<PAGE>
[EMCOR LOGO]
EMCOR GROUP, INC.
101 MERRITT SEVEN CORPORATE PARK
NORWALK, CONNECTICUT 06851
------------------------
NOTICE OF ANNUAL MEETING
------------------------
To the Stockholders of
EMCOR Group, Inc.
The Annual Meeting of Stockholders of EMCOR Group, Inc. (the "Company")
will be held in the Mahogany Room, Harvard Club, 27 West 44th Street, New York,
New York, on July 27, 2000 at 10:00 A.M. (local time) for the following
purposes:
1. To elect seven directors to serve until the next annual meeting and
until their successors are duly elected and qualify.
2. To consider a stockholder proposed resolution regarding stockholder
rights plans.
3. To ratify the appointment of Arthur Andersen LLP as independent
public accountants for 2000.
4. To transact such other business as may properly come before the
meeting or any adjournments thereof.
The Board of Directors has fixed the close of business on June 12, 2000 as
the record date for determination of stockholders entitled to receive notice of,
and to vote at, the Annual Meeting and any adjournment thereof.
YOUR ATTENTION IS RESPECTFULLY DIRECTED TO THE ACCOMPANYING PROXY
STATEMENT. WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING IN PERSON, PLEASE
COMPLETE AND RETURN THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED, WHICH REQUIRES
NO POSTAGE IF MAILED IN THE UNITED STATES.
BY ORDER OF THE BOARD OF DIRECTORS
SHELDON I. CAMMAKER
Secretary
Norwalk, Connecticut
June 21, 2000
<PAGE>
EMCOR GROUP, INC.
------------------------
PROXY STATEMENT
2000 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD JULY 27, 2000
------------------------
The enclosed proxy is solicited by the Board of Directors of EMCOR Group,
Inc., a Delaware corporation (the "Company"), for use at the Annual Meeting of
Stockholders to be held at 10:00 A.M. (local time) on Thursday, July 27, 2000 in
the Mahogany Room, Harvard Club, 27 West 44th Street, New York, New York and at
any adjournment or postponement of such meeting. The enclosed proxy may be
revoked at any time before it is exercised by delivering a written notice to the
Secretary of the Company stating that the proxy is revoked, by executing a duly
exercised proxy bearing a later date and presenting it to the Secretary of the
Company, or by attending the Annual Meeting and voting in person. Unless
otherwise specified, the proxies from holders of Common Stock will be voted in
favor of each proposal set forth in the Notice of Annual Meeting.
As of June 12, 2000, the Company had outstanding 10,460,592 shares of
Common Stock, par value $.01 per share (the "Common Stock"). Only stockholders
of record of Common Stock at the close of business on June 12, 2000 (the "Record
Date") are entitled to notice of, and to vote at, the Annual Meeting. The
mailing address of the principal executive offices of the Company is
101 Merritt Seven Corporate Park, Norwalk, Connecticut 06851, and the
approximate date on which this Proxy Statement and the accompanying proxy are
being first sent or given to stockholders is June 21, 2000. The Company's Annual
Report to Stockholders for the fiscal year ended December 31, 1999 accompanies
this Proxy Statement.
The Common Stock was the only voting security of the Company outstanding
and entitled to vote on the Record Date. The holders of record of a majority of
the outstanding shares of Common Stock entitled to vote will constitute a quorum
for the transaction of business at the Annual Meeting. Holders of Common Stock
are entitled to one vote per share on each matter to be voted upon at the Annual
Meeting. Assuming the presence of a quorum at the Annual Meeting, the
affirmative vote of the holders of a plurality of the votes cast by the holders
of shares of Common Stock present in person or represented by proxy and entitled
to vote at the Annual Meeting is necessary for the election of directors. The
affirmative vote of the holders of a majority of the shares of Common Stock
present in person or represented by proxy and entitled to vote at the Annual
Meeting is required for approval of the stockholder proposed resolution and
ratification of the appointment of independent public accountants to audit the
accounts of the Company and its subsidiaries. With respect to an abstention from
voting on any matter, the shares will be considered present and entitled to vote
at the Annual Meeting. Abstentions will have the effect of a vote against
proposals brought before the meeting, but will not have an effect on the
election of directors. If a broker indicates on the proxy that it does not have
discretionary authority as to certain shares to vote on a particular proposal (a
broker non-vote), those shares will not be treated as present and entitled to
vote on that proposal and, therefore, will be disregarded and will have no
effect on the outcome of the vote on the proposal.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth as of June 12, 2000 certain information
regarding beneficial ownership of the Company's Common Stock by each person or
group known by the Company to be a beneficial owner of more than five percent of
the outstanding shares of Common Stock. Except as otherwise noted, to the
Company's
<PAGE>
knowledge, each person or group listed below has sole voting and investment
power with respect to the shares listed next to his or its name.
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIALLY OWNED OWNED
--------------------------------------------------------------------------------------- ------------------ -------
<S> <C> <C>
Steven A. Van Dyke..................................................................... 1,421,967(1) 13.5%
777 South Harbour Island Boulevard
Tampa, Florida 33602
Oaktree Capital Management LLC......................................................... 978,645(2) 9.4%
550 South Hope Street
Los Angeles, California 90071
Artisan Investment Corporation......................................................... 972,800(3) 9.3%
100 North Water Street, #1770
Milwaukee, Wisconsin 53202
Cumberland Associates LLC.............................................................. 747,900(4) 7.1%
1114 Avenue of the Americas
New York, New York 10036
Albert Fried, Jr....................................................................... 651,062(5) 6.2%
40 Exchange Place
New York, New York 10005
</TABLE>
------------------
(1) As reported in Amendment No. 4 dated February 29, 2000 to Schedule 13D filed
with the Securities and Exchange Commission ("SEC") by Steven Van Dyke and
his affiliates, Douglas P. Teitelbaum, Bay Harbour Management, L.C., Tower
Investment Group, Inc., Bay Harbour 90-1, Ltd., Bay Harbour 98-1 Ltd.,
Trophy Hunter Investments, Ltd., Bay Harbour Investments, Inc., Trophy
Hunters, Inc. and Bay Harbour Partners, Ltd. Includes 36,576 shares issuable
upon conversion of the Company's Convertible Debentures and 26,900 shares
held in a joint account with Mr. Van Dyke's wife. Of these shares, Mr. Van
Dyke has sole voting power and sole dispositive power of 30,600 shares and
shared voting power and shared dispositive power of 1,397,367 shares.
(2) As reported in Amendment No. 5 dated March 1, 2000 to Schedule 13D filed
with the SEC by Oaktree Capital Management, LLC ("Oaktree"), OCM Principal
Opportunities Fund, L.P. ("Principal Fund") and OCM Opportunities Fund II,
L.P. ("Opportunities Fund"). Oaktree is the general partner of the Principal
Fund and the Opportunities Fund and the investment manager of a third party
account. Oaktree has sole voting power and sole dispositive power of these
shares.
(3) As reported in Schedule 13G dated February 10, 2000 filed with the SEC by
Artisan Investment Corporation ("Artisan") and its affiliates Artisan
Partners Limited Partnership, Andrew A. Ziegler and Carlene M. Ziegler.
Artisan and its affiliates have shared voting power and shared dispositive
power of these shares.
(4) As reported in Amendment No. 3 dated February 14, 2000 to Schedule 13G filed
with the SEC, Cumberland Associates LLC has sole voting power and sole
dispositive power of 701,903 of these shares and shared voting power and
shared dispositive power of 45,597 of these shares.
(5) Albert Fried & Company, LLC ("AF&C") and Albert Fried, Jr., the managing
member of AF&C, have beneficial ownership of an aggregate of 651,062 shares;
AF&C has sole voting power and sole dispositive power of 588,452 of these
shares; Mr. Fried has shared voting power and shared dispositive power of
588,452 of these shares and sole voting power and sole dispositive power of
62,610 of these shares, including 27,603 shares that may be acquired by
Mr. Fried upon exercise of presently exercisable options or options
exercisable within 60 days granted to Mr. Fried as a non-employee director
under the Company's stock option plans for non-employee directors. AF&C is a
market maker in the Company's Common Stock and Convertible Debentures and
from time to time may hold significant positions in these securities.
