprehensive Acquisition Comprehensive
Total Stock Warrants Surplus Income (1) Deficit Income (Loss)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, $95,323 $96 $2,154 $87,107 $(195) $6,161
January 1, 1998
Comprehensive
income(loss):
Net loss (3,975) -- -- -- -- (3,975) $(3,975)
Foreign currentcy
translation
adjustments 242 -- -- -- 242 -- 242
----------
Comprehensive loss -- -- -- -- -- -- $(3,733)
==========
NOL utilization 551 -- -- 551 -- --
Issuance of
common stock 22,485 11 -- 22,474 -- --
Tax effect of
extraordinary item (2,715) -- -- (2,715) -- --
Common stock issued
under stock
option plans 56 -- -- 56 -- --
-------- ------- ------ ------ ----------- -------
Balance, March
31, 1998 $111,967 $107 $2,154 $107,473 $47 $2,186
======== ======= ====== ======== =========== =======
Balance,
January 1, 1997 $83,883 $95 $2,154 $81,672 $1,378 $(1,416)
Comprehensive income (loss)
- ---------------------------
Net income 256 -- -- -- -- 256 $256
Foreign
currency
translation
adjustments (316) -- -- -- (316) -- (316)
----------
Comprehensive income -- -- -- -- -- -- $(60)
==========
NOL utilization 148 -- -- 148 -- --
------ ------- ------ -------- ----------- --------
Balance, March
31, 1997 $83,971 $95 $2,154 $81,820 $1,062 $(1,160)
======== ======= ====== ======= =========== =========
</TABLE>
(1) Represents foreign currency translation adjustments.
See notes to condensed consolidated financial statements.
<PAGE>
EMCOR Group, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
NOTE A Nature Of Operations
EMCOR Group, Inc. ("EMCOR" or the "Company") is a multinational corporation
involved in mechanical and electrical construction services and facilities
services. EMCOR's subsidiaries specialize 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. EMCOR's subsidiaries provide
mechanical and electrical construction and facilities 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 for construction managers, general contractors,
systems suppliers and other subcontractors. Mechanical and electrical
construction services are principally either large installation projects, with
contracts generally in the multi-million dollar range; smaller system
installation projects involving fit-out, renovation and retrofit work; and
maintenance and service. In addition, certain of its subsidiaries operate and
maintain mechanical and/or electrical systems for customers under contracts and
provide other services commonly referred to as facilities services including the
management of facilities and the provision of support services to customers at
the customer's facilities. 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
United States, Canada and the United Kingdom and through its joint ventures in
the United Arab Emirates, Saudi Arabia, South Africa, Hong Kong and Macau.
NOTE B Basis of Presentation
The accompanying condensed consolidated financial statements have been prepared
by the Company, without audit, pursuant to the interim period reporting
requirements of Form 10-Q. Consequently, certain information and note
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted.
Readers of this report should refer to the consolidated financial statements and
the notes thereto included in the Company's latest Annual Report on Form 10-K
filed with the Securities and Exchange Commission.
In the opinion of the Company, the accompanying unaudited condensed consolidated
financial statements contain all adjustments (consisting only of a normal
recurring nature) necessary to present fairly the financial position of the
Company and the results of its operations. The results of operations for the
three month period ended March 31, 1998 are not necessarily indicative of the
results to be expected for the year ending December 31, 1998.
<PAGE>
NOTE C Long-Term Debt
Long-Term Debt in the accompanying condensed consolidated balance sheets
consists of the following amounts at March 31, 1998 and December 31, 1997 (in
thousands):
March 31, December
1998 31,
1997
------------ ------------
Convertible Subordinated Notes, at 5.75%, due
2005 $115,000 $--
Series C Notes, outstanding face value of
approximately $61.9 million at
December 31, 1997, at 11.0%, discounted
to a 14.0% effective rate, due 2001 -- 56,290
Other 8,430 7,849
------------ ------------
123,430 64,139
Less current maturities (6,339) (927)
------------ ------------
$117,091 $63,212
============ ============
On March 18, 1998, the Company called for the redemption of approximately $61.9
million principal amount of Series C Notes and irrevocably funded such amounts
with the trustee of the Series C Notes. In accordance with the Indenture
governing the Series C Notes, the redemption price of the Series C Notes was
104% of the principal amount redeemed. Accordingly, the Company recorded an
extraordinary loss related to the early retirement of debt. The extraordinary
loss consisted primarily of the write-off of the associated debt discount plus
the redemption premium and costs associated with the redemption, net of income
tax benefits.
The Company has given notification that it will prepay the Supplemental SellCo
Note during May 1998 and, accordingly, the Supplemental SellCo Note is included
in the accompanying condensed consolidated balance sheet as of March 31, 1998 as
a current liability under the caption "Current maturities of long-term debt."
On March 18, 1998, the Company sold, pursuant to an underwritten public
offering, $100.0 million principal amount of 5.75% Convertible Subordinated
Notes (the "Notes"). Interest on the Notes is payable semi-annually commencing
October 1, 1998. The Notes are unsecured indebtedness of the Company and are
convertible into Common Stock of the Company at a conversion price of $27.34 per
share at any time.
On March 24, 1998, the underwriter of the Notes offering exercised in full its
over-allotment option to purchase an additional $15.0 million of Notes and
accordingly an additional $15.0 million principal amount of such notes were
issued.
NOTE D Income Taxes
The Company files a consolidated federal income tax return including all U.S.
subsidiaries. At March 31, 1998, the Company had net operating loss
carryforwards ("NOLs") for U.S. income tax purposes of approximately $170.0
million, which expire in the years 2007 through 2010. The NOLs are subject to
review by the Internal Revenue Service. Future changes in ownership of the
Company, as defined by Section 382 of the Internal Revenue Code, could limit the
amount of NOLs available for use in any one year.
As a result of the adoption of Fresh-Start Accounting, the tax benefit of any
net operating loss carryforwards or net deductible temporary differences which
existed as of the date of the Company's emergence from Chapter 11 in December
1994 will result in a charge to the tax provision (provision in lieu of income
taxes) and be allocated to capital surplus.
<PAGE>
The Company has provided a valuation allowance as of March 31, 1998 for the full
amount of the tax benefit of its remaining NOLs and other deferred tax assets.
Income tax expense recorded for the three months ended March 31, 1998 and 1997
represent a provision primarily for federal, foreign and state and local income
taxes. The Company's utilization of NOLs and other deferred tax assets for the
three months ended March 31, 1998 and 1997 of approximately $0.6 million and
$0.1 million, respectively, have been applied to capital surplus.
NOTE E Legal 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. In the action, which was
instituted in 1988, Computran, a participant in, and a subcontractor to, the
joint venture alleges that Dynalectric wrongfully terminated its subcontract,
fraudulently diverted funds due it, misappropriated its trade secrets and
proprietary information, fraudulently induced it to enter into the joint venture
and conspired with other defendants to commit certain acts in violation of the
New Jersey Racketeering Influence and Corrupt Organization Act. Dynalectric
believes that Computran's claims are without merit and intends to defend this
matter vigorously. Dynalectric has filed counterclaims against Computran. As a
result of a motion made by Dynalectric, the Superior Court of New Jersey ordered
during 1997 that the matters in dispute between Dynalectric and Computran be
resolved by binding arbitration in accordance with an original agreement between
the parties.
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 did 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. 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 judgements 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.
In addition to the above, the Company is involved in other legal proceedings and
claims, asserted by and against the Company, which have arisen in the ordinary
course of business.
The Company believes it has a number of valid defenses to these actions and the
Company intends to vigorously defend or assert these claims and does not believe
that a significant liability will result. However, the Company cannot predict
the outcome thereof or the impact that an adverse result of the matters
discussed above will have upon the Company's financial position or results of
operations.
NOTE F Earnings Per Share
Effective December 31, 1997 the Company adopted Statement of Financial
Accounting Standards No. 128 ("SFAS No. 128" or the "Statement"), "Earnings Per
Share" ("EPS"), which established standards for computing and presenting EPS.
The Statement replaced the presentation of Primary EPS with a presentation of
Basic EPS, as defined, and Fully Diluted EPS with Diluted EPS, as defined.
<PAGE>
The following tables summarize the Company's calculation of Basic EPS and
Diluted EPS for the three month periods ended March 31, 1998 and 1997:
1998
-----------
-----------
Income Shares Per Share
(Numerator) (Denominator) Amount
----------- -------------------------------------
Basic EPS
Income before extraordinary
item available to common
stockholders $802,000 9,765,012 $0.08
===========
Effect of Dilutive Securities:
Options -- 363,007
Warrants -- 253,071
----------- -----------
Diluted EPS $802,000 10,381,090 $0.08
=========== =========== ===========
1997
-----------
Income Shares Per Share
(Numerator) (Denominator) Amount
---------- ----------- -------------
Basic EPS
Income before extraordinary
item available to common
stockholders $256,000 9,514,636 $0.03
===========
Effect of Dilutive Securities:
Options -- 427,420
Warrants -- 104,931
---------- -----------
Diluted EPS $256,000 10,046,987 $0.03
========== =========== ===========
For the three month period ended March 31, 1998, the "if converted" amount of
Notes and related after-tax interest expense were excluded from the denominator
and numerator, respectively, in the calculation of Diluted EPS as the effect
would be antidilutive. For the three months ended March 31, 1998, 5,000 options
were excluded from the denominator in the calculation of Diluted EPS as the
effect would be antidilutive.
NOTE G Common Stock Issuance
On March 18, 1998 the Company sold, pursuant to an underwritten public offering,
1,100,000 of its Common Stock at a price of $21.875 per share. Proceeds received
from the sale of the Common Stock along with proceeds received from the sale of
the Notes were used to redeem the Series C Notes and repay outstanding
borrowings under the Company's working capital credit lines and will be used to
prepay the Supplemental SellCo Note and accrued interest thereon, for possible
acquisitions and for other general corporate purposes.
<PAGE>
NOTE H Other
The Company has adopted Statement of Financial Accounting Standards No. 130,
"Reporting Comprehensive Income" ("SFAS No. 130"), which requires companies to
report all changes in equity during a period, except those resulting from
investment by owners and distribution to owners, in a financial statement for
the period in which they are recognized. The Company has chosen to disclose
Comprehensive Income, which encompasses net income and foreign currency
translation adjustments, in the condensed consolidated statements of
stockholders' equity and comprehensive income (loss). Prior year financial
information has been restated to conform with the reporting requirements of SFAS
No. 130.
<PAGE>
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Results of Operations
Revenues for the first quarter of 1998 were $493.9 million compared to $433.8
million in the first quarter of 1997. In the first quarter of 1998, the Company
had a net loss of $4.0 million, or a $0.41 loss per basic share and diluted
share, compared to net income of $0.3 million, or $0.03 per basic share and
diluted share, in the first quarter of 1997. The net loss for the first quarter
of 1998 was due primarily to an after-tax charge associated with the early
retirement of approximately $61.9 million of the Company's Series C, which is
reflected in the accompanying condensed consolidated statements of operations
under the caption "Extraordinary Item - Loss on Early Extinguishment of Debt,
Net of Income Taxes."
The Company generated operating income of $3.9 million for the three months
ended March 31, 1998 compared to operating income of $3.4 million in the same
period of the prior year. The $0.5 million improvement in operating income for
the three months ended March 31, 1998 was principally attributable to the
increase in operating volume in the first quarter of 1998 as compared to the
same period in 1997.
SG&A for the quarters ended March 31, 1998 and 1997 were $40.3 million, or 8.2%
of revenues, and $35.6 million, or 8.2% of revenues, respectively. The dollar
increase in SG&A for the three month period ended March 31, 1998 compared to the
same period in 1997 is attributable to the increase in operating volume.
On March 18, 1998, the Company called for the redemption of approximately $61.9
million principal amount of Series C Notes and irrevocably funded such amounts
with the trustee of the SellCo Notes. In accordance with the Indenture governing
the Series C Notes, the redemption price of the Series C Notes was 104% of the
principal amount redeemed. Accordingly, the Company recorded an extraordinary
loss related to the early retirement of debt. The extraordinary loss consisted
primarily of the write-off of the associated debt discount plus the redemption
premium and costs associated with the redemption, net of income tax benefits.
The Company has given notification that it will prepay the Supplemental SellCo
Note during May 1998 and, accordingly, the Supplemental SellCo Note is included
in the accompanying condensed consolidated balance sheet as of March 31, 1998 as
a current liability under the caption "Current maturities of long-term debt."
The Company's backlog was $1,120.7 million at March 31, 1998 and $996.4 million
at December 31, 1997. Between December 31, 1997 and March 31, 1998, the
Company's backlog in Canada increased by $0.3 million, its backlog in the United
Kingdom increased by $43.7 million and its backlog in the United States
increased by $80.3 million.
Liquidity and Capital Resources
On March 18, 1998, the Company sold pursuant to underwritten public offerings,
$100.0 million principal amount of 5.75% Convertible Subordinated Notes (the
"Notes") and 1,100,000 shares of its Common Stock. Interest on the Notes is
payable semi-annually commencing October 1, 1998. The Notes are unsecured
indebtedness of the Company and are convertible into Common Stock of the Company
at a conversion price of $27.34 per share at any time.
On March 24, 1998, the underwriter of the Notes offering exercised in full its
over-allotment option to purchase an additional $15.0 million of Notes and
accordingly an additional $15.0 million principal amount of such notes were
issued.
Proceeds received from the sale of the Notes along with proceeds from the sale
of the Common Stock were used to redeem the Series C Notes and repay outstanding
borrowings under the Company's working capital credit lines and will be used to
prepay the Supplemental SellCo Note and accrued interest thereon, for possible
acquisitions and for other general corporate purposes.
The Company's consolidated cash balance increased by $74.5 million from $49.4
million at December 31, 1997 to $123.9 million at March 31, 1998, primarily as a
result of the net proceeds received from the sale of Common Stock and Notes
offset by the repayment of debt noted above. The March 31, 1998 cash balance
included approximately $5.8 million in a foreign subsidiary's bank account which
is available only to support its operations. The Company generated positive
operating cash flow for the three months ended March 31, 1998 due to
improvements in working capital which were used, along with proceeds from the
sale of Common Stock and Notes, to fund capital expenditures and redeem
approximately $61.9 million of Series C Notes.
As of March 31, 1998 the Company's total borrowing capacity under its revolving
credit facility was $100.0 million. The Company had approximately $27.2 million
of letters of credit outstanding as of that date. There were no revolving loans
outstanding as of March 31, 1998.
This Quarterly Report on Form 10-Q contains certain forward-looking statements
within the meaning of the Private Securities Reform Act of 1995. These
forward-looking statements involve risks and uncertainties, that could cause
actual results to differ materially from those in any such forward-looking
statements. Such factors include, but are not limited to, adverse changes in
general economic conditions, including changes in the specific markets for the
Company's services, adverse business conditions, decreased or lack of growth in
the mechanical and electrical construction and facilities services industries,
increased competition, pricing pressures, risks associated with foreign
operations and other factors.
<PAGE>
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
The information in Note E to the Company's March 31, 1998 Notes to Condensed
Consolidated Financial Statements (unaudited) regarding legal proceedings is
hereby incorporated herein by reference thereto.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) On February 12, 1998 the Company held a special meeting of the
stockholders.
(b) At the special meeting the stockholders voted on a proposal to amend the
Restated Certificate of Incorporation that would amend Article Fourth
thereof to increase the number of authorized shares of Common Stock from
13,700,000 shares to 30,000,000 shares. 7,736,744 shares were voted in
favor of adoption of the amendment, 373,892 shares were voted against
adoption of the amendment and no shares abstained from voting thereon.
There were no broker non-votes.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit 4(a) Seventh Amendment dated as of April 14, 1998 to Credit
Agreement dated as of June 19, 1996 among EMCOR Group,
Inc., certain of its subsidiaries and Harris Trust and
Savings Bank, individually and as agent, and the lenders,
which are or become parties thereto.
Exhibit 4(b) Subordinated Indenture dated as of March 18, 1998
("Indenture") between EMCOR Group, Inc.
and State Street Bank and Trust Company, as Trustee.
Exhibit 4(c) First Supplemental Indenture dated as of March 18, 1998,
to Indenture between EMCOR Group, Inc. and State Street
Bank and Trust Company, as Trustee.
Exhibit 10(a) Employment Agreement made as of January 1, 1998 between
Frank T. MacInnis and EMCOR Group, Inc.
Exhibit 10(b) Employment Agreement made as of January 1, 1998 between
Jeffrey M. Levy and EMCOR Group, Inc.
Exhibit 10(c) Employment Agreement made as of January 1, 1998 between
Leicle E. Chesser and EMCOR Group, Inc.
Exhibit 10(d) Employment Agreement made as of January 1, 1998 between
Thomas D. Cunningham and EMCOR Group, Inc.
Exhibit 10(e) Employment Agreement made as of January 1, 1998 between
R. Kevin Matz and EMCOR Group, Inc.
Exhibit 10(f) Employment Agreement made as of January 1, 1998 between
Mark A. Pompa and EMCOR Group, Inc.
Exhibit 10(g) Letter Agreement made as of January 1, 1998 between
Sheldon I. Cammaker and EMCOR Group, Inc.
Exhibit No. 11. Computation of Earnings Per Common Share and Common
Equivalent Share for the three month period ended March
31, 1998.
Exhibit No. 27. Financial Data Schedule.
(b) No reports on Form 8-K were filed during the quarter ended March 31, 1998.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
EMCOR GROUP, INC.
----------------------------
(Registrant)
Date: May 4, 1998 By: /s/FRANK T. MacINNIS
----------------------------
Frank T. MacInnis
Chairman of the Board of
Directors and
Chief Executive Officer
Date: May 4, 1998 By: /s/LEICLE E. CHESSER
----------------------------
Leicle E. Chesser
Executive Vice President
and Chief Financial Officer
Exhibit 4(a)
EMCOR GROUP, INC.
SEVENTH AMENDMENT TO CREDIT AGREEMENT
Harris Trust and Savings Bank Chicago, Illinois and the other lenders from time
to time party to the Credit Agreement referred to below
Gentlemen:
We refer to the Credit Agreement dated as of June 19, 1996 as amended and
currently in effect between EMCOR Group, Inc., DYN Specialty Contracting, Inc.,
Drake & Scull Engineering Ltd., Comstock Canada, Ltd. and you (the "Credit
Agreement"), capitalized terms used without definition below to have the
meanings ascribed to them in the Credit Agreement. Upon receipt by the Agent of
counterparts hereof while, taken together, bear the signatures of the Borrowers
and the Required Lenders, this letter shall serve to amend the Credit Agreement
as follows:
1. Amendment to Section 7.11 (Liens).
Section 7.11(g) of the Credit Agreement shall be modified by adding the
following at the end thereof:
"and Liens on assets of the Canadian Subsidiaries in favor of London
Guarantee Insurance Company securing obligations in connection with payment
and performance bonds issued by London Guarantee Insurance Company (provided
that if, as and when Liens are granted to the Agent on assets of the Canadian
Subsidiaries the Liens on the assets of the Canadian Subsidiaries granted to
London Guarantee Insurance Company (other than moneys due or to become due
under contracts for which a surety bond has been provided by London Guarantee
Insurance Company and inventory, materials and equipment purchased for,
installed in or allocated to any such contracts) shall be subject and
subordinate to any Liens granted on such assets in favor of the Agent)"
2. Section 7.13 Capital and Certain Other Restricted Expenditures
Section 7.13 of the Credit Agreement shall be amended by striking the
phrase "or make any acquisition permitted solely by Section 7.12(i) hereof or
make any investment described in Section 7.12(n) hereof" therefrom and by adding
the following at the end thereof:
"The Borrowers will not, nor will they permit any Restricted Subsidiary to,
make any acquisition permitted solely by Section 7.12(i) hereof or make any
investment described in Section 7.12(n) hereof without the written consent of
the Required Lenders if the aggregate amount expended on account of any such
acquisition or investment would exceed $10,000,000 or if after giving effect
thereto the aggregate amount expended by the Borrowers and their Restricted
Subsidiaries from March 20, 1998 to the date of the consummation of the
acquisition or investment in question would exceed $25,000,000, provided that
consideration for investments or acquisitions which consists of capital stock
of the Company shall be excluded from the forgoing calculations."
Except as specifically amended hereby, all of the terms, conditions and
provisions of the Credit Agreement shall stand and remain unchanged and in full
force and effect. No reference to this Seventh Amendment to Credit Agreement
need be made in any instrument or document at any time referring to the Credit
Agreement, and any reference to the Credit Agreement in any of such shall be
deemed to be a reference to the Credit Agreement as amended hereby. The Agent is
authorized to enter into an intercreditor agreement with London Guarantee
Insurance Company and/or its Affiliates on terms which are not in any material
respect more detrimental to the Lenders than the intercreditor agreement
currently extant with Reliance Surety Company and its Affiliates. This Seventh
Amendment to Credit Agreement shall be construed in accordance with and governed
by the laws of Illinois and may be executed in counterparts and by separate
parties hereto on separate counterparts, each to constitute an original but all
one and the same instrument.
<PAGE>
Date as of this 14th day of April 1998
EMCOR GROUP, INC.
By
-------------------------------------------------
Its Chairman of the Board
---------------------------
DYN SPECIALY CONTRACTING, INC.
By
-------------------------------------------------
Its Executive Vice President
------------------------------
DRAKE & SCULL ENGINEERING LTD.
By
-------------------------------------------------
Its Director
--------------
COMSTOCK CANADA, LTD.
By
-------------------------------------------------
Its Chairman of the Board
---------------------------
<PAGE>
Accepted and agreed as of the date last above written.
HARRIS TRUST AND SAVINGS BANK
By
-------------------------------------------------
Its
--------------------------------------------
BANK OF SCOTLAND
By
-------------------------------------------------
Its
--------------------------------------------
LASALLE NATIONAL BANK
By
-------------------------------------------------
Its
--------------------------------------------
CORESTATES BANK, N.A.
By
-------------------------------------------------
Its
--------------------------------------------
THE FUJI BANK, LIMITED, NEW YORK BRANCH
By
-------------------------------------------------
Its
--------------------------------------------
Exhibit 4(b)
EXECUTION COPY
EMCOR GROUP, INC.
AND
STATE STREET BANK AND TRUST COMPANY
as Trustee
Subordinated Indenture
Dated as of March 18, 1998
<PAGE>
CROSS REFERENCE SHEET*
---------------
Provisions of Trust Indenture Act of 1939 and Indenture to
be dated as of March 18, 1998 between EMCOR GROUP, INC. and State
Street Bank and Trust Company, Trustee:
Section of the Act........................ Section of Indenture
310(a)(1), (2) and (5).................... 6.9
310(a)(3) and (4)......................... Inapplicable
310(b).................................... 6.8 and 6.10(a), (b)
and (d)
310(c).................................... Inapplicable
311(a).................................... 6.13
311(b).................................... 6.13
311(c).................................... Inapplicable
312(a).................................... 4.1 and 4.2(a)
312(b).................................... 4.2(a) and (b)(i)
and (ii)
312(c).................................... 4.2(c)
313(a).................................... 4.4(a)(i), (ii),
(iii), (iv), (v),
(vi) and (vii)
313(a)(5)................................. Inapplicable
313(b)(1)................................. Inapplicable
313(b)(2)................................. 4.4(b)
313(c).................................... 4.4(c)
313(d).................................... 4.4(d)
314(a).................................... 4.3
314(b).................................... Inapplicable
314(c)(1) and (2)......................... 11.5
314(c)(3)................................. Inapplicable
314(d).................................... Inapplicable
314(e).................................... 11.5
314(f).................................... Inapplicable
315(a), (c) and (d)....................... 6.1
315(b).................................... 5.8
315(e).................................... 5.9
316(a)(1)................................. 5.7
316(a)(2)................................. Not required
316(a) (last sentence).................... 7.4
316(b).................................... 5.4
317(a).................................... 5.2
317(b).................................... 3.5(a)
318(a).................................... 11.7
<PAGE>
TABLE OF CONTENTS
ARTICLE ONE
DEFINITIONS
Affiliate................................................. 2
Authenticating Agent...................................... 2
Board of Directors........................................ 2
Board Resolution.......................................... 2
Business Day.............................................. 2
Commission................................................ 2
Consolidated Net Tangible Assets.......................... 2
Corporate Trust Office.................................... 2
Depositary................................................ 2
Dollars................................................... 2
Exchange Act.............................................. 2
Event of Default.......................................... 3
Global Security........................................... 3
Holder.................................................... 3
Holder of Securities...................................... 3
Securityholder............................................ 3
Indebtedness.............................................. 3
Indenture................................................. 3
interest.................................................. 3
Issuer.................................................... 3
Issuer Order.............................................. 3
Officers' Certificate..................................... 4
Opinion of Counsel........................................ 4
original issue date....................................... 4
original issue discount................................... 4
Original Issue Discount Security.......................... 4
Outstanding............................................... 4
Periodic Offering......................................... 5
Person.................................................... 5
Place of Payment.......................................... 5
principal................................................. 5
principal amount.......................................... 5
record date............................................... 5
Responsible Officer....................................... 5
Restricted Subsidiary..................................... 5
Securities Act............................................ 5
Security.................................................. 5
Securities................................................ 5
Senior Indebtedness....................................... 5
Significant Subsidiary.................................... 6
Subsidiary................................................ 6
Trust Indenture Act of 1939............................... 6
Trustee................................................... 6
Unrestricted Subsidiary................................... 6
U.S. Government Obligations............................... 6
vice president............................................ 6
Yield to Maturity......................................... 6
ARTICLE TWO
SECURITIES......................... 6
SECTION 2.1 Forms Generally............................. 6
SECTION 2.2 Form of Trustee's Certificate of
Authentication....................................... 7
SECTION 2.3 Amount Unlimited Issuable in Series......... 7
SECTION 2.4 Authentication and Delivery of
Securities........................................... 9
SECTION 2.5 Execution of Securities..................... 11
SECTION 2.6 Certificate of Authentication............... 12
SECTION 2.7 Denomination and Date of Securities;
Payments of Interest................................. 12
SECTION 2.8 Registration, Transfer and Exchange......... 12
SECTION 2.9 Mutilated, Defaced, Destroyed, Lost
and Stolen Securities................................ 14
SECTION 2.10 Cancellation of Securities;
Disposition Thereof.................................. 15
SECTION 2.11 Temporary Securities........................ 15
SECTION 2.12 CUSIP Numbers............................... 15
ARTICLE THREE
COVENANTS OF THE ISSUER.................. 15
SECTION 3.1 Payment of Principal and Interest........... 15
SECTION 3.2 Offices for Notices and Payments, etc....... 16
SECTION 3.3 No Interest Extension....................... 16
SECTION 3.4 Appointments to Fill Vacancies in
Trustee's Office..................................... 16
SECTION 3.5 Provision as to Paying Agent................ 16
ARTICLE FOUR
SECURITYHOLDERS LISTS AND REPORTS BY THE
ISSUER AND THE TRUSTEE................... 17
SECTION 4.1 Issuer to Furnish Trustee
Information as to Names and Addresses of
Securityholders............................... 17
SECTION 4.2 Preservation and Disclosure of
Securityholders Lists................................ 17
SECTION 4.3 Reports by the Issuer....................... 18
SECTION 4.4 Reports by the Trustee...................... 19
ARTICLE FIVE
REMEDIES OF THE TRUSTEE AND SECURITY HOLDERS
ON EVENT OF DEFAULT.................... 19
SECTION 5.1 Events of Default........................... 19
SECTION 5.2 Payment of Securities on Default;
Suit Therefor........................................ 21
SECTION 5.3 Application of Moneys Collected by
Trustee.............................................. 22
SECTION 5.4 Proceedings by Securityholders.............. 23
SECTION 5.5 Proceedings by Trustee...................... 23
SECTION 5.6 Remedies Cumulative and Continuing.......... 23
SECTION 5.7 Direction of Proceedings; Waiver of
Defaults by Majority of Securityholders.............. 23
SECTION 5.8 Notice of Defaults.......................... 24
SECTION 5.9 Undertaking to Pay Costs.................... 24
ARTICLE SIX
CONCERNING THE TRUSTEE................... 24
SECTION 6.1 Duties and Responsibilities of the
Trustee; During Default; Prior to Default............ 24
SECTION 6.2 Certain Rights of the Trustee............... 25
SECTION 6.3 Trustee Not Responsible for
Recitals, Disposition of Securities or
Application of Proceeds Thereof................ 26
SECTION 6.4 Trustee and Agents May Hold
Securities; Collections, etc......................... 26
SECTION 6.5 Moneys Held by Trustee...................... 26
SECTION 6.6 Compensation and Indemnification of
Trustee and Its Prior Claim.......................... 27
SECTION 6.7 Right of Trustee to Rely on
Officers' Certificate, etc........................... 27
SECTION 6.8 Qualification of Trustee;
Conflicting Interests................................ 27
SECTION 6.9 Persons Eligible for Appointment as
Trustee; Different Trustees for
Different Series............................... 27
SECTION 6.10 Resignation and Removal; Appointment
of Successor Trustee................................. 28
SECTION 6.11 Acceptance of Appointment by
Successor Trustee.................................... 29
SECTION 6.12 Merger, Conversion, Consolidation or
Succession to Business of Trustee.................... 30
SECTION 6.13 Preferential Collection of Claims
Against the Issuer................................... 30
SECTION 6.14 Appointment of Authenticating Agent......... 30
ARTICLE SEVEN
CONCERNING THE SECURITYHOLDERS............... 31
SECTION 7.1 Evidence of Action Taken by
Securityholders...................................... 31
SECTION 7.2 Proof of Execution of Instruments
and of Holding of Securities......................... 31
SECTION 7.3 Holders to be Treated as Owners............. 31
SECTION 7.4 Securities Owned by Issuer Deemed
Not Outstanding...................................... 32
SECTION 7.5 Right of Revocation of Action Taken......... 32
SECTION 7.6 Record Date for Consents and Waivers........ 32
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES.................. 33
SECTION 8.1 Supplemental Indentures Without
Consent of Securityholders........................... 33
SECTION 8.2 Supplemental Indentures with Consent
of Securityholders................................... 34
SECTION 8.3 Effect of Supplemental Indenture............ 35
SECTION 8.4 Documents to Be Given to Trustee............ 35
SECTION 8.5 Notation on Securities in Respect of
Supplemental Indentures.............................. 35
ARTICLE NINE
CONSOLIDATION, MERGER, SALE, LEASE, EXCHANGE OR OTHER DISPOSITION
36
SECTION 9.1 Issuer May Consolidate, etc., on
Certain Terms........................................ 36
SECTION 9.2 Successor Corporation to be
Substituted.......................................... 36
SECTION 9.3 Opinion of Counsel to be Given
Trustee.............................................. 37
ARTICLE TEN
SATISFACTION AND DISCHARGE OF INDENTURE;
COVENANT DEFEASANCE; UNCLAIMED MONEYS........... 37
SECTION 10.1 Satisfaction and Discharge of
Indenture............................................ 37
SECTION 10.2 Application by Trustee of Funds
Deposited for Payment of Securities.................. 39
SECTION 10.3 Repayment of Moneys Held by Paying
Agent................................................ 39
SECTION 10.4 Return of Moneys Held by Trustee
and Paying Agent Unclaimed for Two
Years......................................... 39
SECTION 10.5 Indemnity for U.S. Government
Obligations.......................................... 39
ARTICLE ELEVEN
MISCELLANEOUS PROVISIONS.................. 39
SECTION 11.1 Partners, Incorporators,
Stockholders, Officers and Directors of
Issuer Exempt from Individual Liability........ 39
SECTION 11.2 Provisions of Indenture for the
Sole Benefit of Parties and
Holders of Securities.......................... 39
SECTION 11.3 Successors and Assigns of Issuer
Bound by Indenture................................... 40
SECTION 11.4 Notices and Demands on Issuer,
Trustee and Holders of Securities.................... 40
SECTION 11.5 Officers' Certificates and Opinions
of Counsel; Statements to Be
Contained Therein.............................. 40
SECTION 11.6 Payments Due on Saturdays, Sundays
and Holidays......................................... 41
SECTION 11.7 Conflict of Any Provision of
Indenture with Trust Indenture Act of 1939........... 41
SECTION 11.8 GOVERNING LAW.............................. 41
SECTION 11.9 Counterparts............................... 41
SECTION 11.10 Effect of Headings......................... 41
ARTICLE TWELVE
REDEMPTION OF SECURITIES AND SINKING FUNDS......... 41
SECTION 12.1 Applicability of Article................... 41
SECTION 12.2 Notice of Redemption; Partial
Redemptions.......................................... 41
SECTION 12.3 Payment of Securities Called for
Redemption........................................... 42
SECTION 12.4 Exclusion of Certain Securities
from Eligibility for Selection for Redemption........ 43
SECTION 12.5 Mandatory and Optional Sinking Funds....... 43
ARTICLE THIRTEEN
SUBORDINATION....................... 45
SECTION 13.1 Securities Subordinated to Senior
Indebtedness......................................... 45
SECTION 13.2 Reliance on Certificate of
Liquidating Agent; Further Evidence
as to Ownership of Senior Indebtedness......... 47
SECTION 13.3 Payment Permitted If No Default............ 47
SECTION 13.4 Trustee Not Charged with Knowledge
of Prohibition....................................... 48
SECTION 13.5 Trustee to Effectuate Subordination........ 48
SECTION 13.6 Rights of Trustee as Holder of
Senior Indebtedness.................................. 48
SECTION 13.7 Article Applicable to Paying Agents........ 48
SECTION 13.8 Subordination Rights Not Impaired
by Acts or Omissions of the
Issuer or Holders of Senior Indebtedness....... 48
SECTION 13.9 Trustee Not Fiduciary for Holders
of Senior Indebtedness............................... 49
<PAGE>
SUBORDINATED INDENTURE
SUBORDINATED INDENTURE, dated as of March 18, 1998 between EMCOR GROUP,
INC., a Delaware corporation (the "Issuer"), and STATE STREET BANK AND TRUST
COMPANY, a Massachusetts trust company, as trustee (the "Trustee").
W I T N E S S E T H :
WHEREAS, the Issuer has duly authorized the issuance from time to time of
its unsecured subordinated debentures, notes or other evidences of indebtedness
to be issued in one or more series (the "Securities") up to such principal
amount or amounts as may from time to time be authorized in accordance with the
terms of this Indenture; and
WHEREAS, the Issuer has duly authorized the execution and delivery of this
Indenture to provide, among other things, for the authentication, delivery and
administration of the Securities; and
WHEREAS, all things necessary to make this Indenture a valid indenture and
agreement according to its terms have been undertaken and completed;
NOW, THEREFORE:
In consideration of the premises and the purchases of the Securities by
the Holders (as hereinafter defined) thereof, the Issuer and the Trustee
mutually covenant and agree for the equal and proportionate benefit of the
respective Holders from time to time of the Securities as follows:
ARTICLE ONE
DEFINITIONS
SECTION 1.1 For all purposes of this Indenture and of any indenture
supplemental hereto the following terms shall have the respective meanings
specified in this Section 1.1 (except as otherwise expressly provided herein or
in any indenture supplemental hereto or unless the context otherwise clearly
requires). All other terms used in this Indenture that are defined in the Trust
Indenture Act of 1939, including terms defined therein by reference to the
Securities Act of 1933, as amended (the "Securities Act"), shall have the
meanings assigned to such terms in said Trust Indenture Act of 1939 and in said
Securities Act as in force at the date of this Indenture (except as otherwise
expressly provided herein or in any indenture supplemental hereto or unless the
context otherwise clearly requires).
All accounting terms used herein and not expressly defined shall have the
meanings assigned to such terms in accordance with generally accepted accounting
principles, and the term "generally accepted accounting principles" means such
accounting principles as are generally accepted on the date of this Indenture.
The words "herein", "hereof" and "hereunder" and other words of similar
import refer to this Indenture as a whole and not to any particular Article,
Section or other subdivision. The expressions "date of this Indenture", "date
hereof", "date as of which this Indenture is dated" and "date of execution and
delivery of this Indenture" and other expressions of similar import refer to the
effective date of the original execution and delivery of this Indenture, viz. as
of March , 1998.
The terms defined in this Article have the meanings assigned to them in
this Article and include the plural as well as the singular.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" shall have the meaning set forth in
Section 6.14.
"Bankruptcy Code" means the United States Bankruptcy Code, 11 United
Stated Code ss.ss. 101 et seq., or any successor statute thereto.
"Board of Directors" means either the Board of Directors of the Issuer or
any committee of such Board duly authorized to act on its behalf.
"Board Resolution" means one or more resolutions, certified by the
secretary or an assistant secretary of the Issuer to have been duly adopted or
consented to by the Board of Directors and to be in full force and effect, and
delivered to the Trustee.
"Business Day" means, with respect to any Security, unless otherwise
specified in a Board Resolution and an Officers' Certificate with respect to a
particular series of Securities, a day that (a) in the Place of Payment (or in
any of the Places of Payment, if more than one) in which amounts are payable, as
specified in the form of such Security, and (b) in the city in which the
Corporate Trust Office is located, is not a day on which banking institutions
are authorized or required by law or regulation to close.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, as amended,
or, if at any time after the execution and delivery of this Indenture such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act of 1939, then the body performing such duties on such
date.
"Consolidated Net Tangible Assets" means the aggregate amount of assets
included on the most recent consolidated balance sheet of the Issuer 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, unamortized debt discount and
expense and other like intangibles, all in accordance with generally accepted
accounting principles consistently applied.
"Corporate Trust Office" means the office of the Trustee of a series of
Securities at which the trust created by this Indenture shall, at any particular
time, be principally administered, which office is, at the date as of which this
Indenture is dated, located at Goodwin Square, 225 Asylum Street, Hartford, CT
06103.
"Depositary" means, with respect to the Securities of any series issuable
or issued in the form of one or more Global Securities, the Person designated as
Depositary by the Issuer pursuant to Section 2.3 until a successor Depositary
shall have become such pursuant to the applicable provisions of this Indenture,
and thereafter "Depositary" shall mean or include each Person who is then a
Depositary hereunder, and, if at any time there is more than one such Person,
"Depositary" as used with respect to the Securities of any such series shall
mean the Depositary with respect to the Global Securities of such series.
"Dollars" and the sign "$" means the coin and currency of the United
States of America as at the time of payment is legal tender for the payment of
public and private debts.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Event of Default" means any event or condition specified as
such in Section 5.1.
"Global Security" means a Security evidencing all or a part of a series of
Securities issued to the Depositary for such series in accordance with Section
2.3 and bearing the legend prescribed in Section 2.4.
"Holder", "Holder of Securities", "Securityholder" or other similar terms
mean, in the case of any Security, the Person in whose name such Security is
registered in the security register kept by the Issuer for that purpose in
accordance with the terms hereof.
"Indebtedness" with respect to any Person, means, without
duplication:
(a) (i) the principal of and 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 this 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 and any guaranty by such Person of any such
reimbursement obligation; (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 which 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 this
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 and
guaranties of such obligations; and
(b) any amendments, modifications, refundings, renewals or extensions of
any indebtedness or obligation described as Indebtedness in clause (a)
above.
"Indenture" means this instrument as originally executed and delivered or,
if amended or supplemented as herein provided, as so amended or supplemented or
both, including, for all purposes of this instrument and any such supplement,
the provisions of the Trust Indenture Act of 1939 that are deemed to be a part
of and govern this instrument and any such supplement, respectively, and shall
include the forms and terms of particular series of Securities established as
contemplated hereunder.
"interest" means, when used with respect to non-interest bearing
Securities (including, without limitation, any Original Issue Discount Security
that by its terms bears interest only after maturity or upon default in any
other payment due on such Security), interest payable after maturity (whether at
stated maturity, upon acceleration or redemption or otherwise) or after the
date, if any, on which the Issuer becomes obligated to acquire a Security,
whether upon conversion, by purchase or otherwise.
"Issuer" means EMCOR Group, Inc., a Delaware corporation, and, subject to
Article Nine, its successors and assigns.
"Issuer Order" means a written statement, request or order of the Issuer
which is signed in its name by the chairman of the Board of Directors, the
president or any vice president of the Issuer, and delivered to the Trustee.
"Officers' Certificate", when used with respect to the Issuer, means a
certificate signed by the chairman of the Board of Directors, the president, or
any vice president and by the treasurer, any assistant treasurer, the
controller, any assistant controller, the secretary or any assistant secretary
of the Issuer. Each such certificate shall include the statements provided for
in Section 11.5 if and to the extent required by the provisions of such Section
11.5. One of the officers signing an Officers' Certificate given pursuant to
Section 4.3 shall be the principal executive, financial or accounting officer of
the Issuer.
"Opinion of Counsel" means an opinion in writing signed by the chief
counsel of the Issuer or by such other legal counsel who may be an employee of
or counsel to the Issuer and who shall be reasonably satisfactory to the
Trustee. Each such opinion shall include the statements provided for in Section
11.5, if and to the extent required by the provisions of such Section 11.5.
"original issue date" of any Security (or portion thereof) means the
earlier of (a) the date of such Security or (b) the date of any Security (or
portion thereof) for which such Security was issued (directly or indirectly) on
registration of transfer, exchange or substitution.
"original issue discount" of any debt security, including any Original
Issue Discount Security, means the difference between the principal amount of
such debt security and the initial issue price of such debt security (as set
forth in the case of an Original Issue Discount Security on the face of such
Security).
"Original Issue Discount Security" means any Security that provides for an
amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the maturity thereof pursuant to Article Five.
"Outstanding" when used with reference to Securities, shall, subject to
the provisions of Section 7.4, mean, as of any particular time, all Securities
authenticated and delivered by the Trustee under this Indenture, except:
(a) Securities theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;
(b) Securities (other than Securities of any series as to which the
provisions of Article Ten hereof shall not be applicable), or portions
thereof, for the payment or redemption of which moneys or U.S. Government
Obligations (as provided for in Section 10.1) in the necessary amount shall
have been deposited in trust with the Trustee or with any paying agent (other
than the Issuer) or shall have been set aside, segregated and held in trust
by the Issuer for the Holders of such Securities (if the Issuer shall act as
its own paying agent), provided that, if such Securities, or portions
thereof, are to be redeemed prior to the maturity thereof, notice of such
redemption shall have been given as herein provided, or provision
satisfactory to the Trustee shall have been made for giving such notice; and
(c) Securities which shall have been paid or in substitution for which
other Securities shall have been authenticated and delivered pursuant to the
terms of Section 2.9 (except with respect to any such Security as to which
proof satisfactory to the Trustee is presented that such Security is held by
a Person in whose hands such Security is a legal, valid and binding
obligation of the Issuer).
In determining whether the Holders of the requisite aggregate principal
amount of Outstanding Securities of any or all series have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, the
principal amount of an Original Issue Discount Security that shall be deemed to
be Outstanding for such purposes shall be the portion of the principal amount
thereof that would be due and payable as of the date of such determination (as
certified by the Issuer to the Trustee) upon a declaration of acceleration of
the maturity thereof pursuant to Article Five.
"Periodic Offering" means an offering of Securities of a series from time
to time, the specific terms of which Securities, including, without limitation,
the rate or rates of interest, if any, thereon, the stated maturity or
maturities thereof and the redemption provisions, if any, with respect thereto,
are to be determined by the Issuer or its agents upon the issuance of such
Securities.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust, estate,
unincorporated organization or government or any agency or political subdivision
thereof.
"Place of Payment", when used with respect to the Securities of any
series, means the place or places where the principal of and interest, if any,
on the Securities of such series are payable as determined in accordance with
Section 2.3.
"principal" of a debt security, including any Security, means the amount
(including, without limitation, if and to the extent applicable, any premium
and, in the case of an Original Issue Discount Security, any accrued original
issue discount, but excluding interest) that is payable with respect to such
debt security as of any date and for any purpose (including, without limitation,
in connection with any sinking fund, if any, upon any redemption at the option
of the Issuer, upon any purchase or exchange at the option of the Issuer or the
holder of such debt security and upon any acceleration of the maturity of such
debt security).
"principal amount" of a debt security, including any Security, means the
principal amount as set forth on the face of such debt security.
"record date" shall have the meaning set forth in Section
2.7.
"Responsible Officer", when used with respect to the Trustee of a series
of Securities, means any officer of the Trustee with direct responsibility for
the administration of the trust created by this Indenture.
"Restricted Subsidiary" means (a) any Subsidiary of the Issuer other than
an Unrestricted Subsidiary, and (b) any Subsidiary of the Issuer which was an
Unrestricted Subsidiary but which, subsequent to the date hereof, is designated
by the Issuer (by Board Resolution) to be a Restricted Subsidiary; provided,
however, that the Issuer may not designate any such Subsidiary to be a
Restricted Subsidiary if the Issuer would thereby breach any covenant or
agreement herein contained (on the assumptions that any outstanding Indebtedness
of such Subsidiary was incurred at the time of such designation).
"Securities Act" shall have the meaning set forth in Section
1.1.
"Security" or "Securities" has the meaning stated in the first recital of
this Indenture or, as the case may be, Securities that have been authenticated
and delivered pursuant to this Indenture.
"Senior Indebtedness" means Indebtedness of the Issuer outstanding at any
time (other than the Indebtedness evidenced by the Securities of any series)
except (a) any Indebtedness as to which, by the terms of the instrument creating
or evidencing such Indebtedness, it is provided that such Indebtedness is not
senior or prior in right of payment to the Securities or is pari passu or
subordinate by its terms in right of payment to the Securities, (b) renewals,
extensions and modifications of any such Indebtedness, (c) any Indebtedness of
the Issuer to a wholly-owned Subsidiary of the Issuer, (d) interest accruing
after the filing of a petition initiating any proceeding referred to in Sections
5.1(e) and 5.1(f) unless such interest is an allowed claim enforceable against
the Issuer in a proceeding under federal or state bankruptcy laws and (e) trade
payables.
"Significant Subsidiary" means any Subsidiary which is a "significant
subsidiary" of the Issuer within the meaning of Rule 1.02(w) of Regulation S-X
promulgated by the Commission as in effect on the date of this Indenture.
"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 Persons 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.
"Trust Indenture Act of 1939" (except as otherwise provided in Sections
8.1 and 8.2) means the Trust Indenture Act of 1939, as amended by the Trust
Indenture Reform Act of 1990, as in force at the date as of which this Indenture
is originally executed.
"Trustee" means the Person identified as "Trustee" in the first paragraph
hereof and, subject to the provisions of Article Six, shall also include any
successor trustee. "Trustee" shall also mean or include each Person who is then
a trustee hereunder and, if at any time there is more than one such Person,
"Trustee" as used with respect to the Securities of any series shall mean the
trustee with respect to the Securities of such series.
"Unrestricted Subsidiary" means (a) any Subsidiary of the Issuer acquired
or organized after the date hereof, provided, however, that such Subsidiary of
the Issuer shall not be a successor, directly or indirectly, to any Restricted
Subsidiary, and (b) any Subsidiary of the Issuer substantially all the assets of
which consist of stock or other securities of a Subsidiary or Subsidiaries of
the Issuer of the character described in clause (a) of this paragraph, unless
and until such Subsidiary shall have been designated to be a Restricted
Subsidiary pursuant to clause (b) of the definition of "Restricted Subsidiary".
"U.S. Government Obligations" shall have the meaning set
forth in Section 10.1(B).
"vice president," when used with respect to the Issuer or the Trustee,
means any vice president, regardless of whether designated by a number or a word
or words added before or after the title "vice president."
"Yield to Maturity" means the yield to maturity on a series of Securities,
calculated at the time of issuance of such series, or, if applicable, at the
most recent redetermination of interest on such series, and calculated in
accordance with generally accepted financial practice or as otherwise provided
in the terms of such series of Securities.
ARTICLE TWO
SECURITIES
SECTION 2.1 Forms Generally. The Securities of each series shall be
substantially in such form (not inconsistent with this Indenture) as shall be
established by or pursuant to one or more Board Resolutions (as set forth in a
Board Resolution or, to the extent established pursuant to rather than set forth
in a Board Resolution, an Officers' Certificate detailing such establishment) or
in one or more indentures supplemental hereto, in each case with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture, and may have imprinted or otherwise
reproduced thereon such legend or legends or endorsements, not inconsistent with
the provisions of this Indenture, as may be required to comply with any law or
with any rules or regulations pursuant thereto, or with any rules of any
securities exchange or to conform to general usage, all as may be determined by
the officers executing such Securities, as evidenced by their execution of such
Securities.
