FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
For The Fiscal Year Ended December 31, 1993
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ____________________ to____________________
Commission File Number 1-3122
OGDEN CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 13-5549268
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
Two Pennsylvania Plaza, New York, NY 10121
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code - (212) 868-6100
Securities registered pursuant to Section 12(b) of the Act:
NAME OF EACH EXCHANGE ON
TITLE OF EACH CLASS WHICH REGISTERED
Common Stock, par value New York Stock Exchange
$.50 per share
$1.875 Cumulative Convertible New York Stock Exchange
Preferred Stock (Series A)
5% Convertible Debentures Due 1993 New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
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 by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendments to
this Form 10-K.
[ ]
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The aggregate market value of registrant's voting stock, held by non-
affiliates based on the New York Stock Exchange closing price as reported in
the consolidated transaction reporting system as of the close of business on
March 1, 1994 was as follows:
Common Stock, par value $.50 per share $970,959,364
$1.875 Cumulative Convertible
Preferred Stock (Series A) $ 7,683,234
The number of shares of the registrant's Common Stock outstanding as of
March 1, 1994 was 43,535,872 shares.
The following documents are hereby incorporated by reference into this
Form 10-K:
(1) Portions of the Registrant's Annual Report to Shareholders for the year
ended December 31, 1993 (Parts II and IV).
(2) Portions of the Registrant's 1994 Proxy Statement to be filed with the
Securities and Exchange Commission (Part III).
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PART I
Item 1. BUSINESS
Ogden Corporation (hereafter together with its consolidated
subsidiaries referred to as "Ogden" or the "Company") has its
offices located at Two Pennsylvania Plaza, New York, New York
10121, pursuant to a lease that expires on April 30, 1998 and which
contains an option by Ogden to renew for an additional five years.
Ogden is a diversified company primarily engaged in providing
services through subsidiaries within each of its Operating Services
and Waste-to-Energy Operations as described below:
I. OPERATING SERVICES
Ogden Services Corporation ("Ogden Services"), a wholly
owned subsidiary of Ogden, provides services through each
of its operating groups. The principal groups and
services provided by each are as follows: (i) Ogden
Aviation Services provides ground services, catering and
fueling of aircraft at domestic and foreign airports;
(ii) Ogden Entertainment Services provides facility
management, concert promotions, food, beverage and
novelty concession services and maintenance services at
amphitheaters, stadiums, arenas and other venues; (iii)
Ogden Environmental and Energy Services provides
independent power generation, engineering and consulting
services in the environmental and energy markets; (iv)
Ogden Government Services and Atlantic Design Company
provides engineering design, drafting and technical
services; building and repairing electronic systems; and
a broad range of technical support, logistics, and
operation and maintenance services; and (v) Ogden
Facility Services provides a broad range of turnkey
facility management, housekeeping, mechanical
maintenance, energy management, security, warehousing,
shipping and receiving services.
In addition, Ogden Services provides the removal or
encapsulation of asbestos from office buildings and other
structures and, through its 50% ownership in Universal
Ogden Services, provides food and housekeeping services
to offshore drilling rigs and logistical support services
to remote industrial campsites in the United States and
abroad.
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II. Waste-to-Energy Operations
Ogden Projects, Inc. ("OPI"), an 84.2% owned subsidiary
of Ogden, through its wholly owned subsidiaries, provides
waste disposal services throughout the United States.
Its principal business, conducted largely through its
wholly owned subsidiary, Ogden Martin Systems, Inc.
("OMS") provides waste-to-energy services through
designing, permitting, constructing, assisting in
financing and operating and maintaining waste-to-energy
facilities. These waste-to-energy facilities combust
municipal solid waste to make saleable energy in the form
of electricity or steam. OMS holds the exclusive rights
to market a proprietary mass-burn technology, the
principal feature of which is the reverse-reciprocating
stoker grate upon which the waste is burned. This
technology is used by OPI in most of the waste-to-energy
facilities it designs and constructs in the United States
and abroad. OPI is also pursuing opportunities to
develop independent power projects that utilize fuels
other than waste, as well as pursuing opportunities to
operate and maintain wastes and wastewater processing
facilities.
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The amounts of revenue from sales and services to
unaffiliated customers, operating profit or loss, and identifiable
assets attributable to each of Ogden's two major operating areas
and foreign operations, if any, for each of the last three fiscal
years are set forth on pages 41 and 42 of Ogden's 1993 Annual
Report to Shareholders certain specified portions of which are
incorporated herein by reference.
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OPERATING SERVICES
The operations of Ogden's Operating Services are performed by
Ogden Services Corporation ("Ogden Services") through its five
major operating groups as follows: Ogden Aviation Services; Ogden
Entertainment Services; Ogden Environmental and Energy Services;
Atlantic Design Company and Ogden Government Services; and Ogden
Facility Services. This organizational structure is described in
more detail below.
Ogden Services, through wholly-owned subsidiaries within each
of the foregoing major operating groups, provides a wide range of
services to private and public facilities. Its principal customers
include airlines, transportation terminals, sports arenas,
stadiums, banks, owners and tenants of office buildings, state,
local and Federal governments, universities and other institutions
and large industrial organizations that are leaders in such fields
as plastics, chemicals, drugs, tires, petroleum and electronics.
Ogden Services' bills most of its work on a cost-plus or
fixed-price and time and material basis. Where services are
performed on a cost-plus basis, the customer reimburses the
appropriate Ogden Services' group for all reimbursable expenditures
made in connection with the job (in some instances with a limit on
the reimbursed amount) and also pays a fee, which may be a
percentage of the reimbursable expenditures, a specific dollar
amount, or a combination of the two. Fixed-price contracts, in
most cases, contain escalation clauses increasing the fixed price
in the event, and to the extent, that there are increases in
payroll and related cost.
Many of the contracts in the Ogden Aviation Services and Ogden
Facility Services areas are written on a month-to-month basis or
provide for a longer or indefinite term but are terminable by
either party on notice varying from 30 to 180 days.
OGDEN AVIATION SERVICES
The Ogden Aviation Services group provides specialized support
services to over 200 airlines at 90 cities throughout the United
States, Canada, Mexico, Germany, Czech Republic, The Netherlands,
Brazil, Peru, Chile, Venezuela, New Zealand, Australia and other
locations.
The specialized support services provided by this group
includes comprehensive ground handling, inflight catering and
aviation fueling. These services are performed through contracts
with individual airlines, through consolidated agreements with
several airlines, and contracts with various airport authorities.
Within the area of inflight catering, Ogden Aviation Services
operates 14 inflight kitchens for over 85 airline customers.
Locations include John F. Kennedy International and LaGuardia
Airports in New York; Newark International Airport in New Jersey;
Los Angeles and San Francisco International Airports in California;
Miami International Airport in Florida; Washington Dulles
International near Washington, D.C.; McCarren International in Las
Vegas, Nevada; and Honolulu International in Hawaii. During 1993,
Ogden Aviation Services signed new inflight catering contracts with
Aeromexico, British Airways, EVA Airways, Malev Hungarian Airlines
and Mexicana Airlines, among others. The Ogden Aviation inflight
kitchen at Honolulu International also received a three year
contract from NAVATEK, a Hawaiian cruise line, to provide catering
services for its two cruise ships.
Ogden Aviation Services also operates fueling facilities,
including storage and hydrant fueling systems for the fueling of
aircraft. This operation assists airlines in designing, arranging
financing for, and installing underground fueling systems. These
fueling operation services are principally performed in the North
American market. However, Ogden Aviation Services will begin
providing these services in Latin America following the award of
contracts in Puerto Rico and Panama.
Ground handling services include diversified ramp operations
such as baggage unloading and loading, aircraft cleaning, aircraft
maintenance, flight planning, de-icing, cargo warehouse operations
and passenger-related services such as ticketing, check-in, porter
("skycap") service, passenger lounge operations and other
miscellaneous services.
Global expansion by this service group has resulted in the
start-up of operations at several international locations over the
past several years. For example, in Germany services are performed
at eight different airports throughout the country; service at
Schiphol International Airport in Amsterdam began in 1993;
comprehensive ground handling services are provided at Auckland
International Airport in New Zealand under a ten year licensing
agreement; and services are provided in the Czech Republic through
a 50% interest in a Prague-based airport handling company. In
Canada Ogden Aviation Services provides ground handling and other
related services at the Pearson International Airport in Toronto
and the Mirabel and Dorval Airports in Montreal.
During December 1993 Ogden Aviation Services began providing
comprehensive ground handling services in Caracas, Venezuela at
Simon Bolivar International Airport. Through an 80% owned company
Ogden Aviation also began providing ground handling services at the
Arturo Merino Benitez Airport in Santiago, Chile. Ogden Aviation
continues to perform Air Aruba's aviation ground service operations
at Reina Beatrix International Airport in Aruba through a
corporation jointly owned by Ogden and Air Aruba with Ogden
Aviation Services controlling and performing all day-to-day ground
service operations at the airport.
OGDEN ENTERTAINMENT SERVICES
The Ogden Entertainment Services group provides total facility
management services, concert promotions, food, beverage and novelty
concessions, janitorial, security, parking, and other maintenance
services to a wide variety of public and private facilities located
in the United States, Mexico, Canada and the United Kingdom.
Many of the operating contracts and concession leases under
which this group operates are individually negotiated and vary
widely as to duration. Concession contracts usually provide for
payment by an Ogden Entertainment Services subsidiary of
commissions or rentals based on a stipulated percentage of gross
sales or net profits, sometimes with a minimum rental or payment.
Facility management contracts are usually on a cost-plus fee basis.
Food and beverage service in the United States is provided at
more than 100 stadiums, convention and exposition centers, arenas,
parks, amphitheaters, fairgrounds and racetracks, including the
following: Anaheim Stadium (Anaheim, California); Rich Stadium
(Buffalo, New York); the U.S. Air Arena (Landover, Maryland); the
Milwaukee Exposition and Convention Center (Milwaukee, Wisconsin);
the Los Angeles Convention Center and The Great Western Forum (Los
Angeles, California); the Kingdome (Seattle, Washington);
Philadelphia Veterans Stadium (Philadelphia, Pennsylvania); Market
Square Arena (Indianapolis, Indiana); Target Center (Minneapolis,
Minnesota); McNichols Arena (Denver, Colorado); and Cobo Hall
(Detroit, Michigan).
During 1993 this service group was awarded a ten year contract
to provide concession and novelty services at the Tempe Diablo
Stadium in Tempe, Arizona; a five year contract to provide food,
beverage and novelty services at the University of Oklahoma
Stadium, and the Lloyd Noble Center, located in Norman, Oklahoma;
a ten year contract to provide food and beverage services at
Fiddler's Green Amphitheatre located in Englewood, Colorado; a ten
year contract to provide food, beverage and concession services at
the MGM Grand Gardens Arena located in Las Vegas, Nevada at the MGM
Grand Hotel; and a ten year contract to provide concession and
novelty services at the Sandstone Amphitheatre located in Kansas
City, Missouri. During 1993 Ogden Entertainment Services also
entered a new market pursuant to a ten year contract to provide
food and beverage services at the San Jose Swap Meet, the largest
open-air market in California.
Ogden Entertainment Services also provides food and beverage
services at the 20,000 seat Starlake Amphitheater near Pittsburgh,
Pennsylvania and concession and catering services at zoos located
in Seattle, Washington and Cleveland, Ohio.
Various combinations of security, parking, maintenance and
janitorial services at accounts such as The Great Western Forum;
U.S. Air Arena; and The Palace (Auburn Hills, Michigan) are also
provided by this service group.
Ogden Entertainment Services has facility management
agreements for various convention centers, arenas and public
facilities including the Pensacola Civic Center in Pensacola,
Florida; the Sullivan Arena and Egan Convention Center in
Anchorage, Alaska; and the Rosemont Horizon, near Chicago,
Illinois. In each of these facilities, Entertainment Services
provides a comprehensive support service program. Facility
management agreements are generally billed on a cost-plus fee
basis.
Ogden Entertainment Services, through long-term management and
concession agreements, provides management services, food, beverage
and novelty concessions and maintenance services at the Target
Center in Minneapolis and The Great Western Forum in Los Angeles.
Ogden Entertainment Services through its agreement with the City of
Anaheim provides the exclusive operation of the food, beverage and
novelty concessions at Anaheim Stadium, a 70,000 seat stadium
located in Anaheim, California adjacent to the City's recently
opened Arrowhead Pond (see below for further discussion of
Arrowhead Pond).
In Mexico, this service group has a 27% equity interest in a
company which manages the Sports Palace, a 22,000 seat arena, and
the Autodrome, a 45,000 seat open air facility, located in Mexico
City, as well as the new amphitheater in Monterey Mexico that will
be able to accommodate about 18,000 people. Ogden Entertainment
also owns a 51% equity interest in a company that provides food and
beverage concessions at the Sports Palace, Autodrome and Monterey
Amphitheater.
In Canada, Ogden Entertainment provides food, beverage and
novelty concessions at the Saint John Regional Exhibition Centre
located in New Brunswick, Canada and at Lansdowne Park in Ottawa,
Canada.
The New London Stadium, a 20,000 seat soccer stadium near
London, England, for which Ogden acted as design and marketing
consultants during construction, was opened during 1993. The
Stadium serves as the home stadium for the Millwall Football Club
and Ogden Entertainment Services, through a ten year contract,
provides food and beverage services at the Stadium. Ogden
Entertainment Services also provides design and consulting services
at the 18,000 seat Victoria station Arena in Manchester, England
which Ogden Entertainment will manage and operate pursuant to a 20-
year lease upon its scheduled completion during 1994.
Ogden Entertainment Services also leases and operates a
thoroughbred and harness racetrack in Illinois and five off-track
betting parlors in Illinois where it telecasts races from Fairmount
Park and other racing facilities. Restaurants and other food and
beverage services are provided by Ogden Entertainment Services at
these facilities. Racing days are usually awarded on an annual
basis and a large portion of the track's revenue is derived from
its share of the pari-mutual handle, which can be adjusted by state
legislation. Other income is derived from admission charges,
parking, programs and concessions.
Pursuant to the Amended and Restated Arena Management
Agreement (the "Management Agreement"), between Ogden Facility
Management Corporation of Anaheim ("OFMA"), a wholly owned
subsidiary of Ogden Services, and the City of Anaheim, California
(the "City"), OFMA manages and operates the recently completed
Arrowhead Pond which is owned by the City and located within the
City of Anaheim. The Pond is a multi-purpose facility capable of
accommodating professional basketball and hockey, concerts and
other attractions, and has a maximum seating capacity of
approximately 19,400. Construction of the Pond was financed
through the sale of municipal securities issued by an
instrumentality of the City in January, 1991. OFMA has agreed that
the Pond, under OFMA's management, will generate a minimum amount
of revenues computed in accordance with the 30-year Management
Agreement between the City and OFMA. OFMA's obligations under the
Management Agreement are guaranteed by Ogden. Ogden Entertainment
Services has an agreement with the Walt Disney Company for a 30-
year lease at the Pond where The Walt Disney Company's new National
Hockey League team, the Mighty Ducks, began playing during the
1993/1994 hockey season.
OGDEN ENVIRONMENTAL AND ENERGY SERVICES (OEES)
OEES provides a comprehensive range of environmental,
infrastructure and energy consulting, engineering and design
services to industrial and commercial companies, electric utilities
and governmental agencies. Environmental services include analysis
and characterization, remedial investigations, analytical testing,
engineering and design, data management, project management, and
regulatory assistance to detect, evaluate, solve and monitor
environmental problems and health and safety risks. Infrastructure
services include environmental, civil, geotechnical, transportation
and sanitary engineering, urban and regional planning and storm
water management. Energy services include regulatory assistance,
nuclear safety and engineering, and consulting services relating to
nuclear waste management, security engineering and design services,
and independent power production.
Services are provided to a variety of clients in the public
and private sectors in the United States and abroad. Principal
clients include major Federal agencies, particularly the Department
of Defense and the Department of Energy as well as major
corporations in the chemical, petroleum, transportation, public
utility and health care industries and Federal and state regulatory
authorities. Approximately 30% of OEES's revenues is derived from
contracts or subcontracts with departments or agencies of the
United States Government. United States Government contracts may
be terminated, in whole or in part, at the convenience of the
government or for cause. In the event of a convenience
termination, the government is obligated to pay the costs incurred
by OEES under the contract plus a fee based upon work completed.
As of December 31, 1993, OEES's backlog of orders amounted to
approximately $120 million, of which approximately $37 million
represented government orders that were not yet funded; as of
December 31, 1992, the comparable amounts were $87 million and $14
million, respectively.
This service group continues to provide professional
environmental engineering services, including program management,
to the United States Navy CLEAN Program (Comprehensive Long Term
Environmental Action Navy) pursuant to a $100 million contract
awarded during 1991. Thus far OEES has provided these services in
Hawaii and Guam.
Through Catalyst New Martinsville Hydroelectric Corporation,
OEES manages and operates the New Martinsville Hydroelectric Plant
under a long-term lease with the City of New Martinsville, West
Virginia. The plant has been in operation since 1988 and rated at
approximately 40 megawatts of power. The plant's electrical output
is sold to the Monongahela Power Company under a long-term power
sales agreement.
An OEES subsidiary, as a 50% partner in the Heber Geothermal
Company ("HGC"), a partnership with Centennial Geothermal, Inc.
leases and operates a 47-megawatt (net) power plant in Heber,
California. The power is sold to Southern California Edison. The
working interest in the geothermal field, which is adjacent to and
supplies fluid to the power plant, is owned by a partnership
composed of an OEES subsidiary and Centennial Field, Inc., an
unaffiliated company. Separate subsidiaries of OEES have the
contracts to operate and maintain both the Well field, which
currently produces approximately eight million pounds per hour of
fluid, and the power plant.
During 1993 OEES received a four year contract from the State
of Tennessee's Department of Transportation to survey road and
stream bid profiles and perform underwater inspections and sounding
around bridge foundations; Air Force bases in Ohio, Michigan and
North Carolina were added to OEES' $25.0 million, three year
contract with the U.S. Air Force Center for Environmental
Excellence for the removal of storage tanks and contaminated soil
from Air Force bases across the United States and in U.S.
territories; and, OEES was one of four contractors selected by the
U.S. Air Force to competitively bid for work valued at $195 million
over five years to identify, investigate and remediate
environmental contamination problems at the Kelly Air Force Base,
Texas.
OEES continued the development of its mixed waste analytical
business through the modified portion of its analytical laboratory
in Fort Collins, Colorado which opened during 1993 and analyzes
mixtures of nuclear and non-nuclear hazardous waste. This mixed
waste laboratory provides testing services for the Department of
Energy and other Federal government agencies involved in the clean
up of government facilities.
OEES is continuing to examine the European market for long-
term expansion of all of its services. During 1993 it acquired a
privately-owned environmental, water resources and geotechnical
consulting firm in Spain; was awarded an environmental services
contract by the U.S. Army Corps of Engineers, Europe District, to
provide environmental site assessments in Frankfurt, Germany; and,
pursuant to a one year contract is working with the Chevron
Overseas Petroleum, Inc.'s Tengizchevroil Joint Venture Project and
the Republic of Kazakhstan, Russia to develop an environmental
protection public health and safety plan.
OGDEN GOVERNMENT SERVICES AND ATLANTIC DESIGN COMPANY
Ogden Government Services
The Ogden Government Services group functions through five
operating groups: W.J. Schafer Associates, Inc. ("WJSA"), the
Systems group, the Engineering group, the Biomedical Services
group, and Operations Support Services group. Through these
operating groups Ogden Government Services offers to private
industry and Federal, state and local government agencies a broad
range of engineering and technical support services; biomedical
research and biological repository services; software design,
integration and related services; systems engineering integration,
management and logistics support; consulting, total facility
management; property management; management support services and
software; and maintenance services of all types required to
maintain and operate governmental facilities worldwide.
The WJSA group currently provides technology and engineering
services and consultation in space-based and free electron laser,
high energy systems research to the Ballistic Missile Defense
Organization as well as technical research to the other agencies
within the Department of Defense. During 1993 major awards
included a contract by the Ballistic Missile Defense Organization
to provide technical support to the Innovative Science Technology
Directorate and by the Coleman Research Corporation to provide
system engineering and technical assistance support for the Theater
High Altitude Area Defense Project.
The Engineering and Systems groups provide systems and
software engineering and related services to the U.S. Navy, the
General Services Administration, the Office of Personnel Management
and many other Federal and state agencies. During 1993 these
groups were awarded several large contracts ranging from one to
five years in duration, including contracts by: The Department of
Defense, to assist Unisys Government Systems with its Defense
Enterprise Integration Services program; the Naval Command Control
and Ocean Surveillance Center, to provide systems engineering,
configuration management and other support services for naval
combat systems; the State of Wisconsin to provide software systems
transfer support to its Kids Information Data System; and the
Internal Revenue Service to modernize its tax collection process.
The Operations Support Services group provides custodial
operations and maintenance, building management, logistical
support, construction and repairs, and vehicle maintenance services
to many Federal and state government facilities throughout the
country. The group currently provides perimeter security in the
United States embassies in Panama and the Bahamas as well as
logistic functions at various other bases in the United States
pursuant to contracts with the Department of Defense as well as a
wide variety of operations and maintenance services for the U.S.
Army's European Redistribution facilities located at Nahbollenbach
and Hanau, Germany. During 1993 this group was awarded a complete
facility management contract by the Department of Defense for the
National Information Center, its top-secret facility located in
Washington, D.C.
The Bioservices group operates repositories and provides
services in support of the National Institute of Health, the Walter
Reed Army Institute of Research, the Federal Drug Administration,
the National Institute of Allergy and Infectious Diseases, the
National Cancer Institute and other health agencies.
Atlantic Design Company, Inc. ("Atlantic Design")
Atlantic Design with principal offices located in Charlotte,
North Carolina and engineering facilities located in Livingston,
New Jersey and New York, provides engineering design, drafting and
technical services, as well as turn-key, integrated services in
electronics contract manufacturing and assembly and through its
Lenzar operation in Florida develops and markets medical products
and custom image capturing products. Atlantic Design provides
services to various industries, including such customers as IBM,
Seiko, Compaq, Diasonics, AT&T, E.Systems, Decision Data, LXE and
Pratt and Whitney.
Atlantic Design's services also include the design of
mechanical, electro-mechanical and electronic equipment; technical
writing; engineering analysis; building, testing and repairing
electronic assemblies and equipment; and the development of
prototype equipment for a variety of industries. Atlantic Design's
customers are primarily in the computer, medical and electronic
industries located in the Eastern United States.
During 1993 Atlantic Design was awarded a contract by Sequoia
Pacific Systems to assemble electronic voting booths for the State
of Louisiana as well as contracts from Compaq Computer, Seiko and
AT&T.
OGDEN FACILITY SERVICES
The Ogden Facility Services group (formerly Ogden Building
Services and Ogden Industrial Services) provides a comprehensive
range of facility management, maintenance and manufacturing support
services to industrial, commercial, electric utilities, and
education and institutional customers throughout the United States
and Canada.
The range of services provided include total facility
management; facility operations and maintenance; operations,
maintenance and repair of production equipment; security and
protection; housekeeping; landscaping and grounds care; energy
management; warehousing and distribution; project and construction
management; and skilled craft support services.
Ogden Facility Services' commercial and office building
customers include the World Trade Center and the American Express
Tower in New York, Phillips Petroleum Headquarters in Bartlesville,
Oklahoma, and A.T.& T. at several sites in New Jersey. Facility's
industrial and manufacturing customers include IBM, Chrysler,
Colgate Palmolive, Bridgestone/Firestone, Exxon, Dow Chemical,
American Cyanamid and Martin Marietta.
The group continues to expand its support to the institutional
and educational marketplace. Customers include the University of
Miami; New York University; Clark Atlanta University in Georgia;
and Concordia University in Montreal, Canada.
During 1993 the group was awarded a five year contract by the
Orlando Utility Commission (OUC) to provide support services at
OUC's Orlando and Titusville, Florida plants. Additional awards
included The Bank of New York (Housekeeping Services); Geon
Company, formerly B.F. Goodrich (Warehousing and Distribution
Services); Ameritech (Facility Management) and Ford Stamping Plant
in Chicago Heights, Illinois (Facility Maintenance).
Ogden Facility Services, in conjunction with Ogden Projects,
Inc., also provides services to the waste-to-energy plants in
operation, or being built, by Ogden Martin Systems, Inc. on a cost-
plus basis as negotiated between Ogden Martin and Ogden Facility
Services.
OTHER SERVICES
Ogden Services also provides services relating to the removal
and encapsulation of asbestos-containing materials from office
buildings and other facilities and arranges for the transport of
such material to approved disposal sites. Asbestos-remediation
jobs are being performed principally in the greater Manhattan-New
York metropolitan area. The market for asbestos removal and
encapsulation services by office buildings and large residential
complexes, industrial plants, airports and other public facilities
has been greatly reduced over the past several years and Ogden
Services' continued involvement in this industry is reviewed on an
annual basis.
Through Universal Ogden Services, a joint venture based in
Seattle, Washington, services are provided to a wide range of
facilities where people live for extended periods of time, such as
remote job sites and oil rigs. Food and housekeeping services are
currently provided to offshore oil production platforms and
drilling rigs in the Gulf of Mexico, the North Sea, the West Coast
of Africa and South America, for oil production and drilling
companies. Logistical support services, including catering,
housing, security, operations, and maintenance are provided to
remote industrial campsites located in the United States and
abroad.
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WASTE-TO-ENERGY OPERATIONS
OGDEN PROJECTS, INC.
Ogden Projects, Inc. ("OPI"), through its wholly-owned
subsidiaries, provides waste disposal services throughout the
United States. Its principal business, conducted through wholly-
owned subsidiaries, including Ogden Martin Systems, Inc. ("OMS"),
is providing waste-to-energy services. Waste-to-energy facilities
combust municipal solid waste to make saleable energy in the form
of electricity or steam.
OPI was organized as a wholly-owned subsidiary of Ogden
(together with its subsidiaries, "Ogden") in 1984. Through OMS it
holds the exclusive rights to use the proprietary technology (the
"Martin Technology") of Martin GmbH fur Umwelt - und Energietechnik
of Germany ("Martin") in the United States, other Western
Hemisphere locations and Israel. In addition, OPI has exclusive
rights to use the Martin Technology on a full service design,
construct and operate basis in Germany, the Netherlands, Denmark,
Norway, Sweden, Finland, Poland, and Italy. The Martin Technology
is used in over 150 waste-to-energy facilities operating worldwide,
principally in Europe, the Far East and the United States.
OPI completed construction of its first waste-to-energy
facility in 1986 and currently operates twenty-five waste-to-energy
projects at twenty-four locations. Three facilities are under
construction. OPI is the owner or lessee of seventeen of these
projects. Additional projects are in various stages of
development.
During early 1993, OPI acquired all of the United States
waste-to-energy business of Asea Brown Boveri, Inc. through the
acquisition of the stock of one of its indirect, wholly-owned
subsidiaries. By virtue of the acquisition, OPI became the
operator of these facilities. These three facilities do not employ
the Martin Technology. OPI also owns and operates four additional
facilities that do not utilize the Martin technology.
OPI has taken preliminary steps toward expanding its waste-to-
energy business internationally. It is also pursuing opportunities
to develop independent power projects that utilize fuels other than
waste. In addition, OPI is pursuing opportunities to operate and
maintain water and wastewater processing facilities.
WASTE-TO-ENERGY SERVICES
In most cases, OPI, through wholly-owned subsidiaries
("Operating Subsidiaries"), provides waste-to-energy services
pursuant to long term service contracts ("Service Agreements") with
local governmental units sponsoring the waste-to-energy project
("Client Communities"). OPI has projects currently under
development for which there is no sponsoring Client Communities and
may in the future undertake other such projects.
<PAGE>
<PAGE>
(a) Terms and Conditions of Service Agreements. Waste-to-
energy projects are generally awarded by Client Communities
pursuant to competitive procurement. OPI has also built and is
operating projects that were not competitively bid. Following
award, the Client Community and the winning vendor must agree upon
the final terms of the Service Agreement.
Following execution of a Service Agreement between the
Operating Subsidiary and the Client Community, several conditions
must be met before construction commences. These usually include,
among other things, financing the facility, executing an agreement
providing for the sale of the energy produced by the facility,
purchase or lease of the facility site, and obtaining of required
regulatory approvals, including the issuance of environmental and
other permits required for construction. In many respects,
satisfaction of these conditions are not wholly within OPI's
control and accordingly, implementation of an awarded project is
not assured or may occur only after substantial delays. OPI incurs
substantial costs in preparing bids and, if it is the successful
bidder, implementing the project so it meets all conditions
precedent to the commencement of construction. In some instances
OPI has made contractual arrangements with communities that provide
partial recovery of development costs if the project fails to go
into construction for reasons beyond OPI's control.
Each Service Agreement is different in order to reflect the
specific needs and concerns of the Client Community, applicable
regulatory requirements and other factors. The following
description sets forth terms that are generally common to these
agreements.
Pursuant to the Service Agreement, the Operating Subsidiary
designs the facility, generally applies for the principal permits
required for its construction and operation and helps to arrange
for financing. The Operating Subsidiary then constructs and equips
the facility on a fixed price and schedule basis. The actual
construction and installation of equipment is performed by
contractors under the supervision of the Operating Subsidiary. The
Operating Subsidiary bears the risk of costs exceeding the fixed
price of the facility and may be charged liquidated damages for
construction delays, unless caused by the Client Community or
unforeseen circumstances beyond OPI's control, such as changes of
law ("Unforeseen Circumstances"). After the facility successfully
completes acceptance testing, the Operating Subsidiary operates and
maintains the facility for an extended term, generally 20 years or
more.
Under the Service Agreement, the Operating Subsidiary
generally guarantees that the facility will meet minimum processing
capacity and efficiency standards, energy production levels and
environmental standards. The Operating Subsidiary's failure to
meet these guarantees or to otherwise observe the material terms of
the Service Agreement, (unless caused by the Client Community or
Unforeseen Circumstances) may result in liquidated damages to the
Operating Subsidiary or, if the breach is substantial, continuing
and unremedied, the termination of the Services Agreement, in which
case the Operating Subsidiary may be obligated to discharge project
indebtedness.
The Service Agreement requires the Client Community to deliver
minimum quantities of municipal solid waste ("MSW") to the facility
and, regardless of whether that quantity of waste is delivered to
the facility, to pay a service fee. These fees are further
described below. Generally, the Client Community also provides or
arranges for debt financing. Additionally, the Client Community
bears the cost of disposing ash residue from the facility and, in
many cases, of transporting the residue to the disposal site.
Generally, expenses resulting from the delivery of unacceptable and
hazardous waste to the facility and from the presence of hazardous
materials on the site are also borne by the Client Community. In
addition, the Client Community is also generally responsible to pay
increased expenses and capital costs resulting from Unforeseen
Circumstances, subject to limits which may be specified in the
Service Agreement.
Ogden guarantees the Operating Subsidiaries performance of
their respective Service Agreements.
(b) Other arrangements for providing Waste-to-Energy Services.
OPI owns two facilities which are not operated pursuant to Service
Agreements with Client Communities, and is currently developing,
and may undertake in the future, additional such projects. In such
projects, OPI must obtain sufficient waste under contracts with
haulers or communities to ensure sufficient project revenues. OPI
is subject to risks usually assumed by the Client Community, such
as those associated with Unforeseen Circumstances, and the supply
and price of municipal waste to the extent not contractually
assumed by other parties. OPI's current contracts with waste
suppliers for these two facilities provide limited contractual
protection for Unforeseen Circumstances. On the other hand, OPI
generally retains all of the energy revenues and disposal fees for
waste accepted at these facilities. Accordingly, OPI believes that
such projects carry both greater risks and greater potential
rewards than projects in which there is a Client Community. As a
result of the declining number of municipal procurements in the
United States, which is anticipated to continue in the near future,
such projects are likely to become more common.
(c) Project Financing. Financing for projects is generally
accomplished through the issuance of a combination of tax-exempt
and taxable revenue bonds issued by a public authority. If the
facility is owned by an Operating Subsidiary, the authority lends
the bond proceeds to the Operating Subsidiary and the Operating
Subsidiary contributes additional equity to pay the total cost of
the project. For such facilities, project-related debt is included
as a liability in OPI's consolidated financial statements.
Generally, such debt is secured only by the assets of the Operating
Subsidiary and otherwise provides no recourse to OPI.
The Operating Subsidiaries are able to realize value from
facilities owned by them either by selling the facilities and
leasing them from the purchaser for extended terms or by selling
limited partnership interests in the entity owning the facility.
OPI has taken advantage of these financing mechanisms by selling
the interests in Tulsa I and Tulsa II to a leverage lessor and
leasing the facility back under a long term lease. In addition, in
1991, limited partnership interests in, and the related tax
benefits of, the partnership that owns the Huntington, New York
facility were sold to third party investors. In 1992, OPI sold the
subsidiary that held the remaining limited partnership interest in,
and certain related tax benefits of, that partnership. Under the
limited partnership agreement, an Operating Subsidiary is the
general partner and retains responsibility for the operation and
maintenance of the facility. The Operating Subsidiary retained 85%
of the residual value of the facility after the initial term of the
Service Agreement. In 1991, OPI acquired a facility from Blount,
Inc. which was sold through a sale-leaseback arrangement. An
Operating Subsidiary is the owner of the facility under
construction in Onondaga, New York and a sale of equity interests
in such facility is under consideration.
(d) Revenues and Income. During the construction period, for
facilities owned by Client Communities, construction income is
recognized on the percentage-of-completion method based on the
percentage of costs incurred to total estimated costs.
Construction revenues also include amounts relating to sales of
limited partnership interests and related tax benefits in
facilities not yet in commercial operation as well as other amounts
received with respect to activities conducted by OPI prior to the
commencement of commercial operation.
After construction is completed and the facility is accepted,
the Client Community pays the Operating Subsidiary a fixed
operating fee which escalates in accordance with specified indices;
reimburses the Operating Subsidiary for certain costs specified in
the Agreement including taxes and governmental impositions (other
than income taxes), ash disposal and utility expenses; and shares
with the Operating Subsidiary a portion of the energy revenues
(generally 10%) generated by the facility. If the facility is owned
by the Operating Subsidiary, the Client Community also pays as part
of the Service Fee an amount equal to the debt service on the bonds
issued to finance the facility. With respect to such facilities
OPI recognizes as revenue principal on such bonds on a level basis
over the term of the debt. At most facilities, OPI may earn
additional fees from accepting waste from the Client Community or
others utilizing the capacity of the facility which exceeds the
minimum amount of waste committed by the Client Community.
For the projects that are not operated pursuant to a Service
Agreement, tipping fees which are generally subject to escalation
in accordance with specified indices, and energy revenues are paid
to OPI. Electricity generated by these projects is sold to public
utilities, and in one instance, steam and a portion of the
electricity generated is sold to industrial users. Under certain
of the contracts under which waste is provided to these facilities,
OPI may be entitled to fee adjustments to reflect certain
Unforeseen Circumstances.
(e) OPI's Waste-to-Energy Projects. Certain information with
respect to OPI's projects as of February 28, 1994 is summarized in
the following table:
<PAGE>
<PAGE>
<TABLE>
OPI'S WASTE-TO-ENERGY FACILITIES
<CAPTION>
Tons Boiler Commencement
In Operation Per Day Units Of Operation
<S> <C> <C> <C>
Tulsa, OK (I) (1) 750 2 1986
Haverhill/Lawrence
MA-RDF (8) 950 1 1984
Marion County, OR 550 2 (2) 1987
Hillsborough County, FL (3) 1,200 3 (2) 1987
Tulsa, OK (II) (1) (4) 375 1 1987
Bristol, CT 650 2 (2) 1988
Alexandria/Arlington, VA 975 3 1988
Indianapolis, IN 2,362 3 (2) 1988
Hennepin County, MN (1) (5) 1,000 2 1991
Stanislaus County, CA 800 2 1989
Babylon, NY 750 2 (2) 1989
HaverHill, MA-Mass Burn 1,650 2 1989
Warren County, NJ (5) 400 2 1991
Kent County, MI (3) 625 2 (2) 1990
Wallingford, CT (5) 420 3 (2) 1990
Fairfax County, VA 3,000 4 (2) 1990
Huntsville, AL (3) 690 2 (2) 1990
Lake County, FL 528 2 (2) 1990
Lancaster County, PA (3) 1,200 3 (2) 1991
Pasco County, FL (3) 1,050 3 (2) 1991
Huntington, NY (6) 750 3 (2) 1991
Hartford, CT (3) (7)(8) 2,000 3 1989
Detroit, MI (1) (8) (9) 3,300 3 1989
Honolulu, HI (1) (8) 2,160 2 1990
Union County, NJ (3) (11) 1,440 3 1994
TOTAL 29,575
</TABLE>
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Estimated
Unrecognized
Construction
Revenues as of
Scheduled 12/31/93 (in
Commencement thousands of
Under Construction of Operations dollars)
<S> <C> <C> <C> <C>
Onondaga County, NY 990 3 (2) 1995 $ N/A
Lee County, FL (3) 1,200 3 (2) 1994 46,269
Montgomery County, MD(3) 1,800 3 (2) 1995 117,917
TOTAL 3,990
</TABLE>
<TABLE>
<CAPTION>
Estimated
Unrecognized
Construction
Revenues as of
Scheduled 12/31/93 (in
Awarded--Not Yet Commencement thousands of
Under Construction of Operations dollars)
<S> <C> <C> <C> <C>
Mercer County, NJ (3) 1,450 2 1994 $154,866
Clark County, OH (10) 1,750 2 1995 N/A
Halifax, Nova Scotia (3) 550 2 1994 99,620*
TOTAL 3,750
NOTES:
* Expressed in Canadian Dollars.
(1) Facility is owned by an owner/trustee pursuant to a
leveraged lease arrangement.
(2) Facility has been designed (or, with respect to
facilities and facilities under construction, will be
designed) to allow for the addition of another unit.
(3) Facility is owned (or, with respect to facilities not
under construction is to be owned) by the Client
Community.
(4) Phase II of the Tulsa facility, which was financed as a
separate project, expanded the capacity of the facility
from two to three units.
(5) Operating subsidiaries were purchased after completion
and use a mass-burn technology that is not the Martin
Technology.
(6) Owned by a limited partnership in which certain limited
partners are not affiliated with OPI.
(7) Under contracts with the Connecticut Resource Recovery
Authority and Northeast Utilities, OPI operates only the
boiler and turbine for this facility.
<PAGE>
(8) Operating Contracts were acquired after completion.
Facility uses a refuse-derived fuel technology and does
not employ the Martin Technology.
(9) OPI is currently constructing environmental improvements
to the Detroit facility. The total price for this
project is approximately $117,800,000 (subject to
escalation) and construction is expected to be completed
by April 1996.
(10) On May 19, 1993, OPI entered into a Development
Agreement, a Steam Purchase and Sale Agreement and an
Operation and Maintenance Agreement with Ohio Edison
Company. On June 8, 1993, OPI entered into a Host
Community Agreement for the construction and operation of
a waste-to-energy incinerator with the Clark County Solid
Waste Management District. This contract is the subject
of litigation brought by a local landfill in which an
intermediate appellate court recently enjoined
performance by the County. The County and OPI are
determining whether to appeal to the Ohio Supreme Court
or whether to rebid the project. OPI is in the process
of procuring additional waste contracts for the facility.
(11) This facility is substantially complete and is processing
waste. OPI expects to recognize an additional $7.2
million in construction revenues in 1994.
</TABLE>
(f) Markets and Competition. OPI markets its services
principally to governmental entities, including city, county and
state governments as well as public authorities or special purpose
districts established by one or more local government units for the
purpose of managing the collection and/or disposal of MSW. For
certain projects, OPI may market its services directly to private
firms in the business of MSW collection and/or disposal.
MSW generated in the United States is processed in waste-to-
energy facilities; incinerated without energy recovery; recycled
and landfilled. OPI believes that no single waste disposal
technique can properly manage all MSW and that an effective waste
management program must include waste minimization, recycling, and
waste-to-energy to utilize as much waste as possible for reuse and
energy production.
Steps to minimize the quantity of MSW produced are being taken
at the manufacturing and consumer levels. Some jurisdictions, for
example, have banned the use of certain plastic containers. These
efforts have not yet had an appreciable impact on the quantities of
MSW being generated.
Increased recycling is a goal of many state and local
governments, and some have legislated ambitious mandatory targets.
OPI believes that increased recycling is an important aspect of
waste disposal planning in the United States and will continue to
grow. However, the inherent limitation on the types of materials
that can successfully be recycled will continue to require
municipalities to use other disposal methods such as waste-to-
energy or landfilling for much of the waste produced. Most of
OPI's facilities have been sized to accommodate the accomplishment
of communities recycling goals.
Waste-to-energy facilities compete with other disposal
methods, such as landfills. Compliance with regulations
promulgated by the United States Environmental Protection Agency
(the "EPA") in 1991 will to some extent increase the cost of
landfilling although landfills may be less expensive, in some
cases, in the short term, than waste-to-energy facilities.
Landfills generally do not commit their capacity for extended
periods. Much of the landfilling done in the United States is done
on a spot market or through short term contracts. Accordingly,
landfill pricing tends to be more volatile as a result of periodic
changes in waste generation and available capacity than OPI's
pricing, which is based on long term contracts. Another factor
effecting the competitiveness of waste-to-energy fees are the
additional charges imposed by Client Communities to support
recycling programs, household hazardous waste collections, citizen
education and similar initiatives. The cost competitiveness of
waste-to-energy facilities also depends on the prices at which the
facility can sell the energy it generates.
Mass-burn waste-to-energy systems compete with various refuse-
derived fuel ("RDF") systems in which MSW is preprocessed to remove
various non-combustibles and is shredded for sizing prior to
burning. OPI believes that the large-scale facilities being
contracted for today are primarily mass-burn systems. Although OPI
operates four RDF projects, these were all acquired after
construction. OPI does not intend to develop any new RDF
facilities.
Since 1989, there has been a decline in the number of
communities requesting proposals for waste-to-energy facilities.
OPI believes that this decline has resulted from a number of
factors that adversely affected communities willingness to make
long term capital commitments to waste disposal projects, including
uncertainties about the impact of recycling on the waste stream;
concerns arising from the Clean Air Act Amendments of 1990 and the
regulatory actions currently being proposed pursuant to its terms.
In addition, there was aggressive opposition to proposed waste
disposal projects of all types by many individuals and small groups
during this period. OPI believes that legislative developments
increased public acceptance of the safety and cost effectiveness of
waste-to-energy and economic recovery will resolve many of these
uncertainties.
In response to the decline in the number of requests for
proposals, OPI has sought projects for which there are no
sponsoring Client Communities. In 1993, OPI negotiated a waste
disposal agreement with Clark County, Ohio, for the disposal of MSW
at such a project. OPI also completed negotiation of contracts
with Ohio Edison Company pursuant to which Ohio Edison leases a
site to OPI and purchases steam generated at the proposed waste-to-
energy facility. This project is conditional upon obtaining
commitments of additional MSW from other sources.
There is substantial competition within the waste-to-energy
field. OPI competes with a number of firms, some of which have
greater financial resources than OPI. Some competitors have
licenses or similar contractual arrangements for competing
technologies in the waste-to-energy field, and a limited number of
competitors have their own proprietary technology.
Other technologies utilized in mass-burn-type facilities in
the United States include the Von Roll, W+E Umwelltechnik, A.G.,
Takuma, Volund, Steinmueller, Deutsche Babcock, O'Connor and
Detroit Stoker.
The principal factors influencing selection of vendors for
governmentally sponsored projects are technology, financial
strength, performance guarantees, experience, reputation for
environmental compliance, service and price.
(g) Technology. The principal feature of the Martin
Technology is the reverse-reciprocating stoker grate upon which the
waste is burned. The patent for the basic stoker grate technology
used in the Martin Technology expired in 1989. OPI has no
information that would cause it to believe that any other company
uses the basic stoker grate technology that was protected by the
expired patent. OPI believes that unexpired patents on other
portions of the Martin Technology would limit the ability of other
companies to effectively use the basic stoker grate technology in
competition with OPI. More importantly, it is Martin's know-how in
manufacturing grate components and in designing and operating mass-
burn facilities and Martin's worldwide reputation in the waste-to-
energy field, rather than the use of potential technology, that is
important to OPI's competitive position in the waste-to-energy
industry in the United States. OPI does not believe that the
expiration of the patent covering the basic stoker grate technology
will have a material adverse effect on OPI's financial condition or
competitive position.
(h) The Cooperation Agreement. Under an agreement between OPI
and Martin (the "Cooperation Agreement"), OPI has the exclusive
right to use the Martin Technology in waste-to-energy facilities in
the United States, Canada, Mexico, Bermuda, certain Caribbean
countries most of Central and South America and Israel. In
addition, in Germany, Turkey, Saudi Arabia, Kuwait, the
Netherlands, Denmark, Norway, Sweden, Finland, Poland and Italy,
OPI has exclusive rights to use the Martin Technology only on a
full service design, construct and operate basis. OPI may not use
any other technology to design and construct waste-to-energy refuse
incineration facilities without Martin's permission. OPI may,
however, acquire, own, commission and/or operate facilities that
use technology other than the Martin technology that have been
constructed by entities other than OPI. Martin is obligated to
assist OPI in installing, operating and maintaining facilities
incorporating the Martin Technology. The fifteen year term of the
Cooperation Agreement renews automatically each year unless notice
of termination is given, in which case the Cooperation Agreement
would terminate 15 years after such notice. Additionally, the
Cooperation Agreement may be terminated by either party if the
other fails to remedy its material default within 90 days of
notice. The Cooperation Agreement is also terminable by Martin if
there is a "change in control" (as defined in the Cooperation
Agreement) of OMS, or any direct or indirect parent of OMS not
approved by its respective board of directors. Although
termination would not affect the rights of OPI to design,
construct, operate, maintain or repair waste-to-energy facilities
for which contracts have been entered into or proposals made prior
to the date of termination, the loss of OPI's right to use the
Martin Technology could have a material adverse effect on OPI's
future business and prospects. For example, Germany has enacted
legislation which would prevent the landfilling of untreated raw
municipal waste by the end of the decade. OPI therefore believes
this is an appropriate time to seek to expand its business in these
markets.
(i) International Business Developments. In 1993, OPI
continued the development of its waste-to-energy business in
selected international markets. OPI opened an office in Munich,
Germany in 1993 and, as indicated above, extended its right to use
the Martin technology to develop full service projects in much of
Europe. OPI had no operations outside the United States
previously. Furthermore, in Europe, waste-to-energy facilities
have been built as turn-key construction projects and then operated
by local governmental units or by utilities under cost-plus
contracts. OPI emphasizes developing projects which it will build
and then operate for a fixed fee. Some European countries are
seeking to substantially reduce their dependency on landfilling.
(j) Backlog. OPI's backlog as of December 31, 1993 is set
forth under (e) above. As of the same date of the prior year, the
estimated unrecognized construction revenues for projects under
construction was $192,935,000, and the estimated construction
revenues for projects awarded but not yet under construction was
$513,488,000 (includes $99,620,000 expressed in Canadian Dollars).
The changes reflect construction progress on four projects.
Generally, the construction period for a waste-to-energy facility
is approximately 28 to 34 months. The backlog does not reflect the
cancellation of projects owned by OPI or the cancellation of the
Quonset Point and Johnston Rhode Island projects.
OTHER SERVICES
OPI operates transfer stations in connection with its
Montgomery County, Maryland project, and will use a railway system
to transport MSW and ash residue to and from the facility. OPI
leases and operates a landfill located at its Haverhill,
Massachusetts facility, and leases, but does not operate, a
landfill in connection with its Bristol, Connecticut facility.
In 1991, OPI announced that it would discontinue the on-site
remediation business utilizing a mobile technology then conducted
by Ogden Waste Treatment Service, Inc. ("OWTS"). OWTS was formed
by Ogden in 1986 to conduct on-site remediation of hazardous wastes
using a proprietary incineration process. In 1991, OWTS operated
at sites located in Alaska and California. Certain of these
operations continued into 1993; and certain contractual obligations
resulting from the disposal of assets are expected to conclude in
1994.
In 1993, OPI announced that it would discontinue the fixed-
site hazardous waste business it had been conducting through
American Envirotech, Inc. ("AEI"), an indirect subsidiary. AEI
received a permit in 1993 for the construction and operation of a
facility near Houston, Texas (the "RCRA Permit"), which is subject
to a pending appeal in the state of Texas. Substantial and adverse
changes in the market for hazardous waste incineration services
such as those proposed to be provided by AEI, and regulatory
uncertainty stemming from EPA pronouncements apparently
foreshadowing more pervasive regulation, led OPI to conclude that
successful commercial development of the project was unlikely. OPI
has ceased all development activities and in 1994 intends to
dispose of the assets related to this business, primarily a permit
to build and operate a hazardous waste incineration facility.
OPI, through Ogden Power Systems, Inc., a wholly owned
subsidiary, intends to develop, operate and, in some cases, own
power projects which cogenerate electricity and steam or generate
electricity alone for sale to utilities. These power systems may
use, among other fuels, wood, tires, coal, or natural gas as fuel.
OPI does not currently operate any power projects.
OPI, through Ogden Water Systems, Inc., a wholly owned
subsidiary, intends to develop, operate and, in some cases, own
projects that purify water, treat wastewater, and treat and manage
biosolids and compost organic wastes. As with OPI's waste-to-
energy business, water and wastewater projects involve various
contractual arrangements with a variety of private and public
entities including municipalities, lenders, joint venture partners
(which provide financing or technical support), and contractors and
subcontractors which build the facilities.
OPI also intends to develop, operate and, in some cases, own
projects that process recyclable paper products into linerboard for
reuse in the commercial sector. As with OPI's waste-to-energy
business, such projects involve various contractual arrangements
with a variety of private and public entities, including
municipalities, lenders, joint venture partners (which provide
financing or technical support) and contractors and subcontractors
which build the facilities. In addition, such projects require
significant amounts of energy in the form of steam, which may be
provided by present or future waste-to-energy projects operated by
OPI.
REGULATION
(a) Environmental Regulations. OPI's business activities are
pervasively regulated pursuant to Federal, state and local
environmental laws. Federal laws, such as the Clean Air Act and
Clean Water Act, and their state counterparts govern discharges of
pollutants into the air and water. Other Federal, state and local
laws such as the Resource Conservation and Recovery Act ("RCRA")
comprehensively govern the generation, transportation, storage,
treatment and disposal of solid waste, including hazardous waste
(such laws and the regulations thereunder, "Environmental
Regulatory Laws"). The Environmental Regulatory Laws and other
Federal, state and local laws, such as the Comprehensive
Environmental Recovery Response Compensation and Liability Act
("CERCLA"), make OPI potentially liable for any environmental
contamination which may be associated with its activities or
properties (collectively, Environmental Remediation Laws").
Many states have mandated local and regional solid waste
planning, and require that new solid waste facilities may be
constructed only in conformity with such plans. State laws may
authorize the planning agency to require that waste generated
within its jurisdiction be brought to a designated facility which
may help that facility become economically viable but preclude the
development of other facilities in that jurisdiction. Such
ordinances are sometimes referred to as legal flow control. Legal
flow control has been challenged in a number of law suits on the
basis that it is a state regulation of interstate commerce
prohibited by the United States Constitution. The decisions on
these cases have not been consistent. However, several recent
decisions have invalidated ordinances creating legal flow control.
In 1993, the United States Supreme Court granted an appeal from a
decision of a New York State Court upholding a New York
municipality's ordinance requiring that all waste generated within
its jurisdiction be disposed of at a transfer station operating
under contract with the municipality. The case was argued in
December 1993 and a decision is expected during the Court's spring
1994 term.
OPI believes that legal flow control is an important tool used
by municipalities in fulfilling their obligations to provide safe
and environmentally sound waste disposal services to their
constituencies. Although a decision invalidating legal flow
control would reduce the number of options local government would
have in meeting this obligation, OPI does not believe it would
materially impact OPI's existing facilities or its ability to
develop new ones. Most of the contracts pursuant to which OPI
provides disposal services require the Client Community to deliver
stated minimum quantities of waste on a put-or-pay basis. OPI does
not believe these obligations would be negated by an adverse
Supreme Court decision. Furthermore, only a few of the Client
Communities served by OPI rely solely on flow control to provide
waste to OPI's facilities, a factor influenced in part by past
difficulties in enforcing legal flow control ordinances. Although
some municipalities may experience temporary difficulties in
meeting delivery commitments as they address required changes in
their waste disposal plans, such difficulties should not be long-
lived as indicated by the experience of municipalities served by
OPI which determined that it could not enforce its flow control
ordinance and therefore adopted alternative measures. OPI believes
that there are other methods for providing incentives to use
integrated waste systems incorporating waste to energy that do not
entail legal flow control, which incentives should not be affected
by the Court's decision. These include mandating that charges for
utilization of the system be maintained at competitive levels and
that revenue shortfalls be funded from tax revenues or special
assessments on residents. This type of incentive will be utilized
at the facility being constructed, which will be operated by OPI in
Montgomery County Maryland.
Furthermore, in most of the municipalities where OPI provides
services, information available to OPI indicates that the cost to
the Client Community of waste-to-energy is competitive with
alternative disposal facilities, and therefore OPI's facilities
should be able to compete for waste economically. As indicated,
however, certain additional waste disposal services are financed by
the Client Community's increasing the cost for disposal at waste-
to-energy facilities, and these services may have to be paid for by
other mechanisms. A number of bills are presently pending in
Congress to authorize legal flow control. Whether Congress will
enact legislation on this subject is uncertain.
In addition, state laws have been enacted in some
jurisdictions that may also restrict the intrastate and interstate
movement of solid waste. Restrictions on importation of waste from
other states have generally been voided by Federal Courts as
invalid restrictions on interstate commerce. Bills proposed in
past sessions of Congress would authorized such designations and
restrictions. Bills of this nature are expected to be introduced
in the current session of Congress. Similar bills have been
introduced in previous sessions of Congress and it remains
uncertain whether Congress acts to authorize such laws.
The Environmental Regulatory Laws require that many permits be
obtained before the commencement of construction or operation of
any waste-to-energy facility, including: air quality, construction
and operating permits, stormwater discharge permits, solid waste
facility permits in most cases, and, in many cases, wastewater
discharge permits. There can be no assurance that all required
permits will be issued, and the process of obtaining such permits
can often cause lengthy delays, including delays caused by third
party appeals challenging permit issuance.
The Environmental Regulatory Laws and regulations and permits
issued pursuant to them also establish operational standards,
including specific limitations upon emissions of certain air and
water pollutants. Failure to meet these standards subjects an
Operating Subsidiary to regulatory enforcement actions by the
appropriate governmental unit, which could include fines and orders
which could limit or prohibit operations. Certain of the
Environmental Regulatory Laws also authorize suits by private
parties for damages and injunctive relief. Repeated unexcused
failure to comply with environmental standards may also constitute
a default by the Operating Subsidiary under its Service Agreement.
The Environmental Regulatory Laws and governmental policies
governing their enforcement are subject to revision. New
technology may be required or stricter standards may be established
for the control of discharges of air or water pollutants or for
solid waste or ash handling and disposal. Most Federal
Environmental Regularly Laws encourage development of new
technology to achieve increasingly stringent standards; they also
often require use of the best technology available at the time a
permit is issued. The Federal Prevention of Significant
Deterioration of air quality Program requires that new or
substantially modified waste-to-energy facilities of the size
constructed by OPI that are located in areas of the country that
are in compliance with national ambient air quality standards
("NAAQS") employ the Best Available Control Technology ("BACT").
The selection of control technology and the emission limits that
must be achieved are made on a case-by-case basis considering
economic impacts, energy and other environmental impacts and costs,
and may include requirements that certain components of the mixed
waste stream be separated for treatment by means other than
combustion in the Operating Subsidiary's facility. For facilities
developed in areas where NAAQS are not met, Federal law requires
that control technology capable of achieving the Lowest Achievable
Emission Rate ("LAER") must be employed. LAER means the most
stringent emission limit achievable in practice by emission sources
similar to the facility in question, which does not involve any
consideration of the economic impact or cost to achieve such a
limitation. Existing facilities in areas where LAER is now
required for new facilities may be required to retro-fit Reasonably
Available Control Technology ("RACT") established by EPA applicable
to selected pollutants to enhance progress toward these areas
achieving the NAAQS. RACT is that technology which EPA or state
agencies determine to be available, proven, reliable, and
affordable to reduce targeted emissions from specific types of
existing sources of air emissions within geographic areas in which
NAAQS for the target emissions is not being met. Thus, as new
technology is developed and proven, it must be incorporated into
new or modified facilities. This new technology may often be more
expensive than that used previously.
EPA has promulgated regulations establishing New Source
Performance Standards ("NSPS") and Emission Guidelines ("EG")
applicable to new and existing municipal waste combustion units
with a capacity of greater than 250 tons per day, respectively.
The EG and NSPS limit the concentrations of carbon monoxide in
combustion gases and establish limitations upon the flue gas
pollutant concentrations entering the ambient air for particulate
matter (opacity), organics (dioxins and furans), carbon monoxide
and acid gases (sulfur dioxide and hydrogen chloride). The NSPS
also establish emissions limitations for nitrogen oxides. The NSPS
apply to facilities beginning construction after December 20, 1989
and the EG will become effective three years after each individual
state adopts them but no later than five years after promulgation.
Additional air pollution control equipment is likely to be required
at three of OPI's existing waste-to-energy facilities to achieve
the EG limitations.
The Clean Air Act required EPA to re-evaluate the NSPS and EG
for particulate matter (total and fine), opacity (as appropriate),
sulfur dioxide, hydrogen chloride, oxides of nitrogen, carbon
monoxide, dioxins and dibenzofurans and to establish new NSPS and
EG for lead, cadmium, and mercury no later than November 15, 1991
for all waste combustion facilities. Such re-evaluation and
regulations were not completed by that date. These standards must
reflect maximum achievable control technology ("MACT") for both new
and existing waste-to-energy units. MACT means the maximum degree
of reduction in emissions, considering the cost, energy
requirements, and non air quality related health and environmental
impacts. OPI cannot predict what standards will be proposed or
promulgated, although EPA is reviewing data from existing
facilities. The revised standards for new facilities will become
effective six months after the date of promulgation of the revised
standards. Standards for lead, cadmium and mercury are expected
to be proposed in 1994 under a consent order entered in 1993 in
connection with litigation commenced by several parties against the
EPA.
The Clean Air Act also requires each state to implement a
state implementation plan in conformity with Federal law that
outlines how areas are out of compliance with NAAQs will be
returned to compliance. One aspect of the state implementation
plan must be an operating permit program. Most states are now in
the process of developing or augmenting their implementation plans
to meet these requirements. The state implementation plans and the
operating permits issued under them may place new requirements on
waste-to-energy facilities. Under federal law, the new operating
permits may have a term of up to 12 years after issuance or
renewal, subject to review every five years.
Changes in standards can affect the manner in which OPI
operates existing projects and could require significant additional
expenditures to achieve compliance. OPI believes that for a
majority of the facilities operated by its Operating Subsidiaries,
the cost of capital improvements required to meet Clean Air Act
Requirements will not exceed $1 million per facility. Those
improvements are expected to increase the cost of disposal at those
facilities by less than two dollars per ton of MSW processed.
Capital Improvements for four of OPI's earlier Facilities, however,
are expected to cost between $20 million and $44 million. As a
consequence, related cost of disposal increases are expected to
range from six dollars to seventeen dollars per ton of MSW
processed. OPI's estimates are preliminary and depend on whether
Clean Air Act requirements are implemented as currently proposed.
Such expenditures are, in most cases, borne by the Client
Communities. For Facilities owned by OPI equity contributions of
up to 20 percent of the capital costs described herein may be
required. For projects not operated pursuant to a Service
Agreement, such capital costs are the responsibility of OPI. OPI
expects to recover such expenditures through increases in the
tipping fee. In certain cases, there are limitations on the total
amount or type of costs for complying with changes in law that can
be "passed through" to the Client Communities, and if such limits
are exceeded, the Client Community may be able to terminate the
Service Agreement relating to the affected project, in which case
the Client Community would be responsible for retiring or otherwise
providing for the outstanding project debt. OPI does not believe
that any of its Service Agreements will be terminated for this
reason.
The Environmental Remediation Laws, including CERCLA, may
subject OPI, like other entities that manage waste, to joint and
several liability for the costs of remediating contamination at
sites, including landfills, which OPI has owned, operated or
leased, or at which there has been disposal of residue or other
waste handled or processed by OPI. OPI leases and operates a
landfill in Haverhill, Massachusetts and leases a landfill in
Bristol, Connecticut in connection with its projects at those
locations. Some state and local laws also impose liabilities for
injury to persons or property caused by site contamination. Some
Service Agreements provide for indemnification of the Operating
Subsidiaries from some such liabilities.
Environmental Regulatory Laws, such as RCRA and state and
local solid waste laws, impose significantly more stringent
requirements upon disposal of hazardous waste than upon disposal of
MSW and other non-hazardous wastes. These laws prohibit disposal
of hazardous waste, other than in small, household-generated
quantities, at the Company's municipal solid waste facilities and
generally makes disposal of hazardous waste more expensive than
management of non-hazardous waste. The Service Agreements
recognize the potential for improper deliveries of hazardous wastes
and specify procedures for dealing with hazardous waste that is
delivered to a facility. Although certain Service Agreements
require the Operating Subsidiary to be responsible for some costs
related to hazardous waste deliveries, to date, no Operating
Subsidiary has incurred material hazardous waste disposal costs.
No ash residue from a fully operating facility operated by OPI
has been characterized as hazardous under the present or past
prescribed EPA test procedures, and such ash residue is currently
disposed of in permitted landfills as non-hazardous waste. Some
state laws or regulations provide that if prescribed test
procedures demonstrate that ash residue has hazardous
characteristics, it must be treated as hazardous waste. In certain
states, ash residue from certain waste-to-energy facilities of
other vendors or communities has been found to have hazardous
characteristics under these test procedures. There is a conflict
between the two Federal courts which have decided whether municipal
solid waste ash residue having hazardous characteristics is subject
to RCRA'S provisions for management as a hazardous waste. The
Second Circuit Court of Appeals has held that it is not. The
Seventh Circuit Court of Appeals reached the opposite result. In
September 1992, the Administrator of the United States EPA
officially stated that EPA policy was that waste-to-energy ash
residue was exempt from treatment as a hazardous waste as a matter
of law and could be safely disposed of in MSW landfills that met
the EPA's criteria. In reaching its decision, the Seventh Circuit
Court of Appeals refused to give deference to the EPA's policy. An
appeal of this decision was filed in early 1993 in the United
States Supreme Court, and a decision is expected during the Court's
Spring 1994 session. OPI does not expect that a decision that
requires ash residue having hazardous characteristics to be managed
as a hazardous waste would have significant impacts on the OPI's
business. Eight of the Company's facilities are located in states
or dispose of their ash residue in states which require testing to
determine whether such residue must be managed as a hazardous waste
under state law. Furthermore, ash processing technology is
available which could be used to further ensure that ash does not
exhibit characteristics of hazardous waste.
From time to time, state and federal moratoria on waste to
energy have been proposed in legislation, regulation, and by
executive action. Generally, such proposals have not been adopted,
and where they have, as in the State of New Jersey, following the
moratorium, waste to energy has continued to be included in the
options available to local municipalities. In 1992, as previously
reported, the State of Rhode Island eliminated waste to energy from
its unique legislation in which the state's solid waste management
plan was enacted as law. As a consequence of this legislation, OPI
brought an action against the state challenging the validity of the
change in the plan which has been settled by the State's agreement
to pay OPI approximately $5.5 million in 1994, a portion of which
must be shared with Blount, Inc., the former developer of the
Quonset, Rhode Island project.
OWTS' business activities are regulated under Federal, state
and local environmental laws governing air and water emissions and
the generation, transportation, storage, treatment and disposal of
solid wastes, and hazardous and toxic materials. In particular,
RCRA, its implementing regulations and parallel state laws create
a cradle-to-grave system for regulating hazardous waste; and CERCLA
and similar state laws create programs for remediation of
contaminated sites and for the imposition of liability upon those
who owned or operated such sites or who generated or transported
hazardous substances disposed of at such sites. OPI believes that
OWTS's units and projects were operated in compliance in all
material respects with regulatory requirements that apply to its
business.
OPI's waste-to-energy business is subject to the provisions of
the Federal Public Utility Regulatory Policies Act ("PURPA").
Pursuant to PURPA, the Federal Energy Regulatory Commission
("FERC") has promulgated regulations that exempt qualifying
facilities (facilities meeting certain size, fuel and ownership
requirements) from compliance with certain provisions of the
Federal Power Act, the Public Utility Holding Company Act of 1935,
and, except under certain limited circumstances, state laws
regulating the rates charged by electric utilities. PURPA was
promulgated to encourage the development of cogeneration facilities
and small facilities making use of non-fossil fuel power sources,
including waste-to-energy facilities. The exemptions afforded by
PURPA to qualifying facilities from the Federal Power Act and the
Public Utility Holding Company Act of 1935 are of great importance
to the Company and its competitors in the waste-to-energy industry.
State public utility commissions must approve the rates, and
in some instances other contract terms, by which public utilities
purchase electric power from the Company's projects. PURPA
requires that electric utilities purchase electric energy produced
by qualifying facilities at negotiated rates or at a price equal to
the incremental or "avoided" cost that would have been incurred by
the utility if it were to generate power itself or purchase it from
another source. While public utilities are not required by PURPA
to enter into long-term contracts, PURPA creates a regulatory
environment in which such contracts can typically be negotiated.
In October, 1992, Congress enacted, and the President signed
into law, comprehensive energy legislation, several provisions of
which are intended to foster the development of competitive,
efficient bulk power generation markets throughout the country.
Although the impact of the legislation will not be fully known
until any judicial challenges are resolved and Federal and State
regulatory agencies develop policies and promulgate implementing
regulations, OPI believes that, over the long term, the legislation
will create business opportunities both in the waste-to-energy
field as well as in other power generation fields.
OTHER INFORMATION
(a) Raw Materials. The construction of each of OPI's waste-to-
energy facilities is generally carried out by a general contractor
selected by OPI. The general contractor is usually responsible for
the procurement of bulk commodities used in the construction of the
facility, such as steel and concrete. These commodities are
generally readily available from many suppliers. OPI generally
directs the procurement of all major equipment utilized in the
facility, which equipment is also generally readily available from
may suppliers. The stoker grates utilized in facilities
constructed by OPI are required to be obtained from Martin pursuant
to the Cooperation Agreement.
In connection with the currently operating waste-to-energy
facilities, OPI has entered into long-term waste disposal
agreements which obligate the relevant Client Communities (or in
the case of the Haverhill projects, the private haulers) to deliver
specified amounts of waste on an annual basis. OPI believes that
sufficient amounts of waste are being produced in the United States
to support current and future waste-to-energy projects. Other
commodities used in operation of OPI's facilities are readily
available from many suppliers.
Item 2. PROPERTIES
(a) Operating Services
The principal physical properties of Ogden Services are the
fueling installations at various airports in the United States and
Canada and the corporate premises located at Two Pennsylvania
Plaza, New York, New York 10121 under lease, which expires on
April 30, 1998 and which contains an option by Ogden Services to
renew for an additional five years.
Atlantic Design Company's corporate offices are located in
Charlotte, North Carolina. Atlantic Design owns a 51,000 square
foot operating facility on 3.5 acres of land in Vestal, New York.
Atlantic Design also leases operating facilities at various
locations in Florida, New Jersey and New York. The leases range
from a term of one year to as long as ten years.
Ogden Services Corporation, through wholly-owned subsidiaries,
owns and leases buildings in various areas in the United States
which house office, laboratory and warehousing operations. The
leases range from a month-to-month term to as long as five years.
The Ogden Services Corporation in-flight food service
operation facilities, aggregating approximately 600,000 square
feet, are leased, except at Newark, New Jersey; Miami, Florida,;
and Las Vegas, Nevada which are owned.
Ogden Services, through a subsidiary, operates the Fairmount
Park racetrack which conducts thoroughbred and harness racing in
Collinsville, Illinois, eight miles from downtown St. Louis. The
track is on a 150-acre site with a long-term lease expiring in
2017. It also owns a 148-acre site located at East St. Louis,
Illinois.
Ogden Abatement and Decontamination Services owns a 12,000
square-foot warehouse and office facility located in Long Island
City, New York.
Ogden Government Services leases most of its facilities,
consisting almost entirely of office space. This includes an
11-year lease which began in 1986 for its headquarters facility in
Fairfax, Virginia, for approximately 119,000 square feet as well as
office space in other locations throughout the United States under
lease terms of five years or less.
OEES's headquarters is located in Fairfax, Virginia, where
OEES currently occupies approximately 27,000 square feet of space
in the headquarters building of ERC International, Inc. ("ERCI"),
a wholly-owned subsidiary of Ogden. OEES's lease payments include
the cost of certain services and allocations which are shared with
ERCI. OEES has agreed to continue to occupy and sublease from ERCI
not less than 24,000 square feet of space in the building for the
remainder of the lease term expiring in 1997.
OEES leases an aggregate of approximately 347,000 square feet
of office and laboratory space in 40 separate locations in 17
states in the United States. OEES's leases are generally short
term in nature, with terms which range from five to ten years or
less and include (i) the headquarters office described above, (ii)
office and laboratory space in Nashville and Oak Ridge, Tennessee;
San Diego, California; Pensacola, Florida; and Phoenix, Arizona,
and (iii) laboratory office space owned in Fort Collins, Colorado.
In addition to its Fairfax, Virginia headquarters, OEES maintains
regional headquarters in San Diego, California and Nashville,
Tennessee.
Many of the other Ogden Services' facilities operate from
leased premises located principally within the United States.