2
<PAGE>
ELECTION OF DIRECTORS
At the Annual Meeting, seven directors are to be elected by the holders of
Common Stock to serve until the next Annual Meeting of Stockholders and until
their successors have been duly elected and qualify. To be elected as a
director, each nominee must receive the favorable vote of a plurality of the
shares present in person or represented by proxy and entitled to vote at the
meeting. Certain information concerning the nominees for election at the Annual
Meeting is set forth below. Each nominee is presently a director of the Company.
While the Board of Directors has no reason to believe that any of those named as
a nominee for election to the Board of Directors will not be available as a
candidate, should such a situation arise, the proxy may be voted for the
election of other nominees in the discretion of the persons acting pursuant to
the proxy.
Frank T. MacInnis, Age 53. Mr. MacInnis has been Chairman of the Board and
Chief Executive Officer of the Company since April 1994 and President of the
Company from April 1994 to April 1997. From April 1990 to April 1994,
Mr. MacInnis served as President and Chief Executive Officer, and from August
1990 to April 1994 as Chairman of the Board, of Comstock Group Inc., a
nationwide electrical contracting company. From 1986 to April 1994 Mr. MacInnis
was also President of Spie Group Inc., which has or had interests in Comstock
Group Inc., Spie Construction Inc., a Canadian pipeline construction company,
and Spie Horizontal Drilling Inc., a United States company engaged in
underground drilling for pipelines and communications cable. Mr. MacInnis is
also a director of The Williams Companies, Inc.
Stephen W. Bershad, Age 58. Mr. Bershad has been Chairman of the Board and
Chief Executive Officer for more than the past five years of Axsys Technologies,
Inc., a manufacturer of electronic components and controls. Mr. Bershad has been
a Director of the Company since December 15, 1994.
David A.B. Brown, Age 56. Mr. Brown has been President of The Windsor
Group, a management consulting firm of which he is a co-founder, for more than
the past five years. Mr. Brown is also a director of BTU International, Inc.,
Marine Drilling Companies, Inc., NS Group, Inc. and Technical Communications
Corp. Mr. Brown has been a Director of the Company since December 15, 1994.
Georges L. de Buffevent, Age 62. Mr. de Buffevent has been Chairman of the
Board and Chief Executive Officer of SAGED, a French company specializing in
road construction, land development and waste management, since January 1996.
For approximately four years prior thereto, he was a business consultant. From
July 1982 to February 1992, Mr. de Buffevent was Chairman of the Board of
Directors and Chief Executive Officer of Spie-Batignolles S.A., a leading French
electrical engineering and construction company with worldwide operations.
Mr. de Buffevent has been a Director of the Company since June 19, 1998.
Albert Fried, Jr., Age 70. Mr. Fried has been Managing Member of Albert
Fried & Company, LLC, a broker/dealer and member of the New York Stock Exchange,
since 1955 and Managing Member of Buttonwood Specialists, LLC, a New York Stock
Exchange specialist firm, since 1992. Mr. Fried has been a Director of the
Company since December 15, 1994.
Richard F. Hamm, Jr., Age 41. Mr. Hamm has been Vice President, Corporate
Strategic Development & Acquisitions of Carlson Companies, Inc., a global
travel, hospitality and marketing services company, since January 1999. From
January 1997 to December 1998 he was Senior Vice President, Legal and Business
Development of Tropicana Products, Inc. ("Tropicana"), a manufacturer of fruit
juices, and Vice President and General Counsel of Tropicana from June 1993 to
January 1997. Mr. Hamm has been a Director of the Company since June 19, 1998.
Kevin C. Toner, Age 36. Mr. Toner has been Principal of Aristeia Capital
LLC, an investment manager, since June 1997 and President of the Isdell 86
Foundation, a not-for-profit organization, since December 1994. He was a private
investor from March 1995 to June 1997 and a Managing Director from December 1991
to February 1995 of UBS Securities Inc., a broker/dealer and member of the New
York Stock Exchange, engaged in corporate finance, underwriting and distribution
of high grade U.S. corporate issues and Eurobonds. Mr. Toner has been a Director
of the Company since December 15, 1994.
3
<PAGE>
COMMITTEES OF THE BOARD
The Company has standing Audit, Compensation and Personnel, and Corporate
Governance Committees of the Board of Directors.
The Audit Committee, comprised of Messrs. Bershad, Brown and Hamm, serves
as the focal point for communication between the Board of Directors and the
Company's independent public accountants, chief internal auditor and management,
to the extent that their duties relate to financial or accounting reporting and
controls. The Audit Committee is responsible for engaging and discharging the
independent public accountants for the Company, reviewing their fees, reviewing
the scope and audit procedures of the independent public accountants, reviewing
annual financial statements, reviewing quarterly and annual financial results
prior to their release, and meeting with the Company's internal auditors and
independent public accountants on matters relating to, among other things, the
adequacy of the Company's internal audit controls and accounting and auditing
personnel. During 1999, the Audit Committee held four meetings.
The Compensation and Personnel Committee, comprised of Messrs. Bershad,
Fried and de Buffevent, reviews and advises the Board of Directors with respect
to the qualifications of individuals identified as candidates for positions as
the Company's Chief Executive Officer, Chief Operating Officer, Chief Financial
Officer and General Counsel and for the position of Chief Executive Officer of
each subsidiary of the Company whose proposed annual compensation is $200,000 or
more. It also reviews and recommends to the Board of Directors for its approval
any employment, severance or similar contracts, or modifications thereof, for
the Chairman of the Board and Chief Executive Officer of the Company and is
charged with fixing on an annual basis his compensation, subject to the approval
of the Board of Directors. The Compensation and Personnel Committee also is
responsible for fixing, based on proposals made by the Chief Executive Officer,
compensation for the Chief Operating Officer, Chief Financial Officer and
General Counsel of the Company as well as the compensation of other officers and
employees of the Company and each subsidiary whose annual compensation is
$200,000 or more and for approving any employment, severance or similar
contracts for such officers and employees, or modifications thereof. The
Compensation and Personnel Committee also recommends to the Board of Directors
for its approval any incentive, benefit, award or bonus plans and programs for
employees, administers the 1994 Management Stock Option Plan and reviews
executive development plans. During 1999, the Compensation and Personnel
Committee held three meetings.
The Corporate Governance Committee, comprised of Messrs. Fried, Hamm and
Toner, is responsible to the Board of Directors for the review and
recommendation of director candidates; recommendations regarding directors'
retirement age and removal; review of all committees of the Board of Directors
and recommendations regarding their number, function and membership;
recommendations with respect to compensation of and other benefits for
non-employee directors; and review of and recommendation with respect to
directors' and officers' liability insurance and indemnification agreements
between the Company and its officers and directors. The Corporate Governance
Committee will consider nominees as directors recommended by stockholders. The
Corporate Governance Committee has not adopted formal procedures for the
submission of such recommendations. Such recommendations should be sent to the
Secretary, EMCOR Group, Inc., 101 Merritt Seven Corporate Park, Norwalk,
Connecticut 06851. The Company's by-laws specify certain time limitations,
notice requirements and other procedures applicable to the submission of
nominations to be brought before an Annual or Special Meeting of Stockholders of
the Company. During 1999, the Corporate Governance Committee held one meeting.
MEETINGS OF THE BOARD
There were ten meetings of the Board of Directors during 1999.
4
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth as of June 12, 2000 certain information
regarding the beneficial ownership of the Company's Common Stock by each of the
Company's directors, its chief executive officer, each of the other four most
highly compensated executive officers of the Company and all its directors and
executive officers as a group for the fiscal year ended December 31, 1999.
