<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-5896
HUDSON GENERAL CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 13-1947395
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
111 GREAT NECK ROAD, GREAT NECK, NEW YORK 11021
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (516) 487-8610
Not Applicable
(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 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 such filing
requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock, par value $1.00 per share: 1,154,458 shares outstanding at April
22, 1996
Page 1 of 17
<PAGE> 2
PART I - FINANCIAL STATEMENTS
2
<PAGE> 3
HUDSON GENERAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
March 31, March 31,
1996 1995 1996 1995
----------------------------- ---------------------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Revenues .................................... $ 56,510,000 $ 37,953,000 $ 131,755,000 $ 102,478,000
------------ ------------ ------------- -------------
Costs and expenses:
Operating .................................. 38,119,000 28,429,000 95,786,000 80,057,000
Depreciation and amortization .............. 2,127,000 2,588,000 5,707,000 5,884,000
Selling, general & administrative .......... 4,874,000 3,461,000 12,486,000 10,377,000
Interest ................................... 110,000 116,000 327,000 467,000
------------ ------------ ------------- -------------
Total costs and expenses ................. 45,230,000 34,594,000 114,306,000 96,785,000
------------ ------------ ------------- -------------
Earnings before equity in loss of
joint venture and provision (benefit) for
income taxes ............................... 11,280,000 3,359,000 17,449,000 5,693,000
Equity in loss of joint venture ............. (669,000) (660,000) (2,060,000) (1,805,000)
------------ ------------ ------------- -------------
Earnings before provision (benefit) for
income taxes ............................... 10,611,000 2,699,000 15,389,000 3,888,000
Provision (benefit) for income taxes ........ 4,552,000 (775,000) 6,455,000 (454,000)
------------ ------------ ------------- -------------
Net earnings ................................ $ 6,059,000 $ 3,474,000 $ 8,934,000 $ 4,342,000
============ ============ ============= =============
Earnings per share, primary ................. $ 5.10 $ 2.76 $ 7.60 $ 3.45
============ ============ ============= =============
Earnings per share, fully diluted ........... $ 3.06 $ 1.75 $ 4.72 $ 2.42
============ ============ ============= =============
Cash dividends per common share ............. $ -- $ -- $ .25 $ .25
============ ============ ============= =============
Weighted average common and common equivalent
shares outstanding:
Primary ................................... 1,187,000 1,258,000 1,175,000 1,260,000
============ ============ ============= =============
Fully diluted ............................. 2,075,000 2,143,000 2,072,000 2,148,000
============ ============ ============= =============
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE> 4
HUDSON GENERAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, June 30,
1996 1995
----------- ----------
(Unaudited)
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents ....................................................... $ 15,770,000 $12,613,000
Accounts and notes receivable - net ............................................. 24,431,000 14,457,000
Inventory ....................................................................... 1,043,000 936,000
Prepaid expenses and other assets ............................................... 953,000 876,000
Deferred income taxes ........................................................... 4,602,000 4,602,000
------------- -----------
Total current assets ...................................................... 46,799,000 33,484,000
Property, equipment and leasehold rights at cost,
less accumulated depreciation and amortization .................................. 38,573,000 33,864,000
Investment in Hawaii joint venture - net .......................................... 15,304,000 16,065,000
Long-term receivables - net ....................................................... 2,157,000 2,585,000
Other assets - net ................................................................ 730,000 770,000
Excess cost over fair value of net assets acquired ................................ 773,000 800,000
------------- -----------
$ 104,336,000 $87,568,000
============= ===========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable ................................................................ $ 15,368,000 $12,305,000
Income taxes payable ............................................................ 6,597,000 1,557,000
Accrued expenses and other liabilities .......................................... 21,356,000 21,233,000
------------- -----------
Total current liabilities ................................................. 43,321,000 35,095,000
------------- -----------
Long-term debt, subordinated ...................................................... 28,990,000 29,000,000
Deferred income taxes ............................................................. 1,857,000 1,857,000
------------- -----------
Total noncurrent liabilities .............................................. 30,847,000 30,857,000
------------- -----------
Stockholders' Equity:
Serial preferred stock (authorized 100,000 shares
of $1 par value) - none outstanding ............................................ -- --
Common stock (authorized 7,000,000 shares of $1 par
value) - issued and outstanding 1,267,507 and
1,253,802 shares ................................................................ 1,268,000 1,254,000
Paid in capital .................................................................. 6,974,000 6,759,000
Retained earnings ................................................................ 25,354,000 16,707,000
Equity adjustments from foreign currency
translation ..................................................................... (1,418,000) (1,483,000)
Treasury stock, at cost, 114,300
and 96,600 shares .............................................................. (2,010,000) (1,621,000)
------------- -----------
Total stockholders' equity ................................................. 30,168,000 21,616,000
------------- -----------
$ 104,336,000 $87,568,000
============= ===========
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE> 5
HUDSON GENERAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Nine Months Ended
March 31,
1996 1995
-------------- --------------
(Unaudited) (Unaudited)
-------------- --------------
<S> <C> <C>
Cash flows from operating activities:
Net earnings ........................................... $ 8,934,000 $ 4,342,000
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation and amortization ........................ 5,707,000 5,884,000
Increase (decrease) in deferred income tax liabilities 13,000 (70,000)
Equity in loss of joint venture ...................... 2,060,000 1,805,000
Capitalization of interest costs on Hawaii
joint venture advances ............................. (1,202,000) (1,057,000)
Gain on sale or disposal of equipment ................ (48,000) (463,000)
Change in other current assets and liabilities:
Accounts and notes receivables - net ............... (9,939,000) 29,000
Inventory - net .................................... (104,000) 76,000
Prepaid expenses and other assets .................. (74,000) 251,000
Deferred income taxes .............................. -- (1,300,000)
Accounts payable ................................... 3,053,000 1,224,000
Income taxes payable ............................... 5,040,000 103,000
Accrued expenses and other liabilities ............. 76,000 1,226,000
Decrease in other assets ............................. 40,000 79,000
Decrease in long-term receivables - net .............. 428,000 419,000
Other - net ........................................ 31,000 95,000
------------ ------------
Net cash provided by operating activities ...... 14,015,000 12,643,000
------------ ------------
Cash flows from investing activities:
Purchases of property, equipment and leasehold rights .. (10,440,000) (7,508,000)
Proceeds from sale of property and equipment ........... 136,000 900,000
Advances to Hawaii joint venture - net ................. (97,000) (1,164,000)
------------ ------------
Net cash used by investing activities .......... (10,401,000) (7,772,000)
------------ ------------
Cash flows from financing activities:
Proceeds from issuance of common stock ................. 220,000 30,000
Cash dividends paid .................................... (287,000) (314,000)
Purchase of treasury stock ............................. (389,000) --
------------ ------------
Net cash used by financing activities ........... (456,000) (284,000)
------------ ------------
Effect of exchange rate changes on cash ................. (1,000) (118,000)
------------ ------------
Net decrease in cash and cash equivalents ............... 3,157,000 4,469,000
Cash and cash equivalents at beginning of period ........ 12,613,000 6,727,000
------------ ------------
Cash and cash equivalents at end of period .............. $ 15,770,000 $ 11,196,000
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE> 6
HUDSON GENERAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The accompanying unaudited consolidated financial statements were prepared
in accordance with generally accepted accounting principles and include all
adjustments which, in the opinion of management, are necessary to present
fairly the consolidated financial position of Hudson General Corporation and
Subsidiaries (the Company) as of March 31, 1996 and June 30, 1995, and the
results of operations for the three and nine months, and cash flows for the
nine months ended March 31, 1996 and 1995. In the opinion of management, all
necessary adjustments that were made are of a normal recurring nature.
The accounting policies followed by the Company are stated in Note 1 to the
Company's consolidated financial statements in the 1995 Hudson General
Corporation Annual Report filed under Item 8 to Form 10-K for the Company's
fiscal year ended June 30, 1995.
2. The Company is a partner in a joint venture (the Venture) which was formed
to acquire, develop and sell approximately 4,000 contiguous acres of land in
Hawaii. The Company accounts for its investment in the Venture under the
equity method of accounting.
The summary balance sheets for the Venture are as follows:
<TABLE>
<CAPTION>
March 31, June 30,
1996 1995
---- ----
(Unaudited)
<S> <C> <C>
Cash and equivalents $ 440,000 $ 89,000
Land and development costs 26,822,000 26,863,000
Mortgages, accounts and notes receivable 5,416,000 7,732,000
Foreclosed real estate - net 2,557,000 2,395,000
Other assets - net 2,323,000 2,461,000
------------ ------------
$ 37,558,000 $ 39,540,000
============ ============
Notes payable $ 1,997,000 $ 3,402,000
Partner advances and accrued interest payable 47,988,000 44,048,000
Accounts payable and accrued expenses 1,024,000 1,422,000
Partners' deficit (13,451,000) (9,332,000)
------------ ------------
$ 37,558,000 $ 39,540,000
============ ============
</TABLE>
Summary results of operations for the Venture are as follows:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
March 31, March 31,
1996 1995 1996 1995
--------------------------- ---------------------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
--------------------------- ---------------------------
<S> <C> <C> <C> <C>
Sales (net of discounts) $ 157,000 $ 180,000 $ 413,000 $ 339,000
----------- ------------ ----------- -----------
Cost of sales 88,000 93,000 193,000 93,000
Selling, general and administrative 561,000 627,000 1,761,000 1,755,000
Interest - net 844,000 780,000 2,578,000 2,101,000
----------- ------------ ----------- -----------
Total costs 1,493,000 1,500,000 4,532,000 3,949,000
----------- ------------ ----------- -----------
Loss $(1,336,000) $ (1,320,000) $(4,119,000) $(3,610,000)
=========== ============ =========== ===========
</TABLE>
The Company's 50% share of the Venture's results were losses of $669,000 and
$660,000 for the three months ended March 31, 1996 and 1995, respectively,
and $2,060,000 and $1,805,000 for the nine months ended March 31, 1996 and
1995, respectively, and have been included in "Equity in loss of joint
venture" in the accompanying consolidated statements of earnings. The
Company's partner in the Venture is Oxford Kohala, Inc. (the Partner), a
wholly owned subsidiary of Oxford First Corporation (Oxford First). Under
the Restated Joint Venture Agreement dated April 29, 1981, as amended (the
Agreement), the partners have agreed to make equal advances to the Venture
for all costs necessary for the orderly development of the land. The
Company's total advances (including accrued interest) at March 31, 1996 were
$23,994,000.