(b) Waste-to-Energy Operations
OPI's principal executive offices are located in Fairfield,
New Jersey in an office building located on a 5.4-acre site owned
by OPI.
The following table summarizes certain information relating to
the locations of the properties owned or leased by OPI or its
subsidiaries as of January 31, 1994 (1).
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Approximate
Location Site Size Site Use Nature of Interest
<S> <C> <C> <C>
Fairfield, New Jersey 5.4 Office Space Own
Marion County, Oregon 15.2 Waste-to-Energy Own (2)
facility
Alexandria/Arlington, VA 3.3 Waste-to-Energy Acquiring the
facility Alexandria
Authority's & the
Arlington
Authority's interest
under Site Lease
(expires Oct. 1,
2025) pursuant to
Conditional Sales
Agreement.
Bristol, Connecticut 18.2 Waste-to-Energy Own (2)
facility
Bristol, Connecticut 35.0 Landfill Site Lease
(expires July 1,
2014)
Indianapolis, Indiana 23.5 Waste-to-Energy Site lease (expires
facility Dec., 2008 subject
to four 5-year
renewal option) (2)
Stanislaus County, 16.5 Waste-to-Energy Site Lease (expires
California facility Aug 20, 2021 subject
to 15-year renewal
option) (2)
Babylon, New York 9.5 Waste-to-Energy Site Lease (expires
facility Dec. 19, 2010, with
renewal options)
Haverhill, Massachusetts 12.7 Waste-to-Energy Site Lease (expires
facility March 16, 1997,
subject to sixteen
5-year renewal
options) (2)
Haverhill, Massachusetts 16.8 RDF processing Site Lease (expires
facility March 16, 1997,
subject to sixteen
5-year renewal
options) (2)
Haverhill, Massachusetts 20.2 Landfill Site Lease
(expires March 16,
1997, subject to
sixteen 5-year
renewal options) (2)
Lawrence, Massachusetts 11.8 RDF power plant Own (2)
Lake County, Florida 15.0 Waste-to-Energy Own (2)
facility
Wallingford, Connecticut 10.3 Waste-to-Energy Site Lease (expires
facility Dec. 1, 2026) (2)
Fairfax County, Virginia 22.9 Waste-to-Energy Acquiring Fairfax
facility Authority's interest
under Site Lease
(expires March 10,
2016) pursuant to
Conditional Sales
Agreement
Imperial County, California 83.0 Undeveloped Own
Land
Huntington, New York 13.0 Waste-to-Energy Site Lease (expires
facility Oct. 28, 2012,
subject to
successive renewal
terms through Jan.
28, 2029) (2)
Warren County, New Jersey 19.8 Waste-to-Energy Site Lease (expires
facility Nov. 16, 2005
subject to two
10-year renewal
options) (2)
Hennepin County, Minnesota 14.6 Waste-to-Energy Lease of site and
facility facility (expires
Oct. 1, 2017 subject
to renewals to Dec.
20, 2024) (2) (3)
Stockton, California 4.5 Contaminated Site Lease
soil (expired February 1,
remediation 1994)
facility
(discontinued)
Tulsa, OK 22.0 Waste-to-Energy Lease of site and
facility facility (expires
April 30, 2012
subject to renewal
options to August 2,
2026) (2) (3)
Harris County, TX 14.0 Undeveloped Own
Land
Onondaga, New York Facility Site Site lease expires
contemporaneously
with service
agreement, subject
to renewal options
to May 9, 2020 (2)
NOTES:
(1) Two facilities, located in Detroit, Michigan and Honolulu, Hawaii and
not listed in the table, were initially owned by political subdivisions
and were sold to leveraged lessors. The lessors entered into lease
agreements with the respective Operating Subsidiaries, all of which
lease obligations, including the obligation to pay rent, are passed
through to the Client Communities.
(2) Indicates that the Operating Subsidiary's ownership or leasehold
interest is subject to material liens in connection with the financing
of the related project.
(3) Sublease of site expires contemporaneously with facility lease.
</TABLE>
<PAGE>
<PAGE>
OTHER INFORMATION
COMPETITION AND GENERAL BUSINESS CONDITIONS
Ogden's businesses can be adversely affected by general
economic conditions, war, inflation, adverse competitive
conditions, governmental restriction and controls, natural
disasters, energy shortages, weather, the adverse financial
condition of customers and suppliers, various technological changes
and other factors over which Ogden has no control.
The economic climate can adversely affect several of Ogden's
operations, including reduced requests by communities for waste-to-
energy facilities at Ogden Projects, Inc., fewer airline flights
and flight cancellations in the Ogden Aviation Services group; cost
cutting and budget reductions in the Ogden Government Services and
Ogden Facility Services groups; and, reduced event attendance in
the Ogden Entertainment Services group.
EQUAL EMPLOYMENT OPPORTUNITY
In recent years, governmental agencies (including the Equal
Employment Opportunity Commission) and representatives of minority
groups and women have asserted claims against many companies,
including some Ogden subsidiaries, alleging that certain persons
have been discriminated against in employment, promotions,
training, or other matters. Frequently, private actions are
brought as class actions, thereby increasing the practical
exposure. In some instances, these actions are brought by many
plaintiffs against groups of defendants in the same industry,
thereby increasing the risk that any defendant may incur liability
as a result of activities which are the primary responsibility of
other defendants. Although Ogden and its subsidiaries have
attempted to provide equal opportunity for all of its employees,
the combination of the foregoing factors and others increases the
risk of financial exposure.
EMPLOYEE AND LABOR RELATIONS
As of January 31, 1994, Ogden and its subsidiaries employed
approximately 41,800 people.
Certain employees at Ogden subsidiaries are covered by
collective bargaining agreements with various unions. During 1993,
Ogden subsidiaries successfully renegotiated collective bargaining
agreements in certain of its business sectors with no strike-
related loss of service. Ogden does not anticipate any significant
labor disputes in any of its service areas in 1994.
INTERNATIONAL TERMINAL OPERATING CO. INC.
Since April 1983, Ogden has owned 50% of the outstanding
shares of International Terminal Operating Co. Inc. (ITO), which is
engaged in providing stevedoring and related terminal services for
loading and unloading containerized and breakbulk cargo in the
United States. Because of severely depressed industry conditions,
as well as the possibility of high pension liabilities under
multiemployer plans, it does not appear likely that Ogden will be
able to recover its investment in the foreseeable future. Ogden
previously recorded a $28.5 million loss to fully reserve its
entire investment. Ogden is contingently liable for up to $19.2
million as guarantor under certain of ITO's surety bonds and
letters of credit.
AVONDALE INDUSTRIES, INC.
Pursuant to Ogden's sale of Avondale Industries, Inc.,
(Avondale) in 1985, Ogden continues as guarantor of tax-exempt
Industrial Revenue Bonds (IRBs), amounting to approximately
$36,000,000 on behalf of Avondale. The IRBs are secured by a
letter of credit which expires June 16, 1994 issued for the account
of Ogden. These IRBs are redeemable (unless remarketed) at the
option of the bondholders or Avondale on June 1, 1994, and annually
thereafter through June 1, 2001. The IRBs are subject to a
mandatory call for redemption on June 1, 1994 if the existing
letter of credit is not extended or replaced or the IRBs otherwise
refinanced. If the IRBs are redeemed, Ogden may be required to
purchase Avondale preferred stock. In addition, Ogden may also be
required to purchase Avondale preferred stock in connection with
certain litigation and income tax matters.
Item 3. LEGAL PROCEEDINGS AND ENVIRONMENTAL MATTERS
(a) Legal Proceedings
Ogden and its subsidiaries are parties to various legal
proceedings involving matters arising in the ordinary course of
business. Ogden does not believe that there are any pending legal
proceedings for damages against Ogden and its subsidiaries, the
outcome of which would have a material adverse effect on Ogden and
its subsidiaries on a consolidated basis.
(b) Environmental Matters
Ogden conducts regular inquiries of its subsidiaries regarding
litigation and environmental violations which include determining
the nature, amount and likelihood of liability for any such claims,
potential claims or threatened litigation.
In the ordinary course of its business, subsidiaries of Ogden
may become involved in Federal, state, and local proceedings
relating to the laws regulating the discharge of materials into the
environment and the protection of the environment. These include
proceedings for the issuance, amendment, or renewal of the licenses
and permits pursuant to which the subsidiary operates. Such
proceedings also include actions brought by individuals or local
governmental authorities seeking to overrule governmental decisions
on matters relating to the subsidiaries' operations in which the
subsidiary may be, but is not necessarily, a party. Most
proceedings brought against an Ogden subsidiary by governmental
authorities under these laws relate to alleged technical violations
of regulations, licenses, or permits pursuant to which the
subsidiary operates. At September 30, 1993, an Ogden subsidiary
was involved in one such proceeding in which the subsidiary
believes sanctions involved may exceed $100,000. Ogden believes
that such proceeding will not have a material adverse effect on
Ogden and its subsidiaries on a consolidated basis.
Ogden's operations are subject to various Federal, state and
local environmental laws and regulations, including the Clean Air
Act, the Clean Water Act, the Comprehensive Environmental Response
Compensation and Liability Act (CERCLA) and Resource Conservation
and Recovery Act (RCRA). Although Ogden's operations are
occasionally subject to proceedings and orders pertaining to
emissions into the environment and other environmental violations,
Ogden believes that it is in substantial compliance with existing
environmental laws and regulations and to the best of its knowledge
neither Ogden nor any of its operations have been named as a
potential responsible party at any site.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of the security holders of
Ogden during the fourth quarter of 1993.
<PAGE>
<PAGE>
<TABLE>
EXECUTIVE OFFICERS OF OGDEN
Set forth below are the names, ages, position and office, and
year appointed, of all "executive officers" (as defined by Rule 3b-
7 of the Securities Exchange Act of 1934) of Ogden as of March 31,
1994:
<CAPTION>
CONTINUALLY AN
POSITIONS & AGE AS OF OGDEN OFFICER
NAME OFFICE HELD 3/31/94 SINCE
=================================================================
<S> <C> <C> <C>
Ralph E. Ablon Chairman of 77 1962
the Board
R. Richard Ablon President & 44 1987
Chief Executive
Officer
Constantine G.Caras Executive Vice 55 1991
President & Chief
Administrative Officer
Scott G. Mackin President & Chief 37 1992
Operating Officer,
Ogden Projects, Inc.,
an 84.2% - owned sub-
sidiary of Ogden
Philip G. Husby Senior Vice 47 1991
President & Chief
Financial Officer
Lynde H. Coit Senior Vice 39 1991
President & General
Counsel
Robert M. DiGia Vice President, 69 1965
Controller & Chief
Accounting Officer
Nancy R. Christal Vice President- 35 1992
Investor Relations
Kathleen Ritch Vice President &
Secretary 51 1981
</TABLE>
There is no family relationship by blood, marriage or adoption
(not more remote than first cousins) between any of the above
individuals and any Ogden director, except that R. Richard Ablon,
an Ogden director and President and Chief Executive Officer, is the
son of Ralph E. Ablon, an Ogden director and Chairman of the Board.
The term of office of all officers shall be until the next
election of directors and until their respective successors are
chosen and qualified.
There are no arrangements or understandings between any of the
above officers and any other person pursuant to which any of the
above was selected as an officer.
Except as set forth below, the foregoing table lists the
principal occupation and employment of the named individual and the
position or similar position that he/she has held since January 1,
1989:
Ralph E. Ablon has been Chairman of the Board of Ogden since
1962 and served as its Chief Executive Officer prior to May
1990.
R. Richard Ablon has been President and Chief Executive
Officer of Ogden since May 1990. From January, 1987 to May
1990, he was President and Chief Operating Officer, Operating
Services, Ogden. Mr. Ablon has served as Chairman of the
Board and Chief Executive Officer of Ogden Projects, Inc., an
84.2% owned subsidiary, since November 1990.
Constantine G. Caras has been Executive Vice President and
Chief Administrative Officer since July 1990. Since September
1986 he has served as Executive Vice President of Ogden
Services Corporation.
Scott G. Mackin was made an Executive Officer of Ogden during
1992. He has been President and Chief Operating Officer of
Ogden Projects, Inc. since January 1991. From November 1990
to January 1991, he was Co-President, Co-Chief Operating
Officer, General Counsel and Secretary of Ogden Projects, Inc.
Between 1987 and 1990 Mr. Mackin served in various executive
capacities of Ogden Projects, Inc.
Philip G. Husby has been Senior Vice President and Chief
Financial Officer of Ogden since January 1, 1991. From April
1987 to December 31, 1990, he served as Senior Vice President
and Chief Administrative Officer of Ogden Financial Services,
Inc., an Ogden subsidiary.
Lynde H. Coit has been a Senior Vice President and General
Counsel of Ogden since January 17, 1991. From April 1989 to
January 1991, he was Senior Vice President and General Counsel
of Ogden Financial Services, Inc., an Ogden subsidiary. From
January 1988 to March 1989, he was a partner of the law firm
of Nixon, Hargrave, Devans & Doyle and prior thereto he was
employed by that firm.
Nancy R. Christal has been Vice President - Investor Relations
of Ogden since February 1992 and served as Ogden's Director,
Investor Relations from January 1991 to February 1992. From
April 1990 to January 1991, she was Director, Investor
Relations at Ogden Projects, Inc. From 1985 to March 1990 she
served first as Manager and then as Assistant Vice President,
Investor Relations at Chemical Bank.
<PAGE>
<PAGE>
Part II
Item 5. MARKET FOR OGDEN'S COMMON EQUITY & RELATED STOCKHOLDER
MATTERS
Pursuant to General Instruction G (2), the information called
for by this item is hereby incorporated by reference from Page 47
of Ogden's 1993 Annual Report to Shareholders.
As of March 1, 1994, the approximate number of Ogden common
stock Shareholders was 12,700.
Item 6. SELECTED FINANCIAL DATA
Pursuant to General Instruction G (2), the information called
for by this item is hereby incorporated by reference from Page 24
of Ogden's 1993 Annual Report to Shareholders.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Pursuant to General Instruction G (2), the information called
for by this item is hereby incorporated by reference from Pages 22
and 23 of Ogden's 1993 Annual Report to Shareholders.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Pursuant to General Instruction G (2), the information called
for by this item is hereby incorporated by reference from Pages 24
through 44 and Page 47 of Ogden's 1993 Annual Report to
Shareholders.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
Not Applicable.
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF OGDEN
Pursuant to General Instruction G (3), the information
regarding directors called for by this item is hereby incorporated
by reference from Ogden's 1994 Proxy Statement to be filed with the
Securities and Exchange Commission.
Item 11. EXECUTIVE COMPENSATION
Pursuant to General Instruction G (3), the information called
for by this item is hereby incorporated by reference from Ogden's
1994 Proxy Statement to be filed with the Securities and Exchange
Commission. The information regarding officers called for by this
item is included at the end of Part I of this document under the
heading "Executive Officers of Ogden."
<PAGE>
<PAGE>
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
Pursuant to General Instruction G (3), the information called
for by this item is hereby incorporated by reference from Ogden's
1994 Proxy Statement to be filed with the Securities and Exchange
Commission.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Pursuant to General Instruction G (3), the information called
for by this item is hereby incorporated by reference from Ogden's
1994 Proxy statement to be filed with the Securities and Exchange
Commission.
Part IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
FORM 8-K
(a) Listed below are the documents filed as a part of this
report:
1). All financial statements contained on pages 25 through
44 and the Independent Auditors' Report on page 45 of
Ogden's 1993 Annual Report to Shareholders are
incorporated herein by reference.
2). Financial statement schedules as follows:
(i) Schedule II - Amounts Receivable from Related
Parties and Underwriters, Promoters and
Employees other than Related Parties for the
years ended December 31, 1993, 1992 and 1991.
(ii) Schedule V - Property, Plant and Equipment for
years ended December 31, 1993, 1992 and 1991.
(iii) Schedule VI - Accumulated Depreciation,
Depletion and Amortization of Property, Plant
and Equipment for the years ended December 31,
1993, 1992 and 1991.
(iv) Schedule VIII - Valuation and Qualifying
Accounts for the years ended December 31,
1993, 1992 and 1991.
(v) Schedule IX - Short-Term Borrowings for the
year ended December 31, 1991.
(vi) Schedule X - Supplementary Income Statement
Information for the years ended December 31,
1993, 1992 and 1991.
3). Those exhibits required to be filed by Item 601 of
Regulation S-K:
EXHIBITS
3.0 Articles of Incorporation and By-laws.
3.1 Ogden's Restated Certificate of Incorporation as
amended.*
3.2 Ogden's By-Laws, as amended through March 17, 1994
transmitted herewith as Exhibit 3.2.
4.0 Instruments Defining Rights of Security Holders.
4.1 Fiscal Agency Agreement between Ogden and Bankers
Trust Company, dated as of June 1, 1987, and
Offering Memorandum dated June 12, 1987, relating
to U.S. $85 million Ogden 6% Convertible
Subordinated Debentures, Due 2002.*
4.2 Fiscal Agency Agreement between Ogden and Bankers
Trust Company, dated as of October 15, 1987, and
Offering Memorandum, dated October 15, 1987,
relating to U.S. $75 million Ogden 5-3/4%
Convertible Subordinated Debentures, Due 2002.*
4.3 Indenture dated as of March 1, 1992 from Ogden
Corporation to The Bank of New York, Trustee,
relating to Ogden's $100 million debt offering.*
10.0 Material Contracts
10.1 Agreement and Plan of Merger, dated as of October
31, 1989, among Ogden, ERCI Acquisition Corporation
and ERC International, Inc.*
10.2 Credit Agreement by and among Ogden, The Bank of
New York, as Agent and the signatory bank Lenders
thereto dated as of September 20, 1993.
Transmitted herewith as Exhibit 10.2.
10.3 Stock Purchase Agreement, dated May 31, 1988,
between Ogden and Ogden Projects, Inc.*
10.4 Tax Sharing Agreement, dated January 1, 1989,
between Ogden, Ogden Projects, Inc. and
subsidiaries, Ogden Allied Services, Inc. an
subsidiaries, and Ogden Financial Services, Inc.
and subsidiaries.*
10.5 Stock Purchase Option Agreement, dated June 14,
1989, between Ogden and Ogden Projects, Inc. as
amended on November 16, 1989.*
10.6 Preferred Stock Purchase Agreement, dated July 7,
1989, between Ogden Financial Services, Inc. and
Image Data Corporation.*
10.7 Rights Agreement between Ogden Corporation and
Manufacturers Hanover Trust Company, dated as of
September 20, 1990.*
10.8 Executive Compensation Plans and Arrangements
(a) Ogden Corporation 1986 Stock Option Plan
(Filed as Exhibit (10) (k) to Ogden's Form 10-
K for the fiscal year ended December 31, 1985)
(b) Ogden Corporation 1990 Stock Option Plan
(Filed as Exhibit (10) (j))**
(c) Ogden Services Corporation Executive Pension
Plan (Filed as Exhibit (10) (k))**
(d) Ogden Services Corporation Select Savings Plan
(Filed as Exhibit (10) (L))**
(e) Ogden Services Corporation Select Savings Plan
Trust (Filed as Exhibit (10) (M))**
(f) Ogden Services Corporation Executive Pension
Plan Trust (Filed as Exhibit (10) (N))**
(g) Changes effected to the Ogden Profit Sharing
Plan effective January 1, 1990 (Filed as
Exhibit (10) (O))**
(h) Employment Letter Agreement between Ogden and
an Executive officer dated January 30, 1990
(Filed as Exhibit (10) (p))**
(i) Employment Agreement between Ogden and R.
richard Ablon dated as of May 24, 1990 (Filed
as Exhibit (10) (R))**
(i) Letter Amendment Employment Agreement
between Ogden and R. Richard Ablon dated
as of October 11, 1990 (Filed as Exhibit
(10) (R) (i))**
(j) Employment Agreement between Ogden and C. G.
Caras dated as of July 2, 1990 (Filed as
Exhibit (10) (S))**
(i) Letter Amendment to Employment Agreement
between Ogden Corporation and C.G. Caras,
dated as of October 11, 1990 (Filed as
Exhibit (10) (S) (i).**
(k) Employment Agreement between Ogden and Philip
G. Husby as of July 2, 1990 (Filed as Exhibit
(10) (T))**
(l) Termination Letter Agreement between Maria P.
Monet and Ogden dated as of October 22, 1990
(Filed as Exhibit (10) (V)**
(m) Letter Agreement between Ogden Corporation and
Ogden's Chairman of the Board, dated as of
January 16, 1992 (Filed as Exhibit (10.2) (P)
to Ogden Form 10-K for the fiscal year ended
December 31, 1991)
(n) Employment Agreement between Ogden and Ogden's
Chief Accounting Officer dated as of December
18, 1991 (Filed as Exhibit (10.2) (Q) to Ogden
Form 10-K for fiscal year ended December,
1991)
(o) Employment Agreement between Scott G. Mackin
and Ogden Projects, Inc. dated as of January
1, 1994. Transmitted herewith as Exhibit 10.8
(o).
(p) Ogden Corporation Profit Sharing Plan (Filed
as Exhibit (10.8) (P))***
(i) Ogden Profit Sharing Plan as amended and
restated January 1, 1991 and as in effect
through January 1, 1993. Transmitted
herewith as Exhibit 10.8 (p) (i).
(q) Ogden Corporation Core Executive Benefit
Program (Filed as Exhibit 10.8 (Q))***
(r) Ogden Projects Pension Plan (Filed as Exhibit
10.8 (R))***
(s) Ogden Projects Profit Sharing Plan (Filed as
Exhibit 10.8 (S))***
(t) Ogden Projects Supplemental Pension and Profit
Sharing Plans (Filed as Exhibit 10.8 (T))***
(u) Ogden Projects Employee's Stock Option Plan
(Filed as Exhibit 10.8 (U))***
(v) Ogden Projects Core Executive Benefit Program
(Filed as Exhibit 10.8 (V))***
(w) Form of amendments to the Ogden Projects, Inc.
Pension Plan and Profit Sharing Plans
effective as of January 1, 1994. Transmitted
herewith as Exhibit 10.8 (w).
** Filed as Exhibits with Ogden's Form 10-K for
fiscal year ended December 31, 1990.
*** Filed as Exhibits with Ogden's Form 10-K for
fiscal year ended December 31, 1992.
10.9 Agreement and Plan of Merger among Ogden
Corporation, ERC International, Inc., ERC
Acquisition Corporation and ERC Environmental and
Energy Services Co., Inc., dated as of January 17,
1991.*
10.10 First Amended and Restated Ogden Corporation
Guaranty Agreement made as of January 30, 1992 by
Ogden Corporation for the benefit of Mission
Funding Zeta and Pitney Bowes Credit Corporation.*
<PAGE>
<PAGE>
10.11 Ogden Corporation Guaranty Agreement as of January
30, 1992 by Ogden Corporation for the benefit of
Allstate Insurance Company and Ogden Martin Systems
of Huntington Resource Recovery Nine Corporation.*
11 Ogden Corporation and Subsidiaries Detail of
Computation of Earnings Applicable to Common Stock
for the years ended December 31, 1993, 1992 and
1991. Transmitted herewith as Exhibit 11.
13 Those portions of the Annual Report to Stockholders
for the year ended December 31, 1993, which are
incorporated herein by reference. Transmitted
herewith as Exhibit 13.
21 Subsidiaries of Ogden. Transmitted herewith as
Exhibit 21.
24 Consent of Deloitte & Touche. Transmitted herewith
as Exhibit 24.
* Incorporated by reference as set forth in the Exhibit Index
of this Annual Report on Form 10-K.
(b) No Reports on Form 8-K were filed by Ogden during
the fourth quarter of 1992.
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 and 15(d) 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.
OGDEN CORPORATION
March 17, 1994 By /S/ R. Richard Ablon
R. Richard Ablon
President and Chief
Executive Officer
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the Registrant and in the capacities indicated on March
17, 1994.
SIGNATURE TITLE
/S/ Ralph E. Ablon Chairman of the Board & Director
RALPH E. ABLON
/S/ R. Richard Ablon President & Chief Executive Officer
R. RICHARD ABLON and Director
/S/ Philip G. Husby Senior Vice President and Chief
PHILIP G. HUSBY Financial Officer
/S/ Robert M. DiGia Vice President, Controller and Chief
ROBERT M. DIGIA Accounting Officer
/S/ David M. Abshire Director
DAVID M. ABSHIRE
/S/ Norman G. Einspruch Director
NORMAN G. EINSPRUCH
/S/ Constantine G. Caras Director
CONSTANTINE G. CARAS
/S/ Rita R. Fraad Director
RITA R. FRAAD
/S/ Attallah Kappas Director
ATTALLAH KAPPAS
Director
TERRY ALLEN KRAMER
/S/ Maria P. Monet Director
MARIA P. MONET
Director
JUDITH D. MOYERS
/S/ Homer A. Neal Director
HOMER A. NEAL
/S/ Stanford S. Penner Director
STANFORD S. PENNER
/S/ Frederick Seitz Director
FREDERICK SEITZ
/S/ Robert E. Smith Director
ROBERT E. SMITH
/S/ Abraham Zaleznik Director
ABRAHAM ZALEZNIK<PAGE>
<PAGE>
<TABLE>
SCHEDULE II
OGDEN CORPORATION AND SUBSIDIARIES
AMOUNTS RECEIVABLE FROM RELATED PARTIES AND UNDERWRITERS,
PROMOTERS, AND EMPLOYEES OTHER THAN RELATED PARTIES
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1993
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
BALANCE AT END
DEDUCTIONS OF PERIOD
BALANCE AT
BEGINNING AMOUNTS AMOUNTS NOT
NAME OF DEBTOR OF PERIOD ADDITIONS COLLECTED WRITTEN OFF CURRENT CURRENT
<S> <C> <C> <C>
A. Kanaby (A) $ 14,000 $7,000 $ 7,000
D. Warg (A) 62,000 62,000
L. Coit (B) 290,000 290,000
J. Callahan (C) 612,000 612,000
NOTES:
(A) Relocation loans, non-interest bearing, non-collateralized promissory notes.
(B) Mortgage loan, collateralized promissory note, bearing interest at 8% per
annum.
(C) Mortgate loan, non-interest bearing, collateralized promissory note.
</TABLE>
<PAGE>
<TABLE>
SCHEDULE II
OGDEN CORPORATION AND SUBSIDIARIES
AMOUNTS RECEIVABLE FROM RELATED PARTIES AND UNDERWRITERS,
PROMOTERS, AND EMPLOYEES OTHER THAN RELATED PARTIES
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1992
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
BALANCE AT END
DEDUCTIONS OF PERIOD
BALANCE AT
BEGINNING AMOUNTS AMOUNTS NOT
NAME OF DEBTOR OF PERIOD ADDITIONS COLLECTED WRITTEN OFF CURRENT CURRENT
<S> <C> <C> <C> <C> <C>
A. Kanaby (A) $ 19,000 $ 5,000 $ 14,000
D. Warg (A) $103,000 41,000 27,000 $35,000
L. Coit (B) 785,000 290,000 785,000 290,000
J. Callahan (C) 612,000 612,000
NOTES:
(A) Relocation loans, non-interest bearing, non-collateralized promissory notes.
(B) Mortgage loans, collateralized promissory notes, bearing interest at 8% per
annum.
(C) Mortgage loan, non-interest bearing, collateralized promissory note.
</TABLE>
<PAGE>
<TABLE>
SCHEDULE II
OGDEN CORPORATION AND SUBSIDIARIES
AMOUNTS RECEIVABLE FROM RELATED PARTIES AND UNDERWRITERS,
PROMOTERS, AND EMPLOYEES OTHER THAN RELATED PARTIES
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1991
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
BALANCE AT END
DEDUCTIONS OF PERIOD
BALANCE AT
BEGINNING AMOUNTS AMOUNTS NOT
NAME OF DEBTOR OF PERIOD ADDITIONS COLLECTED WRITTEN OFF CURRENT CURRENT
<S> <C> <C> <C> <C> <C>
A. Kanaby (A) $162,000 $113,000 $30,000 $ 19,000
L. Coit (B) 785,000 785,000
B. Delle Donne (C) 175,000 175,000
W. Willis (D) $380,000 380,000
NOTES:
(A) Relocation loans, non-interest bearing, non-collateralized promissory notes.
(B) Mortgage loans, collateralized promissory notes, bearing interest at 8% per
annum.
(C) Mortgage loan, collateralized promissory note, bearing interest at 8.5% per
annum.
(D) Promissory note, bearing interest at prime rate.
</TABLE>
<PAGE>
<TABLE>
SCHEDULE V
OGDEN CORPORATION AND SUBSIDIARIES
PROPERTY, PLANT AND EQUIPMENT
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1993
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
BALANCE AT OTHER CHANGES BALANCE AT
BEGINNING ADDITIONS ADD (DEDUCT) END OF
CLASSIFICATION OF PERIOD AT COST RETIREMENTS DESCRIBE PERIOD
<S> <C> <C> <C> <C> <C>
Operations other than waste to energy:
Land $ 1,805,000 $ 1,000 $ 1,804,000
Building and improvements 94,321,000 $ 5,523,000 4,818,000 $ (7,000) (B) 95,019,000
Machinery and equipment 249,877,000 28,865,000 19,884,000 3,185,000 (A) 262,050,000
7,000 (B)
Total $ 346,003,000 $34,388,000 $24,703,000 $ 3,185,000 $ 358,873,000
Waste-to-energy operations:
Land $ 5,049,000 $ 5,049,000
Waste-to-energy facilities 1,538,762,000 $ 611,000 1,539,373,000
Building and improvements 39,498,000 4,420,000 $ 4,228,000 (C) 48,146,000
Machinery and equipment 19,228,000 4,066,000 $ 278,000 23,016,000
Landfills 8,306,000 158,000 8,464,000
Construction in progress 24,993,000 73,292,000 (2,496,000) (D) 95,789,000
Total $1,635,836,000 $82,547,000 $ 278,000 $ 1,732,000 $1,719,837,000
Notes:
(A) Entities purchased.
(B) Reclassification to machinery and equipment.
(C) Represents $2,496,000 from the reclassification of construction in progress upon completion and $1,732,000 from the acquisition
of the capital stock of RRS Holdings, Inc.
(D) Reclassification of construction in progress upon completion.
</TABLE>
<PAGE>
<TABLE>
SCHEDULE V
OGDEN CORPORATION AND SUBSIDIARIES
PROPERTY, PLANT AND EQUIPMENT
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1992
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
BALANCE AT OTHER CHANGES BALANCE AT
BEGINNING ADDITIONS ADD (DEDUCT) END OF
CLASSIFICATION OF PERIOD AT COST RETIREMENTS DESCRIBE PERIOD
<S> <C> <C> <C> <C> <C>
Operations other than waste to energy:
Land $ 1,873,000 $ 68,000 $ 1,805,000
Building and improvements 82,539,000 $ 8,238,000 2,721,000 $ 6,265,000 (B) 94,321,000
Machinery and equipment 234,917,000 22,527,000 8,237,000 1,727,000 (A) 249,877,000
(1,057,000)(E)
Construction in progress 6,262,000 3,000 (6,265,000)(B)
Total $ 325,591,000 $30,768,000 $11,026,000 $ 670,000 $ 346,003,000
Waste-to-energy operations:
Land $ 5,049,000 $ 5,049,000
Waste-to-energy facilities 1,491,791,000 $ 9,804,000 $ 101,000 $ 37,268,000 (C) 1,538,762,000
Building and improvements 27,075,000 8,556,000 3,867,000 (B) 39,498,000
Machinery and equipment 16,168,000 3,430,000 370,000 19,228,000
Landfills 8,166,000 140,000 8,306,000
Construction in progress 10,054,000 16,441,000 (1,502,000)(D) 24,993,000
Total $ 1,558,303,000 $38,371,000 $ 471,000 $ 39,633,000 $1,635,836,000
Notes:
(A) Entities purchased.
(B) Reclassification of construction in progress upon completion.
(C) Represents $39,633,000 from adjustment to acquired property, plant and equipment to pretax amounts upon adoption of Statement
of Financial Accounting Standards No. 109 and $(2,365,000) from adjustment of accruals.
(D) Represents $(3,867,000) from the reclassification of construction in progress upon completion and $2,365,000 from adjustment of
accruals.
(E) Transferred to other assets.
Prior-year amounts have been reclassified to conform with the 1993 presentation.
</TABLE>
<PAGE>
<TABLE>
SCHEDULE V
OGDEN CORPORATION AND SUBSIDIARIES
PROPERTY, PLANT AND EQUIPMENT
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1991
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
BALANCE AT OTHER CHANGES BALANCE AT
BEGINNING ADDITIONS ADD (DEDUCT) END OF
CLASSIFICATION OF PERIOD AT COST RETIREMENTS DESCRIBE PERIOD
<S> <C> <C> <C> <C> <C>
Operations other than waste to energy:
Land $ 2,018,000 $ 145,000 $ 1,873,000
Building and improvements 78,399,000 $ 7,972,000 4,247,000 $ 324,000 (B) 82,539,000
91,000 (A)
Machinery and equipment 220,992,000 22,183,000 15,271,000 7,013,000 (A) 234,917,000
Construction in progress 7,691,000 6,000 1,111,000 (324,000)(B) 6,262,000
Total $ 309,100,000 $30,161,000 $20,774,000 $ 7,104,000 $ 325,591,000
Waste-to-energy operations:
Land $ 5,158,000 $ (109,000)(C) $ 5,049,000
Waste-to-energy facilities 1,042,702,000 $ 659,000 448,430,000 (D) 1,491,791,000
Building and improvements 26,516,000 559,000 27,075,000
Machinery and equipment 12,626,000 3,612,000 $ 70,000 16,168,000
Landfills 8,371,000 107,000 (312,000)(C) 8,166,000
Construction in progress 178,621,000 68,944,000 (237,511,000)(E) 10,054,000
Total $1,273,994,000 $ 73,881,000 $ 70,000 $ 210,498,000 $1,558,303,000
Notes:
(A) Entities purchased.
(B) Reclassification of construction in progress upon completion.
(C) Adjustment of accruals.
(D) Represents $238,723,000 from the reclassification of construction in progress upon completion, $202,974,000 from the
acquisition of the capital stock of Blount Energy Resource Corp., $8,300,000 from contract cost adjustment, and
$(1,567,000) from adjustment of accruals.
(E) Represents $(238,723,000) from the reclassification of construction in progress upon completion and $1,212,000 from adjustment
of accruals.
</TABLE>
<PAGE>
<TABLE>
SCHEDULE VI
OGDEN CORPORATION AND SUBSIDIARIES
ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION
PROPERTY, PLANT AND EQUIPMENT
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1993
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
ADDITIONS
BALANCE AT CHARGED TO OTHER CHANGES BALANCE AT
BEGINNING COST AND ADD (DEDUCT) END OF
DESCRIPTION OF PERIOD EXPENSES RETIREMENTS DESCRIBE PERIOD
<S> <C> <C> <C> <C> <C>
Operations other than waste to energy:
Building and improvements $ 45,830,000 $ 6,851,000 $ 2,156,000 $ (58,000) (B) $ 50,467,000
Machinery and equipment 166,535,000 25,255,000 16,258,000 2,377,000 (A) 177,967,000
58,000 (B)
Total $212,365,000 $32,106,000 $18,414,000 $2,377,000 $228,434,000
Waste-to-energy operations:
Waste-to-energy facilities $ 98,475,000 $35,134,000 $133,609,000
Building and improvements 2,073,000 384,000 $ 359,000 (C) 2,816,000
Machinery and equipment 11,761,000 2,277,000 $ 264,000 604,000 (C) 14,378,000
Landfills 5,309,000 363,000 5,672,000
Total $117,618,000 $38,158,000 $ 264,000 $ 963,000 $156,475,000
Notes:
(A) Entities purchased.
(B) Reclassification to machinery and equipment.
(C) Amount capitalized.
</TABLE>
<PAGE>
<TABLE>
SCHEDULE VI
OGDEN CORPORATION AND SUBSIDIARIES
ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION
PROPERTY, PLANT AND EQUIPMENT
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1992
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
ADDITIONS
BALANCE AT CHARGED TO OTHER CHANGES BALANCE AT
BEGINNING COST AND ADD (DEDUCT) END OF
DESCRIPTION OF PERIOD EXPENSES RETIREMENTS DESCRIBE PERIOD
<S> <C> <C> <C> <C> <C>
Operations other than waste to energy:
Building and improvements $ 41,001,000 $ 6,086,000 $1,257,000 $ 45,830,000
Machinery and equipment 150,692,000 23,143,000 7,163,000 $ 450,000 (A) 166,535,000
(587,000)(D)
Total $191,693,000 $29,229,000 $8,420,000 $(137,000) $212,365,000
Waste-to-energy operations:
Waste-to-energy facilities $ 62,352,000 $34,551,000 $ 10,000 $1,582,000 (B) $ 98,475,000
Building and improvements 1,647,000 68,000 358,000 (C) 2,073,000
Machinery and equipment 9,357,000 2,094,000 322,000 632,000 (C) 11,761,000
Landfills 5,277,000 32,000 5,309,000
Total $ 78,633,000 $36,745,000 $ 332,000 $2,572,000 $117,618,000
Notes:
(A) Entities purchased.
(B) Adjustment to acquired property, plant and equipment to pretax amounts upon adoption of Statement of Financial Standards
No. 109.
(C) Amounts capitalized.
(D) Transferred to other assets.
</TABLE>
<PAGE>
<TABLE>
SCHEDULE VI
OGDEN CORPORATION AND SUBSIDIARIES
ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION
PROPERTY, PLANT AND EQUIPMENT
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1991
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
ADDITIONS
BALANCE AT CHARGED TO OTHER CHANGES BALANCE AT
BEGINNING COST AND ADD (DEDUCT) END OF
DESCRIPTION OF PERIOD EXPENSES RETIREMENTS DESCRIBE PERIOD
s> <C> <C> <C> <C> <C>
Operations other than waste to energy:
Building and improvements $ 37,425,000 $ 5,707,000 $ 2,131,000 $ 41,001,000
Machinery and equipment 139,072,000 22,137,000 12,336,000 $1,819,000 (A) 150,692,000
Total $176,497,000 $27,844,000 $14,467,000 $1,819,000 $191,693,000
Waste-to-energy operations:
Waste-to-energy facilities $ 35,441,000 $26,911,000 $62,352,000
Building and improvements 1,243,000 46,000 $ 358,000 (B) 1,647,000
Machinery and equipment 6,425,000 1,656,000 $ 58,000 1,334,000 (B) 9,357,000
Landfills 5,138,000 609,000 (470,000)(C) 5,277,000
Total $ 48,247,000 $29,222,000 $ 58,000 $1,222,000 $78,633,000
Notes:
(A) Entities purchased.
(B) Amount capitalized.
(C) Adjustment of accruals.
</TABLE>
<PAGE>
<TABLE>
SCHEDULE VIII
OGDEN CORPORATION AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1993
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
ADDITIONS
BALANCE AT CHARGED TO BALANCE AT
BEGINNING COSTS AND CHARGED TO END OF
DESCRIPTION OF PERIOD EXPENSES OTHER ACCOUNTS DEDUCTIONS PERIOD
<S> <C> <C> <C> <C> <C>
Allowances deducted in the balance sheet
from the assets to which they apply:
Operations other than waste to energy:
Doubtful receivables - current $14,954,000 $7,502,000 $ 119,000 (C) $ 4,326,000 (B) $18,226,000
71,000 (D) 94,000 (F)
Waste-to-energy operations:
Doubtful receivables 4,776,000 180,000 4,073,000 (E) 1,708,000 (B) 7,321,000
Deferred charges on projects 750,000 750,000
TOTAL $20,480,000 $7,682,000 $4,263,000 $ 6,128,000 $26,297,000
Allowances not deducted:
Operations other than waste to energy:
Provision for consolidation of facilities $ 6,040,000 $ 1,320,000 (A) $ 4,720,000
Sundry 285,000 158,000 (A) 127,000
Waste-to-energy operations:
Estimated cost of disposal of discontinued
operations 7,620,000 $1,706,000 $4,061,000 (G) 12,379,000 (H) 1,008,000
Other 1,350,000 1,350,000
TOTAL $13,945,000 $3,056,000 $4,061,000 $13,857,000 $ 7,205,000
Notes:
(A) Payments charged to allowances.
(B) Write-offs of receivables considered uncollectible.
(C) Transfer from other accounts.
(D) Recoveries of amounts previously written off.
(E) Reserve for contract billing adjustments.
(F) Transfer to other accounts.
(G) Net proceeds from on-site remediation utilizing mobile technology $3,853,000 and reclassification of liabilities pertaining to
fixed-site hazardous waste business $208,000.
(H) Gain from on-site remediation business utilizing mobile technology.<PAGE>
</TABLE>
<PAGE>
<TABLE>
SCHEDULE VIII
OGDEN CORPORATION AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1992
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
ADDITIONS
BALANCE AT CHARGED TO BALANCE AT
BEGINNING COSTS AND CHARGED TO END OF
DESCRIPTION OF PERIOD EXPENSES OTHER ACCOUNTS DEDUCTIONS PERIOD
<S> <C> <C> <C> <C> <C>
Allowances deducted in the balance
sheet from the assets to which they
apply:
Operations other than waste to energy:
Doubtful receivables - current $14,967,000 $3,014,000 $1,841,000 (C) $ 4,886,000 (B) $14,954,000
18,000 (D)
Waste-to-energy operations:
Doubtful receivables 531,000 265,000 4,121,000 (E) 141,000 (B) 4,776,000
Deferred charges on projects 6,500,000 5,750,000 (F) 750,000
TOTAL $21,998,000 $3,279,000 $5,980,000 $10,777,000 $20,480,000
Allowances not deducted:
Operations other than waste to energy:
Provision for consolidation of facilities $ 7,360,000 $ 1,320,000 (A) $ 6,040,000
Sundry 1,225,000 940,000 (A) 285,000
Waste-to-energy operations:
Estimated cost of disposal of discontinued
operations 7,090,000 $ 530,000 (G) 7,620,000
TOTAL $15,675,000 $ 530,000 $ 2,260,000 $13,945,000
Notes:
(A) Payments charged to allowances.
(B) Write-offs of receivables considered uncollectible.
(C) Transfer from other accounts.
(D) Recoveries of amounts previously written off.
(E) Reserve for contract billing adjustments.
(F) Write-offs of unsuccessful development efforts.
(G) Net proceeds from discontinued operations.
</TABLE>
<PAGE>
<TABLE>
SCHEDULE VIII
OGDEN CORPORATION AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1991
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
ADDITIONS
BALANCE AT CHARGED TO BALANCE AT
BEGINNING COSTS AND CHARGED TO END OF
DESCRIPTION OF PERIOD EXPENSES OTHER ACCOUNTS DEDUCTIONS PERIOD
<S> <C> <C> <C> <C> <C>
Allowances deducted in the balance
sheet from the assets to which they
apply:
Operations other than waste to energy:
Doubtful receivables - current $13,462,000 $ 7,642,000 $1,000,000 (D) $7,281,000 (B) $14,967,000
144,000 (E)
Waste-to-energy operations:
Doubtful receivables 163,000 406,000 38,000 (B) 531,000
Deferred charges on projects 6,500,000 6,500,000
TOTAL $13,625,000 $14,548,000 $1,144,000 $7,319,000 $21,998,000
Allowances not deducted:
Operations other than waste to energy:
Provision for consolidation of facilities $ 8,680,000 $1,320,000 (A) $ 7,360,000
Sundry 1,393,000 38,000 (A) 1,225,000
130,000 (C)
Waste-to-energy operations:
Estimated cost of disposal of discontinued
operations $ 7,090,000 7,090,000
TOTAL $10,073,000 $ 7,090,000 $1,488,000 $15,675,000
Notes:
(A) Payments charged to allowances.
(B) Write-offs of receivables considered uncollectible.
(C) Transfer to other accounts.
(D) Transfer from other accounts.
(E) Recoveries of amounts previously written off.
</TABLE>
<PAGE>
<TABLE>
SCHEDULE IX
OGDEN CORPORATION AND SUBSIDIARIES
SHORT-TERM BORROWINGS
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1991
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
MAXIMUM AVERAGE WEIGHTED
CATEGORY OF WEIGHTED AMOUNT AMOUNT AVERAGE
AGGREGATE BALANCE AT AVERAGE OUTSTANDING OUTSTANDING INTEREST
SHORT-TERM END OF INTEREST DURING DURING RATE DURING
BORROWINGS PERIOD RATE PERIOD(A) PERIOD (B) PERIOD (C)
<S> <C> <C> <C>
Borrowings
from banks $9,675,000 $6,166,000 8.05
Notes:
(A) The maximum amount outstanding during the year represents the maximum
amount at any month end.
(B) The average amount outstanding is equal to average monthly outstanding
balances.
(C) The weighted average interest rate is the actual interest on short-term
debt divided by the average short-term debt outstanding.
</TABLE>
<PAGE>
<TABLE>
SCHEDULE X
OGDEN CORPORATIONS AND SUBSIDIARIES
SUPPLEMENTARY INCOME STATEMENT INFORMATION
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992, AND 1991
<CAPTION>
COLUMN A-ITEM COLUMN B
CHARGED TO COSTS AND EXPENSES
1993 1992 1991
<S> <C> <C> <C>
Maintenance and repairs:
Operations other than waste to energy $17,802,000 $17,514,000 $17,512,000
Waste-to-energy operations 55,161,000 40,873,000 36,019,000
Total $72,963,000 $58,387,000 $53,531,000
</TABLE>
<PAGE>
INDEPENDENT AUDITOR'S REPORT
Ogden Corporation:
We have audited the consolidated financial statements of Ogden Corporation
and subsidiaries as of December 31, 1993 and 1992 and for each of the three
years in the period ended December 31, 1993, and have issued our report
thereon dated February 2, 1994, which report includes an explanatory
paragraph relating to the adoption of Statements of Financial Accounting
Standards No. 106 and No. 109; such consolidated financial statements and
report are included in your 1993 Annual Report to Shareholders and are
incorporated herein by reference. Our audits also included the consolidated
financial statement schedules of Ogden Corporation and subsidiaries, listed
in Item 14. These consolidated financial statement schedules are the
responsibility of the Corporation's management. Our responsibility is to
express an opinion based on our audits. In our opinion, such consolidated
financial statement schedules, when considered in relation to the basic
consolidated financial statements taken as a whole, present fairly in all
material respects the information set forth therein.
/s/Deloitte & Touche
February 2, 1994
EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION OF DOCUMENT FILING INFORMATION
3 Articles of Incorporation and
By-Laws.
3.1 Ogden's Restated Certificate Filed as Exhibit (3)(a)
of Incorporation as amended. to Ogden's Form 10-K for the
fiscal year ended December 31,
1988 and incorporated herein
by reference.
3.2 Ogden's By-Laws, as amended Transmitted herewith as
through March 17, 1994. Exhibit No. 3.2.
4 Instruments Defining Rights of
Security Holders.
4.1 Fiscal Agency Agreement between Filed as Exhibits (C)(3) and
Ogden and Bankers Trust Company, (C)(4) to Ogden's Form 8-K
dated as of June 1, 1987 and filed with the Securities and
Offering Memorandum dated June Exchange Commission on July 7,
12, 1987, relating to U.S. 1987 and incorporated herein
$85 million Ogden 6% Convertible by reference.
Subordinated Debentures, Due 2002.
4.2 Fiscal Agency Agreement between Filed as Exhibit (4) to Ogden's
Ogden and Bankers Trust Company, Form S-3 Registration Statement
dated as of October 15, 1987, filed with the Securities and
and Offering Memorandum, dated Exchange Commission on December
October 15, 1987, relating to 4, 1987, Registration No.
U.S. $75 million Ogden 5-3/4% 33-18875, and incorporated
Convertible Subordinated herein by reference.
Debentures, Due 2002.
4.3 Indenture dated as of March 1, Filed as Exhibit (4)(C) to
1992 from Ogden Corporation to Ogden's Form 10-K for fiscal
The Bank of New York, Trustee, year ended December 31, 1991,
relating to Ogden's $100 million and incorporated herein by
debt offering. reference.
10 Material Contracts
10.1 Agreement and Plan of Merger, Filed as Exhibit 2 to Ogden's
dated as of October 31, 1989, Form S-4 Registration Statement
among Ogden, ERCI Acquisition File No. 33-32155, and
Corporation and ERC International incorporated herein by
Inc. reference.
10.2 Credit Agreement by and among Transmitted herewith as Exhibit
Ogden, The Bank of New York, as No. 10.2.
Agent and the signatory Lenders
thereto dated as of September 20,
1993.
<PAGE>
EXHIBIT
NO. DESCRIPTION OF DOCUMENT FILING INFORMATION
10.3 Stock Purchase Agreement dated Filed as Exhibit (10)(d) to
May 31, 1988, between Ogden and Ogden's Form 10-K for the
Ogden Projects, Inc. fiscal year ended December 31,
1989 and incorporated herein
by reference.
10.4 Tax Sharing Agreement, dated Filed as Exhibit (10)(e) to
January 1, 1989 between Ogden, Ogden's Form 10-K for the
Ogden Projects, Inc. and fiscal year ended December 31,
subsidiaries, Ogden Allied 1989 and incorporated herein
Services, Inc. and subsidiaries by reference.
and Ogden Financial Services,
Inc. and subsidiaries.
10.5 Stock Purchase Option Agreement, Filed as Exhibit (10)(f) to
dated June 14, 1989, between Ogden's Form 10-K for the
Ogden and Ogden Projects, Inc. fiscal year ended December 31,
as amended on November 16, 1989. 1989 and incorporated herein
by reference.
10.6 Preferred Stock Purchase Filed as Exhibit (10)(g) to
Agreement, dated July 7, 1989, Ogden's Form 10-K for the
between Ogden Financial Services, fiscal year ended December 31,
Inc. and Image Data Corporation. 1989 and incorporated herein
by reference.
10.7 Rights Agreement between Ogden Filed as Exhibit (10)(h) to
Corporation and Manufacturers Ogden's Form 10-K for the
Hanover Trust Company, dated as fiscal year ended December 31,
of September 20, 1990. 1990 and incorporated herein
by reference.
10.8 Executive Compensation Plans and
Agreements.
(a) Ogden Corporation 1986 Filed as Exhibit (10)(k) to
Stock Option Plan. Ogden's Form 10-K for the
fiscal year ended December 31,
1985 and incorporated herein
by reference.
(b) Ogden Corporation 1990 Filed as Exhibit (10)(j) to
Stock Option Plan. Ogden's Form 10-K for the
fiscal year ended December 31,
1990 and incorporated herein
by reference.
(c) Ogden Services Corporation Filed as Exhibit (10)(k) to
Executive Pension Plan. Ogden's Form 10-K for the
fiscal year ended December 31,
1990 and incorporated herein
by reference.
<PAGE>
EXHIBIT
NO. DESCRIPTION OF DOCUMENT FILING INFORMATION
(d) Ogden Services Corporation Filed as Exhibit (10)(l) to
Select Savings Plan. Ogden's Form 10-K for the
fiscal year ended December 31,
1990 and incorporated herein
by reference.
(e) Ogden Services Corporation Filed as Exhibit (10)(m) to
Select Savings Plan Trust. Ogden's Form 10-K for the
fiscal year ended December 31,
1990 and incorporated herein
by reference.
(f) Ogden Services Corporation Filed as Exhibit (10)(n) to
Executive Pension Plan Trust. Ogden's Form 10-K for the
fiscal year ended December 31,
1990 and incorporated herein
by reference.
(g) Changes effected to the Ogden Filed as Exhibit (10)(o) to
Profit Sharing Plan effective Ogden's Form 10-K for the
January 1, 1990. fiscal year ended December 31,
1990 and incorporated herein
by reference.
(h) Employment Letter Agreement Filed as Exhibit (10)(p) to
between Ogden and an executive Ogden's Form 10-K for the
officer dated January 30, 1990. fiscal year ended December 31,
1990 and incorporated herein
by reference.
(i) Employment Agreement between Filed as Exhibit (10)(r) to
R. Richard Ablon and Ogden Ogden's Form 10-K for the
dated as of May 24, 1990. fiscal year ended December 31,
1990 and incorporated herein
by reference.
(i) Letter Amendment to Filed as Exhibit (10)(r)(i)
Employment Agreement to Ogden's Form 10-K for the
between Ogden Corporation fiscal year ended December 31,
and R. Richard Ablon, dated 1990 and incorporated herein
as of October 11, 1991. by reference.
(j) Employment Agreement between Filed as Exhibit (10)(s) to
Ogden and C. G. Caras dated Ogden's Form 10-K for the
as of July 2, 1990. fiscal year ended December 31,
1990 and incorporated herein
by reference.
(i) Letter Amendment to Filed as Exhibit (10)(s)(i)
Employment Agreement to Ogden's Form 10-K for the
between Ogden Corporation fiscal year ended December 31,
and C. G. Caras, dated as 1990 and incorporated herein
of October 11, 1990. by reference.
<PAGE>
EXHIBIT
NO. DESCRIPTION OF DOCUMENT FILING INFORMATION
(k) Employment Agreement between Filed as Exhibit (10)(t) to
Ogden and Philip G. Husby, Ogden's Form 10-K for the
dated as of July 2, 1990. fiscal year ended December 31,
1990 and incorporated herein
by reference.
(l) Termination Letter Agreement Filed as Exhibit (10)(v) to
between Maria P. Monet and Ogden Ogden's Form 10-K for the
dated as of October 22, 1990. fiscal year ended December 31,
1990 and incorporated herein
by reference.
(m) Letter Agreement between Ogden Filed as Exhibit 10.2 (p) to
Corporation and Ogden's Chairman Ogden's Form 10-K for fiscal
of the Board, dated as of year ended December 31, 1991
January 16, 1992. and incorporated herein by
reference.
(n) Employment Agreement between Filed as Exhibit 10.2 (q) to
Ogden Corporation and Ogden's Ogden's Form 10-K for fiscal
Chief Accounting Officer dated year ended December 31, 1991
as of December 18, 1991. and incorporated herein by
reference.
(o) Employment Agreement between Transmitted herewith as
Scott G. Mackin and Ogden Exhibit 10.8(o).
Projects, Inc. dated as of
January 1, 1994.
(p) Ogden Corporation Profit Sharing Filed as Exhibit 10.8(p) to
Plan. Ogden's Form 10-K for fiscal
year ended December 31, 1992
and incorporated herein by
reference.
(i) Ogden Profit Sharing Plan Transmitted herewith as
as amended and restated Exhibit 10.8(p)(i).
January 1, 1991 and as in
effect through January 1,
1993.
(q) Ogden Corporation Core Executive Filed as Exhibit 10.8(q) to
Benefit Program. Ogden's Form 10-K for fiscal
year ended December 31, 1992
and incorporated herein by
reference.
(r) Ogden Projects Pension Plan. Filed as Exhibit 10.8(r) to
Ogden's Form 10-K for fiscal
year ended December 31, 1992
and incorporated herein by
reference.
<PAGE>
EXHIBIT
NO. DESCRIPTION OF DOCUMENT FILING INFORMATION
(s) Ogden Projects Profit Sharing Filed as Exhibit 10.8(s) to
Plan. Ogden's Form 10-K for fiscal
year ended December 31, 1992
and incorporated herein by
reference.
(t) Ogden Projects Supplemental Filed as Exhibit 10.8(t) to
Pension and Profit Sharing Plans. Ogden's Form 10-K for fiscal
year ended December 31, 1992
and incorporated herein by
reference.
(u) Ogden Projects Employee's Stock Filed as Exhibit 10.8(u) to
Option Plan. Ogden's Form 10-K for fiscal
year ended December 31, 1992
and incorporated herein by
reference.
(v) Ogden Projects Core Executive Filed as Exhibit 10.8(v) to
Benefit Program. Ogden's Form 10-K for fiscal
year ended December 31, 1992
and incorporated herein by
reference.
(w) Form of amendments to the Ogden Transmitted herewith as
Projects, Inc. Pension Plan and Exhibit 10.8(w).
Profit Sharing Plans effective as
of January 1, 1994.
10.9 Agreement and Plan of Merger Filed as Exhibit (10)(x) to
among Ogden Corporation, ERC Ogden's Form 10-K for the
International Inc., ERC fiscal year ended December 31,
Acquisition Corporation and 1990 and incorporated herein
ERC Environmental and Energy by reference.
Services Co., Inc. dated as of
January 17, 1991.
10.10 First Amended and Restated Filed as Exhibit 10.3 (b) (i)
Ogden Corporation Guaranty to Ogden's Form 10-K for
Agreement made as of January 30, fiscal year ended December 31,
1992 by Ogden Corporation for 1991 and incorporated herein
the benefit of Mission Funding by reference.
Zeta and Pitney Bowes Credit
Corporation.
<PAGE>
EXHIBIT
NO. DESCRIPTION OF DOCUMENT FILING INFORMATION
10.11 Ogden Corporation Guaranty Filed as Exhibit 10.3 (b) (iii)
Agreement made as of January to Ogden's Form 10-K for
30, 1992 by Ogden Corporation fiscal year ended December 31,
for the benefit of Allstate 1991 and incorporated herein
Insurance Company and Ogden by reference.
Martin Systems of Huntington
Resource Recovery Nine Corp.
11 Ogden Corporation and Transmitted herewith as
Subsidiaries Detail of Exhibit 11.
Computation of Earnings
Applicable to Common Stock
for the years ended December
31, 1993, 1992 and 1991.
13 Those portions of the Annual Transmitted herewith as
Report to Stockholders for the Exhibit 13.
year ended December 31, 1993,
which are incorporated herein
by reference.
21 Subsidiaries of Ogden. Transmitted herewith as
Exhibit 21.
24 Consent of Deloitt & Touche. Transmitted herewith as
Exhibit 24.
EXHIBIT 3.2
BY-LAWS
OF
OGDEN CORPORATION
(As amended through March 17, 1994)
Section 1. In addition to its principal office in the State of
Delaware, Ogden Corporation (the "Corporation") may also have offices at such
other places within or without the State of Delaware as the Board of
Directors shall from time to time determine.
Section 2. Meetings of the stockholders and meetings of the Board of
Directors may be held at any place or places within or without the State of
Delaware.
Section 3. The Annual Meeting of Stockholders shall be held on such
date and at such time and place as may be fixed by the Board and stated in
the notice of the meeting, for the purpose of electing directors and for the
transaction of any such other business as is properly brought before the
meeting in accordance with these By-laws. To be properly brought before an
Annual Meeting occurring subsequent to the Annual Meeting held in 1988,
business must be either (i) specified in the notice of Annual Meeting (or any
supplement thereto) given by or at the direction of the Board, (ii) otherwise
properly brought before the Annual Meeting by or at the direction of the
Board, or (iii) otherwise properly brought before the Annual Meeting by a
stockholder. In addition to any other applicable requirements, for business
to be properly brought before an Annual Meeting by a stockholder, the
stockholder must have given timely notice thereof in writing to the Secretary
of the Corporation. To be timely, a stockholder's notice must be delivered
to or mailed and received at the principal executive offices of the
Corporation, not less than 50 days nor more than 75 days prior to the
meeting; provided, however, that in the event that less than 65 days' notice
or prior public disclosure of the date of the Annual Meeting is given or made
to stockholders, notice by the stockholder to be timely must be so received
not later than the stockholder to be timely must be so received not later
than the close of business on the fifteenth day following the day on which
such notice of the date of the Annual Meeting was mailed or such public
disclosure was made, whichever first occurs. A stockholder's notice to the
Secretary shall set forth as to each matter the stockholder proposes to bring
before the Annual Meeting (i) a brief description of the business desired to
be brought before the Annual Meeting and the reasons for conducting such
business at the Annual Meeting, (ii) the name and record address of the
stockholder proposing such business, (iii) the class, series and number of
shares of the Corporation's stock which are beneficially owned by the
stockholder, and (iv) any material interest of the stockholder in such
business. Notwithstanding anything in the By-laws to the contrary, no
business shall be conducted at the Annual Meeting except in accordance with
the procedures set forth in this Section 3, provided, however, that nothing
in this Section 3 shall be deemed to preclude discussion by any stockholder
of any business properly brought before the Annual Meeting. The Chairman of
an Annual Meeting shall, if the facts warrant, determine and declare to the
Annual Meeting that business was not properly brought before the Annual
Meeting in accordance with the provisions of this Section 3, and if he should
so determine, he shall so declare to the Annual Meeting and any such business
not properly brought before the meeting shall not be transacted. Written
notice of the Annual Meeting stating the place, date and hour of the meeting
and the purpose or purposes for which the meeting is called shall be given to
each stockholder entitled to vote at such meeting not less than ten nor more
than sixty days before the date of the meeting.
Section 4. (Deleted. Related to voting rights of a class of Preferred
Stock no longer authorized or issued).
Section 5. Unless otherwise prescribed by law or by the Certificate of
Incorporation, special meetings of the stockholders, for any purpose or
purposes, may be held upon call of the Chairman of the Board of Directors,
the Vice Chairman of the Board of Directors or a majority of the Board of
Directors. Special meetings of stockholders may not be called by any other
person or persons. Written notice of a special meeting stating the place,
date and hour of the meeting and the purpose or purposes for which the
meeting is called shall be given to each stockholder entitled to vote at such
meeting not less than ten nor more than sixty days before the date of the
meeting.
Section 6. Only persons who are nominated in accordance with the
following procedures shall be eligible for election as directors at any
meeting of stockholders occurring subsequent to the Annual Meeting of
Stockholders held in 1988. Nominations of persons for election to Board of
Directors of the Corporation at the Annual Meeting may be made at such
meeting by or at the direction of the Board of Directors, by any committee or
persons appointed by the Board or by any stockholder of the Corporation
entitled to vote for the election of directors at the meeting who complies
with the notice procedures set forth in this Section 6. Such nominations,
other than those made by or at the direction of the Board, shall be made
pursuant to timely notice in writing to the Secretary of the Corporation. To
be timely, a stockholder's notice must be delivered to or mailed and received
at the principal executive offices of the Corporation not less than 50 days
or more than 75 days prior to the meeting; provided, however, that in the
event that less than 65 days' notice or prior public disclosure of the date
of the meeting is given or made to stockholders, notice by the stockholder to
be timely must be so received not later than the close of business on the
fifteenth day following the day on which such notice of the date of the
meeting was mailed or such public disclosure was made, whichever first
occurs. Such stockholder's notice to the Secretary shall set forth (i) as to
each person whom the stockholder proposes to nominate for election or
reelection as a director, (a) the name, age, business address and residence
address of the person, (b) the principal occupation or employment of the
person, (c) the class, series and number of shares of capital stock of the
Corporation which are beneficially owned by the person, and (d) any other
information relating to the person that is required to be disclosed in
solicitations of proxies for election of directors pursuant to the Rules and
Regulations of the Securities and Exchange Commission under Section 14 of the
Securities Exchange Act of 1934, as amended; and (ii) as to the stockholder
giving the notice (a) the name and record address of the stockholder and (b)
the class, series and number of shares of capital stock of the Corporation
which are beneficially owned by the stockholder. The Corporation may require
any proposed nominee to furnish his written consent to serve if elected and
such other information as may reasonably be required by the Corporation to
determine the eligibility of such proposed nominee to serve as a director of
the Corporation. No person shall be eligible for election as a director of
the Corporation unless nominated in accordance with the procedures set forth
herein. The Chairman of the meeting shall, if the facts warrant, determine
and declare to the meeting that a nomination was not made in accordance with
the foregoing procedure, and if he should so determine, he shall so declare
to the meeting and the defective nomination shall be disregarded.
<PAGE>
Section 7. The holders of a majority of the stock of the Corporation
having voting power present in person or by proxy shall constitute a quorum,
but less than a quorum shall have power to adjourn any meeting from time to
time without notice. Except as aforesaid, except as provided in the
Certificate of Incorporation, and except as otherwise provided by law, a
majority of a quorum at any meeting of stockholders shall have power to act.
Section 8. At every meeting of stockholders each stockholder entitled
to vote thereat may vote and otherwise act in person or by proxy; but no
proxy shall be voted upon more than three (3) years after its date unless
such proxy provides for a longer period.
Section 9. At least ten days before each election of directors a
complete list, arranged in alphabetical order, of the stockholders entitled
to vote at the election shall be prepared and filed in the office where the
election is to be held and shall, during the usual hours of business, for
said ten days, and during the election, be open to the examination of any
stockholder.
Section 10. The Board of Directors may, before any meeting of
stockholders for the election of directors, appoint two inspectors of
election to serve at such election. If they fail to make such an appointment
or if their appointees, or either of them, fail to appear at such meeting,
the Chairman of the meeting may appoint inspectors or any inspector of
election to act at that election.
Section 11. Certificates of stock shall be of such form and device as
the Board of Directors may elect and shall be signed by the Chairman of the
Board of Directors, the President or a Vice President and the Treasurer or an
Assistant Treasurer or the Secretary or an Assistant Secretary, but where any
such certificate is signed by a transfer agent or an assistant transfer agent
or transfer clerk acting on behalf of the Corporation or by a registrar, the
signatures of any such officers of the Corporation may be facsimiles,
engraved or printed.
Section 12. The stock of the Corporation shall be transferable or
assignable only on the books of the Corporation by the holders in person, or
by attorney, on the surrender of the certificates therefor. The Board of
Directors may appoint one or more transfer agents and registrars of the
stock.
Section 13. The Board of Directors shall have the power to close the
stock transfer books of the Corporation for a period not exceeding fifty (50)
days preceding the date of any meeting of stockholders, or the date for
payment of any dividend, or the date for the allotment of rights, or the date
when any change or conversion or exchange of capital stock shall go into
effect or for a period of not exceeding fifty days in connection with
obtaining the consents of stockholders for any purpose. In lieu of closing
the stock transfer books as aforesaid, the Board of Directors is hereby
authorized to fix in advance a date, not exceeding fifty (50) days preceding
the date of any meeting of stockholders or the date for the payment of any
dividend or the date for the allotment of rights, or the date when any change
or conversion or exchange of capital stock shall go into effect, or a date in
connection with obtaining such consent, as a record date for the
determination of the stockholders entitled to notice of and to vote at, any
such meeting and adjournment thereof, or entitled to receive payment of any
such dividend, or to any such allotment of rights, or to exercise the rights
in respect of any such change, conversion or exchange of capital stock, or to
give such consent, and in such case such stockholders and only such
stockholders as shall be stockholders of record on the date so fixed shall be
entitled to such notice of, and to vote at, such meeting and any adjournment
thereof or to receive payment of such dividend, or to receive such allotment
of rights, or to exercise such rights, or to give such consent, as the case
may be, notwithstanding any transfer of any stock on the books of the
Corporation after any such record date.
Section 14. The number of directors of the Corporation shall be
fourteen (14).
Section 15. Meetings of the Board of Directors shall be held at times
fixed by resolutions of the Board or upon call of the Chairman of the Board,
the President, the Executive Vice President or any two directors and may be
held outside of the State of Delaware. The Secretary or officer performing
his duties shall give reasonable notice (which shall not be less than two (2)
days) of all meetings of directors, provided that a meeting may be held
without notice immediately after the annual election, and notice need not be
given of regular meetings held at times fixed by resolution of the Board.
Meetings may be held at any time without notice if all the directors are
present or if those not present waive notice either before or after the
meeting. Notice by mail or telegraph to the usual business or residence
address of the directors not less than the time above specified before the
meeting shall be sufficient. One-third of the directors shall constitute a
quorum.
Section 16. The Board of Directors shall have power to authorize the
payment of compensation to the directors for services to the Corporation,
including fees for attendance at meetings of the Board of Directors, of the
Executive Committee and of other committees and to determine the amount of
such compensation and fees.
Section 16-A. (a) The Corporation shall indemnify any person who was
or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of
the Corporation) by reason of the fact that he is or was a director, officer,
employee or agent of the Corporation, or is or was serving at the request of
the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the Corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
(b) The Corporation shall indemnify any person who was
or is a party or is threatened to be made a party to any threatened, pending
or completed action or suit by or in the right of the Corporation to procure
a judgment in its favor by reason of the fact that he is or was a director,
officer, employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorneys' fees) actually and reasonably incurred
by him in connection with the defense or settlement of such action or suit if
he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the Corporation
unless and only to the extent that the Court of Chancery of the State of
Delaware or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the Court of
Chancery of the State of Delaware or such other court shall deem proper.
(c) To the extent that a director, officer, employee or
agent of a corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in subsections (a) and
(b), or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.
(d) Any indemnification under subsections (a) and (b)
(unless ordered by a court) shall be made by the Corporation only as
authorized in the specific case upon a determination that indemnification of
the director, officer, employee or agent is proper in the circumstances
because he has met the applicable standard of conduct set forth in
subsections (a) and (b). Such determination shall be made (1) by the Board
of Directors by a majority vote of a quorum consisting of directors who were
not parties to such action, suit or proceeding, or (2) if such a quorum is
not obtainable, or, even if obtainable a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion, or (3) by the
stockholders.
(e) Expenses incurred in defending a civil or criminal
action, suit or proceeding shall be paid by the Corporation in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of the director, officer, employee or agent to
repay such amount if it shall ultimately be determined that he is not
entitled to be indemnified by the Corporation as authorized in these By-laws.
(f) The indemnification and advancement of expenses
provided by this Section 16-A of the By-laws shall not be deemed exclusive of
any other rights to which those seeking indemnification or advancement of
expenses may be entitled under any other by-law, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in
his official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person.
(g) The Corporation shall have power to purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee or agent of the Corporation, or is or was serving at the request of
the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
any liability asserted against him and incurred by him in any such capacity,
or arising out of his status as such whether or not the Corporation would
have the power to indemnify him against such liability under the provisions
of these By-laws.
(h) Any amendment to this Section 16-A shall not apply
to any liability of a director, officer, employee or agent arising out of a
transaction or omission occurring prior to the adoption of such amendment,
but any such liability based on a transaction or omission occurring prior to
the adoption of such amendment shall be governed by Section 16-A of the By-
laws, as in effect at the time of such transaction or omission.