Except as otherwise noted, to the Company's knowledge, each of the persons
listed below has sole voting power and investment power with respect to the
shares listed next to his name.
AMOUNT AND NATURE OF
NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) PERCENT
------------------------------ ----------------------- -------
Frank T. MacInnis............. 303,000(2) 2.8%
Stephen W. Bershad............ 56,103(3) *
David A. B. Brown............. 34,603(3) *
Georges de Buffevent.......... 21,025(3) *
Albert Fried, Jr.............. 651,062(4) 6.2%
Richard F. Hamm, Jr........... 21,778(3) *
Kevin C. Toner................ 35,603(3) *
Jeffrey M. Levy............... 81,000(2) *
Sheldon I. Cammaker........... 70,000(2) *
Leicle E. Chesser............. 70,000(2) *
Thomas D. Cunningham.......... 81,500(2) *
All directors and executive
officers as a group......... 1,489,174(5) 13.2%
------------------
* Represents less than 1%.
(1) The information contained in the table reflects "beneficial ownership" as
defined in Rule 13d-3 of the Securities Exchange Act of 1934, as amended.
All percentages set forth in this table have been rounded.
(2) Includes in the case of Mr. MacInnis 300,000 shares, in the case of
Mr. Levy 80,000 shares, in the case of each of Messrs. Cammaker and Chesser
70,000 shares, and in the case of Mr. Cunningham 81,500 shares, that may be
acquired upon the exercise of presently exercisable options or options
exercisable within 60 days granted pursuant to the Company's stock option
plans and programs.
(3) Includes in the case of Mr. Bershad 41,103 shares, in the case of Mr. Brown
33,603 shares, in the case of Mr. de Buffevent 20,695 shares, in the case
of Mr. Hamm 21,778 shares, and in the case of Mr. Toner 30,603 shares, that
may be acquired upon exercise of presently exercisable options or options
exercisable within 60 days granted to each non-employee director pursuant
to the Company's 1995 Non-Employee Directors' Non-Qualified Stock Option
Plan and its 1997 Non-Employee Directors' Non-Qualified Stock Option Plan,
and in the case of Mr. de Buffevent an additional 330 shares that may be
issued in respect of Deferred Stock Units granted to him pursuant to the
1997 Stock Plan for Directors (the "1997 Plan").
(4) Includes the shares referred to in Note 5 to the table above concerning
beneficial ownership of holders of more than five percent of the Company's
outstanding shares of Common Stock.
(5) Includes 840,385 shares that may be acquired upon the exercise of presently
exercisable options or options exercisable within 60 days granted pursuant
to the Company's stock option plans and programs and 330 shares issuable in
respect of Deferred Stock Units granted pursuant to the 1997 Plan.
EXECUTIVE COMPENSATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following Summary Compensation Table sets forth the compensation
awarded to, earned by or paid to each of the Chief Executive Officer and the
other four most highly compensated executive officers of the Company
(collectively, the "named executive officers") during the fiscal years ended
December 31, 1999, 1998 and 1997 for services rendered in all capacities to the
Company and its subsidiaries. For information regarding employment agreements of
the named executive officers, other than Mr. Cunningham whose employment
terminated January 31, 2000, see "Employment Contracts and Termination of
Employment and Change of Control Arrangements" below.
5
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION AWARDS(3)
-------------------------------------------------------------
ANNUAL NUMBER OF
COMPENSATION OTHER ANNUAL RESTRICTED SECURITIES ALL OTHER
------------------------ COMPENSATION STOCK UNDERLYING COMPENSATION
SALARY BONUS (2) AWARD OPTIONS/SARS(4) (5)
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) ($) (#) ($)
-------------------------------------- ---- -------- -------- --------------- ---------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Frank T. MacInnis .................... 1999 725,000 900,000 6,375 None 225,000 8,400
Chairman of the Board and 1998 700,000 800,000 31,787 None 25,000 8,400
Chief Executive Officer 1997 650,000 775,000 23,003 None None 8,400
Jeffrey M. Levy ...................... 1999 465,000 600,000 8,053 None 15,000 8,400
President and 1998 450,000 400,000 8,645 None 15,000 8,400
Chief Operating Officer 1997 325,000 400,000 10,462 None None 8,400
Sheldon I. Cammaker .................. 1999 372,000 340,000 11,709 None 10,000 8,400
Executive Vice President and 1998 456,160 165,000 None None 10,000 8,400
General Counsel and Secretary 1997 430,340 150,000 None None None 8,400
Leicle E. Chesser .................... 1999 365,000 410,000 16,767 None 10,000 8,400
Executive Vice President and 1998 350,000 375,000 11,936 None 10,000 8,400
Chief Financial Officer 1997 325,000 340,000 19,867 None None 8,400
Thomas D. Cunningham(1) .............. 1999 325,000 150,000 16,611 None 5,000 1,007,200(6)
Executive Vice President 1998 275,000 150,000 13,354 None 5,000 8,400
1997 126,923 100,000 15,920 None 53,000 45,827
</TABLE>
------------------
(1) Mr. Cunningham was a director of the Company until July 15, 1997.
Mr. Cunningham joined the Company as Executive Vice President on July 15,
1997 and left the Company's employ on January 31, 2000.
(2) The personal benefits provided to the named executive officers did not
exceed the disclosure threshold established by the Securities and Exchange
Commission pursuant to applicable rules. Figures represent amounts
reimbursed for the payment of taxes upon certain fringe benefits.
(3) The column specified by Item 402 (b) of Regulation S-K to report Long-Term
Incentive Plan Payouts has been excluded because the Company has no
long-term incentive compensation plans and has not had any such plan during
any portion of fiscal years 1999, 1998 and 1997.
(4) The awards set forth in this column are of stock options only. The Company
did not award stock appreciation rights.
(5) The amounts reported in this column include matching contributions of $3,600
made by the Company under the 401(k) part of the Company's Retirement and
Savings Plan, a defined contribution profit sharing plan, during 1999 for
the account of each of the named executive officers. The amounts reported
for 1999 also include contributions of $4,800 to be paid during 2000 in
respect of 1999 by the Company pursuant to the retirement account part of
the Company's Retirement and Savings Plan for the account of each of the
named executive officers. The amount reported in this column in respect of
1997 for Mr. Cunningham represents consulting and directors' fees paid to
him in respect of the period January 1, 1997 through July 14, 1997 prior to
his becoming an employee of the Company.
(6) The amount reported in this column in respect of 1999 also includes
severance payments paid or to be paid to Mr. Cunningham during the year
2000. As of January 31, 2000 the employment of Mr. Cunningham, who had been
an executive vice president of the Company, was terminated by the Company.
Inasmuch as the termination of Mr. Cunningham was without Cause (as that
term is defined in his employment agreement) substantially all of the
severance payments referred to in the table were provided for in his
employment agreement. In addition to the amounts referred to in the table,
the Company has agreed to provide him
(Footnotes continued on next page)
6
<PAGE>
(Footnotes continued from previous page)
coverage, at the Company's expense, under the Company's group life, short
and long-term disability, accidental and dismemberment and travel accident
insurance policies through December 31, 2000, pay up to $35,000 for
outplacement fees, and to extend the right to exercise certain of his stock
options through the original term of the options.
STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
The following table sets forth certain information concerning certain
grants to the named executive officers of stock options during the last fiscal
year. As indicated under the Summary Compensation Table above, the Company did
not grant stock appreciation rights ("SARs") of any kind.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-------------------------
NUMBER OF % OF TOTAL GRANT DATE VALUE
SECURITIES OPTIONS -------------------------------
UNDERLYING GRANTED TO EXERCISE OR GRANT DATE
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION PRESENT
NAME GRANTED(1) FISCAL YEAR ($/SH)(2) DATE VALUE($)(3)
-------------------------------------------- ---------- ------------ ----------- ----------------- -----------
<S> <C> <C> <C> <C> <C>
Frank T. MacInnis........................... 200,000 63% $ 19.75 November 21, 2007 $ 1,155,000
25,000 8% $ 16.19 January 3, 2009 $ 118,000
Jeffrey M. Levy............................. 15,000 5% $ 16.19 January 3, 2009 $ 71,000
Sheldon I. Cammaker......................... 10,000 3% $ 16.19 January 3, 2009 $ 47,000
Leicle E. Chesser........................... 10,000 3% $ 16.19 January 3, 2009 $ 47,000
Thomas D. Cunningham........................ 5,000 2% $ 16.19 January 3, 2009 $ 24,000
</TABLE>
------------------
(1) Mr. MacInnis' options for 200,000 shares vest in full on November 21, 2006,
provided that with respect to successive groups of 50,000 shares of Common
Stock the options vest earlier if and when the fair market value of a share
of Common Stock first equals or exceeds $25, $30, $35, and $40,
respectively; options with respect to 50,000 shares vested during 1999. The
options referred to in this table held by Mr. MacInnis for 25,000 shares and
the options referred to in this table held by the other named executive
officers have a ten-year term and first became exercisable on January 4,
2000 and are exercisable any time or from time to time until January 3,
2009.
(2) The stock option exercise price for a share of Common Stock is the fair
market value of a share of Common Stock on the date of grant. No SARs,
performance units or other instruments were granted in tandem with the stock
options reported herein.
(3) Present value was calculated using the Black-Scholes option-pricing model
which involves an extrapolation of future price levels based solely on past
performance. The present value as of the date of grant, calculated using the
Black-Scholes method, is based on assumptions about future interest rates,
dividend yield and stock price volatility. In calculating the present value
as of the date of grant of the options reported in the table, the Company
assumed an interest rate of 5.5% per annum, an annual dividend yield of zero
and volatility of 30.6%. There is no assurance that these assumptions will
prove to be true in the future. The actual value, if any, that may be
realized by each individual will depend on the future market price of the
Common Stock and cannot be forecasted accurately by application of an
option-pricing model.
OPTION EXERCISES AND HOLDINGS
The following table sets forth certain information concerning unexercised
options to purchase Common Stock of the Company held at the end of fiscal year
1999 by the named executive officers. None of the named executive officers
exercised any options during fiscal year 1999. No named executive officer holds
any SARs.
7
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUE
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY
SHARES VALUE OPTIONS AT OPTIONS AT
ACQUIRED ON REALIZED FY-END(#) FY-END($)(1)
NAME EXERCISE(#) ($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
-------------------------------------------- ----------- -------- ---------------------------- -------------------------
<S> <C> <C> <C> <C>
Frank T. MacInnis........................... None -- 275,000/175,000 $ 2,700,000/$51,500
Jeffrey M. Levy............................. None -- 65,000/15,000 $ 656,000/$30,900
Sheldon I. Cammaker......................... None -- 60,000/10,000 $ 656,000/$20,600
Leicle E. Chesser........................... None -- 60,000/10,000 $ 656,000/$20,600
Thomas D. Cunningham........................ None -- 54,834/21,666 $ 134,348/$10,300
</TABLE>
------------------
(1) For purposes of this column, value is calculated based on the aggregate
amount of the excess of $18.25 (the closing price of the Common Stock as
reported on the Nasdaq Stock Market on December 31, 1999) over the relevant
exercise price for a share of Common Stock with respect to the options.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT
AND CHANGE OF CONTROL ARRANGEMENTS
EMPLOYMENT AGREEMENTS
The Company has amended and restated employment agreements made as of
May 4, 1999 with Frank T. MacInnis providing for his employment as Chief
Executive Officer of the Company through December 31, 2000 and with Jeffrey M.
Levy providing for his employment as President and Chief Operating Officer of
the Company through December 31, 2000. Each such employment agreement provides
that the term of employment will automatically be extended for successive
one-year periods unless the Company or the officer gives written notice not to
extend at least six months prior to the end of the initial term or any extended
term of the employment agreement. However, following the date of a Change of
Control (as defined their employment agreements), the term of Mr. MacInnis' and
Mr. Levy's respective employment shall be for a period of three years from such
date. Under Mr. MacInnis' employment agreement, the Company is also to use its
best efforts to ensure Mr. MacInnis' election as Chairman of the Board of
Directors of the Company.
Pursuant to the terms of their respective employment agreements,
Mr. MacInnis is to receive an annual base salary of $750,000 for 2000 and
Mr. Levy is to receive an annual base salary of $485,000 for 2000. Their annual
base salaries are to increase on the first day of each calendar year during the
employment periods by the percentage increase in the consumer price index for
the preceding year for the area in which the principal office of the Company is
located or an amount specified by the Board of Directors, whichever is greater.
In addition, Mr. MacInnis and Mr. Levy are each entitled to receive an annual
bonus payable in cash ("Target Bonus"), which is to be determined by a formula
agreed upon annually by the respective officer and the Compensation and
Personnel Committee of the Board of Directors (the "Compensation Committee");
provided that Mr. MacInnis' annual Target Bonus may not be less than $600,000
and Mr. Levy's annual Target Bonus may not be less than $400,000. Pursuant to
the terms of their respective employment agreements, the Company is to recommend
to the Compensation Committee that Mr. MacInnis and Mr. Levy receive annually an
option to purchase not less than 25,000 and 15,000 shares of Common Stock,
respectively, at a per share exercise price equal to the fair market value of a
share of Common Stock on the grant date. Each option is to have a ten-year term
and is to be exercisable on or after the first anniversary of the grant date.
In addition, pursuant to his employment agreement, Mr. MacInnis was granted
on May 5, 1999 options expiring November 21, 2007 to purchase 200,000 shares of
Common Stock at a per share exercise price of $19.75, the fair market value of a
share of Common Stock on the grant date. These options vest in full on
November 21, 2006, provided that with respect to successive groups of 50,000
shares of Common Stock, the options vest earlier if and when the fair market
value of a share of Common Stock first equals or exceeds $25, $30, $35 and $40,
respectively. Under the terms of the option agreement, options with respect to
50,000 shares have vested.
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<PAGE>
Under the terms of their employment agreements, Mr. MacInnis and Mr. Levy
each has been provided with certain benefits customarily accorded to the
Company's executive officers. These benefits include, in Mr. MacInnis' case,
$700 per month for the leasing of an automobile; in Mr. Levy's case, $800 per
month for the leasing of an automobile and the cost of a lease capital reduction
payment; maintenance and insurance on their respective automobiles; and
reimbursement for initiation fees and monthly dues for membership in a club
suitable for entertaining clients of the Company, all legal expenses incurred in
connection with their employment agreements, and the cost of any increased tax
liability to them caused by receipt of these fringe benefits.
If, during the term of his employment agreement, Mr. MacInnis' employment
is terminated by the Company other than for Cause (as defined in his employment
agreement) or he terminates his employment for Good Reason (as defined in his
employment agreement), he will be entitled to receive a cash payment generally
equal to the sum of (i) the greater of (A) his base salary at the highest annual
rate in effect during his term of employment for the period from the date of
termination through December 31, 2000 or (B) two times his base salary at its
then current annual rate and (ii) the greater of (A) his Target Bonus for the
calendar year in which the termination takes place multiplied by the number of
full or partial calendar years remaining from the date of termination through
December 31, 2000 and (B) two times his Target Bonus for the calendar year in
which the termination takes place; however, in the event of a termination
following a Change of Control (as defined in his employment agreement), the
factor of two in clauses (i)(B) and (ii)(B) above will be increased to three.