The definitive Securities shall be printed, lithographed or engraved on
steel engraved borders or may be produced in any other manner, all as determined
by the officers executing such Securities as evidenced by their execution of
such Securities.
SECTION 2.2 Form of Trustee's Certificate of Authentication. The Trustee's
certificate of authenticatin on all Securities n shall be substantially as
follows:
This is one of the Securities of the series designated herein referred to
in the within mentioned Indenture.
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By______________________________
Authorized Signatory
If at any time there shall be an Authenticating Agent appointed with
respect to any series of Securities, then the Securities of such series shall
bear, in addition to the Trustee's certificate of authentication, an alternate
Certificate of Authentication which shall be substantially as follows:
This is one of the Securities of the series designated herein referred to
in the within mentioned Indenture.
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By______________________________
as Authenticating Agent
By______________________________
Authorized Signatory
SECTION 2.3 Amount Unlimited Issuable in Series. The aggregate principal
amount of Securities which may be authenticated and delivered under this
Indenture is unlimited.
The Securities may be issued in one or more series and the Securities of
each such series shall rank equally and pari passu with the Securities of each
other series, but all Securities issued hereunder shall be subordinate and
junior in right of payment, to the extent and in the manner set forth in Article
Thirteen, to all Senior Indebtedness of the Issuer. There shall be established
in or pursuant to one or more Board Resolutions (and, to the extent established
pursuant to rather than set forth in a Board Resolution, in an Officers'
Certificate detailing such establishment) or established in one or more
indentures supplemental hereto, prior to the initial issuance of Securities of
any series:
(1) the designation of the Securities of the series, which shall
distinguish the Securities of such series from the Securities of all other
series;
(2) any limit upon the aggregate principal amount of the Securities of the
series that may be authenticated and delivered under this Indenture (except
for Securities authenticated and delivered upon registration of transfer of,
or in exchange for, or in lieu of, other Securities of the series pursuant to
Section 2.8, 2.9, 2.11, 8.5 or 12.3);
(3) the date or dates on which the principal of the Securities of the
series is payable;
(4) the rate or rates at which the Securities of the series shall bear
interest, if any, the date or dates from which any such interest shall
accrue, on which any such interest shall be payable and on which a record
shall be taken for the determination of Holders to whom any such interest is
payable or the method by which such rate or rates or date or dates shall be
determined or both;
(5) the place or places where and the manner in which the principal of,
premium, if any, and interest, if any, on Securities of the series shall be
payable (if other than as provided in Section 3.2) and the office or agency
for the Securities of the series maintained by the Issuer pursuant to Section
3.2;
(6) the right, if any, of the Issuer to redeem, purchase or repay
Securities of the series, in whole or in part, at its option and the period
or periods within which, the price or prices (or the method by which such
price or prices shall be determined or both) at which, the form or method of
payment therefor if other than in cash and any terms and conditions upon
which and the manner in which (if different from the provisions of Article
Twelve) Securities of the series may be so redeemed, purchased or repaid, in
whole or in part pursuant to any sinking fund or otherwise;
(7) the obligation, if any, of the Issuer to redeem, purchase or repay
Securities of the series in whole or in part pursuant to any mandatory
redemption, 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 shall be determined or both) at which,
the form or method of payment therefor if other than in cash and any terms
and conditions upon which and the manner in which (if different from the
provisions of Article Twelve) Securities of the series shall be redeemed,
purchased or repaid, in whole or in part, pursuant to such obligation;
(8) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which Securities of the series shall be
issuable;
(9) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series which shall be payable upon
acceleration of the maturity thereof;
(10) whether Securities of the series will be issuable as Global
Securities;
(11) if the Securities of such series are to be issuable in definitive
form (whether upon original issue or upon exchange of a temporary Security of
such series) only upon receipt of certain certificates or other documents or
satisfaction of other conditions, the form and terms of such certificates,
documents or conditions;
(12) any trustees, depositaries, authenticating or paying agents, transfer
agents or registrars or any other agents with respect to the Securities of
such series;
(13) any deleted, modified or additional events of default or remedies or
any deleted, modified or additional covenants with respect to the Securities
of such series;
(14) whether the provisions of Section 10.1(C) will be applicable to
Securities of such series;
(15) any provision relating to the issuance of Securities of such series
at an original issue discount (including, without limitation, the issue price
thereof, the rate or rates at which such original issue discount shall
accrete, if any, and the date or dates from or to which or period or periods
during which such original issue discount shall accrete at such rate or
rates);
(16) if other than Dollars, the foreign currency in which payment of the
principal of, premium, if any, and interest, if any, on the Securities of
such series shall be payable;
(17) if other than State Street Bank and Trust Company is to act as
Trustee for the Securities of such series, the name and Corporate Trust
Office of such Trustee;
(18) if the amounts of payments of principal of, premium, if any, and
interest, if any, on the Securities of such series are to be determined with
reference to an index, the manner in which such amounts shall be determined;
(19) the terms for conversion or exchange, if any, with respect to the
Securities of such series; and
(20) any other terms of the series.
All Securities of any one series shall be substantially identical, except
as to denomination and except as may otherwise be provided by or pursuant to the
Board Resolution or Officers' Certificate referred to above or as set forth in
any such indenture supplemental hereto. All Securities of any one series need
not be issued at the same time and may be issued from time to time, consistent
with the terms of this Indenture, if so provided by or pursuant to such Board
Resolution, such Officers' Certificate or in any such indenture supplemental
hereto.
Any such Board Resolution or Officers' Certificate referred to above with
respect to Securities of any series filed with the Trustee on or before the
initial issuance of the Securities of such series shall be incorporated herein
by reference with respect to Securities of such series and shall thereafter be
deemed to be a part of the Indenture for all purposes relating to Securities of
such series as fully as if such Board Resolution or Officers' Certificate were
set forth herein in full.
SECTION 2.4 Authentication and Delivery of Securities. The Issuer may
deliver Securities of any series executed by the Issuer to the Trustee for
authentication together with the applicable documents referred to below in this
Section 2.4, and the Trustee shall thereupon authenticate and deliver such
Securities to, or upon the order of the Issuer (contained in the Issuer Order
referred to below in this Section 2.4) or pursuant to such procedures acceptable
to the Trustee and to such recipients as may be specified from time to time by
an Issuer Order. The maturity date, original issue date, interest rate, if any,
and any other terms of the Securities of such series shall be determined by or
pursuant to such Issuer Order and procedures. If provided for in such procedures
and agreed to by the Trustee, such Issuer Order may authorize authentication and
delivery pursuant to oral instructions from the Issuer or its duly authorized
agent, which instructions shall be promptly confirmed in writing. In
authenticating the Securities of such series and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive (in the case of subparagraphs (2), (3) and
(4) below only at or before the time of the first request of the Issuer to the
Trustee to authenticate Securities of such series) and (subject to Section 6.1)
shall be fully protected in relying upon, unless and until such documents have
been superseded or revoked:
(1) an Issuer Order requesting such authentication and setting forth
delivery instructions provided that, with respect to Securities of a series
subject to a Periodic Offering, (a) such Issuer Order may be delivered by the
Issuer to the Trustee prior to the delivery to the Trustee of such Securities
for authentication and delivery, (b) the Trustee shall authenticate and
deliver Securities of such series for original issue from time to time, in an
aggregate principal amount not exceeding the aggregate principal amount
established for such series, pursuant to an Issuer Order or pursuant to
procedures acceptable to the Trustee as may be specified from time to time by
an Issuer Order, (c) the maturity date or dates, original issue date or
dates, interest rate or rates, if any, and any other terms of Securities of
such series shall be determined by an Issuer Order or pursuant to such
procedures, (d) if provided for in such procedures, such Issuer Order may
authorize authentication and delivery pursuant to oral or electronic
instructions from the Issuer or its duly authorized agent or agents, which
oral instructions shall be promptly confirmed in writing and (e) after the
original issuance of the first Security of such series to be issued, any
separate request by the Issuer that the Trustee authenticate Securities of
such series for original issuance will be deemed to be a certification by the
Issuer that it is in compliance with all conditions precedent provided for in
this Indenture relating to the authentication and delivery of such
Securities;
(2) the Board Resolution, Officers' Certificate or executed supplemental
indenture referred to in Sections 2.1 and 2.3 by or pursuant to which the
forms and terms of the Securities of such series were established;
(3) an Officers' Certificate setting forth the form or forms and terms of
the Securities stating that the form or forms and terms of the Securities
have been established pursuant to Sections 2.1 and 2.3 and comply with this
Indenture and covering such other matters as the Trustee may reasonably
request; and
(4) at the option of the Issuer, either an Opinion of Counsel, or a letter
from legal counsel addressed to the Trustee permitting it to rely on an
Opinion of Counsel, substantially to the effect that:
(a) the form or forms of the Securities of such series have been duly
authorized and established in conformity with the provisions of this
Indenture;
(b) in the case of an underwritten offering, the terms of the Securities
of such series have been duly authorized and established in conformity
with the provisions of this Indenture, and, in the case of an offering
that is not underwritten, certain terms of the Securities of such series
have been established pursuant to a Board Resolution, an Officers'
Certificate or a supplemental indenture in accordance with this Indenture,
and when such other terms as are to be established pursuant to procedures
set forth in an Issuer Order shall have been established, all such terms
will have been duly authorized by the Issuer and will have been
established in conformity with the provisions of this Indenture;
(c) when the Securities of such series have been executed by the Issuer
and the Securities of such series have been authenticated by the Trustee
in accordance with the provisions of this Indenture and delivered to and
duly paid for by the purchasers thereof, they will have been duly issued
under this Indenture and will be valid and legally binding obligations of
the Issuer, enforceable in accordance with their respective terms, and
will be entitled to the benefits of this Indenture; and
(d) the execution and delivery by the Issuer of, and the performance by
the Issuer of its obligations under, the Securities of such series will
not contravene any provision of applicable law or the articles of
incorporation or bylaws of the Issuer or any agreement or other instrument
binding upon the Issuer or any of its Subsidiaries that is material to the
Issuer and its Subsidiaries, considered as one enterprise, or, to such
counsel's knowledge after the inquiry indicated therein (which shall be
reasonable), any judgment, order or decree of any governmental agency or
any court having jurisdiction over the Issuer or any Subsidiary of the
Issuer, and no consent, approval or authorization of any governmental body
or agency is required for the performance by the Issuer of its obligations
under the Securities, except such as are specified and have been obtained
and such as may be required by the securities or blue sky laws of the
various states in connection with the offer and sale of the Securities.
In addition, if the authentication and delivery relates to a new series of
Securities created by an indenture supplemental hereto, such Opinion of Counsel
shall also state that all laws and requirements with respect to the form and
execution by the Issuer of the supplemental indenture with respect to the series
of Securities have been complied with, the Issuer has corporate power to execute
and deliver any such supplemental indenture and has taken all necessary
corporate action for those purposes and any such supplemental indenture has been
executed and delivered and constitutes the legal, valid and binding obligation
of the Issuer enforceable in accordance with its terms.
In rendering such opinions, such counsel may qualify any opinions as to
enforceability by stating that such enforceability may be limited by bankruptcy,
insolvency, reorganization, liquidation, moratorium and other similar laws
affecting the rights and remedies of creditors and is subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law). Such counsel may rely, as to all matters
governed by the laws of jurisdictions other than the State of Delaware and the
federal law of the United States, upon opinions of other counsel (copies of
which shall be delivered to the Trustee), who shall be counsel reasonably
satisfactory to the Trustee, in which case the opinion shall state that such
counsel believes that both such counsel and the Trustee are entitled so to rely.
Such counsel may also state that, insofar as such opinion involves factual
matters, such counsel has relied, to the extent such counsel deems proper, upon
certificates of officers of the Issuer and its Subsidiaries and certificates of
public officials.
The Trustee shall have the right to decline to authenticate and deliver
any Securities of any series under this Section 2.4 if the Trustee, being
advised by counsel, determines that such action may not lawfully be taken by the
Issuer, or if the Trustee in good faith by its board of directors or board of
trustees, executive committee or a trust committee of directors or trustees or
Responsible Officers shall determine that such action would expose the Trustee
to personal liability to existing Holders or would adversely affect the
Trustee's own rights, duties or immunities under the Securities, this Indenture
or otherwise.
If the Issuer shall establish pursuant to Section 2.3 that the Securities
of a series are to be issued in the form of one or more Global Securities, then
the Issuer shall execute and the Trustee shall, in accordance with this Section
2.4 and the Issuer Order with respect to such series, authenticate and deliver
one or more Global Securities that (i) shall represent and shall be denominated
in an amount equal to the aggregate principal amount of all of the Securities of
such series to be issued in the form of Global Securities and not yet cancelled,
(ii) shall be registered in the name of the Depositary for such Global Security
or Securities or the nominee of such Depositary, (iii) shall be delivered by the
Trustee to such Depositary or pursuant to such Depositary's instructions, and
(iv) shall bear a legend substantially to the following effect: "Unless and
until it is exchanged in whole or in part for Securities in definitive
registered form, this Security may not be transferred except as a whole by the
Depositary to the nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary."
Each Depositary designated pursuant to Section 2.3 must, at the time of
its designation and at all times while it serves as Depositary, be a clearing
agency registered under the Securities Exchange Act of 1934, as amended, and any
other applicable statute or regulation.
SECTION 2.5 Execution of Securities. The Securities shall be signed on
behalf of the Issuer by the chairman of the Board of Directors, the president,
any vice president or the treasurer of the Issuer, under its corporate seal
which may, but need not, be attested by its secretary or one of its assistant
secretaries. Such signatures may be the manual or facsimile signatures of the
present or any future such officers. The seal of the Issuer may be in the form
of a facsimile thereof and may be impressed, affixed, imprinted or otherwise
reproduced on the Securities. Typographical and other minor errors or defects in
any such reproduction of a seal or any such signature shall not affect the
validity or enforceability of any Security that has been duly authenticated and
delivered by the Trustee.
In case any officer of the Issuer who shall have signed any of the
Securities shall cease to be such officer before the Security so signed shall be
authenticated and delivered by the Trustee or disposed of by the Issuer, such
Security nevertheless may be authenticated and delivered or disposed of as
though the person who signed such Security had not ceased to be such officer of
the Issuer; and any Security may be signed on behalf of the Issuer by such
persons as, at the actual date of the execution of such Security, shall be the
proper officers of the Issuer, although at the date of the execution and
delivery of this Indenture any such person was not such an officer.
SECTION 2.6 Certificate of Authentication. Only such Securities as shall
bear thereon a certificate of authentication substantially in the form
hereinbefore recited, executed by the Trustee by the manual signature of one of
its authorized signatories, or its Authenticating Agent, shall be entitled to
the benefits of this Indenture or be valid or obligatory for any purpose. The
execution of such certificate by the Trustee or its Authenticating Agent upon
any Security executed by the Issuer shall be conclusive evidence that the
Security so authenticated has been duly authenticated and delivered hereunder
and that the Holder is entitled to the benefits of this Indenture. Each
reference in this Indenture to authentication by the Trustee includes
authentication by an agent appointed pursuant to Section 6.14.
SECTION 2.7 Denomination and Date of Securities; Payments of Interest. The
Securities of each series shall be issuable in registered form in denominations
established as contemplated by Section 2.3 or, with respect to the Securities of
any series, if not so established, in denominations of $1,000 and any integral
multiple thereof. The Securities of each series shall be numbered, lettered or
otherwise distinguished in such manner or in accordance with such plan as the
officers of the Issuer executing the same may determine with the approval of the
Trustee, as evidenced by the execution and authentication thereof.
Each Security shall be dated the date of its authentication. The
Securities of each series shall bear interest, if any, from the date, and such
interest, if any, shall be payable on the dates, established as contemplated by
Section 2.3.
The Person in whose name any Security of any series is registered at the
close of business on any record date applicable to a particular series with
respect to any interest payment date for such series shall be entitled to
receive the interest, if any, payable on such interest payment date
notwithstanding any transfer or exchange of such Security subsequent to the
record date and prior to such interest payment date, except if and to the extent
the Issuer shall default in the payment of the interest due on such interest
payment date for such series, in which case such defaulted interest shall be
paid to the Persons in whose names Outstanding Securities for such series are
registered (a) at the close of business on a subsequent record date (which shall
be not less than five Business Days prior to the date of payment of such
defaulted interest) established by notice given by mail by or on behalf of the
Issuer to the Holders of Securities not less than 15 days preceding such
subsequent record date or (b) as determined by such other procedure as is
mutually acceptable to the Issuer and the Trustee. The term "record date" as
used with respect to any interest payment date (except a date for payment of
defaulted interest) for the Securities of any series shall mean the date
specified as such in the terms of the Securities of such series established as
contemplated by Section 2.3, or, if no such date is so established, if such
interest payment date is the first day of a calendar month, the fifteenth day of
the next preceding calendar month or, if such interest payment date is the
fifteenth day of a calendar month, the first day of such calendar month, whether
or not such record date is a Business Day.
SECTION 2.8 Registration, Transfer and Exchange. The Issuer will keep at
each office or agency to be maintained for the purpose as provided in Section
3.2 for each series of Securities a register or registers in which, subject to
such reasonable regulations as it may prescribe, it will provide for the
registration of Securities of each series and the registration of transfer of
Securities of such series. Each such register shall be in written form in the
English language or in any other form capable of being converted into such form
within a reasonable time. At all reasonable times such register or registers
shall be open for inspection and available for copying by the Trustee.
Upon due presentation for registration of transfer of any Security of any
series at any such office or agency to be maintained for the purpose as provided
in Section 3.2, the Issuer shall execute and the Trustee shall authenticate and
deliver in the name of the transferee or transferees a new Security or
Securities of the same series, maturity date, interest rate, if any, and
original issue date in authorized denominations for a like aggregate principal
amount.
All Securities presented for registration of transfer shall (if so
required by the Issuer or the Trustee) be duly endorsed by, or be accompanied by
a written instrument or instruments of transfer in form satisfactory to the
Issuer and the Trustee duly executed by, the Holder or his attorney duly
authorized in writing.
At the option of the Holder thereof, Securities of any series (other than
a Global Security, except as set forth below) may be exchanged for a Security or
Securities of such series having authorized denominations and an equal aggregate
principal amount, upon surrender of such Securities to be exchanged at the
agency of the Issuer that shall be maintained for such purpose in accordance
with Section 3.2.
The Issuer may require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any
registration of transfer of Securities. No service charge shall be made for any
such transaction or for any exchange of Securities of any series as contemplated
by the immediately preceding paragraph.
The Issuer shall not be required to exchange or register a transfer of (a)
any Securities of any series for a period of 15 days next preceding the first
mailing or publication of notice of redemption of Securities of such series to
be redeemed, (b) any Securities selected, called or being called for redemption,
in whole or in part, except, in the case of any Security to be redeemed in part,
the portion thereof not so to be redeemed or (c) any Security if the Holder
thereof has exercised his right, if any, to require the Issuer to repurchase
such Security in whole or in part, except the portion of such Security not
required to be repurchased.
Notwithstanding any other provision of this Section 2.8, unless and until
it is exchanged in whole or in part for Securities in definitive registered
form, a Global Security representing all or a part of the Securities of a series
may not be transferred except as a whole by the Depositary for such series to a
nominee of such Depositary or by a nominee of such Depositary to such Depositary
or another nominee of such Depositary or by such Depositary or any such nominee
to a successor Depositary for such series or a nominee of such successor
Depositary.
If at any time the Depositary for any Securities of a series represented
by one or more Global Securities notifies the Issuer that it is unwilling or
unable to continue as Depositary for such Securities or if at any time the
Depositary for such Securities shall no longer be eligible under Section 2.4,
the Issuer shall appoint a successor Depositary with respect to such Securities.
If a successor Depositary for such Securities is not appointed by the Issuer
within 90 days after the Issuer receives such notice or becomes aware of such
ineligibility, the Issuer's election pursuant to Section 2.3 that such
Securities be represented by one or more Global Securities shall no longer be
effective and the Issuer shall execute, and the Trustee, upon receipt of an
Issuer Order for the authentication and delivery of definitive Securities of
such series, will authenticate and deliver Securities of such series in
definitive registered form, in any authorized denominations, in an aggregate
principal amount equal to the principal amount of the Global Security or
Securities representing such Securities in exchange for such Global Security or
Securities.
The Issuer may at any time and in its sole discretion determine that the
Securities of any series issued in the form of one or more Global Securities
shall no longer be represented by a Global Security or Securities. In such
event, the Issuer shall execute, and the Trustee, upon receipt of an Issuer
Order for the authentication and delivery of definitive Securities of such
series, shall authenticate and deliver, Securities of such series in definitive
registered form, in any authorized denominations, in an aggregate principal
amount equal to the principal amount of the Global Security or Securities
representing such Securities, in exchange for such Global Security or
Securities.
If specified by the Issuer pursuant to Section 2.3 with respect to
Securities represented by a Global Security, the Depositary for such Global
Security may surrender such Global Security in exchange in whole or in part for
Securities of the same series in definitive registered form on such terms as are
acceptable to the Issuer and such Depositary. Thereupon, the Issuer shall
execute, and the Trustee shall authenticate and deliver, without service charge,
(i) to the Person specified by such Depositary, a new Security or
Securities of the same series, of any authorized denominations as requested
by such Person, in an aggregate principal amount equal to and in exchange for
such Person's beneficial interest in the Global Security; and
(ii) to such Depositary a new Global Security in a denomination equal to
the difference, if any, between the principal amount of the surrendered
Global Security and the aggregate principal amount of Securities
authenticated and delivered pursuant to clause (i) above.
Upon the exchange of a Global Security for Securities in definitive
registered form in authorized denominations, such Global Security shall be
cancelled by the Trustee or an agent of the Trustee. Securities in definitive
registered form issued in exchange for a Global Security pursuant to this
Section 2.8 shall be registered in such names and in such authorized
denominations as the Depositary for such Global Security, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee or an agent of the Trustee or the Issuer or an agent of the
Issuer. The Trustee or such agent shall deliver at its office such Securities to
or as directed by the Persons in whose names such Securities are so registered.
All Securities issued upon any registration of transfer or exchange of
Securities shall be valid and legally binding obligations of the Issuer,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Securities surrendered upon such registration of transfer or
exchange.
SECTION 2.9 Mutilated, Defaced, Destroyed, Lost and Stolen Securities. In
case any temporary or definitive Security shall become mutilated, defaced or be
destroyed, lost or stolen, the Issuer in its discretion may execute, and upon
the written request of the Issuer, the Trustee shall authenticate and deliver a
new Security of the same series, maturity date, interest rate, if any, and
original issue date, bearing a number or other distinguishing symbol not
contemporaneously outstanding, in exchange and substitution for the mutilated or
defaced Security, or in lieu of and in substitution for the Security so
destroyed, lost or stolen. In every case the applicant for a substitute Security
shall furnish to the Issuer and to the Trustee and any agent of the Issuer or
the Trustee such security or indemnity as may be required by the Trustee or the
Issuer or any such agent to indemnify and defend and to save each of the Trustee
and the Issuer and any such agent harmless and, in every case of destruction,
loss or theft, evidence to their satisfaction of the destruction, loss or theft
of such Security and of the ownership thereof and in the case of mutilation or
defacement, shall surrender the Security to the Trustee or such agent.
Upon the issuance of any substitute Security, the Issuer may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses (including the fees
and expenses of the Trustee or its agent) connected therewith. In case any
Security which has matured or is about to mature or has been called for
redemption in full shall become mutilated or defaced or be destroyed, lost or
stolen, the Issuer may instead of issuing a substitute Security, pay or
authorize the payment of the same (without surrender thereof except in the case
of a mutilated or defaced Security), if the applicant for such payment shall
furnish to the Issuer and to the Trustee and any agent of the Issuer or the
Trustee such security or indemnity as any of them may require to hold each of
them harmless, and, in every case of destruction, loss or theft, the applicant
shall also furnish to the Issuer and the Trustee and any agent of the Issuer or
the Trustee evidence to the Trustee's satisfaction of the destruction, loss or
theft of such Security and of the ownership thereof.
Every substitute Security of any series issued pursuant to the provisions
of this Section by virtue of the fact that any such Security is destroyed, lost
or stolen shall constitute an additional contractual obligation of the Issuer,
whether or not the destroyed, lost or stolen Security shall be at any time
enforceable by anyone and shall be entitled to all the benefits of (but shall be
subject to all the limitations of rights set forth in) this Indenture equally
and proportionately with any and all other Securities of such series duly
authenticated and delivered hereunder. All Securities shall be held and owned
upon the express condition that, to the extent permitted by law, the foregoing
provisions are exclusive with respect to the replacement or payment of
mutilated, defaced, destroyed, lost or stolen Securities and shall preclude any
and all other rights or remedies notwithstanding any law or statute existing or
hereafter enacted to the contrary with respect to the replacement or payment of
negotiable instruments or other securities without their surrender.
SECTION 2.10 Cancellatin of Securities: Disposition Thereof. All Securities
surrendered for payment, redemption, tion Thereof registration of transfer or
exchange, or for credit against any payment in respect of a sinking or analogous
fund, if surrendered to the Issuer or any agent of the Issuer or the Trustee or
any agent of the Trustee, shall be delivered to the Trustee or its agent for
cancellation or, if surrendered to the Trustee, shall be cancelled by it; and no
Securities shall be issued in lieu thereof except as expressly permitted by any
of the provisions of this Indenture. The Trustee shall dispose of all cancelled
Securities in accordance with its standard procedures and shall deliver a
certificate of such disposition to the Company. If the Issuer or its agent shall
acquire any of the Securities, such acquisition shall not operate as a
redemption or satisfaction of the indebtedness represented by such Securities
unless and until the same are delivered to the Trustee or its agent for
cancellation.
SECTION 2.11 Temporary Securities. Pending the preparation of definitive
Securities for any series, the Issuer may execute and the Trustee shall
authenticate and deliver temporary Securities for such series (printed,
lithographed, typewritten or otherwise reproduced, in each case in form
satisfactory to the Trustee). Temporary Securities of any series shall be
issuable in any authorized denomination, and substantially in the form of the
definitive Securities of such series but with such omissions, insertions and
variations as may be appropriate for temporary Securities, all as may be
determined by the Issuer with the concurrence of the Trustee as evidenced by the
execution and authentication thereof. Temporary Securities may contain such
references to any provisions of this Indenture as may be appropriate. Every
temporary Security shall be executed by the Issuer and be authenticated by the
Trustee upon the same conditions and in substantially the same manner, and with
like effect, as the definitive Securities. Without unreasonable delay the Issuer
shall execute and shall furnish definitive Securities of such series and
thereupon temporary Securities of such series may be surrendered in exchange
therefor without charge at each office or agency to be maintained by the Issuer
for that purpose pursuant to Section 3.2 and the Trustee shall authenticate and
deliver in exchange for such temporary Securities of such series an equal
aggregate principal amount of definitive Securities of the same series having
authorized denominations. Until so exchanged, the temporary Securities of any
series shall be entitled to the same benefits under this Indenture as definitive
Securities of such series, unless otherwise established pursuant to Section 2.3.
SECTION 2.12 CUSIP Numbers. The Issuer in issuing the Securities may use
"CUSIP" numbers (if then generally in use), and, if so, the Trustee shall use
"CUSIP" numbers in notices of redemption as a convenience to Holders; provided
that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Securities or as contained
in any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall
not be affected by any defect in or omission of such numbers.
ARTICLE THREE
COVENANTS OF THE ISSUER
SECTION 3.1 Payment of Principal and Interest. The Issuer covenants and
agrees that it will duly and punctually pay or cause to be paid the principal
of, premium, if any, and interest, if any, on each of the Securities at the
place, at the respective times and in the manner provided in the Securities.
SECTION 3.2 Office for Notices and Payments, etc. So long as any of the
Securities are Outstanding, the Issuer will maintain in each Place of Payment,
an office or agency where the Securities may be presented for payment, an office
or agency where the Securities may be presented for registration of transfer and
for exchange as provided in this Indenture, and an office or agency where
notices and demands to or upon the Issuer in respect of the Securities or of
this Indenture may be served. In case the Issuer shall at any time fail to
maintain any such office or agency, or shall fail to give notice to the Trustee
of any change in the location thereof, presentation may be made and notice and
demand may be served in respect of the Securities or of this Indenture at the
Corporate Trust Office. The Issuer hereby initially designates the Corporate
Trust Office for each such purpose and appoints the Trustee as registrar and
paying agent and as the agent upon whom notices and demands may be served with
respect to the Securities.
SECTION 3.3 No Interest Extension. In order to prevent any accumulation of
claims for interest after maturity thereof, the Issuer will not directly or
indirectly extend or consent to the extension of the time for the payment of any
claim for interest on any of the Securities and will not directly or indirectly
be a party to or approve any such arrangement by the purchase or funding of said
claims or in any other manner; provided, however, that this Section 3.3 shall
not apply in any case where an extension shall be made pursuant to a plan
proposed by the Issuer to the Holders of all Securities of any series then
Outstanding.
SECTION 3.4 Appointments to Fill Vacancies in Trustee's Office. The Issuer,
whenever necessary to avoid or fill a vacancy in the office of the Trustee, will
appoint, in the manner provided in Section 6.10, a Trustee, so that there shall
at all times be a Trustee hereunder.
SECTION 3.5 Provision as to Paying Aent. (a) If the Issuer shall appoint a
paying agent other than the Trustee, it will cause such paying agent to execute
and deliver to the Trustee an instrument in which such paying agent shall agree
with the Trustee, subject to the provisions of this Section 3.5,
(1) that it will hold all sums held by it as such paying agent for the
payment of the principal of or interest, if any, on the Securities (whether
such sums have been paid to it by the Issuer or by any other obligor on the
Securities) in trust for the benefit of the Holders of the Securities and the
Trustee; and
(2) that it will give the Trustee notice of any failure by the Issuer (or
by any other obligor on the Securities) to make any payment of the principal
of, premium, if any, or interest, if any, on the Securities when the same
shall be due and payable; and
(3) that it will, at any time during the continuance of any such failure,
upon the written request of the Trustee, forthwith pay to the Trustee all
sums so held in trust by such paying agent.
(b) If the Issuer shall act as its own paying agent, it will, on or before
each due date of the principal of or interest, if any, on the Securities, set
aside, segregate and hold in trust for the benefit of the Holders of the
Securities a sum sufficient to pay such principal, premium, if any, or interest,
if any, so becoming due and will notify the Trustee of any failure to take such
action and of any failure by the Issuer (or by any other obligor under the
Securities) to make any payment of the principal of, premium, if any, or
interest, if any, on the Securities when the same shall become due and payable.
(c) Anything in this Section 3.5 to the contrary notwithstanding, the
Issuer may, at any time, for the purpose of obtaining a satisfaction and
discharge of this Indenture, or for any other reason, pay or cause to be paid to
the Trustee all sums held in trust by it, or any paying agent hereunder, as
required by this Section 3.5, such sums to be held by the Trustee upon the
trusts herein contained.
(d) Anything in this Section 3.5 to the contrary notwithstanding, any
agreement of the Trustee or any paying agent to hold sums in trust as provided
in this Section 3.5 is subject to Sections 10.3 and 10.4.
(e) Whenever the Issuer shall have one or more paying agents, it will, on
or before each due date of the principal of or interest, if any, on any
Securities, deposit with a paying agent a sum sufficient to pay the principal,
premium, if any, or interest, if any, so becoming due, such sum to be held in
trust for the benefit of the Persons entitled to such principal, premium, if
any, or interest, if any, and (unless such paying agent is the Trustee) the
Issuer will promptly notify the Trustee of its action or failure so to act.
ARTICLE FOUR
SECURITYHOLDERS LISTS AND REPORTS BY THE
ISSUER AND THE TRUSTEE
SECTION 4.1 Issuer to Furnish Trustee Information as to Names and Addresses
of Securityholders. The Issuer and any other obligor on the Securities covenant
and agree that they will furnish or cause to be furnished to the Trustee a list
in such form as the Trustee may reasonably require of the names and addresses of
the Holders of the Securities of each series:
(a) semiannually and not more than 15 days after each January 1 and July
1, and
(b) at such other times as the Trustee may request in writing, within 15
days after receipt by the Issuer of any such request,
provided that if and so long as the Trustee shall be the registrar for such
series, such list shall not be required to be furnished.
SECTION 4.2 Preservation and Disclosure of Securityholders Lists. (a) The
Trustee shall preserve, in as current a form as is reasonably practicable, all
information as to the names and addresses of the Holders of each series of
Securities (i) contained in the most recent list furnished to it as provided in
Section 4.1, and (ii) received by it in the capacity of registrar or paying
agent for such series, if so acting. The Trustee may destroy any list furnished
to it as provided in Section 4.1 upon receipt of a new list so furnished.
(b) In case three or more Holders of Securities (hereinafter referred to
as "applicants") apply in writing to the Trustee and furnish to the Trustee
reasonable proof that each such applicant has owned a Security for a period of
at least six months preceding the date of such application, and such application
states that the applicants desire to communicate with other Holders of
Securities of a particular series (in which case the applicants must all hold
Securities of such series) or with Holders of all Securities with respect to
their rights under this Indenture or under such Securities and such application
is accompanied by a copy of the form of proxy or other communication which such
applicants propose to transmit, then the Trustee shall, within five Business
Days after the receipt of such application, at its election, either
(i) afford to such applicants access to the information preserved at the
time by the Trustee in accordance with the provisions of subsection (a) of
this Section 4.2, or
(ii) inform such applicants as to the approximate number of Holders of
Securities of such series or of all Securities, as the case may be, whose
names and addresses appear in the information preserved at the time by the
Trustee, in accordance with the provisions of subsection (a) of this
Section 4.2, and as to the approximate cost of mailing to such
Securityholders the form of proxy or other communication, if any,
specified in such application.
If the Trustee shall elect not to afford to such applicants access to such
information, the Trustee shall, upon the written request of such applicants,
mail to each Securityholder of such series or all Holders of Securities, as the
case may be, whose name and address appears in the information preserved at the
time by the Trustee in accordance with the provisions of subsection (a) of this
Section 4.2 a copy of the form of proxy or other communication which is
specified in such request, with reasonable promptness after a tender to the
Trustee of the material to be mailed and of payment, or provision for the
payment, of the reasonable expenses of mailing, unless within five days after
such tender, the Trustee shall mail to such applicants and file with the
Commission, together with a copy of the material to be mailed, a written
statement to the effect that, in the opinion of the Trustee, such mailing would
be contrary to the best interests of the Holders of Securities of such series or
of all Securities, as the case may be, or would be in violation of applicable
law. Such written statement shall specify the basis of such opinion. If the
Commission, after opportunity for a hearing upon the objections specified in the
written statement so filed, shall enter an order refusing to sustain any of such
objections or if, after the entry of an order sustaining one or more of such
objections, the Commission shall find, after notice and opportunity for hearing,
that all the objections so sustained have been met, and shall enter an order so
declaring, the Trustee shall mail copies of such material to all such
Securityholders with reasonable promptness after the entry of such order and the
renewal of such tender; otherwise the Trustee shall be relieved of any
obligation or duty to such applicants respecting their application.
(c) Each and every Holder of Securities, by receiving and holding the
same, agrees with the Issuer and the Trustee that neither the Issuer nor the
Trustee nor any agent of the Issuer or the Trustee shall be held accountable by
reason of the disclosure of any such information as to the names and addresses
of the Holders of Securities in accordance with the provisions of subsection (b)
of this Section 4.2, regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of mailing
any material pursuant to a request made under such subsection (b).
SECTION 4.3 Reports by the Issuer. The Issuer covenants:
(a) to file with the Trustee, within 15 days after the Issuer is required
to file the same with the Commission, copies of the annual reports and of the
information, documents and other reports (or copies of such portions of any of
the foregoing as the Commission may from time to time by rules and regulations
prescribe), if any, which the Issuer may be required to file with the Commission
pursuant to Section 13 or Section 15(d) of the Exchange Act; or, if the Issuer
is not required to file information, documents or reports pursuant to either of
such Sections, then to file with the Trustee and the Commission, in accordance
with rules and regulations prescribed from time to time by the Commission, such
of the supplementary and periodic information, documents and reports which may
be required pursuant to Section 13 of the Exchange Act in respect of a debt
security listed and registered on a national securities exchange as may be
prescribed from time to time in such rules and regulations;
(b) to file with the Trustee and the Commission, in accordance with rules
and regulations prescribed from time to time by the Commission, such additional
information, documents and reports with respect to compliance by the Issuer with
the conditions and covenants provided for in this Indenture as may be required
from time to time by such rules and regulations;
(c) to transmit by mail to the Holders of Securities within 30 days after
the filing thereof with the Trustee, in the manner and to the extent provided in
Section 4.4(c), such summaries of any information, documents and reports
required to be filed by the Issuer pursuant to subsections (a) and (b) of this
Section 4.3 as may be required to be transmitted to such Holders by rules and
regulations prescribed from time to time by the Commission; and
(d) to furnish to the Trustee, not less than annually, a brief certificate
from the principal executive officer, principal financial officer or principal
accounting officer as to his knowledge of the Issuer's compliance with all
conditions and covenants under this Indenture. For purposes of this subsection
(d), such compliance shall be determined without regard to any period of grace
or requirement of notice provided under this Indenture.
SECTION 4.4 Reports by the Trustee. (a) The Trustee shall transmit to
Holders such reports concerning the Trustee and its actions under this Indenture
as may be required pursuant to the Trust Indenture Act of 1939 at the times and
in the manner provided pursuant thereto. To the extent that any such report is
required by the Trust Indenture Act of 1939 with respect to any 12 month period,
such report shall cover the 12 month period ending July 15 and shall be
transmitted by the next succeeding September 15.
(b) A copy of each such report shall, at the time of such transmission to
Securityholders, be furnished to the Issuer and be filed by the Trustee with
each stock exchange upon which the Securities of any applicable series are
listed and also with the Commission. The Issuer agrees to promptly notify the
Trustee with respect to any series when and as the Securities of such series
become admitted to trading on any national securities exchange.
ARTICLE FIVE
REMEDIES OF THE TRUSTEE AND SECURITY HOLDERS
ON EVENT OF DEFAULT
SECTION 5.1 Events of Default. "Event of Default", wherever used herein
with respect to Securities of any series, means any one or more of the following
events (whatever the reason for such Event of Default and whether it shall be
occasioned by the provisions of Article Thirteen or otherwise), unless it is
either inapplicable to a particular series or it is specifically deleted or
modified in or pursuant to the Board Resolution or supplemental indenture
establishing such series of Securities or in the form of Security, for such
series:
(a) default in the payment of the principal of or premium, if any, of the
Securities of such series as and when the same shall become due and payable
either at maturity, upon redemption, by declaration or otherwise; or
(b) default in the payment of any installment of interest upon any of the
Securities of such series as and when the same shall become due and payable, and
continuance of such default for a period of 30 days; or
(c) default in the payment or satisfaction of any sinking fund or other
purchase obligation with respect to Securities of such series, as and when such
obligation shall become due and payable; or
(d) failure on the part of the Issuer duly to observe or perform any other
of the covenants or agreements on the part of the Issuer in the Securities of
such series or in this Indenture continued for a period of 60 days after the
date on which written notice of such failure, requiring the same to be remedied,
shall have been given by certified or registered mail to the Issuer by the
Trustee, or to the Issuer and the Trustee by the Holders of at least 25% in
aggregate principal amount of the Securities of such series then Outstanding; or
(e) without the consent of the Issuer a court having jurisdiction shall
enter an order for relief with respect to the Issuer or any of its Significant
Subsidiaries under any applicable bankruptcy, insolvency or other similar law of
the United States of America, any state thereof or the District of Columbia, or
without the consent of the Issuer a court having jurisdiction shall enter a
judgment, order or decree adjudging the Issuer or any of its Significant
Subsidiaries bankrupt or insolvent, or enter an order for relief for
reorganization, arrangement, adjustment or composition of or in respect of the
Issuer or any of its Significant Subsidiaries under any applicable bankruptcy,
insolvency or other similar law of the United States of America, any state
thereof or the District of Columbia, and the continuance of any such judgment,
order or decree is unstayed and in effect for a period of 60 consecutive days;
or
(f) the Issuer or any of its Significant Subsidiaries shall institute
proceedings for entry of an order for relief with respect to the Issuer or any
of its Significant Subsidiaries under any applicable bankruptcy, insolvency or
other similar law of the United States of America, any state thereof or the
District of Columbia, or for an adjudication of insolvency, or shall consent to
the institution of bankruptcy or insolvency proceedings against it, or shall
file a petition seeking, or seek or consent to reorganization, arrangement,
composition or relief under any applicable bankruptcy, insolvency or other
similar law of the United States of America, any state thereof or the District
of Columbia, or shall consent to the filing of such petition or to the
appointment of a receiver, custodian, liquidator, assignee, trustee,
sequestrator or similar official of the Issuer or of substantially all of its
property, or the Issuer or any of its Significant Subsidiaries shall make a
general assignment for the benefit of creditors as recognized under any
applicable bankruptcy, insolvency or other similar law of the United States of
America, any state thereof or the District of Columbia; or
(g) default under any bond, debenture, note or other evidence of
Indebtedness for money borrowed by the Issuer or any of its Significant
Subsidiaries 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 by the Issuer or any of its Significant Subsidiaries, whether
such Indebtedness exists on the date hereof or shall hereafter be created, which
default shall have resulted in such Indebtedness becoming or being declared due
and payable prior to the date on which it would otherwise have become due and
payable, or any default in payment of such Indebtedness (after the expiration of
any applicable grace periods and the 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, without each such default and acceleration having been
rescinded, annulled or waived within a period of 20 days after there shall have
been given by certified or registered mail to the Issuer by the Trustee, or to
the Issuer and the Trustee by the Holders of at least 25% in aggregate principal
amount of the Securities of such series then Outstanding, a written notice
specifying each such default and requiring the Issuer to cause each such default
and acceleration to be rescinded or annulled and stating that such notice is a
"Notice of Default" hereunder; or
(h) any other Event of Default provided with respect to the Securities of
such series.
If an Event of Default with respect to Securities of any series then
Outstanding occurs and is continuing, then and in each and every such case,
unless the principal of all of the Securities of such series shall have already
become due and payable, either the Trustee or the Holders of not less than 25%
in aggregate principal amount of the Securities of such series then Outstanding,
by notice in writing to the Issuer (and to the Trustee if given by
Securityholders), may declare the principal (or, if the Securities of such
series are Original Issue Discount Securities, such portion of the principal
amount as may be specified in the terms of such series) of all the Securities of
such series and the interest, if any, accrued thereon to be due and payable
immediately, and upon any such declaration the same shall become and shall be
immediately due and payable, notwithstanding anything to the contrary contained
in this Indenture or in the Securities of such series. This provision, however,
is subject to the condition that, if at any time after the unpaid principal
amount (or such specified amount) of the Securities of such series shall have
been so declared due and payable and before any judgment or decree for the
payment of the moneys due shall have been obtained or entered as hereinafter
provided, the Issuer shall pay or shall deposit with the Trustee a sum
sufficient to pay all matured installments of interest, if any, upon all of the
Securities of such series and the principal of any and all Securities of such
series which shall have become due otherwise than by acceleration (with interest
on overdue installments of interest, if any, to the extent that payment of such
interest is enforceable under applicable law and on such principal at the rate
borne by the Securities of such series to the date of such payment or deposit)
and the reasonable compensation, disbursements, expenses and advances of the
Trustee and all other amounts due the Trustee under Section 6.6, and any and all
defaults under this Indenture, other than the nonpayment of such portion of the
principal amount of and accrued interest, if any, on Securities of such series
which shall have become due by acceleration, shall have been cured or shall have
been waived in accordance with Section 5.7 or provision deemed by the Trustee to
be adequate shall have been made therefor, then and in every such case the
Holders of a majority in aggregate principal amount of the Securities of such
series then Outstanding, by written notice to the Issuer and to the Trustee, may
rescind and annul such declaration and its consequences; but no such rescission
and annulment shall extend to or shall affect any subsequent default, or shall
impair any right consequent thereon. Notwithstanding the previous sentence, no
waiver shall be effective against any Holder for any Event of Default or event
which with notice or lapse of time or both would be an Event of Default with
respect to any covenant or provision which cannot be modified or amended without
the consent of the Holder of each outstanding Security affected thereby, unless
all such affected Holders agree, in writing, to waive such Event of Default or
other event.
If any Event of Default with respect to the Issuer specified in Section
5.1(e) or 5.1(f) occurs, all unpaid principal amount (or, if the Securities of
any series then Outstanding are Original Issue Discount Securities, such portion
of the principal amount as may be specified in the terms of each such series)
and accrued interest on all Securities of each series then Outstanding shall
ipso facto become and be immediately due and payable without any declaration or
other act by the Trustee or any Securityholder.
If the Trustee shall have proceeded to enforce any right under this
Indenture and such proceedings shall have been discontinued or abandoned because
of such rescission or annulment or for any other reason or shall have been
determined adversely to the Trustee, then and in every such case the Issuer, the
Trustee and the Securityholders shall be restored respectively to their several
positions and rights hereunder, and all rights, remedies and powers of the
Issuer, the Trustee and the Securityholders shall continue as though no such
proceeding had been taken.
Except with respect to an Event of Default pursuant to Section 5.1 (a), (b)
or (c), the Trustee shall not be charged with knowledge of any Event of Default
unless written notice thereof shall have been given to a Responsible Officer by
the Issuer, a paying agent or any Securityholder.
SECTION 5.2 Payment of Securities on Defaults: Suit Therefor. The Issuer
covenants that (a) if default shall be made in the r payment of any installment
of interest upon any of the Securities of any series then Outstanding as and
when the same shall become due and payable, and such default shall have
continued for a period of 30 days, or (b) if default shall be made in the
payment of the principal of any of the Securities of such series as and when the
same shall have become due and payable, whether at maturity of the Securities of
such series or upon redemption or by declaration or otherwise, then, upon demand
of the Trustee, the Issuer will pay to the Trustee, for the benefit of the
Holders of the Securities, the whole amount that then shall have become due and
payable on all such Securities of such series for principal or interest, if any,
or both, as the case may be, with interest upon the overdue principal and (to
the extent that payment of such interest is enforceable under applicable law)
upon the overdue installments of interest, if any, at the rate borne by the
Securities of such series; and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, including a
reasonable compensation to the Trustee, its agents, attorneys and counsel, and
any expenses or liabilities incurred by the Trustee hereunder other than through
its negligence or bad faith.
If the Issuer shall fail forthwith to pay such amounts upon such demand,
the Trustee, in its own name and as trustee of an express trust, shall be
entitled and empowered to institute any actions or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Issuer or any other obligor on the
Securities of such series and collect in the manner provided by law out of the
property of the Issuer or any other obligor on the Securities of such series,
wherever situated, the moneys adjudged or decreed to be payable.
If there shall be pending proceedings for the bankruptcy or for the
reorganization of the Issuer or any other obligor on the Securities of any
series then Outstanding under any bankruptcy, insolvency or other similar law
now or hereafter in effect, or if a receiver or trustee or similar official
shall have been appointed for the property of the Issuer or such other obligor,
or in the case of any other similar judicial proceedings relative to the Issuer
or other obligor upon the Securities of such series, or to the creditors or
property of the Issuer or such other obligor, the Trustee, irrespective of
whether the principal of the Securities of such series shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand pursuant to the provisions of
this Section 5.2, shall be entitled and empowered by intervention in such
proceedings or otherwise to file and prove a claim or claims for the whole
amount of principal and interest, if any, owing and unpaid in respect of the
Securities of such series, and, in case of any judicial proceedings, to file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and of the Securityholders
allowed in such judicial proceedings relative to the Issuer or any other obligor
on the Securities of such series, its or their creditors, or its or their
property, and to collect and receive any moneys or other property payable or
deliverable on any such claims, and to distribute the same after the deduction
of its charges and expenses, and any receiver, assignee or trustee or similar
official in bankruptcy or reorganization is hereby authorized by each of the
Securityholders to make such payments to the Trustee, and, if the Trustee shall
consent to the making of such payments directly to the Securityholders, to pay
to the Trustee any amount due it for compensation and expenses or otherwise
pursuant to Section 6.6, including counsel fees and expenses incurred by it up
to the date of such distribution. To the extent that such payment of reasonable
compensation, expenses and counsel fees and expenses out of the estate in any
such proceedings shall be denied for any reason, payment of the same shall be
secured by a lien on, and shall be paid out of, any and all distributions,
dividends, moneys, securities and other property which the Holders of the
Securities of such series may be entitled to receive in such proceedings,
whether in liquidation or under any plan of reorganization or arrangement or
otherwise.