6
<PAGE> 7
On October 13, 1994, Oxford First filed for reorganization under Chapter 11
of the Bankruptcy Code. Pursuant to an order of the Bankruptcy Court, Oxford
First (through its subsidiary, The Oxford Finance Companies, Inc.) was
permitted to transfer certain amounts to the Partner. The amounts so
authorized were not sufficient to allow the Partner to make its full share
of required advances. The Company opted to make additional advances (the
Additional Advances) to cover the Partner's funding deficiency. During
November 1995, the Partner resumed making advances, and in January 1996, the
Partner repaid to the Company the entire amount of Additional Advances of
$702,000 together with $37,000 of interest thereon. In addition, pursuant to
an amended reorganization plan which was approved by the Bankruptcy Court on
September 7, 1995, Oxford First is permitted to transfer funds to the
Partner in an aggregate amount not to exceed $750,000 in each of the
calendar years 1996 and 1997. The Company, at present, is unable to
determine whether such permitted transfers will be sufficient in order for
the Partner to make its share of future advances to the Venture. Should the
Partner be unable to make its share of future advances to the Venture, the
Company has the option to make further advances on behalf of the Partner
(subject to its rights of reimbursement) necessary up to the limits set
forth in its Revolving Credit Agreement (the Credit Agreement) with a group
of banks (see Note 4). The Partner did not file for reorganization under
Chapter 11 of the Bankruptcy Code. During the nine months ended March 31,
1996, the Company advanced $836,000 to the Venture, including Additional
Advances of $154,000 that were repaid to the Company in January 1996.
3. Accrued expenses and other liabilities consisted of the
following:
<TABLE>
<CAPTION>
March 31, June 30,
1996 1995
---- ----
(Unaudited)
<S> <C> <C>
Salaries and wages $ 6,132,000 $ 5,353,000
Interest 457,000 956,000
Insurance 5,872,000 6,022,000
Operating expenses payable 3,770,000 3,176,000
Customer advances and deposits 1,611,000 1,739,000
Other 3,514,000 3,987,000
----------- -----------
$21,356,000 $21,233,000
=========== ===========
</TABLE>
4. The Credit Agreement contains various restrictions, among which are
provisions restricting the Company from paying cash dividends or purchasing,
redeeming or retiring its stock unless consolidated tangible net worth
(TNW), as defined, is greater than $16,500,000 both immediately before and
after giving effect to such dividend, purchase, redemption or retirement. At
March 31, 1996, the Company's TNW was $30,813,000. Furthermore, any such
payments are limited to an annual amount not to exceed the lesser of (i)
$1,200,000 or (ii) 50% of consolidated net income, as defined, for the most
recently ended fiscal year. In addition, the Company was permitted, until
March 31, 1996, to expend up to an additional $3,000,000 to repurchase
shares of its common stock so long as no proceeds from borrowings under the
Credit Agreement were utilized for such purpose. During fiscal 1995, the
Board of Directors approved the repurchase of up to 150,000 shares of the
Company's common stock from time to time in either open market or privately
negotiated transactions. As of March 31, 1996, the Company had repurchased
114,300 shares of its common stock in the open market for an aggregate
purchase price of $2,010,000 pursuant to this authorization.
Pursuant to the Credit Agreement, the Company may advance up to $2,000,000
to the Venture in any fiscal year or up to $4,000,000 during the term of the
Credit Agreement, net of any distributions received from the Venture by the
Company during such periods. From the inception of the Credit Agreement
through March 31, 1996 the Company had increased its net advances to the
Venture by $2,903,000, after giving effect to the repayment of the $702,000
of Additional Advances, plus $37,000 of interest thereon.
7
<PAGE> 8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Results of Operations
Revenues for the three and nine months ended March 31, 1996 increased
$18.6 and $29.3 million, or 48.9% and 28.6%, respectively, compared with the
corresponding periods of the prior year. The increase reflects higher: (i) snow
removal revenues of $11.1 and $12.5 million, respectively, as a result of record
snowfalls in the northeast; (ii) ground handling service revenues of $6.5 and
$14.4 million, respectively, due primarily to expanded services to new and
existing customers and to higher sales of de- icing fluid; and (iii) domestic
aircraft fueling revenues of $.9 and $3.9 million, respectively, resulting
primarily from expanded intoplane fueling services and retail sales of fuel at
existing locations. Partially offsetting the revenue increases were lower: (i)
aircraft fueling and hangar rental revenues in Canada for the nine months ended
March 31, 1996 of $2.3 million as a result of the cessation of operations of the
Company's Canadian fixed base operations (FBO's) on October 31, 1994; and (ii)
ground transportation revenues for the three and nine months ended March 31,
1996 of $.5 and $.2 million, respectively, due primarily to the loss of
contracts to operate information kiosks and specialized airfield passenger
transport vehicles.
Costs and expenses for the three and nine months ended March 31, 1996
increased $10.6 and $17.5 million, or 30.7% and 18.1%, respectively, compared
with the corresponding periods of the previous year. Operating costs for the
three and nine months ended March 31, 1996 increased $9.7 and $15.7 million, or
34.1% and 19.6%, compared with the corresponding periods of the previous year.
The increase was attributable to higher: (i) snow removal costs; (ii) labor and
related costs associated with expanded ground handling operations and domestic
aircraft fueling services; (iii) cost of sales of de-icing fluid; and (iv) fuel
costs associated with higher volumes of retail fuel sales and internal fuel
usage in the U.S. Partially offsetting the increases for the three and nine
months ended March 31, 1996 were lower costs as a result of: (i) the loss of
contracts to operate ground transportation information kiosks and specialized
airfield passenger transport vehicles; (ii) the positive trending of workers'
compensation insurance claims; and (iii) for the nine months ended March 31,
1996, the cessation of operations of the Company's Canadian FBO's.
Depreciation and amortization expenses for the three and nine months
ended March 31, 1996 decreased $.5 and $.2 million, or 17.8% and 3.0%,
respectively, compared with the corresponding periods of the previous year. The
decrease is due
8
<PAGE> 9
to the absence in the current year periods of accelerated amortization of
the remaining carrying value of leasehold improvements made to a hangar facility
at a domestic airport location in the prior year (the Accelerated Amortization).
Partially offsetting the decrease is additional depreciation in the current year
periods due mainly to purchases of ground handling equipment.
Selling, general and administrative expenses for the three and nine
months ended March 31, 1996 increased $1.4 and $2.1 million, or 40.8% and 20.3%,
respectively, compared with the corresponding periods of the previous year. The
increase primarily reflects the recording of higher provisions relating to: (i)
the Company's bonus and retirement plans; and (ii) stock appreciation rights as
a result of increases in the market price of the Company's common stock.
Earnings before equity in loss of joint venture and provision
(benefit)for income taxes for the three and nine months ended March 31, 1996,
increased $7.9 and $11.8 million compared with the corresponding periods of the
previous year due primarily to improved results from snow removal, ground
handling (including higher sales of de-icing fluid) and domestic aircraft
fueling operations. Adding to the increase for the three and nine months was the
absence of the Accelerated Amortization and a decrease in workers' compensation
insurance costs, and also adding to the increase for the nine months was the
elimination of operating losses associated with the Company's Canadian FBO's.
Partially offsetting the increases were higher selling, general and
administrative expenses as described above.
The Company's snow removal and aircraft de-icing services are seasonal in
nature. The results of these operations are normally reflected in the second and
third quarters of the fiscal year, and fluctuate depending upon the severity of
the winter season.
Results of the Company's aircraft ground handling operations fluctuate
depending upon the flight activity and schedules of customers and the ability of
the Company to deploy equipment and manpower in the most efficient manner to
service such customers.
The Company's 50% share of losses from its real estate joint venture in
Hawaii (the Venture) for the nine months ended March 31, 1996 increased $.3
million from, and for the three months ended March 31, 1996 approximated that
of, the corresponding period of the previous year. The increased loss for the
nine months is due primarily to higher interest - net as interest expense
increased due mainly to higher balances of partner advances payable. In
addition, the Venture's interest income decreased as a result of the reduction
in mortgage receivables. As is usual for companies with land development
operations, the contribution to
9
<PAGE> 10
future results from such operations will fluctuate depending upon land
sales closed in each reported period.
The Company's provision (benefit) for income taxes for the three and nine
months ended March 31, 1996, increased $5.3 and $6.9 million compared with the
corresponding periods of the previous year. The increase primarily reflects: (i)
increased pre-tax earnings in the U.S. and Canada; and (ii) the Company's
recognition in the previous year of $1.3 million of deferred tax assets
resulting from a reevaluation of the operating results of the Company's Canadian
subsidiary.
The state of the North American aviation industry has resulted in
increased competitive pressures on the pricing of aviation services and in the
exploration of alliances between major commercial airline carriers. While these
factors may have an adverse effect on the Company, several airlines have begun
to outsource services to independent aviation service companies. This trend, as
well as the Open Skies Agreement between the United States and Canada, which
provides increased access for airlines to fly between these bordering countries,
has provided additional opportunities for the Company. The Company is unable, at
this time, to evaluate the full impact of these factors.