If, during the term of his employment agreement, Mr. Levy's employment is
terminated by the Company other than for Cause (as defined in his employment
agreement) or he terminates his employment for Good Reason (as defined in his
employment agreement), he will be entitled to a cash payment generally equal to
the sum of (i) two times his base salary at its then current annual rate and
(ii) two times his Target Bonus for the calendar year in which the termination
occurs; however, in the event of a termination following a Change of Control (as
defined in his employment agreement) the factor of two in clauses (i) and (ii)
above will be increased to three. In addition, Messrs. MacInnis and Levy each
will be entitled to receive all unpaid amounts in respect of his bonus for any
calendar year ending before the date of termination and an amount equal to his
Target Bonus for the calendar year in which the termination takes place
multiplied by a fraction the numerator of which is the number of days in such
calendar year that he was an employee of the Company and the denominator of
which is 365.
The Company has amended and restated employment agreements made as of
May 4, 1999 with Sheldon I. Cammaker providing for his employment as Executive
Vice President and General Counsel of the Company through December 31, 2000 and
with Leicle E. Chesser providing for his employment as Executive Vice President
and Chief Financial Officer of the Company through December 31, 2000. Each such
employment agreement provides that the term of employment will automatically be
extended for successive one-year periods unless the Company or the officer gives
written notice not to extend at least six months prior to the end of the initial
term or any extended term of the employment agreement. However, following the
date of a Change of Control (as defined in their employment agreements), the
terms of Mr. Cammaker's and Mr. Chesser's respective employment shall be for a
period of three years from such date.
Pursuant to the terms of their respective employment agreements,
Mr. Cammaker is to receive an annual base salary of $380,000 for 2000, and
Mr. Chesser is to receive an annual base salary of $380,000 for 2000. Their
annual base salaries are to increase on the first day of each calendar year
during the employment periods by the percentage increase in the consumer price
index for the preceding year for the area in which the principal office of the
Company is located or an amount specified by the Board of Directors, whichever
is greater. In addition, Mr. Cammaker and Mr. Chesser are each entitled to
receive an annual cash bonus determined by the Compensation Committee, and under
the term of their respective employment agreements, the Company is to recommend
to the Compensation Committee that Messrs. Cammaker and Chesser each receive
annually an option to purchase not less than 10,000 shares of Common Stock at a
per share exercise price equal to the fair market value of a share of the Common
Stock on the grant date. Each option is to have a ten-year term and is to be
exercisable on the first anniversary of the date of grant.
Under the terms of their employment agreements, Messrs. Cammaker and
Chesser have been provided with certain benefits customarily accorded to the
Company's executive officers, including in Mr. Chesser's case, $800 per month
for leasing of an automobile (plus maintenance and insurance thereon) and the
cost of a lease capital reduction payment and in Mr. Cammaker's case, the use of
a Company automobile (plus maintenance and insurance thereon); and reimbursement
for all initiation fees and monthly dues for membership in a club suitable
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<PAGE>
for entertaining clients of the Company, all legal expenses incurred in
connection with their employment agreements, and the cost of any increased tax
liability caused by receipt of these fringe benefits.
If Messrs. Cammaker's or Chesser's employment is terminated during the term
of his respective employment agreement by the Company other than for Cause (as
defined in his employment agreement), or if he terminates his employment for
Good Reason (as defined in his employment agreement), he will be entitled to
receive a cash payment generally equal to the sum of (i) two times his base
salary at its then current annual rate and (ii) two times the highest bonus paid
to him during his employment by the Company ("Deemed Bonus"); however, in the
event of a termination following a Change of Control (as defined in his
employment agreement), the factor of two in clauses (i) and (ii) above will be
increased to three. In addition, Messrs. Chesser and Cammaker each will be
entitled to receive all unpaid amounts in respect of his bonus for any calendar
year ending before the date of termination and an amount equal to his Deemed
Bonus multiplied by a fraction the numerator of which is the number of days in
the calendar year in which the termination takes place that he was an employee
of the Company and the denominator of which is 365.
CONTINUITY AGREEMENTS
Each of Messrs. MacInnis, Levy, Cammaker and Chesser (each referred to
herein as an "Executive") is a party to a Continuity Agreement with the Company.
The purpose of the Continuity Agreements is to retain the services of these
Executives and to assure their continued productivity without disturbance in
circumstances arising from the possibility or occurrence of a Change of Control
of the Company. For purposes of the Continuity Agreements a "Change of Control"
means, in general, the occurrence of (i) the acquisition by a person or group of
persons of 25% or more of the voting securities of the Company, (ii) the
approval by the Company's stockholders of a merger, business combination or sale
of the Company's assets, the result of which is that less than 65% of the voting
securities of the resulting corporation is owned by the holders of the Company's
Common Stock prior to such transaction or (iii) the failure of Incumbent
Directors (as defined in the Continuity Agreements) to constitute at least a
majority of the Board of Directors of the Company during any two year period.
Generally, no benefits are provided under the Continuity Agreements for any
type of termination before a Change of Control, for termination after a Change
of Control due to death, disability, any termination for cause (as that term is
defined in the Continuity Agreements) or for voluntary termination (other than
for good reason) (as that term is defined in the Continuity Agreements).
Upon a Change of Control each Continuity Agreement generally provides to
the Executive a severance benefit if the Company terminates the Executive's
employment without cause or the Executive terminates his employment for good
reason within two years following a Change of Control equal to the sum of three
times (i) his base salary at the time of the Change of Control, (ii) the higher
of (x) his bonus in respect of the year prior to the Change of Control or (y)
the average of his bonuses for the three years prior to the Change of Control
and (iii) the value of perquisites provided in respect of the year prior to the
Change of Control. Other severance benefits include outplacement assistance and
a continuance of insurance benefits for three years. The severance benefits
under each Executive's Continuity Agreement is reduced by any severance benefits
payable under the Executive's employment agreement.
If all or any portion of the payments or benefits referred to in the
preceding paragraphs under "Employment Agreements" and "Continuity Agreements",
either alone or together with other payments and benefits which Messrs.
MacInnis, Levy, Cammaker or Chesser receives or is then entitled to receive from
the Company, would constitute a "parachute payment" within the meaning of
Section 280G of the Internal Revenue Code (the "Code"), then such officer shall
be entitled to such additional payments as may be necessary to ensure that the
net after tax benefit of all such payments shall be equal to his respective net
after tax benefit as if no excise tax had been imposed under Section 4999 of the
Code.
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DIRECTOR COMPENSATION
Each director who is not an officer of the Company ("non-employee
director") is entitled to receive an annual cash retainer of $30,000 and $1,000
for each meeting of the Board of Directors he attends, other than telephonic
meetings of the Board in which case each non-employee director who participates
receives $500. Each non-employee director also receives $500 for each meeting of
a committee of the Board of Directors attended by the director, and each
non-employee director who chairs a committee of the Board of Directors receives
an additional $2,000 per annum. In addition, pursuant to the 1995 Non-Employee
Directors' Non-Qualified Stock Option Plan, each non-employee director on July
28, 1999 was granted an option to purchase 3,000 shares of Common Stock at an
exercise price of $22.13 per share. These options are fully exercisable as of
the date of grant and have a term of ten years. A director who also serves as an
officer of the Company does not receive compensation for services rendered as a
director.
Under the 1997 Non-Employee Directors' Non-Qualified Stock Option Plan and
the 1997 Stock Plan for Directors, each non-employee director, in lieu of all or
part of his annual cash retainer, may elect to receive in accordance with such
plans (a) options to purchase shares of Common Stock and/or (b) deferred stock
units in respect of which shares of Common Stock will be issued following the
non-employee director's termination of service as a director of the Company. For
1999 each non-employee Director elected to receive his annual retainer in
options, and, accordingly, each was granted options to purchase 6,828 shares
Common Stock at $16.19 per share. These options vest during the course of the
calendar year in which they are granted.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1999 the Compensation and Personnel Committee of the Board of
Directors of the Company (the "Compensation Committee") was responsible for
matters concerning executive compensation.
Messrs. Bershad, de Buffevent and Fried, each of whom is a non-employee
director, served as Members of the Compensation Committee during 1999.