All rights of action and of asserting claims under this Indenture, or
under any of the Securities, may be enforced by the Trustee without the
possession of any of the Securities, or the production thereof at any trial or
other proceeding relative thereto, and any such suit or proceeding instituted by
the Trustee shall be brought in its own name as trustee of an express trust, and
any recovery of judgment shall be for the ratable benefit of the Holders of the
Securities of the series in respect of which such judgment has been recovered.
SECTION 5.3 Application of Moneys Collected by Trustee. Any moneys
collected by the Trustee pursuant to Section 5.2 with respect to Securities of
any series then Outstanding shall be applied in the order following, at the date
or dates fixed by the Trustee for the distribution of such moneys, upon
presentation of the several Securities of such series, and stamping thereon the
payment, if only partially paid, and upon surrender thereof, if fully paid:
FIRST: To the payment of costs and expenses of collection and reasonable
compensation to the Trustee, its agents, attorneys and counsel, and of all
other expenses and liabilities incurred, and all advances made, by the
Trustee pursuant to Section 6.6 except as a result of its negligence or bad
faith;
SECOND: If the principal of the Outstanding Securities of such series
shall not have become due and be unpaid, to the payment of interest, if any,
on the Securities of such series, in the order of the maturity of the
installments of such interest, if any, with interest (to the extent that such
interest has been collected by the Trustee) upon the overdue installments of
interest, if any, at the rate borne by the Securities of such series, such
payment to be made ratably to the Persons entitled thereto;
THIRD: If the principal of the Outstanding Securities of such series shall
have become due, by declaration or otherwise, to the payment of the whole
amount then owing and unpaid upon the Securities of such series for principal
and interest, if any, with interest on the overdue principal and (to the
extent that such interest has been collected by the Trustee) upon overdue
installments of interest, if any, at the rate borne by the Securities of such
series; and in case such moneys shall be insufficient to pay in full the
whole amounts so due and unpaid upon the Securities of such series, then to
the payment of such principal and interest, if any, without preference or
priority of principal over interest or of interest over principal, or of any
installment of interest over any other installment of interest, or of any
Security over any other Security, ratably to the aggregate of such principal
and accrued and unpaid interest; and
FOURTH: To the payment of any surplus then remaining to the
Issuer, its successors or assigns, or to whomsoever may be
lawfully entitled to receive the same.
No claim for interest which in any manner at or after maturity shall have
been transferred or pledged separate or apart from the Securities to which it
relates, or which in any manner shall have been kept alive after maturity by an
extension (otherwise than pursuant to an extension made pursuant to a plan
proposed by the Issuer to the Holders of all Securities of any series then
Outstanding), purchase, funding or otherwise by or on behalf or with the consent
or approval of the Issuer shall be entitled, in case of a default hereunder, to
any benefit of this Indenture, except after prior payment in full of the
principal of all Securities of any series then Outstanding and of all claims for
interest not so transferred, pledged, kept alive, extended, purchased or funded.
SECTION 5.4 Proceedings by Securityholders. No Holder of any Securities of
any series then Outstanding shall have any right by virtue of or by availing of
any provision of this Indenture to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Indenture or for the
appointment of a receiver or trustee or similar official, or for any other
remedy hereunder, unless such Holder previously shall have given to the Trustee
written notice of default and of the continuance thereof, as hereinbefore
provided, and unless the Holders of not less than 25% in aggregate principal
amount of the Securities of such series then Outstanding shall have made written
request to the Trustee to institute such action, suit or proceeding in its own
name as Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby, and 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, it being understood and intended,
and being expressly covenanted by the Holder of every Security of such series
with every other Holder and the Trustee, that no one or more Holders of
Securities of such series shall have any right in any manner whatever by virtue
of or by availing of any provision of this Indenture or of the Securities to
affect, disturb or prejudice the rights of any other Holder of such Securities
of such series, or to obtain or seek to obtain priority over or preference as to
any other such Holder, or to enforce any right under this Indenture or the
Securities, except in the manner herein provided and for the equal, ratable and
common benefit of all Holders of Securities of such series.
Notwithstanding any other provisions in this Indenture, but subject to
Article Thirteen, the right of any Holder of any Security to receive payment of
the principal of, premium, if any, and interest, if any, on such Security, on or
after the respective due dates expressed in such Security, or to institute suit
for the enforcement of any such payment on or after such respective dates shall
not be impaired or affected without the consent of such Holder.
SECTION 5.5 Proceedings by Trustee. In case of an Event of Default
hereunder, the Trustee may in its discretion proceed to protect and enforce the
rights vested in it by this Indenture by such appropriate judicial proceedings
as the Trustee shall deem most effectual to protect and enforce any of such
rights, either by suit in equity or by action at law or by proceedings in
bankruptcy or otherwise, whether for the specific enforcement of any covenant or
agreement contained in this Indenture or in aid of the exercise of any power
granted in this Indenture, or to enforce any other legal or equitable right
vested in the Trustee by this Indenture or by law.
SECTION 5.6 Remedies Cumulative and Continuing. All powers and remedies
given by this Article Five to the Trustee or to the Securityholders shall, to
the extent permitted by law, be deemed cumulative and not exclusive of any
thereof or of any other powers and remedies available to the Trustee or the
Securityholders, by judicial proceedings or otherwise, to enforce the
performance or observance of the covenants and agreements contained in this
Indenture, and no delay or omission of the Trustee or of any Securityholder to
exercise any right or power accruing upon any default occurring and continuing
as aforesaid shall impair any such right or power, or shall be construed to be a
waiver of any such default or an acquiescence therein; and, subject to the
provisions of Section 5.4, every power and remedy given by this Article Five or
by law to the Trustee or to the Securityholders may be exercised from time to
time, and as often as shall be deemed expedient, by the Trustee or by the
Securityholders.
SECTION 5.7 Direction of Proceedings; Waiver of Defaults by Majority of
Shareholders. The Holders of a majority in aggregate principal amount of the
Securities of any series then Outstanding shall have the right to 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 Securities of such series; provided, however, that (subject to the
provisions of Section 6.1) the Trustee shall have the right to decline to follow
any such direction if the Trustee shall determine upon advice of counsel that
the action or proceeding so directed may not lawfully be taken or if the Trustee
in good faith by its board of directors, its executive committee, or a trust
committee of directors or Responsible Officers or both shall determine that the
action or proceeding so directed would involve the Trustee in personal
liability. The Holders of a majority in aggregate principal amount of the
Securities of any series then Outstanding may on behalf of the Holders of all of
the Securities of such series waive any past default or Event of Default
hereunder and its consequences except a default in the payment of interest, if
any, on, or the principal of, the Securities of such series. Upon any such
waiver the Issuer, the Trustee and the Holders of the Securities of such series
shall be restored to their former positions and rights hereunder, respectively;
but no such waiver shall extend to any subsequent or other default or Event of
Default or impair any right consequent thereon. Whenever any default or Event of
Default hereunder shall have been waived as permitted by this Section 5.7, said
default or Event of Default shall for all purposes of the Securities and this
Indenture be deemed to have been cured and to be not continuing.
SECTION 5.8 Notice of Defaults. The Trustee shall, within 30 days after the
occurrence of a default, with respect to Securities of any series then
Outstanding, mail to all Holders of Securities of such series, as the names and
the addresses of such Holders appear upon the Securities register, notice of all
defaults known to the Trustee with respect to such series, unless such defaults
shall have been cured before the giving of such notice (the term "defaults" for
the purpose of this Section 5.8 being hereby defined to be the events specified
in clauses (a), (b), (c), (d), (e), (f), (g) and (h) of Section 5.1, not
including periods of grace, if any, provided for therein and irrespective of the
giving of the written notice specified in said clause (d) or (g) but in the case
of any default of the character specified in said clause (d) or (g) no such
notice to Securityholders shall be given until at least 60 days after the giving
of written notice thereof to the Issuer pursuant to said clause (d) or (g), as
the case may be); provided, however, that, except in the case of default in the
payment of the principal of or interest, if any, on any of the Securities, or in
the payment or satisfaction of any sinking fund or other purchase obligation,
the Trustee shall be protected in withholding such notice if and so long as the
board of directors, the executive committee, or a trust committee of directors
or Responsible Officers or both, of the Trustee in good faith determines that
the withholding of such notice is in the best interests of the Securityholders.
SECTION 5.9 Undertaking to Pay Costs. All parties to this Indenture agree,
and each Holder of any Security by his acceptance thereof shall be deemed to
have agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken or omitted by it as Trustee, the filing by any
party litigant in such suit of an undertaking to pay the cost of such suit, and
that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees and expenses, against any party litigant in such
suit, having due regard to the merits and good faith of the claims or defenses
made by such party litigant; but the provisions of this Section 5.9 shall not
apply to any suit instituted by the Trustee, to any suit instituted by any
Securityholder, or group of Securityholders, holding in the aggregate more than
10% in principal amount of the Securities of any series then Outstanding, or to
any suit instituted by any Securityholders for the enforcement of the payment of
the principal of or interest, if any, on any Security against the Issuer on or
after the due date expressed in such Security.
ARTICLE SIX
CONCERNING THE TRUSTEE
SECTION 6.1 Duties and Responsibilities of the Trustee; During Default;
Prior to Default. In case an Event of Default with respect to the Securities of
a series has occurred (which has not been cured or waived) the Trustee shall
exercise with respect to such series of Securities such of the rights and powers
vested in it by this Indenture, and use the same degree of care and skill in
their exercise as a prudent man would exercise or use under the circumstances in
the conduct of his own affairs.
No provision of this Indenture shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act or
its own wilful misconduct, except that:
(a) prior to the occurrence of an Event of Default with respect to the
Securities of any series and after the curing or waiving of all such Events of
Default with respect to such series which may have occurred:
(i) the duties and obligations of the Trustee with respect to the
Securities of any series shall be determined solely by the express
provisions of this Indenture, and the Trustee shall not be liable except
for the performance of such duties and obligations as are specifically set
forth in this Indenture, and no implied covenants or obligations shall be
read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on the part of the Trustee, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any statements,
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture; but in the case of any such statements,
certificates or opinions which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall be under a duty
to examine the same to determine whether or not they conform to the
requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment made in good
faith by a Responsible Officer or Responsible Officers of the Trustee, unless it
shall be proved that the Trustee was negligent in ascertaining the pertinent
facts; and
(c) the Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the direction of the
Holders pursuant to Section 5.7 relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee, under this Indenture.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there shall be reasonable ground for believing that the
repayment of such funds or adequate indemnity against such liability is not
reasonably assured to it.
SECTION 6.2 Certain Rights of the Trustee. Subject to Section 6.1:
(a) the Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, Officers' Certificate or any other certificate,
statement, instrument, opinion, report, notice, request, consent, order, bond,
debenture, note, coupon, security or other paper or document believed by it to
be genuine and to have been signed or presented by the proper party or parties;
(b) any request, direction, order or demand of the Issuer mentioned herein
shall be sufficiently evidenced by an Officers' Certificate or Issuer Order
(unless other evidence in respect thereof be herein specifically prescribed);
and any resolution of the Board of Directors may be evidenced to the Trustee by
a Board Resolution;
(c) the Trustee may consult with counsel of its selection and any advice
of such counsel promptly confirmed in writing shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
to be taken by it hereunder in good faith and in reliance thereon in accordance
with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of the trusts
or powers vested in it by this Indenture at the request, order or direction of
any of the Securityholders pursuant to the provisions of this Indenture
(including, without limitation, pursuant to Section 5.7), unless such
Securityholders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be incurred
therein or thereby;
(e) the Trustee shall not be liable for any action taken or omitted by it
in good faith and believed by it to be authorized or within the discretion,
rights or powers conferred upon it by this Indenture;
(f) prior to the occurrence of an Event of Default hereunder and after the
curing or waiving of all Events of Default, the Trustee shall not be bound to
make any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request, consent,
order, approval, appraisal, bond, debenture, note, coupon, security, or other
paper or document unless requested in writing so to do by the Holders of not
less than a majority in aggregate principal amount of the Securities of all
series affected then Outstanding; provided that, if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities likely to
be incurred by it in the making of such investigation is, in the opinion of the
Trustee, not reasonably assured to the Trustee by the security afforded to it by
the terms of this Indenture, the Trustee may require reasonable indemnity
against such expenses or liabilities as a condition to proceeding; the
reasonable expenses of every such investigation shall be paid by the Issuer or,
if paid by the Trustee or any predecessor Trustee, shall be repaid by the Issuer
upon demand;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys not regularly in its employ and the Trustee shall not be responsible
for any misconduct or negligence on the part of any such agent or attorney
appointed with due care by it hereunder;
(h) The Trustee shall not be charged with knowledge of any default or
Event of Default with respect to a series of Securities unless either (i) a
Responsible Officer of the Trustee assigned to the Corporate Trust Office of the
Trustee (or any successor division or department of the Trustee) shall have
actual knowledge of such default or Event of Default or (ii) written notice of
such default or Event of Default shall have been given to the Trustee by the
Issuer or any other obligor on such series of Securities or by any Holder of
Securities of such series; and
(i) The Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture.
SECTION 6.3 Trustee Not Responsible for Recitals, Disposition of Securities
or Application of Proceeds Thereof. The recitals contained herein and in the
Securities, except the Trustee's certificates of authentication, shall be taken
as the statements of the Issuer, and the Trustee assumes no responsibility for
the correctness of the same. The Trustee makes no representation as to the
validity or sufficiency of this Indenture, of the Securities or of any
prospectus used to sell the Securities. The Trustee shall not be accountable for
the use or application by the Issuer of any of the Securities or of the proceeds
thereof.
SECTION 6.4 Trustee and Agents May Hold Securities; Collection, etc. The
Trustee or any agent of the Issuer or the Trustee, in its individual or any
other capacity, may become the owner or pledgee of Securities with the same
rights it would have if it were not the Trustee or such agent and, subject to
Sections 6.8 and 6.13, may otherwise deal with the Issuer and receive, collect,
hold and retain collections from the Issuer with the same rights it would have
if it were not the Trustee or such agent.
SECTION 6.5 Moneys Held by Trustee. Subject to the provisions of Section
10.4 hereof, all moneys received by the Trustee shall, until used or applied as
herein provided, be held in trust for the purposes for which they were received,
but need not be segregated from other funds except to the extent required by
mandatory provisions of law. Neither the Trustee nor any agent of the Issuer or
the Trustee shall be under any liability for interest on any moneys received by
it hereunder.
SECTION 6.6 Compensation and Indemnification of Trustee and Its Prior
Claim. The Issuer covenants and agrees to pay to the Trustee from time to time,
and the Trustee shall be entitled to, such compensation as shall be agreed to in
writing between the Issuer and the Trustee (which shall not be limited by any
provision of law in regard to the compensation of a trustee of an express trust)
and the Issuer covenants and agrees to pay or reimburse the Trustee and each
predecessor Trustee upon its request for all reasonable expenses, disbursements
and advances incurred or made by or on behalf of it in accordance with any of
the provisions of this Indenture (including the reasonable compensation and the
expenses and disbursements of its counsel and of all agents and other persons
not regularly in its employ) except any such expense, disbursement or advance as
may arise from its negligence or bad faith. The Issuer also covenants to
indemnify the Trustee and each predecessor Trustee for, and to hold it harmless
against, any and all loss, liability, damage, claim or expense, including taxes
(other than taxes based on the income of the Trustee), incurred without
negligence or bad faith on its part, arising out of or in connection with the
acceptance or administration of this Indenture or the trusts hereunder and its
duties hereunder, including the costs and expenses of defending itself against
or investigating any claim or liability in the premises. The obligations of the
Issuer under this Section 6.6 to compensate and indemnify the Trustee and each
predecessor Trustee and to pay or reimburse the Trustee and each predecessor
Trustee for expenses, disbursements and advances shall constitute additional
indebtedness hereunder and shall survive the satisfaction and discharge of this
Indenture or the resignation or removal of the Trustee and shall not be
subordinate to the payment of Senior Indebtedness pursuant to Article Thirteen.
Such additional indebtedness shall be a senior claim to that of the Securities
upon all property and funds held or collected by the Trustee as such, except
funds held in trust for the benefit of the Holders of particular Securities.
When the Trustee incurs expenses or renders services in connection with an Event
of Default specified in Section 5.1 or in connection with Section 5.9 hereof,
the expenses (including the reasonable fees and expenses of its counsel) and the
compensation for the service in connection therewith are intended to constitute
expenses of administration under any bankruptcy law. The provisions of this
Section 6.6 shall survive the resignation or removal of the Trustee and the
termination of this Indenture.
SECTION 6.7 Right of Trustee to Rely on Officers' Certificate, etc. Subject
to Sections 6.1 and 6.2, whenever in the administration of the trusts of this
Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or suffering or omitting any action
hereunder, such matter (unless other evidence in respect thereof be herein
specifically prescribed) may, in the absence of negligence or bad faith on the
part of the Trustee, be deemed to be conclusively proved and established by an
Officers' Certificate delivered to the Trustee, and such certificate, in the
absence of negligence or bad faith on the part of the Trustee, shall be full
warrant to the Trustee for any action taken, suffered or omitted by it under the
provisions of this Indenture upon the faith thereof.
SECTION 6.8 Qualification of Trustee; Conflicting Interests. This Indenture
shall always have a Trustee who satisfies the ts requirements of Section
310(a)(1) of the Trust Indenture Act of 1939. The Trustee shall have a combined
capital and surplus of at least $25,000,000 as set forth in its most recent
published annual report of condition. The Trustee shall comply with Section
310(b) of the Trust Indenture Act of 1939 regarding disqualification of a
trustee upon acquiring a conflicting interest.
SECTION 6.9 Persons Eligible for Appointment as Trustee; Different Trustees
for Different Series. The Trustee for each series of Securities hereunder shall
at all times be a corporation organized and doing business under the laws of the
United States of America or of any state or the District of Columbia having a
combined capital and surplus of at least $25,000,000, and which is authorized
under such laws to exercise corporate trust powers and is subject to supervision
or examination by federal, state or District of Columbia authority, or a
corporation or other Person permitted to act as trustee by the Commission. If
such corporation publishes reports of condition at least annually, pursuant to
law or to the requirements of the aforesaid supervising or examining authority,
then for the purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. No obligor upon the
Securities or any Affiliate of such obligor shall serve as trustee upon the
Securities. In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 6.9, the Trustee shall resign
immediately in the manner and with the effect specified in Section 6.10.
A different Trustee may be appointed by the Issuer for any series of
Securities prior to the issuance of such Securities. If the initial Trustee for
any series of Securities is to be a trustee other than State Street Bank and
Trust Company, the Issuer and such Trustee shall, prior to the issuance of such
Securities, execute and deliver an indenture supplemental hereto, which shall
provide for the appointment of such Trustee as Trustee for the Securities of
such series and shall add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration of the
trusts hereunder by more than one Trustee, it being understood that nothing
herein or in such supplemental indenture shall constitute such Trustees
co-trustees of the same trust and that each such Trustee shall be trustee of a
trust or trusts hereunder separate and apart from any trust or trusts hereunder
administered by any other such Trustee.
SECTION 6.10 Resignation and Removal; Appointment of Successor Trustee. (a)
The Trustee, or any trustee or trustees hereafter appointed, may at any time
resign with respect to one or more or all series of Securities by giving written
notice of resignation to the Issuer. Upon receiving such notice of resignation,
the Issuer shall promptly appoint a successor trustee or trustees with respect
to the applicable series by written instrument in duplicate, executed by
authority of the Board of Directors, one copy of which instrument shall be
delivered to the resigning trustee and one copy to the successor trustee or
trustees. If no successor trustee shall have been so appointed with respect to
any series and have accepted appointment within 30 days after the mailing of
such notice of resignation, the resigning trustee may petition any court of
competent jurisdiction for the appointment of a successor trustee, or any
Securityholder who has been a bona fide Holder of a Security or Securities of
the applicable series for at least six months may, subject to the provisions of
Article Five, on behalf of himself and all others similarly situated, petition
any such court for the appointment of a successor trustee. Such court may
thereupon, after such notice, if any, as it may deem proper and prescribe,
appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with the provisions of Section 6.8
with respect to any series of Securities after written request therefor by
the Issuer or by any Securityholder who has been a bona fide Holder of a
Security or Securities of such series for at least six months; or
(ii) the Trustee shall cease to be eligible in accordance with the
provisions of Section 6.9 and shall fail to resign after written request
therefor by the Issuer or by any such Securityholder; or
(iii) the Trustee shall become incapable of acting with respect to any
series of Securities, or shall be adjudged a bankrupt or insolvent, or a
receiver or liquidator of the Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation;
then, in any such case, the Issuer may remove the Trustee with respect to the
applicable series of Securities and appoint a successor trustee for such series
by written instrument, in duplicate, executed by order of the Board of Directors
one copy of which instrument shall be delivered to the Trustee so removed and
one copy to the successor trustee, or, subject to the provisions of Article
Five, any Securityholder who has been a bona fide Holder of a Security or
Securities of such series for at least six months may on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor trustee with
respect to such series. Such court may thereupon, after such notice, if any, as
it may deem proper and prescribe, remove the Trustee and appoint a successor
trustee.
(c) The Holders of a majority in aggregate principal amount of the
Securities of each series then Outstanding may at any time remove the Trustee
with respect to Securities of such series and appoint a successor trustee with
respect to the Securities of such series by delivering to the Trustee so
removed, to the successor trustee so appointed and to the Issuer the evidence
provided for in Section 7.1 of the action in that regard taken by the
Securityholders. If no successor trustee shall have been so appointed with
respect to any series and have accepted appointment within 30 days after the
delivery of such evidence of removal, the Trustee may petition any court of
competent jurisdiction for the appointment of a successor trustee, or any
Securityholder who has been a bona fide Holder of a Security or Securities of
the applicable series for at least six months may, subject to the provisions of
Article Five, on behalf of himself and all others similarly situated, petition
any such court for the appointment of a successor trustee. Such court may
thereupon, after such notice, if any, as it may deem proper and prescribe,
appoint a successor trustee.
(d) Any resignation or removal of the Trustee with respect to any series
and any appointment of a successor trustee with respect to such series pursuant
to any of the provisions of this Section 6.10 shall become effective upon
acceptance of appointment by the successor trustee as provided in Section 6.11.
SECTION 6.11 Acceptance of Appointment by Successor Trustee. Any successor
trustee appointed as provided in Section 6.10 tee shall execute and deliver to
the Issuer and to its predecessor trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee with respect to all or any applicable series shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become vested with all rights, powers, duties and obligations
with respect to such series of its predecessor hereunder, with like effect as if
originally named as trustee for such series hereunder; but, nevertheless, on the
written request of the Issuer or of the successor trustee, upon payment of its
charges then unpaid, the trustee ceasing to act shall, subject to Section 10.4,
pay over to the successor trustee all moneys at the time held by it hereunder
and shall execute and deliver an instrument transferring to such successor
trustee all such rights, powers, duties and obligations. Upon request of any
such successor trustee, the Issuer shall execute any and all instruments in
writing for more fully and certainly vesting in and confirming to such successor
trustee all such rights and powers. Any trustee ceasing to act shall,
nevertheless, retain a prior claim upon all property or funds held or collected
by such trustee to secure any amounts then due it pursuant to the provisions of
Section 6.6.
If a successor trustee is appointed with respect to the Securities of one
or more (but not all) series, the Issuer, the predecessor Trustee and each
successor trustee with respect to the Securities of any applicable series shall
execute and deliver an indenture supplemental hereto which shall contain such
provisions as shall be deemed necessary or desirable to confirm that all the
rights, powers, trusts and duties of the predecessor Trustee with respect to the
Securities of any series as to which the predecessor Trustee is not retiring
shall continue to be vested in the predecessor Trustee, and shall add to or
change any of the provisions of this Indenture as shall be necessary to provide
for or facilitate the administration of the trusts hereunder by more than one
trustee, it being understood that nothing herein or in such supplemental
indenture shall constitute such trustees co-trustees of the same trust and that
each such trustee shall be trustee of a trust or trusts under separate
indentures.
No successor trustee with respect to any series of Securities shall accept
appointment as provided in this Section 6.11 unless at the time of such
acceptance such successor trustee shall be qualified under the provisions of
Section 6.8 and eligible under the provisions of Section 6.9.
Upon acceptance of appointment by any successor trustee as provided in
this Section 6.11, the Issuer shall give notice thereof to the Holders of
Securities of each series affected, by mailing such notice to such Holders at
their addresses as they shall appear on the registry books. If the Issuer fails
to give such notice within ten days after acceptance of appointment by the
successor trustee, the successor trustee shall cause such notice to be given at
the expense of the Issuer.
SECTION 6.12 Merger, Conversion, Consolidation or Succession to Business of
Trustee. Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee (including the trust created by this Indenture), shall
be the successor of the Trustee hereunder, provided that such corporation shall
be qualified under the provisions of Section 6.8 and eligible under the
provisions of Section 6.9, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture any of the Securities of any series shall have
been authenticated but not delivered, any such successor to the Trustee may
adopt the certificate of authentication of any predecessor Trustee and deliver
such Securities so authenticated; and, in case at that time any of the
Securities of any series shall not have been authenticated, any successor to the
Trustee may authenticate such Securities either in the name of any predecessor
hereunder or in the name of the successor Trustee; and in all such cases such
certificate shall have the full force which it is anywhere in the Securities of
such series or in this Indenture provided that the certificate of the Trustee
shall have; provided, that the right to adopt the certificate of authentication
of any predecessor Trustee or to authenticate Securities of any series in the
name of any predecessor Trustee shall apply only to its successor or successors
by merger, conversion or consolidation.
SECTION 6.13 Preferential Collection of Claims Against the Issuer. The
Trustee shall comply with Section 311(a) of the Trust Indenture Act of 1939,
excluding any creditor relationship listed in Section 311(b) of the Trust
Indenture Act of 1939. A Trustee who has resigned or been removed shall be
subject to Section 311(a) of the Trust Indenture Act of 1939 to the extent
indicated therein.
SECTION 6.14 Appointment of Authenticating Agent. As long as any Securities
of a series remain Outstanding, the Trustee may, by an instrument in writing,
appoint with the approval of the Issuer an authenticating agent (the
"Authenticating Agent") which shall be authorized to act on behalf of the
Trustee to authenticate Securities, including Securities issued upon exchange,
registration of transfer, partial redemption or pursuant to Section 2.9.
Securities of each such series authenticated by such Authenticating Agent shall
be entitled to the benefits of this Indenture and shall be valid and obligatory
for all purposes as if authenticated by the Trustee. Whenever reference is made
in this Indenture to the authentication and delivery of Securities of any series
by the Trustee or to the Trustee's Certificate of Authentication, such reference
shall be deemed to include authentication and delivery on behalf of the Trustee
by an Authenticating Agent for such series and a Certificate of Authentication
executed on behalf of the Trustee by such Authenticating Agent. Such
Authenticating Agent shall at all times be a corporation organized and doing
business under the laws of the United States of America or of any state or the
District of Columbia, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $25,000,000
(determined as provided in Section 6.9 with respect to the Trustee) and subject
to supervision or examination by federal or state authority.
Any corporation into which any Authenticating Agent may be merged or
converted, or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which any Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency business
(including the authenticating agency contemplated by this Indenture) of any
Authenticating Agent, shall continue to be the Authenticating Agent with respect
to all series of Securities for which it served as Authenticating Agent without
the execution or filing of any paper or any further act on the part of the
Trustee or such Authenticating Agent. Any Authenticating Agent may at any time,
and if it shall cease to be eligible shall, resign by giving written notice of
resignation to the Trustee and to the Issuer. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Issuer.
Upon receiving such a notice of resignation or upon such a termination, or
in case at any time any Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section 6.14 with respect to one or more
series of Securities, the Trustee may appoint a successor Authenticating Agent
which shall be acceptable to the Issuer and the Issuer shall provide notice of
such appointment to all Holders of Securities of such series in the manner and
to the extent provided in Section 11.4. Any successor Authenticating Agent upon
acceptance of its appointment hereunder shall become vested with all rights,
powers, duties and responsibilities of its predecessor hereunder, with like
effect as if originally named as Authenticating Agent. The Issuer agrees to pay
to the Authenticating Agent for such series from time to time reasonable
compensation. The Authenticating Agent for the Securities of any series shall
have no responsibility or liability for any action taken by it as such at the
direction of the Trustee.
Sections 6.2, 6.3, 6.4 and 7.3 shall be applicable to any
Authenticating Agent.
ARTICLE SEVEN
CONCERNING THE SECURITYHOLDERS
SECTION 7.1 Evidence of Action Taken by Securityholders. Any request,
demand, authorization, direction, notice, ders consent, waiver or other action
provided by this Indenture to be given or taken by a specified percentage in
principal amount of the Securityholders of any or all series may be embodied in
and evidenced by one or more instruments of substantially similar tenor signed
by such specified percentage of Securityholders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee. Proof of execution of any instrument or of a writing appointing
any such agent shall be sufficient for any purpose of this Indenture and
(subject to Sections 6.1 and 6.2) conclusive in favor of the Trustee and the
Issuer, if made in the manner provided in this Article Seven.
SECTION 7.2 Proof of Execution of Instruments and of Holding of Securities.
Subject to Sections 6.1 and 6.2, the execution of any instrument by a
Securityholder or his agent or proxy may be proved in the following manner:
(a) The fact and date of the execution by any Holder of any instrument may
be proved by the certificate of any notary public or other officer of any
jurisdiction authorized to take acknowledgments of deeds or administer oaths
that the person executing such instruments acknowledged to him the execution
thereof, or by an affidavit of a witness to such execution sworn to before any
such notary or other such officer. Where such execution is by or on behalf of
any legal entity other than an individual, such certificate or affidavit shall
also constitute sufficient proof of the authority of the person executing the
same.
(b) The ownership of Securities shall be proved by the Security register
or by a certificate of the Security registrar.
SECTION 7.3 Holders to be Treated as Owners. The Issuer, the Trustee and
any agent of the Issuer or the Trustee may deem and treat the Person in whose
name any Security shall be registered upon the Security register for such series
as the absolute owner of such Security (whether or not such Security shall be
overdue and notwithstanding any notation of ownership or other writing thereon)
for the purpose of receiving payment of or on account of the principal of and,
subject to the provisions of this Indenture, interest, if any, on such Security
and for all other purposes; and neither the Issuer nor the Trustee nor any agent
of the Issuer or the Trustee shall be affected by any notice to the contrary.
SECTION 7.4 Securities Owned by Issuer Deemed Not Outstanding. In
determining whether the Holders of the requisite aggregate principal amount of
Outstanding Securities of any or all series have concurred in any direction,
consent or waiver under this Indenture, Securities which are owned by the Issuer
or by any other obligor on the Securities with respect to which such
determination is being made or by any Affiliate of the Issuer or any other
obligor on the Securities with respect to which such determination is being
made, shall be disregarded and deemed not to be Outstanding for the purpose of
any such determination, except that for the purpose of determining whether the
Trustee shall be protected in relying on any such direction, consent or waiver
only Securities which a Responsible Officer of the Trustee knows are so owned
shall be so disregarded. Securities so owned which have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Issuer or any other obligor upon the
Securities or any Affiliate of the Issuer or any other obligor on the
Securities. In case of a dispute as to such right, the advice of counsel shall
be full protection in respect of any decision made by the Trustee in accordance
with such advice. Upon request of the Trustee, the Issuer shall furnish to the
Trustee promptly an Officers' Certificate listing and identifying all
Securities, if any, known by the Issuer to be owned or held by or for the
account of any of the above-described Persons; and, subject to Sections 6.1 and
6.2, the Trustee shall be entitled to accept such Officers' Certificate as
conclusive evidence of the facts therein set forth and of the fact that all
Securities not listed therein are Outstanding for the purpose of any such
determination.
SECTION 7.5 Right of Revocation of Action Taken. At any time prior to (but
not after) the evidencing to the Trustee, as provided in Section 7.1, of the
taking of any action by the Holders of the percentage in aggregate principal
amount of the Securities of any or all series, as the case may be, specified in
this Indenture in connection with such action, any Holder of a Security the
serial number of which is shown by the evidence to be included among the serial
numbers of the Securities the Holders of which have consented to such action
may, by filing written notice at the Corporate Trust Office and upon proof of
holding as provided in this Article Seven, revoke such action so far as concerns
such Security provided that such revocation shall not become effective until
three Business Days after such filing. Except as aforesaid, any such action
taken by the Holder of any Security shall be conclusive and binding upon such
Holder and upon all future Holders and owners of such Security and of any
Securities issued in exchange or substitution therefor or on registration of
transfer thereof, irrespective of whether or not any notation in regard thereto
is made upon any such Security. Any action taken by the Holders of the
percentage in aggregate principal amount of the Securities of any or all series,
as the case may be, specified in this Indenture in connection with such action
shall be conclusively binding upon the Issuer, the Trustee and the Holders of
all the Securities affected by such action.
SECTION 7.6 Record Date for Consents and Waivers. The Issuer may, but shall
not be obligated to, establish a record date for the purpose of determining the
Persons entitled to (i) waive any past default with respect to the Securities of
such series in accordance with Section 5.7 of the Indenture, (ii) consent to any
supplemental indenture in accordance with Section 8.2 of the Indenture or (iii)
waive compliance with any term, condition or provision of any covenant
hereunder. If a record date is fixed, the Holders on such record date, or their
duly designated proxies, and any such Persons, shall be entitled to waive any
such past default, consent to any such supplemental indenture or waive
compliance with any such term, condition or provision, whether or not such
Holder remains a Holder after such record date; provided, however, that unless
such waiver or consent is obtained from the Holders, or duly designated proxies,
of the requisite principal amount of Outstanding Securities of such series prior
to the date which is the 120th day after such record date, any such waiver or
consent previously given shall automatically and without further action by any
Holder be cancelled and of no further effect.
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
SECTION 8.1 Supplemental Indentures Without Consent of Securityholders. The
Issuer, when authorized by a Board Resolution (which resolution may provide
general terms or parameters for such action and may provide that the specific
terms of such action may be determined in accordance with or pursuant to an
Issuer Order), and the Trustee may from time to time and at any time enter into
an indenture or indentures supplemental hereto (which shall conform to the
provisions of the Trust Indenture Act of 1939 as in force at the date of the
execution thereof) for one or more of the following purposes:
(a) to convey, transfer, assign, mortgage or pledge to the Trustee as
security for the Securities of one or more series any property or assets;
(b) to evidence the succession of another Person to the Issuer, or
successive successions, and the assumption by the successor Person of the
covenants, agreements and obligations of the Issuer pursuant to Article Nine;
(c) to add to the covenants of the Issuer such further covenants,
restrictions, conditions or provisions as the Issuer and the Trustee shall
consider to be for the protection of the Holders of all or any series of
Securities (and if such covenants, restrictions, conditions or provisions are to
be for the protection of less than all series of Securities, stating that the
same are expressly being included solely for the protection of such series) and
to make the occurrence, or the occurrence and continuance, of a default in any
such additional covenants, restrictions, conditions or provisions an Event of
Default permitting the enforcement of all or any of the several remedies
provided in this Indenture as herein set forth; provided, however, that in
respect of any such additional covenant, restriction, condition or provision
such supplemental indenture may provide for a particular period of grace after
default (which period may be shorter or longer than that allowed in the case of
other defaults) or may provide for an immediate enforcement upon such an Event
of Default or may limit the remedies available to the Trustee upon such an Event
of Default or may limit the right of the Holders of a majority in aggregate
principal amount of the Securities of such series to waive such an Event of
Default;
(d) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
inconsistent with any other provision contained herein or in any supplemental
indenture, or to make any other provisions as the Issuer may deem necessary or
desirable, provided, however, that no such action shall materially adversely
affect the interests of the Holders of the Securities;
(e) to establish the form or terms of Securities of any series as
permitted by Sections 2.1 and 2.3;
(f) to provide for the issuance of Securities of any series in coupon form
(including Securities registrable as to principal only) and to provide for
exchangeability of such Securities for the Securities issued hereunder in fully
registered form and to make all appropriate changes for such purpose;
(g) to modify, eliminate or add to the provisions of this Indenture to
such extent as shall be necessary to effect the qualification of this Indenture
under the Trust Indenture Act of 1939, or under any similar federal statute
hereafter enacted, and to add to this Indenture such other provisions as may be
expressly permitted by the Trust Indenture Act of 1939, excluding, however, the
provisions referred to in Section 316(a)(2) of the Trust Indenture Act of 1939
as in effect at the date as of which this instrument was executed or any
corresponding provision provided for in any similar federal statute hereafter
enacted; and
(h) to evidence and provide for the acceptance of appointment hereunder of
a Trustee other than State Street Bank and Trust Company as Trustee for a series
of Securities and to add to or change any of the provisions of this Indenture as
shall be necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, pursuant to the requirements of Section 6.9
hereof;
(i) subject to Section 8.2 hereof, to add to or modify the provisions
hereof as may be necessary or desirable to provide for the denomination of
Securities in foreign currencies which shall not adversely affect the interests
of the Holders of the Securities in any material respect;
(j) to modify the covenants or Events of Default of the Issuer solely in
respect of, or add new covenants or Events of Default of the Issuer that apply
solely to, Securities not Outstanding on the date of such supplemental
indenture; and
(k) to evidence and provide for the acceptance of appointment hereunder by
a successor trustee with respect to the Securities of one or more series and to
add to or change any of the provisions of this Indenture as shall be necessary
to provide for or facilitate the administration of the trusts hereunder by more
than one trustee, pursuant to the requirements of Section 6.11.
The Trustee is hereby authorized to join with the Issuer in the execution
of any such supplemental indenture, to make any further appropriate agreements
and stipulations which may be therein contained and to accept the conveyance,
transfer, assignment, mortgage or pledge of any property thereunder, but the
Trustee shall not be obligated to enter into any such supplemental indenture
which affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this Section
may be executed without the consent of the Holders of any of the Securities then
Outstanding, notwithstanding any of the provisions of Section 8.2.
SECTION 8.2 Supplemental Indentures with Consent of Securityholders. With
the consent (evidenced as provided in Article Seven) of the Holders of not less
than a majority in aggregate principal amount of the Securities then Outstanding
of any series affected by such supplemental indenture, the Issuer, when
authorized by a Board Resolution (which resolution may provide general terms or
parameters for such action and may provide that the specific terms of such
action may be determined in accordance with or pursuant to an Issuer Order), and
the Trustee may, from time to time and at any time, enter into an indenture or
indentures supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act of 1939 as in force at the date of execution thereof) for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Indenture or of any supplemental indenture or of
modifying in any manner the rights of the Holders of the Securities of such
series; provided, that no such supplemental indenture shall (a) extend the
stated final maturity of the principal of any Security, or reduce the principal
amount thereof, or reduce the rate or extend the time of payment of interest, if
any, thereon (or, in the case of an Original Issue Discount Security, reduce the
rate of accretion of original issue discount thereon), or reduce or alter the
method of computation of any amount payable on redemption, repayment or purchase
by the Issuer thereof (or the time at which any such redemption, repayment or
purchase may be made), or make the principal thereof (including any amount in
respect of original issue discount), or interest, if any, thereon payable in any
coin or currency other than that provided in the Securities or in accordance
with the terms of the Securities, or reduce the amount of the principal of an
Original Issue Discount Security that would be due and payable upon an
acceleration of the maturity thereof or the amount thereof provable in
bankruptcy in each case pursuant to Article Five, or impair or affect the right
of any Securityholder to institute suit for the payment thereof or, if the
Securities provide therefor, any right of repayment or purchase at the option of
the Securityholder, in each case without the consent of the Holder of each
Security so affected, or (b) reduce the aforesaid percentage of Securities of
any series, the consent of the Holders of which is required for any such
supplemental indenture, without the consent of the Holders of each Security so
affected. No consent of any Holder of any Security shall be necessary under this
Section 8.2 to permit the Trustee and the Issuer to execute supplemental
indentures pursuant to Sections 8.1 and 9.2.
A supplemental indenture which changes or eliminates any covenant, Event
of Default or other provision of this Indenture which has expressly been
included solely for the benefit of one or more particular series of Securities,
or which modifies the rights of Holders of Securities of such series, with
respect to such covenant or provision, shall be deemed not to affect the rights
under this Indenture of the Holders of Securities of any other series.
Upon the request of the Issuer, accompanied by a copy of a resolution of
the Board of Directors (which resolution may provide general terms or parameters
for such action and may provide that the specific terms of such action may be
determined in accordance with or pursuant to an Issuer Order) certified by the
secretary or an assistant secretary of the Issuer authorizing the execution of
any such supplemental indenture, and upon the filing with the Trustee of
evidence of the consent of the Holders of the Securities as aforesaid and other
documents, if any, required by Section 7.1, the Trustee shall join with the
Issuer in the execution of such supplemental indenture unless such supplemental
indenture affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise, in which case the Trustee may at its discretion, but
shall not be obligated to, enter into such supplemental indenture.
It shall not be necessary for the consent of the Securityholders under
this Section 8.2 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
Promptly after the execution by the Issuer and the Trustee of any
supplemental indenture pursuant to the provisions of this Section 8.2, the
Issuer (or the Trustee at the request and expense of the Issuer) shall give
notice thereof to the Holders of then Outstanding Securities of each series
affected thereby, as provided in Section 11.4. Any failure of the Issuer to give
such notice, or any defect therein, shall not, however, in any way impair or
affect the validity of any such supplemental indenture.
SECTION 8.3 Effect of Supplemental Indenture. Upon the execution of any
supplemental indenture pursuant to the provisions hereof, this Indenture shall
be and shall be deemed to be modified and amended in accordance therewith and
the respective rights, limitations of rights, obligations, duties and immunities
under this Indenture of the Trustee, the Issuer and the Holders of Securities of
each series affected thereby shall thereafter be determined, exercised and
enforced hereunder subject in all respects to such modifications and amendments,
and all the terms and conditions of any such supplemental indenture shall be and
shall be deemed to be part of the terms and conditions of this Indenture for any
and all purposes.
SECTION 8.4 Documents to Be Given to Trustee. The Trustee, subject to the
provisions of Sections 6.1 and 6.2, shall be entitled to receive an Officers'
Certificate and an Opinion of Counsel as conclusive evidence that any
supplemental indenture executed pursuant to this Article Eight complies with the
applicable provisions of this Indenture and that all conditions precedent to the
execution and delivery of such supplemental indenture have been satisfied.
SECTION 8.5 Notation on Securities in Respect of Supplemental Indentures.
Securities of any series authenticated and delivered after the execution of any
supplemental indenture pursuant to the provisions of this Article Eight may bear
a notation in form approved by the Trustee for such series as to any matter
provided for by such supplemental indenture or as to any action taken by
Securityholders. If the Issuer or the Trustee shall so determine, new Securities
of any series so modified as to conform, in the opinion of the Trustee and the
Issuer, to any modification of this Indenture contained in any such supplemental
indenture may be prepared and executed by the Issuer, authenticated by the
Trustee and delivered in exchange for the Securities of such series then
Outstanding.
ARTICLE NINE
CONSOLIDATION, MERGER, SALE, LEASE, EXCHANGE OR OTHER DISPOSITION
SECTION 9.1 Issuer May Consolidate, etc., on Certain Terms. Subject to the
provisions of Section 9.2, nothing contained in this Indenture or in any of the
Securities shall prevent any consolidation or merger of the Issuer with or into
any other Person or Persons (whether or not affiliated with the Issuer), or
successive consolidations or mergers in which the Issuer or its successor or
successors shall be a party or parties, or shall prevent any sale, lease,
exchange or other disposition of all or substantially all the property and
assets of the Issuer to any other Person (whether or not affiliated with the
Issuer) authorized to acquire and operate the same; provided, however, and the
Issuer hereby covenants and agrees, that any such consolidation, merger, sale,
lease, exchange or other disposition shall be upon the conditions that (a)
immediately after giving effect to such consolidation, merger, sale, lease,
exchange or other disposition of the Person (whether the Issuer or such other
Person) formed by or surviving any such consolidation or merger, or to which
such sale, lease, exchange or other disposition shall have been made, 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; (b) the
Person (if other than the Issuer) formed by or surviving any such consolidation
or merger, or to which such sale, lease, exchange or other disposition shall
have been made, shall be a corporation or partnership organized under the laws
of the United States of America, any state thereof or the District of Columbia;
and (c) the due and punctual payment of the principal of and interest, if any,
on all the Securities, according to their tenor, and the due and punctual
performance and observance of all of the covenants and conditions of this
Indenture to be performed by the Issuer, shall be expressly assumed, by
supplemental indenture satisfactory in form to the Trustee executed and
delivered to the Trustee, by the Person (if other than the Issuer) formed by
such consolidation, or into which the Issuer shall have been merged, or by the
Person which shall have acquired or leased such property.
SECTION 9.2 Successor Corporation to be Substituted. In case of any such
consolidation or merger or any sale, conveyance or lease of all or substantially
all of the property of the Issuer and upon the assumption by the successor
Person, by supplemental indenture executed and delivered to the Trustee and
satisfactory in form to the Trustee, of the due and punctual payment of the
principal of, premium, if any, and interest, if any, on all of the Securities
and the due and punctual performance of all of the covenants and conditions of
this Indenture to be performed by the Issuer, such successor Person shall
succeed to and be substituted for the Issuer, with the same effect as if it had
been named herein as the party of the first part, and the Issuer (including any
intervening successor to the Issuer which shall have become the obligor
hereunder) shall be relieved of any further obligation under this Indenture and
the Securities; provided, however, that in the case of a sale, lease, exchange
or other disposition of the property and assets of the Issuer (including any
such intervening successor), the Issuer (including any such intervening
successor) shall continue to be liable on its obligations under this Indenture
and the Securities to the extent, but only to the extent, of liability to pay
the principal of and interest, if any, on the Securities at the time, places and
rate prescribed in this Indenture and the Securities. Such successor Person
thereupon may cause to be signed, and may issue either in its own name or in the
name of the Issuer, any or all of the Securities issuable hereunder which
theretofore shall not have been signed by the Issuer and delivered to the
Trustee; and, upon the order of such successor Person instead of the Issuer and
subject to all the terms, conditions and limitations in this Indenture
prescribed, the Trustee shall authenticate and shall deliver any Securities
which previously shall have been signed and delivered by the officers of the
Issuer to the Trustee for authentication, and any Securities which such
successor Person thereafter shall cause to be signed and delivered to the
Trustee for that purpose. All the Securities so issued shall in all respects
have the same legal rank and benefit under this Indenture as the Securities
theretofore or thereafter issued in accordance with the terms of this Indenture
as though all of such Securities had been issued at the date of the execution
hereof.
In case of any such consolidation or merger or any sale, lease, exchange
or other disposition of all or substantially all of the property and assets of
the Issuer, such changes in phraseology and form (but not in substance) may be
made in the Securities, thereafter to be issued, as may be appropriate.
SECTION 9.3 Opinion of Counsel to be Given Trustee. The Trustee, subject to
Sections 6.1 and 6.2, shall receive an Officers' Certificate and Opinion of
Counsel as conclusive evidence that any such consolidation, merger, sale, lease,
exchange or other disposition and any such assumption complies with the
provisions of this Article Nine.
ARTICLE TEN
SATISFACTION AND DISCHARGE OF INDENTURE;
COVENANT DEFEASANCE; UNCLAIMED MONEYS
SECTION 10.1 Satisfaction and Discharge of Indenture. (a) If at any time
(i) the Issuer shall have paid or caused to be paid the principal of, premium,
if any, and interest, if any, on all the Securities Outstanding (other than
Securities which have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 2.9) as and when the same shall have
become due and payable, or (ii) the Issuer shall have delivered to the Trustee
for cancellation all Securities theretofore authenticated (other than Securities
which have been destroyed, lost or stolen and which have been replaced or paid
as provided in Section 2.9); and if, in any such case, the Issuer shall also pay
or cause to be paid all other sums payable hereunder by the Issuer (including
all amounts payable to the Trustee pursuant to Section 6.6), then this Indenture
shall cease to be of further effect, and the Trustee, on demand of the Issuer
accompanied by an Officers' Certificate and an Opinion of Counsel, each stating
that all conditions precedent relating to the satisfaction and discharge
contemplated by this provision have been complied with, and at the cost and
expense of the Issuer, shall execute proper instruments acknowledging such
satisfaction and discharging this Indenture. The Issuer agrees to reimburse the
Trustee for any costs or expenses thereafter reasonably and properly incurred,
and to compensate the Trustee for any services thereafter reasonably and
properly rendered, by the Trustee in connection with this Indenture or the
Securities.