Section 17. The Board of Directors, as soon as may be practicable after
the election of directors in each year, shall: (i) appoint one of their
number as Chairman of the Board, (ii) appoint one or more of their number as
President, each of whom shall also act as the President of one of the
Corporation's operating areas, and (iii) appoint one or more Vice Presidents
and a Secretary and may appoint from time to time such other officers,
including a Treasurer, as they may deem proper. The Chairman of the Board
shall be the presiding officer of the Corporation and shall preside at
meetings of the Board of Directors and of the shareholders. He shall have
such other powers and duties as may from time to time be conferred upon him
by the Board of Directors.
Section 18. The Chairman of the Board shall preside at all meetings of
the Boar and of the Stockholders and shall have such powers and duties as the
Board may assign to him. The President shall be the Chief Executive Officer
of the Corporation and, in the absence of the Chairman of the Board, shall
preside at all meetings of the Board and stockholders. The President shall
be the officer of the Corporation who has general and active responsibility
for the management of the business of the Corporation, and shall be
responsible for implementing all orders and resolutions of the Board of
Directors. The President shall have such other powers and duties as
presidents of corporations usually have or as the Board assigns to him. The
other officers of the Corporation shall have such powers and duties as
usually pertain to their offices, except as modified by the Board of
Directors, and shall also have such powers and duties as may from time to
time be conferred upon them by the Board of Directors.
Section 19. The term of office of all officers shall be until the next
election of directors and until their respective successors are chosen and
qualified, or until they shall die or resign, but any officer may be removed
from office, without cause, at any time by the Board of Directors. Vacancies
in any office may be filled by the Board at any meeting.
Section 20. The Board of Directors may establish an Executive
Committee, a Finance Committee and such other committees of the Board as it
may determine, and delegate to said committees such powers and duties as it
may determine by resolution of the Board to the extent provided in the
General Corporation Law of the State of Delaware.
Section 21. The Board of Directors may select such depositaries as they
shall deem proper for the funds of the Corporation. All checks and drafts
against such deposited funds shall be signed and countersigned by persons to
be specified by the Board of Directors.
Section 22. The corporate seal of the Corporation shall be in such form
as the Board of Directors shall prescribe.
Section 23. Either the Board of Directors or the stockholders may alter
or amend these By-laws at any meeting duly held as above provided, the notice
of which includes notice of the proposed alteration or amendment.
EXHIBIT 10.2
=============================================================
=============================================================
CREDIT AGREEMENT
by and among
OGDEN CORPORATION,
THE SIGNATORY LENDERS HERETO,
and
THE BANK OF NEW YORK,
AS AGENT
________________
$175,000,000
________________
Dated as of September 20, 1993
===============================================================
===============================================================
<PAGE>
CREDIT AGREEMENT, dated as of September 20, 1993, among OGDEN
CORPORATION, a Delaware corporation (the "Company"), the signatory
LENDERS parties hereto or who become parties hereto pursuant to
paragraph 11.7 (each a "Lender" and, collectively, the "Lenders"),
and THE BANK OF NEW YORK, as agent for the Lenders (in such capacity,
the "Agent").
1. DEFINITIONS
1 Defined Terms.
As used in this Agreement, terms defined in the preamble
have the meanings therein indicated, and the following terms have the
following meanings:
"Accountants": Deloitte & Touche, or any successor thereto, or
such other firm of certified public accountants of recognized
national standing selected by the Company and satisfactory to the
Required Lenders.
"Acquisition": any transaction consummated after the date of
this Agreement by which the Company or any Subsidiary (i) acquires
any going business or all or substantially all of the assets of any
Person (or any division thereof), whether through purchase of assets,
merger, consolidation or otherwise, or (ii) acquires (in one
transaction or as the most recent transaction in a series of
transactions) at least a majority of the securities or equity
interests of a Person having ordinary voting power for the election
of directors or comparable officials.
"Affected Loan": as defined in paragraph 2.9.
"Affected Principal Amount": in the event that (i) the Company
shall not for any reason borrow after it shall have notified the
Agent of its intent to do so and shall have requested a Eurodollar or
CD Loan pursuant to paragraph 2.2 or shall have accepted one or more
offers of Competitive Bid Loans under paragraph 2.3, an amount equal
to the principal amount of such requested Eurodollar or CD Loan or
such Competitive Bid Loan; (ii) a Eurodollar or CD Loan or any Com-
petitive Bid Loan shall terminate for any reason prior to the last
day of the Interest Period applicable thereto, an amount equal to the
principal amount of such Eurodollar or CD Loan or such Competitive
Bid Loan; or (iii) the Company shall prepay or repay all or any part
of the principal balance of a Eurodollar or CD Loan or any
Competitive Bid Loan prior to the last day of the Interest Period
applicable thereto, an amount equal to the principal balance of such
Eurodollar or CD Loan or such Competitive Bid Loan so prepaid or
repaid.
<PAGE>
"Affiliate": as to any Person, any other Person which, directly
or indirectly, is in control of, is controlled by, or is under common
control with, such Person. For purposes of this definition, control
of a Person shall mean the power, direct or indirect, (i) to vote 25%
or more of the securities having ordinary voting power for the
election of directors of such Person or (ii) to direct or cause
direction of the management and policies of such Person whether by
contract or otherwise.
"Agency Agreement": the Fiscal Agency Agreement, dated as of
June 1, 1987, between the Company and Bankers Trust Company, pursuant
to which the Company issued $85,000,000 of its 6% Convertible
Subordinated Debentures due 2002 or the Fiscal Agency Agreement,
dated as of October 15, 1987, between the Company and Bankers Trust
company, pursuant to which the Company issued $75,000,000 of its
5-3/4% Convertible subordinated Debentures Due 2002.
"Aggregate Commitments": the sum of the Commitments set forth in
Exhibit A, as the same may be reduced pursuant to paragraph 2.5
(Reduction of Commitments) or 2.18 (Extension of Termination Date).
"Agreement": this Credit Agreement, as the same may be amended,
supplemented or otherwise modified from time to time.
"Applicable Lending Office": as to any Lender, such Lender's
Domestic Lending Office or Eurodollar Lending Office, as the case may
be.
"Applicable Margin": at all times during the applicable periods
set forth below: (i) with respect to the unpaid principal balance of
the Eurodollar Loans, the applicable percentage set forth below next
to the words "Eurodollar Rate", and (ii) with respect to the unpaid
principal balance of the CD Loans, the applicable percentage set
forth below next to the words "CD Rate":
<TABLE>
<CAPTION>
Applicable
Period Rate Margin
<S> <C> <C>
I. At any time when Eurodollar Rate .250%
the Senior Public Debt CD Rate .375%
Rating is equal to or
more favorable than both
A3 by Moody's Investors
Service, Inc. and A-
by Standard & Poor's
Corporation.
<PAGE>
II. At any time when Eurodollar Rate .375%
the Senior Public Debt CD Rate .500%
Rating is equal to or
more favorable than both
Baa3 by Moody's Investors
Service, Inc. and BBB-
by Standard & Poor's
Corporation and Period I
is not applicable.
III. At all other Eurodollar Rate .750%
times. CD Rate .875%
</TABLE>
Changes in the Applicable Margin resulting from changes in
the Senior Public Debt Rating shall become effective as of the date
of such change in the Senior Public Debt Rating. During the 30-day
period following the date on which the Company shall no longer have
a Senior Public Debt Rating, the Company and the Banks shall
negotiate in good faith an acceptable, tiered replacement to measure
the Applicable Margin, having due regard to the Company's credit
standing and financial condition and the prevailing interest rate
environment at such time, failing which the margins set forth in III.
above shall be applicable from and after such date on which the
Company shall no longer have a Senior Public Debt Rating.
"Application for Letter of Credit": as defined in paragraph
2.20(b).
"Assessment Rate": with respect to any Interest Period
applicable to a CD Loan, the rate (expressed as a decimal, rounded
upwards, if necessary, to the next higher 1/100 of 1%), as imposed by
the Federal Deposit Insurance Corporation and reported to the Agent,
to be the then current actual assessment rate payable by BNY to the
Federal Deposit Insurance Corporation (or any successor) for
insurance by such Corporation (or such successor) of time deposits
made in Dollars at BNY's domestic offices.
"Assignment and Acceptance Agreement": as defined in paragraph
11.7(b).
"Assignment Fee": as defined in paragraph 11.7(b).
"Authorized Signatory": in respect of a Person, the president,
any vice president or any other duly authorized officer (acceptable
to the Agent) of such Person.
"BNY": The Bank of New York.
"BNY Rate": a rate of interest per annum equal to the rate of
interest publicly announced in New York City by BNY from time to
<PAGE>
time as its prime commercial lending rate, such rate to be adjusted
automatically (without notice) on the effective date of any change in
such publicly announced rate.
"Base Rate": on any date, a rate of interest per annum equal to
the higher of (i) the BNY Rate in effect on such date or (ii) 1/2 of 1%
plus the Federal Funds Rate in effect on such date.
"Base Rate Loans": R/C Loans (or any portions thereof) at such
time as they (or such portions) are made or are being maintained at
a rate of interest based upon the Base Rate.
"Borrowing Date": any date specified in a Borrowing Request
delivered pursuant to paragraphs 2.2, 2.3 or 2.20 as a date on which
the Company requests the Lenders to make Loans comprising an R/C
Borrowing or a Competitive Bid Borrowing or the L/C Issuing Bank to
issue a Letter of Credit.
"Borrowing Request": an R/C Borrowing Request, Competitive Bid
Borrowing Request or L/C Issuance Request, as the case may be.
"Business Day": for all purposes other than as set forth in
clause (ii) below, (i) any day other than a Saturday, Sunday or other
day on which commercial banks located in New York City are authorized
or required by law or other governmental action to close and (ii)
with respect to all notices and determinations in connection with,
and payments of principal and interest on, Eurodollar Loans, any day
which is a Business Day described in clause (i) above and which is
also a day on which dealings in foreign currency and exchange and
Eurodollar funding between banks may be carried on in London,
England.
"CD Loans": collectively, Loans (or any portions thereof) at
such time as they (or such portions) are made or being maintained at
a rate of interest based upon the CD Rate. Each CD Loan shall mature
on the last day of the Interest Period applicable thereto.
"CD Rate": with respect to any Interest Period applicable to any
CD Loan, the rate per annum (rounded to the nearest 1/100 of 1%, or,
if there is no nearest 1/100 of 1%, then to the next higher 1/100 of
1%) equal to the sum of (i) the Assessment Rate plus (ii) the product
of (x) the Dealer Bid Rate and (y) Statutory Reserves. The CD Rate
shall be adjusted automatically on and as of the effective date of
any change in Statutory Reserves or the Assessment Rate. Each
determination by the Agent of the CD Rate shall be conclusive in the
absence of manifest error.
"Code": the Internal Revenue Code of 1986, as the same may be
amended from time to time, or any successor thereto, and the rules
and regulations issued thereunder, as from time to time in effect.
<PAGE>
"Commitment": as to any Lender, the amount set forth next to the
name of such Lender in Exhibit A under the heading "Commitment," as
such Commitment may be reduced pursuant to paragraphs 2.5 or 11.7(b).
"Commitment Percentage": as to any Lender, the percentage that
the Commitment of such Lender bears to the Aggregate Commitments,
initially, as set forth opposite the name of such Lender in Exhibit
A under the heading "Commitment Percentage", as such percentage may
be reallocated pursuant to paragraph 2.18 (whereupon such percentage
shall become such Lender's Reallocated Commitment Percentage, as such
term is hereinafter defined) or decreased upon an assignment
permitted under paragraph 11.7(b).
"Commitment Period": the period from the Effective Date to, but
excluding, the Termination Date.
"Competitive Bid Borrowing": a borrowing of principal amounts
pursuant to paragraph 2.3 consisting of simultaneous Competitive Bid
Loans from each Lender whose offer to make a Competitive Bid Loan as
part of such borrowing has been accepted by the Company under the
auction bidding procedure set forth in paragraph 2.3.
"Competitive Bid Borrowing Request": a borrowing request in the
form of Exhibit C.
"Competitive Bid Loan": a Loan made pursuant to paragraph 2.3.
"Competitive Bid Reduction": as to any Lender on any date, an
amount equal to such Lender's Commitment Percentage of the aggregate
principal amount of all Competitive Bid Loans outstanding on such
date (after giving effect to the payment of any Competitive Bid Loans
to be paid on such date).
"Consenting Lender": as defined in paragraph 2.18.
"Consolidated": the Company and its Subsidiaries which are
consolidated for financial reporting purposes.
"Consolidating": the Company and its Subsidiaries taken
separately.
"Contingent Obligation": as applied to the Company and its
Consolidated Subsidiaries, Indebtedness of others (i) which the
Company or any Consolidated Subsidiary has directly or indirectly
guaranteed, indorsed (other than for deposit or collection or in the
ordinary course of business), discounted with recourse, agreed
(contingently or otherwise) to purchase or repurchase or otherwise
acquire, or (ii) with respect to which the Company or any
<PAGE>
Consolidated Subsidiary has agreed contingently to supply or advance
funds (whether by way of loan, share purchase or capital
contribution, through a commitment to pay rent or to pay for Property
or services regardless of dispossession from such Property, the
non-delivery of such Property or the non-furnishing of such services,
or otherwise), or (iii) with respect to which the Company or any
Consolidated Subsidiary has otherwise become directly or indirectly
liable, provided, however, that "Contingent Obligations" shall
exclude any Indebtedness of others with respect to which the Company
or any Consolidated Subsidiary is obligated solely upon the
occurrence of a default by any Consolidated Subsidiary of its
covenants and undertakings under any contracts or agreements (except,
however, such Indebtedness of others shall not be excluded after the
occurrence of such default to the extent that the Company or any
Material Subsidiary has directly assumed or has otherwise become
directly liable for such Indebtedness of others as a result of the
exercise of remedies in connection with such default).
"Conversion Date": with respect to R/C Loans, the date on which
a Eurodollar or CD Loan is converted to a Base Rate Loan, or the date
on which a Base Rate Loan is converted to a Eurodollar or CD Loan, or
the date on which a Eurodollar Loan is converted to a CD Loan or a
new Eurodollar Loan or the date on which a CD Loan is converted to a
Eurodollar Loan or a new CD Loan, all in accordance with paragraph
2.7.
"Current Assets": current assets of the Company and its
Subsidiaries determined on a Consolidated basis in accordance with
GAAP.
"Current Liabilities": current liabilities of the Company and
its Subsidiaries determined on a Consolidated basis in accordance
with GAAP.
"Dealer Bid Rate": with respect to any Interest Period
applicable to any CD Loan, the arithmetic average of the bid rates as
determined by each Reference Lender and reported to the Agent
(rounded to the nearest 1/100 of 1% or, if there is no nearest 1/100
of 1%, then to the next higher 1/100 of 1%) of the prevailing rates
per annum bid at approximately 10:00 a.m. (New York City time) to
such Reference Lender on the date upon which a CD Interest Period is
to commence by two New York City negotiable certificate of deposit
dealers of recognized standing selected by such Reference Lender for
the purchase, at par, of negotiable certificates of deposit of such
Reference Lender in an amount equal approximately to such Reference
Lender's CD Loan to which such Interest Period shall apply and having
a maturity comparable to such Interest Period. If any Reference
Lender does not provide its average bid rate to the Agent, the Dealer
Bid Rate shall be determined on the basis of the bid rate(s) reported
by the other Reference Lender(s).
<PAGE>
"Default": any of the events specified in paragraph 9.1, whether
any requirement for the giving of notice, the lapse of time, or both,
has been satisfied.
"Dollars" and "$": lawful currency of the United States of
America.
"Domestic Lending Office": in respect of any Lender, initially,
the office of such Lender designated as such on Schedule 1.1;
thereafter, such other office or offices of such Lender, if any,
which shall be making or maintaining Base Rate Loans or CD Loans, as
reported by such Lender to the Agent.
"Effective Date": the date on which executed counterparts of
this Agreement have been delivered to the Agent by the Company and
each Lender and the Existing Credit Agreement has been terminated and
all sums due thereunder paid in full.
"Eligible Assignee": an assignee which is any bank, insurance
company or financial institution organized under the laws of the
United States or any state thereof acting for its own account, which
(A) is regularly engaged in the business of making loans in
transactions similar to this Agreement, and (B) has a consolidated
net worth in excess of $200,000,000.
"Environmental Laws": any and all federal, state and local laws
relating to the environment, the use, storage, transporting,
manufacturing, handling, discharge, disposal or recycling of
hazardous substances, materials or pollutants or industrial hygiene
and including, without limitation, (i) the Comprehensive
Environmental Response, Compensation and Liability Act, as amended,
42 USCA Section 9601 et seq.; (ii) the Resource Conservation and Recovery
Act of 1976, as amended, 42 USCA Section 6901 et seq.; (iii) the Toxic
Substance Control Act, as amended, 15 USCA Section 2601 et. seq.; (iv) the
Water Pollution Control Act, as amended, 33 USCA Section 1251 et. seq.; (v)
the Clean Air Act, as amended, 42 USCA Section 7401 et seq.; (vi) the
Hazardous Material Transportation Act, as amended, 49 USCA Section 1801 et
seq. and (vii) all rules, regulations, judgments, decrees, injunc-
tions and restrictions thereunder and any analogous state law.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations issued
thereunder, as from time to time in effect.
"ERISA Affiliate": any Person which is a member of any group of
organizations (i) described in Section 414(b) or (c) of the Code of
which the Company or any Subsidiary is a member, or (ii) solely for
purposes of potential liability under Section 302(c)(11) of ERISA and
Section 412(c)(11) of the Code and the Lien created under
<PAGE>
Section 302(f) of ERISA and Section 412(n) of the Code, described in
Section 414(m) or (o) of the Code of which any Loan Party is a
member.
"Eurodollar Lending Office": in respect of any Lender, in-
itially, the office of such Lender designated as such on Schedule 1.1
(or, if no such office is specified, its Domestic Lending Office);
thereafter, such other office, if any, of such Lender which shall be
making or maintaining Eurodollar Loans, as reported by such Lender to
the Agent.
"Eurodollar Loans": collectively, Loans hereunder (or any por-
tions thereof) at such time as they (or such portions) are made or
being maintained at a rate of interest based upon the Eurodollar
Rate. Each Eurodollar Loan shall mature on the last day of the
Interest Period applicable thereto.
"Eurodollar Rate": with respect to any Interest Period
applicable to any Eurodollar Loan, the arithmetic average of the
rates of interest per annum (rounded to the nearest 1/100 of 1% or,
if there is no nearest 1/100 of 1%, then to the next higher 1/100 of
1%), as reported by each Reference Lender to the Agent, quoted by
such Reference Lender to leading banks in the interbank eurodollar
market as the rate at which such Reference Lender is offering Dollar
deposits in an amount equal approximately to the Eurodollar Loan of
such Reference Lender to which such Interest Period shall apply for
a period equal to such Interest Period, as quoted at approximately
11:00 a.m. (New York City time) two Business Days prior to the first
day of such Interest Period. If any Reference Lender does not provide
its quotation to the Agent, the Eurodollar Rate shall be determined
on the basis of the quotation(s) reported by the other Reference
Lender(s). The Company acknowledges that the Eurodollar Rate is not
adjusted for reserves with respect to Eurodollar liabilities under
Regulation D of the Board of Governors of the Federal Reserve System
and agrees to pay to each Lender any additional costs with respect
thereto to the extent set forth in paragraph 2.12(b).
"Event of Default": any of the events specified in paragraph
9.1, provided that any requirement for the giving of notice, the
lapse of time, or both, has been satisfied.
"Existing Agreement": the Credit Agreement, dated as of January
31, 1990, by and among the Company, the signatory banks thereto,
National Westminstser Bank, PLC, Swiss Bank Corporation and Union
Bank of Switzerland, as lead managers, and The Bank of New York, as
agent, as amended.
"Extension Request": as defined in paragraph 2.18.
<PAGE>
"Facility Fee": as defined in paragraph 3.2.
"Federal Funds Rate": for any day, the rate per annum equal to
the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by
federal funds brokers on such day, as published by the Federal
Reserve Bank of New York on the Business Day next succeeding such
day, provided that (i) if the day for which such rate is to be
determined is not a Business Day, the Federal Funds Rate for such day
shall be such rate on such transactions on the next preceding
Business Day as published on the next succeeding Business Day, and
(ii) if such rate is not so published for any day, the Federal Funds
Rate for such day shall be the average of the quotations for such day
on such transactions received by BNY from three Federal funds brokers
of recognized standing selected by BNY on such day on such
transactions as determined by BNY and reported to the Agent.
"Financial Statements": as defined in paragraph 4.14.
"Fixed Charge Coverage Ratio": the ratio of (i) the sum of
Operating Income, Interest Expense and Rent Expense to (ii) the sum
of Interest Expense and Rent Expense, all on a Consolidated basis.
"GAAP": generally accepted accounting principles as of the date
of any determination dependent thereupon, consistently applied.
"Governmental Body": any nation or government, any state or
other political subdivision thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government and any court or arbitrator.
"Highest Lawful Rate": the maximum rate of interest, if any,
that at any time or from time to time may be contracted for, taken,
charged or received on the Notes or which may be owing to any Lender
pursuant to this Agreement under the laws applicable to such Lender
and this transaction.
"Indebtedness": without duplication, with respect to the Company
and its Subsidiaries, all (a) obligations in respect of borrowed
money or for the deferred purchase price of Property or services
which are, in accordance with GAAP, includable as a liability on a
Consolidated balance sheet, and (b) amounts representing the
capitalization of rentals in accordance with GAAP; provided, however,
that "Indebtedness" shall exclude any Indebtedness of any Subsidiary
which, with respect to such Subsidiary, is limited in recourse to the
assets financed with the proceeds of such Indebtedness and any
Property or contract rights related to such assets or revenues
attributable thereto (except, however, such Indebtedness of a
Subsidiary shall not be excluded after the occurrence of a default by
<PAGE>
by such Subsidiary in the performance of its obligations under any contract
or agreement to the extent that the Company or any Material Subsidiary has
directly assumed or has otherwise become directly liable for such
indebtedness pursuant to performance guarantees given by the Company or
such Material Subsidiary as a result of the exercise of remedies in
connection with such default).
"Indemnified Liabilities": as defined in paragraph 11.5.
"Interest Expense": for any period, the sum of all interest
(adjusted to give effect to all interest rate swap, cap or other
interest rate hedging arrangements and fees and expenses paid in
connection with the same, all as determined in accordance with GAAP),
paid or accrued in respect of all Indebtedness for such period by the
Company and its Subsidiaries on a Consolidated basis, as determined
in accordance with GAAP.
"Interest Payment Date": (i) as to any Base Rate Loan, the last
day of each February, May, August and November commencing on the
first of such days to occur after such Base Rate Loan is made or any
Eurodollar or CD Loan is converted to a Base Rate Loan, (ii) as to
any Eurodollar Loan, the last day of the applicable Interest Period
and, if such Interest Period is longer than three months, the date
which is three months after the first day of such Interest Period,
(iii) as to any CD Loan, the last day of the applicable Interest
Period and, if such Interest Period is longer than 90 days, the date
which is 90 days after the first day of such Interest Period, and
(iv) with respect to any Competitive Bid Loan, the maturity date for
such Competitive Bid Loan established pursuant to the Competitive Bid
Borrowing Request with respect thereto delivered under paragraph 2.3,
and if the Interest Period with respect thereto exceeds 90 days, the
date which is 90 days after the first day of such Interest Period.
"Interest Period": (a) with respect to any Eurodollar or CD Loan
comprising the same R/C Borrowing requested by the Company:
(i) initially, the period commencing on the Borrowing Date
or Conversion Date with respect to such Eurodollar or CD Loan
and ending one, two, three or six months, or 30, 60, 90 or 180
days, as the case may be, thereafter, as selected by the Company
in its irrevocable notice of borrowing given pursuant to
paragraph 2.2 or its irrevocable notice of conversion as given
pursuant to paragraph 2.7; and
(ii) thereafter, each period commencing on the last day of
the immediately preceding Interest Period applicable to such
Eurodollar or CD Loan and ending one, two, three or six months,
or 30, 60, 90 or 180 days, as the case may be, thereafter, as
<PAGE>
selected by the Company in its irrevocable notice of conversion
pursuant to paragraph 2.7;
(b) with respect to any Competitive Bid Loan comprising
the same Competitive Bid Borrowing, the period commencing on the
Borrowing Date with respect to such Competitive Bid Loan and ending
on the maturity date thereof specified in the Competitive Bid
Borrowing Request with respect thereto given pursuant to paragraph
2.3;
provided, however, that all of the foregoing provisions relating to
Interest Periods are subject to the following:
(i) if any Interest Period pertaining to a Eurodollar or CD Loan
would otherwise end on a day which is not a Business Day, such
Interest Period shall be extended to the next succeeding Busi-
ness Day unless the result of such extension would be to carry
such Interest Period into another calendar month, in which event
such Interest Period shall end on the immediately preceding
Business Day;
(ii) if, with respect to any borrowing or the conversion of
any R/C Loan, the Company shall fail to give due notice as provided in
paragraph 2.2 or 2.7, as the case may be, the Company shall be deemed to
have selected the Base Rate for such R/C Loan or such R/C Loan
shall be automatically converted to a Base Rate Loan upon the
expiration of the Interest Period with respect thereto;
(iii) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corre-
sponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month;
(iv) no Interest Period selected in respect of any Loan shall end
after the Termination Date, as the same may be extended pursuant to
paragraph 2.18; and
(v) the Company shall select Interest Periods so as not to have
more than five different Interest Periods outstanding at any one time.
"Joint Venture Subsidiary": any Subsidiary of which the Company
or any Subsidiary of the Company, directly or indirectly, owns or
controls less than 80% of the outstanding Stock having ordinary
voting power to elect a majority of the board of directors or similar
managing body, irrespective of whether a class or classes shall or
might have voting power by reason of the happening of any
contingency.
<PAGE>
"L/C Issuance Request": as defined in paragraph 2.20(b).
"L/C Issuing Bank": BNY.
"Letter of Credit" and "Letters of Credit": as defined in
paragraph 2.20(a).
"Letter of Credit Commission": as defined in paragraph 2.23(b).
"Letter of Credit Exposure": at a particular date, the sum of
(i) the undrawn face amounts of the Letters of Credit at such date
and (ii) the aggregate unpaid reimbursement obligations in respect of
the Letters of Credit at such date (after giving effect to any R/C
Loans made on such date to pay any such reimbursement obligations).
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), or other
security agreement or security interest of any kind or nature
whatsoever, including, without limitation, any conditional sale or
other title retention agreement and any financing lease having
substantially the same economic effect as any of the foregoing.
"Loan": an R/C Loan or a Competitive Bid Loan, as the case may
be.
"Loan Documents": collectively, this Agreement, the Letters of
Credit, the Applications for Letters of Credit, and the Notes.
"Loans": R/C Loans and Competitive Bid Loans, collectively.
"Material Adverse Change": a material adverse change in the
operations or financial condition of the Company and its Subsidiaries
taken as a whole.
"Material Adverse Effect": a material adverse effect on the
operations or financial condition of the Company and its Subsidiaries
taken as a whole.
"Margin Stock": any "margin stock", as said term is defined in
Regulation U of the Board of Governors of the Federal Reserve System,
as the same may be amended or supplemented from time to time.
"Material Subsidiary": Projects; Ogden Services Corporation, a
Delaware corporation; Ogden Financial Services, Inc., a Delaware
corporation; any successor to any of the foregoing by merger,
consolidation, amalgamation, reorganization, recapitalization,
liquidation, or any similar transaction; and any other Subsidiary
<PAGE>
(other than a Subsidiary whose assets are financed with debt which
limited in recourse to such Subsidiary or to the assets being
financed with the proceeds of such debt and any Property or contract
rights related to such assets or revenues attributable thereto)
which, at any time during the Commitment Period, has a Shareholders'
Equity equal to or greater than $60,000,000.
"Material Subsidiary Group": at any time, one or more
Subsidiaries (other than a Subsidiary whose assets are financed with
debt which is limited in recourse to such Subsidiary or to the assets
being financed with the proceeds of such debt and any Property or
contract rights related to such assets or revenues attributable
thereto) which have singly or in the aggregate a Shareholders' Equity
equal to or greater than $60,000,000. For purposes of determining
whether one of the events described in paragraphs 9.1(g) or (h) has
occurred with respect to a Material Subsidiary Group, the
Shareholders' Equity of each Subsidiary as of the most recent fiscal
year-end of such Subsidiary with respect to which one of such events
has occurred and is continuing shall be aggregated from the Effective
Date to the Termination Date.
"Multiemployer Plan": a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Nonconsenting Lender": as defined in paragraph 2.18.
"Note and Notes": as defined in paragraph 2.4.
"Operating Income": net income before income taxes and minority
interests of the Company and its Subsidiaries from continuing
operations, determined on a Consolidated basis in accordance with
GAAP.
"Participating Lender": as defined in paragraph 2.3.
"Participation Fee": as defined in paragraph 3.1.
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA, or any Governmental Body
succeeding to the functions thereof.
"Permitted Liens":
(i) any Lien on any Property securing Indebtedness
incurred or assumed for the purpose of financing all or any part
of the acquisition cost or construction cost of such Property, to
the extent that such Lien does not extend to any other Property;
<PAGE>
(ii) Liens for taxes not yet due or which are being
contested in good faith by appropriate proceedings and with
respect to which adequate reserves or other appropriate provision
(in the opinion of an authorized financial officer of the
Company) shall have been established on the books of the Company;
(iii) statutory Liens of landlords and Liens securing
claims of contractors, subcontractors, suppliers of goods,
materials, equipment or services, or laborers or other like Liens
arising in the ordinary course of business for amounts not yet
due or which are being contested in good faith and with respect
to which adequate reserves or other appropriate provision (in the
opinion of an authorized financial officer of the Company) shall
have been established on the books of the Company;
(iv) Liens (other than any Lien imposed by ERISA)
incurred in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other types of
social security, or to secure the performance of tenders,
statutory obligations, surety bonds, appeal and release bonds,
bids, leases, government contracts, performance and return-of-
money bonds and other similar obligations (exclusive of
obligations for the payment of borrowed money);
(v) easements, rights-of-way, restrictions and other
similar charges or encumbrances not interfering with the ordinary
conduct of the business of the Company or any of its
Subsidiaries;
(vi) Liens existing on any Property prior to the ac-
quisition thereof, or prior to the acquisition of the Person
which owns such Property, by the Company or any of its Sub-
sidiaries, in each case which Lien was not created in contem-
plation of such acquisition;
(vii) Liens on any Property or contract rights related
to such Property and to revenues attributable thereto, in each
case of a Subsidiary where such Property or contract right is
financed with debt which is limited in recourse to such
Subsidiary or to the assets being financed with the proceeds of
such debt and any Property or contract rights related to such
assets or revenues attributable thereto;
(viii) Liens on assets of a Subsidiary which operates
primarily as a finance company or a leasing company, including,
but not limited to Subsidiaries in the business of investing in
securities and/or financing for third parties, incurred in the
ordinary course of such leasing or financing business;
<PAGE>
(ix) any other Liens, up to an amount not to exceed 20%
of the Company's Shareholders' Equity; and
(x) extensions, renewals or replacements of any Lien
referred to in clauses (i) through (viii) above, but only to the
extent that (a) the principal amount of the Indebtedness or
obligation secured thereby is not increased, and (b) any such
extension, renewal or replacement is limited to the Property
originally encumbered thereby.
"Permitted Subsidiary Indebtedness": all Indebtedness of
Subsidiaries which is includible as a liability on a Consolidated
Balance Sheet of the Company prepared in accordance with GAAP,
provided, however, that Permitted Subsidiary Indebtedness shall
be limited to:
(i) Indebtedness of any Subsidiary existing on the
Effective Date as set forth on Schedule 1.1p;
(ii) Indebtedness of any Subsidiary: (a) that is
incurred by a non-operating special purpose Subsidiary, (b) the
payment of which is guaranteed, directly or indirectly by the
Company, and (c) the proceeds of which are loaned by such
Subsidiary to the Company (i) on terms of subordination no less
favorable to the Lenders than the subordination provisions set
forth in Exhibit B to the Agency Agreement (to the extent that
such provisions are in favor of holders of Senior Indebtedness as
defined in the Agency Agreement) as in effect on the Effective
Date and without giving effect to any amendments thereto which
may detract or derogate from the rights of the holders of Senior
Indebtedness, or (ii) on other terms of subordination
satisfactory to the Lenders in form and substance, and which is
immediately repaid upon the repayment of such loan by the
Company;
(iii) Indebtedness of any Subsidiary that is secured by
a Permitted Lien;
(iv) Unsecured, non-revolving Indebtedness of any
Subsidiary which is created in connection with the acquisition or
construction of Property for use in the ordinary course of the
business of such Subsidiary;
(v) Indebtedness of any Person existing at the time
such Person becomes a Subsidiary;
(vi) Indebtedness of any Subsidiary arising out of a
lease, conditional sale or other, similar arrangement in respect
<PAGE>
of Property used in the ordinary course of the business of such
Subsidiary;
(vii) Any renewal, extension or refinancing of any
Indebtedness set forth in subparagraphs (i) through (vi) above,
except that, with respect to any revolving Indebtedness included
in subparagraph (v) above of a Person that becomes a Subsidiary
and is not a Joint Venture Subsidiary, such revolving Indebt-
edness shall not be maintained, renewed, extended or refinanced
beyond six months from the date of the acquisition of such
Subsidiary; and
(viii) Other Indebtedness of Subsidiaries not exceeding
an aggregate amount at any time outstanding of $25,000,000.
"Person": an individual, a partnership, a corporation, a
business trust, a joint stock company, a trust, an unincorporated
association, a joint venture, a Governmental Body or any other
entity of whatever nature.
"Plan": any pension plan which is covered by Title IV of
ERISA and which is maintained by or to which contributions are
made by the Company, a Subsidiary or an ERISA Affiliate or in
respect of which the Company, a Subsidiary or an ERISA Affiliate
has or may have any liability.
"Projects": Ogden Projects, Inc., a Delaware corporation.
"Property": all types of real, personal, tangible, intan-
gible or mixed property.
"Proposed Bid Rate": as applied to any Remaining Interest
Period with respect to a Lender's Competitive Bid Loan, the rate
per annum that such Lender in good faith would have quoted to the
Company had the Company requested that such Lender offer to make
a Competitive Bid Loan on the first day of such Remaining
Interest Period, assuming no Default or Event of Default existed
on such day and that the Company had the right to borrow
hereunder on such day; such rate to be determined by such Lender
in good faith in its sole discretion.
"R/C Borrowing": a borrowing of principal amounts pursuant
to paragraph 2.2 consisting of R/C Loans of the same Type made by
each Lender.
"R/C Borrowing Request": a borrowing request in the form of
Exhibit B.
"R/C Loan": a Loan made pursuant to paragraph 2.1.
<PAGE>
"Reallocated Commitment Percentage": as defined in paragraph
2.18.
"Reference Lenders": BNY, Chemical Bank and Union Bank of
Switzerland.
"Remaining Interest Period": (i) in the event that the
Company shall not for any reason borrow after it shall have
notified the Agent of its intent to do so and shall have re-
quested a Eurodollar or CD Loan pursuant to paragraph 2.2 or
accepted one or more offers of Competitive Bid Loans under
paragraph 2.3, a period equal to the Interest Period that the
Company elected in respect of such Eurodollar or CD Loan or
Competitive Bid Loans; (ii) in the event that a Eurodollar or CD
Loan or Competitive Bid Loan shall terminate for any reason prior
to the last day of the Interest Period applicable thereto, a
period equal to the remaining portion of such Interest Period if
such Interest Period had not been so terminated; or (iii) in the
event that the Company shall prepay or repay all or any part of
the principal amount of a Eurodollar or CD Loan or Competitive
Bid Loan prior to the last day of the Interest Period applicable
thereto, a period equal to the period from and including the date
of such prepayment or repayment to but excluding the last day of
such Interest Period.
"Rent Expense": expense of the Company and its Subsidiaries
on a Consolidated basis under leases which, pursuant to GAAP,
would be considered to be operating leases. "Rent Expense" shall
not be construed to include amounts based on or in respect of (i)
contingent factors (principally sales) in excess of minimum
rentals under leases of the Company or its Subsidiaries, (ii)
certain payments, set forth on Schedule 1.1(r), in connection
with a waste-to-energy plant located in Tulsa, Oklahoma and a
hydroelectric plant located in New Martinsville, West Virginia,
and (iii) Rent Expense of the Company which is similar in nature
to the Rent Expense described in clause (ii) above and which the
Required Lenders, at the request of the Company, have agreed to
exclude.
"Replacement Lender": as defined in paragraph 2.18.
"Reportable Event": any event described in Section 4043(b)
of ERISA, other than an event (excluding an event described in
Section 4043(b)(i) relating to tax disqualification) with respect
to which the 30-day notice requirement has been waived.
"Required Lenders": at any time when no Loans are out-
standing (whether or not Letters of Credit are then outstanding)
or there are both R/C Loans and Competitive Bid Loans
<PAGE>
outstanding, Lenders having Commitments equal to more than
66 2/3% of the Aggregate Commitments. At any time when only R/C
Loans are outstanding (whether or not Letters of Credit are then
outstanding), Lenders holding Notes having an unpaid principal
balance equal to more than 66 2/3% of the aggregate Loans out-
standing. At any time when only Competitive Bid Loans are
outstanding (whether or not Letters of Credit are then
outstanding), Lenders having Commitments equal to more than
66 2/3% of the Aggregate Commitments (whether used or unused),
except that for purposes of paragraph 9.2(a)(i) and paragraphs
9.2(a)(ii)(B) and (D), the term "Required Lenders" shall mean
Lenders holding more than 66 2/3% of the outstanding Competitive
Bid Loans if no Letters of Credit are then outstanding, but if
Letters of Credit are also then outstanding, such term shall mean
Lenders holding more than 66 2/3% of the outstanding Competitive
Bid Loans and Lenders having more than 66 2/3 of the Letter of
Credit Exposure.
"Securities Exchange Act": the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated
thereunder.
"Senior Public Debt Rating": the Company's senior public
debt rating or implied senior public debt rating by Moody's
Investors Service, Inc. and Standard & Poor's Corporation.
"Shareholders' Equity": all amounts which would, in con-
formity with GAAP, be included under shareholders' equity on a
Consolidated balance sheet.
"Single Employer Plan": any Plan which is not a Multi-
employer Plan.
"Special Counsel": Emmet, Marvin & Martin.
"Statutory Reserves": the quotient (expressed as a decimal,
rounded upwards, if necessary, to the next higher 1/100 of 1%),
obtained by dividing (i) the number one by (ii) the number one
minus the aggregate of the reserve percentages expressed as a
decimal established by the Board of Governors of the Federal
Reserve System and any other banking authority to which BNY is
subject for new non-personal negotiable time deposits in Dollars
over $100,000 with maturities approximately equal to the Interest
Period pertaining to the CD Loan in question, such reserve
percentages including, without limitation, those imposed under
Regulation D of said Board of Governors.
"Stock": any and all shares, interests, participations,
warrants or other equivalents (however designated) of corporate
stock.
<PAGE>
"Subordinated Indebtedness": at any time, the following
Indebtedness:
(a) the then outstanding principal amount of In-
debtedness of the Company evidenced by (i) the 6% Convertible
Subordinated Debentures Due 2002, and (ii) the 5 3/4% Convertible
Subordinated Debentures Due 2002; and
(b) the principal amount of additional Indebtedness
then outstanding incurred after March 31,1993 for which the
Company is directly or primarily obligated and the payment of
which is, by the terms thereof, subordinated to the obligations
of the Company under the Notes (i) by subordination provisions no
less favorable to the Lenders than the subordination provisions
set forth in Exhibit B to the Agency Agreement (to the extent
that such provisions are in favor of holders of Senior
Indebtedness as defined in the Agency Agreement) as in effect on
the Effective Date and without giving effect to any amendments
thereto which may detract or derogate from the rights of the
holders of Senior Indebtedness, or (ii) by other subordination
provisions satisfactory to the Lenders in form and substance.
"Subsidiary": any corporation, association, partnership,
joint venture or other business entity of which the Company or
any Subsidiary of the Company, directly or indirectly, owns or
controls more than 50% of the outstanding Stock having ordinary
voting power to elect a majority of the board of directors or
similar managing body, irrespective of whether a class or classes
shall or might have voting power by reason of the happening of
any contingency.
"Substitute Lender": as defined in paragraph 2.19.
"Taxes": any present or future income, stamp or other taxes,
levies, imposts, duties, fees, assessments, deductions,
withholdings, or other charges of whatever nature, now or
hereafter imposed, levied, collected, withheld, or assessed by
any Governmental Body.
"Termination Date": the third anniversary of the Effective
Date or any date subsequent thereto resulting from an extension
of the Termination Date pursuant to paragraph 2.18.
"Transaction Record": as defined in paragraph 2.17.
"Type": R/C Loans made hereunder as Base Rate Loans, Eu-
rodollar Loans or CD Loans, as the case may be.
<PAGE>
2 Other Definitional Provisions.
(a) All terms defined in this Agreement shall have the
meanings given such terms herein when used in the Loan Documents
or any certificate or other document made or delivered pursuant
thereto, unless otherwise defined therein.
(b) As used in the Loan Documents and in any cer-
tificate or other document made or delivered pursuant thereto,
accounting terms relating to the Company not defined in paragraph
1.1, and accounting terms partly defined in paragraph 1.1, to the
extent not defined, shall have the respective meanings given to
them under GAAP.
(c) The words "hereof", "herein", "hereto" and "here-
under" and similar words when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision
of this Agreement, and paragraph, schedule and exhibit references
contained herein shall refer to paragraphs hereof or schedules or
exhibits hereto unless otherwise expressly provided herein.
(d) The word "or" shall not be exclusive; "may not" is
prohibitive and not permissive; and the singular includes the
plural.
2. AMOUNT AND TERMS OF LOANS
1 R/C Loans.
Subject to the terms and conditions of this Agreement,
each Lender severally agrees to make R/C Loans to the Company
from time to time during the Commitment Period in an aggregate
principal amount at any one time outstanding not to exceed such
Lender's Commitment, provided that the aggregate unpaid principal
balance of all R/C Loans and Competitive Bid Loans at any one
time outstanding, plus the Letter of Credit Exposure at such
time, shall not exceed the Aggregate Commitments. During such
period, the Company may borrow, prepay in whole or in part and
reborrow under the Commitments, all in accordance with the terms
and conditions hereof. Subject to the provisions of paragraphs
2.3 and 2.7, R/C Loans may be (a) Base Rate Loans, (b) Eurodollar
Loans, (c) CD Loans, or any combination thereof.
2 Procedure for R/C Borrowings.
(a) The Company may borrow R/C Loans on any Business
Day occurring on or after the Effective Date and ending on the
Termination Date, by giving the Agent an irrevocable telephonic
<PAGE>
or telecopy (to be promptly confirmed in writing) or written
notice of borrowing (each an "R/C Borrowing Request") no later
than 11:00 A.M., New York City time, three Business Days prior to
each requested Borrowing Date, in the case of Eurodollar and CD
Loans, and no later than 11:00 A.M., New York City time, two
Business days prior to the requested Borrowing Date, in the case
of Base Rate Loans, specifying (i) the aggregate amount to be
borrowed under the Aggregate Commitments, (ii) the requested Bor-
rowing Date, (iii) whether the borrowing is to be of Eurodollar
Loans, CD Loans, Base Rate Loans, or a combination thereof, and
(iv) if the borrowing is to be of Eurodollar or CD Loans, the
length of the initial Interest Period for such Loans. Each R/C
Borrowing shall be in an aggregate principal amount equal to
$5,000,000 or such amount plus a whole multiple of $1,000,000.
Each borrowing of Base Rate Loans comprising all or a portion of
an R/C Borrowing shall be in an aggregate principal amount equal
to $1,000,000 or such amount plus an integral multiple thereof
or, if less, the unused amount of the Aggregate Commitments. Each
borrowing of Eurodollar or CD Loans comprising all or a portion
of an R/C Borrowing shall be in an aggregate principal amount
equal to $5,000,000 or such amount plus a whole multiple of
$1,000,000. Upon receipt of each notice of borrowing from the
Company, the Agent shall promptly notify each Lender thereof.
Subject to its receipt of the notice referred to in the preceding
sentence, each Lender will make the amount of its Commitment Per-
centage of each R/C Borrowing available to the Agent for the
account of the Company at the office of the Agent set forth in
paragraph 11.2 not later than 12:00 Noon, New York City time, on
the R/C Borrowing Date requested by the Company, in funds im-
mediately available to the Agent at such office. The amounts so
made available to the Agent on a Borrowing Date will then,
subject to the satisfaction of the terms and conditions of this
Agreement as determined by the Agent, be made available on such
date to the Company by the Agent at the office of the Agent
specified in paragraph 11.2 by crediting the account of the
Company on the books of such office with the aggregate of said
amounts in like funds as received by the Agent. In the event of
any inconsistency between the provisions of this paragraph 2.2(a)
and paragraphs 2.20, 2.21 and 2.22 with respect to R/C Loans made
pursuant to paragraph 2.21 to reimburse the L/C Issuing Bank for
amounts paid by the L/C Issuing Bank under Letters of Credit, the
provisions of paragraphs 2.20, 2.21 and 2.22 shall control.
(b) Unless the Agent shall have received prior notice
from a Lender (by telephone or otherwise, such notice to be
confirmed by telecopy or other writing) that such Lender will not
make available to the Agent such Lenders' pro rata share of the
R/C Loans requested by the Company, the Agent may assume that
such Lender has made such share available to the Agent on
<PAGE>
such Borrowing Date in accordance with this paragraph, provided
that such Lender received notice of the proposed R/C Borrowing
from the Agent, and the Agent may, in reliance upon such assump-
tion, make available to the Company on such Borrowing Date a
corresponding amount. If and to the extent such Lender shall not
have so made such pro rata share available to the Agent, such
Lender and the Company severally agree to pay without duplication
to the Agent forthwith on demand such corresponding amount (to
the extent not previously paid by the other), together with
interest thereon for each day from the date such amount is made
available to the Company until the date such amount is paid to
the Agent, at a rate per annum equal to, in the case of the
Company, the applicable interest rate set forth in paragraph 2.8,
and, in the case of such Lender, the Federal Funds Rate in effect
on each such day (as determined by the Agent). Such payment by
the Company, however, shall be without prejudice to its rights
against such Lender. If such Lender shall pay to the Agent such
corresponding amount, such amount so paid shall constitute such
Lender's R/C Loan as part of such R/C Loans for purposes of this
Agreement, which R/C Loan shall be deemed to have been made by
such Lender on the Borrowing Date applicable to such R/C Loans.
3 Competitive Bid Loans and Procedure for Competitive Bid
Borrowings.
(a) Subject to the terms and conditions of this
Agreement, each Lender severally agrees that the Company may
effect Competitive Bid Borrowings under this paragraph 2.3 from
time to time on any Business Day during the period from the
Effective Date until the date occurring 30 days prior to the
Termination Date in the manner set forth below, provided,
however, that at no time shall the outstanding principal balance
of Competitive Bid Loans outstanding hereunder exceed the
Aggregate Commitments less the sum of (i) the outstanding
principal balance of all R/C Loans, if any, then outstanding and
(ii) the Letter of Credit Exposure at such time.
(i) The Company may request a Competitive Bid Borrowing
under this paragraph 2.3 by giving to the Agent, not later
than 10:00 A.M. (New York City time) at least four Business
Days prior to the date of the proposed Competitive Bid
Borrowing, a notice (each, a "Competitive Bid Borrowing
Request"), specifying the proposed date and aggregate amount
(which shall not be less than $5,000,000 or such amount plus
a whole multiple $1,000,000, or, if less, the unused amount
of the Aggregate Commitments) of the proposed Competitive
Bid Borrowing, the proposed Interest Period for each
Competitive Bid Loan to be made as part of such Competitive
Bid Borrowing (which Interest Period shall not be later than
<PAGE>
the Termination Date and shall otherwise comply with the ap-
plicable provisions of the definition of "Interest Period"),
the Interest Payment Date or Dates relating thereto, and
such other terms to be applicable to such Competitive Bid
Borrowing as the Company may specify. The Agent shall
promptly notify (by telex or telecopy) each Lender of each
Competitive Bid Borrowing Request received by it and the
terms contained in such Request.
(ii) Each Lender shall, if, in its sole discretion,
it elects so to do, irrevocably offer to make one or more
Competitive Bid Loans to the Company as part of such
proposed Competitive Bid Borrowing at a rate or rates of
interest specified by such Lender in its sole discretion, by
notifying (by telephone or telecopy (in the case of
telephone, immediately confirmed by telecopy)) the Agent,
before 10:00 A.M. (New York City time) three Business Days
before the Borrowing Date of such proposed Competitive Bid
Borrowing of the minimum amount and maximum amount of each
Competitive Bid Loan which such Lender would be willing to
make as part of such proposed Competitive Bid Borrowing
(which amounts may, subject to the proviso to the first
sentence of this paragraph 2.3, exceed such Lender's Com-
mitment), the rate or rates of interest therefor and such
Lender's Applicable Lending Office with respect to such
Competitive Bid Loan. The Agent shall notify the Company of
all such offers before 10:30 A.M. three Business Days before
such proposed Borrowing Date, provided that if BNY in its
capacity as a Lender shall in its sole discretion elect to
make any such offer, it shall notify the Company of such
offer before 9:30 A.M. (New York City time) three Business
Days before such proposed Borrowing Date. If any Lender
other than BNY shall fail to notify the Agent before 10:00
A.M., and if BNY in its capacity as a Lender shall fail to
notify the Company before 9:30 A.M. (New York City time),
three Business Days before the proposed Borrowing Date, that
it elects to make such an offer, such Lender shall be deemed
to have elected not to make such an offer and such Lender
shall not be obligated to, and shall not, make any
Competitive Bid Loan as part of such Competitive Bid Borrow-
ing. Any offer submitted after the time required above shall
be disregarded by the Agent unless such offer is submitted
to correct a manifest error in a prior offer.
(iii) The Company shall, before 12:00 noon (New York
City time) three Business Days before the date of such
proposed Competitive Bid Borrowing, either
<PAGE>
(A) cancel such Competitive Bid Borrowing
Request by notice to the Agent to that effect, or
(B) in its sole discretion, irrevocably accept
one or more of the offers made by any Lender or Lenders
pursuant to (ii) above, in ascending order of the rates
offered therefor, by giving notice to the Agent of the
amount of each Competitive Bid Loan (which amount shall
be equal to or greater than the minimum amount, and
equal to or less than the maximum amount, notified to
the Company by the Agent on behalf of such Lender for
such Competitive Bid Loan pursuant to (ii) above) to be
made by each Lender as part of such Competitive Bid
Borrowing, and reject any remaining offers made by
Lenders pursuant to (ii) above, by giving the Agent
notice to that effect, provided, however, that the
aggregate amount of such offers accepted by the Company
shall be equal at least to $5,000,000. If offers for
Competitive Bid Loans at the same interest rate are
made by two or more Lenders for a greater aggregate
minimum principal amount than the amount in respect of
which offers for Competitive Bid Loans are accepted by
the Company at such interest rate, the principal amount
of Competitive Bid Loans accepted at such interest rate
shall be allocated by the Company among such Lenders as
nearly as possible in proportion to the respective
minimum principal amounts offered by such Lenders. No
such Lender shall be obligated to make such Competitive
Bid Loan in a principal amount less than the minimum
amount offered by such Lender without consenting to
such lesser amount. If any Lender declines to make a
Competitive Bid Loan at such lesser amount, the Company
shall be entitled in its sole discretion to determine
which of such offers at the same interest rate it shall
accept.
(iv) If the Company notifies the Agent that a
Competitive Bid Borrowing Request is cancelled pursuant to
(iii)(A) above, the Agent shall give prompt notice (by telex
or telecopy) thereof to the Lenders and such Competitive Bid
Borrowing shall not be made.
(v) If the Company accepts one or more of the offers
made by any Lender or Lenders pursuant to clause (iii)(B)
above, the Agent shall, as promptly as practicable on the
third Business Day before such proposed Borrowing Date,
notify (A) each Lender that has made an offer as described
in clause (ii) above, of the date and aggregate amount of
such Competitive Bid Borrowing and whether any offer or
offers made by such Lender pursuant to clause (ii) above
<PAGE>
have been accepted by the Company and (B) each Lender that
is to make a Competitive Bid Loan as part of such
Competitive Bid Borrowing (a "Participating Lender" with
respect to such Competitive Bid Borrowing), of the amount of
each Loan to be made by such Lender as part of such
Competitive Bid Borrowing, together with a specification of
the interest rate and Interest Payment Date or Dates in re-
spect of each such Competitive Bid Loan. Each such
Participating Lender shall, before 12:00 noon (New York City
time) on the date of such Competitive Bid Borrowing make
available for the account of its applicable Lending Office
to the Agent at its address specified in paragraph 11.2 such
Lender's portion of such Competitive Bid Borrowing, in funds
immediately available to the Agent at such office. Upon
satisfaction of the applicable terms and conditions of this
Agreement and after receipt by the Agent of such amount from
each such Participating Lender, the Agent will make such
amount available on such date to the Company at the office
of the Agent specified in paragraph 11.2 by crediting the
account of the Company on the books of such office with the
aggregate of such amounts, in like funds as received by the
Agent, and the Agent will notify each Lender of the amount
of such Competitive Bid Borrowing, such Lender's Competitive
Bid Reduction resulting therefrom and the date upon which
such Competitive Bid Reduction commenced and is anticipated
to terminate. After each Competitive Bid Borrowing, if
requested by any Lender, the Agent shall within a reasonable
time furnish to such Lender such information in respect of
such Competitive Bid Borrowing as such Lender shall rea-
sonably request. Unless the Agent shall have received prior
notice from a Participating Lender (by telephone or
otherwise, such notice to be promptly confirmed by telex,
telecopy or other writing) that such Participating Lender
will not make available such Participating Lender's Com-
petitive Bid Loan, the Agent may assume that such Par-
ticipating Lender has made such Participating Lender's
portion of such Competitive Bid Borrowing available to the
Agent on such Borrowing Date in accordance with this
paragraph, and the Agent may, in reliance upon such as-
sumption, make available to the Company on such Borrowing
Date a corresponding amount. If and to the extent such
Participating Lender shall not have made such portion
available to the Agent, such Participating Lender and the
Company severally agree to pay to the Agent forthwith on
demand (but without duplication) such corresponding amount
with interest thereon for each day from the date such amount
is made available to the Company until the date such amount
is paid to the Agent at a rate per annum equal to, in the
case of the Company, the rate of interest for such
Competitive Bid Loan accepted by the Company in its notice
<PAGE>
to the Agent under paragraph 2.3(a)(iii)(B), and, in the
case of such Lender, the Federal Funds Rate in effect on
such day (as determined by the Agent). Such payment by the
Company, however, shall be without prejudice to its rights
against such Participating Lender. If such Participating
Lender shall pay to the Agent such corresponding amount,
such amount so paid shall constitute such Lender's
Competitive Bid Loan as a part of such Competitive Bid Loans
for purposes of this Agreement, which Competitive Bid Loan
shall be deemed to have been made by such Participating
Lender on the Borrowing Date applicable thereto, but without
prejudice to the Company's rights against such Participating
Lender.
(b) Within the limits and on the conditions set forth
in this paragraph 2.3, the Company may from time to time borrow
under this paragraph 2.3, repay pursuant to clause (c) below, and
reborrow under this paragraph 2.3.
(c) The Company shall repay to the Agent for the
account of each Participating Lender which has made a Competitive
Bid Loan on the maturity date of such Competitive Bid Loan (such
maturity date being that specified by the Company for repayment
of such Competitive Bid Loan in the related Competitive Bid
Borrowing Request delivered pursuant to (a)(i), above) the then
unpaid principal amount of such Competitive Bid Loan.
(d) The Company shall pay interest on the unpaid
principal balance of each Competitive Bid Loan from the date of
such Competitive Bid Loan to the date the principal amount of
such Competitive Bid Loan is repaid in full, at the rate of
interest for such Competitive Bid Loan specified by the Par-
ticipating Lender making such Competitive Bid Loan in its notice
with respect thereto delivered pursuant to (a)(ii) above payable
on the Interest Payment Date or Dates specified by the Company
for such Competitive Bid Loan in the related Competitive Bid
Borrowing Request delivered pursuant to (a)(i), above.
4 Notes.
The R/C Loans and Competitive Bid Loans made by each
Lender shall be evidenced by a promissory note of the Company,
substantially in the form of Exhibit E, with appropriate inser-
tions therein (each, as indorsed or modified from time to time,
including all replacements thereof and substitutions therefor, a
"Note" and, collectively with the Notes of all other Lenders, the
"Notes"), payable to the order of such Lender and representing
the obligation of the Company to pay the lesser of
<PAGE>
(a) the amount of the Aggregate Commitments or (b) such lesser
amount as shall equal the aggregate unpaid principal balance of
all Loans made by such Lender, in each case with interest thereon
as prescribed in paragraph 2.8 (it being understood that any
Lender may, but is not obligated to, make Competitive Bid Loans
in excess of its Commitment and up to the amount of the Aggregate
Commitments (less the sum of the outstanding principal balance of
the R/C Loans, if any, then outstanding and the Letter of Credit
Exposure) as provided in paragraph 2.3(a)(ii)). Each Lender is
hereby authorized to record (i) the date and amount of each R/C
Loan or Competitive Bid Loan made by such Lender, (ii) its
character (in the case of R/C Loans) as a Base Rate Loan, a
Eurodollar Loan, a CD Loan, or a combination thereof, (iii) the
Interest Period and interest rate applicable to Eurodollar and CD
Loans, and (iv) the date and amount of each conversion of, and
each payment or prepayment of principal of, any R/C Loans or
Competitive Bid Loans, on the schedule (and any continuations
thereof) annexed to and constituting a part of its Note. No
failure to so record or any error in so recording shall affect
the obligation of the Company to repay the R/C Loans and Com-
petitive Bid Loans, with interest thereon, as herein provided.
Each Note shall (1) be dated the first Borrowing Date, (2) be
stated to mature on the Termination Date, and (3) bear interest
for the period from and including the date thereof on the unpaid
principal balance thereof from time to time outstanding at the
applicable interest rate or rates per annum determined as pro-
vided in paragraph 2.3 or paragraph 2.8. Interest on each Note
shall be payable as determined in paragraph 2.3 or as specified
in paragraph 2.8.
5 Reduction of Commitments.
(a) Voluntary Reductions. The Company shall have the
right, upon at least five Business Days' prior written notice to
the Agent, at any time (but not more than four times in any
fiscal year) to reduce permanently the Commitments in whole at
any time, or in part from time to time, to an amount not less
than the sum of the aggregate principal balance of the R/C Loans
and Competitive Bid Loans and the Letter of Credit Exposure then
outstanding (after giving effect to any contemporaneous
prepayment thereof), without premium or penalty, provided that
each partial reduction of the Commitments shall be in an amount
equal to $5,000,000 or such amount plus a whole multiple of
$1,000,000.
(b) In General. Reductions of the Commitments shall be
applied pro rata according to the Commitment Percentage of each
Lender. Simultaneously with each reduction of the Commitments
under this paragraph 2.5, the Company shall pay the Facility Fee
accrued on the amount by which the Commitments have been reduced.
<PAGE>
If any prepayment is made under this paragraph 2.5 with respect
to any Eurodollar, CD or Competitive Bid Loans, in whole or in
part, prior to the last day of the applicable Interest Period,
the Company agrees that it shall indemnify the Lenders in accord-
ance with paragraph 2.13. After giving effect to any partial pre-
payment with respect to Eurodollar, CD or Competitive Bid Loans
which were made (whether as the result of a borrowing or a
conversion) on the same date and which had the same Interest
Period, the outstanding principal balance of such Eurodollar, CD
or Competitive Bid Loans shall not be less than (subject to
paragraph 2.7) $5,000,000 or such amount plus a whole multiple of
$1,000,000.
6 Prepayments of the Loans.
(a) Voluntary Prepayments. The Company may, at its
option, prepay the R/C Loans in whole or in part, without premium
or penalty, at any time and from time to time by notifying the
Agent at least three Business Days prior to the proposed
prepayment date. Each such notice shall be in writing and shall
specify the Loans to be prepaid, the amount to be prepaid, and
the date of prepayment. Upon receipt of such notice, the Agent
shall promptly notify each Lender thereof. If any such notice of
the Company is given pursuant to this paragraph 2.6(a), such
notice shall be irrevocable and payment of the amount specified
in such notice shall be due and payable on the date specified,
together with accrued interest to the date of such payment on the
amount prepaid. Partial prepayments shall be in an aggregate
principal amount of $1,000,000 or an integral multiple thereof
or, if less, the outstanding principal balance of the R/C Loans.
After giving effect to any partial prepayment with respect to
Eurodollar or CD Loans which were made (whether as the result of
a borrowing or a conversion) on the same date and which had the
same Interest Period, the outstanding principal amount of such
Eurodollar or CD Loans shall not be less than (subject to
paragraph 2.7) $5,000,000 or such amount plus a whole multiple of
$1,000,000.
(b) Mandatory Prepayments. The Company shall prepay the
Loans in the amounts, if any, and on the dates set forth in
paragraph 2.18(a) or paragraph 2.18(b).
(c) In General. If any prepayment is made under this
paragraph 2.6 with respect to any Eurodollar or CD Loans, in
whole or in part, prior to the last day of the applicable In-
terest Period, the Company agrees to indemnify the Lenders in
accordance with paragraph 2.13.
<PAGE>
7 Conversions.
(a) With respect to R/C Loans, the Company may elect
from time to time to convert Eurodollar or CD Loans to Base Rate
Loans by giving the Agent at least two Business Days' prior ir-
revocable notice of such election, specifying the amount to be so
converted, provided, that any such conversion of Eurodollar or CD
Loans shall only be made on the last day of the Interest Period
applicable thereto. In addition, the Company may elect from time
to time to convert Base Rate Loans to Eurodollar or CD Loans or
to convert Eurodollar or CD Loans to new Eurodollar or CD Loans
by giving the Agent at least three Business Days' prior
irrevocable notice of such election, specifying the amount to be
so converted and the initial Interest Period relating thereto,
provided that any such conversion of Base Rate Loans to
Eurodollar or CD Loans shall only be made on a Business Day and
any such conversion of Eurodollar or CD Loans to new Eurodollar
or CD Loans shall only be made on the last day of the Interest
Period applicable to the Eurodollar or CD Loans which are to be
converted to such new Eurodollar or CD Loans. The Agent shall
promptly provide the Lenders with notice of any such election.
Loans may be converted pursuant to this paragraph 2.7(a) in whole
or in part, provided that conversions of Base Rate Loans to
Eurodollar or CD Loans or Eurodollar or CD Loans to new
Eurodollar or CD Loans shall be in an aggregate principal amount
of (subject to this paragraph 2.7) $5,000,000 or such amount plus
a whole multiple of $1,000,000.
(b) Notwithstanding anything contained in this
paragraph 2.7 to the contrary, no Base Rate Loan may be converted
to a Eurodollar or CD Loan, and no Eurodollar or CD Loan may be
converted to a new Eurodollar or CD Loan, if the Company or the
Agent has knowledge that a Default or an Event of Default has oc-
curred and is continuing at the time the Company shall notify the
Agent of its election to so convert, or at the time such Loan is
to be so converted. In such event, such Base Rate Loan shall be
automatically continued as a Base Rate Loan or such Eurodollar or
CD Loan shall be automatically converted to a Base Rate Loan on
the last day of the Interest Period applicable to such Eurodollar
or CD Loan. If a Default or an Event of Default shall have
occurred and be continuing, the Agent shall, at the request of
the Required Lenders, notify the Company (by telephone or other-
wise) that all, or such lesser amount as the Agent and the
Required Lenders shall designate, of the outstanding Eurodollar
and CD Loans shall be automatically converted to Base Rate Loans,
in which event such Eurodollar and CD Loans shall be auto-
matically converted to Base Rate Loans on the date such notice is
given. If any Eurodollar or CD Loan shall be terminated prior to
the last day of the Interest Period applicable thereto pursuant
to this paragraph 2.7(b), the Company agrees that it shall
<PAGE>
indemnify the Lenders in accordance with paragraph 2.13.
(c) Each conversion shall be effected by each Lender by
applying the proceeds of the new Base Rate Loan or Eurodollar or
CD Loan, as the case may be, to the Loan (or portion thereof)
being converted (it being understood that such conversion shall
not constitute a borrowing for purposes of paragraphs 4, 5 or 6).
Accrued interest on the Loans (or portion thereof) being
converted shall be paid by the Company at the time of conversion.
8 Interest Rate and Payment Dates.
(a) R/C Loans Prior to Maturity. Prior to maturity, the
outstanding principal balance of the R/C Loans shall bear
interest on the unpaid principal balance thereof at the ap-
plicable interest rate or rates per annum set forth below:
LOAN TYPE RATE
Each Base Rate Loan Base Rate.
Each Eurodollar Loan Eurodollar Rate for the ap-
plicable Interest Period plus
the Applicable Margin.
Each CD Loan CD Rate for the applicable
Interest Period plus the
Applicable Margin.
(b) Late Charges on All Loans. If all or any portion
of the principal balance of or interest payable on any of the
Loans (whether R/C Loans or Competitive Bid Loans) shall not be
paid when due (whether at the stated maturity thereof, by
acceleration or otherwise), such overdue balance or amount shall
bear interest at a rate per annum equal to the applicable
interest rate (as determined under paragraph 2.3 or as set forth
in paragraph 2.8(a)) plus 2%, and if any reimbursement of a
drawing under a Letter of Credit, or any other amount payable
under the Loan Documents, is not paid when due, such overdue
amount shall bear interest at a rate per annum equal to Base Rate
plus 2%, in all of the foregoing cases from the date of such
nonpayment until paid in full (whether before or after the entry
of any judgment thereon).
(c) General. Interest on all Base Rate Loans, to the
extent based on the BNY Rate, shall be calculated on the basis of
a 365 or 366 day year (as the case may be), and interest on all
Eurodollar Loans, CD Loans, Competitive Bid Loans and Base
<PAGE>
Rate Loans, to the extent based on the Federal Funds Rate, shall
be calculated on the basis of a 360 day year, in all such cases
for the actual number of days elapsed. Interest shall be payable
in arrears on each Interest Payment Date and upon payment (in-
cluding prepayment) of the Loans. Any change in the interest rate
on a Loan resulting from a change in the Base Rate shall become
effective as of the opening of business on the day on which such
change in the Base Rate shall become effective. The Agent shall,
as soon as practicable, notify the Company and the Lenders of the
effective date and the amount of each such change in the Base
Rate, but failure to so notify shall not in any manner affect the
obligation of the Company to pay interest on the Loans in the
amounts and on the dates required. Each determination of the Base
Rate or Eurodollar or CD Rate by the Agent pursuant to this
Agreement shall be conclusive and binding absent manifest error.
At no time shall the interest rate payable on the Loans, together
with the Facility Fee and all other fees and other amounts pay-
able hereunder, to the extent the same are construed to
constitute interest, exceed the Highest Lawful Rate. If interest
payable to a Lender on any date would exceed the maximum amount
permitted by the Highest Lawful Rate, such interest payment shall
automatically be reduced to such maximum permitted amount, and
interest for any subsequent period, to the extent less than the
maximum amount permitted for such period by the Highest Lawful
Rate, shall be increased by the unpaid amount of such reduction.
Any interest actually received for any period in excess of such
maximum allowable amount for such period shall be deemed to have
been applied as a prepayment of the Loans. The Company
acknowledges that to the extent interest payable on the Loans is
based on the BNY Rate, the BNY Rate is only one of the bases for
computing interest on loans made by the Lenders, and by basing
interest payable on the Loans on the BNY Rate, the Lenders have
not committed to charge, and the Company has not in any way bar-
gained for, interest based on a lower or the lowest rate at which
any Lender may now or in the future make loans to other
borrowers.
9 Substituted Interest Rate.
In the event that (a) the Agent (after consultation
with the Reference Lenders) shall have reasonably determined
(which determination shall be conclusive and binding upon the
Company) that by reason of circumstances affecting the interbank
eurodollar market or the domestic certificate of deposit market
either adequate and reasonable means do not exist for
ascertaining the Eurodollar or CD Rate applicable pursuant to
paragraph 2.8 or (b) in the event that Required Lenders shall
have notified the Agent that they have determined (which de-
termination shall be conclusive and binding on the Company) that
the applicable Eurodollar or CD Rate will not adequately and
<PAGE>
fairly reflect the cost to the Required Lenders of maintaining or
funding loans bearing interest based on such Eurodollar or CD
Rate, in either case with respect to proposed Loans that the
Company has requested be made as Eurodollar or CD Loans or Euro-
dollar or CD Loans that will result from the requested conversion
of any Loans to Eurodollar or CD Loans (any such Loan being
herein called an "Affected Loan"), the Agent shall promptly
notify the Company and the Lenders (by telephone or otherwise) of
such determination, to be promptly confirmed in writing to the
Company on or prior to the requested Borrowing Date for such Af-
fected Loan or the requested Conversion Date of such Loan. If the
Agent shall give such notice, (i) any requested Affected Loan
shall be made as a Base Rate Loan, (ii) any Loan that was to have
been converted to an Affected Loan shall be converted to or
continued as a Base Rate Loan and (iii) any outstanding Affected
Loan shall be converted, on the last day of the then current
Interest Period with respect thereto, to a Base Rate Loan. Until
any such notice under clause (a) of this paragraph 2.9 has been
withdrawn by the Agent (by notice to the Company promptly upon
the Agent having determined (after consultation with the Ref-
erence Lenders) that such circumstances affecting the interbank
eurodollar market or the domestic certificate of deposit market
no longer exist and that adequate and reasonable means do exist
for determining the Eurodollar or CD Rate, as the case may be,
pursuant to paragraph 2.8), no further Eurodollar or CD Loans, as
the case may be, shall be made, nor shall the Company have the
right to convert any Loans to Eurodollar or CD Loans, as the case
may be. Until any such notice under clause (b) of this paragraph
2.9 has been withdrawn by the Agent (by notice to the Company
promptly upon the Agent having been notified by the Required
Lenders that circumstances no longer render any Loan an Affected
Loan), no further Eurodollar or CD Loans, as the case may be,
shall be required to be made by the Lenders nor shall the Company
have the right to convert any Loan to a Eurodollar or CD Loan, as
the case may be.