No member of the Compensation Committee was at any time during 1999 a
present or former officer of the Company or any of its subsidiaries or had any
relationship requiring disclosure by the Company under any paragraph of
Item 404 of Regulation S-K. In addition, no executive officer of the Company has
served as a director or member of the compensation committee (or other committee
performing an equivalent function) of another entity, one of whose executive
officers served as a director of, or member of the Compensation Committee of,
the Company.
STOCKHOLDER PROPOSAL CONCERNING RIGHTS PLANS
PROPOSAL OF CUMBERLAND ASSOCIATES LLC
Cumberland Associates LLC ("Cumberland") has submitted the resolution set
forth below for inclusion in this Proxy Statement for the Company's 2000 Annual
Meeting of Stockholders. The address of Cumberland is 1114 Avenue of the
Americas, New York, New York 10036, and as of June 12, 2000, Cumberland
beneficially owned 747,900 shares of the Company's Common Stock.
Resolved, that the stockholders of EMCOR Group, Inc. request the Board of
Directors to refrain from adopting any future stockholder rights plan, rights
agreement, staggered board or other device commonly known as a "poison pill",
without the prior approval of stockholders at an Annual or Special Meeting, and
to redeem or terminate any such plan, agreement or device which may be in effect
at the adoption of this resolution.
CUMBERLAND'S STATEMENT OF SUPPORT
On February 14, 1997, the OCM Principal Opportunities Fund, L.P. ("OCM")
disclosed its ownership of a 7.8% stake in EMCOR Group common stock, making OCM
one of the Company's largest stockholders. On March 3, 1997, the Company adopted
a "poison pill" whereby the board of directors may designate a stockholder
owning 15% or more of the Company's stock a hostile bidder and trigger the
poison pill. On June 19, 1998, the Company adjourned its annual stockholders
meeting because of the imminent rejection by stockholders
11
<PAGE>
representing 58% of EMCOR common stock of a management proposal to nearly double
the pool of options available to Company executives. On June 22, 1998, the
Company granted lucrative change in control agreements with beneficial ownership
thresholds at a low 25% (rather than 50%) to seven executives even though the
poison pill imposed severe practical limitations on a Change in Control.
The effect of such poison pill is to restrict institutional stockholders
from materially increasing their commitment of capital to EMCOR by limiting
their ability to purchase shares in the open market from investors who may have
no other means of achieving liquidity for their EMCOR shares. The poison pill
also serves to insulate the EMCOR Board of Directors from following the
corporate governance directives of its stockholders. In any case, the poison
pill needlessly conveys the image of a management more interested in
entrenchment than in benefiting stockholders and the poison pill's 15%
beneficial ownership limitation seems quite unnecessary since the Board of
Directors has chosen to approve stock option plans, change-in-control agreements
and a bank credit facility with low beneficial ownership thresholds of 25%. We
do not believe the poison pill offers any significant economic protection in
light of the fact that even with the pill the availability of the Company's tax
loss carryforwards could become limited by purchases under the 15% pill
limitation. We can only conclude that the primary rationale for maintaining the
poison pill has little to do with the Company's tax loss carryforwards.
We believe that it is the stockholders (who are the owners of the Company),
not the directors and managers (who merely act as agents for the owners), who
should have the right to decide what is or is not appropriate when it comes to
the matter of restricting share ownership. While management may offer up
empirical studies of other companies with poison pills, the fact that EMCOR
common stock has failed to perform during the existence of the poison pill
argues strongly for its immediate removal. We urge all stockholders to VOTE FOR
this proposal.
BOARD OF DIRECTORS' STATEMENT IN OPPOSITION TO THE PROPOSAL
The Company has in effect a stockholders rights plan (the "Rights Plan")
unanimously adopted by the Board of Directors on March 3, 1997, and pursuant to
the Rights Plan the Board declared a dividend distribution of one Right on each
outstanding share of the Company's Common Stock. The Board adopted the Rights
Plan to ensure that it is positioned to execute its fiduciary responsibilities
and to provide it with the ability to take what it believes are the most
effective steps to protect and maximize the value of stockholders investment in
the Company.
The adoption of the Rights Plan by action of the Board was in accord with
the Board's responsibility under Delaware law to manage and direct the
management of the Company's business and affairs and, as a legal matter, does
not require stockholder approval.
A stockholder rights plan enables a board of directors to respond in an
orderly and considered manner to an unsolicited bid. It is designed to encourage
potential acquirors to negotiate directly with the Board, which the Company
believes is in the best position to negotiate on behalf of all stockholders,
evaluate the adequacy of any potential offer, and protect stockholders against
potential abuses during the takeover process such as partial and two tiered
tender offers and creeping stock accumulation programs, which do not treat all
stockholders fairly or equally. The Rights Plan does not affect any takeover
proposal which the Board believes is in the best interests of the Company's
stockholders. Under the terms of the Rights Plan the Board has the power to
redeem the Rights to permit an acquisition that it determines, in the exercise
of its fiduciary duties, adequately reflects the value of the Company and is in
the best interests of the stockholders. The Rights Plan is also helpful in
protecting the Company's approximate $110 million net operating loss, which
enhances its positive cash flow.
Stockholder rights plans have become very common for public companies. The
Rights do not in any way weaken the financial strength of the Company or
interfere with its business plans, have no dilutive effect, do not affect
reported earnings per share, are not taxable to the Company or stockholders, and
do not change the way in which the shares of the Company can be traded. There is
no reason to believe that the Rights Plan has had any depressing affect upon the
market price of the Company's Common Stock. In fact, since adoption of the
Rights Plan, the Company's Common Stock price appreciated approximately 44%
between March 3, 1997 and June 16, 2000.
The consequences of stockholders rights plans were recently studied by
Georgeson & Company, Inc., a nationally recognized proxy solicitation and
investor relations firm. The Georgeson study released in November
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1997 found that (i) premiums paid to acquire companies with stockholder rights
plans were on average eight percentage points higher than premiums paid for
target companies that did not have a stockholder rights plan, (ii) the presence
of a stockholders rights plan at a target company did not increase the
likelihood of the defeat of a hostile takeover bid, nor the withdrawal of a
friendly bid, and (iii) a stockholder rights plan did not reduce the likelihood
that a company would become a takeover target; the takeover rate was similar for
companies with and without a stockholder rights plan.
Six of the seven directors on the Company's Board are outside directors.
The preponderance of outside directors, their credentials and the fiduciary
obligations imposed by law on all directors assure that this Board of Directors
will act in the best interests of the Company and all its stockholders in
deciding alternatives under the Rights Plan in the face of an unsolicited offer.
The fact that six of the seven individuals serving on the Board are outside
directors provides assurance that the Rights Plan will not be used for
entrenchment purposes. The outside directors also have a common financial
interest with the Company's stockholders. As indicated above, the Company has a
stock option plan and a stock plan whereby its outside directors may elect to
receive their annual retainer in stock options and/or deferred stock units
exchangeable for Common Stock in lieu of cash. For 1999 and 2000 all of the
outside directors elected to receive their compensation in stock options. These
options vest during the course of the calendar year in which they are granted,
and this one year vesting accelerates in the event of a change in control during
such year.
The Board believes that the only proper time to consider redemption of the
Rights and termination of the Rights Plan is if and when a specific offer is
made to acquire the Company's Common Stock. Redemption of the Rights and
termination of the Rights Plan prior to that time would be premature and would
remove any incentive for a potential acquiror to negotiate with the Board so
that stockholders are treated fairly.
The Board has no plans to propose a staggered board, which in any event
would require an amendment to the Company's Certificate of Incorporation or
By-laws by stockholders, nor has it any plans to adopt any other stockholder
rights plan, rights agreement, or any other device commonly know as a "poison
pill".
Last year stockholders rejected a virtually identical proposal to the
proposal submitted by Cumberland Associates LLC.
The Board believes that the Rights Plan is in the best interests of the
Company and its stockholders. The affirmative vote of a majority of shares of
Common Stock of the Company present and entitled to vote at the annual meeting
is required for approval of the proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THE PROPOSAL.