(b) If at any time (i) the Issuer shall have paid or caused to be paid the
principal of, premium, if any, and interest, if any, on all the Securities of
any series Outstanding (other than Securities of such series which have been
destroyed, lost or stolen and which have been replaced or paid as provided in
Section 2.9) as and when the same shall have become due and payable, or (ii) the
Issuer shall have delivered to the Trustee for cancellation all Securities of
any series theretofore authenticated (other than any Securities of such series
which have been destroyed, lost or stolen and which have been replaced or paid
as provided in Section 2.9), or (iii) in the case of any series of Securities
with respect to which the exact amount described in clause _)(B) below can be
determined at the time of making the deposit referred to in such clause (B), (A)
all the Securities of such series not theretofore delivered to the Trustee for
cancellation shall have become due and payable, or by their terms are to become
due and payable within one year or are to be called for redemption within one
year under arrangements satisfactory to the Trustee for the giving of notice of
redemption, and (B) the Issuer shall have irrevocably deposited or caused to be
deposited with the Trustee as funds in trust, specifically pledged as security
for, and dedicated solely to, the benefit of the Holders of Securities of such
series, cash in an amount (other than moneys repaid by the Trustee or any paying
agent to the Issuer in accordance with Section 10.4) or non-callable,
non-prepayable bonds, notes, bills or other similar obligations issued or
guaranteed by the United States government or any agency thereof the full and
timely payment of which are backed by the full faith and credit of the United
States ("U.S. Government Obligations"), maturing as to principal and interest,
if any, at such times and in such amounts as will insure the availability of
cash, or a combination thereof, sufficient in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay (1) the principal of,
premium, if any, and interest, if any, on all Securities of such series on each
date that such principal of, premium, if any, or interest, if any, is due and
payable, and (2) any mandatory sinking fund payments on the dates on which such
payments are due and payable in accordance with the terms of the Indenture and
the Securities of such series; then the Issuer shall be deemed to have paid and
discharged the entire indebtedness on all the Securities of such series on the
date of the deposit referred to in clause (B) above and the provisions of this
Indenture with respect to the Securities of such series shall no longer be in
effect (except, in the case of clause (iii) of this Section 10.1(b), as to (I)
rights of registration of transfer and exchange of Securities of such series,
(II) rights of substitution of mutilated, defaced, destroyed, lost or stolen
Securities of such series, (III) rights of Holders of Securities of such series
to receive payments of principal thereof and premium, if any, and interest, if
any, thereon upon the original stated due dates therefor (but not upon
acceleration), and remaining rights of the Holders of Securities of such series
to receive mandatory sinking fund payments thereon, if any, when due, (IV) the
rights, obligations, duties and immunities of the Trustee hereunder, (V) the
rights of the Holders of Securities of such series as beneficiaries hereof with
respect to the property so deposited with the Trustee payable to all or any of
them and (VI) the obligations of the Issuer under Section 3.2 with respect to
Securities of such series) and the Trustee, on demand of the Issuer accompanied
by an Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent contemplated by this provision have been complied with, and
at the cost and expense of the Issuer, shall execute proper instruments
acknowledging the same.
(c) The following provisions shall apply to the Securities of each series
unless specifically otherwise provided in a Board Resolution, Officers'
Certificate or indenture supplemental hereto provided pursuant to Section 2.3.
In addition to discharge of the Indenture pursuant to the next preceding
paragraph, in the case of any series of Securities with respect to which the
exact amount described in subparagraph (A) below can be determined at the time
of making the deposit referred to in such subparagraph (A), the Issuer shall be
deemed to have paid and discharged the entire indebtedness on all the Securities
of such a series on the 91st day after the date of the deposit referred to in
subparagraph (A) below, and the provisions of this Indenture with respect to the
Securities of such series shall no longer be in effect (except as to (i) rights
of registration of transfer and exchange of Securities of such series, (ii)
substitution of mutilated, defaced, destroyed, lost or stolen Securities of such
series, (iii) rights of Holders of Securities of such series to receive payments
of principal thereof, premium, if any, and interest, if any, thereon upon the
original stated due dates therefor (but not upon acceleration), and remaining
rights of the Holders of Securities of such series to receive mandatory sinking
fund payments, if any, (iv) the rights, obligations, duties and immunities of
the Trustee hereunder, (v) the rights of the Holders of Securities of such
series as beneficiaries hereof with respect to the property so deposited with
the Trustee payable to all or any of them and (vi) the obligations of the Issuer
under Section 3.2 with respect to Securities of such series) and the Trustee, on
demand of the Issuer accompanied by an Officers' Certificate and an Opinion of
Counsel, each stating that all conditions precedent contemplated by this
provision have been complied with, and at the cost and expense of the Issuer,
shall execute proper instruments acknowledging the same, if
(A) with reference to this provision the Issuer has irrevocably deposited
or caused to be irrevocably deposited with the Trustee as funds in trust,
specifically pledged as security for, and dedicated solely to, the benefit of
the Holders of Securities of such series (1) cash in an amount, or (2) U.S.
Government Obligations, maturing as to principal and interest, if any, at
such times and in such amounts as will insure the availability of cash, or
(3) a combination thereof, sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay (I) the principal of,
premium, if any, and interest, if any, on all Securities of such series on
each date that such principal or interest, if any, is due and payable, and
(II) any mandatory sinking fund payments on the dates on which such payments
are due and payable in accordance with the terms of the Indenture and the
Securities of such series;
(B) such deposit will not result in a breach or violation of, or
constitute a default under, any agreement or instrument to which the Issuer
is a party or by which it is bound; and
(C) the Issuer has delivered to the Trustee an Opinion of Counsel based on
the fact that (1) the Issuer has received from, or there has been published
by, the Internal Revenue Service a ruling or (2), since the date hereof,
there has been a change in the applicable United States federal income tax
law, in either case to the effect that, and such opinion shall confirm that,
the Holders of the Securities of such series will not recognize income, gain
or loss for Federal income tax purposes as a result of such deposit,
defeasance and discharge and will be subject to Federal income tax on the
same amount and in the same manner and at the same times, as would have been
the case if such deposit, defeasance and discharge had not occurred.
SECTION 10.2 Application by Trustee of Funds Deposited for Payment of
Securities. Subject to Section 10.4, all moneys and U.S. Government Obligations
deposited with the Trustee pursuant to Section 10.1 shall be held in trust, and
such moneys and all moneys from such U.S. Government Obligations shall be
applied by it to the payment, either directly or through any paying agent
(including the Issuer acting as its own paying agent), to the Holders of the
particular Securities of such series for the payment or redemption of which such
moneys and U.S. Government Obligations have been deposited with the Trustee, of
all sums due and to become due thereon for principal and interest, if any, but
such moneys and U.S. Government Obligations need not be segregated from other
funds except to the extent required by law.
SECTION 10.3 Repayment of Moneys Held by paying Agent. In connection with
the satisfaction and discharge of this Indenture with respect to Securities of
any series, all moneys then held by any paying agent under the provisions of
this Indenture with respect to such series of Securities shall, upon demand of
the Issuer, be repaid to it or paid to the Trustee and thereupon such paying
agent shall be released from all further liability with respect to such moneys.
SECTION 10.4 Return of Moneys Held by Trustee and Paying Agent Unclaimed
for Two Years. Any moneys deposited with or paid to the Trustee or any paying
agent for the payment of the principal of, premium, if any, or interest, if any,
on any Security of any series and not applied but remaining unclaimed for two
years after the date upon which such principal, premium, if any, or interest, if
any, shall have become due and payable, shall, upon the written request of the
Issuer and unless otherwise required by mandatory provisions of applicable
escheat or abandoned or unclaimed property law, be repaid to the Issuer by the
Trustee for such series or such paying agent and the Holder of the Securities of
such series shall, unless otherwise required by mandatory provisions of
applicable escheat or abandoned or unclaimed property laws, thereafter look only
to the Issuer for any payment which such Holder may be entitled to collect, and
all liability of the Trustee or any paying agent with respect to such moneys
shall thereupon cease.
SECTION 10.5 Indemnity for U.S. Government Obligations. The Issuer shall
pay and indemnify the Trustee against any tax, fee or other charge imposed on or
assessed against the U.S. Government Obligations deposited pursuant to Section
10.1 or the principal or interest received in respect of such obligations.
ARTICLE ELEVEN
MISCELLANEOUS PROVISIONS
SECTION 11.1 Partners, Incorporators, Stockholders, Officers and Directors
of Issuer Exempt from Individual Liability. No recourse under or upon any
obligation, covenant or iability agreement contained in this Indenture, or in
any Security, or because of any indebtedness evidenced thereby, shall be had
against any incorporator, as such or against any past, present or future
stockholder, officer or director, as such, of the Issuer, or any partner of the
Issuer or of any successor, either directly or through the Issuer or any
successor, under any rule of law, statute or constitutional provision or by the
enforcement of any assessment or by any legal or equitable proceeding or
otherwise, all such liability being expressly waived and released by the
acceptance of the Securities by the Holders thereof and as part of the
consideration for the issue of the Securities.
SECTION 11.2 Provisions of Indenture for the Sole Benefit of Parties and
Holders of Securities. Nothing in this Indenture or in the Securities, expressed
or implied, shall give or be construed to give to any Person, other than the
parties hereto and their successors and the Holders of the Senior Indebtedness
and the Holders of the Securities, any legal or equitable right, remedy or claim
under this Indenture or under any covenant or provision herein contained, all
such covenants and provisions being for the sole benefit of the parties hereto
and their successors and of the Holders of the Securities.
SECTION 11.3 Successors and Assigns of Issuer Bound by Indenture. All the
covenants, stipulations, promises and agreements in this Indenture contained by
or on behalf of the Issuer shall bind its successors and assigns, whether so
expressed or not.
SECTION 11.4 Notices and Demands on Issuer, Trustee and Holders of
Securities. Any notice or demand which by any provision of this Indenture is
required or permitted to be given or served by the Trustee or by the Holders of
Securities to or on the Issuer, or as required pursuant to the Trust Indenture
Act of 1939, may be given or served by being deposited postage prepaid,
first-class mail (except as otherwise specifically provided herein) addressed
(until another address of the Issuer is filed by the Issuer with the Trustee) to
EMCOR Group, Inc., 101 Merritt Seven Corporate Park, Norwalk, Connecticut 06851.
Any notice, direction, request or demand by the Issuer or any Holder of
Securities to or upon the Trustee shall be deemed to have been sufficiently
given or served by being deposited postage prepaid, first-class mail (except as
otherwise specifically provided herein) addressed (until another address of the
Trustee is filed by the Trustee with the Issuer) to State Street Bank and Trust
Company, Goodwin Square, 225 Asylum Street, Hartford, CT 06103, attention:
Corporate Trust Administration (EMCOR Group, Inc. [specify series of
Securities]).
Where this Indenture provides for notice to Holders of Securities, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder entitled
thereto, at his last address as it appears in the Security register. Where this
Indenture provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Trustee, but such filing shall not be
a condition precedent to the validity of any action taken in reliance upon such
waiver.
In case, by reason of the suspension of or irregularities in regular mail
service, it shall be impracticable to mail notice to the Issuer when such notice
is required to be given pursuant to any provision of this Indenture, then any
manner of giving such notice as shall be reasonably satisfactory to the Trustee
shall be deemed to be sufficient notice.
SECTION 11.5 Officers' Certificates and Opinions of Counsel; Statements to
Be Contained Therein. Upon any application or demand by the Issuer to the
Trustee to take any action under any of the provisions of this Indenture, or as
required pursuant to the Trust Indenture Act of 1939, the Issuer shall furnish
to the Trustee an Officers' Certificate stating that all conditions precedent
provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent have been complied with, except that in
the case of any such application or demand as to which the furnishing of such
documents is specifically required by any provision of this Indenture relating
to such particular application or demand, no additional certificate or opinion
need be furnished.
Each certificate or opinion provided for in this Indenture (other than a
certificate provided pursuant to Section 4.3(d)) and delivered to the Trustee
with respect to compliance with a condition or covenant provided for in this
Indenture shall include (a) a statement that the person making such certificate
or opinion has read such covenant or condition, (b) a brief statement as to the
nature and scope of the examination or investigation upon which the statements
or opinions contained in such certificate or opinion are based, (c) a statement
that, in the opinion of such person, he has made such examination or
investigation as is necessary to enable him to express an opinion as to whether
or not such covenant or condition has been complied with, and (d) a statement as
to whether or not, in the opinion of such person, such condition or covenant has
been complied with.
Any certificate, statement or opinion of an officer of the Issuer may be
based, insofar as it relates to legal matters, upon a certificate or opinion of
or representations by counsel, unless such officer knows that the certificate or
opinion or representations with respect to the matters upon which his
certificate, statement or opinion may be based as aforesaid are erroneous, or in
the exercise of reasonable care should know that the same are erroneous. Any
certificate, statement or opinion of counsel may be based, insofar as it relates
to factual matters, on information with respect to which is in the possession of
the Issuer, upon the certificate, statement or opinion of or representations by
an officer or officers of the Issuer, unless such counsel knows that the
certificate, statement or opinion or representations with respect to the matters
upon which his certificate, statement or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should know that the same are
erroneous.
Any certificate, statement or opinion of an officer of the Issuer or of
counsel may be based, insofar as it relates to accounting matters, upon a
certificate or opinion of or representations by an accountant or firm of
accountants in the employ of the Issuer, unless such officer or counsel, as the
case may be, knows that the certificate or opinion or representations with
respect to the accounting matters upon which his certificate, statement or
opinion may be based as aforesaid are erroneous, or in the exercise of
reasonable care should know that the same are erroneous.
Any certificate or opinion of any independent firm of public accountants
filed with and directed to the Trustee shall contain a statement that such firm
is independent.
SECTION 11.6 Payment Due on Saturdays, Sundays and Holidays. If the date of
maturity of principal of or interest, if any, ays on the Securities of any
series or the date fixed for redemption, purchase or repayment of any such
Security shall not be a Business Day, then payment of interest, if any, premium,
if any, or principal need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on the date of
maturity or the date fixed for redemption, purchase or repayment, and, in the
case of payment, no interest shall accrue for the period after such date.
SECTION 11.7 Conflict of Any Provision of Indenture with Trust Indenture
Act of 1939. If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with another provision included in this Indenture which
is required to be included herein by any of Sections 310 to 317, inclusive, or
is deemed applicable to this Indenture by virtue of the provisions, of the Trust
Indenture Act of 1939, such required provision shall control.
SECTION 11.8 GOVERNING LAW. THIS INDENTURE AND EACH SECURITY SHALL BE
DEEMED TO BE A CONTRACT UNDER THE LAWS OF THE STATE OF NEW YORK AND FOR ALL
PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF SUCH
STATE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS.
SECTION 11.9 Counterparts. This Indenture may be executed in any number of
counterparts, each of which shall be an original; but such counterparts shall
together constitute but one and the same instrument.
SECTION 11.10 Effect of Headings. The Article and Section headings herein
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
ARTICLE TWELVE
REDEMPTION OF SECURITIES AND SINKING FUNDS
SECTION 12.1 Applicability of Article. The provisions of this Article shall
be applicable to the Securities of any series which are redeemable before their
maturity or to any sinking fund for the retirement of Securities of a series
except as otherwise specified, as contemplated by Section 2.3 for Securities of
such series.
SECTION 12.2 Notive of Redemption; Partial Redemption. Notice of redemption
to the Holders of Securities of any s series to be redeemed as a whole or in
part at the option of the Issuer shall be given by mailing notice of such
redemption by first class mail, postage prepaid, at least 30 days and not more
than 60 days prior to the date fixed for redemption to such Holders of
Securities of such series at their last addresses as they shall appear in the
Security register. Any notice which is mailed in the manner herein provided
shall be conclusively presumed to have been duly given, whether or not the
Holder receives the notice. Failure to give notice by mail, or any defect in the
notice to the Holder of any Security of a series designated for redemption as a
whole or in part shall not affect the validity of the proceedings for the
redemption of any other Security of such series.
The notice of redemption to each such Holder shall specify (i) the
principal amount of each Security of such series held by such Holder to be
redeemed, (ii) the date fixed for redemption, (iii) the redemption price, (iv)
the place or places of payment, (v) the CUSIP number relating to such
Securities, (vi) that payment will be made upon presentation and surrender of
such Securities, (vii) whether such redemption is pursuant to the mandatory or
optional sinking fund, or both, if such be the case, (viii) whether interest, if
any, (or, in the case of Original Issue Discount Securities, original issue
discount) accrued to the date fixed for redemption will be paid as specified in
such notice and (ix) whether on and after said date interest, if any, (or, in
the case of Original Issue Discount Securities, original issue discount) thereon
or on the portions thereof to be redeemed will cease to accrue. In case any
Security of a series is to be redeemed in part only, the notice of redemption
shall state the portion of the principal amount thereof to be redeemed and shall
state that on and after the date fixed for redemption, upon surrender of such
Security, a new Security or Securities of such series in principal amount equal
to the unredeemed portion thereof will be issued.
The notice of redemption of Securities of any series to be redeemed at the
option of the Issuer shall be given by the Issuer or, at the Issuer's request,
by the Trustee in the name and at the expense of the Issuer.
On or before the redemption date specified in the notice of redemption
given as provided in this Section 12.2, the Issuer will deposit with the Trustee
or with one or more paying agents (or, if the Issuer is acting as its own paying
agent, set aside, segregate and hold in trust as provided in Section 3.5) an
amount of money sufficient to redeem on the redemption date all the Securities
of such series so called for redemption at the appropriate redemption price,
together with accrued interest, if any, to the date fixed for redemption. The
Issuer will deliver to the Trustee at least 45 days prior to the date fixed for
redemption (unless a shorter notice period shall be satisfactory to the Trustee)
an Officers' Certificate stating the aggregate principal amount of Securities to
be redeemed. In case of a redemption at the election of the Issuer prior to the
expiration of any restriction on such redemption, the Issuer shall deliver to
the Trustee, prior to the giving of any notice of redemption to Holders pursuant
to this Section, an Officers' Certificate stating that such restriction has been
complied with.
If less than all the Securities of a series are to be redeemed, the
Trustee, within 10 Business Days after the Issuer gives written notice to the
Trustee that such redemption is to occur, shall select, in such manner as it
shall deem appropriate and fair, Securities of such series to be redeemed.
Notice of the redemption shall be given only after such selection has been made.
Securities may be redeemed in part in multiples equal to the minimum authorized
denomination for Securities of such series or any multiple thereof. The Trustee
shall promptly notify the Issuer in writing of the Securities of such series
selected for redemption and, in the case of any Securities of such series
selected for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires, all
provisions relating to the redemption of Securities of any series shall relate,
in the case of any Security redeemed or to be redeemed only in part, to the
portion of the principal amount of such Security which has been or is to be
redeemed.
SECTION 12.3 Payment of Securities Called for Redemption. If notice of
redemption has been given as provided by this n Article Twelve, the Securities
or portions of Securities specified in such notice shall become due and payable
on the date and at the place or places stated in such notice at the applicable
redemption price, together with interest, if any, accrued to the date fixed for
redemption, and on and after said date (unless the Issuer shall default in the
payment of such Securities at the redemption price, together with interest, if
any, accrued to said date) interest, if any (or, in the case of Original Issue
Discount Securities, original issue discount) on the Securities or portions of
Securities so called for redemption shall cease to accrue, and such Securities
shall cease from and after the date fixed for redemption (unless an earlier date
shall be specified in a Board Resolution, Officers' Certificate or executed
supplemental indenture referred to in Sections 2.1 and 2.3 by or pursuant to
which the form and terms of the Securities of such series were established)
except as provided in Sections 6.5 and 10.4, to be entitled to any benefit or
security under this Indenture, and the Holders thereof shall have no right in
respect of such Securities except the right to receive the redemption price
thereof and unpaid interest, if any, to the date fixed for redemption. On
presentation and surrender of such Securities at a place of payment specified in
said notice, said Securities or the specified portions thereof shall be paid and
redeemed by the Issuer at the applicable redemption price, together with
interest, if any, accrued thereon to the date fixed for redemption; provided
that payment of interest, if any, becoming due on or prior to the date fixed for
redemption shall be payable to the Holders of Securities registered as such on
the relevant record date subject to the terms and provisions of Sections 2.3 and
2.7 hereof.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the redemption price shall, until paid or duly provided
for, bear interest from the date fixed for redemption at the rate of interest or
Yield to Maturity (in the case of an Original Issue Discount Security) borne by
such Security.
Upon presentation of any Security redeemed in part only, the Issuer shall
execute and the Trustee shall authenticate and deliver to or on the order of the
Holder thereof, at the expense of the Issuer, a new Security or Securities of
such series, and of like tenor, of authorized denominations, in principal amount
equal to the unredeemed portion of the Security so presented.
SECTION 12.4 Exclusion of Certain Securities from Eligibility for Selection
for Redemption. Securities shall be excluded from eligibility for selection for
redemption if they are identified by registration and certificate number in an
Officers' Certificate delivered to the Trustee at least 45 days prior to the
last date on which notice of redemption may be given as being owned of record
and beneficially by, and not pledged or hypothecated by either (a) the Issuer,
or (b) a Person specifically identified in such written statement as an
Affiliate of the Issuer.
SDECTION 12.5 Mandatory and Optional Sinking Funds. The minimum amount of
any sinking fund payment provided for by the terms of the Securities of any
series is herein referred to as a "mandatory sinking fund payment," and any
payment in excess of such minimum amount provided for by the terms of the
Securities of any series is herein referred to as an "optional sinking fund
payment." The date on which a sinking fund payment is to be made is herein
referred to as the "sinking fund payment date."
In lieu of making all or any part of any mandatory sinking fund payment
with respect to any series of Securities in cash, the Issuer may at its option
(a) deliver to the Trustee Securities of such series theretofore purchased or
otherwise acquired (except upon redemption pursuant to the mandatory sinking
fund) by the Issuer or receive credit for Securities of such series (not
previously so credited) theretofore purchased or otherwise acquired (except as
aforesaid) by the Issuer and delivered to the Trustee for cancellation pursuant
to Section 2.10, (b) receive credit for optional sinking fund payments (not
previously so, credited) made pursuant to this Section 12.5, or (c) receive
credit for Securities of such series (not previously so credited) redeemed by
the Issuer through any optional redemption provision contained in the terms of
such series. Securities so delivered or credited shall be received or credited
by the Trustee at the sinking fund redemption price specified in such
Securities.
On or before the 60th day next preceding each sinking fund payment date
for any series, the Issuer will deliver to the Trustee an Officers' Certificate
(a) specifying the portion of the mandatory sinking fund payment to be satisfied
by payment of cash and the portion to be satisfied by credit of Securities of
such series and the basis for such credit, (b) stating that none of the
Securities of such series to be so credited has theretofore been so credited,
(c) stating that no defaults in the payment of interest or Events of Default
with respect to such series have occurred (which have not been waived or cured
or otherwise ceased to exist) and are continuing, and (d) stating whether or not
the Issuer intends to exercise its right to make an optional sinking fund
payment with respect to such series and, if so, specifying the amount of such
optional sinking fund payment which the Issuer intends to pay on or before the
next succeeding sinking fund payment date. Any Securities of such series to be
credited and required to be delivered to the Trustee in order for the Issuer to
be entitled to credit therefor as aforesaid which have not theretofore been
delivered to the Trustee shall be delivered for cancellation pursuant to Section
2.10 to the Trustee with such Officers' Certificate (or reasonably promptly
thereafter if acceptable to the Trustee). Such Officers' Certificate shall be
irrevocable and upon its receipt by the Trustee the Issuer shall become
unconditionally obligated to make all the cash payments or payments therein
referred to, if any, on or before the next succeeding sinking fund payment date.
Failure of the Issuer, on or before any such 60th day, to deliver such Officers'
Certificate and Securities (subject to the parenthetical clause in the second
preceding sentence) specified in this paragraph, if any, shall not constitute a
default but shall constitute, on and as of such date, the irrevocable election
of the Issuer (i) that the mandatory sinking fund payment for such series due on
the next succeeding sinking fund payment date shall be paid entirely in cash
without the option to deliver or credit Securities of such series in respect
thereof, and (ii) that the Issuer will make no optional sinking fund payment
with respect to such series as provided in this Section 12.5.
If the sinking fund payment or payments (mandatory or optional or both) to
be made in cash on the next succeeding sinking fund payment date plus any unused
balance of any preceding sinking fund payments made in cash shall exceed
$50,000, or a lesser sum if the Issuer shall so request with respect to the
Securities of any particular series, such cash shall be applied on the next
succeeding sinking fund payment date to the redemption of Securities of such
series at the sinking fund redemption price together with accrued interest, if
any, to the date fixed for redemption. If such amount shall be $50,000 or less
and the Issuer makes no such request, then it shall be carried over until a sum
in excess of $50,000 is available. The Trustee shall select, in the manner
provided in Section 12.2, for redemption on such sinking fund payment date a
sufficient principal amount of Securities of such series to absorb said cash, as
nearly as may be, and shall (if requested in writing by the Issuer) inform the
Issuer of the serial numbers of the Securities of such series (or portions
thereof) so selected. The Issuer, or the Trustee, in the name and at the expense
of the Issuer (if the Issuer shall so request the Trustee in writing) shall
cause notice of redemption of the Securities of such series to be given in
substantially the manner provided in Section 12.2 (and with the effect provided
in Section 12.3) for the redemption of Securities of such series in part at the
option of the Issuer. The amount of any sinking fund payments not so applied or
allocated to the redemption of Securities of such series shall be added to the
next cash sinking fund payment for such series and, together with such payment,
shall be applied in accordance with the provisions of this Section 12.5. Any and
all sinking fund moneys held on the stated maturity date of the Securities of
any particular series (or earlier, if such maturity is accelerated), which are
not held for the payment or redemption of particular Securities of such series
shall be applied, together with other moneys, if necessary, sufficient for the
purpose, to the payment of the principal of, and interest, if any, on, the
Securities of such series at maturity.
On or before each sinking fund payment date, the Issuer shall pay to the
Trustee in cash or shall otherwise provide for the payment of all interest, if
any, accrued to the date fixed for redemption on Securities to be redeemed on
such sinking fund payment date.
The Trustee shall not redeem or cause to be redeemed any Securities of a
series with sinking fund moneys or give any notice of redemption of Securities
for such series by operation of the sinking fund during the continuance of a
default in payment of interest on such Securities or of any Event of Default
with respect to such series except that, where the giving of notice of
redemption of any Securities shall theretofore have been made, the Trustee shall
redeem or cause to be redeemed such Securities, provided that it shall have
received from the Issuer a sum sufficient for such redemption. Except as
aforesaid, and subject to Article Thirteen, any moneys in the sinking fund for
such series at the time when any such default or Event of Default known to a
Responsible Officer of the Trustee shall occur, and any moneys thereafter paid
into the sinking fund, shall, during the continuance of such default or Event of
Default, be deemed to have been collected under Article Five and held for the
payment of all such Securities. In case such Event of Default shall have been
waived as provided in Article Five or the default cured on or before the 60th
day preceding the sinking fund payment date in any year, such moneys shall
thereafter be applied on the next succeeding sinking fund payment date in
accordance with this Section to the redemption of such Securities.
ARTICLE THIRTEEN
SUBORDINATION
SECTION 13.1 Securities Subordinated to Senior Indebtedness. (a) The Issuer
covenants and agrees, and each Holder of edness Securities of each series, by
his acceptance thereof, likewise covenants and agrees, that anything in this
Indenture or the Securities of any series to the contrary notwithstanding, the
indebtedness evidenced by the Securities of each series is subordinate and
junior in right of payment, to the extent provided herein, to all Senior
Indebtedness, whether outstanding on the date of execution of this Indenture or
thereafter created, incurred or assumed, and that the subordination is for the
benefit of the holders of Senior Indebtedness.
(b) If (i) the Issuer shall default in the payment of any principal of,
premium, if any, or interest, if any, on any Senior Indebtedness 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 shall
occur with respect to Senior Indebtedness and the maturity of such Senior
Indebtedness has been accelerated in accordance with its terms, then, upon
written notice of such default to the Issuer and the Trustee by the holders of
Senior Indebtedness or any trustee or agent therefor, unless and until, in
either case, the default has been cured or waived, or has ceased to exist, or
any such acceleration has been rescinded or such Senior Indebtedness has been
paid in full, no direct or indirect payment (in cash, property, securities, by
set-off or otherwise) shall be made or agreed to be made on account of the
principal of, premium, if any, or interest, if any, on any of the Securities, or
in respect of any redemption, retirement, purchase or other acquisition of any
of the Securities other than those made in capital stock of the Issuer (or cash
in lieu of fractional shares thereof).
(c) If any default (other than a default described in paragraph (b) of
this Section 13.1) shall occur under the Senior Indebtedness, pursuant to which
the maturity thereof may be accelerated immediately without further notice
(except such notice as may be required to effect such acceleration) or the
expiration of any applicable grace periods occurs (a "Senior Nonmonetary
Default"), then, upon the receipt by the Issuer and the Trustee of written
notice thereof (a "Payment Notice") from or on behalf of holders of such Senior
Indebtedness specifying an election to prohibit such payment and other action by
the Issuer in accordance with the following provisions of this paragraph (c),
the Issuer may not make any payment or take any other action that would be
prohibited by paragraph (b) of this Section 13.1, if the conditions to
prohibition contained in clause (b) were satisfied, 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 Issuer may resume payments on the Securities following such Payment Blockage
Period if none of the events in clauses (b) or (d) of this Section 3.1 have
occurred. Any number of Payment Notices may be given; provided, however, that
(i) not more than one Payment Notice shall be given within a period of any 360
consecutive days, and (ii) no default that existed upon the date of such Payment
Notice or the commencement of such Payment Blockage Period (whether or not such
event of default is on the same issue of Senior Indebtedness) shall be made the
basis for the commencement of any other Payment Blockage Period.
(d) If (i) (A) without the consent of the Issuer, a receiver, conservator,
liquidator or trustee of the Issuer 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 Issuer 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 Issuer 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 (including without limitation the Bankruptcy Code),
and is not dismissed within 60 days after such filing; or (ii) the Issuer (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 (including without limitation the Bankruptcy Code) or
seeking the 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 Issuer 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 (including any interest thereon accruing after the
commencement of any such proceedings) shall first be paid in full before any
payment or distribution, whether in cash, securities or other property, shall be
made to any Holder of any Securities on account thereof. Any payment or
distribution, whether in cash, securities or other property (other than
securities of the Issuer 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 these subordination provisions with respect to the
indebtedness evidenced by the Securities to the payment of all Senior
Indebtedness then outstanding and to any securities issued in respect thereof
under any such plan of reorganization or adjustment) which would otherwise (but
for these subordination provisions) be payable or deliverable in respect of the
Securities of any series shall be paid or delivered directly to the holders of
Senior Indebtedness in accordance with the priorities then existing among such
holders until all Senior Indebtedness (including any interest thereon accruing
after the commencement of any such proceedings) shall have been paid in full. In
the event of any such proceeding, after payment in full of all sums owing with
respect to Senior Indebtedness, the Holders of the Securities, together with the
holders of any obligations of the Issuer ranking on a parity with the
Securities, shall be entitled to be paid from the remaining assets of the Issuer
the amounts at the time due and owing on account of unpaid principal of and
interest, if any, on the 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 any obligations of the Issuer ranking
junior to the Securities and such other obligations.
(e) If, notwithstanding the foregoing, any payment or distribution of any
character, whether in cash, securities or other property (other than securities
of the Issuer 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 Securities, to the payment of all Senior Indebtedness 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 in contravention of any of the terms hereof, such payment or distribution
of securities shall be received in trust for the benefit of and shall be paid
over or delivered and transferred to the holders of the Senior Indebtedness then
outstanding in accordance with the priorities then existing among such holders
for application to the payment of all Senior Indebtedness remaining unpaid, to
the extent necessary to pay all such Senior Indebtedness in full. In the event
of the failure of the Trustee or any Holder to endorse or assign any such
payment, distribution or security, each holder of such Senior Indebtedness is
hereby irrevocably authorized to endorse or assign the same.
(f) No present or future holder of any Senior Indebtedness shall be
prejudiced in the right to enforce subordination of the indebtedness evidenced
by the Securities by any act or failure to act on the part of the Issuer or any
Holder of Securities. Nothing contained herein shall impair, as between the
Issuer and the Holders of Securities of each series, the obligation of the
Issuer to pay to such Holders the principal of and interest, if any, on such
Securities or prevent the Trustee or the Holder from exercising all rights,
powers and remedies otherwise permitted by applicable law or hereunder upon a
default or Event of Default hereunder, all subject to the rights of the holders
of the Senior Indebtedness to remove cash, securities or other property
otherwise payable or deliverable to the Holders.
(g) Senior Indebtedness shall not be deemed to have been paid in full
unless the holders thereof shall have received cash, securities or other
property equal to the amount of such Senior Indebtedness then outstanding. Upon
the payment in full of all Senior Indebtedness, the Holders of Securities of
each series shall be subrogated to all rights of any holders of Senior
Indebtedness to receive any further payment or distributions applicable to the
Senior Indebtedness until the indebtedness evidenced by the Securities of such
series shall have been paid in full and such payments or distributions received
by such Holders, by reason of such subrogation, of cash, securities or other
property which otherwise would be paid or distributed to the holders of Senior
Indebtedness, shall, as between the Issuer and its creditors other than the
holders of Senior Indebtedness, on the one hand, and such Holders, on the other
hand, be deemed to be a payment by the Issuer on account of Senior Indebtedness,
and not on account of the Securities of such series.
(h) The provisions of this Section 13.1 shall not impair any rights,
interests, remedies or powers of any secured creditor of the Issuer in respect
of any security interest the creation of which is not prohibited by the
provisions of this Indenture.
(i) The securing of any obligations of the Issuer, otherwise ranking on a
parity with the Securities, shall not be deemed to prevent such obligations from
constituting, respectively, obligations ranking on a parity with the Securities.
SECTION 13.2 Reliance on Certificate of Liquidating Agent; Further Evidence
a to Ownership of Senior Indebtedness. Upon any payment or distribution of
assets of the Issuer, the Trustee and the Holders shall be entitled to rely upon
an order or decree issued by any court of competent jurisdiction in which such
dissolution or winding up or liquidation or reorganization or arrangement
proceedings are pending or upon a certificate of the bankruptcy trustee,
receiver, assignee for the benefit of creditors or other Person making such
payment or distribution, delivered to the Trustee or to the Holders, for the
purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of the Senior Indebtedness and other indebtedness of
the Issuer, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article
Thirteen. In the absence of any such bankruptcy trustee, receiver, assignee or
other Person, the Trustee shall be entitled to rely upon written notice by a
Person representing himself to be a holder of Senior Indebtedness (or a trustee
or representative on behalf of such holder) as evidence that such Person is a
holder of Senior Indebtedness (or is such a trustee or representative). If the
Trustee determines, in good faith, that further evidence is required with
respect to the right of any Person as a holder of Senior Indebtedness to
participate in any payment or distributions pursuant to this Article Thirteen,
the Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Senior Indebtedness held by such
Person, as to the extent to which such Person is entitled to participate in such
payment or distribution, and to other facts pertinent to the rights of such
Person under this Article Thirteen, and if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment.
SECTION 13.3 Payment Permitted If No Default. Nothing contained in this
Article Thirteen or elsewhere in this Indenture, or in any of the Securities,
shall prevent (a) the Issuer at any time, except during the pendency of any
default with respect to Senior Indebtedness described in Section 13.1(b) or
Section 13.1(c) or of any of the events described in Section 13.1(d), from
making payments of the principal of or interest, if any, on the Securities, or
(b) the application by the Trustee or any paying agent of any moneys deposited
with it hereunder to payments of the principal of or interest, if any, on the
Securities, if, at the time of such deposit, the Trustee or such paying agent,
as the case may be, did not have the written notice provided for in Section 13.4
of any event prohibiting the making of such deposit, or if, at the time of such
deposit (whether or not in trust) by the Issuer with the Trustee or paying agent
(other than the Issuer) such payment would not have been prohibited by the
provisions of this Article Thirteen, and the Trustee or any paying agent shall
not be affected by any notice to the contrary received by it on or after such
date.
SECTION 13.4 Trustee Not Charged with Knowledge of Prohibition. Anything in
this Article Thirteen or elsewhere in this Indenture contained to the contrary
notwithstanding, the Trustee shall not at any time be charged with knowledge of
the existence of any facts which would prohibit the making of any payment of
moneys to or by the Trustee and shall be entitled to assume conclusively that no
such facts exist and that no event specified in clauses (b) and (c) of Section
13.1 has happened unless and until the Trustee shall have received an Officers'
Certificate to the effect or notice in writing to that effect signed by or on
behalf of the holder or holders, or the representatives, of Senior Indebtedness
who shall have been certified by the Issuer or otherwise established to the
reasonable satisfaction of the Trustee to be such holder or holders or
representatives or from any trustee under any indenture pursuant to which such
Senior Indebtedness shall be outstanding; provided, however, that, if the
Trustee shall not have received the Officers' Certificate or notice provided for
in this Section 13.4 at least three Business Days preceding the date upon which
by the terms hereof any moneys become payable for any purpose (including,
without limitation, the payment of either the principal of or interest, if any,
on any Security), then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority to receive such
moneys and apply the same to the purpose for which they were received and shall
not be affected by any notice to the contrary that may be received by it within
three Business Days preceding such date. The Issuer shall give prompt written
notice to the Trustee and to each paying agent of any facts that would prohibit
any payment of moneys to or by the Trustee or any paying agent, and the Trustee
shall not be charged with knowledge of the curing of any default or the
elimination of any other fact or condition preventing such payment or
distribution unless and until the Trustee shall have received an Officers'
Certificate to such effect.
SECTION 13.5 Trustee to Effectuate Subordination. Each Holder of Securities
by his acceptance thereof authorizes and directs the Trustee on his behalf to
take such action as may be necessary or appropriate to effectuate the
subordination as between such Holder and holders of Senior Indebtedness as
provided in this Article Thirteen and appoints the Trustee its attorney-in-fact
for any and all such purposes.
SECTION 13.6 Rights of Trustee as Holder of Senior Indebtedness. The
Trustee shall be entitled to all the rights set forth in this Article Thirteen
with respect to any Senior Indebtedness which may at the time be held by it, to
the same extent as any other holder of Senior Indebtedness and nothing in this
Indenture shall deprive the Trustee of any of its rights as such holder. Nothing
in this Article Thirteen shall apply to claims of, or payments to, the Trustee
under or pursuant to Section 6.6.
SECTION 13.7 Article Applicable to Paying Agents. In case at any time any
paying agent other than the Trustee shall have been appointed by the Issuer and
be then acting hereunder, the term "Trustee" as used in this Article Thirteen
shall in such case (unless the context shall otherwise require) be construed as
extending to and including such paying agent within its meaning as fully for all
intents and purposes as if the paying agent were named in this Article Thirteen
in addition to or in place of the Trustee; provided, however, that Sections 13.4
and 13.6 shall not apply to the Issuer if it acts as paying agent.
SECTION 13.8 Subordination Rights Not Impaired by Acts or Omissions of the
Issuer or Holders of Senior Indebtedness.. No right of any present or future
holders of any Senior Indebtedness to enforce subordination as herein provided
shall at any time in any way be prejudiced or impaired by any act or failure to
act on the part of the Issuer or by any act or failure to act, in good faith, by
any such holder, or by any noncompliance by the Issuer with the terms,
provisions and covenants of this Indenture, regardless of any knowledge thereof
which any such holder may have or be otherwise charged with. The holders of
Senior Indebtedness, may at any time or from time to time and in their absolute
direction, change the manner, place or terms of payment, change or extend the
time of payment of, or renew or alter, any such Senior Indebtedness, or amend or
supplement any instrument pursuant to which any such Senior Indebtedness is
issued or by which it may be secured, or release any security therefor, or
exercise or refrain from exercising any other of their rights under such Senior
Indebtedness, including, without limitation, the waiver of default thereunder,
all without notice to or assent from the Holders of the Securities or the
Trustee and without affecting the obligations of the Issuer, the Trustee or the
Holders of Securities under this Article Thirteen.
SECTION 13.9 Trustee Not Fiduciary for Holders of Senior Indebtedness. The
Trustee shall not be deemed to owe any fiduciary duty to the holders of the
Senior Indebtedness. With respect to the holders of Senior Indebtedness, the
Trustee undertakes to perform or to observe only such of its covenants or
obligations as are specifically set forth in this Article Thirteen and no
implied covenants or obligations with respect to holders of Senior Indebtedness
shall be read into this Indenture against the Trustee.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, as of the date first written above.
EMCOR GROUP, INC.
By:
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Title:
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STATE STREET BANK AND TRUST
COMPANY, as Trustee
By:
-------------------------------------------
Title:
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Exhibit 4(c)
EXECUTION COPY
FIRST SUPPLEMENTAL INDENTURE
FIRST SUPPLEMENTAL INDENTURE, dated as of March 18, 1998 (this
"Supplemental Indenture"), between EMCOR Group, Inc, a Delaware corporation (the
"Issuer") and State Street Bank and Trust Company, a Massachusetts trust
company, as trustee (the "Trustee").
W I T N E S S E T H:
WHEREAS, the Issuer and the Trustee are parties to an Indenture dated
as of March 18, 1998 (as amended, supplemented or otherwise modified from time
to time, the "Indenture");
WHEREAS, the Board of Directors of the Issuer has adopted a Board
Resolution permitting the Issuer to issue $115,000,000 in aggregate principal
amount of 5 3/4% Convertible Subordinated Notes due 2005 in the form attached
hereto as Exhibit A (the "Notes"), which Notes shall constitute a series of
Securities under the Indenture; and
WHEREAS, the Issuer has requested the Trustee and the Trustee has
agreed to join in the execution of this Supplemental Indenture in accordance
with the terms of Section 8.1 of the Indenture and subject to the conditions set
forth herein;
NOW, THEREFORE, in consideration of the promises and mutual
agreements herein contained, the Issuer and the Trustee mutually covenant and
agree for the equal and proportionate benefit of the Holders from time to time
of the Notes as follows:
ARTICLE ONE
DEFINITIONS
SECTION 1.01. Certain Definitions Incorporated by Reference. Unless
otherwise defined herein, the use of the terms and expressions herein is in
accordance with the definitions, uses and constructions contained in the
Indenture and the form of Note attached hereto as Exhibit A and incorporated
herein by reference.
SECTION 1.02. Amendments to Article One of the Indenture. Article One
of the Indenture is hereby amended in respect of the Notes and only in respect
of the Notes, by adding thereto, and replacing where applicable, or by amending
the following definitions in their appropriate alphabetical order:
"Capital Stock" means, with respect to any corporation, any and all
shares, interests, rights to purchase (other than convertible or exchangeable
indebtedness), warrants, options, participations or other equivalents of or
interests (however designated) in stock issued by that corporation.
"Cash" means such coin or currency of the United States of America as
at the time of payment shall be legal tender for the payment of public and
private debts.
"Change of Control" means the occurrence of any of the following
events: (i) any merger or consolidation of the Issuer with or into any person or
any sale, transfer or other conveyance, whether direct or indirect, of all or
substantially all of the assets of the Issuer, on a consolidated basis, in one
transaction or a series of related transactions, if, immediately after giving
effect to such transaction or series of related transactions, any "person" or
"group" is or becomes the "beneficial owner," directly or indirectly, of more
than 50% of the total voting power in the aggregate normally entitled to vote in
the election of directors, managers, or trustees, as applicable, of the
transferee or surviving entity, (ii) when any "person" or "group" is or becomes
the "beneficial owner," directly or indirectly, of more than 50% of the total
voting power in the aggregate normally entitled to vote in the election of
directors of the Issuer, (iii) when, during any period of 12 consecutive months
after the Issue Date, individuals who at the beginning of any such 12-month
period constituted the Board of Directors of the Issuer (together with any new
directors whose election by such Board or whose nomination for election by the
stockholders of the Issuer was approved by a vote of a majority of the directors
then still in office who were either directors at the beginning of such period
or whose election or nomination for election was previously so approved) cease
for any reason to constitute a majority of the Board of Directors of the Issuer
then in office, (iv) a sale or disposition, whether directly or indirectly, by
the Issuer of all or substantially all of its assets, or (v) the pro rata
distribution by the Issuer to its stockholders of substantially all of its
assets.
For purposes of this definition of "Change of Control," (i) the terms
"person" and "group" shall have the meaning used for purposes of Rules 13d-3 and
13d-5 of the Exchange Act as in effect on the Issue Date, whether or not
applicable; and (ii) the term "beneficial owner" shall have the meaning used in
Rules 13d-3 and 13d-5 under the Exchange Act as in effect on the Issue Date,
whether or not applicable, except that a "person" shall be deemed to have
"beneficial ownership" of all shares that any such person has the right to
acquire, whether such right is exercisable immediately or only after the passage
of time or upon the occurrence of certain events.
"Common Stock" means the Issuer's common stock, par value $0.01 per
share, or as such stock may be reconstituted from time to time.
"Conversion Price" shall have the meaning set
forth in Section 14.4.
"Conversion Shares" shall have the meaning set
forth in Section 14.5(k).
"Date of Conversion" shall have the meaning set
forth in Section 14.2.
"Distribution Date" shall have the meaning set
forth in Section 14.5(k).
"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,
surety bond or similar credit transaction and any guaranty by such person of any
such reimbursement obligation, (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 and guaranties of such obligations; and
(b) any amendments, modifications, refundings, renewals or extensions of
any indebtedness or obligation described as Indebtedness in clause (a) above.
"Interest Payment Date" means the stated due date of an installment
of interest on the Securities. With respect to the Notes, interest is payable
semi-annually on April 1 and October 1 of each year, commencing on October 1,
1998.
"Issue Date" means the date on which the Notes are originally issued
and authenticated under the Indenture.
"Last Sale Price" shall have the meaning set forth
in Section 14.3.
"Notice of Default" shall mean a written notice as set forth in
Section 5.1(d) or 5.1(g) of the Indenture, as amended by Sections 2.3(b) and (c)
hereof.
"Repurchase Date" shall have the meaning set forth
in Section 15.1.
"Repurchase Offer" shall have the meaning set
forth in Section 15.1.
"Repurchase Offer Period" shall have the meaning
set forth in Section 15.1(b).
"Repurchase Price" shall have the meaning set
forth in Section 15.1.
"Repurchase Put Date" shall have the meaning set
forth in Section 15.1(f)(v).
"Stated Maturity" when used with respect to any Note, means April 1,
2005.
"Trading Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday, other than any day on which securities are not traded on the New York
Stock Exchange.
ARTICLE TWO
TERMS AND ISSUANCE OF THE NOTES
Section 2.01. Form of Notes; Incorporation of Terms. The Notes shall
initially be issued in global form, in denominations of $1,000 and integral
multiples thereof, substantially in the form of Exhibit A attached hereto. The
terms of such Notes are herein incorporated by reference and are part of this
Supplemental Indenture.
Section 2.02. Issue of Notes. A series of Securities which shall be
designated the "5 3/4% Convertible Subordinated Notes due 2005" shall be
executed, authenticated and delivered in accordance with the provisions of, and
shall in all respects be subject to, the terms, conditions and covenants of the
Indenture and this Supplemental Indenture (including the form of Note set forth
as Exhibit A hereto).