10
<PAGE> 11
Liquidity and Capital Expenditures and Commitments
The Company's recurring sources of liquidity are funds provided from
operations and bank lines of credit. The Company has a Revolving Credit
Agreement (the Credit Agreement) with a group of banks which provides for a
revolving credit facility. Pursuant to the Credit Agreement, the Company may
borrow funds (including outstanding letters of credit) up to a limit of $18.3
million (the Limit) until March 31, 1997. At such time, and at the end of each
subsequent quarter, the Limit will be reduced by one-sixteenth of the Limit that
was in effect on December 31, 1996 until December 31, 2000, at which time the
Credit Agreement terminates. As of March 31, 1996, there were no direct
borrowings and $3.0 million of letters of credit were outstanding under the
Credit Agreement.On February 27, 1996, the Company entered into a Unit Purchase
and Option Agreement (the Purchase Agreement) with Lufthansa Airport and Ground
Services GmbH (LAGS), pursuant to which LAGS will acquire a 26% interest in the
Company's aviation services business, and will have an option to increase such
interest up to a maximum of 49%. The consummation of the transaction
contemplated by the Purchase Agreement is subject to certain conditions,
including the approval of the holders of a majority of the Company's outstanding
stock at a meeting scheduled to be held on May 23, 1996. In contemplation of
such transaction, the Company has begun discussion with the group of banks to
provide new banking agreements for the Company and Hudson General LLC (Hudson
LLC), a newly formed entity, which will conduct the aviation services business.
During the nine months ended March 31, 1996 and 1995, net cash provided
by operating activities was $14.0 and $12.6 million, respectively. Net cash used
by advances to the Hawaii joint venture was $.1 and $1.2 million for the nine
months ended March 31, 1996 and 1995, respectively. Capital expenditures, net of
proceeds from the sale of property and equipment, were $10.3 and $6.6 million
for the nine months ended March 31, 1996 and 1995, respectively. At March 31,
1996 cash and cash equivalents were $15.8 compared with $12.6 million at June
30, 1995. The increases in accounts receivable and accounts payable are
primarily attributable to the Company's snow removal and aircraft de-icing
services, which are seasonal in nature. At March 31, 1996 the Company had
commitments to fund $4.7 million for operating equipment, the majority of which
is expected to be expended during the fourth quarter of fiscal 1996. Capital
expenditures are primarily for equipment and facilities used in the Company's
operations. The Company is unable to determine the extent of additional future
capital expenditures since, as a service company, its capital expenditure
requirements fluctuate depending upon facility
11
<PAGE> 12
requirements and equipment purchases associated with the Company's
ability to successfully obtain additional contracts.
During fiscal 1995, the Board of Directors approved the repurchase of up
to 150,000 shares of the Company's common stock from time to time in either open
market or privately negotiated transactions. As of March 31, 1996, the Company
had repurchased 114,300 shares of its common stock in the open market for an
aggregate purchase price of $2.0 million pursuant to this authorization (see
Note 4).
At March 31, 1996, the Venture had commitments aggregating $3.3 million
for project expenditures. Included in this amount is $1.7 million for the
construction of water well equipment and a reservoir by June 30, 1996. The
Venture has begun the process to extend the date by which this expenditure need
be made. It is expected that funds for most of the Venture's other commitments
will be expended subsequent to fiscal 1996. As of March 31, 1996, the Venture
was obligated to repurchase the unpaid balance of mortgage receivables that were
previously sold to two banks, and in September 1996 would have been obligated to
repurchase the unpaid balance of additional mortgage receivables previously sold
to one of these banks. As of March 31, 1996, the aggregate unpaid balance in
respect of such mortgage receivables was $1.4 million. At March 31, 1996, the
Venture had $.4 million of cash available for its requirements. On April 30,
1996, the Company and its partner in the Venture, Oxford Kohala, Inc. (the
Partner) each advanced $.5 million to the Venture, and the Venture repurchased
all such mortgage receivables.
During fiscal 1992, the County of Hawaii passed an ordinance pursuant to
which the Venture, after subdivision approvals are obtained, would be able to
develop Phase IV of the project into 1,490 units. Pursuant to such ordinance,
the Venture is required to expend (in addition to the commitments noted above)
approximately $2.3 million for improvements and in lieu payments. Shortly after
passage of the ordinance, a lawsuit against the County of Hawaii was filed by
two local residents of Hawaii (Plaintiffs) seeking to invalidate such ordinance
on various grounds including that the ordinance was adopted without following
State of Hawaii procedure relating to the preparation of an Environmental Impact
Statement. During fiscal 1993, the Judge in this action granted Plaintiffs'
motion for partial summary judgment without indicating any effect on Phase IV
zoning. The County and the Venture have appealed this ruling. The appeal was
heard before the Hawaii Supreme Court in March 1994, and the Court has taken the
matter under advisement. The Venture cannot, at this time, determine the impact
12
<PAGE> 13
of the Court's ruling on the timing of development of Phase IV or the
expenditures related thereto.
The Joint Venture Agreement provides that the Company and the Partner are
obligated to make equal advances of any of the Venture's required fundings. It
is anticipated that the Venture's commitments will be funded by cash flow from
its operations and advances from the Company and the Partner. It is expected
that any advances which the Company may be required to make to the Venture will
be provided from the Company's cash flow and lines of credit. Pursuant to the
Credit Agreement the Company may advance up to $2.0 million to the Venture in
any fiscal year or up to $4.0 million during the term of the Credit Agreement,
net of any distributions received from the Venture by the Company during such
periods. Since the inception of the Credit Agreement through March 31, 1996, the
Company has increased its net advances to the Venture by $2.9 million after
giving effect to the repayment of the $.7 million of Additional Advances
referred to below, plus interest thereon. Distributions, if any, received by the
Company with respect to the Venture, net of advances made by the Company during
the applicable period, in excess of $4.0 million in any four consecutive
quarters, or in excess of $2.0 million in any fiscal year, reduce the Limit. At
present, it is anticipated that the advances required to meet the obligations of
the Venture will not exceed the limits set forth in the Credit Agreement or that
the Credit Agreement will be amended to allow for any excess.
The Partner is a subsidiary of Oxford First Corporation (Oxford First).
On October 13, 1994, Oxford First filed for reorganization under Chapter 11 of
the Bankruptcy Code. Pursuant to an order of the Bankruptcy Court, Oxford First
(through its subsidiary, The Oxford Finance Companies, Inc.) was permitted to
transfer certain amounts to the Partner. The amounts so authorized were not
sufficient to allow the Partner to make its full share of required advances. The
Company opted to make additional advances (the Additional Advances) to cover the
Partner's funding deficiency. During November 1995, the Partner resumed making
advances, and in January 1996, the Partner repaid to the Company the entire
amount of the Additional Advances of $.7 million together with interest thereon.
In addition, pursuant to an amended reorganization plan which was approved by
the Bankruptcy Court on September 7, 1995, Oxford First is permitted to transfer
funds to the Partner in an aggregate amount not to exceed $750,000 in each of
the calendar years 1996 and 1997. The Company, at present, is unable to
determine whether such permitted transfers will be sufficient in order for the
Partner to make its share of future advances to the Venture. Should the Partner
be unable to
13
<PAGE> 14
make its share of future advances to the Venture, the Company has
the option to make further advances on behalf of the Partner (subject to its
right of reimbursement) necessary up to the limits set forth in the Credit
Agreement. The Partner did not file for reorganization under Chapter 11 of the
Bankruptcy Code. During the nine months ended March 31, 1996, the Company
advanced $.8 million to the Venture, including Additional Advances of $.2
million that were repaid to the Company in January 1996.
The extent to which advances by the Company to the Venture will be
required in the future, as well as the timing of the return to the Company of
the advances made by it, will depend upon the amount of sales generated by the
Venture, the terms upon which parcels are sold, expenses incurred in the
planning and development of future phases of the project and the ability of the
Partner to fund its obligations under the Joint Venture Agreement. The general
economic climate has negatively impacted the sale of the Venture's land parcels.
It is expected that the sources of the Company's liquidity, as noted
above, will provide sufficient funding to allow the Company to meet its
liquidity requirements.
Upon closing of the transaction contemplated by the Purchase Agreement,
Hudson LLC will receive approximately $16 million in cash. The balance of the
purchase price of approximately $7.8 million, which is subject to potential
downward adjustment based on the future earnings of the aviation services
business, is payable in cash in three annual installments expected to be paid in
September 1996, 1997 and 1998. It is presently contemplated that approximately
$16 million of the proceeds from the sale to LAGS of a 26% interest in Hudson
LLC will be used by Hudson LLC to call the equivalent amount of the Company's 7%
Convertible Subordinated Debentures due 2011 (the Debentures) for redemption.
Such proceeds, to the extent that the Debentures are converted instead of being
redeemed, together with the deferred proceeds from such sale, will be used to
retire additional Debentures, to satisfy other indebtedness of Hudson LLC or for
other general purposes, including working capital requirements.
14
<PAGE> 15
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
In 1988, Texaco Canada, Inc. (Texaco) (now McColl-Frontenac Inc.)
instituted a lawsuit in the Supreme Court of Ontario, Canada against the
Company and Petro-Canada, Inc., the corporation which supplied aviation
fuel for the Company's Canadian fixed base operations. The suit's
allegations, as amended in 1992, are that the defendants interfered with
contractual and fiduciary relations and induced the breach of a fuel
supply agreement between Texaco and Innotech Aviation Limited (Innotech)
in connection with the purchase by the Company from Innotech in 1984 of
certain assets of Innotech's airport ground services business. The suit
seeks compensatory and punitive damages totaling $110,000,000 (Canadian)
(approximately $80,000,000 (U.S.)) plus all profits earned by the
defendants subsequent to the alleged breach. A trial date has been set
for May 1996. Innotech (which due to a name change is now called
Aerospace Realties (1986) Limited (Aerospace)) had agreed to defend and
indemnify the Company against claims of whatever nature asserted in
connection with, arising out of or resulting from the fuel supply
agreement with Texaco. By a letter dated February 15, 1996, the Company
was notified by Aerospace that Aerospace has entered into a liquidation
phase and can no longer defray the cost of defending this lawsuit or pay
for any damages resulting therefrom. Company management believes, and
counsel for the Company has advised based on available facts, that the
Company will successfully defend this action.