COMPENSATION COMMITTEE REPORT
The Compensation and Personnel Committee (the "Compensation Committee")
reviews and determines, based on proposals made by the Chief Executive Officer,
the compensation of the Company's Chief Operating Officer, Chief Financial
Officer and General Counsel as well as the compensation of other officers and
employees of the Company and each subsidiary whose annual compensation is
$200,000 or more. It also reviews and approves any employment, severance or
similar agreements with such individuals. The Compensation Committee is charged
with fixing on an annual basis, the compensation of the Chairman of the Board
and the Chief Executive Officer of the Company, subject to the approval of the
Board of Directors, and reviewing and recommending to the Board of Directors any
employment, severance or similar agreement for him. The Compensation Committee
also administers the Company's 1994 Management Stock Option Plan and is charged
with recommending to the Board of Directors any incentive, benefit, award or
bonus plans or programs. The entire Board of Directors determines the amount, if
any, of the Company's contributions pursuant to its Retirement and Savings Plan.
While other compensation decisions generally are not submitted to the Board of
Directors, the Board of Directors has the ultimate power and authority with
respect to compensation matters.
The members of the Compensation Committee reviewed salaries paid to the
named executive officers for 1999, approved their salary increases for 2000 and
bonuses in respect of 1999 and approved the grant to them during 1999 of stock
options.
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<PAGE>
The Compensation Committee seeks to compensate executive officers at levels
competitive with other companies in the same industry that are comparable in
size to the Company and to provide short-term rewards and long-term incentives
for superior individual and corporate performance. In making compensation
decisions, the Compensation Committee periodically reviews information about the
compensation paid or payable to officers of comparably sized public companies
(both in the same and related businesses), the compensation recommendations of
Mr. MacInnis, and reports from outside consultants. The Compensation Committee
does not have target amounts of stock ownership for its executive officers.
The key components of executive officer compensation are base salary,
bonuses and stock options. The Compensation Committee attempts to combine these
components in such a way as to attract, motivate and retain key executives
critical to the long-term success of the Company. A discussion of the various
components of the executives' compensation for 1999 follows.
Base Salary. Each executive officer received a base salary and has the
potential for annual salary increases largely determined by reference to the
salaries of executive officers holding comparable positions in companies of
comparable size.
Bonuses. Each executive officer was eligible for an annual bonus based
upon both his individual performance and the Company's performance. Bonuses were
awarded to the named executive officers in respect of 1999 which took into
account their performance and the Company's contractual obligations. As
indicated above, under the terms of their respective employment agreements,
Messrs. MacInnis and Levy are each entitled to a target bonus to be determined
by a formula and factors agreed upon annually by the respective officer and the
Compensation Committee provided that Mr. MacInnis' annual Target Bonus may not
be less than $600,000 and Mr. Levy's annual Target Bonus may not be less than
$400,000. For 1999, Mr. MacInnis received a bonus of $900,000. Mr. MacInnis'
bonus was based upon achievement of several goals, including the Company
attaining a predetermined level of net income and integration of certain
recently acquired subsidiaries. For 1999, Mr. Levy received a bonus of $600,000.
Mr. Levy's bonus was based upon the Company and a specific subsidiary attaining
predetermined levels of earnings before interest and taxes.
Stock Options. The Company's stock options are intended to provide
executives with the promise of long-term rewards which appreciate in value with
the positive performance of the Company. As previously reported, the
Compensation Committee during 1999 granted stock options to each of the named
executive officers.
Other Compensation. The executive officers also participate in the
Retirement and Savings Plan as well as the medical, life and disability
insurance plans available to all employees of the Company.
Chief Executive Officer Compensation. The minimum compensation of
Mr. MacInnis is provided for in his employment agreement described above. The
basis for Mr. MacInnis' bonus is described earlier in this Report. As part of
its evaluation, the Compensation Committee also considered a report by
Mr. MacInnis on his activities, the Company's performance, the accomplishment of
certain goals for the Company that Mr. MacInnis set at the beginning of 1999 and
the compensation earned by other chief executive officers of companies of
comparable size during the previous year.
Section 162(m). Section 162(m) of the Internal Revenue Code provides that
the deduction by a publicly-held corporation for compensation paid in a taxable
year to the Chief Executive Officer and any of the other four most highly
compensated executive officers whose compensation is required to be reported in
the Summary Compensation Table is limited to $1 million per officer, subject to
certain exceptions. The Compensation Committee has taken, and intends to
continue to take, such actions as are necessary to reduce, if not eliminate, the
Company's non-deductible compensation expense, while maintaining, to the extent
possible, the flexibility which the Compensation Committee believes to be an
important element of the Company's executive compensation program.
By: Compensation and Personnel Committee:
Stephen W. Bershad, Chairman
Georges de Buffevent
Albert Fried, Jr.
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PERFORMANCE GRAPH
Rules promulgated by the Securities and Exchange Commission require
inclusion of a graph presentation comparing cumulative five-year stockholder
returns on an indexed basis with a broad equity market index that includes
companies whose equities are traded on the NASDAQ market, where the Company's
Common Stock is traded, and either a published industry or line-of-business
index or an index of peer companies selected by the Company. The following
performance graph compares the Company's total stockholder return on its Common
Stock from January 6, 1995 to December 31, 1999 as compared to the Russell 2000
Index and the Dow Jones Heavy Construction Index. It also compares the Company's
total stockholder return on its Common Stock during that period to the Standard
& Poors 500 Stock Index and a peer group index used in the Performance Graph in
the Company's 1999 Proxy Statement. Prior to January 6, 1995, prices for the
Company's Common Stock were not readily available.
The Company has selected different indices from the indices used for 1998.
It has used the Russell 2000 Index instead of the Standard & Poors 500 Stock
Index because during 1999 the Company was included in the Russell 2000 Index,
and it has used the Dow Jones Heavy Construction Index, in which it is included,
instead of a peer group index consisting of MYR Group, Inc., The Turner
Corporation, and Perini Corporation as one of those companies was acquired
during 1999 and the other was acquired this year and its share price was
affected in 1999 by a premium over the market price offered by the acquirer.
The following performance graph assumes $100 was invested on January 6,
1995 in Common Stock of the Company and in each of the indices and assumes
reinvestment of all dividends.
EMCOR Group, Inc.
Comparative Five Year Total Returns
[Graph Plot Points]
<TABLE>
<CAPTION>
Russell Dow Jones Heavy
EMCOR S&P 500 Peer Group 2000 Index Construction Index
----- ------- ---------- ---------- ------------------
<S> <C> <C> <C> <C> <C>
Jan 06, 95 100.00 100.00 100.00 100.00 100.00
Mar 31, 95 112.50 109.02 98.81 105.12 100.00
June 30, 95 175.00 118.61 112.36 114.33 125.00
Sept 30, 95 186.11 127.25 123.70 125.11 135.00
Dec 31, 95 213.89 134.11 101.08 127.70 140.00
Mar 31, 96 269.44 140.55 107.12 133.33 135.00
June 30, 96 336.11 146.02 130.03 139.72 125.00
Sept 30, 96 336.11 171.43 116.24 140.80 130.00
Dec 31, 96 305.56 161.29 115.89 145.86 145.00
Mar 31, 97 327.78 164.85 116.91 137.39 120.00
June 30, 97 352.78 192.73 155.11 159.69 145.00
Sept 30, 97 444.44 206.26 200.11 185.23 130.00
Dec 31, 97 455.56 211.30 216.94 175.96 98.00
Mar 31, 98 477.78 238.52 213.51 195.82 120.00
June 30, 98 425.00 246.88 221.19 184.74 110.00
Sept 30, 98 344.44 221.44 160.57 140.97 80.00
Dec 31, 98 358.33 267.65 163.38 170.09 95.00
Mar 31, 99 381.94 280.09 144.69 160.73 70.00
June 30, 99 498.61 302.92 199.28 184.02 93.00
Sept 30, 99 422.22 279.31 251.83 170.72 85.00
Dec 31, 99 405.56 319.91 310.85 203.46 80.00
</TABLE>
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RATIFICATION OF APPOINTMENT OF ARTHUR ANDERSEN LLP
AS INDEPENDENT PUBLIC ACCOUNTANTS
The Audit Committee of the Board of Directors has appointed Arthur
Andersen LLP, certified public accountants, as the Company's independent public
accountants for 2000. Arthur Andersen LLP acted as independent public
accountants of the Company for 1999 pursuant to appointment by the Audit
Committee. Arthur Andersen LLP was first appointed independent public
accountants of the Company by the Audit Committee in September 1995.