Upon receipt of an Issuer Order, the Trustee shall authenticate Notes
for original issue in the aggregate principal amount of $100,000,000 and such
additional principal amount, if any, as shall be determined from time to time
pursuant to the next sentence of this Section 2.2. Upon receipt by the Trustee
of an Officers' Certificate stating that Donaldson, Lufkin & Jenrette Securities
Corporation (the "Underwriter") has elected to purchase from the Issuer a
specified aggregate principal amount of additional Notes (the aggregate of all
such additional Notes not to exceed $15,000,000) pursuant to Section 2 of the
Underwriting Agreement dated March 12, 1998 between the Issuer and the
Underwriter, the Trustee shall authenticate and deliver such specified aggregate
principal amount of additional Notes to or upon the written order of the Issuer
as set forth in such Officers' Certificate. Each such Officers' Certificate and
executed Notes to be authenticated by the Trustee must be received by the
Trustee not later than ten, and in any event at least three full Business Days
prior to the proposed date for delivery of such additional Notes. The aggregate
principal amount of Notes of the series created hereby which may be
authenticated and delivered under the Indenture shall not, except as permitted
by the provisions of the Indenture, exceed $115,000,000.
Section 2.03. Amendments. Solely as it relates to the Notes, the
Indenture is hereby amended as follows. The Indenture is not amended as it
relates to any other series of Securities to be issued thereunder.
(a) Section 5.1(a) is hereby amended by inserting after the word
"otherwise" the following language: "including, without limitation,
default in the payment of the Repurchase Price on the Repurchase Date in
accordance with Article Fifteen, whether or not such payment is prohibited
by Article Thirteen".
(b) Section 5.1(d) is hereby amended by inserting after the word
"remedied" the following language: "and stating that such notice is a
'Notice of Default' hereunder,".
(c) Section 5.1(g) is hereby amended by inserting the number "$15,000,000"
in place of the number "$25,000,000" and by inserting the number "30" in
place of the number "20".
(d) Section 5.1(h) is hereby renumbered as Section 5.1(j).
(e) A new Section 5.1(h) is hereby added immediately following Section
5.1(g) and shall read as follows: "the failure by the Issuer to perform
any conversion of the Securities required under this Indenture, and the
continuance of such failure for a period of 30 days, whether or not such
payment or conversion is prohibited by Article Thirteen; or".
(f) Section 5.1(i) is hereby added immediately following Section 5.1(h)
and shall read as follows: "final unsatisfied judgments not covered by
insurance (including self-insurance), or the issuance of any warrant of
attachment against any portion of the property or assets of the Issuer or
any of its Significant Subsidiaries, aggregating in excess of $15,000,000
at any one time shall have been rendered against the Issuer or any of its
Significant Subsidiaries and not have been stayed, bonded or discharged
for a period (during which execution shall not be effectively stayed) of
60 days (or, in the case of any such final judgment which provides for
payment over time, which shall so remain unstayed, unbonded or
undischarged beyond any applicable payment date provided therein); or"
(g) The following paragraph is hereby inserted immediately following
Section 5.1(j):
"Notwithstanding the 60-day period and notice requirement contained
in Section 5.1(d) above, with respect to a default under Article Fifteen, the
60-day period referred to in Section 5.1(d) shall be deemed to have begun as of
the date the notice of Repurchase Offer is required to be sent under Section
15.1(f), so long as the Trustee or Holders of at least 25% in principal amount
of the outstanding Securities thereafter give the Notice of Default referred to
in Section 5.1(d) to the Issuer and, if applicable, the Trustee; provided,
however, that if the breach or default is a result of a default in the payment
when due of the Repurchase Price on the Repurchase Date, such Event of Default
shall be deemed, for purposes of this Section 5.1, to arise no later than on the
Repurchase Date."
(h) The final paragraph of Section 5.1 is hereby amended and restated in
its entirety as follows:
"Except with respect to an Event of Default pursuant to Section 5.1
(a), (b), (c) or (h), the Trustee shall not be charged with knowledge of any
Event of Default unless written notice thereof shall have been given to a
Responsible Officer by the Issuer, a paying agent or any Securityholder."
(i) Section 5.8 is hereby amended and restated in its entirety as follows
"SECTION 5.8 Notice of Defaults. The Trustee shall, within 90 days
after the occurrence of a default, with respect to Securities of any series then
Outstanding, mail to all Holders of Securities of such series, as the names and
the addresses of such Holders appear upon the Securities register, notice of all
defaults known to the Trustee with respect to such series, unless such defaults
shall have been cured before the giving of such notice (the term "defaults" for
the purpose of this Section 5.8 being hereby defined to be the events specified
in clauses (a), (b), (c), (d), (e), (f), (g), (h), (i) and (j) of Section 5.1,
not including periods of grace, if any, provided for therein and irrespective of
the giving of the written notice specified in said clause (d) or (g) but in the
case of any default of the character specified in said clause (d) or (g) no such
notice to Securityholders shall be given until at least 60 days after the giving
of written notice thereof to the Issuer pursuant to said clause (d) or (g), as
the case may be); provided, however, that, except in the case of default in the
payment of the principal of or interest, if any, on any of the Securities, or in
the payment or satisfaction of any sinking fund or other purchase obligation,
the Trustee shall be protected in withholding such notice if and so long as the
board of directors, the executive committee, or a trust committee of directors
or Responsible Officers or both, of the Trustee in good faith determines that
the withholding of such notice is in the best interests of the Securityholders."
(j) The following Article Fourteen, captioned "ARTICLE FOURTEEN CONVERSION
OF SECURITIES", is hereby added to the Indenture immediately following
Article Thirteen
thereof:
"SECTION 14.1. Conversion Privilege. Subject to and upon compliance
with the provisions of this Article Fourteen, at the option of the Holder
thereof, any Security may at any time be converted, in whole, or in part in
multiples of $1,000 principal amount, into fully paid and non-assessable shares
of Common Stock issuable upon conversion of the Securities, at the Conversion
Price in effect at the Date of Conversion, until and including, but not after
the close of business on the Stated Maturity, or unless such Security or some
portion thereof shall have been called for redemption or delivered for
repurchase prior to such date and no default is made in making due provision for
the payment of the redemption price in accordance with the terms of this
Indenture, in which case, with respect to such Security or portion thereof as
has been so called for redemption or delivered for repurchase, such Security or
portion thereof may be so converted until and including, but not after, the
close of business on the Business Day prior to the Redemption Date or Repurchase
Date, as applicable, for such Security, unless the Issuer subsequently fails to
pay the applicable Redemption Price or Repurchase Price, as the case may be.
SECTION 14.2. Exercise of Conversion Privilege. In order to exercise
the conversion privilege, the Holder of any Security to be converted shall
surrender such Security to the Issuer at any time during usual business hours at
its office or agency maintained for the purpose as provided in this Indenture,
accompanied by a fully executed written notice, in substantially the form set
forth on the reverse of the Security, that the Holder elects to convert such
Security or a stated portion thereof constituting a multiple of $1,000 principal
amount, and, if such Security is surrendered for conversion during the period
between the close of business on any record date and the opening of business on
the next following Interest Payment Date and has not been called for redemption
on a Redemption Date which occurs within such period, accompanied also by
payment to the Issuer of an amount equal to the interest payable on such
Interest Payment Date on the principal amount of the Security being surrendered
for conversion, notwithstanding such conversion; provided, however, that no such
payment shall be required with respect to interest payable on April 1, 2001. The
Holder of any Security at the close of business on a record date will be
entitled to receive the interest payable on such Security on the corresponding
Interest Payment Date notwithstanding the conversion thereof after such record
date. The interest payment with respect to a Note called for redemption on a
date during the period from the close of business on or after any record date to
the close of business on the Business Day following the corresponding Interest
Payment Date will be payable on the corresponding Interest Payment Date to the
registered Holder at the close of business on that record date (notwithstanding
the conversion of such Note before the corresponding Interest Payment Date), and
a Holder who elects to convert need not include funds equal to the interest
paid. Such notice of conversion shall also state the name or names (with
address) in which the certificate or certificates for shares of Common Stock
shall be issued. Securities surrendered for conversion shall (if reasonably
required by the Issuer or the Trustee) be duly endorsed by, or be accompanied by
a written instrument or instruments of transfer in form satisfactory to the
Issuer duly executed by, the Holder or his attorney duly authorized in writing.
As promptly as practicable after the receipt of such notice and the surrender of
such Security as aforesaid, the Issuer shall, subject to the provisions of
Section 14.9 hereof, issue and deliver at such office or agency to such Holder,
or on his written order, a certificate or certificates for the number of full
shares of Common Stock issuable on such conversion of Securities in accordance
with the provisions of this Article Fourteen and Cash, as provided in Section
14.3 hereof, in respect of any fraction of a share of Common Stock otherwise
issuable upon such conversion. Such conversion shall be deemed to have been
effected immediately prior to the close of business on the date (herein called
the "Date of Conversion") on which such Security shall have been surrendered as
aforesaid, and the person or persons in whose name or names any certificate or
certificates for shares of Common Stock shall be issuable upon such conversion
shall be deemed to have become on the Date of Conversion the holder or holders
of record of the shares represented thereby; provided, however, that any such
surrender on any date when the stock transfer books of the Issuer shall be
closed shall cause the person or persons in whose name or names the certificate
or certificates for such shares are to be issued to be deemed to have become the
record holder or holders thereof for all purposes at the opening of business on
the next succeeding day on which such stock transfer books are open, but such
conversion shall nevertheless be at the Conversion Price in effect at the close
of business on the date when such Security shall have been so surrendered with
the conversion notice. In the case of conversion of a portion, but less than
all, of a Security, the Issuer shall as promptly as practicable execute, and the
Trustee shall authenticate and deliver to the Holder thereof, at the expense of
the Issuer, a Security or Securities in the aggregate principal amount of the
unconverted portion of the Security surrendered. Except as otherwise expressly
provided in this Indenture, no payment or adjustment shall be made for interest
accrued on any Security (or portion thereof) converted or for dividends or
distributions on any Common Stock issued upon conversion of any Security.
SECTION 14.3. Fractional Interest. No fractions of shares or scrip
representing fractions of shares shall be issued upon conversion of Securities.
If more than one Security shall be surrendered for conversion at one time by the
same holder, the number of full shares which shall be issuable upon conversion
thereof shall be computed on the basis of the aggregate principal amount of the
Securities so surrendered. If any fraction of a share of Common Stock would,
except for the foregoing provisions of this Section 14.3, be issuable on the
conversion of any Security or Securities, the Issuer shall make payment in lieu
thereof in an amount of Cash equal to the value of such fraction computed on the
basis of the last sale price of the Common Stock as quoted on the Nasdaq
National Market (or if not quoted thereon, then on the principal national
securities exchange on which the Common Stock is listed or admitted to trading)
at the close of business on the Date of Conversion or if no such sale takes
place on such day, the last sale price for such day shall be the average of the
closing bid and asked prices regular way on the Nasdaq National Market (or if
not quoted thereon, on the principal national securities exchange on which the
Common Stock is listed or admitted to trading) for such day (any such last sale
price being hereinafter referred to as the "Last Sale Price"). If on such
Trading Day the Common Stock is not quoted by any such organization, the fair
value of such Common Stock on such day, as reasonably determined in good faith
by the Board of Directors of the Issuer, shall be used.
SECTION 14.4. Conversion Price. The price per share of Common Stock
issuable upon conversion of the Securities shall initially be $27.34 (or $27.34
in principal amount of Securities for each such share of Common Stock) (the
"Conversion Price").
SECTION 14.5. Adjustment of Conversion Price. The Conversion Price shall be
subject to adjustment from time to time as follows:
(a) In case the Issuer shall (1) make or pay a dividend (or other
distribution) in shares of Common Stock on any class of Capital Stock of the
Issuer, (2) subdivide its outstanding shares of Common Stock into a greater
number of shares or (3) combine or reclassify its outstanding shares of Common
Stock into a smaller number of shares, the Conversion Price in effect
immediately prior to such action shall be adjusted so that the Holder of any
Security thereafter surrendered for conversion shall be entitled to receive the
number of shares of Common Stock that he would have owned immediately following
such action had such Security been converted immediately prior thereto. An
adjustment made pursuant to this subsection (a) shall become effective
immediately, except as provided in subsection (i) below, after the record date
in the case of a dividend or distribution and shall become effective immediately
after the effective date in the case of a subdivision or combination.
(b) In case the Issuer shall issue rights, options or warrants to all or
substantially all holders of Common Stock entitling them to subscribe for or
purchase shares of Common Stock at a price per share less than the then current
market price per share of the Common Stock (as determined pursuant to subsection
(f) below) on the record date mentioned below, the Conversion Price shall be
adjusted to a price, computed to the nearest cent, so that the same shall equal
the price determined by multiplying:
(i) the Conversion Price in effect immediately prior to the date of
issuance of such rights or warrants by a fraction, of which
(ii) the numerator shall be (A) the number of shares of Common Stock
outstanding on the date of issuance of such rights, options or warrants,
immediately prior to such issuance, plus (B) the number of shares which
the aggregate offering price of the total number of shares so offered for
subscription or purchase would purchase at such current market price
(determined by multiplying such total number of shares by the exercise
price of such rights, options or warrants and dividing the product so
obtained by such current market price), and of which
(iii) the denominator shall be (A) the number of shares of Common
Stock outstanding on the date of issuance of such rights, options or
warrants, immediately prior to such issuance, plus (B) the number of
additional shares of Common Stock which are so offered for subscription or
purchase.
Such adjustment shall become effective immediately, except as provided in
subsection (i) below, after the record date for the determination of holders
entitled to receive such rights, options or warrants; provided, however, that if
any such rights, options or warrants issued by the Issuer as described in this
subsection (b) are only exercisable upon the occurrence of certain triggering
events relating to control and provided for in shareholder rights plans, then
the Conversion Price will not be adjusted as provided in this subsection (b)
until such triggering events occur.
(c) In case the Issuer or any Subsidiary of the Issuer shall distribute to
all or substantially all holders of Common Stock, any of its assets, evidences
of indebtedness, cash or other assets or shares of Capital Stock other than
Common Stock (including securities, but other than (x) dividends or
distributions exclusively in cash or (y) any dividend or distribution for which
an adjustment is required to be made in accordance with subsection (a) or (b)
above), then in each such case the Conversion Price shall be adjusted so that
the same shall equal the price determined by multiplying the Conversion Price in
effect immediately prior to the date of such distribution by a fraction of which
the numerator shall be the then current market price per share of the Common
Stock (determined as provided in subsection (f) below) on the record date
mentioned below less the then fair market value (as determined by the Board of
Directors of the Issuer whose determination shall be conclusive) of the portion
of the assets so distributed applicable to one share of Common Stock, and of
which the denominator shall be such current market price per share of the Common
Stock. Such adjustment shall become effective immediately, except as provided in
subsection (i) below, after the record date for the determination of
stockholders entitled to receive such distribution. Notwithstanding the
foregoing, in the event that the fair market value of the assets, evidences of
indebtedness or other securities so distributed applicable to one share of
Common Stock equals or exceeds such current market price per share of Common
Stock, or such current market price exceeds such fair market value by less than
$0.10 per share, the Conversion Price shall not be adjusted pursuant to this
subsection (c) and, to the extent applicable, the provisions of subsection (k)
shall apply to such distribution.
(d) In case the Issuer or any Subsidiary of the Issuer shall make any
distribution consisting exclusively of cash (excluding any cash portion of
distributions for which an adjustment is required to be made in accordance with
(c) above, or cash distributed upon a merger or consolidation to which Section
14.6 applies) to all or substantially all holders of Common Stock in an
aggregate amount that, combined together with (i) all other such all-cash
distributions made within the then preceding 12 months in respect of which no
adjustment has been made and (ii) any cash and the fair market value of other
consideration paid or payable in respect of any tender or exchange offer by the
Issuer or any of its Subsidiaries for Common Stock concluded within the
preceding 12 months in respect of which no adjustment has been made, exceeds 15%
of the Issuer's market capitalization (defined as being the product of the then
current market price of the Common Stock (determined as provided in subsection
(f) below) times the number of shares of Common Stock then outstanding) on the
record date of such distribution, then in each such case the Conversion Price
shall be adjusted so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the date of such
distribution by a fraction of which the numerator shall be the then current
market price per share of the Common Stock on such record date less the amount
of the cash so distributed applicable to one share of Common Stock, and of which
the denominator shall be such current market price per share of the Common
Stock. Such adjustment shall become effective immediately, except as provided in
subsection (h) below, after the record date for the determination of
stockholders entitled to receive such distribution. Notwithstanding the
foregoing, in the event that the cash so distributed applicable to one share of
Common Stock equals or exceeds such current market price per share of Common
Stock, or such current market price exceeds such amount of cash by less than
$0.10 per share, the Conversion Price shall not be adjusted pursuant to this
subsection (d), and, to the extent applicable, the provisions of subsection (k)
shall apply to such distribution.
(e) In case there shall be completed a tender or exchange offer made by
the Issuer or any Subsidiary of the Issuer for all or any portion of the Common
Stock (any such tender or exchange offer being referred to as an "Offer") that
involves an aggregate consideration having a fair market value as of the
expiration of such Offer (the "Expiration Time") that, together with (i) any
cash and the fair market value of any other consideration payable in respect of
any other Offer, as of the expiration of such other Offer, expiring within the
12 months preceding the expiration of such Offer and in respect for which no
Conversion Price adjustment pursuant to this subsection (e) has been made and
(ii) the aggregate amount of any all-cash distributions referred to in
subsection (d) of this Section 14.5 to all holders of Common Stock within the 12
months preceding the expiration of such Offer for which no conversion price
adjustment pursuant to such subsection (d) has been made, exceeds 15% of the
product of the then current market price per share (determined as provided in
subsection (f) below) of the Common Stock on the Expiration Time times the
number of shares of Common Stock outstanding (including any tendered shares) on
the Expiration Time, the Conversion Price shall be reduced by multiplying such
Conversion Price in effect immediately prior to the Expiration Time by a
fraction of which the numerator shall be (i) the product of the then current
market price per share (determined as provided in subsection (f) below) of the
Common Stock on the Expiration Time times the number of shares of Common Stock
outstanding (including any tendered shares) on the Expiration Time minus (ii)
the fair market value of the aggregate consideration payable to stockholders
based on the acceptance (up to any maximum specified in the terms of the Offer)
of all shares validly tendered and not withdrawn as of the Expiration Time (the
shares deemed so accepted being referred to as the "Purchased Shares") and the
denominator shall be the product of (i) such current market price per share on
the Expiration Time times (ii) such number of outstanding shares on the
Expiration Time less the number of Purchased Shares, such reduction to become
effective immediately prior to the opening of business on the day following the
Expiration Time.
For purposes of this subsection (e), the fair market value of any
consideration with respect to an Offer shall be determined by the Board of
Directors of the Issuer (whose determination shall be conclusive) and described
in a Board Resolution.
(f) For the purpose of any computation under subsections (b), (c), (d) and
(e) above, the current market price per share of Common Stock on any date shall
be deemed to be the average of the Last Sale Prices of a share of Common Stock
for the five consecutive Trading Days selected by the Issuer commencing not more
than 20 Trading Days before, and ending not later than, the earlier of the date
in question and the date before the " 'ex' date," with respect to the issuance,
distribution or Offer requiring such computation. If on any such Trading Day the
Common Stock is not quoted by any organization referred to in the definition of
Last Sale Price in Section 14.3 hereof, the fair value of the Common Stock on
such day, as determined by the Board of Directors of the Issuer (whose
determination shall be conclusive), shall be used. For purposes of this
paragraph, the term " 'ex' date," when used with respect to any issuance,
distribution or payments with respect to an Offer, means the first date on which
the Common Stock trades regular way on the Nasdaq National Market (or if not
listed or admitted to trading thereon, then on the principal national securities
exchange on which the Common Stock is listed or admitted to trading) without the
right to receive such issuance, distribution or Offer.
(g) In addition to the foregoing adjustments in subsections (a), (b), (c),
(d) and (e) above, the Issuer will be permitted to make such reductions in the
Conversion Price as it considers to be advisable in order that any event treated
for Federal income tax purposes as a dividend of stock or stock rights will not
be taxable to the holders of the shares of Common Stock.
(h) In the event the Issuer elects to make such a reduction in the
Conversion Price, the Issuer will comply with the requirements of Rule 14e-1 of
the Exchange Act and any other Federal and state laws and regulations thereunder
if and to the extent that such laws and regulations are applicable in connection
with the reduction of the Conversion Price of the Notes; provided that any
provisions of this Indenture which conflict with such laws shall be deemed to be
superseded by the provisions of such laws.
(i) In any case in which this Section 14.5 shall require that an
adjustment (including by reason of the last sentence of subsection (a) or (c)
above) be made immediately following a record date, the Issuer may elect to
defer the effectiveness of such adjustment (but in no event until a date later
than the effective time of the event giving rise to such adjustment), in which
case the Issuer shall, with respect to any Security converted after such record
date and on and before such adjustment shall have become effective (i) defer
paying any Cash payment pursuant to Section 14.3 hereof or issuing to the Holder
of such Security the number of shares of Common Stock and other Capital Stock of
the Issuer (or other assets or securities) issuable upon such conversion in
excess of the number of shares of Common Stock and other Capital Stock of the
Issuer issuable thereupon only on the basis of the Conversion Price prior to
adjustment, and (ii) not later than five Business Days after such adjustment
shall have become effective, pay to such Holder the appropriate Cash payment
pursuant to Section 14.3 hereof and issue to such Holder the additional shares
of Common Stock and other Capital Stock of the Issuer (or other assets or
securities) issuable on such conversion.
(j) No adjustment in the Conversion Price shall be required unless such
adjustment would require an increase or decrease of at least 1.0% of the
Conversion Price; provided, that any adjustments which by reason of this
subsection (j) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Article
Fourteen shall be made to the nearest cent or to the nearest one-hundredth of a
share, as the case may be.
Whenever the Conversion Price is adjusted as herein provided, the Issuer
shall promptly (i) file with the Trustee and each conversion agent an Officers'
Certificate setting forth the Conversion Price after such adjustment and setting
forth a brief statement of the facts requiring such adjustment, which
certificate shall be conclusive evidence of the correctness of such adjustment,
and (ii) mail or cause to be mailed a notice of such adjustment to each holder
of Securities at his address as the same appears on the registry books of the
Issuer. Unless and until a Responsible Officer of the Trustee shall have
received such Officers' Certificate, the Trustee shall not be deemed to have
knowledge of any adjustment of the conversion Price and may assume without
inquiry that the last Conversion Price of which the Trustee has knowledge
remains in effect.
(k) In the event that the Issuer distributes rights (including rights to
distributions referred to by paragraphs (c) and (d) of this Section 14.5 to the
extent this paragraph (k) applies thereto) or warrants (other than those
referred to in subsection (b) above) pro rata to holders of Common Stock, so
long as any such rights or warrants have not expired or been redeemed by the
Issuer, the Issuer shall make proper provision so that the Holder of any Note
surrendered for conversion will be entitled to receive upon such conversion, in
addition to the shares of Common Stock issuable upon such conversion (the
"Conversion Shares"), a number of rights or warrants to be determined as
follows: (i) if such conversion occurs on or prior to the date for the
distribution to the holders of rights or warrants of separate certificates
evidencing such rights or warrants (the "Distribution Date"), the same number of
rights or warrants to which a holder of a number of shares of Common Stock equal
to the number of Conversion Shares is entitled at the time of such conversion in
accordance with the terms and provisions of and applicable to the rights or
warrants, and (ii) if such conversion occurs after such Distribution Date, the
same number of rights or warrants to which a holder of the number of shares of
Common Stock into which the principal amount of such Note so converted was
convertible immediately prior to such Distribution Date would have been entitled
on such Distribution Date in accordance with the terms and provisions of and
applicable to the rights or warrants.
SECTION 14.6. Continuation of Conversion Privilege in Case of
Reclassification, Change, Merger, Consolidation or Sale of Assets. If any of the
following shall occur, namely: (a) any reclassification or change of outstanding
shares of Common Stock issuable upon conversion of the Securities (other than a
change in par value, or from par value to no par value, or from no par value, to
par value, or as a result of a subdivision or combination), (b) any
consolidation or merger of the Issuer with or into any other Person, or the
merger of any other Person with or into the Issuer (other than a merger which
does not result in any reclassification, change, conversion, exchange or
cancellation of outstanding shares of Common Stock) or (c) any sale, transfer or
conveyance of all or substantially all of the assets of the Issuer (computed on
a consolidated basis), then the Issuer, or such successor or purchasing entity,
as the case may be, shall, as a condition precedent to such reclassification,
change, consolidation, merger, sale or conveyance, execute and deliver to the
Trustee a supplemental indenture providing that the Holder of each Security then
outstanding shall have the right to convert such Security only into the kind and
amount of shares of stock and other securities and property (including cash)
receivable upon such reclassification, change, consolidation, merger, sale,
transfer or conveyance by a holder of the number of shares of Common Stock
issuable upon conversion of such Security immediately prior to such
reclassification, change, consolidation, merger, sale, transfer or conveyance
assuming such holder of Common Stock of the Issuer failed to exercise his rights
of an election, if any, as to the kind or amount of securities, cash and other
property receivable upon such reclassification, change, consolidation, merger,
sale, transfer or conveyance (provided, that if the kind or amount of
securities, cash, and other property receivable upon such reclassification,
change, consolidation, merger, sale, transfer or conveyance is not the same for
each share of Common Stock of the Issuer held immediately prior to such
reclassification, change, consolidation, merger, sale, transfer or conveyance in
respect of which such rights of election shall not have been exercised
("non-electing share"), then for the purpose of this Section 14.6 the kind and
amount of securities, cash and other property receivable upon such
reclassification, change, consolidation, merger, sale, transfer or conveyance by
each non-electing share shall be deemed to be the kind and amount so receivable
per share by a plurality of the non-electing shares). Such supplemental
indenture shall provide for adjustments which shall be as nearly equivalent as
may be practicable to the adjustments provided for in this Article Fourteen. If,
in the case of any such consolidation, merger, sale or conveyance, securities
and property (including cash) receivable thereupon by a holder of shares of
Common Stock includes shares of stock or other securities and property
(including cash) of a corporation other than the successor or purchasing
corporation, as the case may be, in such consolidation, merger, sale or
conveyance, then such supplemental indenture shall also be executed by such
other corporation and shall contain such additional provisions to protect the
interests of the Holders of the Securities as the Board of Directors of the
Issuer shall reasonably consider necessary by reason of the foregoing. The
provisions of this Section 14.6 shall similarly apply to successive
consolidations, mergers, sales or conveyances.
Notice of the execution of each such supplemental indenture shall be
mailed to each Holder of Securities at his address as the same appears on the
registry books of the Issuer.
Neither the Trustee nor any conversion agent shall be under any
responsibility to determine the correctness of any provisions contained in any
such supplemental indenture relating either to the kind or amount of shares of
stock or securities or property (including cash) receivable by Holders of
Securities upon the conversion of their Securities after any such
reclassification, change, consolidation, merger, sale or conveyance or to any
adjustment to be made with respect thereto, but, subject to the provisions of
Article Ten hereof, may accept as conclusive evidence of the correctness of any
such provisions, and shall be protected in relying upon, the Officers'
Certificate (which the Issuer shall be obligated to file with the Trustee prior
to the execution of any such supplemental indenture) with respect thereto.
SECTION 14.7. Notice of Certain Events. In case:
(a) the Issuer shall declare a dividend (or any other distribution)
payable to the holders of Common Stock (other than cash dividends);
(b) the Issuer shall authorize the granting to the holders of Common Stock
of rights, warrants or options to subscribe for or purchase any shares of stock
of any class or of any other rights;
(c) the Issuer shall authorize any reclassification or change of the
Common Stock (including a subdivision or combination of its outstanding shares
of Common Stock), or any consolidation or merger to which the Issuer is a party
and for which approval by any stockholders of the Issuer is required, or the
sale or conveyance of all or substantially all the property or business of the
Issuer;
(d) there shall be proposed any voluntary or involuntary dissolution,
liquidation or winding-up of the Issuer; or
(e) the Issuer or any of its Subsidiaries shall
complete an Offer;
then, the Issuer shall cause to be filed at the office or agency maintained as
provided in Section 3.2 hereof, and shall cause to be mailed to each Holder of
Securities, at such Holder's address as it shall appear on the registry books of
the Issuer, at least 20 days before the date hereinafter specified (or the
earlier of the dates hereinafter specified, in the event that more than one date
is specified), a notice stating the date on which (1) a record is expected to be
taken for the purpose of such dividend, distribution, rights, warrants or
options or Offer, or if a record is not to be taken, the date as of which the
holders of Common Stock of record to be entitled to such dividend, distribution,
rights, warrants or options or to participate in such Offer are to be
determined, or (2) such reclassification, change, consolidation, merger, sale,
conveyance, dissolution, liquidation or winding-up is expected to become
effective and the date, if any is to be fixed, as of which it is expected that
holders of Common Stock of record shall be entitled to exchange their shares of
Common Stock for securities or other property deliverable upon such
reclassification, change, consolidation, merger, sale, conveyance, dissolution,
liquidation or winding-up.
SECTION 14.8. Taxes on Conversion. The Issuer will pay any and all
documentary, stamp or similar taxes payable to the United States of America or
any political subdivision or taxing authority thereof or therein in respect of
the issue or delivery of shares of Common Stock on conversion of Securities
pursuant thereto; provided, however, that the Issuer shall not be required to
pay any tax which may be payable in respect of any transfer involved in the
issue or delivery of shares of Common Stock in a name other than that of the
Holder of the Securities to be converted and no such issue or delivery shall be
made unless and until the person requesting such issue or delivery has paid to
the Issuer the amount of any such tax or has established, to the satisfaction of
the Issuer, that such tax has been paid. The Issuer extends no protection with
respect to any other taxes imposed in connection with conversion of Securities.
SECTION 14.9. Issuer to Provide Stock. The Issuer shall reserve, free
from preemptive rights, out of its authorized but unissued shares, sufficient
shares to provide for the conversion of the Securities from time to time as such
Securities are presented for conversion, provided, that nothing contained herein
shall be construed to preclude the Issuer from satisfying its obligations in
respect of the conversion of Securities by delivery of repurchased shares of
Common Stock which are held in the treasury of the Issuer.
If any shares of Common Stock to be reserved for the purpose of conversion
of Securities hereunder require registration with or approval of any
governmental authority under any Federal or state law before such shares may be
validly issued or delivered upon conversion, then the Issuer covenants that it
will in good faith and as expeditiously as possible use its best efforts to
secure such registration or approval, as the case may be, provided, however,
that nothing in this Section 14.9 shall be deemed to limit in any way the
obligations of the Issuer provided in this Article Fourteen.
Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value, if any, of the Common Stock, the
Issuer will take all corporate action which may, in the Opinion of Counsel, be
necessary in order that the Issuer may validly and legally issue fully paid and
non-assessable shares of Common Stock at such adjusted Conversion Price.
The Issuer covenants that all shares of Common Stock which may be issued
upon conversion of Securities will upon issue be fully paid and non-assessable
by the Issuer and free of preemptive rights.
SECTION 14.10. Disclaimer of Responsibility for Certain Matters.
Neither the Trustee nor any agent of the Trustee shall at any time be under any
duty or responsibility to any Holder of Securities to determine whether any
facts exist which may require any adjustment of the Conversion Price, or with
respect to the Officers' Certificate referred to in Section 14.5 hereof, or with
respect to the nature or extent of any such adjustment when made, or with
respect to the method employed, or herein or in any supplemental indenture
provided to be employed, in making the same. Neither the Trustee nor any agent
of the Trustee shall be accountable with respect to the validity or value (or
the kind or amount) of any shares of Common Stock, or of any securities or
property (including cash), which may at any time be issued or delivered upon the
conversion of any Security; and neither the Trustee nor any conversion agent
makes any representation with respect thereto. Neither the Trustee nor any agent
of the Trustee shall be responsible for any failure of the Issuer to issue,
register the transfer of or deliver any shares of Common Stock or stock
certificates or other securities or property (including cash) upon the surrender
of any Security for the purpose of conversion or, subject to Article Fourteen
hereof, to comply with any of the covenants of the Issuer contained in this
Article Fourteen.
SECTION 14.11. Return of Funds Deposited for Redemption of Converted
Securities. Any funds which at any time shall have been deposited by the Issuer
or on its behalf with the Trustee or any other paying agent for the purpose of
paying the principal of and interest on any of the Securities and which shall
not be required for such purposes because of the conversion of such Securities,
as provided in this Article Fourteen, shall after such conversion be repaid to
the Issuer by the Trustee or such other paying agent."
(k) The following Article Fifteen, captioned "ARTICLE FIFTEEN RIGHT TO
REQUIRE REPURCHASE UPON A CHANGE OF CONTROL", is hereby added to the Indenture
immediately following Article Fourteen thereof:
"SECTION 15.1. Repurchase of Securities at Option of the Holder Upon
a Change of Control. In the event that a Change of Control occurs, the Issuer
shall be required to commence an irrevocable and unconditional offer to purchase
all outstanding Securities (a "Repurchase Offer"), and each Holder shall have
the right, at such Holder's option, subject to the terms and conditions of this
Indenture, to require the Issuer to repurchase all or any part of such Holder's
Securities (provided, that the principal amount of such Securities must be
$1,000 or an integral multiple thereof) on the date (the "Repurchase Date") that
is no later than 45 Business Days after the occurrence of such Change of
Control, at a cash price (the "Repurchase Price") equal to 100% of the principal
amount thereof, together with accrued and unpaid interest to (but excluding) the
Repurchase Date.
The Issuer shall comply with the following procedures set forth in this
Section 15.1 with respect to any such Repurchase Offer:
(a) the Repurchase Offer shall commence within 25 Business Days following
a Change of Control;
(b) the Repurchase Offer shall remain open for 20 Business Days following
its commencement (the "Repurchase Offer Period"). If required by applicable law,
the Repurchase Date and the Repurchase Offer Period may be extended as so
required; however, if so extended, it shall nevertheless constitute an Event of
Default if the Repurchase Date does not occur within 60 Business Days of the
Change of Control;
(c) upon the expiration of a Repurchase Offer, the Issuer shall purchase
all Securities tendered in response to the Repurchase Offer;
(d) if the Repurchase Date is on or after an interest payment record date
and on or before the related Interest Payment Date, any accrued interest will be
paid to the Person in whose name a Security is registered at the close of
business on such record date, and no additional interest will be payable to
Holders who tender Securities pursuant to the Repurchase Offer;
(e) the Issuer shall provide the Trustee with notice of the Repurchase
Offer at least 5 Business Days before the commencement of any Repurchase Offer;
and
(f) on or before the commencement of any Repurchase Offer, the Issuer or
the Trustee (upon the request and at the expense of the Issuer) shall send, by
first-class mail, a notice to each of the Holders, which (to the extent
consistent with this Indenture) shall govern the terms of the Repurchase Offer
and shall state:
(i) that the Repurchase Offer is being made pursuant to such notice
and this Section 15.1 and that all Securities, or portions thereof,
tendered will be accepted for payment;
(ii) the Repurchase Price (including the amount of accrued and unpaid
interest, if any), the Repurchase Date and the Repurchase Put Date (as
defined in subsection (v) below);
(iii) that any Security, or portion thereof, not tendered or accepted
for payment will continue to accrue interest, if any;
(iv) that, unless the Issuer defaults in depositing Cash with the
Trustee in accordance with the last paragraph of this clause (b) or such
payment is prevented pursuant to Article Thirteen, any Security, or
portion thereof, accepted for payment pursuant to the Repurchase Offer
shall cease to accrue interest after the Repurchase Date;
(v) that Holders electing to have a Security, or portion thereof,
purchased pursuant to a Repurchase Offer will be required to surrender the
Security, with the form entitled "Option of Holder to Elect Purchase" on
the reverse of the Security completed, to the paying agent (which may not
for purposes of this Section 15.1, notwithstanding anything in this
Indenture to the contrary, be the Issuer or any Affiliate of the Issuer)
at the address specified in the notice prior to the close of business on
the earlier of (a) the third Business Day prior to the Repurchase Date and
(b) the third Business Day following the expiration of the Repurchase
Offer (such earlier date being the "Repurchase Put Date");
(vi) that Holders will be entitled to withdraw their election, in
whole or in part, if the paying agent (which may not for purposes of this
Section 15.1, notwithstanding anything in this Indenture to the contrary,
be the Issuer or any Affiliate of the Issuer) receives, up to the close of
business on the Repurchase Put Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Securities the Holder is withdrawing and a statement that
such Holder is withdrawing his election to have such principal amount of
Securities purchased; and
(vii) a brief description of the events resulting in such Change of
Control.
Any such Repurchase Offer shall comply with all applicable provisions of
Federal and state laws, including those regulating tender offers, if applicable,
and any provisions of this Indenture which conflict with such laws shall be
deemed to be superseded by the provisions of such laws.
On or before the Repurchase Date, the Issuer shall (i) accept for payment
Securities or portions thereof properly tendered pursuant to the Repurchase
Offer on or before the Repurchase Put Date, (ii) deposit with the paying agent
Cash sufficient to pay the Repurchase Price (together with accrued and unpaid
interest, if any) of all Securities or portions thereof so tendered and (iii)
deliver to the Trustee Securities so accepted together with an Officers'
Certificate listing the Securities or portions thereof being purchased by the
Issuer. The paying agent shall promptly mail to Holders of Securities so
accepted payment in an amount equal to the Repurchase Price (together with
accrued and unpaid interest, if any), and the Trustee shall promptly
authenticate and mail or deliver to such Holders a new Security or Securities
equal in principal amount to any unpurchased portion of the Securities
surrendered. Any Securities not so accepted shall be promptly mailed or
delivered by the Issuer to the Holder thereof. The Issuer will publicly announce
the results of the Repurchase Offer on or as soon as practicable after the
Repurchase Date."
ARTICLE THREE
MISCELLANEOUS
3.01. The Trustee. The recitals contained herein shall be taken as the
statements of the Issuer, and the Trustee shall not assume responsibility for,
or be liable in respect of, the correctness thereof. The Trustee makes no
representation as to, and shall not be liable or responsible for, the validity
or sufficiency of this Supplemental Indenture.
3.02. Limited Effect. Except as amended or modified hereby in respect of
the Notes, all of the provisions, covenants, terms and conditions of the
Indenture are ratified and confirmed, and shall remain in full force. In case of
a conflict between any provision of the Indenture and any provision hereof, the
provision of this Supplemental Indenture shall govern.
3.03. Counterparts. This Supplemental Indenture may be executed by one or
more parties hereto on any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
3.04. GOVERNING LAW. THIS SUPPLEMENTAL INDENTURE SHALL BE DEEMED TO BE A
CONTRACT UNDER THE LAWS OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF SUCH STATE, WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed, all as of the date first above written.
EMCOR GROUP, INC. as Issuer
By:_____________________________
Title:
STATE STREET BANK AND TRUST COMPANY, as Trustee
By:_____________________________
Title:
<PAGE>
EXHIBIT A
[FORM OF NOTE]
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
DEFINITIVE FORM, THIS REGISTERED GLOBAL SECURITY MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A
NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR
DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.
EMCOR GROUP, INC.
5 3/4% Convertible Subordinated Note due 2005
No. [ ]
CUSIP No. 29084QAC4
Issue Date:
EMCOR Group, Inc., a Delaware Corporation (the "Issuer"), promises to
pay to [____________] or its registered assigns, the principal amount of
[______________________]on [_________, _____]. This Note shall not bear interest
except as specified on the other side of this Note. Additional provisions of
this Note are set forth on the other side of this Note.
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed under its facsimile corporate seal.
EMCOR GROUP, INC., as Issuer
By:___________________________
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated herein
referred to in the within mentioned Indenture.
Dated: [_______, 1998] STATE STREET BANK AND TRUST
COMPANY, as Trustee
By:___________________________
Authorized Signatory
<PAGE>
5 3/4% Convertible Subordinated Note due 2005
1. Interest. Commencing [_____], 1998, interest on this Note will accrue at
the rate of 5 3/4% per annum and will be payable in cash semiannually on each
[_______] and [________], commencing [______,__]1998, to Holders of record on
the close of business on the immediately preceding [________] and [________];
provided that if the principal amount hereof or any portion of such principal
amount is not paid when due, then in each such case the overdue amount shall
bear interest at the rate of 5 3/4% per annum, compounded semiannually (to the
extent that the payment of such interest shall be legally enforceable), which
interest shall accrue from the date such overdue amount was due to the date
payment of such amount, including interest thereon, has been made or duly
provided for. All such interest shall be payable on demand.
2. Method of Payment. Subject to the terms and conditions of the Indenture,
payments in respect of the Notes shall be made at the office or agency of the
Issuer maintained for that purpose in the City and State of New York. The Issuer
will pay cash amounts in money of the United States that at the time of payment
is legal tender for payment of public and private debts.
3. Paying Agent and Registrar. Initially, State Street Bank and Trust
Company (the "Trustee"), will act as paying agent and registrar. The Issuer may
appoint and change any paying agent or registrar without notice, other than
notice to the Trustee. The Issuer or any of its Subsidiaries or any of their
Affiliates may act as paying agent or registrar.
4. Indenture. The Issuer issued the Notes under an Indenture, dated as of
March 18, 1998, between the Issuer and the Trustee, as supplemented by a First
Supplemental Indenture, dated as of March 18, 1998 (collectively, the
"Indenture"). The terms of the Notes include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act of 1939"). Capitalized terms used
herein and not defined herein have the meanings ascribed thereto in the
Indenture. The Notes are subject to all such terms, and Holders are referred to
the Indenture and the Trust Indenture Act of 1939 for a statement of those
terms. The terms of the Indentures shall govern any inconsistency between the
terms of the Indenture and the Notes.
The Notes are general unsecured obligations of the Issuer, limited to $115
million aggregate principal amount.
5. Redemption at the Option of the Issuer. No sinking fund is provided for
the Notes. The Notes will not be subject to redemption prior to April 4, 2001.
On or after April 4, 2001, the Notes will be subject to redemption at the option
of the Issuer, in whole or in part, in accordance with the provisions of the
Indenture, at any time and from time to time, upon not less than 30 nor more
than 60 days' notice, at the Redemption Price (expressed as a percentage of
principal amount) set forth below with respect to the indicated Redemption Date,
in each case, plus any accrued but unpaid interest to (but excluding) the
Redemption Date:
If redeemed during
the 12-month period
beginning: Redemption Price
April 1, 2001 103.286%
April 1, 2002 102.464%
April 1, 2003 101.643%
April 1, 2004 100.821%
6. Notice of Redemption. Notice of redemption will be sent by first class
mail at least 30 days but not more than 60 days before the Redemption Date to
each Holder of Notes to be redeemed at the Holder's registered address, in
accordance with the provisions of the Indenture. If money sufficient to pay the
Redemption Price of all Notes to be redeemed on the Redemption Date, together
with accrued interest thereon to the Redemption Date, is deposited with the
Trustee or any paying agent prior to or on the Redemption Date, on and after
such date interest shall cease to accrue on such Notes or portions thereof.
7. Denominations; Transfer; Exchange. The Notes are in registered form,
without coupons, in denominations of $1,000 of principal amount and integral
multiples of $1,000. A Holder may register the transfer of or exchange Notes in
accordance with the Indenture. The registrar may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and to pay
any taxes and fees required by law or permitted by the Indenture. The Issuer
shall not be required to exchange or register a transfer of (a) any Notes for a
period of 15 days next preceding the first mailing or publication of notice of
redemption of Notes to be redeemed, (b) any Notes selected, called or being
called for redemption, in whole or in part, except, in the case of any Note to
be redeemed in part, the portion thereof not so to be redeemed or (c) any Note
if the Holder thereof has exercised its right, if any, to require the Issuer to
repurchase such Note in whole or in part, except the portion of such Note not
required to be repurchased.
8. Persons Deemed Owners. The registered Holder of this Note may be treated
as the owner of this Note for all purposes.
9. Unclaimed Money. The Trustee and each paying agent shall each return to
the Issuer upon written request any money held by them for the payment of any
amount with respect to the Notes that remains unclaimed for two years. After
return to the Issuer, Holders entitled to the money must look to the Issuer for
payment as general creditors unless an applicable abandoned property law
designates another person.
10. Amendment; Waiver. Subject to certain exceptions set forth in the
Indenture, (i) the Indenture or the Notes may be amended with the written
consent of the Holders of at least a majority in aggregate principal amount of
the Notes at the time outstanding and (ii) certain defaults or noncompliance
with certain provisions may be waived with the written consent of the Holders of
a majority in aggregate principal amount of the Notes at the time outstanding.
Subject to certain exceptions set forth in the Indenture, without the consent of
any Holder, the Issuer and the Trustee may amend the Indenture or the Notes to
cure any ambiguity, defect or inconsistency, or to comply with Article Nine of
the Indenture, or to make any change that does not adversely affect the rights
of any Holder of Notes.
11. Conversion Rights. Subject to the provisions of the Indenture, the
Holders have the right to convert the principal amount of the Notes into fully
paid and nonassessable shares of Common Stock of the Issuer at the initial
Conversion Price per share of Common Stock of $___ (or ______ shares per $1,000
principal amount of Notes), or at the adjusted Conversion Price then in effect,
if adjustment has been made as provided in the Indenture, upon surrender of the
Notes to the Issuer, together with a fully executed notice in substantially the
form attached hereto and, if required by the Indenture, an amount equal to
accrued interest payable on such Notes.
12. Subordination. Payment of principal, premium, if any, and interest on
the Notes is subordinated, in the manner and to the extent set forth in the
Indenture, to the prior payment in full of all Senior Indebtedness.
13. Repurchase at Option of Holder Upon a Change of Control. If there is a
Change of Control, the Issuer shall be required to offer to purchase on the
Repurchase Date all outstanding Notes at a purchase price equal to 100% of the
principal amount thereof, plus accrued and unpaid interest, if any, to, but
excluding, the Repurchase Date. Holders of Notes will receive a Repurchase Offer
from the Issuer prior to any related Repurchase Date and may elect to have such
Notes purchased by completing the form entitled "Option of Holder to Elect
Purchase" appearing below.
14. Successors. When a successor assumes all the obligations of its
predecessor under the Notes and the Indenture, the predecessor will be released
from those obligations (except with respect to any obligations that arise from
or as a result of such transaction).
15. Defaults and Remedies. If an Event of Default occurs and is continuing
(other than an Event of Default relating to certain events of bankruptcy,
insolvency or reorganization), then in every such case, unless the principal of
all of the Notes shall have already become due and payable, either the Trustee
or the Holders of not less than 25% in aggregate principal amount of the Notes
then outstanding, by notice in writing to the Issuer (and to the Trustee, if
given by the Holders), may declare the principal of all of the Notes 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
Notes then outstanding, by notice in writing to the Issuer and the Trustee, may
rescind and annul such declaration and its consequences if all defaults under
such Indenture are cured or waived.
No Holder of Notes 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 the Notes 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, the right of any
Holder of any Note to receive payment of the principal of, premium, if any, or
interest, if any, on such Note, 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. The Holders of a majority in
aggregate principal amount of the Notes 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 Notes, 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.
The Issuer is required to furnish to the Trustee annually a certificate as
to compliance by the Issuer with all conditions and covenants under the
Indenture.
16. Trustee Dealings with the Issuer. Subject to certain limitations
imposed by the Trust Indenture Act of 1939, the Trustee under the Indenture, in
its individual or any other capacity, may become the owner or pledgee of Notes
and may otherwise deal with and collect obligations owed to it by the Issuer or
its Affiliates and may otherwise deal with the Issuer or its Affiliates with the
same rights it would have if it were not Trustee.
17. No Recourse Against Others. A director, officer, employee or
stockholder, as such, of the Issuer shall not have any liability for any
obligations of the Issuer under the Notes or the Indenture or for any claim
based on, in respect of or by reason of such obligations or their creation. By
accepting a Note, each Holder waives and releases all such liability. The waiver
and release are part of the consideration for the issue of the Notes.
18. Authentication. This Note shall not be valid until an authorized
signatory of the Trustee manually signs the Trustee's Certificate of
Authentication on the other side of this Note.
19. Abbreviations. Customary abbreviations may be used in the name of a
Holder of Notes or an assignee, such as TEN COM (= tenants in common), TEN ENT
(= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= custodian), and U/G/M/A (=
Uniform Gift to Minors Act).