In March 1994, a jury in New York State Supreme Court in Manhattan, New
York rendered a verdict against the Company in a civil lawsuit for
personal injuries and awarded the plaintiff a total of $21,436,000 in
damages, of which $19,186,000 is covered by insurance. The suit arose
from an accident involving a collision between a vehicle operated by the
Company and another vehicle at JFK International Airport in New York. The
judge in the case subsequently vacated the $2,250,000 punitive damage
award (which is not covered by insurance) against the Company. The judge
also ruled that the jury's award of compensatory damages was excessive in
several respects, and held that this award should be reduced to
$9,600,000. The compensatory damages are fully covered by insurance. The
Company's insurance carrier appealed the judge's ruling, seeking to
further reduce the jury's award. The plaintiff cross-appealed the judge's
ruling which vacated the jury award of $2,250,000 in punitive damages
against the Company. However, in such cross-appeal, the plaintiff sought
to reinstate only $750,000 of such damages. On April 23, 1996, the
Appellate Division affirmed the judge's decision, including the judge's
decision to vacate the punitive damage award against the Company.
15
<PAGE> 16
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
10.4(c) Amendment effective January 23, 1996, amending the Form of
Severance Agreement between the Registrant and Michael
Rubin dated as of June 3, 1986.
10.4(d) Amended schedule of executive officers entitled to
benefits of Severance Agreements.
10.5(e) Amendment effective January 23, 1996, amending the
Employment Agreement between the Registrant and Jay B.
Langner dated July 28, 1988, as amended.
10.5(f) Amendment effective January 23, 1996, amending the
Severance Agreement between the Registrant and Jay B.
Langner dated April 16, 1990.
10.7(c) Amendment effective January 23, 1996, amending the Form of
Employment Agreement between the Registrant and Michael
Rubin dated February 8, 1990.
10.7(d) Amended schedule of executive officers entitled to
benefits of Employment Agreements.
11 Computations of Earnings Per Share Information, Primary
and Fully Diluted - Net Earnings.
27 Financial Data Schedule.
b) Reports on Form 8-K
Current Report on Form 8-K dated March 6, 1996, reporting under Item 5
Other Events (and including Item 7(c) Exhibits) that the Registrant
entered into a Unit Purchase and Option Agreement with Lufthansa Airport
and Ground Services GmbH, a German corporation (LAGS), pursuant to which
LAGS will acquire a 26% interest in the Registrant's aviation services
business, and will have an option to increase such interest up to a
maximum of 49%.
16
<PAGE> 17
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.
HUDSON GENERAL CORPORATION
(Registrant)
Date: May 6, 1996
/s/ JAY B. LANGNER
---------------------------
Jay B. Langner
President
/s/ MICHAEL RUBIN
---------------------------
Michael Rubin
Chief Financial Officer
17
<PAGE> 18
HUDSON GENERAL CORPORATION & SUBSIDIARIES
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
No. Exhibit Page No.
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
10.4(c) Amendment effective January 23, 1996, amending the Form of
Severance Agreement between the Registrant and Michael Rubin
10.4(d) Amended schedule of executive officers entitled to benefits of
Severance Agreements
10.5(e) Amendment effective January 23, 1996, amending the Employment
Agreement between the Registrant and Jay B. Langner
10.5(f) Amendment effective January 23, 1996, amending the Severance
Agreement between the Registrant and Jay B. Langner
10.7(c) Amendment effective January 23, 1996, amending the Form of
Employment Agreement between the Registrant and Michael Rubin
10.7(d) Amended schedule of executive officers entitled to benefits of
Employment Agreements
11 Computations of Earnings Per Share Information, Primary and
Fully Diluted - Net Earnings
27 Financial Data Schedule
</TABLE>
18
<PAGE> 1
EXHIBIT 10.4(c)
Amendment Effective
January 23, 1996, Amending
the Form of Severance Agreement
Between the Registrant and
Michael Rubin
19
<PAGE> 2
AMENDMENT TO
SEVERANCE AGREEMENT
WHEREAS, Michael Rubin (the "Executive") and Hudson General
Corporation, a Delaware corporation (the "Company"), entered into a Severance
Agreement as of June 3, 1986 (the "Agreement"); and
WHEREAS, the Executive and the Company wish to amend the
Agreement in certain respects;
NOW, THEREFORE, for good and valuable consideration, the
receipt of which is hereby acknowledged, the Executive and the Company agree
that the Agreement shall be amended, effective as of January 23, 1996, as set
forth herein.
Unless otherwise defined herein, capitalized terms used herein
shall have the meaning ascribed to such terms in the Agreement.
1. The portion of Section 1 of the Agreement which follows the
final semicolon is hereby amended in its entirety to read as follows:
provided, further, if a change in control of the Company shall have
occurred during the original or any extended term of this Agreement,
this Agreement shall continue in effect for a period of 48 months
beyond the month in which such change in control occurred.
Notwithstanding the foregoing, subsection 4(v) of this Agreement shall
survive the expiration of the term of this Agreement, and the Company
shall pay to you within 30 days following your termination of
employment the amounts payable under subsection 4(v) (without regard to
the expiration of the term of this Agreement).
2. Clause (A) of subsection 3(iii) is hereby amended in its
entirety to read as follows:
(A) the assignment to you of any duties inconsistent with your
status as Executive Vice President and Chief Financial Officer of the Company or
a substantial adverse alteration in the nature or status of your
20
<PAGE> 3
responsibilities from those in effect immediately prior to the change
in control of the Company;
3. The final sentence of subsection 4(iii)(G) of the Agreement
is hereby amended in its entirety to read as follows:
Such payments shall be made at the later of the times specified in
paragraph (F) above, or within five (5) days after your request for
payment accompanied with such evidence of fees and expenses incurred as
the Company reasonably may require.
4. The first two sentences of subsection 4(iv) of the
Agreement are hereby amended in their entirety to read as follows:
If your employment shall be terminated (A) by the Company other than
for Cause, Retirement or Disability or (B) by you for Good Reason, then
for a 36-month period after such termination, the Company shall arrange
to provide you with life, disability, accident and health insurance
benefits substantially similar to those which you are receiving
immediately prior to the Notice of Termination. Benefits otherwise
receivable by you pursuant to this Subsection 4(iv) shall be reduced to
the extent comparable benefits are actually received by you during the
36-month period following your termination, and any such benefits
actually received by you shall be reported to the Company.
5. Subsection 4(v) of the Agreement is hereby amended in its
entirety to read as follows:
(v) Notwithstanding any other provision of this Agreement to
the contrary, in the event that your employment is terminated for any
reason, in addition to any other obligations which the Company may have
to you as provided for in this Agreement, the Company shall pay you in
cash within 30 days following the Date of Termination a lump sum equal
to the difference between (i) the sum of (w) the amount that would have
been necessary to purchase an annuity in an amount that would have been
received by you under the Hudson General Corporation Pension Plan (the
"Pension Plan") had such Pension Plan not been terminated effective as
of June 30, 1992; (x) your Account Balance in
21
<PAGE> 4
the Hudson General Corporation Profit Sharing Plan (the "Profit Sharing
Plan") as of June 30, 1992; (y) an assumed annual contribution by the
Company under the Profit Sharing Plan beginning July 1, 1992 had it not
been amended effective as of June 30, 1992 (as amended, the Profit
Sharing Plan is referred to as the "401(k) Plan"), of one percent of
your compensation; and (z) an amount representing a rate of return on
the amounts referred to in clauses (i)(x) and (i)(y) equal to the
average return earned by the investment vehicles offered to all
participants in the 401(k) Plan from time to time to the date of
termination of your employment, and (ii) the amount you receive upon
termination of your employment under the 401(k) Plan from the sum of
(v) the Company's Profit Sharing contributions beginning July 1, 1992
under Section 4.1(c) of the 401(k) Plan; (w) Matching Contributions
under Section 4.1(b) of the 401(k) Plan assuming you received the
greatest allowable Matching Contribution for each Plan Year (beginning
July 1, 1992) of the 401(k) Plan; (x) your Account Balance in the
Profit Sharing Plan as of June 30, 1992; (y) the rollover into the
401(k) Plan of your lump sum distribution from the Pension Plan,
assuming that the full amount of your lump sum distribution had been so
rolled over; and (z) an amount representing a rate of return on the
amounts referred to in clauses (ii)(v), (ii)(w), (ii)(x) and (ii)(y)
equal to the average return earned by the investment vehicles offered
to all participants in the 401(k) Plan from time to time to the date of
termination of your employment.
In addition, the Company shall pay you in cash within 30 days
following the Date of Termination a lump sum equal to the amount to
which you would have been entitled under the second paragraph of
Section 11(c) of the Employment Agreement between you and the Company,
dated as of February 8, 1990 as amended from time to time (the
"Employment Agreement"), assuming that (1) such Employment Agreement
was still in effect and (2) your employment terminated on the Date of
Termination.
For purposes of determining the amount that would have been
necessary to purchase an annuity in accordance with clause (i)(w) of
this subsection 4(v) an interest rate shall be used equal to the rate
of interest on
22
<PAGE> 5
30-year Treasury securities determined as of the first
calendar month preceding the first day of the calendar year during
which the amount is determined, and a post age 65 mortality table shall
be used based on the prevailing commissioner's standard table
(described in Internal Revenue Code Section 807(d)(5)(A)) used to
determine reserves for group annuity contracts issued on the date as of
which a present value is being determined (without regard to any
subparagraph of Internal Revenue Code Section 807(d)(5)).
Notwithstanding anything in this subsection 4(v) of the
Agreement to the contrary, and for purposes of the annuity determined
in accordance with clause (i)(w), the Pension Plan shall be interpreted
as if the definition of Compensation had been amended for Plan Years
beginning on or after January 1, 1994 so that annual Compensation taken
into account shall not exceed $150,000, as adjusted by the Commissioner
of the Internal Revenue Service for increases in the cost of living in
accordance with Internal Revenue Code Section 401(a)(17)(B).