10 Taxes; Net Payments.
(a) All payments made by the Company under the Loan
Documents shall be made free and clear of, and without reduction
for or on account of, any taxes required by law to be withheld
from any amounts payable under the Loan Documents. A statement
setting forth the calculations of any amounts payable pursuant to
this paragraph submitted by a Lender to the Company shall be
conclusive absent manifest error.
(b) Each Lender shall deliver to the Company such
certificates, documents or other evidence as the Company may
reasonably require from time to time as are necessary to es-
tablish that such Lender is not subject to withholding under
<PAGE>
Section 1441 or 1442 of the Code or as may be necessary to
establish, under any law imposing upon the Company hereafter, an
obligation to withhold any portion of the payments made by the
Company under the Loan Documents, that payments to the Agent on
behalf of such Lender are not subject to withholding.
Notwithstanding any provision herein to the contrary, the Company
shall have no obligation to pay to any Lender any amount which
the Company is liable to withhold due to the failure of such
Lender to file any statement of exemption required by the Code.
11 Illegality.
Notwithstanding any other provisions herein, if any
law, regulation, treaty or directive, or any change therein or in
the interpretation or application thereof, shall make it unlawful
for any Lender to make or maintain its Eurodollar Loans as
contemplated by this Agreement, (a) the commitment of such Lender
hereunder to make Eurodollar Loans or convert Base Rate Loans or
CD Loans to Eurodollar Loans shall forthwith be suspended and (b)
such Lender's Loans then outstanding as Eurodollar Loans affected
hereby, if any, shall be converted automatically to Base Rate
Loans on the last day of the then current Interest Period
applicable thereto or earlier if required by law. If the commit-
ment of any Lender with respect to Eurodollar Loans is suspended
pursuant to this paragraph and such Lender shall notify the Agent
and the Company that it is once again legal for such Lender to
make or maintain Eurodollar Loans, such Lender's commitment to
make or maintain Eurodollar Loans shall be reinstated.
1. Increased Costs.
(a) In the event that any law, regulation, treaty or
directive hereafter enacted, promulgated, approved or issued or
any change in any presently existing law, regulation, treaty or
directive therein or in the interpretation or application thereof
by any Governmental Body charged with the administration thereof
or compliance by any Lender (or any corporation directly or
indirectly owning or controlling such Lender) with any request or
directive hereafter received from any central bank or other
Governmental Body:
(i) does or shall subject any Lender to any tax of
any kind whatsoever with respect to any Eurodollar or CD Loans or
its obligations under this Agreement to make Eurodollar or CD
Loans, or Letters of Credit or its issuance thereof or
participation therein, or change the basis of taxation of pay-
ments to any Lender of principal, interest or any other amount
payable hereunder in respect of its Eurodollar or CD Loans or
<PAGE>
Letters of Credit (except for the imposition of, or change in the
rate of, a tax on the overall net income of such Lender); or
(ii) does or shall impose, modify or make appli-
cable any reserve, special deposit, compulsory loan, assessment,
increased cost or similar requirement against assets held by, or
deposits of, or advances or loans by, or other credit extended
by, or any other acquisition of funds by, any office of such
Lender in respect of its Eurodollar or CD Loans or Letters of
Credit which is not otherwise included in the determination of
the Eurodollar or CD Rate or the Letter of Credit commissions;
and the result of any of the foregoing is to increase the cost to
such Lender of making, renewing, converting or maintaining its
Eurodollar or CD Loans or issuing or participating in the Letters
of Credit or its commitment to make such Loans hereunder or to so
issue or participate, or to reduce any amount receivable
hereunder in respect of its Eurodollar or CD Loans, its Letters
of Credit or its participations therein, then, in any such case
such Lender shall notify the Company promptly after learning of
such increase in cost or reduction of amount stating the reasons
therefor and, the Company shall thereafter promptly pay such
Lender, upon its demand, any additional amounts necessary to
compensate such Lender for such additional cost or reduction in
such amount receivable which such Lender reasonably and in good
faith deems to be material as determined by such Lender,
provided, however, that the Company shall not be obligated to
reimburse such Lender for such additional amounts unless such
Lender at such time shall be generally assessing such amounts on
a non-discriminatory basis against borrowers under agreements
having provisions similar to this paragraph. No failure by any
Lender to demand compensation for any increased cost shall
constitute a waiver of such Lender's right to demand such
compensation at any time, provided that the Company shall not be
obligated to compensate any Lender for any amount attributable to
a period more than 60 days before such Lender demands
compensation under this paragraph 2.12(a). A statement setting
forth the calculations of any additional amounts payable pursuant
to the foregoing sentence submitted by a Lender to the Company
shall be conclusive absent manifest error. In the event that a
Lender makes a demand for additional amounts pursuant to this
paragraph 2.12, such Lender agrees to designate a different
Eurodollar Lending Office if such designation will avoid the need
for or reduce such additional amount and will not (i) in the
judgment of the Agent and such Lender, be otherwise
disadvantageous to the Agent or such Lender or (ii) in the
judgment of the Company, be otherwise disadvantageous to the
Company.
<PAGE>
(b) Without limiting the effect of the foregoing, the
Company agrees to pay to each Lender on the last day of each
Interest Period for a Eurodollar Loan so long as such Lender is
maintaining reserves against "Eurocurrency liabilities" under
Regulation D (or, unless the provisions of paragraph (a) above
are applicable, so long as such Lender is, by reason of any
regulatory change, maintaining reserves against any other
category of liabilities which includes deposits by reference to
which the interest rate on Eurodollar Loans is determined as
provided in this Agreement or against any category of extensions
of credit or other assets of such Lender which includes any
Eurodollar Loans) an additional amount (determined by such Lender
and notified to the Company through the Agent) equal to the
product of the following for each Eurodollar Loan for each day
during such Interest Period:
(i) the principal balance of such Eurodollar Loan
outstanding on such day; and
(ii) the remainder of (x) a fraction the numerator of
which is the rate (expressed as a decimal) at which interest
accrues on such Eurodollar Loan for such Interest Period as
provided in this Agreement (less the Applicable Margin) and
the denominator of which is one minus the effective rate
(expressed as a decimal) at which such reserve requirements
are imposed on such Lender on such day minus (y) such
numerator; and
(iii) 1/360.
12 Indemnification for Loss.
Notwithstanding anything contained herein to the
contrary, if the Company shall fail to borrow on a Borrowing Date
after it shall have given notice to do so and shall have
requested a Eurodollar or CD Loan pursuant to paragraph 2.2, or
shall have accepted one or more offers of Competitive Bid Loans
under paragraph 2.3, or if a Eurodollar Loan, CD Loan or
Competitive Bid Loan shall be terminated for any reason prior to
the last day of the Interest Period applicable thereto, or if,
while a Eurodollar or CD Loan or Competitive Bid Loan is
outstanding, any repayment or prepayment of such Eurodollar Loan,
CD Loan or Competitive Bid Loan is made for any reason
(including, without limitation, as a result of acceleration or
illegality) on a date which is prior to the last day of the
Interest Period applicable thereto, the Company agrees to in-
demnify each Lender against, and to pay on demand directly to
such Lender, an amount, if greater than zero, equal to:
<PAGE>
A x (B-C) x D
360
where:
"A" equals such Lender's pro rata share of the Affected Principal
Amount;
"B" equals the Eurodollar Rate, CD Rate or rate which such
Competitive Bid Loan bears (in each case, expressed as a decimal)
applicable to such Loan;
"C" equals the applicable Eurodollar Rate, CD Rate or Proposed
Bid Rate (in each case, expressed as a decimal), as the case may
be, in effect on or about the first day of the applicable
Remaining Interest Period, based on the applicable rates offered
on or about such date, for deposits (or, in the case of a
Proposed Bid Rate, based on the rate such Lender would have
quoted) in an amount equal approximately to such Lender's pro
rata share of the Affected Principal Amount with an Interest
Period equal approximately to the applicable Remaining Interest
Period, as determined by such Lender;
"D" equals the number of days from and including the first day of
the applicable Remaining Interest Period to but excluding the
last day of such Remaining Interest Period;
and any other out-of-pocket loss or expense (including any
internal processing charge customarily charged by such Lender)
suffered by such Lender in liquidating deposits prior to maturity
in amounts which correspond to such Lender's pro rata share of
such proposed borrowing, terminated Eurodollar Loan, CD Loan,
Competitive Bid Loan or repayment.
13 Option to Fund.
Each Lender has indicated that, if the Company elects
to borrow or convert to a Eurodollar or CD Loan or to borrow a
Competitive Bid Loan, such Lender may wish to purchase one or
more deposits in order to fund or maintain its funding of such
Loan during the Interest Period in question; it being understood
that the provisions of this Agreement relating to such funding
are included only for the purpose of determining the rate of
interest to be paid on such Eurodollar or CD Loan or Competitive
Bid Loan and any amounts owing under paragraphs 2.7, 2.10, 2.11,
2.12, and 2.13. Each Lender shall be entitled to fund and
maintain its funding of all or any part of each Eurodollar or CD
Loan or Competitive Bid Loan made by it in any manner it sees
fit, but all determinations under paragraphs 2.7, 2.10, 2.11,
2.12, and 2.13 shall be made as if such Lender had actually
<PAGE>
funded and maintained such Eurodollar or CD Loan or Competitive
Bid Loan during the applicable Interest Period through the
purchase of deposits in an amount equal to such Eurodollar or CD
Loan or Competitive Bid Loan and having a maturity corresponding
to such Interest Period. The obligations of the Company under
paragraphs 2.7, 2.10, 2.11, 2.12, and 2.13 shall survive the
termination of the Commitments, the payment of the Notes, the
payment of the reimbursement obligations in respect of drawings
under the Letters of Credit, and the payment of any other amounts
due under the Loan Documents.
14 Use of Proceeds.
The proceeds of the Loans shall be used for general
corporate purposes of the Company, and the Letters of Credit
shall be used to support obligations of the Company and/or any of
its Subsidiaries (other than, unless otherwise agreed to by the
Required Lenders, obligations in respect of Indebtedness for
borrowed money extended, or other extensions of credit or credit
enhancements made, to the Company and/or any of its
Subsidiaries), and the Loans and the Letters of Credit shall
conform with the provisions of paragraph 4.12.
15 Capital Adequacy.
If either (i) the enactment or promulgation of or any
change after the date hereof in any law or regulation or in the
interpretation thereof by any Governmental Body charged with the
administration thereof, or (ii) compliance with any directive,
guideline or request from any central bank or Governmental Body
(whether or not having the force of law) promulgated or made
after the date hereof, affects or would affect the amount of
capital required to be maintained by a Lender (or any lending
office of such Lender) or any corporation directly or indirectly
controlling such Lender, as a result of its Commitment to make
and maintain the funding of Loans or issue or participate in the
issuance of Letters of Credit hereunder, and such Lender shall
have determined that such introduction or change has or would
have the effect of reducing the rate of return on such Lender's
capital as a result of such Lender having committed to make Loans
and issue or participate in Letters of Credit hereunder or having
made Loans or issued or participated in Letters of Credit
hereunder at a rate of return below that which such Lender could
have achieved but for such enactment, promulgation, change or
compliance (after taking into account such Lender's policies re-
garding capital adequacy) by an amount deemed by such Lender to
be material, such Lender shall notify the Company promptly after
learning of such reduction in such rate of return stating the
reasons therefor, and, upon demand by such Lender, the Company
shall thereafter promptly pay to such Lender such additional
<PAGE>
amount or amounts as shall be sufficient to compensate such
Lender for such reduction in such rate of return, provided,
however, that the Company shall not be obligated to reimburse
such Lender for such additional amounts unless such Lender at
such time shall be generally assessing such amounts on a
non-discriminatory basis against borrowers under agreements
having provisions similar to this paragraph. The Company shall
not be obligated to compensate any Lender under this paragraph
for any amount attributable to a period more than 60 days prior
to the date such Lender demands compensation under this para-
graph. A statement setting forth the calculations of any amounts
payable under this paragraph submitted by a Lender to the Company
shall be conclusive absent manifest error.
16 Transaction Record.
The Agent has established a transaction record (the
"Transaction Record") with respect to this Agreement. The
Transaction Record sets forth each Lender's Base Rate Loans,
Eurodollar Loans, CD Loans and Competitive Bid Loans, the is-
suance of each Letter of Credit and each Lender's payment of
reimbursement obligations with respect thereto, each payment by
the Company of principal and interest on the Loans and certain
additional information. The Transaction Record shall be
presumptively correct absent manifest error as to the amount of
each Lender's Loans and as to the amount of principal and
interest paid by the Company in respect of such Loans and Letters
of Credit and as to the other information relating to the Loans
and Letters of Credit and amounts paid and payable by the Company
hereunder and under the Notes set forth in such Transaction
Record.
17 Extension of Termination Date.
(a) Provided that no Default or Event of Default exists
during the periods set forth below, the Company may request that
the Termination Date be extended for an additional one-year
period or periods by giving written notice of each such request
(each, an "Extension Request") to the Agent and each Lender
during the period which is not less than 60 nor more than 90 days
prior to any anniversary of the Effective Date, with respect to
an extension of one year beyond the then Termination Date; it
being understood that not more than two such one-year extensions
may be requested. If each Lender consents to an Extension Request
within 45 days from the date of such Extension Request (by giving
written notice thereof to the Company and the Agent) the
Termination Date shall be extended by one year from the then
current Termination Date. If Required Lenders do not consent to
an Extension Request within such 45-day period, the Termination
Date shall not be extended. If Lenders (each a
<PAGE>
"Nonconsenting Lender") having Commitments equal to 33 1/3% or
less of the Aggregate Commitments do not consent to an Extension
Request within such 45-day period, the Company may elect to (i)
withdraw such Extension Request, or (ii) terminate the Commitment
of each Nonconsenting Lender effective on the then current
Termination Date with respect to such Nonconsenting Lender, and,
on such Date, pay to the Agent for distribution to such
Nonconsenting Lender the outstanding principal balance, if any,
of the Note of such Nonconsenting Lender, together with any
accrued and unpaid interest thereon to the date of such payment,
any accrued and unpaid Facility Fee and Letter of Credit
Commission due to such Lender, and any amount due to such Lender
under paragraph 2.13, whereupon (y) the then current Termination
Date shall be extended for one year, and (z) each Nonconsenting
Lender shall cease to be a "Lender" for all purposes of this
Agreement (except with respect to its rights hereunder to be
reimbursed for costs and expenses, and to indemnification with
respect to, matters attributable to events, acts or conditions
occurring prior to such assumption and purchase) and shall no
longer have any obligations hereunder.
(b) In the event the Company elects to terminate the Commit-
ment of a Nonconsenting Lender under paragraph 2.18(a)(ii) above,
the Agent is authorized and directed to amend Exhibit A,
effective on the then current Termination Date, and promptly dis-
tribute a copy thereof to the Company and the remaining Lenders
(the "Consenting Lenders") reflecting the new Commitment Per-
centage of each Consenting Lender, being the percentage (the
"Reallocated Commitment Percentage") that the Commitment of such
Consenting Lender bears to the Aggregate Commitments (after
giving effect to the termination of each Nonconsenting Lender's
Commitment), and the Consenting Lenders agree (subject to their
receipt of any mandatory prepayment referred to below), effective
on the then current Termination Date, to assume their Reallocated
Commitment Percentages of the Letter of Credit Exposure, pro-
vided, that if, after giving effect to such assumption, the sum
of (i) the outstanding principal balance of the Consenting Lend-
ers' Loans and (ii) the Letter of Credit Exposure would exceed
the Aggregate Commitments, then the Company will pay to the Agent
on the then current Termination Date for distribution to the
Consenting Lenders, an amount sufficient to reduce the out-
standing principal balance of the Loans to an amount which, when
added to the Letter of Credit Exposure, does not exceed the
Aggregate Commitments and each Consenting Lender's Commitment.
(c) In addition, the Company shall pay to the Agent, for the
pro rata account of each Consenting Lender a fee equal to .05% of
the Commitment of such Consenting Lender on the then current
Termination Date, payable on the Termination Date so
<PAGE>
extended. Each Lender will use its best efforts to respond
promptly to any request for an extension of the Termination Date,
provided that no Lender's failure to so respond shall create any
claim against it or have the effect of extending the Termination
Date of such Lender's Commitment.
18 Substitute Lender.
If (i) the Company becomes obligated to withhold all or any
part of any payments to be made under any Loan Documents to any
Lender as a result of conditions described in paragraph 2.10(a),
or (ii) the obligation of any Lender to make Eurodollar or CD
Loans is suspended pursuant to paragraph 2.9 or 2.11, or (iii)
any Lender has demanded compensation under paragraph 2.12(a) or
2.16, then unless such Lender has taken steps to remove or cure,
and has removed or cured, the conditions creating the cause of
such withholding or the obligation to pay such compensation, the
Company shall have the right, provided that no Default or Event
of Default shall then exist, with the assistance of the Agent, to
seek a substitute bank or banks (each, a "Substitute Lender")
(which may be one or more of the Lenders) which is reasonably
acceptable to the Agent, to purchase, without recourse to, or
warranty by, or expense to, such Lender, the Notes, and to assume
the Commitment and, with respect to the Letters of Credit, the
reimbursement obligations, of such Lender, for a purchase price
equal to the outstanding principal balance of the Notes payable
to such Lender, plus any accrued and unpaid interest thereon,
Facility Fee in respect of such Lender's Commitment and any
amount which would be due to such Lender under paragraph 2.13 had
the Company paid such Lender's Notes, and upon such purchase and
assumption, such Lender shall no longer be a party hereto or have
any rights hereunder and such Substitute Lender shall succeed to
the rights of such Lender.
19 Letter of Credit Sub-Facility.
(a) Subject to the terms and conditions of this
Agreement, the L/C Issuing Bank agrees, in reliance on the
agreement of the other Lenders set forth in paragraph 2.21, to
issue standby letters of credit (the "Letters of Credit"; each,
individually, a "Letter of Credit") during the period from the
Effective Date to the date occurring 90 days prior to the
Termination Date for the account of the Company. The amount of
each Letter of Credit shall not be less than $500,000, and the
aggregate amount of all Letters of Credit at any one time
outstanding shall not exceed the lesser of (i) $30,000,000 or
(ii) the difference between the Aggregate Commitments then in
effect less the aggregate outstanding Loans. Each Letter of
Credit issued pursuant to this paragraph 2.20 shall have an
expiration date which shall be not later than the earlier of the
<PAGE>
Termination Date or the date which is one year after the date of
issuance thereof. No Letter of Credit shall be issued if the
Agent shall have determined that the conditions set forth in
paragraphs 5 and 6 have not been satisfied.
(b) Each Letter of Credit may be issued for the
account of the Company, in accordance with the provisions of
paragraph 2.15, in support of an obligation of the Company and/or
any of its Subsidiaries in favor of a beneficiary who has
required the issuance of such Letter of Credit as a condition to
a transaction entered into in the ordinary course of the
Company's or such Subsidiary's business. The Company shall give
the Agent an irrevocable telephonic or telecopy (to be promptly
confirmed in writing) or written request (each an "L/C Issuance
Request" in the form of Exhibit D) for the issuance of each
Letter of Credit by 10:00 A.M., New York City time, at least
three Business Days prior to the requested date of issuance. Each
L/C Issuance Request shall be accompanied by the L/C Issuing
Bank's standard Application and Agreement for Standby Letter of
Credit (each an "Application for Letter of Credit"), executed by
a duly authorized officer of the Company, and shall specify (i)
the beneficiary of such Letter of Credit and the obligations of
the Company or its Subsidiary in respect of which such Letter of
Credit is to be issued, (ii) the Company's proposal as to the
conditions under which a drawing may be made under such Letter of
Credit and the documentation to be required in respect thereof,
(iii) the maximum amount to be available under such Letter of
Credit, and (iv) the requested dates of issuance and expiration
thereof. Upon receipt of such L/C Issuance Request from the Com-
pany, the Agent shall promptly notify the L/C Issuing Bank and
each other Lender thereof. The L/C Issuing Bank shall, on the
proposed date of issuance and subject to the other terms and con-
ditions of this Agreement, issue the requested Letter of Credit.
Each Letter of Credit shall be in form and substance satisfactory
to the L/C Issuing Bank, with such provisions with respect to the
conditions under which a drawing may be made thereunder and the
documentation required in respect of such drawing as the L/C
Issuing Bank shall require.
(c) Each payment by the L/C Issuing Bank of a draft
drawn under a Letter of Credit shall give rise to an obligation
on the part of the Company to reimburse the L/C Issuing Bank
immediately for the amount thereof. If the Company shall have
failed to reimburse the L/C Issuing Bank in full on or before
12:00 noon, New York City time, on the date the L/C Issuing Bank
shall make payment on a draft drawn under a Letter of Credit, the
Company's obligations to make such reimbursement shall be
satisfied by the automatic making of an R/C Loan, in accordance
with paragraph 2.2, by each Lender under its Note in the
<PAGE>
principal amount equal to its Commitment Percentage of the amount
of such draft paid by the L/C Issuing Bank. The Company shall be
deemed to have elected that each such Loan be made initially as
a Base Rate Loan. The Agent agrees to notify the L/C Issuing
Bank, each Lender and the Company of the making of each such
Loan, and the Company, subject to the provisions of this
Agreement with respect thereto, thereafter shall be entitled to
convert each such Loan to a Loan of another Type.
20 Letter of Credit Participation and Funding Commitments.
(a) Each Lender hereby unconditionally and ir-
revocably, severally for itself only and without any notice to or
the taking of any action by such Lender, takes an undivided
participating interest in the obligations of the L/C Issuing Bank
under and in connection with each Letter of Credit in an amount
equal to such Lender's Commitment Percentage of the amount of
such Letter of Credit. Each Lender shall be liable to the L/C
Issuing Bank for its Commitment Percentage of the unreimbursed
amount of any draft drawn and honored under each Letter of
Credit. Each Lender shall also be liable for an amount equal to
the product of its Commitment Percentage and any amounts paid by
the Company pursuant to paragraph 2.22 that are subsequently
rescinded or avoided, or must otherwise be restored or returned.
Such liabilities shall be unconditional and without regard to the
occurrence of any Default or Event of Default or the compliance
by the Company with any of its obligations under this Agreement.
Each payment by a Lender of such Commitment Percentage or of any
amounts so rescinded, avoided, restored or returned shall be
treated as the making by such Lender of an automatic R/C Loan.
(b) The Agent will promptly notify each Lender (which
notice shall be promptly confirmed in writing) of the date and
the amount of any draft presented under any Letter of Credit with
respect to which full reimbursement of payment is not made by the
Company, and forthwith upon receipt of such notice, such Lender
(other than the L/C Issuing Bank) shall make available to the
Agent for the account of the L/C Issuing Bank its Commitment
Percentage of the amount of such unreimbursed draft (which shall
constitute such Lender's R/C Loan) at the office of the Agent
specified in paragraph 11.2, in lawful money of the United States
and in immediately available funds, before 4:00 P.M., New York
City time, on the day such notice was given by the Agent, if the
relevant notice was given by the Agent at or prior to 1:00 P.M.,
New York City time, on such day, and before 12:00 noon, New York
City time, on the next succeeding Business Day, if the relevant
notice was given by the Agent after 1:00 P.M., New York City
time, on such day. The Agent shall distribute the
<PAGE>
payments made by each Lender (other than the L/C Issuing Bank)
pursuant to the immediately preceding sentence to the L/C Issuing
Bank promptly upon receipt thereof in like funds as received.
Each Lender shall indemnify and hold harmless the Agent and the
L/C Issuing Bank from and against any and all losses, liabilities
(including liabilities for penalties), actions, suits, judgments,
demands, costs and expenses (including, without limitation,
reasonable attorneys' fees and expenses) resulting from any
failure on the part of such Lender to provide, or from any delay
in providing, the Agent with such Lender's Commitment Percentage
of the amount of any payment made by the L/C Issuing Bank under
a Letter of Credit in accordance with this clause (b) (except in
respect of losses, liabilities or other obligations suffered by
the Agent or the L/C Issuing Bank resulting from the gross
negligence or willful misconduct of the Agent or the L/C Issuing
Bank). If a Lender does not make available to the Agent when due
such Lender's Commitment Percentage of any unreimbursed payment
made by the L/C Issuing Bank under a Letter of Credit (other than
payments made by the L/C Issuing Bank by reason of its gross
negligence or willful misconduct), such Lender shall be required
to pay interest to the Agent for the account of the L/C Issuing
Bank on such Lender's Commitment Percentage of such payment at a
rate of interest per annum equal to the Federal Funds Rate from
the date such Lender's payment is due until the date it is re-
ceived by the Agent. The Agent shall distribute such interest
payments to the L/C Issuing Bank upon receipt thereof in like
funds as received. If the Agent receives a Lender's Commitment
Percentage of any unreimbursed payment under a Letter of Credit
after the date when due and the Agent receives interest on any
late payment from such Lender in accordance with the provisions
of the preceding sentence, such Lender's R/C Loan shall be deemed
to have been made to the Company on the date the L/C Issuing Bank
made payment under such Letter of Credit.
(c) Whenever the Agent is reimbursed by the Company
for any payment under a Letter of Credit and such payment relates
to an amount for which the Agent has received the Commitment
Percentage for the account of the L/C Issuing Bank from a Lender
pursuant to this Agreement, the Agent will pay to such Lender in
immediately available funds such Lender's pro rata share,
computed in accordance with such Lender's Commitment Percentage,
of such payment (i) before the close of business on the day such
payment from the Company is received, if such payment is received
at or prior to 1:00 P.M., New York City time, on such day, or
(ii) before 12:00 Noon, New York City time, on the next
succeeding Business Day, if such payment from the Company is
received after 1:00 P.M., New York City time, on such day.
<PAGE>
(d) Each Lender hereby irrevocably authorizes the L/C
Issuing Bank to issue Letters of Credit and to pay the amount of
any draft presented under a Letter of Credit upon presentation of
documents which, upon their face, conform to the terms of such
Letter of Credit, and each Lender authorizes the Agent to receive
from the Company reimbursement for payments under such Letter of
Credit, to receive from the Company payment of all fees, charges
and interest in respect of the Letters of Credit, and to take
such action on its behalf under the provisions of this Agreement
and to exercise such powers and to perform such duties hereunder
as are specifically delegated to or required of the Agent and the
L/C Issuing Bank by the terms hereof, together with such powers
as are reasonably incidental thereto, and the L/C Issuing Bank
shall have no liability for any of the foregoing, except for its
gross negligence or wilful misconduct.
21 Absolute Obligation with respect to Letter of Credit
Payments.
The Company's obligation to reimburse the Agent for the
account of the L/C Issuing Bank in respect of a Letter of Credit
for each payment under or in respect of such Letter of Credit
shall be absolute and unconditional under any and all
circumstances and irrespective of any set-off, counterclaim or
defense to payment which the Company may have or have had against
the beneficiary of such Letter of Credit, the Agent, the L/C
Issuing Bank as issuer of such Letter of Credit, any Lender or
any other Person, including, without limitation, any defense
based on the failure of any drawing to conform to the terms of
such Letter of Credit, any drawing document proving to be forged,
fraudulent or invalid, or the legality, validity, regularity or
enforceability of such Letter of Credit.
22 Letter of Credit Fees and Commissions.
The Company agrees to pay the following:
(a) to the L/C Issuing Bank, for its own account, the
standard fees and charges customarily charged by the L/C Issuing
Bank in connection with the issuance, administration, amendment,
payment and/or cancellation of any Letter of Credit, as
determined by the L/C Issuing Bank in its sole discretion,
together with such other fees as are set forth in writing between
the Company and the L/C Issuing Bank; and
(b) to the Agent, for the account of the Lenders on a
pro rata basis in accordance with each Lender's Commitment
Percentage, a non-refundable commission (each, a "Letter of
Credit Commission") with respect to each Letter of Credit for the
period from and including the date of issuance thereof to,
<PAGE>
but not including, the expiration date thereof, at a rate per
annum (calculated on the basis of a 360 day year for the actual
number of days elapsed) for the amount of each Letter of Credit
equal to (i) if the Company's Senior Public Debt Rating is equal
to or more favorable than A3 by Moody's Investors Service, Inc.
and A- by Standard & Poor's Corporation, 0.25%, (ii) if the
Company's Senior Public Debt Rating is equal to or more favorable
than Baa3 by Moody's Investors Service, Inc. and BBB- by Standard
& Poor's Corporation, and clause (i) is not applicable, 0.375%
and (iii) in all cases when clauses (i) and (ii) are not
applicable, 0.75%. The Letter of Credit Commissions shall be pay-
able quarterly in arrears on the last day of each February, May,
August and November of each year, commencing on the first such
day following the Effective Date, and upon the expiration or
cancellation of any Letter of Credit, with respect to such Letter
of Credit.
3. FEES; PAYMENTS
1 Participation Fee.
The Company agrees to pay to the Agent, for the account
of the Lenders on a pro rata basis according to each Lender's
Commitment Percentage, a fee (the "Participation Fee") in an
aggregate amount equal to 0.125% of the Aggregate Commitments,
payable on the date on which executed counterparts of this
Agreement have been delivered to the Agent by the Company and
each Lender.
2 Facility Fee.
The Company agrees to pay to the Agent, for the account
of the Lenders on a pro rata basis according to each Lender's
Commitment Percentage, a fee (the "Facility Fee"), for the period
from and including the Effective Date to and including the
expiration or other termination of the Commitments, equal to (i)
if the Company's Senior Public Debt Rating is equal to or more
favorable than Baa3 by Moody's Investor Services, Inc. and BBB-
by Standard & Poor's Corporation, 0.250% per annum of the
Aggregate Commitments whether utilized, and (ii) in all
circumstances when clause (i) above is not satisfied, 0.375% per
annum of the Aggregate Commitments whether utilized, in either
case payable quarterly in arrears on the last day of each
February, May, August and November of each year, commencing on
the first such day following the Effective Date, and on the
Termination Date. The Facility Fee shall be calculated on the
basis of a 360-day year for the actual number of days elapsed.
<PAGE>
3 Pro Rata Treatment and Application of Payments.
With respect to the R/C Loans, each borrowing by the
Company from the Lenders, any conversion of R/C Loans from one
Type to another, and any reduction of the Commitments (other than
a reduction arising under paragraph 2.18), shall be made pro rata
according to the Commitment Percentage of each Lender. All
payments (including prepayments) made by the Company to the Agent
on account of principal of or interest on the R/C Loans, all
payments in respect of unreimbursed obligations for the Letters
of Credit, and any reduction of the participation in the face
amount of a Letter of Credit, shall be made pro rata according to
the outstanding principal amount of each Lender's R/C Loans, and
all payments (including prepayments) made by the Company on
account of principal of or interest on the Competitive Bid Loans
comprising the same Competitive Bid Borrowing shall be made as
specified in paragraphs 2.3(c) and 2.3(d). All payments by the
Company shall be made without set-off or counterclaim and shall
be made prior to 12:00 Noon (New York City time) on the date such
payment is due, to the Agent for the account of the Lenders at
the Agent's office specified in paragraph 11.2, in each case in
lawful money of the United States of America and in immediately
available funds, and, as between the Company and the Lenders, any
payment by the Company to the Agent for the account of the
Lenders shall be deemed to be payment by the Company to the
Lenders. The failure of the Company to make any such payment by
12:00 Noon (New York City time) on such due date shall not
constitute a Default or Event of Default hereunder, provided that
such payment is made on such due date, but any such payment
received by the Agent on any Business Day after 12:00 Noon (New
York City time) shall be deemed to have been received on the im-
mediately succeeding Business Day for the purpose of calculating
any interest payable in respect thereof. The Agent agrees
promptly to notify the Company if it shall not receive any such
payment by 12:00 Noon (New York City time) on the due date
thereof, provided that the failure of the Agent to give such
prompt notice shall in no way affect the Company's obligation to
make any payment hereunder on the date such payment is due. The
Agent shall distribute such payments to the Lenders promptly upon
receipt in like funds as received. If any payment hereunder or on
any Note becomes due and payable on a day other than a Business
Day, the maturity thereof shall be extended to the next suc-
ceeding Business Day (unless, in the case of Eurodollar or CD
Loans, the result of such extension would be to extend such
payment into another calendar month, in which event such payment
shall be made on the immediately preceding Business Day) and,
with respect to payments of principal, interest thereon shall be
payable at the then applicable rate or rates during such ex-
tension.
<PAGE>
4. REPRESENTATIONS AND WARRANTIES
In order to induce the Agent and the Lenders to enter into
this Agreement and to make the Loans, the Company hereby makes
the following representations and warranties to the Agent and to
each Lender:
1 Subsidiaries.
The Company has only the Material Subsidiaries set
forth on Schedule 4.1. The shares of each Material Subsidiary are
duly authorized, validly issued, fully paid and nonassessable and
are owned free and clear of any Liens, except Permitted Liens.
2 Corporate Existence and Power.
The Company and each Material Subsidiary is duly
organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation or formation, has all
requisite corporate power and authority to own its Property and
to carry on its business as now conducted, and is in good
standing and authorized to do business in each jurisdiction in
which there is a reasonable likelihood of a Material Adverse Ef-
fect as a consequence of the failure to be so authorized.
3 Corporate Authority.
The Company has full corporate power and authority to
enter into, execute, deliver and carry out the terms of the Loan
Documents, and to make the borrowings and to incur the other
obligations contemplated hereby, to execute, deliver and carry
out the terms of the Notes and to incur the obligations provided
for herein and therein, all of which have been duly authorized by
all proper and necessary corporate action and are not in
violation of its Restated Certificate of Incorporation and
By-Laws.
4 Governmental Body Approvals.
No consent, authorization or approval of, filing with,
notice to, or exemption by, stockholders, any Governmental Body
or any other Person (except for those which have been obtained,
made or given) is required to authorize, or is required in con-
nection with the execution, delivery and performance of the Loan
Documents or is required as a condition to the validity or
enforceability of the Loan Documents. No provision of any ap-
plicable statute, law (including, without limitation, any ap-
plicable usury or similar law), rule or regulation of any
<PAGE>
Governmental Body will prevent the execution, delivery or
performance of, or affect the validity of, the Loan Documents.
5 Binding Agreement.
This Agreement constitutes, and the other Loan
Documents, when issued and delivered pursuant hereto for value
received, will constitute, the valid and legally binding obli-
gations of the Company enforceable in accordance with their
respective terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization or other simi-
lar laws affecting the enforcement of creditors' rights generally
or by general principles of equity.
6 Litigation.
There are no actions, suits, arbitration proceedings
or claims pending or, to the knowledge of the Company, threatened
against the Company or any Subsidiary, or maintained by the
Company or any Subsidiary, at law or in equity, before any
Governmental Body as to which, there is a reasonable likelihood
of a Material Adverse Effect. There are no proceedings pending
or, to the knowledge of the Company, threatened against the Com-
pany or any Subsidiary which call into question the validity or
enforceability of any of the Loan Documents.
7 No Conflicting Agreements.
Neither the Company nor any Subsidiary is in default
under any mortgage, indenture, contract or agreement to which it
is a party or by which it or any of its Property is bound, as to
which, taken as a whole, there is a reasonable likelihood of a
Material Adverse Effect. The execution, delivery or carrying out
of the terms of the Loan Documents will not constitute a default
under, conflict with, require any consent under (other than
consents which have been obtained), or result in the creation or
imposition of, or obligation to create, any Lien upon the
Property of the Company or any Subsidiary pursuant to the terms
of any such mortgage, indenture, contract, agreement, judgment,
decree or order, as to which, if not obtained, there is a
reasonable likelihood of a Material Adverse Effect.
8 Taxes.
Except as set forth on Schedule 4.8, the Company and
each Subsidiary has filed or caused to be filed all tax returns
of any material financial significance required to be filed and
has paid, or has made adequate provision for the payment of, all
taxes shown to be due and payable on said returns or in any
assessments made against it which would be material to the
<PAGE>
Company or any Material Subsidiary, and no tax Liens that are not
Permitted Liens have been filed. The charges, accruals and
reserves on the books of the Company and its consolidated Subsid-
iaries with respect to all federal, state, local and other Taxes
are, to the best knowledge of the Company, adequate, and the
Company knows of no unpaid assessment which is due and payable or
any claims being asserted as to which there is a reasonable
likelihood of a Material Adverse Effect, except such thereof as
are being contested in good faith and by appropriate proceedings
diligently conducted, and for which adequate reserves have been
set aside in accordance with GAAP.
9 Compliance with Applicable Laws.
Neither the Company nor any Subsidiary is in default
with respect to any judgment, order, writ, injunction, decree or
decision of any Governmental Body as to which there is a
reasonable likelihood of a Material Adverse Effect. The Company
and each Subsidiary is complying in all material respects with
all applicable statutes and regulations, including ERISA, of all
Governmental Bodies, a violation of which is reasonably likely to
have a Material Adverse Effect.
10 Governmental Regulations.
Neither the Company nor any Subsidiary (a) is subject
to regulation under the Public Utility Holding Company Act of
1935, the Federal Power Act (other than the minimum statutory
requirements that do not violate clause (b) below) or the
Investment Company Act of 1940, or (b) is subject to any statute
or regulation which prohibits or restricts the incurrence of In-
debtedness under the Loan Documents, including, without
limitation, statutes or regulations relative to common or
contract carriers or to the sale of electricity, gas, steam,
water, telephone, telegraph or other public utility services.
11 Property.
The Company and each Subsidiary has good and mar-
ketable title to all of its Property, title to which is material
to the Company and its Subsidiaries taken as a whole, subject to
no Liens, except Permitted Liens.
12 Federal Reserve Regulations; Use of Loan Proceeds.
Neither the Company nor any Subsidiary is engaged
principally, or as one of its important activities, in the
business of extending credit for the purpose of purchasing or
carrying any Margin Stock. No part of the proceeds of the Loans
or the Letters of Credit will be used, directly or indirectly,
<PAGE>
for a purpose which violates any law, rule or regulation of any
Governmental Body, including without limitation the provisions of
Regulations G, T, U or X of the Board of Governors of the Federal
Reserve System, as amended. Margin Stock constitutes less than
25% of the assets (as determined by any reasonable method) of the
Company and/or any of its Subsidiaries.
13 Plans.
Each Single Employer Plan and, to the best knowledge
of the Company, each Multiemployer Plan is in substantial
compliance with the applicable provisions of ERISA and the Code,
and the Company and each ERISA Affiliate has filed all material
reports required to be filed by it under ERISA and the Code with
respect to each such Plan. The Company and each ERISA Affiliate
has met all material requirements imposed by ERISA and the Code
with respect to the funding of all Single Employer Plans, and to
the best knowledge of the Company, Multiemployer Plans. Since the
effective date of ERISA, there have not been, nor are there now
existing, any events or conditions which would permit any Single
Employer Plan or, to the best knowledge of the Company, any
Multiemployer Plan to be terminated under circumstances which
would cause the lien provided under Section 4068 of ERISA to
attach to the Property of the Company or any ERISA Affiliate. No
Reportable Event currently exists which would constitute grounds
for the termination of any Single Employer Plan or, to the best
knowledge of the Company, any Multiemployer Plan under Title IV
of ERISA.
14 Financial Statements.
The Company has heretofore delivered to the Lenders
copies of its audited Consolidated Balance Sheets as of December
31, 1992, and the related Consolidated Statements of Income, Cash
Flows and Shareholders' Equity for the period then ended, and the
unaudited Consolidated Balance Sheet of the Company as of
March 31, 1993 and the related unaudited Consolidated Statements
of Income, Cash Flows and Shareholders' Equity, for the fiscal
quarter then ended (collectively, with the related notes and
schedules, the "Financial Statements"). The Financial Statements
fairly present the Consolidated financial condition and results
of the operations of the Company as of the dates and for the
periods indicated therein and have been prepared in conformity
with GAAP. Except as reflected in the Financial Statements or in
the footnotes thereto, neither the Company nor any Subsidiary has
any obligation or liability of any kind (whether fixed, accrued,
contingent, unmatured or otherwise) which, in accordance with
GAAP, should have been disclosed in the Financial Statements and
was not. Since December 31, 1992, there has been no Material
Adverse Change.
<PAGE>
15 Environmental Matters.
Neither the Company nor any Subsidiary (i) has re-
ceived written notice or otherwise learned of any claim, demand,
action, event, condition, report or investigation indicating or
concerning any potential or actual liability as to which
individually or in the aggregate there is a reasonable likelihood
of a Material Adverse Effect, arising in connection with: (a) any
non-compliance with or violation of the requirements of any
Environmental Laws or (b) the release or threatened release of
any toxic or hazardous waste, substance or constituent, or other
substance into the environment, (ii) to the best knowledge of the
Company, has any liability in connection with the release or
threatened release of any toxic or hazardous waste, substance or
constituent, or other substance into the environment as to which
individually or in the aggregate there is a reasonable likelihood
of a Material Adverse Effect, (iii) has received notice of any
federal or state investigation evaluating whether any remedial
action is needed to respond to a release or threatened release of
any toxic or hazardous waste, substance or constituent or other
substance into the environment for which the Company or any
Subsidiary is or may be liable as to which there is a reasonable
likelihood of a Material Adverse Effect, or (iv) has received
notice of any claimed liability by the Company or any Subsidiary,
to any Person under any Environmental Law, as to which there is
a reasonable likelihood of a Material Adverse Effect. The Company
and each Subsidiary is in compliance in all material respects
with the financial responsibility requirements of all
Environmental Laws the failure to comply with which would rea-
sonably likely have a Material Adverse Effect.
16 Documents.
The Company has delivered to the Agent and each Lender
conformed copies of the Agency Agreement and the form of
Debenture issued pursuant thereto, together with all consents,
waivers, amendments thereof and supplements thereto. Each of such
agreements as amended or supplemented, as the case may be, is in
full force and effect.
17 Labor Relations.
There are no material controversies pending between
the Company or any Subsidiary and any of their respective em-
ployees, as to which there is a reasonable likelihood of a Mate-
rial Adverse Effect.
<PAGE>
18 No Misrepresentation.
No representation or warranty contained herein and no
certificate or report furnished or to be furnished by the Company
or any Subsidiary in connection with the transactions
contemplated hereby, contains or will contain a misstatement of
material fact, or, to the best knowledge of the Company, omits or
will omit to state a material fact required to be stated in order
to make the statements herein or therein contained not misleading
in the light of the circumstances under which made.
5. CONDITIONS TO LENDING - FIRST LOANS OR L/C
In addition to the conditions precedent set forth in
Paragraph 6, the obligation of each Lender to make its first Loan
or of the L/C Issuing Bank to issue a Letter of Credit on the
first Borrowing Date shall be subject to the fulfillment of the
following conditions precedent:
1 Evidence of Corporate Action.
The Agent shall have received a certificate, dated the
first Borrowing Date, of the Secretary or Assistant Secretary of
the Company (i) attaching a true and complete copy of the
resolutions of its Board of Directors and of all documents
evidencing other necessary corporate action (in form and sub-
stance satisfactory to the Agent and to Special Counsel) taken by
it to authorize the Loan Documents and the transactions
contemplated thereby, (ii) attaching a true and complete copy of
its Restated Certificate of Incorporation and By-Laws, and (iii)
setting forth the incumbency of its officer or officers who may
sign the Loan Documents, including therein a signature specimen
of such officer or officers, together with such other documents
as the Agent or Special Counsel shall reasonably require.
2 Notes.
The Agent shall have received the Notes duly executed
by an Authorized Signatory of the Company.
3 Participation Fee.
The Company shall have paid the Participation Fee.
4 No Material Adverse Change.
There shall have occurred no Material Adverse Change
since December 31, 1992, and the Agent shall have received a
<PAGE>
certificate of an Authorized Signatory of the Company to such
effect.
5 Opinion of Counsel to the Company.
The Agent shall have received an opinion of counsel to
the Company, addressed to the Agent and the Lenders, dated the
first Borrowing Date, substantially in the form of Exhibit F.
6 Opinion of Special Counsel.
The Agent shall have received an opinion of Special
Counsel substantially in the form of Exhibit G.
7 Termination of Existing Agreement.
Simultaneously with the making of the first Loans, the
Company shall have terminated in writing, and paid in full all
amounts owing under, the Existing Agreement.
8 This Agreement.
The Agent shall have received counterparts of this
Agreement signed by each of the parties hereto (or receipt by the
Agent from a party hereto of a facsimile signature page signed by
such party which shall have agreed to promptly provide the Agent
with originally executed counterparts hereof).
6. CONDITIONS OF LENDING - ALL LOANS AND L/Cs.
The obligation of each Lender to make any Loan, and of the
L/C Issuing Bank to issue a Letter of Credit, on a Borrowing Date
is subject to the satisfaction of the following conditions
precedent as of the date of such Loan or of the issuance of such
L/C:
1 Compliance.
On each Borrowing Date and after giving effect to the
Loans to be made or created or the Letters of Credit to be
issued, as the case may be, thereon, (a) there shall exist no
Default or Event of Default, (b) the representations and war-
ranties contained in the Loan Documents shall be true and correct
with the same effect as though such representations and war-
ranties had been made on such Borrowing Date, except as the
context otherwise requires and except such matters relating
thereto as are indicated in each Borrowing Request which shall be
satisfactory to the Agent and the Lenders in their sole
<PAGE>
discretion and (c) there shall have occurred no Material Adverse
Change. Each borrowing by the Company and each issuance of a
Letter of Credit shall constitute a certification by the Company
as of the date of such borrowing or issuance that each of the
foregoing matters is true and correct in all respects.
2 Closings.
All documents required by the provisions of this
Agreement to be executed or delivered to the Agent on or before
the applicable Borrowing Date shall have been executed and shall
have been delivered to the office of the Agent set forth in
paragraph 11.2 on or before such Borrowing Date.
3 Borrowing Request.
With respect to any request for Loans or the issuance
of a Letter of Credit, the Agent shall have received an R/C
Borrowing Request, Competitive Bid Borrowing Request or L/C
Issuance Request, as the case may be, duly executed by an
Authorized Signatory of the Company, accompanied by, with respect
to each request for a Letter of Credit, an Application for Letter
of Credit.
7. AFFIRMATIVE COVENANTS
The Company hereby agrees that so long as this Agreement is
in effect, any Loan or Letter of Credit remains outstanding and
unpaid, or any other amount is owing under any of the Loan
Documents to any Lender or the Agent, the Company shall:
1 Financial Statements.
Maintain, and cause each Subsidiary to maintain, a
system of accounting in accordance with GAAP, and furnish or
cause to be furnished to the Agent and each Lender:
(a) As soon as available, but in any event within 120
days after the end of each fiscal year of the Company, a copy of
its Consolidated and Consolidating Balance Sheets as at the end
of such fiscal year, together with the related Consolidated and
Consolidating Statements of Income, Cash Flows and Shareholders'
Equity as of and through the end of such fiscal year, setting
forth, with respect to Consolidated Statements, in each case in
comparative form the figures for the preceding fiscal year. The
Consolidated Balance Sheet and Statements of Income, Cash Flows
and Shareholders' Equity shall be certified by the Accountants.
The Consolidating Balance Sheets and Statements of Income, Cash
Flows and Shareholders' Equity shall be certified by the Chief
Financial Officer of the Company (or such other officer as shall
<PAGE>
acceptable to the Agent) as being complete and correct in all
material respects and as presenting fairly the Consolidating
financial condition and results of operations of the company and
its Subsidiaries.
(b) As soon as available, but in any event not later
than 60 days after the end of each of the first three quarterly
accounting periods in each fiscal year of the Company (i) a copy
of the Consolidated and Consolidating Balance Sheet as at the end
of each such quarterly period, and the Consolidated and
Consolidating Statements of Income, Cash Flows and Shareholders'
Equity, for such period and for the elapsed portion of the fiscal
year through such date, setting forth, with respect to
Consolidated Statements, in each case in comparative form the
figures for the corresponding periods of the preceding fiscal
year, certified by the Chief Financial Officer of the Company (or
such other officer acceptable to the Agent) as having been
prepared in accordance with GAAP (except that notes to such
Statements need not be included) and as presenting fairly the
Consolidated financial condition and the Consolidated results of
operations of the Company and its Subsidiaries, and (ii) a
certificate of the Chief Financial Officer of the Company (or
such other officer as shall be acceptable to the Agent) in detail
reasonably satisfactory to the Agent (x) stating that there
exists no violation of any of the terms or provisions of the Loan
Documents, or the occurrence of any condition or event which
would constitute a Default or Event of Default, and, if so,
specifying in such certificate all such violations, conditions
and events, and the nature and status thereof, (y) containing
computations showing compliance with the provisions of paragraphs
7.11, 8.1, 8.2, 8.3, 8.4, 8.5, 8.8 and 8.10, and setting forth
the Senior Public Debt Rating.
(c) As soon as available, but in any event not later
than 120 days after the end of the last quarterly accounting
period in each fiscal year of the Company, the same certificate
as is required by clause (b) (ii) above.
2 Certificates; Other Information.
Furnish to the Agent and each Lender:
(a) Prompt written notice if: (i) any Indebtedness or
Contingent Obligation of the Company or any Subsidiary in excess
of $25,000,000 is declared or shall become due and payable prior
to its stated maturity, or is called and not paid when due, (ii)
a default shall have occurred under any note (other than the
Notes) or the holder of any such note, or other evidence of In-
debtedness, certificate or security evidencing any such
Indebtedness or any obligee with respect to any other
<PAGE>
Indebtedness of the Company or any Subsidiary has the right to
declare any such Indebtedness due and payable prior to its stated
maturity as a result of such default, or (iii) any officer of the
Company shall have obtained knowledge of the occurrence of a
Default or an Event of Default.
(b) Prompt written notice of: (i) any citation,
summons, subpoena, order to show cause or other order naming the
Company or any Subsidiary a party to any proceeding before any
Governmental Body as to which there is a reasonable likelihood of
a Material Adverse Effect or which calls into question the
validity or enforceability of any of the Loan Documents, and in-
clude with such notice a copy of such citation, summons, sub-
poena, order to show cause or other order, (ii) any lapse or
other termination of any material license, permit, franchise or
other authorization issued to the Company or any Subsidiary by
any Governmental Body, (iii) any refusal by any Governmental Body
to renew or extend any such material license, permit, franchise
or other authorization, and (iv) any dispute between the Company
or any Subsidiary and any Person, as to which lapse, termination,
refusal or dispute there is a reasonable likelihood of a Material
Adverse Effect.
(c) Promptly upon becoming available, copies of all
(i) financial statements, reports and proxy statements which the
Company may have sent to its stockholders generally and copies of
all registration statements and regular, periodic or special
reports, schedules and other material which the Company may now
or hereafter be required to file with or deliver to any
securities exchange or the Securities and Exchange Commission, or
any other Governmental Body succeeding to the functions thereof,
and with any national securities exchange, and (ii) material news
releases and annual reports relating to the Company.
(d) Promptly after the request of the Agent or any
Lender therefor, copies of each annual report filed pursuant to
Section 104 of ERISA with respect to each Plan (including, to the
extent required by Section 104 of ERISA, the related financial
and actuarial statements and opinions and other supporting
statements, certifications, schedules and information referred to
in Section 103 of ERISA) and each annual report filed with
respect to each Plan under Section 4065 of ERISA; provided,
however, that in the case of a Multiemployer Plan, such annual
reports shall be furnished only if they are available to the
Company or any ERISA Affiliate; and
(e) Prompt written notice of any order, notice, claim
or proceeding received by, or brought against, the Company or any
Subsidiary under any Environmental Law, as to which,
<PAGE>
there is a reasonable likelihood that there would be a Material
Adverse Effect; and
(f) With reasonable promptness, such other financial
data as the Agent or any Lender may reasonably request; provided,
however, that the Company shall not be required to furnish
financial data it reasonably believes to be proprietary and
confidential unless such financial data is material to the
business or financial position of the Company or any Subsidiary.
Any financial data or other information provided pursuant to this
subparagraph to the Agent or the Lenders shall be kept in
confidence as required under paragraph 11.16.
3 Legal Existence.
Except as permitted by paragraph 8.4, maintain, and
cause each Subsidiary to maintain, its corporate existence, in
good standing in the jurisdiction of its incorporation or or-
ganization and in each other jurisdiction in which the failure so
to do would reasonably likely have a Material Adverse Effect,
provided that the foregoing shall not require the Company to
maintain the corporate existence or the business of any
Subsidiary which in the judgment of the Company is no longer
necessary or desirable, unless the failure to so maintain would
reasonably likely have a Material Adverse Effect.
4 Taxes.
Pay and discharge when due, and cause each Subsidiary
so to do, all taxes, assessments and governmental charges,
license fees and levies upon or with respect to the Company or
such Subsidiary and upon the income, profits and Property of the
Company and its Subsidiaries, which if unpaid, could reasonably
be expected to have a Material Adverse Effect or become a Lien on
the Property of the Company or such Subsidiary not permitted
under paragraph 8.2, unless and to the extent only that such
taxes, assessments, charges, license fees and levies shall be
contested in good faith and by appropriate proceedings diligently
conducted by the Company or such Subsidiary and provided that any
such contested tax, assessment, charge, license, fee or levy
shall not constitute, or create, a Lien on any Property of the
Company or such Subsidiary other than a Permitted Lien.
5 Insurance.
Maintain, and cause each Subsidiary to maintain,
insurance on its Property against such risks and in such amounts
as is customarily maintained by Persons organized for profit
engaged in similar businesses and owning similar Properties in
<PAGE>
the same general areas in which the Company or the relevant
Subsidiary operates, except to the extent of self-insurance
programs of the Company or a Subsidiary covering such risks as
the Company's or such Subsidiary's management, acting in good
faith, determines to be commercially reasonable, including,
without limitation, public liability and workers' compensation
insurance. The Company shall file with the Agent such information
concerning its insurance program and that of its Subsidiaries as
the Agent may reasonably request.
6 Payment of Indebtedness and Performance of Obliga-
tions.
Pay and discharge, and cause each Subsidiary to pay
and discharge, when due all lawful Indebtedness, obligations and
claims for labor, materials and supplies or otherwise which, if
unpaid, would reasonably likely (i) have a Material Adverse Ef-
fect, or (ii) become a Lien upon Property of the Company or such
Subsidiary other than a Permitted Lien.
7 Condition of Property.
At all times, maintain, protect and keep in good
repair, working order and condition (ordinary wear and tear
excepted), and cause each Material Subsidiary so to do, all
Property necessary to the operation of the business of the
Company and its Material Subsidiaries.
8 Observance of Legal Requirements; ERISA.
Observe and comply in all material respects, and cause
each Subsidiary so to do, with all laws (including ERISA),
ordinances, orders, judgments, rules, regulations, certifica-
tions, franchises, permits, licenses, directions and requirements
of all Governmental Bodies, which now or at any time hereafter
may be applicable to the Company and its Subsidiaries, a viola-
tion of which would reasonably likely have a Material Adverse
Effect, except such thereof as shall be contested in good faith
and by appropriate proceedings diligently conducted by the
Company or such Subsidiary.
9 Inspection of Property; Books and Records; Discus-
sions.
Without expense to the Company, upon reasonable
notice, permit representatives of the Agent and each Lender to
visit the offices of the Company and its Subsidiaries, to inspect
and to discuss the business, operations, prospects, licenses,
Property and financial condition of the Company and its
Subsidiaries with the principal officers thereof, provided,
<PAGE>
however, that the Company shall not be required to disclose or
permit the Agent or the Lenders or others to acquire access to
any trade secrets of the Company or its Subsidiaries or any other
process, techniques or information reasonably deemed by the
Company to be proprietary and confidential, and provided further
that Persons other than the Agent or the Lenders who are retained
for purposes of the foregoing inspection rights shall in any
event be limited to such information as is within the scope of
their expertise and engagement. Any financial data or other
information provided pursuant to this paragraph to the Agent or
the Lenders shall be kept in confidence as required under
paragraph 11.16.
10 Licenses, Etc.
Maintain and cause each Subsidiary to maintain, in
full force and effect, all material licenses, copyrights, pat-
ents, permits, applications, reports, authorizations and other
rights, including, without limitation, all rights under the
Cooperation Agreement between Ogden Martin Systems, Inc. and
Martin GmbH fur Umwelt und Energietechnik, as amended, as are
necessary for the conduct of its business a termination of which
would reasonably likely have a Material Adverse Effect.
Tr Shareholders' Equity.
Maintain at all times its Shareholders' Equity in an
amount at least equal to $400,000,000.
8. NEGATIVE COVENANTS
The Company hereby agrees that, so long as this Agreement is
in effect, any Loan or Letter of Credit remains outstanding and
unpaid, or any other amount is owing under any Loan Document to
any Lender or the Agent, the Company shall not, directly or
indirectly:
1 Subsidiary Indebtedness.
Permit Subsidiaries to create, incur or assume any
liability for Indebtedness, except Permitted Subsidiary In-
debtedness, provided that immediately after giving effect to the
incurrence thereof, there shall exist no Default or Event of De-
fault.
2 Liens.
Create, incur, assume or suffer to exist any Lien upon
any of its or its Subsidiaries' Property or assets, whether now
owned or hereafter acquired, securing any Indebtedness or
<PAGE>
obligation, or permit any Subsidiary so to do, except Permitted
Liens.
3 Unencumbered Asset Coverage.
At any time, permit Consolidated total assets not
subject to any Lien, less goodwill and other intangible assets
and unamortized debt issuance costs (all as set forth on a
Consolidated Balance Sheet of the Company prepared in accordance
with GAAP) to be less than 150% of the sum of (i) the unpaid
balance of all unsecured Indebtedness of the Company (other than
Subordinated Indebtedness of the Company, and not including any
Indebtedness of any Subsidiary), whether existing on the
Effective Date or arising thereafter, (ii) the unpaid balance of
all unsecured Indebtedness of Subsidiaries of the Company
existing on the Effective Date as set forth on Schedule 1.1p,
(iii) 133% of the unpaid balance of all unsecured Indebtedness of
Subsidiaries of the Company arising after the Effective Date, and
(iv) Consolidated unsecured Contingent Obligations (it being
understood that, for purposes of this paragraph 8.3, (i) leased
assets representing the capitalization of rentals in accordance
with GAAP shall not be construed to be unencumbered assets, and
(ii) in calculating Consolidated total assets not subject to any
Lien as aforesaid, the Company need not exclude assets subject to
Liens described in clauses (ii) through (v) of the definition of
Permitted Liens unless and until such time as the amount of such
Liens exceeds $25,000,000 in the aggregate, whereupon the
aggregate amount of such Liens shall be deducted in calculating
Consolidated total assets not subject to any Lien as aforesaid).
4 Merger and Acquisition or Sale of Property.
Merge or consolidate with any corporation, or acquire
by purchase or otherwise all or substantially all of the assets
of any Person, or permit any of its Subsidiaries so to do, except
that:
(i) any Subsidiary may be merged into or con-
solidated with any other Subsidiary;
(ii) any Subsidiary may be merged into or con-
solidated with the Company, provided that if the continuing or
surviving corporation shall not be the Company, then (a) the
Subsidiary constituting such continuing or surviving corporation
shall have been directly or indirectly wholly-owned by the
Company immediately prior to such merger or consolidation, (b)
such continuing or surviving corporation shall be a corporation
organized and existing under the laws of the United States of
America, or any State thereof or the District of Columbia, (c)
such continuing or surviving corporation shall have expressly
<PAGE>
assumed the obligations of the Company under this Agreement and
the Notes, as fully and effectually as if such continuing or
surviving corporation had been an original party to this
Agreement and the original issuer of the Notes, and (d)
immediately after such merger or consolidation, and giving effect
thereto, there shall exist no Default or Event of Default;
(iii) the Company or any Subsidiary may acquire
the assets of a Subsidiary, provided that immediately after such
acquisition, and giving effect thereto, there shall exist no
Default or Event of Default; and
(iv) the Company or any Subsidiary may consummate
any Acquisition, provided that (a) immediately after consummation
of such Acquisition, and giving effect thereto, there shall exist
no Default or Event of Default and (b) if the Company shall
consummate such Acquisition, the Company shall be the continuing
or surviving corporation, and if any Subsidiary shall consummate
such Acquisition, the continuing or surviving corporation shall
be a Subsidiary.
5 Consolidated Indebtedness.
Permit its ratio of the sum of (i) Consolidated
Indebtedness plus (ii) Consolidated Contingent Obligations to the
sum of (x) Consolidated Indebtedness plus (y) Consolidated
Contingent Obligations plus (z) the Company's Shareholders'
Equity to be greater than 0.625:1.0 at any time.
6 Sale of Property.
Sell, assign, exchange, lease, transfer or otherwise
dispose of any Property, whether now owned or hereafter acquired,
to any Person, or permit any Subsidiary so to do, except:
(i) dispositions to a Subsidiary for a consid-
eration at least equal to the fair value of the Property disposed
of;
(ii) dispositions by one Subsidiary to the
Company or to another Subsidiary;
(iii) dispositions of the Stock or assets of
a Subsidiary of Projects in which the Company or another
Subsidiary retains a long-term operating interest;
(iv) other dispositions of Stock or assets of the
Company or a Subsidiary for a consideration at least equal
<PAGE>
to the fair value of the Stock or assets so sold or transferred;
provided that, immediately after each such transaction (other
than any disposition permitted under clause (vi) below), the
value of all such transactions under this clause (iv) (determined
at the time it occurs as reflected on the books of the Company
determined in accordance with GAAP) shall not exceed 15% of the
Consolidated total assets of the Company, total assets being
computed after giving effect to the most recent proposed
transaction (other than any disposition permitted under clause
(vi) below) (determined in accordance with GAAP) and there shall
exist no Default or Event of Default;
(v) the payment of dividends and distribution of
Stock of the Company in the ordinary course of business; and
(vi) dispositions of shares of the Stock of
Projects, provided that no disposition permitted pursuant to this
clause (vi) shall result in the Company owning less than 80% of
the Stock of Projects.
7 Compliance with ERISA.
Engage in any "prohibited transaction", as such term
is defined in Section 4975 of the Code or Section 406 of ERISA,
with respect to any Plan, or incur any "accumulated funding
deficiency", as such term is defined in Section 412 of the Code
or Section 302 of ERISA, or terminate, or permit any Subsidiary
or any ERISA Affiliate to terminate, any Plan which would
reasonably likely result in any liability of the Company, any
Subsidiary or any ERISA Affiliate to the PBGC, or permit the
occurrence of any Reportable Event or any other event or
condition which presents a risk of such a termination by the PBGC
of any Plan, or withdraw or effect a partial withdrawal from a
Multiemployer Plan, or permit any Subsidiary or any ERISA Af-
filiate which is an employer under such a Multiemployer Plan so
to do, if any thereof would reasonably likely have a Material
Adverse Effect.
8 Certificate of Incorporation and By-laws.
Amend or otherwise modify its certificate of incor-
poration or by-laws, or permit any Subsidiary so to do, in any
way which would reasonably likely materially and adversely affect
the validity or enforceability of the Loan Documents.
9 Fixed Charge Coverage.
Permit the Fixed Charge Coverage Ratio to be less than
1.50 to 1.00 for any preceding period of four fiscal quarters
(taken as a whole).
<PAGE>
10 Agency Agreement.
Amend the subordination provisions contained in the
Agency Agreement in a manner not satisfactory to the Required
Lenders.
11 Current Ratio.
Permit its ratio of Current Assets to Current Li-
abilities to be less than 1.25:1 at any time.
9. DEFAULT
1 Events of Default.
The following shall each constitute an "Event of
Default" hereunder:
(a) The failure of the Company to pay (i) any in-
stallment of principal payable hereunder or under the Notes when
the same shall be due and payable or (ii) interest payable
hereunder or under the Notes for three days after the same shall
be due and payable or (iii) any fees, Letter of Credit
Commissions or expenses payable hereunder or under the Notes for
five days after the same shall be due and payable; or
(b) The use by the Company of the proceeds of any Loan
in a manner inconsistent with or in violation of paragraph 2.15;
or
(c) The failure of the Company to observe or perform
any covenant or agreement contained in paragraphs 7.3, 7.11, or
paragraph 8; or
(d) The failure of the Company to observe or perform
any other term, covenant, or agreement contained in this
Agreement and such failure shall have continued unremedied for a
period of 30 days after the Company shall have obtained knowledge
thereof; or
(e) Any representation or warranty of the Company (or
of any officer of the Company on its behalf) made in this
Agreement or any other Loan Document or in any certificate,
report, opinion (other than an opinion of counsel) or other
document delivered or to be delivered pursuant to this Agreement
or any other Loan Document, shall prove to have been incorrect or
misleading (whether because of misstatement or omission) in any
material respect when made; or
<PAGE>
(f) Any obligation of the Company or any Subsidiary,
whether as principal, guarantor, surety or other obligor, for the
payment of Indebtedness or Contingent Obligations aggregating in
excess of $25,000,000 shall not be paid when due (including any
grace period for the payment thereof) or shall become or shall be
declared to be due and payable prior to the expressed maturity or
expiration thereof, or any event or circumstance shall occur
which permits the holder or holders of any such obligation or
obligations to declare such obligation due and payable prior to
the expressed maturity thereof; or
(g) The Company or any Material Subsidiary or any
Material Subsidiary Group, shall (i) suspend or discontinue its
business, or (ii) make an assignment for the benefit of
creditors, or (iii) generally not be paying its debts as such
debts become due, or (iv) admit in writing its inability to pay
its debts as they become due, or (v) file a voluntary petition in
bankruptcy, or (vi) become insolvent (however such insolvency
shall be evidenced), or (vii) file any petition or answer seeking
for itself any reorganization, arrangement, composition,
readjustment of debt, liquidation or dissolution or similar
relief under any present or future statute, law or regulation of
any jurisdiction, or (viii) petition or apply to any tribunal for
any receiver, custodian or any trustee for any substantial part
of its Property, or (ix) be the subject of any such proceeding
filed against it which remains undismissed for a period of 60
days, or (x) file any answer admitting or not contesting the
material allegations of any such petition filed against it or any
order, judgment or decree approving such petition in any such
proceeding, or (xi) seek, approve, consent to, or acquiesce in
any such proceeding, or in the appointment of any trustee,
receiver, custodian, liquidator, or fiscal agent for it, or any
substantial part of its Property, or an order is entered ap-
pointing any such trustee, receiver, custodian, liquidator or
fiscal agent and such order remains in effect for 60 days, or
(xii) take any formal action for the purpose of effecting any of
the foregoing or looking to the liquidation or dissolution of the
Company or such Material Subsidiary or Material Subsidiary Group;
or
(h) An order for relief is entered under the United
States bankruptcy laws or any other decree or order is entered by
a court having jurisdiction (i) adjudging the Company or any
Material Subsidiary or any Material Subsidiary Group a bankrupt
or insolvent, or (ii) approving as properly filed a petition
seeking reorganization, liquidation, arrangement, adjustment or
composition of or in respect of the Company or any Material
Subsidiary or any Material Subsidiary Group under the United
States bankruptcy laws or any other applicable Federal or state
law, or (iii) appointing a receiver, liquidator, assignee,
<PAGE>
trustee, custodian, sequestrator, fiscal agent (or other similar
official) of the Company or any Material Subsidiary or any
Material Subsidiary Group or of any substantial part of the
Property thereof, or (iv) ordering the winding up or liquidation
of the affairs of the Company or any Material Subsidiary or any
Material Subsidiary Group, and any such decree or order continues
unstayed and in effect for a period of 60 days; or
(i) Any judgment or decree against the Company or any
Subsidiary in excess of $25,000,000 or judgments or decrees
against the Company and its Subsidiaries aggregating in excess of
$25,000,000 shall remain unpaid, unstayed on appeal, undis-
charged, unbonded or undismissed for a period of 60 days; or
(j) (i) any Reportable Event (as described in Section
4043 of ERISA), which constitutes grounds for the termination of
any Plan or Plans by the PBGC or for the appointment by the
appropriate United States District Court of a trustee to
administer or liquidate any Plan or Plans, shall have occurred
and be continuing 30 days after written or telegraphic or
telephonic notice to such effect shall have been given to the
Company by the Agent; or (ii) a decision shall have been made by
the Board of Directors (or any committee thereof), any authorized
officer or other authorized employee of the Company, or any
trustee or trustees of any Plan or Plans to terminate any Plan or
Plans or to file a termination notice with respect to any Plan or
Plans; or (iii) a trustee shall be appointed by the appropriate
United States District Court to administer any Plan or Plans, or
any Plan or Plans shall be terminated by such trustee; or (iv)
the PBGC shall institute proceedings to terminate any Plan or
Plans or to appoint a trustee to administer any Plan or Plans; or
(v) the Company, any Subsidiary or any ERISA Affiliate shall fail
with respect to any Plan or Plans to meet the minimum funding
standards established in Section 412 of the Code, or shall obtain
a waiver of such minimum funding standards; or (vi) the Company,
any Subsidiary or any ERISA Affiliate shall completely or par-
tially withdraw from any Multiemployer Plan or Plans, or (vii)
the Company, any Subsidiary or any ERISA Affiliate shall make a
decision to cease operations at a facility or facilities where
such cessation would result in a separation from employment of
more than 20% of the total number of employees who are
participants under a Plan; where in the case of any one or more
of the events described in the preceding clauses (i) through
(vii) the aggregate outstanding amount of unfunded vested
liabilities under such Plan if a single employer plan (including
unfunded vested liabilities which arise or might arise as a
result of the termination of or withdrawal from such Plan) or the
allocable portion of such outstanding unfunded vested liabilities
under a Multiemployer Plan shall exceed (either singly or in the
<PAGE>
aggregate in the case of any such liability arising out of one or
more of the events described in the preceding clauses (i) through
(vii) under more than one such Plan) 8% of the Shareholders'
Equity of the Company and shall be determined by the Required
Lenders (which determination shall be final and conclusive) to be
reasonably expected to have a Material Adverse Effect.