20. GOVERNING LAW. THIS NOTE AND THE INDENTURE SHALL BE DEEMED TO BE A
CONTRACT UNDER THE LAWS OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF SUCH STATE, WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
The Issuer will furnish to any Holder of Notes upon written request and
without charge a copy of the Indenture. Requests may be made to: EMCOR Group,
Inc., 101 Merritt Seven Corporate Park, Norwalk, Connecticut 06851, Attention of
Corporate Secretary.
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the
Issuer pursuant to Article Fifteen of the Indenture, check
the box: /__/
If you want to elect to have only part of this Note purchased by the
Issuer pursuant to Article Fifteen of the Indenture, state the amount you want
to be purchased: $
Date:______________ Signature:__________________________________
(Sign exactly as your name appears
on the other side of this Note)
<PAGE>
FORM OF ASSIGNMENT
I or we assign this Note to
(Print or type name, address and zip code of assignee)
Please insert Social Security or other identifying
number of assignee
and irrevocably appoint ________ agent to transfer this Note on the books of the
Issuer. The agent may substitute another to act for him.
Date: Signed:
- ------------------- ------------------------------------------------------
(Sign exactly as name appears
on the other side of this Note)
Signature Guarantee.*
- ----------------------------------
*Participant in a recognized Signature Guarantee Medallion Program (or other
signature guaranty acceptable to the Trustee).
<PAGE>
FORM OF CONVERSION NOTICE
To: EMCOR Group, Inc.
$100,000,000
__% Convertible Subordinated Notes due 2005
The undersigned owner of this Note hereby: (i) irrevocably exercises the
option to convert this Note, or the portion hereof below designated, for shares
of Common Stock of EMCOR Group, Inc. in accordance with the terms of this
Indenture referred to in this Note and (ii) directs that such shares of Common
Stock deliverable upon the conversion, together with any check in payment for
fractional shares and any Note(s) representing any unconverted principal amount
hereof, be issued and delivered to the registered holder hereof unless a
different name has been indicated below. If shares are to be delivered
registered in the name of a person other than the undersigned, the undersigned
will pay all transfer taxes payable with respect thereto. Any amount required to
be paid by the undersigned on account of interest accompanies this Note.
Dated _____________
Signature
Fill in for registration of shares if to be delivered, and of Notes if to
be issued, otherwise than to and in the name of the registered holder.
Social Security or other
Taxpayer Identifying Number
(Name)
(Street Address)
(City, State and Zip Code)
(Please print name and address)
Principal amount to be
converted: (if less than all)
$
Signature Guarantee.*
- ---------------------
*Participant in a recognized Signature Guarantee Medallion Program (or other
signature guaranty acceptable to the Trustee).
Exhibit 10(a) EXECUTION COPY
EMPLOYMENT AGREEMENT
--------------------
THIS AGREEMENT, made as of this 1st day of January, 1998 by and
between EMCOR GROUP, INC. (the "Company") and FRANK T. MACINNIS
("Executive").
RECITALS
--------
In order to induce Executive to continue to serve as Chief Executive
Officer of the Company and as Chairman of the Board of Directors of the Company
("the Board"), the Company desires to provide Executive with compensation and
other benefits under the conditions set forth in this Agreement.
Executive is willing to accept such continuation of employment and
perform services for the Company and its subsidiaries, on the terms and
conditions hereinafter set forth.
It is therefore hereby agreed by and between the parties as follows:
<PAGE>
1. Employment.
1.1 Subject to the terms and conditions of this Agreement, the
Company agrees to continue to employ Executive during the Period of Employment
(as hereinafter defined) as the Chief Executive Officer of the Company. In his
capacity as Chief Executive Officer of the Company, Executive shall have the
customary powers, responsibilities and authorities of chief executive officers
of similar corporations of the size, type and nature of the Company as it may
exist from time to time, including, but not limited to, authority over all
personnel decisions and business policies and practices, subject to the
direction of the Board of Directors of the Company (the "Board").
1.2 The Company shall, during the Period of Employment (as
hereinafter defined,), make its best efforts to ensure the retention of
Executive as Chairman of the Board.
1.3 Subject to the terms and conditions hereof, Executive hereby
agrees to continue employment as Chief Executive Officer of the Company and
shall devote his full working time and efforts, to the best of his ability,
experience and talent, to the performance of the services, duties and
responsibilities in connection therewith and agrees to continue to serve, if
elected, as Chairman of the Board of the Company. Except upon the prior written
consent of the Board, Executive will not during the Period of Employment (as
hereinafter defined) (i) accept any other employment or (ii) engage, directly or
indirectly, in any other business activity (whether or not pursued for pecuniary
advantage), whether or not it may be competitive with, or whether or not it
might place him in a competing position to that of, the Company or any
subsidiary thereof. Nothing in this Agreement shall preclude the Executive from
(i) engaging, consistent with his duties and responsibilities hereunder, in
charitable community affairs, (ii) managing his personal investments, (iii)
continuing to serve on the boards of directors on which he presently serves (to
the extent such service is not precluded by federal or state law or by conflict
of interest by reason of his position with the Company), or (iv) serving,
subject to approval of the Board, as a member of boards of directors of other
companies, provided, that such activities do not interfere with the performance
of Executive's duties hereunder. Notwithstanding the foregoing, it is expressly
acknowledged that Executive's existing ownership interest in, and service as a
director and/or officer of, ComNet Communications, Inc. have been disclosed to
the Company and that the continuing ownership thereof and any reasonable actions
associated therewith, including without limitation, continuing as a director
and/or officer thereof, shall be permitted under the terms of this Agreement and
shall in no event constitute a breach hereof.
2. Period of Employment. Executive's period of employment hereunder
shall commence on January 1, 1998 (the "Commencement Date") and shall continue
through the earlier of December 31, 2000 or the date of termination hereunder
(the "Period of Employment"); provided, however, that the Period of Employment
shall automatically be extended for successive one-year periods unless the
Company or Executive, at least six months prior to the end of such period,
provides written notice to the other party of intent not to extend the Period of
Employment.
3. Compensation.
3.1 Salary. The Company shall pay Executive a base salary ("Base
Salary") at the rate of $700,000 per annum for the Period of Employment. Base
Salary shall be payable in accordance with the ordinary payroll practices the
Company. Executive's rate of Base Salary shall be increased on the first day of
each calendar year occurring during the Period of Employment, beginning with
January 1, 1999, by the percentage increase for the prior year in the consumer
price index for the area in which the principal office of the Company is
located, as determined by the U.S. Department of Commerce, or the amount
specified by the Board, whichever is greater.
3.2 Bonus. In addition to his Base Salary, Executive shall be
entitled, while he remains employed hereunder, in respect of each calendar year,
to an annual bonus (the "Bonus") payable in cash and at such times as bonuses
are customarily paid to senior executives of the Company. For each calendar year
during the Period of Employment, the Compensation Committee of the Board (the
"Committee") shall establish, after consultation with Executive, a formula which
shall determine the amount of Executive's Bonus for the calendar year; provided
that Executive's target bonus shall be no less than $600,000 for each such year.
3.3 Supplemental Benefit Credits. Executive shall be fully vested in
all employee benefit plans of the Company with respect to which the amount of
any benefits payable thereunder is determined in whole or in part by years of
service with the Company.
3.4 Stock Options. (a) During each calendar year in the Period of
Employment, the Company shall recommend to the Compensation Committee of the
Board that Executive shall receive an option ("Option") to purchase not less
than 25,000 shares of common stock of the Company ("Shares") at fair market
value pursuant to the Company's then applicable stock option plan. Each such
Option shall be exercisable with respect to the Shares subject thereto on the
first anniversary of the date of grant.
(b) In addition, Executive was granted on November 21, 1997, an
Option to purchase 200,000 Shares at fair market value pursuant to the Company's
stock option plan. This Option shall have a ten-year term and shall vest in full
on November 21, 2006, provided that with respect to successive groups of 50,000
Shares, the Option shall, if earlier, vest when the fair market value of a Share
first equals or exceeds $25, $30, $35 and $40, respectively.
(c) In the event of Executive's termination of employment under
Section 6.1, each Option shall become immediately exercisable in full and shall
remain exercisable for the balance of its ten-year term.
4. Employee Benefits.
4.1 Employee Benefit Plans and Programs. The Company shall provide
Executive during the Period of Employment with coverage under any employee
benefit programs, plans and practices (commensurate with his position in the
Company) in accordance with the terms thereof, which the Company currently makes
available generally to its senior executive officers, or which the Company, with
Board approval, elects to make available generally to its senior executive
officers hereafter, including, but not limited to (a) retirement, pension and
profit-sharing; and (b) medical, dental, hospitalization, life insurance, short
and long-term disability, accidental death and dismemberment and travel accident
coverage; provided that Executive shall pay such portion of the premiums
therefor as is customarily paid by senior executives of the Company.
4.2 Vacation, Fringe and Other Benefits. Executive shall be entitled
to the number of vacation days customarily accorded senior executives of the
Company. In addition, during the Period of Employment, the Company shall pay
Executive $700 per month for leasing (plus maintenance and insurance) of an
automobile. The Company shall also reimburse Executive for (a) all initiation
fees and monthly dues for membership in a club suitable for entertaining clients
of the Company and (b) all legal expenses incurred by Executive in connection
with the negotiation and drafting of this Agreement. The Company shall bear the
cost of any increased tax liability of Executive caused by the provisions of
this Section 4.2.
5. Directors and Officers Liability. The Company shall keep in effect
during the Period of Employment, a policy of directors' and officers' liability
insurance for officers and directors of the Company to the extent reasonably
available, at such reasonable levels of coverage as are agreed to by Executive
and the Board from time to time.
6. Termination of Employment.
6.1 Termination Not For Cause or For Good Reason. (a) The Company may
terminate Executive's employment at any time, and Executive may terminate his
employment at any time. If Executive's employment is terminated by the Company
other than for Cause (as hereinafter defined), or Executive terminates his
employment for Good Reason (as hereinafter defined), Executive shall be entitled
to receive a lump sum cash payment (but not in substitution for compensation
already earned) in an amount equal to the sum of:
(i) the greater of (A) Executive's Base Salary at the highest annual
rate in effect during the Period of Employment, for the period from the date of
termination through December 31, 2000 or (B) two times Executive's Base Salary
at its then current annual rate;
(ii) the greater of (A) Executive's target Bonus pursuant to Section
3.2 times the number full or partial calendar years remaining from the date of
termination through December 31, 2000 or (B) two times Executive's target Bonus.
(iii) an amount equal to Executive's Bonus, for any calendar year
ending before such termination occurs, which would have been payable had
Executive remained in employment until the date such Bonus would otherwise have
been paid;
(iv)an amount equal to Executive's target Bonus for the calendar year
in which the termination of employment occurs, multiplied by a fraction, the
numerator of which is the number of days in such calendar year that Executive
was an employee of the Company, and the denominator of which is 365; and
(v)in the event of a termination of Executive's employment by the
Company other than for Cause or by Executive for Good Reason following a Change
in Control, the factor of two in clause (B) of subsections 6.1(a)(i) and (ii)
shall be increased to three.
(b) In addition to the amount described in subsections 6.1(a),
Executive shall be entitled to receive:
(i) until the earlier of December 31, 2000 or 18 months from the date
of termination, Executive (and, to the extent applicable, Executive's
dependents) shall continue to be covered, at the Company's expense, under the
Company's medical, dental and hospitalization coverage plans, and until the
earlier of December 31, 2000 or 6 months from the date of termination, Executive
shall continue to be covered, at the Company's expense, under the Company's
group life, short and long-term disability, accidental death and dismemberment
and travel accident coverage plans described in Section 4.1 hereof or the
Company will provide for equivalent coverage; and
(ii) all payments to which Executive has vested rights as of the
expiration of the Period of Employment under employee benefit, disability,
insurance and similar plans which provide for payments beyond the Period of
Employment.
(c) For purposes of this Agreement, "Good Reason" shall mean any of
the following (without Executive's express prior written consent):
(i) The assignment to Executive by the Company of duties
inconsistent with Executive's positions, duties, responsibilities, titles or
office as set forth in Section 1 hereof, or any reduction by the Company of his
duties or responsibilities or any removal of Executive from the position of
Chairman and Chief Executive Officer or any failure to elect or re-elect
Executive as Chairman of the Board, except in connection with the termination of
Executive's employment (A) upon the termination of the Period of Employment on
December 31, 2000, (B) upon the termination of a succeeding one-year Period of
Employment (as provided for under Section 2 hereof), (C) for Cause, (D) as a
result of Executive's Permanent Disability (as hereinafter defined) or death or
(E) by Executive other than for Good Reason;
(ii) A reduction by the Company in Executive's Base Salary, except as
provided herein, as in effect at the commencement of employment hereunder or as
the same may be increased from time to time during the Period of Employment;
(iii) The failure by the Company to obtain the specific assumption of
this Agreement by any successor or assign of the Company or any person acquiring
substantially all of the Company's assets;
(iv) Failure by the Company to perform in any material respect its
obligations under this Agreement, where such failure shall not have been
remedied within 30 days after Executive shall have notified the Company in
writing thereof;
(v) Any material reduction in Executive's compensation or benefits
following a Change in Control or Executive's principal business location is
changed to a location more than 30 miles from Executive's principal business
location (other than a relocation to New York, New York) immediately prior to a
Change in Control; or
(vi) The Company shall cease to keep in effect the policy of
directors' and officers' liability insurance for Executive described in Section
5;
(d) If all or any portion of the payments or benefits provided under
Section 6.1, either alone or together with other payments and benefits which
Executive receives or is then entitled to receive from the Company, would
constitute a "parachute payment" within the meaning Section 28OG of the Internal
Revenue Code of 1986, as amended ("Code"), Executive shall be entitled to such
additional payments as may be necessary to ensure that the net after tax benefit
of all payments under this Section 6.1, including the payment provided for in
this subsection 6.1(c) shall be equal to the net after tax benefit of Executive
as if no excise tax had been imposed under Section 4999 of the Code.
The foregoing calculations shall be made, at the Company's expense,
by the Company and Executive. If no agreement on the calculations is reached,
Executive and the Company shall agree to the selection of an accounting firm to
make the calculations. If no agreement can be reached regarding the selection of
an accounting firm, the Company shall select a nationally recognized accounting
firm which has no current or recent business relationship with the Company. The
determination of any such firm selected shall be conclusive and binding on all
parties.
(e) For purposes of this Agreement, a "Change of Control" shall be
deemed to have occurred when:
(i) any person or persons acting in concert (excluding Company
benefit plans) becomes the beneficial owner of securities of the Company
having at least 25% of the voting power of the Company's then outstanding
securities (unless the event causing the 25% threshold to be crossed is an
acquisition of voting common securities directly from the Company, other
than upon the conversion of convertible debt securities or other
securities and/or the exercise of options or warrants); or
(ii) the shareholders of the Company shall approve any merger or
other business combination of the Company, sale or lease of the Company's
assets or combination of the foregoing transactions (the "Transactions")
other than a Transaction immediately following which the shareholders of
the Company and any trustee or fiduciary of any Company employee benefit
plan immediately prior to the Transaction own at least 65% of the voting
power, directly or indirectly, of (A) the surviving corporation in any
such merger or other business combination; (B) the purchaser or lessee of
the Company's assets; or (C) both the surviving corporation and the
purchaser or lessee in the event of any combination of Transactions; or
(iii) within any 24 month period, the persons who were directors
immediately before the beginning of such period (the "Incumbent
Directors") shall cease (for any reason other than death) to constitute at
least a majority of the Board or the board of directors of a successor to
the Company. For this purpose, any director who was not a director at the
beginning of such period shall be deemed to be an Incumbent Director if
such director was elected to the Board by, or on the recommendation of or
with the approval of, at least two-thirds of the directors who then
qualified as Incumbent Directors (so long as such director was not
nominated by a person who has expressed an intent to effect a Change of
Control or engage in a proxy or other control contest).
(f) All cash payments under this Section 6.1 shall be made by the
Company within 30 calendar days following the event giving rise to such
payments.
6.2 Permanent Disability. If as a result of the Executive's
incapacity due to physical or mental illness, the Executive shall have been
absent from his duties with the Company on a full-time basis for six consecutive
months (a "Permanent Disability") during his Period of Employment, the Company
or Executive may terminate his employment on written notice thereof, the Period
of Employment shall terminate on the giving of such notice, and the compensation
to which Executive is entitled pursuant to Section 3.1 shall be paid through the
last day of the month in which the notice is given. In addition, Executive shall
be entitled to receive:
(a) all unpaid amounts, as of the date of such termination, in
respect of any Bonus for any calendar year ending before the calendar year in
which such termination occurs, which would have been payable had Executive
remained in employment until the date such Bonus would otherwise have been paid,
plus Executive's target Bonus for the calendar year in which his employment
terminates, multiplied by a fraction, the numerator of which is the number of
days in such calendar year the Executive was an employee of the Company, and the
denominator of which is 365;
(b) until the earlier of December 31, 2000 or 24 months from the date
of termination for Permanent Disability, Executive (and, to the extent
applicable, Executive's dependents) shall continue to be covered under Company's
medical, dental, hospitalization, group life, short and long-term disability,
accidental death and dismemberment and travel accident coverage plans described
in Section 4.1 or the Company will provide for equivalent coverage; provided
that if Executive is provided with comparable coverage by a successor employer
any such coverage by the Company shall cease; and
(c) all amounts payable under the Company's disability plans.
6.3 Death. In the event of Executive's death while employed
hereunder, the Period of Employment shall thereupon automatically terminate and
the Executive's estate or designated beneficiaries shall receive (i) payments of
Base Salary for a period of three months after the date of death; (ii) all
unpaid amounts, as of the date of such termination, in respect of any Bonus for
any calendar year ending before the calendar year in which such termination
occurs, which would have been payable had Executive remained in employment until
the date such Bonus would otherwise have been paid, plus Executive's target
Bonus for the calendar year in which his employment terminates, multiplied by a
fraction, the numerator of which is the number of days in such calendar year the
Executive was an employee of the Company, and the denominator of which is 365;
and (iii) any death benefits provided under the employee benefit programs, in
accordance with their terms.
6.4 Voluntary Resignation; Discharge for Cause. If Executive resigns
voluntarily, other than for Good Reason or Permanent Disability, or the Company
terminates the employment of Executive at any time for Cause, the Company's
obligations under this Agreement to make any further payments to Executive shall
thereupon, to the extent permitted by law, cease and terminate except with
respect to all unpaid amounts, as of the date of such termination, in respect of
any Bonus for any calendar year ending before such termination occurs, which
would have been payable had Executive remained in employment until the date such
bonus would otherwise have been paid. In addition, Executive shall remain
entitled to all vested amounts and benefits under the Company's employee benefit
programs, plans and practices, including, without limitation, the supplemental
benefit credits provided for under Section 3.3 hereof. The term "Cause" shall be
limited to (a) action by Executive involving willful malfeasance in connection
with his employment which results in material harm to the Company, (b) material
and continuing breach by Executive of the terms of this Agreement which breach
is not cured within 60 days after Executive receives written notice from the
Company of any such breach or (c) Executive being convicted of a felony.
Termination of Executive for Cause pursuant to this Section 6.4 shall be
communicated by a Notice of Termination given within six months after the Board
both (i) had knowledge of conduct or an event allegedly constituting Cause and
(ii) had reason to believe that such conduct or event could be grounds for
Cause. For purposes of this Agreement a "Notice of Termination" shall mean
delivery to Executive of a copy of a resolution duly adopted by the Board at a
meeting of the Board called and held for that purpose (after not less than 10
days' notice to Executive ("Preliminary Notice") and reasonable opportunity for
Executive, together with the Executive's counsel, to be heard before the Board
prior to such vote), finding that in the good faith opinion of the Board,
Executive was guilty of conduct set forth in the third sentence of this Section
6.4 and specifying the particulars thereof in detail. The Board shall no later
than 30 days after the receipt of the Preliminary Notice by Executive
communicate its findings to Executive. A failure by the Board to make its
finding of Cause or to communicate its conclusions within such 30-day period
shall be deemed to be a finding that Executive was not guilty of the conduct
described in the second sentence of this Section 6.4.
6.5 Termination Obligations. (a) Executive hereby acknowledges and
agrees that all personal property, including, without limitation, all books,
manuals, records, reports, notes, contracts, lists, and other documents, and
equipment furnished to or prepared by Executive in the course of or incident to
his employment, belong to the Company and shall be promptly returned to the
Company upon termination of the Period of Employment.
(b) Upon termination of the Period of Employment, the Executive shall
be deemed to have resigned from all offices and directorships then held with the
Company or any subsidiary or affiliate thereof.
7. Confidential Information. During and after the Period of
Employment, Executive shall not disclose to any person (other than an employee
or agent of the Company or any affiliate of the Company entitled to receive the
same) any confidential information relating to the business of the Company and
obtained by him while providing services to the Company, without the consent of
the Board, or until such information ceases to be confidential.
8. Non-Competition. In the event Executive's employment is terminated
by the Company for Cause or Executive terminates his employment with the Company
without Good Reason, Executive shall not, for a period ending on the earlier of
(i) 18 months from the date of such termination or (ii) December 31, 2000,
accept any other employment or engage, directly or indirectly, in any other
business activity which is competitive with that of the Company or any
subsidiary thereof; provided however, that Executive's ownership interest in,
and service as a director and/or officer of, ComNet Communications, Inc. shall
not be deemed to be competitive with the Company or any subsidary thereof.
9. Expenses. Executive is authorized to incur reasonable expenses in
carrying out his duties and responsibilities under this Agreement, including
expenses for travel and similar items related to such duties and
responsibilities. The Company will reimburse Executive for all such expenses
upon presentation by Executive from time to time of an itemized account of such
expenditures.
10. No Obligation to Mitigate Damages. Executive shall not be
required to mitigate damages or the amount of any payment provided for under
this Agreement by seeking (and no payment otherwise required hereunder shall be
reduced on account of) other employment or otherwise, nor will any payments
hereunder be subject to offset in respect of any claims which the Company may
have against Executive.
11. Notices. All notices or communications hereunder shall be in
writing, addressed as follows:
to Executive:
Frank T. MacInnis
7 Sturges Hollow
Westport, CT 06880
to Company:
Sheldon I. Cammaker, Esq.
Executive Vice President and General Counsel
Emcor Group, Inc.
101 Merritt Seven, 7th Floor
Norwalk, CT 06851
with a copy to:
Kenneth C. Edgar, Jr., Esq.
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, NY 10017
Any such notice or communication shall be delivered by hand or sent certified or
registered mail, return receipt requested, postage prepaid, addressed as above
(or to such other address as such party may designate in a notice duly delivered
as described above), and the actual date of delivery or mailing shall determine
the time at which notice was given.
12. Agreement to Perform Necessary Acts. Each party agrees to perform
any further acts and to execute and deliver any further documents that may be
reasonably necessary to carry out the provisions of this Agreement.
13. Separability; Legal Actions; Legal Fees. If any provision of this
Agreement shall be declared to be invalid or unenforceable, in whole or in part,
such invalidity or unenforceability shall not affect the remaining provisions
hereof, which shall remain in full force and effect. Any controversy or claim
arising out of or relating to this Agreement or the breach of this Agreement
that cannot be resolved by Executive and the Company, including any dispute as
to the calculation of Executive's benefits or any payments hereunder, shall be
submitted to arbitration in New York, New York in accordance with the laws of
the State of New York and the procedures of the American Arbitration
Association, except that if Executive institutes an action relating to this
Agreement, Executive may, at Executive's option, bring that action in any court
of competent jurisdiction. All expenses, including legal expenses incurred by
Executive, relating to any arbitration shall be paid by the Company. Judgment
may be entered on an arbitrator(s)' award in any court having jurisdiction.
14. Assignment. This contract shall be binding upon and inure to the
benefit of the heirs and representatives of Executive and the assigns and
successors of the Company, but neither this Agreement nor any rights hereunder
shall be assignable or otherwise subject to hypothecation by Executive (except
by will or by operation of the laws of intestate succession) or by the Company
(any such purported assignment by either shall be null and void), except that
the Company may assign this Agreement to any successor (whether by merger,
purchase or otherwise) to all or substantially all of the stock, assets or
business of the Company.
15. Amendment; Waiver. The Agreement may be amended at any time, but
only by mutual written agreement of the parties hereto. Any party may waive
compliance by the other party with any provision hereof, but only by an
instrument in writing executed by the party granting such waiver.
16. Entire Agreement. The terms of this Agreement are intended by the
parties to be the final expression of their agreement with respect to the
employment of Executive by the Company and may not be contradicted by evidence
of any prior or contemporaneous agreement. The parties further intend that this
Agreement shall constitute the complete and exclusive statement of its terms and
that no extrinsic evidence whatsoever may be introduced in any judicial,
administrative or other legal proceeding involving this Agreement.
17. Death or Incompetence. In the event of Executive's death or a
judicial determination of his incompetence, reference in this Agreement to
Executive shall be deemed, where appropriate, to refer to his estate or other
legal representative.
<PAGE>
18. Survivorship. The respective rights and obligations of the
parties hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations. The
provisions of this Section are in addition to the survivorship provisions of any
other section of this Agreement.
19. Governing Law. This Agreement shall be construed, interpreted,
and governed in accordance with the laws of the State of New York without
reference to rules relating to conflicts of law.
20. Withholdings. The Company shall be entitled
to withhold from payment any amount of withholding required
by law.
21. Counterparts. This Agreement may be executed
in two or more counterparts, each of which will be deemed an
original.
EMCOR GROUP, INC.
By:__________________________
By:__________________________
EXECUTIVE
-----------------------------
Frank T. MacInnis
Exhibit 10(b) EXECUTION COPY
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made as of this 1st day of January, 1998 by and
between EMCOR GROUP, INC. (the "Company") and JEFFREY LEVY ("Executive").
RECITALS
In order to induce Executive to serve as President and Chief
Operating Officer of the Company, the Company desires to provide Executive with
compensation and other benefits under the conditions set forth in this
Agreement.
Executive is willing to accept such employment and to perform
services for the Company and its subsidiaries, on the terms and conditions
hereinafter set forth.
It is therefore hereby agreed by and between the parties as follows:
1. Employment.
1.1 Subject to the terms and conditions of this Agreement, the
Company agrees to employ Executive during the Period of Employment (as
hereinafter defined) as the President and Chief Operating Officer of the
Company. In his capacity as President and Chief Operating Officer of the
Company, Executive shall have the customary powers, responsibilities and
authorities of presidents and chief operating officers of similar corporations
of the size, type and nature of the Company as it may exist from time to time,
subject to the direction of the Chairman of the Board of Directors (the "Board")
of the Company and the Chief Executive Officer of the Company (the "Chairman").
1.2 Subject to the terms and conditions hereof, Executive hereby
agrees to be employed as the President and Chief Operating Officer of the
Company and shall devote his full working time and efforts, to the best of his
ability, experience and talent, to the performance of the services, duties and
responsibilities in connection therewith. Except upon the prior written consent
of the Chairman, Executive will not during the Period of Employment (as
hereinafter defined) (i) accept any other employment or (ii) engage, directly or
indirectly, in any other business activity (whether or not pursued for pecuniary
advantage), whether or not it may be competitive with, or whether or not it
might place him in a competing position to that of, the Company or any
subsidiary thereof. Nothing in this Agreement shall preclude the Executive from
(i) engaging, consistent with his duties and responsibilities hereunder, in
charitable community affairs, (ii) managing his personal investments, (iii)
continuing to serve on the boards of directors on which he presently serves (to
the extent such service is not precluded by federal or state law or by conflict
of interest by reason of his position with the Company), or (iv) serving,
subject to approval of the Chairman, as a member of boards of directors of other
companies, provided, that such activities do not interfere with the performance
of Executive's duties hereunder.
2. Period of Employment. Executive's period of employment hereunder
shall commence on January 1, 1998 (the "Commencement Date") and shall continue
through the earlier of December 31, 2000 or the date of termination hereunder
(the "Period of Employment"); provided, however, that the Period of Employment
shall automatically be extended for successive one-year periods unless the
Company or Executive, at least six months prior to the end of such period,
provides written notice to the other party of intent not to extend the Period of
Employment. Notwithstanding anything in this Agreement to the contrary,
following a Change of Control (as defined in Section 6.1(e)) the Period of
Employment shall in no event be less than three years.
3. Compensation.
3.1 Salary. The Company shall pay Executive a base salary ("Base
Salary") at the rate of $450,000 per annum for the Period of Employment. Base
Salary shall be payable in accordance with the ordinary payroll practices of the
Company. Executive's rate of Base Salary shall be increased on the first day of
each calendar year occurring during the Period of Employment, beginning with
January 1, 1999, by the percentage increase for the prior year in the consumer
price index for the area in which the principal office of the Company is
located, as determined by the U.S. Department of Commerce, or the amount
specified by the Board, whichever is greater.
3.2 Bonus. In addition to his Base Salary, Executive shall be
entitled, while he remains employed hereunder, in respect of each calendar year,
to an annual bonus (the "Bonus") payable in cash and at such times as bonuses
are customarily paid to senior executives of the Company. For each calendar year
during the Period of Employment, the Compensation Committee of the Board (the
"Committee") shall establish, after consultation with Executive, a formula which
shall determine the amount of Executive's Bonus for the calendar year; provided
that Executive's target Bonus shall be no less than $400,000 for each such year.
3.3 Stock Options. (a) During each calendar year in the Period of
Employment, the Company shall recommend to the Compensation Committee of the
Board that Executive shall receive as of the first business day of each calendar
year an option ("Option") to purchase not less than 15,000 shares of common
stock of the Company ("Shares") at fair market value pursuant to the Company's
then applicable stock option plan. Each such Option shall be exercisable with
respect to the Shares subject thereto on the first anniversary of the date of
grant.
(b) In the event of Executive's termination of employment under
Section 6.1, each Option shall become immediately exercisable in full and shall
remain exercisable for the balance of its ten-year term.
4. Employee Benefits.
4.1 Employee Benefit Plans and Programs. The Company shall provide
Executive during the Period of Employment with coverage under any employee
benefit programs, plans and practices (commensurate with his position in the
Company) in accordance with the terms thereof, which the Company currently makes
available generally to its senior executive officers, or which the Company, with
Board approval, elects to make available generally to its senior executive
officers hereafter, including, but not limited to (a) retirement, pension and
profit-sharing; and (b) medical, dental, hospitalization, life insurance, short
and long-term disability, accidental death and dismemberment and travel accident
coverage; provided that Executive shall pay such portion of the premiums
therefor as is customarily paid by senior executives of the Company.
4.2 Vacation, Fringe and Other Benefits. Executive shall be entitled
to the number of vacation days customarily accorded senior executives of the
Company. In addition, during the Period of Employment, the Company shall pay
Executive $800 per month for leasing (plus maintenance and insurance) of an
automobile and shall make the initial capital cost reduction payment with
respect to the leasing of such automobile on Executive's behalf. The Company
shall also reimburse Executive for (a) all initiation fees and monthly dues for
membership in a club suitable for entertaining clients of the Company and (b)
all legal expenses incurred by Executive in connection with the negotiation and
drafting of this Agreement. The Company shall bear the cost of any increased tax
liability of Executive caused by the provisions of this Section 4.2.
5. Directors and Officers Liability. The Company shall keep in effect
during and after the Period of Employment, a policy of directors' and officers'
liability insurance for officers and directors of the Company at such reasonable
amount of coverage as is agreed to by Executive and the Board from time to time
and which insurance policy shall be on a claims-made basis.
6. Termination of Employment.
6.1 Termination Not For Cause or Resignation For Good Reason. (a) The
Company may terminate Executive's employment at any time, and Executive may
terminate his employment at any time. If Executive's employment is terminated by
the Company other than for Cause (as hereinafter defined), or Executive
terminates his employment for Good Reason (as hereinafter defined), Executive
shall be entitled to receive a lump sum cash payment (but not in substitution
for compensation already earned) in an amount equal to the sum of:
(i) the product of two times the sum of (A) Executive's Base Salary
at its then current rate plus (B) Executive's target Bonus for the calendar year
in which the termination of employment occurs;
(ii) an amount equal to Executive's Bonus, for any calendar year
ending before such termination occurs, which would have been payable had
Executive remained in employment until the date such Bonus would otherwise have
been paid; and
(iii) an amount equal to Executive's target Bonus for the calendar
year in which the termination of employment occurs, multiplied by a fraction,
the numerator of which is the number of days in such calendar year that
Executive was an employee of the Company, and the denominator of which is 365.
In the event of a termination of Executive's employment by the
Company other than for Cause or by the Executive for Good Reason following a
Change of Control, the factor of two in subsection 6.1(a)(i) shall be increased
to three.
(b) In addition to the amount described in subsections 6.1(a),
Executive shall be entitled to receive:
(i) until the earlier of December 31, 2000 or 18 months from the date
of termination, Executive (and, to the extent applicable, Executive's
dependents) shall continue to be covered, at the Company's expense, under the
Company's medical, dental and hospitalization coverage plans, and until the
earlier of December 31, 2000 or 6 months from the date of termination, Executive
shall continue to be covered, at the Company's expense, under the Company's
group life, short and long-term disability, accidental death and dismemberment
and travel accident coverage plans described in Section 4.1 hereof or the
Company will provide for equivalent coverage; and
(ii) all payments to which Executive has vested rights as of the
expiration of the Period of Employment under employee benefit, disability,
insurance and similar plans which provide for payments beyond the Period of
Employment.
(c) For purposes of this Agreement, "Good Reason" shall mean any of
the following (without Executive's express prior written consent):
(i) The assignment to Executive by the Company of duties
inconsistent with Executive's positions, duties, responsibilities, titles or
office as set forth in Section 1 hereof, or any reduction by the Company of his
duties or responsibilities or any removal of Executive from the position of
President and Chief Operating Officer, except in connection with the termination
of Executive's employment (A) upon the termination of the Period of Employment
on December 31, 2000, (B) upon the termination of a succeeding one-year Period
of Employment (as provided for under Section 2 hereof), (C) for Cause, (D) as a
result of Executive's Permanent Disability (as hereinafter defined) or death or
(E) by Executive other than for Good Reason;
(ii) A reduction by the Company in Executive's Base Salary, except as
provided herein, as in effect at the commencement of employment hereunder or as
the same may be increased from time to time during the Period of Employment;
(iii) The failure by the Company to obtain the specific assumption of
this Agreement by any successor or assign of the Company or any person acquiring
substantially all of the Company's assets;
(iv) Failure by the Company to perform in any material respect its
obligations under this Agreement, where such failure shall not have been
remedied within 30 days after Executive shall have notified the Company in
writing thereof;
(v) Any material reduction in Executive's compensation or benefits
following a Change of Control or Executive's principal business location is
changed to a location more than 30 miles from Executive's principal business
location (other than a relocation to New York, New York) immediately prior to a
Change of Control; or
(vi) The Company shall cease to keep in effect the policy of
directors' and officers' liability insurance for Executive described in Section
5;
(vii) The termination of the Indemnity Agreement, effective as of
April 20, 1995 between the Executive and the Company.
(d) If all or any portion of the payments or benefits provided under
Section 6.1, either alone or together with other payments and benefits which
Executive receives or is then entitled to receive from the Company, would
constitute a "parachute payment" within the meaning Section 28OG of the Internal
Revenue Code of 1986, as amended ("Code"), Executive shall be entitled to such
additional payments as may be necessary to ensure that the net after tax benefit
of all payments under this Section 6.1, including the payment provided for in
this subsection 6.1(c) shall be equal to the net after tax benefit of Executive
as if no excise tax had been imposed under Section 4999 of the Code.
The foregoing calculations shall be made, at the Company's expense,
by the Company and Executive. If no agreement on the calculations is reached,
Executive and the Company shall agree to the selection of an accounting firm to
make the calculations. If no agreement can be reached regarding the selection of
an accounting firm, the Company shall select a nationally recognized accounting
firm which has no current or recent business relationship with the Company. The
determination of any such firm selected shall be conclusive and binding on all
parties.
(e) For purposes of this Agreement, a "Change of Control" shall be
deemed to have occurred when:
(i) any person or persons acting in concert (excluding Company
benefit plans) becomes the beneficial owner of securities of the Company
having at least 25% of the voting power of the Company's then outstanding
securities (unless the event causing the 25% threshold to be crossed is an
acquisition of voting common securities directly from the Company, other
than upon the conversion of convertible debt securities or other
securities and/or the exercise of options or warrants); or
(ii) the shareholders of the Company shall approve any merger or
other business combination of the Company, sale or lease of the Company's
assets or combination of the foregoing transactions (the "Transactions")
other than a Transaction immediately following which the shareholders of
the Company and any trustee or fiduciary of any Company employee benefit
plan immediately prior to the Transaction own at least 65% of the voting
power, directly or indirectly, of (A) the surviving corporation in any
such merger or other business combination; (B) the purchaser or lessee of
the Company's assets; or (C) both the surviving corporation and the
purchaser or lessee in the event of any combination of Transactions; or
(iii) within any 24 month period, the persons who were directors
immediately before the beginning of such period (the "Incumbent
Directors") shall cease (for any reason other than death) to constitute at
least a majority of the Board or the board of directors of a successor to
the Company. For this purpose, any director who was not a director at the
beginning of such period shall be deemed to be an Incumbent Director if
such director was elected to the Board by, or on the recommendation of or
with the approval of, at least two-thirds of the directors who then
qualified as Incumbent Directors (so long as such director was not
nominated by a person who has expressed an intent to effect a Change of
Control or engage in a proxy or other control contest).
(f) All cash payments under this Section 6.1 shall be made by the
Company within 30 calendar days following the event giving rise to such
payments.
6.2 Permanent Disability. If as a result of the Executive's
incapacity due to physical or mental illness, the Executive shall have been
absent from his duties with the Company on a full-time basis for six consecutive
months (a "Permanent Disability") during his Period of Employment, the Company
or Executive may terminate his employment on written notice thereof, the Period
of Employment shall terminate on the giving of such notice, and the compensation
to which Executive is entitled pursuant to Section 3.1 shall be paid through the
last day of the month in which the notice is given. In addition, Executive shall
be entitled to receive:
(a) all unpaid amounts, as of the date of such termination, in
respect of any Bonus for any calendar year ending before the calendar year in
which such termination occurs, which would have been payable had Executive
remained in employment until the date such Bonus would otherwise have been paid,
plus Executive's target Bonus for the calendar year in which his employment
terminates, multiplied by a fraction, the numerator of which is the number of
days in such calendar year the Executive was an employee of the Company, and the
denominator of which is 365;
(b) until the earlier of December 31, 2000 or 24 months from the date
of termination for Permanent Disability, Executive (and, to the extent
applicable, Executive's dependents) shall continue to be covered, at the
Company's expense, under Company's medical, dental, hospitalization, group life,
short and long-term disability, accidental death and dismemberment and travel
accident coverage plans described in Section 4.1 or the Company will provide for
equivalent coverage; provided that if Executive is provided with comparable
coverage by a successor employer any such coverage by the Company shall cease;
and
(c) all amounts payable under the Company's disability plans.
6.3 Death. In the event of Executive's death while employed
hereunder, the Period of Employment shall thereupon automatically terminate and
the Executive's estate or designated beneficiaries shall receive (i) payments of
Base Salary for a period of three months after the date of death; (ii) all
unpaid amounts, as of the date of such termination, in respect of any Bonus for
any calendar year ending before the calendar year in which such termination
occurs, which would have been payable had Executive remained in employment until
the date such Bonus would otherwise have been paid, plus Executive's target
Bonus for the calendar year in which his employment terminates, multiplied by a
fraction, the numerator of which is the number of days in such calendar year the
Executive was an employee of the Company, and the denominator of which is 365;
and (iii) any death benefits provided under the employee benefit programs, in
accordance with their terms.
6.4 Voluntary Resignation; Discharge for Cause. If Executive resigns
voluntarily, other than for Good Reason or Permanent Disability, or the Company
terminates the employment of Executive at any time for Cause, the Company's
obligations under this Agreement to make any further payments to Executive shall
thereupon, to the extent permitted by law, cease and terminate except with
respect to all unpaid amounts, as of the date of such termination, in respect of
any Bonus for any calendar year ending before such termination occurs, which
would have been payable had Executive remained in employment until the date such
Bonus would otherwise have been paid. In addition, Executive shall remain
entitled to all vested amounts and benefits under the Company's employee benefit
programs, plans and practices. The term "Cause" shall be limited to (a) action
by Executive involving willful malfeasance in connection with his employment
which results in material harm to the Company, (b) material and continuing
breach by Executive of the terms of this Agreement which breach is not cured
within 60 days after Executive receives written notice from the Company of any
such breach or (c) Executive being convicted of a felony. Termination of
Executive for Cause pursuant to this Section 6.4 shall be communicated by a
Notice of Termination given within six months after the Board both (i) had
knowledge of conduct or an event allegedly constituting Cause and (ii) had
reason to believe that such conduct or event could be grounds for Cause. For
purposes of this Agreement a "Notice of Termination" shall mean delivery to
Executive of a copy of a resolution duly adopted by the Board at a meeting of
the Board called and held for that purpose (after not less than 10 days' notice
to Executive ("Preliminary Notice") and reasonable opportunity for Executive,
together with the Executive's counsel, to be heard before the Board prior to
such vote), finding that in the good faith opinion of the Board, Executive was
guilty of conduct set forth in the third sentence of this Section 6.4 and
specifying the particulars thereof in detail. The Board shall no later than 30
days after the receipt of the Preliminary Notice by Executive communicate its
findings to Executive. A failure by the Board to make its finding of Cause or to
communicate its conclusions within such 30-day period shall be deemed to be a
finding that Executive was not guilty of the conduct described in the second
sentence of this Section 6.4.
6.5 Termination Obligations. (a) Executive hereby acknowledges and
agrees that all personal property, including, without limitation, all books,
manuals, records, reports, notes, contracts, lists, and other documents, and
equipment furnished to or prepared by Executive in the course of or incident to
his employment, belong to the Company and shall be promptly returned to the
Company upon termination of the Period of Employment.
(b) Upon termination of the Period of Employment, the Executive shall
be deemed to have resigned from all offices and directorships then held with the
Company or any subsidiary or affiliate thereof.
7. Confidential Information. During and after the Period of
Employment, Executive shall not disclose to any person (other than an employee
or agent of the Company or any affiliate of the Company entitled to receive the
same) any confidential information relating to the business of the Company and
obtained by him while providing services to the Company, without the consent of
the Board, or until such information ceases to be confidential.
8. Non-Competition. In the event Executive's employment is terminated
by the Company for Cause or Executive terminates his employment with the Company
without Good Reason, Executive shall not, for a period ending on the earlier of
(i) 18 months from the date of such termination or (ii) December 31, 2000,
accept any other employment or engage, directly or indirectly, in any other
business activity which is competitive with that of the Company or any
subsidiary thereof.
9. Expenses. Executive is authorized to incur reasonable expenses in
carrying out his duties and responsibilities under this Agreement, including
expenses for travel and similar items related to such duties and
responsibilities. The Company will reimburse Executive for all such expenses
upon presentation by Executive from time to time of an itemized account of such
expenditures.
10. No Obligation to Mitigate Damages. Executive shall not be
required to mitigate damages or the amount of any payment provided for under
this Agreement by seeking (and no payment otherwise required hereunder shall be
reduced on account of) other employment or otherwise, nor will any payments
hereunder be subject to offset in respect of any claims which the Company may
have against Executive.
11. Notices. All notices or communications hereunder shall be in
writing, addressed as follows:
to Executive:
Jeffrey Levy
11 Camberra Drive
Suffern, NY 10901
to Company:
Sheldon I. Cammaker, Esq.
Executive Vice President and General Counsel
Emcor Group, Inc.
101 Merritt Seven, 7th Floor
Norwalk, CT 06851
with a copy to:
Kenneth C. Edgar, Jr., Esq.
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, NY 10017
Any such notice or communication shall be delivered by hand or sent certified or
registered mail, return receipt requested, postage prepaid, addressed as above
(or to such other address as such party may designate in a notice duly delivered
as described above), and the actual date of delivery or mailing shall determine
the time at which notice was given.
12. Agreement to Perform Necessary Acts. Each party agrees to perform
any further acts and to execute and deliver any further documents that may be
reasonably necessary to carry out the provisions of this Agreement.
13. Separability; Legal Actions; Legal Fees. If any provision of this
Agreement shall be declared to be invalid or unenforceable, in whole or in part,
such invalidity or unenforceability shall not affect the remaining provisions
hereof, which shall remain in full force and effect. Any controversy or claim
arising out of or relating to this Agreement or the breach of this Agreement
that cannot be resolved by Executive and the Company, including any dispute as
to the calculation of Executive's benefits or any payments hereunder, shall be
submitted to arbitration in New York, New York in accordance with the laws of
the State of New York and the procedures of the American Arbitration
Association, except that if Executive institutes an action relating to this
Agreement, Executive may, at Executive's option, bring that action in any court
of competent jurisdiction. All expenses, including legal expenses incurred by
Executive, relating to any arbitration shall be paid by the Company. Judgment
may be entered on an arbitrator(s)' award in any court having jurisdiction.
14. Assignment. This contract shall be binding upon and inure to the
benefit of the heirs and representatives of Executive and the assigns and
successors of the Company, but neither this Agreement nor any rights hereunder
shall be assignable or otherwise subject to hypothecation by Executive (except
by will or by operation of the laws of intestate succession) or by the Company
(any such purported assignment by either shall be null and void), except that
the Company may assign this Agreement to any successor (whether by merger,
purchase or otherwise) to all or substantially all of the stock, assets or
business of the Company.
15. Amendment; Waiver. The Agreement may be amended at any time, but
only by mutual written agreement of the parties hereto. Any party may waive
compliance by the other party with any provision hereof, but only by an
instrument in writing executed by the party granting such waiver.
16. Entire Agreement. The terms of this Agreement are intended by the
parties to be the final expression of their agreement with respect to the
employment of Executive by the Company and may not be contradicted by evidence
of any prior or contemporaneous agreement. The parties further intend that this
Agreement shall constitute the complete and exclusive statement of its terms and
that no extrinsic evidence whatsoever may be introduced in any judicial,
administrative or other legal proceeding involving this Agreement.
17. Death or Incompetence. In the event of Executive's death or a
judicial determination of his incompetence, reference in this Agreement to
Executive shall be deemed, where appropriate, to refer to his estate or other
legal representative.
<PAGE>
50
18. Survivorship. The respective rights and obligations of the
parties hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations. The
provisions of this Section are in addition to the survivorship provisions of any
other section of this Agreement.
19. Governing Law. This Agreement shall be construed, interpreted,
and governed in accordance with the laws of the State of New York without
reference to rules relating to conflicts of law.
20. Withholdings. The Company shall be entitled
to withhold from payment any amount of withholding required
by law.
21. Counterparts. This Agreement may be executed
in two or more counterparts, each of which will be deemed an
original.
EMCOR GROUP, INC.
By:__________________________
EXECUTIVE
-----------------------------
Jeffrey Levy
Exhibit 10(c) EXECUTION COPY
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made as of this 1st day of
January, 1998 by and between EMCOR GROUP, INC. (the
"Company") and LEICLE E. CHESSER ("Executive").
RECITALS
In order to induce Executive to serve as Executive Vice President and
Chief Financial Officer of the Company, the Company desires to provide Executive
with compensation and other benefits under the conditions set forth in this
Agreement.
Executive is willing to accept such employment and to perform
services for the Company and its subsidiaries, on the terms and conditions
hereinafter set forth.
It is therefore hereby agreed by and between the parties as follows:
<PAGE>
1. Employment.
1.1 Subject to the terms and conditions of this Agreement, the
Company agrees to employ Executive during the Period of Employment (as
hereinafter defined) as an Executive Vice President and Chief Financial Officer
of the Company. In his capacity as Executive Vice President and Chief Financial
Officer of the Company, Executive shall have the customary powers,
responsibilities and authorities of executive vice presidents and chief
financial officers of similar corporations of the size, type and nature of the
Company as it may exist from time to time, subject to the direction of the
Chairman of the Board of Directors (the "Board") of the Company and the Chief
Executive Officer of the Company (the "Chairman").