Notwithstanding anything in this subsection 4(v) of the
Agreement to the contrary, the Pension Plan shall also be assumed to
have amended the definition of Accrued Benefit to include the following
two paragraphs at the end of such definition:
Unless otherwise provided under the Plan, each
"section 401(a)(17) employee's" Accrued Benefit under this
Plan will be the greater of the Accrued Benefit determined
for the Employee under (a) or (b) below:
(a) the Employee's Accrued Benefit
determined with respect to the benefit formula
applicable for the Plan Year beginning on or after
January 1, 1994, as applied to the Employee's total
years of service taken into account under the Plan
for the purposes of benefit accruals, or
23
<PAGE> 6
(b) the sum of:
(1) the Employee's Accrued Benefit as
of the last day of the last Plan Year
beginning before January 1, 1994,
frozen in accordance with Regulation
1.401(a)(4)-13, and
(2) the Employee's Accrued Benefit
determined under the benefit formula
applicable for the Plan Year beginning
on or after January 1, 1994, as applied
to the Employee's years of service
credited to the Employee for Plan Years
beginning on or after January 1, 1994,
for purposes of benefit accruals.
A "section 401(a)(17) employee" means an Employee
whose current Accrued Benefit as of a date on or after the
first day of the first Plan Year beginning on or after
January 1, 1994, is based on Compensation for a year
beginning prior to the first day of the first Plan Year
beginning on or after January 1, 1994, that exceeded
$150,000.
Notwithstanding anything in this subsection 4(v) of this
Agreement to the contrary, if subsequent legislation amends any
provisions of pension law that would have affected the Pension Plan,
such amendments shall be applicable for calculations contemplated by
this subsection 4(v).
24
<PAGE> 7
Except as amended hereby, the Agreement shall remain in full
force and effect.
IN WITNESS WHEREOF, the Company has caused this Amendment to
be executed by a duly authorized officer of the Company and Executive has
executed this Amendment on this March 15, 1996.
HUDSON GENERAL CORPORATION
By:_______________________
Name: Jay B. Langner
President and
Chief Executive
Officer
__________________________
Michael Rubin
25
<PAGE> 1
EXHIBIT 10.4(d)
Amended Schedule of
Executive Officers
Entitled to Benefits of
Severance Agreements
26
<PAGE> 2
LUMP SUM PAYMENTS
UNDER THE
SEVERANCE AGREEMENTS*
<TABLE>
<CAPTION>
NAME POSITION MULTIPLIER
---- -------- TERM UPON ----------
CHANGE IN CONTROL**
-------------------
<S> <C> <C> <C>
Fernando DiBenedetto Senior Vice President - Operations 36 2
Paul Pollack Executive Vice President and Chief Operating 48 3
Officer
Raymond Reider Senior Vice President and Chief Marketing 48 3
Officer
Noah Rockowitz Vice President, General Counsel & Secretary 36 2
Michael Rubin Executive Vice President and Chief Financial 48 3
Officer
</TABLE>
* The provisions of the individual severance agreements differ only in the term
upon a change in control of the Registrant and the multiplier of average
compensation used to determine the lump sum payments.
**In months.
27
<PAGE> 1
EXHIBIT 10.5(e)
Amendment Effective
January 23, 1996, Amending
the Employment Agreement
Between the Registrant and
Jay B. Langner
28
<PAGE> 2
AMENDMENT TO
EMPLOYMENT AGREEMENT
WHEREAS, Jay B. Langner (the "Executive") and Hudson General
Corporation, a Delaware corporation (the "Company"), entered into an Employment
Agreement as of July 28, 1988, as amended from time to time (the "Agreement");
and
WHEREAS, the Executive and the Company wish to amend the
Agreement in certain respects;
NOW, THEREFORE, for good and valuable consideration, the
receipt of which is hereby acknowledged, the Executive and the Company agree
that the Agreement shall be amended, effective as of January 23, 1996, as set
forth herein.
Unless otherwise defined herein, capitalized terms used herein
shall have the meaning ascribed to such terms in the Agreement.
1. The second paragraph of the preamble of the Agreement is
hereby amended in its entirety to read as follows:
The Executive is presently employed as Chairman of the Board,
President and Chief Executive Officer of the Company.
2. The first three sentences of Section 2 of the Agreement are
hereby amended in their entirety to read as follows:
The employment of the Executive by the Company as provided in Section 1
hereof commenced on July 28, 1988 and will continue in effect through
January 31, 2001, unless sooner terminated as hereinafter provided.
During the period from July 28, 1988 through June 30, 1991 (the
"Original Term"), the terms and conditions of the Executive's
employment by the Company will be governed by the provisions of
Sections 1 through
29
<PAGE> 3
17 of this Agreement and the provisions of Sections 18 through 42 of
this Agreement shall be of no force or effect. This Agreement will be
extended beyond the Original Term for an additional period commencing
on July 1, 1991 ending on January 31, 2001 (the "Extended Term"),
unless on or before March 31, 1991, the Company shall provide a written
notice to the Executive that the Company is terminating this Agreement
effective at the expiration of the Original Term (a "Notice of
Non-Renewal").
3. Section 19 of the Agreement is hereby amended in its
entirety to read as follows:
19. Term. The employment of the Executive by the Company as
provided in Section 18 shall commence on July 1, 1991 and shall
continue in effect through January 31, 2001 (such period being referred
to herein as the "Extended Term"). Upon termination of the Executive's
employment with the Company for any reason whatsoever (including breach
or alleged breach of this Agreement by the Company), the Extended Term
shall be terminated. The date on which the Extended Term ends (whether
such date be January 31, 2001 or an earlier date as provided herein) is
referred to herein as the "Termination Date".
4. The first sentence of subsection 25(a) of the
Agreement is hereby amended in its entirety to read as follows:
Severance payments made to the Executive pursuant to Section 24(d)
hereof shall continue for a period equal to the greater of (i) three
years or (ii) the period from the Termination Date to January 31, 2001.
5. The last two sentences of subsection 25(b) of the
Agreement are hereby amended in their entirety to read as follows:
To the extent that the Executive does obtain other employment during
the Severance Payment Period,
30
<PAGE> 4
any compensation from such other employment received during the first
twelve months of the Severance Payment Period shall not reduce the
severance payments to be made to the Executive. After the first twelve
months of the Severance Payment Period, the Company's obligation to
provide severance pay shall be reduced to the extent compensation is
earned by the Executive as a result of other employment, and any such
compensation received by the Executive shall be reported to the
Company.
6. The first sentence of subsection 27(a) of the
Agreement is hereby amended in its entirety to read as follows:
If the Executive's employment is terminated (i) by the Company other
than for Cause or Disability or (ii) by the Executive for Good Reason,
and during the period from the Termination Date to January 31, 2001,
the Executive's right to exercise any options or stock appreciation
rights which were granted to him by the Company shall terminate by
reason of such termination of his employment without having been
exercised (the "Terminated Options and Rights"), then upon a Change in
Control (as defined in Section 27(b) below) of the Company on or before
January 31, 2001, within ten days of such Change in Control the
Executive shall be entitled to receive from the Company a lump sum
amount, in cash, equal to the sum of the "Spreads" for each Terminated
Option and Right.
7. Subsection 28(b)(ii)(x) of the Agreement is hereby
amended in its entirety to read as follows:
the retirement pension (determined as a straight life annuity
commencing at age 65) which the Executive would have accrued under
terms of the pension plan as in effect on the Termination Date,
determined as if the Executive were fully vested thereunder and had
accumulated additional service credit thereunder until January 31,
2001, at the Executive's Salary rate in effect on the
31
<PAGE> 5
Termination Date (but in no event shall the Executive be deemed to have
accumulated additional months of service credit after his sixty-fifth
birthday), and
8. Section 28 of the Agreement is hereby amended by
inserting the following sentence at the end of subsection (b):
Notwithstanding the foregoing, the provisions of this subsection 28(b)
are applicable only to the extent specifically provided for in
subsection 28(c) set forth below.
9. Section 28 of the Agreement is hereby amended by
adding a new subsection (c) as follows:
(c) Notwithstanding any other provision of this Agreement to
the contrary, in the event the Executive's employment is terminated
prior to an Expiration Date for any reason (including, without
limitation, termination by reason of Retirement or termination by the
Executive for Good Reason), in addition to any other obligations which
the Company may have to the Executive as provided for in this
Agreement, the Company shall pay the Executive in cash within 30 days
following the Termination Date a lump sum equal to the difference
between (i) the sum of (w) the amount that would have been necessary to
purchase an annuity in an amount that would have been received by the
Executive under the Hudson General Corporation Pension Plan (the
"Pension Plan") had such Pension Plan not been terminated effective as
of June 30, 1992; (x) the Executive's Account Balance in the Hudson
General Corporation Profit Sharing Plan (the "Profit Sharing Plan") as
of June 30, 1992; (y) an assumed annual contribution by the Company
under the Profit Sharing Plan beginning July 1, 1992 had it not been
amended effective as of June 30, 1992 (as amended, the Profit Sharing
Plan is referred to as the "401(k) Plan"), of one percent of the
Executive's Compensation; and (z) an amount representing a rate of
return on the amounts referred to in
32
<PAGE> 6
clauses (i)(x) and (i)(y) equal to the average return earned by the
investment vehicles offered to all participants in the 401(k) Plan from
time to time to the date of termination of the Executive's employment,
and (ii) the amount the Executive receives upon such termination of
employment under the 401(k) Plan from the sum of (v) the Company's
Profit Sharing contributions beginning July 1, 1992 under Section
4.1(c) of the 401(k) Plan; (w) Matching Contributions under Section
4.1(b) of the 401(k) Plan assuming the Executive received the greatest
allowable Matching Contribution for each Plan Year (beginning July 1,
1992) of the 401(k) Plan; (x) the Executive's Account Balance in the
Profit Sharing Plan as of June 30, 1992; (y) the rollover into the
401(k) Plan of such Executive's lump sum distribution from the Pension
Plan, assuming that the full amount of such lump sum distribution had
been so rolled over; and (z) an amount representing a rate of return on
the amounts referred to in clauses (ii)(v), (ii)(w), (ii)(x) and
(ii)(y) equal to the average return earned by the investment vehicles
offered to all participants in the 401(k) Plan from time to time to the
date of termination of the Executive's employment.
In addition, in the event the Executive's employment is
terminated under the circumstances specified in clauses (i) or (ii) of
subsection 28(b) of this Agreement, the Company shall pay the Executive
in cash within 30 days following the Termination Date a lump sum equal
to the excess, if any, between (A) the amount calculated pursuant to
clause (x) of subsection 28(b), assuming for such calculation that the
Pension Plan had not been terminated effective as of June 30, 1992, and
(B) the amount calculated pursuant to clause (i)(w) of this subsection
28(c).