9.2 Remedies.
2 Upon the occurrence of an Event of Default or at any time
thereafter during the continuance thereof, (i) if such event is
an Event of Default specified in clauses (g) or (h) above, the
Commitments shall immediately and automatically terminate and the
Loans, and any reimbursement obligations owing or contingently
owing in respect of all outstanding Letters of Credit and drafts
drawn thereunder and acceptances issued in respect thereof, and
all accrued and unpaid interest on any thereof and all other
amounts owing under the Loan Documents shall immediately become
due and payable, and the Company shall forthwith deposit an
amount equal to the Letter of Credit Exposure in a cash
collateral account with and under the exclusive control of the
Agent for the ratable benefit of the Agent and the Lenders, and
the Agent may, and upon the direction of the Required Lenders
shall, exercise any and all remedies and other rights provided
pursuant to the Loan Documents, and (ii) if such event is any
other Event of Default, any or all of the following actions may
be taken: (A) with the consent of the Required Lenders, the Agent
may, and upon the direction of the Required Lenders shall, by
notice to the Company, declare the Commitments to be terminated,
forthwith, whereupon the Commitments shall immediately terminate,
(B) with the consent of the Required Lenders, the Agent may, and
upon the direction of the Required Lenders shall, by notice of
default to the Company, declare the Loans and any reimbursement
obligations owing or contingently owing in respect of the Letters
of Credit and all accrued and unpaid interest on any thereof and
all other amounts owing under the Loan Documents to be due and
payable forthwith, whereupon the same shall immediately become
due and payable, (C) upon the direction of the Required Lenders,
the Agent shall require the Company to forthwith deposit an
amount equal to the Letter of Credit Exposure in a cash
collateral account with and under the exclusive control of the
Agent for the ratable benefit of the Agent and the Lenders and
(D) the Agent may, and upon the direction of the Required Lenders
shall, exercise any and all remedies and other rights provided
pursuant to the Loan Documents or by law. Except as otherwise
provided in this paragraph 9.2(a), presentment, demand, protest
and all other notices of any kind are hereby expressly waived.
The Company hereby further expressly waives and covenants not to
assert any appraisement, valuation, stay, extension, redemption or
<PAGE>
similar laws, now or at any time hereafter in force which might delay,
prevent or otherwise impede the performance or enforcement of any
of the Loan Documents.
3 In the event that the Commitments shall have been termi-
nated or the Notes shall have been declared due and payable
pursuant to the provisions of paragraph 9.2(a), any funds
received by the Agent and the Lenders from or on behalf of the
Company shall be applied by the Agent and the Lenders in liqui-
dation of the Loans and the obligations of the Company hereunder
and under the Notes and the L/Cs in the following manner and
order: (i) first, to reimburse the Agent and the Lenders for any
expenses due pursuant to the provisions of paragraph 11.5; (ii)
second, to the payment of accrued and unpaid Facility Fees,
Letter of Credit Commissions and all other fees, expenses and
amounts due hereunder (other than principal and interest on the
Notes); (iii) third, to the payment of interest due on the Notes;
(iv) fourth, to the payment of principal outstanding on the
Notes; (v) fifth, to the payment of all obligations under and
with respect to the Letters of Credit or, to the extent such
obligations are contingent, to prepay or provide cash collateral
in respect thereof; and (vi) sixth, to the payment of any other
amounts owing to the Agent and the Lenders under any of the Loan
Documents. Any funds remaining after the foregoing applications
shall be paid over to the Company.
10. THE AGENT
1 Appointment.
Each Lender hereby irrevocably designates and appoints
BNY as the Agent of such Lender under the Loan Documents and each
such Lender hereby irrevocably authorizes BNY, as the Agent for
such Lender, to take such action on its behalf under the
provisions of the Loan Documents and to exercise such powers and
perform such duties as are expressly delegated to the Agent by
the terms of the Loan Documents, together with such other powers
as are reasonably incidental thereto. Notwithstanding any
provision to the contrary elsewhere in this Agreement or any of
the other Loan Documents, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein or
therein, or any fiduciary relationship with any Lender, and no
implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into the Loan Documents
or otherwise exist against the Agent.
<PAGE>
2 Delegation of Duties.
The Agent may execute any of its duties under the Loan
Documents by or through agents or attorneys-in-fact and shall be
entitled to rely upon the advice of counsel concerning all
matters pertaining to such duties.
3 Exculpatory Provisions.
Neither the Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates shall be (i)
liable for any action lawfully taken or omitted to be taken by it
or such Person under or in connection with the Loan Documents
(except the Agent for its own gross negligence or willful
misconduct), or (ii) responsible in any manner to any of the
Lenders for any recitals, statements, representations or warran-
ties made by the Company or any officer thereof contained in the
Loan Documents or in any certificate, report, statement or other
document referred to or provided for in, or received by the Agent
under or in connection with, the Loan Documents or for the value,
validity, effectiveness, genuineness, enforceability or suf-
ficiency of any of the Loan Documents or for any failure of any
party thereto, or any other Person to perform its obligations
hereunder or thereunder. The Agent shall not be under any obliga-
tion to any Lender to ascertain or to inquire as to the observ-
ance or performance of any of the agreements contained in, or
conditions of, the Loan Documents, or to inspect the properties,
books or records of the Company or any of it Subsidiaries. The
Agent shall not be under any liability or responsibility
whatsoever, as Agent, to the Company or any other Person as a
consequence of any failure or delay in performance, or any
breach, by any Lender of any of its obligations under any of the
Loan Documents.
4 Reliance by Agent.
The Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, opinion, letter, telegram,
telecopy, telex or teletype message, statement, order or other
document or conversation believed by it to be genuine and correct
and to have been signed, sent or made by the proper Person or
Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Company), in-
dependent accountants and other experts selected by the Agent.
The Agent may treat each Lender, or the Person designated in the
last notice filed with it under this paragraph, as the holder of
all of the interests of such Lender in its Loans and in its Note
until written notice of transfer, signed by such Lender (or the
Person designated in the last notice filed with the Agent) and
<PAGE>
by the Person designated in such written notice of transfer, in
form and substance satisfactory to the Agent, shall have been
filed with the Agent. The Agent shall not be under any duty to
examine or pass upon the validity, effectiveness or genuineness
of the Loan Documents or any instrument, document or communica-
tion furnished pursuant thereto or in connection therewith, and
the Agent shall be entitled to assume that the same are valid,
effective and genuine, have been signed or sent by the proper
parties and are what they purport to be. The Agent shall be fully
justified in failing or refusing to take any action under the
Loan Documents unless it shall first receive such advice or
concurrence of the Required Lenders as it deems appropriate. The
Agent shall in all cases be fully protected in acting, or in
refraining from acting, under the Loan Documents in accordance
with a request of the Required Lenders, and such request and any
action taken or failure to act pursuant thereto shall be binding
upon all the Lenders and all future holders of the Notes.
5 Notice of Default.
The Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default
hereunder unless the Agent has received written notice thereof
from a Lender or the Company. In the event that the Agent re-
ceives such a notice, the Agent shall promptly give notice
thereof to the Lenders. The Agent shall take such action with
respect to such Default or Event of Default as shall be rea-
sonably directed by the Required Lenders; provided, however, that
unless and until the Agent shall have received such directions,
the Agent may (but shall not be obligated to) take such action,
or refrain from taking such action, with respect to such Default
or Event of Default as it shall deem to be in the best interests
of the Lenders.
6 Non-Reliance on Agent and Other Lenders.
Each Lender expressly acknowledges that neither the
Agent nor any of its respective officers, directors, employees,
agents, attorneys-in-fact or affiliates has made any rep-
resentations or warranties to it and that no act by the Agent
hereinafter, including any review of the affairs of the Company
or any Subsidiaries thereof, shall be deemed to constitute any
representation or warranty by the Agent to any Lender. Each
Lender represents to the Agent that it has, independently and
without reliance upon the Agent or any other Lender, and based on
such documents and information as it has deemed appropriate, made
its own evaluation of and investigation into the business, operations,
Property, financial and other condition and creditworthiness
of the Company and its Subsidiaries and made its own
decision to enter into this Agreement. Each Lender also
<PAGE>
represents that it will, independently and without reliance upon
the Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to
make its own credit analysis, evaluations and decisions in taking
or not taking action under this Agreement or any of the Loan
Documents, and to make such investigation as it deems necessary
to inform itself as to the business, operations, Property, finan-
cial and other condition and creditworthiness of the Company and
its Subsidiaries. Each Lender acknowledges that a copy of this
Agreement and all exhibits and schedules hereto has been made
available to it and its individual legal counsel for review, and
each Lender acknowledges that it is satisfied with the form and
substance of this Agreement and the exhibits and schedules
hereto. Except for notices, reports and other documents expressly
required to be furnished to the Lenders by the Agent hereunder,
the Agent shall not have any duty or responsibility to provide
any Lender with any credit or other information concerning the
business, operations, Property, financial and other condition or
creditworthiness of the Company or its Subsidiaries which may
come into the possession of the Agent or any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates.
7 Indemnification.
Each Lender agrees to indemnify the Agent in its
capacity as such (to the extent not promptly reimbursed by the
Company and without limiting the obligation of the Company to do
so), ratably according to its Commitment Percentage from and
against any and all liabilities, obligations, claims, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever, including, without
limitation, any amounts paid to the Lenders (through the Agent)
by the Company pursuant to the terms hereof, that are
subsequently rescinded or avoided, or must otherwise be restored
or returned which may at any time (including, without limitation,
at any time following the payment of the Notes) be imposed on,
incurred by or asserted against the Agent in any way relating to
or arising out of this Agreement, the other Loan Documents or any
other documents contemplated by or referred to herein or the
transactions contemplated hereby or any action taken or omitted
to be taken by the Agent under or in connection with any of the
foregoing; provided, however, that no Lender shall be liable for
the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements to the extent resulting from the gross
negligence or willful misconduct of the Agent. The agreements in
this paragraph shall survive the payment of the Notes and all
other amounts payable hereunder.
<PAGE>
8 Agent in Its Individual Capacity.
BNY and its respective affiliates may make loans to,
accept deposits from, issue letters of credit for the account of
and generally engage in any kind of business with, the Company
and its Subsidiaries as though BNY was not Agent hereunder. With
respect to the Commitment made or renewed by BNY and any Note
issued to BNY, BNY shall have the same rights and powers under
this Agreement as any Lender and may exercise the same as though
it was not the Agent, and the terms "Lender" and "Lenders" shall
in each case include BNY.
9 Successor Agent.
If at any time the Agent deems it advisable, in its
sole discretion, it may submit to each of the Lenders a written
notification of its resignation as Agent under the Loan
Documents, such resignation to be effective on the thirtieth day
after the date of such notice. Upon any such resignation, the
Required Lenders shall have the right, with the prior written
consent of the Company (which consent shall not be required if at
such time a Default or Event of Default exists), to appoint from
among the Lenders a successor Agent. If no successor Agent shall
have been so appointed by the Required Lenders and accepted such
appointment within 30 days after the retiring Agent's giving of
notice of resignation, then the retiring Agent may with the
consent of the Company (which consent shall not be unreasonably
withheld and shall not be required if at such time a Default or
Event of Default exists), on behalf of the Lenders, appoint a
successor Agent, which successor Agent shall be a commercial bank
organized or licensed under the laws of the United States of
America or of any State thereof and having a combined capital and
surplus of at least $500,000,000. At any time when no Default or
Event of Default exists, the Company may replace the Agent with
another Lender with the consent of the Required Lenders, such
replacement to take effect on the thirtieth day after notice to
the Agent. Upon the acceptance of any appointment as Agent
hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Agent, and the
retiring Agent's rights, powers, privileges and duties as Agent
under the Loan Documents shall be terminated. The Company and
the Lenders shall execute such documents as shall be necessary to
effect such appointment. After any retiring Agent's resignation
or removal hereunder as Agent, the provisions of this paragraph
10.9 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Agent under the Loan
Documents. If at any time hereunder there shall not be a duly
appointed and acting Agent, the Company agrees to make each
payment due under the Loan Documents directly to the Lenders
<PAGE>
entitled thereto during such time.
10 Concerning Exhibit A.
The Agent is authorized and directed to amend Exhibit
A and promptly distribute a copy thereof to the Company and the
Lenders to reflect the Commitment of each Lender as a result of
any changes therein arising under paragraphs 2.5 (Reduction of
Commitments), 2.18 (Extension of Termination Date), 2.19
(Substitute Lender) and 11.7 (Successors and Assigns).
11. OTHER PROVISIONS.
1 Amendments and Waivers.
With the written consent of the Required Lenders, the
Agent and the Company may from time to time enter into written
amendments, supplements or modifications hereof and, with the
consent of the Required Lenders, the Agent on behalf of the
Lenders may execute and deliver to any such parties a written
instrument waiving or consenting to the departure from, on such
terms and conditions as the Agent may specify in such instrument,
any of the requirements of the Loan Documents or any Default or
Event of Default and its consequences, or releasing or
discharging any guarantor from its obligations under a guarantee;
provided, however, that no such amendment, supplement,
modification, waiver or consent shall (i) increase the Commitment
of any Lender (but the Commitment Percentage of a Consenting
Lender may be reallocated as provided in paragraph 2.18(b)), (ii)
extend the maturity date of any Note or extend the Termination
Date except as provided in paragraph 2.18, (iii) decrease the
rate of interest of, extend the time or manner of payment of, or
increase or forgive the principal amount of any Note, (iv)
decrease the Facility Fee or the Letter of Credit commissions set
forth in paragraph 2.23, or extend the time of payment thereof,
or (v) change the provisions of this paragraph 11.1 without the
consent of all of the Lenders; and provided further that no such
amendment, supplement, modification, waiver or consent shall
amend, modify or waive any provision of (a) Paragraph 10 or
otherwise change any of the rights or obligations of the Agent
under the Loan Documents without the written consent of the Agent
or (b) paragraphs 2.20, 2.21, 2.22 or 2.23 or otherwise change
any of the rights or obligations of the L/C Issuing Bank
hereunder or under the other Loan Documents with respect to the
Letters of Credit without the written consent of the L/C Issuing
Bank. Any such amendment, supplement, modification, waiver or
consent shall apply equally to each of the Lenders and shall be
<PAGE>
binding upon the parties to the applicable agreement, the Lenders,
the Agent and all future holders of the Notes. In the case of any
waiver, the parties to the applicable agreement, the Lenders and
the Agent shall be restored to their former position and rights
hereunder and under the Notes and the Loan Documents, and any
Default or Event of Default waived shall not extend to any subsequent
or other Default or Event of Default, or impair any right consequent
thereon.
2 Notices.
All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing
and, unless otherwise expressly provided herein, shall be deemed
to have been duly given or made when delivered by hand, or when
deposited in the mail, first-class postage prepaid, or, in the
case of telecopier notice, when sent, addressed as follows in the
case of the Company and the Agent, and as set forth in Schedule
1.1 in the case of each of the Lenders, or to such other
addresses as to which the Agent may be hereafter notified by the
respective parties hereto or any future holders of the Notes:
The Company:
OGDEN CORPORATION
Two Pennsylvania Plaza
New York, New York 10121
Attention: Philip G. Husby,
Senior Vice President and
Chief Financial Officer
Telephone: (212) 868-6040
Telecopy: (212) 868-5714
The Agent:
The Bank of New York
Agency Function Administration
One Wall Street
New York, New York 10286
Attention: Ralph Matragrano,
Vice President
Telephone: (212) 635-4690
Telecopy: (212) 635-8852,
<PAGE>
except that any notice, request or demand by the Company to or
upon the Agent or the Lenders pursuant to paragraphs 2.2, 2.3,
2.5, 2.6 or 2.7 shall not be effective until received. Any party
to a Loan Document may rely on signatures of the parties thereto
which are transmitted by telecopier or other electronic means as
fully as if originally signed.
3 No Waiver; Cumulative Remedies.
No failure to exercise and no delay in exercising, on
the part of the Agent or any Lender, any right, remedy, power or
privilege under any Loan Document shall operate as a waiver
thereof; nor shall any single or partial exercise of any right,
remedy, power or privilege under any Loan Document preclude any
other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers
and privileges under the Loan Documents are cumulative and not
exclusive of any rights, remedies, powers and privileges provided
by law.
4 Survival of Representations and Warranties.
All representations and warranties made hereunder and
in any document, certificate or statement delivered pursuant
hereto or in connection herewith shall survive the execution and
delivery of this Agreement, the Notes and the other Loan
Documents.
5 Payment of Expenses and Taxes.
The Company agrees, within 30 days after presentation
of a statement or invoice therefor, and whether any Loan is made,
(a) to pay or reimburse the Agent for all reasonable out-of-
pocket costs and expenses, incurred in connection with the
development, preparation, syndication and execution of, and any
requested amendment, supplement or modification to, or waiver or
consent under, the Loan Documents, and any documents prepared in
connection therewith and the consummation of the transactions
contemplated thereby, and the preparation of any new Notes
required to be executed and delivered by the Company hereunder,
including, without limitation, the reasonable fees and
disbursements of counsel, (b) to pay or reimburse the Agent and
each Lender for its costs and expenses incurred in connection
with the enforcement of any rights under the Loan Documents and
the Notes, including, without limitation, reasonable fees and
disbursements of their respective counsel, (c) to pay, indemnify,
and hold each Lender and the Agent harmless from, any and all
recording and filing fees and any and all liabilities with
respect to, or resulting from any delay in paying, stamp, excise
and other taxes, if any, which may be payable or determined to be
<PAGE>
payable in connection with the execution and delivery of, or
consummation of any of the transactions contemplated by, or any
amendment, supplement or modification of, or any waiver or consent
under or in respect of, the Loan Documents and any such other
documents, and (d) to pay, indemnify and hold each Lender and the
Agent and each of their respective officers, directors and
employees harmless from and against any and all other liabilities,
obligations, claims, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature
whatsoever that may be or becomes payable to any third party
(including, without limitation, reasonable counsel fees and
disbursements) with respect to the execution, delivery, enforcement
and performance of the Loan Documents or the use of the proceeds of
the Loans (all the foregoing, collectively, the "Indemnified
Liabilities") and, if and to the extent that the foregoing indemnity
may be unenforceable for any reason, the Company agrees to make the
maximum payment permitted under applicable law; provided, how-
ever, that the Company shall have no obligation hereunder to pay
Indemnified Liabilities to the Agent or any Lender arising from
the gross negligence or willful misconduct of the Agent or such
Lender. The agreements in this paragraph shall survive the
termination of the Commitments and the payment of the Notes, and
all other amounts payable hereunder.
6 Lending Offices.
Each Lender shall have the right at any time and from
time to time to transfer any Loan to a different office, provided
that such Lender shall promptly notify the Agent and the Company
of any such change of office. Such office shall thereon become
such Lender's Domestic Lending Office or Eurodollar Lending
Office, as the case may be.
7 Successors and Assigns.
(a) This Agreement and the Notes shall be binding upon
and inure to the benefit of the Company, the Lenders, the Agent,
all future holders of the Notes and their respective successors
and assigns, except that the Company may not assign, delegate or
transfer any of its rights or obligations under the Loan
Documents without the prior written consent of the Agent and each
Lender.
(b) Each Lender shall have the right at any time, upon
written notice to the Agent of its intent to do so, to sell,
assign, transfer or negotiate, on a pro rata basis, a constant,
and not a varying, percentage of all of such Lender's rights and
obligations with respect to its Loans, its Commitment, its
obligations with respect to the Letters of
<PAGE>
Credit and its Notes (x) upon written notice to the Company, the
L/C Issuing Bank and the Agent, to one or more of the other
Lenders (or to Affiliates of such Lender or such other Lenders)
or (y) with the prior written consent of the Company (which
consent shall not be unreasonably withheld and shall not be
required if, at the time, an Event of Default shall exist), the
L/C Issuing Bank and the Agent, to any other Eligible Assignee,
and with respect only to clause (y) above, provided that (i) such
Lender shall continue at all times to hold at least 50% of such
Lender's original Commitment, (ii) each such sale, assignment,
transfer or negotiation shall be in a minimum amount of
$5,000,000 and (iii) there shall be paid to the Agent an as-
signment fee (the "Assignment Fee") of $2,000 payable to the
Agent. For each assignment, the parties to such assignment shall
execute and deliver to the Agent for its acceptance and
recording, an assignment and acceptance agreement in the form of
Exhibit H (each, an "Assignment and Acceptance Agreement"). Upon
such execution, delivery, acceptance and recording by the Agent,
from and after the effective date specified in such Assignment
and Acceptance Agreement and agreed to by the Agent, the assignee
thereunder shall be a party hereto and, to the extent provided in
such Assignment and Acceptance Agreement, the assignor Lender
thereunder shall be released from its obligations under this
Agreement. The Company agrees upon written request of the Agent
to execute and deliver (i) to such assignee, a Note, dated the
effective date of such Assignment and Acceptance Agreement, in an
aggregate principal amount equal to the Loans assigned to, and
Commitment assumed by, such assignee and (ii) to such assignor
Lender, a Note, dated the effective date of such Assignment and
Acceptance Agreement, in an aggregate principal amount equal to
the balance of such assignor Lender's Loans and Commitment.
Notwithstanding anything to the contrary contained in this
subsection (b), each Lender may at any time, upon 30 days' prior
written notice to the Agent, the L/C Issuing Bank and the
Company, sell, assign, transfer or negotiate all or any part of
its Loans, its Note or its Commitment to any of the other Lenders
or any other Eligible Assignee whose long-term senior credit
rating is at least BBB- or the equivalent, if, but only if,
concurrently therewith or prior thereto any Person or two or more
Persons acting in concert shall have acquired beneficial
ownership (within the meaning of Rule 13d-3 of the Securities and
Exchange Commission under the Securities Exchange Act) of a
"controlling interest" (as defined below) of the outstanding
shares of voting stock of the Company pursuant to one or more
transactions not approved by at least a majority of the
individuals, in their capacities as directors, who served as
directors of the Company on the date one year prior to the date
of the first acquisition of voting Stock leading to such
acquisition, provided, however, that a director who was not a
<PAGE>
director at the beginning of such period shall be deemed to have
satisfied the one year requirement if such director was elected
by, or on the recommendation of, at least a majority of the
directors who were directors at the beginning of such period
(either actually or by prior operation of this provision). For
purposes of this paragraph, a "controlling interest" shall mean
either (1) a majority of the outstanding shares of voting Stock
of the Company or (2) such lesser amount of shares of voting
Stock that, in practice, enables such Person or Persons to
replace a majority of the board of directors of the Company
during any 12 month period.
(c) Each Lender may grant participations in all or any
part of its Loans, its Note, its obligations with respect to the
Letters of Credit or its Commitment to the parent, any Affiliate,
any wholly-owned Subsidiary or any Branch of such Lender and to
one or more banks, insurance companies, financial institutions,
pension funds or mutual funds, provided that (i) such Lender's
obligations under this Agreement shall remain unchanged, (ii)
such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations, (iii) the
Company, the Agent and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement, (iv) such
Lender shall give prior written notice to the Agent of the
identity and amount of such participation, (v) no
sub-participations shall be permitted and (vi) the rights of any
holder of any such participation shall be limited to the right to
consent to any action taken or omitted to be taken by such Lender
under this Agreement which would (a) increase the Commitment of
such Lender, (b) reduce the Facility Fee, the Letter of Credit
commissions set forth in paragraph 2.23 or the interest rate
payable on the Notes, or (c) extend the maturity date of the
Notes or extend the Termination Date except as provided in
paragraph 2.18, or postpone the payment or scheduled due dates
for payments of principal, interest, Facility Fee and Letter of
Credit commissions. The Company hereby acknowledges and agrees
that any such participant shall for purposes of paragraphs 2.11,
2.12, 2.13, 2.16 and 11.5, be deemed to be a "Lender", provided,
that in no event shall the Company be liable for any amounts
under said paragraphs in excess of the amounts for which it would
be liable but for any participation.
(d) No Lender shall, as between and among the Company,
the Agent and such Lender, be relieved of any of its obligations
hereunder as a result of any sale, assignment, transfer or ne-
gotiation of, or granting of participations in, all or any part
of its Loans, its Commitment or its Note, except that a Lender
shall be relieved of its obligations to the extent of any such
sale, assignment, transfer, or negotiation of all or
<PAGE>
any part of its Loans, its Commitment or its Note pursuant to
paragraph (b) above.
(e) Notwithstanding anything to the contrary contained
in this paragraph 11.7, any Lender may at any time or from time
to time assign all or any portion of its rights under this
Agreement with respect to its Loans and its Note to a Federal
Reserve Bank, provided that no such assignment shall release such
Lender from its obligations hereunder.
8 Counterparts.
Each Loan Document (other than the Notes) may be
executed by one or more of the parties thereto on any number of
separate counterparts and all of said counterparts taken together
shall be deemed to constitute one and the same document. It shall
not be necessary in making proof of any Loan Document to produce
or account for more than one counterpart signed by the party to
be charged. A telecopied counterpart of any Loan Document or of
any document evidencing, and of any an amendment, modification,
consent or waiver to or of any Loan Document, shall be deemed to
be an originally executed counterpart. A set of the copies of the
Loan Documents signed by all the parties thereto shall be
deposited with each of the Company and the Agent. Any party to a
Loan Document may rely upon the signatures of any other party
thereto which are transmitted by telecopier or other electronic
means to the same extent as if originally signed.
9 Lenders' Representations.
Each Lender represents to the Agent and the Company
that, in acquiring its Notes hereunder, it is acquiring same for
its own account for the purpose of investment and not with a view
to selling the same in connection with any distribution thereof,
provided that the disposition of each Lender's own Property shall
at all times be and remain within its control.
10 Governing Law.
This Agreement and the Notes and the rights and
obligations of the parties hereunder and thereunder shall be
governed by, and construed and interpreted in accordance with,
the laws of the State of New York, without regard to principles
of conflict of laws.
11 Headings, Plurals.
convenience only and shall not be construed to be a part hereof
Paragraph headings have been inserted herein for
<PAGE>
or thereof. Unless the context otherwise requires, words in the
singular number include the plural, and words in the plural
include the singular.
12 Severability.
Every provision of the Loan Documents is intended to be
severable, and if any term or provision thereof shall be invalid,
illegal or unenforceable for any reason, the validity, legality
and enforceability of the remaining provisions thereof shall not
be affected or impaired thereby, and any invalidity, illegality
or unenforceability in any jurisdiction shall not affect the
validity, legality or enforceability of any such term or
provision in any other jurisdiction.
13 Integration.
This Agreement and the Notes embody the entire
agreement and understanding among the Company, the Agent and the
Lenders with respect to the subject matter hereof and thereof and
supersede all prior agreements and understandings among the
Company, the Agent and the Lenders with respect to the subject
matter hereof and thereof.
14 Consent to Jurisdiction.
The Company, the Agent and the Lenders hereby ir-
revocably submit to the jurisdiction of any New York State or
Federal Court sitting in the City of New York over any suit,
action or proceeding arising out of or relating to the Loan
Documents. The Company, the Agent and the Lenders hereby ir-
revocably waive, to the fullest extent permitted by law, any
objection which any thereof may now or hereafter have to the
laying of the venue of any such suit, action or proceeding
brought in such a court and any claim that any such suit, action
or proceeding brought in such a court has been brought in an
inconvenient forum. The Company, Agent and the Lenders hereby
agree that a final judgment in any such suit, action or
proceeding brought in such a court, after all appropriate ap-
peals, shall be conclusive and binding upon each thereof.
15 WAIVER OF TRIAL BY JURY.
THE AGENT, THE LENDERS, AND THE COMPANY HEREBY KNOW-
INGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT THEY MAY
<PAGE>
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION ARISING OUT OF,
UNDER OR IN CONNECTION WITH THE LOAN DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED THEREIN. FURTHER, THE COMPANY HEREBY CERTIFIES THAT NO
REPRESENTATIVE OR AGENT OF THE AGENT OR THE LENDERS, OR COUNSEL TO
THE AGENT OR THE LENDERS, HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT THE AGENT OR THE LENDERS WOULD NOT, IN THE EVENT OF SUCH
LITIGATION, SEEK TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL
PROVISION. THE COMPANY ACKNOWLEDGES THAT THE AGENT AND THE LENDERS
HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, INTER ALIA, THE
PROVISIONS OF THIS PARAGRAPH.
16 Confidentiality.
The Agent and the Lenders agree to keep confidential all
non-public information pertaining to the Company and its
Subsidiaries and its Affiliates which is provided to any of them by
any of such parties, and shall not disclose and shall take all
appropriate action to restrict access to such information to any
Person except (i) to the extent such information is public when
received by the Agent or the Lenders or becomes public thereafter
due to the act or omission of any Person other than the Agent or the
Lenders, (ii) to the extent such information is independently
obtained from a source other than the Company, its Subsidiaries or
its Affiliates and such information from such source is not, to the
knowledge of the Agent or the Lender, subject to an obligation of
confidentiality or, if such information is subject to an obligation
of confidentiality, that disclosure of such information is per-
mitted, (iii) to counsel, examiners, auditors, accountants or other
professional advisors retained by the Agent or any Lender or to Af-
filiates of the same, provided that such Affiliates agree to keep
such information confidential as set forth herein, (iv) to the
extent necessary in connection with any litigation or the
enforcement of the rights of the Agent or any Lender hereunder or
under the Notes or as provided by law, (v) to the extent required by
any applicable statute, rule or regulation or court order
(including, without limitation, by way of subpoena) or pursuant to
the request of Governmental Body having jurisdiction over the Agent
or any Lender, (vi) to the extent disclosure to other financial in-
stitutions is appropriate in connection with any proposed or actual
assignment or grant of a participation by any Lender of interest
hereunder or under the Notes to such other financial institutions
(who will in turn agree to maintain confidentiality as if they were
parties to this Agreement), or (vii) to the extent such information
<PAGE>
is disclosed with prior consent of the Company.
1 Acknowledgments.
The Company acknowledges that (a) it has been advised by
counsel in the negotiation, execution and delivery of the Loan
Documents, (b) by virtue of the Loan Documents, neither the Agent
nor any Lender has any fiduciary relationship to the Company, and
the relationship between the Agent and the Lenders, on the one
hand, and the Company, on the other hand, is solely that of debtor
and creditor, and (c) by virtue of the Loan Documents, no joint
venture exists among the Lenders or among the Company and the
Lenders.
The parties hereto have caused this Agreement to be duly
executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
OGDEN CORPORATION
By: ________________________
Title: _____________________
THE BANK OF NEW YORK,
Individually and as Agent
By: ________________________
Title: _____________________
NATIONAL WESTMINSTER BANK, PLC,
New York Branch
By: ________________________
Title: _____________________
<PAGE>
NATIONAL WESTMINSTER BANK, PLC
Nassau Branch
By:
Title:
SWISS BANK CORPORATION
New York Branch
By: ________________________
Title: _____________________
By: ________________________
Title: _____________________
UNION BANK OF SWITZERLAND,
New York Branch
By: ________________________
Title: _____________________
By: ________________________
Title: _____________________
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By: ________________________
Title: _____________________
<PAGE>
CHEMICAL BANK
By: ________________________
Title: _____________________
NATIONSBANK OF VIRGINIA, N.A.
By: ________________________
Title: _____________________
DEUTSCHE BANK AG
New York and/or Cayman Islands
Branches
By: ________________________
Title: _____________________
By: ________________________
Title: _____________________
THE MITSUBISHI BANK, LIMITED
By: ________________________
Title: _____________________
EXHIBIT 10.8(o)
CONFIDENTIAL AND LEGALLY PRIVILEGED
SCOTT G. MACKIN
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made and entered into as of the 1st day of January,
1994, by and between OGDEN PROJECTS, INC., a Delaware corporation maintaining
its principal office at 40 Lane Road, Fairfield, New Jersey (the "Company")
and Scott G. Mackin, now residing at 19 Hall Road, Chatham, New Jersey 07928
(the "Employee").
WITNESSETH:
WHEREAS, the Employee is currently serving as President and Chief
Operating Officer of the Company, a position he has held since January 1991;
and
WHEREAS, the employment agreement under which the Employee is currently
employed is a three (3) year agreement entered into on June 1, 1990 and which
on December 31, 1993 began to run on a year to year basis (the "Old
Agreement") and which incorrectly reflects the Employee's title as Executive
Vice President, General Counsel, Secretary and Managing Director; and
WHEREAS, the Company and Employee desires to terminate the Old Agreement
and enter into a new employment agreement with terms and conditions similar
to the Old Agreement; and
WHEREAS, the Company desires to ensure that the Employee will continue
to be available to provide services in the capacity of President and Chief
Operating Officer in the future, which services are significant to the
Company's long-range prospects and the long-range prospects of the Company's
subsidiaries (the Company and its subsidiaries are hereinafter referred to as
the "OPI Group"); and
WHEREAS, to induce the Employee to continue to provide such services,
the Company is offering to provide the Employee with the compensation,
benefits and security provided for in this Agreement.
NOW, THEREFORE, in consideration of the covenants and agreements herein
contained, the parties hereto agree as follows:
1. EMPLOYMENT/CAPACITY/TERM.
The Company agrees to and does hereby continue to employ the Employee,
and the Employee agrees to and does hereby continue in the employ of the
Company upon the terms and conditions set forth in this Agreement. Such
employment shall be in an executive capacity as President and Chief Operating
Officer. Such employment shall commence on January 1, 1994 and shall
continue through December 31, 1996, and from year to year thereafter subject
to the right of the Employee or the Company to terminate such employment as
of December 31, 1994, or any subsequent December 31, by written notice given
to the other party at least sixty (60) days prior to such termination date
stating an intention to so terminate such employment. Termination by the
Company, in accordance with the provisions of the preceding sentence, shall
obligate the Company to make a severance payment as provided in Paragraph 9.
hereof. Otherwise, termination by either party, in accordance with the
provisions of the above referenced sentence, shall not require a statement of
the reason or cause for such termination and shall not be deemed a breach or
violation of this Agreement by the party giving such notice. As used in this
Agreement, the phrase "term of this Agreement" shall be deemed to include the
period subsequent to the date hereof and prior to termination of this
Agreement; however, such phrase shall not be construed as limiting the
enforceability by either party of any rights which survive termination of
this Agreement.
2. TIME AND EFFORT/ABSENCES.
During the term of this Agreement, the Employee shall devote his entire
time and attention during normal business hours to the business of the
Company and the OPI Group, subject to the supervision of the Board of
Directors of the Company, and he shall not engage in any other business
activity whether or not such business activity is pursued for gain, profit,
or other pecuniary advantage, but this restriction shall not be construed to
restrict the Employee (i) from performing services as a member of the Board
of Directors, Board of Trustee or the like of any non-profit entity for which
the Employee receives no compensation, provided that, such services do not
unreasonably interfere with the ability of the Employee to perform the
services and discharge the responsibilities required of him under this
Agreement, and (ii) from investing his assets in such form or manner as will
not require any services on the part of the Employee in the operation of the
business of the entity in which such investments are made. The Employee
shall be excused from rendering his services during reasonable vacation
periods and during other reasonable temporary absences as authorized from
time to time by the Board of Directors of the Company. At the date hereof,
the principal office of the Company is located in Fairfield, New Jersey,
considered to be a New York suburb and part of the metropolitan New York
area. It is understood that the Employee will not be required to relocate
from the metropolitan New York area to discharge his responsibilities under
this Agreement.
3. CORPORATE OFFICES.
If elected, the Employee will serve, without additional compensation, as
an officer and director (or in either capacity) of the Company and the OPI
Group.
4. SALARY/BONUS/OTHER BENEFITS.
In consideration of the services and duties to be rendered and performed
by the Employee during the term of this Agreement, the Company agrees to pay
and provide for the Employee the compensation and benefits described below:
(a) Consistent with the Company's policy concerning its
executives, the Executive's annual salary shall be reviewed by the Board of
Directors or an appropriate committee of the Board of Directors of the
Company on a calendar year basis, with any increases therein being within the
sole discretion of the Board of Directors or an appropriate committee of the
Board of Directors and shall become effective on March 1st of the following
year. During January and February of 1994, the Employee will be paid on the
basis of his 1993 salary. Commencing March 1, 1994, the minimum annual
salary payable to the Executive under this Agreement shall be in the amount
of Four Hundred Thousand and 00/100 Dollars ($400,000), payable in equal
monthly or bi-weekly installments.
(b) An annual incentive bonus in such amount as may from time to
time be fixed by the Board of Directors or an appropriate committee of the
Board of Directors of the Company, provided that in determining the annual
incentive bonus the Board of Directors or appropriate Committee shall utilize
standards which are reasonably applied to the Employee and other executives
<PAGE>of the Company who furnish services of comparable significance, on a
non-discriminatory basis.
(c) Other Benefits. It is intended that the Company shall
continue to provide the Employee with benefits at least as favorable as
benefits provided on behalf of other executives of the Company and the OPI
Group who furnish services of comparable significance, as they may exist from
time to time. Such benefits presently include Group Life Insurance, Group
Health Insurance, Automobile Allowance, and Pension and Profit Sharing Plans.
Except as otherwise provided herein, any such participation shall be in
accordance with the provisions of such plans and nothing contained in this
Agreement is intended to or shall be deemed to affect adversely any of the
Employee's rights as a participant under any such plan. Nothing herein shall
prevent the Company from modifying or discontinuing any benefit plan on a
consistent and non-discriminatory basis applicable to all such executives.
5. EXPENSE.
The Employee shall be reimbursed for out-of-pocket expenses incurred
from time to time on behalf of the Company and the OPI Group or in the
performance of his duties under this Agreement, upon the presentation of such
supporting documents and forms as the Company shall reasonably request.
6. DISABILITY/DISABILITY BENEFIT.
In the event that the Employee is incapable because of physical or
mental illness of rendering services of the character contemplated hereby,
for a period of six (6) consecutive months, the Board of Directors of the
Company may determine that the Employee has become disabled. In the event of
such a determination of disability, the Company shall have the continuing
right and option while such disability continues to terminate this Agreement
by notice in writing to the Employee, effective thirty (30) days after such
notice of termination is so given, unless, within such thirty (30) day notice
period, the Employee resumes rendering full-time services of the character
contemplated hereby. The incapacity due to physical or mental illness to
render the services of the character contemplated hereby, shall not
constitute a breach of this Agreement by the Employee. If this Agreement is
terminated by the Company as a result of a determination of disability, as
aforesaid, the Company shall be obligated to continue the salary and benefits
of the Employee as provided in Paragraph 4 for a period equal to the greater
of (a) twelve (12) months, or (b) such longer period as may be determined by
the Board of Directors of the Company, in each case reduced by any disability
insurance benefits provided for the benefit of the Employee at the expense of
the Company.
7. DEATH/DEATH BENEFIT.
In the event of the death of the Employee during the term of this
Agreement, this Agreement shall terminate and the Employee's salary shall
continue to be paid to his designated beneficiary or, if none, to his
personal representative, through the last day of the month in which such
death occurs. In addition, the Employee, his personal representative(s)
and/or his beneficiaries will be entitled to such death benefits as are
provided to Employee under Paragraph 4 hereof.
8. COMPANY STOCK OPTION PLAN.
The Board of Directors of the Company has awarded the Employee
non-qualified stock options to purchase Thirty-five Thousand (35,000) shares
of the Company Common Stock under the Company's Employees' Stock Option Plan
(the "Employees' Plan"). If the employment of the Employee terminates under
circumstances entitling him to a Severance Payment (as defined in Paragraph
9.), he shall thereupon be entitled to exercise any and all options granted
to him under the Employees' Plan to the extent permitted pursuant to the
terms and conditions of the Employees' Plan.
9. SEVERANCE PAYMENT.
If the Company gives notice to terminate in accordance with Paragraph 1
or if the employment of the Employee is terminated at any time (i) by the
Employee for Good Reason (as defined in Paragraph 10), or (ii) by the Company
for any reason other than for Cause (as hereinafter defined), the Company
will be obligated to pay to the Employee in cash a severance payment equal to
the product of (i) and (ii); where (i) shall equal the sum of (A) the
Employee's annual salary at the time of such termination, and (B) the
Employee's annual incentive bonus during the twelve (12) month period ending
with the close of the month in which such termination of employment occurs
(the "Date of Termination"), but not less than the incentive bonus paid to
the Employee in January 1994 for services rendered during 1993, which was
Three Hundred Thousand and 00/100 Dollars ($300,000), divided by twelve (12);
and where (ii) shall be thirty-six (36). Termination of the Employee's
employment on account of his disability, death or retirement (as defined in
this Agreement) will not be considered a termination of the Employee's
employment by the Company and will not require the Company to pay and provide
any Severance Payment. No Severance Payment will be required if the
employment of the Employee is terminated by the Company for Cause (as
hereinafter defined) or by the Employee (other than for Good Reason as
defined in Paragraph 10) or if the Employee gives notice to terminate in
accordance with Paragraph 1. The Severance Payment provided herein is
provided in order to reinforce and encourage the continued loyalty,
attention, and dedication of the Employee to the Company's business and
affairs without the concerns which normally arise from the possibility of a
loss of employment security. As used herein, the terms "Retirement" and
"Cause" shall have the following meanings, respectively:
(a) Retirement. Termination of the Employee's employment on
account of "Retirement" shall mean termination on or after the Employee's
normal retirement date in accordance with the terms of the Company's pension
plan (or any successor or substitute plan or plans of the Company or of any
subsidiary of the Company under which the Employee may be a participant); and
(b) Cause. Termination by the Company of the Employee's
employment for "Cause" shall mean termination as a result of (i) the willful
and continued failure by the Employee to devote the time, attention and
effort necessary to perform substantially the services contemplated by this
Agreement in a manner consistent with the Employee's past performance (other
than any such failure resulting from the Employee's incapacity due to
physical or mental illness) after a written demand for substantial
performance is delivered to the Employee by a member or representative of the
Board of Directors of the Company which specifically identifies the manner in
which it is alleged that the Employee has not substantially performed such
services, or (ii) the willful engaging by the Employee in gross misconduct
which is materially and demonstrably injurious to the Company; provided that,
no act, or failure to act, on the Employee's part shall be considered
"willful" unless done, or omitted to be done, in bad faith and without
reasonable belief that such action or omission was in, or not apposed to, the
best interests of the Company. It is also expressly understood that the
Employee's attention to or engagement in matters not directly related to the
business of the Company shall not provide a basis for termination for Cause
if such attention or engagement is authorized by the terms of this Agreement
or has otherwise been approved by the Board of Directors of the Company.
Anything in this Agreement to the contrary notwithstanding, the Employee's
employment may not be terminated for Cause unless and until there shall have
been delivered to the Employee a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters of the entire membership of
the Board (after reasonable notice to the Employee and an opportunity for the
Employee, together with his counsel, to be heard before the Board), finding
that in the good faith opinion of the Board the Employee was guilty of the
conduct set forth in clause (i) or (ii) of this subparagraph (b) and
specifying the particulars thereof in detail. Except as otherwise provided
in Paragraphs 1 and 6, no purported termination by the Company of the
Employee's employment which is not justified as a termination of the
Employee's employment for Cause shall be effective.
10. TERMINATION BY THE EMPLOYEE FOR GOOD REASON.
The termination by the Employee of his employment for "Good Reason"
shall be deemed a justifiable termination of his employment and shall excuse
the Employee from the obligation to render services as provided in Paragraph
2 hereof. Upon such termination, the Employee shall be entitled to the
Severance Payment in accordance with the provisions of Paragraph 9 hereof.
As used herein, the phrase "Good Reason" shall mean:
(a) a change in the Employee's status, title or position(s) as an
officer of the Company in the executive capacity set forth in Paragraph 1
hereof, which in his reasonable judgment, does not represent a promotion from
or enhancement of his status, title and position, or the assignment by the
Board of Directors of the Company to the Employee of any duties or
responsibilities which, in his reasonable judgment, are inconsistent with
such status, title or position, or any removal of the Employee from or any
failure to reappoint or reelect him to such position, except in connection
with a justifiable termination by the Company of the Employee's employment
for Cause or on account of disability, the Retirement or death of the
Employee or the termination by the employee of his employment other than for
Good Reason;
(b) a reduction in the Employee's annual salary or a failure by
the Company to pay to the Employee any installment of the annual salary
required by Paragraph 4 hereof, which failure continues for a period of
twenty (20) days after written notice thereof is given by the Employee to the
Company;
(c) the Company's requiring the Employee to be based anywhere
other than the Fairfield, New Jersey area, except for required travel on the
business of the Company or the OPI Group to an extent substantially
consistent with the business travel obligations which the Employee has
previously undertaken on behalf of the Company or the OPI Group;
(d) the failure by the Company to obtain the assumption of this
Agreement in form and substance to the reasonable satisfaction of the
Employee by any Successor (other than by merger or consolidation for which no
separate assumption is necessary) as referred to in Paragraph 17; or
(e) any refusal by the Company to allow the Employee to attend to
matters or engage in activities not directly related to the business of the
Company which is permitted by this Agreement or which, prior thereto, was
permitted by the Board of Directors of the Company.
<PAGE>
11. NOTICE OF TERMINATION.
Any purported notice of termination of the Employee's employment (other
than a Notice given by either party pursuant to Paragraph 1 hereof) shall be
communicated in writing and delivered to the other party as provided in
Paragraph 18 (hereinafter a "Notice of Termination"). For purposes of this
Agreement a "Notice of Termination" shall mean a notice which specifies the
termination provision relied upon by the party giving such notice and shall
set forth in detail such facts and circumstances claimed by said party to
provide a justified basis for termination of the Employee's employment under
the provision(s) so indicated.
12. TRADE SECRETS, ETC.
The Employee acknowledges that prior to his initial employment by the
Company he had no knowledge of the formulae, processes or methods of
manufacture or other trade secrets of the Company. Upon the termination of
his employment, the Employee agrees forthwith to deliver up to the Company
notebooks and other data relating to research or experiments as conducted by
him or relating to the products, formulae, processes or methods of
manufacture of the Company.
13. CUSTOMER LIST.
The Employee recognizes and acknowledges that the written list of the
customers of the Company, its subsidiaries and affiliates, as it may exist
from time to time, is a valuable, special and unique asset. The Employee
agrees that he will not during the term of his employment or within five (5)
years thereafter, use for his own personal benefit or disclose the written
list of the customers of the Company, its subsidiaries and affiliates or any
part thereof, to any person, firm, corporation, association or other entity
for any reason or purpose whatsoever.
14. LIMITED COVENANT NOT TO COMPETE.
If the employment of the Employee hereof is terminated (i) by the
Employee pursuant to Paragraph 1 hereof or (ii) by the Company for Cause (as
defined in Paragraph 9.(b) above), then in either case (y) the Employee will
not, for a period of two (2) years from such termination of employment,
within the territorial confines of the United States of America, directly or
indirectly, own, manage, operate, control, be employed by, participate in, or
be connected in any manner with the ownership, management, operation or
control of any business in competition with the business conducted by the
Company at the time of such termination, and (z) the Employee will, for a
period of two (2) years from such termination refrain from carrying on a
business similar to that presently carried on by the Company within the
states in which the business of the Company has been carried on, so long as
the Company carries on like business therein.
15. INJUNCTIVE RELIEF.
In the event of a breach by the Employee of the provisions of Paragraphs
12, 13 or 14 during or after the term of this Agreement, the Company shall be
entitled to an injunction restraining the Employee from violation of such
paragraph. Nothing herein shall be construed as prohibiting the Company from
pursuing any other remedy it may have in the event of breach of this
Agreement by the Employee.
<PAGE>
16. CERTAIN PROPRIETARY RIGHTS.
Employee agrees to and hereby does assign to the Company all his right,
title and interest in and to all inventions, whether or not patentable, which
are made or conceived solely or jointly by him:
(a) At any time during the term of his employment by the Company
in an executive, managerial, planning, technical research or engineering
capacity (including development, manufacturing, systems, applied science and
sales), or
(b) During the course of or in connection with his duties during
the term of this Agreement, or
(c) With the use of time or materials of the Company. The
Employee agrees to communicate to the Company or its representatives all
facts known to him concerning such inventions, to sign all rightful papers,
make a rightful oaths and generally to do every thing possible to aid the
Company in obtaining and enforcing proper patent protection for all such
inventions in all countries and in vesting title to such inventions and
patents in the Company. For the purpose of this Agreement, the subject
matter of any application for patent naming Employee as a sole or joint
inventor filed during the course of employment or within one year subsequent
to the termination thereof shall be deemed to be an invention made or
conceived by him during the course of his employment by the Company and
assignable to the Company hereunder, unless the Employee establishes by a
preponderance of the evidence that such invention was made or conceived by
him subsequent to termination of his employment hereunder. At the Company's
request (during or after the term of this Agreement) and expense, the
Employee will promptly execute a specific assignment of title to the Company,
and perform any other acts reasonably necessary to implement the foregoing
assignment.
17. BINDING EFFECT.
This Agreement shall be binding upon and inure to the benefit of:
(a) The Company, and any successors or assigns of the Company,
whether by way of a merger or consolidation, or liquidation of the Company,
or by way of the Company selling all or substantially all of the assets of
the Company, or a division thereof, to a successor entity; however, in the
event of the assignment by the Company of this Agreement, the Company shall
nevertheless remain liable and obligated to the Employee in accordance with
the terms hereof; and
(b) The Employee, his estate, his executors, administrators, heirs
and beneficiaries.
18. NOTICE.
Any notice or other communication required under this Agreement shall be
in writing, shall be deemed to have been given and received when delivered in
person, or, if mailed, shall be deemed to have been given when deposited in
the United States mail, first class, registered or certified, return receipt
requested, with proper postage prepaid, and shall be deemed to have been
received on the third business day thereafter, and shall be addressed as
follows:
<PAGE>
If to the Company, addressed to:
Ogden Projects, Inc.
40 Lane Road
Fairfield, New Jersey 07007-2615
Attention: Chairman of the Board and Chief Executive Officer
If to the Employee, addressed to:
Scott G. Mackin
19 Hall Road
Chatham, New Jersey 07928
or such address as to which any party hereto may have notified the other in
writing.
19. GOVERNING LAW.
This Agreement shall be governed by and interpreted in accordance with
the laws of the State of New Jersey.
20. ENTIRE AGREEMENT.
This Agreement contains or refers to the entire arrangement or
understanding between the Employee and the Company relating to the employment
of the Employee by the Company. No provision of the Agreement may be
modified or amended except by an instrument in writing by or for both parties
hereto.
21. WAIVER.
Failure of either party hereto to insist upon strict compliance by the
other party with any term, covenant or condition hereof shall not be deemed
a waiver of such term, covenant or condition, nor shall nay waiver or
relinquishment or failure to insist upon strict compliance of any right or
power hereunder at any one or more times be deemed a waiver or relinquishment
of such right or power at any other time or times.
22. PRIOR EMPLOYMENT AGREEMENT.
This Employment Agreement supercedes and replaces the Employment
Agreement between the Employee and the Company dated as of June 1, 1990 which
shall become null and void as of the date hereof.
23. ASSIGNMENT BY EMPLOYEE.
The rights and benefits of the Employee under this Agreement are
personal to him and no such right or benefit shall be subject to voluntary or
involuntary alienation, assignment or transfer; provided, however, that
nothing in this Paragraph 23 shall preclude the Employee from designating a
beneficiary or beneficiaries to receive any benefit payable on his death.
OGDEN PROJECTS, INC.
/S/Scott G. Mackin By:/S/R. Richard Ablon
Scott G. Mackin Chairman of the Board
and Chief Executive Officer
EXHIBIT 10.8(p)(i)
OGDEN
PROFIT SHARING PLAN
As amended and restated January 1, 1991
and as in effect through January 1, 1993
<PAGE>
<PAGE>
OGDEN
PROFIT SHARING PLAN
TABLE OF CONTENTS
Section Page
SECTION 1. PURPOSE . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 3. PARTICIPATION . . . . . . . . . . . . . . . . . . . . . . 14
3.1. Date of Participation . . . . . . . . . . . . . . . . . . 14
3.2. Participation and Adjustments . . . . . . . . . . . . . . 14
3.3. Duration. . . . . . . . . . . . . . . . . . . . . . . . . 15
3.4. Reemployment. . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 4. SAVINGS FEATURES. . . . . . . . . . . . . . . . . . . . . 16
4.1. Pre-tax Contributions . . . . . . . . . . . . . . . . . . 16
4.2. Distribution of Excess Pre-tax Contributions. . . . . . . 16
4.3. Election to Institute, Change, or Resume Contribution . . 17
4.4. Limitation on Pre-tax Contributions . . . . . . . . . . . 17
4.5. Definitions . . . . . . . . . . . . . . . . . . . . . . . 18
4.6. Refund of Excess Contributions. . . . . . . . . . . . . . 23
SECTION 5. COMPANY CONTRIBUTIONS . . . . . . . . . . . . . . . . . . 26
5.1. Company Matched Contributions . . . . . . . . . . . . . . 26
5.2. Company Discretionary Contributions . . . . . . . . . . . 26
5.3. Time of Payment of Company Contributions. . . . . . . . . 27
5.4. Form of Payment of Company Contributions. . . . . . . . . 27
5.5. Maintenance of Separate Accounts. . . . . . . . . . . . . 27
5.6. Maintenance of Accounts Shall Not Vest any Right in
Assets. . . . . . . . . . . . . . . . . . . . . . . . . . 28
5.7. Limitation on Company Matched Contributions . . . . . . . .28
SECTION 6. ALLOCATION OF COMPANY CONTRIBUTIONS . . . . . . . . . . . 35
6.1. Allocation of Discretionary Company Contributions . . . . 35
6.2. Discretionary Company Contribution Formula. . . . . . . . 36
6.3. Allocation of Matching Contribution . . . . . . . . . . . 36
SECTION 7. INVESTMENT OF CONTRIBUTIONS . . . . . . . . . . . . . . . 37
7.1. Investment by Trustees. . . . . . . . . . . . . . . . . . 37
7.2. Investment Funds. . . . . . . . . . . . . . . . . . . . . 37
7.3. Investment Elections. . . . . . . . . . . . . . . . . . . 38
SECTION 8. VALUATIONS AND ADJUSTMENTS. . . . . . . . . . . . . . . . 41
8.1. Separate Accounts . . . . . . . . . . . . . . . . . . . . 41
8.2. Allocation of Earnings and Losses Valuation of Trust. . . 41
8.3. Expenses. . . . . . . . . . . . . . . . . . . . . . . . . 42
8.4. Allocation of Forfeitures . . . . . . . . . . . . . . . . 43
SECTION 9. ELIGIBILITY FOR BENEFITS. . . . . . . . . . . . . . . . . 44
9.1. Retirement Date . . . . . . . . . . . . . . . . . . . . . 44
9.2. Distribution of Participant's Account on Retirement,
Death, Disability, or Hardship. . . . . . . . . . . . . . 44
9.3. Distribution on other Termination of Service. . . . . . . 48
9.4. In-Service Withdrawals. . . . . . . . . . . . . . . . . . 48
9.5. Loans . . . . . . . . . . . . . . . . . . . . . . . . . . 49
9.6. Restrictions on Distributions . . . . . . . . . . . . . . 51
9.7. Direct Rollovers. . . . . . . . . . . . . . . . . . . . . 52
SECTION 10. VESTED INTERESTS. . . . . . . . . . . . . . . . . . . . . 55
10.1. Pre Tax Contributions . . . . . . . . . . . . . . . . . . .55
10.2. Company Contributions . . . . . . . . . . . . . . . . . . 55
10.3. Transferred Accounts. . . . . . . . . . . . . . . . . . . 55
10.4. Break in Service for Vesting. . . . . . . . . . . . . . . 55
SECTION 11. METHOD OF PAYMENT OF BENEFITS. . . . . . . . . . . . . . 57
11.1. Payment of Benefits . . . . . . . . . . . . . . . . . . . 57
11.2. Commencement of Payment . . . . . . . . . . . . . . . . . 57
11.3. Time of Payment . . . . . . . . . . . . . . . . . . . . . 60
SECTION 12. MAXIMUM AMOUNT OF ALLOCATION . . . . . . . . . . . . . . 62
12.1. Application of Section 12 . . . . . . . . . . . . . . . . 62
12.2. Maximum Additions to Account. . . . . . . . . . . . . . . 62
12.3. Order of Reduction. . . . . . . . . . . . . . . . . . . . 63
12.4. Additional Account Limitations. . . . . . . . . . . . . . 64
SECTION 13. DESIGNATION OF BENEFICIARIES . . . . . . . . . . . . . . 67
13.1. Beneficiary Designation . . . . . . . . . . . . . . . . . 67
13.2. Failure to Designate Beneficiary. . . . . . . . . . . . . 68
SECTION 14. ADMINISTRATION OF THE PLAN . . . . . . . . . . . . . . . 69
14.1. Powers and Duties of Administrative Committee . . . . . . 69
14.2. Powers and Duties of Investment Committee . . . . . . . . 69
14.3. Powers and Duties of Trustee. . . . . . . . . . . . . . . 70
14.4. Agents, Report of Committees to Board . . . . . . . . . . 70
14.5. Structure of Committees . . . . . . . . . . . . . . . . . 71
14.6. Adoption of Procedures of Committees. . . . . . . . . . . 72
14.7. Demands for Money . . . . . . . . . . . . . . . . . . . . 72
14.8. Claims for Benefits . . . . . . . . . . . . . . . . . . . 73
14.9. Hold Harmless . . . . . . . . . . . . . . . . . . . . . . 74
14.10. Service of Process. . . . . . . . . . . . . . . . . . . . 75
14.11. Specific Powers and Duties. . . . . . . . . . . . . . . . 75
SECTION 15. WITHDRAWAL OF PARTICIPATING COMPANY. . . . . . . . . . . 76
15.1. Withdrawal of Participating Company . . . . . . . . . . . 76
15.2. Distribution after Withdrawal . . . . . . . . . . . . . . 77
15.3. Transfer to Successor Plan. . . . . . . . . . . . . . . . 78
SECTION 16. AMENDMENT OR TERMINATION OF THE PLAN AND THE TRUST . . . 79
16.1. Right to Amend, Suspend or Terminate Plan . . . . . . . . 79
16.2. Retroactivity . . . . . . . . . . . . . . . . . . . . . . 80
16.3. Notice. . . . . . . . . . . . . . . . . . . . . . . . . . 80
16.4. No Further Contribution . . . . . . . . . . . . . . . . . 80
16.5. Partial Termination . . . . . . . . . . . . . . . . . . . 82
16.6. Exclusive Benefit of Participants and Beneficiaries . . . 83
SECTION 17. GENERAL LIMITATIONS AND PROVISIONS . . . . . . . . . . . 84
17.1. All Risk on Participants and Beneficiaries. . . . . . . . 84
17.2. Trust is Sole Source of Benefits. . . . . . . . . . . . . 84
17.3. No Right to Continued Employment. . . . . . . . . . . . . 84
17.4. Payment on Behalf of Payee. . . . . . . . . . . . . . . . 85
17.5. No Alienation . . . . . . . . . . . . . . . . . . . . . . 85
17.6. Missing Payee . . . . . . . . . . . . . . . . . . . . . . 86
17.7. Required Information. . . . . . . . . . . . . . . . . . . 87
17.8. Subject to Trust Agreement. . . . . . . . . . . . . . . . 87
17.9. Communications to Committees. . . . . . . . . . . . . . . 87
17.10. Communications from Participating Company or Committe . . 88
17.11. Incoming Transfers and Rollovers. . . . . . . . . . . . . 88
17.12. Gender. . . . . . . . . . . . . . . . . . . . . . . . . . 89
17.13. Captions. . . . . . . . . . . . . . . . . . . . . . . . . 89
17.14. Applicable Law. . . . . . . . . . . . . . . . . . . . . . 89
17.15. Mistake of Fact . . . . . . . . . . . . . . . . . . . . . 89
17.16. Qualification of Plan . . . . . . . . . . . . . . . . . . 89
17.17. Deductibility of Contributions. . . . . . . . . . . . . . 90
SECTION 18. TOP HEAVY PROVISIONS . . . . . . . . . . . . . . . . . . 91
18.1. Top Heavy Plan. . . . . . . . . . . . . . . . . . . . . . 91
18.2. Definitions . . . . . . . . . . . . . . . . . . . . . . . 91
18.3. Compensation. . . . . . . . . . . . . . . . . . . . . . . 97
18.4. Minimum Contribution. . . . . . . . . . . . . . . . . . . 98
18.5. Limitations on Contributions. . . . . . . . . . . . . . . 99
18.6. Other Plans . . . . . . . . . . . . . . . . . . . . . . . 99
APPENDIX A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
<PAGE>
SECTION 1. PURPOSE
The Ogden Food Service Corporation, a subsidiary of
Ogden Services Corporation, formerly known as Ogden Allied Services
Corporation adopted the Ogden Food Service Corporation Saving and Security Plan
effective as of January 1, 1982. Effective August 1, 1986, such Plan was
amended, restated in its entirety and renamed the Ogden Allied Services
Saving and Security Plan. As a result of an employee benefit plan
reorganization, effective January 1, 1989, (i) the Ogden Allied Services
Saving and Security Plan was amended, restated in its entirety and renamed
the Ogden Allied Services Profit Sharing Plan (the "Plan"); (ii) the Plan
was merged with (a) Ogden Corporation Profit Sharing Plan, (b) Ogden Allied
Maintenance Retirement Savings Plan, (c) Ogden Allied Maintenance Security
Fund and (d) Ogden Allied Facility Management Corporation of Iowa Savings
and Security Plan (collectively, the "Prior Plans"); and (iii) the related
trusts maintained as part of each of the Prior Plans was merged with the
Ogden Allied Services Profit Sharing Plan Trust (the "Trust"). As a result
of the merger, each Sponsor of the Prior Plans became a Participating
Company of the Plan and the Trust. Effective January 1, 1991, the Plan was
again amended and restated in its entirety and renamed the Ogden Profit
Sharing Plan and effective January 1, 1992, the Atlantic Design Profit
sharing Plan was merged with the Ogden Profit Sharing Plan.
The purpose of the Plan is to provide eligible employees with a
convenient way to save on a regular and long-term basis and by providing
such employees with a beneficial interest in the profits of the business,
all as set forth herein and in the Trust Agreement adopted as part of the
Plan.
The Plan, as hereby amended and restated, and the Trust are
intended to qualify as a plan and trust which meet the requirements of
Section 401(a), 401(k) and 501(a), respectively, of the Internal Revenue
Code of 1986, as now in effect or here-after amended, or any other
applicable provisions of law including, without limitation, the Employee
Retirement Income Security Act of 1974.
If a person retired or otherwise terminated employment prior to
January 1, 1991 and is not reemployed by a Participating Company thereafter,
the rights under the Plan (or the Prior Plans) in respect of him, to
retirement or other benefits under the Plan (or the Prior Plans) shall be
governed by the applicable provisions of the Plan (or the Prior Plans) as
in effect prior to January 1, 1991.
<PAGE>
SECTION 2. DEFINITIONS
When used herein the following terms shall have the following
meanings:
2.1. "Account" means the account established and maintained in
respect of a Participant including such Participant's Company Matched
Account, Company Discretionary Account, pursuant to Sections 5.1 and 5.2,
401(k) Matched Account and 401(k) Unmatched Account pursuant to Section
4.1, and other accounts established pursuant to Appendix A.
2.2. "Act" means the Employee Retirement Income Security Act of
1974, as now in effect or as hereafter amended.
2.3. "Administrative Committee" means the Administrative
Committee provided for in Section 14.
2.4. "Affiliate" means any corporation which is included in a
controlled group of corporations (within the meaning of Section 414(b) of
the Code), which includes the Company, any trade or business (whether or
not incorporated) under the common control of the Company (within the
meaning of Section 414(c) of the Code), any organization included in the
same affiliated service group (within the meaning of Section 414(m) of the
Code), as the Company, and any other entity affiliated with the Company
pursuant to the Regulations under Section 414(o) of the Code, except that
for purposes of applying the provisions of Sections 12 and 18 with respect
to the limitation on contributions, Section 415(h) of the Code shall apply.
2.5. "Base Compensation" means Compensation paid to a
Participant that does not exceed the annual Social Security taxable wage base.
2.6. "Base Contribution Percentage" means the contribution
percentage as calculated in Section 6.2 which is applied to the Base
Compensation.
2.7. "Beneficiary" means the beneficiary or beneficiaries
designated by a Participant pursuant to Section 13 to receive the amount,
if any, payable under the Plan upon the death of such Participant.
2.8. "Board of Directors" means the Board of Directors of the
Company.
2.9. "Break in Service" means Plan Year during which an
individual has not completed more than 500 Hours of Service, as determined
by the Administrative Committee in accordance with the Regulations. Solely
for purposes of determining whether a Break in Service has occurred, an
individual shall be credited with the Hours of Service which such indi-
vidual would have completed but for a maternity or paternity absence, as
determined by the Administrative Committee in accordance with this Section
2.7, the Code and the Regulations; provided, however, that the total Hours
of Service so credited shall not exceed the 501 Hours of Service, and that
the individual shall timely provide the Administrative Committee with such
information as it shall require. Hours of Service credited for a maternity
or paternity absence shall be credited entirely (i) in the Plan Year in
which the absence began if such Hours of Service are necessary to prevent a
Break in Service in such Plan Year or (ii) in the following Plan Year. For
purposes of this Section 2.7, maternity or paternity absence shall mean an
absence from work by reason of the individual's pregnancy, the birth of the
individual's child or the placement of a child with the individual in
connection with the adoption of the child by such individual, or for
purposes of caring for a child for the period immediately following such
birth or placement.
2.10. "Code" means the Internal Revenue Code of 1986, as
now in effect or as hereafter amended. All citations to sections of the
Code are to such sections as they may from time to time be amended or
renumbered.
2.11. "Committee" means the Administrative Committee and
the Investment Committee. For purposes of the Act, the members of the
Administrative Committee and the Investment Committee shall be named
fiduciaries (with respect to the matters for which they are hereby made
responsible) of the Plan, and the Administrative Committee shall be the
administrator of the Plan.
2.12. "Company" means Ogden Services Corporation or any
successor to the Company.
2.13. "Compensation" means the total salary and other
compensation paid during a Plan Year to an Employee from a Participating
Company, including any amount which such Employee elects to have the
Company contribute to a qualified plan under Section 401(k) of the Code,
any benefit payments under a plan under Section 125 of the Code, but
excluding imputed income, other non-cash compensation, lump sum severance
pay, special discretionary cash payments, any contribution to the Plan or
any other pension plan, profit-sharing plan or qualified or non-qualified
benefit plan maintained by a Participating Company, any benefit payment
under the Plan or any other such plan, reimbursed expense, or any
withholding tax (federal, state or local) remitted by a Participating
Company on behalf of an Employee in respect of imputed income arising out
of group insurance coverage of such Employee. Notwithstanding the foregoing,
for Plan Years beginning after 1988, Compensation shall be limited to
$200,000 for all Plan purposes, as adjusted for cost of living to the extent
permitted by the Code and the Regulations (the "annual compensation limit").
If less than a full Plan Year of Compensation is taken into account, then the
annual compensation limit shall be multiplied by the ratio obtained by dividing
the number of full months in the period by 12. In determining the Compensation
of a Participant for purposes of the annual compensation limit, the rules of
Section 414(q)(6) shall apply, except that in applying such limitation, Family
Member shall include only the spouse of the Participant and any lineal
descendants of the Participant who have not attained age 19 before the close of
the Plan Year. If, as a result of the application of such rules the adjusted
$200,000 limitation is exceeded, then the limitation shall be prorated among
the affected individuals in proportion to each such individual's Compensation
as determined under this Section 2.11 prior to the application of annual
compensation limit.
2.14. "Contributions" means those contributions made in respect
of a Participant including Company Matched Contributions and Company
Discretionary Contributions made by a Participating Company pursuant to Section
5.1 and 5.2, Pre-tax Contributions made by a Participant on a pre-tax basis
pursuant to Section 4.1, and any other contribution made in accordance with
Appendix A.
2.15. "Disability" means an Employee's physical or mental
incapacity to perform his assigned duties with the Employer, such that he
is eligible to receive either benefits under the long-term disability plan
of the Employer or any Affiliate, or disability benefits under the Social
Security Act and such incapacity is expected to last for more than 12 months
as determined in a uniform manner by the Administrative Committee after
reviewing any medical evidence which the Administrative Committee considers
necessary, including the reports of any medical examinations required by the
Administrative Committee.
2.16. "Early Retirement Date" means the first day of the
month coincident with or next following the Participant's attainment of age
55 and 10 Years of Service.
2.17. "Effective Date" means January 1, 1991.
2.18. "Employee"; "Eligible Employee":
(a) Employee means an individual in the employ of
the Employer who is employed on an hourly or salaried basis.
(b) Eligible Employee means any Employee other than
those who are included in a unit of Employees covered by a collective
bargaining agreement and certain hourly employees who are in the employ of
units that have been designated by the Company as being ineligible to
participate in the Plan that does not provide for their participation in
the Plan.
2.19. "Employer" means the Company and each other
Participating Company, or any of them.