Representatives of Arthur Andersen LLP will be present at the Annual
Meeting to respond to appropriate questions and will have an opportunity to make
a statement if they desire to do so.
The report of the Company's independent public accountants on the Company's
financial statements for its two most recent fiscal years ended December 31,
1999 did not contain an adverse opinion, disclaimer of opinion or qualification
as to uncertainty, audit scope, or accounting principles.
During the Company's two most recent fiscal years ended December 31, 1999,
there were no disagreements with Arthur Andersen LLP on any matters of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedures, which disagreements, if not resolved to the satisfaction of
Arthur Andersen LLP, would have caused that firm to make reference to the
subject matter of such disagreements in connection with its reports.
The affirmative vote of a majority of the shares of Common Stock present in
person or represented by proxy at the meeting and entitled to vote thereon is
required for approval of the appointment of the independent public accountants.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR
RATIFICATION OF THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS INDEPENDENT PUBLIC
ACCOUNTANTS FOR 2000.
STOCKHOLDERS' PROPOSALS
Stockholders' proposals must be received by the Company at its headquarters
in Norwalk, Connecticut on or before February 12, 2001 in order to be considered
for inclusion in next year's Proxy Statement.
The Company's By-laws set forth advance notice provisions and procedures to
be followed by stockholders who wish to bring business before an annual meeting
of stockholders or who wish to nominate candidates for election to the Board of
Directors. A stockholder may propose business to be included in the agenda of an
annual meeting only if written notice of such stockholder's intent is given to
the Secretary of the Company, not earlier than 90 days nor later than 60 days in
advance of the anniversary of the date of the immediately preceding annual
meeting, or if the date of the annual meeting occurs more than 30 days before or
60 days after the anniversary of such immediately preceding annual meeting, not
later than the close of business on the later of (a) the sixtieth day prior to
such annual meeting and (b) the tenth day following the date on which a public
announcement of the date of such meeting is first made. Each such notice must
set forth certain background and other information specified in the By-laws,
including a description of the proposed business and the reasons for conducting
such business at the annual meeting.
A stockholder may nominate candidates for election to the Board of
Directors at an annual meeting only if written notice of such stockholder's
intent to make such nomination is given to the Secretary of the Company, not
earlier than 90 days nor later than 60 days in advance of the anniversary of the
date of the immediately preceding annual meeting, or if the date of the annual
meeting occurs more than 30 days before or 60 days after the anniversary of such
immediately preceding annual meeting, not later than the close of business on
the later of (a) the sixtieth day prior to such annual meeting and (b) the tenth
day following the date on which a public announcement of the date of such
meeting is first made. Each such notice must set forth certain background and
other information specified in the By-laws.
The time limits described above also apply in determining whether notice is
timely for purposes of Rule 14a-4(c) under the Securities Exchange Act of 1934
relating to exercise of discretionary voting authority,
16
<PAGE>
and are separate from and in addition to the Securities and Exchange
Commission's requirements a stockholder must meet to have a proposal included in
the Company's proxy statement.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and executive officers, and persons who own more than
10% of a registered class of the Company's equity securities, to file initial
reports of ownership and reports of change in ownership of Common Stock and
other equity securities of the Company with the Securities and Exchange
Commission and to furnish copies of such statements to the Company.
To the Company's knowledge, during the fiscal year 1999 all such reports
relating to share ownership were timely filed.
OTHER INFORMATION
The cost of soliciting proxies will be borne by the Company. The Company
expects to solicit proxies primarily by mail. Proxies also may be solicited
personally and by telephone by certain officers and regular employees of the
Company. D.F. King & Co., Inc. has been retained for solicitation of all brokers
and nominees for a fee of $7,500 plus customary out-of-pocket expenses. The
Company may reimburse brokers and other nominees for their expenses in
communicating with the persons for whom they hold Common Stock of the Company.
The Board of Directors is aware of no other matters that are to be
presented to the stockholders for formal action at the Annual Meeting. If,
however, any other matters properly come before the meeting or any adjournments
thereof, it is the intention of the persons named in the enclosed proxy to vote
in accordance with their judgment on such matters.
UPON THE WRITTEN REQUEST OF ANY STOCKHOLDER OF RECORD ON JUNE 12, 2000, A
COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED
DECEMBER 31, 1999 (EXCLUDING EXHIBITS) AS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION WILL BE SUPPLIED WITHOUT CHARGE. REQUESTS SHOULD BE DIRECTED TO
SHELDON I. CAMMAKER, SECRETARY, EMCOR GROUP, INC., 101 MERRITT SEVEN CORPORATE
PARK, NORWALK, CONNECTICUT 06851.
BY ORDER OF THE BOARD OF DIRECTORS
SHELDON I. CAMMAKER
Secretary
June 21, 2000
17
<PAGE>
Detach Proxy Card Here
/ /
The Board of Directors recommends a vote "FOR" all nominees in Item 1,
"AGAINST" Item 2 and "FOR" Item 3.
1. Election of Directors
FOR all nominees WITHOLD AUTHORITY to vote *EXCEPTIONS
listed below for all nominees listed below.
Nominees: F. MacInnis, S. Bershad, D. Brown, G. de Buffevent, A. Fried, R. Hamm,
K. Toner
(INSTRUCTIONS: To withold authority to vote for any individual nominee, mark the
"Exceptions" box and write that nominee's name in the space provided below.)
Exceptions
---------------------------------------------------------------------
2. Approval of Resolution regarding Stockholder Rights Plans.
FOR AGAINST ABSTAIN
3. Appointment of Independent Public Accountants.
FOR AGAINST ABSTAIN
Change of Address and/or Comments Mark Here
In their discretion to vote upon other
matters that may properly come before the
meeting.
Please sign exactly as your name appears
to the left.
When signing as attorney, executor,
administrator, trustee or guardian, please
give your full title. If shares are held
jointly, each holder should sign.
Dated _______________________ __, 2000
--------------------------------------
Signature
--------------------------------------
Signature
Please Detach Here
You Must Detach This Portion of the Proxy Card
Before Returing It in the Enclosed Envelope
<PAGE>
EMCOR GROUP, INC.
ANNUAL MEETING OF STOCKHOLDERS
JULY 27, 2000
The undersigned hereby appoints Frank T. Macinnis, Sheldon I. Cammaker
and Leicle E. Chesser, and each of them, with full power to act without the
other and with full power of substitution, as proxies to represent and to vote,
as directed herein, all shares the undersigned is entitled to vote at the annual
meeting of the stockholders of EMCOR Group, Inc. to be held in the Mahogany
Room, Harvard Club, 27 West 44 Street, New York, New York on Thursday, July 27,
2000 at 10:00 A.M. (local time), and all adjourments thereof, as follows:
PLEASE MARK, DATE AND SIGN THIS PROXY ON THE REVERSE SIDE AND RETURN IT
PROMPTLY USING THE ENCLOSED POSTAGE PREPAID ENVELOPE.
Unless otherwise marked, the proxies are appointed with authority to
vote "FOR" all nominees for election, "AGAINST" the stockholder proposed
resolution regarding stockholder rights plans, and "FOR" the appointment of
independent public accountants.
(Continued and to be signed on the reverse side.)
EMCOR GROUP, INC.
P.O. BOX 11079
NEW YORK, N.Y. 10203-0079