For purposes of determining the amount that would have been
necessary to purchase an annuity in accordance with clause (i)(w) of
this subsection 28(c) an interest rate shall be used equal to the rate
of interest on 30-year Treasury securities
33
<PAGE> 7
determined as of the first calendar month preceding the first day of
the calendar year during which the amount is determined, and a post age
65 mortality table shall be used based on the prevailing commissioner's
standard table (described in Internal Revenue Code Section
807(d)(5)(A)) used to determine reserves for group annuity contracts
issued on the date as of which a present value is being determined
(without regard to any subparagraph of Internal Revenue Code Section
807(d)(5)).
Notwithstanding anything in this subsection 28(c) of the
Agreement to the contrary, and for purposes of the annuity determined
in accordance with clause (i)(w), the Pension Plan shall be interpreted
as if the definition of Compensation had been amended for Plan Years
beginning on or after January 1, 1994 so that annual Compensation taken
into account shall not exceed $150,000, as adjusted by the Commissioner
of the Internal Revenue Service for increases in the cost of living in
accordance with Internal Revenue Code Section 401(a)(17)(B).
Notwithstanding anything in this subsection 28(c) of the
Agreement to the contrary, the Pension Plan shall also be assumed to
have amended the definition of Accrued Benefit to include the following
two paragraphs at the end of such definition:
Unless otherwise provided under the Plan, each
"section 401(a)(17) employee's" Accrued Benefit under this
Plan will be the greater of the Accrued Benefit determined for
the Employee under (a) or (b) below:
(a) the Employee's Accrued Benefit
determined with respect to the benefit formula
applicable for the Plan Year beginning on or after
January 1, 1994, as applied to the Employee's total
years of service taken into account under the Plan
for the purposes of benefit accruals, or
34
<PAGE> 8
(b) the sum of:
(1) the Employee's Accrued Benefit as of
the last day of the last Plan Year
beginning before January 1, 1994, frozen
in accordance with Regulation
1.401(a)(4)-13, and
(2) the Employee's Accrued Benefit
determined under the benefit formula
applicable for the Plan Year beginning
on or after January 1, 1994, as applied
to the Employee's years of service
credited to the Employee for Plan Years
beginning on or after January 1, 1994,
for purposes of benefit accruals.
A "section 401(a)(17) employee" means an
Employee whose current Accrued Benefit as of a date
on or after the first day of the first Plan Year
beginning on or after January 1, 1994, is based on
Compensation for a year beginning prior to the first
day of the first Plan Year beginning on or after
January 1, 1994, that exceeded $150,000.
Notwithstanding anything in this subsection 28(c) of this
Agreement to the contrary, if subsequent legislation amends any
provisions of pension law that would have affected the Pension Plan,
such amendments shall be applicable for calculations contemplated by
this subsection 28(c).
10. The first sentence of Section 29 of the Agreement is
hereby amended in its entirety to read as follows:
Concurrently with the execution of this Amendment to the Agreement, the
Company and the Executive are entering into an agreement dated April
16, 1990 ("the Severance Agreement"), as amended from time to time,
which Severance Agreement, by its terms, shall not become effective
until the commencement of the Extended Term.
35
<PAGE> 9
11. Section 33 of the Agreement is hereby amended in its
entirety to read as follows:
33. Restrictive Covenant.
For the purposes of this Section 33, the "Company" shall mean the
Company (as previously defined) and any entity in which the Company (as
previously defined) directly or indirectly holds a majority of the
equity interest.
(a) During the Severance Payment Period and for a period of 12
months thereafter or, in the case of the Executive's termination of
employment under Section 23(d)(i)(B) hereof, for a period of 12 months
following the effective date of such termination, so long as the
Company is not in breach of its obligations hereunder, the Executive
agrees that he will not, directly or indirectly, render services to, be
employed by, participate in or be connected in any manner with the
ownership, management, operation or control (except as to the ownership
of not more than two percent of the outstanding stock of any
corporation or entity, the securities of which are traded on a regular
basis on recognized securities exchanges or on a regular basis in
over-the-counter markets) of any Competing Business. For the purpose of
this Section 33, a Competing Business shall mean any person,
corporation, partnership, other entity or organization which is engaged
in any business or operations conducted by the Company as of the
Termination Date.
(b) The Executive hereby further agrees that, so long as the
Company is not in breach of its obligations hereunder, for a period
equal to the greater of (i) the period commencing on the Termination
Date and continuing for one year thereafter or (ii) the period
commencing on the Termination Date and ending at the end of the
Severance Payment Period, he will not, directly or indirectly, on his
own behalf or on behalf of any other person, firm, corporation,
partnership or entity, without the prior written consent and to the
extent permitted by the Board, cause or induce or attempt to cause or
induce any person who is then an employee of the Company to terminate
his or her employment with the Company, or to become employed by or
enter into an employment
36
<PAGE> 10
relationship with any other person, corporation, partnership or entity,
or endorse or recommend to any other person, corporation, partnership
or entity that they employ or solicit for employment any such
individual; provided, however, the Executive shall not be prohibited
from furnishing a reference if requested by a person who has been
advised by the Company in writing that his or her employment is being
terminated or not renewed by the Company. Nothing contained herein
shall prohibit the Executive from furnishing a reference if requested
by a person who previously has left the employ of the Company.
(c) If the Executive breaches the provisions of this Section
33, then, so long as the Company is not in breach of its obligations
hereunder, and subject to the provisions of Section 41, the Company
shall be entitled to cease all payments under the Agreement.
Furthermore, the Executive acknowledges that the services to be
rendered by him or her hereunder are of a character giving this
Agreement a unique value; and that as such, a breach of the provisions
of this Section 33 cannot be reasonably or adequately compensated in
damages in an action at law. Accordingly, the Executive agrees that the
Company shall be entitled to temporary and permanent injunctive relief
against any breach of the provisions of this Section 33 by the
Executive, and that such relief may be granted without the necessity of
proving actual damages. This provision respecting injunctive relief
shall not, however, diminish the right of the Company to claim and
recover damages in addition to injunctive relief.
37
<PAGE> 11
Except as amended hereby, the Agreement shall remain in full
force and effect.
IN WITNESS WHEREOF, the Company has caused this Amendment to
be executed by a duly authorized officer of the Company and Executive has
executed this Amendment on this March 15, 1996.
HUDSON GENERAL CORPORATION
By:_______________________
Name: Michael Rubin
Title: Executive Vice
President
__________________________
Jay B. Langner
38
<PAGE> 1
EXHIBIT 10.5(f)
Amendment Effective
January 23, 1996, Amending
the Severance Agreement
Between the Registrant and
Jay B. Langner
39
<PAGE> 2
AMENDMENT TO
SEVERANCE AGREEMENT
WHEREAS, Jay B. Langner (the "Executive") and Hudson General
Corporation, a Delaware corporation (the "Company"), entered into a Severance
Agreement as of April 16, 1990 (the "Agreement"); and
WHEREAS, the Executive and the Company wish to amend the
Agreement in certain respects;
NOW, THEREFORE, for good and valuable consideration, the
receipt of which is hereby acknowledged, the Executive and the Company agree
that the Agreement shall be amended, effective as of January 23, 1996, as set
forth herein.
Unless otherwise defined herein, capitalized terms used herein
shall have the meaning ascribed to such terms in the Agreement.
1. The portion of Section 1 of the Agreement which follows the
final semicolon is hereby amended in its entirety to read as follows:
provided, further, if a change in control of the Company shall have
occurred during the original or any extended term of this Agreement,
this Agreement shall continue in effect for a period of 48 months
beyond the month in which such change in control occurred.
Notwithstanding the foregoing, subsection 4(v) of this Agreement shall
survive the expiration of the term of this Agreement, and the Company
shall pay to you within 30 days following your termination of
employment the amounts payable under subsection 4(v) (without regard to
the expiration of the term of this Agreement).
2. Subsection 4(v) of the Agreement is hereby amended in its
entirety to read as follows:
(v) Notwithstanding any other provision of this Agreement to
the contrary, in the event that your employment is terminated for any
reason, in addition to any other obligations which the Company may have
to you as provided for in this Agreement, the Company shall pay you
40
<PAGE> 3
in cash within 30 days following the Date of Termination a lump sum
equal to the difference between (i) the sum of (w) the amount that
would have been necessary to purchase an annuity in an amount that
would have been received by you under the Hudson General Corporation
Pension Plan (the "Pension Plan") had such Pension Plan not been
terminated effective as of June 30, 1992; (x) your Account Balance in
the Hudson General Corporation Profit Sharing Plan (the "Profit Sharing
Plan") as of June 30, 1992; (y) an assumed annual contribution by the
Company under the Profit Sharing Plan beginning July 1, 1992 had it not
been amended effective as of June 30, 1992 (as amended, the Profit
Sharing Plan is referred to as the "401(k) Plan"), of one percent of
your compensation; and (z) an amount representing a rate of return on
the amounts referred to in clauses (i)(x) and (i)(y) equal to the
average return earned by the investment vehicles offered to all
participants in the 401(k) Plan from time to time to the date of
termination of your employment, and (ii) the amount you receive upon
termination of your employment under the 401(k) Plan from the sum of
(v) the Company's Profit Sharing contributions beginning July 1, 1992
under Section 4.1(c) of the 401(k) Plan; (w) Matching Contributions
under Section 4.1(b) of the 401(k) Plan assuming you received the
greatest allowable Matching Contribution for each Plan Year (beginning
July 1, 1992) of the 401(k) Plan; (x) your Account Balance in the
Profit Sharing Plan as of June 30, 1992; (y) the rollover into the
401(k) Plan of your lump sum distribution from the Pension Plan,
assuming that the full amount of your lump sum distribution had been so
rolled over; and (z) an amount representing a rate of return on the
amounts referred to in clauses (ii)(v), (ii)(w), (ii)(x) and (ii)(y)
equal to the average return earned by the investment vehicles offered
to all participants in the 401(k) Plan from time to time to the date of
termination of your employment.