2.20. "Excess Compensation" means Compensation paid that
exceeds the annual Social Security taxable wage base.
2.21. "Excess Contribution Percentage" means Contribution
percentage as calculated in Section 6.2 and which is applied to the Excess
Compensation.
2.22. "Family Member" means a spouse, lineal ascendants
and descendants of an Employee or former Employee and the spouses of such
lineal ascendants and descendants.
2.23. "Hours of Service" means the hours for which an
Employee shall receive credit for purposes of the Plan, as follows:
(a) One hour for each hour for which he is directly
or indirectly paid, or entitled to payment, by the Company or an Affiliate
for the performance of duties during the applicable computation period for
which his Hours of Service are being determined under the Plan. (The hours
shall be credited to the Employee for the computation period or periods in
which the duties were performed, and shall include hours for which back pay
has been either awarded or agreed to by the Company or an Affiliate as
provided by regulations under the Act, with no duplication of credit for
hours.)
(b) One hour for each hour, in addition to the
hours in paragraph (a) above, for which he is directly or indirectly paid,
or entitled to payment, by the Company or an Affiliate, for reasons other
than for the performance of duties during the applicable computation
periods, such as paid vacation, paid holiday, paid sickness, and similar
paid periods of nonworking time (excluding time when such Employee is
receiving long term disability benefits). These hours shall be counted in
the computation period or periods in which the hours for which payment is
made occur.
(c) One hour for each hour of the normally
scheduled work hours for each day during any period which he is on leave of
absence from work with the Company or an Affiliate for military service
with the armed forces of the United States, but not to exceed the period
required under the law pertaining to veterans' reemployment rights;
provided that if he fails to report for work at the end of such leave
during which he has reemployment rights he shall not receive credit for
hours on such leave.
(d) The number of normally scheduled work hours for
each day of authorized leave of absence granted by the Company or an
Affiliate in accordance with reasonable policies established therefor for
which he is not compensated. When no time records are available, the
Employee shall be given credit for Hours of Service based upon the number
of normally scheduled work hours for each day he is on the Company's or an
Affiliate's payroll, as determined in accordance with reasonable standards
and policies from time to time adopted by the Administrative Committee
under Section 2530.200b-2(b) and (c) of the Labor Department Regulations,
which are incorporated herein by this reference thereto.
2.24. "Investment Committee" means the Investment Committee
provided for in Section 14.2.
2.25. "Investment Funds" means the funds of the Trust Fund,
or any additional funds which the Investment Committee may establish from
time to time by written notice to the Trustee in accordance with Section
7.2.
2.26. "IRS" means the United States Internal Revenue
Service.
2.27. "Labor Department" means the United States Department
of Labor.
2.28. "Normal Retirement Age" means the Participant's 65th
birthday.
2.29. "Normal Retirement Date" means the first day of the
month coincident with or next following the Participant's 65th birthday.
2.30. "Participant" means any Employee who begins to
participate in the Plan as provided in Section 3, and whose participation
is not terminated; provided, however, that an Employee who was not a
Participant in a Prior Plan or who was not an Employee on January 1, 1991
shall not be eligible to become a Participant in the Plan until the
completion of at least one Year of Service with the Company or Affiliate
and had attained age 21.
2.31. "Participating Company" means the Company or any
subsidiary of, or other corporation or entity affiliated or associated
with, the Company, the Board of Directors or equivalent governing body of
which shall adopt the Plan and the Trust by appropriate action with the
written consent of the Board of Directors. By its adoption of the Plan, a
Participating Company shall be deemed to appoint the Company, each of the
Committees and the Trustee its exclusive agent to exercise on its behalf
all of the power and authority conferred by the Plan or by the Trust upon
the Company. The authority of the Company, the Committees and the Trustee
to act as such agent shall continue until the Plan is terminated as to the
Participating Company and the relevant Trust Fund assets have been
distributed by the Trustee as provided in Section 16 of the Plan.
2.32. "Pre Tax Contributions" means 401(k) matched
contributions and 401(k) unmatched contributions as described in Section 4.1.
2.33. "Pre Tax Contribution Accounts" means the 401(k)
matched account and the 401(k) unmatched account as described in Section 4.1.
2.34. "Plan" means this Ogden Profit Sharing Plan, as the
same may be amended from time to time.
2.35. "Plan Year" means the calendar year.
2.36. "Prior Plan" means the Ogden Corporation Profit
Sharing Plan, Ogden Allied Maintenance Retirement Savings Plan, Ogden
Allied Maintenance Security Fund, Ogden Allied Facility Management
Corporation of Iowa Savings and Security Plan, and effective January 1, 1992,
Atlantic Design Profit Sharing Plan.
2.37. "Regulations" means the applicable regulations issued
under the Code, the Act or other applicable law, by the IRS, the Labor
Department or any other governmental authority and any proposed or
temporary regulations or rules promulgated by such authorities pending the
issuance of such regulations.
2.38. "Surviving Spouse" means the survivor of a deceased
former Participant to whom such deceased former Participant had been
legally married (as determined by the Administrative Committee) at the time
of the former Participant's death or at the time benefit payments commence,
whichever is earlier.
2.39. "Taxable Year" means the calendar year.
2.40. "Trust" or "Trust Fund" means the trust established
by the Company as a part of the Plan.
2.41. "Trustee" means the trustee or trustees of the Trust
who shall be appointed, and may be removed, with or without cause, by the
Board of Directors.
2.42. "Valuation Date" means the last day of each calendar
month and such other date or dates specified by the Administrative Committee.
2.43. "Vesting Service" means Years of Vesting Service
counted from each anniversary beginning on an Eligible Employee's date of
hire to termination date.
2.44. "Year of Service" means any Plan Year during which an
individual completed at least 1,000 Hours of Service, as determined by the
Administrative Committee in accordance with the Regulations. In addition,
if an Employee does not complete 1,000 Hours of Service during the Plan
Year in which his employment commenced but does complete at least 1,000
Hours of Service during the 12 consecutive month period beginning on the
date his employment commenced, as determined by the Administrative Commit-
tee, then, for purposes of determining whether such Employee was partici-
pating in the Plan, as provided in Section 3, he shall be credited with a
Year of Service for such 12 consecutive month period.
2.45. "Years of Vesting Service" means a twelve consecutive
month period commencing on an Eligible Employee's date of hire, and each
anniversary thereof, in which such Eligible Employee completes at least
1,000 Hours of Service.
<PAGE>
<PAGE>
SECTION 3. PARTICIPATION
3.1. DATE OF PARTICIPATION. Each person who (i) shall be an
Eligible Employee of the Company on the Effective Date, or (ii) shall have
been a Participant under a Prior Plan on December 31, 1990 shall continue
to be a Participant in the Plan on the Effective Date. In addition, each
other Eligible Employee who shall have attained age 21 shall become a
Participant in the Plan on the anniversary date of his date of employment;
provided, that such Participant has completed at least 1,000 Hours of
Service during a 12-month period beginning on his first day of employment
with a Participating Company or an Affiliate.
3.2. PARTICIPATION AND ADJUSTMENTS. The Administrative
Committee shall take all necessary or appropriate action to ensure that
each Employee eligible to become a Participant under this Section 3 becomes
a Participant and, if it is determined that such an Employee has for any
reason not been made a Participant in the Plan, such Employee shall
retroactively become a Participant. The Company Discretionary Account, as
described in Section 5.2, of an Employee who retroactively becomes a
Participant or for whom an administrative adjustment is made shall, upon
becoming a Participant or upon such adjustment, consist solely of the
aggregate amount of contributions and earnings which would have been
allocated to his Account had he become a Participant when first eligible.
3.3. DURATION. The participation of a Participant shall end
when no further benefits are payable to him on account of his participation
in the Plan.
3.4. REEMPLOYMENT. (a) If a reemployed Employee was a
Participant at the time of his termination of employment, he shall
immediately resume active participation in the Plan upon his reemployment
and credit for his Hours of Service and Years of Service prior to his
termination shall be reinstated.
(b) If a reemployed Employee was not a Participant at the
time he was terminated, his Hours of Service shall be immediately
reinstated and he shall become a Participant as provided in Section 3.1.
(c) If a reemployed Employee was not a Participant at the
time he was terminated, and such Employee has incurred a Break in Service,
his Hours of Service will not be credited and such Employee shall be
treated as a new Employee.
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<PAGE>
SECTION 4. SAVINGS FEATURES
4.1. PRE-TAX CONTRIBUTIONS. For each Plan Year, a Participant
may elect, subject to such terms and conditions as issued by the
Administrative Committee, to have his Participating Company reduce his
Compensation and contribute such amount (which shall be from 1% to 15% of
his Compensation) on his behalf to the Plan as a Pre-tax Contribution.
However, in no event may a Participant have a Pre-tax Contribution of more
than $7,627, adjusted, for Plan Years beginning after December 31, 1989,
for increases in the cost of living in accordance with Section 402(g)(5) of
the Code, contributed to the Plan on his behalf in a Plan Year. The
Company shall transfer all Pre-tax Contributions to the Trustee as soon as
practical and shall credit the first 3% of contributions to the 401(k)
Matched Account and all other Pre-tax Contributions in excess of 3% to the
401(k) Unmatched Account.
All Pre-tax contributions under this Section shall be
made by payroll deduction.
4.2. DISTRIBUTION OF EXCESS PRE-TAX CONTRIBUTIONS.
Notwithstanding any other provision of the Plan, in the event that the
aggregate amount of Pre-tax Contributions exceeds the limitation set forth
in Section 4.1, herein the amount of such excess, increased by any income
and decreased by any loss allocable thereto shall be distributed to a
Participant making such Pre-tax Contributions not later than April 15 of
the calendar year following the calendar year in which the excess occurred.
If a Participant also participates, in any calendar year, in any other
plans subject to the limitations set forth in Section 402(g) of the Code
and has made excess deferrals under the Plan when combined with the other
plans subject to such limits, to the extent the Participant, in writing
submitted to the Administrative Committee no later than the March 1 of the
calendar year following the calendar year for which the Pre-tax
Contributions were made, designates any Pre-tax Contributions under the
Plan as excess deferrals, the amount of such designated excess, increased
by any income and decreased by any losses attributable thereto, shall be
refunded to the Participant no later than April 15 of the calendar year
following the calendar year for which the Pre-tax Contributions were made.
The income or loss allocable to any amount distributed pursuant to this
Section 4.2 shall include the income or loss for the period between the end
of the Plan Year and the date of such distribution.
4.3. ELECTION TO INSTITUTE, CHANGE, OR RESUME CONTRIBUTIONS.
Subject to the provisions of Section 9.2, a Participant may elect to begin,
change, resume, or suspend Pre-tax Contributions as of the first day of any
month by filing a prescribed form with the Administrative Committee at
least 15 days prior to such date.
4.4. LIMITATION ON PRE-TAX CONTRIBUTIONS. Notwithstanding the
Pre-tax Contributions made pursuant to Sections 4.1 and 4.2 above, the
Actual Deferral Percentage of the Highly Compensated Employees shall not
exceed the greater of (i) or (ii) as follows:
(i) 125% of the Actual Deferral Percentage for Non-Highly
Compensated Employees; or
(ii) 200% of the Actual Deferral Percentage for Non-Highly
Compensated Employees; provided, however, that the
Actual Deferral Percentage of the Highly Compensated
Employees may not exceed that of the Non-Highly
Compensated Employees by more than two percentage
points.
Without the consent of a Participant, the Administrative
Committee may reduce or suspend the Pre-tax Contribution rate of a
Highly Compensated Employee, return the respective portions of excess Pre-tax
Contributions increased by any income and decreased by any losses of Highly
Compensated Employees to such Highly Compensated Employees in accordance
with Section 4.6.
4.5. DEFINITIONS.
(a) "Actual Deferral Percentage" for a specified group of
Eligible Employees for a Plan Year shall mean the average of the ratios
calculated separately for each Eligible Employee (the "actual deferral
ratio") in such group of:
(i) the total amount of Pre-tax Contributions
credited to his 401(k) Matched and 401(k)
Unmatched Accounts for such Plan Year; to
(ii) the amount of the Participant's compensation
(as defined in Section 414(s) of the Code) for
the Plan Year.
A Participant's Pre-tax Contribution will be taken into account under the
Actual Deferral Percentage test, as described herein, for a Plan Year only
if such contribution (i) relates to Compensation that has been received by
the Participant during the Plan Year. A Participant's Pre-tax Contribution
will be taken into account under the Actual Deferral Percentage test for a
Plan Year only if it is allocated to the Participant's Pre-tax Contribution
Account as of a date within such Plan Year. A Pre-tax Contribution will
be considered allocated within a Plan Year if such allocation is not
contingent on participation or the performance of service after such date
and the Pre-tax Contribution is actually paid to the Trust no later than 12
months after the Plan Year to which such contribution relates. An Eligible
Employee's actual deferral ratio shall be zero if no Pre-tax Contribution
is made on his behalf for such Plan Year. If the Plan and one or more
other plans which include cash or deferred arrangements are considered as
one plan for purposes of Sections 401(a)(4) and 410(b) of the Code, the
cash or deferred arrangements included in such plans shall be treated as
one arrangement for purposes of this Section 4.5 and Section 4.6. The
actual deferral ratio taken into account under this Section 4.5 for any
Highly Compensated Employee who participates in two or more Section 401(k)
of the Code cash or deferred arrangements of the Employer shall be determined
as if all such Section 401(k) cash or deferred arrangements were treated as one
Section 401(k) cash or deferred arrangement. For purposes of determining the
actual deferral ratio of a Participant who is a Highly Compensated Employee
subject to the family aggregation rules of Section 414(q)(6) of the Code
because he is either a five-percent owner or one of the 10 most Highly
Compensated Employees as described in Section 414(q)(6), the Pre-tax
Contributions and compensation (within the meaning of Section 414(s) of the
Code) of such Highly Compensated Employee shall include the Pre-tax
Contributions and compensation of his Family Members, and such Family Members
shall not be considered as separate Employees in determining the actual
the actual deferral ratio.
(b) "Highly Compensated Employee" means an Eligible
Employee or Family Member who, during the relevant period is treated as a
Highly Compensated Employee. A Highly Compensated Employee includes any
Employee who performs service for the Employer during the determination
year who, (i) received compensation (within the meaning of Section 414(s)
of the Code) from the Employer in excess of $75,000 (as adjusted pursuant
to Section 415(d) of the Code); (ii) received compensation within the
meaning of Section 414(s) of the Code from the Employer in excess of
$50,000 (as adjusted pursuant to Section 415(d) of the Code) and was a
member of the top-paid group for such year; or (iii) was an officer of the
Employer or an Affiliate and received compensation (within the meaning of
Section 414(s) of the Code) during such year that is greater than 50% of
the dollar limitation in effect under Section 415(b)(1)(A) of the Code.
The term Highly Compensated Employee also includes (x) Employees who are/is
one of the 100 Employees who received the most compensation (within the
meaning of Section 414(s) of the Code) from the Employer or an Affiliate
during the determination year, (y) Employees who are five percent owners at
any time during the determination year, and (z) Employees who have
separated from service or are deemed to have separated from service prior
to the determination year, who perform no service for the Employer or an
Affiliate during the determination year and were Highly Compensated
Employees for either the separation year or any determination year ending
on or after such Employee's 55th birthday. For purposes of (ii) above, the
top-paid group consists of the top 20% of Employees ranked on the basis of
compensation (within the meaning of Section 414(s) of the Code) received
during the year (excluding Employees who are described in Section 414(q)(8)
of the Code). For purposes of (iii) above, the number of officers shall
not exceed 50, or, if less, the greater of three Employees or 10% of the
Employees (excluding Employees who are described in Section 414(q)(8) of
the Code.) If no officer has satisfied the compensation requirement of
(iii) above during either a determination year or look-back year, the
highest paid officer for such year shall be treated as a Highly Compensated
Employee. For purposes of this definition, the "determination year" and
the "look-back year" shall be the Plan Year or the calendar year ending
with or within the applicable determination year (or, in the case of a
determination year that is shorter than 12 months, the calendar year ending
with or within the 12-month period ending with the end of the applicable
determination year). If an Employee is, during a determination year or
look-back year, a Family Member of either a five percent owner who is an
active or former Employee or a Highly Compensated Employee who is one of
the 10 most Highly Compensated Employees ranked on the basis of
compensation (within the meaning of Section 414(s) of the Code) paid by the
Employer or Affiliate during such year, then the Family Member and the five
percent owner or top 10 Highly Compensated Employee shall be aggregated.
In such case, the Family Member and five percent owner of top 10 Highly
Compensated Employee shall be treated as a single Employee receiving
compensation (within the meaning of Section 414(s) of the Code) compen-
sation and contributions or benefits, as applicable, equal to the sum of
such compensation and contributions or benefits, as applicable, of
the Family Member and five percent owner or top 10 Highly Compensated
Employee. The determination of who is a Highly Compensated Employee,
including the determination of the number and identity of Employees in the
top-paid group, the top 100 Employees, the number of Employees treated as
officers, and the Compensation that is considered, will be made in accordance
with Section 414(q) of the Code and the Regulations thereunder.
(c) "Non-Highly Compensated Employee" means any Eligible
Employee who is neither a Highly Compensated Employee nor a Family Member
of a Highly Compensated Employee.
4.6. REFUND OF EXCESS CONTRIBUTIONS. If the Administrative
Committee is required, in order to comply with the provisions of Section
4.4 and the Code, it shall refund excess contributions for a Plan Year,
increased by any income and decreased by any losses attributable thereto
through the date of such refund. For purposes of this Section 4.6, "excess
contributions" means, with respect to any Plan Year, the excess of the
aggregate amount of Pre-tax Contributions (and any earnings and losses
allocable thereto) made to the 401(k) Matched and 401(k) Unmatched Accounts
of Highly Compensated Employees for such Plan Year, over the maximum amount
of such contributions that could be made to the Pre-tax Contribution
Accounts of such Participants without violating the requirements of Section
4.4, determined for each such Highly Compensated Employee by reducing Pre-
tax Contributions made on behalf of Highly Compensated Employees as follows:
First, the actual deferral ratio of the Highly Compensated Employee with the
highest actual deferral ratio is reduced to the extent necessary to satisfy
the Actual Deferral Percentage test or cause such ratio to equal the actual
referral ratio of the Highly Compensated Employee with the next highest
ratio. Second, this process shall be repeated until the Actual Deferral
Percentage test is satisfied. The amount of excess contributions of a
Highly Compensated Employee is then equal to the total of the Pre-tax
Contributions taken into account for the Actual Deferral Percentage test
less the product of the Highly Compensated Employee's reduced actual
deferral ratio, if applicable, as determined pursuant to this Section 4.6
and his compensation (within the meaning of Section 414(s) of the Code).
This procedure shall be known as the leveling method, as described in IRS
Regulation Section 1.401(k)-1(f)(2). In the case of a Highly Compensated
Employee whose actual deferral ratio is determined under the family
aggregation rules, the amount of excess contributions, as defined in this
Section 4.6 shall be determined by reducing the actual deferral ratio in
accordance with the leveling method described in this Section 4.6 and the
excess contributions are allocated among the Family Members in proportion
to the contributions of each Family Member that have been combined. The
distribution of such excess contributions shall be made to Highly
Compensated Employees to the extent practicable before the 15th day of the
third month immediately following the Plan Year for which such excess
contributions were made, but in no event later than the end of the Plan
Year following such Plan Year or, in the case of the termination of the
Plan in accordance with Section 16, no later than the end of the 12-month
period immediately following the date of such termination.
Notwithstanding the foregoing provisions of this Section 4.6,
the amount of excess contributions to be distributed pursuant to Section
4.2 with respect to a Participant for a Plan Year shall be reduced by any
excess deferrals distributed to such Participant for such Plan Year
pursuant to Section 4.1. In no case may the amount of excess contributions
to be refunded with respect to any Highly Compensated Employee exceed the
amount of Pre-tax Contributions made on behalf of the Highly Compensated
Employee for the Plan Year.
<PAGE>
<PAGE>
SECTION 5. COMPANY CONTRIBUTIONS
5.1. COMPANY MATCHED CONTRIBUTIONS. A Participating Company
will contribute $1.00 for each $1.00 of 401(k) Matched Contributions of
each Participant up to 3% of Compensation.
5.2. COMPANY DISCRETIONARY CONTRIBUTIONS. For each Taxable
Year, a Participating Company may on a discretionary basis contribute to
the Plan a fixed dollar amount or a percentage of the total Compensation
earned by such Participating Company to a Participant who participated in
the Plan for such Plan Year; provided however, that an Employee who was not
a Participant in a Prior Plan or who was not an Employee of the Company on
January 1, 1991 shall not be entitled to receive a Company contribution
until the completion of at least one Year of Service with a Participating
Company. Such amount or percentage, if any, shall be determined by
resolution of the Board of Directors of such Participating Company
following the end of each Plan Year. The Company shall deliver a copy of
such resolution fixing the annual contributions of the Participating
Company duly certified by the Secretary or Assistant Secretary of the
Company to the Trustee as soon as practical following the end of such Plan
Year. In no event shall any contribution by a Participating Company exceed
the amount deductible by it for federal income tax purposes. On or about
the date of determination of the contribution, the Administrative Committee
shall be advised of the amount of such payment upon which its allocation is
to be calculated.
5.3. TIME OF PAYMENT OF COMPANY CONTRIBUTIONS. A Participating
Company may make payment of its contribution, if any, for any Taxable Year
on any date or dates it elects, provided that the total amount of its
contribution for any Taxable Year shall be paid in full on or before such
date as the Federal income tax laws applicable to such payment require the
payment to be made in order to permit deduction of such payment for such
Taxable Year.
5.4. FORM OF PAYMENT OF COMPANY CONTRIBUTIONS. The
Participating Company's contribution for a Taxable Year shall be paid
directly by the Company to the Trustee in cash or, at the option of the
Participating Company, in whole or in part in other property acceptable to
the Trustee.
5.5. MAINTENANCE OF SEPARATE ACCOUNTS. The Administrative
Committee shall establish and maintain or cause to be established and
maintained in respect of each Participant an Account showing his interest
under the Plan and in the Trust Fund, including, if applicable, a Company
Contribution Account, and Pre-tax Contribution Account, pursuant to
Sections 4 and 5 and other Accounts (set forth in Appendix A) and all
relevant data pertaining thereto. Each Participant shall be furnished with
a written statement of his Account at least annually and upon any
distribution to him. In maintaining such Accounts under the Plan, the
Administrative Committee can conclusively rely on the valuations of the
Trust Fund in accordance with the Plan and the terms of the Trust.
5.6. MAINTENANCE OF ACCOUNTS SHALL NOT VEST ANY RIGHT IN
ASSETS. The establishment and maintenance of, or allocations and credits
to, the Account of any Participant shall not vest in any Participant any
right, title or interest in and to any Plan assets or benefits except at
the time or times and upon the terms and conditions and to the extent
expressly set forth in the Plan and in accordance with the terms of the
Trust.
5.7. LIMITATION ON COMPANY MATCHED CONTRIBUTIONS.
(a) Notwithstanding any other provision of this Section
5, the Actual Contribution Percentage for the Plan Year for Highly
Compensated Employees, as defined in Section 4.5(b), shall not exceed the
greater of the following Actual Contribution Percentage tests: (A) the
Actual Contribution Percentage for such Plan Year of those Eligible
Employees who are not Highly Compensated Employees multiplied by 1.25, or
(B) the Actual Contribution Percentage for the Plan Year of those Eligible
Employees who are not Highly Compensated Employees multiplied by 2.0;
provided that the Actual Contribution Percentage for Highly Compensated
Employees does not exceed the Actual Contribution Percentage for such other
Eligible Employees by more than two percentage points. For purposes of
this Section 5, the "Actual Contribution Percentage" for a Plan Year means,
for each specified group of Eligible Employees, the average of the ratios
(calculated separately for each Eligible Employee in such group) (the
"actual contribution ratio") of (A) the sum of (I) Company Matched
Contributions described in Section 5.1 made on account of Pre-tax
Contributions made during the Plan Year and allocated to the Participant's
Company Matched Account during the Plan Year and paid to the Trust within
12 months after the Plan Year for which such contributions are made (except
for Company Matched Contributions and Company Discretionary Contributions
which are nonforfeitable when made and which are subject to the distribu-
tion requirements under Section 1.401(k)-1(b) of the IRS Regulations, and
are used to meet the Actual Deferral Percentage test under Section 4.4) and
(II) if the Administrative Committee so elects in accordance with and to
the extend permitted by IRS Regulations, Pre-tax Contributions (including
excess contributions under Section 4.6 if the contribution would have been
received in cash by the Participant had the Participant not elected to
defer such amounts under Section 4.1) credited to his Pre-tax Contribution
Account, to (B) the amount of the Partici-pant's compensation (as defined
in Section 414(s) of the Code) for the Plan Year. An Eligible Employee's
Actual Contribution Percentage shall be zero if no contributions are made
on his behalf for such Plan Year. If the Plan and one or more other plans
of the Employer to which Pre-Tax Contributions, Company Matched
Contributions, or Company Discretionary Contributions are made are treated
as one plan for purposes of Sections 401(a)(4) and 410(b) of the Code, all
Pre-Tax Contributions, Company Matched Contributions, or Company
Discretionary Contributions of such plans shall be treated as being made
under a single plan for purposes of this Section 5.7. The actual
contribution ratio taken into account under this Section 5.7 for any Highly
Compensated Employee who is eligible to receive Company Matched Contri-
butions or Company Discretionary Contributions under two or more plans
described in Section 401(a) of the Code or arrangements described in
Section 401(k) of the Code that are maintained by the Employer shall be
determined as if all such contributions were made under a single plan. The
determination and treatment of the actual contribution ratio of any
Participant shall satisfy such other requirements as may be required by the
IRS Regulations. For purposes of determining the actual contribution ratio
of a Participant who is a Highly Compensated Employee subject to the family
aggregation rules of Section 414(q)(6) of the Code because such Employee is
either a five percent owner or one of the 10 most Highly Compensated
Employees as described in Section 414(q)(6) of the Code, the Company
Matched Contributions and Company Discretionary Contributions and
compensation (within the meaning of Section 414(s) of the Code) of such
Participant shall include the Company Matched Contributions and Company
Discretionary Contributions and compensation (within the meaning of Section
414(s) of the Code) of Family Members and such Family Members shall not be
considered as separate Eligible Employees in determining the Actual
Contribution Percentage.
(b) The Administrative Committee shall determine as of
the end of the Plan Year, and at such time or times in its discretion,
whether one of the Actual Contribution Percentage tests specified in
Section 5.7 is satisfied for such Plan Year. This determination shall be
made after first determining the treatment of excess deferrals within the
meaning of Section 402(g) of the Code under Section 4.2 and then
determining the treatment of excess contributions under Section 4.6. In
the event that neither of the Actual Contribution Percentage tests is
satisfied, the Administrative Committee shall refund or forfeit the excess
aggregate contributions in the manner described in Section 5.7. For
purposes of this Section 5.7, "excess aggregate contributions" means, with
respect to any Plan Year and with respect to any participant, the excess of
the aggregate amount of contributions (and any earnings and losses
allocable thereto) made to (A) the Company Contribution Account (except to
the extent used to meet the requirements of Section 4.4), and (B) the Pre-
Tax Contribution Account (to the extent permitted by the IRS Regulations
and if the Administrative Committee elects to take into account Pre-tax
Contributions when calculating the Actual Contribution Percentage under
Section 5.7(a)) of Highly Compensated Participants for such Plan Year, over
the maximum amount of such contributions that could be made to the Company
Contribution Account and Pre-tax Contribution Account of such Participants
without violating the requirements of Section 5.7((a). The amount of each
Highly Compensated Participant's excess aggregate contributions shall be
determined as follows: First, the actual contribution ratio of the Highly
Compensated Employee with the highest actual contribution ratio is reduced
to the extent necessary to satisfy the Actual Contribution Percentage test
under Section 5.7 (a) or cause such ratio to equal the actual contribution
ratio of the Highly Compensated Employee with the next highest ratio.
Second, the process is repeated until the Actual Contribution Percentage
test is satisfied. The amount of excess aggregate contributions for a
Highly Compensated Employee is then equal to the total of the contributions
taken into account for the Actual Contribution Percentage test minus the
product of the Employee's reduced actual contribution ratio as determined
above and the Employee's compensation (as defined in Section 414(s) of the
Code). This process shall be known as the levelling method, as described
in IRS Regulation Section 1.401(m)-1(e)(2). In the case of a Highly
Compensated Employee whose actual contribution ratio is determined under
family aggregation rules, the amount of excess aggregate contributions, as
defined in this Section 5.7(b), shall be determined by reducing the actual
contribution ratio in accordance with the leveling method described in this
Section 5.7(b) and the excess aggregate contributions are allocated among
the Family Members in proportion to the contributions of each Family Member
that have been combined.
(c) If the Administrative Committee is required to refund
or forfeit excess aggregate contributions for any Highly Compensated
Participant for a Plan Year in order to satisfy the requirements of Section
5.7(a), then the refund or forfeiture of such excess aggregate
contributions shall be made with respect to such Highly Compensated
Participants to the extent practicable before the 15th day of the third
month immediately following the Plan Year for which such excess aggregate
contributions were made, but in no event later than the end of the Plan
Year following such Plan Year or, in the case of the termination of the
Plan in accordance with Section 16, no later than the end of the 12-month
period immediately following the date of such termination. For each such
Participant, amounts so refunded or forfeited shall be made in the
following order of priority: (A) to the extent permitted by law, by
forfeiting nonvested amounts contributed to the Company Contribution Ac-
count, and earnings thereon; (B) by distributing vested amounts contributed
to the Company Contribution Account, and earnings thereon, of the Highly
Compensated Participant; and (C) by distributing amounts contributed to the
Pre-tax Contribution Account (to the extent such amounts are included in
the Actual Contribution Percentage), including amounts contributed to the
Company Contribution Account, and earnings thereon, to the extent such
amounts were based on Pre-tax Contributions so distributed, and earnings
thereon. However, in no case may the amount of excess aggregate
contributions refunded or forfeited with respect to any Highly Compensated
Employee exceed the amount of Company Matched Contributions under Section
5.1 made on behalf of the Highly Compensated Employee for the Plan Year.
All such distributions and forfeitures shall be made to, or shall be with
respect to, Highly Compensated Participants on the basis of the respective
portions of such amounts attributable to each such Highly Compensated
Participant as determined under Section 5.7(b). The distribution of any
excess aggregate contributions shall include the gains and losses allocable
thereto for the Plan Year, as well as for the period between the end of the
Plan Year and the date of the distribution. The gain or loss allocable to
excess aggregate contributions is the gain or loss allocable to the
Participant's Company Contribution Account attributable to contributions
under Section 5.1 (and any Pre-tax Contribution included in the Actual
Contribution Percentage test) to the extent not included in the Actual
Deferral Percentage test multiplied by a fraction, the numerator of which
is the excess aggregate contribution for the Participant of the Plan Year
and the denominator is the Participant's Company Contribution Account
attributable to contributions under Section 5.1 (and all amounts treated as
such for purposes of the Actual Contribution Percentage test) at the end of
such Plan Year, without regard to gains and losses attributable to such
Accounts for the Plan Year. The amount of any forfeitures made pursuant to
the Section 5.7 shall be used to reduce Employer Contributions in
accordance with Section 8.4.
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<PAGE>
SECTION 6. ALLOCATION OF COMPANY CONTRIBUTIONS
6.1. ALLOCATION OF DISCRETIONARY COMPANY CONTRIBUTIONS. The
Administrative Committee shall allocate the contribution of each
Participating Company made in accordance with Section 5.2 among all
Participants who (i) are employed by a Participating Company as of the last
day of the Plan Year and (ii) eligible to receive a Company Contribution
pursuant to Section 5.2. The contribution shall be allocated to the
Company Discretionary Contribution Account of each such eligible Partici-
pant based upon a Social Security integrated formula, in accordance with
Section 6.2.
A contribution shall be allocated with respect to a Participant
whose participation in the Plan terminated during the Plan Year because of:
(i) the attainment of (1) age 65 or (2) age 55 and the
completion of 10 Years of Service.
(ii) his death or
(iii) his Disability,
even if he was not employed by the Employer on the last day of the Plan
Year. If the Plan fails to satisfy Section 401(a)(26) of the Code, Company
Contributions under Section 5.2 shall be allocated among the Eligible
Employees who are Participants for the Plan Year in which such
contributions are made, in the proportion that the Compensation of each
Participant bears to the total Compensation of all Participants for such
Plan Year based upon a Social Security integrated formula.
6.2. DISCRETIONARY COMPANY CONTRIBUTION FORMULA. The
Discretionary Company Contribution will be allocated to the Participant's
Accounts based on their Compensation for the Calendar Year.
The Contribution to a Participant will be the total of his Base
Compensation multiplied by the Base Contribution Percentage plus his Excess
Compensation multiplied by the Excess Contribution Percentage.
The Base Contribution Percentage (X) equals the Company
Discretionary Contribution (A) divided by the sum of the Base Compensation
of all Participants (C) plus 2 times the Excess Compensation of all
Participants (B).
X = A / (C + 2B)
The Excess Contribution Percentage (Y) equals 2 time the Base
Contribution Percentage (X).
Y = 2X
6.3 ALLOCATION OF MATCHING CONTRIBUTION. A Participating
Company's Matching contribution for any Taxable Year under Section 5.1
shall be allocated by the Administrative Committee or its agent, as
promptly as administratively possible after such contribution shall have
been made, to the Matching Contribution Account of each Participant on
whose behalf a Matching Contribution has been made.
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<PAGE>
SECTION 7. INVESTMENT OF CONTRIBUTIONS
7.1. INVESTMENT BY TRUSTEES. All monies, securities or other
property received as contributions under the Plan shall be delivered to the
Trustee, to be managed, invested, reinvested and distributed for the
exclusive benefit of the Participants and their Beneficiaries in accordance
with the Plan, the Trust and any agreement with an insurance company or
other financial institution constituting a part of the Plan and the Trust.
7.2. INVESTMENT FUNDS.
(a) The Trust shall consist of the Investment Funds, in
each of which each Participant who has any interest therein shall have an
undivided proportionate interest. The Investment Committee shall have,
from time to time and at any time, the right to establish additional
Investment Funds to implement and carry out investment objectives and
policies as established by the Investment Committee. The Investment
Committee may from time to time delete Investment Funds on at least 30
days' prior written notice to the Trustee. Each Participant's undivided
proportionate interest in each Investment Fund of the Trust shall be
measured by the proportion that his account balance in such Investment Fund
bears to the total account balances of all Participants in that Investment
Fund as of the date that such interest is being determined.
(b) The Investment Funds shall consist of the following
investments:
(1) A "Company Stock Fund" which shall be invested
solely in the common stock of Ogden Corporation.
(2) An "Equity Fund" which shall be invested by a
professional manager or managers in such other
companies' common stocks and other securities
whose investment objectives are a blend of
targets for appreciation, current income and
growth in dividends;
(3) A "Fixed Income Fund" which shall be invested
in guaranteed interest contracts with one or
more insurance companies or banks, with the
earnings of such contracts being blended for
allocation purposes.
(4) A "Merrill Lynch Treasury Fund" which invests
in a portfolio of U.S. Treasury Notes with
maturities not exceeding one year.
7.3. INVESTMENT ELECTIONS.
(a) A Participant's contributions and Company
Contributions shall be invested, at the written election of the
Participant, in accordance with one of the following options:
(i) 100% in one of the available Investment Funds;
or
(ii) in more than one Investment Fund allocated in
multiples of 5%.
If a Participant does not make a written election, he shall be deemed to
have elected to have his invested funds in the Merrill Lynch Treasury Fund.
Each Participant is solely responsible for the selection of his investment
options and the availability of an Investment Fund to Participants for
investment under the Plan shall not be construed as a recommendation for
investment in such Investment Fund.
(b) Any investment direction given by a Participant shall
be deemed to be a continuing direction until changed. A Participant may
change his investment election under paragraph (a) with respect to future
contributions as of the first day of each calendar quarter, provided, that
such direction is given in writing, by filing an appropriate form with the
Administrative Committee at least 30 days prior to such date or such
earlier date as permitted by the Administrative Committee in accordance
with rules uniformly applicable to Participants on a nondiscriminatory
basis.
(c) Subject to such rules as may be imposed by the
Trustee or other financial institution, a Participant may elect to transfer
amounts in his Account among the Investment Funds as of the first day of
each calendar quarter, provided that such direction is given in writing by
filing an appropriate form with the Administrative Committee at least 30
days prior to such date. A Participant may transfer such amounts among the
Investment Funds such that the value of his Account is invested 100% in one
of the available Investment Funds or in more than one Investment Fund
allocated in multiples of five percent.
(d) The net credit balances in Participant's Accounts in
the respective Investment Funds of the Trust Fund shall be adjusted, upward
or downward, pro rata, so that such net credit balances will reflect the
investment earnings of each Investment Fund of the Trust Fund as of that
Valuation Date, using fair market values as determined by the Trustee and
reported to the Administrative Committee, after such investment earnings
for the appropriate Investment Fund has been reduced by any expenses
chargeable to that Investment Fund which have been paid and which may be
incurred but not yet paid.
<PAGE>
<PAGE>
SECTION 8. VALUATIONS AND ADJUSTMENTS
8.1. SEPARATE ACCOUNTS. The Administrative Committee shall
maintain separate accounts in accordance with Section 4 and 5 for each
Participant in the Plan and such other accounts pursuant to Appendix A.
The Account of each Participant shall be credited with contributions made
on his behalf by a Participating Company and with earnings attributable to
the assets held in his Account in accordance with Section 8.2. A Participant's
Account shall be reduced by all payments made to him or on
his behalf by any amounts forfeited by him in accordance with Section
9.3(b) and by any net losses attributable to the assets held in his Account.
8.2. ALLOCATION OF EARNINGS AND LOSSES VALUATION OF TRUST.
(a) As of each Valuation Date in a Plan Year, and after giving
effect to any hardship withdrawal under Section 9.2(c), any loan under
Section 9.5, any transfer or rollover under Appendix A, but before giving
effect to the receipt and allocation of any Company Contribution or Employee
Pre-tax Contributions, and before giving effect to any repayments of loans
under Section 9.5, the participation of any new Participants in the Plan, any
adjustments, or any distributions under Section 11, all assets of the
respective Investment Funds shall be valued at fair market value as
determined by the Trustee.
The Trustee shall adjust the net credit balances in the
Accounts in the respective Investment Funds of the Trust Fund, upward or
downward, pro rata, so that such net credit balances will reflect the
investment earnings or losses of each Investment Fund of the Trust Fund as
of that Valuation Date, using fair market values as determined by the
Trustee and reported to the Administrative Committee. All determinations
made by the Trustee with respect to fair market values and investment
earnings shall be made in accordance with generally accepted principles of
trust accounting, and such determinations when so made by the Trustee and
any determinations by the Administrative Committee based thereon, shall be
conclusive and binding upon all persons having an interest under the Plan.
(b) With respect to the valuation of the shares held in
the Company Stock Fund pursuant to Section 7.2(b), the cash withheld from
Participants shall be delivered to the Trustee as soon as practicable.
Upon receipt of such cash, the Trustee shall purchase shares in the Company
Stock Fund as soon as practicable. The shares purchased shall be valued
under the Plan at the closing price as of the next succeeding Valuation
Date. Subsequent to the valuation of shares upon first entering the
Company Stock Fund, such shares shall be valued at the closing price as of
each Valuation Date thereafter.
8.3. EXPENSES. The expenses of administering the Plan,
including (i) the fees and expenses of any Employee and of the Trustee for
the performance of their duties under the Plan and the Trust, (ii) the
expenses incurred by the members of each of the Committees in the
performance of their duties under the Plan (including reasonable
compensation for any legal counsel, certified public accountants,
consultants, and agents and cost of services rendered in respect of the
Plan), and (iii) all other proper charges and disbursements of the Trustee
or the members of the Committees (including settlements of claims or legal
actions approved by counsel to the Plan) may be paid out of the Trust Fund,
and allocated to and deducted from the Accounts of Participants by the
Committees in accordance with the provisions of Section 8.2 above, if the
Company does not pay such expenses directly. However, the fees, expenses,
charges and disbursements attributable to any Investment Fund shall be
charged against the investment earnings of such Investment Fund as provided
in Section 8.2 unless such expenses are deducted from the income of such
Investment Fund, or, if such Investment Fund has no investment earnings in
that Plan Year, shall be deducted pro rata from the Accounts of
Participants electing to invest in such Investment Fund. The
Administrative Committee may, at its discretion, direct that certain
expenses shall be paid out of specified Investment Funds if the
Administrative Committee deems it appropriate to reflect the cost of such
Investment Funds.
8.4. ALLOCATION OF FORFEITURES. Subject to Section 9.3(c), any
forfeitures arising under the Plan shall be used to reduce the Company
Contributions specified in Section 5, and shall be allocated as Company
Contributions.
<PAGE>
<PAGE>
SECTION 9. ELIGIBILITY FOR BENEFITS
9.1. RETIREMENT DATE.
(a) Any Participant who has attained his Normal
Retirement Age or his Early Retirement Date, shall have a nonforfeitable
right to the value of his Account (reduced by any unpaid loans) and shall
be entitled to benefits equal to the full value of his Account.
(b) If a Participant remains in employment after his
Normal Retirement Date, or becomes a Participant after such date, he shall
participate in the contributions and benefits of the Plan in the same
manner as any other Participant. The deferred retirement date of a
Participant who continues in employment after his Normal Retirement Date
shall be the date of his termination of service.
(c) A Participant shall be considered to have retired for
the purposes of the Plan on the date his employment terminates on account
of his Disability, regardless of his age. The determination of the
Administrative Committee as to whether a Participant is disabled and the
date of such Disability shall be final, binding and conclusive.
9.2. DISTRIBUTION OF PARTICIPANT'S ACCOUNT ON RETIREMENT,
DEATH, DISABILITY, OR HARDSHIP.
(a) Upon the termination of service of a Participant on
or after his Normal Retirement Age (or by reason of his death or
Disability), an amount equal to the value of the Participant's Account as
of the Valuation Date coincident with or next following (i) the date
Service is terminated, provided that the Committee has received all the
necessary forms from the Participant shall be paid from the Trust Fund.
Such payment shall be by the method of distribution described and at the
time specified in Section 11 below.
(b) Subject to Section 11.3, if a former Participant dies
before payment of the full value of his Account from the Trust Fund, an
amount equal to the value of the unpaid portion thereof shall be paid to
his Beneficiary from the Trust Fund. Such payment shall be made as specified
in Section 11.
(c) Effective January 1, 1989, upon the receipt of a
written application from a Participant, the Administrative Committee may
distribute to a Participant any vested portion or all of a Participant's
Account that has been vested to the extent necessary to enable such
Participant to meet a Hardship in his financial affairs, provided that (i)
such Participant shall establish to the satisfaction of the Administrative
Committee, in accordance with principles and procedures established by the
Administrative Committee which are applicable to all persons similarly
situated, that a withdrawal to be made by him pursuant to this Section 9.2
is to be made by reason of an immediate and heavy financial need as defined
below and that such withdrawal is not in excess of the amount required to
relieve such immediate and heavy financial need, (ii) no amount in a
Participant's Account that is deemed invested in an outstanding loan to the
Participant may be withdrawn. A withdrawal by reason of an immediate and
heavy financial need under this Section 9.2 may be requested by a
Participant only after he has (i) withdrawn all employee contributions
permitted to be withdrawn under any other plan maintained by the Employer
and (ii) made all loans currently available under Section 9.5 or under any
other plan maintained by the Employer. The amount of any withdrawal
pursuant to this Section 9.2 shall not exceed the amount required to meet
the financial emergency. Subject to the provision of this Section 9.2,
each Participant may withdraw all or any portion of the vested aggregate
amount of his Pre-tax Contribution Account (excluding earnings on post 1988
Pre-tax Contributions) twice in a Plan Year.
A Participant shall give the Administrative Committee written
notice of a request for a withdrawal pursuant to the provisions of this
Section 9 in accordance with such procedures as the Administrative
Committee shall establish. No withdrawal pursuant to this Section 9 shall
be of an aggregate amount less than five hundred dollars ($500). In the
event a Participant who has requested a withdrawal terminates Service prior
to the effective date (as specified below) of the withdrawal, the
withdrawal request shall be void. Withdrawals shall become effective on
the last day of the valuation month during which the Administrative
Committee receives a properly executed withdrawal form, unless a later date
is requested therein, provided such request is received within the first 15
days of the month in which a withdrawal is requested. Payment of any
withdrawals pursuant to this Section 9 shall be made solely in cash. A
Participant who makes a hardship withdrawal pursuant to Section 9.2(c)
shall be suspended from making any further Pre-tax Contributions for a
period of twelve months, effective as of the next practicable payroll
following the effective date of the withdrawal. Notwithstanding any other
provision of the Plan, the Pre-tax Contributions of a Participant made in
the Plan Year following the Plan Year during which a withdrawal pursuant to
Section 9.2 was made, shall not exceed the applicable limit under Section
402(g) of the Code for such Plan Year less the amount of Pre-tax
Contributions made by the Participant during the Plan Year during which the
withdrawal pursuant to Section 9.2 was made.
For purposes of this Section, the term "Hardship" means a
situation in which a Participant or his dependents are confronted by
extreme financial need that cannot be satisfied from other sources.
Hardship situations shall be limited to extraordinary expenses resulting from:
(1) Medical expenses described in Section 213(d)
of the
Code incurred by the Participant, the Participant's
spouse, or any dependents of the Participant (as
defined in Section 152 of the Code);
(2) Purchase (excluding mortgage payments) of a principal
residence for the Participant;
(3) Payment of tuition for the next 12 months of post-
secondary education for the Participant, his spouse,
children, or dependents;
(4) The need to prevent the eviction of the Participant
from his principal residence or foreclosure on the
mortgage of the Participant's principal residence;
and
(5) Such other immediate and heavy financial emergency as
determined by the Administrative Committee pursuant
to uniformly applicable guidelines and regulations.
9.3. DISTRIBUTION ON OTHER TERMINATION OF SERVICE. Upon the
termination of service of any Participant which occurs other than on his
retirement and for any reason other than death or Disability, the
terminated Participant shall be paid in a lump sum (other than shares held
in the Company Stock Fund) an amount equal to the vested value of his
Account if the terminated Participant files appropriate forms requesting a
distribution from the Plan his Account will be valued as of he Valuation
Date coincident with or following the later of (i) the effective date of
termination of service, (ii) the date of termination from the payroll or
(iii) the submission of the appropriate forms requesting a distribution.
9.4. IN-SERVICE WITHDRAWALS. Notwithstanding the provisions of
Section 9.2 the Administrative Committee may distribute to a Participant on
the first day of any month following (i) his attainment of age 59-1/2 and
(ii) the receipt of a written application, in a lump sum an amount equal to
all or any part of the vested value of a Participant's Account.
9.5. LOANS. Effective January 1, 1991, a Participant shall be
entitled to apply for a loan from the vested value of his Account (other
than shares held in the Company Stock Fund); provided, however, such
Participant gives at least 30 days' prior written notice to the
Administrative Committee. The maximum amount available for a loan under
the Plan (when added to the outstanding balance of all other loans from the
Plan to the Participant) shall not exceed 50% of the vested portion of the
Participant's Account up to the maximum of $50,000. A loan equal to
$50,000 must be reduced by the excess (if any) of (i) the highest
outstanding loan balance attributable to the Account of the Participant
requesting the loan during the one-year period ending on the day preceding
the date of the loan, over (ii) the outstanding balance of all other loans
from the Plan to the Participant on the date of the loan. Loans shall be
granted in $50.00 increments with $500.00 established as the minimum amount
of any loan. Authorization for such loans and the terms thereof shall be
in the sole discretion of the Administrative Committee pursuant to uniform,
non-discriminatory rules consistently applied to all Participants. Two
loans are permissible under the Plan, one for a general financial
difficulty as determined and approved by the Committee, and one for the
purchase of a primary residence. The Committee shall not grant a loan to
any Participant unless and until a current unpaid loan for the same purpose
including accrued interest, has been liquidated. A Participant may
renegotiate both of his loans once during a Taxable Year.
As a condition for obtaining a loan, the Participant shall
execute a promissory note payable to the Trust Fund authorizing the
repayment of the loan through payroll deductions, a reasonable maturity
date (subject to the restrictions described below) and a rate of interest
equal to the Trustee's announced prime lending rate plus 1% as in effect on
the 1st business day of each month. The payment schedule shall provide for
substantially level amortization with payments not less frequently than
quarterly, equal to the amount necessary to amortize the balance due at
maturity. The maturity date for any loan will not be more than five years
after the date of the loan except for loans to acquire a principal
residence which will have a maturity date that is not more than ten years
after the date of the loan.
Each payment of principal and interest shall be transmitted to
the Trustee as soon as practicable after receipt by the Participating
Company. The outstanding balance of any loan may be fully repaid at any
time without penalty.
If a Participant has obtained a loan and subsequently defaults
in making any repayment installment when due, and such default continues
for 90 days thereafter, or in the event of the Participant's bankruptcy,
impending bankruptcy, insolvency or impending insolvency, the loan shall be
deemed to be in default and the entire unpaid balance shall immediately
become due and payable. However, at the option of the Administrative
Committee, the installments in default and all future installments may
instead be withheld from the Participant's compensation. If the unpaid
balance becomes due and payable at any time, the Administrative Committee
may direct the Trustee to pursue collection of the debt by any means
generally available to a creditor where a promissory note is in default.
If there remains any unpaid balance due on a loan to a Participant at the
time his employment terminates for any reason, the loan shall terminate and
the Trustee shall distribute to the Participant the promissory note
evidencing the loan. However, the Participant, or his Beneficiary, shall
have the right to repay such unpaid balance before receiving a distribution
of his Account pursuant to Section 11.
In no event shall any repayment of principal amounts on a loan
obtained under this Section, or interest thereon, be taken into account in
determining whether the limitations described in Section 12 (to conform to
the requirements of Section 415 of the Code) are exceeded.
9.6. RESTRICTIONS ON DISTRIBUTIONS. Notwithstanding any other
provision of the Plan, a Participant's Pre-tax Contribution Accounts may
not be distributed earlier than upon one of the following events:
(a) The Participant's Normal or Early Retirement, death,
Disability or termination of service;
(b) The termination of the Plan without the establishment
or maintenance of another defined contribution plan
(other than an employee stock ownership plan or a
simplified employee plan);
(c) the Participant's attainment of age 59-1/2 or upon
the Participant's Hardship; or
(d) The sale or disposition by the Employer to an
unrelated corporation of (i) substantially all of the
assets used in a trade of business or (ii) the
Employer's interest in a subsidiary, but only with
respect to Participants who continue employment with
the acquiring corporation or the subsidiary, as the
case may be, and the acquiring corporation does not
maintain the Plan after the disposition.
9.7. DIRECT ROLLOVERS. Effective on or after January 1, 1993
(a) Distributee may elect, at a time and manner as
permitted by the Administrative Committee, to have any portion of an
Eligible Rollover Distribution paid as a Direct Rollover to an Eligible
Retirement Plan, as specified by the Distributee.
(b) For purposes of the Section 9.7, the following terms
shall have the following meanings:
(i) "Eligible Rollover Distribution" means any
distribution of all or any portion of a
Distributee's Account other than a distribution
required by Section 401(a)(9) of the Code.
(ii) "Eligible Retirement Plan" means any plan or
program that is (1) an individual retirement
account, as described in Section 408(a) of the
Code, (2) an individual retirement annuity, as
described in Section 408(b) of the Code, (3) an
annuity plan, as described in Section 403(a) of
the Code, or (4) a qualified plan and tax-
exempt trust, as described in Sections 401(a)
and 501(a) of the Code; and for a Distributee
that is the Surviving Spouse, an Eligible
Retirement Plan means any plan or program that
is an (1) individual retirement account or (2)
individual retirement annuity, as described in
Sections 408(a) and 408(b) of the Code,
respectively.
(iii) "Distributee" means a Participant or former
Participant. A Participant's or former
Participant's Surviving Spouse, or a spouse of
a Participant or former Participant who is an
alternative payee under a Qualified Domestic
Relations Order, described in Section 17.5,
with regard to the interest of the spouse or
former spouse in the Participant's or former
Participant's Account, shall be a Distributee.
(iv) "Direct Rollover" means a distribution by the
Plan to an Eligible Retirement Plan as
specified by the Distributee.
(c) The provisions of this Section 9.7 shall apply to
distributions made on or after January 1, 1993.
<PAGE>
<PAGE>
SECTION 10. VESTED INTERESTS
10.1. PRE TAX CONTRIBUTIONS. A Participant will be 100%
vested and have a nonforfeitable right to the value of the Pre Tax
Contribution Accounts (401(k) Matched Account and 401(k) Unmatched Account).
10.2. COMPANY CONTRIBUTIONS. A Participant will become
100% vested and have a nonforfeitable right to the value of the Company
Contribution Accounts (Company Matched, Company Prior, Company
Discretionary Accounts) upon completion of five years of Vesting Service.
If a Participant was eligible to participate in the Plan on December 31,
1990, they will be vested in all future and past Company Contributions.
10.3. TRANSFERRED ACCOUNTS. A Participant will be 100%
vested in all accounts transferred to this Plan as referenced in Appendix A.
10.4. BREAK IN SERVICE FOR VESTING.
(a) If the terminated Participant incurs five consecutive
Breaks in Service or dies before he returns to employment, any excess of
the amount credited to such terminated Participant's Account over his
Vested Interest shall be permanently forfeited by him upon the fifth such
consecutive Break in Service, upon his death or upon receipt of his Vested
Interest upon termination of service, whichever is earlier.
(b) If the terminated Participant returns to service
prior to incurring five consecutive Breaks in Service, any excess of the
amount credited to such terminated Participant's Account over his Vested
Interest shall be reinstated and recredited, if necessary, by additional
contributions by his Participating Company to the Participant's Company
Contribution Account as of the last day of the month in which the
terminated Participant performs an Hour of Service, the last day of the
next following month or by a priority reallocations of the then current
forfeitures. As of any Valuation Date thereafter, such Participant's
Vested Interest shall be determined by (i) adjusting the amount of his
Account on the date of his most recent termination of service as if such
amount had been held in the Trust since the date of distribution as
provided in Section 8, ("adjusted previous account"), and then (iii)
multiplying his Vested Interest by his adjusted total account, and then
(iv) subtracting the amount of his distribution on his most recent
termination of service, adjusted as if such distribution had been held in
the Trust since the date of his distribution as provided in Section 8, from
his adjusted total account. Such Participant may repay to the Plan, in one
lump cash sum within two years after reemployment, the full amount
distributed to him pursuant to his prior termination of service. Any
amount repaid pursuant to this Section 9.3(c) shall be invested in the
Investment Funds in the proportions selected in the most recent written
election filed by the Participant with the Administrative Committee
pursuant to Section 7.3.
<PAGE>
<PAGE>
SECTION 11. METHOD OF PAYMENT OF BENEFITS
11.1. PAYMENT OF BENEFITS. Any benefit payable under the
Plan pursuant to Section 9 shall be paid in one lump cash sum. However, a
Participant may elect to receive the value of his Company Stock Fund in
shares of Ogden Corporation Common Stock.
11.2. COMMENCEMENT OF PAYMENT.
(a) Any benefit payable to a Participant under Section
11.1 shall be paid within 60 days after the end of the Plan Year in which
an event specified in Section 9 occurs; provided, however, that a Participant
may defer the distribution. Any amount so deferred shall
remain in the Participant's Account until distributed; provided, however,
such Participant shall not share in any contribution pursuant to Sections
5.1 or 5.2 but shall share in any earnings, losses, and expenses pursuant
to Sections 8.2 and 8.3.
(b) Notwithstanding any other provision of the Plan,
unless otherwise provided by law, any benefit payable to a Participant
shall commence no later than the April 1st of the calendar year following
the calendar year in which such Participant attains age 70-1/2; provided,
however, if a Participant attained age 70-1/2 prior to January 1, 1988,
except as otherwise provided, any benefit payable to such Participant shall
commence no later than April 1st of the calendar year following the later
of (i) the calendar year in which the Participant attains age 70-1/2 or
(ii) the calendar year in which Participant retires. Such benefit shall be
paid, in accordance with the Regulations, over a period not extending
beyond the life expectancy of such Participant and his Beneficiary. Life
expectancy for purposes of this Section shall not be recalculated annually
in accordance with the Regulations.
(c) If distribution of a Participant's benefit has
commenced prior to a Participant's death, and such Participant dies before
his entire benefit is distributed to him, distribution of the remaining
portion of the Participant's benefit to the Participant's Beneficiary shall
be made at least as rapidly as under the method of distribution in effect
as of the date of the Participant's death.
(d) If a Participant dies before distribution of his
benefit has commenced, distributions to any Beneficiary shall be made on or
before the December 31st of the calendar year which contains the fifth
anniversary of the date of such Participant's death; provided, however, at
the Beneficiary's irrevocable election, duly filed with the Committee
before the applicable commencement date set forth in the following
sentence, any distribution to a Beneficiary may be made over a period not
extending beyond the life expectancy of the Beneficiary. Such distribution
shall commence not later than the December 31st of the calendar year
immediately following the calendar year in which the Participant would have
attained age 70-1/2, if later (or, in either case, on any later date
prescribed by the Regulations). If such Participant's Surviving Spouse
dies after such Participant's death but before distributions to such
Surviving Spouse commence, this Subsection (d) shall be applied to require
payment of any further benefits as if such Surviving Spouse were the
Participant.
(e) If a Participant dies before distribution of his
benefit has commenced, distributions to any Beneficiary shall be made on or
before the December 31st of the calendar year which contains the fifth
anniversary of the date of such Participant's death.
(f) Pursuant to the Regulations, any benefit paid to a
child shall be treated as if paid to a Participant's Surviving Spouse if
such amount will become payable to such Surviving Spouse on the child's
attaining majority, or other designated event permitted by the Regulations.
(g) If a Participant who is a five percent owner attained
age 70-1/2 before January 1, 1988, any benefit payable to such Participant
shall commence no later than the April 1st of the calendar year following
the later of (i) the calendar year in which the Participant attains age 70-
1/2 or (ii) the earlier of (A) the calendar year within which the
Participant becomes a 5% owner or (B) the calendar year in which the
Participant retires. For purposes of this Subsection (g), a five percent
owner shall mean a five percent owner of such Participant's Employer as
defined in Section 416(i) of the Code at any time during the Plan Year in
which such owner attains age 66 or any subsequent Plan Year.
11.3. TIME OF PAYMENT
(a) ANY ELECTION UNDER SECTION 11.1 must be made by the
payee upon or following the Participant's termination of employment by
reason of his retirement, death, or Disability but prior to the date that
payments commence pursuant to the provisions of the Plan. In any event,
payments shall be made no later than the 60th day following the date on
which the amount of the payment under the Plan (or in the case of more than
one payment, the first said payment) can be ascertained under the Plan.
(b) Notwithstanding any other provision of the Plan, to
the extent required by the Code and the Regulations, if the value of a
Participant's Account exceeds or ever exceeded $3,500, no distribution
shall be made to such Participant prior to the date he attains his Normal
Retirement Age without his written consent. In the absence of receipt of
such consent by the Administrative Committee prior to the 60th day
following the date of the Participant's termination of Service, payment of
the benefit to such Participant may commence as soon as practical after the
Participant's attainment of Normal Retirement Age, which benefit shall be
in an amount equal to the value of the Participant's Account as of the
Valuation Date coincident with or immediately following the Participant's
attainment of Normal Retirement Age.
(c) Benefits payable under the Plan to a Participant or
Beneficiary from the Company Stock Fund, other than hardship withdrawals or
loans made pursuant to Section 9, shall be paid cash, unless the Participant
elects to receive such distribution in whole shares of the
stock held in such Investment Fund or Funds (containing such legends and
upon such terms and conditions and restrictions as the Committee may, in
its sole discretion, direct), together with any cash credited to his
Account either awaiting investment in such stock or representing fractional
shares of such stock.
<PAGE>
<PAGE>
SECTION 12. MAXIMUM AMOUNT OF ALLOCATION
12.1. APPLICATION OF SECTION 12. The provision of this
Section 12 shall govern notwithstanding any other provisions of the Plan.
12.2. MAXIMUM ADDITIONS TO ACCOUNT. Annual Additions to a
Participant's Account may not exceed the lesser of (a) $30,000 or, if
greater, one-fourth of the defined benefit dollar limitation set forth in
Section 415(b)(1)(A) of the Code as in effect, or (b) 25% of the
Participant's compensation (as defined in Section 415(c) of the Code). For
this purpose, the term "Annual Additions" shall mean the sum of the
following amounts which without regard to this Section 12 would have been
credited to the Participant's Account for any Plan Year under the Plan and
under any other defined contribution plans of the Employer or an Affiliate:
(i) Company Contributions; (ii) Pre-tax Contributions; (iii) contributions
allocated to any individual medical account defined in Section 416(i) of
the Code, the amount allocated to a separate account established for post-
retirement medical or life insurance benefits of such Participant described
in Section 419A(d)(1) of the Code. The term Annual Additions shall
include, whether or not refunded, excess deferrals as described in Section
4.2. Solely for purposes of this Section, Annual Additions shall include a
Participant's contributions under a qualified cost-of-living arrangement
described in Section 415(k)(2) of the Code.
12.3. ORDER OF REDUCTION. If as a result of a reasonable
error in estimating a Participant's Compensation, a reasonable error in
determining the amount of Pre-tax Contributions, or under such other facts
and circumstances as determined by the IRS, including the limitations of
Section 12.2, amounts which would otherwise be allocated to a Participant's
Account must be reduced, such reduction shall be made in the following
order of priority, but only to the extent necessary:
(a) Company Contributions made pursuant to Section 5.1
and 5.2 allocable to such Participant in respect of
such Plan Year shall be reduced and the amount of
such reduction shall be utilized to reduce Company
Contributions which would otherwise be made to the
Plan; and then
(b) to the extent permitted by the Code and the
Regulations, the amount of Pre-tax Contributions,
exclusive of any earnings of the Trust Fund
attributable thereto, shall be refunded to the
Participant or, to the extent required by law, shall
be held unallocated in a suspense account and shall
be applied, as directed by the Administrative
Committee in accordance with the law and regulations,
as a credit to reduce the contributions of the
Employer for the next Plan Year and in the event of
termination of the Plan shall be returned to the Em-
ployer.
12.4. ADDITIONAL ACCOUNT LIMITATIONS.
(a) In the event that, in any Plan Year and with respect
to any Participant, the sum of the "Defined Contribution Fraction" (as
defined in paragraph (b)(1)), the "Defined Benefit Fraction" (as defined in
paragraph (b)(2)) would otherwise exceed 1.0, the benefit payable under the
defined benefit plan shall be reduced in accordance with the provisions of
that plan, but only to the extent necessary to ensure that such limitation
is not exceeded.
(b) For purposes of paragraph (a) of this Section 12.4,
the following terms shall have the following meanings:
(1) "Defined Contribution Fraction" shall mean, as
to any Participant for any Plan Year, a
fraction, (i) the numerator of which is the sum
of Annual Additions, for the Plan Year and all
prior Plan Years, as of the close of the Plan
Year and (ii) the denominator of which is the
sum of the lesser of the following amounts,
determined for such Plan Year and for each
prior Plan Year (A) the product of 1.25
multiplied by the dollar limitation in effect
for such Plan Year under Section 12.2(a) or (B)
the product of 1.4 multiplied by the amount
which may be taken into account under Section
12.2(b) with respect to the Participant for
such Plan Year; provided, however, that, for
years ending prior to January 1, 1976, the
numerator of such fraction shall in no event be
deemed to exceed the denominator of such
fraction; and, further provided, that the
Administrative Committee, in determining the
Defined Contribution Fraction may elect to use
the special transitional rules permitted by
Section 415 of the Code and the Regulations
thereunder; and
(2) "Defined Benefit Fraction" shall mean, as to
any Participant for any Plan Year, a fraction,
(i) the numerator of which is the projected
annual benefit (determined as of the close of
the Plan Year and in accordance with the
Regulations) of the Participant under any
defined benefit plan (as defined in Section
414(j) and 415(k) of the Code) maintained by
the Company or any Affiliate and (ii) the
denominator is the lesser of (A) the product of
1.25 multiplied by the dollar limitation in
effect under Section 415(b)(1)(A) of the Code
for such Plan Year or (B) the product of 1.4
multiplied by an amount equal to 100% of the
Participant's average compensation for his high
three years within the meaning of Section
415(b)(3) of the Code for such Plan Year.
<PAGE>
<PAGE>
SECTION 13. DESIGNATION OF BENEFICIARIES
13.1. BENEFICIARY DESIGNATION. Each Participant shall file
with the Administrative Committee a written designation of one or more
persons as the Beneficiary who, subject to this Section 13.1, shall be
entitled to receive the amount, if any, payable under the Plan upon his
death. A Participant may from time to time revoke or change his
beneficiary designation without the consent of any prior Beneficiary by
filing a new designation with the Administrative Committee; provided,
however, that if a Participant's spouse has consented to the designation of
a Beneficiary as provided in Section 13.1, and the Participant revokes such
beneficiary designation, no new beneficiary designation shall be effective
unless it complies with Section 13.1. The last such designation received
by the Administrative Committee shall be controlling; provided, however,
that no designation, or change or revocation thereof, shall be effective
unless received by the Administrative Committee prior to the Participant's
death, and in no event shall it be effective as of a date prior to such
receipt. If a Beneficiary shall die prior to receiving the distribution
that would have been made to such Beneficiary had such Beneficiary's death
not occurred, then for the purposes of the Plan the distribution that would
have been received by such Beneficiary shall be made to the Beneficiary's
estate.
13.2. FAILURE TO DESIGNATE BENEFICIARY. Subject to Section
13.1, if no such beneficiary designation is legally in effect at the time
of a Participant's death, or if no designated Beneficiary survives the
Participant, the payment of the amount, if any, payable under the Plan upon
his death shall be made to the Participant's estate. If the Administrative
Committee is in doubt as to the right of any person to receive such amount,
the Administrative Committee may direct the Trustee to retain such amount,
without liability for any interest thereon, until the rights thereto are
determined, or the Administrative Committee may direct the Trustee to pay
such amount into any court of appropriate jurisdiction and such payment
shall be a complete discharge of the liability of the Plan and the Trust.
<PAGE>
<PAGE>
SECTION 14. ADMINISTRATION OF THE PLAN
14.1. POWERS AND DUTIES OF ADMINISTRATIVE COMMITTEE. The
Administrative Committee shall have general responsibility for the
administration and interpretation of the Plan (including, but not limited
to, complying with reporting and disclosure requirements, and establishing
and maintaining Plan records). The Administrative Committee shall engage
certified public accountants, who may be accountants for the Company, as it
shall require or may deem advisable for purposes of the Plan. The
Administrative Committee shall communicate any requirements and objectives
of the Plan, and any audit information which may be pertinent to the
investment of Plan assets to the Investment Committee, which shall
establish investment standards and policies and communicate the same to the
Trustee (or other funding agencies under the Plan). The Administrative
Committee shall have no responsibility for the investment of assets under
the Plan or the Trust.
14.2. POWERS AND DUTIES OF INVESTMENT COMMITTEE. The
Investment Committee shall periodically review the investment performance
and methods of the Trustee and any other funding agency, including any
insurance company, under the Plan. The Board of Directors shall have the
authority to appoint, remove or change the Trustee and any other funding
agency. The Investment Committee shall have the power to appoint or remove
one or more investment advisers and to delegate to such adviser authority
and discretion to manage (including the power to acquire and dispose of)
the assets of the Plan, provided that (i) each adviser with such authority
and discretion shall be either a bank, an insurance company or a registered
investment adviser under the Investment Advisers Act of 1940, and shall
acknowledge in writing that it is a fiduciary with respect to the Plan and
(ii) the Investment Committee shall periodically review the investment
performance and methods of each adviser with such authority and discretion.
If annuities are to be purchased under the Plan, the Investment Committee
shall determine what contracts should be made available to terminated
Participants or purchased by the Trust.
14.3. POWERS AND DUTIES OF TRUSTEE. The Trustee shall have
responsibility under the Plan for the management and control of the assets
of the Plan and shall have responsibility for the investment and management
of such assets to the extent that such assets are invested in an Investment
Fund or the Trustee has been appointed an investment adviser pursuant to
Section 14.2.
14.4. AGENTS, REPORT OF COMMITTEES TO BOARD. The
Administrative Committee and the Investment Committee may arrange for the
engagement of such legal counsel who may be counsel for the Employer, and
make use of such agents and clerical or other personnel as they each shall
require or may deem advisable for purposes of the Plan. Each of the
Committees may rely upon the written opinion of such counsel and the
accountants engaged by the Administrative Committee and may delegate to any
such agent or to any sub-committee or member of such Committee its
authority to perform any act hereunder, including without limitation, those
matters involving the exercise of discretion, provided that such delegation
shall be subject to revocation at any time at the discretion of each of the
said Committees. Each of the Committees shall report to the Board of
Directors, or to a committee of the Board of Directors designated for that
purpose, as frequently as shall be specified by the Board of Directors or
such committee, with regard to the matters for which it is responsible
under the Plan.
14.5. STRUCTURE OF COMMITTEES. The Administrative
Committee and the Investment Committee each shall consist of three or more
members, each of whom shall be appointed by, shall remain in office at the
will of, and may be removed, with or without cause, by the Board of
Directors. A majority of the members of the Administrative Committee shall
be Employees (who may also be Directors.) Any member of either of the
Committees may resign at any time. No member of either of the Committees
shall be entitled to act on or decide any matter relating solely to himself
or any of his rights or benefits under the Plan. In the event the
Administrative Committee is unable to act in any matter by reason of the
foregoing restriction, the Board of Directors shall act on such matter.