1.2 Subject to the terms and conditions hereof, Executive hereby
agrees to be employed as the Executive Vice President and Chief Financial
Officer of the Company and shall devote his full working time and efforts, to
the best of his ability, experience and talent, to the performance of the
services, duties and responsibilities in connection therewith. Except upon the
prior written consent of the Chairman, Executive will not during the Period of
Employment (as hereinafter defined) (i) accept any other employment or (ii)
engage, directly or indirectly, in any other business activity (whether or not
pursued for pecuniary advantage), whether or not it may be competitive with, or
whether or not it might place him in a competing position to that of, the
Company or any subsidiary thereof. Nothing in this Agreement shall preclude the
Executive from (i) engaging, consistent with his duties and responsibilities
hereunder, in charitable community affairs, (ii) managing his personal
investments, (iii) continuing to serve on the boards of directors on which he
presently serves (to the extent such service is not precluded by federal or
state law or by conflict of interest by reason of his position with the
Company), or (iv) serving, subject to approval of the Chairman, as a member of
boards of directors of other companies, provided, that such activities do not
interfere with the performance of Executive's duties hereunder.
2. Period of Employment. Executive's period of employment hereunder
shall commence on January 1, 1998 (the "Commencement Date") and shall continue
through the earlier of December 31, 2000 or the date of termination hereunder
(the "Period of Employment"); provided, however, that the Period of Employment
shall automatically be extended for successive one-year periods unless the
Company or Executive, at least six months prior to the end of such period,
provides written notice to the other party of intent not to extend the Period of
Employment. Notwithstanding anything in this Agreement to the contrary,
following a Change of Control (as defined in Section 6.1(e)) the Period of
Employment shall in no event be less than three years.
3. Compensation.
3.1 Salary. The Company shall pay Executive a base salary ("Base
Salary") at the rate of $350,000 per annum for the Period of Employment. Base
Salary shall be payable in accordance with the ordinary payroll practices of the
Company. Executive's rate of Base Salary shall be increased on the first day of
each calendar year occurring during the Period of Employment, beginning with
January 1, 1999, by the percentage increase for the prior year in the consumer
price index for the area in which the principal office of the Company is
located, as determined by the U.S. Department of Commerce, or the amount
specified by the Board, whichever is greater.
3.2 Bonus. In addition to his Base Salary, Executive shall be
entitled, while he remains employed hereunder, in respect of each calendar year,
to an annual bonus (the "Bonus") payable in cash and at such times as bonuses
are customarily paid to senior executives of the Company. For each calendar year
during the Period of Employment, the amount of the Bonus shall be determined by
the Compensation Committee of the Board of Directors in its sole discretion.
3.3 Stock Options. (a) During each calendar year in the Period of
Employment, the Company shall recommend to the Compensation Committee of the
Board that Executive shall receive as of the first business day of each calendar
year an option ("Option") to purchase not less than 10,000 shares of common
stock of the Company ("Shares") at fair market value pursuant to the Company's
then applicable stock option plan. Each such Option shall be exercisable with
respect to the Shares subject thereto on the first anniversary of the date of
grant.
(b) In the event of Executive's termination of employment under
Section 6.1, each Option shall become immediately exercisable in full and shall
remain exercisable for the balance of its ten-year term.
4. Employee Benefits.
4.1 Employee Benefit Plans and Programs. The Company shall provide
Executive during the Period of Employment with coverage under any employee
benefit programs, plans and practices (commensurate with his position in the
Company) in accordance with the terms thereof, which the Company currently makes
available generally to its senior executive officers, or which the Company, with
Board approval, elects to make available generally to its senior executive
officers hereafter, including, but not limited to (a) retirement, pension and
profit-sharing; and (b) medical, dental, hospitalization, life insurance, short
and long-term disability, accidental death and dismemberment and travel accident
coverage; provided that Executive shall pay such portion of the premiums
therefor as is customarily paid by senior executives of the Company.
4.2 Vacation, Fringe and Other Benefits. Executive shall be entitled
to the number of vacation days customarily accorded senior executives of the
Company. In addition, during the Period of Employment, the Company shall pay
Executive $800 per month for leasing (plus maintenance and insurance) of an
automobile and shall make the initial capital cost reduction payment with
respect to the leasing of such automobile on Executive's behalf. The Company
shall also reimburse Executive for (a) all initiation fees and monthly dues for
membership in a club suitable for entertaining clients of the Company and (b)
all legal expenses incurred by Executive in connection with the negotiation and
drafting of this Agreement. The Company shall bear the cost of any increased tax
liability of Executive caused by the provisions of this Section 4.2.
5. Directors and Officers Liability. The Company shall keep in effect
during and after the Period of Employment, a policy of directors' and officers'
liability insurance for officers and directors of the Company at such reasonable
amount of coverage as is agreed to by Executive and the Board from time to time
and which insurance policy shall be on a claims-made basis.
6. Termination of Employment.
6.1 Termination Not For Cause or Resignation For Good Reason. (a) The
Company may terminate Executive's employment at any time, and Executive may
terminate his employment at any time. If Executive's employment is terminated by
the Company other than for Cause (as hereinafter defined), or Executive
terminates his employment for Good Reason (as hereinafter defined), Executive
shall be entitled to receive a lump sum cash payment (but not in substitution
for compensation already earned) in an amount equal to the sum of:
(i) the product of two times the sum of (A) Executive's Base Salary
at its current annual rate at the time of termination of employment plus (B)
Executive's "Deemed Bonus" (as defined below) for the calendar year in which the
termination of employment occurs;
(ii) an amount equal to Executive's Bonus, for any calendar year
ending before such termination occurs, which would have been payable had
Executive remained in employment until the date such Bonus would otherwise have
been paid; and
(iii) an amount equal to Executive's Deemed Bonus for the calendar
year in which the termination of employment occurs, multiplied by a fraction,
the numerator of which is the number of days in such calendar year that
Executive was an employee of the Company, and the denominator of which is 365.
In the event of a termination of Executive's employment by the
Company other than for Cause or by the Executive for Good Reason following a
Change of Control, the factor of two in subsection 6.1(a)(i) shall be increased
to three.
For purposes of subsections 6.1(a)(i) and (ii), 6.2(a) and 6.3, the
amount of the Deemed Bonus shall be the highest Bonus paid to Executive for any
year he has been employed by the Company.
(b) In addition to the amount described in subsections 6.1(a),
Executive shall be entitled to receive:
(i) until the earlier of December 31, 2000 or 18 months from the date
of termination, Executive (and, to the extent applicable, Executive's
dependents) shall continue to be covered, at the Company's expense, under the
Company's medical, dental and hospitalization coverage plans, and until the
earlier of December 31, 2000 or 6 months from the date of termination, Executive
shall continue to be covered, at the Company's expense, under the Company's
group life, short and long-term disability, accidental death and dismemberment
and travel accident coverage plans described in Section 4.1 hereof or the
Company will provide for equivalent coverage; and
(ii) all payments to which Executive has vested rights as of the
expiration of the Period of Employment under employee benefit, disability,
insurance and similar plans which provide for payments beyond the Period of
Employment.
(c) For purposes of this Agreement, "Good Reason" shall mean any of
the following (without Executive's express prior written consent):
(i) The assignment to Executive by the Company of duties
inconsistent with Executive's positions, duties, responsibilities, titles or
office as set forth in Section 1 hereof, or any reduction by the Company of his
duties or responsibilities or any removal of Executive from the position of
Executive Vice President and Chief Financial Officer, except in connection with
the termination of Executive's employment (A) upon the termination of the Period
of Employment on December 31, 2000, (B) upon the termination of a succeeding
one-year Period of Employment (as provided for under Section 2 hereof), (C) for
Cause, (D) as a result of Executive's Permanent Disability (as hereinafter
defined) or death or (E) by Executive other than for Good Reason;
(ii) A reduction by the Company in Executive's Base Salary, except as
provided herein, as in effect at the commencement of employment hereunder or as
the same may be increased from time to time during the Period of Employment;
(iii) The failure by the Company to obtain the specific assumption of
this Agreement by any successor or assign of the Company or any person acquiring
substantially all of the Company's assets;
(iv) Failure by the Company to perform in any material respect its
obligations under this Agreement, where such failure shall not have been
remedied within 30 days after Executive shall have notified the Company in
writing thereof;
(v) Any material reduction in Executive's compensation or benefits
following a Change of Control or Executive's principal business location is
changed to a location more than 30 miles from Executive's principal business
location (other than a relocation to New York, New York) immediately prior to a
Change of Control; or
(vi) The Company shall cease to keep in effect the policy of
directors' and officers' liability insurance for Executive described in Section
5;
(vii) The termination of the Indemnity Agreement, effective as of
April 20, 1995 between the Executive and the Company.
(d) If all or any portion of the payments or benefits provided under
Section 6.1, either alone or together with other payments and benefits which
Executive receives or is then entitled to receive from the Company, would
constitute a "parachute payment" within the meaning Section 28OG of the Internal
Revenue Code of 1986, as amended ("Code"), Executive shall be entitled to such
additional payments as may be necessary to ensure that the net after tax benefit
of all payments under this Section 6.1, including the payment provided for in
this subsection 6.1(c) shall be equal to the net after tax benefit of Executive
as if no excise tax had been imposed under Section 4999 of the Code.
The foregoing calculations shall be made, at the Company's expense,
by the Company and Executive. If no agreement on the calculations is reached,
Executive and the Company shall agree to the selection of an accounting firm to
make the calculations. If no agreement can be reached regarding the selection of
an accounting firm, the Company shall select a nationally recognized accounting
firm which has no current or recent business relationship with the Company. The
determination of any such firm selected shall be conclusive and binding on all
parties.
(e) For purposes of this Agreement, a "Change of Control" shall be
deemed to have occurred when:
(i) any person or persons acting in concert (excluding Company
benefit plans) becomes the beneficial owner of securities of the Company having
at least 25% of the voting power of the Company's then outstanding securities
(unless the event causing the 25% threshold to be crossed is an acquisition of
voting common securities directly from the Company, other than upon the
conversion of convertible debt securities or other securities and/or the
exercise of options or warrants); or
(ii) the shareholders of the Company shall approve any merger or
other business combination of the Company, sale or lease of the Company's assets
or combination of the foregoing transactions (the "Transactions") other than a
Transaction immediately following which the shareholders of the Company and any
trustee or fiduciary of any Company employee benefit plan immediately prior to
the Transaction own at least 65% of the voting power, directly or indirectly, of
(A) the surviving corporation in any such merger or other business combination;
(B) the purchaser or lessee of the Company's assets; or (C) both the surviving
corporation and the purchaser or lessee in the event of any combination of
Transactions; or
(iii) within any 24 month period, the persons who were directors
immediately before the beginning of such period (the "Incumbent Directors")
shall cease (for any reason other than death) to constitute at least a majority
of the Board or the board of directors of a successor to the Company. For this
purpose, any director who was not a director at the beginning of such period
shall be deemed to be an Incumbent Director if such director was elected to the
Board by, or on the recommendation of or with the approval of, at least
two-thirds of the directors who then qualified as Incumbent Directors (so long
as such director was not nominated by a person who has expressed an intent to
effect a Change of Control or engage in a proxy or other control contest).
(f) All cash payments under this Section 6.1 shall be made by the
Company within 30 calendar days following the event giving rise to such
payments.
6.2 Permanent Disability. If as a result of the Executive's
incapacity due to physical or mental illness, the Executive shall have been
absent from his duties with the Company on a full-time basis for six consecutive
months (a "Permanent Disability") during his Period of Employment, the Company
or Executive may terminate his employment on written notice thereof, the Period
of Employment shall terminate on the giving of such notice, and the compensation
to which Executive is entitled pursuant to Section 3.1 shall be paid through the
last day of the month in which the notice is given. In addition, Executive shall
be entitled to receive:
(a) all unpaid amounts, as of the date of such termination, in
respect of any Bonus for any calendar year ending before the calendar year in
which such termination occurs, which would have been payable had Executive
remained in employment until the date such Bonus would otherwise have been paid,
plus Executive's Deemed Bonus for the calendar year in which his employment
terminates, multiplied by a fraction, the numerator of which is the number of
days in such calendar year the Executive was an employee of the Company, and the
denominator of which is 365;
(b) until the earlier of December 31, 2000 or 24 months from the date
of termination for Permanent Disability, Executive (and, to the extent
applicable, Executive's dependents) shall continue to be covered, at the
Company's expense, under Company's medical, dental, hospitalization, group life,
short and long-term disability, accidental death and dismemberment and travel
accident coverage plans described in Section 4.1 or the Company will provide for
equivalent coverage; provided that if Executive is provided with comparable
coverage by a successor employer any such coverage by the Company shall cease;
and
(c) all amounts payable under the Company's disability plans.
6.3 Death. In the event of Executive's death while employed
hereunder, the Period of Employment shall thereupon automatically terminate and
the Executive's estate or designated beneficiaries shall receive (i) payments of
Base Salary for a period of three months after the date of death; (ii) all
unpaid amounts, as of the date of such termination, in respect of any Bonus for
any calendar year ending before the calendar year in which such termination
occurs, which would have been payable had Executive remained in employment until
the date such Bonus would otherwise have been paid, plus Executive's Deemed
Bonus for the calendar year in which his employment terminates, multiplied by a
fraction, the numerator of which is the number of days in such calendar year the
Executive was an employee of the Company, and the denominator of which is 365;
and (iii) any death benefits provided under the employee benefit programs, in
accordance with their terms.
6.4 Voluntary Resignation; Discharge for Cause. If Executive resigns
voluntarily, other than for Good Reason or Permanent Disability, or the Company
terminates the employment of Executive at any time for Cause, the Company's
obligations under this Agreement to make any further payments to Executive shall
thereupon, to the extent permitted by law, cease and terminate except with
respect to all unpaid amounts, as of the date of such termination, in respect of
any Bonus for any calendar year ending before such termination occurs, which
would have been payable had Executive remained in employment until the date such
Bonus would otherwise have been paid. In addition, Executive shall remain
entitled to all vested amounts and benefits under the Company's employee benefit
programs, plans and practices. The term "Cause" shall be limited to (a) action
by Executive involving willful malfeasance in connection with his employment
which results in material harm to the Company, (b) material and continuing
breach by Executive of the terms of this Agreement which breach is not cured
within 60 days after Executive receives written notice from the Company of any
such breach or (c) Executive being convicted of a felony. Termination of
Executive for Cause pursuant to this Section 6.4 shall be communicated by a
Notice of Termination given within six months after the Board both (i) had
knowledge of conduct or an event allegedly constituting Cause and (ii) had
reason to believe that such conduct or event could be grounds for Cause. For
purposes of this Agreement a "Notice of Termination" shall mean delivery to
Executive of a copy of a resolution duly adopted by the Board at a meeting of
the Board called and held for that purpose (after not less than 10 days' notice
to Executive ("Preliminary Notice") and reasonable opportunity for Executive,
together with the Executive's counsel, to be heard before the Board prior to
such vote), finding that in the good faith opinion of the Board, Executive was
guilty of conduct set forth in the third sentence of this Section 6.4 and
specifying the particulars thereof in detail. The Board shall no later than 30
days after the receipt of the Preliminary Notice by Executive communicate its
findings to Executive. A failure by the Board to make its finding of Cause or to
communicate its conclusions within such 30-day period shall be deemed to be a
finding that Executive was not guilty of the conduct described in the second
sentence of this Section 6.4.
6.5 Termination Obligations. (a) Executive hereby acknowledges and
agrees that all personal property, including, without limitation, all books,
manuals, records, reports, notes, contracts, lists, and other documents, and
equipment furnished to or prepared by Executive in the course of or incident to
his employment, belong to the Company and shall be promptly returned to the
Company upon termination of the Period of Employment.
(b) Upon termination of the Period of Employment, the Executive shall
be deemed to have resigned from all offices and directorships then held with the
Company or any subsidiary or affiliate thereof.
7. Confidential Information. During and after the Period of
Employment, Executive shall not disclose to any person (other than an employee
or agent of the Company or any affiliate of the Company entitled to receive the
same) any confidential information relating to the business of the Company and
obtained by him while providing services to the Company, without the consent of
the Board, or until such information ceases to be confidential.
8. Non-Competition. In the event Executive's employment is terminated
by the Company for Cause or Executive terminates his employment with the Company
without Good Reason, Executive shall not, for a period ending on the earlier of
(i) 18 months from the date of such termination or (ii) December 31, 2000,
accept any other employment or engage, directly or indirectly, in any other
business activity which is competitive with that of the Company or any
subsidiary thereof.
9. Expenses. Executive is authorized to incur reasonable expenses in
carrying out his duties and responsibilities under this Agreement, including
expenses for travel and similar items related to such duties and
responsibilities. The Company will reimburse Executive for all such expenses
upon presentation by Executive from time to time of an itemized account of such
expenditures.
10. No Obligation to Mitigate Damages. Executive shall not be
required to mitigate damages or the amount of any payment provided for under
this Agreement by seeking (and no payment otherwise required hereunder shall be
reduced on account of) other employment or otherwise, nor will any payments
hereunder be subject to offset in respect of any claims which the Company may
have against Executive.
11. Notices. All notices or communications hereunder shall be in
writing, addressed as follows:
to Executive:
Leicle E. Chesser
10 Sunrise Lane
New Millford, CT 06776
to Company:
Sheldon I. Cammaker, Esq.
Executive Vice President and General Counsel
Emcor Group, Inc.
101 Merritt Seven, 7th Floor
Norwalk, CT 06851
with a copy to:
Kenneth C. Edgar, Jr., Esq.
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, NY 10017
Any such notice or communication shall be delivered by hand or sent certified or
registered mail, return receipt requested, postage prepaid, addressed as above
(or to such other address as such party may designate in a notice duly delivered
as described above), and the actual date of delivery or mailing shall determine
the time at which notice was given.
12. Agreement to Perform Necessary Acts. Each party agrees to perform
any further acts and to execute and deliver any further documents that may be
reasonably necessary to carry out the provisions of this Agreement.
13. Separability; Legal Actions; Legal Fees. If any provision of this
Agreement shall be declared to be invalid or unenforceable, in whole or in part,
such invalidity or unenforceability shall not affect the remaining provisions
hereof, which shall remain in full force and effect. Any controversy or claim
arising out of or relating to this Agreement or the breach of this Agreement
that cannot be resolved by Executive and the Company, including any dispute as
to the calculation of Executive's benefits or any payments hereunder, shall be
submitted to arbitration in New York, New York in accordance with the laws of
the State of New York and the procedures of the American Arbitration
Association, except that if Executive institutes an action relating to this
Agreement, Executive may, at Executive's option, bring that action in any court
of competent jurisdiction. All expenses, including legal expenses incurred by
Executive, relating to any arbitration shall be paid by the Company. Judgment
may be entered on an arbitrator(s)' award in any court having jurisdiction.
14. Assignment. This contract shall be binding upon and inure to the
benefit of the heirs and representatives of Executive and the assigns and
successors of the Company, but neither this Agreement nor any rights hereunder
shall be assignable or otherwise subject to hypothecation by Executive (except
by will or by operation of the laws of intestate succession) or by the Company
(any such purported assignment by either shall be null and void), except that
the Company may assign this Agreement to any successor (whether by merger,
purchase or otherwise) to all or substantially all of the stock, assets or
business of the Company.
15. Amendment; Waiver. The Agreement may be amended at any time, but
only by mutual written agreement of the parties hereto. Any party may waive
compliance by the other party with any provision hereof, but only by an
instrument in writing executed by the party granting such waiver.
16. Entire Agreement. The terms of this Agreement are intended by the
parties to be the final expression of their agreement with respect to the
employment of Executive by the Company and may not be contradicted by evidence
of any prior or contemporaneous agreement. The parties further intend that this
Agreement shall constitute the complete and exclusive statement of its terms and
that no extrinsic evidence whatsoever may be introduced in any judicial,
administrative or other legal proceeding involving this Agreement.
17. Death or Incompetence. In the event of Executive's death or a
judicial determination of his incompetence, reference in this Agreement to
Executive shall be deemed, where appropriate, to refer to his estate or other
legal representative.
<PAGE>
61
18. Survivorship. The respective rights and obligations of the
parties hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations. The
provisions of this Section are in addition to the survivorship provisions of any
other section of this Agreement.
19. Governing Law. This Agreement shall be construed, interpreted,
and governed in accordance with the laws of the State of New York without
reference to rules relating to conflicts of law.
20. Withholdings. The Company shall be entitled
to withhold from payment any amount of withholding required
by law.
21. Counterparts. This Agreement may be executed
in two or more counterparts, each of which will be deemed an
original.
EMCOR GROUP, INC.
By:__________________________
EXECUTIVE
-----------------------------
Leicle E. Chesser
Exhibit 10(d) EXECUTION COPY
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made as of this 1st day of January, 1998 by and between
EMCOR GROUP, INC. (the "Company") and THOMAS D. CUNNINGHAM ("Executive").
RECITALS
In order to induce Executive to serve as an Executive Vice President
of the Company, the Company desires to provide Executive with compensation and
other benefits under the conditions set forth in this Agreement.
Executive is willing to accept such employment and to perform
services for the Company and its subsidiaries, on the terms and conditions
hereinafter set forth.
It is therefore hereby agreed by and between the parties as follows:
1. Employment.
1.1 Subject to the terms and conditions of this Agreement, the
Company agrees to employ Executive during the Period of Employment (as
hereinafter defined) as an Executive Vice President of the Company. In his
capacity as Executive Vice President of the Company, Executive shall have the
customary powers, responsibilities and authorities of executive vice presidents
of similar corporations of the size, type and nature of the Company as it may
exist from time to time, subject to the direction of the Chairman of the Board
of Directors (the "Board") of the Company and the Chief Executive Officer of the
Company (the "Chairman").
1.2 Subject to the terms and conditions hereof, Executive hereby
agrees to be employed as an Executive Vice President of the Company and shall
devote his full working time and efforts, to the best of his ability, experience
and talent, to the performance of the services, duties and responsibilities in
connection therewith. Except upon the prior written consent of the Chairman,
Executive will not during the Period of Employment (as hereinafter defined) (i)
accept any other employment or (ii) engage, directly or indirectly, in any other
business activity (whether or not pursued for pecuniary advantage), whether or
not it may be competitive with, or whether or not it might place him in a
competing position to that of, the Company or any subsidiary thereof. Nothing in
this Agreement shall preclude the Executive from (i) engaging, consistent with
his duties and responsibilities hereunder, in charitable community affairs, (ii)
managing his personal investments, (iii) continuing to serve on the boards of
directors on which he presently serves (to the extent such service is not
precluded by federal or state law or by conflict of interest by reason of his
position with the Company), or (iv) serving, subject to approval of the
Chairman, as a member of boards of directors of other companies, provided, that
such activities do not interfere with the performance of Executive's duties
hereunder.
2. Period of Employment. Executive's period of employment hereunder
shall commence on January 1, 1998 (the "Commencement Date") and shall continue
through the earlier of December 31, 2000 or the date of termination hereunder
(the "Period of Employment"); provided, however, that the Period of Employment
shall automatically be extended for successive one-year periods unless the
Company or Executive, at least six months prior to the end of such period,
provides written notice to the other party of intent not to extend the Period of
Employment. Notwithstanding anything in this Agreement to the contrary,
following a Change of Control (as defined in Section 6.1(e)) the Period of
Employment shall in no event be less than three years.
3. Compensation.
3.1 Salary. The Company shall pay Executive a base salary ("Base
Salary") at the rate of $275,000 per annum for the Period of Employment. Base
Salary shall be payable in accordance with the ordinary payroll practices of the
Company. Executive's rate of Base Salary shall be increased on the first day of
each calendar year occurring during the Period of Employment, beginning with
January 1, 1999, by the percentage increase for the prior year in the consumer
price index for the area in which the principal office of the Company is
located, as determined by the U.S. Department of Commerce, or the amount
specified by the Board, whichever is greater.
3.2 Bonus. In addition to his Base Salary, Executive shall be
entitled, while he remains employed hereunder, in respect of each calendar year,
to an annual bonus (the "Bonus") payable in cash and at such times as bonuses
are customarily paid to senior executives of the Company. For each calendar year
during the Period of Employment, the amount of the Bonus shall be determined by
the Compensation Committee of the Board of Directors in its sole discretion.
3.3 Stock Options. (a) During each calendar year in the Period of
Employment, the Company shall recommend to the Compensation Committee of the
Board that Executive shall receive as of the first business day of each calendar
year an option ("Option") to purchase not less than 5,000 shares of common stock
of the Company ("Shares") at fair market value pursuant to the Company's then
applicable stock option plan. Each such Option shall be exercisable with respect
to the Shares subject thereto on the first anniversary of the date of grant.
(b) In the event of Executive's termination of employment under
Section 6.1, each Option shall become immediately exercisable in full and shall
remain exercisable for the balance of its ten-year term.
4. Employee Benefits.
4.1 Employee Benefit Plans and Programs. The Company shall provide
Executive during the Period of Employment with coverage under any employee
benefit programs, plans and practices (commensurate with his position in the
Company) in accordance with the terms thereof, which the Company currently makes
available generally to its senior executive officers, or which the Company, with
Board approval, elects to make available generally to its senior executive
officers hereafter, including, but not limited to (a) retirement, pension and
profit-sharing; and (b) medical, dental, hospitalization, life insurance, short
and long-term disability, accidental death and dismemberment and travel accident
coverage; provided that Executive shall pay such portion of the premiums
therefor as is customarily paid by senior executives of the Company.
4.2 Vacation, Fringe and Other Benefits. Executive shall be entitled
to the number of vacation days customarily accorded senior executives of the
Company. In addition, during the Period of Employment, the Company shall pay
Executive $800 per month for leasing (plus maintenance and insurance) of an
automobile and shall make the initial capital cost reduction payment with
respect to the leasing of such automobile on Executive's behalf. The Company
shall also reimburse Executive for (a) all initiation fees and monthly dues for
membership in a club suitable for entertaining clients of the Company and (b)
all legal expenses incurred by Executive in connection with the negotiation and
drafting of this Agreement. The Company shall bear the cost of any increased tax
liability of Executive caused by the provisions of this Section 4.2.
5. Directors and Officers Liability. The Company shall keep in effect
during and after the Period of Employment, a policy of directors' and officers'
liability insurance for officers and directors of the Company at such reasonable
amount of coverage as is agreed to by Executive and the Board from time to time
and which insurance policy shall be on a claims-made basis.
6. Termination of Employment.
6.1 Termination Not For Cause or Resignation For Good Reason. (a) The
Company may terminate Executive's employment at any time, and Executive may
terminate his employment at any time. If Executive's employment is terminated by
the Company other than for Cause (as hereinafter defined), or Executive
terminates his employment for Good Reason (as hereinafter defined), Executive
shall be entitled to receive a lump sum cash payment (but not in substitution
for compensation already earned) in an amount equal to the sum of:
(i) the product of two times the sum of (A) Executive's Base Salary
at its current annual rate at the time of termination of employment plus (B)
Executive's "Deemed Bonus" (as defined below) for the calendar year in which the
termination of employment occurs;
(ii) an amount equal to Executive's Bonus, for any calendar year
ending before such termination occurs, which would have been payable had
Executive remained in employment until the date such Bonus would otherwise have
been paid; and
(iii) an amount equal to Executive's Deemed Bonus for the calendar
year in which the termination of employment occurs, multiplied by a fraction,
the numerator of which is the number of days in such calendar year that
Executive was an employee of the Company, and the denominator of which is 365.
In the event of a termination of Executive's employment by the
Company other than for Cause or by the Executive for Good Reason following a
Change of Control, the factor of two in subsection 6.1(a)(i) shall be increased
to three.
For purposes of subsections 6.1(a)(i) and (ii), 6.2(a) and 6.3, the
amount of the Deemed Bonus shall be the highest Bonus paid to Executive for any
year he has been employed by the Company.
(b) In addition to the amount described in subsections 6.1(a),
Executive shall be entitled to receive:
(i) until the earlier of December 31, 2000 or 18 months from the date
of termination, Executive (and, to the extent applicable, Executive's
dependents) shall continue to be covered, at the Company's expense, under the
Company's medical, dental and hospitalization coverage plans, and until the
earlier of December 31, 2000 or 6 months from the date of termination, Executive
shall continue to be covered, at the Company's expense, under the Company's
group life, short and long-term disability, accidental death and dismemberment
and travel accident coverage plans described in Section 4.1 hereof or the
Company will provide for equivalent coverage; and
(ii) all payments to which Executive has vested rights as of the
expiration of the Period of Employment under employee benefit, disability,
insurance and similar plans which provide for payments beyond the Period of
Employment.
(c) For purposes of this Agreement, "Good Reason" shall mean any of
the following (without Executive's express prior written consent):
(i) The assignment to Executive by the Company of duties
inconsistent with Executive's positions, duties, responsibilities, titles or
office as set forth in Section 1 hereof, or any reduction by the Company of his
duties or responsibilities or any removal of Executive from the position of
Executive Vice President, except in connection with the termination of
Executive's employment (A) upon the termination of the Period of Employment on
December 31, 2000, (B) upon the termination of a succeeding one-year Period of
Employment (as provided for under Section 2 hereof), (C) for Cause, (D) as a
result of Executive's Permanent Disability (as hereinafter defined) or death or
(E) by Executive other than for Good Reason;
(ii) A reduction by the Company in Executive's Base Salary, except as
provided herein, as in effect at the commencement of employment hereunder or as
the same may be increased from time to time during the Period of Employment;
(iii) The failure by the Company to obtain the specific assumption of
this Agreement by any successor or assign of the Company or any person acquiring
substantially all of the Company's assets;
(iv) Failure by the Company to perform in any material respect its
obligations under this Agreement, where such failure shall not have been
remedied within 30 days after Executive shall have notified the Company in
writing thereof;
(v) Any material reduction in Executive's compensation or benefits
following a Change of Control or Executive's principal business location is
changed to a location more than 30 miles from Executive's principal business
location (other than a relocation to New York, New York) immediately prior to a
Change of Control; or
(vi) The Company shall cease to keep in effect the policy of
directors' and officers' liability insurance for Executive described in Section
5;
(vii) The termination of the Indemnity Agreement, effective as of
April 20, 1995 between the Executive and the Company.
(d) If all or any portion of the payments or benefits provided under
Section 6.1, either alone or together with other payments and benefits which
Executive receives or is then entitled to receive from the Company, would
constitute a "parachute payment" within the meaning Section 28OG of the Internal
Revenue Code of 1986, as amended ("Code"), Executive shall be entitled to such
additional payments as may be necessary to ensure that the net after tax benefit
of all payments under this Section 6.1, including the payment provided for in
this subsection 6.1(c) shall be equal to the net after tax benefit of Executive
as if no excise tax had been imposed under Section 4999 of the Code.
The foregoing calculations shall be made, at the Company's expense,
by the Company and Executive. If no agreement on the calculations is reached,
Executive and the Company shall agree to the selection of an accounting firm to
make the calculations. If no agreement can be reached regarding the selection of
an accounting firm, the Company shall select a nationally recognized accounting
firm which has no current or recent business relationship with the Company. The
determination of any such firm selected shall be conclusive and binding on all
parties.
(e) For purposes of this Agreement, a "Change of Control" shall be
deemed to have occurred when:
(i) any person or persons acting in concert (excluding Company
benefit plans) becomes the beneficial owner of securities of the Company
having at least 25% of the voting power of the Company's then outstanding
securities (unless the event causing the 25% threshold to be crossed is an
acquisition of voting common securities directly from the Company, other
than upon the conversion of convertible debt securities or other
securities and/or the exercise of options or warrants); or
(ii) the shareholders of the Company shall approve any merger or
other business combination of the Company, sale or lease of the Company's
assets or combination of the foregoing transactions (the "Transactions")
other than a Transaction immediately following which the shareholders of
the Company and any trustee or fiduciary of any Company employee benefit
plan immediately prior to the Transaction own at least 65% of the voting
power, directly or indirectly, of (A) the surviving corporation in any
such merger or other business combination; (B) the purchaser or lessee of
the Company's assets; or (C) both the surviving corporation and the
purchaser or lessee in the event of any combination of Transactions; or
(iii) within any 24 month period, the persons who were directors
immediately before the beginning of such period (the "Incumbent
Directors") shall cease (for any reason other than death) to constitute at
least a majority of the Board or the board of directors of a successor to
the Company. For this purpose, any director who was not a director at the
beginning of such period shall be deemed to be an Incumbent Director if
such director was elected to the Board by, or on the recommendation of or
with the approval of, at least two-thirds of the directors who then
qualified as Incumbent Directors (so long as such director was not
nominated by a person who has expressed an intent to effect a Change of
Control or engage in a proxy or other control contest).
(f) All cash payments under this Section 6.1 shall be made by the
Company within 30 calendar days following the event giving rise to such
payments.
6.2 Permanent Disability. If as a result of the Executive's
incapacity due to physical or mental illness, the Executive shall have been
absent from his duties with the Company on a full-time basis for six consecutive
months (a "Permanent Disability") during his Period of Employment, the Company
or Executive may terminate his employment on written notice thereof, the Period
of Employment shall terminate on the giving of such notice, and the compensation
to which Executive is entitled pursuant to Section 3.1 shall be paid through the
last day of the month in which the notice is given. In addition, Executive shall
be entitled to receive:
(a) all unpaid amounts, as of the date of such termination, in
respect of any Bonus for any calendar year ending before the calendar year in
which such termination occurs, which would have been payable had Executive
remained in employment until the date such Bonus would otherwise have been paid,
plus Executive's Deemed Bonus for the calendar year in which his employment
terminates, multiplied by a fraction, the numerator of which is the number of
days in such calendar year the Executive was an employee of the Company, and the
denominator of which is 365;
(b) until the earlier of December 31, 2000 or 24 months from the date
of termination for Permanent Disability, Executive (and, to the extent
applicable, Executive's dependents) shall continue to be covered, at the
Company's expense, under Company's medical, dental, hospitalization, group life,
short and long-term disability, accidental death and dismemberment and travel
accident coverage plans described in Section 4.1 or the Company will provide for
equivalent coverage; provided that if Executive is provided with comparable
coverage by a successor employer any such coverage by the Company shall cease;
and
(c) all amounts payable under the Company's disability plans.
6.3 Death. In the event of Executive's death while employed
hereunder, the Period of Employment shall thereupon automatically terminate and
the Executive's estate or designated beneficiaries shall receive (i) payments of
Base Salary for a period of three months after the date of death; (ii) all
unpaid amounts, as of the date of such termination, in respect of any Bonus for
any calendar year ending before the calendar year in which such termination
occurs, which would have been payable had Executive remained in employment until
the date such Bonus would otherwise have been paid, plus Executive's Deemed
Bonus for the calendar year in which his employment terminates, multiplied by a
fraction, the numerator of which is the number of days in such calendar year the
Executive was an employee of the Company, and the denominator of which is 365;
and (iii) any death benefits provided under the employee benefit programs, in
accordance with their terms.
6.4 Voluntary Resignation; Discharge for Cause. If Executive resigns
voluntarily, other than for Good Reason or Permanent Disability, or the Company
terminates the employment of Executive at any time for Cause, the Company's
obligations under this Agreement to make any further payments to Executive shall
thereupon, to the extent permitted by law, cease and terminate except with
respect to all unpaid amounts, as of the date of such termination, in respect of
any Bonus for any calendar year ending before such termination occurs, which
would have been payable had Executive remained in employment until the date such
Bonus would otherwise have been paid. In addition, Executive shall remain
entitled to all vested amounts and benefits under the Company's employee benefit
programs, plans and practices. The term "Cause" shall be limited to (a) action
by Executive involving willful malfeasance in connection with his employment
which results in material harm to the Company, (b) material and continuing
breach by Executive of the terms of this Agreement which breach is not cured
within 60 days after Executive receives written notice from the Company of any
such breach or (c) Executive being convicted of a felony. Termination of
Executive for Cause pursuant to this Section 6.4 shall be communicated by a
Notice of Termination given within six months after the Board both (i) had
knowledge of conduct or an event allegedly constituting Cause and (ii) had
reason to believe that such conduct or event could be grounds for Cause. For
purposes of this Agreement a "Notice of Termination" shall mean delivery to
Executive of a copy of a resolution duly adopted by the Board at a meeting of
the Board called and held for that purpose (after not less than 10 days' notice
to Executive ("Preliminary Notice") and reasonable opportunity for Executive,
together with the Executive's counsel, to be heard before the Board prior to
such vote), finding that in the good faith opinion of the Board, Executive was
guilty of conduct set forth in the third sentence of this Section 6.4 and
specifying the particulars thereof in detail. The Board shall no later than 30
days after the receipt of the Preliminary Notice by Executive communicate its
findings to Executive. A failure by the Board to make its finding of Cause or to
communicate its conclusions within such 30-day period shall be deemed to be a
finding that Executive was not guilty of the conduct described in the second
sentence of this Section 6.4.
6.5 Termination Obligations. (a) Executive hereby acknowledges and
agrees that all personal property, including, without limitation, all books,
manuals, records, reports, notes, contracts, lists, and other documents, and
equipment furnished to or prepared by Executive in the course of or incident to
his employment, belong to the Company and shall be promptly returned to the
Company upon termination of the Period of Employment.
(b) Upon termination of the Period of Employment, the Executive shall
be deemed to have resigned from all offices and directorships then held with the
Company or any subsidiary or affiliate thereof.
7. Confidential Information. During and after the Period of
Employment, Executive shall not disclose to any person (other than an employee
or agent of the Company or any affiliate of the Company entitled to receive the
same) any confidential information relating to the business of the Company and
obtained by him while providing services to the Company, without the consent of
the Board, or until such information ceases to be confidential.
8. Non-Competition. In the event Executive's employment is terminated
by the Company for Cause or Executive terminates his employment with the Company
without Good Reason, Executive shall not, for a period ending on the earlier of
(i) 18 months from the date of such termination or (ii) December 31, 2000,
accept any other employment or engage, directly or indirectly, in any other
business activity which is competitive with that of the Company or any
subsidiary thereof.
9. Expenses. Executive is authorized to incur reasonable expenses in
carrying out his duties and responsibilities under this Agreement, including
expenses for travel and similar items related to such duties and
responsibilities. The Company will reimburse Executive for all such expenses
upon presentation by Executive from time to time of an itemized account of such
expenditures.
10. No Obligation to Mitigate Damages. Executive shall not be
required to mitigate damages or the amount of any payment provided for under
this Agreement by seeking (and no payment otherwise required hereunder shall be
reduced on account of) other employment or otherwise, nor will any payments
hereunder be subject to offset in respect of any claims which the Company may
have against Executive.
11. Notices. All notices or communications hereunder shall be in
writing, addressed as follows:
to Executive:
Thomas D. Cunningham
8 Nearwater Road
Rowayton, CT 06853
to Company:
Sheldon I. Cammaker, Esq.
Executive Vice President and General Counsel
Emcor Group, Inc.
101 Merritt Seven, 7th Floor
Norwalk, CT 06851
with a copy to:
Kenneth C. Edgar, Jr., Esq.
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, NY 10017
Any such notice or communication shall be delivered by hand or sent certified or
registered mail, return receipt requested, postage prepaid, addressed as above
(or to such other address as such party may designate in a notice duly delivered
as described above), and the actual date of delivery or mailing shall determine
the time at which notice was given.
12. Agreement to Perform Necessary Acts. Each party agrees to perform
any further acts and to execute and deliver any further documents that may be
reasonably necessary to carry out the provisions of this Agreement.
13. Separability; Legal Actions; Legal Fees. If any provision of this
Agreement shall be declared to be invalid or unenforceable, in whole or in part,
such invalidity or unenforceability shall not affect the remaining provisions
hereof, which shall remain in full force and effect. Any controversy or claim
arising out of or relating to this Agreement or the breach of this Agreement
that cannot be resolved by Executive and the Company, including any dispute as
to the calculation of Executive's benefits or any payments hereunder, shall be
submitted to arbitration in New York, New York in accordance with the laws of
the State of New York and the procedures of the American Arbitration
Association, except that if Executive institutes an action relating to this
Agreement, Executive may, at Executive's option, bring that action in any court
of competent jurisdiction. All expenses, including legal expenses incurred by
Executive, relating to any arbitration shall be paid by the Company. Judgment
may be entered on an arbitrator(s)' award in any court having jurisdiction.
14. Assignment. This contract shall be binding upon and inure to the
benefit of the heirs and representatives of Executive and the assigns and
successors of the Company, but neither this Agreement nor any rights hereunder
shall be assignable or otherwise subject to hypothecation by Executive (except
by will or by operation of the laws of intestate succession) or by the Company
(any such purported assignment by either shall be null and void), except that
the Company may assign this Agreement to any successor (whether by merger,
purchase or otherwise) to all or substantially all of the stock, assets or
business of the Company.
15. Amendment; Waiver. The Agreement may be amended at any time, but
only by mutual written agreement of the parties hereto. Any party may waive
compliance by the other party with any provision hereof, but only by an
instrument in writing executed by the party granting such waiver.
16. Entire Agreement. The terms of this Agreement are intended by the
parties to be the final expression of their agreement with respect to the
employment of Executive by the Company and may not be contradicted by evidence
of any prior or contemporaneous agreement. The parties further intend that this
Agreement shall constitute the complete and exclusive statement of its terms and
that no extrinsic evidence whatsoever may be introduced in any judicial,
administrative or other legal proceeding involving this Agreement.
17. Death or Incompetence. In the event of Executive's death or a
judicial determination of his incompetence, reference in this Agreement to
Executive shall be deemed, where appropriate, to refer to his estate or other
legal representative.
<PAGE>
18. Survivorship. The respective rights and obligations of the
parties hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations. The
provisions of this Section are in addition to the survivorship provisions of any
other section of this Agreement.
19. Governing Law. This Agreement shall be construed, interpreted,
and governed in accordance with the laws of the State of New York without
reference to rules relating to conflicts of law.
20. Withholdings. The Company shall be entitled
to withhold from payment any amount of withholding required
by law.
21. Counterparts. This Agreement may be executed
in two or more counterparts, each of which will be deemed an
original.
EMCOR GROUP, INC.
By:__________________________
EXECUTIVE
-----------------------------
Thomas D. Cunningham
Exhibit 10(e) EXECUTION COPY
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made as of this 1st day of January, 1998 by and between EMCOR
GROUP, INC. (the "Company") and KEVIN MATZ ("Executive").
RECITALS
In order to induce Executive to serve as Vice President and Treasurer
of the Company, the Company desires to provide Executive with compensation and
other benefits under the conditions set forth in this Agreement.
Executive is willing to accept such employment and perform services
for the Company and its subsidiaries, on the terms and conditions hereinafter
set forth.
It is therefore hereby agreed by and between the parties as follows:
1. Employment.
1.1 Subject to the terms and conditions of this Agreement, the
Company agrees to employ Executive during the Period of Employment (as
hereinafter defined) as a Vice President and Treasurer of the Company. In his
capacity as Vice President and Treasurer of the Company, Executive shall have
the customary powers, responsibilities and authorities of vice presidents and
treasurers of similar corporations of the size, type and nature of the Company
as it may exist from time to time, subject to the direction of the Chief
Financial Officer of the Company.
1.2 Subject to the terms and conditions hereof, Executive hereby
agrees to be employed as Vice President and Treasurer of the Company and shall
devote his full working time and efforts, to the best of his ability, experience
and talent, to the performance of the services, duties and responsibilities in
connection therewith. Except upon the prior written consent of the Chairman of
the Board of Directors (the "Board") of the Company ("Chairman"), Executive will
not during the Period of Employment (as hereinafter defined) (i) accept any
other employment or (ii) engage, directly or indirectly, in any other business
activity (whether or not pursued for pecuniary advantage), whether or not it may
be competitive with, or whether or not it might place him in a competing
position to that of, the Company or any subsidiary thereof. Nothing in this
Agreement shall preclude the Executive from (i) engaging, consistent with his
duties and responsibilities hereunder, in charitable community affairs, (ii)
managing his personal investments, (iii) continuing to serve on the boards of
directors on which he presently serves (to the extent such service is not
precluded by federal or state law or by conflict of interest by reason of his
position with the Company), or (iv) serving, subject to approval of the
Chairman, as a member of boards of directors of other companies, provided, that
such activities do not interfere with the performance of Executive's duties
hereunder.
2. Period of Employment. Executive's period of employment hereunder
shall commence on January 1, 1998 (the "Commencement Date") and shall continue
through the earlier of December 31, 2000 or the date of termination hereunder
(the "Period of Employment"); provided, however, that the Period of Employment
shall automatically be extended for successive one-year periods unless the
Company or Executive, at least six months prior to the end of such period,
provides written notice to the other party of intent not to extend the Period of
Employment. Notwithstanding anything in this Agreement to the contrary,
following a Change of Control (as defined in Section 6.1(e)) the Period of
Employment shall in no event be less than two years and three months.
3. Compensation.
3.1 Salary. The Company shall pay Executive a base salary ("Base
Salary") at the rate of $175,000 per annum for the Period of Employment. Base
Salary shall be payable in accordance with the ordinary payroll practices the
Company. Executive's rate of Base Salary shall be increased on the first day of
each calendar year occurring during the Period of Employment, beginning with
January 1, 1999, by the percentage increase for the prior year in the consumer
price index for the area in which the principal office of the Company is
located, as determined by the U.S. Department of Commerce, or the amount
specified by the Board, whichever is greater.
3.2 Bonus. In addition to his Base Salary, Executive shall be
entitled, while he remains employed hereunder, in respect of each calendar year,
to an annual bonus (the "Bonus") payable in cash and at such times as bonuses
are customarily paid to senior executives of the Company. For each calendar year
during the Period of Employment, the amount of the Bonus shall be determined by
the Compensation Committee of the Board of Directors in its sole discretion.
3.3 Stock Options. (a) During each calendar year in the Period of
Employment, the Company shall recommend to the Compensation Committee of the
Board that Executive shall receive an option ("Option") as of the first business
day of each calendar year to purchase not less than 5,000 shares of common stock
of the Company ("Shares") at fair market value pursuant to the Company's then
applicable stock option plan. Each such Option shall be exercisable with respect
to the Shares subject thereto on the first anniversary of the date of grant.
(b) In the event of Executive's termination of employment under
Section 6.1, each Option shall become immediately exercisable in full and shall
remain exercisable in accordance with the terms of the applicable stock option
plan.
4. Employee Benefits.
4.1 Employee Benefit Plans and Programs. The Company shall provide
Executive during the Period of Employment with coverage under any employee
benefit programs, plans and practices (commensurate with his position in the
Company) in accordance with the terms thereof, which the Company currently makes
available generally to its senior executive officers, or which the Company, with
Board approval, elects to make available generally to its senior executive
officers hereafter, including, but not limited to (a) retirement, pension and
profit-sharing; and (b) medical, dental, hospitalization, life insurance, short
and long-term disability, accidental death and dismemberment and travel accident
coverage; provided that Executive shall pay such portion of the premiums
therefor as is customarily paid by senior executives of the Company.
4.2 Vacation, Fringe and Other Benefits. Executive shall be entitled
to the number of vacation days customarily accorded senior executives of the
Company. In addition, during the Period of Employment, the Company shall pay
Executive $600 per month for leasing (plus maintenance and insurance) of an
automobile and shall make the initial capital cost reduction payment with
respect to the leasing of such automobile on Executive's behalf. The Company
shall also reimburse Executive for all initiation fees and monthly dues for
membership in a club suitable for entertaining clients of the Company. The
Company shall bear the cost of any increased tax liability of Executive caused
by payment of the capital cost reduction payment referred to in the second
sentence and by payment of the initiation fees referred to in the third sentence
of this Section 4.2.
5. Directors and Officers Liability. The Company shall keep in effect
during the Period of Employment, a policy of directors' and officers' liability
insurance for officers and directors of the Company to the extent reasonably
available, at such reasonable levels of coverage as are agreed to by Executive
and the Board from time to time.
6. Termination of Employment.
6.1 Termination Not For Cause or Resignation For Good Reason. (a) The
Company may terminate Executive's employment at any time, and Executive may
terminate his employment at any time. If Executive's employment is terminated by
the Company other than for Cause (as hereinafter defined), or Executive
terminates his employment for Good Reason (as hereinafter defined), Executive
shall be entitled to receive a lump sum cash payment (but not in substitution
for compensation already earned) in an amount equal to the sum of:
(i) the product of 1.5 times the sum of (i) Executive's Base Salary
at its current annual rate at the time of termination of employment plus (ii)
Executive's "Deemed Bonus" (as defined below) for the calendar year in which the
termination of employment occurs.