In addition, the Company shall pay you in cash within 30 days
following the Date of Termination a lump sum equal to the amount to
which you would have been entitled under the second paragraph of
Section 28(c) of the Employment Agreement between you and the Company,
dated as of July 28, 1988, as amended from time to time (the
"Employment Agreement"), assuming that (1) such Employment
41
<PAGE> 4
Agreement was still in effect and (2) your employment terminated on the
Date of Termination.
For purposes of determining the amount that would have been
necessary to purchase an annuity in accordance with clause (i)(w) of
this subsection 4(v) an interest rate shall be used equal to the rate
of interest on 30-year Treasury securities determined as of the first
calendar month preceding the first day of the calendar year during
which the amount is determined, and a post age 65 mortality table shall
be used based on the prevailing commissioner's standard table
(described in Internal Revenue Code Section 807(d)(5)(A)) used to
determine reserves for group annuity contracts issued on the date as of
which a present value is being determined (without regard to any
subparagraph of Internal Revenue Code Section 807(d)(5)).
Notwithstanding anything in this subsection 4(v) of the
Agreement to the contrary, and for purposes of the annuity determined
in accordance with clause (i)(w), the Pension Plan shall be interpreted
as if the definition of Compensation had been amended for Plan Years
beginning on or after January 1, 1994 so that annual Compensation taken
into account shall not exceed $150,000, as adjusted by the Commissioner
of the Internal Revenue Service for increases in the cost of living in
accordance with Internal Revenue Code Section 401(a)(17)(B).
Notwithstanding anything in this subsection 4(v) of the
Agreement to the contrary, the Pension Plan shall also be assumed to
have amended the definition of Accrued Benefit to include the following
two paragraphs at the end of such definition:
Unless otherwise provided under the Plan, each
"section 401(a)(17) employee's" Accrued Benefit under this
Plan will be the greater of the Accrued Benefit determined for
the Employee under (a) or (b) below:
(a) the Employee's Accrued Benefit
determined with respect to the benefit formula
applicable for the Plan Year beginning on or after
January 1, 1994, as applied to the Employee's total
years of service taken into
42
<PAGE> 5
account under the Plan for the purposes of benefit
accruals, or
(b) the sum of:
(1) the Employee's Accrued Benefit as of
the last day of the last Plan Year
beginning before January 1, 1994, frozen
in accordance with Regulation
1.401(a)(4)-13, and
(2) the Employee's Accrued Benefit
determined under the benefit formula
applicable for the Plan Year beginning
on or after January 1, 1994, as applied
to the Employee's years of service
credited to the Employee for Plan Years
beginning on or after January 1, 1994,
for purposes of benefit accruals.
A "section 401(a)(17) employee" means an Employee
whose current Accrued Benefit as of a date on or after the
first day of the first Plan Year beginning on or after January
1, 1994, is based on Compensation for a year beginning prior
to the first day of the first Plan Year beginning on or after
January 1, 1994, that exceeded $150,000.
Notwithstanding anything in this subsection 4(v) of this
Agreement to the contrary, if subsequent legislation amends any
provisions of pension law that would have affected the Pension Plan,
such amendments shall be applicable for calculations contemplated by
this subsection 4(v).
43
<PAGE> 6
Except as amended hereby, the Agreement shall remain in full
force and effect.
IN WITNESS WHEREOF, the Company has caused this Amendment to
be executed by a duly authorized officer of the Company and Executive has
executed this Amendment on this March 15, 1996.
HUDSON GENERAL CORPORATION
By:_______________________
Name: Michael Rubin
Title: Executive Vice
President
__________________________
Jay B. Langner
44
<PAGE> 1
EXHIBIT 10.7(c)
Amendment Effective
January 23, 1996, Amending
the Form of Employment Agreement
Between the Registrant and
Michael Rubin
45
<PAGE> 2
AMENDMENT TO
EMPLOYMENT AGREEMENT
WHEREAS, Michael Rubin (the "Executive") and Hudson General
Corporation, a Delaware corporation (the "Company"), entered into an Employment
Agreement as of February 8, 1990 (the "Agreement"); and
WHEREAS, the Executive and the Company wish to amend the
Agreement in certain respects;
NOW, THEREFORE, for good and valuable consideration, the
receipt of which is hereby acknowledged, the Executive and the Company agree
that the Agreement shall be amended, effective as of January 23, 1996, as set
forth herein.
Unless otherwise defined herein, capitalized terms used herein
shall have the meaning ascribed to such terms in the Agreement.
1. The second paragraph of the preamble of the Agreement
is hereby amended in its entirety to read as follows:
The Executive is presently employed as Executive Vice
President and Chief Financial Officer of the Company.
2. The first sentence of Section 2 of the Agreement is
hereby amended in its entirety to read as follows:
The employment of the Executive by the Company as provided in Section 1
hereof shall commence on the date hereof and shall continue in effect
through December 31, 1998 (the "Expiration Date"); provided, however,
that commencing on September 30, 1998 and each third September 30
thereafter, the Expiration Date shall automatically be extended for
three additional years to December 31 of the third succeeding year
unless, not later than such September 30, the Company shall have given
written notice to the Executive that the Company does not wish to
extend this Agreement (a "Notice of Non-Renewal").
3. Subsection 6(d)(i)(B) of the Agreement is hereby
amended in its entirety to read as follows:
46
<PAGE> 3
(B) as of any Expiration Date upon 30 days' prior written notice to the
Company, or as of any other date upon 60 days' prior written notice to
the Company.
4. The first two sentences of Section 8(a) of the
Agreement are hereby amended in their entirety to read as follows:
Severance payments made to the Executive pursuant to section 7(d)
hereof shall continue for a period of 24 months following the
Termination Date. Severance payments made to the Executive pursuant to
Section 7(e) hereof shall continue for a period equal to the greater of
(i) 24 months or (ii) the period from the Termination Date to the
Expiration Date.
5. The last two sentences of Section 8(b) of the
Agreement are hereby amended in their entirety to read as follows:
To the extent that the Executive does obtain other employment during
the Severance Payment Period, any compensation from such other
employment received during the first 12 months of the Severance Payment
Period shall not reduce the severance payments to be made to the
Executive. After the first 12 months of the Severance Payment Period,
the Company's obligation to provide severance pay shall be reduced to
the extent compensation is earned by the Executive as a result of other
employment, and any such compensation received by the Executive shall
be reported to the Company.
6. Section 11 of the Agreement is hereby amended by
inserting the following at the end of subsection (b):
Notwithstanding the foregoing, the provisions of this subsection 11(b)
are applicable only to the extent specifically provided for in
subsection 11(c) set forth below.
7. Section 11 of the Agreement is hereby amended by
adding a new subsection (c) as follows:
47
<PAGE> 4
(c) Notwithstanding any other provision of this Agreement to
the contrary, in the event the Executive's employment is terminated
prior to an Expiration Date for any reason (including, without
limitation, termination by reason of Retirement or termination by the
Executive for Good Reason), in addition to any other obligations which
the Company may have to the Executive as provided for in this
Agreement, the Company shall pay the Executive in cash within 30 days
following the Termination Date a lump sum equal to the difference
between (i) the sum of (w) the amount that would have been necessary to
purchase an annuity in an amount that would have been received by the
Executive under the Hudson General Corporation Pension Plan (the
"Pension Plan") had such Pension Plan not been terminated effective as
of June 30, 1992; (x) the Executive's Account Balance in the Hudson
General Corporation Profit Sharing Plan (the "Profit Sharing Plan") as
of June 30, 1992; (y) an assumed annual contribution by the Company
under the Profit Sharing Plan beginning July 1, 1992 had it not been
amended effective as of June 30, 1992 (as amended, the Profit Sharing
Plan is referred to as the "401(k) Plan"), of one percent of the
Executive's Compensation; and (z) an amount representing a rate of
return on the amounts referred to in clauses (i)(x) and (i)(y) equal to
the average return earned by the investment vehicles offered to all
participants in the 401(k) Plan from time to time to the date of
termination of the Executive's employment, and (ii) the amount the
Executive receives upon such termination of employment under the 401(k)
Plan from the sum of (v) the Company's Profit Sharing contributions
beginning July 1, 1992 under Section 4.1(c) of the 401(k) Plan; (w)
Matching Contributions under Section 4.1(b) of the 401(k) Plan assuming
the Executive received the greatest allowable Matching Contribution for
each Plan Year (beginning July 1, 1992) of the 401(k) Plan; (x) the
Executive's Account Balance in the Profit Sharing Plan as of June 30,
1992; (y) the rollover into the 401(k) Plan of such Executive's lump
sum distribution from the Pension Plan, assuming that the full amount
of such lump sum distribution had been so rolled over; and (z) an
amount representing a rate of return on the amounts referred to in
clauses (ii)(v), (ii)(w), (ii)(x) and (ii)(y) equal to the average
return earned by the investment vehicles offered to all participants in
the 401(k) Plan from time
48
<PAGE> 5
to time to the date of termination of the Executive's employment.
In addition, in the event the Executive's employment is
terminated under the circumstances specified in clauses (i) or (ii) of
subsection 11(b) of this Agreement, the Company shall pay the Executive
in cash within 30 days following the Termination Date a lump sum equal
to the excess, if any, between (A) the amount calculated pursuant to
clause (x) of subsection 11(b), assuming for such calculation that the
Pension Plan had not been terminated effective as of June 30, 1992, and
(B) the amount calculated pursuant to clause (i)(w) of this subsection
11(c).
For purposes of determining the amount that would
have been necessary to purchase an annuity in accordance with
clause (i)(w) of this subsection 11(c) an interest rate shall
be used equal to the rate of interest on 30-year Treasury
securities determined as of the first calendar month preceding
the first day of the calendar year during which the amount is
determined, and a post age 65 mortality table shall be used
based on the prevailing commissioner's standard table
(described in Internal Revenue Code Section 807(d)(5)(A)) used
to determine reserves for group annuity contracts issued on
the date as of which a present value is being determined
(without regard to any subparagraph of Internal Revenue Code
Section 807(d)(5)).