The members of the Committees shall not receive any special compensation
for serving in their capacities as members of such Committees but shall be
reimbursed for any reasonable expenses incurred in connection therewith.
Except as otherwise required by the Act, no bond or other security need be
required of the Committees or any member thereof in any jurisdiction. Any
person may serve on both of the Committees and any member of either of the
Committees, any subcommittee or agent to whom either of the Committees
delegates any authority, and any other person or group of persons, may
serve in more than one fiduciary capacity (including service both as a
trustee and administrator) with respect to the Plan.
14.6. ADOPTION OF PROCEDURES OF COMMITTEES. Each Committee
shall establish its own procedures and the time and place for its meetings,
and provide for the keeping of minutes of all meetings. A majority of the
members of a Committee shall constitute a quorum for the transaction of
business at a meeting of such Committee. Any action of a Committee may be
taken upon the affirmative vote of a majority of the members of the Commit-
tee at a meeting or without a meeting, by mail, telegraph or telephone,
provided that all of the members of the Committee are informed by mail or
telegraph of their right to vote on the proposal and of the outcome of the
vote thereon.
14.7. DEMANDS FOR MONEY. All demands for money of the Plan
shall be signed by an officer or officers or such other person or persons
as the Administrative Committee may from time to time designate in writing
who shall cause to be kept full and accurate accounts of receipts and
disbursements of the Plan, shall cause to be deposited all funds of the
Plan to the name ad credit of the Plan, in such depositories as may be
designated by the Investment Committee, shall cause to be disbursed the
monies and funds of the Plan when so authorized by the Administrative
Committee and shall generally perform such other duties as may be assigned
to him from time to time by either of the Committees.
14.8. CLAIMS FOR BENEFITS. All claims for benefits under
the Plan shall be submitted in writing to, and within a reasonable period
of time decided by, one person designated in writing by the Administrative
Committee. Written notice of the decision on each such claim shall be
furnished reasonably promptly to the claimant. If the claim is wholly or
partially denied, such written notice shall set forth an explanation of the
specific findings and conclusions on which such denial is based. A
claimant may review all pertinent documents and may request a review by the
Administrative Committee of such a decision denying the claim. Such a
request shall be made in writing and filed with the Administrative
Committee within a reasonable period of time, as specified by the
Administrative Committee in writing from time to time, after delivery to
said claimant of written notice of said decision by the Administrative
Committee. Such written request for review shall contain all additional
information which the claimant wishes the Administrative Committee to
consider. The Administrative Committee may hold any hearing or conduct any
independent investigation which it deems necessary to render its decision,
and the decision on review shall be made as soon as possible after the
Administrative Committee's receipt of the request for review. Written
notice of the decision on review shall be promptly furnished to the
claimant and shall include specific reasons for such decision by the
Administrative Committee. For all purposes under the Plan, such decisions
on claims (where no review is requested) and decisions on review (where
review is requested) shall be final, binding and conclusive on all
interested persons as to participation and benefit eligibility, the
employee's amount of Compensation and as to any other matter of act or
interpretation relating to the Plan.
14.9. HOLD HARMLESS. To the maximum extent permitted by
law, no member of the Administrative Committee or the Investment Committee
shall be personally liable by reason of any contract or other instrument
executed by him or on his behalf in his capacity as a member of such
Committee nor for any mistake of judgment made in good faith, and the
Employer shall indemnify and hold harmless, directly from its own assets
(including the proceeds of any insurance policy the premiums of which are
paid from the Employer's owns assets), each member of the Administrative
Committee and the Investment Committee and each other officer, employee, or
director of the Employer to whom any duty or power relating to the
administration or interpretation of the Plan or to the management and
control of the assets of the Plan may be delegated or allocated, against
any cost or expense (including counsel fees) or liability (including any
sum paid in settlement of a claim with the approval of the Company) arising
out of any act or omission to act in connection with the Plan unless
arising out of such person's own fraud or bad faith.
14.10. SERVICE OF PROCESS. The Secretary of the Company, or
such other person as may from time to time be designated by the Board of
Directors shall be the agent for service of process under the Plan.
14.11. SPECIFIC POWERS AND DUTIES. The Administrative
Committee and the Investment Committee each shall have only those specific
powers, duties, responsibilities, and obligations as are specifically given
them under the Plan or the Trust as such Plan or Trust may be amended from
time to time. It is intended that each of the Committees shall be
responsible for the proper exercise of its own powers, duties,
responsibilities, and obligations and shall not be responsible for any act
or failure to act on the part of another Committee or of another fiduciary.
<PAGE>
<PAGE>
SECTION 15. WITHDRAWAL OF PARTICIPATING COMPANY
15.1. WITHDRAWAL OF PARTICIPATING COMPANY. Any
Participating Company (other than the Company) may withdraw from
participation in the Plan by giving the Administrative Committee and the
Trustee prior written notice in a resolution by its board of directors
specifying a withdrawal date which shall be the last day of a month at
least 30 days subsequent to the date such notice is received by the
Trustee. The Administrative Committee may require any Participating
Company to withdraw from the Plan, as of any withdrawal date specified by
the Administrative Committee, for the failure of the Participating Company
to make proper contributions or to comply with any other provision of the
Plan and shall require a Participating Company's withdrawal upon complete
and final discontinuance of the contributions. In the event of any such
withdrawal, the Administrative Committee shall promptly notify the IRS and
request such determination as counsel to the Plan may recommend and as the
Administrative Committee may deem desirable.
In such event, the Plan and the Trust as applied to the
Employees of such Participating Company shall thereafter be administered by
such Participating Company as a separate plan and trust whose terms are
identical to the term of the Plan and the Trust as in effect immediately
prior to such separation (except that such Participating Company alone
shall be deemed the "Company" and its board of directors shall be deemed
the "Board of Directors" thereunder) and the assets allocated to such
separate trust shall be appropriately segregated; provided, however, that
in the event of any transfer of assets to a successor employee benefit plan
the provisions of Section 15.3 will apply. The decision of the
Administrative Committee shall be final as to the assets to be allocated to
such separate plan and trust in accordance herewith.
15.2. DISTRIBUTION AFTER WITHDRAWAL. Upon withdrawal from
the Plan by any Participating Company (other than the Company), such
Participating Company shall not make any further contributions under the
Plan and no amount shall thereafter be payable under the Plan to or in
respect of any Participants then employed by such Participating Company
except as provided in this Section 15. To the maximum extent permitted by
the Act, any rights of Participants no longer employed by such Participa-
ting Company and of former Participants and their Beneficiaries under the
Plan shall be unaffected by such withdrawal and any transfers,
distributions or other dispositions of the assets of the Plan as provided
in this Section 15 shall constitute a complete discharge of all liabilities
under the Plan with respect to such Participating Company's participation
in the Plan and any Participant then employed by such Participating Company.
All determinations, approvals and notifications referred to
above shall be in form and substance and from a source satisfactory to
counsel for the Plan. To the maximum extent permitted by the Act, the
withdrawal from the Plan by any Participating Company shall not in any way
affect any other Participating Company's participation in the Plan.
15.3. TRANSFER TO SUCCESSOR PLAN. No transfer of the
Plan's assets and liabilities to a successor employee benefit plan (whether
by merger or consolidation with such successor plan or otherwise) shall be
made unless each Participant would, if either the Plan or such successor
plan then terminated, receive a benefit immediately after such transfer
which (after taking account of any distributions or payments to them as
part of the same transaction) is equal to or greater than the benefit he
would have been entitled to receive immediately before such transfer if the
Plan had then been terminated. The Administrative Committee may also
request appropriate indemnification from the employer or employers
maintaining such successor plan before making such a transfer.
<PAGE>
<PAGE>
SECTION 16. AMENDMENT OR TERMINATION OF THE PLAN AND THE TRUST
16.1. RIGHT TO AMEND, SUSPEND OR TERMINATE PLAN.
(a) Subject to the provisions of paragraph (c), the Board
of Directors reserves the right at any time to amend, suspend or terminate
the Plan, any contributions thereunder, the Trust or any contract issued by
an insurance carrier forming a part of the Plan, in whole or in part and
for any reasons and without the consent of any Participating Company,
Participant, Beneficiary or Surviving Spouse. Each Participating Company
by its adoption of the Plan shall be deemed to have delegated this
authority to the Board of Directors. The Plan shall automatically be
terminated upon complete and final discontinuance of contributions thereun-
der.
(b) The Administrative Committee may adopt any amendment
which may be necessary or appropriate to facilitate the administration,
management and interpretation of the Plan or to conform the Plan thereto,
or to qualify or maintain the Plan and the Trust as a plan and trust,
meeting the requirements of Sections 401(a) and 501(a) of the Code or any
other applicable section of law (including the Act) and the Regulations
issued thereunder, provided said amendment does not have any material
effect on the currently estimated cost to the Employer of maintaining the
Plan. Each Participating Company by its adoption of the Plan shall be
deemed to have delegated this authority to the Administrative Committee.
(c) No amendment or modification shall be made which
would retroactively impair any rights to any benefit under the Plan which
any Participant or Beneficiary would otherwise have had at the date of such
amendment by reason of the contributions theretofore made and credited to
this Account, except as provided in Section 16.2 below.
16.2. RETROACTIVITY. Subject to the provisions of Section
16.1, any amendment, modification, suspension or termination of any
provision of the Plan may be made retroactively if necessary or appropriate
to qualify or maintain the Plan, the Trust and any contract with an
insurance company which may form a part of the Plan as a plan and trust,
meeting the requirements of Sections 401(a), 401(k) and 501(a) of the Code
or any other applicable section of law (including the Act) and the
Regulations issued thereunder.
16.3. NOTICE. Notice of any amendment, modification,
suspension or termination of the Plan shall be given by the Board of
Directors, or the Administrative Committee, whichever adopts the amendment,
to the other, and to the Trustee, and all Participating Companies.
16.4. NO FURTHER CONTRIBUTION. Upon termination of the
Plan, no Participating Company shall make any further contributions under
the Plan and no amount shall thereafter be payable under the Plan to or in
respect of any Participant except as provided in this Section 16. To the
maximum extent permitted by the Act, transfers, distributions or other
dispositions of the assets of the Plan as provided in this Section 16 shall
constitute a complete discharge of all liabilities under the Plan. The
Administrative Committee and the Investment Committee shall each remain in
existence and all of the provisions of the Plan which in the opinion of
such Committee are necessary for the administration of the Plan and the
administration, distribution, transfer or other disposition of the assets
of the Plan in accordance with this Section 16.4 shall remain in force.
After (i) payment of or provision for all expenses and charges
referred to in Section 8.3 and appropriate adjustment of all Accounts for
such expenses and charges in the manner described in Section 8.3, (ii)
appropriate adjustment of the Accounts of Participants who are employed as
of the date of such termination in the manner described in Section 6.1 for
any forfeitures arising under the Plan prior to such date (treating, for
this purpose, any Participant whose service had terminated but who had not
incurred five consecutive Breaks in Service immediately prior to such date)
and (iii) adjustment for profits and losses of the Trust to such
termination date in the manner described in Section 8.2, the interest of
each Participant who is employed as of the date of such termination in the
amount, if any, credited to his Account shall be nonforfeitable as of such
date.
In the event that upon or after the termination of the Plan,
the Board of Directors shall determine that the continuance of the Trust is
not in the best interest of the Participants, the Board of Directors may
terminate the Trust and upon such termination the Trustee shall pay in a
lump sum to each Participant the full amount credited to his individual
account, without limiting the foregoing, any such distributions may be made
in case or in property, or both, as the Administrative Committee in its
sole discretion may direct.
All determinations, approvals and notifications referred to
above shall be in form and substance and from a source satisfactory to
counsel for the Plan.
16.5. PARTIAL TERMINATION. In the event that any
governmental authority, including without limitation the IRS, determines
that a partial termination (within the meaning of the Act) of the Plan has
occurred then (i) the interest of each Participant in his Account as to
whom such termination occurred shall thereupon be fully vested, but shall
otherwise be payable as though such termination had not occurred and (ii)
the provisions of Sections 16.2, 16.3 and Section 15.2 which, in the
opinion of the Administrative Committee, are necessary for the execution of
the Plan and the allocation and distribution of the assets of the Plan
shall apply; provided, however, that the Board of Directors, in its
discretion, subject to any necessary governmental approval, may direct that
the amounts held in the accounts of such Participants as to whom such
termination occurred be segregated by the Trustee as a separate plan and
applied for the benefit of such Participants in the manner described in
Section 16.4 above.
16.6. EXCLUSIVE BENEFIT OF PARTICIPANTS AND BENEFICIARIES.
In no event shall any part of the funds of the Plan (other than such part
as is required to pay taxes, if any, and administration expenses as
provided in Section 8.3) be used for or diverted to any purposes other than
for the exclusive benefit of Participants and their Beneficiaries under the
Plan except as permitted under Section 403(c) of the Act. Upon the
transfer by a Participating Company of any money to the Trustee, all
interest of the Participating Company therein shall cease and terminate.
<PAGE>
<PAGE>
SECTION 17. GENERAL LIMITATIONS AND PROVISIONS
17.1. ALL RISK ON PARTICIPANTS AND BENEFICIARIES. Each
Participant, former Participant, Surviving Spouse, and Beneficiary shall
assume all risk in connection with any decrease in the value of the assets
of the Trust and the Participants' Accounts and neither the Employer nor
the Committees shall be liable or responsible therefor.
17.2. TRUST IS SOLE SOURCE OF BENEFITS. The Trust shall be
the sole source of benefits under the Plan and, except as otherwise
required by the Act, the Employer, and the Committees assume no liability
or responsibility for payment of such benefits, and each Participant,
Surviving Spouse, Beneficiary or other person who shall claim the right to
any payment under the Plan shall be entitled to look only to the Trust for
such payment and shall not have any right, claim or demand therefor against
the Employer, the Committees or any member thereof, or any employee,
officer or director of the Employer.
17.3. NO RIGHT TO CONTINUED EMPLOYMENT. Nothing contained
in the Plan shall give any employee the right to be retained in the
employment of the Employer or any of its subsidiaries or affiliated or
associated corporations or affect the right of any such employer to dismiss
any employee. The adoption and maintenance of the Plan shall not
constitute a contract between the Employer and any employee or
consideration for, or an inducement to or condition of, the employment of
any employee.
17.4. PAYMENT ON BEHALF OF PAYEE. If the Administrative
Committee shall find that any person to whom any amount is payable under
the Plan is unable to care for his affairs because of illness or accident,
or is a minor, or has died, then any payment due him or his estate (unless
a prior claim for such amount has been made by a duly appointed legal
representative) may, if the Administrative Committee so elects, be paid to
his spouse, a child, a relative, an institution maintaining or having
custody of such person, or any other person deemed by the Administrative
Committee to be a proper recipient on behalf of such person otherwise
entitled to payment. Any such payment shall be a complete discharge of the
liability of the Plan and the Trust therefor.
17.5. NO ALIENATION. Except insofar as may otherwise be
required by law or pursuant to the terms of a Qualified Domestic Relations
order, no amount payable at any time under the Plan and the Trust shall be
subject in any manner to alienation by anticipation, sale, transfer,
assignment, bankruptcy, pledge, attachment, charge or encumbrance of any
kind nor in any manner be subject to the debts or liabilities of any person
and any attempt to so alienate or subject any such amount, whether
presently or thereafter payable, shall be void, if any person shall attempt
to, or shall alienate, sell, transfer, assign, pledge, attach, charge or
otherwise encumber any amount payable under the Plan and the Trust, or any
part thereof, or if by reason of his bankruptcy or other event happening at
any such time such amount would be made subject to his debts or liabilities
or would otherwise not be enjoyed by him, then the Administrative
Committee, if it so elects, may direct that such amount be withheld and
that the same or any part thereof be paid or applied to or for the benefit
of such person, his spouse, children or other dependents, or any of them,
in such manner and proportion as the Administrative Committee may deem
proper. For purposes of the Plan, a "Qualified Domestic Relations Order"
means any judgment, decree or order (including approval of a property
settlement agreement) which has been determined by the Administrative
Committee in accordance with procedures established under the Plan, to
constitute a qualified domestic relations order within the meaning of
Section 414(p)(1) of the code.
17.6. MISSING PAYEE. If the Administrative Committee
cannot ascertain the whereabouts of any person to whom a payment is due
under the Plan, and if, after five years from the date such payment is due,
a notice of such payment due is mailed to the last known address of such
person, as shown on the records of the Administrative Committee or the
Employer, and within three months after such mailing such person has not
made written claim therefor, the Administrative Committee, if it so elects,
after receiving advise from counsel to the Plan, may direct that such
payment and all remaining payments otherwise due to such person be canceled
on the records of the Plan and the amount thereof applied to reduce the
contributions of the Participating Company, and upon such cancellation, the
Plan and the Trust shall have no further liability therefor except that, in
the event such person later notifies the Administrative Committee of his
whereabouts and requests the payment or payments due to him under the Plan,
the amount so applied shall be paid to him as provided in Section 11.
17.7. REQUIRED INFORMATION. Each Participant shall file
with the Administrative Committee such pertinent information concerning
himself, his Surviving Spouse or Beneficiary as the Administrative
Committee may specify, and no Participant, Surviving Spouse, Beneficiary,
or other person shall have any rights or be entitled to any benefits under
the Plan unless such information is filed by or with respect to him.
17.8. SUBJECT TO TRUST AGREEMENT. Any and all rights or
benefits accruing to any persons under the Plan shall be subject to the
terms of the trust agreement which the Company shall enter into with the
Trustee providing for the administration of the Trust Fund. If the payment
of any benefit under the Plan is provided for by a contract with an
insurance company, the payment of such benefit shall also be subject to all
the provisions of such contract.
17.9. COMMUNICATIONS TO COMMITTEES. All elections,
designations, requests, notices, instructions, and other communications
from a Participating Company, a Participant, Surviving Spouse, Beneficiary
or other person to the Committees required or permitted under the Plan
shall be in such form as is prescribed from time to time by each such
Committee, shall be mailed by first-class mail or delivered to such
location as shall be specified by each such Committee, and shall be deemed
to have been given and delivered only upon actual receipt thereof by such
Committee at such location.
17.10. COMMUNICATIONS FROM PARTICIPATING COMPANY OR
COMMITTEES. All notices, statements, reports and other communications from
a Participating Company or any of the Committees to any employee,
Participant, Surviving Spouse, Beneficiary or other person required or
permitted under the Plan shall be deemed to have been duly given when
delivered to, or when mailed by first-class mail, postage prepaid and
addressed to, such employee, Participant, Surviving Spouse, Beneficiary or
other person at his address last appearing on the records of the
Administrative Committee, or when posted by the Participating Company or
such Committee as permitted by law.
17.11. INCOMING TRANSFERS AND ROLLOVERS. Upon such terms
and conditions as the Administrative Committee may approve, and subject to
any required approval by the IRS, benefits may be provided under the Plan
to a Participant with respect to any period of his employment by any
organization, and such benefits (and any Hours of Service credited with
respect to such period of employment under Section 2.18) may be provided
for, in whole or in part, by funds transferred, directly or indirectly
(including a rollover from a conduit or employer sponsored individual
retirement account, or an individual retirement annuity as described in
Section 408 of the Code), to the Trust from an employee benefit plan of
such organization which qualified under Section 401(a) of the Code. Subject
to Appendix A, such amounts shall be credited to the Participant's
"Rollover Contribution Account."
17.12. GENDER. Whenever used in the Plan the masculine
gender includes the feminine.
17.13. CAPTIONS. The captions preceding the sections of the
Plan have been inserted solely as a matter of convenience and in no way
define or limit the scope or intent of any provisions of the Plan.
17.14. APPLICABLE LAW. The Plan and all rights thereunder
shall be governed by and construed in accordance with the Act, the Code and
the laws of the State of New York.
17.15. MISTAKE OF FACT. Notwithstanding any other
provisions herein contained, if any contribution is made by a mistake of
fact, such contribution shall upon the direction of the Administrative
Committee, which shall be given in conformity with the provisions of the
Act, be returned, without liability to any person.
17.16. QUALIFICATION OF PLAN. Notwithstanding any other
provisions herein contained, the Plan is amended and restated on the
condition that the Plan, and the trust agreement established hereunder
shall be approved by the IRS as a qualified and exempt plan and trust under
the provisions of the Code and the Regulations so that contributions to the
Trust may be deducted for federal income tax purposes, within the limits of
such Code and Regulations, and to be non-taxable to Participants when
contributed. If such approval should be denied for any reason (including
failure to comply with any conditions for such approval imposed by the
IRS), contributions made after the execution of the trust agreement and
prior to such denial shall be returned, without any liability to any
person, within one year after the date of denial of such approval.
17.17. DEDUCTIBILITY OF CONTRIBUTIONS. Notwithstanding any
other provisions herein contained, all contributions are hereby expressly
conditioned upon their deductibility under Section 404 of the Code and the
Regulations, as amended from time to time, and if the deduction for any
contribution is disallowed in whole or in part, then such contribution (to
the extent the deduction is disallowed) shall upon direction of the
Administrative Committee, which shall be given in conformity with the
provisions of the Act, be returned, without liability to any person, within
one year after such disallowance.
<PAGE>
<PAGE>
SECTION 18. TOP HEAVY PROVISIONS
18.1. TOP HEAVY PLAN. The Plan will be considered a Top
Heavy Plan for any Plan Year if it is determined to be a Top Heavy Plan as
of the last day of the preceding Plan Year (or, with respect to the first
Plan Year, the last day of such Plan Year). For purposes of determining
whether the Plan is a Top Heavy Plan, actuarial assumptions which reflect
reasonable mortality experience and a reasonable interest rate that
uniformly applies for accrual purposes under all plans maintained by the
Company and Affiliates shall be used. The Value of a Participant's Account
shall be determined as of the last valuation date used for computing Plan
costs for minimum contribution purposes which occurs within the Plan Year
in which the determination is being made, and shall include amounts
distributed to or on behalf of the Participant within the four preceding
Plan Years. Notwithstanding any other provisions in the Plan, the
provisions of this Section 18 shall apply and supersede all other
provisions in the Plan during each Plan Year with respect to which the Plan
is determined to be a Top Heavy Plan.
18.2. DEFINITIONS. For purposes of this Section 18 and as
otherwise used in the Plan, the following terms shall have the meanings set
forth below:
(a) "Determination Date" means the last day of the
preceding Plan Year or the last day of the first Plan Year.
(b) "Key Employee" means
(1) each person (and his Beneficiary) who at any
time during the five Plan Years ending on the
Determination Date:
(i) was an officer of the Company having an
annual compensation (within the meaning
of Section 414(q)(7) of the Code)
greater than 50% of the amount in effect
under Section 415(b)(1)(A) of the Code
for any such Plan Year;
(ii) was one of the 10 Employees owning the
largest interest of the Company but only
if he received compensation (within the
meaning of Section 414(q)(7) of the
Code) equal to or greater than the
dollar amount applied for purposes of
Section 415(c)(1)(A) of the Code for the
calendar year ending coincident with or
immediately after the Determination
Date; or
(iii) owned at least five percent of the
Company's outstanding shares of stock or
at least five percent of the total
combined voting power of the Company's
shares of stock, or owned at least one
percent of the Company's shares of
stock.
(2) The following special rules apply to this
definition:
(i) No more than 50 officers, or, if less,
the greater of three or 10% of all
Employees will be Key Employees under
Subsection (i)(A). If there are more
officers than are counted under the
preceding sentence, only those who had
the highest aggregate compensation
(within the meaning of Section 414(q)(7)
of the Code) during the five Plan Years
ending on the Determination Date will be
considered Key Employees.
(ii) A person is an officer only if he is in
regular and continued service as an
administrative executive of the Company.
(iii) No person will be a Key Employee under
more than one paragraph of this
definition unless he also is a
Beneficiary of a deceased Key Employee.
(iv) A person will be treated as owning all
shares of stock which he owns directly
or constructively by application Section
318 of the Code.
(v) For purposes of determining whether a
person is a one-percent or five-percent
owner of the Company, his ownership
interest in any entity related to the
Company solely by reason of Sections
414(b), (c) or (m) of the Code will be
disregarded.
(c) "Non-Key Employee" means (1) any Employee who is not
a Key Employee, or (2) a Beneficiary of a Non-Key Employee.
(d) "Permissive Aggregation Group" means all qualified
employee pension benefit plans in the Required Aggregation Group and any
qualified employee pension benefit plans sponsored by the Employer which
are not part of the Required Aggregation Group, but which satisfy the
requirements of Sections 401(a)(4) and 410 of the Code when considered
together with the Required Aggregation Group and which the Company elects
to have included in the Permissive Aggregation Group.
(e) "Required Aggregation Group" means the Plan and any
other qualified employee pension benefit plan sponsored by the Employer (1)
in which a Key Employee participates or (2) which enables the Plan to meet
the requirements of Sections 401(a)(4) or 410 of the Code.
(f) "Top Heavy Group" means all qualified employee
pension benefit plans of the Employer in the Required Aggregation Group and
any other qualified employee benefit plan of the Employer which the
Employer elects to aggregate as part of a Permissive Aggregation Group if,
on any Determination Date, the Value of the cumulative annual accrued
benefits for Key Employees under all defined benefit plans and the
aggregate Value of all Key Employees' accounts under all defined
contribution plans exceed 60% of a similar sum determined for all
Employees. For purposes of that computation, the accounts and cumulative
annual accrued benefits of all Non-Key Employees who were, but no longer
are, Key Employees will be disregarded. If the aggregated plans do not
have the same Determination Date, this test will be made using the Value
calculated as of each such plan's Determination Date occurring during the
same Plan Year.
(g) "Top Heavy Plan" means the Plan if, on any
Determination Date, the present Value of the Account under the Plan for Key
Employees exceeds 60% of the Value of the Accounts under the Plan for all
Employees. For purposes of the comparison, the Accounts of all Non-Key
Employees who were, but no longer are, Key Employees will be disregarded.
The Plan is Super Top Heavy if it would be a Top Heavy Plan if 90% were
substituted for 60% wherever it appears in the definition of Top Heavy and
Top Heavy Group.
(h) "Top Heavy Plan Year" means any Plan Year during
which the Plan is Top Heavy or part of a Top Heavy Group.
(i) "Value" means:
(1) for all defined benefit plans, the present
value calculated as provided in those plans;
and
(2) for all defined contribution plans, the fair
market value of each Participant's account
(including amounts attributable to voluntary
employee contributions from a qualified em-
ployee pension benefit plan sponsored by the
Company or an Affiliate) determined as of the
most recent Determination Date increased by:
(i) distributions made during the five Plan
Years ending on the Determination Date
(except distributions already included
in determining the Value of the
Accounts); and
(ii) all rollover contributions distributed
from the plans to a qualified employee
benefit plan not sponsored by the
Company or an Affiliate, and decreased
by;
(iii) any deductible employee contributions;
(iv) rollover contributions received by the
plans after December 31, 1983 from a
qualified employee benefit plan not
sponsored by the Company or an
Affiliate; and
(v) rollover contributions distributed from
the Plan to a qualified employee pension
benefit plan by the Company or an
Affiliate.
18.3. COMPENSATION. For any Plan Year that the Plan is a
Top Heavy Plan, only the first $200,000 (adjusted for Plan Years beginning
on or after January 1, 1988, in accordance with the Regulations) of
compensation (within the meaning of Section 414(q)(7) of the Code) shall be
credited to a Participant.
18.4. MINIMUM CONTRIBUTION. (a) Subject to Section 18.5,
for each Plan Year that the Plan is a Top Heavy Plan, the Company
Contribution allocable to the Account of each Participant who has performed
an Hour of Service at the end of the Plan Year and who is not a Key
Employee and who has not separated from service at the end of the Plan
Year, regardless of such Employee's level of Compensation, shall not be
less than the lesser of (i) three percent of such Participant's
compensation, within the meaning of Section 415 of the Code, or (ii) the
percentage at which contributions and forfeitures for such Plan Year are
made and allocated on behalf of the Key Employee for whom such percentage
is the highest. For the purpose of determining the appropriate percentage
under clause (ii), all defined contribution plans required to be included
in a Required Aggregation Group shall be treated as one plan. Clause (ii)
shall not be applicable if the Plan is included in a Required Aggregation
Group which enables a defined benefit plan also required to be included in
said Required Aggregation Group to satisfy Sections 401(a)(4) or 410 of the
Code. For each Plan Year that the Plan is a Top Heavy Plan, each Non-Key
Employee will receive a minimum contribution if such Employee is a
Participant as of the last day for the Plan Year, regardless of whether or
not such Non-Key Employee has completed 1,000 Hours of Service. Company
Contributions under Section 18.4(a) shall include Elective Contributions
made on behalf of a Participant.
18.5. LIMITATIONS ON CONTRIBUTIONS.
(a) For each Plan Year that the Plan is a Top Heavy Plan,
1.0 shall be substituted for 1.25 as the multiplicand of the dollar
limitation in determining the denominator of the defined benefit plan
fraction and of the defined contribution plan fraction for purposes of
Section 415(e) of the Code.
(b) If, after substituting 90% for 60% wherever the
latter appears in Section 416(g) of the Code, the Plan is not determined to
be a Top Heavy Plan, the provisions of paragraph (a) shall not be
applicable if the minimum Company Contribution allocable to the Account of
any Participant who is not a Key Employee as specified in Section 18.4 is
determined by substituting "four" for "three".
18.6. OTHER PLANS. The Administrative Committee shall, to
the extent permitted by the Code and in accordance with the Regulations,
apply the provisions of this Section 18 by taking into account the benefits
payable and the contributions made under any other plans maintained by the
Employer or any of its subsidiaries or affiliated or associated entities
which are qualified under Section 401(a) of the Code to prevent inappropri-
ate omissions or required duplication of minimum benefits or contributions.
<PAGE>
<PAGE>
OGDEN SERVICES
PROFIT SHARING PLAN
APPENDIX A
In accordance with Section 8.1, this Appendix A serves to
identify the various accounts maintained under the Plan that were
transferred from other qualified plans that are qualified under Code
Section 401 and are exempt from tax under Code Section 501(a). These
accounts are subject to all of the provisions under the Plan except where
otherwise noted.
1. AFTER-TAX ACCOUNT - This account was established to receive
the after-tax contributions (and earnings thereon) of employees who
formerly participated in the Ogden Allied Services Saving and Security Plan
and the Ogden Corporation Profit Sharing Plan. No further contributions
may be credited to this account under any circumstances. Any Participant
in whose behalf such an account was established shall be fully vested in
such account at all times.
2. PRIOR COMPANY ACCOUNT - This account was established to
receive stock bonus contributions (and earnings thereon) credited to the
accounts of employees who formerly participated in the Allied Maintenance
Corporation Variable Income (Stock Savings) Retirement Plan, the Ogden
Allied Services Saving and Security Plan, the Ogden Food Service
Corporation Pension Plan and the Nedicks Pension Plan, Ogden Corporation
Profit Sharing Plan, and the Atlantic Design Profit Sharing Plan. No
further contributions may be credited to this account under any
circumstances. Any Participant in whose behalf such an account was
established shall be fully vested in such account at all times.
3. ROLLOVER ACCOUNT - This account was established to receive
rollover contributions credited to the rollover account of Participants who
formerly participated in any other qualified employees retirement plan.
EXHIBIT NO. 10.8(w)
FORM OF AMENDMENTS TO THE OGDEN PROJECTS, INC.
PENSION PLAN AND PROFIT SHARING PLANS
EFFECTIVE JANUARY 1, 1994
WHEREAS, the Corporation is the sponsor of the Ogden Projects
Pension Plan (the "Pension Plan") and the Ogden Projects Profit
Sharing Plan (the "Profit Sharing Plan") and their related trusts,
said Pension Plan and Profit Sharing Plan and underlying trusts
being qualified and tax-exempt under Section 401(a) and 501(a) (of
the Internal Revenue Code (the "IRC"); and
WHEREAS, the Corporation has determined that the Pension Plan
and Profit Sharing Plan should be amended and modified in certain
respects, so that the Corporation will be able to meet the IRC
rules and regulations concerning the employer-wide non-
discriminatory classification test (the "Test") necessary to
maintain the qualified and tax-exempt status of the Corporation's
Pension Plan and Profit Sharing Plan, effective as of January 1,
1994; and
WHEREAS, the Corporation has determined that it is in the best
interest of the Corporation and its employees that effective as of
January 1, 1994, and in order to satisfy the Test, all benefits
under the Pension Plan be frozen and that the Profit Sharing Plan
be amended to enable the Corporation to remove from coverage as
many highly paid employees as is necessary to satisfy the Test; NOW
THEREFORE
BE IT RESOLVED, that the Board of Directors hereby authorizes,
upon advice of counsel, that the Pension Plan be amended, effective
as of January 1, 1994, as follows: (i) all additional benefit
accruals under the Pension Plan shall cease effective as of the
close of business on December 31, 1993; (ii) all accrued benefits
under the Pension Plan shall be frozen as of the close of business
on December 31, 1993, and (iii) subject to the foregoing
amendments, the Pension Plan shall continue in existence as a
qualified and tax-exempt plan under Section 401(a) and 501(a) of
the IRC in accordance with its terms and applicable law, regulation
and governmental guidelines; and it is further
RESOLVED, that the Board of Directors hereby authorizes, upon
advice of counsel, that the Profit Sharing Plan shall be amended,
effective as of January 1, 1994, to provide that a certain number
of highly paid employees of the Corporation shall no longer be
eligible to participate in the Profit Sharing Plan as shall be
determined by the Administrative Committee from time to time as may
be necessary for the Profit Sharing Plan to meet the Test and
maintain its qualified and tax-exempt status, and to provide that
the account balances of any highly paid employees who are
determined to be ineligible to participate in the Profit Sharing
Plan shall be ineligible to receive future contributions; and it is
further
<PAGE>
RESOLVED, that effective as of January 1, 1993, the Profit
Sharing Plan is further amended to comply with the Unemployment
Compensation Act of 1993 by applying a 20% Federal income tax
withholding to the taxable portion of any distribution unless the
participant requests a direct rollover of the distribution to an
eligible retirement plan; and it is further
RESOLVED, that the fiduciaries of the Pension Plan and Profit
Sharing Plan and the officers of this Corporation and each of them
be and hereby is authorized, upon advice of counsel, to execute,
deliver and file any and all documents and instruments which, upon
advice of counsel, are desirable, necessary or appropriate to
effect the purpose and intent of the foregoing Resolutions.
<TABLE>
EXHIBIT 11
OGDEN CORPORATION AND SUBSIDIARIES
DETAIL OF COMPUTATION OF EARNINGS
APPLICABLE TO COMMON STOCK
FOR THE THREE YEARS ENDED DECEMBER 31, 1993
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
NUMBER OF SHARES USED FOR COMPUTATION
OF EARNINGS PER SHARE:
Average number of common shares 43,378,000 43,086,000 42,969,000
NUMBER OF SHARES USED FOR COMPUTATION
OF EARNINGS PER SHARE ASSUMING FULL
DILUTION:
Average number of common shares 43,378,000 43,086,000 42,969,000
Issuable for options-treasury
stock method
Shares issuable for conversion of
preferred stock 356,000 382,000 419,000
Shares issuable for conversion of
debentures 42,000 115,000 124,000
Number of shares used for computation 43,776,000 43,583,000 43,512,000
COMPUTATION OF EARNINGS APPLICABLE
TO COMMON SHARES:
Income from continuing operations
before cumulative effect of changes
in accounting principles $62,130,000 $60,767,000 $57,604,000
Add (deduct):
Adjustments arising from minority
interest in consolidated subsidiaries 32,000 13,000 1,000
Dividends on Ogden preferred stock (199,000) (213,000) (239,000)
Consolidated income applicable to
Ogden common stock $61,963,000 $60,567,000 $57,366,000
Loss from discontinued operations ($13,880,000)
Cumulative effect of changes in
accounting principles ($5,340,000) ($5,186,000)
<PAGE>
COMPUTATION OF EARNINGS APPLICABLE
TO COMMON SHARE ASSUMING FULL
DILUTION:
Income from continuing operations
before cumulative effect of
changes in accounting principles $62,130,000 $60,767,000 $57,604,000
Add:
Adjustments arising from minority
interest in consolidated subsidiaries 32,000 13,000 1,000
Debenture interest (net of applicable
income taxes) 16,000 49,000 56,000
Consolidated income applicable to
Ogden common stock $62,178,000 $60,829,000 $57,661,000
Loss from discontinued operation ($13,880,000)
Cumulative effect of changes in
accounting principles ($5,340,000) ($5,186,000)
Note: Current options result in less than three percent dilution with the
expectation of continuing at less than three percent dilution.
</TABLE>
OGDEN CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED OPERATIONS
The following discussion and analysis should be used in connection with Note
21, "Information Concerning Business Segments."
OPERATIONS: Sales and service revenues for 1993 were $270,500,000 higher
than the comparable period of 1992. Operating Services revenues were
$55,500,000 higher, primarily reflecting increased revenues of $30,400,000 in
Entertainment Services primarily due to new contracts and increased customer
activity principally at sports venues; $17,500,000 in Aviation Services,
chiefly associated with the in-flight catering group and the Mexican and
European ground handling operations, reflecting increased customer activity
by both and the start-up of operations at Schiphol Airport in Holland; and
$7,300,000 in Ogden Environmental and Energy Services Co., Inc. (OEES),
primarily reflecting the acquisition of a Spanish environmental services
company in 1993. Waste-to-Energy Operations revenues increased $215,000,000.
Service revenues increased $60,900,000, primarily due to the operations of
the three waste-to-energy plants acquired from RRS Holdings, Inc. (RRS), the
waste-to-energy subsidiary of Asea Brown Boveri Inc. on January 8, 1993.
Construction revenues increased $154,100,000 due to increased construction
activity at the Lee County, Florida; Detroit, Michigan; and Montgomery
County, Maryland, waste-to-energy facilities.
Income from operations for 1993 was $13,300,000 higher than the
comparable period of 1992. Operating Services income from operations was
$5,400,000 higher, primarily reflecting increased income of $3,900,000 in
Entertainment Services due to new contracts and increased customer activity,
principally at sports venues; $1,900,000 at Universal Ogden reflecting
increased activity in the offshore remote services business; and $800,000 at
OEES, primarily due to the acquisition of a Spanish environmental services
company. These increases were partially offset by a reduction in Aviation
Services reflecting increased operating costs and start-up expenses in the
European operations. Waste-to-Energy income from operations was $7,900,000
higher than the comparable period of 1992. Service income (service revenues
less operating costs and debt service charges) was $8,500,000 higher, chiefly
associated with increased activity at existing facilities and the addition of
three RRS facilities in January 1993. Construction income (construction
revenues less construction costs) of $16,500,000 was $6,300,000 higher than
the comparable period of 1992 due to increased construction activity in 1993.
Construction income for 1992 included a gain of $5,600,000 from the sale of
limited partnership interests and related tax benefits in the Huntington, New
York, waste-to-energy facility. General and administrative expenses for 1993
were $7,500,000 higher due primarily to increased marketing efforts to
develop new business.
In December 1993, the Corporation adopted a plan to discontinue its
fixed-site hazardous waste business. The net charge for all discontinued
operations' activity in 1993, which was not material, has been included in
Other (Income) Deductions-Net. See Note 2 to the Consolidated Financial
Statements for a more detailed discussion of Discontinued Operations.
Net corporate unallocated expenses for 1993 were comparable to 1992.
Net corporate interest expense for 1993 was $700,000 higher than the
comparable period of 1992. Interest expense increased by $1,600,000, from
$22,000,000 in 1992 to $23,600,000 in 1993, primarily due to interest costs
on the 9 1/4% debentures issued in March 1992, partially offset by lower
interest costs on the Corporation's variable rate debt. Interest income
increased by $900,000, from $11,600,000 in 1992 to $12,500,000 in 1993. This
increase was due to increased income arising from the investment of net
proceeds from the debenture offering and the income from an interest rate
swap agreement entered into in March 1992. These increases were offset by
lower interest rates, reduced income due to the collection of a subordinated
note bearing interest above the prime rate, and a reduction in
interest-bearing restricted construction funds.
The effective income tax rate for 1993 was 45.0%, compared with a 40.1%
rate for the comparable period of 1992. This increase of 4.9% is chiefly
associated with the Omnibus Budget Reconciliation Act of 1993, signed in
August 1993, which increased the Federal income tax rate from 34% to 35%
retroactively to January 1, 1993. In addition, deferred income tax balances
were restated to the new tax rate as required by Statement of Financial
Accounting Standards (SFAS) No. 109, which resulted in a one-time charge for
Federal income taxes of $4,100,000 in 1993. Note 7 to the Consolidated
Financial Statements contains a more detailed reconciliation of the variances
from the Federal statutory income tax rate.
Revenues for 1992 were $201,300,000 higher than 1991. Operating
Services revenues were $99,500,000 higher, primarily reflecting increased
revenues of $33,000,000 in Aviation Services due to an upturn in the
commercial aviation market chiefly associated with the in-flight catering
area; $31,500,000 in OEES, primarily due to increased power generation
activities reflecting the acquisition of Catalyst New Martinsville
Hydroelectric, Inc., in August 1991 and increased activity in the consulting
and engineering and remediation areas; and $42,900,000 in Government
Services, primarily reflecting increased activity in the systems and
engineering areas as well as increased customer activity. The Industrial
Services group also had increased revenues due to increased customer activity
and new contracts. These increases were partially offset by a decrease in
the Entertainment Services group, reflecting the sale of certain vending
operations in the second half of 1991 and poor attendance in 1992 at sporting
arenas and other venues.
Waste-to-Energy Operations revenues increased $101,800,000. Service
revenues increased $50,300,000 due primarily to six facilities that were in
operation for only a portion of 1991, generating revenue for the entire year
1992. The Corporation operated 21 facilities during 1992 and 1991.
Construction revenues increased $51,500,000, chiefly associated with
increased construction activity at the Union County, New Jersey,
waste-to-energy facility and the start-up of construction at the Lee County,
Florida, waste-to-energy facility.
Income from operations for 1992 increased $10,000,000 over 1991.
Operating Services income was $9,900,000 higher, primarily reflecting
increased earnings of $9,500,000 in the Aviation Services group chiefly
associated with the upturn in the commercial aviation market and the absence
of any major customer airline bankruptcies, and $5,500,000 in Government
Services, primarily due to increased activity in the systems and engineering
areas as well as increased customer activity. OEES also had increased
income, primarily from increased power generation activities. These
increases were partially offset by lower income in the Entertainment Services
group, reflecting lower attendance at sporting arenas and other venues.
Waste-to-Energy Operations income was $100,000 higher than 1991, reflecting
increased service income of $14,300,000 chiefly associated with six
facilities in operation for the entire year 1992 that were in operation for
only a portion of 1991, partially reduced by increased maintenance costs at
several facilities. Construction income was $11,500,000 lower, principally
due to reduced income from the sale of limited partnership interests and
related tax benefits in the Huntington, New York, waste-to-energy facility.
Net corporate unallocated expenses for 1992 were $600,000 lower than
1991, primarily reflecting reduced corporate overhead expenses.
Net interest expense for 1992 was $2,000,000 higher than 1991. Interest
expense increased by $4,100,000, from $17,900,000 in 1991 to $22,000,000 in
1992, primarily reflecting interest costs on the 9 1/4% $100,000,000
subordinated debentures issued in March 1992, partially offset by lower
interest costs on the Corporation's variable rate debt. Interest income for
1992 increased by $2,100,000, from $9,500,000 in 1991 to $11,600,000 for
1992. This increase was chiefly associated with earnings from increased
investments arising from the investment of the net proceeds of the debenture
offering and net income from an interest rate swap agreement entered into in
March 1992, partially offset by lower interest rates on funds invested,
reduced interest income due to the collection of a subordinated note bearing
interest above the prime rate, and a reduction in interest-bearing restricted
construction funds.
The effective income tax rate for 1992 was 40.1%, compared with 37.3%
for 1991. This increase of 2.8% is chiefly associated with tax benefits of
prior foreign losses and other net adjustments recognized in 1991 that did
not recur in 1992. The Corporation adopted SFAS No. 109, "Accounting for
Income Taxes," as of January 1, 1992, and recorded a charge to income for a
cumulative effect of a change in accounting principle of $5,186,000. Note 7
to the Consolidated Financial Statements contains a more detailed description
of SFAS No. 109 and a reconciliation of the variances from the Federal
statutory income tax rate.
The Corporation adopted SFAS No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions," as of January 1, 1993, and
recorded a charge to income for a cumulative effect of a change in accounting
principle of $5,340,000. Note 15 to the Consolidated Financial Statements
contains a more detailed description of SFAS No. 106.
SFAS No. 112, "Employers' Accounting for Postemployment Benefits," was
issued in November 1992 and is effective for years beginning after December
15, 1993. This Statement establishes accounting standards for employers who
provide benefits to former or inactive employees after employment but before
retirement. These benefits include, but are not limited to, salary
continuation, supplemental unemployment benefits, severance benefits,
disability benefits, job training, health care benefits, and life insurance
coverage. The effect of implementing SFAS No. 112 as of January 1, 1994,
will not have a significant effect on Ogden's financial condition or results
of operations.
CAPITAL INVESTMENTS, COMMITMENTS, AND LIQUIDITY: During 1993, capital
investments amounted to $116,200,000, of which $77,800,000, inclusive of
restricted funds transferred from funds held in trust, was for
Waste-to-Energy Operations and $33,900,000, $4,000,000, and $500,000 were for
normal replacement and growth in Operating Services, Waste-to-Energy
Operations, and for corporate equipment, respectively.
As of December 31, 1993, capital commitments amounted to $46,300,000,
which includes commitments for equity investments (over and above restricted
funds provided by revenue bonds issued by municipalities) of $12,300,000 for
waste-to-energy facilities and $34,000,000 for normal replacement,
modernization, and growth in Operating Services and Waste-to-Energy
Operations. In 1990, the Ogden Corporation Board of Directors authorized a
plan to repurchase up to 2,000,000 shares of Ogden common stock from time to
time in the open market. The Corporation has not purchased any of its shares
under this plan.
Ogden continues as guarantor of surety bonds and letters of credit
totaling approximately $19,200,000 on behalf of International Terminal
Operating Co. Inc. Ogden also continues as guarantor of tax-exempt 8 1/4%
Industrial Revenue Bonds (IRBs), secured by a letter of credit, which expires
June 16, 1994, amounting to approximately $36,000,000 on behalf of Avondale
Industries, Inc. These IRBs are redeemable at the option of the bondholders
or Avondale on June 1, 1994, and annually thereafter through June 1, 2001.
The IRBs are subject to a mandatory call for redemption on June 1, 1994, if
the existing letter of credit is not replaced or the IRBs otherwise
refinanced. If the IRBs are redeemed, Ogden may be required to purchase
Avondale preferred stock. In addition, Ogden may also be required to
purchase Avondale preferred stock in connection with certain litigation and
income tax matters.
With construction of waste-to-energy facilities financed to a large
degree by revenue bonds issued by municipalities, potential repurchase of
Ogden common shares and capital commitments are expected to be satisfied from
cash flow from operations; available funds, including short-term investments;
and the Corporation's unused credit facilities to the extent needed. At
December 31, 1993, the Corporation had $203,300,000 in cash, cash
equivalents, and marketable securities and unused revolving credit lines of
$177,000,000.
Ogden expects to continue its strategy of developing and offering new
operating services to an increasing number of customers and competing for
additional contract awards of waste-to-energy facilities. Acquisitions
similar to the purchase of Blount Energy Resource Corp. in 1991 for a total
of $52,000,000; the United States waste-to-energy business of Asea Brown
Boveri Inc. for approximately $48,000,000 in January 1993; and the
acquisition of several small service companies in 1993 and 1992, as well as
increasing our global capabilities, are expected to be continuing factors in
the future growth of Ogden.
<PAGE>
<TABLE>
OGDEN CORPORATION AND SUBSIDIARIES
SELECTED FINANCIAL DATA
<CAPTION>
December 31, 1993 1992 1991 1990 1989
(In thousands of dollars,
except per-share amounts)
<S> <C> <C> <C> <C> <C>
Net Sales and Service Revenues $2,039,337 $1,768,815 $1,567,568 $1,556,406 $1,526,775
Segment Income From Operations:
Operating Services 69,582 64,168 54,229 58,798 37,673
Waste-to-Energy Operations 77,778 69,847 69,733 48,319 31,912
Total 147,360 134,015 123,962 107,117 69,585
Income (Loss) From:
Continuing operations 62,130 60,767 57,604 58,072 58,929
Discontinued operations (13,880) (2,160) (626)
Cumulative effect of changes in
accounting principles (5,340) (5,186)
Net income 56,790 55,581 43,724 55,912 58,303
Earnings (Loss) Per Common Share:
Continuing operations 1.43 1.41 1.33 1.36 1.39
Discontinued operations (.32) (.05) (.01)
Cumulative effect of changes in
accounting principles (.12) (.12)
Total 1.31 1.29 1.01 1.31 1.38
Earnings (Loss) Per Common Share-
Assuming Full Dilution:
Continuing operations 1.42 1.40 1.32 1.34 1.37
Discontinued operations (.32) (.05) (.01)
Cumulative effect of changes in
accounting principles (.12) (.12)
Total 1.30 1.28 1.00 1.29 1.36
Consolidated Assets 3,312,510 3,187,826 2,846,254 2,690,448 2,700,109
<PAGE>
Long-Term Obligations:
Operations Other Than
Waste to Energy 399,390 416,757 324,611 325,219 338,031
Waste-to-Energy Operations 1,579,789 1,611,236 1,473,103 1,363,205 1,377,730
Shareholders' Equity 486,267 481,084 478,122 484,482 476,639
Shareholders' Equity
Per Common Share 11.15 11.11 11.09 11.26 11.19
Cash Dividends Declared
Per Common Share 1.25 1.25 1.25 1.31 1.25
NOTES:
Net income in 1993 was reduced by $.11 per share ($4.7 million), reflecting the effect of the increased
Federal income tax rate which was enacted in August 1993. The $.11 per-share reduction includes $.08
per share for a net one-time charge due to the adjustment of prior years' deferred income tax balances
and $.03 per share for the 1% increase in the tax rate for the full year 1993.
Cash dividends declared does not include supplemental dividend payable in Ogden Projects, Inc., common
stock on January 9, 1990, to Ogden common shareholders of record on December 14, 1989 (equivalent value
of $.6875 per Ogden common share).
</TABLE>
<PAGE>
<TABLE>
OGDEN CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED INCOME
<CAPTION>
For the years ended December 31, 1993 1992 1991
<S> <C> <C> <C>
Operations Other Than Waste to Energy:
Net sales $ 423,329,000 $ 390,994,000 $ 379,395,000
Service revenues 934,948,000 911,784,000 823,932,000
Total net sales and service revenues 1,358,277,000 1,302,778,000 1,203,327,000
Costs of goods sold 375,391,000 359,736,000 347,971,000
Operating expenses 817,140,000 785,724,000 709,634,000
Selling, administrative,
and general expenses 109,153,000 102,298,000 102,792,000
Total costs and expenses 1,301,684,000 1,247,758,000 1,160,397,000
Operating income 56,593,000 55,020,000 42,930,000
Waste-to-Energy Operations:
Service revenues 432,609,000 371,669,000 321,361,000
Construction revenues 248,451,000 94,368,000 42,880,000
Total revenues 681,060,000 466,037,000 364,241,000
Operating costs 257,542,000 204,059,000 178,870,000
Construction costs 231,956,000 84,212,000 21,232,000
Selling, administrative,
and general expenses 16,066,000 8,574,000 6,813,000
Debt service charges 98,664,000 99,734,000 88,958,000
Other (income) deductions-net (946,000) (389,000) (1,365,000)
Total costs and expenses 603,282,000 396,190,000 294,508,000
Operating income 77,778,000 69,847,000 69,733,000
Consolidated operating income 134,371,000 124,867,000 112,663,000
Interest (expense)-net (11,108,000) (10,362,000) (8,344,000)
Other income (deductions)-net 2,238,000 (1,630,000) (125,000)
Consolidated income from continuing
operations before income taxes
and minority interest 125,501,000 112,875,000 104,194,000
<PAGE>
Less: income taxes 56,526,000 45,255,000 38,007,000
minority interest 6,845,000 6,853,000 8,583,000
Income from continuing operations
before cumulative effect of changes
in accounting principles 62,130,000 60,767,000 57,604,000
Loss (net of income tax credits of
$8,702,000 and minority interest of
$3,012,000 for 1991) from
discontinued operations (13,880,000)
Cumulative effect of changes in
accounting principles (net of income
taxes of $3,710,000 for 1993 and
including minority interest of
$6,582,000 for 1992) (5,340,000) (5,186,000)
Net income $ 56,790,000 $ 55,581,000 $ 43,724,000
Earnings (Loss) Per Common Share:
Continuing operations $ 1.43 $ 1.41 $ 1.33
Discontinued operations (.32)
Cumulative effect of changes
in accounting principles (.12) (.12)
Total $ 1.31 $ 1.29 $ 1.01
Earnings (Loss) Per Common Share-
Assuming Full Dilution:
Continuing operations $ 1.42 $ 1.40 $ 1.32
Discontinued operations (.32)
Cumulative effect of changes
in accounting principles (.12) (.12)
Total $ 1.30 $ 1.28 $ 1.00
See Notes to Consolidated Financial Statements
</TABLE>
<PAGE>
<TABLE>
OGDEN CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<CAPTION>
ASSETS December 31, 1993 1992
<S> <C> <C>
Operations Other Than Waste to Energy:
Current Assets:
Cash and cash equivalents $ 105,539,000 $ 108,519,000
Marketable securities-at cost,
which approximates market 94,247,000 99,938,000
Receivables (less allowances:
1993, $18,226,000 and
1992, $14,954,000) 375,532,000 352,285,000
Other 29,835,000 26,845,000
Total current assets 605,153,000 587,587,000
Property, plant, and equipment-net 130,439,000 133,638,000
Other assets 281,255,000 244,013,000
Total 1,016,847,000 965,238,000
Waste-to-Energy Operations:
Cash 3,558,000 7,938,000
Receivables (less allowances:
1993, $7,321,000 and 1992, $4,776,000) 224,561,000 174,571,000
Restricted funds held in trust 359,416,000 419,763,000
Property, plant, and equipment-net 1,563,362,000 1,518,218,000
Other assets 144,766,000 102,098,000
Total 2,295,663,000 2,222,588,000
Consolidated Assets $3,312,510,000 $3,187,826,000
LIABILITIES AND SHAREHOLDERS' EQUITY
Operations Other Than Waste to Energy:
Current Liabilities:
Current portion of long-term debt $ 3,070,000 $ 4,813,000
Dividends payable 13,594,000 13,474,000
Accounts payable 60,723,000 58,898,000
Accrued expenses, etc. 105,132,000 99,427,000
Total current liabilities 182,519,000 176,612,000
Long-term debt 247,640,000 265,007,000
Deferred income taxes 43,926,000 52,679,000
Other liabilities 95,963,000 63,968,000
Minority interest in subsidiaries 61,981,000 53,494,000
Convertible subordinated debentures 151,750,000 151,750,000
Total 783,779,000 763,510,000
Waste-to-Energy Operations:
Accounts payable 24,647,000 11,681,000
Accrued expenses, etc. 156,806,000 110,490,000
Project Debt:
Revenue bonds issued by and prime
responsibility of municipalities 1,210,935,000 1,234,910,000
Revenue bonds issued by municipal
agencies with sufficient service
revenues guaranteed by third parties 340,431,000 347,903,000
<PAGE>
Other borrowings 28,423,000 28,423,000
Deferred income taxes 155,130,000 102,353,000
Deferred income 52,028,000 52,613,000
Other liabilities 74,064,000 54,859,000
Total 2,042,464,000 1,943,232,000
Consolidated Liabilities 2,826,243,000 2,706,742,000
Shareholders' Equity 486,267,000 481,084,000
Consolidated Liabilities and
Shareholders' Equity $3,312,510,000 $3,187,826,000
See Notes to Consolidated Financial Statements
</TABLE>
<PAGE>
<TABLE>
OGDEN CORPORATION AND SUBSIDIARIES
STATEMENTS OF SHAREHOLDERS' EQUITY
<CAPTION>
For the years ended December 31, 1993 1992 1991
<S> <C> <C> <C>
Serial Cumulative Convertible Preferred Stock,
Par Value $1.00 Per Share;
Authorized, 4,000,000 Shares:
Balance at beginning of year $ 62,000 $ 68,000 $ 73,000
Shares converted into common stock (5,000) (6,000) (5,000)
Balance at end of year (shares outstanding:
57,000 in 1993, 62,000 in 1992,
68,000 in 1991; aggregate involuntary
liquidation value-1993, $1,153,000) 57,000 62,000 68,000
Common Stock, Par Value $.50 Per Share;
Authorized, 80,000,000 Shares:
Balance at beginning of year 21,595,000 21,497,000 21,439,000
Exercise of stock options 95,000 76,000 40,000
Conversion of preferred shares 14,000 18,000 14,000
Conversion of debentures 46,000 4,000 4,000
Balance at end of year (shares outstanding:
43,499,000 in 1993, 43,190,000 in 1992,
42,994,000 in 1991) 21,750,000 21,595,000 21,497,000
Capital Surplus:
Balance at beginning of year 94,659,000 90,551,000 87,600,000
Exercise of stock options 3,640,000 2,623,000 1,269,000
Capital transactions of subsidiary companies-net 696,000 1,379,000 1,584,000
Conversion of preferred shares (10,000) (12,000) (10,000)
Conversion of debentures 1,238,000 118,000 108,000
Balance at end of year 100,223,000 94,659,000 90,551,000
Earned Surplus:
Balance at beginning of year 367,908,000 366,410,000 376,644,000
Net income 56,790,000 55,581,000 43,724,000
Total 424,698,000 421,991,000 420,368,000
Preferred dividends per share
1993 and 1992, $3.35; 1991, $3.44 199,000 213,000 239,000
Common dividends-per share 1993, 1992, and
1991, $1.25 54,268,000 53,870,000 53,719,000
Total dividends 54,467,000 54,083,000 53,958,000
Balance at end of year 370,231,000 367,908,000 366,410,000
Cumulative Translation Adjustment-Net (4,639,000) (2,544,000) 387,000
Pension Liability Adjustment (928,000)
Net Unrealized Loss on Noncurrent Marketable
Equity Securities (427,000) (596,000) (791,000)
Total Shareholders' Equity $486,267,000 $481,084,000 $478,122,000
See Notes to Consolidated Financial Statements
</TABLE>
<PAGE>
<TABLE>
OGDEN CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
For the years ended December 31, 1993 1992 1991
<S> <C> <C> <C>
Cash Flows From Operating Activities:
Net income $ 56,790,000 $ 55,581,000 $ 43,724,000
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Depreciation and amortization 85,643,000 77,048,000 67,715,000
Deferred income taxes 47,598,000 37,547,000 29,208,000
Cumulative effect of changes in
accounting principles 5,340,000 5,186,000
Loss from disposal of discontinued operations-net 11,991,000
Other 24,653,000 20,322,000 23,544,000
Management of Operating Assets and Liabilities:
Decrease (Increase) in Assets:
Receivables (61,559,000) (72,751,000) (12,832,000)
Other assets (36,450,000) (29,684,000) (30,309,000)
Increase (Decrease) in Liabilities:
Accounts payable 8,087,000 383,000 3,038,000
Accrued expenses 40,310,000 11,420,000 (302,000)
Deferred income (1,152,000) (926,000) 364,000
Other liabilities 22,152,000 (5,784,000) (2,422,000)
Net cash provided by operating activities 191,412,000 98,342,000 133,719,000
Cash Flows From Investing Activities:
Entities purchased, net of cash acquired (54,224,000) (7,940,000) (18,546,000)
Decrease (increase) in marketable securities 5,691,000 (63,024,000) 1,142,000
Proceeds from sale of property, plant,
and equipment 8,185,000 1,234,000 7,767,000
Investments in waste-to-energy facilities (77,777,000) (29,856,000) (68,144,000)
Other capital expenditures (38,423,000) (34,201,000) (34,230,000)
Purchase of minority interest in subsidiaries (2,942,000) (38,761,000)
Proceeds from sale of limited partnership interests 8,238,000 10,521,000
Decrease (increase) in noncurrent receivables (7,920,000) 12,490,000 (8,092,000)
Net investing activities of discontinued operations 827,000
Decrease in other investments 7,111,000 2,362,000 1,128,000
Net cash used in investing activities (157,357,000) (113,639,000) (146,388,000)
Cash Flows From Financing Activities:
Borrowings for waste-to-energy facilities 225,686,000 1,800,000
Decrease in restricted funds 7,277,000 24,813,000
Decrease (increase) in restricted funds held
in trust for waste-to-energy facilities 60,347,000 (139,705,000) 161,271,000
Other new debt 680,000 114,125,000 15,248,000
Proceeds from exercise of stock options 5,366,000 5,000,000 3,558,000
Payment of debt (49,973,000) (116,248,000) (134,138,000)
Dividends paid (54,347,000) (54,054,000) (56,491,000)
Other (3,488,000) (1,932,000) (632,000)
Net cash provided (used) by
financing activities (41,415,000) 40,149,000 15,429,000
Net Increase (Decrease) in Cash and
Cash Equivalents (7,360,000) 24,852,000 2,760,000
Cash and Cash Equivalents at Beginning of Year 116,457,000 91,605,000 88,845,000
Cash and Cash Equivalents at End of Year $109,097,000 $116,457,000 $ 91,605,000
See Notes to Consolidated Financial Statements
</TABLE>
<PAGE>
OGDEN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION, COMBINATIONS, ETC.: The Consolidated Financial
Statements include the accounts of Ogden Corporation and its subsidiaries
(Ogden). Intercompany transactions and balances have been eliminated,
including $136,664,000 due to Ogden Projects, Inc. (OPI), the Corporation's
84.2%-owned subsidiary at December 31, 1993.
On January 8, 1993, OPI consummated the purchase of all of the
outstanding capital stock of RRS Holdings, Inc. (RRS), the waste-to-energy
subsidiary of Asea Brown Boveri Inc. for a total purchase price of
$47,696,000. The acquisition was accounted for as a purchase. Accordingly,
the assets, primarily long-term contracts to operate three waste-to-energy
facilities, and liabilities of RRS have been recorded at their estimated fair
values at the date of acquisition, and operations from that date are included
in the accompanying financial statements. In addition, during 1993 in
transactions accounted for as purchases, other Ogden subsidiaries acquired a
Spanish environmental services company and two aviation service companies for
a total cost of $6,528,000. If Ogden had acquired these companies at January
1, 1992, consolidated net sales and service revenues would have increased to
$1,868,500,000. Net income and earnings per share would not have changed by
significant amounts.
CASH AND CASH EQUIVALENTS: Cash and cash equivalents include all cash
balances and highly liquid investments having maturities of three months or
less.
MARKETABLE SECURITIES: Marketable securities are carried at the lower of
cost or market. Net unrealized losses on noncurrent marketable equity
securities have been charged to shareholders' equity.
CONTRACTS AND REVENUE RECOGNITION: Service revenues for Operations Other
Than Waste to Energy primarily include only the fees for cost-plus contracts
and the gross billings for fixed-fee and other types of contracts. Both the
service revenues and operating expenses exclude reimbursed expenditures of
$432,891,000, $405,362,000, and $386,148,000 for the years ended December 31,
1993, 1992, and 1991, respectively. Subsidiaries engaged in governmental
contracting recognize revenues from cost-plus-fixed-fee contracts on the
basis of direct costs incurred plus indirect expenses and the allocable
portion of the fixed fee. Revenues under time and material contracts are
recorded at the contracted rates as the labor hours and other direct costs
are incurred. Revenues under fixed-price contracts are recognized on the
basis of the estimated percentage of completion of services rendered.
Waste-to-energy subsidiaries engaged in long-term construction contracting
record income on the percentage-of-completion method of accounting and
recognize income as the work progresses. Anticipated losses on contracts are
recognized as soon as they become known. In addition, construction revenues
include amounts relating to sales of limited partnership interests and
related tax benefits as well as other activities prior to the commencement of
commercial operations. Waste-to-energy service revenues represent the fees
earned under contracts to operate and maintain the facilities and to service
the facilities' debt, with additional fees earned based on excess tonnage
processed and energy generation. Long-term unbilled service receivables are
discounted in recognizing the present value for services performed currently.
Such unbilled receivables at December 31, 1993, amounted to $108,000,000.
<PAGE>
INVENTORIES: Inventories, consisting primarily of finished goods, are
recorded principally at the lower of first-in, first-out cost or market.
PROPERTY, PLANT, AND EQUIPMENT: Property, plant, and equipment is stated at
cost. For financial reporting purposes, depreciation is provided by the
straight-line method over the estimated useful lives of the assets, which
range generally from five years for machinery and equipment to 50 years for
waste-to-energy facilities. Accelerated depreciation is generally used for
Federal income tax purposes. Leasehold improvements are amortized by the
straight-line method over the terms of the leases or the estimated useful
lives of the improvements as appropriate. Landfills are amortized based on
the quantities deposited into each landfill compared to the total estimated
capacity of such landfill.
RESTRICTED FUNDS: Restricted funds represent proceeds from the financing of
waste-to-energy facilities. Funds are held in trust and released as
expenditures are made or upon satisfaction of conditions provided under the
respective trust agreements.
GOODWILL: Goodwill acquired subsequent to 1970 is being amortized by the
straight-line method over periods ranging from 20 to 40 years. Goodwill
acquired prior to 1970 is not being amortized. Where there has been a loss
of value, goodwill is written off.
RETIREMENT PLANS: Ogden and certain subsidiaries have several retirement
plans covering all salaried and hourly employees. Certain subsidiaries also
contribute to multiemployer plans for unionized hourly employees that cover,
among other benefits, pensions and postemployment health care. During 1992
and 1991, the cost of retiree health care and life insurance benefits for
employees not covered by multiemployer plans was recognized as expense as
claims were paid. For 1992 and 1991, these costs were not significant. Ogden
adopted Statement of Financial Accounting Standards (SFAS) No. 106,
"Employers' Accounting for Postretirement Benefits Other than Pensions," as
of January 1, 1993. The effect of adopting SFAS No. 106 is shown in the
accompanying financial statements as a cumulative effect of a change in
accounting principle and is reflected as a charge to income of $5,340,000
(see Note 15).
SFAS No. 112, "Employers' Accounting for Postemployment Benefits," was
issued in November 1992 and is effective for years beginning after December
15, 1993. This Statement establishes accounting standards for employers who
provide benefits to former or inactive employees after employment but before
retirement and requires the accrual of these benefits during the period
employees render the service necessary to earn the benefits rather than on
the current pay-as-you-go method. These benefits include, but are not
limited to, salary continuation, supplemental unemployment benefits,
severance benefits, disability benefits, job training, health care benefits,
and life insurance coverage. The cumulative effect of implementing SFAS No.
112 as of January 1, 1994, will not have a significant effect on Ogden's
financial condition or results of operations.
INCOME TAXES: Ogden files a consolidated Federal income tax return, which
includes all eligible United States subsidiary companies. Foreign
subsidiaries are taxed according to regulations existing in the countries in
which they do business. Provision has not been made for United States income
taxes on distributions, which may be received from foreign subsidiaries, that
would be substantially offset by foreign tax credits. Investment credits are
accounted for by the "flow-through" method, and provisions for income taxes
have been reduced by the amount of investment credits earned.
Ogden adopted SFAS No. 109, "Accounting for Income Taxes," as of January
1, 1992. The effect of adopting SFAS No. 109 is shown in the accompanying
financial statements as a cumulative effect of a change in accounting
principle and is reflected as a charge to income of $5,186,000 (see Note 7).
GAIN ON ISSUANCE OF STOCK BY SUBSIDIARIES: At the time a subsidiary sells
stock to unrelated parties at prices in excess of its book value, Ogden's
equity in the subsidiary increases, and Ogden records this increase as a gain
with appropriate deferred income taxes.
RECLASSIFICATION: The accompanying financial statements have been
reclassified as to certain amounts to conform with the 1993 presentation.
2. DISCONTINUED OPERATIONS
In December 1993, the Corporation adopted a plan to discontinue its
fixed-site hazardous waste business. As part of the disposal of this
business, the Corporation ceased all development activities and in 1994
intends to dispose of all assets related to this business. Provision has
been made in 1993 for the write-down of assets, primarily development costs,
resulting in a pretax loss of $12,629,000.
In December 1991, the Corporation adopted a plan to discontinue the
on-site remediation business, utilizing mobile technology, of OPI. During
1993, the Corporation recognized a pretax gain of $12,379,000 resulting
primarily from the receipt of amounts previously withheld pending
satisfactory completion of obligations under existing contracts and from
proceeds from the sale of assets in excess of previously estimated net
realizable values.
For the year ended December 31, 1993, the $250,000 net loss from both
discontinued operations is reported as Other (Income) Deductions-Net in the
statements of consolidated income. At December 31, 1993, the remaining net
liabilities of approximately $1,000,000 related to discontinued operations
are included in Other Liabilities in the accompanying consolidated balance
sheets.