(ii) an amount equal to Executive's Bonus, for any calendar year
ending before such termination occurs, which would have been payable had
Executive remained in employment until the date such Bonus would otherwise have
been paid; and
(iii) an amount equal to Executive's Deemed Bonus for the calendar
year in which the termination of employment occurs, multiplied by a fraction,
the numerator of which is the number of days in such calendar year that
Executive was an employee of the Company, and the denominator of which is 365.
In event of termination of Executive's employment by the Company
other than for Cause or by Executive for Good Reason following a Change of
Control, the factor of 1.5 in subsection 6.1(a)(i) shall be increased to 2.25.
For purposes of subsections 6.1(a) (i) and (ii), 6.2(a) and 6.3, the
amount of the Deemed Bonus shall be the highest Bonus paid to Executive for any
year he has been employed by the Company.
(b) In addition to the amount described in subsections 6.1(a),
Executive shall be entitled to receive:
(i) until the earlier of December 31, 2000 or 18 months from the date
of termination, Executive (and, to the extent applicable, Executive's
dependents) shall continue to be covered, at the Company's expense, under the
Company's medical, dental and hospitalization coverage plans, and until the
earlier of December 31, 2000 or 6 months from the date of termination, Executive
shall continue to be covered, at the Company's expense, under the Company's
group life, short and long-term disability, accidental death and dismemberment
and travel accident coverage plans described in Section 4.1 hereof or the
Company will provide for equivalent coverage; and
(ii) all payments to which Executive has vested rights as of the
expiration of the Period of Employment under employee benefit, disability,
insurance and similar plans which provide for payments beyond the Period of
Employment.
(c) For purposes of this Agreement, "Good Reason" shall mean any of
the following (without Executive's express prior written consent):
(i) The assignment to Executive by the Company of duties
inconsistent with Executive's positions, duties, responsibilities, titles or
office as set forth in Section 1 hereof, or any reduction by the Company of his
duties or responsibilities or any removal of Executive from the position of Vice
President and Treasurer, except in connection with the termination of
Executive's employment (A) upon the termination of the Period of Employment on
December 31, 2000, (B) upon the termination of a succeeding one-year Period of
Employment (as provided for under Section 2 hereof), (C) for Cause, (D) as a
result of Executive's Permanent Disability (as hereinafter defined) or death or
(E) by Executive other than for Good Reason;
(ii) A reduction by the Company in Executive's Base Salary, except as
provided herein, as in effect at the commencement of employment hereunder or as
the same may be increased from time to time during the Period of Employment;
(iii) The failure by the Company to obtain the specific assumption of
this Agreement by any successor or assign of the Company or any person acquiring
substantially all of the Company's assets;
(iv) Failure by the Company to perform in any material respect its
obligations under this Agreement, where such failure shall not have been
remedied within 30 days after Executive shall have notified the Company in
writing thereof;
(v) Any material reduction in Executive's compensation or benefits
following a Change of Control or Executive's principal business location is
changed to a location more than 30 miles from Executive's principal business
location (other than a relocation to New York, New York) immediately prior to a
Change of Control; or
(vi) The Company shall cease to keep in effect the policy of
directors' and officers' liability insurance for Executive described in Section
5;
(vii) The termination of the Indemnity Agreement, effective as of
April 20, 1995, between the Executive and the Company.
(d) If all or any portion of the payments or benefits provided under
Section 6.1, either alone or together with other payments and benefits which
Executive receives or is then entitled to receive from the Company, would
constitute a "parachute payment" within the meaning Section 28OG of the Internal
Revenue Code of 1986, as amended ("Code"), Executive shall be entitled to such
additional payments as may be necessary to ensure that the net after tax benefit
of all payments under this Section 6.1, including the payment provided for in
this subsection 6.1(c) shall be equal to the net after tax benefit of Executive
as if no excise tax had been imposed under Section 4999 of the Code.
The foregoing calculations shall be made, at the Company's expense,
by the Company and Executive. If no agreement on the calculations is reached,
Executive and the Company shall agree to the selection of an accounting firm to
make the calculations. If no agreement can be reached regarding the selection of
an accounting firm, the Company shall select a nationally recognized accounting
firm which has no current or recent business relationship with the Company. The
determination of any such firm selected shall be conclusive and binding on all
parties.
(e) For purposes of this Agreement, a "Change of Control" shall be
deemed to have occurred when:
(i) any person or persons acting in concert (excluding Company
benefit plans) becomes the beneficial owner of securities of the Company
having at least 25% of the voting power of the Company's then outstanding
securities (unless the event causing the 25% threshold to be crossed is an
acquisition of voting common securities directly from the Company, other
than upon the conversion of convertible debt securities or other
securities and/or the exercise of options or warrants); or
(ii) the shareholders of the Company shall approve any merger or
other business combination of the Company, sale or lease of the Company's
assets or combination of the foregoing transactions (the "Transactions")
other than a Transaction immediately following which the shareholders of
the Company and any trustee or fiduciary of any Company employee benefit
plan immediately prior to the Transaction own at least 65% of the voting
power, directly or indirectly, of (A) the surviving corporation in any
such merger or other business combination; (B) the purchaser or lessee of
the Company's assets; or (C) both the surviving corporation and the
purchaser or lessee in the event of any combination of Transactions; or
(iii) within any 24 month period, the persons who were directors
immediately before the beginning of such period (the "Incumbent
Directors") shall cease (for any reason other than death) to constitute at
least a majority of the Board or the board of directors of a successor to
the Company. For this purpose, any director who was not a director at the
beginning of such period shall be deemed to be an Incumbent Director if
such director was elected to the Board by, or on the recommendation of or
with the approval of, at least two-thirds of the directors who then
qualified as Incumbent Directors (so long as such director was not
nominated by a person who has expressed an intent to effect a Change of
Control or engage in a proxy or other control contest).
(f) All cash payments under this Section 6.1 shall be made by the
Company within 30 calendar days following the event giving rise to such
payments.
6.2 Permanent Disability. If as a result of the Executive's
incapacity due to physical or mental illness, the Executive shall have been
absent from his duties with the Company on a full-time basis for six consecutive
months (a "Permanent Disability") during his Period of Employment, the Company
or Executive may terminate his employment on written notice thereof, the Period
of Employment shall terminate on the giving of such notice, and the compensation
to which Executive is entitled pursuant to Section 3.1 shall be paid through the
last day of the month in which the notice is given. In addition, Executive shall
be entitled to receive:
(a) all unpaid amounts, as of the date of such termination, in
respect of any Bonus for any calendar year ending before the calendar year in
which such termination occurs, which would have been payable had Executive
remained in employment until the date such Bonus would otherwise have been paid,
plus Executive's Deemed Bonus for the calendar year in which his employment
terminates, multiplied by a fraction, the numerator of which is the number of
days in such calendar year the Executive was an employee of the Company, and the
denominator of which is 365;
(b) until the earlier of December 31, 2000 or 24 months from the date
of termination for Permanent Disability, Executive (and, to the extent
applicable, Executive's dependents) shall continue to be covered, at the
Company's expense, under Company's medical, dental, hospitalization, group life,
short and long-term disability, accidental death and dismemberment and travel
accident coverage plans described in Section 4.1 or the Company will provide for
equivalent coverage; provided that if Executive is provided with comparable
coverage by a successor employer any such coverage by the Company shall cease;
and
(c) all amounts payable under the Company's disability plans.
6.3 Death. In the event of Executive's death while employed
hereunder, the Period of Employment shall thereupon automatically terminate and
the Executive's estate or designated beneficiaries shall receive (i) payments of
Base Salary for a period of three months after the date of death; (ii) all
unpaid amounts, as of the date of such termination, in respect of any Bonus for
any calendar year ending before the calendar year in which such termination
occurs, which would have been payable had Executive remained in employment until
the date such Bonus would otherwise have been paid, plus Executive's Deemed
Bonus for the calendar year in which his employment terminates, multiplied by a
fraction, the numerator of which is the number of days in such calendar year the
Executive was an employee of the Company, and the denominator of which is 365;
and (iii) any death benefits provided under the employee benefit programs, in
accordance with their terms.
6.4 Voluntary Resignation; Discharge for Cause. If Executive resigns
voluntarily, other than for Good Reason or Permanent Disability, or the Company
terminates the employment of Executive at any time for Cause, the Company's
obligations under this Agreement to make any further payments to Executive shall
thereupon, to the extent permitted by law, cease and terminate except with
respect to all unpaid amounts, as of the date of such termination, in respect of
any Bonus for any calendar year ending before such termination occurs, which
would have been payable had Executive remained in employment until the date such
Bonus would otherwise have been paid. In addition, Executive shall remain
entitled to all vested amounts and benefits under the Company's employee benefit
programs, plans and practices. The term "Cause" shall be limited to (a) action
by Executive involving willful malfeasance in connection with his employment
which results in material harm to the Company, (b) material and continuing
breach by Executive of the terms of this Agreement which breach is not cured
within 60 days after Executive receives written notice from the Company of any
such breach or (c) Executive being convicted of a felony.
6.5 Termination Obligations. (a) Executive hereby acknowledges and
agrees that all personal property, including, without limitation, all books,
manuals, records, reports, notes, contracts, lists, and other documents, and
equipment furnished to or prepared by Executive in the course of or incident to
his employment, belong to the Company and shall be promptly returned to the
Company upon termination of the Period of Employment.
(b) Upon termination of the Period of Employment, the Executive shall
be deemed to have resigned from all offices and directorships then held with the
Company or any subsidiary or affiliate thereof.
7. Confidential Information. During and after the Period of
Employment, Executive shall not disclose to any person (other than an employee
or agent of the Company or any affiliate of the Company entitled to receive the
same) any confidential information relating to the business of the Company and
obtained by him while providing services to the Company, without the consent of
the Board, or until such information ceases to be confidential.
8. Non-Competition. In the event Executive's employment is terminated
by the Company for Cause or Executive terminates his employment with the Company
without Good Reason, Executive shall not, for a period ending on the earlier of
(i) 18 months from the date of such termination or (ii) December 31, 2000,
accept any other employment or engage, directly or indirectly, in any other
business activity which is competitive with that of the Company or any
subsidiary thereof.
9. Expenses. Executive is authorized to incur reasonable expenses in
carrying out his duties and responsibilities under this Agreement, including
expenses for travel and similar items related to such duties and
responsibilities. The Company will reimburse Executive for all such expenses
upon presentation by Executive from time to time of an itemized account of such
expenditures.
10. No Obligation to Mitigate Damages. Executive shall not be
required to mitigate damages or the amount of any payment provided for under
this Agreement by seeking (and no payment otherwise required hereunder shall be
reduced on account of) other employment or otherwise, nor will any payments
hereunder be subject to offset in respect of any claims which the Company may
have against Executive.
11. Notices. All notices or communications hereunder shall be in
writing, addressed as follows:
to Executive:
Kevin Matz
80 Silver Spring Road
Ridgefield, CT 06877
to Company:
Sheldon I. Cammaker, Esq.
Executive Vice President and General Counsel
Emcor Group, Inc.
101 Merritt Seven, 7th Floor
Norwalk, CT 06851
with a copy to:
Kenneth C. Edgar, Jr., Esq.
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, NY 10017
Any such notice or communication shall be delivered by hand or sent certified or
registered mail, return receipt requested, postage prepaid, addressed as above
(or to such other address as such party may designate in a notice duly delivered
as described above), and the actual date of delivery or mailing shall determine
the time at which notice was given.
12. Agreement to Perform Necessary Acts. Each party agrees to perform
any further acts and to execute and deliver any further documents that may be
reasonably necessary to carry out the provisions of this Agreement.
13. Separability; Legal Actions. If any provision of this Agreement
shall be declared to be invalid or unenforceable, in whole or in part, such
invalidity or unenforceability shall not affect the remaining provisions hereof,
which shall remain in full force and effect. Any controversy or claim arising
out of or relating to this Agreement or the breach of this Agreement that cannot
be resolved by Executive and the Company, including any dispute as to the
calculation of Executive's benefits or any payments hereunder, shall be
submitted to arbitration in New York, New York in accordance with the laws of
the State of New York and the procedures of the American Arbitration
Association, except that if Executive institutes an action relating to this
Agreement, Executive may, at Executive's option, bring that action in any court
of competent jurisdiction. All expenses, including legal expenses incurred by
the Executive, relating to any arbitration shall be paid by the Company.
Judgment may be entered on an arbitrator(s)' award in any court having
jurisdiction.
14. Assignment. This contract shall be binding upon and inure to the
benefit of the heirs and representatives of Executive and the assigns and
successors of the Company, but neither this Agreement nor any rights hereunder
shall be assignable or otherwise subject to hypothecation by Executive (except
by will or by operation of the laws of intestate succession) or by the Company
(any such purported assignment by either shall be null and void), except that
the Company may assign this Agreement to any successor (whether by merger,
purchase or otherwise) to all or substantially all of the stock, assets or
business of the Company.
15. Amendment; Waiver. The Agreement may be amended at any time, but
only by mutual written agreement of the parties hereto. Any party may waive
compliance by the other party with any provision hereof, but only by an
instrument in writing executed by the party granting such waiver.
16. Entire Agreement. The terms of this Agreement are intended by the
parties to be the final expression of their agreement with respect to the
employment of Executive by the Company and may not be contradicted by evidence
of any prior or contemporaneous agreement. The parties further intend that this
Agreement shall constitute the complete and exclusive statement of its terms and
that no extrinsic evidence whatsoever may be introduced in any judicial,
administrative or other legal proceeding involving this Agreement.
17. Death or Incompetence. In the event of Executive's death or a
judicial determination of his incompetence, reference in this Agreement to
Executive shall be deemed, where appropriate, to refer to his estate or other
legal representative.
<PAGE>
18. Survivorship. The respective rights and obligations of the
parties hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations. The
provisions of this Section are in addition to the survivorship provisions of any
other section of this Agreement.
19. Governing Law. This Agreement shall be construed, interpreted,
and governed in accordance with the laws of the State of New York without
reference to rules relating to conflicts of law.
20. Withholdings. The Company shall be entitled
to withhold from payment any amount of withholding required
by law.
21. Counterparts. This Agreement may be executed
in two or more counterparts, each of which will be deemed an
original.
EMCOR GROUP, INC.
By:__________________________
EXECUTIVE
-----------------------------
Kevin Matz
Exhibit 10(f) EXECUTION COPY
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made as of this 1st day of January, 1998 by and
between EMCOR GROUP, INC. (the "Company") and MARK POMPA ("Executive").
RECITALS
In order to induce Executive to serve as Vice President and
Controller of the Company, the Company desires to provide Executive with
compensation and other benefits under the conditions set forth in this
Agreement.
Executive is willing to accept such employment and perform services
for the Company and its subsidiaries, on the terms and conditions hereinafter
set forth.
It is therefore hereby agreed by and between the parties as follows:
<PAGE>
1. Employment.
1.1 Subject to the terms and conditions of this Agreement, the
Company agrees to employ Executive during the Period of Employment (as
hereinafter defined) as a Vice President and Controller of the Company. In his
capacity as Vice President and Controller of the Company, Executive shall have
the customary powers, responsibilities and authorities of vice presidents and
controllers of similar corporations of the size, type and nature of the Company
as it may exist from time to time, subject to the direction of the Chief
Financial Officer of the Company.
1.2 Subject to the terms and conditions hereof, Executive hereby
agrees to be employed as Vice President and Controller of the Company and shall
devote his full working time and efforts, to the best of his ability, experience
and talent, to the performance of the services, duties and responsibilities in
connection therewith. Except upon the prior written consent of the Chairman of
the Board of Directors (the "Board") of the Company ("Chairman"), Executive will
not during the Period of Employment (as hereinafter defined) (i) accept any
other employment or (ii) engage, directly or indirectly, in any other business
activity (whether or not pursued for pecuniary advantage), whether or not it may
be competitive with, or whether or not it might place him in a competing
position to that of, the Company or any subsidiary thereof. Nothing in this
Agreement shall preclude the Executive from (i) engaging, consistent with his
duties and responsibilities hereunder, in charitable community affairs, (ii)
managing his personal investments, (iii) continuing to serve on the boards of
directors on which he presently serves (to the extent such service is not
precluded by federal or state law or by conflict of interest by reason of his
position with the Company), or (iv) serving, subject to approval of the
Chairman, as a member of boards of directors of other companies, provided, that
such activities do not interfere with the performance of Executive's duties
hereunder.
2. Period of Employment. Executive's period of employment hereunder
shall commence on January 1, 1998 (the "Commencement Date") and shall continue
through the earlier of December 31, 2000 or the date of termination hereunder
(the "Period of Employment"); provided, however, that the Period of Employment
shall automatically be extended for successive one-year periods unless the
Company or Executive, at least six months prior to the end of such period,
provides written notice to the other party of intent not to extend the Period of
Employment. Notwithstanding anything in this Agreement to the contrary,
following a Change of Control (as defined in Section 6.1(e)) the Period of
Employment shall in no event be less than two years and three months.
3. Compensation.
3.1 Salary. The Company shall pay Executive a base salary ("Base
Salary") at the rate of $175,000 per annum for the Period of Employment. Base
Salary shall be payable in accordance with the ordinary payroll practices the
Company. Executive's rate of Base Salary shall be increased on the first day of
each calendar year occurring during the Period of Employment, beginning with
January 1, 1999, by the percentage increase for the prior year in the consumer
price index for the area in which the principal office of the Company is
located, as determined by the U.S. Department of Commerce, or the amount
specified by the Board, whichever is greater.
3.2 Bonus. In addition to his Base Salary, Executive shall be
entitled, while he remains employed hereunder, in respect of each calendar year,
to an annual bonus (the "Bonus") payable in cash and at such times as bonuses
are customarily paid to senior executives of the Company. For each calendar year
during the Period of Employment, the amount of the Bonus shall be determined by
the Compensation Committee of the Board of Directors in its sole discretion.
3.3 Stock Options. (a) During each calendar year in the Period of
Employment, the Company shall recommend to the Compensation Committee of the
Board that Executive shall receive an option ("Option") as of the first business
day of each calendar year to purchase not less than 5,000 shares of common stock
of the Company ("Shares") at fair market value pursuant to the Company's then
applicable stock option plan. Each such Option shall be exercisable with respect
to the Shares subject thereto on the first anniversary of the date of grant.
(b) In the event of Executive's termination of employment under
Section 6.1, each Option shall become immediately exercisable in full and shall
remain exercisable in accordance with the terms of the applicable stock option
plan.
4. Employee Benefits.
4.1 Employee Benefit Plans and Programs. The Company shall provide
Executive during the Period of Employment with coverage under any employee
benefit programs, plans and practices (commensurate with his position in the
Company) in accordance with the terms thereof, which the Company currently makes
available generally to its senior executive officers, or which the Company, with
Board approval, elects to make available generally to its senior executive
officers hereafter, including, but not limited to (a) retirement, pension and
profit-sharing; and (b) medical, dental, hospitalization, life insurance, short
and long-term disability, accidental death and dismemberment and travel accident
coverage; provided that Executive shall pay such portion of the premiums
therefor as is customarily paid by senior executives of the Company.
4.2 Vacation, Fringe and Other Benefits. Executive shall be entitled
to the number of vacation days customarily accorded senior executives of the
Company. In addition, during the Period of Employment, the Company shall pay
Executive $600 per month for leasing (plus maintenance and insurance) of an
automobile and shall make the initial capital cost reduction payment with
respect to the leasing of such automobile on Executive's behalf. The Company
shall also reimburse Executive for all initiation fees and monthly dues for
membership in a club suitable for entertaining clients of the Company. The
Company shall bear the cost of any increased tax liability of Executive caused
by payment of the capital cost reduction payment referred to in the second
sentence and by payment of the initiation fees referred to in the third sentence
of this Section 4.2.
5. Directors and Officers Liability. The Company shall keep in effect
during the Period of Employment, a policy of directors' and officers' liability
insurance for officers and directors of the Company to the extent reasonably
available, at such reasonable levels of coverage as are agreed to by Executive
and the Board from time to time.
6. Termination of Employment.
6.1 Termination Not For Cause or Resignation For Good Reason. (a) The
Company may terminate Executive's employment at any time, and Executive may
terminate his employment at any time. If Executive's employment is terminated by
the Company other than for Cause (as hereinafter defined), or Executive
terminates his employment for Good Reason (as hereinafter defined), Executive
shall be entitled to receive a lump sum cash payment (but not in substitution
for compensation already earned) in an amount equal to the sum of:
(i) the product of 1.5 times the sum of (i) Executive's Base Salary
at its current annual rate at the time of termination of employment plus (ii)
Executive's "Deemed Bonus" (as defined below) for the calendar year in which the
termination of employment occurs.
(ii) an amount equal to Executive's Bonus, for any calendar year
ending before such termination occurs, which would have been payable had
Executive remained in employment until the date such Bonus would otherwise have
been paid; and
(iii) an amount equal to Executive's Deemed Bonus for the calendar
year in which the termination of employment occurs, multiplied by a fraction,
the numerator of which is the number of days in such calendar year that
Executive was an employee of the Company, and the denominator of which is 365.
In event of termination of Executive's employment by the Company
other than for Cause or by Executive for Good Reason following a Change of
Control, the factor of 1.5 in subsection 6.1(a)(i) shall be increased to 2.25.
For purposes of subsections 6.1(a) (i) and (ii), 6.2(a) and 6.3, the
amount of the Deemed Bonus shall be the highest Bonus paid to Executive for any
year he has been employed by the Company.
(b) In addition to the amount described in subsections 6.1(a),
Executive shall be entitled to receive:
(i) until the earlier of December 31, 2000 or 18 months from the date
of termination, Executive (and, to the extent applicable, Executive's
dependents) shall continue to be covered, at the Company's expense, under the
Company's medical, dental and hospitalization coverage plans, and until the
earlier of December 31, 2000 or 6 months from the date of termination, Executive
shall continue to be covered, at the Company's expense, under the Company's
group life, short and long-term disability, accidental death and dismemberment
and travel accident coverage plans described in Section 4.1 hereof or the
Company will provide for equivalent coverage; and
(ii) all payments to which Executive has vested rights as of the
expiration of the Period of Employment under employee benefit, disability,
insurance and similar plans which provide for payments beyond the Period of
Employment.
(c) For purposes of this Agreement, "Good Reason" shall mean any of
the following (without Executive's express prior written consent):
(i) The assignment to Executive by the Company of duties
inconsistent with Executive's positions, duties, responsibilities, titles or
office as set forth in Section 1 hereof, or any reduction by the Company of his
duties or responsibilities or any removal of Executive from the position of Vice
President and Controller, except in connection with the termination of
Executive's employment (A) upon the termination of the Period of Employment on
December 31, 2000, (B) upon the termination of a succeeding one-year Period of
Employment (as provided for under Section 2 hereof), (C) for Cause, (D) as a
result of Executive's Permanent Disability (as hereinafter defined) or death or
(E) by Executive other than for Good Reason;
(ii) A reduction by the Company in Executive's Base Salary, except as
provided herein, as in effect at the commencement of employment hereunder or as
the same may be increased from time to time during the Period of Employment;
(iii) The failure by the Company to obtain the specific assumption of
this Agreement by any successor or assign of the Company or any person acquiring
substantially all of the Company's assets;
(iv) Failure by the Company to perform in any material respect its
obligations under this Agreement, where such failure shall not have been
remedied within 30 days after Executive shall have notified the Company in
writing thereof;
(v) Any material reduction in Executive's compensation or benefits
following a Change of Control or Executive's principal business location is
changed to a location more than 30 miles from Executive's principal business
location (other than a relocation to New York, New York) immediately prior to a
Change of Control; or
(vi) The Company shall cease to keep in effect the policy of
directors' and officers' liability insurance for Executive described in Section
5;
(vii) The termination of the Indemnity Agreement, effective as of
April 20, 1995, between the Executive and the Company.
(d) If all or any portion of the payments or benefits provided under
Section 6.1, either alone or together with other payments and benefits which
Executive receives or is then entitled to receive from the Company, would
constitute a "parachute payment" within the meaning Section 28OG of the Internal
Revenue Code of 1986, as amended ("Code"), Executive shall be entitled to such
additional payments as may be necessary to ensure that the net after tax benefit
of all payments under this Section 6.1, including the payment provided for in
this subsection 6.1(c) shall be equal to the net after tax benefit of Executive
as if no excise tax had been imposed under Section 4999 of the Code.
The foregoing calculations shall be made, at the Company's expense,
by the Company and Executive. If no agreement on the calculations is reached,
Executive and the Company shall agree to the selection of an accounting firm to
make the calculations. If no agreement can be reached regarding the selection of
an accounting firm, the Company shall select a nationally recognized accounting
firm which has no current or recent business relationship with the Company. The
determination of any such firm selected shall be conclusive and binding on all
parties.
(e) For purposes of this Agreement, a "Change of Control" shall be
deemed to have occurred when:
(i) any person or persons acting in concert (excluding Company
benefit plans) becomes the beneficial owner of securities of the Company
having at least 25% of the voting power of the Company's then outstanding
securities (unless the event causing the 25% threshold to be crossed is an
acquisition of voting common securities directly from the Company, other
than upon the conversion of convertible debt securities or other
securities and/or the exercise of options or warrants); or
(ii) the shareholders of the Company shall approve any merger or
other business combination of the Company, sale or lease of the Company's
assets or combination of the foregoing transactions (the "Transactions")
other than a Transaction immediately following which the shareholders of
the Company and any trustee or fiduciary of any Company employee benefit
plan immediately prior to the Transaction own at least 65% of the voting
power, directly or indirectly, of (A) the surviving corporation in any
such merger or other business combination; (B) the purchaser or lessee of
the Company's assets; or (C) both the surviving corporation and the
purchaser or lessee in the event of any combination of Transactions; or
(iii) within any 24 month period, the persons who were directors
immediately before the beginning of such period (the "Incumbent
Directors") shall cease (for any reason other than death) to constitute at
least a majority of the Board or the board of directors of a successor to
the Company. For this purpose, any director who was not a director at the
beginning of such period shall be deemed to be an Incumbent Director if
such director was elected to the Board by, or on the recommendation of or
with the approval of, at least two-thirds of the directors who then
qualified as Incumbent Directors (so long as such director was not
nominated by a person who has expressed an intent to effect a Change of
Control or engage in a proxy or other control contest).
(f) All cash payments under this Section 6.1 shall be made by the
Company within 30 calendar days following the event giving rise to such
payments.
6.2 Permanent Disability. If as a result of the Executive's
incapacity due to physical or mental illness, the Executive shall have been
absent from his duties with the Company on a full-time basis for six consecutive
months (a "Permanent Disability") during his Period of Employment, the Company
or Executive may terminate his employment on written notice thereof, the Period
of Employment shall terminate on the giving of such notice, and the compensation
to which Executive is entitled pursuant to Section 3.1 shall be paid through the
last day of the month in which the notice is given. In addition, Executive shall
be entitled to receive:
(a) all unpaid amounts, as of the date of such termination, in
respect of any Bonus for any calendar year ending before the calendar year in
which such termination occurs, which would have been payable had Executive
remained in employment until the date such Bonus would otherwise have been paid,
plus Executive's Deemed Bonus for the calendar year in which his employment
terminates, multiplied by a fraction, the numerator of which is the number of
days in such calendar year the Executive was an employee of the Company, and the
denominator of which is 365;
(b) until the earlier of December 31, 2000 or 24 months from the date
of termination for Permanent Disability, Executive (and, to the extent
applicable, Executive's dependents) shall continue to be covered, at the
Company's expense, under Company's medical, dental, hospitalization, group life,
short and long-term disability, accidental death and dismemberment and travel
accident coverage plans described in Section 4.1 or the Company will provide for
equivalent coverage; provided that if Executive is provided with comparable
coverage by a successor employer any such coverage by the Company shall cease;
and
(c) all amounts payable under the Company's disability plans.
6.3 Death. In the event of Executive's death while employed
hereunder, the Period of Employment shall thereupon automatically terminate and
the Executive's estate or designated beneficiaries shall receive (i) payments of
Base Salary for a period of three months after the date of death; (ii) all
unpaid amounts, as of the date of such termination, in respect of any Bonus for
any calendar year ending before the calendar year in which such termination
occurs, which would have been payable had Executive remained in employment until
the date such Bonus would otherwise have been paid, plus Executive's Deemed
Bonus for the calendar year in which his employment terminates, multiplied by a
fraction, the numerator of which is the number of days in such calendar year the
Executive was an employee of the Company, and the denominator of which is 365;
and (iii) any death benefits provided under the employee benefit programs, in
accordance with their terms.
6.4 Voluntary Resignation; Discharge for Cause. If Executive resigns
voluntarily, other than for Good Reason or Permanent Disability, or the Company
terminates the employment of Executive at any time for Cause, the Company's
obligations under this Agreement to make any further payments to Executive shall
thereupon, to the extent permitted by law, cease and terminate except with
respect to all unpaid amounts, as of the date of such termination, in respect of
any Bonus for any calendar year ending before such termination occurs, which
would have been payable had Executive remained in employment until the date such
Bonus would otherwise have been paid. In addition, Executive shall remain
entitled to all vested amounts and benefits under the Company's employee benefit
programs, plans and practices. The term "Cause" shall be limited to (a) action
by Executive involving willful malfeasance in connection with his employment
which results in material harm to the Company, (b) material and continuing
breach by Executive of the terms of this Agreement which breach is not cured
within 60 days after Executive receives written notice from the Company of any
such breach or (c) Executive being convicted of a felony.
6.5 Termination Obligations. (a) Executive hereby acknowledges and
agrees that all personal property, including, without limitation, all books,
manuals, records, reports, notes, contracts, lists, and other documents, and
equipment furnished to or prepared by Executive in the course of or incident to
his employment, belong to the Company and shall be promptly returned to the
Company upon termination of the Period of Employment.
(b) Upon termination of the Period of Employment, the Executive shall
be deemed to have resigned from all offices and directorships then held with the
Company or any subsidiary or affiliate thereof.
7. Confidential Information. During and after the Period of
Employment, Executive shall not disclose to any person (other than an employee
or agent of the Company or any affiliate of the Company entitled to receive the
same) any confidential information relating to the business of the Company and
obtained by him while providing services to the Company, without the consent of
the Board, or until such information ceases to be confidential.
8. Non-Competition. In the event Executive's employment is terminated
by the Company for Cause or Executive terminates his employment with the Company
without Good Reason, Executive shall not, for a period ending on the earlier of
(i) 18 months from the date of such termination or (ii) December 31, 2000,
accept any other employment or engage, directly or indirectly, in any other
business activity which is competitive with that of the Company or any
subsidiary thereof.
9. Expenses. Executive is authorized to incur reasonable expenses in
carrying out his duties and responsibilities under this Agreement, including
expenses for travel and similar items related to such duties and
responsibilities. The Company will reimburse Executive for all such expenses
upon presentation by Executive from time to time of an itemized account of such
expenditures.
10. No Obligation to Mitigate Damages. Executive shall not be
required to mitigate damages or the amount of any payment provided for under
this Agreement by seeking (and no payment otherwise required hereunder shall be
reduced on account of) other employment or otherwise, nor will any payments
hereunder be subject to offset in respect of any claims which the Company may
have against Executive.
11. Notices. All notices or communications hereunder shall be in
writing, addressed as follows:
to Executive:
Mark Pompa
36 Rachelle Avenue
Stamford, CT 06905
to Company:
Sheldon I. Cammaker, Esq.
Executive Vice President and General Counsel
Emcor Group, Inc.
101 Merritt Seven, 7th Floor
Norwalk, CT 06851
with a copy to:
Kenneth C. Edgar, Jr., Esq.
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, NY 10017
Any such notice or communication shall be delivered by hand or sent certified or
registered mail, return receipt requested, postage prepaid, addressed as above
(or to such other address as such party may designate in a notice duly delivered
as described above), and the actual date of delivery or mailing shall determine
the time at which notice was given.
12. Agreement to Perform Necessary Acts. Each party agrees to perform
any further acts and to execute and deliver any further documents that may be
reasonably necessary to carry out the provisions of this Agreement.
13. Separability; Legal Actions. If any provision of this Agreement
shall be declared to be invalid or unenforceable, in whole or in part, such
invalidity or unenforceability shall not affect the remaining provisions hereof,
which shall remain in full force and effect. Any controversy or claim arising
out of or relating to this Agreement or the breach of this Agreement that cannot
be resolved by Executive and the Company, including any dispute as to the
calculation of Executive's benefits or any payments hereunder, shall be
submitted to arbitration in New York, New York in accordance with the laws of
the State of New York and the procedures of the American Arbitration
Association, except that if Executive institutes an action relating to this
Agreement, Executive may, at Executive's option, bring that action in any court
of competent jurisdiction. All expenses, including legal expenses incurred by
the Executive, relating to any arbitration shall be paid by the Company.
Judgment may be entered on an arbitrator(s)' award in any court having
jurisdiction.
14. Assignment. This contract shall be binding upon and inure to the
benefit of the heirs and representatives of Executive and the assigns and
successors of the Company, but neither this Agreement nor any rights hereunder
shall be assignable or otherwise subject to hypothecation by Executive (except
by will or by operation of the laws of intestate succession) or by the Company
(any such purported assignment by either shall be null and void), except that
the Company may assign this Agreement to any successor (whether by merger,
purchase or otherwise) to all or substantially all of the stock, assets or
business of the Company.
15. Amendment; Waiver. The Agreement may be amended at any time, but
only by mutual written agreement of the parties hereto. Any party may waive
compliance by the other party with any provision hereof, but only by an
instrument in writing executed by the party granting such waiver.
16. Entire Agreement. The terms of this Agreement are intended by the
parties to be the final expression of their agreement with respect to the
employment of Executive by the Company and may not be contradicted by evidence
of any prior or contemporaneous agreement. The parties further intend that this
Agreement shall constitute the complete and exclusive statement of its terms and
that no extrinsic evidence whatsoever may be introduced in any judicial,
administrative or other legal proceeding involving this Agreement.
17. Death or Incompetence. In the event of Executive's death or a
judicial determination of his incompetence, reference in this Agreement to
Executive shall be deemed, where appropriate, to refer to his estate or other
legal representative.
<PAGE>
18. Survivorship. The respective rights and obligations of the
parties hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations. The
provisions of this Section are in addition to the survivorship provisions of any
other section of this Agreement.
19. Governing Law. This Agreement shall be construed, interpreted,
and governed in accordance with the laws of the State of New York without
reference to rules relating to conflicts of law.
20. Withholdings. The Company shall be entitled to withhold from
payment any amount of withholding required by law.
21. Counterparts. This Agreement may be executed in
two or more counterparts, each of which will be deemed an
original.
EMCOR GROUP, INC.
By:__________________________
EXECUTIVE
-----------------------------
Mark Pompa
Exhibit 10(g)
As of January 1, 1998
Mr. Sheldon I. Cammaker
29 Lambert Road
White Plains, New York 10605
Dear Shelly:
This shall confirm our agreement that the employment agreement (the
"Original Employment Agreement") between you (the "Executive") and EMCOR Group,
Inc. (the "Company") dated as of September 14, 1987, as amended by letter dated
March 15, 1989 (the "Letter") (collectively, the "Employment Agreement") shall
be modified so that the following provisions shall supersede the provisions of
Section 9 of the Original Employment Agreement and Section 2 of the Letter with
respect to your employment during the period ending January 31, 1999 (the
"Period of Employment").
1. Termination Not For Cause or Resignation for Good Reason. (a) If Executive's
employment is terminated by the Company other than for Cause (as hereinafter
defined), or Executive terminates his employment for Good Reason (as hereinafter
defined), Executive shall be entitled to receive a lump sum cash payment (but
not in substitution for compensation already earned) in an amount equal to the
sum of:
(i) the product of two times the sum of (A) Executive's base salary ("Base
Salary") at its current annual rate at the time of termination of employment
plus (B) Executive's "Deemed Bonus" (as defined below) for the calendar year in
which the termination of employment occurs;
(ii) an amount equal to Executive's annual bonus (the "Bonus"), for any
calendar year ending before such termination occurs, which would have been
payable had Executive remained in employment until the date such Bonus would
otherwise have been paid; and
(iii) an amount equal to Executive's Deemed Bonus for the calendar year in
which the termination of employment occurs, multiplied by a fraction, the
numerator of which is the number of days in such calendar year that Executive
was an employee of the Company, and the denominator of which is 365.
In the event of a termination of Executive's employment by the Company
other than for Cause or by the Executive for Good Reason following a Change of
Control, the factor of two in subsection 1 (a) (i) shall be increased to three.
For purposes of subsections 1 (a) (i) and (ii), 2 (a) and 3, the amount of
the Deemed Bonus shall be the highest Bonus paid to Executive for any year he
has been employed by the Company.
(b) In addition to the amount described in subsection 1 (a), Executive
shall be entitled to receive:
(i) until January 31, 1999, Executive (and, to the extent applicable,
Executive's dependents) shall continue to be covered, at the Company's expense,
under the Company's medical, dental and hospitalization coverage plans, and
until the earlier of January 31, 1999 or 6 months from the date of termination
Executive shall continue to be covered, at the Company's expense, under the
Company's group life, short and long-term disability, accidental death and
dismemberment and travel accident coverage plans or the Company will provide,
for equivalent coverage; and
(ii) all payments to which Executive has vested rights as of the
expiration of the Period of Employment under employee benefit, disability,
insurance and similar plans which provide for payments beyond the Period of
Employment.
(c) For purposes of this letter agreement, "Good Reason" shall mean any of
the following (without Executive's express prior written consent):
(i) The assignment to Executive by the Company of duties inconsistent with
Executive's positions, duties, responsibilities, titles or office or any
reduction by the Company of his duties or responsibilities or any removal of
Executive from the position of Executive Vice President and General Counsel,
except in connection with the termination of Executive's employment (A) upon the
termination of the Period of Employment on January 31, 1999, (B) for Cause, (C)
as a result of Executive's Permanent Disability (as hereinafter defined) or
death or (D) by Executive other than for Good Reason;
(ii) A reduction by the Company in Executive's Base Salary, except as
provided herein, as in effect at the commencement of employment hereunder or as
the same may be increased from time to time during the Period of Employment;
(iii) The failure by the Company to obtain the specific assumption of this
letter agreement by any successor or assign of the Company or any person
acquiring substantially all of the Company's assets;
(iv) Failure by the Company to perform in any material respect its
obligations under the Employment Agreement, including this letter agreement,
where such failure shall not have been remedied within 30 days after Executive
shall have notified the Company in writing thereof;
(v) Any material reduction in Executive's compensation or benefits
following a Change of Control or Executive's principal business location is
changed to a location more than 30 miles from Executive's principal business
location (other than a relocation to New York, New York) immediately prior to a
Change of Control; or
(vi) The Company shall cease to keep in effect during and after the Period
of Employment a policy of directors' and officers' liability insurance for
officers and directors of the Company at such reasonable amount of coverage as
is agreed to by Executive and the board of directors of the Company (the
"Board") from time to time and which insurance policy shall be on a claims-made
basis.
(vii) The termination of the Indemnity Agreement, effective as of April
20, 1995 between the Executive and the Company.
(d) If all or any portion of the payments or benefits provided under
Section 1, either alone or together with other payments and benefits which
Executive receives or is then entitled to receive from the Company, would
constitute a "parachute payment" within the meaning Section 28OG of the Internal
Revenue Code of 1986, as amended ("Code"), Executive shall be entitled to such
additional payments as may be necessary to ensure that the net after tax benefit
of all payments under this Section 1, including the payment provided for in this
subsection 1 (c) shall be equal to the net after tax benefit of Executive as if
no excise tax had been imposed under Section 4999 of the Code.
The foregoing calculations shall be made, at the Company's expense, by the
Company and Executive. If no agreement on the calculations is reached, Executive
and the Company shall agree to the selection of an accounting firm to make the
calculations. If no agreement can be reached regarding the selection of an
accounting firm, the Company shall select a nationally recognized accounting
firm which has no current or recent business relationship with the Company. The
determination of any such firm selected shall be conclusive and binding on all
parties.
(e) For purposes of this letter agreement, a "Change of. Control" shall be
deemed to have occurred when:
(i) any person or persons acting in concert (excluding Company benefit
plans) becomes the beneficial owner of securities of the Company having at least
25% of the voting power of the Company's then outstanding securities (unless the
event causing the 25% threshold to be crossed is an acquisition of voting common
securities directly from the Company, other than upon the conversion of
convertible debt securities or other securities and/or the exercise of options
or warrants); or
(ii) the shareholders of the Company shall approve any merger or other
business combination of the Company, sale or lease of the Company's assets or
combination of the foregoing transactions (the "Transactions") other than a
Transaction immediately following which the shareholders of the Company and any
trustee or fiduciary of any Company employee benefit plan immediately prior to
the Transaction own at least 65% of the voting power, directly or indirectly, of
(A) the surviving corporation in any such merger or other business combination;
(B) the purchaser or lessee of the Company's assets; or (C) both the surviving
corporation and the purchaser or lessee in the event of any combination of
Transactions; or
(iii) within any 24 month period, the persons who were directors
immediately before the beginning of such period (the "Incumbent Directors")
shall cease (for any reason other than death) to constitute at least a majority
of the Board or the board of directors of a successor to the Company. For this
purpose, any director who was not a director at the beginning of such period
shall be deemed to be an Incumbent Director if such director was elected to the
Board by, or on the recommendation of or with the approval of, at least
two-thirds of the directors who then qualified as Incumbent Directors (so long
as such director was not nominated by a person who has expressed an intent to
effect a Change of Control or engage in a proxy or other control contest).
(f) All cash payments under this Section 1 shall be made by the Company
within 30 calendar days following the event giving rise to such payments.
2. Permanent Disability. If as a result of the Executive's incapacity due
to physical or mental illness, the Executive shall have been absent from his
duties with the Company on a full-time basis for six consecutive months (a
"Permanent Disability") during his Period of Employment, the Company or
Executive may terminate his employment on written notice thereof, the Period of
Employment shall terminate on the giving of such notice, and the compensation to
which Executive is entitled pursuant to the Employment Agreement shall be paid
through the last day of the month in which the notice is given. In addition,
Executive shall be entitled to receive:
(a) all unpaid amounts, as of the date of such termination, in respect of
any Bonus for any calendar year ending before the calendar year in which such
termination occurs, which would have been payable had Executive remained in
employment until the date such Bonus would otherwise have been paid, plus
Executive's Deemed Bonus for the calendar year in which his employment
terminates, multiplied by a fraction, the numerator of which is the number of
days in such calendar year the Executive was an employee of the Company, and the
denominator of which is 365;
(b) until January 31, 1999, Executive (and, to the extent applicable,
Executive's dependents) shall continue to be covered, at the Company's expense,
under Company's medical, dental, hospitalization, group life, short and
long-term disability, accidental death and dismemberment and travel accident
coverage plans or the Company will provide for equivalent coverage; provided
that if Executive is provided with comparable coverage by a successor employer
any such coverage by the Company shall cease; and
(c) all amounts payable under the Company's disability plans.
3. Death. In the event of Executive's death while employed under the
Employment Agreement, the Period of Employment shall thereupon automatically
terminate and the Executive's estate or designated beneficiaries shall receive
(i) payments of Base Salary for a period of three months after the date of
death; (ii) all unpaid amounts, as of the date of such termination, in respect
of any Bonus for any calendar year ending before the calendar year in which such
termination occurs, which would have been payable had Executive remained in
employment until the date such Bonus would otherwise have been paid, plus
Executive's Deemed Bonus for the calendar year in which his employment
terminates, multiplied by a fraction, the numerator of which is the number of
days in such calendar year the Executive was an employee of the Company, and the
denominator of which is 365; and (iii) any death benefits provided under the
employee benefit programs, in accordance with their terms.
4. Voluntary Resignation; Discharge for Cause. If Executive resigns
voluntarily, other than for Good Reason or Permanent Disability, or the Company
terminates the employment of Executive at any time for Cause, the Company's
obligations under this letter agreement to make any further payments to
Executive shall thereupon, to the extent permitted by law, cease and terminate
except with respect to all unpaid amounts, as of the date of such termination in
respect of any Bonus for any calendar year ending before such termination
occurs, which would have been payable had Executive remained in employment until
the date such Bonus would otherwise have been paid. In addition, Executive shall
remain entitled to all vested amounts and benefits under the Company's employee
benefit programs, plans and practices. The term "Cause" shall be limited to (a)
action by Executive involving willful malfeasance in connection with his
employment which results in material harm to the Company, (b) material and
continuing breach by Executive of the terms of this letter agreement which
breach is not cured within 60 days after Executive receives written notice from
the Company of any such breach or (c) Executive being convicted of a felony.
Termination of Executive for Cause pursuant to this Section 4 shall be
communicated by a Notice of Termination given within six months after the Board
both (i) had knowledge of conduct or an event allegedly constituting Cause and
(ii) had reason to believe that such conduct or event could be grounds for
Cause. For purposes of this letter agreement a "Notice of Termination" shall
mean delivery to Executive of a copy of a resolution duly adopted by the Board
at a meeting of the Board called and held for that purpose (after not less than
10 days', notice to Executive ("Preliminary Notice") and reasonable opportunity
for Executive, together with the Executive's counsel, to be heard before the
Board prior to such vote), finding that in the good faith opinion of the Board,
Executive was guilty of conduct set forth in the third sentence of this Section
4 and specifying the particulars thereof in detail. The Board shall no later
than 30 days after the receipt of the Preliminary Notice by Executive
communicate its findings to Executive. A failure by the Board to make its
finding of Cause or to communicate its conclusions within such 30-day period
shall be deemed to be a finding that Executive was not guilty of the conduct
described in the second sentence of this Section 4.
5. Separability; Legal Actions; Legal Fees. If any provision of this
Employment Agreement, including this letter agreement shall be declared to be
invalid or unenforceable in whole or in part, such invalidity or
unenforceability shall not affect the remaining provisions hereof which claim
shall remain in full force and effect. Any controversy or claim arising out of
or relating to the Employment Agreement, including this letter agreement, or the
breach of the Employment Agreement, including this letter agreement, that cannot
be resolved by Executive and the Company, including any dispute as to
calculation of Executive's benefits or any payments hereunder, shall be
submitted to arbitration in New York, New York in accordance with the laws of
the State of New York and the procedures of the American Arbitration
Association, except that if Executive institutes an action relating to the
Employment Agreement, including this letter agreement, Executive may, at
Executive's option, bring that action in any court of competent jurisdiction.
All expenses including legal expenses incurred by Executive, relating to any
arbitration shall be paid by the Company. Judgment may be entered on an
arbitration(s) award in any court having jurisdiction.
<PAGE>
Please sign and return a copy of this letter to confirm your agreement
with the foregoing:
Very truly yours,
EMCOR GROUP, Inc.
By:
-----------------------------------------
Agreed to:
- ---------------------
Sheldon I. Cammaker
- --------
* This Cross Reference Sheet is not part of the Indenture.
Exhibit 11
See Note F to the Condensed Consolidated Financial Statements regarding the
calculations of Basic EPS and Diluted EPS.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
EMCOR's Condensed Consolidated Financial Statements for the three months
ended March 31, 1998 and is qualified in its entirety by reference
to such financial statements.
</LEGEND>
<CIK> 0000105634
<NAME> EMCOR Group, Inc.
<MULTIPLIER> 1000
<CURRENCY> U.S.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<EXCHANGE-RATE> 1
<CASH> 123888
<SECURITIES> 0
<RECEIVABLES> 516659
<ALLOWANCES> 22031
<INVENTORY> 6735
<CURRENT-ASSETS> 711075
<PP&E> 45773
<DEPRECIATION> 18205
<TOTAL-ASSETS> 752617
<CURRENT-LIABILITIES> 476826
<BONDS> 117091
<COMMON> 107
0
0
<OTHER-SE> 111860
<TOTAL-LIABILITY-AND-EQUITY> 752617
<SALES> 493923
<TOTAL-REVENUES> 493923
<CGS> 449683
<TOTAL-COSTS> 489988
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 347
<INTEREST-EXPENSE> 2406
<INCOME-PRETAX> 1529
<INCOME-TAX> 727
<INCOME-CONTINUING> 802
<DISCONTINUED> 0
<EXTRAORDINARY> (4777)
<CHANGES> 0
<NET-INCOME> (3975)
<EPS-PRIMARY> 0.41
<EPS-DILUTED> 0.41
</TABLE>