Notwithstanding anything in this subsection 11(c) of
the Agreement to the contrary, and for purposes of the annuity
determined in accordance with clause (i)(w), the Pension Plan
shall be interpreted as if the definition of Compensation had
been amended for Plan Years beginning on or after January 1,
1994 so that annual Compensation taken into account shall not
exceed $150,000, as adjusted by the Commissioner of the
Internal Revenue Service for increases in the cost of living
in accordance with Internal Revenue Code Section
401(a)(17)(B).
Notwithstanding anything in this subsection 11(c) of
the Agreement to the contrary, the Pension
49
<PAGE> 6
Plan shall also be assumed to have amended the definition of
Accrued Benefit to include the following two paragraphs at the
end of such definition:
Unless otherwise provided under the Plan,
each "section 401(a)(17) employee's" Accrued Benefit
under this Plan will be the greater of the Accrued
Benefit determined for the Employee under (a) or (b)
below:
(a) the Employee's Accrued Benefit
determined with respect to the benefit
formula applicable for the Plan Year
beginning on or after January 1, 1994, as
applied to the Employee's total years of
service taken into account under the Plan
for the purposes of benefit accruals, or
(b) the sum of:
(1) the Employee's Accrued
Benefit as of the last day of
the last Plan Year beginning
before January 1, 1994, frozen
in accordance with Regulation
1.401(a)(4)-13, and
(2) the Employee's Accrued
Benefit determined under the
benefit formula applicable for
the Plan Year beginning on or
after January 1, 1994, as
applied to the Employee's years
of service credited to the
Employee for Plan Years
beginning on or after January 1,
1994, for purposes of benefit
accruals.
A "section 401(a)(17) employee" means an
Employee whose current Accrued Benefit as of a date
on or after the first day of the first Plan Year
beginning on or after January 1, 1994, is based on
Compensation for a year beginning prior to the first
day of the first Plan Year
50
<PAGE> 7
beginning on or after January 1, 1994, that
exceeded $150,000.
Notwithstanding anything in this subsection 11(c) of this
Agreement to the contrary, if subsequent legislation amends any
provisions of pension law that would have affected the Pension Plan,
such amendments shall be applicable for calculations contemplated by
this subsection 11(c).
8. The first sentence of Section 12 of the Agreement is
hereby amended in its entirety to read as follows:
The Company and the Executive are parties to an agreement dated June 3,
1986, as amended from time to time, relating to the Executive's
employment in the event of a "change in control" of the Company (the
"Severance Agreement").
9. Section 16 of the Agreement is hereby amended in its
entirety to read as follows:
16. Restrictive Covenant.
For the purposes of this Section 16, the "Company" shall mean the
Company (as previously defined) and any entity in which the Company (as
previously defined) directly or indirectly holds a majority of the
equity interest.
(a) During the Severance Payment Period and for a period of 12
months thereafter or, in the case of the Executive's termination of
employment under Section 6(d)(i)(B) hereof, for a period of 12 months
following the effective date of such termination, so long as the
Company is not in breach of its obligations hereunder, the Executive
agrees that he will not, directly or indirectly, render services to, be
employed by, participate in or be connected in any manner with the
ownership, management, operation or control (except as to the ownership
of not more than two percent of the outstanding stock of any
corporation or entity, the securities of which are traded on a regular
basis on recognized securities exchanges or on a regular basis in
over-the-counter markets) of any Competing Business. For the purpose of
this Section 16, a Competing Business shall mean any person,
corporation, partnership, other entity or organization which is engaged
51
<PAGE> 8
in any business or operations conducted by the Company as of the
Termination Date.
(b) The Executive hereby further agrees that, so long as the
Company is not in breach of its obligations hereunder, for a period
equal to the greater of (i) the period commencing on the Termination
Date and continuing for one year thereafter or (ii) the period
commencing on the Termination Date and ending at the end of the
Severance Payment Period, he will not, directly or indirectly, on his
own behalf or on behalf of any other person, firm, corporation,
partnership or entity, without the prior written consent and to the
extent permitted by the Board, cause or induce or attempt to cause or
induce any person who is then an employee of the Company to terminate
his or her employment with the Company, or to become employed by or
enter into an employment relationship with any other person,
corporation, partnership or entity, or endorse or recommend to any
other person, corporation, partnership or entity that they employ or
solicit for employment any such individual; provided, however, the
Executive shall not be prohibited from furnishing a reference if
requested by a person who has been advised by the Company in writing
that his or her employment is being terminated or not renewed by the
Company. Nothing contained herein shall prohibit the Executive from
furnishing a reference if requested by a person who previously has left
the employ of the Company.
(c) If the Executive breaches the provisions of this Section
16, then, so long as the Company is not in breach of its obligations
hereunder, and subject to the provisions of Section 24, the Company
shall be entitled to cease all payments under the Agreement.
Furthermore, the Executive acknowledges that the services to be
rendered by him or her hereunder are of a character giving this
Agreement a unique value; and that as such, a breach of the provisions
of this Section 16 cannot be reasonably or adequately compensated in
damages in an action at law. Accordingly, the Executive agrees that the
Company shall be entitled to temporary and permanent injunctive relief
against any breach of the provisions of this Section 16 by the
Executive, and that such relief may be granted without the necessity of
proving actual damages. This provision respecting injunctive relief
shall not, however, diminish
52
<PAGE> 9
the right of the Company to claim and recover damages in addition to
injunctive relief.
Except as amended hereby, the Agreement shall remain in full
force and effect.
IN WITNESS WHEREOF, the Company has caused this Amendment to
be executed by a duly authorized officer of the Company and Executive has
executed this Amendment on this March 15, 1996.
HUDSON GENERAL CORPORATION
By:_______________________
Name: Jay B. Langner
President and
Chief Executive
Officer
__________________________
Michael Rubin
53
<PAGE> 1
EXHIBIT 10.7(d)
Amended Schedule of
Executive Officers
Entitled to Benefits
of Employment Agreements
54
<PAGE> 2
SEVERANCE PAYMENTS
UNDER THE
EMPLOYMENT AGREEMENTS (1)
<TABLE>
<CAPTION>
NAME POSITION TERM(2) MINIMUM SEVERANCE
---- -------- ------- TOTAL PAYMENTS
SEVERANCE NOT SUBJECT TO
PAYMENTS (2) MITIGATION(2)
------------ --------------
<S> <C> <C> <C> <C>
Fernando DiBenedetto Senior Vice President - Operations 24 18 9
Paul Pollack Executive Vice President and Chief 36 24 12
Operating Officer
Raymond Reider Senior Vice President and Chief 36 24 12
Marketing Officer
Noah Rockowitz Vice President, General Counsel & 24 18 9
Secretary
Michael Rubin Executive Vice President and Chief 36 24 12
Financial Officer
</TABLE>
(1) The provisions of the individual employment agreements differ only in
the term and the amount of potential severance payments.
(2) In months.
55
<PAGE> 1
EXHIBIT 11
Computations of Earnings Per Share Information,
Primary and Fully Diluted - Net Earnings.
56
<PAGE> 2
HUDSON GENERAL CORPORATION AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE INFORMATION
PRIMARY - NET EARNINGS
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
March 31, March 31,
1996 1995 1996 1995
------------------ -------------------
(in thousands, except
per share amounts)
<S> <C> <C> <C> <C>
Net earnings for computing earnings
per share - primary.................. $6,059 $3,474 $8,934 $4,342
====== ====== ====== ======
Weighted average number of
common and common equivalent
shares outstanding................... 1,187 1,258 1,175 1,260
====== ====== ====== ======
Net earnings per common and
common equivalent share-primary...... $ 5.10 $ 2.76 $ 7.60 $ 3.45
====== ====== ====== ======
</TABLE>
57
<PAGE> 3
HUDSON GENERAL CORPORATION AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE INFORMATION
FULLY DILUTED - NET EARNINGS
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
March 31, March 31,
1996 1995 1996 1995
--------------- ---------------
(in thousands, except
per share amounts)
<S> <C> <C> <C> <C>
Net earnings for computing
earnings per share - primary .......................... $6,059 $3,474 $8,934 $4,342
Reduction of interest expense less applicable income
taxes assuming conversion of 7% convertible
subordinated debentures due 2011 ...................... 283 280 856 853
------ ------ ------ ------
Net earnings for computing earnings
per share-fully diluted ............................... $6,342 $3,754 $9,790 $5,195
====== ====== ====== ======
Weighted average number of common and common
equivalent shares outstanding ......................... 1,190 1,258 1,187 1,263
Addition from assumed conversion as of the beginning
of each period of the 7% convertible subordinated
debentures outstanding at the end of each period ...... 885 885 885 885
------ ------ ------ ------
Weighted average number of common and common
equivalent shares outstanding on a fully diluted
basis ................................................. 2,075 2,143 2,072 2,148
====== ====== ====== ======
Net earnings per common and
common equivalent share - fully diluted ............... $ 3.06 $ 1.75 $ 4.72 $ 2.42
====== ====== ====== ======
</TABLE>
58
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> MAR-31-1996
<CASH> 15,770,000
<SECURITIES> 0
<RECEIVABLES> 24,431,000
<ALLOWANCES> 0
<INVENTORY> 1,043,000
<CURRENT-ASSETS> 46,799,000
<PP&E> 38,573,000
<DEPRECIATION> 0
<TOTAL-ASSETS> 104,336,000
<CURRENT-LIABILITIES> 43,321,000
<BONDS> 28,990,000
0
0
<COMMON> 1,268,000
<OTHER-SE> 28,900,000
<TOTAL-LIABILITY-AND-EQUITY> 104,336,000
<SALES> 131,755,000
<TOTAL-REVENUES> 131,755,000
<CGS> 95,786,000
<TOTAL-COSTS> 114,306,000
<OTHER-EXPENSES> 12,486,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 327,000
<INCOME-PRETAX> 15,389,000
<INCOME-TAX> 6,455,000
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,934,000
<EPS-PRIMARY> 7.60
<EPS-DILUTED> 4.72
</TABLE>