The results of operations of the discontinued on-site remediation
business and the estimated loss on disposal, presented as Discontinued
Operations in the accompanying statements of consolidated income (expressed
in thousands of dollars) for the year ended December 31,1991, were as
follows:
<TABLE>
<S> <C>
Service revenues $ 4,540
Less: costs and expenses 8,014
income tax credits (1,181)
minority interest (404)
Loss from operations 1,889
Net loss on disposition (net of income tax credits and
minority interest of $7,521 and $2,608, respectively) 11,991
Loss from discontinued operations $13,880
</TABLE>
<PAGE>
3. PROPERTY, PLANT, AND EQUIPMENT
Property, plant, and equipment (expressed in thousands of dollars) consisted
of the following:
<TABLE>
<CAPTION>
1993 1992
<S> <C> <C>
Operations Other Than Waste to Energy:
Land $ 1,804 $ 1,805
Buildings and improvements 95,019 94,321
Machinery and equipment 262,050 249,877
Total 358,873 346,003
Less accumulated depreciation
and amortization 228,434 212,365
Property, plant, and equipment-net $ 130,439 $ 133,638
Waste-to-Energy Operations:
Land $ 5,049 $ 5,049
Waste-to-energy facilities 1,539,373 1,538,762
Buildings and improvements 48,146 39,498
Machinery and equipment 23,016 19,228
Landfills 8,464 8,306
Construction in progress 95,789 24,993
Total 1,719,837 1,635,836
Less accumulated depreciation and
amortization 156,475 117,618
Property, plant, and equipment-net $1,563,362 $1,518,218
</TABLE>
4. OTHER ASSETS
Other assets (expressed in thousands of dollars) consisted of the following:
<TABLE>
<CAPTION>
1993 1992
<S> <C> <C>
Operations Other Than Waste to Energy:
Noncurrent marketable securities,
etc. $ 5,434 $ 10,224
Noncurrent receivables 52,177 44,257
Investment and advances in
joint ventures 33,554 30,886
Goodwill and other intangible assets 83,552 79,071
Unamortized contract acquisition costs,
etc. 58,026 35,272
Other 48,512 44,303
Total $281,255 $244,013
Waste-to-Energy Operations:
Unamortized bond issuance costs $ 36,984 $ 39,945
Unamortized contract acquisition costs 55,519 16,201
Deferred charges on projects-net 12,704 16,014
Spare parts 25,825 16,458
Other 13,734 13,480
Total $144,766 $102,098
</TABLE>
<PAGE>
<PAGE>
5. ACCRUED EXPENSES, ETC.
Accrued expenses, etc. (expressed in thousands of dollars), consisted of the
following:
<TABLE>
<CAPTION>
1993 1992
<S> <C> <C>
Operations Other Than Waste to Energy:
Insurance $ 18,221 $ 22,385
Payroll 19,314 19,229
Payroll and other taxes 3,542 2,563
Interest 7,015 7,276
Other 57,040 47,974
Total $105,132 $ 99,427
Waste-to-Energy Operations:
Interest $ 36,430 $ 34,252
Construction costs 27,314 11,828
Lease payments 12,234 10,906
Insurance 16,201 8,869
Municipalities' share of service revenues 18,747 12,764
Other 45,880 31,871
Total $156,806 $110,490
</TABLE>
6. CREDIT ARRANGEMENTS
At December 31, 1993, Ogden had unused revolving credit lines amounting to
$177,000,000, of which $155,000,000 is available under its principal
revolving credit line at various borrowing rates including prime, the London
interbank offering rate plus 3/8 of 1%, or certificate-of-deposit rates plus
1/2 of 1%. Ogden is not required to maintain compensating balances; however,
Ogden pays a facility fee of 1/4 of 1% on its principal revolving credit line
of $175,000,000, which expires October 29, 1996.
7. INCOME TAXES
Ogden adopted the provisions of SFAS No. 109, "Accounting for Income Taxes,"
as of January 1, 1992. SFAS No. 109 requires recognition of deferred income
tax assets and liabilities for the expected future tax consequences of events
that have been included in the financial statements or income tax returns.
Under this method, deferred income tax liabilities and assets are based on
the difference between the financial statements and the tax bases of assets
and liabilities, using tax rates currently in effect. As of January 1, 1992,
Ogden recorded a deferred income tax charge of $5,186,000 or $.12 per share,
which represented a net increase to the deferred tax liability as of that
date. This amount has been included in the statements of consolidated income
as a cumulative effect of a change in accounting principle.
In August 1993, the Omnibus Budget Reconciliation Act was enacted, which
increased the corporate Federal income tax rate from 34% to 35% retroactive
to January 1, 1993. In addition, deferred Federal income tax balances were
adjusted to this new rate as required by SFAS No. 109, which resulted in a
one-time charge for Federal income taxes of $4,066,000 in 1993.
<PAGE>
The components of the provision for income taxes (expressed in thousands
of dollars) were as follows:
<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Current:
Federal $ 453 $ 183
State 6,999 $ 5,498 5,491
Foreign 1,476 2,210 1,944
Total current 8,928 7,708 7,618
Deferred:
Federal 43,295 32,392 16,864
State 4,303 5,155 4,823
Total deferred 47,598 37,547 21,687
Total $56,526 $45,255 $29,305
</TABLE>
Income tax expense (credit) (expressed in thousands of dollars) was included
in the financial statements as follows:
<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Continuing operations $56,526 $45,255 $38,007
Discontinued operations (8,702)
Total $56,526 $45,255 $29,305
<PAGE>
</TABLE>
<TABLE>
The provision for income taxes (expressed in thousands of dollars) varied from the Federal
statutory income tax rate due to the following:
<CAPTION>
1993 1992 1991
Percent Percent Percent
of Income of Income of Income
Amount Before Amount Before Amount Before
of Tax Taxes of Tax Taxes of Tax Taxes
<S> <C> <C> <C> <C> <C> <C>
Taxes at statutory rate $43,925 35.0% $38,378 34.0% $26,724 34.0%
Adjustment of deferred
income tax balances 4,066 3.2
State income taxes, net
of Federal tax benefit 7,346 5.8 7,030 6.2 6,807 8.7
Investment tax credit, net
of recapture (1,807) (1.4) 1,553 2.0
Tax benefit of prior
foreign losses (2,511) (3.2)
Other-net. 2,996 2.4 (153) ( .1) (3,268) (4.2)
Provision for income taxes $56,526 45.0% $45,255 40.1% $29,305 37.3%
</TABLE>
<PAGE>
Deferred income tax (credits) charges (expressed in thousands of
dollars), arising from differences between tax and financial reporting,
determined under the provisions of Accounting Principles Board Opinion 11 for
1991, were as follows:
<TABLE>
<CAPTION>
1991
<S> <C>
Depreciation $62,675
Net operating loss carryforwards (40,261)
Accrued expenses, etc. (1,436)
Investment and other tax credits, net of recapture 1,553
Disposal of discontinued operations (7,521)
Deferred income 7,770
Interest income (2,801)
Unbilled revenue (767)
Other-net 2,475
Total $21,687
</TABLE>
The components of the net deferred income tax liability (expressed in
thousands of dollars) as of December 31, 1993 and 1992, were as follows:
<TABLE>
<CAPTION>
1993 1992
<S> <C> <C>
Deferred Tax Assets:
Deferred income $ 18,922 $ 11,712
Accrued expenses 46,465 40,448
Other liabilities 17,758 16,837
Investment tax credits 33,844 31,072
Alternative minimum tax credits 9,246 11,366
Net operating loss carryforwards 185,210 153,566
Total deferred tax assets 311,445 265,001
Deferred Tax Liabilities:
Unbilled accounts receivable 44,784 33,640
Property, plant, and equipment 435,580 352,743
Other 30,137 33,650
Total deferred tax liabilities 510,501 420,033
Net Deferred Tax Liability:
Operations Other Than Waste to Energy 43,926 52,679
Waste-to-Energy Operations 155,130 102,353
Total $199,056 $155,032
</TABLE>
At December 31, 1993, for Federal income tax purposes, the Corporation
had investment and energy tax credit carryforwards of approximately
$33,800,000 and net operating loss carryforwards of approximately
$424,800,000, which will expire in 2004 through 2008. Deferred Federal
income taxes have been reduced by the tax effect of these amounts.
8. LONG-TERM DEBT
Long-term debt (expressed in thousands of dollars) consisted of the
following:
<PAGE>
<TABLE>
<CAPTION>
1993 1992
<S> <C> <C>
Operations Other Than Waste to Energy:
Adjustable rate revenue bonds due
2014 through 2024 $ 124,755 $ 124,755
9.25% debentures due 2022 100,000 100,000
Miscellaneous 22,885 40,252
Total $ 247,640 $ 265,007
Waste-to-Energy Operations:
Project Debt:
Revenue Bonds Issued by and Prime
Responsibility of Municipalities:
3.5-10% serial revenue bonds maturing
1994 through 2005 $ 257,180 $ 269,055
5.4-10% term revenue bonds
due 1995 through 2019 934,685 865,285
Adjustable rate revenue bonds
due 1994 through 2013 19,070 100,570
Total 1,210,935 1,234,910
Revenue Bonds Issued by Municipal
Agencies with Sufficient Service
Revenues Guaranteed by Third Parties:
4.15-8.9% serial revenue bonds maturing
1994 through 2007 91,290 94,280
7.25-7.4% term revenue bonds due 1999
through 2011 105,610 105,610
Adjustable rate revenue bonds due 1994
through 2011 143,531 148,013
Total 340,431 347,903
Total project debt 1,551,366 1,582,813
Other borrowings 28,423 28,423
Total $1,579,789 $1,611,236
</TABLE>
The project debt associated with the financing of waste-to-energy
facilities is generally arranged by municipalities through the issuance of
tax-exempt and taxable revenue bonds. The category, "Revenue Bonds Issued by
and Prime Responsibility of Municipalities," includes bonds issued with
respect to which debt service is an explicit component of the client
community's obligation under the related service agreement. In the event
that a municipality is unable to satisfy its payment obligations, the
bondholders' recourse with respect to the Corporation is limited to the
waste-to-energy facilities and restricted funds pledged to secure such
obligations. The category, "Revenue Bonds Issued by Municipal Agencies with
Sufficient Service Revenues Guaranteed by Third Parties," includes bonds
issued to finance three facilities for which contractual obligations of third
parties to deliver waste ensure sufficient revenues to pay debt service,
although such debt service is not an explicit component of a third party's
service fee obligation.
Payment obligations for the project debt, which are nonrecourse to the
Corporation subject to construction and operating performance guarantees and
commitments, are secured by the revenues pledged under various indentures and
are collateralized principally by a mortgage lien and a security interest in
each of the respective waste-to-energy facilities and related assets. At
December 31, 1993, such project debt was collateralized by property, plant,
and equipment with a net carrying value of $1,534,958,000, credit
enhancements of approximately $200,000,000 for which Ogden has certain
reimbursement obligations, and substantially all restricted funds (see Note
9).
As part of the acquisition of Blount Energy Resource Corp. in 1991, OPI
assumed an obligation for approximately $28,400,000, representing the equity
component of a sale and leaseback arrangement relating to the Hennepin
County, Minnesota, waste-to-energy facility. This arrangement is accounted
for as a financing. The obligation has an effective interest rate of 5% and
extends through 2017.
The adjustable rate revenue bonds are adjusted periodically to
re-establish the variable rates at current market rates for similar issues,
generally with an upside cap of 15%. The average rates for Waste-to-Energy
Operations and Operations Other Than Waste to Energy, respectively, were
2.65% and 2.24% in 1993 and 3.40% and 2.74% in 1992. The bonds due 2014
through 2024 were issued under agreements that contain various restrictions,
the most significant being the requirement to maintain Shareholders' Equity
of $400,000,000. At December 31, 1993, Ogden had $86,267,000 in excess of
the required amount. The maturities on long-term debt (expressed in
thousands of dollars) at December 31, 1993, were as follows:
<TABLE>
<CAPTION>
Operations
Other Than Waste-to-
Waste to Energy
Energy Operations
<S> <C> <C>
1994 $ 3,070 $ 32,632
1995 2,131 37,867
1996 20,680 48,597
1997 52,617
1998 58,132
Later years 224,829 1,349,944
Total $250,710 $1,579,789
</TABLE>
At December 31, 1993, Ogden had entered into four interest rate swap
agreements. Under two of these agreements covering notional amounts of
$100,000,000 each, expiring March 23, 1994, and December 16, 1998,
respectively, Ogden receives a fixed rate of 6.56% and 5.52%, respectively,
per annum paid on a semi-annual basis and pays a floating rate of three
months LIBOR set in arrears on a quarterly basis. At December 31, 1993, the
LIBOR rate was 3.38%. The two other interest rate swap agreements have
notional amounts at December 31, 1993, of $91,070,000 and $48,305,000,
respectively, which are reduced periodically and expire in May 1999. Under
the former swap agreement, OPI pays a fixed rate of 3.95% per annum on a
semi-annual basis and receives a floating rate based on an index of
tax-exempt variable rate obligations. Under the latter swap agreement, OPI
pays a fixed rate of 5.25% per annum on a semi-annual basis and receives a
floating rate based on defined commercial paper rate. At December 31, 1993,
the floating rates on the two swaps were 2.34% and 3.36%, respectively. The
counterparties to these interest swaps are major financial institutions.
Management believes the credit risk associated with nonperformance is not
significant.
9. RESTRICTED FUNDS HELD IN TRUST
Funds held by trustees from proceeds received from the financing of
waste-to-energy facilities are segregated principally for the construction of
the facilities, debt service reserves for payment of principal and interest
on revenue bonds, and capitalized interest for payment of interest generally
during the construction period. Such funds are invested principally in
United States Treasury bills and notes and United States government agencies
securities.
Fund balances (expressed in thousands of dollars) were as follows:
<TABLE>
<CAPTION>
1993 1992
<S> <C> <C>
Construction funds $ 71,725 $129,913
Debt service funds 197,649 195,841
Capitalized interest funds 19,289 28,788
Other funds 70,753 65,221
Total $359,416 $419,763
</TABLE>
Based on anticipated construction schedules, the remaining construction
funds at December 31, 1993, are expected to be disbursed during 1994 and
1995.
10. CONVERTIBLE SUBORDINATED DEBENTURES
Convertible subordinated debentures (expressed in thousands of dollars)
consisted of the following:
<TABLE>
<CAPTION>
1993 1992
<S> <C> <C>
6% debentures due June 1, 2002 $ 85,000 $ 85,000
5 3/4% debentures due October 20, 2002 66,750 66,750
Total $151,750 $151,750
</TABLE>
The 6% convertible subordinated debentures are convertible into Ogden
common stock at the rate of one share for each $39.077 principal amount of
debentures. The debentures are redeemable at Ogden's option at 103.6% of
principal amount during the year commencing June 1, 1993, and at decreasing
prices thereafter.
The 5 3/4% convertible subordinated debentures are convertible into
Ogden common stock at the rate of one share for each $41.772 principal amount
of debentures. The debentures are redeemable at Ogden's option at 100% of
face value. During 1992, the Corporation purchased $1,250,000 face value of
these debentures at prevailing market rates. The net gain on the acquisition
of these securities amounted to $259,000 and is included in other income.
The 5% convertible subordinated debentures became due on June 1, 1993,
and were converted into Ogden common stock at the rate of one share for each
$14.01 principal amount of debentures.
During 1993, 1992, and 1991, $1,287,000, $122,000, and $112,000 face
value of the 5% debentures were converted into 91,762, 8,694, and 7,982
shares of common stock, respectively.
11. PREFERRED STOCK
The outstanding Series A $1.875 Cumulative Convertible Preferred Stock is
convertible at any time at the rate of 5.97626 common shares for each
preferred share. Ogden may redeem the outstanding shares of preferred stock
at $50 per share, plus all accrued dividends. These preferred shares are
entitled to receive cumulative annual dividends at the rate of $1.875 per
share, plus an amount equal to 150% of the amount, if any, by which the
dividend paid or any cash distribution made on the common stock in the
preceding calendar quarter exceeded $.667 per share. During 1993, 1992, and
1991, 4,697, 6,013, and 4,901 preferred shares were converted into 28,046,
35,908, and 29,265 shares of common stock, respectively.
12. COMMON STOCK AND STOCK OPTIONS
In 1986, Ogden adopted a nonqualified stock option plan (the "1986 Plan").
Under the 1986 Plan, options and/or stock appreciation rights may be granted
to key management employees to purchase Ogden common stock at prices not less
than the fair market value at the time of grant, which become exercisable
during a five-year period from the date of grant, except for the grant to the
Chairman of the Board, which vested in its entirety six months after the date
of the grant. As adopted, and as adjusted for stock splits, the 1986 Plan
calls for up to an aggregate of 2,700,000 shares of Ogden common stock to be
available for issuance upon the exercise of options and stock appreciation
rights, which may be granted over a ten-year period ending March 10, 1996;
115,500 shares were available for grant at December 31, 1993.
In October 1990, Ogden adopted the Ogden 1990 Stock Option Plan (the
"1990 Plan"). Under the 1990 Plan, nonqualified options, incentive stock
options, and/or stock appreciation rights and stock bonuses may be granted to
key management employees and outside directors to purchase Ogden common stock
at an exercise price to be determined by the Ogden Compensation Committee.
Pursuant to the 1990 Plan, an aggregate of 3,000,000 shares of Ogden common
stock is available for issuance upon the exercise of such options, rights,
and bonuses, which may be granted over a ten-year period ending October 11,
2000; 237,000 shares were available for grant at December 31, 1993.
Under the foregoing plans, Ogden issued 3,190,000 limited stock
appreciation rights in conjunction with the stock options granted. These
limited rights are exercisable only during the period commencing on the first
day following the occurrence of any of the following events and terminate 90
days after such date: the acquisition by any person of 20% or more of the
voting power of Ogden's outstanding securities; the approval by Ogden
shareholders of an agreement to merge or to sell substantially all of its
assets; or the occurrence of certain changes in the membership of the Ogden
Board of Directors. The exercise of these limited rights entitles
participants to receive an amount in cash with respect to each share subject
thereto, equal to the excess of the market value of a share of Ogden common
stock on the exercise date or the date these limited rights become
exercisable, over the related option price.
In connection with the acquisition of ERC International, Inc. (ERCI),
Ogden assumed pre-existing ERCI stock option plans and converted all options
then outstanding into options to acquire shares of Ogden common stock. No
further options will be granted under the ERCI plans. These options expired
in 1993.
<PAGE>
Information regarding the Corporation's stock option plans is summarized as
follows:
<TABLE>
<CAPTION>
Option Available
Price for
Per Share Outstanding Exercisable Grant
<S> <C> <C> <C> <C>
1986 Plan:
December 31, 1990, balance $14.98-28.54 1,305,500 589,500 105,500
Became exercisable 154,000
Exercised 14.98 (79,100) (79,100)
December 31, 1991, balance 14.98-28.54 1,226,400 664,400 105,500
Became exercisable 150,000
Exercised 14.98 (136,400) (136,400)
Cancelled 28.54 (10,000) (10,000) 10,000
December 31, 1992, balance 14.98-28.54 1,080,000 668,000 115,500
Became exercisable 144,000
Exercised 14.98 (49,313) (49,313)
December 31, 1993, balance 14.98-28.54 1,030,687 762,687 115,500
1990 Plan:
December 31, 1990, balance 18.31 2,520,000 480,000
Granted 20.31 211,000 (211,000)
Became exercisable 498,000
Cancelled 18.31-20.31 (50,000) 50,000
December 31, 1991, balance 18.31-20.31 2,681,000 498,000 319,000
Granted 21.19 40,000 (40,000)
Became exercisable 539,400
Cancelled 18.31-21.19 (66,000) 66,000
December 31, 1992, balance 18.31-21.19 2,655,000 1,037,400 345,000
Granted 23.56 158,000 (158,000)
Became exercisable 522,900
Exercised 18.31-20.31 (123,000) (123,000)
Cancelled 18.31-20.31 (50,000) (4,000) 50,000
December 31, 1993, balance 18.31-23.56 2,640,000 1,433,300 237,000
Conversion of ERCI Plan:
December 31, 1990, balance 19.98-35.55 143,115 96,281
Became exercisable 30,591
Exercised 19.98 (407) (407)
Cancelled 19.98-34.03 (4,750) (4,750)
December 31, 1991, balance 21.05-35.55 137,958 121,715
Became exercisable 16,243
Exercised 21.05 (15,890) (15,890)
Cancelled 21.05-35.55 (51,951) (51,951)
December 31, 1992, balance 21.05-24.74 70,117 70,117
Exercised 21.05 (23,102) (23,102)
Cancelled 21.05-24.74 (47,015) (47,015)
December 31, 1993, balance - - -
Total, December 31, 1993 $14.98-28.54 3,670,687 2,195,987 352,500
</TABLE>
<PAGE>
At December 31, 1993, there were 8,138,164 shares of common stock reserved
for the exercise of stock options and the conversion of preferred shares and
debentures.
13. PREFERRED STOCK PURCHASE RIGHTS
On September 20, 1990, The Board of Directors declared a dividend of one
preferred stock purchase right (Right) on each outstanding share of common
stock. Among other provisions, each Right may be exercised to purchase a one
one-hundredth share of a new series of cumulative participating preferred stock
at an exercise price of $80, subject to adjustment. The Rights may only be
exercised after a party has acquired 15% or more of the Corporation's common
stock or commenced a tender offer to acquire 15% or more of the Corporation's
common stock. The Rights do not have voting rights, expire October 2, 2000, and
may be redeemed by the Corporation at a price of $.01 per Right at any time
prior to the acquisition of 15% of the Corporation's common stock.
In the event a party acquires 15% or more of the Corporation's outstanding
common stock in accordance with certain defined terms, each Right will then
entitle its holder (other than such party) to purchase, at the Right's
then-current exercise price, a number of the Corporation's common shares having
a market value of twice the Right's exercise price. At December 31, 1993,
43,499,122 preferred stock purchase rights were outstanding.
14. RETIREMENT PLANS
Ogden has retirement plans that cover substantially all of its employees. A
substantial portion of hourly employees of Ogden Services Corporation
participates in defined contribution plans. Other employees participate in
defined benefit or defined contribution plans.
The defined benefit plans provide benefits based on years of service and
either employee compensation or a flat benefit amount. Ogden's funding policy
for those plans is to contribute annually an amount no less than the minimum
funding required by ERISA. Contributions are intended to provide not only
benefits attributed to service to date but also for those expected to be earned
in the future.
The following table sets forth the defined benefit plans' funded status and
related amounts recognized in Ogden's consolidated balance sheets (expressed in
thousands of dollars):
<TABLE>
<CAPTION>
1993 1992
Assets Accumulated Assets
Exceed Benefits Exceed
Accumulated Exceed Accumulated
Benefits Assets Benefits
<S> <C> <C> <C>
Accumulated Benefit Obligation:
Vested $ 5,356 $ 8,888 $11,100
Nonvested 879 1,511 1,404
Total $ 6,235 $10,399 $12,504
Projected benefit obligation
for services rendered to date $ 8,723 $12,889 $16,537
Plan assets at fair value 7,903 7,880 15,268
Underfunded projected benefits $ 820 $ 5,009 $ 1,269
<PAGE>
Source of Underfunded Status:
Unrecognized net gain (loss) from
past experience different from
that assumed and effects of changes
in assumptions $(1,356) $(1,415) $ 23
Unrecognized net transition asset
(obligation) at January 1, 1986,
being recognized over 13 years 728 (300) 602
(Pension liability) prepaid pension
costs (192) 228 1,598
Unrecognized prior service costs (3,522) (3,492)
Underfunded projected benefits $ 820 $ 5,009 $ 1,269
</TABLE>
At December 31, 1993, the accumulated benefit obligation of certain pension
plans exceeded plan assets. As required by SFAS No. 87, the Corporation
recorded a liability for such excess of $2,765,000 offset by an intangible asset
and a reduction, net of income taxes, of $928,000 in Shareholders' Equity.
Pension costs for Ogden's defined plans included the following components
(expressed in thousands of dollars):
<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Service cost on benefits earned
during the period $1,610 $1,592 $1,415
Interest cost on projected benefit
obligation 1,457 1,301 1,077
Net amortization and deferral 40 161 189
Actual return on plan assets (979) (1,227) (867)
Net periodic pension cost $2,128 $1,827 $1,814
</TABLE>
The weighted-average discount rate and rate of increase in future
compensation levels used in determining the actuarial present value of the
projected benefit obligations were 7 1/2% and 4 1/2% for 1993 and 8 1/2% and 5%
for the years 1992 and 1991, respectively. The expected long-term rate of
return on plan assets was 8% for each year.
Contributions and costs for defined contribution plans are determined by
benefit formulas based on percentage of compensation as well as discretionary
contributions and totaled $13,061,000, $11,397,000, and $9,637,000 in 1993,
1992, and 1991, respectively. Plan assets at December 31, 1993, 1992, and 1991,
primarily consisted of common stocks, United States government securities, and
guaranteed insurance contracts.
With respect to union employees, the Corporation is required under
contracts with various unions to pay, generally based on hours worked,
retirement, health, and welfare benefits. These multiemployer defined benefit
and defined contribution plans are not controlled or administered by the
Corporation. The amounts charged to expense for such plans during 1993, 1992,
and 1991 were $32,000,000, $32,000,000, and $31,200,000, respectively.
15. POSTRETIREMENT HEALTH CARE AND LIFE INSURANCE BENEFITS
In 1992, the Corporation discontinued its policy of providing postretirement
health care and life insurance benefits for all salaried employees, except those
employees who were retired or eligible for retirement at December 31, 1992, or
who were covered under certain company-sponsored union plans. The Corporation
adopted SFAS No. 106, "Employers' Accounting for Postretirement Benefits Other
Than Pensions," as of January 1, 1993. SFAS No. 106 requires the accrual method
of accounting for postretirement health care and life insurance benefits, based
on actuarial determined costs to be recognized over the period from the date of
hire to the full eligibility date of employees who are expected to qualify for
such benefits.
As of January 1, 1993, the Corporation recognized the full amount of its
estimated accumulated postretirement benefit obligation, representing the
present value of the estimated future benefits payable to current retirees, and
a pro rata portion of estimated benefits payable to eligible active employees
after retirement. The effect of recognizing SFAS No. 106 at January 1, 1993,
is shown in the accompanying financial statements as a cumulative effect of a
change in accounting principle and is reflected as a charge to income of
$5,340,000 (net of income taxes of $3,710,000) or $.12 per share.
For the year ended December 31, 1993, the components of the periodic
expense for these benefits were as follows:
Recognition of Components of Net Periodic Postretirement Benefit Costs for the
Year Ended December 31, 1993:
<TABLE>
<S> <C>
Service costs $140,157
Interest 747,665
Total $887,822
</TABLE>
As of December 31, 1993, the actuarial recorded liabilities for these
postretirement benefits, none of which has been funded, were as follows:
<TABLE>
Accumulated Postretirement Benefit Obligation:
<S> <C>
Retirees $ 3,948,954
Eligible active participants 4,957,341
Other active 1,654,000
Total accumulated postretirement obligation 10,560,295
Unrecognized net loss 1,135,080
Accrued postretirement benefit liability $ 9,425,215
</TABLE>
The accumulated postretirement benefit obligation was determined using a
discount rate of 7.5%, an estimated increase in compensation levels of 4.5%, and
a health care cost rate of approximately 14.5%, decreasing in subsequent years
until it reaches 6% in the year 2008 and thereafter. The effect of a one
percentage point increase in the assumed health care cost trend rates for each
future year on the aggregate of the service and interest cost components of net
periodic postretirement health care benefit cost and the accumulated
postretirement benefit obligation for health care benefits would be $83,000 and
$723,000, respectively.
16. INTEREST AND DEBT SERVICE CHARGES
Ogden charges to the cost of capital assets interest incurred during the period
of construction. For the years ended December 31, 1993, 1992, and 1991,
$5,538,000, $753,000, and $9,166,000, respectively, of interest costs were
charged to assets during construction.
Interest expense for Operations Other Than Waste to Energy, net of amounts
capitalized, was $23,641,000, $21,980,000, and $17,903,000 for 1993, 1992, and
1991, respectively. Debt service charges for Waste-to-Energy Operations
(expressed in thousands of dollars) consisted of the following:
<PAGE>
<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Interest incurred on taxable
and tax-exempt borrowings $107,846 $99,828 $101,906
Interest earned on temporary investment
of borrowings during construction, etc. 9,985 6,095 8,919
Net interest incurred 97,861 93,733 92,987
Interest capitalized during construction
in property, plant, and equipment 5,538 753 9,166
Interest expense-net 92,323 92,980 83,821
Amortization of bond issuance costs 6,341 6,754 5,137
Debt service charges $ 98,664 $99,734 $ 88,958
</TABLE>
17. INVESTMENTS IN NONCURRENT MARKETABLE EQUITY SECURITIES
The aggregate cost, market value, and components of unrealized loss of
noncurrent marketable equity securities (expressed in thousands of dollars) at
December 31, 1993 and 1992, were as follows:
<TABLE>
<CAPTION>
1993 1992
<S> <C> <C>
Cost $5,549 $5,549
Market value 4,846 4,611
Gross unrealized loss 703 938
Deferred income taxes 276 342
Valuation allowance charged to
shareholders' equity $ 427 $ 596
</TABLE>
18. FOREIGN EXCHANGE TRANSLATION
Foreign exchange translation adjustments for 1993, 1992, and 1991, amounting to
$(2,095,000), $(2,931,000), and $310,000, respectively, have been (charged)
credited directly to shareholders' equity.
19. EARNINGS PER SHARE
Earnings per common share were computed by dividing net income, reduced by
preferred stock dividend requirements, by the weighted average of the number of
shares of common stock and common stock equivalents, where dilutive, outstanding
during each year.
Earnings per common share, assuming full dilution, were computed on the
assumption that all convertible debentures, convertible preferred stock, and
stock options converted or exercised during each year, or outstanding at the end
of each year, were converted at the beginning of each year or at the date of
issuance or grant, if dilutive. This computation provided for the elimination
of related convertible debenture interest and preferred dividends.
The weighted-average number of shares used in computing earnings per common
share was as follows:
<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Primary 43,378,000 43,086,000 42,969,000
Assuming full dilution 43,776,000 43,583,000 43,512,000
</TABLE>
<TABLE>
20. SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
<CAPTION>
(Expressed in thousands of dollars) 1993 1992 1991
<S> <C> <C> <C>
Cash Paid for Interest and Income Taxes:
Interest (net of amounts capitalized) $117,733 $115,316 $100,582
Income taxes 3,197 6,328 6,069
Noncash Investing and Financing Activities:
Conversion of preferred shares for
common shares 5 6 5
Conversion of debentures for common shares 1,287 122 112
Adjustments to property, plant, and
equipment resulting from purchase price
and contract cost adjustments 8,300
Adjustment to property, plant, and
equipment and deferred income taxes in
connection with adoption of SFAS No. 109 38,051
Contract acquisition costs, etc. 22,539
Future contract obligations (22,539)
Acquisition of net assets in connection
with merger 4,375
Detail of Entities Acquired:
Fair value of assets acquired 76,875 9,420 278,302
Liabilities assumed (22,651) (1,480) (259,756)
Net cash paid for acquisitions 54,224 7,940 18,546
</TABLE>
21. INFORMATION CONCERNING BUSINESS SEGMENTS
Ogden's two activity areas are Operating Services and Waste-to-Energy
Operations. Operating Services includes professional and technical services to
environmental and energy markets; worldwide aviation ground services and
fueling; food and beverage services to airlines as well as sports and recreation
centers; a wide range of technical services to space and defense contractors;
security services; facility management services, including promotion of sporting
and entertainment events; building and plant housekeeping and mechanical
maintenance; and the operation of one racetrack. Waste-to-Energy Operations
designs, builds, and operates, in conjunction with Operating Services, solid
waste-to-energy plants principally utilizing mass-burn technology and offers a
broad range of integrated services to recycle, manage, and market solid waste
materials.
Revenues and income from continuing operations (expressed in thousands of
dollars) for the years ended December 31, 1993, 1992, and 1991, were as follows:
<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Revenues:
Operating Services $1,358,277 $1,302,778 $1,203,327
Waste-to-Energy Operations 681,060 466,037 364,241
Total revenues $2,039,337 $1,768,815 $1,567,568
Income From Operations:
Operating Services $ 69,582 $ 64,168 $ 54,229
Waste-to-Energy Operations 77,778 69,847 69,733
Total income from operations 147,360 134,015 123,962
Corporate unallocated income
and expenses-net (10,751) (10,778) (11,424)
Corporate interest-net (11,108) (10,362) (8,344)
Consolidated Income From
Continuing Operations Before
Income Taxes and Minority
Interest $ 125,501 $ 112,875 $ 104,194
</TABLE>
Operating Services revenues include $245,100,000, $251,300,000, and
$206,300,000 from United States government contracts for the years ended
December 31, 1993, 1992, and 1991, respectively.
Total revenues by segment reflect sales to unaffiliated customers. In
computing income from operations, none of the following have been added or
deducted: unallocated corporate expenses, nonoperating interest expenses,
interest income, and income taxes.
A summary (expressed in thousands of dollars) of identifiable assets,
depreciation and amortization, and capital additions of continuing operations
for the years ended December 31, 1993, 1992, and 1991, is as follows:
<TABLE>
<CAPTION>
Identifiable Depreciation and Capital
Assets Amortization Additions
<S> <C> <C> <C>
1993
Operations Other Than
Waste to Energy:
Operating Services $ 762,016 $35,991 $ 33,917
Corporate 254,831 2,484 471
Total 1,016,847 38,475 34,388
Waste-to-Energy Operations 2,295,663 47,168 81,812
Consolidated $3,312,510 $85,643 $116,200
1992
Operations Other Than
Waste to Energy:
Operating Services $ 689,206 $32,282 $ 30,743
Corporate 276,032 2,610 25
Total 965,238 34,892 30,768
Waste-to-Energy Operations 2,222,588 42,156 33,289
Consolidated $3,187,826 $77,048 $ 64,057
1991
Operations Other Than
Waste to Energy:
Operating Services $ 669,663 $31,197 $ 30,135
Corporate 195,014 2,487 26
Total 864,677 33,684 30,161
Waste-to-Energy Operations 1,981,577 34,031 72,213
Consolidated $2,846,254 $67,715 $102,374
</TABLE>
22. LEASES
Total rental expense amounted to $73,138,000, $65,822,000, and $55,559,000 (net
of sublease income of $2,606,000, $3,633,000, and $2,520,000) for 1993, 1992,
and 1991, respectively. Included in rental expense for Operations Other Than
Waste to Energy are amounts based on contingent factors (principally sales) in
excess of minimum rentals, amounting to $19,836,000, $14,332,000, and
$13,420,000 for 1993, 1992, and 1991, respectively. Principal leases are for
leaseholds, sale and leaseback arrangements on waste-to-energy facilities,
trucks and automobiles, airplane, and machinery and equipment. Some of these
operating leases have renewal options.
The following is a schedule (expressed in thousands of dollars), by year,
of future minimum rental payments, net of income from related subleases, in the
average amount of $1,273,000 yearly through 1998, required under operating
leases that have initial or remaining noncancelable lease terms in excess of one
year as of December 31, 1993:
<TABLE>
<CAPTION>
Operations
Other Than Waste-to-
Waste to Energy
Energy Operations
<S> <C> <C>
1994 $ 39,903 $ 12,845
1995 37,955 12,447
1996 27,858 14,561
1997 24,091 13,915
1998 17,755 13,748
Later years 130,558 181,667
Total $278,120 $249,183
</TABLE>
Waste-to-Energy Operations includes $144,916,000 of future nonrecourse
rental payments that are supported by third-party commitments to provide
sufficient service revenues to meet such obligations. Operations Other Than
Waste to Energy includes future nonrecourse rental payments of $107,244,000
relating to a hydroelectric power generating facility operated by a
special-purpose subsidiary acquired in 1991. These rent payment obligations are
supported by contractual power purchase obligations of a third party, which are
expected to provide sufficient revenues to make the rent payments.
23. COMMITMENTS AND CONTINGENT LIABILITIES
Ogden and certain of its subsidiaries are contingently liable as a result of
transactions arising in the ordinary course of business and are involved in
legal proceedings in which damages and other remedies are sought. In the
opinion of management, after review with counsel, the eventual disposition of
these matters will not have a material adverse effect on Ogden's Consolidated
Financial Statements.
Ogden continues as guarantor of surety bonds and letters of credit totaling
approximately $19,200,000 on behalf of International Terminal Operating Co. Inc.
(ITO). Ogden also continues as guarantor of tax-exempt 8 1/4% Industrial
Revenue Bonds (IRBs) secured by a letter of credit, which expires June 16, 1994,
amounting to approximately $36,000,000 on behalf of Avondale Industries, Inc.
These IRBs are redeemable at the option of the bondholders or Avondale on June
1, 1994, and annually thereafter through June 1, 2001. The IRBs are subject to
a mandatory call for redemption on June 1, 1994, if the existing letter of
credit is not replaced or the IRBs otherwise refinanced. If the IRBs are
redeemed, Ogden may be required to purchase Avondale preferred stock. In
addition, Ogden may also be required to purchase Avondale preferred stock in
connection with certain litigation and income tax matters.
As of December 31, 1993, capital commitments amounted to $46,300,000, which
includes commitments for equity investments (over and above restricted funds
provided by revenue bonds issued by municipalities) of $12,300,000 for
waste-to-energy facilities and $34,000,000 for normal replacement,
modernization, and growth in Operating Services and Waste-to-Energy Operations.
<PAGE>
24. FAIR VALUE OF FINANCIAL INSTRUMENTS
The following disclosure of the estimated fair value of financial instruments
is made in accordance with the requirements of SFAS No. 107, "Disclosures About
Fair Value of Financial Instruments." The estimated fair-value amounts have
been determined using available market information and appropriate valuation
methodologies. However, considerable judgment is necessarily required in
interpreting market data to develop estimates of fair value. Accordingly, the
estimates presented herein are not necessarily indicative of the amounts that
Ogden could realize in a current market exchange.
The estimated fair value (expressed in thousands of dollars) of financial
instruments at December 31, 1993 and 1992, is summarized as follows:
<TABLE>
<CAPTION>
1993 1992
Carrying Estimated Carrying Estimated
Amount Fair Value Amount Fair Value
<S> <C> <C> <C> <C>
Assets:
Operations Other Than
Waste to Energy:
Cash and cash equivalents $ 105,539 $ 105,539 $ 108,519 $ 108,519
Marketable securities 94,247 94,086 99,938 100,123
Other Assets:
Noncurrent marketable securities 4,706 4,706 4,582 4,582
Noncurrent receivables 52,177 48,633 44,257 42,099
Other 29,808 28,709 27,092 26,068
Waste-to-Energy Operations:
Cash 3,558 3,558 7,938 7,938
Receivables 224,561 233,841 174,571 180,790
Restricted funds 359,416 366,006 419,763 424,940
Liabilities:
Operations Other Than
Waste to Energy:
Current portion of long-term debt 3,070 3,070 4,813 4,813
Accrued expenses 84,798 84,798 74,147 74,147
Long-term debt 247,640 251,587 265,007 265,007
Convertible subordinated
debentures 151,750 142,919 151,750 129,838
Other liabilities 22,539 22,539
Waste-to-Energy Operations:
Project debt 1,551,366 1,691,939 1,582,813 1,668,372
Other borrowings 28,423 19,810 28,423 14,835
Other liabilities 8,300 7,175 8,300 6,395
Off Balance Sheet Financial
Instruments:
Unrealized Gains (Losses) on
Interest Rate Swap Agreements-
Net:
Operations Other Than
Waste to Energy (402) 2,226
Waste-to-Energy Operations (430)
</TABLE>
The following methods and assumptions were used to estimate the fair value
of each class of financial instruments for which it is practicable to estimate
that value:
For cash and cash equivalents and accrued expenses, etc., the carrying
value of these amounts is a reasonable estimate of their fair value. The fair
value of long-term unbilled receivables is estimated by using a discount rate
that approximates the current rate for comparable notes. Marketable securities'
fair values are based on quoted market prices or dealer quotes. The fair value
of restricted funds held in trust is based on quoted market prices of the
investments held by the trustee. The fair value of noncurrent receivables is
estimated by discounting the future cash flows using the current rates at which
similar loans would be made to such borrowers based on the remaining maturities,
consideration of credit risks, and other business issues pertaining to such
receivables. Other assets, consisting primarily of insurance and escrow
deposits and other miscellaneous financial instruments used in the ordinary
course of business, are valued based on quoted market prices or other
appropriate valuation techniques.
Fair values for short-term debt and long-term debt are determined based on
interest rates that are currently available to the Corporation for issuance of
debt with similar terms and remaining maturities for debt issues that are not
traded or quoted on an exchange. With respect to convertible subordinated
debentures, fair values are based on quoted market prices. The fair value of
project debt is estimated based on quoted market prices for the same or similar
issues. Other borrowings and liabilities are valued by discounting the future
stream of payments using the incremental borrowing rate of the Corporation. The
fair value of the Corporation's interest rate swap agreements is the estimated
amount that the Corporation would receive or pay to terminate the swap
agreements at the reporting date. The fair value of Ogden financial guarantees
provided on behalf of ITO and Avondale Industries, Inc., (see Note 23) would be
zero because Ogden receives no fees associated with such commitments.
The fair-value estimates presented herein are based on pertinent
information available to management as of December 31, 1993 and 1992. Although
management is not aware of any factors that would significantly affect the
estimated fair-value amounts, such amounts have not been comprehensively
revalued for purposes of these financial statements since that date, and current
estimates of fair value may differ significantly from the amounts presented
herein.
25. SALE OF LIMITED PARTNERSHIP INTERESTS
In 1992, construction revenues for Waste-to-Energy Operations included
$7,700,000 from the sale of the remaining limited partnership interests and
related tax benefits in the Huntington, New York, waste-to-energy facility. In
1991, construction revenues for Waste-to-Energy Operations included $17,800,000
from the sale of limited partnership interests and related tax benefits, which
was offset by the recapture of investment tax credits and minority interest and
a provision of $6,500,000 for potential write-offs of deferred proposal costs
on facilities for which construction has not commenced.
<PAGE>
INDEPENDENT AUDITORS' REPORT
Deloitte & Touche 1633 Broadway
New York, NY 10019
The Board of Directors and Shareholders of Ogden Corporation:
We have audited the accompanying consolidated balance sheets of Ogden
Corporation and subsidiaries as of December 31, 1993 and 1992 and the related
statements of shareholders' equity, consolidated income and cash flows for each
of the three years in the period ended December 31, 1993. These financial
statements are the responsibility of the Corporation's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of the companies at December 31, 1993 and 1992
and the results of their operations and cash flows for each of the three years
in the period ended December 31, 1993 in conformity with generally accepted
accounting principles.
As discussed in Note 1 to the financial statements, in 1993 the Corporation
changed its method of accounting for postretirement benefits other than pensions
to conform with Statement of Financial Accounting Standards No. 106 and in 1992
changed its method of accounting for income taxes to conform with Statement of
Financial Accounting Standards No. 109.
/s/Deloitte & Touche
February 2, 1994
<PAGE>
OGDEN CORPORATION AND SUBSIDIARIES
REPORT OF MANAGEMENT
Ogden's management is responsible for the information and representations
contained in this annual report. Management believes that the financial
statements have been prepared in conformity with generally accepted accounting
principles appropriate in the circumstances to reflect in all material respects
the substance of events and transactions that should be included and that the
other information in the annual report is consistent with those statements. In
preparing the financial statements, management makes informed judgments and
estimates of the expected effects of events and transactions currently being
accounted for.
In meeting its responsibility for the reliability of the financial
statements, management depends on the Corporation's internal control structure.
This structure is designed to provide reasonable assurance that assets are
safeguarded and transactions are executed in accordance with management's
authorization and recorded properly to permit the preparation of financial
statements in accordance with generally accepted accounting principles. In
designing control procedures, management recognizes that errors or
irregularities may nevertheless occur. Also, estimates and judgments are
required to assess and balance the relative cost and expected benefits of such
controls. Management believes that the Corporation's internal control structure
provides reasonable assurance that errors or irregularities that could be
material to the financial statements are prevented and would be detected within
a timely period by employees in the normal course of performing their assigned
functions.
The Board of Directors pursues its oversight role for these financial
statements through the Audit Committee, which is composed solely of
nonaffiliated directors. The Audit Committee, in this oversight role, meets
periodically with management to monitor their responsibilities. The Audit
Committee also meets periodically with the independent auditors and the internal
auditors, both of whom have free access to the Audit Committee without
management present.
The independent auditors elected by the shareholders express an opinion on
our financial statements. Their opinion is based on procedures they consider
to be sufficient to enable them to reach a conclusion as to the fairness of the
presentation of the financial statements.
/s/R. Richard Ablon /s/Philip G. Husby
R. Richard Ablon Philip G. Husby
President and Senior Vice President and
Chief Executive Officer Chief Financial Officer
<PAGE>
<TABLE>
OGDEN CORPORATION AND SUBSIDIARIES
QUARTERLY RESULTS OF OPERATIONS
<CAPTION>
1993 QUARTER ENDED MARCH 31 JUNE 30 SEPT. 30 DEC. 31
(In thousands of dollars,
except per-share amounts)
<S> <C> <C> <C> <C>
Net sales and service revenues $458,491 $516,157 $540,856 $523,833
Gross profit $ 81,911 $ 86,494 $ 94,347 $ 94,556
Income before cumulative effect of
change in accounting principle $ 13,822 $ 16,092 $ 14,723 $ 17,493
Cumulative effect of change in
accounting principle (5,340)
Net income $ 8,482 $ 16,092 $ 14,723 $ 17,493
Earnings Per Common Share:
Income before cumulative effect of
change in accounting principle $ .32 $ 0.37 $ 0.34 $ 0.40
Cumulative effect of change in
accounting principle (0.12)
Total $ 0.20 $ 0.37 $ 0.34 $ 0.40
Earnings Per Common Share-Assuming
Full Dilution:
Income before cumulative effect of
change in accounting principle $ 0.31 $ 0.37 $ 0.34 $ 0.40
Cumulative effect of change in
accounting principle (0.12)
Total $ 0.19 $ 0.37 $ 0.34 $ 0.40
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
1992 QUARTER ENDED MARCH 31 JUNE 30 SEPT. 30 DEC. 31
(In thousands of dollars,
except per-share amounts)
<S> <C> <C> <C> <C>
Net sales and service revenues $414,179 $430,378 $458,591 $465,667
Gross profit $ 83,395 $ 83,665 $ 86,510 $ 81,514
Income before cumulative effect of
change in accounting principle $ 13,875 $ 14,486 $ 17,152 $ 15,254
Cumulative effect of change in
accounting principle (5,186)
Net income, as restated $ 8,689 $ 14,486 $ 17,152 $ 15,254
Earnings Per Common Share:
Income before cumulative effect of
change in accounting principle $ 0.32 $ 0.34 $ 0.40 $ 0.35
Cumulative effect of change in
accounting principle (0.12)
Total $ 0.20 $ 0.34 $ 0.40 $ 0.35
Earnings Per Common Share-Assuming
Full Dilution:
Income before cumulative effect of
change in accounting principle $ 0.32 $ 0.33 $ 0.40 $ 0.35
Cumulative effect of change in
accounting principle (0.12)
Total $ 0.20 $ 0.33 $ 0.40 $ 0.35
Notes: Net income was reduced by $.10 per share ($4.3 million) for the September 30, 1993, quarter,
reflecting the retroactive effect of the increased Federal income tax rate. The $.10 per-share reduction
includes $.08 per share for a net one-time charge due to the adjustment of prior years' deferred income
tax balances and $.02 per share for the 1% increase in tax rate for the first nine months of 1993.
The cumulative effect of changes in accounting principles reflects the adoption of SFAS No. 106,
"Employers' Accounting for Postretirement Benefits Other Than Pensions," effective January 1, 1993, and
SFAS No. 109, "Accounting for Income Taxes," effective January 1, 1992.
</TABLE>
<PAGE>
<TABLE>
OGDEN CORPORATION AND SUBSIDIARIES
PRICE RANGE OF STOCK AND DIVIDEND DATA
<CAPTION>
1 9 9 3 1 9 9 2
High Low High Low
<S> <C> <C> <C> <C>
Common:
First Quarter 24 5/8 21 1/2 24 3/8 19 1/2
Second Quarter 26 1/2 22 1/8 22 1/2 17 7/8
Third Quarter 27 21 5/8 21 3/4 18 1/2
Fourth Quarter 26 22 22 7/8 17 1/8
$1.875 Preferred:
First Quarter Not Traded 120 120
Second Quarter 146 146 129 129
Third Quarter 145 131 1/2 115 115
Fourth Quarter Not Traded 122 122
</TABLE>
Quarterly common stock dividends of $.3125 per share were paid to shareholders
of record for the four quarters of 1993 and 1992, the dividends for the last
quarters of 1993 and 1992 being paid in January of the subsequent years.
Quarterly dividends of $.8376 were paid for the four quarters of 1993 and 1992
on the $1.875 preferred stock.
Ogden common and $1.875 preferred stocks are listed on the New York Stock
Exchange.
EXHIBIT 21 12/31/93
OGDEN CORPORATION - U.S. SUBSIDIARIES
(See Attachment A for foreign subsidiaries)
PERCENT DOMESTIC
COMPANY OWNERSHIP STATE
Ogden Corporation Delaware
Ogden Management Services, Inc. 100 Delaware
OFS Equity of Babylon, Inc. 100 New York
OFS Equity of Huntington, Inc. 100 New York
Ogden Services Corporation 100 Delaware
Ogden Environmental and Energy Services Co., Inc. 100 Delaware
Analytical Technologies, Inc. 100 Delaware
ERC Energy, Inc. 100 Delaware
G A Technical Services, Inc. 100 Tennessee
Geothermal Power, Inc. 100 Delaware
Geothermal, Inc. 100 Virginia
Imperial Power Services, Inc. 100 California
Multiple Dynamics Corporation 100 Michigan
Ogden Environmental and Energy Services
Co., Inc. of Ohio 100 Ohio
Ogden Environmental & Engineering
Services Co., Inc. 100 N. Carolina
Ogden Environmental and Management
Operation Services Co., Inc. 100 Delaware
Ogden Geothermal Operations, Inc. 100 Delaware
Ogden Heber Field Energy, Inc. 100 Delaware
Ogden Hydro Energy, Inc. 100 Delaware
Catalyst New Martinsville
Hydroelectric Corporation 100 Delaware
Ogden Hydro Operations, Inc. 100 Tennessee
New Martinsville Hydro Operations Corporation 100 W. Virginia
Ogden SIGC Geothermal Operations, Inc. 100 California
QualTec, Inc. 100 Florida
Ogden Entertainment Services, Inc. 100 Delaware
Doggie Diner, Inc. 100 Delaware
Offshore Food Service, Inc. 100 Louisiana
Gulf Coast Catering Company, Inc. 100 Louisiana
Ogden Allied Maintenance Corporation of
New England 100 Mass.
Ogden Allied Security Services, Inc. 100 Delaware
Ogden American Food Services, Inc. 100 Ohio
Ogden Aviation Food Services, Inc. 100 Delaware
Air La Carte, Inc. 100 New York
Ogden-Burtco Services, Inc. 100 Washington
Alpine Food Products, Inc. 100 Washington
Ogden Facility Management of Alaska, Inc. 100 Alaska
Ogden Facility Management Corporation 100 New York
Ogden Facility Management Corporation of Anaheim 100 California
Ogden Facility Management Corporation
of California 100 California
Ogden Facility Management Corporation of Iowa 100 Iowa
Ogden Facility Management Corporation
of Pensacola 100 Florida
Ogden Food Service Corporation 100 Delaware
Ogden Confection Corporation 100 Delaware
Ogden Food Service Corporation of Connecticut 100 Connecticut
Ogden Food Service Corporation of Indiana 100 Indiana
Ogden Food Service Corporation of Kansas 100 Kansas
Ogden Food Service Corporation of Miami, Inc. 100 Florida
Ogden Food Service Corporation of Milwaukee 100 Wisconsin
Ogden Food Service Corporation of Texas 100 Texas
Ogden Food Service Corporation of Wisconsin 100 Wisconsin
Ogden Leisure, Inc. 100 Delaware
Ogden Fairmount, Inc. 100 Delaware
WDRA, Inc. 100 W. Virginia
Ogden Leisure Services of New York, Inc. 100 New York
Ogden Industrial Services, Inc. 100 Delaware
OGDEN CISCO, INC. 100 Delaware
ERC International Inc. 100 Delaware
Ogden Government Services Corporation 100 Virginia
DK Associates, Inc. 100 Delaware
ERC Field Services Corporation 100 Virginia
Logistics Operations, Inc. 100 Virginia
Ogden BioServices Corporation 100 Virginia
InterCAD Corporation 100 Maryland
W. J. Schafer Associates, Inc. 100 Mass.
Laser Corporation of America 49.92 Mass.
Laser Royalties, Inc. 100 Delaware
Lawrence Associates, Inc. 100 Delaware
Lenzar Electro-Optics, Inc. 100 Delaware
Schafer Real Estate Corporation 100 Mass.
Ogden Allied Maintenance Corporation 100 New York
Atlantic Design Company, Inc. 100 New York
Atlantic Design Technicals, Inc. 100 New Jersey
Hawaiian Building Maintenance Company, Limited 100 Hawaii
Ogden Allied Building & Airport Services Inc. 100 Delaware
Ogden Allied Building Service Corporation 100 Delaware
Ogden Allied Commercial Cleaning Systems
Corporation 100 California
Ogden Allied Eastern States Maintenance
Corporation 100 Delaware
Ogden/ERC Aviation Technology Services, Inc. 100 Delaware
Ogden Range Services, Inc. 100 Delaware
Ogden Allied Maintenance Company of Hawaii, Inc. 100 Hawaii
Ogden Allied Maintenance Corporation of
Pennsylvania 100 Delaware
Ogden Allied Maintenance Corporation of Texas 100 Texas
Ogden Allied Payroll Services, Inc. 100 New York
Ogden Allied Service Agency Corporation 100 Delaware
Ogden Allied Window Cleaning Company, Inc. 100 New York
Ogden Aviation Fueling Company, Inc. 100 Delaware
Ogden Aviation Fueling Company of Atlanta, Inc. 100 Georgia
Ogden Aviation Fueling Company of Houston, Inc. 100 Texas
Ogden Aviation Fueling Company of St. Louis, Inc. 100 Delaware
Ogden Aviation Fueling Company of Texas, Inc. 100 Texas
Ogden Aviation Fueling Company of Virginia, Inc. 100 Delaware
Ogden Aviation Service Company of Colorado, Inc. 100 Colorado
Ogden Aviation Service Company of Hawaii, Inc. 100 Hawaii
Ogden Aviation Service Company of
Kansas City, Inc. 100 Missouri
Ogden Aviation Service Company of
New Jersey, Inc. 100 New Jersey
Ogden Aviation Service Company of New York, Inc. 100 New York
Ogden Ground Services, Inc. 100 Delaware
ARA Sunset Airport Systems, Inc. 100 California
Kenworthy Air Freight Services, Inc. 100 Indiana
Ogden Aviation Service Company of
Pennsylvania, Inc. 100 Pennsylvania
Ogden Aviation Service Company of Texas, Inc. 100 Delaware
Ogden Aviation Service Company of
Washington, Inc. 100 Delaware
Ogden Aviation Service International Corporation 100 New York
Ogden Aviation, Inc. 100 Delaware
Ogden Aviation Security Services of
Indiana, Inc. 100 Indiana
Ogden Aviation Terminal Services, Inc. 100 Massachusetts
Ogden CISCO Maintenance, Inc. 100 Delaware
Ogden Consolidated Aviation Services of
Houston, Inc. 100 Texas
Ogden New York Services, Inc. 100 New York
Ogden Pipeline Services Corporation 100 Delaware
Ogden Plant Maintenance Company, Inc. 100 New Jersey
Ogden Plant Maintenance Company of Missouri 100 Missouri
Ogden Plant Maintenance Company of North Carolina 100 N. Carolina
Ogden Public Events Service Corporation 100 New York
Ogden Support Services, Inc. 100 Delaware
Tridon Supply Company, Inc. 100 New York
Ogden International Europe Inc. 100 Delaware
(See Attachment A for subsidiaries)
Ogden Resource Recovery Support Services, Inc. 100 Delaware
Ogden Plant Services of New Jersey, Inc. 100 New Jersey
Ogden Allied Abatement & Decontamination
Service, Inc. 100 New York
Ogden Projects, Inc.
(See Attachment B for subsidiaries of Ogden Projects)
Ogden Financial Services, Inc. 100 Delaware
B D C Liquidating Corp. 100 Delaware
Bouldin Development Corp. 100 California
Ogden Bulk Systems Company, Inc. 90 New York
BiE Leasing Company 100 Delaware
Greenway Insurance Company of Vermont 100 Vermont
International Terminal Operating Co., Inc. 50 Delaware
OFS Equity of Delaware, Inc. 100 Delaware
OFS Equity of Alexandria/Arlington, Inc. 100 Virginia
OFS Equity of Indianapolis, Inc. 100 Indiana
OFS Equity of Stanislaus, Inc. 100 California
Ogden Allied Financial Services Corporation 100 Delaware
Ogden Allied Maintenance Securities, Inc. 100 Delaware
Denver Fuel Facilities Corporation 100 Colorado
Kansas City International Fueling
Facilities Corporation 100 Missouri
LaGuardia Fuel Facilities Corporation 100 New York
Lambert Field Fueling Facilities Corporation 100 Delaware
Love Field Fueling Facilities Corporation 100 Texas
Newark Automotive Fuel Facilities Corporation 100 New Jersey
Ogden Allied Facilities, Inc. 100 New York
Philadelphia Fuel Facilities Corporation 100 Penn.
Rototest Laboratories, Inc. 91 California
<PAGE>
<PAGE>
12/31/93
ATTACHMENT A
OGDEN CORPORATION - FOREIGN SUBSIDIARIES
PERCENT DOMESTIC
OWNERSHIP COUNTRY
Ogden Corporation
Ogden Projects, Inc. 84.2 DE/U.S.A.
Ogden Martin Systems, Inc. 100 DE/U.S.A.
Ogden Martin Systems, Ltd. 100 Ontario
Ogden Martin Systems of Nova Scotia, Ltd. 100 Nova Scotia
Ogden Projects Holdings, Inc. 100 DE/U.S.A.
Ogden Projects (U.K.) Limited 100 U.K.
Ogden Projects (Birmingham) Limited 100 U.K.
Ogden Waste Treatment Services, Inc. 100 DE/U.S.A.
Ogden Environmental Services Limited 100 Canada
Projets Ogden Quebec Inc. 100 Quebec
Ogden Services Corporation 100 DE/U.S.A.
Ogden International Europe Inc. 100 DE/U.S.A.
Ogden Holdings B.V. 100 Netherlands
Compania General de Sondeos CGS, S.A. 100 Spain
Czech-Ogden Airhandling s.r.o. 50 Czech
Republic
Ogden Aviation Holdings (Deutschland) GmbH 100 Germany
Ogden Allied Services GmbH 100 Germany
Ogden Aviation Services GmbH & Co. KG 100 Germany
Ogden Services GmbH
Gesellschaft fur Kultur-, Medien- und
Veranstaltungsmanagement 100 Germany
Ogden Tegel Verwaltungs GmbH 100 Germany
Tegel Aircraft Handling GmbH 100 Germany
Verwaltung Ogden Aviation Services GmbH 100 Germany
Ogden Aviation (Schiphol) B.V. 100 Netherlands
Ogden Aviation Services Portugal, SA 100 Portugal
Ogden Aviation Spain S.A. 100 Spain
Ogden Environmental and Energy Services Co., Inc. 100 DE/U.S.A.
IEA of Japan Company Ltd. 50 Japan
Ogden umwelt und energie systeme GmbH 100 Germany
IEAL energie consult GmbH 100 Germany
IEAL energie + umwelt consult, Berlin 100 Germany
Olmec Insurance, Ltd. 100 Bermuda
Ogden Entertainment Services, Inc. 100 DE/U.S.A.
Ogden Entertainment Services (Canada) Inc. -
Services de Divertissements Ogden (Canada) Inc. 100 Canada
Fortier Associates International, Inc. 100 Canada
The Ogden Northmount Evergreen Group Limited 100 Canada
Ogden Entertainment Services de Mexico, SA de CV 100 Mexico
Servicios de Alimentos Bebidas Especializados,
S.A. de CV 51 Mexico
Ogden Allied Maintenance Corporation 100 NY/U.S.A.
Ogden Allied Eastern States Maintenance
Corporation 100 DE/U.S.A.
Ogden Servicios de Seguridad, S.A. 100 Costa Rica
Ogden Agencia de Seguridad, S.A. 100 Panama
Ogden Aviation Service International Corporation 100 NY/U.S.A.
Ogden Aviation Services (Australia) Pty. Ltd. 100 Australia
Ogden Aviation Services (NZ) Limited 100 New Zealand
<PAGE>
Ogden Aviation Services (Venezuela), S.A. 100 Venezuela
Servicios de Despachos Garcia, C.A. 100 Venezuela
Ogden Aviation Services (Chile) Limitada 100 Chile
(50% held by Ogden Ground Services, Inc.)
Aviation Services Leader S.A. 80 Chile
Ogden Aviation Services (Panama) Corp. 85 Panama
Ogden do Brazil Participacoes S/C Ltda. 100 Brazil
("Ogden do Brazil Holdings Ltda.")
SERVAIR Servico de Atendimento
Aeroterrestre Ltd. ("SERVAIR") 100 Brazil
Ogden & Talma Aviation Services of Peru S.A. 54 Peru
Servicios Especializados Para la Industria del
Transporte, S.A. 94.9 Mexico
SEITSA Leasing, S.A. de C.V. 94.9 Mexico
Ogden Aviation Service Company of New York, Inc. 100 NY/U.S.A.
Ogden Ground Services, Inc. 100 DE/U.S.A.
Ogden Ground Services, Inc. (St. Thomas) 100 Virgin Islands
Ogden Saint Maarten Ground Services, N.V. 100 Netherlands
Antilles
Ogden/Air Aruba Ground Services N.V. 49 Aruba
Allied Aviation Service Company of
Newfoundland, Ltd. 100 Canada
Ogden Services of Canada Inc. 100 Canada
Cafas Inc. 100 Canada
Airconsol Aviation Services Ltd. -
Les Services D'Aviation Airconsol Limitee 100 Canada
Ogden Ground Services (Canada) Ltd. 100 Canada
Aircraft Services Ltd. 100 Canada
Consolidated Aviation Fueling and Services
(Pacific) Limited 100 Canada
Consolidated Aviation Fueling of
Toronto Limited 100 Ontario
Consolidated Aviation Services of
Alberta Limited 100 Canada
Consolidated Plant Maintenance Ltd. 100 Ontario
Consolidated Plant Maintenance of
Alberta Limited 100 Canada
Ogden Allied Security Services Inc. -
Services de Securite Ogden Allied Inc. 100 Canada
Ogden Allied Services Inc. - Services
Ogden Allied Inc. 100 Canada
Ogden Aviation Services Limited 100 U.K.
Ogden Aviation Engineering Limited 100 U.K.
Ogden Aviation (UK) Limited 100 U.K.
Ogden Entertainment Services (UK) Ltd. 100 U.K.
Ogden Security Services Limited 100 U.K.
Ogden Allied (Gatwick) Limited 100 U.K.
<PAGE>
<PAGE>
12/31/93
ATTACHMENT C
OGDEN PROJECTS, INC. AND SUBSIDIARIES
PERCENT DOMESTIC
COMPANY OWNERSHIP STATE
Ogden Projects, Inc. 84.5 Delaware
Ogden Energy Resource Corp. 100 Delaware
Ogden Land Management, Inc. 100 Delaware
Ogden Land Management of Warren, Inc. 100 New Jersey
Ogden Projects of Campo, Inc. 100 California
Ogden Projects of Haverhill, Inc. 100 Massachusetts
Ogden Projects of Lawrence, Inc. 100 Massachusetts
Ogden Power Systems, Inc. 100 Delaware
Ogden Power Systems 7, Inc. 100 Delaware
Ogden Projects Holdings, Inc. 100 Delaware
Ogden Projects (U.K.) Limited 100 U.K.
Ogden Projects (Birmingham) Limited 100 U.K.
Ogden Wallingford Associates, Inc. 100 Connecticut
OPW Associates, Inc. 100 Connecticut
OPWH, Inc. 100 Delaware
Ogden Martin Systems, Inc. 100 Delaware
Grey Acre Development Corporation 100 Massachusetts
Ogden Engineering Services, Inc. 100 New Jersey
Ogden Marion Land Corp. 100 Oregon
Ogden Martin Systems, Ltd. 100 Ontario
Ogden Martin Systems of Nova Scotia, Ltd. 100 Nova Scotia
Ogden Martin Systems of Alexandria/Arlington, Inc. 100 Virginia
OMS Equity of Alexandria/Arlington, Inc. 100 Virginia
Ogden Martin Systems of Babylon, Inc. 100 New York
Ogden Martin Systems of Bristol, Inc. 100 Connecticut
Ogden Martin Systems of Clark, Inc. 100 Ohio
OMSC One, Inc. 100 Delaware
OMSC Two, Inc. 100 Delaware
OMSC Three, Inc. 100 Delaware
OMSC Four, Inc. 100 Delaware
Ogden Martin Systems of Dakota, Inc. 100 Minnesota
Ogden Martin Systems of Eastern/Central
Connecticut, Inc. 100 Connecticut
Ogden Martin Systems of Fairfax, Inc. 100 Virginia
Ogden Martin Systems of Ford Heights, Inc. 100 Illinois
Ogden Martin Systems of Haverhill, Inc. 100 Mass.
Haverhill Power, Inc. 100 Massachusetts
LMI, Inc. 100 Massachusetts
Ogden Omega Lease, Inc. 100 Delaware
Ogden Haverhill Properties, Inc. 100 Massachusetts
Ogden Martin Systems of Hillsborough, Inc. 100 Florida
Ogden Martin Systems of Hudson, Inc. 100 New Jersey
Ogden Martin Systems of Huntington, Inc. 100 New York
Ogden Martin Systems of Huntington
Resource Recovery One Corp. 100 Delaware
Ogden Martin Systems of Huntington
Resource Recovery Two Corp. 100 Delaware
Ogden Martin Systems of Huntington
Resource Recovery Three Corp. 100 Delaware
Ogden Martin Systems of Huntington
Resource Recovery Four Corp. 100 Delaware
Ogden Martin Systems of Huntington
Resource Recovery Five Corp. 100 Delaware
Ogden Martin Systems of Huntington
Resource Recovery Six Corp. 100 Delaware
Ogden Martin Systems of Huntington
Resource Recovery Seven Corp. 100 Delaware
Ogden Martin Systems of Huntsville, Inc. 100 Alabama
Ogden Martin Systems of Indianapolis, Inc. 100 Indiana
Ogden Martin Systems of Kent, Inc. 100 Michigan
Ogden Martin Systems of Knox, Inc. 100 Tennessee
NRG/Recovery Group, Inc. 100 Florida
Ogden Martin Systems of Lancaster, Inc. 100 Pennsylvania
Ogden Martin Systems of Lawrence, Inc. 100 Massachusetts
Ogden Martin Systems of Lee, Inc. 100 Florida
Ogden Martin Systems of Long Island, Inc. 100 Delaware
Ogden Martin Systems of L.A., Inc. 100 Delaware
Ogden Martin Systems of Marion, Inc. 100 Oregon
Ogden Martin Systems of Mercer, Inc. 100 New Jersey
Ogden Martin Systems of Montgomery, Inc. 100 Maryland
Ogden Martin Systems of Morris, Inc. 100 New Jersey
Ogden Martin Systems of North Carolina, Inc. 100 N. Carolina
Ogden Martin Systems of Oakland, Inc. 100 Michigan
Ogden Martin Systems of Onondaga, Inc. 100 New York
Ogden Martin Systems of Onondaga Two Corp. 100 Delaware
Ogden Martin Systems of Onondaga Three Corp. 100 Delaware
Ogden Martin Systems of Onondaga Four Corp. 100 Delaware
Ogden Martin Systems of Onondaga Five Corp. 100 Delaware
Ogden Martin Systems of Pasco, Inc. 100 Florida
Ogden Martin Systems of Rhode Island, Inc. 100 Rhode Island
Ogden Martin Systems of San Bernardino, Inc. 100 California
Ogden Martin Systems of San Diego, Inc. 100 California
Ogden Martin Systems of Stanislaus, Inc. 100 California
OMS Equity of Stanislaus, Inc. 100 California
Ogden Martin Systems of Tulsa, Inc. 100 Oklahoma
Ogden Martin Systems of Union, Inc. 100 New Jersey
Ogden Recycling Systems, Inc. 100 Delaware
Ogden Recycling Systems of Chicago, Inc. 100 Illinois
Ogden Recycling Systems of Fairfax, Inc. 100 Virginia
Ogden Recycling Systems of Indianapolis, Inc. 100 Indiana
Ogden Residuals Management, Inc. 100 Delaware
Ogden Waste Treatment Services, Inc. 100 Delaware
Ogden Environmental Services Limited 100 Canada
Ogden Environmental Services of Houston, Inc. 100 Texas
American Envirotech, Inc. 100 Texas
Stockton Soil Treatment Facility, Inc. 100 California
Projets Ogden Quebec Inc. 100 Quebec
RRS Holdings Inc. 100 Delaware
Michigan Waste Energy, Inc. 100 Delaware
Oahu Waste Energy Recovery, Inc. 100 California
Ogden Projects of Hawaii, Inc. 100 Hawaii
Resource Recovery Systems of Connecticut, Inc. 100 Connecticut
EXHIBIT NO. 24
INDEPENDENT AUDITORS' CONSENT
Ogden Corporation:
We consent to the incorporation by reference in Registration
Statement Nos. 33-8207, 33-36658, 33-38489, 33-36667, 33-36657 and
33-17558 of Ogden Corporation on Form S-8 and in Registration
Statement No. 33-45626 of Ogden Corporation on Form S-3 of our
reports dated February 2, 1994 (which express an unqualified
opinion and include an explanatory paragraph relating to the
adoption of Statements of Financial Accounting Standards No. 106 &
No. 109) appearing or incorporated by reference in this Annual
Report on Form 10-K of Ogden Corporation for the year ended
December 31, 1993.
/s/Deloitte & Touche
March 29, 1994
